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Chiikishinbunsha Parent Revises Planned FY Dividend to 2.50 Yen.Chiikishinbunsha (2164) revised full-year parent dividend estimates for the period to Aug. 31. Figures are in yen. ================================================================================ Forecast Previous Forecast ================================================================================ Full-Year Dividend 2.50 5.00 1st-Half Dividend N/A 0.00 2nd-Half Dividend 2.50 N/A ================================================================================ To contact the editor responsible for this story: Teo Chian Wei at +81-3-3201-3623 or [email protected] |
Basilea Shareholder HBM Seeks Board Seats, Share Buyback.Basilea Pharmaceutica (BSLN) AG’s biggest shareholder sought four seats on an expanded board and said the Swiss drugmaker should buy back shares after a 42 percent plunge in the stock. HBM BioVentures AG (HBMN) asked Basilea to call a special shareholders meeting by Nov. 30, the Zug, Switzerland-based fund said in a statement today. Basilea needs help with strategic decisions as it enters negotiations with potential partners, said HBM, which owns 15 percent of the Basel-based drugmaker. There’s “a total discrepancy between the value of the underlying assets in Basilea and the current share price,” HBM Chief Executive Officer Andreas Wicki said in a telephone interview. “You can argue that the current board has been in place for a long time, and sometimes it’s good to bring new competencies, fresh spirits in.” Basilea, which is seeking a partner to help develop and market its ceftobiprole antibiotic, said Oct. 3 that CEO Anthony Man and Chief Operating Officer Ronald Scott would step down from the board because the company was committed to “principles of good corporate governance.” Basilea’s board will set the date and the agenda of the next meeting and “publish the invitation in due course,” the company said in a separate statement today. The meeting probably will take place around the end of November, the company said. Proposed Candidates HBM proposed Thomas Werner, a former GlaxoSmithKline Plc executive; Seng Chin Mah, formerly of Novartis AG; Thomas M. Rinderknecht, a corporate lawyer; and a fourth candidate yet to be named for the board. Basilea rose 2.60 Swiss francs, or 7 percent, to 39.65 francs as of 4:18 p.m. in Zurich trading, giving the company a market value of 380.1 million francs ($412 million). Before today, the stock had fallen 42 percent in the past year. HBM, which owns shares in about 25 health-care companies, said that given Basilea’s “excessively low share price, we expect the board of directors to seriously consider repurchases of the company’s shares.” Basilea, which plans to apply next year for approval of ceftobiprole as a treatment for pneumonia, had 243.3 million Swiss francs in cash and short-term bank deposits as of June 30, according to a regulatory filing. “There is no need to retain that much cash, as the company is sufficiently financed to bring ceftobiprole to market in pneumonia as a first indication,” Olav Zilian, an analyst with Helvea SA in Geneva, said in a telephone interview. Roche Spinoff Basilea was spun off from Roche Holding AG in 2000, the same year Henri Meier quit as Roche’s chief financial officer to form HBM, a fund that went public in February 2008. Meier remains the honorary chairman. “It’s in the interests of all shareholders that the current tech value that is almost inexistent is recognized and brought to fruition,” HBM CEO Wicki said today. HBM has owned shares in Basilea since the company’s initial public offering in 2004, and sold 60 percent of its stake in 2007, when the stock reached a record of 282.25 francs, Wicki said. HBM has “dramatically expanded” its position in Basilea in the past six months, he said, and held 15 percent of the stock as of Sept. 14, overtaking Basel-based Roche as the company’s biggest shareholder. Basilea is HBM’s largest holding by value, Wicki said. To contact the reporter on this story: Phil Serafino in Paris at [email protected] To contact the editor responsible for this story: Phil Serafino at [email protected] |
Freddie Mac to Redeem Step-Coupon Notes Due 2015.The following issue is being redeemed via the company's call option: Issuer: Freddie Mac Coupon: Step-Coupon Maturity: Oct. 15, 2015 Redemption Amount: $50 million Redemption Price: 100 percent Amount Remaining: Fully Retired Security ID: 3134G1VQ4 Effective Date: Oct. 15, 2011 |
Mexico Bill on Per-Second Call Rates Approved by Lower House.Mexico ’s lower house of Congress approved legislation forcing telecommunication carriers to let customers pay for calls per second instead of rounding to the nearest minute. With 327 votes in favor, none against and one abstention, lawmakers amended a bill to require carriers to offer calls billed by the second. The per-second rates must be competitive with plans that offer packages of minutes at a flat rate, according to the legislation. Mexican lawmakers and regulators are putting pressure on wireless carriers to reduce prices for consumers. Earlier this year, the nation’s Federal Telecommunications Commission forced America Movil SAB and Telefonica SA (TEF) , the nation’s largest mobile-phone carriers, to cut rates charged to connect calls from other carriers. America Movil , the Mexico City-based company controlled by billionaire Carlos Slim , has about 70 percent of Mexico’s wireless subscribers. Madrid-based Telefonica has 22 percent. To become law, the bill must also be approved by the Senate and would require President Felipe Calderon’s signature. To contact the reporters on this story: Adriana Lopez Caraveo in Mexico City at [email protected] ; Crayton Harrison in Mexico City at [email protected] To contact the editor responsible for this story: Peter Elstrom at [email protected] |
Tanzania Shilling Falls a 3rd Day on Manufacturer Dollar Demand.Tanzania’s shilling depreciated for the third day as manufacturers increased demand for dollars. The currency of East Africa ’s second-biggest economy lost as much as 0.8 percent at 1,687 per dollar, and traded down 0.1 percent at 1,675 by 12:33 p.m. in Dar es Salaam, the commercial capital. “We have seen demand come in from the manufacturing sector today,” Eric Chijoriga, a trader with National Bank of Commerce Ltd., Absa Group Ltd.’s Tanzanian unit, said by phone from Dar es Salaam. Tanzania exported $242.2 million worth of manufactured goods in three months through June compared to $206.1 million in the previous quarter, according to a report e-mailed from Bank of Tanzania Sept. 19. Tanzania’s inflation rate climbed to 14.1 percent in August on higher energy and food costs, the National Bureau of Statistics said Sept. 15. To contact the reporter on this story: David Malingha Doya in Dar es Salaam via Nairobi at [email protected] To contact the editor responsible for this story: Antony Sguazzin at [email protected] |
Dolphins’ Henne to Miss Season After Having Shoulder Surgery, NFL.com Says.Miami Dolphins quarterback Chad Henne will undergo season-ending shoulder surgery, the National Football League reported on its website. The Dolphins are in their bye week and won’t play until Oct. 17 against the New York Jets. To contact the editor responsible for this story: Jay Beberman at [email protected] |
Arrested Wall Street Protesters Seek Talks With City Over Police Tactics.A lawyer for anti-Wall Street protesters arrested in a march across New York ’s Brooklyn Bridge said her clients hope to talk with city representatives to resolve what she called a “pattern and practice of police misconduct.” Five protesters sued the city, Mayor Michael Bloomberg and Police Commissioner Raymond Kelly Oct. 4 for allegedly violating their civil rights in the Oct. 1 arrests. The protesters, who seek to sue on behalf of about 700 people arrested in the march, claimed police lured them onto the bridge’s roadway to trap and arrest them. In a hearing before U.S. District Judge Jed Rakoff in Manhattan today, attorney Mara Verheyden-Hilliard said the protesters may ask for a court order to force the New York City Police Department to change its tactics if they can’t reach agreement with the city. The protesters, whose demonstration continued today in Lower Manhattan , are seeking a declaration nullifying the arrests and saying that the police violated the U.S. Constitution. They want Rakoff to bar the city from using similar tactics in the future. The group is seeking unspecified compensatory and punitive damages. Rakoff said he expects the case to be tried by June. He set Dec. 7 for arguments on an anticipated request by the city to have the case dismissed. Kate O’Brien Ahlers, a spokeswoman for the city’s Law Department, had no immediate comment on the suit. The mayor is founder and majority owner of Bloomberg LP, parent of Bloomberg News. Police have said protesters were warned not to block the roadway and that those at the rear were allowed to leave. The case is Garcia v. Bloomberg, 11-06957, U.S. District Court for the Southern District of New York ( Manhattan ). To contact the reporters on this story: Bob Van Voris in New York at [email protected]. To contact the editors responsible for this story: Michael Hytha at [email protected] . |
HSBC Lowers Asian Growth Estimates on Threats to Exports, Market Turmoil.HSBC Holdings Plc (5) cut its economic growth estimates for most Asian economies, citing threats to exports and the impact of sliding stocks and currencies. Europe’s debt crisis and a struggling U.S. expansion signal Asian exports “will almost certainly take a large hit,” HSBC said in a report received today. Domestic demand “will also throttle down” as currencies and capital markets fall, with Asia excluding Japan growing 7.3 percent in 2011 and 2012, lower than earlier projections of 7.5 percent for both years, it said. HSBC joins Goldman Sachs Group Inc. in dimming its Asian outlook after Europe’s plight and the threat of a recession in the U.S. roiled global markets. While the expansion in Asia will slow, Chinese growth will “hold up” and regional liquidity is “ample,” which should help avert a sharper deceleration, according to HSBC. “The risks are certainly rising with every week that policy uncertainty persists in the West,” Hong Kong-based Frederic Neumann, co-head of Asian economics at the bank, said in the report. Still, Asia “may just avoid cracking under pressure” aided by China, he said. HSBC cut its 2011 and 2012 projections for gross domestic product growth in Hong Kong , Indonesia, South Korea , Malaysia, Singapore , Taiwan, Thailand and Vietnam. It lowered 2012 predictions for Japan and New Zealand. Europe’s biggest bank left its 2011 and 2012 estimates for China, India, Australia and the Philippines unchanged. It predicts 8.9 percent growth in China this year and an 8.6 percent expansion next year. Interest-Rate Pause Emerging-market central banks from China to Brazil have left interest rates unchanged in recent weeks or cut borrowing costs to shield expansion. About $8.4 trillion has been wiped off stocks worldwide this year on concern the global economy faces a slump. Asia is capable of injecting stimulus if another financial crisis flares, Nicholas Kwan, the Hong Kong-based regional head of research at Standard Chartered Plc, said in a report today. That would help lift Asia out of any “deep” recession, he said. The region remains “too small to single-handedly lift the world out of recession,” he also said. Goldman Sachs this week reduced its global growth estimates for 2011 and 2012, predicting recessions in Germany and France as the European economy stalls and the risk of a contraction in the U.S. grows. It reduced its 2012 economic growth prediction for Asia excluding Japan to 7.1 percent from 7.8 percent. To contact the reporters on this story: Sophie Leung in Hong Kong at [email protected] ; Stephanie Phang in Singapore at [email protected] To contact the editor responsible for this story: Paul Panckhurst at [email protected] |
Ex-Celtics Star Bill Russell Sues NCAA, Electronic Arts Over Image Use.William “Bill” Russell, former star center for the National Basketball Association ’s Boston Celtics , accused the National Collegiate Athletic Association of using his likeness from his college playing days without paying him or seeking his consent. The complaint is the latest to claim the NCAA violates federal antitrust laws by keeping former student basketball and football athletes from receiving compensation for the commercial use of their images and likenesses. The association has denied wrongdoing in those cases. Electronic Arts Inc., the second-largest U.S. video-game maker, is also named as a defendant in the lawsuit, filed yesterday in federal court in Oakland, California. Russell accuses it of using his image in a “Tournament of Legends” feature on an NCAA basketball video game. Russell, who led the University of San Francisco to NCAA championships in 1955 and 1956, said in the complaint that the association sells $150 videos of the team’s championship games. At least 54 clips featuring him are available through the website of the NCAA’s for-profit business partner and photos of him through an NCAA online store, according to the complaint. Russell, 77, is seeking a court order blocking further sale of the videos and video games, plus disgorgement of profits from them and unspecified damages. Post-College Endorsements The NCAA owns and licenses the copyright on the NCAA games cited in the complaint, said Donald Remy, the association’s general counsel. The NCAA doesn’t restrict athletes from profiting from their college accomplishments through post- college commercial endorsements and other ventures, he said in an e-mail today. “Mr. Russell, like the thousands of other student-athletes who played the game, can capitalize on his likeness, reputation, athletic and academic successes as a student-athlete after college,” the e-mail said. Russell’s complaint and similar lawsuits “would cause the NCAA to lock up its archive of championship contests, and they would be held hostage unless every student-athlete, coach, band member, cheerleader and fan in a photo or camera shot received compensation,” Remy said. “That is not how the law works nor should it be.” Jeff Brown , an Electronic Arts spokesman, didn’t respond to a voice mail seeking comment on the lawsuit. Ed O’Bannon Russell’s claims will probably be consolidated with a pending lawsuit brought by former University of California , Los Angeles , basketball star Ed O’Bannon on behalf of other former NCAA players against the association and Redwood City , California-based Electronic Arts, according to the complaint. “ Bill Russell , one of the greatest NCAA, NBA and Olympic basketball players in history, joins the lawsuit brought by Ed O’Bannon alleging that the NCAA has violated federal antitrust law by unlawfully foreclosing former Division I men’s basketball and football players from receiving any compensation related to the commercial use of their images and likenesses,” Jon King, an attorney for the former players, said yesterday in an e-mail. O’Bannon alleges that the NCAA and Electronic Arts worked together to violate former student-athletes’ rights to control and profit from the use of their images. The NCAA and Electronic Arts have denied wrongdoing in that case. The company has said in court filings that the constitutional right to free speech under the First Amendment means it doesn’t need permission to use the players’ likenesses because the videos have enough creative elements that, as a whole, they are more than a depiction of any one athlete. Virtual Players The games allow users to create their own plays and players’ likenesses are only some of thousands of virtual players in a game that contains other audio, visual and engineering elements, Electronic Arts said in court documents. Russell won 11 NBA titles with the Celtics. He was a five- time NBA Most Valuable Player and is second on the career list for rebounds with 21,620, trailing only Wilt Chamberlain, his rival throughout the 1960s. The case is Russell v. NCAA, 11-04938, U.S. District Court, Northern District of California (Oakland). To contact the reporter on this story: Karen Gullo in San Francisco at [email protected] To contact the editor responsible for this story: Michael Hytha at [email protected] |
Hungary Yields Jump to Nine-Month High at Bond Auction.Hungarian bond yields climbed to the highest since January at an auction on speculation the central bank may raise borrowing costs to defend the currency. The state raised 20 billion forint ($90 million) in notes maturing in 2014 at an average yield of 7.23 percent, the highest since Jan. 13, and compared with 6.65 percent at the last sale on Sept. 22, according to auction results from the Debt Management Agency published on Bloomberg. The agency sold 11 billion forint of 2017 bonds at 7.52 percent, against 7.25 percent two weeks ago. Traders in interest-rate derivatives raised bets on tighter monetary conditions as the forint’s decline threatened to drive up inflation and payments on foreign-currency loans. The forint slid to as weak as 300.7 per euro yesterday, its weakest in 2 1/2 years, before recovering to 297.5 per euro as of 4:20 p.m. today. “An interest-rate increase has been priced in recently,” Sandor Jobbagy, a Budapest-based economist at the CIB Bank Zrt. unit of Intesa Sanpaolo SpA, said in a telephone interview after the auction. Forward-rate agreements fixing three-month interest in one month surged to 6.49 percent two days ago, a two-year high, from 6.07 percent a month earlier. They fell to 6.38 percent today, trading 27 basis points, or 0.27 percentage point, above the three-month Budapest interbank offered rate. Rate Risks The National Bank of Hungary on Sept. 20 left its benchmark two-week deposit rate unchanged for an eighth month. The majority of policy makers considered that the deteriorating global risk environment is preventing policy makers from cutting the interest rate even as the inflation outlook may justify such a move, according to minutes of the meeting. “There are risks that further strong depreciation of the currency and an increase of risk spreads could trigger a rate hike,” Zoltan Arokszallasi, a Budapest-based fixed-income analyst at Erste Group Bank AG, wrote in a research report today. “This is not currently our baseline scenario.” Investors bid for 83 billion forint in debt at the auction, compared with 122.5 billion forint two weeks ago. The agency also sold 12 billion forint of 2022 notes at 7.94 percent, down from 8.14 percent. The agency sold no additional debt at a later, non-competitive tender. Three-year bonds fell for the first day in three in the secondary market, with yields rising five basis points to 7.300 percent. Yields on the 2017 debt fell for a third day, losing 12 basis points to 7.650 percent. On the 2022 notes, yields retreated 12 basis points to 8.038 percent. Budget Target Concern Concern that Hungary won’t meet its budget targets also drove up borrowing costs, Jobbagy said. “Trends in the real economy would justify a rate cut, while financial stability factors point to tightening,” according to Jobbagy. Hungary’s 2012 budget, which the government sent to parliament last week, assumes growth in gross domestic product of 1.5 percent, underlying a plan to cut the deficit to 2.5 percent of GDP from 4.2 percent last year. The Cabinet’s growth projection may be too optimistic, according to economists including Matyas Kovacs at Raiffeisen Bank International AG. To contact the reporter on this story: Andras Gergely in Budapest at [email protected] To contact the editor responsible for this story: Gavin Serkin at [email protected] |
Australian, N.Z. Dollars Rise 4th Day on U.S. Payrolls, Optimism on Europe.The Australian and New Zealand dollars rose for a fourth day against the U.S. currency after a government report showed American employers added more jobs in September than forecast, increasing risk appetite. “This was an upside surprise that helps support the risk rally we’ve seen this week and a softer U.S. dollar ,” said Mary Nicola , a New York-based currency strategist at BNP Paribas SA, referring to the U.S. jobs data. It was the longest winning streak in more than a month for the two currencies. The Aussie rose against the majority of its 16 most-traded peers after the European Central Bank yesterday reintroduced yearlong loans for banks and the Bank of England boosted its asset-purchase plan. German Chancellor Angela Merkel and French President Nicolas Sarkozy meet Oct. 9. Both South Pacific currencies rose this week versus the dollar and yen. Australia’s currency rose 1 percent to 98.39 U.S. cents at 11:50 a.m. in New York , from 97.46 cents yesterday, gaining 1.9 percent for the week. It climbed 1 percent to 75.51 yen, from 74.78 yesterday. New Zealand’s dollar, nicknamed the kiwi, gained 0.6 percent to 77.60 U.S. cents, from 77.17 cents yesterday, and rose 1.9 percent for the week. It increased 0.6 percent today to 59.58 yen, from 59.20. The kiwi gained 1.1 percent over the past week, the best performer among 10 developed-nation peers tracked by Bloomberg Correlation-Weighted Indexes. Australia ’s currency strengthened 1 percent. The MSCI World index of stocks rose 0.6 percent. U.S. Job Gain U.S. payrolls climbed by 103,000 workers after a revised 57,000 increase in the prior month that was more than originally estimated, Labor Department data showed today in Washington. The median forecast in a Bloomberg News survey called for a rise of 60,000. The jobless rate held at 9.1 percent. The ECB said yesterday it will reintroduce yearlong loans, giving banks access to unlimited cash through January 2013, and resume purchases of covered bonds to encourage lending. At the same time, the European Commission is pushing for a coordinated capital injection into banks. To contact the reporter on this story: Candice Zachariahs in Sydney at [email protected] To contact the editor responsible for this story: Dave Liedtka at [email protected] |
Barroso Says EU Proposing Coordinated Action to Capitalize Banks.European Commission President Jose Barroso said the commission is proposing coordinated action to recapitalize banks. “We are now proposing to the member states to have a coordinated action to recapitalize banks and so to get rid of toxic assets that they may have,” Barroso said today in a video question-and-answer session. To contact the reporter on this story: Rebecca Christie in Brussels at [email protected] To contact the editors responsible for this story: Jones Hayden at [email protected] ; Craig Stirling at [email protected] |
Russia’s Piggy Race Canceled on Threat of African Swine Fever.Russia ’s food safety watchdog canceled the Ninth Piggy Olympiad because of the African Swine Fever risks, Tatyana Kolchanova, vice president of the country’s Sports Pig-Breeding Federation said. The race with 12 trained pigs at the Golden Autumn agricultural exhibition in Moscow on Oct. 14-16 will not be held, Kolchanova said by phone today. The service, known as Rosselkhoznadzor, banned the event and any kind of hog demonstration at the exhibition “because of the direct threat of ASF expansion on territory of the Russian Federation,” according to the order published on the service’s website yesterday. ASF is a virus that kills pigs and for which there is no vaccine. The disease, which is harmless to people, killed 20,000 pigs in southern Russia in the first half of the year, according to Rosselkhoznadzor data. To contact the reporter on this story: Marina Sysoyeva in Moscow [email protected] To contact the editor responsible for this story: Claudia Carpenter at [email protected] |
U.S. August LoanPerformance Home Price Index by State.Following are the 12-month transaction based price changes for single family homes by state from LoanPerformance. Source: First American LoanPerformance HPI To contact the reporter on this story: Alex Tanzi in Washington at [email protected] To contact the editor responsible for this story: Marco Babic at [email protected] |
Asia Fuel-Oil Discount Widens; Gasoil Crack Drops: Oil Products.Asia fuel oil sank to the biggest discount to crude in six days, signaling growing losses for refiners turning oil into residual products. Gasoil’s crack spread, a measure of processing profit, fell. Fuel Oil Fuel oil’s discount to Asian marker Dubai crude widened 9 cents to $3.51 a barrel at 12:45 p.m. Singapore time, according to PVM Oil Associates Ltd., a broker. That’s the largest gap since Sept. 28, when a fire in Singapore prompted Royal Dutch Shell Plc to shut its largest refinery globally and suspend some fuel exports. High-sulfur fuel oil swaps for November added $9.50, or 1.6 percent, to $610.50 a metric ton, PVM data showed. Prices snapped a five-day losing streak. The premium of 180-centistoke fuel oil to 380-centistoke grade was unchanged after decreasing to $7.25. A narrower viscosity spread indicates bunker, or marine fuel, has gained more than higher-quality fuel oil. Middle Distillates The premium of gasoil, or diesel, to Dubai crude fell 80 cents to $16.87 a barrel, according to PVM. This crack spread was the narrowest since Sept. 28. November gasoil swaps rose 75 cents, or 0.7 percent, to $114.30 a barrel, PVM said. Jet fuel’s premium to gasoil climbed 10 cents to $2.60. This regrade has increased 53 percent so far this week, meaning it is more profitable to make aviation fuel over diesel. Light Distillates Japan ’s open-specification naphtha forward contracts for first-half November delivery were bid at $866.50 a ton against offers at $869.90, according to Ginga Petroleum Singapore Pte, a broker. This signals the petrochemical feedstock may advance after closing at $856.75 yesterday. Naphtha’s premium to London-traded Brent crude futures, also known as the crack spread, was up $3.16 at $85.95 a ton, based on data compiled by Bloomberg. Yesterday, it dropped to the narrowest since Aug. 5. Gasoline’s premium to naphtha yesterday rallied to $23.40 a barrel, the highest since May 6, Bloomberg data showed. A widening reforming margin indicates motor fuel is more profitable to produce. To contact the reporter on this story: Yee Kai Pin in Singapore at [email protected] To contact the editor responsible for this story: Paul Gordon in Hong Kong at [email protected] . |
PCCW Said to Plan Early November Hong Kong Listing for Trust.PCCW Ltd. (8) plans to list its telecommunications business trust in the first week of November if shareholders approve the deal at a meeting next week, two people with knowledge of the matter said. The phone company may start gauging investor demand for its HKT Trust in mid-October, pending approval by an extraordinary general meeting on Oct. 12, said the people, who declined to be identified because the information is private. PCCW, the biggest phone carrier in Hong Kong , may raise more than HK$10 billion ($1.3 billion) from the initial public offering to repay debt and fund investments, the company said in a statement on Sept. 25. PCCW may sell 36.7 percent of the units in HKT Trust in the IPO, according to the statement. Billionaire Chairman Richard Li aims to lure investors to Hong Kong’s first business trust by offering to pay out a higher proportion of income from PCCW units including fixed-line phone services and broadband Internet as dividends. A global stock market rout caused companies including Sany Heavy Industry Co. to delay or cancel share sales in the past month. Anita Choi, a spokeswoman at PCCW in Hong Kong, declined to comment on the listing timetable. To contact the reporters on this story: Fox Hu in Hong Kong at [email protected] ; Mark Lee in Hong Kong at [email protected]. To contact the editor responsible for this story: Philip Lagerkranser at [email protected] |
CEOs Seeking Respect Must First Restore Lost Trust: Ezra Klein.To most Americans, it looks as if there’s never been a better time to be rich. The top 1 percent takes in 24 percent of the national income and holds 40 percent of the national wealth. Neither jobs nor housing prices have rebounded in the aftermath of the financial crisis, but corporate profits have generally been strong. The S&P 500 , though volatile, has weathered the crisis relatively well, today standing roughly where it was at the beginning of October 2008. Talk with some of those in the top 1 percent, though, and they make it sound as if there’s never been a worse time to be rich. At a medical-innovation conference in Cleveland this week, I heard chief executive officers complain about being treated like “criminals,” about profit being regarded as intrinsically suspicious, about the president saying unkind things about oil companies , about exemplars of hard work and success being viewed as greedy rather than productive. Like Rodney Dangerfield, the rich may be making money, but what they really want is respect. Even worse, they said, was the fact that their every suggestion for getting the economy back on track was denounced as a self-serving grab for more profits. Shouldn’t it be obvious to everyone that it’s better to give corporate America a tax holiday for overseas income, because otherwise the money will never return home? Isn’t it clear that we need more high-skills visas for foreigners? Have we seen the airports in Asia ? Doesn’t the U.S. realize that if Germany and China and South Korea roll out the red carpet for companies, giving them every tax advantage and regulatory break to locate there, that the U.S. must up the ante? The CEOs have a point. Not on the tax holiday for overseas income -- that’s a scam. But the U.S. could make it easier to do business here. We do need more high-skills visas. We do need to reform our tax code , reduce our deficit, upgrade our education system and repair our infrastructure. We even need to compete with the incentives these companies receive to relocate their factories and research centers; it’s a fact of the modern economy, and we can’t pretend otherwise. No Trust But the self-pitying, self-righteous tone of these complaints misses the big picture, and makes the underlying problem worse: The rest of America doesn’t trust corporate America right now. The rich have been getting fabulously richer, corporate America is sitting on trillions in cash reserves, and where has that gotten the rest of the country? A shabby, jobless recovery in the early Aughts, followed by a credit bubble, followed by a crash in which ordinary Americans had to bail out Wall Street , followed by the worst economy in generations. We used to have a deal: A rising tide lifted all boats. These days, a few gleaming yachts power comfortably past the wreckage of smaller vessels. As my Washington Post colleague Peter Whoriskey reported this week, executive pay at the country’s largest companies has more than quadrupled since the 1970s. Median wages have stagnated through much of that time and declined since the crisis. That’s why corporate America’s solutions are looked on with suspicion. Executives say corporate-tax reform and more immigration would be good for the economy? Well, they said that about the Bush tax cuts along with financial deregulation, the rise in housing prices and credit-default swaps, too. But that era ended with Main Street a shambles and Wall Street richer than ever. Fool me once, and all that. Anyone interested in the capital-gains tax and the marginal rate on income over $250,000 should spend an hour or two paging through the stories at WeAreThe99Percent.tumblr.com. The blog, which posts pictures of people holding signs describing their situation, is a powerful primer on the very real sense of betrayal rippling through the country. It’s about this point in the discussion that someone raises the “class warfare” flag. After all, isn’t that website associated with Occupy Wall Street , the vaguely anti-big- business protests spreading from New York to other cities? Come to think of it, Mitt Romney , the Republican presidential candidate whose campaign estimates he’s worth between $190 million and $250 million -- would that we all had such a margin of error -- called those protests “class warfare” just this week. But that’s why the site deserves to be read. These people aren’t trying to start a class war. They’re just trying to figure out how to stop losing in today’s economy. They took out loans to go to college, they worked two jobs, they saved for a home, they did everything they were supposed to do to get ahead and now they’re buried in debt, making minimum wage while the Wall Street whiz kids who crashed the economy in the first place saw their firms nursed back to profitability with the aid of taxpayer bailouts. Broken Promises There’s no easy way to make this right. Politicians sometimes exhort companies to stop sitting on capital, but corporations can’t spend without customers. They can’t hire without demand. Taxing millionaires won’t resolve the deficit (though it wouldn’t hurt). There’s no grand gesture that can make up for a decade of economic pain and broken promises. But the problem isn’t that politicians are mean to corporate America and that no one listens to their great ideas. It’s that corporate America -- and, yes, the federal government |
Brazil to Offer 650,000 NTN-F, 5.5 Million LTN At Auction Today.Brazil will offer at an auction today as many as 500,000 NTN-F maturing in 2017 and as many as 150,000 NTN-F due in 2021, according to a statement posted on the Treasury website. The Treasury will also offer as many as 500,000 LTN bills due April 2012, 3.5 million LTNs maturing Jan. 2014 and 1.5 million LTN due Jan. 2015, according to the statement. To contact the reporter on this story: Telma Marotto in Sao Paulo at [email protected] To contact the editor responsible for this story: Leonardo Lara at [email protected] |
Turkish Central Bank Sells $350 Million, Gets Record Bids.Turkey ’s central bank sold $350 million for liras in an auction, selling about a quarter of the $1.35 billion it said it may offer. The central bank in Ankara got $2.04 billion of bids in the auction, the most since the daily auctions began on Aug. 5, according to data published on the bank’s website today. Governor Erdem Basci sold $750 million yesterday, a record amount for such a sale, as it sought to defend the currency after it fell to a record low of 1.9096 on Aug. 4. The lira pared earlier gains, rising 1.1 percent to 1.8478 per dollar at 2:25 p.m. in Istanbul. Today’s sale equals the amount sold on Sept. 20., the day after the lira declined to 1.8 per dollar To contact the reporter on this story: Aydan Eksin in Istanbul at [email protected] To contact the editor responsible for this story: Mark Bentley at [email protected] |
Italy’s Austerity Efforts Are a ‘Work in Progress,’ Trichet Says.Italy’s efforts to reduce its budget deficit remain a “work in progress” even after the passage of a 54 billion-euro package of austerity measures, European Central Bank President Jean-Claude Trichet said. “There have been some decisions that have been taken in pricinciple, then they were a little bit challenged and then finally implemented,” Trichet said at a press conference in Berlin. “This is of course a work in progress.” Trichet said the bank “insists on structural measures.” To contact the editor responsible for this story: Andrew Davis at [email protected] |
Gerrresheimer Raises 2011 Sales Goal on ‘Strong Burst of Growth’.Gerresheimer AG (GXI) increased its sales forecast for the year after a “strong burst of growth” in the third quarter. It now expects sales to rise as much as eight percent compared with a previous target of as much as seven percent. To contact the editor responsible for this story: Angela Cullen at [email protected] |
Trichet Says ECB to Be Totally Faithful to Mandate Under Draghi.European Central Bank President Jean- Claude Trichet said the ECB will continue to deliver price stability under his successor Mario Draghi. “I think the central bank will continue to be totally faithful to its mandate,” Trichet said in an interview with Bloomberg Television in Berlin today, after the ECB kept its benchmark interest rate at 1.5 percent. “We always do what we judge necessary to deliver price stability.” Trichet announced earlier today that the ECB will resume its covered-bond program next month and offer banks loans of up to 13 months to fight the crisis. The Frankfurt-based central bank also committed to lend banks unlimited liquidity for up to three months through the first half year of 2012. “We took a very important decision on the non-standard measures and we trusted that this was extremely important in the present circumstances,” Trichet said. As regards the government-bond plan “I only say that it’s” ongoing. Trichet, who will step down as ECB president at the end of the month, also called for a “fierce application” of the reforms governments agreed on at a July 21 summit of leaders. To contact the reporters on this story: David Tweed in Tokyo at [email protected] ; Christian Vits in Frankfurt at [email protected] To contact the editor responsible for this story: Craig Stirling at [email protected] |
Biggest S&P 500 Rally Since 1998 Seen by Barclays, UBS Evading Bear Market.Wall Street strategists say the Standard & Poor’s 500 Index, after falling within 1 percent of a bear market this week, will post the biggest fourth-quarter rally in 13 years even after they cut forecasts at a rate exceeded only during the credit crisis. The benchmark index for U.S. stocks will climb 14 percent from yesterday to end 2011 at 1,300, according to the average estimate of 12 strategists surveyed by Bloomberg. The last time they were this bullish in October was 2008, when the group predicted a 27 percent gain and the index lost 18 percent. Analysts from Oppenheimer & Co. to UBS AG and Barclays Plc say equities will rebound from a decline of 19 percent since April as policy makers prevent a default by Greece and profit in the S&P 500 climb to $95.85 a share in 2011. Europe’s worsening debt crisis and the U.S. government’s loss of its AAA credit rating led strategists to cut their S&P 500 forecast in the past two months from an average level of 1,401. “Investors are way too bearish and are being swayed by macro variables,” Brian Belski , the New York-based chief investment strategist at Oppenheimer, wrote in an e-mail on Oct. 4. “Fundamentals drive stocks,” he said. “U.S. portfolios are not positioned for a positive third-quarter earnings season.” Services Expanded A report showing U.S. services industries expanded faster than economists predicted in September and speculation Europe will contain losses tied to sovereign debt pushed the S&P 500 up 1.8 percent to 1,144.03 yesterday. After falling to 1,074.77 intraday on Oct. 4, the index surged 6.4 percent through yesterday. The S&P 500 rallied 1.8 percent to 1,164.97 today. Belski is sticking to his forecast from December that the S&P 500 will end this year at 1,325, up 16 percent from yesterday’s closing level. When he gave his prediction, the average strategist projection for the end of 2011 was 1,379, according to data compiled by Bloomberg. Strategists shouldn’t be so optimistic given the severity of the European debt crisis, said Eric Teal, chief investment officer at First Citizens Bancshares Inc., which manages $4 billion in Raleigh, North Carolina. “The best case is we establish a foundation with some modest gains in the fourth quarter, but it’s too optimistic” to expect a rally, he said. Strategists “need to better assess the European debt situation,” Teal said in a telephone interview yesterday. “The general trend is downward.” Kostin Cuts Estimates Goldman Sachs Group Inc.’s David Kostin cut his price estimate for the S&P 500 in 2011 this week for the third time in three months, reducing it to 1,200 from 1,250. While the U.S. will likely avoid a recession, the economic recovery is stagnating, according to the equity strategist. “The unstable macro environment is likely to persist for the foreseeable future,” Kostin wrote in an Oct. 4 report. “Investors believe a non-trivial probability exists that the crisis will trigger a global financial dislocation similar to 2008.” Wall Street firms stuck with bullish forecasts through the beginning of August as the S&P 500 tumbled amid concern U.S. lawmakers would fail to reach an agreement with President Barack Obama to raise the nation’s debt limit. The index fell 11 percent between July 22 and Aug. 5. Strategists kept their average forecast at 1,401 from July 6 through Aug. 8, when it was cut to 1,389. The measure retreated to an 11-month low of 1,119.46 on Aug. 8 after S&P cut the American credit rating. Solving Greece Stocks will rebound as investors become convinced leaders in Europe can solve the sovereign crisis, according to UBS’s Jonathan Golub. The cost to rescue Europe’s banks may reach $2 trillion for governments and private partners, BlackRock Inc. (BLK) Chairman and Chief Executive Officer Laurence D. Fink said yesterday at an event in Toronto. “Worst-case outcomes are not going to play through,” Golub said in a telephone interview on Oct. 4. “You have 17 countries that have to coordinate their actions, which makes the process more cumbersome, but that doesn’t mean they can’t come to a resolution.” Golub said in December that the S&P 500 would end this year at 1,325. He raised the estimate to 1,425 in February before cutting it to 1,350 last month, an 18 percent rise from yesterday’s closing level. Golub said in 2010 the S&P 500 would finish the year at 1,350 before reducing that estimate to 1,150 in July. The gauge rallied 13 percent to 1,257.64 last year. Russia Default The stock index jumped 21 percent in the fourth quarter of 1998 after Russia’s default, which caused the collapse of hedge fund Long-Term Capital Management and sent the S&P 500 down 15 percent in August. The measure slumped 12 percent in August and September of this year. Global equities entered a bear market on Sept. 22, after the MSCI All-Country World Index extended its drop since its peak this year to more than 20 percent. About $3 trillion has been erased from U.S. equities since April 29, sending the S&P 500’s valuation to 12.5 times earnings, near the lowest level since March 2009, according to data compiled by Bloomberg. While investors are abandoning stocks amid concern Europe ’s crisis will worsen and growth in Asia will slow, equities will rally in the fourth quarter as economic and policy outlooks improve and the Federal Reserve provides additional stimulus, according to Barclays’s Barry Knapp. The central bank announced plans on Sept. 21 to buy $400 billion of long-term debt. Knapp estimates the S&P 500 will rise to 1,325 in 2011. He lowered his prediction from 1,450 a month ago. “The U.S. situation looks fine,” Knapp, the New York- based head of U.S. equity strategy, said in a telephone interview on Oct. 4. “If we were living in isolation here, the market would be much higher.” To contact the reporter on this story: Inyoung Hwang in New York at [email protected] To contact the editor responsible for this story: Nick Baker at [email protected] |
Apple Stock Little Changed After Co-Founder Jobs Passes Away.Apple Inc. (AAPL) shares were little changed in Nasdaq trading after co-founder and former Chief Executive Officer Steve Jobs died. The stock dipped 88 cents to $377.37 at 4 p.m. New York time on the Nasdaq Stock Market. Apple, which has the biggest weighting among any stock in the Nasdaq-100 Index at 14 percent, has gained 17 percent this year. Jobs, who resigned as CEO on Aug. 24, passed away at 56 yesterday, Cupertino, California-based Apple said. He was diagnosed in 2003 with a neuroendocrine tumor, a rare form of pancreatic cancer, and had a liver transplant in 2009. “The drop this morning is a shock reaction,” said Andreas Lipkow, an equity trader at MWB Fairtrade Wertpapierhandelsbank AG in Frankfurt. “In his position as a visionary I think he organized things and I think the new CEO will run things really well.” The announcement of Jobs’s passing came one day after CEO Tim Cook took the stage to introduce a new iPhone, marking his first product unveiling since taking the reins. To maintain Apple’s growth, he will have to push into more new markets, continue the company’s Asian expansion and execute a shift to cloud computing. Microsoft, Intel Apple’s stock price has risen more than 9,000 percent since Jobs returned to the company in 1997. The shares have more than doubled in the past two years, while Microsoft Corp. has gained 5.1 percent and Intel Corp. has risen 14 percent. Hewlett- Packard Co. is down 48 percent. The success of the iPhone has helped Apple’s stock weather market turmoil and the resignation of the CEO who made Apple the world’s most valuable company. Investors have had mixed reactions since Jobs stepped down as CEO. The shares rose more than 7 percent in the month after he resigned, and have since slipped back to little changed. At the close of trading yesterday, Apple was valued at $351 billion. “Apple’s business model will continue, but Steve Jobs was the cleverest product innovator and most precise brand creator in history,” said Daniel Weston, a portfolio adviser at Schroeder Equities GmbH in Munich. “Someone like that will not be replaced in our lifetimes.” Shares of Asian and European rivals climbed. Samsung Electronics Co. climbed 1.5 percent in Seoul. LG Electronics Inc. (066570) gained 6.3 percent. Nokia Oyj (NOK1V) added 1.8 percent on the Helsinki exchange. “People see now that Steve Jobs is not coming back and there is a risk of innovation declining, because he created the innovative products that created the fantastic brand,” said Helena Nordman-Knutson, a Stockholm-based technology analyst with Oehman. To contact the reporter on this story: Julie Cruz in Frankfurt at [email protected] To contact the editor responsible for this story: Andrew Rummer at [email protected] |
Colombia’s Sept. Consumer Prices Rise 0.31% From Month Ago.Colombia ’s consumer prices rose 0.31 percent in September from the previous month and rose 3.73 percent from the same month a year earlier, according to a report posted today on the statistics agency website. Economists expected monthly inflation of 0.02 percent and 3.43 percent from a year earlier, according to the median estimates of analysts surveyed by Bloomberg. To contact the reporter on this story: Randall Woods in Santiago at [email protected] To contact the editor responsible for this story: Robert Jameson at [email protected] |
U.K. Gilts Little Changed Before Bank of England Decision.U.K. benchmark government bonds were little changed amid speculation the Bank of England will restart a bond-purchase program to help revive the U.K. economy. The 10-year yield was higher for a second day as European stocks rallied after German Chancellor Angela Merkel said yesterday she supports recapitalizing European lenders “if there is a joint assessment that the banks aren’t adequately capitalized.” The pound swung between gains and losses versus the euro. U.K. 10-year gilt yields advanced one basis point to 2.37 percent as of 10:27 a.m. in London. The 3.75 percent security due September 2021 fell 0.115, or 1.15 pounds per 1,000-pound ($1,337) face amount, to 112.155. The two-year note yield was little changed at 0.58 percent. The pound traded at 86.35 pence per euro and 118.78 yen and strengthened 0.2 percent to $1.5487 versus the greenback. The Monetary Policy Committee will leave its key rate unchanged at 0.5 percent, according to all 53 economists surveyed by Bloomberg. Eleven of 32 economists surveyed separately predict at least a 50 billion-pound increase in its so-called quantitative easing program. “There’s a reasonable chance that the Bank of England could do something as early as today,” said Afseth. “If not it’s probably a matter of waiting a month, rather than it not happening. That ought to give a little bit of support to the gilts.” To contact the reporter on this story: Lucy Meakin in London at [email protected]. To contact the editor responsible for this story: Daniel Tilles at [email protected] . |
ECB to Buy Covered Bonds, Offer Longer Loans.European Central Bank President Jean- Claude Trichet, fronting a policy decision for the final time, said the ECB will resume covered-bond purchases and reintroduce year-long loans for banks as the sovereign debt crisis threatens to lock money markets. The ECB will spend 40 billion euros ($53 billion) on covered bonds starting next month and will offer banks two additional unlimited loans of 12 and 13-month durations, Trichet said at a press conference in Berlin today after policy makers left the benchmark interest rate at 1.5 percent. He also said the ECB will continue to lend banks as much money as they need in its regular refinancing operations at least until July 2012. The ECB is resisting calls to reverse its two rate increases this year even as the debt crisis threatens to tip Europe back into recession, turning instead to tools it has previously used in an effort to calm financial markets. The Bank of England today unexpectedly expanded its bond-purchase program to 275 billion pounds ($421 billion) from 200 billion pounds after keeping its key rate at a record low of 0.5 percent. The euro fell after the ECB’s rate decision and traded at $1.3414 at 4:39 p.m. in Berlin. Two-year German note yields were 15 basis points higher at 0.645 percent. ‘Pop Star’ With European leaders still hammering out a new plan to stop the region’s debt crisis, Trichet’s final decisions may be among the most critical for the future of the euro -- the currency he has championed as a symbol of European unity. Trichet will be succeeded by Italy’s Mario Draghi at the ECB’s helm when his eight-year term ends on Oct. 31. “Central bankers are supposed to be serious and dull and it was always unlikely that Trichet would turn into a pop star at his last presser,” said Christoph Rieger , head of fixed income strategy at Commerzbank AG in Frankfurt. “The problem the ECB has is that the more it does, the less the governments will do. It will cut rates, but not before December.” Trichet said inflation, which accelerated to 3 percent last month, is likely to remain above the ECB’s 2 percent limit for the rest of the year before slowing in 2012. At the same time, “ongoing tensions in financial markets and unfavorable effects on financing conditions are likely to dampen the pace of economic growth in the euro area in the second half of this year,” he said. Rates ‘Surprise’ The ECB in September cut its growth forecasts to 1.6 percent from 1.9 percent for 2011 and to 1.3 percent from 1.7 percent for 2012. Euro-area service and manufacturing industries last month contracted for the first time in more than two years. “The ECB’s decision to focus on inflation instead of reversing rate hikes made earlier this year is a surprise, as a rate cut appears to have been warranted,” said Chris Williamson , chief economist at Markit in London. It’s “likely that ECB rate cuts have merely been postponed.” Trichet said while there are “intensified downside risks” to the economic outlook, rates “are low.” “There has been a discussion on the pros and cons of decreasing rates,” Trichet said. “We have decided by consensus to maintain rates.” Trichet spoke as German Chancellor Angela Merkel held talks with International Monetary Fund chief Christine Lagarde and other officials in the German capital. Trichet is due to join the discussions later. Under Pressure With Greece on the brink of default and investors growing more concerned about the losses European banks may incur in the event of a sovereign insolvency, the ECB was under pressure to increase stimulus. It has already reintroduced an unlimited six- month loan and said last month it will coordinate with the Federal Reserve to provide euro-area banks with dollars. It will offer a 12-month loan this month and a 13-month loan in December, Trichet said. The ECB last offered unlimited year-long loans at the end of 2009 as the global financial crisis made banks wary of lending to each other. The ECB also purchased 60 billion euros of covered bonds in a one-year program that expired in June last year and was aimed at freeing up banks’ balance sheets and encouraging lending during the region’s worst recession since World War II. The 2.5 trillion-euro market for covered bonds -- assets backed by mortgages or public-sector loans -- underpins much of Europe’s real estate lending, which almost ground to a halt in the wake of Lehman Brothers Holdings Inc.’s collapse in September 2008. Close Call “The new purchases will have the capacity to be conducted in the primary and secondary markets and will be carried out by means of direct purchases,” Trichet said. They will start in November and are expected to be fully implemented by the end of October 2012, he said. “Banks now have certainty that plenty of liquidity will available for the banking sector until mid-2012,” said Jens Sondergaard, a senior economist at Nomura Plc in London. “It’s a close call whether they will cut policy rates next time and I think it will depend on the data flow between now and then as well how the sovereign debt crisis plays out.” To contact the reporters on this story: Matthew Brockett in Frankfurt at [email protected] ; Jana Randow in Frankfurt at [email protected] To contact the editor responsible for this story: Craig Stirling at [email protected] |
BlackRock’s IShares Targets Main Street.BlackRock Inc. (BLK) , the world’s largest money manager, became a Wall Street behemoth by serving institutional clients. Now it’s devoting more of its time to individual investors. As part of that plan, the New York firm is looking to its San Francisco-based iShares unit to attract more financial advisers and individual investors in the so-called retail market |
Citigroup, First Solar, Sprint, Wells Fargo: U.S. Equity Movers.Shares of the following companies had unusual moves in U.S. trading. Stock symbols are in parentheses and prices are as of the close of trading. Banks slipped after Glenn Schorr , an analyst with Nomura Holdings Inc., said losses on home-equity and other second mortgages may cost the four biggest U.S. banks $22.6 billion more than budgeted, with Wells Fargo & Co. (WFC) most at risk. Wells Fargo slipped 3.2 percent to $24.54. Bank of America Corp. (BAC) slumped 6.1 percent, the most in the Dow Jones Industrial Average , to $5.90. JPMorgan Chase & Co. (JPM) lost 5.2 percent to $30.70. Citigroup Inc. (C) fell 5.3 percent to $24.63. Makers of laboratory instruments fell after Illumina Inc. (ILMN) forecast third-quarter revenue of about $235 million, falling short of the average analyst estimate of $278.3 million. Deutsche Bank Securities Inc., Macquarie Bank Ltd. and Piper Jaffray Cos. cut their ratings Illumina, as the maker of DNA analysis equipment sank 32 percent to $27.18 for the second- biggest retreat in the Russell 1000 Index. Agilent Technologies Inc. (A) erased 6.5 percent to $31.37. Thermo Fisher Scientific Inc. (TMO) declined 5.9 percent to $50.49. PerkinElmer Inc. (PKI) lost 8.3 percent to $17.93. Waters Corp. (WAT) slid 8 percent to $72.78. Life Technologies Corp. (LIFE) decreased 6.5 percent to $36.82. The provider of gene-analysis tools was cut to “hold” from “buy” at Citigroup Inc. First Solar Inc. (FSLR) fell 7.7 percent to $59.74, the first decline in three days. The world’s largest thin-film solar panel maker had its 2011 and 2012 estimates cut at Bank of America Corp., which cited cell price weaknesses. HSBC Holdings Plc. said demand for solar energy will remain flat in 2012. IPG Photonics Corp. (IPGP) rose the most in the Russell 1000 Index, rallying 15 percent to $55.02. The producer of high- power fiber lasers and amplifiers didn’t infringe on IMRA America Inc.’s patent, a jury found. ServiceSource International Inc. (SREV US) climbed 9.1 percent, the most since May 10, to $14.57. The provider of Internet-based revenue management services forecast third- quarter revenue of more than $49 million, topping the previous prediction of no more than $46 million and the average analyst estimate of $46.1 million. Smith & Wesson Holding Corp. (SWHC) gained 5.3 percent to $2.78, the highest price since Sept. 16. The handgun manufacturer was raised to “buy” from “neutral” at D.A. Davidson & Co. Sprint Nextel Corp. (S) slipped the most in the Standard & Poor’s 500 Index, falling 20 percent to $2.41. The third- largest wireless operator’s chief financial officer said it may raise additional capital for refinancing and won’t provide an update on its fourth-quarter or full-year earnings. Clearwire Corp. (CLWR) plunged 32 percent, the biggest decline in the Russell 1000 Index, to $1.39, after Sprint said it planned to shift its customers away from the broadband provider’s current technology. Tronox Inc. (TROX US) jumped 19 percent, the most since December, to $109.49. The pigment maker that is acquiring mineral assets from Exxaro Resources Ltd. jumped the most since emerging from bankruptcy after forecasting earnings from the combination. To contact the reporter on this story: Kaitlyn Kiernan in New York at [email protected]. To contact the editor responsible for this story: Nick Baker at [email protected] |
Cocoa Rises, Caps Longest Rally Since August, on Europe Outlook.Cocoa futures rose, capping the longest rally since late August, on speculation that Europe will control the region’s debt crisis, preserving economic growth to fuel demand for commodities. The European Central Bank may protect banks from the fallout of a potential Greek default, ECB President Jean-Claude Trichet said today. The Standard & Poor’s GSCI gauge of 24 raw materials rose for the second straight day after touching a 10- month low on Oct. 4. Cocoa tumbled 16 percent last month. “If you get any kind of stabilization in global markets, you’re going to see demand improve for basic commodities, including cocoa,” Phil Streible, a senior market strategist at MF Global Holdings Ltd. in Chicago, said in a telephone interview. Cocoa futures for December delivery rose $38, or 1.4 percent, to settle at $2,660 a metric ton at 12:02 p.m. on ICE Futures U.S. in New York , the biggest gain for a most-active contract since Sept. 27 and the third straight increase. The commodity has slumped 30 percent from a 32-year high of $3,775 on March 4. The MSCI World Index of equities rose as much as 2.5 percent, and the dollar declined against a basket of major currencies, increasing the investment appeal of commodities. Cocoa’s rally was tied more to financial markets than any “fundamental strength,” Spencer Patton, the chief investment officer at Steel Vine Investments in Chicago , said in a phone interview. To contact the reporter on this story: Blair Euteneuer in Chicago at [email protected] To contact the editor responsible for this story: Steve Stroth at [email protected] |
German 2-Year Notes Fall; Trichet Says ECB to Buy Covered Bonds.German two-year notes slipped after European Central Bank President Jean-Claude Trichet said central bank will resume purchases of covered bonds. The two-year note yield was three basis points higher at 0.52 percent at 1:49 p.m. in London. The 10-year bund yield increased four basis points to 1.88 percent. To contact the reporter on this story: Paul Dobson in London at [email protected] To contact the editor responsible for this story: Daniel Tilles at [email protected] |
Naturex Chief Spurns Offers With Plan to Double Sales By 2015.Naturex (NRX) SA Chief Executive Officer Jacques Dikansky said he’s rebuffed takeover approaches as the French maker of natural flavors and color extracts is capable of doubling sales in three to four years by going it alone. “It happens often, they’re ready to be generous,” said Dikansky, without identifying the suitors. “We’ve always had the autonomy of an independent company. It’s better to go on like that for a good number of years.” Naturex, based in Avignon, may have sales “in the ballpark” of 500 million euros ($668 million) in three to four years, said Dikansky, who controls a holding company that owns 13 percent of Naturex. The company has been cited as a possible target for flavor and fragrance maker Symrise AG (SY1) by Berenberg analyst Jaideep Pandya. Dikansky sees Naturex as a consolidator rather than a target. Naturex is selling 49.3 million euros of new shares to fund acquisitions that will broaden its product range and give it access to new clients in Europe , the U.S. and emerging markets. Five or six acquisition targets may materialize in the next 12 months, which would bring about 50 million euros of additional sales, Dikansky said in an interview yesterday. “We have very good organic growth prospects ahead of us, and acquisitions projects,” said the CEO. “We may finalize two or three deals by the end of the year.” Adding to cosmetics ingredients is one area of interest, he said. Given that acquisition prices in the industry average about 1.5 times revenue, Naturex may spend about 75 million euros on these purchases, the CEO said. The company’s net debt-to-equity ratio should remain around 60 percent, where it stood at the end of 2010. [bn:WBTKR=NRX:SM] Naturex shares [] were up 2.4 percent to 47.22 euros at 11:18 a.m. in Paris, taking this year’s gain to 16 percent. The company, which had revenue of 226 million euros in 2010, is predicting like-for-like growth of at least 10 percent in 2011. The company’s sales “aren’t really affected by the crisis” because U.S. and European consumers are increasingly buying natural products, Dikansky said. “The difficult economic and financial situation may create a slight slowdown because our customers are slowing product launches. Our strong development in emerging markets is picking up the baton,” he said. To contact the reporter on this story: Francois de Beaupuy in Paris at [email protected] To contact the editor responsible for this story: Benedikt Kammel at [email protected] |
Greece Calls for Advisers for Water Companies, Naftemporiki Says.Greece has invited expressions of interest from technical advisers to assist in the stake sales of two listed water companies, Naftemporiki reported, without saying where it got the information. The government plans to sell a 40 percent stake in Thessaloniki Water Supply & Sewage Co SA (EYAPS) and a 27 percent stake in Athens Water Supply & Sewage Co SA (EYDAP) in the first half of 2012, the newspaper said. Advisers will need to submit their expressions of interest by Oct. 17, Naftemporiki said. To contact the reporter on this story: Marcus Bensasson in Athens at [email protected] To contact the editor responsible for this story: Craig Stirling at [email protected] |
Mauritius September Consumer Prices: Summary.Following is a summary of Mauritius’s September CPI report from the Central Statistics Office in Port Louis: To contact the reporter on this story: Simbarashe Gumbo in Johannesburg at [email protected] To contact the editor responsible for this story: Marco Babic at [email protected] |
Housing Industry Asks U.S. Congress to Adopt ‘No Harm’ Principle.There was a time when Jerry Howard and his lobbyists at the National Association of Home Builders would buttonhole lawmakers to ask for a favor or policy fix. Today, confronted with stagnant home prices, mounting foreclosures and the thinning ranks of housing lobbyists, Howard and his remaining allies are asking for something new. “Shut up,” Howard said, paraphrasing his message to lawmakers. “Stop saying we’re going to eliminate the mortgage interest deduction. Stop saying we’re going to require everyone to put 20 percent down on a house. Stop saying there’s no role for the federal government.” Builders and their pro-homeownership allies are regrouping amid the worst housing slump since the Great Depression. Fannie Mae and Freddie Mac , the largest sources of home lending in the U.S., are dependent on taxpayers for survival. Defaults are mounting, home prices are stagnant and a fifth of borrowers owe more on their mortgage than their property is worth. Trade groups for homebuilders and mortgage bankers are feeling the pain, too, cutting staff and lobbying budgets. Many, including the National Association of Realtors, are shifting at least some of their focus away from Washington, training their members to educate the public and politicians about the value of homeownership. Rare Defeat Long a powerhouse of deep pockets, strategic alliances and troops of politically engaged local activists, the housing industrial complex suffered a rare political defeat last month when Congress refused to block an automatic decrease in the size of loans that can be guaranteed by Fannie Mae , Freddie Mac and the Federal Housing Administration. As of Oct. 1, the government won’t buy or guarantee any loan greater than $625,500, down from $729,750. Real estate agents and homebuilders fought to preserve the higher limits, saying the change would hurt home sales. “We don’t believe, frankly, that the way we’ve been successful in legislative and regulatory battles in the past is going to cut it this time,” said Howard, chief executive officer of the National Association of Home Builders. “It’s almost like a perfect storm.” Among trade groups, the NAHB has been hit particularly hard, with membership falling 40 percent since 2006, to 150,000 companies. Staff has shrunk by a third and lobbying expenditures in the first half of 2011 were about a fourth of the $4.6 million the group spent in 2008. Realtors Step Up Frustrated by the reception they’re getting in Washington , the association, like the Realtors, is relying more on its grassroots, training members how to get the message out to their communities. In Louisville, Kentucky , Chuck Kavanaugh has teamed up with the Louisville Urban League and other groups to convince lawmakers that homeownership remains a valuable goal for the country’s economy and social fabric. Their message to local leaders and the home offices of House and Senate members: “Don’t make it harder right now,” said Kavanaugh, executive vice president of the Home Builders Association in Louisville. “Stop and take a breath.” The National Association of Realtors is undertaking its own grassroots effort with an eight-month bus tour across the U.S., part of its “Home Ownership Matters” campaign to educate consumers about protecting the “ American dream of homeownership.” “In Washington, the challenge is you have a lot of well- intentioned people who don’t understand the impact of decisions,” said Ron Phipps, NAR’s president. “We’re better off with those well-intentioned people stepping back instead of coming up with solutions that have unintended consequences.” Staff Reductions The association, which has cut staff by about 10 percent, spent $10 million on lobbying in the first half of this year. That puts the Realtors on a path to exceed their record 2009 total of $19.4 million, according to the Center for Responsive Politics in Washington, which tracks campaign finance and lobbying. The Realtors’ jump in lobbying spending stands alone. In addition to the homebuilders, the Mortgage Bankers Association cut spending, reporting $1.2 million in lobbying in the first half of the year, down from $4.2 million in 2008, according to the Center for Responsive Politics. “Our association, other associations in the housing space, have had to contract,” said Bill Killmer, the mortgage group’s chief lobbyist. “You see MBA continuing to maintain an active political presence, but working toward a time when we can raise the level of our political activity.” Shifting Political Climate Complicating matters is the shifting political climate on a subject that in the past has transcended partisan politics, with Republicans and Democrats united behind affordable homeownership. The Fannie Mae and Freddie Mac bailout, now at more than $170 billion, has many politicians rethinking their allegiance to the cause. Some, including President Barack Obama , want the government less involved in the mortgage market. Budget cutters, in the form of a deficit-reduction supercommittee, have put the mortgage interest deduction on the table, a once-unthinkable act. The panel is charged with finding $1.5 trillion in budget savings over the next decade by Nov. 23. Today, Senate Finance Committee Chairman Max Baucus , a Montana Democrat, will hear ideas for revising tax breaks for homeowners, including a capital gains exemption for homeowners who profit from selling their primary residence. Regulation Changes The Mortgage Bankers Association is keeping an eye on the supercommittee for that reason, Killmer said. Mostly, though, the association is mobilizing members to talk to lawmakers and congressional staff about rulemaking. That was on the agenda last week when 50 mortgage bankers went from a Washington conference to meet with senior aides and lawmakers on Capitol Hill. Of chief concern is an effort by regulators to write minimum standards for mortgage borrowers. As drafted, the risk retention plan would require homebuyers to put at least 20 percent down on a mortgage to qualify for the best rates. Housing lobbyists, lenders and consumer groups are united against the proposal, which they say would deny mortgages to millions of would-be homebuyers and do little to reduce defaults. Overall, the market’s problems are so intractable that a mortgage policy overhaul is unlikely to make it onto the congressional agenda until after the 2012 elections. ‘Do No Harm’ “Our longer-term worry is that you do no harm to a housing economy that’s already in a very fragile state,” Killmer said. “The single biggest thing is the overall macro economic recovery. You’ve got to restore consumer confidence so that people will open up their wallets.” To some extent, the industry is getting help from the same economy that’s hurting it. Lobbyists and trade group members don’t expect Congress to do anything, such as reducing the deduction for mortgage interest, that might hurt the recovery. “I can’t imagine that another blow could be struck” against the struggling industry, said Susan Benedetti, a vice president at First National Bank Alaska in Anchorage who was in Washington last week for the mortgage bankers conference. “I would be shocked.” To contact the reporters on this story: Lorraine Woellert in Washington at [email protected] ; Kristin Jensen in Washington at [email protected] To contact the editor responsible for this story: Mark Silva at [email protected] |
RBC, TD Bank Outlook Cut to Stable From Positive at S&P.Standard & Poor’s lowered the outlook for Royal Bank of Canada (RY) and Toronto-Dominion Bank (TD) to “stable” from “positive.” Canada’s two largest banks by assets were reduced on expectations for a “weaker Canadian economic recovery,” the ratings company said today in separate statements. To contact the reporter on this story: Sean B. Pasternak in Toronto at [email protected]. To contact the editors responsible for this story: David Scanlan at [email protected] ; David Scheer at [email protected] . |
U.S. Companies Reporting Midmorning EPS, Oct. 6.The following table lists the six U.S. companies that reported quarterly earnings today (end date of the quarter is noted in the last column). Companies are sorted alphabetically by ticker symbol. Earnings estimates provided by Bloomberg. To contact the reporter on this story: Wendy Soong in New York at at [email protected]. To contact the editor responsible for this story: Alex Tanzi at at [email protected] |
Bolivia September Consumer Price Index: Summary.Following is a summary of Bolivia’s Sept. consumer prices report from the National Statistics Institute in La Paz: To contact the reporter on this story: Dominic Carey in Sao Paulo at [email protected] To contact the editor responsible for this story: Marco Babic at [email protected] |
Germany Would Block More Rescue Aid, Roesler Tells Handelsblatt.German lawmakers would not support any attempt to further leverage the European rescue fund or its permanent successor, the European Stability Mechanism, Economy Minister Philipp Roesler was cited as saying in an interview with Handelsblatt newspaper. “Parliament would have to approve that,” Roesler was cited as saying when asked if he is against any further increase of the current rescue fund, the European Financial Stability Facility, or its post-2013 successor, the ESM. “I don’t see any majority for that in the Bundestag,” he said. “Leveraging, for instance via a bank license for the permanent crisis mechanism, the ESM, would exceed the agreed liability risk of 211 billion euros.” To contact the reporter on this story: Brian Parkin in Berlin at [email protected] To contact the editor responsible for this story: Alan Crawford at [email protected] |
Brewin Dolphin, EasyJet, Home Retail, Greggs: U.K., Irish Equity Preview.The following is a list of companies that may have unusual share-price changes in U.K. and Irish markets. Stock symbols are in parentheses and prices are from the last market close. December futures on the FTSE 100 Index gained 1 percent to 5,125 at 7:42 a.m. in London. The FTSE 100 advanced 3.2 percent to 5,102.17 yesterday. The FTSE All-Share Index climbed 2.9 percent, while Ireland’s ISEQ Index rose 2.1 percent. Brewin Dolphin Holdings Plc (BRW) : The stockbroker and fund manager said market conditions were “difficult” in the fiscal fourth quarter. The stock added 0.1 percent to 113.8 pence. EasyJet Plc (EZJ) and Ryanair Holdings Plc (RYA) : The airlines were raised to “outperform” from “neutral” at Credit Suisse Group AG. EasyJet slid 2.1 percent to 331.7 pence. Ryanair lost 1.1 percent to 3.17 euros. Greggs Plc (GRG) : The U.K.’s biggest bakery chain said third-quarter total sales rose 5.4 percent, while year-to-date revenue rose 4.6 percent. The company is keeping its plan for a record 80 net new openings, Greggs said in a statement today. The stock lost 1.6 percent to 461.1 pence. Home Retail Group Plc (HOME) : The company was named a least preferred stock at Citigroup Inc. The shares sank 5.6 percent to 114.9 pence. Mouchel Group Plc (MCHL) : The consulting company said Chief Executive Officer Richard Cuthbert resigned with immediate effect. One-time profit on a contract will be 4.3 million pounds ($6.6 million) less than expected because of an actuarial error. The stock retreated 2.4 percent to 31 pence. Next Plc (NXT) : The retailer was cut to “underweight” from “equal weight” at Barclays Plc. The stock lost 2.3 percent to 2,447 pence. Victrex (VCT LN): The maker of heat-resistant plastics said trading started well in October and annual sales in fiscal 2011 rose to 2,860 tons from 2,535 tons. The stock advanced 3.2 percent to 1,058 pence. To contact the reporter on this story: Adria Cimino in Paris at [email protected] To contact the editor responsible for this story: Andrew Rummer at [email protected] |
Ferguson Urges United Fans to Behave at Anfield, Guardian Says: Roundup.The following is a roundup of soccer stories from U.K. newspapers, with clickable links to the Web. Fan Behavior Manchester United manager Alex Ferguson has written to the club’s fans telling them to watch their behavior at next week’s match at Liverpool or risk having their ticket allocations being slashed, the Guardian said. United had its usual 3,000 tickets at Anfield cut to 1,960 because of problems involving supporters at recent matches, the Guardian said. Twelve Premier League clubs refused to give United its full allocation last season and the team is concerned it’s becoming a trend, the newspaper said. Ferguson’s letter was sent to all fans receiving tickets for the Oct. 15 match and urges them to “respect the stewards and follow ground regulations.” Burning Effigy An effigy of Carlos Tevez was burned near Manchester City ’s stadium three days ago as the backlash against the striker continues, the Daily Mail said. Tevez was suspended by City after manager Roberto Mancini said he refused to enter last week’s Champions League match at Bayern Munich. His adviser Kia Joorabchian said yesterday the striker never refused the request and that comments he made after the match were mistranslated. The effigy was hung under a canal bridge near City’s stadium and it’s not known if the club’s fans were responsible, the Mail said. Englishman Wanted Jamie Carragher said the successor to England manager Fabio Capello must be English, the Daily Express said. Capello will leave his post after next summer’s European Championship. Though Carragher said he had no problem personally with the Italian, who took the defender to last year’s World Cup , he was adamant about his replacement. “The next manager of England should be English,” the Express quoted Carragher as saying. “Just because it didn’t work out for Steve McClaren, it didn’t mean we had to go for a foreign manager.” Becks in Brazil David Beckham would consider offers to play in Brazil and the Middle East when his Los Angeles Galaxy contract expires, the Daily Telegraph said. Beckham’s five-year deal ends after the Major League Soccer season and he’s been linked with moves to England, Europe and the United Arab Emirates. The prospect of ending his career in Brazil has emerged, with the country set to host the 2014 World Cup, and the 36- year-old is open to the possibility of becoming the first high- profile Englishman to play there, the Telegraph said. No MLS for Rio Rio Ferdinand plans to ignore any overtures from Major League Soccer and concentrate on winning his place back for Manchester United and England, the Daily Mirror said. The Chicago Fire has been linked with the defender, who feels he still has a role to play with United. “I understand why someone like Rio would be attractive to them,” Ferdinand’s agent Jamie Morealee was quoted as saying by the Mirror. “But I must stress these stories are nothing to do with Rio. We have never discussed anything beyond life at Manchester United because that is all he cares about.” To contact the reporter on this story: Bob Bensch in London at [email protected]. To contact the editor responsible for this story: Christopher Elser at [email protected] . |
Lynas Corp. Names Luisa Catanzaro Chief Financial Officer.Lynas Corp. named Luisa Catanzaro as chief financial officer, according to a regulatory filing. To contact the reporter on this story: Tim Smith in Sydney at [email protected] To contact the editor responsible for this story: Tim Smith at [email protected] |
IMF Backs ECB Liquidity Moves, Recommends Rate Cuts.The International Monetary Fund supports steps by the European Central Bank to expand liquidity while recommending consideration of more interest rate cuts by the central bank, IMF spokesman David Hawley said. The Frankfurt-based ECB today said it will resume covered- bond purchases and reintroduce year-long loans for banks as the sovereign debt crisis threatens to lock money markets. Policy makers left the benchmark interest rate at 1.5 percent. “We share the ECB’s concern that there are severe downside risks to the outlook as the result of financial tensions and thus we fully support the liquidity extension announced today,” Hawley told reporters in Washington today. “With the outlook risks persisting we believe there is currently scope for a reduction in policy rates as well,” he said. An IMF mission in Greece to assess whether the country should receive the latest tranche of a 110-billion euros ($170 billion) loan with the European Union should conclude “in a few days,” Hawley said. He declined to give a date for when the IMF board may meet to authorize any payment. Asked about Egypt, Hawley said the IMF is “in close dialogue with the authorities” and an IMF team will travel to Cairo “in the next few weeks to take stock of development in the economy,” he said. Egypt has not requested financial assistance, he said. To contact the reporters on this story: Sandrine Rastello in Washington at [email protected] To contact the editor responsible for this story: Christopher Wellisz at [email protected] |
Solyndra Sought Second Guarantee a Week After Getting the First.Solyndra LLC, the failed California solar-panel maker, applied for a second U.S. loan guarantee a week after receiving its first as it sought to expand a factory it hadn’t built yet. The company received a $535 million federal loan guarantee on Sept. 3, 2009, and broke ground for its so-called Fab 2 facility the next day, at an event that Energy Secretary Steven Chu attended. Seven days later, the company requested $469 million for more construction and equipment at Fab 2 in a bid to cut costs of its tubular panels by increasing production, according to a December 2009 filing to the U.S. Securities and Exchange Commission. The company and the department “mutually agreed that the application should not receive further consideration” in October 2010, Damien LaVera , an Energy Department spokesman, said in an e-mail today. “The department was not poised to approve a second loan application.” E-mails released this week as part of a congressional investigation into Solyndra’s loan guarantee said officials from the Office of Management and Budget worried the second guarantee request was imminent. “I’ve been told we should expect to see that project soon for conditional commitment,” a budget office official wrote in an April 8, 2010, e-mail. Another official said in an e-mail: “Possible to close and default on one before closing on a second??? Could be a record.” Solyndra Plans Solyndra had forecast that the next phase of its factory would cost $642 million, which it planned to raise through the second loan guarantee and by selling shares to the public, according to the December filing. By the time of the decision to drop the application, Solyndra’s financial problems were becoming clearer. It had amended its SEC filing in March 2010 to include a warning from its auditor that it might have to cease operating and in June had withdrawn its planned initial public offering. In December 2010, Solyndra violated the terms of its $535 million award by failing to set aside the first of six $5 million payments for a reserve fund. The administration then restructured the loan, which placed Solyndra’s debt to the government behind $75 million in fresh money from outside investors, a decision that congressional Republicans have criticized. Energy Department officials said the agreement was a last-ditch effort to save the company. FBI Raid Solyndra filed for bankruptcy protection on Sept. 6. Two days later the FBI raided the company’s Fremont, California, offices as part of an investigation into possible accounting fraud. Matt Rogers , an Energy Department adviser on stimulus projects, said in a May 24, 2010, e-mail to Rod O’Connor, who was then Chu’s chief of staff, that Solyndra faced economic challenges, including falling silicon prices that benefited rival companies and declining demand in Europe for solar panels. Rogers also said the company had been counting on “an energy bill to pass,” including a renewable-energy standard, “to ensure adequate U.S. market size.” Rogers said Solyndra would face problems in the “18-24 month window, but the company should be going strong into the fall with their new facilities on line.” House Republicans expanded an eight-month investigation into the loan guarantee yesterday, demanding all communications about Solyndra among White House officials since Obama’s 2009 inauguration. To contact the reporter on this story: Jim Snyder in Washington at [email protected] To contact the editor responsible for this story: Larry Liebert at [email protected] |
Freddie Mac to Redeem Step-Coupon Notes Due 2014.The following issue is being redeemed via the company's call option: Issuer: Freddie Mac Coupon: Step-Coupon Maturity: April 14, 2014 Redemption Amount: $50 million Redemption Price: 100 percent Amount Remaining: Fully Retired Security ID: 3134G1U44 Effective Date: Oct. 14, 2011 |
German Two-Year Notes Advance After BOE Expands Bond Program.German two-year notes rose after the Bank of England expanded its bond-purchase program for the first time in almost two years. The advance pushed the yield down three basis points to 0.47 percent as of 12:06 p.m. in London. Ten-year bunds pared an earlier decline, leaving the yield two basis points higher at 1.86 percent. Euribor futures rose, pushing the implied yield on the December contract down six basis points to 1.19 percent. The nine-member Monetary Policy Committee led by Mervyn King raised the ceiling for so-called quantitative easing to 275 billion pounds from 200 billion pounds. Twenty one of 32 economists in a Bloomberg News survey forecast no change, and the rest predicted increases ranging from 50 billion pounds to 100 billion pounds. To contact the reporter on this story: Emma Charlton in London at [email protected] To contact the editor responsible for this story: Daniel Tilles at [email protected] |
U.S. Iron and Steel Scrap Use and Stockpiles for July.Following is a table detailing U.S. iron and steel-scrap and pig-iron receipts, production, consumption, shipments and stockpiles for July, according to the U.S Geological Survey in Reston, Virginia. Iron and steel scrap are used in the production of new steel and cast-iron products. Automobiles are the primary source of steel scrap. To contact the reporter on this story: Stephen Rose in Washington at [email protected] To contact the editor responsible for this story: Alex Tanzi at [email protected] |
Samsung, Micron Say Memory Needs to Go Vertical to Keep Up.Samsung Electronics Co. is teaming up with rival Micron Technology Inc. (MU) to spur the chip industry into switching to stackable memory, part of an effort to cut energy use and speed up computers. Makers of dynamic random access memory, or DRAM, should start making the transition to a so-called hybrid-cube approach, which stacks chips on top of one another, the companies said today in joint statement. The technique will make the chips more efficient and faster at supplying data to computer processors. “You can move a lot more data with a lot less energy than what the traditional technologies use today,” said Scott Graham , general manager of memory marketing for Boise, Idaho- based Micron, the largest U.S. memory manufacturer. “We’re able to realize energy savings of up to 70 percent.” Companies in the $39 billion memory-chip industry have always sold DRAM chips that lie side-by-side on small circuit boards, which are plugged into the main board of a computer. As demands for memory and processors speeds increase, that layout causes bottlenecks and demands too much power, Samsung and Micron say. It also takes up more space in devices. The new design eliminates the need for the second circuit board by having the memory chips send data through to a controller layer, which then delivers the information to a processor -- the brains of a computer. Samsung, based in Suwon, South Korea , is the biggest global manufacturer of memory. The rare collaboration with Micron is aimed at setting an industry standard, which would then be ratified by other competitors. Unlike some other parts of the chip industry, computer memory closely follows universal standards, so that products from rival manufacturers can be used interchangeably. To contact the reporter on this story: Ian King in San Francisco at [email protected] To contact the editor responsible for this story: Tom Giles at [email protected] . |
Kenyan Government to Seek Long-Term Contracts With Oil Producers.Kenya ’s government will seek to sign long-term contracts with oil-producing countries to address price fluctuations, Energy Minister Kiraitu Murungi said. The East African nation also plans to build fuel-storage facilities in five different towns to ease supply constraints, Murungi told reporters today in Nairobi. To contact the reporter on this story: Johnstone Ole Turana in Nairobi at [email protected] To contact the editor responsible for this story: Paul Richardson at [email protected] |
Poland Key Economic Indicators: Statistical Summary.Following is a table showing a range of economic indicators for Poland: To contact the reporter on this story: Barbara Sladkowska in Warsaw at [email protected] To contact the editor responsible for this story: Marco Babic at [email protected] |
Consumer Bureau Nominee Cordray Approved by Senate Banking Panel.The U.S. Senate Banking Committee voted 12-10 to advance Richard Cordray ’s nomination to serve as the first director of the Consumer Financial Protection Bureau. Today’s vote moves the nomination to the full Senate for consideration. The vote was along party lines, with all Republicans opposing the nominee. To contact the reporter on this story: Carter Dougherty in Washington at [email protected] To contact the editor responsible for this story: Lawrence Roberts at [email protected] |
Southwest Sees $1 Billion Atlanta Revenue Gain on AirTran Merger.Southwest Airlines Co. (LUV) expects to add as much as $1 billion in new annual revenue in Atlanta, home to the world’s busiest airport, as it revamps the hub acquired in the purchase of AirTran Holdings Inc. (AAI) Service will shift to focus on larger cities and more direct flights, because those customers are more profitable than passengers who make connections, Chief Executive Officer Gary Kelly said yesterday in an interview. Daily departures will fall about 13 percent to 175 as some smaller markets are cut, he said. Making Atlanta mirror Southwest’s system will boost sales there by $750 million to $1 billion, Kelly said. It’s the first time Dallas-based Southwest has shared such detail, and Kelly said the projections are already part of the airline’s $400 million target for so-called merger synergies. “We’ll unwind the hub and operate a typical Southwest point-to-point schedule,” Kelly, 56, said in Atlanta. “You’d rather have two nonstop passengers than one connecting passenger. AirTran yields a certain revenue per mile flown, and Southwest gets a premium to that.” For 2011’s first quarter, the last full period before the AirTran deal was finished in May, Southwest reaped 11.99 cents for each passenger flown a mile, compared with 10.43 cents for AirTran. Southwest, the largest discount carrier, didn’t serve Hartsfield-Jackson Atlanta International Airport before buying Orlando , Florida-based AirTran. The airlines must operate separately until U.S. regulators grant them a joint certificate, probably early next year. Baggage Fees AirTran policies such as business-class cabins and fees to check bags and change tickets boosted its total revenue from each so-called passenger mile to 11.56 cents in the first quarter, while Southwest’s revenue on a comparable basis was 12.66 cents. Kelly said Southwest will still gain revenue because it can adjust fares with greater precision based on seat availability and demand. “We’re going to attract more business travelers because we don’t have the fees, and I believe it will be a net plus,” Kelly said in the interview at Atlanta’s Stone Mountain Park where Southwest was hosting a party for thousands of employees. About 35 percent to 40 percent of Southwest passengers fly on business, compared with about 20 percent for AirTran, he said. About 75 percent of Southwest passengers fly nonstop. AirTran’s mix at Atlanta was 35 percent local and 65 percent connecting travelers. Passenger Loss Some loss of passengers who want to fly business class is inevitable, Kelly said. Delta Air Lines Inc. (DAL) , the world’s second-largest carrier, is the market leader in Atlanta with 75 percent of passengers. “You never capture everything, but that is not a material amount of business” that might be lost by eliminating AirTran’s business class, Kelly said. Southwest and AirTran aren’t yet able to share codes on flights, which would allow passengers to book on either carrier on the same itinerary, because the technology and training isn’t in place yet. The airlines plan to code share in 2012’s first half, he said. Transition plans are under way to mesh the carriers’ differing policies on luggage fees, boarding procedures, business class cabins and assigned seats, he said. High fuel prices are forcing Southwest to be “more tactical” in its approach to smaller AirTran destinations, Kelly said. AirTran dropped four cities, including Asheville, North Carolina , and Newport News , Virginia , because of lack of demand before the Southwest purchase was completed. Southwest managers are still studying which AirTran cities and flights will be kept, and those plans may change in coming months depending on fuel and the economy, he said. Jet fuel rose 11 percent this year before today. To contact the reporter on this story: Mary Jane Credeur in Atlanta at [email protected]. To contact the editor responsible for this story: Ed Dufner at [email protected] . |
Cheung Kong Shares Rise Most in Two Years in Hong Kong Trading.Cheung Kong Holdings Ltd. (1) rose as much as 8.5 percent, the biggest gain since April 2009, in Hong Kong trading. The stock was 7.9 percent higher at HK$85.80 as of 2:55 p.m. To contact the reporter on this story: Billy Chan in Hong Kong at [email protected] To contact the editor responsible for this story: Stanley James at [email protected] |
Bolivia September Consumer Price Index by Component.The following table details Bolivia ’s Sept. consumer prices report from the National Statistics Institute in La Paz. NOTES: Base year is 2007=100. Component weightings are as follows: food/beverage (27.4%), alcohol/tobacco (0.9%), clothing (6.3%), rent/utilities (11.1%) household items (6.7%), healthcare (2.5%), transport (12.5%), communication (3.5%), recreation (6.3%), education (4.7%), restaurant/ hotel (11.1%), other (7.1%) SOURCE: Instituto Nacional de Estadistica - Bolivia http://www.ine.gov.bo To contact the reporter on this story: Dominic Carey in Sao Paulo at [email protected] To contact the editor responsible for this story: Marco Babic at [email protected] |
Spain Meets Maximum Target at Bond Sale as Borrowing Costs Fall.Spain sold 4.5 billion euros ($6 billion) of bonds, meeting its maximum target, and its borrowing costs fell as the European Central Bank supported the nation’s debt on the secondary market. The Treasury sold bonds due in April 2014 at an average yield of 3.589 percent, compared with 4.813 percent the last time they was sold on Aug. 4, the Bank of Spain said. Securities due October 2014 yielded an average 3.495 percent, compared with 4.291 percent in July and bonds maturing in April 2015 yielded 3.639 percent. Demand for the April 2014 debt was 1.78 times the amount sold, compared with 2.14 at the August auction. The bid-to-cover ratio was 2.02 for the October 2014 bonds compared with 2.29 in July, and 2.07 for the April 2015 securities. Spain’s borrowing costs have fallen since the ECB started propping up its bond market on Aug. 8. The ECB bought Spanish government securities yesterday, according to three people with knowledge of the transactions, helping push the yield on Spain’s 10-year bond to a one-month low. The yield on Spain’s benchmark 10-year bond, which reached a 6.3 percent euro-era high on July 18, dipped below 5 percent to 4.983 percent, and traded at 5 percent at 11:00 a.m. in Madrid. That narrowed the spread over German bonds to 311 basis points, from 325 basis points yesterday. “Sentiment seems to be playing in favor of Spain,” said Fadi Zaher, a fixed-income strategist at Barclays Wealth in London. “Spain’s economic outlook is making it more and more obvious the country is becoming the bridge between the euro zone’s periphery and core countries.” Prime Minister Jose Luis Rodriguez Zapatero is trying to cut a budget deficit that’s three times the European Union limit and avoid following Greece, Portugal and Ireland into a bailout. His Socialist government has taken the deepest austerity measures in three decades, and polls say the party will lose the Nov. 20 next general election to the People’s Party’s leader Mariano Rajoy , who has also promised fiscal consolidation. The government aims to cut the deficit to 6 percent of gross domestic product this year, from 9.2 percent in 2010, and Finance Minister Elena Salgado yesterday said that goal takes “priority” over growth in the “remaining months of the year.” GDP growth rate slowed to 0.2 percent in the second quarter from 0.4 percent in the previous three months. To contact the reporter on this story: Angeline Benoit in Madrid at [email protected] To contact the editor responsible for this story: Craig Stirling at [email protected] |
As Austere England Grumbles, Scotland Is All Smiles: A.A. Gill.The TV weather map shows the U.K. wreathed in autumnal sunshine. Records have been broken. The trees are turning golden, and there are girls in bikinis in the park. There is, though, just one small cloud right up in the northwest of Scotland , and that’s the one I’m sitting under. Outside, the sky hangs like dirty laundry caught on the granite crags. The rain looks like smoke blowing up the glen. The burns are in spate, billowing peat-tanned water in great gulping cascades. My southern family is in shirtsleeves. I’m in tweed. And that’s how it should be. The highlands are supposed to be blasted and sodden. A whole week of sun, and half the population comes down with skin cancer. The weather reflects the default demeanor of the Scots. We are a dour people, naturally prone to harsh pessimism and morbid, small expectations. Our laughter is hollow, our greatest pleasures husbanded grievances and the opportunity to say, “I told you so.” Scots are righteous miserabilists, and as P.G. Wodehouse pointed out, it really isn’t difficult to tell the difference between a Scotsman with a grievance and a ray of sunshine. He might have added that you rarely see the two things together at the same time. But hold the front page: What is this? One professor David Bell has concocted a happiness index that shows, for the first time in recorded history, that the Scots are happier, or at least more contented than the English. Not just the English, but also the Welsh. Scotland is the smiliest part of the United Kingdom. Happiness Lessons This could mean one of two things. Happiness indexes aren’t worth the computer screens they come on, or something odd is happening in Scotland. And that may be of interest, and perhaps of some use, to other countries struggling with depressing times. Well, unemployment is falling in Scotland, against the trend across the rest of the U.K. Most importantly, private- sector jobs are being created at twice the rate of those disappearing in the large state sector. Crime is falling steeply. The wave of riots that flared across England didn’t include the Scots, who dispatched police officers south to help the neighbors, allowing us the small, dry pleasure of an “I told you so” moment. House prices , with the exception of some hotspots, are lower and more stable than south of the border, and a higher percentage of people rent in Scotland. The unfashionably corpulent social services provide free university education for native Scots. (The English have to pay at St. Andrews and its kin.) There is free care for the elderly -- as opposed to England, where people are forced to sell their houses before getting old-age respite -- and prescriptions are now gratis. All this, for a nation of barely five million, whose distance from mainland Europe makes trade expensive. It’s not, however, all haggis and neeps. Scotland still has some of the worst, and certainly ugliest, public housing in the U.K. Life expectancy is among the lowest in Europe , due to the chronic diseases associated with smoking, alcohol and a diet of fried things and sugar. Drug addiction is a pandemic. Wages are lower than in the south, and the symptoms of bullish capitalism are less evident. There’s less flash, and fewer of the toys and decorations of leisure-time consumerism, and this may be the reason for the relative happiness gap. For once, Marx might have been right: Poverty is relative. It isn’t what you have, it’s what you have in relation to your neighbor. Resentment Sent Abroad Scotland has a paucity of millionaires compared with England. The difference between what most employers take out of the business and what they pay their workers isn’t nearly as great as in the south. And here, the large conspicuous landowners tend to be foreigners -- Dutch, German, Scandinavian and, of course, English -- so resentment about absentee landlords is all sent abroad. Edinburgh’s small but vibrant financial sector hasn’t cast such an avaricious paw over the country as the City of London does, even though the Scottish banks were some of the worst behaved in the financial crisis. There is the sense that Scots are all in this together -- and that, combined with a natural lack of deference to wealth, or perceived position, seems to be paying the happiness dividend. Of course, the English see it slightly differently. They are paying for all this social largesse. State spending from the U.K. government is $15,800 per capita in Scotland, some 10 percent higher than in England. The English point out that only 1 in 3 Scots is a net contributor to the tax pot. In turn, the Scots reply that the pot comes in great part from their oil revenue, and that their devolved government should be allowed to raise its own taxes. This would be the big step on the road to independence and breaking of the union. What’s new about the idea it is that the traction for a financially independent Scotland is now coming from England. It seems that the relative unhappiness is flowing uphill from the richer to the poorer. It is the blinged-up, credit-maxed English who are resenting the poorer, cash- strapped, clannish Scots, and they may push for divorce. Up here, most would rather have a separation, and maintain the cushion of comprehensive social services. It falls short of full independence. And the moral from all this may be that to attain national happiness in hard times, what you need, more than money, is camaraderie, and fair shares of hardship. It also helps if you have a mutually agreed upon old enemy who is also your best friend. (A.A. Gill, the restaurant and TV critic of the Sunday Times of London , is a Bloomberg View columnist. The opinions expressed are his own.) To contact the writer of this column: A.A. Gill in London at [email protected]. To contact the editor responsible for this story: Tobin Harshaw at [email protected] . |
Goldman Protesters Are Almost Outnumbered by Security Guards in New Jersey.Protesters assembling today outside a Goldman Sachs Group Inc. (GS) building in New Jersey were met by almost as many security guards and police officers as “Occupy Wall Street” demonstrators sought to single out the bank. About 50 people gathered at a Goldman Sachs building surrounded by metal barricades in Jersey City , where 30 to 40 officers and guards were waiting. The investment bank’s employees watched from windows as the crowd chanted “We are the 99 percent” before breaking into discussion groups. “Goldman Sachs has too many people in government, and too much influence,” said Pat Meany, 53, who arrived on his bicycle and wore clothes painted with fluorescent colors and peace symbols. “It seems like they’re looking out for America’s rich. It’s not for the good of all Americans.” In Trenton, about three dozen protesters were initially outnumbered by members of the media for a simultaneous gathering at the World War II memorial across from the Statehouse. The crowd grew to about 75 people within an hour as participants took turns to speak about corporate greed, the influence of money on politics, war and the environment. “There is no reason why this country should be the way it is,” said Heath Weaver, 46, of Toms River, a self-employed videographer who came to the Trenton event with a sleeping bag. “Instead of people coming together we’ve been fighting against each other and nothing’s getting solved.” Stephen Cohen , a spokesman for New York-based Goldman Sachs, declined to comment on the demonstration. To contact the reporters on this story: Charles Mead in New York at [email protected] ; Elise Young in Trenton at [email protected]. To contact the editors responsible for this story: David Scheer at [email protected] ; Mark Tannenbaum at [email protected] . |
Sprott Silver ETF Premium at 18.66 Percent on Oct. 5.The Sprott Physical Silver Trust exchange- traded fund closed at a premium of 18.66% on Oct. 5, according to figures available on the fund’s website. A premium means that the closing price of the shares is higher than the value of its underlying holdings of the metal. The fund’s silver holdings were unchanged at 22,298,540 ounces To contact the reporter on this story: Stephen Rose in Washington at [email protected] To contact the editor responsible for this story: Alex Tanzi at [email protected] |
Hutchison Whampoa Says Europe Operations ‘Very Resilient’.Hutchison Whampoa Ltd. (13) said its operations in Europe are “very resilient,” according to a statement to the Hong Kong stock exchange today. Europe accounted for 25 percent of the company’s first-half earnings before interest, taxes, depreciation and amortization, it said. Net asset value of Hutchison is HK$119 per share, or $65 billion, the company said, citing an average of analyst estimates. To contact the editor responsible for this story: Marco Lui at [email protected] |
Freddie Mac to Redeem Step-Coupon Notes Due 2025.The following issue is being redeemed via the company's call option: Issuer: Freddie Mac Coupon: Step-Coupon Maturity: July 14, 2025 Redemption Amount: $100 million Redemption Price: 100 percent Amount Remaining: Fully Retired Security ID: 3134G1MC5 Effective Date: Oct. 14, 2011 |
Dividend Impact to the FTSE 100 for Week of Oct. 10.The following table lists companies in the FTSE 100 index (UKX) with ex-dividend dates during the week of Oct. 10. The effect would lower the index by 2.70 points, based on the index closing price of 5291.26 on Oct. 6. To contact the reporter on this story: Wendy Soong in New York at at [email protected] To contact the editor responsible for this story: Alex Tanzi at at [email protected] |
Solyndra’s Bid for Fresh Guarantee Never Seriously Considered, Chu Says.The U.S. Energy Department never seriously considered providing a second loan guarantee for failed California solar-panel maker Solyndra LLC, Energy Secretary Steven Chu said. “It was not ever in serious contention,” Chu said at an event in Washington today. Solyndra, which filed for bankruptcy protection Sept. 6 and had its Fremont, California, offices raided by the FBI two days later, applied for a $469 million U.S. loan guarantee a week after winning U.S. backing for a $535 million loan in September 2009, according to a filing to the U.S. Securities and Exchange Commission three months later. The second guarantee would have helped finance an expansion of a factory the company hadn’t yet built. The Energy Department informed Solyndra other applicants were being considered, said Chu, who attended the factory’s groundbreaking ceremony in September 2009. Chu defended U.S. support for renewable energy loan guarantees. “It’s very important to not say after one bad loan that, ’Oh, time to change path, this is no good,’” he said today. Other countries are supporting clean energy as a way to become more efficient and competitive globally, Chu said. “If we’re the last to recognize this, then we will be the importers,” he said. E-mails released this week as part of a congressional investigation into Solyndra’s loan guarantee showed officials from the White House Office of Management and Budget worried the second guarantee request was imminent. “I’ve been told we should expect to see that project soon for conditional commitment,” a budget office official wrote in an April 8, 2010, e-mail. Another official said in an e-mail: “Possible to close and default on one before closing on a second??? Could be a record.” To contact the reporters on this story: Brian Wingfield in Washington at [email protected] ; Jim Snyder in Washington at [email protected] To contact the editor responsible for this story: Larry Liebert at [email protected] |
SWISS DAYBOOK: UBS Equities Heads Resign, Novartis, Swiss Re.UBS AG (UBSN) said Francois Gouws and Yassine Bouhara resigned as co-heads of Global Equities following the recent unauthorized trading incident. Mike Stewart will become sole global head of Equities, the bank said in an e-mailed statement. EQUITIES: *Novartis will lower the price of its Lucentis drug by 30 percent, AWP reported *Zurich Financial Services said it closed the acquisition of 51 percent participation in the life insurance, pension and general insurance operations of Banco Santander SA in Brazil and Argentina *Swiss Re said it “comfortably exceeds” a capital buffer of between $3 billion and $5 billion required for a Standard & Poor’s AA capital rating *Sika AG said it’s agreed to buy Comercial de Preresa * Galenica AG (GALN) said its joint venture with Fresenius Medical Care AG & Co, Vifor Fresenius Medical Care Renal Pharma Ltd., got Swiss and European antitrust approval and will proceed with the targeted expansion of its operation in Europe and other countries after the formal close in November *Basilea Pharmaceutica AG said shareholder HBM BioVentures has requested an extraordinary shareholders meeting to elect additional members to the board of directors *Nobel Biocare and Straumann were cut to “sell” at Citi *Kuehne & Nagel said it opened a new distribution center in Cartagena WHAT TO WATCH: *Switzerland’s foreign currency reserves at 9 a.m. *September consumer price index at 9:15 a.m. MARKETS: *The SMI climbed 1.1 percent to 5,504.99 *The SPI rose 1.2 percent to 4973.87 *The Stoxx Europe 600 Index increased 3.1 percent to 224.15 *The MSCI Asia-Pacific Index rose 2.6 percent at 7:39 a.m. Zurich time *Euro-franc traded at 1.23069 at 7:43 a.m. Zurich time To contact the reporters on this story: Corinne Gretler in Zurich at [email protected] ; Carolyn Bandel in Zurich at [email protected] To contact the editor responsible for this story: Andrew Rummer at [email protected] |
U.S. Senate Votes 62-38 to Limit Debate on Chinese-Currency Legislation.The Senate advanced legislation letting U.S. companies seek duties to compensate for an undervalued Chinese yuan, setting up a vote on the measure as soon as today. The Senate approved 62-38 a motion limiting debate on the bill backed by Democrats such as Senators Sherrod Brown of Ohio and Charles Schumer of New York and Republicans including Lindsey Graham of South Carolina and Jeff Sessions of Alabama. The legislation, opposed by business groups such as the U.S. Chamber of Commerce, may stall in the House. Republican Speaker John Boehner of Ohio said today that the bill could start a trade war. “To force the Chinese to do what is arguably very difficult to do I think is wrong, it’s dangerous,” Boehner said today at the Washington Ideas Forum, sponsored by Atlantic magazine and the Aspen Institute. “Given the economic uncertainty around the world, it’s just very dangerous and we should not be engaged in this. ‘‘I frankly think the president agrees with me but why isn’t the president speaking out?,” Boehner said. “Is he too busy campaigning?” President Barack Obama said at a press conference today that while “China has been very aggressive in gaming the trading system to its advantage and to the disadvantage of other countries, particularly the United States,” he wants to make sure the U.S. doesn’t pass laws that “are symbolic, knowing that they’re probably not going to be upheld by the World Trade Organization.” Schumer’s Past Efforts Schumer, who has proposed similar measures on China ’s currency over the past six years, has failed so far to get an up-or-down Senate vote on a bill. Supporters say the legislation has a better chance of passing the Senate this time because China, the world’s second- biggest economy after the U.S., has become a target for lawmakers frustrated by the widening trade deficit with that nation and domestic unemployment stuck at 9.1 percent. The bill mandates that the Treasury Department identify misaligned currencies, instead of finding that a currency was manipulated, as is currently required. Governments that undervalue their currencies and don’t take corrective action would face penalties, including increased dumping duties, a ban on federal procurement in the U.S. and ineligibility to receive financing form the Overseas Private Investment Corporation. The yuan has appreciated 5.1 percent against the U.S. dollar in the past year and 24 percent in the past five years, the steepest advance among 25 emerging-market currencies tracked by Bloomberg. China limits currency conversions for investment purposes and buys dollars to slow the yuan’s advance and preserve the competitiveness of China’s exports. To contact the reporter on this story: Eric Martin in Washington at [email protected] To contact the editor responsible for this story: Larry Liebert at [email protected] |
Tokyo Electric Says Worker at Fukushima Nuclear Plant Dies.Tokyo Electric Power Co. said a worker at its wrecked Fukushima nuclear plant died today in hospital after falling ill yesterday. The company said it was unlikely the cause of death was related to radiation. The male subcontractor, who was in his 50s, had been working at the plant since August, Tokyo Electric spokeswoman Chie Hosoda said by phone. His cumulative radiation dose was 2.02 millisieverts, she said. The internationally recommended exposure for a member of the public is 1 millisievert. To contact the reporter on this story: Tsuyoshi Inajima in Tokyo at [email protected] To contact the editor responsible for this story: Aaron Sheldrick at [email protected] |
U.S. Oct. Leading Indicator of National Employment.U.S. manufacturers will add more workers in Oct. compared to a year ago, according to the Leading Indicator of National Employment. The report is compiled by surveying over 500 human resource managers at manufacturing firms and 500 service sector firms. To contact the reporter on this story: Alex Tanzi in Washington at [email protected] To contact the editor responsible for this story: Marco Babic at [email protected] |
Switzerland September Consumer Prices: Summary.Following is a summary of the September CPI report from the Swiss Statistics Office in Neuchatel Base year: December 2010 = 100. Hamonised CPI base year: 2005 = 100. NOTE: Core CPI Index excludes fresh and seasonal products, energy and fuel. Definition of core inflation have changed from January 2011 release. Core CPI monthly and yearly percent changes before December 2010 are calculated by Bloomberg News. SOURCE: Federal Statistics Office of Switzerland To contact the reporter on this story: Mark Evans in London at [email protected] To contact the editor responsible for this story: Marco Babic at [email protected] |
Italy Confcommercio GDP, Consumption Forecasts to 2012.Following is a table of economic forecasts for Italy from the General Confederation of Trade, Tourism, Services and SMEs, or Confcommercio, in Rome: To contact the reporter on this story: Giovanni Salzano in Rome at [email protected] To contact the editor responsible for this story: Marco Babic at [email protected] |
Downgrade Doubles Bond Risk Gap as New Zealand Loses AAA: Australia Credit.Australia’s credit market advantage to New Zealand increased to the highest level in more than two years after Standard & Poor’s stripped the smaller nation of its AAA local currency rating. Credit-default swaps insuring Australian bonds for five years traded at 100.5 basis points on Oct. 5, 23 basis points less than the price to guard against a default by New Zealand, according to CMA. The gap was the widest since July 2009 and compares with an average of 11 basis points over the past year. S&P and Fitch Ratings cut New Zealand’s top credit rating on local currency debt for the first time last week because government and household debt is expanding. Australia, which pledged to return to a budget surplus by 2013, still holds the highest bond rankings. That’s reflected in the debt market , where New Zealand 10-year bond yields have risen 13 basis points to 4.44 percent since Sept. 29, when Fitch announced the cuts, while rates on similar-maturity Australian notes gained 1 basis point to 4.27 percent. “The sovereign fundamentals of New Zealand are marginally worse than Australia,” said Susan Buckley, head of global fixed-interest at Brisbane-based QIC, which manages about A$25 billion ($24 billion) in bonds and cash. “You’ll demand a bit more risk premium attached to New Zealand bonds versus Australian yields. Australia has a lower budget deficit and will return to surplus sooner.” Hong Kong, Singapore S&P reduced New Zealand’s long-term local currency rating one level to AA+ with a stable outlook on Sept. 30 while the foreign-currency debt was cut to AA from AA+. Moody’s Investors Service reaffirmed New Zealand at Aaa for local and foreign- currency debt in May. Australia’s AAA long-term sovereign ratings were affirmed with a stable outlook by S&P on Sept. 23, making it one of three Asia-Pacific nations with Hong Kong and Singapore to hold the company’s top credit grade, Bloomberg data show. Its local currency bonds have AAA grades from S&P, Fitch and Moody’s. Fitch rates the nation’s foreign currency debt at AA+, while Moody’s ranks it the highest grade. S&P cited concern New Zealand’s “external position will deteriorate further at a time when the country’s fiscal settings have been weakened by earthquake-related spending pressures and fiscal stimulus to support growth,” according to a statement. A magnitude-7 earthquake in Christchurch and surrounding districts in September last year wrecked homes and roads, before a temblor measuring 6.3 struck close to the city on Feb. 22, killing 181 people, slowing spending and setting back business investment. Slowing Growth New Zealand’s economy almost stalled in the second quarter with gross domestic product rising 0.1 percent from the previous three months. Australia ’s economy grew 1.2 percent in the three months to June 30, the fastest pace in four years. Traders have pared bets on an increase in New Zealand’s benchmark rate, which is at a record low 2.5 percent, to 19 basis points over 12 months from 51 on Sept. 1, according to a Credit Suisse Group AG index based on swaps. Australia’s 4.75 percent key rate is the highest in the developed world, with investors wagering that a global slowdown may force the central bank to reduce that by 1.44 percentage points over a year, a separate gauge shows. Quake costs are a challenge to the New Zealand government’s target of returning to a budget surplus by 2014 to 2015, Finance Minister Bill English said in September. The deficit was about NZ$18 billion ($14.2 billion) in the year ended June 30, the government said Aug. 30. It said in August the government’s share of earthquake costs had increased to NZ$12.9 billion. ‘Swallowing the Extras’ “I don’t think we’re at the end of that process,” English said. “It’s a problem. We’ve got to keep making progress and keep swallowing the extras.” Australia’s budget deficit was narrower than forecast in the year through June as a reduction in spending more than offset lower-than-estimated tax revenue , Treasurer Wayne Swan said Sept. 30. The shortfall was A$47.7 billion in fiscal 2010 to 2011, compared with the A$49.4 billion forecast in the May budget, Swan said. “The government remains determined to return the budget to surplus in 2012 to 2013, despite softer-than-expected revenues and increased global instability that will inevitably make the task more difficult,” he said. The Aussie dollar traded at 97.88 U.S. cents at 2:55 p.m. after reaching $1.1081 on July 27, the highest since it was freely traded in 1983. New Zealand’s currency fetched 77.31 cents after climbing to its post-float high of 88.43 on Aug. 1. Bond Returns Australian corporate debt returned 8.4 percent year-to-date, compared with gains of 2.8 percent on global company notes, Bank of America Merrill Lynch indexes show. The extra yield investors demand over government securities to hold Australian corporate debt surged 64 basis points last quarter to 241 basis points, as global premiums jumped 101 to 264, the indexes show. The spread on the Australian index rose to 249 on Oct. 6, the highest since August 2009. The Markit iTraxx Australia index slipped 1 basis point to 217 as of 11:35 a.m. in Sydney, according to Credit Agricole SA. Credit-default swap indexes are benchmarks for protecting bonds against default, and traders use them to speculate on credit quality. A drop signals improving perceptions of creditworthiness, while an increase suggests the opposite. Australian sovereign bonds returned 10.9 percent in the past 12 months, the most among 26 markets tracked by Bloomberg/EFFAS indexes. New Zealand’s debt was the second-best performer, advancing 10 percent. The Australian Office of Financial Management said today it plans to issue a new bond with a maturity of about 15 years via syndication. The funding arm for the government named Citigroup Inc., Deutsche Bank AG and UBS AG as joint lead managers for the issue. ‘Liquid Market’ Australia is “a better credit and a more liquid market,” said Warren Potter, a bond portfolio manager at AMP Capital Investors in Wellington, New Zealand, who help manage NZ$2.6 billion in fixed income assets. Most investors “realize that the credit story in New Zealand, while not as good as Australia and not as good as it was previously, still stands out amongst other credits globally,” he said in a telephone interview yesterday. Australia has $190 billion in sovereign debt outstanding and its currency is the world’s fifth most-traded, accounting for 7.6 percent of daily trades in currency markets , according the Bank of International Settlements’ triennial survey. The New Zealand dollar is the world’s 10th most-traded currency with $59.9 billion in average daily transactions. New Zealand’s government has the equivalent of $46 billion of bonds on issue, according to Bloomberg data. Offshore Investors Non-resident investors held 62.5 percent of New Zealand government bonds in August, up from 60.1 percent in July, according to data from the Reserve Bank. Offshore investors held 75 percent of Australian bonds as of June 30, up from 73 percent at the end of the previous quarter, according to data from the central bank and statistics bureau. New Zealand sold NZ$200 million in bonds maturing between 2015 and 2023 yesterday. The auction drew bids worth 2.4 to 4.1 times the amount on offer. “The auction result was solid,” Commonwealth Bank of Australia analysts wrote in a note to clients yesterday. “We suspect that eventually, New Zealand’s relatively sound fiscal position (on a global comparison) and diversification away from Europe and the U.S. will underpin solid demand for kiwi bonds.” To contact the reporters on this story: Candice Zachariahs in Sydney at [email protected] ; Sarah McDonald in Sydney at [email protected]. To contact the editors responsible for this story: Rocky Swift at [email protected] ; Shelley Smith at [email protected] . |
ECB Says It Has ‘No Objection’ to Asmussen Joining Board.The European Central Bank said it has “no objections” to the appointment of German Deputy Finance Minister Joerg Asmussen as a member of the bank’s Executive Board. In an e-mailed statement, the Governing Council of the Frankfurt-based central bank said Asmussen is “a person of recognized standing and professional experience” as required by European law. The appointment is to be confirmed by heads of euro-area governments. To contact the reporter on this story: Jeff Black in Frankfurt at [email protected] To contact the editor responsible for this story: Simone Meier at [email protected] |
Swiss Bid for ‘All-Encompassing’ Solution to Tax-Evasion Dispute With U.S..Switzerland will bid to use existing treaties to resolve a dispute over tax evasion by Americans with Swiss bank accounts and avert the risk of criminal prosecutions. “We are aiming for an all-encompassing solution that will apply to all the banks,” Finance Minister Eveline Widmer- Schlumpf said in an interview in the Swiss capital Bern, commenting on negotiations with the U.S. “We don’t want to be confronted with the same issues time and again.” The government hopes to submit the results of talks with the U.S. to lawmakers in the “foreseeable future,” Widmer- Schlumpf said before signing an accord with the U.K. in London yesterday. That deal, following a similar agreement with Germany last month, introduces a levy on wealthy Britons holding offshore accounts with Swiss private banks. Switzerland, the world’s biggest center for offshore wealth, is seeking settlements after agreeing in March 2009 to meet international standards to avoid being blacklisted as a tax haven by the Organization for Economic Cooperation and Development. While the U.K. and German accords allow client identities to remain secret, the U.S. is targeting Credit Suisse Group AG and other Swiss banks with criminal investigations as it cracks down on tax evasion. “While major OECD partner countries like the U.K. and Germany have been negotiating pernicious and weak settlements with Switzerland on information exchange, the U.S. authorities continue to apply robust pressure on Swiss banks,” the London- based Tax Justice Network said earlier this week in a study that ranked Switzerland at the top of a financial secrecy index. Banks Targeted Eight offshore banks are under federal grand jury investigation for facilitating tax evasion by American citizens, the U.S. Justice Department said last month. In 2009, prosecutors charged UBS AG, the largest Swiss bank, with aiding tax evasion by U.S. clients. UBS avoided prosecution by paying $780 million, admitting it fostered tax evasion, and giving the U.S. Internal Revenue Service data on more than 250 accounts. It later turned over data on another 4,450 accounts. “We had the same experience with UBS last year, and now another 11 banks are being targeted,” Widmer-Schlumpf said in the interview. “There is a certain risk of an indictment or civil or criminal proceedings. We hope that won’t materialize and it’s something we’re working hard to avoid.” The U.S. has agreed to base the negotiations with Switzerland on two existing double-taxation agreements, said Widmer-Schlumpf. On Aug. 22, Swiss President Micheline Calmy-Rey said the way U.S. tax authorities were seeking information from Switzerland on alleged tax evasion by Americans was “legally unacceptable.” ‘Temporary Outflows’ Switzerland and the U.S. must agree on a tax deal that complies with Swiss law, Patrick Odier, chairman of the Swiss Bankers Association , said last month. The settlements with the U.K. and Germany may prompt some wealthy clients to pull money from Swiss banks, said Widmer- Schlumpf. “There might be temporary outflows of funds,” she said. “But anyone who withdraws assets and deposits them in another country risks being monitored there and being subject to administrative assistance proceedings.” Under the accord announced on Aug. 24 and due to come into force in 2013, Swiss banks will pay 500 million Swiss francs ($544 million) to the U.K. government to cover the failure by their clients to disclose undeclared money in the past. The banks will later be reimbursed from taxes paid by their customers. Withholding Tax Swiss banks will levy a withholding tax of 48 percent on interest income and 27 percent on capital gains earned by Britons with offshore accounts, according to the two governments. Revenue generated will go to the British Treasury, while client identities remain secret. The U.K. expects to raise more than 5 billion pounds ($8 billion) from the one-off levy. To prevent new, undeclared funds from being deposited in Switzerland, U.K. authorities can submit requests for information that must state the name of the client, though not necessarily the bank’s name, the Finance Ministry said. The number of requests will be limited to 500 a year and so-called fishing expeditions aren’t permissible. “In the long run, the quality and the reliability of the legal system should be the main reasons for attracting people and not the option of stashing untaxed funds in Switzerland,” said Widmer-Schlumpf. Pilot Projects The U.K. and German agreements are pilot projects, she said. “Several European countries as well as emerging market nations are interested in them,” she said. “At present, we are in discussions with them about technical details but there are no official negotiations yet.” Widmer-Schlumpf said the cap on the Swiss franc, introduced on Sept. 6, is helping exporters. “What we can see is that the measure has apparently been effective and that exporters now have a certain degree of security,” the finance minister said. “We hope that the franc will weaken further.” The Swiss central bank last month imposed a ceiling of 1.20 francs versus the euro to aid exporters and fight deflation threats. The country’s currency had reached a record high of 1.0075 versus the euro on Aug. 9 as investors sought a safe haven from the euro area fiscal crisis. ‘Still Overvalued’ Still, “I also see that the export sector is having problems as the Swiss franc is still overvalued,” Widmer- Schlumpf said. “And the Swiss economy will continue to face problems in the fourth quarter and the coming year.” The government last month lowered its forecast for Swiss economic growth. Gross domestic product will rise 1.9 percent this year and 0.9 percent in 2012, it said, after previously projecting 2.1 percent and 1.5 percent respectively. Widmer-Schlumpf declined to comment on whether the central bank should raise the cap on the franc or take other measures to support the economy. “The SNB will use its exclusive mandate to take measures necessary,” she said. “However, the federal council welcomes the SNB’s measures.” To contact the reporters on this story: Klaus Wille in Zurich at [email protected] ; To contact the editor responsible for this story: Frank Connelly at [email protected] |
Arabtec Rises for First Time This Week After India Contract.Arabtec Holding Co. (ARTC) rose for the first time this week after the United Arab Emirates’ biggest construction company said its joint venture in India won a contract valued at 750 million dirhams ($204 million). The shares advanced 1.5 percent to 1.32 dirhams at 10:31 a.m. in Dubai. The benchmark DFM General Index rose 0.6 percent. The Arabtec Construction LLC-Raheja venture received a letter of intent from Raheja Developers Ltd. to build three mixed-use projects in New Delhi and Gurgaon, India, the company said in a statement to the Dubai bourse today. To contact the reporter on this story: Alaa Shahine in Dubai at [email protected] To contact the editor responsible for this story: Claudia Maedler at [email protected] |
Netherlands Inflation Accelerates in September to 3 Percent.The inflation rate in the Netherlands, calculated using a harmonized European Union method, increased to 3 percent in September from 2.8 percent in August, national statistics bureau CBS in The Hague said today. To contact the editor responsible for this story: Jurjen van de Pol at [email protected] |
Target, Limited Brands September Sales Beat Analysts’ Estimates on Promos.Target Corp. (TGT) and Limited Brands Inc. helped September retail sales beat analysts’ estimates as promotions drove consumers to increase purchases amid concerns the economic recovery may stall. Revenue at Target, the second-largest U.S. discounter, climbed 5.3 percent, surpassing the average projection for a 3.9 percent gain from analysts surveyed by Retail Metrics Inc. Limited Brands, owner of the Victoria’s Secret chain, posted an 11 percent increase in same-store sales, beating the 4.9 percent average estimate. Retailers offering discounts and promotions helped lure shoppers and allay concerns that the global economy may slide into another recession. September’s results may bode well for the holiday shopping season that begins in November, said Ken Perkins , president of Retail Metrics. “It’s setting up well for retailers, barring an implosion in Europe ,” Perkins said. “Retailers are pulling out all the stops to drive traffic with deep discounting. Consumers need to be enticed to shop and that’s what is happening.” Target rose $2.15, or 4.3 percent, to $51.91 at 4 p.m. in New York Stock Exchange composite trading. Limited advanced 31 cents to $40.59. Sales for the more than 20 chains tracked by Swampscott, Massachusetts-based Retail Metrics rose 5.8 percent, the 25th straight gain, and surpassing projections for a 4.9 percent increase. Retailers have beaten projections every month this year. Higher Costs Most chains count locations open at least a year to tabulate same-store sales. The revenue is a key indicator of a retailer’s growth because new and closed sites are excluded. Shoppers also faced higher prices as retailers passed along increased costs for labor and raw materials, said Ken Stumphauzer, a retail analyst for Sterne Agee & Leach Inc. in New York. “It’s incongruent with what’s going on in the market,” Stumphauzer said in a telephone interview today. “It suggests that the U.S. economy is fine.” Luxury chains Nordstrom Inc. (JWN) and Saks Inc. (SKS) surpassed estimates as high-end shoppers continued spending amid the volatility in global stock markets. Department store chains Macy’s Inc. (M) , Kohl’s Corp. (KSS) and Ross Stores Inc. (ROST) also exceeded estimates. Among discounters, Costco Wholesale Corp. (COST) , the largest U.S. warehouse-club chain, and TJX Cos. also posted gains that beat projections. J.C. Penney, Target Gap Inc. (GPS) , the largest U.S. apparel chain, continued to struggle to improve its business in North America as sales at all three of its brands declined. Overall same-store sales fell 4 percent, missing a projection for a drop of 3.7 percent. J.C. Penney Co., the third-largest department store chain, posted a sales decline of 0.6 percent, missing estimates for a 0.9 percent gain. The retailer also lowered its third-quarter profit forecast to as much as 15 cents a share, down from a maximum of 25 cents. Target’s sales exceeded expectations with gains in several categories, Chief Executive Officer Gregg Steinhafel said in a statement. Same-store sales in October will increase in the low- to-mid single digits, the company said on a recorded statement. Limited’s Bath & Body Works brand posted a sales gain of 12 percent, surpassing a projection of 1.3 percent, because of increases in home fragrance and anti-bacterial products. To contact the reporter on this story: Matt Townsend in New York at [email protected] To contact the editor responsible for this story: Robin Ajello at [email protected] |
Taiwan Cabinet Approves Tax Rebates on 7 Types of Products.Taiwan Cabinet approved proposal from the Ministry of Finance to resume tax rebates for exports of seven types of products including chemicals, electronics, plastics and textiles, the Government Information Office said in an e-mailed statement today. The measure is estimated to benefit exporters by a minimum of NT$435 million per year, it said. To contact the editor responsible for this story: Adela Lin at [email protected] |
European Benchmark Coal for Next Year Gains Most in Three Weeks.Benchmark European coal advanced, heading for a highest daily gain in three weeks. Thermal coal for delivery to Amsterdam, Rotterdam or Antwerp with settlement next year increased 0.8 percent to $120 a metric ton as of 10:35 a.m. in London. That would be the biggest one-day rise since Sept. 15. Bloomberg tracks data from information supplied by ICAP Plc, GFI Group Inc., Spectron Group Ltd., Credit Suisse Group AG, IHS McCloskey, Tradition Financial Services and Tullett Prebon Plc. To contact the reporter on this story: Marek Strzelecki in Warsaw [email protected] To contact the editor responsible for this story: Stephen Voss at [email protected] |
Austria’s Duropack Seeks Full Takeover of Croatia’s Belisce.Austria’s Duropack AG offered to acquire the remaining shares of Croatia ’s packaging manufacturer Belisce d.d. it doesn’t already own, the Zagreb stock exchange said in a statement on its website. Duropack already owns 67 percent of the Croatian paper maker. To contact the reporter responsible for the story: Jasmina Kuzmanovic in Zagreb at [email protected] To contact the editor responsible for the story: James M. Gomez at [email protected] |
Greek Bank Deposits in August Rose to 188.6 Billion Euros.Greek bank deposits by businesses and households rose to 188.6 billion euros in August from 187.2 billion euros the previous month, according to a statement released by the Athens-based Bank of Greece (TELL) on its website today. To contact the reporter on this story: Natalie Weeks in Athens at [email protected] To contact the editor responsible for this story: Maria Petrakis at [email protected] |
Creek & River Announces Planned FY Group Dividend of 100.00 Yen.Creek & River Co Ltd (4763) (4763) announced full-year group dividend estimates for the period to Feb. 29. Figures are in yen. ================================================================================ Forecast Previous Dividend ================================================================================ Full-Year Dividend 100.00 100.00 1st-Half Dividend N/A 0.00 2nd-Half Dividend 100.00 100.00 ================================================================================ To contact the editor responsible for this story: Teo Chian Wei at +81-3-3201-3623 or [email protected] |
USDA Montana Spot Grain Closing Prices for October 6.October 6 (Bloomberg) -- This table displays the latest daily spot or bid prices for durum wheat. Prices are in dollars a bushel Information is supplied by the U.S. Department of Agriculture. *Montana cash prices* US 1 Hard Red Winter Wheat US 1 Durum Ordinary 11 pct 12 pct 13 pct 13pct Billings Area 5.20-5.35 5.80-5.95 6.35-6.50 6.85-7.00 Golden Triangle 5.35-5.47 5.95-6.07 6.50-6.62 7.00-7.10 11.75-12.00 Great Falls Area 5.46-5.49 6.06-6.09 6.61-6.64 7.11-7.14 Northcentral Mt 5.45-5.58 6.05-6.18 6.43-6.73 6.95-7.23 Northeast Mt 5.06-5.26 5.66-5.86 6.02-6.41 6.71-6.91 12.25-12.35 Southeast Mt 4.88-5.26 5.48-5.86 5.63-6.41 5.93-6.91 Southwest Mt na na na na US 1 Dark Northern Spring Wheat 13 pct 14 pct 15 pct Billings Area 8.37-8.52 8.77-8.92 8.97-9.12 Golden Triangle 8.41-8.53 8.73-8.85 8.85-8.97 Great Falls Area 8.55-8.61 8.81-8.87 8.81-8.99 Northcentral Mt 8.55-8.67 8.81-9.07 8.87-9.27 Northeast Mt 8.17-8.37 8.45-8.65 8.42-8.85 Southeast Mt 7.65-8.37 8.05-8.65 8.25-8.85 Southwest Mt na na na US 1 Malt Barley US 2 Feed Harr/cwt Barley/cwt Billings Area na na Golden Triangle 13.00-13.50 9.50-10.00 Great Falls Area 13.50 9.50-10.00 Northcentral Mt nb 11.00 Northeast Mt 13.50 10.75 Southeast Mt na Southwest Mt na *Prices not necessarily representative of all terminals within MT. nb û no bid na û not available Prices are determined by a USDA survey of grain purchasers with elevators located in seven regions of Montana. Prices are displayed as a "low-high" range, or as a "single" price depending upon the degree of consensus among the purchasers. Durum wheat is the hardest wheat. The test weight is at least 60 pounds a bushel. Durum averages 15 percent protein and is mainly used in the making of pasta. |
Kenyan Shilling Gains for Second Day as Central Bank Raises Rate.Kenya ’s shilling strengthened for the second day against the dollar after the central bank raised its benchmark interest rate to curb inflation AND stem the currency’s decline to the weakest on record. The currency of East Africa’s biggest economy appreciated 0.5 percent to 100.85 per dollar by 11:29 a.m. in Nairobi. The Central Bank of Kenya yesterday increased its rate by a record 4 percentage points to 11 percent, signalling a policy shift in a bid to combat inflation of 17.3 percent, more than triple the government’s target. “The decision by central bank to raise its rate has positively supported the shilling,” Duncan Kinuthia a trader at Nairobi-based Commercial Bank of Africa Ltd., said by phone. The shilling has depreciated 20 percent this year, making it the world’s worst performer against the dollar. It reached a record-low 104.2 on Sept. 27 as the worst regional drought in 60 years boosted food prices. |
Ukraine September Consumer Prices: Summary.Following is a summary of the September consumer prices report from the State Statistics Committee in Kiev: To contact the reporter on this story: Harumi Ichikura in London at [email protected] To contact the editor responsible for this story: Marco Babic at [email protected] |
Maruetsu Inc/the Announces Planned FY Group Dividend of 6.00 Yen.Maruetsu Inc (8178) /the (8178) announced full-year group dividend estimates for the period to Feb. 29. Figures are in yen. ================================================================================ Forecast Previous Dividend ================================================================================ Full-Year Dividend 6.00 6.00 1st-Half Dividend N/A 3.00 2nd-Half Dividend 3.00 3.00 ================================================================================ To contact the editor responsible for this story: Teo Chian Wei at +81-3-3201-3623 or [email protected] |
Colombia September Consumer Price Index by Component.Following are the details of the Sept. consumer prices report from Colombia’s National Statistics Administration in Bogota: To contact the reporter on this story: Fernando Simon in Sao Paulo at [email protected] To contact the editor responsible for this story: Marco Babic at [email protected] |
Buyers’ Remorse on Film Breaks Leads States to End Tax Deals.Randy Murray is in the second month of filming a six-episode series in Regina, Saskatchewan called “Edge of War” for television networks owned by Discovery Communications Inc. (DISCA) He says he’d rather spend the $2.5 million budget for the project back home in Arizona. That isn’t realistic, Murray says, because Arizona let a 20 percent tax credit for film production expire on Dec. 31. He and his crew are now filming more than 1,500 miles away from Arizona to take advantage of a 40 percent tax credit in Regina. “It’s great news for us because we still got a TV series on the air,” said Murray, who owns Phoenix-based Randy Murray Productions. “But we don’t get to support our local businesses and our local industries.” After a decade-long battle among states competing for a slice of Hollywood, some states and municipalities struggling with budget woes are backing away from film-tax incentives. Lawmakers in Washington state allowed a film tax credit to expire in July. Michigan, where a tax credit of up to 42 percent was one of the most generous in the U.S., this month will replace its incentive with an expenditure totaling $25 million a year for film projects it deems worthwhile. “It very much is becoming an issue,” said Nancy Fox, the national director of government affairs and policy at the Screen Actors Guild in Los Angeles. “All states are struggling with budget issues and we’re seeing many of those states that implemented tax credits reconsider them or slashing them.” Expanding Incentives Other states are moving in the opposite direction. Alabama , Illinois , Maryland , Mississippi and Utah have expanded film incentives while Kansas has resumed its program. In 2000, four states offered incentives for the film sector totaling $2 million, according to the Tax Foundation , a Washington group that advocates lower taxes. The trend peaked in 2010 when 40 states offered incentives reaching almost $1.4 billion. In 2011, the Tax Foundation says 37 states will offer incentives of about $1.3 billion. Tax incentives for the industry gained national attention last month when New Jersey Governor Chris Christie blocked a $420,000 credit that would have supported the production of MTV’s “Jersey Shore.” Mark Robyn, a Tax Foundation economist, said the issue goes beyond the so-called Snooki-subsidy. Can’t ‘Be Hollywood’ “They’re just not good policy,” he said. “Not every state can be Hollywood. There’s not enough movies.” The Center on Budget and Policy Priorities , a Washington research group that favors programs to assist low-income individuals, reported in December that the tax incentives often don’t benefit the states as planned. The report found that such programs tend to lose revenue for states, and the projects might have gone forward without tax breaks. Permanent, high-paying jobs related to TV and film production also don’t materialize as promised, the report said. “The economic activity induced by these subsidies generates insufficient tax revenue to offset their cost,” according to the report. “Given that 49 out of 50 states have a balanced budget amendment, states offering film subsidies must therefore cut public services or increase taxes elsewhere to make ends meet.” Michelle Begnoche, spokeswoman for Michigan ’s film office , said the state must be more selective about which projects to back now that the state can’t offer tax credits. The office’s $25 million pot of money for film production is a “significant difference” from the $115 million in tax incentives Michigan awarded in 2010, she said. Different Criteria Previously, the state would approve a project if the producers provided a script, a list of Michigan hires for the project, a budget and proof that financing wasn’t contingent on winning a tax break, she said. “Now we’re looking at different criteria,” she said. “Is the production financially viable and are they using Michigan infrastructure? How many Michigan people are they going to hire and is it something we can use to help promote Michigan?” Michigan didn’t have a problem with this film tax credit, Begnoche said. Instead, there was a desire to limit industry- specific tax breaks. “It wasn’t strictly a film-related issue,” she said. Vans Stevenson, senior vice president for government affairs at the Motion Picture Association of America in Washington, said the tax incentives create jobs. States that abandon the tax breaks risk losing business and jobs to neighboring states that have retained them, he said. “If you have a stable credit program that creates certainty and predictability, the productions are going to gravitate there,” he said. To contact the reporter on this story: Steven Sloan in Washington at [email protected] To contact the editor responsible for this story: Mark Silva at [email protected] |
Putin May Weaken Gazprom’s Natural-Gas Export Grip in Future.Russia “doesn’t exclude” allowing natural-gas producers other than OAO Gazprom, the state export monopoly, to ship the fuel abroad eventually after European Union investigations into possible antitrust violations. “European colleagues are pushing us to do so with unending searches at Gazprom’s companies,” Russian Prime Minister Vladimir Putin said, referring to raids by EU regulators last month on gas companies across the continent. Russia has no plans to end Gazprom’s legally enshrined hold on exports at present, Putin said at an investment conference today in Moscow. While such a move now might boost exports, it would also damp prices, he said. Gazprom gained a legal monopoly on exports in 2006 as the government sought to prevent domestic competition from undermining prices and oil producers raised output of the cleaner-burning fuel. Gazprom, the world’s biggest gas producer, has been trying to diversify away from Europe , where it supplies 25 percent of the market’s gas, with routes to Asia and the Pacific. “The biggest beneficiary of this would likely be Novatek, which seems already to be working on establishing a client base abroad,” Pavel Sorokin, an oil and gas analyst at Alfa Bank , said by phone from Moscow. “If Russia moves in the direction of liberalization, this might help Novatek gain market shares.” Yamal LNG Exports OAO Novatek, Russia’s second-largest gas producer, supplies natural gas only in the domestic market. It has gained support from the government and Gazprom for potential exports of liquefied natural gas from the Yamal LNG project with Total SA, which is slated to start in 2016. Novatek will pay Gazprom to ship the fuel abroad. Exxon Mobil Corp., which has the right to export gas under a production sharing agreement with the government, hasn’t yet developed supplies to China as initially planned, while Gazprom pushes the Irving, Texas-based explorer to sell gas from the Sakhalin-1 project for domestic use. OAO Rosneft could add as much as 10 billion barrels of oil equivalent in reserves if it had better access to gas pipelines and customers, Peter O’Brien , a former vice president at the state-controlled oil producer, said on Feb 2. To contact the reporters on this story: Scott Rose in Moscow at [email protected] ; Stephen Bierman in Moscow at [email protected] To contact the editors responsible for this story: Balazs Penz at [email protected] ; Will Kennedy at [email protected] |
LITE-ON SEMICOND September Sales Fall 13.98% (Table) : 5305 TT.LITE-ON SEMICOND said unconsolidated sales in September fell 13.98% to NT$638,919,000 from NT$742,736,000, according to a statement filed to the Taiwan Stock Exchange. (Figures are in thousands of New Taiwan dollars) ================================================================= 9/2011 9/2010 Sales 638,919 742,736 YOY% -13.98% -----------------Year-to-date----------------- Sales 5,552,265 7,134,215 YOY% -22.17% ================================================================= |
Euro Weaker Versus Dollar as Trichet Sees Growing Downside Risks.The euro stayed weaker against the dollar and the yen after European Central Bank President Jean- Claude Trichet said the economy is facing “intensified downside risks.” The 17-nation currency fell 0.4 percent to $1.3293 as of 1:47 p.m. in London , and dropped 0.5 percent to 102.03 yen. To contact the reporter on this story: Lucy Meakin in London at [email protected] To contact the editor responsible for this story: Daniel Tilles at [email protected] |
UN World Food Price Index Fell in September: Summary.Global food prices fell 2 percent in September from the previous month, according to the UN Food and Agriculture Organization based in Rome. From a year earlier food prices rose 16 percent. To contact the reporter on this story: Stephen Rose in Washington at [email protected] To contact the editor responsible for this story: Alex Tanzi at [email protected] |
Catalonia Sells Bonds to Citizens as Market Access Squeezed.Catalonia, Spain ’s largest and second-most indebted region, is preparing to sell as much as 4 billion euros ($5.4 billion) of bonds to its citizens as it remains shut out of public debt markets. Catalonia will sell 3 billion euros of the one- and two- year bonds, extendable to 4 billion euros, the region’s economy department said in an e-mailed statement today. It is the third issue of debt to retail investors and coincides with the redemption of the first so-called patriot bond issued last year. The one-year debt will have a coupon of 4.75 percent, rising to 5.25 percent for the two-year securities, and the banks will earn a commission of 2 percent to 2.2 percent. The issue will be lead by CaixaBank, CatalunyaCaixa and Banco de Sabadell SA. (SAB) The region, which has an economy the size of Portugal ’s, hasn’t sold bonds in public debt markets since March, according to data compiled by Bloomberg. The region is slashing spending and trying to sell assets including the Barcelona stock-market building to rein in its budget deficit , which was the fourth- largest in Spain last year. Spain’s regions, which control health and education, have racked up record amounts of debt during the crisis amid a slump in real-estate tax revenue, and together owe 133 billion euros, more than twice what they did in 2007, according to the Bank of Spain. The 17 states are falling behind on their bills, and the pharmaceutical lobby is in negotiations to securitize 5.4 billion euros of their unpaid drug bills, Farmaindustria Director General Humberto Arnes said on Oct. 4. Regional governments including Catalonia, which was downgraded by Fitch Ratings on Sept. 14, are also suffering from a surge in borrowing costs as Spain’s sovereign-debt costs rise. Spain pays around 5 percent to borrow for 10 years, putting the extra yield over equivalent German securities at 312 basis points, compared with an average of 15 basis points in the first decade of monetary union. To contact the reporter on this story: Emma Ross-Thomas in Madrid at [email protected] To contact the editor responsible for this story: Craig Stirling at [email protected] |
F&C Says CEO Grisay Retires, Bramson Made Executive Chairman.F&C Asset Management Plc (FCAM) , which oversees the U.K.’s oldest investment fund, said Chief Executive Officer Alain Grisay will step down in May. Chairman Edward Bramson becomes executive chairman and will gradually be assuming Grisay’s responsibilities, F&C said in a statement today. “Alain has been with F&C for over 10 years,” Bramson said in the statement. “During this time Alain has led F&C to an independent stock market listing, achieved the successful acquisition of Thames River and steered the company through the most tumultuous period of market upheaval for 60 years.” Bramson, 60, founder of activist shareholder Sherborne Investors LLC, gained investor support to oust Chairman Nick MacAndrew in February after criticizing the company’s levels of debt and recent acquisitions. At a meeting that month, Bramson said he planned to work with the company’s current management to formulate a new strategy. MacAndrew and F&C’s management, including Grisay, 57, had urged investors to reject Sherborne’s proposals, saying they would destabilize the business. Bramson said he’d like Grisay to stay in his post, the Times of London reported on Feb. 4, a day after he became chairman. “The announcement is not a big surprise in our view given the historical difference between the incumbent CEO and Sherborne,” wrote David McCann, an analyst at Numis Securities Ltd. in London who has a “hold” rating on the stock. “We continue to regard the stock as uninvestable” until a strategic review, scheduled for October, is announced, McCann wrote. The company in March posted a full-year net loss of 16.6 million pounds ($25.6 million) compared with a profit of 15.9 million pounds a year earlier as operating expenses and financing costs rose. To contact the reporter on this story: Howard Mustoe in London at [email protected]. To contact the editor responsible for this story: Edward Evans at [email protected] |
Cantor Decries ’Growing Mobs’ as Wall Street Protests Spread to Washington.The Occupy Wall Street protesters came to Washington, where they were compared favorably to the Tea Party by Vice President Joe Biden while House Majority Leader Eric Cantor called them “growing mobs” dividing the country. President Barack Obama also weighed in, expressing empathy with the demonstrators in the nation’s capital while stopping short of endorsing their movement. “The American people understand that not everybody’s been following the rules, that Wall Street is an example of that,” Obama said yesterday at a White House press conference. Occupy Wall Street began three weeks ago in Lower Manhattan and has spread to cities from Houston to San Francisco with the help of postings on Twitter and websites. Several thousand protesters set up camp yesterday in Washington’s Freedom Plaza, two blocks from the Treasury Department. They staged drumming circles, set up sign-making tents, held a mini-rock festival and spoke against Wall Street excesses. Then they marched past the White House, rallied outside the U.S. Chamber of Commerce and for a time blocked traffic along K Street, where some lobbying firms are located. Nationwide, the protesters have criticized the government for propping up major banks such as Citigroup Inc. (C) and Bank of America Corp. with a $700 billion taxpayer-funded bailout. They also called for more government aid to create jobs for the unemployed and voiced anti-war and anti-trade sentiment. ‘Growing Mobs’ Cantor, a Virginia Republican, discussed the marches today at a “Value Voters Summit” in Washington organized by the Family Research Council’s advocacy arm. “I, for one, am increasingly concerned about the growing mobs occupying Wall Street and the other cities across the country,” Cantor said. “Believe it or not, some in this town have actually condoned the pitting of Americans against Americans.” Republican presidential candidate Herman Cain told reporters in Houston yesterday that the Wall Street protesters are “trying to disrupt the whole country.” “This is an attempt by the left to create a distraction from the failed policies of this administration,” Cain said. The protests have “a lot in common with the Tea Party ,” Vice President Biden said yesterday. “What are the people up there on the other end of the political spectrum saying?” Biden said. “The same thing: ‘Look guys, the bargain is not on the level anymore.’ In the minds of the vast majority of the American -- the middle class is being screwed.” Fed’s Fisher Richard Fisher , president of the Federal Reserve Bank of Dallas told an audience in Fort Worth , Texas , yesterday, that he was “somewhat sympathetic” to the protests. “We have too many people out of work,” Fisher said. “We have very uneven distribution of income.” National union leaders based in Washington moved to embrace the protests as they reached the capital. Richard Trumka, president of the AFL-CIO, the largest U.S. labor federation, told reporters this week that the demonstrations were reminiscent of a union march on Wall Street last year. Speakers at a rally in Washington yesterday said their efforts were inspired by union-backed protests in Madison, Wisconsin , this year against Republican moves to curb union benefits. “Madison was our inspiration,” Gloria English, 51, a bartender and housecleaner from Owings, Maryland , said in an interview. “The country noticed.” Not all participants in the Washington march were ready to usher union leaders to the head of the protest parade. ’’This is much bigger than my union affiliation,’’ Lisa Oberg, a 32-year-old actor from Baltimore who joined in the Washington protests, said. “This is about the people. My union has nothing to do with why I’m here.” Cuomo’s View In New York, where the Occupy Wall Street protests continued yesterday, Democratic Governor Andrew Cuomo said, “A lot of people are feeling the pain, and when people are feeling the pain they look for an outlet, and that’s what I think you’re hearing from the protesters.” The causes run from opposition to the death penalty to income inequality, according to Cuomo, who defended Wall Street’s role in the New York economy. “Wall Street is a major economic engine for the state,” he said at a press conference. “When all is said and told, 20 to 25 percent of the state’s income comes from Wall Street.” New York City Police Commissioner Raymond Kelly told reporters yesterday that the protests have cost his city about $2 million in overtime so far. ‘Tax Wall Street’ In Sacramento , California , yesterday, about 100 demonstrators gathered in a small park downtown named after labor organizer Cesar Chavez. “Fight Back,” and “Heal America: Tax Wall Street” were among the signs held by demonstrators. “They are right, this is class warfare,” Nathan Appete, who said he was a 24-year-old nursing student from Fresno, said. “This is a war against the middle class by those big banks.” About 300 protesters participated in Austin, Texas. In Houston, Dustin Phipps, a 24-year-old premed student, was among the organizers of several hundred protesters who had met online. They gathered in a downtown park and walked four blocks to the JPMorgan Chase Tower. “They got bailed out; we got sold out,” was among the chants Phipps led over a red megaphone. ‘Get a Job’ Watching from across the street, Peggy Chilton, a 52-year- old oil industry accountant, said, “I came to mock them. They need to get a job. These are rich, white college students whose professors don’t like the Tea Party.” In San Francisco , police and city crews dismantled an encampment outside the Federal Reserve Bank’s building in the Financial District early yesterday that had been set up by Occupy SF protesters. “This department always facilitates the right to protest and engage in free speech,” San Francisco Police officer Albie Esparza said. “That wasn’t the problem. However you have to do that while being within the law, and it came down to violations of local ordinances and state laws.” To contact the reporter on this story: Holly Rosenkrantz in Washington at [email protected] To contact the editor responsible for this story: Larry Liebert at [email protected] |
Australian, New Zealand Currencies Strengthen, Erasing Earlier Declines.The Australian and New Zealand dollars strengthened, erasing earlier losses versus their U.S. counterpart. The so-called Aussie fetched 96.82 U.S. cents at 5:22 p.m. in Sydney from 96.59 cents yesterday in New York , after falling as low as 96.22 cents. The New Zealand dollar bought 76.68 U.S. cents from 76.62. It previously touched 76.25 cents. To contact the reporter on this story: Candice Zachariahs in Sydney at [email protected] To contact the editor responsible for this story: Benjamin Purvis at [email protected] |
Barker Says Pound Is ‘Critical’ to BOE Decision on More Stimulus.Former Bank of England policy maker Kate Barker said the pound’s performance in the coming months will be “quite critical” as the bank decides whether to further expand its bond-purchase program. The bank raised its target for bond purchases yesterday by 75 billion pounds ($116 billion) to 275 billion pounds to support Britain’s recovery amid the euro area’s debt crisis. Governor Mervyn King said the pound’s decline after the announcement “clearly shows the policy is working.” “What happens to sterling will depend on what happens in the euro area, the two things are linked,” Barker said in a phone interview yesterday. “If the euro area starts getting over its difficulties, potentially sterling could start to weaken a little bit, and that would be a different background” for policy makers when they take their next decision. Economists including Michael Saunders at Citigroup Inc. and Philip Rush at Nomura International Plc have said risks to Britain’s growth prospects from the turmoil in Europe make it likely policy makers will expand the bond plan in February. Barker said a recovery in Europe may weaken the pound while improving Britain’s export outlook. That could stoke inflation and growth, reducing the need for bond purchases to be expanded beyond yesterday’s announcement. The pound has fallen about 25 percent on a trade-weighted basis since the start of 2007 and a further decline could fuel import price pressures. Policy makers have said the slide has both supported Britain’s recovery by fueling demand for exports, and squeezed consumers by stoking faster inflation. The pound rose 0.5 percent against the dollar and traded at $1.5516 as of 10:03 a.m. in London. It rose against the euro, trading at 86.56 pence. “Though the bank has been pretty happy about seeing sterling a bit weaker, it’s not clear to me that weaker sterling would do a lot more for growth at this stage, whereas it might be difficult for inflation,” Barker said. To contact the reporter on this story: Jennifer Ryan in London at [email protected] To contact the editor responsible for this story: Craig Stirling at [email protected] |
Euro ‘Bullish Outside Day’ Before Slump: Technical Analysis.The euro’s rise above yesterday’s intraday high against the dollar may prove to be a “bullish- outside day” before the shared currency resumes a depreciating trend, according to Brown Brothers Harriman & Co. The 17-nation currency, which has dropped 6.6 percent since August, is poised to rally for three or four days if it closes above the high reached yesterday, said Marc Chandler , global head of currency strategy at Brown Brothers in New York. The euro strengthened today after the European Central Bank said it would reintroduce bank loans in an effort to buoy the region’s crisis-ridden economy. “Because we finished the third quarter with such an extended position, this is going to be the early fourth-quarter short-covering rally,” Chandler said in a telephone interview. “We took out yesterday’s lows and now we’re holding above yesterday’s highs. As long as we close above there, this is going to look like a key reversal.” The euro rose 0.6 percent to $1.3434 at 2:50 p.m. in New York , from $1.3348 yesterday, when it climbed to as high as $1.3384. The currency fell to as low as $1.3242, below yesterday’s intraday low of $1.3260. The currency has faltered this year as concern that a Greek default would lead to similar consequences in other struggling member nations curtailed investor appetite. The euro may appreciate to its 20-day moving average at $1.3566, Chandler said, before resuming its weakening trend. He forecasts the shared currency will end the year at $1.29. In technical analysis , investors and analysts study charts of trading patterns to forecast changes in a security, commodity, currency or index. Futures traders increased bets the euro would fall versus the dollar to net 82,473 contracts in the week ended Sept. 27, the most since June 2010, according to Commodity Futures Trading Commission data. To contact the reporter on this story: Catarina Saraiva in New York at [email protected] |
Turkey Consumer Loans for the Week Ending Sept. 30.Following is a summary of Turkey consumer loans excluding credit cards, from the Central Bank of Turkey in Ankara: SOURCE: Central Bank of Turkey To contact the reporter on this story: Ainhoa Goyeneche in Madrid at [email protected] To contact the editor responsible for this story: Marco Babic at [email protected] |
Economic Slowdown May Prompt Writedown Wave, Boersen Reports.European firms may face a wave of goodwill writedowns if the region’s economy slows markedly, Boersen Zeitung reported, citing a study by U.S. investment bank Houlihan Loukey. To contact the reporter on this story: Jeff Black in Frankfurt [email protected] To contact the editor responsible for this story: Craig Stirling at [email protected] |
Canadian Stocks Fall After Fitch Cuts Ratings on Italy, Spain.Canadian stocks fell, wiping out the week’s gain, as raw-materials and energy shares dropped after Fitch Ratings downgraded the government debt of Spain and Italy. Canadian Natural Resources Ltd. (CNQ) , Canada ’s second-largest energy company by market value, declined 4 percent as natural gas futures retreated. Goldcorp Inc. (G) , the world’s second-biggest gold producer by market value, lost 2.3 percent as precious metals slipped. Potash Corp. of Saskatchewan Inc., the world’s largest fertilizer producer by market value, decreased 4.1 percent after a Citigroup Inc. analyst said U.S. ethanol legislation may weaken grain prices. The Standard & Poor’s/TSX Composite Index fell 191.71 points, or 1.6 percent, to 11,588.36 at the close in Toronto for a weekly retreat of 0.3 percent. “In the last few days, the markets had a bit of an upside, but the cloud on Europe continues to be there,” Sadiq S. Adatia, chief investment officer at Sun Life Financial Inc.’s Sun Life Global Investments unit, said in a telephone interview. The unit oversees C$3.2 billion ($3.1 billion) for clients. “I don’t think anyone is holding stocks for the long term. They’re all worried about what’s going on in the economy.” The index jumped 5.4 percent during the previous two days, the most in a similar period since May 2009. Stocks rose from a 14-month low after the Institute for Supply Management ’s monthly index of the U.S. service industry fell less than most economists in a Bloomberg survey had forecast and investors speculated European officials will reach an agreement to aid the continent’s banks. Debt Downgrades Fitch reduced its ratings on Spain to AA- from AA+ and cut Italy to A+ from AA-. The agency cited the vulnerability of the countries to the European debt crisis. The S&P/TSX Energy Index retreated for the first time in four days as natural gas dropped to an 11-month low on speculation U.S. inventories will approach a record. Canadian Natural declined 4 percent to C$30.20. Encana Corp. (ECA) , the country’s largest natural gas producer, lost 4.6 percent to C$19.71. Oil-sands developer MEG Energy Corp. (MEG) decreased 6.6 percent to C$37.74 after jumping 16 percent in the previous two days. Gold and silver retreated as investors sold precious metals to cover losses in other assets, Adatia said. Goldcorp dropped 2.3 percent to C$48.12. Barrick Gold Corp. (ABX) , the world’s largest producer of the metal, lost 2.1 percent to C$48.44. San Gold Corp. (SGR) , which mines in Manitoba, slumped 8.6 percent to C$2.12 after reporting third-quarter production that trailed the estimate of Andrew Kaip, an analyst at Bank of Montreal. ‘Clear Negative’ Fertilizer producers fell after David Driscoll, an analyst at Citigroup, said bills in Congress to reduce ethanol requirements for gasoline represent “a continued assault on the ethanol industry and a clear negative.” Corn futures also fell on forecasts for warm, dry weather in the U.S. Midwest. Potash Corp. declined 4.1 percent to C$46.40 after surging 11 percent in the previous two days. Agrium Inc. (AGU) , a fertilizer producer and farm retailer, lost 3.5 percent to C$71.16. A gauge of base-metals and coal producers in the S&P/TSX retreated 4.6 percent after soaring 24 percent, the most since January 2009, in the previous three days. Teck Resources Ltd. (TCK/B) , Canada’s largest company in the industry, decreased 4.7 percent to C$33.65. Inmet Mining Corp. (IMN) , a copper and zinc producer, dropped 6.5 percent to C$49.21. Uranium One Inc. (UUU) , a mining company controlled by Moscow-based ARMZ Uranium Holding, lost 6.6 percent to C$2.11. Financials Retreat The S&P/TSX Financials Index declined. Royal Bank of Canada (RY) , the country’s largest lender by assets, slipped 1.4 percent to C$47.30. Bank of Nova Scotia, the country’s third- biggest bank, fell 1.4 percent to C$51.78. Manulife Financial Corp. (MFC) , North America ’s fourth-biggest insurer, retreated 2.9 percent to C$11.88. BlackBerry maker Research In Motion Ltd. (RIM) dropped 4.3 percent to C$24.30 after soaring 19 percent from a seven-year low in the previous four days. Microsoft Corp. is unlikely to buy RIM, as Microsoft is reluctant to acquire a hardware business and RIM’s chiefs would oppose a deal, Pierre Ferragu , an analyst at Sanford C. Bernstein & Co., said in a note to clients. To contact the reporter on this story: Matt Walcoff in Toronto at [email protected] To contact the editor responsible for this story: Nick Baker at [email protected] |
Freddie Mac to Redeem 2.65% Notes Due 2016.The following issue is being redeemed via the company's call option: Issuer: Freddie Mac Coupon: 2.65 percent Maturity: April 14, 2016 Redemption Amount: $100 million Redemption Price: 100 percent Amount Remaining: Fully Retired Security ID: 3134G2DA7 Effective Date: Oct. 14, 2011 |
IShares Gold Trust Holdings Unchanged on Oct. 5.Gold holdings in the IShares Gold Trust (IAU) were unchanged at 5,263,048 ounces as of Oct. 5, according to figures on the company’s website. Gold futures for December delivery rose $12.00, or 0.7 percent, to $1,664.50 an ounce on the Comex division of the New York Mercantile Exchange. To contact the reporter on this story: Daniel Petrie in Sydney at [email protected] To contact the editor responsible for this story: Alex Tanzi at [email protected] |