Search is not available for this dataset
Date
stringlengths 23
23
| Article_title
stringlengths 0
512
| Stock_symbol
stringlengths 0
6
| Url
stringlengths 0
1.89k
| Publisher
stringlengths 0
46
| Author
stringlengths 0
253
| Article
stringlengths 0
87.9k
| Lsa_summary
stringclasses 1
value | Luhn_summary
stringclasses 1
value | Textrank_summary
stringclasses 1
value | Lexrank_summary
stringclasses 1
value |
|---|---|---|---|---|---|---|---|---|---|---|
2011-04-19 00:00:00 UTC | South Africa Stocks: Astral, Anglo, Murray & Roberts, SABMiller Are Active | http://www.bloomberg.com/news/2011-04-19/south-africa-stocks-astral-anglo-murray-roberts-sabmiller-are-active.html
| B y S i k o n a t h i M a n t s h a n t s h a | The FTSE/JSE Africa All Share Index
snapped two days of losses, rallying 448.43, or 1.4 percent, to
31,837.06 at the 5 p.m. close of trading in Johannesburg. The following were among the most active stocks in the
South African market today. Anglo American Plc (AGL) , the diversified mining company
that makes up 11 percent of South Africa ’s benchmark stock
index, advanced the most since Feb. 11, rising 9.70 rand, or 2.9
percent, to 342.70 rand. Copper rose in London , rebounding from
the longest losing streak since June, as figures indicated
manufacturing remains robust in China , the world’s largest
consumer of the metal. BHP Billiton Plc (BIL) , the world’s
largest mining company, snapped two days of losses, jumping 3.09
rand, or 1.1 percent, to 276.25 rand. Astral Foods Ltd. (ARL) , South Africa’s second-largest
chicken producer, rose the most since April 7, gaining 96 cents,
or 0.8 percent, to 126.75 rand. Earnings may increase by as much
as 33 percent in the first half through March, it said in a
regulatory filing. Calgro M3 Holdings Ltd. (CGR) , a housing developer,
rallied to the highest level since April 12, gaining 2 cents, or
2.9 percent, to 70 cents. The developer has 5 billion rand
($733.2 million) of projects to be executed during the next six
to seven years, taking it outside of its traditional Gauteng
province market, it said in a regulatory filing today. Cipla Medpro South Africa Ltd. (CMP) , a generic drugs
manufacturer, rose the most since Feb. 14, jumping 19 cents, or
2.8 percent, to 6.98 rand. The company was rated “hold” in new
coverage, a price estimate of 7.11 rand by Avior Research. Freeworld Coatings Ltd. (FWD) , a South African paint
manufacturer, advanced the most since April 6, rising 30 cents,
or 2.6 percent, to 11.80 rand. South Africa’s Competition
Commission said it proposed Freeworld’s takeover by Kansai Paint
Co. be approved on condition the companies address antitrust
concerns arising from the transaction, according to a statement. Murray & Roberts Holdings Ltd. (MUR) , a construction
company, extended declines to the lowest level in a month,
dropping 20 cents, or 0.8 percent, to 25.08 rand. The company
may have transgressed South Africa’s antitrust laws and may face
antitrust fines, it said in a regulatory filing yesterday. Pick n Pay Stores Ltd. (PIK) , South Africa’s second-
largest grocer, dropped to the lowest since May 25, slipping
1.25 rand, or 3 percent, to 40.55 rand. Fitch Ratings cut its
outlook on the company’s credit rating to negative from stable
following a drop in annual earnings. Pick n Pay Holdings Ltd.
(PWK SJ), the company that controls Pick n Pay Stores, declined
the most since September 2009, falling 85 cents, or 4.8 percent,
to 17 rand. SABMiller Plc (SAB) , the world’s second-biggest brewer
by volume, climbed to the highest April 15, adding 4.29 rand, or
1.8 percent, to 246.80 rand. SABMiller’s fourth-quarter beer
sales rose 3 percent, it said in a regulatory filing today. That
beat a 1.5 percent median estimate by analysts polled by
Bloomberg. To contact the reporter on this story:
Sikonathi Mantshantsha in Johannesburg at
smantshantsh@bloomberg.net To contact the editor responsible for this story:
Gavin Serkin at
gserkin@bloomberg.net | ||||||
2011-04-19 00:00:00 UTC | Wimbledon Prize Money Growth Outpaces CPI Figure Since 1992: Table | http://www.bloomberg.com/news/2011-04-19/wimbledon-prize-money-growth-outpaces-cpi-figure-since-1992-table.html
| B y M a r k E v a n s | Following is a table of the prize money
offered at Wimbledon from 1968 to 2011 from the All England
Lawn Tennis Club in London: NOTE: All figures are in GBP. Percentage changes calculated by Bloomberg News. * = CPI/RPI figures for 2011 are the latest OBR forecasts. SOURCE: The All England Lawn Tennis Club To contact the reporter on this story:
Mark Evans in London at mevans8@bloomberg.net To contact the editor responsible for this story:
Marco Babic at mbabic@bloomberg.net | ||||||
2011-04-19 00:00:00 UTC | Nigeria, Namibia and Ghana Stocks Indexes Gain, Scangroup and Oceanic Move | http://www.bloomberg.com/news/2011-04-19/sub-sahara-africa-stocks-scangroup-continental-reinsurance.html
| B y C h r i s K a y | The Nigerian Stock Exchange All-
Share Index rose for the sixth day, gaining 0.3 percent to
25,384.10 by the 2:30 p.m. close in Lagos, according to a
statement on the bourse’s website, the longest winning streak
since Jan. 6. Namibia’s FTSE/ Namibia Overall Index (FTN098) gained for the first
day in three, adding 1.6 percent to 855.43 by the 4 p.m. close
in Windhoek , the most since March 30. The Ghana Stock Exchange
Composite Index advanced for a fourth day, rising 0.6 percent to
1,069.43 by the 3 p.m. close in Accra, the longest rally since
March 18. Kenya’s All-Share Index slipped for the first day in
three, losing 0.3 percent to 74.45 by the 3 p.m. close in
Nairobi. Mauritius’s SEMDEX Index dropped for the third day,
falling less than 0.1 percent to 2,042.61 by the 1:30 p.m. close
in Port Louis . The following shares rose or fell in sub-Saharan Africa ,
excluding South Africa . Stock symbols are in parentheses. Continental Reinsurance Plc (CONTINSU) , a Nigerian
insurer, rose for a second day, gaining 2 kobo, or 1.8 percent,
to 1.12 naira, the highest since Feb. 14, after it reported
profit rose 36 percent to 1.23 billion naira ($7.9 million) in
the year through December as revenue advanced. It plans to pay a
dividend of 7.5 kobo per share, according to a company statement
published on the Nigerian Stock Exchange’s website today. Oceanic Bank International Plc (OCEANIC) , a Nigerian
lender bailed out by the central bank in 2009, lost 10 kobo, or
the maximum 5 percent daily limit, to 1.90 naira, its biggest
daily decline since Nov. 23, after saying recapitalization talks
between it and First Bank of Nigeria Plc had ended. Scangroup Ltd. (SCAN KN), East Africa’s biggest marketing
company by sales, increased 4 shillings, or 7.7 percent, to 56
shillings, the biggest jump since Oct. 7. Full-year profit
surged 60 percent to 640.6 million shillings ($7.64 million) as
revenue surged on growth in advertising spending. Stanbic IBTC Bank Plc (IBTCCB) , a Nigerian lender, added
44 kobo, or 4.6 percent, to 10 naira, the highest since Feb. 10,
after saying it would pay a dividend of 39 kobo a share. To contact the reporter on this story:
Chris Kay in London at
ckay5@bloomberg.net To contact the editor responsible for this story:
Gavin Serkin at
gserkin@bloomberg.net | ||||||
2011-04-19 00:00:00 UTC | Geithner Says U.S. ‘Absolutely’ Will Keep AAA Rating | http://www.bloomberg.com/news/2011-04-19/geithner-says-u-s-absolutely-will-keep-aaa-rating-correct-.html
| B y R e b e c c a C h r i s t i e a n d A l e x K o w a l s k i | U.S. Treasury Secretary Timothy F.
Geithner said the U.S. will “absolutely” keep its AAA rating,
in a television interview today on Fox Business Network. To contact the editor responsible for this story:
Chris Wellisz at
cwellisz@bloomberg.net | ||||||
2011-04-19 00:00:00 UTC | Air Lease Surges as Rivals Watch Industry’s Biggest U.S. IPO | http://www.bloomberg.com/news/2011-04-19/air-lease-surges-after-raising-802-5-million-in-share-sale.html
| B y S u s a n n a R a y | Air Lease Corp., the jet-leasing
company led by Steven Udvar-Hazy, surged 5.5 percent on its
first day of trading after raising $802.5 million in the
industry’s largest initial public offering in the U.S. The Los Angeles-based company sold 30.3 million shares at
$26.50 each yesterday, after increasing the number 21 percent,
according to a prospectus filed today with the U.S. Securities
and Exchange Commission. It had offered 25 million shares at $25
to $28. Udvar-Hazy, 65, commanded a premium as he drew on four
decades of experience to recreate some of what he built at
American International Group Inc. (AIG) ’s International Lease Finance
Corp. Udvar-Hazy, who began leasing jets to airlines while in
college, has amassed a new fleet of 49 aircraft with orders for
153 more since founding Air Lease 14 months ago. The Air Lease price of 1.3 times book value “shows that
specific business models attached to strong management teams can
attract material amounts of equity capital,” Joe Gill , an
analyst at Bloxham Securities in Dublin, wrote in a note to
investors today. “New jets and a global customer base managed
by an experienced management team appears to be a compelling mix
for institutional investors.” First-Day Trading Air Lease rose $1.45, or 5.5 percent, to $27.95 at 4:15
p.m. in New York Stock Exchange trading, where it is listed
under the symbol AL. The company has a market value of $2.67
billion, higher than its three publicly traded competitors,
AerCap Holding NV, Fly Leasing Ltd. (FLY) and Aircastle Ltd. (AYR) “We’re very happy and think it’s a good outcome for the
whole airline industry and the aircraft lessors,” Udvar-Hazy
said in an interview today before flying to New York, where he
will ring the NYSE’s opening bell to start trading. “It establishes again the credibility of the leasing model
as an important facet of airlines’ fleet financing,” said
Udvar-Hazy, who is Air Lease’s chairman and chief executive
officer. Udvar-Hazy founded ILFC in 1973 and built it into the
world’s largest aircraft lessor before selling it to AIG in
1990, staying on as CEO. He left in February 2010 after an
unsuccessful attempt to buy back part of the unit amid its
parent’s financial troubles during the recession. Air Lease’s success “opens the market for other entities
to do an IPO that are thinking about it,” said Domhnal Slattery, CEO of Avolon Leasing Group, an Air Lease competitor. Avolon’s Outlook While Avolon has sufficient equity capital to continue
growing now, Slattery said he’ll consider an IPO “in due
course.” The Dublin-based company has raised $1.1 billion in
equity and $1.9 billion in debt since Slattery founded it in May
2010. His company has 25 Boeing Co. (BA) and Airbus SAS jets now, has
contractual commitments for 73 and plans to place another order
“in the not-too-distant future,” Slattery said. “We will have options now for sure, in terms of where we
go next” for funding, Slattery said in an interview today.
“The success of what Hazy has achieved today is hugely positive
for the broader aircraft-leasing sector.” As chairman and chief executive officer of Air Lease,
Udvar-Hazy has built a fleet that he says is unburdened by the
“legacy challenges” that saddle competitors. The company’s
jets have a weighted average age of 3.5 years, compared with 5.4
years for competitor AerCap’s 350 planes, 8.1 years for Fly
Leasing’s 59 and 11 years for Aircastle’s 136 aircraft,
according to company filings. Marketable Portfolio A portfolio under 5 years old is “the most marketable and
the most financeable,” Avolon’s Slattery said. Aircraft leasing is growing in popularity as airlines seek
flexibility within the cyclical air-travel industry as well as a
way to avoid burdening their balance sheets with the billions of
dollars required to fund plane purchases. In 1990, about 10 percent of the world’s commercial planes
were leased, and by 2015 that proportion will reach 35 percent,
according to estimates by industry-data providers Ascend and
Avitas cited by Air Lease. Lessors are expected to finance about $140 billion of the
$350 billion in capital requirements for about 5,000 new jets
due to be delivered worldwide by 2015, John Plueger , Air Lease’s
president, said in a presentation before the IPO. Still, the three aircraft lessors that went public in the
two years before the recession hit AerCap, Aircastle and Fly all are trading at least 38 percent below their $23 initial
share price. While Air Lease doesn’t plan to pay a dividend now, it may
consider it in the future, according to today’s filing.
Aircastle and Fly both pay dividends. JPMorgan Chase & Co., Credit Suisse AG, Barclays Plc, FBR
Capital Markets, RBC Capital Markets and Wells Fargo & Co . led
the Air Lease offering. The underwriters may exercise an overallotment option to
buy as many as 4.54 million additional shares, according to
today’s filing. To contact the reporter on this story:
Susanna Ray in Seattle at
sray7@bloomberg.net To contact the editor responsible for this story:
Ed Dufner at
edufner@bloomberg.net | ||||||
2011-04-19 00:00:00 UTC | Christchurch City Center Losing Bankers, Brokers After Quake | http://www.bloomberg.com/news/2011-04-19/christchurch-city-center-losing-bankers-brokers-after-quake.html
| B y T r a c y W i t h e r s | Bankers and brokers are moving out
of downtown Christchurch, six miles from the epicenter of New
Zealand’s deadliest earthquake in 80 years. Forsyth Barr Ltd. , the nation’s biggest trader of bonds for
retail investors, signed a six-year lease at Hazeldean, an
office park two miles southwest of the central business district
within days of the magnitude 6.3 earthquake on Feb. 22 which
killed more than 170 people, said Managing Director Neil Paviour-Smith. The Dunedin-based company was forced out of its
17-level office tower after its stairwells collapsed. “We’re not going back into the CBD for at least six
years,” said Paviour-Smith, who leads a firm of 250 people at
19 locations nationwide. “We’ll have a new fit-out and walking
away from that after six years is quite an expensive decision.” Many buildings in New Zealand ’s second-largest city
collapsed or were so damaged that they face demolition after the
quake struck southeast of the city at 12.51 p.m., when office
workers were lunching, shopping or at their desks. Prime
Minister John Key has said that rebuilding Christchurch is one
of the government’s highest priorities, with an expected price
tag of NZ$15 billion ($12 billion). Christchurch office rents are rising as tenants that were
in older buildings are forced to pay higher rates for new
premises, according to Harry Van Tongeren, managing director of
real estate broker Bayleys Canterbury Commercial . Prior
incentives to attract new tenants, such as rent-free periods,
have disappeared, he said. Staying Central Some businesses still see their future in the city center.
Accounting firm Deloitte LLP, which may be out of its building
for 12 months or longer and has 100 staff working from a cluster
of small buildings, wants to be involved in the rebuild, said
Steve Wakefield, managing partner of the Christchurch office. “We bought ourselves time to figure out where we might
go,” he said in an interview. “We don’t agree with those who
have signed a long lease in the hinterland.” Hazeldean, an office precinct just outside the four avenues
that define the center of Christchurch, has 12,000 square meters
of space now fully leased and has land for three more offices
covering the same area, said Kevin Arthur, development manager
of Calder Stewart, a South Island construction company that
built the office park Forsyth Barr selected. Foundations for the
first new building are finished and there are “advanced
discussions” with prospective tenants, he said. ‘Cold Hard Look’ “They’re having a cold hard look at whether they need to
be in the CBD,” said Arthur. “Those that have concluded they
don’t are certainly talking seriously.” Hazeldean is being built on a former factory site and began
leasing last year, attracting tenants including the local unit
of Canon Inc. in September. The offices are no more than five
levels and the site features a cafe and a car-park building. Developers like Calder Stewart and Goodman Property Trust (GMT)
are attracting companies with low-rise buildings as workers and
clients are spooked by the damage to the city’s towers. “The days of a 15-story building are probably gone for a
while because people don’t have the confidence to go into
them,” said Arthur. “It is an emotional response but potential
tenants have expressed a desire not to be in buildings more than
4-5 levels high.” Doomed Buildings Civil Defense officials have listed 215 city buildings that
need demolition as at April 8, with another 65 needing to be
partially cleared and 20 needing to be made safe. The quake
death toll is the most since 256 people died after a temblor
struck the North Island city of Napier in 1931. Christchurch International Airport Ltd., on the western
side of the city, is developing a temporary office park on some
of its spare land. The buildings will be carpeted with kitchens
and bathrooms, and offered for leases of up to three years,
Blair Forgie, general manager of property, said in an interview.
Construction of the first 1,000 square meters of space should be
completed by late June, and there is interest for another 5,000
square meters, he said. Temporary solutions will allow firms time to assess where
new business “hubs” may emerge and what new office
developments will be available outside the city center, said
Frank Aldridge, managing director of Craigs Investment Partners . “It’s more likely we’ll go into one of the new
developments,” he said after the nation’s biggest brokerage had
to abandon its Christchurch office. “The team would prefer one
of those sites. It’s unlikely we’ll go back into the CBD.” To contact the reporter on this story:
Tracy Withers in Wellington at
twithers@bloomberg.net . To contact the editor responsible for this story:
Iain Wilson iwilson2@bloomberg.net | ||||||
2011-04-19 00:00:00 UTC | U.S. Stocks Erase Gains as Harley-Davidson, Goldman Sachs Shares Decline | http://www.bloomberg.com/news/2011-04-19/u-s-stocks-erase-gains-as-harley-davidson-goldman-sachs-shares-decline.html
| B y M i c h a e l P . R e g a n | U.S. stocks erased an early advance
as Harley-Davidson Inc. led consumer shares lower after earnings
trailed analysts’ estimates and Goldman Sachs Group Inc. slumped
as an analyst cut his rating on the shares. The Standard & Poor’s 500 Index slipped less than 0.1
percent to 1,304.57 at 11:25 a.m. in New York . The Dow Jones
Industrial Average climbed 4.28 points, or less than 0.1
percent, to 12,205.87 after rallying as much as 48 points
earlier. Earlier gains came after housing starts increased and
earnings beat estimates at companies from Johnson & Johnson to
Zions Bancorp. To contact the editor responsible for this story:
Michael Regan at
mregan12@bloomberg.net | ||||||
2011-04-19 00:00:00 UTC | Allied, Freeworld, PBT, Pick n Pay May Move: South African Stocks Preview | http://www.bloomberg.com/news/2011-04-19/allied-freeworld-pbt-pick-n-pay-may-move-south-african-stocks-preview.html
| B y S i k o n a t h i M a n t s h a n t s h a | The following stocks may rise or
fall in South Africa . Symbols are in parenthesis and prices are
from the last close. The FTSE/JSE Africa All Share Index snapped two days of
losses, rallying 448.43, or 1.4 percent, to 31,837.06 at the 5
p.m. close of trading in Johannesburg. Allied Technologies Ltd. (ALT) : The maker of television
set-top boxes announced the appointment of Jeffrey Hedberg as
chief operating officer. The stock rose 6 cents, or 0.1 percent,
to 55.21 rand. Freeworld Coatings Ltd. (FWD) : Japan’s Kansai Paint Co.
has brought the implementation date for its takeover of the
South African paint manufacturer to today, instead of May 9,
according to a regulatory statement late yesterday. Freeworld
rose 30 cents, or 2.6 percent, to 11.80 rand. PBT Group Ltd. (PBT) : A provider of information
management services reported 12.8 million ($1.8 million) in
earnings in the first-half through February. PBT declined 6
cents, or 4.6 percent, to 1.26 rand. Pick n Pay Stores Ltd. (PIK) : South Africa’s second-
largest grocer was downgraded to a “hold” by Afrifocus
Securities analyst Kathryn Robinson, from a “buy”
recommendation in January. Citigroup Inc. equities analyst
Zaheer Joosub lowered his price estimate on the stock to 49
rand, from 54 rand while maintaining a “buy” recommendation.
Pick n Pay dropped 1.25 rand , or 3 percent, to 40.55 rand. To contact the reporter on this story:
Sikonathi Mantshantsha in Johannesburg at
smantshantsh@bloomberg.net To contact the editor responsible for this story:
Gavin Serkin at
gserkin@bloomberg.net | ||||||
2011-04-19 00:00:00 UTC | Housing Starts in U.S. Increased to 549,000 in March, Exceeding Forecasts | http://www.bloomberg.com/news/2011-04-19/housing-starts-in-u-s-climbed-less-than-forecast-in-march-to-549-000-pace.html
| B y B o b W i l l i s | A gain in March housing starts
failed to make up for ground lost the prior month, as U.S. home
builders continue to struggle almost two years into the economic
recovery. Work began on 549,000 houses at an annual pace, up 7.2
percent from the prior month and exceeding the 520,000 median
forecast of economists surveyed by Bloomberg News, figures from
the Commerce Department showed today in Washington . Starts fell
19 percent in February to the lowest level in almost two years. Housing, which pushed the economy into the recession,
remains the weak link in the recovery and continues to weigh on
consumer spending as home prices fall. The prospect of more
foreclosures and joblessness forecast to average 8.7 percent
this year means any recovery in housing may take time to
develop. “We remain at very low levels,” said Richard DeKaser , an
economist at Parthenon Group in Boston , who correctly forecast
last month’s increase. “The best description is bumping along
the bottom. The underlying trend is one of stability or modest
improvement since we hit our low point a couple of years ago.” Stocks rose as earnings at companies from Johnson & Johnson
to Steel Dynamics Inc. beat estimates. The Standard & Poor’s 500
Index climbed 0.6 percent to 1,312.6 at the 4 p.m. close in New
York . Housing starts estimates ranged from 475,000 to 620,000 in
the Bloomberg News survey of 77 economists. February Revision The Commerce Department revised February’s total to a
512,000 pace, up from a previously estimated 479,000. It was
still the lowest since a 477,000 pace in April 2009 that was the
weakest on record. The revisions plus an increase in construction applications
made the figures look less dire. Building permits, a proxy for
future construction, rose 11 percent to a 594,000 pace. They
were projected to rise 1.1 percent to a 540,000 annual pace. Construction of single-family houses increased 7.7 percent
to a 422,000 rate in March from the prior month. Work on
multifamily homes, such as townhouses and apartments, increased
5.8 percent to an annual rate of 127,000. Starts climbed in three of four regions, led by a 32
percent jump in the Midwest. They fell 3.3 percent in the South. Confidence among U.S. homebuilders fell in April, led by a
decline in the outlook for sales. The National Association of
Home Builders/Wells Fargo sentiment index declined to 16 this
month from 17 in March, data from the Washington-based group
showed yesterday. A measure of sales expectations for the next
six months dropped to the lowest level since October. Home Sales New-home sales fell to a record-low annual rate of 250,000
in February, the Commerce Department reported on March 23. The
median price dropped to the lowest level since December 2003. Sales of existing homes, which make up more than 90 percent
of the market, rose 2.5 percent to a 5 million annual pace in
March, economists surveyed by Bloomberg forecast the National
Association of Realtors may report tomorrow. Existing home sales
have been gaining market share from new homes due to increased
cash purchases of distressed homes. Lending rates are rising as the broader economy recovers.
The average rate on a 30-year fixed loan increased to 4.98
percent the week ended April 8, the highest since Feb. 18,
according to the Mortgage Bankers Association . Borrowing costs
have climbed since reaching 4.21 percent in October, the lowest
since the group’s records began in 1990. More Foreclosures Even with home seizures currently delayed as banks and
state attorneys general struggle to agree on new guidelines,
foreclosure filings will climb about 20 percent in 2011,
reaching a peak for the housing crisis, RealtyTrac Inc. said
Jan. 13. CoreLogic Inc. last month estimated about 1.8 million homes
were delinquent or in foreclosure, a so-called “shadow
inventory” set to add to the 3.5 million existing homes already
on the market. “Activity in the housing market continued to be depressed,
held down by the large inventory of foreclosed or distressed
properties on the market and by weak demand,” Federal Reserve
policy makers said in minutes of their March 15 policy meeting
released April 5. Homebuilders aren’t optimistic. KB Home (KBH) , the Los Angeles-
based homebuilder that targets first-time buyers, this month
reported a bigger-than-expected loss for the quarter ended Feb.
28 as orders plunged. “Today’s consumers remain very cautious, whether they have
concerns about home prices falling further, their job status,
their ability to qualify for a loan, or general confidence in
the economy,” President and Chief Executive Officer Jeffrey Mezger said during a conference call with analysts on April 5.
“A sustained, broad-based housing recovery will not occur until
we start to experience material job creation.” To contact the reporter on this story:
Bob Willis in Washington at
bwillis@bloomberg.net To contact the editor responsible for this story:
Christopher Wellisz at cwellisz@bloomberg.net | ||||||
2011-04-19 00:00:00 UTC | Foreign Investors Sell Net 7.91 Billion Rupees of Indian Stocks | http://www.bloomberg.com/news/2011-04-19/foreign-investors-sell-net-7-91-billion-rupees-of-indian-stocks.html
| B y P a r e s h J a t a k i a | Overseas investors sold a net 7.91
billion rupees ($178.6 million) of Indian stocks yesterday,
paring their investments in equity this year to 37.3 billion
rupees, the nation’s market regulator said. Foreigners purchased 25.5 billion rupees of shares and sold
33.4 billion rupees, the Securities and Exchange Board of India
said today . They bought a net 3.37 billion rupees of bonds,
taking total purchases in debt this year to 124.5 billion
rupees. Overseas funds returned in March, after withdrawing 94
billion rupees in January and February on concern accelerating
inflation will prompt further interest rate gains. They bought a
record 1.33 trillion rupees of shares in 2010, helping fuel a 17
percent rally in the Bombay Stock Exchange’s Sensitive Index,
the best performer among the world’s 10 biggest equity markets
last year. The Sensex has fallen about 7 percent this year. The previous record was in 2009 when flows reached 834.2
billion rupees, sparking the biggest advance in 18 years. Funds
withdrew a record 530 billion rupees from stocks in 2008,
setting off the worst annual slump. Foreign funds have placed
4.51 trillion rupees in equities and 911.2 billion rupees in
bonds since they were allowed into the country in 1993. The regulator provides data on shares bought and sold by
large investors, including trades in the primary and secondary
markets, with a delay of at least a day. To contact the reporter on this story:
Paresh Jatakia in Mumbai at
pareshj@bloomberg.net To contact the editor responsible for this story:
Arijit Ghosh at
aghosh@bloomberg.net | ||||||
2011-04-19 00:00:00 UTC | ABFL and TMFL CP's Issued:India | http://www.bloomberg.com/news/2011-04-19/abfl-and-tmfl-cp-s-issued-india.html
| B y S h r a d d h a K o t h a r i | Following is a table showing commercial paper
reported by Companies.The data has been provided by Mata Securities India Pvt
Ltd,SPA Securities Ltd. Trust Financial Consultancy Services and NVS Brokerage
Ltd.
Generated by Bloomberg Publisher WEB Service Provider ID: 1e9c1b6b323d47f19ddfa12209fb66c4 -0- Apr/19/2011 13:13 GMT | ||||||
2011-04-19 00:00:00 UTC | Hong Kong Office Rents, World’s Highest, Jump to Twice London’s; Tokyo 3rd | http://www.bloomberg.com/news/2011-04-19/hong-kong-office-rents-jump-to-almost-twice-london-s-level-colliers-says.html
| B y N i c h o l a S a m i n a t h e r | Hong Kong ’s prime office rents, the
world’s highest, jumped more than a third in 2010 with tenants
paying almost double the cost in the City of London , according
to Colliers International Research . Prime office buildings in Hong Kong fetched $2,066.35 per
square meter (11 square feet) as of Dec. 31, 2010, compared with
$1,523.31 a year ago, Colliers said in its Global Office Real
Estate Review. London’s West End was the second-most expensive,
costing $1,431.82 a square meter, while the City of London was
fifth at $1,073.92 a square meter. Tokyo and Paris were in third
and fourth place, at $1,130.21 and $1,099.53 respectively. All of the top 20 cities tracked by Colliers recorded
higher office rents in the second half. Office construction is
highest in the Asia-Pacific region, accounting for 42 percent of
global building, driven by growth in demand, particularly in
China , India , Indonesia and the Philippines , Colliers said. “Most regions showed further signs that the worst of the
global financial crisis had passed and tenants were back in the
market with a renewed appetite for office space,” Ross J.
Moore, chief economist of Colliers’ U.S. division, wrote in the
report. “The outlook for 2011 is for continued growth, but the
recent surge in energy prices and the geopolitical tensions in
the Middle East and North Africa are reasons for concern.” Crude oil has jumped 30 percent in the past six months as
months of conflict in the Middle East, and ongoing tensions in
Libya, raised concerns about a possible shortage. Derailing the Recovery Higher oil prices “could derail what appears to be a
reasonably strong recovery,” Moore said. “However, because of
the usual lags, any future deceleration won’t be apparent until
the second half of the year.” While limited building in the U.S. and a pick-up in leasing
activity pulled vacancies down 30 basis points to 16.1 percent
as of Dec. 31, existing excess supply in many markets continued
to push rents down, Colliers said. Construction in Europe , Middle East and Africa was down at
the end of the year, partly due to big declines in Dubai and Abu
Dhabi , which saw their combined development pipeline falling by
25.8 million square feet, according to the report. Riyadh had the highest vacancy rate, at 40 percent,
followed by Dubai at 35 percent. Canada’s Regina had the lowest
at 1.3 percent, followed by Rio de Janeiro at 1.6 percent. Hong
Kong’s vacancy rate of 3.1 percent is the fifth-lowest among the
cities tracked by Colliers. The biggest shortage of prime office space in Central
London since at least 1980 will cause rents to jump in the next
two years, with the West End seeing a jump to 100 pounds a
square foot, London-based property broker Capita Symonds Ltd.
said on April 1. Sales London recorded the most sales in 2010, at $15.3 billion,
followed by Tokyo at $11.7 billion and New York at $8.5 billion. Office prices rose in the Americas, with yields falling by
131 basis points. In the European region, yields remained little
changed, while in the Asia Pacific, property yields climbed 31
basis points, according to the report. A basis point is 0.01
percentage point. “A more robust global economy combined with improved
financial markets is clearly boosting both transaction volume
and also pricing,” Moore said. “While access to debt is still
a challenge in certain markets, and much uncertainty remains as
to the sustainability of the economic expansion, real estate
markets around the world appear to be shaking off the
difficulties created by the global financial crisis and are once
again on the buy list of investors.” To contact the reporter on this story:
Nichola Saminather in Sydney at
nsaminather1@bloomberg.net To contact the editor responsible for this story:
Andreea Papuc at
apapuc1@bloomberg.net | ||||||
2011-04-19 00:00:00 UTC | Wynn Resorts First-Quarter Profit Beats Analysts’ Estimates | http://www.bloomberg.com/news/2011-04-19/wynn-resorts-first-quarter-profit-beats-analysts-estimates-shares-climb.html
| B y B e t h J i n k s | Wynn Resorts Ltd. (WYNN) , owner of the
Wynn and Encore casinos, reported first-quarter profit rose
sixfold, beating analysts’ estimates as a second Macau resort
and better-than-expected winnings in Las Vegas lifted results. Net income climbed to $173.8 million, or $1.39 a share,
from $27 million, or 22 cents, a year ago, Las Vegas-based Wynn
said today in a statement. Profit excluding some items topped
the 73-cent average of 22 analysts’ estimates. Macau is booming while Wynn bucked an inconsistent recovery
its Las Vegas home market. The company opened Encore Macau in
April 2010, doubling its presence in the world’s biggest
gambling market, where casino betting surged 58 percent last
year and 43 percent in the first quarter. The 30 percent win
rate at tables in Vegas in the quarter surpassed the expected
range of 21 percent to 24 percent. “Business in Las Vegas has improved,” founder and Chief
Executive Officer Steve Wynn said today on a conference call.
“From time to time the casino gets a little lucky, and that was
the case this year during Chinese New Year in Las Vegas.” First-quarter cash flow , measured as adjusted property
earnings before interest, taxes, depreciation and amortization,
climbed 67 percent to $405 million, beating the $309.7 million
analysts estimated. Macau Ebitda climbed to $272.8 million and
Las Vegas, the biggest U.S. casino city, more than doubled to
$132.1 million. Wynn Resorts rose 2.7 percent to $142.75 in extended
trading. The shares fell $1.57 to $138.93 at 4 p.m. New York
time in Nasdaq Stock Market trading. Wynn Macau Ltd. fell 35
Hong Kong cents to HK$27.05 earlier in Asia . Wynn listed part of
the Macau unit in October 2009. Macau Results Revenue surged 47 percent in Macau and 24 percent in Las
Vegas, boosting total sales 39 percent to $1.26 billion and
beating the $1.16 billion analysts projected in a Bloomberg
survey. Wynn is ready to begin building a third Macau resort in the
Cotai area, and expects government permission to start
construction “any day now,” CEO Wynn said today. Gambling in the Chinese territory has surged since the
government ended Stanley Ho ’s 40-year monopoly and let other
companies, including Wynn, Las Vegas Sands Corp. (LVS) and MGM Resorts
International (MGM) , build resorts that attract mainlanders. Las Vegas Strip gambling revenue has declined for four
straight months, according to data from the Nevada Gaming
Commission. Visitor volume rose 4.8 percent in the first two
months of 2011, led by an 11 percent increase in convention
attendance, which has increased room rates and occupancy. Wynn said its Las Vegas average daily room rate rose 18
percent in the first quarter, with occupancy down 1.5 percentage
points to 87.9 percent. Wynn Resorts today announced a dividend of 50 cents, double
the sum declared in July and payable May 17 to shareholders of
record May 3. To contact the reporter on this story:
Beth Jinks in New York at
bjinks1@bloomberg.net To contact the editor responsible for this story:
Anthony Palazzo at
apalazzo@bloomberg.net | ||||||
2011-04-19 00:00:00 UTC | Saab Automobile Aims to Resume Vehicle Production Next Week | http://www.bloomberg.com/news/2011-04-19/saab-automobile-aims-to-resume-vehicle-production-next-week.html
| B y T i m H i g g i n s | Saab Automobile, the carmaker that
was forced to halt vehicle assembly amid a payment dispute with
suppliers, said it hopes to resume production next week. “Probably next week, that’s what we’re aiming for,”
Matthias Seidl, vice president of global sales at Saab, said
today in an interview in New York . The Swedish government approved a finance plan, with
conditions, for the Trollhaettan, Sweden-based automaker last
week, freeing up collateral used by Saab to back a loan from the
European Investment Bank . Saab first suspended manufacturing on March 29 after
component makers stopped deliveries and demanded payment. Saab
Chief Executive Officer Jan-Aake Jonsson said April 4 that the
carmaker’s liquidity “became more strained” during the second
half of the first quarter. The finance plan still needs to be cleared by the European
Investment Bank and faces certain conditions, Maud Olofsson,
Sweden’s industry minister, said last week. If approved, it
would give Saab some breathing space while it awaits a
government decision on whether it can bring in Russian banker
Vladimir Antonov as an investor. Saab is talking with its suppliers and hopes to resume
receiving parts by the end of the week, said Seidl, who is
serving as the interim chief operating officer of Saab’s North
America operations. Saab Automobile is owned by Zeewolde, Netherlands-based
Spyker Cars NV. (SPYKR) To contact the reporter on this story:
Tim Higgins in New York City at thiggins21@bloomberg.net To contact the editor responsible for this story:
Jamie Butters at jbutters@bloomberg.net | ||||||
2011-04-19 00:00:00 UTC | Juniper’s First-Quarter Profit Meets Analysts’ Estimates | http://www.bloomberg.com/news/2011-04-19/juniper-second-quarter-profit-forecast-misses-estimates-1-.html
| B y J o s e p h G a l a n t e | Juniper Networks Inc. (JNPR) , the second-
largest maker of Internet networking equipment, reported first-
quarter profit that matched analysts’ estimates, a sign that
carriers are still spending to support surging Web use. Revenue rose 21 percent to $1.1 billion from $912.6 million
in the year-earlier quarter, the Sunnyvale, California-based
company said today in a statement. Profit excluding some items
was 32 cents a share, matching analysts’ estimates. Juniper is benefiting from Internet and telecommunications
service providers buying network gear to handle the flood of
data on smartphones and on computers running bandwidth-hungry
videos. Concern that spending from one of Juniper’s biggest
customers, AT&T Inc. (T) , might decline did not materialize, said
Joanna Makris, an analyst at Mizuho Securities USA in New York . “There’s nothing to be concerned about here,” said
Makris, an analyst at Mizuho Securities USA in New York. “There
was a concern about AT&T and Verizon cutting back on spending.
Nothing has changed in terms of their competitive strategy.” Revenue in the current quarter will be $1.13 billion to
$1.18 billion, Juniper said in the statement. Profit excluding
some items will be as much as 34 cents a share. Analysts
surveyed by Bloomberg expected $1.16 billion in sales and 36
cents a share of profit. Juniper rose $1.18, or 3.1 percent, in late trading on the
York Stock Exchange composite trading after closing up 21 cents
to $38.47 at 4 p.m. The stock has climbed 23 percent in the last
12 months. Second-Quarter Forecast Juniper forecast second-quarter profit of 31 cents to 34
cents a share, missing the 36 cents estimated by analysts
surveyed by Bloomberg. Since joining Juniper in 2008, Chief Executive Officer
Kevin Johnson has expanded the company’s capabilities by
introducing security and data-center products and going after
larger rival Cisco Systems Inc. (CSCO) Juniper gets most of its revenue from service providers
that buy routers to direct the flow of cell-phone text messages,
voice and data over their networks. The company is now pursuing
growth by going after the large businesses that have
traditionally bought switches from Cisco to manage data centers. The company is continuing to “play offense” as it tries
to gain ground on competitors, Johnson said in an interview. “Our performance in the first quarter is consistent with
our long-term financial goals,” Johnson said. “We’re on target
to meet or exceed those goals.” New Gear Juniper introduced the first product in a new family of
data-center gear in February, heightening its rivalry with San
Jose , California-based Cisco. The company poured more than $100
million into the QFabric suite of products it spent three years
developing. Companies buy Juniper’s switches for their networks, while
phone and Internet-service providers such as Verizon
Communications Inc. (VZ) and AT&T typically purchase its more
expensive routers. About 70 percent of Juniper’s business is
from carriers, according to Sandeep Shyamsukha, an analyst at
Auriga USA LLC in San Francisco. At the same time, Juniper faces a slower pace of corporate
spending on technology than in 2010 and steeper competition from
networking companies in China , including ZTE Corp. (000063) and Huawei
Technologies Co., and Paris-based Alcatel-Lucent SA. To contact the reporter on this story:
Joseph Galante in San Francisco at
jgalante3@bloomberg.net To contact the editor responsible for this story:
Tom Giles at tgiles5@bloomberg.net | ||||||
2011-04-19 00:00:00 UTC | Murray & Roberts Drops to Lowest in Month on Antitrust Breaches | http://www.bloomberg.com/news/2011-04-19/murray-roberts-drops-to-lowest-in-month-on-antitrust-breaches.html
| B y S i k o n a t h i M a n t s h a n t s h a | Murray & Roberts Holdings Ltd. (MUR) , a
construction company, extended declines to the lowest intraday
level in a month after saying it may have transgressed South
Africa ’s antitrust laws. The shares slipped 44 cents, or 1.7 percent to 24.84 rand
at 9:29 a.m. in Johannesburg. That is the lowest level since
March 17 and follows yesterday’s 4.4 percent loss. Murray & Roberts identified a “relatively small number”
of projects in which its executives transgressed the Competition
Act, necessitating an application for leniency with the
Competition Commission of South Africa, the company said
yesterday in a regulatory statement. The commission may levy fines equivalent to a maximum 10
percent of the revenue in the offending business unit. To contact the reporter on this story:
Sikonathi Mantshantsha in Johannesburg at
smantshantsh@bloomberg.net To contact the editor responsible for this story:
Gavin Serkin at
gserkin@bloomberg.net | ||||||
2011-04-19 00:00:00 UTC | State Street Operating Income Rises With Markets to $439 Million | http://www.bloomberg.com/news/2011-04-19/state-street-operating-income-advances-19-amid-market-rally-acquisitions.html
| B y C h r i s t o p h e r C o n d o n | State Street Corp. (STT) , the third-
largest custody bank, said first-quarter net income on an
operating basis climbed 19 percent, as rising markets and
acquisitions increased the assets it oversees for clients. Profit rose to $439 million, or 88 cents a share, from $369
million, or 75 cents, a year earlier, the Boston-based company
said today in statement. Operating profit beat the 86-cent
average estimate of 22 analysts surveyed by Bloomberg. “The main driver is the rebound in the markets,” Marty Mosby , a Nashville, Tennessee-based analyst for Guggenheim
Securities LLC, said in an interview before results were
announced. “Markets activity is rising to more normal levels
and valuations are moving higher.” The average value of the Standard & Poor’s 500 Index in the
three months ended March 31 rose 16 percent from the first
quarter of 2010. Revenue increased 2.8 percent to $2.36 billion. State Street raised its quarterly dividend to 18 cents a
share on March 18 and said it would buy back as much as $675
million in common stock this year, a step toward restoring the
way it used free cash flow before the financial crisis. The
company slashed its dividend from 24 cents a share to 1 cent on
Feb. 5, 2009, in an effort to preserve capital as client assets
shrank and its own investments plunged in value. Stock Performance Results were announced before the start of regular U.S.
trading. State Street has declined 3.6 percent this year. The
Standard & Poor’s 17-member index of asset managers and custody
banks was little changed. Bank of New York Mellon Corp. and JPMorgan Chase & Co.,
both based in New York, are the two biggest custody banks. Custody banks keep records, track performance and lend
securities for institutional investors including mutual funds,
pension funds and hedge funds . State Street also manages
investments for individuals and institutions. (State Street is scheduled to hold a conference call for
investors at 9:00 a.m. New York time. The call can be accessed
at http://www.statestreet.com/stockholder and by telephone at
1-706-679-5594 or +1-888-391-4233 (Conference ID # 36962726).) To contact the reporter on this story:
Christopher Condon in Boston at
ccondon4@bloomberg.net To contact the editor responsible for this story:
Christian Baumgaertel at
cbaumgaertel@bloomberg.net | ||||||
2011-04-19 00:00:00 UTC | Rodent Droppings ‘Too Numerous to Count’ Found on Delta Jet | http://www.bloomberg.com/news/2011-04-19/fda-discovers-rodent-excrement-during-delta-jet-inspection-1-.html
| B y M a r y J a n e C r e d e u r | Rodent droppings “too numerous to
count” were found by U.S. health inspectors near a Delta Air
Lines Inc. (DAL) jet’s galley where food and drink are stored. The excrement and mammalian urine turned up in inspections
from Jan. 26 through Feb. 2 at a Delta hangar at its Atlanta
headquarters, the Food and Drug Administration said in an April
13 letter to the airline. Delta said today the plane was cleaned
and returned to service within days. Mechanical traps probably would be preferable to chemicals
in trying to end a rodent infestation on a plane, said Chad
Artimovich, who is the president of pest-control company Atlanta
Wildlife Solutions LLC and has exterminated rats in recreational
vehicles, mobile homes and a hot tub. “You don’t want to use poison because then you have to go
through the process of tracking it down and finding it and maybe
tearing the whole airplane apart,” Artimovich said in an
interview. “A dead rat stinks to high heaven.” Delta took the rodent case “very seriously” and resolved
the issue by temporarily parking the jet and “humanely catching
the animal,” said Ashley Black, a spokeswoman for the Atlanta-
based carrier. International Plane Black declined to specify the type of plane involved, other
than that it was used on international flights. It was returned
to service within days after the rodent’s removal, she said. “We believe this was an isolated incident and we
cooperated with the FDA immediately to resolve it earlier this
year,” Black said. “The health and safety of Delta’s customers
and employees are Delta’s top priority.” The FDA said rodent excrement was discovered above the
right and left forward galleys and mammalian urine was detected
in six areas on ceiling panels over a galley. Delta’s response
to the agency didn’t include steps to prevent a recurrence,
which is “likely” unless such measures are taken, the FDA
said. Federal regulations for transportation companies require
that “all places where food is prepared, served, or stored
shall be constructed and maintained as to be clean and free from
flies, rodents and other vermin,” the FDA said. The animal most likely to be involved in an airplane
infestation is a roof rat, a species prevalent in Atlanta,
Artimovich said. Those rodents leave as many as 50 droppings a day, and a
jetliner provides “everything a rat needs” with spilled nuts
and pretzel crumbs and sources of water, he said. “Once it gets in there and gets established, there’s no
reason to leave,” he said. “The real concern is if a rat
started chewing on wires. Almost every house I go into where
there are rats, they’ve chewed on wood and wiring and ornaments.
Their teeth are harder than iron and they have to keep them
gnawed down.” To contact the reporter on this story:
Mary Jane Credeur in Atlanta at
mcredeur@bloomberg.net . To contact the editor responsible for this story:
Ed Dufner at edufner@bloomberg.net . | ||||||
2011-04-19 00:00:00 UTC | Kazakhstan Urges Russia, Belarus to Coordinate Currency Policies | http://www.bloomberg.com/news/2011-04-19/kazakhstan-urges-russia-belarus-to-coordinate-currency-policies.html
| B y N a r i m a n G i z i t d i n o v | Kazakhstan urged Russia and Belarus
to align currency policies between the three members of a
customs union and avoid “sharp, unilateral” devaluations. “If we move toward a joint economic space with Russia and
Belarus, we need to form coherent currency policies,” Kazakh
central bank Governor Grigori Marchenko told reporters in Almaty
today. The central Asian nation was forced to weaken the tenge
twice in the past 16 years “not for domestic reasons but as a
result of sharp devaluations in neighboring countries.” The three former Soviet republics entered a customs union
in July and plan to form common economic space by next year. The
adoption of a joint currency would be the “next logical step”
after creating a common market, Igor Shuvalov, a Russian first
deputy prime minister, said last year. Belarus today abolished restrictions on trading the ruble
between banks as it seeks to stem the slide in the nation’s
foreign-currency reserves. The decision is “equivalent to a
devaluation,” Barbara Nestor , an emerging-markets strategist at
Commerzbank AG in London , said by e-mail. The former Soviet republic, which devalued its currency by
about a fifth in January 2009, may need to reduce the ruble’s
value by as much as 30 percent, Herbert Stepic, chief executive
officer of Raiffeisen Bank International AG (RBI) , said on April 11. The comments were echoed in an April 15 interview by German Gref , chief executive officer of OAO Sberbank, Russia’s biggest
lender, who predicted the “government won’t be able to avoid a
devaluation.” ‘Rather Complicated’ The customs union will delay steps to synchronize currency
policies until Belarus “resolves” its “rather complicated
situation,” Marchenko said. The three partners have agreed to work toward integrating
currency policies in the union, he said. The National Bank of
Kazakhstan devalued the tenge by 63 percent in 1999 and 25
percent in 2009, according to Marchenko. Russia’s central bank drained more than $200 billion, or
about a third of its reserves, in the six months through January
2009 as it managed a 35 percent devaluation of the ruble to the
dollar. The government defaulted on $40 billion of domestic debt
and devalued the ruble in 1998. Marchenko also urged the customs union to coordinate fiscal
programs to avoid the euro region’s mismatch between uniform
monetary policies and diverse approaches to spending among
governments in the currency bloc. To contact the reporters on this story:
Nariman Gizitdinov in Almaty at
ngizitdinov@bloomberg.net To contact the editors responsible for this story:
Steve Voss at sev@bloomberg.net . | ||||||
2011-04-19 00:00:00 UTC | Rupiah Drops to Two-Week Low on U.S., European Debt Concern | http://www.bloomberg.com/news/2011-04-19/rupiah-drops-to-two-week-low-on-u-s-european-debt-concern.html
| B y S u r y a n i O m a r | Indonesia ’s rupiah fell to a two-
week low after Standard & Poor’s cut the U.S. long-term credit
outlook, sapping demand for emerging-market assets. Benchmark
bonds declined. The currency weakened for a second day as the MSCI Asia
Pacific Index of regional stocks dropped 1.4 percent. New York-
based S&P said there’s a one-in-three chance the AAA credit
rating of the U.S. government might be cut within two years
unless policy makers agree on a plan to reduce budget deficits
and the national debt. The yield on Greece ’s two-year bonds rose
to more than 20 percent. “Overnight we had a couple of pieces of bad news; the U.S
rating outlook downgrade and ongoing concern about the Greek
debt crisis,” said Joanna Tan, a Singapore-based economist at
Forecast Singapore Pte. “That led to overall risk aversion in
Asia, including Indonesia. Asia is still very much looking
toward the major economies for cues.” The rupiah declined 0.2 percent to 8,688 per dollar as of
4:16 p.m. in Jakarta, according to data compiled by Bloomberg.
It fell to 8,693 earlier, the weakest level since April 1. The
currency has advanced 3.3 percent this year. The U.S. was the second largest buyer of Indonesia’s non-
oil exports in February, after Japan , according to data from the
statistics department. Indonesia’s 10-year government bonds declined for a fourth
day. The yield on the 8.25 percent note due July 2021 climbed
one basis point to 7.86 percent, according to closing prices
from the Inter-Dealer Market Association. The government sold 6.6 trillion rupiah of bonds and bills
in an auction today, less than the target of 7 trillion rupiah,
the Ministry of Finance’s debt management office said in an e-
mailed statement. The sale drew bids of 14.841 trillion rupiah,
according to the statement. To contact the reporters on this story:
Suryani Omar in Jakarta at
somar6@bloomberg.net ; To contact the editor responsible for this story:
Sandy Hendry at
shendry@bloomberg.net . | ||||||
2011-04-19 00:00:00 UTC | Obama Embarks on Tour to Sell Debt Plan, Not Dwell on S&P's U.S. Outlook | http://www.bloomberg.com/news/2011-04-19/obama-embarks-on-tour-to-sell-debt-plan-not-dwell-on-s-p-report.html
| B y M i k e D o r n i n g a n d J u l i e H i r s c h f e l d D a v i s | President Barack Obama began a tour
promoting his proposal to cut long-term budget deficits with a
new urgency after Standard & Poor’s said the nation’s AAA credit
rating is in peril. The divide between Republicans and Democrats in Congress
over combating the nation’s debt was spotlighted by Standard &
Poor’s lowering of the long-term U.S. credit outlook to
“negative,” with each side saying the alert bolsters their
competing arguments. At a town hall-style meeting today in Annandale, Virginia,
Obama said the nation’s mounting debt posed a threat to the
strength of the economic recovery. “Now that the economy has begun to grow again, if we keep
on spending more than we take in, it’s going to cause serious
damage to our economy,” Obama said at a gymnasium filled with
students and faculty at Northern Virginia Community College. Obama’s cross-country campaign-style swing is billed in
part as an effort to build support for cuts in popular programs
and he didn’t mention yesterday’s S&P report. Administration
officials said they don’t expect him to refer to it unless he is
asked. Chris Lehane , a Democratic strategist who worked on Al Gore’s 2000 presidential campaign, said any president would
prefer to minimize attention to an unfavorable assessment of the
nation’s creditworthiness. ‘Political Paralysis’ Local newspapers and television stations would be likely to
report “Wall Street questions U.S. long-term credit because of
political paralysis in Washington,” Lehane said. “That’s not
the headline you want when you’re looking at re-election.” Obama is scheduled to spend three days traveling through
states crucial to his 2012 re-election campaign to publicize his
plan to reduce cumulative deficits by $4 trillion over 12 years.
The plan includes spending cuts on defense and domestic programs
and calls for raising taxes on the wealthy. In Virginia , he said he was optimistic the White House
could overcome differences with congressional Republicans to
reach an agreement on the deficit, citing deals the two parties
struck on tax cuts last December and government funding in
April. “I believe that Democrats and Republicans can come
together to get this done,” Obama said. “Both sides have come
together before. I believe we can do it again.” Town-Hall Meetings He will also hold forums on the deficit-reduction plan
later this week at Facebook Inc.’s headquarters in Palo Alto ,
California , and in Reno, Nevada . Democrats say New York-based S&P’s revision in the U.S.’s
long-term credit outlook helps make the case for a broad
agreement based on the debt-cutting plan Obama outlined last
week. Republicans say the ratings firm’s report reinforces their
call for deeper spending cuts than the president and other
Democrats have been willing to consider. S&P said the government risks losing its AAA credit rating
unless policy makers agree on a plan by 2013 to reduce budget
deficits and the national debt. The company maintained its top
rating on U.S. long-term debt while lowering the outlook to
“negative” for the first time. Negative Outlook The White House downplayed the negative outlook, saying it
was based on a faulty appraisal of the political climate. Austan Goolsbee , chairman of Obama’s Council of Economic
Advisers, said yesterday that the outlook was based on a
“political judgment” of prospects for a deficit-reduction
agreement that doesn’t deserve “too much weight.” Charles Schumer of New York , the Senate’s third-ranking
Democrat, said bipartisan agreement exists on the need to reduce
the debt by $4 trillion over roughly the next decade. “Now we just need to resolve how to do it,” Schumer, who
is traveling in Asia during a two-week congressional break, said
in a statement. Obama’s “balanced plan which relies on
shared sacrifice, as opposed to simply ending Medicare makes
a long-term deal highly possible,” the senator said. Republicans have proposed scaling back entitlement programs
such as Medicare and reject Obama’s push for tax increases to
help reduce debt. ‘Wake-up Call’ House Majority Leader Eric Cantor, a Virginia Republican,
called the S&P revision “a wake-up call for those in Washington
asking Congress to blindly increase the debt limit” without
significant spending cuts. The negative outlook on long-term U.S. debt issued by S&P
“makes clear that the debt-limit increase proposed by the Obama
administration must be accompanied by meaningful fiscal reforms
that immediately reduce federal spending and stop our nation
from digging itself further into debt,” Cantor said. Congress is facing a vote as early as next month on raising
the government’s $14.29 trillion legal debt limit. The Treasury
Department projects that it will hit the cap on May 16, though
it could use emergency measures to avoid default until about
July 8. Obama and members of his economic team have said that
failure to approve an increase could have catastrophic
consequences for the U.S. economy and financial markets. Reliability Questioned S&P revised the U.S. government’s long-term outlook to
negative on concern the White House and Congress will fail to
reach agreement on cutting medium- and long-term debt. Some of Obama’s Democratic allies questioned S&P’s
reliability, citing the top rating it gave to mortgage-backed
securities that later crashed in value and contributed to the
2008 financial crisis. “Given that the Financial Crisis Inquiry Commission called
the credit rating companies ‘key enablers of the financial
meltdown,’ it’s difficult to know how much credibility S&P
should be given,” said Paul Begala, a Democratic strategist who
helped to run Bill Clinton ’s first presidential campaign in 1992
and served in the Clinton White House as a political adviser. Members of the so-called Gang of Six, a group of six
Democratic and Republican senators who are seeking to negotiate
a compromise deficit-reduction plan, said the S&P move shows the
markets are watching for signs that policy makers will confront
the debt. “If we fail to take this seriously, and if our deficit and
debt discussions turn into just another game of political
brinksmanship, this could result in the most predictable
economic crisis in our history,” Senator Mark Warner of
Virginia, the Democratic leader of the group, said in a
statement. ‘Debt Crisis’ Senator Tom Coburn of Oklahoma , a Republican member of the
group, said the S&P’s change should create a sense of urgency
for tackling “our debt crisis.” The White House said yesterday that Vice President Joe Biden will open a round of negotiations with members of Congress
on long-term deficit reduction with a meeting at Blair House on
May 5. The Obama administration has been bracing for the change in
outlook for about two months as S&P reviewed its assessment of
U.S. debt. During the period, David Beers, the head of the
company’s public finance unit, was in touch with Mary Miller,
the assistant Treasury secretary for financial markets,
according to a person familiar with the discussions. Deficit Plan About 10 days ago, Treasury Department officials gained a
stronger sense that S&P would issue a negative outlook, the
person said. That was shortly before the April 13 speech in
which Obama presented his deficit plan. While Treasury officials sought to persuade the company
that Congress and the administration were determined to reduce
the deficit, S&P told the Treasury Department of its final
outlook on the afternoon of April 15 and of its plan to make an
announcement yesterday. White House and Treasury officials prepared their response
over the weekend, seeking to convey a message of optimism
without appearing to be in denial about the challenges of
reaching an agreement on long-term deficits, said the person
familiar with the discussions. Less than half an hour after the S&P announcement, Miller
released a statement saying the outlook “underestimates the
ability of America’s leaders to come together.” First Since 1996 The announcement was the first time the U.S. credit outlook
has been questioned since 1995 and 1996, when a dispute between
Clinton and House Speaker Newt Gingrich, a Georgia Republican,
led to two government shutdowns. Fitch Ratings put U.S. debt on
a “negative ratings watch” in November 1995 until spring 1996,
and Moody’s Investors Service put some U.S. government bonds on
review for a possible downgrade in January 1996. The S&P 500 Index (SPX) rose 0.1 percent to 1,306.46 at 12:29
p.m., after falling 1.1 percent yesterday. The Dow Jones
Industrial Average rose 0.2 percent to 12,222.29, after a 1.1
percent decline yesterday. The yield on the benchmark 10-year Treasury note jumped as
high as 3.45 percent yesterday in the minutes after the S&P
report, then fell back to 3.37 percent as investors focused on
speculation that Greece will be unable to avoid a default,
driving them to the relative safety of U.S. debt. In trading today, 10-year yields fell 2 basis points, or
0.02 percentage point, to 3.35 percent at 12:35 p.m. in New
York, according to Bloomberg Bond Trader prices. A gauge of the dollar yesterday advanced the most since
November against the currencies of major trading partners on
increased demand for a refuge as Europe ’s debt crisis outweighed
the negative S&P U.S. credit-rating outlook. IntercontinentalExchange’s Dollar Index increased 0.9
percent to 75.508 at 5 p.m. in New York yesterday, from 74.832
on April 15. The gauge tracks the dollar against the euro, yen,
pound, Swiss franc, Canadian dollar and Swedish krona. The index
fell 0.5 percent today to 75.115. The euro rose 0.6 percent to $1.4319 as of 12:38 p.m.
Yesterday, the dollar appreciated 1.4 percent to $1.4235 per
euro in New York from $1.4430 on April 15. To contact the reporters on this story:
Mike Dorning in Washington at
mdorning@bloomberg.net ;
Julie Hirschfeld Davis in Washington at
jdavis159@bloomberg.net To contact the editor responsible for this story:
Mark Silva at
msilva34@bloomberg.net | ||||||
2011-04-19 00:00:00 UTC | Reliance Fuel Exports Rise 6% on Singapore Gasoline Cargoes | http://www.bloomberg.com/news/2011-04-19/reliance-fuel-exports-rise-6-on-gasoline-shipments-to-singapore.html
| B y P r a t i s h N a r a y a n a n | Reliance Industries Ltd. (RIL) , India’s
largest listed company, raised fuel exports from the world’s
biggest refining complex by 6 percent in the first half of April
as demand from Southeast Asia boosted shipments to Singapore. The Mumbai-based company, controlled by billionaire Mukesh Ambani , increased shipments of fuel products from its Jamnagar
facility to at least 800,000 metric tons from 755,000 tons in
the first 15 days of March, according to ship-tracking data
compiled by Bloomberg and vessel fixtures from Clarkson Research
Services Ltd. Reliance is exporting more as state-owned rivals such as
Indian Oil Corp. and Bharat Petroleum Corp. sell more fuel
domestically at government-capped prices while refinery outages
in Asia boost demand. Exxon Mobil Corp., the biggest U.S. oil
company, shut parts of its Singapore refining complex for nine
weeks starting March 9 for maintenance and upgrades, while PT
Pertamina stopped fuel production at its Cilacap, Central Java
refinery from April 2 to April 8 after a fire broke out at a
storage tank. “We are currently in the refinery maintenance season in
this region,” said Praveen Kumar , Singapore-based head of South
Asia oil and gas at FACTS Global Energy, an industry consultant.
“Reliance can bring its products to Singapore, store them and
then reship cargoes to other places.” Manoj Warrier, a spokesman for Reliance in Mumbai, didn’t
respond to an e-mail seeking comment. Gasoline Shipments Reliance exported at least 540,000 tons of gasoline from
Jamnagar in western India during the first 15 days this month,
compared with 195,000 tons in the first half of March, according
to transmissions captured by AISLive on Bloomberg and data from
Clarkson Research, a unit of the world’s biggest shipbroker. At least 42 percent of this month’s gasoline shipments went
to Singapore, while at least two cargoes went to the U.S.
Gasoline demand in the world’s biggest economy typically peaks
in the so-called summer driving season, which lasts from the
Memorial Day weekend in late May to the Labor Day holiday in
early September. The Stena Paris was hired by Mercuria to transport 35,000
tons of gasoline to Singapore from the port of Sikka near
Jamnagar, the Clarkson data show. The vessel sailed from near
Sikka in early April and was last tracked off the coast of
Singapore, according to ship transmissions captured by Bloomberg. Benchmark 92-RON gasoline declined 2.3 percent to $124.95 a
barrel on yesterday, Bloomberg data showed. Nord Observer Gasoil, or diesel, shipments dropped 66 percent to at least
168,060 tons. Reliance doubled fuel exports in the first half of
March as the European winter boosted demand for diesel.
Destinations for diesel cargoes in April included the Middle
East and Africa , the data show. The company also shipped 35,000
tons of naphtha to Japan and 57,000 tons of jet fuel to Europe . The Nord Observer sailed from Sikka to the Saudi Arabian
port of Jizan earlier this month, according to ship
transmissions. The vessel was hired by Cargill Inc. to transport
40,000 tons of gasoil to the Middle East, the Clarkson data show.
The tanker was last tracked heading back to Sikka from Jizan. Gasoil with 0.5 percent sulfur fell 1.5 percent to $135.75
a barrel yesterday, according to data compiled by Bloomberg. All figures from Clarkson are for single-voyage bookings
and exclude long-term charters. Shipbrokers aren’t obliged to
report charters so the scope of data capture can vary from month
to month. Reliance runs two refineries in the western Indian state of
Gujarat, which are capable of processing heavier grades of crude.
They have a processing capacity of 1.24 million barrels a day,
and account for about 1.6 percent of global refining capacity,
according to the company’s website . To contact the reporter on this story:
Pratish Narayanan in Mumbai at
pnarayanan9@bloomberg.net To contact the editor responsible for this story:
Clyde Russell at
crussell7@bloomberg.net | ||||||
2011-04-19 00:00:00 UTC | PNB Bank and OBC Bank CDs Issued:India Money Market | http://www.bloomberg.com/news/2011-04-19/pnb-bank-and-obc-bank-cds-issued-india-money-market.html
| B y S h r a d d h a K o t h a r i | Following is a table showing certificate of
deposits issued by Indian banks.The data has been provided by Trust Financial
Consultancy Services,NVS Brokerage Ltd,Derivium Tradition Securities(India)Pvt
MATA Securities and SPA Securities Ltd
Generated by Bloomberg Publisher WEB Service Provider ID: 340cfa20e4a44bc0afe90f874550e1a2 -0- Apr/19/2011 13:09 GMT | ||||||
2011-04-19 00:00:00 UTC | ‘Runaway CEO Pay’ Could Support 102,000 Jobs, AFL-CIO Says | http://www.bloomberg.com/news/2011-04-19/-runaway-ceo-pay-could-support-102-000-u-s-jobs-afl-cio-says.html
| B y S t e p h a n i e A r m o u r | Chief executive officers at 299
U.S. companies had combined compensation of $3.4 billion in
2010, enough to pay more than 102,000 workers, the AFL-CIO labor
federation reported in a study. CEOs at companies including Viacom Inc. (VIA/B) and Oracle Corp. (ORCL)
averaged $11.4 million in total compensation in 2010, according
to the report, which used data from website salary.com. Viacom’s
CEO Philippe P. Dauman earned $84.5 million last year, the
highest among the executives, according to the report . “The disparity between CEO and workers’ pay has continued
to grow to levels that are completely stunning,” union
President Richard Trumka said today at a Washington news
conference. He said the U.S. is facing “runaway CEO pay.” The AFL-CIO, with 12.2 million members, has led U.S. labor
unions in criticizing the compensation of executives. Trumka was
at the head of a march on Wall Street last year to demand taxes
on the bonuses of executives at banks including Goldman Sachs
Group Inc. (GS) , the fifth-biggest U.S. bank. Trumka, 61, had total compensation of $283,340, including
$246,827 in salary, according to a 2010 union filing with the
Labor Department. Service Employees International Union
President Mary Kay Henry had compensation of $253,660, including
$213,801 in salary, according to a separate filing. Trumka said since 1959, labor leaders have had information
about their pay available. “My ratio to employees here, it’s 4-
to-1,” he said. “That’s not bad.” ‘Say on Pay’ Pay for corporate executives may face limits this year
because the law overhauling financial regulations gave
shareholders a “say on pay” vote on the amount given to top
company management, according to the AFL-CIO report. While the
votes aren’t binding, they will encourage boards to enact
compensation reforms, it said. The 2010 Dodd-Frank Act requires the compensation
committees of a company’s board be composed of independent
directors, and the AFL-CIO report said shareholders must be
given an advisory vote on the payments made to executives when
they are fired or resign. Trumka urged lawmakers to resist Republican efforts aimed
at weakening or repealing the law’s pay-disclosure requirements.
A Republican proposal would strip a provision that requires
publicly traded companies to report the ratio of pay between the
CEO and the median pay of their employees. ‘Business As Usual’ Critics are “trying to do everything they can to dilute
the law and go back to business as usual for Wall Street ,” he
said. The average pay for CEOs of companies in the Standard &
Poor’s 500 Index is enough to cover the salaries of 28 U.S.
presidents or more than 700 minimum-wage workers, according to
the report. The combined compensation would support 102,325 jobs
paying the median wage of all workers, the group said. The AFL-CIO took aim at payments for departing executives
called golden parachutes, corporate jet travel, preferential
pensions and perks unrelated to performance. Dauman, 54, more than doubled his compensation from $34
million in 2009, based on U.S. Securities and Exchange
Commission rules, according to a regulatory filing. The
company’s brands include MTV Networks and Paramount Pictures . Occidental Petroleum Corp. (OXY) CEO Ray R. Irani, 76, received
compensation valued at $76 million in 2010, followed by Oracle
Corp. CEO Lawrence Ellison, 66, who received $70 million.
Occidental is an oil and gas exploration and production company,
and Oracle provides integrated business software and hardware
systems. The union’s website links to a database, letting visitors
search for a CEO’s total compensation and compare it to their
earnings. The union is urging visitors to write lawmakers in
opposition to revising the Dodd-Frank law. To contact the reporter on this story:
Stephanie Armour in Washington at
sarmour@bloomberg.net To contact the editor responsible for this story:
Larry Liebert at
lliebert@bloomberg.net | ||||||
2011-04-19 00:00:00 UTC | Gold Erases Earlier Drop, Advances to $1,496.88 an Ounce in London Trading | http://www.bloomberg.com/news/2011-04-19/gold-erases-earlier-drop-advances-to-1-496-88-an-ounce-in-london-trading.html
| B y M a r i a K o l e s n i k o v a | Gold for immediate delivery gained
$1.57, or 0.1 percent, to $1,496.88 an ounce at 10:07 a.m. in
London , after falling as much as 0.5 percent in earlier trading. To contact the editor responsible for this story:
Maria Kolesnikova at
mkolesnikova@bloomberg.net | ||||||
2011-04-19 00:00:00 UTC | Berkshire, Buffett Sued by Shareholder Over Sokol's Lubrizol Trading Gains | http://www.bloomberg.com/news/2011-04-19/berkshire-hathaway-buffett-sokol-sued-over-lubrizol-profits.html
| B y P h i l M i l f o r d | Berkshire Hathaway Inc. (BRK/A) and Chief
Executive Officer Warren Buffett were sued by a shareholder over
trades in Lubrizol Corp. (LZ) by former Berkshire manager David Sokol. Berkshire investor Mason Kirby, suing to recover damages
for the company, contends that Sokol, also a defendant, hurt the
firm by taking a stake in Lubrizol before recommending to
Buffett that Berkshire buy the company, according to papers made
public today in Delaware Chancery Court in Wilmington. “Sokol knew that Buffett would closely consider and likely
take his recommendation,” Kirby said. “As a result of Sokol’s
unethical behavior, Berkshire suffered significant reputational
losses and other damages.” Sokol bought 96,060 shares of Lubrizol in early January
before recommending that Omaha, Nebraska-based Berkshire acquire
the company, Buffett said in a March statement announcing
Sokol’s resignation. Buffett didn’t immediately respond to a request for comment
e-mailed to his assistant, Carrie Kizer . Ann Thelen, a spokeswoman for Berkshire’s MidAmerican
Energy Holdings Co., where Sokol remains chairman until April
21, didn’t immediately return a call seeking comment from Sokol. Kirby alleges that Buffett and Sokol, “working in
concert,” violated duties to shareholders “and put the company
at risk for a potential adverse SEC action and negative credit
rating.” The case is Kirby v. Sokol, CA6392, Delaware Chancery Court
(Wilmington). To contact the reporter on this story:
Phil Milford in Wilmington, Delaware, at
pmilford@bloomberg.net To contact the editor responsible for this story:
Michael Hytha at mhytha@bloomberg.net . | ||||||
2011-04-19 00:00:00 UTC | Congolese Opposition Party Changes Leadership Before Elections | http://www.bloomberg.com/news/2011-04-19/congolese-opposition-party-changes-leadership-before-elections.html
| B y M i c h a e l J . K a v a n a g h | The political party led by former
Democratic Republic of Congo presidential candidate Jean-Pierre
Bemba, who is under indictment at the International Criminal
Court , changed its leadership ahead of elections this year. Thomas Luhaka, a lawmaker, took over as secretary-general
of the Movement for the Liberation of Congo, or MLC, from
Francois Mwamba, who ran the party after Bemba’s transfer to The
Hague, Luhaka said in a phone interview today. “We need to restructure the party before the upcoming
deadlines for the elections,” Luhaka said from Kinshasa, the
capital. The MLC hasn’t yet decided whether it will nominate its
own presidential candidate or support one from another party in
a vote currently scheduled for November, he said. Bemba was runner-up to Joseph Kabila in Congo’s 2006
presidential elections, the country’s first in more than four
decades. Supporters of the former rebel leader clashed with
Kabila’s soldiers in the streets of Kinshasa in 2007, leaving
hundreds dead. Bemba is facing charges at the ICC of leading
militias who murdered and raped civilians in neighboring Central
African Republic in 2002 and 2003. He has pleaded not guilty. The MLC informed Bemba of the leadership change “and he is
in agreement,” Luhaka said. To contact the reporter on this story:
Michael J. Kavanagh in Kinshasa at
mkavanagh9@bloomberg.net . To contact the editor responsible for this story:
Antony Sguazzin at asguazzin@bloomberg.net . | ||||||
2011-04-19 00:00:00 UTC | Oilseed Output to Rise 1.2% as Farmers Seed More, Oil World Says | http://www.bloomberg.com/news/2011-04-19/oilseed-output-to-rise-1-2-as-farmers-seed-more-oil-world-says.html
| B y T o n y C . D r e i b u s | Global oilseed production will rise
1.2 percent this year after farmers expanded planting, mostly in
South America , the U.S. and India , on higher prices, according
to Oil World, a researcher based in Hamburg. Output of soybeans, cottonseed, ground nuts, sunflower
seed, rapeseed, palm kernels and copra from coconuts will total
438.3 million metric tons, Oil World said in a report today.
That’s up from 433 million tons a year earlier and last month’s
estimate of 435.3 million tons, it said. Soybean output will
rise 0.6 percent to a record 261.3 million tons, Oil World said. “Farmers sizably expanded the area under oilseeds,” Oil
World said. “Most of the upward revision from our previous
estimates occurred in soybeans, primarily in South America.” Soybean futures have gained 37 percent in the past year,
partly because of increased demand from China , the biggest
consumer of the oilseed. Soybean production in Brazil , the world’s third-biggest
shipper behind the U.S. and Argentina , will rise 4.8 percent
to 72 million tons in 2011, Oil World said. Southern Hemisphere
output will increase 2.2 percent from last month’s estimate to 134.3
million tons, according to the report. Wet Weather Some U.S. farmers who planned to seed more corn after
prices more than doubled in the past year rather than soybeans
may be hindered by weather, Oil World said. Wet weather in the
northern Plains may prevent growers from seeding corn who will
then switch to soybeans that can be planted later, it said. “It is now considered possible that farmers will try to
plant a larger than intended area with corn at the expense of
soybeans,” Oil World said. “This will only be possible if
weather conditions improve in the main U.S. growing areas. It
was too cold and wet in the first half of April, delaying
fieldwork and corn plantings.” Global soybean stockpiles will gain 3.3 percent to 68.6
million tons, Oil World said. Soybean crush, or processing into
meal and oil, will surge 9.1 percent to 226.3 million tons
through August, according to the report. “World soybean crushings will show an extraordinary
increase,” Oil World said. “It should be noted, however, that
most of this already occurred in the first half of the season
owing to insufficient supplies of other oilseeds and products as
well as strong demand.” To contact the reporter on this story:
Tony C. Dreibus in London at
tdreibus@bloomberg.net . To contact the editor responsible for this story:
Claudia Carpenter at
ccarpenter@bloomberg.net . | ||||||
2011-04-19 00:00:00 UTC | Nestle Timeline on L’Oreal May Concern Investors, Analyst Says | http://www.bloomberg.com/news/2011-04-19/nestle-timeline-on-l-oreal-may-concern-investors-analyst-says.html
| B y T o m M u l i e r | Nestle SA (NESN) ’s intention to wait
until 2014 before deciding the future of its L’Oreal SA (OR) stake
may cause investors in the world’s largest food company to worry
that it will acquire the cosmetics maker, an analyst at Sanford
C. Bernstein said. Nestle said April 14 it will decide what to do with its
30 percent L’Oreal stake in 2014, the year that restrictions on
selling the holding to a third party are lifted. Andrew Wood , an
analyst at Sanford C. Bernstein, said that makes him “slightly
more wary” that Nestle may bid for the remainder, in a note to
clients dated yesterday. “The prospect of a value-destroying, risky, strategically
inconsistent deal, made against the wishes of most investors,
within three years, is hardly going to be forgotten in the
meantime,” the New York-based analyst wrote. Nestle Chairman Peter Brabeck-Letmathe said taking three
years to decide will give the company time to reflect on its
strategy. “Everyone can relax,” Roddy Child-Villiers, head of
investor relations at the Vevey, Switzerland-based company, said
on April 15. Nestle bought a stake in Paris-based L’Oreal in 1974 from
the Bettencourt family, which still owns about 31 percent. The
maker of KitKat bars has agreed with L’Oreal’s 88-year-old main
shareholder, Liliane Bettencourt, not to raise the stake until
six months after her death. L’Oreal has a market value of about
50 billion euros ($71 billion), compared with 181.9 billion
Swiss francs ($203 billion) for Nestle. Nestle and the Bettencourt family gave each other a right
of first refusal over their stakes that runs through April 29,
2014, according to their agreement. After that, Nestle would be
able to sell its stake to a third party without offering it to
the Bettencourt family. The food company is probably considering selling the stake
or holding it, David Hayes , an analyst at Nomura, wrote in an
April 15 note to investors. To contact the reporter on this story:
Tom Mulier in Geneva at
tmulier@bloomberg.net . To contact the editor responsible for this story:
Celeste Perri at cperri@bloomberg.net . | ||||||
2011-04-19 00:00:00 UTC | Record Streak for S&P 500 Earnings May Rest With Momentum Kings Apple, GE | http://www.bloomberg.com/news/2011-04-19/record-streak-for-s-p-500-earnings-may-rest-with-momentum-kings-apple-ge.html
| B y I n y o u n g H w a n g | Investors counting on a record
streak of higher-than-forecast profits to keep driving share
prices may get clues from 79 companies reporting this week with
the best history of earnings surprises. Apple Inc. (AAPL) , maker of the iPhone, and General Electric Co. (GE) ,
the world’s biggest builder of jet engines , are among companies
that have topped analysts’ projections in the last four quarters
and had estimates boosted since February, according to data
compiled by Bloomberg. Standard & Poor’s 500 Index companies
will probably report average net income growth of 10 percent in
the period, data compiled by Bloomberg show. “You can call it momentum, progress or improvement, but
there’s always interest in companies that can do better and
better each quarter, come up with something new, pull a rabbit
out of the hat,” said John Carey , a Boston-based money manager
at Pioneer Investments, which oversees about $250 billion. “At
the same time, there were some unusual, striking events in the
first quarter that upset and distracted investors.” Companies in the S&P 500 have beaten analyst earnings
estimates for eight straight quarters, the most since at least
2006, helping propel the index as much as 99 percent from the
market bottom on March 9, 2009, data compiled by Bloomberg show.
The benchmark gauge for U.S. stocks has risen 3.8 percent since
it fell to its low this year of 1,256.88 on March 16, following
Japan ’s biggest earthquake on record and higher oil prices
spurred by unrest in Middle East and northern Africa . ‘Challenging’ Earnings Season The 20 companies in the S&P 500 that have reported since
April 11 have seen earnings-per-share growth of 11 percent,
according to data compiled by Bloomberg. They have beaten
analyst predictions by 0.7 percent, with 75 percent of the
companies announcing positive surprises. Seventy-nine U.S. companies have exceeded estimates for
four quarters and had forecasts revised upward, according to
data compiled by Bloomberg. They all have a market value of
greater than $100 million, including restaurant chain Chipotle
Mexican Grill Inc. (CMG) , chemical maker DuPont Co. and private-equity
firm Blackstone Group LP. (BX) A basket of stocks in the S&P 500 that have met the
criteria gained almost twice as much as the benchmark equity
measure in the past year, data compiled by Bloomberg show.
Denver-based Chipotle, Wilmington, Delaware-based DuPont and
Blackstone, which is based in New York, have all outperformed
the S&P 500 by at least 12 percentage points in the past year. Apple Profits Apple’s profit in the quarter ended Dec. 25 jumped 78
percent, as sales increased 71 percent to a record $26.7
billion. Analysts estimate Cupertino, California-based Apple
will have adjusted second-quarter profit of $5.39 a share on
sales of $23.4 billion when it reports tomorrow, according to
data compiled by Bloomberg. Profit at GE in Fairfield, Connecticut , rose 5.6 percent to
$11.64 billion from $11.03 billion last year. Eleven analysts
surveyed by Bloomberg forecast earnings for the first quarter,
which ended March 11, will be 28 cents a share on average,
compared with a 21-cent profit in the year-ago period. GE
reports earnings on April 21. First-quarter earnings may be “challenging” because of
rising commodity prices and slowing economic growth, said
Michael Holland , who oversees more than $4 billion as chairman
of Holland & Co. in New York. Crude oil settled at $112.79 a barrel, a 30-month high, on
April 8. Gold rose to a record $1,498.60 an ounce after Standard
& Poor’s revised its U.S. credit outlook to negative yesterday.
The International Monetary Fund lowered its U.S. growth forecast
for 2011 last week to 2.8 percent from 3 percent, citing higher
commodity prices and sluggish jobs growth, and downgraded its
outlook for Japan. Signals From Alcoa Alcoa Inc. (AA) ’s April 11 quarterly report signaled gains would
be harder to come by this year, according to Bespoke Investment
Group LLC. Alcoa tumbled 6 percent and the benchmark measure of
U.S. shares lost 0.8 percent the day after the biggest U.S.
aluminum producer estimated sales that trailed estimates. The S&P 500 has lost an average of 5.1 percent since 2001
over the remainder of earnings seasons when Alcoa slumped 5
percent or more, and the benchmark gauge for U.S. stocks dropped
at least 0.5 percent on the same day, according to Harrison, New
York-based research firm Bespoke in a report last week. Alcoa, the first company in the Dow Jones Industrial
Average to publish quarterly results, beat earnings projections
for four quarters and had estimates revised higher by analysts
before it announced results last week. While the Pittsburgh-
based company reported adjusted per-share profit that exceeded
predictions for the fifth straight quarter, the stock slumped
after sales missed estimates. Metrics “People had their metrics lined up and the company
underperformed,” Holland said. “It isn’t simply the earnings-
per-share numbers. It’s revenue and guidance too. To a nervous
market, if a company underperforms in any of these categories,
you see what happens with Alcoa.” The S&P 500 rallied 5.8 percent in the six weeks after
Alcoa’s fourth-quarter profit report topped projections, data
compiled by Bloomberg show. More than 67 percent of companies in
the gauge exceeded estimates in the period, the eighth straight
quarter of positive surprises. “There’s no question that in the short-term, current
expectations are instrumental in pushing a stock up or down,”
said Holland, who oversees more than $4 billion in New York .
“If a company exceeds expectations, near-term traders trade off
that.” To contact the reporter on this story:
Inyoung Hwang at ihwang7@bloomberg.net . To contact the editor responsible for this story:
Nick Baker at nbaker7@bloomberg.net . | ||||||
2011-04-19 00:00:00 UTC | Northern Irish Tax Cut Would Help Beat Terrorism, Paterson Says | http://www.bloomberg.com/news/2011-04-19/northern-irish-tax-cut-would-help-beat-terrorism-paterson-says.html
| B y C o l m H e a t l e y | Northern Ireland is counting on
reducing its company tax rate to the same level as its southern
neighbor to help boost the flagging economy and stifle a
recurrence of terrorist activity in the province. Cutting the rate to the Republic of Ireland’s 12.5 percent
from the U.K.-wide 28 percent is among measures put forward in a
consultation paper by Owen Paterson, the secretary of state in
the British government who is responsible for Northern Ireland. “We need to do something really radical to help revive the
economy,” Paterson said in a telephone interview. Better
economic prospects would “take away any incentive for people to
join” dissidents, he said. Northern Ireland holds elections on May 5 for its power-
sharing assembly after the economy shrank by 5 percent over the
past three years and unemployment doubled. Voting takes place
amid a growing threat from dissident republicans still using
terrorism to push for a united Ireland six years after the Irish
Republic Army gave up their weapons. Members of one group killed a policeman, Ronan Kerr, in a
car bomb on April 2. Yesterday, police said a bomb left in a
wooded area of south Belfast was an attempt to kill officers
lured to the area with a hoax call. The device didn’t explode. “Stability will keep them in check but there will always
be poor young people,” Peter Shirlow , a politics lecturer at
Queen’s University in Belfast , said in an interview. “Reviving
the economy shouldn’t be overstated. The dissidents are
ideologues, militarists. Their goal is about keeping the flame
of republicanism, as they see it, alive.” Northern Squeeze The province is being squeezed by government budget cuts in
the rest of the U.K. to the east and the collapse of Ireland’s
economy to the south. Northern Ireland is more dependent on
public jobs than anywhere else in the U.K., and Paterson said
77.6 percent of spending is derived from the state. “The economy survives here on public spending,” Paterson
said on April 13. “That is simply unsustainable.” Last month, Patterson opened a public consultation on
reducing company tax further than the U.K. Treasury is currently
proposing. It would allow the assembly in Belfast to decide on
the level rather than the government in London . “The choice of setting the rate would be in local hands,”
Patterson said. The consultation period ends in June and the
U.K. government will discuss it afterwards, he said. More Autonomy The U.K.’s corporate tax rate will fall to 26 percent this
month and by one percentage point every year for the next three
years, Chancellor of the Exchequer George Osborne told
parliament in his budget speech on March 23. The Scottish National Party wants to lower Scotland ’s
company tax rate further to make the country more competitive,
First Minister Alex Salmond said in an interview last month. The
SNP runs the devolved government in Edinburgh and is seeking re-
election on May 5 to push for more autonomy. “I support Northern Ireland getting control of corporation
tax ,” Salmond said at the SNP headquarters in Edinburgh. “Once
the principle is conceded of differential rates then it’s very
difficult” to say no to Scotland. “If we win the election then
this will happen,” he said. Northern Ireland’s assembly was revived in 2007 after the
IRA decommissioned its weapons. It is headed by the pro-U.K.
Democratic Unionist Party and pro-united Ireland Sinn Fein
party, one-time allies of the IRA. Top Priorities First Minister Peter Robinson said boosting the economy and
defeating the dissidents are his top priorities. They are trying
to reignite a conflict that claimed 3,500 lives before largely
ending in 1998 with a peace deal. Terrorists have killed two British soldiers and two
policemen since ramping up their campaign in 2009. A week after
the murder of policeman Kerr, dissidents left a 500-pound bomb
on the border with Ireland. Activity by armed dissident groups soared by 60 percent in
2010 from a year earlier, according to Justice Minister David Ford. They are funded by alcohol and cigarette smuggling, drugs
and racketeering, Paterson said. “We are in a very different place from where we were 30 or
40 years ago,” said Patterson. “But we need to rebalance the
economy and that will take a generation.” To contact the reporter on this story:
Colm Heatley in Belfast at
cheatley@bloomberg.net To contact the editor responsible for this story:
Rodney Jefferson at
r.jefferson@bloomberg.net | ||||||
2011-04-19 00:00:00 UTC | Udvar-Hazy's Air Lease Raises $802.5 Million in Jet Industry's Biggest IPO | http://www.bloomberg.com/news/2011-04-19/udvar-hazy-s-air-lease-raises-802-5-million-in-jet-industry-s-biggest-ipo.html
| B y S u s a n n a R a y | Air Lease Corp., the jet-leasing
company led by Steven Udvar-Hazy, raised $802.5 million in the
industry’s largest U.S. initial public offering after increasing
the number of shares 21 percent. The Los Angeles-based company sold 30.3 million shares at
$26.50 each yesterday, according to data compiled by Bloomberg.
It had offered 25 million shares at $25 to $28, according to a
filing with the U.S. Securities and Exchange Commission. The underwriters may exercise an overallotment option to
buy as many as 4.54 million additional shares, Bloomberg data
show, compared with the 3.75 million listed in the prospectus. Udvar-Hazy, 65, is drawing on four decades of relationships
with airlines, planemakers and bankers to recreate some of what
he walked away from in 2010 when he left American International
Group Inc. (AIG) As chairman and chief executive officer of Air Lease,
he has built a fleet of 49 aircraft, with orders for more than
150 additional planes since founding the company 14 months ago. Air Lease’s fleet doesn’t have the “legacy challenges”
that saddle competitors, Udvar-Hazy said in a presentation
broadcast online by RetailRoadshow. The company’s jets have a
weighted average age of 3.5 years, compared with 5.4 years for
competitor AerCap Holding NV’s 350 planes, 8.1 years for Fly
Leasing Ltd. (FLY) ’s 59 and 11 years for Aircastle Ltd. (AYR) ’s 136
aircraft, according to company filings. Air Lease doesn’t plan to pay a dividend, according to its
prospectus, while Aircastle and Fly do. Industry Growth Aircraft leasing is growing in popularity as airlines seek
flexibility within the cyclical air-travel industry as well as a
way to avoid burdening their balance sheets with the billions of
dollars required to fund plane purchases. In 1990, about 10
percent of the world’s commercial planes were leased, and by
2015 that proportion will reach 35 percent, according to
estimates by industry-data providers Ascend and Avitas cited by
Air Lease. Still, the three aircraft lessors that went public in the
two years before the recession hit AerCap, Aircastle and Fly all were trading at least 37 percent below their $23 initial
share price as of April 15. The shares, trading on the New York Stock Exchange under
the symbol AL, climbed $1.03, or 3.9 percent, to $27.53, at
10:03 a.m. in New York Stock Exchange composite trading. JPMorgan Chase & Co., Credit Suisse AG, Barclays Plc, FBR
Capital Markets, RBC Capital Markets and Wells Fargo & Co . led
the offering. To contact the reporter on this story:
Susanna Ray in Seattle at
sray7@bloomberg.net To contact the editor responsible for this story:
Jennifer Sondag at jsondag@bloomberg.net . | ||||||
2011-04-19 00:00:00 UTC | U.S. Natural Gas Stockpiles Probably Rose 3.2% on Warmer Weather | http://www.bloomberg.com/news/2011-04-19/u-s-natural-gas-stockpiles-probably-rose-3-2-on-warmer-weather.html
| B y G e n e L a v e r t y | U.S. natural-gas supplies probably
rose 3.2 percent last week as heater use in the North and air
conditioning in the South spurred demand, according to analyst
estimates compiled by Bloomberg before a government report on
April 21. Inventories rose 52 billion cubic feet to 1.659 trillion in
the week ended April 15, according to the median of seven
estimates. The five-year average stockpile change for the week
is an increase of 34 billion. Supplies jumped 75 billion cubic
feet a year earlier. A storm system that swept across the U.S. North last week
brought snow to the Great Plains while temperatures rose in
Southern states. The range of temperatures was enough to support
prices, said Kyle Cooper , director of research at IAF Advisors
in Houston who expects an increase of 52 billion cubic feet. “The overall temperature profile has been relatively
bullish,” Cooper said. “From that perspective, I think the
prices would have been quite a bit lower if it weren’t for
Mother Nature. As long as Mother Nature stays bullish we’ll
probably find some support.” The stockpile estimates ranged from increases of 47 billion
to 65 billion cubic feet. The Energy Department is scheduled to
release its weekly report on gas in storage April 21 at 10:30
a.m. in Washington . Cooling degree days in South Atlantic states in the week
ended April 14 were more than double normal levels, according to
the National Oceanic and Atmospheric Administration . Degree days
are used as a measure of demand for power. Temperatures in
Houston reached 88 degrees Fahrenheit (31 Celsius) on April 11,
10 degrees higher than normal, according to State College ,
Pennsylvania-based AccuWeather Inc. Supplies Last Week Stockpiles rose 28 billion cubic feet to 1.607 trillion in
the week ended April 8, last week’s report showed. Analysts
expected an increase of 35 billion. Gas on the New York Mercantile Exchange rose 1.7 percent to
$4.212 per million British thermal units on April 14, after last
week’s report was released. Prices have risen 1.7 percent since
then, gaining 12.4 cents, or 3 percent, to $4.262 today. The number of rigs drilling for natural gas in the U.S.
slipped four to 885 last week, according to Houston-based Baker
Hughes Inc. The gas rig count has slipped 11 percent since
touching 992 in the week ended Aug. 13. A decrease in imports of liquefied natural gas and higher
exports to Mexico may pare additions to inventories, said
Stephen Smith , an energy analyst and president of Stephen Smith
Energy Associates in Natchez, Mississippi , who estimates that
stockpiles grew by 47 billion cubic feet last week. “ Japan is sucking up any spare LNG that’s sitting
around,” Smith said. “Mexico is also reducing LNG imports
while increasing imports of cheaper U.S. pipeline gas.” To contact the reporter on this story:
Gene Laverty in Calgary at
glaverty@bloomberg.net . To contact the editor responsible for this story:
Dan Stets at dstets@bloomberg.net . | ||||||
2011-04-19 00:00:00 UTC | U.S. Stock Futures Erase Losses; Texas Instruments Decreases on Forecast | http://www.bloomberg.com/news/2011-04-19/u-s-stock-futures-erase-losses-texas-instruments-decreases-on-forecast.html
| B y W i l l H a d f i e l d | U.S. stock futures pared their
losses as investors awaited a report that may show housing
starts climbed in March, offsetting Texas Instruments Inc.’s
forecast that fell short of some analysts’ estimates. Texas Instruments, the second-biggest U.S. chipmaker, lost
2.3 percent in early New York trading. Exxon Mobil Corp. and
ConocoPhillips declined in Germany as crude oil retreated for a
second day. Standard & Poor’s 500 Index futures expiring in June rose
less than 0.1 percent to 1,301.2 at 10:58 a.m. in London , after
the benchmark gauge dropped 1.1 percent yesterday. Dow Jones
Industrial Average futures climbed 0.1 percent to 12,148 today,
while Nasdaq-100 Index futures advanced less than 0.1 percent to
2,290.75. To contact the editor responsible for this story:
Will Hadfield at
whadfield@bloomberg.net | ||||||
2011-04-19 00:00:00 UTC | EDF Energies Nouvelles, Esker, L’Oreal: French Equity Preview | http://www.bloomberg.com/news/2011-04-19/edf-energies-nouvelles-esker-l-oreal-french-equity-preview.html
| B y R u d y R u i t e n b e r g | The following is a list of
companies whose shares may have unusual price changes in Paris.
Stock symbols are in parentheses after company names. Share
prices are from the last close. France ’s CAC 40 Index (CAC) gained 0.7 percent to 3,908.58 in
Paris. The SBF 120 Index (SBF120) also rose 0.7 percent. Aufeminin.com SA (FEM) : The operator of websites
targeted at women said first-quarter sales rose 11 percent to 9
million euros and net income advanced 1.7 percent to 1.9 million
euros. The shares rose 2.1 percent to 19.59 euros. EDF Energies Nouvelles SA (EEN) : The power-generation
company said its Mexican unit agreed to buy two wind-energy
projects with a capacity of 324 megawatts. The shares slipped
less than 0.1 percent to 40.17 euros. Esker SA (ALESK) The provider of business software to
manage electronic documents said first-quarter sales rose 13
percent to 8.39 million euros. The shares declined 1.2 percent
to 6.74 euros. HF Co. (HF) : The maker of television receivers and
Internet-access equipment said first-quarter sales rose 0.3
percent to 36 million euros. The shares fell 6.7 percent to
15.54 euros. Linedata Services (LIN) : France’s largest maker of
financial software for leasing and credit companies said first-
quarter sales fell 7.5 percent to 31.7 million euros. The shares
rose 0.7 percent to 12.70 euros. L’Oreal SA (OR) : The world’s largest cosmetics maker,
reported first-quarter sales rose 9.3 percent to 5.16 billion
euros, beating analysts’ estimates as customers bought more
Maybelline makeup and Ralph Lauren fragrances. The shares rose
1.8 percent to 83.20 euros. PCAS SA (PCA FP): The chemical maker said first-quarter
sales climbed 6.3 percent to 44.05 million euros. The shares
fell 0.4 percent to 2.63 euros. Spir Communication (SPI) : The publisher of free weekly
newspapers and real estate magazines said first-quarter sales
rose 3.9 percent to 146.7 million euros. The shares gained 0.6
percent to 40.51 euros. Virbac SA (VIRP) : The maker of veterinary vaccines and
drugs said first-quarter sales rose 18 percent to 159.9 million
euros. The shares rose 1 percent to 117.30 euros. To contact the reporter on this story:
Rudy Ruitenberg in Paris at
rruitenberg@bloomberg.net . To contact the editor responsible for this story:
Vidya Root at
vroot@bloomberg.net | ||||||
2011-04-19 00:00:00 UTC | Allstate Says Wilson’s Pay Is Justified as Insurer Prepares for Proxy Vote | http://www.bloomberg.com/news/2011-04-19/allstate-says-wilson-s-pay-is-justified-as-insurer-prepares-for-proxy-vote.html
| B y A n d r e w F r y e | Allstate Corp. (ALL) , the biggest
publicly traded U.S. home and auto insurer, told a proxy
advisory firm that Chief Executive Officer Thomas Wilson ’s pay
last year was justified as it braced for a vote on compensation. “Our compensation program is overseen by our independent
board members and should be supported,” Northbrook, Illinois-
based Allstate said in a letter to Institutional Shareholder
Services Inc., disclosed today in a regulatory filing. The
methodology used by ISS to value Wilson’s stock options
“undermines the credibility of its analysis and vote
recommendations and is potentially misleading to investors.” Allstate is giving shareholders a non-binding vote on
executive compensation. The company said it followed accounting
guidelines of the Securities and Exchange Commission when
disclosing Wilson’s pay for last year at $9.3 million, a 12
percent decline from 2009. According to the ISS methodology, his
compensation rose 45 percent to $11.9 million, Allstate said. Financial companies are giving shareholders a greater voice
in executive compensation after the Dodd-Frank Wall Street
reform act became law last year. Proxy advisory firms like ISS
monitor corporate governance at public companies and make
recommendations on how shareholders should vote. “Investors that rely upon ISS may mistakenly believe an
increase occurred in our chief executive officer’s compensation
when, in fact, it decreased,” Allstate said. Ted Allen, a spokesman for ISS, said that the proxy-
advisory service was reviewing the letter and that it would
consider Allstate’s concerns when producing its final report. “As a matter of courtesy to any S&P 500 company that wants
to review our analysis before it goes out, we will provide them
that opportunity,” Allen said in a phone interview. “We
generally do this as a means of ensuring factual accuracy.”
Allstate is among several companies that requested to see the
analysis in advance of publication, he said. To contact the reporters on this story:
Andrew Frye in New York at
afrye@bloomberg.net . To contact the editor responsible for this story:
Dan Kraut at dkraut2@bloomberg.net | ||||||
2011-04-19 00:00:00 UTC | Cerberus's NewPage Said to Work With Restructuring Firms as Apollo Circles | http://www.bloomberg.com/news/2011-04-19/cerberus-s-newpage-said-to-work-with-lazard-fti-dewey-on-restructuring.html
| B y J o n a t h a n K e e h n e r , K r i s t a G i o v a c c o a n d C r i s t i n a A l e s c i | NewPage Corp. is working with
advisers to help restructure its debt as owner Cerberus Capital
Management LP seeks to fend off distressed investors, including
Apollo Global Management LLC. Lazard Ltd. (LAZ) , FTI Consulting Inc. (FCN) and law firm Dewey &
LeBoeuf LLP are advising Miamisburg, Ohio-based NewPage,
according to three people with knowledge of the matter, who
declined to be identified because the talks are private. Leon Black ’s Apollo and Avenue Capital Group, run by Marc Lasry , hold more than $400 million of NewPage’s $806 million of
second-lien bonds, which may be converted to equity if the
company can’t meet debt payments, two of the people said.
NewPage is attempting to cut costs and reduce debt by selling
assets after demand for coated-paper declined since 2008. “The second-liens are definitely in distressed territory
and indicate a restructuring needs to happen,” said Rahul Gandhi , an analyst at debt-research firm CreditSights Inc. Amber Garwood, a spokeswoman for NewPage, and
representatives for Cerberus, Apollo, Avenue, Lazard, FTI and
Dewey & LeBoeuf declined to comment. NewPage’s 10 percent second-lien notes due May 2012 fell
0.8 cent to 57.4 cents on the dollar as of 9:55 a.m. in New
York , according to Trace, the bond-price reporting system of the
Financial Industry Regulatory Authority. The debt has declined
3.6 cents since April 15 when NewPage said it was replacing its
chief financial officer. The securities are down from 70 cents
in March, Trace data show. Paper Demand The company’s $1.77 billion of 11.375 percent bonds due in
December 2014 dropped to 99.4 cents from 100.75 cents on the
dollar since NewPage announced the management change, Trace data
show. Volatility will continue in the bonds until Apollo “gets
its chance to force” NewPage “into a restructuring and gain
control of the equity through the process,” London-based Gandhi
wrote in an April 19 report. NewPage’s capital structure is “stressed” and about $1
billion over-levered, said Ed Sustar, a credit analyst for
Moody’s Investors Service. “The issue is that overall demand for paper dropped in
2008 and there continues to be a long-term sector decline with
the migration from print to digital,” said Sustar, who is based
in Toronto. “Companies are shutting down mills to keep supply
and demand in balance, but prices are not yet at levels to allow
them to generate enough money to make a profit.” Cerberus took control of NewPage in 2005 when it bought
MeadWestvaco Corp.’s paper business for $2.3 billion. An
affiliate of Cerberus provided $415 million to NewPage,
according to a statement at the time. “Cerberus may try to preserve value and appease Apollo and
Avenue through a rights offering for the second-lien,” said
Amer Tiwana, an analyst at CRT Capital Group LLC in Stamford ,
Connecticut . “Given that their equity is relatively worthless,
Cerberus’s only way of keeping control may be through ownership
of the second-lien which could be converted into new equity.” To contact the reporters on this story:
Jonathan Keehner in New York at
jkeehner@bloomberg.net ;
Krista Giovacco in New York at
kgiovacco1@bloomberg.net ;
Cristina Alesci in New York at
calesci2@bloomberg.net To contact the editors responsible for this story:
David Scheer at
dscheer@bloomberg.net ;
Faris Khan at
fkhan33@bloomberg.net | ||||||
2011-04-19 00:00:00 UTC | News Corp. Said to Consider Bid for Formula One Grand Prix Racing Series | http://www.bloomberg.com/news/2011-04-19/news-corp-said-to-consider-bid-with-partners-for-formula-1-racing-series.html
| B y R o n a l d G r o v e r | News Corp. (NWSA) , the media company
controlled by Rupert Murdoch, is considering a bid for the
Formula One race car series, according to a person with
knowledge the situation. News Corp., owner of cable-television channels including
Speed, would only bid for Formula One with partners, said the
person, who wasn’t authorized to speak publicly. The New York-
based company has held talks with people associated with Formula
One car manufacturers, and with Mexican billionaire Carlos Slim,
Sky News reported earlier. Formula One racing includes Grand Prix races in Monaco and
Bahrain. News Corp.’s interest is in the early stages and the
company has yet to contact Formula One’s owner, the London-based
private equity firm CVC Capital Partners , the person said. Julie Henderson , a spokeswoman for News Corp., declined to
comment, as did Arturo Elias, a spokesman for Slim. News Corp. declined 11 cents to $16.87 in Nasdaq composite
trading today. The class A shares have gained 16 percent this
year. To contact the reporter on this story:
Ronald Grover in Los Angeles at
rgrover5@bloomberg.net To contact the editor responsible for this story:
Anthony Palazzo at
apalazzo@bloomberg.net | ||||||
2011-04-19 00:00:00 UTC | Royal-Wedding Protest Bid Is Lodged by Muslim Anti-War Group | http://www.bloomberg.com/news/2011-04-19/royal-wedding-protest-bid-is-lodged-by-muslim-anti-war-group.html
| B y K i t t y D o n a l d s o n | A Muslim group that campaigns
against British military involvement in Afghanistan applied for
permission to protest outside Westminster Abbey when Prince William gets married there on April 29, London’s police said. “One of the biggest advocates of British imperialism,
Flight Lieutenant Prince William, wishes to enjoy an extravagant
wedding ceremony, ironically at the expense of the taxpayer,”
Muslims Against Crusades said on its website. “His direct
involvement with the murderous British military and eagerness to
inherit the reins of a kingdom built on blood and colonialism
clearly demonstrate what type of legacy he wishes to leave.” Prince William, the second-in-line to the British throne,
will marry Kate Middleton next week in a ceremony that will
attract thousands of spectators in the streets between the Abbey
and Buckingham Palace , along which the newly-weds will drive in
a horse-drawn carriage. The U.K. government says it expects 2
billion people around the world to watch on television. The police are in discussions about preventing
demonstrations in London on the day, a spokesman who declined to
be identified in line with the force’s rules said by telephone
today. All protests along the route of the wedding are banned.
The English Defence League , which campaigns against radical
Islamism in the U.K., also applied to protest against the Muslim
group, the police said. The Metropolitan force said 5,000 officers will be on duty
on the day of the royal wedding, the Press Association news wire
reported. To contact the reporter on the story:
Kitty Donaldson in London at
kdonaldson1@bloomberg.net To contact the editor responsible for this story:
James Hertling at jhertling@bloomberg.net | ||||||
2011-04-19 00:00:00 UTC | Grete Waitz, Norway’s Nine-Time Winner of New York Marathon, Dies Aged 57 | http://www.bloomberg.com/news/2011-04-19/norwegian-marathon-record-setter-grete-waitz-dies-at-57-after-long-illness.html
| B y M a r i a n n e S t i g s e t a n d O s h r a t C a r m i e l | Grete Waitz, the record nine-time
winner of the New York City Marathon , died after a six-year
struggle with cancer. She was 57. She died at Oslo’s Ullevaal Hospital at 4:10 a.m. today
with her husband, Jack, at her side, said Helle Aanesen, who co-
founded Active Against Cancer with Waitz in 2007. Aanesen
declined to specify what type of cancer the athlete had died
from, as she had chosen not to disclose it to the public. “Grete was a fantastic athlete and someone who paved the
way for female runners,” Aanesen said by phone. “She had a
will, a talent and led a life that was simply extraordinary.
She’ll go down in the history books as one of the greats.” Waitz ran, and won, her first New York City Marathon in
1978, invited by Fred Lebow, then president of the New York Road
Runners Club and the founder of the city’s marathon, which runs
through all five boroughs and last year attracted more than
45,000 runners from around the world. As she returned to win the
New York race eight more times, Waitz and Lebow became friends. Waitz ran her final marathon in 1992 alongside Lebow, who
had been diagnosed two years earlier with brain cancer . They
crossed the finish line together with their clasped hands held
high, registering a time of 5 hours, 32 minutes, 35 seconds. ‘Most Emotional’ Race “It was the most emotional race of my life,” Waitz told
the New York Daily News in 2008. “We both ran the last two
miles crying.” Lebow, whose cancer had been in remission long
enough for him to train for and run the race he created, died in
1994. Waitz, who was born in Oslo as Grete Andersen on Oct. 1,
1953, rose to prominence in her teenage years with national
junior titles in the 400 meters and 800 meters, and a European
junior record in the 1,500 meters. She set her first of two
world records in the 3,000-meters in 1975. Her biggest achievements came in the marathon, including
the nine New York wins, from 1978 to 1988, and becoming the
first woman to finish in less than 2 1/2 hours. She also took
the gold medal at the World Championships in Helsinki in 1983
and an Olympic silver in Los Angeles in 1984. ‘Fairy Tale’ “For a shy Norwegian schoolteacher to grow up and become
one of the iconic New York City sports stars is a fairy tale,”
said Richard Finn, a spokesman for New York Road Runners . “She was as much New York and synonymous with the marathon
as the marathon was synonymous with her,” Finn said. Each October the New York Road Runners hosts a 13.1 mile
race around Central Park called “Grete’s Great Gallop,” where
Waitz would appear and high-five runners. Waitz attended the
2010 race. “If Grete had to go, it is somehow fitting that she lived
until the day after one of the greatest weekends in the sport of
marathon running,” Mary Wittenberg, president and chief
executive officer of the New York Road Runners, said in a
statement, referring to yesterday’s Boston Marathon and the
London Marathon on April 17. Cyclist Lance Armstrong , who overcame testicular cancer to
win the Tour de France seven times, said he was “sad to hear”
of Waitz’s passing, referring to her as a “good friend and an
incredible athlete,” in a Twitter posting. ‘Amazing Champion’ “Sad, sad news today as Grete Waitz passed away,” Paula Radcliffe, the fastest women’s marathon runner in history,
tweeted. “She was an amazing champion and more amazing
person.” Waitz came to New York in 1978 to celebrate her retirement
and prepare to have children and a teaching career, Waitz said
in a 2008 interview on the New York Road Runner’s website.
“But, instead, I quit my job teaching and never had kids. I
always got excited when I came to New York for the marathon,”
she said. Waitz was appointed a Knight 1st Class of the Royal
Norwegian Order of St. Olav in 2008 by King Harald V. She also
stands as a statue in front of Oslo’s Bislett Stadium and was
pictured on Norwegian stamps in 1997. In 1984, she started the
annual Grete Waitz run for women in Oslo, which went on until
2003. Waitz’s funeral is expected to be held next week and will
be a small private arrangement, according to the wishes of the
athlete, Aanesen said. ‘Brightest Flames’ “One of the brightest flames of the modern athletics era
has been extinguished,” International Association of Athletics
Federations President Lamine Diack said in a statement. “The
dedication, perseverance and fortitude with which Grete carved
out her athletics career on the track, across the country and on
the road is an example to us all, as is the positive way she
tackled the illness that beset her life in recent years.” The family of Samuel Rudin, whose name adorns the winners’
trophies at the New York City Marathon, said that it was
unlikely that anyone would surpass Waitz’s nine victories in the
event. “While she may have been from Norway , Grete Waitz
possessed the true New Yorker’s spirit and determination,” the
family said today in an e-mailed statement. “She will be
greatly missed.” To contact the reporters on this story:
Marianne Stigset at
mstigset@bloomberg.net
Oshrat Carmiel in New York at
ocarmiel1@bloomberg.net . To contact the editor responsible for this story:
Will Kennedy at
wkennedy3@bloomberg.net | ||||||
2011-04-19 00:00:00 UTC | Canadian Inflation Accelerates to Highest Rate in Two Years on Jump in Oil | http://www.bloomberg.com/news/2011-04-19/canadian-inflation-accelerates-to-highest-rate-in-two-years-on-jump-in-oil.html
| B y G r e g Q u i n n | Canada ’s inflation rate accelerated
in March to the fastest in 2 1/2 years, exceeding all economist
forecasts, adding pressure on the Bank of Canada to increase its
policy interest rate in the next three months. Consumer prices rose 3.3 percent from a year earlier after
a 2.2 percent gain in February, Statistics Canada said today in
Ottawa. Prices were up 1.1 percent on a monthly basis, the
fastest since January 1991 when a new federal sales tax was
introduced. The gains exceeded all forecasts in Bloomberg
surveys of 25 economists, which had median estimates of 2.8
percent for annual inflation and 0.6 percent on a monthly basis. The annual report also exceeded the Bank of Canada ’s April
13 forecast that inflation would reach 3 percent by June, driven
by temporary factors such as energy costs and higher provincial
sales taxes. The two-year government bond yield jumped the most
since December after the report and the Canadian dollar rose the
most in seven weeks. “It definitely puts the pressure back on the Bank of
Canada to raise interest rates ,” said Sheryl King, head of
Canada economics at Bank of America Merrill Lynch in Toronto.
“It’s not going to be the end” for inflation pressures, she
said, adding the economy may already be operating at full
capacity, while the central bank predicted last week the economy
wouldn’t be running flat out until the middle of next year. Dollar Jumps The Canadian dollar advanced 0.9 percent to 95.56 cents per
U.S. dollar at 10:36 a.m. in Toronto, from 96.42 yesterday. One
Canadian dollar buys $1.0465. Yields on the two-year Government
of Canada bond jumped 9 basis points to 1.78 percent, the
biggest one-day gain since Sept. 8. The odds of an increase at the next decision May 31
increased to 14.6 percent, according to a Credit Suisse
calculation, from 11 percent yesterday and 9 percent on Apr. 15. “May is still a bit of a stretch” for a move, said David Tulk , chief Canada macro strategist at Toronto-Dominion Bank’s
TD Securities unit. “They will need to use that communique to
shade the market’s perspective towards a hike in July.” The core inflation rate, which excludes eight volatile
items such as gasoline, accelerated to 1.7 percent from a year
earlier, from February’s record low 0.9 percent. Monthly core
prices accelerated to 0.7 percent from 0.2 percent in February.
Economists forecast a core inflation rate of 1.2 percent
annually and 0.2 percent on a monthly basis. Core Inflation Bank of Canada Governor Mark Carney said that “underlying
inflation is subdued” at an April 13 press conference , and that
core inflation would remain below 2 percent until mid-2012
because of slack in the economy and “modest” wage gains. He
also said risks to the inflation outlook were “roughly
balanced.” Energy prices rose 13 percent in March from a year earlier,
and the cost of fuel oil and other fuels jumped 31 percent,
Statistics Canada said today. “In the immediate short term, our top priority is the
rising commodity landscape,” Jerry Fowden, chief executive
officer of beverage maker Cott Corp. (BCB) said on a March 24 earnings
call. “This scale of commodity run up, at the same time as a
broadly weak economy, is almost unprecedented.” High gasoline prices were mentioned several times at a
French-language leadership debate last week in the campaign for
a May 2 election. The average Canadian price of unleaded
gasoline was C$1.25 ($1.30) per liter the week of April 8, up 20
percent from three months earlier. Prime Minister Stephen Harper
said his government’s cut to the federal sales tax has helped
consumers cope with higher gasoline prices, while Bloc Quebecois
leader Gilles Duceppe called for tougher enforcement of
competition laws. Widespread Increases Today’s report showed price gains accelerated in every
major category except for alcohol and tobacco. Clothing and
footwear prices rose 0.9 percent in March from a year earlier,
the first annual increase since November 2009, as stores offered
fewer discounts. Food prices rose 3.3 percent after February’s 2.1 percent
gain as poor weather in the U.S. and Mexico cut supplies of
fresh vegetables. The central bank sets interest rates to keep inflation at
the 2 percent midpoint of a 1 percent to 3 percent target range.
Its quarterly survey of businesses published April 4 found the
share of executives who predicted inflation would advance by
more than 3 percent over the next two years had increased to 15
percent from 3 percent. Statistics Canada also reported today that wholesale sales
fell in February for the first time in seven months and growth
in the agency’s index of leading economic indicators slowed in
March. To contact the reporter on this story:
Greg Quinn in Ottawa at
gquinn1@bloomberg.net . To contact the editors responsible for this story:
David Scanlan at dscanlan@bloomberg.net ;
Christopher Wellisz at
cwellisz@bloomberg.net . | ||||||
2011-04-19 00:00:00 UTC | SABMiller Fourth-Quarter ‘Organic’ Lager Volume Rises 3%, Beats Estimates | http://www.bloomberg.com/news/2011-04-19/sabmiller-fourth-quarter-organic-lager-volume-rises-3-beats-estimates.html
| B y C l e m e n t i n e F l e t c h e r | SABMiller Plc (SAB) , the world’s second-
largest brewer by volume, reported fourth-quarter beer sales
that beat analysts’ estimates, led by growth in Africa and Peru . So-called organic beer volume, which excludes acquisitions
and disposals, rose 3 percent, compared with the 1.5 percent
median estimate of seven analysts surveyed by Bloomberg News.
Full-year growth on the same basis was 2 percent, the maker of
Grolsch and Peroni said today in a statement. “The main area of outperformance is Africa,” Jason Derise, an analyst at UBS AG in London, said today. “They
didn’t give the fourth-quarter figure, but it’s pretty big.” SABMiller, which got its start selling beer to gold
prospectors in 1895, is among brewers looking to emerging
economies to drive growth as sales stagnate in Europe and the
U.S. The London-based company reported full-year volume growth
of 13 percent in Africa, helped by a “strong final quarter” as
sales were boosted by new breweries in Tanzania and Mozambique . Lager volumes in Latin America, where the company gets the
largest share of revenue, increased 1 percent even after a
Colombian tax increase in February 2010 continued to restrict
sales and wet weather stymied growth. Analysts had estimated a
1.5 percent decline. Peru had 10 percent growth for the year. Shares Climb The shares gained as much as 38.5 pence, or 1.8 percent, to
2,229 pence, and traded up 1.4 percent at 2,221.5 pence as of
9:47 a.m. in London , giving the company a market value of about
35.3 billion pounds ($57 billion). Revenue for the year through March 31 rose 5 percent, at
constant exchange rates and excluding acquisitions, the company
said. Raw-material costs were “marginally lower,” although
they increased “moderately” in the second half. Brewers are facing increasing prices for the ingredients to
make their beer, including malting barley. SABMiller had said in
November that it would benefit from lower raw-material costs
this year, albeit at a “more moderate” rate in the second half
compared with the first half of the year. Sales in Europe, SABMiller’s second-largest region, rose 2
percent in the fourth quarter, beating estimates for a 1 percent
increase. Volume benefited from a “weak comparative period due
to prior-year excise increases in Russia and the Czech
Republic ,” the company said. Sales jumped 17 percent in Russia
in the quarter after a 200 percent tax increase in January 2010
hurt beer sales during the same period a year earlier. South Africa The amount of beer sold in South Africa, including the
Castle Lite and Hansa Pilsener brands, was “level” with the
year earlier, the company said. SABMiller competes with
Brandhouse Ltd., a joint venture between Heineken NV and Diageo
Plc, which “continues to make life difficult for SAB in its
home market,” analysts including Andy Smith at MF Global wrote
in a note yesterday. Brandhouse said yesterday it controls about
14 percent of the beer market in South Africa . SABMiller has apportioned a larger share of its marketing
budget to the country, where it has held an average market share
of more than 88 percent over the last year, according to company
spokesman Nigel Fairbrass , who cited internal estimates
including sales in bars, taverns and pubs. The brewer’s sales in South Africa during the same period
last year rose 8 percent as consumers bought more beer due to
the earlier timing of Easter compared with this year. Sales in Asia rose 8 percent in the fourth quarter, aided
by share gains in China , the company said. China represents 20
percent of volume and 2 percent of profit, according to UBS AG. Sales to U.S. retailers by MillerCoors LLC, the company’s
joint venture with Molson Coors Brewing Co., slid 1.4 percent
“in a market which remains challenging,” the company said. To contact the reporter on this story:
Clementine Fletcher in London at
cfletcher5@bloomberg.net To contact the editor responsible for this story:
Celeste Perri at cperri@bloomberg.net | ||||||
2011-04-19 00:00:00 UTC | Madoff Trustee Seeks $43.2 Million for Four Months of Liquidation Services | http://www.bloomberg.com/news/2011-04-19/madoff-trustee-seeks-43-2-million-for-four-months-of-liquidation-services.html
| B y L i n d a S a n d l e r | The trustee liquidating Bernard L. Madoff’s defunct investment firm asked a judge to pay him and
his law firm $43.2 million for four months’ work, bringing total
fees sought in the case to $175.5 million since Madoff’s arrest. Expenses of $1.1 million were claimed by trustee Irving Picard and Baker & Hostetler LLP from Oct. 1 to Jan. 31,
according to a U.S. Bankruptcy Court filing in New York
yesterday. The Madoff case took almost 955 hours of Picard’s
time during the period, charged at $748 an hour, and 116,399
hours of his firm’s time at $371 an hour, according to the
filing. High fees in the liquidations of the jailed Ponzi-scheme
operator’s firm and the Lehman Brothers Holdings Inc. brokerage
might deplete the $2.5 billion fund of the Securities Investor
Protection Corp., according to a March 30 audit report by the
Office of the Inspector General at the Securities and Exchange
Commission. The SEC watchdog recommended “systematic”
inspections of SIPC by the SEC to ensure cost-effective
processing of brokerage customer claims and liquidations. Amanda Remus, a Picard spokeswoman, declined to comment on
the report. In the filing, Picard said he and his lawyers bill
the Madoff estate, not tapping the fund of customer property. “The payment of fees and expenses to the trustee and any
of his counsel has absolutely no impact on recoveries” by
Madoff investors, he said. 1,000 Lawsuits Picard, who has filed more than 1,000 suits seeking money
for the con man’s investors, has recovered more than $7.6
billion, out of about $17 billion in principal lost, according
to his latest calculations. By next month, the trustee will have
determined almost every one of 16,518 claims filed in the case,
according to the filing. Baker & Hostetler said it spent 7,086 hours on
investigations at a cost of $3.1 million in the latest four
months. Administration consumed 7,033 hours, and cost $2.1
million. The trustee’s case against JPMorgan Chase & Co. (JPM) took
1,971 hours, while the Mets owners required 1,660 hours and
customer claims took 4,837 hours. The biggest single expense was $248,944 for translation
costs in the period. Picard has 81 potential international
lawsuits and 232 domestic suits, according to the filing. Online
research cost $166,611 and out-of-town travel cost $202,468, the
law firm reported. Deferred Fees In addition to current fees, Picard asked the judge for
permission to claim about $5.5 million in fees deferred since
Madoff’s arrest in December 2008. Total deferred fees for Picard
and his firm since exceed $23 million, according to the filing.
The trustee asked the judge to reduce deferrals to 10 percent,
from 15 percent, citing “results achieved for the victims of
Madoff’s fraud.” Prior applications for fees since 2008 totaled $132.3
million for Picard and his firm, according to the filing. The main case is Securities Investor Protection Corp. v.
Bernard L. Madoff Investment Securities LLC, 08-ap-1789, U.S.
Bankruptcy Court , Southern District of New York ( Manhattan ). To contact the reporter on this story:
Linda Sandler in New York at
lsandler@bloomberg.net To contact the editor responsible for this story:
John Pickering at
jpickering@bloomberg.net | ||||||
2011-04-19 00:00:00 UTC | Cairn India Has 14.8% of Equity Change Hands in 3 Transactions | http://www.bloomberg.com/news/2011-04-19/cairn-india-has-14-8-of-equity-change-hands-in-3-transactions.html
| B y R a k t e e m K a t a k e y | Cairn India Ltd. (CAIR) , the operator of
the nation’s biggest oil field on land, had about 282.3 million
shares, or 14.8 percent of its equity, change hands in three
transactions on the Bombay Stock Exchange. A total of 277.27 million shares were traded at 331 rupees
($7.41) apiece in two block deals and 5.07 million changed hands
at 335 rupees each, according to data compiled by Bloomberg. Cairn India rose as much as 3 percent to 346.15 rupees and
were at 343.40 rupees at 9:46 a.m. in Mumbai trading. The stock
has increased 3.1 percent this year compared with a 6.9 percent
decline in the benchmark Sensitive Index. Sesa Goa Ltd. (SESA) , a unit of London-listed Vedanta Resources
Plc, started an open offer to Cairn India ’s minority
shareholders on April 11, as part of a plan by the mining
company to buy a majority stake in Cairn India. The deal is
awaiting approval from the Indian government. Petroliam Nasional Bhd., Malaysia’s state oil and gas
producer, also known as Petronas, owns 14.9 percent in Cairn
India. Petronas may sell its entire holding in the open market,
Bloomberg UTV reported April 11, citing unidentified people. Azman Ibrahim, a spokesman for Petronas, and Cairn India
spokesman Manu Kapoor declined to comment on the transactions.
The buyers and sellers in the block deals weren’t immediately
known. To contact the reporter on this story:
Rakteem Katakey in New Delhi at
rkatakey@bloomberg.net To contact the editor responsible for this story:
Amit Prakash at
aprakash1@bloomberg.net | ||||||
2011-04-19 00:00:00 UTC | Eastern Europe Day-Ahead Power Falls Amid Increased Production | http://www.bloomberg.com/news/2011-04-19/eastern-europe-day-ahead-power-falls-amid-increased-production.html
| B y M a r e k S t r z e l e c k i | Day-ahead power prices in eastern
Europe decreased as output rose in the Czech Republic and
exports from Poland were less profitable. Polish electricity for tomorrow fell 1.7 percent to 219
zloty ($78.66) a megawatt-hour, according to Polish power
exchange data compiled by Bloomberg. Czech day-ahead power decreased 3.5 percent to 55 euros
($78.59) a megawatt-hour, according to broker data compiled by
Bloomberg, as output increased from the nuclear plant Dukovany
which restarted two units after an outage. As result, imports of
electricity from Poland were set to drop, data from the power
grid showed. Hungarian electricity, traded on the Budapest-based power
exchange, lost 2.8 percent to 56.45 euros, according to the
bourse’s website. The Czech Republic has 17,625 megawatts of capacity
installed, according to Bloomberg data. The country exported
2,246 megawatts of power to Germany from 12 p.m. to 1 p.m. local
time today, according to Entsoe , the European Transmission
System Operators transparency platform. Domestic demand at that time was nearly 8,500 megawatts,
while about 1,400 megawatts of solar electricity was generated,
according to CEPS AS, the Czech power transmission system
operator. Bloomberg tracks power prices from brokers including GFI
Group Inc., ICAP Plc, Spectron Group Ltd., Tradition and Tullett
Prebon Plc. Brokers handle the majority of trading in Europe’s
electricity markets. To contact the reporter on this story:
Marek Strzelecki in Warsaw at
mstrzelecki1@bloomberg.net To contact the editor responsible for this story:
Steve Voss at sev@bloomberg.net | ||||||
2011-04-19 00:00:00 UTC | U.S. 30-Year Yields Decrease to Almost 4-Week Low on Austerity Prospects | http://www.bloomberg.com/news/2011-04-19/u-s-30-year-yields-decline-to-almost-4-week-low-on-slow-growth-prospects.html
| B y S u s a n n e W a l k e r a n d C o r d e l l E d d i n g s | Treasuries rose, pushing the 30-
year bond yield to the lowest level in almost four weeks, on
speculation any agreement in Congress to curb the nation’s
budget deficit may impede economic growth. Ten-year yields reached a three-week low as Greek bond
yields reached euro-era records amid growing speculation the
country will need to restructure its debt. Treasury Secretary
Timothy F. Geithner said he’s confident U.S. political leaders
will bridge differences on spending. Standard & Poor’s yesterday
lowered the U.S. credit-rating outlook, citing fiscal pressures. “People are thinking about the potential for austerity,
the impact on growth and the possibility of weaker-than-
previously-expected growth numbers in the second half of the
year,” said Dan Mulholland, a Treasury trader in New York at
Royal Bank of Canada, one of 20 primary dealers that trade with
the Federal Reserve . Thirty-year bond yields decreased three basis points, or
0.03 percentage point, to 4.43 percent at 5:01 p.m. in New York,
according to Bloomberg Bond Trader prices. They touched 4.42
percent, the lowest level since March 23, after rising to as
high as 4.49 percent. The price of the 4.75 percent security
maturing in February 2041 gained 14/32, or $4.38 per $1,000 face
amount, to 105 1/4. Ten-year yields fell one basis point to 3.36 percent. They
touched 3.34 percent, the lowest since March 24, after earlier
rising to 3.41 percent. Treasuries fell earlier as stocks gained after U.S. housing
starts increased 7.2 percent in March, Commerce Department data
showed. The Standard & Poor’s 500 Index ended the day up 0.6
percent after declining 0.1 percent earlier. Fed Purchase U.S. debt has returned 0.65 percent this month, after
losing 0.14 percent in the first quarter, according to Bank of
America Merrill Lynch indexes. They gained 5.9 percent in 2010. Treasury yields have fallen on speculation government
budget cuts will slow the economy and encourage the central bank
to avoid raising borrowing costs, said Mohamed El-Erian, chief
executive officer at Pacific Investment Management Co. “Fiscal austerity in the short term damps growth,” El-
Erian said in a radio interview on “Bloomberg Surveillance”
with Tom Keene . “The market is pricing in what policy makers
are going to do. The more fiscal austerity you get, the more
likely the Fed will stay on hold.” The central bank has kept the benchmark interest rate at
zero to 0.25 percent since December 2008 to support the economy. ‘Wake-Up Call’ “People are viewing the outlook change by S&P as a wake-up
call,” said Jason Rogan, director of U.S. government trading at
Guggenheim Partners LLC, a New York-based brokerage for
institutional investors. “You can’t play political games when
it comes to the strength of the economy. It’s too fragile.” Treasuries also rose as Greece ’s fiscal crisis pushed
yields on its two-year notes up to a record 20.7 percent today.
German Finance Minister Wolfgang Schaeuble ’s comments on April
14 that Greece may need to restructure its debt sent bonds
tumbling in Europe ’s debt-strapped nations. “The market is benefiting more from a safety bid because
of what’s going on in Europe,” said Martin Mitchell , head
government bond trader at the Baltimore unit of Stifel Nicolaus
& Co., a St. Louis-based brokerage firm. “It’s the European
peripherals.” The Fed bought $6.68 billion of Treasuries maturing from
January 2014 to February 2015 as part of its program to acquire
$600 billion of U.S. debt through June to spur economic growth.
It will purchase $1 billion to $2 billion of Treasury Inflation
Protected Securities tomorrow maturing from April 2013 to
February 2041. Still Attractive U.S. two-year notes rose earlier as Japanese Finance
Minister Yoshihiko Noda said in Tokyo U.S. debt remains
“attractive” even after S&P lowered the country’s credit
outlook. The rating company, citing rising U.S. budget deficits
and debt, said yesterday there’s “a material risk that U.S.
policy makers might not reach an agreement on how to address
medium-and long-term budgetary challenges by 2013.” “Equities aren’t doing well today, and people don’t want
to make big moves given the shortened week, so Treasuries have
remained bid,” said Paul Horrmann, a broker in New York at
Tradition Asiel Securities Inc., an interdealer broker. “The
market is more worried about equities than Treasuries after the
S&P announcement.” The Securities Industry and Financial Markets Association
recommends that trading in U.S., U.K. and Japanese financial
markets cease at 2 p.m. New York time on April 21 and remain
closed the following day for the Easter holiday weekend. Volume Slides About $241 billion of Treasuries were traded today as of
5:01 p.m., the least since April 11, according to Icap Plc, the
world’s largest interdealer broker. About $347 billion changed
hands yesterday. The full-day average this year is $330 billion. Geithner said he “absolutely” didn’t have to reassure
overseas buyers of U.S. debt after S&P’s statement yesterday.
President Barack Obama began a tour promoting his proposal to
cut long-term budget deficits. “We have an opportunity now over the next two months to
make some real progress,” Geithner said in an interview on
Bloomberg Television today. “What we agree on is putting in
place strong targets for savings, deficit reduction over a
specific time frame with enforceable limits,” he said. A gauge of inflation expectations that the Fed uses to help
determine monetary policy, the five-year, five-year forward
break-even rate, was at 3.13 percentage points, compared with
3.28 percentage points on Dec. 15, a 10-month high. The average
for the past five years is 2.78 percentage points. To contact the reporters on this story:
Susanne Walker in New York at
swalker33@bloomberg.net ;
Cordell Eddings in New York at
ceddings@bloomberg.net To contact the editor responsible for this story:
Robert Burgess at bburgess@bloomberg.net | ||||||
2011-04-19 00:00:00 UTC | Treasury Yields Fall on Austerity View, Pimco's El-Erian Says: Tom Keene | http://www.bloomberg.com/news/2011-04-19/treasury-yields-fall-on-austerity-view-pimco-s-el-erian-says-tom-keene.html
| B y S u s a n n e W a l k e r a n d T o m K e e n e | Treasury yields are at the lowest
level in almost a month on speculation government budget cuts
will slow the economy and encourage the Federal Reserve to avoid
raising borrowing costs, according to Mohamed El-Erian, chief
executive officer at Pacific Investment Management Co. “Fiscal austerity in the short term damps growth,”
El-Erian said in a radio interview on “Bloomberg Surveillance”
with Tom Keene. “The market is pricing in what policy makers
are going to do. The more fiscal austerity you get, the more
likely the Fed will stay on hold.” Standard & Poor’s has put the U.S. government on notice
that it risks losing its AAA credit rating unless politicians
agree on a plan by 2013 to reduce budget deficits and the
national debt. S&P said yesterday there’s a one-in-three chance
the rating may be cut within two years and that its “baseline
assumption” is that Congress and President Barack Obama will
agree on a plan to contain deficits. “It’s unthinkable that the U.S. triple-A rating could be
put on negative outlook,” said El-Erian, 52, whose company in
Newport Beach , California, manages the world’s largest bond
fund. “It’s putting a lot of focus on the need to start moving
on a medium-term fiscal package.” The International Monetary Fund lowered on April 11 its
forecast for U.S. growth this year to 2.8 percent from the 3
percent expansion projected in January, reflecting a gain in oil
prices and the pace of job gains. Treasury Yields Yields on two- and 10-year U.S. Treasuries fell today to
the lowest levels since March 24 on speculation the European
sovereign-debt crisis will get worse. Pimco isn’t interested in buying two-year Greek debt even
at a record yield of more than 20 percent because it does not
offer value, El-Erian said. “This is not yet the time to buy Greece ,” El-Erian said.
“You don’t solve a solvency problem with liquidity. That’s what
Europe has been doing. That just piles new debt on top of old,
and it doesn’t address the issue.” Pimco prefers debt from Brazil and Norway because it
continues to have value, El-Erian said. The company eliminated
U.S. government-related debt including Treasuries from its Total
Return Fund in February. The fund is still not buying
Treasuries, El-Erian said today. The $236 billion Total Return Fund has handed investors a
gain of about 7.2 percent in the past year, beating more than 80
percent of its peers, according to data compiled by Bloomberg.
Treasuries have returned 4.8 percent during that period,
according to Bank of America Merrill Lynch indexes. To contact the reporters on this story:
Susanne Walker in New York at
swalker33@bloomberg.net ;
Tom Keene in New York at
tkeene@bloomberg.net To contact the editor responsible for this story:
Robert Burgess at bburgess@bloomberg.net | ||||||
2011-04-19 00:00:00 UTC | Sartorius First-Quarter Profit Advances to EU10.1 Million | http://www.bloomberg.com/news/2011-04-19/sartorius-q1-unadjusted-consolidated-net-eu10-1-mln-correct-.html
| B y O l i v e r S u e s s | Sartorius AG (SRT) , a German maker of
laboratory scales and filtering equipment, said first-quarter
unadjusted consolidated net profit after minority interests rose
to 10.1 million euros ($14.5 million) from 5.1 million euros. The company confirmed in a statement today its full-year
targets for the fiscal year 2011, and said sales are expected to
grow 6 percent to 8 percent in constant currencies. The
operating earnings margin is expected to rise to about 14
percent, Sartorius said. To contact the reporter on this story:
Oliver Suess in Munich at
osuess@bloomberg.net To contact the editors responsible for this story:
Frank Connelly at fconnelly@bloomberg.net
Edward Evans at eevans3@bloomberg.net | ||||||
2011-04-19 00:00:00 UTC | DirecTV Starts Premium Film Rentals at $29.99 for 48 Hours | http://www.bloomberg.com/news/2011-04-19/directv-starts-premium-rental-service-on-april-21-with-sony-film.html
| B y A n d y F i x m e r | DirecTV, the largest satellite-TV
operator, will offer a 48-hour rental of Sony Corp. (6758) ’s “Just Go
With It” for $29.99 just 10 weeks after the movie’s theatrical
release in the first such service on pay television. Universal Pictures, Warner Bros. and Twentieth Century Fox
will also supply films to the service two months after their
theatrical release, Jade Ekstedt, a spokeswoman for El Segundo,
California-based DirecTV said today in an interview. Studios, which are looking to pay-TV to find new ways to
sell movies and counter shrinking DVD sales, risk alienating
cinema operators such as AMC Entertainment Inc. that have
criticized plans to offer new films so quickly in homes. Regency
Theatres, based in Calabasas, California , will pull “Just Go
With It” from its second-run theaters, where it was among the
top two titles last weekend, said President Lyndon Golin. “We don’t want to show movies that are on TV,” Golin said
in a telephone interview. “We want to protect the movie-going
experience.” DirecTV (DTV) customers, the first to gain access to the premium
offering, will have two weeks to order the movie before it’s
replaced by another title, Ekstedt said. “Just Go With It” was
still in 326 theaters last weekend, according to Box Office
Mojo, an industry website. “Working on an earlier delivery window at a premium price
makes sense” Rich Greenfield , an analyst at BTIG LLC in New
York , said in an interview. The $30 price may be too high, he
said, calling the effort a worthwhile risk in spite of angering
some cinema operators. Maximizing Profit “The studios are looking to maximize profitability, not
keeping all their friends happy all the time,” Greenfield said. Sun Dee Larson, a spokeswoman for Kansas City , Missouri-
based AMC, didn’t respond to an e-mail seeking comment. Regal
Entertainment Group (RGC) , the largest exhibitor, also didn’t respond. “Just Go With It,” a comedy featuring Adam Sandler and
Jennifer Aniston, was released on Feb. 11 and has taken in
$102.3 million in U.S. theaters, according to Box Office Mojo . Regency, which operates in Southern California and Las
Vegas , started showing the movie in second-run locations last
weekend, Golin said. He said his company, part of the National
Association of theater owners, hasn’t spoken directly with Sony. “It’s very substantial for us,” Golin said. “Will our
little company make a difference to Sony? Probably not.” AMC, the second-largest exhibitor behind Knoxville,
Tennessee-based Regal, is seeking a bigger share of the box-
office split with studios to compensate for the expected loss of
sales, said David Joyce, an analyst at Miller Tabak & Co. in New
York. Cannibalization Fears “It remains to be seen whether there would be
cannibalization of the initial box office releases,” Joyce said
in an e-mail. “There would be plenty of ripple effects. Studios
get paid from the premium movie channels typically based on box
office performance.” DirecTV gained 25 cents to $46.10 at 4 p.m. New York time
in Nasdaq Stock Market trading. The shares have gained 15
percent this year. U.S. shares of Tokyo-based Sony rose 46 cents
to $29.71 on the New York Stock Exchange. In the next few months, DirecTV will offer “The Adjustment
Bureau” from Comcast Corp. (CMCSA) ’s Universal Pictures, “Cedar
Rapids” from News Corp. (NWSA) ’s Twentieth Century Fox and “Hall
Pass” from Time Warner Inc. (TWX) ’s Warner Bros., Ekstedt said. All
three are still in cinemas, according to Box Office Mojo. The service will be available only to DirecTV customers
with high-definition tuners equipped with digital video
recorders, Ekstedt said. Once purchased, the films will begin
playing immediately in full HD and surround sound. To contact the reporter on this story:
Andy Fixmer in Los Angeles at
afixmer@bloomberg.net To contact the editor responsible for this story:
Anthony Palazzo at
apalazzo@bloomberg.net | ||||||
2011-04-19 00:00:00 UTC | China Stocks: Anhui Conch, Merchants Securities, Shuanghui, ZTE | http://www.bloomberg.com/news/2011-04-19/china-stocks-henan-shuanghui-merchants-securities-zte.html
| B y B l o o m b e r g N e w s | Shares of the following companies
had unusual moves in China trading. Stock symbols are in
parentheses as of 3 p.m. close. The Shanghai Composite Index, which tracks the bigger of
China’s stock exchanges, fell 58.29 points, or 1.9 percent, to
2,999.04. The CSI 300 Index (SHSZ300) declined 1.9 percent to 3,295.81. Cement stocks: Anhui Conch Cement Co. (600585 CH), China’s
biggest cement maker, dropped 1.6 percent to 38.87 yuan. Gansu
Qilianshan Cement Group Co. (600720 CH) lost 3.2 percent to
20.12 yuan. Huaxin Cement Co. (600801 CH), the Chinese affiliate
of Holcim Ltd., slid 3.2 percent to 48.80 yuan. “There’s concern that the current cement prices won’t be
sustained after the off-peak season for cement consumption
arrives in the summer,” Zhu Jixiang, an analyst at Capital
Securities Corp., said in a phone interview today. China Merchant Securities Co. (600999 CH) slipped 1.9
percent to 19.15 yuan, the most since March 15. The brokerage
said net income fell 13.4 percent from a year earlier to 3.23
billion yuan ($494.5 million) last year. COFCO Tunhe Co. (600737 CH), a producer of ketchup and
beverages, dropped 2.1 percent to 11.43 yuan, the lowest since
April 6. The company reported a net loss of 55.1 million yuan
last year, compared with net income of 268 million yuan in 2009. Henan Shuanghui Investment & Development Co. (000895 CH),
China’s biggest meat processing company,, plunged the 10 percent
daily limit to 70.15 yuan as the stock resumed trading after a
monthlong suspension. The company yesterday confirmed a China
Central Television report that an affiliate bought pigs fed with
a banned additive to induce the growth of lean meat. Jinduicheng Molybdenum Co. (601958 CH), Asia ’s largest
producer of the metal used to harden steel, lost 5.8 percent to
23.47 yuan after saying net income for the first quarter fell 30
percent from the same period last year to 172.6 million yuan. Shenzhen Airport Co. (000089) (000089 CH) slid 2.6 percent to 6.04
yuan, the most since Feb 22. The company said first-quarter net
income fell 6.4 percent from a year earlier to 173 million yuan. Youngor Group Co. (600177 CH), a shirts and suits
manufacturer, dropped 2.3 percent to 12.26 yuan, the most this
month. The company said net income last year fell 18 percent
from the year earlier to 2.67 billion yuan. ZTE Corp. (000063) (000063 CH), the second-biggest phone-equipment
maker, dropped 2 percent to 28.39 yuan after the company had the
recommendation on its Hong Kong-listed shares cut to “hold”
from “buy” at BNP Paribas, which cited the prospect of slower
profit growth. Zhang Shidong. Editor: Richard Frost To contact Bloomberg News staff for this story:
Zhang Shidong in Shanghai at +86-21-6104-3040 or
szhang5@bloomberg.net To contact the editor responsible for this story:
Darren Boey at dboey@bloomberg.net | ||||||
2011-04-19 00:00:00 UTC | Jinan Iron, Laiwu Surge by Daily Limit for Fifth Straight Day | http://www.bloomberg.com/news/2011-04-19/jinan-iron-laiwu-surge-by-daily-limit-for-fifth-straight-day.html
| B y B l o o m b e r g N e w s | Jinan Iron and Steel Co. and Laiwu
Steel Corp. (600102) rose by the 10 percent daily limit in Shanghai for a
fifth consecutive trading day after the companies announced an
amended merger plan. Jinan Iron rose to 5.80 yuan and Laiwu to gained to 12.19
yuan as of 1:31 p.m. local time in Shanghai trading. China’s
benchmark Shanghai Composite Index fell 1.5 percent. The merger plan announced last week is the third attempt by
Jinan Steel to merge with sister company Laiwu Steel after
shareholders blocked the previous plans. Jinan Steel and Laiwu
Steel’s parents were merged to form Shandong Iron & Steel in
March 2008 amid a government push to consolidate steelmakers to
help them compete globally and boost their bargaining power for
raw materials, including iron ore . Penny Peng. Editor: John Liu To contact Bloomberg News Staff for this story:
Penny Peng in Beijing at +86-10-6649-7577 or
ppeng18@bloomberg.net To contact the editor responsible for this story:
John Liu at jliu42@bloomberg.net | ||||||
2011-04-19 00:00:00 UTC | Royal Wedding Spoof Photos, Lehman’s Last Paintings on Sale | http://www.bloomberg.com/news/2011-04-19/royal-wedding-spoof-photos-lehman-s-last-paintings-up-for-sale-art-buzz.html
| B y S c o t t R e y b u r n | London art dealer Ben Brown puts
photos of the Royal Wedding up for sale today. In one, Prince William is leading a conga dance, followed by his bride Kate and
Elton John . In another, the happy couple cut the cake while
Corgi dogs forage for food and Queen Elizabeth looks bored. The spoofs of the April 29 wedding feature lookalikes
photographed by Alison Jackson , who has fooled many people with
her paparazzi-style photos of celebrity doppelgangers, often in
compromising situations. “This is a last-minute pop-up event,” gallery director
Brown said. “It’s poignant to exhibit these before the
wedding.” Large photographs, from editions of three, will be priced
at 15,000 pounds ($24,480). Smaller images, issued in editions
of five, will start at 2,500 pounds. The “Up the Aisle” show runs through May 7 at Ben Brown
Fine Arts, 12 Brook’s Mews, London W1K 4DG. Information: +44-20-
7734-8888 or http://www.benbrownfinearts.com/ Lehman Art Those looking for souvenirs of the global financial crisis
today got one more chance to buy artworks from the corporate
collection of Lehman Brothers Holdings Inc. (LEHMQ) Edinburgh auction house Lyon & Turnbull offered 22
contemporary pieces from the bankrupt bank’s European offices
with a total estimate of as much as 47,000 pounds at hammer
prices. The sale raised 45,425 pounds with fees. Six of the lots
failed to sell. Many of the works on offer were large scale, Nick Curnow,
Lyon & Turnbull’s managing director, said. Estimates ranged from
300 pounds to 8,000 pounds. The top lot was the 2006 photographic piece, “Picture Made
by Hand With the Assistance of Light,” by the U.K.-born artist
Walead Beshty , who now lives in Los Angeles . This sold for
18,750 pounds, beating a high estimate of 8,000 pounds. The
work, which is 6 feet (1.8 meters) high, was made by bending
photographic paper into a sculpture and then exposing it to
light. A 2001 watercolor of a landscape seen through prison bars
by the German painter Guenther Foerg sold for 1,875 pounds,
below an estimate of 3,000 pounds. Once the world’s fourth-biggest investment bank, New York-
based Lehman filed the biggest bankruptcy in U.S. history on
Sept. 15, 2008, with assets of $639 billion. More than $830
billion in claims have been filed against Lehman, which has said
many are duplicates. Sales at Freeman’s Auctioneers in Philadelphia, Sotheby’s (BID)
in New York and Christie’s International in London raised $1.35
million, $12.3 million and 1.6 million pounds, respectively, for
creditors in 2009 and 2010. Pearson Family Paintings and antiques belonging to members of the family
that founded media group Pearson Plc (PSON) are expected to fetch at
least 10 million pounds in auctions this summer. Lord Cowdray will be offering five British portraits at
Christie’s International’s July 5 London auction of Old Master
paintings. Thomas Gainsborough’s “Portrait of Miss Read, Later Mrs.
William Villebois,” is estimated at a record 4 million pounds
to 6 million pounds. A further 1,000 lots including pieces
from Dunecht , the Scottish home of Lord Cowdray’s brother,
Charles Pearson will be auctioned at Cowdray Park, West
Sussex, on Sept. 13-15, the London-based auction house said
today in an e-mailed statement. A 1611 portrait of the Countess of Hertford may fetch 1.5
million pounds. Lord Cowdray will also be selling silver valued
at more than 1 million pounds at Christie’s London on July 7. Cowdray Park , which is now itself up for sale for 25
million pounds, was acquired by Weetman Dickinson Pearson, the
first Lord Cowdray, a Yorkshire-born engineer and oil magnate,
in 1908. The present family is moving to a more manageable house
on the estate, said Christie’s. “This is the most important group of British portraits to
come on the market for 50 years,” the London-based dealer Mark
Weiss said. “The collection was put together in the 1920s and
’30s when a lot of country houses were being sold and the rich
were able to Hoover up the best things.” (Scott Reyburn writes about the art market for Muse, the
arts and culture section of Bloomberg News. Opinions expressed
are his own.) To contact the writer on the story:
Scott Reyburn in London at sreyburn@hotmail.com . To contact the editor responsible for this story:
Mark Beech at mbeech@bloomberg.net . | ||||||
2011-04-19 00:00:00 UTC | Taiwan’s Dollar Retreats After S&P Cuts U.S. Credit Outlook | http://www.bloomberg.com/news/2011-04-19/taiwan-s-dollar-retreats-after-s-p-cuts-u-s-credit-outlook.html
| B y A n d r e a W o n g | Taiwan ’s dollar dropped for a third
day after Standard & Poor’s cut the long-term credit-rating
outlook for the U.S., sapping demand for emerging-market assets. The island’s Taiex index of shares declined 0.9 percent
after New York-based S&P said there’s a one-in-three chance the
AAA credit rating of the U.S. government might be cut within two
years unless policy makers agree on a plan to reduce budget
deficits and the national debt. “The cut in the U.S. credit rating is quite worrying and
has damped risk-taking,” said Ivy Leung, a Taipei-based fixed-
income trader at Polaris Securities Co. Taiwan’s dollar weakened 0.1 percent to NT$29.125 against
its U.S. counterpart as of the 4 p.m. close, according to Taipei
Forex Inc. It earlier touched NT$29.171, the weakest level since
April 13. The local dollar has rallied 6.1 percent over the past
six months, the best performance among the 10 most-traded Asian
currencies. The yield on the 1 percent bond due January 2016, the most-
active government security, was little changed at 1.073 percent,
according to Gretai Securities Market, the island’s biggest
exchange for bonds. To contact the reporter on this story:
Andrea Wong in Taipei at
awong268@bloomberg.net To contact the editor responsible for this story:
Sandy Hendry at
shendry@bloomberg.net | ||||||
2011-04-19 00:00:00 UTC | Southern Copper to Appeal Peru Rejection of Tia Maria Mine | http://www.bloomberg.com/news/2011-04-19/southern-copper-to-appeal-peru-rejection-of-tia-maria-mine-1-.html
| B y A l e x E m e r y | Southern Copper Corp. (SCCO) , said it will
appeal the Peruvian government’s rejection of its $900 million
Tia Maria copper project as it seeks to boost output. The company will seek talks with Peru’s next president when
the person takes office July 28 about the project, Chief
Executive Officer Oscar Gonzalez Rocha said on a conference call
today with analysts. The government rejected an environmental
study for Tia Maria April 8, saying it was “unviable.” “We’re going to insist with the new government as soon as
it takes its place,” Gonzalez said. “In case we can’t get the
Tia Maria project underway, we’ll have $350 million worth of
equipment to be used in different areas of Mexico and Peru .” Southern Copper is counting on its Tia Maria mine to help
double the company’s annual output to as much as 1 million
metric tons within five years. Peru’s Energy & Mines Ministry
canceled the project after farmers’ protests left three dead in
the southern Andes earlier this montb. Presidential candidates Ollanta Humala and Keiko Fujimori
face each other in a June 5 runoff. Southern Copper rose 0.4 percent to $35.885 at 1:40 p.m. in
New York Stock Exchange composite trading. The stock has dropped
27 percent this year. To contact the reporter on this story:
Alex Emery in Lima at
aemery1@bloomberg.net To contact the editor responsible for this story:
Dale Crofts at dcrofts@bloomberg.net | ||||||
2011-04-19 00:00:00 UTC | Fiat, Ford Lead European Car Sales Drop as Consumers Hold Back on Buying | http://www.bloomberg.com/news/2011-04-19/fiat-ford-lead-european-car-sales-drop-as-consumers-hold-back-on-purchase.html
| B y T o m m a s o E b h a r d t | Fiat SpA (F) , Ford Motor Co. (F) and
Renault SA (RNO) led a drop in European car sales for the 11th time in
the last 12 months as consumers shunned buying vehicles. Registrations in the region fell 4.7 percent in March to
1.6 million vehicles, the European Automobile Manufacturers’
Association said today in a statement. Fiat sales plunged 20
percent, Ford dropped 16 percent and Renault shed 14 percent. “Fiat, Ford and Renault are suffering most from the end of
government incentives, whose major effects ended in March,”
said Gian Primo Quagliano, president of Centro Studi Promotor GL
Events SpA research group in Bologna, Italy . “We expect the
trend to reverse from April.” European car deliveries have declined every month except
one in the last year after the expiration of government cash-
for-clunker programs damped demand. Consumers are also holding
back spending as Europe battles a debt crisis. Portuguese and
Greek government bonds slumped yesterday, pushing two- and 10-
year yields to euro-era records. Auto registrations fell last month by 28 percent in Italy,
29 percent in Spain and 7.9 percent in the U.K., the Brussels-
based manufacturers’ association, or ACEA, said . Demand
increased 11 percent in Germany and 6.1 percent in France . Growth at Volkswagen Volkswagen AG (VOW) , Europe’s biggest carmaker, benefited from
the sales rebound in its German home market as the region’s
largest economy grows. The VW group recorded a 4 percent
European sales increase last month to 346,817 vehicles. VW’s
market share increased to 21.6 percent from 19.8 percent a year
earlier. Fiat, which also runs Chrysler Group LLC, continued to shed
market share, falling to 6.7 percent from 7.9 percent. Chief
Executive Officer Sergio Marchionne said earlier this month he
needs to give more attention to Turin, Italy-based Fiat’s
European operations, which he acknowledged have suffered while
the Chrysler integration has consumed so much time. Marchionne postponed model introductions, including an
updated Panda compact, until the second half, when he expects a
recovery of Europe’s car market. Fiat will offer a total of five
new cars this year, compared with nine in 2012 and 11 in 2013. European sales by Dearborn, Michigan-based Ford dropped
16 percent last month to 142,789 vehicles. Renault, based in
Boulogne-Billancourt, France, lost 14 percent to 141,711 cars.
Its French peer PSA Peugeot Citroen, Europe’s second-largest
automaker, sold 204,347 vehicles, 6.9 percent fewer than a year
earlier. Luxury Brands’ Targets Luxury carmakers, including Volkswagen’s Audi division,
Bayerische Motoren Werke AG (BMW) and Daimler AG (DAI) ’s Mercedes-Benz
brand, which didn’t benefit as much from incentives targeted at
smaller and more fuel-efficient cars, are aiming for record
global sales this year. European registrations by Audi rose 7.4
percent last month and BMW excluding the Mini marque gained 3.5
percent. Sales by Mercedes-Benz fell 0.6 percent. Industrywide sales have declined in the region for the last
three years, dropping to 13.8 million vehicles in 2010 from 16
million in 2007, the last year that deliveries gained, according
to ACEA figures. To contact the reporter on this story:
Tommaso Ebhardt in Milan at
tebhardt@bloomberg.net To contact the editor responsible for this story:
Chad Thomas at cthomas16@bloomberg.net . | ||||||
2011-04-19 00:00:00 UTC | Cricket Governing Body May Scrap Plan to Cut Teams for 2015 World Cup | http://www.bloomberg.com/news/2011-04-19/cricket-governing-body-may-scrap-plan-to-cut-teams-for-2015-world-cup.html
| B y T a r i q P a n j a | Cricket’s governing body will
consider reversing its decision to limit participants for the
2015 World Cup to its 10 full members after complaints from
national associations. The International Cricket Council’s executive board voted
earlier this month to reduce the event’s participants to only
the 10 Test-playing members. The 2011 World Cup, won by India on
April 2, had the 10 teams and four lower-ranked squads that
don’t play the longer form of the game. While none of the lower-ranked nations made it to the
quarterfinals, Ireland had one of the biggest upsets in World
Cup history. It beat England after chasing down a record victory
target of 327. The other second-tier members at the tournament
were Canada, Kenya and the Netherlands. “I have given this matter further serious thought and will
request the board consider this topic once more,” ICC President
Sharad Pawar said in a statement. “I can understand the views
of the associates and affiliates and ICC will seek to deal with
this issue in the best way possible.” The ICC said a final decision about the composition of the
teams for the tournament in Australia will be taken at its
annual conference in Hong Kong in June. It also agreed to have a 10-team competition at the 2019
World Cup in England, although it’s unclear whether that will
change. The ICC had said participants for that event would be
determined through the results of qualification matches. To contact the reporter on this story:
Tariq Panja in London on at
tpanja@bloomberg.net To contact the editor responsible for this story:
Christopher Elser at
celser@bloomberg.net | ||||||
2011-04-19 00:00:00 UTC | Hamas Kills Suspect Wanted After Murder of Italian Hostage | http://www.bloomberg.com/news/2011-04-19/hamas-kills-suspect-wanted-after-murder-of-italian-hostage.html
| B y S a u d A b u R a m a d a n | Hamas security forces in the Gaza
Strip said a member of an al-Qaeda inspired group died and two
others were injured as they attempted to arrest them for
allegedly abducting and killing an Italian activist, the Hamas-
controlled interior ministry said. Vittorio Arrigoni, an activist from the pro-Palestinian
International Solidarity Movement, was found dead in the
northern Gaza Strip on April 15. The search for his killers is
over, the ministry said in a statement sent by text message. “Abdel Rahman al-Brizar, who holds the Jordanian
nationality, threw a bomb at his two colleagues and then he shot
himself dead,” it said. “One of his colleagues was seriously
injured and the other was lightly injured,” it said. Hamas security forces had surrounded the three members of
the Islamist Salafist group Al-Jihad Wal-Tawhid in a house in
Nuseirat refuge camp in the central part of the Gaza Strip, it
said. Three security officers and one child were injured in the
exchange of fire, while the owner of the house was detained by
Hamas, the statement said. Arrigoni had been active in the Palestinian cause for
almost 10 years and stayed on in Gaza after participating in one
of the aid flotillas trying to break Israel ’s embargo a year
ago, Anna Stevens, a colleague, said by phone from the group’s
office in Ramallah, on April 15. A video posted on YouTube on April 14 showed a blindfolded
man and a leaflet from a group identifying itself as a Jihadi
Salafi movement, demanding that Hamas release members held in
Gaza jails in return for the activist. It also said it would
execute the hostage if its demands were not met within 30 hours.
The authenticity of the video couldn’t be confirmed. Hamas fought with members of Jihadi Salafi, which says it
was inspired by al-Qaeda, in 2009 and 22 people were killed in
the clashes. Hamas has run the Gaza Strip since 2007 when it
seized control of the territory, ending a partnership government
with Palestinian Authority President Mahmoud Abbas , after
winning parliamentary elections the previous year. To contact the reporter on this story:
Saud Abu Ramadan in Jerusalem at
sramadan@bloomberg.net To contact the editor responsible for this story:
Andrew J. Barden at
barden@bloomberg.net | ||||||
2011-04-19 00:00:00 UTC | Lufthansa to Start Trading EU Emission Permits on European Energy Exchange | http://www.bloomberg.com/news/2011-04-19/lufthansa-to-start-trading-eu-emission-permits-on-european-energy-exchange.html
| B y E w a K r u k o w s k a | Deutsche Lufthansa AG (LHA) , Europe ’s
second-biggest airline, will begin trading emission rights on
the European Energy Exchange AG as it prepares to join the
world’s largest greenhouse gases cap-and-trade program. EEX, continental Europe’s biggest energy trading platform,
said in a statement today that it admitted Lufthansa as the
first airline to trade European Union carbon-dioxide permits
directly on the spot and derivatives market on the exchange. “Lufthansa’s admission to exchange trading on EEX shows
that the company is well prepared for this,” Oliver Maibaum,
managing director of the Leipzig, Germany-based exchange, said
in the statement. Airlines will be the second-largest sector in the EU
emissions-trading system, after power generators. Aviation joins
next year with a carbon-dioxide limit of 213 million metric
tons, falling to 208.5 million tons in 2013. The EU emissions
program, including more than 11,000 utilities and manufacturers,
requires companies that exceed their CO2 quotas to buy spare
permits from businesses that emit less or pay a fine. EU permits for delivery in December dropped 0.5 percent to
16.58 euros as of 12:01 p.m. in London and were 16 percent up
this year. The EU emissions trading system is known as the ETS. Discharges Doubled The EU decided in 2008 that flights to and from the bloc’s
airports should be added to the ETS after airline discharges in
Europe doubled over two decades. Under the legislation, 82
percent of the emission allowances making up the airline-
industry cap will be allocated for free, and 15 percent will be
auctioned. The remaining 3 percent will be put into a special
reserve for later distribution to fast-growing airlines and new
entrants to the system. Permits for this decade will be handed out based on the
efficiency of carriers in 2010, a year when fuel prices surged
and Icelandic volcano ash, freezing weather and labor strikes
disrupted travel. The EU said it has no plans to change the
benchmarking year, a step that would require amending the law. The EU will decide by Sept. 30 on the number of allowances
to be auctioned, to be distributed for free and to be allocated
to the special reserve. Member states should use the revenues
from the auctions of permits to tackle climate change . Roundtrip air fares within Europe may rise from 1.80 euros
to 9 euros as a result of the new restrictions, the EU said last
month. A roundtrip flight from Brussels to New York at current
carbon prices of around 15 euros could cost an additional 12
euros, it estimated. To contact the reporters responsible for this story:
Ewa Krukowska in Warsaw at
ekrukowska@bloomberg.net To contact the editor responsible for this story:
Stephen Voss at sev@bloomberg.net | ||||||
2011-04-19 00:00:00 UTC | Obama Tells Backers He’s Committed to Immigration Overhaul | http://www.bloomberg.com/news/2011-04-19/obama-to-meet-with-bloomberg-schwarzenegger-on-immigration-laws.html
| B y N i c h o l a s J o h n s t o n | President Barack Obama today told
supporters of an overhaul of U.S. immigration laws that he
remains committed to their goals, according to participants in a
meeting on the issue. “He will not let this issue go away,” Eric Garcetti,
president of the Los Angeles City Council, said after attending
the meeting. Obama met for about an hour at the White House with
business, political, religious and law enforcement officials to
discuss ways to revamp immigration laws. The president “reiterated his commitment to comprehensive
immigration reform that both strengthens security at our borders
while restoring accountability to the broken immigration
system,” according to a White House statement. New York Mayor Michael Bloomberg and former California
Governor Arnold Schwarzenegger , along with Garcetti, were among
public officials invited. Bloomberg is the majority owner of
Bloomberg LP, the parent of Bloomberg News. Others invited included Cargill Inc. Chief Executive
Officer Greg Page, Facebook Inc. Chief Operating Officer Sheryl Sandberg, AFL-CIO President Richard Trumka , and former Florida
Republican Senator Mel Martinez, who works at JPMorgan Chase &
Co. (JPM) , according to a White House statement. Obama was a supporter of an overhaul of U.S. immigration
laws when he was a U.S. senator, and he has continued to push
for new legislation as president. Obama’s Approach The president backs an approach that includes new efforts
to secure the nation’s borders, hold businesses accountable for
employing illegal workers and create a way for immigrants in the
country illegally to gain legal status while also allowing new
workers to come to the U.S., according to the White House
statement. The White House said Obama urged participants at the
meeting to take a public role advocating for new immigration
legislation and “lead a constructive and civil debate on the
need to fix the broken immigration system.” “Immigration reform is something America needs,” the
Reverend Al Sharpton, president of the New York-based National
Action Network civil rights group and a meeting participant,
said after the session. To contact the reporter on this story:
Nicholas Johnston in Washington at
njohnston3@bloomberg.net To contact the editor responsible for this story:
Mark Silva at
msilva34@bloomberg.net | ||||||
2011-04-19 00:00:00 UTC | ECB Must Avoid Falling Behind the Curve, Wellink Tells FTD | http://www.bloomberg.com/news/2011-04-19/ecb-must-avoid-falling-behind-the-curve-wellink-tells-ftd.html
| B y R a i n e r B u e r g i n | European Central Bank Governing
Council Member Nout Wellink said policy makers must stay “very
alert” to avoid being “behind the curve,” Financial Times
Deutschland reported, citing an interview. “We’re not behind the curve yet, but we’re also not much
ahead,” the newspaper quoted Wellink as saying. “There are
many reasons to monitor the situation closely and act
immediately if necessary.” Wellink also said debt sustainability analyses for Greece
show that the country can restore its public finances without a
restructuring. Countries such as Greece made mistakes in the
past and owe it to themselves to solve their problems, he said. To contact the reporter on this story:
Rainer Buergin in Berlin at
rbuergin1@bloomberg.net To contact the editor responsible for this story:
James Hertling at jhertling@bloomberg.net | ||||||
2011-04-19 00:00:00 UTC | EDF’s Nuclear Power Wholesale Price Set at $60 a Megawatt-Hour From 2012 | http://www.bloomberg.com/news/2011-04-19/edf-s-nuclear-power-wholesale-price-set-at-60-a-megawatt-hour-from-2012.html
| B y T a r a P a t e l | Electricite de France SA will be
able to sell nuclear power to competitors at a wholesale price
of 42 euros ($59.8) a megawatt-hour starting Jan. 1, 2012,
Industry Minister Eric Besson said, matching the price the
company had sought. The price, fixed by the government under a law aimed at
overhauling the French power market, Europe ’s second-biggest
after Germany , is higher than a rate of 35 euros a megawatt-hour
backed by GDF Suez SA, the atomic utility’s biggest rival. “This is not about favoring EDF or penalizing GDF,”
Besson said in an interview on Europe 1 radio. “It’s about
securing supplies for the French and easing things for EDF,
which is a major company for French electricity, and takes into
account preemptively the work EDF will need to undertake
following Fukushima.” The power law, known as Nome and passed by French
parliament last year, aims to open up the electricity market by
forcing EDF, operator of the country’s 58 reactors and dominant
supplier, to sell as much as a quarter of its output to
competitors such as GDF Suez. (GSZ) The wholesale price will determine
whether rivals can compete in France’s regulated market. The law is due to take effect July 1, when EDF can charge
rivals 40 euros a megawatt-hour, before it’s raised to 42 euros.
The legislation was aimed at avoiding European Commission
sanctions that could have resulted in fines for EDF. EDF shares rose as much as 4.3 percent in Paris trading.
They were 3.8 percent higher at 27.65 euros as of 9:07 a.m. Champsaur Report The French government asked for a report by Paul Champsaur,
architect of the overhaul, to determine how to set the wholesale
price. The Champsaur report had recommended a range of between
38 euros and 40 euros a megawatt-hour. EDF Chief Executive Officer Henri Proglio has said the
company’s production costs are 45 euros a megawatt-hour and the
utility based 2011 financial targets on obtaining government
approval to sell wholesale nuclear power at 42 euros a megawatt-
hour. The country’s energy regulator said at the start of the
year the price could range from 38.50 euros a megawatt-hour to
more than 42 euros. Proglio has repeatedly warned that a price lower than 42
euros a megawatt-hour would amount to a “fire sale” and the
“pillage” of EDF. GDF Suez Chief Executive Officer Gerard Mestrallet has said this level would open France up to sanctions
from the European Commission. EDF’s share price fell to a two-year low this month
following a government announcement to cap electricity price
increases and uncertainty about the planned market overhaul. The
utility’s shares have also been hurt by the possibility that the
Japanese nuclear disaster at the Fukushima Dai-Ichi nuclear
plant will hurt the expansion worldwide of the energy and force
EDF to make expensive safety modifications on existing reactors. To contact the reporter on this story:
Tara Patel in Paris at
tpatel2@bloomberg.net To contact the editor responsible for this story:
Will Kennedy at
wkennedy3@bloomberg.net | ||||||
2011-04-19 00:00:00 UTC | Chicago Gasoline Gains After Exxon Joliet Refinery Unit Trips | http://www.bloomberg.com/news/2011-04-19/chicago-gasoline-gains-after-exxon-joliet-refinery-unit-trips.html
| B y P a u l B u r k h a r d t | Chicago gasoline strengthened after
Exxon Mobil Corp. had an upset associated with a fluid catalytic
cracker at its Joliet refinery in Illinois. The unit tripped yesterday because of a mechanical failure,
according to a filing with the Illinois Emergency Management
Agency. “It was the FCC that was involved in the operational
upset,” said Kevin Allexon, an Exxon spokesman. The discount for conventional, 87-octane gasoline in
Chicago narrowed 1.5 cents to 3.75 cents a gallon versus futures
traded on the New York Mercantile Exchange at 12:50 p.m.,
according to data compiled by Bloomberg. Prompt delivery fell
1.39 cents to $3.1864 a gallon. Marathon Oil Corp. (MRO) reported a unit upset yesterday at its
Robinson refinery in Illinois , according to a filing with state
regulators. Conventional, 87-octane gasoline in the Midwest, or Group
3, narrowed its discount 0.63 cent to 9 cents a gallon. The discount for conventional, 87-octane gasoline in the
Gulf Coast widened 1 cent to 13.5 cents a gallon. Prompt
delivery fell 3.33 cents to $3.0945 a gallon. The discount for the same fuel in New York Harbor increased
0.5 cent to 9.75 cents a gallon. To contact the reporter on this story:
Paul Burkhardt in New York at
pburkhardt@bloomberg.net . To contact the editor responsible for this story:
Dan Stets at
dstets@bloomberg.net . | ||||||
2011-04-19 00:00:00 UTC | Transneft Says Higher Dividends Would Deprive Orphans, Sick | http://www.bloomberg.com/news/2011-04-19/transneft-says-increased-dividends-would-deprive-orphans-sick.html
| B y J a s o n C o r c o r a n a n d H e n r y M e y e r | OAO Transneft, Russia ’s monopoly
pipeline operator, says paying more dividends would curtail aid
to orphans and other charity work. Transneft made 3.2 billion rubles ($112 million) of
charitable contributions in 2009, 7.8 times more than the
dividends it paid to private investors, according to the
company’s financial reports. That spurred preferred shareholders
such as Prosperity Capital Management Ltd. and East Capital to
demand more information as they seek a larger slice of profit. Higher dividends would reduce money destined for “the
sick, supporting sport, renovating churches and monasteries,”
Moscow-based Transneft said in a document dated March 16 and
filed as part of the company’s appeal against a ruling requiring
it to release board minutes. Alexey Navalny, a shareholder activist who filed the suit
to uncover details of the state-owned company’s philanthropy,
put the appeal on his website today. Russian President Dmitry Medvedev seeks to improve safeguards for minority shareholders
to lure foreign capital and plans to set up a $10 billion fund
to co-finance international investment in Russian companies. “It’s a nice piece of Soviet propaganda,” said Alexander Branis, chief investment officer at Stockholm-based Prosperity,
which manages about $5.6 billion of assets. “But its charter
says the company’s main aim is to make money for its
shareholders, not raise money for worthy causes.” Cutting Dividends Transneft cut dividends to private shareholders by 75
percent from 2003 to 2009 at a time when net income increased
fourfold to 121.8 billion rubles, according to the company’s
financial statements. “I understand the desire of all shareholders to get more
dividends,” Igor Dyomin, a Transneft spokesman, said in an
April 15 phone interview. “I don’t know if holders of preferred
stock will get major dividends if we stop helping orphaned or
sick children.” Transneft’s preferred shares trade at 2.01 times last
year’s earnings per share, according to Bloomberg data. The
shares trade on the ruble-denominated Micex Index, where the
average is 9.2 times earnings. The shares gained 24 percent in
the past 12 months compared with 30 percent for the index. “One of the flagship Russian state companies says in all
seriousness, ‘Why should it pay foreigners dividends?” Navalny
said in an interview. “How can they talk about improving the
investment climate and creating an international financial
center in Moscow after that?” 16 Orphanages Moscow’s Ninth Arbitration Appeal Court is scheduled to
hear Transneft’s appeal tomorrow. The court’s press service said
the filing will be made public during the hearing. Dyomin said
he couldn’t confirm the authenticity of the document released by
Navalny because he isn’t involved in the lawsuit. He didn’t
respond to a request to release the company’s court filing. Transneft finances 16 orphanages in Moscow alone, Dyomin
said. The court filing didn’t provide further details of the
charitable work, and Dyomin didn’t respond to a request for more
information on these activities. Prime Minister Vladimir Putin called on Dec. 29 for an
investigation into allegations of a $4 billion fraud during
construction of an oil pipeline across eastern Siberia involving
Transneft. The claims were published by Navalny, a Moscow-based
lawyer who owns stock in the monopoly and about 20 other blue-
chip stocks to give him standing to campaign for improved
corporate governance. Transneft denied any wrongdoing. German Gref , chief executive officer of state-controlled
OAO Sberbank, is seeking to double the proportion of profit paid
to shareholders in Russia’s largest lender to as much as 25
percent over the next several years, the Wall Street Journal
reported April 15, citing an interview. Sberbank, VTB State-controlled VTB Group paid dividends of 6.07 billion
rubles on 2009 earnings, or 25 percent of profit. The
supervisory board of Russia’s second-largest bank may recommend
more than 6 billion rubles in 2010 dividends, Interfax reported
April 18, citing an unidentified person close to the board. “The trend at state-controlled companies, as evidenced by
Sberbank and VTB, is for higher dividends because all
shareholders, including the government, want to get returns in
the form of dividends,” Branis said. Pipeline operators typically pay small dividends, Dyomin
said. “We pay regular dividends, but they aren’t very high,”
he said. “Look at other companies.” Transneft has a 12-month dividend yield of 0.62 percent,
according to data compiled by Bloomberg. Calgary-based Pembina
Pipeline Corp., which operates oil and gas pipelines in western
Canada , pays 6.81 percent, and San Antonio-based NuStar Energy
LP, with 8,417 miles of pipelines, pays 6.49 percent. ‘Proper Company’ Jacob Grapengiesser, a fund manager at Stockholm-based East
Capital, and Per Brilioth, a managing director at Vostok Nafta,
also based in the Swedish capital, didn’t return calls and e-
mails seeking comment. Prosperity and East Capital, the two largest Russia mutual
fund managers, and commodity investment manager Vostok Nafta
wrote to Putin in August asking him to sell 25 percent of
Transneft’s common stock, all of which is held by the state. The
preferred shares carry no voting rights . Giving investors a say would make Transneft a “proper
company” with shareholder meetings and analyst calls, and
improve its price-earnings ratio, according to Prosperity. To contact the reporters on this story:
Jason Corcoran at
Jcorcoran13@bloomberg.net
Henry Meyer in Moscow at
hmeyer4@bloomberg.net | ||||||
2011-04-19 00:00:00 UTC | Ecolab’s Bearish Options Trades Soar to Record Before Earnings | http://www.bloomberg.com/news/2011-04-19/ecolab-s-bearish-options-trades-soar-to-record-before-earnings.html
| B y J e f f K e a r n s | Ecolab Inc. (ECL) ’s bearish options
trading rose to a record and was more than 538 times the four-
week average after a single transaction before the maker of
cleaning chemicals for restaurants reports results April 26. Almost 39,400 puts to sell the stock changed hands as of
3:35 p.m. in New York, compared with 150 calls to buy. An
investor bought 19,000 May $50 puts while selling the same
number of May $45 puts in a strategy known as a put spread,
which cuts the cost of the trade by capping potential gains. The
shares rose 1.3 percent to $51.39. “The investors are likely concerned about raw-material
cost pressure into earnings,” according to a report from
Susquehanna Financial Group LLLP. “To put this trade in
perspective, this investor would be able to sell 1.9 million
shares if share prices fell between $50 and $45 heading into May
expiration, which represents over 0.8 percent of shares
outstanding.” To contact the reporter on this story:
Jeff Kearns in New York at
jkearns3@bloomberg.net . To contact the editor responsible for this story:
Nick Baker at nbaker7@bloomberg.net . | ||||||
2011-04-19 00:00:00 UTC | Cebu, Hyundai, LG Chem, Samsung, TSMC, ZTE: Asia Ex-Japan Equity Preview | http://www.bloomberg.com/news/2011-04-19/cebu-hyundai-samsung-tsmc-zte-asia-ex-japan-equity-preview.html
| B y B e r n i M o e s t a f a | The following companies may have
unusual price changes today in Asian trading, excluding Japan .
Stock symbols are in parentheses, and share prices are from the
previous close, unless noted otherwise. Cebu Air Inc. (CEB) : The Philippine budget carrier flew
2.8 million passengers, an increase of 12 percent, in the first
quarter, putting it on track with a target of 12 million
travelers this year, the company said in a statement. The first-
quarter growth was driven by international traffic, which rose
32 percent, it said. Cebu Air gained 1 percent to 77.70 pesos. Hyundai Motor Co. (005380) (005380 KS): The Beijing venture of South
Korea’s largest automaker is studying whether to build a fourth
plant in the Chinese capital, Noh Jae Man, president of the
venture, said at the Shanghai Auto Show. Hyundai Motor slid 0.2
percent to 225,500 won. LG Chem Ltd. (051910) (051910 KS): South Korea’s biggest chemicals
maker posted a 27 percent gain in first-quarter profit to 656.6
billion won ($601 million), beating estimates, as economic
recovery in Asia and an earthquake in Japan boosted demand. The
company is also preparing to move into the polysilicon business,
Chief Executive Officer Kim Bahn Suk told investors in Seoul .
The stock gained 1.4 percent to 520,000 won. LG Electronics Inc. (066570) (066570 KS): The company’s home-
appliance division is seeking to diversify its chip suppliers as
the March 11 earthquake in Japan may make supplies unstable, the
South Korean company said in an e-mailed statement, confirming a
Wall Street Journal report. The division depends on Japanese
makers for 70 percent to 80 percent of its chips, LG said. LG
Electronics rose 4.5 percent to 105,000 won. Manila Mining Corp. (MA) : The Philippine company’s talks
with Philex Mining Corp. (PX) for a venture on the Kalayaan
mine project is “progressing well” and an agreement may be
concluded “soon,” Manila Mining Chairman Felipe Yap told
shareholders. Manila Mining Class A shares, which are reserved
for Filipinos, rose 2.9 percent to 3.5 centavos. Manila Mining
Class B shares (MAB PM), which have no ownership restrictions,
increased 5.7 percent to 3.7 centavos. Philex, the nation’s
biggest metals producer, gained 3.5 percent to 17.06 pesos. Samsung Electronics Co. (005930 KS): Seagate Technology Plc
will buy Samsung’s computer hard-disk drive business in a cash
and stock deal valued at $1.38 billion as part of an alliance
between the two companies. Samsung and Seagate will enter into
supply and cross-licensing agreements, the two companies said in
a joint statement. Samsung, the world’s largest maker of
televisions and flat screens, rose 0.9 percent to 875,000 won. SM Prime Holdings Inc. (SMPH) : The largest Philippine
mall developer said first-quarter profit increased 12 percent to
2.12 billion pesos ($48.9 million) from a year earlier. The
stock was unchanged at 11.70 pesos. Taiwan Semiconductor Manufacturing Co. (2330 TT): The
world’s largest contract chipmaker bought NT$2.91 billion of
equipment from three suppliers, TSMC said in statements to the
exchange. The company purchased NT$503.7 million of gear from EZ
Semiconductor Inc., NT$913.3 million from Lam Research
International Sarl and NT$1.49 billion from Applied Materials
South East Asia Pacific Ltd., the Hsinchu Taiwan-based company
said. TMSC retreated 1.3 percent to NT$68.10. ZTE Corp. (000063) (000063 CH): The company’s first-quarter net
income rose 15.9 percent from a year earlier to 127.3 million
yuan ($19.5 million), according to a statement on the Shenzhen
Stock Exchange website. ZTE, China ’s second-biggest phone
equipment maker, fell 2 percent to 28.39 yuan. To contact the reporter on this story:
Berni Moestafa in Jakarta at
bmoestafa@bloomberg.net To contact the editor responsible for this story:
Darren Boey at dboey@bloomberg.net | ||||||
2011-04-19 00:00:00 UTC | India Solar Projects Face Rising Costs, Deadline Crunch, Moser Baer Says | http://www.bloomberg.com/news/2011-04-19/india-solar-projects-face-rising-costs-deadline-crunch-moser-baer-says.html
| B y N a t a l i e O b i k o P e a r s o n | Some companies may miss deadlines
to build India ’s first solar power plants this year while others
face rising costs as they compete for contractors and labor, the
second-biggest solar-cell maker in India said. Developers are having trouble obtaining financing from
banks wary of lending to the new sector, which delays them from
starting on their projects, K.N. Subramaniam, chief executive
officer of the solar systems division of Moser Baer India Ltd. (MBI) ,
said in an interview. “If everybody is going to compete at the same time for
resources, for contractors, for mechanical fabrication or labor,
the cost is bound to go up,” said Subramaniam, who heads the
engineering, procurement and construction activities of Moser
Baer’s solar unit. “They may not be available for completion in
time.” India, which averages 300 sunny days a year, has awarded
licenses to build 1,579 megawatts of capacity under two solar
programs that aim to create one of the world’s biggest markets
for producing electricity from the sun. Most of that capacity
needs to be completed this year or developers risk fines. Developers need to select contractors by May 31 if they’re
to complete their projects on time, he said. Moser Baer is in
talks for some of those contracts, he said, declining to
elaborate. The central government awarded licenses in December for 620
megawatts to be built under its national Solar Mission program,
which calls for 20,000 megawatts of solar power capacity by
2022. Gujarat, under its own state-level program, has awarded an
additional 959 megawatts of capacity. India’s currently has less than 18 megawatts of grid-
connected solar power, according to the Ministry of New and
Renewable Energy . To contact the reporter on this story:
Natalie Obiko Pearson in Mumbai at
npearson7@bloomberg.net . To contact the editor responsible for this story:
Reed Landberg at landberg@bloomberg.net . | ||||||
2011-04-19 00:00:00 UTC | GREATER CHINA DAYBOOK: Banks Told to Examine Property Loans, Vanke Profit | http://www.bloomberg.com/news/2011-04-19/greater-china-daybook-banks-told-to-conduct-new-stress-tests.html
| B y B l o o m b e r g N e w s | China ’s banking regulator Liu
Mingkang told the nation’s commercial banks to start a new round
of stress tests on their property loans. Banks should strengthen
the management of property lending and credit to local
government financing vehicles, Liu said after a meeting of th
China Banking Regulatory Commission, according to a statement
posted on the agency’s website. Yuan forwards strengthened the most in a week after
People’s Bank of China adviser Xia Bin said China will not rule
out a one-off revaluation of the currency. In an interview
published on the Sina.com website, Xia also said China should
widen the yuan’s trading band. China Vanke Co., the country’s biggest developer by market
value, said its first-quarter net income rose 7 percent from a
year earlier to 1.21 billion yuan ($185 million). The impact of
the government’s curbs on the real-estate industry is “clear”
as transactions in the market have slowed, the company said in a
statement to the Shenzhen stock exchange. To contact the editor responsible for this story:
Nerys Avery at navery2@bloomberg.net | ||||||
2011-04-19 00:00:00 UTC | China Vanke’s First-Quarter Profit Increases 7% on Sales in Smaller Cities | http://www.bloomberg.com/news/2011-04-19/china-vanke-s-first-quarter-profit-increases-7-on-sales-in-smaller-cities.html
| B y B l o o m b e r g N e w s | China Vanke Co., the country’s
biggest developer by market value, said first-quarter profit
rose 7 percent as it sold more homes in smaller cities that were
shielded from the effects of government curbs. Net income climbed to 1.21 billion yuan ($185 million), or
0.11 yuan a share, from 1.13 billion yuan and 0.1 yuan a year
ago, the company said in a filing at Shenzhen stock exchange
today. Revenue gained 6.2 percent from a year earlier to 7.97
billion yuan. “Against the background of property curbs, the whole
sector will be affected, but Vanke will do better than its
competitors because they have better exposure in third-tier
cities,” said Du Jinsong , a Hong Kong-based analyst for Credit
Suisse Group AG, who rates the stock “outperform.” Vanke’s earnings increased as China’s property curbs were
aimed at speculators who mainly invest in first-tier cities such
as Beijing and Shanghai. In the past three months, the
government intensified measures to rein in prices, raising the
minimum down payment for second-home purchases and levying taxes
on residences in Shanghai and Chongqing. Beijing and Guangzhou
imposed restrictions on home buying in February and the central
bank raised interest rates twice this year. “Vanke will focus on new-home sales and maintain the pace
of sales,” Board Secretary Tan Huajie said in an e-mailed
statement. “The impact of the property curbs is clear in the
market as transactions have slowed down.” Sales Double The company’s contracted sales, based on bookings of
apartments before they are built, more than doubled to 35.5
billion yuan in the first three months from a year earlier.
Developers typically sell their homes before construction begins
and book earnings from the sales progressively. Vanke fell 2 percent to 8.78 yuan at the close of trading
in Shenzhen today before the results were released. The stock
has gained 6.8 percent this year, compared with a 5.4 percent
gain in the broader CSI 300 Index and a 15 percent advance in
the gauge of property stocks on the benchmark Shanghai Composite
Index. Bonnie Cao. Editors: Linus Chua, Nerys Avery To contact Bloomberg News staff for this story:
Bonnie Cao in Shanghai at +86-21-6104-3035 or
bcao4@bloomberg.net To contact the editor responsible for this story:
Andreea Papuc at
apapuc1@bloomberg.net | ||||||
2011-04-19 00:00:00 UTC | U.K. Gas Rises as North Sea Field Shuts, Dutch Pipe Flows Drop | http://www.bloomberg.com/news/2011-04-19/u-k-gas-rises-as-north-sea-field-shuts-dutch-pipe-flows-drop.html
| B y B e n F a r e y | U.K. natural gas for May rose as
Royal Dutch Shell Plc shut a North Sea field and flows from a
liquefied gas terminal and a pipeline from the Netherlands fell. “There is planned maintenance at Shearwater,” Kirsten Smart, a Shell spokeswoman in London, said today by e-mail. She
didn’t give any details on the duration of the work. Deliveries to the Bacton Seal terminal in eastern England ,
where gas from the Shearwater field arrives, began falling at
about 6 p.m. yesterday, National Grid Plc data show. They
dropped about 7 million cubic meters, or 37 percent, to a rate
of 12 million cubic meters today. Gas for May rose as much as 1.3 percent to 58.45 pence a
therm. It was at 58.15 pence as of 4:15 p.m. in London,
according to broker data compiled by Bloomberg. That’s equal to
$9.48 a million British thermal units. A therm is 100,000 Btu. Deliveries into Britain through the BBL pipeline from the
Netherlands dropped by almost 90 percent to a rate of about 2
million cubic meters a day, the National Grid data show. Flows
from the Isle of Grain terminal fell as much as 50 percent. Baseload power for next month rose 25 pence to 51.25 pounds
a megawatt-hour. Baseload is delivered around the clock. National Grid, the network manager, forecast gas demand at
270 million cubic meters in the day through 6 a.m. London time
tomorrow, 33 million less than normal for the time of year. Prices at the National Balancing Point, Britain’s gas hub,
for delivery this summer may drop because of lower demand, a
surplus of Russian supplies and no need to divert LNG to Japan
after the March 11 earthquake, Societe Generale SA said in a
report today. Delivery of the summer gas contract began April 1. ‘Cartel-Like Way’ “Current NBP gas prices are much too high,” Thierry Bros,
a Paris-based analyst at the bank, said in the report. “We see
a decline in gas demand in 2011.” Russia, Norway and Qatar, countries with “a major
influence” on U.K. gas prices, shouldn’t collude to keep gas
out of the European market as they risk damaging their long-term
positions, Bros said. Falling prices are in the interest of
producers and consumers, he said. “The mitigation of climate change and improved energy
security could lead European governments that are phasing out
nuclear to revisit their options if gas producers behave in a
cartel-like way this summer,” Societe Generale said. Maximum London temperatures may rise to 24 degrees Celsius
(75 Fahrenheit) on April 23. That’s 7 degrees more than the
five-year average, according to CustomWeather Inc. data. Milder
weather cuts heating demand. Winter gas, to be delivered in the six months from October,
declined 0.4 percent to 71.25 pence a therm. Power for winter
fell 30 pence, or 0.5 percent, to 58.95 pounds a megawatt-hour. The pipeline between Britain and Belgium was exporting gas
to the continent at a rate of about 51 million cubic meters a
day, according to a website run by Interconnector (U.K.) Ltd.,
owner of the link. The link exported a record volume of about 60
million on April 8. Same-day gas rose 1.55 pence to 56.8 pence a therm. That’s
the first gain in four days. Power for tomorrow fell 2.2 percent
to 49.80 pounds a megawatt-hour. To contact the reporter on this story:
Ben Farey in London at
bfarey@bloomberg.net To contact the editor responsible for this story:
Stephen Voss at
sev@bloomberg.net | ||||||
2011-04-19 00:00:00 UTC | RBS CEO Hester Says U.K. Commission’s Proposals Won’t Make Banks Any Safer | http://www.bloomberg.com/news/2011-04-19/rbs-says-commission-report-will-increase-costs-for-shareholders.html
| B y G a v i n F i n c h a n d J o n M e n o n | Royal Bank of Scotland Group Plc (RBS) ,
Britain’s biggest government-controlled bank, said the
Independent Commission on Banking’s plan to create fire breaks
around lenders’ retail units won’t make them safer. The proposal, known as subsidiarization, “doesn’t make
banks safer,” Chief Executive Officer Stephen Hester said in a
brief interview at the lender’s annual shareholder meeting in
Edinburgh today. “It’s not obvious to us that subsidiarization
is the right answer.” The government-sponsored commission last week recommended
the U.K.’s biggest banks should boost capital, implement plans
for an orderly bankruptcy and erect fire breaks around their
consumer units to boost the stability of the financial system. “The best way to make sure the banks are safe for the
future is the global Basel III reforms,” said Hester. It is
“not clear to me that the U.K. on its own needs a special extra
something.” The Basel Committee on Banking Supervision said last year
that all banks had to maintain a Core Tier 1 capital ratio, a
measure of financial strength, of at least 7 percent. The
largest U.K. consumer banks would need to hold at least 10
percent under the commission’s proposals. “We will have to work hard to mitigate the impact of
additional costs arising from the ICB changes,” RBS Chairman
Philip Hampton said in a statement. “It seems inevitable that
customers and shareholders will be impacted by additional
costs.” Recovery ‘Under Way’ RBS, 83 percent government-owned, will return to profit
this year after three years of losses, Hester said in February.
The government may plan to start selling its stake next year,
people with knowledge of the situation said last month. The bank’s recovery is “clearly under way,” Hampton said
today. Separately, RBS will subsume “a substantial part” of
its RBS NV unit, which includes parts of the former ABN Amro of
the Netherlands. The transfer will “reduce risk, cost and
complexity,” the bank said. U.K. Financial Investments Ltd., which manages the
government’s stakes in banks, said it voted in favor of all
resolutions at the meeting, including those on executive pay. The bank last month awarded Hester and eight top executives
about 28 million pounds ($46 million) in shares. Hester will get
about 6.5 million pounds in stock vesting from 2012 to 2014. He
receives 1.2 million pounds in salary. Banker compensation is “hard to justify objectively,”
Hampton told shareholders today. Levels of pay at RBS are
“relatively low” compared with other banks, though must be
competitive to retain employees, he said. To contact the reporters on this story:
Gavin Finch in London at
gfinch@bloomberg.net
Jon Menon in London at
jmenon1@bloomberg.net ; To contact the editor responsible for this story:
Edward Evans at eevans3@bloomberg.net ; | ||||||
2011-04-19 00:00:00 UTC | Audi Targets ‘Suburban Mommies’ in Compact SUV Race With BMW | http://www.bloomberg.com/news/2011-04-19/audi-targets-suburban-mommies-in-compact-suv-race-with-bmw.html
| B y A n d r e a s C r e m e r a n d C h r i s R e i t e r | Audi AG will pit the Q3 compact
sport-utility vehicle against Bayerische Motoren Werke AG (BMW) ’s X1
as the two luxury-car makers vie to tap demand for SUVs geared
to urban areas. “We’re paying heed to a fast-growing segment,” Michael Dick, Audi’s development chief, said in an interview at the
Shanghai auto show. “There’s a strong appetite for mobility in
expanding urban centers. The Q3 will be most appealing to that
end, especially for female drivers.” Volkswagen AG (VOW) ’s luxury brand, which will begin selling the
Q3 in June at a starting price of 29,900 euros ($42,700), plans
to produce 100,000 Q3s a year, Chief Executive Officer Rupert Stadler said in Shanghai, where Audi premiered the vehicle. The
Q3 is 24 centimeters (9.5 inches) shorter and nearly 7,000 euros
cheaper than the mid-sized Q5. Audi, based in Ingolstadt, Germany , aims to challenge BMW’s
leading position in the segment, which the world’s largest
luxury car-maker created with the X1’s introduction in late
2009. BMW delivered nearly 100,000 X1s in 2010, accounting for
8.2 percent of overall sales. The model is part of Audi’s
strategy to topple BMW as the global luxury-car leader by 2015. High-end carmakers are expanding their lineups of small
cars to attract urban drivers and meet tighter environmental
regulations. Daimler AG (DAI) ’s Mercedes-Benz is also planning a
compact SUV. Mercedes will begin rolling out an expanded range
of four compacts with an overhauled B-Class later this year.
Fiat SpA (F) ’s Alfa Romeo is planning a small SUV as part of its
return to the U.S. Kid Hauler “It’s a vehicle that suburban mommies will use to haul
their kids around,” said Christoph Stuermer, a Frankfurt-based
analyst with IHS Automotive. “It’s a niche alternative for big
urban areas in Europe , China and Japan .” BMW sells the X1, the company’s second-best selling SUV
after the X5, in all markets outside North America . The model
helped the brand extend its lead over Audi in the first quarter,
with sales rising 21 percent to 321,175 vehicles, compared to
Audi’s 18 percent advance to 312,600. The Munich-based carmaker,
which installed cleaner engines in the top-of-the-line X1 this
year, intends to defend its position. “We are aware that the Q3 is coming,” said Andreas Lampka, a BMW spokesman. “The X1 is the leader in its segment,
and we intend to keep it that way.” SUV Battle The Q3 intensifies the two carmakers' SUV battle. BMW
revamped the X3 mid-sized model and moved production to its U.S.
factory in South Carolina late last year in a bid to cut into
North American demand for Audi’s Q5. Audi responded by adding a
fuel-efficient four-cylinder engine to the Q5’s range. A hybrid
version of the Q5 is planned for later this year. Audi’s Q3, based on the same technology platform as the VW
Tiguan, starts at 2,300 euros more than the X1. VW announced
plans yesterday to expand daily production of the Tiguan to
1,000 SUVs from the current 700 to keep up with rising demand. The Q3 will initially be available with three four-cylinder
engines delivering as much as 211 horsepower. The top engine
model has a maximum speed of 230 kilometers (143 miles) per hour
and accelerates to 100 kilometers per hour in 6.9 seconds. The Q3, Audi’s third SUV, will be built at a plant in
Martorell near Barcelona , helping VW’s struggling Seat unit fill
assembly lines. Production may be expanded to China , the world’s
biggest car market. BMW is also considering such a move. “We used to think that China is no real market for SUVs,
but the success of the Q5 and Q7 have been proving us wrong,”
Dietmar Voggenreiter, head of Audi’s China operations, said in
Shanghai. “The Q3 will be our entry model to that segment, a
city-urban car.” To contact the reporters on this story:
Andreas Cremer in Berlin at
acremer@bloomberg.net ;
Chris Reiter in Berlin at
creiter2@bloomberg.net To contact the editor responsible for this story:
Chad Thomas at
cthomas16@bloomberg.net | ||||||
2011-04-19 00:00:00 UTC | Public-Worker Retirements Surge as States Cut Benefits to Shrink Deficits | http://www.bloomberg.com/news/2011-04-19/public-retirees-surge-as-states-cut-benefits-to-shrink-deficits.html
| B y S i m o n e B a r i b e a u | Teri Essex retired a year earlier
than planned when she was offered $56,000 to leave her
elementary-school teaching job in Elk Grove, California . Instead of accepting a salary cut, larger classes and less
money for supplies from spending reductions made last year by
California lawmakers closing a $19 billion budget deficit ,
Essex, 60, took the money over nine years to retire in 2010
after 21 years of teaching. “The financial buyout was a no-brainer,” said Essex,
whose school was 15 miles (24 kilometers) outside Sacramento .
Even though she’ll give up about $300 monthly by quitting early,
she said, “Once you start thinking about retiring, it was like,
‘Oh yeah, I want to do this.’” California, Florida and Texas are seeing more retirements
as rising benefit costs, pay cuts and looming furloughs prompt
workers to leave. Inducements to quit early also boosted
departures in New York as U.S. states tackled budget gaps
totaling more than $540 billion since fiscal 2009, according to
the Center on Budget and Policy Priorities. In New Jersey,
Wisconsin and Ohio, added motivation came from attacks on unions
over costs that strained budgets. “These are people electing to retire because they’re
worried,” Jeffrey Keefe, who teaches labor and employment
relations at Rutgers University in New Brunswick, New Jersey,
said in a telephone interview. “They are demoralized by the
current public-employee condemnations.” Potential Brain Drain One-third of state and local workers with special skills,
such as teachers, nurses, legal staff, engineers and managers,
will be eligible to retire within five years, said Elizabeth
Kellar , president of the Washington-based Center for State and
Local Government Excellence, a nonprofit research organization.
Retirements delayed by the recession and an increase in eligible
workers contributed to the recent increases. That may exacerbate a brain drain at states and
municipalities, where employment has fallen by 2.5 percent since
its peak in August 2008, according to U.S. Bureau of Labor
Statistics data. Since 1995, the number of state employees
outside education is little changed. New Jersey Governor Chris Christie likened the teacher’s
union in his state to “political thugs” in an April ABC
interview with Diane Sawyer. He said on NBC’s Today Show in
February that benefits were “out of control.” When a teacher
at a public event last May complained about the salary at her
job, Christie told her, “you don’t have to do it.” May Spike Again Retirement applicants in New Jersey rose 60 percent in 2010
from 2009. Applications to retire in the first seven months of
this year fell 16 percent and may “spike” again if lawmakers
pass a measure to increase employee contributions to health
insurance, said Andrew Pratt, a state Treasury Department
spokesman. Christie has proposed workers pay 30 percent of their
health care. In Wisconsin , retirement applications jumped 79 percent in
the three months that ended in March from the period last year,
according to the pension system . Governor Scott Walker has
signed a law limiting unions’ collective-bargaining rights,
requiring workers to contribute 5.8 percent of salaries to
pensions and pay 12.6 percent of health-insurance costs. The law
faces a court challenge. Ohio saw a 27 percent annual rise in retirement filings and
inquiries in March, Julie Graham-Price, a pension-system
spokeswoman, said in an e-mail. Legislators last month passed a
law limiting union bargaining rights, restricting local-
government pension contributions and requiring workers to pay at
least 15 percent of their health-care costs. ‘Dramatic Reductions’ Mona Hauenstein, a 30-year state employee, quit in 2009 as
a secretary at the Emergency Management Agency after hearing
about a proposal to reduce employer pension contributions, which
would have likely led to “dramatic benefit reductions,”
according to the pension system’s annual report. “I was going to be a big loser if I didn’t, I felt,
because of the reforms that were going to come,” Hauenstein,
50, said in a telephone interview from Lima , Ohio . California teacher retirements rose 20 percent in fiscal
2010 from a year earlier to 15,621, Patrick Hill, a spokesman
for the California State Teachers’ Retirement System , said in an
e-mail. Other state and local retirements jumped almost 23
percent to 30,119 in 2010, according to the California Public
Employees’ Retirement System . $15 Billion Gap The number is likely to grow again this year as lawmakers
consider pay and benefit reductions, said Brad W. Pacheco, a
Calpers spokesman, to cope with a projected $15 billion 2012
budget gap. “We expect to see an increase in retirements because of
pension reforms,” he said in a telephone interview, “and the
continued threat of furloughs and pay cuts.” Mike Dennis, 61, who teaches in Willows , 140 miles north of
San Francisco , will retire in June from what he said was “the
greatest calling I ever had.” Growing class sizes, cuts to
student programs and “combative” salary and benefits
negotiations are reasons, he said in a telephone interview. “It’s the political environment,” said Dennis, a 16-year
first-grade teacher and former police officer. “I don’t even
know that I’m considered a valuable person anymore.” The Employees Retirement System of Texas expects about
5,400 retirements in the fiscal year ending Aug. 31, up from
3,500 in a typical year, said Mary Jane Wardlow, a spokeswoman. Insurance Premiums Texas legislators may require employees to pay for 10
percent of their health-insurance premiums to help narrow the
state’s budget deficit, Ann Fuelberg, executive director of the
retirement system, said at an April 5 legislative hearing. In Florida, retirees entering the pension system rose to
14,306 in the first seven months of fiscal 2011 from 11,639 in
all of fiscal 2010 , Kris Purcell, a spokesman for the state’s
Department of Management Services, said in an e-mail. Governor Rick Scott , facing a $3.8 billion deficit, wants
workers to pay 5 percent of their salaries to their pensions and
to lower the portion of state-paid health-insurance premiums. The number of New York public employees who retired in 2010
grew 65 percent to 12,281, after a program that ended Dec. 31
allowed some to leave with full benefits after 25 years rather
than 30, said Eric Sumberg, a spokesman for Comptroller Thomas DiNapoli. Iowa , Michigan , Minnesota , Oklahoma also offered early-
retirement enticements in 2010, according to a Nov. 23 report of
the Denver-based National Conference of State Legislatures. Fiscal Health Most such incentives are unlikely to have a “significant
impact” on pension systems’ fiscal health because costs tend to
be spread over time, Bill Hallmark, chairman of the Washington-
based American Academy of Actuaries public plans subcommittee,
said in a telephone interview from Portland , Oregon . State pensions have $479.6 billion of liabilities not
covered by assets, according to data compiled by Bloomberg from
the latest available filings. The assets covered an average of
about 77 percent of liabilities, less than the 80 percent
actuaries consider adequate. Illinois is the worst-funded system, according to data
compiled by Bloomberg in September, with assets to cover 50.6
percent of liabilities. In that state, 2,600 employees are
expected to retire in 2011, up 27 percent from two years ago,
because of legislative proposals to cut their benefits, said Tim Blair, executive secretary of the State Retirement Systems. “We’re going to see over the next several years more
people retiring at any given age,” he said in a telephone
interview. It’s going to be “a steady stream of folks going out
the door.” To contact the reporter on this story:
Simone Baribeau in Miami at
sbaribeau@bloomberg.net . To contact the editor responsible for this story:
Mark Tannenbaum at mtannen@bloomberg.net . | ||||||
2011-04-19 00:00:00 UTC | Mersch Says Unfair to Presume Restructuring, FAZ Says | http://www.bloomberg.com/news/2011-04-19/mersch-says-unfair-to-presume-restructuring-faz-says-correct-.html
| B y G a b i T h e s i n g | (Corrects comment in fourth paragraph to say Spain has
lower public debt than others instead of deficit.) European Central Bank Governing
Council member Yves Mersch said presuming countries like Greece
will not honor their debt obligations is an “unfair”
assumption, Frankfurter Allgemeine Zeitung reported, citing an
interview. Countries receiving aid “have parliamentary resolutions to
stick to the program,” Mersch was cited as saying when asked
about Greek debt restructuring speculation. “To deny these
democracies the will to honor their obligation is an unfair and
blanket assumption.” Asked if the Greek troubles would derail the ECB’s timeline
for interest-rate increases, Mersch said the central bank has a
“mandate to secure price stability over the medium term and
there are no ifs and buts about it,” according to the
newspaper. Mersch also said that Spain is “different” to Greece ,
Portugal and Ireland and has lower public debt, FAZ said. To contact the editor responsible for this story:
Gabi Thesing at
gthesing@bloomberg.net | ||||||
2011-04-19 00:00:00 UTC | Agrokor Increases Offer for Slovenia’s Mercator, Tportal Says | http://www.bloomberg.com/news/2011-04-19/agrokor-increases-offer-for-slovenia-s-mercator-tportal-says.html
| B y B o r i s C e r n i | Agrokor d.d. increased the offer
for a 23 percent stake in Slovenian retailer Mercator Poslovni
Sistem (MELR) d.d. to 221 euros ($316) per share, Tportal reported,
citing the Croatian company’s President Ivica Todoric. “This is the final offer,” Todoric was quoted as saying
by the Croatian news website. The previous offer for Mercator
was 206 euros a share, according to Tportal. Pivovarna Lasko (PILR) d.d., which is selling the Mercator
holding, said on April 15 bidders have extended offers to buy
the stake in the Slovenian company. To contact the reporter on this story:
Boris Cerni in Ljubljana, Slovenia, at
bcerni@bloomberg.net To contact the editor responsible for this story:
James Gomez at
jagomez@bloomberg.net | ||||||
2011-04-19 00:00:00 UTC | Cinema City, Kety, Mol, Trakcja: Central Europe Equity Preview | http://www.bloomberg.com/news/2011-04-19/mol-gornictwo-trakcja-polska-central-europe-equity-preview.html
| B y M a c i e j M a r t e w i c z a n d P a w e l K o z l o w s k i | The following is a list of
companies whose shares may have unusual price changes in central
European markets. Stock symbols are in parentheses after company
names. Share prices are from the last close. Poland ’s WIG20 Index gained 0.5 percent, the Czech PX Index
rose 0.8 percent and Hungary ’s BUX Index increased 1.4 percent. Cinema City International NV (CCI) : Central Europe’s
largest movie-theater operator was cut to “hold” from “buy”
at UniCredit SpA. Its shares climbed 2.2 percent to 38.29 zloty. Grupa Kety SA (KTY) : Poland’s largest aluminum products
maker said first-quarter net income rose 25 percent to 18.8
million zloty ($6.8 million) as sales increased to 322.6 million
zloty. That compares with a March 30 forecast of 15 million
zloty to 17 million zloty on sales of 300 million zloty to 310
million zloty. Kety shares were unchanged at 130.5 zloty. Mol Nyrt. (MOL HB): Hungary’s largest oil refiner said it
signed concession agreements with the Romanian National Agency
for Mineral Resources for three exploration blocks. Mol fell
less than 0.1 percent to 23,900 forint. Polskie Gornictwo Naftowe i Gazownictwo SA (PGN) : The
shareholders of Poland’s dominant gas company meet to vote on
the company’s dividend for 2010. Gornictwo was unchanged at 3.79
zloty. Trakcja Polska SA (TRK) : The Polish railway builder
completed a purchase of Tiltra Group, Lithuania ’s largest
construction company, after saying April 1 that the deal had
expired. The 777.5 million zloty price in the agreement may be
adjusted based on Tiltra’s earnings. Trakcja gained 0.6 percent
to 3.63 zloty. To contact the reporters on this story:
Maciej Martewicz in Warsaw at
mmartewicz@bloomberg.net ; To contact the editor responsible for this story:
Gavin Serkin at
gserkin@bloomberg.net | ||||||
2011-04-19 00:00:00 UTC | Argentine Stocks: Galicia and Siderar Advance; Edenor Falls | http://www.bloomberg.com/news/2011-04-19/argentine-stocks-ledesma-and-siderar-advance-edenor-falls.html
| B y E d u a r d o T h o m s o n | The following companies had unusual
price changes in Argentine trading. Stock symbols are in
parentheses and share prices are as of 4 p.m. New York time. The Merval Index rose 0.9 percent to 3,332.27. Empresa Distribuidora y Comercializadora Norte (EDN) SA
fell 0.9 percent to 2.13 pesos. The Argentine power distributor
plans to sell $300 million of additional 9.75 percent bonds. Grupo Financiero Galicia SA (GGAL) rose 3.1 percent to
5.60 pesos, the steepest increase in two weeks. Argentina ’s
largest consumer lender led gains among members of the Merval
index, in line with global equity markets which rose on positive
housing data and earnings news from the U.S. and Europe . Siderar SAIC (ERAR) gained 1.2 percent to 30.3 pesos.
Argentina’s largest steel producer is seeking an injunction on
the decree that increases the state pension agency’s voting
powers in companies in which it holds stakes. To contact the reporter on this story:
Eduardo Thomson in Santiago at
ethomson1@bloomberg.net To contact the editor responsible for this story:
David Papadopoulos at
papadopoulos@bloomberg.net | ||||||
2011-04-19 00:00:00 UTC | Kenny Says Ireland Seeks Lower Bailout Rates (Transcript) | http://www.bloomberg.com/news/2011-04-19/kenny-says-ireland-seeks-lower-bailout-rates-transcript-.html
| B y | Irish Prime Minister Enda Kenny
gives a speech about the country’s economy, housing market and
the terms of its loan from the European Union and International
Monetary Fund . Bloomberg Dublin bureau chief Dara Doyle moderates a
question and answer session following the speech yesterday at
Bloomberg’s European headquarters in London. (Source: Bloomberg) (This is not a legal transcript. Bloomberg LP cannot
guarantee its accuracy.) ENDA KENNY, PRIME MINISTER OF IRELAND: I’m glad to be here
in Bloomberg and have this opportunity to say a few words to you
about our situation. I want to give you a flavor of what the new
Irish government, Irish, how we intend to continue our progress
of acting decisively to help engineer a recovery in our country
as quickly as possible. The purpose of my visit to London today is threefold.
Firstly, earlier this morning I met with representatives of the
Irish community in Britain. Obviously you would be aware of the
very long traditional ties between Ireland and Britain in the
context of business, and work and employment and trade, social
activities, over very many years. And I wanted on my first official visit to London as
Taoiseach to recognize the contribution that local authorities
make here, that the British government make here and that the
organizations which are funded by the Irish state through our
diplomat services make in respect of our citizens who live here
in Britain. That contribution is oftentimes not recognized as
wisely as it should be, both in Britain and at home in Ireland
and it was important for me as somebody who has a deep
understanding of this and the long history associated with it
that I should do that on one of my first official engagements
this morning. Secondly, I want to communicate widely through the media
and through this particular event with key opinion formers and
the broader business community what the new government is
actually doing to address Ireland’s economic challenge. So I am
grateful to Bloomberg for hosting us today and to all of you for
coming along to both listen and to participate. I had some
interaction with Bloomberg in Washington when I was there
recently for the St. Patrick’s Day festivities. And, finally, later this afternoon I am going down to
Downing Street to meet with Prime Minister Cameron and we will
discuss a range of issues there of mutual interest between
Ireland and Britain. We met at a number of recent European
Council meetings, but this afternoon’s meeting will focus
primarily on the unique bilateral relationship between our two
countries, Britain and Ireland. And that relationship is one of
mutual respect, one of trust and one of opportunity. It is one
of friendship and support, including financial support in these
more difficult times. As Taoiseach and as leader of the Irish people it is a
friendship that I value, that I prioritize and that I intend to
develop. This friendship has been achieved through decades of
working together towards the goal of peace in Northern Ireland . Many of you, if you have taken any passing interest in that
complex problem over 40 years, will understand and appreciate
the degree to which all parties and politicians of all parties
have put their minds and their intent on bringing about a
lasting solution to this which is now in place and being
implemented through the Good Friday agreement. As we speak here
the election campaign is underway for election to the Northern
Ireland Assembly. That Assembly has just completed the first full term of
power sharing government ever in Northern Ireland after decades,
indeed centuries of division and violence. So that’s a powerful
symbol of what Democratic politics can achieve when everybody
actually applies their minds to it. It demonstrates to us all
that in politics there is no problem, political, economic or
social that cannot be resolved. The historic process of peace and reconciliation will be
underscored, as John has pointed out, by the historic visit next
month of Queen Elizabeth to Ireland, the first such visit of a
reigning monarch in 100 years and since independence. It is an
event of truly historic importance and it will demonstrate how
both nations have come to terms with a difficult past, but it is
also a visit that looks forward and shows how two neighboring
islands intend to cooperate together for an even stronger
future. You will also be aware that the visit of the Queen will be
followed a few days later by a visit by the President of the
United States, President Obama. That visit will also reflect the
unique and the historic ties that exist between Ireland and the
United States and that visit will reflect the unique and
historic ties that exist in so many ways over so many centuries. And taken together I believe that these two events in this
place of one week will provide a springboard for our people to
look forward with hope and with confidence to a brighter future.
I also believe that they show that whatever else people say
about Ireland the Irish we are no ordinary country and we are no
ordinary people. We have seen dark days before, very dark days indeed. We
have dealt with and overcome adversity in the past. We will do
so again with the creativity and the imagination of our people
alike to the help of our friends and partners in Britain, in
Europe and in the wider world. It’s my belief that we will emerge from our current
challenges as stronger than before. And to lead that comeback is
the fundamental challenge of the government that I now lead. And
I have no illusions, none, about the scale of the challenge that
we face. As John pointed out, no government in the history of our
state has faced the scale of economic challenge that our
government now faces. Well, equally so, no government in the
history of our state has been given the strength of democratic
mandate that the government I lead now has. I know that this audience is well informed on these matters
and you will have your own views on Ireland’s prospects for
economic recovery, so I am not here to promise the unachievable
or to offer quick and easy solutions when there are none. Nor am
I here to ask skeptics to change their minds overnight. I am
here to say a few words about how I believe that Ireland will
actually recover. And all I ask of this audience with a wide and diverse set
of opinions is to listen carefully and to think maybe to think
again about the future of our country. For the first time in
several years there is a real debate about Ireland’s genuine
prospects for export-led recovery and I invite you to debate
with us and to participate in that debate in the months ahead. And as we debate that future I am reminded of the old joke
that equity markets have predicted ten out of the last five
recessions. And I am also told that according to IMF research
the bond markets, the bond markets have managed to predict 36 of
the last seven defaults. Think about that. We have predicted 36
of the last seven. Unfortunately, I didn’t bring the statistics
for politicians predicting a better future. That might be the
other way. Ultimately, I recognize of course that economic outcomes
will speak for themselves. I know that we will be judged by our
results, not our rhetoric, and it results and not rhetoric that
actually interest me. I lead a government, as I said, with an overwhelming
mandate from the people to do what is necessary, to do what is
necessary, to bring about economic recovery and to sort out our
own problems. Our people are very pragmatic. They want to know
what the scale of the problem is. They want to know the range of
options and solutions that have been put forward and they want
clarity, and decisiveness and leadership from their government
to end the days of uncertainty and confusion and bring about
clarity of decision so that people can say I can now plan for
the future and for the future of our children. The mandate I’ve been given, the largest in the history of
the state, gives my government the authority to make the changes
that count. And that gives us the opportunity to give clear
leadership and to take hard and tough decisions. And we will
make those both with courage and with fairness. The task that I set for the new government which I lead is
to carefully formulate and then to implement decisively the
policies that are required to address all of our problems. Now
after five weeks in office, having inherited a particular legacy
and having looked at the scale of that we have already made some
significant progress. We have commenced an intensive engagement with all our
international partners and that includes discussions I have had
already with my fellow members of the European Council on a
number of occasions, as well as with the Troika of the EU, the
ECB and the IMF. Among the leaders that I have had discussions
with and talked with already have been Chancellor Merkel ,
President Sarkozy, Prime Minister Cameron, the Presidents of the
European Council, the European Commission, the European Central
Bank , President Obama and US Treasury Secretary Geithner. My ministerial colleagues have been engaged in intensive
contacts with their counterparts in the finance ministries and
the foreign ministries of Europe. We have made major decisions
on the future of our banking system in response to the most
severe and the most transparent stress tests carried out with
the assistance of highly reputable international experts. We have committed in our program for government to meet the
fiscal consolidation targets that have been agreed in the EUR,
IMF program and we are on target to do that. In our first five
weeks in office we have initiated a far reaching, comprehensive
spending review that will be completed in September and that
will form a solid base for deficit reduction in the years ahead. For those of you who might not appreciate what’s involved
here, for years in our country the Ministry for Finance did the
bilateral arrangements with all of the different ministries,
money allocated by vote of Cabinet to those departments, but
there was never the capacity to actually determine how
effectively that money was being spent, what value was achieved,
being achieved for that money, of where duplication or waste
occurred. We have split that department into two separate
departments, one which is the Department of Finance for that
bigger picture, but the second in respect of senior ministry
dealing with the area of public service reform and public
expenditure. And this comprehensive review will go into every element of
every vote of every department to see how that money is being
spent, how it’s being used, where that program should be
abolished, where the program should be limited or where the
program should be enhanced. And that process will be completed
by September, which will allow for the first time a really true
and accurate picture of the Irish internal budgetary situation
as we prepare a program for the 2012 budget which will be
introduced later in the year. Last week we concluded successfully, I might add, the first
review of the EU’s ECB, IMF Troika team in Dublin. The Troika
agreed that Ireland is fully compliant in respect of the
conditionality set out on the EU, IMF program to the end of the
first quarter. It expressed the strong support for the actions adopted by
the new government in relation to bank restructuring and bank
recapitalization. We agreed to change some aspects of the
program that were concluded with the previous government and to
replace those with proposals that we included in our own new
program for our government. These include changes in the minimum
wage with a compensatory adjustment on employers’ social
insurance and a new fiscally neutral jobs initiative which will
be announced in the Irish Parliament in May. There was also an important agreement that a transfer of
loans with a value below EUR20 million to the National
Management Agency will not proceed. Instead, the banks will
manage down their exposure to these loans themselves in line
with the government’s new policy. While our problems lie predominantly in the world of
banking and economics, I also believe that part of the solution
lies in the world of politics and political reform. The new
government program actually contains the most far reaching
political reforms since independence. These reforms will be
vigorously and swiftly implemented. I can speak with some authority and experience in this
regard as I happen to be the longest serving member of the Irish
Parliament. In that sense I know the perception and the
frustration that citizens have when they see a never ending
series of circles about how government does its business in its
broadest sense and we intend to change that. We have taken clear action to reduce pay and perks for
politicians and to change how we appoint persons to serve on
state boards and in the senior public service. As you would be
aware, there are already have been significant changes in the
leadership of our central bank and financial regulator, as well
as in the management of the banks, more to follow. We have reorganized the machinery of government to give the
highest priority to public service reform and to job creation ,
while we are bringing new methods and new expertise in key areas
such as banking policy to give an injection of competence and
managerial experience from the outside to the public service. We
are also planning a series of important national referenda to
modernize our Constitution. It is my intention that the pace and
the quality of that reform will be maintained and indeed
enhanced over the next number of months. I believe that just as Ireland had seen the worst of many
aspects of the global economic crisis we can now show the way to
new ways of doing business that become a model for other
countries for the future. Of course, I fully acknowledge that
there is a long and difficult road ahead to get to that
destination. Politics was never meant to be a bed of roses. The
challenge facing me, and my government and the government I lead
are unappreciated in that regard. There are questions we have to
answer on that route about our banking system, about our fiscal
sustainability and about our prospects for economic growth. I would like to offer a few observations on these issue if
I may, which are the key dimensions of our economic equation. On
banking the key objective for my government is to strengthen
fiscal sustainability by separating bank risk from that of the
sovereign. Clearly this will only be achieved by returning the banking
system to health. The recent capital and liquidity assessment
exercises, the so-called PCAR and PLAR exercises by the Irish
Central Bank have achieved considerable attention. They have been extremely thorough and transparent. The
input of the respected international consultants, including
Blackrock, ensured a really high degree of external valuation. The process was also subject to close scrutiny by the IMF,
by the European Commission and by the ECB. It has set the bar
very high indeed in respect to the standards now expected of
both Irish and foreign banks by Irish regulators. A radical reorganization of the banking sector in Ireland
is now underway. The banks will be required to unwind EUR77
billion of non-core assets so that they refocus on the core
business of supporting real economic activity in Ireland and in
Northern Ireland. There will be major consolidation within the sector. We
will move to two pillar banks of roughly equal size, along with
competition from foreign banks already in the market. The
analysis suggests that a capital injection of EUR24 billion is
required. This figure was calculated to absorb shocks of
exceptionally higher levels to the banking system over the next
three years. It should be noted that EUR5.3 billion of this represents a
buffer over and above what was required to meet the requirements
of the stress tests. Moreover, EUR3 billion of this figure will
represent contingent capital. We also expect that the institutions will raise a not
insignificant proportion of this capital by themselves.
Accordingly, therefore as losses emerge over the next few years’
capital level will remain high by international standards, even
under a distressed highly and likely scenario. The reaction to the stress tests from the markets and
others has been very encouraging. It reinforces our belief that
the tests were extremely credible and robust. The EUR24 billion
required by the banks for capital purposes is within the funding
element available for this purpose from the EU, IMF program. We will also seek direct contributions by requiring further
significant contributions from subordinated debt holders, by the
sale of assets to generate capital, and where possible, by
seeking private sector investors. We will make our banks
smaller, more focused, better funded and better capitalized. We
will transform our banking system to effectively serve our
economy and to contribute to full recovery. On the public finances there are some positive signs in
relation to Ireland’s fiscal position, although there are
undoubtedly, undoubtedly serious challenges as well if the
economy does not perform as well we expect. 2010 was a year of
stabilization. The overall Exchequer position was in line with
the Department of Finance estimates set in December 29 with tax
revenues finishing the year above target. The underlying general of the government deficit, that is
the deficit excluding the capital support committed to some of
our financial institutions, is also expected to have met the
target set in December 2009. The Exchequer returns of revenue
and spending for the first quarter of this year, 2011, were also
broadly consistent with expectations with tax revenues, despite
being a little behind target, up almost four percent in the
first quarter of 2010. In the past two weeks you may have noticed there have a
number of announcements from the various credit rating agencies
regarding Ireland’s sovereign rating. The news has been mixed,
but it is important to state that all of our ratings remain
within the investment grade band. Our external partners have acknowledged that Ireland is
making, as they say, good progress in overcoming the crisis. We
have reached our targets up to the end of March by a comfortable
margin, as they point out. This reflects our seriousness, our
absolute seriousness in doing what is necessary. Our balance of payments, current account, is expected to
move into surplus this year. This is an important indicator of
the long-term sustainability of the Irish economy. We have
recovered from a higher level of debt interest burden in the
past, achieving a dramatic turnaround through fiscal discipline
and high levels of growth. This can and will be achieved again. As a member of a monetary union we also rely on the support
and the solidarity of other members and we are grateful for
that. And we will continue to engage with our European partners
to ensure that the program delivers the outcome, which is in all
our interests, Ireland’s interests and Europe’s interests. I am confident that Ireland will meet our obligations under
the program. We will also continue to make the strong case for a
reduction in the interest rate payable for funds under the
program. It should not be dependent on Ireland making a
concession that will threaten the economy’s growth potential.
That would be awfully self-defeating. That is why we simply could not accept any adjustment in
the Irish corporation tax rate as it would damage the prospects
for our recovery. That is not to say that the new government
will not take tough or unpopular decisions. We fully recognize
that confidence and recovery depend upon stabilizing the public
finances. So the new government is determined to continue the program
of fiscal consolidation, including by legislating for an
increase in the pension age, a reduction in the size of the
public workforce by 12 percent from its peak, and establishing a
new fiscal council and enacting groundbreaking fiscal
responsibility legislation. By 2014 Ireland will have delivered
a financial consolidation equivalent to 20 percent, 20 percent
of GDP, most of which has already been secured. The Irish people are determined to pick ourselves up, to
pay our own way and to contribute to the future progress of the
European Union. And I believe our partners will continue to
support us and work with us to ensure that the program
facilitates an early return to the markets. We require greater
flexibility, not more money, to enable us to do so. On economic growth the underlying reason for confidence is
the medium-term growth potential of the Irish economy. As you
know, Ireland is one of the world’s most open economies and our
exports our performing very strongly. Right now we export 80 percent of what we produce. In 2010
our exports grew by 9.5 percent. By the end of 2011 we expect
our exports to exceed our record pre-recession level. This shows
the economy rebalancing towards exports. We also continue to attract significant levels of inward
investment, despite the turbulent global economy in which,
according to the OECD, foreign direct investment declined,
declined by eight percent. Our inward investment agency, the
Industrial Development Authority of Ireland, secured 126
investments in 2010 and its’ client companies created almost
11,000 new jobs. From that perspective there has never been a
better time to invest in Ireland. Intel, Google, eBay, Facebook, Citigroup, Boston Scientific
are just some of the world-class global companies that expanded
operations or increased their R&D in Ireland in the last 12
months. These companies know our country and they see a bright
future there. We remain, according to independent international studies,
fourth in the world for availability of skilled labor, fourth
for being open to new ideas, sixth for labor productivity and
seventh for the flexibility and the adaptability of our people.
We will maintain Ireland’s 12.5 percent corporation tax, which
is a longstanding and necessary part of our enterprise strategy. One of the positive outcomes of our recent difficulties is
that our cost competitiveness has improved significantly. And
one of the challenges for us is to explain that in the context
of where competition lies for us around the world. Our unit labor costs have fallen significantly. The
European Commission forecasts an improvement of 14 percent
relative to the euro area by 2012. Consumer price inflation has
been below that of the rest of the euro area since the beginning
of 2009, which delivered substantial reductions in relative
costs. We are implementing structure reforms to put more downward
pressure on costs. In other words, we are delivering a real
exchange devaluation within the monetary union. These cost reductions are already translating into
substantial trade and employment benefits in an open business-
friendly economy like Ireland now has. While all of the rating
agencies have recognized the recent weaknesses evident in the
Irish economy, they have also pointed to the underlying
strengths in order to leave a flexible open economy and that the
ongoing recovery in export growth will drive a rising trade and
current accounts surplus. The general view contained within these assessments is that
the economy is stabilizing and that our long-term growth
potential remains high. In this regard, the agencies all point
to our social stability and strong political commitment to
fiscal consolidation as being a key support to Ireland’s credit
rating. The importance of those factors, especially following
the recent general election decision, should never be
underestimated. Last week the Irish Central Bank projected 0.9 percent
growth in 2011. And most other forecasters expect a modest
return to GDP growth this year. The government will publish our
own revised forecasts later this month. The key element, therefore, of our economic recovery
strategy is to develop policies that would allow job growth and
sustainable enterprise to flourish. To this end, we will deliver
a jobs initiative next month which will, among other things,
reduce the lower rate of VAT, have the lower rate of employer
social insurance contributions, enhance our labor market
policies and accelerate labor-intensive capital projects. This initiative aims to underpin domestic confidence and
therefore help reduce precautionary savings which are currently
at very elevated levels. Our strategy for growth is to play to
our considerable strengths, while taking swift and decisive
action to comprehensively address our weaknesses. We are
convinced that growth is the key and that it can and will be
achieved. So, in conclusion, my key message is to you here in
Bloomberg today are as follows. We are meeting our targets under
the IMF, EU program of support. We are getting on top of our
banking crisis. We have taken decisive action to restructure and
recapitalize our banking system, which will be finished by July,
at costs that are within the envelope provided for the, provided
for by the IMF, EU program. The costs will also be offset by
measures involving subordinated bond holders, asset sales and
private finance. We are beginning to get our public finances in order. We
are working with our regional partners to make sure the program
operates in a way that facilitates early return to the markets,
including the level of interest rate charged. We have taken
dramatic action to reduce our fiscal deficit and we will
continue on this path to make the target of a three percent
deficit by 2015. And nothing will deviate us from that plan. Economic growth is the key factor in debt sustainability.
We are taking early policy decisions to accelerate growth in job
creation and the economy will return to growth this year. We have made significant improvements in competitiveness,
including an estimated 14 percent improvement in unit labor
costs relative to the euro area by 2012. Our balance of payments
current account is due to go positive this year, which is an
important indication of sustainability. We remain a magnet for foreign investment by providing a
competitive business-friendly environment and a skilled,
imaginative and creative workforce. We will retain our rate of
corporation tax, a longstanding part of our enterprise strategy. We are also working very hard to rebuild Ireland’s
reputation, both inside the European Union and beyond, but
ensuring the progress that we are making is communicated
effectively and by assuring other governments of our seriousness
of intent in this matter. As we speak, all of the ambassadors of
the European Union are being called today to our Department of
Foreign Affairs , are being spoken to by the Tanaiste or deputy,
a deputy head of government in respect of the program that we
adopt and what we are about. We intend to recall all our own ambassadors from around the
world, our enterprise people, our industrial development
authority people to talk to them about their mission, about the
program we have in mind for them and how important it is to let
the word there that this new government has a different sense of
priority, a different sense of commitment, a different level of
seriousness in sorting out our fundamental problems at home so
that we can play our part, pay our way and be responsible and
central for the continued progress of the European Union and
rebuild our reputation beyond the borders of the Union. To that
extent I intend to travel again to the States early in May to
meet with business interests, banking people and the political
forces in New York . So this is a work in progress with the emphasis on the
world progress. We have proven before how a small and regional
economy can grow at a fast rate over a sustained period. And we
can do so again. My belief as somebody who meets people
constantly, both in business and who would like to be in
business, that the frustration that has been endemic in our
people and our economy for quite some time has been released in
part by the evidence that this government is now taking
decisions that are in our country’s interests. And I believe that when we fix the parts of our economic
engine that have not been working in the way they should the
fuel of confidence that we can supply to our people will bring
about a resurgence of growth, a resurgence of spending capacity,
a resurgence of interest in employment, in job creation, career
opportunities which will be the driving force to restore
Ireland’s good fortunes. So I thank you for listening and will take whatever
questions you have to ask in, over the next few minutes. Thank
you very much indeed. UNIDENTIFIED SPEAKER: Thank you very much, Taoiseach, for
that comprehensive overview. So without further ado I will pass
you over to Dara Doyle, our Dublin Bureau Chief, who will
moderate the Q&A session. DARA DOYLE, BLOOMBERG NEWS: Thanks very much, John. First
of all, thank you to the Taoiseach for coming into the bear pit
that is Bloomberg at times, much appreciate it. We have,
unfortunately, not much time for questions, 13 minutes to be
precise, so I am going to have some quite strict ground rules
with questions, if that’s okay. It’s one question per person and if you could state your
name and the organization you are from. And what we are going to
do is to include the questions in three and the Taoiseach can
take them in the order they are looking first. Okay, who would
like to open the opening question, the fine here? Yes, say
something. QUESTION: Hi. I’m Thomas Costrick (ph) from (inaudible)
Bank. Mr. Prime Minister, your government seems to have
backtracked on the minimum wage. How should we interpret this in
the framework of your strategy of an export-led recovery? Thank
you. DOYLE: Okay. Second question? EDA CARANY: (OFF-MIKE) DOYLE: You see. It’s away from the mic (inaudible) EDA CARANY: Eda Carany, GIG Partners. You have made
reference numerous times throughout the speech about Ireland’s
willingness to pay your way independently and I would to get a
bit more clear about obviously in respect to the banking sector
you have tiered the banks, two core banks, Anglo Irish and other
banks, and what’s your sort of strategy going forward for these
banks? DOYLE: And one last question please, so the gentlemen here
at the back and thank you. DERRICK HALFPENNY: Derrick Halfpenny from the Bank of Tokyo
Mitsubishi. Taoiseach, you mentioned the fact that Ireland in
the past has managed to get out of economic problems like we
have at the moment. Of course back then though, historical
examples, we had our own currency and our own monetary policy.
In that regard, does it not concern you that the financial
markets are currently pricing in about 100 basis points of
monetary tightening over the next 12 months, which is resulting
in a very strong gain for the euro against both the pound and
the dollar? DOYLE: Okay. So, Taoiseach, that first that’s questions
there, the euro, the minimum wage and banking strategies he said
there. KENNY: Well, first of all, in respect of the question with
backtracking on the minimum wage, in fact it’s the other way
around. Prior to the general election we agreed that we would
restore the minimum wage to what it was. And the Troika last
weekend agreed with that. I met with the Troika as leader of the Party in opposition
before Christmas, before the election. And we discussed a range
of issues with the Troika. And while the agreement had been put
together by the previous government the Troika agreed that
sectors of that agreement within the overall conditions could be
transposed one with the other. And from that point of view we set out that we would
restore the minimum wage to what it was. It affects two percent
of our workforce. Obviously we didn’t want to have a situation
where you had a free for all in terms of the labor market. And
there are other issues that have already been agreed about
arrangements where there are obstacles to labor employment, and
to employer positions dealing with overtime, and joint labor
agreements and so on that are going to be a part of a separate
package which will compensate on the other hand in respect of
the minimum wage. So it’s not a case of backtracking. It’s a case of actually
having agreement from the Troika in implementing what is part of
our program for government. In respect of the banking position, obviously we had six
dysfunctional banks and the problem with the Irish economy, if
you like, as a patient staggering along, but unable to
contribute. So our government looked at this and we took a
series of serious decisions about it. So we are going to have
two core pillar banks, the Bank of Ireland and Allied Irish
Bank. Anglo Irish Bank is a bank being wound down and obviously
has been central to the catastrophe that affected so many
people, as a consequence of the Irish economic crisis. So our
two pillar banks are going to be the Bank of Ireland and AIB,
together with the EBS. And we expect that the deleveraging that
will take place now will provide a core element of at least
EUR10 billion in credit for lending over each of the next three
years. And these banks have been required now by law this
position to core and non-core elements, core is with Ireland, to
Northern Ireland, and non-core is beyond that. So in addition to that, in respect to the jobs initiative
which we will introduce in May, there will be an insurance, a
credit insurance team drafted there because one of the problems
for the real economy and real business is that they can’t get
credit from the banks. Overdrafts have been cut and people who
wanted to change direction or diversify simply haven’t been able
to get credit. So where you have talk of credit being lent it didn’t
actually apply. So from that point of view an element of our
jobs initiative will be in respect of a credit insurance scheme
which will lessen the risk for the banks, provide greater
flexibility, and therefore allow for that sense of confidence to
come back into the market, which we believe our people have
always been really practical about and interested in. And I
expect a strong resurgence there. I might say that in visiting loads of firms over the last
six weeks before the election many of them said, you know, we
had 50 employed or 100 employed. We are now less than half that
or a third of it. I would like to get back again to the point
where we can have that measure of confidence. In respect of the charge in respect of the interest rates ,
at the meeting in Brussels of the heads of government we didn’t
actually make a decision in respect of Ireland in that because
the reason was that I spoke to President Van Rompuy the
difficult stress tests were not completed in respect of Ireland
and we agreed that that would be better left to the ministers of
finance who have carried that on. That wasn’t dealt with in
Budapest, which was an informal meeting. The Portuguese
government have applied for assistance under the bailout fund.
IMF officials are there at the moment. But it did - the meeting in Brussels did say that it would
be - it was agreed that countries participating in the bailout
package under the EFSF program should have their interest rates,
interest rate reductions applied. Now Greece got a 100 percent,
a one percent reduction, 100 basis points, but they are not in
that package. And they got also an extension of the period
involved there. So interest is not due, in respect of Ireland’s case, until
October, November, as we have got time now to reassure our
European colleagues of how serious we are about this. The IMF
have recently said that an interest rate reduction should apply
in the case of Ireland. We believe that our economic growth
projections will allow us to meet our requirements in this
matter. And hopefully when we can bring about a reduction of
interest rate and that would be to our advantage also. DOYLE: Okay. Two more questions please, surely, period. And
the gentleman here? QUESTION: Ofanga Pickly, Reg Group (ph). Around the 70
percent of the mortgages are already in arrears now. Most of
them are a variable rate. The ECB is hiking. Is that the next
big challenge for the government? If so, what have you got up
your sleeves to tackle that problem? Thank you. DOYLE: Second question from some? QUESTION: Tshock James McGrain (ph) with the London Irish
Graduate Network, and my question is regarding graduates. Very
recently we have noticed a huge significance, a significant
increase in the mass exodus of graduates from Ireland. These are
graduates that the governments have invested huge, vast sums of
money in and they are very important to the development to the
economy in the future. I would just like to know what the
policies are for this government to retain these graduates or
what policies they have to bring them back into the country.
Thank you. QUESTION: (inaudible) and BBC . We - this morning we had
another round of rumor and counter rumor in the markets. FT was
saying that the Greeks had started a new, renegotiating or in
extending their schedule of payments, rescheduling them. This
kind of rumor and counter rumor, surely that needs to - that’s
not going to stop before some sort of grand bargain involving
some sort of rescheduling of debt for all three countries is
sorted, or the rates come cascading down to pre-recessionary
levels. DOYLE: Graduates. KENNY: Well, obviously the question about mortgage arrears
is obviously one of serious concern for us. Some people have
been in the negative actually for quite some time. Others have
had some difficulty in meeting their mortgage arrears and as a
consequence of the latest increases others will have difficulty
from here on. Obviously a moratorium has been introduced. There are a
number of issues that the Minister of Finance will present to
the Irish Parliament to the Dail in the near future dealing with
distressed mortgages, which is of a daily concern to so many
people. It’s a serious issue for us and government are going to
focus on that with a series of announcements, some of which have
already been made, over the next couple of weeks. With respect to the graduates, I was at a conference in
Dublin Castle on, today’s Monday, on Friday. And one of the
points being made by international experts was you ask a class
of leaving certificate students in Ireland how many are going to
form their own business the average response is about 20 to 25
percent, as against places in the United States where it would
be 80 or 90 percent. Well, the thing is to get a sense of, on the one hand, of
the stream of education does, but on the other to have a culture
that’s far stronger in the context of business. And we don’t
want to see graduates having to go to Vancouver , or Seattle , or
Australia or wherever unless they want to go by choice. And
that’s why in the context of the comprehensive spending review
we want to see that the Irish taxpayers’ gets the best impact of
what it should be at. And I don’t see any reason why we get the fundamental
problems sorted out here that we can’t have real growth in the
Irish economy where that level of creativity and ingenuity,
which is now being exported and drifting abroad, cannot stay at
home. In fact, I don’t see why many companies who have received
substantial assistance from the IDA don’t continue their
programs of graduate employment and graduate training, take them
on. So as part of our own jobs initiative we will free up that
labor market for the graduate employment. And I might say, as
you well know in an organization like Bloomberg, the next decade
will see massive changes with the information in genetics, and
biotech, and robotics and nanotechnology. And our colleges of
technology, our universities, we need to gear up for those
changes and those challenges. I might say that the evidence from over the years is that
our young people they can measure up to the scale of challenge
and competition from their peers around the world. And our
education system has got to redirect itself to deal with that
opportunity. So while some would obviously go because they want to go,
we want to provide a situation whereby serious government
decisions you create a country where people who want to stay,
where it’s attractive for them to stay, where they are not taxed
out of existence and where the opportunity exists to give them,
give vent to their flare and their ability. I have read the - heard Joe there, have read about the
report about the Greek government renegotiating their position.
Obviously there are some serious challenges here for a number of
countries. We are focusing on ours and our problems, we believe,
are surmountable and that’s why, that’s why the mandate given to
me and the government is to sort this problem out and deal with
the fundamental issues that have been around for a long time
now. I spoke to Mr. Papandreou prior to the last meeting in
Brussels. He was happy at that time to have a reduction of one
percent given to him and a longer period. So, and from our
perspective the issues that relate to our economy and its
potential to growth are surmountable. That’s where we are
focused, and as I say, we want to get back to a position as
quickly as possible where we can goodbye to the IMF and the EU
in terms of this particular deal, and get back to the bond
markets and be in charge again of our economic destiny. That’s
the big challenge. And as I say, we are not looking to get into a program. We
are in a program. And the IMF and the EU are now assessing every
issue that Ireland has to deal with, so within those constraints
we want to give freedom to our people to grow and have growth in
our economy and get back to a point where we can restore our
reputation nationally, internationally and prove our point. So that’s the challenge of politics. Nobody before me who
sits in the Office of the Taoiseach has had to deal with the
scale of the challenge. Equally so, nobody before me has had the
mandate from the people to sort it out. They expect action. They
expect change. They expect decisiveness and that’s what they are
going to get. DOYLE: Okay. So this is a good point to wrap it up.
Unfortunately, we don’t have any time for any more questions,
but just to let you know that the Taoiseach has graciously
agreed to do a Bloomberg interview later on, so that will be
aired this afternoon and there will be many more questions asked
there. And just to wrap up I would like to thank some people.
First of all, I would like to thank all the clients for
attending today, much appreciate your interest obviously. And
second of all, I would like to thank Florence for organizing
this fantastic event and third, and most importantly, I would
like to thank the Taoiseach for agreeing to - KENNY: Well, I would like to thank all the people here for
taking the time to come along, and listen to us and participate
here. And I hope you get a flavor of the seriousness of intent
that we have got here. I believe our country is going to come
through this stronger, with a better sense of values, will have
a much stronger element in which to build the future. And I look
forward to your participation in that. Thanks very much. ***END OF TRANSCRIPT*** THIS TRANSCRIPT MAY NOT BE 100% ACCURATE AND MAY CONTAIN
MISSPELLINGS AND OTHER INACCURACIES. THIS TRANSCRIPT IS PROVIDED
“AS IS,” WITHOUT EXPRESS OR IMPLIED
WARRANTIES OF ANY KIND. BLOOMBERG RETAINS ALL RIGHTS TO THIS
TRANSCRIPT AND PROVIDES IT SOLELY FOR YOUR PERSONAL, NON-
COMMERCIAL USE. BLOOMBERG, ITS SUPPLIERS AND THIRD-PARTY AGENTS
SHALL HAVE NO LIABILITY FOR ERRORS IN THIS
TRANSCRIPT OR FOR LOST PROFITS, LOSSES OR DIRECT, INDIRECT,
INCIDENTAL, CONSEQUENTIAL, SPECIAL OR PUNITIVE DAMAGES IN
CONNECTION WITH THE FURNISHING, PERFORMANCE, OR USE OF SUCH
TRANSCRIPT. NEITHER THE INFORMATION NOR ANY OPINION
EXPRESSED IN THIS TRANSCRIPT CONSTITUTES A SOLICITATION OF THE
PURCHASE OR SALE OF SECURITIES OR COMMODITIES. ANY OPINION
EXPRESSED IN THE TRANSCRIPT DOES NOT NECESSARILY REFLECT THE
VIEWS OF BLOOMBERG LP. #<186166.5610485.2.1.87.23378.25>#
-0- Apr/19/2011 07:32 GMT | ||||||
2011-04-19 00:00:00 UTC | Emanuel Said to Select Lois Scott to Be Chicago's Chief Financial Officer | http://www.bloomberg.com/news/2011-04-19/emanuel-said-to-select-lois-scott-to-be-chicago-s-chief-financial-officer.html
| B y D a r r e l l P r e s t o n a n d J o h n M c C o r m i c k | Rahm Emanuel , Chicago ’s mayor-
elect, will announce that he has chosen Lois Scott as chief
financial officer for the third most-populous U.S. city, a
person familiar with the decision said. Scott, president of the Chicago financial advisory firm
Scott Balice Strategies, will be named to the post tomorrow,
according to the person, who wasn’t authorized to speak publicly
about the selection. The Bond Buyer reported earlier that she
was being considered for the post. Scott, who co-founded Scott Balice in 2003 after 20 years
in public finance and government, didn’t immediately respond to
a telephone call and e-mail seeking comment. She would replace
Gene Saffold, a former managing director for national accounts
at New York-based JPMorgan Chase & Co. (JPM) who Mayor Richard M. Daley appointed to the post in March 2009. Emanuel, 51, elected mayor on Feb. 22, will be sworn in on
May 16, succeeding Daley, who is retiring after 22 years.
Emanuel said before the election that the city needs a spending
freeze and $75 million of immediate budget cuts to tackle the
financial challenges it faces. He will enter office facing a declining population, a 2012
budget deficit forecast at more than $600 million and shortfalls
in the pension funds for city workers. Emanuel has pledged to maintain a defined-benefit pension
system for city workers, while calling for sacrifices from all.
He has said he will forgo a pension as mayor. Repeated use of reserve funds to balance the city’s budgets
led Standard & Poor’s to cut Chicago’s credit rating on Nov. 5
by one level to A+, the fifth-highest grade. To contact the reporters on this story:
Darrell Preston in Dallas at
dpreston@bloomberg.net ;
John McCormick in Chicago at
jmccormick16@bloomberg.net . To contact the editor responsible for this story:
Mark Tannenbaum at
mtannen@bloomberg.net | ||||||
2011-04-19 00:00:00 UTC | Canada March Consumer Price Index Report (Text) | http://www.bloomberg.com/news/2011-04-19/canada-march-consumer-price-index-report-text-.html
| B y I l a n K o l e t | The following is the text of
Canada's consumer price index report for March released
by Statistics Canada . Consumer prices rose 3.3% in the 12 months to March,
the largest year-over-year increase since September 2008.
This advance follows a 2.2% increase in the 12 months to
February. Energy prices increased 12.8% during the 12 months to
March, following a 10.6% advance in February. Gasoline
prices increased 18.9% in March, following a 15.7% gain in
the 12 months to February. Prices for fuel oil and other
fuels increased 31.3%, while electricity prices rose 4.3%. Excluding energy, the Consumer Price Index (CPI) rose
2.4% in the 12 months to March, following a 1.4% increase
in February. Prices for food purchased from stores rose 3.7% in
March, the largest year-over-year advance since August
2009. This increase follows a 2.0% gain in February. Other items that contributed significantly to the
pickup in prices were travel services, clothing, and the
purchase of passenger vehicles. Seasonally adjusted monthly CPI increases On a seasonally adjusted monthly basis, consumer prices
rose 0.8% from February to March, the largest increase
since October 2010. The food index, which was up for the
fourth consecutive month, rose 1.6% in March. The
transportation index, which includes gasoline, advanced
0.6% in March, following a 0.3% increase in February and
continuing its string of increases since July 2010. Seasonally adjusted, the clothing and footwear index
posted a monthly increase of 2.1% in March, after
remaining unchanged in February. The recreation, education
and reading index, which includes travel services,
increased 0.5% in March, following a 0.2% advance in
February. This marks the seventh straight monthly increase
for this index. 12-month change: Prices increase in all eight major
components On a year-over-year basis, prices increased in all
major components of the CPI in March. Except for alcoholic
beverages and tobacco products, prices rose at a faster
rate in March than in February. The largest increase occurred in the transportation
component, where prices rose 6.6% in the 12 months to
March, after advancing 5.1% in February. In addition to higher gasoline prices, consumers paid
more for passenger vehicle insurance premiums and for air
transportation. Prices for the purchase of passenger
vehicles rose 0.2% in the 12 months to March, following a
0.9% decrease in February. Food prices rose 3.3% in the 12 months to March,
following a 2.1% rise in February. Prices for fresh
vegetables rose 18.6%, as bad weather in Mexico and the
southern United States reduced supply. The cost of meat
rose 5.0% in March, as beef and pork prices increased.
Higher prices were also recorded for bakery and cereal
products as well as for dairy products. Shelter costs rose 2.4% in March, after increasing 2.2%
in February. In addition to higher prices for fuel oil and
other fuels, as well as for electricity, homeowners'
replacement cost increased 3.2% in the 12 months to March. However, mortgage interest cost, which measures the
change in the interest portion of payments on outstanding
mortgage debt, and natural gas prices continued to
decline. The recreation, education and reading price index
increased 2.3% in the 12 months to March, after decreasing
0.3% in February. The difference can be mainly explained
by traveller accommodation prices, which increased 1.7% in
March compared with the same month last year, after
posting a 10.7% decline in February. The price decline in
February was more the result of higher prices for hotel
rooms in February 2010 during the Winter Olympics in
Vancouver rather than recent price decreases. Prices for household operations, furnishings and
equipment advanced 1.9% between March 2010 and March 2011.
Within this component, higher prices were recorded for
child care and domestic services. The health and personal care price index rose 2.6% in
March, following a 2.0% increase in February. Consumers
paid more for non-prescribed medicines, but less for
prescribed medicines. For alcoholic beverages and tobacco products, prices
rose 2.5% in March with cigarette prices increasing 5.7%. Prices for clothing and footwear rose 0.9% in the 12
months to March, the first year-over-year increase since
November 2009. The advance follows a 2.0% decline in
February. This year in March, fewer clothing items were on
discount compared to the same month last year. The provinces Consumer prices rose at a faster rate in every province
in March compared with February, year over year. Gasoline
continued to be a major factor contributing to the
increase in consumer prices in all provinces. In the 12 months to March, Nova Scotia (+3.9%) posted
the largest increase in consumer prices. In Ontario, consumer prices rose 3.6% in the 12 months
to March, after advancing 2.5% in February. Gasoline
prices in Ontario rose 20.4% in March, following an 18.3%
increase in February. Prices for food purchased from
stores increased 3.6% in March, after advancing 1.8% in
February. Higher prices were observed for fresh vegetables
as well as for bakery products. Consumer prices in Quebec increased 3.3% in the 12
months to March, following a 2.2% advance in February.
Prices for gasoline rose 18.5% in March. Consumers paid
4.6% more for food purchased from stores in March, after
paying 1.7% more in February. Prices rose for fresh
vegetables, meat and dairy products. Prices in British Columbia went up 3.1% in the 12
months to March, following a 1.8% increase in February.
Much of the difference can be attributed to traveller
accommodation, where prices decreased at a much slower
rate in March (-3.1%) than they did in February (-38.1%),
from a year earlier. Drivers in British Columbia paid 16.3% more for
gasoline in March compared with the same month in 2010.
This rise follows a 12.6% increase in February. Consumers
also paid more for food purchased from restaurants and
electricity. The Bank of Canada 's core index The Bank of Canada's core index advanced 1.7% in the 12
months to March, following a 0.9% rise in February. The
higher increase in March was mainly a result of larger
price increases for travel services, clothing, and the
purchase of passenger vehicles. The seasonally adjusted monthly core index increased
0.5% in March, the largest increase since November 2008.
The March increase follows a 0.1% decline in February. Note to readers The Bank of Canada's core index excludes eight of the
Consumer Price Index's most volatile components (fruit,
fruit preparations and nuts; vegetables and vegetable
preparations; mortgage interest cost; natural gas; heating
oil and other fuels; gasoline; inter-city transportation;
and tobacco products and smokers' supplies) as well as the
effects of changes in indirect taxes on the remaining
components. To contact the reporter on this story:
Ilan Kolet in Ottawa at
ikolet@bloomberg.net To contact the editor responsible for this story:
Marco Babic at mbabic@bloomberg.net | ||||||
2011-04-19 00:00:00 UTC | U.S. Repo Close: Current Five-Year Note at Lowest, Minus 0.15% | http://www.bloomberg.com/news/2011-04-19/u-s-repo-close-current-five-year-note-at-lowest-minus-0-15-.html
| B y C o r d e l l E d d i n g s | The following is a summary of
closing rates in the market for U.S. repurchase agreements, or
repos, in New York . All repo rates are for overnight transactions at the bid
side of the market as reported by GovPX Inc., a unit of ICAP
Plc, the world’s largest inter-dealer broker. Lowest Repo Rate as of 10 a.m. New York time: The current 5-year note closed at the lowest repo rate:
negative 0.15 percent, up from negative 0.4 percent. Other Rates: Old 2-year note: 0.1 percent, unchanged. Current 2-year note: 0.1 percent, unchanged. Old 3-year note: 0.1 percent, up from 0.05 percent. Current 3-year note: 0.15 percent, unchanged. Old 5-year note: 0.1 percent, down from 0.15 percent. Old 7-year note: 0.15 percent, unchanged. Current 7-year note: 0.15 percent, unchanged. Old 10-year note: 0.15 percent, unchanged. Current 10-year note: 0.15 percent, unchanged. Old 30-year bond: 0.15 percent, unchanged. Current 30-year bond: 0.15 percent, unchanged. The bid for a security is the price that is quoted and
available for immediate sale of an asset. The offer is the price
available for immediate purchase of an asset. Current issues are the most recently issued securities, and
old issues are those sold previously with the same maturity. Specific Treasury securities in the greatest demand are
considered to be “on special.” Firms that want to borrow them
are willing to lend money overnight at rates below those on
general collateral or other Treasuries in exchange for them. Behind the Numbers Securities firms use repos to borrow money to finance
positions in Treasury, corporate and mortgage-backed securities.
They also borrow securities on reverse repos to make deliveries
of sales of securities the dealers don’t own, and engage in
speculative repo trading based on expectations for the future
direction of interest rates . Current 5- and 10-year notes often trade at the lowest repo
rates because they are widely used as hedges against positions
in corporate, mortgage and global debt. General Collateral Delivery repos: 0.17 percent, up from 0.16 percent. The
collateral is sent to an investor’s bank against receipt of
funds. Triparty repos: 0.2 percent, up from 0.19 percent. A
clearing bank acts as a third party to make sure there’s
adequate collateral behind the repo and that it conforms
throughout the life of the transaction to the investor’s
requirements, providing the customer with an additional layer of
safety. Securities firms are willing to pay higher rates to borrow
money through triparty repos because they can allocate leftover
collateral remaining at their clearing bank late in the day as
backing for the transactions, saving on delivery costs. Rates on general repos, or those backed by non-specific
collateral, are usually set slightly below federal funds levels. Treasury Bills The three- and six-month Treasury bills closed at 0.15
percent, unchanged. Federal Funds Federal funds, the overnight interbank lending rate, was at
0.1 percent, within the Federal Reserve ’s target range of zero
to 0.25 percent, according to ICAP. To contact the reporter on this story:
Cordell Eddings in New York at
ceddings@bloomberg.net To contact the editor responsible for this story:
Robert Burgess at bburgess@bloomberg.net | ||||||
2011-04-19 00:00:00 UTC | Cuban Puts Landmark Theatres, Magnolia Pictures Up for Sale | http://www.bloomberg.com/news/2011-04-19/cuban-puts-landmark-theatres-magnolia-pictures-up-for-sale-1-.html
| B y A n d y F i x m e r a n d J o n E r l i c h m a n | Billionaire Mark Cuban has put his
Landmark Theatres and Magnolia Pictures up for sale, saying
entertainment companies are attracting “huge valuations.” Cuban, 52, is “just testing the waters,” he said
yesterday in an e-mail in response to a question from Bloomberg
News. “We won’t sell unless the offer is very, very
compelling.” Moelis & Co., a New York-based investment bank, is handling
the auction, according to a person familiar with the situation.
Bidders are expected to file their offers next week, said the
person, who wasn’t authorized to speak publicly. Landmark Theatres , founded in 1974, operates 55 cinemas
with 245 screens in 21 cities, including New York , Los Angeles
and Chicago. The decision to put it on the block comes as U.S.
box-office sales have declined 20 percent this year, according
to Hollywood.com Box-Office. Magnolia Pictures distributes
independent films in theaters and for home entertainment. Both are part of 2929 Entertainment , a holding company for
Cuban and business partner Todd Wagner’s media assets that also
includes the HDNet cable channel and HDNet Movies. With Magnolia, known for films such as “Man on Wire” and
“The Girlfriend Experience,” Cuban and Wagner have
experimented with releasing movies simultaneously across
theatrical, television and home-video platforms. Andrea Hurst, a spokeswoman for Moelis in New York,
declined to comment. In addition to the box-office slump, cinema chains face
demands from studios to shorten movies’ exclusive theatrical
runs. The industry is also investing in digital projection
systems to upgrade facilities and offer premium enhancements
such as 3-D showings. AMC Entertainment Group Inc., the second-largest U.S.
movie-theater owner, purchased 93 Kerasotes Showplace Theatres
for $275 million last year. Walt Disney Co. (DIS) sold its Miramax
Films in December to investors led by Ron Tutor and Colony
Capital LLC for $663 million. To contact the reporters on this story:
Andy Fixmer in Los Angeles at
afixmer@bloomberg.net ;
Jonathan Erlichman in New York at
jerlichman1@bloomberg.net To contact the editor responsible for this story:
Anthony Palazzo at
apalazzo@bloomberg.net | ||||||
2011-04-19 00:00:00 UTC | Blackboard Hires Barclays to Evaluate Offers; Shares Surge | http://www.bloomberg.com/news/2011-04-19/blackboard-reports-unsolicited-buyout-offers-hires-barclays.html
| B y D o u g l a s M a c M i l l a n | Blackboard Inc. (BBBB) , a maker of online
educational courseware, said it hired Barclays Capital as its
financial adviser after receiving unsolicited buyout offers. The
shares surged 29 percent, the biggest gain since June 2004. The sources of the buyout offers weren’t disclosed.
Blackboard is evaluating the bids as well as interest from other
potential acquirers, the company said in a statement. “Our board is committed to fulfilling its fiduciary duties
to act in the best interests of shareholders,” said Chief
Executive Officer Michael Chasen in the statement. “We remain
focused on our company’s strategic plan and are committed to
delivering the highest quality products and sustained client
satisfaction.” Blackboard makes software that lets teachers post course
materials, conduct discussions and make assignments online. Its
customers include California State University, Chico , and the
University of Arkansas at Little Rock. In January, Pearson Plc (PSON) paid $127 million to boost its
stake in test-preparation service TutorVista, based in India.
Last November, News Corp. paid $360 million for closely held
Wireless Generation, a maker of Web-based tools for the
classroom. Blackboard, based in Washington, rose $10.75 to $47.91 at
4 p.m. New York time on the Nasdaq Stock Market. The gain was
the stock’s biggest since June 18, 2004, the day the shares
began trading after an initial public offering. To contact the reporter on this story:
Douglas MacMillan in San Francisco at
Dmacmillan3@bloomberg.net . To contact the editor responsible for this story:
Tom Giles at tgiles5@bloomberg.net . | ||||||
2011-04-19 00:00:00 UTC | Sony Ericsson Posts Profit on Higher-Priced Handsets, Beating Estimates | http://www.bloomberg.com/news/2011-04-19/sony-ericsson-first-quarter-profit-falls-to-11-million-euros-margin-rises.html
| B y D i a n a b e n - A a r o n | Sony Ericsson Mobile Communications
AB, the mobile-phone venture of Sony Corp. (6758) and Ericsson AB,
posted a first-quarter profit as it shipped more high-priced
models, beating analyst estimates of a loss. Net income was 11 million euros ($15.7 million), the
London-based company said in a statement today. Profit declined
from 21 million euros a year earlier when the company had a tax
benefit. Analysts had estimated a net loss of 27.1 million
euros, according to the average of 10 estimates compiled by
Bloomberg. Chief Executive Officer Bert Nordberg is working to
accelerate product rollouts after slow updates of its smartphone
models running Google Inc. (GOOG) ’s Android software hurt sales last
quarter. His job is made tougher by the March 11 Japanese
earthquake, which disrupted component supplies for new Android
models. Its unit share of the global Android market is currently
11 percent, Nordberg said in an interview, adding that he isn’t
happy with it. “We haven’t seen a clear sign from Sony Ericsson that
makes us believe it will remain a top player,” Francisco Jeronimo, an analyst at IDC, said in an e-mailed report. “The
risk of being a niche player and a second-tier supplier means
its devices need to deliver better experience, better hardware
and better services for a lower price, otherwise operators will
prefer a first-tier supplier.” Gross Margin Average selling prices gained to 141 euros in the first
quarter from 134 euros a year earlier as Sony Ericsson’s product
mix tilted toward higher-priced smartphones and away from
midrange feature phones. Sales slipped 19 percent to 1.15
billion euros, compared with the 1.26 billion euro average
estimate of 16 analysts. “We managed to get out quite a few units of our new
portfolio that made a jump in the gross margin and then we could
report a profit,” Nordberg said. The earthquake has affected supplies of batteries,
displays, printed circuit boards and connectors and the
situation is stabilizing as alternative sources are found, he
said. “We might not reach what we would like to have in the
second quarter but at least the trend from the suppliers is in
the right direction,” Nordberg said. “A lot of raw material is
also coming from Japan into displays and other things, so even
if you buy components outside Japan it doesn’t mean you aren’t
hurt by this situation.” Changing Product Mix Sony Ericsson, the sixth-largest handset maker last year,
shipped 8.1 million handsets in the first quarter, compared with
10.5 million a year earlier. Analysts had estimated 9.6 million
units. The company estimated its market share at 5 percent in
units and 3 percent in value for the quarter. The company announced its first high-end model in almost a
year in January: the Xperia Arc, a slim touchscreen model with
an 8-megapixel camera. It followed up with the Xperia Play,
which has a slideout Sony PlayStation keyboard, and the Xperia
Neo and keyboard-equipped Xperia Pro. Volumes of these models have been affected by the
earthquake, and the broad rollout of the Neo has been pushed
back to early in the third quarter, the company said April 8.
Shipments of the Play to Verizon haven’t been affected by the
earthquake, Nordberg said on a teleconference. The company has a
second U.S. carrier lined up for the gaming handset, he said in
the interview. Sony Ericsson aims to expand its global share of Android
handsets to at least 25 percent from 14 percent at the beginning
of this year, Nordberg said in March. To contact the reporter on this story:
Diana ben-Aaron in Helsinki at
dbenaaron1@bloomberg.net To contact the editor responsible for this story:
Kenneth Wong in Berlin at
kwong11@bloomberg.net | ||||||
2011-04-19 00:00:00 UTC | Hungary Government Drops Plan to Regulate Drug Prices, Napi Says | http://www.bloomberg.com/news/2011-04-19/hungary-government-drops-plan-to-regulate-drug-prices-napi-says.html
| B y E d i t h B a l a z s | Hungary’s government dropped plans
to control prices as part of a comprehensive bill to regulate
the drug market, Napi Gazdasag reported, without saying how it
obtained the information. The regulations will require new entrants to the generic
drug market to apply prices 5 percent below the reference price,
the newspaper said. The government is set to decide on the final measures next
week, according Napi. To contact the reporters on this story:
Edith Balazs in Budapest at
ebalazs1@bloomberg.net To contact the editor responsible for this story:
James Gomez at jagomez@bloomberg.net | ||||||
2011-04-19 00:00:00 UTC | MALAYSIA DAYBOOK: Inflation Seen at 23-Month High; Roaming Pact | http://www.bloomberg.com/news/2011-04-19/malaysia-daybook-inflation-seen-at-23-month-high-roaming-pact.html
| B y B a r r y P o r t e r | Consumer price inflation likely rose
to a 23-month high of 3.1 percent in March, according to the
median estimate of 16 economists surveyed by Bloomberg News. The
government will announce the data at 5 p.m. WHAT TO WATCH:
* Information Communication & Culture Minister Rais Yatim
briefing on roaming costs between Malaysia and Singapore in
Putrajaya at 2 p.m.
* Deputy Finance Minister Donald Lim launches Property
Market Report 2010 in Kuala Lumpur at 2.30 p.m.
* Multimedia Development Corporation (MDeC) briefing on third
phase plan in Kuala Lumpur at 10 a.m.
* Media Prima Bhd. (MPR MK) briefing after annual meeting at 3
p.m.
* Al-Hadharah Boustead REIT (BIRT MK) priced its placement units
at 1.35 ringgit each, a 5.6% discount to recent market price.
LBS Bina Group Bhd.
* LBS Bina Group Bhd. (LBS MK) agreed to buy a 19 percent stake
in Jatidiri Gigih Sdn. for 13.1 million ringgit. Jatidiri is a
developer of 230 acres of land in Selangor state. MARKETS:
* Malaysia’s FTSE Bursa Malaysia KLCI Index fell 0.4 percent.
* The MSCI Asia Pacific Index dropped 1 percent.
* The Dow Jones Industrial Average gained 0.5 percent.
* Palm oil June-delivery futures advanced 0.3 percent to 3,255
ringgit a metric ton. BTV (KL Times):
*7:10 a.m.: BlackRock Vice Chairman Robert Doll
*7:20 a.m.: Second Curve Capital CEO/Founder Tom Brown
*7:40 a.m.: HK Secretary for Financial Services KC Chan
*8:40 a.m.: Samsung Securities Head of Internet Research Paul
Wuh
*9:10 a.m.: Advanced Research Japan MD Koji Endo
*1 p.m.: Japan Economy Minister Kaoru Yosano
*1:15 p.m.: Australian Foreign Affairs Minister Kevin Rudd To contact the editor responsible for this story:
Barry Porter in Kuala Lumpur at
bporter10@bloomberg.net | ||||||
2011-04-19 00:00:00 UTC | South Africa Reduces Corn Surplus After Attracting Indian, Chinese Buyers | http://www.bloomberg.com/news/2011-04-19/south-africa-no-longer-has-a-corn-surplus-problem-farming-minister-says.html
| B y M i k e C o h e n a n d B r i a n L a t h a m | South Africa , the continent’s
largest corn grower, has reduced its largest-ever corn surplus
after attracting buyers from China , India and other developing
countries, Agriculture Minister Tina Joemat-Pettersson said. “We have turned the crisis into a gain” for South Africa,
she told reporters in Cape Town today. “The interest for our
grain and the maize surplus has become absolutely phenomenal. We
have traders from the East, the Middle East, the Far East.” South Africa’s accession to the BRIC group of nations,
comprising of Brazil , Russia, India and China, had opened a huge
new marketplace for its agricultural produce, helping to run
down corn stocks, she said, without giving details. South Africa last year reaped its biggest corn crop since
1982, the result of favorable weather conditions and increased
use of genetically modified seeds. Farmers say they’ve struggled
to export the surplus because of dilapidated rail lines and a
surging rand, which made local produce uncompetitive. South Africa currently has corn stocks of about 4.3 million
metric tons, down from 6.1 million tons at the start of the year
and more than 9.5 million tons at the end of August, according
to data from the South African Grain Information Service , which
monitors trade in the industry. Since the marketing season started on May 1, South Africa
has sought new markets beyond its traditional African customers.
For the first time in many years, the nation has shipped corn to
Italy , South Korea , Kuwait, Japan , Taiwan and Spain , while last
week it started exporting grain to Portugal . ‘Surplus With Traders’ South Africa hasn’t yet shipped corn to any of the BRIC
nations, according to the Sagis data. This year, 34 percent of
South Africa’s white corn has been shipped outside of mainland
Africa, up from less than 1 percent last year, while exports of
yellow corn beyond the region have jumped to 88 percent from 37
percent, the data shows. “There were importers from India who wanted to buy” corn
from South Africa, said Langa Zita, director-general of the
Department of Agriculture, in an interview in Cape Town today.
“Our engagement with the industry indicates that the issue of
the surplus now is with the traders.” Exports of white corn by South Africa this season to nearby
countries has been limited by bumper harvests regionally. In
much of Africa, white corn is used to make corn meal, while
yellow corn is fed to animals. Grain SA , South Africa’s largest grain farmers group, said
corn stocks are likely to remain at “healthy” levels. ‘Higher Tempo’ “We have healthy reserves, and with 10 million tons out
there (in the ground), that’s going to continue,” said Chief
Executive Officer Jannie de Villiers by phone today from
Bothaville, in the Free State province. “We’ve been exporting at a higher tempo” recently, said
Francois Strydom, managing director of Senwes Ltd., which
controls more than a quarter of South Africa’s grain storage
facilities. “We certainly haven’t drained our surplus, especially with
the new harvest coming in,” he said by phone from Klerksdorp,
in the country’s North West province. White corn for July delivery, the most-active contract on
the South African Futures Exchange, gained 3 percent to close at
1,711 rand per ton, while yellow corn for delivery the same
month also rose 3 percent to 1,748 rand per ton at the midday
close of trading in Johannesburg. To contact the reporters on this story:
Mike Cohen in Cape Town at
mcohen21@bloomberg.net To contact the editor responsible for this story:
Antony Sguazzin at asguazzin@bloomberg.net | ||||||
2011-04-19 00:00:00 UTC | Fiscal Conservatives Dodge $10 Trillion Debt: Simon Johnson | http://www.bloomberg.com/news/2011-04-19/fiscal-conservatives-dodge-10-trillion-debt-simon-johnson.html
| B y S i m o n J o h n s o n | Washington is filled with self-
congratulation this week, with Republicans claiming that they
have opened serious discussion of the U.S. budget deficit and
President Barack Obama’s proponents arguing that his
counterblast last Wednesday will win the day. The reality is that neither side has come to grips with the
most basic of our harsh fiscal realities. Start with the facts as provided by the nonpartisan
Congressional Budget Office . Compare the CBO’s budget forecast
for January 2008, before the outbreak of serious financial
crisis in the fall of that year, with its latest version from
January 2011. The relevant line is “debt held by the public at
the end of the year,” meaning net federal government debt held
by the private sector, which excludes government agency holdings
of government debt. In early 2008, the CBO projected that debt as a percent of
gross domestic product would fall from 36.8 percent to 22.6
percent at the end of 2018. In contrast, the latest CBO forecast
has debt soaring to 75.3 percent of GDP in 2018. What caused this stunning reversal, which in dollar terms
works out to a $10 trillion swing for end-year 2018 debt, from
$5.1 trillion to $15.8 trillion? Almost all of this increase is due to the severe recession
that followed the financial crisis of late 2008. This lowered
output and employment, and therefore reduced tax revenue . Revenue Drought For example, look at the tax revenue numbers for 2011, as a
percent of GDP. The earlier expectation for 2011 was that the
federal government would collect revenue equal to 19.3 percent
of GDP. The forecast now is for revenue of 14.8 percent of GDP. Whatever you think about the fiscal stimulus of 2008 (at
President George W. Bush ’s instigation) or 2009 (from Obama),
those had relatively little impact compared with the automatic
stabilizers, such as unemployment benefits , that are triggered
by deep recession. Why did we have a severe recession with such a crippling
fiscal consequences? On this issue, most politicians from both
sides of the aisle fall silent. What isn’t in doubt is that this was a financial-sector
crisis of classic proportions. In terms of the negative fiscal
repercussion, it reads like an episode straight from Ken Rogoff
and Carmen Reinhart ’s “ This Time Is Different ,” a history of
financial crises. But the political elite that now profess to be bothered by
the fiscal deficit made no serious effort to make the financial
sector any safer after the events of September-October 2008. Three Responses When you press politicians and their advisers on this, you
will hear three kinds of responses in candid moments. First is the notion that banking crises are rare. This is a
favorite of the Treasury Department. Perhaps that was true in
the past, but our big banks have become bigger, and too-big-to-
fail banks have major incentives to take on very high levels of
risk. After all, the downside isn’t their problem. Second is the idea that we fixed it with the Dodd-Frank
Act, a line heard most often from Democrats on Capitol Hill .
Almost no one holds to that view, including William Dudley ,
president of the New York Federal Reserve, and Sheila Bair , head
of the Federal Deposit Insurance Corp. Both have expressed
concerns that the roadmap for closing a large troubled bank
remains elusive. And the idea that new international rules will force banks
to increase their capital enough to reduce the risk of systemic
crisis is regarded as ludicrous, at least by leading independent
finance experts, such as Anat Admati of Stanford’s Graduate
School of Business. Forcing banks to raise more equity in an
appropriate way would lower risk, strengthening the financial
system at little or no cost to the broader economy, according to
Admati. ‘Markets Evolve’ Third, “Let the markets evolve the way the markets
evolve.” This was a recent quote from Anthony Santomero, former
president of the Philadelphia Fed and current Citigroup Inc.
director. Citigroup has blown up repeatedly in the past 30
years, not surprising for a complex and unwieldy megabank with
260,000 employees worldwide. Each time, it was saved through some form of external
assistance, usually from the government, in part because
responsible policy makers feared what Citigroup’s collapse would
do the broader economy. Do we really think that the next time a
bank with 200 million clients worldwide gets in trouble that the
U.S. will let it go bankrupt, regardless of the consequences? Is
that what Vikram Pandit , the chief executive officer, or Timothy Geithner , the Treasury secretary, argued for in 2008 or will
argue for next time? Right Way The right way to think about future budget deficits is in a
probability-based fashion: What is the chance something bad will
happen, and how bad will that be for debt levels? The odds of
another major financial calamity next year are small, but the
risk over a 10- to 20-year period is high. That’s the right time
horizon to use in the coming budget debate. The impact of a new financial crisis on the U.S. public
balance sheet would be huge. Anyone who wants to be taken
seriously as a fiscal conservative must stop dodging this issue
and start proposing solutions. ( Simon Johnson , co-author of “13 Bankers: The Wall Street
Takeover and the Next Financial Meltdown” and a professor at
MIT’s Sloan School of Management, is a Bloomberg News columnist.
The opinions expressed are his own.) To contact the writer of this column:
Simon Johnson at sjohnson@mit.edu To contact the editor responsible for this column:
James Greiff at jgreiff@bloomberg.net | ||||||
2011-04-19 00:00:00 UTC | Global Funds Buy Net 6.87 Billion Rupees of Indian Derivatives | http://www.bloomberg.com/news/2011-04-19/global-funds-buy-net-6-87-billion-rupees-of-indian-derivatives.html
| B y P a r e s h J a t a k i a | Global investors bought a net 6.87
billion rupees ($155 million) of Indian equity derivatives
yesterday, according to the National Stock Exchange. Open interest, or the number of contracts outstanding in
value terms, rose 0.5 percent to 975 billion rupees, or 34
percent of the gross market position, according to the
exchange’s website. Open interest reached a record 1.6 trillion
rupees on Sept. 21. Foreign funds sold a net 9.82 billion rupees of shares in
the cash segment yesterday, according to preliminary data given
by the bourse. To contact the reporter on this story:
Paresh Jatakia in Mumbai at
pareshj@bloomberg.net To contact the editor responsible for this story:
Arijit Ghosh at
aghosh@bloomberg.net | ||||||
2011-04-19 00:00:00 UTC | South African Companies Act to Be Effective May 1, Moneyweb Says | http://www.bloomberg.com/news/2011-04-19/south-african-companies-act-to-be-effective-may-1-moneyweb-says.html
| B y A n a M o n t e i r o | South Africa ’s new Companies Act
will be implemented on May 1 after missing an April 1 deadline,
Johannesburg-based Moneyweb reported, citing Trade and Industry
Minister Rob Davies. To contact the editor responsible for this story:
Ana Monteiro at
amonteiro4@bloomberg.net | ||||||
2011-04-19 00:00:00 UTC | Sri Lanka, Bangladesh Sign Agreements on Agriculture, Commerce | http://www.bloomberg.com/news/2011-04-19/sri-lanka-bangladesh-sign-agreements-on-agriculture-commerce.html
| B y A n u s h a O n d a a t j i e | Sri Lanka and Bangladesh signed
five agreements, including accords for cooperation in
agriculture, livestock and commerce, the South Asian island’s
government said on its website today. The agreements were signed
during a visit by Sri Lankan President Mahinda Rajapaksa to
Bangladesh, according to the website. To contact the reporter on this story:
Anusha Ondaatjie in Colombo at
anushao@bloomberg.net To contact the editor responsible for this story:
Hari Govind at
hgovind@bloomberg.net | ||||||
2011-04-19 00:00:00 UTC | Thailand Stocks: BTS Group, Kiatnakin Bank, PTTEP, Sri Trang | http://www.bloomberg.com/news/2011-04-19/bangkok-bank-kiatnakin-bank-tisco-thailand-equity-preview.html
| B y T o n y J o r d a n | Shares of the following companies
had unusual moves in Thailand trading. Stock symbols are in
parentheses and prices are as of the 4:30 p.m. close in Bangkok. The SET Index rose 5.21, or 0.48 percent, to 1,095.88. BTS Group Holdings Pcl (BTS) , the operator of Bangkok’s
elevated train system, rose 4 percent to 0.79 baht, its highest
close since March 9. Ridership on BTS’s Bangkok train system
reached a record high of 14.4 million trips in March, and will
grow over the next two months, KGI Securities (Thailand) Pcl
wrote in a note today. Kiatnakin Bank Pcl (KK) , a commercial lender, fell 3.4
percent to 36 baht, its biggest decline since March 11. First-
quarter net income fell 26 percent to 605.2 million baht ($20.1
million), the bank said in a regulatory filing after the market
closed yesterday. PTT Exploration & Production Pcl (PTTEP) , the nation’s
only publicly traded oil explorer, fell 0.8 percent to 188 baht,
its lowest close in more than two weeks. Crude oil futures
dropped as much as 1 percent, extending yesterday’s 2.3 percent
decline, after Standard & Poor’s Ratings Service cut the U.S.
long-term credit outlook, fueling concern that a recovery in the
global economy may slow. Sri Trang Agro-Industry Pcl (STA) , the largest rubber
producer, fell 2.3 percent to 31.25 baht, its lowest close since
April 4. Rubber futures declined for a sixth day in Tokyo ,
slumping as much as 5 percent. To contact the reporter on this story:
Tony Jordan in Bangkok at
tjordan3@bloomberg.net To contact the editor responsible for this story:
Darren Boey at dboey@bloomberg.net | ||||||
2011-04-19 00:00:00 UTC | AT&T Won’t Yet Release RIM Bridge E-Mail App for Playbook | http://www.bloomberg.com/news/2011-04-19/at-t-won-t-yet-release-rim-bridge-e-mail-app-for-playbook-1-.html
| B y H u g o M i l l e r a n d G r e g B e n s i n g e r | AT&T Inc. (T) , the second-largest U.S.
wireless carrier, said it won’t release software to customers
that enables e-mail on Research In Motion Ltd. (RIM) ’s BlackBerry
PlayBook that went on sale today until tests are complete. “We’ve only just received the app for testing, and we want
to make sure it will deliver a quality experience before we make
it available to our customers,” Mark Siegel , a spokesman for
Dallas-based AT&T, said today in an e-mail message. RIM, the Waterloo, Ontario-based company that began selling
the PlayBook in stores across Canada and the U.S. today, is
battling mixed reviews from technology columnists who criticized
the 7-inch tablet for lacking a built-in e-mail program and
cited an inability to connect to mobile-phone networks. “This seems to be an execution stumble,” said Tero Kuittinen, an MKM Partners LLC analyst in Stamford , Connecticut .
“We know they were rushing to get this product to market, but
you’d think they could get it to people sooner for testing.” He
has a “buy” rating on RIM. Marisa Conway, a spokesman for RIM, did not immediately
return messages seeking comment. Jim Balsillie, RIM’s co-chief
executive officer, said April 15 the criticism wasn’t fair and
that it shouldn’t be a problem for customers who can pair their
BlackBerrys to their PlayBooks to read e-mail, calendar and
contacts database using software known as BlackBerry Bridge. Summer Release The company has said it plans to release an e-mail program
for the Playbook this summer. RIM dropped $1.61, or 2.9 percent, to $53.22 in Nasdaq
Stock Market trading at 4 p.m. New York time. The stock has lost
14 percent in the past month and declined in 12 of the last 15
trading days. Aside from critical reviews, RIM is competing with Apple
Inc. (AAPL) ’s iPad, which has exceeded 15 million sales in the past
year. Consumer demand for the PlayBook, which went on sale today
at 20,000 stores across Canada and the U.S., appeared to be
muted. The Staples Inc. (SPLS) store in Toronto’s business district
opened an hour early and had no lines. Best Buy Inc.’s main
store in downtown Toronto opened at 7 a.m., and had sold about
20 to 25 PlayBooks by 10 a.m, said Manish Nargas, a store
manager. The ability to pre-order the device and the critical
reviews may have contributed to a lack of foot traffic, he said. “We were expecting a lot more,” said Nargas. “It’s a
little disappointing.” RIM is counting on its traditional base of business and
government customers to embrace the PlayBook. The company is
touting the device’s portability and support for Flash
technology, used to play video on many websites. The iPad
doesn’t play Flash content. Customers Looking Kevin Gopaul, chief investment officer of BMO Asset
Management in Toronto, was one of two customers in the Best Buy
store trying out the PlayBook at midmorning today. The device’s ability to run presentations on a larger
screen using a cable while allowing the user to run separate
programs on the PlayBook was compelling, said Gopaul, 35. “That’s perfect for me,” for client meetings, he said. Customers that don’t already have a BlackBerry smartphone
to pair their phones and PlayBooks to read e-mail and connect to
the Internet seemed less convinced. “Lack of e-mail, how can you not have that on the
PlayBook,” said Eloi Fagundes, a 35-year-old nurse, as he
browsed the selection of tablets at Best Buy in Toronto. To contact the reporters on this story:
Hugo Miller in Toronto at
hugomiller@bloomberg.net ;
Greg Bensinger in New York at
gbensinger1@bloomberg.net To contact the editor responsible for this story:
Peter Elstrom at
pelstrom@bloomberg.net | ||||||
2011-04-19 00:00:00 UTC | Greek Sovereign Debt Risk Rises to Record on Restructuring Bets | http://www.bloomberg.com/news/2011-04-19/sovereign-debt-risk-falls-as-investors-pare-restructuring-bets.html
| B y A b i g a i l M o s e s | The cost of insuring Greek
sovereign debt rose to a record as speculation increased the
nation will be forced to restructure its debt. Credit-default swaps on Greece rose 7 basis points to
1,260, surpassing yesterday’s record closing level, according to
CMA. Comments by unnamed officials that a restructuring is
inevitable hold no validity, Greece’s government spokesman
George Petalotis said today. Standard & Poor’s decision
yesterday to assign a “negative” outlook to the AAA credit
rating of the U.S. also weighed on sentiment. “We still think a default/restructuring is the most likely
outcome for Greece, but it’s a question of timing,” said
Harpreet Parhar, a strategist at Credit Agricole SA in London.
“The story, though denied by the government, is gaining
traction.” Swaps on other European governments fell for the first time
in more than a week. The Markit iTraxx SovX Western Europe Index
of credit-default swaps on 15 governments declined 0.5 basis
point to 189, after climbing to the highest since January
yesterday. Contracts on Portugal dropped from a record, falling
3 basis points to 618. Ireland decreased 4 basis points to 603, Italy fell 5 to
155 and Spain was 5.5 lower at 249.5. A decline signals
improvement in perceptions of credit quality . Financial Index The cost of insuring against losses on European bank bonds
also fell. The Markit iTraxx Financial Index linked to the
senior debt of 25 banks and insurers decreased 2 basis points to
137, and the subordinated index was down 2.5 at 240.5, according
to JPMorgan Chase & Co. The Markit iTraxx Crossover Index of 40 companies with
mostly high-yield credit ratings fell 6 basis points to 376. The
Markit iTraxx Europe Index of 125 companies with investment-
grade ratings fell 0.5 to 101.25. A basis point on a credit-default swap protecting 10
million euros ($14.3 million) of debt from default for five
years is equivalent to 1,000 euros a year. Swaps pay the buyer
face value in exchange for the underlying securities or the cash
equivalent should a borrower fail to adhere to its debt
agreements. To contact the reporter on this story:
Abigail Moses in London at
Amoses5@bloomberg.net To contact the editor responsible for this story:
Paul Armstrong at
Parmstrong10@bloomberg.net | ||||||
2011-04-19 00:00:00 UTC | Nasdaq OMX Offers to Pay NYSE $350 Million Should Merger Fail | http://www.bloomberg.com/news/2011-04-19/nasdaq-omx-offers-to-pay-nyse-350-million-should-merger-fail.html
| B y W h i t n e y K i s l i n g | Nasdaq OMX Group Inc. (NDAQ) and
IntercontinentalExchange Inc. (ICE) said they are willing to pay NYSE
Euronext $350 million if antitrust authorities block their
proposed takeover, an offer they say is now based on “fully
committed financing” of $3.8 billion. The statements were included in a letter to NYSE Euronext’s
board, which on April 10 rejected the unsolicited $11.3 billion
proposal and affirmed its February agreement to merge with
Deutsche Boerse AG (DB1) for $9.5 billion in stock. The agreement with
Deutsche Boerse AG includes a payout of 250 million euros ($357
million) should that deal fall apart. Nasdaq OMX and ICE said
they received $3.8 billion in commitment letters from lenders. “NYSE shareholders are probably very concerned about
antitrust issues, and here they’ve done a couple things to try
to address their concerns,” said Ed Ditmire , a New York-based
analyst at Macquarie Group Ltd. “That’s at the heart of what
will decide their fate.” NYSE Euronext (NYX) ’s board said it favored the Deutsche Boerse
merger because the Nasdaq OMX-ICE bid would lead to too much
debt and had “unacceptable” risks, including antitrust review.
Both sides have been meeting with NYSE Euronext shareholders to
convince them their deal is superior and discuss further
financial incentives. Director Support Greifeld and Sprecher said they are in discussions with the
antitrust division of the U.S. Justice Department . The companies
also plan to buy $66 million of NYSE Euronext stock with voting
rights , an action that they said will trigger the Justice
Department’s procedure for vetting antitrust concern. NYSE
Euronext’s annual shareholder meeting is April 28, where owners
will vote on board members and the right to call special
meetings. “We view the addition of the reverse break-up fee in the
event we fail to obtain antitrust or competition law approvals
as being a significant improvement to your proposed Deutsche
Boerse transaction, as well as demonstrating our confidence that
we can address any antitrust or competition issues,” Robert Greifeld and Jeffrey Sprecher, chief executive officers at
Nasdaq OMX and ICE, wrote in the letter. Rich Adamonis, a spokesman for NYSE Euronext, didn’t
immediately return a phone call seeking comment. Bid Price While the reverse breakup fee may set shareholders at ease
about antitrust barriers, Nasdaq OMX and ICE stopped short of
raising the price of the offer, which includes $14.24 a share in
cash. Last week, four people with direct knowledge of the matter
said that NYSE Euronext and Deutsche Boerse are considering
financial incentives to win support for their merger. At $42.67 a share as of 9:28 a.m. New York time, the
unsolicited bid is 20 percent higher than Deutsche Boerse ’s
$35.56, according to data compiled by Bloomberg. NYSE Euronext
shares fell 1.8 percent to $38.32, curbing their advance since
the April 1 Nasdaq OMX-ICE proposal to 9 percent. Nasdaq OMX is using stock and debt for its portion of the
deal, with $2.1 billion from banks including Bank of America
Corp., Nordea Bank AB in Stockholm and Skandinaviska Enskilda
Bankeen AB and UBS AG. In addition to shares, ICE plans to offer
$1.65 billion, financed by Wells Fargo & Co. and Bank of
America, according to the statement today. Nasdaq OMX reiterated
its commitment to maintaining an investment-grade rating. Antitrust Concern The so-called reverse breakup fee is designed to allay
concerns that the U.S. government may reject a Nasdaq OMX-NYSE
Euronext takeover because it would create a monopoly in stock
listings. The Nasdaq OMX-ICE bid would break up NYSE Euronext,
giving Atlanta-based ICE the Liffe derivatives markets and
Nasdaq OMX, based in New York , the listings, equities and
options businesses, saving costs on overlapping units and
technologies. Agreeing to the Nasdaq OMX-ICE proposal would “require
shareholders to shoulder unacceptable execution risk,” NYSE
Euronext’s board said in an April 10 statement affirming its
commitment to Deutsche Boerse. Directors also cited concern the
offer would entail too much debt and destroy its “human
capital,” a reference to the firings it said would occur in the
merger. To contact the reporter on this story:
Whitney Kisling in New York at
wkisling@bloomberg.net To contact the editor responsible for this story:
Michael P. Regan at mregan12@bloomberg.net | ||||||
2011-04-19 00:00:00 UTC | Haniel Chief Kluge Says Celesio Needs Improvements, FAZ Reports | http://www.bloomberg.com/news/2011-04-19/haniel-chief-kluge-says-celesio-needs-improvements-faz-reports.html
| B y O l i v e r S u e s s | Haniel & Cie. GmbH Chief Executive
Officer Juergen Kluge said Celesio AG (CLS1) needs to improve its core
business as a drug wholesaler, Frankfurter Allgemeine Zeitung
reported, citing an interview. Haniel, which owns a majority stake in Celesio, won’t be
able to finance “continuing” acquisitions of the Stuttgart-
based company, the newspaper cited Kluge as saying. To contact the reporter on this story:
Oliver Suess in Munich at
osuess@bloomberg.net To contact the editors responsible for this story:
Frank Connelly at fconnelly@bloomberg.net
Edward Evans at eevans3@bloomberg.net | ||||||
2011-04-19 00:00:00 UTC | LVMH, Burberry Lead Luxury Stocks Gain as Sales Beat Estimates | http://www.bloomberg.com/news/2011-04-19/lvmh-burberry-lead-luxury-stocks-gain-as-sales-beat-estimates.html
| B y A n d r e w R o b e r t s | LVMH Moet Hennessy Louis Vuitton SA (MC)
and Burberry Group Plc (BRBY) led European luxury-goods stocks higher
as both companies reported quarterly revenue gains that beat
analysts’ estimates and eased concern over growth this year
after last month’s earthquake in Japan . LVMH, the world’s largest maker of luxury goods, climbed as
much as 6.3 euros, or 5.7 percent, in Paris trading, the biggest
gain in almost a year. Burberry, the U.K.’s largest luxury
retailer, rose as much as 8.6 percent to 1,245 pence in London ,
the highest since its July 2002 initial public offering. The sales reports point to continued appetite for leather
handbags, champagne and trench coats and suggest Japan’s crisis
won’t stall the industry’s global rebound. Burberry raised its
earnings guidance and Chief Executive Officer Angela Ahrendts
said she was “confident” the company would outperform peers.
LVMH cited an “excellent start to the year.” “There ought to be some initial fears allayed over
Japan,” said John Guy , an analyst at Royal Bank of Scotland
Group in London. Demand for luxury goods has revived since the global
recession of 2009 as wealthy consumers regained confidence and
retailers replenished inventories. Analysts cut estimates for
some companies last month after a March 11 earthquake and
tsunami in Japan left almost 28,000 people dead or missing and
triggered the world’s worst nuclear crisis in a quarter century. Japan is the world’s second-largest market for luxury goods
after the U.S., accounting for 11 percent of the total,
according to consulting firm Bain & Co. ‘Setting the Tone’ Revenue rose 17 percent to 5.25 billion euros ($7.5
billion) last quarter, Paris-based LVMH said in a statement
yesterday. That compared with the 4.98 billion-euro average
estimate of six analysts compiled by Bloomberg. Excluding
acquisitions and currency shifts, sales climbed 14 percent.
Japan accounts for about 8 percent of the luxury goods maker’s
total sales and sales there fell 9 percent in the quarter. LVMH, which announced in March plans to acquire Bulgari
SpA (BUL) , the world’s third-largest jeweler, aims “to increase once
again in 2011, its leadership of the global high-quality
products market,” the maker of Krug champagne said in the
statement. Sales in the U.S., Europe and Asia showed “strong
momentum,” the company said. LVMH traded 5.7 percent higher at 115.95 euros as of 3:37
p.m. in Paris. The Bloomberg index that tracks the performance
of 12 European fashion retailers increased 4.7 percent. “LVMH numbers should set the tone and the bar for other
luxury names reporting in coming weeks,” Rogerio Fujimori, an
analyst at Credit Suisse in London, wrote in a note to clients. Global Challenge Burberry today said revenue in the quarter ended March 31
rose 32 percent to 390 million pounds ($635 million). The
average estimate of three analysts compiled by Bloomberg was for
sales of 351.3 million pounds. The quarterly revenue growth was
driven by retail sales in China and the reported numbers exclude
Spain , where London-based Burberry closed a warehouse and
stopped making a local collection last year. The retailer, which gets less than two percent of sales in
Japan, raised its annual earnings guidance. Chief Financial
Officer Stacey Cartwright said adjusted pretax profit this year
would be at the top end of estimates, between 279 million pounds
and 300 million pounds. In January, she said the range was 250
million pounds to 290 million pounds. Burberry traded 7.2 percent higher at 1,228 pence as of
2:37 p.m. in London. “While the luxury industry faces global challenges in the
year ahead, we remain confident in our team’s ability to
outperform,” Burberry’sAhrendts said in the statement. To contact the reporters on this story:
Andrew Roberts in Paris at
aroberts36@bloomberg.net . To contact the editor responsible for this story:
Celeste Perri at cperri@bloomberg.net | ||||||
2011-04-19 00:00:00 UTC | Savola Quarterly Net Declines as Capital Gains Not Repeated | http://www.bloomberg.com/news/2011-04-19/savola-quarterly-net-declines-as-capital-gains-not-repeated-1-.html
| B y G l e n C a r e y | Savola (SAVOLA) Azizia United Co., a Saudi
Arabian food producer, said first-quarter profit declined 58
percent after a 2010 capital gain wasn’t repeated and global
commodity prices hurt margins. Net income dropped to 165.2 million riyals ($44 million),
or 0.33 riyal a share, from 394 million riyals, or 0.79 riyal a
share, a year earlier, the company said in a statement to the
Saudi bourse today . That fell short of the mean estimate of
186.3 million riyals by three analysts surveyed by Bloomberg. Jeddah-based Savola has expanded its retail business to
meet rising demand in the Arab world’s biggest economy. Savola
has 113 outlets in the kingdom and it also refines sugar in
Egypt , the Arab world’s most populous nation. First-quarter profit retreated because of capital gains of
196 million riyals from the initial public offering of Herfy
Food Services Co. (HERFY) during the first quarter of 2010, the company
said in its statement, citing Managing Director Abdul Raouf Mannaa. First-quarter revenue increased 17 percent to 5.6
billion riyals from a year earlier, it said. Savola shares lost 2.2 percent, the biggest drop since
March 15, to 26.7 riyals at 12:29 p.m. in Riyadh. Commodity Prices Higher global commodity prices have “impacted negatively
on the margins,” Savola said in the statement. First-quarter operating profit fell 13 percent to 288.3
million riyals, the company said in the statement. This drop was
“mainly due to the increase in selling, marketing and
administrative expenses for the retail stores opened by the
group during last 12 months,” the company said. The company will pay a dividend of 0.25 riyal a share, or
125 million riyals, for the first quarter. Savola forecasts net
income before capital gain of 225 million riyals for the second
quarter of 2011, according to the company statement. To contact the reporter on this story:
Glen Carey in Riyadh at
gcarey8@bloomberg.net To contact the editor responsible for this story:
Shaji Mathew at
shajimathew@bloomberg.net | ||||||
2011-04-19 00:00:00 UTC | Serb Central Bank Says Inflation to Slow From Third Quarter | http://www.bloomberg.com/news/2011-04-19/serb-central-bank-says-inflation-to-slow-from-third-quarter.html
| B y G o r d a n a F i l i p o v i c | Serbian inflation should start
slowing in the third quarter, reaching the central bank’s target
range in the first half of next year, policy makers said today. Food costs have fueled consumer prices, which rose at an
annual rate of 14.1 percent in March, the biggest jump since
June 2008, the Belgrade-based Narodna Banka Srbije said today in
a letter to the government. Inflation has exceeded the central
bank’s 3 percent to 6 percent target for six consecutive months. “The pace of bringing inflation down toward the target
will largely depend on the success of the 2011-2012 farming
season,” the central bank said in the letter on its website. The National Bank of Serbia raised its benchmark interest
rate to 12.5 percent, the highest in Europe , from 8 percent over
the past eight months to curb prices. The bank said it expects
the rate increases to begin slowing inflation in coming months,
and it will “assess in the coming period if any additional
tightening is necessary.” The bank holds its next rate-setting
meeting on May 12. To contact the reporter on this story:
Gordana Filipovic in Belgrade at
gfilipovic@bloomberg.net To contact the editor responsible for this story:
James M. Gomez at
jagomez@bloomberg.net | ||||||
2011-04-19 00:00:00 UTC | Kenya Commercial Bank May Get Loan From World Bank, Business Daily Reports | http://www.bloomberg.com/news/2011-04-19/kenya-commercial-bank-may-get-loan-from-world-bank-business-daily-reports.html
| B y E r i c O m b o k | Kenya Commercial Bank Ltd. (KNCB) is set
receive a $105 million loan from the World Bank to support its
regional mortgage business, the Business Daily reported on its
website. The final details of the proposed credit line from the
International Finance Corp., the World Bank’s private lending
arm, will be discussed at a board meeting due on June 7, the
newspaper said. To contact the reporter on this story:
Eric Ombok in Nairobi at
eombok@bloomberg.net To contact the editor responsible for this story:
Victoria Batchelor at
vbatchelor@bloomberg.net | ||||||
2011-04-19 00:00:00 UTC | Lamborghini’s China Sales May Outpace U.S. on Aventador | http://www.bloomberg.com/news/2011-04-19/lamborghini-s-china-sales-may-surpass-u-s-on-364-000-aventador.html
| B y A n d r e a s C r e m e r | Automobili Lamborghini SpA will
probably sell more supercars in China than in the U.S. for the
first time this year, a sign of the Asian country’s growing
importance to luxury-car makers. The Aventador LP 700-4, priced at 255,000 euros ($364,000)
in Europe , has sold out the first 18 months of production, and
China accounts for a fifth of buyers so far, Chief Executive
Officer Stephan Winkelmann said in an interview today at the
Shanghai auto show. Sales may grow further when deliveries start
in the third quarter. “I believe that China will become our most important
market this year,” Winkelmann said. “Customer feedback on the
Aventador is sheerly incredible here. There’s more to come when
the car visibly arrives.” Luxury-car makers, including Bayerische Motoren Werke AG (BMW)
and Daimler AG (DAI) ’s Mercedes-Benz, are recording surging demand in
the world’s largest car market, as growing wealth defies the
government’s efforts to clamp down on conspicuous consumption.
The U.S., traditionally the stronghold of luxury-auto demand, is
suffering from the after effects of excessive spending during
the real estate boom. “You’ve got a growing number of millionaires and
billionaires that are prepared to show their wealth,” said Ian Fletcher , a London-based analyst with IHS Automotive. “It
doesn’t help that the U.S. has become awash in $300,000 cars off
the back of the bubble. Everyone who wanted a Lamborghini
Gallardo has one by now, while in China it’s a new toy thing.” Luxury Demand Luxury-car sales in China may rise 20 percent this year,
while the overall passenger-vehicle market’s growth could slow
to about 12 percent, according to industry researcher J.D. Power
& Associates. “The premium segment is probably going to grow faster than
the overall volume sector” in China, BMW’s sales chief Ian Robertson said in Shanghai. “We expect strong double-digit
growth for the full year.” The prospects have prompted expansion plans by high-end
carmakers. Volvo Cars, the Swedish carmaker owned by Zhejiang
Geely Holding Group Co., is considering building a second
production plant in China to meet unexpected demand, Chief
Executive Officer Stefan Jacoby said today in Shanghai. Mercedes
aims to double car sales in China to 300,000 by 2015, Klaus Maier, the head of Mercedes’ operations in China, said today. Aventador Model The Aventador, replacing Lamborghini’s top-of-the-line
Murcielago model, has a 700-horsepower V12 engine that surges to
100 kilometers (62 miles) per hour in 2.9 seconds. The
Volkswagen AG (VOW) division, which competes with Fiat SpA (F) ’s Ferrari,
wants to decide by the end of the year whether to add a third
model to complement the Aventador and Gallardo lines. Sant’Agata Bolognese, Italy-based Lamborghini is counting
on the Aventador to help capitalize on surging demand for luxury
autos in the world’s largest auto market. The VW unit is aiming
to more than double China-based dealerships to 20 this year from
nine in 2009, the CEO said. Lamborghini wants to use a customer reception in Shanghai
today to further stoke demand for the Aventador. The carmaker
will use the event to present a special edition called the
Gallardo LP 550-2 Tricolore, limited to 150 cars to mark the
150th anniversary of Italian unity, the CEO said. The Gallardo
LP 550-2 will be mainly sold across Asia . Global sales at Lamborghini fell 14 percent last year to
1,302 autos as the carmaker ended production of the Murcielago
in May 2010. Chinese deliveries more than doubled to 206 cars
from 80 in 2009. To contact the reporter on this story:
Andreas Cremer in Shanghai via
acremer@bloomberg.net . To contact the editor responsible for this story:
Chad Thomas at
cthomas16@bloomberg.net |