UPDATE 1-Bayer profit misses estimates on generic rivalry

July 30, 2010 By Leave a Comment

FRANKFURT, July 29 (Reuters) – Bayer’s (BAYGn.DE) quarterly earnings fell short of market expectations because generic competition for its two best-selling drugs overshadowed a rebound at its plastics unit.

In the second quarter, group underlying profit — or earnings before interest, taxes, depreciation and amortisation (EBITDA) before special items — rose 8.6 percent to 1.92 billion euros, Germany’s largest drugmaker, said on Thursday.

Analysts had expected adjusted EBITDA, which serves as the group’s main gauge of success, to rise to 1.98 billion. [ID:nLDE66P093] Quarterly net income of 525 million euros at the maker of cancer drugs, weed killers and car coatings also missed the 768 million estimated by analysts.

Generic-drug industry leader Teva (TEVA.TA) has brought a copycat version of Bayer’s YAZ birth-control pill to U.S. markets earlier than expected, while a generic version by Novartis (NOVN.VX) is chipping away at sales of blockbuster multiple sclerosis drug Betaferon. [ID:nLDE6501SV] [ID:nN29138356]

Bayer, the inventor of Aspirin and synthetic rubber, is meanwhile pinning its hope on potential blockbuster Xarelto, an experimental blood thinner for stroke prevention for which crucial test results are expected this year.

The group reiterated it expected 2010 core adjusted operating profit above 7 billion euros ($9.1 billion) as a rosier outlook for its plastics and foams unit MaterialScience offset expected weakness in drugs and crop chemicals sales.

The group’s CropScience division, one of the world’s largest makers of conventional pesticides, was hit by an unusually cold winter, followed by a hot and dry summer in the Northern Hemisphere.

(Reporting by Ludwig Burger)

Filed Under: International News Tagged With: , , , , , , , , , , , , , , , , , , ,

UPDATE 1-Sanofi Q2 beats market; mum on Genzyme bid talk

July 30, 2010 By Leave a Comment

PARIS, July 29 (Reuters) – Sanofi-Aventis (SASY.PA) beat second-quarter earnings expectations as it beefed up sales and tightened its R&D spending, but the French drugmaker gave no hint in its results statement of any acquisition plans.

Sources told Reuters late on Wednesday that Sanofi plans to make a formal offer of up to $18.7 billion, or $70 per share, for U.S. biotech Genzyme (GENZ.O) as it seeks to replenish its drug pipeline and make up for the loss of patent protection on blockbuster drugs in the years through 2013. [ID:nN28226612]

Quarterly earnings beat the average outcome of a Reuters poll on all fronts as Sanofi tightened spending, and as sales were driven by its diabetes division, emerging markets and consumer health.

Business net income rose 7.6 percent to 2.478 billion euros ($3.22 billion) versus the poll’s average of 2.32 billion euros. Earnings per share climbed 8 percent to 1.90 euros versus the poll’s 1.78 euros.

Sales increased 4.6 percent to 7.783 billion euros even as competition grew from generic copies of bloodthinner Plavix and cancer drug Eloxatin, and as vaccine sales declined.

The U.S. health regulator’s approval of a generic to bloodthinner Lovenox led Sanofi last week to cut its earnings per share forecast to between stable and 4 percent lower at constant exchange rates from 2-5 percent growth against 2009.

For 2013, Sanofi expects sales to be at least at 2008′s level of 27.57 billion euros, and business net income to be similar to the 2008 level of 7.314 billion euros.

Those forecasts take into account the arrival of a Lovenox copy as well as government healthcare spending cuts, and exclude acquisitions above 1 billion euros, like consumer health company Chattem and a stake in Merial animal health that Sanofi did not already own.

Sanofi expected cost savings, including on R&D, to exceed 1 billion euros at constant exchange rates this year from the 2008 level and compared with a 2013 savings goal of 2 billion euros.

MUM ON MERGERS

In its earnings statement on Thursday, Sanofi did not comment on its acquisition strategy for which CEO Chris Viehbacher has set a limit of 15 billion euros, though never entirely dismissing a bigger deal.

Last year, Sanofi invested 6.6 billion euros on 33 new partnerships and acquisitions and has said it would do a similar number of deals this year to further branch out its business and address unmet medical needs.

A bigger move could be on the cards, however, as more than a fifth of Sanofi’s 2008 drug sales — excluding a generic Lovenox — face patent expiries to 2013, and its drug portfolio can’t offset that loss.

Sanofi’s net debt rose to 6.17 billion euros in the first half from 4.14 billion euros at end-2009, while net cash from operating activities stood at 4.2 billion euros.

Sanofi shares closed 0.6 percent higher at 45.43 euros on Wednesday. The stock is down about 17.5 percent so far this year, underperforming a 1.9 percent dip in the DJ health index .SXDP.

Filed Under: International News Tagged With: , , , , , , , , , , , , , , , , , , ,

UPDATE 1-Polish Millennium loosens credit policy in H1

July 28, 2010 By Leave a Comment

WARSAW, July 27 (Reuters) – Bank Millennium BIGW.WA, one of Poland’s lenders hardest hit by the global financial crisis, said on Tuesday it had loosened its credit policy in the first half on an improving economic environment.

The bank, which is controlled by Portugal’s Millennium bcp (BCP.LS), slammed the brakes on its lending more than a year ago after interbank markets dried up and the Polish zloty tumbled, hurting its credit book, which included a large number of foreign currency mortgages.

“The change of the economic situation confirmed by the economic indicators and the improved condition of corporations in the first quarter of 2010 allowed for a change in internal credit policy of the bank taken on at the turn of 2008 and 2009,” Millennium said.

The bank, which boosted its capital by 1 billion zlotys ($318 million) at the beginning of this year, said its first half net profit rose to 138 million zlotys from 21 million in the same period of 2009 thanks to lower bad loan provisions and stronger revenue.

Analysts expected Millennium to earn 134 million zlotys, according to a Reuters poll of nine analysts.

Millennium is the first Polish lender to report results after the second quarter.

It did not break out a quarterly earnings figure for the three months ending in June, but according to Reuters calculations it stood at 70 million zlotys.

Millennium shares have risen 13 percent this year compared with a 7 percent gain of Warsaw’s banking index .BNKI. ($1=3.142 Zloty) (Reporting by Chris Borowski; editing by Simon Jessop)

Filed Under: International News Tagged With: , , , , , , , , , , , , , , , , , , ,

BAY STREET-Rough sailing for Canadian insurers’ results

July 26, 2010 By Leave a Comment

TORONTO, July 25 (Reuters) – Investors hoping for improved results from Canada’s insurers may want to brace for disappointment, with weak stock markets and lower bond yields seen taking take a bite out of quarterly earnings.

Analysts said the weaker results expected for the second quarter could further pressure shares in a sector that steadily underperformed the broader market in recent months. Though some think the gloominess may be largely baked into stock prices.

Canada’s insurers are highly levered to the performance of financial markets. They hold billions in assets to cover off future obligations such as settlements and annuities.

If those assets decline in value, insurers are forced to build up reserves using cash taken directly from earnings.

The second quarter “is going to be messy for Canadian life insurers,” TD Securities analyst Doug Young said in a note.

“Falling equity markets and declining interest rates created the ‘perfect storm’ for (insurance) business models.”

Sector heavyweights Manulife Financial (MFC.TO), Sun Life Financial (SLF.TO), and Great-West Lifeco (GWO.TO) enjoyed strong results in the first quarter, as stock markets surged while economic optimism boosted sales.

The big players also have wealth management businesses that benefit from higher fees when stock market returns are strong.

But the upward trend has appeared to have stalled, with the Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE down 6.2 percent during the quarter.

“The gyrations in the markets, I think have affected opportunities in the market place,” said Brenda Lum, a financial services analyst at rating agency DBRS.

“That plays in specifically for companies that rely on mark to market returns or flow business.”

Another challenge for the insurers has been a decline in Canadian and U.S. bond yields on demand from investors seeking safer assets.

While the trend benefits their existing bond holdings, it also means returns going forward are likely to be lower. And insurers that hold bonds to pay for future liabilities would now have to buy more of them.

^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ StarMine Comparative Analysis: link.reuters.com/sam39m

^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^

FLURRY OF CUTS

TD’s Young is one of several analysts that have cut stock ratings and price targets on the sector in recent weeks to take into account the market’s drop during the quarter.

He cut stock targets on all three big players last week, and downgraded Great-West and Manulife — Canada’s largest insurer — to “hold” from “buy”.

He also adjusted his second-quarter estimate on Manulife to a loss of 95 Canadian cents a share, compared with his previous forecast of a profit of 30 Canadian cents.

Manulife is seen as the insurer most tied to equity prices and interest rates, while smaller Industrial Alliance (IAG.TO) — Canada’s No. 4 player, which kicks off results on Tuesday — is seen the least vulnerable to markets.

Canaccord Genuity analyst Mario Mendonca expects Manulife to take a C$1 billion ($960 million) charge related to the weaker equity markets, and a C$300 million charge due to declining long-term corporate bond yields.

CIBC World Markets analyst Robert Sedran chopped his price targets on Great-West and Manulife, while also downgrading Manulife and predicting a loss.

Like other analysts, he said Canada’s banks were likely a better investments for buyers seeking financial stocks.

HOPE AMID THE GLOOM

However, Sedran said insurers’ stocks may already be reflecting the gloomy news and could get a boost if the results aren’t as bad as many are now predicting.

“You have to assume the market is expecting a bad result, so a less bad result will probably be good for the stocks,” he said.

Manulife’s shares have fallen 25 percent since the end of the first quarter and are trading at less than half their value from before the 2008 market crash.

Sun Life and Great-West, which are each expected to report profits, are down 17 percent and 16 percent, respectively, since the end of March. Industrial Alliance is down 1 percent.

The broader market is down 3 percent in that time.

Desjardins Securities analyst Michael Goldberg said in a note that the insurers are trading at a significant discount to their normal valuations. He maintained Manulife as a “top pick” despite the expected weak results. He has Sun Life at “buy” and rates Great-West a “hold”.

($1=$1.04 Canadian) (Reporting by Cameron French, additional reporting by Euan Rocha; Editing by Jeffrey Hodgson and Rob Wilson)

Filed Under: International News Tagged With: , , , , , , , , , , , , , , , , , , ,

Indian shares hit 2-½ year high; Wipro gains

July 24, 2010 By Leave a Comment

MUMBAI, July 23 (Reuters) – Indian shares rose to their
highest level in two-and-a-half years on Friday, bouyed by a
rally in world equities and better-than-expected quarterly
earnings by outsourcer Wipro (WIPR.BO).

Export-driven software services companies were among the
gainers after Wipro posted a 31 percent rise in quarterly
profit said it was seeing strong business environment.
[ID:nSGE66K09K]

Wipro rose as much as 4.2 percent to 433 rupees. If it
rises past 451.80, it would be the highest level in a decade,
data from Thomson Reuters showed.

“For the IT sector, demand environment is good. Also,
pricing scene is stable and improving,” said Deven Choksey,
managing director and CEO of KR Choksey Shares.

He expects a 15-20 percent upside for tier-I IT stocks.

Bigger rivals Tata Consultancy Services (TCS.BO) rose as
much as 0.9 percent to a record high of 850 rupees, while
Infosys Technologies (INFY.BO) was up 0.6 percent.

By 11:12 a.m. (0542 GMT), the 30-share BSE index .BSESN
was trading up 0.32 percent at 18,171 points — after hitting
18,237.56, its highest level since February 2008.

Eighteen of its components were trading in the green.

In the broader market, gainers led losers in a ratio of
1.3:1 on volume of 139 million shares.

Foreign funds have poured $8.8 billion into Indian equities
this year, driving the benchmark index up more than 4 percent.
In 2009, they had bought a record $17.5 billion of stocks and
helped power an 81 percent rally.

Asian stocks rose as strong earnings from economic
bellwethers such as Caterpillar (CAT.N) tempered concerns about
a global slowdown. [MKTS/GLOB]

“Global cues will remain uncertain for a while. But a lot
of corrective measures which are taken, will prevent the
economies from going down under,” said Choksey.

The 50-share NSE index was up 0.3 percent at
5,459.35.

Brokerage Sharekhan said the hourly momentum indicator
showed an upside was gaining strength.

Top-listed biotechnology firm Biocon (BION.BO) slipped 1.3
percent after it reported a lower-than-expected 33 percent
rise
quarterly profit.

Energy giant Reliance Industries (RELI.BO), which has the
highest weight on the Sensex, climbed 0.3 percent to 1,062
rupees.

Cigarette-to-hotel group ITC (ITC.BO) added 0.7 percent
after rising 1.6 percent on Thursday following a 22 percent
rise in quarterly profit. [ID:nBMA008051]

STOCKS ON THE MOVE

* Credit rating firm Crisil (CRSL.BO) was down 2.8 percent
at 5,700 rupees, after the unit of Standard & Poor’s Corp said
late on Thursday its net profit fell 13 percent. [ID:nWNBS0573]

* Dr Reddy’s Laboratories (REDY.BO) shed 1.3 percent to
1,363.10 rupees, extending losses after the drugmaker said on
Thursday consolidated quarterly profit fell a
more-than-expected 14.3 percent following a drop in sales in
its key U.S. market. [ID:nSGE66L0K3]

* JSW Steel (JSTL.BO) was up nearly 1 percent at 1,213
rupees, after a report said JFE Holdings Inc (5411.T), Japan’s
second-biggest steelmaker, plans to invest about $1 billion in
the Indian firm. [ID:nTOE66M038]

MAIN TOP THREE BY VOLUME

* NHPC (NHPC.BO) on 4.7 million shares

* Shree Ashtavinayak (SACV.BO) on 4.7 million shares

* IFCI (IFCI.BO) on 3.3 million shares

FACTORS TO WATCH
* For technical analysis double click on www.reutersindia.net
* Indian rupee report
[INR/]
* Indian bond report
[IN/]
* Euro steadies vs dollar before stress test results
[FRX/]
* Oil slips from 11-week high on demand uncertainty
[O/R]
* Asia stocks up, euro firm, eyes stress tests
[MKTS/GLOB]
* Earnings lift Wall St, but Amazon.com plunges
[.N]
* For closing rates of Indian ADRs
INADR

Filed Under: International News Tagged With: , , , , , , , , , , , , , , , , , , ,

Stora Enso Interim Review January-June 2010

July 23, 2010 By Leave a Comment

HELSINKI, Finland, July 22, 2010 (GLOBE NEWSWIRE) — Best quarterly earnings
since second quarter of 2007 – testimony to early actions combined with volume
recovery;

EUR 213 million quarterly operating profit excluding NRI and fair valuations, up
year-on-year by EUR 164 million driven by volume recovery combined with reduced
cost base, currency rate impact and pulp price strength;

Quarterly operating profit margin excluding NRI and fair valuations increased
year-on-year to 7.9% (2.2%), ROCE excluding NRI and fair valuations 10.5% (2.3%)
Quarterly EPS excluding NRI improved year-on-year to EUR 0.22 (0.06) and CEPS
excluding NRI to EUR 0.38 (0.24);

Quarterly cash flow from operations and cash position strong at EUR 305 million
and EUR 856 million respectively;

Sequential price increases realised for most of the Group’s products; Structural
overcapacity in Europe remains, most clearly in publication paper.

Summary of Second Quarter Results

———————————————————————
Q2/10 Q1/10 Q2/09
———————————————————————
Sales EUR 2 692.2 2 295.9 2 184.8
million
———————————————————————
EBITDA excl. NRI and fair EUR 329.8 232.1 190.4
valuations million
———————————————————————
Operating Profit excl. NRI EUR 212.9 119.4 48.5
and Fair Valuations million
———————————————————————
Operating profit/loss (IFRS) EUR 215.6 123.4 -209.4
million
———————————————————————
Profit before tax excl. NRI EUR 201.5 136.8 47.2
million
———————————————————————
Profit/loss before tax EUR 193.0 117.9 -370.6
million
———————————————————————
Net profit excl. NRI EUR 168.4 121.0 44.9
million
———————————————————————
Net profit/loss EUR 159.9 102.1 -368.3
million
———————————————————————
EPS excl. NRI EUR 0.22 0.15 0.06
———————————————————————
EPS EUR 0.20 0.13 -0.46
———————————————————————
CEPS excl. NRI EUR 0.38 0.31 0.24
———————————————————————
ROCE excl. NRI % 11.0 7.2 2.8
———————————————————————
ROCE excl. NRI and fair % 10.5 6.0 2.3
valuations
———————————————————————
Fair valuations include synthetic options net of realised and open hedges, CO2
emission rights, and valuations of biological assets related to forest assets in
equity accounted investments.

NRI = Non-recurring items. These are exceptional transactions that are not
related to normal business operations. The most common non-recurring items are
capital gains, additional write-downs, provisions for planned restructuring and
penalties. Non-recurring items are normally specified individually if they
exceed one cent per share.

Near-term Outlook

The outlook for the third quarter is mixed and still uncertain. Market demand in
all paper segments is expected to remain clearly below the pre-crisis levels of
2008. Prices are forecast to be slightly higher or higher than in the second
quarter of 2010 in many of the segments. Increasing inflation in variable costs,
especially in wood, will burden the third quarter clearly more than the second
quarter. In addition, significant maintenance stoppages will negatively affect
this year’s third quarter results, as described in detail in the segment
reports. Continued focus on costs and capacity management is required to operate
at acceptable profit level. Wood Products is facing pressure on profitability
due to rapidly increasing sawlog costs.

In Europe demand for newsprint is expected to be similar to the third quarter of
2009 and the second quarter of 2010. Demand for coated magazine paper is
forecast to be stronger than a year earlier and seasonally stronger than in the
second quarter of 2010. Demand for uncoated magazine paper is forecast to be
unchanged on the third quarter of 2009 but better than in the second quarter of
2010 due to seasonal factors.

Fine paper demand is expected to be stronger than in the third quarter of 2009
and seasonally weaker than in the second quarter of 2010. In consumer board and
industrial packaging, demand is predicted to be stronger than in the third
quarter of 2009 but similar to the second quarter of 2010. Demand for wood
products is expected to be stronger than a year ago but seasonally weaker than
in the second quarter of 2010 and well below normal. In overseas markets
newsprint demand is forecast to increase slightly.

In Europe slight recovery in newsprint prices is anticipated from the third
quarter onwards. However, prices are still expected to stay clearly below 2009
levels. Further increases in newsprint prices are foreseen in overseas markets.
Higher magazine paper prices than in the second quarter of 2010 are predicted.
Fine paper prices are expected to rise during the third quarter of 2010.
Consumer board prices are forecast to increase for non-contractual business.
Some selective increases are anticipated in the prices of industrial packaging
grades and wood products.

In China demand for uncoated magazine paper is expected to decline seasonally to
the level of a year ago but prices are forecast to rise slightly. Demand for
coated fine paper is predicted to be stronger than a year ago but similar to the
second quarter of 2010. However, start-ups of new capacity continue to strain
the supply and demand balance, and lower coated fine paper prices are foreseen.

In Latin America demand for coated magazine paper is expected to be slightly
weaker than a year ago due to inventory build-ups but stronger than in the
second quarter of 2010. Slight rises in prices are anticipated.

The Group now expects its cost inflation excluding internal actions to be 2% -
instead of 1% as forecast in April – for the full year 2010, including the
impact of purchased pulp price increases. As the net market pulp position of the
Group is positive, the earnings impact of market pulp is positive.

The full-length version of the Stora Enso interim review is available on the
Stora Enso website at www.storaenso.com/investors

Stora Enso’s third quarter results 2010 will be published on 27 October 2010.

Stora Enso is a global paper, packaging and wood products company producing
newsprint and book paper, magazine paper, fine paper, consumer board, industrial
packaging and wood products. The Group is the world leader in forest industry
sustainability. We offer our customers solutions based on renewable raw
materials. Our products provide a climate-friendly alternative to many
non-renewable materials, and have a smaller carbon footprint. Stora Enso is
listed in the Dow Jones Sustainability Index and the FTSE4Good Index. Stora Enso
employs some 27 000 people worldwide, and our sales in 2009 amounted to EUR 8.9
billion. Stora Enso shares are listed on NASDAQ OMX Helsinki (STEAV, STERV) and
Stockholm (STE A, STE R). In addition, the shares are traded in the USA as ADRs
(SEOAY) in the International OTCQX over-the-counter market.

It should be noted that certain statements herein which are not historical
facts, including, without limitation those regarding expectations for market
growth and developments; expectations for growth and profitability; and
statements preceded by “believes”, “expects”, “anticipates”, “foresees”, or
similar expressions, are forward-looking statements within the meaning of the
United States Private Securities Litigation Reform Act of 1995. Since these
statements are based on current plans, estimates and projections, they involve
risks and uncertainties, which may cause actual results to materially differ
from those expressed in such forward-looking statements. Such factors include,
but are not limited to: (1) operating factors such as continued success of
manufacturing activities and the achievement of efficiencies therein, continued
success of product development, acceptance of new products or services by the
Group’s targeted customers, success of the existing and future collaboration
arrangements, changes in business strategy or development plans or targets,
changes in the degree of protection created by the Group’s patents and other
intellectual property rights, the availability of capital on acceptable terms;
(2) industry conditions, such as strength of product demand, intensity of
competition, prevailing and future global market prices for the Group’s products
and the pricing pressures thereto, price fluctuations in raw materials,
financial condition of the customers and the competitors of the Group, the
potential introduction of competing products and technologies by competitors;
and (3) general economic conditions, such as rates of economic growth in the
Group’s principal geographic markets or fluctuations in exchange and interest
rates.

-0-
CONTACT: Stora Enso
Jouko Karvinen, CEO
+358 2046 21410
Markus Rauramo, CFO
+358 2046 21121
Ulla Paajanen-Sainio, Head of Investor Relations
+358 2046 21242
Lauri Peltola, Head of Communications
+358 2046 21380
www.storaenso.com
www.storaenso.com/investors

Filed Under: International News Tagged With: , , , , , , , , , , , , , , , , , , ,

UPDATE 1-Malaysia’s Public Bank posts higher Q2 on loan growth

July 21, 2010 By Leave a Comment

KUALA LUMPUR, July 20 (Reuters) – Malaysia’s third largest lender by assets, Public Bank (PUBM.KL), reported a 20 percent rise in second quarter earnings boosted by strong domestic loans growth and and higher non-interest income.

The bank, which also has subsidiaries in Hong Kong and Cambodia, said second-quarter net profit rose to 734.08 million ringgit ($227.6 million) up from 610.7 million a year ago.

The bank expects to meet its targeted loan growth rate of 15 percent for 2010 and said it sees satisfactory performance for the rest of the year.

“The Malaysian economy is expected to remain intact this year and we expect the Malaysian economy to grow by over 6 percent for 2010, that is exceeding the official forecast,” Managing Director Tay Ah Lek said at a press conference.

Malaysia’s first-quarter economic growth surged 10.1 percent from a year earlier, its fastest growth in a decade as the Southeast Asian economy emerged from the effects of the global credit crunch. [ID:nSGE64C02S]

Malaysian banks are expected to see strong earnings expansion this year helped by the country’s economic recovery and a boost in corporate activity. Top lender Maybank (MBBM.KL) and second-ranked CIMB (CIMB.KL), which are set to report quarterly earnings in August, posted record quarterly profits in May.

In tandem with the improved economic conditions in the country, the bank recorded an increase in total loans and advances of 10 billion ringgit, a 7.3 percent growth for the first half of 2010 or a 14.6 percent annualized growth rate, to reach 147.6 billion ringgit as at the end of June 2010, Chairman Teh Hong Piow said in a statement.

First half net profit rose to 1.4 billion ringgit, accounting for about 48 percent of consensus estimates for the full-year. Malaysian analysts generally do not provide quarterly earnings forecasts.

Analysts polled before the earnings release expected Public Bank to earn 2.9 billion ringgit in net profit for the full year, according to Thomson Reuters I/B/E/S.

Shares in Public Bank were up 0.83 percent to 12.2 ringgit by 0550 GMT. The stock has gained 8.7 percent so far this year, outperforming the wider market’s .KLSE 4.8 percent gain. (Editing by David Chance)

Filed Under: International News Tagged With: , , , , , , , , , , , , , , , , , , ,

Indian shares up 0.3 pct; Reliance, L&T rise

July 21, 2010 By Leave a Comment

MUMBAI, July 20 (Reuters) – Indian shares rose 0.3 percent
on Tuesday led by gains in energy major Reliance Industries
(RELI.BO) and construction conglomerate Larsen & Toubro
(LART.BO), with mostly firmer Asian markets helping.

However, investors were cautious with a drop in U.S.
housing data showing cracks in the recovery of the world’s
largest economy.

Traders were watching foreign funds, who have moved $8.6
billion into Indian equities this year, for direction amid
concern a slower than expected global recovery could affect the
inflows.
By 11:11 a.m. (0541 GMT), the 30-share BSE index .BSESN was
trading up 0.34 percent at 17,989.12, with 19 of its components
gaining.

In the broader market, gainers were almost double the
number losers while 131 million shares changed hands.

“We are trading higher today looking at the strength in
Asian stocks,” said Kunal Sukhani, manager of institutional
equities at Asian Markets Securities.

The MSCI’s measure of Asian markets other than Japan
.MIAPJ0000PUS was up 1.3 percent, while Japan’s Nikkei
.N225 shed 1.2 percent.

<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^

For a video on Asian stocks' performance, view show:

link.reuters.com/kap48m

^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>

The BSE index is up 3 percent so far this year on the back
of rebounding domestic economy, while most of its emerging
market peers have dropped.

Reliance Industries, which has the highest weight on the
main index .BSESN, climbed 0.6 percent to 1,062.50 rupees,
while Larsen & Toubro rose 1.1 percent to 1,912.80 rupees.

Sukhani said quarterly earnings would be the key driver for
the market in the near term.

HDFC Bank (HDBK.BO) was up 0.2 percent at 2,055.25 rupees,
a day after the private-sector lender reported its strongest
profit growth in more than a year and highlighted more gains
for the booming industry on robust loan demand. [ID:nSGE66I0EL]

“Quality of earnings continues to improve on the back of
margin expansion, loan book growth, and provisioning pressure,”
Edelweiss said in a note.

“We continue to like the bank’s attractive franchisee and
overall improvement in metrics.”

The stock is just 2.6 percent of its record high hit last
week.

Iron ore exporter Sesa Goa (SESA.BO) rose 1.6 percent after
its consolidated net profit for the June quarter trebled.
[ID:nSGE66J05M]

The share was also helped after a senior government
official told Reuters on Monday India had no plans to curb iron
ore exports. [ID:nSGE66I0EY]

Tata Steel (TISC.BO), the world’s seventh-largest producer
of the alloy, and rose non-ferrous metals producer Sterlite
Industries (STRL.BO) rose 1.1 percent each, while aluminium
maker Hindalco (HALC.BO) gained 0.9 percent.

The sector was supported by gains in regional peers. The
resources index for Asian shares other than Japan
.MIAPJMT00PUS was up nearly 2 percent.

The 50-share NSE index , or Nifty, was up 0.3
percent at 5,402.40.

“We see Nifty to be rangebound between 5,300-5,450 in the
near term due to mixed cues from overseas,” Sukhani said.

STOCKS ON THE MOVE

* MindTree (MINT.BO) shed 5.2 percent to 539 rupees after
its quarterly results disappointed investors, dealers said.
[ID:nWNBS0515]

* Cairn India (CAIL.BO), a unit of Cairn Energy (CNE.L),
was up 0.3 percent at 316.15 rupees as crude oil prices rose
toward $77 a barrel.

MAIN TOP THREE BY VOLUME

* IFCI (IFCI.BO) on 3.3 million shares

* Ramsarup Industries (RASW.BO) on 1.6 million shares

* Unitech (UNTE.BO) on 1.6 million shares

FACTORS TO WATCH
* For technical analysis double click on www.reutersindia.net
* Indian rupee report [INR/]
* Indian bond report [IN/]
* Dollar hovers near lows, eyes on Japan policymakers [FRX/]
* Oil gains towards $77 on expected U.S. inventory drop [O/R]
* Asia shares rise, yen strength in focus [MKTS/GLOB]
* Wall St up on tech, but IBM, TI fall after the bell [.N]
* For closing rates of Indian ADRs INADR

Filed Under: International News Tagged With: , , , , , , , , , , , , , , , , , , ,

EURO GOVT-Bonds higher after Moody’s downgrades Ireland

July 20, 2010 By Leave a Comment

July 19 (Reuters) – German Bunds advanced nearly a fifth of a point early on Monday after Moody’s Investors Service downgraded Irish debt. [ID:nSYU010299]

Bunds had opened flat after Germany’s Finance Ministry said the euro zone’s biggest economy is likely to have grown more robustly in the second quarter than the first three months of the year.

The German prediction countered pre-market expectations of a safe-haven rally by Bunds in the face of news that Hungary failed to agree with lenders on its economic plans and risked putting Austrian debt yield spreads under pressure. [ID:nLDE66H021]]

Austria’s banking sector is highly exposed to Hungary.

By 0626 GMT, the September Bund future FGBLc1 was up 13 ticks at 129.29 since the settlement close on Friday.

The two-year Schatz yield DE2YT=TWEB was down 0.6 basis points at 0.779 percent.

Bunds are likely to be supported by expectations that equities will open weaker .FTEU3 at 0700 GMT as markets continued to absorb some poor U.S. earnings data.

On Friday, Bank of America (BAC.N), the biggest U.S. bank, slid more than 9 percent after its quarterly earnings disappointed and the S&P financial index .GSPF dropped 4.4 percent as investors fretted about how banks will make money going forward.

(Reporting by George Matlock; editing by John Stonestreet)

Filed Under: International News Tagged With: , , , , , , , , , , , , , , , , , , ,

Taiwan stocks track US lower; Cheng Uei up

July 20, 2010 By Leave a Comment

TAIPEI, July 19 (Reuters) – Taiwan stocks fell 0.19 percent
on Monday as a sharp decline on Wall Street triggered selling of
exporters including Hon Hai (2317.TW), and as investors awaited
more quarterly earnings from technology companies.

The broader electronics sub-index .TELI fell 0.09 percent
and the financial sub-index .TFNI lost 0.7 percent. However,
the tourism sector .THOI rose 1.3 percent on hopes more Chinese
tourists would visit Taiwan.

Major U.S. indexes shed more than 2 percent on Friday on
dismal consumer sentiment and anemic revenue reports from General
Electric Co (GE.N) and two big banks. [.N] More technology
companies in the United States and Taiwan are set to report
quarterly results later this month.

“The market had risen from early July and that reflected very
good June sales figures from many technology companies, but it
looks like their business in the third quarter won’t be as good
as in the second quarter,” said Andrew Deng, analyst at Taiwan
International Securities.

“Some tourism shares rose today but they are small cap shares
and their gains were not enough to push the market back to
positive territory.”

Hon Hai Precision Industry Co, the island’s top electronics
parts maker and assembler of computers for top U.S. brands, lost
1.24 percent. PC vendor Acer Inc (2353.TW) slid 1.1 percent and
LCD maker AU Optronics Corp (2409.TW) (AUO.N) fell 2.2 percent.

Their losses pulled the main TAIEX share index down
14.74 points to close at 7,649.83.

Cheng Uei Precision Industry Co (2392.TW) rose 2.7 percent
after a local newspaper report that Intel Corp (INTC.O) was
interested in taking a stake in the components maker.

In a statement to the Taiwan stock exchange on Monday, Cheng
Uei denied the report, saying it was not in talks with any
companies on a stake sale.

Top contract chipmaker TSMC (2330.TW) (TSM.N) rose 2 percent
after announcing a plan to build a new plant on Friday.
[ID:nTOE66F03G]

Despite the day’s losses, financials could regain momentum to
lead the Taipei market higher, said Robert Huang, a vice
president and trader at the proprietary trading department of
Pacific Securities.

“There’s still a chance the market will go up again because
of financial shares,” Huang said, referring to financial firms’
long-term potential gains on the mainland after China and Taiwan
signed a landmark trade deal in late June.

Huang did not rule out the TAIEX testing about 7,800 points
next week.

Foreign investors bought Taiwan shares worth a net T$4.62
billion ($144 million) on Friday, expanding their total purchases
so far this month to T$26.85 billion. [ID:nTOE65305E]
(US$1=T$32.2)

Filed Under: International News Tagged With: , , , , , , , , , , , , , , , , , , ,

Indian shares recover; Reliance Comm rallies

July 20, 2010 By Leave a Comment

MUMBAI, July 19 (Reuters) – Indian shares clawed back from
a shaky start on Monday as hopes for strong domestic economic
growth and earnings helped overcome weak global sentiment
caused by subdued U.S. economic data.

Reliance Communications (RLCM.BO) rallied as much as 3.9
percent after Financials Times reported Emirates
Telecommunications Corp ETEL.AD (Etisalat) was close to
buying a 26 percent stake in the No. 2 Indian telecoms firm.
[ID:nSGE66I05B]

Private-sector lender HDFC Bank (HDBK.BO) was up 0.7
percent ahead of its quarterly earnings.

By 11:03 a.m. (0533 GMT), the 30-share BSE index .BSESN
was trading up 0.22 percent at 17,994.71, with 17 of its
components gaining. The benchmark had fallen as much as 0.6
percent in early trade.

In comparison, the MSCI’s broader measure of Asian markers
other than Japan .MIAPJ0000PUS and world equities
.MIWD00000PUS were down 1.1 percent and 0.3 percent
respectively.

“India is definitely a better bet versus other investment
targets,” said Rajen Shah, chief investment officer at Angel
Broking.

“The economic growth in our country is robust. Also, we are
not so export-dependent as other emerging economies. Earnings
optimism is also helping,” he said.

The BSE index is up 3 percent in the year to date. Its
emerging market peers China’s Shanghai Composite Index .SSEC
and Brazil’s Bovespa .BVSP have fallen 25 percent and 9.1
percent since the start of 2010.

The rise in Indian shares has been powered by foreign
portfolio inflows of $8.4 billion so far in 2010, adding to
last year’s record purchases of $17.5 billion.

Export-driven software majors dropped on concerns
disappointing economic data from the United States, their
biggest market, could affect outsourcing orders.

Sector leader Tata Consultancy Services (TCS.BO) was down
0.9 percent, while rivals Infosys Technologies (INFY.BO) and
Wipro (WIPR.BO) shed 0.8 percent and 0.2 percent respectively.

Energy giant Reliance Industries (RELI.BO), which has the
highest weight on the Sensex, was up 0.2 percent.

The Daily News & Analysis newspaper reported Reliance was
in talks with Texas-based Quicksilver Resources (KWK.N),
including for a possible buyout of the U.S. firm that develops
shale gas and coal-bed methane. [ID:nSGE66I03L]

In the broader market, gainers outnumbered losers in a
ratio of 1.7:1 on volume of 112 million shares.

The 50-share NSE index was up 0.2 percent at 5,407.

STOCKS ON THE MOVE

* Steelmaker Tata Steel (TISC.BO) was up 0.4 percent at
511.40 rupees as UBS upgraded the stock to “buy” from “neutral”
over the weekend.

* Sun Pharmaceutical (SUN.BO) was down 1.5 percent at
1,713.05 rupees after the drugmaker said a U.S. court had
denied its motion to reverse a jury verdict of infringement
against the Indian firm on Pfizer’s (PFE.N) Protonix acid
reflux drug patent that the jury had said was valid.
[ID:nSGE66I057]

MAIN TOP THREE BY VOLUME

* IFCI (IFCI.BO) on 4.5 million shares

* Development Credit Bank (DCBA.BO) on 3.5 million shares

* Shree Ashtavinayak (SACV.BO) on 2.5 million shares

FACTORS TO WATCH
* For technical analysis double click on www.reutersindia.net
* Indian rupee report [INR/]
* Indian bond report [IN/]
* Euro dips, pulls away from 2-month high [FRX/]
* Oil falls below $76 as poor U.S. data fans econ fears [O/R]
* Asia stocks slide as US growth fears escalate [MKTS/GLOB]
* Wall St dives on weak consumer sentiment and revenues [.N]
* For closing rates of Indian ADRs INADR
(Reporting by Ami Shah; Editing by Ranjit Gangadharan)

Filed Under: International News Tagged With: , , , , , , , , , , , , , , , , , , ,

Taiwan stocks end lower on techs; tourism up

July 20, 2010 By Leave a Comment

TAIPEI, July 19 (Reuters) – Taiwan stocks fell 0.19 percent
on Monday as a sharp decline on Wall Street triggered selling
among exporters including Hon Hai (2317.TW), and as investors
awaited more quarterly earnings from technology companies.

The main TAIEX share index closed down 14.74 points
at 7,649.83. The electronics sub-index .TELI fell 0.09 percent
and the financial sub-index .TFNI lost 0.7 percent.

However, the tourism sector .THOI rose 1.3 percent on hopes
more Chinese tourists would visit Taiwan.

Hon Hai, the island’s top electronics parts maker which also
assembles PCs for top U.S. brands, lost 1.24 percent. PC vendor
Acer Inc (2353.TW) shed 1.11 percent and LCD maker AU Optronics
Corp (2409.TW) fell 2.2 percent.

Filed Under: International News Tagged With: , , , , , , , , , , , , , , , , , , ,

Indian shares turn positive on earnings optimism

July 20, 2010 By Leave a Comment

July 19 (Reuters) – Indian shares recovered from early lows on Monday morning, on optimism over quarterly earnings and a newspaper report Etisalat was close to buying a stake in Reliance Communications (RLCM.BO), the no. 2 mobile operator.

At 10:20 a.m. (0450 GMT), the 30-share BSE index .BSESN was up 0.03 percent at 17,961.03 points, with 16 components advancing. It had declined as much as 0.6 percent early.

The 50-share NSE index was barely changed at 5,394.10.

Reliance Communications was up 2.2 percent at 191.30 rupees after a Financial Times report Emirates Telecommunications (ETEL.AD) (Etisalat) was close to buying 26 percent stake in the Indian firm. [ID:nSGE66I05B] (Reporting by Ami Shah)

Filed Under: International News Tagged With: , , , , , , , , , , , , , , , , ,

Stocks eye earnings after ugly data

July 19, 2010 By Leave a Comment

(Reuters) – After ugly economic data and an unexpected downturn in sentiment on quarterly earnings, Wall Street will face a tough time battling back from the latest sell-off.

Technology and banking results will once again shape investor mind-set in a week dominated by a blitz of quarterly earnings.

But it will be a tough job to shift back into a positive mode after stocks dropped nearly 3 percent on Friday.

Minutes of the Federal Reserve’s June meeting got the market seriously worried last week after officials said they were more concerned with the pace of the economic recovery.

A raft of disappointing data on consumer sentiment and factory activity did not help, prompting questions last week on whether the economy had merely hit a soft patch or was primed for a double-dip recession.

“It doesn’t mean the market can’t rally, but the structural problems are there and there is no doubt about it,” said Joe Saluzzi, co-manager of trading at Themis Trading in Chatham, New Jersey.

From a technical perspective, the picture is even less certain. The Standard & Poor’s 500 Index .SPX is stuck in a tight range after it failed to hold its 50-day moving average, now near 1,090, after closing above it for two days.

The Nasdaq Composite .IXIC, meanwhile, failed in its attempt to break its 200-day moving average, but has support around its 14-day moving average at 2,171.

For the past week, the Dow Jones industrial average .DJI lost 1 percent, while the S&P 500 slid 1.2 percent and the Nasdaq shed 0.8 percent.

This week’s earnings will include results from 12 Dow components, as well as quarterly scorecards from financial powerhouses Goldman Sachs Group Inc (GS.N) and Morgan Stanley (MS.N), along with tech bellwethers Apple Inc (AAPL.O), Texas Instruments Inc (TXN.N) and Qualcomm Inc (QCOM.O).

For the second quarter, earnings are expected to increase 28 percent from the year-ago period, according to Thomson Reuters data.

This week, investors will also hang on the words of Federal Reserve Chairman Ben Bernanke when he gives his semi-annual testimony on the economy and monetary policy to members of two congressional committees. He will appear before the Senate Banking Committee on Wednesday — the same day that President Barack Obama will sign the massive Wall Street regulatory reforms into law. On Thursday, Bernanke will speak to the House Financial Services Committee.

Fireworks, if any, may come during the Fed chief’s question-and-answer sessions with members of Congress.

WILL HOUSING FIND A FLOOR?

The week’s major economic indicators will zero in on the housing sector, which is still struggling in the wake of the worst recession since the 1930s. In the second quarter, banks repossessed a record number of U.S. homes as unemployment stayed high, according to RealtyTrac, a real estate data company.

On Tuesday, Wall Street will get data on housing starts for June, which are expected to slip to a seasonally adjusted annual pace of 580,000 units from 593,000 in May, according to economists polled by Reuters.

Another snapshot of the housing market will come on Thursday with existing home sales for June. The forecast calls for a drop of 8.1 percent in June versus the 2.2 percent decline in May, the Reuters poll showed.

REVENUES ON ‘MOST WANTED’ LIST

But the week’s main event will be earnings. Close attention will be paid to revenues for signs of improvement, in light of the contrasting results from Intel Corp (INTC.O) and Google Inc (GOOG.O).

“That’s been the problem. They’ve been meeting or exceeding on cost cutting and not on demand for their products,” said Terry Morris, senior vice president and senior equity manager for National Penn Investors Trust Company in Reading, Pennsylvania.

“That has got to end pretty soon because the market was expecting sales to start improving and it’s not materializing.”

According to Thomson Reuters data through July 16, 48 companies in the S&P 500 Index have reported earnings for the second quarter, with 75 percent having topped analysts estimates, 13 percent in line with expectations and 13 percent below expectations.

On a revenue basis, of the 48 companies in the S&P 500 that have reported results so far, 71 percent have topped analysts’ expectations and 29 percent have fallen below estimates.

TECHS MAY FACE LESS TURBULENCE

Options investors appear to be expecting less volatility in the technology sector than the broader market this week.

Implied volatility on the at-the-money options for the SPDR S&P 500 ETF (SPY.P), an exchange-traded fund that tracks the benchmark S&P 500 .SPX, was slightly higher than on the PowerShares QQQ Trust ETF (QQQQ.P) that tracks the performance of the Nasdaq 100 .NDX, according to Steve Claussen, chief investment strategist at online brokerage OptionsHouse.com.

Implied volatility, a key component of options prices, measures the expected movement in stocks calculated by options prices. It is also seen as a barometer of anxiety.

“It’s notable that QQQQ is showing less implied volatility, which suggests more movements in the broader market than the straight technology sector. The tech sector will be a less exciting place in terms of movements (this) week,” he said.

Implied volatility on August options for the S&P 500 ETF was 25.5 percent, slightly higher than 25.25 percent for the Nasdaq ETF. Usually, the Nasdaq ETF has an implied volatility that is 5 percent to 10 percent above that of the S&P 500 ETF.

The most actively traded options on the S&P 500 ETF were the August $100 and $105 puts, excluding July options that expire at the end of the day. Late Friday, the SPDR S&P 500 ETF was down 2.8 percent at $106.63.

For the QQQQ, the highest volume was on the August $44 put and August $45 call options. On Friday, the ETF was down 2.78 percent at $44.34.

(Reporting by Chuck Mikolajczak; Additional reporting by Angela Moon and Rodrigo Campos; Editing by Jan Paschal)

Filed Under: International News Tagged With: , , , , , , , , , , , , , , , , , , ,

UPDATE 1-Wall St Wk Ahead: Stocks eye earnings after ugly data

July 19, 2010 By Leave a Comment

July 18 (Reuters) – After ugly economic data and an unexpected downturn in sentiment on quarterly earnings, Wall Street will face a tough time battling back from the latest sell-off.

Technology and banking results will once again shape investor mind-set in a week dominated by a blitz of quarterly earnings.

But it will be a tough job to shift back into a positive mode after stocks dropped nearly 3 percent on Friday.

Minutes of the Federal Reserve’s June meeting got the market seriously worried last week after officials said they were more concerned with the pace of the economic recovery.

A raft of disappointing data on consumer sentiment and factory activity did not help, prompting questions last week on whether the economy had merely hit a soft patch or was primed for a double-dip recession.

“It doesn’t mean the market can’t rally, but the structural problems are there and there is no doubt about it,” said Joe Saluzzi, co-manager of trading at Themis Trading in Chatham, New Jersey.

From a technical perspective, the picture is even less certain. The Standard & Poor’s 500 Index .SPX is stuck in a tight range after it failed to hold its 50-day moving average, now near 1,090, after closing above it for two days.

The Nasdaq Composite .IXIC, meanwhile, failed in its attempt to break its 200-day moving average, but has support around its 14-day moving average at 2,171.

For the past week, the Dow Jones industrial average .DJI lost 1 percent, while the S&P 500 slid 1.2 percent and the Nasdaq shed 0.8 percent.

This week’s earnings will include results from 12 Dow components, as well as quarterly scorecards from financial powerhouses Goldman Sachs Group Inc (GS.N) and Morgan Stanley (MS.N), along with tech bellwethers Apple Inc (AAPL.O), Texas Instruments Inc (TXN.N) and Qualcomm Inc (QCOM.O).

For the second quarter, earnings are expected to increase 28 percent from the year-ago period, according to Thomson Reuters data.

This week, investors will also hang on the words of Federal Reserve Chairman Ben Bernanke when he gives his semi-annual testimony on the economy and monetary policy to members of two congressional committees. He will appear before the Senate Banking Committee on Wednesday — the same day that President Barack Obama will sign the massive Wall Street regulatory reforms into law. On Thursday, Bernanke will speak to the House Financial Services Committee.

Fireworks, if any, may come during the Fed chief’s question-and-answer sessions with members of Congress.

WILL HOUSING FIND A FLOOR?

The week’s major economic indicators will zero in on the housing sector, which is still struggling in the wake of the worst recession since the 1930s. In the second quarter, banks repossessed a record number of U.S. homes as unemployment stayed high, according to RealtyTrac, a real estate data company.

On Tuesday, Wall Street will get data on housing starts for June, which are expected to slip to a seasonally adjusted annual pace of 580,000 units from 593,000 in May, according to economists polled by Reuters.

Another snapshot of the housing market will come on Thursday with existing home sales for June. The forecast calls for a drop of 8.1 percent in June versus the 2.2 percent decline in May, the Reuters poll showed.

REVENUES ON ‘MOST WANTED’ LIST

But the week’s main event will be earnings. Close attention will be paid to revenues for signs of improvement, in light of the contrasting results from Intel Corp (INTC.O) and Google Inc (GOOG.O).

“That’s been the problem. They’ve been meeting or exceeding on cost cutting and not on demand for their products,” said Terry Morris, senior vice president and senior equity manager for National Penn Investors Trust Company in Reading, Pennsylvania.

“That has got to end pretty soon because the market was expecting sales to start improving and it’s not materializing.”

According to Thomson Reuters data through July 16, 48 companies in the S&P 500 Index have reported earnings for the second quarter, with 75 percent having topped analysts estimates, 13 percent in line with expectations and 13 percent below expectations.

On a revenue basis, of the 48 companies in the S&P 500 that have reported results so far, 71 percent have topped analysts’ expectations and 29 percent have fallen below estimates.

TECHS MAY FACE LESS TURBULENCE

Options investors appear to be expecting less volatility in the technology sector than the broader market this week.

Implied volatility on the at-the-money options for the SPDR S&P 500 ETF (SPY.P), an exchange-traded fund that tracks the benchmark S&P 500 .SPX, was slightly higher than on the PowerShares QQQ Trust ETF (QQQQ.P) that tracks the performance of the Nasdaq 100 .NDX, according to Steve Claussen, chief investment strategist at online brokerage OptionsHouse.com.

Implied volatility, a key component of options prices, measures the expected movement in stocks calculated by options prices. It is also seen as a barometer of anxiety.

“It’s notable that QQQQ is showing less implied volatility, which suggests more movements in the broader market than the straight technology sector. The tech sector will be a less exciting place in terms of movements (this) week,” he said.

Implied volatility on August options for the S&P 500 ETF was 25.5 percent, slightly higher than 25.25 percent for the Nasdaq ETF. Usually, the Nasdaq ETF has an implied volatility that is 5 percent to 10 percent above that of the S&P 500 ETF.

The most actively traded options on the S&P 500 ETF were the August $100 and $105 puts, excluding July options that expire at the end of the day. Late Friday, the SPDR S&P 500 ETF was down 2.8 percent at $106.63.

For the QQQQ, the highest volume was on the August $44 put and August $45 call options. On Friday, the ETF was down 2.78 percent at $44.34. (Wall St Week Ahead appears every Sunday. Comments or questions on this one can be e-mailed to Charles.mikolajczak@thomsonreuters.com) (Reporting by Chuck Mikolajczak; Additional reporting by Angela Moon and Rodrigo Campos; Editing by Jan Paschal)

Filed Under: International News Tagged With: , , , , , , , , , , , , , , , , , , ,

UPDATE 1-Oman’s Bank Dhofar Q2 profit rises 16 pct

July 16, 2010 By Leave a Comment

July 15 (Reuters) – Bank Dhofar BDOF.OM, Oman’s second-largest bank by market value, saw quarterly net profit rise 16 percent on Thursday but the results fell short of analysts forecasts.

Second-quarter net profit rose to 8.9 million rials ($23.12 million) from 7.7 million rials in the second quarter of 2009, according to Reuters calculations. The lender posted a profit of 8.8 million rials for the first-quarter of the year.

Analysts had forecast net profit of 9.1 million rials for the second quarter, according to a Reuters survey. [ID:nLDE6661BX]

For the six months ended June 30, the bank’s profits rose 25 percent to 17.7 million rials, it said in a statement. Customer deposits for the first half of the year rose 15.1 percent, while loans and advances grew 6.8 percent.

Omani banks have so far reported strong growth in quarterly earnings as asset quality improves and lenders book lower provisions as they recover from the impact of the financial crisis.

On Wednesday, Oman’s largest bank by market value, Bank Muscat BMAO.OM reported an 87-percent jump in second-quarter profit, while National Bank of Oman NBO.OM said second-quarter profit rose 21 percent. [ID:nLDE66305D]

(Writing by Dinesh Nair; Editing by Amran Abocar)

Filed Under: International News Tagged With: , , , , , , , , , , , , , , , , , , ,

Nikkei powers up on Intel, shoots above resistance

July 15, 2010 By Leave a Comment

TOKYO, July 14 (Reuters) – Japan’s Nikkei surged nearly 3 percent on Wednesday, breaking above key resistance, with chip-related shares powering higher after Intel results beat expectations to ease fears about the U.S. economic recovery.

In active trade, the benchmark also got a boost from Komatsu (6301.T), which lifted its full-year forecast by 14 percent, citing better-than-expected first-half sales in Asia and Latin America, as well as a pick up in demand in Japan and the United States. [ID:nTOE66C04V]

Resilient demand for personal computers and servers helped Intel Corp’s (INTC.O) margin and revenue forecasts, out after the bell on Tuesday, blast past expectations, allaying fears of a possible tech spending slowdown and setting an upbeat tone for the industry’s earnings season. [ID:nN12197658]

The announcement came on the heels of better-than-expected quarterly earnings from Alcoa (AA.N) the day before, giving heart to investors who had fled to the sidelines on jitters about the economic recovery. [.N]

“There’s been growing doubts about the health of the U.S. economy, but these better-than-expected Intel results have really changed sentiment in the market,” said Toshiyuki Kanayama, a market analyst at Monex Inc.

“Wall Street rose strongly, there was Intel, and the yen is also weaker. A lot of good factors for stocks are now lining up.”

Some analysts said the Nikkei was playing catch-up with overseas markets after it dipped yesterday following the Alcoa results. By contrast, the FTSE 100 .FTSE rose 2 percent and the Nasdaq .IXIC 2 percent as well. The Dow gained 1.5 percent.

The benchmark Nikkei .N225 surged 2.7 percent, or 258.01 points, to 9,795.24, while the broader Topix gained 1.9 percent to 870.73.

Trade was active, with 2.3 billion shares changing hands on the Tokyo exchange’s first section, the heaviest volume in more than a month. Advancing shares outnumbered declining ones by more than 7 to 1.

Market players said short-covering emerged after the Nikkei broke above its 25-day moving average at around 9,960 and additional resistance on its daily Ichimoku charts at around 9,670, which was its kijun-sen.

The kijun-sen is an indicator of medium-term trends that can be either support or resistance but is currently pointing sideways, while Ichimoku charts are a popular charting method among Japanese traders.

In addition, the Nikkei’s MACD continued rising after a bullish cross.

But some in the market remained wary, noting that further rises could be hard to achieve.

“There’s selling of futures at around 9,800, and this is likely to cap gains for now,” said Hiroaki Kuramochi, chief equity marketing officer at Tokai Tokyo Securities.

“Also, even though Intel may be good, there’s some concern about the bank earnings later this week, with good results for them necessary for the market to go much higher.”

JPMorgan Chase & Co (JPM.N) and Bank of America Corp (BAC.N) both announce this week.

LONG POSITIONS

An accumulation of long positions in the market, especially in blue-chip exporters, means that any further rises are likely to take time, Kanayama added.

The Nikkei’s next target is 10,000 and then around 10,250, the level of its June high.

Toyota Motor Corp (7203.T) and other carmakers surged, with Toyota up 4 percent to 3,250 yen and Honda Motor (7267.T) climbing 3.9 percent to 2,741 yen. Gains were seen as mainly due to a slightly weaker yen and the boost in overall sentiment.

Toyota said on Wednesday its investigation of nearly 2,000 cases of unintended acceleration had found no problem with its electronic throttle system, and that driver error was to blame in some cases. [ID:nTOE66D02P]

But Kuramochi said he thought the Toyota recall issue had largely faded as a factor for the market.

Chip gear manufacturer Tokyo Electron (8035.T) and other tech shares gained after the Intel results, with Tokyo Electron shares climbing 4.1 percent to 5,110 yen.

Chip-tester maker Advantest Corp (6857.T) shot up 5.7 percent to 2,013 yen, and Nikon (7731.T), a maker of steppers, advanced 2.1 percent to 1,644 yen.

Komatsu gained 5.4 percent to 1,790 yen.

Another high-powered performer was Mizuho Financial Group (8411.T), which rose 3 percent to 139 yen after the banking group set the price of its new shares for public offering on Tuesday. [ID:nTOE66C06H]

A strategist at a Japanese brokerage said short-covering is expected to continue supporting the stock in the near term, as speculators had shorted the shares ahead of the price-fixing, in anticipation of sell-offs by some investors who had hoped for a low price for the new stock. (Reporting by Elaine Lies; Editing by Joseph Radford)

Filed Under: International News Tagged With: , , , , , , , , , , , , , , , , , , ,

REFILE-Nikkei surges past resistance, gains 2.8 pct on Intel

July 15, 2010 By Leave a Comment

TOKYO, July 14 (Reuters) – Japan’s Nikkei surged nearly 3 percent on Wednesday to shoot above a key resistance level, with chip-related shares powering higher after Intel results beat expectations, easing fears about the U.S. economic recovery.

In active trade, the benchmark climbed well past resistance at around 9,677, the level of its 25-day moving average, which it broke above for the first time in three weeks.

Resilient demand for personal computers and servers helped Intel Corp (INTC.O)’s margin and revenue forecasts, out after the bell, blast past expectations, allaying fears of a possible tech spending slowdown and setting an upbeat tone for the industry’s earnings season. [ID:nN12197658].

The announcement came on the heels of better-than-expected quarterly earnings from Alcoa (AA.N) the day before, giving heart to investors who had fled to the sidelines on jitters about the economic recovery. [.N]

“There’s been growing doubts about the health of the U.S. economy, but these better-than-expected Intel results have really changed sentiment in the market,” said Toshiyuki Kanayama, a market analyst at Monex Inc.

“Wall Street rose strongly, there was Intel, and the yen is also weaker. A lot of good factors for stocks are now lining up.”

The benchmark Nikkei .N225 surged 2.8 percent or 270.13 points to 9,807.36, while the broader Topix gained 2.3 percent to 874.19.

Market players said short-covering emerged after the Nikkei broke above its moving average and additional resistance on its daily Ichimoku charts at around 9,670 which was its kijun sen, an indicator of medium-term trends. Ichimoku charts are a popular charting method among Japanese traders.

The Nikkei also broke above the middle line of its Bollinger Bands, around 9,643, after being stuck below it for the past several trading days, while its MACD continued to rise.

But some in the market remained wary, noting that further rises could be hard to achieve.

“There’s selling of futures at around 9,800, and this is likely to cap gains for now,” said Hiroaki Kuramochi, chief equity marketing officer at Tokai Tokyo Securities.

“Also, even though Intel may be good, there’s some concern about the bank earnings later this week, with good results for them necessary for the market to go much higher.”

JPMorgan Chase & Co (JPM.N) and Bank of America Corp (BAC.N) both announce this week.

LONG POSITIONS

An accumulation of long positions in the market, especially in blue-chip exporters, means that any further rises are likely to take time, Kanayama added.

The Nikkei’s next target is 10,000 and then around 10,250, the level of its June high.

Toyota Motor Corp (7203.T) and other carmakers surged, with Toyota up 4.6 percent to 3,270 yen and Honda Motor (7267.T) climbing 4.3 percent to 2,753 yen and the gains were seen as mainly due to a slightly weaker yen the boost in overall sentiment.

An analysis of dozens of data recorders from Toyota vehicles involved in accidents blamed on sudden acceleration suggests some drivers were at fault, according to the Wall Street Journal. [ID:nN1396064] But Kuramochi said he thought the Toyota recall issue had largely faded as a factor for the market.

Chip gear manufacturer Tokyo Electron (8035.T) and other tech shares gained after the Intel results, with Tokyo Electron shares climbing 3.9 percent to 5,100 yen.

Chip-tester maker Advantest Corp (6857.T) shot up 5.5 percent to 2,010 yen, and Nikon (7731.T), a maker of steppers, advanced 2.1 percent to 1,644 yen.

Shares of Komatsu (6301.T), the world’s No.2 construction machinery maker, shot up 6 percent to 1,799 yen after it lifted its full-year profit forecast by 14 percent, citing better-than-expected first-half sales in Asia and Latin America, as well as a pick up in demand in Japan and the United States. [ID:nTOE66C04V]

Filed Under: International News Tagged With: , , , , , , , , , , , , , , , , , , ,

Indian shares up 0.9 pct; Infosys hits all-time high

July 13, 2010 By Leave a Comment

MUMBAI, July 12 (Reuters) – Indian shares climbed to their
highest in more than three months on Monday, with Infosys
Technologies (INFY.BO) racing to an all-time high for the
second session ahead of its earnings.

Firmer Asian markets, expectations for robust factory
output growth due around 11 a.m. (0530 GMT) and hopes for
upbeat quarterly earnings bolstered investor confidence.

“There is good momentum with earnings season round the
corner. People are optimistic about June quarter results,” said
Kunal Sukhani, manager of institutional equities at Asian
Markets Securities.

Infosys, the second-largest software exporter, rose as much
as 1.4 percent to 2,911.55 rupees, its highest, on expectations
it would raise its dollar revenue forecast for the full year
when it unveils results on Tuesday. [ID:nSGE668050]

Rivals Tata Consultancy Services (TCS.BO) and Wipro
(WIPR.BO) rose 1.3 percent and 0.8 percent respectively.

By 10:51 a.m. (0521 GMT), the 30-share BSE index .BSESN
was trading up 0.87 percent at 17,998.47, with 25 of its
components gaining. It rose to 18,010.07 early, its highest is
more than three months.

The benchmark is up 2.9 percent so far in 2010, with
foreign funds investing a net of $6.8 billion in Indian
equities. In 2009, foreigners had bought a record $17.5 billion
of stocks and powered the index up 81 percent.

Factory output in May probably rose 16 percent from a year
earlier, lower than an annual growth of 17.6 percent in April,
a Reuters poll showed. [ID:nSGE66707T]

Trade Minister Anand Sharma said on Friday India’s gross
domestic product growth is expected to return to “9 percent
plus” this year, led by strong corporate performance and rising
savings levels, is also expected to support sentiment.
[ID:nSGE6680FV]

Financials led the gainers on expectations of a pick up in
loan demand. Top lender State Bank of India (SBI.BO) rose 0.5
percent while rivals ICICI Bank (ICBK.BO) and HDFC Bank
(HDBK.BO) were up 1.2 percent and 1.8 percent respectively.

Mortgage lender Housing Development Finance Corp (HDFC.BO)
climbed 1.5 percent.

In the broader market, gainers were thrice the number of
losers with 123 million shares changing hands on the BSE.

The 50-share NSE index was up 0.8 percent at
5,392.55.

STOCKS ON THE MOVE

* Bharti Airtel (BRTI.BO) was up 0.2 percent at 208.95
rupees, after the top mobile operator said it would invest $150
million in Kenya to help boost network and capacity
distribution. [ID:nLDE6680W3]

* Vehicle maker Ashok Leyland (ASOK.BO) rose 0.9 percent to
70.10 rupees as Goldman Sachs started coverage on the stock
with a “buy” rating.

* Wind turbine maker Suzlon Energy (SUZL.BO) gained 0.9
percent to 59.20 rupees after it said it had received an order
from India’s Malpani Group to set up, operate and maintain two
wind power projects of 19.8 megawatt capacity. [ID:nSGE66B03T]

MAIN TOP THREE BY VOLUME

* Shree Ashtavinayak (SACV.BO) on 2.8 million shares

* Idea Cellular IDEA on 2.1 million shares

* IPCA (IPCA.BO) on 1.9 million shares

FACTORS TO WATCH
* For technical analysis double click on www.reutersindia.net
* Indian rupee report [INR/]
* Indian bond report [IN/]
* Yen dips, longs shed on Japan ruling party woes [FRX/]
* Oil hovers at $76 after China trade data [O/R]
* Japan’s Nikkei rises, brushes aside election [MKTS/GLOB]
* Wall St marks best week in a year; earnings on tap [.N]
* For closing rates of Indian ADRs INADR

Filed Under: International News Tagged With: , , , , , , , , , , , , , , , , , , ,

WRAPUP 2-Cost cuts help Hollandi outshine Saudi lenders in Q2

July 11, 2010 By Leave a Comment

RIYADH, July 10 (Reuters) – Saudi Hollandi Bank 1040.SE had the best second quarter among five local lenders that announced quarterly earnings on Saturday after it cut costs by more than half to offset a decline in lending income.

Growth in bank lending, especially to the private sector, has been slow since early 2009. Saudi bank credit growth was flat throughout much of 2009 due to the global slump and after defaults by local family firms.

But in the second quarter the net profit of the largest-listed Saudi lender Al Rajhi Bank 1120.SE inched up 0.5 percent to 1.78 billion riyals ($475 million), helped by a 8.2 percent rise in lending net income, while non-lending net income — which includes brokerage and foreign exchange — fell 8.4 percent to 770 million riyals.

Rajhi’s second-quarter earnings were better than analysts had anticipated in a Reuters survey earlier this month. [ID:nLDE6660V3]

Its earnings per share fell to 2.31 riyals by end June and the bank decided to give 65 percent of it in dividends for the first half of 2010.

Its loan portfolio growth eased however in the second quarter by one percentage point from the 6.4 percent of the first quarter of 2010.

Hollandi, part owned by a Royal Bank of Scotland-led consortium (RBS.L) that may sell its stake through a public offering, has more than doubled its net profit in the three months to end-June to 250.5 million riyals ($66.8 million), beating analysts’ forecasts. [ID:nLDE66614W].

Profits were 90.6 million riyals a year earlier.

While both its lending and non-lending net incomes fell by 15.6 and 8.2 percent respectively during the quarter, Hollandi’s operating costs shrank to 228.3 million riyals from 461.9 million riyals in the second quarter of 2009.

Operating profit — the sum of lending and non-lending net incomes — fell 13.3 percent to 478.8 million riyals. By the end of June, the annual decline in Hollandi’s loan portfolio accelerated to 11.1 percent from 7.4 percent in the 12 months to end-March 2010.

RIYAD, SAUDI FRANSI, ALJAZIRA

The much bigger Riyad Bank 1010.SE posted a 16.5 percent fall in second quarter net profit mainly after lending income fell for the second straight quarter while its costs soared.

Riyad — Saudi Arabia’s third-largest bank by market value — exceeded average forecasts by analysts with 766 million riyals in the three months to end-June after 918 million riyals in the same period a year ago.[ID:nLDE666168]

Its net lending income fell 10.5 percent to 1.03 billion riyals, more than the 9 percent annual decline it recorded in the first quarter. The annual growth in the loans portfolio fell to 0.2 percent by the end of June from 6.1 percent by the end of March.

Income from banking services — brokerage, investment and foreign exchange operations — rose by almost 33 percent to 499 million riyals during the second quarter, based on Reuters calculations.

This means that operating costs rose 25.6 percent to 761 million riyals from 606 million riyals in the second quarter of 2009 but still below 785 million riyals in the first quarter, based on Reuters calculations.

Banque Saudi Fransi 1050.SE meanwhile reported a better than expected 9.4 percent rise in second quarter net profit, raising lending income by 2.5 percent and non-lending net income by 11.8 percent while cutting costs by 1.5 percent.

It was Fransi’s highest quarterly net profit in two years.

Unspecified provisions weighed in to cut second quarter net profit at the smaller Bank AlJazira 1020.SE, the kingdom’s number one stock market broker, to less than a fifth of its level a year earlier, the bank said.

The Saudi stock exchange erased during the second quarter much of the 11.1 percent gains it made during the first quarter.

AlJazira’s net lending income inched up 1 percent to 188 million riyals but net income from non-lending operations fell by almost a third to 109 million riyals.

The bank did not explain the drop in non-lending income. It has however allowed itself to be more aggressive on lending activities: By the end of June, its loans portfolio grew by 10 percent against 7 percent by the end of March. (Writing by Souhail Karam; Editing by Ruth Pitchford)

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