RPT-Wall St Wk Ahead-Stocks on brink of breakout, profits key

July 26, 2010 By Leave a Comment

July 25 (Reuters) – Wall Street enters this week on the cusp of a breakout in U.S. stocks, but it will need another spate of convincing earnings reports to feed the rally that sprouted at the end of last week.

The markets endured malaise with poor economic data and downbeat testimony from Federal Reserve Chairman Ben Bernanke on Wednesday, but turned decisively after a number of strong results pointed to better times ahead.

This week brings more results from bellwethers including Chevron (CVX.N), DuPont (DD.N) and Boeing (BA.N). The trick will be turning the whipsaw action into accumulated gains — and hoped-for improvements in volume — that would signal an upturn in sentiment.

“There’s a constant struggle between the bulls and the bears when in fact the answer is in the middle ground. This market is more like a turkey and not a bull or a bear,” said Brian Jacobsen, chief portfolio strategist at Wells Fargo Fund Management in Menomonee Falls, Wisconsin.

Investors have been forced to readjust their expectations for the economy, with data showing the pace of the recovery has gone from a sprint to a crawl.

It has also prompted a divisive argument over the likelihood of an encore recession. But if worries over a double dip are starting to be washed out of the market, an unexpected positive could fuel the market higher.

STANDING ON 1,100

The broad S&P 500 also finds itself standing on top of a key resistance level that could turn into a floor for the market. The index closed at 1,102.66, just above the psychologically important 1,100 level for the first time in a month. The level has been a hard one to hold and could buoy the market if the move is ultimately a decisive one.

With the S&P 500 edging out of official correction territory, trading down about 9 percent from this year’s April high, analysts appear to have reconciled themselves to a slower recovery than they had hoped for. A correction is generally defined as a 10 percent decline from the top.

“All the indicators still indicate growth, we’re just not growing as quickly as we were when we were coming off the bottom, and that makes total logical sense,” said Michael O’Rourke, chief market strategist at BTIG LLC in New York.

O’Rourke added he believes the sell-off has run its course, and the early July low will prove to be the low for the year.

Analysts will be hoping to see more earnings season cheer from industrials companies this week after a slew of manufacturers last week topped expectations and raised full-year profit forecasts. See [RESF/US]

General Electric Co (GE.N) added positive sentiment to the sector on Friday by raising its dividend 20 percent, illustrating the conglomerate’s confidence it has put the worst of the recession behind it. For details, see [ID:nN23241252]

Options traders are betting on positive momentum for Boeing and DuPont following their earnings this week, said Andrea Kramer, an analyst at Schaeffer’s Investment Research in Cincinnati, Ohio.

Boeing’s 10-day call/put ratio shows investors have bought calls over puts in the open market at a faster clip only 6 percent of the time during the past year. In DuPont, near-term traders have been more optimistically aligned toward the stock only 1 percent of the time during the past year, according to Kramer.

The options market also points to wide overall price movements this week as options volume continues to be low, said Steve Claussen, chief investment strategist at online brokerage OptionHouse.com in Chicago.

As of Thursday’s close, 13.8 million options traded overall, versus 16.6 million in mid-June.

“Summer rallies start because of low volume, since not a lot of people want to get in the way of selling anything, and then it suddenly builds, as people say, it starts to chase performance,” Claussen said.

ECONOMY IS WILD CARD

But the economy will remain the wild card, with the potential to pour cold water on investor enthusiasm and a round of top-tier economic data will be looked at to determine the strength of the economic recovery.

The Federal Reserve’s Beige book of economic conditions will also be scrutinized for any illumination of Bernanke’s comment that the outlook is “unusually uncertain.”

Analysts will also digest the results of the European stress tests on banks. But if Friday’s session is an indication, market movement will likely be muted.

New home sales will kick off the week, with data expected to show a rise to 320,000 units in June, according to a Reuters poll of analysts. More housing data on Tuesday includes the Case-Shiller home price index, which is expected to rise 4 percent year-over-year in May.

Also on Tuesday, consumer confidence is expected to come in at 51 for July, a slight dip from the month before. Durable goods orders on Wednesday are forecast to rise 1 percent in June.

Weekly initial jobless gains on Thursday are expected to ease to 460,000 from 464,000 the week before. Investors will get another look at the consumer on Friday with the final July reading of consumer sentiment, which is forecast to rise from the preliminary July reading.

Lastly will be the first reading for second-quarter gross domestic product. Investors are expecting the economy to grow 2.5 percent, compared with 2.7 in the first quarter. See [ECI/US]. (The Stocks Outlook column appears every Sunday. Comments or questions on this one can be e-mailed to leah.schnurr(at)thomsonreuters.com) (Reporting by Leah Schnurr; Editing by Kenneth Barry)

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

RPT-SAfrica’s Village seeks gold mine to generate cash -paper

July 14, 2010 By Leave a Comment

July 13 (Reuters) – South African junior miner Village Main Reef Gold Mining (VILJ.J) plans to buy a gold mine within the next year to generate cash for its other venture, Business Day on Tuesday quoted the chief executive as saying.

Village earlier this year bought a controlling interest in the Lesego Platinum exploration project, for which it plans to complete a bankable feasibility study within three years.

In the meantime, the company plans to buy a mine to avoid pitfalls suffered by other junior miners reliant on one asset only.

“Our first strategic objective is to buy a cash-generative asset,” CEO Bernard Swanepoel was quoted as saying. (Reporting by Agnieszka Flak, Editing by Himani Sarkar)

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

RPT-Australia’s QR float plan on track – Queensland gov

July 7, 2010 By Leave a Comment

July 6 (Reuters) – The Queensland state government said on Tuesday there were no changes in its IPO plans for QR National coal transport business despite the postponement of Bilginger Berger’s (GBFG.DE) Australian unit IPO.

The IPO of QR National estimated at A$7 billion($5.88 billion) is the largest scheduled for Australia this year.

“It doesn’t have any direct bearing on our plans to float QR National,” Queensland Treasurer Andrew Fraser said in a statement. (Reporting by Michael Smith; Editing by Narayanan Somasundaram)

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

RPT-UPDATE 2-Moody’s puts Spain top rating on review for cut

July 2, 2010 By Leave a Comment

MADRID/NEW YORK, June 30 (Reuters) – Moody’s Investors Service said on Wednesday it is reviewing Spain’s ratings and may lower them by as much as two levels due to sliding growth expectations and mounting fiscal challenges.

The rating’s agency, the only major agency that still maintains a top rating for Spain, said it was conducting a three-month review of the country’s Aaa local and foreign currency government bond ratings.

The rating agency also cited concerns over the impact of rising funding costs over the medium term.

“If at the conclusion of the review, Spain’s ratings are lowered, it would most likely be by one, or at most two, notches,” Moody’s said.

Spain has been the target of intense speculation in sovereign debt markets as the next country in the euro zone to need European Union help after Greece, though the government has firmly denied it had any problem meeting financing obligations.

Moody’s senior risk analyst Kathrin Muehlbronner said the review should not be taken out of context and Spain remained a highly rated country.

“The contagion has been so dramatic in the markets in the last few months people forget really what a gulf there is between Spain and Greece … Spain is a very highly credit worthy country,” Muehlbronner said in a telephone interview with Reuters following the announcement.

“The policies that the government is now proposing to pursue should eventually reach in to the conscience of the market … but the issue where the deficit and debt has increased and we’re looking at a situation that is somewhat more difficult to unwind than it was before.”

Spain’s had a public deficit of 11.2 percent of gross domestic product in 2009 while the debt-to-GDP ratio stands at around 55 percent, which Moody’s said it expects it to rise to 80 percent of GDP by 2014.

The government announced in early June a 15 billion-euro ($18.35 billion) savings plan to help cut the deficit to 3 percent of GDP by 2013, though the rating’s agency said low growth forecasts would make this difficult.

Moody’s sees Spain’s average growth at 1 percent over the 2010-2014 period compared to the government’s projections of around 3 percent by 2013.

“Moody’s believes that more fundamental adjustments to key spending items will be required in order to achieve the government’s budget deficit targets,” said Muehlbronner in a statement.

RISING COSTS

The cost to insure Spain’s debt with credit default swaps had tightened earlier on Wednesday to 260 basis points, or $260,000 per year to insure $10 million in debt for five years, from 273 basis points on Tuesday’s close, according to Markit Intraday.

Spain’s 10-year bono spread against the German bund stood at around 202 basis points late on Wednesday, off a recent high of 238 bps, but well above around 80 bps in April.

The euro slightly pared gains versus the dollar after the Moody’s announcement.

Moody’s said one of the key reasons for the review was concern over the impact of rising funding costs in the medium term as reforms of the labour market, the banking system and the pension system took time to restore investor confidence.

The labour market reform is currently in parliament for review, and Muehlbronner said she hoped legislators would strengthen the bill, which aims to make hiring and firing easier and put more young people to work.

Spain suffers the highest level of unemployment in the euro zone at over 20 percent, while more than 40 percent of those under age 25 available for work are unemployed.

On the banking system restructuring process, which the Bank of Spain said on Tuesday was close to completion, the analyst said she did not think the government would need to recapitalise the banks much more than had been already earmarked.

“We don’t expect that there is a massive extra recapitalisation need for the banks above what the government has stated, and hopefully the stress tests that come out will help calm the markets,” Muehlbronner told Reuters.

The Bank of Spain has said it will publish a stress test for the banks soon.

The consolidation of Spain’s mostly unlisted savings banks could cost as much as 30 billion euros, the government has said, though the current round of bank mergers has tapped the bank restructuring fund for just over 10 billion euros so far.

Investor nerves have also been tested over a Spanish debt redemption hump of 16.2 billion euros by the end of July.

The government claims they will not need to tap the market to meet the repayment, but there are concerns they will struggle to meet payments.

“We don’t see July’s redemption as being a problem,” Moody’s senior analyst Kristin Lindow told Reuters.

Fitch Ratings cut Spain’s credit ratings to AA-plus, the second highest level, from AAA on May 28, saying its economic recovery would be more muted than a government forecast, pushing world equities and the euro lower.

The downgrade followed a cut by Standard & Poor’s in April. (Additional reporting by Walden Siew, John Parry and Karen Brettell)

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

RPT-India’s Reliance Comm, GTL Infra sign $11 bln deal

June 28, 2010 By Leave a Comment

June 27 (Reuters) – Reliance Communications (RLCM.BO), India’s No. 2 cellphone carrier, said on Sunday its unit Reliance Infratel Ltd has agreed to a $11 billion deal to sell its telecom tower assets to independent telecom tower company GTL Infrastructure Ltd (GTLI.BO).

Telecommuncations Services

Debt-laden Reliance Communications, controlled by billionaire Anil Ambani, earlier this month announced a plan to create an independent tower unit.

It had previously planned to spin-off its 95 percent-owned telecoms infrastructure arm, Reliance Infratel, through an initial public offering. (Reporting by Aniruddha Basu and Rajesh Kurup; Editing by Miral Fahmy)

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

RPT-WRAPUP 11-BP reinstalls cap on Gulf of Mexico oil leak

June 25, 2010 By Leave a Comment

HOUSTON/WASHINGTON, June 23 (Reuters) – BP Plc (BP.L)(BP.N) said on Wednesday it had reinstalled an oil-siphoning cap on its blown-out well in the Gulf of Mexico and resumed collecting crude while the Obama administration appealed a court ruling that blocked its six-month moratorium on deepwater drilling.

As the high-stakes dramas unfolded, the political risks from the disaster were underscored by a new poll that showed President Barack Obama’s job performance rating has dropped to the lowest level of his presidency.

The worst spill in U.S. history has been thrust to the top of Obama’s crowded domestic agenda but the Wall Street Journal/NBC News poll found half of those surveyed disapproved of his handling of the spill.

Overall Obama’s rating stood at 45 percent in the poll, down 5 points from early last month. For the first time in the survey, more people, or 48 percent, say they disapprove of his job performance.

The administration sought to keep its key responses to the catastrophe in play as it appealed the ruling to lift the deepwater drilling ban after a judge said it was too far-reaching and not adequately justified despite the spill.

The government also asked District Judge Martin Feldman in New Orleans to put his ruling against the moratorium on hold pending the outcome of the appeal or until the appeals court can consider a request for a stay.

The Justice Department said in the court filing that the temporary moratorium only affected 33 active deepwater drills in the Gulf of Mexico and the harm from another potential oil spill.

In addition to the appeal, Interior Secretary Ken Salazar said he would revise his original order suspending drilling below 500 feet of sea level (152 meters) to make it more flexible and thus address the court’s concerns.

The government imposed a six-month moratorium on deepwater drilling after an offshore rig exploded on April 20, killing 11 workers and rupturing BP’s well. <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ For full coverage link.reuters.com/hed87k Breakingviews [ID:nLDE65M0H5] Insider TV link.reuters.com/jav43m Graphics link.reuters.com/qam39k Special Report: Wall Street touted BP

link.reuters.com/kux53m ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>

Oil gushed largely unchecked from the well after an undersea robot collided with a system intended to capture some of the gushing crude.

BP reinstalled the critical containment cap after several hours and the it resumed oil and gas at 2000 EDT on Wednesday (0000 GMT Thursday).

The cap system installed on June 3 captured 16,600 barrels on Tuesday, BP said. A separate oil-flaring system that collected 10,500 barrels is still operating. A team of U.S. scientists estimate the leak is spewing between 35,000 and 60,000 barrels a day.

OIL COATS PENSACOLA BEACH

The spreading oil slick has shut down rich fishing grounds, killed hundreds of turtles and seabirds and dozens of dolphins and soiled the coastlines of four U.S. states.

Florida saw its worst effect yet from the spill as thick oily sludge washed ashore on Pensacola Beach.

Emergency workers said the pudding-like mixture covered three miles (5 km) of Pensacola Beach, a barrier island that is part of the Gulf Islands National Seashore.

“It’s just a line of black all the way down the beach as far as you can see in both directions. It’s ruined,” said Pensacola fisherman Steve Anderson.

The disaster and scathing criticism from the government and U.S. lawmakers has fueled investor fears about BP’s future and its stock has tumbled since the April 20 spill, losing half its value and trading at levels not seen since 1996.

New York Comptroller Thomas DiNapoli said the state pension fund planned to sue to recover losses from the drop in BP’s stock. Other big U.S. state funds are watching New York’s lawsuit but have not yet taken legal action.

“BP misled investors about its safety procedures and its ability to respond to events like the ongoing oil spill and we’re going to hold it accountable,” said DiNapoli, a Democrat, who will stand for election in November.

BP’s share price fall has led some major investors, including Aviva Investors and UBS Asset Management, to start buying again, despite worries about the oil giant’s total liabilities related to the spill. [ID:nN23216964]

Under the Clean Water Act, which levies a $4,300 per barrel fine, BP could face penalties of more than $15 billion. That does not include the $20 billion compensation fund it agreed to last week or the many billions of dollars in criminal fines that analysts have said are likely.

According to U.S. government estimates, up to 4 million barrels of oil have spewed into the ocean since April 20, about 15 times as much as was spilled by the Exxon Valdez in Alaska in 1989. BP said it has collected about 325,700 barrels.

Workers at a bird cleaning facility in Fort Jackson, Louisiana were collecting blood and feather samples as evidence of environmental damage that could be used in possible lawsuits against BP.

“Most spills are over really quick, but this is like a new spill everyday. It’s really discouraging,” said Jay Holcomb, director of the International Bird Rescue Center. (Additional reporting by Tom Doggett and Ayesha Rascoe in Washington, Chris Baltimore in Houston, Ben Gruber in Florida and Ernest Scheyder in Fort Jackson, Louisiana; Writing by Ed Stoddard and Ross Colvin; Editing by Chris Wilson)

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

RPT-Norway workers, oil firms land wage deal, avert strike

June 18, 2010 By Leave a Comment

June 17 (Reuters) – Norwegian oil workers reached a wage settlement on Thursday, averting a strike that had threatened production in three North Sea oil and gas fields, the state arbitrator said. “There will be no strike,” Nils Dalseide, arbitrator for Norway’s National Arbitration Tribunal, told Reuters.

Around 400 workers on the Gullfaks B and Gullfaks C fields, which are operated by Statoil (STL.OL), and Shell’s (RDSa.L) Draugen field had planned to strike from Thursday if no agreement was reached with management over pay.

Representatives from three trade unions — Industri Energi, SAFE and Lederne — held arbitration talks over wages overnight, negotiating past a midnight deadline on Wednesday to reach a deal.

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

RPT-FACTBOX-SNB’s options to limit liquidity from interventions

June 17, 2010 By Leave a Comment

June 15 (Reuters) – The Swiss National Bank faces a deepening policy dilemma as its massive interventions to prevent too sharp a rise in the Swiss franc add huge amounts of liquidity, raising the potential of higher inflation.

Switzerland’s currency reserves rose in May by 78.8 billion francs — an amount equal to 15 percent of gross domestic product — and the central bank may take measures to contain possible inflation down the road.

Below are steps the SNB could announce at its policy meeting on June 17 to solve the dilemma:

STERILISE INTERVENTIONS

The SNB could issue more of its own debt — so called SNB bills — to mop up liquidity, or it could implement reverse repos.

The central bank has issued bills with maturities of up to 84-days in recent weeks. The effect on liquidity is hard to assess as the SNB publishes the volumes only with a delay of up to 6 weeks in its statistical report.

But an active sterilisation could have the unwanted side effect of attracting more money to Switzerland, as investors are offered new places to offload their money.

“It would offer speculators holding franc liquidity a place to park,” UBS analyst Beat Siegenthaler said.

Moreover, the plan also sends a signal to the market that the central bank has lost its appetite for the fight.

“It reduces your credibility in the FX market because it is an acknowledgement that you no longer can stomach the monetary implications of defending the currency,” BNP Paribas economist Eoin O’Callaghan said.

RAISE RESERVE REQUIREMENTS

The SNB could raise the percentage of reserves commercial banks must hold in notes and coins or in an account with the central bank.

Currently, banks have to hold 2.5 percent of certain liabilities, including short-term deposits and client savings.

Like the sterilisation, this would reduce the monetary base. However, SNB data show that banks are already exceeding the requirements eight fold.

TAX ON FOREIGNER’S ACCOUNTS

To limit safe haven flows, Switzerland could put into place a tax on bank accounts held by foreigners not living in Switzerland.

Berne had such a scheme in the 1970s, which would have the advantage of not affecting the cost of money to the domestic economy.

However, this would make the country’s wealth management sector, the world’s largest, less attractive compared to competitors such as Britain or Luxemburg.

Back in the 1970s, the deposit tax also failed to curb inflows.

“Negative rates, while practically feasible, do not necessarily prevent a fundamentally strong currency from appreciating,” JP Morgan wrote in a note, adding that between 1973-78 the franc rose against the dollar in real terms despite the effective negative interest rates.

(Reporting by Catherine Bosley and Sven Egenter; editing by Patrick Graham)

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

RPT-Port Hedland May total iron ore exports up 2.9 pct

June 16, 2010 By Leave a Comment

June 15 (Reuters) – Iron ore shipments via Australia’s Port Hedland rose 2.9 percent to 15.02 million tonnes in May from 14.59 million tonnes in April, according to port authority figures released on Tuesday.

Basic Materials

China remained the largest destination with shipments of 9.98 million tonnes versus 10.9 million tonnes in April.

BHP Billiton Ltd/Plc (BHP.AX)(BLT.L) is the port’s biggest user followed by Fortescue Metals Group Ltd (FMG.AX). (Reporting by James Regan; Editing by Mark Bendeich)

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

RPT-UBS CEO says sees Swiss-U.S. deal on tax data

June 12, 2010 By Leave a Comment

(Repeats to additional subscribers)

Stocks | Regulatory News | Global Markets

VIENNA June 11 (Reuters) – Oswald Gruebel, chief executive of UBS (UBSN.VX) (UBS.N)L, said he was confident there will be a deal between Switzerland and the United States over tax data.

When asked by reporters whether the Swiss parliament will approve a tax deal with the United States, he replied: “I am confident it will approve it.” Switzerland’s delivery of UBS client data to U.S. tax officials has been delayed after the Swiss lower house last week rejected a Swiss-U.S. deal to solve a tax dispute, triggering a new parliamentary debate. [IDnLDE6570NF]

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

RPT-UPDATE 2-Florida Ponzi mastermind gets 50-year sentence

June 10, 2010 By Leave a Comment

FORT LAUDERDALE, Fla., June 9 (Reuters) – South Florida Ponzi scheme mastermind Scott Rothstein was sentenced to 50 years in prison on Wednesday for an investment fraud that bilked clients out of more than $1 billion.

The sentence was more than the 40 years federal prosecutors had recommended for Rothstein, a disbarred lawyer who pleaded guilty to racketeering and fraud conspiracy charges in January.

He had faced up to 100 years in prison but his lawyer had asked U.S. District Judge James Cohn to give him no more than 30 years.

Rothstein, who turns 48 on Thursday, fled to Morocco as his fraud scheme collapsed in late October, apparently lured by the fact that the country has no extradition treaty with the United States. He voluntarily came back to Florida in early November and has been jailed since he surrendered to the FBI in December.

Upon his return, Rothstein cooperated with investigators unraveling his investment scheme, which prosecutors cited in asking that he be given a sentence of no more than 40 years. But Cohn tore into Rothstein for his “greed and arrogance” before handing down the tougher sentence, stressing that Rothstein had committed his fraud while serving as a licensed attorney.

Part of that fraud involved forging bogus court documents, making it especially egregious to a federal judge, Cohn said. “There can be no conduct more reviled,” he said.

“OPULENT LIFESTYLE … STOLEN MONEY”

Cohn said more than $400 million had been lost to investors through Rothstein’s scheme and set an Aug. 20 court date for a restitution hearing.

Cohn waived any substantial financial penalty as part of Rothstein’s sentencing, saying he had already agreed to forfeit all his assets to help repay some of the more than 400 investors in his scheme.

Rothstein has been compared to other Ponzi scheme kingpins including Bernard Madoff, who pleaded guilty to a $65 billion investment fraud and is now serving a 150-year prison sentence.

Both men, who had all the trappings of success, preyed on wealthy South Florida investors, among others, who were lured by the promise of a steady income stream and better-than-average return on their investment.

Court documents have said Rothstein acted with co-conspirators to carry out the $1.2 billion scheme, creating false bank documents that conned investors.

Rothstein, who appeared in court in manacles and wearing a white dress shirt and dark blue pants, apologized for his crime while saying he did not expect forgiveness.

“I’m ashamed and I’m embarrassed,” he said.

A frequent campaign contributor often photographed with local politicians, Rothstein used what Cohn described as “an opulent lifestyle funded by stolen money” to build up the connections aimed at luring rich friends and patrons to investment with him.

“It was all about influence, wealth power and influence,” Cohn said.

Prosectors have said Rothstein’s fraud centered on the sale of shares in fabricated legal settlements to unsuspecting investors since at least 2005 and used new investor money to pay previous investors in the classic Ponzi scheme model.

Debra Villegas, the former chief operating officer of Rothstein’s Fort Lauderdale law firm, has been charged in the scheme and charges against others may be coming. (Editing by Jane Sutton; Editing by Bill Trott)

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

RPT-Ford to recall 236,643 sedans in China

June 1, 2010 By Leave a Comment

May 31 (Reuters) – Ford Motor Co’s (F.N) three-way tie-up with Chongqing Changan Automobile Co (000625.SZ) and Japan’s Mazda Motor (7261.T) has applied to recall 236,643 sedans, China’s quality control office said on Monday.

The joint venture is recalling Focus cars made between Aug. 18 2008 and May 28 2010 due to engine failure under certain circumstances, according to the notice on the website of the General Administration of Quality Supervision, Inspection and Quarantine (www.aqsiq.gov.cn).

The Chongqing-based joint venture makes Fiesta, Focus, Mondeo and other sedan models in China. (Reporting by Michael Wei and Simon Rabinovitch; Editing by David Holmes)

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

RPT-China’s Hu tells Obama he wants healthy ties

April 3, 2010 By Leave a Comment

BEIJING, April 2 (Reuters) – Chinese President Hu Jintao told U.S. President Barack Obama he wants healthy ties between the two nations, while stressing Beijing’s sensitivity about Taiwan and Tibet, Chinese television reported on Friday.

Hu made the remarks in a phone call to Obama, telling him that their two governments should focus on developing “healthy” ties and that he wanted to address trade issues via talks, the report said.

But Hu also told Obama that heeding China’s concerns about Tibet and the self-ruled island of Taiwan was also “vitally important” to good relations, it said. (Reporting by Yu Le, Zhou Xin, Wang Lan and Emma Graham-Harrison; Writing by Chris Buckley; Editing by Ben Lim)

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

RPT-China’s Hu tells Obama he wants healthy ties

April 3, 2010 By Leave a Comment

BEIJING, April 2 (Reuters) – Chinese President Hu Jintao told U.S. President Barack Obama he wants healthy ties between the two nations, while stressing Beijing’s sensitivity about Taiwan and Tibet, Chinese television reported on Friday.

Hu made the remarks in a phone call to Obama, telling him that their two governments should focus on developing “healthy” ties and that he wanted to address trade issues via talks, the report said.

But Hu also told Obama that heeding China’s concerns about Tibet and the self-ruled island of Taiwan was also “vitally important” to good relations, it said. (Reporting by Yu Le, Zhou Xin, Wang Lan and Emma Graham-Harrison; Writing by Chris Buckley; Editing by Ben Lim)

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

RPT-Taiwan, China to sign financial services pact

April 20, 2009 By Leave a Comment

TAIPEI, April 18 (Reuters) – Taiwan and China will sign a deal on financial services and expand direct flights at talks next week, officials said on Saturday, but continue to avoid tough political issues.

The negotiations, to take place in Nanjing, China, from April 25-29, point to a further warming of ties as the old foes prepare to sign agreements that will facilitate business between the two sides, useful especially for recession-strapped Taiwan.

“There are no real big differences between the two sides,” said Maa Shaw-chang, deputy secretary general with the body that negotiates for Taiwan after meeting his Chinese counterparts in Taipei to set up the third round of talks.

Since Taiwan President Ma Ying-jeou took office last May, the China-friendly leader has eased tension with Beijing through trade and transit deals signed during talks last year

Topping the agenda at the next round of talks is a broad agreement on financial services cooperation. It will cover a currency clearing system between the Taiwan dollar and Chinese yuan and mutual access to information about markets, including securities and futures, Taiwan’s top China policymaker Lai Shin-yuan told reporters.

The two sides will also expand on direct daily flights that began in December, allowing charters to become regular scheduled flights while adding routes and destinations, Lai said.

For most of the past 60 years direct flights have been banned for security reasons. But about 750,000 Taiwan investors live in China, lured by a common language and lower labour costs.

China has claimed self-ruled Taiwan since 1949, when Mao Zedong’s Communists won the Chinese civil war and Chiang Kai-shek’s Nationalists (KMT) fled to Taiwan. Beijing has vowed to bring the island under its rule, by force if necessary.

“If the third round of talks go smoothly, its a further assurance of their institutional dialogue, and that’s important,” said Alexander Huang, strategic studies professor at Tamkang University in Taipei. “We are still in the process of building consensus and confidence.”

Taiwan and China are also expected to agree on ways to investigate and charge each other’s criminals, officials said, and reach consensus on gradually opening Taiwan to Chinese investment in manufacturing, services and major infrastructure projects.

But both sides have shelved political issues and China’s top official dealing with Taiwan said last month negotiations with the island will focus on economic ties for now.

(Editing by Sanjeev Miglani)

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

RPT-Nikkei jumps 3 pct on U.S. hopes, NEC Elec seen up

April 17, 2009 By Leave a Comment

TOKYO, April 16 (Reuters) – Japan’s Nikkei average gained more than 3 percent on Thursday as exporters gained on a weaker yen and on hopes that the U.S. recession could be abating, while NEC Electronics (6723.T) was bid up by its daily limit on news of merger talks with Renesas Technology Corp.

The benchmark Nikkei .N225 climbed 3.2 percent or 281.14 points to 9,024.10. The previous day it fell 1.1 percent for its third consecutive day of losses — its first such run in nearly two weeks.

The broader Topix .TOPIX added 2.2 percent to 853.49. (Reporting by Aiko Hayashi)

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

RPT-Bridgepoint IPO prices below range at $10.50- source

April 16, 2009 By Leave a Comment

(Repeats without changes to text or headline)

NEW YORK, April 14 (Reuters) – Bridgepoint Education Inc’s BPI.N initial public offering priced at $10.50 per share, below its estimated range of $14 to $16, a source with knowledge of the deal said on Tuesday.

Bridgepoint, a San Diego-based operator of online and campus universities, sold 13.5 million shares, raising $141.75 million, the source said. The company had estimated its IPO could raise as much as $216 million.

About 81 percent of the shares sold were held by private equity firm Warburg Pincus.

The underwriters, led by Credit Suisse (CSGN.VX) and JP Morgan (JPM.N), have the option to buy up to 2.025 million shares additional shares to cover over-allotments.

The company plans to list on the New York Stock Exchange under the symbol “BPI” and begin trading Wednesday.

(Reporting by Phil Wahba)

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

RPT-GRAPHIC-Asia equity rally may fade, but prospects less bleak

April 13, 2009 By Leave a Comment

(Repeats from last week)

By Kevin Plumberg and Eric Burroughs

HONG KONG, April 9 (Reuters) – Asian equity markets struck a six-month high this week and have outpaced gains in other parts of the world on hopes that China’s budding economic recovery will spread through the region, helping offset the damage from collapsing exports.

Sectors that tend to outperform in cyclical upturns — technology, materials and consumer discretionary — have been leading the charge, coinciding with reduced foreign portfolio outflows from the region.

In one positive sign, the rally has coincided with a pick-up in trading volumes. But with exports still tumbling by double-digit figures, the earnings outlook poor and credit markets still tight, this rally is shaping up as a bear market blip.

More signs of a sustained economic recovery are likely needed for a more robust stock rebound.

Below are graphics and analysis on the positive and negative signals coming from the Asian equity rally. Click on the links below to see the graphics.

ASIA STOCKS OUTPERFORM ON CHINA RECOVERY

> here

Since the end of February, the MSCI APXJ jumped as much as 26 percent versus a 16 percent rise in world stocks .MIWD00000PUS, primarily driven by expectations China’s $587 billion on stimulus spending and torrid loan growth will generate demand for neighbouring exports.

Technology shares .MIAPJIT00PUS have powered the rise. Outside of China, Taiwan’s tech-heavy TAIEX index has been the biggest gainer of major equity markets this year, with a rise of more than 5 percent as local companies have received “rush orders” from China for electronics.

Even in Japan, where exports have collapsed, the pace of decline in shipments to China slowed in February.

In March, China’s manufacturing PMI rose for a fourth month and registered expansion for the first time since September. Bank lending hit a record high that month, according to local reports.

OUTFLOWS FROM ASIA EX-JAPAN SLOW

> here

One-year forward valuations in Asia ex-Japan fell to a cycle low in November, below 10 times expected earnings, shortly after the pace of portfolio outflows from the region slowed.

P/E ratios have since continued to climb but the market is still widely viewed as being full of bargains.

In Japan, price-to-book value of the Nikkei share index .N225 has been below that level for three months running, going as low as 0.81 — a very rare development for a developed market. By contrast, the price-to-book on the S and P 500 .SPX has only briefly been below one — in 1982 — in the past 32 years.

Meanwhile, Asia ex-Japan funds have seen new investment for four consecutive weeks, according to fund tracker EPFR Global.

CASH HOLDINGS SLOWLY COME DOWN

> here

If fear drove investors to increase the allocation towards cash in their portfolios, then greed for higher returns is the only thing that would drive them to reduce it.

Net assets of U.S. institutional money market funds as a percentage of the Russell 3000 reached 35 percent in March before easing a bit to below 30 percent.

Yet that remains very high when compared with levels around 8 percent seen before the financial crisis began in 2007.

RALLY ON RISING VOLUMES

> here

While stocks have given back some of their gains, the move up was on the back of the first sustained rise in trading volumes since the sell-off last year. Market gains on rising volumes give more credence to the move. When Nikkei futures jumped 3.7 percent last Thursday, it was on the biggest volume since mid-December.

Volumes had plunged across markets late last year as investors were spooked by the massive market volatility last October and November. Open interest in equity futures has also climbed during the rally, another sign that investors are building up longs.

BUT CREDIT IS LAGGING

> here

One worrying sign is that Asia stocks have run ahead of the improvement in credit markets, a move that breaks from history as credit markets tend to lead the cyclical recoveries in equities. In the past month, the five-year iTraxx index of Asia ex-Japan investment grade credit has tightened about 150 basis points to a low of 305 basis points, but that is still above the tightest levels in January at 278 basis points.

By contrast, the run-up in the MSCI Asia Pacific ex-Japan appeared to lead the recovery in credit markets and went to the highest since mid-October when the iTraxx index was closer to 260 basis points. Until credit markets recover more, which depends in part on better investor confidence in financials, the equity rebound will likely be on shaky footing. (Editing by Kazunori Takada)

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

RPT-Pirate sources say Norwegian ship to be freed

April 12, 2009 By Leave a Comment

MOGADISHU, April 10 (Reuters) – Somali pirate sources said on Friday that the Norwegian-owned, 23,000-tonne MT Bow Asir tanker captured at the end of March would be released shortly after a $2.4 million ransom was agreed with its owners.

“After much bargaining, my friends reached a $2.4 million ransom deal with the Norwegian ship held near Hobyo,” a pirate in nearby Haradheere port told Reuters.

A regional official confirmed the deal, saying he expected the ship — with its 27 crew including a Norwegian captain, 19 Filipinos, five Poles, one Russian and one Lithuanian — to be released later on Friday or Saturday. (Reporting by Abdi Guled; Writing by Andrew Cawthorne; Editing by Kevin Liffey)

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

RPT-UPDATE 1-S and P cuts ratings on Chrysler debt

April 11, 2009 By Leave a Comment

(Repeats story transmitted earlier on Friday)

* S and P cuts ratings on debt due in 2013, 2014

* Says Chrysler would likely dissolve in event of bankruptcy

NEW YORK, April 10 (Reuters) – Standard and Poor’s Rating Services on Friday lowered its debt ratings on Chrysler CBS.UL loans due in 2013 and 2014, citing a lower potential recovery by debtors in the event of payment defaults by the carmaker.

Standard and Poor’s said it lowered by two notches its issue-level ratings on Chrysler’s senior secured first-lien term loan due 2013 to ‘CC’ from ‘CCC’. S and P said its downgrade indicates lenders can expect an average 30 to 50 percent recovery in the event of a payment default.

The ratings agency said its corporate credit rating was left unchanged, at ‘CC’, reflecting no change in its view of the likelihood of default by Chrysler from either a bankruptcy or a distressed debt exchange.

Standard and Poor’s lowered its issue rating on the carmaker’s senior secured second-lien term loan due 2014 by one notch to ‘C’ from ‘CC’, suggesting lenders can expect a negligible to a 10 percent recovery if a default occurs.

“The lowering of our issue ratings reflects lower recovery estimates, given our current view that Chrysler would be unlikely to emerge from bankruptcy as one reorganized entity,” Standard and Poor’s recovery analyst Greg Maddock said in a release.

“If Chrysler goes into bankruptcy, I would expect it to go into liquidation — that its assets would be sold in whole or in part,” Maddock said in an interview.

“Instead of being reorganized, there would be no carmaker after bankruptcy,” he said. (Reporting by Ransdell Pierson; Editing by John Picinich)

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