By David Yong and Kim Kyoungwha
July 28 (Bloomberg) -- Malaysia's ringgit fell, leading losses in Asian currencies, after the central bank unexpectedly refrained from raising interest rates amid the fastest inflation in 26 years.
Bank Negara Malaysia on July 25 kept its overnight policy rate at 3.5 percent for an 18th straight meeting, citing increased risks to the economy. Fourteen of 20 economists had expected an increase to 3.75 percent before the decision was announced after the market closed. South Korea's won gained after the nation's current-account posted its first current- account surplus in seven months.
``The sell-off reflects the market's disappointment with the decision,'' said Kit Wei Zheng, a Singapore-based economist at Citigroup Inc. ``This will increase the likelihood that they will spend some reserves to defend the currency.''
The ringgit traded near a three-week low of 3.2650 per dollar as of 12:34 p.m. in Kuala Lumpur after falling as much as 0.5 percent to 3.2675, according to data compiled by Bloomberg. The won climbed as much as 0.4 percent to 1,005.25, according to Seoul Money Brokerages Ltd.
Half of Asia's 10 most-traded currencies outside Japan fell as the dollar extended its gain after the U.S. Congress passed legislation to stem foreclosures and prop up Fannie Mae and Freddie Mac.
``While both the risks to higher inflation and the risks to slower growth have increased, the immediate concern is to avoid a fundamental economic slowdown,'' Bank Negara Malaysia said in the statement. ``The appropriate monetary policy response will be taken'' should price increases spread beyond food and fuel.
Current-Account Surplus
The won has risen 4.1 percent this month, halting monthly declines since February, as policy makers supported its own currency after inflation accelerated 5.5 percent in June, the fastest in a decade.
``The atmosphere is turning favorable for the won,'' said Ko Yun Jin, a dealer in Seoul at Kookmin Bank, the nation's largest bank. ``Month-end export settlements may give an additional boost to the currency.''
South Korea had a current-account surplus of $1.82 billion for June, versus a $378 million deficit in May, the Bank of Korea said in Seoul today. The current account is the broadest measure of trade, tracking goods, services and investment income.
The government this month forecast a trade surplus of $3.8 billion in the second half of 2008, led by exports to China. It had a trade deficit of $5.7 billion in the first six months.
Central banks intervene in currency markets by arranging sales or purchase of foreign exchange. A stronger won helps lower import costs and tempers inflation.
Thai Risks
Thailand's baht fell 0.1 percent to 33.44 in Bangkok on concern that slowing economic growth and a court case will undermine Finance Minister Surapong Suebwonglee, raising political risks and deterring investors.
Surapong is among three current ministers who also served in former premier Thaksin Shinawatra's cabinet who are facing a lawsuit alleging wrongdoing in the creation of a state-run lottery in 2003. Thailand's Supreme Court accepted the lawsuit, state-controlled Channel 9 television reported today, without saying where it got the information from.
`Hostage to Politics'
``The market remains a hostage to politics,'' said Sompob Asavaritikrai, head of trading at Bank of Ayudhya Pcl in Bangkok. ``If the court rules it will take the case, it will create more political uncertainty. It will hurt investor confidence. It is going to be negative for Thai stocks and the baht.''
Indonesia's rupiah rose 0.1 percent to near a two-week high of 9,113 per dollar on speculation the central bank will raise interest rates for a fourth time next month to temper the fastest inflation in 21 months.
Consumer prices probably rose in July at an annual pace of 11.1 percent, according to the median forecast in a Bloomberg News survey, versus 11 percent in June. The report is due on Aug. 1 while monetary policy makers will meet four days later.
``The bias for the dollar against the rupiah is downwards barring further worsening in the global environment,'' said Christy Tan, a senior currency strategist at Bank of America Corp. in Singapore. ``If they continue to tighten monetary policy and if oil prices come off to a more comfortable level, the scope for the dollar to fall below 9,100 rupiah is very real.''
Elsewhere, the Singapore dollar declined 0.4 percent to S$1.3639 while Vietnam's dong gained 0.1 percent to 16,780. The Philippine peso was little changed at 44.04 against the U.S. currency.
To contact the reporters on this story: David Yong in Singapore at dyong@bloomberg.net; Kim Kyoungwha in Beijing at kkim19@bloomberg.net.
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Monday, July 28, 2008
Pound Falls as Report Shows House Prices Drop Most Since 2001
By Andrew MacAskill
July 28 (Bloomberg) -- The pound fell against the euro and the dollar after a private report showed U.K. house values dropped by the most in at least seven years in July.
The British currency weakened to 79 pence as of 6:50 a.m. in London, from 78.87 pence at the end of last week. It was at $1.9874, from $1.9916. The pound dropped 6.9 percent versus the euro this year and is little changed against the dollar.
The average cost of a residential property in England and Wales slipped 4.4 percent from a year earlier, Hometrack Ltd., a London-based research company, said today in a statement. That's the biggest annual drop since the index started seven years ago. Prices fell 1.2 percent from June.
Slowing economic growth and the prospect of cuts in the Bank of England's benchmark interest rate will weaken the pound to $1.90 and 79 pence per euro by year-end, according to the median forecast of analysts and strategists surveyed by Bloomberg. The central bank left its key rate at 5 percent on July 10.
The odds of policy makers cutting interest rates for a third time this year were little changed last week, with the implied yield on the December short-sterling futures contract staying at 5.94 percent.
U.K. government bonds climbed last week, with the yield on the 10-year gilt falling 5 basis points to 4.99 percent. The price of the 5 percent security due March 2018 advanced 0.35, or 3.5 pounds per 1,000-pound ($1,987) face amount, to 100.07. The two-year note slid 13 basis points to 4.97 percent.
Gains in gilts will lower the yield on the 10-year note to 4.89 percent by year-end, according to a Bloomberg survey. Bond yields move inversely to prices.
To contact the reporter on this story: Andrew MacAskill in London at amacaskill@bloomberg.net
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July 28 (Bloomberg) -- The pound fell against the euro and the dollar after a private report showed U.K. house values dropped by the most in at least seven years in July.
The British currency weakened to 79 pence as of 6:50 a.m. in London, from 78.87 pence at the end of last week. It was at $1.9874, from $1.9916. The pound dropped 6.9 percent versus the euro this year and is little changed against the dollar.
The average cost of a residential property in England and Wales slipped 4.4 percent from a year earlier, Hometrack Ltd., a London-based research company, said today in a statement. That's the biggest annual drop since the index started seven years ago. Prices fell 1.2 percent from June.
Slowing economic growth and the prospect of cuts in the Bank of England's benchmark interest rate will weaken the pound to $1.90 and 79 pence per euro by year-end, according to the median forecast of analysts and strategists surveyed by Bloomberg. The central bank left its key rate at 5 percent on July 10.
The odds of policy makers cutting interest rates for a third time this year were little changed last week, with the implied yield on the December short-sterling futures contract staying at 5.94 percent.
U.K. government bonds climbed last week, with the yield on the 10-year gilt falling 5 basis points to 4.99 percent. The price of the 5 percent security due March 2018 advanced 0.35, or 3.5 pounds per 1,000-pound ($1,987) face amount, to 100.07. The two-year note slid 13 basis points to 4.97 percent.
Gains in gilts will lower the yield on the 10-year note to 4.89 percent by year-end, according to a Bloomberg survey. Bond yields move inversely to prices.
To contact the reporter on this story: Andrew MacAskill in London at amacaskill@bloomberg.net
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Yuan Declines on Signs China to Pursue Polices to Spur Growth
By Judy Chen and Kim Kyoungwha
July 28 (Bloomberg) -- China's yuan declined for the first time in three days after the Politburo said maintaining economic growth and curbing inflation are priorities, fueling speculation the government will slow gains to aid exporters.
The Politburo, the Communist Party's top decision-making body, wants to maintain ``steady and relatively fast'' economic growth, state-run China Central Television reported on July 25. The yuan's 7 percent advance this year is eroding the value of overseas sales as manufacturers contend with the slowest domestic economic growth since 2005.
``The yuan's appreciation will slow significantly in the second half, especially in the fourth quarter,'' said Lu Zhengwei, an economist at Industrial Bank Co. in Shanghai. ``For the first time, the government replaces preventing overheating with maintaining growth among its top priorities.''
The yuan fell 0.11 percent to 6.8266 per dollar in Shanghai as of 12:16 p.m., from 6.8189 late last week, according to the China Foreign Exchange Trade System. The currency has climbed 0.4 percent versus the dollar in July.
The goal of achieving stable growth has been made more difficult due to uncertainties and instabilities of the global economy, CCTV reported, citing the Politburo. Gross domestic product rose 10.1 percent in the second quarter from a year earlier, after expanding 10.6 percent in the first.
China will keep the yuan stable in a ``self-initiated, controllable and gradual manner,'' the People's Bank of China said in a statement on its Web site yesterday, after the monetary policy committee's second-quarter meeting. The statement didn't reiterate the central bank's pledge to ``increase the exchange rate's flexibility,'' included since the third quarter of 2007.
Clear Signal
``The omission of `flexibility' is a clear signal that the central bank will slow the pace of yuan gains,'' said Shi Lei, a Beijing-based analyst at Bank of China Ltd., the country's largest foreign-currency trader. ``It has reduced reliance on using currency appreciation to curb inflation.''
The central bank set a weaker daily reference rate for the yuan today at 6.8277. The yuan is allowed to trade by up to 0.5 percent against the dollar either side of the so-called central parity rate.
Government bonds due in more than three years fell on concern that inflation will erode returns on longer-dated securities. China's inflation was 7.9 percent in the six months through June, the fastest pace since 1996.
``The inflation rate is still at a high level,'' said Yang Hui, a fixed-income analyst with Citic Securities Co. in Beijing. ``Most funds won't enter the debt market first, even if there were some loosening in the monetary policy to maintain growth.''
Yang said yields on longer-term debt rose faster than short-term securities. The People's Bank of China has sold three-month bills at around 3.40 percent during weekly auctions since Dec. 14.
The yield on the 3.69 percent treasury note due in April 2013 rose 6 basis points to 4.2 percent, according to the China Interbank Bond Market. The price of the security dropped 0.25 per 100 yuan face amount to 97.84.
To contact the reporters on this story: Judy Chen in Shanghai at xchen45@bloomberg.net; Kim Kyoungwha in Beijing at kkim19@bloomberg.net.
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July 28 (Bloomberg) -- China's yuan declined for the first time in three days after the Politburo said maintaining economic growth and curbing inflation are priorities, fueling speculation the government will slow gains to aid exporters.
The Politburo, the Communist Party's top decision-making body, wants to maintain ``steady and relatively fast'' economic growth, state-run China Central Television reported on July 25. The yuan's 7 percent advance this year is eroding the value of overseas sales as manufacturers contend with the slowest domestic economic growth since 2005.
``The yuan's appreciation will slow significantly in the second half, especially in the fourth quarter,'' said Lu Zhengwei, an economist at Industrial Bank Co. in Shanghai. ``For the first time, the government replaces preventing overheating with maintaining growth among its top priorities.''
The yuan fell 0.11 percent to 6.8266 per dollar in Shanghai as of 12:16 p.m., from 6.8189 late last week, according to the China Foreign Exchange Trade System. The currency has climbed 0.4 percent versus the dollar in July.
The goal of achieving stable growth has been made more difficult due to uncertainties and instabilities of the global economy, CCTV reported, citing the Politburo. Gross domestic product rose 10.1 percent in the second quarter from a year earlier, after expanding 10.6 percent in the first.
China will keep the yuan stable in a ``self-initiated, controllable and gradual manner,'' the People's Bank of China said in a statement on its Web site yesterday, after the monetary policy committee's second-quarter meeting. The statement didn't reiterate the central bank's pledge to ``increase the exchange rate's flexibility,'' included since the third quarter of 2007.
Clear Signal
``The omission of `flexibility' is a clear signal that the central bank will slow the pace of yuan gains,'' said Shi Lei, a Beijing-based analyst at Bank of China Ltd., the country's largest foreign-currency trader. ``It has reduced reliance on using currency appreciation to curb inflation.''
The central bank set a weaker daily reference rate for the yuan today at 6.8277. The yuan is allowed to trade by up to 0.5 percent against the dollar either side of the so-called central parity rate.
Government bonds due in more than three years fell on concern that inflation will erode returns on longer-dated securities. China's inflation was 7.9 percent in the six months through June, the fastest pace since 1996.
``The inflation rate is still at a high level,'' said Yang Hui, a fixed-income analyst with Citic Securities Co. in Beijing. ``Most funds won't enter the debt market first, even if there were some loosening in the monetary policy to maintain growth.''
Yang said yields on longer-term debt rose faster than short-term securities. The People's Bank of China has sold three-month bills at around 3.40 percent during weekly auctions since Dec. 14.
The yield on the 3.69 percent treasury note due in April 2013 rose 6 basis points to 4.2 percent, according to the China Interbank Bond Market. The price of the security dropped 0.25 per 100 yuan face amount to 97.84.
To contact the reporters on this story: Judy Chen in Shanghai at xchen45@bloomberg.net; Kim Kyoungwha in Beijing at kkim19@bloomberg.net.
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Queensland Rail May Need to Double A$3.75 Billion Spending Plan
By Jesse Riseborough
July 28 (Bloomberg) -- Queensland Rail, Australia's largest coal transporter, said it may need to double a A$3.75 billion ($3.6 billion) spending plan for trains and new railroads to meet surging demand from mining companies.
``I would expect that some of those projects that we are talking about will more than double those kinds of numbers,'' Queensland Rail Chief Executive Officer Lance Hockridge said today in Brisbane, the Australian state's capital.
Queensland, home to the world's biggest coking coal supplier, is spending A$9 billion on new ports and railroads to double exports within 20 years, Premier Anna Bligh said this month. Queensland Rail's largest expansion plan is for the Goonyella network, which hauls coal from mines to ports on the state's north coast.
``The Goonyella/Abbott Point infrastructure project is likely alone to match'' the projected spending on expansion, Hockridge said in an interview.
State-owned Queensland Rail is improving networks and buying additional locomotives so that mining companies in the region including BHP Billiton Ltd., a partner in the world's largest producer of coking coal, and Xstrata Plc can expand output for the steelmaking material at a faster pace.
``It is clearly a very, very substantial capital investment, with very significant risks, and we would expect that that will lead to some interesting negotiations with the coal customers and we have started some private discussions,'' Hockridge said.
China, South Africa
Constraints in Australian ports and railroad networks combined with power shortages in China and South Africa have curbed global supplies, pushing both coking and thermal coal prices to records this year.
Mining companies in the state plan to spend A$11.5 billion on new projects over the next five years to gain from surging demand. Queensland port and rail expansions may boost total exports to 370 million metric tons of coal by 2030, Bligh said this month.
``Given the heat in the industry and given the level of interest, there is no reason to say that's not possible,'' Hockridge said. The potential expansion of Queensland Rail's Goonyella network, including the so-called Northern Missing Link, may add about 100 million tons of annual capacity, Hockridge said. A final development decision is expected by the end of the year, he said.
Bowen Basin
An expansion project to enlarge rail capacity for coal deliveries to Dalrymple Bay Coal Terminal Pty, the second- largest in Australia, is due to be completed by the end of next year, Hockridge said earlier at the Coaltrans Australia conference. The project will boost capacity on the line to the port to 130 million tons a year, he said.
Dalrymple Bay, which is undergoing a A$1.3 billion expansion, handles coal from 15 mines in the Bowen Basin region, source of about 40 percent of the world's coking coal exports.
Australia, the world's largest coal exporter, shipped about 253 million tons of coal in 2007, a figure that will rise to 326 million tons by 2011, Credit Suisse Group forecast in a June 23 report. Australian exports may be constrained to 300 million tons a year by 2014 on port and rail bottlenecks, Citigroup Inc.'s Alan Heap said last week.
Queensland Rail operates 500 coal services a week from 62 mines in two states and also runs Queensland's passenger train network.
To contact the reporter on this story: Jesse Riseborough in Brisbane at jriseborough@bloomberg.net
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July 28 (Bloomberg) -- Queensland Rail, Australia's largest coal transporter, said it may need to double a A$3.75 billion ($3.6 billion) spending plan for trains and new railroads to meet surging demand from mining companies.
``I would expect that some of those projects that we are talking about will more than double those kinds of numbers,'' Queensland Rail Chief Executive Officer Lance Hockridge said today in Brisbane, the Australian state's capital.
Queensland, home to the world's biggest coking coal supplier, is spending A$9 billion on new ports and railroads to double exports within 20 years, Premier Anna Bligh said this month. Queensland Rail's largest expansion plan is for the Goonyella network, which hauls coal from mines to ports on the state's north coast.
``The Goonyella/Abbott Point infrastructure project is likely alone to match'' the projected spending on expansion, Hockridge said in an interview.
State-owned Queensland Rail is improving networks and buying additional locomotives so that mining companies in the region including BHP Billiton Ltd., a partner in the world's largest producer of coking coal, and Xstrata Plc can expand output for the steelmaking material at a faster pace.
``It is clearly a very, very substantial capital investment, with very significant risks, and we would expect that that will lead to some interesting negotiations with the coal customers and we have started some private discussions,'' Hockridge said.
China, South Africa
Constraints in Australian ports and railroad networks combined with power shortages in China and South Africa have curbed global supplies, pushing both coking and thermal coal prices to records this year.
Mining companies in the state plan to spend A$11.5 billion on new projects over the next five years to gain from surging demand. Queensland port and rail expansions may boost total exports to 370 million metric tons of coal by 2030, Bligh said this month.
``Given the heat in the industry and given the level of interest, there is no reason to say that's not possible,'' Hockridge said. The potential expansion of Queensland Rail's Goonyella network, including the so-called Northern Missing Link, may add about 100 million tons of annual capacity, Hockridge said. A final development decision is expected by the end of the year, he said.
Bowen Basin
An expansion project to enlarge rail capacity for coal deliveries to Dalrymple Bay Coal Terminal Pty, the second- largest in Australia, is due to be completed by the end of next year, Hockridge said earlier at the Coaltrans Australia conference. The project will boost capacity on the line to the port to 130 million tons a year, he said.
Dalrymple Bay, which is undergoing a A$1.3 billion expansion, handles coal from 15 mines in the Bowen Basin region, source of about 40 percent of the world's coking coal exports.
Australia, the world's largest coal exporter, shipped about 253 million tons of coal in 2007, a figure that will rise to 326 million tons by 2011, Credit Suisse Group forecast in a June 23 report. Australian exports may be constrained to 300 million tons a year by 2014 on port and rail bottlenecks, Citigroup Inc.'s Alan Heap said last week.
Queensland Rail operates 500 coal services a week from 62 mines in two states and also runs Queensland's passenger train network.
To contact the reporter on this story: Jesse Riseborough in Brisbane at jriseborough@bloomberg.net
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Credit Quality Worsens in Poland, Eastern Europe, Moody's Says
By John Glover
July 28 (Bloomberg) -- Companies in eastern Europe had more credit rating downgrades than upgrades for the first time in a year last quarter as damage from the financial crisis triggered by U.S. mortgages spread worldwide, Moody's Investors Service said.
Moody's cut four companies including Zlomrex SA, Poland's largest supplier of scrap metal, and Kremikovtzi AD, Bulgaria's biggest steel mill, according to ratings changes listed on Bloomberg. Three companies were raised, including Moscow-based lender ZAO Promsvyazbank and AKIB UkrSibbank, the Ukraine unit of BNP Paribas SA.
Credit quality in eastern Europe is likely to deteriorate further as inflation puts pressure on central banks to increase interest rates, making it harder for companies to repay their debt, Moody's said. Western European credit ratings turned negative in the third quarter of last year and 173 companies were downgraded between April and June, more than triple the number raised, Moody's data on Bloomberg show.
``Eastern European borrowers in some sectors are starting to feel the impact of the credit crunch and slowing growth,'' said Ruth Stroppiana, chief international economist at Moody's Economy.com unit. ``However, credit quality remains in better shape than in western Europe.''
To contact the reporter on this story: John Glover in London at johnglover@bloomberg.net
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July 28 (Bloomberg) -- Companies in eastern Europe had more credit rating downgrades than upgrades for the first time in a year last quarter as damage from the financial crisis triggered by U.S. mortgages spread worldwide, Moody's Investors Service said.
Moody's cut four companies including Zlomrex SA, Poland's largest supplier of scrap metal, and Kremikovtzi AD, Bulgaria's biggest steel mill, according to ratings changes listed on Bloomberg. Three companies were raised, including Moscow-based lender ZAO Promsvyazbank and AKIB UkrSibbank, the Ukraine unit of BNP Paribas SA.
Credit quality in eastern Europe is likely to deteriorate further as inflation puts pressure on central banks to increase interest rates, making it harder for companies to repay their debt, Moody's said. Western European credit ratings turned negative in the third quarter of last year and 173 companies were downgraded between April and June, more than triple the number raised, Moody's data on Bloomberg show.
``Eastern European borrowers in some sectors are starting to feel the impact of the credit crunch and slowing growth,'' said Ruth Stroppiana, chief international economist at Moody's Economy.com unit. ``However, credit quality remains in better shape than in western Europe.''
To contact the reporter on this story: John Glover in London at johnglover@bloomberg.net
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Dollar Trades Near 1-Month High on Fannie, Freddie Rescue Bill
By Kosuke Goto and Stanley White
July 28 (Bloomberg) -- The dollar traded near a one-month high against the yen after Congress passed legislation to prop up Fannie Mae and Freddie Mac, the two largest providers of U.S. mortgage financing.
The currency was also near a three-week high versus the euro on speculation a government report this week will show the U.S. economy expanded last quarter at more than twice the annual pace of the prior three months. The Chinese yuan fell for the first time in three days on speculation the government will slow gains in the currency to support exports as growth slows.
``The rescue plan is supportive for the dollar,'' said Yuji Saito, head of foreign-exchange sales in Tokyo at Societe Generale SA, France's second-largest bank by market value. ``It relieves the anxiety about the U.S. housing slump.''
The dollar rose to 108.07 yen, the highest level since June 26, before trading at 107.79 yen at 6:04 a.m. in London, from 107.84 on July 25 in New York. It was at $1.5718 a euro, from $1.5709. The euro traded at 169.41 yen, near a record 169.96 set July 23 and unchanged from 169.52 at the end of last week.
The greenback may rise to as high as 108.60 yen should it break through 108.30 yen today, Saito forecast.
The U.S. Congress sent to the president legislation to stem foreclosures for 400,000 homeowners and aid Fannie Mae and Freddie Mac, its most sweeping effort to halt the biggest housing slump since the Great Depression in the 1930s. President George W. Bush will sign the measure into law, a spokesman said.
Won, Yuan
The South Korean won rose 0.3 percent to 1,005.80 against the dollar after the nation posted a current-account surplus for the first time in seven months in June. The won is headed for its strongest month since January 2006 after the government bought the currency to help curb inflation.
The Chinese yuan fell 0.1 percent to 6.8266 per dollar after the Communist Party's Politburo said on July 25 growth and inflation are both priorities, fueling speculation the government will curb currency appreciation to aid exporters. The yuan has strengthened 7 percent this year, the most among Asia's 10 most-traded currencies outside Japan.
The Australian dollar was little changed at 95.56 U.S. cents. It earlier fell to an almost three-week low of 95.27 cents after Australia & New Zealand Banking Group Ltd., the nation's fourth-biggest bank by market value, joined National Australia Bank Ltd., the largest, in warning of increased provisions for non-performing loans.
Weaker Aussie
Six months after correctly identifying the Australian dollar as one of the best bets in the foreign exchange market, the biggest investor in the nation's debt says the rally is coming to an end.
Daiwa Asset Management Co., which holds 4 percent of the government's bonds, expects the currency to close the year at $1, after earlier forecasting a surge to $1.10. Daiwa cut its estimate as the country's benchmark S&P/ASX 200 Index of stocks dropped to a 2 1/2-year low this month and the Reuters/Jefferies CRB Index of commodities fell 13 percent from its record high on July 2.
Mizuho Asset Management Co., State Street Global Advisors and Putnam Investments are also turning into bears as the U.S. economic slowdown spreads, curtailing the rally in coal, oil and metals that fueled Australia's expansion. Lehman Brothers Holdings Inc., which recommended the currency in February, now predicts it will depreciate 21 percent by 2009.
Home Prices
Gains in the U.S. dollar may be limited by speculation that declines in home prices and employment will make it difficult for the Federal Reserve to raise interest rates.
Home prices in the S&P/Case-Shiller index fell by 16 percent in May from a year ago, the most on record, according to a Bloomberg News survey before the release tomorrow. U.S. nonfarm payrolls fell by 75,000 in July, following a decline of 62,000 in June, according to a separate survey. The Labor Department will release the data on Aug. 1.
``Data on housing and payrolls pose downside risks to the dollar,'' said Akifumi Uchida, deputy general manager of the marketing unit at Sumitomo Trust & Banking Co. in Tokyo. ``Given the state of the housing market, you can't be overly optimistic on the U.S. economy. That makes it almost impossible for the Fed to raise rates.''
The dollar may fall to 106 yen this week, he said.
Futures on the Chicago Board of Trade show a 93 percent chance the Fed will keep borrowing costs on hold at 2 percent when it announces its next decision on Aug. 5, up from 64 percent a month ago.
U.S. GDP
U.S. gross domestic product expanded an annualized 2.3 percent in the second quarter, faster than 1 percent growth in the previous quarter, according to a Bloomberg News survey. The government will release the data on July 31.
Consumer spending accelerated to a 1.5 percent gain in the quarter, the survey shows, as the U.S. handed out tax rebates to support the economy. As of yesterday, the government had already distributed almost 80 percent of the more than $100 billion in tax rebates, Treasury figures show.
``Any dollar gains after the GDP report are likely to prove temporary,'' said Masafumi Yamamoto, head of foreign exchange strategy for Japan at Royal Bank of Scotland Group Plc in Tokyo and a former Bank of Japan currency trader, in a research note today. ``Growth due to fiscal stimulus is a one-off that will fade away in the second half of the year.''
German Confidence
The euro may weaken on speculation an industry report today will show German consumer confidence fell for a third month as soaring energy prices sapped people's purchasing power. GfK AG's index for August probably declined to 3.5 from 3.9 for July, the Nuremberg-based market-research company will say today, according to a Bloomberg News survey of economists.
``The European economy is facing a major setback,'' Tomoko Fujii, head of Japan economics and strategy at Bank of America in Tokyo, wrote in a research note today. ``The markets cannot price in an ECB rate hike any more. We are recommending euro- selling against the dollar.''
Europe's single currency may fall to $1.54 against the dollar by the end of September, she said.
To contact the reporters on this story: Kosuke Goto in Tokyo at kgoto2@bloomberg.net; Stanley White in Tokyo at swhite28@bloomberg.net
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July 28 (Bloomberg) -- The dollar traded near a one-month high against the yen after Congress passed legislation to prop up Fannie Mae and Freddie Mac, the two largest providers of U.S. mortgage financing.
The currency was also near a three-week high versus the euro on speculation a government report this week will show the U.S. economy expanded last quarter at more than twice the annual pace of the prior three months. The Chinese yuan fell for the first time in three days on speculation the government will slow gains in the currency to support exports as growth slows.
``The rescue plan is supportive for the dollar,'' said Yuji Saito, head of foreign-exchange sales in Tokyo at Societe Generale SA, France's second-largest bank by market value. ``It relieves the anxiety about the U.S. housing slump.''
The dollar rose to 108.07 yen, the highest level since June 26, before trading at 107.79 yen at 6:04 a.m. in London, from 107.84 on July 25 in New York. It was at $1.5718 a euro, from $1.5709. The euro traded at 169.41 yen, near a record 169.96 set July 23 and unchanged from 169.52 at the end of last week.
The greenback may rise to as high as 108.60 yen should it break through 108.30 yen today, Saito forecast.
The U.S. Congress sent to the president legislation to stem foreclosures for 400,000 homeowners and aid Fannie Mae and Freddie Mac, its most sweeping effort to halt the biggest housing slump since the Great Depression in the 1930s. President George W. Bush will sign the measure into law, a spokesman said.
Won, Yuan
The South Korean won rose 0.3 percent to 1,005.80 against the dollar after the nation posted a current-account surplus for the first time in seven months in June. The won is headed for its strongest month since January 2006 after the government bought the currency to help curb inflation.
The Chinese yuan fell 0.1 percent to 6.8266 per dollar after the Communist Party's Politburo said on July 25 growth and inflation are both priorities, fueling speculation the government will curb currency appreciation to aid exporters. The yuan has strengthened 7 percent this year, the most among Asia's 10 most-traded currencies outside Japan.
The Australian dollar was little changed at 95.56 U.S. cents. It earlier fell to an almost three-week low of 95.27 cents after Australia & New Zealand Banking Group Ltd., the nation's fourth-biggest bank by market value, joined National Australia Bank Ltd., the largest, in warning of increased provisions for non-performing loans.
Weaker Aussie
Six months after correctly identifying the Australian dollar as one of the best bets in the foreign exchange market, the biggest investor in the nation's debt says the rally is coming to an end.
Daiwa Asset Management Co., which holds 4 percent of the government's bonds, expects the currency to close the year at $1, after earlier forecasting a surge to $1.10. Daiwa cut its estimate as the country's benchmark S&P/ASX 200 Index of stocks dropped to a 2 1/2-year low this month and the Reuters/Jefferies CRB Index of commodities fell 13 percent from its record high on July 2.
Mizuho Asset Management Co., State Street Global Advisors and Putnam Investments are also turning into bears as the U.S. economic slowdown spreads, curtailing the rally in coal, oil and metals that fueled Australia's expansion. Lehman Brothers Holdings Inc., which recommended the currency in February, now predicts it will depreciate 21 percent by 2009.
Home Prices
Gains in the U.S. dollar may be limited by speculation that declines in home prices and employment will make it difficult for the Federal Reserve to raise interest rates.
Home prices in the S&P/Case-Shiller index fell by 16 percent in May from a year ago, the most on record, according to a Bloomberg News survey before the release tomorrow. U.S. nonfarm payrolls fell by 75,000 in July, following a decline of 62,000 in June, according to a separate survey. The Labor Department will release the data on Aug. 1.
``Data on housing and payrolls pose downside risks to the dollar,'' said Akifumi Uchida, deputy general manager of the marketing unit at Sumitomo Trust & Banking Co. in Tokyo. ``Given the state of the housing market, you can't be overly optimistic on the U.S. economy. That makes it almost impossible for the Fed to raise rates.''
The dollar may fall to 106 yen this week, he said.
Futures on the Chicago Board of Trade show a 93 percent chance the Fed will keep borrowing costs on hold at 2 percent when it announces its next decision on Aug. 5, up from 64 percent a month ago.
U.S. GDP
U.S. gross domestic product expanded an annualized 2.3 percent in the second quarter, faster than 1 percent growth in the previous quarter, according to a Bloomberg News survey. The government will release the data on July 31.
Consumer spending accelerated to a 1.5 percent gain in the quarter, the survey shows, as the U.S. handed out tax rebates to support the economy. As of yesterday, the government had already distributed almost 80 percent of the more than $100 billion in tax rebates, Treasury figures show.
``Any dollar gains after the GDP report are likely to prove temporary,'' said Masafumi Yamamoto, head of foreign exchange strategy for Japan at Royal Bank of Scotland Group Plc in Tokyo and a former Bank of Japan currency trader, in a research note today. ``Growth due to fiscal stimulus is a one-off that will fade away in the second half of the year.''
German Confidence
The euro may weaken on speculation an industry report today will show German consumer confidence fell for a third month as soaring energy prices sapped people's purchasing power. GfK AG's index for August probably declined to 3.5 from 3.9 for July, the Nuremberg-based market-research company will say today, according to a Bloomberg News survey of economists.
``The European economy is facing a major setback,'' Tomoko Fujii, head of Japan economics and strategy at Bank of America in Tokyo, wrote in a research note today. ``The markets cannot price in an ECB rate hike any more. We are recommending euro- selling against the dollar.''
Europe's single currency may fall to $1.54 against the dollar by the end of September, she said.
To contact the reporters on this story: Kosuke Goto in Tokyo at kgoto2@bloomberg.net; Stanley White in Tokyo at swhite28@bloomberg.net
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Copper Gains for Second Day on Better-Than-Expected U.S. Data
By Glenys Sim
July 28 (Bloomberg) -- Copper rose for a second day in Asia on signs demand may be recovering in the U.S., the world's second-largest consumer of the metal used in plumbing and electrical wiring behind China.
Copper rose from a six-week low after reports on July 25 showed U.S. durable goods orders unexpectedly gained, new-home sales decreased at a third the rate forecast by economists and consumer sentiment climbed from a 28-year low. Prices, down 7 percent this month, gained even as stockpiles rose a third week.
``After falling for the past few sessions, investors are looking for any reason to move up again,'' Liu Shuguang, a trader at Zhongcai Futures Co. in Hangzhou, said today.
Three-month copper on the London Metal Exchange gained as much as 0.9 percent to $8,025 a metric ton at 10:40 a.m. Singapore time, extending the 0.7 percent rise on July 25.
Copper for October delivery rose as much as 630 yuan, or 1 percent, to 61,650 yuan ($9,030) a ton on the Shanghai Futures Exchange, and traded at 61,550 yuan at 10:40 a.m. local time.
``Copper is finely poised, and the near-term outlook for prices is extremely difficult to call,'' Macquarie Group Ltd. analysts led by Jim Lennon said in a report today. ``A plausible case can be made for a large price move in either direction in the second half of the year'' depending on whether Chinese demand resumes or demand deteriorates, the report said.
LME-monitored copper stockpiles stood at 133,475 tons July 25, up 8.9 percent this month. Inventories in Shanghai warehouses have risen 27 percent this month to 41,090 tons last week.
Among other LME-traded metals, aluminum rose 0.4 percent to $2,982 a ton, zinc added 0.8 percent to $1,859, and nickel gained 0.8 percent to $18,600. Lead and tin had not yet traded.
To contact the reporter for this story: Glenys Sim in Singapore at gsim4@bloomberg.net
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July 28 (Bloomberg) -- Copper rose for a second day in Asia on signs demand may be recovering in the U.S., the world's second-largest consumer of the metal used in plumbing and electrical wiring behind China.
Copper rose from a six-week low after reports on July 25 showed U.S. durable goods orders unexpectedly gained, new-home sales decreased at a third the rate forecast by economists and consumer sentiment climbed from a 28-year low. Prices, down 7 percent this month, gained even as stockpiles rose a third week.
``After falling for the past few sessions, investors are looking for any reason to move up again,'' Liu Shuguang, a trader at Zhongcai Futures Co. in Hangzhou, said today.
Three-month copper on the London Metal Exchange gained as much as 0.9 percent to $8,025 a metric ton at 10:40 a.m. Singapore time, extending the 0.7 percent rise on July 25.
Copper for October delivery rose as much as 630 yuan, or 1 percent, to 61,650 yuan ($9,030) a ton on the Shanghai Futures Exchange, and traded at 61,550 yuan at 10:40 a.m. local time.
``Copper is finely poised, and the near-term outlook for prices is extremely difficult to call,'' Macquarie Group Ltd. analysts led by Jim Lennon said in a report today. ``A plausible case can be made for a large price move in either direction in the second half of the year'' depending on whether Chinese demand resumes or demand deteriorates, the report said.
LME-monitored copper stockpiles stood at 133,475 tons July 25, up 8.9 percent this month. Inventories in Shanghai warehouses have risen 27 percent this month to 41,090 tons last week.
Among other LME-traded metals, aluminum rose 0.4 percent to $2,982 a ton, zinc added 0.8 percent to $1,859, and nickel gained 0.8 percent to $18,600. Lead and tin had not yet traded.
To contact the reporter for this story: Glenys Sim in Singapore at gsim4@bloomberg.net
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Wheat Rises for Third Day Amid Adverse Weather, Higher Demand
By Feiwen Rong
July 28 (Bloomberg) -- Wheat climbed for the third day in Asia after hedge-fund managers and speculators reversed prior bets that futures would fall amid expectations adverse weather in Europe may cut output and lift prices.
Futures rose the most in a month July 25 after Poland said its grain output will decline by 7 percent to 9 percent after drought in June and rain in July damaged wheat, rye and barley yields. Reports showing that advance orders for U.S. supplies since June 1 are 8 percent ahead of the year earlier period also fueled buying.
``Weather in Europe may delay harvest there and has become a supportive factor now in the wheat market,'' Kazuhiko Saito, chief analyst at Interes Capital Management Co., said today by phone from Tokyo.
Wheat for September delivery added as much as 21 cents, or 2.6 percent, to $8.32 a bushel in after-hours trading on the Chicago Board of Trade and traded at $8.2725 at 9:23 a.m. Singapore time. Wheat has gained 13 percent since reaching the lowest this year at $7.3075 on May 29.
Poland, the European Union's third-biggest grain producer, said wheat output will fall to 8.1 million to 8.3 million tons, according to the government statistical office. The office said its total grain output excluding corn is estimated at 23.1 million tons to 23.6 million tons.
Prices were also supported after exporters shipped 3.75 million metric tons of wheat since the beginning of the marketing year on June 1, up 30 percent from the same period a year earlier, USDA data show.
CFTC Report
Hedge-fund managers and other large speculators reversed from a net-short position to a net-long positions in Chicago wheat futures in the week ended July 22, according to the U.S. Commodity Futures Trading Commission data.
Speculative long positions, or bets prices will rise, outnumbered short positions by 3,000 contracts on the CBOT, the Washington-based commission said in a report. Last week, traders were net-short 5,345 contracts.
``Traders did position squaring ahead of the month-end because the wheat futures looked oversold,'' Saito said.
Traders also increased their net-long positions in wheat futures traded in Kansas City and Minneapolis in the week ended July 22.
Soybeans for November delivery gained as much as 34.5 cents, or 2.5 percent, to $14.21 a bushel and stood at $14.1425.
Corn for December delivery rose as much as 13.50 cents, or 2.3 percent, to $6.10 a bushel in after-hours trading on the Chicago Board of Trade and traded at $6.0525 as of 9:24 a.m. Singapore time.
To contact the reporter for this story: Feiwen Rong in Singapore at frong2@bloomberg.net
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July 28 (Bloomberg) -- Wheat climbed for the third day in Asia after hedge-fund managers and speculators reversed prior bets that futures would fall amid expectations adverse weather in Europe may cut output and lift prices.
Futures rose the most in a month July 25 after Poland said its grain output will decline by 7 percent to 9 percent after drought in June and rain in July damaged wheat, rye and barley yields. Reports showing that advance orders for U.S. supplies since June 1 are 8 percent ahead of the year earlier period also fueled buying.
``Weather in Europe may delay harvest there and has become a supportive factor now in the wheat market,'' Kazuhiko Saito, chief analyst at Interes Capital Management Co., said today by phone from Tokyo.
Wheat for September delivery added as much as 21 cents, or 2.6 percent, to $8.32 a bushel in after-hours trading on the Chicago Board of Trade and traded at $8.2725 at 9:23 a.m. Singapore time. Wheat has gained 13 percent since reaching the lowest this year at $7.3075 on May 29.
Poland, the European Union's third-biggest grain producer, said wheat output will fall to 8.1 million to 8.3 million tons, according to the government statistical office. The office said its total grain output excluding corn is estimated at 23.1 million tons to 23.6 million tons.
Prices were also supported after exporters shipped 3.75 million metric tons of wheat since the beginning of the marketing year on June 1, up 30 percent from the same period a year earlier, USDA data show.
CFTC Report
Hedge-fund managers and other large speculators reversed from a net-short position to a net-long positions in Chicago wheat futures in the week ended July 22, according to the U.S. Commodity Futures Trading Commission data.
Speculative long positions, or bets prices will rise, outnumbered short positions by 3,000 contracts on the CBOT, the Washington-based commission said in a report. Last week, traders were net-short 5,345 contracts.
``Traders did position squaring ahead of the month-end because the wheat futures looked oversold,'' Saito said.
Traders also increased their net-long positions in wheat futures traded in Kansas City and Minneapolis in the week ended July 22.
Soybeans for November delivery gained as much as 34.5 cents, or 2.5 percent, to $14.21 a bushel and stood at $14.1425.
Corn for December delivery rose as much as 13.50 cents, or 2.3 percent, to $6.10 a bushel in after-hours trading on the Chicago Board of Trade and traded at $6.0525 as of 9:24 a.m. Singapore time.
To contact the reporter for this story: Feiwen Rong in Singapore at frong2@bloomberg.net
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Platinum Futures Gain in Tokyo as Yen Drops to One-Month Low
By Dave McCombs
July 28 (Bloomberg) -- Platinum futures in Tokyo gained for the first time in four trading days as the Japanese currency fell to a one-month low against the dollar, boosting demand for yen- denominated contracts.
Metal for immediate delivery rose for a second day after snapping a nine-day losing streak on July 25. Platinum's advance, after declining to an almost-six month low last week, prompted speculation physical demand may prevent further falls.
Platinum is ``just about due for a bounce,'' Jonathan Barratt, managing director of Commodity Broking Services in Sydney, said today by phone. ``It is getting support at these levels, and if we get another day of gains, it's a buy signal.''
Platinum for June delivery jumped 140 yen, or 2.4 percent, to 6,040 yen a gram ($1,741 an ounce) on the Tokyo Commodity Exchange.
Immediate-delivery platinum gained $5 to $1,761 an ounce at 12:06 p.m. Tokyo time, 0.3 percent higher than July 25 in New York. The metal on July 25 dropped to $1,712.50, matching the lowest since Jan. 31.
The yen last traded at 107.86 yen versus the dollar in Tokyo, from 107.84 on July 25 in New York. It earlier weakened to 108.07, the lowest since June 26.
To contact the reporter for this story: Dave McCombs in Tokyo at dmccombs@bloomberg.net
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July 28 (Bloomberg) -- Platinum futures in Tokyo gained for the first time in four trading days as the Japanese currency fell to a one-month low against the dollar, boosting demand for yen- denominated contracts.
Metal for immediate delivery rose for a second day after snapping a nine-day losing streak on July 25. Platinum's advance, after declining to an almost-six month low last week, prompted speculation physical demand may prevent further falls.
Platinum is ``just about due for a bounce,'' Jonathan Barratt, managing director of Commodity Broking Services in Sydney, said today by phone. ``It is getting support at these levels, and if we get another day of gains, it's a buy signal.''
Platinum for June delivery jumped 140 yen, or 2.4 percent, to 6,040 yen a gram ($1,741 an ounce) on the Tokyo Commodity Exchange.
Immediate-delivery platinum gained $5 to $1,761 an ounce at 12:06 p.m. Tokyo time, 0.3 percent higher than July 25 in New York. The metal on July 25 dropped to $1,712.50, matching the lowest since Jan. 31.
The yen last traded at 107.86 yen versus the dollar in Tokyo, from 107.84 on July 25 in New York. It earlier weakened to 108.07, the lowest since June 26.
To contact the reporter for this story: Dave McCombs in Tokyo at dmccombs@bloomberg.net
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Oil Trades Near 7-Week Low as OPEC, China Boost Crude Output
By Nesa Subrahmaniyan
July 28 (Bloomberg) -- Crude oil traded near a seven-week low in New York after falling as the Organization of Petroleum Exporting Countries and China raise output.
China Petrochemical Corp., the nation's second-biggest oil producer, increased its crude-oil output by 2.4 percent in the first half from a year earlier, the company said today. OPEC's supply will increase by 200,000 barrels a day in July from a month ago, PetroLogistics Ltd. said July 25.
``The supply side is quite stable right now, and there are no surprises there,'' said Tetsu Emori, fund manager at Astmax Ltd. in Tokyo. ``Most of the developments in supply and demand have made speculators bearish from bullish.''
Crude oil for September delivery traded at $123.61 a barrel, up 35 cents, in electronic trading on the New York Mercantile Exchange at 1:26 p.m. Singapore time. On July 25 the contract fell $2.23, or 1.8 percent, to $123.26, the lowest settlement price since June 4. Prices dropped 4.4 percent last week, the third weekly decline.
Speculative short positions, or bets prices will fall, outnumbered long positions by 3,640 contracts on the New York Mercantile Exchange in the week ended July 22, the Washington- based Commodity Futures Trading Commission said in its latest Commitments of Traders report. In the previous week, traders were net-long 22,382 contracts.
Oil has tumbled about $24 a barrel from the record $147.27 a barrel reached on July 11. Concern that Iran's nuclear work may had helped to push prices to an all-time high amid concerns that Israel or the U.S. might resort to military action to halt the nation's atomic drive, should diplomacy fail.
`Weaker Prices'
The 13 members of OPEC Countries will provide 32.9 million barrels daily this month, compared with 32.7 million a day in June, PetroLogistics founder Conrad Gerber said in an e-mail July 25 from Geneva. OPEC supplies more than 40 percent of the world's oil.
China is boosting domestic crude oil output while it cut imports last month. China Petrochemical, known as Sinopec Group, increased production in the first half to 20.8 million metric tons from a year ago as demand rose in the world's fastest-growing major economy.
Crude oil imports by China, the world's second-biggest energy consumer, fell to 14.57 million metric tons in June from 16.2 million tons in May, according to the Customs General Administration of China in early July.
``The news events have lately all been for weaker prices,'' said Mark Pervan, a senior commodity strategist at Australia & New Zealand Banking Group Ltd. in Melbourne. ``There's certainly some heat coming out of the market. You wouldn't discount another event coming out of Nigeria or Iran this week, so I don't think the price is going to fall that far.''
Nigerian Attacks
Gunmen in Nigeria, Africa's biggest oil producer, have freed eight foreigners during a raid on a ship in the oil-rich Niger Delta, a military spokesman said yesterday. Seven other oil workers that were abducted in separate incidents on July 25 are still being held, he said.
Attacks by Nigerian militant groups have halted more than 20 percent of the West African country's production since 2006.
Saudi Arabia, in response to calls from consuming nations, said it would produce an extra 300,000 barrels a day in June and a further 200,000 barrels a day in July to curb prices.
Brent crude oil for September settlement was at $124.71 a barrel, up 19 cents, on London's ICE Futures Europe exchange, at 1:05 p.m. Singapore time.
Crude oil may fall this week as Saudi Arabia increases output and slowing economic growth curbs consumption, a Bloomberg News survey found. Thirteen of 28 analysts surveyed, or 46 percent, said prices will fall through Aug. 1. Five of the respondents, or 18 percent, said oil will rise and 10 forecast little change.
To contact the reporter on this story: Nesa Subrahmaniyan in Singapore at nesas@bloomberg.net.
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July 28 (Bloomberg) -- Crude oil traded near a seven-week low in New York after falling as the Organization of Petroleum Exporting Countries and China raise output.
China Petrochemical Corp., the nation's second-biggest oil producer, increased its crude-oil output by 2.4 percent in the first half from a year earlier, the company said today. OPEC's supply will increase by 200,000 barrels a day in July from a month ago, PetroLogistics Ltd. said July 25.
``The supply side is quite stable right now, and there are no surprises there,'' said Tetsu Emori, fund manager at Astmax Ltd. in Tokyo. ``Most of the developments in supply and demand have made speculators bearish from bullish.''
Crude oil for September delivery traded at $123.61 a barrel, up 35 cents, in electronic trading on the New York Mercantile Exchange at 1:26 p.m. Singapore time. On July 25 the contract fell $2.23, or 1.8 percent, to $123.26, the lowest settlement price since June 4. Prices dropped 4.4 percent last week, the third weekly decline.
Speculative short positions, or bets prices will fall, outnumbered long positions by 3,640 contracts on the New York Mercantile Exchange in the week ended July 22, the Washington- based Commodity Futures Trading Commission said in its latest Commitments of Traders report. In the previous week, traders were net-long 22,382 contracts.
Oil has tumbled about $24 a barrel from the record $147.27 a barrel reached on July 11. Concern that Iran's nuclear work may had helped to push prices to an all-time high amid concerns that Israel or the U.S. might resort to military action to halt the nation's atomic drive, should diplomacy fail.
`Weaker Prices'
The 13 members of OPEC Countries will provide 32.9 million barrels daily this month, compared with 32.7 million a day in June, PetroLogistics founder Conrad Gerber said in an e-mail July 25 from Geneva. OPEC supplies more than 40 percent of the world's oil.
China is boosting domestic crude oil output while it cut imports last month. China Petrochemical, known as Sinopec Group, increased production in the first half to 20.8 million metric tons from a year ago as demand rose in the world's fastest-growing major economy.
Crude oil imports by China, the world's second-biggest energy consumer, fell to 14.57 million metric tons in June from 16.2 million tons in May, according to the Customs General Administration of China in early July.
``The news events have lately all been for weaker prices,'' said Mark Pervan, a senior commodity strategist at Australia & New Zealand Banking Group Ltd. in Melbourne. ``There's certainly some heat coming out of the market. You wouldn't discount another event coming out of Nigeria or Iran this week, so I don't think the price is going to fall that far.''
Nigerian Attacks
Gunmen in Nigeria, Africa's biggest oil producer, have freed eight foreigners during a raid on a ship in the oil-rich Niger Delta, a military spokesman said yesterday. Seven other oil workers that were abducted in separate incidents on July 25 are still being held, he said.
Attacks by Nigerian militant groups have halted more than 20 percent of the West African country's production since 2006.
Saudi Arabia, in response to calls from consuming nations, said it would produce an extra 300,000 barrels a day in June and a further 200,000 barrels a day in July to curb prices.
Brent crude oil for September settlement was at $124.71 a barrel, up 19 cents, on London's ICE Futures Europe exchange, at 1:05 p.m. Singapore time.
Crude oil may fall this week as Saudi Arabia increases output and slowing economic growth curbs consumption, a Bloomberg News survey found. Thirteen of 28 analysts surveyed, or 46 percent, said prices will fall through Aug. 1. Five of the respondents, or 18 percent, said oil will rise and 10 forecast little change.
To contact the reporter on this story: Nesa Subrahmaniyan in Singapore at nesas@bloomberg.net.
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Gold Price Trades Little Changed After Second Weekly Decline
By Feiwen Rong
July 28 (Bloomberg) -- Gold traded little changed in Asia after its second weekly decline as investors tried to gauge the direction of crude oil, which traded near a seven-week low.
Gold has dropped 6 percent since reaching a four-month high July 15 as crude oil has tumbled 16 percent from a record, damping demand for the metal as a hedge against inflation.
``Some people might have switched to short positions in the gold market on expectations that gold might pull back more if oil were to break the $120 support level,'' Peter Tse, chief precious metals trader at Scotia Mocatta, the bullion arm of the Bank of Nova Scotia, said today by phone from Hong Kong.
Bullion for immediate delivery was little changed at $930.76 an ounce at 12:06 p.m. in Singapore. It traded as low as $916.51 an ounce last week, 11 percent below its record $1,032.70 an ounce March 17. Silver was little changed at $17.4250 an ounce.
Oil traded at $123.35 a barrel, near a seven-week settlement price low of $123.26 on July 25, on signs the Organization of Petroleum Exporting Countries and China raised output amid falling demand in U.S. and Asia.
A recovery in equities since July 15, especially some of the ``financials'' including banks and brokerages, also weighed on gold and other precious metals, said John Reade at UBS Ltd. in a report on July 25.
Longs Decline
Hedge-fund managers and other large speculators decreased their net-long positions in New York gold futures in the week ended July 22, according to U.S. Commodity Futures Trading Commission data.
Net-long positions fell by 8,130 contracts, or 4 percent, from a week earlier while the open interest jumped 40.9 percent to 475,606 contracts. Still, speculative long positions, or bets prices will rise, outnumbered short positions by 194,653 contracts on the Comex division of the New York Mercantile Exchange, the Washington-based commission said.
``I think many of the long positions got liquidated during gold's recent move to $920 from above $970 an ounce,'' Tse said. ``It looks like some people are taking short positions, now is looking at gold perhaps testing $910 area.''
December-delivery gold was up 0.3 percent at $940 an ounce in after-hours electronic trading on Comex at 12:19 p.m. in Singapore, while gold for December delivery traded in Shanghai fell to 204.40 yuan a gram ($930 an ounce).
Gold for June 2009 delivery advanced 0.7 percent to 3,252 yen a gram ($938 an ounce) on the Tokyo Commodity Exchange.
To contact the reporter for this story: Feiwen Rong in Singapore at frong2@bloomberg.net
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July 28 (Bloomberg) -- Gold traded little changed in Asia after its second weekly decline as investors tried to gauge the direction of crude oil, which traded near a seven-week low.
Gold has dropped 6 percent since reaching a four-month high July 15 as crude oil has tumbled 16 percent from a record, damping demand for the metal as a hedge against inflation.
``Some people might have switched to short positions in the gold market on expectations that gold might pull back more if oil were to break the $120 support level,'' Peter Tse, chief precious metals trader at Scotia Mocatta, the bullion arm of the Bank of Nova Scotia, said today by phone from Hong Kong.
Bullion for immediate delivery was little changed at $930.76 an ounce at 12:06 p.m. in Singapore. It traded as low as $916.51 an ounce last week, 11 percent below its record $1,032.70 an ounce March 17. Silver was little changed at $17.4250 an ounce.
Oil traded at $123.35 a barrel, near a seven-week settlement price low of $123.26 on July 25, on signs the Organization of Petroleum Exporting Countries and China raised output amid falling demand in U.S. and Asia.
A recovery in equities since July 15, especially some of the ``financials'' including banks and brokerages, also weighed on gold and other precious metals, said John Reade at UBS Ltd. in a report on July 25.
Longs Decline
Hedge-fund managers and other large speculators decreased their net-long positions in New York gold futures in the week ended July 22, according to U.S. Commodity Futures Trading Commission data.
Net-long positions fell by 8,130 contracts, or 4 percent, from a week earlier while the open interest jumped 40.9 percent to 475,606 contracts. Still, speculative long positions, or bets prices will rise, outnumbered short positions by 194,653 contracts on the Comex division of the New York Mercantile Exchange, the Washington-based commission said.
``I think many of the long positions got liquidated during gold's recent move to $920 from above $970 an ounce,'' Tse said. ``It looks like some people are taking short positions, now is looking at gold perhaps testing $910 area.''
December-delivery gold was up 0.3 percent at $940 an ounce in after-hours electronic trading on Comex at 12:19 p.m. in Singapore, while gold for December delivery traded in Shanghai fell to 204.40 yuan a gram ($930 an ounce).
Gold for June 2009 delivery advanced 0.7 percent to 3,252 yen a gram ($938 an ounce) on the Tokyo Commodity Exchange.
To contact the reporter for this story: Feiwen Rong in Singapore at frong2@bloomberg.net
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West Australian Grain Regions May Get More Rainfall This Week
By Madelene Pearson
July 28 (Bloomberg) -- Grain regions in Western Australia state, the nation's biggest wheat grower, may receive more rain this week adding to falls last week.
There may be 0.75 of an inch (19 millimeters) to 1 inch of rain in western parts of the state's wheat belt this week, and 0.5 to 0.75 of an inch in eastern parts, said Brett Dutschke, meteorologist at the weatherzone.com.au in Sydney.
``It looks like the wettest part of the country will be Western Australia in the next week,'' he said by phone. ``It looks like the fronts that are coming through there are fairly strong and weakening as they get to South Australia and the rest of the south east of the country.''
Wheat output in Australia, forecast to be the world's third- largest shipper of the grain, may rebound to 23.7 million metric tons this harvest, up from last year's drought-reduced crop of 13 million tons, the government forecaster has said. The nation's wheat crops are in better condition than a year earlier because of winter rains, exporter AWB Ltd. said on July 18.
Grain growing regions in South Australia may get as much as 0.5 of an inch of rain, with heavier falls in southern parts, Dutschke said. Victoria state may receive 0.5 inch to 1 inch in western and north-eastern parts. Southern New South Wales may get as much as an inch with falls of 0.25 of an inch forecast for central and northern parts of the state and Queensland, he said.
Most of the nation's grain growing regions had rain last week, with falls heaviest in Queensland state and parts of Victoria, he said. Queensland got 1-to-2 inches last week, with similar falls in north eastern and central Vitoria, he said.
To contact the reporter on this story: Madelene Pearson in Melbourne on mpearson1@bloomberg.net
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July 28 (Bloomberg) -- Grain regions in Western Australia state, the nation's biggest wheat grower, may receive more rain this week adding to falls last week.
There may be 0.75 of an inch (19 millimeters) to 1 inch of rain in western parts of the state's wheat belt this week, and 0.5 to 0.75 of an inch in eastern parts, said Brett Dutschke, meteorologist at the weatherzone.com.au in Sydney.
``It looks like the wettest part of the country will be Western Australia in the next week,'' he said by phone. ``It looks like the fronts that are coming through there are fairly strong and weakening as they get to South Australia and the rest of the south east of the country.''
Wheat output in Australia, forecast to be the world's third- largest shipper of the grain, may rebound to 23.7 million metric tons this harvest, up from last year's drought-reduced crop of 13 million tons, the government forecaster has said. The nation's wheat crops are in better condition than a year earlier because of winter rains, exporter AWB Ltd. said on July 18.
Grain growing regions in South Australia may get as much as 0.5 of an inch of rain, with heavier falls in southern parts, Dutschke said. Victoria state may receive 0.5 inch to 1 inch in western and north-eastern parts. Southern New South Wales may get as much as an inch with falls of 0.25 of an inch forecast for central and northern parts of the state and Queensland, he said.
Most of the nation's grain growing regions had rain last week, with falls heaviest in Queensland state and parts of Victoria, he said. Queensland got 1-to-2 inches last week, with similar falls in north eastern and central Vitoria, he said.
To contact the reporter on this story: Madelene Pearson in Melbourne on mpearson1@bloomberg.net
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Chocolates, CSN, Gerdau, Modelo, Usiminas: Latin Equity Preview
By Paulo Winterstein and William Freebairn
July 28 (Bloomberg) -- The following stocks may have significant gains or losses in Latin American markets. Symbols are in parentheses after company names, and stock prices are from the last session.
The MSCI index of Latin American shares was little changed at 4,167.59 on July 25. Markets in Peru are closed today for a holiday. In Brazil, preferred shares are the most commonly traded class of stock.
Brazil
Gerdau SA (GGBR4 BS), Usinas Siderurgicas de Minas Gerais SA (USIM5 BS) and Cia. Siderurgica Nacional SA (CSNA3 BS): The drop in stock prices of Brazil's three largest steelmakers during July ``exceeded expectations,'' Deutsche Bank AG analyst David Martin said July 25 in a phone interview from New York. ``It's hard to believe, given the global demand scenario, that steel stocks will go lower.'' Gerdau, Latin America's biggest steelmaker, fell 2.3 percent to 30.15 reais. Usiminas, as the second-biggest Brazilian steelmaker is known, fell 3.8 percent to 62.55 reais and CSN, the third-biggest, fell 1.5 percent.
Vivo Participacoes SA (VIVO4 BS): Brazil's biggest mobile-phone company will likely report narrowing margins on earnings before interest, taxes, depreciation and amortization when it announces second-quarter results July 30, Brascan Corretora analyst Felipe Cunha wrote in a note to clients. A reduction in margins to an estimated 22.4 percent from 29 percent in the first quarter will likely lead to a drop in the shares, Cunha wrote in the note dated July 25. Vivo gained 2 percent to 8.32 reais.
Colombia
Grupo Nacional de Chocolates SA (CHOCOLA CB): Colombia's biggest food company said first-half profit more than doubled. Net income for the first six months rose to 123 billion pesos ($68.6 million) from 49.6 billion a year earlier, the Medellin-based company wrote in a statement posted on the regulator's Web site July 25. It didn't provide separate second-quarter results. Chocolates fell 0.4 percent to 14,920 pesos.
Mexico
Grupo Modelo SAB (GMODELOC MM): Mexico's largest brewer said second-quarter net income fell 18 percent to 2.58 billion pesos ($249.8 million). Sales rose less than 1 percent to 20.4 billion pesos, the company said in a statement e-mailed July 25. Modelo fell 0.1 percent to 51 pesos.
To contact the reporters on this story: Paulo Winterstein in Sao Paulo at pwinterstein@bloomberg.net; William Freebairn in Mexico City at wfreebairn@bloomberg.net.
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July 28 (Bloomberg) -- The following stocks may have significant gains or losses in Latin American markets. Symbols are in parentheses after company names, and stock prices are from the last session.
The MSCI index of Latin American shares was little changed at 4,167.59 on July 25. Markets in Peru are closed today for a holiday. In Brazil, preferred shares are the most commonly traded class of stock.
Brazil
Gerdau SA (GGBR4 BS), Usinas Siderurgicas de Minas Gerais SA (USIM5 BS) and Cia. Siderurgica Nacional SA (CSNA3 BS): The drop in stock prices of Brazil's three largest steelmakers during July ``exceeded expectations,'' Deutsche Bank AG analyst David Martin said July 25 in a phone interview from New York. ``It's hard to believe, given the global demand scenario, that steel stocks will go lower.'' Gerdau, Latin America's biggest steelmaker, fell 2.3 percent to 30.15 reais. Usiminas, as the second-biggest Brazilian steelmaker is known, fell 3.8 percent to 62.55 reais and CSN, the third-biggest, fell 1.5 percent.
Vivo Participacoes SA (VIVO4 BS): Brazil's biggest mobile-phone company will likely report narrowing margins on earnings before interest, taxes, depreciation and amortization when it announces second-quarter results July 30, Brascan Corretora analyst Felipe Cunha wrote in a note to clients. A reduction in margins to an estimated 22.4 percent from 29 percent in the first quarter will likely lead to a drop in the shares, Cunha wrote in the note dated July 25. Vivo gained 2 percent to 8.32 reais.
Colombia
Grupo Nacional de Chocolates SA (CHOCOLA CB): Colombia's biggest food company said first-half profit more than doubled. Net income for the first six months rose to 123 billion pesos ($68.6 million) from 49.6 billion a year earlier, the Medellin-based company wrote in a statement posted on the regulator's Web site July 25. It didn't provide separate second-quarter results. Chocolates fell 0.4 percent to 14,920 pesos.
Mexico
Grupo Modelo SAB (GMODELOC MM): Mexico's largest brewer said second-quarter net income fell 18 percent to 2.58 billion pesos ($249.8 million). Sales rose less than 1 percent to 20.4 billion pesos, the company said in a statement e-mailed July 25. Modelo fell 0.1 percent to 51 pesos.
To contact the reporters on this story: Paulo Winterstein in Sao Paulo at pwinterstein@bloomberg.net; William Freebairn in Mexico City at wfreebairn@bloomberg.net.
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AltaGas Income, Harry Winston, Potash: Canada Equity Preview
By Katherine Greene
July 28 (Bloomberg) -- The following companies may have unusual price changes in Canadian trading tomorrow. Stock symbols are in parentheses, and share prices are as of 4:50 p.m. in Toronto.
The Standard & Poor's/TSX Composite Index rose for the first time in four days, climbing 1.3 percent to 13,378.81.
AltaGas Income Trust (ALA-U CN): The owner of pipelines for natural gas and liquids reported a fire at its Harmattan Complex, 100 kilometers north of Calgary. No one was injured and there was no environmental damage, the company said.
Harry Winston Diamond Corp. (HW CN): The diamond miner and jewelry retailer said diamond ore mining accelerated in the second quarter. The shares were unchanged.
To contact the reporter on this story: Katherine Greene in New York at kgreene8@bloomberg.net.
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July 28 (Bloomberg) -- The following companies may have unusual price changes in Canadian trading tomorrow. Stock symbols are in parentheses, and share prices are as of 4:50 p.m. in Toronto.
The Standard & Poor's/TSX Composite Index rose for the first time in four days, climbing 1.3 percent to 13,378.81.
AltaGas Income Trust (ALA-U CN): The owner of pipelines for natural gas and liquids reported a fire at its Harmattan Complex, 100 kilometers north of Calgary. No one was injured and there was no environmental damage, the company said.
Harry Winston Diamond Corp. (HW CN): The diamond miner and jewelry retailer said diamond ore mining accelerated in the second quarter. The shares were unchanged.
To contact the reporter on this story: Katherine Greene in New York at kgreene8@bloomberg.net.
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FX & Money Markets Daily: A Slow Start To A Busy Week
| Daily Forex Fundamentals | Written by Jyske Bank | Jul 28 08 06:23 GMT | | |
Today's CommentMajors & Scandies Markets were off to a bad start on Friday however sentiment improved in the afternoon as macro economic data showed that the number of new home sold and the number of incoming orders on durable goods were higher than expected in June. Thus the USD found a bit of support and ended the day a bit off Friday's lows versus EUR. It looks like it is going to be a very quiet start to the week as the macro economic calendar is empty. Later this week however there is plenty of opportunity for volatility on the USD as macro economic data (including consumer confidence, ISM indices and the all important Non-farm payrolls report) is pouring in from the US. Technically speaking EURUSD seems well supported around the 100-day moving average (currently at 156.57) and with momentum indicators starting to point towards the upside we expect the currency cross to remain supported in the short term. However as the prospects of elevated volatility lurks ahead we maintain a neutral stance on the currency cross for now. USDCAD has risen in the past week on the back of a stronger USD and falling oil prices. From a technical point of view momentum on the upward move on the currency cross is staring to wear off. As we expect USDCAD to find resistance around 102.50-103 corresponding to previous highs we have chosen to maintain a neutral stance at this point and have chosen to adjust our interval on the currency cross slightly. However a break above this level will pave the way for a further rise on USDCAD towards 105.00 Emerging Markets Friday was once again a positive day on EM and most currencies ended the day up against EUR. The underperformer was once again ISK down 1.1 %. July inflation came out higher than expected and this should have provided support for the currency through expectations of further hikes in the key rate. But this was not the case and it clearly illustrates that focus in Iceland is not on CPI numbers and the key rate at the moment, but rather on 2Q earnings announcements from the financial sector coming out this week. This focus is also illustrated by CDS spreads on the Iceland banks increasing. Disappointing earnings numbers will leave ISK very vulnerable. The target on our short ISK recommendation was reached and we choose to remain on the sideline for now. In Colombia the key rate was hiked with 25 bps to 10 %. We had expected rates to be left on hold, but acknowledged that it was going to be a close call. The decisive factor was the strong increase in both actual and expected inflation. We expect rates to be left on hold in the months to come. There are no important events on EM today. Today's key events
Jyske Core Positions - Recommendations
Jyske Markets - FX Research The analysis is based on information which Jyske Bank finds reliable, but Jyske Bank does not assume any responsibility for the correctness of the material nor for transactions made on the basis of the information or the estimates of the analysis. The estimates and recommendation of the analysis may be changed without notice. The analysis is for personal use of Jyske Bank's customers and may not be copied. | |
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Asia Session Recap
| Daily Forex Fundamentals | Written by Forex.com | Jul 28 08 05:36 GMT | | ||||||||
| The Trade week started off in Asia in a subdued fashion as the US Dollar quietly crept above 108.00 to register a one month high versus the Yen. With the view that perhaps the gloom and doom in the US economy has subsided a bit, the USD/JPY pair opened near 107.80 and eventually poked its head above 108.00 to reach a high near 108.06. The move didn't last too long and was reversed immediately as the pair sunk to levels below the open by the sessions end. 107.75 looked like the low as of this writing. It is well noted that Japanese exporters are heavy on the offer above the 108.00 figure. EUR/JPY was up for the session after an 169.35ish open, a 169.70 high, and a curtain call of 169.45 as of this writing. With stocks looking to be in favor, many have jumped back on the carry trade band-wagon, selling the Yen and buying higher yielding currencies, thus the pair hovering near the record 170.00 level. The Nikkei followed the US equity lead last week as it came back to life after being trampled underfoot for weeks on end. EUR/USD looked for direction and eventually found it as the pair traded as low as 1.5685 and motored through 1.5725 as the session wound down. Tonight represented a subtle start for the Euro after last weeks high of 1.5945 and low of 1.5628, but with second quarter GDP on Thursday, and US Non Farm Payrolls on Friday, this week could see some very big moves. Upcoming Economic Data Releases (London Session):
Forex.com DISCLAIMER: The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase of sale of any currency. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions. | ||||||||
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Asian Market Update
| Daily Forex Fundamentals | Written by Trade The News | Jul 28 08 04:19 GMT | | |
| AUD shocked by more writedowns; Focus shifts to European data Forex: This week's U.S. data is as big as it gets, with GDP, non-farm payrolls, and manufacturing ISM slated for release. But some analysts argue that the most important data will be coming from Europe (weak U.S. data has already been priced in, they argue). EUR/USD started the week in a tight trading range, with sellers around 1.5702 and buyers ahead of 1.5670. The main near-term downside target for EUR/USD is seen at 1.5585 (61.8 fibo of 1.5305/1.6038 move). EUR/JPY failed to make any progress above 169.70, but traders expect the pair to test 170.00 over the coming sessions (a break above 170.00 will likely trigger massive stops, many from Japanese importer options). USD/JPY moved above 108, a one month high, but selling by Japanese exporters capped the upside. Another Aussie bank hit by credit troubles: Shares of ANZ Bank, Australia's third biggest lender, slumped about -13% after announcing plans to write down A$1.2B during 2H08. The bank guided 2008 cash EPS lower by -20% to -25% on a y/y basis, citing deterioration in global credit markets. The AUD/USD looks increasingly vulnerable after the ANZ announcement, news that comes only three days after bigger rival National Australia Bank shocked the market with an A$830M writedown. The AUD/USD dipped below 0.9540 support after ANZ's announcement, with the next support seen around 0.9525 (61.8 fibo of the 0.9327/0.9851 move). Traders point out that AUD/USD is now within striking distance of 0.9500, a pivot point since early this year. Daiwa Asset Management, which holds 4.0% of Australia's bonds, recently said that the AUD rally has ended. Daiwa isn't buying the AUD because cash flowing into Australia funds 'has stopped in recent days'. New Zealand's annual trade deficit narrows for the first time in four months in June: (NZ JUNE TRADE BALANCE: -223M V -350M expected, prior revised to -168M from -195.8M; Imports: 3.81B v 3.70B expected, prior revised to 3.91B from 3.92B; Exports: 3.59B v 3.35B expected, prior revised to 3.74B from 3.73B) New Zealand's slumping economy curbed demand for imports, while exports rose more than forecast. Analysts said the data provided reassurance of an improving trend in the trade deficit. Australia's business confidence deteriorates further: (AU National Australia Bank Business Confidence Expectations Index fall -4pts to a reading of -8pts for the September quarter) 'A triple whammy of reduced activity, lower customer confidence, rising costs - borrowing, oil and other key purchase costs - and volatile and lower equity markets continue to weigh on the business outlook,' NAB Head of Australian Economics Jeff Oughton said. The survey showed almost 30% of Australian businesses expect a minor deterioration in their industry conditions in the September quarter, in contrast to about 20% of firms that expect a minor improvement. Reserve Bank of Australia Assistant Governor Guy Debelle said he sees signs of improvement in the securitization market despite recent turmoil. 'Although the securitization market continues to be dislocated, there have recently been some signs of improvement, with a number of public issues taking place in recent weeks,' Debelle said. 'Some of these issues have been oversubscribed due to strong investor demand. A few securitizations of auto loans have also taken place.' Equities: At 23:58 EDT Japan's Nikkei is +0.09%, the S&P/ASX200 is -1.43%, South Korea's KOSPI is -0.13%, Hong Kong Hang Seng index is +0.32%, and the Shanghai composite index is +1.48%. The S&P500 futures contract lost -0.10% since Friday's close, last trading at 1,252.60. The Nikkei tracked Wall Street's positive lead, with trading houses and certain financials trading higher. Honda Motors traded sharply lower after the company lowered its FY operating profit forecast. The S&P/ASX200 traded sharply lower, with financials leading the downside. Until recently many expected the Australian banking sector to remain relatively insulated from the credit crunch, but recent news from National Australia Bank and ANZ Bank has shattered that view. Technology stocks dragged on the KOSPI index, while financials boosted sentiment in Shanghai. The Peoples Bank of China did not explicitly mention monetary tightening during its Q2 policy meeting, emboldening some bargain hunters. Commodities: Nymex crude oil prices gained +0.12% between 18:00 EDT and 23:56 EDT, last trading at $123.41/bbl. OPEC's president said he expects oil prices to trend towards $70-$80/bbl over the coming months, citing expected USD improvement and resolution of the Iranian conflict. Spot gold gained +0.42%, last trading at $940.80/oz. Trade The News Staff Legal disclaimer and risk disclosure All information provided by Trade The News (a product of Trade The News, Inc. "referred to as TTN hereafter") is for informational purposes only. Information provided is not meant as investment advice nor is it a recommendation to Buy or Sell securities. Although information is taken from sources deemed reliable, no guarantees or assurances can be made to the accuracy of any information provided. 1. Information can be inaccurate and/or incomplete 2. Information can be mistakenly re-released or be delayed, 3. Information may be incorrect, misread, misinterpreted or misunderstood 4. Human error is a business risk you are willing to assume 5. Technology can crash or be interrupted without notice 6. Trading decisions are the responsibility of traders, not those providing additional information. Trade The News is not liable (financial and/or non-financial) for any losses that may arise from any information provided by TTN. Trading securities involves a high degree of risk, and financial losses can and do occur on a regular basis and are part of the risk of trading and investing. | |
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Euro Open: Will German CPI Give Trichet Room For Rate Cuts?
| Daily Forex Fundamentals | Written by DailyFX | Jul 28 08 05:49 GMT | | |
| New Zealand's Trade Deficit surprised to the upside as weakening domestic demand reduced import volumes. Australian New Homes Sales surged higher as the mining boom produced record immigration levels. Preliminary estimates of Germany's Consumer Prices will dominate attention in European trading hours. A downside surprise would put pressure on the ECB to abandon their hawkish stance as the 15-nation bloc inches closer to recession. Key Overnight Developments
Critical Levels
The Euro inched higher overnight to test above 1.57 late into the session. DailyFX Technical Strategist Jaime Saettele reported that the magnitude of recent declines is beginning to threaten the long-term bullish bias. That said, the pair is still expected to continue on to a sustained break above the 1.60 mark to target 1.6325 as long as price remains above 1.5611. Near-term resistance is seen at 1.5736. Sterling remained range-bound, oscillating around the 1.99 level. The overall bias is now seen as bearish. Resistance stands at 2.0075, while support is established in the 1.9550-1.9600 area. Asia Session Highlights
New Zealand's Trade Deficit surprised to the upside, widening to print at -223 million versus -350 million expected. Weakening domestic demand reduced import volumes. The economy waist-deep into a major economic downturn: national income contracted in the first quarter and is expected to do so again in the second, while consumer confidence stands at record lows. The release offered little by way of new insights into the NZDUSD macro outlook and the pair predictably ignored the release. Australia's calendar produced a notable surprise as HIA New Homes Sales surged higher, printing at 4.0% in June following a decline of -0.5% in May. Record immigration levels proved to be a wild card, pushing sales upward even as a slowing economy and record-high borrowing costs make housing less affordable. New migrants have flocked to Australia to take part in the mining boom stoked by China's demand for coal and iron ore. NAB Business Confidence fell in line with the broad theme of economic slowdown in the larger antipodean nation, printing at -8 in the second quarter versus -4 in the preceding period. Euro Session: What to Expect
Preliminary estimates of Germany's Consumer Prices will dominate attention in European trading hours. Expectations call for the metric to remain flat at 3.4% in the year to July. Traders will be most responsive to a downside surprise, as this would put pressure on the ECB to abandon their hawkish stance as the 15-nation bloc inches closer to recession. Predictably, Nationwide House Prices are expected to decline further as the UK continues to experience a profound housing slump. Forecasts call for annualized price growth to contract -7.2% in the year to July versus -6.3% in the preceding month. The session closes with the August edition of Germany's GfK Consumer Confidence Survey. The metric will offer a timely look at current sentiment, with expectations favoring continued slowdown in private demand for a reading at 3.5 versus 3.9 in July. On balance, this release is unlikely to have much market-moving potential: economic slowdown in the Euro-Zone's largest economy is largely a given at this point. Disclaimer Investment in the currency exchange is highly speculative and should only be done with risk capital. Prices rise and fall and past performance is no assurance of future performance. This website is an information site only. Accordingly we make no warranties or guarantees in respect of the content. The publications herein do not take into account the investment objectives, financial situation or particular needs of any particular person. Investors should obtain individual financial advice based on their own particular circumstances before making an investment decision on the basis of the recommendations in this website. While we try to ensure that all of the information provided on this website is kept up-to-date and accurate we accept no responsibility for any use made of the information provided. All intellectual property rights are the property of Daily FX. Daily FX and its affiliates, will not be held responsible for the reliability or accuracy of the information available on this site. The content herein is provided in good faith and believed to be accurate, however, there are no explicit or implicit warranties of accuracy or timeliness made by Daily FX or its affiliates. The reader agrees not to hold Daily FX or any of its affiliates liable for decisions that are based on information from this website. Daily FX highly recommends that before making a decision, the reader collects several opinions related to the decision and verifies facts from at least several independent sources. | |
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FX Technical Analysis
| Daily Forex Technicals | Written by Mizuho Corporate Bank | Jul 28 08 06:19 GMT | | |||||||||||||||||||||||||||||||||||||||||||||||||
EURUSD
Comment: Basing against the top of the Ichimoku 'cloud' after an A, B, C-type pullback where C is a little bigger than A. Expect random moves roughly between 1.5650 and 1.5750 with a sustained break above 1.5755 setting off a short squeeze to 1.5800. Strategy: Buy at 1.5700; stop below 1.5625. Add to longs on a sustained break above 1.5755 to cover longs between 1.5950 and 1.6020. Direction of Trade: ↗ Chart Levels:
GBPUSD
Comment: Still trying to base against 1.9800. Expect more random moves between here and 2.0000 today. Strategy: Attempt small longs at 1.9870; stop below 1.9800. Short term target 2.0000, then 2.1000. Direction of Trade: →↗ Chart Levels:
USDJPY
Comment: Bouncing strongly from the top of the Ichimoku 'cloud' and likely to hold above here all week. For today expect several random moves roughly between 107.25 and 108.25. Strategy: Attempt small shorts at 107.80; stop above 108.65. Short term target 107.25. Direction of Trade: → Chart Levels:
EUR/JPY
Comment: Looking like a potential 'broadening top' both on the daily and on the weekly charts. Watch for something similar this week. Strategy: Sell at 169.35; stop above 170.00. Short term target 168.20 then 167.20. Direction of Trade: ↘ Chart Levels:
Disclaimer The information contained in this paper is based on or derived from information generally available to the public from sources believed to be reliable. No representation or warranty is made or implied that it is accurate or complete. Any opinions expressed in this paper are subject to change without notice. This paper has been prepared solely for information purposes and if so decided, for private circulation and does not constitute any solicitation to buy or sell any instrument, or to engage in any trading strategy. | |||||||||||||||||||||||||||||||||||||||||||||||||
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Technical Analysis Daily: EUR/USD
| Daily Forex Technicals | Written by iFOREX.bg | Jul 28 08 05:39 GMT | | |
EUR/USD 1.5711EUR/USD Open 1.5704 High 1.5751 Low 1.5664 Close 1.5694 The Euro continued recovering on Friday against the US Dollar from Friday's bottom 1.5664 to the top 1.5751, which are the first support and resistance levels respectively for the currency couple today. If the positive trend continues, next resistance is expected at 1.5800, followed by 1.5865. In downward direction next support for today is expected at 1.5580, the break of which would lead to next target 1.5530. Technical resistance levels: 1.5750 1.5800 1.5865 Trading range: 1.5700 - 1.5765 Trend: Upward Buy at 1.5711 SL 1.5681 TP 1.5751 | |
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Daily Technical Analysis
| Daily Forex Technicals | Written by FX Instructor | Jul 28 08 03:38 GMT | | |
EURUSD OutlookThe Euro had a minor recovery against Greenback on Friday. The pair topped at 1.5752 and closed at 1.5709. Is this the sign of the end of correctional downside wave, and ready to bring the pair back to it's bullish trend? In my opinion, the pair need to stay consistently above 1.5750 area (38.2% Fibonacci retracement from 1.5302 to 1.6038). A failure to do so could trigger another downside movement. CCI just cross the 100 line up on daily chart, suggesting a potential bullish view. EURUSD Daily Supports and Resistances: S1= 1.5662 GBPUSD OutlookThe Sterling recovered against Greenback on Friday. The pair topped at 1.9977 and closed at 1.9915. If we look at daily chart, the pair always made lower highs in last 4 days. My model remains mixed with downside bias. The key level in this phase is 1.9816. A break lower could trigger further bearish view. Immediate support is seen at 1.9860. Initial resistance at 1.9977 (Friday's high). CCI in neutral area on daily chart. GBPUSD Daily Supports and Resistances: S1= 1.9837 USDJPY OutlookFriday, the USDJPY attempted to go lower in Asian market, bottomed at 106.56, but the pair whipsawed to the upside very quickly, topped at 107.94 and closed at 107.83. My model is mixed with no trading zone. Immediate support is seen at 107.50 followed by 107.15. Initial resistance at 108.20. CCI in overbought area on daily chart. USDJPY Daily Supports and Resistances: S1= 106.94 USDCHF OutlookYesterday, the USDCHF made indecisive movement by open and closed at almost the same price (1.0362 and 1.0360). My model remains short, still targeting 1.0250. Immediate resistance is seen at 1.0402. CCI in overbought area on daily chart. USDCHF Daily Supports and Resistances: S1= 1.0314 FX Instructor LLC The information has been prepared for information purposes only. The document is not intended as personalized investment advice and does not constitute a recommendation to buy, sell or hold investments described herein. This information contained herein is derived from sources we believe to be reliable, but of which we have not independently verified. FXInstructor LLC assumes no responsibilities for errors, inaccuracies or omissions in these materials, nor shall it be liable for damages arising out of any person's reliance upon this information. FXInstructor LLC does not warrant the accuracy or completeness of the information, text, graphics, links or other items contained within these materials. FXInstructor LLC shall not be liable for any indirect, incidental, or consequential damages including without limitation losses, lost revenues or lost profits that may result from these materials. Opinions and estimates constitute our judgment and are subject to change without notice. Past performance is not indicative of future results | |
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BBVA, Clarins, Geox, Fortis, Ryanair: European Equity Preview
By Nadja Brandt
July 28 (Bloomberg) -- The following companies may have unusual price changes in European trading. Stock symbols are in parentheses, and share prices are from the July 25 close.
The Dow Jones Stoxx 600 fell 0.2 percent to 281.76. The Dow Jones Stoxx 50 Index declined 0.1 percent to 2,857.21. The Euro Stoxx 50 Index, a benchmark for the nations using the euro, dropped 0.1 percent to 3,351.13.
Acambis Plc (ACM LN): Sanofi-Aventis SA, France's largest drugmaker, agreed to buy U.K. partner Acambis for 276 million pounds ($549 million) in cash to gain a smallpox vaccine ordered by the U.S. government for use during a terrorist attack. Acambis advanced 1 pence, or 0.9 percent, to 116 pence.
Adidas AG (ADS GY): Adidas will overtake U.S. rival Nike Inc. in China by the end of 2008, WirtschaftsWoche said, citing an interview with the German company's Chief Executive Officer Herbert Hainer. Adidas fell 15 cents or 0.4 percent to 39 euros.
Areva SA (CEI FP): The world's biggest builder of nuclear plants, General Electric Co. and Westinghouse Electric Co. are in talks with India's Larsen & Toubro Ltd. to set up companies to make nuclear-power equipment, the Economic Times reported. Areva dropped 42 cents, or less than 0.1 percent, to 739 euros.
Austriamicrosystems AG (AMS SW): The Austrian chipmaker listed in Switzerland is scheduled to report second-quarter results. The company in April said first-quarter profit fell 8.6 percent as the euro strengthened against the U.S. dollar. The shares climbed 0.3 percent to 36.10 Swiss francs.
BAE Systems Plc (BA/ LN): BAE may announce today its acquisition of Detica Group Plc (DCA LN), the Financial Times reported, and BAE may have offered more than 400 pence a share for the software maker, valuing it at about 500 million pounds ($1 billion). BAE shares fell 1.75 pence, or 0.4 percent, to 445.25 pence. Detica fell 7.75 pence, or 2 percent, to 372.25 pence.
Banco Bilbao Vizcaya Argentaria SA (BBVA SM): Spain's second-biggest bank may post a 4.9 percent increase in second- quarter profit as income from Mexico offsets the impact of rising loan defaults in a stalling economy at home, according to the median estimate in a Bloomberg survey of eight analysts. The shares fell 25 cents, or 2 percent, to 12 euros.
Barclays Plc (BARC LN): Swiss Reinsurance Co., Switzerland's largest reinsurer, is considering buying Barclays's life assurance arm, which has more than 7 billion pounds ($13.9 billion) under management, the Sunday Times reported, without citing anyone. Barclays advanced 8.5 pence, or 2.4 percent, to 356.5 pence.
Bayerische Motoren Werke AG (BMW GY): BMW is preparing the sale of its Cirquent IT unit, Euro am Sonntag reported, citing people with information on the possible deal. NTT Data Corp. of Japan is a potential buyer, Euro said. BMW rose 20 cents or 0.7 percent to 30.68 euros.
British Energy Group Plc (BGY LN): British Energy Group and Electricite de France SA have reached an agreement in principle on the terms of an offer for the U.K.'s biggest power producer, the Guardian newspaper reported. The offer of about 775 pence a share would value the company in which the U.K. government has a 35 percent stake at about 12.4 billion pounds, the report said, without saying where it got the information. British Energy fell 2 pence, or 0.3 percent, to 726.5 pence.
Carrefour SA (CA FP): The French supermarket group plans to hold an extraordinary shareholder meeting to approve its new management structure. The shares advanced 2 percent to 35 euros.
Clarins SA (CLR FP): The maker of $70 skin-creams and Thierry Mugler perfumes is scheduled to report second-half sales after the market closes. The shares increased 0.2 percent to 55.49 euros.
Colruyt NV (COLR BB): Belgium's biggest discount food retailer plans to release fiscal first-quarter sales. The shares dropped 1.1 percent to 166.46 euros.
Credit Suisse Group (CSGN VX): Switzerland's second-biggest bank is discussing with the country's banking regulators about the amount of assets banks should have in relation to their equity, Finanz & Wirtschaft said, citing an interview with Chief Financial Officer Renato Fassbind. The shares fell 1.9 francs, or 3.6 percent, to 50.65.
Deutsche Bank AG (DBK GY): Deutsche Bank may not bid for Deutsche Postbank AG, Focus magazine reported, citing people it didn't identify close to Deutsche Bank's management board. Deutsche Bank fell 63 cents or 1.1 percent to 59.57 euros.
Deutsche Telekom AG (DTE GY): Deutsche Telekom's T-Systems unit may face a strike if jobs aren't cut in a socially responsible manner, Euro am Sonntag said, citing Ver.di labor union management-board member Lothar Schroeder. Telekom rose 17 cents or 1.58 percent to 10.93 euros.
Geox SpA (GEO IM): The Italian shoemaker that patented ventilated soles is scheduled to report first-half results and hold an analyst presentation. The shares fell less than 0.1 percent to 7.04 euros.
Groupe Danone SA (BN FP): The world's largest yogurt maker will start producing low-cost yogurts to meet the needs of less- rich consumers, Chief Executive Officer Franck Riboud told Le Figaro. The shares increased 3.44 euros, or 7.7 percent, to 48.29.
Electricite de France SA (EDF FP): EDF will sell 25 percent of British Energy Group Plc to Centrica Plc to seal a 12.4 billion-pound ($24.7 billion) takeover of the U.K.'s biggest power producer this week, the Financial Mail reported, without saying where it got the information.
British Energy will offer investors a share of future profits linked to power output and the price of electricity to clear the way for a takeover by EDF, the Sunday Times said, citing people close to the talks. EDF added 2.9 euros, or 5.6 percent, to 54.35.
Fortis NV (FORA NA): The Belgian financial-services company that ousted Chief Executive Officer Jean-Paul Votron will be forced to hold an extraordinary shareholders meeting to answer questions from investors if it doesn't call for one itself this week, De Telegraaf reported, citing an interview with the head of Dutch shareholders association VEB. Fortis shares fell 43 cents, or 4.3 percent, to 9.60 euros.
Infineon Technologies AG (IFX GY): Infineon Technologies has `no taboos' on its sale of a stake in Qimonda AG, Sueddeutsche Zeitung reported, citing an interview with Chief Executive Officer Peter Bauer. Infineon rose 25 cents or 5.3 percent to 5.085 euros.
Lloyds TSB Group Plc (LLOY LN): Lloyds TSB Group has put its autolease unit, the U.K.'s second-biggest car-leasing company, up for sale, which could see the bank gaining potentially ``hundreds of millions'' of pounds, the Financial Mail reported, without saying where it got the information. Lloyds TSB declined 6.75 pence, or 2 percent, to 331.25 pence.
Mediobanca SpA (MB IM): Alberto Nagel, chief executive officer of Italy's biggest investment bank, may quit if a plan to abandon the lender's dual-governance system results in less independence for management, la Repubblica reported. Renato Pagliaro, chairman of the management board, may also leave if discussions on the bank's system of separate management and supervisory boards lead to reduced autonomy, the daily said. The stock fell 2 cents, or 0.2 percent, to 10.42 euros.
Novartis AG (NOVN VX): A U.S. unit of the drugmaker sued Israeli generic-drug maker Teva Pharmaceutical Industries Ltd. for allegedly infringing a patent for Zometa and Reclast, medicines used to strengthen bones. Novartis lost 65 centimes, or 1.1 percent, to 61.35 francs.
Porsche SE (POR3 GY): Porsche SE may report a net profit of 11 billion euros ($17.3 billion) in the year to July 31 on sales of 8.6 billion euros, Der Spiegel reported, citing analysts and unidentified Porsche managers. Porsche rose 76 cents or .8 percent to 98.62 euros.
PKN Orlen SA (PKN PW): Poland's largest oil company wants to reach an agreement with Lithuania's government on buying a stake in state-owned AB Klaipedos Nafta before the Baltic country's parliamentary elections in October, the Wall Street Journal Polska said, citing an interview with Chief Executive Officer Wojciech Heydel.
Separately, Rzeczpospolita daily said Orlen may sign a five- year contract worth more than 1 billion zloty with rapeseed-oil producer Komagra Sp. z o.o. Orlen fell 1.5 percent to 36 zloty.
Royal Bank of Scotland Group Plc (RBS LN): Royal Bank of Scotland Group Plc may abandon the sale of its U.K. insurance division because of waning interest from buyers, the Financial Mail said, without saying where it got the information. The Royal Bank declined 4.25 pence, or 1.9 percent, to 215 pence.
Ryanair Holdings Plc (RYA ID): Europe's biggest discount airline is scheduled to post fiscal first-quarter results. Profit may have declined 63 percent because of higher fuel expenses, according to analysts surveyed by Bloomberg News. The shares dropped 1.9 percent to 3.23 euros.
Sanofi-Aventis SA (SAN FP): France's largest drugmaker agreed to buy U.K. partner Acambis Plc for 276 million pounds ($549 million) in cash to gain a smallpox vaccine ordered by the U.S. government for use during a terrorist attack. Sanofi added 82 cents, or 1.8 percent, to 47.2 euros.
Telecom Italia SpA (TIT IM): Chief Executive Officer Franco Bernabe may be named chairman and replaced as CEO, la Stampa reported, citing people it didn't identify. Telecom Italia fell 1 cent, or 1.1 percent, to 1.22 euros.
TNK-BP (TNBP RU): Moscow City Prosecutor's Office won't press charges against TNK-BP Chief Executive Officer Robert Dudley after examining claims against him for violations of labor and migration law, Interfax reported, citing an official it didn't identify.
Dudley left Russia July 24 because of ``sustained pressure'' in a dispute with a group of Russian billionaire investors who want control of the company, BP Plc said the same day.
Separately, BP CEO Tony Hayward plans to fight the billionaires to preserve his company's investment in the oil venture, the London-based Times reported, citing an interview with Hayward. TNK-BP fell 2.3 percent to $1.925.
UBS AG (UBSN VX): The world's largest wealth manager said it placed an employee on administrative leave after the Wall Street Journal reported the Swiss bank suspended U.S. fixed-income chief David Shulman.
``We did place an employee on administrative leave last week but we decline to identify the employee,'' Tatiana Togni, a spokeswoman for UBS in Zurich, told Bloomberg News. Shulman remains head of fixed income, added Karina Byrne, a spokeswoman in New York. The shares fell 1.4 francs, or 6.1 percent, to 21.6.
Volkswagen AG (VOW GY): Volkswagen is sticking to its plan to build a factory in Tennessee, Handelsblatt said, citing an interview with Chief Financial Officer Hans Dieter Poetsch. Volkswagen rose 2.31 euros or 1.1 percent to 206.09 euros.
To contact the reporter on this story: Nadja Brandt in Los Angeles at nbrandt@bloomberg.net
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July 28 (Bloomberg) -- The following companies may have unusual price changes in European trading. Stock symbols are in parentheses, and share prices are from the July 25 close.
The Dow Jones Stoxx 600 fell 0.2 percent to 281.76. The Dow Jones Stoxx 50 Index declined 0.1 percent to 2,857.21. The Euro Stoxx 50 Index, a benchmark for the nations using the euro, dropped 0.1 percent to 3,351.13.
Acambis Plc (ACM LN): Sanofi-Aventis SA, France's largest drugmaker, agreed to buy U.K. partner Acambis for 276 million pounds ($549 million) in cash to gain a smallpox vaccine ordered by the U.S. government for use during a terrorist attack. Acambis advanced 1 pence, or 0.9 percent, to 116 pence.
Adidas AG (ADS GY): Adidas will overtake U.S. rival Nike Inc. in China by the end of 2008, WirtschaftsWoche said, citing an interview with the German company's Chief Executive Officer Herbert Hainer. Adidas fell 15 cents or 0.4 percent to 39 euros.
Areva SA (CEI FP): The world's biggest builder of nuclear plants, General Electric Co. and Westinghouse Electric Co. are in talks with India's Larsen & Toubro Ltd. to set up companies to make nuclear-power equipment, the Economic Times reported. Areva dropped 42 cents, or less than 0.1 percent, to 739 euros.
Austriamicrosystems AG (AMS SW): The Austrian chipmaker listed in Switzerland is scheduled to report second-quarter results. The company in April said first-quarter profit fell 8.6 percent as the euro strengthened against the U.S. dollar. The shares climbed 0.3 percent to 36.10 Swiss francs.
BAE Systems Plc (BA/ LN): BAE may announce today its acquisition of Detica Group Plc (DCA LN), the Financial Times reported, and BAE may have offered more than 400 pence a share for the software maker, valuing it at about 500 million pounds ($1 billion). BAE shares fell 1.75 pence, or 0.4 percent, to 445.25 pence. Detica fell 7.75 pence, or 2 percent, to 372.25 pence.
Banco Bilbao Vizcaya Argentaria SA (BBVA SM): Spain's second-biggest bank may post a 4.9 percent increase in second- quarter profit as income from Mexico offsets the impact of rising loan defaults in a stalling economy at home, according to the median estimate in a Bloomberg survey of eight analysts. The shares fell 25 cents, or 2 percent, to 12 euros.
Barclays Plc (BARC LN): Swiss Reinsurance Co., Switzerland's largest reinsurer, is considering buying Barclays's life assurance arm, which has more than 7 billion pounds ($13.9 billion) under management, the Sunday Times reported, without citing anyone. Barclays advanced 8.5 pence, or 2.4 percent, to 356.5 pence.
Bayerische Motoren Werke AG (BMW GY): BMW is preparing the sale of its Cirquent IT unit, Euro am Sonntag reported, citing people with information on the possible deal. NTT Data Corp. of Japan is a potential buyer, Euro said. BMW rose 20 cents or 0.7 percent to 30.68 euros.
British Energy Group Plc (BGY LN): British Energy Group and Electricite de France SA have reached an agreement in principle on the terms of an offer for the U.K.'s biggest power producer, the Guardian newspaper reported. The offer of about 775 pence a share would value the company in which the U.K. government has a 35 percent stake at about 12.4 billion pounds, the report said, without saying where it got the information. British Energy fell 2 pence, or 0.3 percent, to 726.5 pence.
Carrefour SA (CA FP): The French supermarket group plans to hold an extraordinary shareholder meeting to approve its new management structure. The shares advanced 2 percent to 35 euros.
Clarins SA (CLR FP): The maker of $70 skin-creams and Thierry Mugler perfumes is scheduled to report second-half sales after the market closes. The shares increased 0.2 percent to 55.49 euros.
Colruyt NV (COLR BB): Belgium's biggest discount food retailer plans to release fiscal first-quarter sales. The shares dropped 1.1 percent to 166.46 euros.
Credit Suisse Group (CSGN VX): Switzerland's second-biggest bank is discussing with the country's banking regulators about the amount of assets banks should have in relation to their equity, Finanz & Wirtschaft said, citing an interview with Chief Financial Officer Renato Fassbind. The shares fell 1.9 francs, or 3.6 percent, to 50.65.
Deutsche Bank AG (DBK GY): Deutsche Bank may not bid for Deutsche Postbank AG, Focus magazine reported, citing people it didn't identify close to Deutsche Bank's management board. Deutsche Bank fell 63 cents or 1.1 percent to 59.57 euros.
Deutsche Telekom AG (DTE GY): Deutsche Telekom's T-Systems unit may face a strike if jobs aren't cut in a socially responsible manner, Euro am Sonntag said, citing Ver.di labor union management-board member Lothar Schroeder. Telekom rose 17 cents or 1.58 percent to 10.93 euros.
Geox SpA (GEO IM): The Italian shoemaker that patented ventilated soles is scheduled to report first-half results and hold an analyst presentation. The shares fell less than 0.1 percent to 7.04 euros.
Groupe Danone SA (BN FP): The world's largest yogurt maker will start producing low-cost yogurts to meet the needs of less- rich consumers, Chief Executive Officer Franck Riboud told Le Figaro. The shares increased 3.44 euros, or 7.7 percent, to 48.29.
Electricite de France SA (EDF FP): EDF will sell 25 percent of British Energy Group Plc to Centrica Plc to seal a 12.4 billion-pound ($24.7 billion) takeover of the U.K.'s biggest power producer this week, the Financial Mail reported, without saying where it got the information.
British Energy will offer investors a share of future profits linked to power output and the price of electricity to clear the way for a takeover by EDF, the Sunday Times said, citing people close to the talks. EDF added 2.9 euros, or 5.6 percent, to 54.35.
Fortis NV (FORA NA): The Belgian financial-services company that ousted Chief Executive Officer Jean-Paul Votron will be forced to hold an extraordinary shareholders meeting to answer questions from investors if it doesn't call for one itself this week, De Telegraaf reported, citing an interview with the head of Dutch shareholders association VEB. Fortis shares fell 43 cents, or 4.3 percent, to 9.60 euros.
Infineon Technologies AG (IFX GY): Infineon Technologies has `no taboos' on its sale of a stake in Qimonda AG, Sueddeutsche Zeitung reported, citing an interview with Chief Executive Officer Peter Bauer. Infineon rose 25 cents or 5.3 percent to 5.085 euros.
Lloyds TSB Group Plc (LLOY LN): Lloyds TSB Group has put its autolease unit, the U.K.'s second-biggest car-leasing company, up for sale, which could see the bank gaining potentially ``hundreds of millions'' of pounds, the Financial Mail reported, without saying where it got the information. Lloyds TSB declined 6.75 pence, or 2 percent, to 331.25 pence.
Mediobanca SpA (MB IM): Alberto Nagel, chief executive officer of Italy's biggest investment bank, may quit if a plan to abandon the lender's dual-governance system results in less independence for management, la Repubblica reported. Renato Pagliaro, chairman of the management board, may also leave if discussions on the bank's system of separate management and supervisory boards lead to reduced autonomy, the daily said. The stock fell 2 cents, or 0.2 percent, to 10.42 euros.
Novartis AG (NOVN VX): A U.S. unit of the drugmaker sued Israeli generic-drug maker Teva Pharmaceutical Industries Ltd. for allegedly infringing a patent for Zometa and Reclast, medicines used to strengthen bones. Novartis lost 65 centimes, or 1.1 percent, to 61.35 francs.
Porsche SE (POR3 GY): Porsche SE may report a net profit of 11 billion euros ($17.3 billion) in the year to July 31 on sales of 8.6 billion euros, Der Spiegel reported, citing analysts and unidentified Porsche managers. Porsche rose 76 cents or .8 percent to 98.62 euros.
PKN Orlen SA (PKN PW): Poland's largest oil company wants to reach an agreement with Lithuania's government on buying a stake in state-owned AB Klaipedos Nafta before the Baltic country's parliamentary elections in October, the Wall Street Journal Polska said, citing an interview with Chief Executive Officer Wojciech Heydel.
Separately, Rzeczpospolita daily said Orlen may sign a five- year contract worth more than 1 billion zloty with rapeseed-oil producer Komagra Sp. z o.o. Orlen fell 1.5 percent to 36 zloty.
Royal Bank of Scotland Group Plc (RBS LN): Royal Bank of Scotland Group Plc may abandon the sale of its U.K. insurance division because of waning interest from buyers, the Financial Mail said, without saying where it got the information. The Royal Bank declined 4.25 pence, or 1.9 percent, to 215 pence.
Ryanair Holdings Plc (RYA ID): Europe's biggest discount airline is scheduled to post fiscal first-quarter results. Profit may have declined 63 percent because of higher fuel expenses, according to analysts surveyed by Bloomberg News. The shares dropped 1.9 percent to 3.23 euros.
Sanofi-Aventis SA (SAN FP): France's largest drugmaker agreed to buy U.K. partner Acambis Plc for 276 million pounds ($549 million) in cash to gain a smallpox vaccine ordered by the U.S. government for use during a terrorist attack. Sanofi added 82 cents, or 1.8 percent, to 47.2 euros.
Telecom Italia SpA (TIT IM): Chief Executive Officer Franco Bernabe may be named chairman and replaced as CEO, la Stampa reported, citing people it didn't identify. Telecom Italia fell 1 cent, or 1.1 percent, to 1.22 euros.
TNK-BP (TNBP RU): Moscow City Prosecutor's Office won't press charges against TNK-BP Chief Executive Officer Robert Dudley after examining claims against him for violations of labor and migration law, Interfax reported, citing an official it didn't identify.
Dudley left Russia July 24 because of ``sustained pressure'' in a dispute with a group of Russian billionaire investors who want control of the company, BP Plc said the same day.
Separately, BP CEO Tony Hayward plans to fight the billionaires to preserve his company's investment in the oil venture, the London-based Times reported, citing an interview with Hayward. TNK-BP fell 2.3 percent to $1.925.
UBS AG (UBSN VX): The world's largest wealth manager said it placed an employee on administrative leave after the Wall Street Journal reported the Swiss bank suspended U.S. fixed-income chief David Shulman.
``We did place an employee on administrative leave last week but we decline to identify the employee,'' Tatiana Togni, a spokeswoman for UBS in Zurich, told Bloomberg News. Shulman remains head of fixed income, added Karina Byrne, a spokeswoman in New York. The shares fell 1.4 francs, or 6.1 percent, to 21.6.
Volkswagen AG (VOW GY): Volkswagen is sticking to its plan to build a factory in Tennessee, Handelsblatt said, citing an interview with Chief Financial Officer Hans Dieter Poetsch. Volkswagen rose 2.31 euros or 1.1 percent to 206.09 euros.
To contact the reporter on this story: Nadja Brandt in Los Angeles at nbrandt@bloomberg.net
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Adidas, Volkswagen, Deutsche Bank, BMW: German Equity Preview
By Eva von Schaper
July 28 (Bloomberg) -- The following is a list of companies whose shares may have unusual price changes in Germany. Stock symbols are in parentheses, and share prices are from the previous close.
DAX Index futures expiring in September gained 13 points, or 0.2 percent, to 6,486 as of the close on July 25 in Frankfurt. The DAX fell 0.1 percent to 6,436.71.
Adidas AG (ADS GY): Adidas will overtake U.S. rival Nike Inc. in China by the end of 2008, WirtschaftsWoche said, citing an interview with the German company's Chief Executive Officer Herbert Hainer. Adidas fell 15 cents or 0.4 percent to 39 euros.
Bayerische Motoren Werke AG (BMW GY): BMW is preparing the sale of its Cirquent IT unit, Euro am Sonntag reported, citing people with information on the possible deal. NTT Data Corp. of Japan is a potential buyer, Euro said. BMW rose 20 cents or 0.7 percent to 30.68 euros.
Deutsche Bank AG (DBK GY): Deutsche Bank may not bid for Deutsche Postbank AG, Focus magazine reported, citing people it didn't identify close to Deutsche Bank's management board. Deutsche Bank fell 63 cents or 1.1 percent to 59.57 euros.
Deutsche Telekom AG (DTE GY): Deutsche Telekom's T-Systems unit may face a strike if jobs aren't cut in a socially responsible manner, Euro am Sonntag said, citing Ver.di labor union management-board member Lothar Schroeder. Telekom rose 17 cents or 1.58 percent to 10.93 euros.
Infineon Technologies AG (IFX GY): Infineon Technologies has `no taboos' on its sale of a stake in Qimonda AG, Sueddeutsche Zeitung reported, citing an interview with Chief Executive Officer Peter Bauer. Infineon rose 25 cents or 5.3 percent to 5.085 euros.
Porsche SE (POR3 GY): Porsche SE may report a net profit of 11 billion euros ($17.3 billion) in the year to July 31 on sales of 8.6 billion euros, Der Spiegel reported, citing analysts and unidentified Porsche managers. Porsche rose 76 cents or .8 percent to 98.62 euros.
Volkswagen AG (VOW GY): Volkswagen is sticking to its plan to build a factory in Tennessee, Handelsblatt said, citing an interview with Chief Financial Officer Hans Dieter Poetsch. Volkswagen rose 2.31 euros or 1.1 percent to 206.09 euros.
To contact the reporter on this story: Eva von Schaper in Munich at evonschaper@bloomberg.net
Read more...
July 28 (Bloomberg) -- The following is a list of companies whose shares may have unusual price changes in Germany. Stock symbols are in parentheses, and share prices are from the previous close.
DAX Index futures expiring in September gained 13 points, or 0.2 percent, to 6,486 as of the close on July 25 in Frankfurt. The DAX fell 0.1 percent to 6,436.71.
Adidas AG (ADS GY): Adidas will overtake U.S. rival Nike Inc. in China by the end of 2008, WirtschaftsWoche said, citing an interview with the German company's Chief Executive Officer Herbert Hainer. Adidas fell 15 cents or 0.4 percent to 39 euros.
Bayerische Motoren Werke AG (BMW GY): BMW is preparing the sale of its Cirquent IT unit, Euro am Sonntag reported, citing people with information on the possible deal. NTT Data Corp. of Japan is a potential buyer, Euro said. BMW rose 20 cents or 0.7 percent to 30.68 euros.
Deutsche Bank AG (DBK GY): Deutsche Bank may not bid for Deutsche Postbank AG, Focus magazine reported, citing people it didn't identify close to Deutsche Bank's management board. Deutsche Bank fell 63 cents or 1.1 percent to 59.57 euros.
Deutsche Telekom AG (DTE GY): Deutsche Telekom's T-Systems unit may face a strike if jobs aren't cut in a socially responsible manner, Euro am Sonntag said, citing Ver.di labor union management-board member Lothar Schroeder. Telekom rose 17 cents or 1.58 percent to 10.93 euros.
Infineon Technologies AG (IFX GY): Infineon Technologies has `no taboos' on its sale of a stake in Qimonda AG, Sueddeutsche Zeitung reported, citing an interview with Chief Executive Officer Peter Bauer. Infineon rose 25 cents or 5.3 percent to 5.085 euros.
Porsche SE (POR3 GY): Porsche SE may report a net profit of 11 billion euros ($17.3 billion) in the year to July 31 on sales of 8.6 billion euros, Der Spiegel reported, citing analysts and unidentified Porsche managers. Porsche rose 76 cents or .8 percent to 98.62 euros.
Volkswagen AG (VOW GY): Volkswagen is sticking to its plan to build a factory in Tennessee, Handelsblatt said, citing an interview with Chief Financial Officer Hans Dieter Poetsch. Volkswagen rose 2.31 euros or 1.1 percent to 206.09 euros.
To contact the reporter on this story: Eva von Schaper in Munich at evonschaper@bloomberg.net
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Barclays, Barratt, Acambis, Informa: U.K., Irish Equity Preview
By Howard Mustoe
July 28 (Bloomberg) -- The following is a list of companies whose shares may have unusual price changes in U.K. and Irish markets today. Stock symbols are in parentheses and prices are from the last market close.
The benchmark FTSE 100 Index declined 9.7, or 0.2 percent, to 5,352.60. The FTSE All-Share Index fell 0.4 percent and Ireland's ISEQ Index decreased 1.6 percent.
U.K. Companies:
Acambis Plc (ACM LN): Sanofi-Aventis SA, France's largest drugmaker, agreed to buy U.K. partner Acambis for 276 million pounds ($549 million) in cash to gain a smallpox vaccine ordered by the U.S. government for use during a terrorist attack. Acambis advanced 1 pence, or 0.9 percent, to 116 pence.
AT Communications Group Plc (ATCG LN): The management of AT Communications Group will offer to buy out the U.K. technology company this week, the Independent on Sunday reported, without saying where it got the information. AT Communications rose 0.5 pence, or 2.3 percent, to 22.5 pence.
BAE Systems Plc (BA/ LN): BAE may announce today its acquisition of Detica Group Plc (DCA LN), the Financial Times reported, and BAE may have offered more than 400 pence a share for the software maker, valuing it at about 500 million pounds ($1 billion). BAE shares fell 1.75 pence, or 0.4 percent, to 445.25 pence. Detica fell 7.75 pence, or 2 percent, to 372.25 pence.
Barclays Plc (BARC LN): Swiss Reinsurance Co., Switzerland's largest reinsurer, is considering buying Barclays's life assurance arm, which has more than 7 billion pounds ($13.9 billion) under management, the Sunday Times reported, without citing anyone. Barclays advanced 8.5 pence, or 2.4 percent, to 356.5 pence.
Barratt Developments Plc (BDEV LN): Barratt Developments is in talks with U.K. banks including HBOS Plc about possible joint ventures in real estate, the Daily Telegraph reported, citing a report in the Estates Gazette magazine. Barratt declined 3.5 pence, or 3.4 percent, to 98.75 pence.
British Airways Plc (BAY LN): Four current and former British Airways executives will be charged with price fixing by the U.K.'s Office of Fair Trading, the Financial Times reported, without citing anyone. British Airways advanced 4.75 pence, or 2 percent, to 246.75 pence.
British Energy Group Plc (BGY LN): British Energy Group and Electricite de France SA have reached an agreement in principle on the terms of an offer for the U.K.'s biggest power producer, the Guardian newspaper reported. The offer of about 775 pence a share would value the company in which the U.K. government has a 35 percent stake at about 12.4 billion pounds, the report said, without saying where it got the information. British Energy fell 2 pence, or 0.3 percent, to 726.5 pence.
Compass Group Plc (CPG LN): The world's largest supplier of meals to governments, schools and hospitals releases a trading statement. Compass declined 10 pence, or 2.8 percent, to 345 pence.
Elementis Plc (ELM LN): The world's largest chromium chemicals maker, said first-half business levels beat company targets after making efficiency improvements and demand increased in markets outside of North America. Elementis rose 1.75 pence, or 2.1 percent, to 83 pence.
Informa Plc (INF LN): The U.K. publisher of the Lloyd's List maritime newspaper releases earnings. Informa rose 4.75 pence, or 1.1 percent, to 417.25 pence.
Keller Group Plc (KLR LN): The U.K. ground engineer that built the base for Palm Island in Dubai release earnings. Keller fell 21 pence, or 3.1 percent, to 648 pence.
Land Securities Group Plc (LAND LN): The company has short- listed a group of Middle East investors and the William Pears Group as final bidders for its Trillium property-management unit, which is valued at 1.4 billion pounds, the Financial Times said, without saying where it got the information. Land Securities declined 27 pence, or 2.1 percent, to 1252 pence.
Lloyds TSB Group Plc (LLOY LN): Lloyds TSB Group has put its autolease unit, the U.K.'s second-biggest car-leasing company, up for sale, which could see the bank gaining potentially ``hundreds of millions'' of pounds, the Financial Mail reported, without saying where it got the information. Lloyds TSB declined 6.75 pence, or 2 percent, to 331.25 pence.
Marston's Plc (MARS LN): The pub owner and Brewer releases a trading statement. Marston's fell 8.5 pence, or 4.3 percent, to 188.25 pence.
Northern Foods Plc (NFDS LN): The U.K.'s largest prepared- meals maker releases a trading statement. Northern Foods fell 2.25 pence, or 3.7 percent, to 59 pence.
Pace Plc (PIC LN): The company that supplies digital TV technology for BSkyB releases earnings. Pace rose 2.75 pence, or 3.2 percent, to 87.5 pence.
Pearson Plc (PSON LN): The owner of the Financial Times newspaper and Penguin Group Inc. releases earnings. Pearson was unchanged on July 25.
Reckitt Benckiser Group Plc (RB/ LN): The world's largest maker of household cleaners releases earnings. Reckitt Benckiser advanced 46 pence, or 1.9 percent, to 2536 pence.
Royal Bank of Scotland Group Plc (RBS LN): Royal Bank of Scotland Group Plc may abandon the sale of its U.K. insurance division because of waning interest from buyers, the Financial Mail said, without saying where it got the information. The Royal Bank declined 4.25 pence, or 1.9 percent, to 215 pence.
Wilmington Group Plc (WIL LN): HgCapital, a London-based buyout company, is considering a takeover of Wilmington Group Plc, the U.K. publisher of the Press Gazette, the Sunday Telegraph reported without citing anyone. Wilmington declined 2.5 pence, or 1.5 percent, to 165 pence.
WSP Group Plc (WSH LN): The engineer that helped design New York's Freedom Tower publishes earnings. WSP climbed 4.5 pence, or 0.9 percent, to 515.5 pence.
Irish Companies:
Ryanair Holdings Plc (RYA ID): Europe's biggest discount airline, may say fiscal first-quarter profit declined 63 percent because of higher fuel expenses. Ryanair declined 0.62 euros, or 1.9 percent, to 3.228 euros.
To contact the reporter on this story: Howard Mustoe in London at hmustoe@bloomberg.net
Read more...
July 28 (Bloomberg) -- The following is a list of companies whose shares may have unusual price changes in U.K. and Irish markets today. Stock symbols are in parentheses and prices are from the last market close.
The benchmark FTSE 100 Index declined 9.7, or 0.2 percent, to 5,352.60. The FTSE All-Share Index fell 0.4 percent and Ireland's ISEQ Index decreased 1.6 percent.
U.K. Companies:
Acambis Plc (ACM LN): Sanofi-Aventis SA, France's largest drugmaker, agreed to buy U.K. partner Acambis for 276 million pounds ($549 million) in cash to gain a smallpox vaccine ordered by the U.S. government for use during a terrorist attack. Acambis advanced 1 pence, or 0.9 percent, to 116 pence.
AT Communications Group Plc (ATCG LN): The management of AT Communications Group will offer to buy out the U.K. technology company this week, the Independent on Sunday reported, without saying where it got the information. AT Communications rose 0.5 pence, or 2.3 percent, to 22.5 pence.
BAE Systems Plc (BA/ LN): BAE may announce today its acquisition of Detica Group Plc (DCA LN), the Financial Times reported, and BAE may have offered more than 400 pence a share for the software maker, valuing it at about 500 million pounds ($1 billion). BAE shares fell 1.75 pence, or 0.4 percent, to 445.25 pence. Detica fell 7.75 pence, or 2 percent, to 372.25 pence.
Barclays Plc (BARC LN): Swiss Reinsurance Co., Switzerland's largest reinsurer, is considering buying Barclays's life assurance arm, which has more than 7 billion pounds ($13.9 billion) under management, the Sunday Times reported, without citing anyone. Barclays advanced 8.5 pence, or 2.4 percent, to 356.5 pence.
Barratt Developments Plc (BDEV LN): Barratt Developments is in talks with U.K. banks including HBOS Plc about possible joint ventures in real estate, the Daily Telegraph reported, citing a report in the Estates Gazette magazine. Barratt declined 3.5 pence, or 3.4 percent, to 98.75 pence.
British Airways Plc (BAY LN): Four current and former British Airways executives will be charged with price fixing by the U.K.'s Office of Fair Trading, the Financial Times reported, without citing anyone. British Airways advanced 4.75 pence, or 2 percent, to 246.75 pence.
British Energy Group Plc (BGY LN): British Energy Group and Electricite de France SA have reached an agreement in principle on the terms of an offer for the U.K.'s biggest power producer, the Guardian newspaper reported. The offer of about 775 pence a share would value the company in which the U.K. government has a 35 percent stake at about 12.4 billion pounds, the report said, without saying where it got the information. British Energy fell 2 pence, or 0.3 percent, to 726.5 pence.
Compass Group Plc (CPG LN): The world's largest supplier of meals to governments, schools and hospitals releases a trading statement. Compass declined 10 pence, or 2.8 percent, to 345 pence.
Elementis Plc (ELM LN): The world's largest chromium chemicals maker, said first-half business levels beat company targets after making efficiency improvements and demand increased in markets outside of North America. Elementis rose 1.75 pence, or 2.1 percent, to 83 pence.
Informa Plc (INF LN): The U.K. publisher of the Lloyd's List maritime newspaper releases earnings. Informa rose 4.75 pence, or 1.1 percent, to 417.25 pence.
Keller Group Plc (KLR LN): The U.K. ground engineer that built the base for Palm Island in Dubai release earnings. Keller fell 21 pence, or 3.1 percent, to 648 pence.
Land Securities Group Plc (LAND LN): The company has short- listed a group of Middle East investors and the William Pears Group as final bidders for its Trillium property-management unit, which is valued at 1.4 billion pounds, the Financial Times said, without saying where it got the information. Land Securities declined 27 pence, or 2.1 percent, to 1252 pence.
Lloyds TSB Group Plc (LLOY LN): Lloyds TSB Group has put its autolease unit, the U.K.'s second-biggest car-leasing company, up for sale, which could see the bank gaining potentially ``hundreds of millions'' of pounds, the Financial Mail reported, without saying where it got the information. Lloyds TSB declined 6.75 pence, or 2 percent, to 331.25 pence.
Marston's Plc (MARS LN): The pub owner and Brewer releases a trading statement. Marston's fell 8.5 pence, or 4.3 percent, to 188.25 pence.
Northern Foods Plc (NFDS LN): The U.K.'s largest prepared- meals maker releases a trading statement. Northern Foods fell 2.25 pence, or 3.7 percent, to 59 pence.
Pace Plc (PIC LN): The company that supplies digital TV technology for BSkyB releases earnings. Pace rose 2.75 pence, or 3.2 percent, to 87.5 pence.
Pearson Plc (PSON LN): The owner of the Financial Times newspaper and Penguin Group Inc. releases earnings. Pearson was unchanged on July 25.
Reckitt Benckiser Group Plc (RB/ LN): The world's largest maker of household cleaners releases earnings. Reckitt Benckiser advanced 46 pence, or 1.9 percent, to 2536 pence.
Royal Bank of Scotland Group Plc (RBS LN): Royal Bank of Scotland Group Plc may abandon the sale of its U.K. insurance division because of waning interest from buyers, the Financial Mail said, without saying where it got the information. The Royal Bank declined 4.25 pence, or 1.9 percent, to 215 pence.
Wilmington Group Plc (WIL LN): HgCapital, a London-based buyout company, is considering a takeover of Wilmington Group Plc, the U.K. publisher of the Press Gazette, the Sunday Telegraph reported without citing anyone. Wilmington declined 2.5 pence, or 1.5 percent, to 165 pence.
WSP Group Plc (WSH LN): The engineer that helped design New York's Freedom Tower publishes earnings. WSP climbed 4.5 pence, or 0.9 percent, to 515.5 pence.
Irish Companies:
Ryanair Holdings Plc (RYA ID): Europe's biggest discount airline, may say fiscal first-quarter profit declined 63 percent because of higher fuel expenses. Ryanair declined 0.62 euros, or 1.9 percent, to 3.228 euros.
To contact the reporter on this story: Howard Mustoe in London at hmustoe@bloomberg.net
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Warsaw Exchange Sees Record Listings in 2008, Led by Small-Caps
By Pawel Kozlowski
July 28 (Bloomberg) -- The Warsaw Stock Exchange expects a record number of companies to start trading this year because smaller enterprises are increasing share sales even as the benchmark index falls for the first time in six years.
About 50 companies may debut on Warsaw's main market in 2008 and the number of stocks on its one-year-old NewConnect for firms valued at less than 20 million zloty ($9.8 million) may climb to 100 from 24 last year, Chief Executive Officer Ludwik Sobolewski said in a July 25 interview. A total of 57 companies listed in the first half of this year, compared with 105 in 2007.
Sobolewski's outlook counters a global decline after 380 companies held initial public offerings this year, compared with 854 in the same period in 2007, according to data compiled by Bloomberg News. Poland's WIG20 Index fell 24 percent in 2008, compared with an 18 percent drop in the MSCI Emerging Markets Index.
``The pipeline is full,'' Sobolewski, 42, who became CEO two years ago, said in Lodz. ``The question is what the situation will be on world markets.''
More than $11 trillion has been erased from global equity markets this year on concern credit-related losses topping $460 billion worldwide and the economic slowdown will cut profits, Bloomberg data show.
The decline in the WIG20 left its 20 companies trading at an average of 9.6 times reported earnings, compared with 12.7 for MSCI's index of developing countries and 11.1 for the Dow Jones Stoxx 600 Index, a measure for western Europe.
The WIG20 almost tripled from 2003 through 2007.
Slowing Growth
Poland's growth in gross domestic product may slow to 5.5 percent in 2008, from 6.6 percent last year, the government said in May. That's almost triple the 1.8 percent growth forecast in 2008 for countries that share the euro, based on European Central Bank figures.
The state-owned exchange attracted 23 companies to its main market in the first half and 34 on NewConnect, which started in August last year.
Poland had the most initial public offerings in Europe after the U.K. in the first six months, the bourse said, citing a report by PricewaterhouseCoopers LLP.
The Warsaw exchange is the 17th biggest in Europe with a market value of $187 billion, according to Bloomberg data. There are currently 366 companies traded on its main market, including 25 foreign enterprises, according to the exchange's Web site. Another 61 trade on NewConnect, Sobolewski said.
Public Offerings
The government said it may sell minority stakes to the public this year in Polska Grupa Energetyczna SA and Enea SA, worth at least 3 billion zloty ($1.5 billion) each.
Companies from the Czech Republic's alternative energy industry may be among the first foreign listings on NewConnect, Sobolewski said. He declined to specify the companies.
NewConnect companies don't need to file a prospectus before selling shares and have to report financial results once a year, not every quarter, as is the case on the main Polish market.
The Warsaw bourse bought a stake in Romania's futures exchange in 2007 and expressed interest in taking over the Sofia Stock Exchange if the Bulgarian government sells its stake. The Polish bourse acquired 25 percent of Ukraine's Innex stock exchange earlier this month.
``Ukraine is the most important market for our expansion in the region,'' Sobolewski said. ``We treat this investment in the Innex market as an important beachhead for our expansion.''
Stake Sale
The Polish government, which owns 98.8 percent of the exchange, wants to sell a 19 percent stake in the bourse in an IPO. A further 28.8 percent of the exchange will be sold to institutional investors who won't be allowed to sell the shares without the state's consent, according to government plans announced in March.
The IPO still has a ``chance'' this year if lawmakers pass legislation by October paving the way for the sale, Sobolewski said. The main change in the legislation for the exchange is allowing it to pay a dividend, he said.
``Without doubt there's political will in this government to carry out this IPO,'' Sobolewski said. ``The sale terms that were announced earlier this year might be changed but the government keeps its plan to sell a minority stake at this stage.''
To contact the reporter on this story: Pawel Kozlowski in Warsaw pkozlowski@bloomberg.net
Read more...
July 28 (Bloomberg) -- The Warsaw Stock Exchange expects a record number of companies to start trading this year because smaller enterprises are increasing share sales even as the benchmark index falls for the first time in six years.
About 50 companies may debut on Warsaw's main market in 2008 and the number of stocks on its one-year-old NewConnect for firms valued at less than 20 million zloty ($9.8 million) may climb to 100 from 24 last year, Chief Executive Officer Ludwik Sobolewski said in a July 25 interview. A total of 57 companies listed in the first half of this year, compared with 105 in 2007.
Sobolewski's outlook counters a global decline after 380 companies held initial public offerings this year, compared with 854 in the same period in 2007, according to data compiled by Bloomberg News. Poland's WIG20 Index fell 24 percent in 2008, compared with an 18 percent drop in the MSCI Emerging Markets Index.
``The pipeline is full,'' Sobolewski, 42, who became CEO two years ago, said in Lodz. ``The question is what the situation will be on world markets.''
More than $11 trillion has been erased from global equity markets this year on concern credit-related losses topping $460 billion worldwide and the economic slowdown will cut profits, Bloomberg data show.
The decline in the WIG20 left its 20 companies trading at an average of 9.6 times reported earnings, compared with 12.7 for MSCI's index of developing countries and 11.1 for the Dow Jones Stoxx 600 Index, a measure for western Europe.
The WIG20 almost tripled from 2003 through 2007.
Slowing Growth
Poland's growth in gross domestic product may slow to 5.5 percent in 2008, from 6.6 percent last year, the government said in May. That's almost triple the 1.8 percent growth forecast in 2008 for countries that share the euro, based on European Central Bank figures.
The state-owned exchange attracted 23 companies to its main market in the first half and 34 on NewConnect, which started in August last year.
Poland had the most initial public offerings in Europe after the U.K. in the first six months, the bourse said, citing a report by PricewaterhouseCoopers LLP.
The Warsaw exchange is the 17th biggest in Europe with a market value of $187 billion, according to Bloomberg data. There are currently 366 companies traded on its main market, including 25 foreign enterprises, according to the exchange's Web site. Another 61 trade on NewConnect, Sobolewski said.
Public Offerings
The government said it may sell minority stakes to the public this year in Polska Grupa Energetyczna SA and Enea SA, worth at least 3 billion zloty ($1.5 billion) each.
Companies from the Czech Republic's alternative energy industry may be among the first foreign listings on NewConnect, Sobolewski said. He declined to specify the companies.
NewConnect companies don't need to file a prospectus before selling shares and have to report financial results once a year, not every quarter, as is the case on the main Polish market.
The Warsaw bourse bought a stake in Romania's futures exchange in 2007 and expressed interest in taking over the Sofia Stock Exchange if the Bulgarian government sells its stake. The Polish bourse acquired 25 percent of Ukraine's Innex stock exchange earlier this month.
``Ukraine is the most important market for our expansion in the region,'' Sobolewski said. ``We treat this investment in the Innex market as an important beachhead for our expansion.''
Stake Sale
The Polish government, which owns 98.8 percent of the exchange, wants to sell a 19 percent stake in the bourse in an IPO. A further 28.8 percent of the exchange will be sold to institutional investors who won't be allowed to sell the shares without the state's consent, according to government plans announced in March.
The IPO still has a ``chance'' this year if lawmakers pass legislation by October paving the way for the sale, Sobolewski said. The main change in the legislation for the exchange is allowing it to pay a dividend, he said.
``Without doubt there's political will in this government to carry out this IPO,'' Sobolewski said. ``The sale terms that were announced earlier this year might be changed but the government keeps its plan to sell a minority stake at this stage.''
To contact the reporter on this story: Pawel Kozlowski in Warsaw pkozlowski@bloomberg.net
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