By Chanyaporn Chanjaroen
Aug. 27 (Bloomberg) -- Lead rose for the first time in three days on the London Metal Exchange as industry and investors took advantage of recent declines to buy at cheaper prices. Copper and zinc also gained.
Lead, mostly used in car batteries, fell 27 percent this year through yesterday, the worst performer among metals traded on the exchange. The decline to about $1,600 a metric ton attracted buyers, according to Triland Metals Ltd., one of 12 companies trading on the floor of the LME.
``Whenever prices drop towards $1,600 you see buying interest from consumers and funds,'' Michael Khosrowpour, a trader at Triland, said today by phone.
The contract for delivery in three months advanced $70, or 3.8 percent, to $1,925 a ton as of 11:59 a.m. in London. The metal traded at an 18-month low of $1,531 a ton on July 4.
Increased output in China, the world's largest miner and consumer of the metal, contributed to price declines this year. Chinese miners boosted production by 23 percent last month from a year earlier, according to the National Bureau of Statistics.
The dollar's slide today also buoyed LME metals, increasing their appeal as an alternative investment. The LME index tracking six metals closed down 1.4 percent yesterday as the U.S. currency gained to a six-month high against the euro.
LME-tracked lead inventories fell 3,050 tons, or 3.5 percent, to 83,375 tons, according to a daily exchange report, the lowest since June 16. Stocks have more than tripled in the past year. Lead's implied volatility rose to 53.10 last week, the highest in about a year, suggesting wider swings in prices. It was at 52.73 today.
Copper Advances
Copper rose $35, or 0.5 percent, to $7,615 a ton. A deficit of concentrate that's smelted and refined into the metal has supported prices, countering weaker demand for copper, Chilean miner Antofagasta Plc said today in a statement.
Jiangxi Copper Co., the second-biggest smelter in China, said some competitors are losing money and may close because of low processing fees being paid by miners, Chairman Li Yihuang said today at a press conference in Hong Kong.
Among other metals traded on the LME, aluminum added $15 to $2,783 a ton, and nickel advanced $370, or 1.9 percent, to $20,400. Zinc rose $11.50 to $1,800.50 a ton and tin declined $100, or 0.5 percent, to $20,600.
-- With reporting by Xiao Yu in Beijing. Editors: Tony Barrett, M. Shankar
To contact the reporter on this story: Chanyaporn Chanjaroen in London at cchanjaroen@bloomberg.net
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Wednesday, August 27, 2008
India Buys Raw Sugar for the First Time Since 2006
By Thomas Kutty Abraham
Aug. 27 (Bloomberg) -- Shree Renuka Sugars Ltd., India's biggest refiner, bought 30,000 metric tons of raw sugar from Brazil, the nation's first overseas purchase in 2 1/2 years as domestic production declines.
The sugar is scheduled for October arrival to Haldia, a port on India's eastern coast and the site of the company's 2,000 ton a day mill, which started production in June, Managing Director Narendra Murkumbi said in an interview. The commodity is being bought tax-free for turning into white sugar for export, he said.
Purchases by India, the world's biggest sugar consumer, may bolster global prices, which have climbed 50 percent in the past year. Domestic output may total 22 million tons in the year from October, down from 26.5 million tons this year, the Indian Sugar Mills Association said. The nation last bought sugar in 2005-06.
``Domestic raw material is not available and buying from the spot market in Brazil is more attractive,'' Murkumbi said. ``We may import more raw sugar after December.''
Sugar for October delivery rose 1.1 percent to 14.24 cents a pound today on ICE Futures U.S., the former New York Board of Trade. The price is up 32 percent this year. Refined, or white, sugar for October delivery gained as much as 1.7 percent to $419.50 a ton in London trading, the highest since November 2006.
Shree Renuka signed a three-year contract with Brazil's Grupo Copersucar in 2006 to buy raw sugar. Brazilian raw sugar, priced at about $300 a ton free on board, is cheaper than that sold by suppliers in Thailand, Murkumbi said.
Cheaper Option
``Shree Renuka will be looking to import from the cheapest source and sell refined sugar at the highest price,'' said Kiran Wadhwana, a director at the New Delhi-based International Trading Co. ``A high import duty will prevent imports for sale in the local market.''
Sugar imports for sale domestically are taxed at 60 percent.
Mills in India, forecast to sell a record 4.5 million tons of sugar abroad this year, will halt exports from October to sell domestically, where demand is expected to pick up next month before the Diwali festival in October, Wadhwana said.
Exports may not exceed 1 million tons in the year ending Sept. 30, 2009, because of lower output and as farmers switch to other crops, S.L. Jain, director general of the New Delhi-based Indian Sugar Mills Association, said in an interview last week.
To contact the reporter on this story: Thomas Kutty Abraham in Mumbai at tabraham4@bloomberg.net.
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Aug. 27 (Bloomberg) -- Shree Renuka Sugars Ltd., India's biggest refiner, bought 30,000 metric tons of raw sugar from Brazil, the nation's first overseas purchase in 2 1/2 years as domestic production declines.
The sugar is scheduled for October arrival to Haldia, a port on India's eastern coast and the site of the company's 2,000 ton a day mill, which started production in June, Managing Director Narendra Murkumbi said in an interview. The commodity is being bought tax-free for turning into white sugar for export, he said.
Purchases by India, the world's biggest sugar consumer, may bolster global prices, which have climbed 50 percent in the past year. Domestic output may total 22 million tons in the year from October, down from 26.5 million tons this year, the Indian Sugar Mills Association said. The nation last bought sugar in 2005-06.
``Domestic raw material is not available and buying from the spot market in Brazil is more attractive,'' Murkumbi said. ``We may import more raw sugar after December.''
Sugar for October delivery rose 1.1 percent to 14.24 cents a pound today on ICE Futures U.S., the former New York Board of Trade. The price is up 32 percent this year. Refined, or white, sugar for October delivery gained as much as 1.7 percent to $419.50 a ton in London trading, the highest since November 2006.
Shree Renuka signed a three-year contract with Brazil's Grupo Copersucar in 2006 to buy raw sugar. Brazilian raw sugar, priced at about $300 a ton free on board, is cheaper than that sold by suppliers in Thailand, Murkumbi said.
Cheaper Option
``Shree Renuka will be looking to import from the cheapest source and sell refined sugar at the highest price,'' said Kiran Wadhwana, a director at the New Delhi-based International Trading Co. ``A high import duty will prevent imports for sale in the local market.''
Sugar imports for sale domestically are taxed at 60 percent.
Mills in India, forecast to sell a record 4.5 million tons of sugar abroad this year, will halt exports from October to sell domestically, where demand is expected to pick up next month before the Diwali festival in October, Wadhwana said.
Exports may not exceed 1 million tons in the year ending Sept. 30, 2009, because of lower output and as farmers switch to other crops, S.L. Jain, director general of the New Delhi-based Indian Sugar Mills Association, said in an interview last week.
To contact the reporter on this story: Thomas Kutty Abraham in Mumbai at tabraham4@bloomberg.net.
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Copper Futures Gain in New York as Dollar Declines, Oil Rallies
By Millie Munshi
Aug. 27 (Bloomberg) -- Copper gained as a decline in the dollar and a rise in energy costs increased demand for commodities as a hedge against inflation.
The dollar fell as much as 0.8 percent against a basket of the euro, yen and four other major currencies. Crude oil gained as much as 2.9 percent. Some traders buy raw materials to preserve purchasing power. Before today, copper gained 12 percent this year as the dollar slumped to a record versus the euro and fuel prices soared.
The metal advanced ``in the wake of the direction dictated by oil and the dollar,'' Alex Heath, the head of base metals trading at RBC Capital Markets in London, said in a report.
Copper futures for December delivery advanced 3.25 cents, or 1 percent, to $3.449 a pound at 9:41 a.m. on the Comex division of the New York Mercantile Exchange. The price reached a record $4.2605 on May 5.
The metal extended gains after a report showed orders for U.S. durable goods unexpectedly increased in July, easing concern that an economic slump will curb metals demand.
Bookings of goods meant to last several years climbed 1.3 percent, the Commerce Department said. Economists projected orders would be unchanged, according to the median of 76 forecasts in a Bloomberg News survey.
On the London Metal Exchange, copper for delivery in three months rose $60, or 0.8 percent, to $7,640 a metric ton ($3.46 a pound). Before today, the price gained 3.6 percent in the past 12 months.
To contact the reporter on this story: Millie Munshi in New York at mmunshi@bloomberg.net
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Aug. 27 (Bloomberg) -- Copper gained as a decline in the dollar and a rise in energy costs increased demand for commodities as a hedge against inflation.
The dollar fell as much as 0.8 percent against a basket of the euro, yen and four other major currencies. Crude oil gained as much as 2.9 percent. Some traders buy raw materials to preserve purchasing power. Before today, copper gained 12 percent this year as the dollar slumped to a record versus the euro and fuel prices soared.
The metal advanced ``in the wake of the direction dictated by oil and the dollar,'' Alex Heath, the head of base metals trading at RBC Capital Markets in London, said in a report.
Copper futures for December delivery advanced 3.25 cents, or 1 percent, to $3.449 a pound at 9:41 a.m. on the Comex division of the New York Mercantile Exchange. The price reached a record $4.2605 on May 5.
The metal extended gains after a report showed orders for U.S. durable goods unexpectedly increased in July, easing concern that an economic slump will curb metals demand.
Bookings of goods meant to last several years climbed 1.3 percent, the Commerce Department said. Economists projected orders would be unchanged, according to the median of 76 forecasts in a Bloomberg News survey.
On the London Metal Exchange, copper for delivery in three months rose $60, or 0.8 percent, to $7,640 a metric ton ($3.46 a pound). Before today, the price gained 3.6 percent in the past 12 months.
To contact the reporter on this story: Millie Munshi in New York at mmunshi@bloomberg.net
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Gold Advances on Investor Demand for Haven, Falling U.S. Dollar
By Claudia Carpenter
Aug. 27 (Bloomberg) -- Gold rose in London on demand for precious metals as a haven from housing-related financial losses and an alternative investment to the declining dollar.
Gold extended its rebound from a nine-month low reached on Aug. 15. Demand for 1-kilo (2.2-pound) gold bars at the European refineries of Heraeus Holding GmbH has outstripped supply, with customers waiting as long as two weeks for delivery of orders, said Wolfgang Wrzesniok-Rossbach, head of marketing and sales.
``We had these housing problems three months ago but the price was still high,'' Wrzesniok-Rossbach said from Hanau, Germany. ``The problems are still there but the prices are much lower. This is why people have come in and invested their money in gold.''
Gold for immediate delivery gained $7.44, or 0.9 percent, to $832.34 an ounce as of 12:27 p.m. in London. The metal fell to $772.98 on Aug. 15, the lowest since Oct. 26, after reaching a record high of $1,032.70 on March 17.
The dollar fell from a six-month high against the euro today on speculation U.S. economic data will suggest the Federal Reserve will hold off raising interest rates.
Gold inflows of $306 million since the middle of July have led funds moving into the exchange-traded commodities of ETF Securities Ltd., the Jersey-based company said today in an e- mailed report. ``The consistently strong inflows into the gold ETCs highlights investors' continuing interest in buying safe haven assets as global economic and financial conditions deteriorate and inflation remains high,'' it said.
Silver for immediate delivery rose 15 cents to $13.74 an ounce, platinum gained $14, or 1 percent, to $1,434 an ounce, and palladium increased $7.50 to $293.50.
Rhodium, used in autocatalysts, led the rebound in precious metals, gaining $200 to $6,200 an ounce, Johnson Matthey Plc said. Prices have climbed 61 percent in five trading sessions.
Investment in the SPDR Gold Trust, the biggest exchange- traded fund backed by gold, was unchanged since Aug. 19 at 651.37 metric tons.
To contact the reporter on this story: Claudia Carpenter in London at ccarpenter2@bloomberg.net
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Aug. 27 (Bloomberg) -- Gold rose in London on demand for precious metals as a haven from housing-related financial losses and an alternative investment to the declining dollar.
Gold extended its rebound from a nine-month low reached on Aug. 15. Demand for 1-kilo (2.2-pound) gold bars at the European refineries of Heraeus Holding GmbH has outstripped supply, with customers waiting as long as two weeks for delivery of orders, said Wolfgang Wrzesniok-Rossbach, head of marketing and sales.
``We had these housing problems three months ago but the price was still high,'' Wrzesniok-Rossbach said from Hanau, Germany. ``The problems are still there but the prices are much lower. This is why people have come in and invested their money in gold.''
Gold for immediate delivery gained $7.44, or 0.9 percent, to $832.34 an ounce as of 12:27 p.m. in London. The metal fell to $772.98 on Aug. 15, the lowest since Oct. 26, after reaching a record high of $1,032.70 on March 17.
The dollar fell from a six-month high against the euro today on speculation U.S. economic data will suggest the Federal Reserve will hold off raising interest rates.
Gold inflows of $306 million since the middle of July have led funds moving into the exchange-traded commodities of ETF Securities Ltd., the Jersey-based company said today in an e- mailed report. ``The consistently strong inflows into the gold ETCs highlights investors' continuing interest in buying safe haven assets as global economic and financial conditions deteriorate and inflation remains high,'' it said.
Silver for immediate delivery rose 15 cents to $13.74 an ounce, platinum gained $14, or 1 percent, to $1,434 an ounce, and palladium increased $7.50 to $293.50.
Rhodium, used in autocatalysts, led the rebound in precious metals, gaining $200 to $6,200 an ounce, Johnson Matthey Plc said. Prices have climbed 61 percent in five trading sessions.
Investment in the SPDR Gold Trust, the biggest exchange- traded fund backed by gold, was unchanged since Aug. 19 at 651.37 metric tons.
To contact the reporter on this story: Claudia Carpenter in London at ccarpenter2@bloomberg.net
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Oil Rises a Third Day as Hurricane Threatens Gulf of Mexico
By Mark Shenk
Aug. 27 (Bloomberg) -- Crude oil rose for a third day on forecasts that Tropical Storm Gustav will strengthen as it enters the Gulf of Mexico, home to more than a fifth of U.S. production.
Gustav may become the first ``major'' hurricane in the Gulf since Hurricane Wilma in October 2005, AccuWeather.com said on its Web site. Gustav is packing winds of 60 miles (97 kilometers) per hour, the National Hurricane Center said in an advisory at 8 a.m. Miami time. Prices also rose as traders expected a report will show that U.S. gasoline supplies fell for a fifth week.
``Nervousness about the storm is moving prices higher,'' said Gene McGillian, an analyst at TFS Energy LLC in Stamford, Connecticut. ``It looks like the storm will be heading straight for New Orleans and will gather strength once it enters the Gulf and gets over than hot water.''
Crude oil for October delivery rose $2.92, or 2.5 percent, to $119.19 a barrel at 9:17 a.m. on the New York Mercantile Exchange. Prices are up 66 percent from a year ago.
Gasoline for September delivery climbed 13.03 cents, or 4.4 percent, to $3.10 a gallon in New York.
Gustav was about 90 miles west of the Haitian capital, Port- au-Prince, and forecast to head into the central Gulf of Mexico by Aug. 31, the hurricane center said.
The storm has the potential to grow to a Category 4 hurricane with winds of at least 131 miles per hour by the time it enters the Gulf, said Jim Rouiller, senior energy meteorologist with Planalytics Inc. in Wayne, Pennsylvania.
Katrina and Rita
In August and September 2005, U.S. crude oil and fuel production plunged and prices rose to records when hurricanes Katrina and Rita shut refineries and platforms as they struck the Gulf Coast. Katrina closed 95 percent of offshore output in the region. Almost 19 percent of U.S. refining capacity was idled because of damage and blackouts caused by the storms.
``Since Katrina there's a greater perception of our vulnerability, especially to a strong storm,'' said Michael Lynch, president of Strategic Energy & Economic Research in Winchester, Massachusetts. ``There's a potential of disruption throughout the industry.''
The hurricane center's track for Gustav takes it toward waters south of Louisiana, where U.S. offshore oil and gas platforms and pipelines are most concentrated.
``I think we are better prepared than before Katrina but we don't need a Katrina-level storm to cause a great deal of damage,'' Lynch said.
U.S. Inventories
Gasoline stockpiles probably fell 2.45 million barrels last week from 196.6 million barrels the week before, according to the median of 12 analyst responses in a Bloomberg News survey. The Energy Department is scheduled to release its weekly report today at 10:35 a.m. in Washington.
Inventories of crude oil probably rose 1.1 million barrels and supplies of distillate fuel, including heating oil and diesel, climbed 600,000 barrels, the survey showed.
The Organization of Petroleum Exporting Countries, producer of 42 percent of the world's oil, should maintain output when it meets in Vienna next month to help curb prices, International Energy Agency Executive Director Nobuo Tanaka said.
``We wish producers will maintain the current level of production,'' Tanaka said in an interview at an oil conference in Stavanger, Norway. ``The current price level is putting a burden on the global economy.''
Brent crude oil for October settlement rose $2.13, or 1.9 percent, to $116.76 a barrel on London's ICE Futures Europe exchange.
To contact the reporter on this story: Mark Shenk in New York at mshenk1@bloomberg.net.
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Aug. 27 (Bloomberg) -- Crude oil rose for a third day on forecasts that Tropical Storm Gustav will strengthen as it enters the Gulf of Mexico, home to more than a fifth of U.S. production.
Gustav may become the first ``major'' hurricane in the Gulf since Hurricane Wilma in October 2005, AccuWeather.com said on its Web site. Gustav is packing winds of 60 miles (97 kilometers) per hour, the National Hurricane Center said in an advisory at 8 a.m. Miami time. Prices also rose as traders expected a report will show that U.S. gasoline supplies fell for a fifth week.
``Nervousness about the storm is moving prices higher,'' said Gene McGillian, an analyst at TFS Energy LLC in Stamford, Connecticut. ``It looks like the storm will be heading straight for New Orleans and will gather strength once it enters the Gulf and gets over than hot water.''
Crude oil for October delivery rose $2.92, or 2.5 percent, to $119.19 a barrel at 9:17 a.m. on the New York Mercantile Exchange. Prices are up 66 percent from a year ago.
Gasoline for September delivery climbed 13.03 cents, or 4.4 percent, to $3.10 a gallon in New York.
Gustav was about 90 miles west of the Haitian capital, Port- au-Prince, and forecast to head into the central Gulf of Mexico by Aug. 31, the hurricane center said.
The storm has the potential to grow to a Category 4 hurricane with winds of at least 131 miles per hour by the time it enters the Gulf, said Jim Rouiller, senior energy meteorologist with Planalytics Inc. in Wayne, Pennsylvania.
Katrina and Rita
In August and September 2005, U.S. crude oil and fuel production plunged and prices rose to records when hurricanes Katrina and Rita shut refineries and platforms as they struck the Gulf Coast. Katrina closed 95 percent of offshore output in the region. Almost 19 percent of U.S. refining capacity was idled because of damage and blackouts caused by the storms.
``Since Katrina there's a greater perception of our vulnerability, especially to a strong storm,'' said Michael Lynch, president of Strategic Energy & Economic Research in Winchester, Massachusetts. ``There's a potential of disruption throughout the industry.''
The hurricane center's track for Gustav takes it toward waters south of Louisiana, where U.S. offshore oil and gas platforms and pipelines are most concentrated.
``I think we are better prepared than before Katrina but we don't need a Katrina-level storm to cause a great deal of damage,'' Lynch said.
U.S. Inventories
Gasoline stockpiles probably fell 2.45 million barrels last week from 196.6 million barrels the week before, according to the median of 12 analyst responses in a Bloomberg News survey. The Energy Department is scheduled to release its weekly report today at 10:35 a.m. in Washington.
Inventories of crude oil probably rose 1.1 million barrels and supplies of distillate fuel, including heating oil and diesel, climbed 600,000 barrels, the survey showed.
The Organization of Petroleum Exporting Countries, producer of 42 percent of the world's oil, should maintain output when it meets in Vienna next month to help curb prices, International Energy Agency Executive Director Nobuo Tanaka said.
``We wish producers will maintain the current level of production,'' Tanaka said in an interview at an oil conference in Stavanger, Norway. ``The current price level is putting a burden on the global economy.''
Brent crude oil for October settlement rose $2.13, or 1.9 percent, to $116.76 a barrel on London's ICE Futures Europe exchange.
To contact the reporter on this story: Mark Shenk in New York at mshenk1@bloomberg.net.
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Asian Stocks Gain, Led by China Mobile, Woodside After Earnings
By Chen Shiyin
Aug. 27 (Bloomberg) -- Asian stocks advanced after earnings at China Mobile Ltd. and Woodside Petroleum Ltd. beat estimates, bolstering optimism the region will weather slowing global growth.
China Mobile, the world's biggest phone company by users, rallied 3.5 percent in Hong Kong after posting record profit. Woodside, Australia's No. 2 oil and gas producer, jumped 3.4 percent as a new project and higher prices boosted income. China Cosco Holdings Co., Asia's largest shipping company by market value, climbed 8.2 percent after surging Chinese demand for raw materials helped earnings more than double.
``We're positive on commodities companies in the longer term as emerging-market usage of raw materials continues to grow,'' said Michael Foo, Singapore-based head of Asian portfolio management at Clariden Leu AG, which manages the equivalent of $126 billion in assets globally.
The MSCI Asia-Pacific Index gained 0.8 percent to 123.38 as of 8:00 p.m. in Tokyo, rebounding from a loss of as much as 0.2 percent. The regional measure has dropped 22 percent this year as the world's largest financial companies posted writedowns and credit losses of more than $500 billion, and inflation soared.
Japan's Nikkei 225 Stock Average slipped 0.2 percent to 12,752.96, paced by Mitsubishi Estate Co., after rival developer Sohken Homes Co. filed for bankruptcy. Hong Kong's Hang Seng Index jumped 1.9 percent, the region's largest advance. About half the stock indexes in Asia gained.
Ratings Downgrade
Macquarie Group Ltd. dropped to the lowest in almost four years as UBS AG downgraded Australia's biggest securities firm, saying the operating environment remains ``difficult.'' Hyundai Heavy Industries Co., the world's No. 1 shipbuilder, fell after saying it plans to bid for a stake in Daewoo Shipbuilding & Marine Engineering Co.
U.S. stocks advanced yesterday, rebounding from the biggest drop in a month. Fannie Mae and Freddie Mac, the largest U.S. mortgage-finance companies, jumped after Citigroup Inc. analysts said the companies have enough capital to last the year. Futures for the Standard & Poor's 500 Index slipped 0.1 percent today.
China Mobile gained HK$3.25 to HK$96.55, the biggest contributor to gains on MSCI's Asian index. The company said net income jumped 51 percent to a record 30.8 billion yuan after price cuts helped to attract subscribers, beating the median estimate of 28.3 billion yuan in a Bloomberg survey of analysts.
Woodside gained A$1.92 to A$58.42, its highest close since July 17. The company posted first-half profit of A$1.02 billion ($874 million) on record prices, topping the median forecast of A$939.3 million in a Bloomberg survey of analysts.
Cnooc, China Cosco
The shares also gained after crude oil for October delivery rose 1 percent to $116.27 a barrel in New York yesterday on forecasts showing that Hurricane Gustav may enter the Gulf of Mexico, home to more than a fifth of U.S. oil production. Futures were at $116.60 today.
Cnooc Ltd., China's No. 1 offshore oil company, rose 3.8 percent to HK$11.62 in Hong Kong. The company may say today first-half net income rose 52 percent to 22.1 billion yuan ($3.2 billion), according to the median estimate of five analysts surveyed by Bloomberg.
China Cosco climbed HK$1.20 to HK$15.78 in Hong Kong. Net income rose to 15.1 billion yuan ($2.2 billion) in the first half from 7.2 billion yuan a year earlier, the shipping line said.
Jiangxi Copper Co., China's biggest smelter of the metal, surged 9.5 percent to HK$12.64, its largest gain since Feb. 4. First-half profit rose 32 percent to 2.77 billion yuan ($404 million) because of a surge in byproduct prices, the company said.
Earnings Impacted
Macquarie plunged 9.6 percent to A$41.61, its lowest close since November 2004, after UBS cut its rating to ``neutral'' from ``buy,'' saying that slower stock and commodities trading and fewer investment bank deals will hurt earnings. The company also has ``less capital flexibility'' amid the global credit crunch, UBS said.
Also in Sydney, Westfield Group, the world's biggest shopping center owner by market value, slumped 3.4 percent to A$16.10 after a 35 percent drop in first-half profit.
``People are expecting another reasonably large round of write-offs to come out of the investment banks,'' said Angus Gluskie, who helps oversee $500 million at White Funds Management in Sydney. ``It's been a weak time for the property market. We're expecting to see continued downward revaluations on property assets over upcoming periods.''
Sohken Bankruptcy
Mitsubishi Estate, Japan's second-biggest property developer, dropped 2.1 percent to 2,375 yen. Sumitomo Realty & Development Co., the third-largest, fell 2.9 percent to 2,180 yen.
The deteriorating Japanese property market and difficulty refinancing debt have been exacerbated by failures of other developers, Sohken said yesterday after markets shut. The company filed for court protection from creditors with liabilities of 33.9 billion yen ($309 million). The shares plunged 12 percent to 14,100 yen.
Bankruptcies among Japanese property companies more than doubled to 60 in July from a year earlier, according to Tokyo Shoko Research Ltd.
In South Korea, Hyundai Heavy dropped 2.9 percent to 237,000 won after the world's largest shipbuilder said it plans to bid for a controlling stake in Daewoo Shipbuilding & Marine Engineering Co. It's competing with Posco, GS Group and Hanwha Group to acquire a 50.4 percent holding being sold by state-run Korea Development Bank and Korea Asset Management Corp.
``We question Hyundai Heavy's rationale in buying another shipbuilder at this point in the cycle amid its own capacity expansion,'' Sanjeev Rana, an analyst at Merrill Lynch & Co., wrote in a report today. Hyundai Heavy's bid ``is likely to intensify the bidding war,'' said Rana, who rates the shipbuilder's stock ``underperform.''
Daewoo Shipbuilding, the world's third-largest maker of ships, rose 1.9 percent to 35,350 won.
To contact the reporter for this story: Chen Shiyin in Singapore at schen37@bloomberg.net
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Russian Stocks Fall for Fourth Straight Day; Sberbank Slumps
By William Mauldin
Aug. 27 (Bloomberg) -- Russia's Micex Index fell for a fourth day on concern that the government's decision to recognize Georgia's breakaway regions will deepen a rift with the West and shake investor confidence.
OAO Sberbank, Russia's biggest bank, slid to the lowest in almost two years amid speculation losses in the value of its government ruble-denominated bonds will erode its capital.
The ruble-denominated Micex Index lost 1.1 percent to 1,278.72 at 2:22 p.m. in Moscow, after earlier climbing as much as 2.4 percent on a rally in oil prices. The dollar-denominated RTS Index dropped 0.7 percent to 1,567.53, extending its third- quarter decline to 32 percent.
Investors pushed the RTS to this quarter's steepest retreat among the world's biggest stock markets as Russia invaded Georgia, tumbling oil prices sent energy producers lower and the government probed steel producer OAO Mechel. Russia's decision to unilaterally recognize the independence of South Ossetia and Abkhazia yesterday drew condemnation from world leaders, with U.S. President George W. Bush asking Russian President Dmitry Medvedev to ``reconsider this irresponsible decision.''
UBS AG today cut its price estimates for 74 Russian stocks, citing Medvedev's move.
``The decision seems to risk further deterioration in the relationships between Russia and the West,'' UBS analysts Dmitry Vinogradov, Clemens Grafe and Bella Rabinovich wrote.
Moves in the RTS Index are growing more disconnected from oil as the equity benchmark suffers its worst monthly decline in eight years. Before August, the RTS posted an 11-fold gain this decade while crude climbed almost fivefold.
`Largely Negative'
``We could be in for a volatile period until there is a resolution to what's going on in Georgia,'' said Vlad Milev, an analyst at Metzler Payden, which oversees $1 billion in East European stocks. ``We are not trading on economic fundamentals or company earnings. We are trading on headline news, and the headlines have been largely negative since the events in Georgia started.''
The RTS has lost 15 percent since Russia invaded Georgia on Aug. 8, leaving it 37 percent below its record high of 2,487.92 in May.
Sberbank fell for a third day, sinking 1.91 rubles, or 3.4 percent, to 54.10 rubles, the lowest level since September 2006.
The bank holds $10 billion in ruble-denominated Russian government bonds, according to Natalia Orlova, banking analyst at Moscow-based Alfa Bank. The yield on Russia's benchmark 30- year 6.9 percent ruble bond has jumped 106 basis points to 8.81 percent since Aug. 7. Bond yields move inversely to prices.
``If they decide to sell a portion of their portfolio, these losses will become material,'' Orlova said by telephone.
To contact the reporter on this story: William Mauldin in Moscow at wmauldin1@bloomberg.net.
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Aug. 27 (Bloomberg) -- Russia's Micex Index fell for a fourth day on concern that the government's decision to recognize Georgia's breakaway regions will deepen a rift with the West and shake investor confidence.
OAO Sberbank, Russia's biggest bank, slid to the lowest in almost two years amid speculation losses in the value of its government ruble-denominated bonds will erode its capital.
The ruble-denominated Micex Index lost 1.1 percent to 1,278.72 at 2:22 p.m. in Moscow, after earlier climbing as much as 2.4 percent on a rally in oil prices. The dollar-denominated RTS Index dropped 0.7 percent to 1,567.53, extending its third- quarter decline to 32 percent.
Investors pushed the RTS to this quarter's steepest retreat among the world's biggest stock markets as Russia invaded Georgia, tumbling oil prices sent energy producers lower and the government probed steel producer OAO Mechel. Russia's decision to unilaterally recognize the independence of South Ossetia and Abkhazia yesterday drew condemnation from world leaders, with U.S. President George W. Bush asking Russian President Dmitry Medvedev to ``reconsider this irresponsible decision.''
UBS AG today cut its price estimates for 74 Russian stocks, citing Medvedev's move.
``The decision seems to risk further deterioration in the relationships between Russia and the West,'' UBS analysts Dmitry Vinogradov, Clemens Grafe and Bella Rabinovich wrote.
Moves in the RTS Index are growing more disconnected from oil as the equity benchmark suffers its worst monthly decline in eight years. Before August, the RTS posted an 11-fold gain this decade while crude climbed almost fivefold.
`Largely Negative'
``We could be in for a volatile period until there is a resolution to what's going on in Georgia,'' said Vlad Milev, an analyst at Metzler Payden, which oversees $1 billion in East European stocks. ``We are not trading on economic fundamentals or company earnings. We are trading on headline news, and the headlines have been largely negative since the events in Georgia started.''
The RTS has lost 15 percent since Russia invaded Georgia on Aug. 8, leaving it 37 percent below its record high of 2,487.92 in May.
Sberbank fell for a third day, sinking 1.91 rubles, or 3.4 percent, to 54.10 rubles, the lowest level since September 2006.
The bank holds $10 billion in ruble-denominated Russian government bonds, according to Natalia Orlova, banking analyst at Moscow-based Alfa Bank. The yield on Russia's benchmark 30- year 6.9 percent ruble bond has jumped 106 basis points to 8.81 percent since Aug. 7. Bond yields move inversely to prices.
``If they decide to sell a portion of their portfolio, these losses will become material,'' Orlova said by telephone.
To contact the reporter on this story: William Mauldin in Moscow at wmauldin1@bloomberg.net.
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U.K. Stocks Rise on U.S. Durable Goods; Energy Shares Advance
By Sarah Jones and Michael Patterson
Aug. 27 (Bloomberg) -- U.K. stocks advanced, erasing early declines, after orders for U.S. durable goods unexpectedly climbed in July and rising commodity prices sent energy and mining companies higher.
The FTSE 100 Index rallied after the U.S. government said bookings of goods meant to last several years gained 1.3 percent. BP Plc and BG Group Plc led energy companies higher as crude and natural gas prices increased. Anglo American Plc, the fourth- biggest diversified mining company, rose 1.8 percent as copper and gold advanced.
The FTSE 100 advanced 22.7, or 0.4 percent, to 5,493.4 at 2:02 p.m. in London, having earlier declined as much as 0.7 percent. The FTSE All-Share Index rose 0.3 percent, while Ireland's ISEQ Index slipped 0.4 percent.
Economists projected durable goods orders would be unchanged after a previously reported 0.8 percent increase in June, according to the median of 76 forecast in a Bloomberg News survey. Excluding transportation equipment, orders climbed 0.7 percent after a 2.4 percent increase a month earlier.
BP, Europe's second-largest oil company, added 1.4 percent to 523.5 pence and BG, the U.K.'s third-biggest oil and natural- gas producer, rose 1.7 percent to 1,184 pence.
Crude Oil rose for a third day on forecasts Tropical Storm Gustav will strengthen as it enters the Gulf of Mexico, home to 26 percent of U.S. production.
Anglo American added 1.8 percent to 2,850 pence. Copper, lead nickel, tin and gold advanced in London.
To contact the reporters on this story: Sarah Jones in London at sjones35@bloomberg.net; Michael Patterson in London at mpatterson10@bloomberg.net.
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Aug. 27 (Bloomberg) -- U.K. stocks advanced, erasing early declines, after orders for U.S. durable goods unexpectedly climbed in July and rising commodity prices sent energy and mining companies higher.
The FTSE 100 Index rallied after the U.S. government said bookings of goods meant to last several years gained 1.3 percent. BP Plc and BG Group Plc led energy companies higher as crude and natural gas prices increased. Anglo American Plc, the fourth- biggest diversified mining company, rose 1.8 percent as copper and gold advanced.
The FTSE 100 advanced 22.7, or 0.4 percent, to 5,493.4 at 2:02 p.m. in London, having earlier declined as much as 0.7 percent. The FTSE All-Share Index rose 0.3 percent, while Ireland's ISEQ Index slipped 0.4 percent.
Economists projected durable goods orders would be unchanged after a previously reported 0.8 percent increase in June, according to the median of 76 forecast in a Bloomberg News survey. Excluding transportation equipment, orders climbed 0.7 percent after a 2.4 percent increase a month earlier.
BP, Europe's second-largest oil company, added 1.4 percent to 523.5 pence and BG, the U.K.'s third-biggest oil and natural- gas producer, rose 1.7 percent to 1,184 pence.
Crude Oil rose for a third day on forecasts Tropical Storm Gustav will strengthen as it enters the Gulf of Mexico, home to 26 percent of U.S. production.
Anglo American added 1.8 percent to 2,850 pence. Copper, lead nickel, tin and gold advanced in London.
To contact the reporters on this story: Sarah Jones in London at sjones35@bloomberg.net; Michael Patterson in London at mpatterson10@bloomberg.net.
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European Stocks Fall, Led by Banks, Airlines; Natixis Declines
By Adria Cimino
Aug. 27 (Bloomberg) -- European stocks fell for a second day this week on speculation bank losses will spread, while higher oil prices hurt airlines and carmakers.
Natixis SA slumped 4.9 percent after La Tribune said the French bank may sell shares at a discount in its 3.7 billion- euro ($5.4 billion) rights offer to replenish capital. Air France-KLM Group, Europe's biggest airline, declined 2.8 percent, and Daimler AG lost 1.9 percent as crude rose for a third day. Baloise Holding AG, Switzerland's third-biggest insurer, slipped 8.4 percent after profit missed analysts' estimates.
The Dow Jones Stoxx 600 Index slumped 0.3 percent to 281.98 at 2:55 p.m. in London. The index has fallen 23 percent this year as rising oil prices and more than $500 billion in credit- related losses by the world's largest banks threatened global economic growth, while accelerating inflation keeps central banks from cutting borrowing costs.
``It's too early to say we've seen stabilization'' in the banking industry, Lucy MacDonald, London-based chief investment officer of global equities at RCM Ltd., which has $100 billion under management, said in a Bloomberg Television interview. ``The effects are still rumbling through the system.''
European Central Bank council member Axel Weber said there's no scope for interest-rate cuts and the bank may even need to raise borrowing costs again once the economy emerges from its slump. The ECB raised its benchmark rate by a quarter point to 4.25 percent in July.
Taylor Wimpey
Taylor Wimpey Plc, the U.K.'s largest homebuilder, lost 4.3 percent after booking a first-half loss and saying it's still in talks with lenders to avoid breaching loan agreements.
Stocks pared some of their earlier losses after a report showed orders for U.S. durable goods unexpectedly increased in July. ABB Ltd., the world's largest builder of power networks, and BAE Systems Plc rallied after the figures were released.
``This gives a bit of air to the market,'' said Vafa Ahmadi, a fund manager at CPR Asset Management in Paris, which oversees the equivalent of $39 billion.
National benchmark indexes fell in 12 of the 18 western European markets. Germany's DAX sank 0.6 percent and France's CAC 40 lost 0.4 percent. The U.K.'s FTSE 100 added 0.4 percent.
Natixis sank 4.9 percent to 5.69 euros. The bank may offer new shares at a discount of between 30 percent and 40 percent in its rights offer, La Tribune reported, citing an unidentified person. The discount may even be higher to ensure the success of the offer, which may begin next week, the French daily said.
A Natixis spokeswoman declined to comment on the report.
UBS, Credit Suisse
UBS AG, the European bank hardest hit by the subprime contagion, sank 1.8 percent to 22.72 francs. Credit Suisse Group AG, the second-biggest Swiss bank, fell 1.5 percent to 48.56 francs.
The U.S. Federal Deposit Insurance Corp., which provides cover for the nation's bank deposits, may have to tap Treasury Department funds to carry it through an anticipated wave of bank failures, the Wall Street Journal reported, citing chairman Sheila Bair. Bair told the Journal the borrowing wouldn't be to cover any FDIC losses. Instead it would provide short-term liquidity to cover bank failures, the newspaper said.
The FDIC yesterday said its ``problem list'' of banks increased 30 percent in the second quarter to 117 banks, the highest in five years, as more commercial real-estate loans were overdue. Nine banks have failed this year, including California-based mortgage lender IndyMac Bancorp Inc., which the FDIC is running as a successor institution, IndyMac Federal Bank FSB.
Earnings Outlook
The Stoxx 600 is little changed in August even after rebounding 5.3 percent from its low of the year on July 15. All 18 of the main industry groups in the index have declined this year, led by a 34 percent tumble in bank shares.
Analysts estimate earnings among companies in the Stoxx 600 will decline 2 percent on average in 2008, according to weekly Bloomberg data. That compares with 11 percent growth forecast at the beginning of the year. Profits at financial companies will slump 26 percent, the data show.
``What's most on investors' minds is the level of earnings and growth,'' Salah Seddik, a fund manager at Richelieu Finance in Paris, which oversees $6.2 billion, said in a television interview. ``We could have disappointments in the months ahead.''
Air France
Air France lost 2.8 percent to 15.94 euros. Daimler, the world's second-biggest maker of luxury cars, fell 1.9 percent to 39.93 euros.
Crude oil rose in New York for a third day on forecasts Tropical Storm Gustav will strengthen as it enters the Gulf of Mexico, home to 26 percent of U.S. production. The contract for October delivery rose as much as 2.9 percent to $119.63 on the New York Mercantile Exchange. Oil gained 1 percent to $116.27 yesterday.
Baloise fell 8.4 percent to 92.3 francs. Profit dropped 42 percent in the first half to 268.2 million Swiss francs ($244.9 million) after income from its life business and investments fell. That missed analysts' estimates.
Taylor Wimpey tumbled 4.3 percent to 49.75 pence. The company booked a first-half loss of 1.42 billion pounds ($2.62 billion) after writing down the value of land.
Taylor Nelson Sofres Plc slipped 1.1 percent to 265.75 pence. GfK AG, Germany's largest market researcher, abandoned a bid for Taylor Nelson after failing to raise enough financing to counter a 1.1 billion-pound ($2 billion) hostile offer by WPP Plc.
Scor SE climbed 1.7 percent to 15.78 euros. France's biggest reinsurer said first-half net income rose 24 percent to 225 million euros, surpassing analysts' estimates, as it used deferred tax assets to offset costs related to the acquisition of Switzerland's Converium Holding AG.
Irish Life & Permanent Plc jumped 6.9 percent to 5.80 euros. Ireland's largest mortgage lender said it has no plans to raise capital from investors even after first-half profit fell 88 percent, hurt by higher borrowing costs and the country's deteriorating housing market.
To contact the reporter on this story: Adria Cimino in Paris at acimino1@bloomberg.net.
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Aug. 27 (Bloomberg) -- European stocks fell for a second day this week on speculation bank losses will spread, while higher oil prices hurt airlines and carmakers.
Natixis SA slumped 4.9 percent after La Tribune said the French bank may sell shares at a discount in its 3.7 billion- euro ($5.4 billion) rights offer to replenish capital. Air France-KLM Group, Europe's biggest airline, declined 2.8 percent, and Daimler AG lost 1.9 percent as crude rose for a third day. Baloise Holding AG, Switzerland's third-biggest insurer, slipped 8.4 percent after profit missed analysts' estimates.
The Dow Jones Stoxx 600 Index slumped 0.3 percent to 281.98 at 2:55 p.m. in London. The index has fallen 23 percent this year as rising oil prices and more than $500 billion in credit- related losses by the world's largest banks threatened global economic growth, while accelerating inflation keeps central banks from cutting borrowing costs.
``It's too early to say we've seen stabilization'' in the banking industry, Lucy MacDonald, London-based chief investment officer of global equities at RCM Ltd., which has $100 billion under management, said in a Bloomberg Television interview. ``The effects are still rumbling through the system.''
European Central Bank council member Axel Weber said there's no scope for interest-rate cuts and the bank may even need to raise borrowing costs again once the economy emerges from its slump. The ECB raised its benchmark rate by a quarter point to 4.25 percent in July.
Taylor Wimpey
Taylor Wimpey Plc, the U.K.'s largest homebuilder, lost 4.3 percent after booking a first-half loss and saying it's still in talks with lenders to avoid breaching loan agreements.
Stocks pared some of their earlier losses after a report showed orders for U.S. durable goods unexpectedly increased in July. ABB Ltd., the world's largest builder of power networks, and BAE Systems Plc rallied after the figures were released.
``This gives a bit of air to the market,'' said Vafa Ahmadi, a fund manager at CPR Asset Management in Paris, which oversees the equivalent of $39 billion.
National benchmark indexes fell in 12 of the 18 western European markets. Germany's DAX sank 0.6 percent and France's CAC 40 lost 0.4 percent. The U.K.'s FTSE 100 added 0.4 percent.
Natixis sank 4.9 percent to 5.69 euros. The bank may offer new shares at a discount of between 30 percent and 40 percent in its rights offer, La Tribune reported, citing an unidentified person. The discount may even be higher to ensure the success of the offer, which may begin next week, the French daily said.
A Natixis spokeswoman declined to comment on the report.
UBS, Credit Suisse
UBS AG, the European bank hardest hit by the subprime contagion, sank 1.8 percent to 22.72 francs. Credit Suisse Group AG, the second-biggest Swiss bank, fell 1.5 percent to 48.56 francs.
The U.S. Federal Deposit Insurance Corp., which provides cover for the nation's bank deposits, may have to tap Treasury Department funds to carry it through an anticipated wave of bank failures, the Wall Street Journal reported, citing chairman Sheila Bair. Bair told the Journal the borrowing wouldn't be to cover any FDIC losses. Instead it would provide short-term liquidity to cover bank failures, the newspaper said.
The FDIC yesterday said its ``problem list'' of banks increased 30 percent in the second quarter to 117 banks, the highest in five years, as more commercial real-estate loans were overdue. Nine banks have failed this year, including California-based mortgage lender IndyMac Bancorp Inc., which the FDIC is running as a successor institution, IndyMac Federal Bank FSB.
Earnings Outlook
The Stoxx 600 is little changed in August even after rebounding 5.3 percent from its low of the year on July 15. All 18 of the main industry groups in the index have declined this year, led by a 34 percent tumble in bank shares.
Analysts estimate earnings among companies in the Stoxx 600 will decline 2 percent on average in 2008, according to weekly Bloomberg data. That compares with 11 percent growth forecast at the beginning of the year. Profits at financial companies will slump 26 percent, the data show.
``What's most on investors' minds is the level of earnings and growth,'' Salah Seddik, a fund manager at Richelieu Finance in Paris, which oversees $6.2 billion, said in a television interview. ``We could have disappointments in the months ahead.''
Air France
Air France lost 2.8 percent to 15.94 euros. Daimler, the world's second-biggest maker of luxury cars, fell 1.9 percent to 39.93 euros.
Crude oil rose in New York for a third day on forecasts Tropical Storm Gustav will strengthen as it enters the Gulf of Mexico, home to 26 percent of U.S. production. The contract for October delivery rose as much as 2.9 percent to $119.63 on the New York Mercantile Exchange. Oil gained 1 percent to $116.27 yesterday.
Baloise fell 8.4 percent to 92.3 francs. Profit dropped 42 percent in the first half to 268.2 million Swiss francs ($244.9 million) after income from its life business and investments fell. That missed analysts' estimates.
Taylor Wimpey tumbled 4.3 percent to 49.75 pence. The company booked a first-half loss of 1.42 billion pounds ($2.62 billion) after writing down the value of land.
Taylor Nelson Sofres Plc slipped 1.1 percent to 265.75 pence. GfK AG, Germany's largest market researcher, abandoned a bid for Taylor Nelson after failing to raise enough financing to counter a 1.1 billion-pound ($2 billion) hostile offer by WPP Plc.
Scor SE climbed 1.7 percent to 15.78 euros. France's biggest reinsurer said first-half net income rose 24 percent to 225 million euros, surpassing analysts' estimates, as it used deferred tax assets to offset costs related to the acquisition of Switzerland's Converium Holding AG.
Irish Life & Permanent Plc jumped 6.9 percent to 5.80 euros. Ireland's largest mortgage lender said it has no plans to raise capital from investors even after first-half profit fell 88 percent, hurt by higher borrowing costs and the country's deteriorating housing market.
To contact the reporter on this story: Adria Cimino in Paris at acimino1@bloomberg.net.
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Most U.S. Stocks Gain on Durable Goods, Rally in Energy Shares
By Eric Martin
Aug. 27 (Bloomberg) -- Most U.S. stocks rose for a second day after orders for durable goods unexpectedly advanced in July and a jump in oil prices boosted energy shares.
Alcoa Inc. and AT&T Inc. each climbed as much as 1 percent after the Commerce Department report bolstered expectations that the economy is recovering. Fannie Mae and Freddie Mac rallied more than 9 percent on a Citigroup analyst's report that new investments will boost profits. The advance in crude pushed Chevron Corp. and Exxon Mobil Corp. up, while sending Home Depot Inc. and General Motors Corp. down by about 1 percent each.
About 11 stocks advanced for every 10 that fell on the New York Stock Exchange. The Standard & Poor's 500 Index slipped 0.71 point, or 0.1 percent, to 1,270.8 at 9:59 a.m. in New York. The Dow Jones Industrial Average lost 25.16 to 11,387.71. The Nasdaq Composite Index slipped 1.41 to 2,360.56.
``As long as businesses are optimistic, we have a good chance of pulling out of this weak period in the economy in fairly short order,'' said Peter Jankovskis, who helps manage $1.5 billion at OakBrook Investments in Lisle, Illinois. The durable goods data ``was a very strong report, and the market has acted appropriately.''
The 1.3 percent gain in durable goods orders defied economist forecasts for an unchanged reading in July. Stock futures fell before the Commerce Department report as a third day of gains in oil spurred concern that a rebound in crude from a more than 20 percent tumble will threaten profits at consumer, transportation and technology companies.
Fannie, Freddie
Fannie Mae added 55 cents to $6.17, while Freddie Mac gained 56 cents to $4.54. The mortgage-finance companies may get the biggest profits on new investments since at least 1998. The current-coupon mortgage bonds Fannie and Freddie buy yield about 40 basis points, or 0.40 percentage point, more than what they pay to borrow by selling benchmark bonds, Citigroup said. The difference exceeded 20 basis points only twice in the 10 years through 2007 -- in 1998 and 2003.
Merrill Lynch & Co. gained 40 cents to $24.50. Temasek Holdings Pte, Singapore's $130 billion sovereign wealth fund, said it has ``great confidence'' in Merrill's Chief Executive Officer John Thain and plans to raise its stake.
Temasek, the U.S. bank's biggest shareholder, received U.S. antitrust approval yesterday to raise its stake to between 13 percent and 14 percent.
Goldman Sachs Group Inc. dropped $1.91, or 1.2 percent, to $154. Morgan Stanley analyst Patrick Pinschmidt cut his estimate for Goldman's third-quarter earnings to $1.65 a share from his earlier $3 estimate. The New York-based bank may mark down so- called principal investments by $525 million, he said in a note to clients.
Oil Gains
Exxon rose 49 cents to $80.44, while Chevron climbed 74 cents to $86.53. Crude oil rose for a third day on forecasts Tropical Storm Gustav will strengthen as it enters the Gulf of Mexico, home to 26 percent of U.S. production.
Amylin Pharmaceuticals Inc. lost $3.59, or 13 percent, to $23.65 after four more patients taking the diabetes drug Byetta died from pancreatitis. Byetta, available in the U.S. since June 2005, is Amylin's leading product, with global sales that rose 25 percent in the second quarter to $194.7 million from a year earlier.
No definite relationship between Byetta and the additional deaths has been proved, and the Food and Drug Administration was aware of them when it made its announcement last week, Amylin Chief Executive Officer Dan Bradbury said by telephone yesterday.
Motorola Inc., the largest U.S. mobile-phone maker, slipped 15 cents to $9.41 after Gartner Inc. said the company's share of the market declined to 10 percent from 14.5 percent in the second quarter.
August Returns
The S&P 500 is little changed in August after falling in June and July. The benchmark index for U.S. equities has posted only two monthly gains since reaching a record in October and is down more than 13 percent this year.
The S&P 500 Consumer Discretionary Index, which includes retailers and hotel and restaurant chains, has rallied 5.3 percent this month for the best gain among 10 industries as of the close of trading yesterday.
The group was helped by a 21 percent retreat in oil prices from a July record. Limited Brands Inc., owner of the Victoria's Secret lingerie chain, has led the advance with a 23 percent gain after posting profit that topped analysts' estimates and predicting full-year earnings will exceed its earlier projections.
An index of technology shares in the S&P 500 has had the second-best return in August with a 2.9 percent gain, led by a 41 percent jump in Advanced Micro Devices Inc.
Banks' August Slump
Banks, brokerages and insurers have fared the worst in August, with the S&P 500 Financials Index down 6.6 on concern that a government bailout of Fannie Mae and Freddie Mac will wipe out shareholders. The two largest U.S. mortgage-finance companies fell more than 50 percent each in August through yesterday.
The U.S. Federal Deposit Insurance Corp., which provides cover for the nation's bank deposits, may have to tap Treasury Department funds to carry it through an anticipated wave of bank failures, the Wall Street Journal reported, citing chairman Sheila Bair. Bair told the Journal the borrowing wouldn't be to cover any FDIC losses, instead it would provide short-term liquidity to cover bank failures.
The FDIC said yesterday its ``problem list'' of banks increased 30 percent in the second quarter to 117 banks, the highest total in five years, as more commercial real-estate loans were overdue.
U.S. stocks advanced yesterday, rebounding from the biggest drop in a month, as higher oil prices boosted energy shares and analysts said Fannie Mae and Freddie Mac have enough capital to last the year.
For Related News:
To contact the reporter on this story: Eric Martin in New York at emartin21@bloomberg.net.
Read more...
Aug. 27 (Bloomberg) -- Most U.S. stocks rose for a second day after orders for durable goods unexpectedly advanced in July and a jump in oil prices boosted energy shares.
Alcoa Inc. and AT&T Inc. each climbed as much as 1 percent after the Commerce Department report bolstered expectations that the economy is recovering. Fannie Mae and Freddie Mac rallied more than 9 percent on a Citigroup analyst's report that new investments will boost profits. The advance in crude pushed Chevron Corp. and Exxon Mobil Corp. up, while sending Home Depot Inc. and General Motors Corp. down by about 1 percent each.
About 11 stocks advanced for every 10 that fell on the New York Stock Exchange. The Standard & Poor's 500 Index slipped 0.71 point, or 0.1 percent, to 1,270.8 at 9:59 a.m. in New York. The Dow Jones Industrial Average lost 25.16 to 11,387.71. The Nasdaq Composite Index slipped 1.41 to 2,360.56.
``As long as businesses are optimistic, we have a good chance of pulling out of this weak period in the economy in fairly short order,'' said Peter Jankovskis, who helps manage $1.5 billion at OakBrook Investments in Lisle, Illinois. The durable goods data ``was a very strong report, and the market has acted appropriately.''
The 1.3 percent gain in durable goods orders defied economist forecasts for an unchanged reading in July. Stock futures fell before the Commerce Department report as a third day of gains in oil spurred concern that a rebound in crude from a more than 20 percent tumble will threaten profits at consumer, transportation and technology companies.
Fannie, Freddie
Fannie Mae added 55 cents to $6.17, while Freddie Mac gained 56 cents to $4.54. The mortgage-finance companies may get the biggest profits on new investments since at least 1998. The current-coupon mortgage bonds Fannie and Freddie buy yield about 40 basis points, or 0.40 percentage point, more than what they pay to borrow by selling benchmark bonds, Citigroup said. The difference exceeded 20 basis points only twice in the 10 years through 2007 -- in 1998 and 2003.
Merrill Lynch & Co. gained 40 cents to $24.50. Temasek Holdings Pte, Singapore's $130 billion sovereign wealth fund, said it has ``great confidence'' in Merrill's Chief Executive Officer John Thain and plans to raise its stake.
Temasek, the U.S. bank's biggest shareholder, received U.S. antitrust approval yesterday to raise its stake to between 13 percent and 14 percent.
Goldman Sachs Group Inc. dropped $1.91, or 1.2 percent, to $154. Morgan Stanley analyst Patrick Pinschmidt cut his estimate for Goldman's third-quarter earnings to $1.65 a share from his earlier $3 estimate. The New York-based bank may mark down so- called principal investments by $525 million, he said in a note to clients.
Oil Gains
Exxon rose 49 cents to $80.44, while Chevron climbed 74 cents to $86.53. Crude oil rose for a third day on forecasts Tropical Storm Gustav will strengthen as it enters the Gulf of Mexico, home to 26 percent of U.S. production.
Amylin Pharmaceuticals Inc. lost $3.59, or 13 percent, to $23.65 after four more patients taking the diabetes drug Byetta died from pancreatitis. Byetta, available in the U.S. since June 2005, is Amylin's leading product, with global sales that rose 25 percent in the second quarter to $194.7 million from a year earlier.
No definite relationship between Byetta and the additional deaths has been proved, and the Food and Drug Administration was aware of them when it made its announcement last week, Amylin Chief Executive Officer Dan Bradbury said by telephone yesterday.
Motorola Inc., the largest U.S. mobile-phone maker, slipped 15 cents to $9.41 after Gartner Inc. said the company's share of the market declined to 10 percent from 14.5 percent in the second quarter.
August Returns
The S&P 500 is little changed in August after falling in June and July. The benchmark index for U.S. equities has posted only two monthly gains since reaching a record in October and is down more than 13 percent this year.
The S&P 500 Consumer Discretionary Index, which includes retailers and hotel and restaurant chains, has rallied 5.3 percent this month for the best gain among 10 industries as of the close of trading yesterday.
The group was helped by a 21 percent retreat in oil prices from a July record. Limited Brands Inc., owner of the Victoria's Secret lingerie chain, has led the advance with a 23 percent gain after posting profit that topped analysts' estimates and predicting full-year earnings will exceed its earlier projections.
An index of technology shares in the S&P 500 has had the second-best return in August with a 2.9 percent gain, led by a 41 percent jump in Advanced Micro Devices Inc.
Banks' August Slump
Banks, brokerages and insurers have fared the worst in August, with the S&P 500 Financials Index down 6.6 on concern that a government bailout of Fannie Mae and Freddie Mac will wipe out shareholders. The two largest U.S. mortgage-finance companies fell more than 50 percent each in August through yesterday.
The U.S. Federal Deposit Insurance Corp., which provides cover for the nation's bank deposits, may have to tap Treasury Department funds to carry it through an anticipated wave of bank failures, the Wall Street Journal reported, citing chairman Sheila Bair. Bair told the Journal the borrowing wouldn't be to cover any FDIC losses, instead it would provide short-term liquidity to cover bank failures.
The FDIC said yesterday its ``problem list'' of banks increased 30 percent in the second quarter to 117 banks, the highest total in five years, as more commercial real-estate loans were overdue.
U.S. stocks advanced yesterday, rebounding from the biggest drop in a month, as higher oil prices boosted energy shares and analysts said Fannie Mae and Freddie Mac have enough capital to last the year.
For Related News:
To contact the reporter on this story: Eric Martin in New York at emartin21@bloomberg.net.
Read more...
Canadian Natural, Teck Cominco May Rise; CIBC May Decline
By John Kipphoff
Aug. 27 (Bloomberg) -- Canadian Natural Resources Ltd. and Teck Cominco Ltd. may gain, based on bids on the Toronto Stock Exchange, as higher oil and copper prices and increased U.S. durable-goods orders spur speculation that demand for commodities will remain strong.
Canadian Imperial Bank of Commerce may decline, bids indicated, after the country's third largest lender reported a 91 percent drop in profit, and missed an analyst's estimates, because of writedowns tied to the U.S. mortgage market,
The Standard & Poor's/TSX Composite Index added 0.1 percent to 13,299.07 yesterday in Toronto. Canada's equity benchmark, which derives three-quarters of its value from financial, materials and energy stocks, has fallen 12 percent below its June 18 peak as commodity prices slumped on concern lenders' credit losses will slow global growth and demand for resources.
Crude oil rose more than $2 a barrel in electronic trading in New York, on forecasts Tropical Storm Gustav will strengthen as it enters the Gulf of Mexico, home to 26 percent of U.S. production. Natural gas also gained. Copper, gold and soybeans prices advanced, in part because the U.S. dollar slipped, increasing the investment appeal of commodities.
Canadian Natural, whose Horizon oil-sands project is scheduled to begin production this year, may gain C$2.20 to C489.75, bids already submitted in Toronto showed. Suncor Energy Inc., the world's second-largest producer of oil from the tar sands, may advance 75 cents to C$59.90, bids indicated.
U.S. orders for goods meant to last several years unexpectedly increased in July, gaining 1.3 percent, the Commerce Department said. The increase indicates growing foreign demand is helping companies weather a slump in domestic consumer spending.
Teck Cominco, Canada's largest diversified mining company. May add C$1.04 to C$42.43, bids suggested. Barrick Gold Corp., the biggest bullion producer, may rise C$1 to C$37. Potash Corp. of Saskatchewan Inc., the largest maker of crop nutrients, may gain C$2.20 to C$189.91, based on bids.
Canadian Imperial Bank of Commerce may retreat 36 cents to C$56.70, bids showed. The country's fifth-largest bank said third-quarter profit fell to C$71 million ($68 million), or 11 cents a share, from C$835 million.
Canadian Imperial had C$885 million in pretax writedowns linked to the U.S. mortgage market, adding to C$6.66 billion in debt-related costs since the third quarter of 2007.
The bank earned C$1.65 a share before a number of one-time items, said National Bank Financial analyst Robert Sedran, missing his per-share estimate of C$1.72.
U.S. stock-index futures were little changed, erasing an earlier retreat, on the durable goods report.
To contact the reporter on this story: John Kipphoff in Montreal at jkipphoff@bloomberg.net.
Read more...
Aug. 27 (Bloomberg) -- Canadian Natural Resources Ltd. and Teck Cominco Ltd. may gain, based on bids on the Toronto Stock Exchange, as higher oil and copper prices and increased U.S. durable-goods orders spur speculation that demand for commodities will remain strong.
Canadian Imperial Bank of Commerce may decline, bids indicated, after the country's third largest lender reported a 91 percent drop in profit, and missed an analyst's estimates, because of writedowns tied to the U.S. mortgage market,
The Standard & Poor's/TSX Composite Index added 0.1 percent to 13,299.07 yesterday in Toronto. Canada's equity benchmark, which derives three-quarters of its value from financial, materials and energy stocks, has fallen 12 percent below its June 18 peak as commodity prices slumped on concern lenders' credit losses will slow global growth and demand for resources.
Crude oil rose more than $2 a barrel in electronic trading in New York, on forecasts Tropical Storm Gustav will strengthen as it enters the Gulf of Mexico, home to 26 percent of U.S. production. Natural gas also gained. Copper, gold and soybeans prices advanced, in part because the U.S. dollar slipped, increasing the investment appeal of commodities.
Canadian Natural, whose Horizon oil-sands project is scheduled to begin production this year, may gain C$2.20 to C489.75, bids already submitted in Toronto showed. Suncor Energy Inc., the world's second-largest producer of oil from the tar sands, may advance 75 cents to C$59.90, bids indicated.
U.S. orders for goods meant to last several years unexpectedly increased in July, gaining 1.3 percent, the Commerce Department said. The increase indicates growing foreign demand is helping companies weather a slump in domestic consumer spending.
Teck Cominco, Canada's largest diversified mining company. May add C$1.04 to C$42.43, bids suggested. Barrick Gold Corp., the biggest bullion producer, may rise C$1 to C$37. Potash Corp. of Saskatchewan Inc., the largest maker of crop nutrients, may gain C$2.20 to C$189.91, based on bids.
Canadian Imperial Bank of Commerce may retreat 36 cents to C$56.70, bids showed. The country's fifth-largest bank said third-quarter profit fell to C$71 million ($68 million), or 11 cents a share, from C$835 million.
Canadian Imperial had C$885 million in pretax writedowns linked to the U.S. mortgage market, adding to C$6.66 billion in debt-related costs since the third quarter of 2007.
The bank earned C$1.65 a share before a number of one-time items, said National Bank Financial analyst Robert Sedran, missing his per-share estimate of C$1.72.
U.S. stock-index futures were little changed, erasing an earlier retreat, on the durable goods report.
To contact the reporter on this story: John Kipphoff in Montreal at jkipphoff@bloomberg.net.
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Aflac, Amylin, J. Crew, Mattel, Merrill: U.S. Equity Preview
By Jeff Kearns
Aug. 27 (Bloomberg) -- The following companies may have unusual price changes in U.S. markets. Stock symbols are in parentheses after company names, and prices are as of 8 a.m. in New York, unless stated otherwise.
Aflac Inc. (AFL US): The world's largest seller of supplemental health insurance said Goldman Sachs Group Inc. agreed to help facilitate a buyback of $825 million of its common shares. The shares climbed 1.5 percent to $54.38 in extended trading.
AMR Corp. (AMR US) fell 4.3 percent to $9.20. Citigroup Inc. recommended that investors sell shares of the parent of American Airlines, the world's largest carrier, and said ``significant risks remain'' for U.S. carriers.
UAL Corp. (UAUA US) dropped 5.8 percent to $10.50. Delta Air Lines Inc. (DAL US) slid 3.5 percent to $7.66.
Amylin Pharmaceuticals Inc. (AMLN US) lost 11 percent to $3.04. Amylin and Eli Lilly & Co. (LLY US) said in an e-mailed statement yesterday that four more people taking the diabetes drug Byetta died, bringing the toll to six.
J. Crew Group Inc. (JCG US) slumped 11 percent to $23.76. The clothing retailer run by former Gap Inc. Chief Executive Officer Millard Drexler predicted annual earnings lower than a previous projection on ``softness'' in its stores because of the economy and extra costs to fix Internet and catalog shipping systems, which disrupted sales.
Mattel Inc. (MAT US): The world's biggest toymaker was awarded $100 million in copyright-infringement and contract damages for its claims that MGA Entertainment Inc.'s Bratz dolls are based on the work of a former Mattel designer. Mattel has sought as much as $1 billion in damages. The shares declined 3.7 percent to $19.50 in extended trading yesterday.
Merrill Lynch & Co. (MER US) rose 1.7 percent to $24.50. Temasek Holdings Pte, Singapore's $130 billion sovereign wealth fund and Merrill's biggest shareholder, said it plans to raise its stake in the world's biggest brokerage.
Southwest Airlines Co. (LUV US): The largest U.S. low-fare carrier said it won't meet an Aug. 29 deadline to pay a record $10.2 million fine to the Federal Aviation Administration for flying jetliners without required inspections. The stock slipped 0.2 percent to $14.77 in regular trading yesterday.
Waste Management Inc. (WMI US): The U.S. trash hauler said it received a second request from the U.S. Justice Department's antitrust division for information regarding its proposed acquisition of Republic Services Inc. Waste Management shares increased 0.3 percent to $34.94 in regular trading yesterday.
To contact the reporter on this story: Jeff Kearns in New York at jkearns3@bloomberg.net.
Read more...
Aug. 27 (Bloomberg) -- The following companies may have unusual price changes in U.S. markets. Stock symbols are in parentheses after company names, and prices are as of 8 a.m. in New York, unless stated otherwise.
Aflac Inc. (AFL US): The world's largest seller of supplemental health insurance said Goldman Sachs Group Inc. agreed to help facilitate a buyback of $825 million of its common shares. The shares climbed 1.5 percent to $54.38 in extended trading.
AMR Corp. (AMR US) fell 4.3 percent to $9.20. Citigroup Inc. recommended that investors sell shares of the parent of American Airlines, the world's largest carrier, and said ``significant risks remain'' for U.S. carriers.
UAL Corp. (UAUA US) dropped 5.8 percent to $10.50. Delta Air Lines Inc. (DAL US) slid 3.5 percent to $7.66.
Amylin Pharmaceuticals Inc. (AMLN US) lost 11 percent to $3.04. Amylin and Eli Lilly & Co. (LLY US) said in an e-mailed statement yesterday that four more people taking the diabetes drug Byetta died, bringing the toll to six.
J. Crew Group Inc. (JCG US) slumped 11 percent to $23.76. The clothing retailer run by former Gap Inc. Chief Executive Officer Millard Drexler predicted annual earnings lower than a previous projection on ``softness'' in its stores because of the economy and extra costs to fix Internet and catalog shipping systems, which disrupted sales.
Mattel Inc. (MAT US): The world's biggest toymaker was awarded $100 million in copyright-infringement and contract damages for its claims that MGA Entertainment Inc.'s Bratz dolls are based on the work of a former Mattel designer. Mattel has sought as much as $1 billion in damages. The shares declined 3.7 percent to $19.50 in extended trading yesterday.
Merrill Lynch & Co. (MER US) rose 1.7 percent to $24.50. Temasek Holdings Pte, Singapore's $130 billion sovereign wealth fund and Merrill's biggest shareholder, said it plans to raise its stake in the world's biggest brokerage.
Southwest Airlines Co. (LUV US): The largest U.S. low-fare carrier said it won't meet an Aug. 29 deadline to pay a record $10.2 million fine to the Federal Aviation Administration for flying jetliners without required inspections. The stock slipped 0.2 percent to $14.77 in regular trading yesterday.
Waste Management Inc. (WMI US): The U.S. trash hauler said it received a second request from the U.S. Justice Department's antitrust division for information regarding its proposed acquisition of Republic Services Inc. Waste Management shares increased 0.3 percent to $34.94 in regular trading yesterday.
To contact the reporter on this story: Jeff Kearns in New York at jkearns3@bloomberg.net.
Read more...
Mid-Day Report: Yen Lower after Strong US Durables, Dollar Pressured by Oil
Market Overview | Written by ActionForex.com | Aug 27 08 13:14 GMT |
The Japanese yen spikes lower in early US session on anticipation of a strong open in US stock markets after durable goods orders beat expectation. However, the greenback continues to be soft, pressured by rebound in oil prices. Headline durables jumped 1.3% in Jul versus consensus of 0%. This is the third consecutive months of expansion. Ex-transport orders rose 0.7% versus consensus of -0.5% fall. Ex-defense orders also rose 2.8% versus expectation of 0.2%. The data argues that business spending and confidence are continuing to recover in the US.
Dollar continues to retreat against majors after hitting key levels against Aussie and Sterling and struggling against Swissy around 1.1. Oil continues to rebound further to as high as 118.53 on concern of disruption of operations in Gulf of Mexico by Tropical Storm Gustav. The direction in the greenback will like continue to be dominated by oil prices. DOE crude inventories will also be watched later today.
Euro is supported by comments from ECB Weber and recovers against dollar and yen. Weber said that the discussion about declining rates in Europe is "premature" and "If the economic outlook brightens somewhat again towards the end of the year and next year, which I still expect, we'll have to see if action is necessary."
USD/JPY Mid-Day Outlook
Daily Pivots: (S1) 109.17; (P) 109.56; (R1) 109.98; More.
USD/JPY's retreat was contained at 108.70 and recovers in early US session. The three wave structure of the fall from 110.27 to 108.70 suggests that it's merely a correction to rise rom 108.13. Though, outlook remains neutral for the moment. Break of 109.92 minor resistance will add more credence to this case and encourage stronger rise to 110.66. Break will confirm that recent rally has resumed for next target of 61.8% projection of 95.77 to 108.58 from 103.76 at 111.68.
On the downside, firstly, below 108.70 will dampen this above case and bring deeper fall to 108.13 low. Also, note, though earlier, that the possibility of a short term head and shoulder top (110.4 110.66, 110.27). Break of 108.13 will indicate recent up trend has possibly reversed and and much deeper decline should the be seen to test medium term rising trendline support (now at 106.49).
In the bigger picture, USD/JPY has made a medium term bottom after down trend from 124.13 has just met 76.4% retracement of 79.75 to 147.68 at 95.78. Rebound from 95.77 is still in progress and should be targeting 61.8% projection of 95.77 to 108.58 from 103.76 at 111.68 first. Break will bring further rise to 61.8% retracement of 124.13 to 95.77 at 113.30.
However, considering bearish divergence condition in daily MACD, break of 106.04 support and sustained trading below the trend line support (99.57, 103.75, now at 106.47) will argue that whole medium term rebound from 95.77 has completed. Focus will then be turned back to 103.76 support and break will confirm this case and turn outlook bearish again.
Economic Indicators Update
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The Japanese yen spikes lower in early US session on anticipation of a strong open in US stock markets after durable goods orders beat expectation. However, the greenback continues to be soft, pressured by rebound in oil prices. Headline durables jumped 1.3% in Jul versus consensus of 0%. This is the third consecutive months of expansion. Ex-transport orders rose 0.7% versus consensus of -0.5% fall. Ex-defense orders also rose 2.8% versus expectation of 0.2%. The data argues that business spending and confidence are continuing to recover in the US.
Dollar continues to retreat against majors after hitting key levels against Aussie and Sterling and struggling against Swissy around 1.1. Oil continues to rebound further to as high as 118.53 on concern of disruption of operations in Gulf of Mexico by Tropical Storm Gustav. The direction in the greenback will like continue to be dominated by oil prices. DOE crude inventories will also be watched later today.
Euro is supported by comments from ECB Weber and recovers against dollar and yen. Weber said that the discussion about declining rates in Europe is "premature" and "If the economic outlook brightens somewhat again towards the end of the year and next year, which I still expect, we'll have to see if action is necessary."
USD/JPY Mid-Day Outlook
Daily Pivots: (S1) 109.17; (P) 109.56; (R1) 109.98; More.
USD/JPY's retreat was contained at 108.70 and recovers in early US session. The three wave structure of the fall from 110.27 to 108.70 suggests that it's merely a correction to rise rom 108.13. Though, outlook remains neutral for the moment. Break of 109.92 minor resistance will add more credence to this case and encourage stronger rise to 110.66. Break will confirm that recent rally has resumed for next target of 61.8% projection of 95.77 to 108.58 from 103.76 at 111.68.
On the downside, firstly, below 108.70 will dampen this above case and bring deeper fall to 108.13 low. Also, note, though earlier, that the possibility of a short term head and shoulder top (110.4 110.66, 110.27). Break of 108.13 will indicate recent up trend has possibly reversed and and much deeper decline should the be seen to test medium term rising trendline support (now at 106.49).
In the bigger picture, USD/JPY has made a medium term bottom after down trend from 124.13 has just met 76.4% retracement of 79.75 to 147.68 at 95.78. Rebound from 95.77 is still in progress and should be targeting 61.8% projection of 95.77 to 108.58 from 103.76 at 111.68 first. Break will bring further rise to 61.8% retracement of 124.13 to 95.77 at 113.30.
However, considering bearish divergence condition in daily MACD, break of 106.04 support and sustained trading below the trend line support (99.57, 103.75, now at 106.47) will argue that whole medium term rebound from 95.77 has completed. Focus will then be turned back to 103.76 support and break will confirm this case and turn outlook bearish again.
Economic Indicators Update
| GMT | Ccy | Events | Actual | Consensus | Previous | Revised |
|---|---|---|---|---|---|---|
| 06:00 | EUR | Germany Import price index M/M Jul | 0.60% | 0.50% | 1.50% | |
| 06:00 | EUR | Germany Import price index Y/Y Jul | 9.30% | 9.30% | 8.90% | |
| 12:30 | USD | U.S. Durable goods Jul | 1.20% | 0.00% | 0.80% | 1.30% |
| 12:30 | USD | ex. Transport Jul | 0.70% | -0.50% | 2.00% | 2.40% |
| 12:30 | USD | ex. Defense Jul | 2.80% | 0.20% | 0.00% | 0.60% |
| EUR | Germany CPI prelim M/M Aug | -0.20% | 0.60% | |||
| EUR | Germany CPI prelim Y/Y Aug | 3.20% | 3.30% | |||
| EUR | Germany HICP prelim M/M Aug | -0.20% | 0.70% | |||
| EUR | Germany HICP prelim Y/Y Aug | 3.40% | 3.50% |
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Durable Goods Support Greenback
Daily Forex Fundamentals | Written by Crown Forex | Aug 27 08 13:38 GMT |
Earlier today investors were afraid that the anticipations of an expected upcoming rate hike on the greenback had left the markets since the durable goods were projected to come in worse than the prior reading but the readings came in better giving the dollar massive support in the markets. So once again the speculations of rate hike appeared back in the markets. Durable goods orders for the month of July came in at 1.3% inline with the previous revised reading and higher than the projected flat reading.
As the euro has been gaining in the markets, this all reversed as soon as the U.S. released its durable goods boosting the USD in the markets and downgrading the single currency once again. The EUR/USD is currently traded at 1.4739 while recording a high of 1.4775 and a low of 1.4644 as we see a resistance at 1.4745 and a support at 1.4700.
The pound returned to its normal deterioration state as it was only rising today because the dollar was weak. The royal currency is still under pressure as the UK economy is at a tip of a recession. The GBP/USD is currently traded at 1.8442 while recording a high of 1.8487 and a low of 1.8389. For the pair there is a resistance at 1.8500 and a support at 1.8385.
The markets went from unwinding of carry trades to normal carry trades while investors bought high yielding currencies and sold low yielding currencies, as the yen on the back of this falls. The yen could not break the support of 108.80 while now climbing to the resistance of 109.80. The USD/JPY is currently at 109.45 while recording a high of 109.67 and a low of 108.69.
Crown Forex
disclaimer:The above may contain information for investors/traders and is not a recommendation to buy or sell currencies, gold, silver & energies, nor an offer to buy or sell currencies, gold, silver & energies. The information provided is obtained from sources deemed reliable but is not guaranteed as to accuracy or completeness. I am not liable for any losses or damages, monetary or otherwise that result. I recommend that anyone trading currencies, gold, silver & energies should do so with caution and consult with a broker before doing so. Prior performance may not be indicative of future performance. Currencies, gold, silver &energies presented should be considered speculative with a high degree of volatility and risk.
Read more...
Earlier today investors were afraid that the anticipations of an expected upcoming rate hike on the greenback had left the markets since the durable goods were projected to come in worse than the prior reading but the readings came in better giving the dollar massive support in the markets. So once again the speculations of rate hike appeared back in the markets. Durable goods orders for the month of July came in at 1.3% inline with the previous revised reading and higher than the projected flat reading.
As the euro has been gaining in the markets, this all reversed as soon as the U.S. released its durable goods boosting the USD in the markets and downgrading the single currency once again. The EUR/USD is currently traded at 1.4739 while recording a high of 1.4775 and a low of 1.4644 as we see a resistance at 1.4745 and a support at 1.4700.
The pound returned to its normal deterioration state as it was only rising today because the dollar was weak. The royal currency is still under pressure as the UK economy is at a tip of a recession. The GBP/USD is currently traded at 1.8442 while recording a high of 1.8487 and a low of 1.8389. For the pair there is a resistance at 1.8500 and a support at 1.8385.
The markets went from unwinding of carry trades to normal carry trades while investors bought high yielding currencies and sold low yielding currencies, as the yen on the back of this falls. The yen could not break the support of 108.80 while now climbing to the resistance of 109.80. The USD/JPY is currently at 109.45 while recording a high of 109.67 and a low of 108.69.
Crown Forex
disclaimer:The above may contain information for investors/traders and is not a recommendation to buy or sell currencies, gold, silver & energies, nor an offer to buy or sell currencies, gold, silver & energies. The information provided is obtained from sources deemed reliable but is not guaranteed as to accuracy or completeness. I am not liable for any losses or damages, monetary or otherwise that result. I recommend that anyone trading currencies, gold, silver & energies should do so with caution and consult with a broker before doing so. Prior performance may not be indicative of future performance. Currencies, gold, silver &energies presented should be considered speculative with a high degree of volatility and risk.
Read more...
U.S. Durable Goods Orders Much Stronger Than Expected in July
Daily Forex Fundamentals | Written by TD Bank Financial Group | Aug 27 08 13:40 GMT |
* U.S. durable goods orders rose by a strong 1.3% M/M in July, beating markets consensus for a flat reading.
* Orders excluding transportation were also much higher than expected, rising by 0.7% M/M compared to market expectations for a drop of 0.7% M/M.
* The details of this report were very strong, and suggest that the U.S. manufacturing sector is holding its own.
U.S. durable goods orders rose for the third straight month in July, advancing by a very strong 1.3% M/M, following a similar increase in June (which was upwardly revised from +0.8% M/M). The increase in July was much better than market expectations for a flat reading during the month. However, despite the strength in recent months, orders remain 2.4% below their levels last July. Excluding transportation, orders were up by a more modest 0.7% M/M, which was also much stronger than the 0.7% M/M drop expected by the market, and comes on the heels of the upwardly revised 2.4% M/M surge in June (previously reported as +2.0% M/M). On a year ago basis, orders ex-transportation are up a fairly strong 5.5%.
Core capital goods also surged during the month, rising by 2.6% M/M, with the 3-month annualised trend rising to 13.5% M/M from 9.7% in June.
The details of the report were very strong. With the exception of drops in orders for computers and electronics (down 1.3% M/M) and electrical equipment (down 6.0% M/M), there were fairly broad-based increases in most other components. There were sizeable gains in orders of machinery (+4.6% M/M), primary metals (+2.2% M/M), and transportation goods (+3.1% M/M). And with the 2.5% M/M surge in shipments during the month, the inventory to shipments ratio dropped for the second straight month, falling from 1.56 to 1.54.
On the whole, the report suggests that the U.S. manufacturing sector is holding it own according to this measure, though industrial production and the ISM manufacturing index paint a more uncertain picture. However, with the U.S. economy continuing to show signs of softness, there is little to suggest that this pace of activity will be sustained in the coming months, particularly given the recent rebound in the value of the U.S. dollar, which will likely dampen exports.
TD Bank Financial Group
The information contained in this report has been prepared for the information of our customers by TD Bank Financial Group. The information has been drawn from sources believed to be reliable, but the accuracy or completeness of the information is not guaranteed, nor in providing it does TD Bank Financial Group assume any responsibility or liability.
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* U.S. durable goods orders rose by a strong 1.3% M/M in July, beating markets consensus for a flat reading.
* Orders excluding transportation were also much higher than expected, rising by 0.7% M/M compared to market expectations for a drop of 0.7% M/M.
* The details of this report were very strong, and suggest that the U.S. manufacturing sector is holding its own.
U.S. durable goods orders rose for the third straight month in July, advancing by a very strong 1.3% M/M, following a similar increase in June (which was upwardly revised from +0.8% M/M). The increase in July was much better than market expectations for a flat reading during the month. However, despite the strength in recent months, orders remain 2.4% below their levels last July. Excluding transportation, orders were up by a more modest 0.7% M/M, which was also much stronger than the 0.7% M/M drop expected by the market, and comes on the heels of the upwardly revised 2.4% M/M surge in June (previously reported as +2.0% M/M). On a year ago basis, orders ex-transportation are up a fairly strong 5.5%.
Core capital goods also surged during the month, rising by 2.6% M/M, with the 3-month annualised trend rising to 13.5% M/M from 9.7% in June.
The details of the report were very strong. With the exception of drops in orders for computers and electronics (down 1.3% M/M) and electrical equipment (down 6.0% M/M), there were fairly broad-based increases in most other components. There were sizeable gains in orders of machinery (+4.6% M/M), primary metals (+2.2% M/M), and transportation goods (+3.1% M/M). And with the 2.5% M/M surge in shipments during the month, the inventory to shipments ratio dropped for the second straight month, falling from 1.56 to 1.54.
On the whole, the report suggests that the U.S. manufacturing sector is holding it own according to this measure, though industrial production and the ISM manufacturing index paint a more uncertain picture. However, with the U.S. economy continuing to show signs of softness, there is little to suggest that this pace of activity will be sustained in the coming months, particularly given the recent rebound in the value of the U.S. dollar, which will likely dampen exports.
TD Bank Financial Group
The information contained in this report has been prepared for the information of our customers by TD Bank Financial Group. The information has been drawn from sources believed to be reliable, but the accuracy or completeness of the information is not guaranteed, nor in providing it does TD Bank Financial Group assume any responsibility or liability.
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European Market Update
Daily Forex Fundamentals | Written by Trade The News | Aug 27 08 09:57 GMT |
German State CPI Readings Slightly Lower on the Y/Y Front
DATA
GE July Import Price Index: M/M 0.6% v 0.5%e || Y/Y 9.3% v 9.2%e
SP Q2 Final GDP: Q/Q 0.1% v 0.1%e || Y/Y 1.8% v 1.8%e
SW Aug Manufacturing Confidence: -12 v -12e || Prior revised from -10 to -11
SW Aug Consumer Confidence: -16.5 v -17.0e
SW Aug Economic Tendency Survey: 85.5 v 88.5 prior || Prior revised from 89.0 to 88.5
SW July Household Lending Y/Y: 10.5% v 10.6% prior
GE Aug Saxony CPI: M/M -0.4% v 0.6% prior || Y/Y 3.3% v 3.6% prior
GE Aug Hesse CPI: M/M -0.4% v 0.5% prior || Y/Y 3.4% v 3.7% prior
GE Aug Bavaria CPI: M/M -0.3% v 0.6% prior || Y/Y 3.1% v 3.3% prior
GE Aug Brandenburg CPI: M/M -0.3% v 0.5% prior || Y/Y 3.1% v 3.2% prior
GE Aug North Rhine Westphalia CPI: M/M -0.4% v 0.6% prior || Y/Y 2.9% v 3.3% prior
IT Aug Consumer Confidence: 99.5 v 96.4e
IC Aug CPI: M/M 0.9% v 1.0%e || Y/Y 14.5% v 14.6%e
SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM
In equity news overnight Randstad Holding [RAND.NV] reported adjusted Q2 net income of €125.2M, roughly in line with the €124.5M consensus, EBITDA of €233.8M, below estimates of €250Me, and revenue of €4.5B, just above the €4.4B consensus. [Shares were +1.5% in early trading]. Voestalpine [VOE.AS] reported Q1 net income of €236M, well above the €192M consensus, EBIT of €338M, just above estimates of €330M, and revenue of €3.26B, well above the €3.03B consensus. Voestalpine also confirmed its outlook for flat operating profit y/y. [Shares were % in early trading]. GFK [GFK.GE] announced overnight the termination of discussions regarding a possible offer for Taylor Nelson Sofres [TNS.UK]. [Shares were -1.5% in early trading]. Taylor Wimpey [TW.UK] reported a 1H net loss of £1.42B overnight, down from a loss of £196.7M a year ago. Pretax of £4.3M was down from £119.8M a year ago, while revenue of £1.89B was up from £1.4B. Taylor Wimpey said that its current liquidity position is strong, and noted that talks with banks regarding covenants are ongoing. The company wrote down £693M on land bank, and £816M on goodwill and assets. [Shares were -13.5% in early trading]. Paddy Power [PAP.UK] reported 1H net income of €41.9M, above the €38.5M consensus. Operating profit of €47.8M was above the €44.4M consensus. The company guided FY08 EPS 4%-5% below the current consensus estimate. Furthermore Paddy Power guided FY08 operating profit of €75M, below the €82.6M consensus. The company had previously guided operating profit of €82M for the year. [Shares were -8.7% in early trading].
In the newspapers the Wall Street Journal wrote overnight that the United Steelworkers are threatening a strike against ArcelorMittal [MTP.FR]. The labor union could seek to strike if the two sides cannot agree on terms by Saturday. Note that the union represents 14K workers; The union's current contract expires on September 1. According to the Financial Times BT Group [BT.UK] may seek to sell its stake in Tech Mahindra. The Telegraph wrote overnight that Lehman [LEH] may discard some of its small UK corporate borrowers from a book of £1.3B in commercial loans.
On the energy front IEA chief Tanaka said overnight that he wants OPEC to maintain current output levels at the September meeting, noting that despite the recent fall from record levels oil prices are still high. Tanaka added that market tightness will ease in 2009-2010. Tanaka sees plenty of risks on the supply side, and predicted that spare oil production capacity will tighten again from 2013.
In new supply overnight Italy sold €750M in 1.85% 2012 I/L bonds with an average yield of 2.11% and a bid-to-cover of 1.72x, as well as €696M in 2.60% 2023 I/L bonds with an average yield of 2.53% and a bid-to-cover of 1.61x.
On the speaker front Swedish think tank NIER updated its forecasts overnight. NIER cut its 2008 GDP forecast to 1.7 from 2.4%, and its 2009 forecast to 1.4% from 2.0%. NIER also raised its 2008 CPI forecast to 3.8% from 3.7%, and cut the 2009 forecast to 2.5% from 2.9%. NIER reiterated its forecast for Riksbanks' key interest rate to be at 4.50% at the end of 2008, and 3.75% by end of 2009.
NOTES
Following the weaker than expected IFO data in Germany yesterday focus overnight fell upon the state CPI readings in Germany. The German state of Saxony was the first to post, and quickly added some support to the European fixed income futures as the m/m reading declined to -0.4% in August, it lowest reading since April of 2005, from 0.6% in July. While the decline in the y/y reading was less drastic it provided some relief as it was a step down from last month's highs. As is typically the case the remainder of the German state CPI readings followed in a similar fashion with the m/m readings declining sharply, and the y/y readings posting slight declines. The lower CPI readings lend to the idea that the next ECB rate move will be a rate cut. Despite supporting such an idea the general market reaction was one of pessimism; with y/y levels still notably above the ECB's target many market participants believe that the ECB will not make any move to cut rates in 2008.
'Cinema is the most beautiful fraud in the world.' - Jean-Luc Godard
Trade The News Staff
Trade The News, Inc.
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German State CPI Readings Slightly Lower on the Y/Y Front
DATA
GE July Import Price Index: M/M 0.6% v 0.5%e || Y/Y 9.3% v 9.2%e
SP Q2 Final GDP: Q/Q 0.1% v 0.1%e || Y/Y 1.8% v 1.8%e
SW Aug Manufacturing Confidence: -12 v -12e || Prior revised from -10 to -11
SW Aug Consumer Confidence: -16.5 v -17.0e
SW Aug Economic Tendency Survey: 85.5 v 88.5 prior || Prior revised from 89.0 to 88.5
SW July Household Lending Y/Y: 10.5% v 10.6% prior
GE Aug Saxony CPI: M/M -0.4% v 0.6% prior || Y/Y 3.3% v 3.6% prior
GE Aug Hesse CPI: M/M -0.4% v 0.5% prior || Y/Y 3.4% v 3.7% prior
GE Aug Bavaria CPI: M/M -0.3% v 0.6% prior || Y/Y 3.1% v 3.3% prior
GE Aug Brandenburg CPI: M/M -0.3% v 0.5% prior || Y/Y 3.1% v 3.2% prior
GE Aug North Rhine Westphalia CPI: M/M -0.4% v 0.6% prior || Y/Y 2.9% v 3.3% prior
IT Aug Consumer Confidence: 99.5 v 96.4e
IC Aug CPI: M/M 0.9% v 1.0%e || Y/Y 14.5% v 14.6%e
SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM
In equity news overnight Randstad Holding [RAND.NV] reported adjusted Q2 net income of €125.2M, roughly in line with the €124.5M consensus, EBITDA of €233.8M, below estimates of €250Me, and revenue of €4.5B, just above the €4.4B consensus. [Shares were +1.5% in early trading]. Voestalpine [VOE.AS] reported Q1 net income of €236M, well above the €192M consensus, EBIT of €338M, just above estimates of €330M, and revenue of €3.26B, well above the €3.03B consensus. Voestalpine also confirmed its outlook for flat operating profit y/y. [Shares were % in early trading]. GFK [GFK.GE] announced overnight the termination of discussions regarding a possible offer for Taylor Nelson Sofres [TNS.UK]. [Shares were -1.5% in early trading]. Taylor Wimpey [TW.UK] reported a 1H net loss of £1.42B overnight, down from a loss of £196.7M a year ago. Pretax of £4.3M was down from £119.8M a year ago, while revenue of £1.89B was up from £1.4B. Taylor Wimpey said that its current liquidity position is strong, and noted that talks with banks regarding covenants are ongoing. The company wrote down £693M on land bank, and £816M on goodwill and assets. [Shares were -13.5% in early trading]. Paddy Power [PAP.UK] reported 1H net income of €41.9M, above the €38.5M consensus. Operating profit of €47.8M was above the €44.4M consensus. The company guided FY08 EPS 4%-5% below the current consensus estimate. Furthermore Paddy Power guided FY08 operating profit of €75M, below the €82.6M consensus. The company had previously guided operating profit of €82M for the year. [Shares were -8.7% in early trading].
In the newspapers the Wall Street Journal wrote overnight that the United Steelworkers are threatening a strike against ArcelorMittal [MTP.FR]. The labor union could seek to strike if the two sides cannot agree on terms by Saturday. Note that the union represents 14K workers; The union's current contract expires on September 1. According to the Financial Times BT Group [BT.UK] may seek to sell its stake in Tech Mahindra. The Telegraph wrote overnight that Lehman [LEH] may discard some of its small UK corporate borrowers from a book of £1.3B in commercial loans.
On the energy front IEA chief Tanaka said overnight that he wants OPEC to maintain current output levels at the September meeting, noting that despite the recent fall from record levels oil prices are still high. Tanaka added that market tightness will ease in 2009-2010. Tanaka sees plenty of risks on the supply side, and predicted that spare oil production capacity will tighten again from 2013.
In new supply overnight Italy sold €750M in 1.85% 2012 I/L bonds with an average yield of 2.11% and a bid-to-cover of 1.72x, as well as €696M in 2.60% 2023 I/L bonds with an average yield of 2.53% and a bid-to-cover of 1.61x.
On the speaker front Swedish think tank NIER updated its forecasts overnight. NIER cut its 2008 GDP forecast to 1.7 from 2.4%, and its 2009 forecast to 1.4% from 2.0%. NIER also raised its 2008 CPI forecast to 3.8% from 3.7%, and cut the 2009 forecast to 2.5% from 2.9%. NIER reiterated its forecast for Riksbanks' key interest rate to be at 4.50% at the end of 2008, and 3.75% by end of 2009.
NOTES
Following the weaker than expected IFO data in Germany yesterday focus overnight fell upon the state CPI readings in Germany. The German state of Saxony was the first to post, and quickly added some support to the European fixed income futures as the m/m reading declined to -0.4% in August, it lowest reading since April of 2005, from 0.6% in July. While the decline in the y/y reading was less drastic it provided some relief as it was a step down from last month's highs. As is typically the case the remainder of the German state CPI readings followed in a similar fashion with the m/m readings declining sharply, and the y/y readings posting slight declines. The lower CPI readings lend to the idea that the next ECB rate move will be a rate cut. Despite supporting such an idea the general market reaction was one of pessimism; with y/y levels still notably above the ECB's target many market participants believe that the ECB will not make any move to cut rates in 2008.
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Pimco seeks $5 bln to buy distressed debt-Bloomberg
Aug 27 (Reuters) - Pacific Investment Management Co, the manager of the world's biggest bond fund, is seeking as much as $5 billion to buy mortgage-backed debt that has plunged in value due to the subprime crisis, Bloomberg reported, citing two investors familiar with the matter.
The Distressed Senior Credit Opportunities Fund, a new Pimco fund, would invest in senior and super-senior securities backed by commercial and residential mortgages, Bloomberg said.
The fund would focus on commercial loans and residential debt that does not carry explicit government guarantees or the backing of securities issued by companies such as Fannie Mae or Freddie Mac , the news agency said.
It would also seek investments in securities backed by home equity, credit card and auto loans, and can invest in debt secured by collateral outside the U.S, the news agency reported.
Pimco was not available for comment.
Fund managers like BlackRock Inc and Pimco have launched distressed debt funds, betting that mortgage security and corporate debt prices have fallen enough to warrant interest, even though further declines are possible. (Reporting by Sweta Singh in Bangalore; editing by Sue Thomas)
Read more...
The Distressed Senior Credit Opportunities Fund, a new Pimco fund, would invest in senior and super-senior securities backed by commercial and residential mortgages, Bloomberg said.
The fund would focus on commercial loans and residential debt that does not carry explicit government guarantees or the backing of securities issued by companies such as Fannie Mae or Freddie Mac , the news agency said.
It would also seek investments in securities backed by home equity, credit card and auto loans, and can invest in debt secured by collateral outside the U.S, the news agency reported.
Pimco was not available for comment.
Fund managers like BlackRock Inc and Pimco have launched distressed debt funds, betting that mortgage security and corporate debt prices have fallen enough to warrant interest, even though further declines are possible. (Reporting by Sweta Singh in Bangalore; editing by Sue Thomas)
Read more...
Gold rises as oil firms
By Lewa Pardomuan
SINGAPORE (Reuters) - Gold extended gains on Wednesday as fears of rising inflation, tensions between Russia and the West and a rebounding euro spurred speculative buying.
Platinum rose as much as 1.8 percent to track gold but gains may be limited with automakers still on the sidelines. Palladium and silver also firmed.
Gold rose to $826.70/827.70 an ounce from $822.90/824.30 an ounce late in New York on Tuesday, when it gained more than $2 an ounce.
"Gold is still consolidating for the time being. But it seems the market is still a little bit worried about the global economy," said Dick Poon, manager precious metals at Heraeus Ltd in Hong Kong.
Gold has bounced nearly 7 percent since tumbling to a nine-month low around $773 in mid-August, but the metal is well below a record high of $1,030.80 struck in March. Analysts said chart-based support will hold prices above $800 an ounce.
"Private investors have gradually shown interest in gold, and the oil price has also reached its bottom. Within this week, it's possible for gold to reach $835 or $840," said Yukuji Sonoda, precious metals analyst at Daiichi Commodities in Tokyo.
Oil edged up around $117 a barrel on concerns a tropical storm could disrupt U.S. oil and natural gas production in the Gulf of Mexico and on escalating tensions between the West and Russia over Georgia.
The euro firmed to $1.4700 on short covering, pulling away from a six-month low of $1.4570 hit on trading platform EBS on Tuesday.
In the physical market, jewelers in India, the world's largest consumer of gold, paid a premium to secure scarce supplies of the metal to meet surging demand ahead of the busy marriage season.
"Gold near $800 remains vulnerable in the near term to a stronger dollar," said Jeffrey Nichols, managing director of American Precious Metals Advisors.
"But it is underpinned by rising physical demand in key global markets, deteriorating macroeconomic and financial environments, accelerating inflation, and tight supply/demand fundamentals," he said.
The new benchmark contract on the Tokyo Commodity Exchange, August 2009, was at 2,925 yen per gram after opening at 2,926 yen.
Spot platinum rose to $1,422.50/1,442.00 an ounce from $1,409.50/1,429.50 late in New York as bargain buying persisted after the metal sank to an 11-month low around $1,296 last week.
"Automakers haven't entered the market yet. They will wait and see," said Sonoda of Daiichi Commodities, who pegged support around $1,400 an ounce.
The bulk of the world's platinum is used by automakers in autocatalyst systems that scrub exhaust fumes of dangerous and environmentally damaging chemicals. Platinum prices are well below a lifetime high of $2,290 hit in early March.
(Editing by Michael Urquhart)
Read more...
SINGAPORE (Reuters) - Gold extended gains on Wednesday as fears of rising inflation, tensions between Russia and the West and a rebounding euro spurred speculative buying.
Platinum rose as much as 1.8 percent to track gold but gains may be limited with automakers still on the sidelines. Palladium and silver also firmed.
Gold rose to $826.70/827.70 an ounce from $822.90/824.30 an ounce late in New York on Tuesday, when it gained more than $2 an ounce.
"Gold is still consolidating for the time being. But it seems the market is still a little bit worried about the global economy," said Dick Poon, manager precious metals at Heraeus Ltd in Hong Kong.
Gold has bounced nearly 7 percent since tumbling to a nine-month low around $773 in mid-August, but the metal is well below a record high of $1,030.80 struck in March. Analysts said chart-based support will hold prices above $800 an ounce.
"Private investors have gradually shown interest in gold, and the oil price has also reached its bottom. Within this week, it's possible for gold to reach $835 or $840," said Yukuji Sonoda, precious metals analyst at Daiichi Commodities in Tokyo.
Oil edged up around $117 a barrel on concerns a tropical storm could disrupt U.S. oil and natural gas production in the Gulf of Mexico and on escalating tensions between the West and Russia over Georgia.
The euro firmed to $1.4700 on short covering, pulling away from a six-month low of $1.4570 hit on trading platform EBS on Tuesday.
In the physical market, jewelers in India, the world's largest consumer of gold, paid a premium to secure scarce supplies of the metal to meet surging demand ahead of the busy marriage season.
"Gold near $800 remains vulnerable in the near term to a stronger dollar," said Jeffrey Nichols, managing director of American Precious Metals Advisors.
"But it is underpinned by rising physical demand in key global markets, deteriorating macroeconomic and financial environments, accelerating inflation, and tight supply/demand fundamentals," he said.
The new benchmark contract on the Tokyo Commodity Exchange, August 2009, was at 2,925 yen per gram after opening at 2,926 yen.
Spot platinum rose to $1,422.50/1,442.00 an ounce from $1,409.50/1,429.50 late in New York as bargain buying persisted after the metal sank to an 11-month low around $1,296 last week.
"Automakers haven't entered the market yet. They will wait and see," said Sonoda of Daiichi Commodities, who pegged support around $1,400 an ounce.
The bulk of the world's platinum is used by automakers in autocatalyst systems that scrub exhaust fumes of dangerous and environmentally damaging chemicals. Platinum prices are well below a lifetime high of $2,290 hit in early March.
(Editing by Michael Urquhart)
Read more...
Dollar falls back from 2008 high on profit taking
By Jamie McGeever
LONDON (Reuters) - The dollar eased back on Wednesday as dealers cashed in on the currency's jump the previous session to 2008 highs against a basket of currencies.
A rebound in oil prices, as well as persistent concern about the U.S. economy and banking system, also helped trigger the bout of profit-taking.
The euro had slid on Tuesday to a six-month low after a report showed the Ifo index of German business confidence slumping to a three-year low, dragging other currencies with it.
The data deepened the sense of gloom surrounding the euro zone and other economies relative to the United States, which lifted the dollar to its highest level for the year against a basket of currencies.
Such a sharp rise, however, gave traders an opportunity to book some profits on Wednesday, especially with little in the way of major economic data or market-moving developments changing the general environment of dollar strength.
That despite the Federal Deposit Insurance Corp (FDIC) alluding to the extremely fragile state of the U.S. banking system on Tuesday. Minutes of the Federal Reserve's last Open Market Committee meeting also hinted weak financial conditions and growth would see interest rates on hold for some time.
"The dollar seems to have checked its advance," said Geoffrey Yu, currency strategist at UBS in London.
"Investors are finding it hard to find reasons to get into the dollar and chase this move further (right now). We are still positive in general on the dollar -- we see the euro at $1.40 by year end -- but it's probably wise to exercise some caution."
At 0750 GMT the euro was up half a percent on the day at $1.4730, bouncing back from a six-month low of $1.4570 reached in the previous session on trading platform EBS.
The dollar index, a measure of the greenback's value against six major currencies, fell half a percent on the day to 76.84 .DXY, having hit a 2008 high on Tuesday at 77.619.
Sterling rose 0.4 percent to $1.8463, after slumping to a two-year trough of $1.8330 on Tuesday and the dollar fell 0.5 percent against the yen to 109.05 yen.
DON'T BANK ON IT
A $1 increase in oil prices to above $117, in part supported by fears that Tropical Storm Gustav may threaten oil facilities in the Gulf of Mexico, also reinforced dollar selling on Wednesday.
The dollar and oil tend to be inversely correlated. High oil prices hit the U.S. consumer, whose spending accounts for some 70 percent of the U.S. economy.
But the dollar is expected to be broadly supported by global economic deterioration even as the Fed seems likely to keep rates on hold in the coming months.
Other central banks in the euro zone, Britain, Australia and New Zealand are expected to lower rates at some stage or other in order to shield their economies from the threat of recession.
Analysts think the Fed is likely to raise U.S. interest rates by around 50 basis points from the current 2.0 percent by next August.
Still, the fragile U.S. banking system remains a concern for investors.
The FDIC said on Tuesday that more banks than at any time since 2003 might go to the wall, and the Wall Street Journal reported that the FDIC might have to tap Treasury funds to see it through the expected wave of bank failures.
"We can't help but think that the leg down in euro/dollar is overdone when held up against the U.S. macroeconomic backdrop and the drip feed of poor news out of the U.S. financial system," wrote Societe Generale FX strategists in a client note.
In economic data, U.S. durable goods orders for July are due at 1230 GMT and August German inflation figures will be released later.
(Reporting by Jamie McGeever, editing by Patrick Graham)
Read more...
LONDON (Reuters) - The dollar eased back on Wednesday as dealers cashed in on the currency's jump the previous session to 2008 highs against a basket of currencies.
A rebound in oil prices, as well as persistent concern about the U.S. economy and banking system, also helped trigger the bout of profit-taking.
The euro had slid on Tuesday to a six-month low after a report showed the Ifo index of German business confidence slumping to a three-year low, dragging other currencies with it.
The data deepened the sense of gloom surrounding the euro zone and other economies relative to the United States, which lifted the dollar to its highest level for the year against a basket of currencies.
Such a sharp rise, however, gave traders an opportunity to book some profits on Wednesday, especially with little in the way of major economic data or market-moving developments changing the general environment of dollar strength.
That despite the Federal Deposit Insurance Corp (FDIC) alluding to the extremely fragile state of the U.S. banking system on Tuesday. Minutes of the Federal Reserve's last Open Market Committee meeting also hinted weak financial conditions and growth would see interest rates on hold for some time.
"The dollar seems to have checked its advance," said Geoffrey Yu, currency strategist at UBS in London.
"Investors are finding it hard to find reasons to get into the dollar and chase this move further (right now). We are still positive in general on the dollar -- we see the euro at $1.40 by year end -- but it's probably wise to exercise some caution."
At 0750 GMT the euro was up half a percent on the day at $1.4730, bouncing back from a six-month low of $1.4570 reached in the previous session on trading platform EBS.
The dollar index, a measure of the greenback's value against six major currencies, fell half a percent on the day to 76.84 .DXY, having hit a 2008 high on Tuesday at 77.619.
Sterling rose 0.4 percent to $1.8463, after slumping to a two-year trough of $1.8330 on Tuesday and the dollar fell 0.5 percent against the yen to 109.05 yen.
DON'T BANK ON IT
A $1 increase in oil prices to above $117, in part supported by fears that Tropical Storm Gustav may threaten oil facilities in the Gulf of Mexico, also reinforced dollar selling on Wednesday.
The dollar and oil tend to be inversely correlated. High oil prices hit the U.S. consumer, whose spending accounts for some 70 percent of the U.S. economy.
But the dollar is expected to be broadly supported by global economic deterioration even as the Fed seems likely to keep rates on hold in the coming months.
Other central banks in the euro zone, Britain, Australia and New Zealand are expected to lower rates at some stage or other in order to shield their economies from the threat of recession.
Analysts think the Fed is likely to raise U.S. interest rates by around 50 basis points from the current 2.0 percent by next August.
Still, the fragile U.S. banking system remains a concern for investors.
The FDIC said on Tuesday that more banks than at any time since 2003 might go to the wall, and the Wall Street Journal reported that the FDIC might have to tap Treasury funds to see it through the expected wave of bank failures.
"We can't help but think that the leg down in euro/dollar is overdone when held up against the U.S. macroeconomic backdrop and the drip feed of poor news out of the U.S. financial system," wrote Societe Generale FX strategists in a client note.
In economic data, U.S. durable goods orders for July are due at 1230 GMT and August German inflation figures will be released later.
(Reporting by Jamie McGeever, editing by Patrick Graham)
Read more...
Hk shares end up 1.9 pct in China Mobile-led late rally
* China Mobile leads on forecast-beating H1 results
* China Life jumps in extended post-result relief rally
* Resources stocks rise amid higher commodity prices
(Updates to close)
By Parvathy Ullatil
HONG KONG, Aug 27 (Reuters) - Hong Kong shares closed 1.9 percent higher on Wednesday, lifted by sharp post-earnings relief rallies in index heavyweights China Mobile and China Life .
The market posted most of its gains in the post-lunch session, an encore of Tuesday's late rally, driven by frenetic buying ahead of the index futures expiry on Thursday.
"Futures rollover-related buying has peaked between Tuesday and today," said Patrick Yiu, associate director at CASH Asset Management.
"Investors seem keen on swapping their contracts at the 21,000 to 21,200 level, and today China Mobile results proved to the catalyst for that big push."
China Mobile led gainers with a 3.5 percent jump after posting forecast beating first-half earnings, while shares of the nation's top insurer shot up 4.9 percent in an extended rally as investors continued to cheer the smaller-than-expected decline in its bottom line.
The benchmark Hang Seng Index .HSI closed up 408.06 points at 21,464.72 after ending the morning session just 0.7 percent higher.
Mainboard turnover rose to HK$61 billion ($7.8 billion) from Tuesday's dismal HK$48 billion.
Offshore oil producer CNOOC climbed 3.8 percent. Oil prices hovered near $117 per barrel as Hurricane Gustav headed towards U.S. oil and gas installations in the Gulf of Mexico.
Asia's largest oil & gas company, Petrochina , was up 3.4 percent. Both oil majors were to announce their first half earnings later in the day.
Coal stocks jumped in Hong Kong, defying declines in their Shanghai-listed scripts after Chinese authorities said they would strengthen enforcement of price caps on thermal coal.
China Shenhua gained 5.7 percent while smaller rival China Coal advanced 6.3 percent.
The China Enterprises Index .HSCE of top locally listed mainland Chinese firms was 3.3 percent higher.
Metals and shipping stocks joined the rally in resources stocks, rebounding off lows, encouraged by better-than-expected blue chip earnings.
China COSCO Holdings Co Ltd , the listed flagship of the country's premier shipping conglomerate, climbed 8.2 percent after doubling its first half earnings to 15.12 billion yuan. The net beat an average forecast of 13.9 billion yuan from three analysts polled by Reuters.
Jiangxi Copper Co Ltd , China's top integrated copper producer, soared 9.5 percent after posting a 32 percent rise in first half earnings on higher by-product prices.
Tsingtao Brewery , China's best-known beer brand, which has soared 22 percent since announcing a 42 percent increase in first-half net profit last week, moved up 7 percent on Wednesday. The stock had fallen to a 16 month low just ahead of its earnings announcement.
(Reporting by Parvathy Ullatil; Editing by Ken Wills)
Read more...
* China Life jumps in extended post-result relief rally
* Resources stocks rise amid higher commodity prices
(Updates to close)
By Parvathy Ullatil
HONG KONG, Aug 27 (Reuters) - Hong Kong shares closed 1.9 percent higher on Wednesday, lifted by sharp post-earnings relief rallies in index heavyweights China Mobile and China Life .
The market posted most of its gains in the post-lunch session, an encore of Tuesday's late rally, driven by frenetic buying ahead of the index futures expiry on Thursday.
"Futures rollover-related buying has peaked between Tuesday and today," said Patrick Yiu, associate director at CASH Asset Management.
"Investors seem keen on swapping their contracts at the 21,000 to 21,200 level, and today China Mobile results proved to the catalyst for that big push."
China Mobile led gainers with a 3.5 percent jump after posting forecast beating first-half earnings, while shares of the nation's top insurer shot up 4.9 percent in an extended rally as investors continued to cheer the smaller-than-expected decline in its bottom line.
The benchmark Hang Seng Index .HSI closed up 408.06 points at 21,464.72 after ending the morning session just 0.7 percent higher.
Mainboard turnover rose to HK$61 billion ($7.8 billion) from Tuesday's dismal HK$48 billion.
Offshore oil producer CNOOC climbed 3.8 percent. Oil prices hovered near $117 per barrel as Hurricane Gustav headed towards U.S. oil and gas installations in the Gulf of Mexico.
Asia's largest oil & gas company, Petrochina , was up 3.4 percent. Both oil majors were to announce their first half earnings later in the day.
Coal stocks jumped in Hong Kong, defying declines in their Shanghai-listed scripts after Chinese authorities said they would strengthen enforcement of price caps on thermal coal.
China Shenhua gained 5.7 percent while smaller rival China Coal advanced 6.3 percent.
The China Enterprises Index .HSCE of top locally listed mainland Chinese firms was 3.3 percent higher.
Metals and shipping stocks joined the rally in resources stocks, rebounding off lows, encouraged by better-than-expected blue chip earnings.
China COSCO Holdings Co Ltd , the listed flagship of the country's premier shipping conglomerate, climbed 8.2 percent after doubling its first half earnings to 15.12 billion yuan. The net beat an average forecast of 13.9 billion yuan from three analysts polled by Reuters.
Jiangxi Copper Co Ltd , China's top integrated copper producer, soared 9.5 percent after posting a 32 percent rise in first half earnings on higher by-product prices.
Tsingtao Brewery , China's best-known beer brand, which has soared 22 percent since announcing a 42 percent increase in first-half net profit last week, moved up 7 percent on Wednesday. The stock had fallen to a 16 month low just ahead of its earnings announcement.
(Reporting by Parvathy Ullatil; Editing by Ken Wills)
Read more...
FTSE flat early as commodities offset weak pharmas
* FTSE 100 flat * Firmer crude oil price, strong results lift energy stocks
* Taylor Wimpey H1 profit slumps, stock falls
By Dominic Lau
LONDON, Aug 27 (Reuters) - Britain's top share index was flat early on Wednesday as firmer metal and crude oil prices boosted commodity stocks, offsetting weakness in drugmakers.
By 0753 GMT, the FTSE 100 .FTSE was up 0.2 points at 5,470.9, after losing 0.6 percent on Tuesday.
The UK benchmark is down 15 percent for the year on fears of a recession fears, concerns over rising commodity prices and the impact of a global credit crunch on financial firms.
Energy stocks were in demand as crude prices CLc1 traded above $116 a barrel and after oil explorer Tullow Oil said net profit from continued activities more than doubled in the first half of the year to 126 million pounds helped by higher oil prices. Tullow Oil added nearly 2 percent.
Oil and gas services firm Petrofac also reported better-than-expected first-half results as net profit jumped 57 percent from a year ago, helped by strong demand. Petrofac shares were 1.4 percent higher.
BP , Royal Dutch Shell , gas producer BG Group and Cairn Energy put on 0.2 to 0.9 percent.
Firmer copper prices lifted miners, with Rio Tinto , BHP Billiton , Anglo American , Vedanta Resources and Ferrexpo gaining 0.9 to 1.5 percent.
Antofagasta posted an 8.8 percent rise in first-half earnings per share as higher copper output and prices outweighed rising costs. Its stock was up 0.9 percent.
"We have some reasonably big companies reporting today, the likes of Antofagasta and Tullow Oil, but in some way no great surprises. The stocks are reacting as you might expect," said Tim Hughes, head of sales trading.
Hughes said trading volume was light as many traders and fund managers were away on holiday, leaving the market with little direction.
Investors are likely to shift their focus to U.S. durable goods data for July, due at 1230 GMT, for a further gauge on the health of the world's largest economy.
The Federal Deposit Insurance Corp said 117 U.S. banks were on its troubled banks list at the end of the second quarter, up from 90 after the first three months of the year.
In the UK, banks were firmer with Barclays , HSBC , HBOS and Standard Chartered all higher.
Royal Bank of Scotland advanced 0.9 percent. The bank appointed three new directors in a long-awaited board change it hopes will ease shareholder concerns over governance that surfaced after its 12 billion pound cash call.
TAYLOR WIMPEY FALLS
Housebuilder Taylor Wimpey slumped 12 percent after the mid-cap firm reported a sharp fall in first-half profit and said it was scrapping its interim dividend due to challenging market conditions in the UK, U.S. and Spain.
Other housebuilders also took a beating, with Persimmon shedding 2.7 percent, Bovis Homes losing 3.9 percent and Barratt Developments dropping 2 percent.
Drugmakers also suffered as traders said investors moved away from the sector, which has been the best performer in Europe so far this year. GlaxoSmithKline lost 1.3 percent and AstraZeneca dipped 0.8 percent.
Mid-cap Taylor Nelson Sofres slipped 1.7 percent after Germany's GfK said it had given up its attempt on a takeover offer. The UK market research firm reported underlying revenue growth of 5.1 percent for the first half.
Liberty International , Capita Group , InterContinental Hotels and Admiral Group fell after going ex-dividend.
BSkyB rose 1.5 percent after Goldman Sachs added the stock to its "conviction buy list".
Enterprise Inns dropped 3.7 percent to top the FTSE 100 losers after Cazenove downgraded Britain's second-biggest pubs group to "underperform" from "in-line".
(Editing by Erica Billingham)
Read more...
* Taylor Wimpey H1 profit slumps, stock falls
By Dominic Lau
LONDON, Aug 27 (Reuters) - Britain's top share index was flat early on Wednesday as firmer metal and crude oil prices boosted commodity stocks, offsetting weakness in drugmakers.
By 0753 GMT, the FTSE 100 .FTSE was up 0.2 points at 5,470.9, after losing 0.6 percent on Tuesday.
The UK benchmark is down 15 percent for the year on fears of a recession fears, concerns over rising commodity prices and the impact of a global credit crunch on financial firms.
Energy stocks were in demand as crude prices CLc1 traded above $116 a barrel and after oil explorer Tullow Oil said net profit from continued activities more than doubled in the first half of the year to 126 million pounds helped by higher oil prices. Tullow Oil added nearly 2 percent.
Oil and gas services firm Petrofac also reported better-than-expected first-half results as net profit jumped 57 percent from a year ago, helped by strong demand. Petrofac shares were 1.4 percent higher.
BP , Royal Dutch Shell , gas producer BG Group and Cairn Energy put on 0.2 to 0.9 percent.
Firmer copper prices lifted miners, with Rio Tinto , BHP Billiton , Anglo American , Vedanta Resources and Ferrexpo gaining 0.9 to 1.5 percent.
Antofagasta posted an 8.8 percent rise in first-half earnings per share as higher copper output and prices outweighed rising costs. Its stock was up 0.9 percent.
"We have some reasonably big companies reporting today, the likes of Antofagasta and Tullow Oil, but in some way no great surprises. The stocks are reacting as you might expect," said Tim Hughes, head of sales trading.
Hughes said trading volume was light as many traders and fund managers were away on holiday, leaving the market with little direction.
Investors are likely to shift their focus to U.S. durable goods data for July, due at 1230 GMT, for a further gauge on the health of the world's largest economy.
The Federal Deposit Insurance Corp said 117 U.S. banks were on its troubled banks list at the end of the second quarter, up from 90 after the first three months of the year.
In the UK, banks were firmer with Barclays , HSBC , HBOS and Standard Chartered all higher.
Royal Bank of Scotland advanced 0.9 percent. The bank appointed three new directors in a long-awaited board change it hopes will ease shareholder concerns over governance that surfaced after its 12 billion pound cash call.
TAYLOR WIMPEY FALLS
Housebuilder Taylor Wimpey slumped 12 percent after the mid-cap firm reported a sharp fall in first-half profit and said it was scrapping its interim dividend due to challenging market conditions in the UK, U.S. and Spain.
Other housebuilders also took a beating, with Persimmon shedding 2.7 percent, Bovis Homes losing 3.9 percent and Barratt Developments dropping 2 percent.
Drugmakers also suffered as traders said investors moved away from the sector, which has been the best performer in Europe so far this year. GlaxoSmithKline lost 1.3 percent and AstraZeneca dipped 0.8 percent.
Mid-cap Taylor Nelson Sofres slipped 1.7 percent after Germany's GfK said it had given up its attempt on a takeover offer. The UK market research firm reported underlying revenue growth of 5.1 percent for the first half.
Liberty International , Capita Group , InterContinental Hotels and Admiral Group fell after going ex-dividend.
BSkyB rose 1.5 percent after Goldman Sachs added the stock to its "conviction buy list".
Enterprise Inns dropped 3.7 percent to top the FTSE 100 losers after Cazenove downgraded Britain's second-biggest pubs group to "underperform" from "in-line".
(Editing by Erica Billingham)
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European shares down as banks, insurers weigh
* FTSEurofirst 300 falls 0.5 percent
* Banks, insurers slip on financial market troubles
* Energy, mining stocks gain on higher commodity prices
By Atul Prakash
LONDON, Aug 27 (Reuters) - European shares fell early on Wednesday as a decline in financial stocks on persistent worries about the health of the sector negated the impact of a rise in oil and mining shares that gained on higher commodity prices.
At 0834 GMT, the FTSEurofirst 300 index of top European shares was down 0.5 percent at 1,165.80 points. The index gained 0.2 percent in the previous session.
Banks were the top weighted sectoral loser on the index, as investors remained jittery about the sector, which has been worst hit by a credit crisis stemming from a collapse in risky U.S. mortgages.
A report from the Federal Deposit Insurance Corporation said on Tuesday that 117 U.S. banks were on its troubled banks list at the end of the second quarter, up from 90 after the first three months of the year.
"It's a difficult environment for the banking sector," said Henk Potts, equity strategist at Barclays Stockbrokers.
"Financials have been under pressure due to concerns about the speed of the economic slowdown and worries that there is still further fallout from the subprime credit crunch issues."
Natixis slipped more than 5 percent, Sweden's Swedbank shed 3.6 percent, Italian bank UBI Banca fell nearly 3 percent and UBS AG declined 2.4 percent.
Insurers were also under pressure, with Swiss Life falling 2.5 percent, Aegon dropping 1.9 percent, Old Mutual shedding 1.6 percent and Prudential falling 1.5 percent.
Swiss insurer Baloise fell 5.6 percent after it posted a worse-than-expected 42 percent drop in first-half net profit due to losses on investments and said it expected financial markets to remain volatile this year.
Across Europe, Britain's FTSE 100 .FTSE fell 0.18 percent, Germany's DAX .GDAXI was down 0.73 percent and France's CAC 40 .FCHI eased 0.67 percent.
OILS TRACK CRUDE PRICES
But oil and energy stocks gained, tracking a rise in crude prices that rose for a third straight session to near $117 a barrel on growing fears over Tropical Storm Gustav, heading towards oil and natural gas installations in the Gulf of Mexico.
Tullow Oil , BP , BG Group and Total rose between 0.2 and 1.5 percent.
Miners also rose with an increase in metal prices. Vedanta was up 1.3 percent, Anglo American added 0.8 percent and BHP Billiton was up 0.4 percent.
London-listed Chilean miner Antofagasta rose 1.3 percent after posting an 8.8 percent rise in first-half earnings per share as higher copper output and prices outweighed rising costs.
Among individual shares, Dutch brewer Heineken NV rose 2.3 percent after it posted first-half operating profit up 7.4 percent to 925 million euros ($1.36 billion), missing forecasts, but it said it had achieved higher pricing in most markets and cut costs.
But world number two truck maker Volvo fell 2.6 percent. It said deliveries of its trucks rose 2 percent year-on-year in July as strength in Asia offset weakness on both sides of the Atlantic.
Investors awaited U.S. durable goods data, due at 1230 GMT, for near-term market direction. (Editing by David Cowell)
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* Banks, insurers slip on financial market troubles
* Energy, mining stocks gain on higher commodity prices
By Atul Prakash
LONDON, Aug 27 (Reuters) - European shares fell early on Wednesday as a decline in financial stocks on persistent worries about the health of the sector negated the impact of a rise in oil and mining shares that gained on higher commodity prices.
At 0834 GMT, the FTSEurofirst 300 index of top European shares was down 0.5 percent at 1,165.80 points. The index gained 0.2 percent in the previous session.
Banks were the top weighted sectoral loser on the index, as investors remained jittery about the sector, which has been worst hit by a credit crisis stemming from a collapse in risky U.S. mortgages.
A report from the Federal Deposit Insurance Corporation said on Tuesday that 117 U.S. banks were on its troubled banks list at the end of the second quarter, up from 90 after the first three months of the year.
"It's a difficult environment for the banking sector," said Henk Potts, equity strategist at Barclays Stockbrokers.
"Financials have been under pressure due to concerns about the speed of the economic slowdown and worries that there is still further fallout from the subprime credit crunch issues."
Natixis slipped more than 5 percent, Sweden's Swedbank shed 3.6 percent, Italian bank UBI Banca fell nearly 3 percent and UBS AG declined 2.4 percent.
Insurers were also under pressure, with Swiss Life falling 2.5 percent, Aegon dropping 1.9 percent, Old Mutual shedding 1.6 percent and Prudential falling 1.5 percent.
Swiss insurer Baloise fell 5.6 percent after it posted a worse-than-expected 42 percent drop in first-half net profit due to losses on investments and said it expected financial markets to remain volatile this year.
Across Europe, Britain's FTSE 100 .FTSE fell 0.18 percent, Germany's DAX .GDAXI was down 0.73 percent and France's CAC 40 .FCHI eased 0.67 percent.
OILS TRACK CRUDE PRICES
But oil and energy stocks gained, tracking a rise in crude prices that rose for a third straight session to near $117 a barrel on growing fears over Tropical Storm Gustav, heading towards oil and natural gas installations in the Gulf of Mexico.
Tullow Oil , BP , BG Group and Total rose between 0.2 and 1.5 percent.
Miners also rose with an increase in metal prices. Vedanta was up 1.3 percent, Anglo American added 0.8 percent and BHP Billiton was up 0.4 percent.
London-listed Chilean miner Antofagasta rose 1.3 percent after posting an 8.8 percent rise in first-half earnings per share as higher copper output and prices outweighed rising costs.
Among individual shares, Dutch brewer Heineken NV rose 2.3 percent after it posted first-half operating profit up 7.4 percent to 925 million euros ($1.36 billion), missing forecasts, but it said it had achieved higher pricing in most markets and cut costs.
But world number two truck maker Volvo fell 2.6 percent. It said deliveries of its trucks rose 2 percent year-on-year in July as strength in Asia offset weakness on both sides of the Atlantic.
Investors awaited U.S. durable goods data, due at 1230 GMT, for near-term market direction. (Editing by David Cowell)
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China's Alibaba says Q2 net profit up 159 pct
HONG KONG, Aug 27 (Reuters) - Top Chinese e-commerce firm Alibaba.com Ltd posted a 159 percent rise in second quarter net profit thanks to interest income from IPO proceeds, but its prospects are darkening as global woes cause small and medium sized firms to cut spending.
Alibaba, which operates an online business-to-business site connecting buyers and suppliers looking to import and export Chinese goods, is battling a turbulent macro outlook as it seeks to facilitate domestic Chinese and international trade.
On Wednesday, the firm -- in which U.S. Internet company Yahoo is a key investor -- posted a net profit of 396.46 million yuan ($57.87 million) for the three months ended June, compared with 153.14 million yuan in the same period last year.
That beat a forecast of 285.03 million yuan according to 3 analysts polled by Reuters.
Alibaba's shares debuted in Hong Kong last November in the city's most popular IPO.
But the stock plummeted nearly 32 percent during the quarter, amid ongoing concerns about the growth of its premium memberships as U.S. economic woes fan out across the world.
The stock easily underperformed a 3.3 percent slide on the benchmark Hang Seng Index .HSI. ($1=6.849 Yuan) (Reporting by Alison Leung; editing by Jonathan Hopfner)
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Alibaba, which operates an online business-to-business site connecting buyers and suppliers looking to import and export Chinese goods, is battling a turbulent macro outlook as it seeks to facilitate domestic Chinese and international trade.
On Wednesday, the firm -- in which U.S. Internet company Yahoo is a key investor -- posted a net profit of 396.46 million yuan ($57.87 million) for the three months ended June, compared with 153.14 million yuan in the same period last year.
That beat a forecast of 285.03 million yuan according to 3 analysts polled by Reuters.
Alibaba's shares debuted in Hong Kong last November in the city's most popular IPO.
But the stock plummeted nearly 32 percent during the quarter, amid ongoing concerns about the growth of its premium memberships as U.S. economic woes fan out across the world.
The stock easily underperformed a 3.3 percent slide on the benchmark Hang Seng Index .HSI. ($1=6.849 Yuan) (Reporting by Alison Leung; editing by Jonathan Hopfner)
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AU to build 4 new LCD plants in Taiwan over 10 yrs
(Adds details)
TAIPEI, Aug 27 (Reuters) - AU Optronics Corp , the world's No.3 LCD maker, will invest about T$400 billion ($12.7 billion) to build four new LCD plants over the next 10 years, as part of the firm's commitment to invest in Taiwan.
To strengthen its long-term competitiveness in the display market, dominated by Samsung Electronics and LG Display , AU Chairman K.Y. Lee announced the plan after meeting with Taiwan premier Liu Chao-shiuan on Wednesday.
The new plants will be located in central Taiwan and AU (AUO.N: Quote, Profile, Research, Stock Buzz) is also planning to attract upstream component makers to build an LCD complex together, the statement said.
Under AU's plan, the first liquid crystal display (LCD) plant will use more advanced generation 10 or above manufacturing technology, with operations starting in 2011-2012, but the firm gave no capacity estimates yet.
The news came after the Taipei stock market closed on Wednesday. AU shares rose 2.3 percent, outpacing the main TAIEX's 1.7 percent gain.
The company announced the long-term investment having warned of an impending slowdown in late July.
Blaming high fuel costs and a global economic downturn that hurt spending on new PCs and flat-screen TVs, AU predicted lower prices and smaller shipment growth for the third quarter.
AU has invested T$600 billion in the industrial science parks in central Taiwan, a local newspaper reported last week.
Earlier this month, Hon Hai Precision , Taiwan's biggest electronics parts company, also unveiled several major plans to expand its presence in the island, with total investments exceeding T$100 billion. (US$1=T$31.5) (Reporting by Baker Li, Editing by Ken Wills)
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TAIPEI, Aug 27 (Reuters) - AU Optronics Corp , the world's No.3 LCD maker, will invest about T$400 billion ($12.7 billion) to build four new LCD plants over the next 10 years, as part of the firm's commitment to invest in Taiwan.
To strengthen its long-term competitiveness in the display market, dominated by Samsung Electronics and LG Display , AU Chairman K.Y. Lee announced the plan after meeting with Taiwan premier Liu Chao-shiuan on Wednesday.
The new plants will be located in central Taiwan and AU (AUO.N: Quote, Profile, Research, Stock Buzz) is also planning to attract upstream component makers to build an LCD complex together, the statement said.
Under AU's plan, the first liquid crystal display (LCD) plant will use more advanced generation 10 or above manufacturing technology, with operations starting in 2011-2012, but the firm gave no capacity estimates yet.
The news came after the Taipei stock market closed on Wednesday. AU shares rose 2.3 percent, outpacing the main TAIEX's 1.7 percent gain.
The company announced the long-term investment having warned of an impending slowdown in late July.
Blaming high fuel costs and a global economic downturn that hurt spending on new PCs and flat-screen TVs, AU predicted lower prices and smaller shipment growth for the third quarter.
AU has invested T$600 billion in the industrial science parks in central Taiwan, a local newspaper reported last week.
Earlier this month, Hon Hai Precision , Taiwan's biggest electronics parts company, also unveiled several major plans to expand its presence in the island, with total investments exceeding T$100 billion. (US$1=T$31.5) (Reporting by Baker Li, Editing by Ken Wills)
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Germany July Import and Export Prices: Summary (Table)
By Kristian Siedenburg
Aug. 27 (Bloomberg) -- Following is a summary of July import prices from the German Federal Statistics Office in Wiesbaden:
===============================================================================
July June May April March Feb. Jan. Dec. Nov.
2008 2008 2008 2008 2008 2008 2008 2007 2007
===============================================================================
----------------------------MOM%----------------------------
Import prices MoM 0.6% 1.5% 2.4% 0.9% 0.4% 1.1% 0.8% -0.1% 0.7%
ex energy 0.6% 0.5% 0.6% 0.3% 0.0% 0.9% 0.9% 0.1% -0.4%
Export prices 0.5% 0.5% 0.4% 0.3% 0.2% 0.6% 0.7% 0.0% 0.0%
----------------------------YOY%----------------------------
Import prices YoY 9.3% 8.9% 7.9% 5.7% 5.7% 5.9% 5.2% 3.7% 3.5%
ex energy 3.5% 2.5% 2.0% 1.5% 1.5% 1.6% 0.7% 0.1% -0.4%
Export prices 3.3% 2.7% 2.3% 2.2% 2.2% 2.2% 1.8% 1.3% 1.2%
---------------------Three-month Change---------------------
Import prices 4.4% 3.7% 2.9% 2.2% 1.9% 1.6% 1.6% 1.3% 0.9%
ex energy 1.3% 1.1% 1.3% 1.6% 1.4% 0.8% 0.2% 0.0% -0.3%
Export prices 1.2% 1.0% 1.1% 1.2% 1.1% 0.7% 0.3% 0.1% 0.1%
===============================================================================
July June May April March Feb. Jan. Dec. Nov.
2008 2008 2008 2008 2008 2008 2008 2007 2007
===============================================================================
----------------------------Index----------------------------
Import prices 118.8 118.1 116.3 113.6 112.6 112.1 110.9 110.0 110.1
ex energy 106.5 105.9 105.4 104.8 104.5 104.5 103.6 102.7 102.6
Export prices 110.4 109.8 109.2 108.8 108.5 108.3 107.7 107.0 107.0
===============================================================================
NOTE: Index level based at 2000=100. Data is unadjusted for
seasonal influences. The three month change is calculated as
the average index level of the latest three months divided by
the average index level of the previous three months.
SOURCE: Statistisches Bundesamt (German Federal Statistical Office)
To contact the reporter on this story: Kristian Siedenburg in Budapest at ksiedenburg@bloomberg.net
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