Rio Gains in Sydney After Report BHP May Revive Bid

By Rebecca Keenan

March 30 (Bloomberg) -- Rio Tinto Group, the world’s third- largest mining company, rose in Sydney trading after the Sunday Telegraph reported that BHP Billiton Ltd. may revive its failed takeover bid.

Rio, seeking approval for a proposed $19.5 billion investment from Aluminum Corp. of China, rose 0.6 percent to A$57.20 on the Australian stock exchange. Melbourne-based BHP declined 4.3 percent and the benchmark index fell 1.9 percent.

BHP may revisit a takeover or form partnerships with Rio after informal meetings between the management of the two companies, according to the Sunday Telegraph. BHP abandoned its $66 billion bid for Rio last year, citing declining commodity markets, the slowing global economy and Rio’s high-level of debt.

“So much has changed since the deal break which we feel may compel BHP to reconsider bidding,” Liberum Capital Ltd. analysts led by Michael Rawlinson said in a March 27 report. “Capital markets are reopening, easing concerns over both the financiablity of a new deal and the viability of European Union forced disposals.”

Rio Chief Financial Officer Guy Elliot said last week it had an alternative plan should the planned deal with Chinalco, as the state-owned company is known, fail.

BHP spokeswoman Samantha Evans declined today to comment on the report when contacted.

Australia’s Treasurer Wayne Swan will make a decision on whether to approve Chinalco’s proposal after he receives a recommendation from the Foreign Investment Review Board. Swan said today he has met with “all involved in the application.”

“As is usual, when there are foreign-investment applications around I will meet with leaders and members of those organizations from all sides,” he said in an interview in Tokyo.

To contact the reporter on this story: Rebecca Keenan in Melbourne at rkeenan5@bloomberg.net

Read more...

Ex-Vitol Trader Serotta to Start $100 Million Oil Hedge Fund

By Grant Smith

March 30 (Bloomberg) -- Andrew Serotta, the Vitol Group oil trader who left last year as the firm scaled back its derivatives business, said he plans to start a $100 million hedge fund called Logista Capital to trade in crude futures.

The fund will employ four other people and start in either August or September, Serotta, 38, said. It will trade options as well as the difference between two futures contracts, known as spreads. He has raised about 25 percent of the $100 million and will contribute a portion of the capital himself.

“The markets are in a general state of disarray, it’s a perfect time to launch,” Serotta said in a telephone interview from Houston on March 27. “The number of relative value traders in a position to take advantage of the opportunities out there is severely diminished.”

Serotta will start Logista as the global hedge fund industry contracts. Hedge-fund liquidations rose to an all-time high last year as managers posted record losses, according to Hedge Fund Research Inc. The industry may shrink 11 percent this year to $1.33 trillion, a survey by Deutsche Bank AG said. Crude oil has rallied this year, recovering after a $100 a barrel collapse from July’s record prices.

“I’m starting to see investors slowly beginning to allocate to hedge funds again, especially those that are trading liquid strategies,” said Peter Rup, chief investment officer at New York-based Orion Capital Management LLC, which invests in hedge funds. “Energy is attractive at the moment.”

BlueGold Capital

Another former Vitol Group trader, Pierre Andurand, left the company in 2007 to found a $1.1 billion commodity investment fund with colleagues from the Geneva-based firm. BlueGold Capital Management LLP returned 209 percent last year by anticipating the rally and then collapse in crude prices.

“I’m going to keep doing exactly what I was doing at Vitol,” Serotta said. Logista will place trades on the price difference between monthly crude oil futures contracts, so- called time-spreads, and on options that give the right to buy or sell oil at specified prices, Serotta said.

In January, Serotta said he was asked to leave Vitol Capital Management, a Houston-based unit of the closely held commodities trader, because the company wanted to focus on physical commodity markets rather than more “visible” derivatives trading.

Vitol’s decision to reduce its involvement in the derivatives trading was linked to the reclassification of the unit’s trades by U.S. regulators as speculative, Serotta said at the time. A Vitol spokesman said at the time that the Commodity Futures Trading Commission, which regulates U.S. markets, hadn’t notified Vitol of any change in its trading status.

Futures Contracts

The Wall Street Journal reported Dec. 24 that at one point in July, the Vitol hedge fund had amassed futures contracts on the New York Mercantile Exchange that represented 11 percent of all crude-oil bets on the exchange. Serotta said on Jan. 7 that he wasn’t aware that any trader at Vitol Capital Management had contracts that amounted to 11 percent of the market.

Time spreads for New York oil futures have reached records this year as a glut of crude depressed prices for immediate delivery. The so-called contango structure prompted oil companies and investment banks such as Royal Dutch Shell Plc and Citigroup Inc. to store oil on tankers to profit from the higher long-term price.

“The contango is going to be here for a while,” Serotta said. “As long as the world is in the dismal state it is, and there’s plenty spare OPEC capacity, it’s going to be difficult to get the market back into backwardation.”

To contact the reporter on this story: Grant Smith in London at gsmith52@bloomberg.net

Read more...

Palm Oil Declines in Malaysia as Recession Curbs Demand Outlook

By Luzi Ann Javier

March 30 (Bloomberg) -- Palm oil futures in Malaysia dropped for a second day as crude oil fell on speculation demand for commodities will remain weak because of the recession.

Crude oil weakened in New York on concern global stockpiles may increase as the world economy slumps. Industrial production in Japan, the world’s third-largest oil consumer, fell for a fifth month in February, the longest losing streak since 2001, raising concerns the slump may be deepening.

“If people are under-forecasting the global downturn and it turns out to be worse, it will impact consumption of all commodities, including crude oil and to some extent palm oil,” said Ivy Ng at CIMB Research Sdn. in Kuala Lumpur.

Palm oil for June delivery, fell 0.2 percent to 1,987 ringgit ($545) a metric ton on the Malaysia Derivatives Exchange at the 12:30 p.m. break in Kuala Lumpur.

Crude oil for May delivery fell as much as $1.26, or 2.4 percent, to $51.12 a barrel in after-hours electronic trading on the New York Mercantile Exchange. It was at $51.35 at 12:06 p.m. Singapore time. Crude typically leads palm oil as the tropical commodity can be used to make biofuels.

The joint marketing office of Indonesia, the world’s biggest palm oil producer, said March 27 it failed to sell any of the 2,000 tons it had offered at a tender in Jakarta due to low bids.

To contact the reporter for this story: Luzi Ann Javier in Singapore at ljavier@bloomberg.net

Read more...

Chalco to Cut Spending by 34% This Year, Luo Says

By Helen Yuan and Xiao Yu

March 30 (Bloomberg) -- Aluminum Corp. of China Ltd., the nation’s biggest producer of the metal, said it will cut capital spending by 34 percent to as much as 13 billion yuan ($1.9 billion) this year as demand slides.

The Beijing-based company will also tighten mergers and acquisitions in domestic and overseas markets, as well as suspend planned projects to “cope with current difficulties,” President Luo Jianchuan told reporters today in Shanghai.

Chalco forecasts a first-quarter loss, after posting a 99.9 percent profit drop in 2008, because of lower aluminum prices and slumping demand. The company expects demand for the metal to pick up in the second half as China spends 4 trillion yuan in a stimulus package to reach economic growth of 8 percent this year.

“Cutting costs and spending should be the most effective way to improve earnings,” said Barry He, a Hong Kong-based analyst with Morgan Stanley today. “It’s not a good time for mergers and acquisitions because the whole industry is unprofitable.”

Chalco fell 3.5 percent to 10.52 yuan as of 12 p.m. in Shanghai after declining as much as 5.2 percent. In Hong Kong trading, the stock slumped 10 percent to HK$4.65, the biggest decline since Nov. 6.

Aluminum futures have gained 11 percent this year in Shanghai after tumbling 35 percent in 2008. Prices rose after the nation’s stimulus package started to take effect and because of “seasonal” domestic demand, Luo said.

“Aluminum prices have hit bottom in the first two months,” Luo said.

Output Cut

Chalco has reduced alumina production by 40 percent of capacity and aluminum output by 24 percent, Luo said. The company may improve capacity utilization when the market recovers in the second half of this year, he said. Local prices may stay between 13,000 yuan and 14,000 yuan a ton, he said.

“We will use up our high-cost inventories in the first quarter,” Chief Financial Officer Joshua Chen Jihua said at the same media conference. The value of the company’s stockpiles depreciated by 1 billion yuan at the end of 2008, he said.

Demand for the metal, used in window frames and planes, may post the slowest gain since 1997, Wang Feihong, an analyst at Beijing Antaike Information Development Co., said Nov. 12.

“It’s too early to say aluminum prices have bottomed,” said Sabrina Xie, a Shenzhen-based analyst at Guotai Junan Securities Co.

To contact the reporter on this story: Helen Yuan in Shanghai at hyuan@bloomberg.netjriseborough@bloomberg.net; Xiao Yu in Beijing at yxiao@bloomberg.net.

Read more...

China Stocks Undervalued to Invesco on Government Spending Plan

By Chua Kong Ho

March 30 (Bloomberg) -- China’s stock market, the world’s second-best performer this year, is “undervalued” as prospects for economic growth improved with the government’s efforts to stimulate demand, Invesco Ltd. said.

Infrastructure and consumer stocks will benefit most from the country’s 4 trillion yuan ($585 billion) spending plan, said Joseph Tang, a Hong Kong-based investment director at Invesco, which manages about $343 billion in assets worldwide.

“The market is still undervalued at these levels,” Tang said in a March 27 phone interview. “We’ve probably seen the worst in the fourth quarter, and though we’ll see another slow quarter, things should look better in the second half.”

Tang’s Invesco China Opportunity Fund has risen 29 percent this year, beating 94 percent of 1,407 China focused funds, according to data compiled by Bloomberg. Invesco is one of 79 foreign institutions with government approval to invest in local-currency stocks and bonds.

The Shanghai Composite Index has rallied 30 percent this year, trailing only Peru among 89 benchmark stock gauges Bloomberg tracks globally, as government data pointed to a recovery in the world’s third-largest economy. The Shanghai Composite trades at 18.7 times reported earnings, up from 13 times in October.

China’s urban fixed-asset investment, including roads and railways, jumped 26.5 percent in the first two months from a year earlier, the government said this month. New bank lending quadrupled in February, while vehicle sales rose 25 percent in the same month.

‘Pain’

Investor optimism in China’s rebound may be “overdone,” Morgan Stanley said last week, adding that shareholders will endure “pain” as the government’s measures fail to stem a slide in earnings.

Profits of companies on the CSI 300 Index, measuring yuan- denominated shares in both the Shanghai and Shenzhen exchanges, will tumble an average 15.4 percent in 2009, analysts Jerry Lou, James Cao and Allen Gui wrote in a note on March 27.

“The poor-quality GDP growth, driven by policy stimulus, won’t make much difference to the earnings recession path in 2009,” they said. “Recent market optimism, triggered by early recovery of several macro indicators, we believe is overdone.”

The Shanghai Composite’s valuation is 65 percent higher than the 11.3 multiple that stocks on the Hang Seng China Enterprises Index trade at, data compiled by Bloomberg show. The Hang Seng China index is made up of mainland shares traded in Hong Kong, and have no foreign ownership restrictions.

‘More Aggressive’

Shanghai-traded shares of PetroChina Co., the nation’s biggest company, fetch twice the valuation that they get in Hong Kong. The last time the difference in multiples was this wide, the Chinese shares lost 19 percent in 30 days.

UBS AG, the largest authorized overseas investor in the country’s local-currency stock market, said March 26 it expects yuan-denominated stocks to rally as long as the government continues to encourage banks to lend. China Asset Management Co., the nation’s biggest fund company, said March 27 it will be “more aggressive” in seizing opportunities exposed by last year’s 65 percent plunge in the Shanghai Composite.

Financial services companies made up 31 percent of the Invesco fund, according to its Feb. 27 fact sheet. Beijing-based China Life Insurance Co. and Shenzhen-based Ping An Insurance (Group) Co., the nation’s largest insurers by market value, are its two biggest holdings, the document showed. Insurers are signing up new customers and their stock-market investments may gain following the rally, Tang said.

Dashang, Daqin Railway

The fund also owns shares of Dashang Group Co., a department-store operator based in the northeastern city of Dalian, as well as Datong-based Daqin Railway Co., which operates China’s biggest coal transport line, the fact sheet showed. Beijing-based China Sinoma International Engineering Co., another Invesco holding, said this month it won $49 million of contracts to build and supply equipment for cement plants.

Tang declined to comment on specific stocks, citing company policy.

Premier Wen Jiabao, who first announced his stimulus package in November, also unveiled plans this year to rejuvenate 10 industries, including autos, steel, petrochemicals and textiles. Wen said this month his government has “adequate ammunition” to revive the economy and is able to increase spending at any time.

The government also has “room” for more interest rate cuts as consumer prices may end the year unchanged, Zhang Jianhua, the research head of the People’s Bank of China, said March 28 at a forum in Beijing. The central bank has lowered borrowing costs five times since September.

“We’re comfortable that the market is finding valuation support,” Tang said, adding that an “improvement in the global economy” would be needed for a stronger rally.

To contact the reporter on this story: Chua Kong Ho in Shanghai at kchua6@bloomberg.net

Read more...

Australia Farm Confidence at Two-Year Low, Bank Says

By Madelene Pearson

March 30 (Bloomberg) -- Farmer confidence in Australia, the world’s fourth-largest wheat exporter, dropped to the lowest in two years as the global financial crisis weighed on sentiment, Rabobank Groep NV said.

The rural confidence survey showed 48 percent of farmers expect conditions to worsen, up from 39 percent in the previous quarter, the world’s largest agricultural lender said today in an e-mailed report. Only 16 percent of farmers expect conditions to improve, down from 23 percent previously, it said.

The Reuters/Jeffries CRB Index of 19 raw materials slumped 45 percent in the past year as the worldwide recession sapped demand for commodities and prices dropped. Farmer confidence in Australia has dropped the past four quarters.

“The decline in confidence appeared to be more indicative of farmers’ concerns about the future negative impact of the global financial crisis, rather than a reflection of anything that had actually been experienced,” Peter Knoblanche, Rabobank’s general manager rural Australia said in the statement. The biggest declines in confidence were among sheep, beef and dairy producers, the bank said.

To contact the reporter on this story: Madelene Pearson in Melbourne on mpearson1@bloomberg.net

Read more...

Hong Kong Stocks Drop on Bank Earnings Concern; Chalco Falls

By Jonathan Burgos

March 30 (Bloomberg) -- Hong Kong stocks declined, snapping a two-day advance, on concern banks’ earnings will decline and after commodity prices tumbled.

China Construction Bank Corp., the world’s second-largest lender by market value, fell 6.6 percent after reporting a slump in fourth-quarter profit. Aluminum Corp. of China Ltd., the nation’s biggest producer of the metal and also known as Chalco, dropped 11 percent after saying it would be unprofitable in the first quarter. Cnooc Ltd., China’s biggest offshore oil explorer, slid 4.7 percent after crude oil futures dropped.

“I don’t think we’ve seen the beginning of a bull run in the past week,” Pauline Dan, chief investment officer at Samsung Investment Trust Management in Hong Kong, which oversees $61 billion in assets. “The external environment is still very fluid. There are issues in the banking sector that still need to be resolved.”

The Hang Seng Index slipped 3 percent to 13,691.99 at the 12:30 p.m. break in Hong Kong, snapping a two-day, 3.7 percent advance. The gauge has fallen 4.8 percent this year, extending last year’s 48 percent slump amid a global recession. Shares on the measure trade at 12 times estimated profit, down from 18.6 times at the beginning of 2008.

The Hang Seng China Enterprises Index, which tracks the so- called H shares of Chinese companies, fell 4.9 percent to 8,064.48.

Missed Estimates

China Construction dropped 6.6 percent to HK$4.39. The bank posted a 30 percent drop in fourth-quarter profit, missing analysts’ estimates, after increasing provisions to cover delinquent loans. Industrial & Commercial Bank of China Ltd., the world’s most profitable bank, fell 4.8 percent to HK$3.99.

JPMorgan Chase & Co.’s Chief Executive Officer Jamie Dimon said in an interview with CNBC that March was a “little tougher” than January and February for the bank. Kenneth Lewis, Bank of America Corp.’s CEO, said the lender’s trading book wasn’t as good as in the first two months.

Chalco slumped 11 percent to HK$4.62. The company said it would be unprofitable in the first quarter, extending losses because of lower metal prices and output cuts. Cnooc fell 4.7 percent to HK$7.94. Crude oil for May delivery lost 3.6 percent to $52.38 a barrel in New York on March 27, and slid as much as 2.4 percent today.

China Coal Energy Co., the nation’s second-biggest producer of the fuel, retreated 6.6 percent to HK$5.83 after missing analysts’ earnings expectations. Last year’s net income rose 19 percent to 7.14 billion yuan ($1 billion), below the 8.56 billion yuan median estimate of analysts surveyed by Bloomberg.

Esprit Slumps

Jiangxi Copper Co., China’s biggest producer of the metal, slipped 9.4 percent to HK$8.22. A measure of six metals traded on the London Metal Exchange, including aluminum, copper and zinc, lost 1 percent on Nov. 27.

Esprit Holdings Ltd. dropped 10 percent to HK$38.05. The company’s Chief Executive Officer Heinz Krogner plans to step down, Frankfurter Allgemeine Sonntagszeitung reported on March 28, without saying where it got the information or giving a reason for the resignation. Shares of Hong Kong’s biggest clothier slumped 9.9 percent to HK$43.10 months on March 27 after rival Hennes & Mauritz AB’s profit fell and Thomas Grote, president of its flagship brand, resigned his post as director.

China Cosco Holdings Co., the world’s largest operator of dry-bulk ships, lost 9.3 percent to HK$5.16. The Baltic Dry Index slipped 2.1 percent on March 27, the 13th straight decline for the benchmark measure of shipping costs for commodities.

China Resources Land Ltd., a property developer, rose 9.1 percent to HK$12 after saying profit surged 42 percent last year. Morgan Stanley raised its rating for the stock to “overweight.”

Citic Pacific Ltd., an investment company controlled by China’s government after a bailout, gained 2.6 percent to HK$9.38 after JPMorgan raised its share-price estimate to HK$8.3 from HK$6.

To contact the reporter on this story: Jonathan Burgos in Singapore at jburgos4@bloomberg.net.

Read more...

Japan Stocks Plunge on Developer Bankruptcy; Carmakers Slump

By Masaki Kondo

March 30 (Bloomberg) -- Japanese stocks fell the most in more than two months on concern the recession will trigger more corporate failures and demand for vehicles will contract.

Mitsui Fudosan Co., Japan’s No. 1 real estate developer, plunged 9.2 percent after smaller rival Azel Corp. went bankrupt. Mizuho Financial Group Inc. lost 8.8 percent as Goldman Sachs Group Inc. recommended selling the stock, and JPMorgan Chase & Co. and Bank of America Corp. said performance deteriorated this month. Mazda Motor Corp. plunged 12 percent as Japanese auto production declined the most since 1967. Car-parts maker Denso Corp. sank 7.7 percent after the U.S. said bankruptcy may be the best alternative for American automakers.

The Nikkei 225 Stock Average declined 390.89, or 4.5 percent, to close at 8,236.08 in Tokyo, the sharpest drop since Jan. 15. The Topix index fell 34.99, or 4.2 percent, to 789.54.

“The fundamentals of the global economy still remain very weak, and I can’t yet draw any rosy outlook,” said Hisakazu Amano, head of fund management at Tokyo-based T&D Asset Management Co., which oversees about $39 billion. “A recovery in the real estate market isn’t in sight, with tightening money flow to the sector and contracting demand for property.”

The Nikkei gained 14 percent through March 27, set for the best monthly performance since July 1995, as the U.S. outlined a plan to buy illiquid assets from banks and the Bank of Japan stepped up efforts to boost lending. The gauge’s members traded at 100 times estimated net income for this fiscal year, up from 69.9 times at the beginning of this month.

Azel filed for bankruptcy with 44.2 billion yen ($452 million) in debt, the company said today, citing a slump in condominium sales, difficulty in getting loans, and failures among construction companies. Bankruptcies among Japan’s listed corporations reached 33 last year, a postwar record, according to Tokyo Shoko Research Ltd.

Domestic production at Japan’s 12 manufacturers fell to 481,396 vehicles from a year earlier, the Tokyo-based Japan Automobile Manufacturers Association said in a statement today. Exports dropped 64 percent to 212,107 vehicles as the carmakers reduced shipments to North America by 66 percent.

To contact the reporter for this story: Masaki Kondo in Tokyo at mkondo3@bloomberg.net.

Read more...

Asian Stocks, U.S. Futures Decline on Renewed Bank Concerns

By Patrick Rial

March 30 (Bloomberg) -- Asian stocks fell, paring the MSCI World Index’s biggest monthly rally since 1991, and U.S. futures slumped as U.S. Treasury Secretary Timothy Geithner said some banks will need “large amounts” of government aid.

Mizuho Financial Group Inc., Japan’s second-largest listed bank, lost 8.8 percent after Goldman Sachs Group Inc. told investors to sell the shares. Aluminum Corp. of China Ltd. tumbled 11 percent after saying profit plunged. BHP Billiton Ltd., the world’s No. 1 mining company, dropped 4.3 percent in Sydney after oil and copper prices fell. Stocks extended declines as the U.S. said General Motors Corp. and Chrysler LLC must overhaul recovery plans to justify further taxpayer aid.

“We’re seeing the brakes being put on the rally,” said Naoteru Teraoka, who helps oversee $21 billion at Tokyo-based Chuo Mitsui Asset Management Co. “Everyone knows the economic fundamentals are horrid, so the challenge becomes predicting when we’ll see a recovery.”

The MSCI Asia Pacific Index lost 3.5 percent to 82.53 as of 2:45 p.m. in Tokyo, following a five-day, 7.5 percent jump that took valuations to the highest since December 2007. Japan’s Nikkei 225 Stock Average slipped 3.8 percent to 8,298.53, while Hong Kong’s Hang Seng Index declined 3 percent. Benchmark indexes throughout the region dropped.

Esprit Holdings Ltd., a clothing retailer, slumped 10 percent in Hong Kong after a newspaper reported the company’s chief executive officer will step down. China Petroleum & Chemical Corp., Asia’s biggest refiner, slipped 2.6 percent on a slump in profit. Alesco Corp., which makes building materials and home products, soared 22 percent in Sydney after saying it’s considering selling a unit.

‘Sell’ U.S. Stocks

Futures on the Standard & Poor’s 500 Index dropped 1.9 percent. The gauge slumped 2 percent on March 27. Investors should sell U.S. stocks because earnings are likely to keep weakening, according to a Morgan Stanley report. The Standard & Poor’s 500 Index rose 21 percent in the past 14 trading days, the most since 1938, according to data compiled by New York- based S&P analyst Howard Silverblatt.

MSCI’s Asian benchmark gauge has climbed 9.8 percent in March, as governments from the U.S. to Japan widened measures to ease the global financial crisis and revive economic growth. The monthly gain was the most since June 1999. The MSCI World Index has risen 9.1 percent this month, the most since October 1990.

The 30 members of the Organization for Economic Cooperation and Development are likely to see their economies contract by 4.2 percent this year, the group’s Secretary General Angel Gurria said on March 27. Japanese industrial production fell 9.4 percent in February from the previous month, government data showed today, the longest streak of declines since 2001.

Bank Shares Decline

“The fundamentals of the global economy still remain very weak, and I can’t yet draw any rosy outlook,” said Hisakazu Amano, head of fund management at Tokyo-based T&D Asset Management Co., which oversees about $39 billion.

Mizuho retreated 8.8 percent to 197 yen after Goldman Sachs lowered the stock to “sell” from “neutral.” The bank is among the most expensive in Japan based on book value and its high level of stock investments makes it especially risky, analyst Toyoki Sameshima wrote in a report.

Mitsubishi UFJ Financial Group Inc., Japan’s biggest lender by value, lost 7.4 percent to 488 yen. National Australia Bank Ltd., Australia’s largest by assets, declined 1.4 percent to A$20.79.

A gauge of financial stocks included in the MSCI Asia Pacific Index slumped 5 percent. It lost 30 percent in the last six months, the worst performer among 10 industry groups.

‘Tougher’ Month

“Some banks are going to need some large amounts of assistance,” the Treasury’s Geithner said yesterday on the ABC News program “This Week.” Geithner announced this month a plan shore up the nation’s banks with a public-private partnership to finance the purchase of illiquid real-estate assets.

JPMorgan Chase & Co.’s Chief Executive Officer Jamie Dimon said in an interview with CNBC that March was a “little tougher” than January and February for the bank. Kenneth Lewis, Bank of America Corp.’s CEO, said the lender’s trading book wasn’t as good as in the first two months. The two said earlier this month that their banks were profitable through February, excluding taxes and provisions, contributing to advances in financial shares.

Shares in the MSCI Asia Pacific Index traded at 17 times trailing earnings on March 27, according to data compiled by Bloomberg, the most expensive since December 2007.

Slumping Profit

Aluminum Corp. of China, the country’s biggest maker of the metal, dropped 11 percent to HK$4.62. President Luo Jianchuan said the company will cut capital spending by 34 percent this year and limit spending on acquisitions after saying yesterday profit fell 99.9 percent in 2008.

China Petroleum & Chemical Corp., Asia’s biggest refiner, lost 2.6 percent to HK$4.85 after reporting a 47 percent slide in net income for 2008. The company said first-quarter profit may surge more than 50 percent after the government relaxed fuel-price controls and crude oil costs fell.

BHP tumbled 4.3 percent to A$32.55. Sims Metal Management Ltd., the world’s biggest recycler of scrap metal, lost 7.6 percent to A$17.50 after Goldman Sachs recommended investors sell the shares.

Crude oil for May delivery slumped 3.6 percent to $52.38 a barrel in New York on March 27, and slid as much as 2.4 percent today. A measure of six metals traded on the London Metal Exchange, including copper and zinc, lost 1 percent.

Esprit slumped 10 percent to HK$38.05. The company’s CEO Heinz Krogner plans to step down, Frankfurter Allgemeine Sonntagszeitung reported on March 28, without saying where it got the information or giving a reason for the resignation.

Alesco jumped 22 percent to A$1.97. The company said today in a regulatory filing that it’s considering the sale of its scientific and medical unit, Biolab.

Kawasaki Kisen Kaisha Ltd. plunged 9.1 percent to 308 yen. Mitsui O.S.K. Lines Ltd., Japan’s second-biggest bulk shipper, lost 7.9 percent to 493 yen. The Baltic Dry Index lost 2.1 percent on March 27, the 13th straight decline for the benchmark measure of shipping costs for commodities.

To contact the reporter for this story: Patrick Rial in Tokyo at prial@bloomberg.net.

Read more...

Barclays, BHP, Carphone Warehouse: U.K., Irish Equity Preview

By Kevin Crowley

March 30 (Bloomberg) -- The following is a list of companies whose shares may have unusual price changes in U.K. and Irish markets today. Stock symbols are in parentheses and prices are from the last market close.

The benchmark FTSE 100 Index fell 26.35 points, or 0.7 percent, to 3,898.85. The FTSE All-Share Index declined 0.6 percent, and Ireland’s ISEQ Index dropped 0.7 percent.

888 Holdings Plc (888 LN): The second-largest U.K. online gambling company is due to report earnings. 888 increased 3.5 pence, or 3.2 percent, 112.5 pence.

Barclays Plc (BARC LN): The U.K.’s third-biggest bank won’t seek government asset guarantees after regulators said the lender didn’t need additional capital, according to a person familiar with the situation. Barclays climbed 33.7 pence, or 24 percent, to 173.8 pence.

BG Group Plc (BG/ LN): The U.K.’s third-largest biggest natural gas company plans to bid for North Sea oil producer Oranje Nassau Groep BV on April 3, the Sunday Times reported, without saying where it got the information. BG Group declined 9 pence, or 0.9 percent, to 1,051 pence.

BHP Billiton Ltd. (BLT LN): The world’s biggest mining company has been given approval from its biggest investors to pursue acquisitions, the Sunday Telegraph reported, citing some of the company’s 10 largest shareholders. The stock fell 50 pence, or 3.4 percent, to 1,409 pence.

British Airways Plc (BAY LN): Europe’s third-largest carrier’s merger talks with Iberia Lineas Aereas de Espana SA have come to a virtual halt and at least a dozen issues still remain to be solved, the London-based Times reported, citing people close to the talks. BA declined 4.3 pence, or 3.1 percent, to 136.7 pence.

BT Group Plc (BT/A LN): The U.K.’s largest phone company will probably write down the value of its Global Services unit by more than 300 million pounds ($427 million), the Mail on Sunday reported, without saying where it got the information. BT dropped 2.1 pence, or 2.7 percent, to 76.9 pence.

Carphone Warehouse Group Plc (CPW LN): The U.K. mobile phone retailer is considering bidding for Tiscali SpA’s British business after talks between the Italian Internet company and Rupert Murdoch’s British Sky Broadcasting Group Plc broke down, the Daily Telegraph reported, without citing anyone. The stock rose 1.75 pence, or 1.4 percent, to 125.75 pence.

Dana Petroleum Plc (DNX LN): The explorer in the North Sea and Egypt is scheduled to report earnings. Dana Petroleum fell 22 pence, or 1.9 percent, to 1,160 pence.

James Halstead Plc (JHD LN): The U.K. provider of flooring for Moscow’s Kremlin Conference Palace is scheduled to report earnings. The share advanced 8.25 pence, or 2.1 percent, to 399.25 pence.

Headlam Group Plc (HEAD LN): The U.K. distributor of floor coverings is due to report earnings. Headlam declined 2 pence, or 0.8 percent, to 239 pence.

Liberty International Plc (LII LN): The largest owner of shopping malls in Britain has held talks with Peel Holdings Plc about buying Manchester’s Trafford Center in an all-share transaction, the Sunday Times reported, citing people familiar with the company. Liberty gained 8.75 pence, or 2.1 percent, to 433 pence.

Lamprell Plc (LAM LN): The construction and engineering company for oil and gas rigs is expected to report earnings. The stock dropped 1.75 pence, or 2.6 percent, to 65.5 pence.

Lloyds Banking Group Plc (LLOY LN): The biggest U.K. bank by customers has appointed Deutsche Bank AG to review its insurance businesses ahead of restructuring or selling them, the Financial Times reported, without saying where it got the information. Lloyds gained 7.1 pence, or 10.3 percent, to 76.1 pence.

Kentz Corp. (KENZ LN): The Irish engineering company is scheduled to report earnings. Kentz advanced 4.5 pence, or 4 percent, to 115.5 pence.

Marks & Spencer Group Plc (MKS LN): The U.K.’s biggest clothing retailer should hold a vote to determine whether or not investors want an independent chairman, the Financial Times reported, citing a group of pension funds. The shares fell 3.5 pence, or 1.3 percent, to 265.25 pence.

SSL International Plc (SSL LN): The maker of Durex condoms and Scholl shoes will this week increase its stake in Russia’s BLBV to 51 percent from 9 percent, the Mail on Sunday reported, without saying where it got the information. SSL dropped 10.75 pence, or 2.4 percent, to 437.75 pence.

Tesco Plc (TSCO LN): The U.K.’s largest supermarket owner plans to open 30 bank branches in its stores by the end of the year and offer checking accounts as it seeks to double profit at its retailing services arm. Tesco declined 13.6 pence, or 4.1 percent, to 317.5 pence.

Travis Perkins Plc (TPK LN): The U.K. building-materials distributor that owns the Wickes home-improvement chain plans to raise up to 300 million pounds in a rights offer or private placement to help the U.K. building-materials group pay debts of 1 billion pounds, the Sunday Telegraph said, citing unidentified people close to the company. Travis Perkins rose 5.25 pence, or 1.25 percent, to 424.5 pence.

VT Group Plc (VTG LN): The U.K. warship builder and services company is scheduled to report earnings. VT Group dropped 15.5 pence, or 3.1 percent, to 481.5 pence.

To contact the reporter on this story: Kevin Crowley in London kcrowley1@bloomberg.net

Read more...

European, U.S. Stock Futures Drop; Banks, Carmakers May Slump

By Sarah Jones

March 30 (Bloomberg) -- European and U.S. stock futures fell and Asian shares tumbled as the Obama administration warned that some banks will need more government aid and bankruptcy may be the best option for General Motors Corp. and Chrysler LLC. Treasuries and the yen advanced.

Deutsche Bank AG and UBS AG may decline after U.S. Treasury Secretary Timothy Geithner said some banks will need “large amounts” of assistance. Daimler AG might drop as an Obama administration official said GM and Chrysler must overhaul their recovery plans to justify further taxpayer aid. BHP Billiton Ltd. may decrease after commodities prices slid and Aluminum Corp. of China Ltd. said profit plunged.

Futures on the Dow Jones Euro Stoxx 50 Index, a benchmark for the euro region, slipped 2.3 percent to 1,993 at 7:17 a.m. in London. The U.K.’s FTSE 100 Index may drop 55, according to IG Markets, a betting firm. Futures on the Standard & Poor’s 500 Index dropped 2.2 percent.

“There may be a lack of confidence starting to creep in,” said Geoff Wilkinson, head of research at Mint Equities Ltd. in London. “Any bad news from the banks is going to be bad news for the indexes.”

The U.S. government’s comments on banks, GM and Chrysler helped push the yield on the 10-year Treasury note down five basis points to 2.71 percent, according to BGCantor Market Data, while the yen and the dollar climbed against the euro.

The MSCI World Index has advanced 19 percent since March 9, rebounding from its worst annual start on record, as banks from Citigroup Inc. to JPMorgan Chase & Co. said they made money in the first two months of 2009 and Geithner unveiled plans to rid financial firms of toxic assets.

Deutsche Bank, UBS

Deutsche Bank and UBS may follow their American depositary receipts lower after Geithner yesterday said “some banks are going to need some large amounts of assistance” on the ABC News program “This Week.”

The Treasury has about $135 billion left in a financial- stability fund while declining to say whether he will need to request additional money, Geithner said.

Separately, Sonntag reported UBS may cut 8,000 jobs and “write down billions,” without giving a currency unit or saying where it obtained the information.

Spain mounted its first major bank rescue in 16 years as the state took over Caja Castilla-La Mancha after efforts to choreograph its purchase by a rival lender failed.

Hypo Real Estate Holding AG may fall after the bailed out German commercial real-estate lender said it posted a wider- than-expected loss of 5.46 billion euros ($7.3 billion) last year and that the government will take an 8.7 percent stake as a first step toward nationalization.

Daimler, Volkswagen

Daimler and Volkswagen AG may lead carmakers lower as the Obama administration demanded the resignation of GM Chief Executive Officer Rick Wagoner and said Chrysler will get $6 billion in aid only if it completes a partnership with Italian carmaker Fiat SpA in 30 days.

Separately, PSA Peugeot Citroen, Europe’s second-biggest carmaker, fired Chief Executive Officer Christian Streiff amid the worst auto slump in more than 15 years.

BHP dropped 4.3 percent in Sydney trading as Aluminum Corp. of China posted a 99.9 percent decline in 2008 profit and forecast a loss in the first quarter on lower prices.

Separately, oil declined for a second day in New York on speculation stockpiles will increase, while copper retreated as investors’ optimism about an economic recovery faded.

To contact the reporter on this story: Sarah Jones in London at sjones35@bloomberg.net.

Read more...

U.S. Market Update

Daily Forex Fundamentals | Written by Trade The News | Mar 27 09 15:26 GMT |

Dow -113 S&P -11 NASDAQ -26 Investors are stepping back from stocks this morning ahead of the end of the first quarter of 2009, with the leading US equity indices erasing much of yesterday's gains early on. The data has been mixed, with personal spending up a hair in February, as expected, and personal income down ever so slightly. The final March U of Michigan confidence survey was a bit ahead of expectations. Front-month crude has taken a big hit, losing more than $2 this morning after Petrologistics reported that OPEC members produced 1M bpd over quota in March. Treasury prices are benefiting from the weaker equity market pushing the long bond yield back towards 3.6%. The financials are down moderately in early trading, with Citi down 8% and headed lower. The US ADR of Barclays is one big exception, trading up more than 10% on reports circulating that the bank has successfully passed the FSA's stress test, although there is no official confirmation of this as of yet. Other reports are noting that Barclays will wrap up the sale of its iShares unit as early as next Monday. Goldman Sachs and Bain Capital are leading suitors for the unit, with reports earlier in the week stating Goldman may have bid around $6B. Note that both Goldman and Morgan Stanley were initiated at Friedman Billings overnight, ahead of their upcoming quarterly earnings reports. Shares of GM are up 12% in early trading after the FT reported the automaker will not ask for additional aid in its viability plan next week, according to people familiar with the plan. Note that this flatly contradicts statements by Presidential auto advisor Steve Rattner, who said last Friday that both GM and Chrysler will require need "considerably more" Federal aid. "Like all management teams, GM and Chrylser tend to take more optimistic view on their businesses," said Rattner last week. Labor negotiations between the Detroit three and the UAW are continuing. There have been reports for a while that bondholders are holding up the process by refusing the government's terms on their share of losses, while the UAW has said its retirees should not make any more sacrifices. Last night the WSJ wrote that GM is unlikely to get concessions from the UAW by the March 31st deadline. It cited people close to the process as saying GM had negotiated "another agreement" that would let it cut as many as 10,000 workers by October. In other equity news, there has been more sunny news out of the semi sector. The chairman of Taiwan Semi said the industry is in better shape than it was a month ago, noting chip industry revenues would fall less than 30% in 2009. In addition, a Samsung executive said the market will begin seeing spot shortages of memory chips as inventory is inadequate already. Shares of MGM are down around 15% after the company hired bankruptcy council for its troubled Las Vegas City Center project. The company will likely miss a debt payment later today, violating loan covenants and adding to its considerable debt problems. KB Homes is up 5% after reporting a smaller-than-expected Q1 loss. Selected metrics quoted by the homebuilder showed some improvement, with net orders up and cancellations down on both a q/q and y/y basis, while its margins have improved considerably. In currencies, the greenback surged against the European currencies during the early New York morning, aided by numerous factors. On the data front, the European Industrial Orders plunged 34%, the largest decline on record. In an address to the German parliament, German Finance Minister Peer Steinbrueck said the euro was at risk if the EU's Stability and Growth Pact, which governs the continent's rules on budget deficits, was not taken seriously. The Swedish finance minister commented that over 20 out of 27 EU states could break 3% limit under the pact in 2010. Finally negative German state inflation data triggered a huge batch of pre-placed euro sell orders as technical factors came into play below the 1.3480 and 1.3400 levels. Note that the 1.3000 one-month option out positions that were placed with size earlier in the week. The Swiss Franc was softer throughout the European morning on chatter the Swizerland's KOF leading indicators would be weaker than the consensus forecast. Dealers were eyeing the 1.5180 level in EUR/CH, a level that was not breached in the wake of the SNB currency intervention back on March 12th. The softer European currencies were also seen in yen related-pairs, with the EUR/JPY cross dropping below the 130 handle to test 129.30, the GBP/JPY dipping to 139 before consolidating session losses. The JPY was off its best level as dealer sought to place bets ahead of the Japanese fiscal year-end that a softer JPY would emerge after the required repatriation process expires. Trade The News Staff Trade The News, Inc. Legal disclaimer and risk disclosure All information provided by Trade The News (a product of Trade The News, Inc. "referred to as TTN hereafter") is for informational purposes only. Information provided is not meant as investment advice nor is it a recommendation to Buy or Sell securities. Although information is taken from sources deemed reliable, no guarantees or assurances can be made to the accuracy of any information provided. 1. Information can be inaccurate and/or incomplete 2. Information can be mistakenly re-released or be delayed, 3. Information may be incorrect, misread, misinterpreted or misunderstood 4. Human error is a business risk you are willing to assume 5. Technology can crash or be interrupted without notice 6. Trading decisions are the responsibility of traders, not those providing additional information. Trade The News is not liable (financial and/or non-financial) for any losses that may arise from any information provided by TTN. Trading securities involves a high degree of risk, and financial losses can and do occur on a regular basis and are part of the risk of trading and investing.

Read more...

Euro Bulls Toss in the Towel as Budget Tension Mounts

Daily Forex Fundamentals | Written by Interactive Brokers | Mar 27 09 15:28 GMT |

It would be all too easy to lay blame for the overnight decline in the euro to $1.3312 against the U.S. dollar at the door of a slide in new orders for industrial goods across the Eurozone. Sure, the 34.1% plunge treats the catastrophic December drop of 23.8%, but the reality is that this data occurred in January and so some two months ago. Spot forex markets are sharper than this surely! The reality is that the need for the onset of quantitative easing by the Fed recently is slowly being seen as the necessary evil and likely to be adopted across each G10 nation. We noted at the time of the immediate aftermath that there should have been further follow-through euro buying as the view became the new anti-dollar regime. But the fact was there was none. As more up to date comment and data is digested by the market, the euro is fast losing its luster. Confirmation this morning of a deeper recession in Britain (yes, deeper than yesterday even!) came in the shape of an upwardly revised contraction of fourth quarter GDP, which weighed in with a quarter-over-quarter decline of 1.6%. Meanwhile the Land Registry announced that regardless of whether the proverbial Englishman's home might be his castle, it's around 15% less expensive than one year ago. The pound lost some of its weekly gain as investors once again warmed to a dollar, which gained around 1% on a trade weighted basis this morning. The pound is lower at $1.4320 from $1.4434 Thursday. But there were more interesting developments in Euroland beyond the industrial data. While British economic output was decaying, the French economy contracted 1.1%. Meanwhile the debate on budget spending versus quantitative easing is starting to heat up. Casting the first stone was a WSJ interview with ECB vice president, Lucas Papademos, who said that in order to support the Eurozone economy, it might now be appropriate to buy corporate bonds. With a collective European budget deficit likely to reach 4.4% of GDP in 2009, that's not exactly the kind of news that German finance minister, Peter Steinbrueck wanted to hear. He says that Germany has a vested interest in maintaining appropriate budget spending controls, as has each of the member nations. Breaching the Stability Pact and financial straight-jacket that limits deficit spending to 3% of GDP would therefore be a bad thing for the solidity of the Eurozone. The problem is though, that this is possibly preferable to a deepening recession. Regardless, if there was ever a time to relax the Maastricht criteria, it's very likely right now when companies are going to the wall and unemployment is rising. This outcome was not on the menu when the chefs were cooking omelets back in the nineties. While quantitative easing might have got off the ground in the U.K. there is no disputing that the magnitude of U.S. easing makes it the king of the patch. What is surprising though is that the market's worst fears have so far not been played out. Failure to see an acceleration of the dollar's initial slide, failure for currency options implied volatility to remain against the dollar and now an increased likelihood of the same medicine across the Eurozone is playing out in outright disappointment with the euro. While equities might be taking a breather today we note that euro/yen fell back beneath ¥130 today. Perhaps this is fiscal year end repatriation of corporate yen back to Japan, but it might just be the start of all around repulsion of the euro as Eurozone tensions mount. Andrew Wilkinson Senior Market Analyst Interactive Brokers Note: The material presented in this commentary is provided for informational purposes only and is based upon information that is considered to be reliable. However, neither Interactive Brokers LLC nor its affiliates warrant its completeness, accuracy or adequacy and it should not be relied upon as such. Neither IB nor its affiliates are responsible for any errors or omissions or for results obtained from the use of this information. Past performance is not necessarily indicative of future results. This material is not intended as an offer or solicitation for the purchase or sale of any security or other financial instrument. Securities or other financial instruments mentioned in this material are not suitable for all investors. Any opinions expressed herein are given in good faith, are subject to change without notice, and are only correct as of the stated date of their issue. The information contained herein does not constitute advice on the tax consequences of making any particular investment decision. This material does not take into account your particular investment objectives, financial situations or needs and is not intended as a recommendation to you of any particular securities, financial instruments or strategies. Before investing, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.

Read more...

Afternoon Forex Overview

Daily Forex Fundamentals | Written by Dukascopy Swiss FX Group | Mar 27 09 15:30 GMT |

Previous session overview The dollar advanced against its major rivals early Friday in New York as the rally in riskier currencies broke down ahead of key policy meetings next week. The dollar completely recovered its losses against the euro since the Federal Reserve's vote last week to begin quantitative easing. Now, traders are preparing for similar, albeit less aggressive, plans of action from the European Central Bank when they decide on interest rates next Thursday. On the same day, the highly anticipated Group of 20 summit is also scheduled. Analysts point to comments Thursday by ECB Vice President Lucas Papademos, who said the ECB could intervene in bond markets to help ease companies' financing problems although they haven't yet decided to do so. Additional comments by German Finance Minister Peer Steinbrueck have mired the euro as well. He said the high debt levels being built up currently worldwide might cause another crisis, and that the effects of fiscal stimulus measures are "very limited". He also confirmed that the German government will cut its 2009 economic forecast April 29 from the 2.25% contraction predicted in January. The update in tax revenue estimates due in May will be so bad that "I will stay in bed for the next week," he said. Friday morning in New York, the euro was at USD1.3323 from USD1.3508 late Thursday, while the dollar was at JPY97.74 from JPY98.71. The euro was at JPY130.21 from JPY133.31. The U.K. pound was at USD1.4335 from USD1.4449, and the dollar was at CHF1.1415 from CHF1.1288. USDCAD has scrambled sharply higher in the last few minutes as the accumulated force of a number of negatives weighs on CAD and erodes its earlier outperformance. Equities markets are very weak today, so that is not helping the Canadian dollar, said technical analysts. Weaker crude oil futures and broad USD strength are also burdening CAD. Market expectation EURUSD easing to fresh lows for the day at USD1.3270, some demand interest said positioned around the earlier mentioned Fibo support at USD1.3250 but said to have tight stops attached. USDJPY sees a quick pop over JPY98.00 for trade to JPY98.13 and a quick reversal to JPY97.95. Not much flow or noise on the trade, dealers say. Pound little changed in the US session as the force of euro-sterling sales is felt through a weaker euro-dollar. Cable holding well above European lows at USD1.4270 and seen in the wake of downward revisions to UK Q4 GDP data. Light offers eyed at USD1.4360, more into USD1.4400, with bids coming in around USD1.4320 in small. EURGBP fresh lows hit in the cross as reported demand in the stg0.9280 area gives way, stops hit on the break, with slippage extending down to stg0.9252 at time of writing. Hedge fund supply cited for main sell pressure today, with a former US investment house said to have had the order. Light interest now eyed on the downside ahead of the stg0.9180 area. Dukascopy Swiss FX Group Legal disclaimer and risk disclosure This overview can be used only for informational purposes. Dukascopy SA is not responsible for any losses arising from any investment based on any recommendation, forecast or other information herein contained.

Read more...

Income Drops as Job Losses Mount!

Daily Forex Fundamentals | Written by ecPulse.com | Mar 27 09 15:31 GMT |

Mounting job losses continued to weigh down on Americans' income and accordingly their spending remained subdued, meanwhile tightened credit conditions and falling home values are still leading the economy deeper into recession amid the worst financial crisis since the Great Depression. Personal income declined in February by 0.2 percent down from the prior revised rise of 0.2 percent and below median estimates of a 0.1 percent drop, meanwhile consumer spending rose 0.2 percent inline with median estimates and down from the prior revised rise of 1.0 percent. The drop in personal income came on the back of falling compensation which dropped 0.3%, while wages and salaries dropped 0.4 percent; disposable income accordingly dropped 0.1%. The saving rate rose in February by 4.2 percent down from the prior rise of 4.4 percent. Also the Federal Reserve Bank favorite indicator for inflation, core personal consumption expenditures rose in February by 0.2% inline with the prior revised estimate and the expected estimate as well, however core PCE rose an annualized 1.8 percent above the prior revised estimate of 1.7% and the expected 1.6% rise. While PCE deflator rose 1.0 percent from a year earlier up from the prior revised estimate of 0.8 percent. The U.S. economy remained weak over the course of the first three months of this year, following the 6.3 percent contraction reported back in the fourth quarter of 2008, as consumers continued to retrench their spending, however we might expect the economy to contract over a decreased pace over the course of this quarter, as the post holiday discount season boosted spending, which counts for nearly 2/3 of economic growth. Yet on the other hand we can't forget that the unemployment rate is continuing to rise, as the unemployment rate surged in February to a 25-year high at 8.1 percent, and the number is still expected to rise further over the upcoming months, as companies continue to feel the pressure from the worst financial crisis since the Great Depression. That should lead us to expect that consumer spending will remain subdued for a while before it starts to recover, and accordingly we should expect the world's largest economy to remain weak at least over the course of this year, while next year should start to show the effects of all the measures taken so far whether from the Fed or the Government. The Fed continued to support financial markets over the course of last year, especially after the failure of Lehman Brothers which indeed marked a catastrophe for global financial markets, as credit markets froze and economies fell in recession. The Fed indeed slashed their interest rates down to zero, while they continued to flood the financial system with liquidity, yet since that was deemed to be too little for a crisis of such magnitude, the Fed decided to undertake a $300 billion quantitative easing measure, in which they will purchase long term treasuries in a bid to reduce long term interest rates and accordingly help revive lending. Meanwhile the Treasury created several important measures aimed at stabilizing financial markets and economic activity, the last was the Public-Private Investment Program, which should be able to remove some of the pressures off banks' balance sheets in a bid to stabilize the financial system, as that would hopefully lead to recovery. Meanwhile speculations continue to mount that President Obama is preparing a program to help the auto industry, as the worst environment for the industry since the 1980s hampered automakers with losses, the auto industry is not the only one that needs help, but rather every other sector in the economy is in great need for help, even if little! Stocks dropped in today's early session as the income report continued to signal the ongoing weakness in economic activity, as the Dow Jones Industrial Average index dropped so far by 118.28 points or 1.49% as it was last trading at 7806.28, while the S&P 500 index was down 13.99 points or 1.68% and was last trading at 818.87, and the NASDAQ Composite index was also down by 29.99 points or 1.89% and was last trading at 1557.01, data as of 09:45 New York time. The University of Michigan released today its consumer confidence index for the month of March, the index rose to 57.3 from the prior estimate of 56.6, the economic conditions index rose to 63.3 from 62.3, while the economic outlook index rose to 53.5 from the prior estimate of 53.0. The 1-year inflation expectations declined to 2.0 percent from the prior estimate of 2.2 percent, while the 5-year inflation expectations index also declined to 2.6 percent from the prior estimate of 2.8 percent. Rising stock markets in March ignited by the optimism wave that dominated everyone must have had its share on confidence, however we shouldn't get too excited, as the economy is still very weak and the outlook is still full of uncertainty… Ecpulse disclaimer: The content of ecPulse.com and any page in the website contain information for investors/traders and is not a recommendation to buy or sell currencies, stocks, gold, silver & energies, nor an offer to buy or sell currencies, stocks, gold, silver & energies. The information provided reflects the writers' opinions that deemed reliable but is not guaranteed as to accuracy or completeness. ecPulse is not liable for any losses or damages, monetary or otherwise that result. I recommend that anyone trades currencies, stocks, 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, stocks gold, silver &energies presented should be considered speculative with a high degree of volatility and risk

Read more...

FX Thoughts for the Day

Daily Forex Technicals | Written by Kshitij Consultancy Services | Mar 27 09 11:59 GMT |

USD-CHF @ 1.1404/08...Surges R: 1.1445 / 1.1479 S: 1.1273-68 / 1.1246 / 1.1067 Dollar-Swiss has surged during the day today and is likely to move up towards 1.1550-90 being the 61.8% retracement region of the fall from 1.2300 (11/21/08) to 1.0371 (12/29/08). The surge has taken us by surprise as Dollar strengthened across all the majors. A fallback could now be limited to 1.1268 for the US session. 1.1165 has now become an important possibly Long Term Support for the pair. The region below 1.1590 might see some good consolidation either today during the US session or possibly Monday as Swiss reversed its course. To see the chart which has defied the flag that we were looking at, click on: http://www.kshitij.com/graphgallery/chfcandle.shtml#candle Cable GBP-USD @ 1.4326/30...Bearish view holds R: 1.4338 / 1.4420 / 1.4476 S: 1.4272 / 1.4229-18 / 1.4191 Cable has fallen further towards 1.4268 and is likely to dip towards 1.4150 over the next couple of sessions after UK's 4Q Q-o-Q GDP contracted -1.6% as against an expectation of -1.5%. As mentioned earlier as well, a dip below 1.4218-1.4150 would require fresh look. To see the chart of Cable, click on: http://www.kshitij.com/graphgallery/gbpcandle.shtml#candle The upside continues to be capped at 1.4600 which is likely to hold over several weeks now. Aussie AUD-USD @ 0.6933/37...0.6881 is crucial R: 0.7004 / 0.7080-87 / 0.7200 S: 0.6881-74 / 0.6792 / 0.6668 Aussie has broken out of the narrow range of 0.6970-0.7080 mentioned in the morning and is now likely to dip towards 0.6881 as the broader range of 0.6881-0.7080 now has come into focus. The level of 0.6881 we have been mentioning as the Support is a crucial level which is likely to hold on. Till 0.6881 holds, 0.7500 could also be seen over the next few days/ weeks. To see the chart of Aussie, click on: http://www.kshitij.com/graphgallery/audcandle.shtml#candle Kshitij Consultancy Service http://www.fxthoughts.com Legal disclaimer and risk disclosure These views/ forecasts/ suggestions, though proferred with the best of intentions, are based on our reading of the market at the time of writing. They are subject to change without notice.Though the information sources are believed to be reliable, the information is not guaranteed for accuracy. Those acting in the market on the basis of these are themselves responsibly for any profits or losses that might occur, without recourse to us. World financial markets, and especially the Foreign Exchange markets, are inherently risky and it is assumed that those who trade these markets are fully aware of the risk of real loss involved.

Read more...

Daily Technical Strategist

Daily Forex Technicals | Written by FXTechstrategy | Mar 27 09 15:34 GMT |

Today's Focus: EURUSD & USDJPY EURUSD: Correcting With Eyes On The 1.3330 Level and Beyond. USDJPY: Still Maintaining Its Rally Off The 93.55 Level EURUSD EUR remains on the defensive reversing its one-day gain on Wednesday and cutting through its minor support at 1.3419 level, its Mar 25'09 low and another key support at the 1.3386 level, its Jan 19'09 high in early morning trading today. This price development now leaves the pair challenging its strong support at the 1.3330 level, its Jan 27'09 high/former range top where a cap is expected to turn off EUR thereby reversing higher again. This level preserves the pair's short term uptrend activated off the 1.2456 level, its Mar 04'09 low and in order for the said uptrend to remain valid, EUR must hold above the 1.3330.If however that level snaps, declines should shape towards the 1.3093 level, its Feb 09'09 high and subsequently the 1.2992/1.3000 area, its Feb 23'09 high/psycho level. Daily Stochastics and RSI remain bearish as well, pointing towards further weakness. Alternatively, the 1.3419 level, its Mar 25'09 low and the 1.3386 level, its Jan 19'09 high will come in as the immediate upside targets with the 1.3635 level followed by the 1.3736 level, its Mar 23'09 high seen the next two resistance levels. Beyond there if seen will open up further upside risk towards the 1.3857/88 levels, its.618 Ret (1.4719-1.2330 declines)/Sept 11'08 high. On the whole, EUR rise off the 1.2456 level to the 1.3738 level is now undergoing corrective pullbacks with deeper correction targeting the 1.3330 level and beyond. Support Comments 1.3330 Jan 27'09 high 1.3093 Feb 09'09 high 1.2992/1.3000 Feb 23'09 high/psycho level. Resistance Comments 1.3386 Jan 19'09 high 1.3419 Mar 25'09 low 1.3799 Jan 08'09 high USDJPY The recovery started at the 93.55 level, its Mar 19'09 low suffered a temporary set back after the pair was seen reversing its Thursday gains in early trading today suggesting that correction to consolidation of the said rise may be building up. While this occurs above its strong support at the 94.62 level ,its Jan'09 high, we envisage an eventual return to the 99.68 level with a break through there resuming its short term uptrend towards its psycho level/Nov 04'08 high at 100.00/55 or even higher. Its daily stochastics remains supportive of this view as it is trending higher. On the downside, objectives are located at the 96.58 level, its Mar 06'09 ahead of its Mar 12'09 low at 95.67. If that level is taken out, in any case, USDJPY would be set up for a dip towards the 94.62 level ,its Jan'09 high and next the 93.55 level, its Mar 19'09 low. All in all,USDJPY continues to retain s its upside bias triggered off the 93.55 level. Support Comments 96.58 Mar 06'09 95.67 Mar 12'09 low 94.62 Jan'09 high Resistance Comments 98.97 Mar 17'09 high 99.68 Mar 05'09 high 100.00/55 Psycho level/Nov 04'08 high Mohammed Isah Market Analyst www.fxtechstrategy.com This report is prepared solely for information and data purposes. Opinions, estimates and projections contained herein are the author's own as of the date hereof and are subject to change without notice. The information and opinions contained herein have been compiled or arrived at from sources believed to be reliable but no representation or warranty, express or implied, is made as to their accuracy or completeness and neither the information nor the forecast shall be taken as a representation for which the author incur any responsibility. The does not accept any liability whatsoever for any loss arising from any use of this report or its contents. This report is not construed as an offer to sell or solicitation of any offer to buy any of the currencies referred to in this report

Read more...