The risk of European companies defaulting on their debt fell for a fourth day on speculation the Federal Reserve will cut benchmark lending rates next month, according to traders of credit-default swaps.
Contracts on the Markit iTraxx Crossover Index of 50 European companies with mostly high-risk, high-yield credit ratings dropped 5 basis points to 361 basis points, according to Deutsche Bank AG. The index, a benchmark for the cost of protecting bonds against default, falls when perceptions of credit quality improve.
Fed Vice Chairman Donald Kohn said yesterday that market ``turbulence'' sparked by the U.S. housing recession may reduce credit to businesses and consumers, reinforcing investors' expectations policymakers will cut rates again when they meet Dec. 11. Federal funds futures indicate a 100 percent probability of a reduction by a quarter point to 4.25 percent.
``The Fed might be forced not only to a couple of rate cuts, but to move toward a full rate-cut cycle,'' said Philip Gisdakis, a credit strategist at UniCredit SpA in Munich. ``Every piece of bad news is seen as good news for credit as it would force the Fed to lower rates.''
smallcap-review.com
четверг, 29 ноября 2007 г.
European Bonds Advance; 10-Year Yield Falls to 4.10 Percent
European government bonds advanced, snapping two days of declines.
The yield on the 10-year bund, Europe's benchmark, fell 2 basis points to 4.10 percent by 10:15 a.m. in London.
The price of the 4.25 percent security due July 2017 rose 0.13, or 1.3 euros per 1,000-euro ($1,465) face amount, to 101.17.
The yield on the two-year note fell 2 basis points to 3.77 percent.
smallcap-review.com
The yield on the 10-year bund, Europe's benchmark, fell 2 basis points to 4.10 percent by 10:15 a.m. in London.
The price of the 4.25 percent security due July 2017 rose 0.13, or 1.3 euros per 1,000-euro ($1,465) face amount, to 101.17.
The yield on the two-year note fell 2 basis points to 3.77 percent.
smallcap-review.com
пятница, 23 ноября 2007 г.
European Bonds Poised for Weekly Gain as Investors Flee Stocks
European government notes are poised for the biggest weekly gain in three months as ongoing concern about widening credit market losses, record oil prices and the weaker dollar stoked demand for the safest assets.
Two-year note yields are at a 13-month low after Asian equities this week slipped to a two-month low and slumping U.S. stocks wiped out this year's gain for the Standard & Poor's 500 Index. Losses from U.S. subprime mortgage foreclosures, coupled with slowing economic expansion and falling house prices, could reach $300 billion, the OECD said yesterday.
``Bonds aren't being driven by fundamentals, but by fear and uncertainty on the impact of the subprime mortgage market,'' said Nick Stamenkovic, a strategist at RIA Capital Markets in Edinburgh. ``People will continue to move into bonds at the expense of equities particularly when there are funding problems in the run-up to the year-end.''
The yield on the two-year German note fell 4 basis points to 3.57 percent by 8:15 a.m. in London, leaving it 23 points lower in the week. The yield on the 10-year bund, Europe's benchmark, has dropped 12 basis points since Nov. 16.
The price of the 4 percent security due September 2009 rose 0.07, or 70 euro cents per 1,000-euro ($1,492) face amount, to 100.73 today. Yields move inversely to bond prices.
European bonds held gains after a report showed German import prices, an early indicator of inflation pressures in the euro region's largest economy, increased the most in almost a year in October, led by a surge in oil prices.
milliondollarstrade.com
Two-year note yields are at a 13-month low after Asian equities this week slipped to a two-month low and slumping U.S. stocks wiped out this year's gain for the Standard & Poor's 500 Index. Losses from U.S. subprime mortgage foreclosures, coupled with slowing economic expansion and falling house prices, could reach $300 billion, the OECD said yesterday.
``Bonds aren't being driven by fundamentals, but by fear and uncertainty on the impact of the subprime mortgage market,'' said Nick Stamenkovic, a strategist at RIA Capital Markets in Edinburgh. ``People will continue to move into bonds at the expense of equities particularly when there are funding problems in the run-up to the year-end.''
The yield on the two-year German note fell 4 basis points to 3.57 percent by 8:15 a.m. in London, leaving it 23 points lower in the week. The yield on the 10-year bund, Europe's benchmark, has dropped 12 basis points since Nov. 16.
The price of the 4 percent security due September 2009 rose 0.07, or 70 euro cents per 1,000-euro ($1,492) face amount, to 100.73 today. Yields move inversely to bond prices.
European bonds held gains after a report showed German import prices, an early indicator of inflation pressures in the euro region's largest economy, increased the most in almost a year in October, led by a surge in oil prices.
milliondollarstrade.com
Smaller Companies Grab Bigger Share of Surging U.S. Exports
Smaller companies are grabbing a bigger share of U.S. exports, making up for some of the jobs lost as multinational firms move operations overseas.
American businesses without international subsidiaries accounted for 46 percent of sales abroad in 2005, up from 38 percent in 1999, according to a Commerce Department analysis published last week. The trend is likely to continue, helping cushion the economy from the worst housing recession in 16 years, economists said.
``We are at a six-month backlog now and we have been for over a year,'' said Leon Trammel, chairman of Tramco Inc., a Wichita, Kansas-based maker of conveyor belts. ``Our business is just great.''
After exporting his first belt to the Netherlands on an impulse 35 years ago, foreign sales will be almost half of his firm's projected $40 million in sales this year, Trammel said.
Faster global communications and fewer trade barriers have enabled businesses like Tramco, with few or no factories overseas, to take advantage of the strongest global economy in almost three decades. Private companies with less than 500 employees account for all the jobs created since 2005, according to figures from ADP Employer Services.
``It's a very important element driving the economy,'' said John Murphy, vice president of Latin American Affairs for the U.S. Chamber of Commerce, said in an interview. ``For small companies, exporting is the only way for them to tap into foreign markets.''
milliondollarstrade.com
American businesses without international subsidiaries accounted for 46 percent of sales abroad in 2005, up from 38 percent in 1999, according to a Commerce Department analysis published last week. The trend is likely to continue, helping cushion the economy from the worst housing recession in 16 years, economists said.
``We are at a six-month backlog now and we have been for over a year,'' said Leon Trammel, chairman of Tramco Inc., a Wichita, Kansas-based maker of conveyor belts. ``Our business is just great.''
After exporting his first belt to the Netherlands on an impulse 35 years ago, foreign sales will be almost half of his firm's projected $40 million in sales this year, Trammel said.
Faster global communications and fewer trade barriers have enabled businesses like Tramco, with few or no factories overseas, to take advantage of the strongest global economy in almost three decades. Private companies with less than 500 employees account for all the jobs created since 2005, according to figures from ADP Employer Services.
``It's a very important element driving the economy,'' said John Murphy, vice president of Latin American Affairs for the U.S. Chamber of Commerce, said in an interview. ``For small companies, exporting is the only way for them to tap into foreign markets.''
milliondollarstrade.com
среда, 21 ноября 2007 г.
BP Blast Victims Seek $2 Billion, Attack `Lenient' Plea Deal
Victims of BP Plc's 2005 Texas refinery blast are seeking $2 billion after attacking a U.S. plea deal as ``shockingly lenient'' and successfully urging recusal of the judge in the case on claims of a conflict of interest.
The victims' lawyer said he will ask a new judge for the award on claims related to the blast instead of the $50 million provided for under the plea bargain. He argued in court papers filed in Houston yesterday that U.S. District Judge Gray Miller should remove himself since he worked for BP's law firm at the time of the explosion that killed 15 workers. Miller stepped aside a few hours later.
``BP has a prior history of terrible misconduct, and that ought to form the basis'' for increasing the fine to the federal maximum of twice the criminal proceeds, victims' lawyer David Perry said in an interview. The victims claim BP earned $1 billion from the plant in the 14 months before the blast.
BP agreed last month to plead guilty to exposing workers to toxic emissions during the Texas City explosion, trying to corner the propane-trading market and spilling 200,000 gallons of oil from corroded Alaskan pipelines. The plea bargain, with combined fines of $373 million, would end BP's federal criminal liability from the blast and the spills.
$50 Million
The $50 million portion of the fine related to the explosion allows BP, Europe's second-largest oil company, to retain profits made by running the plant without necessary safety improvements, workers said in their victim impact statement, filed in Houston federal court. Miller, who was to accept BP's plea Nov. 27, worked for Houston-based Fulbright & Jaworski before being appointed to the bench by U.S. President George W. Bush in 2006.
``The plea agreement proposed by the government and the defendant BP Products North America Inc. should be rejected as shockingly lenient and providing preferential treatment to BP,'' the workers said. The fine amount ``allows BP to retain more than 95 percent of the profit from its criminal conduct.''
The workers' complaint was submitted under a federal law that allows crime victims to file objections before sentencing. BP spokesman Neil Chapman declined to comment.
The explosion, which injured hundreds, occurred March 23, 2005, when an octane-boosting unit overflowed as it was being restarted following repairs. Gasoline vapors spewed into an inadequate vent system, igniting a blast that destroyed windows five miles away.
milliondollarsfinance.com
The victims' lawyer said he will ask a new judge for the award on claims related to the blast instead of the $50 million provided for under the plea bargain. He argued in court papers filed in Houston yesterday that U.S. District Judge Gray Miller should remove himself since he worked for BP's law firm at the time of the explosion that killed 15 workers. Miller stepped aside a few hours later.
``BP has a prior history of terrible misconduct, and that ought to form the basis'' for increasing the fine to the federal maximum of twice the criminal proceeds, victims' lawyer David Perry said in an interview. The victims claim BP earned $1 billion from the plant in the 14 months before the blast.
BP agreed last month to plead guilty to exposing workers to toxic emissions during the Texas City explosion, trying to corner the propane-trading market and spilling 200,000 gallons of oil from corroded Alaskan pipelines. The plea bargain, with combined fines of $373 million, would end BP's federal criminal liability from the blast and the spills.
$50 Million
The $50 million portion of the fine related to the explosion allows BP, Europe's second-largest oil company, to retain profits made by running the plant without necessary safety improvements, workers said in their victim impact statement, filed in Houston federal court. Miller, who was to accept BP's plea Nov. 27, worked for Houston-based Fulbright & Jaworski before being appointed to the bench by U.S. President George W. Bush in 2006.
``The plea agreement proposed by the government and the defendant BP Products North America Inc. should be rejected as shockingly lenient and providing preferential treatment to BP,'' the workers said. The fine amount ``allows BP to retain more than 95 percent of the profit from its criminal conduct.''
The workers' complaint was submitted under a federal law that allows crime victims to file objections before sentencing. BP spokesman Neil Chapman declined to comment.
The explosion, which injured hundreds, occurred March 23, 2005, when an octane-boosting unit overflowed as it was being restarted following repairs. Gasoline vapors spewed into an inadequate vent system, igniting a blast that destroyed windows five miles away.
milliondollarsfinance.com
Corporate Bond Risk Rises in Europe, Credit-Default Swaps Show
The risk of owning European corporate bonds rose, according to traders of credit-default swaps.
Contracts on the iTraxx Crossover Series 8 Index of 50 European companies with mainly high-risk, high-yield credit ratings increased 5 basis points to 396 basis points today, according to Deutsche Bank AG. The index, a benchmark for the cost of protecting bonds against default, rises when perceptions of credit quality deteriorate.
Contracts on the iTraxx Europe Index of 125 companies with investment-grade debt rose 1.5 basis points to 59 basis points, Deutsche Bank prices show.
A basis point on a credit-default swap contract protecting 10 million euros ($14.8 million) of debt for five years is equivalent to 1,000 euros a year.
Credit-default swaps, contracts conceived to protect bondholders against default, pay the buyer face value in exchange for the underlying securities or the cash equivalent should a company fail to adhere to its debt agreements.
milliondollarsfinance.com
Contracts on the iTraxx Crossover Series 8 Index of 50 European companies with mainly high-risk, high-yield credit ratings increased 5 basis points to 396 basis points today, according to Deutsche Bank AG. The index, a benchmark for the cost of protecting bonds against default, rises when perceptions of credit quality deteriorate.
Contracts on the iTraxx Europe Index of 125 companies with investment-grade debt rose 1.5 basis points to 59 basis points, Deutsche Bank prices show.
A basis point on a credit-default swap contract protecting 10 million euros ($14.8 million) of debt for five years is equivalent to 1,000 euros a year.
Credit-default swaps, contracts conceived to protect bondholders against default, pay the buyer face value in exchange for the underlying securities or the cash equivalent should a company fail to adhere to its debt agreements.
milliondollarsfinance.com
понедельник, 19 ноября 2007 г.
Swiss Re Has $1.07 Billion Credit-Default Swaps Loss
Swiss Reinsurance Co., the world's biggest reinsurer, had a 1.2 billion-Swiss franc ($1.07 billion) loss on derivatives in October after the U.S. subprime mortgage crash roiled debt markets.
Swiss Re fell the most in almost 4-1/2 years in Zurich trading after the loss, which amounts to 981 million francs after tax. Losses occurred on two credit-default swaps Swiss Re sold to protect clients against declines in mostly mortgage-related investments, the Zurich-based company said today.
``We clearly made some poor choices,'' Roger Ferguson, the former U.S. Federal Reserve governor who runs Swiss Re's financial services division, told analysts on a conference call. Swiss Re's loss came less than two weeks after the company reported third-quarter profit that surpassed analysts' estimates.
``This is a surprise, particularly given their so recent reporting,'' said Richard Hewitt, an analyst at Dresdner Kleinwort who rates Swiss Re ``buy.''
Swiss Re shares fell as much as 6.9 percent, the biggest drop since June 2003, and were down 6.30 francs to 91.25 francs by 11:48 a.m. The stock has fallen 12 percent this year, matching the slump in the 28-member Bloomberg Europe 500 Insurance Index.
investanalyticsarticles.com
Swiss Re fell the most in almost 4-1/2 years in Zurich trading after the loss, which amounts to 981 million francs after tax. Losses occurred on two credit-default swaps Swiss Re sold to protect clients against declines in mostly mortgage-related investments, the Zurich-based company said today.
``We clearly made some poor choices,'' Roger Ferguson, the former U.S. Federal Reserve governor who runs Swiss Re's financial services division, told analysts on a conference call. Swiss Re's loss came less than two weeks after the company reported third-quarter profit that surpassed analysts' estimates.
``This is a surprise, particularly given their so recent reporting,'' said Richard Hewitt, an analyst at Dresdner Kleinwort who rates Swiss Re ``buy.''
Swiss Re shares fell as much as 6.9 percent, the biggest drop since June 2003, and were down 6.30 francs to 91.25 francs by 11:48 a.m. The stock has fallen 12 percent this year, matching the slump in the 28-member Bloomberg Europe 500 Insurance Index.
investanalyticsarticles.com
Wall Street Plans $38 Billion of Bonuses as Shareholders Lose
Shareholders in the securities industry are having their worst year since 2002, losing $74 billion of their equity. That won't prevent Wall Street from paying record bonuses, totaling almost $38 billion.
That money, split among about 186,000 workers at Goldman Sachs Group Inc., Morgan Stanley, Merrill Lynch & Co., Lehman Brothers Holdings Inc. and Bear Stearns Cos., equates to an average of $201,500 per person, according to data compiled by Bloomberg. The five biggest U.S. securities firms paid $36 billion to employees last year.
The bigger bonus pool derives from a record $9 billion of fees for arranging acquisitions and $5 billion for underwriting initial public offerings and sales of junk bonds, the most lucrative securities, Bloomberg data show. Bankers' record fees help explain why 2007 will prove to be the industry's second- most profitable after the subprime mortgage market collapse led to losses at Merrill and Bear Stearns. The last time bonuses declined was 2002 when the Standard & Poor's 500 Index fell 23 percent, and Enron Corp. and WorldCom Inc. went bankrupt.
Goldman's record earnings and gains at Morgan Stanley and Lehman mean all the New York-based firms will be forced to pay more in a year when all but Goldman lost more than 20 percent of their market value, said Charles Geisst, finance professor at Manhattan College in Riverdale, New York.
``They're all going to have to fall into line,'' said Geisst, author of ``100 Years of Wall Street.'' ``If Bear and Merrill plead poverty, they're going to lose all of their good people.''
Pay for Performance
John Thain, Merrill's newly appointed chairman and chief executive officer, is already grappling with the bonus issue and he doesn't start at the world's biggest brokerage until next month. Thain, whose contract calls for him getting at least $44 million in cash and stock payable over five years, said top performers will receive bonuses while those involved in the subprime market collapse that led to the firm's $8.4 billion third-quarter writedown will be penalized.
``Most of Merrill Lynch's businesses are actually doing well, and so what you have to do in that circumstance is to pay the people who are performing,'' Thain, 52, said in a Nov. 15 interview. ``Getting that balance right, paying the people who perform well and taking enough money from the people who caused some of the problems, that is going to be one of the first topics I address.''
investanalyticsarticles.com
That money, split among about 186,000 workers at Goldman Sachs Group Inc., Morgan Stanley, Merrill Lynch & Co., Lehman Brothers Holdings Inc. and Bear Stearns Cos., equates to an average of $201,500 per person, according to data compiled by Bloomberg. The five biggest U.S. securities firms paid $36 billion to employees last year.
The bigger bonus pool derives from a record $9 billion of fees for arranging acquisitions and $5 billion for underwriting initial public offerings and sales of junk bonds, the most lucrative securities, Bloomberg data show. Bankers' record fees help explain why 2007 will prove to be the industry's second- most profitable after the subprime mortgage market collapse led to losses at Merrill and Bear Stearns. The last time bonuses declined was 2002 when the Standard & Poor's 500 Index fell 23 percent, and Enron Corp. and WorldCom Inc. went bankrupt.
Goldman's record earnings and gains at Morgan Stanley and Lehman mean all the New York-based firms will be forced to pay more in a year when all but Goldman lost more than 20 percent of their market value, said Charles Geisst, finance professor at Manhattan College in Riverdale, New York.
``They're all going to have to fall into line,'' said Geisst, author of ``100 Years of Wall Street.'' ``If Bear and Merrill plead poverty, they're going to lose all of their good people.''
Pay for Performance
John Thain, Merrill's newly appointed chairman and chief executive officer, is already grappling with the bonus issue and he doesn't start at the world's biggest brokerage until next month. Thain, whose contract calls for him getting at least $44 million in cash and stock payable over five years, said top performers will receive bonuses while those involved in the subprime market collapse that led to the firm's $8.4 billion third-quarter writedown will be penalized.
``Most of Merrill Lynch's businesses are actually doing well, and so what you have to do in that circumstance is to pay the people who are performing,'' Thain, 52, said in a Nov. 15 interview. ``Getting that balance right, paying the people who perform well and taking enough money from the people who caused some of the problems, that is going to be one of the first topics I address.''
investanalyticsarticles.com
пятница, 16 ноября 2007 г.
European Government Bonds Rise; 10-Year Yield at 4.09 Percent
European government bonds opened higher for a second day.
The yield on the 10-year German bund, Europe's benchmark, fell 3 basis points to 4.09 percent by 7:04 a.m. in London. The price of the 4.25 percent security due July 2017 rose 0.23, or 2.3 euros per 1,000-euro ($1,469) face amount, to 101.22.
The yield on the two-year note fell 3 basis points to 3.82 percent.
tradeonlinesystem.com
The yield on the 10-year German bund, Europe's benchmark, fell 3 basis points to 4.09 percent by 7:04 a.m. in London. The price of the 4.25 percent security due July 2017 rose 0.23, or 2.3 euros per 1,000-euro ($1,469) face amount, to 101.22.
The yield on the two-year note fell 3 basis points to 3.82 percent.
tradeonlinesystem.com
GM, Ford, UAW Dangle $54 Billion Health Fund Before Wall Street
General Motors Corp., Ford Motor Co., Chrysler LLC and the United Auto Workers have created a $54.4 billion plum for Wall Street.
With Ford workers' approval of a new labor pact two days ago, all three U.S. automakers have agreed to turn retiree health-care costs over to a union-run trust known as a Voluntary Employee Beneficiary Association.
The contract agreements have put the previously obscure VEBAs on money managers' radar screens, said Dave Osterndorf, chief health-care actuary at consulting firm Towers Perrin in Milwaukee. The trust may draw interest from investment firms including JPMorgan Chase & Co., State Street Corp. and Merrill Lynch & Co., he said.
``There haven't been these sized funds out there in the past, so no one has really made it their business,'' Osterndorf said. Telecommunications, energy and other companies probably will follow the automakers in creating VEBAs, he said.
Detroit-based GM agreed to seed its fund with $32 billion, Dearborn, Michigan-based Ford will contribute $13.6 billion, and Chrysler, based in Auburn Hills, Michigan, will give $8.8 billion. Under the contracts, the union is allowed to combine the funds, while maintaining separate accounting for each automaker. The VEBA will start in January 2010.
The autoworkers' health-care trust will be equal in size to some of the country's largest pension funds, matching the University of California's $54.4 billion endowment, the 25th largest, according to trade publication Pensions & Investments.
`Nothing Like This'
``There's nothing like this in America in terms of health care, and arguably in the world, of this size,'' said Geoff Bobroff, an independent investment consultant in East Greenwich, Rhode Island, with three decades of asset-management experience. ``A lot of people are going to be lining up to service this fund.'' He estimated that fees for managing the VEBA may total $285 million.
The UAW has been ``inundated'' with offers from Wall Street firms to manage the trust, union President Ron Gettelfinger told reporters on Sept. 28, after the GM contract was ratified. He didn't name them. Roger Kerson, spokesman for the Detroit-based union, declined to comment.
State Street spokeswoman Marie McGehee in Boston and JPMorgan spokesman Thomas Kelly and Merrill Lynch spokeswoman Jennifer Grigas, both in New York, also declined to comment.
tradeonlinesystem.com
With Ford workers' approval of a new labor pact two days ago, all three U.S. automakers have agreed to turn retiree health-care costs over to a union-run trust known as a Voluntary Employee Beneficiary Association.
The contract agreements have put the previously obscure VEBAs on money managers' radar screens, said Dave Osterndorf, chief health-care actuary at consulting firm Towers Perrin in Milwaukee. The trust may draw interest from investment firms including JPMorgan Chase & Co., State Street Corp. and Merrill Lynch & Co., he said.
``There haven't been these sized funds out there in the past, so no one has really made it their business,'' Osterndorf said. Telecommunications, energy and other companies probably will follow the automakers in creating VEBAs, he said.
Detroit-based GM agreed to seed its fund with $32 billion, Dearborn, Michigan-based Ford will contribute $13.6 billion, and Chrysler, based in Auburn Hills, Michigan, will give $8.8 billion. Under the contracts, the union is allowed to combine the funds, while maintaining separate accounting for each automaker. The VEBA will start in January 2010.
The autoworkers' health-care trust will be equal in size to some of the country's largest pension funds, matching the University of California's $54.4 billion endowment, the 25th largest, according to trade publication Pensions & Investments.
`Nothing Like This'
``There's nothing like this in America in terms of health care, and arguably in the world, of this size,'' said Geoff Bobroff, an independent investment consultant in East Greenwich, Rhode Island, with three decades of asset-management experience. ``A lot of people are going to be lining up to service this fund.'' He estimated that fees for managing the VEBA may total $285 million.
The UAW has been ``inundated'' with offers from Wall Street firms to manage the trust, union President Ron Gettelfinger told reporters on Sept. 28, after the GM contract was ratified. He didn't name them. Roger Kerson, spokesman for the Detroit-based union, declined to comment.
State Street spokeswoman Marie McGehee in Boston and JPMorgan spokesman Thomas Kelly and Merrill Lynch spokeswoman Jennifer Grigas, both in New York, also declined to comment.
tradeonlinesystem.com
четверг, 15 ноября 2007 г.
European Bonds Rise as Stock Losses Fuel Demand for Safe Assets
European government bonds gained, snapping a three-day losing streak, as a decline in global stock markets fueled investor demand for the safest assets.
The yield on the two-year note slid to near an eight-month low after stocks in Asia and Europe dropped, and U.S. stock-index futures declined. Barclays Plc today announced about 1.3 billion pounds ($2.7 billion) of writedowns on credit-related securities tied to the subprime-mortgage market collapse.
``In the current environment bonds are to a large extent being driven by market sentiment and what happens in the equity markets,'' said Stuart Thomson, who helps oversee about $46 billion in bonds at Resolution Investment Management Ltd. in Glasgow, Scotland.
The yield on the two-year German note fell 3 basis points to 3.86 percent by 10:02 a.m. in London. The price of the 4 percent security due September 2009 rose 0.05, or 50 euro cents per 1,000 euro ($1,469) face amount, to 100.23.
The yield on the 10-year bund, Europe's benchmark, dropped 2 basis points to 4.13 percent.
Stock markets across Europe fell today, mirroring declines in the U.S. and Asia. The main index in France, the CAC 40, slid 1.2 percent and headed for its biggest decline in almost a week. The benchmark indexes in the U.K and Germany both dropped as much as 0.9 percent.
investcommunity.org
The yield on the two-year note slid to near an eight-month low after stocks in Asia and Europe dropped, and U.S. stock-index futures declined. Barclays Plc today announced about 1.3 billion pounds ($2.7 billion) of writedowns on credit-related securities tied to the subprime-mortgage market collapse.
``In the current environment bonds are to a large extent being driven by market sentiment and what happens in the equity markets,'' said Stuart Thomson, who helps oversee about $46 billion in bonds at Resolution Investment Management Ltd. in Glasgow, Scotland.
The yield on the two-year German note fell 3 basis points to 3.86 percent by 10:02 a.m. in London. The price of the 4 percent security due September 2009 rose 0.05, or 50 euro cents per 1,000 euro ($1,469) face amount, to 100.23.
The yield on the 10-year bund, Europe's benchmark, dropped 2 basis points to 4.13 percent.
Stock markets across Europe fell today, mirroring declines in the U.S. and Asia. The main index in France, the CAC 40, slid 1.2 percent and headed for its biggest decline in almost a week. The benchmark indexes in the U.K and Germany both dropped as much as 0.9 percent.
investcommunity.org
MBIA, Ambac Downgrades May Cost Investors, Issuers $200 Billion
The crisis of confidence in bond insurers that bestow top credit ratings on debt sold by borrowers from the New York Yankees to Citigroup Inc. may cost investors as much as $200 billion.
The AAA ratings of MBIA Inc., Ambac Financial Group Inc. and their five smaller competitors are being reviewed by Moody's Investors Service and Fitch Ratings. Without guarantees, $2.4 trillion of bonds may fall in value and some issuers would get shut out of the capital markets.
``We shudder to think of the ramifications,'' said Greg Peters, head of credit strategy at New York-based Morgan Stanley, the second-biggest U.S. securities firm by market value. ``You have politicians, taxpayers, municipalities, states. It just opens up a Pandora's box. That is a huge destabilizing force.''
For more than 20 years, the safety of insurance has eased the way for elementary schools, Wall Street banks and thousands of municipalities to sell debt with unquestioned credit quality. Now, mounting downgrades on insured bonds backed by assets such as mortgages are raising doubts about the stability of the guarantors. Armonk, New York-based MBIA, the world's largest, has a 27 percent probability of default, and Ambac's is 39 percent, prices of derivatives show.
Moody's and Fitch, both based in New York, are examining the insurers on concern that a slide in the credit quality of some of the 80,000 securities they guarantee has eroded their capital so much that they no longer deserve AAA ratings.
investcommunity.org
The AAA ratings of MBIA Inc., Ambac Financial Group Inc. and their five smaller competitors are being reviewed by Moody's Investors Service and Fitch Ratings. Without guarantees, $2.4 trillion of bonds may fall in value and some issuers would get shut out of the capital markets.
``We shudder to think of the ramifications,'' said Greg Peters, head of credit strategy at New York-based Morgan Stanley, the second-biggest U.S. securities firm by market value. ``You have politicians, taxpayers, municipalities, states. It just opens up a Pandora's box. That is a huge destabilizing force.''
For more than 20 years, the safety of insurance has eased the way for elementary schools, Wall Street banks and thousands of municipalities to sell debt with unquestioned credit quality. Now, mounting downgrades on insured bonds backed by assets such as mortgages are raising doubts about the stability of the guarantors. Armonk, New York-based MBIA, the world's largest, has a 27 percent probability of default, and Ambac's is 39 percent, prices of derivatives show.
Moody's and Fitch, both based in New York, are examining the insurers on concern that a slide in the credit quality of some of the 80,000 securities they guarantee has eroded their capital so much that they no longer deserve AAA ratings.
investcommunity.org
вторник, 13 ноября 2007 г.
Value Partners Investors Raise $374 Million in IPO
Value Partners Group Ltd. priced the first Hong Kong initial public offering of an asset manager at the top end of a range, allowing two investors to raise HK$2.9 billion ($374 million), two people familiar with the sale said.
The Hong Kong-based company, ranked by Alpha magazine as Asia's second-biggest hedge fund manager by the amount of assets it oversees, priced the 381.6 million IPO shares on sale at HK$7.63 apiece, said the people, who declined to be identified before an official statement.
The IPO consists entirely of existing stock on sale from JH Whitney III LP and Value Holdings LLC, two U.S. private equity investors that bought shares of Value Partners before the public offering. The sale of a 23.9 percent stake in the company gives the manager of retail, hedge and buyout funds a market value of $1.6 billion.
Ping An Insurance Group (Group) Co., China's second-largest insurer, paid HK$1.1 billion for a 9 percent stake in the asset manager, according to Bloomberg calculations based on information provided in a share sale document. Value Partners managed $5.7 billion of assets at the end of June, according to the document.
Strong Demand
Investors are buying into a company which expanded assets under management 10-fold in the 14 years since its inception under the leadership of Chairman and Chief Investment Officer Cheah Cheng Hye.
Value Partners has benefited from the growing demand for asset management services as a result of aging populations, growing wealth and stock booms in Hong Kong and China. The fund manager specializes in picking small- to medium-sized companies.
``They have built a nice company which is very profitable at the moment,'' said Sebastiaan de Bont, who manages $2 billion at Fideuram Asset Management in Dublin, which didn't buy the stock yesterday before the pricing. He voiced concern whether Value Partners could repeat its growth last year in a market downturn, because of its reliance on performance fees charged on excess returns.
JPMorgan Chase & Co. and Morgan Stanley arranged the sale.
Teresa Yu, a Hong Kong-based spokeswoman for Value Partners, Marie Cheung, a JPMorgan spokeswoman in Hong Kong, and Nick Footitt, a spokesman for Morgan Stanley in Hong Kong, declined to comment.
marketcollege.net
The Hong Kong-based company, ranked by Alpha magazine as Asia's second-biggest hedge fund manager by the amount of assets it oversees, priced the 381.6 million IPO shares on sale at HK$7.63 apiece, said the people, who declined to be identified before an official statement.
The IPO consists entirely of existing stock on sale from JH Whitney III LP and Value Holdings LLC, two U.S. private equity investors that bought shares of Value Partners before the public offering. The sale of a 23.9 percent stake in the company gives the manager of retail, hedge and buyout funds a market value of $1.6 billion.
Ping An Insurance Group (Group) Co., China's second-largest insurer, paid HK$1.1 billion for a 9 percent stake in the asset manager, according to Bloomberg calculations based on information provided in a share sale document. Value Partners managed $5.7 billion of assets at the end of June, according to the document.
Strong Demand
Investors are buying into a company which expanded assets under management 10-fold in the 14 years since its inception under the leadership of Chairman and Chief Investment Officer Cheah Cheng Hye.
Value Partners has benefited from the growing demand for asset management services as a result of aging populations, growing wealth and stock booms in Hong Kong and China. The fund manager specializes in picking small- to medium-sized companies.
``They have built a nice company which is very profitable at the moment,'' said Sebastiaan de Bont, who manages $2 billion at Fideuram Asset Management in Dublin, which didn't buy the stock yesterday before the pricing. He voiced concern whether Value Partners could repeat its growth last year in a market downturn, because of its reliance on performance fees charged on excess returns.
JPMorgan Chase & Co. and Morgan Stanley arranged the sale.
Teresa Yu, a Hong Kong-based spokeswoman for Value Partners, Marie Cheung, a JPMorgan spokeswoman in Hong Kong, and Nick Footitt, a spokesman for Morgan Stanley in Hong Kong, declined to comment.
marketcollege.net
Brazil Smallcaps to Overtake Vale, Petrobras, Aberdeen Asserts
Fund managers at Aberdeen Asset Management and Bassini & Co. have missed much of this year's rally in Brazilian stocks because they sold shares of the largest companies and bought those 10 percent or less the size.
The Bovespa Index has surged 41 percent this year, led by Cia. Vale do Rio Doce and Petroleo Brasileiro SA, the two biggest by market value. They are worth more than $160 billion each, which would put them among the 12 largest members of the U.S. Standard & Poor's 500 Index. A Brazilian measure that excludes the 10 largest Bovespa members rose less than half as much.
The gap widened in the past three months as investors bought the best known companies to get back into emerging markets after global equities fell in August. Smaller businesses are now becoming bargains. The average price of the country's Second Tier Index compared with earnings has fallen 27 percent this year.
``After a while the money will start chasing the stocks that have underperformed,'' said Gustavo Pozzi, who helps manage $200 million at New York-based Bassini & Co., a hedge fund that sold its Vale holdings last month. ``Global investors have just been focusing on the most liquid stocks.''
Pozzi's purchases -- Fertilizantes Heringer SA, a fertilizer maker in Viana, and Sao Paulo-based real estate developer Sao Carlos Empreendimentos e Participacoes SA -- have underperformed the Bovespa since he bought them in early October. Vale, the world's biggest iron-ore producer, has 138 times the market value of those two companies combined.
Underperformer
The largest company in the Second Tier Index, Rio de Janeiro-based Centrais Eletricas Brasileiras SA, Brazil's state- controlled utility company, has a market value of $17.2 billion. It lagged behind the benchmark this year, rising 7.1 percent.
Fiona Morrison at Aberdeen, U.K.-based Aberdeen Asset Management, Christopher Palmer at Gartmore Investment Management and Urban Larson at F&C Investments in London, who together help manage $14 billion in emerging market equities, favor smaller companies. They can grow faster and benefit more from Brazil's record low interest rates, rising incomes, credit expansion and infrastructure spending, Palmer said by telephone from Gartmore's offices in London.
``Large stocks tend to run up on global thematic interest,'' said Palmer, who helps manage $3.5 billion. ``There's no real reason why they should outperform.''
marketcollege.net
The Bovespa Index has surged 41 percent this year, led by Cia. Vale do Rio Doce and Petroleo Brasileiro SA, the two biggest by market value. They are worth more than $160 billion each, which would put them among the 12 largest members of the U.S. Standard & Poor's 500 Index. A Brazilian measure that excludes the 10 largest Bovespa members rose less than half as much.
The gap widened in the past three months as investors bought the best known companies to get back into emerging markets after global equities fell in August. Smaller businesses are now becoming bargains. The average price of the country's Second Tier Index compared with earnings has fallen 27 percent this year.
``After a while the money will start chasing the stocks that have underperformed,'' said Gustavo Pozzi, who helps manage $200 million at New York-based Bassini & Co., a hedge fund that sold its Vale holdings last month. ``Global investors have just been focusing on the most liquid stocks.''
Pozzi's purchases -- Fertilizantes Heringer SA, a fertilizer maker in Viana, and Sao Paulo-based real estate developer Sao Carlos Empreendimentos e Participacoes SA -- have underperformed the Bovespa since he bought them in early October. Vale, the world's biggest iron-ore producer, has 138 times the market value of those two companies combined.
Underperformer
The largest company in the Second Tier Index, Rio de Janeiro-based Centrais Eletricas Brasileiras SA, Brazil's state- controlled utility company, has a market value of $17.2 billion. It lagged behind the benchmark this year, rising 7.1 percent.
Fiona Morrison at Aberdeen, U.K.-based Aberdeen Asset Management, Christopher Palmer at Gartmore Investment Management and Urban Larson at F&C Investments in London, who together help manage $14 billion in emerging market equities, favor smaller companies. They can grow faster and benefit more from Brazil's record low interest rates, rising incomes, credit expansion and infrastructure spending, Palmer said by telephone from Gartmore's offices in London.
``Large stocks tend to run up on global thematic interest,'' said Palmer, who helps manage $3.5 billion. ``There's no real reason why they should outperform.''
marketcollege.net
Icahn Hedge Funds Post Loss, First Since Inception
Billionaire Carl Icahn's activist hedge funds posted their first quarterly decline since they opened three years ago because of volatile markets and losses on stocks including WCI Communities Inc. and Lear Corp.
The funds, run by New York-based Icahn Capital Management LP, together fell 1.5 percent in the third quarter, according to a Nov. 9 regulatory filing. The firm reversed more than $27 million of incentive fees as a result of the drop, according to the filing by Icahn Enterprises LP, parent of the fund-management business.
Results included $51.5 million of losses from WCI, the Bonita Springs, Florida, homebuilder that Icahn unsuccessfully sought to acquire in February. The funds had a $33.7 million loss on their investment in Lear, the Southfield, Michigan-based manufacturer of automotive seats that also rejected a buyout offer from Icahn.
Returns were ``impacted by volatile market conditions as well as equity positions related to consumer, real estate and financial sectors that represented losses for the quarter,'' Icahn said in the filing with the U.S. Securities and Exchange Commission. The Standard & Poor's 500 Index rose 1.6 percent in the quarter, reversing a loss that was as much as 6.4 percent on Aug. 15 amid credit-market turmoil.
Icahn buys stock in companies that he deems undervalued, which have included Time Warner Inc. to Motorola Inc., then pushes management to take steps to boost share prices. Since starting in November 2004, the Icahn funds have risen an average of 25.8 percent a year through this year's third quarter.
pennystockclub.net
The funds, run by New York-based Icahn Capital Management LP, together fell 1.5 percent in the third quarter, according to a Nov. 9 regulatory filing. The firm reversed more than $27 million of incentive fees as a result of the drop, according to the filing by Icahn Enterprises LP, parent of the fund-management business.
Results included $51.5 million of losses from WCI, the Bonita Springs, Florida, homebuilder that Icahn unsuccessfully sought to acquire in February. The funds had a $33.7 million loss on their investment in Lear, the Southfield, Michigan-based manufacturer of automotive seats that also rejected a buyout offer from Icahn.
Returns were ``impacted by volatile market conditions as well as equity positions related to consumer, real estate and financial sectors that represented losses for the quarter,'' Icahn said in the filing with the U.S. Securities and Exchange Commission. The Standard & Poor's 500 Index rose 1.6 percent in the quarter, reversing a loss that was as much as 6.4 percent on Aug. 15 amid credit-market turmoil.
Icahn buys stock in companies that he deems undervalued, which have included Time Warner Inc. to Motorola Inc., then pushes management to take steps to boost share prices. Since starting in November 2004, the Icahn funds have risen an average of 25.8 percent a year through this year's third quarter.
pennystockclub.net
Macquarie Group Forecasts Earnings Growth to Slow
Macquarie Group Ltd., Australia's biggest securities firm, said a rally in equity markets may falter in the second half, making it harder to repeat its record 45 percent profit growth of the first six months.
Net income rose to a record A$1.06 billion ($931 million) in the six months to Sept. 30, from A$730 million a year earlier, the Sydney-based bank said in a statement today. The stock fell after Chief Executive Officer Alan Moss said second-half earnings won't match first-half profit.
Macquarie generated two-thirds of revenue from Asia, where stocks excluding Japan have climbed 33 percent this year, helping it withstand a collapse in the U.S. subprime mortgage market that sparked $45 billion of writedowns from global rivals. Equity markets ``may not continue to be as favorable,'' the bank said.
``There was a lack of clarity and a degree of conservatism in the outlook that is pushing the shares lower,'' said Sean Fenton, who helps manage the equivalent of $832 million, including Macquarie stock, at Jenkins Investment Management in Sydney. ``What's clear in this result is just how untouched the company has been by the subprime crisis.''
Macquarie's shares fell 3.7 percent to A$79 at the close in Sydney. The stock has risen 23 percent since touching a year-low of A$64 in August as investors heeded Moss's assurance that Macquarie has ``no material problem credit exposures.''
The company will pay a dividend of A$1.45 a share compared with A$1.25 a share a year earlier. That's less than the A$1.62 that analysts at Citigroup estimated, and the A$1.65 forecast by Credit Suisse Group.
pennystockclub.net
Net income rose to a record A$1.06 billion ($931 million) in the six months to Sept. 30, from A$730 million a year earlier, the Sydney-based bank said in a statement today. The stock fell after Chief Executive Officer Alan Moss said second-half earnings won't match first-half profit.
Macquarie generated two-thirds of revenue from Asia, where stocks excluding Japan have climbed 33 percent this year, helping it withstand a collapse in the U.S. subprime mortgage market that sparked $45 billion of writedowns from global rivals. Equity markets ``may not continue to be as favorable,'' the bank said.
``There was a lack of clarity and a degree of conservatism in the outlook that is pushing the shares lower,'' said Sean Fenton, who helps manage the equivalent of $832 million, including Macquarie stock, at Jenkins Investment Management in Sydney. ``What's clear in this result is just how untouched the company has been by the subprime crisis.''
Macquarie's shares fell 3.7 percent to A$79 at the close in Sydney. The stock has risen 23 percent since touching a year-low of A$64 in August as investors heeded Moss's assurance that Macquarie has ``no material problem credit exposures.''
The company will pay a dividend of A$1.45 a share compared with A$1.25 a share a year earlier. That's less than the A$1.62 that analysts at Citigroup estimated, and the A$1.65 forecast by Credit Suisse Group.
pennystockclub.net
понедельник, 12 ноября 2007 г.
ABN, UBS May Face Downgrades on Financial CPDOs, Moody's Says
ABN Amro Holding NV and UBS AG may face credit rating downgrades on a total 492.5 million euros ($717 million) of constant proportion debt obligations, bonds based on credit-default swaps, Moody's Investors Service said.
CPDOs are designed to combine returns of as much as 2 percentage points more than money-market rates with the top debt rankings by speculating on credit quality. The eight CPDOs under review reference credit-default swaps based on the debt of financial institutions, whose credit quality has deteriorated because of losses on subprime mortgages.
Credit-default swaps on banks and insurers have jumped to about 55 basis points from about 10 basis points since the start of July, according to the benchmark iTraxx index of senior debt from 25 financial companies. The cost, or spread, on credit- default swaps rises as perceptions of creditworthiness worsen.
The review ``is in response to the continuing spread widening and spread volatility on the financial names underlying these CPDOs negatively impacting their net asset values,'' Moody's said in a statement today.
Moody's is reviewing ratings on four CPDOs called Financial Basket Tyger notes sold by Zurich-based UBS through its Elm BV unit, of which two are rated Aa3 and the rest Aaa. The New York- based ratings firm also may cut a Aa2 rated CPDO sold through UBS in London, called Financial CPDO Credit Default Swap.
ABN Amro had two Aaa rated CPDOs issued under its SURF program placed under review. The notes were issued through ABN's Castle II Ltd. and Chess III Ltd. vehicles.
CPDOs are based on indexes of credit-default swaps. The contracts pay the buyer face value if the borrower can't meet payments on its debt in return for the defaulted notes or cash equivalent.
predictpennystockmarket.com
CPDOs are designed to combine returns of as much as 2 percentage points more than money-market rates with the top debt rankings by speculating on credit quality. The eight CPDOs under review reference credit-default swaps based on the debt of financial institutions, whose credit quality has deteriorated because of losses on subprime mortgages.
Credit-default swaps on banks and insurers have jumped to about 55 basis points from about 10 basis points since the start of July, according to the benchmark iTraxx index of senior debt from 25 financial companies. The cost, or spread, on credit- default swaps rises as perceptions of creditworthiness worsen.
The review ``is in response to the continuing spread widening and spread volatility on the financial names underlying these CPDOs negatively impacting their net asset values,'' Moody's said in a statement today.
Moody's is reviewing ratings on four CPDOs called Financial Basket Tyger notes sold by Zurich-based UBS through its Elm BV unit, of which two are rated Aa3 and the rest Aaa. The New York- based ratings firm also may cut a Aa2 rated CPDO sold through UBS in London, called Financial CPDO Credit Default Swap.
ABN Amro had two Aaa rated CPDOs issued under its SURF program placed under review. The notes were issued through ABN's Castle II Ltd. and Chess III Ltd. vehicles.
CPDOs are based on indexes of credit-default swaps. The contracts pay the buyer face value if the borrower can't meet payments on its debt in return for the defaulted notes or cash equivalent.
predictpennystockmarket.com
Subprime Losses May Reach $400 Billion, Analysts Say
Losses from the falling value of subprime mortgage assets may reach $300 billion to $400 billion worldwide, Deutsche Bank AG analysts said.
Wall Street's largest banks and brokers will be forced to write down as much as $130 billion because of the slump in subprime-related debt, according to a report today by Mike Mayo, a New York-based analyst. The rest of the losses will come from smaller banks and investors in mortgage-related securities.
Citigroup Inc., Merrill Lynch & Co. and Morgan Stanley led more than $40 billion of writedowns of assets as record U.S. foreclosures plundered asset prices. About $1.2 trillion of the $10 trillion of outstanding U.S. home loans are considered to be subprime, Mayo said in the note.
``We're not out of the woods yet,'' said Mondher Bettaieb- Loriot, who helps manage the equivalent of about $58 billion at Swisscanto Asset Management in Zurich. ``There are more losses to be taken and there's more negative news to come. At some point it will be a buying opportunity but we're not there yet.''
Deutsche Bank expects 30 percent to 40 percent of subprime debt to default. Losses on loans to people with poor credit histories may be as much as half the sum lent, Mayo wrote. The forecasts on total writedowns are based on ``seat-of-the-pants'' estimates using losses announced by the biggest securities firms, he said.
Estimates Grow
Banks and brokers may have to write off $60 billion to $70 billion this year, Mayo wrote. The estimate is based on known charges of $43 billion and expected additional losses of $25 billion. The report didn't include writedowns at Frankfurt-based Deutsche Bank, which were 2.16 billion euros ($3.15 billion) in the third quarter.
Loss rates on about $200 billion of securities based on derivatives linked to subprime debt will run to as high as 80 percent, Mayo wrote.
Estimates of losses have soared this year as defaults and foreclosures increased.
Total writedowns from subprime slump may be as much as $250 billion over the next five years, Lehman Brothers Holdings Inc. analysts said last week. Credit Suisse Group in Zurich estimated in July the total would be as much as $52 billion. Pacific Investment Management Co. in Newport Beach, California, in April put the fallout at $75 billion.
predictpennystockmarket.com
Wall Street's largest banks and brokers will be forced to write down as much as $130 billion because of the slump in subprime-related debt, according to a report today by Mike Mayo, a New York-based analyst. The rest of the losses will come from smaller banks and investors in mortgage-related securities.
Citigroup Inc., Merrill Lynch & Co. and Morgan Stanley led more than $40 billion of writedowns of assets as record U.S. foreclosures plundered asset prices. About $1.2 trillion of the $10 trillion of outstanding U.S. home loans are considered to be subprime, Mayo said in the note.
``We're not out of the woods yet,'' said Mondher Bettaieb- Loriot, who helps manage the equivalent of about $58 billion at Swisscanto Asset Management in Zurich. ``There are more losses to be taken and there's more negative news to come. At some point it will be a buying opportunity but we're not there yet.''
Deutsche Bank expects 30 percent to 40 percent of subprime debt to default. Losses on loans to people with poor credit histories may be as much as half the sum lent, Mayo wrote. The forecasts on total writedowns are based on ``seat-of-the-pants'' estimates using losses announced by the biggest securities firms, he said.
Estimates Grow
Banks and brokers may have to write off $60 billion to $70 billion this year, Mayo wrote. The estimate is based on known charges of $43 billion and expected additional losses of $25 billion. The report didn't include writedowns at Frankfurt-based Deutsche Bank, which were 2.16 billion euros ($3.15 billion) in the third quarter.
Loss rates on about $200 billion of securities based on derivatives linked to subprime debt will run to as high as 80 percent, Mayo wrote.
Estimates of losses have soared this year as defaults and foreclosures increased.
Total writedowns from subprime slump may be as much as $250 billion over the next five years, Lehman Brothers Holdings Inc. analysts said last week. Credit Suisse Group in Zurich estimated in July the total would be as much as $52 billion. Pacific Investment Management Co. in Newport Beach, California, in April put the fallout at $75 billion.
predictpennystockmarket.com
суббота, 10 ноября 2007 г.
National Australia Posts Record Second-Half Profit
National Australia Bank Ltd., the country's biggest, posted record second-half profit as lending increased in an economy that's entered its 16th consecutive year of expansion.
Net income climbed 1.8 percent to A$2.44 billion ($2.26 billion) in the six months ended Sept. 30 from a year earlier, the company said in a statement today. It also tapped demand for loans in the U.K., where it earns almost 20 percent of profit.
National Australia is the third of the country's banks to post record earnings in the past two weeks, dodging the subprime mortgage crisis that cost U.S. financial institutions more than $40 billion. Australian banks are increasing lending at the fastest pace in 18 years as the nation benefits from the longest run of jobs growth since 1995.
``The numbers look good across the board, and I don't see any obvious red flags,'' said Troy Angus, who helps manage A$4 billion at Paradice Investment Management Ltd., including National Australia Bank shares, in Sydney. ``We liked the bank's confidence in keeping costs lower.''
Chief Executive Officer John Stewart declared a second-half dividend of 95 cents a share, up from 84 cents a year earlier, and forecast costs to remain within inflation to 2010. Annual profit of A$4.58 billion beat the A$4.36 billion median estimate of 15 analysts surveyed by Bloomberg.
microcapeducation.com
Net income climbed 1.8 percent to A$2.44 billion ($2.26 billion) in the six months ended Sept. 30 from a year earlier, the company said in a statement today. It also tapped demand for loans in the U.K., where it earns almost 20 percent of profit.
National Australia is the third of the country's banks to post record earnings in the past two weeks, dodging the subprime mortgage crisis that cost U.S. financial institutions more than $40 billion. Australian banks are increasing lending at the fastest pace in 18 years as the nation benefits from the longest run of jobs growth since 1995.
``The numbers look good across the board, and I don't see any obvious red flags,'' said Troy Angus, who helps manage A$4 billion at Paradice Investment Management Ltd., including National Australia Bank shares, in Sydney. ``We liked the bank's confidence in keeping costs lower.''
Chief Executive Officer John Stewart declared a second-half dividend of 95 cents a share, up from 84 cents a year earlier, and forecast costs to remain within inflation to 2010. Annual profit of A$4.58 billion beat the A$4.36 billion median estimate of 15 analysts surveyed by Bloomberg.
microcapeducation.com
Google Shares May Rise to $1,000, Fund Manager Jacob Predicts
Google Inc. shares may surpass $1,000 over the next year as the world's most popular Internet search engine trounces competitors, said Ryan Jacob, manager of the best-performing technology fund.
The Mountain View, California-based company's stock reached $700 on Oct. 31 after rising to $600 earlier in the month. A price of $1,000 would be a 44 percent increase from yesterday's close.
Google is ``taking share from smaller players and consolidating their lead among larger competitors,'' Jacob, who made Google his second-largest holding in his top-performing Jacob Internet Fund, said in an interview yesterday in Boston. ``I don't think $1,000 price targets are a stretch.''
Apart from dominating the market for Internet search, Google this month said it would create a mobile-phone operating system for handsets sold by Sprint Nextel Corp. and T-Mobile USA Inc. The agreement could increase advertising revenue, which accounts for 99 percent of its $10 billion in annual sales.
Google started what it calls the Open Handset Alliance to make free software that will help the phones run applications. Nokia Oyj and Microsoft Corp. have separate phone operating systems that aren't open to developers.
microcapeducation.com
The Mountain View, California-based company's stock reached $700 on Oct. 31 after rising to $600 earlier in the month. A price of $1,000 would be a 44 percent increase from yesterday's close.
Google is ``taking share from smaller players and consolidating their lead among larger competitors,'' Jacob, who made Google his second-largest holding in his top-performing Jacob Internet Fund, said in an interview yesterday in Boston. ``I don't think $1,000 price targets are a stretch.''
Apart from dominating the market for Internet search, Google this month said it would create a mobile-phone operating system for handsets sold by Sprint Nextel Corp. and T-Mobile USA Inc. The agreement could increase advertising revenue, which accounts for 99 percent of its $10 billion in annual sales.
Google started what it calls the Open Handset Alliance to make free software that will help the phones run applications. Nokia Oyj and Microsoft Corp. have separate phone operating systems that aren't open to developers.
microcapeducation.com
пятница, 9 ноября 2007 г.
European Notes Set for Biggest Gain in Three Weeks on Rate View
European two-year government notes headed for their biggest weekly advance in three on speculation credit-market turmoil will deter the European Central Bank from lifting interest rates to curb inflation.
The difference in yields, or spread, between two- and 10- year German bonds rose to the widest in a month as renewed concern that the collapse of the U.S. subprime market will hurt economic growth boosted demand for the safest assets. Industrial production in France, the euro-region's second-biggest economy, fell more than forecast in September, a report showed today.
``It's all been about the financial sector and there's been a lot of flight to quality,'' said Toby Nangle, head of global aggregate fixed income at Baring Investment Services Ltd. in London. ``Unless we get some respite from the bad news'' yields will continue to fall.
The yield on the two-year note has slipped 8 basis points this week to 3.86 percent by 9:25 a.m. in London, 2 points higher on the day. The price of the 4 percent note due September 2009 has risen 0.14, or 1.4 euros per 1,000-euro ($1,469) face amount, to 100.23.
The yield on the 10-year bund, Europe's benchmark government security, has fallen 4 basis points this week to 4.14 percent.
Bunds were further hurt as Morgan Stanley, Merrill Lynch & Co. and Citigroup Inc. this week said they lost money on securities linked with home loans to risky borrowers. Yields move inversely to bond prices.
smallcap-review.com
The difference in yields, or spread, between two- and 10- year German bonds rose to the widest in a month as renewed concern that the collapse of the U.S. subprime market will hurt economic growth boosted demand for the safest assets. Industrial production in France, the euro-region's second-biggest economy, fell more than forecast in September, a report showed today.
``It's all been about the financial sector and there's been a lot of flight to quality,'' said Toby Nangle, head of global aggregate fixed income at Baring Investment Services Ltd. in London. ``Unless we get some respite from the bad news'' yields will continue to fall.
The yield on the two-year note has slipped 8 basis points this week to 3.86 percent by 9:25 a.m. in London, 2 points higher on the day. The price of the 4 percent note due September 2009 has risen 0.14, or 1.4 euros per 1,000-euro ($1,469) face amount, to 100.23.
The yield on the 10-year bund, Europe's benchmark government security, has fallen 4 basis points this week to 4.14 percent.
Bunds were further hurt as Morgan Stanley, Merrill Lynch & Co. and Citigroup Inc. this week said they lost money on securities linked with home loans to risky borrowers. Yields move inversely to bond prices.
smallcap-review.com
Housing to Take Toll on U.S., Fed to Lower Rate, Survey Shows
The U.S. economy will grow in the fourth quarter at less than half the pace of the previous three months as the deepening housing slump and higher energy costs slow consumer spending, according to a survey of economists.
The economy will grow at an annual rate of 1.5 percent from October through December, less than forecast last month and down from a 3.9 percent third-quarter pace, according to the median of 73 economists surveyed by Bloomberg News from Nov. 1 to Nov. 8. Growth estimates for 2008 were also reduced.
Declining home values, $3-a-gallon gasoline, higher heating bills and lending restrictions will leave American consumers and businesses with less cash to spend. Federal Reserve policy makers will lower the benchmark interest rate early next year as evidence mounts the six-year expansion was in jeopardy.
``The storm clouds are gathering,'' said Nigel Gault, chief U.S. economist at Global Insight Inc. in Lexington, Massachusetts. ``On top of the housing and credit problems, the economy is now facing a second shock from oil.''
Global Insight lowered their fourth-quarter forecast to 1.3 percent from 1.5 percent and projected even slower growth in the first three months of 2008.
smallcap-review.com
The economy will grow at an annual rate of 1.5 percent from October through December, less than forecast last month and down from a 3.9 percent third-quarter pace, according to the median of 73 economists surveyed by Bloomberg News from Nov. 1 to Nov. 8. Growth estimates for 2008 were also reduced.
Declining home values, $3-a-gallon gasoline, higher heating bills and lending restrictions will leave American consumers and businesses with less cash to spend. Federal Reserve policy makers will lower the benchmark interest rate early next year as evidence mounts the six-year expansion was in jeopardy.
``The storm clouds are gathering,'' said Nigel Gault, chief U.S. economist at Global Insight Inc. in Lexington, Massachusetts. ``On top of the housing and credit problems, the economy is now facing a second shock from oil.''
Global Insight lowered their fourth-quarter forecast to 1.3 percent from 1.5 percent and projected even slower growth in the first three months of 2008.
smallcap-review.com
четверг, 8 ноября 2007 г.
3i Net Asset Value Advances 27% Amid Credit Turmoil
3i Group Plc, Europe's biggest publicly traded private equity firm, said the net value of its assets rose 27 percent in its fiscal first half even as rising borrowing costs crimped the pace of leveraged buyouts.
Net asset value rose to 1,007 pence a share in the six months to Sept. 30 from 792 pence in the year-earlier period, Chief Executive Officer Philip Yea said on a conference call with reporters today. That beat the 981 pence average forecast of three analysts surveyed by Bloomberg News.
Yea is boosting infrastructure and growth-capital investments to increase returns while allocating less to buyouts as banks struggle to clear, or syndicate, a backlog of leveraged loans. After a record $579 billion of takeovers in the first half, the pace of buyouts has slumped by almost 50 percent, according to data compiled by Bloomberg.
``In terms of summer's dislocation in the leveraged finance markets, the effect on mid-market hasn't been as pronounced as at the large end,'' Yea, 52, said today. ``We weren't as reliant on big underwritten syndications as the top of the market.''
3i reaped 1.04 billion pounds ($2.2 billion) from selling investments including Aibel Ltd., a Norwegian offshore oil and gas service provider, and Care Principals, a chain of British nursing homes it sold to a Qatari fund for 270 million pounds in July. That rate of realizations may now slow, the company said.
milliondollarstrade.com
Net asset value rose to 1,007 pence a share in the six months to Sept. 30 from 792 pence in the year-earlier period, Chief Executive Officer Philip Yea said on a conference call with reporters today. That beat the 981 pence average forecast of three analysts surveyed by Bloomberg News.
Yea is boosting infrastructure and growth-capital investments to increase returns while allocating less to buyouts as banks struggle to clear, or syndicate, a backlog of leveraged loans. After a record $579 billion of takeovers in the first half, the pace of buyouts has slumped by almost 50 percent, according to data compiled by Bloomberg.
``In terms of summer's dislocation in the leveraged finance markets, the effect on mid-market hasn't been as pronounced as at the large end,'' Yea, 52, said today. ``We weren't as reliant on big underwritten syndications as the top of the market.''
3i reaped 1.04 billion pounds ($2.2 billion) from selling investments including Aibel Ltd., a Norwegian offshore oil and gas service provider, and Care Principals, a chain of British nursing homes it sold to a Qatari fund for 270 million pounds in July. That rate of realizations may now slow, the company said.
milliondollarstrade.com
Bankruptcy Law Backfires as Foreclosures Offset Gains
Washington Mutual Inc. got what it wanted in 2005: A revised bankruptcy code that no longer lets people walk away from credit card bills.
The largest U.S. savings and loan didn't count on a housing recession. The new bankruptcy laws are helping drive foreclosures to a record as homeowners default on mortgages and struggle to pay credit card debts that might have been wiped out under the old code, said Jay Westbrook, a professor of business law at the University of Texas Law School in Austin and a former adviser to the International Monetary Fund and the World Bank.
``Be careful what you wish for,'' Westbrook said. ``They wanted to make sure that people kept paying their credit cards, and what they're getting is more foreclosures.''
Washington Mutual, Bank of America Corp., JPMorgan Chase & Co. and Citigroup Inc. spent $25 million in 2004 and 2005 lobbying for a legislative agenda that included changes in bankruptcy laws to protect credit card profits, according to the Center for Responsive Politics, a non-partisan Washington group that tracks political donations.
The banks are still paying for that decision. The surge in foreclosures has cut the value of securities backed by mortgages and led to more than $40 billion of writedowns for U.S. financial institutions. It also reached to the top echelons of the financial services industry.
milliondollarsfinance.com
The largest U.S. savings and loan didn't count on a housing recession. The new bankruptcy laws are helping drive foreclosures to a record as homeowners default on mortgages and struggle to pay credit card debts that might have been wiped out under the old code, said Jay Westbrook, a professor of business law at the University of Texas Law School in Austin and a former adviser to the International Monetary Fund and the World Bank.
``Be careful what you wish for,'' Westbrook said. ``They wanted to make sure that people kept paying their credit cards, and what they're getting is more foreclosures.''
Washington Mutual, Bank of America Corp., JPMorgan Chase & Co. and Citigroup Inc. spent $25 million in 2004 and 2005 lobbying for a legislative agenda that included changes in bankruptcy laws to protect credit card profits, according to the Center for Responsive Politics, a non-partisan Washington group that tracks political donations.
The banks are still paying for that decision. The surge in foreclosures has cut the value of securities backed by mortgages and led to more than $40 billion of writedowns for U.S. financial institutions. It also reached to the top echelons of the financial services industry.
milliondollarsfinance.com
Hedge Funds Have Best Month in Over Two Years, Eurekahedge Says
An index tracking global hedge funds recorded its best performance in almost two years in October as equities rose and commodities including gold and oil advanced, according to Eurekahedge.
The Eurekahedge Hedge Fund Index, which tracks the performance of 2,575 funds investing globally, gained 3.6 percent, the biggest advance since January 2006, according to preliminary figures compiled by Eurekahedge, a Singapore-based hedge-fund research and publishing company. The index rose 3.3 percent in September.
The MSCI World Index climbed 3 percent in October, helping managers of so-called long-short funds who bet on rising and falling stock prices, the Eurekahedge report said. Those managing commodity-related hedge funds also benefited as crude rose to a record and the price of gold jumped to the highest since 1980 amid a plunging dollar, the report said.
Regional indexes continued to rebound after the turmoil in the U.S. subprime loan market. The Eurekahedge North American Hedge Fund Index advanced 2.7 percent, while the one tracking European hedge funds added 2.1 percent.
In Asia, the Eurekahedge Japan Hedge Fund Index, which tracks 126 funds investing in Japan, climbed 0.6 percent. The index tracking hedge funds investing in Asia outside Japan jumped 4.7 percent.
Different data, compiled by Chicago-based Hedge Fund Research Inc., showed hedge funds returned an average 3.2 percent in October, the biggest gain in almost two years, as rising stocks and bets against mortgage-backed securities helped firms including Pequot Capital Management Inc. and Passport Management LLC.
Hedge funds are private, largely unregulated pools of capital whose managers can buy or sell any assets and participate substantially in profits from money invested. Globally, managers oversee more than $1.8 trillion, according to Hedge Fund Research.
investanalyticsarticles.com
The Eurekahedge Hedge Fund Index, which tracks the performance of 2,575 funds investing globally, gained 3.6 percent, the biggest advance since January 2006, according to preliminary figures compiled by Eurekahedge, a Singapore-based hedge-fund research and publishing company. The index rose 3.3 percent in September.
The MSCI World Index climbed 3 percent in October, helping managers of so-called long-short funds who bet on rising and falling stock prices, the Eurekahedge report said. Those managing commodity-related hedge funds also benefited as crude rose to a record and the price of gold jumped to the highest since 1980 amid a plunging dollar, the report said.
Regional indexes continued to rebound after the turmoil in the U.S. subprime loan market. The Eurekahedge North American Hedge Fund Index advanced 2.7 percent, while the one tracking European hedge funds added 2.1 percent.
In Asia, the Eurekahedge Japan Hedge Fund Index, which tracks 126 funds investing in Japan, climbed 0.6 percent. The index tracking hedge funds investing in Asia outside Japan jumped 4.7 percent.
Different data, compiled by Chicago-based Hedge Fund Research Inc., showed hedge funds returned an average 3.2 percent in October, the biggest gain in almost two years, as rising stocks and bets against mortgage-backed securities helped firms including Pequot Capital Management Inc. and Passport Management LLC.
Hedge funds are private, largely unregulated pools of capital whose managers can buy or sell any assets and participate substantially in profits from money invested. Globally, managers oversee more than $1.8 trillion, according to Hedge Fund Research.
investanalyticsarticles.com
Man Group Profit Rises on 11% Gain in Client Assets
Man Group Plc, the world's largest publicly traded hedge fund company, said fiscal first-half profit rose more than analysts estimated as it took in more client money and boosted management fees.
Net income from continuing operations for the six months ended Sept. 30 rose about 16 percent to $672 million, or 34.1 cents a share, from $580 million, or 29.2 cents, in the year- earlier period, the London-based company said today in a statement. Analysts forecast a profit of $625 million, according to the average of five estimates compiled by Bloomberg.
Man Group increased funds under management by 11 percent to $68.6 billion over the six-month period. Its performance fees rose 28 percent at a time when hedge fund managers including New York- based Bear Stearns Cos. have had to liquidate funds to cope with declines. The second half of the year ``started strongly,'' Man Group Chief Executive Officer Peter Clarke said.
``Given the market backdrop, we believe the performance is holding up relatively well,'' said Nic Clarke, a London-based analyst at Charles Stanley Group Plc, in a note to clients. ``We are pleased to read that the second half has started strongly,'' who rates the stock a ``buy.''
Shares of Man Group rose 0.3 percent to 560.5 pence at 11:30 a.m. in London on a day when concerns about U.S. subprime losses pulled the FTSE All-Share General Financial Index down 1.8 percent. Morgan Stanley, the second-biggest U.S. securities firm, joined Merrill Lynch & Co. and Citigroup Inc. yesterday in booking losses on subprime mortgage-related assets and said it lost $3.7 billion in the two months through Oct. 31.
Man Group shares are up 5.4 percent this year, valuing the company at 10.8 billion pounds. The stock has outperformed the 40- member FTSE General Financial Index, up 1.6 percent.
tradeonlinesystem.com
Net income from continuing operations for the six months ended Sept. 30 rose about 16 percent to $672 million, or 34.1 cents a share, from $580 million, or 29.2 cents, in the year- earlier period, the London-based company said today in a statement. Analysts forecast a profit of $625 million, according to the average of five estimates compiled by Bloomberg.
Man Group increased funds under management by 11 percent to $68.6 billion over the six-month period. Its performance fees rose 28 percent at a time when hedge fund managers including New York- based Bear Stearns Cos. have had to liquidate funds to cope with declines. The second half of the year ``started strongly,'' Man Group Chief Executive Officer Peter Clarke said.
``Given the market backdrop, we believe the performance is holding up relatively well,'' said Nic Clarke, a London-based analyst at Charles Stanley Group Plc, in a note to clients. ``We are pleased to read that the second half has started strongly,'' who rates the stock a ``buy.''
Shares of Man Group rose 0.3 percent to 560.5 pence at 11:30 a.m. in London on a day when concerns about U.S. subprime losses pulled the FTSE All-Share General Financial Index down 1.8 percent. Morgan Stanley, the second-biggest U.S. securities firm, joined Merrill Lynch & Co. and Citigroup Inc. yesterday in booking losses on subprime mortgage-related assets and said it lost $3.7 billion in the two months through Oct. 31.
Man Group shares are up 5.4 percent this year, valuing the company at 10.8 billion pounds. The stock has outperformed the 40- member FTSE General Financial Index, up 1.6 percent.
tradeonlinesystem.com
Morgan Stanley Marks Down $3.7 Billion, Cuts Outlook
Morgan Stanley joined Merrill Lynch & Co. and Citigroup Inc. in booking losses on subprime mortgage- related assets and said the outlook for credit markets is bleaker than in September. The stock rose after analysts said the loss is ``manageable.''
The second-biggest U.S. securities firm by market value after Goldman Sachs Group Inc. said it lost $3.7 billion in the two months through Oct. 31. Prices for securities linked with home loans to risky borrowers sank further than traders expected, cutting fourth-quarter earnings by $2.5 billion, the New York- based bank said. The figure may change by the end of the month.
Merrill Lynch, the third-largest firm, said two weeks ago that it wrote down $8.4 billion of leveraged loans and fixed- income securities while Citigroup, the biggest U.S. bank, said Nov. 4 that its holdings lost as much as $11 billion of their value in October. Colm Kelleher, Morgan Stanley's chief financial officer, said markets may take three to four quarters to recover instead of the one or two he predicted in September.
``The healing process will take longer,'' Kelleher, 50, said in an interview yesterday. ``The dislocation in the market has been quite severe, liquidity has dried up.''
Morgan Stanley rose $1.93, or 3.8 percent, to $53.12 at 9:50 a.m. in New York Stock Exchange composite trading. Concern about potential writedowns at Morgan Stanley pushed the stock lower this week, bringing this year's decline to 24 percent through yesterday.
investcommunity.org
The second-biggest U.S. securities firm by market value after Goldman Sachs Group Inc. said it lost $3.7 billion in the two months through Oct. 31. Prices for securities linked with home loans to risky borrowers sank further than traders expected, cutting fourth-quarter earnings by $2.5 billion, the New York- based bank said. The figure may change by the end of the month.
Merrill Lynch, the third-largest firm, said two weeks ago that it wrote down $8.4 billion of leveraged loans and fixed- income securities while Citigroup, the biggest U.S. bank, said Nov. 4 that its holdings lost as much as $11 billion of their value in October. Colm Kelleher, Morgan Stanley's chief financial officer, said markets may take three to four quarters to recover instead of the one or two he predicted in September.
``The healing process will take longer,'' Kelleher, 50, said in an interview yesterday. ``The dislocation in the market has been quite severe, liquidity has dried up.''
Morgan Stanley rose $1.93, or 3.8 percent, to $53.12 at 9:50 a.m. in New York Stock Exchange composite trading. Concern about potential writedowns at Morgan Stanley pushed the stock lower this week, bringing this year's decline to 24 percent through yesterday.
investcommunity.org
Asian Debt, Equities May See More Pressure, S&P Says
Asian companies are more likely to default next year as borrowing costs rise, and the region's stocks may fall because they are too expensive, Standard & Poor's said.
Rising costs and tighter access to funding, especially for companies with risk profiles weakened by acquisitions and expansion, will undermine borrowers, the rating assessor said in a report today.
Risk premiums in Asian bonds haven't increased as much as in the U.S. and Europe since record defaults on U.S. loans to people with poor credit histories brought global credit markets to a standstill in July.
``The balance of our rating outlooks on the corporate sector suggests there may be more rating downgrades than upgrades among Asia-Pacific companies in 2008, in sharp contrast to the general improvement in credit quality this year,'' Melbourne-based Ian Thompson, S&P's chief credit officer for Asia-Pacific, said in the report.
Equity markets in the region, having risen 16 percent this year according to the Morgan Stanley Capital International Asia- Pacific Index, will have less room to keep advancing next year as concerns about inflation and weakening U.S. and European economies intensities, the New York-based rating company said.
marketcollege.net
Rising costs and tighter access to funding, especially for companies with risk profiles weakened by acquisitions and expansion, will undermine borrowers, the rating assessor said in a report today.
Risk premiums in Asian bonds haven't increased as much as in the U.S. and Europe since record defaults on U.S. loans to people with poor credit histories brought global credit markets to a standstill in July.
``The balance of our rating outlooks on the corporate sector suggests there may be more rating downgrades than upgrades among Asia-Pacific companies in 2008, in sharp contrast to the general improvement in credit quality this year,'' Melbourne-based Ian Thompson, S&P's chief credit officer for Asia-Pacific, said in the report.
Equity markets in the region, having risen 16 percent this year according to the Morgan Stanley Capital International Asia- Pacific Index, will have less room to keep advancing next year as concerns about inflation and weakening U.S. and European economies intensities, the New York-based rating company said.
marketcollege.net
Asia-Pacific Corporate Bond Risk Increases, Default Swaps Show
The risk of Asia-Pacific companies defaulting on their debt increased as Morgan Stanley and other securities firms reported losses linked to subprime securities.
Credit-default swaps in Asia excluding Japan rose the most since the current index started trading on Sept. 20 on concern losses on securities tied to the U.S. housing market will keep increasing. Morgan Stanley, the second-biggest U.S. securities firm, said its subprime mortgages and related securities lost $3.7 billion in the past two months.
``The effect has been imported from overseas with more bad news regarding subprime, which has caused the spread to widen,'' said Peggy Furusaka, sector specialist at BNP Paribas in Tokyo. Asian companies are worried about their ``exposure to subprime with the negative news flowing from the U.S.,'' she said.
Credit-default swaps on the iTraxx Asia Ex-Japan Series 8 Index of 70 borrowers, including the Thai government and Mumbai- based Tata Motors Ltd., increased 11 basis points to 128.5 basis points as of 1:56 p.m. in Tokyo, according to prices from JPMorgan Chase & Co.
The iTraxx Australia Series 8 Index of 25 companies, including Qantas Airways Ltd. and Macquarie Bank Ltd., rose 1.5 basis points to 46.5 basis points, JPMorgan prices show.
ACA Capital Holdings Inc., a seller of default protection on securities linked to mortgages and other debt, yesterday reported the largest writedown in the financial guarantee industry this year.
pennystockclub.net
Credit-default swaps in Asia excluding Japan rose the most since the current index started trading on Sept. 20 on concern losses on securities tied to the U.S. housing market will keep increasing. Morgan Stanley, the second-biggest U.S. securities firm, said its subprime mortgages and related securities lost $3.7 billion in the past two months.
``The effect has been imported from overseas with more bad news regarding subprime, which has caused the spread to widen,'' said Peggy Furusaka, sector specialist at BNP Paribas in Tokyo. Asian companies are worried about their ``exposure to subprime with the negative news flowing from the U.S.,'' she said.
Credit-default swaps on the iTraxx Asia Ex-Japan Series 8 Index of 70 borrowers, including the Thai government and Mumbai- based Tata Motors Ltd., increased 11 basis points to 128.5 basis points as of 1:56 p.m. in Tokyo, according to prices from JPMorgan Chase & Co.
The iTraxx Australia Series 8 Index of 25 companies, including Qantas Airways Ltd. and Macquarie Bank Ltd., rose 1.5 basis points to 46.5 basis points, JPMorgan prices show.
ACA Capital Holdings Inc., a seller of default protection on securities linked to mortgages and other debt, yesterday reported the largest writedown in the financial guarantee industry this year.
pennystockclub.net
Japan's 10-Year Bonds Rise as Stock Slide Spurs Demand for Debt
Japan's 10-year bonds gained for a second day as a slide in global stocks boosted demand for the relative safety of government securities.
Benchmark debt advanced as escalating losses tied to U.S. subprime-mortgage defaults reinforced expectations the Bank of Japan will hold off raising interest rates in the first quarter of 2008. Bonds also rose after a government report showed machinery orders fell more than economists expected.
``We are still at the first stage of seeing the effect of the U.S. subprime crisis, which is positive for the bond market,'' said Jun Fukashiro, a fund manager in Tokyo at Toyota Asset Management Co., which holds the equivalent of about $10.4 billion in assets. The decline in machinery orders is ``another positive factor for the bond market today,'' he said.
The yield on the 1.7 percent bond due September 2017 fell 2 basis points to 1.54 percent as of 5:42 p.m. in Tokyo at Japan Bond Trading Co., the nation's largest interdealer debt broker. The price rose 0.173 yen to 101.366 yen.
The yield on the benchmark five-year note fell 1.5 basis points to 1.06 percent. A basis point is 0.01 percentage point.
Ten-year bond futures for December delivery rose 0.29 to 136.59 as of the afternoon close on the Tokyo Stock Exchange. The Nikkei 225 Stock Average slid 2 percent to 15,771.57.
Machinery orders declined a seasonally adjusted 7.6 percent to 958.7 billion yen ($8.5 billion) in September from August, the Cabinet Office said in Tokyo. The median estimate of economists surveyed by Bloomberg News was for a 1.5 percent drop.
predictpennystockmarket.com
Benchmark debt advanced as escalating losses tied to U.S. subprime-mortgage defaults reinforced expectations the Bank of Japan will hold off raising interest rates in the first quarter of 2008. Bonds also rose after a government report showed machinery orders fell more than economists expected.
``We are still at the first stage of seeing the effect of the U.S. subprime crisis, which is positive for the bond market,'' said Jun Fukashiro, a fund manager in Tokyo at Toyota Asset Management Co., which holds the equivalent of about $10.4 billion in assets. The decline in machinery orders is ``another positive factor for the bond market today,'' he said.
The yield on the 1.7 percent bond due September 2017 fell 2 basis points to 1.54 percent as of 5:42 p.m. in Tokyo at Japan Bond Trading Co., the nation's largest interdealer debt broker. The price rose 0.173 yen to 101.366 yen.
The yield on the benchmark five-year note fell 1.5 basis points to 1.06 percent. A basis point is 0.01 percentage point.
Ten-year bond futures for December delivery rose 0.29 to 136.59 as of the afternoon close on the Tokyo Stock Exchange. The Nikkei 225 Stock Average slid 2 percent to 15,771.57.
Machinery orders declined a seasonally adjusted 7.6 percent to 958.7 billion yen ($8.5 billion) in September from August, the Cabinet Office said in Tokyo. The median estimate of economists surveyed by Bloomberg News was for a 1.5 percent drop.
predictpennystockmarket.com
European Bonds Rise on Morgan Stanley Losses, Stock Declines
European two-year government notes advanced the most in a week as stocks fell after Morgan Stanley booked losses on subprime mortgage-related assets and said the outlook for credit markets is bleaker than in September.
The difference in yields, or spread, between two- and 10- year German bonds was near the widest in four weeks as investors bought safer short-dated notes. The spread widened further after the European Central Bank decided not to raise interest rates today, increasing the appeal of the shorter-dated debt.
``Bonds are likely to remain well supported in the near term,'' said Orlando Green, a fixed-income strategist in London at Calyon, the investment-banking arm of Credit Agricole SA, France's second-biggest bank. ``The market is still being plagued by uncertainty and mistrust.''
The yield on the two-year note fell 6 basis points to 3.85 percent by 3:14 p.m. in London. The price of the 4 percent note due September 2009 rose 0.10, or 1 euro per 1,000-euro ($1,467) face amount, to 100.24.
Morgan Stanley, the second-biggest U.S. securities firm, said late yesterday it lost $3.7 billion in the two months through October on subprime mortgage-related securities. Merrill Lynch & Co. and Citigroup Inc. have also booked losses related to the subprime-mortgage crisis in the past two weeks.
microcapeducation.com
The difference in yields, or spread, between two- and 10- year German bonds was near the widest in four weeks as investors bought safer short-dated notes. The spread widened further after the European Central Bank decided not to raise interest rates today, increasing the appeal of the shorter-dated debt.
``Bonds are likely to remain well supported in the near term,'' said Orlando Green, a fixed-income strategist in London at Calyon, the investment-banking arm of Credit Agricole SA, France's second-biggest bank. ``The market is still being plagued by uncertainty and mistrust.''
The yield on the two-year note fell 6 basis points to 3.85 percent by 3:14 p.m. in London. The price of the 4 percent note due September 2009 rose 0.10, or 1 euro per 1,000-euro ($1,467) face amount, to 100.24.
Morgan Stanley, the second-biggest U.S. securities firm, said late yesterday it lost $3.7 billion in the two months through October on subprime mortgage-related securities. Merrill Lynch & Co. and Citigroup Inc. have also booked losses related to the subprime-mortgage crisis in the past two weeks.
microcapeducation.com
Miami-Dade Plans Airport Bond Sale as Muni Yield Curve Steepens
Miami-Dade County plans to sell about $540 million of bonds in today's largest scheduled offering of fixed-rate debt among U.S. state and local governments.
The deal to refinance debt for the county-owned Miami International Airport, with more direct service to the Caribbean and Latin America than any other U.S. airport, will be managed by Morgan Stanley. The sale arrives a day after lower-rated Puerto Rico shelved an offering that was to include a $600 million refinancing.
Investors are demanding higher yields to lend money to municipal borrowers for longer, driving the difference in rates between top-rated two- and 30-year tax-exempt bonds to the widest in almost 18 months, according to Municipal Market Advisors. Credit-market losses at the Wall Street banks that underwrite, trade and invest in municipal bonds as well as the insurers who guarantee them have brought back demand concerns that weighed on the market three months ago.
``Some of the same liquidity issues that cropped up in late July, early August are back in play,'' said Clark Stamper of Stamper Capital & Investments Inc. in Corona Del Mar, California. ``No one's bidding because they're all trying to figure out what to do.''
Average mid-market yields rose 1 basis point on two-year general obligation debt and 3 basis points on 30-year bonds yesterday, widening the gap between the two benchmark maturities to 116 basis points. A basis point is 0.01 percentage point.
smallcap-review.com
The deal to refinance debt for the county-owned Miami International Airport, with more direct service to the Caribbean and Latin America than any other U.S. airport, will be managed by Morgan Stanley. The sale arrives a day after lower-rated Puerto Rico shelved an offering that was to include a $600 million refinancing.
Investors are demanding higher yields to lend money to municipal borrowers for longer, driving the difference in rates between top-rated two- and 30-year tax-exempt bonds to the widest in almost 18 months, according to Municipal Market Advisors. Credit-market losses at the Wall Street banks that underwrite, trade and invest in municipal bonds as well as the insurers who guarantee them have brought back demand concerns that weighed on the market three months ago.
``Some of the same liquidity issues that cropped up in late July, early August are back in play,'' said Clark Stamper of Stamper Capital & Investments Inc. in Corona Del Mar, California. ``No one's bidding because they're all trying to figure out what to do.''
Average mid-market yields rose 1 basis point on two-year general obligation debt and 3 basis points on 30-year bonds yesterday, widening the gap between the two benchmark maturities to 116 basis points. A basis point is 0.01 percentage point.
smallcap-review.com
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