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2011-04-19 00:00:00 UTC | Serbia’s New IMF Arrangement May Begin in September, Danas Says | http://www.bloomberg.com/news/2011-04-19/serbia-s-new-imf-arrangement-may-begin-in-september-danas-says.html
| B y M i s h a S a v i c | Serbia’s new, precautionary credit
with the International Monetary Fund may be negotiated within
the coming months and start in September, Danas reported, citing
Mission Chief Albert Jaeger. The new loan program, size is yet to be determined, will
help Serbia reduce the number of public workers, make the
pension system more sustainable and the economy more export-
oriented, Jaeger was quoted as saying by the newspaper. Funds
from the credit would be drawn only in case of “external
shocks” such as soaring energy prices, according to the report. Serbia’s initial 3 billion-euro ($4.26 billion) bailout
loan with the IMF expired last week. The country drew only about
a half of the amount. To contact the reporter on this story:
Misha Savic in Belgrade at
[email protected] To contact the editor responsible for this story:
James M. Gomez at [email protected] | |||||||
2011-04-19 00:00:00 UTC | Sarkozy Calls For Special Workers’ Bonus as Economy Recovers | http://www.bloomberg.com/news/2011-04-19/sarkozy-calls-for-special-workers-bonus-as-economy-recovers.html
| B y H e l e n e F o u q u e t | French President Nicolas Sarkozy
said companies that have profited in the recovery from recession
should give employees a special bonus, as he seeks to recoup
support before he runs for re-election in a year’s time. “In all French companies, workers must feel that their
efforts during the crisis are being rewarded,” Sarkozy told
toolmakers today at La Fonte Ardennaise iron foundry in Vrigne-
aux-Bois, northeast France. “If a company gives more to the
shareholder, it must give more to the worker.” The president said parliament will examine a bill “in the
coming weeks” that would force companies to “share profits.”
Listed companies that increase their dividends would have to
negotiate a bonus with workers, while unlisted small and medium-
sized companies would have to provide a tax-free bonus. Sarkozy
did not give full details of his plan. Sarkozy’s factory visit took him to the same region where
in 2006 he announced the slogan of his first presidential
campaign, “Work more to earn more.” Sarkozy is seeking to
reconnect with those who supported him then, having become the
least popular French president since World War II and facing
possible elimination in the first round of next year’s vote. “I visit two to three factories every month, it’s not a
caprice,” Sarkozy said. “It’s because I love factories.” His
plans are “not promises, they are facts,” he told local mayors
at a roundtable in the town of Renwez after the factory visit. The French leader, who has not formally declared his
intentions for the 2012 race, travels around France once or
twice a week, visiting workplaces and schools and meeting with
voters. To contact the reporter on this story:
Helene Fouquet in Renwez, France , at
[email protected] To contact the editor responsible for this story:
James Hertling at | |||||||
2011-04-19 00:00:00 UTC | Italy’s Tremonti Says EU May Need New Treaty, Ansa Reports | http://www.bloomberg.com/news/2011-04-19/italy-s-tremonti-says-eu-may-need-new-treaty-ansa-reports.html
| B y A n d r e w D a v i s | Italian Finance Minister Giulio Tremonti said the European Union’s governing treaty may have
been rendered obsolete by the financial crisis and the impact of
globalization and a new agreement should be considered, Ansa
news agency reported. “They are products of a previous world,” Tremonti said in
testimony to the Constitutional Affairs Committee of the
European Parliament in Brussels, Ansa reported today. The global
financial crisis is a reason “to think about a new and more
intense European agreement,” he said. Tremonti said that after the region’s debt crisis is
brought under control, the EU should consider collectively
selling bonds to finance investment, particularly in energy.
Tremonti also said that the EU has been “missing in action” in
terms of dealing with the flood of immigrants fleeing violence
in North Africa and arriving in Italy , Ansa reported. To contact the reporter on this story:
Andrew Davis in Rome at
[email protected] . To contact the editor responsible for this story:
Craig Stirling at [email protected] . | |||||||
2011-04-19 00:00:00 UTC | Gold Futures Climb to Record $1,498.90 an Ounce in New York Comex Trading | http://www.bloomberg.com/news/2011-04-19/gold-futures-climb-to-record-1-498-90-an-ounce-in-new-york-comex-trading.html
| B y C l a u d i a C a r p e n t e r | Gold futures rose to a record
$1,498.90 an ounce by 7:49 a.m. on the Comex in New York . To contact the editor responsible for this story:
Claudia Carpenter at
[email protected] | |||||||
2011-04-19 00:00:00 UTC | Kansai Paint's Takeover of Freeworld Approved With Antitrust Conditions | http://www.bloomberg.com/news/2011-04-19/kansai-paint-s-takeover-of-freeworld-approved-with-antitrust-conditions.html
| B y V e r n o n W e s s e l s | South Africa ’s Competition
Commission said it proposed the takeover by Kansai Paint Co. of
Freeworld Coatings Ltd. (FWD) be approved on condition the companies
address competition concerns arisng from the transaction. To contact the editor responsible for this story:
Vernon Wessels at
[email protected] | |||||||
2011-04-19 00:00:00 UTC | Chilean Stocks: CCU, CMPC, Falabella, Sudamericana de Vapores | http://www.bloomberg.com/news/2011-04-19/chilean-stocks-ccu-cmpc-madeco-sudamericana-de-vapores.html
| B y E d u a r d o T h o m s o n | The following companies had unusual
price changes in Chilean trading. Stock symbols are in
parentheses and prices are as of 3:14 p.m. New York time. The Ipsa index rose 0.7 percent to 4,675.60. Cia. Cervecerias Unidas SA (CCU CC) advanced 1.8 percent to
5,672.3 pesos, its highest value in three months. Chile’s
largest brewer was initiated with a “hold” at Santiago-based
brokerage firm IM Trust SA, with a year-end price estimate of
6,224 pesos. Cia. Sudamericana de Vapores SA (VAPORES CC) rose 1.5
percent to 385.99 pesos, its highest price in two weeks. Latin
America’s largest container shipping company reported yesterday
a 13 percent increase in container volumes in March from
February. Empresas CMPC SA (CMPC) closed unchanged at 23,730
pesos. Chile’s second-largest pulp exporter will invest more
than $600 million in 2011 and 2012 to expand production
facilities in Chile and Mexico , according to the company’s
annual report. SACI Falabella (FALAB) rose 3.2 percent to 4,850.9
pesos, the most in five weeks. Chile’s largest retailer by
market value was reiterated “buy” yesterday at Banco Santander
SA. To contact the reporter on this story:
Eduardo Thomson in Santiago at
[email protected] To contact the editor responsible for this story:
David Papadopoulos at
[email protected] | |||||||
2011-04-19 00:00:00 UTC | JK Tyre Plans to Set Up 1,360-MW Power Plant in India, PTI Says | http://www.bloomberg.com/news/2011-04-19/jk-tyre-plans-to-set-up-1-360-mw-power-plant-in-india-pti-says.html
| B y A m e y a K a r v e | JK Tyre and Industries Ltd., an
Indian tiremaker, plans to set up a 1,360-megawatts power plant
near Jhansi in the central state of Madhya Pradesh , the Press
Trust of India reported, citing Vice-Chairman and Managing
Director Raghupati Singhania. The company will make an initial investment of 13 billion
rupees on the venture, the report said. To contact the reporter on this story:
Ameya Karve in Mumbai
[email protected] . To contact the editor responsible for this story:
Darren Boey at
[email protected] . | |||||||
2011-04-19 00:00:00 UTC | EU Parliament Panel Supports Trichet Over Sarkozy on Tougher Budget Rules | http://www.bloomberg.com/news/2011-04-19/eu-parliament-panel-supports-trichet-over-sarkozy-on-tougher-budget-rules.html
| B y J o n a t h a n S t e a r n s | A European Parliament panel blunted
a French-German push to dilute tougher budget rules, supporting
central bank chief Jean-Claude Trichet ’s call for a more
credible threat of penalties against big-spending governments. The Parliament’s economic committee voted for more
automatic sanctions against high-deficit nations such as Greece
to limit the risk of future debt crises. European Union
governments led by France and Germany agreed last month that
penalties against budget violators should be left in political
hands, a position that Trichet has criticized as president of
the European Central Bank . At stake is an overhaul to toughen and speed up punishment
of governments that head over the budget-deficit limit of 3
percent of gross domestic product and the debt ceiling of 60
percent of GDP. The European Commission, the EU regulator,
proposed that fines be applied after no more than three votes by
euro-area governments, which allowed for a fourth round of
scrutiny. The Parliament committee turned the extra political
buffer into a near-automatic step toward penalties. “We want more automaticity in the enforcement of the rules
to avoid political horse-trading among governments,” Corien
Wortmann-Kool , a Dutch member helping to steer the draft
legislation through the 736-seat EU Parliament, said in an
interview today in Brussels after the committee vote. The stand pits Trichet, commission President Jose Barroso
and the Parliament against French President Nicolas Sarkozy and
German Chancellor Angela Merkel as the EU seeks to strengthen
the threat of fiscal penalties that have never been imposed in
the euro’s 12-year history. Greece, which sparked the debt
crisis last year by requiring a 110 billion-euro ($158 billion)
rescue, has gone the whole period with a deficit over the limit. Market Tensions Trichet has urged euro-area governments to go further in
tightening fiscal legislation and warned them against relying on
the ECB to ease debt-market tensions through bond purchases on
the secondary market and emergency liquidity measures. Trichet,
who in early April oversaw the ECB’s first increase in interest
rates in almost three years, has called for a “quantum leap”
in the way euro-area governments coordinate and enforce budget
policies. The Parliament economic committee’s vote will be the basis
of negotiations with national governments over the new
legislation, which the commission proposed in September and
Sarkozy and Merkel first pledged to scale back in October.
Approval by the EU Parliament as well as by governments is
required. Six-Piece Package The EU aims to endorse a six-piece package of legislation
on economic management by mid-year. The central pillar of the
proposals is the system for fining the 17 nations that make up
the euro area as much as 0.2 percent of GDP for failing to heed
fiscal targets. Penalties starting with interest-bearing deposits could be
imposed before a country bursts over the limit, with the money
confiscated if the government balks at repeated EU demands to
fix the budget. It is in this area where governments added an
extra layer of political scrutiny over any members deviating
from their targets before the imposition of fines, which would
involve confiscating non-interest-bearing deposits. The Parliament’s economic committee kept the extra
evaluation step while turning it into a formality on the path to
penalties unless opponents can muster support from a weighted
majority of governments within 10 days to block the process. A second part of the package would tackle debt more
aggressively, applying the tougher surveillance system to
nations that veer from the 60-percent-of-GDP limit. The Parliament’s economic committee endorsed a proposal by
the commission that countries over the debt limit would have to
hit an annual reduction target equal to 1/20th of the excess. To contact the reporter on this story:
Jonathan Stearns in Brussels at
[email protected] To contact the editor responsible for this story:
James Hertling at
[email protected] | |||||||
2011-04-19 00:00:00 UTC | Mugabe to ‘Plunder’ Zimbabwe Economy With Ownership Law, Tsvangirai Says | http://www.bloomberg.com/news/2011-04-19/mugabe-to-plunder-zimbabwe-economy-with-ownership-law-tsvangirai-says.html
| B y B r i a n L a t h a m | President Robert Mugabe ’s party
will “plunder” Zimbabwe’s economy through a law requiring
foreign businesses to cede control to black Zimbabweans, Prime
Minister Morgan Tsvangirai said. “Now, 30 years after independence, we are being told by
multimillionaires and multiple-farm owners that indigenization
will set us free,” Tsvangirai, who leads the Movement for
Democratic Change , said yesterday in an e-mailed statement.
“They are not referring to the broad-based empowerment of the
ordinary man and woman, but the looting and plunder of national
resources by a small, parasitic elite.” Between 2000 and 2008, loyalists from Mugabe’s Zimbabwe
African National Union-Patriotic Front seized almost all of the
country’s white-owned commercial farms in an often violent
campaign that displaced about 300,000 farm workers and as many
as 2 million of their dependents, according to groups that
campaign for farmers’ rights, such as the Harare-based
Commercial Farmers’ Union and Justice for Agriculture. Rugare Gumbo, ZANU-PF spokesman, denied Tsvangirai’s
allegation today in a telephone interview from Harare, saying,
“There is nothing like that. Farms in Zimbabwe have been
allocated lawfully and the empowerment process will continue
lawfully.” Under the Indigenization and Empowerment Act, which became
law on March 1, 2010, foreign-owned businesses have five years
to sell 51 percent of their shares to black Zimbabweans. The
measure has yet to be enforced. The legality of the law is disputed by the MDC, which
shares power with ZANU-PF, the party that drafted the law. The
measure was pushed through parliament before elections in March
2008 in which the MDC won a majority. To contact the reporter on this story:
Brian Latham in Durban at
[email protected] . To contact the editor responsible for this story:
Antony Sguazzin at
[email protected] . | |||||||
2011-04-19 00:00:00 UTC | Portugal’s Sines to Receive LNG Cargo From Nigeria on April 22 | http://www.bloomberg.com/news/2011-04-19/portugal-s-sines-to-receive-lng-cargo-from-nigeria-on-april-22.html
| B y J o a o L i m a | Portugal ’s port of Sines is
scheduled to receive a shipment of liquefied natural gas from
Nigeria on April 22. The LNG Sokoto is sailing from Bonny in Nigeria, according
to the website of Administracao do Porto de Sines SA , the port’s
management company. The Sines LNG terminal, with a capacity of 5.26 billion
cubic meters of natural gas a year, is managed by REN-Redes
Energeticas Nacionais SA, the nation’s power and gas grid
operator. LNG is gas that’s cooled to a liquid for shipment by
tanker and then converted back to a gas at terminals for
distribution to users. Galp Energia SGPS SA (GALP) , Portugal’s biggest oil and gas
company, receives LNG at Sines as well as gas from Algeria
through a pipeline crossing Morocco and Spain . Galp also
operates Portugal’s largest refinery at Sines. EDP-Energias de
Portugal SA, the country’s biggest power utility, runs a coal-
fired electricity plant at the site. To contact the reporter on this story:
Joao Lima in Lisbon at
[email protected] To contact the editor responsible for this story:
Will Kennedy at
[email protected] | |||||||
2011-04-19 00:00:00 UTC | South Africa to Auction Mining Rights Reverted to State, Business Day Says | http://www.bloomberg.com/news/2011-04-19/south-africa-to-auction-reverted-mine-rights-business-day-says.html
| B y A n a M o n t e i r o | South Africa ’s Department of
Mineral Resources will set up a bidding system allowing
investors to compete for mineral rights that have reverted to
the state before June, Business Day reported, citing Director-
General Sandile Nogxina. The department will ensure that no outstanding litigation
affects the properties and that previous owners don’t have legal
claims to them before putting them on auction, the Johannesburg-
based newspaper said. To contact the editor responsible for this story:
Ana Monteiro at
[email protected] | |||||||
2011-04-19 00:00:00 UTC | Wimbledon Will Pay the Men’s, Women’s Champions 1.1 Million Pounds Each | http://www.bloomberg.com/news/2011-04-19/wimbledon-will-pay-the-men-s-women-s-champions-1-1-million-pounds-each.html
| B y D a n i e l l e R o s s i n g h | Wimbledon’s singles champions will
each receive 1.1 million pounds ($1.79 million), the most in the
history of the tennis tournament, the All England Club said. The 100,000-pound increase for the winners comes as the
event, being held for the 125th time, competes with other
tournaments to compensate top players, Chairman Philip Brook
said. “It is important that we offer prize money which suitably
rewards the players both for the box-office appeal they bring to
the event and for their supreme performances on the court,” he
said. Total prize money will rise 6.4 percent to 14.6 million
pounds, the southwest London club said. The tournament, where Serena Williams and Rafael Nadal are
defending champions, will be held June 20 through July 3. To contact the reporter on this story:
Danielle Rossingh at the All England Club through the
London sports desk at
[email protected] To contact the editor responsible for this story:
Christopher Elser at
[email protected] . | |||||||
2011-04-19 00:00:00 UTC | Novolipetsk First-Quarter Sales Rose 41%, Sees Future Gains | http://www.bloomberg.com/news/2011-04-19/novolipetsk-first-quarter-sales-rose-41-sees-future-gains-1-.html
| B y I l y a K h r e n n i k o v | OAO Novolipetsk Steel, owned by
Russian billionaire Vladimir Lisin , reported a 41 percent gain
in first-quarter sales to $2.4 billion, and forecast further
increases in revenue and output in the following three months. The margin on earnings before interest, tax, depreciation
and amortization was 20 percent to 25 percent in the first
quarter, it said in a statement, from 23 percent a year ago. Crude steel production rose 1.8 percent in the quarter from
a year before and fell 2.8 percent from the prior three months. “We expect sequential growth in second-quarter sales
volumes as market conditions improve,” the company said today. To contact the reporters on this story:
Ilya Khrennikov in Moscow at
[email protected] . To contact the editor responsible for this story:
Amanda Jordan at
[email protected] . | |||||||
2011-04-19 00:00:00 UTC | Texas Teacher Pension Needs 21% Return to Keep 80% Funded Ratio | http://www.bloomberg.com/news/2011-04-19/texas-teacher-pension-needs-21-return-to-keep-80-funded-ratio.html
| B y D a v i d M i l d e n b e r g | The Teacher Retirement System of
Texas needs an annual return of 21 percent in the year ending
Aug. 31 to maintain an 80 percent funded ratio, the level
actuaries consider adequate to cover liabilities, said its
deputy director. “We’d have to have remarkable investment returns for the
rest of the year to reach 80 percent,” Brian Guthrie, the
fund’s executive director-designate, said at a Texas House
hearing today in Austin. The fund’s investment return was 14.7 percent in 2010, the
best among large public pension funds, Chief Investment Officer
Britt Harris said at an April 7 board meeting. The fund had
about $109 billion on April 1, up from $95.7 billion in
September. Even with the gains, the pension’s funded ratio the
portion of promised benefits covered by current assets dropped to 81.3 percent as of Feb. 28 from 82.9 percent on Aug.
31, 2010, because of trading losses in 2008 and 2009 included
through a process called smoothing, Executive Director Ronnie Jung said April 7. Public pensions nationwide are grappling with about $3.6
trillion in unfunded liabilities, according to a 2010 study by
Joshua Rauh of Northwestern University and Robert Novy-Marx of
the University of Rochester. Texas Teachers’ annualized return for the decade ended Dec.
31 was 4.8 percent, below the fund’s assumption of an 8 percent
annual return. Texas legislators are considering reducing the state’s
contribution to the fund, which is now 6.64 percent of
employees’ salaries. The Texas House earlier this month passed a
budget that would cut general revenue spending by $4.6 billion,
or 5.2 percent, during the 2012-2013 biennium. To contact the reporter on this story:
David Mildenberg in Austin, Texas, at
[email protected] To contact the editor responsible for this story:
Mark Tannenbaum at
[email protected] | |||||||
2011-04-19 00:00:00 UTC | Copper Prices Rise as Freeport Halts Operations at Grasberg Mine | http://www.bloomberg.com/news/2011-04-19/copper-rises-as-halt-at-freeport-mine-compounds-supply-concern.html
| B y Y i T i a n a n d A g n i e s z k a T r o s z k i e w i c z | Copper rose, halting the longest
slump since June, after Freeport-McMoRan Copper & Gold Inc. said
it suspended operations at a mine in Indonesia . Subsurface activity was stopped at the Grasberg mine after
an “industrial accident” killed one worker and left another
missing, said Freeport, the world’s biggest publicly traded
producer. U.S. builders broke ground on 549,000 homes at an
annual pace in March, more than analysts forecast. Copper has
gained 21 percent in the past year. “The market is in a long-term uptrend” because global
mine output is failing to keep pace with demand, said Lannie
Cohen, the president of Capitol Commodity Services Inc. in
Indianapolis. Copper futures for July delivery rose 3.1 cents, or 0.7
percent, to close at $4.2485 a pound at 1:23 p.m. on the Comex
in New York . Before today, prices fell for six sessions, dropping 6.3
percent, partly on concern that demand will slow as China , the
world’s biggest consumer, tightens credit to fight inflation. The metal gained today after a report signaled that
manufacturing remains robust in China. “Any sort of worries over what impact the Japanese
earthquake might have had on activity in China have been put
aside now,” said Christin Tuxen, an analyst at Danske Bank A/S
in Copenhagen. On the London Metal Exchange, copper for three-month
delivery climbed $115, or 1.2 percent, to $9,340 a metric ton
($4.24 a pound.) Lead, zinc, aluminum and tin also rose in London. Nickel
fell. To contact the reporters on this story:
Yi Tian in New York at
[email protected] ;
Agnieszka Troszkiewicz in London at
[email protected] To contact the editor responsible for this story:
Steve Stroth at
[email protected] | |||||||
2011-04-19 00:00:00 UTC | Enel Green Power Planning to Spend $9.1 Billion on Renewables Through 2015 | http://www.bloomberg.com/news/2011-04-19/enel-green-power-planning-to-spend-9-1-billion-on-renewables-through-2015.html
| B y A n t h o n y D i P a o l a | Enel Green Power SpA (EGPW) , a unit of
Italy’s biggest utility, will spend 6.4 billion euros ($9.1
billion) through 2015 on power plants using wind, sun and other
renewable sources, the chief executive officer said. Part of the funding will go to building a factory to make
solar-energy panels in Catania on the Italian island of Sicily,
Enel Green Power CEO Francesco Starace said at a conference in
Dubai today. Italy’s state-controlled utility Enel SpA (ENEL) sold shares and
listed Enel Green Power on the Milan Stock Exchange in November.
The company, which operates wind, solar, thermal and hydro-
electric plants, is expanding in Europe and the Americas. Enel Green Power has earmarked about 1 billion euros for
spending on solar plants and the panel factory, Starace said.
The first phase of the Catania project will cost 300 million
euros, and the possible expansion of the facility may bring the
total expense to 800 million euros, he said. The company aims to expand production in Italy , Spain,
France, Greece, Turkey, Romania, Starace said. Enel Green Power
may expand to North Africa and the Middle East after 2015, he
said. To contact the reporters on this story:
Anthony DiPaola in Dubai at
[email protected] . To contact the editors responsible for this story:
Stephen Voss on [email protected] . | |||||||
2011-04-19 00:00:00 UTC | RHB’s Choy Says China, Singapore to Gain From U.S. Credit Woes | http://www.bloomberg.com/news/2011-04-19/rhb-s-choy-says-china-singapore-to-gain-from-u-s-credit-woes.html
| B y D a v i d Y o n g | Ray Choy, head of debt-market
research at RHB Research Institute in Kuala Lumpur , comments on
the U.S. credit-rating outlook and the market implications for
Asian sovereign debt. Standard & Poor’s cut the outlook on the U.S. top AAA
rating yesterday, citing a one-in-three chance of a downgrade
within two years on debt concern. Choy made the comments in a
phone interview. “The search for the next best reserve-currency proxy could
lead to flows initially to the G-3 sovereign markets in Germany
and Japan . However, this is likely to be short-lived given low
yields and continued questions over the long-term sustainability
of high G-3 sovereign ratings. “Selective emerging markets with sound macroeconomic
policies and higher yields in Asia outside Japan stand to
benefit from the increased downgrade risk to G-3 economies. We
should continue to see a trend of narrowing differentials
relative to the high-grade G-3 economies. “Although China is also attached with a negative outlook,
it has a relatively more attractive risk-reward profile. The U.S.
already has the top rating with no upside potential, and the
risk-reward is skewed to the downside. “We foresee greater downward pressure on the U.S. dollar
this year and next year, and added upside risks on U.S. Treasury
yields. Hence, capital flows would benefit well-managed
economies in emerging markets and in Asia outside Japan. These
would include China, Singapore and Malaysia.” To contact the reporter on this story:
David Yong in Singapore at
[email protected] . To contact the editor responsible for this story:
Sandy Hendry at
[email protected] . | |||||||
2011-04-19 00:00:00 UTC | East African Community Names Rwandan as Secretary-General | http://www.bloomberg.com/news/2011-04-19/east-african-community-names-rwandan-as-secretary-general-1-.html
| B y D a v i d M a l i n g h a D o y a | The East African Community
appointed Rwandan Health Minister Richard Sezibera as its new
secretary-general, replacing Tanzania ’s Juma Mwapachu, whose
five-year term ends this month. Sezibera’s deputy will be Enos Bukuku, deputy governor of
the Bank of Tanzania, according to a statement read today at an
EAC summit in Dar es Salaam, Tanzania’s commercial capital. Sezibera is currently a member of the board of the Global
Alliance for Vaccines and Immunization, which is co-funded by
the Bill & Melinda Gates Foundation. The EAC post of secretary-general is a rotational position
among Uganda, Kenya , Tanzania, Rwanda and Burundi, the bloc’s
partner states. Rwanda and Burundi, which joined the community
in June 2007, hadn’t previously headed the organization. To contact the reporter on this story:
David Malingha Doya in Dar es Salaam via Nairobi at
[email protected] . To contact the editor responsible for this story:
Paul Richardson at
[email protected] . | |||||||
2011-04-19 00:00:00 UTC | Zhejiang Glass Denies Hexun Report It May Declare Bankruptcy | http://www.bloomberg.com/news/2011-04-19/zhejiang-glass-denies-hexun-report-it-may-declare-bankruptcy.html
| B y B l o o m b e r g N e w s | Zhejiang Glass Co., which has been
suspended from trading in Hong Kong for almost a year, denied a
report by news website Hexun.com that it may declare bankruptcy. Bankruptcy is “impossible,” Tao Haipin, a Zhejiang Glass
investor relations official, said by telephone today. “We are
looking for partners for restructuring.” The company’s stock
was suspended May 2010 pending the release of its 2009 earnings. Hexun reported yesterday that Zhejiang Glass may declare
bankruptcy or be acquired by a state-owned company, citing banks
and the local government of the region where the company is
based. The glassmaker owes banks 7 billion yuan ($ billion),
Hexun reported, citing an unidentified person familiar with the
company’s accounts. “Basically, the company is now under the control of the
local government and the future is all based on the government’s
decision,” Zhejiang Glass’s Tao said today by telephone. Zhejiang Glass was the first company from China founded by
private individuals to list shares in Hong Kong, Hexun reported. To contact the editor responsible for this story:
John Liu at [email protected] | |||||||
2011-04-19 00:00:00 UTC | Russia’s Investment Fund Seeks Returns of 15-20%, Dmitriev Says | http://www.bloomberg.com/news/2011-04-19/russia-s-investment-fund-seeks-returns-of-15-20-dmitriev-says.html
| B y H a l i a P a v l i v a | Vladimir Dmitriev, chairman of
Russia’s state development bank VEB, comments on the country’s
planned sovereign investment vehicle, the Direct Investments
Fund. Dmitriev spoke to reporters in Washington , where he
participated in International Monetary Fund meetings on April 16
and April 17. Russia plans to complete registration of the fund
as soon as May, he said. On returns: “Co-investors will invest 5 rubles per ruble of
investments from the fund. The sectors that matter for investors
are those that are understandable, where they are able to secure
good returns on their investment. We expect that won’t be below
15 percent. Overall, we’re talking about 20 percent. That’s what
is attractive to the investors with whom we are in talks.” On the size of the fund: “This year, we’re talking about $2 billion. We plan that
the Russian share of the fund will be formed at $10 billion over
five years. “We have to show a pipeline of projects and only then ask
for money. It makes no sense to ask for $2 billion if we only
have projects for $1 billion. We presume that this $1 billion
will generate $5 billion in private investments.” On sectors of the economy that the fund will invest into: “Agriculture, food-processing industry, pharmaceutical
industry, anything that has a good potential for growth in
Russia . To contact the reporter on this story:
Halia Pavliva in New York at
[email protected] To contact the editors responsible for this story:
Gavin Serkin at
[email protected] ;
David Papadopoulos at
[email protected] | |||||||
2011-04-19 00:00:00 UTC | Three-Month Euribor Rises to Highest Level in Almost Two Years | http://www.bloomberg.com/news/2011-04-19/three-month-euribor-rises-to-highest-level-in-almost-two-years.html
| B y K e i t h J e n k i n s | The rate at which European banks
say they see each other lending in euros for three months
increased to the highest level in almost two years, according to
the European Banking Federation. The euro interbank offered rate, or Euribor, climbed 0.5
basis point to 1.343 percent today, EBF data showed. That’s the
highest level since May 5, 2009. To contact the reporter on this story:
Keith Jenkins in London at
[email protected] To contact the editor responsible for this story:
Daniel Tilles at
[email protected] | |||||||
2011-04-19 00:00:00 UTC | Canadian Natural Gas Up on Higher U.S. Heating, Cooling Demand | http://www.bloomberg.com/news/2011-04-19/canadian-natural-gas-up-on-higher-u-s-heating-cooling-demand.html
| B y G e n e L a v e r t y | Canadian natural gas rose as late-
season cold in the U.S. Midwest boosts furnace use and warm
weather in the South spurs air-conditioning needs. Demand for heat in the Chicago area will top normal by 52
percent tomorrow as cold weather lingers over the Midwest,
according to Weather Derivatives. Cooling needs elsewhere will
drive air conditioning use to 66 percent above seasonal norms
for the next week, the Belton, Missouri-based forecaster said. “There’s a very big split between the North and the South
right now,” said Bob Haas, a meteorologist at MDA EarthSat
Weather in Gaithersburg, Maryland . “You don’t get that too
often.” Alberta gas for May delivery rose 8.25 cents, or 2.4
percent, to C$3.46 per gigajoule ($3.42 per million British
thermal units) as of 3 p.m. New York time, according to NGX, a
Canadian Internet market. Gas traded on the exchange goes to
users in Canada and the U.S. and is priced on TransCanada’s
Alberta system. Natural gas for May delivery on the New York Mercantile
Exchange gained 12.4 cents, or 3 percent, to settle at $4.262
per million Btu. Spot gas at a Chicago hub where Canadian gas is traded
dropped after touching a three-week high yesterday on forecasts
of colder weather. Gas at the Alliance Pipeline delivery point
fell 3.49 cents to $4.4294 per million Btu on the
Intercontinental Exchange . Alliance is an express line that can
carry about 1.5 billion cubic feet a day to the Midwest from
western Canada . Hub Prices At the Kingsgate point on the border of Idaho and British
Columbia, gas gained 0.19 cent to $4.1013, according to ICE. At
Malin, Oregon, where Canadian gas is traded for California
markets, gas was down 0.66 cent to $4.1761. Volume on TransCanada Corp.’s Alberta system, which
collects the output of most of the nation’s gas wells, was 16.2
billion cubic feet as of 1:30 p.m. in New York, about 88 million
below its target level. Gas was flowing at a daily rate of 2.66 billion cubic feet
at Empress, Alberta, where the fuel is transferred to
TransCanada’s main line. At McNeil, Saskatchewan, where gas is transferred to the
Northern Border Pipeline for shipment to the Chicago area, the
daily flow rate was 1.74 billion cubic feet. Available capacity on TransCanada’s British Columbia system
at Kingsgate was 668 million cubic feet. The system was forecast
to carry 1.84 billion cubic feet today, about 74 percent of its
capacity of 2.51 billion. The volume on Spectra Energy’s British Columbia system,
which gathers the fuel in northeastern British Columbia for
delivery to Vancouver and the Pacific Northwest, totaled 2.82
billion cubic feet at 1:50 p.m. To contact the reporter on this story:
Gene Laverty in Calgary at
[email protected] . To contact the editor responsible for this story:
Dan Stets at [email protected] . | |||||||
2011-04-19 00:00:00 UTC | Biden Emerges to Lead Deficit Talks With Obama’s ‘Full Accord’ | http://www.bloomberg.com/news/2011-04-19/biden-emerges-to-lead-deficit-talks-in-congress-with-obama-s-full-accord-.html
| B y K a t e A n d e r s e n B r o w e r | Vice President Joe Biden might have
struggled to stay awake last week when President Barack Obama
spoke about his debt-reduction plan. Still, When Obama needed
someone to forge a deal with Congress, he summoned his second-
in-command. For Biden who appeared to nod off for about 30 seconds
during Obama’s speech on fiscal policy the assignment to lead
the debt talks with lawmakers was further evidence of how the
president depends on him, especially when it comes to dealing
with an increasingly hostile Congress. Biden, who directed the White House campaign to reach an
accord on this year’s budget and avoid a government shutdown,
will now head negotiations between Republican and Democratic
lawmakers to come up with a plan by the end of June for
comprehensive debt reduction. He has also been tapped to find
votes in Congress to raise the U.S. debt limit, according to an
administration official who asked for anonymity. “He can do things; he has the president’s full accord,”
Alan Simpson , co-chairman of the president’s debt commission,
told reporters after an April 14 White House meeting with Obama,
Biden and Erskine Bowles, the debt panel’s other leader. Simpson, a former Republican senator from Wyoming , said one
of the best decisions Obama made was asking Biden to be the
“point person” on the deficit discussions. Biden may be better known for his gaffes than his policy
advice. In March 2010, he audibly whispered an expletive in
Obama’s ear at the signing of the health-care law. During the
2008 election campaign, he introduced Obama to a crowd as
“Barack America” and at a rally urged a wheelchair-bound
Missouri legislator to “stand up” and take a bow. No ‘Gaffe Machine’ His supporters insist that those who work with Biden, 68,
take him seriously. “Thinking people, the people you have to deal with in
order to make the kind of things he’s made happen, they don’t
think that Joe Biden’s a gaffe machine,” said longtime friend
Ted Kaufman, who was appointed to Biden’s Senate seat from
Delaware after the 2008 election. “ Mitch McConnell doesn’t
underestimate him.” That’s what Obama is counting on in naming Biden to oversee
the discussions on deficit reduction. House and Senate leaders from both parties will pick
members from their caucuses to take part in the talks, and Biden
will host the first meeting with lawmakers on May 5 at Blair
House, the White House said yesterday. $4 Trillion Cut In his April 13 speech Obama outlined his plan to reduce
the deficit by $4 trillion over 12 years. He set a target of
reducing the annual U.S. deficit to 2.5 percent of gross
domestic product by 2015, compared with the 10.9 percent of GDP
projected for this year. During the speech, Obama, 49, teased Biden, who is 19 years
his senior, saying “you don’t qualify” as one of the young
people the president was addressing who may wonder why deficits
matter. Biden, a 36-year veteran of the Senate who was either
chairman or the top Democrat on the Foreign Relations Committee
for 12 years, does qualify as a key presidential adviser, his
backers say. He successfully argued behind the scenes for a multilateral
effort before the March 19 U.S. and allied intervention in
Libya, according to another person familiar with the talks. And
he led the campaign to win Senate support to approve
ratification of a new arms-reduction treaty with Russia . Looking for Momentum Since taking office in 2009, he has traveled to Baghdad six
times to help wind down the war in Iraq . And he oversaw
distribution of the $814 billion economic-stimulus package, an
initiative that has drawn criticism from Republicans even as an
independent board said that more than 75 percent of the funds
have been allocated. On the deficit, Obama is seeking to regain momentum after
the release of a spending plan by House Budget Committee
Chairman Paul Ryan, a Wisconsin Republican, and an agreement
with congressional Republicans on cuts for the current fiscal
year that cleared the way for approval of a 2011 budget. At the beginning of March, Obama asked Biden to coordinate
the administration’s efforts to break a stalemate on the 2011
budget. Soon after, the vice president held a meeting with
Senate Majority Leader Harry Reid , a Nevada Democrat; House
Speaker John Boehner , an Ohio Republican; Senate Minority Leader
McConnell, a Kentucky Republican; and House Minority Leader
Nancy Pelosi , a California Democrat, in his Capitol Hill office,
according to chief of staff Bruce Reed. Biden asked all staff members to leave, then pushed a plan
for the Senate to vote on a pair of competing proposals one a
House Republican-backed measure to reduce the budget by $61
billion and the other a Democratic alternative that would cut
about $10 billion. ‘Just Show’ The idea was to show those Republicans clamoring the
loudest for deeper cuts that a compromise would be necessary. On
March 9, the Senate rejected both options. Senator Susan Collins , a Maine Republican, called Biden “a
constructive force in negotiations because he so understands
Capitol Hill.” Some analysts dismiss his contribution to the budget talks.
Daniel Mitchell, a senior fellow at the Cato Institute, a
libertarian-leaning research group, said Biden’s outreach to his
former colleagues “is mostly just show.” “He doesn’t have a budget and tax background and
expertise,” Mitchell said. Douglas Holtz-Eakin, who was chief economic adviser to the
2008 Republican presidential candidate, Senator John McCain of
Arizona , said Biden’s job of pushing Obama’s debt plan through
Congress won’t be easy. ‘Pretty Thin’ “The president’s given a speech that’s pretty thin, and
he’s left it to the vice president to bring to Congress,” said
Holtz-Eakin, a former director of the Congressional Budget
Office . Biden’s big strength may be in overseas affairs, having
headed the Senate Foreign Relations Committee before becoming
vice president. His behind-the-scenes role on Libya was as “a voice of
extreme caution” sketching out “downside scenarios” against
intervention during meetings with the president, said Steve Clemons, founder of the American Strategy Program at the
Washington-based New America Foundation, a centrist public
policy center, whom the administration has consulted on Libya. Biden’s argument ultimately prevailed. In his March 28
address to the nation on Libya, Obama stressed that the U.S.
wasn’t going in alone to quell unrest. And shortly after the
intervention began, the North Atlantic Treaty Organization took
full control of all air operations over Libya. ‘Hard Feelings’ Still, some lawmakers say they wish that Biden had made
more visits to Capitol Hill to talk about Libya. “There are hard feelings that are deeper than the lack of
public criticism would indicate about not being consulted,”
said Senator Jeff Sessions , an Alabama Republican. “That’s in
both parties.” The White House “missed a great opportunity to not have
the vice president be on top of the Libya situation from the
beginning,” Sessions said in an interview. “All the senior
members that are relevant he served with for a long time.” Republican Senator Orrin Hatch of Utah , who has known Biden
for 34 years, said the vice president has the president’s ear,
along with those of lawmakers. “I have no doubt that they would not move ahead or
backwards or any other direction without having Joe Biden in the
room,” Hatch said. To contact the reporter on this story:
Kate Andersen Brower in Washington at
[email protected] To contact the editor responsible for this story:
Mark Silva at
[email protected] | |||||||
2011-04-19 00:00:00 UTC | Angel’s Kapur Says Normal Monsoon Will Ease Raw Material Prices | http://www.bloomberg.com/news/2011-04-19/angel-s-kapur-says-normal-monsoon-will-ease-raw-material-prices.html
| B y A m e y a K a r v e | Chitrangda Kapur, an analyst at
Angel Broking Ltd., comments on consumer goods companies and
stock market after the India Meteorological Department forecast
a normal monsoon rainfall for a second year for the country, the
world’s second-biggest producer of sugar, rice and cotton. Rainfall will be 98 percent of the 50-year average in the
June-September season, the weather bureau said in a statement
today in New Delhi . The bureau defines normal precipitation as
96 percent to 104 percent of the long-term average. Kapur spoke in a phone interview from her office in Mumbai. On raw material prices: “Normal monsoons will increase the farm output, including
certain key raw material prices, which will help tame the food
inflation and help ease out the inflationary pressures that most
of the consumer goods companies are facing. ‘‘It will also increase the income for rural India , which
comprises almost two-third of the country’s population. That
will trigger demand not only for consumer goods, but also other
sectors like automobile and farm equipment. ‘‘Overall it is very good news, which should reflect in the
market and it will drive positive sentiment.’’ In the consumer goods sector, stocks like Dabur India Ltd.,
Britannia Industries Ltd. and Nestle India Ltd. may react
positively immediately to this news as these companies have a
huge rural population to cater and they also use a lot of
agriculture commodities as raw materials, she said. To contact the reporter on this story:
Ameya Karve in Mumbai +91-22-6120-3668 or
[email protected] . To contact the editor responsible for this story:
Darren Boey at +852-2977-6646 or
[email protected] . | |||||||
2011-04-19 00:00:00 UTC | Community Health Seeks Dismissal of ‘Baseless’ Tenet Healthcare Suit | http://www.bloomberg.com/news/2011-04-19/community-health-seeks-dismissal-of-baseless-tenet-healthcare-suit.html
| B y D o n J e f f r e y | Community Health Systems Inc. (CYH) ,
accused in a lawsuit by Tenet Healthcare Corp. of overcharging
Medicare, moved to dismiss what it called a “baseless” legal
action. Community Health , which has an unsolicited buyout offer for
Tenet, said in court papers that the claims must be dismissed in
part because Community Health modified its acquisition proposal
to an all-cash offer. Community Health filed its motion today in
federal court in Dallas. Tenet, a Dallas-based operator of hospitals, sued Community
Health on April 11, charging that it would have difficulty
raising money for a buyout because its methods for admitting
patients to hospitals under Medicare could subject it to
“liability and damages of well over $1 billion.” “In a misguided effort to score points in this contest for
corporate control, Tenet has filed this lawsuit attacking the
ethics and professional judgment of 15,000 attending physicians,
who make the decision whether to admit patients at CHS-
affiliated hospitals,” Community Health said in the filing. Community Health offered $6 a share, or $7.3 billion, to
acquire all the stock of Tenet. Tenet rejected the offer in
December, saying it wasn’t “remotely fair.” “This changes nothing,” Rick Black, a spokesman for
Tenet, said in a telephone interview. “We intend to vigorously
prosecute our claims.” Tenet owns 49 hospitals. Community Health owns, operates or
leases 130 hospitals. Tenet rose 15 cents, or 2.3 percent, to $6.64 in New York
Stock Exchange composite trading at 4:15 p.m. Community Health,
based in Franklin, Tennessee, climbed 70 cents, or 2.3 percent,
to $31.20. The case is Tenet Healthcare Corp. (THC) v. Community Health
Systems Inc., 11-00732, U.S. District Court, Northern District
of Texas (Dallas). To contact the reporter on this story:
Don Jeffrey in New York at
[email protected] . To contact the editor responsible for this story:
Michael Hytha in San Francisco at
[email protected] . | |||||||
2011-04-19 00:00:00 UTC | Russian Milling Wheat Led Declines Last Week, Union Says | http://www.bloomberg.com/news/2011-04-19/russian-milling-wheat-led-declines-last-week-union-says-table-.html
| B y M a r i n a S y s o y e v a | Russian fourth-grade milling wheat
fell 5.3 percent to 5,683 rubles ($201) a metric ton in Central
Russia last week, leading declines in grain prices, the
country’s Grain Union said today in an e-mailed statement. The following table gives average prices in rubles a ton
and percentage changes in parentheses for the week ended April
15. To contact the reporter on this story:
Marina Sysoyeva in Moscow at
[email protected] To contact the editor responsible for this story:
Claudia Carpenter at
[email protected] | |||||||
2011-04-19 00:00:00 UTC | Georgia Joins Dissenters Opposing Writedown Plan in State Foreclosure Deal | http://www.bloomberg.com/news/2011-04-19/georgia-joins-dissenters-opposing-writedown-plan-in-state-foreclosure-deal.html
| B y D a v i d M c L a u g h l i n a n d P r a s h a n t G o p a l | Georgia Attorney General Sam Olens
said he has “significant concerns” about a proposal to reduce
loan balances for some homeowners as part of a settlement of a
nationwide foreclosure probe, joining at least seven other
states that have criticized such a plan. A deal with the top mortgage servicers in the U.S. that
includes writedowns could encourage homeowners who are current
on their loans to stop making payments, Olens, a Republican,
said today in a telephone interview. “You’re declaring in advance who the winners and losers
are,” Olens said. “I’m a little concerned that this process
disengages the normal market forces.” Republican attorneys general in Virginia , Texas , Florida ,
South Carolina , Oklahoma, Nebraska, and Alabama have signed
letters opposing the imposition of writedowns, which proponents
call the most effective way to modify a home loan. State and federal agencies, including the U.S. Justice
Department, last month submitted proposed settlement terms to
five banks as a starting point for negotiations to set standards
for mortgage service and foreclosure. The 50-state effort began
last year after homeowners complained of faulty foreclosure
practices in the housing collapse. The state-federal proposal calls in part for monetary
payments by banks to go toward a loan-modification program that
includes principal reductions. Proposal Supporters Supporters of the proposal include attorneys general of
Iowa, Connecticut and Illinois , according to representatives in
their offices. “Our position has been that principal reductions are one
tool in the toolbox, and should only be used in appropriate
circumstances,” Iowa Attorney General Tom Miller, who is
leading the investigation for states, said in an e-mailed
statement. “We have never advocated broad-based principal
reductions that would pick winners and losers or trigger
strategic defaults.” A separate agreement with 14 mortgage servicers announced
April 13 by federal regulators was a “big step forward,”
though it was “vague” on details that he hopes the attorneys
general will clarify, Olens said. Standard & Poor’s , the New York-based ratings company, said
in a Feb. 7 report that trimming mortgage balances is the “most
effective” and “least frequent” modification. Fewer than 3
percent of workouts include writedowns. Borrowers who have loan balances in line with their home
values have an incentive to keep paying and a cushion if they
lose a job or face other financial setbacks, Cristian deRitis, a
director at Moody’s Analytics Inc., said in an interview earlier
this month. Olens today echoed concerns of the other dissenting
attorneys general that writedowns could cause additional
defaults as homeowners stop making payments so they can qualify
for reductions. “Market forces generally work better than government
dictates,” he said. To contact the reporter on this story:
David McLaughlin in New York at
[email protected] ;
Prashant Gopal in New York at
[email protected] . To contact the editor responsible for this story:
Michael Hytha at [email protected] | |||||||
2011-04-19 00:00:00 UTC | Crude Oil Futures Advance in New York, Reversing Earlier Decline of 1.5% | http://www.bloomberg.com/news/2011-04-19/crude-oil-futures-advance-in-new-york-reversing-earlier-decline-of-1-5-.html
| B y R i c h a r d S t u b b e | Crude oil advanced in New York ,
reversing an earlier decline of 1.5 percent. Crude for May
delivery gained 43 cents, or 0.4 percent, to $107.55 a barrel at
11:34 a.m. on the New York Mercantile Exchange . To contact the editor responsible for this story:
Richard Stubbe at
[email protected] | |||||||
2011-04-19 00:00:00 UTC | Cape Wind Power Project Off Massachusetts Wins U.S. Construction Approval | http://www.bloomberg.com/news/2011-04-19/cape-wind-power-project-wins-u-s-backing-for-construction-1-.html
| B y J i m S n y d e r | The Cape Wind Energy Project won
U.S. Interior Department approval of its construction plan in
Massachusetts for the nation’s first offshore wind farm. Cape Wind Associates said building the wind turbines in the
water, a project in development for about a decade, may begin as
early as the U.S. fall. Federal officials said approving the
plan is a milestone in developing clean-energy sources that will
help lower carbon emissions and create jobs. “After a thorough review of environmental impacts, we are
confident that this offshore commercial wind project the
first in the nation can move forward,” Interior Secretary
Ken Salazar said in a statement. Cape Wind plans to install 130 wind turbines in Nantucket
Sound off the Massachusetts coast. The project has been opposed
by homeowners whose ocean view would be affected by the windmill
towers and by local lawmakers as a threat to a sensitive
ecosystem. The Interior Department is seeking to speed the process of
building wind energy projects off the Atlantic Coast, Salazar
said today. In February, Salazar and Energy Secretary Steven Chu
said development off New Jersey, Delaware, Maryland and Virginia
may advance when no environmental impediments are identified. “Taking 10 years to permit an offshore wind project like
Cape Wind is completely unacceptable,” Salazar said today at a
news conference in Boston’s Charlestown Navy Yard national park
where he was joined by Cape Wind Vice President Dennis Duffy. The department today took a step that may lead to a wind
farm near New Jersey , seeking information to gauge interest and
shortening the time for development, Salazar said. Duffy said Cape Wind has yet to sell half the power the
wind farm is forecast to produce. “We are confident the bulk of the power will be sold and
discussions are underway,” Duffy said Interior’s Bureau of Ocean Energy Management, Regulation
and Enforcement approved the construction and operations plan. To contact the reporter on this story:
Jim Snyder in Washington at
[email protected] To contact the editor responsible for this story:
Larry Liebert at
[email protected] | |||||||
2011-04-19 00:00:00 UTC | Ringgit, Bonds Fall on U.S., Europe Debt Concern as Stocks Slide | http://www.bloomberg.com/news/2011-04-19/ringgit-bonds-fall-on-u-s-europe-debt-concern-as-stocks-slide.html
| B y D a v i d Y o n g | Malaysia’s ringgit fell to a four-
week low as sovereign debt concerns in the U.S. and Europe
prompted investors to favor safer bets than emerging-market
assets. The currency dropped the most in a week after Standard &
Poor’s cut the outlook on its AAA rating for the U.S. to
negative from stable and the yield on Greece ’s two-year bonds
exceeded 20 percent. Asian stocks fell for a third day and gold
climbed for a third day to record on safe-haven demand.
Government bonds declined. “People will sell and remain on the sidelines for a while
given the uncertainty and knee-jerk aversion to risk,” said Lam Chee Mun, a fund manager in Kuala Lumpur at TA Investment
Management Bhd. “It’s a timely reminder that countries will
need to consider how they will pay up when the bills come due.” The ringgit weakened 0.1 percent to 3.0260 per dollar as of
4:08 p.m. in Kuala Lumpur , according to data compiled by
Bloomberg. It earlier touched 3.0365, the weakest level since
March 22. The MSCI Asia Pacific Index of stocks dropped 1.1 percent,
tracking declines in U.S. and European equities. S&P put a one-
in-three chance of a U.S. credit-rating downgrade within two
years, saying policy makers need to agree on a plan by 2013 to
reduce budget deficits and the national debt. The cost of
insuring Greek government debt rose to a record yesterday. The additional yield on developing nations’ debt over U.S.
Treasuries increased eight basis points to 273 yesterday, the
highest level since March 18, according to JPMorgan Chase &
Co.’s EMBI+ Sovereign Spread. It fell 6 basis points, or 0.06
percentage point, as of 9:08 a.m. in London . Inflation Survey Five-year notes declined, snapping a six-day rally and
lifting yields from a one-month low, before a government report
on inflation tomorrow. The yield on the 4.262 percent note due September 2016
increased 3 basis points to 3.57 percent, according to Bursa
Malaysia. The price dropped 0.12, or 1.2 ringgit per 1,000
ringgit face amount, to 103.38. Consumer prices probably rose 3.1 percent in March from a
year earlier, matching the biggest increase since April 2009,
according to the median forecast in a Bloomberg News survey.
They increased 2.9 percent in February. To contact the reporter on this story:
David Yong in Singapore at
[email protected] . To contact the editor responsible for this story:
Sandy Hendry at
[email protected] . | |||||||
2011-04-19 00:00:00 UTC | U.K. Solar Companies Ask Court to Study Huhne Subsidy Review | http://www.bloomberg.com/news/2011-04-19/u-k-solar-companies-ask-court-to-study-government-s-review-of-subsidy.html
| B y A l e x M o r a l e s | Low Carbon Solar U.K. Ltd., Element
Power Ltd. and eight others asked a British court to
review U.K. Energy and Climate Change Secretary Chris Huhne ’s
decision to reexamine solar subsidies. The government in March said it may cut subsidies for
bigger solar projects by as much as 72 percent after announcing
a comprehensive review in February of feed-in tariffs, or
guaranteed prices paid for electricity from renewable sources.
The ministry Huhne leads wants to prevent large solar farms from
taking money earmarked for rooftop installations. The companies said today in an e-mailed statement that the
government had set “clear expectations” that a review wouldn’t
take place until 2012, with subsidies changing in 2013. They
also said the Department of Energy and Climate Change never
disclosed what the trigger would be for an early review. “In pulling back on a commitment to support solar energy,
the government will cause the abandonment of hundreds of
community-scale schemes,” said Mark Shorrock, chief executive
officer of Cirencester, England-based Low Carbon Solar. “The
cost of not getting this right now, aside from the government
meeting its climate change targets, include the creation of new
jobs, a diversified income for farmers and landowners, reduced
energy costs for businesses and the provision of more secure and
reliable energy.” The energy department said in an e-mailed statement that it
will “consider” the judicial review. ‘Sustained Growth’ “We support sustained growth in the solar industry and
have proposed measures for consultation that will protect the
feed-in tariffs scheme for homes, small businesses and
communities,” the department said. After the introduction of the tariffs in April 2010, solar
developers including Low Carbon Solar planned to build farms of
ground-mounted photovoltaic panels to benefit from the
subsidies, sparking England ’s southernmost county, Cornwall, to
predict a “gold rush.” While none had been built by February,
the government said it feared developers would earn money
intended for smaller projects and announced a review of plans
for facilities bigger than 50 kilowatts. Judicial reviews in the U.K. examine the decisions of
public agencies. While an authority may be ordered to reconsider
an action, it may later be allowed to draw the same conclusion
provided all procedures are correctly followed. The other companies and individuals making the legal
challenge are Alectron Investments Ltd., Juwi Renewable Energies
Ltd., Lark Energy Ltd., MO3 Power Ltd, Donald Anderson, Guy
Anderson, Kate Kenyon and The Green Company ( Europe ) Ltd.,
according to today’s statement. The group filed the action in
the High Court in London . To contact the reporters on this story:
Alex Morales in London at
[email protected] . To contact the editor responsible for this story:
Reed Landberg at
[email protected] | |||||||
2011-04-19 00:00:00 UTC | SNC Lavalin Eyes Energoprojekt, Serbia to Divest Stake, CEO Says | http://www.bloomberg.com/news/2011-04-19/snc-lavalin-eyes-energoprojekt-serbia-to-divest-stake-ceo-says.html
| B y M i s h a S a v i c | SNC-Lavalin Group Inc. (SNC) , a Canadian
engineering, construction and manufacturing company, is among
three companies interested in Energoprojekt Holding AD, the
Serbian company’s chief executive officer said. Serbia ’s government, which currently controls 33.6 percent
of the Belgrade-based Energoprojekt, “does not intend to keep
the stake long-term, maybe not even mid-term” and contacts with
potential buyers are underway, Vladimir Milovanovic said, naming
only SNC-Lavalin as “the biggest and most serious” of
potential buyers. “There are many aspects to consider, primarily
compatibility of operations and synergy” as SNC-Lavalin and
Energoprojekt overlap on some foreign markets, Milovanovic said
today at a meeting with investors in Belgrade. Energoprojekt’s
core businesses are construction and energy and it runs
operations in 22 countries in Europe , the Middle East, Africa
and South America . The Serbian company has opened a data room on its
performance and activities for potential investors “but we
don’t expect that a sale would be completed this year”
Milovanovic said. The Energoprojekt Holding comprises seven core and two non-
core companies with 2,650 employees in Serbia and in its units
abroad. Its other activities include urban planning, industrial
development, information technologies, trade, real estate and
insurance. The company’s current contracts total 350 million euros
($500 million) and it expects to close new ones this year worth
275 million euros, the CEO said. Energoprojekt’s consolidated sales rose 10.42 percent last
year to 228 million euros with pre-tax profit falling nearly 30
percent to 8.74 million euros. To contact the reporter on this story:
Misha Savic in Belgrade at
[email protected] To contact the editor responsible for this story:
James M. Gomez at [email protected] | |||||||
2011-04-19 00:00:00 UTC | Liverpool's Comolli Is Planning Triple French Swoop, Sun Says: Roundup | http://www.bloomberg.com/news/2011-04-19/liverpool-s-comolli-is-planning-triple-french-swoop-sun-says-roundup.html
| B y T a r i q P a n j a | The following is a roundup of
soccer stories from U.K. newspapers, with clickable links to the
Web. Liverpool’s French Foray Liverpool technical director Damien Comolli has identified
Lyon goalkeeper Hugo Lloris , Paris Saint-Germain defender
Mamadou Sakho and Rennes midfielder Yann M’Vila to bolster the
Reds next season, the Sun reported. The trio would cost between 45 million pounds ($73.2
million) and 55 million pounds, the newspaper said. Liverpool would finance the signings by selling players
including Alberto Aquilani . The Italian midfielder has spent
this season on loan at Juventus a year after joining for 20
million pounds from Roma, the Sun added. Wall Beaten The Football Association may invoice Manchester United for
damage to a wall in the Wembley locker-room that occurred after
the team’s 1-0 F.A. Cup semifinal defeat to Manchester City last
weekend, the Sun said . The newspaper said someone “took out their frustrations”
on the wall in the manager’s side of the dressing room during
the trip to the London stadium. Ben Arfa Back Newcastle may get Hatem Ben Arfa back from his broken leg
for the last three games of the season, the Daily Mail said. The Frenchman has been out since suffering a double
fracture following a challenge by Manchester City’s Nigel de
Jong in October. Carlo for Madrid? Chelsea manager Carlo Ancelotti could replace Jose Mourinho
as Real Madrid coach, the Mail said. Ancelotti is on a shortlist to take over from Mourinho,
whose future looks uncertain amid strains with bosses and the
Spanish media, the newspaper said. Ancelotti’s own future at Chelsea is also in doubt. The
Italian said he doesn’t know if he’ll be coaching the Blues next
season. Berbatov Doubts There’s a question mark over the future of Manchester
United’s Bulgarian forward Dimitar Berbatov following a poor
performance in the F.A. Cup semifinal loss, the Daily Mirror
said. Berbatov has a year left on the contract he signed when he
joined for a club record 30 million pounds in September 2008.
He’s unsure if United will trigger a clause allowing the team to
extend the deal by a further 12 months, the Mirror said. Berbatov has been benched in recent matches as coach Alex
Ferguson preferred to pair Wayne Rooney with Mexican forward
Javier Hernandez . Berbatov will return to the sidelines for
tonight’s match with Newcastle as Rooney is returning from
suspension, the Mirror added. To contact the reporter on this story:
Tariq Panja in London at
[email protected] To contact the editor responsible for this story:
Chris Elser at
[email protected] | |||||||
2011-04-19 00:00:00 UTC | Rwandan Government Caps Fuel Prices as Imported Oil Costs Increase | http://www.bloomberg.com/news/2011-04-19/rwandan-government-caps-fuel-prices-as-imported-oil-costs-increase.html
| B y H e a t h e r M u r d o c k | Rwanda capped prices for premium
gasoline and diesel fuel at 1,060 Rwandan francs ($1.76) per
liter, after a more than 12 percent increase in the cost of
imported oil over the past month and a half, according to an e-
mailed statement released by the government today. Prices at the pump have risen 14 percent during the year to
date due to political instability in the Middle East, Trade and
Industry Minister Monique Nsanzabaganwa said at a meeting in the
capital, Kigali, on April 17. To contact the reporter on this story:
Heather Murdock in Kigali at
[email protected] To contact the editor responsible for this story:
Agnes Nikoi at
[email protected] | |||||||
2011-04-19 00:00:00 UTC | BNY Mellon Profit Climbs 12% as Market Rally Increases Assets, Boosts Fees | http://www.bloomberg.com/news/2011-04-19/bny-mellon-first-quarter-net-climbs-12-as-market-rally-increases-assets.html
| B y C h a r l e s S t e i n a n d C h r i s t o p h e r C o n d o n | Bank of New York Mellon Corp. (BK) , the
world’s biggest custody bank, reported a 12 percent increase in
first-quarter earnings as a rising stock market lifted assets
and the fees for overseeing them. Net income climbed to $625 million, or 50 cents a share,
from $559 million, or 46 cents, a year earlier. Analysts had
expected the New York-based company to earn 56 cents a share,
according to the average of 13 estimates in a Bloomberg survey. “The fee-based banks like Bank of New York have real
revenue growth at a time when other banks don’t,” Gerard Cassidy , an analyst with RBC Capital Markets in Portland , Maine ,
said in a telephone interview before the earnings were released.
Cassidy rates the stock “outperform.” Assets under custody and administration rose 14 percent to
$25.5 trillion, helping offset earnings from money funds and
fixed-income investments that have been hurt by interest rates
near zero. Bank of New York Mellon and rival State Street Corp.,
the third-largest custody bank, together spent at least $4.4
billion on acquisitions over the past year to add assets and
expand abroad. State Street, which is based in Boston, said today that
first-quarter profit on an operating basis rose 19 percent to
$439 million. Net income fell to $466 million, or 93 cents a
share, from $492 million, or 99 cents, a year earlier, when
earnings were boosted by the sale of securities the bank had
previously written down. Expanding Abroad Northern Trust Corp. may post a 0.6 percent increase in
profit when it reports earnings at 7:30 a.m., according to the
average estimate of 13 analysts. The Chicago-based firm is the
fourth-largest custody bank. JPMorgan Chase & Co. in New York is
the second-largest. Custody banks earn fees for keeping records, tracking
performance and lending securities to institutional investors
such as mutual funds, pensions and hedge funds . U.S. firms, the
largest in the business, have expanded in Europe , where the
market is more fragmented and banks have been selling custody
units to strengthen their balance sheets. State Street added the securities-servicing unit of Italy’s
Intesa Sanpaolo SpA for 1.28 billion euros ($1.82 billion) in
May, Mourant International Finance Administration in the U.K.’s
Channel Islands in April of last year, and Bank of Ireland’s
investment-management business in January of this year. Bank of New York Mellon bought Germany ’s BHF Asset
Servicing GmbH for 253 million euros in August, and acquired
Pittsburgh-based PNC Financial Service Group Inc.’s investment-
servicing business for $2.31 billion in July. Assets Rise Assets under management rose 11 percent to $1.2 trillion.
The money-management unit attracted $31 billion in net long-term
deposits. Bank of New York Mellon in March hired Jack Malvey, a
former Lehman Brothers Holdings Inc. analyst, as chief global
markets strategist. It named BlackRock Inc. (BLK) ’s Curtis Arledge as
chief executive officer of its asset-management unit in August,
filling a role left vacant when Ronald O’Hanley departed to
become president of asset management at Boston-based Fidelity
Investments . Revenue rose 8.5 percent to $3.65 billion. Foreign exchange
and other trading revenue fell 24 percent to $198 million,
driven by lower volatility and declines in fixed-income and
derivatives trading, the bank said. Raising Dividends Bank of New York Mellon declined 3.3 percent this year
through yesterday, compared with the 0.1 percent decline for
S&P’s index of 17 custody banks and asset managers. State Street
lost 3.6 percent and Northern Trust fell 7.2 percent. Bank of New York Mellon and State Street raised their
dividends last month and announced share buybacks, after the
Federal Reserve approved the measures following a review of
banks’ financial strength. Both cut their payouts to investors
in 2009 after plunging financial markets hurt earnings. The Standard & Poor’s 500 Index, the benchmark for U.S.
stocks, has gained 9 percent in the past year, boosting fees of
asset managers and custody banks. All three independent custody banks sold preferred shares
to the government in 2008 as part of the Treasury’s Troubled
Asset Relief Program, an effort to inject cash into the banking
system during the worst months of the credit crisis. BNY Mellon
received $3 billion, State Street $2 billion and Northern Trust
$1.58 billion. The banks repurchased the shares in 2009. To contact the reporters on this story:
Charles Stein in Boston at
[email protected] ;
Christopher Condon in Boston at
[email protected] To contact the editor responsible for this story:
Christian Baumgaertel at
[email protected] | |||||||
2011-04-19 00:00:00 UTC | Novartis Rises as Profit, Sales Beat Estimates on Generic Lovenox, Gleevec | http://www.bloomberg.com/news/2011-04-19/novartis-first-quarter-profit-falls-on-flu-vaccine-sales-1-.html
| B y E v a V o n S c h a p e r | Novartis AG (NOVN) gained the most in four
months in Zurich trading after first-quarter sales and profit
surpassed analyst forecasts on higher revenue from a generic
blood thinner and the Gleevec cancer medicine. Net income dropped 6 percent to $2.77 billion from $2.93
billion a year earlier, the Basel, Switzerland-based company
said today. Analysts forecast profit of $2.57 billion, the
average of eight estimates compiled by Bloomberg in the past
month. Sales increased 16 percent to $14 billion, beating the
average estimate of $13.7 billion. Novartis, Europe’s second-largest drugmaker by sales,
expects new products such as the copy of Sanofi-Aventis SA (SAN) ’s
Lovenox and Gilenya for multiple sclerosis to fuel growth in
coming quarters as patents start to expire on the company’s
best-selling treatments, including Diovan for hypertension. “This is a really strong underlying performance heading
into Diovan pressures in 2012,” Gbola Amusa , an analyst at UBS
AG in London , said in an interview today. The company’s sales
growth is “a standout” in the industry, Amusa said. Revenue gains this year will be “around the double-digit
mark” at constant currency rates, the company said, repeating
its forecast from Jan. 27. Novartis aims to improve core
operating income margin in constant currencies while absorbing
price cuts, generic competition and the loss of flu-vaccine
sales, according to the statement. Novartis doesn’t forecast
earnings. Diovan Competition Profit fell in the quarter as sales of influenza vaccine
sank following the end of the flu pandemic last year. The
addition of revenue from Alcon Inc. (ACL) , the eye-care company in
which Novartis bought a majority stake in August, failed to
offset the vaccine drop. Novartis completed the acquisition of
the rest of Alcon this month. Novartis rose 1.68 Swiss francs, or 3.5 percent, to 50.30
Swiss francs at the close of Zurich trading. The gain was the
biggest since Dec. 15. Before today, the stock had lost 10
percent in the past year including reinvested dividends,
compared with a 3.7 percent return for the Bloomberg Europe
Pharmaceutical Index. Diovan, the company’s best-seller in 2010 with $6.1 billion
of sales, began to lose patent protection in Europe this year
and faces generic competition in the U.S. in 2012. The Gleevec
cancer medicine, the No. 2 product, will start to face cheaper
copies in the U.S. in 2015. Joicela Application Novartis’s efforts to replace lost revenue from Diovan and
Gleevec were set back today when the European Medicines Agency
said the company withdrew its application to market the Joicela
pain pill. The Swiss company wasn’t able to provide information
to regulators in the time allowed, the agency said in a
statement . The EU filing was the company’s second attempt at re-
introducing the drug for osteoarthritis patients who don’t carry
a specific genetic marker. The application withdrawal “has nothing to do with
biomarkers or genetic tests,” Eric Althoff , a spokesman for
Novartis, said in a telephone interview. The group of
painkillers that includes Joicela “remain a challenging
environment.” Novartis won’t ask EU regulators to approve its LBH589 drug
to treat Hodgkin’s lymphoma. LBH589 will continue to be
developed for other uses, Novartis said. Generic Drugs Revenue from the Sandoz generic-drug unit advanced 16
percent to $2.3 billion, boosted by $247 million of sales of the
Lovenox copy. Novartis and Momenta Pharmaceuticals Inc. (MNTA) began
selling the treatment in July after approval by the U.S. Food
and Drug Administration. Sales of branded medicines gained 7 percent to $7.8
billion. Diovan generated $1.4 billion in revenue, down 3
percent. Doctors wrote fewer Diovan prescriptions in the first
quarter as generic competitors went on sale in Spain , Canada and
Brazil . The loss of Diovan sales to generics was not as severe as
expected, Chief Executive Officer Joe Jimenez said on a
conference call. Competition will increase late in the year when
the drug loses patent protection in more European countries, he
said. Sales of Gleevec, used to treat the blood cancer chronic
myeloid leukemia, rose 4 percent to $1.08 billion. Gilenya revenue totaled $59 million, according to the
statement. Sales were “significantly ahead of what we
expected,” Jimenez said. More than 6,500 patients in the U.S.
are using the drug, which was approved by regulators in
September, he said. Gilenya, the first oral medicine approved in
the U.S. for multiple sclerosis, costs about $48,000 a year, a
price that rivals cancer medicines such as Roche Holding AG (ROG) ’s
Avastin. Vaccines and diagnostics sales fell 73 percent to $371
million as pandemic-flu revenue plunged by $1.1 billion.
Novartis’s consumer-health unit had revenue of $1.6 billion, up
11 percent from a year earlier. To contact the reporter on this story:
Eva Von Schaper in Munich Bureau at
[email protected] To contact the editor responsible for this story:
Phil Serafino at
[email protected] | |||||||
2011-04-19 00:00:00 UTC | Syria's Cabinet Endorses Draft Decree to Lift 48-Year-Old Emergency Law | http://www.bloomberg.com/news/2011-04-19/syria-s-cabinet-approves-draft-decree-to-lift-48-year-old-emergency-law.html
| B y M a s s o u d A . D e r h a l l y , N a y l a R a z z o u k a n d I n a l E r s a n | Syria ’s Cabinet endorsed a draft
decree to lift a 48-year-old emergency law, the main demand of
protesters challenging President Bashar al-Assad’s rule. The Council of Ministers also approved draft bills to
dissolve the Supreme State Security Court and regulate the right
to protest, Information Minister Adnan Mahmoud said today in a
televised speech after the Cabinet session. The measures need
the approval of the president or parliament to become law,
former lawmaker George Jabbour said in a telephone interview. “This will reinforce security and will protect the dignity
of the citizens,” Mahmoud said. The draft on the right to
protest “is similar to those in place in most countries of the
world, particularly in European countries and the United
States ,” he said. Syria is the latest Middle Eastern country to be hit by the
wave of uprisings that ousted long-time rulers in Egypt and
Tunisia , and sparked an armed conflict in Libya . Assad’s regime
is an ally of Iran and a power broker in neighboring Lebanon,
where it supports Hezbollah, an armed Shiite Muslim group. “The number of deaths and injuries suffered by protesters
at the hands of the security forces in the past month has
angered and galvanized the opposition to demand much more than
the modest reforms they initially wanted, some even calling for
regime change,” Chris Phillips, an analyst at the Economist
Intelligence Unit in London , said today by e-mail. “Now, the
formal ending of emergency law is unlikely to satisfy protesters
unless it is accompanied by a marked change in the behavior of
the security services.” Protesters Killed Activists said at least 18 protesters have died in clashes
in the three days since Assad instructed the Cabinet to make
changes aimed at calming dissent. The protests broke out in mid-
March, prompting a government crackdown and scores of deaths
across the country. Assad ordered his ministers to prepare the
legal framework for lifting the state of emergency in a speech
on April 16, without referring to other protester demands,
including the release of political prisoners. At least 17 protesters died two days ago during anti-
government demonstrations in the central city of Homs, home to
one of the country’s two oil refineries, and Latakia, Ammar
Qurabi, head of Syria’s National Organization for Human Rights ,
said by phone from Cairo. He said security forces broke up an
overnight sit-in Homs early today, causing at least one death.
Agence France-Presse put the death toll today in Homs at four. Officers Die The Interior Ministry accused “criminal gangs” of killing
a general, his three relatives, as well as a colonel and a
soldier in two separate attacks in Homs, according to SANA. Assad must do more to meet the demands of the Syrian people
for greater freedom and democracy, U.K. Foreign Secretary
William Hague said after the Cabinet approved the draft decree
on lifting the emergency law. The move “is a step forward, there’s no doubt about
that,” Hague said in an interview with Sky News television
today. “He still has much more to do to meet the legitimate
aspirations of the people of his country.” Assad’s Baath party regime, which has been in power since
1963, has blamed the violence on terrorists. The Interior
Ministry announced today a ban on street protests. “The ministry said it will not be lenient with such
terrorist acts and it will work strictly to enhance security and
stability all over Syria and pursue terrorists everywhere to
bring them to justice,” according to the state-run Syrian Arab
News Agency . Nothing Enacted “Banning protests is unconstitutional,” former Judge
Haitham al-Maleh, 80, a human-rights activist who was recently
released from prison as part of an amnesty, told Al Arabiya
television. “No decrees or laws have so far been enacted, so
this is all talk for now.” The Cabinet today also studied a series of draft decrees to
introduce further reforms, including a new media law to enforce
freedoms, Mahmoud said. The Cabinet also looked into draft laws
for political parties and local administrations, SANA said. “These strategic draft decrees come within the framework
of political reform that will help build democracy and increase
the participation of citizens,” SANA said. The government
studied a draft law that would employ 10,000 degree-holders in
public institutions every year, it said. Government concessions don’t seem to satisfy protesters who
always “want a bit more,” Theodore Karasik , director of
research at the Dubai-based Institute for Near East and Gulf
Military Analysis, said today in a phone interview. Allegations of Torture At least 130 people have been killed in the unrest that
started in mid-March, according to Human Rights Watch . The New
York-based organization has said Syrian forces have tortured
protesters and that it is impossible to verify how many remain
in detention. Activists say the number killed exceeds 200. The turmoil has posed the most serious challenge to Assad,
who inherited power from his father 11 years ago. He has accused
foreign-led conspirators of taking advantage of the unrest to
undermine Syria, mostly due to its support for anti-Israel
groups. Assad issued a decree on April 14 approving a new
government under former Agriculture Minister Adel Safar, after
the protests intensified. To contact the reporters on this story:
Massoud A. Derhally in Beirut , Lebanon, at
[email protected] ;
Nayla Razzouk in Amman at
[email protected] ;
Inal Ersan in Dubai at
[email protected] . To contact the editors responsible for this story:
Andrew J. Barden at
[email protected] ;
Shaji Mathew at
[email protected] . | |||||||
2011-04-19 00:00:00 UTC | Deutsche Boerse, Celesio, Sartorius: German Equity Preview | http://www.bloomberg.com/news/2011-04-19/deutsche-boerse-celesio-sartorius-german-equity-preview.html
| B y O l i v e r S u e s s | The following is a list of
companies whose shares may have unusual price changes in
Germany . Stock symbols are in parentheses and share prices are
from the previous close. Germany’s benchmark DAX index rose 0.2 percent to 7,039.31. Celesio AG (CLS1) (CLS1 GY): Haniel & Cie. GmbH Chief Executive
Officer Juergen Kluge said Celesio needs to improve its core
business as a drug wholesaler, Frankfurter Allgemeine Zeitung
reported, citing an interview. Haniel, which owns a majority
stake in Celesio, won’t be able to finance “continuing”
acquisitions of the Stuttgart-based company, the newspaper cited
Kluge as saying. The shares fell 0.9 percent to 16.36 euros. Deutsche Boerse AG (DB1) (DB1 GY): The exchange operator said it
remains committed to its merger agreement with NYSE Euronext.
The shares lost 0.2 percent to 52.76 euros. Sartorius AG (SRT GY): The German maker of laboratory
scales and filtering equipment posted a first-quarter unadjusted
consolidated net profit after minority interests of 10.1 million
euros. The shares rose 1.6 percent to 31.80 euros. To contact the reporter on this story:
Oliver Suess in Munich at
[email protected] To contact the editors responsible for this story:
Frank Connelly at [email protected]
Edward Evans at [email protected] | |||||||
2011-04-19 00:00:00 UTC | Sberbank to Lead Bond Organization on Troika Merger, Gref Says | http://www.bloomberg.com/news/2011-04-19/sberbank-to-lead-bond-organization-on-troika-merger-gref-says.html
| B y E d i t o r s : [ b n : P R S N = 1 5 0 0 2 2 1 1 ] A l a n C r a w f o r d [ ] | OAO Sberbank Chief Executive
Officer German Gref comments on the ruble rate and the Russian
lender’s integration with Troika Dialog after it bought the
broker in March. Gref gave an interview in Moscow on April 15. On acquisition of Troika: “Obviously there have been some issues, nothing major, but
we can’t be expected to have foreseen every little issue. In
general, I would say that everything is going according to plan.
The main thing is that we didn’t make an error with the quality
of assets, of the human capital. I think our understanding of
each other has improved further. The main thing is that we are
very close in our philosophy and values, which is very
important. We have virtually no disagreements. You rarely see
such deals.” On Sberbank as organizer of ruble bond sales after merger: “I think we shall become the absolute leader on this
market. Both of us have very decent DCM teams and uniting their
efforts and spirits I think will eventually yield a very good
result.” On ruble bonds versus dollar debt: “You know the ruble’s appreciation trend is always under a
question mark. No one can say whether it will be a long-term
trend. Everything depends on the oil price. Though it’s also an
interesting time to raise funds in foreign currencies, including
the dollar. The rates are interesting, the ruble rates are very
interesting. Foreign currency rates are extremely low if you
start hedging.” | |||||||
2011-04-19 00:00:00 UTC | Dow Shuts Plaquemine Hydrocarbon Cracker After Upset | http://www.bloomberg.com/news/2011-04-19/dow-shuts-plaquemine-hydrocarbon-cracker-after-process-upset-.html
| B y L e e l a L a n d r e s s | Dow Chemical Co. (DOW) , the largest U.S.
chemical maker, shut the light hydrocarbon cracker 3 after a
“process upset” at its Plaquemine plant in Louisiana, said
Gregory Baldwin, a company spokesman. The cracker was safely shut down and there were no
injuries, Baldwin, who is based at company headquarters in
Midland, Michigan , said today in an e-mail. It was taken offline
after a process upset April 16. A restart date is being
assessed, according to Baldwin. A cracker split oil products like naphtha and liquefied
petroleum gases through pressure and heat. Outages can increase
prices for ethylene and propylene as companies turn to spot
markets to help them meet supply contracts. The company shut an ethylene plant at Plaquemine for over
two weeks on Feb. 16 to make repairs, Baldwin said at the time. Plaquemine is 94 miles (151 kilometers) northwest of New
Orleans . To contact the reporter on this story:
Leela Landress in Houston at
[email protected] To contact the editor responsible for this story:
Richard Stubbe at
[email protected] | |||||||
2011-04-19 00:00:00 UTC | Telefonica O2 Buys Smaller Internet Provider, Lidovky Says | http://www.bloomberg.com/news/2011-04-19/telefonica-o2-buys-smaller-internet-provider-lidovky-says.html
| B y L e n k a P o n i k e l s k a | Telefonica O2 Czech Republic AS (SPTT) is
buying smaller Internet connection providers to gain clients,
expand its optical-fiber network and eliminate competitors that
offer cheaper rates, Lidove Noviny reported. Telefonica bought Losan Internet for 100 million to 130
million koruna ($5.9 million to $7.6 million), the newspaper
reported, without saying where it got the information. To contact the reporter on this story: Lenka Ponikelska in
Prague [email protected] . To contact the editor responsible for this story:
James M. Gomez at
[email protected] | |||||||
2011-04-19 00:00:00 UTC | China Money Rate Surges on Speculation PBOC to Drain More Cash | http://www.bloomberg.com/news/2011-04-19/china-money-rate-surges-on-speculation-pboc-to-drain-more-cash.html
| B y B l o o m b e r g N e w s | China ’s money-market rate rose to
the highest level in almost three weeks on speculation demand
for cash will jump as the central bank steps up efforts to drain
capital from the financial system. The rapid accumulation of China’s foreign-exchange reserves
is putting pressure on the central bank as it seeks to reduce
liquidity, People’s Bank of China Governor Zhou Xiaochuan said
late yesterday. The monetary authority sold 55 billion yuan
($8.4 billion) of one-year bills and 32 billion yuan of 28-day
repurchase agreements , two days after raising banks’ reserve-
requirement ratios for the fourth time this year. “The market speculates the central bank will drain more
capital because the strengthening yuan is attracting more
capital inflows,” said Liu Junyu, a Shenzhen-based bond analyst
at China Merchants Bank Co., the nation’s sixth-largest lender.
“It’s probably not going to withdraw cash through open-market
operations this week because the reserve-ratio hike will mop up
360 billion yuan of capital.” The seven-day repurchase rate, which measures interbank
funding availability, gained 27 basis points to 2.97 percent as
of 10:45 a.m. in Shanghai , according to a weighted average rate
compiled by the National Interbank Funding Center. That was the
highest level since March 30. China’s foreign-currency holdings jumped $197 billion in
the first quarter, the second-biggest amount on record, even as
the nation posted its first quarterly trade deficit in seven
years. The central bank issued the one-year bills at a yield of
3.3058 percent, unchanged for a second week. A total of 191
billion yuan of central bank bills and repurchase agreements
will be redeemed this week, according to China Merchants’ Liu. One-year interest-rate swaps, the fixed cost needed to
receive the floating seven-day repurchase rate, were little
changed at 3.38 percent, according to data compiled by Bloomberg. The yield on the 3.90 percent government bond due August
2014 gained one basis point to 3.27 percent, according to the
Interbank Funding Center. A basis point is 0.01 percentage point. Judy Chen . Editors: Andrew Janes, Sandy Hendry To contact Bloomberg News staff for this story:
Judy Chen in Shanghai at +86-21-6104-3043 or
[email protected] . To contact the editor responsible for this story:
Sandy Hendry at
[email protected] . | |||||||
2011-04-19 00:00:00 UTC | Billups Ruled Out of Knicks Playoff Game Against Celtics With Knee Injury | http://www.bloomberg.com/news/2011-04-19/billups-ruled-out-of-knicks-playoff-game-against-celtics-with-knee-injury.html
| B y R o b G l o s t e r | Chauncey Billups won’t play for the
New York Knicks against the Boston Celtics in the National
Basketball Association playoffs tonight because of a strained
left knee. The point guard, 34, said he’ll have a scan on the injury
tomorrow as a precaution. Knicks coach Mike D’Antoni announced Billups’s absence
shortly before the start of Game 2. Billups was injured with
less than a minute remaining in Boston’s 87-85 win two days ago
in the first game in the best-of-seven series. D’Antoni said he didn’t know if Billups will be ready for
Game 3 on April 22 at New York’s Madison Square Garden. To contact the reporter on this story:
Rob Gloster in San Francisco at
[email protected] To contact the editor responsible for this story:
Michael Sillup at
[email protected] | |||||||
2011-04-19 00:00:00 UTC | El-Erian Says S&P Negative Outlook One of ‘Unthinkable Things' to Happen | http://www.bloomberg.com/news/2011-04-19/el-erian-says-s-p-negative-outlook-one-of-unthinkable-things-to-happen.html
| B y D e n n i s F i t z g e r a l d | The Standard & Poor’s change
yesterday in its outlook for the U.S. AAA credit rating to
negative is one of the “unthinkable” things that have
happened, said Mohamed El-Erian, chief executive officer at
Pacific Investment Management Co., in a radio interview on
“Bloomberg Surveillance” with Tom Keene . To contact the editor responsible for this story:
Dennis Fitzgerald at
[email protected] | |||||||
2011-04-19 00:00:00 UTC | Colombia Stocks: Conconcreto, Bolsa de Valores, Canacol Energy | http://www.bloomberg.com/news/2011-04-19/colombia-stocks-conconcreto-bolsa-de-valores-canacol-energy.html
| B y B l a k e S c h m i d t | The following companies are having
unusual price changes in Bogota trading. Stock symbols are in
parentheses and prices are as of 11:44 a.m. New York time. The IGBC Index fell 0.2 percent to 13,908.29, while the
Colcap Index dropped 0.4 percent to 1,647.72. Colombian construction company Conconcreto SA (CONCONC CB)
rose 2.8 percent to 1,470 pesos, after inaugurating its
Alcaravan commercial plaza in Bogota yesterday, said Camilo Rubiano, an analyst at brokerage Afin SA. Bolsa de Valores de Colombia (BVC) SA, the operator of
the country’s main securities exchange, rose 0.3 percent to 39.8
pesos. Colombia ’s securities regulatory agency, Superintendencia
Financiera, yesterday approved the issue of 100 million shares
by Grupo Odinsa SA (ODINSA CB), the Bogota-based engineering and
construction company. Canacol Energy Ltd. (CNE) , the Calgary-based oil
company that operates fields in South America , fell 1.3 percent
to 2,330 pesos on delayed results of the company’s drilling at
its Apoteri K-2 exploration well in Guyana, said Santiago Melo,
an analyst at Alianza Valores SA. To contact the reporter on this story:
Blake Schmidt in Bogota at
[email protected] To contact the editor responsible for this story:
David Papadopoulos at
[email protected] | |||||||
2011-04-19 00:00:00 UTC | Hungarian Wages Rise Less Than Economists Forecast in February | http://www.bloomberg.com/news/2011-04-19/hungarian-wages-rise-less-than-economists-forecast-in-february.html
| B y Z o l t a n S i m o n | Hungarian wages rose at a slower
annual pace in February than economists forecast. The average monthly gross wage climbed 4.8 percent to
202,654 forint ($1,076), the biggest increase since March 2010,
the Budapest-based statistics office said in a statement today.
The median estimate of 10 analysts in a Bloomberg survey was for
wage growth of 5.1 percent. Public wages rose 4.6 percent after dropping 12.5 percent
in January while salaries at private companies increased 4.3
percent. Regular private wages excluding bonuses, one of the
central bank’s most closely watched indicators for determining
inflation expectations, rose an annual 3 percent in February. To contact the editor responsible for this story:
Zoltan Simon at
[email protected] To contact the editors responsible for this story:
Willy Morris at
[email protected] | |||||||
2011-04-19 00:00:00 UTC | Sprint Talks With Startups About Network Space Rental, WSJ Says | http://www.bloomberg.com/news/2011-04-19/sprint-talks-with-startups-about-network-space-rental-wsj-says.html
| B y M i k e M i l l a r d | Sprint Nextel Corp. (S) is talking with
LightSquared Inc. and Clearwire Corp. (CLWR) about renting them space
on its wireless networks, the Wall Street Journal reported,
citing people familiar with the matter. To contact the editor responsible for this story:
Mike Millard at
[email protected] | |||||||
2011-04-19 00:00:00 UTC | U.S. Bancorp First-Quarter EPS Ex-Gain 50c, Est. 49c | http://www.bloomberg.com/news/2011-04-19/u-s-bancorp-posts-50-cents-first-quarter-eps-before-gain-above-estimates.html
| B y J o A n n e N o r t o n | U.S. Bancorp, the fifth-biggest
U.S. commercial bank by deposits, had first-quarter profit of 50
cents a share before a gain. Analysts surveyed by Bloomberg had
estimated profit of 49 cents on average. To contact the editor responsible for this story:
JoAnne Norton at
[email protected] | |||||||
2011-04-19 00:00:00 UTC | U.A.E. Arrests Pro-Democracy Activist Al-Shehhi, Lawyer Says | http://www.bloomberg.com/news/2011-04-19/u-a-e-arrests-pro-democracy-activist-al-shehhi-lawyer-says.html
| B y V i v i a n S a l a m a | United Arab Emirates police
arrested a fourth pro-democracy activist who called for
constitutional changes, a lawyer and fellow campaigner said. Abdullah bin Qious Al-Shehhi, 55, was detained in the
northern emirate of Ras Al Khaimah on April 15 after police
raided his home and confiscated documents and laptop computers ,
Mohammed al-Mansouri said yesterday in a telephone interview.
Al-Shehhi is a former army officer and head of the media section
at the Emirates Heritage Club. Al-Shehhi signed an online petition that calls for
elections for members of the Federal National Council, which
advises the government, and for an expansion of the body’s
legislative and regulatory powers. A government committee now
picks half the council’s members and the rulers of the U.A.E.
seven emirates choose the rest. The spokesman for the U.A.E federal government declined to
comment. Khater Massaad, an adviser to the ruler of Ras Al
Khaimah, said he had no knowledge of the case. Bloomberg News
was unable to reach Sheikh Talib bin Saqr Al Qassimi, chief of
the Ras Al Khaimah police, for comment. While the U.A.E. has been spared in the wave of protests
taking place across the Arab world this year, the government has
taken measures to appease its citizens. It said March 2 that it
would allocate 5.7 billion dirhams ($1.6 billion) to fund water
and infrastructure projects in the country’s northern emirates,
which have traditionally lagged behind the rapid development of
others such as Dubai and Abu Dhabi . Three other activists, including Nasser bin Ghaith, an
economics professor at the Abu Dhabi branch of France ’s Sorbonne
University, have been arrested since April 8, according al-
Mansouri and fellow lawyer and activist Abdulhamid al-Kumaity. To contact the reporter on this story:
Vivian Salama in Abu Dhabi at
[email protected] . To contact the editor responsible for this story:
Andrew J. Barden at [email protected] . | |||||||
2011-04-19 00:00:00 UTC | China Resources Power Outlook Revised to Negative at S&P | http://www.bloomberg.com/news/2011-04-19/china-resources-power-outlook-revised-to-negative-at-s-p-1-.html
| B y B l o o m b e r g N e w s | China Resources Power Holdings Co.,
the Hong Kong-listed mainland electricity producer, had its
outlook revised to negative by Standard & Poor’s Ratings
Services, which cited rising fuel costs. All the company’s ratings were affirmed, including the BBB
corporate credit rating and the BBB- senior unsecured issue
rating, S&P said in a statement today. The power producer was
put on CreditWatch with negative implications on March 21. “Soaring coal prices plus delayed adjustments of
electricity tariffs have negated the company’s efforts to
improve operating efficiency and control costs,” S&P said. China’s current policy focus on curbing inflation makes it
uncertain when and by how much state-capped electricity prices
may be adjusted, putting China Resources Power’s financial
profile under pressure over the next 12 months, S&P said. The
ratings company expects a price increase in or before 2012. The government raised the price of electricity that grid
operators pay power plants in 16 provinces to help generators
cope with rising fuel costs, state media including Xinhua News
Agency reported yesterday. The increase was the first since
November 2009. Average benchmark prices for power-station coal for
immediate delivery at Qinhuangdao, China’s largest port for the
fuel, rose 25 percent last year. China Resources Power’s fuel
bill increased 21 percent last year, according to its 2010
earnings statement. The power producer posted a 7.8 percent drop in profit last
year. Fuel accounted for 72 percent of its operating expenses. The shares fell 15 percent in Hong Kong trading in the past
year, compared with the 9.9 percent gain in the benchmark Hang
Seng Index. (HSI) China Resources Power dropped 1.3 percent today to
close at HK$13.84. Wang Ying . Editors: Ryan Woo, Paul Gordon . To contact the reporter on this story:
Ying Wang in Beijing at
[email protected] To contact the editor responsible for this story:
Amit Prakash at
[email protected] . | |||||||
2011-04-19 00:00:00 UTC | PNB Bank And UCO Bank CDs Deals:Indian Money Market | http://www.bloomberg.com/news/2011-04-19/pnb-bank-and-uco-bank-cds-deals-indian-money-market.html
| B y S h r a d d h a K o t h a r i | Following is a table showing certificate of deposits
dealt by Indian companies.The data has been provided by Trust Financial
Consultancy Services,SPA Securities Ltd. And NVS Brokerage Ltd.
Generated by Bloomberg Publisher WEB Service Provider ID: 0d903c7869474a40a8f9607a78440fe9 -0- Apr/19/2011 13:18 GMT | |||||||
2011-04-19 00:00:00 UTC | Hungarian Shares Rebound After Biggest Decline in Five Months | http://www.bloomberg.com/news/2011-04-19/hungarian-shares-rebound-after-biggest-decline-in-five-months.html
| B y A n d r a s G e r g e l y | Hungarian shares rebounded from
their biggest retreat in five months after global markets
dropped yesterday as Standard & Poor’s revised the U.S.
government’s long-term credit-rating outlook to negative. The benchmark BUX index added 1.4 percent to 23,600.7 by
the 5 p.m. close in Budapest. It fell 3.8 percent yesterday, the
most since Nov. 10. OTP Bank Nyrt., Hungary ’s largest lender,
gained 2.3 percent to 6,080 forint. The forint strengthened 0.8
percent to 265.82 per euro. S&P cited concern the White House and Congress will fail
to reach agreement on cutting medium- and long-term debt,
threatening the country’s top AAA rating. The MSCI Emerging
Markets Index of equities, which fell 1.7 percent yesterday as
investors pared holdings of risky assets, rose 0.4 percent
today. “The general view is that the rating downgrade can be
avoided, a deal will be struck,” Zoltan Reczey, an analyst at
Buda-Cash Brokerhaz Zrt. in Budapest, said in a telephone
interview today. “The negative reaction from the markets was
natural but it only generated a temporary deterioration in
sentiment. There is a rebound from yesterday’s panic.” Treasury Secretary Timothy F. Geithner said in a Bloomberg
Television interview today he’s confident U.S. political leaders
will bridge their differences and move toward a long-term plan
to narrow record budget deficits and reduce the debt. U.S.
stocks rebounded from the biggest drop in a month today as
results beat analysts’ estimates at companies from Johnson &
Johnson to Burberry Group Plc. To contact the reporter on this story:
Andras Gergely in Budapest at
[email protected] To contact the editor responsible for this story:
Zoltan Simon at
[email protected] | |||||||
2011-04-19 00:00:00 UTC | Gold Rises to Record $1,498.90 an Ounce as Weakening Dollar Stokes Demand | http://www.bloomberg.com/news/2011-04-19/gold-rises-to-record-1-498-90-an-ounce-as-weakening-dollar-stokes-demand.html
| B y P h a m - D u y N g u y e n | Gold was little changed in New York
after climbing to a record on demand for an alternative to the
U.S. dollar . Gold earlier today reached an all-time high of $1,498.90
an ounce following Standard & Poor’s revision yesterday of its
long-term rating of U.S. debt , to negative from stable. The
precious metal has gained 31 percent in the past year, partly on
Europe’s sovereign-debt crisis. “There certainly has always been that lingering concern
over U.S. debt and the S&P people are finally identifying the
threat,” said Stephen Platt, an analyst at Archer Financial in
Chicago. “The world is awash in liquidity. Gold’s slow,
grinding action upward shows the deterioration in the dollar,
excess liquidity and deficit problems are still in force.” Gold futures for June delivery rose 50 cents to $1,493.40
an ounce at 9:45 a.m. on the Comex in New York . Bullion for
immediate delivery fell $2.85 cents to $1,492.45 in London,
after rising to a record $1,498.07. To contact the reporter on this story:
Pham-Duy Nguyen in Seattle at
[email protected] . To contact the editor responsible for this story:
Steve Stroth at
[email protected] . | |||||||
2011-04-19 00:00:00 UTC | SPAIN DAYBOOK: Enagas Posts First-Quarter Earnings; Yield Climbs | http://www.bloomberg.com/news/2011-04-19/spain-daybook-enagas-posts-first-quarter-earnings-yield-climbs.html
| B y M a n u e l B a i g o r r i | Enagas (ENG) SA, the operator of Spain’s
natural-gas grid, reports first-quarter earnings. WHAT TO WATCH: ECONOMY:
*Finance Minister Elena Salgado will be interviewed at 8.30 a.m.
CET on Cadena Ser radio.
*The extra yield investors demand to hold Spanish 10-year bond
instead of German equivalents surged to 230 basis points, the
most since January, on increasing expectations Greece may be
forced to restructure its debt. POLITICS:
*Carme Chacon, Spain’s defense minister, will appear in Congress
to seek approval for an extension of its authorization of the
deployment of Spanish units in military operations to enforce an
air exclusion zone in Libya. EQUITIES:
*Enagas reports first-quarter earnings.
* Metrovacesa
SA (MVC) , Spain’s third-largest property company, got approval from
the High Court of Justice in England and Wales for a scheme of
arrangement on a loan refinancing with most creditors, the
company said in a regulatory filing. MARKETS:
*The IBEX 35 Index (IBEX) dropped 2 percent to 10,344.9.
*The spread between Spanish and German 10-year borrowing costs
widened to 230.6. To contact the reporter responsible for this story:
Manuel Baigorri at
[email protected] To contact the editor responsible for this story:
Angela Cullen at [email protected] | |||||||
2011-04-19 00:00:00 UTC | Japan, Australia Stock Futures Rise as U.S. Housing Starts Gain | http://www.bloomberg.com/news/2011-04-19/japan-australia-stock-futures-rise-as-u-s-housing-starts-gain.html
| B y N o r i e K u b o y a m a a n d S a t o s h i K a w a n o | Japanese and Australian stock
futures advanced after U.S. housing starts increased and
earnings beat estimates at companies including Johnson & Johnson,
signaling the world’s biggest economy is recovering. American depositary receipts of Canon Inc. (7751) , the world’s
biggest camera maker, rose 0.7 percent from the closing share
price yesterday in Tokyo. Those of Advantest, Japan’s largest
maker of chip-testing equipment, gained 0.9 percent after Intel
Corp. forecast quarterly sales that may top estimates. ADRs of
Woodside Petroleum Ltd. (WPL) , Australia’s No. 2 oil producer, climbed
0.5 percent in Sydney as crude prices gained. Futures on Japan’s Nikkei 225 (NKY) Stock Average expiring in
June closed at 9,495 in Chicago yesterday, compared with 9,440
in Osaka, Japan. They were bid in the pre-market at 9,500 in
Osaka at 8:05 a.m. local time. Futures on Australia’s S&P/ASX
200 Index rose 0.7 percent today. “You’re seeing signs the U.S. and Europe are still on
track for recovery,” said Hiroichi Nishi , an equities manager
in Tokyo at SMBC Nikko Securities Inc. “That’s helped to ease
nerves.” Futures on the Standard & Poor’s 500 Index rose 1.1 percent
today. In New York, the index advanced 0.6 percent yesterday
after the Commerce Department said housing starts increased 7.2
percent in March from the previous month. Work began on 549,000
homes, exceeding the 520,000 median forecast of economists
surveyed by Bloomberg News. Results Top Estimates Companies in the U.S. and Europe also reported results that
beat projections, helping boost confidence in the global
recovery. Intel Corp. (INTC) , the biggest chipmaker, forecast second-
quarter sales that may top analysts’ estimates as demand for
processors for high-powered machines that handle Web services
overcame slower personal computer growth. Johnson & Johnson, the world’s second-biggest seller of
health products, forecast full-year earnings $4.90 to $5 a share,
better than an outlook for $4.80 to $4.90 in January, boosted by
new drugs. Japan’s currency also weakened, giving a relief to the
country’s exporters. The yen depreciated to as low as 118.44
against the euro today in Tokyo, compared with 117.24 at the
close of stock trading yesterday on speculation the European
Central Bank will raise interest rates further. Against the
dollar, Japan’s currency weakened to 82.76 last night from 82.44. Commodity producers were boosted by higher crude and metal
prices. Crude oil for May delivery gained $1.03 to settle at
108.15 a barrel yesterday in New York. The London Metal Exchange
Index of six metals including copper and aluminum increased 1
percent, the biggest gain in almost two weeks. The MSCI Asia Pacific Index lost 2.5 percent this year
through yesterday, compared with gains of 4.4 percent by the S&P
500 and drops of 0.5 percent by the Stoxx Europe 600 Index.
Stocks in the Asian benchmark are valued at 12.9 times estimated
earnings on average, compared with 13.5 times for the S&P 500
and 11 times for the Stoxx 600. To contact the reporters on this story:
Norie Kuboyama in Tokyo at
[email protected] ;
Satoshi Kawano in Tokyo at
[email protected] To contact the editor responsible for this story:
Nick Gentle at
[email protected] . | |||||||
2011-04-19 00:00:00 UTC | Zain Saudi First-Quarter Loss Narrows to 532 Million Riyals | http://www.bloomberg.com/news/2011-04-19/zain-saudi-first-quarter-loss-narrows-to-532-million-riyals-1-.html
| B y G l e n C a r e y | Zain Saudi Arabia , a unit of
Kuwait ’s Mobile Telecommunications Co., said its first-quarter
loss narrowed as the kingdom’s third-largest phone company by
market value attracted customers with new services. The loss fell to 532 million riyals ($141.9 million), or
0.38 riyal per share, from 662 million riyals, or 0.47 riyal, a
year earlier, the Riyadh-based company said in a statement on
the Saudi bourse website today. First-quarter revenue rose 36
percent to 1.48 billion riyals. Saudi telecom companies, including Saudi Telecom Co. (STC) , are
competing for mobile-phone and Internet customers with
advertising campaigns and pricing promotions. Mobile-phone users
rose 15 percent to 51.6 million by the end of 2010 from a year
earlier and Internet users increased 11 percent to 11.4 million,
the Saudi Communication and Information Technology Commission
said on its Web site. The quarterly loss narrowed “due to the success of the
company in expanding its customer base by offering new
services,” Chief Executive Officer Saad al-Barrak said in the
statement. Zain Saudi Arabia’s share price declined 11 percent during
the first quarter. The share price closed unchanged at 6.95
riyals yesterday in Riyadh . $600 Million Refinancing Zain Saudi Arabia said on April 12 it signed an accord with
a group of banks on refinancing $600 million of debt. The two-
year Shariah-compliant transaction was arranged by banks
including Arab National Bank, Banque Saudi Fransi and Bahrain-
based Gulf International Bank, the company said in a statement
to the Saudi bourse. Zain Saudi’s net debt rose to 14.68 billion riyals by the
end of last year, according to data compiled by Bloomberg. Zain signed an agreement with Bahrain Telecommunications
Co. and Kingdom Holding Co. (KINGDOM) on April 6 to sell a 25 percent
stake in Zain Saudi Arabia. Saudi Telecom is the largest mobile
phone operating in the kingdom. To contact the reporter on this story:
Glen Carey in Riyadh at
[email protected] To contact the editor responsible for this story:
Shaji Mathew at
[email protected] | |||||||
2011-04-19 00:00:00 UTC | Vodafone May Consider IPO of Indian Joint Venture After 2011, Colao Says | http://www.bloomberg.com/news/2011-04-19/vodafone-may-consider-india-share-sale-similar-to-south-africa.html
| B y K e t a k i G o k h a l e | Vodafone Group Plc (VOD) Chief Executive
Officer Vittorio Colao said the world’s biggest mobile-phone
operator may consider an initial public offering of its Indian
venture, similar to that of the South African unit. The listing would only be considered after 2011 and after
disputes with partner Essar Group and the Indian tax authorities
are resolved, Colao said in an interview with Bloomberg UTV in
Mumbai yesterday. The listing also depends on local demand for
data offerings, he said. After these matters are settled, “we should consider at
some point whether a listing of the company is an option,” he
said. “If there’s a good story from a data perspective, and
from a regulatory perspective, I’d be likely to look at it.” Vodafone, based in Newbury, England , last month said it
will buy an additional 33 percent stake in Vodafone Essar Ltd.
for $5 billion from Essar, raising its stake in India’s third-
largest mobile-phone operator to 75 percent. “I would think markets would take a listing positively,
Vodafone is a very respected player,” said Apurva Shah, head of
research at Prabhudas Lilladher Pvt. in Mumbai. “In India, the
outlook on the mobile companies is turning somewhat positive,”
he said. “Institutional interest is certainly there for mobile
companies at this point.” Local Rules Listing shares may help Vodafone to comply with local
rules. The deal with Essar will increase Vodafone’s direct
equity stake in the venture to 75 percent, while India doesn’t
allow foreign companies to own more than 74 percent in a local
mobile-phone operator. “One of the possibilities for us is to do what we have
done in South Africa ,” Colao said. Vodafone listed its South African unit in 2009. The
business, called Vodacom Group Ltd., is the largest provider of
wireless services in South Africa. Vodacom “maintains its independence, but we have local
individual shareholders, and all the benefits of belonging to
the Vodafone Group ,” the CEO said. “South Africa is one of the
countries where data is growing the most. So, there are some
similarities here.” Another option in India is to turn to smaller local
partners, Colao said. “The short-term option is to use more our
Indian partners that we have here, or to find other Indian
partners that want to be part of the adventure.” Indian ‘Jewel’ The Indian wireless market is forecast by Stamford,
Connecticut-based Gartner Inc. to exceed 993 million users by
the end of 2014. India was one of the “jewels” in the three
months through December, Colao said in February. Vodafone bought a 67 percent stake in Hutchison Essar for
$10.7 billion in 2007. Vodafone’s outlook for India soured a
year after its entry, when six new national licenses were
awarded. Vodafone is challenging a tax bill for the acquisition of
Hutchison Whampoa Ltd. (13) ’s local unit, the country’s largest
cross-border deal. India is seeking 112 billion rupees ($2.5
billion) on Vodafone’s purchase and the company was ordered to
set aside 25 billion rupees as a deposit. “We trust the objectivity and the fairness of the supreme
court,” Colao said. “We are buyers, not sellers of an
asset, and no buyer in the world can make a capital gain for an
asset that is bought,” he said. “If the Indian tax authorities want to go after a certain
transaction, please at least go get the guys who made the money,
not the guys who are investing in the country,” Colao said. To contact the reporter on this story:
Ketaki Gokhale in Mumbai at
[email protected] To contact the editor responsible for this story:
Young-Sam Cho at
[email protected] | |||||||
2011-04-19 00:00:00 UTC | Bulgari, Fiat, Popolare Milano and Saipem: Italian Stock-Market Preview | http://www.bloomberg.com/news/2011-04-19/bulgari-fiat-popolare-milano-saipem-italian-equity-preview.html
| B y M a r c o B e r t a c c h e a n d F r a n c e s c a C i n e l l i | The following companies may be
active in Italian trading. Stock symbols are in parentheses and
share prices are from the previous close. Italy’s benchmark FTSE MIB Index (FTSEMIB) 65.23, or 0.3 percent, to
21,249.9 in Milan. Banca Popolare di Milano Scarl (PMI) : The country’s
oldest cooperative bank agreed to sell an 81 percent stake in
Bipiemme Vita SpA to Covea for 243 million euros ($348 million). The bank plans to raise as much as 1.2 billion euros ($1.7
billion) by selling new shares after the Bank of Italy asked the
country’s oldest cooperative bank to strengthen capital levels. Gruppo Banca Leonardo downgraded the shares to “sell”
from “underweight,” while Deutsche Bank AG cut its rating to
“hold” from “buy.” The stock fell 0.1 percent to 2.53 euros. Bulgari SpA (BUL) : First-quarter sales rose 27.5 percent
at current exchange rates to 253.8 million euros. The stock
advanced 0.1 percent to 12.27 euros. Buzzi Unicem SpA (BZU) : Italy’s second-biggest cement
maker was upgraded to “hold” from “sell” at Citigroup Inc.
Buzzi and Holcim Ltd remains Citigroup’s least preferred stocks
in the European industry. The shares rose 0.5 percent to 9.47
euros. Fiat SpA (F) : The carmaker plans to report first-quarter
results. Fiat said after Chief Executive Officer Sergio Marchionne met with labor leaders today in Turin that a legal
challenge by the FIOM union may impact the so-called Fabbrica
Italia investment plan for its plants in Italy. The shares
gained 1.8 percent to 6.29 euros. Prysmian SpA (PRY) : UniCredit is placing 7.4 percent of
Prysmian shares on behalf of Flint Investment BV. UniCredit is
selling the shares at 14.85 euros to 15.15 euros, terms of the
deal obtained by Bloomberg News show. The shares added 0.3
percent to 15.33 euros. Saipem SpA (SPM) : Europe’s largest oil-field services
contractor by market value plans to report first-quarter
results. The stock climbed 0.2 percent to 36.86 euros. Telecom Italia SpA (TIT) : Royal Bank of Scotland Group
Plc downgraded Italy’s biggest phone company to “hold” from
“buy.” The shares dropped 2.3 percent to 97.25 euro cents. To contact the reporters on this story:
Marco Bertacche in Milan at
[email protected] .
Francesca Cinelli in Milan at
[email protected] To contact the editor responsible for this story:
Angela Cullen at [email protected]
Andrew Rummer at [email protected] | |||||||
2011-04-19 00:00:00 UTC | Indonesian Millionaire Uno Sees More Buyouts as 3i Seeks Deal | http://www.bloomberg.com/news/2011-04-19/indonesian-millionaire-uno-sees-more-buyouts-as-3i-seeks-deal.html
| B y N e t t y I s m a i l | Sandiaga Uno, co-founder of one of
Indonesia ’s three biggest private-equity firms, said asset sales
by companies with diverse units will lead to more buyouts. “It’s not easy finding a deal in Indonesia, but I’m
predicting that there will be more buyout opportunities going
forward,” Uno, co-founder of Jakarta-based Saratoga Capital,
said in an interview in Singapore . “Conglomerates are selling
non-core assets.” There were only two private-equity transactions worth a
combined $1.2 billion in Indonesia last year, about 12 percent
of the amount invested in China , according to the Hong Kong-
based Centre for Asia Private Equity Research Ltd . The world’s
fourth-most populous nation is attracting more interest from
buyout firms including the U.K.’s CVC Capital Partners Ltd. and
London-based 3i Group Plc (III) as China’s and India ’s demand for
Indonesia’s resources boosts raw-material prices. “We have spent the last 12 months looking at Indonesia in
a serious and focused way,” said Mark Thornton, 3i’s head of
Southeast Asia . “There’s a lot of talk about the private-equity
opportunity in Indonesia. Still, the number of completed deals
is relatively small.” 3i, which is focusing on consumer companies, hopes to make
an investment in Indonesia this year and expects the number of
deals in the country to double, he said. Consumer confidence has
been buoyed by political stability under President Susilo
Bambang Yudhoyono not seen since the ouster of former dictator
Suharto in 1998. CVC CVC agreed last month to invest in PT First Media, a
Jakarta-based cable-television and Internet company. This was
the second investment by the buyout fund in the Lippo Group,
which owns property, media and retail assets, following CVC’s
purchase of the retail unit of PT Matahari Putra Prima in 2010. Indonesia’s larger family businesses are also competing
with the funds “to provide capital for the most interesting
transactions,” said Dennis Barsky, Singapore-based partner at
the law firm Jones Day , whose clients include private-equity
funds investing in Asia . The holding company for several listed units of Bakrie
Group, a palm oil-to-property empire controlled by Indonesian
billionaire politician Aburizal Bakrie and his brothers, said in
December 2009 that it planned to start new funds aimed at
foreign investors. “The local players have a significant advantage because of
their on the ground presence, the connections that they’ve
developed over long periods of time, their ability to conduct
effective due diligence, understanding the nuances of the market
and how things are being done there,” Barsky said. More Deals Saratago, which has made about $1 billion of investments in
Indonesia since it was set up in 1998, expects to “close two to
three deals” this year, said Uno. The 41-year-old, who founded
Saratoga with Edwin Soeryadjaya, the 13th richest man on
Forbes’s Indonesia list , said last year the firm plans to raise
$300 million for a new fund. Uno has a net worth of $795
million, according to the magazine. Northstar Pacific Partners, TPG’s Indonesian partner, and
Quvat Management Pte, run by a former executive of Farallon
Capital Management LLC’s Indonesian affiliate, are also raising
their third private-equity funds to invest in the country. “We will not compete on price basis because there’s no way
we can add value in the process,” Uno said. “We will focus
more on our strength, which is finding investments through our
network and relationships through proprietary deal origination
and sourcing.” Energy Industries Saratoga, which owns almost 20 percent of PT Adaro Energy,
Indonesia’s second-largest coal producer, plans to focus on
natural resources and the industries that support it, such as
mining services companies, Uno said. “For coal mines, the valuations are already very high,”
he said. “The Chinese and Indians have dominated this space and
it’s going to be very hard for financial investors to compete
with them.” Saratoga will also invest in infrastructure companies and
those that will benefit from growing consumption in Indonesia,
Uno said. Saratoga listed PT Tower Bersama Infrastructure, a
Jakarta-based telecommunication tower operator, in October. More than 7 million people jumped from the low-income
bracket to the middle class each year since 2003, Uno said,
citing the World Bank . Yudhoyono is targeting annual growth of
6.6 percent on average through the remainder of his term ending
in 2014. To contact the reporter on this story:
Netty Ismail in Singapore
[email protected] . To contact the editor responsible for this story:
Andreea Papuc at
[email protected] | |||||||
2011-04-19 00:00:00 UTC | Serb Opposition Leader on Hunger Strike Accepts Medical Help | http://www.bloomberg.com/news/2011-04-19/serb-opposition-leader-on-hunger-strike-accepts-medical-help.html
| B y G o r d a n a F i l i p o v i c | Tomislav Nikolic, the Serbian
Progressive Party leader who has been on hunger strike for three
days to appeal for early elections, accepted medical help today. “I am not suicidal and I have not decided to step out of
the Serbian Orthodox Church. Treat my strike as a fast,”
Nikolic told reporters from his hospital bed, adding that the
church has not understood “correctly” the motives for his
strike. The Serbian Patriarch said yesterday that food-and-water
strikes were non-Christian and called on Nikolic to end it. Nikolic, who wants elections to be held on Dec. 18, is the
former deputy leader of nationalist Serbian Radical Party, whose
leader Vojislav Seselj is standing trial at the United Nations
war crimes tribunal in The Hague. Serbia is trying to become an European Union candidate by
the end of the year and get a date for the start of membership
talks. The ruling Democratic Party of President Boris Tadic
wants elections once this goal has been achieved. Elections in
Serbia are due in March 2012. To contact the reporter on this story:
Gordana Filipovic in Belgrade at
[email protected] To contact the editor responsible for this story:
James M. Gomez at
[email protected] | |||||||
2011-04-19 00:00:00 UTC | United Business Media Says It May Relocate Tax Base to U.K. | http://www.bloomberg.com/news/2011-04-19/united-business-media-says-it-will-meet-full-year-forecasts.html
| B y R e n e e L a w r e n c e | United Business Media Ltd. (UBM) , the
publisher of InformationWeek, said it may relocate back to the
U.K. later this year following government proposals to cut
Britain’s corporate tax rate . “We are considering later in the year moving back to the
U.K.,” Chief Financial Officer Robert Gray said in a conference
call today. U.K. Chancellor George Osborne last month indicated in the
2011 budget that he would speed up a cut in the corporate tax
rate and plans to amend the tax on the overseas profit of U.K.
companies. WPP Plc, the world’s largest advertising company,
said last month it was also considering a move back to Britain
from Ireland. Both WPP and UBM moved their tax base from Britain
in 2008. UBM, the owner of PR Newswire, said it will meet its full-
year forecasts because of strong growth from its acquisitions
and events business. Revenue for the three months ended March 31 rose 14 percent
to 237.7 million pounds ($385.9 million) from 209.1 million
pounds a year earlier, the Dublin-based company said in a
statement. Adjusted operating profit grew 18.8 percent to 44.6
million pounds. UBM said it acquired two Indian events businesses and sold
print titles in France , the U.K. and the U.S. in the first
quarter. ‘Continued Momentum’ “Overall, we anticipate continued growth in profit largely
driven by a full year of contribution from our acquisitions and
continued momentum in our Events business,” David Levin, chief
executive officer, said in the statement. Revenue in the events business rose 34 percent to 84.1
million pounds. Net debt was 459 million pounds as at March 31. “Events business goes from strength to strength,
offsetting investment and disposals across other areas of the
business,” Patrick Yau, an analyst with Peel Hunt LLP said in a
note to investors today. Yau recommends buying the stock. UBM shares added 3.1 percent to 590.5 pence at the 4:30
p.m. close in London , giving the company a market value of 1.44
billion pounds. The stock lost 14 percent in value so far this
year. To contact the reporter on this story:
Renee Lawrence in London at
[email protected] To contact the editor responsible for this story:
Colin Keatinge at
[email protected] | |||||||
2011-04-19 00:00:00 UTC | European Coal Derivatives Fall 0.8%, Dropping for Second Day | http://www.bloomberg.com/news/2011-04-19/european-coal-derivatives-fall-0-8-dropping-for-second-day.html
| B y A l i s t a i r H o l l o w a y | Benchmark European coal derivatives
fell for a second day. Coal for delivery to Amsterdam, Rotterdam or Antwerp with
settlement next year dropped $1.05, or 0.8 percent, to $128.20 a
metric ton by 10:53 a.m. in London . The data are drawn from information supplied by ICAP Plc,
GFI Group Inc. (GFIG) , Spectron Group Ltd., Credit Suisse Group AG, IHS
McCloskey, Bloomberg, Tradition Financial Services and Tullett
Prebon Plc. To contact the reporter on this story:
Alistair Holloway in London at
[email protected] To contact the editor responsible for this story:
Claudia Carpenter at
[email protected] | |||||||
2011-04-19 00:00:00 UTC | Spanish Finance Minister Salgado Pledges ‘Another Quarter of Reforms’ | http://www.bloomberg.com/news/2011-04-19/spain-s-finance-minister-pledges-another-quarter-of-reforms-.html
| B y C h a r l e s P e n t y a n d M a n u e l B a i g o r r i | Spanish Finance Minister Elena Salgado pledged to push ahead with “another quarter of
reforms” as the government seeks to win the confidence of
investors. “We have improved a lot in terms of the perception of the
markets in recent months during which we have carried out big
reforms,” Salgado said in an interview with Cadena Ser radio
station today in Madrid . “This quarter will also be a quarter
for reforms.” The euro had its steepest decline in almost four months
yesterday and Greek and Portuguese bonds tumbled on speculation
Greece may default, sending risk premiums for Spanish debt
soaring. The “fundamentals” of the Spanish economy are
unchanged from last week and the government will press ahead
with cutting the deficit and forcing struggling lenders to
bolster capital, said Salgado. The spread between Spanish and German 10-year borrowing
costs narrowed to 228.5 basis points from 230.6 basis points
yesterday. The spread soared from 175 basis points a week ago
after comments by German officials speculating that Greece may
run out of alternatives to restructuring and the outcome of a
Finnish election underscored the risk that political opposition
to the European Union’s rescue of Portugal may grow. “We are on the path toward correcting these imbalances and
we have to keep on doing reforms, reducing our public deficit
and restructuring our financial system,” Salgado told Ser. “In
the end, it’s the fundamentals of the economy that the markets
judge.” To contact the reporter on this story:
Charles Penty in Madrid at
[email protected] ;
Manuel Baigorri at [email protected] To contact the editors responsible for this story:
Frank Connelly at [email protected] | |||||||
2011-04-19 00:00:00 UTC | J&J's Penalty on Risperdal Marketing Violations Postponed by State Judge | http://www.bloomberg.com/news/2011-04-19/j-j-judge-defers-ruling-on-risperdal-penalty-in-south-carolina.html
| B y D a v i d V o r e a c o s a n d G a r y H e n d e r s o n | A South Carolina judge today
deferred a decision on the penalties he will impose on a Johnson
& Johnson unit for violating consumer-protection laws in a case
in which the attorney general seeks billions of dollars. Circuit Judge Roger Couch ended a two-day hearing by saying
Attorney General Alan Wilson and lawyers for J&J’s Ortho-McNeil-
Janssen Pharmaceuticals unit had two more weeks to file written
arguments. Jurors ruled March 22 that Janssen sent doctors a
misleading letter in 2003 on the safety and effectiveness of its
antipsychotic drug Risperdal. The panel also said the letter and
the drug’s package label violated the South Carolina Unfair
Trade Practices Act. “I obviously have received a great deal of information,”
Couch said in the Court of Common Pleas in Spartanburg. “I’ll
report to you once I have my findings.” Lawyers for New Brunswick , New Jersey-based Janssen urged
Couch to impose minimal damages. They said the letter sent to
7,194 doctors in South Carolina wasn’t untrue, and that no
company had ever faced “substantial penalty” for a package
insert approved by the U.S. Food and Drug Administration. “The question is whether anybody was hurt,” Janssen
lawyer Edward Posner argued today to the judge. “There’s no
evidence that anybody was deceived, or that a doctor, patient or
the state was harmed by the violation.” $5,000 Per Violation An attorney for South Carolina, Donald Coggins, urged the
judge to impose the maximum penalty of $5,000 for each of
thousands of violations. Those violations, the state argues,
include as many as 722,000 Risperdal prescriptions written,
183,144 calls on doctors by Janssen sales representatives, and
496,565 sample boxes distributed. “It is the public policy of the state of South Carolina
that we don’t want companies coming in and engaging in unfair
and deceptive trade practices,” he said. “For that law to have
any teeth, the court needs to impose penalties that are
significant and substantial. To do less, would not only make a
mockery of this proceeding, it allow this behemoth to laugh at
us.” Risperdal’s global sales peaked at $4.5 billion in 2007 and
declined after the company lost patent protection. It generated
$3.4 billion in sales in 2008, or 5.4 percent of J&J’s total
sales, according to company filings. Sales of the drug fell to
$527 million last year, according to a January earnings report. Risperdal Consta, the long-acting version of the
antipsychotic drug, generated $1.5 billion in sales last year
for Johnson & Johnson (JNJ) , officials said this month. Third State Trial The case is the third of about 10 state lawsuits to be
considered by jurors over J&J’s Risperdal marketing campaigns.
In June, J&J won dismissal of Pennsylvania ’s suit alleging the
company hid the drug’s diabetes risk and tricked regulators into
paying millions more than they should have for the medicine. A Louisiana jury ordered the drugmaker in October to pay
$257.7 million in damages to that state for making misleading
claims about Risperdal’s safety. A judge later added $73 million
in legal fees to the award. A West Virginia judge in a 2009 non-jury trial awarded
$3.95 million, finding the company misled doctors about the
risks and benefits of Risperdal. The state dropped its Risperdal
claim after J&J won an appeal, company officials said in
February. The case is State of South Carolina v. Janssen
Pharmaceuticals, 2007-CP-42-1438, Circuit Court for Spartanburg
County, South Carolina (Spartanburg). To contact the reporters on this story:
David Voreacos in Washington at
[email protected] ;
Gary Henderson in Spartanburg, South Carolina,
at [email protected] . To contact the editor responsible for this story:
Michael Hytha at
[email protected] | |||||||
2011-04-19 00:00:00 UTC | Solar Millennium Surges After $2.1 Billion U.S. Loan Guarantees Approved | http://www.bloomberg.com/news/2011-04-19/solar-millennium-surges-after-2-1-billion-u-s-loan-guarantees-approved.html
| B y S a l l y B a k e w e l l | Solar Millennium AG (S2M) rose as much as
11 percent today after the U.S Department of Energy offered a
$2.1 billion loan guarantee that will underpin financing for two
solar thermal plants in Blythe, California . The guarantees, offered as conditional commitment by U.S.
Secretary of Energy Steven Chu, are the precondition for
financing about 75 percent of the construction costs for the
first two of four planned solar-thermal plants, Solar Millennium
said in a statement last night. The Erlangen, Germany-based solar thermal technology
company surged to as much as 21.65 euros a share, the highest
since Dec. 16. “In times of restrictive public budgets, I am particularly
pleased that the U.S. government is so clearly committed to the
energy turnaround,” Christoph Wolff, chief executive officer of
Solar Millennium, said in the statement. The Blythe project uses mirrors to concentrate the sun’s
energy rather than solar panels that convert light directly into
electricity. It’s the world’s largest solar power plant project,
according to Solar Millennium. The company expects to complete the entire financing late
in the summer after negotiations with institutional investors,
the company said in the statement. The power plants each have a capacity to produce 242
megawatts and will cost about $2.8 billion in total, according
to the statement. Solar Trust of America LLC, Solar Millennium’s
Oakland, California-based unit, started building the parabolic
trough power plants Blythe 1 and 2, at the end of last year. To contact the reporter on this story:
Sally Bakewell in London at
[email protected] To contact the editor responsible for this story: | |||||||
2011-04-19 00:00:00 UTC | Ukrainian Sunflower-Oil Production Rises, UkrAgroConsult Says | http://www.bloomberg.com/news/2011-04-19/ukrainian-sunflower-oil-production-rises-ukragroconsult-says.html
| B y K a t e r y n a C h o u r s i n a | Ukrainian sunflower-oil production
rose 14 percent from a year earlier to 302,000 metric tons in
March, UkrAgroConsult said. Output gained 6.7 percent from February’s 283,000 tons, the
Kiev-based researcher said in an e-mailed statement today. Production of the oil climbed 12 percent from a year
earlier to 1.95 million tons in the seven months through March,
UkrAgroConsult said. Sunflower-oil exports gained 19 percent
from a year earlier to 1.66 million tons. Outbound shipments of the oil jumped 56 percent from
February to 310,800 tons in March, the researcher said. To contact the reporter on this story:
Kateryna Choursina in Kiev at
[email protected] To contact the editor responsible for this story:
Claudia Carpenter at
[email protected] | |||||||
2011-04-19 00:00:00 UTC | State Street Leads Custody Banks on Fee Income as BNY Mellon Profit Misses | http://www.bloomberg.com/news/2011-04-19/state-street-leads-custody-banks-on-fee-income-as-bny-mellon-profit-misses.html
| B y C h a r l e s S t e i n a n d C h r i s t o p h e r C o n d o n | State Street Corp. (STT) led custody
banks reporting higher fee income in the first quarter as
acquisitions and the stock market rally boosted assets. Fee revenue at the third-largest custody bank rose 16
percent from a year earlier to $1.79 billion, State Street said
today in a statement from Boston. Bank of New York Mellon Corp. (BK) ,
the largest custody bank, said fee income increased 12 percent
to $2.83 billion. Northern Trust Corp. (NTRS) , the fourth-largest of
the banks, said non-interest income, a figure consisting mainly
of fee revenue, declined 0.6 percent to $663.5 million. “Both State Street and Bank of New York were adversely
affected by low interest rates, but State Street seems to have
had the better quarter,” said Gerard Cassidy , an analyst with
RBC Capital Markets in Portland , Maine . State Street benefited
from strength in its asset-management business while BNY Mellon
was hurt by foreign exchange and securities lending , he said. BNY Mellon and State Street together spent at least $4.4
billion on acquisitions over the past year to add assets and
expand abroad as interest rates near zero erode income from
money funds, securities lending and fixed-income investments.
Joseph Hooley, 54, who took over as State Street’s chief
executive officer a year ago, said acquisitions in Italy and the
U.K. last year have exceeded targets. State Street rose $1.02, or 2.3 percent, to $45.69 at 4:15
p.m. in New York Stock Exchange composite trading. BNY Mellon
declined 85 cents, or 2.9 percent, to $28.35. Northern Trust
dropped $2.73, or 5.3 percent, to $48.67 in Nasdaq Stock Market
trading. Beating Estimates Net income at State Street fell to $466 million, or 93
cents a share, from $492 million, or 99 cents, a year earlier,
when earnings were boosted by the sale of securities the bank
had previously written down. On an operating basis, profit rose
19 percent to $439 million, or 88 cents a share, beating the 86-
cent average estimate of 22 analysts surveyed by Bloomberg. BNY Mellon reported a 12 percent increase in first-quarter
net income to $625 million, or 50 cents a share, from $559
million, or 46 cents, a year earlier. Analysts had expected the
New York-based company to earn 56 cents a share, according to
the average of 13 estimates. Northern Trust said profit in the three months through
March fell 3.9 percent as low interest rates reduced lending and
money-market revenue. The Chicago-based firm is the third-
largest independent custody bank. JPMorgan Chase & Co. in New
York has a custody business that’s the world’s second-largest. ‘Exceeding the Goals’ Custody banks earn fees for keeping records, tracking
performance and lending securities to institutional investors
such as mutual funds, pensions and hedge funds . U.S. firms have
expanded in Europe , where the market is more fragmented and
banks have been selling custody units to strengthen their
balance sheets. State Street added the securities-servicing unit of Italy’s
Intesa Sanpaolo SpA for 1.28 billion euros ($1.82 billion) in
May, Mourant International Finance Administration in the U.K.’s
Channel Islands in April of last year, and Bank of Ireland’s
investment-management business in January of this year. “The performances of our securities servicing business
that we acquired from Intesa Sanpaolo and the acquired Mourant
business are exceeding the goals we set,” Hooley said in the
statement. “We have added new clients in both of these
businesses.” Assets Rise BNY Mellon bought Germany ’s BHF Asset Servicing GmbH for
253 million euros in August, and acquired Pittsburgh-based PNC
Financial Service Group Inc.’s investment-servicing business for
$2.31 billion in July. Assets under custody and administration at BNY Mellon rose
14 percent to a record $25.5 trillion, helping offset earnings
from money funds and fixed-income investments that have been
hurt by interest rates near zero. Assets under management rose
11 percent to $1.23 trillion. State Street had $22.6 trillion
under custody at the end of the quarter, an increase of 19
percent. Money the firm invests for clients rose 7.7 percent to
$2.12 trillion. The Standard & Poor’s 500 Index, the benchmark for U.S.
stocks, has gained 9.6 percent in the past year, helping lift
assets and fees. BNY Mellon in March hired Jack Malvey, a former Lehman
Brothers Holdings Inc. analyst, as chief global markets
strategist. It named BlackRock Inc.’s Curtis Arledge as chief
executive officer of its asset-management unit in August,
filling a role left vacant when Ronald O’Hanley departed to
become president of asset management at Boston-based Fidelity
Investments . Litigation ‘Risk’ State Street’s Hooley and BNY Mellon Chairman and Chief
Executive Officer Robert P. Kelly said the firms’ foreign
exchange revenue hadn’t been negatively affected by lawsuits on
behalf of some public pension funds. “We’ve seen stability in the revenue and, in the pricing,
stability has been there as well,” Hooley said today in an
interview. Officials from states including California and Arkansas
have sued the banks claiming they defrauded pension funds by
overcharging for some foreign-exchange transactions. California
is suing State Street for more than $200 million in alleged
overcharges and penalties. Glenn Schorr , a Nomura Holdings Inc. analyst, said in March
the scrutiny stemming from the lawsuits could force custody
banks to lower their charges regardless of the legal outcomes. Dividends Raised “We have seen very little impact from the recent
scrutiny,” Kelly said today during a conference call with
analysts. He added that litigation “is going to continue to be
a risk.” BNY Mellon has denied the allegations and said it will
defend against the suits. State Street settled one suit from the
state of Washington for $11.7 million in October. The company
said contracts with the remaining plaintiffs were
“significantly different” and that it will defend against
those suits. Foreign exchange revenue at BNY Mellon was $173 million,
down 1 percent from the same quarter a year ago. Kelly blamed
the decline on diminished volatility in currencies. State Street’s foreign exchange revenue increased 19
percent from a year earlier “primarily due to changes in
product mix,” the bank said in its earnings announcement
without giving a dollar figure. BNY Mellon and State Street raised their dividends last
month and announced share buybacks after the Federal Reserve
approved the measures following a review of banks’ financial
strength. Both cut their payouts to investors in 2009 after
plunging financial markets hurt earnings. To contact the reporters on this story:
Charles Stein in Boston at
[email protected] ;
Christopher Condon in Boston at
[email protected] To contact the editor responsible for this story:
Christian Baumgaertel at
[email protected] | |||||||
2011-04-19 00:00:00 UTC | Bulls Beat Pacers, Heat Down 76ers to Take 2-0 Leads in NBA Playoff Series | http://www.bloomberg.com/news/2011-04-19/heat-beat-76ers-94-73-to-take-2-0-lead-in-nba-first-round-playoff-series.html
| B y E r i k M a t u s z e w s k i | The Chicago Bulls used a late rally
to beat the Indiana Pacers 96-90, while the Miami Heat never
trailed in routing the Philadelphia 76ers 94-73 in their
National Basketball Association playoff series. The Bulls and Heat, the top two seeds in the Eastern
Conference, hold 2-0 leads in their best-of-seven first-round
series. “We just wanted to protect home court,” LeBron James , who
led the Heat with 29 points last night, said in a televised
interview. “We did what we’re supposed to.” The New York Knicks visit the Boston Celtics in Game 2 of
their Eastern Conference series tonight after losing the opener
87-85 on Ray Allen’s 3-pointer with 11 seconds left. The Knicks may be without point guard Chauncey Billups
because of a knee injury suffered during Game 1 in Boston. “I’m disappointed. This is the worst time, getting hurt in
the first round of the first game of a tough series,” Billups
told reporters after sitting out yesterday’s practice. “I know
the team really needs me.” The Orlando Magic host the Atlanta Hawks in Game 2 tonight
after losing Game 1 at home 103-93 three days ago. The Portland Trail Blazers visit the Dallas Mavericks in
today’s final game. The Mavericks won the opener of the Western
Conference series. Rose Lifts Bulls Derrick Rose scored 14 of his game-high 36 points in the
fourth quarter last night at the United Center in Chicago as the
Bulls pulled away from the Pacers, who were the only team to
make the playoffs with a losing record. “We knew it was going to be tough,” Rose said in a
televised interview. “We’re just happy that we won.” Carlos Boozer added 17 points and 16 rebounds for Chicago,
which had the NBA’s best record during the regular season. The Bulls, who have won 11 straight games, made their final
15 free throws and outscored the Pacers 29-23 in the fourth
quarter. They took the lead for good on a 3-point play by Rose
with 5:43 remaining. Danny Granger scored 19 points to lead
Indiana. The best-of-seven series moves to Indianapolis for Game 3
on April 21. “We’re standing toe to toe with this team. I’m very proud
of our guys,” Pacers coach Frank Vogel said during a news
conference. “We’ll take it back to Indy and see what happens.” At AmericanAirlines Arena in Miami, the Heat rolled to the
first win of more than 10 points this postseason. Chris Bosh
added 21 points and 11 rebounds for Miami, while Dwyane Wade
played through migraine headaches to score 14 points. Heat Roll to Win The Heat, the second favorite to win the NBA title after
the Los Angeles Lakers , outscored the 76ers 30-18 during the
second quarter to open a 49-31 halftime lead. Miami stretched
its advantage to 28 points during the fourth quarter and limited
the seventh-seeded 76ers to 34 percent shooting. “If they’re playing on top of their game, they’re a better
team,” 76ers coach Doug Collins said. “That doesn’t mean we’re
not going to play, compete and fight. It’s going to be very
difficult to beat them.” Miami has won nine straight games against Philadelphia
dating back to the 2009-10 season. The teams shift to Philadelphia for the next two games,
with Game 3 scheduled for April 21. To contact the reporter on this story:
Erik Matuszewski in New York at
[email protected] To contact the editor responsible for this story:
Michael Sillup at
[email protected] | |||||||
2011-04-19 00:00:00 UTC | RBA to Look Through Higher Inflation, Slower Economic Growth, Minutes Show | http://www.bloomberg.com/news/2011-04-19/rba-to-look-through-inflation-slower-growth-minutes-show-1-.html
| B y M i c h a e l H e a t h | The Reserve Bank of Australia
viewed its policy setting as “appropriate,” saying it will
look through higher inflation and slower growth stemming from
natural disasters, minutes of its April 5 meeting showed. “Headline inflation was likely to be quite high in the
March quarter, while GDP would be held down, to a greater
extent than earlier assumed,” the bank said in the minutes
released in Sydney today. In setting interest rates , “the
board would look through these fluctuations,” it said. Central bank Governor Glenn Stevens has held rates for
four meetings at 4.75 percent after seven increases in the
overnight cash rate target from October 2009 to November last
year. Tropical Cyclone Yasi in February tore through sugar-
and banana-producing areas, following two months of flooding
in Queensland state that shut mines and wiped out crops. “The extreme weather events across Queensland and
elsewhere were complicating the interpretation of the
economic data for the March quarter,” policy makers said in
the minutes. Gross domestic product advanced 0.7 percent in
the three months through December from the third quarter,
when it rose a revised 0.1 percent. The trade balance unexpectedly swung to a deficit in
February for the first time in almost a year as the natural
disasters cut mining shipments and higher fuel prices boosted
imports, a government report showed this month. Australian Dollar The Australian dollar was little changed, trading at
$1.0486 at 11:31 a.m. in Sydney from $1.0493 before the
minutes were released. Australia is undergoing a boom in resource investment as
mining and energy companies boost output to meet demand from
China and India . That has spurred hiring and helped bolster
demand for Australia’s dollar, the world’s fifth-most traded
currency, which touched a record $1.0584 on April 8. Australian employers added more workers than economists
forecast in March, led by hiring in the mineral- and energy-
rich states of Western Australia and Queensland. The number of people employed rose by 37,800, rebounding
from a revised decline of 8,600 in February, a government
report showed April 7. The jobless rate fell to 4.9 percent,
matching a two-year low set in December. Jobs Market “Forward-looking indicators pointed to a continuation
of employment growth over the months ahead,” policy makers
said. “Liaison with firms suggested that wage growth was
increasing in mining-related industries and some skilled
occupations, though pressures in the labor market had not
become widespread.” The central bank in February raised its forecast for
2011 economic growth to 4.25 percent, from a November
prediction of 3.75 percent, saying flood rebuilding will
accelerate in the second half. Policy makers expect annual growth will be boosted by
projects such as BG Group Plc’s $15 billion liquefied natural
gas venture in Queensland, generating 5,000 construction jobs. BG, Chevron Corp. (CVX) , Royal Dutch Shell Plc and
ConocoPhillips are among energy companies investing about
A$200 billion in proposed LNG projects in Australia. The outlook for global growth has been clouded by unrest
in Libya that spurred oil prices and the radiation crisis in
Japan , Australia’s second-largest trading partner. Japan Disruption “In the very short term, it was likely there would be
some disruption to exports of goods and services to Japan,
though, beyond this, the rebuilding effort and a possible
increase in use of non-nuclear forms of energy could provide
a boost to Australian exports,” policy makers said. Interest rates on “housing and business loans were a
little above average levels,” policy makers said. “Given
the outlook for the economy, and in particular the high level
of the terms of trade and the prospective further large
increase in investment, members considered that this stance
remained appropriate so as to ensure that the medium-term
inflation outlook remained consistent with the target.” The bank aims to keep inflation between 2 percent and 3
percent and the Australian currency’s strength has helped
slow parts of the economy. Traders see a less than 50 percent
chance Stevens will increase the benchmark rate by a quarter
percentage point this year, bank bill futures showed before
the minutes were released. “Outside the resources sector, growth in investment was
expected to be relatively modest,” policy makers said. “In
contrast, with office vacancy rates in the two largest cities
projected to fall to quite low levels, a pick-up in
commercial property construction was expected over the next
couple of years from the current low levels.” To contact the reporter for this story:
Michael Heath in Sydney at
[email protected] To contact the editor responsible for this story:
Stephanie Phang at
[email protected] | |||||||
2011-04-19 00:00:00 UTC | Malawi's Government Summons U.K. High Commissioner Over Leaked Criticism | http://www.bloomberg.com/news/2011-04-19/malawi-s-government-summons-u-k-high-commissioner-over-leaked-criticism.html
| B y F r a n k J o m o | Malawi ’s foreign affairs
minister summoned Fergus Cochrane-Dyet, the U.K. High
Commissioner in the country, because of comments contained
in a leaked cable to his government, said Lewis Kulisewa, a
spokesman for the commission. Cochrane-Dyet was called in to see Malawi’s Foreign
Minister Etta Banda yesterday after the cable was published
in the Blantyre-based Nation newspaper on April 16,
Kulisewa said in an e-mailed response to question today.
Cochrane criticized Malawi’s president as being autocratic
in the diplomatic cable sent to U.K. Foreign Secretary
William Hague , according to the Nation. The U.K. warned Malawi that there will be consequences
if its envoy is asked to leave. “If the government of Malawi pursued such action
there would likely to be consequences affecting the full
range of bilateral issues,” Geoffrey Adams, acting
permanent under secretary for the foreign and commonwealth
office, said in an e-mailed statement today. To contact the reporter on this story:
Frank Jomo in Blantyre at
[email protected] To contact the editor responsible for this story:
Gordon Bell at
[email protected] | |||||||
2011-04-19 00:00:00 UTC | NewPage Bonds Continue Slide After Coated-Paper Maker Replaces CFO Short | http://www.bloomberg.com/news/2011-04-19/newpage-bonds-continue-slide-after-coated-paper-maker-replaces-cfo-short.html
| B y K r i s t a G i o v a c c o a n d T i m C a t t s | Bonds of NewPage Corp. continued to
decline after the coated-paper maker replaced its chief
financial officer last week. Its $806 million of 10 percent notes due in May 2012 fell
three cents to 56.5 cents on the dollar as of 8:50 a.m. in New
York , according to Trace, the bond-price reporting system of the
Financial Industry Regulatory Authority. The debt has declined from 61 cents on the dollar on April
15, when the Miamisburg, Ohio-based company said that Curtis
Short, its controller and chief accounting officer, will become
CFO on an interim basis. To contact the reporter on this story:
Krista Giovacco in New York at
[email protected] To contact the editor responsible for this story:
Pierre Paulden at
[email protected] | |||||||
2011-04-19 00:00:00 UTC | Arsenal’s Usmanov Increases Stake After Kroenke Takes Control of Club | http://www.bloomberg.com/news/2011-04-19/arsenal-s-usmanov-increases-stake-after-kroenke-takes-control-of-club.html
| B y T a r i q P a n j a | Russian billionaire Alisher Usmanov
has continued to buy shares in Arsenal even after rival investor
Stan Kroenke took control of the 13-time English soccer
champion. Usmanov, a metals magnate with an estimated $18 billion
fortune, bought six shares for a total of 70,950 pounds ($116,000),
according to a statement released by the Regulatory News Service
today. The 57-year-old last week told Bloomberg News he wouldn’t
sell his 27 percent holding to Kroenke. The American took his
stake to 63 percent by agreeing to buy shares from other
directors, triggering a mandatory takeover bid. Kroenke offered 11,750 pounds a share for the remaining
stock in the north London-based team, valuing it at about 731
million pounds. That’s the share price he agreed to pay for the
combined 32 percent holdings of Nina Bracewell-Smith and Danny Fiszman, a director who died April 13. “I’m not going to sell,” Usmanov said in the telephone
interview from Moscow last week. “I love Arsenal, that’s why
I’m a shareholder.” The Russian has been vying with sports investor Kroenke for
control of the Gunners for the past four years. He owns two
boxes at the club’s 60,000-capacity Emirates Stadium and has
four seats in the directors’ box. While billionaire Kroenke was
welcomed onto the board in 2008, the Russian doesn’t have a
seat. Usmanov’s holding allows him some control over the club’s
finances and organizational structure. He first took a stake in
the club in 2007, when he bought 15 percent for 75 million
pounds from former board member David Dein. To contact the reporter on this story:
Tariq Panja in the London newsroom at
[email protected] To contact the editor responsible for this story:
Chris Elser at
[email protected] . | |||||||
2011-04-19 00:00:00 UTC | France Gasoline Prices Reached Record Last Week, La Tribune Says | http://www.bloomberg.com/news/2011-04-19/france-gasoline-prices-reached-record-last-week-la-tribune-says.html
| B y M a t t h e w C a m p b e l l | Gasoline prices in France reached a
record in the middle of last week, exceeding a previous high
just a week earlier, La Tribune reported, citing figures from
the Direction Generale de l’Energie et du Climat. The average
price of a liter of “super 95” unleaded gasoline reached 1.54
euros ($2.19), compared with 1.53 euros a week earlier, the
newspaper said. To contact the reporter on this story:
Matthew Campbell in Paris at
[email protected] To contact the editor responsible for this story:
Vidya Root at
[email protected] | |||||||
2011-04-19 00:00:00 UTC | Goldman Sachs Reduces First-Quarter Compensation Pool to $147,825 a Person | http://www.bloomberg.com/news/2011-04-19/goldman-sachs-first-quarter-pay-pool-falls-to-147-825-a-person.html
| B y C h r i s t i n e H a r p e r | Goldman Sachs Group Inc. (GS) , the
fifth-biggest U.S. bank by assets, set aside $5.23 billion to
pay employee salaries, bonuses and benefits in the first
quarter, down 5 percent from a year earlier. The compensation and benefits expense, the firm’s biggest
cost, is enough to pay each employee $147,825 for the quarter,
down 11 percent from $165,952 a year earlier, New York-based
Goldman Sachs said today in a statement. The bank employed
35,400 people at the end of March, up 7 percent from a year
earlier even after the firm cut 300 jobs in the first quarter. Goldman Sachs has reduced pay since 2007, when Chairman and
Chief Executive Officer Lloyd C. Blankfein was awarded a record
$67.9 million bonus and the firm’s average compensation per
employee was $661,490. Last year average pay per employee
dropped 14 percent to $430,700 as the firm set aside 39 percent
of revenue for compensation. The ratio of compensation to
revenue was 44 percent in the first quarter, up from 43 percent
a year earlier. JPMorgan Chase & Co. (JPM) , the second-biggest U.S. bank by
assets, set aside $3.29 billion in the quarter to compensate
employees at its investment bank, or an average $124,300 per
person, according to the New York-based bank’s earnings report
last week. Blankfein, 56, was awarded $18 million in stock and cash
bonuses for his 2010 performance, double his $9 million all-
stock award for 2009. Blankfein and six other senior officers
received no bonuses for 2008. Wall Street firms typically set aside a portion of revenue
throughout the year for year-end bonuses, enabling the company
to increase or decrease pay in line with performance. Average
pay is derived by dividing total compensation and benefits by
the number of employees and doesn’t represent what workers
actually receive. The reduction in compensation in the first quarter was less
than the 7 percent decline in revenue from a year earlier,
according to Goldman Sachs’s earnings statement. The firm’s
total operating expenses rose 3 percent as non-compensation
costs surged 23 percent from the first quarter of 2010. To contact the reporter on this story:
Christine Harper in New York at
[email protected] To contact the editor responsible for this story:
David Scheer at [email protected] . | |||||||
2011-04-19 00:00:00 UTC | LG Display Shares Advance on Earnings Outlook, Narrower-than-Expected Loss | http://www.bloomberg.com/news/2011-04-19/lg-display-shares-advance-on-earnings-outlook-narrower-than-expected-loss.html
| B y J u n Y a n g a n d S a e r o m i S h i n | LG Display Co., the world’s second-
largest maker of flat screens, rose the most in more than two
years after reporting a loss that was smaller than analysts’
estimates and forecasting a profit this quarter. LG Display gained 6.9 percent to 38,600 won at the close of
trading in Seoul, the biggest jump since January 2009. The stock
was the third-best performer on the MSCI Asia Pacific Index. The maker of liquid-crystal displays for Apple Inc. (AAPL) ’s iPad,
may post a profit in the second quarter, helped by demand for
panels in tablet computers and 3-D TVs, the company said
yesterday after announcing its first-quarter results. LG Display
aims to supply at least half of all 3-D TVs sold globally this
year, betting on demand for its technology. “The worst is behind us,” Im Jeong Jae, a Seoul-based
fund manager at Shinhan BNP Paribas Asset Management Co., which
oversees $30 billion. “As the outlook is expected to improve
from the second quarter, investors are scrambling to buy the
shares.” The company had a net loss of 115.4 billion won ($106
million) in the three months ended in March, LG said yesterday.
That compared with an average estimate for a loss of 208.4
billion won in a Bloomberg survey of 12 analysts before the
announcement. Sales fell 8.7 percent to 5.37 trillion won. LG Display may post a profit of 149 billion won in the
current quarter and boost that to 549 billion won in the third
quarter, according to the average of 18 analysts’ estimates
compiled by Bloomberg. LG Versus Samsung While panels for TVs accounted for less than half the
overall sales in the first quarter, falling from 54 percent a
year ago, demand for 3-D TVs will help boost profit, Chief
Financial Officer James Jeong said. LG aims to account for 50
percent to 70 percent of the 25 million to 30 million 3-D TVs
expected to be sold worldwide this year, he said. LG is promoting a technology called Film Patterned
Retarder, or FPR, which uses polarized glasses to view 3-D
images with visual information sent to both eyes simultaneously. It offers an alternative to the shuttered-glasses approach
used by Samsung Electronics Co., which produces a 3-D image by
sending visual information to each eye sequentially. LG said its
polarized glasses will be lighter and more comfortable to wear,
with less eye strain, than shuttered glasses. To contact the reporters on this story:
Jun Yang in Seoul at
[email protected]
Saeromi Shin in Seoul at
[email protected] To contact the editor responsible for this story:
Young-Sam Cho at
[email protected] . | |||||||
2011-04-19 00:00:00 UTC | Apple Releases Some Preliminary Sales for iPad in Lawsuit | http://www.bloomberg.com/news/2011-04-19/apple-releases-preliminary-sales-for-ipad-in-lawsuit-correct-.html
| B y A d a m S a t a r i a n o | Apple Inc. (AAPL) , scheduled to disclose
financial results tomorrow, released some preliminary sales
numbers for the iPad tablet computer and iPhone in a lawsuit
last week. In an intellectual property complaint Apple filed on April
15 against Samsung Electronics Co., the company said it had sold
more than 19 million iPads by March 2011. Based on unit sales in
earlier quarters, that indicates at least 4.21 million iPads
sold during the fiscal second quarter, less than the 6.1-million
average estimate of 13 analysts compiled by Bloomberg. Apple has had trouble keeping the iPad 2 in stock at stores
since it was released on March 11. At the same time, iPhone
sales may have exceeded estimates, based on figures in the
lawsuit. The complaint says Apple had sold more than 108 million
iPhones by March, which would mean at least 18 million sold in
the second quarter, more than the 16.3 million estimated by
analysts. Apple also said it had sold more than 60 million of
its iPod Touch media players. The lawsuit doesn’t say when in March the sales figures run
through. The company’s second quarter ended on March 26. Steve Dowling, a spokesman for Cupertino, California-based Apple,
declined to comment. Apple reports financial results tomorrow
after U.S. markets close. The computer maker’s iPhone became available on the Verizon
Wireless network for the first time during the second quarter.
In the quarter, analysts predict Apple will report profit of
$5.03 billion on sales of $23.4 billion, according to the
average of 35 estimates compiled by Bloomberg. Apple rose $6.01, or 1.8 percent, to $337.86 at 4 p.m. New
York time in Nasdaq Stock Market trading. The shares have risen
4.7 percent this year. The sales figures in the lawsuit were earlier reported by
the website Asymco.com . To contact the reporter on this story:
Adam Satariano in San Francisco at
[email protected] To contact the editor responsible for this story:
Tom Giles at [email protected] . | |||||||
2011-04-19 00:00:00 UTC | LG Chem Profit Beats Estimates as Asian Recovery, Japan Quake Boost Demand | http://www.bloomberg.com/news/2011-04-19/lg-chem-profit-beats-estimates-as-asian-recovery-japan-quake-boost-demand.html
| B y S a n g i m H a n | LG Chem Ltd. (051910) , South Korea ’s biggest
chemicals maker, posted a 27 percent gain in first-quarter
profit, beating estimates, as economic recovery in Asia and an
earthquake in Japan boosted demand. Net income rose to 656.6 billion won ($601 million) in the
three months ended March 31 from 517.7 billion won a year
earlier, the Seoul-based company said in a regulatory filing
today. That compares with the mean estimate of 585 billion won
of 11 analysts in a survey compiled by Bloomberg. Sales gained
24 percent to 5.49 trillion won. Orders from customers in Asia, including China , the world’s
fastest-growing major economy, boosted South Korean exports of
materials used to make plastics and synthetic rubber by 24
percent last month. The March 11 magnitude-9 temblor that
disrupted operations at Japanese chemical producers also helped
increase demand. “The earthquake in Japan is spurring demand for substitute
chemicals at a time when consumption in the region, driven by
China, is already strong,” said Lee Hee Cheol, an analyst at HI
Investment Securities Co. “That’s helping to lift LG Chem’s
petrochemical margins to near a 12-month peak.” Petrochemical margins at LG Chem reached $579 a metric ton
in the first quarter, compared with $250 a ton on average to
break even in the past 10 years, Hwang Kyu Won, an analyst at
Tong Yang Securities Inc., wrote in a report on April 6. LG Chem’s petrochemical division posted a 735.6 billion-won
operating profit in the quarter, up 50 percent from a year
earlier, according to the filing. Shares of LG Chem rose 1.4 percent to close at a record
520,000 won in Seoul trading, before the earnings announcement.
The benchmark Kospi stock index fell 0.7 percent. Operating Profit Rises “The petrochemical division will sustain high
profitability in the second quarter as regular maintenance at
its rivals will limit supply while demand for chemicals is
rising,” Chief Executive Officer Kim told investors in Seoul. Overall operating profit, or sales minus the cost of goods
sold and administrative expenses, reached 835.3 billion won in
the first quarter, up from 652.4 billion won a year earlier. Operating profit at the electronics division, which makes
batteries for notebooks, cell phones and electric cars, dropped
36 percent to 112.7 billion won. The division will slowly
recover in the coming quarters, Kim said. The chemicals maker finished building a plant this month
that can supply lithium-ion batteries for 100,000 electric cars
a year. Sales from car batteries may exceed the company’s
estimates by 20 percent this year, Kim said, without giving a
value. Revenue may surpass 1 trillion won next year, he said. Polysilicon Business LG Chem is preparing to develop its polysilicon business
independently, Kim said. “We are confident we can develop it with our own
technology, and at low cost, to compete with existing players,”
according to Kim. “We have potential buyers who have signed
memorandums of understanding.” The company will hold a board meeting in the first half to
discuss a plan to build a plant to make polysilicon, used in
solar cells, with a goal of starting production in the second
half of 2013, Kim said. LG Chem will join chemicals producers including Hanwha
Chemical Corp. in betting orders for solar-power equipment will
gain as governments take steps to cut carbon emissions blamed
for global warming. Kim said the polysilicon plant may have an
annual capacity of 5,000 to 10,000 metric tons. To contact the reporter on this story:
Sangim Han in Seoul at
[email protected] To contact the editor responsible for this story:
Amit Prakash at
[email protected] . | |||||||
2011-04-19 00:00:00 UTC | Swiss Stocks Increase; Novartis, Richemont, Swatch, Synthes Shares Advance | http://www.bloomberg.com/news/2011-04-19/swiss-stocks-increase-novartis-richemont-swatch-synthes-shares-advance.html
| B y G i l e s B r o o m | Swiss stocks advanced, rebounding
from the biggest drop in more than a month, as drugmaker
Novartis AG (NOVN) climbed on better-than-estimated earnings. Synthes Inc. (SYST) , the biggest maker of devices to treat bone
fractures and trauma, rose for a tenth day amid speculation that
Johnson & Johnson will buy the company. Cie. Financiere
Richemont SA, the world’s largest jewelry maker, gained after
LVMH Moet Hennessy Louis Vuitton SA (MC) ’s sales beat estimates. The Swiss Market Index (SMI) of the biggest and most actively
traded companies increased 1.3 percent to 6,326.65 at the 5:30
p.m. close in Zurich after sliding 2.4 percent yesterday. The
broader Swiss Performance Index added 1.2 percent. “So far the first-quarter earnings have been fine,” said
Marco Bider, a fund manager at Banque CIC in Basel, Switzerland .
“Two of the three big companies in Switzerland have published
positive figures. Earnings will be less of a surprise if you
compare with the last quarter of 2010.” Novartis jumped 3.5 percent to 50.30 Swiss francs. The
Basel, Switzerland-based company said first-quarter profit fell
6 percent as sales of its influenza vaccine slumped following
the end of the flu pandemic last year. Novartis’s $2.77 billion
net income and $14 billion sales still beat the average estimate
of eight analysts surveyed by Bloomberg. Synthes gained 0.6 percent to 147.40 francs. The shares
reached their highest price in more than two years yesterday
after the company confirmed it has held talks with J&J about a
takeover. Synthes has also talked to at least one other company,
Tages-Anzeiger reported today. Richemont, Swatch Rise Richemont, the maker of Cartier watches, rallied 3.7
percent to 52.25 francs as LVMH, the world’s largest luxury-
goods company, said first-quarter sales rose 17 percent to 5.25
billion euros ($7.5 billion), beating analysts’ estimates. Watch
and jewelry sales at Paris-based LVMH climbed 28 percent. Biel, Switzerland-based Swatch Group AG (UHR) , the world’s
largest maker of timepieces, added 3 percent to 404.60 francs. Swiss Reinsurance Co. slid 4 percent to 49.65 francs as
shareholders lost the right to the latest dividend. Accounting
for the lost payment, the shares gained 1.4 percent. To contact the reporter on this story:
Giles Broom in Zurich at
[email protected] . To contact the editor responsible for this story:
Andrew Rummer at [email protected] . | |||||||
2011-04-19 00:00:00 UTC | Astral Foods Says Six-Month Earnings Expected to Advance by as Much as 33% | http://www.bloomberg.com/news/2011-04-19/astral-foods-says-six-month-earnings-expected-to-advance-by-as-much-as-33-.html
| B y A l a s t a i r R e e d | Astral Foods Ltd. (ARL) said earnings per
share for the six months through March are expected to increase
by 28 percent to 33 percent from a year earlier. To contact the editor responsible for this story:
Alastair Reed at
[email protected] | |||||||
2011-04-19 00:00:00 UTC | Harvard's Adams Enlists Nobel Economist Charging $5,000 for Hour of Advice | http://www.bloomberg.com/news/2011-04-19/harvard-s-adams-enlists-nobel-economist-charging-5-000-for-hour-of-advice.html
| B y M a s o n L e v i n s o n | Lots of bandwidth and $5,000 can
get anyone an hour with Nobel Prize-winning economist Gary Becker. A couple more computer clicks can also remake a tennis
serve, fix a golf swing and provide tips on how to out-bluff the
poker world’s top pros. Becker, a University of Chicago professor who won the Nobel
Prize in Economics in 1992, will be selling his time on
ExpertInsight.com , a website offering one-to-one video chats
with leaders, which opened yesterday. He’ll join people such as
economics professors Jeffrey Miron of Harvard University and
Laurence Kotlikoff of Boston University , “Freakonomics” co-
authors Steven Levitt and Stephen Dubner, poker celebrities
Patrik Antonius and Tom Dwan, and tennis coach Jeff Salzenstein. “The idea is to bring this coaching model to everything,”
said Brandon Adams, Expert Insight’s 32-year-old founder and
chief executive officer. The site’s roster blends the interests and contacts of
Adams, a top poker professional who taught undergraduates in
Harvard’s Department of Economics for the past eight years.
Adams, the primary research assistant for Michael Lewis ’s book
“The Big Short,” began giving one-to-one poker lessons over
the video-chat service Skype in March 2010, charging $300-$400
per hour. “I was amazed at how easy it was to drum up business,”
Adams, a regular in some of the world’s biggest cash poker
games, said in a telephone interview. “I realized that one-to-
one teaching was a great opportunity to monetize content. What
you’re doing is searching the world for that small slice of
people, maybe 15 to 30, who are willing to pay a high price for
your content.” Nobels, ‘Freak’ In exchange for an equity position, Adams sought help from
Greatest Good LLC , a business and philanthropy consulting firm
founded by a group that includes Becker; Levitt, who also
teaches at the University of Chicago ; and Daniel Kahneman, a
Princeton University professor and 2002 Nobel economics
laureate. “Ultimately, the Internet is about reducing what
economists call ‘search’ costs and ‘transaction’ costs,”
Levitt, who will charge $3,000 per hour on the site, said in an
e-mail. “There may be only a handful of customers scattered
around the world willing to pay the fees that top experts or
celebrities might demand. Before now, there was no easy way to
find each other. The search and transaction costs were
prohibitive. Now there’s a market.” Expert Insight spent $450,000 to build the website and
expects to become profitable in late 2012 or 2013, Adams said.
Experts will set their own rates and schedules, giving 30
percent commissions to the company. Mountaintop Tennis One of the site’s pros will be Salzenstein, a 37-year-old
former Stanford University tennis All-American who was No. 100
in singles in 2004 in the ATP World Tour rankings. He said he
got into video coaching a couple months ago when a woman in
Portugal , Alexandra Franco, commented on his blog, seeking
advice on her serve. He suggested she send him some video and
later began giving her advice over Skype. “Here’s a woman on the other side of the Atlantic Ocean,
we’re sharing Skype and she’s learning things she’s never heard
before,” he said. Salzenstein, who will charge $200 per hour on Expert
Insight, uses video clips from top professionals such as 16-time
major champion Roger Federer and top-ranked Rafael Nadal to
teach proper strokes and movements without “the distraction of
hitting a ball over the net.” Internet Coaching Franco, who lives among six houses on a mountaintop in
Quatrim do Norte, about 175 miles (281 kilometers) south of
Lisbon, said she sought top coaching locally before turning to
the Internet. “Even the best coaches here are not getting the detail
that Jeff is getting with the video,” Franco, a 47-year-old
former professional basketball player, said in a telephone
interview. Jerome Andrews, a proponent of video coaching who in 2007
was named one of the top 20 U.S. golf instructors under the age
of 40 by Golf Digest, also will be on the website, as will some
of Adams’s poker-playing friends, including Phil Gordon, who’s
had $2.8 million in tournament winnings, and Rafe Furst, who won
an event in the 2006 World Series of Poker. Adams has taken Twitter bids on sessions with Antonius and
Dwan to launch the site. Antonius has drawn an offer of $3,200
and Dwan $3,000. Dubner, 47, and Becker, 80, held a chat on the
service yesterday, its opening day. Gambling Crackdown Last week’s crackdown on poker gambling websites by the
U.S. authorities probably will hurt that segment of the
business, Adams said yesterday. Founders of PokerStars, Full
Tilt Poker and Absolute Poker were among 11 people charged by
the U.S. last week in a case that seeks at least $3 billion in
forfeitures and penalties. “The indictment of the major poker sites by the Department
of Justice will definitely hit our poker coaching business very
hard,” Adams said in an e-mail yesterday. “Long term, I’m 100
percent sure that the appetite for poker in this country is very
strong and will reassert itself somehow.” Other experts available include political blogger Nate Silver at $1,000 per hour, Miron at $400, Dubner at $3,000 and
Becker at $5,000. James Katz, a professor of communication at Rutgers
University in Piscataway, New Jersey , said he knew a Wall Street
banker who had a monthly lunch with a Nobel Prize winner, paying
$2,000 for advice on life and business. “It might be fun for someone to spend $5,000 to talk to a
very smart person,” Katz said in a telephone interview,
cautioning against over-reliance on such experts. “What I find
is that smart people tend to be smart in a subject area or
domain, and just a regular person for all the other things.” Down-Market Move Adams said his company’s plan is “to make a managed move
down market over time,” trying not to risk alienating his high-
priced roster. Internet video chat has potential to be used for services
ranging from tutoring and counseling to home repair and psychic
readings. It may also help the world’s biggest celebrities
interact with fans. “I’d pay a lot of money to give my daughters the chance to
video chat with Taylor Swift ,” Levitt said of the Grammy Award-
winner singer. “I can’t see any way that will happen other than
Taylor Swift signing on with Expert Insight.” To contact the reporter on this story:
Mason Levinson in New York at
[email protected] . To contact the editor responsible for this story:
Michael Sillup at [email protected] . | |||||||
2011-04-19 00:00:00 UTC | N.Y. Crude Oil Little Changed After Reversing Earlier Decline of 1.5% | http://www.bloomberg.com/news/2011-04-19/n-y-crude-oil-little-changed-after-reversing-earlier-decline-of-1-5-.html
| B y R i c h a r d S t u b b e | Crude oil rose 7 cents to $107.19 a
barrel at 10:21 a.m. on the New York Mercantile Excnange,
reversing an earlier decline of 1.5 percent. To contact the editor responsible for this story:
Richard Stubbe at
[email protected] | |||||||
2011-04-19 00:00:00 UTC | GM Defying China Slowdown May Reclaim Sales Lead from Toyota | http://www.bloomberg.com/news/2011-04-19/gm-defying-china-slowdown-may-reclaim-sales-lead-from-toyota.html
| B y B l o o m b e r g N e w s | General Motors Co. (GM) and Volkswagen
AG (VOW) expect to boost vehicle sales in China faster than the
nation’s economic growth rate, defying government policies to
curb sales and threatening Toyota Motor Corp. (7203) ’s standing as the
world’s largest carmaker. GM, the largest U.S. automaker, plans to double sales in
China to 5 million vehicles by 2015, the Detroit-based company
said at this week’s Shanghai auto show. Germany ’s Volkswagen,
the biggest maker of passenger cars in China, said it may
outpace industrywide sales growth of as much as 12 percent. Carmakers are boosting sales and production plans even
after the government ended industry subsidies and as cities
including Shanghai and Beijing restrict new car licenses to
fight pollution and ease traffic. GM’s sales target may enable
it to retake the global sales title it lost to Toyota in 2008. “You get used to not worrying about variations around the
trend line,” Kevin Wale , GM’s China president, said yesterday.
“In the past 10 years, China’s growth rate has only been below
10 percent in one year. The underlying trend is very strong.” GM’s prediction of 5 million sales compares with Toyota’s
goal of doubling deliveries in the nation by 2015 from 846,000
vehicles last year. The Japanese company sold 8.42 million
vehicles globally last year, compared with GM’s 8.39 million. Realistic Forecast “If the market doesn’t have any major setbacks, GM’s
forecast isn’t unrealistic,” said Ashvin Chotai , managing
director of consultant Intelligence Asia Automotive. “We’ve been
wrong in the past with conservative forecasts.” China is already GM’s biggest market, with 2.35 million
sales last year, compared with 2.21 million in the U.S. The
carmaker aims for market share of more than 14 percent in China
by 2015, Wale said yesterday in an interview. Industrywide auto sales in the nation may grow as much as
12 percent a year over the medium term, Karl-Thomas Neumann,
chief executive officer for China at Wolfsburg, Germany-based
Volkswagen, said yesterday. Volkswagen’s deliveries may increase at a faster rate, he
said. “We’re bracing for more rather than less,” Neumann said. The company sold 1.92 million vehicles in China and has
said it aims to be the world’s biggest carmaker by 2018,
surpassing Toyota and GM. VW sold 7.14 million vehicles globally
in 2010. China GDP Growth The carmakers’ sales estimates compare with economic growth
of 10.3 percent in China last year, a rate that may ease to 9.6
percent this year, according to the Asian Development Bank . The
world’s second-largest economy expanded by a more-than-estimated
9.7 percent in the first quarter of this year, even after the
government raised interest rates to rein in inflation. China overtook the U.S. as the world’s largest auto market
in 2009, when sales jumped 46 percent from the previous year.
The growth slowed to 32 percent last year as the government
began phasing out tax breaks and subsidies for car buyers. The
market may expand by less than a previous forecast of 10 to 15
percent this year, Dong Yang, vice chairman of the China
Association of Automobile Manufacturers, said this month. Carmakers are unworried about lower growth because China,
the world’s most populous nation, still dwarfs all other markets
and two-thirds of Chinese customers are first-time car buyers,
said Joe Hinrichs, head of Asia Pacific and African operations
at Ford Motor Co. (F) Catching Toyota “A market as big as this one, even 5 to 10 percent growth
is very significant,” Hinrichs said. “I’d take 10 percent
growth forever.” Ford plans to add 15 models in China by 2015, the company
said April 15. Hyundai Motor Co. (005380) said yesterday it’s considering
building a fourth plant in Beijing, while Nissan Motor Co., the
biggest Japanese automaker in China, said it expects sales to
rise to 1.5 million in 2012 from 1.02 million in 2010. GM and VW’s growth plans may help both automakers catch up
with Toyota, whose growth has lagged behind rivals in China. The Toyota City, Japan-based automaker may miss this year’s
target to sell more than 900,000 vehicles in China after Japan ’s
record earthquake on March 11 caused parts shortages, Masayoshi
Hori, the automaker’s executive coordinator for China, said
yesterday at the Shanghai show. While Toyota would like to increase its market share, the
company is focused on improving vehicle quality, service and
customer satisfaction, Hori said. “We’re not in the business of prioritizing market share,”
he said. Chinese Car Companies Chinese car companies are also planning expansion. SAIC
Motor Corp., GM and VW’s local partner, is aiming for 6 million
deliveries by 2015, compared with 3.6 million last year, it said
yesterday. Dongfeng Motor Group Co., the partner of Nissan and
Honda Motor Co., aims to produce and sell 5 million models a
year by 2015, it said yesterday. SAIC and Great Wall Motor Co. also aim to raise sales
outside China. Shanghai-based SAIC said it’s aiming to sell
800,000 cars a year in other countries by 2015. Great Wall said
exports may account for 30 percent of its sales by then. While automakers’ growth plans are realistic, government
measures to limit car sales in cities may become a concern,
Chotai said. China will start curbing vehicle ownership in cities with
more than 10 million people from 2011 to 2015 to ease congestion,
China’s Economic Observer reported March 31. The government has
also passed a new law requiring vehicles with larger engines to
pay more taxes, starting next year. License Restrictions Beijing’s government said Dec. 23 it would set a monthly
quota of 20,000 new vehicle licenses in the Chinese capital. “Beijing demand will be down 45 percent this year just
because of license-plate restrictions, and more cities will
follow,” Chotai said. “Cities in Guangdong province , Shenzhen,
Chengdu, Shanghai are all possibilities because of high
congestion rates and levels of pollution.” Tightening measures to slow China’s economy may also deter
car sales. The nation increased interest rates four times since
October to curb inflation that accelerated to a 5.4 percent
annual pace in March. Liquidity remains “excessive,” central
bank Governor Zhou Xiaochuan said in Beijing on April 18, a day
after the People’s Bank of China announced the fourth increase
in lenders’ reserve ratios this year. That may not be enough to slow rising auto sales or
Toyota’s replacement as the leading global automaker, said Koji Endo , an analyst at Advanced Research Japan in Tokyo . “Automakers ought to get out there and grab market share,
because the Chinese market will grow unless something unexpected
happens,” he said. “You can expect the Chinese market to expand
to something like 40 million by 2020, and obviously there’s a
possibility Toyota may be surpassed.” Liza Lin, Makiko Kitamura, Andreas Cremer, Tian Ying, Yuki
Hagiwara, Jamie Butters in Shanghai, and Terje Langeland and
Anna Mukai in Tokyo. Editors: Ian Rowley, Kae Inoue To contact the editor responsible for this story:
Kae Inoue at
[email protected] | |||||||
2011-04-19 00:00:00 UTC | Raul Castro Named Cuban Communist Party’s First Secretary as Members Meet | http://www.bloomberg.com/news/2011-04-19/fidel-castro-says-he-won-t-be-part-of-communist-party-s-central-committee.html
| B y J e n s E r i k G o u l d a n d A n d r e w J . B a r d e n | Cuban President Raul Castro was
named first secretary of the island’s Communist Party and
revolutionary hero Jose Ramon Machado became second in command
as officials gathered to debate ways to revive growth. Raul’s brother, former Cuban President Fidel Castro , said
he had resigned from the party’s leadership and called on a new
generation of leaders to bolster the Caribbean island’s economy. “Raul knew that at this time I wouldn’t accept any role in
the party,” Castro, 84, wrote in a column published on Cuba
Debate, a state-run website. Party members are debating changes to Cuba’s economic
system, which has been battered by a U.S. embargo and the global
financial crisis. Proposals being discussed include eliminating
the monthly ration books that provide Cubans with subsidized
food and providing loans to individuals who start independent
businesses. Fidel attended the closing session of the Communist Party
summit today, according to state-run newspaper Juventud Rebelde,
which published a photo of Castro wearing a blue warm-up jacket
at the meeting. In a column yesterday, Castro said new leaders are well-
prepared intellectually for a task that would be more difficult
than the challenges faced by his generation when they took power
in 1959. Castro said he wrote the comments after listening to
debates during the summit, which started April 16. Castro Surgery Castro began transferring control to Raul in July 2006,
when he underwent intestinal surgery, and officially stepped
down as president in 2008. Raul, 79, has since initiated some
measures to open the economy. “There is no margin for error in this moment in human
history,” Castro said in the first column . “The new generation
is being called upon to rectify and change without hesitation
everything that should be rectified and changed.” Raul Castro said on April 16 that the country needed to
impose term limits for elected officials to no more than two
consecutive periods of five years each, state-run newspaper
Juventud Rebelde reported. Raul, who was shown submitting his ballot in a photograph
in state-run media yesterday, was previously the second in
command in the party’s central committee. To contact the reporter on this story:
Jens Erik Gould in Mexico City at
[email protected] ;
Andrew J. Barden in Dubai at
[email protected] To contact the editor responsible for this story:
Joshua Goodman in Rio de Janeiro at
[email protected] | |||||||
2011-04-19 00:00:00 UTC | Hong Kong Jobless Rate Falls to Lowest Since September 2008 | http://www.bloomberg.com/news/2011-04-19/hong-kong-jobless-rate-falls-to-lowest-since-september-2008-1-.html
| B y S o p h i e L e u n g | Hong Kong’s unemployment rate fell
to the lowest level since September 2008, encouraging consumer
spending and aiding the city’s economic expansion. The jobless rate for the three months through March was 3.4
percent, the government said on its website today. That compares
with 3.6 percent in the previous period and the 3.5 percent
median estimate of 13 economists in a Bloomberg News survey. Financial Secretary John Tsang said last week that growth
will remain “robust,” with the economy expanding as much as 5
percent this year, boosting wages and supporting the labor
market. Risks include the threat to exports from Japan ’s
earthquake and the Europe sovereign-debt crisis, and the danger
that a bubble will form in Hong Kong’s property market,
according to Tsang. “Strong domestic demand is pointing to a continued tight
labor market,” Frances Cheung , a strategist at Credit Agricole
CIB in Hong Kong, said before today’s data. The jobless rate may
fall to 3.2 percent by year-end, she said. The introduction of an HK$28 ($3.60) per-hour minimum wage
may increase business costs and restrain hiring. The measure
will take effect May 1 and may boost the pay of 314,600 workers,
according to Matthew Cheung, the Hong Kong labor secretary. Hong Kong’s gross domestic product grew a more-than-
estimated 6.8 percent last year. The first-quarter economic
report is due May 13. With assistance from Michael Munoz. Editors: Paul Panckhurst,
Stephanie Phang. To contact the reporter on this story:
Sophie Leung in Hong Kong at
[email protected] To contact the editor responsible for this story:
Paul Panckhurst in Hong Kong at
[email protected] | |||||||
2011-04-19 00:00:00 UTC | Boyner, Isiklar Yatirim, Sinpas: Turkey Equity Market Preview | http://www.bloomberg.com/news/2011-04-19/boyner-isiklar-yatirim-sinpas-turkey-equity-market-preview.html
| B y A y d a n E k s i n | The following stocks may be active
in Turkey. Symbols are in parentheses and prices are from the
last close. Turkey’s benchmark ISE National 100 index (XU100) fell 1,842.88, or
2.7 percent, to 66,607.58 yesterday. Boyner Buyuk Magazacilik (BOYNR) AS: The Turkish
department store chain was raised to “market outperformer” on
higher growth potential by equity analyst Melda Agirdas at
Ekspres Invest, according to an e-mailed report today. The price
estimate is 5 liras, Ekspres said. Boyner dropped 9 kurus, or
2.3 percent, to 3.91 liras. Isiklar Yatirim Holding AS (ISYHO) : The Turkish group
active in construction, foundry and energy said its unit Ozisik
Insaat & Enerji AS sold its stake in a power plant to Enerjisa
Enerji Uretim AS, the Turkish joint venture between Verbund AG
and Haci Omer Sabanci Holding AS (SAHOL) , for $8.9 million,
according to a statement to the Istanbul Stock Exchange after
the market closed yesterday. Isiklar declined 7 kurus, or 6.3
percent, to 1.05 liras. Sabanci fell 12 kurus, or 1.5 percent,
to 7.84 liras. Sinpas Gayrimenkul Yatirim Ortakligi AS (SNGYO) : The
Turkish real-estate company agreed to buy an ongoing apartments
project in northwestern Bursa city for $50 million from its
partners Nergis Group and Savings Deposit Insurance Fund. Sinpas
dropped 13 kurus, or 6.1 percent, to 1.99 liras. To contact the reporter on this story:
Aydan Eksin in Istanbul at
[email protected] To contact the editor responsible for this story:
Shaji Mathew at
[email protected] | |||||||
2011-04-19 00:00:00 UTC | EU Hits India With 5-Year Tariffs on Stainless Steel Bars, Rods | http://www.bloomberg.com/news/2011-04-19/eu-hits-india-with-5-year-tariffs-on-stainless-steel-bars-rods.html
| B y J o n a t h a n S t e a r n s | The European Union imposed five-
year tariffs on stainless steel from India , saying EU producers
including Acerinox SA (ACX) are victims of subsidies to Indian
competitors such as Mukand Ltd. (MUK) The EU duties as high as 4.3 percent aim to counter alleged
trade-distorting Indian aid to exporters of stainless steel bars
and rods, which are used in domestic appliances, cars and
medical instruments. The levies affect EU imports worth around
40 million euros ($57 million) in 2009. European producers that also include Ugitech SA and Aceros
Inoxidables Olarra SA suffered “injury” as a result of
subsidized imports from India, the 27-nation EU said in a
decision today in Brussels. The five-year duties match
provisional measures introduced in December and will take effect
after being published in the EU Official Journal by April 30. Indian exporters of stainless steel bars and rods increased
their combined share of the EU market to 11.8 percent in the 12
months through March 2010 from 10.4 percent in 2007, according
to the bloc. It said three aid programs based on India’s Foreign
Trade Act and one program stemming from the country’s Banking
Regulation Act led to unfair export subsidies. The duty rates are 3.3 percent against four manufacturers
in the Venus group, 3.4 percent against Chandan Steel Ltd., 4
percent against 19 manufacturers including Mukand and Shah
Alloys Ltd. (SA) , and 4.3 percent against Viraj Profiles Ltd. and any
other Indian exporters. The anti-subsidy or “countervailing” duties are the
outcome of an investigation that the EU opened in April 2010
after a complaint by the European Confederation of Iron and
Steel Industries , also known as Eurofer, on behalf of producers
representing more than 25 percent of the bloc’s output of
stainless steel bars and rods. To contact the reporter on this story:
Jonathan Stearns in Brussels at
[email protected] To contact the editor responsible for this story:
James Hertling at
[email protected] | |||||||
2011-04-19 00:00:00 UTC | J&J-Synthes Takeover Obscuring Recalls in Makeover: Real M&A | http://www.bloomberg.com/news/2011-04-19/j-j-synthes-merger-obscures-product-recalls-in-instant-makeover-real-m-a.html
| B y T a r a L a c h a p e l l e a n d A l e x N u s s b a u m | Johnson & Johnson (JNJ) , reeling from
more than 50 drug and device recalls since the start of 2010, is
trying to recapture its younger self by digesting Synthes Inc. (SYST) Synthes, the largest maker of devices to treat bone
fractures and trauma, has an operating margin of 35 percent, the
highest among medical-products makers including J&J with market
values of more than $5 billion, according to data compiled by
Bloomberg. Synthes has increased the amount of net income
generated per dollar of revenue for seven straight years to the
best in the industry, while J&J’s profit margin declined in two
of the past four years, the data show. J&J, with almost $28 billion in cash at its disposal, is in
talks to acquire Synthes, a $19.4-billion company with only $98
million in debt, as it seeks to revive its image after product
recalls and lawsuits over failed artificial hips. The world’s
second-biggest maker of health-care products would gain a device
company with almost 50 percent of the trauma market. Synthes’s
operating margins are 45 percent higher than Smith & Nephew Plc (SN/) ,
which investors had speculated was a target for J&J. “J&J had a severe challenge to its premier reputation
given all the recalls,” said Michael Holland, who oversees more
than $4 billion, including J&J shares, as chairman of Holland &
Co. in New York. “This relatively bold step to buy a premier
company is a significant move to regain their luster.” Share Gains J&J’s shares rose as much as 1 percent yesterday before
closing down 0.2 percent at $60.46 on the New York Stock
Exchange. That was still the third-best performance in the Dow
Jones Industrial Average, which slid 1.1 percent as Standard &
Poor’s cut its outlook on U.S. long-term debt to “negative.” Synthes advanced 5.6 percent to 146.5 Swiss francs in
Zurich yesterday to give it a market value of 17.4 billion Swiss
francs ($19.4 billion). The West Chester, Pennsylvania-based
company said in a statement that it’s in talks with J&J about a
possible combination. Synthes doesn’t intend to provide more
information until a definitive agreement is reached or talks are
terminated, it said. William Price, a spokesman for New Brunswick , New Jersey-
based J&J, declined to comment in an e-mail. J&J climbed 3.7 percent to $62.69 on the NYSE today after
the company reported first-quarter earnings that beat the
average estimate from analysts and raised its full-year
forecast. Synthes gained 0.6 percent to 147.4 francs in Zurich. ‘Change the Focus’ J&J is considering an acquisition of Synthes after product
recalls cost the company $900 million in sales last year. J&J
removed almost 200 million packages of Tylenol, Motrin and other
over-the-counter medications tainted by nauseating odors or
improper ingredients. Its DePuy unit has also withdrawn 93,000
hip implants that failed at higher-than-expected rates, forcing
repeat surgeries. After the company’s McNeil Consumer Healthcare unit was
charged on March 10 with violating U.S. law, the Food & Drug
Administration expanded oversight of three manufacturing plants
for at least five years. The settlement doesn’t preclude future
criminal charges, the agency said at the time. “They want to change the focus of the conversation,” said
Erik Gordon , a University of Michigan business professor in Ann
Arbor who studies the biomedical industry. J&J is “probably
thinking, ‘Let’s have the conversation be the potential upside
of something,’” he said. While Synthes and J&J may “fit together,” J&J should be
focused on fixing its in-house recall problems, he said. ‘Great Margins’ Synthes had an operating margin of 35 percent in 2010, the
best among 17 medical-product companies with market values
greater than $5 billion, including J&J at 27 percent, data
compiled by Bloomberg show. The company’s efficiency turning
revenue into operating income also topped rivals specializing in
medical instruments such as Minneapolis-based Medtronic Inc. (MDT) ,
St. Jude Medical Inc. in St. Paul, Minnesota, and Boston
Scientific Corp. (BSX) in Natick, Massachusetts. Synthes improved its profit margin to 24.6 percent last
year from 6.1 percent in 2003, the data show. “They have great margins,” said Michael Liss, a Kansas
City, Missouri-based portfolio manager at American Century
Investments, which oversees $109 billion and owned about 7.8
million shares of J&J as of Dec. 31. “It only helps J&J’s
margins overall.” Synthes has attractive margins because it’s in the
orthopedics market and has implemented efficiencies, Gilgian
Eisner, a spokesman for the company in Solothurn, Switzerland,
said yesterday. Artificial Hips J&J had looked at buying Smith & Nephew, Europe ’s biggest
marker of artificial hips and knees, a person familiar with the
plan who declined to be identified because the discussions were
private said in January. The U.K. device maker had a 16 percent
profit margin in the 2010 calendar year. The London-based
company declined 3 percent yesterday, the most since January,
after Synthes confirmed it was in talks with J&J. An acquisition of Synthes would push J&J’s share of the
$5.5 billion orthopedic trauma market to 54 percent from about 5
percent, and boost earnings between 4 percent and 5 percent in
each of the next three years, Larry Biegelsen , a Wells Fargo &
Co. analyst in New York , said in a note to clients yesterday. The trauma market will grow faster than replacement hips
and knees, according to Biegelsen. J&J’s share of the $9 billion spinal-care market would
almost double, he said. The company may have to divest some of
Synthes’s spine business, according to Lisa Bedell Clive, a
London-based analyst with Sanford C. Bernstein & Co. ‘Called Into Question’ Prices for Synthes’s trauma devices may succumb to the
pressure that has narrowed margins for other medical devices,
according to Michael Weinstein , a JPMorgan Chase & Co. analyst
in New York. The sustainability of Synthes’s profits “has been and
should be called into question,” he wrote in a note yesterday. Synthes’s exclusive arrangement with the Swiss AO
Foundation may draw antitrust scrutiny from U.S. regulators,
Bernstein’s Clive said. The non-profit teaches courses for
surgeons using only Synthes products, leading to many becoming
Synthes customers, she said. Like J&J, Synthes has also grappled with product recalls.
After reports that its Synex II Central Body components had
failed in six people, leading to pain and loss of height for
some, Synthes recalled the spinal implants in 2009. Credit Ratings The company was also ordered to sell its Norian unit, which
pleaded guilty in November to one felony and 110 misdemeanor
counts for conducting an unauthorized trial of its bone-mending
cement products. Three patients died, according to the U.S.
Justice Department. J&J built up $19.4 billion in cash and near cash items and
$8.3 billion in short-term investments as of the end of last
year that could be tapped for acquisitions, compared with $16.8
billion in total debt, according to data compiled by Bloomberg. The maker of health-care products is one of only four U.S.
companies to have the top credit rating from both Standard &
Poor’s and Moody’s Investors Service. Irving, Texas-based Exxon
Mobil Corp. (XOM) ; Microsoft Corp. of Redmond, Washington ; and
Automatic Data Processing Inc. (ADP) in Roseland, New Jersey , are the
others, data compiled by Bloomberg show. J&J is also ranked AAA in Bloomberg’s Company Credit
Ratings, which analyze borrowers based on indebtedness,
profitability and other financial ratios. Even if J&J added
long-term debt equal to the current market value of Synthes, it
would still have a rating of A2L, the fourth-highest investment
grade level. J&J’s combined cash and short-term investments
outstrip the market capitalization of Synthes by about $8.2
billion, the data show. Biggest Deal Synthes, which is not rated by S&P or Moody’s, had total
debt of $98.4 million at the end of last year, compared with
$736.6 million in cash and near-cash items and $1.25 billion in
short-term investments, data compiled by Bloomberg show. An acquisition of Synthes for about $20 billion would be
the biggest deal in J&J’s 125-year history, surpassing the $16.6
billion purchase of New York-based Pfizer Inc. (PFE) ’s consumer health
care business in 2006. Pfizer is the world’s largest maker of
medical products by sales. “J&J is what it is. It’s a big powerhouse,” said Harry Rady, who oversees $270 million as chief executive officer of
Rady Asset Management LLC, a hedge fund in La Jolla , California .
“They could choose to allocate resources to fight all these
small battles, or they could make a transformational acquisition
like this to really change the face of the company.” Overall, there have been 7,336 deals announced globally
this year, totaling $713.1 billion, a 29 percent increase from
the $553.3 billion in the same period in 2010, according to data
compiled by Bloomberg. To contact the reporters on this story:
Tara Lachapelle in New York at
[email protected] ;
Alex Nussbaum in New York at
[email protected] . To contact the editors responsible for this story:
Daniel Hauck at [email protected] ;
Katherine Snyder at [email protected] ;
Reg Gale at [email protected] . | |||||||
2011-04-19 00:00:00 UTC | Singapore Stocks: Keppel Land, Straits Asia Resources, Wilmar | http://www.bloomberg.com/news/2011-04-19/chasen-straits-asia-resources-singapore-stocks-preview.html
| B y J o n a t h a n B u r g o s | Singapore’s Straits Times Index (FSSTI)
climbed 1.3 percent to 3,165.80 at the close. All but three
stocks in the benchmark index of 30 companies advanced. Shares on the measure trade at an average 14.4 times
estimated earnings, compared with about 15.6 times at the end of
2010, according to data compiled by Bloomberg. The following shares were among the most active in the
market. Stock symbols are in parentheses after the company name. Palm-oil producers: Crude palm-oil futures for July
delivery gained as much as 2.3 percent in Kuala Lumpur today,
heading for a third day of advance. First Resources Ltd. (FR) , an Indonesian palm-oil
producer, increased 1.5 percent to S$1.40. Indofood Agri
Resources Ltd. (IFAR) , the palm-oil unit of Indonesia ’s
biggest noodle maker, rose 0.5 percent to S$2.15. Wilmar
International Ltd. (WIL) , the world’s biggest palm-oil
trader, climbed 1.9 percent to S$5.27. Keppel Land Ltd. (KPLD) , the real-estate unit of Keppel
Corp. (KEP SP), rose 1.4 percent to S$4.42. The company said
first-quarter profit rose 46 percent to S$92.1 million ($74.2
million) and revenue more than tripled to S$357.9 million. Straits Asia Resources Ltd. (SAR) , the owner of coal
mines in Indonesia, increased 3.9 percent to S$2.66. The company
said first-quarter net income rose to $41.4 million from $11.2
million a year earlier. United Overseas Bank Ltd. (UOB) gained 1.4 percent to
S$19.66. The Australian unit of Singapore ’s smallest lender by
market value plans to sell three-year bonds in its first sale of
Australian dollar-denominated debt. The benchmark-sized sale of
senior unsecured notes will be priced by tomorrow, according to
an e-mailed statement from Australia & New Zealand Banking Group
Ltd., which is helping manage the sale. To contact the reporter on this story:
Jonathan Burgos in Singapore at
[email protected] To contact the editor responsible for this story:
Nick Gentle at
[email protected] . | |||||||
2011-04-19 00:00:00 UTC | Northern Trust’s Net Income Down 3.9% as Low Interest Rates Reduce Revenue | http://www.bloomberg.com/news/2011-04-19/northern-trust-s-net-income-down-3-9-as-low-interest-rates-reduce-revenue.html
| B y C h r i s t o p h e r C o n d o n | Northern Trust Corp. (NTRS) , the third-
largest independent U.S. custody bank, said first-quarter profit
fell 3.9 percent as low interest rates reduced lending and
money-market revenue. Net income decreased to $151 million, or 61 cents a share,
from $157.2 million, or 64 cents a share, a year earlier, the
Chicago-based company said today in a statement. Excluding some
items, analysts had expected earnings of 65 cents, according to
the average of 23 estimates surveyed by Bloomberg. The U.S. Federal Reserve has held its benchmark lending
rate at zero to 0.25 percent since December 2008, cutting the
income Northern Trust earns when investing or lending out
securities and client deposits. Low interest rates also have
forced the company to waive some of the fees it collects for
running money-market funds so that yields stay positive. When
rates are depressed for a long period, more investments and
loans are affected. Assets under custody rose 17 percent to $4.36 trillion. The earnings were announced before the start of regular
U.S. trading. Northern Trust lost 6.7 percent this year through
yesterday, including reinvested dividends. The 17-member
Standard & Poor’s index of asset managers and custody banks was
little changed. (Northern Trust is scheduled to hold a conference call for
investors at 9 a.m. New York time. The call can be accessed at
http://www.northerntrust/financialreleases .) To contact the reporter on this story:
Christopher Condon in Boston at
[email protected] To contact the editor responsible for this story:
Christian Baumgaertel at
[email protected] . | |||||||
2011-04-19 00:00:00 UTC | Portuguese Business Group Against Minimum Wage Rise, Diario Says | http://www.bloomberg.com/news/2011-04-19/portuguese-business-group-against-minimum-wage-rise-diario-says.html
| B y J o a o L i m a | Portugal ’s Commerce and Services
Confederation will propose that the country’s minimum wage is
not increased to 500 euros this year, which was a goal set by
the government at the end of 2010, Diario Economico reported,
without saying how it obtained the information. The confederation will present the proposal tomorrow at a
meeting with officials of the International Monetary Fund ,
European Commission and European Central Bank, the Portuguese
newspaper said. IMF officials joined European Commission and ECB teams on
April 12 “for technical discussions with the Portuguese
government” and policy discussions started this week, following
the country’s April 6 request for financial assistance. Click here for web link To contact the editor responsible for this story:
Joao Lima at
[email protected] | |||||||
2011-04-19 00:00:00 UTC | Peru Sol Holds at Four-Month Low Amid Humala Election Concern | http://www.bloomberg.com/news/2011-04-19/peru-sol-holds-at-four-month-low-amid-humala-election-concern.html
| B y A n d r e a J a r a m i l l o | Peru’s sol held at a four-month low
as concern former military rebel Ollanta Humala may win a
presidential runoff led foreign investors to sell the local
currency. The sol was little changed at 2.8233 per U.S. dollar at
4:12 p.m. New York time, from 2.8225 yesterday. That’s its
weakest level on a closing basis since Dec. 13. The sol has
dropped 2 percent in the last month, the second-biggest decline
after the Japanese yen among world currencies tracked by
Bloomberg. “Foreigners have been buying dollars in the spot market as
they cut back on their Peru holdings,” said Gonzalo Navarro,
head trader at Banco Santander in Lima. “Humala is the reason
behind the uncertainty. The market doesn’t believe his moderate
stance.” Humala, who has pledged to renegotiate contracts with
foreign companies and the country’s trading partners if he is
elected, finished first in the April 10 vote, winning 32 percent
of the ballots. The second round of elections will be held on
June 5. Peru ’s central bank sold 50 million soles ($17.7 million)
worth of six-month certificates of deposit today. The bank last
week sold dollars for the first time since 2009 to ease the
currency’s slide. Banco Central de Reserva del Peru didn’t buy
or sell dollars in the currency market today, it said on its
website . The yield on Peru’s benchmark 7.84 percent sol-denominated
bond due August 2020 was little changed at 7.25 percent,
according to Deutsche Bank AG’s local unit. It has increased 95
basis points, or 0.95 percentage point, from 6.30 percent a
month ago. The bond’s price today remained at 104.08 centimos
per sol. To contact the reporter on this story:
Andrea Jaramillo in Bogota at
[email protected] To contact the editor responsible for this story:
David Papadopoulos at
[email protected] | |||||||
2011-04-19 00:00:00 UTC | Europe Ends Three-Month Curbs on Carbon Registries After Hacking Thefts | http://www.bloomberg.com/news/2011-04-19/europe-ends-three-month-curbs-on-carbon-registries-after-hacking-thefts.html
| B y E w a K r u k o w s k a a n d M a t h e w C a r r | The European Union allowed the
Lithuanian carbon registry to reopen tomorrow, bringing back to
normal all emission registries in its cap-and-trade system after
a string of thefts triggered three months of restrictions. The European Commission, the EU regulatory arm, closed the
registries that track the ownership of emission permits on
Jan. 19 after thieves stole more than 2 million permits valued
at about 34 million euros ($49 million) at today’s prices. The
national carbon trackers were required to demonstrate that
their systems were secure from hacking attacks before getting
permission to reopen. “Tightening the security of the registries system has been
the top priority,” EU Climate Commissioner Connie Hedegaard
said in a statement in Brussels today. “All registries are now
up and running with enhanced security measures in place.” The closure of registries in January drove spot carbon
markets to a halt for 15 days before the first centers were
allowed to reopen. The European emissions trading program, known
as the ETS, includes 27 EU nations as well as Norway, Iceland
and Liechtenstein. The registry in Iceland is not yet active. EU permits for delivery in December rose 1 percent to 16.84
euros as of 5 p.m. on the ICE Futures Europe exchange in London.
They have gained 18 percent so far this year. Damaged Reputation Even though the allowances stolen in January accounted for
only 0.1 percent of the European Union average annual cap in the
2008-2012 trading period, the attacks hurt the reputation of the
ETS and sparked criticism from some analysts that the
supervision of the system is not adequate. The thefts followed instances of “carousel fraud”
involving value-added tax collection and password “phishing”
in previous years. Jos Delbeke, director general for climate at
the commission, said on Jan. 28 that some member states and
firms neglected security rules and national authorities are
working with Europol to catch the fraudsters. While the countries attacked by hackers in January managed
to locate some of the missing permits, legal questions about how
to prevent recirculation of the stolen allowances are keeping
investors at bay from spot trading. The recovery of any
allowances transferred illegally has not been harmonized in the
27-nation bloc and is a matter for national law and local
enforcement authorities. Know Your Customer The commission and national registries would immediately
boost confidence in the market by isolating stolen allowances,
installing a mandatory four-hour delay for every transaction and
requiring strict “know-your-customer” tests for all traders,
said Simone Ruiz, European policy director at the International
Emissions Trading Association. IETA urged yesterday that EU nations and the commission
ensure that the arrangements for the next phase of the ETS from
2013 “stop any recurrence of these unnecessary and frankly
embarrassing problems.” It also renewed calls on the commission
to reveal more information about the minimum security measures
that national registries had to implement, requests that the EU
has said could mean “educating the gangsters.” The ETS imposes pollution limits on more than 11,000
companies including Germany ’s biggest steelmaker ThyssenKrupp AG
and Italy ’s biggest utility Enel SpA, allowing those that emit
less than their quota to sell surplus permits. One permit gives
the right to discharge one ton of CO2. EU-wide solutions would
require backing from member states. Improving Security The commission has already demanded that national
registries implement additional identification checks and is now
drafting regulatory changes that may be presented as soon as
this or next month. The EU is also examining improved oversight
rules for spot carbon trading. “We are working on a set of measures to further improve
security on all fronts such as a delivery delay mechanism,
improved management of registry accounts and detection and quick
response mechanisms,” Hedegaard said. “With these measures
and a more unified approach for the third phase of the ETS due
to start in 2013, we have definitely strengthened the integrity
of the European carbon market.” To contact the reporters responsible for this story:
Ewa Krukowska in Warsaw at
[email protected]
Mathew Carr in London at
[email protected] To contact the editor responsible for this story:
Stephen Voss at [email protected] | |||||||
2011-04-19 00:00:00 UTC | Treasury 10-Year Yield Near Three-Week Low as Noda Counters S&P | http://www.bloomberg.com/news/2011-04-19/treasuries-hold-advance-as-japan-s-yosano-sees-quality-after-s-p-warning.html
| B y W e s G o o d m a n a n d L u k a n y o M n y a n d a | Treasury 10-year yields stayed
within three basis points of the lowest in three weeks as
bondholders said U.S. debt will still draw investors even after
its rating outlook was cut by Standard & Poor’s . Two-year yields reached the lowest since March 24. U.S.
debt is “attractive,” Finance Minister Yoshihiko Noda said at
a press conference in Tokyo today, a comment that was later
reiterated by Economic and Fiscal Policy Minister Kaoru Yosano .
Pacific Investment Management Co., which runs the world’s
biggest bond fund, said the Treasury market will still be a
place for other nations to invest. “Where will they put their reserve assets?” Tony Crescenzi, a market strategist and portfolio manager for Pimco
in Newport Beach, California, said in an interview on Bloomberg
Television’s “First Up” with Susan Li. “The Treasury market
remains the deepest, most liquid market in the world.” Ten-year yields were one basis point higher at 3.39 percent
as of 8:24 a.m. in London , after dropping by three basis points
yesterday, according to Bloomberg Bond Trader prices. The 3.625
percent note due in February 2021 traded at 101 30/32. The yield
fell yesterday to 3.36 percent, the least since March 24. Yields are down from 3.80 percent a year ago and below the
average of 5.21 percent over the last two decades even with the
U.S. projected to post a deficit in excess of $1 trillion for a
third consecutive year. Yields will remain less than 4 percent
through year-end, according to the median forecast of 73
economists in a Bloomberg News survey. Negative Outlook S&P yesterday put the U.S. government on notice that it
risks losing its AAA ranking unless officials agree on a plan by
2013 to reduce budget deficits and the national debt. China , Russia, Brazil , South Korea and other nations will
still have demand for Treasuries, Crescenzi said, even as Pimco
joins the criticism of U.S. spending. Bill Gross, who runs the
record-size $236 billion Pimco Total Return Fund, set a bet
against U.S. government and related debt in March. U.S. spending
may result in inflation and currency devaluation, he said in his
April outlook posted on Pimco’s website . Worldwide reserve assets climbed to a record $9.65 trillion
this month, according to Bloomberg data. China is America’s
largest creditor, holding $1.15 trillion of the $9.13 trillion
in publicly traded debt. Japan is second with $890.3 billion. “We continue to see U.S. debt as an attractive
investment,” Japan’s Noda said. Yields to Rise Treasuries would be “extremely good-quality securities”
even if the grade is cut, Yosano said in a separate press
conference in the Japanese capital. Yields will still climb in 2011, said Tomohisa Fujiki, an
interest-rate strategist at BNP Paribas Securities Japan Ltd. in
Tokyo . BNP’s U.S. unit is one of the 20 primary dealers that
trade directly with the Federal Reserve . “Into the end of this year, we think yields are going to
rise,” Fujiki said. “The U.S. economy is on track for a
recovery, even if the pace is slow,” he said. Ten-year rates will increase to 4.25 percent by Dec. 31,
Fujiki said. Fed Bank of St. Louis President James Bullard said
yesterday he is optimistic about the U.S. economy this year. Fed
Dallas President Richard Fisher said in separate comments the
recovery appears to be “self-sustaining.” Housing Starts A government report today will show housing starts
increased 8.6 percent in March from the month before, after a 23
percent decline in February, according to a Bloomberg News
survey of economists before the Commerce Department report. The difference between yields on 10-year notes and Treasury
Inflation Protected Securities, a gauge of trader expectations
for consumer prices over the life of the debt, has widened to
2.62 percentage points from 2.08 percentage points six months
ago. The 10-year average is 2.10 percentage points. Treasuries rose yesterday as speculation that Greece will
be unable to avoid a default and declines in stocks boosted
demand for refuge assets. “Geopolitical concerns haven’t gone away, and we are
seeing safety flows into Treasuries,” said Russ Certo, a
managing director and co-head of rates trading at Gleacher & Co.
in New York . Credit-default swaps covering Treasuries climbed to an 11-
week high of 49.5 basis points yesterday, according to data
provider CMA. Out of 56 markets tracked by Bloomberg, only
Germany, the Netherlands, Denmark, Switzerland, Finland, Sweden
and Norway have lower swap costs. Traders use credit-default swaps to speculate on credit
quality. A drop in price signals improved perceptions of
creditworthiness, while an increase suggests the opposite. The
contracts pay the buyer if a borrower fails to meet its debt
agreements. To contact the reporters on this story:
Wes Goodman in Singapore at
[email protected] .
Lukanyo Mnyanda in Edinburgh at
[email protected] To contact the editor responsible for this story:
Daniel Tilles at
[email protected] | |||||||
2011-04-19 00:00:00 UTC | Ugandan Authorities Plan Continued Arrests to Block Opposition Protests | http://www.bloomberg.com/news/2011-04-19/ugandan-authorities-plan-continued-arrests-to-block-opposition-protests.html
| B y F r e d O j a m b o | Uganda vowed further arrests of
opposition leaders protesting against the rising cost of living
as opponents of President Yoweri Museveni’s government pledged
to continue their demonstrations. Protesters will be detained because they are acting
“outside the law and accepted norms of society,” Internal
Affairs Minister Kirunda Kivejinja told reporters today in the
capital, Kampala. “We shall not be ashamed in the execution of
our duties.” Demonstrations have been organized in Uganda to denounce
surging prices for staple foods and gasoline, after inflation in
the East African nation accelerated to 11.1 percent in March,
from 6.4 percent a month earlier. Yesterday, the authorities
arrested the country’s main opposition leader, Kizza Besigye ,
for the second time in a week as he took part in a so-called
walk-to-work demonstration. On April 11, Besigye was arrested for blocking traffic.
Three days later, at a similar demonstration, Besigye’s hand was
injured after police sprayed teargas and fired rubber bullets to
disperse protesters. The opposition will continue with their twice-weekly
protests until the government halts the rise in food and fuel
prices, said John Ken Lukyamuzi, the chairman of a coalition of
four opposition parties. ‘Harassment’ “We shall continue with the demonstrations in spite of the
harassment,” he said in a phone interview today. “We want
government to address the issues which are hurting the people.” Norbert Mao, the leader of the Democratic Party , and six of
his party activists were remanded at the country’s biggest
prison yesterday after they declined to apply for bail,
according to the New Vision , a Kampala-based newspaper. At least
20 opposition leaders were charged for “inciting violence,” it
said. Besigye, who was the flag bearer for the coalition in a
Feb. 18 presidential election, rejected the outcome of the vote,
claiming Museveni was fraudulently reelected. Uganda, with a
population of more than 30 million, is Africa ’s largest producer
of robusta coffee. To contact the reporter on this story:
Fred Ojambo in Kampala at
[email protected] . To contact the editor responsible for this story:
Paul Richardson at
[email protected] . | |||||||
2011-04-19 00:00:00 UTC | Akhmedov Seeks $1.8 Billion for 49% of Northgas, Vedomosti Says | http://www.bloomberg.com/news/2011-04-19/akhmedov-seeks-1-8-billion-for-49-of-northgas-vedomosti-says.html
| B y T o r r e y C l a r k | Farkhad Akhmedov raised the price
he wants for his 49 percent in ZAO Northgas to $1.8 billion
after getting a higher valuation from bankers and an audit of
the Russian gas producer’s reserves, Vedomosti said today,
citing a letter from the businessman to the potential buyer, OAO
Inter RAO UES. Inter RAO, a state-run power utility, had agreed to buy the
stake for about $1.5 billion under a non-binding agreement,
Vedomosti said, citing the businessman. Akhmedov may use the
extra $300 million to buy Inter RAO stock, the newspaper said. OAO Gazprom, which owns the majority stake in Northgas,
didn’t exercise its right of first refusal to Akhmedov’s stake
by an April 12 deadline, the newspaper said, citing two
unidentified people with knowledge of the transaction. To contact the editor responsible for this story:
Torrey Clark at
[email protected] | |||||||
2011-04-19 00:00:00 UTC | Hot Rock to Explore Peru Areas for Geothermal Energy | http://www.bloomberg.com/news/2011-04-19/hot-rock-to-explore-two-more-peru-sites-for-geothermal-power-potential.html
| B y S t e p h a n N i e l s e n | (Corrects location in first paragraph of April 19 story.) Hot Rock Ltd. (HRL) , an Australian
geothermal developer, won permission to explore two sites in the
south of Peru for potential to support power plants as the South
American country seeks to diversify its power supply. The sites, called Chocopata and Quella Apacheta, together
cover 295 square kilometers (115 square miles), the Brisbane-
based company said in a statement today. Peru gets 52 percent of its electricity from fossil fuels
and 48 percent from hydroelectric plants, according to the
statement. The country’s power grid will need to grow 6.2
percent a year to meet demand that may reach 10.5 gigawatts in
10 years, Hot Rock said, citing a report from grid operator
Comite de Operacion Economica del Sistema. “The Peruvian government supports the development of
geothermal energy through legislation that provides a mechanism
for setting feed-in tariffs, tax incentives and guaranteed
connection to the grid and sale of all power produced,”
Executive Chairman Mark Elliott said in the statement. With the awards, Hot Rock now owns the rights to explore
three sites in Peru and eight in Chile, according to the
statement. The company expects to get five more Peruvian
concessions in the next few months, according to the statement. To contact the reporter on this story:
Stephan Nielsen in Sao Paulo at
[email protected] To contact the editor responsible for this story:
Reed Landberg at
[email protected] | |||||||
2011-04-19 00:00:00 UTC | Ayala Land, Filinvest Land, Phinma: Philippine Stocks Preview | http://www.bloomberg.com/news/2011-04-19/ayala-land-filinvest-land-phinma-philippine-stocks-preview.html
| B y I a n C . S a y s o n | Shares of the following companies
may have unusual moves in Philippine trading. Stock symbols are
in parentheses, and prices are as of the previous close, unless
stated otherwise. The Philippine Stock Exchange Index rose 0.4 percent to
4,269.19. Ayala Corp. (AC) : The owner of the largest Philippine
developer and its biggest bank by market value said this year’s
capital spending will increase 21 percent to 79 billion pesos
($1.82 billion), repeating an earlier announcement on March 11.
The spending plan includes investments in power and
infrastructure projects, according to yesterday’s filing. The
stock increased 0.3 percent to 393.40 pesos. Ayala Land Inc. (ALI) : The largest Philippine developer
said profit may reach 10 billion pesos by 2014, a stock exchange
filing showed. The stock fell 0.1 percent to 16.96 pesos. Filinvest Development Corp. (FDC) : The company is
interested to bid for state-owned power assets that the
government will auction, a stock exchange filing showed. The
stock climbed 1.6 percent to 5.08 pesos. Filinvest Land Inc. (FLI) : The Philippine builder plans
to increase its leasable assets by adding 100,000 square meters
of office and shopping mall space, a stock exchange filing
showed. The stock gained 1.6 percent to 1.28 pesos. Phinma Corp. (PHN) : The company’s property venture will
spend 4.5 billion pesos to develop three residential projects, a
stock exchange filing showed. The property venture plans to list
its shares on the exchange in the next 12-to-24 months, it said.
The stock sank 4.6 percent to 11.70 pesos. To contact the reporter on this story:
Ian C. Sayson in Manila at
[email protected] To contact the editor responsible for this story:
Darren Boey at
[email protected] | |||||||
2011-04-19 00:00:00 UTC | Ex-Taylor Bean Chairman Farkas Found Guilty on All 14 Counts in Fraud Case | http://www.bloomberg.com/news/2011-04-19/ex-taylor-bean-chairman-convicted-of-conspiracy-fraud-1-.html
| B y T o m S c h o e n b e r g | Lee Farkas , the ex-chairman of
Taylor, Bean & Whitaker Mortgage Corp., was found guilty of 14
counts of conspiracy and bank, wire and securities fraud in what
prosecutors said was a $3 billion scheme involving fake mortgage
assets. A federal jury in Alexandria, Virginia, yesterday returned
the verdict after one day of deliberations. Farkas, who was free
during the trial, was taken into custody. He faces a maximum
sentence of 30 years on the conspiracy and bank-fraud charges
and 20 years or more on the wire-fraud and securities-fraud
counts when he’s sentenced on July 1. Prosecutors said Farkas, 58, orchestrated one of the
largest and longest-running bank frauds in the U.S. that duped
some of the country’s largest financial institutions, targeted
the federal bank bailout program and contributed to the failures
of Taylor Bean and Montgomery, Alabama-based Colonial Bank. Assistant Attorney General Lanny Breuer , head of the
Justice Department ’s criminal division, said Farkas’s fraud
“poured fuel on the fire” of the financial crisis. “The financial crisis has many faces and today Lee
Farkas’s face is one of them,” Breuer, who attended part of the
trial, said after the verdict in a conference call with
reporters. ‘Ongoing’ Investigation Breuer said the government’s investigation into the fraud
scheme is “ongoing.” He declined to say whether additional
people might be charged. Prosecutors spent eight days laying out the allegations for
jurors. The government called 23 witnesses, including officials
at Freddie Mac , Bank of America Corp. (BAC) and Deutsche Bank AG. (DBK) Six
of those who testified were former colleagues or associates of
Farkas who had pleaded guilty to conspiracy charges. Farkas used Taylor Bean as his own “personal piggy-bank”
and stole more than $30 million from the company he built to buy
homes, cars, airplanes, restaurants and other side businesses,
said Assistant U.S. Attorney Charles Connolly during closing
arguments. Farkas, who denied any wrongdoing, testified on his own
behalf and called two former Taylor Bean employees and a
forensic accountant in his defense. William Cummings, one of Farkas’s lawyers, said the defense
team is disappointed with the verdict. “We fought hard,” said Cummings, a former U.S. attorney
in Virginia. “Getting six former colleagues to plead guilty and
testify is a difficult obstacle to overcome.” Cummings said he was surprised U.S. District Judge Leonie Brinkema ordered Farkas to be jailed, adding that the judge said
she would hear arguments next week on whether he should be
released while he awaits sentencing. Rolls Royce Prosecutors are seeking to seize properties that Farkas
owns in Florida and Georgia , as well as nine vehicles, including
a 1929 Ford Model A and 1963 Rolls Royce. Taylor Bean, based in Ocala, Florida, was servicing more
than 500,000 mortgages including $51 billion of Freddie Mac
loans when it collapsed in August 2009, according to court
records. Prosecutors allege the fraud began in 2002 when Farkas had
trouble meeting operating expenses, such as payroll and
mortgage-loan servicing payments owed to the government-
sponsored Freddie Mac and Ginnie Mae. With assistance from officials at Colonial Bank , at one
time among the country’s 50 biggest, Farkas masked shortfalls of
about $15 million a day by moving money from another Taylor Bean
account into the company’s master account, then returning the
money later in the day, according to a related lawsuit by the
U.S. Securities and Exchange Commission. Overdrawn Account By December 2003, Taylor Bean was overdrawing its account
by about $150 million a day, the SEC said. Farkas, in about four hours of testimony, denied ordering
anyone to move money among the Taylor Bean accounts and said he
and Taylor Bean officials didn’t have authority to do it. The government alleges that Farkas and other conspirators,
in a scheme they called “Plan B,” began sending mortgage data
to Colonial Bank for loans that didn’t exist or that Taylor Bean
had already committed or sold to other investors. Fake Loans By the end of 2007, the scheme consisted of about $500
million in fake residential mortgage loans and about $900
million in unmarketable residential mortgage loans and
securities, said Patrick Stokes, deputy chief of the U.S.
Justice Department’s fraud section, during closing arguments. Farkas and his co-conspirators diverted cash from Ocala
Funding LLC, a financing vehicle used and controlled by Taylor
Bean, to cover its losses, prosecutors said. Ocala Funding issued asset-backed commercial paper to
financial institutions including Deutsche Bank, Germany ’s
biggest bank, and Paris-based BNP Paribas (BNP) , according to court
papers. By August 2009, Ocala’s deficit had grown to $1.5
billion, according to prosecutors. As Colonial Bank struggled to stay afloat, Farkas tried to
raise $300 million from private investors to secure a $550
million cash infusion from the federal Troubled Asset Relief
Program, according to Paul Allen , the company’s former chief
executive officer who pleaded guilty to the conspiracy. Farkas
was convicted of falsely representing that he had commitments
from investors for the money. Colonial never got the TARP funds, the U.S. said. Taylor Bean accounted for about 2 percent of the mortgages
for single-family homes by volume bought by Freddie Mac in 2009,
according to a company filing. The firm said it filed a claim in
Taylor Bean’s bankruptcy for $1.8 billion, with $440 million
relating to funds deposited with Colonial Bank. Alabama regulators seized Colonial Bank in 2009 and the
Federal Deposit Insurance Corp. was appointed as receiver.
Colonial BancGroup and Taylor Bean filed for bankruptcy in 2009. The case is U.S. v. Farkas, 10-cr-00200, U.S. District
Court, Eastern District of Virginia (Alexandria). To contact the reporter on this story:
Tom Schoenberg in Washington at
[email protected] To contact the editor responsible for this story:
Michael Hytha at [email protected] | |||||||
2011-04-19 00:00:00 UTC | Kenyan Coffee Advances as Traders Boost Stocks Before Break | http://www.bloomberg.com/news/2011-04-19/kenyan-coffee-advances-as-traders-boost-stocks-before-break-1-.html
| B y F r e d O j a m b o | Kenya ’s benchmark coffee grade rose
3.5 percent at auction today as buyers replenished their stocks
ahead of a two-month break, the Nairobi Coffee Exchange said. The top arabica AA grade sold for an average of $405.97 for
a 50-kilogram (110-pound) bag, up from $392.24 at the previous
sale on April 12, the exchange said in an e-mailed report.
Supplies of the grade climbed 13 percent to 1,459 bags, it said. “Demand was a little bit higher because buyers wanted to
boost their stocks before we break until June 14,” said Kizito
Keya, a trader at Mumba Coffee Ltd., by phone from Nairobi. Arabica beans are grown in East Africa and Latin America
and are brewed by specialty companies including Starbucks Corp. Kenya may produce about 40,000 metric tons this season,
James Wahome, quality manager at the Coffee Board of Kenya , said
on Jan. 17. The nation produced 45,000 tons in the last season. The East African country is trying to help small-scale
farmers revive output, which dropped from more than 100,000 tons
in 1988-89 because of a slump in global prices and farm
mismanagement. The average price for all the coffee sold at the auction
declined 1.8 percent to $294.66 a bag, the exchange said. Sales
fell to 9,961 bags valued at $3.59 million, from 10,490 bags
worth $3.87 million last week, it said. The following are details of the auction in U.S. dollars
for a 50-kilogram bag: To contact the reporter on this story:
Fred Ojambo in Kampala at
[email protected] To contact the editor responsible for this story:
Paul Richardson at [email protected] | |||||||
2011-04-19 00:00:00 UTC | Japan’s Benchmark Bonds Rise, Pushing Yields to Three-Week Low, on Exports | http://www.bloomberg.com/news/2011-04-19/twenty-year-government-bonds-may-decline-on-auction-concerns-stock-gains.html
| B y M o n a m i Y u i a n d M a s a k i K o n d o | Japan ’s 10-year bond rose, pushing
yields to the lowest level in three weeks, after a report showed
exports fell for the first time in more than a year. The nation’s government debt handed investors a 0.6 percent
return in the three months ended yesterday, according to indexes
compiled by Bank of America Merrill Lynch, outperforming an 11
percent slump in the Nikkei 225 Stock Average during the period.
Investors demanded the lowest 20-year yields in more than a
month relative to five-year rates before a 1.1 trillion-yen ($13
billion) auction of the longer-maturity bonds tomorrow. “With the outlook still in a haze, we have to be rather
bearish on the economy,” said Toru Suehiro, a market analyst in
Tokyo at Mizuho Securities Co., one of the 24 primary dealers
obliged to bid at government debt sales. “Ten-year yields are
likely to try a range of between 1.1 percent and 1.2 percent.” The benchmark 10-year yield declined one basis point to
1.23 percent at 3:47 p.m. in Tokyo at Japan Bond Trading Co.,
the nation’s largest interdealer debt broker. The yield dropped
to as low as 1.225 percent, the least since March 29. Ten-year bond futures for June delivery were unchanged at
139.54 at the 3 p.m. close of the Tokyo Stock Exchange. Twenty-
year yields dropped one basis point to 2 percent. A basis point
is 0.01 percentage point. Japan’s overseas shipments declined 2.2 percent in March
from a year earlier, the Finance Ministry said in Tokyo today.
The median estimate of 19 economists surveyed by Bloomberg News
was for a 1.1 percent drop. 20-Year Auction The yield spread between 20-year debt and five-year notes
narrowed to 1.51 percentage points, the least since March 11. The prior 20-year debt auction on March 16 drew bids valued
at 4.13 times the amount on offer, compared with the average of
3.82 for the past 10 sales. Primary dealers often reduce
holdings of bonds in case prices decline before they can pass on
the new securities to investors. Bond futures earlier slid as much as 0.16 as Asian stocks
extended gains in global shares. The Nikkei 225 rose 1.8 percent
after the MSCI World Index advanced 0.6 percent yesterday. “Bonds are being sold a bit ahead of tomorrow’s auction,
especially after yields dropped rapidly over the past few
days,” said Makoto Noji, a senior debt and foreign-exchange
strategist at SMBC Nikko Securities Inc. in Tokyo. “Stocks also
turned to positive, hurting bonds.” Ten-year yields are likely to drop to 1.20 percent by the
end of September, according to a Bloomberg News survey of
economists and analysts. Should the predictions prove accurate,
investors who buy the debt today would make a 0.8 percent return,
Bloomberg calculations showed. To contact the reporters on this story:
Monami Yui in Tokyo at
[email protected] ;
Masaki Kondo in Singapore at
[email protected] . To contact the editor responsible for this story:
Rocky Swift at [email protected] . |