States and companies have started investing very differently when it comes to the billions of dollars they are safeguarding for workers’ retirement.
Jerry W. Hoefer for The New York Times
Frederick E. Rowe, a Dallas investor and the former chairman of the Texas Pension Review Board, said states were looking at riskier investments in an effort to meet pension obligations.
Jerry W. Hoefer for The New York Times
Trent May, chief of Wyoming's pension fund, said states were “moving away from the perceived safety and liquidity of the investment-grade market.”
Companies are quietly and gradually moving their pension funds out of stocks. They want to reduce their investment risk and are buying more long-term bonds.
But states and other bodies of government are seeking higher returns for their pension funds, to make up for ground lost in the last couple of years and to pay all the benefits promised to present and future retirees. Higher returns come with more risk.
“In effect, they’re going to Las Vegas,” said Frederick E. Rowe, a Dallas investor and the former chairman of the Texas Pension Review Board, which oversees public plans in that state. “Double up to catch up.”
Though they generally say that their strategies are aimed at diversification and are not riskier, public pension funds are trying a wide range of investments: commodity futures, junk bonds, foreign stocks, deeply discounted mortgage-backed securities and margin investing. And some states that previously shunned hedge funds are trying them now.
The Texas teachers’ pension fund recently paid Chicago to receive a stream of payments from the money going into the city’s parking meters in the coming years. The deal gave Chicago an upfront payment that it could use to help balance its budget. Alas, Chicago did not have enough money to contribute to its own pension fund, which has been stung by real estate deals that fizzled when the city lost out in the bidding for the 2016 Olympics.
A spokeswoman for the Texas teachers’ fund said plan administrators believed that such alternative investments were the likeliest way to earn 8 percent average annual returns over time.
Pension funds rarely trumpet their intentions, partly to keep other big investors from trading against them. But some big corporations are unloading the stocks that have dominated pension portfolios for decades. General Motors, Hewlett-Packard, J. C. Penney, Boeing, Federal Express and Ashland are among those that have been shifting significant amounts of pension money out of stocks.
Other companies say they plan to follow suit, though more slowly. A poll of pension funds conducted by Pyramis Global Advisors last November found that more than half of corporate funds were reducing the portion they invested in United States equities.
Laggards tend to be companies with big shortfalls in their pension funds. Those moving the fastest are often mature companies with large pension funds, and who fear a big bear market could decimate the funds and the companies’ own finances.
“The larger the pension plan, the lower-risk strategy you would like to employ,” said Andrew T. Ward, the chief investment officer of Boeing, which shifted a big block of pension money out of stocks in 2007. That helped cushion Boeing’s pension fund against the big losses of 2008.
Shedding stocks gave Boeing “material protection right when we needed it most,” Mr. Ward said. By the time the markets had bottomed out last March, Boeing’s pension fund had lost 14 percent of its value, while those of its equity-laden peers had lost 25 to 30 percent, he said.
“We estimated that the strategy saved our company in the short term right around $4 or $5 billion of funded status,” he said.
Boeing and other companies seeking to reduce their investment risk are moving into fixed-income instruments, like bonds — but not just any bonds. They are buying and holding bonds scheduled to pay many years in the future, when their retirees expect their money.
The value of the bonds may fall in the meantime, just like the value of stocks. But declining bond prices are not such a worry, because the companies plan to hold the bonds for the accompanying interest payments that will in turn go to retirees, not sell them in the interim.
Towers Watson, a big benefits consulting firm, surveyed senior financial executives last year and found that two-thirds planned to decrease the stock portion of their companies’ pension funds by the end of 2010. They typically said their stock allocations would shrink by 10 percentage points.
“That’s 10 times the shift we might see in any given year,” said Carl Hess, head of Towers Watson’s investment consulting business. Economists have speculated that a truly seismic shift in pension investing away from stocks could be a drag on the market, but they say it would not be long-lasting.
Corporate America’s change of heart is notable all on its own, after decades of resistance to anything other than returns like those of the stock markets. But it’s even more startling when compared with governments’ continued loyalty to stocks. When governments scale back on the domestic stocks in their pension portfolios these days, it is often just to make way for more foreign stocks or private equities, which are not publicly traded.
Tuesday, March 9, 2010
Manganese Ore to Join India’s Steel-Dominated Asset Sell-Off
March 9 (Bloomberg) -- India plans to sell about 10 percent of Manganese Ore (India) Ltd., the nation’s largest producer, as steel-related companies drive the government’s record sale of state assets.
The initial offering will be completed in the financial year starting April 1, steel minister Virbhadra Singh said in an interview in New Delhi, without specifying an amount. The ministry has approved the offer, which is awaiting final clearance from the department of disinvestment, Manganese Ore Finance Director M.A.V. Goutham said yesterday.
“The stake sale will be equivalent to about 10 percent of the company’s total shares,” Goutham said.
The government plans to raise 400 billion rupees ($8.8 billion), more than the combined fund-raising by all previous administrations, in the next fiscal year to help narrow the budget deficit from a 16-year high. India has 60 companies, including Steel Authority of India Ltd. and NMDC Ltd., in which it plans to raise funds to build roads, ports and utilities.
“Our ministry will contribute more than half of the government’s disinvestment target,” Singh said in an interview at his New Delhi residence on March 5.
The government aims to sell an 8.38 percent stake in NMDC, the nation’s largest iron-ore producer, in an offer starting March 10 and ending March 12. Steel Authority, the country’s second-largest producer, plans to offer 10 percent of its equity, while the government will sell a similar stake.
Federal Government
India’s federal government will sell 13 percent of its holding, minister Singh said.
Manganese Ore, 81.5 percent owned by the federal government and the remainder by the provincial administrations of Maharashtra and Madhya Pradesh, may have a 22 percent drop in sales for the year ending March 31, Goutham said, without giving a profit forecast. The economic slowdown last year curbed demand from steelmakers, which use manganese as a raw material, he said.
Manganese Ore, which operates 10 mines in the western state of Maharashtra and the central state of Madhya Pradesh, produces annually about 1.4 million metric tons of ore, or about 65 percent of India’s needs, according to its Web site. The company plans to set up a captive power plant and expand the capacity of its ferro-manganese plant.
The initial offering will be completed in the financial year starting April 1, steel minister Virbhadra Singh said in an interview in New Delhi, without specifying an amount. The ministry has approved the offer, which is awaiting final clearance from the department of disinvestment, Manganese Ore Finance Director M.A.V. Goutham said yesterday.
“The stake sale will be equivalent to about 10 percent of the company’s total shares,” Goutham said.
The government plans to raise 400 billion rupees ($8.8 billion), more than the combined fund-raising by all previous administrations, in the next fiscal year to help narrow the budget deficit from a 16-year high. India has 60 companies, including Steel Authority of India Ltd. and NMDC Ltd., in which it plans to raise funds to build roads, ports and utilities.
“Our ministry will contribute more than half of the government’s disinvestment target,” Singh said in an interview at his New Delhi residence on March 5.
The government aims to sell an 8.38 percent stake in NMDC, the nation’s largest iron-ore producer, in an offer starting March 10 and ending March 12. Steel Authority, the country’s second-largest producer, plans to offer 10 percent of its equity, while the government will sell a similar stake.
Federal Government
India’s federal government will sell 13 percent of its holding, minister Singh said.
Manganese Ore, 81.5 percent owned by the federal government and the remainder by the provincial administrations of Maharashtra and Madhya Pradesh, may have a 22 percent drop in sales for the year ending March 31, Goutham said, without giving a profit forecast. The economic slowdown last year curbed demand from steelmakers, which use manganese as a raw material, he said.
Manganese Ore, which operates 10 mines in the western state of Maharashtra and the central state of Madhya Pradesh, produces annually about 1.4 million metric tons of ore, or about 65 percent of India’s needs, according to its Web site. The company plans to set up a captive power plant and expand the capacity of its ferro-manganese plant.
Satyam case tests foreign investors’ rights
A legal case brought in New York against Satyam Computer Services will test the ability of overseas shareholders in Indian companies to seek damages through class-action lawsuits.
The suit against Satyam, which was India’s fifth-largest outsourcing company until its chairman confessed to a $1bn fraud early last year, and PwC, its auditor, will particularly test the rights of investors holding American Depositary Shares.
EDITOR’S CHOICE
Lex: Indian corporate governance - Jan-18
Satyam’s rescue from the depths - Dec-28
Satyam shares tumble over fresh charges - Nov-25
Tech Mahindra enlists BT to revive Satyam - Jul-28
Lawyers for the Satyam investors, who include large US and foreign pension funds, are seeking to block an attempt to shift the case from the New York Southern District Court to India.
They argue that, in cases of securities fraud, only the regulator, the Securities and Exchange Board of India (Sebi), is allowed to act, effectively ruling out civil class-action lawsuits.
“The substantive laws of India provide no means of individual or class recovery for private investors in securities fraud matters because the civil courts in India are barred from hearing such cases where, as here, Sebi is empowered to act,” the lawyers for the investors said in a document filed with the court.
Satyam nearly collapsed in January 2009 after B Ramalinga Raju, its then chairman, confessed to fixing the company’s accounts over a period of years.
India’s business world has argued that the case reflects a one-off breakdown in an otherwise sound corporate governance regime but analysts argue it has revealed cracks in the country’s ability to handle large instances of securities fraud.
Mr Raju and a number of others suspected of involvement in the fraud, including two PwC auditors, are awaiting the matter to come to trial. The two PwC auditors have denied any involvement in the fraud.
Concerned that any collapse of Satyam would lead to mass redundancies among the company’s former workforce of 50,000 people and undermine confidence in India’s multibillion-dollar outsourcing industry, the government facilitated last year the sale of the company to a rival, Tech Mahindra.
To try to seek compensation, leading investors such as the UK-based Mineworkers Pension Scheme, Skagen – a Norwegian mutual fund, Sampension KP Livsforsikring – another Scandinavian fund, and the US-based Mississippi Public Employees Retirement System, sued the company in New York.
But one of the defendants, PwC and its affiliates, has applied to the court to shift the case to India.
PwC says that most of the witnesses and evidence are in India, Satyam’s underlying shares mostly trade in Mumbai and the main plaintiffs in the lawsuit, the pension funds, are mostly sophisticated foreign investors.
But last month, the investors responded with a detailed statement saying India does not have the proper legal structure to support class-action suits.
In addition, India’s courts, particularly those in Andhra Pradesh, the home state of Satyam, are so clogged with cases, the matter would fester there for years, they said.
“The inadequacy of the proposed Indian forum is further established by a wealth of public information demonstrating that the court system in the state of Andhra Pradesh is so overwhelmed with a staggering caseload that significant delays in the administration of justice, often extending for decades, are inevitable,” the lawyers for the investors said.
Asian corporate governance experts say that some of the region’s regulators have laws enabling class-action lawsuits but few in practice, are legally viable.
The suit against Satyam, which was India’s fifth-largest outsourcing company until its chairman confessed to a $1bn fraud early last year, and PwC, its auditor, will particularly test the rights of investors holding American Depositary Shares.
EDITOR’S CHOICE
Lex: Indian corporate governance - Jan-18
Satyam’s rescue from the depths - Dec-28
Satyam shares tumble over fresh charges - Nov-25
Tech Mahindra enlists BT to revive Satyam - Jul-28
Lawyers for the Satyam investors, who include large US and foreign pension funds, are seeking to block an attempt to shift the case from the New York Southern District Court to India.
They argue that, in cases of securities fraud, only the regulator, the Securities and Exchange Board of India (Sebi), is allowed to act, effectively ruling out civil class-action lawsuits.
“The substantive laws of India provide no means of individual or class recovery for private investors in securities fraud matters because the civil courts in India are barred from hearing such cases where, as here, Sebi is empowered to act,” the lawyers for the investors said in a document filed with the court.
Satyam nearly collapsed in January 2009 after B Ramalinga Raju, its then chairman, confessed to fixing the company’s accounts over a period of years.
India’s business world has argued that the case reflects a one-off breakdown in an otherwise sound corporate governance regime but analysts argue it has revealed cracks in the country’s ability to handle large instances of securities fraud.
Mr Raju and a number of others suspected of involvement in the fraud, including two PwC auditors, are awaiting the matter to come to trial. The two PwC auditors have denied any involvement in the fraud.
Concerned that any collapse of Satyam would lead to mass redundancies among the company’s former workforce of 50,000 people and undermine confidence in India’s multibillion-dollar outsourcing industry, the government facilitated last year the sale of the company to a rival, Tech Mahindra.
To try to seek compensation, leading investors such as the UK-based Mineworkers Pension Scheme, Skagen – a Norwegian mutual fund, Sampension KP Livsforsikring – another Scandinavian fund, and the US-based Mississippi Public Employees Retirement System, sued the company in New York.
But one of the defendants, PwC and its affiliates, has applied to the court to shift the case to India.
PwC says that most of the witnesses and evidence are in India, Satyam’s underlying shares mostly trade in Mumbai and the main plaintiffs in the lawsuit, the pension funds, are mostly sophisticated foreign investors.
But last month, the investors responded with a detailed statement saying India does not have the proper legal structure to support class-action suits.
In addition, India’s courts, particularly those in Andhra Pradesh, the home state of Satyam, are so clogged with cases, the matter would fester there for years, they said.
“The inadequacy of the proposed Indian forum is further established by a wealth of public information demonstrating that the court system in the state of Andhra Pradesh is so overwhelmed with a staggering caseload that significant delays in the administration of justice, often extending for decades, are inevitable,” the lawyers for the investors said.
Asian corporate governance experts say that some of the region’s regulators have laws enabling class-action lawsuits but few in practice, are legally viable.
Sunday, March 7, 2010
Japanese Bonds Decline as Recovery Signs Damp Demand for Debt
March 8 (Bloomberg) -- Japan’s 10-year bonds fell for the first time in three days as signs the global recovery is gaining momentum hurt demand for the safety of government debt.
Ten-year bonds extended last week’s drop after a report showed Japan posted a wider-than-expected current-account surplus in January, signaling overseas consumption is buoying the economy. Demand for bonds also waned as stocks gained following a U.S. report last week that showed the world’s biggest economy lost fewer jobs than economists forecast.
“The better U.S. employment data is a factor weighing on bond prices,” said Masaru Hamasaki, chief strategist at Tokyo- based Toyota Asset Management Co., which oversees the equivalent of $14 billion.
The yield on the 1.4 percent bond due March 2020 rose one basis point to 1.315 percent at the 11:05 a.m. morning close in Tokyo at Japan Bond Trading Co., the nation’s largest interdealer debt broker. The price fell 0.089 yen to 100.750.
Ten-year bond futures for March delivery dropped 0.05 to 140.14 at the Tokyo Stock Exchange.
The Nikkei 225 Stock Average gained 1.8 percent to 10,551.30. The yen fell 0.2 percent after slumping the most in three months on March 5.
‘Hard to Buy’
“The advance of the Nikkei to above 10,500 and the weak yen makes it hard to buy bonds,” said Takafumi Yamawaki, a senior strategist in Tokyo at BNP Paribas Securities Japan Ltd., a unit of France’s largest bank.
Japan posted a current-account surplus of 899.8 billion yen ($9.95 billion) for January, the Ministry of Finance said in Tokyo. The surplus was forecast to be 783.9 billion yen, according to a Bloomberg News survey. Exports grew at the fastest pace in more than 30 years in January and industrial production rose the most since May, reports showed last month.
“Yields are likely to rise given the better-than-expected U.S. payrolls,” said Jun Ishii, chief fixed-income strategist in Tokyo at Mitsubishi UFJ Securities Co., a unit of Japan’s largest banking group. The 10-year rate will probably rise to 1.325 percent today, Ishii said.
Ten-year U.S. Treasury yields climbed eight basis points to 3.68 percent on March 5 after the Labor Department said payrolls dropped by 36,000 last month, less than the 68,000 decline predicted by economists.
The extra yield offered by 10-year Treasuries over similar-maturity Japanese debt expanded to 2.38 percentage points today, the widest since Feb. 22.
“The JGB market is likely to react to the snapback in U.S. yields following last Friday’s stronger-than-expected U.S. employment data,” Chotaro Morita, head of fixed-income strategy research at Barclays Capital, wrote in a note to clients.
Ten-year bonds extended last week’s drop after a report showed Japan posted a wider-than-expected current-account surplus in January, signaling overseas consumption is buoying the economy. Demand for bonds also waned as stocks gained following a U.S. report last week that showed the world’s biggest economy lost fewer jobs than economists forecast.
“The better U.S. employment data is a factor weighing on bond prices,” said Masaru Hamasaki, chief strategist at Tokyo- based Toyota Asset Management Co., which oversees the equivalent of $14 billion.
The yield on the 1.4 percent bond due March 2020 rose one basis point to 1.315 percent at the 11:05 a.m. morning close in Tokyo at Japan Bond Trading Co., the nation’s largest interdealer debt broker. The price fell 0.089 yen to 100.750.
Ten-year bond futures for March delivery dropped 0.05 to 140.14 at the Tokyo Stock Exchange.
The Nikkei 225 Stock Average gained 1.8 percent to 10,551.30. The yen fell 0.2 percent after slumping the most in three months on March 5.
‘Hard to Buy’
“The advance of the Nikkei to above 10,500 and the weak yen makes it hard to buy bonds,” said Takafumi Yamawaki, a senior strategist in Tokyo at BNP Paribas Securities Japan Ltd., a unit of France’s largest bank.
Japan posted a current-account surplus of 899.8 billion yen ($9.95 billion) for January, the Ministry of Finance said in Tokyo. The surplus was forecast to be 783.9 billion yen, according to a Bloomberg News survey. Exports grew at the fastest pace in more than 30 years in January and industrial production rose the most since May, reports showed last month.
“Yields are likely to rise given the better-than-expected U.S. payrolls,” said Jun Ishii, chief fixed-income strategist in Tokyo at Mitsubishi UFJ Securities Co., a unit of Japan’s largest banking group. The 10-year rate will probably rise to 1.325 percent today, Ishii said.
Ten-year U.S. Treasury yields climbed eight basis points to 3.68 percent on March 5 after the Labor Department said payrolls dropped by 36,000 last month, less than the 68,000 decline predicted by economists.
The extra yield offered by 10-year Treasuries over similar-maturity Japanese debt expanded to 2.38 percentage points today, the widest since Feb. 22.
“The JGB market is likely to react to the snapback in U.S. yields following last Friday’s stronger-than-expected U.S. employment data,” Chotaro Morita, head of fixed-income strategy research at Barclays Capital, wrote in a note to clients.
N.Z. Manufacturing, Construction Add to Fourth-Quarter Growth
March 8 (Bloomberg) -- New Zealand manufacturing sales increased the most since 2002 in the fourth quarter and home building surged, adding to signs economic growth accelerated in the final months of last year.
Sales volumes adjusted to remove inflation rose 3.1 percent from the previous three months, Statistics New Zealand said in a statement in Wellington today. Residential construction increased 7.4 percent in the same period, the statistics agency said in a separate report.
Stronger construction, manufacturing and retail sales suggest economic growth accelerated in the fourth quarter, buoyed by record-low interest rates and an expansion in Australia, which is the biggest market for New Zealand’s exports. The Treasury Department last week said the currency’s 3.7 percent decline against the U.S. dollar so far this year is providing more confidence for exporters.
“Construction and manufacturing look set to provide a positive contribution to gross domestic product in the quarter,” said Philip Borkin, an economist at Goldman Sachs JBWere Ltd. in Auckland. He estimates the economy grew 1 percent in the three months ended Dec. 31.
New Zealand’s dollar bought 70.01 U.S. cents at 11:55 a.m. in Wellington trading from 69.54 cents immediately before the reports were published.
Economic growth is accelerating after GDP increased 0.2 percent in both the second and third quarters of 2009, ending the nation’s worst recession in three decades. Fourth-quarter GDP figures are published on March 25.
Export Volumes
Economists will complete their GDP forecasts after a report on export and import volumes on March 10 and data on electricity generation due a week later. Retail sales rose 1 percent in the fourth quarter, according to a report on Feb. 12.
Reserve Bank Governor Alan Bollard has kept the official cash rate at 2.5 percent since April last year. He will leave the rate unchanged at his next review on March 11, according to all 13 economists surveyed by Bloomberg News.
Manufacturing sales rose in the three months through December by the most since the third quarter of 2002, when volumes jumped 4.1 percent. Eleven of 15 industries recorded gains, the statistics agency said.
Meat and dairy sales advanced 4.6 percent, led by meat. That offset a fall in milk powder, butter and cheese volumes. More than half the meat and dairy production is exported, the statistics agency said.
Excluding those categories, manufacturing climbed 3.6 percent, the agency said. Analysts use the figure excluding meat and dairy as a guide for the contribution of manufacturing to New Zealand’s GDP.
GDP Contribution
“Adjusting for changes in inventory levels, we estimate that manufacturing production rose around 4 percent” in the quarter, said Borkin. “This emphasizes a turn in performance after a period of significant weakness.”
Before the latest period, manufacturing had declined for five of seven quarters.
Demand for exports is being buoyed by global growth, led by China and other Asian economies. In Australia, which buys 23 percent of New Zealand exports, growth was 0.9 percent in the fourth quarter.
The increase in home construction followed two quarters of declines, while non-residential construction fell 6.1 percent, the statistics agency said in a second report.
“We expect residential construction activity will continue to recover over the coming quarters,” said Jane Turner, an economist at ASB Bank Ltd. in Auckland. “Non residential was significantly weaker than our expectation.”
Construction lags behind home-building approvals, which surged 21 percent in the fourth quarter from the three months through September, according to a report on Jan. 29.
Sales volumes adjusted to remove inflation rose 3.1 percent from the previous three months, Statistics New Zealand said in a statement in Wellington today. Residential construction increased 7.4 percent in the same period, the statistics agency said in a separate report.
Stronger construction, manufacturing and retail sales suggest economic growth accelerated in the fourth quarter, buoyed by record-low interest rates and an expansion in Australia, which is the biggest market for New Zealand’s exports. The Treasury Department last week said the currency’s 3.7 percent decline against the U.S. dollar so far this year is providing more confidence for exporters.
“Construction and manufacturing look set to provide a positive contribution to gross domestic product in the quarter,” said Philip Borkin, an economist at Goldman Sachs JBWere Ltd. in Auckland. He estimates the economy grew 1 percent in the three months ended Dec. 31.
New Zealand’s dollar bought 70.01 U.S. cents at 11:55 a.m. in Wellington trading from 69.54 cents immediately before the reports were published.
Economic growth is accelerating after GDP increased 0.2 percent in both the second and third quarters of 2009, ending the nation’s worst recession in three decades. Fourth-quarter GDP figures are published on March 25.
Export Volumes
Economists will complete their GDP forecasts after a report on export and import volumes on March 10 and data on electricity generation due a week later. Retail sales rose 1 percent in the fourth quarter, according to a report on Feb. 12.
Reserve Bank Governor Alan Bollard has kept the official cash rate at 2.5 percent since April last year. He will leave the rate unchanged at his next review on March 11, according to all 13 economists surveyed by Bloomberg News.
Manufacturing sales rose in the three months through December by the most since the third quarter of 2002, when volumes jumped 4.1 percent. Eleven of 15 industries recorded gains, the statistics agency said.
Meat and dairy sales advanced 4.6 percent, led by meat. That offset a fall in milk powder, butter and cheese volumes. More than half the meat and dairy production is exported, the statistics agency said.
Excluding those categories, manufacturing climbed 3.6 percent, the agency said. Analysts use the figure excluding meat and dairy as a guide for the contribution of manufacturing to New Zealand’s GDP.
GDP Contribution
“Adjusting for changes in inventory levels, we estimate that manufacturing production rose around 4 percent” in the quarter, said Borkin. “This emphasizes a turn in performance after a period of significant weakness.”
Before the latest period, manufacturing had declined for five of seven quarters.
Demand for exports is being buoyed by global growth, led by China and other Asian economies. In Australia, which buys 23 percent of New Zealand exports, growth was 0.9 percent in the fourth quarter.
The increase in home construction followed two quarters of declines, while non-residential construction fell 6.1 percent, the statistics agency said in a second report.
“We expect residential construction activity will continue to recover over the coming quarters,” said Jane Turner, an economist at ASB Bank Ltd. in Auckland. “Non residential was significantly weaker than our expectation.”
Construction lags behind home-building approvals, which surged 21 percent in the fourth quarter from the three months through September, according to a report on Jan. 29.
Hewlett-Packard, Sybase, YRC Worldwide: U.S. Equity Preview
March 7 (Bloomberg) -- Shares of the following companies may have unusual moves in U.S. trading tomorrow. Stock symbols are in parentheses, and prices are as of 5:23 p.m. in New York on March 5.
Standard & Poor’s 500 Index futures expiring in March rose 1.3 percent to 1,136.50.
AT&T Inc. (T:US): The largest U.S. telephone company said core wireline employees in its southeast region voted to ratify a three-year agreement with the Communications Workers of America covering about 30,000 people.
BCE Inc. (BCE:US): Canada’s largest telephone company may rise as much as 10 percent during the next year as it cuts costs and improves profitability, Barron’s reported.
C.H. Robinson Worldwide Inc. (CHRW:US): The freight- shipment manager may rise to $66 in the next year as the economy rebounds and boosts demand for deliveries, Barron’s reported, citing money manager Lisa Dong.
Hewlett-Packard Co. (HPQ:US) fell 0.2 percent to $51.93. The world’s largest personal-computer maker revised its first- quarter results, cutting profit by 3 cents a share, after a lawsuit against its Electronic Data Systems unit increased legal costs.
Imax Corp. (IMAX:US): “Alice in Wonderland” earned $11.9 million at 188 Imax 3-D theaters this weekend, the most ever in its history, according to Hollywood.com Box-Office.
OAO Mobile TeleSystems (MBT:US): Russia’s largest mobile- phone company may rise 25 percent during the next year as it bundles more telecommunications services for consumers, Barron’s reported, citing analyst Pieter Stalenhof.
Sybase Inc. (SY:US): The mobile software maker said it boosted its share repurchase by $150 million, and said it will use cash and stock to pay for the conversion of about $390 million of its 1.75 percent convertible notes due 2025.
Walt Disney Co. (DIS:US): “Alice in Wonderland,” the classic Lewis Carroll tale re-imagined in 3-D by director Tim Burton, earned $116.3 million this weekend. The film had the sixth-best opening ever, the best March debut, and was the first movie to cross the $100 million in the January-to-March period, Hollywood.com Box Office said.
Wipro Ltd. (WIT:US): The India-based international outsourcing company may decline along with Infosys Technologies Ltd. (INFY:US) as customers delay orders on lingering questions about the economic recovery and competition increases, Barron’s reported.
YRC Worldwide Inc. (YRCW:US): The largest U.S. trucker said it expects to complete a reverse stock split during the second quarter after the Nasdaq Stock Market notified the company it was not in compliance because shares closed at a per-share bid price of less than $1 for 30 consecutive business days.
Standard & Poor’s 500 Index futures expiring in March rose 1.3 percent to 1,136.50.
AT&T Inc. (T:US): The largest U.S. telephone company said core wireline employees in its southeast region voted to ratify a three-year agreement with the Communications Workers of America covering about 30,000 people.
BCE Inc. (BCE:US): Canada’s largest telephone company may rise as much as 10 percent during the next year as it cuts costs and improves profitability, Barron’s reported.
C.H. Robinson Worldwide Inc. (CHRW:US): The freight- shipment manager may rise to $66 in the next year as the economy rebounds and boosts demand for deliveries, Barron’s reported, citing money manager Lisa Dong.
Hewlett-Packard Co. (HPQ:US) fell 0.2 percent to $51.93. The world’s largest personal-computer maker revised its first- quarter results, cutting profit by 3 cents a share, after a lawsuit against its Electronic Data Systems unit increased legal costs.
Imax Corp. (IMAX:US): “Alice in Wonderland” earned $11.9 million at 188 Imax 3-D theaters this weekend, the most ever in its history, according to Hollywood.com Box-Office.
OAO Mobile TeleSystems (MBT:US): Russia’s largest mobile- phone company may rise 25 percent during the next year as it bundles more telecommunications services for consumers, Barron’s reported, citing analyst Pieter Stalenhof.
Sybase Inc. (SY:US): The mobile software maker said it boosted its share repurchase by $150 million, and said it will use cash and stock to pay for the conversion of about $390 million of its 1.75 percent convertible notes due 2025.
Walt Disney Co. (DIS:US): “Alice in Wonderland,” the classic Lewis Carroll tale re-imagined in 3-D by director Tim Burton, earned $116.3 million this weekend. The film had the sixth-best opening ever, the best March debut, and was the first movie to cross the $100 million in the January-to-March period, Hollywood.com Box Office said.
Wipro Ltd. (WIT:US): The India-based international outsourcing company may decline along with Infosys Technologies Ltd. (INFY:US) as customers delay orders on lingering questions about the economic recovery and competition increases, Barron’s reported.
YRC Worldwide Inc. (YRCW:US): The largest U.S. trucker said it expects to complete a reverse stock split during the second quarter after the Nasdaq Stock Market notified the company it was not in compliance because shares closed at a per-share bid price of less than $1 for 30 consecutive business days.
Retail Sales Probably Fell in February: U.S. Economy Preview
March 7 (Bloomberg) -- Sales at U.S. retailers probably declined in February as blizzards kept Americans away from malls and auto-dealer showrooms, economists said before a government report this week.
Purchases dropped 0.2 percent after a 0.5 percent gain the prior month, according to the median estimate of 56 economists surveyed by Bloomberg News before Commerce Department figures on March 12. Other reports may show the trade gap widened in January and consumers grew more confident this month.
Figures last week showing the U.S. lost fewer jobs in February than anticipated, overcoming the effects of the snowstorms that caused some companies to temporarily close, signals employment is on the verge of accelerating. More hiring and wage increases will be critical in lifting consumer spending, the biggest part of the economy.
“Retail sales likely would have squeaked out a modest gain if not for the severe snowstorms,” said Ryan Sweet, a senior economist at Moody’s Economy.com in West Chester, Pennsylvania. Nonetheless, “consumers will have to spend more freely for the recovery to sustain itself.”
A Labor Department report March 5 showed the economy lost 36,000 jobs in February and the unemployment rate held at 9.7 percent for a second month, indicating the labor market is stabilizing.
President Barack Obama, speaking at a Washington-area energy company, said the job report was “actually better than expected.” Even so, he said the number of unemployed is “more than we should tolerate” and urged Congress to pass a jobs bill to help lower unemployment.
Auto Sales
Auto sales fell last month to an annual pace of 10.4 million vehicles from 10.8 million in January, according to industry data last week. Toyota Motor Corp. sales fell 8.7 percent from a year earlier as it struggled with global recalls that halted demand for some models. Ford Motor Co., overcoming the snowstorms that curbed showroom traffic, beat General Motors Co. in monthly sales for the first time since 1998.
Excluding automobiles, retail sales were probably little changed after a 0.6 percent gain the prior month, according to the Bloomberg survey.
Chain stores turned in a better-than-forecast performance last month, compared with a low point last year, industry figures showed last week. Macy’s Inc., Abercrombie & Fitch Co. and Gap Inc. beat analysts’ estimates in February as holiday sales and spring collections tempted consumers to go shopping in a month of record snowfalls.
Same-Store Sales
February comparable-store sales climbed 4.1 percent, topping the Retail Metrics 3 percent estimate. It was the sixth straight monthly gain and the biggest in 27 months. Purchases fell 4.1 percent in February 2009, Ken Perkins, president of Swampscott, Massachusetts-based Retail Metrics, said last week.
TJX Corporation Inc., an off-price apparel chain, reported a 16 percent sales increase in the four weeks ended Feb. 27 from a year earlier.
“We achieved these sales despite the harsh snowstorms that affected many regions in the country,” said Sherry Lang, investor vice president, in a teleconference on March 4. “The month ended on a stronger note than we had anticipated.”
Households are feeling less pessimistic. The Reuters/University of Michigan preliminary index of consumer sentiment for March probably rose to 73.8 from 73.6 a month earlier, according to the Bloomberg survey before the March 12 release.
Fewer Claims
In a sign that job losses are abating, a report from the Labor Department on March 11 may show initial jobless claims fell to 460,000 last week from 469,000 the previous week, according to economists surveyed.
Stocks have recovered from a January slump prompted by concerns of a possible Greek default and government plans to boost oversight over banks. The Standard & Poor’s 500 Index has gained 6 percent since the end of January.
The economy grew at a 5.9 percent annual pace in the fourth quarter, the strongest showing in more than six years as companies tried to stabilize inventories, the government reported last month. Economists surveyed by Bloomberg early last month forecast growth will slow to 3 percent in this quarter.
A Commerce Department report on March 12 may show business inventories rose 0.2 percent in January after dropping 0.2 percent the prior month, according to economists surveyed.
As companies begin rebuilding stockpiles and consumer purchases recover, demand for imports is rising. That probably caused the trade deficit to widen to $41 billion in January from $40.2 billion in December, according to the survey median before a March 11 report from the Commerce Department. The collapse in trade earlier last year brought the deficit down to a near- decade low of $25.8 billion in May.
Bloomberg Survey
================================================================
Release Period Prior Median
Indicator Date Value Forecast
================================================================
Whlsale Inv. MOM% 3/10 Jan. -0.8% 0.2%
Federal Budget $ Blns 3/10 Feb. -193.9 -210.0
Trade Balance $ Blns 3/11 Jan. -40.2 -41.0
Initial Claims ,000’s 3/11 27-Feb 469 460
Cont. Claims ,000’s 3/11 20-Feb 4500 4495
Retail Sales MOM% 3/12 Feb. 0.5% -0.2%
Retail ex-autos MOM% 3/12 Feb. 0.6% 0.0%
Retail exauto/gas MOM% 3/12 Feb. 0.6% 0.3%
U of Mich Conf. Index 3/12 March P 73.6 73.8
Business Inv. MOM% 3/12 Jan. -0.2% 0.2%
================================================================
Purchases dropped 0.2 percent after a 0.5 percent gain the prior month, according to the median estimate of 56 economists surveyed by Bloomberg News before Commerce Department figures on March 12. Other reports may show the trade gap widened in January and consumers grew more confident this month.
Figures last week showing the U.S. lost fewer jobs in February than anticipated, overcoming the effects of the snowstorms that caused some companies to temporarily close, signals employment is on the verge of accelerating. More hiring and wage increases will be critical in lifting consumer spending, the biggest part of the economy.
“Retail sales likely would have squeaked out a modest gain if not for the severe snowstorms,” said Ryan Sweet, a senior economist at Moody’s Economy.com in West Chester, Pennsylvania. Nonetheless, “consumers will have to spend more freely for the recovery to sustain itself.”
A Labor Department report March 5 showed the economy lost 36,000 jobs in February and the unemployment rate held at 9.7 percent for a second month, indicating the labor market is stabilizing.
President Barack Obama, speaking at a Washington-area energy company, said the job report was “actually better than expected.” Even so, he said the number of unemployed is “more than we should tolerate” and urged Congress to pass a jobs bill to help lower unemployment.
Auto Sales
Auto sales fell last month to an annual pace of 10.4 million vehicles from 10.8 million in January, according to industry data last week. Toyota Motor Corp. sales fell 8.7 percent from a year earlier as it struggled with global recalls that halted demand for some models. Ford Motor Co., overcoming the snowstorms that curbed showroom traffic, beat General Motors Co. in monthly sales for the first time since 1998.
Excluding automobiles, retail sales were probably little changed after a 0.6 percent gain the prior month, according to the Bloomberg survey.
Chain stores turned in a better-than-forecast performance last month, compared with a low point last year, industry figures showed last week. Macy’s Inc., Abercrombie & Fitch Co. and Gap Inc. beat analysts’ estimates in February as holiday sales and spring collections tempted consumers to go shopping in a month of record snowfalls.
Same-Store Sales
February comparable-store sales climbed 4.1 percent, topping the Retail Metrics 3 percent estimate. It was the sixth straight monthly gain and the biggest in 27 months. Purchases fell 4.1 percent in February 2009, Ken Perkins, president of Swampscott, Massachusetts-based Retail Metrics, said last week.
TJX Corporation Inc., an off-price apparel chain, reported a 16 percent sales increase in the four weeks ended Feb. 27 from a year earlier.
“We achieved these sales despite the harsh snowstorms that affected many regions in the country,” said Sherry Lang, investor vice president, in a teleconference on March 4. “The month ended on a stronger note than we had anticipated.”
Households are feeling less pessimistic. The Reuters/University of Michigan preliminary index of consumer sentiment for March probably rose to 73.8 from 73.6 a month earlier, according to the Bloomberg survey before the March 12 release.
Fewer Claims
In a sign that job losses are abating, a report from the Labor Department on March 11 may show initial jobless claims fell to 460,000 last week from 469,000 the previous week, according to economists surveyed.
Stocks have recovered from a January slump prompted by concerns of a possible Greek default and government plans to boost oversight over banks. The Standard & Poor’s 500 Index has gained 6 percent since the end of January.
The economy grew at a 5.9 percent annual pace in the fourth quarter, the strongest showing in more than six years as companies tried to stabilize inventories, the government reported last month. Economists surveyed by Bloomberg early last month forecast growth will slow to 3 percent in this quarter.
A Commerce Department report on March 12 may show business inventories rose 0.2 percent in January after dropping 0.2 percent the prior month, according to economists surveyed.
As companies begin rebuilding stockpiles and consumer purchases recover, demand for imports is rising. That probably caused the trade deficit to widen to $41 billion in January from $40.2 billion in December, according to the survey median before a March 11 report from the Commerce Department. The collapse in trade earlier last year brought the deficit down to a near- decade low of $25.8 billion in May.
Bloomberg Survey
================================================================
Release Period Prior Median
Indicator Date Value Forecast
================================================================
Whlsale Inv. MOM% 3/10 Jan. -0.8% 0.2%
Federal Budget $ Blns 3/10 Feb. -193.9 -210.0
Trade Balance $ Blns 3/11 Jan. -40.2 -41.0
Initial Claims ,000’s 3/11 27-Feb 469 460
Cont. Claims ,000’s 3/11 20-Feb 4500 4495
Retail Sales MOM% 3/12 Feb. 0.5% -0.2%
Retail ex-autos MOM% 3/12 Feb. 0.6% 0.0%
Retail exauto/gas MOM% 3/12 Feb. 0.6% 0.3%
U of Mich Conf. Index 3/12 March P 73.6 73.8
Business Inv. MOM% 3/12 Jan. -0.2% 0.2%
================================================================
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