April 8 (Bloomberg) -- JPMorgan Chase & Co. has almost doubled the number of its Tokyo commodity traders to meet demand from utilities seeking to use coal-derivatives to hedge against price swings, said a person with knowledge of the expansion.
The second-biggest U.S. bank has increased the headcount to around 10 in the last 18 months, in part to meet the needs of utilities such as Chubu Electric Power Co. and J-Power, the country’s biggest power wholesaler, said the person, who declined to be named because the information is private.
JPMorgan joins Deutsche Bank AG and Barclays Plc in boosting sales of swaps and other products to help Japanese utilities mitigate risk from volatile fuel costs. J-Power’s profit dropped by a third in fiscal 2008 and Chubu posted a loss after benchmark Australian power-station coal prices rose to a record in July then fell 61 percent five months later.
“Utilities’ hedging needs have grown rapidly over the past few years as physical coal prices became more volatile,” said Ken Hasegawa, the energy team manager at broker Newedge in Tokyo. “The question is whether other power companies will follow suit.”
Mika Nemoto, a spokeswoman for JPMorgan Securities Japan Co., declined to comment.
J-Power, officially known as Electric Power Development Co., hired Barclays commodities banker Toyohiko Kuroda last year to bolster management of risks associated with coal procurement, Masato Uchiyama, director of the utility’s energy business division, said in an interview on April 6.
Coal Swaps
The utility, which buys 20 million metric tons of coal annually, transacts coal swaps for part of that total to hedge against price fluctuations, said Uchiyama, 54.
Swaps allow utilities to pay a fixed price for coal while another party, usually a bank, pays a floating price, based on market benchmarks. If the benchmark goes up during the term of the contract, the utility gets a payment from the bank, and if it goes down, the utility pays.
Nagoya-based Chubu Electric transacted 15 million tons worth of over-the-counter coal swaps free on board at Australia’s Newcastle port in the year ended March 31 after forming an alliance with a unit of Electricite de France SA in 2007, said Yoshio Komura, director of Chubu’s trading unit.
Japan’s third-biggest generator formed Chubu Energy Trading Inc. in 2007 to procure the fuel for resale to other users in Asia and trade derivatives, Komura said.
Spot power-station coal prices at Newcastle, the world’s largest export harbor for the fuel, retreated to an average $71.71 a ton in 2009 from $129.02 the previous year as the global economic recession eroded demand. Prices climbed to a record $192.50 in July before plunging to $75.25 in Dec. 5, 2008. Coal gained 14 cents to $94.98 a ton in the week ended April 3, according to the globalCOAL NEWC Index.
Japan, the world’s biggest power-station coal importer in 2009, ships in about 92 million tons annually. Australian suppliers led by Xstrata Plc and Rio Tinto Plc account for more than half while Indonesia, the second-biggest supplier, provides about 20 percent, according to the finance ministry.
Wednesday, April 7, 2010
Monday, April 5, 2010
Zero Fees From India Has Bankers Relying on Private Share Sales
April 6 (Bloomberg) -- India’s best quarter for stock sales in at least six years was accompanied by a slump in fees as investment banks competed to take state-owned companies public in deals that netted them almost no revenue.
Companies led by NMDC Ltd. raised 441 billion rupees ($9.8 billion) through March 31, the most for a single quarter since Bloomberg began compiling data in 2004. While the value of sales doubled from the previous three months, fees slumped by half to 2 billion rupees, according to Bloomberg data.
More than half of sales were by state-owned companies that paid near-zero fees and crowded out private firms, putting pressure on banking revenues. JPMorgan Chase & Co. and ICICI Securities Ltd. are among underwriters predicting a rebound in charges this year as more private companies tap stock markets for capital and the government overhauls the way it pays banks.
“The private-sector IPO pipeline is very strong and those deals will result in lucrative fees for the banks,” said Jagannadham Thunuguntla, head of equity at SMC Capitals Ltd., the investment banking arm of New Delhi-based SMC Group.
At least 55 private companies are awaiting approval from the securities regulator to sell shares, according to the Securities and Exchange Board of India’s Web site.
Indian state-owned companies that sold shares last quarter paid an average 0.05 percent of what they raised as fees, according to a study by SMC Capitals released March 30. That compared with 2.88 percent for private enterprises.
Wrong Approach
State-run United Bank of India, a lender in the country’s northern and eastern parts, paid 0.56 percent fees for its 3.25 billion rupee initial public offering in February, managed by Edelweiss Capital Ltd., Enam Securities Pvt. and SBI Capital Markets Ltd., according to data compiled by Bloomberg.
A similar-sized IPO by Jubilant Foodworks Ltd., which is controlled by brothers Shyam and Hari Bhartia and runs the Domino’s Pizza chain in India, netted 2.72 percent fees for the sole bookrunner Kotak Mahindra Capital Co.
A price war between investment banks seeking league-table credit isn’t necessarily in the government’s interest, the official in charge of selling state assets said last month.
“We had some cases where the banks bid at zero fees and the department was more than unhappy with that kind of approach,” Sumit Bose, secretary of the department for disinvestment, said in a March 6 interview in New Delhi. “We are looking at tweaking the rules to ensure that we continue to make a good selection” without putting too much emphasis on fees, he said.
Dominant Force
As part of the new regulations, “the weight will be given to technical, including their experience, what sort of experience they have had internationally, nationally,” along with how competitive fees are, Bose said.
The government will remain a dominant force in India’s equity capital market. It plans to raise $8.9 billion selling shares in state-owned companies in the fiscal year through March 2011 -- more than half the total value of last year’s offerings in India.
Investment banks are willing to sacrifice fees for the cachet of having been picked to manage large sales, said Indraneil Borkakoty, head of equity capital markets at Kotak Investment Banking, a unit of Kotak Mahindra.
“The state transactions are global in terms of scale and size. There’s a huge visibility factor,” Mumbai-based Borkakoty said in an interview. “Doing these deals helps us get league table credit and build relationships with investors across geographies” that the bank can tap into for future deals.
Raft of Sales
Kotak ranked second after Citigroup Inc. in arranging stock sales in the first quarter, after helping state companies NMDC, India’s biggest iron-ore producer, and Rural Electrification Corp. issue shares, according to Bloomberg data.
Vedika Bhandarkar, head of India investment banking at JPMorgan in Mumbai, said several private companies that had planned to sell stock in the first quarter delayed offerings on concerns state firms would soak up investors’ money. As those companies revive offerings, fees will improve, she said.
Since March 22, nine private companies -- including Avantha Power & Infrastructure Ltd., Electrosteel Integrated Ltd. and SKS Microfinance Ltd. filed documents with the regulator for IPOs.
Fees for IPOs of private firms average 2 percent to 3 percent in India, about 0.5 percentage point more than secondary offerings, Bhandarkar said. JPMorgan ranked eighth in local equity sales in the quarter, advising on a share sale by National Thermal Power Corp.
“Most of the issuance this quarter has been from government companies,” Bhandarkar said in a March 30 interview. “If you take state companies out of the list, the fee numbers will be different.”
Companies led by NMDC Ltd. raised 441 billion rupees ($9.8 billion) through March 31, the most for a single quarter since Bloomberg began compiling data in 2004. While the value of sales doubled from the previous three months, fees slumped by half to 2 billion rupees, according to Bloomberg data.
More than half of sales were by state-owned companies that paid near-zero fees and crowded out private firms, putting pressure on banking revenues. JPMorgan Chase & Co. and ICICI Securities Ltd. are among underwriters predicting a rebound in charges this year as more private companies tap stock markets for capital and the government overhauls the way it pays banks.
“The private-sector IPO pipeline is very strong and those deals will result in lucrative fees for the banks,” said Jagannadham Thunuguntla, head of equity at SMC Capitals Ltd., the investment banking arm of New Delhi-based SMC Group.
At least 55 private companies are awaiting approval from the securities regulator to sell shares, according to the Securities and Exchange Board of India’s Web site.
Indian state-owned companies that sold shares last quarter paid an average 0.05 percent of what they raised as fees, according to a study by SMC Capitals released March 30. That compared with 2.88 percent for private enterprises.
Wrong Approach
State-run United Bank of India, a lender in the country’s northern and eastern parts, paid 0.56 percent fees for its 3.25 billion rupee initial public offering in February, managed by Edelweiss Capital Ltd., Enam Securities Pvt. and SBI Capital Markets Ltd., according to data compiled by Bloomberg.
A similar-sized IPO by Jubilant Foodworks Ltd., which is controlled by brothers Shyam and Hari Bhartia and runs the Domino’s Pizza chain in India, netted 2.72 percent fees for the sole bookrunner Kotak Mahindra Capital Co.
A price war between investment banks seeking league-table credit isn’t necessarily in the government’s interest, the official in charge of selling state assets said last month.
“We had some cases where the banks bid at zero fees and the department was more than unhappy with that kind of approach,” Sumit Bose, secretary of the department for disinvestment, said in a March 6 interview in New Delhi. “We are looking at tweaking the rules to ensure that we continue to make a good selection” without putting too much emphasis on fees, he said.
Dominant Force
As part of the new regulations, “the weight will be given to technical, including their experience, what sort of experience they have had internationally, nationally,” along with how competitive fees are, Bose said.
The government will remain a dominant force in India’s equity capital market. It plans to raise $8.9 billion selling shares in state-owned companies in the fiscal year through March 2011 -- more than half the total value of last year’s offerings in India.
Investment banks are willing to sacrifice fees for the cachet of having been picked to manage large sales, said Indraneil Borkakoty, head of equity capital markets at Kotak Investment Banking, a unit of Kotak Mahindra.
“The state transactions are global in terms of scale and size. There’s a huge visibility factor,” Mumbai-based Borkakoty said in an interview. “Doing these deals helps us get league table credit and build relationships with investors across geographies” that the bank can tap into for future deals.
Raft of Sales
Kotak ranked second after Citigroup Inc. in arranging stock sales in the first quarter, after helping state companies NMDC, India’s biggest iron-ore producer, and Rural Electrification Corp. issue shares, according to Bloomberg data.
Vedika Bhandarkar, head of India investment banking at JPMorgan in Mumbai, said several private companies that had planned to sell stock in the first quarter delayed offerings on concerns state firms would soak up investors’ money. As those companies revive offerings, fees will improve, she said.
Since March 22, nine private companies -- including Avantha Power & Infrastructure Ltd., Electrosteel Integrated Ltd. and SKS Microfinance Ltd. filed documents with the regulator for IPOs.
Fees for IPOs of private firms average 2 percent to 3 percent in India, about 0.5 percentage point more than secondary offerings, Bhandarkar said. JPMorgan ranked eighth in local equity sales in the quarter, advising on a share sale by National Thermal Power Corp.
“Most of the issuance this quarter has been from government companies,” Bhandarkar said in a March 30 interview. “If you take state companies out of the list, the fee numbers will be different.”
Asian Stocks Fluctuate as Japan Slide Offsets Commodity Gains
April 6 (Bloomberg) -- Asian stocks fluctuated as the MSCI Asia Pacific Index hovered near a 19-month high, with declines in Japanese stocks offsetting gains in raw material producers.
Toyota Motor Corp., the world’s biggest automaker, dropped 1.2 percent after U.S. government said the company “knowingly hid a dangerous defect” that caused some of its vehicles to accelerate unexpectedly. BHP Billiton Ltd., Australia’s biggest oil producer and the world’s largest mining company, advanced 2 percent after copper and oil prices advanced. Canon Inc., the world’s biggest camera maker, slid 1.6 percent, as the yen appreciated, dampening the earnings outlook for Japanese exporters.
“Markets and commodities are returning to levels from before the collapse of Lehman Brothers Holdings Inc.” in September 2008, said Fumiyuki Nakanishi, a senior strategist at SMBC Friend Securities Co. in Tokyo.
The MSCI Asia Pacific Index gained 0.1 percent to 126.98 as of 10:23 a.m. in Tokyo after falling as much as 0.1 percent. An equal number of stocks rose as fell. The gauge, which earlier touched its highest level since Aug. 12, 2008, has climbed 11 percent from its 2010 low on Feb. 8 as a Federal Reserve pledge to keep borrowing costs down and better-than-estimated economic data boosted investor sentiment.
Japan’s Nikkei 225 Stock Average slipped 0.6 percent to 11,266.71 in Tokyo. Australia’s S&P/ASX 200 Index and New Zealand’s NZX 50 Index both advanced 0.7 percent. Markets in Hong Kong and Thailand are closed today for holidays.
Toyota Motor Corp., the world’s biggest automaker, dropped 1.2 percent after U.S. government said the company “knowingly hid a dangerous defect” that caused some of its vehicles to accelerate unexpectedly. BHP Billiton Ltd., Australia’s biggest oil producer and the world’s largest mining company, advanced 2 percent after copper and oil prices advanced. Canon Inc., the world’s biggest camera maker, slid 1.6 percent, as the yen appreciated, dampening the earnings outlook for Japanese exporters.
“Markets and commodities are returning to levels from before the collapse of Lehman Brothers Holdings Inc.” in September 2008, said Fumiyuki Nakanishi, a senior strategist at SMBC Friend Securities Co. in Tokyo.
The MSCI Asia Pacific Index gained 0.1 percent to 126.98 as of 10:23 a.m. in Tokyo after falling as much as 0.1 percent. An equal number of stocks rose as fell. The gauge, which earlier touched its highest level since Aug. 12, 2008, has climbed 11 percent from its 2010 low on Feb. 8 as a Federal Reserve pledge to keep borrowing costs down and better-than-estimated economic data boosted investor sentiment.
Japan’s Nikkei 225 Stock Average slipped 0.6 percent to 11,266.71 in Tokyo. Australia’s S&P/ASX 200 Index and New Zealand’s NZX 50 Index both advanced 0.7 percent. Markets in Hong Kong and Thailand are closed today for holidays.
Sunday, April 4, 2010
Softbank Falls on Concern Users Will Switch Carrier
April 5 (Bloomberg) -- Softbank Corp. fell the most in more than four months in Tokyo after the Nikkei newspaper said a government plan to make it easier for mobile phone users to switch networks will favor rival NTT DoCoMo Inc.
Softbank, Japan’s third-largest mobile phone operator, fell 3.9 percent to 2,248 yen as of 9:52 a.m. on the Tokyo Stock Exchange, the biggest decline since Nov. 27. DoCoMo, the country’s largest carrier, rose 0.9 percent to 144,400 yen, compared with a 0.5 percent gain by the benchmark Nikkei 225 Stock Average.
Japan’s government plans to draw up guidelines allowing phone users to switch providers without changing handsets by the summer, the Nikkei said, citing Masamitsu Naito, senior vice minister for communications. Subscribers may leave Softbank, the exclusive distributor of Apple Inc.’s iPhone in Japan, for DoCoMo, which is perceived to offer wider coverage and higher voice quality, the paper said.
“The share reaction is natural,” considering the relative weakness of Softbank’s network, said Hitoshi Hayakawa, a Tokyo- based analyst at Credit Suisse Group AG. Hayakawa has an “outperform” rating on Softbank shares and recommends holding DoCoMo stock.
Removing the restrictions would allow subscribers to change providers by inserting a Subscriber Identity Module or SIM phone card, a chip that holds user data, into a handset of a different carrier. Users currently must buy a new handset when changing providers, often agreeing to contracts lasting two years.
Softbank, Japan’s third-largest mobile phone operator, fell 3.9 percent to 2,248 yen as of 9:52 a.m. on the Tokyo Stock Exchange, the biggest decline since Nov. 27. DoCoMo, the country’s largest carrier, rose 0.9 percent to 144,400 yen, compared with a 0.5 percent gain by the benchmark Nikkei 225 Stock Average.
Japan’s government plans to draw up guidelines allowing phone users to switch providers without changing handsets by the summer, the Nikkei said, citing Masamitsu Naito, senior vice minister for communications. Subscribers may leave Softbank, the exclusive distributor of Apple Inc.’s iPhone in Japan, for DoCoMo, which is perceived to offer wider coverage and higher voice quality, the paper said.
“The share reaction is natural,” considering the relative weakness of Softbank’s network, said Hitoshi Hayakawa, a Tokyo- based analyst at Credit Suisse Group AG. Hayakawa has an “outperform” rating on Softbank shares and recommends holding DoCoMo stock.
Removing the restrictions would allow subscribers to change providers by inserting a Subscriber Identity Module or SIM phone card, a chip that holds user data, into a handset of a different carrier. Users currently must buy a new handset when changing providers, often agreeing to contracts lasting two years.
Asian Stocks Rise as U.S. Jobs Fuel Recovery Hopes; Canon Gains
April 5 (Bloomberg) -- Asian stocks rose, led by companies reliant on sales in North America, as U.S. job reports boosted confidence the global economy is recovering.
Canon Inc., the world’s biggest camera maker, climbed 2.4 percent as the yen weakened against the dollar, lifting the earnings outlook for Japanese exporters. Toshiba Corp., Japan’s biggest memory-chip maker, gained 0.8 percent in Tokyo after the Nikkan Kogyo newspaper reported the company will double its annual production capacity of electric-vehicle motors. Samsung Electronics Co. rose 1.4 percent in Seoul after the Maeil Business Newspaper reported the company will expand a chip- making factory.
“There is increasing growth optimism now given that the job situation in the U.S. is getting a little more relaxed,” said Roger Groebli, Singapore-based head of financial-market analysis at LG Capital Management, part of the group that oversees $84 billion. “Exporters will benefit from that.”
The MSCI Asia Pacific Index rose 0.2 percent to 126.76 as of 10:34 a.m. in Tokyo, with about three stocks advancing for each one that declined. The gauge has climbed 11 percent from a more-than-two-month low on Feb. 8 as a Federal Reserve pledge to keep borrowing costs low and a Japanese bank-lending program eased concern that budget deficits in Europe will derail the revival in the global economy.
Japan’s Nikkei 225 Stock Average climbed 0.5 percent. Singapore’s Straits Times Index increased 0.6 percent and Malaysia’s Kuala Lumpur Composite Index rose 0.4 percent. Markets in Australia, Hong Kong, China, Taiwan and New Zealand are closed today for a holiday.
U.S. Payrolls
U.S. markets resume trading today after a holiday on April 2. Futures on the Standard & Poor’s 500 Index climbed 0.5 percent after figures from the Labor Department showed U.S. payrolls rose for the third time in the past five months and the most since March 2007. The unemployment rate held at 9.7 percent.
“It’s a good, solid report,” Treasury Secretary Timothy F. Geithner said in a Bloomberg Television interview in New York. “It shows we’re getting stronger, and the economy is now creating jobs.”
The MSCI Asia Pacific Index added 1.7 percent last week as economic reports spurred confidence in the global recovery, boosting commodity prices. Stocks in the MSCI measure trade at 16.5 times estimated earnings, compared with 15.1 times for the Standard & Poor’s 500 Index in the U.S. and 13.2 times for the Stoxx Europe 600 Index.
Exporters in Japan advanced on optimism the weaker yen will boost the value of overseas sales at when converted into the companies’ home currency. The yen depreciated to as low as 94.79 per dollar today from 93.85 at the 3 p.m. close of stock trading on April 2.
Increased Output
Canon, which gets 28 percent of its revenue in the Americas, climbed 2.4 percent to 4,505 yen. Toyota Motor Corp., which derives 31 percent of its revenue in North America, increased 1.1 percent to 3,815 yen.
Toshiba increased 0.8 percent to 508 yen. The company will double its annual production capacity of electric-vehicle motors to 120,000 units by the end of March 2012, the Nikkan Kogyo newspaper said.
Samsung Electronics gained 1.4 percent to 869,000 won after Maeil Business Newspaper reported the company will add a new semiconductor chip line at its factory in Hwaseong, South Korea.
The company, Asia’s biggest chipmaker, also rose after the price of the benchmark DDR2 dynamic random access memory, or DRAM, chip rose 1.7 percent to $3.04 on April 2, ending a four- day decline, according to Dramexchange Technology Inc.
Hynix Semiconductor Inc., the world’s second-largest computer-memory chipmaker, advanced 1.6 percent to 28,600 won.
Canon Inc., the world’s biggest camera maker, climbed 2.4 percent as the yen weakened against the dollar, lifting the earnings outlook for Japanese exporters. Toshiba Corp., Japan’s biggest memory-chip maker, gained 0.8 percent in Tokyo after the Nikkan Kogyo newspaper reported the company will double its annual production capacity of electric-vehicle motors. Samsung Electronics Co. rose 1.4 percent in Seoul after the Maeil Business Newspaper reported the company will expand a chip- making factory.
“There is increasing growth optimism now given that the job situation in the U.S. is getting a little more relaxed,” said Roger Groebli, Singapore-based head of financial-market analysis at LG Capital Management, part of the group that oversees $84 billion. “Exporters will benefit from that.”
The MSCI Asia Pacific Index rose 0.2 percent to 126.76 as of 10:34 a.m. in Tokyo, with about three stocks advancing for each one that declined. The gauge has climbed 11 percent from a more-than-two-month low on Feb. 8 as a Federal Reserve pledge to keep borrowing costs low and a Japanese bank-lending program eased concern that budget deficits in Europe will derail the revival in the global economy.
Japan’s Nikkei 225 Stock Average climbed 0.5 percent. Singapore’s Straits Times Index increased 0.6 percent and Malaysia’s Kuala Lumpur Composite Index rose 0.4 percent. Markets in Australia, Hong Kong, China, Taiwan and New Zealand are closed today for a holiday.
U.S. Payrolls
U.S. markets resume trading today after a holiday on April 2. Futures on the Standard & Poor’s 500 Index climbed 0.5 percent after figures from the Labor Department showed U.S. payrolls rose for the third time in the past five months and the most since March 2007. The unemployment rate held at 9.7 percent.
“It’s a good, solid report,” Treasury Secretary Timothy F. Geithner said in a Bloomberg Television interview in New York. “It shows we’re getting stronger, and the economy is now creating jobs.”
The MSCI Asia Pacific Index added 1.7 percent last week as economic reports spurred confidence in the global recovery, boosting commodity prices. Stocks in the MSCI measure trade at 16.5 times estimated earnings, compared with 15.1 times for the Standard & Poor’s 500 Index in the U.S. and 13.2 times for the Stoxx Europe 600 Index.
Exporters in Japan advanced on optimism the weaker yen will boost the value of overseas sales at when converted into the companies’ home currency. The yen depreciated to as low as 94.79 per dollar today from 93.85 at the 3 p.m. close of stock trading on April 2.
Increased Output
Canon, which gets 28 percent of its revenue in the Americas, climbed 2.4 percent to 4,505 yen. Toyota Motor Corp., which derives 31 percent of its revenue in North America, increased 1.1 percent to 3,815 yen.
Toshiba increased 0.8 percent to 508 yen. The company will double its annual production capacity of electric-vehicle motors to 120,000 units by the end of March 2012, the Nikkan Kogyo newspaper said.
Samsung Electronics gained 1.4 percent to 869,000 won after Maeil Business Newspaper reported the company will add a new semiconductor chip line at its factory in Hwaseong, South Korea.
The company, Asia’s biggest chipmaker, also rose after the price of the benchmark DDR2 dynamic random access memory, or DRAM, chip rose 1.7 percent to $3.04 on April 2, ending a four- day decline, according to Dramexchange Technology Inc.
Hynix Semiconductor Inc., the world’s second-largest computer-memory chipmaker, advanced 1.6 percent to 28,600 won.
Service Industries Probably Accelerated: U.S. Economy Preview
April 4 (Bloomberg) -- Service industries probably expanded in March at the fastest pace since 2007, a sign the U.S. recovery is broadening as the job market turns around, economists said before reports this week.
The Institute for Supply Management’s index of non- manufacturing businesses, which make up about 90 percent of the economy, rose to 54, according to the median forecast in a Bloomberg News survey before figures tomorrow. Readings of 50 signal expansion. Another report may show fewer Americans signed contracts to buy previously owned homes in February, indicating real estate remains the economy weak spot.
The manufacturing rebound that helped the U.S. dig out of the worst recession since the 1930s is starting to extend to other industries, benefiting companies such as Carnival Corp. and Best Buy Inc. A government report last week showed employment rose 162,000 in March, the most in three years, making a sustained recovery more likely.
“Services are making a slow and steady comeback,” said David Semmens, an economist at Standard Chartered Bank in New York. “The job gains are encouraging. We’re going to be looking for momentum.”
The Tempe, Arizona-based group’s figures would follow a reading of 53 for February. The estimates of 63 economists surveyed ranged from 51 to 55. The projected reading would be the highest since June 2007.
The unemployment rate was 9.7 percent in March for a third month, the Labor Department reported April 2. Payrolls rose for the third time in the past five months and by the most since March 2007, signaling companies are becoming more confident that the economy is healing.
Reflecting the improvement in the services industry, the Standard & Poor’s Supercomposite Retailing Index has climbed 11 percent this year, outpacing a 5.6 percent gain in the broader S&P 500 gauge.
Best Buy Sales
Best Buy, the largest U.S. electronics retailer, is among companies seeing demand pick up. The Richfield, Minnesota-based merchant last month reported fourth-quarter profit that exceeded analysts’ estimates as discounts helped boost sales.
Carnival, the biggest cruise-line operator, last month raised its full-year profit forecast as ticket prices rebounded from 2009’s lows amid more bookings.
“The booking environment continued to improve,” Chief Executive Officer Micky Arison said in a March 23 statement. “We returned to top line revenue growth after a challenging 2009.”
Housing, which helped trigger the recession, has yet to show signs of a sustained rebound. The National Association of Realtors’ index of purchase agreements, or pending home sales, probably fell 1 percent in February after a 7.6 percent drop the prior month, according to the survey median. The report is also due tomorrow.
Fed Minutes
Minutes of the Federal Reserve’s March meeting, due April 6, may shed more light on policy makers’ assessment of the economy at the time they pledged to keep the benchmark interest rate “exceptionally low” for an “extended period.”
The Fed may report on April 7 that consumer credit increased in February for the second straight month. Economists also project Commerce Department figures on April 9 may show inventories at wholesalers rose in February for the first time in three months.
Bloomberg Survey
================================================================
==
Release Period Prior Median
Indicator Date Value Forecast
================================================================
==
ISM NonManu Index 4/5 March 53.0 54.0
Pending Homes MOM% 4/5 Feb. -7.6% -1.0%
Cons. Credit $ Blns 4/7 Feb. 5.0 1.2
Initial Claims ,000’s 4/8 3-Apr 439 435
Cont. Claims ,000’s 4/8 27-Mar 4662 4650
Whlsale Inv. MOM% 4/9 Feb. -0.1% 0.4%
=========================================================
The Institute for Supply Management’s index of non- manufacturing businesses, which make up about 90 percent of the economy, rose to 54, according to the median forecast in a Bloomberg News survey before figures tomorrow. Readings of 50 signal expansion. Another report may show fewer Americans signed contracts to buy previously owned homes in February, indicating real estate remains the economy weak spot.
The manufacturing rebound that helped the U.S. dig out of the worst recession since the 1930s is starting to extend to other industries, benefiting companies such as Carnival Corp. and Best Buy Inc. A government report last week showed employment rose 162,000 in March, the most in three years, making a sustained recovery more likely.
“Services are making a slow and steady comeback,” said David Semmens, an economist at Standard Chartered Bank in New York. “The job gains are encouraging. We’re going to be looking for momentum.”
The Tempe, Arizona-based group’s figures would follow a reading of 53 for February. The estimates of 63 economists surveyed ranged from 51 to 55. The projected reading would be the highest since June 2007.
The unemployment rate was 9.7 percent in March for a third month, the Labor Department reported April 2. Payrolls rose for the third time in the past five months and by the most since March 2007, signaling companies are becoming more confident that the economy is healing.
Reflecting the improvement in the services industry, the Standard & Poor’s Supercomposite Retailing Index has climbed 11 percent this year, outpacing a 5.6 percent gain in the broader S&P 500 gauge.
Best Buy Sales
Best Buy, the largest U.S. electronics retailer, is among companies seeing demand pick up. The Richfield, Minnesota-based merchant last month reported fourth-quarter profit that exceeded analysts’ estimates as discounts helped boost sales.
Carnival, the biggest cruise-line operator, last month raised its full-year profit forecast as ticket prices rebounded from 2009’s lows amid more bookings.
“The booking environment continued to improve,” Chief Executive Officer Micky Arison said in a March 23 statement. “We returned to top line revenue growth after a challenging 2009.”
Housing, which helped trigger the recession, has yet to show signs of a sustained rebound. The National Association of Realtors’ index of purchase agreements, or pending home sales, probably fell 1 percent in February after a 7.6 percent drop the prior month, according to the survey median. The report is also due tomorrow.
Fed Minutes
Minutes of the Federal Reserve’s March meeting, due April 6, may shed more light on policy makers’ assessment of the economy at the time they pledged to keep the benchmark interest rate “exceptionally low” for an “extended period.”
The Fed may report on April 7 that consumer credit increased in February for the second straight month. Economists also project Commerce Department figures on April 9 may show inventories at wholesalers rose in February for the first time in three months.
Bloomberg Survey
================================================================
==
Release Period Prior Median
Indicator Date Value Forecast
================================================================
==
ISM NonManu Index 4/5 March 53.0 54.0
Pending Homes MOM% 4/5 Feb. -7.6% -1.0%
Cons. Credit $ Blns 4/7 Feb. 5.0 1.2
Initial Claims ,000’s 4/8 3-Apr 439 435
Cont. Claims ,000’s 4/8 27-Mar 4662 4650
Whlsale Inv. MOM% 4/9 Feb. -0.1% 0.4%
=========================================================
Gulf Stocks: ADCB, Al-Madina, Kuwait Finance, Kuwait & Gulf
April 4 (Bloomberg) -- The Bahrain All Share Index advanced 1.4 percent to 1563.67, the highest level since October. Qatar’s Doha Securities Market 20 Index increased 1.3 percent.
The following stocks rose or fell in the Gulf. Symbols are in parentheses.
Abu Dhabi Commercial Bank PJSC (ADCB UH) climbed 2.4 percent to 2.14 dirhams, the highest since Nov. 25. The United Arab Emirates’ third-biggest bank by assets said it “concluded” a treasury joint venture with Australia’s Macquarie Bank Ltd. Its infrastructure venture with Macquarie, which was set up in 2005, remains in place.
Al-Madina for Finance and Investment Co. SAKC (ALMADINA KK) rose 3.1 percent, the most in two weeks, to 67 fils. The Kuwaiti Islamic investment company said it is appealing against an arbitration initiated by Global Investment House KSCC and the result won’t affect its financial results, according to a statement to the local bourse. Global is seeking $10 million from Al-Madina.
Islamic Arab Insurance Co. (SALAMA UH) declined 5.3 percent, the most since Jan. 26, to 0.90 dirham. The U.A.E.’s Islamic insurer known as Salama said its board recommended paying no dividend for 2009.
Kuwait Finance and Investment Co. (KFIC KK) declined 1.8 percent to 112 fils, the lowest since Feb. 15. The Kuwait-based investment banking and asset management firm reported a full- year loss of 12.5 million dinars ($43.3 million) from 25.3 million dinars in 2008, according to a statement to the stock exchange.
Kuwait & Gulf Link Transport Co. (KGL KK) increased 7.4 percent to 365 fils, the highest level in a week. The cargo shipper said it won a 3.9 million-dinar contract from the government, according to a statement to the local bourse.
The following stocks rose or fell in the Gulf. Symbols are in parentheses.
Abu Dhabi Commercial Bank PJSC (ADCB UH) climbed 2.4 percent to 2.14 dirhams, the highest since Nov. 25. The United Arab Emirates’ third-biggest bank by assets said it “concluded” a treasury joint venture with Australia’s Macquarie Bank Ltd. Its infrastructure venture with Macquarie, which was set up in 2005, remains in place.
Al-Madina for Finance and Investment Co. SAKC (ALMADINA KK) rose 3.1 percent, the most in two weeks, to 67 fils. The Kuwaiti Islamic investment company said it is appealing against an arbitration initiated by Global Investment House KSCC and the result won’t affect its financial results, according to a statement to the local bourse. Global is seeking $10 million from Al-Madina.
Islamic Arab Insurance Co. (SALAMA UH) declined 5.3 percent, the most since Jan. 26, to 0.90 dirham. The U.A.E.’s Islamic insurer known as Salama said its board recommended paying no dividend for 2009.
Kuwait Finance and Investment Co. (KFIC KK) declined 1.8 percent to 112 fils, the lowest since Feb. 15. The Kuwait-based investment banking and asset management firm reported a full- year loss of 12.5 million dinars ($43.3 million) from 25.3 million dinars in 2008, according to a statement to the stock exchange.
Kuwait & Gulf Link Transport Co. (KGL KK) increased 7.4 percent to 365 fils, the highest level in a week. The cargo shipper said it won a 3.9 million-dinar contract from the government, according to a statement to the local bourse.
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