Feb. 12 (Bloomberg) -- South Africa’s government has the “space to cushion the economy” if a slowdown in economic growth persists, said Kuben Naidoo, head of the National Treasury’s budget office.
“We have a lot of room if growth is low for a longer time,” Naidoo told lawmakers in Cape Town today. “We will continue with a counter cyclical fiscal policy, however long it takes for the economy to recover.”
Finance Minister Trevor Manuel yesterday cut his economic growth forecast for this year to 1.2 percent, the lowest since 1998 and down from 3 percent estimated in October. Falling corporate profits and a slump in consumer spending will cut tax revenue, pushing the budget deficit to 3.8 percent of gross domestic product in the year through March 2010 from an estimated 1 percent this year.
The government doesn’t want the ratio of debt to GDP to “deteriorate too rapidly,” Naidoo said. If the government needs to run a wider deficit and raise borrowing, it plans to return to “safer” levels of debt once the economy recovers, he added.
South Africa’s debt will rise to 26 percent of GDP in the year through March 2010, from about 23 percent in the current fiscal year, according to the Treasury’s Budget Review published yesterday. It will reach 27 percent in the 2011 fiscal year, the Treasury forecast.
Thursday, February 12, 2009
LSE Set to Appoint Rolet Today as New Chief Executive, FT Says
Feb. 13 (Bloomberg) -- London Stock Exchange Group Plc will today appoint Xavier Rolet as chief executive officer, replacing Clara Furse, the Financial Times reported, without attribution.
Rolet has experience in dealing with exchanges and ran trading operations at Goldman Sachs Group Inc., Lehman Brothers Holdings Inc. and Dresdner Kleinwort, the FT said.
LSE spokesman, Alastair Fairbrother, declined to comment, when contacted by Bloomberg News.
Rolet has experience in dealing with exchanges and ran trading operations at Goldman Sachs Group Inc., Lehman Brothers Holdings Inc. and Dresdner Kleinwort, the FT said.
LSE spokesman, Alastair Fairbrother, declined to comment, when contacted by Bloomberg News.
Asian Stocks Rise on U.S. Mortgage Aid, Higher Retail Sales
Feb. 13 (Bloomberg) -- Asian stocks rose, led by banks and consumer companies, on speculation the U.S. will provide relief for homeowners and after retail sales in the world’s biggest economy unexpectedly increased.
Australia & New Zealand Banking Group Ltd., Australia’s third largest, jumped 7.1 percent in Sydney as the country’s senate passed a $28 billion stimulus package. Hitachi Ltd. added 3.1 percent as the company and its partners were named the preferred group to win a U.K. train contract. Rio Tinto Ltd., the world’s No. 3 mining company, fell 3.9 percent on concern the sale of assets to Aluminum Corp. of China will hurt profits.
“Reports that the U.S. is coming out with a support package for the housing market demonstrates the government’s drive to bring about an economic recovery,” said Kiyoshi Ishigane, a Tokyo-based senior strategist at Mitsubishi UFJ Asset Management Co., which oversees about $61 billion. “The market is headed for a rebound if policies are effective.”
The MSCI Asia Pacific Index advanced 0.8 percent to 81.82 at 11:07 a.m. in Tokyo, snapping a four-day, 2.7 percent drop. The gauge has lost 8.9 percent this year, extending 2008’s record 43 percent, as the credit crisis dragged the world’s biggest economies into recession.
The Nikkei 225 Stock Average rose 1.5 percent to 7,818.96 at in Tokyo. Australia’s S&P/ASX 200 Index rose 0.8 percent. All benchmark indexes in the region advanced except South Korea’s.
Futures on the Standard & Poor’s 500 Index fell 0.3 percent. The index staged a late rally in New York yesterday, erasing a 3.1 percent loss to gain 0.2 percent as news of the housing plan emerged.
Mortgage Aid
The Obama administration’s housing plan will use government money to help reduce interest rates for struggling borrowers, while asking lawmakers to approve more ways to modify mortgages, according to a person briefed on the proposal. U.S. Treasury Secretary Timothy Geithner intends to announce the plan in coming days, the person said.
“The outlook for a dose of relief for U.S. homeowners helped markets there stage a rebound, while economic data was fairly positive as well,” Soichiro Monji, chief strategist at Tokyo-based Daiwa SB Investments Ltd., which manages $53 billion, said in an interview with Bloomberg Television. “The market here has been beaten down recently and is due for a bounce.”
Governments around the world are stepping up efforts to revive global growth that the International Monetary Fund predicted two weeks ago will grind almost to a halt this year. The number of Americans collecting jobless benefits reached the highest on record, though sales at U.S. retailers unexpectedly climbed in January, halting a six-month slide, government reports showed yesterday.
Stimulus Package
Australia & New Zealand Banking Group jumped 7.1 percent to A$12.73 in Sydney. Macquarie Group Ltd., Australia’s largest investment bank, added 3 percent to A$24.10.
The country’s Senate approved in a second vote a A$42 billion ($28 billion) stimulus package aimed at ensuring the economy doesn’t enter its first recession in 18 years.
Hitachi, which plans to build a manufacturing site in the U.K., rose 3.1 percent to 268 yen in Tokyo. The U.K. Department for Transport today named Agility Trains, a group that includes Hitachi, as the preferred bidder for a 7.5 billion-pound ($10.7 billion) contract to build and maintain a fleet of Super Express trains, replacing existing stock.
Pioneer Corp. tumbled 20 percent to 142 yen in Tokyo. The company said yesterday it will fire 10,000 workers and close its television operations as losses this year are expected to climb to 130 billion yen ($1.44 billion).
‘Don’t Like This Deal’
More than 100,000 job cuts have been announced by listed Japanese companies in the past six months as the global recession has pummeled Japan’s capital goods and export-oriented manufacturers.
Rio Tinto fell 3.9 percent to A$49.98. The stock also fell in London trading yesterday after Aluminum Corp., known as Chinalco, agreed to invest $19.5 billion by buying convertible bonds and stakes in projects in China, the U.S. and Australia.
“We don’t like this deal and don’t think it is the best option,” analysts at Goldman Sachs JBWere Pty Ltd. wrote in a report dated yesterday. “We think Rio is at a strategic and marketing disadvantage versus its peers going forward.”
Australia & New Zealand Banking Group Ltd., Australia’s third largest, jumped 7.1 percent in Sydney as the country’s senate passed a $28 billion stimulus package. Hitachi Ltd. added 3.1 percent as the company and its partners were named the preferred group to win a U.K. train contract. Rio Tinto Ltd., the world’s No. 3 mining company, fell 3.9 percent on concern the sale of assets to Aluminum Corp. of China will hurt profits.
“Reports that the U.S. is coming out with a support package for the housing market demonstrates the government’s drive to bring about an economic recovery,” said Kiyoshi Ishigane, a Tokyo-based senior strategist at Mitsubishi UFJ Asset Management Co., which oversees about $61 billion. “The market is headed for a rebound if policies are effective.”
The MSCI Asia Pacific Index advanced 0.8 percent to 81.82 at 11:07 a.m. in Tokyo, snapping a four-day, 2.7 percent drop. The gauge has lost 8.9 percent this year, extending 2008’s record 43 percent, as the credit crisis dragged the world’s biggest economies into recession.
The Nikkei 225 Stock Average rose 1.5 percent to 7,818.96 at in Tokyo. Australia’s S&P/ASX 200 Index rose 0.8 percent. All benchmark indexes in the region advanced except South Korea’s.
Futures on the Standard & Poor’s 500 Index fell 0.3 percent. The index staged a late rally in New York yesterday, erasing a 3.1 percent loss to gain 0.2 percent as news of the housing plan emerged.
Mortgage Aid
The Obama administration’s housing plan will use government money to help reduce interest rates for struggling borrowers, while asking lawmakers to approve more ways to modify mortgages, according to a person briefed on the proposal. U.S. Treasury Secretary Timothy Geithner intends to announce the plan in coming days, the person said.
“The outlook for a dose of relief for U.S. homeowners helped markets there stage a rebound, while economic data was fairly positive as well,” Soichiro Monji, chief strategist at Tokyo-based Daiwa SB Investments Ltd., which manages $53 billion, said in an interview with Bloomberg Television. “The market here has been beaten down recently and is due for a bounce.”
Governments around the world are stepping up efforts to revive global growth that the International Monetary Fund predicted two weeks ago will grind almost to a halt this year. The number of Americans collecting jobless benefits reached the highest on record, though sales at U.S. retailers unexpectedly climbed in January, halting a six-month slide, government reports showed yesterday.
Stimulus Package
Australia & New Zealand Banking Group jumped 7.1 percent to A$12.73 in Sydney. Macquarie Group Ltd., Australia’s largest investment bank, added 3 percent to A$24.10.
The country’s Senate approved in a second vote a A$42 billion ($28 billion) stimulus package aimed at ensuring the economy doesn’t enter its first recession in 18 years.
Hitachi, which plans to build a manufacturing site in the U.K., rose 3.1 percent to 268 yen in Tokyo. The U.K. Department for Transport today named Agility Trains, a group that includes Hitachi, as the preferred bidder for a 7.5 billion-pound ($10.7 billion) contract to build and maintain a fleet of Super Express trains, replacing existing stock.
Pioneer Corp. tumbled 20 percent to 142 yen in Tokyo. The company said yesterday it will fire 10,000 workers and close its television operations as losses this year are expected to climb to 130 billion yen ($1.44 billion).
‘Don’t Like This Deal’
More than 100,000 job cuts have been announced by listed Japanese companies in the past six months as the global recession has pummeled Japan’s capital goods and export-oriented manufacturers.
Rio Tinto fell 3.9 percent to A$49.98. The stock also fell in London trading yesterday after Aluminum Corp., known as Chinalco, agreed to invest $19.5 billion by buying convertible bonds and stakes in projects in China, the U.S. and Australia.
“We don’t like this deal and don’t think it is the best option,” analysts at Goldman Sachs JBWere Pty Ltd. wrote in a report dated yesterday. “We think Rio is at a strategic and marketing disadvantage versus its peers going forward.”
BAE Systems Seeks Indian Partners to Build Military Vessels
Feb. 12 (Bloomberg) -- BAE Systems Plc, Europe’s biggest defense company, is in talks with Indian shipbuilders as it seeks to win contracts for surveillance vessels as the country beefs up coastal security after terror attacks in Mumbai.
BAE has held discussions with India’s state-owned shipyards and private builders to explore opportunities, said Julian Scopes, president of the London-based company’s Indian unit, in an interview. BAE can offer designs and technologies, or build warships with partners, Scopes said in Bangalore yesterday.
India’s government has pledged to boost surveillance at sea after terrorists infiltrated the financial capital in boats in November and killed 164 people. BAE’s push to win naval work comes as India seeks to reduce its reliance on Russia as its main military supplier.
“The Indians would like to broaden out their supply base,” said Steven Zaloga, a senior analyst at Teal Group, a Fairfax, Virginia-based consultant. “India has a fairly active domestic shipbuilding program, but when they have bought overseas, they tend to buy from the Russians.”
At least 10 terrorists arrived in Mumbai on an inflatable dinghy after hijacking an Indian fishing boat off the west coast and killing its crew, Home Minister Palaniappan Chidambaram said. They attacked the main railway station, two five-star hotels, a Jewish center and a hospital with automatic rifles, grenades and explosives.
Vulnerability
The attacks highlighted the vulnerability of India’s coastline, and the government will create a coastal command for overall supervision of maritime and coastal security, Chidambaram told parliament Dec. 11.
“They can take one of our designs and build them in India or we may have a joint design center,” Scopes said. “It’s for building ships more efficiently and effectively and cheaper.”
Separately, India and Russia haven’t agreed on conditions over the sale of the Russian aircraft carrier Gorshkov due to differences regarding costs. The Indian Navy agreed to buy the Gorshkov for $1.5 billion five years ago.
Under the terms of the agreement, Russia was to overhaul the 44,500-metric ton carrier and supply 28 MiG-29K fighter jets and other components. It subsequently raised the asking price by $1.2 billion, saying refit costs had increased.
“They had a certain amount of difficulty with the Russians and I am sure that is why BAE is speaking with them,” Zaloga added.
Russia has been India’s principal supplier of fighter planes and equipment in the past. Lockheed Martin Corp. and Boeing Co., the largest U.S. military contractors, made their first military sales to India only within the past 12 months.
Armored Vehicle
Scopes said BAE plans to make its joint venture with Mahindra & Mahindra Ltd., India’s biggest sport-utility vehicle maker, a base for exporting armored vehicles in Asia.
BAE will hold 26 percent of the venture and Mumbai-based Mahindra & Mahindra will own 74 percent. The partnership will build a version of BAE’s RG-31 mine-protected vehicle in India.
The RG-31 is an all-steel, welded-armor vehicle designed to protect occupants from explosions by antitank mines. The joint venture will have headquarters in New Delhi with an initial workforce of 50 to 60 people, and operations are scheduled to start in the second quarter of 2009, BAE said.
BAE has held discussions with India’s state-owned shipyards and private builders to explore opportunities, said Julian Scopes, president of the London-based company’s Indian unit, in an interview. BAE can offer designs and technologies, or build warships with partners, Scopes said in Bangalore yesterday.
India’s government has pledged to boost surveillance at sea after terrorists infiltrated the financial capital in boats in November and killed 164 people. BAE’s push to win naval work comes as India seeks to reduce its reliance on Russia as its main military supplier.
“The Indians would like to broaden out their supply base,” said Steven Zaloga, a senior analyst at Teal Group, a Fairfax, Virginia-based consultant. “India has a fairly active domestic shipbuilding program, but when they have bought overseas, they tend to buy from the Russians.”
At least 10 terrorists arrived in Mumbai on an inflatable dinghy after hijacking an Indian fishing boat off the west coast and killing its crew, Home Minister Palaniappan Chidambaram said. They attacked the main railway station, two five-star hotels, a Jewish center and a hospital with automatic rifles, grenades and explosives.
Vulnerability
The attacks highlighted the vulnerability of India’s coastline, and the government will create a coastal command for overall supervision of maritime and coastal security, Chidambaram told parliament Dec. 11.
“They can take one of our designs and build them in India or we may have a joint design center,” Scopes said. “It’s for building ships more efficiently and effectively and cheaper.”
Separately, India and Russia haven’t agreed on conditions over the sale of the Russian aircraft carrier Gorshkov due to differences regarding costs. The Indian Navy agreed to buy the Gorshkov for $1.5 billion five years ago.
Under the terms of the agreement, Russia was to overhaul the 44,500-metric ton carrier and supply 28 MiG-29K fighter jets and other components. It subsequently raised the asking price by $1.2 billion, saying refit costs had increased.
“They had a certain amount of difficulty with the Russians and I am sure that is why BAE is speaking with them,” Zaloga added.
Russia has been India’s principal supplier of fighter planes and equipment in the past. Lockheed Martin Corp. and Boeing Co., the largest U.S. military contractors, made their first military sales to India only within the past 12 months.
Armored Vehicle
Scopes said BAE plans to make its joint venture with Mahindra & Mahindra Ltd., India’s biggest sport-utility vehicle maker, a base for exporting armored vehicles in Asia.
BAE will hold 26 percent of the venture and Mumbai-based Mahindra & Mahindra will own 74 percent. The partnership will build a version of BAE’s RG-31 mine-protected vehicle in India.
The RG-31 is an all-steel, welded-armor vehicle designed to protect occupants from explosions by antitank mines. The joint venture will have headquarters in New Delhi with an initial workforce of 50 to 60 people, and operations are scheduled to start in the second quarter of 2009, BAE said.
Wednesday, February 11, 2009
Research In Motion Falls as Profit Margins Narrow
Feb. 11 (Bloomberg) -- Research In Motion Ltd. fell the most in almost five months on the Nasdaq after saying profit will come in at the low end of its targets, signaling the BlackBerry maker sacrificed margins to gain customers.
Gross margin, or the percentage of sales left after production costs, also will be at the lower end, Research In Motion said today. The results suggest the latest models, such as the Storm and the Bold, have won fewer customers than some of the older BlackBerrys, according to analysts.
“There was a lot of hope that the Bold and Storm would be blockbuster products,” said Scott Pope, a Chicago-based analyst with First Analysis Corp. “Customers may not be responding as well as expected to the newer products.”
Subscriber gains will be 20 percent higher than the 2.9 million forecast in December, Research In Motion said. The company introduced more consumer-friendly models to compete with Apple Inc.’s iPhone 3G, vying for a dwindling pool of spending as the economic slump intensifies. Consumer spending in the U.S. fell in December for a record sixth consecutive month, capping the worst year since 1961.
“They cannot grow in the way they’ve been growing if they just focus on the enterprise,” said Anil Doradla, an analyst with William Blair & Co. in Chicago. “The only issue and challenge is the minute you get into the consumer space, some of the business models are changing.”
The stock fell $8.28, or 15 percent, to $48.76 at 4 p.m. New York time in Nasdaq Stock Market trading, the biggest decline since Sept. 26. Research In Motion has dropped 48 percent in the past year.
Storm Deals
The company introduced the touch-screen Storm in November in the U.S. exclusively through Verizon Wireless. The two began a “buy-one-get-one-free” sale last week as the recession deepens into the worst financial crisis in at least 25 years. Amazon.com Inc., the world’s largest online retailer, now sells the Storm for $99.99 with a service plan, according to its Web site.
Waterloo, Ontario-based Research In Motion had projected fourth-quarter profit of at least 83 cents a share, compared with the 86-cent average of estimates compiled by Bloomberg. The company said in December that margins narrowed as new phones, such as the BlackBerry Storm, made up for a larger percentage of sales.
So-called smart phones such as the Storm are capable of surfing the Web and downloading video at high speeds. Apple, based in Cupertino, California, debuted the latest model of the iPhone in July. Palm Inc. also plans to introduce a new model, the Pre, in the first half of the year.
The new devices will heighten competition for Research In Motion as the pool of new subscribers in the U.S. shrinks, with more than 80 percent of people already carrying a mobile phone.
Smart Phones
The smart-phone market overall will grow next year even as sales of other devices drop, research firm IDC said in December. The market will expand 8.9 percent worldwide in 2009, compared with a 1.9 percent drop for the rest of the handset industry.
Research In Motion expects fourth-quarter sales to be “at or near the mid-point” of the forecast range of $3.3 billion to $3.5 billion. Analysts on average projected $3.4 billion.
“Tech has been able to perform well, and now we’ve got RIM coming out with this and it shows that no sector is safe,” said Suzanne Bodlovic, an independent equity futures trader at the Chicago Board of Trade. “Everyone’s earnings are going to be less then expected.”
Gross margin, or the percentage of sales left after production costs, also will be at the lower end, Research In Motion said today. The results suggest the latest models, such as the Storm and the Bold, have won fewer customers than some of the older BlackBerrys, according to analysts.
“There was a lot of hope that the Bold and Storm would be blockbuster products,” said Scott Pope, a Chicago-based analyst with First Analysis Corp. “Customers may not be responding as well as expected to the newer products.”
Subscriber gains will be 20 percent higher than the 2.9 million forecast in December, Research In Motion said. The company introduced more consumer-friendly models to compete with Apple Inc.’s iPhone 3G, vying for a dwindling pool of spending as the economic slump intensifies. Consumer spending in the U.S. fell in December for a record sixth consecutive month, capping the worst year since 1961.
“They cannot grow in the way they’ve been growing if they just focus on the enterprise,” said Anil Doradla, an analyst with William Blair & Co. in Chicago. “The only issue and challenge is the minute you get into the consumer space, some of the business models are changing.”
The stock fell $8.28, or 15 percent, to $48.76 at 4 p.m. New York time in Nasdaq Stock Market trading, the biggest decline since Sept. 26. Research In Motion has dropped 48 percent in the past year.
Storm Deals
The company introduced the touch-screen Storm in November in the U.S. exclusively through Verizon Wireless. The two began a “buy-one-get-one-free” sale last week as the recession deepens into the worst financial crisis in at least 25 years. Amazon.com Inc., the world’s largest online retailer, now sells the Storm for $99.99 with a service plan, according to its Web site.
Waterloo, Ontario-based Research In Motion had projected fourth-quarter profit of at least 83 cents a share, compared with the 86-cent average of estimates compiled by Bloomberg. The company said in December that margins narrowed as new phones, such as the BlackBerry Storm, made up for a larger percentage of sales.
So-called smart phones such as the Storm are capable of surfing the Web and downloading video at high speeds. Apple, based in Cupertino, California, debuted the latest model of the iPhone in July. Palm Inc. also plans to introduce a new model, the Pre, in the first half of the year.
The new devices will heighten competition for Research In Motion as the pool of new subscribers in the U.S. shrinks, with more than 80 percent of people already carrying a mobile phone.
Smart Phones
The smart-phone market overall will grow next year even as sales of other devices drop, research firm IDC said in December. The market will expand 8.9 percent worldwide in 2009, compared with a 1.9 percent drop for the rest of the handset industry.
Research In Motion expects fourth-quarter sales to be “at or near the mid-point” of the forecast range of $3.3 billion to $3.5 billion. Analysts on average projected $3.4 billion.
“Tech has been able to perform well, and now we’ve got RIM coming out with this and it shows that no sector is safe,” said Suzanne Bodlovic, an independent equity futures trader at the Chicago Board of Trade. “Everyone’s earnings are going to be less then expected.”
BCE Profit Exceeds Estimates; Company Boosts Dividend
Feb. 11 (Bloomberg) -- BCE Inc., Canada’s largest phone company, forecast earnings for this year that topped analysts’ estimates and increased its dividend after adding more mobile- phone subscribers last quarter.
Profit, excluding some costs and gains, will climb more than 5 percent this year, Toronto-based BCE said today. That amounts to more than C$2.36 ($1.90) a share, beating the C$2.12 average of estimates compiled by Bloomberg. The company also predicted “stable” revenue.
BCE raised its annual dividend payout by 5 percent. George Cope, who became chief executive officer in July, reinstated dividends and bought back shares to win over investors after the stock fell 37 percent last year. The shares slumped after the failure of a C$52 billion takeover attempt from investors led by the Ontario Teachers’ Pension Plan, Canada’s third-largest pension fund.
“It’s good to see that George Cope is in place and seems to be moving the company forward, and seems to be taking action,” Wayne Kozun, head of equities at Teachers’, said in an interview today. The Toronto-based pension fund retains an undisclosed stake in BCE. “We’re helping them focus on areas that will improve shareholder value.”
BCE is competing with Rogers Communications Inc. and Telus Corp. for customers amid a shrinking Canadian economy. Cope is cutting jobs and using the savings to invest more in the Bell premium wireless service for smart phones and the Solo budget brand. BCE will add or revamp 65 kiosks to sell Solo mobile phones this year, Cope said.
Discount Market
“The discount market for wireless has opened up and we’ve got to be playing in it,” Cope told reporters today. “In this economy, people are going to be more price-sensitive.”
BCE climbed 36 cents, or 1.4 percent, to C$25.49 at 4:16 p.m. on the Toronto Stock Exchange.
BCE lost 72,000 residential land-line customers last quarter, less than the 110,000 predicted by National Bank analyst Greg MacDonald. BCE added 117,000 net new wireless subscribers, missing MacDonald’s 158,000 estimate.
Excluding reorganization costs and other items, fourth- quarter profit amounted to 55 cents a share, compared with the 51-cent average of estimates compiled by Bloomberg.
The company reported a net loss of C$48 million, or 6 cents a share, compared with a profit of C$2.35 billion, or C$2.93, a year earlier. BCE booked a gain from the sale of its satellite unit in the 2007 quarter. In the 2008 period, the carrier incurred 47 cents a share in costs on investments and 14 cents for restructuring.
Takeover Offer
Sales were little changed at C$4.49 billion. Cope is scheduled to outline his strategy at BCE’s shareholder meeting in Montreal Feb. 17. This is BCE’s first quarter since Ontario Teachers’ and its partners abandoned their takeover offer in December.
Teachers’, Providence Equity Partners Inc., Madison Dearborn Partners LLC and the buyout unit of Merrill Lynch & Co. dropped their bid Dec. 11 after an auditor said the transaction would render the carrier insolvent. BCE is seeking C$1.2 billion in damages from the bidders, arguing they withdrew from the takeover prematurely.
-- With reporting by Doug Alexander in Toronto. Editors: Julie Alnwick, Jonathan Thaw
Profit, excluding some costs and gains, will climb more than 5 percent this year, Toronto-based BCE said today. That amounts to more than C$2.36 ($1.90) a share, beating the C$2.12 average of estimates compiled by Bloomberg. The company also predicted “stable” revenue.
BCE raised its annual dividend payout by 5 percent. George Cope, who became chief executive officer in July, reinstated dividends and bought back shares to win over investors after the stock fell 37 percent last year. The shares slumped after the failure of a C$52 billion takeover attempt from investors led by the Ontario Teachers’ Pension Plan, Canada’s third-largest pension fund.
“It’s good to see that George Cope is in place and seems to be moving the company forward, and seems to be taking action,” Wayne Kozun, head of equities at Teachers’, said in an interview today. The Toronto-based pension fund retains an undisclosed stake in BCE. “We’re helping them focus on areas that will improve shareholder value.”
BCE is competing with Rogers Communications Inc. and Telus Corp. for customers amid a shrinking Canadian economy. Cope is cutting jobs and using the savings to invest more in the Bell premium wireless service for smart phones and the Solo budget brand. BCE will add or revamp 65 kiosks to sell Solo mobile phones this year, Cope said.
Discount Market
“The discount market for wireless has opened up and we’ve got to be playing in it,” Cope told reporters today. “In this economy, people are going to be more price-sensitive.”
BCE climbed 36 cents, or 1.4 percent, to C$25.49 at 4:16 p.m. on the Toronto Stock Exchange.
BCE lost 72,000 residential land-line customers last quarter, less than the 110,000 predicted by National Bank analyst Greg MacDonald. BCE added 117,000 net new wireless subscribers, missing MacDonald’s 158,000 estimate.
Excluding reorganization costs and other items, fourth- quarter profit amounted to 55 cents a share, compared with the 51-cent average of estimates compiled by Bloomberg.
The company reported a net loss of C$48 million, or 6 cents a share, compared with a profit of C$2.35 billion, or C$2.93, a year earlier. BCE booked a gain from the sale of its satellite unit in the 2007 quarter. In the 2008 period, the carrier incurred 47 cents a share in costs on investments and 14 cents for restructuring.
Takeover Offer
Sales were little changed at C$4.49 billion. Cope is scheduled to outline his strategy at BCE’s shareholder meeting in Montreal Feb. 17. This is BCE’s first quarter since Ontario Teachers’ and its partners abandoned their takeover offer in December.
Teachers’, Providence Equity Partners Inc., Madison Dearborn Partners LLC and the buyout unit of Merrill Lynch & Co. dropped their bid Dec. 11 after an auditor said the transaction would render the carrier insolvent. BCE is seeking C$1.2 billion in damages from the bidders, arguing they withdrew from the takeover prematurely.
-- With reporting by Doug Alexander in Toronto. Editors: Julie Alnwick, Jonathan Thaw
Asian Stocks Fall on Doubts U.S. Stimulus Will Revive Growth
Feb. 12 (Bloomberg) -- Asian stocks fell for a fourth day, led by financial and consumer-related companies, on concern U.S. measures to alleviate the financial crisis won’t be enough to revive the world’s largest economy.
Mitsubishi UFJ Financial Group Ltd., Japan’s biggest lender, fell 3.1 percent as U.S. Treasury Secretary Timothy Geithner said he needs time to work out details of a bank-rescue plan unveiled on Feb. 10. Daikin Industries Ltd., the biggest Japanese maker of air conditioners, dropped 2.9 percent after cutting its profit forecast. Newcrest Mining Ltd., Australia’s largest gold producer, rose 4.6 percent after gold futures climbed in New York.
“The market had been awaiting the financial bailout plan with high hopes, but what was announced didn’t have much meat on the bone,” Juichi Wako, a strategist at Tokyo-based Nomura Securities Co., said in an interview with Bloomberg Television. “It’s unfortunate, but stocks are in for a rough day.”
The MSCI Asia Pacific Index fell 0.8 percent to 82.29 at 10:42 a.m. in Tokyo. More than two stocks advanced for each one that declined. The gauge has lost 8.2 percent this year, furthering a record 43 percent tumble in 2008, as the credit crisis triggered by the collapse of the U.S. housing market spun into a global recession.
The Nikkei 225 Stock Average slumped 1.7 percent, to 7,814.01. The Japanese market resumed trading today following yesterday’s holiday. Australia’s S&P/ASX 200 Index climbed 1.6 percent, while South Korea’s Kospi index slipped 0.8 percent.
Futures on the Standard & Poor’s 500 Index were little changed. The index gained 0.8 percent yesterday as Congress debated a $789 billion spending plan. U.S. House and Senate lawmakers agreed on a compromise late yesterday, a smaller bill than those originally approved by both groups.
Stimulus Agreement
Geithner announced two days ago a financial rescue plan that included as much as $2 trillion in funding for programs aimed at spurring new lending and addressing banks’ illiquid assets. The U.S. government was going to proceed “carefully” on the proposal, Geithner told Congress yesterday.
Governments around the world are stepping up efforts to revive global growth that the International Monetary Fund predicted two weeks ago will grind almost to a halt this year. The Bank of Korea cut its benchmark interest rate today to a record-low 2 percent to revive an economy headed for the first recession in more than a decade.
Mitsubishi UFJ fell 3.1 percent to 470 yen in Tokyo. Toyota Motor Corp., which makes 37 percent of its sales in North America, dropped 2.6 percent to 3,060 yen.
Daikin fell 2.9 percent to 2,165 yen after it cut its profit forecast by 59 percent for the year ending March 31 as the slumping global economy dragged sales.
Newcrest Mining climbed 4.6 percent to A$33.83. Gold futures in New York jumped 3.3 percent yesterday, extending the previous day’s 2.4 percent advance. Silver and platinum jumped to four- month highs.
Mitsubishi UFJ Financial Group Ltd., Japan’s biggest lender, fell 3.1 percent as U.S. Treasury Secretary Timothy Geithner said he needs time to work out details of a bank-rescue plan unveiled on Feb. 10. Daikin Industries Ltd., the biggest Japanese maker of air conditioners, dropped 2.9 percent after cutting its profit forecast. Newcrest Mining Ltd., Australia’s largest gold producer, rose 4.6 percent after gold futures climbed in New York.
“The market had been awaiting the financial bailout plan with high hopes, but what was announced didn’t have much meat on the bone,” Juichi Wako, a strategist at Tokyo-based Nomura Securities Co., said in an interview with Bloomberg Television. “It’s unfortunate, but stocks are in for a rough day.”
The MSCI Asia Pacific Index fell 0.8 percent to 82.29 at 10:42 a.m. in Tokyo. More than two stocks advanced for each one that declined. The gauge has lost 8.2 percent this year, furthering a record 43 percent tumble in 2008, as the credit crisis triggered by the collapse of the U.S. housing market spun into a global recession.
The Nikkei 225 Stock Average slumped 1.7 percent, to 7,814.01. The Japanese market resumed trading today following yesterday’s holiday. Australia’s S&P/ASX 200 Index climbed 1.6 percent, while South Korea’s Kospi index slipped 0.8 percent.
Futures on the Standard & Poor’s 500 Index were little changed. The index gained 0.8 percent yesterday as Congress debated a $789 billion spending plan. U.S. House and Senate lawmakers agreed on a compromise late yesterday, a smaller bill than those originally approved by both groups.
Stimulus Agreement
Geithner announced two days ago a financial rescue plan that included as much as $2 trillion in funding for programs aimed at spurring new lending and addressing banks’ illiquid assets. The U.S. government was going to proceed “carefully” on the proposal, Geithner told Congress yesterday.
Governments around the world are stepping up efforts to revive global growth that the International Monetary Fund predicted two weeks ago will grind almost to a halt this year. The Bank of Korea cut its benchmark interest rate today to a record-low 2 percent to revive an economy headed for the first recession in more than a decade.
Mitsubishi UFJ fell 3.1 percent to 470 yen in Tokyo. Toyota Motor Corp., which makes 37 percent of its sales in North America, dropped 2.6 percent to 3,060 yen.
Daikin fell 2.9 percent to 2,165 yen after it cut its profit forecast by 59 percent for the year ending March 31 as the slumping global economy dragged sales.
Newcrest Mining climbed 4.6 percent to A$33.83. Gold futures in New York jumped 3.3 percent yesterday, extending the previous day’s 2.4 percent advance. Silver and platinum jumped to four- month highs.
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