FTSE 100	5640.57, +38.27	Dow	10567.33, +2.95
FTSE 250	9865.29, +90.61	Nasdaq	2358.95, +18.27
FTSE All Share	2882.08, +19.82	S&P 500	1145.61, +5.17
Nikkei	10664.95,+101.03	Hang Seng	21228.76, +20.47
Oil (Crude)	$82.09	Gold	$1108.10
Base Rate	0.5%	10 Yr Gilt	4.08%
£/$	1.4957	£/€	1.0974
1 month LIBOR	0.541	3 month LIBOR	0.643

 

Markets

London - UK stocks closed higher on Wednesday, buoyed by strength in commodity stocks, supported by trade data from China, and in banks and insurers as Wall Street opened up strong. The FTSE100 closed 38.27 points higher at 5640.57.

Miners were strong as copper prices rose after data showed Chinese exports and imports grew faster than expected in February raised hopes for a global economic recovery. Fresnillo, Xstrata, Vedanta Resources, Lonmin and Rio Tinto were 1.8 to 3.2 percent higher. Energy stocks were higher, supported by a rally in crude prices which rose above $82 a barrel after a US government oil inventory report showed an unexpected drop in gasoline stockpiles. Royal Dutch Shell, BG Group and Cairn Energy added 0.8-1.5 percent. But Tullow Oil fell 0.3 percent after it posted a 92 percent fall in 2009 net profit.

Banks were higher with HSBC up 0.7 percent, while RBS and Lloyds Banking Group gained 3.9 percent and 3.6 percent respectively. Standard Chartered added 0.5 percent in spite of the stock trading ex-dividend. Barclays added 0.6 percent. The bank was said to be looking to buy a retail bank in the US to extend its presence after acquiring Lehman Brothers North American operations in 2008, the Wall Street Journal reported.

ICAP jumped 4.5 percent higher, excited by news its mid cap peer Tullett Prebon was in preliminary offer talks. Tullett shares jumped 25.7 percent with Australia’s Macquarie and Bank of China mentioned as possible predators. British Airways gained 3.7 percent after it, American Airlines and Iberia offered to cede a number of lucrative trans-Atlantic slots in a bid to gain EU antitrust immunity for their alliance.
BATS was the biggest faller, down 3.1 percent as it traded ex-dividend. Admiral, Schroder’s, Serco Group, Shire and Tui Travel also traded ex-dividend.

New York - US stocks rose on Wednesday, with the Nasdaq ending at its highest level in more than 18 months, on strength in the financial services sector and an upbeat report on wholesale inventories. The DJIA closed 2.95 points higher at 10567.33, the Nasdaq added 18.27 points to finish at 2358.05, its highest level since August 2008, and the S&P500 closed 5.17 points higher at 1145.61.

Bank stocks rose on upbeat analyst comments and bullish statements from some executives. Citibank rose 3.6 percent after the company priced a $2bn offering of trust preferred securities. Bank of America rose nearly 2 percent. AIG gained over 10 percent as investors welcomed the company’s recent asset sales. Fannie Mae and Freddie Mac also gained significant ground. Energy stocks weakened as oil prices pared earlier gains. Oil briefly traded above $83 a barrel after the government reported a smaller than expected increase in oil supplies and a dip in gasoline inventory, but ended 60 cents higher to close at $82.09 a barrel.

In economic news, the US Commerce Department said wholesale inventories fell 0.2 percent in January, after a 1 percent drop the month before, raising expectations that consumer demand is strengthening. Separately, the Labour Department said fewer states reported increases in unemployment in January.
The Treasury Department said the government suffered a record $220.9bn budget deficit in February, after a short-fall of $42.6bn in January. It was the 17th consecutive monthly deficit and was slightly smaller than the $221bn shortfall economists had forecasts. Facet Biotech soared 66 percent after Abbott Labs announced plans to acquire the company for $27 a share. Abbott gained about 0.7 percent. Airline stocks rose on growing expectations that 2010 is turning into a profitable year for the industry. Shares of UAL and Continental Airlines added 5 percent.

The dollar slipped versus the euro but rose against the yen and the pound. The price of oil rose 60 cents to close at $82.09 after hitting a high of $83.03 earlier in the session. Gold fell $14.20 to close at $1,108.10 an ounce. The price of the 10 year note fell, pushing the yield to 3.71 percent. The government sold $21bn worth of reopened 10 year notes Wednesday as part of a $74bn offering of US debt this week.

Tokyo - The Nikkei average rose today, with exporters such as Sony Corp climbing on a weaker yen and after the Nasdaq rallied on data showing US wholesale inventories fell unexpectedly in January and sales hit their highest in more than a year. The Nikkei average closed 64.07 points higher at 10627.99.

Economics

UK Industrial Production (Jan) 10.30 gmt

Like the retail spending data, adverse weather conditions in the UK in January are expected to have led to a sharp decline in manufacturing production that will more than offset the rise in gas and electricity production.

US Wholesale inventories (Jan) 15.00 gmt

The monthly inventory figures are likely to get more attention than usual given the strong influence that they are having on the headline GDP readings and estimates. Wholesale inventories account for around 30 percent of total business inventories, and a flat reading is expected in January.

Corporate

Dignity posted a 6 percent rise in full year pre-tax profit, aided by a steady growth in funeral operations, and said it remained positive about its full year outlook. The company also raised its 2009 dividend by 10 percent. CE Mike McCollum said "The current year has started well and the group’s performance is in line with the board’s expectations". For the 52 weeks ended December 25, the company said its pre-tax profit rose to £37.5m from £35.4m last year. Revenue grew 5 percent to £184.7m. Analysts on average were expecting a full year pre-tax profit of £36.1m. The company declared a final dividend of 8.07 pence, taking its total dividend for the year to 12.1 pence, up from last year’s 11 pence.

Carlyle Group has ended bid talks with UK waste management company Shanks after it rejected Carlyle’s latest 120 pence a share offer and itself pulled out of talks. Earlier this week, Shanks knocked back a final offer from Carlyle valuing the business at £476m, lower then the £536m, or 135 pence per share, which the private equity firm offered in December. In a statement the company said "In response to the announcement by Shanks on March 9, Carlyle announces that it has terminated all discussions with Shanks regarding a possible offer for Shanks, and has no current intention of making an offer for Shanks".

Morrisons beat forecasts with a 21 percent rise in annual profit, driven by its focus on low prices and fresh foods, and hiked its dividend despite an uncertain consumer outlook. The company said its made profit before tax and one off items of £767m in the year ended January 31. That compared with an average forecast of £757m. The dividend was raised 41 percent to 8.2 pence a share as the group reaped the benefits of a three year drive to improve its operating systems and distribution. The company said "We expect the economic environment to remain challenging, disposable incomes to be under pressure and value to be a high priority for consumers". Morrisons outperformed bigger rivals Tesco, Asda and Sainsbury on sales for most of the past two years, helped by its focus on low prices, promotions and fresh food counters. Sales are stores open at least a year rose 6 percent, excluding fuel and VAT sales tax, over the year.

Old Mutual said its plans to sell its life business and partly float its asset management operations in the US as part of a strategic shake up aimed at simplifying its complex structure. The overhaul will reduce Old Mutual’s debt by at least £1.5bn and will deliver cost savings of £100m a year by the end of 2012. Old Mutual had a 2009 adjusted pre-tax operating profit of £1.7bn, up from £1.14bn the previous year.

Computacenter posted a better than expected 26 percent rise in pre-tax profit for 2009, reflecting a strong focus on higher margin IT services, and said it expected steady growth in 2010. The company reported adjusted pre-tax profit of £54.2m in revenue of £2.5bn, 2.2 percent lower than in 2008. Computacenter said "The increase in the group’s annual service contract base is clear evidence that customers are turning to Computacenter to help them to reduce their operating costs. As a result we expect steady revenue growth in 2010". The company is paying a second dividend of 8 pence a share, giving a total payout for the year of 11 pence, up from 8.2 pence in 2008. Analysts expected the firm to post full year revenue of £2.47bn and adjusted pre-tax profit of £51.2m.

Home Retail blamed snow in January for sales falls at both its Argos and Homebase businesses but said annual profit would be slightly ahead of current market hopes. The firm said it expects to make an underlying pre-tax profit of around £290m for the year to February 27 2010, ahead of expectations of £285m prior to the statement. CE Terry Duddy "For the new financial year, we continue to plan cautiously given the uncertain economic outlook". Home Retail said sales at Argos stores open a year fell 9.4 percent in the eight weeks to February 27, the bulk of the group’s fourth quarter. That compares with analysts forecasts of a fall of 7 percent, and a rise of 0.1 percent in the 18 weeks to January 2. Argos’s sales were also impacted by its spring/summer catalogue being released one week later than last year. Sales at Homebase were down 0.6 percent on the same basis. That compares with analysts forecasts of a fall of 2 percent and a rise of 4 percent in the prior period. Gross margins were down 100 basis points at Argos and down 425 basis points at Homebase, reflecting the pressure on buying margins from the weakness of sterling versus the US dollar and price cuts.

JD Wetherspoon unveiled a new £530m debt facility and said it would start paying dividends again as first half pre-tax profit rose 17.5 percent. The company said underlying pre-tax profit rose to £36.2m in the 26 weeks to January 24. Wetherspoon said it would pay a total dividend of 12 pence a share and, in light of the refinancing, rewarding shareholders with a special dividend of 7 pence per share. The company scrapped dividend payments this time last year pending successful completion of a refinancing. Wetherspoon said it had agreed a new £530m banking facility, expiring March 2014, with a syndicate of eleven banks, comprising a mix of new and current lenders. That will replace its previous £435m facility which was due to expire in December this year.

The above details are provided for information only and are not intended to be construed as solicitation for the sale or purchase of any particular investment nor as specific investment advice.

 

Posted: March 11th, 2010 under Asset Management.
Comments: none

 

FTSE 100	5602.30, -4.42	Dow	10564.38, +11.86
FTSE 250	9774.68, -11.71	Nasdaq	2340.68, +8.47
FTSE All Share	2862.26, -2.21	S&P 500	1140.44, +1.94
Nikkei	10563.92, -3.73	Hang Seng	21208.29, +0.74
Oil (Crude)	$81.49, -$0.38	Gold	$1122.90, -$1.70
Base Rate	0.5%	10 Yr Gilt	4.06%
£/$	1.492	£/€	1.1001
1 month LIBOR	0.541	3 month LIBOR	0.643

 

Markets

London - The FTSE 100 slipped 4.42 points to close at 5,602.30 yesterday. Liberty International pushed property companies lower after reporting net asset value that missed analysts’ estimates. Imperial Tobacco lost 2.5% after UBS lowered its recommendation for the cigarette maker to “sell” from “neutral”, citing a 41 percent rally in the shares over the past 12 months. Antofagasta gained 1.1%, even though it reported a drop in full year net income to $667.7 million. However, the copper producer said it is seeking a mining licence in Pakistan that may rival its largest project following “very good” talks with the head of the provincial government. This morning the blue chip index falls 7.66 points to 5,594.64.

New York - US indices made small gains yesterday, one year to the day after their worst close in 12 years. Since that day the Dow has gained 61.2%, the S&P 500 68% and the Nasdaq 84%. However, the pace of the advance has slowed this year, as investors have gone from pricing in an economic recovery to waiting for evidence that the recovery has legs. Yesterday, the Dow Jones rose 11.86 points to 10,564.38, the S&P 500 added 1.94 points to 1,140.44 and the Nasdaq gained 8.47 points to 2,340.68. Money flowed out of commodity related stocks as metal prices fell, and into the telecom and transportation sectors. Cisco Systems lifted telecoms after unveiling a higher capacity router that AT&T, the biggest US telecom company, said it had successfully tested. Airlines were boosted after major US carriers said they would continue to explore new fees and cost-cutting measures to enhance profitability, while a report showed business travel picked up. Elsewhere in the transportation sector, Morgan Stanley reiterated its upbeat view on railroads.

 Tokyo - The Nikkei edged 3.73 points lower to 10,563.92 this morning. Renewed concerns over deflation, following a report from the central bank, sent investors to the sidelines. Elsewhere a gauge of commodity-transport fees dropped hurting shares in the sector.

Hong Kong - The Hang Seng rose 0.74 points to 21,208.29 today. A drop among shipping lines and developers countered better than expected earnings for MTR Corp.

Economics

UK Industrial production (Jan) 10:30 GMT

Like the retail spending data, analysts expect adverse weather conditions in the UK in January to have led to a sharp decline in manufacturing production that will more than offset the rise in gas and electricity production. Our analysis shows that in previous periods of snow there has been a sizeable, but temporary, drop in activity

US Wholesale inventories (Jan) 15:00 GMT/ 10:00 EST

The monthly inventory figures are likely to get more attention than usual given the strong influence that they are having on the headline GDP readings and estimates. Wholesale inventories account for around 30% of total business inventories, and analysts look for a flat reading in January.

Corporate

Standard Life posted milder-than-expected 1.5% fall in operating profit for 2009, as the economic recession forced customers to scrimp on insurance spending, but the company said it is starting 2010 "in a good position" after seeing strong sales in the last part of the year. Standard Life said pre-tax operating profit on a European Embedded Value basis was at GBP919 million, down from GBP933 million previously. The Edinburgh-based insurer is recommending a full-year dividend of 12.24 pence a share, up 4% from 11.77 pence a share in 2008. "Today’s announcement highlights good profits and healthy cash flow for the year, and the ongoing delivery of efficiency savings in our business despite the difficult and uncertain year for financial markets," said new Chief Executive Officer David Nish, who took over from Sandy Crombie at the start of the year. Last year, new life and pensions sales fell 7% to GBP14.66 billion from GBP15.68 billion. This fall was mitigated by an unexpectedly strong 29% rise in fourth-quarter sales to GBP4.16 billion, up from GBP3.23 billion in the same period a year ago. Using International Financial Reporting Standards, which doesn’t book future profits from new business, pre-tax profit was up 89% at GBP291 million from GBP154 million in 2008. The result is also higher than the GBP217 million average forecast from analysts. Factoring in unrealized gains on investments, Standard Life had an EEV net profit of GBP305 million, reversing the GBP134 million net loss the previous year. IFRS net profit was at GBP213 million, more than double the GBP100 million net profit in 2008. The company’s capital position remains strong, with a capital surplus of GBP3.6 billion in December, up from GBP3.5 billion at end-2008. Standard Life shares are about 54% higher than they were a year ago, with market capitalization at around GBP4.5 billion.

Tullow Oil Wednesday said full-year 2009 net profit fell 93% due to lower oil and gas prices and lower output, but the company said it remains well funded to continue its medium term exploration, appraisal and development programmes. Full-year 2009 net profit dropped to GBP15 million from GBP223 million a year earlier. Oil and gas production for the year was down 12% to 58,300 barrels of oil equivalent a day, while realised oil and gas prices fell 18% and 25% respectively. Tullow’s gearing–the ratio of net debt to net assets–rose 17 percentage points to 47% as the company invested heavily in Ghana and Uganda. Tullow will spend up to $1.5 billion buying the Ugandan assets of Heritage Oil, although a large part of this cost will be offset by the proceeds of a subsequent partnership deal with French oil major Total SA and China’s Cnooc Ltd. Meanwhile, the company’s Jubilee field offshore Ghana remains on track to produce its first oil by the end of this year, Tullow said. The first phase of Jubilee will produce around 120,000 barrels of oil a day. The company said that its $2.25 billion debt facilities and GBP1.33 billion raised through equity placings in 2009 and 2010 keeps the company well funded to continue with its exploration, appraisal and development plans. "Our 2009 reported results still reflect a period of financial transition," said Tullow’s Chief Executive Aidan Heavey. "First oil in Ghana from the Jubilee field later this year will result in considerable production growth and increased cash flow."

---

 

Posted: March 10th, 2010 under Asset Management.
Comments: none

 

FTSE 100	5606.72, +6.96	Dow	10552.52, -13.68
FTSE 250	9786.39, +11.67	Nasdaq	2332.21, +5.86
FTSE All Share	2864.47, +3.41	S&P 500	1138.50, -0.19
Nikkei	10567.65, -18.27	Hang Seng	21207.55, +10.68
Oil (Crude)	$81.87, +$0.37	Gold	$1124.60, -$10.90
Base Rate	0.5%	10 Yr Gilt	4.1%
£/$	1.499	£/€	1.1025
1 month LIBOR	0.543	3 month LIBOR	0.645

 

Markets

London - The FTSE 100 gained 6.96 points to close at 5,606.72 yesterday, a new 18 month high. Better than expected results from Petrofac offset declines among drugmakers with AstraZeneca pressured after its cancer drug failed in trials. This morning the index slips 5.01 points to 5,601.71. Data released overnight showed British house prices grew last month at their slowest pace since August after the amount of new property coming on to the market grew faster than the number of new buyers, the Royal Institution of Chartered Surveyors said. Meanwhile, British retail sales recovered last month from January’s snow-related slide, helped by strong sales of clothing and footwear, a survey by the British Retail Consortium found. Investors will also eye January British trade numbers, due at 0930 GMT.

New York - US indices were mixed yesterday following news of more corporate deals, a stronger dollar and fall in commodity prices. The Dow Jones slipped 13.68 points to 10,552.52, the S&P 500 edged 0.19 points lower to 1,138.50, while the Nasdaq added 5.86 points to end at 2,332.21.In deal news, MetLife agreed to buy Alico - troubled insurer AIG’s American Life Insurance unit – in a $15.5 billion cash and stock deal. It is AIG’s second major sale in a week, as it looks to pay back over a $100 billion in bailout money it took during the financial crisis.

In other deal news, Royal Dutch Shell and PetroChina have made a bid to buy Australia’s Arrow Energy for $3 billion in cash and stock. Royal Dutch already owns a 10% stake in Arrow. Elsewhere, Cisco and Research in Motion helped the Nasdaq into positive territory after both stocks received upgrades.

Tokyo - The Nikkei fell 18.27 points to 10,567.65 this morning as investors chose to lock in profits following the index’s biggest two day rise in three months.

Hong Kong - The Hang Seng rose 10.68 points to 21,207.55, with upbeat corporate news countering a drop in oil and metal prices. China Life Insurance gained 3.4% after saying 2009 profit may have climbed more than 200%.

Economics

UK RICS house prices (Feb) 00:01 GMT

Analysts expect the RICs balance to hold steady at 32% in February and the detail to suggest that January’s fall in approvals was weather related.

UK Trade balance (Jan) 09:30 GMT

The trade balance did not narrow as much as analysts had expected in the second half of last year, which can, at least in part, be attributed to the car scrappage scheme that boosted imports much more than it boosted exports. However, with car scrappage schemes being phased out analysts expect the trade balance to narrow on the back of weaker sterling.

US IBD/TIPP economic optimism (Mar) 15:00 GMT/ 10:00 EST

February’s IBD/TIPP index fell to 46.8, with declines of around 3pts for both the economic outlook and federal policies components, while the personal finances index was close to unchanged. Analysts look for a small increase to 48 in March.

Corporate

Chilean copper miner Antofagasta today said recent earthquakes in the country may cause slight delays to two major expansion projects, but maintained its full-year forecast for a 22.7% increase in production. "The commissioning of the Los Pelambres plant expansion is now expected to be completed during the second quarter of this year and the commissioning of Esperanza is now expected to start later in the fourth quarter due to the impact on some facilities and logistics," the company said in a statement. The $1 billion Los Pelambres plant expansion had been due to start in the first quarter of the year, and the $2.3 billion Esperanza mine was due to start production toward the end of this year. Antofagasta plans to boost output to 700,000 metric tons by 2011 with the two projects. The miner’s copper production is expected to be about 543,000 tons in 2010, compared with 442,500 tons in 2009. Chief Executive Marcelo Awad said the miner emerged from a challenging year with a strong balance sheet and expectations of strong demand for copper over the medium term, though also saw a return of some cost pressures. Antofagasta reported a 20.8% fall in full-year net profit before exceptional items because of lower prices and production. Net profit excluding exceptional items was $667.7 million for the 12 months to Dec. 31, compared with $842.9 billion during the same period a year earlier. Antofagasta’s earnings after exceptional items show a much sharper fall from $1.71 billion in 2008. Net profit that year was buoyed by a one-time, $1.02 billion infusion from the sale of stakes in two assets. Revenue was 12.2% lower at $2.96 billion, compared with $3.37 billion a year earlier. The company announced a total dividend of 23.4 cents a share for the year, compared with 60 cents a year earlier. Both figures represent about 35% of 2009 net earnings.

U.K.-based independent power producer International Power today posted an 18.9% rise in full-year net profit but said near-term performance would be impacted by weak market conditions in the U.S. and the U.K. The increase was driven by higher profit from operations in Australia, the Middle East, Asia and Europe, the company said in a statement. The London-based electricity generator said that for the full year ending Dec. 31, 2009, net profit rose 18.9% to GBP996 million versus GBP838 million in 2008. Profit from operations excluding exceptional items and specific mark to market movements rose to GBP1.16 billion from GBP1.05 billion in 2008, slightly above expectations. "Looking forward, near-term performance will be impacted by weak market conditions in the U.S. and the U.K. However, our financial position is strong with good corporate liquidity, and we are well positioned to pursue a range of growth opportunities," said International Power Chairman Neville Simms. Group revenue for the year fell 4.1% to GBP3.67 billion from GBP3.82 billion a year earlier.

Satellite communications company Inmarsat today posted a 12% jump in full-year operating profit as revenue was boosted by strong demand for broadband in remote areas, and it gave a confident outlook for 2010. Inmarsat, which provides satellite telephony and e-mail services to the broadcasting, shipping and airline industries, doesn’t report full quarterly results, but subsidiary Inmarsat Group, which represents the majority of the business, said revenue for the three months to Dec. 31 was 13% higher at $181.5 million. Earnings before interest, taxes, depreciation and amortization, or Ebitda, was 18% higher at $119.7 million. "We are entering 2010 with a positive outlook, revenue growth momentum and new growth opportunities ahead of us," Chairman and Chief Executive Andrew Sukawaty said. About 40% of Inmarsat’s business is derived from government and long-term contracts, which are less affected by the performance of the wider economy and more resilient in a downturn. It posted 7.4% revenue growth in its maritime sector, 3.3% revenue growth for the land mobile sector, and 18% growth in its aeronautical sector.

Liberty International today said it has demerged its two main businesses, as it posted a year-on-year fall in its portfolio value but said it has considerable recovery prospects and faces the future with a "measure of confidence". Liberty said it would split its regional mall business, Capital Shopping Centers, or CSC, which has a GBP4.4 billion property portfolio, from its Capital & Counties business, or CapCo, which encompasses its non-shopping centre and international business with some GBP1.7 billion of investment properties, including Central London’s Covent Garden Estate. The company said in a statement that it believes the demerger will enable CSC and Capital & Counties "to achieve their full potential over a period of time". "Each business will be well prepared for the growth opportunities provided by our exceptional assets with which we aim to drive superior returns to shareholders into the next decade," it added. The group said its full-year portfolio value fell to GBP6.22 billion from 7.12 billion, causing net asset value to fall to 464 pence. Net rental income for the year ended Dec. 31 fell to GBP371 million from GBP384 million last year. Full-year revenue came to GBP578.9 million. It made a pre-tax loss of GBP329.1 million. Net external debt fell to GBP3.18 billion from GBP4.10 billion. The U.K.’s largest retail landlord said that the group is in a substantially stronger financial position than a year ago, with the loan to value ratio reduced from 58% to 51% and with cash balances of GBP583 million and undrawn committed facilities of GBP248 million.

---

The above details are provided for information only and are not intended to be construed as solicitation for the sale or purchase of any particular investment nor as specific investment advice.

 

Posted: March 9th, 2010 under Asset Management.
Comments: none

 

FTSE 100	5599.76, +72.6	Dow	10566.20, +122.06
FTSE 250	9774.72, +109.43	Nasdaq	2326.35, +34.04
FTSE All Share	2861.06, +36.36	S&P 500	1138.69, +15.72
Nikkei	10585.92,+216.96	Hang Seng	21196.87, +408.90
Oil (Crude)	$81.50, +$1.29	Gold	$1135.20, +$2.10
Base Rate	0.5%	10 Yr Gilt	4.07%
£/$	1.519	£/€	1.1111
1 month LIBOR	0.54	3 month LIBOR	0.644

 

Markets

London - The FTSE 100 climbed 72.6 points higher to 5,599.76 on Friday. Investors cheered the jobs data from the US, sending the index its highest level since September 2008. Xstrata led miners higher, advancing 5.6%, while Rio Tinto rose 2.7%. Prudential gained 1.4% after saying 30 additional lenders have agreed to underwrite the $20 billion rights offer to fund its purchase of AIG’s Asian unit. This morning the FTSE has risen 5.28 points to 5,605.04 after French President Nicolas Sarkozy said the euro region is ready to rescue Greece should the government struggle to fund its budget deficit. Petrofac leads the risers’ board after pleasing investors with its full year results. Higher metal prices push miners higher.

New York - US stocks surged higher on Friday following continued signs that the pace of job cuts is slowing. The government report showed that employers cut a net total of 36,000 jobs last month, while expectations had been for 68,000. The Dow Jones jumped 122.06 points to 10,566.20, the S&P 500 gained 15.72 points to 1,138.69 and the Nasdaq rallied 34.04 points to 2,326.35. Gains were broad based with American Express and Boeing leading the Dow higher following the jobs report. Alcoa followed close behind as metal prices increased. Elsewhere, Apple drove the Nasdaq higher after announcing that it would release its much-awaited iPad computer on April 3rd.

Tokyo - The Nikkei rallied 216.96 points to 10,585.92 this morning, its highest level in six weeks. Nissan Motor was among the top performers after the yen fell against the euro to its lowest in two weeks. Mitsubishi Corp gained 2.6% after oil and metals prices climbed.

Hong Kong - The Hang Seng jumped 408.90 points to 21,196.87.

Economics

No major economic data to report

Corporate

Oil services company Petrofac said Monday its 2009 full-year net profit rose 33% following a record intake of new business driven by contracts from the Middle East and North Africa. Following such a strong performance in a challenging year for the oil industry, "we remain well-positioned to benefit from ongoing investment in oil & gas projects by our key customers in our core markets," said Chief Executive Ayman Asfari. "This will underpin strong growth in our business in 2010 and over the medium-term." Net profit for 2009 was $353.6 million, compared with $265.0 million in 2008. This was above the median forecast from 12 analysts of $312.0 million. Total revenue was up 9.8% to $3.66 billion, from $3.33 billion in 2008. Diluted earnings per share were 103.19 cents, compared with 77.11 cents in 2008.

Prudential said today that it plans to list on the Hong Kong Stock Exchange before it launches in May the $20 billion rights issue needed to help fund its acquisition of American International Group Inc.’s (AIG) Asian life-insurance business. The so-called listing by introduction will be alongside its primary listing in London, and means that no new shares will be offered, the company said. The move will make it easier for Asian investors to purchase shares in Prudential. Last week, Prudential announced the $35.5 billion acquisition of AIG’s Asian life-insurance business, AIA, in a deal that would make Prudential an Asian insurance giant. It said at the time that it planned to have a dual-primary listing in the U.K. and in Hong Kong after completing the AIA deal in the third quarter. Separately, Prudential said it has entered into foreign-exchange hedgings as it will have to convert proceeds from the rights issue in British pounds into U.S. dollars, which is the currency it will use to pay for AIA.

The above details are provided for information only and are not intended to be construed as solicitation for the sale or purchase of any particular investment nor as specific investment advice.

 

Posted: March 8th, 2010 under Asset Management.
Comments: none

 

FTSE 100	5533.21, -6.05	Dow	10444.14, +47.38
FTSE 250	9665.29, +53.12	Nasdaq	2292.31, +11.63
FTSE All Share	2836.83, +12.13	S&P 500	1122.97, +4.18
Nikkei	10368.96, +223.24	Hang Seng	20787.97, +212.19
Oil (Crude)	$80.21, -$0.66	Gold	$1132.40, -$11.50
Base Rate	0.5%	10 Yr Gilt	4%
£/$	1.504	£/€	1.106
1 month LIBOR	0.54	3 month LIBOR	0.64375

 

Markets

London - The FTSE 100 closed 6.05 points lower at 5,533.21 yesterday. The Bank of England, as expected, kept the benchmark interest rate at a record low. Policy makers at the central bank also said it would keep its bond purchase program on hold for a second month to assess whether the £200 billion spent so far is enough to prevent a relapse in the economy. This morning the index climbs 14.65 points to 5,541.81. Schroders continues to lead the market higher following yesterdays upbeat figures. WPP is among the biggest fallers after reporting its most recently quarterly figures.

New York - US stocks finished higher yesterday following a spate of positive economic data. Investors cheered improved retail sales together with a report showing that the pace of job losses is slowing. Despite massive snow storms, total retail sales jumped 4% in February. It was the sixth month in a row that same-store sales rose and the best monthly gain since November 2007, a month before the official start of the recession. Jobs data from the government showed the number of Americans filing new claims for unemployment fell. The figure fell to 469,000 from 498,000 the previous week, while continuing claims fell to 4.5 million from 4.634 million. The Dow Jones gained 47.38 points to 10,444.14, the S&P 500 rose 4.18 points to 1,122.97 and the Nasdaq added 2,292.31. Not all the data was positive though, with the National Association of Realtors reporting a 7.6% slump in January pending home sales. The drop came as a result of brutal storms on the East Coast.

Tokyo - The Nikkei jumped 223.24 points to 10,368.96 this morning as a report that the Bank of Japan was considering monetary easing steps helped the yen to weaken and after better-than-expected U.S. monthly retail sales. The Nikkei newspaper reported that the Bank of Japan has begun examining a further easing of its already ultra-loose monetary policy and may make a decision on such a move as early as this month.

Hong Kong - The Hang Seng rose 211.38 points to 20,787.16 today, halting three straight days of losses. Investors were upbeat following data from the US, fuelling optimism that the global economy is recovering.

Economics

UK PPI (Feb) 09:30 GMT

PPI has surprised to the upside in recent months as much as CPI. Analysts expect a further upward movement to 4% in January coinciding with a further rise in core producer price inflation.

US Non-farm payrolls (Feb) 13:30 GMT/08:30 EST

The dispersion of forecasts for the February payrolls number is likely to prove unusually wide due to uncertainty over the impact of the blizzards observed across much of the country around the middle of the month, which on a national basis are widely believed to be the worst seen since January 1996. Work patterns are certainly likely to have been impacted, particularly within areas such as construction and recreation. But for this effect to be registered within the payrolls data, individuals would need  to have been out of work for an entire reference (or pay) period in order to drop off the jobs count. Given that the frequency of pay periods is often bi-weekly or monthly, it seems unlikely even an extreme weather event would cause many individuals to miss an entire period and therefore influence the payrolls number. A more likely weather influence is likely to come from companies delaying the hiring of new workers, but overall analysts look for a small gain of 25k for payrolls which, given an anticipated Census job gain in the region of 35k, would still imply a decline in private sector employment. The unemployment rate, meanwhile, is expected to retrace a degree of its January decline and rise to 9.8%, although any resumption of the previously sharp decline in the participation ratio would present a clear downside risk to this view.

Corporate

WPP, the world’s largest marketing company by revenue, Friday said it still expects organic revenue growth to return in the second quarter as revenue declines continued to moderate in the final quarter of last year and at the beginning of 2010. The Dublin-based group said organic revenue, a closely watched measure in the advertising industry that strips out acquisitions, disposals and currency effects, was down 7% in the fourth quarter of 2009, compared with a 9% drop in the third quarter, and "almost the same in January 2010, against January 2009, an encouraging return to stability." Still, the company cautioned that even though this return to stability seems widespread both geographically and functionally, "there is no marked growth as yet, even against weak comparatives." "We have clearly moved from a period of staring into the abyss to ‘less worse’ and now to stabilization, if not growth, as yet," WPP said in a statement. The group confirmed that for the full-year 2010 it expects organic revenue to be flat and that it targets for its operating margins to rise one margin point to 12.7%. WPP, which owns advertising agencies including Ogilvy & Mather, Young & Rubicam and JWT, said like-for-like revenue fell 8.1% in 2009. Six analysts polled by Dow Jones Newswires had forecast a drop of 7.6%. On a reported basis, revenue rose 16.1% to GBP8.68 billion, boosted by the integration of recently acquired market research firm Taylor Nelson Sofres. The figure was roughly in line with the GBP8.69 billion forecast by analysts. On a constant currency basis, revenue rose 4.9%, mainly reflecting the weakness of sterling against the U.S. dollar and euro. Net profit for the full year was GBP437.7 million, down only slightly from the GBP439.1 million posted last year. Profit excluding items and before tax–which the company terms headline operating profit and which analysts use to gauge operating performance–was EUR1.02 billion in 2009, down 9% from EUR1.12 billion last year and slightly above the EUR1.01 billion forecast by analysts. The closely-watched headline operating margin was 11.7%, as in particular severance costs weighed on profitability in 2009 due to sharp headcount reductions.

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Posted: March 5th, 2010 under Asset Management.
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