FTSE 100	3762.91, -135.94	Dow	7522.02, -254.16
FTSE 250	6224.28, -127.24	Nasdaq	1501.80, -43.4
FTSE All Share	1906.81, -64.68	S&P 500	787.53, -28.41
Nikkei	8109.53, -126.55	Hang Seng	13576.02, +119.69
Oil (Crude)	$48.41	Gold	$917.70
Base Rate	0.5%	10 Yr Gilt	3.19%
£/$	1.428	£/€	1.075
1 month LIBOR	1.041	3 month LIBOR	1.665

 

Markets

London - The FTSE 100 is currently 68.20 points higher at 3,831.11. Marks & Spencer leads the rise after reporting sales that topped estimates, shares in the high street retailer are currently 8.7% higher. Compass rises 6.3% after reporting an increase in revenue while ICAP follows, adding 6.2%, after reiterating its pre-tax profit for the financial year will be in line with estimates. Kazakhmys adds 6%, although this was more to do with its 26% holding in ENRC than its full year results, which had few surprises. Eurasian Natural Resources Corp is 5% higher.  

New York - US stocks retreated yesterday, signalling an end to the recent bear market rally. Car manufacturers were led lower by General Motors as the company moved closer to bankruptcy. Financials suffered after a fresh batch of bank rescues in Europe.

The Dow Jones slumped 254.16 points to close at 7,522.02 while the S&P 500 dropped 28.41 points to end at 787.53. The Nasdaq plunged 43.4 points to finish at 1,510.80.

General Motors plummeted 25% after the Obama administration rejected their turnaround plans, saying that for the companies to become viable a massive overhaul is needed. The start of this was to remove CEO Rick Wagoner, which certainly seemed to unnerve investors. GM have now been given 60 days to produce a better plan if it is to receive more taxpayer’s money. Chrysler also had its plan rejected and has been given 30 days to finish a global alliance deal with Fiat, if it wants to receive anymore more money from the government. The risk of bankruptcy to both hit supplier companies with American Axle & Manufacturing sliding 22.2%.

Financials were led lower as troubles in the sector continued in Europe. Spain was forced to save its first bank since the financial crisis began, while the German government also moved to help lenders. Citigroup lost 11.8%, Bank of America fell 17.9% and JPMorgan Chase close d9.3% lower.

US light crude oil for May delivery tumbled $3.97 to $48.41 a barrel. COMEX gold for June delivery slipped $7.60 to $917.70 an ounce. Treasury prices jumped, lowering the yield on the 10 year note to 2.71% from 2.75%.

Tokyo - The Nikkei fell 126.55 points on the last day of its financial year to end at 8,109.53. The Nikkei has lost 35% this financial year, the most since the year ended March 2001.

Hong Kong - The Hang Seng climbed 119.69 points to close at 13,576.02 this morning, completing its best month since April last year. Property developers and banks advanced on optimism demand for homes in the city is recovering after data showed prices of luxury homes in Hong Kong rose in the first quarter.

Economics

US Chicago PMI (Mar) 1445 GMT/0945 EDT

Auto plants boosted production in February following extended plant shutdowns during the previous month. Analysts think the Chicago PMI could rise further in March, after the aggressive inventory liquidation and production cutbacks at the start of the year. Analysts look for the Chicago PMI to rise to 40, up from 34.2 in February. Other regional surveys for March have been mixed, with the Richmond Fed jumping 31 points, but the Empire index falling 3.6 points to a new low.

US Consumer Confidence (Mar) 1500 GMT/1000 EDT

Analysts expect March consumer confidence to rise 5 points to 30, up from the all time low of 25 set in February. After plunging 15 points last month, analysts see consumer expectations index rising 6.5 points to 34. This would fit the pattern of Michigan consumer expectation index rising 6.5 points to 34. This would fit the pattern of Michigan consumer expectations, which fell 7.3 points in February, before rising by 2.5 points in March. Meanwhile, the present situation index could rise around 3 points to 24, after an 8.5 point drop in February.

Corporate

Marks & Spencer Group PLC Executive Chairman Stuart Rose said today he was "hopeful" that the fiscal fourth quarter sales trend, showing better than expected sales, will continue in 2009. U.K. sales from stores open at least a year fell 4.2% for the 13 weeks to March 28 from the same period a year earlier, a better performance than many expected. The market was forecasting a 7% fall as shoppers continue to cut spending on nonessential clothing and houseware goods. That compares with a 7.1% fall in the third-quarter of fiscal 2009, which includes the key Christmas trading period. The performance of Marks & Spencer’s Food division improved in the fourth-quarter from the third-quarter, thanks to a better product offering, "sharper" promotions and pricing as well as better product availability. It was a similar story within its General Merchandise division, Rose told reporters on a conference call. Asked whether trading on the High Street has improved at all, Rose said: "It hasn’t got any worse, but it certainly hasn’t got any better."  

Compass Group said Tuesday it has had a positive first half with profitability running well ahead of expectations. Organic revenue growth, which is the combination of net new business and like for like revenue growth, is expected to be around 2.5% for the first half and constant currency revenue growth, including acquisitions, around 3%. Encouragingly, the level of new business wins in all sectors has remained strong, consistent with last year. As expected, like-for-like revenue has continued to weaken in parts of the Business & Industry (B&I) and Sports & Leisure sectors, as volumes have been affected by reduced levels of employment and lower levels of client discretionary spend. However, like-for-like revenue in the Education, Healthcare and Remote Site sectors has continued to perform well. The company said: "Our ability to flex our largely variable cost base has enabled us to manage our costs in line with the changes in demand. Furthermore, the continued focus on the MAP framework is helping us to deliver incremental efficiency gains in each of our major unit costs; food, labour and overhead.  

U.K. interdealer broker ICAP PLC on Tuesday said it remains "very positive about the medium term outlook" while reiterating that its pre-tax profit for the fiscal year ending March 31 will be within the range of analyst forecasts. Current forecasts range between £336 million and £356 million, according to ICAP. "While the fiscal easing and capital rebuilding by the banks will in due course restore confidence in the financial markets we are still in a period of turbulence as banks and other financial institutions restructure to address asset disposals, cost reduction and the reallocation of leverage," Chief Executive Michael Spencer said in a statement. He said that in the last quarter of its financial year, activity in wholesale financial markets slowed compared with a year ago. In the voice-broking business - which last year contributed 61% of the group’s operating profit - ICAP said low short-term interest rates, steep yield curves and substantially increased bond issuance boosted the interest rate derivatives business while cash equities and equity derivatives faced tougher conditions. In electronic broking - last year making up 32% of operating profit - volume began to slow in November, but ICAP said it "steadied" in the last three months. Both fixed-income markets and spot foreign exchange trade volumes were down sharply in March from a year ago, but are up from a weak December. ICAP said that in both these markets there is potential for volume to grow with increased government bond issuance and buybacks. Meanwhile, CEO Spencer said ICAP plans to take "full advantage of the restructuring of financial markets" and that there are "significant opportunities" to expand by attracting people and acquiring assets at attractive prices. He didn’t specify what those assets might be, but noted that the group is still in discussions to acquire European clearinghouse LCH.Clearnet Group Ltd together with a consortium of financial institutions. Other members of the consortium are reported to be investment banks Deutsche Bank AG, JP Morgan Chase and Co., UBS AG, BNP Paribas, Societe Generale, Royal Bank of Scotland Group PLC, HSBC Holdings PLC and Citigroup. LCH.Clearnet had initially been expected to finalize a merger deal with New York-based Depository Trust & Clearing Corp. by the end of March. That deal values LCH.Clearnet at EUR739 million, while ICAP’s consortium bid is reported to be worth GBP850 million.

London-listed Kazakh miner Kazakhmys Tuesday reported a 35.8% fall in net profit after accounting for its stake in Eurasian Natural Resources Corp. Net profit attributable to equity shareholders was $910 million for the 12 months to Dec. 31, compared with $1.42 billion a year earlier. The decline in net profits reflected a sharp downturn in metal prices during the second half of the year, coupled with volatile costs. Revenue was down 2% to 5.15 billion, compared with $5.26 billion a year earlier. Copper miner Kazakhmys last year raised its stake in ENRC, which produces ferrochrome, iron ore and aluminium, to about 26%. Net profit from Kazakhmys’ managed business was $655 million, while ENRC contributed $255 million. Analysts said the figures offered little surprise, though the company’s tax bill came in lower than expected. John Smelt, the company’s investor relations director also said they are considering the sale of up to 50% in its recently acquired power business. Talks on the sale are progressing, Smelt said. Kazakhmys has signed a memorandum of understanding with Kazakhstan’s state holding company Samruk. Samruk has expressed interest in acquiring the stake and is conducting due diligence, he said. Kazakhmys in May 2008 purchased the Ekibastuz GRES-1 power station for $1.1 billion, making the miner the country’s biggest power generator. Smelt said Kazakhmys would expect to receive payment relative to the cost of the acquisition, which would mean that sale of a 50% stake would raise more than $500 million.

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

 

 

Posted: March 31st, 2009 under Asset Management.
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