INGTON (Reuters) - Sales at U.S. retailers unexpectedly fell in March, snapping two months of increases, as motor vehicle and electronic good purchases declined, according to a government report on Tuesday that indicated subdued consumer spending amid rising unemployment.
The Commerce Department said total retail sales dropped 1.1 percent after rising by a revised 0.3 percent in February, previously reported as a 0.1 percent fall.
Excluding motor vehicles and parts, sales fell 0.9 percent in March, compared to a 1 percent gain the prior month. The data highlighted the continuing problems in the U.S. auto industry, with vehicle and parts sales dropping 2.3 percent after a 3 percent decline in February.
Analysts polled by Reuters had forecast retail sales rising 0.3 percent in March. Excluding motor vehicles, sales had been predicted to be flat.
Gasoline sales fell 1.6 percent in March after increasing by 3.1 percent the previous month. Sales of electronic goods tumbled 5.9 percent, versus a 0.7 percent gain in February, while building materials eased 0.6 percent after slipping 0.5 percent.
Source : Retail Sales Slip unexpertedly - Reuters
Tuesday, April 14, 2009
14/04/2009 Market Update Singapore
A key reversal day today. The market simple shrugged off the bad GDP figures as investors look at that as the end of our tunnel. At closing, STI got matched up to close at day high of 1,897, with a gain of 20 points – unbelievable. We have breached above the 1,880 resistance already. Volume traded was also incredibly high at 2.19 billion shares worth $1.33 billion.
The matched up was partly due to the US futures gaining strength as well. Furthermore, there is news that our government is considering a second stimulus plan worth $10 billion.
I think this is the fundamental confirmation that we have been waiting for. Whether there are any pullbacks or not have became secondary because everyone has come to a consensus that the market had bottomed last month. That’s why when we wait for the fundamentals to prove to us, we have to be prepared to buy at prices that are 15-20% higher from the trough. This is because as I have always said, the stock markets are forward-looking mechanisms.
Chart wise, I think given the current situation, STI is quite likely to minimally break above the previous high point (1,960) during the last bear rally in January. Given all these confirmations, the market is basically ideal for investors who have holding power regardless of traders or investors. Those without holding power should at least have the discipline to cut loss if things go awry, especially if you are trading the second-liner stocks. Whatever you do, just make sure that you do not miss out the sprouting bull market. It might come anytime for all we know.
F&N:
It has been very weak these few days. I vaguely remember that I read somewhere about one of its subsidiary company is in some kind of refinancing problems. If I recall correctly, it should be FrasersCT. As the mother company, F&N will be obliged to lend a helping, to the extent of raising capital such as a rights issue. Therefore, we see its price being so depressed. It might be worth collecting some of it at this junction taking into consideration that it didn't run up during this rally. Once the uncertainty is removed, the share price is likely to bounce back up.
Kep Corp:
This counter did quite badly today compared to the rest. I wonder if it has anything to do with the rumors out there saying that it might need to raise capital. But it should be worth collecting it again soon once the share price discounted adequately the likelihood of a rights issue etc. Just take not that it will go XD on 28/04/2009 though and thus the share price is likely to adjust downwards on that date. So do not mistake that behavior as the discounting mechanism for a likely rights issue.
SIA:
The chart is showing a correction in the making. It should be worthwhile to start collecting it before it bounces back up again.
Source :My stocks Buddy
The matched up was partly due to the US futures gaining strength as well. Furthermore, there is news that our government is considering a second stimulus plan worth $10 billion.
I think this is the fundamental confirmation that we have been waiting for. Whether there are any pullbacks or not have became secondary because everyone has come to a consensus that the market had bottomed last month. That’s why when we wait for the fundamentals to prove to us, we have to be prepared to buy at prices that are 15-20% higher from the trough. This is because as I have always said, the stock markets are forward-looking mechanisms.
Chart wise, I think given the current situation, STI is quite likely to minimally break above the previous high point (1,960) during the last bear rally in January. Given all these confirmations, the market is basically ideal for investors who have holding power regardless of traders or investors. Those without holding power should at least have the discipline to cut loss if things go awry, especially if you are trading the second-liner stocks. Whatever you do, just make sure that you do not miss out the sprouting bull market. It might come anytime for all we know.
F&N:
It has been very weak these few days. I vaguely remember that I read somewhere about one of its subsidiary company is in some kind of refinancing problems. If I recall correctly, it should be FrasersCT. As the mother company, F&N will be obliged to lend a helping, to the extent of raising capital such as a rights issue. Therefore, we see its price being so depressed. It might be worth collecting some of it at this junction taking into consideration that it didn't run up during this rally. Once the uncertainty is removed, the share price is likely to bounce back up.
Kep Corp:
This counter did quite badly today compared to the rest. I wonder if it has anything to do with the rumors out there saying that it might need to raise capital. But it should be worth collecting it again soon once the share price discounted adequately the likelihood of a rights issue etc. Just take not that it will go XD on 28/04/2009 though and thus the share price is likely to adjust downwards on that date. So do not mistake that behavior as the discounting mechanism for a likely rights issue.
SIA:
The chart is showing a correction in the making. It should be worthwhile to start collecting it before it bounces back up again.
Source :My stocks Buddy
Goldman Sachs Plans to Raise $5 Billion to Repay U.S.
pril 14 (Bloomberg) -- Goldman Sachs Group Inc., buoyed by profit that exceeded the most optimistic Wall Street estimates and a 54 percent jump in its stock price, plans to raise $5 billion to repay federal rescue funds and shed government limits on executive pay.
Chief Executive Officer Lloyd Blankfein, eager to redeem the $10 billion his New York-based bank received in October, announced the fundraising plan yesterday as the company reported a $1.81 billion profit in the first quarter. The bank earned $3.39 a share, more than double the $1.64 average of 16 analysts surveyed by Bloomberg News.
“They’ll do better now in terms of what it costs to raise money than they can for the rest of the year,” said Christopher Whalen, a managing director at Torrance, California-based Institutional Risk Analytics. “I don’t think the rest of this year will be good.”
Goldman Sachs was the most profitable Wall Street firm before converting to a bank last year and posting its first quarterly loss since the company went public in 1999. The bank also said yesterday that it lost $780 million, or $2.15 a share, in the month of December, before the start of its new fiscal year.
The bank said it will use proceeds from the common stock offering plus “additional resources” to pay back the funds it got from the Troubled Asset Relief Program. Andrew Williams, a spokesman for the Treasury Department, declined to comment on Goldman Sachs’s announcement.
‘Eye of Storm’
U.S. regulators are unlikely to object to the repayment. The government favors letting banks return money if they fare well on stress tests completed by the end of this month and can get private capital, according to people familiar with the matter.
“They can raise capital now; clearly the stock is strong,” said Peter Sorrentino, a senior portfolio manager at Huntington Asset Advisors, which has about $13.3 billion under management. “This is like the eye of the storm passing.”
Goldman Sachs traded at $126.44 before the start of New York Stock Exchange trading today. The stock climbed 4.7 percent yesterday to $130.15 in New York trading, valuing the firm at $65.7 billion.
AIG ‘Rounded to Zero’
Chief Financial Officer David Viniar said on a conference call today that profit resulting from American International Group Inc. payments to the firm “rounded to zero” in the first quarter. Most of the cash flow from AIG payments took place prior to the end of the year, he said.
After AIG was rescued by the U.S. from collapse last year, banks that bought credit-default swaps got $22.4 billion in collateral and $27.1 billion in payments to retire the contracts, the insurer said last month. Lawmakers have called for a federal probe into whether banks including Goldman Sachs received more funds than necessary from the bailout.
The company remains “cautious about the near-term outlook,” Viniar said.
The firm’s business model depends on its ability to attract top traders and bankers with promises of lucrative bonuses, a Wall Street pay model that is now under attack by politicians incensed at multimillion-dollar payouts to executives in an industry blamed for causing the economic crisis. The government imposed limits on executive compensation at banks such as Goldman Sachs that accepted more than $500 million in TARP funds.
Compensation Costs Rise
Before last year, Goldman Sachs set two consecutive Wall Street pay records. Even last year, 953 of the bank’s employees made more than $1 million, the Wall Street Journal reported, citing unidentified people familiar with the matter. Lucas van Praag, a spokesman at Goldman Sachs, declined to comment.
This year, the bank set aside $4.71 billion for compensation and benefits, 18 percent more than during the first quarter a year earlier. The expense totaled 50 percent of revenue, up from 48 percent in last year’s first quarter, even as the firm’s workforce shrank 12 percent to 27,989.
Blankfein said last week at a conference in Washington sponsored by the Council of Institutional Investors that the U.S. funds Wall Street firms received weren’t intended to be “permanent capital.”
‘Return the Money’
“The minute that an institution is allowed to return the money and is capable of returning the money, while still carrying out its obligations and its role in the capital markets effectively, then it should do it that minute,” Blankfein said.
Viniar said in February that the firm would like to repay the money because “operating our business without the government capital would be an easier thing to do.”
If Goldman Sachs returns the TARP money, it may pressure other banks to follow suit or risk appearing dependent on the government, said Brad Hintz, an analyst at Sanford C. Bernstein & Co. in New York who rates Goldman Sachs “market perform.”
The better-than-expected earnings will also make it difficult for competitors that are scheduled to report their own results this week or next week, said Sorrentino.
“This makes life much more difficult for everyone else out there,” he said. “To merely beat your numbers now will be viewed as, ‘What’s wrong?’”
Goldman Sachs Results
Book value per share rose to $98.82 at the end of March compared with $98.68 in November, and return on equity, a gauge of how effectively the firm invests earnings, was 14.3 percent in the first quarter, Goldman Sachs said.
First-quarter revenue was $9.43 billion. The highlight was Goldman’s fixed-income, currencies and commodities business, known as FICC, in which trading revenue was a record $6.56 billion, 34 percent higher than its previous high, as client- driven income outweighed an $800 million loss on commercial mortgage loans, excluding hedges.
Goldman Sachs benefited as the gap between what banks pay to buy fixed-income securities and the price at which they sell, the so-called bid-ask spread, almost doubled to 19 basis points in six months, according to data compiled by Bloomberg.
“FICC operated in a generally favorable environment characterized by client-driven activity, particularly in more liquid products, and high levels of volatility,” the bank said in a statement. “Illiquid assets generally continued to decline in value.”
Fewer Rivals
The loss of competitors including Lehman Brothers Holdings Inc. and Bear Stearns Cos. meant Goldman Sachs attracted more trading business, said Huntington’s Sorrentino.
“A lot has to do with the fact that they really narrowed the playing field,” he said. “All that business has to be flowing through to someone.”
Because trading revenue is so hard to predict, “the market’s going to value asset management and investment banking and retail brokerage higher than it’s going to value trading,” said Bernstein’s Hintz. “As an analyst you have to ask yourself, ‘Is this sustainable?’”
Every other business unit had lower revenue compared with the first quarter of 2008 or reported a loss.
Equity trading revenue was $2.0 billion as slower activity outside the U.S. meant the firm generated fewer trading commissions than a year ago.
Investment Banking
Investment banking revenue of $823 million compared with $1.17 billion in the first quarter of 2008, reflecting a decline in leveraged finance activity and fewer mergers and share offerings.
Asset management fees slumped 28 percent to $949 million as assets under management fell 3.3 percent. Securities services, which include the firm’s prime brokerage unit, made $503 million, 30 percent less than the first quarter of 2008.
Goldman Sachs had a $1.41 billion net loss from principal investments, including a $151 million loss from the firm’s investment in Industrial and Commercial Bank of China Ltd.
Total assets on the balance sheet rose 5 percent from the end of November to $925 billion as of March 27. Of that, about $59 billion qualified as “Level 3” assets, which are the hardest to value, down from $66 billion at the end of November.
Goldman Sachs raised $5.75 billion by selling shares at $123 apiece in September in an offering that started after the company announced that Warren Buffett’s Berkshire Hathaway Inc. bought $5 billion in preferred stock.
A month later, Goldman Sachs was among nine financial institutions that shared $125 billion in the first payments from the Treasury’s $700 billion bailout program.
To contact the reporter on this story: Christine Harper in New York at charper@bloomberg.net.
Source:Bloomberg
Chief Executive Officer Lloyd Blankfein, eager to redeem the $10 billion his New York-based bank received in October, announced the fundraising plan yesterday as the company reported a $1.81 billion profit in the first quarter. The bank earned $3.39 a share, more than double the $1.64 average of 16 analysts surveyed by Bloomberg News.
“They’ll do better now in terms of what it costs to raise money than they can for the rest of the year,” said Christopher Whalen, a managing director at Torrance, California-based Institutional Risk Analytics. “I don’t think the rest of this year will be good.”
Goldman Sachs was the most profitable Wall Street firm before converting to a bank last year and posting its first quarterly loss since the company went public in 1999. The bank also said yesterday that it lost $780 million, or $2.15 a share, in the month of December, before the start of its new fiscal year.
The bank said it will use proceeds from the common stock offering plus “additional resources” to pay back the funds it got from the Troubled Asset Relief Program. Andrew Williams, a spokesman for the Treasury Department, declined to comment on Goldman Sachs’s announcement.
‘Eye of Storm’
U.S. regulators are unlikely to object to the repayment. The government favors letting banks return money if they fare well on stress tests completed by the end of this month and can get private capital, according to people familiar with the matter.
“They can raise capital now; clearly the stock is strong,” said Peter Sorrentino, a senior portfolio manager at Huntington Asset Advisors, which has about $13.3 billion under management. “This is like the eye of the storm passing.”
Goldman Sachs traded at $126.44 before the start of New York Stock Exchange trading today. The stock climbed 4.7 percent yesterday to $130.15 in New York trading, valuing the firm at $65.7 billion.
AIG ‘Rounded to Zero’
Chief Financial Officer David Viniar said on a conference call today that profit resulting from American International Group Inc. payments to the firm “rounded to zero” in the first quarter. Most of the cash flow from AIG payments took place prior to the end of the year, he said.
After AIG was rescued by the U.S. from collapse last year, banks that bought credit-default swaps got $22.4 billion in collateral and $27.1 billion in payments to retire the contracts, the insurer said last month. Lawmakers have called for a federal probe into whether banks including Goldman Sachs received more funds than necessary from the bailout.
The company remains “cautious about the near-term outlook,” Viniar said.
The firm’s business model depends on its ability to attract top traders and bankers with promises of lucrative bonuses, a Wall Street pay model that is now under attack by politicians incensed at multimillion-dollar payouts to executives in an industry blamed for causing the economic crisis. The government imposed limits on executive compensation at banks such as Goldman Sachs that accepted more than $500 million in TARP funds.
Compensation Costs Rise
Before last year, Goldman Sachs set two consecutive Wall Street pay records. Even last year, 953 of the bank’s employees made more than $1 million, the Wall Street Journal reported, citing unidentified people familiar with the matter. Lucas van Praag, a spokesman at Goldman Sachs, declined to comment.
This year, the bank set aside $4.71 billion for compensation and benefits, 18 percent more than during the first quarter a year earlier. The expense totaled 50 percent of revenue, up from 48 percent in last year’s first quarter, even as the firm’s workforce shrank 12 percent to 27,989.
Blankfein said last week at a conference in Washington sponsored by the Council of Institutional Investors that the U.S. funds Wall Street firms received weren’t intended to be “permanent capital.”
‘Return the Money’
“The minute that an institution is allowed to return the money and is capable of returning the money, while still carrying out its obligations and its role in the capital markets effectively, then it should do it that minute,” Blankfein said.
Viniar said in February that the firm would like to repay the money because “operating our business without the government capital would be an easier thing to do.”
If Goldman Sachs returns the TARP money, it may pressure other banks to follow suit or risk appearing dependent on the government, said Brad Hintz, an analyst at Sanford C. Bernstein & Co. in New York who rates Goldman Sachs “market perform.”
The better-than-expected earnings will also make it difficult for competitors that are scheduled to report their own results this week or next week, said Sorrentino.
“This makes life much more difficult for everyone else out there,” he said. “To merely beat your numbers now will be viewed as, ‘What’s wrong?’”
Goldman Sachs Results
Book value per share rose to $98.82 at the end of March compared with $98.68 in November, and return on equity, a gauge of how effectively the firm invests earnings, was 14.3 percent in the first quarter, Goldman Sachs said.
First-quarter revenue was $9.43 billion. The highlight was Goldman’s fixed-income, currencies and commodities business, known as FICC, in which trading revenue was a record $6.56 billion, 34 percent higher than its previous high, as client- driven income outweighed an $800 million loss on commercial mortgage loans, excluding hedges.
Goldman Sachs benefited as the gap between what banks pay to buy fixed-income securities and the price at which they sell, the so-called bid-ask spread, almost doubled to 19 basis points in six months, according to data compiled by Bloomberg.
“FICC operated in a generally favorable environment characterized by client-driven activity, particularly in more liquid products, and high levels of volatility,” the bank said in a statement. “Illiquid assets generally continued to decline in value.”
Fewer Rivals
The loss of competitors including Lehman Brothers Holdings Inc. and Bear Stearns Cos. meant Goldman Sachs attracted more trading business, said Huntington’s Sorrentino.
“A lot has to do with the fact that they really narrowed the playing field,” he said. “All that business has to be flowing through to someone.”
Because trading revenue is so hard to predict, “the market’s going to value asset management and investment banking and retail brokerage higher than it’s going to value trading,” said Bernstein’s Hintz. “As an analyst you have to ask yourself, ‘Is this sustainable?’”
Every other business unit had lower revenue compared with the first quarter of 2008 or reported a loss.
Equity trading revenue was $2.0 billion as slower activity outside the U.S. meant the firm generated fewer trading commissions than a year ago.
Investment Banking
Investment banking revenue of $823 million compared with $1.17 billion in the first quarter of 2008, reflecting a decline in leveraged finance activity and fewer mergers and share offerings.
Asset management fees slumped 28 percent to $949 million as assets under management fell 3.3 percent. Securities services, which include the firm’s prime brokerage unit, made $503 million, 30 percent less than the first quarter of 2008.
Goldman Sachs had a $1.41 billion net loss from principal investments, including a $151 million loss from the firm’s investment in Industrial and Commercial Bank of China Ltd.
Total assets on the balance sheet rose 5 percent from the end of November to $925 billion as of March 27. Of that, about $59 billion qualified as “Level 3” assets, which are the hardest to value, down from $66 billion at the end of November.
Goldman Sachs raised $5.75 billion by selling shares at $123 apiece in September in an offering that started after the company announced that Warren Buffett’s Berkshire Hathaway Inc. bought $5 billion in preferred stock.
A month later, Goldman Sachs was among nine financial institutions that shared $125 billion in the first payments from the Treasury’s $700 billion bailout program.
To contact the reporter on this story: Christine Harper in New York at charper@bloomberg.net.
Source:Bloomberg
Monday, April 13, 2009
SPH’s 2Q earnings fall 13% on lower print ad sales
Singapore Press Holdings, the city-state’s biggest newspaper publisher, said second-quarter profit dropped 13% after an economic recession hurt advertising revenue, reported Bloomberg.
Net income declined to $87 million, or 5 cents a share, in the three months ended Feb 28, compared with $99.6 million, or 6 cents, a year earlier, the company said in a statement to the Singapore stock exchange. Revenue fell to $287.2 million from $298.1 million.
Singapore’s worst recession on record is forcing companies to slow hiring and advertising spending, hurting the company’s core newspaper publishing business. Government data due tomorrow may show the economy shrank 9.6% last quarter, the fourth straight contraction, according to the median forecast of economists surveyed by Bloomberg News.
“The recession in Singapore is expected to last through 2009 and this would have a continued impact on advertisement revenue,” Chief Executive Officer Alan Chan said in the statement. “Our priority is to preserve resources, protect jobs, and position ourselves so as to emerge stronger when the economy improves.”
Earnings were reported after markets in Singapore closed. SPH shares rallied 3.2% to $2.89 today. They have plunged 36% in the past 12 months, compared with a 40% slump in the benchmark Straits Times Index.
Print ad sales fell 19% to $145.9 million last quarter, according to today’s statement. Operating expenses climbed 3% to $195.7 million, SPH said.
In October, the newspaper publisher raised prices for some of its newspapers, including its flagship English-language The Straits Times, for the first time in four years. The company said today newsprint costs jumped 24% in the quarter.
Earnings last quarter didn’t take into account savings from pay reductions. SPH lowered salaries for 3,000 employees from April 1 by as much as 10% and reduced bonuses amid a “sharp deterioration in business conditions,” the company said on March 12.
The cuts are expected to reduce its wage bill by 20%, SPH has said.
Source :THE EDGE
Net income declined to $87 million, or 5 cents a share, in the three months ended Feb 28, compared with $99.6 million, or 6 cents, a year earlier, the company said in a statement to the Singapore stock exchange. Revenue fell to $287.2 million from $298.1 million.
Singapore’s worst recession on record is forcing companies to slow hiring and advertising spending, hurting the company’s core newspaper publishing business. Government data due tomorrow may show the economy shrank 9.6% last quarter, the fourth straight contraction, according to the median forecast of economists surveyed by Bloomberg News.
“The recession in Singapore is expected to last through 2009 and this would have a continued impact on advertisement revenue,” Chief Executive Officer Alan Chan said in the statement. “Our priority is to preserve resources, protect jobs, and position ourselves so as to emerge stronger when the economy improves.”
Earnings were reported after markets in Singapore closed. SPH shares rallied 3.2% to $2.89 today. They have plunged 36% in the past 12 months, compared with a 40% slump in the benchmark Straits Times Index.
Print ad sales fell 19% to $145.9 million last quarter, according to today’s statement. Operating expenses climbed 3% to $195.7 million, SPH said.
In October, the newspaper publisher raised prices for some of its newspapers, including its flagship English-language The Straits Times, for the first time in four years. The company said today newsprint costs jumped 24% in the quarter.
Earnings last quarter didn’t take into account savings from pay reductions. SPH lowered salaries for 3,000 employees from April 1 by as much as 10% and reduced bonuses amid a “sharp deterioration in business conditions,” the company said on March 12.
The cuts are expected to reduce its wage bill by 20%, SPH has said.
Source :THE EDGE
Sunday, April 12, 2009
Several Banks Are Surviving, Even Thriving
Sunday, April 12, 2009
Wells Fargo shocked the market Thursday when it revealed that it expects to have earned $3 billion in the first quarter. (Yes, that was after announcing $3.3 billion in write-offs, but hey, who's counting?)
While signs of post-TARP animation from any of the big players are comforting, the fact is there are plenty of banks that are holding their own or even gaining ground, despite today's dismal economic climate. Chris Whalen of Institutional Risk Analytics, a company that monitors bank performance, says there are thousands of banks in the United States that aren't in danger of failing, which tends to get overlooked by the attention focused on the 250 or so that need a lifeboat.
What makes a bank less bad in this climate? Formulas for figuring out the health of other types of businesses (like manufacturing or retail) can't be usefully applied to banks because these firms tend to be so highly leveraged. In theory, you could look at a capital-to-asset ratio or a liabilities-to-asset ratio. The hitch with both of these, of course, is that many banks today are carrying assets that are hard to value because there's no market for them anymore.
There are a few indicators that can help paint a picture of a bank's relative robustness. Analysts also like banks that focus their business on lending. Despite the mortgage mess, writing loans is still safer than managing securities portfolios and trading derivatives and other exotic instruments.
Sometimes, it's a size thing. Many healthy banks are regional or community institutions that never got involved in the high-stakes derivatives trading that brought down higher-profile institutions. In some cases, a smaller geographic footprint helps. Banks with sizable offshore operations have to divert resources to feed those hungry enterprises.
The Big Money talked to market watchers and number crunchers to come up with a short list of banks notable for how far they haven't fallen.
-- BB&T: In a season when cutting dividends is the new black, just holding steady at 47 cents per share was enough to make BB&T Corp. stand out from the pack. Though there's been a bit of controversy as to whether a Troubled Assets Relief Program recipient should be sharing the wealth -- BB&T took $3.1 billion from the government -- analysts point out that handing capital to banks like the North Carolina-based BB&T puts them in a position to absorb smaller, weaker banks that might otherwise die on the vine.
-- Beal Bank: Texas-based and privately owned, this bank is a bit of an odd duck, as Forbes pointed out in a recent profile of Beal's eponymous, poker-playing, libertarian founder. Beal (the bank, not the man) is kind of like the gawky AV-club member at the prom who turns up at the reunion with a Rolex on one arm and a blonde on the other. The bank effectively sat out the credit boom, putting the brakes on its standard M.O. of gobbling up loans on the secondary market just when everyone else was clamoring to get in the game. In 2008, Beal turned out an eye-popping 8.1 return-on-assets ratio (a number in the range of 1 to 1.5 is considered good).
-- Hudson City Savings Bank: This bank is an industry pace car; its so-called "stress level," which takes into account factors such as its loan defaults and lending capacity, has been nearly flat over the past two years. Looking at Hudson City's numbers in a vacuum, no one would suspect the current level of market turmoil. While its percentage of nonperforming loans has risen to nearly 1 percent as of last month, that's still well below the industry standard. What's more, Hudson City never so much as dipped a toe into exotic derivatives like the credit-default swaps that were the downfall of so many.
-- Signature Bank: Despite being headquartered a scant few miles from the wreckage of Wall Street, this New York-based bank has managed to stay above the fray. Although bigger players, including Goldman Sachs and Bank of America, have announced they're planning to return TARP money -- eventually -- Signature was among the first to put its money where its mouth was, giving back $120 million earlier this month. It's in a stronger position than many of its peers because that TARP infusion came just after Signature raised $148 million in a public offering.
-- US Bancorp: Despite a bruising 65 percent drop in profit in the last quarter of 2008, thanks to a quadrupling of nonperforming assets, this Minneapolis-based bank has a long history as a conservative lender. In addition, although its Midwestern home turf has been beset by job losses in manufacturing and other industries, this part of the country never saw the speculative real estate bubbles that exploded in Miami and Las Vegas. In November, the Office of Thrift Supervision gave this TARP recipient a tacit vote of confidence when it sold to US Bancorp the deposits and assets of failed California bank Downey Savings and Loan.
Source :washingtonpost
Wells Fargo shocked the market Thursday when it revealed that it expects to have earned $3 billion in the first quarter. (Yes, that was after announcing $3.3 billion in write-offs, but hey, who's counting?)
While signs of post-TARP animation from any of the big players are comforting, the fact is there are plenty of banks that are holding their own or even gaining ground, despite today's dismal economic climate. Chris Whalen of Institutional Risk Analytics, a company that monitors bank performance, says there are thousands of banks in the United States that aren't in danger of failing, which tends to get overlooked by the attention focused on the 250 or so that need a lifeboat.
What makes a bank less bad in this climate? Formulas for figuring out the health of other types of businesses (like manufacturing or retail) can't be usefully applied to banks because these firms tend to be so highly leveraged. In theory, you could look at a capital-to-asset ratio or a liabilities-to-asset ratio. The hitch with both of these, of course, is that many banks today are carrying assets that are hard to value because there's no market for them anymore.
There are a few indicators that can help paint a picture of a bank's relative robustness. Analysts also like banks that focus their business on lending. Despite the mortgage mess, writing loans is still safer than managing securities portfolios and trading derivatives and other exotic instruments.
Sometimes, it's a size thing. Many healthy banks are regional or community institutions that never got involved in the high-stakes derivatives trading that brought down higher-profile institutions. In some cases, a smaller geographic footprint helps. Banks with sizable offshore operations have to divert resources to feed those hungry enterprises.
The Big Money talked to market watchers and number crunchers to come up with a short list of banks notable for how far they haven't fallen.
-- BB&T: In a season when cutting dividends is the new black, just holding steady at 47 cents per share was enough to make BB&T Corp. stand out from the pack. Though there's been a bit of controversy as to whether a Troubled Assets Relief Program recipient should be sharing the wealth -- BB&T took $3.1 billion from the government -- analysts point out that handing capital to banks like the North Carolina-based BB&T puts them in a position to absorb smaller, weaker banks that might otherwise die on the vine.
-- Beal Bank: Texas-based and privately owned, this bank is a bit of an odd duck, as Forbes pointed out in a recent profile of Beal's eponymous, poker-playing, libertarian founder. Beal (the bank, not the man) is kind of like the gawky AV-club member at the prom who turns up at the reunion with a Rolex on one arm and a blonde on the other. The bank effectively sat out the credit boom, putting the brakes on its standard M.O. of gobbling up loans on the secondary market just when everyone else was clamoring to get in the game. In 2008, Beal turned out an eye-popping 8.1 return-on-assets ratio (a number in the range of 1 to 1.5 is considered good).
-- Hudson City Savings Bank: This bank is an industry pace car; its so-called "stress level," which takes into account factors such as its loan defaults and lending capacity, has been nearly flat over the past two years. Looking at Hudson City's numbers in a vacuum, no one would suspect the current level of market turmoil. While its percentage of nonperforming loans has risen to nearly 1 percent as of last month, that's still well below the industry standard. What's more, Hudson City never so much as dipped a toe into exotic derivatives like the credit-default swaps that were the downfall of so many.
-- Signature Bank: Despite being headquartered a scant few miles from the wreckage of Wall Street, this New York-based bank has managed to stay above the fray. Although bigger players, including Goldman Sachs and Bank of America, have announced they're planning to return TARP money -- eventually -- Signature was among the first to put its money where its mouth was, giving back $120 million earlier this month. It's in a stronger position than many of its peers because that TARP infusion came just after Signature raised $148 million in a public offering.
-- US Bancorp: Despite a bruising 65 percent drop in profit in the last quarter of 2008, thanks to a quadrupling of nonperforming assets, this Minneapolis-based bank has a long history as a conservative lender. In addition, although its Midwestern home turf has been beset by job losses in manufacturing and other industries, this part of the country never saw the speculative real estate bubbles that exploded in Miami and Las Vegas. In November, the Office of Thrift Supervision gave this TARP recipient a tacit vote of confidence when it sold to US Bancorp the deposits and assets of failed California bank Downey Savings and Loan.
Source :washingtonpost
Asean emergency fund on its way
SOUTH-EAST Asian nations are expected to move one step closer this weekend to their goal of setting up a US$120 billion emergency currency swap fund.
This is after the leaders of 13 countries, who are meeting in Pattaya for the Asean+3 summit, put the finishing touches today on a foreign currency pool that will help shield their respective currencies and manage liquidity problems.
In a joint statement that is expected to be issued this weekend, the leaders are also likely to push for the setting up of an independent regional body that can monitor signs of an impending financial crisis.
There is still no fixed date for the expanded fund, called the Chiang Mai Initiative Multilateralisation, to be launched but observers say that it should happen soon.
At a meeting in the Thai resort town of Hua Hin in February, the Asean+3 finance ministers -Â all 10 from the Association of Southeast Asian Nations (Asean) and their counterparts from South Korea, Japan and China - agreed to expand the crisis fund from its original US$80 billion.
At a press conference yesterday, Thai Finance Minister Korn Chatikavanij said that the individual contributions for each Asean member had been finalised. Asean will contribute 20 per cent of the US$120 billion, while China, Japan and South Korea will account for the rest. Singapore, Indonesia, Malaysia and Thailand will pump in US$4.76 billion each and the Philippines US$3.68 billion.
The other five members - Brunei, Cambodia, Laos, Vietnam and Myanmar - will contribute amounts based on the size of their foreign exchange reserves, said Mr Korn. China, Japan and South Korea will discuss the size of their contributions among themselves.
The expanded emergency fund allows for currency swaps to be multilateral, making it easier for struggling countries to tap on the funds. The exact details of the fund will be fleshed out in May when Asian finance ministers next meet in Bali.
Creating financial stability aside, the three-day Asean summit, which ends tomorrow, will also go a long way to helping the region achieve its long-term aim of creating a European Union-style community by 2015, said Mr Korn.
In one key statement that the leaders are expected to issue this weekend, they will make a greater call to expand regional trade links and reject protectionism. They are also likely to step up preparatory work for a giant free trade zone that would stretch all the way from China to Australia.
Source :BT
This is after the leaders of 13 countries, who are meeting in Pattaya for the Asean+3 summit, put the finishing touches today on a foreign currency pool that will help shield their respective currencies and manage liquidity problems.
In a joint statement that is expected to be issued this weekend, the leaders are also likely to push for the setting up of an independent regional body that can monitor signs of an impending financial crisis.
There is still no fixed date for the expanded fund, called the Chiang Mai Initiative Multilateralisation, to be launched but observers say that it should happen soon.
At a meeting in the Thai resort town of Hua Hin in February, the Asean+3 finance ministers -Â all 10 from the Association of Southeast Asian Nations (Asean) and their counterparts from South Korea, Japan and China - agreed to expand the crisis fund from its original US$80 billion.
At a press conference yesterday, Thai Finance Minister Korn Chatikavanij said that the individual contributions for each Asean member had been finalised. Asean will contribute 20 per cent of the US$120 billion, while China, Japan and South Korea will account for the rest. Singapore, Indonesia, Malaysia and Thailand will pump in US$4.76 billion each and the Philippines US$3.68 billion.
The other five members - Brunei, Cambodia, Laos, Vietnam and Myanmar - will contribute amounts based on the size of their foreign exchange reserves, said Mr Korn. China, Japan and South Korea will discuss the size of their contributions among themselves.
The expanded emergency fund allows for currency swaps to be multilateral, making it easier for struggling countries to tap on the funds. The exact details of the fund will be fleshed out in May when Asian finance ministers next meet in Bali.
Creating financial stability aside, the three-day Asean summit, which ends tomorrow, will also go a long way to helping the region achieve its long-term aim of creating a European Union-style community by 2015, said Mr Korn.
In one key statement that the leaders are expected to issue this weekend, they will make a greater call to expand regional trade links and reject protectionism. They are also likely to step up preparatory work for a giant free trade zone that would stretch all the way from China to Australia.
Source :BT
US$10b fund for SE-Asia
BEIJING - CHINA had planned to announce a $10 billion infrastucture investment fund and offer credit to neighbours at a cancelled weekend summit of Asian leaders in Thailand, its foreign minister said.
Anti-government protestors forced the cancellation of the summit in Pattaya after they swarmed into the summit venue.
In an interview with state media on a flight back to China, Foreign minister Yang Jiechi avoided direct criticism of the Thai government while detailing measures that Chinese premier Wen Jiabao had planned to offer at the summit.
China plans to establish a US$10 billion (S$15 billion) China-Asean investment cooperation fund to promote infrastructure that connects it to Asean nations, Mr Yang said.
China has been active in building roads from its southern border through neighbouring Myanmar, Laos, and Vietnam, to ease trade.
It will also offer a credit of $15 billion to Asean countries, including preferential loans of US$1.7 billion for cooperation projects, Mr Yang said.
It plans to offer 270 million yuan (S$59.9 million) in aid to Cambodia, Laos and Myanmar to help those impoverished countries combat the global financial crisis, and will inject US$50 million into the China-Asean cooperation fund, Yang said.
While not an Asean member, China's growing economic clout, huge market and competitive exports make it an important participant in Asean summits, although tensions persist over competing claims to the South China Sea and Chinese plans for dams that are opposed by other nations along the Mekong river.
China recently appointed its first ambassador to Asean, after the 10-member grouping formally adopted a charter. -- REUTERS
Source :Straits Times
Anti-government protestors forced the cancellation of the summit in Pattaya after they swarmed into the summit venue.
In an interview with state media on a flight back to China, Foreign minister Yang Jiechi avoided direct criticism of the Thai government while detailing measures that Chinese premier Wen Jiabao had planned to offer at the summit.
China plans to establish a US$10 billion (S$15 billion) China-Asean investment cooperation fund to promote infrastructure that connects it to Asean nations, Mr Yang said.
China has been active in building roads from its southern border through neighbouring Myanmar, Laos, and Vietnam, to ease trade.
It will also offer a credit of $15 billion to Asean countries, including preferential loans of US$1.7 billion for cooperation projects, Mr Yang said.
It plans to offer 270 million yuan (S$59.9 million) in aid to Cambodia, Laos and Myanmar to help those impoverished countries combat the global financial crisis, and will inject US$50 million into the China-Asean cooperation fund, Yang said.
While not an Asean member, China's growing economic clout, huge market and competitive exports make it an important participant in Asean summits, although tensions persist over competing claims to the South China Sea and Chinese plans for dams that are opposed by other nations along the Mekong river.
China recently appointed its first ambassador to Asean, after the 10-member grouping formally adopted a charter. -- REUTERS
Source :Straits Times
Wednesday, April 8, 2009
STI falls 1% to close at 1,783.96
he Straits Times Index dropped 1% to 1,783.96 at the close. Four stocks declined for every three that advanced among the gauge’s 30 constituents. The following companies were among the most active in the stock market today, reported Bloomberg.
Commodity suppliers: The Reuters/Jefferies CRB Index of 19 commodities fell 0.7% yesterday in New York, its second-consecutive drop. Palm oil for June delivery slipped as much as 1.2% in Kuala Lumpur today. Olam International (OLAM SP), a supplier of agricultural commodities, dipped 1.9% to $1.59. Wilmar International (WIL SP), the world’s biggest palm oil trader, lost 1.5% to $3.27. Noble Group (NOBL SP), a Hong Kong-based commodity supplier, declined 0.8% to $1.21.
CapitaLand (CAPL SP), Southeast Asia’s biggest developer, slipped 2.7% to $2.47. Oversea-Chinese Banking Corp. downgraded its rating to “hold” from “buy”.
Neptune Orient Lines (NOL SP), Southeast Asia’s biggest container carrier, slumped 6.7% to $1.26. The company’s Chief Executive Officer Ron Widdows told The Financial Times that an oversupply of container ships has left companies that own them in a worse position than dry bulk carriers.
SembCorp Marine (SMM SP), the world’s second-biggest oil-rig builder, declined 1.5% to $1.97. ABN Amro Holding NV downgraded its rating to “hold” from “buy” and maintained its share-price target to $2.10.
Source:The edge
Singapore Petroleum Co. (SPC SP), the city’s only publicly traded oil refiner and explorer, slid 1.3% to $2.98. Crude-oil futures fell 2.7% to US$47.83 a barrel in Asian trading, its fourth-straight day of declines.
Singapore Press Holdings (SPH SP), the city’s biggest newspaper publisher, gained 1.2% to $2.65. The company is likely to maintain a dividend of 8 cents a share when it announces earnings for the second quarter ended February on April 13, Andy Sim, analyst at DBS Group Holdings , wrote in a note today. Sim expects Singapore Press’ second-quarter operating profit to fall 12% to $103 million due to a drop in advertising revenue.
SMRT Corp. (MRT SP), the city’s biggest commuter train operator, gained 3.4% to $1.53. Train ridership is expected to grow 3.5% in the year ending March 2010, supported by the extension of the existing railway in the western part of the city-state and opening of the new circle line, BNP Paribas analyst Damien Chua wrote in a note yesterday.
Straits Trading Co. (STRTR SP), which has interests in tin smelting and property leasing, slipped 2.5% to $3.12. The company said Victoria Tse has retired as group chief financial officer. Financial controller Eldon Wan will assume Tse’s responsibilities, it said.
STX Pan Ocean Co. (STX SP), South Korea’s biggest bulk carrier, dipped 1.5% to $11.90. The Baltic Dry Index, which measures the cost of shipping commodities, fell 1.4% in London yesterday, its 20th day of declines and the longest losing streak since Nov 4.
Commodity suppliers: The Reuters/Jefferies CRB Index of 19 commodities fell 0.7% yesterday in New York, its second-consecutive drop. Palm oil for June delivery slipped as much as 1.2% in Kuala Lumpur today. Olam International (OLAM SP), a supplier of agricultural commodities, dipped 1.9% to $1.59. Wilmar International (WIL SP), the world’s biggest palm oil trader, lost 1.5% to $3.27. Noble Group (NOBL SP), a Hong Kong-based commodity supplier, declined 0.8% to $1.21.
CapitaLand (CAPL SP), Southeast Asia’s biggest developer, slipped 2.7% to $2.47. Oversea-Chinese Banking Corp. downgraded its rating to “hold” from “buy”.
Neptune Orient Lines (NOL SP), Southeast Asia’s biggest container carrier, slumped 6.7% to $1.26. The company’s Chief Executive Officer Ron Widdows told The Financial Times that an oversupply of container ships has left companies that own them in a worse position than dry bulk carriers.
SembCorp Marine (SMM SP), the world’s second-biggest oil-rig builder, declined 1.5% to $1.97. ABN Amro Holding NV downgraded its rating to “hold” from “buy” and maintained its share-price target to $2.10.
Source:The edge
Singapore Petroleum Co. (SPC SP), the city’s only publicly traded oil refiner and explorer, slid 1.3% to $2.98. Crude-oil futures fell 2.7% to US$47.83 a barrel in Asian trading, its fourth-straight day of declines.
Singapore Press Holdings (SPH SP), the city’s biggest newspaper publisher, gained 1.2% to $2.65. The company is likely to maintain a dividend of 8 cents a share when it announces earnings for the second quarter ended February on April 13, Andy Sim, analyst at DBS Group Holdings , wrote in a note today. Sim expects Singapore Press’ second-quarter operating profit to fall 12% to $103 million due to a drop in advertising revenue.
SMRT Corp. (MRT SP), the city’s biggest commuter train operator, gained 3.4% to $1.53. Train ridership is expected to grow 3.5% in the year ending March 2010, supported by the extension of the existing railway in the western part of the city-state and opening of the new circle line, BNP Paribas analyst Damien Chua wrote in a note yesterday.
Straits Trading Co. (STRTR SP), which has interests in tin smelting and property leasing, slipped 2.5% to $3.12. The company said Victoria Tse has retired as group chief financial officer. Financial controller Eldon Wan will assume Tse’s responsibilities, it said.
STX Pan Ocean Co. (STX SP), South Korea’s biggest bulk carrier, dipped 1.5% to $11.90. The Baltic Dry Index, which measures the cost of shipping commodities, fell 1.4% in London yesterday, its 20th day of declines and the longest losing streak since Nov 4.
DBS says eyeing market share gains
DBS Group (DBSM.SI), Southeast Asia's biggest bank, is well-capitalised and plans to take advantage of opportunities to increase its market share as foreign banks retreat from Asia, its chairman said today, reported Thomson Reuters.
The remarks were a sign how DBS, like other Asian banks, is gunning for higher market share as battered Western rivals shun loan and debt deals.
DBS Chairman Koh Boon Hwee told shareholders at the bank’s annual general meeting that the capital-raising, such as the $4 billion rights issue DBS made in January, would enable it to expand its share in existing and newer markets in the region.
Source: The edge magazine, singapore
The remarks were a sign how DBS, like other Asian banks, is gunning for higher market share as battered Western rivals shun loan and debt deals.
DBS Chairman Koh Boon Hwee told shareholders at the bank’s annual general meeting that the capital-raising, such as the $4 billion rights issue DBS made in January, would enable it to expand its share in existing and newer markets in the region.
Source: The edge magazine, singapore
Friday, April 3, 2009
G-20 strikes US$1 trillion deal to roll back recession
LONDON) World leaders agreed to a trillion-dollar deal yesterday to combat the deepest economic downturn since the Great Depression.
First order of business: US President Barack Obama (bottom right) greeting some of the world leaders and top financial officials yesterday as they prepare to pose for a group photo
The Group of 20 (G-20) leaders called for stricter limits on hedge funds, executive pay, credit-rating companies and risk-taking by banks. They also boosted the resources of the International Monetary Fund (IMF) and offered cash to revive trade to help governments weather the economic and social turmoil.
But they sidestepped the question of whether to deliver more fiscal stimulus in their own economies.
The group of leading industrial and developing nations also agreed to create a new supervisory body to flag potential problems in the global financial system.
'This is the day that the world came together, to fight back against the global recession. Not with words but a plan for global recovery and for reform and with a clear timetable,' British Prime Minister Gordon Brown, the summit host, said.
Mr Brown says the G-20 will create a new financial stability board to ensure cooperation across frontiers, to spot risks to the world economy and - together with the IMF - provide 'the early warning mechanism that this new global economy needs'.
Mr Brown says it is essential that the world does everything necessary to 'rebuild trust' and make sure 'a crisis such as this' never happens again.
World markets reacted positively. The index of top European shares was up 5 per cent after Japan's Nikkei gained 4.4 per cent. On Wall Street, the Nasdaq was up 4 per cent and the Dow Jones 3.6 per cent.
Mr Brown said that while there were 'no quick fixes', the decisions meant that 'we can shorten the recession and we can save jobs'.
French President Nicolas Sarkozy said the results were beyond what could have been imagined while German Chancellor Angela Merkel said that the package of measures agreed on by the leaders was 'very, very good'.
The G-20 agreement is 'a victory for common sense' and an 'important step towards order' in markets, Ms Merkel told reporters. The G-20 agreed to build a new 'financial-market architecture', a key German demand, she added.
Mr Brown said the leaders agreed 'there will be an end to tax havens that do not transfer information on request. The banking secrecy of the past must come to an end'.
He said leaders agreed to commit new resources of US$1 trillion that are available to the world economy through the IMF and other institutions.
This included US$250 billion of IMF reserve units called Special Drawing Rights.
'This is available to all IMF members,' Mr Brown said.
In addition, the IMF would see its own resources tripled, with up to US$500 billion of new funds.
The G-20 also ordered the IMF to sell billions of dollars of gold reserves to help the world's poor countries and a trade finance package worth US$250 billion over two years to support global trade flows. -- Reuters, AP, AFP, Bloomberg
Source : BUsiness Times Singapore
First order of business: US President Barack Obama (bottom right) greeting some of the world leaders and top financial officials yesterday as they prepare to pose for a group photo
The Group of 20 (G-20) leaders called for stricter limits on hedge funds, executive pay, credit-rating companies and risk-taking by banks. They also boosted the resources of the International Monetary Fund (IMF) and offered cash to revive trade to help governments weather the economic and social turmoil.
But they sidestepped the question of whether to deliver more fiscal stimulus in their own economies.
The group of leading industrial and developing nations also agreed to create a new supervisory body to flag potential problems in the global financial system.
'This is the day that the world came together, to fight back against the global recession. Not with words but a plan for global recovery and for reform and with a clear timetable,' British Prime Minister Gordon Brown, the summit host, said.
Mr Brown says the G-20 will create a new financial stability board to ensure cooperation across frontiers, to spot risks to the world economy and - together with the IMF - provide 'the early warning mechanism that this new global economy needs'.
Mr Brown says it is essential that the world does everything necessary to 'rebuild trust' and make sure 'a crisis such as this' never happens again.
World markets reacted positively. The index of top European shares was up 5 per cent after Japan's Nikkei gained 4.4 per cent. On Wall Street, the Nasdaq was up 4 per cent and the Dow Jones 3.6 per cent.
Mr Brown said that while there were 'no quick fixes', the decisions meant that 'we can shorten the recession and we can save jobs'.
French President Nicolas Sarkozy said the results were beyond what could have been imagined while German Chancellor Angela Merkel said that the package of measures agreed on by the leaders was 'very, very good'.
The G-20 agreement is 'a victory for common sense' and an 'important step towards order' in markets, Ms Merkel told reporters. The G-20 agreed to build a new 'financial-market architecture', a key German demand, she added.
Mr Brown said the leaders agreed 'there will be an end to tax havens that do not transfer information on request. The banking secrecy of the past must come to an end'.
He said leaders agreed to commit new resources of US$1 trillion that are available to the world economy through the IMF and other institutions.
This included US$250 billion of IMF reserve units called Special Drawing Rights.
'This is available to all IMF members,' Mr Brown said.
In addition, the IMF would see its own resources tripled, with up to US$500 billion of new funds.
The G-20 also ordered the IMF to sell billions of dollars of gold reserves to help the world's poor countries and a trade finance package worth US$250 billion over two years to support global trade flows. -- Reuters, AP, AFP, Bloomberg
Source : BUsiness Times Singapore
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