July 15, 2008

Some selected news from bloomberg site

Market Data
Fitch Cuts Outlook on India's Debt on Budget Concerns (Update3)

By [bn:PRSN=1] Kartik Goyal []

"July 15 (Bloomberg) -- India's credit outlook was cut to ``negative'' by Fitch Ratings on concern rising subsidies, interest payments and wages will weaken government finances."

"Bonds, the rupee and stocks fell after Fitch reduced its outlook from ``stable'' on India's local-currency debt rating of BBB-, the lowest investment grade and six levels below China and Japan. Standard & Poor's last week said it may cut India's credit rating to junk if the economy deteriorates further."

"``The revision to the local currency outlook is based on a considerable deterioration in the central government's fiscal position, combined with a notable increase in government debt issuance to finance subsidies not captured in the budget,'' James McCormack, Fitch's head of Asia sovereign ratings, said in a statement today."

"Prime Minister Manmohan Singh is spending more on government salaries, has increased food, fuel and fertilizer subsidies and waived farmers from repaying $17 billion of debt to mitigate the effects of runaway inflation. A rating downgrade may reduce investment coming into the country and make it more expensive for Indian companies to borrow."

"``Any downgrade on the country's credit profile will lead to further loss of interest among overseas investors,'' said Jayesh Shroff, who helps manage about $3.5 billion at SBI Asset Management Co. in Mumbai. ``This action may lead to higher cost of borrowings for Indian companies overseas.''"

Bonds Fall

"India's 10-year bonds declined, pushing yields to near the highest since 2001, after Fitch cut its outlook. The yield on the benchmark 8.24 percent note climbed 9 basis points to 9.47 percent as of 1:58 p.m. in Mumbai. The benchmark stock index fell 4 percent and the rupee dropped as much as 0.7 percent to 42.23 per dollar."

"Foreign investors, who bought a record $17.2 billion of Indian stocks last year, are now fleeing Asia's third-largest economy amid the fastest inflation in 13 years and the weakest growth since 2004. Overseas investors have pulled out $6.73 billion since January, contributing to the 37 percent decline in the benchmark stock index this year."

"India's budget deficit in the current fiscal year may widen to 4.5 percent of gross domestic product from 2.8 percent in the previous 12 months due to higher interest costs and salaries and rising subsidies, Fitch said today."

Moody's Investors Service has a Ba2 rating on India's long- term local-currency debt and S&P ranks it BBB-.

Wider Deficit

"Fitch said bonds issued to oil and fertilizer companies by the government will reach at least 2 percent of GDP this fiscal year, implying an underlying deficit of 6.5 percent."

"The government plans to give 946 billion rupees ($22 billion) of bonds to oil companies to compensate them for selling fuels below cost, spending that the government doesn't include in its budget."

"India's budget position may deteriorate as it plans to raise salaries for about 4 million employees this year. It also cut import duties on crude oil and other oil products in June, sacrificing $5.3 billion of revenue to keep fuel costs low in a nation which relies on imports for 70 percent of its energy needs. The government has lowered import taxes on edible oils, cement and other food items in 2008."

"Rising fuel costs have pushed inflation to 11.9 percent. That prompted the central bank to twice raise its benchmark interest rate in June, pushing it to a six-year high of 8.5 percent. It also lifted the cash reserve ratio to 8.75 percent."

Interest Rates

The ratings company said India's central bank may further raise borrowing costs as inflation approaches 12 percent. Fitch cut its GDP forecast to 7.7 percent for the current fiscal year from 8 percent.

"``Weaker economic growth and higher real interest rates would affect the fiscal outturn and further undermine international capital flows,'' today's statement said."

"Still, Fitch said India's external solvency indicators continue to compare favorably with those of its rating peer group and still support a stable outlook on the sovereign foreign-currency rating."

Finance Minister Palaniappan Chidambaram on July 1 said India may post a smaller budget deficit than the government forecast in the fiscal year that started April 1. India aims to cut the shortfall to 2.5 percent of GDP.

"Chidambaram is banking on higher revenue collections to help him meet the additional spending needs and stick to his deficit targets. India last year collected a record $72 billion in taxes from companies and individuals, 36.6 percent more than the previous 12 months. This year, the government aims to collect more than the targeted $85 billion in taxes."

To contact the reporter on this story: Kartik Goyal in New Delhi at kgoyal@bloomberg.net.

"Last Updated: July 15, 2008 05:10 EDT"





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Market Data
Chongqing Steel Shares Gain in Shanghai on Profit Increase

By Helen Yuan

"July 15 (Bloomberg) -- Chongqing Iron & Steel Co., the steelmaker based in the southwestern Chinese municipality, rose the most in almost two months in Shanghai trading after it said first-half profit increased by more than 60 percent."

"Chongqing Steel gained as much as 9.2 percent, the biggest move since May 21, to 5.91 yuan today, and traded at 5.73 yuan at 10:13 a.m. local time."

"The company said yesterday its profit rose on increased prices and output, without giving details. It posted a profit of 263.9 million yuan ($39 million) in the first six months of 2007 under the Chinese accounting standards."

To contact the reporter for this story: Helen Yuan in Shanghai at hyuan@bloomberg.net

"Last Updated: July 14, 2008 22:16 EDT"





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Market Data
"Ericsson Retreats After Carnegie, WestLB Cut Recommendations "

By Jakob Lindstroem

"July 15 (Bloomberg) -- Ericsson AB, the world's largest maker of wireless phone networks, dropped to the lowest in almost three weeks in Stockholm trading after D. Carnegie & Co. and WestLB AG reduced their recommendations."

"Carnegie lowered its recommendation on the stock to ``underperform'' from ``neutral.'' WestLB cut its recommendation to ``hold'' from ``buy,'' and reduced its stock-price target to 69 kronor from 94 kronor. Ericsson fell as much as 1.8 kronor, or 2.8 percent, to 61.9 kronor, the lowest since June 27."

"``With pressure on consumer spending, a higher cost of capital for operators and upwards pressure on capital expenditure from labor and commodity price inflation in emerging markets,'' momentum for global system for mobile communications, or GSM, technology, ``might slow rapidly,'' Stockholm-based Carnegie analyst Martin Nilsson wrote in a report dated today."

"Ericsson shares declined 1.7 kronor, or 2.7 percent, to 62 kronor at 9:57 a.m., giving the Stockholm-based company a market value of 200.1 billion kronor ($33.8 billion)."

"``Second-quarter consensus expectations are very ambitious and we fear that second-quarter results could be disappointing,'' Dusseldorf-based WestLB analyst Thomas Langer wrote in a report dated today. ``This all leads to a cautious stance ahead of the second-quarter report and more subdued approach towards valuation in the short-term.'' Ericsson is scheduled to publish earnings on July 22."

To contact the reporter on this story: Jakob Lindstroem in Stockholm at jlindstroem@bloomberg.net.

"Last Updated: July 15, 2008 04:04 EDT"





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Market Data
Germany to Sell New 30-Year Bonds as Prices Tumble (Update1)

By Kim-Mai Cutler and Anchalee Worrachate

"July 15 (Bloomberg) -- Germany plans to sell new 30-year bonds at an auction on July 23, after the price of an existing set of securities fell, according to the Bundesbank."

"The central bank will issue the 2040 securities instead of selling more of its 2039 bonds ``due to developments in the capital markets,'' the Bundesbank said today on its Web site. German regulations prohibit the government from selling more of an existing 30-year bond if its price is less than 94. The 2039 security has traded below that level since May 14."

"``Central banks try to maximize the cash flow they can get from auctions, so if a bond is trading very much below par, the government is going to receive much less than it issues,'' said Vishal Pathak, an interest-rate strategist at BNP Paribas SA in London. ``I'm very, very bullish on German paper. There will be value in this for structural holders like pension funds. Germany has the best fundamentals in European and it's the most liquid market.''"

"The price of the 4.25 percent bond maturing in July 2039 rose 0.41, or 4.1 euros cents per 1,000-euro ($1,596) face amount, to 92.58 today."

"Germany last sold 30-year bonds on Jan. 23, issuing 3.3 billion euros of debt yielding 4.45 percent. The bid-to-cover ratio, a gauge of demand, was 2.1."

To contact the reporter on this story: Kim-Mai Cutler in London at kcutler@bloomberg.net; Anchalee Worrachate in London at aworrachate@bloomberg.net

"Last Updated: July 15, 2008 10:25 EDT"





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Market Data
"Spanish Builders Tumble Most Since 1999 on Credit, Loan Concern "

By Brian McGee

"July 15 (Bloomberg) -- Fomento de Construcciones y Contratas SA, Grupo Ferrovial SA and Sacyr Vallehermoso SA tumbled the most since at least 1999 in Madrid trading, weighed down by investor concerns that acquisitions may have saddled the companies with too much debt."

"FCC, Spain's third-biggest construction company, dropped as much as 9 percent to 31.80 euros ($50.88), the most since September 1992. Ferrovial, which spent 10 billion pounds ($20 billion) buying London Heathrow airport operator BAA Ltd., fell as much as 13 percent to 28.94 euros, the steepest drop since May 1999."

"Stocks fell in Europe and Asia and U.S. index futures declined, sending the MSCI World Index to its lowest since 2006, as credit-market losses dragged down banking shares and German investor confidence tumbled. Martinsa-Fadesa SA yesterday became the first publicly traded Spanish developer to seek protection from creditors since a decade-long property boom ended last year."

"``It's a sentiment effect in all sectors, maybe Spanish builders are getting hurt more because of Martinsa-Fadesa,'' said Sonia Baldeira, a construction analyst at Espirito Santo Research in Lisbon. ``When something like that happens, people look at which companies have the most debt.''"

"Sacyr, the nation's fifth-biggest builder, fell as much as 14 percent to 12.91 euros, the steepest tumble since October, 1989. The stock traded at 13.44 euros as of 1:40 p.m. in Madrid."

"FCC changed hands at 32.93 euros, while Ferrovial was at 30.15 euros."

"Actividades de Construccion & Servicios, Spain's biggest builder, fell as much as 7.6 percent to 26.93 euros, the most since September, 2001, and last traded at 27.41 euros. The company has no plans to sell its stake in Hochtief AG of Germany, said an ACS spokesman, denying speculation circulating in the market. The spokesman declined to be identified."

"BAA, the world's biggest airport operator, yesterday proposed swapping about $9.6 billion of bonds for new notes backed by London's Heathrow and Gatwick airports to help avert credit rating downgrades. FCC is paying an interest margin on 1.22 billion euros of loans that's more than double the rate when it borrowed almost a year ago, a banker with direct knowledge of the deal said May 8."

To contact the reporter on this story: Brian McGee in Madrid at bmcgee3@bloomberg.net

"Last Updated: July 15, 2008 08:09 EDT"





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Market Data
Teck Falls as Zinc Oversupply Concern Overshadows Mine Closing

By Rob Delaney

"July 15 (Bloomberg) -- Teck Cominco Ltd., Canada's largest diversified mining company, fell in Toronto trading after the company said it would close a zinc mine in Australia and the price of the metal continued to decline."

"Teck dropped C$2.41, or 5.5 percent, to C$41.49 at 10:59 a.m. on the Toronto Stock Exchange. A close at that price would be the biggest daily loss since July 2. The shares declined 11 percent this month before today."

"Teck and Xstrata Plc said yesterday they will close the joint-venture Lennard Shelf Pillara zinc mine in Western Australia next month, earlier than planned, because of a decline in zinc prices and the rising Australian dollar. Vancouver-based Teck had planned to shut the mine in 2010 and in April moved the closing to late 2009."

"``Announcement of the closure has not had a positive impact on the zinc price, as the market speculates that larger Chinese smelters may not cut enough production to make a significant dent in expected surpluses,'' Greg Barnes, an analyst at TD Newcrest Inc. in Toronto, said today in a note to clients."

China's smaller zinc and lead smelters agreed July 12 to cut output 10 percent to support prices and ease a power shortage.

"Zinc for delivery in three months dropped $120, or 6 percent, to $1,885 a metric ton as of 4 p.m. on the London Metal Exchange. The contract fell 1 percent yesterday."

"Zinc, used to galvanize steel, has declined 20 percent this year amid rising inventories, and fell 44 percent last year."

To contact the reporter on this story: Rob Delaney in Toronto at robdelaney@bloomberg.net.

"Last Updated: July 15, 2008 11:10 EDT"





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Market Data
Burberry Sales Rise 22% on Earlier Shipments of Goods (Update3)

By Sara Gay Forden and Sarah Shannon

Enlarge Image/Details

"July 15 (Bloomberg) -- Burberry Group Plc, the maker of $2,195 metal-studded Warrior handbags, said first-quarter sales rose 22 percent on earlier shipments of autumn and winter goods to wholesale distributors in emerging markets."

"Sales climbed to 211 million pounds ($422 million) in the three months through June from 167 million pounds a year earlier, the London-based company said today. That beat the 195 million- pound median estimate of nine analysts surveyed by Bloomberg. Wholesale revenue jumped 45 percent excluding currency movements."

"Burberry added shops in Budapest and the Azerbaijani capital of Baku during the quarter, helping to double emerging-markets revenue. It shipped goods further in advance after improving computer systems and installing SAP AG software. First-half wholesale revenue will rise more than 10 percent, according to Burberry, above its prior forecast."

"``Increased confidence from being able to reduce cancellations and the opportunity for reorders'' contributed to the higher prediction, Chief Financial Officer Stacey Cartwright said on a conference call with analysts. While wholesale and retail sales probably will keep dropping in Spain, growth in the U.S. will compensate, she said."

Company Stores

"First-quarter sales gained 19 percent at the clothier's own shops excluding currency movements. Burberry's outlets generated about 55 percent of revenue, less than the estimate of about 60 percent from London-based HSBC analyst Antoine Belge. Sales rose 4.5 percent at stores open at least a year, less than the 8 percent gain for the fiscal year that ended in March."

"``Like-for-likes have been consistently decelerating as the company faces volatile consumer demand,'' Antoine Colonna, an analyst at Merrill Lynch in Paris with a ``neutral'' rating on the stock, wrote in a research report."

"Burberry rose 4.5 pence, or 1.1 percent, to 401.5 pence at 11:18 a.m. in London trading, erasing a decline of as much as 2 percent. The stock has dropped 30 percent this year, about the same as the 13-company Bloomberg European Fashion Index, which has slid on concern that the worldwide credit crunch and slowing economies may cut into demand for luxury goods."

"The clothier may buy back shares during the second half, according to the CFO. Burberry will have around 100 million pounds of net debt, she said. Until now, the company had forecast a 10 percent gain in first-half wholesale revenue."

`Sex and the City'

"Burberry, whose black-leather-and-fur trench coat was worn by Sarah Jessica Parker in the ``Sex and the City'' movie, was among seven companies whose profit estimates were lowered by Goldman, Sachs & Co. on July 10. Also that day, Deutsche Bank AG predicted weaker growth in industry demand in 2009."

"While the credit crunch has cost many big-spending bankers their jobs, Burberry can outperform peers in the U.S. because of its ``distinctive positioning'' as the only luxury-goods brand with a British heritage, Belge said in a July 8 research report. He also said shoppers are economizing on other products so they can maintain spending on luxury goods."

"``Luxury has become such a necessity that consumers are saving on goods that are seen as commodities, which do not have any `emotional' content or convey social status,'' he said in the report."

"Burberry's roots go back to a shop opened in Basingstoke, southwest of London, in 1856. The trench coat, a fashion staple often associated with Mickey Spillane's Mike Hammer and other fictional detectives, was first designed by the luxury-goods maker as a raincoat for officers in the British army."

More Millionaires

"Luxury companies are increasing sales from emerging markets as expanding Asian economies create more local millionaires. The number of millionaires jumped 23 percent in China last year and 20 percent in India, compared with a gain of about 4 percent in the U.S., an annual survey released last month by Capgemini SA and Merrill Lynch & Co. showed."

"Burberry, which outfitted Norwegian explorer Roald Amundsen's expedition to the South Pole in 1911, plans to expand its retail selling space this year by as much as 13 percent by opening 15 new directly owned stores in addition to its goal for increasing wholesale revenue."

To contact the reporters on this story: Sara Gay Forden in Milan at sforden@bloomberg.net; Sarah Shannon in London at sshannon4@bloomberg.net.

"Last Updated: July 15, 2008 06:21 EDT"





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Market Data
U.S. Energy Day Ahead: Crude Oil Gains on Dollar's Record Low

"July 15 (Bloomberg) -- Crude oil rose above $146 a barrel as the dollar fell to a record low against the euro, boosting the appeal of commodities as a currency hedge for investors."

"Russian billionaires who own the TNK-BP oil venture with BP Plc, Europe's second-largest crude producer, want to buy the U.K. company's 50 percent stake to end a struggle for control."

BLOOMBERG EXCLUSIVES

Russian Billionaires Want to End TNK-BP War by Buying BP Stake

"Russian billionaires who own the TNK-BP oil venture with BP Plc, Europe's second-largest crude producer, want to buy the U.K. company's 50 percent stake to end a struggle for control."

"Iraq Kirkuk Exports Fall on Baiji Refinery Needs, Power Outages"

"Iraq, holder of the Persian Gulf's third largest oil reserves, has reduced Kirkuk-grade crude exports to the Turkish Mediterranean port of Ceyhan below 400,000 barrels a day."

TOP ENERGY MARKETS STORIES

Oil Rises Above $146 as Falling Dollar Boosts Crude's Appeal

"Crude oil rose above $146 a barrel as the dollar fell to a record low against the euro, boosting the appeal of commodities as a currency hedge for investors."

OPEC Expects Demand for Its Crude Oil to Fall on Slower Economy

"The Organization of Petroleum Exporting Countries, the supplier of more than 40 percent of the world's oil, said it expects demand for its members' crude will fall next year as the global economy slows."

"U.S. Oil Supplies Probably Declined Last Week, Survey Shows"

"U.S. crude-oil supplies probably fell as record prices discouraged buying by refiners, according to a Bloomberg News survey of analysts."

Chevron Nigeria Resumes Onshore Crude Production After Attack

Chevron Corp.'s Nigeria unit resumed crude oil production that was cut after a militant attack on a pipeline in June.

"Uranium Prices May Be Lower Than Forecast, Goldman JBWere Says Uranium prices through 2011 may average lower than earlier forecast after spot prices bottomed later and at a lower level than anticipated and a long-term price indicator fell, Goldman Sachs JBWere Pty said."

Petrobras Union Rejects Offer; Offshore Oil Strike to Continue

"Brazil's oil-workers union in the Campos Basin, the source of more than 80 percent of the country's oil, rejected a settlement offer from their employer,state-controlled Petroleo Brasileiro SA."

REFINERIES

"Motiva Has Gas Pipeline Leak at Port Arthur, Texas Oil Refinery"

"Motiva Enterprises LLC, a joint venture between Royal Dutch Shell Plc and Saudi Arabia's state oil company, said it found a leak in a gas pipeline at its Port Arthur refinery in Texas."

Exxon Mobil Reports No Impact From Fire at Baytown Refinery

"Exxon Mobil Corp., the world's largest oil company, reported that there was no impact on production after a fire at its Baytown, Texas, refinery, the biggest in the U.S."

TOP ENERGY COMPANY STORIES

Chevron Says Kazakhstan Exempted Venture From Oil Export Duty

Chevron Corp.'s venture in Kazakhstan said the government granted it an exemption to a new duty on oil exports more than a month before the tax came into effect.

Waratah Coal Plans $5.2 Billion Investment in Queensland Project

"Waratah Coal Inc., the Canadian company proposing Australia's largest coal mine, may seek partners to help develop its A$5.3 billion ($5.2 billion) mining, port and rail project and gain from rising prices."

"Petronas Profit Jumps to Record After Oil, Gas Prices Surge"

"Petroliam Nasional Bhd., Malaysia's state oil company, said profit jumped to a record because of increased overseas production and higher prices for crude, petrochemical and liquefied natural gas."

NEWSPAPER HIGHLIGHTS

"TNK-BP Ordered to Provide Documents on Foreign Staff, FT Says"

"TNK-BP Holding, the oil joint venture between BP Plc and a group of Russian billionaires, was ordered by Moscow prosecutors yesterday to provide large quantities of documentary information on its foreign employees at short notice, the Financial Times reported."

"South Korea May Raise Gas Prices by 50% This Year, Yonhap Says"

"South Korea, which imports almost all its energy needs, is considering raising gas prices by 50 percent this year to reflect higher fuel costs, Yonhap News reported, citing Knowledge Economy Minister Lee Youn Ho."

"Last Updated: July 15, 2008 07:31 EDT"





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Market Data
Indian Bonds Decline After Fitch Cuts Debt Outlook to Negative

By Anoop Agrawal

"July 15 (Bloomberg) -- India's 10-year bonds declined, pushing yields to the highest since 2001, after Fitch Ratings cut its outlook for local-currency debt to negative, citing deteriorating government finances."

"The government may sell more than the planned 1.45 trillion rupees ($33.5 billion) of debt in the year ending March 31 as it increases spending on fuel subsidies and salaries, said Sanjay Arya, treasurer at state-owned Bank of Maharashtra. Benchmark yields have risen on nine of the eleven trading days this month."

"``Government finances are not being given enough priority and attention,'' Mumbai-based Arya said. ``Rising yields are reflecting the implications.''"

"The yield on the 8.24 percent note due April 2018 climbed 10 basis points to 9.48 percent at the 5:30 p.m. close in Mumbai, according to the central bank's trading system. The price dropped 0.58, or 58 paise per 100 rupee face amount, to 92.21. A basis point is 0.01 percentage point."

"``The revision to the local currency outlook is based on a considerable deterioration in the central government's fiscal position, combined with a notable increase in government debt issuance to finance subsidies not captured in the budget,'' said James McCormack, Fitch's head of Asia sovereign ratings."

"Fitch rates India's local debt BBB-, the lowest investment grade. A cut in outlook to negative means the company is a step closer to lowering the rating to speculative grade."

Widening Deficit

"The government's budget deficit this fiscal year may widen to 4.5 percent of gross domestic product from 2.8 percent in the previous 12 months due to higher interest costs and salaries and rising subsidies, Fitch said."

"``Most of the government's spending will have to be financed by borrowings,'' Bank of Maharashtra's Arya said. ``Investors are going to seek higher yields.''"

"The government plans to give 946 billion rupees of bonds to oil companies as compensation for selling fuels below cost, spending the government doesn't include in its budget. A panel has recommended that the government raise wages for about 4 million employees this year."

The reduction in import duties on crude oil and other oil products in June cost the government $5.3 billion in revenue. It cut the tariffs to lower fuel costs in a nation which relies on imports for 70 percent of its energy needs.

"The five-year fixed swap rate, which investors must pay in exchange for receiving a floating rate, closed at 10.11 percent, from 9.91 percent yesterday."

To contact the reporter on this story: Anoop Agrawal in Mumbai at aagrawal8@bloomberg.net.

"Last Updated: July 15, 2008 08:17 EDT"





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Market Data
"India's Sensex Drops to 15-Month Low; ICICI, HDFC Bank Decline "

By Pooja Thakur

"July 15 (Bloomberg) -- India's stocks dropped, driving the benchmark index to its lowest level in 15 months, after Fitch Ratings cut the nation's outlook to ``negative'' and on concern global credit-market losses will worsen, slowing growth."

"ICICI Bank Ltd. and HDFC Bank Ltd., two of India's three largest banks, tumbled. Fitch reduced the credit outlook from stable while affirming its BBB- rating, the lowest investment grade, on the country's long-term local-currency debt."

"``Any downgrade on the country's credit profile will lead to further loss of interest among overseas investors,'' said Jayesh Shroff, who helps manage about $3.5 billion at SBI Asset Management Co. in Mumbai. ``This action may lead to higher cost of borrowings for Indian companies overseas.''"

"The Bombay Stock Exchange's Sensitive Index, or Sensex, fell 654.32, or 4.9 percent, to 12,676.19. All stocks dropped on the 30-member index. The S&P CNX Nifty Index on the National Stock Exchange dropped 178.60, or 4.4 percent, to 3,861.10."

"ICICI dropped 8.6 percent to 529.15 rupees, its lowest since July 24, 2006. HDFC Bank fell 11 percent to 918.15 rupees, its biggest drop since it listed in 1995."

"A measure of financial stocks fell the most among 10 industry groups on the MSCI World Index. The gauge has tumbled 21 percent from its October record as accelerating inflation, record oil prices, and more than $400 billion in credit-related losses threatened to curb earnings and push the U.S. into recession."

Overseas Funds

"Overseas funds sold a net 3.1 billion rupees ($76.9 million) of Indian stocks on July 11, bringing their net sales this year to $6.73 billion, according to the nation's stock market regulator."

The following were among the most active stocks traded on the Bombay and National Stock Exchanges. Stock symbols are in parentheses after company names:

"Reliance Infrastructure Ltd. (RELI IN) fell 49.60 rupees, or 6.1 percent, to 768.45. The power generator controlled by billionaire Anil Ambani had its debt rating downgraded by Fitch Ratings on investments in infrastructure projects that have high execution risks."

"Ranbaxy Laboratories Ltd. (RBXY IN) dropped 66.10 rupees, or 14 percent, to 409.20, its most since April 28, 1993. Ranbaxy, India's largest drugmaker, extended yesterday's 11 percent decline after a U.S. legal probe sparked concern Daiichi Sankyo Co. may scrap its planned $4.6 billion takeover."

"SpiceJet Ltd. (SJET IN) added 0.6 rupee, or 2.2 percent, to 28.55. India's second-biggest budget airline said WL Ross & Co. will invest 3.45 billion rupees in the company."

"Sun Pharmaceutical Industries Ltd. (SUNP IN) dropped 30.75 rupees, or 2.3 percent, to 1,307.60. India's biggest drugmaker by market value extended an offer to buy the shares of Israel's Taro Pharmaceutical Industries Ltd. it doesn't already own. The extension to Sept. 2 was recommended by a judge in Tel Aviv to allow the court to rule on Taro's legal challenge to the offer, Sun said in a PRNewswire statement. The original deadline was July 28, according to the statement."

"TTK Healthcare Ltd. (TTKP IN) rose 9.6 rupees, or 12 percent, to 87.95. The maker of over-the-counter healthcare products said its board will meet on July 25 to consider buying back shares from the stock market."

To contact the reporter on this story: Pooja Thakur in Mumbai at pthakur@bloomberg.net

"Last Updated: July 15, 2008 06:49 EDT"





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Market Data
Micronas Declines to Lowest in Since 1998 on Outlook (Update1)

By Joseph Heaven and Daniela Silberstein

"July 15 (Bloomberg) -- Micronas Semiconductor Holding AG, Switzerland's biggest computer-chip maker, fell to the lowest in almost a decade in Zurich trading after paring the outlook for its biggest division for a second time this year."

"Micronas retreated as much as 43 centimes, or 6.7 percent, to 6.02 Swiss francs and traded at 6.08 francs as of 12:59 p.m., the lowest since October 1998. The Zurich-based company has a market value of 182 million francs ($181 million). Before today, the stock had dropped 43 percent this year."

"Full-year sales at its consumer unit may be 390 million francs to 400 million francs, Micronas said in a statement today. In April the forecast was for ``close'' to or less than 450 million francs."

"``Visibility on the market remains low and management expresses uncertainty with respect to the outlook,'' Michael Foeth, an analyst at Bank Vontobel AG in Geneva, wrote in a note to clients today. ``The company may need to take further action in order to stabilize the situation and avoid further cash outflow.'' Foeth advises investors hold the stock."

"Micronas today reported a second-quarter loss of 8.21 million francs, compared with a loss of 7.75 million francs in the first quarter, as the Euro 2008 soccer tournament and Beijing Olympics failed to boost television market orders."

To contact the reporters on this story: Joseph Heaven in Zurich at jheaven1@bloomberg.net; Daniela Silberstein in Zurich at dsilberstei2@bloomberg.net.

"Last Updated: July 15, 2008 07:10 EDT"





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Market Data
"Brazil Will Take Back Unexplored Oil Blocks, Lobao Tells Estado "

By Laura Price

"July 15 (Bloomberg) -- Brazil's government will take back oil blocks from companies that fail to explore them within the planned timeframe, O Estado de S. Paulo said, citing Mines and Energy Minister Edison Lobao."

"Lobao said the government may take blocks operated by companies including state-controlled oil company Petroleo Brasileiro SA and Exxon Mobil Corp., Estado reported. The law specifies that's what the government should do, Lobao said."

"A shortage of equipment such as platforms and drilling ships has caused delays in exploration, Lobao told Estado. He said the government should resume control of several blocks in 2008 and 2009, Estado reported."

To contact the reporter on this story: Laura Price in Sao Paulo at lprice3@bloomberg.net

"Last Updated: July 15, 2008 08:55 EDT"





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Market Data
Citigroup Shares Fall to Lowest Since Company Formed in 1998

By Josh Fineman

"July 15 (Bloomberg) -- Citigroup Inc., the biggest U.S. bank, fell to the lowest level in New York trading since former Chairman and Chief Executive Officer Sanford Weill created the company through a merger in October 1998."

"Citigroup, which has lost almost half its value on the New York Stock Exchange this year, dropped 43 cents to $14.79 at 9:31 a.m., the lowest since Oct. 8, 1998, the day the New York-based bank was formed through the $36 billion combination of Travelers Group Inc. and Citicorp."

"``The company has destroyed a lot of wealth, but Sandy Weill had a lot to do with that,'' said William Fitzpatrick, an equity analyst at Optique Capital Management Inc. in Milwaukee, Wisconsin, which manages $1.4 billion. ``He's the one who built this big monster. Clearly the company was too big.''"

"Vikram Pandit, who took over from Weill's successor, Charles O. Prince, in December, is lowering costs and shedding assets after the bank reported two straight quarterly losses totaling a record $15 billion. Citigroup has booked more than $40 billion of credit losses and writedowns since the subprime mortgage market collapsed last year, more than any other financial institution."

"Weill, 75, fused together an investment bank, commercial bank, insurance company, asset-management firm and consumer- finance company into a firm that had more than 300,000 employees, offices in more than 100 countries and more than $2 trillion of assets. Profit climbed to $17.9 billion in 2003, the year he left, triple the amount in 1998."

The shares have dropped about 75 percent since reaching a record $56.41 in December 2006. Citigroup spokeswoman Shannon Bell declined to comment.

Weill's Creation

"Citigroup's performance under Prince didn't match what investors came to expect from Weill, who demanded 15 percent annual profit increases during his 17 years as CEO of Citigroup, Travelers and their predecessors. Powered by a series of blockbuster deals, climaxing with Travelers' acquisition of Citicorp, Weill delivered a 160 percent stock gain during his last five years as CEO."

"Under Prince, Citigroup's assets increased by $689 billion from 2005 through 2007, an amount larger than the entire balance sheet of Wells Fargo & Co., the fifth-biggest U.S. bank. Prince, 58, was forced to resign last November as the bank headed for a record fourth-quarter loss of almost $10 billion."

"Pandit, 51, said in May that Citigroup will get rid of about $400 billion in assets over the next three years as he begins to whittle away at the company built by Weill."

`Legacy Assets'

"Citigroup will shed ``legacy assets,'' including real estate holdings and collateralized debt obligations, such as bonds backed by pools of subprime mortgages, Pandit said."

"The company agreed to sell employee-benefit joint venture CitiStreet LLC. In April, it agreed to sell the Diners Club International credit-card payment network and CitiCapital, a provider of leases and financing for industries including health care and construction."

"The bank has disclosed plans to eliminate about 14,000 jobs during the past year, according to data compiled by Bloomberg. UBS AG, Lehman Brothers Holdings Inc. and Merrill Lynch & Co. are among competitors that have announced more than 5,000 job cuts."

Pandit has raised $44 billion in capital through stock sales and private offerings to investment funds controlled by foreign governments including Abu Dhabi.

"Citigroup also plans to cut $15 billion in costs in the next two to three years, while targeting revenue growth of 9 percent, Pandit said."

"The bank slashed the quarterly dividend by 41 percent in January to 32 cents a share, the first drop since the early 1990s. Analysts including Oppenheimer & Co.'s Meredith Whitney have said the bank may have to cut the dividend again to bolster capital as losses escalate."

To contact the reporter on this story: Josh Fineman in New York at jfineman@bloomberg.net.

"Last Updated: July 15, 2008 09:32 EDT"





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Popolare Emilia Suspends Talks With Banca Marche (Update1)

By Alessandra Migliaccio

"July 15 (Bloomberg) -- Banca Popolare dell'Emilia Romagna Scrl, a regional Italian lender, said it suspended merger talks with Banca delle Marche SpA."

"The discussions were halted because of ``changed market conditions,'' the Modena, Italy-based bank said today in a stock exchange statement. The two banks may start new talks again once ``the market situation stabilizes,'' Popolare dell'Emilia said."

"The banks will examine possible collaboration on ``specific areas of business,'' according to the statement."

"In a separate statement, Popolare del Emilia denied ``market rumors'' that it planned to delist savings shares of its Banco di Sardegna SpA unit."

To contact the reporters on this story: Alessandra Migliaccio in Rome at amigliaccio@bloomberg.net;

"Last Updated: July 15, 2008 05:48 EDT"





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"Croatian Inflation Rate Rises to Record on Food, Oil (Update1) "

By Boris Cerni

July 15 (Bloomberg) -- Croatia's inflation rate rose beyond expectations in June to a record as food and energy prices advanced.

"The rate increased for the third consecutive month to 7.6 percent from 6.4 in May, the state statistical office in Zagreb said today in an e-mail. The result was above the median estimate of 7.1 percent in a Bloomberg survey of four economists. Consumer prices rose 0.7 percent from May."

"``It's definitely above expectations and consumer prices have been driven up by food and transport due to high oil prices,'' said Alen Kovac, an analyst at Erste&Steiermaerkische Bank d.d. in Zagreb. ``Inflation should average at 6.5 percent and slow toward the year's end.''"

"Surging global food and energy costs are fueling inflation worldwide. Croatia, wedged between Slovenia, Hungary, Serbia and Bosnia-Herzegovina, is the next in line to join the European Union and high inflation may hinder efforts to align its economy with those of the 27-nation bloc."

"Food and non-alcoholic beverages rose the most, increasing an annual 13.1 percent, compared with a 10.9 increase in May. Transport, which includes energy costs, rose 10 percent from June last year."

"The government, led by Prime Minister Ivo Sanader, sees the inflation rate at 5.2 percent this year, compared with 2.7 percent in 2007."

"To contact the reporter on this story: Boris Cerni in Ljubljana, Slovenia, at bcerni@bloomberg.net"

"Last Updated: July 15, 2008 07:55 EDT"





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Market Data
"Salzgitter Buys Norddeutsche Stake, Plans Partnership (Update2) "

By Mike Gavin and Mark Herlihy

"July 15 (Bloomberg) -- Salzgitter AG, Germany's second- largest steelmaker, bought a 5.8% stake in Norddeutsche Affinerie AG as part of a planned tie-up with the copper refiner in sales and sourcing of raw materials."

"Salzgitter, based in the German city of the same name, will cooperate with Norddeutsche in technology, procurement and sales, it said in a statement on the OTS news service today."

"The company fell 5.52 euros, or 5.3 percent, to 98.78 euros as of 1:14 p.m. in Frankfurt trading, the lowest since Jan. 29 based on closing prices. Norddeutsche, Europe's largest copper refiner, fell 1.15 euros, or 3.2 percent, to 34.85 euros."

The two companies' shares gained last week after Die Welt said on July 10 that Salzgitter would take a 10 percent stake.

"Norddeutsche rose as much as 19 percent to a record after the report Salzgitter would buy 9 percent owned by A-Tec Industries AG, the Austrian company run by investor Mirko Kovats, and 1 percent from Ian Karan."

"Norddeutsche is looking forward to a ``reciprocal transfer of know-how in various sectors,'' Chief Executive Officer Bernd Drouven said in an e-mailed statement today."

To contact the reporter on this story: Mike Gavin in Frankfurt at mgavin2@bloomberg.net Mark Herlihy in London at mherlihy1@bloomberg.net.

"Last Updated: July 15, 2008 07:28 EDT"





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Market Data
Newell Rubbermaid Says 2008 Profit Will Fall More Than Forecast

By Mark Clothier and Kevin Bell

"July 15 (Bloomberg) -- Newell Rubbermaid Inc., the maker of Graco baby strollers and Calphalon frying pans, said full- year profit will fall more than it previously forecast because of higher costs for energy and plastic."

"Profit will drop in 2008 to $1.40 to $1.60 a share, excluding some items, from $1.82 a year earlier, the Atlanta- based company said today in a statement. In April, Newell forecast annual profit of $1.80 to $1.90 on that basis after predicting $1.95 to $2 in January. Analysts surveyed by Bloomberg estimate average profit of $1.76."

"Newell will raise prices, some as much as 22 percent, to counter the higher expenses, and sell or exit product lines representing about $500 million, or 8 percent, in annual revenue. Resin, an oil derivative used to make plastic, is Newell's largest raw-material expense, accounting for about 15 percent of product costs."

"``We're dealing with the product categories that are very resin-intensive and commoditized,'' Chief Executive Officer Mark Ketchum said in an interview. ``We've downsized these categories a lot already. The products that remained important were ones we were making nice progress on, but nice progress under a different set of conditions. This has really changed the rules of the game again.''"

"Newell rose 21 cents to $15.65 at 11:10 a.m. in New York Stock Exchange composite trading. Before today, the shares dropped 40 percent this year."

Stocks Fall

"Kimberly-Clark Corp., which said yesterday that costs this year are rising more than twice as fast as it predicted, dropped 5.1 percent. Clorox Co., the maker of Glad trash bags and bleach, decreased 4.77 percent. Procter & Gamble Co., which said today fourth-quarter profit and sales met its forecasts, rose less than 1 percent."

"Through earlier sales and restructuring, Newell has reduced its need for resin, to about 700 million pounds a year from 1.6 billion pounds in 2003, Chief Financial Officer Pat Robinson said in an interview."

"Retailers found out about the price increases today, Ketchum said."

"``They never like it, but let's face it, they have to deal with it in their own cost structure as well,'' Ketchum said. ``It's something that I think they're all dealing with.''"

"Ketchum said he hasn't decided which product lines would be sold, shrunk or closed. Probable candidates include Rubbermaid Home Storage and desktop organizers, he said."

"``Coming out of this, resin will still be single largest material buy, but we'll be in categories where the cost of resin relative to the cost of goods sold is much smaller,'' Ketchum said."

To contact the reporter on this story: Mark Clothier in Atlanta at mclothier@bloomberg.net; Kevin Bell in Toronto at Kbell2@bloomberg.net.

"Last Updated: July 15, 2008 11:13 EDT"





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CDC Rises After Reporting Revenue Exceeded Analysts' Estimates

By Jennifer Sondag

July 15 (Bloomberg) -- CDC Corp. rose 5.7 percent in early Nasdaq Stock Market trading after reporting second-quarter sales exceeded analysts' estimates.

"Sales increased as much as 10 percent from the first quarter to $108.5 million, CDC said in a statement distributed by Business Wire today, citing preliminary results. Analysts anticipated sales of $102.6 million, the average of nine estimates compiled by Bloomberg."

The shares rose 13 cents to $2.41 at 8:59 a.m. New York time from yesterday's close of $2.28.

To contact the reporter on this story: Jennifer Sondag in New York at jsondag@bloomberg.net.

"Last Updated: July 15, 2008 09:10 EDT"





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Market Data
U.S. Stocks Pare Retreat as Crude Oil Tumbles by More Than $9

By Elizabeth Stanton

Enlarge Image/Details

July 15 (Bloomberg) -- U.S. stocks rebounded as oil prices tumbled.

"The Standard & Poor's 500 Index pared its retreat to 0.9 percent after earlier dropping as much as 2.3 percent. Crude oil fell more than $9 a barrel, its first drop in a week, on concern that a slower economy will curtail demand."

"The S&P 500 lost 11.83 points to 1,216.47 at 11:14 a.m. in New York. The Dow Jones Industrial Average retreated 80.52 to 10,974.67. The Nasdaq Composite Index decreased 5.51, or 0.3 percent, to 2,207.36."

"More than $13 trillion has been wiped off the value of global equities since October as $416 billion in credit-related losses prolonged the global economy's slump and rising commodity prices stoke inflation. Among the 23 industrialized nations in the MSCI World Index, only Canada has averted a bear market."

"Financial, telephone and consumer shares led the S&P 500's 18 percent retreat this year even as the Fed slashed its benchmark interest rate seven times since September to bolster debt markets and make borrowing cheaper."

To contact the reporter on this story: Elizabeth Stanton in New York at estanton@bloomberg.net.

"Last Updated: July 15, 2008 11:15 EDT"





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Market Data
"French Stocks: BNP Paribas, Danone, Dexia, Gaz de France, Suez "

By Adria Cimino

"July 15 (Bloomberg) -- France's CAC 40 Index retreated 86.06, or 2.1 percent, to 4,056.47 at 12:39 p.m. in Paris, its lowest level since 2005. The SBF 120 Index slid 2.3 percent."

The following stocks rose or fell in Paris. Symbols are in parentheses.

"Financial shares declined as concern deepened that credit- market losses will widen. Dexia SA, the world's biggest lender to local governments, slid 8.3 percent to 7.83 euros. BNP Paribas SA, France's largest bank by assets, lost 4.8 percent to 53.17 euros. Axa SA, Europe's second-largest insurer, slipped 6 percent to 17.01 euros."

"Natixis SA, France's fourth-biggest bank by market value, tumbled 60 cents, or 11 percent, to 4.99 euros. Citigroup cut its share-price estimate to 5 euros from 6 euros, saying the bank may need to raise capital because of subprime-related writedowns. A spokeswoman for Natixis declined to comment."

"``There is the specter of credit market losses,'' said Benoit de Broissia, an analyst at Richelieu Finance in Paris, which oversees $6.2 billion. ``Financial companies' balance sheets are uncertain. Banks will continue to have difficult earnings and may have to call on the market for more capital.''"

"Groupe Danone SA (BN FP) slid 1.66 euros, or 3.9 percent, to 40.74, its lowest level since 2005. Citigroup Inc. cut its recommendation on shares of the world's biggest yogurt maker to ``hold'' from ``buy.''"

"European Aeronautic, Defence & Space Co. (EAD FP) fell 47 cents, or 4.1 percent, to 10.93 euros after jumping 6.2 percent yesterday. Airbus SAS, the planemaker controlled by EADS, and Boeing Co. logged $24 billion in first-day plane orders at the Farnborough International Air Show, falling short of previous totals. Orders trailed first-day bookings of about $47 billion a year ago, when the international gathering was held in Paris, and $42 billion at Dubai in November."

"Gaz de France SA (GAZ FP) climbed 48 cents, or 1.2 percent, to 39.05 euros, rising for a second day. Suez SA (SZE FP) advanced 44 cents, or 1.1 percent, to 41.02 euros, gaining for a second day. GDF Suez, the new company that will be created after the merger of utilities Suez and Gaz de France, will propose a special dividend of 0.80 euros per share to be paid by the end of the year."

"Linedata Services SA (LIN FP) added 23 cents, or 2.3 percent, to 10.40 euros, rebounding from three days of declines. The financial software designer said it signed a services partnership with Altaira LLC for advanced risk analytics."

"L'Oreal SA (OR FP) sank 2.09 euros, or 3.2 percent, to 63.19, its lowest level since 2006. Societe Generale SA cut its recommendation on shares of the world's biggest cosmetics maker to ``hold'' from ``buy.''"

To contact the reporter on this story: Adria Cimino in Paris at acimino1@bloomberg.net.

"Last Updated: July 15, 2008 06:45 EDT"





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Market Data
"Italy Stocks Update: Monte Paschi, Parmalat, Autogrill, Tiscali "

By Francesca Cinelli

"July 15 (Bloomberg) -- Italy's S&P/MIB Index fell to the lowest in almost four years, losing 857, or 3.1 percent, to 26,891. Futures expiring in September dropped 819, or 2.9 percent to 27,615."

The following were among the most active stocks on the Italian market today. Share symbols are in parentheses.

"Atlantia SpA (ATL IM), Europe's largest toll-highway operator, declined 68.9 cents, or 3.9 percent, to 17.06 euros. Mediobanca Securities cut its price estimate on the stock to 26.6 euros from 29 euros and kept its ``outperform'' recommendation."

"Assicurazioni Generali SpA (G IM), Italy's biggest insurer, fell 57 cents, or 2.5 percent, to 22.49 euros. Cheuvreux downgraded the stock to ``underperform'' from ``outperform'' and cut its price estimate to 24 euros from 34.5 euros."

"Autogrill SpA (AGL IM), the world's biggest manager of airport restaurants, dropped 25.4 cents, or 3.6 percent, to 6.89 euros, its lowest price since October 2002. Euromobiliare Sim SpA and Gruppo Banca Leonardo SpA cut their price estimates on the stock to 13.4 euros and 11.1 euros respectively ahead of tomorrow's investors' day."

"Banca Monte dei Paschi di Siena SpA (BMPS IM), Italy's third-biggest bank, dropped to the lowest in more than five years, losing 10.1 cents, or 5.8 percent, to 1.63 euros."

"UniCredit SpA (UCG IM), Italy's largest bank, declined 19.65 cents, or 5.5 percent, to 3.41 euros. Banking stocks were the worst performers among the 18 industry groups in Europe's Dow Jones Stoxx 600 Index today. ``The global financial crisis is far from being resolved,'' Niccolo Pini, a fund manager at Banca Ifigest SpA in Florence, told Bloomberg Television."

"Banca Popolare di Milano Scrl (BPM IM), the Italian bank with about 700 branches in the country's wealthy northern regions, gained 1.7 percent to 6.04 euros. Bank of Italy supervisors presented Popolare Milano's board with the results of a review."

"Buzzi Unicem SpA (BZU IM), Italy's second-biggest cement maker, dropped 82 cents, or 6.1 percent, to 12.53 euros. Euromobiliare cut its price estimate on the stock by 4 percent to 22.5 euros. Separately, WestLB lowered its price projection on Dyckerhoff AG, Buzzi's German subsidiary."

"Gemina SpA (GEM IM), which owns the manager of Rome's airports, dropped for the sixth consecutive session, losing 1.6 percent to 62.1 cents. Italian airports may be forced to pay back increases in tariffs they have charged airlines since 2001, Il Sole 24 Ore reported, without saying where it got the information."

"Impregilo SpA (IPG IM), Italy's biggest builder, fell 15.5 cents, or 5 percent, to 2.96 euros after adding 4.5 percent yesterday. The stock could react positively to a recent court decision to recalculate sequestered funds, Bruno Permutti, an analyst at Banca Imi, wrote in a report."

"Mediaset SpA (MS IM), the television company controlled by Italian Prime Minister Silvio Berlusconi, lost 8.5 cents, or 2.1 percent, to 3.96 euros. Cazenove kept its ``underperform'' recommendation on the stock after meeting with the company in London."

"Arnoldo Mondadori Editore SpA (MN IM), the publisher controlled by Prime Minister Silvio Berlusconi, fell to the lowest in more than 10 1/2 years, losing 17.75 cents, or 5.1 percent, to 3.33 euros."

"Gruppo Editoriale L'Espresso SpA (ES IM), the Italian publisher controlled by financier Carlo De Benedetti, declined to the lowest in almost 10 years, losing 6.2 cents, or 4.2 percent, to 1.41 euros."

"RCS MediaGroup SpA (RCS IM), the owner of Italy's biggest daily newspaper, fell to a record low, losing 5.7 cents, or 4.3 percent, to 1.26 euros."

"Seat Pagine Gialle SpA (PG IM), Italy's largest publisher of phone directories, dropped to a record low, losing 0.4 cents, or 6 percent, to 6.27 cents. Italian advertising spending fell 1.4 percent year-on-year in May, Nielsen Media Research said in a statement."

"Parmalat SpA (PLT IM), Italy's biggest dairy company, lost 12 cents, or 7.4 percent, to 1.51 euros. The company cut its profit forecast for 2008 because of weak economic growth in some of its main markets. Cheuvreux cut its price estimate on the stock to 2.05 euros from 2.4 euros."

"Risanamento SpA (RN IM), Italy's third-largest real estate company, fell the most in almost a month, losing 12.3 cents, or 11 percent, to 1.03 euros."

"Pirelli & C Real Estate SpA (PRS IM), Italy's largest property manager, dropped 73.1 cents, or 6.5 percent, to 10.57 euros. Exane reiterated its ``underperform'' rating on the real estate industry because of the ongoing credit squeeze, falling rental levels, higher bond yields and unattractive valuations."

"Saipem SpA (SPM IM), Europe's largest oil-field services contractor by market value, declined to the lowest in more than five months, losing 1.03 euros, or 4.1 percent, to 24.21 euros. Lehman Brothers downgraded the European oil industry from ``overweight'' to ``neutral'' and removed the stock from its European Recommended Portfolio."

"Safilo Group SpA (SFL IM), the world's second-largest maker of eyewear, fell to a record, losing 11.1 cents, or 9 percent, to 1.12 euros. Banca IMI cut its profit estimates through 2010. The brokerage rates the stock a ``hold.''"

"STMicroelectronics NV (STM IM), Europe's largest semiconductor maker, dropped 3.1 percent to 6.23 euros. Lehman Brothers cut its price estimate on the stock to 7.4 euros from 8 euros. JPMorgan analysts wrote in a report sent to clients that companies like STMicro with heavy handset exposure are likely to issue guidance calling for a slower second half."

"Tiscali SpA (TIS IM), the Italian Internet provider that's for sale, fell to the lowest in almost four months, losing 11.9 cents, or 7.3 percent, to 1.51 euros. ``Short sales are driving the shares,'' said Luca Sega, who helps manage 300 million euros at Aperta Sgr in Milan."

To contact the reporters on this story: Flavia Krause-Jackson in Rome at fjackson@bloomberg.net; Francesca Cinelli in Milan at fcinelli@bloomberg.net

"Last Updated: July 15, 2008 07:40 EDT"





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Bernanke Abandons Assessment of Lessening Growth Risk (Update2)

By Craig Torres and Scott Lanman

"July 15 (Bloomberg) -- Federal Reserve Chairman Ben S. Bernanke said risks to both U.S. growth and inflation have increased, abandoning officials' June assessment that threats to the expansion had ``diminished somewhat.''"

"There are ``significant downside risks to the outlook for growth,'' and ``upside risks to the inflation outlook have intensified,'' Bernanke said in semiannual testimony on the economy to the Senate Banking Committee in Washington."

"Bernanke's shift reflects renewed turmoil in markets that forced the Treasury and Fed to mount a rescue of Fannie Mae and Freddie Mac this week. He said that stabilizing financial markets remains ``a top priority,''"

"The Fed chief spoke less than two hours after government figures showed that the economic boost from U.S. tax rebates began to fade in June and inflation pressures increased. The dollar and stocks extended declines in the minutes after Bernanke's remarks, before recouping some losses."

"``Clearly, policy is on hold,'' said Stephen Stanley, chief economist at RBS Greenwich Capital Markets in Greenwich, Connecticut, and a former Fed economist. ``They are relatively concerned about the second half of the year.''"

Energy Impact

"Bernanke cited higher energy prices, reduced access to credit and a further deepening in the housing recession as dangers to growth. At the same time, he said: ``We must be particularly alert to any indications, such as an erosion of longer-term inflation expectations, that the inflationary impulses from commodity prices are becoming embedded'' in wages and prices."

"The Standard & Poor's 500 Index dropped to its lowest level since 2005, and was down 1.3 percent at 1,211.51 at 11 a.m. in New York. The U.S. currency was at 1.5970 per euro after reaching a record low earlier in the day."

"Retail sales rose 0.1 percent from the previous month, the Commerce Department reported today, less than economists forecast. Producer prices jumped 1.8 percent, the most since November, the Labor Department said. From a year ago, prices climbed 9.2 percent, a surge unseen since 1981."

"Bernanke's comments today are his first on monetary policy and the economic outlook since the Federal Open Market Committee's June 25 decision to leave the benchmark interest rate unchanged at 2 percent, pausing after seven cuts totaling 3.25 percentage points since September."

"``Helping the financial markets return to more normal functioning will continue to be a top priority of the Federal Reserve,'' the Fed chairman said."

"Fannie, Freddie"

"The comments come two days after the Treasury and Fed moved to provide a backstop for Fannie Mae and Freddie Mac, which have fallen more than 45 percent in six days."

"Bernanke said consumer spending is ``likely to be restrained over coming quarters,'' and businesses are ``likely to be cautious with their spending in the second half of the year.''"

"Federal tax rebates provided ``timely support'' for strained households, he said. That's helped household spending hold up better than was forecast, he added."

"Declines in home prices ``have contributed to the rising tide of foreclosures,'' the Fed chairman said. ``Foreclosures have, in turn, intensified the downward pressure on home prices in some areas.''"

"In new forecasts, Fed officials raised their projections for economic growth and inflation for this year, while reiterating their outlook for faster growth in 2009."

New Forecasts

"Fed governors and district bank presidents now see the economy expanding 1 percent to 1.6 percent this year, up from 0.3 percent to 1.2 percent in their April outlook. Consumer prices will rise 3.8 percent to 4.2 percent this year compared with a projected range of 3.1 percent to 3.4 percent in April. The economy should expand at a 2 percent to 2.8 percent rate in 2009, identical to the April forecasts."

"Risks to the economic outlook have risen after the Standard and Poor's Financials Index dropped 17 percent and Fannie Mae and Freddie Mac, the largest sources of U.S. home financing, slumped. Four days ago, the Federal Deposit Insurance Corp. took over IndyMac Bancorp Inc. as the California lender collapsed under soaring losses."

"``Most participants viewed the risks to their projections for gross domestic product growth as weighted to the downside,'' the Fed said in a section of its monetary policy report where it describes the forecasts. ``Most participants viewed the risks to their inflation projections as weighted to the upside.''"

Risks to Outlook

"Uncertainty in the forecasts was ``higher than normal,'' the Fed said, due to the ``duration and effects'' of financial strains on growth and ``the extent of pass-through'' of commodity prices to core inflation. Bernanke said that pass- through so far has been ``limited.''"

"The economy grew at an annualized rate of 1 percent in the first quarter, capping the weakest six months in five years. Financial turbulence is crimping credit to housing markets and businesses, while a near doubling of oil prices in the past year has pushed consumer expectations of inflation higher."

"``The effects of the housing contraction and of the financial headwinds on spending and economic activity have been compounded by rapid increases in the prices of energy and other commodities, which have sapped household purchasing power,'' Bernanke said."

"American households foresee average annual inflation of 3.4 percent over the next five years, the highest expectation since 1995, according to the Reuters/University of Michigan survey."

`Temporarily Higher'

"``Inflation seems likely to move temporarily higher in the near term,'' Bernanke said."

"Bernanke's hearing today will be ``brief'' in order to accommodate a second gathering with him, Treasury Secretary Henry Paulson and Securities and Exchange Commission Chairman Christopher Cox. Democratic Senator Christopher Dodd of Connecticut, who chairs the committee, set the second hearing yesterday to address financial markets."

"Tomorrow, Bernanke appears before the House Financial Services Committee for the second day of his semiannual testimony."

"The Federal Open Market Committee next meets Aug. 5 in Washington. Investors expect the central bank to leave the overnight interbank lending rate unchanged at 2 percent again. Traders see a 59 percent chance of an increase to 2.25 percent or higher by the end of the year, based on futures prices."

To contact the reporter on this story: Scott Lanman in Washington at slanman@bloomberg.net

"Last Updated: July 15, 2008 11:12 EDT"





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"Romania's Stock Index Tumbles Most in Four Months, Led by Banks "

By Pawel Kozlowski and Irina Savu

"July 15 (Bloomberg) -- Romania's BET Index fell the most in almost four months, led by bank shares on concern rising energy prices may boost inflation."

"The BET Index declined 337.77, or 5.6 percent, to 5,674.34 in Bucharest, posting the biggest drop among 88 benchmark indexes tracked by Bloomberg, and retreating to the lowest since September 2005."

"``Rising oil prices, the peaking euro,'' as well as selloffs on global stock exchanges were main reasons behind today's drop on the Romanian bourse, Mihai Piscan, a trader at EFG Eurobank Securities in Bucharest, said by phone."

"Oil climbed above $146 a barrel today, approaching a record, as the dollar fell to a new low against the euro, boosting the appeal of crude as a currency hedge. Romania's inflation rate rose to 8.6 percent in June, equaling a two-year high."

"BRD-Groupe Societe Generale, controlled by France's Societe Generale SA, slid 3.7 percent to 18 lei, a five-month low. Banca Transilvania SA, Romania's second-biggest publicly traded bank, slumped 8.1 percent to 0.306 lei, the lowest level since December 2005."

"Bank shares plunged across Europe today, with a measure for the industry in the Dow Jones Stoxx 600 Index losing as much as 5.8 percent, as concern deepened credit-market losses will widen."

"Transelectrica SA, Romania's state-run power-transmission grid operator, lost 6.1 percent to 20.1 lei. Impact SA, the country's only publicly traded homebuilder, slumped 13 percent to 0.2 lei, posting the biggest one-day drop in almost five years."

To contact the reporter on this story: Pawel Kozlowski in Warsaw pkozlowski@bloomberg.net; Irina Savu in Bucharest isavu@bloomberg.net.

"Last Updated: July 15, 2008 10:00 EDT"





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Market Data
"Colombia Peso Falls, Bonds Plunge Amid Increased Credit Concern "

By Andrea Jaramillo and Drew Benson

July 15 (Bloomberg) -- Colombia's peso dropped and the government's local-currency denominated bonds plunged to their lowest since they were issued in 2005 as Fannie Mae and Freddie Mac fell on speculation Treasury's plan to support the biggest U.S. mortgage finance companies will sacrifice shareholders.

The peso declined as much as 1.7 percent on increasing concern credit-market losses will hurt growth in the world's largest economy. U.S. Treasury Secretary Henry Paulson on July 13 asked Congress for authority to buy unlimited stakes and to lend to the two companies.

"``There's a lot of noise and nervousness out there and that's hurting local assets,'' said Camilo Perez, head analyst at Banco de Bogota SA, the nation's second-biggest bank."

"Colombia's peso fell 0.7 percent to 1,771.5 per dollar at 9:59 a.m. in New York, from 1,759.25 yesterday, according to the Colombian foreign-exchange electronic transactions system, known as SET-FX."

"The yield on Colombia's benchmark 11 percent bonds due July 2020 rose 8 basis points, or 0.08 percentage point, to 13.03 percent, according to Colombia's stock exchange. The bonds' price dropped 0.429 centavo to 87.975 centavos per peso. The price earlier touched a record low of 87.766."

To contact the reporters on this story: Andrea Jaramillo in Bogota at ajaramillo1@bloomberg.net; Drew Benson in Buenos Aires at Abenson9@bloomberg.net

"Last Updated: July 15, 2008 10:06 EDT"





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Market Data
"BOJ Cuts Growth Forecast, Keeps Interest Rate at 0.5% (Update3) "

By Mayumi Otsuma

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"July 15 (Bloomberg) -- The Bank of Japan cut its economic growth forecast, raised its inflation estimate and kept the benchmark interest rate at 0.5 percent, saying higher commodity prices are hurting the expansion."

"The world's second-largest economy will grow 1.2 percent in the year ending March 31, slower than the 1.5 percent forecast on April 30, the central bank said in a statement in Tokyo. Consumer prices excluding fresh food will climb 1.8 percent, more than the 1.1 percent projected three months ago, it said."

"Growth is ``slowing further'' because higher energy and raw-materials costs are discouraging businesses and consumers from spending, the bank said. ``Downside risks to the economy demand attention,'' it said, indicating the bank has no plans to resume a policy of gradually raising interest rates anytime soon."

"``They're more concerned about the downside risks to growth,'' said Masaaki Kanno, chief economist at JPMorgan Chase & Co. in Tokyo, who used to work at the bank. ``Unless wage rates pick up, the bank isn't so concerned about inflation.''"

"In April, the central bank shelved a policy calling for higher borrowing costs. The benchmark rate, doubled in February 2007, is the lowest among major economies."

The yen traded at 105.19 per dollar at 10:10 a.m. in London compared with 105.80 before the announcement. The yield on Japan's 10-year bond fell 3.5 basis points to 1.545 percent.

Weaker Spending

"``Economic growth is slowing further, reflecting weaker growth in business fixed investment and private consumption against the backdrop of high energy and materials prices,'' the central bank said. Still, Governor Masaaki Shirakawa said the economy ``is not facing stagflation'' because growth will pick up and inflation will moderate."

"Gross domestic product will expand 1.5 percent in the year starting April 1 and core consumer prices will rise 1.1 percent, the policy board forecast."

"The biggest reason for Japan's economic slowdown is the worsening terms of trade spurred by higher import prices, the governor said. Commodities costs drained 1 percent from national income between 2000 and 2007, the Cabinet Office said last month. Japan imports almost all of its oil and 60 percent of its food."

"``Corporate profits are being squeezed and that's affecting capital investment,'' Shirakawa said at a news conference in Tokyo. ``Consumer spending is slowing for two reasons: Household incomes are stagnating while the worsening terms of trade are eroding their purchasing power.''"

On Hold This Year

All 39 economists surveyed by Bloomberg News expected today's rate decision. Only two of 33 analysts who gave predictions through December expect a rate increase this year. The remaining 31 forecast no change.

"Shirakawa said the central bank hasn't seen any signs of ``second-round effects of inflation,'' in which surging oil and commodity prices spread to other goods and services. The bank needs to watch whether secondary inflation will arise, he added."

The bank said it's ``necessary to be mindful of upside risks due to changes in the inflation expectations of households and the price-setting behavior of firms.''

"Consumer prices excluding fresh fish, fruit and vegetables rose 1.5 percent in May from a year earlier, the fastest pace in a decade, and economists say the inflation measure will soon surpass 2 percent. The Bank of Japan regards core prices as stable when they are between zero and 2 percent."

"Gains in core prices will ``gradually moderate'' after they become ``somewhat elevated in coming months'' because of oil and food, the central bank said. Should economic risks subside, Japan's expansion may become vulnerable to the side effects of keeping rates too low, it said."

Still an Option

"``They haven't dropped the option of raising rates,'' said Hiromichi Shirakawa, chief economist at Credit Suisse Group in Tokyo and a former Bank of Japan official who isn't related to the governor. ``The numbers suggest they're less comfortable with the risk of inflation than slowing growth.''"

"There's a 14 percent chance Shirakawa and his colleagues will raise the key rate by December, according to JPMorgan Chase & Co. calculations using overnight interest-rate swaps."

"Large companies expect profits to fall this year for the first time since the 2001 recession, the bank's Tankan survey showed July 1. That will make it harder for businesses to raise wages, which grew at the slowest pace this year in May. Consumer sentiment slumped to the lowest in at least 26 years in June."

"The central bank wasn't expected to release numerical forecasts for growth and prices today. Previously it only did so in April and October and gave a narrative review of the projections three months later. Now estimates will be published every quarter, a move that economists welcomed."

"``Today's decision indeed contributes to the enhanced transparency of the BOJ's policy and better communication with market participants,'' said Kanno at JPMorgan."

"From October, the bank will also extend its forecasts to cover three years. Until now it only gave projections for the current and next fiscal year."

To contact the reporter on this story: Mayumi Otsuma in Tokyo at motsuma@bloomberg.net

"Last Updated: July 15, 2008 05:11 EDT"





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Market Data
Eastern European Currencies: Romanian Leu Declines Against Euro

By Yon Pulkrabek

"July 15 (Bloomberg) -- The Romanian leu declined against the euro as concern credit-market losses will deepen prompted investors to dump riskier assets. Hungary's forint fell, while the Polish zloty rose for a ninth day, paring earlier losses."

The leu slid as the BET Index of stocks in Bucharest sank the most in 3 1/2 months and the Dow Jones Stoxx 600 Index retreated 3 percent. Equity markets declined as investors lost confidence in a U.S. government attempt to rescue Fannie Mae and Freddie Mac and after Japan's top three banks said they held $44 billion of debt issued by U.S. mortgage lenders.

"``We're seeing that markets are becoming more nervous,'' said Lars Rasmussen, an analyst in Copenhagen at Danske Bank A/S, Denmark's biggest lender. ``Fundamentally, Romania looks a lot weaker,'' than other regional currencies, which it why it's pacing today's drop, he said."

"The leu fell as much as 1 percent to 3.6107 against the euro and traded at 3.6041 as of 5:43 p.m. in Bucharest, from 3.5738 yesterday. The leu gained 1.8 percent versus the European common currency in the past month. Rasmussen sees the currency slipping to 3.85 per euro over the next three months."

"The BET Index fell 5.6 percent, the steepest decline since March 20. The Stoxx 600 slid the most in four months."

"East European currencies led gains during the past two months as rising interest rates and economic growth stoked demand for higher-yielding assets. The Czech koruna was the world's top- performing currency against the euro in the period, gaining 7.3 percent. It was followed by the Hungarian forint, Serbian dinar Slovakia's koruna and the zloty."

Currencies to Weaken

"``In the second half of the year, we'll see some of these currencies weaken,'' Rasmussen said."

"The Polish zloty rose 0.1 percent to 3.2500 per euro, paring a decline, after central bank policy officials Dariusz Filar and Marian Noga signaled the bank may need to raise interest rates in the coming months to deal with inflation."

"The central bank must be ``vigilant'' and ready to change borrowing costs if inflation doesn't slow in September, Noga said in a phone interview. Filar said in an interview on television station TVN CNBC Biznes that one 25 basis-point increase may not be enough and that the rate, currently at 6 percent, should be boosted in July."

"``We've seen a scaling back of interest-rate expectations and we may have to re-assess that,'' said Jon Harrison, an emerging- market currency strategist in London at Dresdner Kleinwort."

"Consumer prices grew 4.6 percent in June, faster than the 4.4 percent the month before and exceeding economists' forecasts."

"The currency's 16 percent surge in the past year is raising concern it will make exports too expensive, ballooning the trade deficit, central bank Governor Slawomir Skrzypek said."

"The Hungarian forint, which has gained 7.4 percent in the past two months, slid 0.9 percent to 232.46, its largest drop in more than two weeks."

"The Czech koruna slipped 0.1 percent against the euro to 23.347, while the Slovak koruna was little changed at 30.306."

"The Turkish lira fell 0.2 percent against the dollar to 1.2199, from 1.2175 yesterday."

To contact the reporter on this story: Yon Pulkrabek in Bratislava at ypulkrabek@bloomberg.net

"Last Updated: July 15, 2008 11:26 EDT"





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Market Data
"European Oil-Refining Margins Fall on Slower Demand, OPEC Says "

By Nidaa Bakhsh

"July 15 (Bloomberg) -- European oil refiners potentially lost money in June as weaker U.S. summer gasoline demand discouraged exports and European refineries increased output after scheduled maintenance, OPEC said."

"Refining margins for processing North Sea benchmark Brent crude oil in Rotterdam fell to minus 44 cents a barrel in June, from a gain of $4.07 in May, the Organization of Petroleum Exporting Countries said in a monthly oil market report today."

"``Following the completion of refinery maintenance, higher regional production and fewer export opportunities for gasoline and fuel oil, European refining economics lost ground significantly,'' the report from OPEC's Vienna-based secretariat said."

"Refining margins in Asia and the U.S. also fell last month, OPEC said. ``Slowing demand for gasoline particularly in the U.S., combined with an easing in the distillate markets and costly crude have exerted pressure on refining economics across the world,'' the report said."

"Refiners along the U.S. Gulf Coast using West Texas Intermediate crude had margins of $4.98 a barrel in June, compared with $6.85 the month before, OPEC said. Those margins were almost four times bigger at the same time last year."

"Asian refiners using Dubai crude oil had margins of $4.48 a barrel last month, versus $6.19 in May."

"``The only major wild card for the product markets in the near future would be possible refinery outages due to potentially active hurricanes in the U.S. Gulf Coast,'' the report said."

To contact the reporter on this story: Nidaa Bakhsh in London at nbakhsh@bloomberg.net

"Last Updated: July 15, 2008 08:08 EDT"





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Market Data
Autogrill Falls to a Six-Year Low After Brokers Cut Estimates

By Francesca Cinelli

"July 15 (Bloomberg) -- Autogrill SpA, the world's biggest manager of airport restaurants, fell to the lowest in almost six years in Milan trading after Euromobiliare Sim SpA and Gruppo Banca Leonardo SpA cut their price estimates on the stock."

"Autogrill dropped as much as 17.9 cents, or 2.5 percent, to 6.96 euros, its lowest since Oct. 9, 2002, and traded at 7.01 euros as of 10:49 a.m."

Euromobiliare cut its price projection on the stock to 13.4 euros from 16 euros and Banca Leonardo lowered its price target to 11.1 euros from 12 euros. Both brokerages kept their ``buy'' recommendations.

"Autogrill is scheduled to make a strategy presentation to investors tomorrow in London. That will be ``an occasion to understand how resilient the business is in a weak environment,'' Euromobiliare analysts wrote in a note today."

"``We expect more light to be shed on the new global food and beverage, retail and duty free strategy,'' Banca Leonardo analyst Filippo Faccenda wrote in a research report."

To contact the reporter on this story: Francesca Cinelli in Milan at fcinelli@bloomberg.net

"Last Updated: July 15, 2008 05:19 EDT"





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Market Data
Spanish Home Prices Post First Decline in a Decade (Update1)

By Sharon Smyth and Ben Sills

July 15 (Bloomberg) -- Home prices in Spain fell for the first time in almost 10 years in the second quarter after higher borrowing costs and restrictions on mortgage lending eased demand.

"The average price of new and used houses and apartments declined 0.1 percent from the previous quarter, the Housing Ministry said today on its Web site. Prices rose 2.4 percent from a year earlier."

"Rising interest rates and a global credit shortage are choking housing demand in Spain as central banks wrestle with a surge in inflation and the fallout from the U.S. subprime mortgage crisis. The cost of property in Spain has surged 130 percent in the past decade in Europe's biggest home-building boom, according to Sociedad de Tasacion, a property valuation company in Madrid."

"``This is happening much faster than expected and much faster than is desirable,'' said Jose Carlos Diez, chief economist at Intermoney SA. ``The U.S. is a good example for Spain; they are two years into the adjustment and they still haven't reached the bottom.''"

"Martinsa-Fadesa SA, a property developer with 5.2 billion euros ($8.3 billion) of debts, sought protection from creditors yesterday after it failed to secure a 150 million-euro refinancing loan. Its market value was 680 million euros when it was suspended from trading yesterday."

Recession

"The collapse of the home-building industry is dragging the Spanish economy toward a recession. The manufacturing and service industries both contracted for a third month in June, a survey of purchasing managers showed."

"Banco Popular Espanol SA, Spain's third-biggest bank, fell 32 cents, or 4.5 percent, to 6.78 euros at 11:27 a.m. in Madrid today. Expansion newspaper yesterday reported Popular had 400 million euros in loans to Martinsa-Fadesa, while La Caixa and Caja Madrid, Spain's two largest savings banks, each have 1 billion euros."

"The chances of a recession in Spain increased to 45 percent last month from 30 percent in May, according to the median response from 18 economists surveyed by Bloomberg News."

"Home-building permits in Spain, which exceeded Germany and the U.K. combined when the boom peaked in 2006, slumped 70 percent in the year to March as higher borrowing costs and a global credit shortage left homebuyers unable to finance deals. Spanish banks reported a ``generalized toughening'' of lending conditions in the first quarter, according to the Bank of Spain's lending survey published last month."

To contact the reporter on this story: Sharon Smyth in Madrid at ssmyth2@bloomberg.net; Ben Sills in Madrid at bsills@bloomberg.net

"Last Updated: July 15, 2008 05:49 EDT"





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Market Data
"China Life, Ping An Insurance Don't Hold Fannie, Freddie Debt "

By Bei Hu

"July 15 (Bloomberg) -- China Life Insurance Co. and Ping An Insurance (Group) Co. said they hold no debt issued by Fannie Mae and Freddie Mac, the two agencies that own or guarantee nearly half of the $12 trillion of U.S. mortgages."

"``We've reconfirmed this with our investment management department,'' said Li Yinghui, assistant secretary-general of the board secretariat at China Life, the nation's largest insurer. ``We hold almost no debt issued by foreign institutions or governments.''"

"Ping An, the second-largest Chinese insurer, has also verified it owns no Fannie Mae or Freddie Mac debt, said Shenzhen-based spokesman Sheng Ruisheng."

"Hong Kong's Hang Seng Index today dropped 3.8 percent, the worst decline since June 10, led by financial stocks, on heightened concern that credit-market losses will widen and hurt earnings at financial companies."

"Ping An's Hong Kong shares fell 7.1 percent, the second- worst performer among the 43 members of the index. Beijing-based China Life dropped 5.3 percent in Hong Kong trading today."

Ping An and China Life both fell 6 percent in Shanghai trading today.

To contact the reporter on this story: Bei Hu in Hong Kong at bhu5@bloomberg.net

"Last Updated: July 15, 2008 06:06 EDT"





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Market Data
Software AG Drops to 32-Month Low After Citigroup Cuts Target

By Bernd Bergmann

"July 15 (Bloomberg) -- Software AG, Germany's second-largest software maker, fell to the lowest in 32 months in Frankfurt trading after Citigroup Inc. cut its share-price estimate by 14 percent."

"Software shares declined as much as 2.17 euros, or 5.5 percent, to 37.30 euros, the lowest since October 2005."

"Citigroup are ``revising estimates and lowering target price to reflect concerns related to'' the growth of Software's WebMethods division ``and changes to foreign exchange rate assumptions,'' the brokerage said in a note to clients today. The share price target was cut to 43 euros."

"Software AG agreed last year to buy WebMethods Inc. in the U.S. for $560 million to expand in North American and add networking software to products it sells to banks and government institutions. A euro was worth about $1.34 when the acquisition was announced in April 2007 and now stands at about $1.59, reducing the value of dollar-denominated revenue."

To contact the reporter on this story: Bernd Bergmann in Frankfurt at bbergmann1@bloomberg.net

"Last Updated: July 15, 2008 04:35 EDT"





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Market Data
"Bank of Italy Halves Growth Forecasts on Euro, Inflation "

By Flavia Krause-Jackson and Giovanni Salzano

"July 15 (Bloomberg) -- The Bank of Italy cut its growth forecast for this year and the next by more than half, saying higher food and energy prices will hurt household spending and a strong euro crimp exports."

"Europe's fourth-biggest economy will expand 0.4 percent in 2008 and 2009, the central bank said in its quarterly bulletin. That compares with a Jan. 15 forecast of 1 percent growth this year and 1.1 percent in 2009. In 2007, the economy expanded 1.5 percent, according to the Italian statistics office."

"Growth is fading across Europe as manufacturers feel the pinch of a doubling in oil prices over the past year, a stronger euro and a slowing global economy. Oil prices reached a record $147.27 a barrel on July 11. On July 3, the European Central Bank raised its benchmark rate by a quarter-point to 4.25 percent to fight the fastest inflation in 16 years."

"Italian inflation will average 3.8 percent this year, and slow to 2.8 percent in 2009, the central bank said. Consumer prices calculated by European Union standards rose 4 percent in June from a year earlier, the most since the index was created in January 1997. The ECB's inflation threshold is 2 percent."

To contact the reporter on this story: Flavia Krause-Jackson in Rome at fjackson@bloomberg.net; Giovanni Salzano in Rome at gsalzano1@bloomberg.net

"Last Updated: July 15, 2008 09:30 EDT"





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Market Data
Natixis Falls as Citigroup Cuts Target on Writedown Outlook

By Fabio Benedetti-Valentini

"July 15 (Bloomberg) -- Natixis SA, France's fourth-biggest bank, dropped the most among European banks in Paris trading after Citigroup Inc. cut its price estimate, saying the company may need to raise capital because of subprime-related writedowns."

"Natixis fell as much as 49 cents, or 8.8 percent, to 5.10 euros, and was trading at 5.20 euros at 11:05 a.m., the biggest decliner in the 71-member Bloomberg Europe Banks and Financial Services Index. The bank has dropped six straight days and is heading toward its lowest since the company was created in 2006."

"``We believe Natixis may consider a rights issue going forward,'' Kimon Kalamboussis, a London-based analyst with Citigroup, wrote in a note to investors today. The bank may report second-quarter subprime-related writedowns of 1.8 billion euros ($2.9 billion), Kalamboussis said. ``If taken straight to equity, writedowns would impact equity Tier 1 ratio by more than one percentage point,'' he said."

A spokeswoman for Paris-based Natixis declined to comment.

"Kalamboussis, who recommends selling Natixis shares, reduced his price estimate on the stock by 17 percent to 5 euros."

"French mutual banks Groupe Banque Populaire and Groupe Caisse d'Epargne, which control about 69 percent of Natixis, said last month they will provide 500 million euros each in funds as an ``advance'' to enable Natixis to keep a Tier 1 ratio, a key indicator of financial strength, of ``at least'' 8.5 percent."

Natixis said on May 15 first-quarter profit dropped 88 percent as its unprofitable corporate- and investment-banking arm had 431 million euros of asset writedowns linked to the collapse of the subprime-mortgage market in the period.

To contact the reporter on this story: Fabio Benedetti-Valentini in Paris at fbenedettiva@bloomberg.net.

"Last Updated: July 15, 2008 05:55 EDT"





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Market Data
China Aluminum Exports Jump to the Highest Since 2004 (Update1)

By Li Xiaowei

"July 15 (Bloomberg) -- Aluminum exports from China, the world's largest producer of the metal, jumped to the highest in more than three years as smelters took advantage of rising global prices."

"Sales of the metal and its products rose by 11 percent to 300,000 metric tons in June from a month earlier, customs data showed today. That's the highest since December 2004 and the fourth monthly advance, according to Bloomberg data."

"``The amount looks big and the growth is led by aluminum alloys which don't incur export taxes,'' Wen Xianjun, director at the aluminum department of China Nonferrous Metals Industry Association, said today by phone from Beijing. Wen said he wasn't aware if the government was planning to change the tax rules, which applies to just primary aluminum, soon."

"Aluminum, used in buildings and cars, has rallied 36 percent this year after power shortages in China and South Africa curbed output. The metal reached a record of $3,380.15 a ton last week after China's producers pledged to cut output to help ease a nationwide power shortage."

"``More exports are good for the domestic market and could be bearish for London prices,'' Li Jingyuan, an analyst at Haitong Futures Co., said in Shanghai. ``Yet we believe rising production costs due to a power shortage is what investors are more concerned with than supply-side news.''"

The lightweight metal has declined 3 percent from its record as inventories are near a four-year high. Some analysts said Chinese producers may hold back from the cuts because of high aluminum prices.

"Exports of tin and alloys from China, the world's largest producer and consumer, fell to a record low of 1 ton in June, according to customs data."

"A 10 percent duty on tin exports ``has worked well so far'' in curbing the metal's overseas sales, Liu Minda, an analyst at Huatai Securities, said today by phone from Nanjing. Still, like aluminum, some tin may have been exported under product category to avoid the tax, he added."

To contact the reporter on this story: Li Xiaowei in Shanghai at Xli12@bloomberg.net

"Last Updated: July 15, 2008 04:47 EDT"





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Market Data
France's Lagarde Says Exporters `Clearly Suffering' From Euro

By Meera Louis

"July 15 (Bloomberg) -- French Finance Minister Christine Lagarde said European exporters are ``clearly suffering'' because of the advance of the euro, which reached a record against the U.S. dollar today."

"The euro was trading at $1.5952 at 5:15 p.m. in Brussels, up 0.3 percent, after earlier touching $1.6038, the highest against the dollar since the 15-nation currency's debut in 1999. The dollar weakened after Federal Reserve Chairman Ben S. Bernanke said risks to both U.S. economic growth and inflation have increased."

"``Every coin has two sides,'' Lagarde told reporters in Brussels today. ``The higher the euro, the better our oil bill will be'' since crude oil is denominated in dollars."

"``The other side of the coin is, of course, our exporters,'' she said. ``Those who have based their costs in the euro zone are clearly suffering.''"

"Lagarde, whose government holds the rotating European Union presidency for the rest of this year, said she is ``always worried'' about the euro, which she described as ``very high.'' The European currency has gained almost 16 percent against the dollar in the past 12 months, making the region's exports less competitive."

To contact the reporter on this story: Meera Louis in Brussels at mlouis1@bloomberg.net.

"Last Updated: July 15, 2008 11:15 EDT"





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Market Data
Polish June Inflation Rate Rises to Four-Year High on Fuels

By Monika Rozlal and Nathaniel Espino

"July 15 (Bloomberg) -- Poland's inflation rate accelerated in June to a four-year high on fuel, alcohol and tobacco prices, raising chances the central bank will lift interest rates earlier than the release of its inflation outlook in October."

"The rate rose to 4.6 percent from 4.4 percent in May, the Warsaw-based statistics office said in a statement today. The result was above the median forecast of 4.5 percent by 14 economists surveyed by Bloomberg. Consumer prices rose a monthly 0.2 percent."

The Monetary Policy Council raised borrowing costs eight times in the past 14 months as accelerating wages and employment sparked consumption and kept inflation above its 2.5-percent target since October.

"Rate setters are concerned that growing consumer prices will strengthen wage demands. They may decide to tighten policy before seeing the next inflation projection from the Narodowy Bank Polski, which is scheduled to be released in October."

To contact the reporter on this story: Monika Rozlal in Warsaw at mrozlal@bloomberg.net.

"Last Updated: July 15, 2008 08:04 EDT"





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Market Data
Hochtief Falls to 18-Month Low on Concern Over U.S. Markets

By Stefanie Haxel

"July 15 (Bloomberg) -- Hochtief AG, Germany's biggest construction company, fell to the lowest in almost 18 months in Frankfurt trading amid investor concern that falling U.S. markets may curb profits."

"Hochtief lost as much as 5 euros, or 8.6 percent, to 53.32 euros, the lowest since January 2007. The stock traded at 4.89 euros as of 10:35 a.m. local time, cutting the market value to 3.74 billion euros ($5.98 billion)."

"``In the current market environment, every company doing business in the U.S. is being punished, whether that reaction is justified or not,'' said Karin Brinkmann, a Munich-based equity analyst at UniCredit Markets & Investment Banking with a ``buy'' rating on the stock."

Hochtief generated 39 percent of its output and 42 percent of its annual sales in the Americas in 2007. The builder said today it won three contracts worth 391 million euros in the U.S.

To contact the reporter on this story: Stefanie Haxel in Frankfurt at shaxel@bloomberg.net.

"Last Updated: July 15, 2008 05:43 EDT"





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Market Data
"India's Sugar Output May Decline 25%, Boosting Prices (Update3) "

By Thomas Kutty Abraham

Enlarge Image/Details

"July 15 (Bloomberg) -- India's sugar output, the second- biggest in the world, may fall as much as 25 percent next year, sparking the steepest jump in prices since March."

"Production may decline to 20 million metric tons in the year ending September, 2009, Vinay Kumar, managing director of the National Federation of Cooperative Sugar Factories Ltd., said in New Delhi. That's less than the 22 million tons forecast by the London-based International Sugar Organization this month."

"Lower output may support raw sugar prices that have risen 26 percent this year as record oil costs boost demand for biofuels including ethanol made from cane. Farmers in India are growing corn, rice and soybeans instead of sugar after the commodities jumped to their highest this year, Kumar said."

"``Sugar prices will rise further as India's production falls and demand rises during the festival season'' starting in September, said Amol Tilak, an analyst at Kotak Commodity Services Ltd. in Mumbai. ``If oil reaches $150 a barrel, prices will rise faster.''"

"A smaller crop may halve India's exports to 2 million tons, Kumar said. The National Federation of sugar mills produces almost half of India's output of the sweetener."

"Sugar for August delivery on India's National Commodity & Derivatives Exchange rose 4 percent to 1,626 rupees per 100 kilograms, the most since March 4."

"Raw sugar futures traded on ICE Futures U.S., the former New York Board of Trade, gained as much as 2.8 percent to 13.97 cents a pound. The most-active contract closed at a 25-year high of 19.3 cents a pound on Feb. 3, 2006."

Exceeding Demand

"Global refined sugar production will probably exceed demand by 2 million tons in the 12 months through March, according to Lausanne, Switzerland-based researcher Kingsman SA estimates."

"Indian cane growers planted the crop across 4.31 million hectares (10.7 million acres) by July 11, 19 percent less than a year earlier, the farm ministry said last week. In comparison, area under rice expanded 6 percent to 9.23 million hectares and soybeans were planted in 23 percent more area from a year ago."

"Corn climbed to a record $7.9925 a bushel on June 27 while soybeans reached $16.3675, their highest ever, on July 3 after the U.S. farmers planted less area to the crop. Crude oil almost doubled in the past year to $147.27 a barrel on July 11."

"Refined sugar output in the eight months ended June was 25.8 million tons, down from 27.8 million tons a year earlier, the federation's Kumar said. Harvests in the western state of Maharashtra were delayed because of rain, and mills in northern Uttar Pradesh refused to process the crop because of a price dispute with the state government, he said."

Discourage Exports

"``We will continue to export sugar next year though the quantity will not be the same,'' Kumar said. ``Removal of export incentives and better domestic prices may discourage exports.''"

"India's government will end a freight subsidy of as much as 1,450 rupees ($34) a ton on Sept. 30, reducing exporters' ability to compete with Brazilian and Thai suppliers."

"The South Asian nation may have a stockpile of 12 million tons in the new crop year beginning Oct. 1 and local demand may total 22 million tons, Kumar said."

To contact the reporter on this story: Thomas Kutty Abraham in Mumbai at tabraham4@bloomberg.net.

"Last Updated: July 15, 2008 08:18 EDT"





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Market Data
Insurer Writedowns Linked to Subprime Reach $77 Billion: Table

By Erik Holm

July 15 (Bloomberg) -- The following table shows $77.6 billion of assets marked down by some of the largest insurers since the beginning of 2007 as values fell in U.S. mortgage and credit markets.

"Figures from the U.S. and Bermuda-based insurers may include realized and unrealized losses compiled from regulatory filings, earnings statements, company presentations, public statements and interviews; some companies may have taken additional writedowns. The data reflect some credit losses or writedowns of assets that weren't classified as subprime, and some companies say they expect securities to recover in value."


Ticker Company* Impairment Main Source(s) 12-month^
(billions) of Loss stock loss
=======================================================================
"AIG [bn:WBTKR=AIG:US] American International [] $39.6 [bn:URL=http://media.corporateir.net/media_files/irol/76/76115/ConferenceCallCreditPresentation_05_09_08.pdf] CDS [], RMBS, CDO 68%"
"ABK [bn:WBTKR=ABK:US] Ambac Financial [] 8.85 CDS, MBS 98%"
"MBI [bn:WBTKR=MBI:US] MBIA Inc. [] 7.10 CDS, CDO 93%"
ALL [bn:WBTKR=ALL:US] Allstate Corp. [] 2.88 ABS 29%
PRU [bn:WBTKR=PRU:US] Prudential Financial Inc. [] 2.75 ABS 41%
"XL [bn:WBTKR=XL:US] XL Capital Ltd. [] 2.71 SCA, MBS, ABS 81%"
"MET [bn:WBTKR=MET:US] MetLife Inc. [] 2.54 ABS, CMBS 23%"
"HIG [bn:WBTKR=HIG:US] Hartford Financial [] 2.43 ABS, [bn:URL=http://files.shareholder.com/downloads/HIG/295807446x0x191751/fd9085f0-0cea-4c7a-bbfe-8b8cb36b82ab/1Q08 Slides FINAL.pdf] CMBS [] 42%"
"RDN [bn:WBTKR=RDN:US] Radian Group Inc. [] 1.86 CDS, C-Bass 98%"
SKRRF [bn:WBTKR=SCT:US] Scottish Re Group Ltd. []1.72** RMBS 98%
PFG [bn:WBTKR=PFG:US] Principal Financial [] 1.39 CMBS 41%
CNA [bn:WBTKR=CNA:US] CNA Financial Corp. [] 1.32 ABS 52%
PMI [bn:WBTKR=PMI:US] PMI Group Inc. [] 0.93 FGIC 97%
MTG [bn:WBTKR=MTG:US] MGIC Investment Corp. [] 0.52 C-Bass 93%
"ACE [bn:WBTKR=ACE:US] Ace Ltd. []0.45 AGO, MBS 20%"
"LNC [bn:WBTKR=LNC:US] Lincoln National Corp. [] 0.41 CMO, CMBS 38%"
RNR [bn:WBTKR=RNR:US] RenaissanceRe Holdings Ltd. [] 0.17 ChannelRe 26%

=======================================================================
Company Total $77.6


* Some names have been shortened for space.
^ Through yesterday.
**Includes company's estimate for first quarter.

Key:
ABS: Asset-backed securities.
CDS: Credit-default swaps.
CDO: Collateralized debt obligation.
CMBS: Commercial mortgage-backed securities.
CMO: Collateralized mortgage obligation.
MBS: Mortgage-backed securities
RMBS: Residential mortgage-backed securities.
AGO: Assured Guaranty Ltd.
C-Bass: Credit-Based Asset Servicing and Securitization LLC.
SCA: Security Capital Assurance Ltd.


To contact the reporter on this story: Erik Holm in New York at eholm2@bloomberg.net.

"Last Updated: July 15, 2008 07:28 EDT"





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Market Data
Procter & Gamble Reaffirms Fourth-Quarter Forecast (Update1)

By Carol Wolf

"July 15 (Bloomberg) -- Procter & Gamble Co., the world's largest consumer-products company, reaffirmed its fourth-quarter earnings forecast as it increased prices to counter rising costs."

"Sales at the maker of Pampers diapers, Charmin toilet paper and Puffs tissues climbed 8 percent to 10 percent in the three months through June, the Cincinnati-based company said today in a statement. Profit was 76 cents to 78 cents a share, P&G said. Analysts surveyed by Bloomberg projected 78 cents."

"P&G reiterated its projection after Kimberly-Clark Corp., which sells Huggies diapers, Scott toilet paper and Kleenex tissues, predicted lower full-year earnings than an earlier projection because it underestimated the cost of raw materials such as oil, natural gas and pulp. P&G will increase prices in the U.S. by as much as 16 percent to counter its higher expenses."

"P&G fell 12 cents to $63.81 at 10:47 a.m. in New York Stock Exchange composite trading. Before today, the shares dropped 13 percent this year. Kimberly-Clark lost $2.94, or 5 percent, to $55.86, the biggest decline since October 2004. The stock retreated 15 percent this year before today."

To contact the reporter on this story: Carol Wolf in Cleveland at cwolf@bloomberg.net

"Last Updated: July 15, 2008 10:50 EDT"





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