March 11, 2010

(BN) Top Stories: Stocks

Top Stories: Stocks
2010-03-11 08:36:47.153 GMT

     March 11 (Bloomberg) -- The following are the day's top stories on stocks:

European Stocks, U.S. Index Futures Drop; BHP Billiton, Lagardere Slide
     European stocks declined from a seven-week high, led by  basic-resource producers as growing Chinese inflation increased  speculation the government will pare back stimulus measures.
U.S. futures fell and Asian shares rose. BHP Billiton Ltd., the  world's largest mining company, dropped 1.3 percent in London  as China's inflation reached a 16- month high. Lagardere SCA  slumped the most in 10 months after France's biggest publisher  reported earnings that missed analysts' estimates. The Stoxx  Europe 600 Index slipped 0.2 percent to 257.77 at 8:27 a.m. in  London. The gauge has soared 8.6 percent since Feb. 5 on  speculation the European Union will support Greece if needed as  it struggles to reduce the region's biggest budget deficit.
Mohamed A. El-Erian, whose company runs the world's biggest  mutual fund, said deteriorating public finances may affect the  global economy more than is currently realized. ``The  importance of the shock to public finances in advanced  economies is not yet sufficiently appreciated and understood,''
El-Erian, co-chief investment officer at Pacific Investment  Management Co., wrote in an article on the Financial Times Web  site. The potential damage from increased government borrowings  is ``at present being viewed primarily -- and excessively --  through the narrow prism of Greece.''

Asian Stocks Rise on Outlook for Japanese Economy; BHP Billiton Declines
     Asian stocks rose, sending the MSCI Asia Pacific Index  toward a seven-week high, as speculation Japan's economy is  recovering outweighed concern China will pare back measures  that spurred growth. Mizuho Financial Group Inc., Japan's  third-largest bank by market value, and Aeon Co., the country's  No. 1 supermarket operator, climbed more than 1 percent in  Tokyo after the Nikkei newspaper said the government will boost  its economic outlook. BHP Billiton Ltd., the world's biggest  mining company, lost 0.5 percent in Sydney, and Jiangxi Copper  Co. dropped 1.1 percent after China said inflation in February  reached a 16-month high. ``The economy is undoubtedly in the  midst of mild recovery'' in Japan, said Mitsushige Akino, who  oversees the equivalent of $450 million at Tokyo-based  Ichiyoshi Investment Management Co. The MSCI Asia Pacific Index  rose 0.3 percent to 122.94 as of 5:05 p.m. in Tokyo, with five  stocks advancing for every four that dropped. The index, on  course for its highest closing level since Jan. 21, fell after  China reported its inflation figures, and then rebounded.

China Stock-Futures Market to Dwarf Cash Trade, History Says: Chart of Day
     South Korea and Taiwan's sevenfold increases in  stock-futures trading after they were introduced show the  potential for China's market, expected to begin trading next  month, according to China International Capital Corp. The CHART  OF THE DAY shows that within a decade, stock- index trading  volumes for South Korea's Kospi 200 index had grown to 757  percent more than that of the cash market by November 2009. The  Taiwan Stock Exchange's futures trade was seven times larger  than that of the cash market by the end of last year, data  compiled by CICC show. ``The potential for Chinese stocks is  substantial,'' Hao Hong, a Beijing-based equity strategist for  CICC, said in a report. ``Judging from the international  experiences in Taiwan and Korea, the futures markets may grow  several times over the physical market.'' The first stock-index  contracts, based on China's CSI 300 Index, may begin trading in  mid or late April, Shang Fulin, chairman of the China  Securities Regulatory Commission, said this month. The  regulator said index traders will have to keep at least 500,000  yuan ($73,239) in their brokerage accounts.

Peru Left Behind as Latin America Stocks Rise to Records: Chart of the Day
     Peru will be the only stock market in Latin America that  fails to rise to a record this year because it has the closest  relationship to metals prices that remain below all-time highs,  according to Banco BTG Pactual SA. The CHART OF THE DAY shows  the correlation between the Lima General Index and the  Bloomberg Base Metals 3-Month Price Commodity Index climbed to
0.83 yesterday, based on percentage changes in the past 30  days. That's the second-most ever and the strongest  relationship between commodities and stocks in the region, data  compiled by Bloomberg show. A reading of 1 means two assets  move in tandem, while zero means no relationship. Peru is the  world's second-biggest producer of copper and zinc, according  to Sociedad Nacional de Mineria Petroleo y Energia, and the  only Latin American stock market besides Brazil that hasn't  climbed to a record in 2010. The Bovespa needs to rally 5.1  percent to surpass its prior peak, less than 66 percent for  Peru's measure and 32 percent for the metals gauge. ``I don't  think Peru will reach record highs this year,'' said Alonso  Aramburu, an equity analyst with Pactual in New York.
``Commodity prices are still well below 2007 levels.''

Baltic Trading IPO Raises $228 Million at Low End of Forecast Price Range
     Baltic Trading Ltd., the New York- based shipping company  formed to operate dry-bulk cargo vessels, raised $228 million  in its initial public offering after selling shares at the low  end of its price range. Baltic Trading, established in October  by Genco Shipping & Trading Ltd. of New York, sold 16.3 million  shares for $14 each yesterday, according to a filing with the  Securities and Exchange Commission and Bloomberg data. The  company, which asked for as much as $16, will use the proceeds  to buy six ships that will transport iron ore, coal, grain and  steel products. The IPO is the first of three U.S. offerings  this week and comes after seven companies postponed or delayed  initial sales this year. While buyers have extracted  concessions in almost every deal, Baltic Trading became the  second company in 2010 to price shares within its forecast  range as the Standard & Poor's 500 Index rebounded from a  three-month low. ``With markets being much stronger across the  board, that's good momentum building for the IPO market,'' said  Josef Schuster, the Chicago-based founder of IPOX Capital  Management LLC and manager of the Direxion Long/Short Global  IPO Fund, which started this month. ``If these companies don't  price reasonably well in the market, that would absolutely be  disappointing.''

Tech Stocks Pushed by Analysts a Decade After Bubble Burst: Chart of Day
     Ten years after bullish analyst recommendations helped push  the Nasdaq Composite Index to a record, technology stocks are  the highest-rated industry group. The CHART OF THE DAY's bottom  panel shows the Nasdaq peak of 5,048.62 on March 10, 2000, and  its 78 percent plunge over the next two and a half years. The  top panel shows analysts giving technology companies the  highest average rating among nine industries, according to data  compiled by Bloomberg. Stock pickers project a 14 percent gain  for the group during the next 12 months, the data show. ``As  value investors, 10 years ago we were finding virtually nothing  in technology,'' Mark Donovan, co-chief executive officer of  Robeco Investment Management, a unit of Robeco Group, which  oversees about $194 billion, said in a Bloomberg Television  interview from Amsterdam. ``Today there are a lot of  high-quality global players in the tech area that are trading  at very sensible multiples. There are hidden values that are  plentiful in the group.'' Cisco Systems Inc., the world's  biggest network-equipment maker, had a price-to-earnings ratio  of 160 a decade ago. Now the company is trading at 23 times  reported profits. IPod maker Apple Inc.'s PE ratio has dropped  to 22 from 45, while the ratio for Microsoft Corp., the biggest  software company, has declined to 15 from 63, according to  Bloomberg data.

Swiss Market Index Falls; Zurich Financial, UBS, ABB Lead Declining Shares
     Switzerland's benchmark stock index, the Swiss Market  Index, fell 0.18 percent at 9:05 a.m. The index of 20 stocks  traded on the Electronic Bourse System fell 12.39 to 6,861.20.
Among the stocks in the index, 6 rose, 12 fell and 2 were  unchanged. Declines in the Swiss Market Index were led by Ubs,  Abb and Zurich Fin. Services. About 1.70 million shares traded  in the Swiss Market Index. --Editor: David Merritt.

Japan's Stocks Rise on Outlook for Economy, Iron-Ore Demand; Mitsui Climbs
     Japanese stocks rose, sending the Nikkei 225 Stock Average  to its highest close since Jan. 21, on speculation increased  demand will boost earnings at iron-ore producers and that the  nation's economy is recovering. Mitsui & Co., which owns a 15  percent stake in Vale SA's major shareholder, climbed 2.7  percent after the Nikkei newspaper reported Brazil-based Vale  is seeking to increase iron-ore prices. Mitsui O.S.K. Lines  Ltd., Japan's largest operator of iron-ore ships, rose 1.3  percent. Electric device retailer Yamada Denki Co. climbed 4  percent after the Nikkei said the government may lift its  outlook on the nation's economy. ``The economy is undoubtedly  in the midst of mild recovery,'' said Mitsushige Akino, who  oversees the equivalent of $450 million at Tokyo-based  Ichiyoshi Investment Management Co. ``Iron-ore producers don't  think of raising prices unless demand is very strong. That  could be further evidence that the global economy is  improving.'' The Nikkei 225 climbed 1 percent to 10,664.95 in  Tokyo, the highest close since Jan. 21. The broader Topix index  rose 0.9 percent to 930.38, with almost five times as many  shares advancing as falling. The gauges briefly pared gains  after a Chinese government report on rising consumer prices  spurred concern the country will raise interest rates to curb  inflation.

Most China Stocks Drop as CPI Climbs to 16-Month High; Automakers Decline
     Most Chinese stocks fell, led by automakers and developers,  after inflation accelerated and new loans exceeded forecasts,  boosting the prospect for higher interest rates. SAIC Motor  Corp., the country's largest carmaker, lost 2.9 percent and  Gemdale Corp. dropped 1.2 percent. Consumer prices climbed in  February to a 16-month high and lenders extended 700.1 billion  yuan ($103 billion), government reports showed today. Shanghai  Pudong Development Bank Co. rose 2.7 percent after selling  shares to China Mobile Ltd. ``The market's reading of the  economic data points to overheating and a lot of investors  believe an interest-rate increase will come soon,'' said Yan  Ji, who helps oversee about $1.2 billion at HSBC Jintrust Fund  Management Co. in Shanghai. More than two stocks fell for each  one that rose on the Shanghai Composite Index, which gained  2.36, or 0.1 percent, to 3,051.28 at the close. The gauge has  lost 6.9 percent this year on concern measures to curb property  price gains and rein in lending growth will slow the economy.
The CSI 300 Index slipped 0.1 percent to 3,276.71.

Buy Asian Equities to Gain Before `Lights Turn Green,' Goldman Sachs Says
     Investors should buy Asian stocks outside Japan after  valuations dropped and before sentiment strengthens further,  Goldman Sachs Group Inc. said. ``By the time all the lights  turn green, the race will already be well under way,'' Goldman  Sachs analysts led by Timothy Moe wrote today. ``Sentiment and  valuation will improve as the year progresses, and we would  prefer to be early.'' The MSCI Asia-Pacific excluding Japan  Index remains 0.5 percent lower this year, having rebounded  from year-to-date losses of as much as 9.7 percent. Stocks slid  earlier this year on concern that China will tighten lending to  combat faster inflation and that Greece's debt crisis will  spread. Analysts' earnings growth estimates for this year have  climbed to 26 percent on average, near Goldman Sachs's 30  percent forecast, according to the report. The most profitable  securities firm in Wall Street history is predicting a 21  percent increase in Asian corporate earnings in 2011.

     For the complete stories summarized here, and for more of the day's top news, see TOP .

-0- Mar/11/2010  8:36 GMT

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