News Stock Exchange

Pakistan: Protests at Exchange

2008-10-14T19:19:00.001+01:00

WORLD BUSINESS BRIEFING | ASIA

Pakistan: Protests at Exchange

By BLOOMBERG NEWS

The police surrounded Pakistan’s biggest stock exchange to thwart violence by investors demanding a trading halt as price curbs imposed after the biggest slump in a decade locked up their money. “There are no longer any small investors left in the stock market, they have all been destroyed,” said Kausar Qaimkhani, chairman of the Small Investors Association, leading a group of about 50 shareholders outside the Karachi Stock Exchange. “The market should be closed till funds are arranged.” Board members of the exchange are deciding whether to extend six-week-old rules that prevented stocks from falling below their Aug. 27 closing prices after rejecting calls from brokers to shut the market. The benchmark Karachi Stock Exchange 100 index rose 2.89, or 0.03 percent, to 9,184.24 at the 2:15 p.m. local time close.

Gulf stocks surge for second straight day

2008-10-14T19:18:00.001+01:00

Gulf stocks surge for second straight day

9 hours ago

KUWAIT CITY (AFP) — Stocks in the Arab world raced higher on Tuesday for a second straight day, bolstered by government action to shore up the banking sector and by a spectacular global market rally.

Several Middle East markets put on seven percent or more, with Dubai and Doha leading the way in the oil-rich Gulf with gains of some 10 percent.

The Saudi bourse, the largest in the Arab world, finished up 7.29 percent after rising 9.2 percent in early trading, a day after it rebounded 9.5 percent. It shed 23 percent last week.

The Saudi Tadawul All-Shares Index closed on 6,828.96 points after soaring close to the key 7,000-point mark. It is still down 38.1 percent on the year.

The TASI was supported by the petrochemicals and banking sectors which both rose 7.5 percent. Only three firms dropped while 122 increased.

The bourse in Dubai closed up 10.76 percent, its biggest single-day rise ever, at 3,703.34 points. It was bolstered by the market leader, property giant Emaar, which surged 15 percent for the second day in a row.

Dubai Financial Market Index has already recouped most of the losses it made last week when it shed 26.7 percent. Its whole property sector rose the maximum 15 percent permitted by the market on both of the past two days.

The other United Arab Emirates bourse, the Abu Dhabi Securities Exchange, rose 7.5 percent to 3,602.45 points. It too was boosted by property shares, which rose almost 10 percent.

Tuesday's surge came after the UAE said it had made another 19 billion dollars available to local banks, the latest measure to combat liquidity problems arising from the global financial crisis.

The move brings to 32.6 billion dollars the total amount being offered by the UAE monetary authorities to meet the needs of local banks.

The markets surge "is certainly the direct result of government intervention. This has greatly lifted investor confidence," said the head of the Saudi Al-Dakkak Economic Studies House, Ali al-Dakkak.

"Prices of stocks in most Gulf states also reached low levels that encouraged investors to buy," he told AFP.

The UAE is not the only Gulf government to announce measures to shore up the financial system in recent days.

Saudi Arabia, Kuwait and Bahrain have slashed interest rates, pledged tens of billions of dollars of liquidity to domestic banks and eased lending restrictions.

Bucking Tuesday's rebound, the second largest Arab bourse, the Kuwait Stock Exchange, closed down 0.26 percent at 11,795.70 points despite opening higher. It was apparently reacting to only modest nine-month results announced by some banks.

It was the only Gulf market to drop on Monday, when all other bourses in the region bounced back sharply after last week's dramatic falls.

In Egypt, the CASE-30 stock index closed the day up 6.3 percent at 6,138. The most heavily traded stock, Orascom Construction Industries, rose 8.88 percent.

The index had lost more than half its value in six months since hitting a high of 12,000 points in May.

The Doha Securities Market closed up almost 10 percent at 8,377.36 after the Qatar Investment Authority, the emirate's sovereign wealth fund, decided to buy between 10 percent and 20 percent of bank shares.

In Oman, the Muscat Securities Market finished up 8.4 percent at 7,717.43 points, while the Bahrain Stock Exchange closed up 1.4 percent.

In the past two days, the seven stock markets in the Gulf have increased their value by more than 100 billion dollars to around 870 billion dollars, after shedding around 200 billion dollars in the past week.

UPDATE 1-Toronto stock index surges out of gate

2008-10-14T19:17:00.000+01:00

UPDATE 1-Toronto stock index surges out of gate

Tue Oct 14, 2008 10:32am EDT

* Investors cheer U.S. plan to plow $250 bln into banks

* Index races 1,600 points higher, biggest one-day gain

* Financials, oil and gas groups lead (Adds details)

TORONTO, Oct 14 (Reuters) - The Toronto Stock Exchange's main index made its biggest intraday gain ever at the start of trading on Tuesday as the market played catch-up with Monday's monster surge on Wall Street and welcomed a U.S. plan to inject $250 billion into its banks.

Canadian markets were closed on Monday for Thanksgiving Day.

Shortly after 9:45 a.m. (1345 GMT), the S&P/TSX composite index.GSPTSE was up 1,169.50 points, or 12.90 percent, at 10,234.66. All 10 sectors were higher. Right after the open the index was up a record-breaking 18 percent.

The big jump in the Toronto index came on the heels of big gains on world stock markets on Monday and continuing strength on Tuesday as investor jitters about the stability of the financial system eased.

The U.S. plan to plow $250 billion into its banks, following similar measures in Europe, is designed to get them lending to each other again. [ID:nTRS000084]

Financials led the Toronto rally, up 16.5 percent. Toronto-Dominion Bank (TD.TO: Quote, Profile, Research, Stock Buzz) jumped 18 percent to C$61.54, while Manulife Financial (MFC.TO: Quote, Profile, Research, Stock Buzz) soared 22 percent to C$32.52.

The U.S. plan broadly boosted sentiment in commodities as well, with the energy sector up 18 percent.

Imperial Oil (IMO.TO: Quote, Profile, Research, Stock Buzz) rose 28.5 percent to C$40.18, while Petro-Canada (PCA.TO: Quote, Profile, Research,Stock Buzz) gained about 25 percent to C$29.45.

($1=$1.15 Canadian) (Reporting by Ka Yan Ng; Editing by Peter Galloway)

2008-10-14T19:15:00.000+01:00

Joyful day on Oslo stock exchange

The day has turned out to be one of the best in the history of the Oslo stock exchange, after the rescue deal and oil-price pulled it up.

Publisert 14.10.2008 15:17 - Oppdatert 14.10.2008 15:17

The beginning of a new week on the Oslo stock exchange was, with few exceptions positive. A G7-meeting about the rescue deal, along with a rise in the oil-price helped to lift stock markets throughout Europe.

Monday began with a solid rise in Asia, where the regional index, MSCI Asia Pacific rose by 4.2 per cent. The optimism began as finance ministers in the G7 countries guaranteed that they would take necessary steps to resolve the financial crisis.

Europe followed suit in grand tempo.

London’s FTSE rose by a solid 7.75 per cent. Germany’s DAX-index rose by as much as 10.79 per cent. The Paris CAC40-index leapt 9.02 per cent.

As an extra bonus, the price of oil rose on the Oslo stock market, and the main index didn’t stop before it reached 254.2 points. This was a rise today of 6.04 per cent.

Last week was one of the worst of all times for the Oslo stock market. The fall ended at 21.90 per cent, and since the New Year, Oslo stock market has more than halved.

Price of oil

The raw material market also got moving. The rescue deals that were made known on Sunday and Monday have caused investors to again put their money in raw materials. It is even so not enough to prevent the super-optimists from becoming negative.

Goldman Sachs predicts that the price of oil will lay at 70 dollars a barrel by the New Year. This is a clear devaluation on the original estimate of 115 dollars a barrel. When it comes to prices for 2009, they have also made drastic cuts. Next year, they envisage an average price of 86 dollars a barrel, which involves an estimated cut of a third.

When Oslo stock exchange closed, the November contracts for North Sea oil lay at 75.72 dollars a barrel, a clear rise following Friday’s bottom notation of 73.30 dollars a barrel.

StatoilHydro wrote by 3.99 per cent during Monday trade to 114.60 per share. The oil company, Questerre leaps as much28.35 per cent to 8.15 kroner.

Losers

Among those who were the exception to the day’s upswing were the seismic company, Petroleum Geo-Service and the finance concern, Storebrand.

The PGS stock performance fell 4.43 per cent to 44.20 kroner. This is following Goldman Sachs’s devaluation recommendation. The stock exchange has changed its opinion and recommends the sale of the share, whereas they have previously had a neutral attitude to the company.

Low volume

As in recent days, the volume was again low on the Oslo stock exchange, with a turnover of 7.02 billion kroner in total.

StatoilHydro had the greatest turnover and amounted to 23 per cent of the day’s trade volume when shares for a total of 1.67 billion kroner changed hands in the oil company.

FOREX-Euro, sterling jump as Europe govts rescue banks

2008-10-13T14:14:00.000+01:00

FOREX-Euro, sterling jump as Europe govts rescue banks
Mon Oct 13, 2008 7:39am EDT
* Euro pushes up after European govts agree to rescue banks
* Sterling also rallies as UK govt details bank bailout plan
* Stocks surge, panic selling arrested
* UK's Brown calls for remake of Bretton Woods pact
(Changes byline, releads, adds comment, updates throughout)
By Veronica Brown
LONDON, Oct 13 (Reuters) - The euro shot up on Monday, pulling away from a 1-1/2-year low against the dollar as a pledge by European governments to rescue banks from collapse plugged a deluge of selling in the single European currency.
Sterling also gained traction after the British government said three of the nation's biggest banks would take $64 billion in official funds to boost their capital [nLD69629].
According to a draft bill seen by Reuters on Monday, a rescue package for Germany's financial sector includes a fund to provide up 400 billion euros in guarantees for banks. Details of the plan were due at 1300 GMT [nLD220275].
The French government would create a $55 billion fund to take stakes in its banks, media reports said, as markets awaited the release of details for other European governments' respective bailout plans.
European shares were boosted, climbing more than 6 percent in early trade and maintaining most of the gain through the morning.
"The biggest change from today relative to last week is the fact that euro zone officials seem to have come up with a template plan from which national governments can pick and choose and implement where they see necessary," said Derek Halpenny, European Head of Global Currency Research at BTM-UFJ in London.
"We're certainly getting a greater shift towards the template used by the British government, which seems at the moment to be the best plan in town and the one investors are warming most to," he added.
In exchange for the UK government's fund injections, Royal Bank of Scotland (RBS.L: Quote, Profile, Research, Stock Buzz), HBOS (HBOS.L: Quote,Profile, Research, Stock Buzz), and Lloyds TSB (LLOY.L: Quote, Profile,Research, Stock Buzz) would be required to lend to homeowners and small businesses at rates seen in 2007.
In addition, institutions would also have to limit executive pay and accept government input on new board appointments [nLD167263].
British Prime Minister Gordon Brown called for world leaders to come together to remake the Bretton Woods agreement to tackle a 21st century globalised financial system.
The Bretton Woods conference in 1944 helped draw up the post-war financial order and established the International Monetary Fund (IMF) and the World Bank.
The euro spiked as high as $1.3671 , according to Reuters data. Bourses in Tokyo and New York bond markets were closed for respective national holidays.
By 1122 GMT, the single currency had pared early gains but was still up 1.3 percent on the day at $1.3577, having hit a low as $1.3257 on Friday, its weakest since March 2007.
The euro also climbed against the yen, and was last up 1.1 percent at 136.53 yen and recovering from a tumble last week that took it to levels last seen in mid-2005.
Sterling jumped as high as $1.7278, pulling away from a five-year low around $1.68 hit on Friday.
The yen was sold broadly as investors cut long positions built up in the Japanese currency as part of trades to reverse carry trades that had used cheap, low-yielding yen funds to buy higher-yielding currencies.
Despite the dollar's losses against the euro, the U.S. currency recovered from early losses against the yen to trade at 100.49 yen, off a session low of 99.58 according to Reuters data.
JITTERS REMAIN
European shares were last trading 5-1/2 percent higher, with sentiment bolstered by the bank rescue packages after a drop of more than 20 percent last week.
Leaders from Group of Seven industrialised nations at the weekend set out a plan of action to deal with the ongoing meltdown in the banking sector.
The United States said it would take stakes in banks in a first such move since the Great Depression, and Australia said it would guarantee deposits in its banks. [ID:nCRISIS]
While the flurry of initiatives to contain the worst financial crisis since the 1930s may have stemmed waves of selling for now, analysts were uncertain whether the improving mood would last very long.
"With risk perception hitting yet another record high last week...it may take longer until investors' confidence is restored to its pre-crisis levels," Dresdner Kleinwort strategists said in a note to clients.
"New triggers of risk aversion like real sector defaults should abound as global economy heads into a recession going forward. Markets thus should remain jittery in the coming months," they added. (Reporting by Veronica Brown; Editing by Chris Pizzey)

RPT-FOREX-Yen falls, Aussie surges as bank rescues take shape

2008-10-13T14:13:00.000+01:00

RPT-FOREX-Yen falls, Aussie surges as bank rescues take shape
Sun Oct 12, 2008 9:10pm EDT
(Repeats to additional subscribers)
By Eric Burroughs
TOKYO, Oct 13 (Reuters) - The yen slid against higher-yielding currencies on Monday while the Australian dollar surged as leaders from Europe to the United States rushed out plans to shore up banks and stem the panic gripping investors.
After stock markets around the world suffered their worst ever weekly losses last week, leaders from Group of Seven rich nations set out a plan of action to stem the crisis and European leaders agreed to inject public funds into the banking system if necessary. [ID:nLC713950]
The United States said it would take stakes in banks in a first such move since the Great Depression, while Britain was set to pump more than 40 billion pounds into its four biggest banks. [ID:nCRISIS] The flurry of initiatives to stem the worst financial crisis since the 1930s increased investor appetite for risk, though analysts were uncertain whether the improving mood would last very long.
"What is clear is that global policymakers are not going to stand idly by as the global financial system implodes," said Sue Trinh, senior currency strategist at RBC Capital Markets, in a note to clients.
In Asia, Australian and South Korean equities jumped 3-6 percent and U.S. stock futures SPc1 also rose, pointing to a sharp rally.
Reviving the lending between banks, the lifeblood of the global financial system, was at the heart of the rescue plans after the default of Lehman Brothers caused many financial institutions to stop dealing with each other.
Trading activity was subdued due to a national holiday in Japan and with U.S. bond markets closed for the Columbus Day holiday. U.S. stock markets will be open, however.
Weeks of severe market volatility have also made investors and hedge funds shy away from trading, making day-to-day moves even more extreme than usual.
The dollar slipped, giving up some of its gains scored in the past few weeks as U.S. investors repatriated funds and as banks around the world scrambled to acquire the dollar funding they needed on the open market.
The euro rose 1.2 percent from late U.S. trade to $1.3573 , recovering from a 1-½ year low of $1.3258 struck on Friday.
The single currency jumped 1.4 percent to 136.92 yen , up from a three-year low of 132.15 hit on Friday as well.
The dollar was little changed at 100.70 yen with most of the big moves concentrated in currencies that have suffered the most during the broad market sell-off of the past few weeks.
The Australian dollar gained 5.4 percent to $0.6774 after hitting a 5-½ year low of $0.6330 on Friday and plunging about 20 percent in the past two weeks.
Against the yen, the Aussie was up 5.4 percent to 68.20 yen after having collapsed more than 22 percent in the past two weeks to a six-year low near 63 yen. (Editing by Tomasz Janowski)

FOREX: Ringgit Ends Higher Against U.S. Dollar

2008-10-13T14:12:00.000+01:00

FOREX: Ringgit Ends Higher Against U.S. Dollar

KUALA LUMPUR, Oct 13 (Bernama) -- The ringgit ended higher against the US dollar Monday in line with gains by other Asian currencies, dealers said.At 5pm, the ringgit traded higher at 3.4930/4970 compared with last Friday's closing of 3.5115/5145.Dealers said Asian currencies were buoyed by the rising stock market after an announcement by the Group of Seven (G7), that it would inject public funds into the banking system if necessary, to tackle the global financial crisis."The market reacted positively to the G7 announcement to contain the financial crisis.This spurred buying interest in the local market," a dealer said.In late trading today, the local currency traded mixed against other major currencies.It depreciated against the Singapore dollar at 2.3783/3837 from 2.3744/3785 last Friday while being firmer against the Japanese yen at 3.4704/4774 from 3.5391/5428 previously.The ringgit was stronger against the euro at 4.7616/7698 from 4.7809/7860 last Friday while it was lower against the British pound at 5.9947/6.0050 from 5.9481/9550 previously.

Review of Markets for the week

2008-08-24T14:29:00.000+01:00

Review of Markets for the week
24 Aug, 2008, 0000 hrs IST, ET Bureau

Markets in bear grip, Sensex dips 323 pts

The Bombay Stock Exchange bellwether Sensex extended its weekly losses as the US mortgage crisis re-emerged exerting pressure on global markets in the week under review. The BSE 30-share sensitive index moved widely in a range of 14,824.92 and 14,136.86 before ending the week at 14,401.49, netting a fall of 322.69 points or 2.19 per cent from the previous weekend’s close.In the absence of domestic trigger, the markets were largely influenced by global developments, including a gradual upward movements in crude oil prices, besides sustained capital outflows from the Indian equity.

Similarly, the 50-share Nifty of the National Stock Exchange tumbled by 103.25 points, or 2.33 per cent, to close at 4,327.45 from its last week-end’s close.Analysts said, the domestic bourses came under pressure as global markets were hit during the week by fresh concerns about the mortgage crisis that re-emerged after speculation of a need to bailout two largest US home finance groups — Freddie Mac and Fennie Mae.On the domestic front, they said, a fresh rise in inflation and crude oil prices caused concerns that the Reserve Bank may initiate further monetary measures to contain inflationary pressure.

Inflation ascended to 12.63 per cent, while global crude oil prices surged past the $121 a barrel level on Friday. Foreign institutional investors too were net sellers in the week, particularly after SEBI’s decision of not changing the curbs imposed on Participatory Notes in its meeting in the preceding week.Heavyweights like the largest public sector bank SBI plunged 7.68%, Satyam Computer 6.19%, Grasim 6.19%, NTPC 6.11%, ICICI Bank 4.27%, ONGC 4.74% and Reliance Communications 4.28%.The broader BSE-100 Index dropped sharply by 189.87 points, or 2.46% to end at 7,524.31 from last weekend’s close of 7,714.28.

The BSE-200 Index and the Dollex-200 were also quoted lower at 1,761.45 and 674.79 at the weekend compared to their last weekend’s close of 1,804.57 and 700.82, respectively.On the NSE, the S&P CNX Defty finished lower by 128.50 points or 3.59% at 3,451.40 and the CNX Nifty Junior concluded the week at 6,956.50, a loss of 217.10 points or 3.03%.Among the sectoral indices, the BSE Realty Index was the biggest loser with a fall of 218.80 points or 4.24%, followed by the BSE PSU Index, which lost 275.91 points or 3.95%. The Bankex also tumbled by 247.20 points or 3.58%.

AMR hires Merrill to sell up to $300M in stock

2008-08-23T23:24:00.000+01:00

AMR hires Merrill to sell up to $300M in stock

FORT WORTH, Texas

American Airlines parent AMR Corp. said Friday it has hired Merrill Lynch & Co. to sell up to $300 million in stock.

The sale of stock "from time to time" will be made at market prices on the New York Stock Exchange, AMR said in a filing with the Securities and Exchange Commission.

At Friday's closing price, AMR stock had a market value of about $2.6 billion.

The shares rose 84 cents, or 8.7 percent to $10.52, in regular trading before the sales agreement was disclosed, as airline stocks benefited from a drop in oil prices. In extended trading, they fell 3 cents, to $10.49.

Fort Worth-based AMR previously filed a shelf-registration statement to sell the shares with the SEC in 2006.

Review of Markets for the week

2008-08-23T23:23:00.001+01:00

Review of Markets for the week
24 Aug, 2008, 0000 hrs IST, ET Bureau

Getting The Best Results With Your Forex Course

2008-08-23T22:59:00.001+01:00

Getting The Best Results With Your Forex Course

Forex Course

A course on forex trade helps the individual investors understand the market and perform well in earning profit. The course includes systematic analysis of the data pertaining to the trade in the past and the vital indicators in the area of GDP, production etc, pertaining to the country. This technical and fundamental analysis gives the investor a fair sight about the market, depending on which, strategies can be formed for making money out of the market. As a part of the course, the trader is exposed to online forex trading, which gives tremendous confidence to the retailer.

Online Forex Trading

Normally, Forex trading by retail traders is done through brokers. The brokers pprovide access to the purchase and sale of the currencies as per the request. With the advent of modern communication equipments and computer peripherals today you can enter the market from the comfort of your home. A large part of what has created this access is made possible through recent developments cleaning upholstery cleaning technology. Forex trade is a 24 hour market, with one country or the other in the world participating in the trade. The online market is a spot market in the sense it settles instantly. Us dollar (USD), European Euro(Euro), Japanese Yen (JPY), Swiss Franc (CHF),UK Pound (GBP), Canadian Dollar (CAD) and Australian Dollar (AUS) are the frequently traded currencies in online forex trading.

In every transaction two currencies are involved, one is bought and the other is sold. There are many online Forex websites, which should be understood before actually doing online trading. Unlike conventional trading, online trading does not require the carpet rug amp; upholstery cleaners assistance of brokers. What a broker would be doing otherwise by receiving and placing/executing the orders, the system will do automatically and istantly in online forex trading. At the click of the mouse, the transaction is completed/executed. The online trading system is very fast and reliable.

Cross Currency

Cross currency is a currency pair in which the two currencies are not USD. In other words, the two currencies are currencies other than USD. The cross currency is more liable for fluctuation because actually in cross currency transactions, the purchase currency and the selling sheet metal fabrication are converted in to USD first and then the trade is completed. So, knowledge about cross currency transactions will enable a Forex trader to profit even when the U.S. Dollar pairs are not trending. Similarly, one should be aware of the base currency (the first currency in a currency pair), which helps take vital decisions.

Online Forex trading is a relatively new development that provides conveneint access to traders worldwide. With wireless internet access traders can now execute their trades from virtuall anywhere in the world and enjoy a lifestyle of freedom and mobility.

Use forex reserves to create sovereign wealth funds

2008-08-23T22:57:00.002+01:00

Use forex reserves to create sovereign wealth funds
23 Aug, 2008, 1438 hrs IST,Ashok Khemka,

The foreign reserves holdings of oil and some emerging economies including the BRIC countries are reaching stratospheric levels. This external surplus is largely a result of the run-up of the oil and commodity prices. Should these nations be complacent with their high levels of forex holdings or should they worry about the opportunity costs of holding high levels of foreign reserves? This savings glut of oil and emerging economies has been largely channelled to the US, cheaply financing its large current account imbalance. The US current account deficit is estimated to absorb about 75% of the global external surpluses. Increasing liquidity of the oil and newly industrialised economies are being funnelled into financial instruments issued by advanced countries yielding negative real rates of return.

Holding adequate levels of foreign reserves is essential to meet the liquidity on account of imports and external debt service. Holding of foreign reserves balance in cash or low-yielding liquid instruments such as the US Fed securities is akin to holding cash and bank balance in current accounts by the corporate/household sector to meet the necessary liquidity in carrying out day-to-day transactions. But there is a trade off involved with increasing returns when funds are locked up in higher yielding but longer-term instruments.

India's foreign reserves holdings has been around $300 billion for quite some time, forming almost 35% of our national GDP. The surge in reserves causes a mismatch between the opportunity costs of holding the reserves with macro-economic adjustment costs incurred when they fall short. There are several global benchmarks to determine the optimal level of foreign reserves holdings providing adequate liquidity for current account transactions such as imports and debt servicing. One rule of thumb is based on imports. It predicts that reserves should be enough to cover three months of imports.

The current level of foreign reserves holdings in India covers 15 months of imports, making current foreign reserves holdings overvalued by five times. Another oft-used benchmark is the Guidotti-Greenspan rule. As per this rule, the reserves should be enough to cover the short-term debt, that is, the ratio of average reserves holdings to short-term debt payable during the year should be one. This ratio of reserves to short-term debt for India is seven as on end March, 2008. The reserves holding by this measure is seven times more than the requirement. The average reserves to GDP ratio is 35% in India as compared to 10% on average in advanced countries. All this means that our reserves are too high for comfort.

The bulk of our reserves are invested in US Fed securities. The interest rates in both US and euro areas have yielded negative real rates of return of between 2% and 3% in the last 4-5 years. At this negative real yield on investments in US government securities, India's loss on its foreign reserves holdings is anything between $6 billion and $9 billion per annum at current reserves level. This is the high cost paid by the country for maintaining excessive liquidity, besides the opportunity costs foregone by not investing in longer maturing, higher yielding bonds and equities. By either measure of present level of short-term foreign debt of $44 billion or three-months import cover of $60 billion, a reserve level of $80 billion should provide comfortable liquidity. This reserve level is also 10% of GDP, the level maintained by most advanced countries. Thus by all measures, our foreign reserves holdings are over-liquid by $200-220 billion. A part of the excess reserves holdings can be gainfully employed by the RBI to intervene in the forex market to restore the value of a grossly undervalued rupee.

By the approximate measure of McIndex Purchasing Power Parity (equivalent price of a McDonald's hamburger across countries), the Indian rupee is undervalued by 30-40%. A correctly valued rupee would reduce the import bill on oil and other commodities, sobering the spiralling inflationary effect due to over-valued imports on domestic prices. Central bank intervention in the forex markets by offloading a part of its current reserves holdings would help in sucking out excessive monetary liquidity in the domestic economy. The actual growth rate in broad money supply is in excess of 20% and exceeds the targeted growth rate by almost 6-7%.

The balance of available foreign reserves holdings ought to be gainfully deployed in foreign assets which maximise returns. The imperative of earning higher and market-based returns on foreign assets should not be lost track of. India is experiencing global financial integration with its gross foreign assets and liabilities exceeding 60% of GDP. Assets held by sovereigns currently stand at $7 trillion in international reserves of which sovereign wealth funds constitute between $2-3 trillion. (See the accompanying table for the major global sovereign wealth funds).

The US has enjoyed much better performance on foreign assets than other countries. The sum total of capital gains and income yields on US foreign assets during the period 2001-06 has been as high as 12-15% while the return on its foreign liabilities is only 5-6%, giving US a net return of 7-8% on its foreign portfolio. To appreciate the returns on FII investments in India, consider the following data as on end 2007. As per SEBI records, while the cumulative purchases by FIIs were to the tune of $501.75 billion, cumulative sales amounted to $435.41 billion and net purchases were worth $66.33 billion. The market value was $255.4 billion. A rough calculation shows that the returns on average on the FII investments in India yielded a fabulous cumulative annual rate of 351 5% on average till end 2007.

A substantial part of the current foreign reserves holdings could thus be set aside to create a sovereign wealth fund run by global professional managers rewarded with performance-based salaries and independent of bureaucratic and political meddling. It is not wise - when you permit foreign capital, which earns high returns in the domestic equity and commodity markets - to constrain the foreign capital held domestically from exploring higher returns in high yielding equities, corporate bonds and commodities markets abroad. But this calls for a paradigmatic shift in thinking - freedom from a licence raj constraining domestic capital from freely flowing in and out. We have to overcome the present mindset and show more faith and respect for the Indian talent and entrepreneurial spirit.

(The author is an IAS officer. Views are personal.)

Forex Trading Strategy: Japanese Yen

2008-08-23T22:57:00.001+01:00

Forex Trading Strategy: Japanese Yen

Global Forex Trading, Global Forex Trading

Published 08/23/2008 - 9:08 a.m.

Yen rallies in currency tradingForex trading strategy should consider that the Japanese yen is on the rise right now. The yen is rallying in currency trading on the FX market as risk aversion sets in.

Most of the worries have to do with the U.S. financial markets. Concerns stemming from the financial sector are creating a situation in which investors are concerened about taking risks. This means that the yen carry trade is unwinding.

The Guardian reports on forex trading strategy and the Japanese yen:

"There is some jitteriness in financial markets and in equity markets ... and that tends to mean the yen is a bit better supported against some of the more risky currencies," said Phyllis Papadavid, currency strategist at Societe Generale in London.

"Especially with some of the stories surrounding U.S. banks ... there is that sense of risk aversion seeping into the markets."

Forex reserves down by $3.8 billion

2008-08-23T16:46:00.000+01:00

Forex reserves down by $3.8 billion
22 Aug, 2008, 2221 hrs IST, PTI

MUMBAI: Declining foreign currency assets (FCAs) caused a further fall in India's foreign exchange reserves for the fifth consecutive week, pulling it down below the USD 300-billion mark.

Reserves dropped by another USD 3.8 billion to USD 296.210 for the week ended August 15 from USD 300.01 billion in the previous week, the Reserve Bank said in its weekly report today.

During the period under review, the FCAs fell by USD 3.785 billion to USD 285.975 billion from USD 289.760 billion in the previous week, RBI said.

FCAs expressed in US dollar terms include the effect of appreciation or depreciation of non-US currencies such as Euro, Sterling and Yen held in reserves.

The gold reserves remained static at USD 9.735 billion during the period while the special drawing rights sharply declined to USD 4 million, the apex bank said.

India's reserve position in the International Monetary Fund (IMF) dipped by USD 8 million to USD 496 million from USD 504 million in the previous week, RBI said.

FOREX-Plunging oil, gloomy British data fuel dollar rally

2008-08-23T16:45:00.000+01:00

FOREX-Plunging oil, gloomy British data fuel dollar rally

Fri Aug 22, 2008 4:07pm EDT

(ADVISORY: Please note that there is reduced FX coverage in Europe on Monday owing to a public holiday in the UK. Full European coverage will resume on Tuesday.)

* Dollar rallies, UK GDP backs slower global growth view

* Crude prices drop more than $6, cheering stocks

* Bernanke says dollar stability to slow inflation (Adds details, updates prices, changes byline)

By Lucia Mutikani

NEW YORK, Aug 22 (Reuters) - The dollar surged on Friday, recovering from the previous day's losses, as gloomy British growth data backed views of a slowing global economy and raised prospects of interest rate cuts outside the United States.

A $6.59 drop in U.S. crude oil prices to below $115 per barrel, which contributed to a rally on Wall Street, and comments by influential investor Warren Buffett that he has no bets against the dollar also added to the U.S. currency's upward momentum.

"UK GDP data weighed on the pound and sequentially on the euro, the Aussie dollar and the Kiwi dollar, which are the central banks looked at as potentially cutting interest rates," said David Watt, senior currency strategist at RBC Capital Markets in Toronto.

Data showed the British economy stalled on the second quarter, suggesting a recession might be looming, and added to an overall bleak picture of a slowing European economy. It raised the possibility of European Central Bank and Bank of England monetary easing.

The euro dropped to a session low of $1.4760, edging toward a six-month low hit earlier this week at $1.4631, according to Reuters data. It was last trading at $1.4772, down 0.9 percent.

Despite Friday's losses, the euro was on track for its best weekly gain against the dollar since mid-July.

The dollar jumped 1.5 percent to 110.03 yen , while sterling slumped 1.5 percent to 1.8508 against the greenback . The dollar was on pace for its best one-day gain against the yen in more than two months at current prices.

The gains hoisted the dollar index to an intraday peak of 76.866 .DXY, not far from its 2008 peak at 77.413 hit early this week. The index, which measures the dollar's value against a basket of six currencies, was last up 1.0 percent at 76.789.

DOLLAR IN RECOVERY MODE

The dollar briefly trimmed gains against the euro in a knee-jerk reaction to Federal Reserve Chairman Ben Bernanke's comments that a stable dollar and falling commodities should help slow inflation this year and next. For details, see [ID:nN22434443].

Bernanke's remarks at an annual Fed symposium in Jackson Hole, Wyoming, prompted analysts to reduce expectations of a U.S. interest rate increase this year, which could diminish the dollar's appeal to investors.

But analysts said even without an interest rate hike this year, the dollar would probably continue to recover.

"In talking about the headwinds to the U.S. economy and then indicating how they had cut interest rates so aggressively ... the Fed feels it has done a lot of work," said RBC Capital Markets' Watt.

"If you contrast that with what is going on with UK GDP numbers and how much work that still has to be done by a number of the other central banks, it just entrenches the positive U.S. dollar view," Watt said.

The dollar has soared this month as dealers have unwound trades that bet on the global economy weathering the U.S. downturn and the credit crisis. Investors, as a result, sold the euro, British pound, Australian dollar and commodities.

Analysts said the dollar remained on track for a medium-term recovery after a seven-year downtrend.

Persistent problems at U.S. mortgage finance companies Fannie Mae (FNM.N: Quote, Profile, Research, Stock Buzz) and Freddie Mac (FRE.N: Quote, Profile, Research, Stock Buzz), and speculation over the future ofinvestment bank Lehman Brothers (LEH.N: Quote, Profile, Research, Stock Buzz) could make the road to recovery a bit bumpy, they warned.

"In the current environment of financial market instability, traders needed Bernanke to reassure them that they will take care of the financials first and worry about inflation later, which was exactly what Bernanke delivered," said Kathy Lien, director of currency research at GFT Forex in New York.

"However don't be mistaken, the Fed is still looking to raise interest rates in 2009," Lien wrote in a note.

The Australian dollar dived 1.6 percent to US$0.8665 , while the Kiwi dollar tumbled 1.8 percent to US$0.7086 . (Additional reporting by Gertrude Chavez-Dreyfuss; Editing by Jonathan Oatis)

Forex reserves dip below $300 bn

2008-08-23T16:36:00.001+01:00

Forex reserves dip below $300 bn

Bs Reporter / Mumbai August 23, 2008, 2:23 IST

After six months, India’s foreign exchange (forex) reserves have dropped below the $300-billion mark.

During the week ended August 15, forex reserves fell by $3.8 billion to $296.21 billion mainly on account of an appreciation of the dollar against other currencies. Foreign exchange reserves went above the $300-billion mark in February this year and touched an all-time high of $316.17 billion in the week ended May 23.

Reserves have, however, declined for the last six weeks. Even during the previous week, foreign exchange reserves fell by $5.6 billion and the decrease was attributed to selling by foreign institutional investors due to volatility in the Indian stock markets.

The latest figures from the Reserve Bank of India (RBI) showed that the country’s foreign currency assets declined by $3.7 billion to $285.98 billion.

Global Forex Trading, Global Forex Trading

2008-08-23T16:17:00.000+01:00

Forex Trading Strategy: Japanese Yen

Global Forex Trading, Global Forex Trading

Published 08/23/2008 - 9:08 a.m.

"Especially with some of the stories surrounding U.S. banks ... there is that sense of risk aversion seeping into the markets."

Nuthri Al Hayaah - Enriching Life: Visual stock exchange

2008-08-19T02:03:00.000+01:00

http://newsstockexchange.blogspot.com/

http://newsstockexchange.blogspot.com/
http://newsstockexchange.blogspot.com/

http://newsstockexchange.blogspot.com

CGA Mining Limited - Announcement to the Australian Securities Exchange and Toronto Stock Exchange - SAG Mill arrives at site - Masbate Gold Project

2008-08-19T01:56:00.006+01:00

Attention Business Editors:

CGA Mining Limited - Announcement to the Australian Securities Exchange and Toronto Stock Exchange - SAG Mill arrives at site - Masbate Gold Project

    /NOT FOR DISSEMINATION IN THE UNITED STATES OR FOR RELEASE TO US NEWS
   WIRE SERVICES/

   PERTH, Western Australia, Aug. 18 /CNW/ - Further to our SAG Mill update
announcement dated 25 July 2008, the SAG Mill has now successfully arrived at
the Masbate project site. Following an extensive refurbishment program the SAG
Mill was transported overland from Weir's workshop in Edmonton, Canada to
Seattle, and from there by ocean going vessel to Manila, and finally to the
Masbate Project site by barge.
   The SAG Mill (32' diameter x 14' long with twin 4,000 HP drives) has now
been handed over to Leighton, and the assembly and installation of the SAG and
Ball Mills which also have been completely refurbished and arrived on site
during the last month, will commence this week. To view images from the
Masbate Gold Project please visit http://files.newswire.ca/578/CGAmill.doc.

   ABOUT CGA MINING LIMITED

   CGA is listed on the Toronto Stock Exchange and Australian Securities
Exchange. The Masbate Gold Project in the Philippines is currently under
construction. First gold is forecast to be produced in the first quarter of
2009. The project has a total indicated resource base of 4.55M ounces, total
inferred resource base of 3.22M ounces and is currently forecast to produce
over 200,000 ounces per annum. The 4Mt pa plant is under construction by
Leighton Contractors Asia Limited ("Leighton"). CGA is completing a scoping
study for the expansion of the plant throughput at Masbate. The mining
contract for the Masbate Gold Project has been awarded to Leighton, the
largest mining contractor in the world. A 30,000m drilling program (10,000m of
which has already been completed) is currently underway at Masbate. CGA is
completing a Feasibility Study into the Mkushi Copper Project in Zambia, which
is due for completion in December 2008. The Company is also currently
undertaking a 10,000m drilling program at Segilola, regarded as Nigeria's most
advanced gold property. CGA has a disciplined acquisition program focused on
acquiring new gold projects with a substantial initial resource with the
capacity to grow materially and where the development and operational
experience of CGA can be applied to enhance shareholder value.

   NATIONAL INSTRUMENT 43-101 AND JORC COMPLIANCE

   Mr Geoff.G.Jones, F.Aus.I.M.M.CP Mng, CGA's general manager, technical,
is acting as the Qualified Person in compliance with NI 43-101 and JORC
reporting requirements with respect to this announcement. He has prepared and
or supervised the preparation of the scientific or technical information in
this announcement and confirms compliance with NI43-101 and JORC requirements.
   Further information relating to the Masbate Project is included in the
technical report entitled Technical Report on the Mineral Resources of the
Masbate Deposit, Masbate Province, Republic of the Philippines for CGA Mining
Limited prepared by Mining Associates Pty Ltd and available on SEDAR at
www.sedar.com, lodged 8 July 2008.
   Andrew James Vigar of Mining Associates Pty Ltd, a qualified person, has
verified the resource statement for the Masbate Project as disclosed in this
announcement, including sampling, analytical and test data underlying the
estimate. Verification of the data included numerous site visits, database
validation of historical drill results and review of sampling and assaying
protocols. The qualified person was satisfied with the verification process.

   CAUTIONARY NOTE REGARDING FORWARD LOOKING STATEMENTS

   This announcement includes certain "forward-looking statements" within
the meaning of Canadian securities legislation. All statements, other than
statements of historical fact, included herein including, without limitation,
statements regarding anticipated dates for construction and production, and
other milestones related to the Masbate Gold Project and other projects;
estimates of capital and operating costs, recovery rates, production estimates
and estimated economic return; and CGA's future operating or financial
performance, are forward-looking statements. Information concerning mineral
reserve and resource estimates including statements regarding the conversion
of inferred resources to reserves also may be deemed to be forward-looking
statements in that it reflects a prediction of the mineralization that would
be encountered if a mineral deposit were developed and mined. Forward-looking
statements involve various risks and uncertainties and are based on certain
factors and assumptions. There can be no assurance that such statements will
prove to be accurate, and actual results and future events could differ
materially from those anticipated in such statements. Important factors that
could cause actual results to differ materially from CGA's expectations
include uncertainties related to fluctuations in gold and other commodity
prices and currency exchange rates; uncertainties relating to interpretation
of drill results and the geology, continuity and grade of mineral deposits;
uncertainty of estimates of capital and operating costs, recovery rates,
production estimates and estimated economic return; the need for cooperation
of government agencies in the development of the Masbate Gold Project; the
need to obtain additional financing to develop the Masbate Gold Project; the
possibility of delay in development programs or in construction projects and
uncertainty of meeting anticipated program milestones for the Masbate Gold
Project; and other risks and uncertainties disclosed under the heading
"Caution Regarding Forward-Looking Statements" in CGA's Annual Information
Form for the year ended 30 June 2007 filed with the Canadian securities
regulatory authorities on the SEDAR website at www.sedar.com.

UPDATE 1-Fairborne Energy shares rise on Alberta gas find

2008-08-19T01:56:00.005+01:00

UPDATE 1-Fairborne Energy shares rise on Alberta gas find

Mon Aug 18, 2008 9:12pm BST

(Adds closing share price.)

CALGARY, Alberta, Aug 18 (Reuters) - Fairborne Energy Ltd (FEL.TO: Quote, Profile, Research) shares rose 14 percent on Monday after the company detailed a prolific natural gas discovery in Alberta.

Shares of the junior oil and gas producer climbed C$1.42 to C$11.61 on the Toronto Stock Exchange. Volume was 1.87 million shares, more almost four times the 90-day average.

The shares have risen 62 percent over the past 12 months, against an 11 percent gain for the exchange's main energy index for the same period.

Fairborne said a horizontal well drilled at its Harlech property in Alberta produced up to 13 million cubic feet of gas per day while being tested and would be tied into infrastructure by the end of September.

The company said the well's production rate was more than 10 times greater than the norm for vertical wells drilled into the same geological formation.

A horizontal well runs laterally through a formation, while a vertical well taps just one small area.

Fairborne produced 59.5 million cubic feet of gas a day during the second quarter, as well as 3,116 barrels of oil and natural gas liquids a day.

($1=$1.06 Canadian) (Reporting by Scott Haggett; editing by Rob Wilson)

Musharraf’s resignation celebrated by Karachi Stock Exchange - Value of Rupee up

2008-08-19T01:56:00.003+01:00

Musharraf’s resignation celebrated by Karachi Stock Exchange - Value of Rupee up

2008-08-18 17:38:30 (GMT) (Caymanmama.com - Pakistan News News)

Karachi, Pakistan (CaymanMama.com) — The Karachi Stock Exchange reacted with a surge in trading activity upon the news of the resignation of President Pervaiz Musharraf which pushed the KSE-100 index to 10, 700 points registering a gain of 450 points. The rupee value also appreciated by Rs.1.40 against the US dollar.

Investors and member of the Karachi Stock Exchange welcomed the resignation by the President and said that Musharraf’s move will end the hostile political atmosphere bringing some stability to the business and political air of the country.

The members of the Karachi Stock Exchange expressed their views by saying that now the democratic institutions will get a chance to thrive and function properly.

The immediate response from the Karachi Stock Exchange and the business community is heartening, but it is yet to be seen what direction this political turmoil will take. The ruling coalition’s task now, after the President’s resignation will be to reinstate the judiciary, whether the co-chairman of the ruling Pakistan Peoples Party will stand by its commitment and reinstate the deposed judges or take a U turn as per the past precedents.

If the deposed judiciary is not reinstated within 3 days as per the last contract between the coalition partners, Pakistan will be set to face yet another political crises.

Musharraf’s resignation celebrated by Karachi Stock Exchange - Value of Rupee up

2008-08-19T01:56:00.001+01:00

Musharraf’s resignation celebrated by Karachi Stock Exchange - Value of Rupee up

2008-08-18 17:38:30 (GMT) (Caymanmama.com - Pakistan News News)

The members of the Karachi Stock Exchange expressed their views by saying that now the democratic institutions will get a chance to thrive and function properly.

If the deposed judiciary is not reinstated within 3 days as per the last contract between the coalition partners, Pakistan will be set to face yet another political crises.

BATS receives SEC exchange approval

2008-08-19T01:55:00.003+01:00

BATS receives SEC exchange approval

By Anuj Gangahar in New York

Published: August 18 2008 19:33 | Last updated: August 18 2008 19:33

BATS Trading, the upstart Kansas-based equity trading platform, received approval from the US Securities and Exchange Commission on Monday to operate as a registered national securities exchange, adding to mounting competition in the stock exchange sector.

BATS has been taking market share from the New York Stock Exchange and Nasdaq Stock Market, the two largest US exchanges, since its inception two and a half years ago, although critics said this is because the prices it charges customers to trade on it are unsustainably low.

EDITOR’S CHOICE

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In depth: Stock exchanges - Jul-09

ASX sees challenging times ahead - Aug-14

Lex: Asian stock exchanges - Aug-14

Exchanges agree to revamp insider trade probes - Aug-13

Investors buy 20% of Dubai exchange - Aug-11

The transition into an exchange, from the firm’s current status as an electronic communications network, is expected to take about 60 days. It filed for exchange status in November last year.

Joe Ratterman, chief executive of BATS, said: “As we have stressed repeatedly, our motivation to become an exchange has come from our desire to participate directly in the national market system and compete on a level playing field with our primary competitors, Nasdaq and the NYSE.”

“We realise there is a lot of hard work ahead of us as we take on added regulatory responsibility,” he said.

BATS averaged matched market share of 10.1 per cent of US equities per day in July.

Earlier this year, the trading network crossed the 1bn volume mark for one day of trading for the first time.

Last year, BATS unveiled a lower tariff for trading shares in which it, in effect, gave money to customers in exchange for their business. The move saw trading volumes more than double to over 200m shares a day.

BATS is backed by an ownership group including affiliates of Citigroup, Credit Suisse, Deutsche Bank, GETCO, JPMorgan, Lehman Brothers, Lime Brokerage, Morgan Stanley, Merrill Lynch, Tradebot, a software developer, and Wedbush, an investment bank.

BATS is preparing for the November launch of a European offering, which will compete head-on with the London Stock Exchange, initially trading in UK stocks, with continental European stocks coming later.

BATS’s European launch will come after the launch of two rival platforms - Turquoise and a “pan-European market” backed by Nasdaq OMX, the US exchange operator.

All three will provide added competition for incumbent exchanges in Europe, which have already seen the emergence of Chi-X, another investment bank-backed equities platform.

Tokyo stocks close 1% higher

2008-08-19T01:55:00.001+01:00

Tokyo stocks close 1% higher

TOKYO, Aug. 18 (Xinhua) -- Tokyo stocks closed higher Monday.

The 225-issue Nikkei Stock Average gained 146.04 points, or 1.12 percent, to 13,165.45 from Friday.

The broader Topix index of all First Section issues on the Tokyo Stock Exchange expanded 16.44 points, or 1.32 percent, to 1,263.75.

Value leader Mizuho Financial Group jumped 11,000 yen, or more than 2 percent, to 477,000 yen while volume leader Sumitomo Metal Industries went up 33 yen, or more than 7 percent, to 481 yen.

On the First Section, advancing issues outnumbered declining ones 1,308 to 343, with 66 others remaining unchanged.

Trading volume on the main section dropped to 1,687.36 million shares from 1,785.04 million Friday.

The TSE's Second Section index rose 2.81 points, or 0.11 percent, to 2,594.90 on a volume of 28.65 million shares.

On the Osaka Securities Exchange, the near-term September Nikkei 225 index futures contract increased 140 points to 13,170.

Nymex Investors Approve CME's $8.3 Billion Takeover (Update1)

2008-08-19T01:54:00.001+01:00

Nymex Investors Approve CME's $8.3 Billion Takeover (Update1)

By Edgar Ortega and Elizabeth Hester

Aug. 18 (Bloomberg) -- Nymex Holdings Inc. shareholders voted to approve CME Group Inc.'s $8.3 billion takeover offer, completing a transaction that may stem CME Group's 51 percent slide on the New York Stock Exchange this year.

A majority of CME and Nymex investors voted for the deal today in New York and Chicago, the companies said in a news release. The transaction cements CME Group's status as the world's largest derivatives market. About 650 of 816 Nymex members voted to approve the deal, Nymex Chairman Richard Schaeffer said on a conference call.

CME Group Chief Executive Officer Craig Donohue and Chairman Terry Duffy met with shareholders in the past two weeks to shore up support after some Nymex members said they would reject the offer. Donohue, 42, sweetened the offer twice, and last week two chief opponents dropped their complaints.

``In the exchange landscape of the future, there will be three to four big companies, global with different types of products,'' said Michael Henry, senior executive in the capital markets group at consulting firm Accenture. ``CME wants to be one of those companies. It's defending it's home turf by acquiring U.S.-based derivatives exchanges, but it still needs to make that move and show that it can act globally.''

The deal is expected to close Aug. 22.

Largest Transaction

CME Group, which tops No. 2 Eurex AG among derivatives exchanges, trades everything from futures on corn and U.S. Treasury debt to benchmark contracts for oil and natural gas. The transaction is the largest this year among exchanges, which are racing to meet investor demand for lower-cost electronic trading. More than $62 billion in acquisitions have been announced or completed since the start of 2007, according to Bloomberg data.

Prospects for the deal improved Aug. 14, when two Nymex members, Robert Sahn and Gary Glass, reversed their opposition and urged members to vote in favor. They campaigned to negotiate better terms. A majority of shareholders and at least 75 percent of Nymex's 816 members needed to approve the deal. Nymex said about 80 percent of members voted in favor.

The slump in CME Group shares this year cut $3.35 billion from the acquisition value since it was announced Jan. 28. The stock dropped $21.03, or 5.9 percent, to $336.64 in composite trading in New York today. Nymex fell $2.16 to $79.95.

Under the proposal, CME offered $36 in cash and 0.1323 of its shares for each Nymex share. The Nymex members, who hold Class A shares and have the right to trade at the exchange, will also get $750,000 in cash. The original proposal offered $612,000. CME said the transaction is valued at $8.3 billion.

Special Dividend

Approval paves the way for CME Group to proceed with a special dividend of about $350 million and a plan to repurchase as much as $1.1 billion of its shares.

The deal may help boost shares of the combined company as executives wring out expenses and use their dominance of exchange-listed derivatives to enter new businesses. CME may be able to eliminate as much as $100 million in costs, instead of the company's forecast of $60 million, said Justin Lumiere, a merger arbitrage analyst at brokerage ICAP in New York.

CME also gets Nymex's business clearing over-the-counter futures in the energy market. Together the companies will guarantee about 98 percent of the exchange-listed futures that change hands in the U.S., and will seek to expand to other assets such as the credit-default swap market that now trade privately among banks.

``They're going to have the strongest clearinghouse in the world and that's going to help them penetrate the over-the- counter market,'' said Diego Perfumo, who follows exchanges at Equity Research Desk in Greenwich, Connecticut. ``If you're strong, you have better chances in entering the over-the-counter market, especially now with concerns around counterparty risk.''

BATS Exchange Gains SEC's Approval

2008-08-19T01:53:00.000+01:00

BATS Exchange Gains SEC's Approval

Big Board, Nasdaq
Face Competition
From Upstart Firm

By SERENA NG and AARON LUCCHETTI
August 19, 2008

BATS Trading Inc. received approval from the Securities and Exchange Commission to operate a stock exchange that will compete more directly with NYSE Euronext's New York Stock Exchange and Nasdaq OMX Group Inc.'s Nasdaq Stock Market.

Closely held BATS, of Kansas City, Mo., says the BATS Exchange will open in about two months. The company already trades about 10% of the share activity on NYSE and Nasdaq-listed stocks, combined, illustrating the ability of upstart stock markets to take business away from established exchanges that have gone public and focused more on profits.

Launched in January 2006, BATS's electronic trading network has grown quickly by offering heavy discounts on trading fees and promises of faster execution of buy and sell orders. Its owners include affiliates of large banks and Wall Street brokers, including Citigroup Inc., Credit Suisse Group, Deutsche Bank AG, Lehman Brothers Holdings Inc. and Morgan Stanley. It also counts more than 340 firms as subscribers.

BATS, an acronym for Better Alternative Trading System, filed for exchange status in November 2007 after working on the application since early last year.

Operating as an exchange will enable BATS to send out price quotes more quickly and directly to customers. As an electronic communication network, or ECN, it currently disseminates quotes via the National Stock Exchange and the ISE Stock Exchange, a method that some say led to small delays.

"Our timeliness will improve dramatically" as an exchange, said Joe Ratterman, chief executive of BATS. "Our market share is starting to rival other exchanges, and it makes sense to be on the same playing field as our competitors." ECNs traditionally were "not mentioned in the same sentences as exchanges...we were like second-class citizens," Mr. Ratterman added.

BATS executives expect becoming an exchange will help the firm increase market share by three to five percentage points by the end of this year. Its longer-term goal is to reach 25% market share, making it much more of a threat to the established exchanges. In July, BATS traded an average of 969 million shares per day, which compares with the 2.9 billion U.S. shares that Nasdaq traded daily that month and 3.7 billion at the NYSE. Those figures don't count the significant portion of trading activity that brokers conduct off exchanges.

An NYSE spokesman said "we welcome the competition," while a Nasdaq spokeswoman declined to comment.

BATS was founded by David Cummings, a computer programmer who was successful at developing trading strategies. BATS first began trading Nasdaq-listed stocks and later expanded to NYSE stocks.

"Anyone who can come up with 10% market share in two years is obviously a threat" to the larger exchanges, notes Michael Henry, a senior executive in the capital-markets practice at Accenture, the consulting firm. He adds that smaller trading networks, many of which are backed by banks, are claiming to be more nimble than large players at seizing market opportunities.

When it becomes an exchange, BATS may endure more regulatory requirements that slow down certain projects, however. It is adding about a dozen employees to increase its regulatory presence in order to become an exchange.

UPDATE 4-Toronto stocks creep higher as resources get boost

2008-08-19T01:52:00.000+01:00

UPDATE 4-Toronto stocks creep higher as resources get boost

Mon Aug 18, 2008 5:10pm EDT

(Adds details, quotes)

*TSX index ends choppy session little changed

*Financials dragged by worries of credit crunch fallout

*Gold producers rise with bullion price

By Leah Schnurr

TORONTO, Aug 18 (Reuters) - The Toronto Stock Exchange's main index finished slightly higher on Monday as a rise in resource shares offset nagging fears of more fallout from the credit crunch.

In choppy action, the materials sector was lifted 2 percent by gold producers, which rose along with bullion prices and helped to put a floor under the benchmark index.

Gold climbed to end just under $800 an ounce while the U.S. dollar weakened. Traders said Monday's action could be the beginning of a bounce back from recent declines for gold prices. Goldcorp (G.TO: Quote, Profile, Research, Stock Buzz) was up 3.8 percent at C$32.35, while Barrick Gold (ABX.TO: Quote, Profile, Research, Stock Buzz) added 3.3 percent to C$35.06.

The S&P/TSX composite index .GSPTSE closed up 22.67 points, or 0.17 percent, at 13,119.37 after climbing by more than 1 percent earlier in the day. Of its 10 main sectors, half were higher.

The financial-services sector fell 1 percent, tripped up by sliding bank shares in the United States amid anxiety over the possibility of more losses stemming from the U.S. mortgage crisis.

"I think the States is where the biggest problem does come from," said Adrian Mastracci, portfolio manager and president at KCM Wealth Management Inc, in Vancouver.

"There's still just a lot to go and investors don't know where turn or what theory to believe because we've had so much of it - it's like having an avalanche come at you."

Canadian Imperial Bank of Commerce (CM.TO: Quote, Profile, Research, Stock Buzz) slid 1.6 percent to C$60.25, and National Bank of Canada (NA.TO: Quote, Profile, Research, Stock Buzz) lost 2.2 percent to C$48.87.

Worries were stoked by a Barron's report that suggested the U.S. Treasury may recapitalize mortgage finance giants Fannie Mae (FNM.N: Quote, Profile, Research, Stock Buzz) and Freddie Mac (FRE.N: Quote, Profile, Research, Stock Buzz). The Treasury Department said it had no plans to backstop either of the companies. For details, see: [nN18494933].

Shares of Corel Corp bounced higher after falling earlier in the day after the software developer said its majority shareholder had withdrawn its offer to buy out the rest of the company. Corel rose 4.5 percent to C$10.04. See: [ID:nN18443407].

The index has fallen 3.5 percent for August so far and is down more than 13 percent from the record high it reached in June, pushing it further into correction territory as the heavyweight resource sectors have eased.

Joe Ismail, technical analyst at Maison Placements Canada, said the market has become oversold, making a bounce-back likely in the short term.

Ismail added that investors are waiting for quarterly results from the big Canadian banks, which are due next week, to provide direction.

Market volume was 291 million shares worth C$4.8 billion. Decliners outpaced advancers 786 to 672. The blue chip S&P/TSX 60 index closed up 1.90 point, or 0.24 percent, at 782.90.

In New York, stocks were dragged lower by the banks with the Dow Jones industrial average .DJI down 180.51 points, or 1.55 percent, at 11,479.39, and the Nasdaq Composite Index .IXIC down 35.54 points, or 1.45 percent, 2,416.98. ($1=$1.06 Canadian) (Editing by Peter Galloway)

Australia Origin, ASX eye US$ bond issues-sources

2008-08-18T10:48:00.001+01:00

Australia Origin, ASX eye US$ bond issues-sources
08.18.08, 5:06 AM ET

Taiwan court orders Princo to pay Philips for CD-R licensing

2008-08-18T10:47:00.001+01:00

Taiwan court orders Princo to pay Philips for CD-R licensing
Jimmy Hsu, Taipei; Adam Hwang, DIGITIMES [Monday 18 August 2008]

A local court in Taiwan, on August 15, announced its judgment that Princo, a Taiwan-based maker of blank optical discs, must pay Royal Philips Electronics a total of 2.354 billion yen (US$21.1 million) for CD-R licensing. The fees are due for the period from the fourth quarter of 1997 to the fourth quarter of 1999 plus interest for delayed payment, according to Princo's filing with the Taiwan Stock Exchange (TSE) on August 18. Princo has decided to appeal, the company stressed.

In June 1997, Princo signed a licensing agreement to pay a royalty fee of 10 yen per blank CD-R disc to Philips, Sony and Taiyo Yuden, Princo indicated. Princo later felt the rate was unreasonable and thus asked Philips to reduce the charge, but Philips declined. Princo refused to pay the royalty charges starting from the fourth quarter of 1997 and Philips, in response, terminated the licensing agreement in the first quarter of 2000 and filed with the Taiwan courts to recover payment.

Princo filed with Taiwan's Fair Trade Commission (FTC) in 1999 accusing Philips of operating a monopoly, and the FTC judged in 2001 that Philips had violated regulations regarding price fixing and fined Philips NT$14 million (US$447,000).

Princo took FTC's judgment as an excuse to not pay the due royalty fees, but the local court's recent judgment accepted Philips' argument that the FTC's decision covered the regulation of relations between the government supervisory authority and private interest groups only, and had nothing to do with the private licensing contract between Philips and Princo.

Pakistan shares up on resignation

2008-08-18T10:46:00.001+01:00

Pakistan shares up on resignation

Markets had been knocked by the political uncertainty

Pakistan's leading share index has gained more than 4% after President Pervez Musharraf said he would resign.

The move was welcomed by investors, who said it would help to dispel the political uncertainty that has dented markets recently.

The Karachi Stock Exchange benchmark 100-share index climbed by 4.47%.

Political turmoil had pushed the rupee to a record low against the dollar before the weekend, as fears grew that Mr Musharraf would be impeached.

Mr Musharraf faces charges of violating the constitution and gross misconduct.

He said he was confident that the charges against him would not stand.

The economic situation in Pakistan has deteriorated in recent weeks, with inflation reaching its highest in 30 years, the trade deficit widening and reserves falling.

China B-shares close sharply lower; Huaxin Cement falls 10 pct - UPDATE

2008-08-18T10:45:00.001+01:00

China B-shares close sharply lower; Huaxin Cement falls 10 pct - UPDATE
08.18.08, 4:54 AM ET

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Futures point to lower Wall Street start as oil rises

2008-08-18T10:44:00.001+01:00

Futures point to lower Wall Street start as oil rises
By LONDON (Reuters) - Stock futures pointed to a lower opening on Wall Street on Monday as oil prices rise, denting recent optimism over a recovery in consumer spending. 0824 GMT, S&P 500 futures were down 0.38 percent, Dow Jones futures down 0.37

Traders work on the floor of the New York Stock Exchange August 8, 2008. REUTERS/Joshua Lott

* Oil rose more than $1 to top $115 a barrel on Monday, as investors eyed a potential supply threat from tropical storm Fay to oil and gas production in the Gulf of Mexico

* Economic indicators on tap for Monday include the National Association of Home Builders' housing market index for August, due at 1700 GMT, while on the earnings front, retailer Lowe's Companies Inc is due to report results. Investors will be looking for any indications on whether the housing market is bottoming

* Miners will be in the spotlight after BHP Billiton , the world's biggest mining group, posted a 30 percent rise in half-year profit on Monday in line with market forecasts, boosted by Chinese demand

* General Motors Corp has had preliminary talks with Hunan Changfeng Motor Co <600991.ss> on a possible sale of its Hummer brand but the Chinese sport utility vehicle (SUV) maker has backed off, a source with direct knowledge of the matter said

* Mitsubishi UFJ Financial Group (MUFG) <8306.t> clinched a deal to take full control of California bank UnionBanCal Corp , after sweetening its bid 17 percent to $3.5 billion on Monday

* The U.S. Treasury is growing increasingly likely to recapitalize Fannie Mae and Freddie Mac in the months ahead on the taxpayer's dime, Barron's reported in its August 18 edition

Musharraf Quits as President to Avoid Impeachment (Update2)

2008-08-18T10:43:00.000+01:00

Musharraf Quits as President to Avoid Impeachment (Update2)

By Naween A. Mangi and Khalid Qayum

Aug. 18 (Bloomberg) -- Pakistan's President Pervez Musharraf, the dictator who reinvented himself as a U.S. ally against terrorism, resigned to avoid facing impeachment charges for illegally seizing power and mishandling the economy.

``This is not time for individual bravado. I lose or win in impeachment proceedings, the Pakistani nation will be the loser,'' Musharraf, 65, said in a one-hour address to the nation. ``After taking advice from my supporters and friends, I have decided to resign in the best interests of the nation.''

Musharraf's departure after a six-month standoff frees up the coalition government to tackle an economy growing at the slowest pace since 2003, leaving half the population short of food. It will also test the durability of a fragile coalition that has been criticized by the U.S. for not doing enough to fight militants on the border with Afghanistan.

``This is the opportune moment for the government now,'' said Alok Bansal, an analyst at the Institute of Defence Studies and Analyses in New Delhi. ``Unless they show tenacity now, the coalition may splinter.''

The president said he will tender his resignation to the speaker of the house today. He'll be replaced by Mohammedmian Soomro, chairman of the Senate and a Musharraf loyalist, pending a parliamentary vote to choose a new president within 30 days. Pakistan's benchmark stock index rose the most in seven weeks and the rupee gained after the announcement.

Army Commander

Musharraf was the army commander in 1999 when he overthrew Prime Minister Nawaz Sharif, who has led calls to remove the president since returning from exile late last year. Pakistanis were frustrated with a decade of corrupt and ineffective governments under Sharif and Benazir Bhutto, and opinion polls showed 70 percent of people supported the coup.

A former special services commando, Musharraf put Sharif on trial for alleged corruption and in a deal brokered by the Saudi royal family, the two-time former prime minister was sent into exile in Saudi Arabia. Musharraf's government also pursued corruption charges against Bhutto, leading her to remain in Dubai and London until she returned last year, only to be assassinated 10 weeks later. Musharraf didn't say today whether he plans to remain in Pakistan or go into exile.

Under Pressure

The former general has been under pressure to quit since he fired 60 judges, including Supreme Court Chief Justice Iftikhar Muhammed Chaudhry last year, leading to nationwide street protests. The government led by the Pakistan Peoples Party, which came to power in March after defeating pro-Musharraf parties in the Feb. 18 elections, vowed to reinstate the senior judiciary but has been unable to agree on how to do so.

``When he saw impeachment coming, he decided to resign because he couldn't sack the government,'' Sharif's spokesman Siddiq-ul-Farooq said in a telephone interview from Islamabad. ``We hope the judiciary will be reinstated very soon now.''

Pakistan's coalition partners including Sharif and Asif Ali Zardari, co-chairman of the Peoples Party, will meet today to discuss the reinstatement of judges, spokesman Farhatullah Babar said by telephone.

``After a long struggle, democratic forces have won and uncertainty has ended,'' Information Minister Sherry Rehman, a member of the Peoples Party, said. ``Its difficult to give a deadline for the reinstatement of judges.''

Handed Control

Musharraf assumed the presidency in 2001 and was re-elected by parliament in October. Opposition parties claimed the law barred Musharraf from standing while he still headed the military. Musharraf handed over control of the army to Ashfaq Parvez Kayani in November.

After the attacks of Sept. 11, 2001, Musharraf abandoned the Pakistani army's long sponsorship of the Taliban regime in neighboring Afghanistan and allied with the U.S. His government was the largest recipient of U.S. aid in Asia after Afghanistan, amounting to more than $10 billion in six years.

Musharraf was credited for steering Pakistan's economy out of trouble in 1999 when the government had less than $1 billion in foreign exchange reserves. He brought in former Citigroup Inc. executive Shaukat Aziz to run the finance ministry and the nation's economy expanded at an average annual 7.5 percent in the four years ending June 30, 2007.

The benchmark Karachi Stock Exchange gained 10-fold since 2001 and investment from overseas corporations including China Mobile, Standard Chartered Plc and Emirates Telecommunications Co, reached a record $8.4 billion last year.

The main stock index, which has fallen 24 percent this year, rose 4.5 percent to 10,719.62. The rupee rose 1.1 percent to 75.60 against the U.S. dollar, paring its 22 percent decline this year.

Faced Criticism

Since January, Musharraf has faced criticism for a slowdown in economic growth, a widening budget deficit and an inability to reign in inflation running at a 30-year high.

In the speech, Musharraf denied charges his policies had stunted economic growth, calling allegations against him ``baseless.''

The coalition government ``may succeed in removing me but it can damage the country,'' Musharraf said in the speech. ``I deny the charges that economic crisis is caused by policies of my government in the past nine years.''

At an electronics store less than a mile from Musharraf's office, a dozen men applauded when he announced his resignation.

``We are very conscious that problems will remain with us,'' said Khurram Mughal, a lawyer from Rawalpindi, who stopped in the store to watch the speech.

Peace Process

As president, Musharraf started the India-Pakistan peace process by initiating a cease-fire across the border in October 2003 and pushing several so-called confidence-building measures including bus services and cultural exchanges.

``I don't think any other leader would have had that kind of commitment,'' said Suba Chandran, deputy director of Institute of Peace and Conflict Studies in New Delhi. ``He is the person behind the peace process and he was the first Pakistani leader to reorient Pakistan's policy toward Kashmir and ensure intra-Kashmiri interaction. His leaving would create a void.''

Musharraf considers himself a religious moderate who enjoys playing bridge and listening to classical music. He preached ``enlightened moderation'' as a way forward for Pakistan, the world's second most populous Muslim nation after Indonesia.

During his tenure, Musharraf survived at least four assassination attempts by Islamic extremists since he ended support for the Taliban regime.

Emigrated to Pakistan

The former army chief was born on Aug. 11, 1943, in Delhi, emigrating to Pakistan after the partition of the subcontinent in 1947 at the age of five. He lived in Turkey from 1949 to 1956 where his father was a diplomat. He attended St. Patrick's school in Karachi and then joined the army, graduating from the Pakistan Military Academy.

Musharraf was commissioned in the artillery regiment of the army in 1964 and later joined the Special Services Group as a commando, according to his profile released by the army. After serving in two wars with India -- in 1965 and 1971 -- he became a general in 1991 and chief of the army in October 1998.

He has been frequently criticized by the U.S. for ``not doing enough'' to fight terrorists hiding along the Pakistan- Afghanistan border. As many as 2,000 people were killed in suicide attacks and other bombings in Pakistan last year.

``Pakistan's economy is in a poor condition, politics is in complete chaos and there's a rise in militancy and violence,'' said Jawaharlal Nehru University's former professor Bahadur. ``He was personally tolerant and liberal but his positive contributions are not enough to overshadow his negative ones.''

To contact the reporter on this story: Naween A. Mangi in Karachi, Pakistan at nmangi1@bloomberg.net; Khalid Qayum in Islamabad at kqayum@bloomberg.net.

Last Updated: August 18, 2008 05:18 EDT

Komatsu Shares Rise After Nikko Citi Lifts Rating (Update1)

2008-08-18T10:41:00.000+01:00

Komatsu Shares Rise After Nikko Citi Lifts Rating (Update1)

By Masumi Suga

Aug. 18 (Bloomberg) -- Komatsu Ltd., the world's second- largest maker of earthmovers, rose the most in a month in Tokyo trading after Nikko Citigroup Ltd. raised its rating, saying the current price is ``a good investment opportunity.''

The shares rose 3.8 percent to close at 2,445 yen on the Tokyo Stock Exchange, the biggest gain since July 22. Komatsu is down 20 percent this year, compared with a 14 percent decline in the Nikkei 225 Stock Average.

Nikko Citigroup analyst Yoshinao Ibara upgraded his rating to ``buy'' from ``hold,'' saying the company is countering risks of a slowdown in developed countries by tapping demand from ``resource-rich countries'' including Australia and in Central and South America, Asia, and the Middle East.

``Komatsu has established a business platform in a wide spectrum of emerging economies,'' Ibara said in a report dated Aug. 15. ``Business expansion in resource-rich countries in particular will continue to drive earnings.''

To contact the reporter on this story: Masumi Suga in Tokyo at msuga@bloomberg.net.

Last Updated: August 18, 2008 02:35 EDT

Athens Stock Exchange opening: Rise

2008-08-18T10:40:00.002+01:00

Athens Stock Exchange opening: Rise

Πηγή: ΑΠΕ 18/08/08-11:02

Equity prices were rising at the opening of trade on Monday on the Athens Stock Exchange (ASE), with the basic share price index up 0.65 percent, standing at 3,319.59 points at 10:45 a.m., and turnover at 15.9 million euros. Individual sector indices were moving mostly upward, with the biggest gains in Food & Beverage, up 3.34 percent; Public Utilities, up 1.20 percent; and Travel & Recreation, up 1.02 percent. The biggest losses were in Insurance, down 1.13 percent; Chemicals, down 0.20 percent; and Industrial Products, down 0.05 percent. The FTSE/ASE 20 index for blue chip and heavily traded stocks was up 0.89 percent, the FTSE/ASE MID 40 index was up 0.33 percent, and the FTSE/ASE-80 small cap index was up 0.12 percent. Of the stocks moved, 58 were up, 23 were down, and 37 were unchanged. (Source: ANA-MPA)

Aderans Shares Tumble as Wigmaker Cuts Profit Target (Update2)

2008-08-18T10:40:00.001+01:00

Aderans Shares Tumble as Wigmaker Cuts Profit Target (Update2)

By Akiko Ikeda and Kiyotaka Matsuda

Aug. 18 (Bloomberg) -- Aderans Holdings Co. plunged the most in 10 months in Tokyo trading after the Japanese wigmaker cut its profit forecast citing a slump in sales.

Aderans tumbled 191 yen, or 9.7 percent, to close at 1,770 yen, on the Tokyo Stock Exchange, the sharpest slide since Oct. 12. Aderans had the sixth-largest drop among 1,718 companies on the Topix index.

The Tokyo-based company cut its net income forecast for the year ending Feb. 28 by 78 percent to 500 million yen ($4.55 million), as spending cuts on advertising and administration failed to offset slumping sales in Japan and the U.S., it said on Aug. 15. It earned 590 million yen a year earlier. The change marked expectations of the company's new leaders after its previous management was voted out.

``It was necessary for the newly appointed management to make a clear break with the former executives by revising earnings forecasted by them,'' Yoku Ihara, head of equity research at Retela Crea Securities Co., said by phone today.

New York-based Steel Partners, led by Warren Lichtenstein, voted out Aderans Chief Executive Officer Takayoshi Okamoto and six directors on May 29, the first time a foreign fund ousted management at a publicly traded Japanese company. Steel Partners owned about 27 percent of the company's shares, making it the biggest shareholder, as of Feb. 29, according Bloomberg data.

Consumption Drop

``Decline in personal consumption was sharper than expected,'' said company spokeswoman Kaoru Kondo. ``Confusion in our management organization may have affected our customers emotionally.''

Aderans cut its sales forecast for its domestic core business by 2.1 billion yen to 37.7 billion yen and its Fontaine business, which offers ready-made wigs for women, by 1.3 billion yen to 11.3 billion yen, Kondo said. The company reduced its sales outlook for its hair-transplant business in the U.S. by 6 billion yen to 159.4 billion yen.

``We are not surprised by the slump in the domestic order- made wig operation, but the profit decline in the Fontaine operation was steeper than we had assumed,'' UBS AG analyst Mariko Watanabe wrote in a report dated Aug. 16. Watanabe rates Aderans shares ``neutral.''

The stock has risen 0.5 percent this year, compared with a 14 percent drop in the benchmark Topix index.

To contact the reporters on the story: Akiko Ikeda in Tokyo at iakiko@bloomberg.net; Kiyotaka Matsuda in Tokyo at kmatsuda@bloomberg.net.

Last Updated: August 18, 2008 03:20 EDT

Markets likely to see a rally this week

2008-08-17T22:57:00.000+01:00

HT Correspondent

New Delhi, August 17, 2008

First Published: 21:48 IST(17/8/2008)

Last Updated: 22:23 IST(17/8/2008)

Markets likely to see a rally this week

If crude oil doesn’t play spoilsport, the stock market could see a rally this week on the back of several government decisions that are seen boosting investors’ sentiment.

Last Thursday, the finance ministry allowed private provident funds to invest up to 15 per cent in equities and exempted developers of ultra mega power projects from paying any excise duty on equipment purchased for such projects.

Also, the Cabinet approved hefty salary hikes for the five million employees of the government, which is expected to boost demand for consumer goods ahead of festive season.

All of these, analysts said, would have a positive impact on the market, which slipped from a recovery track through last week.

The Bombay Stock Exchange’s benchmark index, Sensex, lost over 700 points, or about 5 per cent, through the past week, while the 50-share Nifty index of the National Stock Exchange fell nearly 100 points.

“Markets next week should improve,” said P.K. Agarwal, head of research at Bonanza Portfolio, a brokerage firm. “In case oil prices stay soft, we might even find Nifty taking out the strong resistance of 4,650-4,680 points.”

The decision to allow more PF money into equity is expected to contribute the most. “If a higher percentage of savings comes into the market, it would propel the market and will curtail volatility in the market,” said Anup Bagchi, executive director, ICICI Securities.

Currently, less than 5 per cent of the gross domestic savings are invested in stocks.

The regulator for the New Pension System, which applies to government employees who have joined after October 1, 2004, has shown interest in adopting the same investment pattern as has been allowed for private provident funds. It is also expected to be emulated by the Employee Provident Fund Organisation, which has recently allowed independent asset management companies to mange incremental contributions to its corpus.

“These are small but critical steps and will act as a stabilising force for the market in the long run,” Bagchi said.

`Institutions will have to pay 100% for IPOs soon`

2008-08-17T22:52:00.003+01:00

`Institutions will have to pay 100% for IPOs soon`

SEBI CHIEF C B BHAVE COMPLETES SIX MONTHS IN OFFICE

Rajesh Bhayani / Mumbai August 18, 2008, 0:33 IST

Primary market reforms have been on top of the agenda of Securities and Exchange Board of India (Sebi) Chairman Chandrasekhar Bhaskar Bhave, who completes six months in the hot seat today.

Bhave, 58, talks to Rajesh Bhayani on his agenda for initial public offer (IPO) reforms, self-regulation for brokers, currency futures and more. Excerpts:

There were expectations that Sebi would introduce some changes in the participatory notes guidelines. What’s the status?

The Board did review the matter, but no decision was taken. So it’s status-quo.

There have been complaints about foreign institutional investors (FIIs) lending their stocks overseas to enable foreign entities to short-sell. Your comments?

We have received representations regarding FIIs lending stocks in the over-the-counter market overseas. On the safety of the borrower or the lender, Sebi isn’t concerned as both are outside Indian jurisdiction. We are examining the impact of such deals on the Indian market and regulatory requirements.

We have to keep in mind that the Indian market has accepted the need for lending/borrowing and the consequent short-selling as a desirable feature.

Stock lending and borrowing has not picked up in the Indian market. Don’t you think they need to be changed?

Based on the representations we received, we have asked the stock exchanges to give their comments and tell us what changes they require. We will decide after we receive their recommendations.

One of your most important initiatives is IPO reforms. What is the status?

Sebi wants to reduce the time gap between the closure of an issue and its listing. This process is aimed at removing refund-related concerns and the grey market in IPOs.

As a first step, we have proposed that the application money can be debited only after shares are allotted. Some banks are ready with their software and are testing their systems internally as well as with the stock exchanges and registrars.

We will start the new system when four to five banks are on board. We will implement it first as a pilot project and the old method of payment will be available as well. Making it mandatory will take some more time. The issuer will have to provide this option in the prospectus when we are ready to start the new system.

What about asking institutional investors to make full payment along with their IPO applications?

Once we test the new system with a few issues and find it all right, we will make it mandatory for institutional investors to make full payment along with IPO applications.

This will not take long because the number of institutions is relatively small and institutions can pay the full amount either by cheque or can avail of the blocked account facility. This can be sooner than expected.

What’s your view on the recent resignations in the Bombay Stock Exchange?

Sebi will not intervene in the management issues of an exchange. Resolving the issues is the responsibility of the exchange board. We will act only if any regulatory issues are thrown up.

But isn’t it affecting BSE’s listing and other plans?

Sebi is not hindering anyone’s plans who follow the norms. BSE has not applied for an IPO, but they want to get listed without IPO. We are examining if it is good to do so. The question is, why do they want us to make an exception? We have no issue if they float an IPO and get listed.

There are concerns about price rigging on the first day of listing. Do you think there should be circuit filters on the first day?

Circuit filters are applied on a base price and if there is no base price that itself can give rise to problems of a share getting stuck in circuit filters day after day. So we have taken the view that it is better to let the market find the price. If there are any manipulations, the entities involved should be punished.

Are you in favour of regulating private equity players?

Typically investors are not regulated; intermediaries are regulated. So the question is, as PE funds do they need registrations? Probably not. As investors, they should be free to carry on their activities as permitted by law. The issue would arise only if they raise funds from Indian retail investors. We will then have to address the issue of investor protection.

Investors in mutual funds are rising. Do you think there is a need to relook MF investment norms?

We have appointed an advisory committee headed by SA Dave that will consider all the issues raised by different stakeholders, including trustees and investors.

We are discussing the issues with AMFI, which is a body of asset management companies. We are also organising a meeting with MF trustees to discuss their concerns.

What is Sebi doing for investor education?

Investor education is a continuous and a mammoth exercise. Even developed country regulators tell us that there are gaps in investor education in their countries. Investor seminars, informative material on the web-site, encouraging stock exchanges and depositories to take up such initiatives and supporting investor organisations are some of our efforts.

The decision on a self regulatory organisation (SRO) for market intermediaries is pending. What’s Sebi’s view?

The World Bank has been commissioned to study the issue and will also look at the practices in other parts of the globe. We are also studying our internal environment. We have received some representations that Sebi’s SRO regulations are not conducive.

Some of the provisions like Sebi nominating half of the SRO board members are seen as obstacles. We also have to see whether the conditions in the market are appropriate for an SRO.

For example, if we have an SRO for brokers, then the brokers would be subject to inspection by Sebi, exchanges as well as the SRO. Are we increasing the regulatory burden on brokers? These are vital issues.

When do you expect currency futures trading to start on the exchanges?

We have given the first in-principle approval and expect the others to get ready soon. It would be fair to say that it would start in a month’s time.

What about interest rate futures?

RBI has already published the final report on the subject. A joint committee of RBI and Sebi will look into the issue of operationalising the report recommendations.

NSE to conduct mock trading in currency futures

2008-08-17T22:52:00.001+01:00

NSE to conduct mock trading in currency futures

Mumbai (PTI): National Stock Exchange will start holding mock trading in currency futures from later this week, official sources said.

The exchange was given an in-principal approval by the market regulator SEBI to set up a separate segment for currency futures on August 12.

Currency futures which are used as an hedge against foreign exchange risk is a contract to exchange one currency for another at a specified date in future at an exchange rate that is fixed on the purchase date.

Presently, trading in currency futures takes place in the spot market. It will be for the first time currency futures will be allowed to be traded on an exchange with even speculators allowed to build positions.

The NSE would hold mock trading for about a week. When asked when would regular trading in currency futures star sources said a logical extention of mock trading will be live rading which will be very soon.

The exchange is expecting good volume in this new class of market segment with even retail investors expected to participate.

Sources said that banks are also very keen on this product and are expected to participate in a big way.

"Market is waiting for a product like this. It is a new asset class for brokers to trade," a source said.

The NSE has invited applications for membership to the currency derivative segment. The membership is open to the existing members of NSE, members of NCDEX, a commodity exchange co-promoted by the NSE and banks among others.

Budapest Stock Exchange index slightly up last week

2008-08-17T22:49:00.003+01:00

Budapest Stock Exchange index slightly up last week

Budapest, August 17 (MTI) - The Budapest Stock Exchange BUX index increased slightly, by 0.13 percent, this past week to close at 20,996 points on Friday.

The index has declined by 5,240 points, or 20 percent, since the start of this year.

Total exchange turnover decreased to 83.4 billion forints (EUR 348.5 million) from 117.8 billion forints (EUR 497.8 million) during the preceding week.

The BUMIX index, reflecting the rates of low- and medium-capitalisation stocks, fell by 1.91 percent, to 2,272 points.

Two of the five blue chips firmed, one stagnated while two dropped during the week.

Magyar Telekom (telecommunications) advanced 2.64 percent to 815 forints. Drug-maker Richter firmed 5.61 percent to 34,245 forints.

Peer Egis, the loser of the week, went down by 6.03 percent to 13,800 forints.

OTP Bank actually stagnated, losing merely 2 forints to end at 6,778 forints.

The shares of fuels company Mol declined by 3.58 percent to 17,360 forints. OTP Bank accounted for 48 percent, Mol for 30 percent, Richter for 11.5 percent and Magyar Telekom for 7.5 percent of all transactions.

Oil's down, stocks are up, but uncertainty remains

2008-08-17T22:49:00.001+01:00

Oil's down, stocks are up, but uncertainty remains

By MADLEN READ – 3 hours ago

NEW YORK (AP) — The past four weeks on Wall Street have been quite a welcome contrast. Stocks have risen, the dollar has strengthened and oil prices have plummeted.

Investors are not sure yet, however, if it's a turnaround with staying power or just a temporary reversal.

Market bears would argue that economic readings are still weak, particularly for the average U.S. consumer. Other countries' economies are declining, too, and the credit markets that companies rely on to borrow and lend remain tight.

But on the more positive side, prices for commodities including oil are much lower than they were a month ago. The housing market, though probably not due for recovery anytime soon, is showing signs of bottoming. And the stock market tends to rebound before the economy does.

It's easy to argue both sides; it's harder for an investor to decide where to put his money. That's why many market analysts are predicting that stocks are going to stay volatile for a while longer.

Back-and-forth movements are typical when the market is trying to put in a bottom, said Scott Wren, equity strategist for Wachovia Securities. Plus, he said, "you're getting a lot of mixed news."

Last week, after seesawing, the Dow Jones industrial average finished down 0.63. The Standard & Poor's 500 index ended the week up 0.15 percent, and the Nasdaq composite index rose 1.59 percent.

This week, investors will keep monitoring the energy markets, and also see how the housing industry is faring in the National Association of Home Builder's index on Monday and the Commerce Department's Tuesday report on July new home construction.

At the same time, Wall Street will be gauging the financial health of consumers in the earnings reports of retailers including Home Depot Inc., Target Corp., Gap Inc. and BJ's Wholesale Club.

Consumers have been buying fewer items, in general, because prices have been rising. Last week, the Labor Department reported a hefty 0.8 percent increase in consumer prices for July.

Wall Street's hope is that the pullback in oil will alleviate some of these pressures — but some economists believe that even if commodities stay down from their recent highs, it won't be enough to shield consumers from unmanageable prices.

"It's too early to be overly confident about the economy," said Dan Laufenberg, chief economist for Ameriprise Financial. "I still think inflation is the greatest risk to the economy."

He noted that while oil prices are down sharply from their mid-July record, they are still about 50 percent higher than a year ago. Moreover, he said, "inflation is starting to spill over into other goods and services."

And because the job market tends to influence consumer spending even more than home, fuel or food prices, Wall Street has been nervous that the job market has shown few indications that it is improving.

The Labor Department disappointed the market last week when it reported a smaller-than-anticipated decline in the prior week's claims for unemployment. Another downbeat reading on unemployment this week could worry investors even more.

And lastly — though certainly at the front of investors' minds — is the situation with the still-stumbling global banking system. Banks such as JPMorgan Chase & Co. and UBS AG last week augured further credit losses, while banking industry analysts reduced their earnings estimates again in anticipation of more dismal profits in the third quarter.

"A year from today, we'll still be talking about financial problems. It's not going away," said Alexander Paris, economist and market analyst for Chicago-based Barrington Research. "You're going to have a lot more bank failures."

But, he added, the stocks of financial services companies have fallen so much already, and the banks themselves have written down the value of their investments by more than $300 billion and racked up a heap of credit losses.

"At some point," he said, "bad news is all discounted."

China South Loco steams to debut

2008-08-17T22:47:00.001+01:00

China South Loco steams to debut

By Andrew Wood in Hong Kong

Published: August 17 2008 21:37 | Last updated: August 17 2008 21:37

Shares in China South Locomotive & Rolling Stock are expected to make a strong debut when they start trading this week in Shanghai and Hong Kong in spite of sharp falls in both stock markets this year.

China Southern Railway (CSR), as China’s largest train maker is also known, raised a total of $1.5bn in a dual Shanghai and Hong Kong share offering. Its shares are expected to benefit from a low initial public offering price as well as a good outlook for China’s rail sector.

A Reuters’ survey of analysts said CSR’s shares could rise as much as 60 per cent when they debut in Shanghai on Monday and by about 30 per cent when they start trading in Hong Kong on Thursday.

The strong forecasts come even though stock markets round the world have fallen sharply this year in the wake of the US subprime crisis.

Shanghai’s market, which closed at 2,450.61 on Friday, is down 50 per cent so far this year and is off 60 per cent from its peak last October. Hong Kong’s benchmark Hang Seng closed at 21,160.58 on Friday, its lowest point in five months.

Many Asian companies have postponed or abandoned IPOs this year, as investor appetite for new issues has dwindled. Poor market sentiment delayed a share offering for China State Construction Engineering, which was approved in June and could raise as much as $6bn.

Some investors had hoped Beijing would announce measures to boost the stock market ahead of the Olympics. However, none materialised and the Shanghai composite index continued to fall as the games got under way.

The market hit its lowest level since December 2006 last week, wiping out all of the gains made during the bull market of 2007.

Market observers say there is strong interest in China’s railway sector. China Railway Construction, for example, raised $5.4bn in a dual public offering in Hong Kong and Shanghai in March, as investors looked forward to a building boom.

Based on its Shanghai IPO, CSR’s shares are valued at about 16 times the company’s forecast earnings. That is low compared with international rivals Alstom, which has a price-earnings ratio of 21 times, and Canada’s Bombardier at 27 times.

“The market environment has been challenging but good companies are still seeing genuine demand,” said Jing Ulrich, chairman of China equities at JPMorgan Securities in Hong Kong. “Several sectors are still active. We are seeing accelerated interest in anything that’s related to railways.”

China’s present five-year plan allocates Rmb1,250bn ($180bn) of capital expenditure to railways – quadruple the amount in the previous period – and so far just 27 per cent of the money was spent in 2006 and 2007, according to Julius Baer, the wealth managers.

ABC targets stock market with Crossfield buyout bid

2008-08-17T22:46:00.003+01:00

ABC targets stock market with Crossfield buyout bid

Written by Washington Gikunju

Trading at NSE
August 18, 2008: A consortium of investors led by ABC Bank are on the verge of buying out stockbrokerage firm Crossfield Securities as thinning margins in niche services push players to providing financial services under one roof.

In the latest of a growing list of acquisitions of cash-strapped stockbrokers by banks, only a few formalities remain before the investors can acquire the broker that has been the subject of takeover speculation for almost three years.

The ABC Bank chief executive, Mr Shamaz Savani, confirmed last week that the bank’s board of directors had approved the takeover deal, subject to financial due diligence that is under way and regulatory approvals.

NIC Bank concluded its acquisition of Solid Investment Securities through its investment bank subsidiary NIC Capital early this year, while Chase Bank bought out collapsed stockbroker Town and Country mid this year and renamed it Genghis Capital.

Mr Savani said ABC Bank’s investment management subsidiary, ABC Financial Services, was set to buy a 51 per cent stake in Crossfield, while the bank’s chairman and founder, Mr Ashraf Savani, would hold 20 per cent shares in Crossfield in his personal capacity.

Two holding companies, Nanda Properties and Zena Investments, will respectively own 15 per cent and 14 per cent shares in the brokerage firm.

Crossfield Securities was one of six stockbrokers issued with a three-month conditional licence by the CMA earlier this year due to what Mr Savani describes as negative cash positions highlighted through overdrawn accounts.

The broker’s licence for this year was later renewed as were those of five others who had been given the conditional licence extensions.

Analysts have supported the commercial banks’ foray into stockbroking, saying that the Central Bank (CBK) regulated institutions are likely to restore sanity into a sector that has lately lost credibility due to invasion by ‘rogue’ stockbrokers.

Two stockbrokerage firms, Francis Thuo and Partners, and Nyaga Stockbrokers have gone under within a space of one year, sinking with them an estimated Sh1.1 billion of investors’ money at the Nairobi Stock Exchange.

The CMA has acknowledged that both firms were involved in unauthorized selling of investors’ shares.

The consortium of investors and their lawyers have been working out the finer details of the deal for the last one month culminating in the signing of a preliminary memorandum of understanding last Friday.

ABC has commissioned three of its former staffers to conduct due diligence on the brokerage firm, a process that Mr Savani says is now in its latter stages.

The former Crossfield chief executive, Mr Krishna Kumar, has been replaced by Mr Fred Maina, a former long serving head of operations at ABC Bank.

Mr Maina also has a shareholding interest through one of the two holding companies, together with other ABC Bank members in their personal capacities.

Mr Savani said preliminary audit shows that Crossfield was slipping deeper into the loss-making territory and is currently in urgent need of capital injection.

The ABC Bank CEO, however, declined to disclose financial details of the transaction, saying a reliable figure could only be established after conclusion of the ongoing audit of the broker’s books.

A member of the investment consortium, who did not want to be quoted, had earlier hinted that Mr Kumar, the former CEO, had signalled an asking price of Sh171 million in the early stages of the negotiations.

The final purchase price of the firm has, however, remained a sticking point in the takeover talks owing to an unexpectedly long list of liabilities that Crossfield is said to have had.

A group of external auditors have also been called in to verify an estimated Sh100 million outstanding claims bill against the firm. Crossfield is ranked among the smallest stockbrokers at the Nairobi Stock Exchange (NSE).

Mr Shamaz Savani

Inadequate management capacity and weak internal controls have been found to be the key drawbacks for brokers in this segment.

Equity turnover statistics from the NSE show that Crossfield was among the bottom three firms at the bourse with a turnover of Sh754 million in the six months to June this year, accounting for only 0.66 per cent of total turnover of Sh113.8 billion in the same period.

For close to two years, Crossfield has recorded a negligible growth in its clientele base, and has mostly relied on customers channelled through the firm by Tsavo Securities, a stocks agent that has no direct access to the NSE trading platform.

Tsavo Securities managing director Fred Mweni has previously laid ownership claims on 51 per cent of Crossfield, saying he had placed a lien on the stock. However, ABC distanced itself from assertions by Mr Mweni that the two could be acting in concert.

A section of the stockbrokers are also understood to be uncomfortable with the Sh171 million sale price, a figure that is below the NSE’s current valuation of a stockbrokerage seat at Sh251 million.

The investor said that NSE and CMA are keen on preserving the minimum valuation of a stockbrokerage seat with a view of selling more seats to compensate Nyaga Stockbrokers clients who lost their money after the firm collapsed in March this year.

A similar initiative was applied last year when collapsed stockbroker Francis Thuo and Partners’ seat was sold off to Renaissance Capital for Sh251 million and the money used to compensate investors.

With investor claims from Nyaga estimated to have hit Sh1 billion, market regulators are said to be facing a headache on possible bail out options if only to safeguard investors’ confidence in the capital markets.

Association of Kenya Stockbrokers (AKS) chairman, Jos Konzolo, however said stockbrokers could not oppose a private treaty between a willing buyer and seller. He added that the valuation of seats at the NSE depended on prevailing circumstances at the time of valuation.

NIC Capital paid an estimated Sh150 million for a 58 per cent stake in Solid Investments while the Chase Bank purchase price for Genghis Capital has never been made public.

The CMA confirmed that it had received notification that Crossfield was in takeover talks with a group of investors.

“We are aware that Crossfield is in takeover discussions with some parties,” said CMA corporate communications and market development manager Samuel Njoroge.

CMA has given stockbrokers three years to raise their paid-up capital to Sh50 million from the current Sh5 million minimum requirement while investment banks are required to increase their minimum capital to Sh250 million from the current Sh30 million.

If successful, the Crossfield deal could help ABC realize its ambition of setting up a financial services supermarket in line with ongoing convergence of financial service providers.

Only last year, the bank secured a licence from CMA to offer investment management services. ABC has an asset base of Sh6.1 billion which makes it a mid-tier bank by local standards.

The bank recorded double digit growth in the 2007 financial year, with its customer deposits going up by 24 per cent to Sh5 billion.

Fees and commissions income went up by 56 per cent to Sh195 million over the previous financial year as the net interest income increased by 17 per cent to Sh410 million; driving its pre-tax profits by 32 per cent to Sh185 million.

While the local trend is a general shift towards mass market banking, ABC has stuck to its tested formula of relationship banking, which basically entails attracting and retaining a cliché of loyal, high net worth clients.

The bank specialises in corporate banking, business/SME banking, personal banking and institutional banking and has a geographical spread of nine branches in Nairobi, Mombasa, Kisumu, Eldoret, Nakuru and Meru.

The corporate department has its own relationship managers, cash management specialists, trade finance experts and a treasury specialist.

A stockbrokerage arm is expected to fit neatly with ABC’s ambition to become a one-stop shop for its conservative clientele who, as Mr Savani admits, are always willing to pay a premium for any value addition services offered.

Hurdles to cross

2008-08-17T22:45:00.000+01:00

Hurdles to cross

Vishal Chhabria & Ram Prasad Sahu / Mumbai August 18, 2008, 3:15 IST

The going gets tough for banking, auto and realty sectors in the next six months. Invest, but with a long-term perspective.

Inflation and interest rates, typically, go hand-in-hand, except for some short-term divergence. Central bankers the world over use ‘interest rates’ as a tool to keep a tab on the country’s inflation rate.

This is exactly what India has seen—the Reserve Bank of India has at different time intervals (more frequently in the last 12-15 months) hiked the repo rate (at which it lends to banks) as well as the cash reserve ratio (CRR; the portion of interest free balance that banks are mandated to keep with RBI.)

While these moves increase the cost of funds for banks, it also means higher costs for corporate and retail customers. Higher rates mean lower affordability and, thus the impact on demand for goods and services, as well as profitability of companies and banks.

With inflation rate on an upward trend (now at its 13-year high of 12.44 per cent) and expected to rise to over 13 per cent over the next two months, experts (economists and analysts) believe that the RBI may hike rates further.

On the other hand, sectors that tend to get impacted more when interest rates move up have seen stock values inch up faster recently.

The BSE Bankex and BSE Realty indices are up 27.8 per cent and 22.4 per cent, respectively in the last one month (since July 16), as compared to the 17.1 per cent rise in the value of the BSE Sensex. Even the BSE Auto index is up by 15.9 per cent in the last one month.

Although these sectors had also underperformed since January 2008, some argue that the market is reading beyond two quarters, wherein it expects inflation (and interest rates) to bottom out by December 2008 and start declining from early 2009. But, whether that happens or not will depend on various factors including global commodity prices among other things.

In the light of various developments, The Smart Investor takes a look at the three interest rate sensitive sectors viz. auto, banking and real-estate, and provides an insight into the current state of affair and their fortunes going forward.

BANKING

Pain to continue in the short-term
Banking stocks have seen significant underperformance as well as outperformance vis-à-vis the popular indices in different time periods during the last seven months.

The earlier underperformance (January 2008 to mid-July) is due to known factors like rising interest rates and inflation, slowing credit growth, pressure on net interest margins (NIMs) and potential threat of rising non-performing assets (NPAs), which is also visible in the performance for Q1 FY09 (ended June).

However, their outperformance (Bank Nifty up 34.8 per cent; Nifty up 18.7 per cent since July 16) in the last one month is not backed by an improvement in fundamentals.

Explains a banking analyst, “The change in sentiment is consequent to the softening in commodity prices (including crude oil) globally, marginal decline in domestic bond yields and, hopes of acceleration in banking reforms and moderation in inflation.”

But, the ground reality hasn’t changed much, especially inflation, which is only expected to remain high till December 2008.

Says Manish Karwa, senior vice president, research, Motilal Oswal Securities, “Inflation is likely to remain high for some time, and we don’t expect any softening in interest rates till then. We may possibly see some more tightening by RBI.”

Given the low base of inflation during second half of last year, inflation is only expected to inch up to beyond 13 per cent. And, the recent tightening (CRR and repo rates) by RBI would also have a lag effect on economic growth rates.

All these only suggest that the performance of the banking sector is likely to remain under pressure and this euphoria is thus likely to be short-lived. No wonder, many analysts echo the same view, “there is some more pain left, before things improve for banks.”

They are not excited about the short-term (4-6 months) prospects of the banking sector with some suggesting that the RBI is likely to tighten the noose further, by raising repo rates and CRR.

This anticipated move is expected to further increase the cost of funds for banks. Should that happen, banks could see further pressure on margins, perhaps higher customer defaults, higher losses on trading (bond) portfolio and a slowdown in business itself. The silver lining is that the prospects for the sector look good in the long run.

Margins: Under pressure
The RBI has raised the repo rate (125 bps in last 12 months) and CRR, both of which are currently around 9 per cent levels. These moves have increased the cost of funds for banks.

Since interest rates on deposits have also moved up to 10 per cent (one-year deposits), the highest in nearly over five years, there are high chances of customers moving their surplus current and savings (CASA) deposits to fixed (term) deposits, thereby further increasing the cost of funds for banks.

Analysts say that in a rising interest rate scenario, banks with a high CASA ratio are better placed vis-à-vis those with a lower CASA metric. That’s because, CASA deposits attract low interest rates (interest on current account balance is nil, while on savings account it is 3.5 per cent per annum).

They estimate that an increase of 100 basis points in CASA can improve NIMs by 10 basis points; as cost of CASA deposits remains constant even as lending rate charged to customers rises.

On the other hand, while the banks have resorted to hiking their respective prime lending rates (PLR), analysts expect the pressure (though not significant) on the NIMs to continue in Q2 FY09.

Thereafter, NIMs could stablise and perhaps improve from Q1FY10. Some of this pressure could also be offset considering that some banks have increased their deposit rates by a lower margin, and thus provide a surprise (beat estimates).

KEY NUMBERS
Rs crore	TTM ended June 2008				Price (Rs)	P/BV (x)	NIM (%)	CASA (%)
Rs crore	Net Interest Income	% Chg	Net Profit	% Chg	Price (Rs)	P/BV (x)	NIM (%)	CASA (%)
Axis Bank	2,975	81.2	1,226	71.8	700	2.86	3.4	39.8
HDFC Bank	5,966	61.4	1,733	41.7	1,175	3.62	4.1	44.9
ICICI Bank	7,915	28.9	4,527	24.1	673	1.61	2.4	27.6
Indian Bank	2,080	9.0	1,014	28.1	111	1.05	3.2	33.8
PNB	5,698	4.4	2,156	28.7	466	1.36	3.3	41.3
SBI	17,638	4.3	6,944	25.3	1,458	1.88	3.0	41.2
Union Bank	3,105	7.4	1,281	41.7	138	1.24	2.7	34.8
Source: BS Research, Analyst report

Asset quality & treasury income: Under stress?
The other area of apprehension is the threat of rising NPAs, which though will vary depending on the portfolio quality of individual banks.

Says an economist, “In any downturn, the asset quality tends to deteriorate. But, unlike in the past, the recovery systems for banks (including debt recovery tribunal, implementation of SARFESI Act, etc) are much stronger.”

Adds Tridib Pathak, CIO, Lotus AMC, “In a slowdown, NPAs can increase, which is a cyclical risk. But, are there signs of any secular deterioration? Certainly not!”

Economists explain that defaults are largely seen in non-collateral areas (mainly retail) like credit cards, personal loans, etc. Out of the retail assets, which form about 25 per cent (average) of total advances, about 18 per cent comprises housing loans, which are backed by assets.

And, the remaining seven per cent comprises of auto loans (backed by vehicle as a security), credit cards, personal loans, etc. Thus, in a worse case scenario, the defaults will be within manageable limits.

On the other hand, with interest rates on the rise and a good chance of RBI hiking rates further, banks may have to provide for the fall in bond values (held in available for sale (AFS) category), thus impacting profits over the next one-two quarters. But, the same would get reversed (since it is a book entry) thereafter, as interest rates decline.

Growth rates: Seen slowing down
Higher interest rates mean lower affordability and hence, are expected to lead to slower growth in retail and corporate advance, which is already happening. Banks, too, have deliberately put some brakes on providing credit to the retail segment to keep a tab on credit quality.

With access to foreign funds (ECB, etc) not coming easily, and equity markets in the doldrums, demand from corporate India has however been healthy.

Says Tridib, “Due to various reasons (including the fall in stock markets), the corporate finance activities have improved. This is on account of critical projects, including infrastructure and capex, where demand for credit is unlike to wane.”

Thus, overall credit growth is expected to slow down from over 25 per cent currently to around 18-20 per cent. Regards the fee-income, this too is likely to slow down over the next few quarters but still remain healthy between 15-25 per cent. Nonetheless, the overall income and profit growth for the industry should be at a respectable 15-25 per cent.

The silver lining
Even as the outlook for the next six months remains subdued led by rising costs, asset quality concerns and higher provisions, the sector’s medium-to long-term prospects continue to look good. Explains Tridib, “If you look at the last 15 years, the NIMs of banks have averaged around 3 per cent, which is across interest rate cycles.

This is because banks are a classic ‘pass-through’ mechanism. If you look at the recent hikes, banks have passed on the cost increase through PLR hikes. So, any pressure on margins will be temporary and over a period margins will remain stable and possibly inch up.”

Adds Karwa, “Margins should not correct from current levels, and are likely to be maintained as banks are also increasing lending rates.”

So, while it may take time for the clouds to clear off completely, the sector (stocks) is expected to see range bound trading. For instance, if the RBI hikes repo rates or CRR further then expect banking stocks to be hit in the interim. Likewise, in the current situation, any further upside is unlikely.

Meanwhile, watch out for any surprises that could come up in the form of significant losses on account of forex exposure (arising from exposure to credit derivatives, as yields have hardened in international markets) and, on account of asset quality and NIMs over the next two quarters.

Any spike in prices of crude oil or commodities to recent peaks (low probability as per experts) could prove to be dampeners, and cast their ominous shadow on the prospects of the banking sector.

Thus, any downward swing in market sentiments could be used as an opportunity to selectively buy banking stocks. Experts prefer banks with high CASA ratio, strong management and good liability (loan) profile.

Among preferred picks include Axis Bank, HDFC Bank, Union Bank of India, Indian Bank, Federal Bank, South Indian Bank, PNB, SBI and ICICI Bank.

REALTY

Grappling with low demand
“Some of the real estate players are land bank rich, but cash poor,” said a CEO of a large Bangalore-based realty firm referring to the liquidity problems being faced by real estate players.

While the real estate players The Smart Investor spoke to believe that the liquidity crunch and rising costs are a short-term phenomenon, analysts are of the view that the pain is going to last for at least two quarters if not more going ahead.

The rise in interest rates, the spike in input costs and drying up of funding options has led to a dip in prices, drop in profit margins and slowdown in development of construction projects.

The high three digit year-on-year growth in sales, EBIDTA and net profit registered in every quarter over the last few quarters is passé and this is reflected in the June quarter results of the companies that constitute the BSE Realty index.

Though some of it is due to a high base, the slowdown in demand has had its impact with sales and profit margins registering lower double digit growth. Unless the situation related to the high cost of capital, input costs and most importantly demand changes for the better, the sector could see worse days over the next three months.

Input costs
Construction costs for realty players have gone up by about 20-40 per cent over last one year. While cement prices are stable after inching up over the last four years, prices of steel shot up 26 per cent over the last one year with the spike coming in towards the end of 2007.

While most developers are passing on the cost to consumers or partially absorbing them, some such as DLF have been able to save about 15 per cent of the cost of steel by importing prefabricated steel from China and value engineering their processes.

Funding issues
Over the last one year, realtors have seen their debt cost go up by 300 bps to around 14 per cent. With banks being circumspect about giving loans to realtors and insisting on necessary clearances from local authorities before approving loans, some realty players are forced to look towards NBFCs and in some cases private parties to fund their expansions.

Such infusion of funds, however comes at a price of higher lending rates and thus adds to the interest burden.

Says Sahel Pramendra, managing director – North, Jones Lang LaSalle Meghraj, a real estate consulting firm, “Due to rising cost of funding and high real estate cost there is a significant pressure on margins. Alternatives such as private equity or mezzanine funding are becoming popular. Public markets are not an easy option considering the unfavourable market conditions and due to the prevalent guidelines, external debt is not possible.”

With cheaper sources of funding closed on them, realtors are hoping that the waning consumer demand picks up. Though there is latent demand, analysts argue that unless prices correct by 10-15 per cent there is no incentive for the real estate buyer to look at property purchase in the current high interest scenario.

Demand
Higher interest rates are having an impact both on the realty players as well home loan seekers. Says Angshuman Magazine, managing director of real estate consulting firm, C B Richard Ellis for South Asia, “High interest rates may force realty players to scale down the size of their projects and offer sops to attract investors.”

Housing loan disbursals by the country’s top home loan providers are down sharply as buyers postpone purchases due to the high costs and in the hope that prices and interest rates will come down going forward.

Commercial property prices which were resilient especially in tier 1 cities could start to weaken as the biggest catalyst in the form of IT/ITES expansion could see a slowdown on the back of lower y-o-y employee editions by the IT majors.

Incremental demand in commercial realty is likely to come from SEZs. Residential prices have corrected sharply in some metros and analysts expect some more correction to set in. While the current quarter is traditionally a muted one in terms of sales, the festival season and a dip in property prices could entice the buyer (actual user) to come back, higher EMIs not withstanding.

Battered stocks
While shares of listed real estate players have recovered over the last one month with BSE Realty gaining 22.4 per cent, over the year the Realty index is still down by a third.

Going forward, analysts believe that net asset values (a valuation metric) is likely to move down on the back of lower property prices, higher costs and slow pace of execution.

Analysts say that a 20 per cent reduction in price of property results in about 33 per cent drop in their NAVs and a 30 per cent price drop lops off half of the NAV, thus putting pressure on profits and valuations.

Given the current situation, analysts believe that DLF (execution track record, experience, land bank and project profile) and HDIL (attractive valuations) are the best bets in the current scenario, and can be looked at on declines.

LONG TERM BETS
FY09E in Rs crore	M&M*	Maruti Suzuki	Hero Honda	Bajaj Auto*	DLF	HDIL
Sales	12,893.70	21,348.60	11,313.32	9,356.36	15,367.00	3,808.00
% change	14.00	19.00	9.50	8.00	8.00	60.00
EBIDTA	1,291.50	2,270.00	1,376.35	1,201.80	10,326.62	2,419.56
Net profit	882.60	1,713.49	1,025.95	793.70	6,915.15	1,690.75
Price	583.00	650.55	785.10	561.85	501.00	431.00
P/E	16.78	10.97	15.30	10.26	12.35	7.02
*Standalone Source: Analyst reports

AUTO

Knocked out by interest rates
The automobiles sector is inextricably linked with economic activity in the country. While the sector is divided into two wheelers, passenger and commercial vehicles, it is the latter two which bear the brunt of any slowdown in the economy or high interest rates.

A slowdown in industrial activity invariably puts the brakes on the goods moved into different parts of the country and therefore the medium of transport--commercial vehicles.

Increase in input costs has forced the country’s biggest commercial vehicle companies to hike the price of their products, making it that much more difficult for truckers to offset their high investment cost despite the discounts and attractive finance schemes.

Tepid sales
Auto sales in July which saw muted passenger and commercial vehicle sales due high cost of fuel and interest rates are an indication of the sluggish nature of customer demand. While sales of passenger and utility vehicles are down by 2 and 7 per cent year-on-year in the domestic market, medium and heavy commercial vehicles are down by 1 per cent in the same period. It was not just the demand side that pinched.

Thanks to the high raw material, employee and other overhead costs, EBIDTA margins for the major manufacturers, with the exception of TVS Motors and Hero Honda, are down by a minimum of 100 bps.

Two wheelers/Passenger vehicles
Analysts believe that the passenger vehicle segment which has seen a 11 per cent increase in year-to-date sales could see a spurt as companies get ready to launch a slew of new cars and variants over the next two quarters.

In expectation, buyers tend to postpone their purchase decisions as they believe they will get a better car, hopefully, at an attractive price. As lenders finance 70 per cent of the cars procured in the country, a rise in interest rates and subsequent hike in EMI instalments makes this an expensive affair.

Says an analyst, “Cars are a discretionary spend and the increase in interest rates will force the buyer to rethink on the decision.” To improve their spreads, auto financiers such as HDFC Bank and Kotak Bank are now approaching customers directly instead of routing the proposals through dealers.

This not only helps in cutting costs but also allows them to verify customer records first hand and control their NPAs.

Two wheelers, due to their low unit price have not had the interest rate problems which have beset sales of larger vehicles. This is one of the reasons in addition to a low base which helped two wheelers buck the trend in the July quarter and grow by 20 per cent y-o-y.

Commercial vehicles
While commercial vehicle majors such as Tata Motors and Ashok Leyland have passed on some of the increase in input costs, they have not been able to achieve volume growth due to high interest rates.

In addition to high rates that causes an additional burden on truckers, slowing down of industrial production as compared to last year is a cause for concern. Unless interest rates come down (unlikely) or manufacturing activity picks up, CV manufacturers will have to contend with the triple whammy of high input costs, high interest rates and sluggish manufacturing activity.

While auto scrips have jumped 16 per cent over the month on the back of a drop in fuel prices globally, the short to medium term outlook for the sector, especially the commercial vehicles is rather bleak.

Experts recommend that investors pick stocks which have shown strong domestic volume growth (Hero Honda), Maruti (launch of A-Star and Splash), M&M (investment portfolio) and Bajaj Auto (diversifying into four wheelers and LCVs).

S.Korea's July dept sales growth hits 5-mth low

2008-08-17T22:43:00.001+01:00

S.Korea's July dept sales growth hits 5-mth low

Sun Aug 17, 2008 5:00pm EDT

SEOUL, Aug 18 (Reuters) - Annual growth in sales at South Korea's top three department stores hit a five-month low in July, government data showed on Monday, adding more evidence of slowing domestic demand in Asia's fourth-largest economy.

Combined sales at stores run by Lotte Shopping Co Ltd (023530.KS: Quote, Profile, Research, Stock Buzz), Shinsegae Co Ltd (004170.KS: Quote, Profile, Research, Stock Buzz) and Hyundai Department Store Co Ltd (069960.KS: Quote, Profile, Research, Stock Buzz) in July rose 5.9 percent from a year earlier, the Ministry of Knowledge Economy said in a statement.

The figure is the slowest growth since February, the data showed.

Earlier this month, the finance ministry said sales at the country's major department stores in July increased an estimated 5.0 percent from a year earlier.

Their sales in June had risen 11.2 percent from a year earlier and 11.3 percent in May.

Department store sales are closely watched in South Korea for clues about the strength of domestic demand, which generates more than half the country's gross domestic product.

Separately, the knowledge economy ministry said sales at the country's top three discount store chains in July rose 2.1 percent from a year earlier, compared with a 1.9 percent fall in June. (Reporting by Cheon Jong-woo; Editing by Jacqueline Wong)

Broadcom stock poised to grow 40 percent: report

2008-08-17T22:42:00.001+01:00

Broadcom stock poised to grow 40 percent: report

Sun Aug 17, 2008 2:43pm EDT

NEW YORK (Reuters) - Broadcom Corp (BRCM.O: Quote, Profile, Research, Stock Buzz) stock could shoot up as much as 40 percent as the chip-maker grabs part of the "smartphone" market, according to an article in the August 18 edition of Barron's.

Broadcom, which makes chips for mobile phones, network equipment and consumer electronics, is emerging as an aggressive competitor in the market of "smartphones," or cell phones that let users browse the Web, check e-mail, watch videos, listen to music and make phone calls, said the article in the weekly financial publication.

"They are in the right markets with the right products," Cowen & Co analyst Daniel Berenbaum told Barron's. "You have to like that and you have to like a company that has executed so well."

Berenbaum, who rates the shares "outperform," expects 10 percent revenue growth in 2009 and 15 percent in 2010 and sees free cash flow reaching $1 billion or more by 2010, leading to investors likely willing to pay 25 times free cash flow per share, putting the stock at $37.75, or about 40 percent higher than current levels, Barron's said.

Broadcom shares closed Friday at $27.46 on the Nasdaq.

(Reporting by Sarah Coffey, editing by Maureen Bavdek)

Ruch Chorzow enter stock market

2008-08-17T22:37:00.001+01:00

Ruch Chorzow enter stock market

Written by: Andrzej Otrebski
2008-08-15 23:04:15

Ruch Chorzow, who have won the Polish championship for a record 14 times since its foundation in 1920, will sell their shares on the alternative market of the Warsaw Stock Exchange.

Chairman of the club, Katarzyna Sobstyl, announced that they would be the first Polish sports company whose shares would be exchanged at the stock market. The planned income of the issue is a minimum of 5 million zloty (about 1,5 million euros). The sum will be allocated to strenghten the brand of the company and to buy new players to the team.

The Ruch stocks will enter the NewConnect market, which is intended for young and more risky companies with high grow potential.

The principal shareholder of Ruch Chorzow is Mariusz Klimek, founder of the clothing company Reporter, also quoted at the Warsaw Stock Exchange. He invested into the 2nd division club in autumn 2005, when their debts exceeded 15 million zloty (4.5 million euros). In 2007 Ruch were promoted to the Ekstraklasa, which they finished in 10th place.

Searching for the naked truth

2008-08-17T22:17:00.002+01:00

Searching for the naked truth

Aug 17th 2008
From Economist.com

The real problem with abusive short-selling

FOR much of this financial crisis, America’s Securities and Exchange Commission (SEC) has cut a pathetic figure, relegated to the sidelines as a hyperactive Federal Reserve tried a variety of creative measures to keep the system afloat. When the market watchdog finally did get in on the act, it was highly controversial: a temporary order restricting short-selling the shares of 19 financial firms deemed systemically important, including Fannie Mae and Freddie Mac, the two troubled mortgage agencies.

The ban on “naked” short-selling—the sale of shares one has not yet borrowed—was announced on July 15th and allowed to lapse on August 12th. Its stated aim was to aid “price discovery”, but many suspected it was a share-support operation. This week saw feverish analysis of what, exactly, it had achieved, and what role, if any, abusive short-selling and other forms of manipulation may have played in exacerbating banks’ woes.

As regards the ban’s efficacy, arguments can be mustered on both sides, and no clear verdict has emerged. The value of the companies on the list rose sharply while it was in place, but the entire market was rallying. Short-sellers do not seem to have been deterred: for the nine American stocks on the list, short positions fell only slightly. And bid-ask spreads on the 19 stocks widened, suggesting the ban damaged market efficiency.

Some wonder why these firms were offered special protection in the first place, given that short-selling accounted for 12% of their outstanding shares in the months leading up to the ban, slightly less than the proportion for all financial firms.

The SEC has promised a post-mortem. But its mind seems made up. It is working on proposals to extend the naked-shorting ban to all shares. This could be in the rulebook within two months. There is talk of other changes, too, such as bringing back the “uptick” rule, which required traders to wait for a firm’s share price to rise before selling it short. This was designed to stop the relentless hammering of beaten-up stocks but was repealed in 2007 after studies suggested the decimalisation of market prices had rendered the rule ineffective. Another possibility is to introduce some sort of “circuit breaker”, which would put a brake on shorting if prices fell beyond a certain level. Some officials favour forcing traders to disclose large short positions.

Two questions hang over these efforts. First, does the SEC really need new rules to curb naked shorting? Under Regulation SHO, introduced in 2005, it has powers to tackle abusers, but it has used them timidly. The Government Accountability Office is probing the rule’s implementation.

One problem is the nebulousness of some wording. For instance, when locating stock to borrow, short-sellers need only have “reasonable grounds” to believe it can get hold of the shares. It is quite common for several hedge funds to execute a trade, each assuming it has access to, say, the 1m shares in Citigroup that Morgan Stanley has announced it has available to lend that day. This can lead to persistent “fails-to-deliver” (FTDs), which occur when the short-seller is unable to produce shares at settlement. These become “phantom” shares that can trade in the market as if they were real.

The second question is whether naked shorting really is such a problem for large financial firms. Of the 19 protected stocks, only Deutsche Bank was on the SEC’s “threshold” list for companies with a big FTD problem in the run-up to the July ban. This suggests the SEC’s focus on naked shorting is something of a red herring.

For the market as a whole, however, it appears to be a large and growing problem (see chart). Hundreds of smaller firms claim to have fallen victim to naked short-sellers (though some clearly only say that to excuse underperformance). Those worried about short-selling point out that options market-makers are exempt from naked-shorting restrictions: they can sell shares they have not located or borrowed if the aim is to keep markets liquid. But they can also, in effect, rent out this privilege to clients using derivatives contracts, under “market access” agreements. Hedge funds can, in theory, use these deals to launch bear raids in disguise.

It is impossible to know how big this problem is, but regulators accept it exists. The American Stock Exchange fined two market-makers for precisely this violation in July 2007. A month later the SEC proposed limiting or eliminating the exemption, but momentum stalled in the face of opposition from banks and exchanges.

The anti-short lobby, emboldened by the July ban, is again pushing for an end to the market-makers’ exemption. It has even grander ambitions. A group called American Entrepreneurs for Securities Reform has launched a ballot initiative in South Dakota that, if passed in November, would ban all naked shorting in the state, and force all brokers registered there to comply across the United States.

Opponents worry that the language is vague enough to outlaw all short-selling, though the initiative’s backers deny this is their intention. They have threatened action in a further 18 states if the SEC ban is not permanently extended to all shares this year.

How much does all this matter? Deliberate naked shorting has no place in a well-run market. But its effect on the big financial firms that keep regulators awake at night has been limited.

In any case, short-selling is not the only way to make money from a falling share price. As Bear Stearns began to reel in March, one canny (or bent) trader made a mint betting that the investment bank’s share price would halve within days, Bloomberg reported this week. The weapon used was not shorting, legitimate or naked, but put options, which give the buyer the right to offload shares at a fixed price in the future.

For 17,500 right people, ICICI scans 7.5 lakh resumes: Kamath

2008-08-17T22:17:00.001+01:00

For 17,500 right people, ICICI scans 7.5 lakh resumes: Kamath
17 Aug, 2008, 1030 hrs IST, PTI

NEW YORK: In a sort of testimony to hard times being faced by India Inc in getting the right talent, the country's top private sector lender ICICI Bank's chief K V Kamath has said that the bank had to sift through over 42 resumes on an average to find one qualified candidate.

ICICI Bank scanned through about 7.5 lakh resumes to find 17,500 qualified candidates last year, Kamath said in a survey of CEOs at companies listed at the New York Stock Exchange.

In India, a large number of people enter job market, but "many lack the skill set to success," ICICI Bank CEO noted. Advocating for increasing the skilled employee base to keep attrition under control, Kamath said, this could make employees realise that they have competition for jobs.

Also Read

→ 'India Inc way ahead of Western companies'

→ Mid-tier software cos weeding away non-performers

→ CEOs view Brazil, Russia, India and China as opportunities

→ Two India-origin persons among Forbes top-paid young CEOs list

"It also helps keep wages in check as employers have a bigger pool of qualified workers from which to choose," the NYSE survey quoted Kamath as saying.

The fourth annual survey of CEOs of NYSE-listed companies was conducted from February 29 through March 31 and 254 chief executives participated in the study.

About 72 per cent of the CEOs surveyed are based in the US, while 28 per cent are from non-US companies. Talking about the challenges faced by businesses in BRIC (Brazil, Russia, India and China) countries, Kamath said that many companies "steeped in past success is going to find it difficult to compete in BRIC countries."

Going by the survey conclusions, about two-third of the chief executives view the BRIC nations as an opportunity. Pointing out that "sensible acquisitions and expansions are targeted in BRIC countries", the report said that out of the chief executives from non-US firms, nearly 8 in 10 see these nations as an opportunity.

Tokyo market seen remaining cautious next week

2008-08-17T22:16:00.001+01:00

Tokyo market seen remaining cautious next week

* Over the week to Aug 15, Nikkei-225 index lost 149.0 points or 1.13 percent

TOKYO: Japanese share prices may remain subdued next week amid the traditional summer lull and with worries about the economic outlook weighing on sentiment, analysts said Friday. Investors will continue to watch developments in US markets, while waiting for an interest rate decision by the Bank of Japan as well as more details on measures by Japan’s government to ease the pain of high oil prices. Over the week to August 15, Tokyo’s benchmark Nikkei-225 index lost 149.0 points or 1.13 percent to 13,019.41.

The broader Topix index of all first section shares on the Tokyo Stock Exchange fell 12.62 points or 1.0 percent to 1,247.31. Activity was muted with many players away for summer vacation. Next week might see the return of investors, although there are few obvious catalysts on the horizon for a strong rally, analysts said.

“I hope the share prices will rise a bit next week,” said Seiichi Suzuki, a strategist for Tokai Tokyo Securities Co, forecasting the Nikkei index will stay within a range of 12,900 and 13,300 points next week. Investors will keep an eye out for an economic package due to be announced by the end of the month by the government to try to counter the impact of high energy costs on small businesses and farmers. But the steps are not expected to have a significant impact on overall economic growth. The market is particularly eager to see if the package will include tax exemptions for stock dividends, Suzuki said, adding, “I think it would help easing profit-taking by individual investors.”

Investors will also focus on July trade figures due on Thursday amid concern about weak exports, as well as a two-day interest rate meeting at the Bank of Japan (BoJ) through Tuesday. Although the central bank is expected to leave its key lending rate unchanged at 0.5 percent, there is speculation that it may paint a more gloomy outlook for Asia’s largest economy.

The BoJ announced last month that from now on it would release its assessment of the economy and prices along with every monetary policy decision in an effort to communicate better with markets.

“The BoJ appears to be more concerned about downside risks to growth than higher inflation, and we view a rate hike as unlikely for quite some time,” Lehman Brothers economists wrote in a research note. afp

Review of Market for the week

2008-08-17T22:14:00.000+01:00

Review of Market for the week
17 Aug, 2008, 0000 hrs IST, ET Bureau

Market ends five-week positive rally

Indian equity markets ended their five week gaining rally in a truncated trading session this week. The benchmark index of the Bombay Stock Exchange (BSE), the Sensex, declined 443.64 points or 2.92 per-cent in the week to close at 14,724.18 Thursday. Friday, Independence Day, was a holiday.

The S&P CNX Nifty index of the National Stock Exchange lost 98.80 points or 2.18 percent in the week to end at 4,430.70.The BSE mid cap index fell 63.55 points of 1.07 percent at 5,823.42 in the week and BSE small cap index lost 71.30 points or 0.99 percent at 7,110.44.India's inflation touched 12.44 percent for the week ended Aug 2 as compared to 12.01 percent for the week before, but that did not have an effect on the stocks as the announcement was made after the markets closed Thursday.

On Wednesday, market regulator Securities Exchange Board of India (SEBI) held a review meeting where it was decided to cut down on the timeline of rights is-sue to 43 days from 109 days. That did have an adverse effect.The markets attracted $121.20 million in foreign institutional investments during the week.

The week started on a positive note on the back of strong global cues and fall in crude oil prices. The Sensex closed with a gain of 336.10 or 2.22 percent at 15,503.92 Monday and the Nifty rose 90.90 points or 2.01 percent to 4,620.40.The indices ended lower Tuesday, on the back of poor industrial output data.

The Sensex lost 291.79 pints or 1.88 percent to 15,212.13. The Nifty lost 68.15 points or 1.47 percent to 4,552.25.On Wednesday for the second consecutive day the Sensex closed with a loss of 119.01 or 0.78 percent at 15,093.12 and the Nifty slipped 23.2 points or 0.51 percent at 4,529.05.

The markets extended losses for the third day running after a rise in crude oil prices which rekindled fears of inflationary pres-sure.On Thursday the Sensex fell 368.94 points or 2.44 percent to 14,724.18 and the Nifty lost 98.35 points or 2.17 percent to close at 4,430.70.

The value of the voting right: a study of the Milan Stock Exchange experience

2008-08-16T17:59:00.000+01:00

The value of the voting right: a study of the Milan StockExchange experience

L Zingales
Graduate School of Business, University of Chicago, 1101 E 58th Street, Chicago, IL 60637, USA

Abstract

I study the large premium (82 percent) attributed to votingshares on the Milan Stock Exchange. The premium varies accordingto the ownership structure and the concentration of the votingrights, and it can be rationalized in the presence of enormousprivate benefit of control A case study seems to indicate thatin Italy private benefits of control can easily be worth morethan 60 percent of the value of nonvoting equity. A tentativeexplanation for these findings is provided.

Bankex, real estate drag Sensex below 15k level

2008-08-16T17:27:00.000+01:00

Bankex, real estate drag Sensex below 15k level

Press Trust Of India / Mumbai August 15, 2008, 3:56 IST

The Bombay Stock Exchange’s Sensex on Thursday shed 369 points, the biggest fall in nearly three weeks, to close below the psychological 15,000-point level on sustained selling pressure, particularly in realty, bank and consumer goods counters.

The 30-share barometer, which fell 119 points in the previous day’s trading, lost 368.94 points to 14,724.18 on Thursday. It dipped to the day’s low of 14,686.66 and saw a high of 15,033.28 points.

The National Stock Exchange index Nifty also fell by 90.35 points to 4,430.70.

Realty stocks bore the maximum brunt, with the BSE Realty Index plunging 7.97 per cent, or 447.30 points, to 5,163.53. Real estate major DLF, which crashed by 8.66 per cent, was the worst performing stock among the Sensex club.

Banking stocks tumbled, with sectoral majors State Bank of India and ICICI Bank taking a major hit of 6.24 per cent and 5.25 per cent respectively.

Most actively traded companies on Canadian stock markets

2008-08-16T17:26:00.001+01:00

Most actively traded companies on Canadian stock markets

1 day ago

TORONTO — Some of the most active companies traded Thursday on the Toronto Stock Exchange and the TSX Venture Exchange:

Toronto Stock Exchange (down 18.31 points at 13,358.91):

Blue Note Mining Inc. (TSX:BN). Mining. Down 3.5 cents, or 46.67 per cent, at four cents on extremely high shares at 47,039,596. Lower metal prices resulted in a revenue increase of only 24 per cent at the Montreal-based company. Net loss in the quarter widened at $12.7 million or $0.035 per share compared to $2.5 million or $0.01 per share from a year ago.

Allon Therapeutics Inc. (TSX:NPC). Drug maker. Unchanged at $1.07 on active trading at 6,378,400 shares. The Vancouver-based company boasted earlier in the week that it achieved all its clinical and financial objectives during the quarter and is on track to achieve all its 2008 milestones, including a partnership with a large pharmaceutical company.

Groupe Aeroplan Inc. (TSX:AER). Loyalty card program operator. Up 10 cents, or 0.76 per cent, at $13.30 on 6,371,994 shares after the firm saw lower profits in the second quarter, but a 52 per cent rise in revenues. Aeroplan also announced a multi-year deal with supermarket giant Sobeys for customers to earn Aeroplan miles on their grocery purchases in some provinces, and a separate deal with travel company Expedia in the United Kingdom.

Sleep Country Canada (TSX:Z.UN). Mattress retailer. Up $5.83, or 36.32 per cent, at $21.88 on 5,996,130 shares. Two Canadian investment firms have offered to buy the national mattress retailer in a friendly deal valued at $356 million.

Eastern Platinum Ltd. (TSX:ELR). Mining. Down five cents, or 3.18 per cent, at $1.52 on 5,342,817 shares.

Yamana Gold Inc. (TSX:YRI). Mining. Down 83 cents, or 7.10 per cent, at $10.86 on 5,089,216 shares. The gold sector led all the decliners on the TSX, plunging 5.32 per cent.

TSX Venture Exchange (down 5.71 points at 1,991.18):

Phoscan Chemical Corp. (TSXV:FOS). Mining. Down 10 cents, or 9.62 per cent, at 94 cents on 5,385,172 shares.

Bridge Resource Corp. (TSXV:BUK). Down 17 cents, or 16.83 per cent, at 84 cents on 5,241,390 shares.

Companies reporting major news:

Cameco Corp. (TSX:CCO). Miner. Up 43 cents, or 1.31 per cent, at $33.32 on 1,160,770 shares. Delays in expanding some of its mines caused Cameco to lower its 2008 uranium production by one million pounds. It also reported a big drop in second-quarter income at $150 million or 44 cents a share, compared to $205 million or 58 cents per share.

Clearwater Seafoods (TSX:CLR.UN). Food processor. Up 65 cents, or 17.33 per cent, at $4.40 on 1,705,884 shares after announcing a plan for the publicly traded income fund to go private. Clearwater also announced a slight dip on its second quarter profit at $11.5 million, compared to $12.1 million from a year ago.

Mega Brands (TSX:MB). Toymaker. Down nine cents, or 3.02 per cent, at $2.89 on 10,661 shares as it said timing, not a fear of investor backlash, was behind the troubled toymaker's efforts to bypass a shareholder vote on a $75 million liquidity infusion.

Stock Exchange moves to historic Wellington waterfront building

2008-08-16T16:00:00.000+01:00

Stock Exchange moves to historic Wellington waterfront building

14.01.04

Mayor Kerry Prendergast is delighted the New Zealand Stock Exchange has not only decided to keep its head office in Wellington, but to relocate to a heritage building in a fantastic waterfront location close to Te Papa and Civic Square.

"NZX's new headquarters will be a great addition to the waterfront," she says. "It will be an ongoing reminder of what a great place Wellington is to do business and reinforces the city's reputation as an ideal location for innovative people and their families."

The Council see the Stock Exchange as a vital part of the city and business sector has been working with NZX to help ensure it retains its headquarters in the capital.

"We want to celebrate Wellington's historic role as the financial centre of this country and Council will be discussing the installation of the electronic signs for the outside of the building that will bring a touch of Times Square to the Taranaki Street Wharf," Mayor Prendergast says.

It is envisaged the horizontal ticker signs - visible from the waterfront and Jervois Quay - will wrap around part of the building at two levels providing scrolling, up-to-the-minute share prices, foreign exchange prices and daily highs and lows.

A high quality outdoor video screen with stereo sound will give live market announcements and business news near the building's main waterfront entrance.

"This is an exciting, vibrant use for an old waterfront warehouse. It will be a great home for the NZX and will help bring life and drama to a building that has been empty and derelict for years," Mayor Prendergast says.

Guillaume Desnoës

2008-08-16T15:58:00.000+01:00

Guillaume Desnoës

News Stock Exchange

Are you interested in news? How very old school since now you can predict the future! This is possible thanks to websites like Newsfutures or Trendio that enable you to buy and sell options on events to come.

These are information or prediction markets.

They make the bet that we can predict the future rather well by encouraging a community to negotiate options linked to the realization of future events, which seems to work well according to James Surowiecki, the author of the bestseller The Wisdom of Crowds. No need for a representative sample when a diversified and decentralized group in which individuals act in complete independence generally is enough to obtain the best results. Statistically, when installing “collective thinking”, they are better then the experts.

Not convinced?

In your opinion what is the most reliable way for Hollywood majors to anticipate the success of their films?

Well, by looking at the film exchange on the Hollywood Stock Exchange, where a community sells and buys “futures”, which are negotiable options that are in the end exchanged for an underlying value (Box Office results after a few weeks for example).

To predict the election results? Take a look at the Iowa Electronic Market. During the last US Presidential Elections, it was revealed to be more reliable than other popularity polls.

It isn’t just a coincidence if Google, Yahoo or even HP have already used this sort of tool corporately to predict upcoming events such as product launches…

France 24 has reached 1.2M unique visitors in France according to a panel conducted by Nielsen in December 2006. Place your bets for January 07!

Upstarts Are Taking Aim At the London Exchange

2008-08-16T15:46:00.002+01:00

Upstarts Are Taking Aim
At the London Exchange

Chi-X, Turquoise Leading the Charge;
'A Cauldron of Competition' in Trading

By NEIL SHAH
August 14, 2008; Page C1

In a brick building with darkened windows outside the heart of London's financial district, a fledgling firm called Chi-X Europe Ltd. is leading a foray into the territory of London Stock Exchange Group PLC.

Chi-X's chief executive, 53-year-old Peter Randall, hopes to challenge the 300-year-old exchange by winning over clients such as banks and hedge funds, whose rapid-fire automated trades make up a growing share of the market.

The firm's efforts are just the beginning of what could be a major change in a business long dominated by established players such as the LSE, Germany's Deutsche Börse AG and New York Stock Exchange parent NYSE Euronext. Encouraged by new European rules aimed at increasing competition, some of the world's biggest investment banks are putting their weight behind upstart trading platforms such as Chi-X and Turquoise, a venture led by former Morgan Stanley electronic-trading chief Eli Lederman.

Their aim: gain more influence over a business that generates more than $9 billion in annual revenue, and cut the daunting expense and hassle of trading in Europe, where the process of buying, transferring and paying for a stock can cost about six times as much as in the U.S.

"You can expect a cauldron of competition," says John Lowrey, who runs electronic trading for Lehman Brothers in Europe, which holds a small stake in Chi-X. Mr. Lowrey expects the price of trading to fall by 50% in Europe over the next few years.

The newcomers can offer lower prices because they operate with a fraction of the costs of their older peers and eschew traditional functions like listing stocks.

The battle is likely to heat up this fall as a flock of new platforms joins the year-and-a-half old Chi-X. Mr. Lederman's Turquoise starts limited trading Friday and launches in September after more than a year of delays. Nasdaq Stock Market operator Nasdaq OMX Group Inc. is set to unveil a platform next month that will compete for some of the same clients as its OMX Nordic exchange. Kansas City, Mo.-based BATS Trading Inc. is considering November for the debut of its own European service.

A native of Manchester, England, Chi-X's Mr. Randall says he got into electronic trading to "challenge the status quo." He received degrees in management and law from Oxford University and the London School of Economics, respectively, and spent his early career analyzing stocks.

For several years in the 1990s, he served as chief of the Asian operations of Instinet LLC, now a brokerage unit of Japanese bank Nomura Holdings Inc. that performs electronic trades for big investors. Instinet launched Chi-X in November 2006, giving stakes to major banks the following January but remaining the venture's majority owner. The name refers to the Greek letter for "X" and suggests a "crossing" or exchange.

Mr. Randall has gotten Chi-X off to a good start, largely by catering to the needs of traders at banks and hedge funds that specialize in so-called algorithmic trades, which now account for roughly 20% to 40% of all European trading. Algorithmic traders use computers to identify market discrepancies and make often millions of fast transactions.

To attract the business, Chi-X charges 0.0005 percentage point on such trades, roughly one-seventh the price charged by the LSE, Mr. Randall says, though he warns the two pricing systems are hard to compare. As a result, Chi-X garnered 17.5% of trading in shares listed on the U.K.'s FTSE 100 index at the end of July. The LSE says its fees depend on the volume of a client's business.

Chi-X has "helped us reduce costs for clients," says Chris Jackson, a Merrill Lynch director who uses Chi-X to perform trades for U.K. clients. "We do expect incumbent exchanges to lose additional market share as the new platforms come on-line." Merrill has stakes in Chi-X and Turquoise.

Turquoise, meanwhile, has its work cut out for it. The firm, backed by many of the same banks that support Chi-X, stumbled early on because of a lack of leadership, Mr. Lederman says. "It was a part-time job for many people," he says. The 40-person firm now hopes to distinguish itself from Chi-X by giving clients access to a "dark pool," or electronic network that matches buyers and sellers anonymously, he says.

Chi-X, Turquoise and the other new entrants are coming at a time when a sharp economic downturn in Europe is threatening to shrink the trading business overall.

The LSE is taking the threat seriously. As of Sept. 1, it plans to cut certain fees for sophisticated and larger clients. Together with Lehman Brothers Holdings Inc., it also aims to launch a dark-pool venture early next year called Baikal. Spokesman Patrick Humphris says the added business from sophisticated traders can benefit both upstart and established players.

Increasingly, though, Europe's national exchange operators are looking to poach one another's clients by launching pan-European services, in which they offer to trade shares of companies that aren't listed on their exchanges.

"We've seen almost weekly announcements by the exchanges to introduce pan-European" platforms, says Larry Tabb, chief executive of financial-services consulting firm Tabb Group. "Without a doubt, we are headed headlong into a European exchange price war."

The arrival of so many new platforms raises the possibility that they will drive each other out of business. By taking stakes in multiple platforms, banks are hedging their bets in case some fail. One view, shared by Mr. Randall, is that the platforms will eventually merge, and thus remain a threat for Europe's big exchanges.

"I don't think it's a rivalry," says Mr. Randall, adding that he has been friends with Mr. Lederman for several years. "It's more like co-opetition."

Write to Neil Shah at neil.shah@dowjones.com

MIV Announces Exchange Offer for Reg. S Shareholders in Europe

2008-08-16T15:46:00.001+01:00

MIV Announces Exchange Offer for Reg. S Shareholders in Europe

ATLANTA--(BUSINESS WIRE)--MIV Therapeutics, Inc. (OTCBB:MIVI) (Frankfurt:MIVN), a leading developer of next-generation coatings and advanced drug-delivery systems for cardiovascular stents and other implantable medical devices, announced today that it intends to take steps to delist its Reg. S stock from the Frankfurt Exchange. The Company’s primary market for its shares of common stock is the OTC Bulletin Board and the Company believes that the separate listing of Reg. S stock on the Frankfurt Exchange is unnecessary. In connection with such delisting, the Company has undertaken an exchange offer (the “Exchange”), whereby for each holder of record as of the record date of August 15, 2008 (“Record Date”), the Company will offer to exchange one share of Company common stock (“New Stock”) for each share of Reg. S stock outstanding and currently trading on the Frankfurt Exchange under WKN 911285 (“Reg. S Stock”). The Exchange relates solely to the Reg. S stock trading under the identification, “MIV Therap. Reg S. DL-001 (ISIN USU606981046, WKN 911285).” The Exchange will have no effect on any other shares of common stock of the Company trading on the Frankfurt Exchange, namely, there will be no effect on the Company’s common stock trading under the identification “MIV Therap. NEW DL-001 (ISIN US55306V2051, WKN A0Q48S).” Further, please be advised that as a result of the Company’s recent 1-for-10 reverse stock split, effective as of June 27, 2008, each share of Reg. S Stock outstanding was automatically consolidated on a 1-for-10 basis, and accordingly, when exchanged for New Stock will reflect the post-reverse stock split share amounts. For further information regarding the reverse stock split, please see the Company’s Current Report on Form 8-K, filed with the U.S. Securities and Exchange Commission on July 3, 2008.

The exchange of Reg. S Stock for New Stock must take place on or before the delisting date when the Reg. S Stock will no longer be tradable. Each share of New Stock will be issued pursuant to Section 3(a)(9) of the Securities Act of 1933, as amended, and therefore exempt from registration. The Company will pay any associated administrative expenses.

In order to accept the Exchange, holders of record of Reg. S Stock as of August 15, 2008 must return their Reg. S Stock to the Company via the Company’s account with the following delivery details:

Depository:		Brown Brothers Harriman
DTC No:		010
Favour:		Fortis (C.I.) Ltd
Ac:		6682702

The Company’s Exchange Agent, who will be facilitating the Exchange, is Epsom Asset Management Ltd. (“Epsom”), and can be reached via email by contacting Danny Snape at: danny@ehtrustco.ch. When initiating the delivery of Reg. S Stock to the Company’s account, the holder of Reg. S Stock must coordinate with Epsom on the trade date and settlement date. Additionally, Fortis (C.I.) Ltd will require a contact name and details of an individual from the bank or broker that is arranging the delivery of the Reg. S Stock. When submitting shares Reg. S Stock for Exchange, holders are asked to provide Epsom delivery instructions for the return of New Stock along with the holder’s telephone number and email address so that the Company or its agent may communicate with them if there are questions.

Upon receipt of the Reg. S Stock, the Company will send the Reg. S stockholder either a certificate or an electronic DTC transfer representing the same number of shares of New Stock (on a post-reverse stock split basis) within twenty (20) business days. If shares of Reg. S Stock are not tendered for exchange by September 12, 2008, they will no longer be tradable on the Frankfurt Exchange (or any other applicable German stock exchange). Following the de-listing of the Reg. S Stock, the Company will continue to file its periodic reports under the Securities Exchange Act of 1934 with the U.S. Securities and Exchange Commission.

This Exchange will also be submitted to Clearstream and Euroclear for distribution so that we may reach as many Reg. S Stockholders as possible.

If holders have any questions regarding the Exchange Offer or how to exchange Reg. S Stock, they are asked to send an email of their request in English or German to the Company’s representative in Germany, Vastani Trading at info@vastani.com.

About MIV Therapeutics

MIV Therapeutics is developing a next-generation line of advanced biocompatible coatings for passive and drug-eluting applications on cardiovascular stents, as well as for a broad range of other implantable medical devices. The Company's ultra-thin coating formulation is designed to protect surrounding tissue from potentially harmful interactions with bare metallic stents. This coating platform is derived from hydroxyapatite (HAp), an organic material that has demonstrated excellent in vivo safety and biocompatibility. Hydroxyapatite is a porous material that makes up the bone mineral and matrix of teeth, and is widely used today as a bone substitute material and for coatings on implantable fixation devices in orthopedic, dental and other applications. The Company's novel polymer-free drug-eluting technologies based on HAp could also provide an attractive alternative to current polymer-based drug-eluting coatings on the stent market, which have been associated with undesirable effects. The Company's drug-eluting coatings are additionally designed to suit a broad range of implantable medical devices that could benefit from highly customizable drug release profiles. MIV Therapeutics has a Collaborative Research Agreement with the University of British Columbia and has received a government grant for its research program on the “Development of Novel Drug Eluting Composite Coatings for Cardiovascular Stents,” under the National Research Council-Industrial Research Assistance Program. Under this sponsorship, the Company is expected to complete its drug-eluting research and development program and to reach product commercialization. MIV's intellectual property portfolio includes patents held by the University of British Columbia and exclusively licensed to MIV. Key patent applications filed simultaneously in various countries around the world further protect the commercial exclusivity of MIV's inventions in the global marketplace. For more information, please visit www.mivtherapeutics.com.

Forward-Looking Statements

Except for the historical information contained herein, the matters discussed in this press release are forward-looking statements. All statements that discuss expectations and projections with respect to future matters including, without limitation, statements relating to the safety and efficacy of the Company’s product and the ability of the Company’s product to rejuvenate the stent market are forward-looking statements. Such statements are indicated by words or phrases such as “proposed,” “expected,” “believe,” “will,” “breakthrough,” “significant,” “indicated,” “feel,” “revolutionary,” “should,” “ideal,” “extremely” and “excited.” These statements are made under “Safe Harbor” provisions of the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those described in forward-looking statements and are subject to risks and uncertainties including, without limitation, market acceptance of the Company’s product, the ability of the Company to raise sufficient funding and to continue to develop its various business interests as presently contemplated, and other factors identified in the Company's filings with the Securities and Exchange Commission including, without limitation, the Company's annual report on Form 10-K for the year ended May 31, 2007 and Forms 10-Q. The Company expressly disclaims any obligation to update publicly or otherwise revise these statements, whether as a result of new information, future events or otherwise, except to the extent required by law.

DJ UPDATE:Tokyo Shares End Higher; Shipping, Tech Shares Gain

2008-08-16T15:45:00.001+01:00

DJ UPDATE:Tokyo Shares End Higher; Shipping, Tech Shares Gain

Tokyo stocks rose slightly Friday as recent decliners such as marine transport shares recovered and short-covering pushed up high tech shares.

Market analysts say that lower crude oil prices and a weaker yen will probably support sentiment, keeping the Nikkei 225 Stock Average above the 13000 mark next week. The benchmark index rose 62.61 points, or 0.5%, to 13019.41 Friday, almost wiping out the 66.25-point loss it posted a day earlier.

"Trading volume may also rise since many investors are expected to return from summer holidays," said Masaru Ohnishi, strategist at JPMorgan. He added that investors are keeping an eye on such economic indicators as the U.S. July new home data as well as the U.S. producer price index due out next week.

REKLAMA	Czytaj dalej

Shipping shares extended their gains from yesterday as investors took heart from the rising baltic dry index. Kawasaki Kisen gained 4.9% to Y809.

Chip shares were also Friday's notable gainers, with Elpida Memory rising 6.3% to Y2,795 and Tokyo Electron adding 3.4% to Y6,340 on a weaker yen and strength in the Philly Semicon Index.

On the other hand, trading houses, whose business largely depend on raw material prices, declined on an overnight drop in crude futures. Mitsubishi Corp. fell 2.3% to Y2,790, while Mitsui & Co. lost 2.4% to Y1,766.

"Recent movements of trading house shares seem to be pegged to crude prices," said a senior official at SMBC Friend Research Center.

In other Japanese markets, shares traded on the Osaka Securities Exchange added 28.28 points, or 0.1%, to 24036.03, while shares traded on the Jasdaq Securities Exchange fell 2.20 points, or 0.2%, to 1384.40.

The Topix index of all the Tokyo Stock Exchange First Section issues rose 8.38 points, or 0.7%, to 1247.31.

After almost 70 years, Shanghai’s stock exchange is reopening to the world

2008-08-16T15:40:00.002+01:00

The Shanghai Stock Exchange

Re-enter the dragon

Aug 14th 2008 | HONG KONG
From The Economist print edition

After almost 70 years, Shanghai’s stock exchange is reopening to the world

Illustration by S. Kambayashi

FROM the 1860s until the Japanese invasion of China in 1941, Shanghai’s bustling stockmarket listed not only domestic companies but also foreign firms, such as those now known as HSBC and Standard Chartered Bank, which operated out of the international concession. When trading resumed in 1992, only domestic firms could list. But many foreign ones have been eager to join them, and after a change in securities laws announced on August 6th, some may now have the chance.

The New York Stock Exchange (NYSE) hopes to be the first foreign firm to list in Shanghai, and may have the blessing of the regulators, according to Chinese press reports. But there is competition. HSBC and Standard Chartered are also reportedly angling to return, and other big banks have put out feelers.

Had the opening come in 2007 when the Shanghai market was riding a wave of euphoria for much of the year, the motivation for a listing by any Western company would have been self-evident: money—and lots of it. Conditions, however, have nosedived. Corporate profits may have risen since but share prices are down by half, and there is little appetite left to provide capital to domestic companies.

The first foreign firms to list may be luckier, however, because they offer Chinese investors a rare opportunity to diversify into non-Chinese shares. With lower portfolio risk, local investors would also theoretically be able to pay more for Chinese companies, says William Goetzmann, a professor at Yale University who has published a rare paper on the pre-war ties between China’s financial markets and the rest of the world.

For the newcomers, there would be many potential benefits including, above all, in marketing themselves to the Chinese. For example, just as a listing by the NYSE would confer some status on Shanghai, so would it also encourage Chinese firms to use New York’s main exchange as their market of choice. (The big state-owned ones have largely ignored the Big Board since a listing in 2003 by China Life, an insurance firm, was met by a barrage of American lawsuits, partly because of poor disclosure.) The NYSE’s own members may also find it easier to list in China. As a fringe benefit, it may be able to sell China its trading technology. For other companies, the shares issued in China could be used as a form of currency to provide performance-linked pay to local employees, as well as to buy Chinese companies.

But there are pitfalls. Exchange rules may permit the Chinese authorities to attend the board meetings of listed companies, something that might not bother the NYSE, which does not face competition from Chinese exchanges in its home markets of Europe or America, but would probably horrify a global bank. More importantly, the financial barriers that surround China’s economy, such as its closed capital account, restrictions on currency trading, and prohibition on short-selling, mean that shares in China trade at different prices from those with identical rights listed on other overseas exchanges.

That kind of trading inefficiency looks bad for China and would be an embarrassment for the NYSE, which prides itself on its ability to price shares cleanly. To solve it, the potential entrants are considering how to issue other types of shares known as depository receipts—but that is complicated by China’s trading and capital restrictions. To find a solution, they may have to help China to liberalise its financial markets even further. That would not only benefit the foreigners, but China too—which is probably the main reason it is courting them in the first place.

Isolagen, Inc. Receives American Stock Exchange Notice Accepting Its Previously Submitted Plan of Compliance and Canceling the Delisting Hearing

2008-08-16T15:40:00.001+01:00

Isolagen, Inc. Receives American Stock Exchange Notice Accepting Its Previously Submitted Plan of Compliance and Canceling the Delisting Hearing

Last update: 4:07 p.m. EDT Aug. 14, 2008

EXTON, Pa., Aug 14, 2008 /PRNewswire-FirstCall via COMTEX/ -- Isolagen(TM), Inc. (ILE:

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Stocks advance as investors return to financials

2008-08-16T15:39:00.001+01:00

Stocks advance as investors return to financials

By SARA LEPRO – 1 day ago

NEW YORK (AP) — Wall Street rebounded Thursday as investors took advantage of bargains in financial stocks after two straight days of heavy declines. The Dow Jones industrials rose more than 100 points.

Stocks initially fell after the Labor Department reported another hefty jump in consumer prices. The 0.8 percent overall rise in July's Consumer Price Index was not as large as June's increase, but it was twice as high as the market expected, and brings inflation to its highest annual pace in 17 years. The core index, which eliminates food and energy prices, is not up as much, but it still rose by 0.3 percent last month — slightly more than forecast.

Wall Street has been concerned that consumers are paring back their discretionary spending in the face of higher prices, in addition to declining home values and a shaky job market. And because consumers' spending accounts for more than two-thirds of the economy, the fear on Wall Street is that the nation is in for a prolonged period of little or no growth.

But after its early disappointment with the CPI, investors began looking more positively at stock prices that were beaten down the past two sessions amid rising anxiety about credit losses at banks and brokerages.

"The greater fear right now is missing the next big rally," said Richard Dickson, senior analyst at Lowry Research in Florida. "Inflation numbers were bad, but they are probably going to get better. The fact that the market has not sold off with any strength, investors are saying, 'Hey, let's go ahead and buy.'"

The Dow jumped 110.74, or 0.96 percent, to 11,643.70 in midday trading.

Volume was extremely light, distorting moves in the major indexes, and helping the Dow to extend a streak of volatility that has frequently sent it up or down by triple digits in recent weeks. On the New York Stock Exchange, 385.23 million shares exchanged hands.

The Standard & Poor's 500 index rose 7.78, or 0.61 percent, to 1,293.61, and the Nasdaq composite index rose 22.16, or 0.91 percent, to 2,450.78.

Bonds edged higher after the Labor Department's data. The yield on the benchmark 10-year Treasury note, which moves opposite its price, dipped to 3.91 percent from 3.94 percent late Wednesday.

The dollar was mixed against other major currencies, while gold prices fell.

Light, sweet crude fell $2.15 to $113.85 a barrel on the New York Mercantile Exchange.

In a separate report, the Labor Department said claims for unemployment benefits fell by 10,000 last week — less than anticipated and showed the labor market is still pinched because of the weak economy. But investors seemed relatively unfazed by the latest economic data, turning instead to buying opportunities in the financial sector.

Reports of more credit losses at banks such as UBS AG and JPMorgan Chase & Co. sent shares tumbling earlier this week. The losses served as a stark reminder that the housing slump and resulting credit crisis are far from over.

But the resulting decline in stocks made many companies look more attractive Thursday. Moreover, with many investors on vacation, and therefore fewer people trading, price moves were exaggerated.

JPMorgan Chase and Morgan Stanley became the latest financial firms to settle with regulators over their sale of auction-rate securities when they agreed Thursday to repurchase a combined $7 billion of the investments. The companies will also pay a combined $60 million in fines.

Last week, regulators reached settlements that required Swiss bank UBS to repurchase $18.6 billion in the securities, while Citigroup agreed to buy back $7 billion of the securities. Auction-rate securities are investments that resembled corporate debt, but with interest rates reset at regular auctions. The market for the securities collapsed in February amid deterioration in the broader credit markets.

JPMorgan Chase was up 79 cents to $37.70, while Morgan Stanley rose 53 cents to $40.68.

Investors were also pleased with Wal-Mart Stores Inc.'s earnings; the world's largest retailer reported a 17 percent rise in second quarter profit and raised its full-year outlook. The discounter has benefited from the economic slowdown, as U.S. shoppers search for lower prices.

Wal-Mart gained 15 cents to $58.03. The news pulled up other retailers, including Target Corp., which rose $1.48, or 3.1 percent, to $49.55. Macy's Inc., which on Wednesday posted a lower second-quarter profit and warned that its full-year earnings will fall short of expectations, jumped 98 cents, or 4.7 percent, to $21.64.

In other corporate news, British Airways PLC, American Airlines and Spain's Iberia SA said Thursday they have signed a revenue-sharing deal that — if approved by regulators — will see the trio set prices together and share seat capacity on trans-Atlantic flights.

AMR Corp., the parent company of American Airlines, gained 44 cents, or 4.1 percent, to $11.30, while UAL Corp., operator of United Airlines, rose 95 cents, or 7.9 percent, to $13.01. Delta Air Lines Inc. rose 36 cents, or 4.3 percent, to $8.70.

Advancing issues outnumbered decliners by about 2 to 1 on the New York Stock Exchange, as well as on the Nasdaq Stock Market.

The Russell 2000 index, which primarily tracks small companies, rose 5.36, or 0.72 percent, to 753.05.

Overseas, Japan's Nikkei stock average fell 0.51 percent. In afternoon trading, Britain's FTSE 100 rose 0.45 percent, Germany's DAX index fell 0.15 percent, and France's CAC-40 rose 0.01 percent.

Market ends its five week gaining rally (Weekly Market Review)

2008-08-16T15:38:00.000+01:00

Mumbai, Aug 16 (IANS) Indian equity markets ended their five week gaining rally in a truncated trading session this week.

The benchmark index of the Bombay Stock Exchange (BSE), the Sensex, declined 443.64 points or 2.92 percent in the week to close at 14,724.18 Thursday. Friday, Independence Day, was a holiday.

The S&P CNX Nifty index of the National Stock Exchange lost 98.80 points or 2.18 percent in the week to end at 4,430.70.

The BSE mid cap index fell 63.55 points of 1.07 percent at 5,823.42 in the week and BSE small cap index lost 71.30 points or 0.99 percent at 7,110.44.

India’s inflation touched 12.44 percent for the week ended Aug 2 as compared to 12.01 percent for the week before, but that did not have an effect on the stocks as the announcement was made after the markets closed Thursday.

On Wednesday, market regulator Securities Exchange Board of India (SEBI) held a review meeting where it was decided to cut down on the timeline of rights issue to 43 days from 109 days. That did have an adverse effect.

SEBI the markets attarcated $121.20 million in foreign institutional investments during the week.

The week started on a positive note on the back of strong global cues and fall in crude oil prices. The Sensex closed with a gain of 336.10 or 2.22 percent at 15,503.92 Monday and the Nifty rose 90.90 points or 2.01 percent to 4,620.40.

The indices ended lower Tuesday, on the back of poor industrial output data. The Sensex lost 291.79 pints or 1.88 percent to 15,212.13. The Nifty lost 68.15 points or 1.47 percent to 4,552.25.

On Wednesday for the second consecutive day the Sensex closed with a loss of 119.01 or 0.78 percent at 15,093.12 and the Nifty slipped 23.2 points or 0.51 percent at 4,529.05.

The markets extended losses for the third day running after a rise in crude oil prices which rekindled fears of inflationary pressure.

On Thursday the Sensex fell 368.94 points or 2.44 percent to 14,724.18 and the Nifty lost 98.35 points or 2.17 percent to close at 4,430.70.

TSX plummets to March levels

2008-08-16T15:27:00.000+01:00

TSX plummets to March levels

U.S. stocks rise on lower commodities

The Gazette

Published: 6 hours ago

The Toronto Stock Exchange benchmark fell yesterday to its lowest close since March as commodity stocks and financials were sold off.

The S&P/TSX composite index was down 262.21 points, or two per cent, to 13,096.70. The TSX Venture composite index fell 53.85 points, or 2.7 per cent, to 1,937.33.

The stock groupings for energy, materials and financials - representing about three-quarters of the main benchmark's weight - were all down. It was a rare example of broad-based bearishness, with the recent trending being that financial stocks usually gain to offset losses in commodities, or vice versa.

Looking for reasons for the sell-off in commodity stocks, some key prices on the New York Mercantile Exchange were in decline. Crude oil was down $1.24 to $113.77 U.S. a barrel. That put it down almost 23 per cent from the all-time high of 147.27 U.S. reached last month. Gold was down $22.40 to $792.10 U.S. an ounce. The price of bullion has dropped 8.4 per cent in the past five days, the biggest weekly loss in more than 25 years.

The Canadian financials were down probably "because of the broad sell-off of Canadian stocks," said Keith Summers, chief investment officer with Stonegate Private Counsel in Toronto.

Banking and insurance stocks didn't benefit from a shifting of investor money out of resource stocks, as has often been the case lately.

"I'm inclined to think it might have been more foreign investors who are selling Canada completely as opposed to Canadian investors who are getting out of commodities and getting into financials," Summers said.

The TSX energy index was down 3.1 per cent, having the most detrimental effect on the composite. Suncor Energy Inc. fell $2.66, or 4.8 per cent, to $53.34. EnCana Corp. dropped $3.06, or 4.2 per cent, to $70.04.

The materials index was down 4.2 per cent. Goldcorp Inc. fell $1.77, or 5.4 per cent, to $31.16. Uranium producer Cameco Corp. dropped $2.80, or 8.4 per cent, to $30.52 as analysts downgraded the stock on worries of weaker realized uranium prices and flooding at Cameco's Cigar Lake uranium project in Saskatchewan. The biggest loss on the whole exchange, in dollar terms, was from Potash Corp. of Saskatchewan Inc., which was down $10.23, or 5.4 per cent, to $179.90.

The TSX financials index was down 0.5 per cent. Bank of Nova Scotia declined 60 cents, or 1.2 per cent, to $48.89. There was an isolated case of gain among the major banks as Canadian Imperial Bank of Commerce rose 71 cents, or 1.2 per cent, to $61.21.

The Canadian dollar rose 38 basis points to 94.43 cents U.S.

In New York, stocks rose, sending the Standard & Poor's 500 Index to a third weekly gain, as lower commodity prices boosted the outlook for consumer companies and the two largest bond insurers had their credit ratings affirmed.

Wal-Mart Stores Inc.climbed the most in a week as crude slid for a second day,up $1.27 to $59.37.

Ambac Financial Corp. rallied 25 per cent, up $1.12 to $5.68, and MBIA Inc. advanced 8.7 per cent, up 90 cents to $11.22, after S&P concluded a credit review without lowering the companies' ratings.

Eight of 10 industry groups in the S&P 500 advanced as a report showing unexpected growth in New York manufacturing spurred optimism that the economy will pick up as energy and raw material prices retreat.

The S&P 500 rose 5.27 points, or 0.4 per cent, to 1,298.2. The Dow Jones Industrial Average increased 43.97, or 0.4 per cent, to 11,659.9. The Nasdaq Composite Index slipped 1.15 to 2,452.52 as Apple Inc. lost two per cent.

The advance sent the S&P 500 up 0.2 per cent on the week. The benchmark for American equities has lost almost 12 per cent this year as surging commodities and credit-market losses curbed profit growth. Earnings have slumped 23 per cent on average for the 446 companies in the S&P 500 that released second-quarter results since July 8, according Bloomberg data.

General Electric Co. added one per cent to $29.80 and contributed the most to a 0.8-percent-gain in the S&P 500 Industrials Index. The Federal Reserve Bank of New York's general economic index climbed to 2.8, from minus 4.9 a month earlier, and defied economists forecasts for a decrease of minus-4. A separate Fed report showed industrial production increased in July.

J.C. Penney Co. rose the most since February, adding 8.4 per cent to $39.94. Kohl's Corp. rose 7.3 per cent to $51.79. Both U.S. department-store chains reported second-quarter profit above the average analyst estimate by controlling costs amid reduced spending by cash-strapped shoppers.

Exxon Mobil Corp., the largest U.S. energy company, slumped 0.5 per cent to $77.07 for a third-straight weekly drop. Chevron Corp. fell two per cent to $84.25.

Canwest News Service, Reuters, Bloomberg News

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