Actual finance blog

May 14, 2011

Toronto Stock Exchange wooed by a new suitor

Filed under: Loans, economics — Tags: , , , — Professor Besto @ 3:36 pm

TMX Group Inc. (TSX: X) says it has received a written proposal for acquisition by a corporation formed by a number of unidentified Canadian financial institutions.

TMX Group is in the midst of an attempted multibillion-dollar merger with the London Stock Exchange, a proposal that has met with some opposition.

Some critics of the deal are worried it could leave Canada’s biggest stock exchange dominated by foreign interests.

A news release from TMX Group says the acquisition offer includes pension funds and banks and operates under the name Maple Group Acquisition Corporation.

The Board of Directors of TMX Group says it will evaluate the proposal.

May 10, 2011

U.K. House-Price Gauge Rises to Highest Since July, RICS Says - Bloomberg

Filed under: economics, online — Tags: , , , — Professor Besto @ 2:52 am

A U.K. house-price gauge rose to the highest level in nine months in April as demand for homes stabilised, the Royal Institution of Chartered Surveyors said.

The number of real-estate agents and surveyors saying prices fell exceeded those seeing gains by 21 percentage points, the most since July 2010, compared with 23 in March, the London- based group said in an e-mailed report today. Economists had forecast the reading would remain unchanged, according to the median of 11 estimates in a Bloomberg News survey. London was the only region to record an increase in prices.

While a lack of supply of homes is helping prop-up values, a faltering economic recovery and tighter lending conditions are curbing demand for homes. The Confederation of British Industry cut its 2011 economic growth forecast yesterday, days after the Bank of England kept its benchmark interest rate unchanged at a record low to support the recovery.

“Activity still remains subdued and it is difficult to see it picking up materially over the coming months,” RICS spokesman Michael Newey said in a statement. “There is still a long way to go before lending levels increase enough to have any real impact. Economic uncertainty may also continue to weigh on sentiment for a while.”

A measure of new buyer enquiries was zero, ending 10 months negative readings, RICS said. Still, the number of homes on the market rose, with 18 percent more estate agents reporting an increase rather than a decline in new instructions, compared with 4 percent in March, the report showed.

A measure of average sales per agent over the past three months rose to 15.2, the highest since December. Eleven percent more surveyors predicted sales would increase rather than decrease over the next three months, and the gauge on the outlook for prices rose to minus 18 from minus 23.

Halifax said yesterday that house prices fell the most in seven months in April. Nationwide Building Society also reported a decline in April.

Source

April 28, 2011

Germany’s Merck sees 1st-quarter earnings surge

Filed under: Prices, economics — Tags: , , , — Professor Besto @ 3:00 pm

German drug and chemical maker Merck KGaA is reporting a surge in first-quarter net earnings as revenues were boosted by its acquisition of Millipore Corp. and demand for liquid crystals used in flat-screen televisions.

Merck said Thursday that it earned euro344.2 million ($505 million) in the January-March quarter. That was a 78 percent increase over its net profit of euro191.4 million a year earlier.

Revenues rose 22 percent to euro2.56 billion from euro2.1 billion.

Merck, based in Darmstadt, said its acquisition last year of U payday loan lenders.S. biotechnology equipment supplier Millipore made a major contribution. It said its liquid crystals business posted “robust growth.”

Merck maintained its full-year forecast, made in February, for growth of between 35 and 45 percent in its operating earnings.

Source

April 27, 2011

Aerotropolis China air cargo plan

Filed under: economics, money — Tags: , , , — Professor Besto @ 12:04 am

Aerotropolis at a glance

The $480 million package of tax breaks for a St cashadvance. Louis cargo hub comes in several pieces. They are:

April 15, 2011

Portugal avoids default with loan repayment

Filed under: economics, legal — Tags: , , , — Professor Besto @ 1:56 pm

Portugal says it has paid out euro4.2 billion ($6.1 billion) in a bond redemption, avoiding default but further depleting its cash reserves ahead of a promised international bailout.

An official from the Finance Ministry said on condition of anonymity, in line with government policy, that Portugal repaid the maturing loan Friday, as expected.

Portuguese authorities have admitted they don’t have enough money to settle a euro7 billion debt falling due in June and have asked for financial help.

Portugal’s European partners and the International Monetary Fund have agreed to provide aid which could reach euro80 billion. But negotiations on the loan’s terms, especially how much interest Portugal will pay, are likely to take weeks.

The country is facing unsustainable borrowing costs, with its 10-year bond yield reaching 8.9 percent Friday.

THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP’s earlier story is below.

LISBON, Portugal (AP) _ Portugal is having to find euro4.2 billion ($6.1 billion) for a bond redemption, stoking financial pressure on the cash-strapped country which has requested a bailout.

Authorities say Portugal has enough money in reserve to cover the loan repayment Friday. However, they admit the country won’t be able to settle other debts in June.

Portugal’s European partners and the International Monetary Fund have agreed to provide a financial rescue package which could reach euro80 billion.

But negotiations on the terms of that loan, especially how much interest Portugal should pay on it, are likely to take weeks.

The bailout pledge hasn’t defused market tension, with the country’s 10-year bond yield reaching an unsustainable 8.9 percent Friday.

Source

April 12, 2011

Stocks fall on worries about Japan, earnings

Filed under: economics, online — Tags: , , , — Professor Besto @ 11:20 am

Stocks are falling at the opening of trading after Japan raised a measure of the severity of its nuclear crisis to the highest level and Alcoa Inc.’s first-quarter revenue growth disappointed Wall Street.

Japan raised the severity of its crippled nuclear plant, which was damaged following a March 11 tsunami, to level 7 from 5. That’s the same level as the 1986 Chernobyl disaster.

Alcoa started earnings season late Monday by saying it returned to a first-quarter profit. But it also said revenue grew to just $5.96 billion, instead of the $6.16 billion that analysts expected.

The Dow Jones industrial average is down 90 points, or 0.7 percent, to 12,291. The S&P 500 is down 9, or 0.7 percent, to 1,315. The Nasdaq composite is down 18, or 0.7 percent, to 2,753.

Source

April 7, 2011

Ouattara Ivory Coast Bond Rally Hinges on Managing Gunmen - Bloomberg

Filed under: Mortgage, economics — Tags: , , , — Professor Besto @ 5:08 am

Alassane Ouattara’s handling of his political foes and their gunmen will determine whether he can attract investors after the prospect of civil war victory sparked a rally in Ivory Coast’s international bonds.

The former International Monetary Fund director inherits a banking system shuttered by a four-month civil war, a cocoa industry in danger of losing its dominance of the global market and a treasury that defaulted on a $2.3 billion bond in January. The country is also riven by the ethnic and political divides that fueled 10 years of conflict.

“He’s certainly a president with strong credentials in the international community,” said Kevin Daly, who helps manage $6 billion in emerging market funds at Aberdeen Asset Management Plc in London. “There’s no way investors will come back if you can’t address the various interests that both his supporters and rivals have and establish a functioning government.”

Ivory Coast has missed out on a wave of foreign investment in Africa from nations such as China, crimping economic growth to an average of 1.1 percent between 2002 and 2009, compared with 5.6 percent in neighboring Ghana. To make up for the lost decade, Ouattara pledged tax cuts during a presidential election in November, while donors considered scrapping $3 billion of Ivory Coast’s $14 billion debt.

Aging Cocoa Trees

Millions of aging cocoa trees need to be replaced to protect an industry that contributes a third of Ivory Coast’s export earnings. While the country’s cocoa production was little changed in the 2009-10 season from 2002-03 at 1.22 million metric tons, Ghana’s output almost doubled to 662,000 tons over the same period.

Ouattara, who has a Ph.D. in Economics from the University of Pennsylvania, served as director for the IMF’s African department between 1984 and 1988 and governor for the Central Bank of West African States over the next two years. The prospect of him assuming power has helped the price of the country’s Eurobond rally 25 percent in 10 days.

“He’s a technocratic guy,” said Alex Vines, Africa director at the London-based Chatham House think tank. “It remains to be seen if he’ll be able to handle the in-your- faceness of African politics, where he needs to be juggling the demands of armed groups and even his political rivals.”

Ouattara, 69, enjoys most of his support in the mainly Muslim north, which has pitted its interests against a predominantly Christian south.

New Government

Ouattara has appointed Guillaume Soro, a leader of the rebels that drove back the forces of previous president, Laurent Gbagbo, as his prime minister.

He will also need to find space in his government for Henri Konan Bedie, who sidelined him to become president in the 1990s. Bedie threw his weight behind Ouattara in the run-off vote after he finished third in the first round, helping his former enemy into first place.

Troops loyal to Ouattara are currently surrounding the residence of Gbgagbo, who is holed up in a bunker at the house in Abidjan, the commercial capital, and refuses to surrender. Gbagbo triggered the political crisis when he refused to accept defeat in the Nov. 28 election, claiming voter fraud. The United Nations, the U.S. and the African Union all recognize Ouattara as the winner.

Cocoa fell 7.8 percent in the past two weeks on optimism that Ouattara’s victory was imminent. Cocoa for delivery in May slid 0.2 percent, or $5, to $2,994 per metric ton at 10:14 a.m. in London. The country’s Eurobond rose for third straight day, gaining 5.4 percent to 54.45 cents on the dollar, a four-month high, at 9:14 a.m. in Abidjan, according to Bloomberg data.

Stooge of French

Gbagbo remains key to pacifying his youth militias, known as the Young Patriots, according to Pierre Schori, the head of the United Nations peacekeeping mission in Ivory Coast between 2005 and 2007.

The former president has portrayed his rival and the rebels as stooges of former colonial power France, a view enforced by joint UN and French strikes that wiped out much of the army’s heavy artillery on April 4.

“What Gbagbo says now is extremely important,” Schori said in an interview from Stockholm, Sweden, where he also acted as foreign minister. “If he is taken out and his hate message is still hanging in the air, the Young Patriots will still believe all the propaganda and continue fighting him.”

The massacre of at least 800 people in the western town of Duekoue last month as Ouattara’s Republican Forces swept south, may undermine his attempts to unify the country. Ouattara’s justice minister has denied responsibility for the killings.

“When you use violence to come to power, those who you’ve violated will obviously seek revenge,” Ohoupa Sessegnon, a spokesman for Gbagbo’s Ivorian Popular Front party, said in a phone interview from Johannesburg.

Foreign-Born Parent

After having acted as prime minister under President Felix Houphouet-Boigny, who led the country to independence, Ouattara was banned from contesting the 1995 and 2000 elections under a law that disqualified those who had a foreign-born parent. Ouattara’s father was born in neighboring Burkina Faso.

The political exclusion of Ouattara and other northerners, many of whose families came from Mali and Burkina Faso to work on cocoa, coffee and cotton plantations, led to the 2002 attempt to topple Gbagbo.

Still, having won 45.9 percent of the vote against Ouattara’s 54.1 percent in the election, Gbagbo retains considerable support, especially in the south.

Ouattara’s “election victory wasn’t a landslide,” Vines said. “It’s about trying to tie Ivory Coast back together again after having been divided for about a decade. If he doesn’t show wisdom in reuniting Ivorians, it’s recipe for further serious problems.”

Source

April 2, 2011

Gov’t focus on nuke crisis angers tsunami victims

Filed under: economics, term — Tags: , , , — Professor Besto @ 11:28 am

As Japan’s prime minister visited tsunami-ravaged coastal areas for the first time Saturday, frustrated evacuees complained that the government has been too focused on the nuclear crisis that followed the massive wave.

Nearly every day some new problem at the stricken Fukushima Dai-Ichi nuclear plant commands officials’ attention _ Saturday it was a newly discovered crack in a maintenance pit that is leaking highly radioactive water into the sea.

“The government has been too focused on the Fukushima power plant rather than the tsunami victims. Both deserve attention,” said 35-year-old Megumi Shimanuki, who was visiting her family at a community center converted into a shelter in hard-hit Natori, about 100 miles (160 kilometers) from Rikuzentakata, where Prime Minister Naoto Kan stopped Saturday. More than 165,000 people are still living in shelters.

Kan’s government has been frantically working with Tokyo Electric Power Co. to solve the crisis at the nuclear complex, which has been spewing radioactivity since cooling systems were disabled by the 9.0-magnitude earthquake that preceded the tsunami on March 11.

On Saturday, nuclear safety officials announced that they had found water with levels of radioactive iodine far above the legal limit leaking from an 8-inch (20-centimeter) crack in the maintenance pit into the Pacific Ocean.

They said the crack was likely caused by the quake and may be the source of radioactive iodine that started showing up in the ocean more than a week ago.

People living within 12 miles (20 kilometers) of the plant have been evacuated and the radioactive water will quickly dissipate in the sea, but it was unclear if the leak posed any new danger to workers. People have been uneasy about seafood from the area despite official reassurances that the risk of contamination is low.

The cracked pit houses cables for one of the six nuclear reactors, and the concentration of radioactive iodine was the same as in a puddle of contaminated water found outside the reactor earlier in the week. Because of that, officials believe the contaminated water is coming from the same place, though they are not sure where.

A nuclear plant worker who fell into the ocean Friday while trying to board a barge carrying water to help cool the plant did not show any immediate signs of being exposed to unsafe levels of radiation, nuclear safety officials said Saturday, but they were waiting for test results to be sure.

Radiation worries have compounded the misery for people trying to recover from the tsunami. Nearly 25,000 are feared dead _ 11,800 confirmed _ and in addition to those living in shelters, tens of thousands more still do not have electricity or running water.

Kan’s visit Saturday to Rikuzentakata was his first to survey damage in one of the dozens of villages, towns and cities slammed by the tsunami.

“The government fully supports you until the end,” Kan told 250 people at an elementary school serving as an evacuation center quick payday loan. He earlier met with the mayor, whose 38-year-old wife was swept away.

He bowed his head for a moment of silence in front of the town hall, one of the few buildings still standing, though its windows are blown out and metal and debris sit tangled out front.

Kan also stopped at the sports complex being used as a base camp for nuclear plant workers, who have been hailed as heroes for laboring in dangerous conditions. He had visited the nuclear crisis zone once before, soon after the quake.

Workers have been reluctant to talk to the media about what they are experiencing, but one who spent several days at the plant described difficult conditions in an anonymous interview published Saturday in the national Mainichi newspaper.

When he was called in mid-March to help restore power at the plant, he said he did not tell his family because he did not want them to worry. But he did tell a friend to notify his parents if he did not return in two weeks.

“I feel very strongly that there is nobody but us to do this job, and we cannot go home until we finish the work,” he said.

Early on, the company ran out of full radiation suits, forcing workers to create improvised versions of items such as nylon booties they were supposed to pull over their shoes.

“But we only put something like plastic garbage bags you can buy at a convenience store and sealed them with masking tape,” he said.

He said the tsunami littered the area around the plant with dead fish and sharks, and the quake opened holes in the ground that tripped up some workers who could not see through large gas masks. They had to yell at one another to be heard through the masks.

“It’s hard to move while wearing a gas mask,” he said. “While working, the gas mask came off several times. Maybe I must have inhaled much radiation.”

Radiation is also a concern for people living around the plant. In the city of Koriyama, Tadashi and Ritsuko Yanai and their 1-month-old baby have spent the past three weeks in a sports arena converted into a shelter. Baby Kaon, born a week before the quake, has grown accustomed to life there, including frequent radiation screenings, but his parents have not. Their home is fine, but they had to leave because it is six miles (10 kilometers) from the nuclear plant.

Asked if he had anything he would like to say to the prime minister, the 32-year-old father paused to think and then replied: “We want to go home. That’s all, we just want to go home.”

In Natori, where about 1,700 people are living in shelters, others had stronger words for Kan. Toru Sato, 57, lost both his wife and his house in the tsunami and said he was bothered that Kan’s visit to the quake zone was so brief _ about a half day.

“He’s just showing up for an appearance,” Sato said. “He should spend time to talk to various people, and listen to what they need.”

Source

March 18, 2011

A week after quake, Japan’s leader vows to rebuild

Filed under: economics, term — Tags: , , , — Professor Besto @ 11:36 am

Sirens wailed Friday along a devastated coastline to mark exactly one week since an earthquake and tsunami triggered a nuclear emergency, and the government acknowledged it was slow to respond to the disasters that the prime minister called a “great test for the Japanese people.”

The admission came as Japan welcomed U.S. help in stabilizing its overheated, radiation-leaking nuclear complex and raised the accident level for the crisis, putting it on a par with the 1979 Three Mile Island accident in Pennsylvania.

Nuclear experts have been saying for days that Japan was underplaying the severity of the problems at the Fukushima Dai-ichi power plant.

Still, Prime Minister Naoto Kan vowed that the disasters would not defeat his country.

“We will rebuild Japan from scratch,” he said in a nationally televised address, comparing the work with the country’s emergence as a global power from the wreckage of World War II.

“In our history, this small island nation has made miraculous economic growth thanks to the efforts of all Japanese citizens. That is how Japan was built,” he said.

Last week’s 9.0 quake and tsunami set off a cascade of problems by knocking out power to cooling systems at the nuclear plant on the northeast coast. Since then, four of Fukushima’s six reactor units have seen fires, explosions or partial meltdowns.

The unfolding disaster has left more than 6,900 dead _ exceeding the 1995 earthquake in Kobe, Japan, that killed more than 6,400. Most officials, however, put estimates of the dead from last week’s disasters at more than 10,000.

It also has led to power shortages, factory closures, hurt global manufacturing and triggered a plunge in Japanese stock prices.

Chief Cabinet Secretary Yukio Edano admitted that Japan was not prepared for what happened.

“The unprecedented scale of the earthquake and tsunami that struck Japan, frankly speaking, were among many things that happened that had not been anticipated under our disaster management contingency plans,” he said.

“In hindsight, we could have moved a little quicker in assessing the situation and coordinating all that information and provided it faster,” he said.

The twin disasters have officially left more than 6,900 people dead and more 10,700 missing. Emergency crews are facing two challenges: cooling the nuclear fuel in reactors where energy is generated and cooling the adjacent pools where thousands of used nuclear fuel rods are stored in water.

Both need water to stop their uranium from heating up and emitting radiation, but with radiation levels inside the complex already limiting where workers can go and how long they can stay, it’s been difficult to get enough water inside.

Water in at least one fuel pool _ in the complex’s Unit 3 _ is believed to be dangerously low. Without enough water, the rods may heat further and spew radiation.

“Dealing with Unit 3 is our utmost priority,” Edano told reporters.

At the stricken complex, military fire trucks sprayed the reactor units Friday for a second day, with tons of water arcing over the facility in desperate attempts to prevent the fuel from overheating and emitting dangerous levels of radiation.

“I think they are racing against the clock,” Yukiya Amano, the head of the U.N.’s International Atomic Energy Agency said of the efforts to cool the complex, after arriving in Tokyo.

Japan’s nuclear safety agency ratcheted up its rating for the Fukushima crisis, reclassifying the nuclear accident from Level 4 to Level 5 on a seven-level international scale. The International Nuclear Event Scale defines a Level 4 incident as having local consequences and a Level 5 as having wider consequences. The 1986 Chernobyl disaster was rated as 7.

While nuclear experts have been saying for days that Japan was underplaying the crisis’ severity, Hidehiko Nishiyama of the nuclear safety agency said the rating was raised when officials realized that at least 3 percent of the fuel in three of the complex’s reactors had been severely damaged. That suggests those reactor cores have partially melted down and thrown radioactivity into the environment.

While Tokyo has welcomed international help for the natural disasters, the government initially balked at assistance with the nuclear crisis. That reluctance softened as the problems at Fukushima multiplied.

On Friday, though, Edano said Tokyo was asking Washington for help and that the two were discussing the specifics of the problem guaranteed personal loan approval.

The U.S. said its technical experts are now exchanging information with officials from Tokyo Electric Power Co., which owns the plant, and with government agencies.

A U.S. military fire truck was also used to help spray water into Unit 3, according to air force Chief of Staff Shigeru Iwasaki, though the vehicle was apparently driven by Japanese workers. The Tokyo Fire Department said five of their trucks have joined in dousing operations at the unit.

The U.S. has also conducted overflights of the reactor site, strapping sophisticated pods onto aircraft to measure airborne radiation, U.S. officials said. Two tests conducted Thursday gave readings that U.S. Deputy Energy Secretary Daniel B. Poneman said reinforced the U.S. recommendation that people stay 50 miles (80 kilometers) away from the Fukushima plant.

Low levels of radiation have been detected well beyond Tokyo, which is 140 miles (220 kilometers) south of the plant, but hazardous levels have been limited to the plant itself. Still, the crisis has forced thousands to evacuate and drained Tokyo’s normally vibrant streets of life, its residents either leaving town or staying in their homes.

The Japanese government has been slow in releasing information on the crisis. In a country where the nuclear industry has a long history of hiding safety problems, this has left many people, in Japan and among governments overseas, confused and anxious.

In the disaster zone, tsunami survivors, rescue workers and ordinary people observed a minute of silence Friday at 2:46 p.m. _ the moment a week ago when the quake struck. Many were bundled up against the cold. As a siren blared, they lowered their heads and clasped their hands in prayer.

In the largely destroyed town of Hirota, 70-year-old Tetsuko Ito wept as she hugged an old friend she met at a refugee center. One of her sons was missing and another had been evacuated from his home near the Fukushima complex.

“Every day is terrifying. Is there going to be an explosion at the reactor? Is there going to be word my other son is dead?” she said.

She searched for her missing son for three days, then her car ran out of gas.

“I think he’s dead. If he was alive, he would have contacted someone, somehow,” she said. “My other son is alive, but we don’t know if there’s going to be a nuclear explosion.”

If the situation gets worse in Fukushima, she said her son and his family will have to live at her already crowded house, which escaped the tsunami.

“It’s strange when this destroyed area is a place someone would consider safe,” she said.

Police said more than 452,000 people made homeless by the quake and tsunami were staying in schools and other shelters, as supplies of fuel, medicine and other necessities ran short. Both victims and aid workers appealed for more help as the chances of finding more survivors dwindled.

About 343,000 Japanese households still do not have electricity and about 1 million have no water.

At times, Japan and the U.S. _ two very close allies _ have offered starkly differing assessments over the dangers at Fukushima. U.S. Nuclear Regulatory Commission Chairman Gregory Jazcko said Thursday that it could take days and “possibly weeks” to get the complex under control. He defended the U.S. decision to recommend a 50-mile (80-kilometer) evacuation zone for its citizens, wider than the 12-mile (20-kilometer) band Japan has ordered.

Crucial to the effort to regain control over the Fukushima plant is laying a new power line to the complex, allowing operators to restore cooling systems. Tokyo Electric missed a deadline late Thursday, said nuclear safety agency spokesman Minoru Ohgoda.

Power company official Teruaki Kobayashi warned that experts will have to check for anything volatile to avoid an explosion when the electricity is turned on.

“There may be sparks, so I can’t deny the risk,” he said.

Even once the power is reconnected, it is not clear if the cooling systems will still work.

The storage pools need a constant source of cooling water. Even when removed from reactors, uranium rods are still extremely hot and must be cooled for months, possibly longer, to prevent them from heating up again and emitting radioactivity.

Source

March 12, 2011

Rehn, Barnier Confident Greece Can Accomplish Economic Reforms - Bloomberg

Filed under: economics, legal — Tags: , , , — Professor Besto @ 1:32 am

European Union commissioners Olli Rehn and Michel Barnier said they are confident in Greece’s efforts to tackle its debt in the wake of its downgrade by Moody’s Investors Service.

Rehn, the EU’s economic and monetary affairs commissioner, and Barnier, who is in charge of financial-services policy in the region, said they are “confident in the actions the Greek government is carrying out.” Planned EU rules to regulate credit-rating companies “will be fundamental and tackle the problems we know exist,” the commissioners said in an e-mailed statement today.

Proposals on rating-firm regulation are “due before the end of the summer,” they said in the statement no fax needed payday loans. “The last few days highlight, once again, how important a more and better regulated environment for ratings is.”

Moodys downgraded Greece’s government bond ratings to B1 from Ba1, and assigned a negative outlook to the rating, on March 7. The ratings firm today cut Spain’s credit rating to Aa2, citing its concerns that the cost of shoring the banking industry will eclipse government estimates.

Source

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