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Tuesday, April 30, 2013

Gold Cycle: The Facts Within! (New Blog Posting)

Mercantile Exchange Nepal Limited



 New post
 
 Post name :Gold Cycle: The Facts Within!
 Post Contents :  
 A normal business cycle has phases like expansion, crest, contraction, recession, trough, and recove more.
 Posted Date: 5/1/2013 11:40:24 AM
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MENAFN Summary- Daily Business News

MENAFN Summary - Daily Business News
   
Middle East North Africa - Financial Network
 

Britons join challenge to live below poverty line
Kathy Trevelyan pushes the bland mixture of gloopy rice and cubes of vegetables around the plate with her fork, contemplating five days of eating ...

UAE- Aldar Q1 earnings fall 68% to Dh154.3m
Abu Dhabi's biggest realty firm Aldar Properties' net profit fell 68 per cent in the first quarter of the year to Dh154.3 ...

UAE- Global FDI flow to hit $1.4 trillion
The global flow of foreign direct investment, or FDI, a driving force in the globalisation process, is poised to stage a recovery in 2013 ...

Saudi- Media sector dominates market performance
The Saudi stock market continued its positive movement, marking another gain of 0.18 percent yesterday. The Tadawul All-Share Index , ...

British Petroleum Posts First Quarter Profits Of $16.5 Billion
British Petroleum's sale of its Russian joint venture helped make its cost profit in the first quarter of 2013 more than triple in ...

Unemployment in EU, Euro zone up again
> Euro zone unemployment rate was 12.1 percent in March, up from 12.0 percent in February. Unemployment rate was 10.9 percent, ...

Cyprus approves USD13.10b EU, IMF bailout deal
The Cypriot parliament approved the USD13.10-billion bailout agreement with the Eurogroup and the International Monetary Fund , reported Xinhua ...

Google Plus racks up followers, but not all are devoted
When Google launched its social networking service, Google Plus, during the summer of 2011, tens of millions of people clamoured to sign up for an ...

First Australian banknote set to fetch $3.6 million

Australia's first banknote, printed 100 years ago and found in a letter in England in 1999, has gone on sale for Aus$3.5 million , ...

Saudi- US Energy Independence Idea 'Naive': Naimi
Saudi oil minister Ali al-Naimi on Tuesday called the US push for energy independence "naive," saying the country will continue to need ...

Qatar- Ooredoo Announces its Q1 Financial Results
Ooredoo on Tuesday announced results for the three months ended 31 March 2013: a quarter in which the Group launched a ...

KIPCO posts KD 8.6 mln in net profits for Q1 ''13
> Kuwait Projects Company announced on Tuesday that it secured net profit of KD 8.6 million and ...

UAE- Sorouh Q1 
earnings 
surge 21.6%
Sorouh Real Estate's profit climbed 21.6 per cent in the first-quarter of 2013 compared to the same period last year. The rise in ...

UAE- RAK Properties posts Q1 profit of Dh40.1m
RAK Properties, Ras Al Khaimah's biggest property developer listed on Abu Dhabi Stock Exchange, has earned a net profit of Dh40.1 million ...

Saudi- Two brothers drown at dam; four die in Al-Kharj
Civil Defense divers recovered the bodies of two brothers who died after drowning at the overflowing Klakh Dam south of Taif yesterday. The two ...

'4Real'?, New Zealand reveals banned baby names
New Zealand officials released a list of baby names put forward by parents that were rejected because they were too bizarre or offensive, including ...

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Tuesday's Stock Market Report from UK-Analyst: featuring BP, ASOS and Scotgold



From UK-Analyst.com: Tuesday 30th April 2013

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The Markets

The Eurozone unemployment rate hit a record high of 12.1% in March according to European statistics agency Eurostat - up from February's reading of 12%. The figures masked vast differences in unemployment levels across different countries however. Greece and Spain recorded the highest unemployment rates in the Eurozone, at 27.2% and 26.7% respectively, while Austria, at 4.7%, and Germany, at 5.4%, demonstrated the lowest rates in the region. Separately, data released today revealed that inflation in the Eurozone fell to 1.2% in April - significantly below the ECB's target of close to, but below 2%, intensifying pressure on the central bank to stimulate growth by cutting interest rates. Sarah Hewin, a Senior Economist at Standard Chartered Bank, gave her thoughts on a potential rate cut and said, "It's a close call, but we expect a rate cut this week. With inflation weaker than expected, unemployment rising yet again and signs of a longer recession, it would be a confidence boost."

Staying in Europe, Spain - the Eurozone's fourth largest economy - slipped further into recession, with data from the Spanish Statistics Institute exposing a 0.5% contraction in the nation's GDP over the first three months of the year. The figures mark the seventh successive quarter Spain has seen its economy contract and reveals a huge slump in domestic demand. The uninspiring news comes just a week after Spain's government cut its growth forecast for 2013, projecting the economy to shrink by 1.3% after previously forecasting a contraction of 0.5%. Although the data does not look fantastic, analysts do see an improvement taking shape next year, with Silvio Peruzzo, an analyst at Nomura, commenting, "We recognise the reforms of the government have been significant, but the problem is the starting position of the Spanish economy was much worse than any other European economies and adjusting in this environment is a lengthy process."

Here in the UK, Chancellor George Osborne has suggested that the Financial Policy Committee (FPC) should attempt to ensure that that the drive for longer-term economic stability does not impede an economic recovery. Up to now the FPC has already shown some flexibility by allowing British banks to lower the minimum amount of cash they must hold to operate if the extra money is lent to business and other parts of Britain's sluggish economy. However, the committee has not budged on longer-term capital and last month ordered banks to plug a capital hole of 25 billion pounds by the end of this year. Osborne stressed, "It is particularly important, at this stage of the cycle, that the Committee takes into account, and gives due weight to, the impact of its actions on the near-term economic recovery."

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At the London close the Dow Jones was down by 18.8 points at 14,799.95 and the Nasdaq was up by 9.24 points to 2,876.19.

In London the FTSE 100 fell by 27.90 points to 6,430.12; the FTSE 250 finished 42.93 points lower at 13,949.87; the FTSE All-Share was down 13.36 points to 3,390.18; and the FTSE AIM Index slipped by 0.35 points to 706.74.

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Broker Notes

Panmure Gordon retained its "buy" recommendation on construction group Balfour Beatty(BBY) with a 223p target price. The broker acknowledges that yesterday's trading update was disappointing, with UK construction problems resulting in earnings downgrades. However, Panmure maintains that Balfour Beatty remains a major operator in the global infrastructure arena and is impressed with management's swift reaction to the unfavourable trading conditions in the UK. The shares slipped by 7p to 215.9p.

Canaccord Genuity maintained its "buy" stance on Goals Soccer Centres (GOAL) with a 145p target price. The broker feels that the increased focus on operational efficiencies as opposed to roll-out, investment into IT and enhanced management structures, should begin to deliver an improving performance as the year progresses. In particular, Canaccord envisages 30% equity growth from debt reduction alone, with additional upside coming from growing like-for-like sales. The shares remained unchanged at 136p.

N+1 Singer re-iterated its "sell" stance on pig semen group Genus (GNS) with a 1,348p target price. The broker noted today's IMS which indicated that market conditions for Genus continue to be challenging, characterised by pressure from feed prices. Furthermore, the update has done nothing to ease N+1 Singer's fears on reported higher costs and a worsened agricultural outlook, two factors which underpin its "sell" stance. The shares dived by 43p to 1,355p.

Blue-Chips

Oil giant BP (BP) revealed that replacement cost profit - which strips out the effect of the oil price - grew from $4.78 billion (3.07 billion pounds) to $16.6 billion (10.67 billion pounds) over the first three months of the year, largely due to the proceeds of the TNK-BP joint venture sale. However, profits were down by 8.7% at $4.2 billion (2.7 billion pounds) ignoring one-off effects, such as the aforementioned asset sale. The group also confirmed that underlying oil and gas production was 4% higher than in the previous quarter in an increase boosted by hikes in production from major projects in Angola and the North Sea. The shares climbed by 9.65p to 466.4p.

Imperial Tobacco (IMT) announced a 4.2% drop in revenues to 13.38 billion pounds for the 6 months ended 31st March while operating profits fell by 9.7% to 1.2 billion pounds. The group attributed this downturn to a poor trading performance in Europe, particularly Spain where illicit trade is on the rise in the face of rising unemployment. The Lambert and Butler brand owner also admitted that a revised pricing strategy in the US, coupled with reduced trade stock levels, saw tobacco revenues fall in the country. The shares edged up by 1p to 2,300p.

Premier Inn and Costa Coffee owner Whitbread (WTB) reported a 11.4% rise in pre-tax profits to 356.5 million pounds for the year ended 28th February on a revenue increase of 14.2% to 2.03 billion pounds. The bulk of the increase came in the form a 29% uplift in profits for Costa Coffee as the relatively cold weather over the period boosted demand for hot drinks. The update prompted broker Liberum Capital to maintain its "buy" stance on the group, which fell by 56p to 2,555p.

Mid Caps

Transport operator Stagecoach (SGC) claimed that overall profitability has been "good" over the current financial year, with like-for-like revenues up by 3.6% within its UK Bus operations over the 48 weeks ended 31st March. The group also revealed that revenues generated from within its North American operations climbed by 9.7% in the 11 months ended 31st March. The North American figure includes Megabus.com and excludes its disposed Wisconsin school bus business. The shares crept upwards by 0.6p to 307.5p.

Medical group NMC Health (NMC) announced an 11% growth in revenues to $139 million (89.4 million pounds) for the three months to March after strong growth across all of its divisions. The group's healthcare division grew turnover by 11%, benefiting from increased demand for clinical services while its distribution division demonstrated revenue growth of 10.7% in an increase driven by a strong trading performance in the UAE, combined with the introduction of new product lines. The shares were down by 27.8p at 310p.

Oil exploration group Heritage Oil (HOIL) revealed an increase in pre-tax losses from $63 million (40.5 million pounds) to $182 million (117 million pounds) for 2012 as petroleum revenues dipped slightly from $9 million (5.8 million pounds) to $8.8million (5.65 million pounds). The group attributed this increase in losses to acquisition costs, including a $72.3 million (46.5 million pounds) charge in relation to its acquisition of interests in Nigeria which are now producing 12,350 bopd net to Heritage. Recent consensus on the stock has been marginally positive amongst brokers, with Fox-Davies retaining its "buy" recommendation earlier this month. The shares decreased by 10.2p to 160p.

Small Caps

Metals miner Vane Minerals (VML) expects revenues from its gold and silver operations at its joint-venture in Mexico to be approximately 20% lower than previously forecast. The company blamed a combination of declining commodity prices, lower grades of gold and silver being mined and the appreciation in the exchange rate of the Mexican Peso against the U.S. dollar. The group also confirmed that is now investigating its options with regards to a potential sale of its uranium assets as it looks to streamline its business. The shares slid by 0.05p to 0.5p.

Diagnostic tool manufacturer Avacta (AVCT) posted revenues of 1.15 million pounds for the 6 months ended 31st January, down from 1.72 million pounds a year previously. Pre-tax losses subsequently grew from 506,000 pounds to 907,000 pounds over the period. The group blamed this drop off in performance to the introduction of its second generation Optim product, an analytical instrument, and the time spent training staff at sales partner ForteBio. The shares finished 0.03p down at 1.13p.

Online retail group Asos (ASC) revealed that group revenues were up by 33% to 359.7 million pounds for the six months ended 28th February, while pre-tax profits grew by 19% to 25.7 million pounds. The increase was attributed to a huge uplift in sales in the US, with retail sales up by 54% to 35.5 million pounds . The company - currently the largest on AIM, valued at around 2.6 billion pounds - went on to confirm that the widely anticipated launches of its Russian and Chinese websites are on track to go ahead this year. The update prompted brokers Oriel Securities, Investec and Canaccord Genuity all to retain their "buy" stances, while Espirito Santo Execution took a different view and maintained its "sell" stance. The shares jumped by 124p to 3,200p.

Software group Sanderson* (SND) revealed that profit from operating activities grew by more than 10% to around 0.9 million pounds for the six months ended 31st March. The group also stressed that its order book remains "strong" while gross margins have improved to almost 88% compared with 85% in the comparable period last year and 82% in the previous year. However, the group warned that it has not detected a noticeable improvement in general UK economic trading conditions which remain "challenging" and highlighted the sluggish trend in the traditional mail order fulfilment markets. The shares dropped by 0.5p to 49p.

Miners Scotgold Resources (SGZ) announced that recent studies have confirmed that its Cononish project near Tyndrum in Stirlingshire is economically viable, with forecasts suggesting that the mine will generate 26.3 million pounds in pre-tax cash flow over its life cycle. However, given the relatively low current gold price, the gold miner has decided to delay any decision to raise equity finance for the project. Westhouse Securities re-iterated its "buy" recommendation on the back of the news and maintained its target price of 9p. The shares lost 0.625p and finished at 1.5p.

Software supplier Zoo Digital (ZOO) expects to report revenues in the range of $10.3 million (6.6 million pounds) to $10.4 million (6.7 million pounds), with adjusted EBITDA of approximately $0.7 million (0.45 million pounds) and an adjusted loss before tax of approximately $1.2 million (0.77 million pounds). The group said it has been able to deliver such results because it reacted quickly to cut its cost base against a backdrop of "turbulence" in the home entertainment market. The shares gained 0.25p, ending the day at 7p.

* Sanderson is a corporate client of Rivington Street Holdings, the ultimate owner of UK-Analyst.

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We do not recommend or endorse any vendor/trainer/product/service other than our own. It is up to each member to decide whether what an advertiser offers is right for you. We take every care to ensure that scams and spamming are not run on this website, but we recommend that any purchaser/service user take every precaution possible to satisfy themselves of the authenticity of any service/product purchased and responsibility for this lies solely with the purchaser. 

 


| 04.30.13 | Top JPMorgan official steps down

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FierceFinance

April 30, 2013
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Today's Top Stories

  1. Top JPMorgan official steps down
  2. Pimco transitions to life after Gross
  3. Legislation may push big banks to break up
  4. The return of portfolio risk
  5. Do banks use loan-loss reserves to pad earnings?


Also Noted: Spotlight On... Hedge fund vs. bank staffing
JPMorgan, Citibank sued over mortgage loans; Moody's downgrades public finance and much more...

News From the Fierce Network:
1. HR, compliance partnership will work wonders
2. Searching for the tipping point in the security industry
3. Symantec: Small companies hit hardest by cybercriminals


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Today's Top News

1. Top JPMorgan official steps down

By Jim Kim Comment | Forward | Twitter | Facebook | LinkedIn

In the aftermath of the financial crisis, Goldman Sachs asked a lot of partners to delay retirement so as to not paint a picture of top executives bailing out of a sinking ship. The issue is relevant in light of the recent move by Frank Bisignano, co-chief operating officer at JPMorgan Chase, who is stepping down to become the CEO of First Data.

"With Mr. Bisignano's departure, executives who once surrounded Mr. Dimon as he helped steer the bank through the 2008 financial crisis will be even thinner. Several other executives have already left, including Heidi Miller, James E. Staley, Bill Winters and Steve Black," notes DealBook.

It would be very hard to conclude that JPMorgan Chase is a sinking ship and that top executives across the board are bailing out. This is hardly an existential issue. The viability of the firm going forward is not at stake.

But the bank faces criminal prosecutions in several areas, notably about whether it misled regulators and investors about the botched London Whale trades, which cost the firm so dearly. At a time like this, it's understandable that people will interpret as somehow linked to the London Whale controversy.

All in all, the chance to run a big company like First Data doesn't come around often. Many would leap at the opportunity. That's likely the prime motivation for Bisignano.

For more:
- here's the article

Read more about: First Data, JPMorgan Chase
back to top


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2. Pimco transitions to life after Gross

By Jim Kim Comment | Forward | Twitter | Facebook | LinkedIn

Bill Gross is the prototypical "Key Man" at an asset management company. He is still synonymous with Pimco in the eyes on many, but you have to applaud the board of the company for diversifying a bit with an eye on the future.

Bloomberg reports that the firm is "becoming less dependent on Bill Gross, preparing for an eventual future without the world's best-known bond investor and adding pressure on its rising stars to live up to his legacy."

The company has no choice now but to downplay the strong personal brand that it once marketed so well. Concrete steps have been obvious. Gross oversees a smaller share of Pimco's mutual-fund assets and pulls in less of its total cash. The $289 billion Pimco Total Return Fund got 19 percent of Pimco's new mutual-fund deposits for the past two years, down from 42 percent in the prior period. The article also notes that the percentage of mutual-fund assets managed by Gross personally fell to 63 percent as of March 31 from 84 percent a decade ago.

The future of the firm hopefully will fall seamlessly into the laps of the rising stars, identified as fixed-income managers Daniel Ivascyn of Pimco Income, Chris Dialynas of Pimco Unconstrained Bond Fund and Mark Kiesel, global head of corporate bonds.

The pressure is also on Mohamed El Erian, who was hired as CEO and co-CIO, to work alongside Gross. It will be up to him to shape the firm of the future, and try to become the new face of Pimco over time. He's well on his way. 

For more:
- here's the article

Related Articles:
PIMCO employee plays hardball

 

Read more about: PIMCO, Bill Gross
back to top



3. Legislation may push big banks to break up

By Jim Kim Comment | Forward | Twitter | Facebook | LinkedIn

There have been many calls for big banks to break themselves up, either to enhance shareholder value or to end the "too big to fail" controversy. But no big bank has decided to take that route, despite their still-weak stock prices.

So what would it take for them to finally take such a step?

Some think the answer is at hand in the Brown-Vitter proposal, which would dramatically restructure the balance sheet of top banks, forcing them to eschew debt financing in favor of equity financing and to hold what some see as draconianly high levels of capital. Indeed, the biggest banks would be required to hold up to 15 percent of assets in reserve. In contrast, Basel III asks that banks hold 7 percent of Tier 1 capital as a percent of risk-weighted assets, plus as much as 2.5 percent extra for super-sized banks (so far none have been put in that category).

The banks will fight the stepped up capital requirement proposal with everything they've got. The lobbying battle will be one for the ages. But let's assume for a moment that they'll lose -- what then?

As noted by a Washington Post editorial, "This would likely force the Big Four to spin off much of their current business, defusing systemic risk that Mr. Brown and Mr. Vitter believe they now pose."

You will hear a lot of rhetoric from banks about the evils of the higher and simpler capital requirement proposal. If such rhetoric is substantially true, then big bank boards would have to seriously consider whether it would be better for shareholders to break up into smaller pieces. Such break-ups might end up being a stroke of genius.

For more:
- here's the item



 

Read more about: Capital Ratio, Bank break ups
back to top



4. The return of portfolio risk

By Jim Kim Comment | Forward | Twitter | Facebook | LinkedIn

Record low interest rates have presented some massive asset allocation challenges for banks. Net interest margins remain under pressure, and that is forcing banks to consider their balance sheets in a whole new light. Some will be forced to make some big changes in a search for higher yields, increasing their exposure to higher-yielding fare such as lower-rated corporate bonds, CMBSs, and CLOs and perhaps even CDOs.

Of course, banks could also boost their loans significantly, and find ways to charge higher rates. As of now, that seems less likely than a shift in the investment portfolio. The hunt for yield is a phenomenon not limited to banks. The entire credit buy-side is facing the same issue, and they will have even less qualms about plowing forward into risker securities. 

The Financial Times notes that, "You might think the prospect of a flood of junk bonds and leveraged loans, should Silver Lake's buyout bid for Dell be accepted, would be enough to chill debt markets, but you would be wrong. Among the bankers who scoop up all these loans and package them into new securities for sale to investors, a common complaint is a shortage of 'product'. Dell is product. The complaint should be a warning sign. Too much demand from Wall Street could lead to riskier lending practices, as lenders race to get loans written and ready for selling on. It is a tail-wags-dog situation similar to the US housing market mania before 2007."

Certainly, the CMBS market is heating up. At some point, the RMBS will as well.

With the financial crisis of 2008 still fresh in the minds regulators, structured finance is as hot as ever. I can only hope that the understanding of such techniques has deepened in the corridors of regulatory bodies, as well as on Wall Street.

For more:
- here's the article



 

 

Read more about: Structured Finance, Portfolio Risk
back to top



5. Do banks use loan-loss reserves to pad earnings?

By Jim Kim Comment | Forward | Twitter | Facebook | LinkedIn

The build-up of loan loss and other reserves over the past few years was a necessary move. But as the economy started to improve and banks made headway on cleaning up their balance sheets, banks have been releasing these reserves in droves, padding earnings significantly.

The top five consumer banks added about $8.7 billion to their reserves in 2010. The next year, the banks released $27.5 billion. In 2012, they released $22.5 billion. We may be seeing another upswing. The top five banks released $5 billion in the first quarter of 2013, accounting for roughly a quarter of their total profits, according to SNL Financial data. That's up from $3.7 billion in the fourth quarter of 2012.

The Washington Post reports that regulators are concerned. The OCC "spent much of last year cautioning banks against draining their reserves amid a fragile economic recovery," it noted, adding that the big worry is that "lenders would not be prepared to incur more losses from home-equity loans and commercial loans taken out in 2004 to 2008."

Most expect more reserve releases in upcoming quarters, as banks experience considerable improvement in the quality of their loan portfolios. The accounting rules in this area are up for change, which could result in reduced releases in the future. As for now, banks will err on the side of caution, even if it creates an appearance that they are managing earnings.

Analyst Mike Mayo was quoted saying, "The large banks always have a degree of a black-box element, so it's tough to ever know for sure if the drawdown of reserves is entirely appropriate."

For more:
- here's the article

Related Articles:
New standard for loan loss reserves triggers controversy
 

 

Read more about: Loan Loss Reserves, Reserve Releases
back to top



Also Noted

SPOTLIGHT ON... Hedge fund vs. bank staffing

The refrain in Europe right now is quite familiar. Bank executives are saying that the new regulatory push will prod more bankers to exit the industry to join hedge funds, leading to a talent drain. Such predictions were rife in the U.S. as well over the past few years, and many funds indeed benefitted as banks wound down certain proprietary operations. But in the end, it hasn't had much of an impact on the industry. No one is irreplaceable. Article

 

Company news: 
>KKR steps into lending opportunity. Article
>JPMorgan, Citibank sued over mortgage loans. Article
>Morgan Stanley hires new communications exec. Article
>Moody's downgrades public finance. Article
>Credit Suisse communications exec leaves. Article
>Goldman Sachs to lead Apple debt underwriting. Article
>Deutsche Bank to strengthen balance sheet. Article
Industry news:
>Henry Blodget generates criticism. Article
>Hedge funds load up on JCPenney debt. Article
>CDS index drops to three-year low. Article
>Is gold on the verge of a breakout? Article
And finally…Google Now vs. Siri. Article


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