January 2010

Amazon.com Inc Earnings

January 29, 2010

Amazon.com Inc Earnings

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European stocks rally in midday trading

January 29, 2010

European stocks rally in midday trading

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The U.S. dollar little changed ahead of important U.S. reports  

January 29, 2010

The U.S. dollar little changed ahead of important U.S. reports

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Unemployment Sector Remains Beat in Euro Zone Pressuring Price Levels

January 29, 2010

Unemployment Sector Remains Beat in Euro Zone Pressuring Price Levels

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Benitec Limited (ASX:BLT) Updates On Progress Of The US Graham Patent 10/646,070 Notice of Allowance

January 29, 2010

Benitec Limited (ASX:BLT) Updates On Progress Of The US Graham Patent 10/646,070 Notice of Allowance

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Anglo Australian Resources NL (ASX:AAR) Quarterly Report For The Period Ended 31 December 2009

January 29, 2010

Anglo Australian Resources NL (ASX:AAR) Quarterly Report For The Period Ended 31 December 2009

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ABN Newswire Stocks to Watch: January 29, 2010

January 29, 2010

ABN Newswire Stocks to Watch: January 29, 2010

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Asian Markets Overview of January 29

January 29, 2010

Asian Markets Overview of January 29

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Pan Asia Corporation Limited (ASX:PZC) Appoints Mr Domenic Martino As Chairman

January 29, 2010

Pan Asia Corporation Limited (ASX:PZC) Appoints Mr Domenic Martino As Chairman

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Texon Petroleum Limited (ASX:TXN) Quarterly Report For The Period Ended 31 December 2009

January 29, 2010

Texon Petroleum Limited (ASX:TXN) Quarterly Report For The Period Ended 31 December 2009

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WestSide Corporation Limited (ASX:WCL) Quarterly Report For The Period Ended 31 December 2009

January 29, 2010

WestSide Corporation Limited (ASX:WCL) Quarterly Report For The Period Ended 31 December 2009

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Stirling Resources Limited (ASX:SRE) Quarterly Report For The Period Ended 31 December 2009

January 29, 2010

Stirling Resources Limited (ASX:SRE) Quarterly Report For The Period Ended 31 December 2009

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BMW expects growth in profitibility in 2010

January 29, 2010

BMW expects growth in profitibility

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Infenion posts better than expected profits in the fiscal first quarter

January 29, 2010

Infenion posts better than expected profits in the fiscal first quarter

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Toshiba sees rise in chip business

January 29, 2010

Toshiba sees rise in chip business

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Minister: Toyota must retain consumer confidence

January 29, 2010

Minister: Toyota must retain consumer confidence

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Davos addresses climate change issues

January 29, 2010

Davos addresses climate change issues

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Davos addresses climate change issues

January 29, 2010

Davos addresses climate change issues

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Europe Ahead: European inflation and unemployment will probably continue rising

January 29, 2010

Europe Ahead: European inflation and unemployment will probably continue rising

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Europe Ahead: European inflation and unemployment will probably continue rising

January 29, 2010

Europe Ahead: European inflation and unemployment will probably continue rising

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Ford reports $2.7b profit in 2009

January 29, 2010

Ford reports $2.7b profit in 2009

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Ford reports $2.7b profit in 2009

January 29, 2010

Ford reports $2.7b profit in 2009

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A number of fundamentals from Japan showing rising deflation risks and rebounding manufacturing sector

January 29, 2010

A number of fundamentals from Japan showing rising deflation risks and rebounding manufacturing sector

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A number of fundamentals from Japan showing rising deflation risks and rebounding manufacturing sector

January 29, 2010

A number of fundamentals from Japan showing rising deflation risks and rebounding manufacturing sector

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Video: Options Indicate Traders Turn Wary of Emerging Markets: Video

January 29, 2010

Jan. 29 (Bloomberg) — Bloomberg’s Sara Eisen reports on the outlook for investments in emerging markets. (Source: Bloomberg)

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Stock Tax May Reduce U.S. Trading Volume 90%, Interactive Brokers CEO Says

January 29, 2010

By Nina Mehta and Whitney Kisling Jan. 29 (Bloomberg) — Taxing equity trades may reduce U.S. stock market volume by 90 percent, Interactive Brokers Group Inc. Chief Executive Officer Thomas Peterffy said. A transaction tax was first discussed in February and revived in December, when Iowa Senator Tom Harkin and Oregon Representative Peter DeFazio said it is the “most painless way” to fund the government’s deficit and curb speculation. French President Nicolas Sarkozy said Jan. 27 that a European debate on the subject is unavoidable. “The mother of all creators of havoc on Wall Street is this looming transaction tax,” said Peterffy, who is also president of the brokerage and automated market-making company, in an interview yesterday. Interactive Brokers is based in Greenwich, Connecticut. “Trading volumes would plunge by about 90 percent, markets would become illiquid and tens of thousands of people would lose their jobs.” Sending a fee to the government for every transaction would hurt asset managers, brokerages and so-called high-frequency traders, a group that accounts for 61 percent of volume, according to New York-based research firm Tabb Group LLC. Interactive Brokers handles about one-seventh of U.S. options that change hands. An average of 10 billion shares has traded each day on U.S. exchanges since the beginning of 2009, according to data compiled by Bloomberg. $5.93 Trillion The debate follows the biggest U.S. stock market rally since the Great Depression. The Standard & Poor’s 500 Index jumped 70 percent between March 9 and Jan. 19, restoring $5.93 trillion to American equity markets. It has fallen 5.7 percent in the past two weeks as President Barack Obama proposed limiting the size of financial institutions and their proprietary trading. The proposals from Harkin and DeFazio, both Democrats, would impose a fee on transactions of stocks and derivatives, aiming to raise money for economic stimulus plans. The U.S. government’s budget deficit in the fiscal year that ended Sept. 30 was a record $1.42 trillion. Sarkozy joined U.K. Prime Minister Gordon Brown and German Chancellor Angela Merkel in supporting a tax on trades. In Europe, the money raised could be used to fund climate measures or aid for poor nations, Sarkozy said. He leads the world’s fifth-largest economy. ‘Wacky Idea’ “As leaders and intellectuals throughout the world endorse a tax, that makes it seem more reasonable and less like the wacky idea it is,” said Dan Mathisson , head of the Advanced Execution Services unit at Credit Suisse Group AG in New York. “And if other countries are willing to consider a tax, it becomes more realistic that it could pass in the U.S.” DeFazio’s proposal would put a tax of 0.25 percent on stock transactions and 0.02 percent on derivatives including futures, options, swaps and credit-default swaps. A transaction of 200 shares at $40 each would result in a $20 tax, compared with a commission of $1 for active traders at Interactive Brokers, Peterffy said. The bill’s sponsors have “no understanding whatsoever” about its likely effect, Peterffy said. To contact the reporters on this story: Nina Mehta in New York at nmehta24@bloomberg.net ; Whitney Kisling in New York at wkisling@bloomberg.net .

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Tony Blair Says `Calculus of Risk’ Changed After Sept. 11 Attacks on U.S.

January 29, 2010

By Thomas Penny and Kitty Donaldson Jan. 29 (Bloomberg) — Former U.K. Prime Minister Tony Blair said the “calculus of risk” changed after the Sept. 11 attacks and made the invasion of Iraq necessary to stop weapons of mass destruction getting into terrorist hands. Blair, who is today facing six hours of questioning in London on the conduct of the Iraq war and Britain’s part in the conflict, said that before 2001 the strategy was to contain Saddam Hussein . “Up until September 11 we thought he was a risk, but it was worth trying to contain it,” Blair said. “The crucial thing about September 11 is the calculus of risk changed. What changed my perception of risk is if these people inspired by this religious fanaticism could have killed 30,000 they would have done.” The probe, which opened on Nov. 24 and is chaired by a retired civil servant, John Chilcot , is the fifth into the war since the invasion that ousted Saddam Hussein from power. Blair backed the war and sent more than 40,000 troops, costing him popularity at home that led to his resignation in 2007. Blair said that he feared chemical and biological weapons in Iraq could get to the terrorists. “These people would use chemical or biological weapons or a nuclear device if they could get hold of one,” Blair told the hearing. From 2001 “my view was you could not take risks with this issue at all,” Blair said. “From that moment Iran, Libya, North Korea, the machinery of A.Q. Khan, the former Pakistani nuclear scientist — all of this had to be brought to an end,” he said. ‘Unremitting Message’ Blair said he wanted to send “an absolutely powerful, clear and unremitting message that after September 11 if you were a regime engaged in WMD, you had to stop.” Blair said in September 2002 that a dossier of intelligence showed “beyond doubt” that Iraq had weapons of mass destruction. The inquiry has been told that the information in the dossier, which included a claim that Iraq could deploy missiles in 45 minutes, contained a number of caveats. The Iraq committee has already heard evidence from senior diplomats and ministers who were involved in the decision to back the U.S-led invasion in 2003. Prime Minister Gordon Brown , who was finance minister at the time, will give evidence in the next few weeks. The inquiry aims to publish its conclusions after the general election that must be held by June. Blair’s Opponents “ Tony Blair enters the arena this morning with a very large swathe of the political class already against him, including people who have now changed their mind since 2003,” former Home Secretary David Blunkett told BBC radio today. The review is being carried out by a panel of the Privy Council, which is investigating the period from summer 2001 to July 2009. The panel, which includes Usha Prashar , a member of the House of Lords, Lawrence Freedman , a security academic, Martin Gilbert, a historian, and Roderic Lyne , a senior adviser to JP Morgan Chase & Co., has the authority to question any British citizen and to see all relevant documents. In 2003, the Foreign Affairs and the Intelligence and Security committees each investigated the intelligence used in making the case for war and found that too much prominence was given to the claim that former Iraqi dictator Saddam Hussein could deploy missiles in 45 minutes. Blair, who is now Middle East envoy for the Quartet of the United Nations, the U.S., the European Union and Russia, will cooperate fully with the inquiry, his spokesman said when the probe was launched in July. U.K. combat troops carried out their last patrol in Iraq on April 30 last year and have left the country, according to the Ministry of Defence. The conflict claimed the lives of 179 British service personnel. Between 95,158 and 103,819 Iraqi civilians have died since the invasion, according to the Web site Iraq Body Count. To contact the reporters on this story: Thomas Penny in London at tpenny@bloomberg.net ; Kitty Donaldson in London at kdonaldson1@bloomberg.net .

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Credit Agricole Chief Pauget Sees No Capital Shortage From New Basel Rules

January 29, 2010

By Fabio Benedetti-Valentini Jan. 29 (Bloomberg) — Credit Agricole SA Chief Executive Officer Georges Pauget said proposed capital rules won’t cause a shortage of reserves at the bank, after analysts estimated its capital may fall to zero under the new regulations. “The analysts have not all the elements in their hands,” Pauget said in an interview with Bloomberg Television at the World Economic Forum in Davos, Switzerland, yesterday. The bank, France’s largest by branches, has “no major issue” related to its capital position, he said. Pauget is seeking to defuse concern about the potential impact of proposed capital standards on Credit Agricole that has helped push the stock down 16 percent in Paris trading since Dec. 16, the day before the Basel Committee on Banking Supervision said lenders must increase the quality of reserves they hold by the end of 2012. The Bloomberg index of European banks fell 8.8 percent in the period. Because of the way Credit Agricole allocates funds, its core capital ratio, a measure of financial strength, would fall to between 1.2 percent and minus 3 percent under the Basel rules proposed in December, according to the estimates of eight analysts surveyed by Bloomberg News. The Paris-based bank may need to raise capital or sell assets under the Basel proposals designed to bolster banks’ finances, analysts said. “Any of these scenarios would be like a nightmare for the group, if an exception isn’t negotiated,” said Renaud Mascarin , who helps manage about $125 billion at Groupama Asset Management in Paris and doesn’t hold Credit Agricole stock. ‘Biggest Loser’ The Basel committee’s 27 banking supervisors made the suggestions to redefine the capital banks must hold to absorb losses. The proposals, to be completed by the end of this year, will define which assets will count toward the regulatory minimum capital banks must hold from the end of 2012. “We project Credit Agricole to be the biggest loser, not just in France but in the sector, with core capital turning negative,” Nomura International Plc analysts, including London- based Jon Peace , wrote in a Jan. 8 note to investors. “Ultimately we believe that some compromise will be found in terms of regulatory forbearance or group restructuring, although a capital increase cannot be ruled out,” Peace said. Credit Agricole, listed since 2001, is controlled by a group of 39 customer-owned regional banks. Its assets include the corporate and investment bank, the insurance business, the LCL retail bank in France and consumer-banking networks in countries such as Italy and Greece. The publicly traded unit also has a 25 percent stake in the regional banks. Seeking a Solution Under the current Basel rules, Credit Agricole deducts from its Tier 1 capital ratio 50 percent of its stake in the group’s regional banks, and the new Basel rules might imply a 100 percent deduction, analysts said. The stakes in regional banks were valued at 12.2 billion euros at the end of 2008, according to the company’s annual report . “The Basel committee has looked at the very big picture, but with a bottom-up analysis you don’t get the same results,” said Pierre Flabbee , a Paris-based analyst at Kepler Capital Markets. “It would be useful to consider Credit Agricole and the regional banks as one group” when defining new capital rules, he said. Standard & Poor’s and Fitch Ratings rate Credit Agricole’s finances with the regional banks included. Pauget, 62, said in the Davos interview that the bank has found “jointly with the monetary authority the way to solve some specific issues related to the French cooperative banks.” Pauget is stepping down as CEO by March 1. Stock ‘Capped’ Credit Agricole’s capital woes are not limited to the stakes in regional lenders. The company also may have to review the way it allocates capital to its insurance business and holdings in banks such as Italy’s Intesa Sanpaolo SpA and Spain’s Bankinter SA, analysts said. Total deductions may reach about 30 billion euros “at worst,” according to analysts. “The stock is temporarily capped and probably it will remain so as long as there is uncertainty over regulation and there’s a risk of a capital increase,” said Jean Sassus , an analyst at Raymond James in Paris. Pauget’s successor, Jean-Paul Chifflet , will probably use the bank’s earnings to bolster capital through 2012, when the new Basel rules will be applied, Sassus said. The new capital rules risk pushing Credit Agricole to “put a brake on” acquisition plans to expand internationally, Sassus said. The bank had 29.1 billion euros of core Tier 1 funds at the end of September, or a ratio of 9.1 percent. Including the regional banks, the group’s Tier 1 funds were 52.9 billion euros by Sept. 30, according to the data from the company. “When you look at Credit Agricole including the regional banks, it’s well capitalized,” Groupama’s Mascarin said. “But capital isn’t located where the regulator looks for it.” To contact the reporter on this story: Fabio Benedetti-Valentini in Paris at fabiobv@bloomberg.net .

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Commodities Set for Biggest Drop in 13 Months on Concern Demand May Slow

January 29, 2010

By Claudia Carpenter Jan. 29 (Bloomberg) — Commodities headed for the biggest monthly decline in 13 months on concern that demand for raw materials may wane as governments take steps to control economic growth. The Standard & Poor’s GSCI Index of 24 raw materials is down 6.4 percent this month, the most since December 2008, led by slides of 17 percent for zinc and 15 percent for lead. Copper has lost 6.5 percent this month, also the most in 13 months, and crude oil is down 7.3 percent, the first decline since July. Sugar, feeder cattle and platinum climbed. Commodities last year rose the most in four decades, led by a doubling in copper, sugar and lead prices, as government spending programs spurred speculation that raw-materials demand would increase after the biggest slump in the global economy since World War II. Investors poured a record $92 billion into commodities last year, Barclays Capital estimates. “The optimism that led into 2010 has dried up very quickly,” said Jonathan Barratt , managing director at Commodity Broking Services Pty in Sydney. “Economies have been running off stimulus packages, not off genuine demand.” The Federal Reserve this week said it is taking steps to prepare investors for an end to stimulus. China started to restrict bank lending this month. Copper, Oil Copper for delivery in three months dropped $50, or 0.7 percent, to $6,848 a metric ton at 9:28 a.m. on the London Metal Exchange. Prices have declined 12 percent from this year’s high three weeks ago. Crude oil for March delivery was at $74.01 a barrel on the New York Mercantile Exchange, down 12 percent from this year’s high of $84.45. Commodities also have declined as the dollar strengthened, curbing investment demand for raw materials as an alternative asset. The U.S. Dollar Index , a six-currency gauge of the greenback’s strength, has added 1.4 percent this month after gaining 3 percent in December. Gold for immediate delivery fell 0.4 percent to $1,083.18 an ounce, down 1.3 percent this month. Investment in the SPDR Gold Trust, the biggest exchange-traded fund backed by the metal, had dropped 1.9 percent this month as of Jan. 28, according to figures on the company’s Web site. Platinum, which is not in the GSCI index, has advanced 3.3 percent this month after an ETF fund was introduced in the U.S. Raw-sugar futures in New York have gained 8.6 percent this month as buyers including India, the world’s biggest consumer, compete for limited supplies. Feeder cattle, calves that are not ready for slaughter, have climbed 2.4 percent this month. Grain and soybean prices have declined this month after the U.S. Department of Agriculture raised its estimate of supplies. Corn futures have dropped 13 percent in January, wheat is down 11 percent, and soybeans have slumped 11 percent. To contact the reporter on this story: Claudia Carpenter in London at ccarpenter2@bloomberg.net

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Stocks Fluctuate on Earnings, U.S. Economic Growth Outlook; Yen Declines

January 29, 2010

By David Merritt Jan. 29 (Bloomberg) — Stocks fluctuated as companies reported earnings that beat analysts’ estimates and investors awaited a government report that may show U.S. economic growth accelerated. The yen dropped on speculation Japan’s central bank will act to curb the currency. The Dow Jones Stoxx 600 Index was 0.1 percent higher at 10:22 a.m. in London, trimming its decline this year to 3.6 percent. Futures on the Standard & Poor’s 500 Index slipped 0.1 percent. The yen weakened against 15 of its 16 most-traded counterparts after Bank of Japan Governor Masaaki Shirakawa said he’s ready to act to stabilize markets. Of the 188 U.S. companies in the S&P 500 that have reported earnings since Jan. 11, 150 have beaten analysts’ estimates, according to Bloomberg data following a record nine-quarter earnings slump. The U.S. economy probably grew at its fastest pace for almost four years in the final three months of 2009, a government report today may show. “We should see equities recover some recent losses,” said Ian Richards , a London-based strategist at Royal Bank of Scotland Group Plc. “We see no reason to believe these numbers will do anything but confirm recovery is on track.” The MSCI World Index of 23 developed nations’ stocks slipped 0.3 percent as Asian stocks declined. The MSCI Asia Pacific Index dropped 1.7 percent. AU Optronics Corp., Taiwan’s largest maker of liquid-crystal displays, fell 5.7 percent in Taipei after posting an unexpected fourth-quarter loss. Advantest Corp., the world’s biggest maker of memory-chip testers, declined 10 percent in Tokyo after forecasting a wider- than-estimated full-year loss. BMW, Henkel In Europe, Bayerische Motoren Werke AG, the world’s largest luxury carmaker, rallied 2.5 percent after forecasting a profit this year and rising sales in the U.S., China and Germany. Henkel AG jumped 3 percent to a two-year high as the company said earnings will rise “noticeably” this year. U.S. futures were little changed, with the S&P 500 poised for its third straight weekly drop. Revenue growth hasn’t been fast enough to extend the S&P’s 500’s 60 percent rally since March. While profits since Jan. 11 beat analysts’ estimates by 13 percent, sales have exceeded forecasts by 1.4 percent, according to data compiled by Bloomberg. The benchmark gauge for U.S. equities has fallen 2.7 percent so far this year as U.S. President Barack Obama called for limits on risk-taking by banks and China moved to restrict lending to cool growth. Amazon.com Inc. advanced 2.5 percent in German trading after saying quarterly sales may accelerate. Microsoft Corp. gained 0.7 percent after reporting profit and revenue that beat analysts’ estimates. U.S. Expansion The U.S. economy expanded at a 4.7 percent pace in the fourth quarter, more than double the rate in the previous three months and the most since the start of 2006, according to the median estimate of 84 economists in a Bloomberg News survey. The Commerce Department’s report on gross domestic product is due at 8:30 a.m. in Washington. Separate reports may show consumer sentiment rose and a weak job market restrained labor costs. The yen dropped most against the Mexican peso and the Norwegian krone, declining about 0.8 percent, after Shirakawa said at a conference in Tokyo today that the Bank of Japan is prepared “to act swiftly and decisively should concerns re- emerge that financial market stability might be hampered.” Greek 10-year bonds snapped three days of declines after European Union Monetary Affairs Commissioner Joaquin Almunia said in Davos, Switzerland, that the Mediterranean country will not default. The yield dropped 24 basis points to 6.92 percent, narrowing the premium investors demand to hold the debt instead of bunds by 25 basis points to 371 basis points. India Forecast The Bombay Stock Exchange Sensitive Index added 0.2 percent after the Reserve Bank of India raised its economic growth forecast while keeping benchmark interest rates unchanged. The MSCI Emerging Markets Index fell 0.8 percent, led by declines in liquid-crystal-display makers after AU Optronics Corp. posted an unexpected fourth-quarter loss. Developing-nation equity funds lost $608.5 million in the week ended Jan. 27, the first net outflows in 12 weeks, on concern that China will raise interest rates to combat inflation, EPFR Global said. Copper fell 0.4 percent to $6,870 a metric ton in London, retreating for a fourth day, its longest losing streak since December. Gold for immediate delivery dropped 0.2 percent to $1,084.80 an ounce, also a fourth decline. Crude oil rose 0.5 percent to $73.97 a barrel in New York trading. To contact the reporter on this story: David Merritt in London on dmerritt1@bloomberg.net .

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Greek Bank Default Swap Counterparty Risk Will `Spook’ Markets, BNP Says

January 29, 2010

By John Glover Jan. 29 (Bloomberg) — Greece’s economic woes will “spook” the derivatives market because of concern the nation’s banks may struggle to honor their credit-default swap trades, according to BNP Paribas SA. Asset quality at the country’s lenders will deteriorate as the economy slows, forcing them to mark down about 40 billion euros ($56 billion) of government bond holdings, analyst Olivia Frieser wrote in a note to clients today. Funding costs are also rising as the European Central Bank tightens its lending criteria, Frieser wrote. “What will spook the markets is CDS counterparty risk, our understanding is that Greek banks were active CDS players, and there is no way of finding out about these particular exposures,” the London-based analyst wrote. “As long as Greek sovereign and bank spreads remain under pressure, this will weigh on the wider European banking sector.” The $26 trillion market for credit-default swaps is used by banks, hedge funds and insurers to insure against default and speculate on the creditworthiness of countries and companies. The counterparty risk is that one side of a contract isn’t able to meet its commitment. Credit-default swaps on Greek sovereign debt and the nation’s banks soared this month on concern the country won’t be able to raise 53 billion euros this year to reduce a budget deficit of almost 13 percent of gross domestic product, the biggest shortfall in the European Union. Five-year swaps insuring 10 million euros of National Bank of Greece SA debt today surged 46,000 euros to 419,000 euros, according to CMA DataVision prices. Default Swaps It now costs a $397,000 a year to insure $10 million of Greek government debt against default for five years, according to CMA, down from a record $422,500 yesterday. That compares with $34,000 for Germany and is the highest in the European Union. The country’s new 8 billion euros of five-year bonds sold on Jan. 26 have tumbled. The spread on the notes, due August 2015, has widened to 445 basis points over similar-maturity German government notes, according to Bank of Greece prices on Bloomberg. They were issued at a spread of 380 basis points. “The post-issue performance of the bond looks like a horror scenario to any government bond investor,” Tim Brunne , a strategist at UniCredit SpA in Munich wrote in a note to investors today. French and Swiss banks had the most dealings with Greece as of the end of September, Frieser said, citing data compiled by the Bank for International Settlements. French Banks The French banks that have the largest Greek businesses are Credit Agricole SA , which owns Emporiki Bank of Greece SA, and Societe Generale SA, which has stakes in Geniki Bank SA and Hellas Finance, according to Frieser. Investor concerns about Greece are spreading to nations including Portugal and Spain, which must both tame budget deficits. Claims of foreign banks, led by German lenders, on Spain represent 3.8 times those against Greece, meaning “the Spanish sovereign is indeed more important” than Greece, Frieser wrote. German banks’ claims against Spain are $240 billion, with French banks at $196 billion, BNP said. Credit Agricole owns about 19 percent of Madrid-based Bankinter SA, according to Frieser. Credit-default swaps pay the buyer face value in exchange for the underlying securities or the cash equivalent should a company or country fail to adhere to its debt agreements. To contact the reporter on this story: John Glover in London at johnglover@bloomberg.net ;

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Video: ‘Mega-Cap’ Stocks Set for a Comeback in 2010: Video

January 29, 2010

Jan. 29 (Bloomberg) — Bloomberg’s Sheila Dharmarajan reports on the outlook for “mega-cap” stocks, which refer to shares of the world’s largest companies represented in the Dow Jones Global Titans 50 Index. (Source: Bloomberg)

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Video: BNY Mellon Eyes PNC Unit; JPMorgan Focuses Overseas: Video

January 29, 2010

Jan. 29(Bloomberg) — Bloomberg’s Scarlet Fu reports on the latest breaking business news and top stories in today’s Business Briefs. (Source: Bloomberg)

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Video: WPP’s Sorrell Says Economy `Less Worse,’ No Recovery Yet

January 29, 2010

Jan. 29 (Bloomberg) — Martin Sorrell, chief executive officer of WPP Plc, talks with Bloomberg’s Linzie Janis about the global economy and the outlook for the world’s largest advertising company. Sorrell speaks in Davos, Switzerland, where the World Economic Forum’s annual meeting is taking place.

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Video: Voser Says Shell `More Pessimistic’ on First-Half Demand

January 29, 2010

Jan. 29 (Bloomberg) — Peter Voser, chief executive officer of Royal Dutch Shell Plc, talks with Bloomberg’s Francine Lacqua about the outlook for oil demand. Speaking at the World Economic Forum in Davos, Switzerland, Voser also discusses Shell’s business interests in Iran, Venezuela and Nigeria.

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Video: Amazon.com Fourth Quarter Sales Rise; Bernanke Confirmed: Video

January 29, 2010

Jan. 29 (Bloomberg) — Jane King summarizes the top stories this morning on the Bloomberg Business Report. (Source: Bloomberg)

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Video: Iwata Pans iPad; Paulson Comments on Lehman in Memoir: Video

January 29, 2010

Jan. 29 (Bloomberg) — Bloomberg’s Scarlet Fu reports on major newsmakers in today’s Movers & Shakers. (Source: Bloomberg)

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Video: Papaconstantinou Says Greece May Make Deeper Budget Cuts

January 29, 2010

Jan. 29 (Bloomberg) — Greece’s Finance Minister George Papaconstantinou talks with Bloomberg’s Andrea Catherwood about the country’s fiscal situation. They speak in Davos, Switzerland, where the World Economic Forum’s annual meeting is taking place. (Source: Bloomberg)

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Video: Baring’s Do Says China Sell-Off `Short-Term Correction’

January 29, 2010

Jan. 29 (Bloomberg) — Khiem Do, head of the multi-asset group at Baring Asset Management (Asia) Ltd., talks with Bloomberg’s Linzie Janis about the outlook for Chinese stocks and the economy. Speaking from Hong Kong, Do also comments on U.S. interest rates.

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Wealthy People Eschew Switzerland for Asia, Oversea-Chinese’s Guzman Says

January 29, 2010

By Joyce Koh Jan. 29 (Bloomberg) — Rich individuals from Europe and the Middle East are moving money from Switzerland to Asia, said Renato de Guzman , who heads private banking at Oversea-Chinese Banking Corp. after it acquired Asian assets of ING Groep NV . “It’s a favorable trend,” Guzman said in an interview on Jan. 27. He takes the helm at the Singapore-based bank’s unit today after having been ING’s Asia private banking head since 2000. “Having a Singapore bank with no ties to Switzerland is an attractive proposition for a lot of them.” Guzman, 59, is trying to capitalize on wealthy clients seeking to shift funds from UBS AG and other Swiss banks amid a dispute with the U.S. on disclosing client data to tax authorities. OCBC’s $1.46 billion purchase of ING’s unit, which tripled its private banking assets, also reflects optimism that Asia’s riches will grow faster as its economies outperform. UBS Chief Executive Officer Oswald Gruebel said this month in a note to staff that it’s “imperative” Switzerland’s biggest bank halt withdrawals. Net redemptions by wealthy clients at UBS accelerated in the third quarter, bringing the total to 182.9 billion francs ($179 billion) over 18 months and undermining profit at the bank’s biggest division. The Swiss government is seeking to avoid the re-opening of a lawsuit against UBS as the U.S. seeks information on as many as 52,000 bank clients suspected of tax evasion. A local court ruled last week that an August settlement, in which Switzerland agreed to process data on 4,450 client accounts, isn’t fully enforceable. ‘It’s a Trickle’ “We already have a European desk that’s been successful in terms of moving assets from Switzerland to here, serving those really looking for an alternative to Switzerland because of what’s going on there,” said Guzman. Funds attracted from Europe accounted for at most 6 percent to 7 percent of the $700 billion of private wealth managed in Singapore and Hong Kong at the end of last year, said Roman Scott , managing director of Calamander Capital, which advises private banks. That share will likely shrink as wealthy Asians pour more money into private-bank accounts, he said. “It’s a trickle, which will never get to be a canal, let alone a river,” Scott said. “If you get a bit of money from Europe or the Middle East, it’ll just be icing on the cake.” Cross-Selling Guzman, who oversaw a 24 percent annual growth rate in assets managed at ING from December 2002 to August 2009, is also betting on Asia’s burgeoning wealth. The Asia-Pacific region will overtake North America by 2013 in terms of high net-worth individuals’ wealth, according to the 2009 World Wealth Report by Cap Gemini SA and Merrill Lynch Wealth Management. The region will grow 12.8 percent a year, surpassing expansion in North America, Latin America and Europe, from 2008 to 2013, the report forecast. “There’s still new wealth being created in Asia, there’s a lot of possibilities, and a lot of factors that makes the whole environment very attractive,” Guzman said. Guzman said he aims to expand the combined Oversea-Chinese and ING operations by cross-selling banking products and tapping the wealthy in China through Oversea-Chinese’s six mainland branches. Southeast Asia Focus The bank may also consider managing private-bank assets in China through so-called onshore operations, Guzman said without giving a timeframe. The nation has the fourth-highest population of high net-worth individuals after the U.S., Japan and Germany, according to the Merrill/Cap Gemini report. Oversea-Chinese’s first priority is to build its business in Southeast Asia, where it already gets 90 percent of private- banking revenue, Guzman said. Oversea-Chinese beat bigger rivals including London-based HSBC Holdings Plc , Europe’s largest bank, and DBS Group Holdings Ltd. , Southeast Asia’s biggest lender, to acquire ING’s assets in October. At a briefing to announce the deal at the time, Oversea- Chinese CEO David Conner said “there’s no question” about who would helm the combined business after the Singapore firm, with 50 relationship managers and 2,500 clients, took over ING’s unit, which had 150 relationship managers and 5,000 clients. Integration work There have been no “significant” hurdles to integrating the two companies, said Guzman, nicknamed Bing. “There’s all this talk of different cultures, saying, oh they’re so conservative, how can you fit in?” said Guzman. “Actually I find we speak the same language.” He said two ING relationship managers left after the acquisition was announced, including one who said she would have “a hard time selling a local bank.” The company plans to hire more bankers, Guzman said. To contact the reporter on this story: Joyce Koh in Singapore at jkoh38@bloomberg.net

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Republicans Say They Met Obama’s Challenge to Top Him on Health-Care Plan

January 29, 2010

By Laura Litvan and Catherine Dodge Jan. 29 (Bloomberg) — When President Barack Obama challenged lawmakers this week to “let me know” if they had a better idea how to overhaul U.S. health care, several Republicans shot up their hands. Obama asked his opponents during his Jan. 27 State of the Union address to come up with an “approach that will bring down premiums, bring down the deficit , cover the uninsured” and bolster Medicare. Republicans, almost universally opposed to Obama’s plan, say they have less-costly ways of reaching many of those goals and have been advocating them for months. “That’s exactly what the Republican health-care proposal does, much more so than the proposal that he and Democrat leaders are trying to shove down the throats of the American people,” House Republican Leader John Boehner of Ohio told reporters yesterday. The Republican ideas, more limited in scope than the roughly $900 billion medical-system revamp the Democrats seek, may have a bigger role in defining party differences this election year than in crafting a compromise on the health bill. That’s because the gap between the two approaches is so wide. A plan Boehner pushed in November would expand coverage to just 3 million uninsured Americans, compared with more than 30 million in bills passed in the Democratic-controlled House and Senate, according to the nonpartisan Congressional Budget Office. It would cost $61 billion over 10 years. It doesn’t require Americans to obtain insurance. And it spans 219 pages — compared with the House bill , which runs to about 2,000. Handful of Items Even with their legislation at an impasse, Democratic leaders would likely adopt only a handful of Republican proposals if they wanted to pick up support for a final bill, said John Fortier , a scholar at the American Enterprise Institute in Washington. One possibility, he said, would be imposing limits on medical malpractice awards. “They don’t have as large a package or as comprehensive a set of reforms as the Democrats want,” Fortier said. “If there is any deal, it will be with a few things tacked on.” House Speaker Nancy Pelosi , a California Democrat, is still seeking ways to pass legislation with largely Democratic support after the Jan. 19 special election loss in Massachusetts deprived her party of the 60th vote needed to defeat Republican delaying tactics in the Senate. While Republican leaders have no plans to offer anything beyond the bills they’ve introduced, Representative Mike Pence of Indiana said party lawmakers will get a chance to lay out their approach to Obama when the president addresses the annual retreat of congressional Republicans in Baltimore today. “I guarantee you, tomorrow House Republicans are going to take advantage of the president’s attendance” to explain their alternatives, Pence said yesterday on MSNBC television. WellPoint, Aetna The legislation passed by the House and Senate last year requires that all Americans have insurance, sets up new online purchasing exchanges, and expands government aid to low-income people to buy coverage. It also imposes new regulations on insurers including Indianapolis-based WellPoint Inc. and Hartford, Connecticut-based Aetna Inc. Republicans say they want an incremental approach, emphasizing preventive care, affordability and greater access to insurance. “Rather than creating a government-centered bureaucracy, what you want to do is drive down those costs,” said Senator Tom Coburn of Oklahoma. Tax Credits Legislation introduced in May by Coburn and Senator Richard Burr of North Carolina and Representatives Paul Ryan of Wisconsin and Devin Nunes of California, all Republicans, features tax credits to help people obtain insurance. The plan would end the current tax benefit for employer- sponsored plans and shift responsibility for coverage to individuals, who would get a tax credit of $2,300 to buy insurance. Families would get $5,700. It would encourage states to create exchanges where people would shop for coverage and let states band together to ease administrative costs and diversify pooling. It would limit medical-liability lawsuits by setting up state panels to review cases and make judgments. While there’s no requirement that individuals buy coverage or that companies provide it, states would set up “auto- enrollment” options at workplaces, medical centers and other sites. Boehner’s alternative, which would let business groups pool resources to purchase coverage and allow insurance to be bought across state lines, was rejected, 258-176, on Nov. 7 before the House approved the Democratic legislation. ‘Empty Rhetoric’ The preliminary estimate by the Congressional Budget Office said Boehner’s plan would likely reduce insurance premiums, though it would expand coverage to fewer than 10 percent of the uninsured that the House bill would. “What the Republicans offer is not cost containment nor is it better coverage,” said Senator Mary Landrieu , a Louisiana Democrat who yesterday acknowledged the Democratic legislation was on “life support” because lawmakers couldn’t agree how to move forward. “It’s just a lot of empty rhetoric.” Boehner spokesman Kevin Smith defended the limited numbers of people the Republican plan would cover, saying cost has emerged as a top issue among voters. “The Democrats can talk about how their plan covers more people, but it is wrapped up in a costly, big-government approach that the American people are overwhelmingly rejecting,” Smith said. To contact the reporters on this story: Laura Litvan in Washington at llitvan@bloomberg.net , Catherine Dodge in Washington at cdodge1@bloomberg.net

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Obama Seeks $33 Billion in Tax Credits to Encourage Small-Business Hiring

January 29, 2010

By Nicholas Johnston Jan. 29 (Bloomberg) — President Barack Obama plans to announce details today of a $33 billion package of incentives for small businesses to encourage hiring and wage increases as he refocuses on economic concerns in an election year. The proposal, which the president is seeking as part of a jobs bill in Congress, would give businesses a $5,000 tax credit for each new hire this year and reimburse the 6.2 percent Social Security tax for wage increases beyond inflation. Obama said the measures will help 1 million small businesses add employees or raise pay. “Creating jobs has to be our No. 1 priority in 2010,” Obama told an audience yesterday in Tampa, Florida, where he announced the awarding of $8 billion in grants to jumpstart the building of 13 high-speed rail corridors across the country. With U.S. employers having shed more than 7 million jobs since the start of the recession in December 2007 and the national unemployment rate at 10 percent, the president is putting emphasis on steps to boost hiring even as the government faces a budget deficit forecast to be $1.35 trillion this year. The president is confronting approval ratings hovering at 50 percent or less and voter anger over the bailouts of companies like Citigroup Inc . and General Motors Co . Obama’s health-care agenda has stalled in Congress, and elections in November to determine control of the House and Senate may slow action by lawmakers. Obama is announcing the plan, which he outlined in his Jan. 27 State of the Union address, at an event in Baltimore before speaking at an annual meeting of congressional Republicans. Jobs Legislation The tax credit is one of a series of proposals to spur hiring that Obama is asking lawmakers to pass. In the State of the Union he called on Congress to send him a jobs bill “without delay.” In addition to the proposals being announced today, Obama has outlined $38 billion in business tax breaks to encourage equipment purchases and proposed using $30 billion of the money paid back by banks bailed out by the Troubled Asset Relief Program to assist community banks that lend to small businesses. Obama has also called for more infrastructure spending, such as the grants for rail lines. The rail projects will help the U.S. build the “infrastructure of the future,” Obama said in Florida, which is getting $1.3 billion. $500,000 Cap The tax provisions being announced today would be capped at $500,000 to ensure that small businesses receive the bulk of the credits. Companies that reduce their payrolls in 2010 would be ineligible for both the hiring credit and wage bonus, according to an administration fact sheet. After the tax announcement, Obama will address the annual retreat of congressional Republicans, who have sought to block his health-care initiative and criticized his economic policies. During his State of the Union address he said he would like to meet with congressional leadership each month and laid out some proposals, such as a freeze on spending and an openness to offshore oil drilling, that has Republican support. “This is not an opportunity for one more presidential speech,” Indiana Representative Mike Pence , the No. 3 House Republican, said of Obama’s appearance before the lawmakers. “House Republicans will seize the opportunity, in respectful terms, but candid and frank terms, to make it clear to the president that we have better solutions.” To contact the reporter on this story: Nicholas Johnston in Washington at njohnston3@bloomberg.net

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Foster’s Hires Diageo’s John Pollaers to Lead Australian Brewing Division

January 29, 2010

By Robert Fenner Jan. 29 (Bloomberg) — Foster’s Group Ltd., Australia’s biggest beer and wine maker, hired John Pollaers as managing director of its Carlton & United Breweries unit, the company’s largest and most profitable division. Pollaers, 47, who will commence in the role on April 7, was most recently head of Asia Pacific operations for Diageo Plc , Melbourne-based Foster’s said in a statement today. He will replace Alex Stevens , who resigned last month citing an undisclosed illness. Foster’s , which sells more than half of the nation’s beer, has been losing market share for its biggest brand Victoria Bitter as consumers switch to imported brews. The company created specialist sales teams for beer and wine last year, unwinding an earlier integration strategy that cost it customers. “John is well known and respected in the Australian market and has a proven track record in successfully leading and growing businesses,” Foster’s Chief Executive Officer Ian Johnston said in the statement. “I am excited to welcome someone of John’s caliber.” Pollaers worked at Diageo for almost 20 years. The London- based company, whose brands include Guinness stout and Smirnoff vodka, is the world’s largest liquor maker. Foster’s rose 0.4 percent to close at A$5.34 in Sydney trading. The stock has fallen 2.9 percent this month after being unchanged last year. To contact the reporter on this story: Robert Fenner in Melbourne rfenner@bloomberg.net

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Northrop Skipping Tanker Would Mark Profit Discipline Under New Chief Bush

January 29, 2010

By Gopal Ratnam Jan. 29 (Bloomberg) — Northrop Grumman Corp. ’s threat to pull out of bidding for the $35 billion U.S. aerial tanker program resonates with investors who want new Chief Executive Officer Wes Bush to ensure profitability at the third-largest U.S. defense contractor. “It would be unfortunate if Northrop didn’t bid for the tanker contract, but you want the company and the new CEO to have discipline,” said David Rowlett, a Baltimore-based aerospace analyst who helps manage $24 billion at T. Rowe Price Group Inc. , including 3.1 million Northrop shares . “If it’s not a profitable deal, the company shouldn’t do it.” Bush, 48, who has been CEO since Jan. 1, will have to decide whether to bid on the aerial-refueling tanker program when the Pentagon posts the final requirements next month. A September draft bid was skewed in favor of a smaller plane from rival Boeing Co. and competing would impose “financial burdens” on Los Angeles-based Northrop, Bush said in a Dec. 1 letter to Ashton Carter , the Pentagon’s main weapons buyer. Northrop’s operating profit margin was the lowest among the five biggest U.S. defense contractors except for Boeing through last year’s third quarter. Northrop on Feb. 4 may say fourth- quarter profit fell to $1.26 a share from $1.57 a year earlier, based on analysts’ average estimate in a Bloomberg survey. The company’s board supports management’s decision to “proceed cautiously” on the tanker bid, Northrop director Vic Fazio said in an interview. Board Backs Bush Bush’s role, perhaps more so than his predecessors’, is to focus on performance, Fazio said. Kent Kresa expanded the airplane maker’s operations into shipbuilding and satellites by acquiring about 20 companies from 1990 to 2003, according to Bloomberg data. Kresa’s successor, Ron Sugar , made about 15 divestitures during his tenure before turning the reins over to Bush, the data show. “I’d characterize Kent Kresa as the aggregator and I’d call Ron Sugar the integrator, but I do think we are looking to Wes to really drive shareholder value,” said Fazio, a former California congressman who is a senior adviser in the law firm of Akin Gump Strauss Hauer & Feld LLP in Washington. “Everything we do going forward will be reflected in that.” Three days after taking over as CEO, Bush, who holds a graduate degree in electrical engineering from Massachusetts Institute of Technology, announced that Northrop’s headquarters would move to the Washington, D.C., region. Company spokesman Randy Belote said Bush wouldn’t comment for this report. Profit Margins For 2002, Kresa’s last full calendar year as CEO, Northrop’s margin was about 8.1 percent, ahead of 7.3 percent for Lockheed Martin Corp. , the world’s largest defense contractor. By 2008, Northrop’s margin had edged up under Sugar to 8.7 percent while Lockheed advanced to 12 percent. Northrop’s profit margins “have significantly lagged the defense peer average, and closing this gap will be a key focus for Wes,” Rowlett said. Chicago-based Boeing’s 2009 margins were the lowest of the five main defense contractors after setbacks in its commercial- plane business, which generated about half of revenue in 2009. Northrop and European Aeronautic Defence & Space Co. , its partner in the tanker bid and parent of Airbus SAS, won the contract in February 2008 and Boeing successfully protested the award in June that year. Defense officials have said the new contract will be assigned by mid-2010. ‘Turn the Culture’ “The question is whether Bush can turn the culture on improvement rather than focus on size,” Heidi Wood , a New York- based analyst at Morgan Stanley, said in an interview. “He gets it that Northrop has meaningfully underperformed when it was the best of times for defense contractors” during the administration of former U.S. President George W. Bush. The contractor’s margins trail those of its peers because of charges at its shipbuilding business and difficulty the company faced in ramping up programs from the development to production phase during the eight years ending in 2008, said Wood, who rates Northrop shares “equal-weight.” Northrop fell 10 cents to $56.64 yesterday in New York Stock Exchange composite trading . The shares climbed 24 percent last year, while Bethesda, Maryland-based Lockheed fell 10 percent and the 12-company Standard & Poor’s 500 Aerospace and Defense Index gained 21 percent. Before becoming CEO, Bush said he already was focused on improving the performance of the shipbuilding unit. The division contributed about 17 percent of the company’s 2008 revenue of $33.9 billion. In May 2009, he said he intended to eventually raise the unit’s margin to 10 percent from 7 percent. Northrop’s Gulf Coast shipyards were damaged by the 2005 Hurricane Katrina, leading to financial charges and program delays. Improving performance at the yards in Pascagoula, Mississippi, and New Orleans is a priority, director Fazio said. “That process is under way,” Fazio said. “I don’t think anyone would say it’s completed.” To contact the reporter on this story: Gopal Ratnam in Washington at gratnam1@bloomberg.net .

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SAP’s Apotheker Fails to Impress Analysts With `Market Changing’ Software

January 29, 2010

By Ragnhild Kjetland Jan. 29 (Bloomberg) — SAP AG Chief Executive Officer Leo Apotheker failed to impress analysts with the company’s planned Business ByDesign offering, an Internet software service that he dubbed a “market changer.” The world’s biggest business software company’s new product, that allows customers to subscribe and pay on a monthly basis, will begin being sold by July, about three years late. At about 40,000 euros ($55,800) a year for a 25-user outfit, compared with large SAP contracts that go into millions of euros, it may be a drag on margins , said Peter Goldmacher , an analyst at Cowen and Co. LLC in San Francisco. “There’s no way they are going to get the margins they are historically used to in this lower-end market with a cheaper product,” said Goldmacher, who has an “underperform” rating on the stock. “The product is probably fine, but they are going to have a problem selling to a market that they haven’t sold to before.” SAP , whose software is used for payrolls, customer relations management and Apple Inc.’s iTunes download system, is looking for new sales streams after this week reporting a drop in revenue and profit for 2009. The move marks its second effort this month to provide lower-end options to clients faced with a slump in the global economy. On Jan. 14, SAP did an about-face, caving in to customer pressure by unveiling cheaper software- support options. Delayed ByDesign was initially unveiled in September 2007. In April 2008, SAP decided to “modify” the release and said it would take 12 to 18 months longer to reach its target of $1 billion in sales and 10,000 customers , after having expected to meet that goal by 2010. At a press conference this week, Apotheker didn’t say how much revenue the software may generate. “I don’t think we should count on a lot of sales from ByDesign this year,” he said. “We want to go to market first and then talk about the target, rather than the other way around. I’m absolutely certain that SAP’s Business ByDesign will change the market. It is the richest, most complete solution that will be available on the market and if I were a competitor, I would be worried.” The new service puts SAP in the fray with companies that have similar offers for businesses. The competition in this market isn’t Oracle Corp, it’s the likes of NetSuite, Salesforce.com and SuccessFactors , said Thomas Otter , a director at Gartner Research, in Frankfurt. Apotheker said SAP had taken into account costs related to ByDesign when setting its operating profit margin guidance. SAP, based in Walldorf, Germany, said it’s targeting an operating margin of between 30 percent and 31 percent at constant currencies in 2010 from 27.4 percent in 2009. Ambitious “SAP is ambitious to think that they can roll out a volume software-as-a-service product and still maintain and grow margin at the same time,” Otter said. The company reported this week that its fourth-quarter net income slid 12 percent to 727 million euros from 830 million euros a year earlier. Revenue fell 9 percent to 3.2 billion euros. The new service is being tried by 100 small and medium- sized companies, including Park City, Utah-based Skullcandy Inc. and Widnes, U.K.-based Pentagon Chemicals Ltd. Apotheker said the new product will be a “volume- business” by 2011. SAP’s ambitions for the product may be misplaced, said Andy Miedler , analyst at Edward Jones in St.Louis Missouri. “The question is how fast the uptake is out there,” he said. “SAP is facing some pretty good entrenched competitors and is coming a bit from behind.” Latest Technology Hans-Peter Klaey , head of SAP’s small and medium enterprise business, defended the company’s claim the product would change the industry. The new product has an “end-to-end” capability, containing customer relationship management software, human resource software, finance software, and it can add on additional solutions as the market changes, he said “We can do that because it is based on the latest technology,” Klaey said in an interview. “If you look at what’s already out there, they aren’t really based on the newest technology, so we have a big advantage in this regard because we took the time and made it right.” He said feedback from the sales channels and from prospective customers is that “they haven’t seen anything like this from anybody else in the market.” With the product, SAP is targeting companies with between 50 and 500 employees. For a 25-person company, the cost of the software would be no more than hiring an information technology person, he said. ‘Generic Software’ Gartner’s Otter and Cowen’s Goldmacher said they were skeptical about the company’s capacity to manage sales of the product, which small and medium-sized business customers can access through the Internet. “One third of SAP’s revenues come from its 500 largest customers and they are saying now that the plan is to go way down in the market to sell this generic software,” said Goldmacher. “They can’t sell like they’ve historically sold because they don’t have the distribution capability in that market.” To contact the reporter on this story: Ragnhild Kjetland in Frankfurt rkjetland@bloomberg.net

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Intesa Said to Be Preparing Offer for Performing Assets of Gruppo Delta

January 29, 2010

By Sonia Sirletti Jan. 29 (Bloomberg) — Intesa Sanpaolo SpA , Italy’s second biggest bank, is preparing an offer for the performing assets of Gruppo Delta , a unit of Cassa di Risparmio della Repubblica di San Marino, to expand its consumer credit business, two people familiar with the matter said. Intesa may bid for Delta’s sales network, its insurance division Bentos Assicurazioni, and retail lender Sedici Banca within a few weeks, according to the people, who asked not to be identified. They wouldn’t disclose financial details because the two sides are still negotiating. Intesa, led by Chief Executive Officer Corrado Passera , aims to expand its consumer credit business after exiting a joint venture with BNP Paribas SA last year. Intesa plans to merge Delta assets with its consumer credit unit Neos SpA to create a larger sales network, one of the people said. “The deal makes sense for Intesa to create economies of scale,” Enrico Camerinelli, a banking analyst at Celent, said in a telephone interview. “The bank could take advantage of a consumer recovery,” he said. Gruppo Delta, based in the tiny Republic of San Marino east of Bologna, is under Bank of Italy bankruptcy protection after five executives at its holding company were arrested in May on allegations of money laundering. Delta shareholders’ equity, a measure of assets minus liabilities, is about 400 million euros ($558 million), while the company has about 4 billion euros in debts with other financial institutions, one of the people said. Seeking to Sell Milan-based Intesa is requesting guarantees related to the toxic assets that Delta holds, including a recapitalization of Cassa di Risparmio di San Marino, and the exclusion of bad loans, people said. The final price of the offer and the guarantees are still being discussed, according to the people. “Cassa di Risparmio is available to keep non-performing loans in order to add value to the unit,” said Tito Masi , chairman of the foundation that controls the bank, in a telephone interview. “The bank is doing all it can to sell Delta in order to comply with a Bank of Italy request,” said Masi, who declined to discuss the negotiations. An Intesa official declined to comment. The Italian lender spent three months reviewing Delta’s books, according to Masi. Italy’s central bank met yesterday with representatives of Intesa, Delta and the bank’s creditors yesterday to discuss the sale, the people said. To contact the reporter on this story: Sonia Sirletti in Milan at ssirletti@bloomberg.net

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Crawford Bets Miners Can Revive Octopus After Top Long-Short Fund Falters

January 29, 2010

By Ben Martin Jan. 29 (Bloomberg) — David Crawford had the best- performing long-short fund in the U.K. last year, even after returns plunged in the fourth quarter. He’s betting mining stocks will help get his CF Octopus Partner Fund (Absolute Return) back on track. BHP Billiton Plc, Rio Tinto Plc, Vedanta Resources Plc and Xstrata Plc account for about 5 percent of the 197 million-pound ($318 million) fund. “There aren’t many stocks that I’d bang the table and say, ‘You’ve got to buy these, you’re going to make lots of money,’” Crawford, 35, said in an interview at the offices of Octopus Investments Ltd. in London. “But I think there’s some where you could probably make a reasonable return.” Long-short, or absolute return, funds bet on rising and falling stocks to protect against market declines and have attracted increased inflows amid investor concern about equity markets. Crawford returned 42.1 percent last year, the best performance among the 27 funds that the London-based Investment Management Association classified as absolute return, according to data compiled by Morningstar Inc. Octopus Investments , founded in 2000, manages about 1.4 billion pounds, mainly for institutional clients. Crawford has managed his fund since it was created in March 2008. Crawford said he recently bought mining shares because they have been “sold down a bit too much in the short-term.” European mining stocks have declined because of misplaced concerns about tighter monetary policy in China and its impact on demand for metals, London-based Nomura International Plc analysts Paul Cliff and Gavin Wood said yesterday in a note to clients. They rate Rio Tinto and Xstrata “buy,” BHP Billiton “reduce” and Vedanta “neutral.” ‘Some Headwinds’ Rio Tinto , the world’s third-largest mining company, has fallen 16 percent in London trading since Jan. 8, and BHP Billiton , the world’s largest mining company, has dropped 13 percent. Vedanta , the largest copper producer in India, is down 16 percent and Xstrata , the world’s largest exporter of power- station coal, 19 percent. Crawford said he recently reduced his holdings in U.K. homebuilders Barratt Developments Plc and Taylor Wimpey Plc and leisure stocks such as Enterprise Inns Plc. “It’s pretty hard to make a strong bull case for the U.K. economy,” he said. “There’ll be some headwinds facing a lot of companies who are dependent on the U.K. consumer.” U.K. gross domestic product rose 0.1 percent in the fourth quarter from the previous three months, the Office for National Statistics said this week. The median forecast was for 0.4 percent growth, according to the median of 33 economists surveyed by Bloomberg News. ‘Head in the Hands’ Crawford’s fund fell 5.1 percent in October, 4.7 in November and 0.4 percent in December, a period during which the U.K.’s benchmark FTSE 100 Index gained 5.4 percent. “It’s real head in the hands sort of stuff when you lose that much,” Crawford said. “It’s very easy to get sucked into things and you get a lot of brokers pushing ideas to you.” Managers should filter those ideas “and make sure you’re happy with them, and I guess I got caught up in some things I shouldn’t have been in,” he said. Crawford earned a chemistry degree from Durham University. He joined Octopus in 2006, after previously working at Hermes Investment Management Ltd. and Prudential Plc’s M&G Investments. When asked how he expects his fund to perform this year, Crawford said: “It feels like a good year will be a 10-15 percent sort of year. The market isn’t going to move around that much.” To contact the reporter on this story: Ben Martin in London bmartin38@bloomberg.net.

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Cooper Manning Finds Niche in Energy Stocks, Leaving Football to Brothers

January 29, 2010

By David Wethe Jan. 29 (Bloomberg) — Cooper Manning , who’s about to attend the third Super Bowl in four years involving a team led by one of his brothers, was looking for shelter from his family fame when he stumbled into the oil patch after college. The 35-year-old Manning, a partner at energy investment firm Howard Weil Inc. in New Orleans, passed up jobs to become a broadcaster or a sports agent because he’d be forever pegged to his younger brother Peyton Manning . The Indianapolis Colts quarterback just won a record fourth National Football League Most Valuable Player award and will lead the team against the New Orleans Saints in the Super Bowl on Feb. 7 in Miami. Cooper Manning, who is 6-foot-4, was recruited to play wide receiver at the University of Mississippi. His football career was cut short when his doctors diagnosed a congenital narrowing of the spinal canal. He said he has no regrets about how things turned out. “The energy business is kind of a good ol’ boy business,” he said in a telephone interview. “If you can drink a cold beer and make somebody laugh, you can probably get up the ranks quicker than other folks. I kind of fit in.” Manning, whose youngest brother, Eli Manning , led the New York Giants to victory in the 2008 Super Bowl, graduated with a degree in broadcast journalism. He then worked a few odd jobs on radio talk shows and traveled around the country interviewing to be a sports agent. Getting Off ‘Scholarship’ As the oldest son of Archie Manning , who starred at quarterback for the Saints in the 1970s, Cooper Manning may have had more doors open to him than the average 22-year-old. He said he decided to “get off scholarship from my parents” and took a sales job in New Orleans at a small company, Seismic Exchange Inc. After three years of selling seismic data, which oil and natural-gas producers use to help identify petroleum deposits, Manning said he heard about a job at Howard Weil in 2000. Manning, who befriended current Saints quarterback Drew Brees out of a love for “southern hospitality,” said he was due for a culture shock. He now sells energy stocks to institutional investors. “This is a pretty greedy industry,” he said. “I grew up where you weren’t supposed to talk about money. You just never mentioned it. You all of a sudden get into a business where the whole premise of all your clients, all they’re trying to do every day is generate returns and make money.” Citigroup Deal Colleagues on the 35th floor of the firm’s headquarters overlooking the French Quarter said Manning has become one of Howard Weil’s top sales people. Manning was part of a group of employees who pooled their money to buy the firm when its previous owner, Legg Mason Inc., included the unit in a December 2005 asset swap with Citigroup Inc. “He’s just one of the greatest guys you’d ever want to be on the field with,” said Andrew Rosenberg , a partner at Howard Weil. “The fact is, this is his playing field.” Manning said he doesn’t try to exploit his family’s celebrity status. One client who learned of the connection after four years of working with Manning was angry that he hadn’t told him. “It didn’t pop up,” Manning said. “If you can’t help people make money, that sort of stuff will fade pretty quick. I have a lot of clients who don’t give a hoot about football, much less Peyton and Eli.” Lighter Side “Coop,” as Manning is known to co-workers, is both a class clown and a hard worker, said Paul Pursley , president of Howard Weil. Tony Reginelli coached the two older Manning brothers at the private Isidore Newman School in New Orleans. Eli Manning, who is almost seven years younger than Cooper, played there after Reginelli retired. Peyton Manning, 33, was always “jumping on players” in the huddle and demanding perfection, Reginelli said. “Cooper comes in and he probably tells them a joke and relaxes them.” It’s no different today when Cooper and Peyton talk on the phone. “We talk about everything under the sun,” Cooper Manning said. “Maybe just touch on the game a little bit, but mostly about something to keep his mind off of it and tell him something that’s funny.” Hometown vs. Family Cooper Manning said he last saw Brees on Jan. 9, when the Saints quarterback and his wife came to his house to watch the Dallas Cowboys play the Philadelphia Eagles in the opening round of the NFL playoffs. “My kids hounded him in their full Saints gear,” Manning said. “He’s a hard guy to pull against.” As the Saints play in their first Super Bowl after more than four decades of trying to get there, family ties won’t allow Manning to root for his hometown team. “It’s a little awkward,” he said. His brothers’ success makes it all the more difficult to hide in the shadows. “With those guys getting more notoriety, it’s been a little more difficult to remain anonymous,” Manning said. To contact the reporter on this story: David Wethe in Houston at dwethe@bloomberg.net .

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Toyota Dealers May Lose $2.47 Billion in Monthly Revenue as Sales Halted

January 29, 2010

By Mike Ramsey and Doron Levin Jan. 29 (Bloomberg) — U.S. dealers who sell Toyota Motor Corp. ’s namesake brand could lose as much as $2.47 billion in combined monthly revenue because of the halt of sales of eight models, including the popular Camry and Corolla sedans. The 1,234 Toyota brand dealers would miss out on $1.75 million to $2 million a month in revenue from new and used versions of the models that aren’t allowed to be sold, said John McEleney, the chairman of the National Automobile Dealers Association and owner of McEleney Toyota in Clinton, Iowa. “We’ve never really dealt with anything like this with any manufacturer,” said McEleney, who also owns a Chevrolet dealership in Clinton. Hyundai Motor Co. yesterday joined Ford Motor Co. and General Motors Co. in offering discounts to lure Toyota owners, while consumer Web site Edmunds.com said fewer shoppers are aiming to buy Toyotas. The company’s U.S. market share may fall to 14.7 percent in January, its lowest since March 2006. At the same time, dealers are preparing to replace accelerator pedals in 2.3 million recalled vehicles that have a part that may be defective. The pedal flaw also triggered recalls of models in Europe and China. Service Work Profit from that service work may blunt the damage from lost new and used car revenue, said dealers. Toyota remained the top-selling brand in the U.S. last year, while the parent company was again the world’s largest automaker. The estimated loss of revenue per dealership assumes the vehicles affected account for 56 percent of the new-car volume and 30 percent of the used-car sales at an average dealer with a transaction price of around $30,000, McEleney said. The loss of revenue from new cars would be $1.25 million to $1.5 million with the rest coming from lost used-car sales. “We’re still selling cars,” said Billy Rinker, general manager of Toyota of Santa Monica in California. Many customers are asking about the recall and focusing on the information in the media, he said. “We’ve been explaining to customers that it’s something happening in a small percent of high-mileage vehicles,” Rinker said. Warranty work can be highly profitable for franchised dealers, which typically bill at least $75 an hour for labor and could realize a gross profit of $100 to $150 for each accelerator that needs to be replaced, said Marc Cannon , spokesman for AutoNation Inc. , the nation’s biggest Toyota dealer with 25 franchises. ‘More Profitable’ “Once the fix gets announced it will be a positive for our business,” said Tony Pordon , a spokesman for Penske Automotive Group Inc., based in Bloomfield Hills, Michigan. “Parts and service work is much more profitable than selling vehicles, comprising almost half of gross profit.” PAG operates 17 Toyota dealerships in the U.S. Toyota has told dealers it will help to offset the interest expense on loans for vehicles in inventory that can’t be sold, McEleny said. As well as the Camry and Corolla, the vehicles that Toyota has prohibited selling include the Avalon, Highlander, Matrix, RAV4, Sequoia and Tundra. The eight models accounted for 106,012 sales in December and about $2.5 billion in revenue to dealers, according to data from vehicle research firm Edmunds.com. Sales Impact “It’s a little premature to guess or estimate the impact on sales at this point,” said Celeste Migliore , a spokeswoman for Toyota’s U.S. sales unit in Torrance, California. The company will discuss sales in detail on Feb. 2, when it releases figures for the entire month of January, she said. Rivals Honda Motor Co. and GM probably are gaining buyers as consumers shy away from Toyota brands, Edmunds.com said. The share of people intending to purchase a Toyota-brand model fell to 10 percent Jan. 27 from 13 percent a day earlier, while GM and Honda each rose 1 percentage point to 15 percent and 12 percent, according to Edmunds.com. The analysis is based on visits to the Edmunds.com Web site. To contact the reporter on this story: Mike Ramsey in Southfield, Michigan, at mramsey6@bloomberg.net ; Doron Levin in Southfield, Michigan, at dlevin5@bloomberg.net

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