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Video: U.S. Stocks Gain on Earnings Optimism; Halliburton Rises: Video

by on July 19, 2010

July 19 (Bloomberg) — Bloomberg’s Courtney Donohoe reports on the performance of the U.S. equity market today. Stocks rose, rebounding from the market’s biggest drop this month, as optimism about earnings from technology and energy companies overshadowed a drop in financial shares. Bloomberg’s Pimm Fox also speaks. (Source: Bloomberg)

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Video: U.S. Stocks Gain on Earnings Optimism; Halliburton Rises: Video

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Video: U.S. Stocks Rebound From Biggest Decline in a Year: Video

May 21, 2010

May 21 (Bloomberg) — Bloomberg’s Deborah Kostroun reports on the performance of the U.S. equity market today. U.S. stocks rose, rebounding from the market’s biggest drop in a year, as investors speculated equities may have fallen too much this week on concern about Europe’s debt crisis. Bloomberg’s Pimm Fox also speaks. (Source: Bloomberg)

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Abu Dhabi Shares Fall to Lowest in Two Months on Aldar Loss; Dubai Drops

May 2, 2010

By Zahraa Alkhalisi May 2 (Bloomberg) — Abu Dhabi’s benchmark index retreated for a fifth day to the lowest in almost two months, leading a decline in United Arab Emirates shares, after Aldar Properties PJSC and Deyaar Development PJSC reported first-quarter losses. Aldar , Abu Dhabi’s biggest property developer, fell as much as 5.6 percent after missing analysts’ estimates. Deyaar , the Dubai-based developer is poised for the lowest close on record. The ADX General Index retreated 0.4 percent to 2,767.25 at 1:06 p.m. in the emirate. The measure has lost 1.9 percent in the past five days. Dubai’s benchmark index declined 0.7 percent. Earnings “have all come out weaker than expected, particularly on the real-estate front,” said Dubai-based Rabih Sultani , a fund manager at Duet Mena Ltd. in Dubai, a unit of Duet Group, which oversees $2.1 billion. Home prices in Abu Dhabi dropped 30 percent from the market’s peak in the second quarter of 2008 and will remain little changed this year, Nomura Holdings Inc. said in a January report. The property market in the U.A.E. was hurt after banks curtailed lending and speculators exited at the onset of the financial crisis. Aldar was last down 1.8 percent at 3.85 dirhams after reaching a low of 3.7 dirhams. The net loss was 314.2 million dirhams ($86 million) after a year-earlier profit . Analysts surveyed by Bloomberg had expected a profit. Deyaar declined 2.9 percent to 40.8 fils, headed for the lowest close since the shares began trading in September 2007. The company posted a net loss of 100 million dirhams. Qatar’s DSM 20 index dropped 0.5 percent. Saudi Arabia’s Tadawul All Share Index gained for a second day, increasing 0.1 percent. Oman’s MSM30 Index rose 0.3 percent. The Kuwait Stock Exchange Index was little changed. Bahrain’s market was closed for a holiday. To contact the reporter on this story: Zahraa Alkhalisi in Abu Dhabi at zalkhalisi@bloomberg.net

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Pimco Says Government Bonds to Decline on Record Sales as Growth Falters

December 1, 2009

By Sarah McDonald Dec. 1 (Bloomberg) — Investors will cut government bond holdings as record state auctions damp prices, Pacific Investment Management Co. LLC said today, after boosting its own holdings in October to the most in five years. Demand is set to grow for higher-quality corporate debt as “excessive optimism” about a global recovery wanes, said John Wilson , head of Pimco’s Australian unit, in a statement today. Bill Gross , who runs the world’s biggest bond fund at Pimco, increased his holdings of government-related debt to 63 percent at Oct. 30, the highest proportion since July 2004, according to data on Pimco’s Web site. “A reduced allocation to government debt in portfolios reflects the likelihood of an underperforming government debt sector, due to the substantial government borrowings prompted by the global financial crisis,” John Wilson , head of Pimco’s Australian unit, said in a statement today. Investors will rely more heavily on cash for liquidity needs, he said. Sovereign bond sales surged over the past year as governments sought to fund stimulus projects to haul the world out of its worst recession since World War II. The U.S.’s debt increased by $1.15 trillion this year to $6.95 trillion in October. That helped push up the cost to hedge against rising yields on Treasuries to a record high last month, according to Barclays Plc data based on the so-called skew in options on interest-rate swaps. At more than 37 basis points, the measure was almost 40 times higher than the average before credit markets seized up in August 2007. Investors will focus on actively managed debt funds to seek stable returns, Wilson said. ‘Excessive Optimism’ “The level of current optimism in financial markets is excessive with many analysts extrapolating recent growth rates into the future without taking into account the effect of temporary factors, such as government stimulus,” Wilson said. “Pimco is concerned that the pace of global growth will falter as the temporary impact of inventory rebuild and government fiscal stimulus fades, and as leverage continues to be removed from the market.” Costs to safeguard against corporate defaults rose over the past week after Dubai World sought a standstill agreement from creditors. Dubai and its state-owned companies borrowed $80 billion in a four-year construction boom to transform its economy into a tourism and financial hub. Dubai World, one of those state-owned firms, said today it began “constructive” talks with banks to delay payments on $26 billion of debt. ‘New Normal’ Pimco’s prediction of a “new normal” investment climate includes lower and slower economic growth, higher risk premiums, volatility and a prolonged correction phase, according to today’s statement. “In the new unleveraged environment, global growth will average about 2.5 percent per annum, compared with previous nominal GDP growth of 6 percent to 7 percent,” Pimco said in the statement. Economic growth will slow in 2010, Pimco said. Gross boosted his $192.6 billion Total Return Fund’s investment in Treasuries, so-called agency debt and other U.S. government-linked bonds from 48 percent of assets in September while reducing his position in mortgages to the smallest since May 2004, data on Pimco’s Web site show. To contact the reporter on this story: Sarah McDonald in Sydney at smcdonald23@bloomberg.net .

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Comcast, DirecTV Win Dismissal of Consumers’ `Bundling’ Antitrust Lawsuit

October 19, 2009

By Edvard Pettersson Oct. 19 (Bloomberg) — Comcast Corp. , DirecTV Group Inc. and 11 other pay-TV providers won dismissal of an antitrust lawsuit brought by consumers who said they are harmed by the industry practice of bundling programs in subscription packages. U.S. District Judge Christina Snyder in an Oct. 15 ruling denied a request by lawyers for the consumers that they don’t have to show competitors have been excluded to proceed with their antitrust claims. Both sides previously agreed that, if the judge denies the request, the case would be dismissed and the decision appealed. “Plaintiffs do not seek to allege that any actual or potential competitors have been foreclosed from the tied product market,” Snyder said in her ruling. “It is not sufficient to allege that a desirable version of a product is excluded from the market.” Comcast, DirecTV, Time Warner Cable Inc., Walt Disney Co. and NBC Universal Inc. were among the cable and satellite-TV programmers and distributors that were sued in September of 2007 in Los Angeles. The complaint accused the companies of preventing competition among TV providers by offering only prepackaged tiers of programs and by refusing to allow consumers to buy channels “a la carte.” Maxwell Blecher , a lawyer for the plaintiffs, didn’t immediately return a call for comment. The consumers had sought a ruling that they didn’t have to prove that independent programmers are excluded from the market through bundling because it wasn’t “causally related,” to their allegation they are getting overcharged, according to Snyder’s ruling. The case is Brantley v. NBC Universal Inc., 07-6101, U.S. District Court, Central District of California (Los Angeles.) To contact the reporter on this story: Edvard Pettersson in Los Angeles at epettersson@bloomberg.net .

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Investors try to take advantage of distressed commercial real …

September 22, 2009

While the current troubles facing commercial real estate are causing many to stay away from the market, there are a few who are making a risky decision to get involved and taking advantage of the downturn while hoping the economic slump …

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Munich Re to Unify Reinsurance Units Under Single Brand Name Worldwide

September 6, 2009

By Oliver Suess Sept. 6 (Bloomberg) — Munich Re , the world’s biggest reinsurer, said it will unify the units within its reinsurance segment under the Munich Re brand. “Munich Re will position itself as a comprehensive provider of all types of reinsurance and capital market solutions under the worldwide brand of Munich Re,” the company said at a press conference in Monte Carlo today. Part of the strategy will be tapping into new client groups through specialized primary insurance niches and managing general agencies, the Munich-based reinsurer said. The specialty insurers that Munich Re already owns, such as Midland Co. and Hartford Steam Boiler, which it acquired from American International Group Inc. at the end of last year, will also operate under the Munich Re brand with the addition “Risk Solutions” in the medium term. “Traditional reinsurance is our core business and will remain so. But we should aim to deploy our know-how even more precisely in the future,” Torsten Jeworrek , Munich Re’s management board member responsible for reinsurance, said in Monte Carlo. “We want to be the first point of call for our clients when it comes to solving complex underwriting issues.” Since Munich Re promised HSB’s customers and clients at the closing of the takeover that it wouldn’t touch the brand in the near future, it won’t change the name over the next two years, Jeworrek said, adding that after that period HSB would also use the Munich Re Risk Solutions brand. Price Forecasts The “very broad increase of prices across all lines” that Munich Re anticipated for 2009 at last year’s Monte Carlo meeting, didn’t take place, Jeworrek said. A year ago, Munich Re had asked for rate increases of at least a “double-digit percentage” for 2009 because primary insurers would simply need to buy more reinsurance to protect their capital hit by financial crisis writedowns. “In the bread and butter insurance business the prices stabilized and moved sideways,” Jeworrek said. Going forward Munich Re aims to position itself as a “provider of service reinsurance” and should prices not meet Munich Re’s criteria for contracts next year, the reinsurer would “give up as much volume as necessary,” he said. Reinsurers including Zurich-based Swiss Reinsurance Co. and Munich Re , the world’s biggest reinsurer, are gathering for their annual meeting with clients in Monte Carlo to begin negotiating terms and conditions of next year’s January contract renewals, when Munich Re typically renews about two-thirds of its property and casualty business. Discussions will continue at an October meeting in Baden-Baden , Germany. “Our policy to get better, differentiated prices is still valid, about 35 percent of our non-life business differentiates from the market models,” Jeworrek said. To contact the reporter on this story: Oliver Suess in Munich at osuess@bloomberg.net .

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China to Force Corporate Bond Yields Higher in Bid to Attract Investors

August 13, 2009

By Bloomberg News Aug. 13 (Bloomberg) — Chinese companies will need to boost yields on some new corporate bonds to make them more competitive as the government seeks to spur investor interest in fixed- income securities. New five-year notes in the interbank market — the biggest of China’s three corporate bond markets — must offer a minimum 4.2 percent yield, according to minutes of an Aug. 7 meeting between the National Association of Financial Market Institutional Investors and 16 underwriters. That compares with 3.9 percent for an Aug. 3 issue by Aviation Industry Corp., China’s biggest aerospace company. China is urging companies to tap bond markets for funding as regulators warn that bad loans pose a growing risk to the banking system. Yields on new corporate bonds have dropped below those in the secondary market because of the “strong bargaining power of companies,” said Feng Guanghua, deputy secretary of NAFMII , as the Beijing-based association is called. “Our association supports such coordinated efforts to correct distorted values,” Feng said in a phone interview today, declining to confirm the rates. The minimum interest on one-year commercial paper should be 2.3 percent and on five-year notes 3.35 percent, according to the minutes, obtained by Bloomberg News. Banks have made a record 7.73 trillion yuan ($1.1 trillion) of new loans this year — more than 10 times the 692.3 billion yuan of debt sold by companies on the interbank market. Lending slumped in July to less to than a quarter of the level in June. ‘Rate Gap’ The minimum rate guidelines, which took effect after the Aug. 7 meeting, apply to securities with the top AAA rating. NAMFII is supervised by the central bank and is responsible for registering corporate bonds on the interbank market. Primary bond market yields aren’t reflecting the bonds’ true value, according to the minutes of the meeting. “It’s important to address this rate gap because it’s deterred some investors from the market and is unhelpful to the industry’s growth,” according to the minutes. The average secondary market yield for five-year bonds has risen 1.2 percentage points to 4.14 percent this year, Chinabond.com figures show. To contact the reporters on this story: Belinda Cao in Beijing at lcao4@bloomberg.net ; Tom Kohn in Hong Kong at tkohn@bloomberg.net

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China Will Force Corporate Bond Yields Higher in Bid to Attract Investors

August 13, 2009

By Bloomberg News Aug. 13 (Bloomberg) — Chinese companies will need to boost yields on some new corporate bonds to make them more competitive as the government seeks to spur investor interest in fixed- income securities. New five-year notes in the interbank market — the biggest of China’s three corporate bond markets — must offer a minimum 4.2 percent yield, according to minutes of an Aug. 7 meeting between the National Association of Financial Market Institutional Investors and 16 underwriters. That compares with 3.9 percent for an Aug. 3 issue by Aviation Industry Corp., China’s biggest aerospace company. China is urging companies to tap bond markets for funding as regulators warn that bad loans pose a growing risk to the banking system. Yields on new corporate bonds have dropped below those in the secondary market because of the “strong bargaining power of companies,” said Feng Guanghua, deputy secretary of NAFMII , as the Beijing-based association is called. “Our association supports such coordinated efforts to correct distorted values,” Feng said in a phone interview today, declining to confirm the rates. The minimum interest on one-year commercial paper should be 2.3 percent and on five-year notes 3.35 percent, according to the minutes, obtained by Bloomberg News. Banks have made a record 7.73 trillion yuan ($1.1 trillion) of new loans this year — more than 10 times the 692.3 billion yuan of debt sold by companies on the interbank market. Lending slumped in July to less to than a quarter of the level in June. ‘Rate Gap’ The minimum rate guidelines, which took effect after the Aug. 7 meeting, apply to securities with the top AAA rating. NAMFII is supervised by the central bank and is responsible for registering corporate bonds on the interbank market. Primary bond market yields aren’t reflecting the bonds’ true value, according to the minutes of the meeting. “It’s important to address this rate gap because it’s deterred some investors from the market and is unhelpful to the industry’s growth,” according to the minutes. The average secondary market yield for five-year bonds has risen 1.2 percentage points to 4.14 percent this year, Chinabond.com figures show. To contact the reporters on this story: Belinda Cao in Beijing at lcao4@bloomberg.net ; Tom Kohn in Hong Kong at tkohn@bloomberg.net

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