Gains in financial stocks push up European equities - Reuters UK Gains in financial stocks push up European equities - Reuters UK

Friday, June 15, 2012

Gains in financial stocks push up European equities - Reuters UK

Gains in financial stocks push up European equities - Reuters UK

Fri Jun 15, 2012 9:09am BST

* FTSEurofirst 300 index rises 0.5 percent in early trade

* Financials stocks lead market rally

* Hopes that central banks deal with any Greek vote fallout

LONDON, June 15 (Reuters) - European shares advanced on Friday as financial stocks rose on expectations of new central bank measures to deal with the risk of a Greek exit from the euro zone.

The FTSEurofirst 300 index was up 0.5 percent at 987.46 points by 0745 GMT. Germany's DAX was up 0.9 percent, while France's CAC-40 index rose 1 percent.

Investors are wary ahead of elections in Greece on June 17, which could determine the future of the debt-ridden country in the euro zone currency bloc.

Officials from G20 nations told Reuters on Thursday that central banks were ready to take steps to stabilise financial markets, if needed, by providing liquidity and preventing any credit squeeze after Sunday's election.

The signal that world authorities were ready to take steps to prevent any worsening of Europe's debt crisis supported European financial shares on Friday, which have fallen sharply in recent weeks due to their exposure to Greece.

The STOXX 600 European bank index rose 1.6 percent, while the European insurance index gained by 1.3 percent.

However, Securequity sales trader Jawaid Afsar said he would be tempted to sell off shares later on Friday, in order to minimise any hits to portfolios in case of any unforeseen outcomes from the Greek election.

"If you're already in the rally, you should use the rally to start closing out your positions to reduce the risk ahead of Sunday," he said.

JN Financial trader James Fogden also said the European equities market rally could peter out later in the day, with an expiry of options contracts due at 1000 GMT also likely to make the trading session a volatile one.

"We could see a bit of a pull-back later," he said.

The FTSEurofirst has been within a tight trading range between 970 and 990 points established in early May, and traders said it was likely to remain in that range while uncertainty over the euro zone debt crisis persisted. (Reporting by Sudip Kar-Gupta; Editing by Louise Ireland)

Stocks Advance With Commodities on Stimulus Bets; Dollar Drops - Bloomberg

Stocks and commodities climbed for a second day while Treasuries advanced amid speculation central banks will take steps to boost growth as investors await Greek elections this weekend.

The MSCI All-Country World Index (MXWD) added 0.9 percent at 11:57 a.m. New York time, heading for a second straight weekly gain. The Standard & Poor’s 500 Index increased 0.6 percent. The S&P GSCI Index of 24 raw materials added 0.2 percent. Yields on 10- year Treasuries dropped seven basis points to 1.58 percent. The yen strengthened against all 16 of its major peers.

Policy makers from the U.K. to Japan and Canada stepped up warnings about the threat to world financial markets should Europe fail to contain its debt crisis. Greek elections June 17 may determine whether the country upholds austerity measures attached to international aid and remains in the euro bloc. Reports on U.S. industrial production and consumer confidence trailed projections.

“There’s hope of some coordinated action if bad news does occur,” said Tim Ghriskey, who oversees about $2 billion as chief investment officer of Solaris Group in Bedford Hills, New York. “That seems to be supporting the stock market. Yet investors are still skittish. There’s the Greek election. It could be an ongoing process.”

All of the 10 main industries in the S&P 500 rallied as commodity and technology shares had the biggest gains. Financial shares erased losses. Microsoft Corp., the world’s largest software maker, and Dow Chemical Co., the biggest U.S. chemical company by revenue, climbed at least 2 percent. Citigroup Inc. retreated 1.8 percent.

European Stocks

The Stoxx Europe 600 Index (SXXP) climbed 1 percent. Banks rebounded after the Bank of England said it will provide billions of pounds of emergency aid to U.K. lenders. Barclays Plc jumped 4.2 percent, Lloyds Banking Group Plc added 5.2 percent and Royal Bank of Scotland Group Plc surged 7.9 percent. The central bank will allow the lenders to swap assets for money they can loan to companies and households.

European Union leaders will press for new efforts to boost the area’s economy and improve lending conditions, according to a draft document prepared for a June 28-29 summit in Brussels. Steps include introducing so-called project bonds, making better use of EU infrastructure funds and increasing the capital, and therefore lending power, of the European Investment Bank, according to the June 12 draft.

Gold futures added 0.5 percent to $1,627.60 an ounce, rallying for a sixth straight day. Copper rose 1.1 percent to $3.3905 a pound. Natural gas slipped 0.3 percent after surging 14 percent yesterday.

Treasuries Rise

Treasuries rose as lower-than-estimated economic reports reinforced speculation that the Fed will add to stimulus measures, stoking investor demand for the safety.

Industrial production in the U.S. unexpectedly fell in May for the second time in three months as factories turned out fewer vehicles and consumer goods. Output at factories, mines and utilities decreased 0.1 percent last month after a revised 1 percent gain in April, the Fed reported today in Washington. Economists forecast a 0.1 percent advance, according to the Bloomberg News survey median.

Confidence among U.S. consumers declined in June to the lowest level this year as the labor market showed few signs of improving. The Thomson Reuters/University of Michigan index of consumer sentiment fell to 74.1 from the May reading of 79.3, which was the highest since October 2007. The gauge was projected to fall to 77.5, according to a median forecast of 66 economists surveyed by Bloomberg News.

The yen strengthened the most in two weeks against the dollar after the Bank of Japan refrained from expanding monetary stimulus that debases the currency. The yen appreciated 0.9 percent to 78.66 per dollar, the biggest gain since May 31. It advanced 0.9 percent to 99.38 per euro.

To contact the reporters on this story: Stephen Kirkland in London at; Rita Nazareth in New York at

To contact the editor responsible for this story: Nick Baker at

Enlarge image Stocks Advance With Commodities on Stimulus Bets

Stocks Advance With Commodities on Stimulus Bets

Stocks Advance With Commodities on Stimulus Bets

Scott Eells/Bloomberg

Traders work at the New York Stock Exchange (NYSE) in New York.

Traders work at the New York Stock Exchange (NYSE) in New York. Photographer: Scott Eells/Bloomberg

June 15 (Bloomberg) -- Emil Wolter, head of Asian equities strategy at Macquarie Group in Singapore, talks about the outlook for this Sunday's Greek elections, Europe's debt crisis and its implications for Asian economies and financial markets. He speaks with Mia Saini on Bloomberg Television's "First Up." (Source: Bloomberg)

June 15 (Bloomberg) -- Mohamed El-Erian, chief executive officer and co-chief investment officer of Pacific Investment Management Co., talks about the European debt crisis, Federal Reserve monetary policy and the prospects for the currency market. He speaks with Betty Liu on Bloomberg Television's "In the Loop." Sheila Dharmarajan, Alix Steel, Sara Eisen and Dominic Chu also speak. (Source: Bloomberg)

STOCKS NEWS SINGAPORE-ABN AMRO upgrades CapitaLand to buy - Reuters UK

Fri Jun 15, 2012 9:16am BST

(Refiles to fix bank name in first paragraph)

ABN AMRO Private Banking has upgraded property developer CapitaLand Ltd to 'buy' from 'hold', with a target price of S$2.93, citing policy loosening and rate cuts in China.

Shares of CapitaLand were up around 3 percent at S$2.71 and have gained about 22.6 percent so far this year, versus the Straits Times Index's 6 percent gain.

While first-time homes still make up the bulk of sales, upgrader demand has returned on the back of China's interest rate cuts, its first since the global financial crisis, ABN AMRO said.

China makes up around 30 to 40 percent of CapitaLand's revalued net asset valuation, it added.

Average selling prices for residential properties in Beijing and Hangzhou are down 25 and 37 percent respectively since 2011, but are falling at a slower pace helped by a recovery in sales volumes, ABN AMRO said, adding the company does not have significant unsold inventory.

However, CapitaLand management does not expect the housing market to ease significantly until mid-2013, when there is potentially more clarity on housing policies, ABN AMRO said.

"Management intends to focus on Beijing, Shanghai, Chengdu and Chongqing going forward, where it believes it has enough scale and product edge to differentiate itself from competition," it said.

1514 (0714 GMT)

(Reporting by Leonard How in Singapore;


12:51 STOCKS NEWS SINGAPORE-Shares rise, led by CapitaLand

Singapore share were up by midday, reversing two straight days of losses as investors regained some confidence from plans by major central banks to limit potential fallout following this Sunday's Greek elections.

At 0426 GMT, the benchmark Straits Times Index was up around 0.5 percent at 2,787.79.

Other Asian bourses were also up, with the MSCI Asia-Pacific index excluding Japan gaining 0.7 percent, slightly outperforming Singapore.

Officials from the G20 nations, whose leaders are meeting in Mexico next week, said that central banks were ready to take steps to stabilise financial markets - if needed - by providing liquidity and prevent any credit squeeze after Sunday's election.

Property developer CapitaLand Ltd and rigbuilder Sembcorp Marine were the biggest gainers on the index, rising about 2.7 percent and 2.3 percent respectively. Sembcorp was also the second most-traded stock by value.

1232 (0432 GMT) (Reporting by Leonard How in Singapore;


11:20 STOCKS NEWS SINGAPORE-DBS says S'pore tourism sector healthy

Singapore's tourist arrivals in April rose 9 percent from a year ago, and could point to a record breaking performance for hoteliers in the second quarter, which will benefit the hospitality sector, said DBS Vickers.

The brokerage also said the Singapore Tourism Board's (STB) target of 13.5 million to 14.5 million visitor arrivals this year could be exceeded.

According to STB data, tourism arrivals for the month of April rose 9 percent to 1.2 million from a year earlier, raising year-to-date arrivals to 4.8 million.

Hotel occupancy rates for April were at 87 percent with revenue per available room around S$227 per night, a 12 percent year-on-year jump, STB said.

"Visitor arrival numbers should continue to remain robust given the expected strong line-up of Meetings, Incentives, Conventions and Exhibitions events in coming months," DBS said.

Its top picks for the hospitality sector are CDL Hospitality Trusts, with a buy rating and target price of S$2.06, and Genting Singapore. It has a buy rating and target price of S$2.05 on Genting stocks.

1033 (0233 GMT)

(Reporting by Leonard How in Singapore;


09:57 STOCKS NEWS SINGAPORE-STX OSV rises after order win

Shares of STX OSV Holdings Ltd rose as much as 3.52 percent after the offshore vessel builder said it had won a $235 million contract, prompting analysts to raise their target prices for the stock.

By 0156 GMT, shares of STX OSV were up 3.2 percent at S$1.465, and have gained about 26 percent since the start of the year, compared with the FTSE ST Oil & Gas Index's 13 percent gain.

STX OSV said its won a contract worth 1.4 billion Norwegian crown ($235 million) to design and build an advanced offshore subsea construction vessel for Ocean Installer and Solstad Offshore.

CIMB Research said this was STX OSV's largest contract win since its listing in Singapore and its fifth subsea order so far this year.

CIMB raised its target price for STX OSV to S$2.09 from S$2.02 and kept its 'outperform' rating, as it bumps up its order target for the company to 10 billion Norwegian crowns, from 9 billion Norwegian crowns.

"Investment in drilling units in 2011 should pave the way for such vessels, which are needed for field development. We continue to see opportunities in the subsea segment," said CIMB.

Another brokerage DMG & Partners also lifted its earnings per share estimates for STX OSV in 2012-2013 by 4-6 percent, upgrading its target price to S$2.05 from S$2.00.

For a related statement click

0942 (0142 GMT) (Reporting by Charmian Kok in Singapore;


8:40 STOCKS NEWS SINGAPORE-Index futures up 0.1 pct

Singapore index futures were 0.2 percent higher, indicating a slightly positive start for the benchmark Straits Times Index.

Asian shares edged up on Friday, and the euro held most of the previous session's gains, as nervous investors took comfort from plans for coordinated action by major central banks to stabilise markets if Sunday's election in Greece results in turmoil. (Reporting by Charmian Kok in Singapore;

Bank stocks raise London stocks higher - Financial Times

Last updated: June 15, 2012 5:10 pm

European Stocks Close Higher as Banks Recover - CNBC

European shares advanced on Friday as financial stocks rose on expectations of new central bank measures to deal with the risk of a Greek exit from the euro zone.

The FTSEurofirst 300 index [.FTEU3  Loading...      ()   ] was up. U.S. stocks held on to gains, also lifted by the reports that major central banks are preparing coordinated action to provide liquidity.

British banks Royal Bank of Scotland [RBS.L  Loading...      ()   ] and Lloyds [LLOY.L  Loading...      ()   ] were among the biggest gainers in Europe. Barclays [BARC.L  Loading...      ()   ] also closed sharply higher.

Investors are wary ahead of elections in Greece on June 17, which could determine the future of the debt-ridden country in the euro zone currency bloc.

Officials from G20 nations told Reuters on Thursday that central banks were ready to take steps to stabilise financial markets, if needed, by providing liquidity and preventing any credit squeeze after Sunday's election.

The signal that world authorities were ready to take steps to prevent any worsening of Europe's debt crisis supported European financial shares on Friday, which have fallen sharply in recent weeks due to their exposure to Greece.

The STOXX 600 European bank index [.SX7P  Loading...      ()   ] rose, while the European insurance index [.SXIP  Loading...      ()   ] also gained.

The FTSEurofirst has been within a tight trading range between 970 and 990 points established in early May, and traders said it was likely to remain in that range while uncertainty over the euro zone debt crisis persisted.

Financial, Political Uncertainty Grips Europe - Voice of America

Financial and political uncertainty is gripping Europe, with new evidence of its economic slump and contentious parliamentary elections Sunday in Greece centered on its fate in the euro currency bloc.

The chief of the European Central Bank, Mario Draghi, warned Friday that the 17-nation eurozone faces “serious downside risks,” mostly because of “heightened uncertainty.” He said the bank stood ready to provide more money to solvent banks to avert a major credit crunch if economic conditions worsen.

A new European Union report said the number of people working in the eurozone fell another 277,000 in the first three months of the year, the third straight quarter employment has dropped. And the international ratings agency Moody's downgraded the credit standing of banks in the Netherlands, France, Luxembourg and Belgium because of the eurozone's deteriorating financial condition.

Nowhere is the uncertainty higher than in Greece, where voters will head to the polls Sunday for the second time in six weeks. It is a vote that has become a referendum on whether Athens stays in the eurozone or becomes the first to leave the currency union. An election last month proved inconclusive.

Greece's European neighbors and the International Monetary Fund have handed the country $300 billion in two bailouts in the last two years, but in exchange demanded sharp austerity spending cuts that have angered Greeks.

Now, ahead of the election, Greek political leaders are calling for renegotiated bailout terms. Radical left Syriza leader Alexis Tsipras says if he is elected, the bailout will be history.

“As of Monday, together with the people, we begin a new era. An era of great changes and great reforms for the people. On Monday, the bailout will be history. Monday will be a new era of growth and social solidarity. Together, we will begin to change the country.''

His key opponent, conservative leader Antonis Samaras, has also called for revamping the bailout terms, but has also emphasized Greece's continued role in the eurozone.

“We cannot play poker or dice with Greece. There is the path of responsibility, in which you are clear about what you want, and we say we want the euro and renegotiation. There are others who are vague, they don't speak clearly and in our opinion, that is the path of irresponsibility.''

Liverpool owner John Henry plays down financial impact of new stadium - The Independent

The lead figure in Fenway Sports Group has suggested a new-build in Stanley Park would most likely lead to increased ticket prices, quoting recent examples taken from the United States.

Henry believes the best way of improving the Reds' ability to compete financially is through worldwide commercial revenue streams and their long-term future is not dependent on the stadium issue, which casts doubt over whether the long-mooted Stanley Park project will ever come to fruition.

"A long-term myth has existed about the financial impact of a new stadium for Liverpool," the American wrote in an email to The Anfield Wrap website.

"A belief has grown that Liverpool FC must have a new stadium to compete with (Manchester) United, Arsenal and others.

"No-one has ever addressed whether or not a new stadium is rational.

"New stadiums that are publicly-financed make sense for clubs - I've never heard of a club turning down a publicly-financed stadium.

"But privately carrying new stadiums is an enormous challenge. Arsenal is centred in a very wealthy city with a metropolitan population of approximately 14 million people.

"They did a tremendous job of carrying it off on a number of levels but how many new football stadiums with more than 30,000 seats have been built in the UK over the past decade or so?

"New stadiums increase revenues primarily by raising ticket prices - especially premium seating."

Henry accepts there is a balancing act to be done when considering the worth of a new stadium against a redevelopment of Anfield, which presents numerous logistical problems.

"We've been exploring a new stadium for the past 18 months. At one point we made it clear that if a naming rights deal could be secured of sufficient size, we would make every effort to build a new facility," he added.

"Liverpool FC has an advantage in being a global club and a naming rights deal could make a new stadium a reality.

"It is something we are working on. There has been interest.

"Going in the other direction, many football clubs have successfully enlarged their seating capacity.

"LFC has had plans to expand the main stand at Anfield but this avenue has been very difficult for the club over the past couple of decades.

"There are homes behind the main stand. Expansion of the main stand would have to be a priority for the city, community and immediate neighbourhood in order for that to occur.

"This issue is vital to the neighbourhood's future but we cannot and will not act unilaterally.

"While a new stadium or an expansion of Anfield is beneficial over the long-term for the club, the financial impact of adding seats and amenities should be put into perspective.

"That's why I say that it is a myth that stadium issues are going to magically transform LFC's fortunes.

"Building new or refurbishing Anfield is going to lead to an increase from £40million of match-day revenue to perhaps £60-70m if you don't factor in debt service.

"That would certainly help but it's just one component of LFC long-term fortunes.

"Our future is based not on a stadium issue but on building a strong football club that can compete with anyone in Europe.

"This will be principally driven financially by our commercial strengths globally."


U.S. targets financial abuse of elderly - Los Angeles Times
WASHINGTON — Federal regulators launched an investigation into the financial abuse of the elderly, citing a new report that advisors, planners, family members and others were ripping off seniors more than ever.

Americans over 60 lost at least $2.9 billion in 2010 to financial exploitation — ranging from simple home repair scams to complex insurance swindles. That figure was up 12% from 2008, according to a study released Thursday by MetLife Mature Market Institute, the National Committee for Prevention of Elder Abuse and Virginia Tech University.

The rise in abusive tactics led the Consumer Financial Protection Bureau to begin looking into the types of scams affecting older Americans and coming up with the best ways to prevent them. A specific focus will be on the credentials of people who tout themselves as financial advisors.

"The silent crime of financially exploiting the elderly is widespread, and it is devastating. It is critical for us to act," Richard Cordray, the agency's director, said at a White House forum Thursday ahead of World Elder Abuse Awareness Day.

"The generation that rebuilt and sustained this nation out of a devastating Depression, the dark hours of World War II and the anxious fears of the Cold War deserve our care now," Cordray said.

Tougher oversight by regulators is needed to prevent financial predators from preying on vulnerable elderly victims, said Patricia L. McGinnis, executive director of California Advocates for Nursing Home Reform, a San Francisco group that often deals with financial abuse.

"The bottom line is, you need to go after the predators. You need to punish them and you need to convict them," she said. "Put them in jail and make an example of them, but more importantly, get the money back for that victim. Make them whole again."

McGinnis described efforts by regulators and advocates to prevent the scamming of older Americans as a game of Whac-A-Mole.

A recent scam enticed senior citizens to put large amounts of savings into deferred annuities, reducing their savings to qualify for a particular federal veterans benefit. The veteran might get $1,000 a month from the benefit, but loses access to the cash for years. Meantime, the annuity salesperson earned a commission of 8% to 12%, she said.

Victims often are reluctant to fight back.

"I can't tell you the times I talk to people and they say, 'It was my own fault,'" McGinnis said. "They are very embarrassed."

The scams have increased as the economy has struggled. Survey results released this week by the nonprofit Investor Protection Trust found that 84% of experts who deal with financial exploitation of the elderly said the problem has worsened.

But there is a lack of comprehensive information on the problem, which the consumer bureau's inquiry could help solve, said Elizabeth Costle, director of the consumer and state affairs team at the AARP Public Policy Institute.

Financial predators often target the elderly because they are viewed as gullible, Cordray said.

"Many seniors have routines, and their predictable patterns make them easier targets for predators," Cordray said. "Abusers often assume that the victim will be too embarrassed or too frail to pursue legal action against them, and unfortunately that assumption is too often proven to be correct."

The agency's inquiry seeks comments from the public on several issues. They include detailing the unfair, deceptive and abusive practices targeted at the elderly, finding the types of financial planning resources, and evaluating the credentials of financial advisors. The agency will be accepting public comments until Aug. 13.

Cordray said that some people who tout themselves as experts on elderly financial issues have had only a few hours of inadequate training.

"We need to distinguish between the true experts and those engaged in predatory conduct," he said.

The qualifications of financial advisors are important as new retirees must decide what to do with lump-sum 401(k) payouts and often must juggle many complex options, Costle said. The ability to understand those options gets more difficult as people age.

"As people get older, particularly up into their 80s ….they're just less able to process financial information," she said. "They're more likely to be trusting of people and they open themselves up to more abuse, which is perpetrated both by strangers and by caregivers and family members who are close to them."

Congress and the White House have increased their focus on the issue.

Lawmakers included the Elder Justice Act in the 2010 healthcare reform law to coordinate federal efforts. As part of the law, Health and Human Services Secretary Kathleen Sebelius on Thursday announced $5.5 million in grants to states to "test ways to prevent elder abuse, neglect and exploitation."

Morning business round-up: ECB ready to act 'if necessary' - BBC News

What made the business news in Asia and Europe this morning? Here's our daily business round-up:

The European Central Bank (ECB) said it is ready to provide further support ''if necessary'' to the eurozone's banking system.

Its president Mario Draghi said: "The eurosystem will continue to supply liquidity to solvent banks where needed."

A general election in Greece on Sunday has heightened fears of further instability on financial markets.

Greece saw a major retailer, France's Carrefour, pull out of the country.

The French retail giant said it was selling its stake in its Greek joint venture owing to fears about Greece's deteriorating economic situation.

It is selling to partner Marinopoulos, and will take a financial charge of about 220m euros (£179m; $278m) on the deal.

In a statement, the company said the move was in response to "challenges posed by the Greek economic context".

Carrefour's shares rose 1.68% following the announcement.

Still in Europe, new EU car registrations slumped.

Demand for new passenger cars fell sharply across the European Union in May, reflecting weak consumer confidence in the wake of the financial crisis.

The European Automobile Manufacturers' Association said new car registrations totalled 1,106,845 vehicles, down 8.7% compared to the same month last year.

France led the decline with a 16.2% market contraction, closely followed by Italy, which fell 14.3%.

Only the UK market grew, rising 7.9%.

Meanwhile, in the UK, its central bank acted to try to boost confidence and lending against a backdrop of failing business nerve in the face of the eurocrisis.

UK bank shares jumped on the stimulus move.

The Bank of England's plan, announced late on Thursday, came in response to the worsening economic outlook, its governor Sir Mervyn King said.

Together with the government, it will provide billions of pounds of cheap credit to banks to lend to companies.

Business headlines

To Asia now, where Coca-Cola announced it would start business again in Burma.

It has been 60 years since it last operated there and its return follows a US decision to suspend investment sanctions against the country.

Officials suspended the sanctions last month as the country has moved towards democratic reforms.

Coca-Cola is waiting for a licence from the US government.

The country was one of only three that Coca-Cola does not do business with.

And as Burma opens up to international business, the latest Business Daily podcast reports from Rangoon, and asks if Burma is set to become a new Asian Tiger, or whether the legacy of 50 years of mismanagement is too great an obstacle.

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