UPDATE 2-Wall St Week Ahead: Spain aid deal calms Europe fears - Reuters UK UPDATE 2-Wall St Week Ahead: Spain aid deal calms Europe fears - Reuters UK

Sunday, June 10, 2012

UPDATE 2-Wall St Week Ahead: Spain aid deal calms Europe fears - Reuters UK

UPDATE 2-Wall St Week Ahead: Spain aid deal calms Europe fears - Reuters UK

Sun Jun 10, 2012 12:59pm BST

(Updates with Euro zone agreeing to lend Spain up to 100 billion euros)

By Angela Moon

NEW YORK, June 10 (Reuters) - U.S. stocks will get a lift on Monday after euro zone finance ministers agreed to lend Spain up to 100 billion euros ($125 billion) to help its battered banks.

The surprisingly large amount of aid removes a huge cloud that has been hanging over financial markets, with investors fearing that a banking crisis in euro zone's fourth-largest economy could have compounded the currency bloc's troubles with Greece.

Though the exact amount to be lent will be decided in just over a week, striking a deal now means Spain has added support in case Greece's June 17 elections throw financial markets into a tailspin.

"This is a major step in avoiding a contagion," said Tim Speiss, partner-in-charge of EisnerAmper's Personal Wealth Advisors Group in New York.

"The amount is pretty high, higher-than-expected. Although we need to get more details, at least for equity markets in the U.S. and around the world, this definitely eases short-term fears," Speiss said.

U.S. stocks are coming off their best week of 2012, in large part due to expectations that something would be done for Spain's banks.

After a 2-1/2-hour conference call of the 17 finance ministers, which several sources described as heated, the Eurogroup and Madrid said the amount of the bailout would be sufficiently large to banish any doubts.

For Wall Street, anything that diminishes fears over Europe is welcome news. The broad S&P 500 index fell 6.3 percent in May, its largest percentage drop since September, as the euro zone debt crisis worsened in the wake of Greek elections that produced a hung parliament.

In the first Greek poll, a large number of voters voted for parties opposed to the country's international bailout. The re-run of Greek elections on June 17 could decide whether the country stays in the euro zone.

"It's good that the news of the aid come ahead of the Greek elections. There has already been a lot of volatility in the market associated with it (the elections), so it's a good way to calm the sentiment until we get the elections out of the way," said Peter Cardillo, chief market economist at Rockwell Global Capital in New York.

In other parts of the world, news was not as good.

Data showed China's inflation dipped to a two-year low in May while economic activity remained weak. This reinforced expectations that further policy easing could be in the pipeline to head off a sharper slowdown in the world's second-largest economy.

However, the data released by the National Bureau of Statistics on Saturday was not as grim as the market had feared after China's surprising interest rate cut this week - the first since the depths of the 2008/09 global crisis.

But the numbers still suggested economic activity remains sluggish in China. There were also concerns that while the economy may stabilize with stimulus measures, growth could slow down further.


Apple Inc kicks off its annual conference for software developers on Monday, and more than ever, the consumer electronics juggernaut finds itself in a pitched battle with the online search giant, Google Inc - in smartphones, cloud computing and the never-ending competition for the hearts and minds of the best software developers.

Apple is expected to announce its own mapping application, challenging the position of Google Maps as one of the most-valued features on the iPhone. It will unveil closer integration of its iPhone apps and iCloud storage service with all its devices, the latest riposte in its battle with Google's Android smartphone software.

Apple shares rose 1.5 percent to close at $580.32 on Friday. For the week, the stock rose 3.5 percent, but for the month, the shares were almost flat.

Google shares rose 0.4 percent to end at $580.45 on Friday, closing the week with a 1.7 percent gain. However, for the month, the stock was almost unchanged.

On June 1, the S&P 500 index ended below its 200-day moving average for the first time this year, but it clawed its way back above the key level and rallied later in the week on hopes that Europe would find solutions to its problems. For the week on Friday, the Dow advanced 3.6 percent, the S&P 500 rose 3.7 percent and the Nasdaq jumped about 4 percent - their best weekly percentage gains since December.

The U.S. economic calendar in the coming week includes data on the Producer Price Index and retail sales on Wednesday. Reports on the Consumer Price Index and initial weekly jobless claims are set for Thursday. Data on Friday includes the Empire State manufacturing index, U.S. industrial production and the preliminary reading for June on consumer sentiment from the Thomson Reuters/University of Michigan surveys. (Wall St Week Ahead runs every Friday. Comments or questions on this column can be emailed to: angela.moon(at)thomsonreuters.com) (Reporting By Angela Moon; Editing by Kenneth Barry, Jan Paschal and Christopher Wilson)

Financial services firms get stiff fines - Independent Online

The Financial Services Board (FSB) Enforcement Committee, the board’s administrative justice arm, has fined two financial services companies R100 000 each for not adhering to the law.

* The first, Regent Life Assurance Company, was fined R100 000 for contravening the policyholder protection rules of the Long-Term Insurance Act, in that Regent:

- Entered into an agreement in connection with its insurance products with Gertel Algemene Handelaars CC trading as Multi Brokers, while Multi Brokers was not authorised to render financial services;

- Did not provide a policyholder with written information; and

- Conducted business with Multi Brokers without having entered into a written agreement.

The second, Ness Consulting Services, was fined R100 000 for contravening the Financial Advisory and Intermediary Services (FAIS) Act for conducting financial services business with another company, Prospercare Benefit Solutions, which was not licensed to render financial services in respect of funeral benefit policies.

And Prospercare Benefit Solutions was fined R80 000 for contravening:

- The FAIS Act by giving advice and rendering intermediary services on long-term insurance policies without being licensed to do so in terms of the Act; and

- The Long-Term Insurance Act by inducing consumers to buy or continue long-term insurance policies by offering a competition draw that made them eligible to win various types of prizes.

Other recent fines handed down by the Enforcement Committee include:

* Prosperity Group was fined R50 000 for negligently allowing at least one staff member to sell fraudulent life assurance policies to earn commissions. Prosperity clients had their bank accounts debited for the premiums.

The Enforcement Committee found the negligence was a contravention the FAIS Act’s general code of conduct for authorised financial services providers (FSPs) in that Prosperity failed to render financial services with due skill, care and diligence and in the interests of clients and the integrity of the financial services industry when it failed to put in place proper internal controls to prevent or detect the submission of fraudulent applications for insurance cover by its employees.

Prosperity accepted responsibility for the contravention, reported the case to the police, assisted the police in apprehending one of the suspects, reversed the commissions and reimbursed the clients whose accounts were debited as a result of the fraudulent cover.

* FSP Clement Karabo Phakane was fined R25 000 and FSPs Roderick Charles McFarquhar and Gidimag CC were each fined R10 000 for contravening the FAIS Act by marketing and/or advertising the services of foreign-based Safecap Investments trading as Markets.com, which was not an authorised FSP nor a representative of an authorised FSP.

The FSB Enforcement Committee may impose administrative penalties, compensation orders and cost orders on respondents that are found to have contravened any law administered by the FSB.

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Coal stocks at China's Qinhuangdao port surge 13% on week - platts.com

Huaihua, Hunan (Platts)--7Jun2012/518 am EDT/918 GMT

Coal stocks at China's Qinhuangdao port surged 12.7% to 8.76 million mt Wednesday from 7.77 million mt on May 31, Qinhuangdao Port data showed.

This compares with a typical stock level of 6 million-7 million mt and a record high of 9.22 million mt in mid-November 2008.

With outbound coal shipments declining, stocks at Qinhuangdao have been on the rise since May 15.

Article continues below...

Coal stocks at southern China's Guangzhou and Fangcheng port also remain high. Guangzhou held 2.73 million mt Wednesday, compared with 2.78 million mt on May 31, and its coal stocks have remained above 2.7 million mt since April 19, port data showed.

Stocks at Fangcheng stand at 6.5 million mt, down from 6.7 million mt May 21 and a year-to-date high of more than 8 million mt in late February, a Guangdong-based trader said, citing port figures.

Separately, combined coal stocks held by the six major power generators in eastern and southern China, Zhejiang, Shanghai, Guangdong, Datang, Huaneng and Guodian, rose to 16.61 million mt Tuesday from 16.41 million mt on May 29, according to Qinhuangdao port data. This is adequate to fuel 32 days of burn, up from 29.7 days on May 29.

--Reggie Le, newsdesk@platts.com
--Edited by Wendy Wells, wendy_wells@platts.com

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