Regions

[Muthukali]

Asia Stocks Drop on Europe; S&P 500 Futures, Copper Gain

Asian stocks fell for a sixth day, the longest stretch of losses since August, and bond risk in the region rose after Sony (6758) Corp. posted a record loss and concern grew that Europe’s debt crisis is worsening. U.S. equity futures climbed as Alcoa Inc. reported an unexpected profit.

The MSCI Asia Pacific Index lost 0.9 percent as of 1:05 p.m. in Tokyo. Standard & Poor’s 500 Index futures added 0.3 percent following a 1.7 percent slump in the equity gauge yesterday. Ten-year Treasury yields rose two basis points to 2 percent. The Australian dollar rose against all 16 major counterparts. Copper and aluminum gained at least 0.5 percent. Oil rose 0.2 percent to $101.20 a barrel in New York.

Sony and Sharp Corp., Japan’s biggest makers of liquid- crystal-display televisions, posted losses totaling 900 billion yen ($11 billion) as global demand weakened for the first time in six years. The U.S. Federal Reserve is scheduled to release its Beige Book business survey later today and Italy will sell 11 billion euros ($14.4 billion) of bills. Spanish Prime Minister Mariano Rajoy said yesterday that the nation’s future is at stake in its battle to tame surging bond yields.

“Spain is in a very difficult situation and more likely than not to require some type of official intervention,” said Stephen Halmarick, Sydney-based head of investment markets research at Colonial First State Global Asset Management, which oversees about $150 billion. “We are likely to have another very difficult day in the market.”

Spanish Bonds
With Spanish bonds trading closer to levels that prompted Greece, Ireland and Portugal to seek European bailouts, Rajoy will address lawmakers of his People’s Party today to explain the deepest budget cuts in three decades. Spain’s 10-year yields touched 5.99 percent yesterday, the most since Dec. 12.

Six stocks fell for each that rose in the MSCI Asia Pacific Index. (MXAP) The Nikkei 225 Stock Average (NKY) lost 1.3 percent for a seventh day of losses, the longest period of declines since July 2009. Hong Kong’s Hang Seng Index retreated 1.3 percent and Australia’s S&P/ASX 200 Index slid 0.9 percent. Markets in South Korea and Malaysia are closed for holidays.

Sony tumbled 5 percent. The company had a loss of 520 billion yen for the year ended March 31, it said yesterday after the close of trading in Tokyo. Sharp slid 3.4 percent after reporting a 380 billion yen full-year loss.

Alcoa Earnings
Gains in S&P 500 futures indicate the equity benchmark may snap a five-day losing streak when markets open in New York. The S&P 500’s slump yesterday was the biggest retreat this year. Shares of Alcoa, the largest U.S. aluminum producer, rallied 5.4 percent in after-hours trading.

Earnings from S&P 500 companies, excluding financials, may rise 0.6 percent in the first and second quarters from a year earlier, according to analyst estimates compiled by Bloomberg. That would be the slowest growth since 2009.

Aluminum advanced from the lowest level in three months, climbing 0.8 percent. Copper rose 0.5 percent as Japan’s machinery orders exceeded all economists’ estimates in February.

The cost of insuring Asia-Pacific bonds from default increased, according to traders of credit-default swaps. The Markit iTraxx Asia index of 40 investment-grade borrowers outside Japan advanced 5 basis points to 172.5, Royal Bank of Scotland Group Plc prices show. The measure is on course for its highest close since Feb. 1, according to CMA.

The Australian dollar strengthened 0.3 percent to $1.0281. New Zealand’s currency advanced 0.3 percent to 81.71 U.S. cents.

Three-month non-deliverable forwards for South Korea’s won dropped to their weakest level since January on concern the ruling party will lose control of parliament in an election today amid escalating tensions with the North, which is set to launch a long-range rocket in coming days. The contracts declined 0.3 percent to 1,153.25 per dollar in Hong Kong.

“The North Korea and election issues are all adding to negative sentiment on the won at a time when we are seeing general risk-off sentiment in the markets,” said Yuji Kameoka, chief currency strategist at Daiwa Securities Co. in Tokyo.

 

[Muthukali]

SET down 11.12 points - Thailand

The Stock Exchange of Thailand main index went down 11.12 points or 0.95% to close at 1,154.49 points at the end of trading session on Wednesday afternoon. The trade value was 25.99 billion baht, with 3.46 billion shares traded.

The SET50 index ended at 810.76 points, down 8.81 points or 1.07%, with a total trade value of 19.24 billion baht.

The SET100 index fell 18.29 points or 1.03% to stand at 1,760.05 points, with a total turnover of 21.89 billion baht.

The SETHD index went down 15.06 points or 1.35% to stand at 1,099.73 points, with total trade value of 6.54 billion baht.

The MAI index dropped 2.14 points or 0.75% to close at 284.75 points, with total transaction value of 312.81 million baht.

Top five most active values were as follows;

IVL - stood at 34.00 baht, down 1.00 baht (2.86%)
BANPU - stood at 578.00 baht, down 4.00 baht (0.69%)
PTT - stood at 341.00 baht, down 8.00 baht (2.29%)
KBANK (XD) - stood at 148.50 baht, down 2.50 baht (1.66%)
SCB - stood at 140.00 baht, down 1.50 baht (1.06%)

 

[Muthukali]

SET rises 14.96 points - Thailand

The Stock Exchange of Thailand main index went up 14.96 points or 1.30% to close at 1,169.45 points at the end of trading session on Thursday afternoon. The trade value was 20.60 billion baht, with 2.38 billion shares traded.

The SET50 index ended at 821.45 points, up 10.69 points or 1.32%, with a total trade value of 14.49 billion baht.

The SET100 index rose 23.20 points or 1.32% to stand at 1,783.25 points, with a total turnover of 16.64 billion baht.

The SETHD index went up 9.83 points or 0.89% to stand at 1,109.56 points, with total trade value of 4.29 billion baht.

The MAI index gained 4.29 points or 1.51% to close at 289.04 points, with total transaction value of 200.46 million baht.

Top five most active values were as follows;

KBANK (XD) - stood at 154.00 baht, up 5.50 baht (3.70%)
IVL - stood at 33.50 baht, down 0.50 baht (1.47%)
ADVANC - stood at 168.00 baht, up 3.00 baht (1.82%)
BANPU (XD) - stood at 572.00 baht, down 6.00 baht (1.04%)
PTTGC - stood at 67.00 baht, up 0.50 baht (0.75%)

 

[Muthukali]

U.S. Jobless Claims Rise to 380,000, Higher Than Forecast

More Americans than forecast filed claims for jobless benefits last week, a sign the pace of improvement in the labor market is slowing.

Jobless claims increased 13,000 in the week ended April 7 to 380,000, the highest since Jan. 28, the Labor Department reported today in Washington. The median forecast in a Bloomberg News survey called for 355,000 claims. The number of people on unemployment benefit rolls and those receiving extended payments declined.

A sustained pickup in claims, following last week’s figures showing a smaller-than-projected rise in March employment, may make it difficult to boost the consumer spending that makes up 70 percent of the economy. The figures highlight Federal Reserve Chairman Ben S. Bernanke’s concern that stronger demand is required to fuel labor market gains.

“On the back of last week’s employment report, this does suggest momentum in labor market is slowing a bit,” said Sean Incremona, a senior economist with 4Cast Inc. in New York, who forecast 372,000 claims, the highest in the Bloomberg survey. “I wouldn’t, though, read one claims report and one payrolls report as suggesting that the trend of improvement has stalled.”

Claims in the prior week were revised to 367,000 from a previously reported 357,000.

Stock-index futures trimmed gains after the figures. The contract on the Standard & Poor’s 500 Index expiring in June rose 0.2 percent to 1,366.5 at 8:35 a.m. in New York, after rising as much as 0.6 percent earlier.

Economists’ Estimates
Estimates of the 46 economists in the Bloomberg survey ranged from 350,000 to 372,000. The four-week moving average, a less-volatile measure than the weekly figures, increased to 368,500 last week from 364,250.

A Labor Department spokesman said as the figures were released that there was “nothing unexpected” in the latest claims data. Incremona said that this week in particular there’s a lot of volatility in the seasonal adjustment process that played a part because of the Easter holiday.

The total number of people receiving jobless benefits fell by 98,000 in the week ended March 31 to 3.25 million.

In addition to the jobless claims, the number of Americans receiving extended benefits under federal programs decreased by about 34,000 to 3.22 million in the week ended March 24.

The unemployment rate among people eligible for benefits, which tends to track the jobless rate, held at 2.6 percent, today’s report showed.

Nineteen states and territories reported an increase in claims, while 34 reported a decrease. These data are reported with a one-week lag.

March Employment
The figures follow statistics on April 6 that showed employers added 120,000 jobs in March, half as many as in February and the fewest in five months.

Bernanke, in a speech to economists on March 26, said the recent employment gains have been a “welcome development. Still, conditions remain far from normal, as shown, for example, by the high level of long-term unemployment and the fact that jobs and hours worked remain well below pre-crisis peaks.”

“We cannot yet be sure that the recent pace of improvement in the labor market will be sustained,” Bernanke said, adding he was particularly concerned about the number people out of work for six months or longer.

Adecco Group North America, a division of Adecco SA (ADEN) in Glattbrugg, Switzerland, the world’s largest provider of temporary employees, said demand for workers is accelerating in some fields.

“We do continue to see increases in the healthcare and manufacturing areas,” Janette Marx, a senior vice president at the Melville, New York-based company said in an interview last week. “Those areas definitely have been showing some nice increases.”

 

[Muthukali]

Consumer Prices in U.S. Probably Rose at Slower Pace in March

The cost of living in the U.S. probably rose at a slower pace in March as the run-up in energy prices lost steam, economists said before a report today.

The consumer-price index increased 0.3 percent last month after rising 0.4 percent in February, according to the median forecast of 80 economists surveyed by Bloomberg News. So-called core prices, which exclude volatile food and energy costs, may have climbed 0.2 percent.

Companies like Levi Strauss & Co. and Jos. A. Bank Clothiers Inc. may find it difficult to keep raising prices as 12.7 million Americans remain unemployed, almost twice the number at the end of the last expansion. Less inflation would give Federal Reserve policy makers room to keep interest rates near zero to spur the economic recovery and boost employment.

“Inflation is going to moderate as the year moves forward given the sluggish demand outlook,” said Sam Bullard, a senior economist at Wells Fargo Securities LLC in Charlotte, North Carolina. “There’s a lot of slack in the labor market that’s not permitting manufacturers and retailers to pass along costs to consumers.”

The Labor Department’s data are due at 8:30 a.m. in Washington. Economists’ estimates ranged from increases of 0.1 percent to 0.5 percent.

The median forecast would mean consumer prices climbed 2.7 percent over the past year, slower than the prior month and the smallest gain since March 2011. The core index is projected to increase 2.2 percent from March 2011.

Fed’s View
Fed officials, who’ve said energy costs will probably subside, have indicated they will hold off on more monetary stimulus unless prices rise more slowly than their 2 percent target or the economic expansion falters, according to the minutes of their March 13 meeting. Their preferred price gauge, issued by the Commerce Department and tied to consumer spending, rose 2.3 percent in the year ended in February.

“We expect this moderation of overall inflation to resume later this year,” Federal Reserve Bank of New York President William C. Dudley said April 12.

Fuel prices have already started to stabilize. The cost of a gallon of regular gasoline at the pump eased to $3.91 on April 11 from a 10-month high of $3.94 reached a week earlier, figures from AAA, the biggest U.S. auto group, show.

Fed Vice Chairman Janet Yellen endorsed the central bank’s “highly accommodative” policy this week, stating the Fed probably won’t meet its goal of full employment for years while inflation will remain in check.

Yellen on Jobs
“I anticipate that we will fall far short in achieving our maximum employment objective, and I expect inflation to remain at or below” the Fed’s goal, Yellen said in a speech in New York. Economic growth “will be sufficient to lower unemployment only gradually from this point forward,” Yellen said.

While the economy has added an average of more than 180,000 jobs since October, weaker employment gains last month signal labor market progress could be slowing. The slack evidenced by an 8.2 percent unemployment rate might then limit the success companies like Levi Strauss have had passing the cost of more expensive raw materials onto consumers.

“We pushed prices fairly aggressively during 2011 and still haven’t been able to fully cover all the cotton price increases, but we’re probably to the end of our ability to push pricing much further,” Blake Jorgensen, chief financial officer of the San Francisco-based company, said in an April 10 conference call with analysts.

Markups Difficult
Jos. A. Bank is in a similar situation.

“To date, we have been less successful in raising our out- the-door prices on some promotional product offerings” this year than last, R. Neal Black, president and chief executive officer at the Hampstead, Maryland-based retailer said on a March 29 conference call.

A Labor Department report yesterday showed while prices were little changed in March. The cost of imported goods, reported April 11, rose 0.8 percent.

The CPI is the broadest of the three monthly price measures from the Labor Department because it includes goods and services. About 60 percent of the CPI covers prices consumers pay for services ranging from medical visits to airline fares and movie tickets.

 

[Muthukali]

Traders Walk Out of CME Eurodollar Pit to Protest Trade

Local traders in the CME Group Inc. (CME)’s Eurodollar options pit walked off the job today to protest a block trade yesterday.

“These guys that stand in there all day and make prices would have loved to participate in that particular price, but they weren’t able to,” Rocco Chierici, a broker at R.J. O’Brien & Associates on the floor of the Chicago Mercantile Exchange, said in a telephone interview.

Prices for the block trades of options on Eurodollar futures were higher than offers in the pit, which wouldn’t be allowed in open-outcry trading, Chierici said. Local traders buy and sell for their own account and in the process help add liquidity to a market. Block trades are privately negotiated transactions that are conducted outside the normal pit or via computer-based trading systems used by exchanges.

“There are rules that prohibit that in the pit, but you can circumvent the pit” in a block trade, Chierici said. “I believe they wanted to make the point that the system is not fair.”

Six block trades totaling 215,200 options traded at 8:11 a.m. Chicago time yesterday, according to CME Group’s website. The trade was rolling positions from April contracts, which expired today, into June contracts.
‘Longstanding Rules’

“The block trade in question was managed by longstanding rules and processes of our exchanges,” Michael Shore, a CME Group spokesman, said in an e-mail. “It was a legitimate, well- managed trade, which was executed within one tick of the market and in one trade.”

Other traders continued to help buy and sell options on Eurodollars, which are contracts tied to three-month expectations for interest rates, Shore said.

While volume has been down recently, the walk-off cut the number of orders to buy and sell today, Chierici said. “There was a small drop because a lot of the volume is local,” he said.

CME Group has seen demand for Eurodollars, once the largest contract by volume, fall as the Federal Reserve has kept its benchmark interest rate near zero since December 2008. Eurodollar options volume last month averaged 811,000 contracts per day, compared with 1.3 million on average in the same month in 2007, according to CME statements.

Traders Walk Out of CME Eurodollar Pit to Protest Trade​

Traders in the Eurodollar pit on the CME Group trading floor in Chicago.​

 

[Muthukali]

New contract on French debt makes waves in election race

A new contract to cover risk on bonds issued by heavily-indebted France is getting a rough ride in Paris, just a week before the first round of a hotly-contested presidential election.

The launch of futures trading on 10-year French bonds or "obligations assimilables au Tresor" (OAT) has fuelled allegations that speculators will target France, even though the securities might actually help the next president reduce the national debt.

Eurex, a Frankfurt-based derivatives unit of stock market operator Deutsche Boerse, will begin trading Euro-OAT Futures on Monday, adding the instrument to a market which already exists for German and Italian debt.

Leaders of French left and extreme-right parties have attacked the launch, and the head of the French stock market watchdog, Jean-Pierre Jouyet, told AFP the move did not send "a good signal", given that many in France blame the financial sector for much of the stress in the economy.

Socialist front-running presidential candidate Francois Hollande has tapped into a long-standing strand of hostility towards markets, vowing to "dominate" the financial bogeyman as soon as the election is won.

Jouyet acknowledged that the OAT futures, which allow investors to buy or sell French bonds at a pre-determined date -- often three months hence -- and price, "can be considered speculative."

But he also pointed out that OAT futures would be more transparent and better controlled than credit default swaps (CDS), a kind of insurance policy against sovereign defaults which are traded now in more opaque conditions.

French central bank governor Christian Noyer noted Friday that the new instrument, by helping investors hedge against risk on French bonds, will boost the market, and that increased trading "could improve, in the sense of reducing, the issuer's financing costs."

That would be good news for the next French president, since national debt at the end of last year stood at 1.7 trillion euros ($2.2 trillion), or 85.8 percent of the country's output, far above the EU limit of 60 percent.

Noyer dismissed arguments that OAT futures will fuel attacks against France, and pointed out that the first European future contract for public debt was launched about 20 years ago under Socialist president Francois Mitterand.

That instrument was abandoned after the eurozone was created and futures trading based on the 10-year German bond, or Bund, became the norm.

The Bund contract is the so-called benchmark in the eurozone because Berlin can usually borrow money at the lowest interest rates owing to confidence in its economy.

A German financial market source told AFP Friday that it was "absurd" to worry about OAT futures being used for speculation, saying that their trading volume would probably be limited to 5,000 to 10,000 contracts per day.

That compared with one million per day for Bund futures, the source said.

Eurex nonetheless pointed to strong demand for an instrument based on French debt, saying in a statement: "We are responding to the great interest shown among market participants in more customised hedging solutions."

The OAT futures will also provide a yardstick for market sentiment with respect to German and Italian debt, the two biggest eurozone issuers.

French politicians such as Jean-Luc Melenchon of the Left Front, have attacked the contracts as a way for "banksters" to make stacks of money on the backs of French workers.

Marine Le Pen of the far-right National Front called the move a "financial attack" and termed the futures a weapon of "guilded fascism" being wielded by powerful banks.

Investors reply to such criticism by stressing that derivative instruments such as futures are needed by the commodity, industrial and financial sectors to manage risks and note that speculators can suffer losses as well as reap profits.

 

[Muthukali]

Goldman Sachs Said to Raise $2.5 Billion in ICBC Sale

Temasek Holdings Pte (TMSK) is buying part of Goldman Sachs Group Inc. (GS)’s stake in Industrial & Commercial Bank of China (601398) Ltd., adding shares of China’s biggest bank to holdings that include two of the nation’s largest lenders.

The Singapore state-owned investment group said it is buying 3.55 billion shares, or 4 percent of the Hong Kong-traded shares in the world’s biggest bank by market value, to lift its stake. Goldman Sachs is selling $2.5 billion of shares at HK$5.05 each, according to two people with knowledge of the matter. Temasek paid $2.3 billion for the stock, based on the per-share price and stake size.

emasek has been increasing holdings in China Construction Bank Corp. (939) and Bank of China Ltd. (3988) as global banks including Goldman Sachs, Bank of America Corp., and Royal Bank of Scotland Group Plc divested about $24 billion of investments in Chinese lenders since 2009.

“Temasek’s underlying strategy is investing in growth areas like China and key sectors like banks and this is essentially an opportunity that came up,” said Song Seng Wun, a regional economist at CIMB Research Pte in Singapore. “Asia is likely to lead the growth in the near-to-middle term, so all these deals are essentially to anchor that, and banks are basically the lifeline and heart of any economy.”

The price is a 3.1 percent discount from the HK$5.21 close of ICBC shares on April 13. The purchase came as the stock fell 8.4 percent from their Feb. 29 peak this year.
ICBC Shares Decline

ICBC shares dropped 0.8 percent to HK$5.17 at the midday break in Hong Kong, the first decline in three days. The stock trades at 6.4 times estimated earnings, down from a multiple of 9.9 a year earlier, according to data compiled by Bloomberg.

Temasek, which managed S$193 billion ($154 billion) as of March 2011, said in a statement today that the purchase will give it a deemed interest of 5.3 percent in the Hong Kong-listed shares of ICBC, which includes stakes held by its units and associates.

The deal represents about 40 percent of Goldman Sachs’ 8.78 billion shares of ICBC as of Dec. 31, according to data compiled by Bloomberg. The fifth-largest U.S. bank remains ICBC’s second- biggest investor, based on the shareholding data of the bank’s Hong Kong-traded stock.

Goldman Sachs’ stake in Beijing-based ICBC generated a $517 million pretax loss in 2011 compared with a $747 million gain a year earlier, the firm disclosed on Jan. 18. Goldman Sachs, which acquired its ICBC stock in 2006, doesn’t report other stock investments in Asia in its annual filing.
Continuing Trend

Citigroup Inc. (C) last month sold its entire stake in Shanghai Pudong Development Bank Co. nine years after the purchase for an after-tax gain of $349 million.

“You’ll continue to see sales of Chinese bank stocks by these banks,” Sandy Mehta, chief executive officer at Hong Kong-based Value Investment Principals Ltd., said by telephone today. “It’s a continuation of the trend. It’s been happening now for a year.”

Shares of ICBC, the world’s largest lender by market value, have rallied more than 40 percent since hitting a 2 1/2-year low in October as concern that Europe’s debt crisis would lead to a further economic slowdown in China eased. ICBC widened its lead as the world’s most profitable lender last month after reporting a 17 percent increase in fourth-quarter net income.

The sale is the fourth and the biggest by value for New York-based Goldman Sachs. The U.S. securities firm in November raised $1.1 billion selling shares in ICBC at HK$4.88 each.
Chinese Bank Shares

Temasek bought 3.77 billion shares of China Construction Bank from Bank of America on Nov. 11, increasing its stake in the second-largest Chinese lender by value. The investment firm also raised its stake in Bank of China, the nation’s fourth biggest, to 7.07 percent from 6.96 percent after buying 97.1 million shares in August.

Temasek is selling its 67 percent stake in PT Bank Danamon Indonesia to DBS Group Holdings Ltd. (DBS), Southeast Asia’s biggest bank said April 2. The state-owned investment company, which is already the biggest shareholder of DBS, will boost its stake in the lender to 40.4 percent from 29.5 percent after taking $4.9 billion of new stock for the transaction.

The percentage of financial services companies in Temasek’s holdings rose to 36 percent from 35 percent as of March 2011, according to the company.

 

[Muthukali]

U.S. Retail Sales Climb More Than Forecast on Jobs: Economy

Retail sales in the U.S. rose more than forecast in March as Americans snapped up everything from cars and furniture to clothes and electronics.

The 0.8 percent gain was almost three times as large as projected and followed a 1 percent advance in February, Commerce Department figures showed today in Washington. The median forecast of 81 economists surveyed by Bloomberg News called for an increase of 0.3 percent.

An improving job market is giving households confidence to sustain spending in the face of higher gasoline costs, boosting sales at chains such as Gap Inc. (GPS) and Target Corp. (TGT) Strengthening consumer demand raises the odds that the world’s largest economy will weather a recession in Europe and slower growth in China.

Households “have the income to propel their purchases now that we’re seeing job growth,” said Russell Price, senior economist at Ameriprise Financial Inc. in Detroit and the third- best forecaster of retail sales for the 24 months ended in March, according to data compiled by Bloomberg. “They have adjusted to the higher price of fuel. The economy now needs to build on its own momentum.”

Most stocks rose after the biggest weekly drop in the Standard & Poor’s 500 (SPX) Index this year. The S&P 500 fell 0.1 percent to 1,369.57 at the close in New York. The gauge was restrained by a 4.2 percent slump in shares of Apple Inc. (AAPL), which accounts for about 4.4 percent of the S&P 500. About six stocks climbed for every five that fell.

Homebuilder Confidence
Optimism on the economic outlook was tempered by other data today showing that confidence among U.S. homebuilders declined and manufacturing in the New York region expanded in April at the slowest pace in five months.

Elsewhere, asking prices for homes in the U.K. rose to a record in April as a shortage of property boosted values in London, and the Bank of Korea lowered its growth forecast for this year as rising bond yields in Spain highlight the threat to Asian exports from Europe’s debt crisis.

U.S. retail sales were projected to rise 0.3 percent after a 1.1 percent gain previously reported for February, according to the Bloomberg survey. Economists’ estimates ranged from no change to a gain of 0.9 percent.

Eleven of 13 categories showed increases, including electronics, clothing and furniture stores.

Electronics may have gotten a lift from the Apple’s new iPad and some discounts on the older model, economists said. Apple said it sold more than 3 million iPads during the debut weekend for the latest model of the market-leading tablet computer. The tally is a record for opening weekend iPad sales, Cupertino, California-based Apple said in a March 19 statement.

Gap, Target
Store chain data released earlier were in sync with today’s report. Same-store sales for the more than 20 companies tracked by Swampscott, Massachusetts-based Retail Metrics rose 3.9 percent last month, beating the average estimate for a 3.3 percent gain, as many chains offered discounts and shoppers stocked up early on spring gear.

Sales at Gap, the largest U.S. apparel chain, climbed 8 percent. Target, the second-largest U.S. discount chain, and Macy’s Inc., the owner of Bloomingdale’s and namesake stores, each posted 7.3 percent increases. All three companies beat the average analyst projection.

An improving job market is boosting incomes. Even with a less-than-predicted gain in U.S. payrolls last month -- 120,000 compared with a median forecast of 205,000 in a Bloomberg survey -- the economy has added 635,000 jobs since December as unemployment fell to 8.2 percent from 8.5 percent, Labor Department data show.

Stock-market gains are also helping sustain confidence. The S&P 500 jumped 12 percent from January through March, the best first quarter since 1998.

Better Weather
Sales in March may have been helped by better weather as demand at building material stores climbed 3 percent, the most this year. The average temperature was 51.1 degrees Fahrenheit (10.6 degrees Celsius) in March, the warmest on record for the month in the past 117 years, according to the National Oceanic and Atmospheric Administration.

Sales at automobile dealers defied projections of a decrease as purchases rose 0.9 percent last month, today’s report showed. The results are in contrast with industry figures.

Cars and light trucks sold at a 14.3 million annual rate in March, following a 15 million pace the prior month, according to Ward’s Automotive Group. Nonetheless, the March figures capped the strongest quarter in four years.

‘Very Resilient’
“The industry and consumers have been very resilient in the face of higher pump prices,” Don Johnson, vice president of U.S. sales at General Motors Co. (GM), said on a call with analysts this month. “The steadily improving economy is playing a role and so is pent-up demand and an improved credit market.”

Purchases excluding autos increased 0.8 percent, today’s report showed. They were projected to rise 0.6 percent, the survey median showed.

The retail sales data, which aren’t adjusted for prices, may have also reflected higher gasoline receipts at service stations. Filling-station sales increased 1.1 percent. Regular fuel in March averaged $3.84 a gallon, or 28 cents more than in February, according to AAA, the nation’s biggest auto group.

Excluding autos, gasoline and building materials, which are the figures used to calculate gross domestic product, sales climbed 0.4 percent after a 0.5 percent increase in the previous month.

New York Manufacturing
Among other reports in the U.S. today, the Federal Reserve Bank of New York’s general economic index decreased to 6.6 this month, less than the most pessimistic forecast in a Bloomberg survey, from 20.2 in March. Readings greater than zero signal expansion in the so-called Empire State Index, which covers New York, northern New Jersey and southern Connecticut.

The National Association of Home Builders/Wells Fargo index of builder confidence decreased to 25 this month from 28 in March, the Washington-based group said today. Economists projected no change in the index, according to the median forecast in a Bloomberg survey. Readings below 50 mean more respondents said conditions were poor.

 

[Muthukali]

Vietnam banks offer cheaper loans after central bank rate cuts

The State Bank of Vietnam says borrowing costs have started falling after it cut policy rates for the second time in less than one month.

Eximbank has announced a credit fund of VND6 trillion that will be lent to exporters, small and medium companies and low-income homebuyers at 16.5 percent per year, the central bank said in a report on Friday.

State-owned Bank for Investment and Development of Vietnam, also known as BIDV, also cut their lending rates this week by between 1.5 and 2.5 percentage points, bringing rates for exporters to as low as 13.5 percent.

According to the central bank, Hanoi-based Tien Phong Commercial Bank is offering loans to companies performing well at 14 percent.

The State Bank of Vietnam on Wednesday cut the refinancing rate by 1 percentage point to 13 percent, and the discount rate by the same amount to 11 percent. It also lowered the dong deposit cap for terms of one month and above to 12 percent from 13 percent.

The central bank has also lifted restrictions on home loans, aiming to boost the real estate sector and related industries including steel and cement, after bank lending in Vietnam dropped 0.4 percent in the first three months.

Eximbank General Director Truong Van Phuoc said the new lending rate of 16.5 percent just took effect at his bank, so it will take some time to attract borrowers.

“Banks have tried to bring interest rates down, but the problem is not only about the rates – businesses are now facing many difficulties like falling demand and rising stockpiles,” Phuoc told Thanh Nien.

 

[Muthukali]

No final plan for Habubank takeover yet, central bank says

Vietnam’s central bank has not received the final plan for the acquisition of troubled lender Habubank by Saigon-Hanoi Commercial Joint Stock Bank, the government has said in a statement on its website.

State Bank of Vietnam Governor Nguyen Van Binh said the restructuring of local banks needs to happen in several steps, including auditing weak banks, calling for more investment, and then allowing those banks to be acquired by other financial institutions if necessary.

The statement did not say what has been done so far in the case of Habubank. The State Bank of Vietnam late last year launched a plan to restructure the banking sector, pushing for mergers and acquisitions of weak lenders.

News of the Habubank takeover have been reported widely over the local media over the past month, with the bank originally denying being acquired by Saigon-Hanoi Commercial Joint-Stock Bank.

Reuters confirmed the news with a report earlier this month, citing an official of the bank as saying the takeover still requires final approval from the central bank. If the merger takes place, the Habubank brand will cease to exist and its shares will be converted into shares of SHB, or Saigon-Hanoi Commercial Joint Stock Bank, the unidentified official said.

Net profits of Habubank, or Hanoi Building Commercial Joint-Stock Bank, last year fell to VND328.95 billion from VND482.02 billion in 2010, the Thoi Bao Kinh Te Vietnam newspaper reported.

 

[Muthukali]

Stocks, Commodities Gain on Spanish Debt Auction, IMF

Stocks surged and Treasuries fell as Spain sold more debt than targeted and the International Monetary Fund raised economic forecasts, overshadowing declines in U.S. housing starts and factory production. Commodities rose.

The Standard & Poor’s 500 Index added 1.6 percent to close at 1,390.78 at 4 p.m. in New York, its biggest gain in a month, and the Stoxx Europe (SXXP) 600 Index rallied 2 percent for its best advance of 2012. Yields on Spanish 10-year bonds fell 18 basis points to 5.89 percent and the Italian yield lost 12 basis points. Ten-year Treasury yields increased two basis points to 2.00 percent. Canada’s currency strengthened against 15 of 16 major peers as policy makers said they may boost interest rates. Oil helped lead gains in commodities.

The IMF increased its outlook for global growth in 2012 to 3.5 percent from 3.3 percent and lifted its forecast for the U.S. expansion to 2.1 percent from 1.8 percent, easing concern that Europe’s debt crisis will stifle the recovery. Spain sold 12-month and 18-month bills a day after yields on its 10-year bonds reached the highest level this year. German’s ZEW survey of investor confidence unexpectedly rose to a two-year high.

“It’s a collection of things that have ignited investors’ animal spirits again,” Mark Luschini, chief investment strategist for Philadelphia-based Janney Montgomery Scott LLC, which manages about $54 billion, said in a telephone interview. “We’ve had the IMF upgrade of global activity, good news out of Europe and decent earnings reports so far. That’s boosting confidence.”

Apple Rebounds
The S&P 500 (SPX) climbed for the first time in three days, with energy and technology shares leading gains in all 10 of the main industries. The Dow Jones Industrial Average surged 194.13 points, or 1.5 percent, to 13,115.54. Apple Inc. (AAPL) rebounded 5.1 percent as brokerages including Stern Agee & Leach Inc. and Mizuho Securities USA Inc. advised buying the shares after a five-day, 8.8 percent tumble. Coca-Cola Co. (KO) rallied 2.1 percent after profit topped estimates, helped by demand in North America.

International Business Machines Corp. rallied 2.3 percent before releasing earnings after markets closed. Shares of the world’s biggest computer-services provider erased most of the gain in extended trading as first-quarter sales of $24.7 billion missed the average analyst estimate of $24.8 billion. Earnings of $2.78 a share, excluding some items, beat estimates by 4.9 percent and the company increased its full-year forecast.

Also after the close, Intel Corp. (INTC) predicted higher second- quarter sales than some analysts had estimated as it ships new personal-computer and server chips and shortages of hard drives abate.

Goldman Sachs Group Inc. (GS) retreated 0.7 percent after posting revenue from trading bonds, currencies and commodities that lagged behind Citigroup Inc. and JPMorgan Chase & Co.

Economic Data
Stocks rallied even after Federal Reserve data showed production at factories dropped 0.2 percent in March, the first decline in four months, as the industry cooled following the strongest surge in three decades.

A gauge of homebuilders in S&P indexes increased 1.4 percent as MDC Holdings Inc. and PulteGroup Inc. led gains in the group. Commerce Department data showed building permits increased 4.5 percent in March, defying the median economist estimate for a 0.7 percent decrease and overshadowing an unexpected, 5.8 percent drop in housing starts.

The IMF also increased its forecast for global growth in 2013 to 4.1 percent, up from a previous projection of 4 percent.

It raised its 2013 U.S. growth forecast to 2.4 percent.

“You have an improving outlook across the globe because of more positive sentiment,” said Bruce McCain, who helps oversee more than $20 billion as chief investment strategist at the private-banking unit of KeyCorp in Cleveland. “Although some of the economic reports in the U.S. were disappointing, they are in much better shape than they were last year. If you want the glass half full, there’s certainly some potential there.”

European Shares
The Stoxx 600 extended its rebound from four straight weeks of losses. Banco Santander SA, Spain’s biggest lender, and London-based Barclays Plc (BARC) rose more than 3.7 percent to help lead banking shares to the biggest advance among 19 industries. Afren Plc soared 6.3 percent after reporting a “significant” oil discovery in the Kurdistan region of Iraq.

Repsol YPF SA, Spain’s largest oil company, dropped 6.1 percent after the Argentine government took control of one of its units. Argentine President Cristina Fernandez de Kirchner seized control of YPF, replacing Chief Executive Officer Sebastian Eskenazi with Planning Minister Julio De Vido.

Euro, European Bonds
The euro weakened against 12 of 16 major peers, while gaining 0.5 percent against the yen. The shared European currency was little changed versus the dollar at $1.3131. The pound strengthened against 12 of its 16 most-traded peers after U.K. consumer prices rose 3.5 percent in March, the first increase in six months and .

The yield premium investors demand to hold Spanish 10-year government debt instead of benchmark German bunds declined 22 basis points to 414 basis points, or 4.14 percentage points, after yesterday reaching the highest level since November. Spain sold 3.18 billion euros of bills, compared with a maximum target of 3 billion euros.

Germany’s ZEW Center for European Economic Research’s index of investor and analyst expectations, which aims to predict economic developments six months in advance, increased to 23.4 from 22.3 in March. Economists forecast a drop to 19, according to the median of 39 estimates in a Bloomberg survey.

Japan said it will provide $60 billion to the International Monetary Fund’s effort to expand its resources and shield the global economy against any deepening of Europe’s debt crisis. Finance Minister Jun Azumi made the commitment while speaking to reporters in Tokyo today before semiannual meetings of the IMF and World Bank in Washington April 20-22.

Canadian Dollar
Canada’s dollar rallied 0.9 percent to $1.0099 after Bank of Canada policy makers said higher borrowing costs “may become appropriate” because economic growth and inflation will be faster than it forecast. The central bank kept its main interest rate at 1 percent, extending the longest pause since the 1950s, as predicted by all 25 economists in a Bloomberg survey.

The S&P GSCI index of raw materials rose 0.5 percent, halting a two-day drop, as cocoa, nickel and oil led an advance in 17 of 24 commodities. Oil climbed 1.2 percent to $104.20 a barrel, a two-week high.

The MSCI Emerging Markets (MXEF) was little changed as rallies of more than 1 percent in benchmark gauges for Brazil, Israel Hungary were tempered by declines in Asia. Taiwan’s TAIEX dropped 1.9 percent. China’s inbound investment fell for a fifth month, the government said. The Shanghai Composite Index fell 0.9 percent.

The Sensex (SENSEX) index of Indian shares rose 1.2 percent on a higher-than-forecast benchmark interest rate cut. The Reserve Bank of India cut the repurchase rate by 0.5 percentage points to 8 percent, as predicted by three of 25 economists in a Bloomberg survey.

 

[Muthukali]

SET to launch index ETFs

The Stock Exchange of Thailand will launch foreign index exchange-traded funds in the second half of the year.

Exchange-traded funds (ETFs) based on Hong Kong's Hang Seng index or Korea's Kospi index are among the stronger candidates for the launch, according to Kesara Manchusree, the SET's group head for products and business development.

An ETF is a fund that invests in assets such as stocks or a basket of stocks such as a market index or sector index. Units are traded on the exchange real-time similar to equities.

The SET currently has a number of ETFs listed on the exchange, including funds tracking the SET50 index and the SET energy index and various gold indices. Krungthai Asset Management in 2010 launched the first foreign index ETF with the WISE KTAM CSI 300 China Tracker, investing in the Chinese stock exchange.

"These new products will help Thai investors diversify their investment to foreign asset classes," Mrs Kesara said.

Authorities also are pressing for fund managers to develop bond ETFs to help give retail investors an alternative investment into fixed-income securities.

Mrs Kesara, also the managing director of the Thailand Futures Exchange, said the derivatives exchange this year also planned to increase flexibility in products such as SET50 futures and options to better meet investor needs.

 

[Muthukali]

Stocks Fall as Intel, IBM Slump; Treasuries Advance

Stocks dropped, paring gains from the biggest European rally since December, as Intel (INTC) Corp. and International Business Machines Corp. (IBM) disappointed investors with their quarterly results and bad loans surged in Spain. Treasuries rose, and oil fell.

The Standard & Poor’s 500 Index (SPX) slipped 0.4 percent to 1,385.14 at 4 p.m. New York time while the Dow Jones Industrial Average retreated 82.79 points to 13,032.75 as Intel lost 1.8 percent and IBM fell 3.5 percent. The S&P 500 trimmed its loss from 0.5 percent as consumer stocks rallied. The Stoxx Europe 600 Index declined 0.7 percent after adding 2 percent yesterday. Yields on 10-year Treasuries fell two basis points to 1.98 percent. Crude lost 1.5 percent.

Intel and IBM, two of the computer industry’s bellwethers, posted the slowest sales growth in years as a European slump weighed on orders last quarter. Better-than-estimated corporate earnings have helped fuel the S&P 500’s rally since March 2009. While profit growth will accelerate to 8.6 percent for all of 2012, income gained 1.7 percent during the first quarter, according to analyst estimates compiled by Bloomberg.

“We got used to companies beating estimates by a pretty good margin,” Burt White, who oversees $390 billion as chief investment officer at LPL Financial Corp. in Boston, said in a telephone interview. “While earnings estimates have come down, the whisper number hasn’t. Companies have a lofty target to beat. That’s why when you see results like Intel and IBM’s, it illustrates that the market does have higher expectations than what consensus is.”

IMF Forecast
Global stocks rose yesterday, giving the S&P 500 its biggest advance in a month, after higher forecasts from the International Monetary Fund and gains in Spanish bonds outweighed declines in U.S. housing starts and factory production. Yesterday’s 1.6 percent increase for the S&P 500 extended its 2012 rally to 11 percent as investors bought stocks amid better-than-estimated economic and corporate data.

Intel slid today as the world’s largest semiconductor maker forecast a second-quarter gross margin that was lower than some analysts predicted. IBM fell after the biggest computer-services provider had revenue that trailed estimates. Yahoo! Inc. (YHOO) gained 3.2 percent after reporting first-quarter sales that topped estimates.

Qualcomm Inc., among companies that report results today after U.S. exchanges close, slipped 0.4 percent.

Genworth Financial Inc. (GNW) sank 24 percent for the largest slump since August as the life insurer and mortgage guarantor postponed plans for a public offering of its Australian unit backing home loans after “elevated” losses in the nation.

Spanish Loans
Spanish bonds pared gains, pushing yields on 10-year debt to 5.82 percent from 5.72 percent earlier today. The nation’s non-performing loans as a proportion of total lending jumped to 8.16 percent in February, the highest level since 1994, from less than 1 percent in 2007, the Bank of Spain said today. The ratio rose from 7.91 percent in January as 3.8 billion euros ($5 billion) of loans soured.

The pound jumped 0.6 percent against the dollar after Bank of England policy makers said inflation may be higher than forecast. The yield on the 10-year gilt climbed four basis points to 2.13 percent. The two-year note yield rose as high as 0.49 percent, a level last seen on March 21.

The yen slid 0.5 percent against the dollar and declined 0.4 percent versus the euro. The Swedish krona strengthened against 15 of 16 major peers after the nation’s central bank kept its main rate unchanged amid signs the largest Nordic economy will avoid a recession.

Oil Inventories
Crude fell for the first time in three days, losing 1.5 percent to $102.67 a barrel, after the U.S. Energy Department said oil inventories rose 3.86 million barrels last week, more than double the increase forecast in a Bloomberg survey of analysts. Natural gas futures jumped 0.8 percent, rebounding from a 10-year low, ahead of a report on stockpiles tomorrow.

Gold futures dropped 0.7 percent, declining for the second time in three days, as the dollar’s advance curbed demand for the precious metal as an alternative asset.

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[Muthukali]

Vietnam bonds yields reach 17-month low on rates; dong weakens

Vietnam’s five-year bonds rose, pushing the yield to a 17-month low, on speculation slowing inflation will prompt the central bank to reduce borrowing costs. The dong fell by the most in a month.

The monetary authority cut its repurchase rate to 12 percent from 13 percent on April 11 and trimmed its refinancing and discount rates by a percentage point each. Inflation eased to a one-year low of 14.15 percent in March, government data show.

Slowing consumer-price gains may allow the nation to cut borrowing costs by 100 basis points in each of the second, third and fourth quarters, central bank Governor Nguyen Van Binh said last month.

“Yields are dropping because consumer prices are expected to increase by as little as 0.1 percent this month” from March, said Cao Tan Phat, Ho Chi Minh City-based analyst at ACB Securities Co. Prices rose 0.2 percent last month from February.

The yield on five-year bonds on Wednesday fell three basis points, or 0.03 percentage point, to 11.06 percent, according to a daily fixing from banks compiled by Bloomberg. That was the lowest level since Nov. 10, 2010.

The dong weakened 0.6 percent to 20,840 per dollar as of 3:03 p.m. on Wednesday in Hanoi, according to data compiled by Bloomberg. The central bank set the currency’s reference rate at 20,828, unchanged since Dec. 26, its website showed. The currency is allowed to trade as much as 1 percent on either side of the official fixing.

 

[Muthukali]

SET rises 17.29 points - Thailand

The Stock Exchange of Thailand main index went up 17.29 points or 1.48% to close at 1,185.34 points at the end of trading session on Thursday afternoon. The trade value was 30.34 billion baht, with 2.83 billion shares traded.

The SET50 index ended at 832.66 points, up 13.79 points or 1.68%, with a total trade value of 21.86 billion baht.

The SET100 index rose 29.14 points or 1.64% to stand at 1,808.95 points, with a total turnover of 24.43 billion baht.

The SETHD index went up 18.02 points or 1.62% to stand at 1,127.65 points, with total trade value of 6.78 billion baht.

The MAI index gained 2.76 points or 0.95% to close at 294.46 points, with total transaction value of 909.92 million baht.

Top five most active values were as follows;

KBANK - stood at 158.00 baht, up 7.00 baht (4.64%)
BBL (XD) - stood at 192.00 baht, up 3.00 baht (1.59%)
SCB (XD) - stood at 147.00 baht, up 6.50 baht (4.63%)
PTT - stood at 351.00 baht, up 8.00 baht (2.33%)
BANPU (XD) - stood at 556.00 baht, unchanged

 

[Muthukali]

SET headed for B10 trillion

The Stock Exchange of Thailand's (SET) market capitalisation may hit 10 trillion baht if the global economic situation does not deteriorate, said chief strategy officer Veerathai Santiprabhob.

The market capitalisation of the SET reached an all-time high as of the end of March, climbing to 9.86 trillion baht, up by 17.20% from the end of 2011.

The Market for Alternative Investment (MAI) was also at a record. Its market cap was 93.07 billion baht, up 20.38% from the end of last year.

The SET Index finished March at 1,196.77 points, its highest level in 16 years, up 16.72% from the end of 2011. Average trading through March was 31.252 billion baht.

The dividend return for the SET was 3.63%, the second highest in the region behind South Korea.

Mr Veerathai said the market cap of the SET has the potential to rise to 10 trillion baht, supported by the strong earnings growth of local listed companies and by foreign capital inflows.

The capacity utilisation at most listed companies has returned to pre-flood levels. Electronics and hard-disk drive manufacturers have not yet fully recovered but are expected to by August.

"The global and local capital markets have benefited from the monetary policies of central banks around the world. Global interest rates are expected to remain at low levels _ US rates will remain near zero until 2014, and India has just cut rates. With all the liquidity, Asian capital markets are expected to benefit from capital inflows," he said.

He listed risks as potential economic problems in China and the situation in the Middle East, which may put pressure on oil prices and cause higher inflation.

During the first quarter, foreign investors were net buyers of 83.135 billion baht worth of shares.

The market cap of initial public offerings, included property funds, was 22.77 billion baht, better than expectations. The full-year target is 120 billion baht.

Total fund raising by listed companies during first quarter was 33.68 billion baht, almost half the 75 billion baht annual target.

 

[Muthukali]

Stocks Fall on Economic Data as French, Spain Bonds Drop

U.S. stocks fell for a second day as data on manufacturing, home sales and jobless claims tempered optimism in the economy, overshadowing improving earnings. Spanish and French bonds slid; Treasuries and commodities rose.

The Standard & Poor’s 500 Index slipped 0.6 percent to close at 1,376.92 at 4 p.m. in New York after rising as much as 0.4 percent. The Stoxx Europe 600 Index (SXXP) fell 0.5 percent, erasing an earlier 1 percent rally. The S&P GSCI gauge of commodities rose 0.2 percent as crops led gains. Ten-year Treasury yields lost one basis point to 1.97 percent as rates on French and Spanish 10-year bonds climbed at least eight basis points, reviving concern about Europe’s debt crisis.

U.S. reports today showed existing-home sales unexpectedly fell 2.6 percent, the Federal Reserve Bank of Philadelphia’s manufacturing index trailed estimates and jobless claims exceeded projections. Morgan Stanley (MS) and Bank of America Corp. reported earnings were boosted by higher trading revenue, while Ebay Inc. surged as its PayPal payments service fueled profit growth.

“You’ve got a lot of counter-balancing points,” Philip Orlando, the New York-based chief equity strategist at Federated Investors Inc., which oversees about $370 billion, said in a phone interview. “The jobless claims number was disappointing, while corporate earnings have been coming in stronger than expected,” he said. “Investors are looking at each incremental data point trying to draw conclusions.”

Market Leaders
Technology, industrial and consumer-discretionary stocks helped led losses in the 10 main S&P 500 industry groups, while telephone companies posted the biggest gains. DuPont Co. lost 1.2 percent to help lead declines in the Dow Jones Industrial Average after the chemical company said quarterly sales volumes fell 2 percent, led by declines in the electronics unit and in the Asia-Pacific region.

Financial shares in the S&P 500 slipped 0.4 percent as a group. Wall Street banks will have two years to implement the so-called Volcker rule so long as they make a “good faith” effort to comply with the ban on proprietary trading, U.S. regulators said. Banks will have the “full two-year period” provided by the Dodd-Frank financial overhaul law to “fully conform” their activities and investments, the Federal Reserve and four other U.S. agencies said in a statement today.

The Philadelphia Fed’s general economic index decreased to 8.5 in April, the lowest level since January and less than the median forecast of economists for a reading of 12. The Labor Department reported initial jobless claims of 386,000 last week, topping the median estimate of 370,000.

Verizon, Apple
Verizon Communications Inc. climbed 1.3 percent as smartphone demand boosted subscriber count, while Apple Inc. lost 3.4 percent and was the biggest drag on the S&P 500 after Verizon said iPhone sales slowed. Qualcomm Inc. (QCOM), the biggest maker of mobile-phone semiconductors, declined 6.6 percent as its third-quarter forecasts fell short of some projections on increased spending to bolster chip output.

Ebay surged 13 percent, the biggest gain in almost seven years. Travelers Cos. jumped 3.8 percent as the insurer’s profit beat estimates and the company boosted its dividend by 12 percent.

Profits for S&P 500 companies probably rose 1.7 percent in the first quarter and 2 percent in the following period, according to analysts’ estimates compiled by Bloomberg.

Commodities Gain
Corn rallied 3 percent on signs of rising demand for supplies from the U.S. and wheat climbed more than 2 percent to lead gains in 17 of 24 commodities tracked by the S&P GSCI Index, which climbed 0.2 percent. Oil slipped 0.4 percent to $102.27 a barrel.

Among European stocks, Publicis Groupe SA dropped 4.1 percent as France’s largest advertising company said growth will slow this quarter. SKF AB, the world’s biggest maker of ball bearings, rose 4.9 percent after forecasting higher sales in the U.S. and Asia.

Spain’s 10-year bond yield increased 10 basis points, or 0.10 percentage point, to 5.93 percent and France’s yield added eight basis points to 3.10 percent. The French rate increased to 141 basis points above yields on benchmark German bunds, the highest level since January.

Spain sold 2.54 billion euros ($3.3 billion) of two-year and 10-year debt today, compared with a maximum target of 2.5 billion euros, and France auctioned 8 billion euros.

Spain sold the 10-year benchmark bonds at an average yield of 5.743 percent, compared with 5.789 percent on the secondary market before the auction, and 5.403 percent when it last sold the debt in January. It auctioned two-year securities at 3.463 percent. France issued 2.7 billion euros of benchmark five-year securities at an average yield of 1.83 percent, up from 1.78 percent on March 15.

French Credit Risk
French credit risk climbed to the highest in three months on concern anti-business policies will be adopted after the presidential election as Europe’s debt crisis deepens. The cost of insuring the nation’s sovereign debt rose one basis point to 201 basis points, according to CMA .

Credit-rating companies will probably downgrade France over the next two to three years regardless of whether President Nicolas Sarkozy or his Socialist challenger, Francois Hollande, wins the election, Citigroup Inc. economist Michael Saunders wrote in a client note today. The nation may be cut one level by both S&P and Moody’s Investors Service, he wrote. Italy, Spain, Ireland and Portugal also face potential downgrades, he wrote.

IMF Resources
Christine Lagarde, managing director of the International Monetary Fund, says she hopes to raise more than $320 billion in additional lending resources. That figure is not the “final ask,” she said in a Bloomberg Television interview today, adding that she expects countries to announce additional contributions.

In Asia, Hong Kong’s Hang Seng Index (HSI) advanced 1 percent. China will boost liquidity by cutting reserve requirement ratios if necessary, Xinhua News Agency said, citing an unidentified central bank official. The nation may also increase open market operations including reverse repurchase agreements and redemption of central bank bills, the report said.

The yen weakened against all 16 major peers as Bank of Japan Governor Masaaki Shirakawa pledged to continue monetary easing. Growth in developed economies remains “anemic,” Shirakawa said yesterday in New York. The dollar climbed against nine of 16 major peers.

The MSCI Emerging Markets was little changed. Russia’s Micex Index gained 1.9 percent as steelmaker OAO Severstal jumped 5.7 percent after fourth-quarter profit beat estimates.

 

[Muthukali]

Goldman Sachs facing a new insider trading probe

NEW YORK (Reuters) - Federal prosecutors in California are investigating a Goldman Sachs employee for insider trading, according to prosecutors and defense lawyers who attended a hearing in U.S. federal court in New York on Thursday.

The employee is suspected of giving inside information on two public companies to former Galleon Group co-founder Raj Rajaratnam, who was convicted last year in one of the largest insider trading cases in Wall Street history.

The investigation of the Goldman employee was divulged during a hearing involving the insider trading case against former Goldman board member Rajat Gupta.

Gary Naftalis, the lawyer for Gupta, commenting on the newly disclosed investigation, said that Assistant US Attorney Reed Brodsky asked him not divulge details of the matter.

"Per Mr. Brodsky's request, I am not going to name his name," Naftalis said.

In a hearing a month ago, Naftalis revealed that another Goldman Sachs employee had been caught on a wiretap leaking secrets about Intel Corp (INTC.O) and Apple Inc (AAPL.O).

"That's obviously an area we have been pursuing in terms of our preparation for our defense at trial in terms of his connection to all this," Naftalis said at Thursday's hearing.

A spokesman for the U.S. Attorney's Office for the Central District of California declined to comment.

The attorneys at the Thursday court hearing said the employee in the California investigation still works at Goldman.

A spokesman for Goldman Sachs declined to comment.

GOLDMAN CONNECTION UNCLEAR
Despite Naftalis' statement, there is no apparent connection between the investigation in California and the Gupta case brought by federal prosecutors in New York. In fact, Naftalis admitted that Brodsky, the New York prosecutor, had only learned of the investigation himself on Wednesday evening.

However, it is not the first time Goldman's name has arisen in the Gupta matter.

A person familiar with the Gupta case said in early March that prosecutors are investigating David Loeb, a managing director of Goldman Sachs. Loeb works with technology hedge-fund employees, including an Asia-based analyst, Henry King, who is also under investigation, according to another source briefed on the case.

The sources declined to be identified because the matter is not public. Neither Loeb nor King has been accused of any wrongdoing and neither responded to emails asking for comment.

The insider-trading case has drawn in Goldman Sachs Chief Executive Officer Lloyd Blankfein, who was interviewed under oath on February 24 as a witness, according to court documents.

Blankfein testified for the government at Rajaratnam's trial. He is also expected to be called as a witness by the government at Gupta's trial.

MORE EVIDENCE IN GUPTA TRIAL
Gupta, a former director of Goldman Sachs Group Inc (GS.N) and Procter & Gamble Co (PG.N), was charged with illegally tipping his former friend Rajaratnam.

Gupta was indicted in October. He is the highest-ranking executive charged in a broad U.S. crackdown on insider trading at hedge funds and faces five counts of securities fraud and one count of conspiracy.

The focus of Thursday's hearing was on the nature of the allegations against Gupta. Brodsky wanted to amend the charges to include another insider tip Gupta is alleged to have given to Rajaratnam on Proctor and Gamble's organic growth forecast for the fourth quarter of 2008.

He also wanted to broaden the description of the information about Goldman Sachs that Gupta is accused of passing to Rajaratnam in late 2008.

During the height of the financial crisis, just after Goldman converted itself into a bank holding company, prosecutors allege Gupta told Rajaratnam about Goldman's plans to raise more capital. Brodsky wanted to expand the description of the information to include not just Goldman's capital raising plans, but the status of its business in general.

Judge Jed Rakoff ruled the new Proctor and Gamble tip could be included, but the wording about the Goldman tip could not be changed.

Brodsky warned the judge that his team might need to add another round of new information to the charges after interviewing another witness on Monday.

Gupta's trial is scheduled to begin on May 21.

 

[Muthukali]

Gold prices for Tuesday - Thailand

The Gold Traders Association this morning set the buying price at 23,649.60 baht per baht-weight for gold ornaments and 24,000 baht per baht-weight for gold bar.

The selling prices were set at 24,500 baht per baht-weight for gold ornaments, and 24,100 baht per baht-weight for gold bar.