Latest News In Stock Market Investement Research – March 06, 2009

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Goldman Sachs cuts Inditex to buy from conviction buy

6 Mar 2009 at 1:40am

MADRID (MarketWatch) — Goldman Sachs on Friday lowered its rating on Spanish retailer Inditex SA to buy from conviction buy, owing to worries over growth forecasts, according to a note to investors. The investment bank cited a Bloomberg report from Thursday suggesting that local brokers had been advised that Inditex’s earnings consensus forecasts are too high. That report quoted an estimate of 2.15 billion euros ($2.73 billion) for fiscal year 2009 estimates for earnings before interest, taxes, depreciation and amortization, which Goldman said is still 2% below their current forecasts. The investment bank said if those reports are right, that implies an 8% miss in fourth quarter 2009 earnings. Goldman still believes Inditex’s balance sheet is strong and its store roll-out program will differentiate the company in the current enviornment, but said worries over growth will be concerning to the market in the near term. They retain a buy rating and a 12-month price target of 34.9 euros, based on a blend of cash returns and 20% trough multiples. A material deceleration in like-for-like sales growth is the key risk to their price target.

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Lloyds shares gain on hopes of government insurance deal

6 Mar 2009 at 1:23am

LONDON (MarketWatch) — Shares in Lloyds Banking Group rose around 8% in early London trading after the BBC reported late Thursday that the bank is close to a deal with the U.K. government to insure around 250 billion pounds ($353 billion) of its assets. The BBC said the deal could increase the government stake in the bank above its current level of 43% and that the final details haven’t yet been agreed. The deal would involve Lloyds issuing new non-voting shares and possibly swapping some of the government’s existing preference shares for ordinary shares. The report added that rumors that a deal could be announced on Friday were being played down.

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European shares edge lower ahead of U.S. jobs data

6 Mar 2009 at 1:07am

LONDON (MarketWatch) — European shares edged lower on Friday morning ahead of some key data on U.S. jobs due later in the day. Drug firms gave back some gains made in the previous session, with AstraZeneca down 1.2%, while oil majors also traded lower. Of companies updating investors, Wolseley shares fell 8% after it said that it will ask shareholders for cash. Lloyds Banking Group climbed 6.7%. Late Thursday, the BBC reported that the lender is close to agreeing an asset insurance deal with the U.K. government. The U.K. FTSE 100 index fell 0.2% to 3,524.61, the German DAX 30 index traded flat at 3,696.05 and the French CAC-40 index declined 0.2% to 2,563.78.

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Wolseley to raise $1.4 billion through share sale

6 Mar 2009 at 12:51am

LONDON (MarketWatch) — U.K. construction materials firm Wolseley said Friday that it will raise around 1 billion pounds ($1.41 billion) through a rights issue and the sale of shares to institutional investors as it also said it swung to a 6-month net loss of 777 million pounds, from a profit of 65 million pounds a year earlier. The group said trading has weakened further in recent months, especially in the U.S. and the board has decided it is appropriate to recapitalize the group. The group has also arranged a new 1 billion euro ($1.25 billion) multi-currency debt facility from Aug. 1, 2011, conditional upon completion of the rights issue. Among other steps the group will take is the exit of the U.S. building materials business and a strategic review of its business in Central and Eastern Europe.

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Fortis says banking operations losses totaled EUR6 bln in Q4

6 Mar 2009 at 12:44am

LONDON (MarketWatch) — Fortis said that Fortis Bank took an additional non-cash loss of 1 billion euros in the fourth quarter of 2008, bringing the total loss for the quarter to 6 billion euros. The additional loss was due to partial impairments of deferred tax assets. The bank’s solvency ratio at the end of 2008 stood at approximately 10%.

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Veolia profit drops 56%, group plans disposals, cost savings

6 Mar 2009 at 12:28am

LONDON (MarketWatch) — Veolia Environnement said Friday that its 2008 net profit fell 56% to 405.1 million euros ($507.8 million), while revenue grew 13% to 36.21 billion euros. The group said the drop in profit was partly due to a 430 million euros goodwill impairment in its German waste management division. Analysts were expecting a net profit of 689 million euros, according to a Dow Jones Newswires poll. The group said it would leave its dividend unchanged at 1.21 euros a share and added its main objective in 2009 is to generate positive free cash flow. Measure being taken in 2009 include a reduction in net investments of at least 1.6 billion, at least 1 billion euros of disposals and the reduction of costs by 280 million euros. Asset disposal from 2009 to 2011 will total around 3 billion euros, Veolia added.

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WPP posts virtually flat net income for 2008

6 Mar 2009 at 12:17am

LONDON (MarketWatch) — Advertising giant WPP Friday posted virtually flat net income for 2008, of 513.9 million pounds compared to 515.1 million pounds recorded in 2007. WPP said that its 2008 results reflect incremental goodwill impairment, amortisation of intangibles and investment write-downs. Revenue rose 20.9% to 7.5 billion pounds, after billings increased 16.6% to 36.9 billion pounds. WPP expects comparable revenue to fall 2% in 2009 and global advertising spending to fall by 4%, compared to 2% growth in 2008. The first half is budgeted to be weaker than the annual average, with a relative improvement in the second half, partly due to weaker comparatives in the second half of 2008.

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Satyam shares up 16%; regulator OKs 51% stake sale plan

6 Mar 2009 at 12:05am

HONG KONG (MarketWatch) — Shares of Satyam Computer Services jumped 16% in Mumbai afternoon trading Friday after India’s stock market regulator gave its approval for the scandal-tainted company to sell a majority 51% stake. Satyam, where India’s largest corporate fraud came to light earlier this year, said the Securities & Exchange Board of India will allow the company to sell a 31% stake to an investor, selected through a global competitive bidding process, by issuing new shares. The investor can then increase the stake to 51% by making a mandatory open offer for 20% public shareholding. Satyam plans to invite expressions of interest from qualified investors, who have net assets in excess of $150 million.

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Japan’s exports down 46.5% in February, early data shows

5 Mar 2009 at 10:35pm

HONG KONG (MarketWatch) — Japan’s exports declined 46.5% in the first 20 days of February versus the same period last year, according to provisional data released Friday by the Ministry of Finance. Exports shrank to 2.4 trillion yen ($24.35 billion) from 4.47 trillion yen a year earlier. The collapse in exports led to a trade deficit of 130.96 billion yen during the period, compared to a 413.31 billion yen surplus a year earlier. Imports for the 20-day period were down 37.8%.

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BEA’s CFO, executive director to step down: reports

5 Mar 2009 at 9:11pm

HONG KONG (MarketWatch) — Hong Kong-listed Bank of East Asia will see two of its top executives step down, according to press reports. Chief Financial Officer Daniel Wan and Executive Director Raymond Yu will both leave the bank. No reasons were cited for the departures. Local media also reported that the two sons of BEA Chairman and Chief Executive David Li will become deputy chief executives. David Li is a former board member of Dow Jones & Company and paid an $8 million civil fine to the Securities and Exchange Commission in February last year. Li made headlines that year in connection with sharing information on News Corp.’s buyout offer for Dow Jones before news of the deal was made public.

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Three Japanese regional banks to seek government aid: Nikkei

5 Mar 2009 at 7:47pm

HONG KONG (MarketWatch) — Three Japanese regional banks will apply for government aid as early as next week, according to a Japanese media report. Financial institutions seeking the funding are Sapporo Hokuyo Holdings Inc. Minami-Nippon Bank and Fukuho Bank, the Nikkei newspaper reported in its Friday morning edition, without citing its source. No details were provided on the size of the aid packages sought. The banks will seek help from the Financial Services Agency, which will evaluate recovery proposals put forward by the bank as well how likely they are to repay the loans.

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Banks, shipping stocks join autos in Asia markets’ slide

5 Mar 2009 at 5:34pm

HONG KONG (MarketWatch) — Asian markets tumbled Friday after major U.S. stock indexes lost more than than 4%, with regional banks like Sumitomo Trust & Banking Co. and KB Financial Group hurt on a deteriorating outlook for the global financial sector. General Motors’ warning of possible bankruptcy dragged on regional automakers, while shipping-related stocks tumbled on concerns about the broader world economy. The Nikkei 225 Average fell 3% to 7,208.23 and the broader Topix lost 2.3% to 724.30. South Korea’s Kospi gave up 1.6% to 1,041.74 and Australia’s S&P/ASX 200 shed 1.5% to 3,141.50.

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BorgWarner suspends quarterly dividend

5 Mar 2009 at 4:39pm

SAN FRANCISCO (MarketWatch) — BorgWarner Inc. said late Thursday it will temporarily suspend the company’s quarterly dividend of 12 cents until global economic conditions improve. “We intend to reinstate our dividend as soon as the automotive industry returns to a normalized level of activity,” said Timothy Manganello, chairman and chief executive of the company.

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House approves bill to let judges modify loans

5 Mar 2009 at 4:19pm

WASHINGTON (MarketWatch) – With the support of a group of centrist Democratic lawmakers, the House voted on Thursday to approve a housing bill that would allow bankruptcy judges the ability to modify some mortgage debt for troubled homeowners. The legislation, Helping Families Save Their Homes Act of 2009, was approved in the House, 234- 191. Based on an agreement with Citigroup, the measure only gives bankruptcy judges the authority to modify mortgages that were set up prior to the enactment of the bill. The legislation also includes a provision giving home loan servicers legal protection if they modify mortgages. Loan servicers have been apprehensive about agreeing to modify mortgages because of the possibility that mortgage investors would file lawsuits against them for violating contracts.

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Fitch places Legg Mason’s default rating on Negative Watch

5 Mar 2009 at 2:57pm

SAN FRANCISCO (MarketWatch) — Fitch Ratings on Thursday placed Legg Mason’s issuer default rating and senior debt rating of A- on Rating Watch Negative following the company’s announcement of the sale of its structured investment vehicle obligations held on its balance sheet or by its sponsored money market funds. “The Negative Watch reflects the earnings and business pressures on the company from current financial market turmoil as well as the reduction in cash available to Legg Mason to deal with near-term obligations and contingencies,” Fitch said in a statement.

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March 06 2009 01:23 am | Stock Market News

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