Latest News In Stock Market Investment Research – March 12, 2010

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SouthGobi says conversion will give CIC 13% stake

12 Mar 2010 at 2:19am

HONG KONG (MarketWatch) — SouthGobi Energy Resources Ltd. said Friday that China Investment Corp., the country’s sovereign wealth fund, plans to convert $250 million worth of its convertible bonds into common shares, equivalent to a 13% stake in the company. SouthGobi, a coal miner whose operations are based in Mongolia, said in a filing to the Hong Kong Stock Exchange Friday the conversion represents about half the convertible debt held by CIC. Shares of SouthGobi ended 0.9% lower in Hong Kong following the midday announcement.

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Report: Exxon could scuttle part of Devon-BP deal

12 Mar 2010 at 2:16am

LONDON (MarketWatch) — Part of the $7 billion deal between BP and Devon Energy could be scuttled by rivals should they want to exercise pre-emption rights over Azerbaijan assets worth an estimated $3 billion, The Times of London reported. Exxon Mobil , Chevron , StatoilHydro and Hess have preemption rights over the sale of Devon’s stake in the Azeri-Chirag-Gunashli project, and they could sell the stake to a third party like Sinopec or CNOOC, the report said.

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IEA raises forecast for 2010 global oil demand

12 Mar 2010 at 2:00am

FRANKFURT (MarketWatch) — The International Energy Agency revised up by 70,000 barrels a day its forecast for global oil demand for both 2009 and 2010, citing higher-than-expected non-OECD data, which largely offset persistently weak OECD readings. Global oil demand is expected to rise by 1.6 million barrels a day, or 1.8% year-on-year, to 86.6 million barrels a day in 2010. In contrast, demand is estimated to have contracted by 1.2 million barrels a day, or 1.4% year-on-year, to 85.0 million barrels a day in 2009. After five consecutive quarters of decline, global oil demand began growing again on a yearly basis in the fourth quarter of 2009, the Paris-based IEA said in its monthly report. Growth has been led by liquefied petroleum gas and naphtha on the back of restocking in the petrochemical sector, the IEA said. In recent days, the Organization of Petroleum Exporting Countries and the U.S. Energy Information Administration have also raised their forecasts for global oil consumption this year. Crude oil for April delivery rose 14 cents to $82.25 a barrel in electronic trading on Globex.

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Deutsche Post raised to buy at UniCredit

12 Mar 2010 at 1:35am

FRANKFURT (MarketWatch) — Deutsche Post AG , a German-based mail and logistics provider, was upgraded to buy from hold on Friday at UniCredit, which also increased its target price to 16 euros a share from 12 euros a share. “With the sale of Postbank, the restructuring of the U.S. Express business and the divestment of parts of the long underperforming subsegments in Great Britain and France, the management has built up a good track record in streamlining and optimizing the business structure,” UniCredit said in a note to clients. The broker also said it has a positive view of the mid- and long-term strategy of the CFO to lower the cost of capital and to increase the transparency of the financing structure.

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ING starts coverage of H&M at buy, Inditex at hold

12 Mar 2010 at 1:34am

MADRID (MarketWatch) — Coverage of Swedish retailer Hennes & Mauritz was initiated with a buy rating, while Spanish retailer Inditex with a hold rating on Friday at ING, which said both companies have high margins and impressive longer-term growth potential. ING said it prefers H&M, which it initiated with a SKr515 target price, for its global sourcing model that provides a competitive edge, with an impressive long-term growth story. Company guidance for a 10% to 15% increase in store numbers per annum also looks highly sustainable, the investment bank said. ING said Inditex, which it initiated with a 48 euro price target, is highly cash generative, but shares are already priced for superior performance. The fact that 34% of Inditex’s group revenues still originate from Spain is “unhelpful,” said ING.

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Russia’s Surgutneftegaz downgraded to underweight

12 Mar 2010 at 1:20am

FRANKFURT (MarketWatch) — Russian oil firm Surgutneftegaz was downgraded to underweight from equal-weight on Friday at Morgan Stanley. Relative to other Russian oil stocks, Surgutneftegaz lacks major operational advantages and its valuation is unattractive. Despite its East Siberian projects, production is declining at about 2-3% per year and the timing of the refining upgrade completion is uncertain, the broker said. “We expect the shares to continue to trade sideways and see better value elsewhere in the sector, such as Rosneft,” Morgan Stanley said.

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European shares edge higher in early trading

12 Mar 2010 at 1:06am

LONDON (MarketWatch) — European shares edged higher on Friday, with exporting auto and chemical firms leading the way following gains for French carmaker Renault , up 1.2%, and German fertilizer firm K+S , up 2.3%. Overall the U.K. FTSE 100 index rose 0.2% to 5,627.53, the German DAX index advanced 0.2% to 5,942.93 and the French CAC-40 index edged up 0.1% ti 3,931.99.

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Eni sees average output growth of 2.5% in 2010-13

12 Mar 2010 at 1:05am

MADRID (MarketWatch) — Italian oil company Eni said it expects average annual production growth of 2.5% for the years 2010-2013, in its strategic plan announced Friday. The growth strategy is based on organic development, and beyond the four year plan, it expects to maintain “robust” production growth with an average annual rate of more than 2% up to 2016. Assuming a $65 per barrel price scenario, in 2010, hydrocarbon production for Eni will be in line with 2009, and will exceed 2 million barrels of oil a day in 2013. In the next four years, Eni said it will take on stream 41 new fields, resulting in 560,000 boe/day of new production in 2013, 75% of which will be operated by Eni. Eni’s gas and power division will achieve pro-forma adjusted earnings before interest, taxes, depreciation and amortization of 4.4 billion euros ($6.03 billion) per annum. For 2010-2013, Eni plans investments of 52.8 billion euros, an increase of approximately 8% versus the 2009-2012 plan.

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Volvo raised to overweight at J.P. Morgan

12 Mar 2010 at 1:03am

FRANKFURT (MarketWatch) — Swedish truckmaker Volvo was upgraded on Friday to overweight from underweight at J.P. Morgan Cazenove. The broker also raised its target price to 90 Swedish kronor per share from 55 kronor, implying 32% upside. “We believe that recent restructuring in the construction division and the global engine platform will increase margins higher than at a prior muted peak, in combination with a simultaneous expected recovery in European, U.S. and Japanese truck markets,” while emerging markets are reaching new highs, the broker said in a note to clients.

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Obama to nominate Yellen as Fed vice chairman: WSJ

12 Mar 2010 at 12:54am

LONDON (MarketWatch) — President Barack Obama plans to nominate Janet Yellen as vice chairman of the Federal Reserve Board, The Wall Street Journal reported, citing people familiar with the matter. Yellen, who has been president of the Federal Reserve Bank of San Francisco since 2004, is one of the more dovish policy makers among the Fed’s 12 regional bank presidents and has been a strong supported of the policies of Fed Chairman Ben Bernanke, the Journal reported. Yellen would replace Donald Kohn, whose term expires in late June. The newspaper said the White House has also selected two other nominees to the seven member board, but that the names of those nominees couldn’t be learned.

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SAS reaches pilot, cabin crew union deal

12 Mar 2010 at 12:45am

LONDON (MarketWatch) — Scandinavian airline SAS said Friday that it has reached an agreement with unions representing pilots and cabin crew and expects to make 500 million Swedish kronor ($70.4 million) in cost savings from the agreement. The airline will introduce measures such as salary reductions, salary freezes, reduced allowances, reduced pensions and other reimbursements. Friday’s agreement brings total cost savings for the firm to 7.8 billion kronor.

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Nyrstar lifts bid for CBH Resources

12 Mar 2010 at 12:40am

LONDON (MarketWatch) — Belgian metals producer Nyrstar said Friday it’s lifted its bid for Australia’s CBH Resources . The Belgian group said it’s offering 0.195 Australian dollars ($0.179) per ordinary share and A$750 per convertible note. The offer values the ordinary shares and convertible notes of the group at a total of A$290 million, compared to the previous bid value of A$220 million. Shares in CBH jumped around 29% to 0.18 dollars. The company said it believes the deal would provide superior value to shareholders than an alternative transaction proposed by CBH’s largest shareholder and convertible note-holder Toho Zinc.

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Yara won’t improve offer for Terra Industries

12 Mar 2010 at 12:30am

FRANKFURT (MarketWatch) — Norwegian fertilizer company Yara International ASA said Friday it will not propose an improvement to the cash merger agreement signed on Feb. 12 by Yara and U.S.-based Terra Industries Inc. . In March, CF Industries Holdings Inc. made a better offer to buy Terra. The merger agreement between Yara and Terra may be terminated under certain circumstances, including if Terra receives a superior proposal, Yara said. If Terra terminates the merger agreement under such circumstances, Yara will be entitled to a $123 million break-up fee. “Terra would be a perfect fit to Yara and attractive at our proposed valuation, but we will not increase our offer that was first accepted by the Terra board,” said Jorgen Ole Haslestad, president and CEO of Yara International ASA. The “U.S. remains an attractive market for us and we will continue to search for opportunities to grow our business in the region,” Haslestad said.

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SuperGroup sets IPO price at 500p a share

12 Mar 2010 at 12:27am

LONDON (MarketWatch) — U.K. fashion retailer SuperGroup, owner of the SuperDry brand, said Friday that it has priced its initial public offering at 500 pence per share. Based upon the offer price, the market capitalisation of SuperGroup when it starts trading on the London Stock Exchange will amount to around 395 million pounds. The net proceeds of the offer are expected to amount to 120 million pounds. Unconditional dealings are expected to start on March 24. Seymour Pierce is acting as sponsor and sole bookrunner to the company.

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Liberty receives takeover approaches

12 Mar 2010 at 12:23am

LONDON (MarketWatch) — U.K. retailer Liberty PLC said Friday that it has received approaches that may lead to an offer being made for the company. The company said it has been looking at a range of options over the last six months, including seeking investors who could inject capital to help grow the business. It added that it is too early to determine whether or not the talks will result in a formal offer.

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March 12 2010 02:08 am | Stock Market News

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