Thursday, September 11, 2008
World Daily Markets Briefing
| by: ADVFN Newsdesk US Stocks at Glance US STOCKS-Wall St rises on Lehman, tech, FedEx NEW YORK - U.S. stocks rose on Wednesday after embattled Lehman Brothers announced steps that investors said may help the investment bank bolster its capital position, easing worries about its stability. Positive outlooks from chip maker Texas Instruments and shipper FedEx added to the stronger opening. Investors bought beaten-down stocks after The broader market suffered its worst slide in more than a year on Tuesday. The Dow Jones industrial average was up 25.65 points, or 0.23 percent, at 11,256.38. The Standard & Poor's 500 Index was up 5.12 points, or 0.42 percent, at 1,229.63. The Nasdaq Composite Index was up 13.77 points, or 0.62 percent, at 2,223.58. Lehman Bros. sees 3Q loss; slashes dividend; to spin-off assets BOSTON - Lehman Brothers Holdings Inc. Wednesday said it expects to report a loss for its fiscal third quarter and plans to spin-off to its shareholders a vast majority of its commercial real estate portfolio into a separate publicly-traded company. The company said it sees a third-quarter loss of $3.9 billion, or $5.92 a share, compared to net income of $887 million, or $1.54 a common share, in the year-ago period. The net loss was driven primarily by gross mark-to-market adjustments stemming from writedowns on commercial and residential mortgage and real estate assets. Lehman expects revenue for the quarter to be negative $2.9 billion, compared to positive $4.3 billion for the same period a year earlier. Analysts polled by Thomson Reuters, on average, are forecasting a loss of $3.35 a share on revenue of $286.3 million. The New York-based company said it expects to incur negative gross mark-to-market adjustments on assets of $7.8 billion in the third quarter. In conjunction with its preliminary third quarter results, Lehman announced a plan of initiatives to "dramatically" reduce its commercial real estate and residential mortgage exposure, generate additional capital and reduce the annual dividend. Lehman intends to spin-off to its shareholders $25 billion to $30 billion of its commercial real estate portfolio into a separate publicly-traded company in the first quarter of 2009. Additionally, the company plans to sell a majority stake (estimated to be about 55%) in a subset of its Investment Management division. The company has also decided to cut its annual common dividend to 5 cents from 68 cents, enabling it to retain $450 million annually. Lehman said it took "several steps to significantly reduce" its real estate portfolio in the third quarter. The company said it reduced its residential mortgage exposure by 31% to $17.2 billion and its commercial real estate exposure by 18% to $32.6 billion. Shares of the investment bank fell 3 cents to $7.76 in premarket trades on volume of about 10.5 million. Forex FOREX-Dollar pressured vs yen after Lehman Q3 results LONDON - The dollar cut gains against the yen on Wednesday, while the Japanese currency hit an 13-month high versus the euro after embattled Wall Street investment bank Lehman Brothers reported its third quarter results. Lehman, whose share price plunged 45 percent on Tuesday on growing concerns about its capital situation, reported a loss of $5.92 per share, slashed dividends and said it is actively in talks to sell assets. The U.S. currency also trimmed gains against a basket of currencies, weighed by an early rebound in oil prices from a five-month low after the world's major oil producers agreed to a small but unexpected production cut. "The dollar has come under initial pressure," said Ian Stannard, senior foreign exchange strategist at BNP Paribas. "The market may have been hoping for more news regarding capital raising ... this doesn't seem to be the case, so concerns about the banking system remain in place." The Korean Development Bank said earlier in the day it had ended talks over possible investment in Lehman, with the bank's ongoing woes highlighting nagging problems in the financial sector and prompting a wave of risk aversion. Abating risk appetite prompted the Japanese unit to score a 13-month high against the euro at 150.15 yen as market participants said low-risk currencies like the yen would stay in favour as the market endures the latest in the financial sector storm. By 1218 GMT, the dollar stood at 106.77 yen, flat on the day compared with 107.47 yen prior to the results. It traded 0.2 percent higher against a basket of major currencies . The euro fell nearly 0.4 percent to $1.4082, dragged down by its losses against the yen, while increasing worries about a growth slowdown in the euro zone kept the single currency near an 11-month low of $1.4045 hit on Tuesday. Traders showed limited initial reaction to European Central Bank President Jean-Claude Trichet, who on Wednesday told the European Parliament it would be naive to think markets will return to their pre-turbulence state Initial news the KDB was seeking a controlling stake in Lehman had knocked the Japanese currency down and boosted the Australian and New Zealand dollar up more than 1 percent each. But the announcement the talks had ended in disagreement enabled the yen to trim those losses, as the news suggested an immediate solution to Lehman's problems seems unlikely. Asia at a Glance Asian stock market summary JAPAN The Nikkei 225 Stock Average was 0.4 percent lower at 12,346.63, after financially troubled U.S. investment bank Lehman Brothers Holdings Inc. failed to raise fresh capital. SOUTH KOREA The Korea Composite Stock Price Index closed up 0.72 percent at 1,464.98, with Hynix gaining on prospects for a stake sale and investors shrugging off reports North Korea's leader was gravely ill. CHINA The benchmark Shanghai Composite Index closed up 0.23 percent at 2,150.76, after the August consumer price index came in better than expected, even as producer prices remained at high levels. The Shanghai A-share Index was up 0.23 percent at 2,257.40, and the Shenzhen A-share Index rose 0.50 percent to 615.92. The Shanghai B-share Index was up 0.46 percent to 143.35, while the Shenzhen B-share Index was down 0.85 percent at 350.21. AUSTRALIA The benchmark S&P/ASX 200 index gave up 74.6 points to close at 4,905.5, as miners slid on falling metals prices and banks fell on fresh worries about U.S. banks' ability to cope with mortgage losses. TAIWAN The weighted index closed up 0.52 percent at 6,458.01, as hopes for government support measures offset early weakness caused by concerns over troubles at US investment bank Lehman Brothers. HONG KONG The Hang Seng index closed down 491.33 points or 2.4 pct at 19,999.78, off a low of 19,951.36 and high of 20,283.99. INDIA The benchmark 30-share Sensex of the Bombay Stock Exchange fell 238.15 points or 1.6 percent to 14,662.61 while the broader 50-share S&P CNX Nifty of the National Stock Index shed 68.45 points or 1.53 percent to 4,400.25 Labels: ADVFN NewsDesk, Forex Analysis |
posted by Matbank at 12:54 AM
