US stock index futures were flat and pointed to a lower open after three days of gains on Wall Street.]]> |||
New York - US stock index futures were flat and pointed to a lower open on Thursday after three days of gains on Wall Street, weighed by results including those from Google and IBM and ahead of employment and regional business growth data.
* Data on weekly applications for unemployment insurance and the Philadelphia Fed's business index is due at 8:30 a.m. EDT (14:30 SA time) and 10:00 a.m. (16:00 SA time) respectively.
* Google shares fell 2.5 percent in premarket trading and IBM lost 4 percent after both reported underwhelming earnings results late Wednesday.
Their results raised questions about those of other tech-sector companies.
* Shares of Morgan Stanley, however, rose after it reported a 49 percent rise in first-quarter earnings before the open on Thursday.
General Electric posted a 12 percent rise in overall industrial profits and its shares gained 1 percent in premarket trading.
* S&P 500 e-mini futures were little changed and fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract, pointed to a lower open.
Dow Jones industrial average futures fell 10 points and Nasdaq 100 futures added 3 points.
* Wall Street rallied 1 percent on Wednesday after Federal Reserve Chair Janet Yellen said persistently low inflation poses a more immediate threat to the US economy than rising prices, stressing that the US central bank would be delivering policy stimulus for some time to come.
* China's Weibo Corp will be valued at $3.46 billion when it goes public on the Nasdaq on Thursday, as it priced at the lower end of expectations on concerns about the microblogging service's slowing user growth and the country's highly censored media environment. - Reuters]]>
Hong Kong shares finished slightly higher in the lowest trading volume since mid-February, as investors geared up for the Easter holiday.]]> |||
Beijing - Hong Kong shares finished slightly higher on Thursday in the lowest trading volume since mid-February, as investors geared up for the Easter holiday.
The Hang Seng Index closed up 0.3 percent at 22,760.24 and down 1.1 percent on the week.
The China Enterprises Index of the leading offshore Chinese listings in Hong Kong was up 0.4 percent.
Market turnover for the key index was HK$1.04 billion ($134.12 million).
Telecommunications conglomerate PCCW gained 2.3 percent, after the company said it raised over HK$50 million ($6.45 million) from sales of more than 9 million shares in its subsidiary Pacific Century Premium Development.
But Citic Pacific shares fell 3.1 percent after details emerged on Wednesday night about the firm's agreement to buy the main operating unit of its parent, state-backed CITIC Group, for $36.5 billion in a stock and cash deal.
The stock previously jumped 30 percent when CITIC Group Corp injected prime operating assets into the Hong Kong-listed firm at the end of March.
The Hong Kong stock exchange will close for Good Friday on April 18 and Easter Monday on April 21. - Reuters]]>
South Africa's rand firmed within a recent range, trading sideways for a second session.]]> |||
Johannesburg - South Africa's rand firmed within a recent range on Thursday, trading sideways for a second session as investors avoided taking big positions ahead of a long weekend.
The rand was at 10.5400 to the dollar at 08:47 SA time, 0.25 percent off a 10.5665 close in New York on Wednesday and trading within levels set two sessions ago.
Government bonds tracked the currency's moves and yields were just a notch firmer on the 2026 and 2015 benchmark bonds.
The rand, with bonds following suit, had weakened steadily for four straight sessions and then took a breather as the dollar consolidated gains.
Dealers said trade was already thinning before the long Easter weekend and with the local data calendar empty, investors were unlikely to go into the market with much conviction.
“Pressure on the local bond and interest rate derivative markets has eased heading into the Easter break, with dollar/rand having found a narrow resting range between 10.49 and 10.62,” said Thando Vokwana of Rand Merchant Bank in a market note, adding that activity should remain muted in the session.
Yields on government bonds nudged up 1.5 basis points to 8.46 percent on the 2026 issue and to 6.78 percent on the 2015 note.
The Treasury will hold its weekly Friday auction of Treasury Bills in the session while there will be no sale of inflation-linked bonds, usually also held weekly on a Friday.
Results of the Treasury Bill sale are due at 12:00 SA time. - Reuters]]>
The leaders of South Africa's striking mining union and the chief executives of the world's three biggest platinum producers.]]> |||
Johannesburg - The leaders of South Africa's striking mining union and the chief executives of the world's three biggest platinum producers were set to meet on Thursday, in a renewed drive to end a crippling strike entering its 13th week.
“They will be meeting directly with the Minister of Labour Mildred Oliphant present as well,” a spokeswoman for the producers told Reuters.
Anglo American Platinum, Impala Platinum and Lonmin have so far lost 13.5 billion rand in revenue to the longest and most damaging strike at the country's mines in living memory.
Both sides have been at odds over the issue of pay increases with the Association of Mineworkers and Construction Union (Amcu) demanding a more than doubling of the basic wage to 12,500 rand a month over the next three years.
The producers last disclosed offer was for pay hikes of up to 9 percent.
This is all the companies say they can afford due to rising operating costs and depressed prices for the precious metal, which is used for emissions-capping catalytic converters in automobiles.
A source with one of the companies said the chief executives had held meetings last week and this week with Amcu President Joseph Mathunjwa and senior government officials, but this was the first time “the bosses, Mathunjwa and a government minister will be in the same room together.”
The strike, which has hit 40 percent of global platinum production, is also a headache for President Jacob Zuma and the African National Congress just three weeks before a national election.
Amcu on Tuesday asked the government and the public for funds to help sustain 70,000 striking members who have gone nearly three months without pay.
Friday marks the start of the four-day Easter weekend in South Africa and so regardless of what happens at Thursday's talks, operations won't restart until next week at the earliest. - Reuters]]>
A strike that all but shut platinum mines since January is extending the longest shortfall in global output since 2005.]]> |||
New York - A labour dispute that all but shut platinum mines in South Africa since January is extending the longest shortfall in global production since 2005, which Morgan Stanley predicts will take at least four years to fix.
For a third straight year, makers of auto parts and jewellry will use more of the metal than is mined.
Credit Suisse on March 31 raised its deficit forecast for this year by 25 percent to 836,000 ounces, after concluding the strike in South Africa, the world’s top producer, will prevent more than 1 million ounces from being retrieved in 2014.
Workers who normally earn 5,000 rand a month have gotten nothing since the walkout began, forcing some to sell belongings as union leaders renew demands for higher pay.
Mine owners including Lonmin Plc say they are losing $15 million a day and may buy metal to meet supply commitments.
Hedge funds more than doubled their bets on higher prices this year, and holdings in exchange-traded funds backed by platinum are up 68 percent from a year ago.
“It’s a challenging situation,” said John Stephenson, who helps oversee about C$3.1 billion ($2.8 billion) at First Asset Investment Management in Toronto.
“I see platinum becoming very, very precious.”
Futures will average $1,639 an ounce this year, or 14 percent more than yesterday’s close of $1,437.80 on the New York Mercantile Exchange, Morgan Stanley predicted in an April 8 report.
The bank said the production deficit will last at least until 2018, fuelled by rising demand for the metal in catalytic converters, which reduce auto emissions.
The strike reduced output of platinum-group metals, including palladium, rhodium, iridium and ruthenium mined from the same ore, by 36 percent in February, the most in two years, the Pretoria-based Statistics South Africa, said April 10.
The nation supplies more than 70 percent of world platinum output.
Hedge funds and other large speculators are holding a net- long position of 31,730 platinum futures as of April 8, after increasing bets in six of the past eight weeks, US Commodity Futures Trading Commission data show.
Wagers jumped to a one-year high in March.
ETPs backed by the metal surged to a record 82.4526 metric tons (2.65 million ounces) yesterday valued at $3.8 billion.
Platinum futures are up 4.7 percent this year in New York, trailing the 8.4 percent advance in gold.
Palladium gained 12 percent as the strike reduced output from South Africa, the second-largest supplier, and tensions escalated between Ukraine and Russia, the biggest producer.
The US and European Union are discussing more sanctions against Russia.
The strike by more than 70,000 South African workers will continue as long as companies refuse to improve wage offers, Joseph Mathunjwa, president of the Association of Mineworkers and Construction Union, said April 15.
The union is the biggest representative at mines owned by top producers Lonmin, Anglo American Platinum and Impala Platinum.
The workers want basic monthly pay boosted to 12,500 rand over four years, which the producers say they can’t afford after production costs jumped 18 percent annually in the last five years, as wage and electricity costs rose.
Many labourers live in shacks made of iron sheeting.
They share toilets, don’t always have water or power, and many spend much of their income servicing debt.
The country has a 24 percent unemployment rate.
“The union may have to distribute food as workers have not been paid so long,” said Sydwell Dokolwana, the National Union of Mineworkers’ regional secretary in Rustenburg.
“There’s a huge problem here, and it is very, very bad.”
In Rustenburg, a city of 500,000 about 60 miles west of Pretoria, mining-related activities account for about half the jobs and 60 percent of the economy, according to Thapelo Matebesi, the spokesman for the local municipality.
Any price rally may be short-lived because inventory remains high and buyers in China, which accounts for 70 percent of world platinum jewellry, probably will balk at higher costs, Standard Bank said in a report on April 14.
Futures are down 1.7 percent since the strike began, partly as the appeal of haven assets including gold faded.
Supplies of recycled platinum will rise year 3.7 percent this year to 1.36 million ounces, according to CPM Group.
“Clearly people are not convinced that Europe has come out of the woods,” after a recession in 2012, said David Christensen, who oversees $300 million of assets as chief executive officer of ASA Gold and Precious Metals, a San Mateo, California-based company investing in precious-metal companies.
“Also, supplies have not yet hit a precarious condition for people to start betting on higher prices.”
The International Monetary Fund said this month that the world economy will expand 3.6 percent this year, less than the 3.7 percent expected in January.
The euro-area’s monetary authority needs to use unconventional measures to help sustain growth, the IMF said April 8.
Disruptions at South Africa’s platinum mines risk damaging long-term demand by pushing industrial users to use alternative metals, including palladium, industry researcher Johnson Matthey Plc, which makes one-third of the world’s catalytic converters, said on January 29.
Palladium jumped to $817 an ounce on April 14, the highest since 2011, on speculation that demand from automobile makers in US and China, the world’s largest auto markets, may rise amid supply concerns.
Like platinum, palladium is used for catalytic converters in vehicles.
“Platinum consumption has been stagnating, while palladium consumption has been growing and the catalysts increasingly use palladium instead of platinum,” Anton Berlin, marketing director at Norilsk Nickel unit ZAO NormetImpex, said on a April 7 conference call.
Palladium usage by the automobile industry will rise 4.2 percent to 7.13 million ounces this year, while demand for platinum from carmakers will increase 2 percent this year to 3.13 million ounces, according to Credit Suisse.
While platinum prices are down from a peak of $2,308.80 in 2008, demand is improving as output drops.
Morgan Stanley predicts sees a 4 percent growth in European Union auto sales in 2014.
Europe accounts for 25 percent of all platinum use, with the continent’s car companies the biggest source of demand behind Chinese jewellers, according Johnson Matthey.
Platinum jewellry demand may rise 1.3 percent to 2.8 million ounces and industrial demand for the metal will gain 3.8 percent to 1.9 million ounces this year, Barclays predicts.
The bank in a March 26 report said it sees “more upside” in the near term.
Bayerische Motoren Werke, Audi and Mercedes posted their highest monthly deliveries ever in March on surging demand in China and the US, the world’s two largest auto markets.
Supplies from South Africa continue to drop, and the longer it lasts, the more time it will take to get mines back into full production.
“The extended period of closure is very detrimental for the mines so the supply situation could worsen further,” said Tom Kendall, an analyst at Credit Suisse in London who was the most-accurate forecaster of platinum prices in the past eight quarters, according to data compiled by Bloomberg.
“The impact will be large enough to be felt on prices.”
Anglo American Platinum, the top producer, said in January that every day it loses about 4,000 platinum ounces of production and about 100 million rand of revenue.
The mines of the Johannesburg-based company where the workers are striking accounted for 46 percent of its output in 2013.
Lonmin chief executive Ben Magara said earlier this month it would buy metal on the open market “as a last resort.”
The company runs operations from Johannesburg. Impala, the No. 2 producer, said it is losing 2,800 ounces a day after work was halted at the Rustenburg Lease mines, which accounted for 58 percent of mined output.
“We are getting to the stage where we will not be able to meet the normal requirements of our customers,” Johan Theron, a spokesman for Impala said yesterday from Johannesburg.
“We have been supplementing deliveries from the inventory, but soon that may not be possible if the strike continues.”
The three companies are seeking an expeditious and affordable settlement, Charmane Russell, a spokeswoman for the producers at Russell & Associates, said yesterday in an e-mail.
Amplats has risen 25 percent this year in Johannesburg, touching a two-year high on April 14 of 530 rand.
Illovo, South Africa-based Impala slid 3.3 percent, while Lonmin has declined dropped 4.9 percent.
“Anytime there is a curtailment in supplies we will see prices gradually move higher,” said Walter “Bucky” Hellwig, who helps manage $17 billion at BB&T Wealth Management in Birmingham, Alabama.
“The question in everybody’s mind is how long will this strike last.” - Bloomberg News]]>
American stocks advanced for a third straight session as Federal Reserve Chair Janet Yellen reaffirmed the central bank's commitment to keeping interest rates low.]]> |||
New York - US stocks rose 1 percent on Wednesday, advancing for a third straight session as Federal Reserve Chair Janet Yellen reaffirmed the central bank's commitment to keeping interest rates low and Yahoo rallied.
Data showing Chinese economic growth exceeded expectations and US industrial production rose for a second straight month also improved sentiment, though Bank of America and CSX sold off following their results.
Yellen, speaking in New York, reaffirmed the Fed's commitment to keep interest rates low, even after ending its bond-buying program, as long as inflation remains below target and unemployment elevated. The Fed's Beige Book, a report of anecdotal information on business activity, showed that activity picked up in most regions in recent weeks.
“These comments, while nothing out of the ordinary, reiterated the Fed's commitment to accommodative monetary policy, which is helping investors remember that there are more tailwinds than headwinds in the economy,” said Kristina Hooper, head of US capital markets research and strategy at Allianz Global Investors in New York.
Yahoo was the S&P 500's biggest gainer, rising 6.3 percent to $36.35. While the company gave a tepid revenue outlook, revenue growth accelerated in the last quarter of 2013 for Alibaba , in which Yahoo holds a 24 percent stake.
Intel shares briefly hit their highest since June 2012 a day after the chipmaker posted a quarterly net profit that exceeded Wall Street's estimates. The stock rose 0.6 percent to end at $26.93.
On the downside, Bank of America slid 1.6 percent to $16.13 after the bank swung to a quarterly loss. CSX fell 1.8 percent to $27.79 after its results.
“We don't expect a great earnings season, given the negative impact of weather in the first quarter, but investors with a long enough timeline should be able to look past that,” said Hooper, who helps oversee $475 billion in assets.
After the closing bell, Google reported its quarterly results and its stock tumbled 4.9 percent to $536. IBM shares fell 1.5 percent after the bell following the release of the Dow component's earnings. The shares of American Express, another Dow component, fell 0.9 percent in extended-hours trading after the world's biggest credit card issuer reported its first-quarter earnings.
The Dow Jones industrial average rose 162.29 points, or 1.00 percent, to end at 16,424.85. The Standard & Poor's 500 Index gained 19.33 points, or 1.05 percent, to finish unofficially at 1,862.31. The Nasdaq Composite Index jumped 52.06 points, or 1.29 percent, to close at 4,086.23.
In the latest economic data, China reported that its economy grew at its slowest pace in 18 months at the start of 2014, but the increase was better than expected and showed some improvement in March. US manufacturing output rose for a second straight month in March in a sign of recovery from a harsh and prolonged winter that had put a damper on activity.
The global economy should grow steadily at best over the coming year, a Reuters poll showed, but any rapid slowdown in China could upset the progress.
The market has bounced back from last week's pummelling, when the S&P 500 posted its largest weekly decline since mid-2012. This week, the major US stock indexes climbed after results from Citigroup and Coca-Cola, and as biotechnology shares rebounded.
Recent trading has been volatile. On Tuesday, the Nasdaq opened higher, then turned sharply negative before rallying in the afternoon to end higher. According to Bespoke Investment Group, this kind of action has only happened 18 times since 2000, and a week following each instance, “the Nasdaq has averaged a decline of 2.84 percent”, the firm wrote to clients.
While only 9 percent of S&P 500 companies have reported results so far, 57.4 percent have topped earnings expectations, below the long-term average of 62 percent. Only 53.2 percent have topped revenue expectations, below the long-term average of 61 percent.
About 76 percent of stocks traded on the New York Stock Exchange closed higher, while nearly 69 percent of Nasdaq-listed shares ended in positive territory.
About 5.98 billion shares traded on all US platforms, according to BATS exchange data, below the month-to-date average of 6.95 billion. - Reuters]]>
Asian share markets eked out gains on Thursday after dovish comments from the head of the US Federal Reserve.]]> |||
Sydney - Asian share markets eked out gains on Thursday as dovish comments from the head of the US Federal Reserve combined with an upbeat economic assessment from the central bank to lift Wall Street for a third straight session.
However, disappointing results from Google and IBM knocked their shares lower after the bell and could crimp technology stocks in the region.
Indeed, the tech and telecoms sectors in Japan's Nikkei were in the red on Thursday, nudging the overall index down 0.2 percent following a 3 percent jump the previous session.
Other markets fared better with shares in Australia up 0.5 percent and MSCI's broadest index of Asia-Pacific shares outside Japan adding 0.33 percent.
The moves mirrored Wall Street, where both the Dow and S&P 500 gained about 1 percent, while the Nasdaq bounced by 1.29 percent.
Yet not all was well. Google Inc lost around 4 percent after hours as first-quarter revenue fell short of Wall Street targets and margins narrowed as the price of its ads continued to decline.
IBM Corp suffered after reporting its lowest quarterly revenue in five years as the company struggles with falling demand for its storage and server products. Total revenue fell 4 percent to $22.5 billion in the first quarter, below average estimate of $22.91 billion.
Shares of the world's largest technology services company fell about 4 percent to $188.20 in after-hours trade.
Fed Chair Janet Yellen told the Economic Club of New York that it might take two years to return to full employment and there was more risk of inflation staying too low, than going too high.
Yellen said achieving the Fed's economic goals “will likely require low real interest rates for some time,” a policy view she said was shared broadly across many advanced economies.
“We read this as a not-so-subtle signal that, although the committee has gradually begun to remove its outright commitment to low rates and balance sheet expansion, the Fed is in no hurry to accelerate the trend or initiate a rate hike cycle,” said Michael Gapen, and economist at Barclays.
The prospect of low rates for longer helped pull down long-term borrowing costs. Yields on Treasury 30-year bonds dipped to 3.44 percent and near lows not seen since July last year.
But that in turn weighed on the dollar which eased back to 102.01 yen from an early high at 102.26. The euro was a whisker firmer at $1.3835 but well within recent ranges.
Bonds in Europe continued their spectacular rally amid speculation that persistently low inflation would force the European Central Bank to launch further stimulus.
Yields on Spanish 10-year debt sank to their lowest in over eight years at 3.06 percent, while Italian 10-year yields hit an all-time trough at 3.11 percent.
Economic news out of the United States was mixed with industrial production beating forecasts but housing starts disappointing.
Still, investors were cheered by the Fed's Beige Book of anecdotal information on business activity which showed activity picked up in recent weeks as a weather-related drag lifted.
Spot gold steadied at $1,300.85 an ounce having found support in the $1,290/1,293 area after a technical selloff early in the week.
Brent crude inched toward $110 a barrel on Wednesday on mounting tensions in Ukraine. Ukrainian government forces and separatist pro-Russian militia staged rival shows of force in eastern Ukraine on the eve of crucial talks on the former Soviet state's future.
Brent crude for June added 2 cents to $109.62 a barrel, near its highest level since March 3. US crude was up 33 cents at $104.09 a barrel, shrugging off a huge build in stockpiles. - Reuters]]>
Stocks rose as mining shares such as BHP Billiton were lifted by positive data.]]> |||
Johannesburg - South African stocks rose on Wednesday as mining shares such as BHP Billiton were lifted by positive production updates and data showing Chinese economic growth came in a touch above forecasts.
Shares of BHP Billiton rose 1.14 percent to 338.58 rand after the world's biggest diversified mining company on Wednesday lifted full-year iron ore production guidance by 5 million tonnes to 217 million as it pushes ahead with new mine work in Australia.
“The big guns have come out firing. We had some numbers out of Billiton and the market seems to like that,” said Paul Chakuduka of Global Trader.
Kumba Iron Ore rose 1.6 percent to 395.76 rand on the data from China, which grew 7.4 percent in the first quarter, from a year earlier, pipping forecasts of 7.3 percent and dashing speculation beforehand that growth would be nearer 7 percent after a string of recent soft numbers.
The Top-40 index climbed 0.78 percent to 43,242.25 while the broader All share index rose 0.73 percent to 48,139.69.
Preliminary bourse data showed advancers outpaced decliners 199 to 104, while 189 million shares exchanged hands.
Investors welcomed solid Yahoo earnings and encouraging US and China data.]]> |||
New York - US stocks moved higher in early trading on Wednesday, extending their gains into a third day. Investors welcomed solid earnings from Yahoo as well as some encouraging news about China's economy and US factory production.
The Standard & Poor's 500 index rose 10 points, or 0.6 percent, to 1,853 in the first 45 minutes of trading. The Dow Jones industrial average gained 100 points, or 0.6 percent, to 16,363. The Nasdaq added 25 points, or 0.6 percent, to 4,059. All three indexes are up for the week but are still down for the month.
YAHOO FOR ASIA
Yahoo jumped $2.44, or 7.1 percent, to $36.64 in early trading. The Internet pioneer reported late Tuesday that it is making most of its money from its stakes in two Asian Internet companies, China's Alibaba Group and Yahoo Japan. That overshadowed a 20 percent drop in first-quarter earnings.
The world's second-largest economy grew 7.4 percent from a year earlier in the January-March quarter, down from the previous quarter's 7.7 percent, China's government reported. The growth rate appeared strong enough to satisfy Chinese leaders who are trying to put the country on a more sustainable path without politically dangerous job losses.
The Federal Reserve said Wednesday that factory production rose 0.5 percent in March after a revised 1.4 percent surge in February. The gains over the past two months point to a rebound after a winter slowdown in January and December stalled growth across the economy, and are a sign of greater demand by businesses and consumers.
In Asia, Hong Kong's Hang Seng gained 0.1 percent. China's Shanghai Composite Index added 0.2 percent. The Nikkei 225
index jumped 3 percent.
In US government bond trading, the yield on the 10-year Treasury note rose to 2.65 percent after ending at 2.63 percent late Tuesday.
US stock index futures rose on Wednesday after China growth exceeded expectations.]]> |||
New York - US stock index futures rose on Wednesday after China's economic growth came in above expectations and Yahoo shares rallied on the strength of revenue growth in Chinese e-commerce giant Alibaba, in which it has a stake.
- China, the world's second-largest economy, grew at its slowest pace in 18 months at the start of 2014, but the rise was better than expected and showed some improvement in March.
- Revenue growth accelerated in the last quarter of 2013 for Alibaba, a timely lift as it prepares for its highly anticipated US initial public offering. Shares of Yahoo, which holds 24 percent of Alibaba, rallied 8.5 percent in premarket trading despite posting anemic growth.
- S&P 500 e-mini futures rose 9 points and were above fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures rose 75 points and Nasdaq 100 futures added 20 points.
- Bank of America posted a first-quarter loss as the No. 2 U.S. bank recorded $6 billion in litigation expenses related to a settlement with the Federal Housing Finance Agency and other mortgage-related matters. The bank's shares fell 0.5 percent in volatile premarket trading.
- Markets continue to keep an eye on east Ukraine, where government forces and separatist pro-Russian militia staged rival shows of force on the eve of talks in Geneva on the former Soviet country's future.