Thursday, August 31, 2017

Yue Yuen profit misses forecast, challenges seen

Yue Yuen profit misses forecast, challenges seen

Stock Market Predictions

HONG KONG (Global Markets) - Yue Yuen Industrial (Holdings) Ltd (0551.HK), the world's largest branded sports shoe manufacturer, said it expects next year to be challenging after posting a 6.2 percent fall in net profit for fiscal 2011, missing forecasts.

Chairman Tsai Chi Neng said in a filing to the Hong Kong bourse that the global economic environment in 2012 would remain volatile as recovery was gaining momentum only gradually and consumers in developed economies "may be reluctant to spend and would rather increase their savings."

He added that customers should still be willing to purchase sports footwear and apparel ahead of the UEFA Champions League football competition in June next year and the Olympic Games in August.

Yue Yuen, which makes shoes for New Balance, Nike Inc (NKE.N) and Adidas AG (ADSGn.DE), on Friday posted a $449.8 million profit for the year ended September, down from $479.5 million in the previous year. The result missed a forecast $511.1 million profit from Thomson Global Markets Starmine.

Earnings per shares fell 6.2 percent to 27.28 cents.

Total production volume in 2011 rose 14 percent to 326.6 million pairs of shoes.

Shares of Yue Yuen have fallen about 11 percent this year, versus a 20 percent drop in Hang Seng Index .HSI. The stock was down 0.4 percent early on Friday.

"Despite a drop in earnings, hopes for (industry) consolidation and moderating cost growth in the coming year are expected to make companies like Yue Yuen look more defensive and attractive in the current investment climate," said Ample Finance Group Director Alex Wong.

Yue Yuen's 56.5 percent owned unit Pou Sheng International (Holdings) Ltd (3813.HK), which makes products for Li Ning Co Ltd (2331.HK), ANTA Sports Products Ltd (2020.HK), 361 Degrees International Ltd (1361.HK), XTEP International Holdings Ltd (1368.HK), posted a 152 percent profit gain to $53.7 million, with revenue up 20 percent at $1.6 billion.

RISING COSTS

While group volume and turnover maintained growth momentum, margins came under pressure, "mainly from rising raw materials costs and factory wages," said Tsai.

Yue Yuen said labor costs jumped 38.5 percent during the year and materials costs rose 24.6 percent, with production overheads up 26.6 percent.

Yue Yuen, in which Taiwan-listed parent Pou Chen Corp (9904.TW) holds a 49.98 percent stake, said revenue rose 21.7 percent to $7.05 billion, 28.5 percent of which came from the U.S. market, 21.9 percent from Europe and 28.06 percent from China. Sales in Asia grew 26.2 percent from last year.

Yue Yuen increased production lines by 16.7 percent to 537 during the year, with new factories in China, Indonesia and Vietnam to take advantage of lower costs and more stable labor supplies.

In November, one of Yue Yuen's major factories in the southern Chinese province of Guangdong was hit by a large-scale strike. A spokesman said the company was having difficulty raising wages as it had done in the previous 3-4 years as operational costs increased.

(Editing by Jonathan Hopfner and Chris Lewis)

Xerox's lowered cash forecast irks investors

Xerox's lowered cash forecast irks investors

Stock Market Predictions

NEW YORK (Global Markets) - Xerox Corp (XRX.N) warned it would have less operating cash than expected this year, partly because it has to absorb added costs related to the earthquake in Japan, sending its shares down more than 2 percent.

While Xerox's solid second-quarter results and upbeat earnings forecast on Friday showed that its focus on providing corporate clients with more than just copiers was starting to pay off, its weaker outlook for operating cash flow served as a red flag for investors.

Xerox lowered its outlook for operating cash flow to a range of $2 billion to $2.3 billion for the year, down from a previous forecast of $2.5 billion.

"For a lot of investors in Xerox, the cash it is generating is one of the most looked at data points," said Neuberger Berman analyst Fayad Abbasi. "So in my view, that's the cause of disappointment in the stock today."

Neuberger Berman is one of the top holders of Xerox shares, which fell 2.2 percent, or 23 cents, to $10.07 on the New York Stock Exchange.

The more cash that Xerox has, the more it can reward investors by undertaking share buybacks or dividend increases.

Xerox Chief Executive Ursula Burns blamed the lowered cash forecast on supply problems in Japan and on new client accounts that require more upfront investment.

"We faced some unique challenges relative to cash usage during the first half of the year, including cash needs from ramping new contract signings and incremental cash required to support the supply chain constraints," Burns said on the call with analysts.

Xerox's quarterly revenue, which rose 2 percent to $5.6 billion, would have been higher had it not been for supply disruptions in Japan, the company said. The earthquake hurt revenue by putting constraints on its color supplies, which are sourced from its Fuji Xerox plant in Japan.

Xerox, which competes with Hewlett-Packard Co (HPQ.N), had about $1 billion in cash at the end of the quarter, which it said it would use for "modestly sized acquisitions" and to buy back shares. It expects to buy $700 million of stock in the second half of the year.

SHIFTING BUSINESS

Aside from the cash outlook, Xerox reported a strong quarter that initially boosted its shares.

The company raised its 2011 earnings outlook to a range of $1.07 to $1.12 per share, compared with analysts' expectations of $1.04 to $1.10 per share.

Xerox, which performs services such as managing the E-ZPass electronic tolling system in several states, said its services business contributed more revenue than its traditional copier and printer business in the quarter.

Its services business rose 6 percent, which included a 2 percentage point bump from the weaker dollar. Overall services business revenue totaled $2.67 billion, 48 percent of the business.

The company's business of selling printers, copiers, toners and ink generated $2.5 billion in revenue, representing about 45 percent of the company's revenue.

Adjusted for various charges, Xerox reported earnings per share of 27 cents, beating Wall Street analysts' average estimate of 24 cents per share, according to Thomson Global Markets I/B/E/S. Total revenue increased 2 percent to $5.6 billion, in line with analysts' estimates.

Xerox's adjusted profit also rose 39 percent in the second quarter, to $327 million, or 22 cents per share, from $236 million, or 16 cents per share, a year earlier.

The value of the company's contract signings fell 10 percent, which it blamed on the cyclical nature of large corporate deals.

In the quarter, the company said it employed 133,500 workers globally, which is 3,000 fewer than a year earlier.

A company spokesman said in an email that in the past quarter it cut 500 jobs, "which is based on attrition and the ebb-and-flow of the contracts that we have."

(Reporting by Liana B. Baker; Editing by Lisa Von Ahn, Derek Caney; Editing by Phil Berlowitz)

Wednesday, August 30, 2017

GM profit bolstered by pricing, stock up

GM profit bolstered by pricing, stock up

Stock Market Predictions

DETROIT (Global Markets) - General Motors Co's (GM.N) ability to raise U.S. vehicle prices and better-than-expected pension returns offset weakness in the fourth quarter in Europe and South America, sending shares up more than 6 percent.

The stock rise also reflected investor relief that the results were not worse, given that GM lost $747 million in Europe last year. For the fourth quarter, analysts gave the world's biggest automaker mixed reviews.

Fourth-quarter earnings were roughly flat from a year earlier and missed Wall Street expectations. GM also failed to provide the more detailed forecast for 2012 that some had hoped to hear.

"The results were 'shaken, not stirred,'" Guggenheim Securities analyst Matthew Stover said in a research note. "In other words, they were a little worse than consensus but certainly not as bad as the worst case outcome."

GM Chief Executive Dan Akerson said the U.S. automaker is focused on tackling the problems in Europe and South America, the two markets that dragged on fourth-quarter results. GM lost $562 million in Europe and $225 million in South America. By contrast, it earned $1.5 billion in its home market.

^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^

GM earnings graphic: link.reuters.com/cyn66s

BREAKINGVIEWS-Would President Romney sell Uncle Sam's

^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^

"We clearly have work to do in Europe," GM Chief Financial Officer Dan Ammann told reporters. "We have work to do in the South America business. Frankly, we have work to do all around the company in terms of cost opportunity."

Overall, GM expects 2012 sales to top 2011's $150.3 billion, and it sees a flat global market share.

For 2011, GM's profit jumped 62 percent to $7.6 billion. It was the company's first full year of operations since its initial public offering in the fall of 2010. GM reorganized with the help of a $50 billion U.S. government bailout and a 2009 bankruptcy.

The Obama administration's bailouts of GM and Chrysler Group LLC, which is majority-owned by Italy's Fiat SpA (FIA.MI), are the subject of political debate in the runup to this year's presidential election. Republican candidate Mitt Romney this week urged the U.S. Treasury to sell its nearly one-third stake in GM.

GOOD NEWS, BAD NEWS

Fourth-quarter net income was $472 million, or 28 cents a share, compared with $510 million, or 31 cents a share, in the year-ago quarter.

Excluding one-time items, GM earned 39 cents a share, 2 cents below analysts' average forecast in a poll by Thomson Global Markets I/B/E/S. Earnings before interest and taxes were in line with Wall Street's expectations.

GM's ability to raise prices on its vehicles added $800 million in earnings to the quarter.

Sales rose 3 percent to $38 billion.

"The good news is they've done a nice job getting North America back on track; the bad news is the rest of the world," Edward Jones analyst Matt Collins said.

"In order to get the stock moving again, they really need to address international profitability and the pension," he added.

Even with the 6.5 percent stock rise on Thursday, GM shares trade about 20 percent below their November 2010 IPO level of $33.

For 2012, GM expects to raise vehicle prices and hold costs in line after announcing its U.S. salaried workers would not receive an automatic pay raise.

But GM also said it expected profits to take a hit from the growing trend toward smaller, and lower-margin cars rather than more lucrative trucks like the Chevrolet Silverado. That drag on profit will be smaller in 2012 than it was last year, Ammann said.

One of the key questions for GM investors has been its troubled Opel unit, a business it opted to keep in 2009 when then-CEO Ed Whitacre scotched a planned sale.

In recent months, Vice Chairman Steve Girsky has taken charge of the Opel restructuring, and GM said it would detail further steps soon. The cost for the Opel restructuring was $200 million in the fourth quarter.

JPMorgan analyst Himanshu Patel described GM's European results as "not a train wreck."

For the year, Opel reported a loss of $700 million. GM had originally aimed to break even in Europe but abandoned that target last fall as the European debt crisis deepened.

Ammann said GM was working with union leaders at Opel to cut costs and improve efficiency in Europe within the framework of the current contract that runs through 2014 in Germany.

On Thursday, Opel union leaders urged GM to shift production of Opel vehicles from South Korea to Europe.

GM said its U.S. defined pension plans earned outsized returns of 11.1 percent last year and ended 2011 with a $13.3 billion pension funding shortfall.

The automaker expects returns of 6.2 percent in 2012 due to a shift to investments in bonds.

Ammann also said GM was exploring other actions to further reduce its pension risk, but has no plans to contribute to the plans at this time.

GM announced on Wednesday that it was ending its traditional pension for 19,000 U.S. salaried workers. The automaker and the United Auto Workers union have agreed to negotiate potential changes to the larger pension plan for factory workers.

GM said it would pay profit sharing of up to $7,000 per worker to about 47,500 hourly U.S. employees.

The automaker, which has said it remains focused on preserving a "fortress balance sheet" to carry it through the industry's next bust, ended the year with total automotive liquidity of $37.5 billion, down from $38.8 billion at the end of the third quarter.

GM shares were up 6.5 percent at $26.55 on Thursday afternoon on the New York Stock Exchange.

(Reporting By Ben Klayman and Deepa Seetharaman; Editing by Maureen Bavdek, John Wallace and Matthew Lewis)

Google scores a plus as investors toast results

Google scores a plus as investors toast results

Stock Market Predictions

SAN FRANCISCO/BANGALORE (Global Markets) - Shares of Google Inc (GOOG.O) surged 14 percent on Friday, a day after blockbuster results and early signs of success in newer initiatives revived hopes that the Internet giant is getting back on the growth track.

The shares shot up to $600.25, climbing back to pre-2011 levels on Nasdaq. If the gain stands by the end of Friday, it would mark the biggest single-day gain for Google shares since October of 2008.

"We are witnessing signs of increased competitive advantage for Google, particularly in Display and Local, with Search showing no signs of slowing," Evercore analyst Ken Sena said.

Sena raised his price target on the stock to $735 from $670, while Collins Stewart analyst Mayuresh Masurekar raised his price target to $725 from $680.

Jefferies raised its price target on the stock to $830 from $800, while Barclays Capital lifted its target to $730 and $675.

The results were strong despite a seasonally slow quarter, macro softness and substantially higher costs, analyst Masurekar said.

Going forward, the analysts expect Google to post strong revenue growth on international, display and mobile segments.

On a conference call, Chief Executive Larry Page said Google's new social networking service, Google+, had signed up more than 10 million people.

Clearly, the success of Google+ is a huge swing factor but the early signs of 10 million users and 1 billion items shared are encouraging, Wells Fargo analyst Jason Maynard said.

Evercore's Sena said he was encouraged by Google+ both in terms of traction and the company's plans to integrate its data signals and sharing capability into other products and services.

"TOOTHBRUSH" WORKS

CEO Page had compared Google's approach to being "like a toothbrush," something you use twice a day.

"We have made a good start but we are at only 1 per cent of what's possible... Google is just getting started... and that is why I am here -- working hard to lead this company to the next level," Page said.

The share jump that followed Google's results may be an indicator that the Wall Street is now more willing to give Page the benefit of doubt -- in terms of his investment and leadership strategy -- than just a quarter ago when he stunned investors by cutting short his appearance on the post-earnings conference call.

"We think investors will welcome his reassuring comments about fiscal discipline and product focus," Maynard said.

The better-than-expected results and successful Google+ launch should stem some of the short-term stock angst about their investment and development strategy, Maynard said.

Investors had feared Google's ever-increasing spending would eat into margins. Operating expenses leapt 49 percent to $2.97 billion in the second quarter, to about a third of revenue.

Google is fighting technology heavyweights that include Apple Inc (AAPL.O) and Microsoft Corp (MSFT.O), as well as upstarts such as Groupon, as it seeks to protect its lucrative search business at a time when mobile gadgets and social media are redefining the way consumers use the Web.

All five brokerages kept their top ratings on the stock, which was trading at $592.70 in late morning trade. (Reporting by Supantha Mukherjee in Bangalore and Edwin Chan in San Francisco; Editing by Gopakumar Warrier, Roshni Menon)

Tuesday, August 29, 2017

Olympus dumped by major shareholder as Japan steps up probe

Olympus dumped by major shareholder as Japan steps up probe

Stock Market Predictions

SINGAPORE/TOKYO (Global Markets) - Singapore's sovereign wealth fund said on Saturday it has sold most of its holdings of Olympus Corp (7733.T) on concern about wrongdoing, the first major shareholder to show it had lost confidence in the scandal-hit Japanese medical device and camera maker.

Japanese authorities are investigating Olympus after the company admitted this week that it hid investment losses for decades using funds from M&A payments. Media reports on Saturday said police and regulators were joining forces in a rare collaborative effort to examine the cover-up.

GIC GIC.UL, which is the acronym for Government of Singapore Investment Corp, was the 10th biggest shareholder in Olympus, with 2.17 percent as of the end of March, according to the latest Olympus annual report.

"GIC disposed of almost all of its investments on first suspicion of possible wrongdoing in Olympus," the Singapore fund said in a statement.

GIC added it had only an insignificant holding under a portfolio managed by an external fund manager. It said the majority of its investment was made in the midst of the global financial crisis.

The Tokyo District Public Prosecutors Office's special investigations unit, the Tokyo Metropolitan Police Department and the Securities and Exchange Surveillance Commission (SESC) will team up to investigate the Olympus cover-up of investment losses, Japanese media reported on Saturday.

Nikkei has said the concealment could have exceeded 130 billion yen ($1.68 billion) at its peak, and said the company's creditors were likely to press for a change in lending terms.

Lenders will confront Olympus next week to demand an explanation on its accounting, a banking source said on Friday, though he denied reports they would seek more security over their loans.

Tokyo's stock exchange has told Olympus it will be delisted if it fails to report earnings by December 14, which could effectively leave the 92-year-old company cut off from equity capital markets at a time when its shares have already lost more than three-quarters of their market value since the scandal erupted on October 14.

Olympus plans to correct 20 years of its financial statements and submit them to financial authorities, the Mainichi newspaper reported on Saturday.

Delisting would take effect on January 15 in principle if Olympus does not meet the reporting deadline. Even if Olympus meets the deadline, the bourse could still decide to delist the company, depending on the scale of its past misreporting.

The bourse placed Olympus on its supervisory list on Thursday, which means short-selling of its shares is restricted. But such trading had already been suspended by Japan Securities Finance, the processor of margin transactions.

"LOSING MONEY"

Sixteen investment trusts managed by Nomura Holdings Inc. (8604.T) group member Nomura Asset Management Co. have recently held Olympus in their portfolios, Nikkei also reported.

Eleven stock-index-linked mutual funds held a total of roughly 1.9 billion yen in Olympus shares as of Wednesday, and five more "fund of funds" owned shares as of September 30. The asset manager disclosed the information because of the possibility that Olympus will be delisted, Nikkei said.

Nomura Holdings, Japan's largest investment bank, said Olympus was its client but that it wasn't involved in any of the transactions at the center of the scandal.

Nikkei reported separately, quoting sources, that a majority of the 100-plus businesses acquired during former Olympus President Tsuyoshi Kikukawa's tenure are losing money. Kikukawa stepped down on October 26.

Most of the acquired firms, in areas such as pet care services, DVD production and others with little apparent connection to core Olympus operations, were unlisted and therefore not required to make their financial details public, Nikkei said.

Olympus President Shuichi Takayama on Tuesday blamed Kikukawa, Vice-President Hisashi Mori and internal auditor Hideo Yamada for the cover-up, and said he would consider criminal complaints against them. Mori was dismissed on Tuesday, and Hamada offered to resign.

The SESC, Japan's securities regulator, plans to take voluntary testimony from Kikukawa and two other current and former officials said to be involved in the investment cover-up, Nikkei said.

The report said the regulator also plans to hear as early as next week from former Olympus head Michael Woodford, who was ousted on October 14 - six months after being made president and just two weeks after becoming CEO - due to what the company said were management issues. Woodford subsequently made public some of the contentious M&A deals.

A third-party panel is now examining those acquisitions, and accounting experts have said the investigation could lead to asset writedowns of more than 70 billion yen, though Olympus' big and profitable medical business is likely to emerge unharmed.

The independent panel's head, retired Supreme Court justice Tatsuo Kainaka, told Global Markets his team may recommend criminal charges in its report, to be completed early next month.

(Editing by Robert Birsel)

OmniVision set to regain smartphone market share, shares jump

OmniVision set to regain smartphone market share, shares jump

Stock Market Predictions

(Global Markets) - Shares of OmniVision Technologies Inc (OVTI.O) rose as much as 16 percent on Friday, as the camera sensors supplier recovered from a big contract loss with Apple Inc (AAPL.O) to forecast better-than-expected quarterly results.

OmniVision, whose products are used in HTC Corp's (2498.TW) EVO and Motorola Mobility Holdings Inc's (MMI.N) Droid X, also reported strong third-quarter sales.

At least two brokerages raised their price targets on OmniVision's stock, saying the company was on track to recapture lost market share in the smartphone segment.

Robert W. Baird & Co, which has a "neutral" rating on the stock, said Apple's iPad could boost OmniVision revenue by 30 percent over the sensor maker's revenue from iPhone last year.

Strong demand for tablets during the holiday season drove shipment volumes during the third quarter, the company said on a post-earnings conference call with analysts on Thursday.

The company's 8-mega pixel camera sensors should be a major revenue and earnings drivers, said Canaccord Genuity, which rates the stock "buy."

Shares of Omnivision, which pioneered imaging sensors that use both sides of the chip to deliver better quality in a smaller-sized camera, rose to a four-month high of $18.60 on the Nasdaq.

(Reporting by Monika Shinghal in Bangalore; Editing by Don Sebastian)

Monday, August 28, 2017

Starbucks raises outlook, pins hopes on the affluent

Starbucks raises outlook, pins hopes on the affluent

Stock Market Predictions

LOS ANGELES (Global Markets) - Starbucks Corp (SBUX.O) raised its fiscal year forecast above Wall Street's estimates, banking on its relatively well-heeled customers visiting more often and shaking off price increases.

The world's biggest coffee chain, which is coming off a years-long restructuring that involved closing poorly performing stores to rekindle growth, on Thursday reported better-than-expected fiscal third-quarter earnings.

Seattle-based Starbucks joined a raft of other premium-positioned companies -- including burrito chain Chipotle Mexican Grill (CMG.N) and Whole Foods Market Inc (WFM.O) -- in reporting out-sized same-store sales gains.

"The higher end is alive and well," said RBC Capital Markets analyst Larry Miller. Steakhouses and seafood restaurants also had strong results, he said.

"Reports of the consumer's demise were greatly exaggerated," said Miller, who added that McDonald's Corp (MCD.N) and other restaurant chains showed surprising health during the latest quarter.

Sales at Starbucks' U.S. cafes open at least 13 months, and which yield about four-fifths of its revenue, jumped 8 percent in its fiscal third-quarter ended July 3. Analysts expected a 5.3 percent increase.

Traffic in its home market climbed 6 percent, while average spending per visit rose 2 percent.

Chief Financial Officer Troy Alstead told Global Markets menu price increases accounted for the bigger part of the rise in spending, but customers were also buying more food.

Starbucks targets more affluent consumers than the typical U.S. fast-food chain. Those customers have fared better than their lower-income counterparts as the U.S. economy sputters, and they have resumed spending on discretionary items like $4 lattes and organic foods.

CATERING TO THE WELL-HEELED

Starbucks shares, which have benefited from a massive restructuring that slashed costs and shut over 900 poorly performing cafes around the world, are up 60 percent from a year ago. On Thursday, it said it would be adding a net 800 stores globally in 2012.

That expansion comes despite high unemployment and the uncertain outcome of the U.S. debt ceiling debate weighing on the minds of consumers.

Upscale diners seem less wary. Chipotle, which offers naturally-raised meats and organic produce where possible, saw same-restaurant sales jump 10 percent in the most recent quarter. Whole Foods, top U.S. seller of organic food products, said its identical-store sales jumped 8.1 percent.

The gains at Starbucks, Chipotle and Whole Foods outpaced a 4.5 percent rise in U.S. same-restaurant sales at McDonald's, one of the restaurant industry's top performers and the leader among fast-food chains.

"Our results are a little bit in contrast to what I still believe to be an uncertain and fragile environment out there," Alstead said.

Wall Street also was upbeat about the coffee chain's new partnership with Green Mountain Coffee Roasters Inc (GMCR.O), whose popular Keurig machines control about 80 percent of the fast-growing North American single-serve brewing segment.

The companies plan to begin selling Starbucks coffee and Tazo tea for Keurig machines at wholesale clubs, drugstores and supermarkets in North America this autumn, in time for the important winter holiday season.

Alstead said the partnership would generate 3 cents to 5 cents in incremental earnings per share in fiscal 2012.

Green Mountain shares soared more than 16 percent on Thursday, one day after it said that deals with the likes of Starbucks and newly public Dunkin' Donuts (DNKN.O) would brew up bigger profits.

Seattle-based Starbucks boosted its earnings forecast for this fiscal year to $1.50-$1.51 per share from $1.46 to $1.48 a share, previously. Analysts, on average, were expecting a fiscal 2011 profit of $1.50 per share.

It also forecast a 15 percent to 20 percent increase in earnings per share in 2012 and a 10 percent increase in revenue. The forecast is based on mid-single digit comparable store sales growth and the opening of net 800 new stores.

The 2012 forecast includes the expected contribution from the Green Mountain deal.

Starbucks' third-quarter net income rose 34 percent to $279.1 million, or 36 cents per share, beating analysts' average estimate by 2 cents per share, according to Thomson Global Markets I/B/E/S. Revenue rose 12 percent to $2.93 billion.

Shares were up 1.3 percent to $40.50 in after-hours trade. That gain came after the shares added 2.6 percent in regular Nasdaq trade on Thursday.

(Editing by Edwin Chan, Bernard Orr)

Jury says Exxon must pay $1.5 billion for leak

Jury says Exxon must pay $1.5 billion for leak

Stock Market Predictions

TOWSON, Maryland (Global Markets) - A jury in Maryland awarded plaintiffs suing oil company Exxon Mobil about $1.5 billion for a 2006 leak at a gasoline station, according to court documents.

Verdicts released by the Baltimore County Circuit Court on Friday showed the jury awarded the 160 plaintiffs in the case against the oil company more than $1 billion in punitive damages.

That figure is in addition to the $495 million in compensation that the jury awarded the plaintiffs for damage caused by the 26,000 gallons of gasoline that leaked from a pressurized line in Jacksonville, Maryland over 37 days in January and February in 2006, according to media reports.

Exxon Mobil said the company would appeal the verdict.

"As we've stated throughout the last five years, we sincerely regret this unfortunate accident. We apologize to the Jacksonville community and have devoted significant resources to clean-up, recovery and remediation activities," a spokeswoman said in an emailed statement.

The damage award is far higher than the $900 million that Exxon Mobil paid in civil penalties for lawsuits related to the 1989 Exxon Valdez oil spill in Alaska's Prince William Sound, although the company has said it spent more than $4 billion on clean-up costs and total legal settlements.

In the Valdez case, Exxon successfully appealed a jury's original ruling that called for it to pay $5 billion in punitive damages, and eventually had that amount cut to about $500 million.

The Maryland case stemmed from a fuel leak that reached the groundwater in the community, which relies on private wells for drinking water.

The company has said it already had spent more than $46 million on the spill's cleanup and been fined $4 million by the state.

The case is the second related to the spill. The jury in the first lawsuit, which involved fewer plaintiffs, awarded $150 million in compensatory damages. Exxon Mobil has appealed that verdict.

Shares in Exxon Mobil closed up 66 cents to $82.04 on the New York Stock Exchange, in a broadly higher market.

(Additional reporting by Matt Daily in New York; Editing by Derek Caney)

Sunday, August 27, 2017

Analysis: Big name investors, funds bet on Rite Aid recovery

Analysis: Big name investors, funds bet on Rite Aid recovery

Stock Market Predictions

NEW YORK (Global Markets) - Rite Aid Corp (RAD.N), a perennial laggard U.S. drugstore chain, is enjoying something of a comeback, enticing some big-name hedge funds to buy shares on the bet that a turnaround will send them rising.

Debt-saddled, money-losing Rite Aid is the third-largest U.S. drugstore chain, with nearly 4,700 stores. After years of declines, same-store sales have risen in its three most recent quarters. On Thursday, Rite Aid said second-quarter same-store sales were up 2.2 percent.

The improvement, however modest, is fueling speculation that Rite Aid shares, which have been trading for less than $1.50 for nearly a year and a half, have hit bottom.

New initiatives, like a customer loyalty program and smaller stores, are gaining traction with shoppers, and the company's CEO of 14 months, John Standley, is well regarded by investors.

Shares in Rite Aid have fallen 84 percent in roughly four years and were as low as 20 cents in 2008.

"You could see the business doing a lot better; you could see the stock doing a lot better " one large shareholder said, speaking on condition of anonymity. His fund has tripled its shares in Rite Aid in recent months.

Even a modest rise in shares could yield a big payday for investors, many of whom were bondholders who bought debt on the cheap in 2008 and have converted that into equity.

Investors that recently have taken equity in Rite Aid or added to what they already owned include: Leonard Green & Partners LP, Diamondback Capital Management, Perry Capital LLC, Standard Pacific Capital and billionaire investor George Soros, whose fund reported a small stake in May.

Canadian retailer Jean Coutu Group (PJCa.TO), Rite Aid's biggest shareholder since it sold its U.S. drugstores to Rite Aid in 2007, when Rite Aid shares were worth $6.70, said in July it would shed 10 percent of its 26.8 percent stake. Coutu also said it intends to remain the largest investor.

NOT A TAKEOVER TARGET ... YET

A major draw for investors is Rite Aid's potential as a takeover target, despite its market value of just $1 billion.

Still, Rite Aid will not be in play until it makes serious inroads into its enormous debt load.

For now, the company could keep selling or shutting some stores. In recent years, rival Walgreen Co (WAG.N) has bought more than 20 stores from Rite Aid.

Analysts say Walgreen and CVS Caremark Corp (CVS.N), the top two drugstore chains, could particularly be drawn to Rite Aid's attractive portfolio of stores in California and Pennsylvania, while Wal-Mart Stores Inc (WMT.N) could be tempted by its stores' sizes to help expand its new smaller-format business.

Rite Aid's $6 billion long-term debt has been an albatross, leading to severe liquidity crises in 2000 and 2008. The company's interest expenses of more than $500 million a year in the last two fiscal years effectively wiped out any profit.

"The biggest obstacle (to a deal) is their debt load," said a retail investment banker, who declined to be named because he was not authorized to speak to the media.

Rite Aid's debt is seen as so risky that on Thursday it cost 29 times more to protect $10 million of Rite Aid debt for five years than Walgreen debt based on credit default swap trades, according to Markit. Walgreen CDS are thinly traded.

Although Leonard Green, the private equity firm that has done a number of leveraged buyouts of retail chains, is the No. 2 investor in Rite Aid and holds a seat on its board, it is unlikely to make a bid for the company, a source close to the situation said. One reason is that Rite Aid largely leases its stores rather than owning them.

Leonard Green did not return a request for comment. Rite Aid declined to comment for this article.

In addition, Rite Aid's unionized workers would deter Wal-Mart, which has no U.S. unions, industry experts said.

Despite the debt load, a Chapter 11 bankruptcy protection filing is not considered an imminent possibility. Rite Aid has no major maturities coming due until 2014 and generates ample cash from $25 billion in annual sales.

TOUGH TURNAROUND

Rite Aid still faces a number of challenges.

It commands just 11.4 percent of the U.S. market, compared with 27.1 percent for CVS and 32 percent for Walgreen, according to IBISWorld. Its same-store sales gains have been far smaller than its profitable, deep-pocketed rivals.

Many of its stores are not very productive, and sit in undesirable locations under landlords with tough lease terms.

Last fiscal year, Rite Aid stores generated sales of about $534 per square foot, compared with $822 at CVS and $802 at Walgreen, according to data in the companies' annual reports.

"It's all about sales per square foot," said Andrew Wolf, an analyst with BB&T Capital Markets.

CVS and Walgreen have the means to invest heavily in sprucing up their stores, expanding their worksite wellness clinics and offering more fresh food.

Rite Aid, despite being handcuffed by its debt, also has managed to try new concepts, but analysts say it lags rivals.

"One of the issues Rite Aid has had for a while is that it's not a first mover in the industry," said IBISWorld healthcare analyst Sophie Snyder. Snyder believes Rite Aid's market share will hold steady but that Walgreen and CVS will keep gaining customers.

The next few years will be decisive for Rite Aid.

"We have at least four years or more of what we call runway, the time for the business to perform and rebound," the shareholder said.

(Reporting by Phil Wahba and Nadia Damouni in New York, and Jessica Hall in Philadelphia; editing by Gunna Dickson)

Hansen shares rise on Q3 sales beat

Hansen shares rise on Q3 sales beat

Stock Market Predictions

(Global Markets) - Shares of Hansen Natural Corp (HANS.O) rose as much as 6 percent, a day after the company posted quarterly sales that beat analysts' estimates, driven by solid growth of its Monster energy drink brand.

Sales in October were about 31 percent higher than last year, the company said on a conference call with analysts.

Longbow Research analyst Alton Stump said October sales growth accelerated from reported third-quarter revenues, implying fourth-quarter revenues will beat estimates, driving up the stock today.

On Thursday, the company had reported a lower-than-expected quarterly profit sending shares down as much as 5 percent after the bell.

"While EPS came in a penny below the Street, the three focal points to the story -- sales growth, international expansion, gross margin -- didn't skip a beat," SunTrust Robinson Humphrey analyst William Chappell wrote in a note.

Hansen said it is continuing with its strategy to expand the Monster Energy brand into new international markets, with additional launches in South America, Central and Eastern Europe, and Asia planned for the near future.

Net sales for the third quarter rose 24.4 percent to $474.7 million, above analysts' estimates of $463.7 million.

Stifel Nicolaus analyst Mark Astrachan said demand for Monster Energy remains robust and it continues to anticipate sustained low double-digit sales growth for Hansen over the next 3-5 years.

Shares of the company, which competes with privately held Red Bull, were trading up at $95.50 on Nasdaq on Friday noon.

(Reporting by Chris Jonathan Peters in Bangalore;Editing by Supriya Kurane)

Saturday, August 26, 2017

Overstock.com posts surprise qtrly loss on higher costs

Overstock.com posts surprise qtrly loss on higher costs

Stock Market Predictions

(Global Markets) - Overstock.com Inc (OSTK.O) posted a quarterly loss while analysts had predicted a profit, hurt by higher costs, sending the discount e-retailer's shares down 8 percent in premarket trading.

The company, which saw its sales stumble after Google Inc (GOOG.O) penalized it for breaching some of search giant's guidelines in February last year, has been trying to attract online shoppers by spending more on advertising and marketing.

It has also been trying to woo shoppers with its Club O loyalty program to move away from less revenue generating coupons and other promotions.

The company said sales and marketing costs rose 10 percent and general & administrative and technology expenses shot up 24 percent in the quarter.

Overstock.com posted a fourth-quarter loss of $3.4 million, or 15 cents a share, compared with earnings of $14.9 million, or 63 cents a share, in the year ago period.

The company, which is attempting to rebrand itself from Overstock.com to O.co, said revenue fell 10 percent to $314.1 million in the quarter.

Analysts, on average, had expected the company to earn 45 cents a share, on revenue of $377.6 million, according to Thomson Global Markets I/B/E/S.

Overstock.com shares were trading at $6.32 in premarket trading. They had closed at $6.88 on Thursday on the Nasdaq.

(Reporting by Arpita Mukherjee in Bangalore)

Shutterfly jumps on acquisition of Kodak's photo sharing site

Shutterfly jumps on acquisition of Kodak's photo sharing site

Stock Market Predictions

(Global Markets) - Shares of Shutterfly Inc (SFLY.O) jumped as much as 18 percent on Friday, after the photo-sharing services company said it would acquire bankrupt Eastman Kodak Co's (EKDKQ.PK) online photo services business for $23.8 million.

Kodak said the deal with Shutterfly followed a "stalking horse" bid -- a starting bid or minimally accepted offer that other bidders must surpass in a court-supervised auction -- from the web-based personal publishing service.

Analysts expect the deal to boost Shutterfly's earnings in 2012 and solidify its position in the online print market.

"By taking out the number three player with an estimated about $70 million in FY11 revenues, Shutterfly will eliminate a sizable competitor and solidify its position as the largest player in online consumer print," Jefferies said in a note.

Kodak is the number three player in the sector behind Shutterfly and Hewlett Packard's (HPQ.N) Snapfish.

Kodak Gallery -- which enables users to store and share their own images and create custom printed photobooks, cards and albums -- has more than 75 million users.

"The deal not only offers Shutterfly a healthy base of new customers at an attractive acquisition price, but also a group of photo enthusiasts that should adapt well to Shutterfly's platform and product offering, and present new cross-selling opportunities," Baird Equity said.

The brokerage estimates Kodak's Gallery business to generate revenue between $50 million and $70 million.

Shares of the Redwood City, California-based company, which have lost about half their value since their year high in April, jumped 18 percent to $31.84 Friday on the Nasdaq. (Reporting by Rachana Khanzode in Bangalore; Editing by Saumyadeb Chakrabarty)

Friday, August 25, 2017

Be trusted to stock market predictions

We constantly hear predictions on what next for the stock market, house prices and much more (some of them are reported on the site). Here, TiM gives its a 30-second view on who you should trust...
So which predictions can you trust?
Be trusted to stock market predictions is very few. Many experts and pundits have a vested interest in talking a particular market up or down. Or sometimes it's nothing more than a sub-conscious bias.

Most fund managers, for instance, operate in a culture where stock markets are king. And we don't need to tell you that estate agents feel compelled talking up the property market (many of them honestly believe what they're telling you).

You may begin to notice the strange coincidence that many of stock market predictions are based on the recent average returns: an 'expert' in his field subconsciously knows what returns should be and merely applies it to the future.

So according to the FSA, the best guidance for stock market returns is around 6% or 7%. You'll therefore find that most of the FTSE 100 predictions for 2010 will suggest a rise from around 5,500 to around 5,900, which is a 7% rise.

There's some guilty parties here and even many readers are guilty of the same - see here.

Every year that I've covered stock market predictions, the most popular answer nearly every year is 7% up.

What about those who have made correct calls before?
Those are the ones that This is Money is most interested in. Our aim is to tell our readers when the world's most successful investors give their opinions - the likes of billionaires such as Warren Buffett or George Soros or fund managers with a proven track record of getting it right, such as Anthony Bolton or Neil Woodford.

The next most important views are from those who have made correct calls, but have no track record of performance to prove it. They deserve a little more caution. In this pack we'd include US economist Nouriel Roubini who saw the financial crisis of 2008 coming well in advance.

It's worth noting that Roubini has been warning the stock market rally would end from the moment it began in March 2008. He's been wrong so far, but may still be proved right.

So they've got it right once, but might not do so again?
That's bang on. Some market calls come right more by luck than judgement. The bottom line is that markets, by nature, are erratic and unpredictable. Nassim Taleb explains this well with his Black Swan Theory - a Black Swan event is when a rare, impossible to predict event occurs.

He has a book of the same name and another called Fooled by Randomness . That titles sums up the sort of cyncism all readers should arm themselves with when reading predictions on financial publications (including this one).

See also why stock market predictions are so often misses the...

India is world's third best performing market in the world during 2009

India came on the third best performing market in the world in 2009 just behind Russia and Brazil.

While the BSE Sensex returned 81% during 2009, the Brazilian market gave investors a slightly higher return of 82.7% and the Russian market offered investors a handsome return of 111.6%. During 2009. The broad market as measured by the movement of BSE Sensex, gained by 81% from December 31,2008 to December 31, 2009.This return was higher than the eleven major world indices such as Nasdaq Composite Index, S&P 500 Index, Dow Jones Industrial Average and Nikkei 225.

The Dow Jones Industrial Average ended higher by 1772.11 points (20.2%) at 10548.50 on December 30, 2009. Nasdaq composite index ended higher by 714.25 points at 2291.28. S&P 500 also ended higher by 223.17 points at 1126.42 on Decemeber 30, 2009. The Nikkei 225 of Japan appreciated by 19% during 2009, buoyed by trading firms such as Mitsui & Co after gains in oil & metals prices, while automakers also edged up. Shanghai SE Composite Index gave 79.2% return in 2009 which is next to India despite higher GDP growth. According to Bloomberge UTV Stock Market News, Beijing will stick to its loose monetary stance, but will try to be more flexible in implementing its policies, People's Bank of China Governor Zhou Xiaochuan said recently.

In Indian Stock Market - Hindustan Tin Works stock has given 600% return during 2009.

Best Script to Buy During 2010.
- Bihar Tube
- Surya Roshni
- Sukhjit Starch and Chemicals

Thursday, August 24, 2017

Darden eyes changes at Olive Garden, shares up

Darden eyes changes at Olive Garden, shares up

Stock Market Predictions

LOS ANGELES (Global Markets) - Darden Restaurants Inc (DRI.N) is starting a new round of cost cuts and revamping its marketing and promotions to boost results at its Olive Garden chain, which generates about half its sales.

Darden will adopt a pricing tactic it used to turn around results at its Red Lobster chain, executives said on Friday, as new data suggested the economy may not be as weak as feared.

Bernstein Research analyst Sara Senatore said recent economic jitters had casual dining investors on edge and Friday's manufacturing data likely had a big part in rallying the shares of Darden and Brinker International Inc (EAT.N).

Darden, which also operates the LongHorn Steakhouse chain, saw its stock rise nearly 5 percent while Brinker, parent of Chili's Grill & Bar, was 6 percent higher in early afternoon trading.

Results from Olive Garden lately have disappointed investors. In the fourth quarter ended on May 29, the chain was the only one of Darden's "Big Three" brands to show a fall in monthly visits.

Featured dishes and advertising campaigns at Olive Garden recently have failed to hit their mark, and the company is making changes, executives said on a conference call with analysts.

"They're going to emphasis more price certainty" by picking one price for limited time offers, said Miller Tabak & Co analyst Stephen Anderson.

Darden used that tactic at Red Lobster, which just turned in its first quarterly traffic gain in 15 consecutive quarters.

"It's the kind of strategy we think has helped right the ship at Red Lobster," said Anderson.

The company said the first month of its fiscal year was a "very solid start," and Drew Madsen, Darden's president and chief operating officer, struck a cautiously optimistic tone during the company's conference call.

"We are encouraged by the gradual and sustained improvement in our industry and we anticipate continued modest recovery during fiscal 2012," Madsen said.

Darden said it is getting more of its traffic from diners with incomes above $75,000. While a bigger share of its customers is coming from that well-heeled group, the company said all of its diners were budgeting carefully and seeking value.

Orlando, Florida-based Darden, one of the restaurant industry's top performers, also plans to eliminate $65 million to $75 million in costs this year.

Food costs are rising for all restaurant operators, but Darden now expects its food inflation to be in the lower half of its forecast of 5 percent to 5.5 percent.

The company has locked in food costs for the first half of this fiscal year, said Chief Financial Officer Brad Richmond, who expects food inflation to ease in the second half.

On Thursday, Darden reported a fiscal fourth-quarter profit that matched Wall Street estimates.

It forecast full-year earnings of $3.82 to $3.92 per share, above analysts' expectations of $3.81, according to Thomson Global Markets I/B/E/S. That forecast includes an expected 2.5 percent increase in combined same-restaurant sales at Olive Garden, Red Lobster and LongHorn Steakhouse.

Darden bought 2.3 million shares of its common stock during its fourth quarter.

Its board also declared a quarterly dividend of 43 cents per share, a 34 percent increase from the company's previous quarterly dividend.

(Reporting by Lisa Baertlein; Editing by Lisa Von Ahn and Tim Dobbyn)

Emulex falls as outlook underlines growth worries

Emulex falls as outlook underlines growth worries

Stock Market Predictions

(Global Markets) - Shares of Emulex Corp (ELX.N) fell as much as 9 percent, a day after the network equipment maker warned of slowing sales and projected a weaker-than-expected first quarter.

At least three brokerages slashed their target price on the company's stock on Friday, as the outlook underscored the weakness in the broader storage and networking market.

For the first quarter, the company said it expects to earn 10-12 cents a share on revenue of $114-$118 million. Analysts on average were looking for a 15 cent a share profit on $123.4 million in revenue, according to Thomson Global Markets I/B/E/S.

"The company is an important component maker for data center network connectivity, but we point out Emulex's revenue trends appear to be trailing broader server and storage trends," said J.P. Morgan analyst Mark Moskowitz, who cut his target price on the company's stock to $9.

Costa Mesa, California-based Emulex, whose main customer IBM (IBM.N) contributes a third of its sales, makes network infrastructure for storage and data center customers. The company competes with QLogic (QLGC.O) and Brocade communications (BRCD.O).

Shares of the company, fell as much as 9 percent in early trading. They were down 6 percent at $6.85 on Friday on the New York Stock Exchange.

(Reporting by Himank Sharma in Bangalore; Editing by Saumyadeb Chakrabarty)

Wednesday, August 23, 2017

China Mobile to set up finance unit with $780 million

China Mobile to set up finance unit with $780 million

Stock Market Predictions

HONG KONG (Global Markets) - China Mobile Ltd (0941.HK), the world's biggest mobile operator, said on Friday it will set up a finance unit with 5 billion yuan ($780 million), in a move that could disappoint shareholders hoping for a dividend hike.

The new unit would be called China Mobile Finance and would engage in financial services such as insurance agency business and inter-bank lending, China Mobile said in a statement posted on the Hong Kong stock exchange.

"It has become increasingly important to find a solution to further strengthen the internal funds management and better control liquidity risks," China Mobile Chairman Wang Jianzhou said in the statement.

China Mobile's wholly owned subsidiary Beijing Mobile will contribute 4.6 billion yuan to the new company, with China Mobile's parent company CMCC forking out the remaining 400 million yuan, the company said.

This is the second time China Mobile is associating with the financial services sector, having spent about $6 billion in March last year to buy a 20 percent stake in the mid-sized Pudong Development Bank (600000.SS).

Then, China Mobile had said the purchase was necessary to help it develop its electronic mobile payment system by making it easier to process the money it receives.

China Mobile is one of the world's most cash-rich companies with over $45 billion in cash sitting in its bank accounts at the end of 2010, prompting calls from some shareholders for it to raise its dividend payout ratio.

The company has so far refused to do so, saying it operates in a fast-growing market and needs the money to fund its future growth strategies. China is the world's biggest mobile phone market with over 900 million users at the end of June. [ID:nL3E7HL04W]

"The cash China Mobile has is probably enough to buy up some companies," said Bertram Lai, an analyst at CIMB Securities.

"There were calls for the company to raise its dividend payout, but that's cooled off as investors get used to the reality that China Mobile probably won't."

China Mobile shares have fallen about 10 percent in the past 12 months, worse than the 7 percent decline on the benchmark Hang Seng Index .HSI.

(Reporting by Kelvin Soh; Editing by Chris Lewis and Muralikumar Anantharaman)

Prada's $2.1 billion IPO makes modest HK debut

Prada's $2.1 billion IPO makes modest HK debut

Stock Market Predictions

HONG KONG (Global Markets) - Italian fashion house Prada SpA (1913.HK) posted slim gains in its $2.14 billion IPO debut in Hong Kong, defying expectations for a weak start as investors who couldn't buy into the IPO snapped up the stock in a buoyant market.

The Milan-based company is the second to post first-day gains among the billion dollar-plus IPOs in Hong Kong this year, after MGM China (2282.HK), which rose a tepid 1.8 percent.

Many other global brands are exploring options to list in Hong Kong and Prada's performance is critical in attracting such companies to the world's hottest IPO market.

"It may give an idea to other potential brands listing not to price issues too aggressively," said Conita Hung, head of equity research of Delta Asia Financial.

"Consumers are willing to pay a very high premium chasing after brands, but it's not the case for investors. Investors are concerned about reasonable valuation and pricing."

Prada shares closed 0.3 percent higher at HK$39.60 on Friday, after trading as high as HK$40 earlier in the session.

The maker of luxury bags and Miu Miu dresses priced its $2.14 billion initial public offering at HK$39.50 a share, the bottom of a revised indicative range.

Prada's small gain surprised some analysts who attributed this in part to Friday's 1.9 percent rise in the benchmark Hang Seng Index .HSI.

Both commodities trader Glencore (0805.HK) and luggage maker Samsonite International SA (1910.HK) fell on their first day.

Some of the demand for Prada shares on Friday came from fund managers who didn't participate in the IPO, also helping lift the stock.

Prada's IPO received bids for just half the shares on offer for Hong Kong retail investors, compared with more than 2,000 times oversubscription for the IPO of handbag retailer Milan Station Holdings Ltd (1150.HK), the most popular offering in 2011.

Samsonite had demand worth 1.23 times the volume of shares on offer.

'NEW WAVE'

The move by consumer-focused companies such as Prada to list in Hong Kong is part of a trend to raise brand awareness in China, the world's fastest growing luxury market.

"We're opening a new wave for the luxury goods sector," Chief Executive Patrizio Bertelli said at a ceremony at the Hong Kong stock exchange.

Bertelli handed a glass-encased, bright-red Prada leather handbag during the traditional ceremony at the exchange, receiving a glass bull from Ronald Arculli, chairman of Hong Kong Exchanges & Clearing Ltd (HKEx) (0388.HK).

"We're positive that the greater China region is going to be one of the most interesting prospects in the luxury industry," Bertelli said, adding that the first listing of an Italian company was "a landmark" for the exchange.

Prada had originally set an indicative price range of HK$36.50 to HK$48 per share, before narrowing it to between HK$39.50 and HK$42.25 each last Thursday.

Prada and shareholders Prada Holding BV and Intesa Sanpaolo SpA (ISP.MI) sold 423.3 million shares in the offering, raising HK$16.72 billion ($2.14 billion).

In a statement on Friday, Intesa said its net income will be boosted by 255 million euros ($365.3 million) from the Prada stake stale. The bank slashed its stake in Prada to 1 percent from 5 percent.

In Italy, luxury leather goods maker Salvatore Ferragamo SpA priced its Milan initial public offering on Thursday at 9 euros a share.

Prada, set up in 1913 by Mario Prada as a business selling leather bags, trunks and silverware to the European elite, has become a global fashion empire, with 319 directly operated stores, a third of which are in Asia-Pacific.

The company received tepid demand from retail investors for its IPO as potential buyers were put off by having to pay Italian capital gains tax.

That, coupled with choppy equity markets, had led Prada shares to fall in grey market trading. Phillip Securities Group said in a report on Thursday night that the stock had fallen 2.9 percent to HK$38.35, pointing to a weak start on Friday.

The IPO valued Prada at about $13 billion, compared with the nearly $80 billion market capitalization of LVMH (LVMH.PA), $28.5 billion for Hermes International SCA (HRMS.PA) and $21 billion for PPR SA (PRTP.PA).

At the revised guidance, Prada would trade at a price to-earnings ratio of 22.8-24.4 times, more in line with global rivals.

(Additional reporting by Donny Kwok; Editing by Chris Lewis and Vinu Pilakkott)

Tuesday, August 22, 2017

Elpida shares jump on bargain hunting

Elpida shares jump on bargain hunting

Stock Market Predictions

TOKYO (Global Markets) - Shares in Elpida Memory Inc (6665.T), the world's No.3 maker of dynamic random access memory chips, gained the most in two years on Friday amid a rise in DRAM spot prices and a view among investors that the stock had fallen too far in recent trade.

The shares, which rose 17.6 percent to 535 yen, had shed more than 40 percent in the month to Thursday's close, battered by Elpida's move to raise $990 million to finance its expansion in cutting-edge chips for smartphones and tablet PCs.

The stock, which hit a 2- year low this week, had seen its 14-day relative strength index drop to 21 as of Thursday, below the 30 line where stocks are deemed oversold.

A trader at a foreign brokerage said that a number of factors were lifting the shares, including Wednesday's news about Abu Dhabi state-owned fund Aabar joining South Korea's STX Corp (011810.KS) to bid for Hynix Semiconductor (000660.KS) and a rise in chip spot prices.

"Heavily shorted Elpida is being bought back on hopes that there will be some changes in the DRAM industry," he said.

The percentage of shares outstanding on loan at Elpida stood at a still-high 7.8 percent as of August 24 at 459 yen, down from a peak of 19.5 percent at the end of July.

Elpida has repeatedly disappointed long-term investors by raising capital and diluting shares to stay competitive against bigger South Korean rivals Samsung Electronics (005930.KS) and Hynix, which have more scale.

To stay relevant, it aims to take the lead in advanced 25-nanometre chips, which pack more power onto each sliver of silicon than existing DRAM chips, hoping to gain an edge in mobile memory used in tablet PCs and smartphones.

Friday's jump was the biggest single-day jump in two years for the chipmaker, which has lost 90 percent since its shares peaked at the end of 2006. Trading volume hit a six-week high.

Weak chip prices have weighed on chipmakers, with even market giant Samsung warning of fragile consumer demand.

Spot prices for DDR3 2Gigabit type DRAM chips were up 3.6 percent to $1.01 in Friday afternoon trade according to DRAMexchange, but analysts say prices are well below cost for many chip makers.

Elpida, like No.2 NAND flash chipmaker Toshiba Corp (6502.T), hopes Apple Inc's (AAPL.O) patent war with supplier Samsung will mean more sales to the maker of iPhones and iPads, sources have said.

(Reporting by Tokyo Newsroom; Editing by Nathan Layne and Chris Gallagher)

Harbin CEO backs $750 million buyout offer, shares rise

Harbin CEO backs $750 million buyout offer, shares rise

Stock Market Predictions

BANGALORE (Global Markets) - Chinese electric motor maker Harbin Electric Inc (HRBN.O) said its chief executive and Abax Global Capital had reaffirmed their offer to take the company private for $750 million, after a research firm raised doubts about the deal going through.

Shares of the company rose 10 percent to a high of $17 on Friday on Nasdaq, but were still much below the offer price of $24 a share, indicating investor skepticism.

CEO Tianfu Yang made the offer in last October but is yet to make a formal bid.

The recent stream of bad news involving Chinese companies listed on U.S. exchanges could also be weighing on Harbin's stock, which has dropped 38 percent since the offer.

Shares of several U.S.-listed Chinese companies, including Longtop Financial Technologies (LFT.N) and China Electric Motor Inc (CELM.O), were hammered over issues ranging from regulatory probes to potential accounting frauds.

Harbin's statement comes a day after Citron Research raised doubts about a $400 million credit agreement between Yang and China Development Bank to finance the buyout.

Citron said the agreement, revealed by Harbin earlier on Thursday, did not mention anything about a collateral for the credit facility and that the loan depended on personal guarantees.

However, Maxim Group's analyst Echo He said the agreement was a significant step forward for the leveraged buyout.

"We have learned that the loan is collateralized by Harbin's entire asset or equity ownership," analyst He said in a note.

Yang, Abax and their respective affiliates collectively own about 40.72 percent of Harbin's shares.

CEO Yang had first made the offer to take the company private with Baring Private Equity Partners.

Soon after, Baring backed out as a buyout partner and said it would help with the financing, and this May, Yang teamed up with Abax Global Capital.

Harbin said a special committee of its board has been formed to evaluate the proposal.

High-growth U.S.-listed Chinese companies have been exploring the option of going private and relisting in Asia to get better valuations.

Harbin shares were trading up 5 percent at $16.29.

(Reporting by Divya Sharma in Bangalore; Editing by Don Sebastian and Saumyadeb Chakrabarty)

Monday, August 21, 2017

Mizuho Financial to cut 3000 jobs: report

Mizuho Financial to cut 3000 jobs: report

Stock Market Predictions

(Global Markets) - As part of the restructuring related to the merger of its two banking units, Mizuho Financial Group Inc (8411.T) will cut 10 percent of its workforce, or 3,000 jobs, by end of fiscal 2015, The Nikkei said.

The merger will help cut the combined bank's annual expenses, which currently stands at about 800 billion yen ($10.38 billion), by about 40 billion yen ($519 million) by fiscal 2015, the business daily said.

The financial group's board is set to approve the merger on Monday, where Mizuho Corporate Bank will absorb its retail counterpart and the combined entity will be known as Mizuho Bank, the Nikkei said.

($1 = 77.070 Japanese Yen)

(Reporting by Sunayan Bhattacharjee in Bangalore; Editing by Supriya Kurane)

Debt buyback a bullish bet for LyondellBasell

Debt buyback a bullish bet for LyondellBasell

Stock Market Predictions

NEW YORK (Global Markets) - Chemical maker LyondellBasell's (LYB.N) plan to buy back nearly $2.8 billion in debt and pay a special dividend nearly the same size is a bullish bet that demand for commodity chemicals will recover from a recent soft patch and rally the rest of the decade.

The company, which exited Chapter 11 bankruptcy protection last year, said late on Thursday it would launch a tender offer for $1.47 billion of 8 percent notes due in 2017 and $1.32 billion of 11 percent notes due in 2018.

News of the buyback and dividend were widely applauded on Wall Street, where shares of LyondellBasell were up 10 percent at $30.13 in midday Friday trading.

Paying off the debt years ahead of schedule -- and not keeping cash around for a rainy day -- could be seen as a risky move, especially given the potential for another recession in the United States or Europe, the company's two largest markets.

But given low interest rates, it just makes sense to slash the debt now, said Ed Mally, a chemical industry analyst with Imperial Capital.

"Taking out this very expensive debt is not only a positive sign on their view about their prospects, but also a positive sign on their earnings and cash flow," Mally said.

The company, which is technically based in the Netherlands but is run out of Houston, has been generating oodles of cash in the past year, with roughly $4.69 billion in the bank.

Revenue jumped 34 percent in the second quarter from the same period last year.

The buyback will push the company's long-term debt down to roughly $2.8 billion. It should also cut LyondellBasell's annual interest costs by 32 cents a share, a big boost for the company's earnings, Jefferies analyst Laurence Alexander said.

There isn't a comparable earnings per share figure for 2010 -- the company had just exited bankruptcy -- but in the second quarter LyondellBasell earned $1.49 per share, excluding one-time items.

LyondellBasell also said it will issue a $2.6 billion special dividend -- roughly $4.50 per share -- soon, depending on market conditions, using cash and new debt. The company already pays a 20-cent quarterly dividend.

"As we are facing these uncertain economic times, the fact that a company comes out and announces a $2.6 billion special dividend just tells you how confident it is in its cash flow generating abilities," said Hassan Ahmed, a chemical industry analyst with Alembic Global Advisors.

BULLISH FORECAST

Prices for ethylene, one of LyondellBasell's main products and a key building block for more complex chemicals, have softened in the past three months partly due to economic fears.

Ethylene and other commodity chemicals are closely tied to economic health.

In good times, people buy more clothes, toys, cars and other goods made with the chemicals.

But in bad times, even the largest companies can be brought to their knees. Dow Chemical (DOW.N), for instance, was burned by a drop in commodity chemical demand three years ago and has quickly been moving into specialty chemicals.

Indeed, in early 2009 LyondellBasell entered bankruptcy precisely because demand evaporated as the financial crisis collapse roiled the globe.

Chief Executive Jim Gallogly, who joined the company just after the bankruptcy filing, wants to stay in -- and dominate -- the commodity chemical business, which tends to ebb and flow every five or six years.

The cycle hit a bottom in 2009, and many in the chemical industry expect it to peak in 2014 or 2015.

Part of Gallogly's exuberance has to do with expanded production from North American shale formations, which has made the price of natural gas much cheaper then elsewhere in the world. That has given LyondellBasell a cost advantage over global rivals and strong cash flow.

Europe has not developed its natural gas shale formations, partly because of regulatory and environmental resistance, effectively handing U.S. chemical producers a global advantage.

Most of Europe's chemical producers use crude oil-derived naphtha to make the building blocks for common plastics.

Chemical prices are set globally by naphtha-based producers. That lets LyondellBasell and its peers charge the higher industry price and bank the margins from using cheap natural gas.

But Dow, Shell (RDSa.L) and other rivals are building new chemical plants, known as crackers, in the United States to process more shale gas.

It remains to be seen what effect, if any, they will have on LyondellBasell when they come online later this decade.

"There's a lot of drilling, a lot of gas processing plants, and we think ultimately that's all good for the U.S. chemical business," Gallogly told Global Markets earlier this year. "That's one of the reasons I decided to come to LyondellBasell."

The company is set to report quarterly earnings on Friday, October 28.

(Reporting by Ernest Scheyder, editing by Dave Zimmerman)

Sunday, August 20, 2017

KCC shares jump after $602 million Hyundai Heavy stake sale

KCC shares jump after $602 million Hyundai Heavy stake sale

Stock Market Predictions

SEOUL (Global Markets) - Shares in South Korea's KCC (002380.KS) surged 11 percent after the chemical producer sold 697.2 billion won ($602 million) worth of shares in the world's largest shipbuilder Hyundai Heavy Industries (009540.KS) at the top of its expected price range.

The sale of its 2.49 million shares or 3.27 percent stake in Hyundai Heavy via a block trade follows KCC's planned purchase of a $675 million stake in Samsung's unlisted amusement park operator Everland.

"Our recent stake sales in Hyundai Motor (005380.KS) and Mando Corp (060980.KS) can cover the Everland stake buy. A decision on proceeds from the Hyundai Heavy share sale has not been made yet," a KCC media official said.

The manufacturer of chemical products used in construction, automobile and other industries sold the shares at 280,000 won each, at the high end of a price range offered previously.

Hyundai Heavy Industries (009540.KS) slid 1.5 percent as of 0034 GMT, underperforming other Korean shipbuilders.

Through the stake disposal, KCC reduced its Hyundai Heavy stake to 3.12 percent.

(Reporting by Ju-min Park; Additional reporting by Joonhee Yu; Editing by Yoo Choonsik and Jonathan Hopfner)

Edwards Lifesciences shares off 11 pct after sales disappoint

Edwards Lifesciences shares off 11 pct after sales disappoint

Stock Market Predictions

CHICAGO (Global Markets) - Edwards Lifesciences Corp (EW.N) shares slid more than 11 percent on Friday, a day after the heart valve maker reported results that disappointed investors and prompted at least one broker downgrade.

The company after the market closed on Thursday reported better-than-expected fourth-quarter earnings but sales were lighter than expected, prompting concerns that the adoption of its transcatheter valves may be slower than previously expected.

U.S. regulators in November approved the company's new Sapien heart valve for patients deemed too sick to have open-heart surgery. Wall Street is expecting it to become a blockbuster product.

European sales were also lower than expected.

"While we remain bullish on the long-term potential of transcatheter aortic valve implants and we expect Edwards Lifesciences to maintain its leadership position in this attractive space, we are downgrading our rating on Edwards Lifesciences to market perform," Wells Fargo analyst Larry Biegelsen wrote in a research note.

He said he took the action because of near-term uncertainty of adoption of the Sapien valve in the United States, poor visibility on Sapien sales outside the United States, and the stock's high valuation.

Analysts also raised concerns about weak European transcatheter valve sales, although it was viewed as a short-term issue.

"We are also inclined to view the European transcatheter heart valve softness as temporary - due primarily to macroeconomic concerns in certain countries and not to lack of underlying demand," Leerink Swann analyst Rick Wise wrote in a note.

Edwards shares were off 11.5 percent to $71.37 in morning trade on the New York Stock Exchange.

(Reporting By Debra Sherman; editing by Mark Porter)

Saturday, August 19, 2017

Schwab had net outflow in April

Schwab had net outflow in April

Stock Market Predictions

NEW YORK/SAN FRANCISCO (Global Markets) - Charles Schwab Corp (SCHW.N), the biggest U.S. online brokerage, said on Friday that clients withdrew a net $500 million in April, the first down month since last June, and its stock fell nearly 2 percent on fears the company would not meet its asset-growth goals.

Schwab said customers withdrew the money to pay taxes, and that customer trading activity slowed from a year earlier. A spokesman said April is typically the slowest month for inflows because of tax payments, but the company said the net outflow was its first for the month since 2001.

This April may have been worse than others because taxes were due later in the month, on the 18th -- not the customary April 15 cutoff, spokesman Greg Gable said. Tax payments "had a more dominant effect," he said.

Inflows have returned to "seasonal norms" in May, Gable said, and April's trading activity was little changed from March after several months of rising activity.

Trading activity at Schwab and other online brokers is watched closely since it helps measure the confidence that individual investors have in the stock market. Customer trading had been on the rebound over the past several months.

"Retail customers appear to remain engaged and net new brokerage accounts were the second highest in the past 12 months," analyst Matt Fischer at CLSA Credit Agricole Securities wrote in a note to clients.

Rising markets helped generate $35 billion in market gains for Schwab customers in April. That helped push client assets at the firm up to $1.68 trillion as of April 30, an 11 percent increase from the prior year.

But the outflows brought to $73.8 billion the total net inflows for the first four months of 2011, equal to annualized growth of 4.7 percent -- below the company's 2011 target of 8 to 10 percent growth, Sandler O'Neill analyst Richard Repetto wrote in a note to clients.

"The results were mixed, with negative core net new assets but better-than-expected client trading activity," Fischer, of CLSA Credit Agricole Securities, wrote.

Schwab's daily average client trades for the month fell by 1 percent from a year ago to 435,000. March volumes, by comparison, had jumped 16 percent from the previous year.

The San Francisco company also opened 83,000 new accounts in April, down 7 percent from a year earlier but a 1 percent increase from March.

Schwab said the asset outflow reflected cash payments for U.S. income taxes. "Tax season took a bite out of flows, turning negative for the first time in a decade, though management noted that things likely returned to normal in May," Fischer said.

Schwab, one of the largest sellers of mutual funds, also noted investors yanked a net $3.3 billion from money market funds, while pouring money into taxable bond and "hybrid" stock and bond funds.

Investors last month also pulled $521 million from large company stock funds and $195 million from municipal and other tax-free bond funds.

Schwab's stock fell 32 cents, or 1.8 percent, to $17.66 on the New York Stock Exchange, the second-worst performer on the 11-member NYSE Arca Securities Broker/Dealer Index. Shares of Schwab had risen 5.1 percent this year before Friday's client activity report.

(This story was corrected to show net outflow of $500 million in first sentence)

(Reporting by Joseph A. Giannone and Philipp Gollner; Editing by Matthew Lewis, Gunna Dickson, Gary Hill)

S&P boosts Ford closer to investment grade

S&P boosts Ford closer to investment grade

Stock Market Predictions

(Global Markets) - Ford Motor Co (F.N) is within one notch of investment grade credit rating at two of the three major ratings agencies after Standard and Poor's Ratings Service on Friday boosted the automaker two notches up its ratings ladder.

S&P said the outlook for Ford is "stable."

This follows an upgrade of one notch by Fitch Ratings on Thursday. Fitch also rates Ford at BB+, the highest level of "speculative" or "junk" status, one notch below the lowest "investment grade" rating.

Moody's Investors Service has Ford rated two notches below its lowest level of investment grade. Moody's rates Ford at Ba2 on its credit risk ladder.

Ford was last at investment grade in 2005, the year before it borrowed heavily to finance its restructuring.

On Wednesday, Ford unionized workers voted nearly 2-to-1 to ratify a new four-year labor deal between the automaker and the Untied Auto Workers.

Ford said on Thursday the new labor deal would increase costs less than 1 percent annually, and higher bonuses would be offset by savings in more flexible manufacturing processes and work schedules.

S&P said of the new four-year labor contract, "We believe the contract will allow for continued profitability and cash generation in North America. Ford has a two-year track record of profits and cash flow generation in its global automotive operations, supported by strong performance in North America."

S&P analyst Robert Schulz said Ford's automotive operating cash flow in 2011 will be "at least" $5 billion.

S&P also said the company has "good prospects for generating at least $2 billion in automotive cash flow in 2012."

Fitch said a further upgrade to BBB-, investment grade, or higher is likely if Ford stays on a course for lowering its debt to $10 billion by 2015 as the automaker plans. Ford's debt at the end of the second quarter was $14 billion.

S&P on Friday also raised the rating for Ford unit Ford Motor Credit Co LLC to BB+ from BB-.

Ford Chief Financial Officer Lewis Booth said on Thursday that the company may reinstate a dividend before the ratings agencies certify it as investment grade, but did not offer an estimate on the timing of the dividend.

J.P. Morgan in a research note said on Friday, "We think a dividend is likely in the next six months, but we expect Ford to start at a fairly small or modest yield initially with the aim of announcing progressive dividend increases in the future."

Ford shares were up 3.2 percent at $12.07 on Friday afternoon on the New York Stock Exchange.

Ford shares are up 29 percent since the automaker's negotiators reached a tentative labor contract with the UAW on October 4. In that same stretch of time, the S&P 500 is up 12 percent.

(Reporting by Bernie Woodall in Detroit, editing by Matthew Lewis)

Friday, August 18, 2017

Stock Market Prediction – Fact Or Fiction?

Is stock market prediction fact or fiction? Stock market prediction is mostly a fiction created by the big money people who sell dreams though it does exist in some forms.

That is truly a multi billion dollar question. People have been analyzing data for a long time trying to develop predictive measures of the stock market.

In most instances they develop something that gives them a slight edge for a while but eventually returns to the normal performance or in some cases presents very large drops as the model breaks down.

Notice I mentioned a model. Scientists develop a model that fits the actual performance to a mathematical equation. They take a set of data and try to determine what outside factors cause the market to rise or fall.

It is a very large business with billions of dollars at stake. Lehman Brothers went bankrupt when their statistical model didn’t match reality. It has happened before and I am sure it will happen again.

Stock market prediction is a business that goes through cycles. When things are stable, a model can be developed that matches the performance of the market. More and more people develop similar models until a large portion of the available money is all taking one side of the trade.

This creates an unsustainable condition that eventually takes a dramatic change for the worse. Once the market begins to change, the statistical models each company has developed breaks down. Some do so quickly which causes a cascading effect through the companies all running the same type model.

This dramatic shift causes a tidal wave to ripple through the companies. Suddenly trades have to be taken off in a very rapid fashion. Due to the large amount of money in these trades the market is not able to absorb them in a smooth and consistent fashion.

Since some of the models are built around using leverage to amp the returns, the effects are more prominently felt in those companies. They eventually reach equilibrium but cause chaos in the markets until things stabilize.

The stable periods are when models work effectively. They give a huge advantage to the company that develops an accurate model early on. They also can provide for a long period of time when outsized returns are possible.

The decades of 1980 and 1990 show the dramatic rises that can happen in stock market valuations. When fundamental and cyclical events line up to create a synergy, markets can rise dramatically and consistently.

The transition periods like 1964 to 1984 are when models tend to break down. Because the market isn’t stable it makes creating an accurate stock market prediction nearly impossible. Those transition periods (I guess two decades qualifies as a transition though it is a very long time) make stock market prediction a tough sport to play.

See Also : Should you Be in The Market Right Now?

Analysis: Battered healthcare stocks ready for rebound

Analysis: Battered healthcare stocks ready for rebound

Stock Market Predictions

NEW YORK (Global Markets) - Sharp falls in U.S. healthcare stocks this week -- where industry bellwethers dropped as much as 8 percent in one day -- were a premature sell-off, analysts say, as the sector's underlying fundamentals remain strong.

Companies from hospital operator HCA Holdings Inc to drugmaker Pfizer Inc came under pressure before the broader market sell-off on Thursday on concern about possible government cuts to the Medicare health program for the elderly under a new U.S. debt deal.

Analysts say there is potential for some sector stocks to see a rebound of up to 15 percent.

"The reaction by and large is probably overdone," said Bob Phillips, co-founder of Spectrum Management Group in Indianapolis. "A number of these stocks are still paying great dividends and valuations are incredibly great."

Healthcare had been the best performing sector during the first half of the year, with healthcare exchange-traded funds and products garnering $859.3 million in net new assets, according to the latest BlackRock ETF industry report.

"Demographically, no matter how you shake it, the population is aging, people will require more healthcare as they age," Phillips said. "We're comfortable with the overall sector and think it will do well over the next 10 years, whether the government is the direct payer or not."

HEALTHCARE PROVIDERS

Healthcare providers face the most pressure, given that Medicare costs -- which are expected to nearly double in 10 years -- are likely to be first on the chopping block as Washington works to trim down its deficit.

"Cutting benefits to Medicare is cutting benefits to providers," said ETF Digest Editor Dave Fry.

Insurers UnitedHealth Group Inc and Humana Inc are two stocks that have been heavily battered, both down about 13 percent from the start of last week. They fell below their key 100-day moving averages for the first time this year, which could set up a healthy rebound in the near term.

"That tends to be a pretty strong level of support," said King Lip, chief investment officer at Baker Avenue Management in San Francisco. "We'll probably see a few more days of normal trading here, but the stocks could easily rebound 10 to 15 percent."

Both companies raised their full-year earnings forecasts. UnitedHealth raised its range by 20 cents to a range of $4.15 to $4.25 per share. Humana raised its range by 60 cents to a range of $7.50 to $7.60 per share.

Analysts at Credit Suisse gave Humana an "outperform" rating this week and said the stock's dip presents a good buying opportunity, noting it is well-positioned to pass cuts through to providers and members.

The analysts said Humana is trading at nine times their 2012 EPS estimate, UnitedHealth is trading around 11 times their EPS estimate.

"We believe HUM is undervalued considering our estimate for 9 percent organic enrollment growth in the core Medicare Advantage product next year," the analysts wrote in a note.

HEALTHCARE PRODUCT SUPPLIERS

Some healthcare product and pharmaceutical companies, which took a hit with the broader sector, have upside potential.

Lip noted that this year's healthcare rebound followed a substantial dip in the wake of the U.S. healthcare law, which passed early in 2010, and expects a similar pattern now.

"A lot of these stocks sold off because of overall fear. The fact of the matter is they rebounded after that and started hitting new highs," he said. "We see similar issues here with people selling the news. But after things calm down and are not as bad, we'll see institutional buyers come back."

Drug and device makers Abbott Laboratories and Johnson & Johnson, both down around 6 percent since mid-July, are attractive stocks to Phillips.

Johnson & Johnson is a potential buy now for 13 times its earnings. The stock had been trading in a range of $65 to $67 since late April. This week it fell as low as $61.05.

The stock is also trending below its 100-day moving average for the first time since mid-April this week. The last time Johnson & Johnson opened below its 100-day moving average, it rose about 6.5 percent within two days.

Phillips said Abbott, with a 14.9 price to earnings ratio, is a "compelling valuation." A price-to-earnings ratio below 15 is considered attractive for the health sector as it translates to about a 7 percent earnings yield, Phillips said.

Abbott shares were down 6 percent since the start of last week, after gaining 10 percent from the start of the year.

HEALTHCARE ETFs

Since each company will be affected differently by any cuts to healthcare spending, ETFs tracking the broader sector may begin to look more attractive to investors hoping to mitigate company-specific risk by diversifying opportunities.

The iShares Dow Jones Health Care Providers Index Fund had been up about 20 percent since the start of 2011, but dropped about 11 percent over the past week.

The ETF is likely to be under the most pressure because it is solely built upon providers. It tracks 52 stocks and has a 14.1 percent weight in UnitedHealth, its biggest holding, and a 4.6 percent weight in Humana.

The SPDR Health Care Select Sector Fund is a more diversified healthcare ETF, consisting of 54 holdings with 48.7 percent in pharmaceuticals, 19.4 percent in healthcare providers and services, 16.5 percent in healthcare equipment and supplies, among its biggest holdings.

The ETF is down about 8 percent since the start of last week, dipping below its 200-day moving average for the first time this year on Tuesday. The ETF had previously been trading in a high range of $34 to $36, about a 12-percent gain from the start of the year.

"These stocks have been unfairly punished on something that might not even occur," Baker Avenue's Lip said. "Nothing is written in stone yet. I think we'll definitely see a rebound in the short term, or at least more of a technical bounce."

(Editing by Andrew Hay)