TMX shares rise after deal with LSE called off

TMX shares rise after deal with LSE called off

Stock Market Predictions

TORONTO (Global Markets) - TMX Group (X.TO) shares turned higher on Wednesday after the London and Toronto stock exchanges canceled plans to combine forces when it became clear they did not have enough shareholder support.

Shares of TMX, operator of the Toronto Stock Exchange, climbed as high as C$44.14 after the news, adding to gains before the confirmation was published. A media report had said the London Stock Exchange (LSE.L) had lost the battle for TMX Group in a proxy vote.

(Reporting by Ka Yan Ng; editing by Rob Wilson)

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Europe's banks, insurers jump on Greece rescue deal

Europe's banks, insurers jump on Greece rescue deal

Stock Market Predictions

LONDON (Global Markets) - Europe's banks and insurers rose on Friday after Greece's private sector creditors agreed to take a 21 percent loss on their debt holdings as part of a rescue plan.

Although the deal will force many banks to take a big hit -- non-Greek banks face a 5.4 billion euros ($7.7 billion) loss -- the Greek deal was seen as reducing the threat the euro zone crisis will spread to Spain and Italy. But risks remain.

"It is good that everybody has been able to make a compromise, but it still needs to be detailed and implemented," said Francois Savary, chief investment officer at Geneva-based fund managers Reyl.

Other investors and analysts also gave it a cautious welcome, saying the threat of further contagion remains.

"There is still the need for a strong policy response, but the market's reaction this morning shows it is willing to give them (EU leaders) credibility," said Paola Biraschi, an analyst at RBS in London. "There is more to come ... but it has restored credibility."

By 0830 GMT the STOXX Europe 600 banking index .SX7P was up 1 percent, pulling back from an early 2.6 percent rally. The index jumped 4 percent on Thursday as a Greek deal neared. The STOXX Europe 600 insurance index .SXIP was up 1.1 percent in early trade.

Four options are being offered to creditors, including bond exchange and rollover offers as well as a bond buyback scheme as part of a 37 billion euro private sector contribution to Greece's rescue plan.

Financial firms are likely to write down the value of Greek bonds in the second quarter, possibly by 21 percent, but more losses could follow. The change in the terms on Greek bonds means ratings agencies are likely to downgrade Greece to selective default soon.

"We have long thought that the most likely outcome for Greek bondholders would be that they would take a small haircut first followed by a larger one at a later date. To give Greece a fighting chance they probably need a write down close to 65 percent," said Gary Jenkins, head of fixed income research at Evolution.

Top early gainers included firms that have been hit hard by the threat the Greek crisis could spread.

Belgian-French Dexia (DEXI.BR) jumped 4 percent and France's BNP Paribas (BNPP.PA) and Societe Generale (SOGN.PA), Italy's Unicredit (CRDI.MI), Germany's Commerzbank (CBKG.DE) and Britain's Barclays (BARC.L) all gained over 2 percent. Insurers AXA (AXAF.PA) and Ageas (AGES.BR) were each up about 2 percent.

The Institute of International Finance (IIF), which has led the negotiations for private investors, reckons 90 percent of creditors will sign up. Deutsche Bank (DBKGn.DE), HSBC (HSBA.L), BNP Paribas, Allianz and AXA are among the firms to already sign up.

There is about 150 billion euros of outstanding Greek sovereign debt, so a 90 percent take-up would account for 135 billion euros, including about 54 billion euros in the period up to mid-2014.

Europe's banks held 98 billion euros of Greek debt at the end of last year, with two-thirds of that in domestic hands. They will be recapitalized under the rescue plan, with about 15 billion euros likely to be pumped in, on top of 10 billion already earmarked for them.

About four-fifths of debt is typically held in banking books that may now face a haircut, indicating non-Greek banks face a loss of 5.4 billion euros.

BNP Paribas has the biggest holding outside Greece, with 4.5 billion euros of bonds in its banking book, according to data released last week as part of an industry health check. A 21 percent loss on that would be 945 million euros.

Dexia held 3.5 billion euros and Cyprus's Marfin CPBC.CY held 3.4 billion, indicating a hit to each of over 700 million euros. Commerzbank held 3 billion euros and Societe Generale (SOGN.PA) held 2.4 billion, so they face haircuts of 630 million and 500 million euros respectively. ($1 = 0.695 Euros)

(Reporting by Steve Slater, Myles Neligan and Sudip Kar-Gupta in London and Michel Rose in Milan; Editing by Mike Peacock)

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Valuation worries drive Glencore below issue price

Valuation worries drive Glencore below issue price

Stock Market Predictions

LONDON (Global Markets) - Shares in commodities trading group Glencore fell below their issue price of 530 pence on Friday, the second day of conditional trading, as investors fretted over its valuation.

The world's largest diversified commodities trader touched a low of 519 pence in unofficial grey market trade before closing at 524 pence, down 1.1 percent after more than 200 million shares changed hands, underperfoming a virtually flat FTSE index and a 0.4 percent dip in the broad mining sector.

The shares had closed on Thursday at 530 pence, exactly flat on a debut price in the middle of its indicated range, after a day of heavy volumes -- more than twice Friday's levels -- that made it one of the most traded stocks in the market.

"Basically, the valuation looks a little bit rich. They worked very hard to get a favorable price and one could argue the only reason it was up yesterday was support from the sponsoring banks," said analyst Nik Stanojevic at Brewin Dolphin.

"I think the market feels the same way. It wasn't as if they sold this thing really cheaply with the expectation it would go up 50 percent on the first day."

Unconditional trading begins on Tuesday in London, where Glencore's offer of up to $11 billion is set to be the largest listing on record, and Wednesday in Hong Kong.

Glencore, the world's largest diversified commodities trader, has said there was strong demand for its stock and it had enough buyers to cover its offering of up to $11 billion within hours of starting the sale process earlier this month.

But many investors have also expressed concern over the outlook for commodities, particularly after this month's sell-off, and fretted over the discounts that should be applied to take account of Glencore's conglomerate structure and of the fact it has operated away from the public eye for 37 years.

"Perhaps the fact that the float has, despite being over four times covered, been met with broad skepticism and sobriety is a sign of underlying health in the metals market?" analysts at Numis said in a morning note.

"The hopes for a 5-10 percent rally remain -- not exactly LinkedIn, but the first objective remains stability and garnering faith in this new currency."

Professional social networking site LinkedIn saw its shares more than double in their public trading debut on Thursday, a far cry from Glencore's more muted start.

At the offer price of 530 pence, Glencore has a market value of 36.7 billion pounds ($59.3 billion). It will be the fifth-largest mining-related company on the London exchange.

(Reporting by Clara Ferreira-Marques; Editing by Alexander Smith and Will Waterman)

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Apple's iPhone draws hordes again, powers shares

Apple's iPhone draws hordes again, powers shares

Stock Market Predictions

TOKYO/LONDON/SAN FRANCISCO (Global Markets) - Apple Inc's new iPhone debuted with a splash across the globe, spurring thousands to queue around city blocks and snap up the final gadget unveiled during co-founder Steve Jobs' life.

Shares of Apple leapt 3 percent to close at a record after people thronged stores in Sydney, Tokyo, London, Paris, New York and San Francisco to get their hands on the iPhone 4S, ignoring criticism about the lack of a design revolution and reports of software glitches.

Fans in Sydney, Tokyo, Frankfurt and London made sure Jobs, who died last week, remained part of the iPhone 4S launch, with flower, candle and photo shrines erected outside stores. A black-and-white picture of the visionary leader in Covent Garden carried the line: "Let's make a dent in the universe."

In New York and San Francisco, hundreds showed up as expected but the mood proved more subdued than was typical on an iPhone launch day.

"I have a lot of respect for how he led the company and so the turnout, and especially the preorder sales, is a mark of appreciation for him," insisted Chris Centers, who was one of the people who has lined up outside the store.

One of the buyers had also stopped by to lay flowers at the San Francisco store's glass wall in honor of Jobs.

The new model looks similar to the previous iPhone 4 but has an upgraded camera, faster processor, enhanced security and voice-activated software, which lets users ask the phone questions. The voice software drew glowing reviews.

Unveiled just a day before Jobs died, it was initially dubbed a disappointment, partly because it looked identical to its predecessor. But anticipation of the "Siri" voice software helped it set an online record in orders on October 7.

Rivals' woes may have provided a boost. Research in Motion struggled for days to fix an international outage of its email and messaging services.

Also, about one in four people who thronged Apple stores from Tokyo to San Francisco told Global Markets they were ditching BlackBerries, discarding Nokias or even giving up Google Android-based phones, hoping for something better.

Apple CEO Tim Cook and his executive team hope the first device sold without Jobs at Apple's helm will protect the company against a growing challenge from the likes of arch-rival Samsung Electronics.

Analysts believe the South Korean company, which powers its phones with Google's Android software, surpassed Apple as the world's biggest smartphone vendor in terms of unit sales in the third quarter.

Apple does not release sales on launch day, so gauging initial figures is difficult. However, the company took more than 1 million online orders in the first 24 hours after the release of the iPhone 4S, exceeding the 600,000 for the iPhone 4, which was sold in fewer countries initially.

Sprint -- joining Verizon and AT&T in Apple's roster for the first time -- said on Friday it had chalked up a launch-day sales record for any device -- by around noon.

Jobs "made everything better and the products he released were thought through in such detail," Duncan Hoare, a foreign exchange trader, said as a loud roar greeted the opening of an Apple store in London. "It was about the beauty of something and the simplicity."

GLITCHES?

The iPhone -- seen as the gold standard for smartphones -- is Apple's highest-margin product and accounts for 40 percent of its annual revenue. The newest iteration uses chips from Qualcomm Inc, Toshiba and a host of smaller semiconductor companies, according to repair firm iFixit, which cracked the device open on Thursday.

Despite the enthusiasm at stores, Friday's launch was marred somewhat by widespread complaints on the Internet this week about problems downloading iOS 5, the latest version of Apple's mobile software.

There were also problems with iCloud, Apple's online communications, media storage and backup service formally launched on Wednesday; users reported glitches such as losing their email access.

Queues in Paris were smaller than those normally seen for a brand-new iPhone, with some fans there wondering if the somewhat underwhelming introduction had put people off. But in London and elsewhere the lines were as long as ever.

"Despite the initial disappointment that this wasn't an iPhone 5, the reality is we're still seeing the usual frenzy that we've got used to on launch day," analyst Ben Wood at CCS Insight told Global Markets. Analysts expect global sales of a few million phones on the first weekend, he added.

Analysts point to several factors in Apple's favor, including a $199 price that matches up well with rival devices, and availability promised on more than 100 carriers by the end of 2011, far more than its predecessors.

Underscoring the enthusiasm for the new phone, Japanese mobile carrier Softbank Corp had to temporarily stop contract applications after its computer system was overwhelmed with more requests than it had expected.

Some analysts expect fourth-quarter iPhone shipments to reach 30 million or more, almost twice as many as a year ago.

"I am a fan, a big fan. I want something to remember Steve Jobs by," said Haruko Shiraishi, waiting patiently with her Yorkshire terrier Miu Miu at the end of an eight-block queue in Tokyo's smart Ginza shopping district.

(Additional reporting by Michael Perry in SYDNEY, Edwin Chan in LOS ANGELES, Isabel Reynolds in TOKYO, Marie Mawad in PARIS, Jens Hack in MUNICH, Christoph Steitz in FRANKFURT, Giles Elgood, Matt Cowan, Kate Holton and Georgina Prodhan in LONDON, Supantha Mukherjee in NEW YORK, and Poornima Gupta in San Francisco; Editing by Mark Bendeich, Alex Richardson, Sophie Walker and John Wallace)

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