On Wall Street, Bear Stearns, Lehman Brothers Holdings, Merrill Lynch and Goldman Sachs Group are as good as junk.
Bonds of US investment banks lost about $1.5 billion of their face value this month as the risk of owning the securities increased the most since at least October 2004, according to Merrill indexes. Prices of credit-default swaps based on the debt imply that their credit ratings are below investment grade, data compiled by Moody’s Investors Service show.
The highest level of defaults in 10 years on subprime mortgages and a $33 billion pileup of unsold bonds and loans for funding acquisitions are driving investors away from debt of the New York-based securities firms. Concerns about credit quality may get worse because banks promised to provide $300 billion in debt for leveraged buyouts announced this year. “The market is being driven by fear,” said Mark Kiesel, who oversees $80 billion of corporate debt at California-based Pacific Investment Management, manager of the world’s biggest bond fund.
Read more in The Economic Times
Wednesday, August 01, 2007
I-banks traded as junk on risk fears
Reliance mutual declares dividend in interval fund
Reliance Capital Asset Management Ltd. said on Wednesday it will pay 0.264986 rupee per unit dividend in retail and institutional plan of Reliance Interval Fund-Quarterly Interval Fund Series II.
The asset manager has fixed August 6 as the record date. The fund house managed assets worth about 599 billion rupees at the end of June, data from Association of Mutual Funds in India showed.
Arcelor Mittal's Q2 core profit above expectations
Arcelor Mittal, the world's largest steelmaker, reported second-quarter core profits above market expectations on Wednesday on the back of strong demand and higher selling prices for its products.
Earnings before interest, tax, depreciation and amortisation rose to $5.326 billion from a pro-forma figure of $3.500 billion a year ago. The average forecast given in a Reuters poll of eight analysts was $4.65 billion.
Reliance Retail in talks with institutes on training manpower
Reliance Retail is in “advanced stages” of talks with institutes including the government-run Indira Gandhi National Open University (Ignou) and schools run by YMCA and Bharti Vidya Bhawan, according to a senior company official who wished not be identified because he is not authorized to talk to the media.
The firm will require one million direct and indirect employees all over India by 2010 but there are hardly 40,000 to 50,000 people trained in modern retailing, the official said, adding, “Rather than fighting for the existing talent we are enlarging the talent pool.”
Read more at liveMint.com
Bajaj July bike sales down 7%; new bike on Aug 9
| Bajaj Auto today reported a 7% decline in motorcycle sales at 1,59,881 units in July as against 1,71,115 units sold in July 2006 owing primarily to product fatigue. According to a release issued by the company today, total two & three-wheeler sales also dropped 7% to 1,85,890 units from 1,99,821 units in July 2006. "The motorcycle industry continued to degrow owing primarily to product fatigue as consumer disinterest in uninspiring 100 cc motorcycles continued to translate into postponement of purchase," the release added. |
| The company also announced that it will unveil its new, non-100cc motorcycle with DTS-Si technology on August 9 in Pune. |
Sensex down 502pts; Reliance down 4%
The Sensex is now down 502 points at 15,049.
ACC has slumped nearly 6% to Rs 998. Bharti Airtel has plunged 5.5% to Rs 854.
Tata Motors has tumbled 4.6% to Rs 667. Reliance Communications, HDFC and HDFC Bank have dropped around 4.3% each to Rs 534, Rs 1,930 and Rs 1,148, respectively.
Hindalco, BHEL, Wipro and Reliance have shed 4% each to Rs 163, Rs 1,661, Rs 475 and Rs 1,818, respectively.
Mahindra & Mahindra and Relaince Energy have slipped 3.7% each to Rs 702 and Rs 764, respectively.
The market breadth is extremely bearish - out of 2,359 stocks traded so far, 1,728 have declined, 579 have advanced and 52 are unchanged.
Jet Airways Q1 net dips 31%
Private carrier Jet Airways on Monday reported a 31.35 per cent decline in net profit at Rs 30.88 crore for the quarter ended June 30 compared to Rs 44.98 crore for the corresponding quarter last year.
However, total income increased by 19.81 per cent to Rs 1,983.03 crore for the June quarter as against Rs 1,655.19 crore for the same quarter in the previous year, the company said in communique to the Bombay Stock Exchange.
The shares of the company fell 3.15 per cent and closed at Rs 700 on the BSE.
Tata Steel's Q1 net up 28% at Rs 1,222 cr
The world's sixth largest steel manufacturer Tata Steel on Monday posted 28.18 per cent increase in net profit at Rs 1,222.11 crore for the quarter ended June 30 compared to Rs 953.41 crore for the corresponding quarter last year.
Total income (net of excise) of the company increased 9.21 per cent to Rs 4,343.70 crore for the quarter ended June 30, from Rs 3,977.38 crore a year ago, Tata Steel informed the Bombay Stock Exchange (BSE).
Shares of the company were trading at Rs 645, down 1.01 per cent on the BSE.
Everonn Sys lists with 75% premium
Knowledge management and training company Everonn Systems on Wednesday got listed at Rs 245 on the bourses, a premium of 75 per cent over the issue price of Rs 140.
The scrip touched a high of Rs 560 within minutes of listing and over 1.70 lakh shares exchanged hands on the BSE.
The shares scaled a high of Rs 567 on the National Stock Exchange, where over 9.77 lakh shares got traded.
The company was trading at Rs 517.50 on the BSE and at Rs 518.70 on the NSE at 10.01 am.
Read more in The Financial ExpressBSNL to issue tender for 50 mn GSM lines
India's state-run Bharat Sanchar Nigam Ltd will float a new tender for installing 40-50 million
GSM lines, to be completed within 8-9 months, to expand its telecom services, the telecoms minister said on Tuesday.
"I am told that they are ready to go for a larger tender ... 40-50 million lines," A. Raja said.
Earlier, BSNL had said it did not have plans to issue a fresh tender as it was still finalising an existing order.
Read more in The Financial Express
Maruti July sales up 25 per cent yr/yr
India's biggest car maker, Maruti Udyog Ltd, said on Wednesday it sold 57,909 vehicles in July, up 25 per cent from 46,408 vehicles sold in the same month last year.
Maruti, 54.2 per cent-owned by Japan's Suzuki Motor Corp, sold 52,839 units in the domestic market, up 18 per cent from 44,653 units a year earlier.
Maruti, which is changing its name to Maruti Suzuki India Ltd., exported 5,070 units, up from 1,755 units last year.
Sensex sheds 474 points in early trade
The Bombay Stock Exchange benchmark Sensex crashed over 474 points in early trade on Wednesday on heavy selling by funds, triggered by weak global trend.
The BSE-30 share index, which gained 290 points on Tuesday, plunged 474.91 points at 15,076.08 in the first five minutes of trading.
The wide base National Stock Exchange's Nifty dropped 146.05 points at 4,382.80.
Dow Jones okays $5 bn sale to News Corp
Rupert Murdoch is set to achieve his decades-long dream of running the venerable Wall Street Journal after Dow Jones & Co Inc's board agreed to News Corp's USD 5 billion buyout bid on Tuesday.
The board decided to accept the offer at a meeting Tuesday evening, according to a source familiar with the matter, shortly after News Corp's board approved the deal.
The 76-year-old media mogul spent the past three months courting the Bancroft family, which has controlled Dow Jones for more than a century.
Read more in The Financial Express