Archive | Archive – world business

Snapshot on world business, week to 24 November 2002

23 November 2002

Insurance Australia Group (IAG), owner of State Insurance in New Zealand, got a lukewarm response from small investors to its quest for $A380 million in equity to buy CGI (Commercial General) and NZI, achieving only a 24.5% ($A93 million) retail takeup. NRMA Insurance Ltd, the IAG subsidiary which bought State, launched 2 redeemable 5-year subordinated notes issues totalling $A300 million this week, to refinance a bridging facility for the purchase of CGI and NZI from Aviva plc. 1st part of the $A1.8.55 billion purchase programme was an $A500 million institutional placement. IAG plans an $A160 million dividend reinvestment plan for early 2003 as another part of the funding package.

John Dillon, chairman of the US Business Roundtable & chief executive of Carter Holt Harvey’s controlling shareholder, International Paper, said a majority of chief executives in a recent Roundtable survey had grave concerns about their ability to create jobs & contribute to economic growth in the present fragile economic environment. An American Express survey of middle market chief financial officers had 2-3rds of them believing the US economy would stay flat, act erratically or decline further on 2003.

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Snapshot on world business, week to 3 August 2003

AMP Ltd has agreed to sell its remaining Australian property finance loan portfolio, comprising $A232 million of construction & property investment loans, to Suncorp-Metway. This is the last major portfolio sale in AMP’s banking & finance asset divestment programme announced last November. The New Zealand residential mortgage & retail deposit portfolios went to HSBC and most of the property finance portfolio to GE Commercial Finance in April, and the New Zealand rural loan portfolio to Rabobank in May.

30 July 2003

Want to know where all those millions of dollars’ worth of Nigerian frauds start out? Through a tangle of phone lines like this in Lagos, according to a US State Department pamphlet about the scams – how they work, themes & variations. Oh, and where the delete button is on your computer.
US State Department pamphlet on Nigerian frauds

ASIC (the Australian Securities & Investments Commission) ran the Nigerian scam report in its latest Fido newsletter (on financial tips & safety checks), as the last item in a list of 8 scams entered so far for ASIC’s 2003 Pie in the Sky awards. The other entries listed were: Hot stocks, Make money out of heating oil options, Turn $100 into $137,000+ in 12 months (I like the ones where you turn a tiny sum into an unusual but precise huge sum, such as $137,522.86 in 5½ weeks), an Australian angle on Nigerian letters, Fake banking & payment websites, Stockmarket games and Banking scam.
Pie in the Sky award entries

The Fido newsletter also warns that internet scammers are getting more sophisticated in tricking them into giving them account names & password, examines related-part documents and directors’ conflicts of interest, looks at painful lessons from get-rich-quick seminars and runs a document on defective prospectuses.

Zacks Investment Research added a few stocks to its “good buy” list and a big bunch to its “goodbye” list this week. Real estate sector company Anworth Mortgage construction sector companies Meritage Corp and Pulte Homes made it into the buy list. Among those hitting the sell list were the Boeing Co, Coca Cola Bottling, International Paper and, in the real estate sector, Central Parking, Cousin Properties, Host Marriott and Ramco-Gershenson Properties Trust.

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Snapshot on world business, week to 22 September 2002

17 September 2002

24-hour trading of the same stocks is a possibility through a proposal for Hong Kong Exchanges & Clearing Ltd, which owns the Hong Kong Stock Exchange, to buy a (possibly controlling) stake in the American Stock Exchange. The usual American worry about Chinese financial influence will have to be overcome, though.

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Snapshot on world business, week to 18 February 2001

Latest: Buffett boosts price.

17 February 2001

In comparing investment performances, one thing you’re most unlikely to include in the equation is the premium attached merely through the purchase of an equity stake by a big-name investor. Warren Buffett’s Berkshire Hathaway announced three new investments this week and two stake increases. The first, a 9.6% stake in Memphis-based plumbing fixtures maker Mueller Industries, was announced during trading hours. The shares jumped 12%.

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Snapshot on world business, week to 2 December 2001

2 December 2001

The Seven Network will inject $A75 million into Melbourne’s Colonial Stadium to save the business from collapse, and get a 23-lease to add to the other contracts it controls, including ticketing, marketing & naming rights.

Malaysia’s government has used 5.47 billion ringgit of bonds to assume up to 80% of two rapid transit operators, Renong’s Putra and Star, owned by British construction group Taylor Woodrow & several Malaysian Government funds. The bonds will be issued to creditors of the two groups. Kuala Lumpur has 56km of rapid transit lines.

China has sold non-performing loans to a US consortium led by Morgan Stanley, which has bought 10.8 billion yuan of 16.6 billion yuan of loans put up for auction by China Huarong Asset Management one of four companies set up by China’s major banks to dispose of bad loans. Huarong hopes to recoup 21% from its auction.

US energy trading giant Enron remained on the verge of collapse over the weekend, with a bankruptcy protection request expected in the next week after a takeover bid was called off. Enron, which was ranked seventh on Fortune’s list of US corporates, started its downward spiral after admitting to huge earnings overstatements since 1997. It was valued at $US80 billion a year ago.

US Securities & Exchange Commission chairman Harvey Pitt has warned again about use of pro forma accounts, saying companies that manage to turn a loss into a profit using this accounting method without appropriate disclosure will at least confuse investors and probably be acting fraudulently. Mr Pitt has made pro forma accounting his big issue since assuming the SEC chairmanship. Nevertheless, use of pro forma accounts continues to rise.

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Snapshot on world business, week to 24 March 2002

18 March 2002

Harvey Norman Holdings Ltd increased net profit after tax by 18.8% to $A67.9 million in the 31 December half. Sales from the franchised Harvey Norman stores in Australia & the company’s New Zealand chain (excluding the Pertama stores in Singapore & the Australian Rebel chain which Harvey Norman too control of last July) rose 9.5% to $A1.4 billion. Same-store sales rose 6%. Sales for the 8 nmonths to February rose 9.7% to $A1.83 billion, with same-store sales up 5.9%. Pertama sales doubled to $A162.4 million in the half-year.

Foodland Associated Ltd (FAL) increased aftertax profit for the 26 weeks to 27 January by 119% to $A47.3 million on record sales from continuing operations of $A2.14 billion, up 25.8%. FAL’s benchmark for determining dividend — earnings/share from continuing operations before unusuals & goodwill amortisation — rose 29.6% to A60.9c. Earnings/share from all sources rose 117.7% to A49.2c. In the previous period FAL reported $A15.1 million of losses from tax from discontinued operations, arising mostly from closing the Deka chain in New Zealand. The company has increased its fully franked dividend by 28.8% to A33.5c, representing a 55% payout before goodwill amortisation, discontinued operations & unusuals, all after tax.

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Snapshot on world business, week to 12 August 2001

Latest: US imposes tariff on Canadian lumber.

12 August 2001

The US Government imposed a 19.3% tariff on Canadian softwood lumber on Friday, siding with the US sawmills that complained the Canadians gained unfairly from subsidies and against US housebuilders and consumer groups who have produced precise figures on how much more a house will cost.

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Snapshot on world business, week to 19 January 2003

14 January 2003

Le Monde Diplomatique extends the perceptive & thought-provoking tradition of the French daily newspaper. In its latest edition (subscription required), articles include a proposition that the US has only 1 option if it’s to protect its interests & world dominance: It must extend its global reach by imposing not just its military superiority everywhere, but also its administrative, legal & technical standards on international trade & finance. Among others is 1 which suggests that as the US reviews its oil source strategy, sub-Saharan Africa could account for 25% of US crude oil imports by 2015. 2 articles deal with US treatment of Europe: in the 1st, the Nato summit in Prague admitted several former Soviet republics and allowed the US to reassert its supremacy over its European partners; in the 2nd, Europe is defined as a trading area within the framework of US imperial strategy and, without much consultation, the US promises European Union membership to those states whose co-operation it needs.
Website: Le Monde Diplomatique

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Snapshot on world business, week to 1 December 2002

27 November 2002

Lance Poulsen, 59, made a successful career through the 90s taking over the rights to receivables of hospital & home healthcare companies waiting for payments from insurers & government agencies. His company, National Century Financial Enterprises, packaged the receivables into collateral for bonds, sold these in private placements to “sophisticated” investors, clipped the ticket and got top ratings from Moody’s Financial Services and Fitch Ratings. Mr Poulsen, with a business in Ohio, a couple of corporate jets and a Florida mansion, over-extended, lending increasing amounts against future receivables (people yet to receive their hospital operation). Last week National Century filed for Chapter 11 bankruptcy protection after using up $US3.35 billion in bonds. Credit Suisse First Boston said it would take a $US214 million hit.

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