Tuesday, October 10, 2006
Emerging markets drive forex reserves
Very comprehensive commentary on the current state of Forex markets and relationship between currencies of BRIC (Brazil, Russia, India, China) countries, their holding in dollar denominated assets. Full text on Forexblog
Money managers bet on cheap mining stocks
By Pratima Desai
LONDON (Reuters) - Fund managers are piling into mining stocks because they are cheap and do not reflect the strength of metals prices that by historical standards are still very high.
Copper, which accounts for almost 30 percent of British miners' earnings, jumped by nearly 85 percent to $8,800 a tonne between August 2002 and May this year.
Prices have fallen since May, but most of the gains bar about 17 percent are still intact.
The sell-off was precipitated by fears of a U.S.-led global economic slowdown, rising inflationary pressure and significantly higher interest rates around the world.
Share prices of leading British miners shot up by an average of around 70 percent between August 2002 and May this year, since when they have tumbled by nearly 20 percent.
"The sell-off ... is really overdone. The fundamentals really haven't changed substantially," said Aljoscha Haesen, senior analyst at British fund manager Forsyth Partners.
"The (fund) managers are taking advantage of these sell-offs in equity prices and are buying quality companies at valuations that are still very compelling."
The market's failure to appreciate the value of natural resource companies is why private equity funds which rarely foray into mining are scouting the sector, managers say
Source Reuters
LONDON (Reuters) - Fund managers are piling into mining stocks because they are cheap and do not reflect the strength of metals prices that by historical standards are still very high.
Copper, which accounts for almost 30 percent of British miners' earnings, jumped by nearly 85 percent to $8,800 a tonne between August 2002 and May this year.
Prices have fallen since May, but most of the gains bar about 17 percent are still intact.
The sell-off was precipitated by fears of a U.S.-led global economic slowdown, rising inflationary pressure and significantly higher interest rates around the world.
Share prices of leading British miners shot up by an average of around 70 percent between August 2002 and May this year, since when they have tumbled by nearly 20 percent.
"The sell-off ... is really overdone. The fundamentals really haven't changed substantially," said Aljoscha Haesen, senior analyst at British fund manager Forsyth Partners.
"The (fund) managers are taking advantage of these sell-offs in equity prices and are buying quality companies at valuations that are still very compelling."
The market's failure to appreciate the value of natural resource companies is why private equity funds which rarely foray into mining are scouting the sector, managers say
Source Reuters
Thursday, October 05, 2006
Wednesday, October 04, 2006
CEO stands up for Vonage's prospects despite cable rivals
Vonage Chairman Jeffrey Citron Tuesday defended the Internet phone company's ill-fated public offering and dismissed claims that looming competition from cable companies has dimmed its prospects.
"We (cable companies and Vonage) can both grow nicely at the same time," Citron said in an interview at USA TODAY.
Vonage pioneered voice over Internet protocol service, or VoIP, which uses a regular phone and adapter to send phone calls over a broadband line. Vonage has about 2 million lines.
But the company, which went public at $17 a share in May, fell 13% the first day of trading, largely on fears of increasing competition from deeper-pocketed phone and cable giants.
Its stock closed Tuesday off more than 58% from its opening price. It's the second-worst IPO of the year, based on Monday closing prices, Renaissance Capital says.
Renaissance analyst James DeStefano says the IPO was dominated by short-term investors.
Full text on USA 2day
"We (cable companies and Vonage) can both grow nicely at the same time," Citron said in an interview at USA TODAY.
Vonage pioneered voice over Internet protocol service, or VoIP, which uses a regular phone and adapter to send phone calls over a broadband line. Vonage has about 2 million lines.
But the company, which went public at $17 a share in May, fell 13% the first day of trading, largely on fears of increasing competition from deeper-pocketed phone and cable giants.
Its stock closed Tuesday off more than 58% from its opening price. It's the second-worst IPO of the year, based on Monday closing prices, Renaissance Capital says.
Renaissance analyst James DeStefano says the IPO was dominated by short-term investors.
Full text on USA 2day
Keep your eyes on insiders
Investors hurt by the sharp slide in home-builder stocks might now wish they'd kept a closer eye on what industry executives were doing with their own holdings.
CEOs of three of the top eight U.S. home builders sold large amounts of stock last year and avoided some of the financial pain since the shares peaked, a review of regulatory filings for USA TODAY by Thomson Financial shows.
Such insider selling, even as the stocks were hitting highs and home builders were pumping out homes, underscores how executives are often the first to react to swift business changes, says Mark LoPresti of Thomson.
Executives often have much of their wealth tied up in their companies and are closely aware of shifts in their industry. They're acquainted not only with their business' health and outlook but also have an acute understanding of the value of their company's shares.
So concentrated selling, or buying, by insiders can be a cue for individual investors. "We don't know for sure what's in the hearts of insiders," LoPresti says. But in his opinion, "It was extreme activity."
Full text on USA 2day
CEOs of three of the top eight U.S. home builders sold large amounts of stock last year and avoided some of the financial pain since the shares peaked, a review of regulatory filings for USA TODAY by Thomson Financial shows.
Such insider selling, even as the stocks were hitting highs and home builders were pumping out homes, underscores how executives are often the first to react to swift business changes, says Mark LoPresti of Thomson.
Executives often have much of their wealth tied up in their companies and are closely aware of shifts in their industry. They're acquainted not only with their business' health and outlook but also have an acute understanding of the value of their company's shares.
So concentrated selling, or buying, by insiders can be a cue for individual investors. "We don't know for sure what's in the hearts of insiders," LoPresti says. But in his opinion, "It was extreme activity."
Full text on USA 2day
Canadian oil production may boost Loonie
Canada currently had enough oil reserves to supply all US oil needs for the next three years. The only problem is that much of this oil is trapped in Canada’s oil sands, and it may be costly and difficult to extract. Once the oil starts to flow, however, Canada will likely become one of the world’s top 10 oil exporters, behind such powerhouses as Venezuela, Russia, Saudi Arabia, and Iran. The recent strength of Canada’s currency, the Loonie, can be almost entirely attributed to the high price of commodities, especially oil. It seems forex traders would benefit from studying a little geology
Source Forexblog
Source Forexblog
Monday, October 02, 2006
Update -- Venezuela, Nigeria To Cut Oil Production
The decision by Venezuela and Nigeria to cut crude oil production will have little immediate impact on U.S. gasoline prices because storage tanks are filled to the brim, an oil analyst says.
Venezuela said on Friday it plans to cut crude oil production by about 50,000 barrels a day. On the same day, Nigeria said it plans to hold back about 120,000 barrels a day.
The cuts, scheduled to take place Oct. 1, are an apparent attempt to jack prices as demand falls.
The price of a barrel of oil has lost about 20% from its July peak of $78.40 on the New York Mercantile Exchange. On Friday, crude oil declined 1cent to $62.90 a barrel. The price for gasoline fell, but heating oil edged up about 3.5 cents. In London, Brent crude declined 6 cents to $62.48 a barrel.
Full text on Forbes.com
Venezuela said on Friday it plans to cut crude oil production by about 50,000 barrels a day. On the same day, Nigeria said it plans to hold back about 120,000 barrels a day.
The cuts, scheduled to take place Oct. 1, are an apparent attempt to jack prices as demand falls.
The price of a barrel of oil has lost about 20% from its July peak of $78.40 on the New York Mercantile Exchange. On Friday, crude oil declined 1cent to $62.90 a barrel. The price for gasoline fell, but heating oil edged up about 3.5 cents. In London, Brent crude declined 6 cents to $62.48 a barrel.
Full text on Forbes.com
Emerging Market currencies hurt by risk aversion
Forex markets punished emerging market currencies this week, due to heightened economic and political risk. Many traders had piled into carry trade positions, selling low-yielding, stable currencies in favor of higher-yielding, but more volatile currencies. After a string of negative political and economic developments, many traders unwound their positions and moved back into the more stable currencies. After all was said and done, the currencies of Turkey and South Africa had declined more than 3%, while those of Brazil and Mexico declined by almost 2%. However, analysts now feel the sudden drop was nothing more than a long overdue correction, and remain bullish on emerging markets. Daily News and Analysis Online reports:
Post that shake-out, high risk currencies enjoyed a strong rebound. Low interest rates encouraged speculators to re-enter carry trades and build up large speculative positions, going short on the Yen and Swiss Franc.
Source Forex blog
Post that shake-out, high risk currencies enjoyed a strong rebound. Low interest rates encouraged speculators to re-enter carry trades and build up large speculative positions, going short on the Yen and Swiss Franc.
Source Forex blog
Income tax cuts benefit all payers
Americans of every income have benefited from a drop in federal income tax rates as Bush administration tax cuts enacted since 2000 took effect, an independent analysis of newly released IRS data shows.
But those earning $75,000 to $500,000 are shouldering a larger share of total taxes paid as millions more of them earn higher incomes and get hit with the Alternative Minimum Tax, the analysis also found.
The review by the Tax Foundation, a non-partisan research group that favors low taxes, provides one of the first detailed looks at the impact of federal tax changes phased in between 2000 and 2004.
Alluding to the political debate that often surrounds tax issues, Gerald Prante, a Tax Foundation economist, said, "It is true that in dollar amounts the rich have gained the most. But everybody's tax rates have fallen."
Full article
But those earning $75,000 to $500,000 are shouldering a larger share of total taxes paid as millions more of them earn higher incomes and get hit with the Alternative Minimum Tax, the analysis also found.
The review by the Tax Foundation, a non-partisan research group that favors low taxes, provides one of the first detailed looks at the impact of federal tax changes phased in between 2000 and 2004.
Alluding to the political debate that often surrounds tax issues, Gerald Prante, a Tax Foundation economist, said, "It is true that in dollar amounts the rich have gained the most. But everybody's tax rates have fallen."
Full article
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