By Brian Ellsworth
RIO DE JANEIRO
Fri Sep 3, 2010 2:24pm EDT
RIO DE JANEIRO (Reuters) - Brazilian state oil company Petrobras on Friday filed to sell up to $64.5 billion of new stock -- the largest in capital markets history -- sending its stock sharply higher after months of uncertainty that dragged on its share price.
The global stock offer could be expanded to as much as $74.7 billion if underwriters exercise a "greenshoe" option to sell an additional 564 million shares to meet extraordinary demand as the company raises funds for the world's biggest oil exploration program.
That would easily top the $22.1 billion initial public offering by Agricultural Bank of China (601288.SS) earlier this year, as well as the $36.8 billion share sale by Japanese telecommunications company NTT (9432.T) in 1987.
Despite lingering investor concerns about growing government sway over Petrobras (PBR.N) and the possibility of share dilution, the announcement helped investors regain confidence in a stock that slumped as much as 25 percent this year on uncertainty over the plan.
"It's better to have a tragic end than an unending tragedy," said Marcio Macedo, who oversees about $40 million of assets at Humaita Investimentos in Sao Paulo.
"Investors may not have liked the way they carried out the deal, but this is a world-class asset. There's no way you can't own it."
Petrobras preferred shares were up 4 percent at 28.71 reais in late afternoon trade, near the stock's high for the day.
The company filed to sell 1.59 billion new preferred shares (PETR4.SA) and 2.17 billion new common shares (PETR3.SA). At Thursday's closing prices, it would raise 67.8 billion reais ($39.2 billion) with the common shares sale and 43.8 billion reais ($25.4 billion) from the preferred shares.
The offer includes a $43 billion state-backed swap of oil for shares in which Petrobras will trade new shares for rights to produce 5 billion barrels of offshore oil.
The company faces skepticism from some investors who have questioned the price of $8.51 per barrel for the reserves to be used in the oil-for-shares swap, considerably higher than the $5 to $6 per barrel that analysts said was fair.
Petrobras expects to begin bookbuilding on Friday and price the share sale on September 23.
The plan has become the financial cornerstone of the company's $224 billion, five-year investment plan meant to turn Brazil into a major oil exporter by tapping crude buried deep under the ocean floor in a region known as the subsalt.
Petrobras ranks fifth in oil and gas production among the world's publicly listed oil companies, according to its own figures, with output of 2.53 million barrels of oil equivalent, an amount nearly equal to that of U.S.-based Chevron (CVX.N).
It expects by 2017 that its output will surpass that of Shell (RDSa.L), BP (BP.L), Exxon Mobil (XOM.N) and Chevron, mostly due to new production from the subsalt wells.
INVESTOR INTEREST
Government leaders have also said they plan to boost the state's participation in Petrobras' capital to around 40 percent from near 30 percent, which has left some investors nervous about greater state sway in the company.
Analysts say the large size of the swap of oil for shares with respect to the entire stock sale -- authorized by shareholders for up to $85 billion -- shows the government expects it will be able to pick up a considerable number of shares not purchased by private investors.
The stock offering will be led by Banco Bradesco (BBDC4.SA) in coordination with Bank of America Merrill Lynch (BAC.N), Citigroup (C.N), Banco Itau (ITUB4.SA), Morgan Stanley (MS.N), and Banco Santander Brasil. It will also be co-managed by BTG Pactual BTG.UL and Banco do Brasil (BBAS3.SA).
Some investors say the concerns about the government's stake have already been priced in and that the company is still a compelling investment given its unique access to quality oil reserves in a world that is quickly running out of them.
"I'm finally seeing a very clear pathway to the completion of this whole process, and that's a huge positive," said Marc Fogassa, a managing partner at Hedgefort Capital Management, which owns Petrobras shares.
Minority shareholder participation in the offering will be crucial since it will bring in much-needed cash for the company to shore up its balance sheet, stretched by heavy borrowing to finance the ambitious offshore plans.
The government has authorized state banks, including development lender BNDES, to purchase stock that minority shareholders do not subscribe.
Oil for the exchange will come from at least six fields in the subsalt region, most of which are adjacent to major offshore discoveries such as Franco and Tupi finds.
(Additional reporting by Elzio Barreto in Sao Paulo; Editing by Todd Benson and Steve Orlofsky)
Sunday, September 5, 2010
Saturday, September 4, 2010
Dow now positive for 2010
Stocks close higher on jobs optimism
Dow up 2.9% for week, turns positive for year
By Kristina Peterson and Jonathan Cheng,
NEW YORK (MarketWatch) -- Investors pushed stocks up for the fourth day in a row, sailing into the long weekend on a high note as an encouraging jobs report sent stocks to their best pre-Labor Day week in two decades.
The Dow Jones Industrial Average /quotes/comstock/10w!i:dji/delayed (DJIA 10,448, +127.83, +1.24%) finished up 127.98 points, or 1.24%, to 10447.93, putting the Dow up 2.9% on the week -- its first positive weekly showing since the beginning of August. The Dow also edged back into positive territory for the year.
The market leaped after nonfarm payrolls data showed jobs slowing at half the rate predicted by economists. The Labor Department said the U.S. lost 54,000 jobs last month, about half of what economists had expected and matching the level of revised losses recorded the previous month.
The unemployment rate, calculated using a separate household survey, edged up to 9.6%, as expected, from 9.5% for the previous two months.
TODAY'S TOP MARKET STORIES
S&P 500 (1 YEAR)
1,3001,2001,1001,00010OMMJ
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• Today's biggest advancing, declining stocks
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THE MARKET BY SECTOR
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• Tech Stocks
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EXPANDED MARKETS NEWS
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• See all the latest markets video /conga/story/misc/markets.html 84614 "In the last two weeks or so, things have been starting to firm up, and today's jobs numbers really put an exclamation mark on that," said Phil Orlando, equity strategist at Federated Investors. "We're feeling a lot more comfortable about our view, than those thinking about a double dip."
Orlando predicted that stocks would pick up after Labor Day, as vacationing money managers return to an economy whose outlook has improved.
"If you had a bearish bent in the middle of August when you went on vacation, the story seems different today -- it seems constructive," he said.
Not everyone was impressed. Bob Browne, chief investment officer at Northern Trust Global Investments, said the addition of new private-sector jobs is "not enough to absorb new entrants into the work force let alone put the unemployed from the past few years back to work," adding: "We have a long way to go."
But even slowing job losses was "enough to give us a catalyst on a light day going into a long weekend," he said.
The Nasdaq Composite /quotes/comstock/10y!i:comp (COMP 2,234, +33.74, +1.53%) rose 1.53% to 2233.75, up 3.7% on the week. The Standard & Poor's 500-stock index /quotes/comstock/21z!i1:in\x (SPX 1,105, +14.41, +1.32%) tacked on 1.32% to 1104.47, putting its advance for the week at 3.7%.
Goldman Sachs Group /quotes/comstock/13*!gs/quotes/nls/gs (GS 147.29, +7.51, +5.37%) rose 5.4% as financial stocks led the day's and week's gains. Morgan Stanley /quotes/comstock/13*!ms/quotes/nls/ms (MS 26.66, +0.98, +3.82%) gained 3.8%, J.P. Morgan Chase /quotes/comstock/13*!jpm/quotes/nls/jpm (JPM 39.17, +1.01, +2.65%) added 2.7% and Genworth Financial /quotes/comstock/13*!gnw/quotes/nls/gnw (GNW 12.03, +0.68, +5.99%) advanced 6%.
Friday's jobs numbers followed recent reports on manufacturing and housing that also came in above expectations, extending a notable reversal from a long string of disappointing data that had driven the Dow's biggest August drop since 2001.
The Politics of 9.6% UnemploymentColumnist Mary Anastasia O'Grady breaks down the August jobs report and the implications for November elections. Editorial Writer Anne Jolis in London discusses a new development in the disturbing Climategate emails.
Volume was light, with about 3.6 billion shares changing hands in NYSE composite trading, short of 2010's daily average of about five billion shares.
"The fear is really building towards a sharp movement upwards rather than downwards," said Joe Greco, managing director for Meridian Equity Partners. "Most of the bullets have been used from the sell side, and any strong data is going to fuel the momentum trade and short covering."
The strong start to the month comes as investors have been encouraged that a double-dip recession may be avoided. But the economic recovery still looks weak; data released Friday by the Institute for Supply Management showed a slowing expansion in the U.S. nonmanufacturing sector last month.
The U.S. Dollar Index /quotes/comstock/11j!i:dxy0 (DXY 82.02, +0.64, +0.79%) , reflecting the U.S. currency against a basket of six others, declined 0.5%. Treasurys slipped, pushing the yield on the 10-year note /quotes/comstock/31*!ust10y (UST10Y 2.71, 0.00, 0.00%) up to 2.71%. Crude-oil futures dropped to $74.34 a barrel, while gold futures also slipped.
On the deals front, Goldcorp /quotes/comstock/13*!gg/quotes/nls/gg (GG 42.84, -0.96, -2.19%) slipped 2.3% after the gold miner agreed to acquire all outstanding shares of Andean Resources /quotes/comstock/11t!and (CA:AND 6.98, +2.17, +45.11%) for $3.4 billion. Andean's principal asset is the Cerro Negro gold project located in Argentina. Read more about GoldCorp's deal.
Shares of Take-Two Interactive Software Inc. /quotes/comstock/15*!ttwo/quotes/nls/ttwo (TTWO 9.50, +0.65, +7.34%) rallied 10% after the company reported an unexpected quarterly profit and said it expects a fiscal-year profit. Read more about Take-Two's results.
Tax-preparation company H&R Block Inc. /quotes/comstock/13*!hrb/quotes/nls/hrb (HRB 13.30, +0.73, +5.81%) climbed 5.8% after reporting a smaller-than-expected loss from continuing operations.
Campbell Soup Co. /quotes/comstock/13*!cpb/quotes/nls/cpb (CPB 36.21, -1.11, -2.97%) slipped 2.4% after its fiscal fourth-quarter earnings jumped 64% on prior-year write-downs, but revenue at its soup business weakened
Dow up 2.9% for week, turns positive for year
By Kristina Peterson and Jonathan Cheng,
NEW YORK (MarketWatch) -- Investors pushed stocks up for the fourth day in a row, sailing into the long weekend on a high note as an encouraging jobs report sent stocks to their best pre-Labor Day week in two decades.
The Dow Jones Industrial Average /quotes/comstock/10w!i:dji/delayed (DJIA 10,448, +127.83, +1.24%) finished up 127.98 points, or 1.24%, to 10447.93, putting the Dow up 2.9% on the week -- its first positive weekly showing since the beginning of August. The Dow also edged back into positive territory for the year.
The market leaped after nonfarm payrolls data showed jobs slowing at half the rate predicted by economists. The Labor Department said the U.S. lost 54,000 jobs last month, about half of what economists had expected and matching the level of revised losses recorded the previous month.
The unemployment rate, calculated using a separate household survey, edged up to 9.6%, as expected, from 9.5% for the previous two months.
TODAY'S TOP MARKET STORIES
S&P 500 (1 YEAR)
1,3001,2001,1001,00010OMMJ
• Market Snapshot: U.S. stocks in focus
• Today's biggest advancing, declining stocks
• Sign up for free, breaking-news email alerts
Earnings Watch
Earnings, updates, warnings
THE MARKET BY SECTOR
Industries
• Tech Stocks
Energy Stocks
Retail Stocks
• Financials
Airline Stocks
Pharma and Biotech
EXPANDED MARKETS NEWS
• Bonds
Oil news
Gold news
• Currencies
Market Data
Economic Calendar
• See all the latest markets video /conga/story/misc/markets.html 84614 "In the last two weeks or so, things have been starting to firm up, and today's jobs numbers really put an exclamation mark on that," said Phil Orlando, equity strategist at Federated Investors. "We're feeling a lot more comfortable about our view, than those thinking about a double dip."
Orlando predicted that stocks would pick up after Labor Day, as vacationing money managers return to an economy whose outlook has improved.
"If you had a bearish bent in the middle of August when you went on vacation, the story seems different today -- it seems constructive," he said.
Not everyone was impressed. Bob Browne, chief investment officer at Northern Trust Global Investments, said the addition of new private-sector jobs is "not enough to absorb new entrants into the work force let alone put the unemployed from the past few years back to work," adding: "We have a long way to go."
But even slowing job losses was "enough to give us a catalyst on a light day going into a long weekend," he said.
The Nasdaq Composite /quotes/comstock/10y!i:comp (COMP 2,234, +33.74, +1.53%) rose 1.53% to 2233.75, up 3.7% on the week. The Standard & Poor's 500-stock index /quotes/comstock/21z!i1:in\x (SPX 1,105, +14.41, +1.32%) tacked on 1.32% to 1104.47, putting its advance for the week at 3.7%.
Goldman Sachs Group /quotes/comstock/13*!gs/quotes/nls/gs (GS 147.29, +7.51, +5.37%) rose 5.4% as financial stocks led the day's and week's gains. Morgan Stanley /quotes/comstock/13*!ms/quotes/nls/ms (MS 26.66, +0.98, +3.82%) gained 3.8%, J.P. Morgan Chase /quotes/comstock/13*!jpm/quotes/nls/jpm (JPM 39.17, +1.01, +2.65%) added 2.7% and Genworth Financial /quotes/comstock/13*!gnw/quotes/nls/gnw (GNW 12.03, +0.68, +5.99%) advanced 6%.
Friday's jobs numbers followed recent reports on manufacturing and housing that also came in above expectations, extending a notable reversal from a long string of disappointing data that had driven the Dow's biggest August drop since 2001.
The Politics of 9.6% UnemploymentColumnist Mary Anastasia O'Grady breaks down the August jobs report and the implications for November elections. Editorial Writer Anne Jolis in London discusses a new development in the disturbing Climategate emails.
Volume was light, with about 3.6 billion shares changing hands in NYSE composite trading, short of 2010's daily average of about five billion shares.
"The fear is really building towards a sharp movement upwards rather than downwards," said Joe Greco, managing director for Meridian Equity Partners. "Most of the bullets have been used from the sell side, and any strong data is going to fuel the momentum trade and short covering."
The strong start to the month comes as investors have been encouraged that a double-dip recession may be avoided. But the economic recovery still looks weak; data released Friday by the Institute for Supply Management showed a slowing expansion in the U.S. nonmanufacturing sector last month.
The U.S. Dollar Index /quotes/comstock/11j!i:dxy0 (DXY 82.02, +0.64, +0.79%) , reflecting the U.S. currency against a basket of six others, declined 0.5%. Treasurys slipped, pushing the yield on the 10-year note /quotes/comstock/31*!ust10y (UST10Y 2.71, 0.00, 0.00%) up to 2.71%. Crude-oil futures dropped to $74.34 a barrel, while gold futures also slipped.
On the deals front, Goldcorp /quotes/comstock/13*!gg/quotes/nls/gg (GG 42.84, -0.96, -2.19%) slipped 2.3% after the gold miner agreed to acquire all outstanding shares of Andean Resources /quotes/comstock/11t!and (CA:AND 6.98, +2.17, +45.11%) for $3.4 billion. Andean's principal asset is the Cerro Negro gold project located in Argentina. Read more about GoldCorp's deal.
Shares of Take-Two Interactive Software Inc. /quotes/comstock/15*!ttwo/quotes/nls/ttwo (TTWO 9.50, +0.65, +7.34%) rallied 10% after the company reported an unexpected quarterly profit and said it expects a fiscal-year profit. Read more about Take-Two's results.
Tax-preparation company H&R Block Inc. /quotes/comstock/13*!hrb/quotes/nls/hrb (HRB 13.30, +0.73, +5.81%) climbed 5.8% after reporting a smaller-than-expected loss from continuing operations.
Campbell Soup Co. /quotes/comstock/13*!cpb/quotes/nls/cpb (CPB 36.21, -1.11, -2.97%) slipped 2.4% after its fiscal fourth-quarter earnings jumped 64% on prior-year write-downs, but revenue at its soup business weakened
Friday, September 3, 2010
Liberia, VerOleum to invest $2.15b in oil palm
Written by Bloomberg
Friday, 03 September 2010 11:01
Golden Agri-Resources, part of Indonesia’s Sinar Mas Group, said the government of Liberia and Golden VerOleum (Liberia) Inc. plan to invest US$1.6 billion ($2.15 billion) in oil palm plantations in the African nation.
Friday, 03 September 2010 11:01
Golden Agri-Resources, part of Indonesia’s Sinar Mas Group, said the government of Liberia and Golden VerOleum (Liberia) Inc. plan to invest US$1.6 billion ($2.15 billion) in oil palm plantations in the African nation.
Genting Hong Kong +18.3%; Eyes on Manila gaming
Written by The Edge
Friday, 03 September 2010 13:03
Genting Hong Kong (S21.SG) +11.7% at new 52-week high of US$0.355 ($0.478) on strong volume as players turn attention from sister company Genting Singapore (G13.SG) to cruise operator, hopeful it could also enjoy latter’s gaming success given its 50% stake in Resorts World Manila, says Dow Jones.
“Since RWM’s entry (in 2009), the overall Philippines gaming market has more than doubled year to date. This is another example of new properties growing gaming markets rather than cannibalising the existing pie,” says a broker.
Friday, 03 September 2010 13:03
Genting Hong Kong (S21.SG) +11.7% at new 52-week high of US$0.355 ($0.478) on strong volume as players turn attention from sister company Genting Singapore (G13.SG) to cruise operator, hopeful it could also enjoy latter’s gaming success given its 50% stake in Resorts World Manila, says Dow Jones.
“Since RWM’s entry (in 2009), the overall Philippines gaming market has more than doubled year to date. This is another example of new properties growing gaming markets rather than cannibalising the existing pie,” says a broker.
8 Singapore companies make it to Forbes' "Best under a billion' list
Eight Singapore companies made it to this year's Forbes' "Best Under A Billion" list, up from the five that were included in the previous year's list.
Related story:
» Singapore's 40 richest in 2010
The yearly list highlights the 200 top-performing small and medium enterprise firms from close to 13,000 publicly listed Asia-Pacific companies with actively traded shares and sales between US$5 million ($6.75 million)and US$1 billion.
The final 200 are selected based on earnings growth, sales growth, and shareholders' return on equity in the past 12 months and over three years.
China had the most entries at 71, followed by India at 39. India is the top gainer, with 19 new entries this year.
Singapore's best under a billion
Click on thumbnail to view
Japan, which had 24 entries last year, managed only 2 entries this year due to local domestic woes.
The 200 winning companies will be honored at the Forbes Asia "Best Under A Billion" award ceremony and dinner in Hong Kong on November 23, 2010
Related story:
» Singapore's 40 richest in 2010
The yearly list highlights the 200 top-performing small and medium enterprise firms from close to 13,000 publicly listed Asia-Pacific companies with actively traded shares and sales between US$5 million ($6.75 million)and US$1 billion.
The final 200 are selected based on earnings growth, sales growth, and shareholders' return on equity in the past 12 months and over three years.
China had the most entries at 71, followed by India at 39. India is the top gainer, with 19 new entries this year.
Singapore's best under a billion
Click on thumbnail to view
Japan, which had 24 entries last year, managed only 2 entries this year due to local domestic woes.
The 200 winning companies will be honored at the Forbes Asia "Best Under A Billion" award ceremony and dinner in Hong Kong on November 23, 2010
SMX off the blocks, focuses on getting it right
Siow Li Sen
Wed, Sep 01, 2010
The Business Times
(SINGAPORE) The Singapore Mercantile Exchange (SMX) finally began operations yesterday, after some two years of planning and preparation.
The commodities exchange went live with four contracts: two crude oil benchmarks (euro-denominated Brent Crude, and West Texas Intermediate or WTI); a currency pair (euro-US$ currency futures contract); and the first gold futures contract in Singapore to be settled via physical delivery.
Two more contracts, both currency pairs - US$-Australia dollar and US$-yen - will be launched next, said SMX chief executive Thomas McMahon at a press conference.
SMX founder and vice-chairman Jignesh Shah said the initial focus is on setting up the ecosystem and getting the processes, risk management, research and systems right.
Liquidity will then follow, said Mr Shah, to the key question why SMX will succeed when commodities trading on its rival, the Singapore Exchange (SGX), has met with mixed fortunes.
He said SMX is not setting any volume targets in its first year.
'What's important is not to be chasing the volume; the foundation of any exchange is to have the right regulatory framework, the right risk management processes and systems,' he said.
'Just to share our Indian experience: for the first year, we were among the first 50 but in the sixth year, we are now sixth largest in the world,' said Mr Shah.
The Multi-Commodity Exchange (MCX), set up in 2003 by Mr Shah's Financial Technologies group, today commands about 80 per cent of India's commodities futures market. Last year, it became the world's largest exchange for trading in silver (in terms of the number of futures contracts traded); the second largest for gold, copper and natural gas; and the third largest for oil.
Mr McMahon added SMX is focused on creating the right contracts which meet specific market needs of Asian industry players.
For instance, its gold futures contract is the first physical contract to be settled in Singapore.
He is also confident that SMX's two crude oil contracts will meet market demand, given that Singapore is the third largest oil refining centre in the world.
He noted that, currently, oil traders here could be trading in New York and London but, increasingly, financial sector reform will lead to more scrutiny of cross-border flows.
That means 'splitting the collaterals' will become more difficult as regulators impose more rules, he said.
Mr McMahon also disclosed that 68 firms have expressed interest in becoming SMX members.
Wed, Sep 01, 2010
The Business Times
(SINGAPORE) The Singapore Mercantile Exchange (SMX) finally began operations yesterday, after some two years of planning and preparation.
The commodities exchange went live with four contracts: two crude oil benchmarks (euro-denominated Brent Crude, and West Texas Intermediate or WTI); a currency pair (euro-US$ currency futures contract); and the first gold futures contract in Singapore to be settled via physical delivery.
Two more contracts, both currency pairs - US$-Australia dollar and US$-yen - will be launched next, said SMX chief executive Thomas McMahon at a press conference.
SMX founder and vice-chairman Jignesh Shah said the initial focus is on setting up the ecosystem and getting the processes, risk management, research and systems right.
Liquidity will then follow, said Mr Shah, to the key question why SMX will succeed when commodities trading on its rival, the Singapore Exchange (SGX), has met with mixed fortunes.
He said SMX is not setting any volume targets in its first year.
'What's important is not to be chasing the volume; the foundation of any exchange is to have the right regulatory framework, the right risk management processes and systems,' he said.
'Just to share our Indian experience: for the first year, we were among the first 50 but in the sixth year, we are now sixth largest in the world,' said Mr Shah.
The Multi-Commodity Exchange (MCX), set up in 2003 by Mr Shah's Financial Technologies group, today commands about 80 per cent of India's commodities futures market. Last year, it became the world's largest exchange for trading in silver (in terms of the number of futures contracts traded); the second largest for gold, copper and natural gas; and the third largest for oil.
Mr McMahon added SMX is focused on creating the right contracts which meet specific market needs of Asian industry players.
For instance, its gold futures contract is the first physical contract to be settled in Singapore.
He is also confident that SMX's two crude oil contracts will meet market demand, given that Singapore is the third largest oil refining centre in the world.
He noted that, currently, oil traders here could be trading in New York and London but, increasingly, financial sector reform will lead to more scrutiny of cross-border flows.
That means 'splitting the collaterals' will become more difficult as regulators impose more rules, he said.
Mr McMahon also disclosed that 68 firms have expressed interest in becoming SMX members.
Higher dividends follow firms' return to health
Uma Shankari
Mon, Aug 30, 2010
The Business Times
(SINGAPORE) There were few surprises from companies that reported full-year results in the recent reporting season. Most turned in better earnings or lower losses, in line with the global economic recovery.
And to reward shareholders, many said that they would pay out higher dividends than for 2009, citing improved operating profits and net cash positions.
Data compiled by BT showed that as at 5pm last Friday, 73 companies had reported their financial results for the year ended June 30, 2010. And of these firms, 59 reported profits while the remaining 14 recorded losses.
Most companies (some 74 per cent) performed better this year, either turning in higher profits (36 companies) or lower losses (nine) or is back in the black (nine).
Companies, which generally attributed their better year-on-year showings to the better operating environment, also sought to thank investors for sticking by them through the recent lean times.
Of the 45 companies that turned in either higher profits or moved from losses to profits, close to 70 per cent will pay out higher dividends for FY 2010 compared to the previous year. The six companies with the largest net profits for the financial year ended June 30 - Olam International, Singapore Exchange (SGX), Wing Tai Holdings, GuocoLand, Hsu Fu Chi International and Sim Lian Group - all proposed higher dividends for 2010.
Olam reported exceptionally strong fourth-quarter results, which led to full-year results which were well ahead of expectations. The company will pay a total dividend of 4.5 cents a share this year, up from 3.5 cents in 2009.
Wing Tai will also pay out one cent more - it has proposed a dividend of five cents a share for 2010, up from four cents in 2009.
SGX, which said that the recently ended financial year was its second best since the company listed in November 2000, proposed a final dividend of 15.75 cents per share, bringing the total dividend for FY 2010 to 27 cents per share. In addition, the company's board also increased SGX's base dividend commitment to 16 cents per share effective from FY 2011, payable on a quarterly basis.
Sim Lian Group threw in another treat together with higher dividends; the property firm also proposed a bonus issue to increase its capital base to reflect its growth and business expansion and to give 'due recognition' to shareholders for their continued support. It proposed a dividend of 3.7 cents a share, up from 1.4 cents a year ago.
But perhaps the most sincere gesture came from probe card distribution and services solutions provider Ellipsiz. The firm posted a net loss in 2009 after its factory and office property at Joo Koon Crescent was hit by a fire. Now, it is proposing a special cash dividend of 1.1 cents a share from its one-time income - which was boosted by insurance claim income of $22.3 million - to thank shareholders. This will be paid out on top of a final cash dividend of 0.15 cents.
'We would like to thank our shareholders for your patience and support during the difficult period. Your vote of confidence is important, and we look forward to your continued support,' said Ellipsiz chief executive Melvin Chan.
Last year, Mr Chan said that 2009 was a 'a very difficult year' for the group and no dividends were declared.
Mon, Aug 30, 2010
The Business Times
(SINGAPORE) There were few surprises from companies that reported full-year results in the recent reporting season. Most turned in better earnings or lower losses, in line with the global economic recovery.
And to reward shareholders, many said that they would pay out higher dividends than for 2009, citing improved operating profits and net cash positions.
Data compiled by BT showed that as at 5pm last Friday, 73 companies had reported their financial results for the year ended June 30, 2010. And of these firms, 59 reported profits while the remaining 14 recorded losses.
Most companies (some 74 per cent) performed better this year, either turning in higher profits (36 companies) or lower losses (nine) or is back in the black (nine).
Companies, which generally attributed their better year-on-year showings to the better operating environment, also sought to thank investors for sticking by them through the recent lean times.
Of the 45 companies that turned in either higher profits or moved from losses to profits, close to 70 per cent will pay out higher dividends for FY 2010 compared to the previous year. The six companies with the largest net profits for the financial year ended June 30 - Olam International, Singapore Exchange (SGX), Wing Tai Holdings, GuocoLand, Hsu Fu Chi International and Sim Lian Group - all proposed higher dividends for 2010.
Olam reported exceptionally strong fourth-quarter results, which led to full-year results which were well ahead of expectations. The company will pay a total dividend of 4.5 cents a share this year, up from 3.5 cents in 2009.
Wing Tai will also pay out one cent more - it has proposed a dividend of five cents a share for 2010, up from four cents in 2009.
SGX, which said that the recently ended financial year was its second best since the company listed in November 2000, proposed a final dividend of 15.75 cents per share, bringing the total dividend for FY 2010 to 27 cents per share. In addition, the company's board also increased SGX's base dividend commitment to 16 cents per share effective from FY 2011, payable on a quarterly basis.
Sim Lian Group threw in another treat together with higher dividends; the property firm also proposed a bonus issue to increase its capital base to reflect its growth and business expansion and to give 'due recognition' to shareholders for their continued support. It proposed a dividend of 3.7 cents a share, up from 1.4 cents a year ago.
But perhaps the most sincere gesture came from probe card distribution and services solutions provider Ellipsiz. The firm posted a net loss in 2009 after its factory and office property at Joo Koon Crescent was hit by a fire. Now, it is proposing a special cash dividend of 1.1 cents a share from its one-time income - which was boosted by insurance claim income of $22.3 million - to thank shareholders. This will be paid out on top of a final cash dividend of 0.15 cents.
'We would like to thank our shareholders for your patience and support during the difficult period. Your vote of confidence is important, and we look forward to your continued support,' said Ellipsiz chief executive Melvin Chan.
Last year, Mr Chan said that 2009 was a 'a very difficult year' for the group and no dividends were declared.
Analysis: Japan dilemma as economic dependence on China grows
By Linda Sieg
TOKYO
Thu Sep 2, 2010 12:27am EDT
TOKYO (Reuters) - Japan's growing dependence on China for growth grates with concerns over its expanding military reach, deepening a dilemma over how to engage with its giant neighbor even as the two trade places in economic rankings.
But while the interdependence raises the risks for the world's second- and third-biggest economies if relations sour, it also boosts incentives to keep ties on track.
"It raises the stakes," said Jeffrey Kingston, director of Asian studies at Temple University's Tokyo campus.
"But ... Japan has a clear interest in developing better political and diplomatic relations precisely because of the greater economic interdependence."
News that China had surpassed Japan as the world's second-biggest economy in the second quarter grabbed global headlines in August, underscoring China's rise and deepening pessimism over whether Japan can even keep third place.
Even more telling is Japan's deepening dependence on China's dynamism for growth in a mature economy plagued with an aging, shrinking population and a shortage of policy solutions.
Japan's exports to China topped those to the United States last year, accounting for nearly 20 percent of all its exports.
That figure will probably rise to 35 percent by 2026, when China will likely oust America from the top global spot, said Chi Hung Kwan at Nomura Institute of Capital Markets Research.
Japan's direct investment in China has also soared, exceeding 70 percent of its investment in North America last year, with more and more goods being made for local sale, not export.
"For Japanese companies, China is becoming more and more important, not just as the workshop of the world, but as the market of the world," Kwan said at a luncheon with reporters.
Sino-Japanese relations, long plagued by China's memories of Tokyo's wartime aggression and present rivalry over resources and territory, have warmed since a deep chill in 2001-2006, when then-premier Junichiro Koizumi visited the Yasukuni Shrine, seen by Beijing as a symbol of Japanese militarism.
Last weekend, a delegation of Japanese cabinet ministers met their Chinese counterparts in Beijing for high-level economic talks -- the third such annual dialogue -- and agreed on the need to work together for global growth.
WARY
But even as economic ties deepen, Japan is increasingly wary of China's intentions as it spends more of its wealth on defense and shows growing willingness to project military power.
A survey by the China Daily in August showed that 52.7 percent of Chinese respondents saw Japan as a military threat, while 70.8 percent of Japanese felt the same about China.
"Japan's military budget has been stable for 20 years and China's military budget has grown 20 times in the past 20 years," said Shinichi Kitaoka, University of Tokyo professor who advised the conservative Liberal Democratic Party (LDP) government that was ousted last year by the Democratic Party of Japan (DPJ).
"The big gap may create some imbalances and is already creating imbalances in the East China Sea and South China Sea."
While a panel of experts advising the government as it undertakes a major review of defense policies gave a nod to such concerns, the wording was restrained, a reflection of Japan's dilemma as it balances economic interests with security worries.
"Japan's security position requires an extremely delicate policy. On the one hand, it is important to make sure that the cost of unfriendly, non-peaceful behavior is very costly ... and there has to be a very robust defense posture together with the United States," said Chikako Kawakatsu Ueki, a Waseda University professor.
"At the same time, if you are talking about China, everyone knows that China's well-being as an economic power is important to Japan, to the United States, the region and the globe."
The dilemma is a delicate one for Japan's ruling Democratic Party, which swept to power for the first time a year ago, ousting the LDP after more than 50 years of almost non-stop rule.
The party pledged in its campaign last year to forge a more equal relationship with security ally Washington while improving ties with Asian neighbors including China, sparking concerns in some U.S. circles that it was tilting toward Beijing.
"China is becoming more and more important to Japan year in and year out. Everyone accepts that. The debate is how best to handle this -- engagement or constraint," said Phil Deans, a professor of international affairs at Temple in Tokyo.
"The pressure to pursue both strategies is increasing which is making the contradictions more obvious."
Experts say Japan, distracted by its own economic woes and internecine strife in the ruling party, will likely respond with a mix of reliance on the U.S. military deterrence and beefing up its own forces within the elastic constraints of a pacifist constitution, while pursuing better diplomatic ties with Beijing.
"There are three decisions they can make: contain China, engage China or ... just live in a really uncomfortable situation and hope they don't end with the worst of both worlds," Deans said. "I think maybe they can live in this very difficult place."
(Editing by Sugita Katyal)
TOKYO
Thu Sep 2, 2010 12:27am EDT
TOKYO (Reuters) - Japan's growing dependence on China for growth grates with concerns over its expanding military reach, deepening a dilemma over how to engage with its giant neighbor even as the two trade places in economic rankings.
But while the interdependence raises the risks for the world's second- and third-biggest economies if relations sour, it also boosts incentives to keep ties on track.
"It raises the stakes," said Jeffrey Kingston, director of Asian studies at Temple University's Tokyo campus.
"But ... Japan has a clear interest in developing better political and diplomatic relations precisely because of the greater economic interdependence."
News that China had surpassed Japan as the world's second-biggest economy in the second quarter grabbed global headlines in August, underscoring China's rise and deepening pessimism over whether Japan can even keep third place.
Even more telling is Japan's deepening dependence on China's dynamism for growth in a mature economy plagued with an aging, shrinking population and a shortage of policy solutions.
Japan's exports to China topped those to the United States last year, accounting for nearly 20 percent of all its exports.
That figure will probably rise to 35 percent by 2026, when China will likely oust America from the top global spot, said Chi Hung Kwan at Nomura Institute of Capital Markets Research.
Japan's direct investment in China has also soared, exceeding 70 percent of its investment in North America last year, with more and more goods being made for local sale, not export.
"For Japanese companies, China is becoming more and more important, not just as the workshop of the world, but as the market of the world," Kwan said at a luncheon with reporters.
Sino-Japanese relations, long plagued by China's memories of Tokyo's wartime aggression and present rivalry over resources and territory, have warmed since a deep chill in 2001-2006, when then-premier Junichiro Koizumi visited the Yasukuni Shrine, seen by Beijing as a symbol of Japanese militarism.
Last weekend, a delegation of Japanese cabinet ministers met their Chinese counterparts in Beijing for high-level economic talks -- the third such annual dialogue -- and agreed on the need to work together for global growth.
WARY
But even as economic ties deepen, Japan is increasingly wary of China's intentions as it spends more of its wealth on defense and shows growing willingness to project military power.
A survey by the China Daily in August showed that 52.7 percent of Chinese respondents saw Japan as a military threat, while 70.8 percent of Japanese felt the same about China.
"Japan's military budget has been stable for 20 years and China's military budget has grown 20 times in the past 20 years," said Shinichi Kitaoka, University of Tokyo professor who advised the conservative Liberal Democratic Party (LDP) government that was ousted last year by the Democratic Party of Japan (DPJ).
"The big gap may create some imbalances and is already creating imbalances in the East China Sea and South China Sea."
While a panel of experts advising the government as it undertakes a major review of defense policies gave a nod to such concerns, the wording was restrained, a reflection of Japan's dilemma as it balances economic interests with security worries.
"Japan's security position requires an extremely delicate policy. On the one hand, it is important to make sure that the cost of unfriendly, non-peaceful behavior is very costly ... and there has to be a very robust defense posture together with the United States," said Chikako Kawakatsu Ueki, a Waseda University professor.
"At the same time, if you are talking about China, everyone knows that China's well-being as an economic power is important to Japan, to the United States, the region and the globe."
The dilemma is a delicate one for Japan's ruling Democratic Party, which swept to power for the first time a year ago, ousting the LDP after more than 50 years of almost non-stop rule.
The party pledged in its campaign last year to forge a more equal relationship with security ally Washington while improving ties with Asian neighbors including China, sparking concerns in some U.S. circles that it was tilting toward Beijing.
"China is becoming more and more important to Japan year in and year out. Everyone accepts that. The debate is how best to handle this -- engagement or constraint," said Phil Deans, a professor of international affairs at Temple in Tokyo.
"The pressure to pursue both strategies is increasing which is making the contradictions more obvious."
Experts say Japan, distracted by its own economic woes and internecine strife in the ruling party, will likely respond with a mix of reliance on the U.S. military deterrence and beefing up its own forces within the elastic constraints of a pacifist constitution, while pursuing better diplomatic ties with Beijing.
"There are three decisions they can make: contain China, engage China or ... just live in a really uncomfortable situation and hope they don't end with the worst of both worlds," Deans said. "I think maybe they can live in this very difficult place."
(Editing by Sugita Katyal)
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