Business
SATURDAY, MARCH 19, 2011
Batelco to raise Zain Saudi funds DUBAI: Bahrain Telecommunications, which made a joint $950 million cash bid for a stake in Zain Saudi last week, is confident it will raise the necessary financing for the deal, its chief executive said yesterday. Batelco teamed up with Saudi billionaire Prince Alwaleed bin Talal’s Kingdom Holding to bid for Kuwaiti telco Zain’s 5 percent stake in Zain Saudi. The sale is a key condition of UAE telecoms firm Etisalat’s $12 billion offer for a 46 percent stake in Kuwaiti Zain as both firms operate in the kingdom. “Batelco Group, based on proposals received from financial institutions, is confident that it has the capability to raise debt up to $1.2 billion,” Batelco CEO Peter Kaliaropoulos said in an email yesterday. “Events in the last few weeks may increase in the short term the cost for such financing but based on feedback from (Gulf) and international banks, there is healthy interest and a competitive spirit, from banking partners to deliver the required financing.” Middle East unrest, including in Bahrain where the government imposed a state of emergency last week, has raised risk premiums. The escalating political tension has closed Bahrain’s access to international capital markets and banks are nervous of taking any Bahraini risk in a week which saw Saudi troops deployed in the Gulf Arab state to quell unrest. — Reuters
gold to hit record $1,480 NEW YORK/LONDON: Gold rose for a third straight day yesterday after a unilateral ceasefire declared by Libyan leader Muammar Gaddafi failed to calm investor nerves as political tensions heightened across the Arab world. Bullion also benefited from a weaker dollar as traders braced for more official action after the G7 nations coordinated to intervene into the yen, and as fresh political unrest was reported in Yemen, Syria, Bahrain and Saudi Arabia. “It’s the concern about what would happen in Libya. Will Gaddafi really stick up to the cease-fire? That’s probably the only reason why gold’s being bid up at all,” said Dennis Gartman, author of the Gartman Letter, a daily investment newsletter. Gartman, however, said that recent weaker volume suggested gold could lack the conviction to rise further, and the metal’s gains on Friday were largely driven by a dollar drop. Gold rose 1 percent to $1,418.70 an ounce by 12:35 pm. Earlier in the session, the metal was little changed after China’s central bank raised lenders’ required reserves by 50 basis points, a move viewed by some as a confirmation of gold’s inflation-hedge appeal. — Reuters
Wall St rebounds after three days of decline Investors seek bargains, S&P 500 back in black for year NEW YORK: Wall Street rebounded after three days of declines, but the advance could be temporary as concerns about Japan’s nuclear crisis persisted. The S&P 500 recovered after giving up the year’s gains, but options activity showed traders are increasing hedges against another decline in stocks. “As the headlines come out of Japan, there are more nervous traders liquidating their long positions in futures put on this morning,” said Steve Leuer, stock-index futures trader at X-FA Trading firm in Chicago. The recent losses brought out investors looking for bargains. However, volume was lackluster, with just 7.89 billion shares changing hands on the New York Stock Exchange, the American Stock Exchange and Nasdaq, below last year’s daily average of 8.47 billion and down sharply from Wednesday’s record for the year of 11.1 billion shares traded. If the market is to refocus on fundamentals, more news from bellwethers like FedEx Corp will help. The world’s largest cargo airline forecast improved revenue on strong demand, lifting shares 3.1 percent to $87.89. The Dow Jones Transport average gained 1.4 percent. A total of about 1.16 million option contracts traded in the S&P 500 as puts outpaced calls by a ratio of 2.15, above its recent daily ratio of 1.93, according to options analytics firm Trade Alert. A put option conveys the right to sell the stock at a fixed price at any time up until expiration. The Dow Jones industrial average was up 161.21 points, or 1.39 percent, at 11,774.51. The Standard & Poor’s 500 Index was up 16.81 points, or 1.34 percent, at 1,273.69. The Nasdaq
NEW YORK: Traders work on the floor of the New York Stock Exchange yesterday. — AP
Composite Index was up 19.23 points, or 0.73 percent, at 2,636.05. But the S&P 500 is down 2.3 percent for the week so far. Stocks’ recent declines followed a rally of nearly six months. The rally in itself has prompted predictions of a market correction. From a chart standpoint “I don’t see anything right now that suggests that the near-term decline is over,” said Chris Burba, short-term market technician at Standard & Poor’s in New York. The CBOE Volatility Index VIX, Wall Street’s fear gauge, fell 10 percent to 26.46 as stocks rose, but the VIX was still high compared with the recent average of about 20. The market could see greater volatility on Friday as the two-day quadruple witching period ends. Quadruple witching is the expiration and settlement of March stock index futures, single-stock futures, equity options and stock index options.
On Thursday, natural resource stocks helped lead the market as commodity prices rebounded. Tensions in the Middle East and North Africa drove oil prices up sharply. Brent crude for May delivery gained $4.40 to $115.00 a barrel. Cliffs Natural Resources Inc rose 5.8 percent to $88.60 while Chevron Corp gained 2.7 percent to $102.24. The S&P energy index shot up 3.1 percent to be the leading sector, even though the prospect of higher fuel costs in general have hurt investor enthusiasm. A correction at this point could be short-lived, some analysis suggests. Cleveland Rueckert, an analyst at Birinyi Associates Inc. in Stamford, Connecticut, said in a note: “Since 1945, 5 percent declines that occur during a broader rally last an average of 41 days and decline 8.29 percent. “If the averages hold, the S&P 500 will bottom at 1,232” on March 31, Rueckert wrote. - Reuters
Continental recalls tires on Ford pickups
Caterpillar reports strong sales in Feb
DETROIT: Continental AG’s North American unit is recalling about 391,000 tires, most of which were put on new Ford Motor Co F-250 and F-350 heavy duty pickup trucks, US regulators said yesterday. About 330,000 were put on the new trucks, and some were sold as replacements, Continental said of the tires made in Mexico from May 2007 to September 2008. Ford spokesman Wes Sherwood said the tire recall affected 65,000 pickup trucks in the United States and Canada. Vehicles affected are trucks for model years 2008 and 2009. Each truck typically has four tires and a spare. Ford will be providing Continental with its owner information. Continental will replace the tires, some of which may experience uneven wear and vibration, the company said in a letter to the US National Highway Traffic Safety Administration. — Reuters
PEORIA: Caterpillar says February was another strong month for sales of its mining and construction equipment, and global sales grew 59 percent over last year. The company reported sales figures yesterday in documents filed with the Securities and Exchange Commission. Caterpillar says equipment sales were strongest in Latin America, which reported a 76 percent jump over the previous year. But even in the weakest region of Europe, Africa and the Middle East, sales grew 53 percent in February. Caterpillar’s sales figures are watched closely because its results are considered an indicator of the health of the economy. Engine sales also improved for Caterpillar but not as much as machinery sales. Caterpillar says total engine sales grew 31 percent. — Reuters
PEORIA: In this file photo provided by Caterpillar Inc., a Bucyrus 495HR Electric Mining Shovel is shown loading a Catepillar 793C mining truck at a mine site, near Peoria, Ill. Caterpillar said yesterday, February was another strong month for sales of its mining and construction equipment, and global sales grew 59 percent over last year. — AP