(CNNMoney.com) -- IBM said Tuesday that it will increase its quarterly dividend by 10% and will repurchase an additional $3 billion of its stock.
The Armonk, N.Y.-based tech company will pay a dividend of 55 cents per share on June 10 to shareholders of record on May 8. That's up 5 cents from its most recent dividend and marks the 14th year in a row that IBM has hiked its dividend. Last year, the company raised its quarterly payout by 25%.
IBM also said it would extend its share repurchase program after the board authorized another $3 billion of buybacks. As of March 31, the company had $3.7 billion remaining from its previous $15 billion repurchase authorization in February 2008, giving IBM authorization to buy back a total of $6.7 billion so far in 2009.
Though the company's dividend increase and share repurchase allotment is down from last year, an IBM spokesman said economic headwinds were not a factor.
"We think it's an appropriate amount that allows the company to reinvest in business," he said.
The moves come amid a slew of announcements from IBM in the past two weeks, including a commitment to cloud computing, a return to the IBM branding on its networking unit and the development of a computer that can compete on the TV game show "Jeopardy!"
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Tuesday, April 28, 2009
Monday, April 27, 2009
Allianz, American Express Sold ICBC Shares for $1.9 Billion
(Bloomberg) -- Allianz SE and American Express Co. sold a combined $1.9 billion of shares in Industrial & Commercial Bank of China Ltd., the world’s largest lender by market value, as a lockup on their stakes ended.
Allianz sold 3.216 billion Hong Kong-listed shares, or half of its stake, while American Express sold 638 million shares, Beijing-based ICBC said in e-mailed statements. The sales, to private investors, were made at HK$3.86 apiece, a 4 percent discount to yesterday’s closing price, according to a document sent to investors.
U.S. and European banks have sold $7.9 billion of shares in China’s lenders this year, including the Allianz and American Express sales, as they seek to bolster capital eroded by the global financial crisis. ICBC shares rose as much as 8 percent in Hong Kong trading.
“This is good news to a large extent as it removes the overhang on the shares,” said Sheng Nan, a Shanghai-based analyst at UOB Kayhian Investment Co. “The fact that they can close a deal with investors so fast implies that there’s strong demand and confidence for Chinese banking shares.”
Shares of ICBC, the world’s third most valuable company, fell 1.5 percent this year to yesterday in Hong Kong on anticipation of a potential sale by investors, making it the second-worst performer among the nation’s six publicly traded lenders in that market. ICBC’s Hong Kong shares rose 2.7 percent at 11:18 a.m. to HK$4.13, giving investors an instant profit of $134 million on paper.
Goldman Stake
Goldman Sachs Group Inc. last month agreed to keep 80 percent of its almost 16.5 billion shares for at least another year, easing concerns about added supply of stock. Goldman managed the Allianz and American Express share sales.
ICBC said yesterday first-quarter profit increased 6.2 percent to 35.15 billion yuan ($5.15 billion) on record credit growth and lower provisions for non-performing loans. Chairman Jiang Jianqing, who has more than doubled ICBC’s profit during the past three years, seized on China’s stimulus package to dole out loans for construction projects.
ICBC boosted lending by a record 636.4 billion yuan in the first quarter, an amount greater than the annual gross domestic product of Vietnam, as it tried to help the government stem an economic slide. China’s economy grew 6.1 percent in the first three months, the weakest in almost a decade.
Read more here
Allianz sold 3.216 billion Hong Kong-listed shares, or half of its stake, while American Express sold 638 million shares, Beijing-based ICBC said in e-mailed statements. The sales, to private investors, were made at HK$3.86 apiece, a 4 percent discount to yesterday’s closing price, according to a document sent to investors.
U.S. and European banks have sold $7.9 billion of shares in China’s lenders this year, including the Allianz and American Express sales, as they seek to bolster capital eroded by the global financial crisis. ICBC shares rose as much as 8 percent in Hong Kong trading.
“This is good news to a large extent as it removes the overhang on the shares,” said Sheng Nan, a Shanghai-based analyst at UOB Kayhian Investment Co. “The fact that they can close a deal with investors so fast implies that there’s strong demand and confidence for Chinese banking shares.”
Shares of ICBC, the world’s third most valuable company, fell 1.5 percent this year to yesterday in Hong Kong on anticipation of a potential sale by investors, making it the second-worst performer among the nation’s six publicly traded lenders in that market. ICBC’s Hong Kong shares rose 2.7 percent at 11:18 a.m. to HK$4.13, giving investors an instant profit of $134 million on paper.
Goldman Stake
Goldman Sachs Group Inc. last month agreed to keep 80 percent of its almost 16.5 billion shares for at least another year, easing concerns about added supply of stock. Goldman managed the Allianz and American Express share sales.
ICBC said yesterday first-quarter profit increased 6.2 percent to 35.15 billion yuan ($5.15 billion) on record credit growth and lower provisions for non-performing loans. Chairman Jiang Jianqing, who has more than doubled ICBC’s profit during the past three years, seized on China’s stimulus package to dole out loans for construction projects.
ICBC boosted lending by a record 636.4 billion yuan in the first quarter, an amount greater than the annual gross domestic product of Vietnam, as it tried to help the government stem an economic slide. China’s economy grew 6.1 percent in the first three months, the weakest in almost a decade.
Read more here
Thursday, April 23, 2009
IMF's Strauss-Kahn says crisis still far from over
(Reuters) - IMF Managing Director Dominique Strauss-Kahn said on Thursday the global economic crisis still had "long months" to go before it was finished.
"Despite some red lights and green lights ... our belief is the crisis is far from over," Strauss-Kahn told a press conference on the eve of a regular spring meeting of the International Monetary Fund.
There are "still long months of economic distress in front of us," he said, despite some evidence of economic stability due to the impact of powerful stimulus measures undertaken by authorities. But he reiterated the IMF's forecast that the world economy would recover in the first half of next year.
"The good news is we still believe the recovery can take place in the first semester of 2010," Strauss-Kahn said.
However, he stressed this meant banks must cleanse their balance sheets of bad loans, accumulated during the U.S. housing bubble, that undermined confidence and froze credit.
Read more here
"Despite some red lights and green lights ... our belief is the crisis is far from over," Strauss-Kahn told a press conference on the eve of a regular spring meeting of the International Monetary Fund.
There are "still long months of economic distress in front of us," he said, despite some evidence of economic stability due to the impact of powerful stimulus measures undertaken by authorities. But he reiterated the IMF's forecast that the world economy would recover in the first half of next year.
"The good news is we still believe the recovery can take place in the first semester of 2010," Strauss-Kahn said.
However, he stressed this meant banks must cleanse their balance sheets of bad loans, accumulated during the U.S. housing bubble, that undermined confidence and froze credit.
Read more here
Wednesday, April 22, 2009
Asian Stocks Fluctuate Amid Earnings Concern; Nomura Declines
(Bloomberg) -- Asian stocks fluctuated, as concern of mounting losses at financial companies countered gains by automakers and consumer-related companies.
Nomura Holdings Inc. fell 3.9 percent in Tokyo after Nikkei English News reported the brokerage may report a full-year loss of about 700 billion yen ($7.2 billion) tomorrow. Foster’s Group Ltd., Australia’s biggest beer and winemaker, surged 6.6 percent as a bid by Kirin Holdings Co. for rival Lion Nathan Ltd. fueled takeover speculation. Toyota Motor Corp., the world’s largest automaker, climbed 2.1 percent after Goldman Sachs Group Inc. recommended investors buy the stock.
The MSCI Asia Pacific Index added 0.3 percent to 88.41 at 12:54 p.m. in Tokyo. It earlier fell 0.3 percent. The gauge has climbed 25 percent from a more than five-year low on March 9 as optimism grew that government and central bank policies will pull the global economy out of recession.
“The market is looking for a fresh catalyst following the recent rally,” said Nicole Sze, a Singapore-based investment analyst at Bank Julius Baer & Co., which manages $350 billion. “I don’t think we will see a sharp drop as a lot of investors are still waiting to buy on retracements.”
Japan’s Nikkei 225 Stock Average fell 0.4 percent to 8,694.62. Hong Kong’s Hang Seng Index added 0.7 percent and China’s Shanghai Composite index slipped 1 percent. Most markets in Asia declined except South Korea, Australia, Malaysia and Thailand.
Mitsui & Co., Japan’s second-largest trading house, lost 5 percent after missing its earnings forecast. PCCW Ltd., Hong Kong’s biggest phone carrier, slumped 12 percent as Chairman Richard Li abandoned his $2.1 billion bid. China Cosco Holdings Ltd., the world’s biggest operator of dry-bulk ships, dropped 2.7 percent in Hong Kong after posting a second-half loss.
U.S. Sales
Futures on Standard & Poor’s 500 Index lost 0.3 percent. The gauge erased a rally to finish down 0.8 percent in New York yesterday after Morgan Stanley reported a first-quarter loss of 57 cents a share, sending financial stocks lower. Analysts expected a loss of 8 cents.
Nomura slumped 3.9 percent to 575 yen on the Nikkei report. The company said it wasn’t the source of the story.
“Investors are still concerned about credit risk and companies with weak financial health will inevitably underperform in the market,” said Hisakazu Amano, head of fund management at Tokyo-based T&D Asset Management Co., which oversees about $39 billion.
Toyota gained 2.1 percent to 3,840 yen after Goldman Sachs upgraded the stock to “buy” from “neutral.” Toyota, Honda Motor Co. and Nissan Motor Co. will likely boost their U.S. market share by 7 percentage points through 2010, Kota Yuzawa, an analyst at Goldman wrote in a report. Nissan, Japan’s third- largest carmaker, rose 1.8 percent to 517 yen.
Read more here
Nomura Holdings Inc. fell 3.9 percent in Tokyo after Nikkei English News reported the brokerage may report a full-year loss of about 700 billion yen ($7.2 billion) tomorrow. Foster’s Group Ltd., Australia’s biggest beer and winemaker, surged 6.6 percent as a bid by Kirin Holdings Co. for rival Lion Nathan Ltd. fueled takeover speculation. Toyota Motor Corp., the world’s largest automaker, climbed 2.1 percent after Goldman Sachs Group Inc. recommended investors buy the stock.
The MSCI Asia Pacific Index added 0.3 percent to 88.41 at 12:54 p.m. in Tokyo. It earlier fell 0.3 percent. The gauge has climbed 25 percent from a more than five-year low on March 9 as optimism grew that government and central bank policies will pull the global economy out of recession.
“The market is looking for a fresh catalyst following the recent rally,” said Nicole Sze, a Singapore-based investment analyst at Bank Julius Baer & Co., which manages $350 billion. “I don’t think we will see a sharp drop as a lot of investors are still waiting to buy on retracements.”
Japan’s Nikkei 225 Stock Average fell 0.4 percent to 8,694.62. Hong Kong’s Hang Seng Index added 0.7 percent and China’s Shanghai Composite index slipped 1 percent. Most markets in Asia declined except South Korea, Australia, Malaysia and Thailand.
Mitsui & Co., Japan’s second-largest trading house, lost 5 percent after missing its earnings forecast. PCCW Ltd., Hong Kong’s biggest phone carrier, slumped 12 percent as Chairman Richard Li abandoned his $2.1 billion bid. China Cosco Holdings Ltd., the world’s biggest operator of dry-bulk ships, dropped 2.7 percent in Hong Kong after posting a second-half loss.
U.S. Sales
Futures on Standard & Poor’s 500 Index lost 0.3 percent. The gauge erased a rally to finish down 0.8 percent in New York yesterday after Morgan Stanley reported a first-quarter loss of 57 cents a share, sending financial stocks lower. Analysts expected a loss of 8 cents.
Nomura slumped 3.9 percent to 575 yen on the Nikkei report. The company said it wasn’t the source of the story.
“Investors are still concerned about credit risk and companies with weak financial health will inevitably underperform in the market,” said Hisakazu Amano, head of fund management at Tokyo-based T&D Asset Management Co., which oversees about $39 billion.
Toyota gained 2.1 percent to 3,840 yen after Goldman Sachs upgraded the stock to “buy” from “neutral.” Toyota, Honda Motor Co. and Nissan Motor Co. will likely boost their U.S. market share by 7 percentage points through 2010, Kota Yuzawa, an analyst at Goldman wrote in a report. Nissan, Japan’s third- largest carmaker, rose 1.8 percent to 517 yen.
Read more here
Monday, April 20, 2009
Warren Buffett on Wells Fargo
(Fortune) -- As the largest shareholder of Wells Fargo through Berkshire Hathaway (BRKB), Warren Buffett knows the San Francisco bank deeply. He first invested before Wells Fargo was bought by Norwest, where current Wells Chairman Dick Kovacevich was CEO. As part of his reporting for his feature on Wells Fargo (WFC, Fortune 500), Fortune Editor at Large Adam Lashinsky spoke at length with Buffett by telephone on March 26.
Fortune: How is Wells Fargo unique?
Warren Buffett: It's sort of hard to imagine a business that large being unique. You'd think they'd need to be like any other bank by the time they got to that size. Those guys have gone their own way. That doesn't mean that everything they've done has been right. But they've never felt compelled to do anything because other banks were doing it, and that's how banks get in trouble, when they say, "Everybody else is doing it, why shouldn't I?"
What about all the smart analysts who think no big bank can survive in its present form, including Wells Fargo?
Almost 20 years ago they were saying the same thing. In the end banking is a very good business unless you do dumb things. You get your money extraordinarily cheap and you don't have to do dumb things. But periodically banks do it, and they do it as a flock, like international loans in the 80s. You don't have to be a rocket scientist when your raw material cost is less than 1-1/2%. So I know that you can have a model that works fine and Wells has come closer to doing that right than any other big bank by some margin. They get their money cheaper than anybody else. We're the low-cost producer at Geico in auto insurance among big companies. And when you're the low-cost producer - whether it's copper, or in banking - it's huge.
Read more here
Fortune: How is Wells Fargo unique?
Warren Buffett: It's sort of hard to imagine a business that large being unique. You'd think they'd need to be like any other bank by the time they got to that size. Those guys have gone their own way. That doesn't mean that everything they've done has been right. But they've never felt compelled to do anything because other banks were doing it, and that's how banks get in trouble, when they say, "Everybody else is doing it, why shouldn't I?"
What about all the smart analysts who think no big bank can survive in its present form, including Wells Fargo?
Almost 20 years ago they were saying the same thing. In the end banking is a very good business unless you do dumb things. You get your money extraordinarily cheap and you don't have to do dumb things. But periodically banks do it, and they do it as a flock, like international loans in the 80s. You don't have to be a rocket scientist when your raw material cost is less than 1-1/2%. So I know that you can have a model that works fine and Wells has come closer to doing that right than any other big bank by some margin. They get their money cheaper than anybody else. We're the low-cost producer at Geico in auto insurance among big companies. And when you're the low-cost producer - whether it's copper, or in banking - it's huge.
Read more here
Thursday, April 16, 2009
JP Morgan boosts Wall St
Wall Street hesitated, then rallied on Thursday, lifted by better-than-expected profits from JPMorgan Chase and a drop in new US jobless claims that fuelled hopes for an economic rebound.
The Dow Jones Industrial Average climbed 94.46 points (1.18%) to 8 124.08 at the closing bell in a choppy session that saw swings between positive and negative territory.
The Nasdaq composite vaulted 43.64 points (2.68%) to 1 670.44 while the Standard & Poor's 500 broad-market index rose 12.92 points (1.52%) to a preliminary close of 864.98.
Market action came after US banking giant JPMorgan Chase announced a net profit of $2.1bn in the first quarter of 2009.
The figure was slightly down from 2008 figures for the same period, but was better than most market analysts had predicted and suggested a potential recovery in the troubled banking sector.
Read more here
The Dow Jones Industrial Average climbed 94.46 points (1.18%) to 8 124.08 at the closing bell in a choppy session that saw swings between positive and negative territory.
The Nasdaq composite vaulted 43.64 points (2.68%) to 1 670.44 while the Standard & Poor's 500 broad-market index rose 12.92 points (1.52%) to a preliminary close of 864.98.
Market action came after US banking giant JPMorgan Chase announced a net profit of $2.1bn in the first quarter of 2009.
The figure was slightly down from 2008 figures for the same period, but was better than most market analysts had predicted and suggested a potential recovery in the troubled banking sector.
Read more here
Wednesday, April 15, 2009
China's economy expands 6.1% in first quarter
(MarketWatch) -- China's economy grew at a slightly better-than-expected rate in the first quarter, buoyed by strong fixed-asset investment and firming industrial production, adding to an emerging picture of an economy that's on the mend.
"All in all, we take this number positively, we think this marks the trough of the existing cycle, but there is dichotomy between consumer prices and asset prices," said Credit Suisse's chief Asian economist Dong Tao in Hong Kong.
Gross domestic product expanded 6.1% in the first quarter from a year earlier, after expanding 6.8% in the fourth quarter, government data showed Thursday.
Expectations were a for a 6.0% expansion in gross domestic product for the period, according to the median forecast of 15 economists surveyed by Dow Jones Newswires.
Tao cautioned that while the overall tone was positive, China was far from cruising its way to recovery in the months ahead.
"It's a mixed bag of news, the export side is weaker than expected," he said.
Among other highlights, fixed-asset investment expanded 30.3% in March from a year earlier.
Read more at MarketWatch
"All in all, we take this number positively, we think this marks the trough of the existing cycle, but there is dichotomy between consumer prices and asset prices," said Credit Suisse's chief Asian economist Dong Tao in Hong Kong.
Gross domestic product expanded 6.1% in the first quarter from a year earlier, after expanding 6.8% in the fourth quarter, government data showed Thursday.
Expectations were a for a 6.0% expansion in gross domestic product for the period, according to the median forecast of 15 economists surveyed by Dow Jones Newswires.
Tao cautioned that while the overall tone was positive, China was far from cruising its way to recovery in the months ahead.
"It's a mixed bag of news, the export side is weaker than expected," he said.
Among other highlights, fixed-asset investment expanded 30.3% in March from a year earlier.
Read more at MarketWatch
GM bonds: Big trouble for small investors
(CNNMoney.com) -- Harley VanDeloo, a 69-year old retiree in Thousand Oaks, Calif., has resigned himself to losing an important piece of his retirement income: interest payments from $25,000 worth of General Motors bonds.
The bonds were due to pay VanDeloo about $1,000 twice a year, an important supplement to his social security benefits that he said are his main source of income.
"It's not going to kill us, but it's significant," he said about the loss of income.
VanDeloo, a self-described car enthusiast who says his GM van is the best car he's ever owned, bought the bonds at a 20% discount just over a year ago. He believed GM (GM, Fortune 500) was on the verge of a turnaround and that the bonds were relatively safe despite having already been downgraded to junk bond status by the rating agencies.
He said he didn't care about the bonds' prices. He was attracted instead to the better than 8% yield the bonds paid. "They were due to be paying off well after I'm gone," he said about the debt, which matures in 2033.
VanDeloo said he had been hoping that GM would avoid bankruptcy right up through January of this year. But as the company's sales and financial performance continued to sink, so did his hopes for his income stream. The January payments did arrive, but he thinks the automaker is likely to default on its debt before the next payment is due in June.
Read more at CNNMoney
The bonds were due to pay VanDeloo about $1,000 twice a year, an important supplement to his social security benefits that he said are his main source of income.
"It's not going to kill us, but it's significant," he said about the loss of income.
VanDeloo, a self-described car enthusiast who says his GM van is the best car he's ever owned, bought the bonds at a 20% discount just over a year ago. He believed GM (GM, Fortune 500) was on the verge of a turnaround and that the bonds were relatively safe despite having already been downgraded to junk bond status by the rating agencies.
He said he didn't care about the bonds' prices. He was attracted instead to the better than 8% yield the bonds paid. "They were due to be paying off well after I'm gone," he said about the debt, which matures in 2033.
VanDeloo said he had been hoping that GM would avoid bankruptcy right up through January of this year. But as the company's sales and financial performance continued to sink, so did his hopes for his income stream. The January payments did arrive, but he thinks the automaker is likely to default on its debt before the next payment is due in June.
Read more at CNNMoney
Tuesday, April 14, 2009
Acer Aims for Hewlett-Packard’s Laptop Lead Ahead of 2011 Goal
(Bloomberg) -- Acer Inc. may overtake Hewlett- Packard Co. as the largest notebook-computer vendor before its 2011 target, led by sales of low-cost netbooks and slim laptops that run for eight hours, Chairman J.T. Wang said.
“I look at our competitors as being very passive in the netbook segment,” Wang, 54, said in an interview yesterday in Taipei, where Acer is based. “We are leading our competitors by six to nine months.”
Acer widened its lead over Dell Inc. and narrowed the gap with Hewlett-Packard last year as sales of its Aspire One helped the Taiwanese company capture the top spot in the market for sub- $500 netbooks, the fastest-growing segment of the personal- computer industry. Acer’s low-power Aspire Timeline series, introduced last week, may help the PC vendor extend market-share gains this year, according to Citigroup Inc. and Morgan Stanley.
“Acer reacts to market dynamics faster than other players, which allows them to keep gaining share in this low-price environment,” said Calvin Huang, a Taipei-based analyst at Daiwa Securities Group Inc., who recommends investors buy the stock. “Some earnings growth is good because most of the market is looking at a decline this year.”
Wang declined to specify when the company will take the lead in the notebook market. Acer expects operating profit, which measures sales less operating expenses, will rise this year after it increased 38 percent to NT$14.1 billion ($420 million) last year, he said.
Read more at Bloomberg
“I look at our competitors as being very passive in the netbook segment,” Wang, 54, said in an interview yesterday in Taipei, where Acer is based. “We are leading our competitors by six to nine months.”
Acer widened its lead over Dell Inc. and narrowed the gap with Hewlett-Packard last year as sales of its Aspire One helped the Taiwanese company capture the top spot in the market for sub- $500 netbooks, the fastest-growing segment of the personal- computer industry. Acer’s low-power Aspire Timeline series, introduced last week, may help the PC vendor extend market-share gains this year, according to Citigroup Inc. and Morgan Stanley.
“Acer reacts to market dynamics faster than other players, which allows them to keep gaining share in this low-price environment,” said Calvin Huang, a Taipei-based analyst at Daiwa Securities Group Inc., who recommends investors buy the stock. “Some earnings growth is good because most of the market is looking at a decline this year.”
Wang declined to specify when the company will take the lead in the notebook market. Acer expects operating profit, which measures sales less operating expenses, will rise this year after it increased 38 percent to NT$14.1 billion ($420 million) last year, he said.
Read more at Bloomberg
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