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 News |
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| First Republic soars on IPO |
10 December 2010 |
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Investors were drawn to a $281m initial public offering of First Republic, a California bank, even as its private equity backers spun it off to the market just a few months after acquiring it from Bank of America.
The bank, which focuses on wealthy individuals, sold shares at $25.50, the midpoint of its targeted price range. The shares rose 9.5 per cent to $27.92 in trading, matching the average first-day gain for US issues, according to Renaissance Capital, an IPO advisory firm.
First Republic had been controlled by Merrill Lynch, which paid a heavy premium to acquire it in 2007 for $1.8bn. Merrill was then taken over by Bank of America, which sold the bank to private equity groups in June. After the offering, the bank was valued at $3.5bn.
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| London Markets |
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| Debt Woes No Drag for Europe Stocks as Strategists See 2011 Gain |
10 December 2010 |
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FTSE 100 Index |
European equities will climb 12 percent through the end of next year, beating 2010's gains, as rising earnings and record-low interest rates help companies overcome the sovereign-debt crisis, a Bloomberg survey of 13 strategists shows.
Goldman Sachs Group Inc., the most bullish forecaster, says the Stoxx Europe 600 Index will rally 20 percent because profits may expand twice as fast as the 14 percent average rate in more than 26,000 analyst estimates compiled by Bloomberg. Bayerische Motoren Werke AG and WPP Plc, the world's biggest advertising company, may boost income by an average 18 percent next year, according to data compiled by Bloomberg.
"People have issues with continued earnings growth and our view is don't be surprised if profit margins continue to expand," said JPMorgan Chase & Co.'s London-based strategist Mislav Matejka, who predicts European stocks will climb 12 percent by the end of 2011. "We think the pace of earnings growth expected by analysts could actually be too low."
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| US Markets |
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| Pimco Raises U.S. Growth Forecast on `Massive' Stimulus |
10 December 2010 |
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Nasdaq Index |
Pacific Investment Management Co., which manages the world's biggest bond fund, is raising its forecast for U.S. growth next year as policy makers pump a "massive amount" of stimulus into the economy, Chief Executive Officer Mohamed El-Erian said.
Pimco sees the economy growing 3 percent to 3.5 percent in the fourth quarter of next year from the same period of this year. That compares with its previous estimate for 2 percent to 2.5 percent growth and the 2.2 percent gain forecast for this year by the International Monetary Fund.
"The U.S. is using fiscal and monetary policy to try to attain escape velocity for the economy," El-Erian said in a telephone interview today from his office in Newport Beach, California. 'What we don't know yet is whether that will be enough not just to change the economy's trajectory for one year but to place it on a medium-term sustainable path.'
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| Japanese Markets |
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| Treasuries Rebound From Slide as S&P 500 Maintains 2-Year High |
10 December 2010 |
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Nikkei 225 Index |
Treasuries rebounded after an almost six-month high for 10-year yields attracted investors, while most U.S. stocks rose as the manager of the world's largest bond fund increased its estimate for economic growth because of government stimulus efforts.
The 10-year Treasury yield slipped five basis points to 3.22 percent at 4 p.m. in New York, extending declines after stronger-than-estimated demand at an auction of 30-year debt. The Standard & Poor's 500 Index rose 0.4 percent to 1,233.00 and the Stoxx Europe 600 Index advanced 0.4 percent, with both closing at the highest levels since September 2008. Gold halted a two-day slide, while copper slipped from a 31-month high. The Dollar Index pared an early rally and was little changed at 80.
Treasuries slid in the previous two sessions, sending the 10-year yield to its biggest back-to-back increase in more than two years, amid speculation President Barack Obama's compromise to extend tax cuts will require an increase in government borrowing. U.S. equities fluctuated for much of today amid concern House Democrats will block the tax-cut extension before stocks extended gains as Pacific Investment Management Co. said a 'massive amount' of stimulus will boost economic growth.
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