timesofmalta.com

Vodafone keeps Verizon payout to make up for European slump

Kate Holton and Paul Sandle, Reuters — Wed, 22 May 2013 00:04:00 +0200

Vodafone will reinvest a $3.2 billion dividend from its healthy US arm to counter weakness in southern Europe that contributed to the largest ever quarterly fall in the group’s main revenue measure. The British firm is trying to decide whether to sell Verizon Wireless, its profitable US unit in what could be the world’s third largest deal to support its struggling core operations. Majority owner Verizon Communications wants to buy Vodafone’s 45 per cent stake but chief executive officer Vittorio Colao once again refused to discuss the possibility, saying that he had nothing new to add. “Verizon is performing well, it’s an excellent investment,” Colao told reporters yesterday as the company reported its results. “If there were anything to announce we would announce it.” The contribution from Verizon and cost cuts elsewhere helped Vodafone, the world’s second largest mobile operator, to offset the increasing economic and regulatory pressures in Europe, to post profits slightly ahead of forecasts. It was also affected by the timing of a leap year last year. But Vodafone posted a 4.2 per cent quarterly fall in organic service revenue, in line with forecasts, but worse than the 2.6...

Yahoo’s rise in Asia offsets risk from Tumblr bet

Alexei Oreskovic, Reuters — Wed, 22 May 2013 00:03:00 +0200

Yahoo Inc chief executive Marissa Mayer’s $1.1 billion acquisition of blogging service Tumblr will be a test of her ability to revive the aging web portal. Luckily for her, her performance may be graded generously. Mayer faces plenty of challenges in her efforts to turn six-year-old Tumblr into a money-spinner, not least among them retaining users while devising new types of non-intrusive online ads outside of Yahoo’s traditional area of expertise. And then there is Tumblr’s hefty price tag: a sum that equates to a fifth of Yahoo’s cash. But some investors and analysts say that Wall Street is more focused on the rising value of Yahoo’s Asian assets, such as its 24 per cent slice of China’s Alibaba, than on actual business operations. That means the 37-year-old executive faces less immediate pressure to prove that Yahoo’s biggest acquisition in years is a profitable one. “Overall, I’m relatively sceptical, but I don’t think it matters much to the stock,” Macquarie Research analyst Ben Schachter said of the deal. “Say they destroy 100 per cent of the value and drive Tumblr into the ground. It’s probably less than a dollar per share in value,” he said. If Mayer’s bet delivers,...

European shares stall near peaks

Wed, 22 May 2013 00:02:00 +0200

European shares stalled around multi-year peaks yesterday, bolstered by a crop of upbeat corporate reports but pinned back by concerns about a possible end to the US Federal Reserve remains committed to stimulus policies. Such stimulus by global central banks – including asset purchases and ultra low interest rates – has been the key driver of equity market gains over the past year. Thus, markets have been unsettled by growing talk from some Fed officials – such as Chicago Fed president Charles Evans overnight – that bond buying could end in coming months. The focus is now on Fed chairman Ben Bernanke, due to speak today, to clarify the official policy. “The reaction lower that we’ve seen today reflects these (Fed) comments,” said Myrto Sokou, analyst at Sucden Financial. “Following the high levels that we had recently... there is a modest correction lower in European equities ahead of the Fed tomorrow, with the main focus on Bernanke.” The EuroSTOXX 50 index of eurozone blue chips fell 0.1 per cent to 2,821.65 points, with charts backing the case for a retreat with a ‘hanging man’ pattern – a significant early sell-off followed by a recovery to around opening levels. “The...

Google’s Glass gadget prompts privacy fears

Reuters — Wed, 22 May 2013 00:01:00 +0200

Google staged four discussions expounding on the finer points of its Glass wearable computer during last week’s developer conference. Missing from the agenda, however, was a session on etiquette when using the recording-capable gadget, which some attendees faithfully wore everywhere – including to the crowded bathrooms. Google Glass, a cross between a mobile computer and eyeglasses that can both record video and surf the internet, is now available to a select few but is already among the year’s most buzz-worthy new gadgets. The device has geeks all aflutter but is unnerving everyone from lawmakers to casino operators worried about the potential for hitherto unimagined privacy and policy violations. “I had a friend and we’re sitting at dinner and about 30 minutes into it she said, ‘You know those things freak me out’,” said Allen Firstenberg, a technology consultant at the Google developers conference. He has been wearing Glass for about a week but offered to take them off for the comfort of his dinner companion. On another occasion, Firstenberg admitted to walking into a bathroom wearing his Glass without realising it. Many believe wearable computers represent the next big shift...

Daily currency report

Western Union Business Solutions — Wed, 22 May 2013 00:01:00 +0200

The US dollar slipped on profit-taking and may remain lower ahead of key updates from Ben Bernanke and the Federal Reserve’s latest meeting minutes. The greenback was knocked back on approach to three-year highs on a trade-weighted basis as investors consider the likelihood of Fed chairman Bernanke indicating that an end to bond purchases may be near. Weakness in the US currency is supporting sterling, with the British pound moving above recent six-week lows before UK inflation data and minutes from the Bank of England. Evidence of declining price pressures and a Central Bank more comfortable with the UK economy should encourage traders to buy sterling. The yen was surprisingly lifted by one Japanese official whose comments suggested that the currency’s weakness may have reached its limit. Despite the yen’s more positive tone, the unit may find itself under pressure following the Bank of Japan’s latest monetary policy announcement. Sterling The pound climbed by as much as one per cent against the US dollar, moving clear of Friday’s six-week low supported by strong UK house price data and comments from Bank of England Governor Mervyn King, who said there were signs of a modest...

MIA’s equity trades up to new record

Edward Rizzo — Tue, 21 May 2013 17:33:00 +0200

Malta International Airport’s equity continued its positive run with a gain of a further 0.5 per cent this morning up to a new record level of €2. A total of 13,500 shares changed hands at this level today with further bids remaining outstanding in the market at this level and lowest offers now at €2.10. Earlier, the company held its annual general meeting and the net final dividend of 4c per share will be distributed to all shareholders on June 5. MIA’s CEO Markus Klaushofer delivered a detailed presentation to shareholders highlighting the record financial results of 2012, the various milestones during the year and also the positive start to 2013 with a growth of 8.7 per cent in passenger numbers reflecting the improved airline capacity. Elsewhere, higher trading activity was recorded in the equities of Bank of Valletta and GO. The MSE Share Index edge 0.36 per cent higher to 3,350.436 points reflecting the recovery in BOV and the gain by MIA. Bank of Valletta plc’s share price gained 1.4 per cent and recovered to the €2.23 level on increased volumes of 47,930 shares as renewed demand for the equity satisfied most of the outstanding supply on the market. The bank will be...

Interest rate set

Tue, 21 May 2013 16:17:00 +0200

The interest rate in respect of the Floating Rate Malta Government Stock 2014 (V) linked to the six-month Euribor for the period May 23 to November 22 (both dates included) shall be 0.743 per cent, the Treasury said. Such rate is reset and based on the six-month Euribor as determined and published today at 0.293 per cent plus a spread of 45 basis points.

Yahoo! to buy Tumblr for $1.1bn

Reuters — Tue, 21 May 2013 00:05:00 +0200

Yahoo! Inc.’s board has approved a deal to buy blogging and social networking site Tumblr for $1.1 billion (€0.85 billion) in cash, the Wall Street Journal cited people familiar with the matter as saying. Such an acquisition would be Marissa Mayer’s largest deal since taking the helm of the once-iconic internet company in July 2012. Yahoo! is keen on fast-growing Tumblr because its younger user base would bolster the older website’s “cool factor”, the technology blog AllThingsD cited the sources as saying. Mayer, who spent 13 years at Google Inc., is trying to revitalise a former internet powerhouse that in recent years has struggled with declining business. On its homepage, Tumblr says it hosts 108 million blogs, with 50.7 billion posts between them. Yahoo! declined to comment, while Tumblr did not respond to requests for comment. The deal comes after a recent failed attempt to buy a controlling stake in French video site Dailymotion, owned by France Télécom SA. Tumblr, one of the more successful internet start-ups out of New York, has only just begun earning revenue through advertising. On its homepage, Tumblr says it hosts 108 million blogs, with 50.7 billion posts between...

Ryanair earnings beat forecasts

Reuters — Tue, 21 May 2013 00:04:00 +0200

Ryanair posted forecast-beating full-year earnings yesterday, buoyed by strong growth in fares and a sharp rise in charges for items such as baggage and in-flight refreshments. Shares in Europe’s largest budget airline jumped more than six per cent to a record high of €6.764. The company warned profit growth may slow sharply in the coming 12 months as it waits for new plane deliveries and margins are squeezed by higher fuel costs and cash-strapped consumers. Yet its cautious outlook was offset by a strong performance in the past year, buoyed by a six per cent increase in average fares as capacity growth in Europe stalled, while non-ticket income from extras such as baggage and reserved seating, which account for around one-fifth of revenue, was up by 20 per cent. Net profit reached €569 million in the 12 months to the end of March, up 13 per cent and ahead of an average analyst forecast of 558 million in a company poll. Ryanair chief financial officer Howard Millar said the company was making a cautious forecast for the current year due to poor visibility on bookings in the second half of the year. “We are extraordinarily modest at the start of the year,” he said. The group warned...

Money market report for the week ended May 17

Tue, 21 May 2013 00:03:00 +0200

On Monday, May 13, the European Central Bank (ECB) announced its weekly main refinancing operation (MRO). The auction was conducted the following day and attracted bids from euro area eligible counterparties of €103.84 billion, €6.45 billion lower than the bid amount in the previous week. The amount was allotted in full at a fixed rate equivalent to the prevailing MRO rate of 0.5 per cent, in accordance with current ECB policy. Also, on Tuesday, May 14, the ECB conducted an auction for a seven-day fixed-term deposit intended to absorb €201 billion. This operation was designed to sterilise the effect of purchases made under the Securities Markets Programme that were settled but had not yet matured by the previous Friday, May 10. The auction was carried out at a variable rate, with euro area eligible counterparties allowed to place up to four bids at a maximum rate of 0.5 per cent. It attracted bids amounting to €249.42 billion, with the ECB allotting €201 billion, or 80.59 per cent, of the total bid amount. The marginal rate on the auction was set at 0.08 per cent, with the weighted average rate at 0.05 per cent. On Wednesday, May 15, the ECB conducted a seven-day US dollar funding...

UK’s FTSE at highest closing level since 2000

Reuters — Tue, 21 May 2013 00:02:00 +0200

Britain’s benchmark equity index rose yesterday to its best closing level since late 2000, helped by rising bank stocks, and analysts said there was little holding it back from its all-time highs. Interest rate cuts and injections of liquidity by central banks have hit returns on bonds, driving investors to seek the better returns on offer from equities, spurring a global stock market rally over the last year. The blue-chip FTSE 100 index closed up by 0.5 per cent, or 32.57 points, at 6,755.63 points – its highest closing level since September 2000. Germany’s DAX and the US Dow Jones Industrial Average have already hit record highs this year, and IG analyst Brenda Kelly said the next target for the FTSE 100 could be its record intraday peak of 6,950.60 points in December 1999. Securequity sales trader Jawaid Afsar also said there was little to hold back the FTSE. “It’s grinding higher, and there’s no real selling pressure. Everyone keeps trying to call the top of the market but any wobble is another occasion to buy into it. “The momentum is still bullish,” said Afsar. Part-nationalised lender Royal Bank of Scotland led the FTSE leaderboard with a 4.5 per cent gain, which traders...

Daily currency report

Western Union Business Solutions — Tue, 21 May 2013 00:01:00 +0200

Robust US consumer confidence data was the latest buy signal for the US dollar, taking the currency close to three-year highs against a basket of currencies. Investors continue to pile into the greenback, extending long positions in anticipation of a hawkish Federal Reserve this week. At six-week lows, the British pound could rebound against its US counterpart, assisted perhaps by this week’s UK inflation data, government borrowing numbers and Bank of England minutes which may underline a steady central bank. The euro could stay in the firing line though and fall below recent five-week lows versus the US dollar if Thursday’s important eurozone PMI surveys point markets in the direction of more European Central Bank monetary support. Sterling Sterling’s struggles against a much stronger US dollar may come to a pause this week. Analysts expect to see a decline in UK government borrowing data coupled with something of a recovery in British retail sales numbers. The two may offer markets evidence that fiscal policy in the UK is working. Should minutes from the latest Bank of England meeting also indicate steady monetary policy, sterling may find enough interest from investors to...