Thursday, February 14, 2008

Sensex gains most in three weeks

MUMBAI: India’s Sensitive Index rose the most in nearly three weeks as faster Japanese economic growth and better-than-expected US retail sales eased concern the world’s two biggest economies are sliding into a recession.
The Bombay Stock Exchange’s Sensitive Index, or Sensex rose 817.49, or 4.8%, to 17,766.63, its biggest rise since January 25 and the largest fluctuation among indexes included in global benchmarks.

The S&P CNX Nifty added 272.55, or 5.5%, to 5,202 and Nifty Futures for February delivery advanced 5.7% to 5,187.
Bharat Heavy Electricals Ltd, India’s top maker of thermal power equipment, rose the most in 20 months after winning a contract. DLF Ltd, the nation’s largest developer, rose the most in more than a week after it won the title sponsorship rights for the Indian Premier League Twenty20 cricket series.
“Ultimately this day had to happen sooner than later,â€‌ said Gajendra Nagpal, chief executive officer at brokerage Unicon Financial Intermediaries. “Valuations had become attractive and a lot of insurance money was waiting on the sidelines as this quarter is the peak business time for insurance companies who are flush with funds.â€‌
Private refiners Reliance Petroleum Ltd and Essar Oil Ltd along with Centurion Bank of Punjab Ltd and state-run Steel Authority of India Ltd advanced on the announcement of their inclusion in a number of MSCI Inc indexes.
Bharat Heavy gained Rs250.25, or 12.6%, to 2,232, its biggest percentage gain since June 15, 2006. It said it had won a Rs2bn ($50mn) contract from India’s largest explorer Oil & Natural Gas Corp Construction company Punj Lloyd Ltd rose Rs34.9, or 10.5%, to 366.5, its biggest gain in almost four months, after it said it bagged an order worth Rs11.2bn.
DLF rose Rs49.85, or 6.1%, to 864.85. Reliance Energy Ltd, the nation’s second largest utility by market value, rose Rs150.05, or 9.6%, to 1,708.15, its biggest gain in three weeks.
State-run refiners gained after the government announced an increase in retail pump prices for gasoline and diesel after a gap of 20 months to lower the impact of record crude oil costs on such companies.
The Indian rupee meanwhile advanced by the most in almost four months on speculation gains in the nation’s stocks will lure overseas investors to local equities.
The currency rose after the central bank said Asia’s third- largest economy can sustain “highâ€‌ growth in the coming years.
The rupee rose 0.4% to 39.6175 per dollar at the close in Mumbai, according to data compiled by Bloomberg. It may rise to as much as 39.5 in coming days, analysts said. – Bloomberg

Wednesday, February 13, 2008

Four out of five of PPI claims upheld

The financial ombudsman has seen an explosion of complaints about payment protection insurance and has called for banks and other firms to compensate wronged customers sooner.

The Financial Ombudsman Service says it received 1,499 complaints about payment protection insurance (PPI) in January alone. This compares with 1,832 for the whole of the 2006/07 financial year.
What's more, the Ombudsman reported that 80% of the PPI complaints it received from customers were being upheld. This compares with 32% for insurance complaints overall, 32% for buildings insurance, 43% for motor insurance and 34% for travel insurance.

PPI is supposed to cover repayments on loans, mortgages and credit cards when the holder is unable to fund them because of accident, sickness or unemployment.

It has been criticised for being overpriced and difficult, sometimes impossible, to claim on. The Competition Commission is conducting an investigation into the market after the Office of Fair Trading decided there may be evidence of detriment to consumers.

Separately, the Financial Services Authority has been tightening the guidelines that sellers of PPI must follow and has fined several firms for pushing PPI onto customers who do not want or need it.

This is Money has been at the front of the campaign to overhaul the PPI market and has produced template letters to help customer claim their money back. The high proportion of complaints being upheld by the Financial Ombudsman Service suggests companies are too often ignoring valid complaints of mis-selling.

Emma Parker, a spokeswoman for the Financial Ombudsman Service, said: 'There was a record number of complaints about PPI in January and the number is increasing month-on-month. The fact that so many are being upheld suggests that firms aren't doing enough to deal with these complaints before they come to us.

'It bares comparison with the early days of endowment policy complaints, where firms were simply turning complaints down and leaving it to the Ombudsman to deal with. We will talk with trade bodies and firms to ensure they follow our guidance on processing these claims and deal with more of them before they get to us.'

Brian Capon, head of media relations for the British Banker's Association, said: 'Banks' customer relations departments are well-staffed with people who are experienced in looking at a situation with particular regard for the customer's point of view. All claims are considered carefully, but as in the case of any complaint, the customer is entitled to ask the Financial Ombudsman Service to look at their case if they are unhappy with the bank's decision. In some cases the customer might approach the Ombudsman direct before giving their bank the opportunity to look at it first.'

Wednesday, February 6, 2008

Hong Kong stocks skid influenced by US economy

By Margarita Snegireva. Hong Kong stocks skidded on heavy selling during a shortened session ahead of the Lunar New Year holidays on declines in HSBC Holdings and China Life, while Japanese stocks plunged on financials such as Mitsui Sumitomo Insurance and shipping forms such as Mitsui O.S.K. Lines.

Australian shares were dragged lower by mining giant BHP Billiton after it made a sweetened stock offer for rival Rio Tinto and proposed a $30 billion buyback offer.

Stock markets in South Korea, China, Taiwan and Vietnam are closed Wednesday through Friday for Lunar New Year holidays, while Hong Kong , Singaporean, Malaysian and Indonesian markets are closed Thursday and Friday.

Analysts said an unexpected contraction in the U.S. service sector announced by the Institute for Supply Management Tuesday renewed worries that the U.S. economy is entering a recession.

"The Hong Kong market is affected by the recession and financial crisis in the U.S. and Europe . The bear market will continue for a period until it reaches the bottom," said Francis Lun, a general manager at Fulbright Securities Ltd.

Tuesday, February 5, 2008

Hurleys look forward to retirement

CUSHMAN — Finally, the phone has stopped ringing day and night.

Sam and Mary Jo Hurley recently sold their liquid petroleum gas company, Hurley’s Gas, to Heritage Propane, a division of Titan Energy Co.

They were busy this week helping with the transition and, in their spare time, taking photos and country artifacts off the log walls of their office building. They’re keeping the building and property, and Heritage is working to move all the LP gas tanks and trucks to a Batesville location which will serve as its local headquarters.

“Christmas days, I guess I’ve worked all of them,” Sam said. “Not all day. Sometimes all day. Usually, just part of the day.”

“Somebody would always call on Christmas and Thanksgiving,” Mary Jo said. “They’d be out of gas.”

The same went for nights and weekends, since the business phone rang in at their home.

The Hurleys started the business in 1985 after Sam had spent 24 years working for another gas company. Knowing the business well, he decided to strike out on his own.

“I started out with nothing,” he said. “I didn’t have a gas customer.”

But, he said, being in his hometown of Cushman, “I knew everybody and everybody knew me. I built a little log building for an office.

“I didn’t even have a phone number (listed) for six months.”

Sam said Jimmy Hughes, then production manager for the Batesville Daily Guard, told him, “When you get your truck, come on down by the Guard office and we’ll take a picture and get you some publicity.”

“That little piece in the Guard kept us in business,” he said, until after the next telephone directory came out.

Business just kept picking up. The Hurleys expanded the building twice and had at least 5,000 customers in four counties when they sold out.

Family members and others went to work for the company as it expanded to seven gas trucks and three service trucks. At one point, 14 family members were among the employees, the first ones being son Kenny Hurley and daughter Debbie Covington.

“All of our grandkids worked (here) during their growing up,” Mary Jo said. Some then went on to other careers. One, Kyle Covington, practically grew up in the office, she said.

Both Sam and Mary Jo were raised within a mile of Cushman. She went to college after Hurley Gas got under way and, after graduating, taught school at Cushman for more than 20 years.

Heritage is keeping all of Hurley’s employees, including family members, who want to stay.

Sam said he and Mary Jo decided to sell for a variety of reasons. One factor was getting a good offer for the business.

Another was the Department of Homeland Security’s continual issuing of new regulations, which made for more and more governmental red tape.

Expenses, as with all businesses, also continue to climb, which could make any business less profitable and, finally, Sam said, “As far as I know, we’re in good health now and we don’t need to work right up till we die.”

“We built us a good business,” Mary Jo said. “But everything comes to an end,” Sam added.

“The timing was right,” he said.

The two spent all of their lives around Cushman except for three years in Tulsa, Okla., right after they married. He worked for an oil field equipment company there and she worked for an insurance firm.

When the 1959 recession hit and Sam was laid off, they left Tulsa and came home. Sam admits he was a bit homesick.

“We didn’t like it. Too many people there for me,” he said.

Sam plans to spend more time taking care of his cattle and, in the summer, putting up hay.

“I enjoy that. It relaxes me to do that,” he said.

Mary Jo said she will do more canning and freezing garden produce and just enjoying the freedom of being outdoors.

“I like the country and I like the outdoors,” she said.

“She may have to drive a tractor this summer,” Sam said, grinning.

“I don’t know about that,” she said, looking at him pointedly.

Sam said he used to like to hunt and fish but hasn’t had the time for years. “I may wet a hook this summer,” he said.

“With this gas business, you never have any spare time — nights, weekends, Sundays, there’s always something going on.”

And every time something was going on, well, that ringing sound was the telephone again.

They may travel a bit as they become accustomed to having some time of their own. They had only three vacations in the past 23 years, but enjoyed them, Sam said, listing some of the places they went — Yellowstone Park, the Black Hills and Pike’s Peak on one trip, and to California on another.

For now, though, the couple plans to just be homebodies and maybe spend a little extra time with their first great-grandchild.

Mary Jo’s even got a new apron to use for one of the things she enjoys most — cooking.

“I’m a country girl. Wayne Stout sent me an apron the other day. It’s made of denim. I like to cook and I like to play the piano. I play the piano at church.”

Sam said he’s been asked to grow some sugar cane and make molasses this fall. “I doubt if I do that.” But, he said, “I might.”

When he was a teenager, he worked in the Cushman manganese mines and enjoys telling mining stories.

His folks also had him doing migrant work, picking cotton in south Arkansas, tomatoes in Indiana and working with various crops, including asparagus, in Michigan.

But now, it’s time to relax a little.

“We’ve been tied down for so many years, we won’t know what it’s like to be footloose,” Mary Jo said.

Monday, February 4, 2008

Principal Financial Q4 Profit Plunges, Revenues Rise; Backs FY08 EPS View [PFG]

Insurance services provider Principal Financial Group Inc. (PFG) Monday reported a sharp decline in fourth quarter earnings, hurt by substantial capital losses amounting to nearly $211 million. However, revenues for the quarter increased from last year on continuing strength of the company's major business segments. Principal Financial reaffirmed its earnings forecast growth for fiscal 2008. Additionally, the company repurchased 1.1 million shares of its common stock for $70 million, during the quarter.

Fourth Quarter

Net income available to common shareholders for fourth quarter fell to $34.1 million or $0.13 per share from $284.1 million or $1.04 per share in the fourth quarter of the previous year. Quarterly operating income, excluding capital losses and other adjustments, decreased to $225.8 million or $0.86 per share from $252.0 million or $0.93 per share in the fourth quarter of fiscal 2006. Thirteen Wall Street analysts polled by First Call/Thomson had a consensus earnings estimate of $1.01 per share.

The company said its income from continuing operations for the recent quarter plunged to $21.8 million from $262.4 million in the year ago quarter.

The Des Moines, Iowa-based company recorded total GAAP revenues of $2.564 billon for the fiscal quarter, higher than $2.560 billion in the prior year quarter. Non-GAAP operating revenues for the quarter were $2.902 billion, compared to $2.537 billion in the year ago quarter. The Street expected fourth quarter revenues of $2.89 billion.

Net investment income for the quarter advanced to $1.038 billion from $924.1 million in the same quarter last year.

Operating revenues from the U.S Asset Accumulation segment for the fourth quarter increased to $1.300 billion from $1.085 billon in the last year quarter. Global Asset Management revenues for the quarter advanced to $174.1 million from $149.5 million in the comparable quarter last year. The company posted International Asset Management and Accumulation revenues of $255.4 million for the quarter, compared to $128.6 million in the comparable quarter of the prior year. Operating revenue from the Life and Health Insurance segment improved to $1.222 billion from $1.210 billion in the fourth quarter of 2006.

Results for the quarter included net realized/unrealized capital losses of $211.5 million, including $134.8 million of losses related to impairments of fixed maturity securities, $33.5 million of impairments on equity securities, unrealized capital losses of $26.3 million and $21.3 million of realized capital losses related to derivative positions.

Barry Griswell, Chairman of Principal Financial commented, “In 2007, our three key growth engines - U.S. Asset Accumulation, Principal Global Investors and Principal International - continued to demonstrate strong fundamentals. Total company assets under management (AUM) increased $54 billion, or 21 percent, including nearly $20 billion of net cash flows, and each of our three asset management and accumulation segments delivered record earnings, improving $111 million or 15 percent for the year on a combined basis.”

On January 23, 2008, analysts at Credit Suisse downgraded Principal Financial shares to “Underperform” from “Neutral” and lowered its price target to $57 from $69. The brokerage reduced its 2008 EPS estimate for the company to $4.25 from $4.45.

During fourth quarter, Principal Financial repurchased 1.1 million shares of its common stock for $70 million, completing the previously announced share repurchase authorization of up to $250 million.

Prior Quarter

For third quarter, the company reported net income of $240.5 million, compared to $259.2 million for the year-ago quarter. Net income available to common shareholders for the third quarter was $232.3 million or $0.87 per share, compared to $251.0 million or $0.92 per share in the prior year quarter.

Excluding special items, operating earnings for third quarter were $312.9 million or $1.17 per share, compared to $254.7 million or $0.94 per share in the third quarter of last year.

Total operating revenues for third quarter increased 20% to $2.94 billion from $2.46 billion in the same quarter last year.

Full Year

For fiscal 2007, the company reported net income available to common shareholders of $827.3 million or $3.09 per share, compared to $1.031 billion or $3.74 per share in the previous year. Operating income for the year rose to $1.058 billion or $3.95 per share from $972.1 million or $3.74 per share a year earlier. Analysts expected the company to earn $4.10 per share for the year.

GAAP revenues for the year grew to $10.907 billion from $9.87 billion in fiscal 2006. On a non-GAAP basis, the company posted annual operating revenues of $11.250 billion, compared to $9.826 billion in 2006. Wall Street analysts were looking for annual revenues of $11.23 billion.


Looking ahead, Principal Financial reaffirmed its projection for fiscal 2008 earnings growth between 11% and 13%, while annual operating ROE is still estimated to grow by nearly 50 basis points.


Amongst others in the market, investment services provider Nationwide Financial Services Inc. (NFS) is scheduled to release its fourth quarter financial results on Thursday. Analysts expect NFS to post earnings of $1.12 per share for fourth quarter. Insurance services provider Manulife Financial Corp. (MFC) will be announcing its fourth quarter results on February 14, 2008, with analysts expecting earnings of $0.73 per share.

Sunday, February 3, 2008

Another sweep for LU

This time, most of the drama between the Lakehead Thunderwolves and the Wilfrid Laurier Golden Hawks was served up on the ice.
Delayed airplanes, a snowy tarmac and league appeals stepped aside as the two bitter OUA hockey rivals got together for a penalty-ridden, goal-happy 7-5 Lakehead win on Saturday night at Fort William Gardens. The victory leaves the No. 5-ranked Thunderwolves one win or a Western Mustangs‘ loss shy of clinching the top seed in the West conference.
“You want to be playing your best hockey at the end of the season going into the playoffs,” said Thunderwolves centre Tobias Whelan, who scored twice and added two assists. “With nine wins in a row now against some pretty good teams, it‘s good confidence for us.”
Whelan, scoring one of his team‘s five powerplay goals on the night, and Brock McPherson, who set the team points record in a regular season with his 43rd, scored to open the third period and erase a 3-2 Golden Hawks lead. Kris Hogg pushed the lead to 5-3, but J.M. Rizk and Riley Moher of the Golden Hawks scored late to nullify Andrew Brown‘s would-be insurance empty net goal.
Whelan wrapped up Lakehead‘s 21st win of the season – tying a team record – with one last goal into the empty cage.
“We needed two late empty-netters there,” Lakehead coach Don McKee said. “We‘re pretty confident all night long we were taking the play to them.”
Many on both sides, namely McKee, tried to move on from Friday‘s sticky situation when the Golden Hawks arrived at the arena an hour before the scheduled game time due to travel delays and asked for a postponement of the game.
McKee refused, forcing Golden Hawks coach Kelly Nobes, who told reporters after their 3-2 loss on Friday that the Thunderwolves pushed through with the game to continue for monetary purposes over the well-being of his players, to file an appeal to the OUA.
Twenty-four hours and another road loss later, he was short with the media.
“I believe it‘s already gone to the (Laurier athletic director). The process has already started,” he said of the appeal. “It leaves a bad taste in your mouth. I said what I said (Friday) and I‘m not going to get into it now.”
Thanks to the 22 total powerplays handed out by referee Grant Sherred, Saturday‘s win posed another test to the Thunderwolves in another tight game: Don‘t get burned on late penalties. Lakehead killed two of three Golden Hawks man-advantages to survive.
“Late in the game we had to bear down,” defenceman Mitch Maunu said.
Mark Soares and Dan Speer also scored for the Thunderwolves while Kyle Moir made 26 saves, including a stretching block on Luke Girard‘s breakaway attempt in the second period, for the win.
“All in all in the second period, Moir gave us some big saves while they were pressing a little,” McKee said. “I give him a lot of credit for his patience and we were able to get it going in the third.”

Dog Tags: Mike Wehrstedt and Matt Jacques had their families ushered onto centre ice before the game while they were honoured on seniors night. Wehrstedt added an assist – his 100th point in a Lakehead uniform – in the win. . . . Lakehead (21-3-1) wraps up the regular season on the road next weekend with a game against Toronto and two games against Western. Should they clinch the top seed, they wouldn‘t open the playoffs until the conference semifinals on Feb. 20. . . . Hogg left the game late in the third period after colliding with a Laurier player. He was favouring his left leg, but returned to watch the end of the game from the bench.

Saturday, February 2, 2008

Migrants are China's 'factories without smoke'

HONG KONG, China (CNN) -- In the crowds still stranded by snow at train stations around China stand some of the country's most valuable economic assets: migrant workers.

This group of 150 million to 200 million farmers -- more than the population of the United Kingdom, France and Australia combined -- account for the majority of employees in China's world-beating manufacturing sector, the bulk of its coal miners and most of its construction workers.

During the past two decades, according to a conservative estimate from UNESCO and the Chinese Academy of Social Sciences, migrants have contributed 16 percent of gross domestic product growth.

Living for years at a time in coastal cities, China's migrant workers have built the country's skyscrapers and assembled its exports, sending tens of billions of dollars in earnings home to their families in poor inland provinces. For the workers known as "factories without smoke," the Chinese New Year holiday that starts in less than a week is often their only annual vacation.

The forces that brought these smokeless factories to the cities took shape in the early 1980s, when Beijing, as part of an easing of central controls on the economy, loosened internal mobility regulations. Farmers have been pouring out of the countryside ever since, in what is believed to be the world's largest internal migration.

They leave for mostly economic reasons: wages in the cities are higher than what workers could earn at home. And life there, many find, is more exciting than back on the farm.

Today, migrants dominate the Chinese labor force in dirty and dangerous trades: 70 percent of construction workers, 68 percent of manufacturing employees, and 80 percent of coal miners are migrant workers. But not all are on their hands and knees. More than 60 percent of staff in the service trade, according to state media, are migrants as well.

On average, migrants tend to be among the best educated people in their villages. Still, many have little more than a junior high school diploma. Many migrate as teenagers, often with friends or neighbors, leaving behind their family in the countryside. More than half are men, but the toy and shoe factories of southern China prefer women -- they are easier to control, managers say, and their fingers more nimble.

Wages vary by city and company, but many migrants in export factories in the south take home about Rmb1,000 a month ($139) -- or even more. They sleep 12 to a room in bunkbed dormitories furnished by their employers, working six and sometimes seven days a week for months at a time. Wages are not always paid on time, occasionally not at all.

Victims of occupational disease, lacking of insurance

As little as a fifth of migrant workers in southern China's Guangdong province, according to one Hong Kong non-governmental organization, have medical insurance. China's household registration or hukou system links social benefits to the place where one is registered, and most migrants are still registered in their rural hometowns, hundreds of miles away from where they work. About 90 percent of the victims of occupational disease in China are migrants.

These migrants' schedules are dictated by the fluctuations of demand from their foreign customers: winter is peak season for lawn furniture factories, for example. But most of the factories in southern China are busiest in summer, as they fill orders for the Christmas season.

Many of these plants close for the first months of the year and take the Chinese New Year holiday off, triggering an exodus of migrants as those who can afford the train and bus tickets travel home to see their families.
Much has changed since Chinese farmers began arriving in the cities two decades ago. Some of today's migrant workers are "second generation" -- the sons and daughters of the first generation of migrant workers. Most were born after China introduced a family planning policy in 1979, so they come from smaller families. Second generation migrants tend to be more demanding employees: they are pickier about where they work, preferring factories with better facilities and wages.

Their preferences, along with a rapid growth in factories in the Yangtze River Delta around Shanghai and a rise in rural incomes, have contributed to labor shortages in Guangdong province in the last several years. In response, the government is raising the minimum wage and strengthening labor laws. Forced to compete for workers for the first time in more than a decade, factory managers are building basketball courts and libraries, installing air conditioners and improving their cafeteria menus.
Beijing, too, is realizing the importance of migrant workers as a political constituency. The state-controlled labor union, the All-China Federation of Trade Unions, is targeting migrants in a recruitment drive. The government is expanding insurance coverage for migrant workers.

State media cover their hardships regularly. "Migrant Workers: We Need Them Just Like They Need Us," read one headline in the China Daily last March. As the appearance of premier Wen Jiabao at the packed Guangzhou train station this week illustrated, migrants are crucial to keeping China's economic development on track.

Friday, February 1, 2008

Clinton Advisers Criticize Obama Mailer

(AP) Advisers to Democrat Hillary Rodham Clinton Friday complained vehemently about a Barack Obama campaign mailer that criticizes Clinton's health plan, with one adviser likening the mailer to "Nazis marching through Skokie, Illinois."

Clinton communications director Howard Wolfson disavowed the analogy leveled by Len Nichols, a health policy expert at the New America Foundation who has consulted with Clinton and other candidates on their proposals.

But the remark still reflected the emotional dispute over how best to achieve universal health care, a key concern of many Democratic primary voters.

The Obama mailer, which the Clinton campaign traced to mailboxes in North Dakota and Alaska, shows a young couple sitting at a table, appearing to puzzle over a stack of bills.

"Hillary's plan forces everyone to buy insurance, even if you can't afford it," the headline reads.

On a conference call with reporters, Clinton advisers complained the image and the message closely resembled the $100 million "Harry and Louise" TV ad campaign waged by the insurance industry in 1994 to kill the former first lady's effort to reshape the health care system. In those ads, a middle class couple sat at a table worrying about the Clinton plan's complexities and wondering if they might lose the right to choose their own doctors.

Clinton campaign policy director Neera Tanden said the mailer falsely suggests that the New York senator's plan wouldn't bring down costs. She noted that Clinton would offer tax subsidies to help pay for insurance and would seek other cost controls before enforcing a mandate to buy coverage.

Obama, Tanden said, "betrays the cause of universal health care. For a potential Democratic nominee to be attacking universal care is quite stunning."

Nichols of the New America Foundation went farther.

"I am personally outraged at the picture used in this mailing," Nichols, a supporter of the so-called universal mandate said. "It is as outrageous as having Nazis march through Skokie, Illinois."

In late 1970s, the American Nazi party won a court battle over the right to march through the predominantly Jewish Chicago suburb of Skokie, home to many Holocaust survivors. Despite their victory, the white supremacists decided to hold their demonstration in a Chicago park instead.

While both Clinton and Obama have outlined detailed plans to make health care more affordable and accessible, Clinton would require everyone to carry insurance while Obama would make enrollment voluntary. The two have clashed repeatedly over the matter, with Obama saying people cannot be required to buy insurance if they can't afford it, and Clinton saying universal enrollment is the only way to bring down insurance costs.

Obama spokesman Bill Burton responded by pointing to comments by Massachusetts Sen. Ted Kennedy, a longtime champion of universal health care who endorsed Obama earlier this week.

"It's the passion of my life, universal comprehensive health care, and I wouldn't support Barack Obama unless I was absolutely convinced that he was for universal comprehensive health care as well," Kennedy said in a television interview. "I've tried for 38 years to get the universal comprehensive health care. I've supported 12 different proposals to try to get there. Elect Barack Obama and we will get there."