See Search Box
lower down this column for searches of Finfacts news pages. Where there may be
the odd special character missing from an older page, it's a problem that
developed when Interactive Tools upgraded to a new content management system.
Welcome
Finfacts is Ireland's leading business information site and
you are in its business news section.
We
provide access to live business television and business
related videos from: Bloomberg TV; The Wall Street Journal;
CNBC and the Financial Times. Click image:
The US service sector contracted in November after two consecutive months of expansion, the nation's purchasing and supply executives said in a report issued today.
Anthony Nieves, chair of the Institute for Supply Management Non-Manufacturing Business Survey Committee; and senior vice president - - supply management for Hilton Worldwide commented: "The NMI (Non-Manufacturing Index) registered 48.7 in November, 1.9 percentage points lower than the 50.6 registered in October, indicating contraction in the non-manufacturing sector after two consecutive months of expansion. The Non-Manufacturing Business Activity Index decreased 5.6% to 49.6, reflecting contraction after three consecutive months of growth. The New Orders Index decreased 0.5 percentage point to 55.1, and the Employment Index increased 0.5 percentage point to 41.6. The Prices Index increased 4.8 percentage points to 57.8 in November, indicating an increase in prices paid from October. According to the NMI, six non-manufacturing industries reported growth in November. Respondents' comments remain cautious about business conditions and reflect concern over the length of time for economic recovery."
The six industries reporting growth in November based on the NMI composite index - - listed in order - - are: Other Services; Health Care & Social Assistance; Construction; Finance & Insurance; Retail Trade; and Information. The 11 industries reporting contraction in November - -listed in order - - are: Real Estate, Rental & Leasing; Management of Companies & Support Services; Mining; Arts, Entertainment & Recreation; Public Administration; Accommodation & Food Services; Educational Services; Wholesale Trade; Transportation & Warehousing; Professional, Scientific & Technical Services; and Utilities.
UK services
Markit Economics reported today that the UK service sector continued to expand during November, highlighting its ongoing recovery following the unprecedented declines recorded around the same period last year. Activity was supported by the steepest rise in new business for over two years, as confidence in the marketplace continued to improve.
Nonetheless, there was sufficient evidence to suggest that operating conditions remained tough. Output charges were again lowered in response to ongoing competitive pressures, despite the steepest rise in input costs for over a year. Moreover, employment continued to fall, albeit at the slowest rate for fourteen months.
The headline index from the report is the Business Activity Index, which is based on a single question asking respondents to report on the actual change in business activity at their companies compared to one month ago. In November, the index recorded 56.6, a broadly sideways movement on October’s twenty-six month high of 56.9. Growth has now been recorded for seven months in succession, with the latest robust expansion centred mainly on the Financial Intermediation and Business Services sectors. By company size, large companies registered the strongest growth, while small enterprises continued to lag some way behind.
European Central Bank President Jean-Claude Trichet, told a press conference in Frankfurt today, following the decision to keep the benchmark rate unchanged at 1%, that the ECB will scale back its emergency financing operations next year as the Eurozone works though an “uneven” recovery. However he said: "We again consider at the present moment that it is very important not to signal anything on the interest rates . And in that sense, if I may, the message from us is clear. We have the progressive timely gradual phasing out of the nonconventional measures. And that is something which only accompanies what we are observing on the market. We are not signaling anything in terms of hardening our monetary policy, absolutely nothing."
"The risk of (sovereign debt) default in Greece is really remote," Guillaume Menuet from BofA Merrill Lynch Global Research told CNBC Thursday. There is an implicit guarantee from other European states, he added:
IN&M - Post restructuring
Goodbody issued a note today on Independent News & Media.
Gerry Hennigan commented: "Backdrop - While the management Re-structuring Plan announced in September provides ‘breathing space’, it does so clearly at the expense of shareholders. Post full implementation the bondholders will retain an equity interest of at least 47.7% and possibly more depending on the level of shareholder acceptance of the rights issue.
Forecasts - Based on the debt-for-equity swap, disposals and FY09 guidance, our 2010 adjusted earnings fall from 8.1c to 1.3c, with net debt reducing from €1.2bn to €0.9bn (forecast Net Debt/EBITDA of 4.0x). Those forecasts assume further sales declines in Ireland (lagging economic recovery) and the UK (weak circulations), counteracted by growth in Australia (lower online growth, stability in New Zealand) and South Africa (2010 World Cup). Margin appreciation based on cost savings is projected to produce a 12% uplift to FY10 operating profit.
Recommendation & Valuation - Our prior stance, which we outlined in May (“Risked Upside”) assumed: (i) a gradual improvement in the advertising outlook; and (ii) marginal (c.20%) dilution to secure a bondholder agreement. While the advertising outlook has indeed improved, we clearly underestimated the level of dilution. Management’s defence continues to hinge on the ‘unprecedented advertising slump’. The need to re-structure, however, derived, in our view, from: (i) an over-leveraged balance sheet; (ii) the dis-proportionate allocation of cashflow towards dividend payments and acquisitions; and (iii) the structural deficiencies facing the industry (impact of online advertising) and IN&M (losses at UK franchise). Valuation is not stretched (FY10 earnings multiple of 8.4x) with the model in the process of exiting a trough in the earnings cycle. A queue of bondholders no doubt eager to raise cash, however, and the relatively high level of debt that remains, despite the agreement with debt holders, suggests few near term catalysts for the share price. Based on 10x FY10 earnings our price target is lowered to 13c. ADD."
Ryanair
The passenger and load factor statistics for November 2009 for Ryanair, the world’s largest international scheduled airline are as follows:
Nov 08
Nov 09
Increase
12 mth to 30 Nov 09
Passengers (m) 1
4.32M
4.96M
+15%
64.8M
Load Factor 2
79%
80%
+1%
82%
1. Represents the no of earned seats flown by Ryanair.
2. Represents the no of pax as a percentage of total seats available.
The majority of the nation's retailers posted weaker-than-expected sales for November. Charles Grom, retail analyst at JPMorgan, shares his analysis:
US markets
Cable company Comcast, is to take majority ownership of NBC Universal from General Electric in a deal that values the television network NBC, at $30 billion.
Apart from the service activity report, the Department of Labor reported that first-time claims for unemployment assistance fell 5,000 last week to 457,000.
The Dow is down 2 points or to 10,451.
The Nasdaq is up 0.37% and the S&P 500 has gained 0.04%.
On the New York Mercantile Exchange, oil for January 2010 delivery is trading at $76.76 up 16 cents from Wednesday's close. In London, Brent crude for January delivery is trading at $78.38 a barrel.
Currencies
The euro is trading at $1.5074 and at £0.9048.
For live currency updates, check the right-hand column of the Finfacts home page.The dollar traded at a record low $1.6038 per euro on July 15, 2008.
Sen. Jim Bunning, {R-KY), will vote against Bernanke at his confirmation. He tells CNBC why he doesn't think the Fed Chairman deserves a second term:
