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Spain’s registered jobless
fell for the first time in five months in December as service firms boosted
hiring over the holiday season.
The number of people registering for unemployment
benefits fell by 59,094 from November to 4.8m, the labour ministry in Madrid
said today. This was the best result on record for December.
49,438 service jobs were added while 4,325 more
construction workers and 2,794 more manufacturing workers lost their jobs.
The OECD think-tank for 34 mainly developed
country governments expects the jobless rate in Spain to rise to 27% this year.
CRH plc, the international building materials group,
announced today18 acquisition and investment initiatives undertaken
during the second half of 2012. The transactions completed since the end of June
bring full year 2012 development activity for the group to almost €630m; with
net deferred consideration of approximately €130m, cash spend for the year
amounted to approximately €500m.
CRH Acquisition spend reaches a four year high and renewed speculation on
India: Robert Eason of Goodbody comments -- "CRH has announced that it
has spent €375m (including €130m of deferred consideration) on 18 deals in the
second half of the year, split 32% Europe / Asia and 68% Americas. This compares
to €0.25bn in the first half (65% Europe / 35% Americas) and implies over €200m
was completed in the last 1-2 months of 2012. It also represents the largest
spend since 2008.
A contributing factor to the step up in the deal flow in the last two months
was the acquisition of Trap Rock Industries in New Jersey which adds 3-4% to
CRH’s US permitted reserves. This is a sizeable deal. The remaining deals are
the typical bolt-ons with the average transaction size in the second half of
€21m versus less than €15m in H1.
Following the termination of talks in October with Jaypee Cement Corporation
over the potential purchase of an equity stake in Jaypee’s Gujarat cement
business there is press speculation today that CRH may be interested in
acquiring Sree Jayajothi Cements. This business has a 3.2m tonne plant in Andhra
Pradesh, which is in the province that CRH’s existing business (My Home
Industries) is located with 4.8m tonnes of capacity. The speculated price is
$390-420m (circa €300m).
Overall, we would view the up-tick in CRH’s acquisition spend as an
incremental positive but with minimal impact to forecasts as we have already
included €500m. We remain cautious on the stock given its bias to infrastructure
in the US, its large presence in Europe and an already demanding multiple
(19-20x FY13 earnings)."
Justin Doyle, Investec Bank Ireland, commented today:
"What a start to the year as most major global equity indices rallied in
or around 2% on the day thanks to the last minute U.S. ‘fiscal cliff’ deal,
averting an avalanche of tax hikes which could have plunged the US economy
back into recession with potentially disastrous consequences for other
The riskier commodity based currencies such as the Aussie dollar and the
Kiwi dollar shone brightest yesterday as a surge in risk appetite gripped
the financial markets.
Peripheral European bond yields also enjoyed their day in the sun as
Spanish and Italian bond yields rallied the bones of 25bp’s each yesterday
to trade close to 5% and 4.25%.
Up today German employment numbers and the US ADP employment figure
always a decent precursor to the eagerly awaited non farm payroll number
Economic View: Plans to exit the bailout to be presented;
O'Leary of Goodbody comments -- "At this point a year ago, few, including
ourselves, would have genuinely believed that Ireland would now be making
concrete plans for a full return to bond markets. At that time longer term
yields were still at unsustainably high levels close to 8%. A year on, Ireland’s
October 2020 bond is trading at a yield of just 4.35%, well below the initial
funding costs agreed at the start of the bailout (which were subsequently
reduced). It is reported that the Troika is now in the closing stages of
finalising a report that will be presented to Irish officials with options that
would increase the chances of Ireland’s full return to markets over the coming
months. These conclusions will not be published but are likely to be at the top
of the agenda in the next Troika review at the end of the month.
Some of these proposals were already outlined in the IMF’s eighth review,
published in December. The options set out by the IMF include: (i) refinancing
of the promissory notes; (ii) the use of the ECB’s Outright Monetary
Transactions (OMT) program, and; (iii) funding backstops. All of these options
will need the agreement of EU leaders, which is why Irish leaders have already
restarted a diplomatic campaign for follow-through on commitments made last June
to improve the sustainability of Ireland’s programme.
Although campaigning on national issues is frowned upon during presidencies,
with Ireland in the spotlight over the next six months, European leaders will
want to see a success story. For this to happen, words will have to be followed
up with action."
Banks: Permanent TSB indicates funds secured to finance bond maturity;
Eamonn Hughes and Colm Foley of Goodbody comments - - "Permanent TSB yesterday
afternoon made a statement that it had secured funds to finance an upcoming bond
maturity in response to speculation yesterday morning that it may have to issue
bonds in the near future. PTSB has a $1.75bn bond maturing later this month
(with a further maturity in April), but the bank indicated that 'PTSB has
already secured the resources to finance upcoming bond maturities including a
maturity due this month and will not be required to issue any bonds in the near
It added that 'in tandem with its restructuring plan, the bank has plans in
place to cover its liquidity and financing arrangements through the coming
months and has sufficient collateral in place to raise funds as necessary.'
PTSB’s comments that it has sufficient resources to cover the upcoming bond
maturity comes shortly after commentary that the bank is set to announce new
business volume targets in the coming weeks. Ahead of that announcement, there
has been some speculation that the targets will be at multiples of 2012 levels.
However, this possibly reflects the very small base last year where recent
comments have pitched new lending at less than €0.1bn in 2012, relatively
immaterial in the context of the €33bn loan book."
Banks: SME business conditions less negative in Q4; Hughes and Foley
added - - "The latest survey of quarterly business trends from ISME, the
business lobby group (and reported in the Irish Independent this morning), show
that market conditions improved in Q4 but many indicators are still in negative
territory. Business confidence among SMEs improved from -17% in Q3 to -5% in Q4.
Profitability expectations improved from -20% to -11% whilst future employment
is now expected to be flat rather than declining slightly. Only export related
companies are showing signs of growth. The ISME survey shows that operating
conditions for the SME sector continue to be difficult but being less negative
than previous surveys is a step in the right direction for the sector.
The Central Bank highlighted the SME sector as a trouble spot for the banks
in the latter part of 2012 given extensive property related exposures of many
SMEs. Some improvement in trading conditions is likely to ease pressure on SMEs
in due course and play a factor in why our impairment charges in the SME sector
are reducing modestly in 2013 over 2012 levels."
Another important year for stock-pickers: Barry Dixon of Davy comments - -
"Although 2012 overall was a good year for equity markets, the variation in
performance between, and more particularly within, sectors made it a difficult
year for stock-pickers. Almost 80% of our calls in 2012 were correct, although
many of these changed through the year.
Given the relatively benign macro outlook for 2013, it will be difficult for
companies to generate organic top-line growth. In this environment, growth in
organic profits will also be hard to achieve. Investors should continue to look
for companies that can grow the top line regardless of the macro environment,
have strong balance sheets and cash flow and are generating returns above their
cost of capital
In the industrials space, we like Travis Perkins, Holcim and Smurfit Kappa
Group while Geberit, ArcelorMittal and DS Smith will likely underperform in
2013. In transport and logistics, Ryanair, IAG and Deutsche Post DHL are our
favoured stocks. Premier Oil is our top pick in the resources sector. In the
consumer area, we like Associated British Foods, C&C, Frutarom and DCC. Our
favoured name in the gaming sector is William Hill. "
The Dow Jones Industrial Average jumped 308.41 points on Wednesday, to
13412.55, its best-ever start to a year according to The Wall Street Journal. In
percentage terms, the 2.35% gain was the best opening since 2009.
The rise came after Congress struck a deal to avoid a bundle of automatic tax
increases and spending cuts known as the "fiscal cliff."
The broader Standard & Poor's 500 index rose 36.23 points, or 2.5%, to
1,462.42. It was the S&P's best first-trading-day jump since 2009, according to
Howard Silverblatt, senior index analyst for S&P Dow Jones Indices. The
technology-heavy Nasdaq composite index gained 92.75 points, or 3.1%, to
The MSCI Asia
Pacific Index ex-Japan rose 0.4% Thursday to the highest level since
and China's markets were closed for holidays; South Korea's
Kospi dipped 0.58%; Australia's S&P/ASX 200 climbed 0.74%; in Mumbai, the Bombay
Stock Exchange's Sensex 30 added 0.28%.
the Dow Jones Stoxx Europe 600 is up 0.25% in morning trading Thursday.
skyscrapers and immaculate beaches of Singapore's seaport look out on one of the
world’s largest parking lots: mile after mile of empty cargo ships, as far as
the eye can see.
fleets bob at anchor, with empty cargo holds, off the coasts of southeast
Malaysia and Hong Kong. And dozens of newly built ships float empty near the
giant shipyards of South Korea and China, their owners from all over the world
reluctant to accept delivery during one of the worst markets ever for the global
recently as six weeks ago large freighters that can carry bulk commodities like
iron ore or grain were fetching charter rates of $15,000 a day. Now, brokers and
owners say, the going rate is $6,000 a day. If any customers can even be found.
reports that for the
first year since the futures were created, Brent crude is poised to overtake
West Texas Intermediate (WTI) oil as the world’s most-traded commodity.
trading in Brent jumped 14% to average 567,000 contracts in the year to November
20 compared with all of 2011, while WTI fell 17% to 575,000, according to data
from the ICE Futures Europe exchange in London and New York Mercantile Exchange
compiled by Bloomberg. The number of Brent futures changing hands has exceeded
those for WTI every month from April through October,
the longest streak since at least 1995.
Brent, produced in the
North Sea, is gaining favour among traders because of its role as the benchmark
for energy prices from Saudi Arabia to Russia. Prices have climbed 34% in the
past two years, reflecting everything from war in Libya to the embargo on Iran.
WTI, the main grade in the US, has risen 9% as the nation, which prohibits crude
exports, has struggled to clear a glut at Cushing, Oklahoma, the delivery point
for Nymex futures.