Archive for October, 2008

Indian stock index surges 8.22 percent (AP)

Friday, October 31st, 2008 | Finance News

MUMBAI, India – India's benchmark Sensex index surged 8.22 percent Friday as traders caught up with Thursday's sharp rally in global markets.

The Sensex rose 743.55 points, or 8.22 percent, to close at 9,788.06 Friday.

Stock markets were closed Tuesday and Thursday for the local holiday of Diwali.

Metal, banking, and oil and gas stocks led the rise.

Copper producer Sterlite Industries rose 14.48 percent. Shares of ICICI Bank, the nation's largest private bank, rose 15.5 percent. Automaker Manhindra & Mahindra surged 23.09 percent, and Tata Motors, which reported a 34 percent drop in quarterly profit on Friday, rose 9.11 percent.


NYSE Euronext Q3 net profit falls (AP)

Friday, October 31st, 2008 | Finance News

NEW YORK – NYSE Euronext, the trans-Atlantic stock exchange operator, said Friday its third-quarter profit fell by 33 percent due to merger costs, severance payments and a decline in European derivatives trading.

Net income for the quarter ended Sept. 30 fell to $174 million, or 66 cents per share, from $258 million, or 97 cents per share, during the same quarter a year earlier. Revenue rose to $1.2 billion in the quarter from $1.1 billion a year earlier.

Excluding the discontinued operations of French software provider GL Trade, merger expenses, exit costs and other items, earnings for the quarter were $192 million, or 72 cents per share, compared with $201 million, or 75 cents per share, during the year-ago period. NYSE Euronext said earlier this month it sold its 40 percent stake in GL Trade.

Analysts polled by Thomson Reuters, on average, forecast earnings of 72 cents per share for the quarter. Analysts do not always include gains and charges in their estimates.

Profit fell at NYSE Euronext, in part, as European derivatives trading declined. Futures and options contracts traded on Liffe, NYSE Euronext's European derivatives trading platform, fell 10 percent during the quarter to 3.8 million contracts. Derivatives trading revenue fell nearly 6 percent to $229 million in the third quarter from $243 million a year earlier.

NYSE Euronext also took $30 million in charges during the quarter related to recent mergers and severance expenses. In August, NYSE Euronext completed the acquisition of a 50 percent stake in technology firm Atos Euronext Market Solutions, which was previously owned by Atos Origin.

On Oct. 1, NYSE Euronext completed its acquisition of the American Stock Exchange.

Though the integration of new operations added to expenses during the third quarter, they should eventually lead to cost savings. The American Stock Exchange acquisition is expected to provide annualized savings of more than $100 million by the end of 2009.

Chief Executive Duncan Niederauer said he is continuing to cut costs and invest in future opportunities "despite turbulent markets and the global financial crisis."

"The past year's technology upgrade of our trading systems served customers well as NYSE Euronext markets operated with great reliability and provided continuous access to liquidity during an especially volatile period," he said.

NYSE Euronext has seen volatile markets in recent months amid the ongoing credit crisis. That volatility, though, led to an increase in trading in cash equity markets in the U.S. and Europe. Average daily volume in U.S. cash markets during the third quarter rose 17 percent to 3.6 billion shares. A total of 231.8 billion shares were traded during the quarter, making it the most active quarter on record.

European cash markets saw a 16 percent increase in average daily volume as 1.6 million trades were completed per day.


U.S. banks owe billions in pay, pensions to executives: report (Reuters)

Friday, October 31st, 2008 | Finance News

(Reuters) –
Troubled financial giants getting cash infusions from the U.S. Federal Reserve owe their executives more than $40 billion for past year's pay and pensions as of the end of 2007, the Wall Street Journal said in an analysis.

The sums owed are mostly for special executive pensions and deferred compensation, including bonuses, for prior years, said the paper.

The Journal also cited investment banks Goldman Sachs Group Inc (GS.N), which owes its executives $11.8 billion; JPMorgan Chase & Co (JPM.N), which has a payment of $8.5 billion pending; and Morgan Stanley (MS.N), which owes between $10 billion and $12 billion to executives.

Criticism of executive pay has gained momentum this election year with presidential candidates from both major parties lashing out over rich payouts for CEOs of companies that have suffered big losses in the U.S. housing market bust and ensuing credit crisis.

As a result, the government has sought to rein in executive pay at banks getting federal money as part of the Bush administration's $700 billion bailout program.

But overlooked in these efforts is the total size of debts that financial firms receiving taxpayer assistance previously incurred to their executives, which at some firms exceed what they owe in pensions to their entire work forces, the Journal said.

For instance, nine banks paid out an estimated $50 billion of bonuses in 2007, based on the total compensation expense for the companies and assuming that for investment banks about 60 percent of total compensation was allocated for bonuses, and for commercial banks about 20 percent went to bonuses.

Goldman Sachs, Morgan Stanley and JP Morgan Chase did not immediately return calls seeking comment.

(Reporting by Shradhha Sharma in Bangalore; Editing by Kim Coghill)