IBM and Siemens Win $9.3 B Military Project

Elena
28 Dec, 2006
New York City

A new company, called BWI Informationstechnik GmbH, is being set up for the project. IBM and Siemens together will hold 50.1% of it, while the German federal government will hold the remaining 49.9%. The project is designed to bring data centers, software and applications, PCs, telephones and voice and data networks up to the latest standard.

[R]8:00AM IBM and siemens won a 10-year military contract for $9.3 billion.[/R]
International Business Machines ((IBM)) and Siemens ((SI)) were awarded on Thursday a 10-year 7.1-billion-euro ($9.3 billion) contract by the German military to modernize its technology system. A new company, called BWI Informationstechnik GmbH, is being set up for the project. IBM and Siemens together will hold 50.1% of it, while the German federal government will hold the remaining 49.9%.

The project is codenamed Herkules and starts working immediately. It is designed to bring data centers, software and applications, PCs, telephones and voice and data networks up to the latest standard. According to a statement from the military, that covers more than 140,000 computer work stations, 7,000 servers, 300,000 telephones and 15,000 mobile phones. The contract was expected to be signed after Germany's lower house of parliament approved the deal. Siemens is expected to secure 55% to 60% of the total volume of the deal.

Shares of Siemens jumped 1.2% to 75 euros in Frankfurt after the announcement. Shares of IBM rose 1.5% to close at $97.10 on the NYSE on Wednesday.


[R]7:30 AM Asian markets advance on Thursday, Japan finish little changed.[/R]
Asian markets finished higher on Thursday. The Nikkei 225 Index rose fractionally 0.01% to close at 17,224.81. Stocks were led higher by steels and brokerage-house shares. Nippon Steel surged 5.3% and Kobe Steel gained 3% on sustained expectations of robust earnings and expectations for realignment in the industry. Inpex Holdings slipped 0.2%, though, on caution about chasing upside following one-month rally in market. Other advancers included brokerage-firm stocks, with Daiwa Securities Group rising 0.8%. Shares of digital camera maker Canon fell 0.9% and Kyocera and Advantest were down respectively 0.6% and 0.5%.

In Hong Kong, strong fund inflows and rotational buying of large-caps helped fuel the benchmark index to a record high for the third consecutive session. The Hang Seng Index gained 1.4% to 20,001.91 an all-time high. BOC Hong Kong, the Hong Kong-listed arm of Bank of China, gained 8.4%, and Bank of Communications rose 1.5%. But China Construction Bank retreated 0.2% and ICBC shed 1.2%, as investors estimate their valuations as too high.

In South Korea, the Korea Composite Stock Price Index, or Kospi, ended up 0.7% at 1,434.46. Korean Air gained 2.3%, after the company announced that it aims to achieve 640 billion Korean won ($689.2 million) in operating profit in 2007, 14% higher than its target of 560 billion won for 2006.

Indexes in Australia, New Zealand and Singapore also advanced after finishing at record highs Wednesday. Australia S&P/ASX Index advanced 0.3% to 5,660.50, New Zealand NZX-50 rose 0.4% to 4,047.29 and Singapore Straits Times Index put up 0.1% to 2,963.49. Taiwan Weighted Price Index closed flat at 7,732.93.


[R]6:30AM European stocks canceled out earlier gains on Thursday due to oil stocks.[/R]
European markets were flat on Thursday. By mid morning, the FTSE 100 in London was flat at 6,245.3, Frankfurt Xetra Dax edged slightly higher at 6,610.95 and the CAC 40 in Paris was down 0.1% at 5,532.51.

Advancers

Property stocks were in focus as investors welcomed news from the US housing market as data showed sales of new homes rose 3.4% in November, topping forecasts. British Land gained 2%, while Land Securities Group added 1.5%. The decision of Dutch property group Rodamco Europe to buy a 50% stake in a Moscow shopping centre was also seen as a positive event. . Rodamco shares advanced 0.6%.

The housing data coming out of Britain also beat forecasts, with U.K. house prices up 10.5% for the year, according to the Nationwide Building Society. Shares in home builder Persimmon advanced 1%.

SAP shares gained 0.8% after a company official told a German newspaper that a double-digit growth is foreseen in coming years, powered by order growth and new products.

Siemens, the German conglomerate, advanced 1.1% after winning a 7.1 billion euros deal to modernise and manage the non-military IT systems of the country armed forces over 10 years.

Decliners

After crude prices dipped more than 3% over the past three days, oil stocks performed badly on Thursday, leading the markets lower. BP shed 0.7%, while BG Group shed 1.2%.

Also, Vodafone Group shed 0.5% after the U.K. telecom group lodged reportedly a bid for Hutchison Essar, which values the Indian operator as a whole at $17 billion to $18 billion.

Oil and gold

Crude oil for February delivery advanced 16 cents to $60.50 a barrel in after-hours electronic trading on the New York Mercantile Exchange in early trade in London. Brent crude for February settlement traded at $60.70 a barrel, up 18 cents, on the London-based ICE Futures exchange.

Gold opened Thursday at a bid price of $628.02 a troy ounce, up from $627.00 late Wednesday.

Currencies

The euro was slightly higher against the U.S. dollar on Thursday in thin holiday-season trading. The euro bought $1.3132 in morning European trading, compared with $1.3123 in New York late Wednesday. The British pound advanced to $1.9575 from $1.9564. The dollar bought 118.77 Japanese yen, up marginally from 118.74 yen on Wednesday.