Citigroup Reduces Workforce by 17,000

Elena
11 Apr, 2007
New York City

Citigroup, the U.S. biggest financial institution, announced it will reduce its work force by about 17,000 jobs as part of a restructuring plan aiming at lower costs and improved profit. The bank said in a statement that the overhaul will save the bank about $2.1 billion in 2007, $3.7 billion in 2008 and $4.6 billion in 2009.

[R]8:30AM Citigroup said it will cut 17,000 jobs.[/R]
Citigroup ((C)), the U.S. biggest financial institution, announced Wednesday it will reduce its work force by about 17,000 jobs as part of a restructuring plan aiming at lower costs and improved profit. The job cuts correspond to about 5% of the bank''s 327,000-strong work force. The anticipated changes include elimination of layers of management, expanding centralized procurement, consolidation of some back-office, middle-office and corporate functions to eliminate duplication. The bank said in a statement that the overhaul will save the bank about $2.1 billion in 2007, $3.7 billion in 2008 and $4.6 billion in 2009. Citigroup expects to record a pretax charge of $1.38 billion in Q1 of 2007, and additional charges of nearly $200 million pretax over the subsequent quarters of 2007. The bank is due to report its Q1 earnings next week.


[R]8:00AM NY-7:00PM Mumbai Sensex ends flat in range-bounf trade, small-caps, mid-caps advance.[/R]
The Sensex on BSE finished 6.30 points, or 0.05%, lower at 13,183.24. Trade was extremely range-bound today as the index traded in a narrow range of 60-odd points, from 13,190 to 13,250 for the major part of the session. The market-breadth was strong as there were three gainers for every two decliners. For 1,532 stocks that advanced, 1,038 declined and 63 remained unchanged. Of the 30 stocks in the Sensex 14 advanced, while the rest declined. The turnover on BSE was Rs 3,847 crore, lower than Rs 4,201.83 crore on Tuesday. On NSE, the turnover was Rs 7,984.1 crore, also lower than Rs 8441.09 crore on Tuesday.

Economic news

The four leading members in the Doha Round of global trade talks are holding bilateral meetings before a new attempt is made to save negotiations, although none of the countries have great hopes for a breakthrough. This is the first time trade ministers of the G-4 trading powers - India, Brazil, the United States and the European Union have gathered for talks since the Doha discussions ended fruitlessly last July when Washington was unwilling to yield more ground in reducing farm subsidies.

The second largest public sector lender in the country, Punjab National Bank, has decided to raise its Benchmark Prime Landing Rate by 75 basis points to 13%. Other banks such as State Bank of India and Bank of Baroda had also increased their prime lending rates to 12.75% and 13.25% respectively.

According to information from the industry sector domestic car sales in the financial year that ended March 31 increased 22% from the year before to 1,076,408 from 882,208 in 2005/06.

IPO

Gremach Infrastructure Equipments & Projects ended at Rs 83.95, a discount over IPO price of Rs 86. The stock had debuted earlier today at Rs 92 on BSE. It reached a low of Rs 80.70 and high of Rs 100.

Trading highlights

Indiabulls Real Estate was the most-active stock with a turnover of Rs 190 crore followed by Indiabulls and MindTree.

Advancers

Hindalco was the top gainer today, soaring over 4% to Rs 142 on high volumes of 16.88 lakh shares. India’s largest private sector steel manufacturer Tata Steel followed with gain of 3.3% to Rs 512. Reportedly, Tata Steel is likely to launch a rights issue of nearly Rs 3,500 crore to part-finance its $12.15 billion acquisition of Anglo-Dutch steelmaker Corus Group, payment for which is to be made today. The issue is likely to be priced at around Rs 400 a share. Other metal stocks like Hindustan Zinc, Jindal Saw Pipes, Jindal Steel also gained between 3% and 6%.

BHEL was another stock that performed well, up 1.2% to Rs 2,493.40. Bharti Airtel finished over 1% higher at Rs 773, while Cipla advanced slightly more than 1% to Rs 236.1. Index heavy Reliance Industries edged higher 0.38% to Rs 1,387.05 on 4.42 lakh shares. It surged to a high of Rs 1,398.

Decliners

Pharma shares declined on intense selling pressure. Ranbaxy Laboratories lost 3.5% to Rs 345.30, leading the decliners. Dr Reddy’s shed 2.6% to Rs 701.25.

Cement stocks finished also lower. ACC lost 2% to Rs 731.7 Gujarat Ambuja Cements declined 1.3% to Rs 107.9. Other decliners included HDFC and Reliance Communications down around 1.5% each to Rs 1,583 and Rs 413, respectively.

IT large-cap Infosys Technologies declined 0.41% to Rs 1,190, after reaching a high of Rs 2,038, ahead of its Q4 March 2007 results, due on Friday, April 13, 2007. Satyam Computers also lost 0.8% to Rs 441.6.


[R]6:30AM European markets were higher on Wednesday with oil stocks leading the advancers[/R]
European markets advanced in mid-morning trade on Wednesday. Frankfurt was up 0.3% at 7,184.42, while the CAC 40 in Paris gained 0.2% to 5,778.51 and London FTSE 100 was 0.2% higher at 6,427.6.

Advancers

Royal Dutch Shell was an important advancer as announced it was to pay $352.6 million, including administrative costs, to settle claims lodged by European and other non-US investors related to the shock reserves downgrade of the company in 2004. Relief that the company had now put the episode behind it supported the shares rally of 0.9%.

Other companies jumped on Royal Dutch Shell’s bandwagon and also advanced. Total of France gained 0.9%, Austrian OMV added 1.3% and Norwegian Statoil climbed 0.9%.

The fashion retailer Hennes & Mauritz climbed 1.4% after the company announced it could increase efficiency and maintain the gross profit margin of nearly 59%.

Decliners

Another french fashion group, PPR, shed 2.1%, though, following Tuesday announcement it was bidding $7.1 billion for German sportswear maker Puma. JPMorgan cut its rating on PPR from overweight to neutral and lowered its price target.

Oil and precious metals

Crude oil traded near $62 a barrel in New York on speculation U.S. stockpiles of gasoline dropped for a ninth week. Crude oil for May delivery was up 5 cents at $61.94 a barrel in after-hours electronic trading on the New York Mercantile Exchange in early trade in London. Brent crude for May settlement gained 29 cents, or 0.4%, to $67.71 a barrel in electronic trading on the ICE Futures exchange in London.

Silver rose for a third consecutive day on increased demand for industrial metals. Gold was little changed after surging 1.1% yesterday. Silver for immediate delivery climbed 4.5 cents, or 0.3%, to $13.92 an ounce in early trade in London. Gold gained 43 cents to $678.32 an ounce after adding $7.15 yesterday. Palladium dropped $1.50 to $359.50 and platinum fell 50 cents to $1,263.

Currencies

The dollar was mixed against other major currencies in European trading Wednesday morning. The euro traded at $1.3426, up from 1.3424. The British pound was at $1.9779, up from $1.9716. The dollar bought 119.25 Japanese yen, up from 119.12