Ford, Anadarko, BofA Raise Capital

123jump.com Staff
12 May, 2009
New York City

U.S. market indexes traded volatile as more banks and companies complete offering of stocks and debts or sell assets. Crude oil price rebounded and traded near $60 a barrel. March trade deficit increased on a rise in imported energy prices and larger decline in exports than in imports.

[R]11:05AM New York – U.S. market indexes traded volatile as more banks and companies complete offering of stocks and debts or sell assets. Crude oil price rebounded and traded near $60 a barrel. March trade deficit increased on a rise in imported energy prices and larger decline in exports than in imports.[/R]

U.S. stocks edged lower after global investors pulled back in a rally that lasted two months and lifted market indexes more than 40% around the world.

Financials and industrials traded mixed. Bank of America ((BAC)) gained after it raised $7.3 billion on a sale of its stake in China based bank. U.S. Bancorp declined 7% after it completed $2.5 billion common share offering.

Anadarko Petroleum Corp ((APC)) dropped 6.5% after it planned to offer 30 million shares and raise as much as $1.4 billion.

Fluor Corp ((FLR)) surged 8% after it reported first quarter adjusted earnings that met or exceeded most analysts’ expectations.

MBIA ((MBI)) increased 7% to $7.49 after it reported first quarter earnings of $3.34 a share compared to a loss of $12.92 a share in the quarter a year ago.

Ford Files to Raise $300 Million

Ford Motor ((F)) declined 11.7% to $5.37 as it prepares to sell 300 million shares and use part of the proceeds to pay for the medical trust for the retirees. Ford also granted option to sell 45 million more shares to underwriters.

Outstanding shares will increase to 3.102 billion or to 3.148 billion if underwriter’s option is exercised.

Net proceeds are expected to be used for general corporate purposes and part of the money is required to be used to fund Voluntary Employee Beneficiary Association retiree healthcare trust with the UAW.

The filing with the SEC noted that according to the settlement with various unions, “the first three payments would be due on December 31, 2009, June 30, 2010 and June 30, 2011. At each date, up to $610 million of the amounts payable could be satisfied by the delivery of Ford common stock (valued at fixed prices of $2.00, $2.10 and $2.20 per share, respectively)” and Ford intends to use a portion of the proceeds of this offering to fund all or a portion of the payments to the VEBA in lieu of delivering shares on those payment dates.

Citi, Goldman Sachs, JP Morgan Chase and Morgan Stanley are acting as joint underwriter.

Ford also said that it is unlikely that the company will pay any dividend in the foreseeable future and Ford paid dividend last for the third quarter 2006.

March Trade Deficit Rises

Exports of goods in March declined more than imports from February month, lifting the trade deficit to $27.6 billion from $26.1 billion in February. Rising petroleum prices in March also contributed to the trade deficit.

U.S. exports in March fell $3 billion to $123.6 billion and imports declined $1.6 billion to $151.2 billion.

In March, the goods and services deficit decreased $29.8 billion from March 2008. Exports were down $26.0 billion, or 17.4%, and imports were down $55.9 billion, or 27%. Trade deficit in March was nearly cut in half after hovering near $60 billion in March 2008 and 2007 on record high oil prices and other imports.

In the first quarter the U.S. trade deficit declined to $90 billion from $178.4 billion in the quarter in 2008 and $179.5 billion in the quarter in 2007.

China led all nations and regions with deficit of $15.6 billion in March followed by deficits with European Union of $4.4 billion, with Mexico of $3.9 billion, Japan of $2.6 billion and OPEC of $2.4 billion.

U.S. registered the highest surplus with Hong Kong of $1.5 billion followed by surpluses with Australia of $1.1 billion and Singapore of 0.5%.

If the current trend in petroleum and minerals prices continues, trade deficit in the second quarter may rise again.

Bank of America Raises $7.3 billion

Bank of America sold its 5.8% stake in China Construction Bank Corp for $7.3 billion.

The bank sold its 13.5 billion shares that were released after the expiration of the lock up period on May 7. Bank of America still holds 25.6 billion shares that it cannot sell till August 2011.

The stocks were purchased by an investment partnership that was led by Hopu Investment Management Company and included Singapore government controlled fund Temasek Holdings Pte.

Three independent sources in Hong Kong, Singapore and Charlotte, North Carolina confirmed the sale. Bloomberg first reported the deal news.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed lower 153.37 or 1.62% to 9,298.61, Hang Seng index in Hong Kong increased 65.69 or 0.38% closed to 17,153.64, CSI 300 index in China higher 63.25 or 2.32% closed to 2,788.56. ASX 200 index in Australia decreased 48.80 or 1.24% closed to 3,877.20. The KL Composite index in Malaysia lower 2.48 or 0.24% closed to 1,023.02.

The Kospi Index in South Korea decreased 11.65 or 0.82% to close at 1,403.51. SET index in Thailand closed higher 9.36 or 1.75% to 544.54 and JSE Index in Indonesia increased 11.28 or 0.62% closed to 1,842.02. The Sensex index in India increased 475.04 or 4.07% closed to 12,158.03.

Europe Markets Review

In London FTSE 100 Index traded lower 18.64 or 0.42% to 4,416.86, in Paris CAC 40 Index decreased 17.45 or 0.54% to 3,231.22 and in Frankfurt DAX index traded higher 12.67 or 0.26% to 4,879.58. In Zurich trading SMI increased 2.88 or 0.05% to 5,361.82.