Global Markets Focus on Bank Earnings

Mayank Mehta
10 Nov, 2009
New York City

World markets inch higher on the second day after G-20 statement. Earnings were in focus after HSBC and Barclays indicated diverging outlooks. Electronic Arts quarterly net loss widens. U.S. stocks traded sideways as U.S. Treasury bonds edged up.

[R]11:45 AM New York – World markets inch higher on the second day after G-20 statement. Earnings were in focus after HSBC and Barclays indicated diverging outlooks. Electronic Arts quarterly net loss widens. U.S. stocks traded sideways as U.S. Treasury bonds edged up.[/R]

World market indexes traded up a fraction a day after G-20 reassurance on the economic stimulus.

U.S stocks traded sideways in the morning and European markets edged higher. UK stocks were mixed after HSBC and Barclays reported diverging results reflecting their underlying businesses.

Barclays said nine months profit fell 28.7% and in the latest quarter ending in September dropped 54% to £1.08 billion from £2.33 billion.

HSBC indicated that on lower loan losses the net income the latest quarter ending in September was “significantly ahead” of the comparable period a year ago.

Media reports in London suggest that troubled Lloyds Banking Group plans additional job cuts of 4,300 and transfer 680 as it reorganizes its insurance and retail segments.

Earnings Review

Barclays PLC, the global financial services provider said nine months net profit fell 28.7% to £2.73 billion or 23.9 pence per diluted share compared to net profit of £3.83 billion or 54.7pence per share a year ago.

Barclays PLC, in the last one year traded as high as 390.00 pence in October 2009 and as low as 47.30 pence in January 2009. Based on the yesterday’s closing price of 334.00 pence the company has market cap of £36.84 billion.

Bilfinger Berger AG, the construction and services group said nine months net profit fell 20% to €72 million or €2.04 per diluted share compared to net profit of €90 million or €2.51 per share a year ago.

Dainippon Screen Mfg. Co., Ltd, the manufacturer of watches said second quarter sales fell 45% to ¥67.4 billion from ¥122.8 billion a year ago. Net loss for the quarter was ¥12.8 billion compared to net profit of ¥1.26 billion a year ago.

Electronic Arts Inc, the video game publisher said second quarter revenues fell 12% to $788 million from $894 million a year ago. Net loss in the quarter was $391 million or $1.21 per diluted share compared to net loss of $310 million or 97 cents per share a year ago.

Electronic Arts Inc ((ERTS)) in the last one year traded as high as $23.95 in June 2009 and as low as $14.24 in February 2009. Based on the yesterday’s closing price of $19.53 the company has market cap of $6.32 billion.

Fluor Corporation, the engineering and construction firm said third quarter revenues fell 4.4% to $5.42 billion from $5.67 billion a year ago. Net income in the quarter fell 11% to $162.1 million or 89 cents per diluted share compared to net income of $181.9 million or $1.0 per share a year ago.

Imperial Tobacco Group PLC, an international tobacco company said full-year revenues rose 29% to £26.5 billion from £20.5 billion a year ago. Net profit for the full-year rose 55% to £663 million or 65.3 pence per diluted share compared to net profit of £428 million or 50.4 pence per share a year ago.

JA Solar Holdings Co. Ltd, a manufacturer of high-performance solar products reported third quarter revenues fell 37.7% to Rmb 1.32 billion from Rmb 2.12 billion a year ago. Net income in the quarter was Rmb 106.8 million or Rmb 0.66 per diluted share compared to net loss of Rmb 142.8 million or Rmb 2.47 per share a year ago.

Vodafone Group Plc, the mobile telecommunications company said first-half revenues rose 9.3% to £21.76 billion from £19.90 billion a year ago. Net profit for the first-half rose 118% to £4.8 billion or 9.14 pence per diluted share compared to net profit of £2.2 billion or 4.02 pence per share a year ago.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed higher 61.74 or 0.63% to 9,870.73, and Hang Seng index in Hong Kong increased 60.61 or 0.27% to 22,268.16, and CSI 300 index in China higher 7.99 or 0.23% to 3,503.78. ASX 200 index in Australia increased 58.70 or 1.26% to 4,733.60. The FTSE Bursa KL Composite index in Malaysia was higher 6.33 or 0.50% to 1,274.08.

The Kospi Index in South Korea increased 17.11 or 0.51% to close at 1,582.30. SET index in Thailand closed lower 5.28 or 0.74% to 708.20. JSE Index in Indonesia decreased 24.48 or 1.02% to 2,381.96. The Sensex index in India decreased 58.16 or 0.35% to 16,440.56.

Europe Markets Review

In London FTSE 100 Index traded higher 16.91 or 0.32% to 5,252.09, in Paris CAC 40 Index increased 8.21 or 0.22% to 3,793.70 and in Frankfurt DAX index traded higher 22.30 or 0.40% to 5,642.02. In Zurich trading SMI increased 3.09 or 0.05% to 6,388.23.