« November 19, 2006 - November 25, 2006 | Main | December 03, 2006 - December 09, 2006 »
The Committee on Capital Markets Regulation yesterday issued its much anticipated report, which concluded that Wall Street and U.S. firms were in danger of losing their status as the destination of choice for capital raising.
And yet the fear of compliance costs and excessive litigation apparently didn't deter companies from staging IPOs in the U.S. last month. In fact, November was the best month since 2001 for the volume of U.S. IPOs. Anuj Gangahar reports ($ required) in the Financial Times:
November was the best month for initial public offerings on US stock markets for more than five years, with 32 companies from around the world raising a combined $8bn, according to figures from the data provider Dealogic.The strong showing testifies to the health of the US capital-raising environment, in spite of recent fears that over-regulation was hurting the competitiveness of US capital markets.
Last month was the best November for US stock market floats since 1999 and the best single month since June 2001 when 15 deals were priced, raising $14.3bn. For the year so far, deal volume is up by 19 per cent on last year. Of the top 10 US offerings last month, three were by overseas companies – Aercap Holdings from the Netherlands, Grupo Aeroportuario del Centro Norte from Mexico and North American Energy Partners from Canada. The flotations by overseas groups suggest the recent measures by US markets to stem the flow of listings business overseas may be starting to pay off.
By far the strongest debut came from Nymex, the commodities exchange, which soared by 125 per cent on its first day of trading two weeks ago. Last year, the NYSE attracted 192 new listings, while Nasdaq, its closest US competitor, drew 126.
The London Stock Exchange attracted 617 new listings but 510 of these were on Aim, its small-cap market, which has become the venue of choice, particularly for Russian groups.
Posted by dan at 09:41 AM
Guess what? When offered a choice between Health Savings Accounts and managed care products, workers (surprise!) seem to prefer the one that actually seems like insurance. The AP reports.
Posted by dan at 09:31 AM
My latest in Slate, on the differential in pay between executives of U.S. stock exchanges and those in Europe and Asia. Could it be that litigation and compliance costs aren't the only costs that are making U.S. exchanges less competitive?
Posted by dan at 09:30 AM
Shorter David Brooks. If Republicans want to keep educated yuppies like me in the party, they better start acting like centrist Democrats.
Posted by dan at 10:41 AM
George Will is angry at James Webb for speaking in an uncivil manner to President Bush. Funny, I missed his piece expressing outrage when Vice President Dick Cheney told Sen. Pat Leahy to go f*** himself on the Senate floor.
Posted by dan at 10:39 AM
For those in New York, I will be moderating a public discussion on philanthropy, poverty, and entrepreneurship in India and Asia at the Asia Society this evening at 6:30 p.m.
Posted by dan at 10:33 AM
Rogerio Jelmayer reports in the Wall Street Journal on a new milestone for Brazil.
SÃO PAULO -- Brazil will set an extraordinary record in 2006, becoming a net foreign investor for the first time in its history because of a huge mining deal.According to Brazilian Central Bank figures for the January-October period, the volume of overseas investments made by Brazilian companies totaled $22.8 billion, compared with incoming foreign direct investment volume of $13.6 billion.
October marked the first time in history for Brazilian companies to have invested more abroad during a calendar year than multinationals invested in Brazil.
The historic reversal was primarily because of a huge mining deal. In October, Brazilian mining giant Companhia Vale do Rio Doce, or CVRD, closed its $17.6 billion agreement to buy Canadian nickel miner Inco Ltd. On Oct. 27, CVRD made a payment of $13.3 billion to shareholders of the Canadian company, the first installment in CVRD's takeover.
Posted by dan at 09:10 AM
James Hagerty reports in the Wall Street Journal on the rise in foreclosure sales.
As a weak housing market nudges the foreclosure rate higher, next year is looking promising for investors in distressed real estate.So far, the U.S. housing slump hasn't produced a bonanza for such investors, but lenders stuck with foreclosed property are becoming more inclined to slash prices or sell properties through auctions, industry experts say.
"We're all going to have to be more creative in the next 12 to 24 months" in selling foreclosed homes, says Chad Neel, president and chief operating officer of Fidelity National Asset Management Solutions, a unit of Fidelity National Information Services Inc., Jacksonville, Fla. Mr. Neel's company helps lenders manage and sell foreclosed homes.
Williams & Williams Inc., a Tulsa-based auctioneer, says its sales of foreclosed homes will nearly double this year to about 5,060. Dean Williams, chief executive of the auction firm, expects another near doubling of sales in 2007.
Dallas-based Hudson & Marshall Inc. expects its auction sales of foreclosed properties to total about 4,800 this year, up 23% from 2005. David Webb, co-owner of the auction company, believes sales will rise at least 20% in 2007.
The auction firms say their busiest auction markets recently have included Michigan, Ohio, Indiana, Pennsylvania, Texas and Colorado. "Word on the street is that California, Florida and Arizona will also be very active in the next 12 months," Mr. Webb says.
Posted by dan at 09:03 AM
The answers to reducing emissions, energy use, etc., are going to come from the private sector, not the public sector. As companies realize they can save money (and hence increase profits) by becoming more efficient consumers of energy, just as they realized they can save money (and hence increase profits) by becoming more efficient consumers of labor, supplies, raw materials, and capital, things will start to change. All they need is some blue-chip consulting firm to show them the way, like McKinsey.
Steve Lohr, writing in the New York Times, flags McKinsey Global Institute's new study on energy-efficiency, to be released later today. Watch for it in this space.
That's the macro picture. Here's a pixel from the micro picture. Don Clark reports in the Wall Street Journal:
Hewlett-Packard Co. is starting a business to help cool computer rooms, based on technology it says can cut companies' energy costs by 25% to 45%.Cooling has become an important computer-industry issue as companies buy huge numbers of server systems that operate at high temperatures and can overheat. Air conditioning now represents 60% to 70% of the energy costs at data centers, more than the cost of powering the computers, H-P says.
Server makers are making progress in developing cooler-running machines. H-P's latest effort, by contrast, aims to reduce energy bills while using existing hardware and air-conditioning systems.
The Palo Alto, Calif., company has developed a network of sensors that can be placed at each server. The sensors continuously monitor the machines' temperatures and air-conditioning requirements based on factors such as the workload on each server. They send the data back to a computer that runs specialized energy-management software, which tells air-conditioning units to adjust the speed of blowers and the temperature of air they are sending.
Without data about the cooling needs of individual machines, companies now keep entire computer rooms' temperatures' lower than is necessary, wasting power, said Steve Cumings, an H-P director of marketing involved in the cooling effort. With the technology, which H-P calls "dynamic smart cooling," a medium-size data center might experience a 30% reduction in energy consumption, saving roughly $1 million a year, the company estimated.
Posted by dan at 08:58 AM
A lawyer who represents himself has an ass for a client, the saying goes. Just so, a politician who funds his own campaign has an ass for a fundraising consultant. The New York Times reports today on the sorry record of self-funders in last fall's campaign, although I can't seem to find the link. In Senate races, eight of the top ten self-funders lost, including Pete Ricketts of Nebraska ($11.6 million), Ned Lamont of Connecticut ($10.8 million) and Jim Pederson of Arizona ($9.0 million). In House races, seven of the top ten self-funders lost. The lesson: if you really want to buy a seat in Congress, bribing a representative may be the most economically efficient method. Duke Cunningham cost a lot less than $11.6 million.
Posted by dan at 10:32 AM
The Investment Company Institute reports that Exchange Traded Funds are on a roll. Assets up 45.3 percent over the past 12 months through October. By contrast, mutual funds saw assets rise just 9 percent between December 2005 and September 2006.
Posted by dan at 10:19 AM
Today is supposed to be black Monday for online retailers. I don't think this is quite what they had in mind.
Posted by dan at 10:20 AM
Floyd Norris details the rampant inflation in breakfast costs in the New York Times. (And he doesn't even include the price of a grande at Starbuck's.)
This column is not intended to determine what the real inflation rate is, if there is such a thing. Instead, it introduces an index that, sort of, traces the inflation that many people confront every morning. It is the breakfast inflation index.The index is made up of the nearby futures market prices for four commodities seen on many breakfast tables: coffee, orange juice, wheat and bacon.
By that measure, inflation is running out of control. In fact, breakfast inflation has been running above energy inflation.
At the end of 2001, it cost $2.65 in the futures market to buy one pound each of orange juice solids, coffee and pork bellies, plus six pounds, or a tenth of a bushel, of wheat. (Pork bellies are the source of bacon, and wheat is used for bread.)
By the end of last month, that price was up to $4.82. And it has risen a little more this month, although that change is not shown in the graph because the other charts are based on monthly consumer price indexes.
That is an overall inflation of about 82 percent in under five years — an annual rate of 13.2 percent. By contrast, the energy component of the United States Consumer Price Index has risen at a rate of 10.2 percent a year.
Too bad we can't eat imported textiles, toys, and computer hardware from China.
Posted by dan at 09:10 AM
John Authers of the Financial Times accurately sums up the dynamics of capital and labor in the U.S.
The strength of third quarter results is impossible to dismiss. With the peak weeks of earnings season now over, year-on-year earnings growth looks set to be almost 19 per cent, way in excess of the 15.3 per cent growth predicted when the quarter began, and the 13th consecutive quarter when earnings grew by 10 per cent for more.Companies also surprised forecasters by a greater margin than they have typically done in the past but is this sustainable ?
Corporate America is growing much faster than the US economy. This is partly because of globalisation but also because, put bluntly, capital is beating labour.
Wages are not rising at anything like 10 per cent and investors have more reason to be thankful than salaried workers.
According to John Hussman, of the Hussman Funds mutual funds group, corporate profit’s share of GDP is approaching 10 per cent. At the beginning of the current earnings expansion, the profit share was less than 5 per cent.
He says that, since 1962, whenever the profit share has exceeded 6 per cent (with low unemployment), earnings growth over the following three years has averaged only 2.1 per cent.
Posted by dan at 09:07 AM