Profitshop

China’s two biggest trainmakers said they plan to combine through a share swap, a move intended to boost exports of the country’s high-speed rail technology. The merger between China CNR Corp. (6199) and CSR Corp. (1766) will be at a ratio of 1.1 CSR share for every CNR share, the companies said in a joint statement today. The conversion price for CNR is equal to 6.19 yuan per share or HK$8.05 for its Hong Kong-listed shares, they said in a filing to the Shanghai exchange. The proposal to combine the two trainmakers comes as competitors such as Germany’s Siemens AG and France’s Alstom SA (ALO) are facing constrained public spending in developed markets. China is competing aggressively for overseas rail projects, targeting emerging markets in Africa, Eastern Europe, Latin America and Southeast Asia while also pitching for high-profile projects in the developed world. Chinese Premier Li Keqiang has touted the country’s rail engineering and construction companies on overseas trips, sig...

It’s Christmas, and the tills at Dublin Airport are ringing merrily on high. About 770,000 passengers will travel through the airport over the holidays, rising 8 percent from last year, boosted in part by families flying off to winter sun and skiing vacations, according to the state-owned DAA, which runs the airport. Reinforcing the appeal of a rebound in Irish travel, British Airways (IAG) owner IAG SA made an offer for Aer Lingus Group Plc (AERL) this month, prompting a surge in its shares. The passenger numbers flowing through the airport may also present an opportunity for investors looking to play Ireland’s revival, according to Philip O’Sullivan, an analyst in Dublin at Investec Plc (INVP), which recommends buying DAA’s 2018 bond. “DAA is very much a leveraged play on the Irish economy,” saidO’Sullivan. “We have been fans of the bond for some months now, viewing it as a relatively cheap way to play the sovereign.” By Joe Brennan and Dara Doyle

The ruble rallied as companies sold dollars to pay local taxes, shoring up the currency for a second day after China signaled it’s prepared to offer Russia support to tackle the worsening economic slump. The ruble strengthened 5.5 percent to 55.4995 a dollar by 2:52 p.m. in Moscow, bringing its two-day appreciation to 11 percent. The yield on 10-year government bonds fell 44 basis points to 13.16 percent, while the dollar-denominated RTS Index of equities climbed for a fourth day. Corporate tax payments that Bank of America Corp. estimates will amount to 500 billion rubles ($8.8 billion) are bolstering the ruble as last week’s interest-rate increase to 17 percent squeezes money-market funding. Two Chinese ministers offered support for President Vladimir Putin as Russia’s highest borrowing costs in 11 years choke an economy already facing a deepening slowdown due to sanctions over Ukraine and low oil prices. “Our official forecast is still 48 rubles per dollar by the end of the year ...

It’s the fattiest -- and for some, the tastiest -- of Jewish holidays. For time immemorial, Jews around the world have celebrated Hanukkah by eating jelly doughnuts and pancakes fried in oil to commemorate a miracle: a small flask of oil lasted long enough to light Jerusalem’s holiest temple for eight days in an uprising against the Greek more than 2,000 years ago. Lately, some followers have started worrying about what the frying is doing to their arteries and waistlines. In Israel, where it’s not unusual to gobble down several daily doughnuts during the feast also known as the Festival of Lights, some bakeries are tweaking ancient traditions and selling Hanukkah treats that boast less fat, as well as some vegan and gluten-free alternatives. Bread Story, a bakery on Tel Aviv’s trendy Dizengoff Street, has ditched frying altogether. Instead, manager Nir Zur says strawberry, chocolate, caramel, and pistachio doughnuts are baked in the oven, allowing him to advertise one-third fewer c...

Gold traded little changed as investors weighed oil prices and the strength of the dollar and as a gauge of the metal’s price swings was near the highest since January. Gold futures fell 2.2 percent last week for the first loss in three. Bullion’s 60-day historical volatility is near a level of 18.1 set Dec. 16, data compiled by Bloomberg show. The Bloomberg Dollar Spot Index slipped 0.1 percent today and Brent crude declined 0.4 percent. The metal, which reached a four-year low last month, is down 0.5 percent this year. Holdings in gold-backed funds are near the lowest since 2009, as the dollar trades near a five-year high on the outlook for higher U.S. interest rates, and after slumping oil prices reduced demand for an inflation hedge. By Nicholas Larkin and Jasmine Ng

Shares of oil companies are also dropping, with a 49 percent decline in the 76-member Bloomberg Intelligence North America E&P Valuation Peers index from this year’s peak in June. The drilling had been driven by high oil prices and low-cost financing. Companies spent $1.30 for every dollar earned selling oil and gas in the third quarter, according to data compiled by Bloomberg on 56 of the U.S.-listed companies in the E&P index. Financing costs are now rising as prices sink. The average borrowing cost for energy companies in the U.S. high-yield debt market has almost doubled to 10.43 percent from an all-time low of 5.68 percent in June, Bank of America Merrill Lynch data show. Locking in a minimum price for crude reassures investors that companies will have the cash to keep expanding and lenders that debt can be repaid. While several companies such as Anadarko Petroleum Corp. (APC), Bonanza Creek (BCEI) Energy Inc., Callon Petroleum Co., Carrizo Oil & Gas Inc. and Parsley...

Leaders of the world’s biggest banks touted the virtues of austerity at the World Economic Forum in Davos -- for themselves, not just for over-indebted governments. Many arrived in the Swiss Alps following a year marked by weak revenue, declining stock prices and cuts in jobs and compensation. The finance and banking industries remain the “least trusted” for the second consecutive year, according to a 20-country survey released earlier this week by public relations firm Edelman. “Last year every bank thought they could grow their way out of trouble,” Huw van Steenis, who oversees European bank research for Morgan Stanley (MS) in London, said between meetings with investors and policy makers in Davos. “Now they realize they have to shrink their way out of trouble.” Financial companies, mainly in Western Europe and the U.S., have announced more than 238,000 job cuts since last year’s meeting in Davos, according to data compiled by Bloomberg. Bank of America Corp. (BAC), Deutsche Bank...

Carnival Corp. (CCL) fell the most in more than 11 years in London trading after saying the grounding of the Costa Concordia off Italy’s Tuscan Coast that killed at least six people will cost the company as much as $95 million. Carnival, the world’s biggest cruise operator with brands including Cunard and Princess Cruises, dropped 16 percent to 1,878 pence, the biggest decline since 2000. The vessel will be out of service for at least the current financial year ending Nov. 30, the Miami- and London-based company said in a statement today. The reduction in fiscal 2012 earnings will amount to 11 cents to 12 cents a share, it said. Carnival said it anticipates additional costs to the business that aren’t possible to determine at this time. “There will be negative short-term implications for bookings across the cruise sector as pictures of the stricken ship are flashed around the world,” said Wyn Ellis, an analyst at Numis Securities in London who reduced his recommendation on the stock...

Overseas investors sold South Korean stocks for the seventh day, the longest losing streak in two months, helping drag down the benchmark Kospi (KOSPI) index to its lowest level since Feb. 5. Global funds pulled a net 542.9 billion won ($492 million) of Kospi shares as of 3:36 p.m. in Seoul trading, taking total sales in the seven days to 2.83 trillion won, according to data compiled by Bloomberg. The string of outflows is the longest since mid-October. The Kospi dropped 0.1 percent to 1,897.5, while the won weakened 0.7 percent. Korea’s stock index has declined 5.7 percent this year, the worst performer in Asia after Malaysia, as profits declined at the nation’s biggest companies and volatility in the won increased. Investors withdrew more than $2.5 billion from U.S. exchange-traded funds that buy developing nation stocks and bonds last week, the biggest outflow since January, as oil declined and concern grew the U.S. will raise borrowing costs. “Global investors in general have be...

Commodity producers led European stocks to their worst week since 2012 as U.S. benchmark oil extended declines below $60 a barrel. Norway’s krone weakened and Russia’s ruble slid to a record, while a surge in government bonds sent yields in Europe to all-time lows. The Stoxx Europe 600 Index dropped 1.5 percent at 10:45 a.m. in London. Standard & Poor’s 500 Index futures slipped 0.6 percent, with the gauge set to end seven weeks of gains. West Texas Intermediate crude lost 1.5 percent to $59.05 a barrel. The krone slid to an 11-year low against the dollar, while the cost of insuring Russian government debt rose for a 15th day, the longest streak on record. The yield on 30-year German bunds slid as much as six basis points to a record 1.465 percent and France’s reached 1.931 percent. Oil is headed for the 10th weekly drop since the start of October after OPEC decided against reducing its output, even as the highest U.S. production in more than three decades exacerbates a global gl...

Households in England and Wales today received a boost when Britain’s water regulator published a final determination on prices that will see the average customer bill fall about 5 percent starting next year. Ofwat published the prices that Britain’s water and waste companies, including United Utilities Plc (UU/) and Severn Trent Plc (SVT), can charge for the five-year period starting 2015. The measures will see average annual rates drop by about 5 percent before inflation, meaning bills will be reduced by about 20 pounds ($31) from 396 pounds now to 376 pounds, it said in a statement. The water regulator sets limits on how much utilities can charge customers every five years. The decision is aimed at supporting 44 billion pounds of investments in measures such as curbing leaks and sewer flooding including into the Thames River while keeping household bills as low as possible. The price review has been subject to consultation with some utilities tweaking and re-submitting rate plans....

Shengjing Bank Co., the biggest city commercial lender in northeastern China, and its investors are seeking as much as $1.4 billion from an initial public offering in Hong Kong. The company, based in Shenyang city, and its shareholders offered about 1.38 billion shares at HK$7.43 to HK$7.81 each, according to a term sheet obtained by Bloomberg News. New shares account for 90.9 percent of the offering. Shengjing Bank is following provincial and city lenders Harbin Bank Co. and Huishang Bank (3698) in going public in Hong Kong to bolster capital as the world’s second-largest economy slows and bad loans increase. The lender aims to set a final price on Dec. 18 and start trading on Dec. 29, the terms show. Five cornerstone investors, including Chow Tai Fook Nominee Ltd., agreed to buy a combined $700 million of stock as part of the IPO. Chow Tai Fook committed $100 million, while Paul Suen Cho Hung will invest $180 million, the terms show. Cornerstone investors typically agree to hold ...

Mexico’s central bank sold dollars to bolster the peso for the first time in more than two years, as officials try to curb volatility in the currency following an 8.2 percent slide in the past month. The Bank of Mexico sold $200 million today at an average price of 14.7544 pesos each, according to a website posting. The auction, conducted under procedures disclosed earlier this week, took place after the market exchange rate weakened by more than 1.5 percent from yesterday’s official price. The market closed today at 14.7772 pesos per dollar, the weakest since March 2009, according to data compiled by Bloomberg. The peso, the most-traded emerging-market currency, has weakened as plunging oil prices damped speculation that a projected energy boom in the country would attract foreign investment and spur economic growth. The slide has upended bets made earlier in the year on peso-denominated bonds by money managers including Pacific Investment Management Co. and BlackRock. “At the end ...

Perhaps 2014 will go down in history as the year that junk bonds sent a warning signal as oil plummeted and stocks just kept rallying. Prices on high-yield bonds have declined 2.4 percent this month and 5.7 percent since the end of August, even as U.S. equities have climbed to new highs. The dollar-denominated debt is now yielding the most relative to a comparable measure on the Standard & Poor’s 500 index since 2011. The divergence may signal junk-bond traders are picking up on a fundamental problem of overvalued energy companies in frothy markets fueled by six years of record Federal Reserve stimulus -- and that stock investors should pay attention. While falling oil prices mean consumers have extra cash to deploy elsewhere, boosting the economy, the price plunge may also crimp the capital spending by energy companies that has been a driver of growth in recent years. “The big question is whether oil’s problems are going to stay local or whether they’re going to spread out,” M...

China’s stocks were little changed as the benchmark index erased an advance before the release of industrial production data. Neusoft Corp. leds gains for technology companies after it said Goldman Sachs Group Inc., Hony Capital and other investors agreed to invest in its health-care businesses. China Eastern Airlines Co. and Cosco Shipping Co. slumped at least 2 percent after rallying 10 percent yesterday on lower oil prices. Data later today will show industrial production probably expanded 7.5 percent last month, according to estimates compiled by Bloomberg, slowing from October’s 7.7 percent gain. The data follow a report earlier this week that showed the inflation rate and producer prices dropping more than forecast. The Shanghai Composite Index (SHCOMP) slipped 0.1 point to 2,925.64 at the 11:30 a.m. break, extending this week’s loss to 0.4 percent. The index has climbed 17 percent in the past month amid speculation the central bank will cut reserve-requirement ratios to suppo...

Canadian stocks rose, after plunging the most in 17 months yesterday, as banks advanced after the U.S. reported better-than-forecast retail sales and unemployment data. Painted Pony Petroleum Ltd. (PPY) rose 4.7 percent to pace an advance among energy stocks after yesterday’s selloff. Gildan Activewear Inc., the clothing exporter, added 2.6 percent. National Bank of Canada and Bank of Montreal advanced at least 0.7 percent as financial shares climbed for the first time in six days. The Standard & Poor’s/TSX Composite Index (SPTSX) rose 52.17 points, or 0.4 percent, to 13,905.12 at 4 p.m. in Toronto, paring an earlier gain of as much as 1.7 percent. The equity gauge has dropped 3.9 percent this week, narrowing its advance this year to 2.1 percent. Oil, bank and raw-materials are the biggest laggards in Canada for the first time since at least 1988, fueling concern the nation’s economy is fading just as the U.S. is taking off. The three industries, which collectively account for t...

The rout in energy stocks reminds Tim Rochford of something else he’s seen in Texas. “What happened is almost like a herd of cattle, one cow turns left, all the cows follow it and it’s a stampede,” said the 68-year-old co-founder of Midland-based Ring Energy Inc., one of 118 industry executives who bought shares of their own companies in the last month amid the worst losses since 2008. “This is an absolute fire sale,” he said. “It’s an overreaction and the result is it’s oversold.” With valuations at a decade low, oil executives such as Rochford and Chesapeake Energy (CHK) Corp.’s Archie Dunham are driving the biggest wave of insider buying since 2012, data compiled by the Washington Service and Bloomberg show. They’re snapping up stocks after more than $300 billion was erased from share values as crude slipped below $70 for the first time since 2010. Rochford and two other board members, Stanley McCabe and David Fowler, bought a total of more than 30,000 Ring shares over the past...

The Bank of England is willing to put aside its own forward guidance to determine how well the country’s eight largest lenders would fare in a crisis. Governor Mark Carney has said rate increases from the current record-low 0.5 percent are likely to be gradual and the peak in rates lower than in previous cycles. Yet in its stress test of the U.K.’s eight largest banks, the BOE assumes an increase to 4 percent by the end of 2015. “You could argue that going to 4 percent is against their own policy,” said Charles Goodhart, a former member of the Bank of England’s Monetary Policy Committee and a professor at the London School of Economics. “I think it’s actually quite courageous, and better than the ECB did, to include in the scenario a feature which in some sense is against their current policy.” The BOE scenario will examine whether U.K. lenders could survive the interest-rate spike coupled with an economic and financial catastrophe so severe that it’s only happened once in the last...

UBS Group AG (UBSG), facing the threat of competition from Google Inc. (GOOGL) and Amazon.com Inc., has turned to a Singapore-based technology company that uses artificial intelligence for help delivering personalized advice to the bank’s wealthy clients. Sqreem Technologies Pte. Ltd. beat some 80 teams competing in the Innovation Challenge, a contest organized by Switzerland’s biggest bank that offered S$40,000 ($30,000) and a potential contract to the winner. Their task: Extract the information most relevant to an individual client from an explosion of data and deliver this tailored content to clients’ mobile phones, iPads and other digital devices. “Banking is one of the most rudimentary industries when it comes to digitalization,” Dirk Klee, chief operating officer for UBS wealth management and responsible for digital initiatives, said in an interview. “EBay, Amazon - everything is getting more and more digital. The question is how we translate this into a similar experience for ...

West Texas Intermediate and Brent crude extended declines from the lowest close in more than five years amid speculation that U.S. oil producers will fight OPEC for market share. Futures dropped as much as 1.8 percent in New York and 1.9 percent in London. Crude explorers in the U.S. increased the number of operating rigs last week, defying predictions of a drilling slowdown, according to data from Baker Hughes Inc., a Houston-based field services company. Oil’s relative strength index remains below 30, signaling that the market is oversold. The Bloomberg Dollar Spot Index traded near the highest level since March 2009, damping the investment appeal of commodities. Crude is trading in a bear market amid signs that U.S. output is expanding even after the Organization of Petroleum Exporting Countries opted not to reduce its production quota. Falling oil prices will put “short-term pressure” on Iran’s budget, President Hassan Rouhani said in parliament yesterday, the Iranian Students’ N...

Crude oil dropped toward a five-year low while China’s Shanghai Composite Index (SHCOMP) fluctuated after regulators urged caution following an 18 percent surge in two weeks. Emerging-market currencies were weaker against the dollar after a U.S. payrolls report beat all estimates. Oil in the U.S. and London was down at least 1 percent, with West Texas Intermediate crude headed for its lowest close since July 2009. The Shanghai Composite Index swung from a loss of 2 percent to a 0.2 percent gain by 10:56 a.m. in Tokyo, while the MSCI Asia Pacific Index swung between gains and losses. The greenback traded near a more-than seven-year high versus the yen and climbed against the currencies of New Zealand, Malaysia, Indonesia and South Korea. Investors must consider risks while putting money into stocks, China’s securities regulator warned yesterday after a buying spree fueled a 21 percent rally in the Shanghai Composite Index over the past month, the most among 93 global indexes tracked b...

Commonwealth Bank of Australia and its three main competitors may need as much as A$30 billion ($25 billion) after a government-commissioned inquiry called for “unquestionably strong” capital levels, analysts said. The shortfall is based on lenders needing to boost levels to within the top quartile of their global peers and set aside additional funds against potential losses on home mortgages, as recommended by the Financial System Inquiry report released yesterday in Sydney by Treasurer Joe Hockey. Australia’s major lenders hold about 10 percent to 11.6 percent of their assets as Tier 1 capital compared with at least 12.2 percent at the world’s safest banks, the government’s first inquiry into the financial system since 1997 said. Banks should be strong enough to withstand shocks, particularly given their reliance on overseas investors for funding, the report said. “The onus on capital is in line with global changes and Australia has to fall in line,” John Buonaccorsi, a Sydney-ba...

Gold slumped after the U.S. added the largest number of jobs in almost three years, fueling concern that the Federal Reserve will move closer to raising interest rates. Silver declined. Prices for gold options betting on a rally tumbled, and the metal’s 60-day historical volatility climbed to the highest since March. The dollar rose to the highest since 2009 against a basket of currencies, cutting the appeal of bullion as an alternative asset. Futures fell to a four-year low last month on waning demand for the metal as a store of value. Employers in the U.S. added 321,000 jobs in November, the most since January 2012. The report boosted speculation that Fed policy makers will be assured the economy is strong enough to withstand an increase in borrowing costs next year. “A selloff in gold is inevitable with these kind of numbers,” Chris Gaffney, the senior market strategist at EverBank Wealth Management in St. Louis, said in a telephone interview after the report. “This tells us rate...