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08-Nov-2009 11:15

Others / What makes you buy a certain stock?

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Buy a good FA stock. I look at FA , more than TA. Stock with good FA if stuck, will go up back again.

If buy a stock based on TA, n its FA is not good. Than GOD bless U.

Cheers.

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07-Nov-2009 16:46

HG Metal / HG Metal a hidden gem ?

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Been waiting fr this baby to perform also. Hope the UP show come soon.

Cheers.

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07-Nov-2009 10:36

SMRT / SMRT

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From UOB
SMRT Corporation (BUY/S$1.68/Target: S$2.00)

1HFY10: Stronger results on maintenance and project income.

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06-Nov-2009 22:49

StarHub / Starhub

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StarHub: Buy (RBS, 6 Nov)
StarHub has been de-rated after it lost the broadcast rights for the English Premiere League (EPL) and ESPN content from mid-FY10. We believe this de-rating has been overdone. Based on our sensitivity analysis, the loss of EPL/ESPN content should reduce earnings by 5-6%. There is the risk that subscriber migration to SingTel's IPTV service might lower StarHub's pay TV and possibly its broadband revenue contributions, but we believe this will be softened by the removal of significant costs attached to EPL/ESPN, which we estimate are north of 20% of the group's annual pay-TV revenue. We believe it is possible that SingTel's acquisition of EPL/ESPN leads to pay TV market expansion on dual subscriptions. SingTel's non-sports offers remain inferior to those of StarHub, which has locked in its content through long-term contracts. We may see some migration of StarHub customers who signed up purely for sports, but we believe that majority of sports subscribers will remain with StarHub and opt for a second pay TV subscription with IPTV. This might lead to a lower blended average revenue per user (ARPU) for StarHub, but this should be offset by reduced content cost and lower churn. If the dual-subscription scenario proves to be true, we could see upside to our earnings estimates on more limited revenue slippage. We upgrade StarHub from Hold to Buy, as the share-price correction has uncovered value, in our view. The stock is trading at a 23-25% discount to its historical PE and EV/EBITDA averages. Dividend yields remains attractive at 9%. Our forecasts and our DCF-based target price of S$2.15 are unchanged. With consensus FY11F EPS trending down by just 5% since the loss of EPL/ESPN, we believe the three-month price correction of 16% is overdone.

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05-Nov-2009 19:38

Citic Envirotech / United Envirotech

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United Envirotech posts 182.4% rise in net to $3.1 million in 2Q

Tags: United Envirotech

Written by The Edge

Thursday, 05 November 2009 18:57

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05-Nov-2009 12:05

COSCO SHP SG / Sell with fair value S$1.03

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DBS Vickers Securities in a Nov 4 research report says: "Group sales dropped 24% y-o-y to $752 million due to lower offshore, ship-repair and shipping revenue. Key drags on results were low margins across shipping and shipyard operations, which led to the plunge in net profit by 80% y-o-y to $22 million.

"Group net cash depleted rapidly from $1.2 billion as of end 2008 to a mere $0.3 billion currently. No recovery in sight till 2H2010. Uncertainties loom with execution risks and prospects of cuts in contract prices on existing orders. We cut our 2009 and 2010 earnings by 18% and 30% respectively to adjust for higher deferment/cancellations and lower margins for shipbuilding. Our target price is cut to 78 cents, (based on 15x its shiprepair/conversion earnings and 11x its shipbuilding/offshore earnings) following the earnings cut. Stock is expensive, trading at 20x FY10F, vs its peers.

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04-Nov-2009 19:35

SMRT / SMRT

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Moving quite slow........Hope to see more action

Cheers.

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04-Nov-2009 19:33

Citic Envirotech / United Envirotech

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Hope its qtr result out sooner. Hehe ...that should push it UP also.

I am expecting good result.......

Cheers.

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04-Nov-2009 16:48

Abterra / Any comment for ABTERRA?

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Mining for the years ahead

Moving up the mining value chain is what commodities trader and mining stock Abterra is now working towards for sustainable future growth, now that the dust is slowly settling on the economic crisis over the past year, says its executive director Mahesh Mehta.

This company aims to grow through securing upstream mining assets in key regional markets and becoming a fully integrated player in the natural resources business. Its immediate plans are to expand its international trading capabilities by leveraging on its existing strengths in the Chinese market while sussing out quality upstream opportunities in the region.

Abterra’s current main business is primarily importing iron ore into China from Australia, India and Indonesia for sales to steel mills as well as importing coking coal and exporting metallurgical coke, which makes up about 100% of its revenues thus far.

The group is on the cusp of its next phase of growth and looking forward to a different revenue mix once its new investments & acquisitions start to make contributions come 2010 and beyond.

From its beginnings not that far back in 2002 when it was first listed on the mainboard of the Singapore Exchange as Hua Kok International, Abterra found its way into its current business in Oct 2005 when Hong Kong-based Prosperity Steel acquired 70% stake in the company. After a buyout in 2006, Abterra is now 40% owned by General Nice Resources (Hong Kong) – a major player in the imports and exports of coke processed from coking coal and used in steel-production.

Banking on infrastructural demand

This relatively young company is hoping to ride the wave of growing demand for steel in key markets especially China, which are expected to strengthen together with potential recovery in the global economy in the future.

"Abterra has only been in the market for about three to four years, and to have developed into one of the major players in this sector has not been easy. We are fortunate to have been helped by the group, such that now we are able to move out into new markets", said Mr Mehta, who counts India and Indonesia as two other very large target markets for Abterra, in addition to tapping on China as its primary engine of growth, especially as economies in the world pick up this year onwards.

The move towards securing mining operations was a natural one according to the company.

"It was a jumpstart or piggyback onto a bigger growth to get our product base settled. Once we had a good grasp of trading, we decided to embark into other areas such as investing into more mines to enlarge our supply base for minerals", said Mr Mehta.

"We have already established concrete network infrastructures with many steel mills across China, which gives us a competitive edge and we are also working to establish such networks in India and Indonesia", he said.

Beyond securing upstream assets to strengthen its trading business, Abterra aims to emerge as a strong vertically integrated supply chain manager of minerals and resources in the region.

A vertically integrated business model would lower profit margin volatility while urbanization in densely populated countries like China, India and Indonesia has propelled an infrastructure boom would boost the demand for steel, which in turn would increase the demand for the raw materials for steel-coking coal & iron ore, said Mr Mehta.

Limited supply of raw materials coupled by growing demand is also expected to push prices further upwards, he added.

Come 2010 and 2011, Abterra expects to see the fruits of its investment forays as echoed by Lau Yu, Abterra's CEO who has said in presentations to investors: "Building on our successes so far, we have set ambitious targets and have the resources to deliver. We want to continue to make strategic acquisitions of coking coal mines to increase our product capacity to 5 million metric tonnes per annum in the next 2 to 3 years".

The prices of commodities is another reason why things are looking up. According to Mr Mehta, coking coal prices have run up from US$130/ton to about US$180-190/ton. The outlook for demand and prices is good based on the view that infrastructure projects will maintain strong growth as economies recover in the surrounding markets.

China’s steel industry fortunes on which Abterra's current and future growth are pegged, are on an uptrend, with coking coal and iron ore are the chief raw material inputs used in making steel.

Its strategic investments and recent acquisitions in mines, are definitely putting things in the right place for the group.

New acquisitions

Earlier this May, Abterra paid about S$36.8 million for a 49% stake in Shanxi Taixing Jiaozhong Coal Industry Co in Shanxi, China, which produces semi-hard coking coal for steel production. With an annual capacity of 150,000 metric tonnes already, this is set to increase production by six-fold to some 900,000 metric tones by end next year, upping expected coal reserves to some 10.23 million metric tonnes and provide a much needed boost to group revenues when in full gear. This mine as well as the Zuoquan Yongxing Coal Company in which Abter¬ra acquired a 15% stake in 2007 are expected to be the shot in the arm for the group.

The surge in production will enable Abterra to tap on the current uptrend in Chinese steel-making industry infrastructure & industry projects, which have been partly funded by the Chinese government's massive 4.5 trillion yuan economic stimulus package.

It is also expecting completion of a deal to take a 22.8% stake in Zuoquan Xinrui, which will give it access to iron ore production of about 400,000 metric tonnes, will give it a reserve of 37.9 million metric tonnes down the road.

The company also does not rule out raising more funds in the future for working capital or further strategic acquisitions, but will focus on getting its house in order first. The company last in 2006/7 raised capital through convertible notes and rights issues of about S$186 million, which were mostly ploughed into investments in the mines.

For the half year ended June 2009, Abterra’s revenues fell 37% to S$110 million from S$175 million, and net profit a whopping 81% from S$1.73 million from S$9 million year-on-year. Last financial period for the company from July-Dec 2008 according to its annual report, saw revenues at $215.3 million and net losses of $15.6 million.

For Q12009, Abterra's revenues grew to S$65.8 million from S$44.3 million which was attributed to the trading of coke and coal, which increased three-fold from S$22.1 million to S$64.9 million year-on-year. While the demand for iron ore and other non-ferrous metals has dropped significantly from the onset of the financial crisis, the demand for coke and coal still persist.

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03-Nov-2009 10:03

SMRT / SMRT

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SMRT Corp: Buy (Kim Eng, 2 Nov)
SMRT's revenue rose 1% year-on-year while net profit rose 24% yoy to $52.8m, mainly on higher other maintenance income and lower staff and energy costs. Sequentially, results tracked the improving economy as revenue rose 6% while net profit jumped 33% (+14% yoy) to $48.3m. Interim DPS was maintained at 1.75 cents. Group revenue was resilient despite train and bus fare reductions and a smaller taxi fleet as train ridership continued to grow (+2.2% in 2Q10). Rental and engineering (13% and 38% yoy respectively) as well as higher other maintenance income drove the topline for the most part. However, operating profit benefited from the lower costs of diesel, which improved the results of the bus and taxi operations. According to the Manpower Ministry, a net total of 15,400 jobs were created in 3Q09, reversing the losses of 6,200 and 7,700 jobs in 1Q and 2Q09. Although the increase is still small compared to 2008 (3Q08: +55,700), we believe job creation is a key leading indicator of SMRT's transport-related business, and expect to see an uptick in train and bus ridership in the next few quarters if the nascent recovery is sustained. SMRT has finally provided some guidance on newly-acquired 49%-owned Shenzhen Zona and we have raised our FY10-12 forecasts by about 4%. It will start to contribute in the current quarter. In the next two years, SMRT will also gain more stations that it can repurpose to earn rental income, starting with Pioneer and Joo Koon in 2HFY10, Jurong East and Orchard in FY11 and Esplanade Station in FY12. With the current stock market rally looking uncertain at the moment, we believe late cycle plays such as SMRT will start to outperform as its business tends to lag behind an economic recovery. The stock is also currently trading at the low end of historical valuations. We therefore upgrade SMRT to BUY with a $2.10 target price, based on a cycle average PE of 17x FY11 EPS.

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02-Nov-2009 19:49

SMRT / SMRT

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SMRT Corporation Ltd: Credible set of 2QFY10 results

By Kevin Tan
Mon, 2 Nov 2009, 09:35:53 SGT

SMRT Corporation turned in a credible set of 2QFY10 results. Revenue came in at S$229.4m (+1.1% YoY, +6.3% QoQ), in line with our expectations, while net income registered S$52.8m (+24.1% YoY, +9.5% QoQ), slightly ahead of our expectations mainly due to higher other maintenance and related income. For 2HFY10, management expects its profitability to be impacted by higher contracted electricity costs, volatility in diesel prices, and higher operating costs with the ramp-up in Circle Line. However, as we believe higher operating expenses have been adequately accounted for, we keep our FY10F revenue unchanged but raise our profit forecasts by 2.4% to factor in the higher other operating income. As our dividend assumption remains intact, our DDM-based fair value also stays at S$1.92. Maintain BUY on SMRT.

2QFY10 earnings slightly above expectations. SMRT Corporation turned in a credible set of 2QFY10 results. Revenue came in at S$229.4m (+1.1% YoY, +6.3% QoQ), in line with our expectations, while net income registered S$52.8m (+24.1% YoY, +9.5% QoQ), slightly ahead of our expectations due mainly to higher other maintenance and related income. For 1HFY10, revenue was slightly flat (+2.1% HoH) at S$445.3m, forming 49.1% of our FY10 sales forecast, while net income was up 21.9% YoY (+26.5% HoH) at S$101.0m, or 61.0% of our full-year earnings figure. The group ended the period with interim dividend of 1.75 S cents, in line with our projection.

Drivers/drags for 2QFY10 profitability. Main drivers for topline were higher revenue from its Circle Line (CCL) Stage 3 operations, rental revenue and fees from overseas projects. During the half-year period, SMRT also benefitted from higher other operating income, lower energy costs and S$8.9m jobs credit. However, the bottomline was partially dragged down by higher repairs and maintenance costs, and lower interest and investment income.

Challenging outlook for 2HFY10. For 3QFY10, management expects its rental revenue and fees from overseas projects to drive a YoY growth in revenue, though it is expected to be partially offset by lower fare revenue due to the fare reduction package and increased transfer rebates. However, its profitability is likely to be impacted by higher scheduled repair, maintenance and staff costs with the ramp-up in CCL. We also note that SMRT has recently contracted its electricity rates at 11% higher than its previous 6-month contract for a period of 12 months starting 1 October 2009. With higher expected finance costs from the recent issue of S$150m fixed-rate notes and lower jobs credit incentive from January 2010 onwards, we are therefore expecting softer HoH performance for 2HFY10.

Acquisition of Shenzhen Zona. Pursuant to the S&P Agreement for a 49% stake in Shenzhen Zona Transportation, SMRT also announced it has made the first tranche payment of RMB240m (aggregate consideration of RMB320m to be paid in two tranches). As such, this is now an associate company of the group. Profit contribution from the investment is expected to be material within five years of its acquisition.

Reiterate BUY. We keep our FY10F revenue unchanged but raise our profit forecasts by 2.4% in view of higher other operating income (we believe higher operating expenses have been accounted for). As our dividend assumption remains intact, our DDM-based fair value also stays at S$1.92. Maintain BUY on 14.3% potential upside.

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02-Nov-2009 16:59

SMRT / SMRT

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SMRT maintained at ‘buy’ by Nomura with $1.96 price target

Written by The Edge

Monday, 02 November 2009 14:32

Nomura has maintained its buy call on SMRT Corporation (MRT SP) at a price target of $1.96.

“While management has guided for higher costs in 2H FY10, on the back of higher electricity rates and interest costs, we expect to adjust our FY10F upwards given the strong performance in 1H FY10. Maintain a BUY with a PT at S$1.96,” says analyst Lisa Lee of Nomura Singapore in a First Look report on Oct 30.

SMRT’s surprise 24% y-o-y rise in 2Q FY10 net profit to $52.8 million was helped by higher sales and operating income, as well as $4.5 million in Job Credits payments for the quarter. 1H FY10 net profit of $101 million makes up 61% of Nomura’s FY10F of $165 million, and “we are likely to adjust FY10F earnings upwards to account for the strong performance,” says Nomura.

SMRT says the group rail division posted a 7% y-o-y rise in EBIT to $38.7 million, ahead of Nomura’s estimate of $30.3 million, with revenue up 0.4% y-y to $123 million. EBIT margins improved to 31.4%, from 29.4%, helped by income from rail-related consultancy work which was offset by higher repairs and maintenance, electricity costs and depreciation. With the first phase (Stage 3) of the Circle Line up and running, head count was also up, with the group’s total headcount at about 6,620 as at September 2009, compared with 5,900 last year, and 6,480 as at 30 June, 2009.

“With Stage 1 and 2 of the Circle Line targeted for launch in mid- 2010, we expect ridership at the new line to improve from the current 30,000 per day. We expect higher electricity costs in 2H FY10, as the group has renewed its electricity contract for the next 12 months from 1 October 2009-30 September, 2010, at 11% above previous levels,” says Lee in the report.

Bus and taxi operation posted turnaround quarters, with Bus EBIT at $1.82 million compared with an EBIT loss of $1.05 million, and taxi at $0.8 million versus an EBIT loss of $0.5 million previously.

“Group rental income, primarily from its MRT stations, rose 10.8% to $12.7 million for the quarter, again ahead of our expectations of $10.5 million. At the end-2Q FY10, the group had leased out a total of 29,225 sqm of lettable space. Income from engineering services also rose significantly to $5.5 million in 2Q FY10, from $0.9 million on increased demand from the train division.”

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01-Nov-2009 11:07

Keppel Land / Kepland

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This one has the best 3rd results compare to others like Capland, etc.

Let hope it can continue to move further UP soon.

Cheers.

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01-Nov-2009 11:05

Genting Sing / GenSp starts to move up again

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But Genting opening soon. Still can get at this price. Unless got bad continuous economy data. Maybe we can see yr valuation.

Anyway let see how things goes.

Cheers.

iPunter ( Date: 01-Nov-2009 10:45) Posted:

I will only buy this one @ .82 ... hehehe... Smiley

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01-Nov-2009 09:32

Others / DOW

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Obama Says Evidence Shows Economy Moving in ’Right Direction’

By Nicholas Johnston

Oct. 31 (Bloomberg) -- President Barack Obama said figures on economic growth and the number of jobs created by government spending show that the economy is “moving in the right direction.”

In his weekly radio and Internet address, Obama highlighted the Commerce Department report that the U.S. economy grew at a 3.5 percent annual rate the third quarter and separate data showing spending from the $787 billion economic stimulus is directly responsible for 640,329 jobs so far.

“I am pleased to offer some better news that, while not cause for celebration, is certainly reason to believe that we are moving in the right direction,” Obama said.

Economic growth and higher government spending hasn’t reduced the unemployment rate, which rose to a 26-year high of 9.8 percent in September. Obama has said he expects the rate to exceed 10 percent, and the jobless rate has been seized on by the administration’s critics.

“Economic growth is no substitute for job growth,” Obama said today. “And we will likely see further job losses in the coming days, a fact that is both troubling for our economy and heartbreaking for the men and women who suddenly find themselves out of work.”

Obama said the expanding economy is the first step to job creation and the gross domestic product report this week that showed the first quarter of growth in a year, is a “good sign.”

“We have made progress,” Obama said. “At the same time, I want to emphasize that there’s still plenty of progress to be made.”

Republican Address

In the Republican address, House Minority Leader John Boehner of Ohio criticized the proposed $894 billion health- care legislation unveiled by House Democrats this week. It would create a government-run insurance program, require employers to cover workers and impose a surtax on the wealthiest Americans.

“This 1,990 pages of bureaucracy will centralize health care decision-making in Washington,” he said.

Boehner said the legislation would require thousands of new government employees, put bureaucrats in charge of medical treatment and will raise health insurance premiums.

Boehner called on Democrats to work with Republicans to create a “fiscally responsible” overhaul of the health-care system.

Republicans favor proposals to let people buy health insurance across state lines, give states tools to overhaul health-care systems, curb medical malpractice lawsuits and expand health-insurance purchasing pools, Boehner said.

“We now have a choice: We can come together to implement smart, fiscally responsible reforms to improve Americans’ health care or we can recklessly pursue this government takeover that creates far more problems than it solves,” Boehner said.

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01-Nov-2009 08:22

Others / DOW

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NEW YORK : Despite the return of US economic growth, Wall Street was in no mood to celebrate as it braced for a Federal Reserve interest rate decision and crucial monthly labour data next week.

"Volatility is clearly on the increase as markets attempt to digest what appear to be contradictory signals on the economy," said Brian Bethune and Nigel Gault, economists at IHS Global Insight, in a client note.

After a slight dip the previous week, the blue-chip Dow Jones Industrial Average slid 2.6 percent over the week to finish Friday at 9,712.73.

The tech-heavy Nasdaq composite index plunged a sharp 5.1 percent to 2,045.11 over the week, while the broad-market Standard & Poor's index gave back 4.0 percent at 1,036.19.

The major indices on Friday remained stuck in negative territory from the opening bell, a day after the steep rally had snapped four consecutive sessions of losses.

The downtrend followed the market's 14-month high in mid-October, when the blue-chip Dow topped the psychological barrier of 10,000 points.

Though the Dow ended October with its eighth consecutive monthly gain, the other two indices posted their first monthly drop since February.

"We are getting increasingly the sentiment expressed by investors that there are a lot of gains that have been generated this year after a dreadful 2008," said Craig Peckham, an analyst with Jefferies, a US securities and investment banking group.

"That led to a fair amount of performance protection. We have not seen a great deal of willingness after this big rally to commit more capital to stocks," he said.

Many analysts have pointed out that the market appeared overextended after the Dow rose more than 50 percent since its early March lows.

Spirits were only temporarily lifted after the US government reported Thursday that gross domestic product rose a stronger-than-expected 3.5 percent at an annual rate in the third quarter, after a year of contractions.

The news sparked the strongest single-session Dow rally since July, with blue chips up 2.05 percent, but the euphoria quickly faded amid worries about the sustainability of GDP growth once emergency government support is withdrawn, despite a series of better-than-expected company earnings reports.

"Investors are struggling right now with what the next catalyst will be to take stocks higher," Peckham said.

"We are going to switch now to a market dominated by corporate earnings, to a trade dominated by central banks," he added.

The Federal Reserve's policymaking committee, the Federal Open Market Committee, meets Tuesday and Wednesday. The FOMC is widely expected to keep the Fed's base interest rate target at a historic low of zero to 0.25 percent to help stimulate growth.

All eyes will be fixed on the FOMC rate decision to be announced Wednesday and the accompanying statement, which will be pored over for signals on the direction of monetary policy as the economy emerges from recession that began in December 2007.

Markets will also be focused on similar meetings of the European Central Bank and the Bank of England.

Bonds benefited from stock market weakness. The yield on the 10-year Treasury bond fell to 3.392 percent from 3.475 percent a week earlier and that on the 30-year bond dropped to 4.236 percent from 4.289 percent. Bond yields and prices move in opposite directions.

Wall Street ended the week gripped by speculation that embattled CIT Group, a major lender to small and medium-sized businesses, would likely file for bankruptcy protection over the weekend.

Next week's hefty macroeconomic calendar concludes with the closely watched monthly labor market report for October. The unemployment rate rose to a 26-year high of 9.8 percent in September.

"There is a great deal of concern at this late stage of the year with where we are with jobs because the next two months are all about the consumer," said Marc Pado at Cantor Fitzgerald.

"Will they have the confidence to shop for the holidays?"

The calendar includes data on construction spending and the ISM manufacturing index on Monday and industrial orders and the ISM services index on Tuesday.

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30-Oct-2009 18:26

SMRT / SMRT

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SMRT posts 24% rise in 2Q net income to $52.8m

Written by Bloomberg

Friday, 30 October 2009 17:46

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30-Oct-2009 10:31

COSCO SHP SG / CoscoCorp

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Cosco Loss
China Cosco, Asia’s largest shipping line by market value, posted a 690.7 million yuan ($141 million) net loss compared with a profit of 5.56 billion yuan a year earlier, according to a statement late yesterday, citing domestic accounting standards. The Tianjin, China-based company booked 420.5 million yuan of fair value gains from forward-freight agreements and other assets.

NOL and China Cosco both said container volumes fell about 6% in the third quarter from a year earlier. China Cosco’s dry-bulk fleet, the world’s largest, had a 0.5% increase in volumes.

The shipping line fell 3.1% to HK$9.66 in Hong Kong trading yesterday. It has gained 79% this year. NOL declined 1.2% in Singapore to S$1.62. It’s risen 60% this year. Both companies announced their results after markets closed.

The slump in world trade has forced container lines including China Cosco and CMA CGM SA, the world’s third-biggest, to begin talks on delaying or cancelling ship orders. CMA CGM’s creditors are also seeking to replace the French company’s founding CEO, Jacques Saade, before they restructure its US$5.6 billion debt, three people with knowledge of the matter said yesterday.

Nippon Yusen K.K., Japan’s largest shipping line by sales, earlier this week widened its full-year loss forecast, while Mitsui O.S.K. cut its profit target by 93%. A.P. Moeller-Maersk A/S, owner of the world’s largest container line, said in August it may post its first annual loss in at least six decades this year because of the rates slump.

“There will still be a supply and demand gap next year,” said Corrine Png, a Singapore-based JPMorgan Chase & Co. analyst. “A turnaround will probably only happen in the second half.”

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29-Oct-2009 20:32

Others / DOW

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Economy in U.S. Probably Shook Off Recession in Third Quarter

By Timothy R. Homan

Oct. 29 (Bloomberg) -- The U.S. economy probably grew in the third quarter for the first time in more than a year, driven by gains in consumer and government spending that have failed to reduce unemployment.

The world’s largest economy expanded at a 3.2 percent annual pace from July through September after shrinking in the previous four quarters, according to the median estimate of 79 economists surveyed by Bloomberg News. Household purchases likely rose by the most since the first three months of 2007.

Policy makers will now focus on whether the recovery, buoyed by federal assistance to the housing and auto industries, can be sustained into next year and create jobs. The record $1.4 trillion budget deficit limits President Barack Obama’s ability to provide further stimulus, while Federal Reserve officials are trying to convince investors that the central bank will exit emergency programs in time to prevent a pickup in inflation.

“At this stage the numbers are just going to tell you the recession is over, and now the argument is going to center on the speed of the recovery,” said Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi UFJ Ltd. in New York. “There will be a lot of naysayers after the numbers because ‘cash for clunkers’ did figure prominently in the quarter’s bounce back.”

The Commerce Department’s report on gross domestic product is due at 8:30 a.m. in Washington. The economy shrank 3.8 percent in the 12 months to June, the worst performance in seven decades.

Consumers Spend

Consumer spending, which comprises about 70 percent of the economy, probably rose last quarter at a 3.1 percent annual rate from the previous three months, the report may show according to the survey median.

Much of the boost in purchases was provided by the administration’s auto-incentive program known as cash for clunkers, which offered buyers payments of as much as $4,500 to trade in older cars and trucks for new, more fuel-efficient vehicles. The plan, which ended in August, boosted sales by about 700,000 vehicles, according to a Transportation Department estimate.

The improving global economy helped companies from Amazon.com Inc. to Whirlpool Corp. exceed analysts’ sales estimates last quarter. Profits at about 85 percent of the companies in the Standard & Poor’s 500 Index that have released results beat expectations, according to Bloomberg data. That marks the highest proportion in records going back to 1993. The S&P 500 closed at a one-year high on Oct. 19.

Fewer Stockpiles

Growing demand caused inventories to keep falling, which may prompt companies to ramp up production in the coming months and contribute to growth. The drawdown will restrain today’s GDP numbers, economists said.

Orders for durable goods rose 1 percent in September, the Commerce Department said yesterday. The gain was the fourth in the last six months and indicates companies are planning to invest in new equipment.

“You should see more expansion in the categories we’re in, as well as more geographical expansion over time,” Chief Financial Officer Thomas Szkutak of Amazon.com, the world’s largest Internet retailer, said on an Oct. 22 conference call.

The White House’s Council of Economic Advisers estimates the stimulus program, signed into law by President Obama in February, boosted economic growth by 2 percentage points to 3 percentage points in the second quarter, by 3 points to 4 points last quarter and has prevented payrolls from falling even more.

Mounting Unemployment

In September, the unemployment rate reached a 26-year high of 9.8 percent, up from 7.6 percent from when Obama took office in January, figures from the Labor Department show. Economists project the jobless rate will exceed 10 percent by early 2010.

Since the recession began in December 2007, the U.S. has lost 7.2 million jobs. Payroll cuts peaked at 741,000 in January and slowed to 201,000 in August before accelerating again last month.

A report today from the Labor Department, also at 8:30 a.m., may show the number of Americans filing for jobless benefits decreased to 523,000 last week from 531,000 a week earlier, according to the median estimate in a Bloomberg survey.

The economy will likely grow at a 2.4 percent annual rate from October through December, the median forecast in a survey earlier this month showed. GDP will also grow 2.4 percent next year and 2.8 percent in 2011, the survey showed, compared with an average of 3.4 percent growth over the past six decades.

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28-Oct-2009 23:57

HG Metal / HG Metal a hidden gem ?

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wonder when the 3rd qtr results will be out.

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