Platinum leaps over $1 900

(Fin24) - Platinum cleared the $1 900 an
ounce mark on Monday for the first time in its history as concerns of further supply disruptions due to power shortages continued to plague the market.

The precious white metal gained $27 to trade at $1 917.50 an ounce by 13:45 after hitting $1 890 in late after-market trade on Friday.

Additionally, Eskom's prediction that power supply problems were likely to continue for several weeks made "further gains seem inevitable with the metal potentially testing $2 000/oz in the not too distant future," said James Moore of TheBullionDesk.

South Africa's ongoing electricity concerns have already seen several precious metals producers warn that their output would drop in 2008, as Eskom restricted mines operating in the country to a power supply that equated to 90% of their average requirements.

 

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BNP Paribas not planning SocGen bid: source

(Reuters) - French bank BNP Paribas (BNPP.PA: Quote, Profile, Research) is not preparing a hostile takeover bid for embattled rival Societe Generale (SOGN.PA: Quote, Profile, Research) but could be interested in a friendly deal, a source familiar with the bank's thinking said on Monday.

 

A French financial newsletter report on Monday that BNP was preparing a 93-euros-a-share offer for SocGen was "total rubbish", the source said.

 

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Random House to sell books by the chapter online: report

(Reuters) - Random House Publishing Group, the world's largest book publisher, is planning to test selling individual chapters of a popular book to gauge reader demand, according to a report in the Wall Street Journal.

 

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Auto Insurers Boost Premiums on Injury, Crash Costs

(Bloomberg) -- Allstate Corp. and Progressive Corp. are leading the push by U.S. auto insurers to raise premiums in at least 20 states as the $160 billion industry moves to end two years of price reductions.

Insurers say they need higher prices to counter climbing repair and medical costs. Allstate, ranked second by premiums, said collision bills rose 2.2 percent in the fourth quarter from a year earlier and payouts for injuries gained 9.3 percent. Safeco Corp., which gets almost half its total premiums from drivers, reported a $19 million loss on auto underwriting.

The rate adjustment may reverse the 20 percent drop in the market values of Allstate and Progressive during the past 12 months, said Bear Stearns Cos. analyst David Small. Earnings should improve this year because insurers have become better at predicting driving records and then setting prices, he said.

``There's a lag before rate increases show up on the income statement,'' said Small, who works in New York. ``But it's real, it's happening, and you'll see it in earnings by the end of the year.''

The largest car insurers include No. 1 State Farm Mutual Automobile Insurance Co., which isn't publicly traded, and Berkshire Hathaway Inc.'s fourth-ranked Geico Corp. Bear Stearns's Small rates Northbrook, Illinois-based Allstate ``outperform'' with a target of $69 a share, and has a ``peer perform'' rating on Mayfield Village, Ohio-based Progressive.

Allstate fell $1.10, or 2.3 percent, to $46.57 at 4 p.m. in New York Stock Exchange trading and Progressive fell 16 cents, or 0.9 percent, to $18.49.

Warren Buffett

``Auto insurance has been surprisingly good for quite awhile. That's turning now,'' said Warren Buffett, the billionaire chairman of Berkshire Hathaway, at an appearance in Toronto this week. ``Frequency of accidents just kept going down for three or four years, which was just amazing, and the severity was not particularly bad. Now both are picking up somewhat.''

Rising prices for new vehicles and expenses for labor and replacement parts contributed to a 45 percent increase in car repair costs during the past decade, according to information compiled by the Highway Loss Data Institute in Arlington, Virginia.

Collision costs rose 2.4 percent in the third quarter from a year earlier, according to data compiled by the Property Casualty Insurers Association of America in Des Plaines, Illinois. The cost of auto-body work was up 3.3 percent in 2007, the U.S. Department of Labor reported.

 

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Credit Suisse Topples UBS, Dodges `Subprime Bullet'

(Bloomberg) -- Credit Suisse Group is earning more than UBS AG for the first time in almost a decade after Chief Executive Officer Brady Dougan avoided the writedowns that forced his rival to report the biggest-ever quarterly loss by a bank.

Credit Suisse may report tomorrow that net income fell 69 percent in the fourth quarter to 1.43 billion Swiss francs ($1.29 billion), according to the median estimate of 11 analysts surveyed by Bloomberg. UBS, which marked down $14 billion on securities infected by U.S. subprime mortgages, gives details of its 12.5 billion-franc quarterly loss on Feb. 14.

Dougan, a former derivatives trader who became Credit Suisse's CEO in May after making investment banking the company's most profitable unit, scaled back debt holdings before the slump led to more than $145 billion in writedowns and loan losses at the world's biggest banks. By contrast, Marcel Rohner was named UBS's CEO in July after three quarters of declining earnings, the collapse of a hedge fund and the ouster of his predecessor.

``Credit Suisse is clearly the better positioned of the two,'' said Florian Esterer, who helps oversee $56 billion at Swisscanto Asset Management in Zurich, where both companies are based. ``There are still some tough times ahead for UBS.''

UBS, the world's biggest wealth manager, said Jan. 30 it had a net loss of 4.4 billion francs in 2007, the first time it earned less than Credit Suisse since being created in a merger in 1998. Credit Suisse, which posted losses in 2001 and 2002, had an 8.65 billion-franc profit last year, analysts estimate.

Wall Street Losses

Credit Suisse earned about 1 billion francs in the fourth quarter and 8.2 billion francs in 2007, Sonntag newspaper said Feb. 10, citing an unidentified ``reliable source.'' Credit Suisse spokesman Marc Dosch declined to comment on the report.

Like New York-based Merrill Lynch & Co., Citigroup Inc. and Morgan Stanley, which also reported record losses in Wall Street's worst ever quarter, UBS has turned to sovereign funds to shore up its finances. The Swiss bank will seek shareholders' approval on Feb. 27 to sell 13 billion francs in bonds that will convert to shares to investors in Singapore and the Middle East.

Credit Suisse fell 0.1 percent to 57 francs at 11:04 a.m. in Zurich trading, and UBS declined 1.7 percent to 40.3 francs. UBS has dropped 50 percent in the past year, making it the fourth-worst performer in the 60-member Bloomberg Europe Banks and Financial Services Index. Credit Suisse is down 36 percent.

UBS is rated ``sell'' by 11 of 41 analysts tracked by Bloomberg, a rating awarded by six of 37 analysts covering Credit Suisse.

`Dodged the Bullet'

``I think Credit Suisse will have dodged the subprime bullet,'' said Dieter Buchholz, who helps manage $107 billion at AIG Private Bank in Zurich, including Credit Suisse shares. Chairman Walter Kielholz has signaled the bank probably won't have large charges in the quarter.

Credit Suisse's results may be more similar to those of Frankfurt-based Deutsche Bank AG than UBS, Buchholz said. Germany's biggest bank said last week it avoided writedowns from the subprime market and reported a 44 million-euro ($64 million) markdown on leveraged loans.

Managers at Credit Suisse's SPS mortgage-servicing unit alerted the executive board more than a year ago to concerns about subprime assets. By the end of 2006, the company had originated about 40 percent fewer subprime mortgages than in 2005, according to Dougan.

``The hardest thing in all of these is not just seeing the issue but taking action,'' Dougan, 48, told business leaders in Zurich on Feb. 5. ``It's always very difficult to say no.''

 

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GM Proves Demise to No. 2 Premature on Topping Toyota Overseas

(Bloomberg) -- Investors doubting General Motors Corp.'s comeback after a third straight annual loss should count the 2,500 crates of partially built Chevrolets leaving South Korea every day for plants in Poland and China.

With about six of every 10 new GM vehicles now sold overseas as U.S. production shrinks, the Detroit-based company fended off Toyota Motor Corp. last year and preserved its 77- year reign as the world's biggest automaker. Rising output abroad and a cost-saving labor contract may push profit to $12.75 a share by 2010, said Burnham Securities Inc. analyst David Healy.

 

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U.S. Stock Futures Rise; Europe Little Changed, Asia Retreats

(Bloomberg) -- U.S. stock-index futures rose as higher metal prices lifted mining companies and technology shares advanced on speculation Yahoo! Inc. will seek a higher takeover bid from Microsoft Corp.

Stocks in Europe pared earlier declines and were little changed as GlaxoSmithKline Plc climbed following UBS AG's recommendation to buy the world's second-largest drugmaker. Asian shares fell, led by Kookmin Bank and Commonwealth Bank of Australia.

Barrick Gold Corp. and Newmont Mining Corp., the world's biggest gold producers, climbed as bullion advanced. Yahoo, the most-visited U.S. Web site, increased after a person familiar with the situation said the company's board will reject Microsoft's $31-a-share offer. Merrill Lynch & Co. rallied on a Citigroup Inc. analyst report that the third-largest securities firm may double annual earnings in coming years.

Standard & Poor's 500 Index futures expiring in March added 4.1, or 0.3 percent, to 1,334.4 at 8:34 a.m. in New York. Dow Jones Industrial Average futures increased 35 to 12,212. Nasdaq- 100 futures gained 12 to 1,788.5. Europe's Dow Jones Stoxx 600 Index rose 0.01 to 315.51 after falling as much as 1.1 percent. The MSCI Asia Pacific Index fell 1.59, or 1.1 percent, to 139.24.

``The market is slowly bottoming out,'' said Claudio Meiger, a fund manager at Basel, Switzerland-based Bank Cial Schweiz, where he helps oversee about $100 million. ``Long-term investors may start building positions now. The major technology stocks are rather cheap.''

Shares in the S&P 500 Information Technology Index trade at an average 21.9 times reported earnings, according to Bloomberg data. That's near a five-year low touched on Aug. 4, 2006.

Yahoo Bid

Yahoo advanced 17 cents to $29.37. The Internet company that has failed to crack Google Inc.'s dominance of Web search plans to reject a bid from Microsoft, said a person familiar with the situation who declined to be identified because the discussions aren't public.

Yahoo wants at least $40, the Wall Street Journal reported Feb. 9. Yahoo spokeswoman Diana Wong said the company doesn't comment on rumors or speculation. Microsoft spokesman Bill Cox declined to comment.

Barrick, Newmont

Barrick Gold added 48 cents to $50.58 in Germany. Newmont gained 8 cents to $51.37. Gold rose in London as interest-rate cuts feed through to higher commodity prices, increasing demand for precious metals as a hedge against inflation. Platinum advanced to a record, silver climbed to a 27-year high and palladium reached the highest since September 2001.

Merrill Lynch gained 66 cents to $52.85. Citigroup analysts said they expect John Thain will be a ``very hands-on'' chief executive officer. Thain took over in December for Stan O'Neal, who was ousted after delivering a $2.24 billion third-quarter loss. Merrill can double annual earnings to over $10 billion in the next ``few years,'' the analysts said.

Motorola Inc. added 18 cents to $11.44 in Germany after the Wall Street Journal said the biggest U.S. mobile-phone maker and Nortel Networks Corp. may combine their wireless infrastructure units in the latest response to sluggish growth in the telecom- equipment industry. Nortel spokesman Jay Barta declined to comment when contacted by Bloomberg News. An e-mailed message to Motorola representative Kelly Harder wasn't immediately returned. Nortel rose 10 cents to $11.17.

 

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