Stock Market Predictions

China's XCMG to market $1.5 billion HK share offer from Sept 5

Stock Market Predictions

The Shenzhen-listed company, which makes bulldozers, excavators and heavy trucks, secured approval from the listing committee at Hong Kong's stock exchange on Thursday, added IFR, a Thomson Global Markets publication.

The company joins rival Sany Heavy Industry Co Ltd (600031.SS) and about 12 other companies that have announced plans to raise about $11.7 billion in September from share sales in Hong Kong, the world's biggest IPO market for two years running. XCMG plans to offer 593 million shares.

China International Capital Corp (CICC) and Morgan Stanley (MS.N) were hired as joint global coordinators for the deal, with Credit Suisse Group AG (CSGN.VX), HSBC Holdings Plc (0005.HK)(HSBA.L), Macquarie Group Ltd (MQG.AX) and BNP Paribas SA (BNPP.PA) helping to manage the offering.

(Reporting by Jing Song; Writing by Elzio Barreto; Editing by Chris Lewis)

Krispy Kreme jumps as strong doughnut sales drive profit

Stock Market Predictions

The company, known for its signature glazed doughnuts, has been tweaking its menu and opening new stores to drive sales. It is currently adding more coffee-based beverages and other savories to its menu.

The company will soon launch different types of revamped drip coffee later this month. "12 months from now, updates to coffee-based specialty drinks will roll out," Janney analyst Mark Kalinowski said in a note to clients.

"We believe that it would make a lot of sense for this to include something akin to Starbucks' (SBUX.O) Frappuccino lineup of blended beverages," analyst Kalinowski said.

The company, which competes with Dunkin' Donuts (DNKN.O), also posted better-than-expected quarterly sales.

Krispy Kreme shops can be found in over 660 locations in the U.S. and 20 countries around the world.

The company's shares touched a high of $8.86 on Friday morning on the New York Stock Exchange.

(Reporting by Meenakshi Iyer in Bangalore; Editing by Viraj Nair)

China's Shaanxi Coal Industry plans $2.7 billion IPO

Stock Market Predictions

The China Securities Regulatory Commission (CSRC) said late on Thursday that it would review Shaanxi Coal's IPO application on August 29.

Shaanxi Coal would issue up to 2 billion shares in the offering, according to a draft prospectus posted on the CSRC website.

A successful IPO would make the company the country's third-largest publicly traded coal miner by output after China Shenhua Energy Co Ltd (1088.HK)(601088.SS) and China Coal Energy Co Ltd (1898.HK)(601898.SS), Shaanxi Coal said, adding that the proceeds would fund mining activity and replenish working capital.

It would also be the biggest IPO in the mainland market this year, surpassing Sinohydro Group Ltd's planned $2.5 billion offering.

China's IPO market slowed by a fifth in the first half, lacking the big deals of the year before, with fundraising dominated by smaller companies. [ID:nL3E7JG0X6]

In the first six months, only about a tenth of the companies seeking listings chose to do so on the Shanghai Stock Exchange, with the rest going to the smaller Shenzhen bourse, which houses the Nasdaq-style ChiNext market, Thomson Global Markets data showed.

State-owned Shaanxi Coal and Chemical Industry Group Co Ltd SHAANB.UL owns 71 percent of Shaanxi Coal.

China is the world's biggest coal-producing country, with output at 3 billion tonnes in 2009, accounting for about 46 percent of total global production that year.

Shaanxi Coal is headquartered in Xi'an, in the northern Chinese province of Shaanxi, which had known coal reserves of about 170 billion tonnes, the company said.

CICC, BOC International (China) Ltd and Citic Securities are joint underwriters of the IPO.

($1 = 6.390 yuan)

(Reporting by Soo Ai Peng; Editing by Chris Lewis)

Verizon buys CloudSwitch to boost Terremark

Stock Market Predictions

The deal is part of a continued push by Verizon in to enterprise services. It plans to merge Burlington, Massachusetts-based CloudSwitch with Terremark, an information technology services provider it bought in April for $1.4 billion.

CloudSwitch brings Verizon software that helps enterprises to securely move applications between data centers. The companies did not disclose the terms of the deal.

Verizon shares were down 2 percent at $35.71 in late trading on New York Stock Exchange.

The companies did not disclose the terms of the deal.

(Reporting by Sinead Carew; editing by Matthew Lewis)

Elpida shares jump on bargain hunting

Stock Market Predictions

The shares, which rose 17.6 percent to 535 yen, had shed more than 40 percent in the month to Thursday's close, battered by Elpida's move to raise $990 million to finance its expansion in cutting-edge chips for smartphones and tablet PCs.

The stock, which hit a 2- year low this week, had seen its 14-day relative strength index drop to 21 as of Thursday, below the 30 line where stocks are deemed oversold.

A trader at a foreign brokerage said that a number of factors were lifting the shares, including Wednesday's news about Abu Dhabi state-owned fund Aabar joining South Korea's STX Corp (011810.KS) to bid for Hynix Semiconductor (000660.KS) and a rise in chip spot prices.

"Heavily shorted Elpida is being bought back on hopes that there will be some changes in the DRAM industry," he said.

The percentage of shares outstanding on loan at Elpida stood at a still-high 7.8 percent as of August 24 at 459 yen, down from a peak of 19.5 percent at the end of July.

Elpida has repeatedly disappointed long-term investors by raising capital and diluting shares to stay competitive against bigger South Korean rivals Samsung Electronics (005930.KS) and Hynix, which have more scale.

To stay relevant, it aims to take the lead in advanced 25-nanometre chips, which pack more power onto each sliver of silicon than existing DRAM chips, hoping to gain an edge in mobile memory used in tablet PCs and smartphones.

Friday's jump was the biggest single-day jump in two years for the chipmaker, which has lost 90 percent since its shares peaked at the end of 2006. Trading volume hit a six-week high.

Weak chip prices have weighed on chipmakers, with even market giant Samsung warning of fragile consumer demand.

Spot prices for DDR3 2Gigabit type DRAM chips were up 3.6 percent to $1.01 in Friday afternoon trade according to DRAMexchange, but analysts say prices are well below cost for many chip makers.

Elpida, like No.2 NAND flash chipmaker Toshiba Corp (6502.T), hopes Apple Inc's (AAPL.O) patent war with supplier Samsung will mean more sales to the maker of iPhones and iPads, sources have said.

(Reporting by Tokyo Newsroom; Editing by Nathan Layne and Chris Gallagher)

AOL shares up as AOL confirms bankers on retainer

Stock Market Predictions

According to Adweek, teams from investment banking firm Allen & Co and law firm Wachtell, Lipton, Rosen & Katz met AOL executives on Wednesday. Wachtell Lipton lawyer Martin Lipton and Allen & Co banker Nancy Peretsman attended the meeting, Adweek said.

AOL confirmed both firms were on retainer, but did not say for how long they had been hired. Global Markets reported in November that Allen & Co had been hired by AOL along with Bank of America to explore strategic options.

At the time, sources told Global Markets those options included a potential merger with Yahoo Inc.

Lipton and Peretsman could not immediately be reached for comment.

AOL CEO Tim Armstrong told Adweek in an email: "There is no deal on the table, no proposed deal, and both parties are on retainer with us and we work with them. Our strategy hasn't changed and we are moving faster than ever on it."

Sources told Global Markets in December that AOL has explored a breakup and other options since its December 2009 spinoff from Time Warner Co Inc.

AOL shares closed up 8.8 percent at $13.94 on the New York Stock Exchange.

(Reporting by Michael Erman, Paritosh Bansal, Peter Lauria and Jennifer Saba; editing by Matthew Lewis and Andre Grenon)

Home Depot, Walmart, grocers get boost from Irene

Stock Market Predictions

Chains such as Home Depot Inc (HD.N) and Wal-Mart Stores Inc (WMT.N) were doing brisk business on Friday, selling water, flashlights, batteries and other goods in states standing in Irene's potential track from the Carolinas to Massachusetts.

"Most probably, the biggest demand right now is for generators, obviously," said Suzanne Roche, manager of a Sears (SHLD.O) store in Wilmington, North Carolina. "We have got customers calling nonstop."

Irene is due to make its first U.S. landfall in North Carolina on Saturday. The storm, which battered Atlantic and Caribbean islands including the Bahamas and the Dominican Republic, is then expected to head to the densely populated Northeast.

Those who were not trying to squeeze in one last summer stay on the New Jersey shore or Long Island beaches may have been planning to go to shopping malls to buy clothes, shoes and other items for children who will soon head back to school. Now those plans will be on hold.

"Nobody is going to go to a mall to buy a pair of jeans," said Richard Hastings, consumer strategist at Global Hunter Securities.

The back-to-school shopping season is the second-largest spending time for U.S. shoppers, behind the winter holidays.

The storm may dent the upcoming index of August sales at stores open at least a year by 1.5 percentage points, Hastings said.

About two dozen retailers, including department stores and apparel chains, are due to report monthly same-store sales on September 1. Analysts were expecting a 4.8 percent rise for August, Thomson Global Markets said on Friday.

The storm could hurt retailers like Saks Inc (SKS.N) and Tiffany & Co (TIF.N) if airports stay closed for too long or people cancel trips, said Morningstar analyst Paul Swinand. The hurricane hitting on a weekend worsens its impact, he added.

That pain may be compounded following New York Governor Andrew Cuomo's announcement that New York City's subways, buses and commuter lines, which serve 8 million riders a day, will shut down around noon on Saturday.

Chains such as Target Corp (TGT.N) planned to keep their stores open as long as it is safe for shoppers and workers, and to comply with any evacuation orders.

Walgreen Co (WAG.N) said it would keep many stores open 24 hours a day to meet demand for supplies. It was still deciding which stores may close because employees might not be able to get to work.

Retailers kept shoppers informed online.

Home Depot, Rite Aid Corp (RAD.N) and other chains posted details on their websites.

Whole Foods Market Inc (WFM.O), known for its array of organic and natural products, was communicating with customers through local stores' Facebook pages and other social media.

After rumors spread in West Hartford, Connecticut, that all local stores were out of water, employees of a Whole Foods there took pictures of all the water they had in the store and posted them on the Facebook page, a spokeswoman said.

POTENTIAL MARKDOWNS

If retailers have excess merchandise because they lose out on a weekend of the back-to-school shopping season, it "could lead to markdowns in September and October," said Keith Jelinek, a director of AlixPartners' global retail practice.

Hastings expects Home Depot to do well, as it has 35 percent more stores than Lowe's Cos Inc (LOW.N) in the affected region. He also expects Newell Rubbermaid Inc (NWL.N) to benefit from demand for storage containers.

Newell shares rose about 1 percent on Friday. Among battery makers, Energizer Holdings Inc (ENR.N) was up almost 2 percent, and Spectrum Brand Holdings (SPB.N) gained nearly 3 percent.

Drugstores and grocery stores should also see a sales lift.

"It helps the supermarkets most because people really stock up," said BB&T Capital Markets analyst Andrew Wolf, noting Supervalu Inc's (SVU.N) strength in Boston and Philadelphia, and Safeway Inc (SWY.N) and Ahold's (AHLN.AS) big presence in Washington.

Great Atlantic & Pacific Tea Co Inc (GAPTQ.PK) is stocking extra water, ice, bleach and other goods at its A&P, Waldbaum's and Pathmark chains.

WATER GOING QUICKLY

In particular, Irene could affect companies with a strong presence on the East Coast in terms of higher sales before the storm and potential closings once it hits.

BJ's Wholesale Club (BJ.N) said 96 of its 190 stores are in the storm's expected track. They are receiving extra deliveries of items such as batteries, flashlights, generators and groceries, and the Massachusetts-based company's buyers are working to get water delivered to those locations.

Wal-Mart, which has an emergency operations center in its Bentonville, Arkansas headquarters, is tracking how the storm may affect roughly 600 of its stores and distribution centers.

It has also offered its help to governments in states such as New York, where hurricanes are less common.

"This is obviously not something that they probably plan for on a regular basis," said Mark Cooper, Wal-Mart's new senior director of emergency management, "so we just want to make sure that they know we are available to assist."

(Reporting by Dhanya Skariachan, Phil Wahba and Ernest Scheyder in New York; Jessica Wohl and Brad Dorfman in Chicago. Writing by Jessica Wohl. Editing by Robert MacMillan.)

Muddy Waters' Block says OSC move a "major positive"

Stock Market Predictions

The OSC ordered all trading in Sino-Forest securities to cease and ordered several executives to resign, though it rescinded that order.

"It seems the OSC has some information investors do not that it believes is material to investment decisions," Block said. "I'm impressed with the progress the OSC has made so far."

Muddy Waters on June 2 issued a sharply negative report on Sino-Forest, accusing it of exaggerating the size of its forestry assets and sparking a massive decline in the shares.

"We're encouraged that it looks like the wheels of justice are turning," Block said, adding that while his firm faced criticism for its report, "at the end of the day, people who lost money in this are hurting a lot more from (Sino-Forest) than we are."

Shares of Sino-Forest slid 5.7 percent on Friday before being halted. They have plunged almost 74 percent since the close prior to the Muddy Waters report on June 2.

(Reporting by Ryan Vlastelica)

OmniVision sinks on fears of losing business at Apple

Stock Market Predictions

At least three brokerages cut their price target on the company's stock following the glum outlook

"The below than seasonal guidance reflects market share loss. It's clear now that Apple is dual-sourcing its image sensors with Sony," Needham and Co analyst Rajvindra Gill wrote in a note to clients.

OmniVision supplies image sensors used in smartphone cameras. Its sensors are used in Apple's iPhone 4 and Motorola's (MMI.N) Droid series of handsets.

The company expects second-quarter adjusted earnings of 52-64 cents per share on revenue of $255-275 million, well below analysts' expectations of 81 cents per share in earnings on revenue of $305.7 million, according to Thomson Global Markets I/B/E/S.

Needham's Gill, who cut his target price on the company's stock by $15 to $30, said OmniVision has most likely lost half of its business at Apple but would still supply sensors for the iPhone 5 set to be unveiled next month.

The company's shares, which closed at $24.82 on Thursday, have lost almost a third of their value since rumors of Sony vying for an Apple contract first surfaced in April.They were down a further 27 percent at $18.25 before the bell on Friday.

(Reporting by Himank Sharma in Bangalore; Editing by Viraj Nair)

Tiffany raises forecast as sales rise worldwide

Stock Market Predictions

Tiffany's sales gains were strong across the board during the quarter ended July 31, a period that includes the Mother's Day and bridal seasons, which are second in sales only to the end-of-year holidays for jewelers.

Chief Executive Stephen Kowalski said that sales so far in the current quarter are outpacing Tiffany's own forecasts despite continuing economic uncertainty.

The company said it expects sales to rise by a high teen percentage for the year ending in late January, up from a previous forecast of a mid-teen percentage increase.

At its flagship store on Manhattan's Fifth Avenue, where it gets about a tenth of its business, sales rose 41 percent, helped by international tourists.

In Asia, outside of Japan, revenue rose 45 percent excluding the effect of a weak dollar, thanks to the appetite of China's emerging middle class for Western luxury brands.

Sales also rose by double digits in Europe, where wealthy Russian and Chinese tourists account for as much as a quarter of total luxury spending by some estimates. Sales also rebounded in Japan, which is still recovering from the debilitating earthquake and tsunami in March.

Overall, Tiffany sales, excluding the effect of currency translations, rose 24 percent to $872.7 million in the second quarter, while sales at stores open at least one year rose 22 percent.

Tiffany said its gross margins rose 1.2 percentage points to 59 percent of sales, with revenue increasing enough for the retailer to absorb higher costs for gold, diamonds and silver.

Tiffany's price increases, which faced little consumer resistance, have "a recipe for success," Wall Street Strategies analyst Brian Sozzi said in a note.

Signet Jewelers Ltd (SIG.N) (SIG.L), operator of the Kay Jewelers and the more upscale Jared chains, on Thursday reported similarly strong sales and profit gains, saying it was able to raise prices. Signet's same-store sales rose 12.2 percent during its second quarter.

The price increases and strong sales helped Tiffany handily beat Wall Street's profit forecasts. It reported net income of $90 million, or 69 cents per share, for the quarter, up from $67.7 million, or 53 cents per share, a year earlier.

Excluding one-time items, such as the cost of relocating its New York staff to new offices, Tiffany earned 86 cents a share, far above the 70 cents Wall Street expected, according to Thomson Global Markets I/B/E/S.

Tiffany raised its full-year profit outlook range by 20 cents, to between $3.65 and $3.75 per share, above the $3.56 analysts were expecting.

Tiffany shares rose $3.39 to $66.50 in pre-market trading. Through Thursday's close, Tiffany shares had fallen 25.3 percent since hitting an all-time high on July 7, on concerns that market volatility might prompt luxury spenders to pull back.

(Editing by Derek Caney, John Wallace and Steve Orlofsky)