Financials morning ... one day before Christmas
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Munich Re buys AIG unit for $742m (FT)
The stricken US insurance group AIG continued to shed assets on Monday by selling the Hartford Steam Boiler Company to Munich Re, the German reinsurer, for $742m. The deal continues Munich Re's acquisition of niche businesses to help to counter cyclicality in general insurance and reinsurance. It also shifts the focus of its US businesses away from casualty reinsurance towards property-based reinsurance, which is more in line with the group's wider global portfolio. For AIG, the deal highlights the pressure to sell businesses, even though prospective buyers are inclined to be cautious at a time of economic uncertainty. AIG is disposing of a string of assets to help to repay its $150bn US government rescue, arranged after the insurer came close to collapse in September. In an interview with CNBC television on Monday Edward Liddy, AIG's chief executive, said that he was “very encouraged” by the level of interest in the company's assets and that he hopes to repay the US government in 2009. AIG bought HSB, a provider of plant and equipment breakdown insurance and consulting services, for $1.2bn in shares in 2000. Munich Re will pay in cash for HSB, which is the North American market leader in premiums written for equipment breakdown. The company made net profits of $158m last year, mainly in the US.
Swiss Re agrees $1.5bn credit line (Telegraph)
Swiss Re, the world's second-largest reinsurer, has agreed a $1.5bn (£1bn) long-term credit facility to allow it to take advantage of "significant opportunities" emerging in the reinsurance market. The insurance giant said it had agreed the credit facility with investment bank JP Morgan to meet US regulatory requirements for its life business. It added that the financing, which matures in 2028, will replace existing arrangements the company has in place for collateral for the US business. Previously it provided the required collateral for its Swiss Re Life and Health America businesses by placing various assets in a trust. Those assets will now effectively be freed up to support the rest of Swiss Re. The company declined to comment on speculation that the credit line will allow it to become more involved in merger and acquisition deals, but said the "unprecedented turmoil in the capital markets" had created opportunities for "well capitalised insurance and reinsurance companies". Swiss Re added it was "in a strong position to respond to increasing demands from our clients for reinsurance solutions". Jacques Aigrain, Swiss Re's chief executive, said "notwithstanding the difficult capital market environment", the arrangement with JP Morgan "will further enhance our position to be able to benefit from opportunities that arise from the current market environment". One insurance analyst said it was possible that Swiss Re is raising money for acquisitions. He noted the company had been active in a number of major deals, and had been in discussions to provide reinsurance support to private equity firm CVC, which is mulling a bid for the insurance assets of Royal Bank of Scotland. However, the analyst described the decision to renegotiate the credit facility now – just before the year end – as curious. He said: "I am always cynical about companies raising money at this time of the year." Swiss Re described the new financing as "attractive" but disclosed few details of the arrangement. Another analyst said the deal might provide policyholders with a greater sense of security. Tim Dawson, an analyst with Helvea in Geneva, told Bloomberg: "This means that in the end, the US policy-holder knows that if the worst comes to the worst, JP Morgan will advance the money to make good the losses from a financial shortfall."
Generali, Manulife, Axa May Bid for AIG Unit in the Philippines (Bloomberg)
American International Group Inc. has started talks on the sale of its Philippine unit, part of a plan to divest assets throughout Asia as it tries to repay a $60 billion U.S. government loan. Assicurazioni Generali SpA, Europe's third-biggest insurer, and Canada's Manulife Financial Corp. are among bidders for AIG's Philippine American Life and General Insurance Co., three people familiar with the matter said, asking not to be identified as talks are ongoing. The unit, the nation's largest insurer, may fetch about $1 billion, they said. “Opportunities of this kind are rare and save years of work with little time,” said Karim Bertoni, who helps run $26 billion at Banque Syz & Co. in Geneva. “AIG has a tradition in Asia, where historically it has been very active.” New York-based AIG, once the world's biggest insurer, is selling parts of itself after losses tied to credit default swaps forced the U.S. government to commit about $150 billion in rescue funds. The company said yesterday it will sell its Hartford Steam Boiler unit in the U.S. for $742 million to Germany's Munich Re. Trieste, Italy-based Generali has teamed up with Banco de Oro Unibank Inc., the biggest lender in the Philippines by assets, and Malaysia's Kuok Group to bid for AIG's Philippine assets, the people said. Axa SA, France's largest insurer, has also expressed interest in the unit, one of the people said. Officials at AIG, Generali, Mandaluyong City-based Banco De Oro Unibank, Toronto-based Manulife and Paris-based Axa declined to comment.
AIG Plans to Repay U.S. Loan in 2009, Chief Liddy Tells CNBC (Bloomberg)
American International Group Inc., the insurer that received a U.S. bailout, plans to repay the government next year, and the company's $450 million employee- retention program is needed to carry out the effort, Chief Executive Officer Edward Liddy told CNBC. “We would like to do that in 2009,” Liddy told the financial network in an on-air interview today. AIG, which received a U.S. rescue of about $150 billion to prevent losses at companies that did business with the insurer, is based in New York.
AIG May Sell Stake and List Unit in Hong Kong, Ming Pao Says (Bloomberg)
American International Group Inc. may list its American International Assurance unit in Hong Kong after selling a minority stake to strategic investors, Ming Pao Daily News reported. The company's preliminary plan calls for merging AIA Hong Kong and AIA Bermuda and selling a stake of as much as 49 percent to strategic investors, the Hong Kong-based, Chinese- language newspaper reported, citing an unidentified person. China Life Insurance Co. is keen to buy shares in AIA, which employs more than 8,000 insurance professionals in Hong Kong alone, to expand its earnings base outside its home nation to more than half of Asia, Ming Pao added. AIG hopes to retain control of the profitable business while generating cash from the strategic stake sale and Hong Kong initial public offering, the newspaper said.
Malaysian Islamic insurer eyes expansion-report (Reuters)
Malaysian Islamic insurer Prudential BSN Takaful Bhd will spend about 7 million ringgit ($2.01 million) to set up seven branches next year, official Bernama news agency reported. Two branches would be located in the area around capital Kuala Lumpur and southern Johor state, the company's chief executive Mohamad Salihuddin Ahmad said. "The other five branches will also be located in state capitals," Salihuddin was quoted as saying. "It will cost us about a million ringgit to establish each new branch." The firm is a joint venture between Malaysian lender Bank Simpanan Nasional Bhd and Prudential Plc . Global premiums in Islamic insurance, or takaful, total about $2-3 billion and are expected to reach more than $7 billion by 2015, according to industry figures. Under Islamic insurance, members contribute to a pool of funds which is used to indemnify participants who suffer a loss. The funds are invested according to the sharia which avoids interest-bearing loans and gambling, pork and alcohol-related activities. Profits made are distributed among members.
JPMorgan acquires two UBS units (FT)
JPMorgan said on Monday that it was acquiring two units of UBS, as the Swiss bank continues to trim its investment banking arm. UBS has agreed to sell its Canadian commodities energy business and also its global agricultural business in a deal expected to close in the first quarter of 2009. The terms of the deal were not disclosed. The acquisition appealed to JPMorgan because it will allow the bank to grow its base of clients in Canada and to develop a greater presence in the Canada's gas, oil, power and financial markets.
UniCredit aims for property sale in 2008 -sources (Reuters)
Italian bank UniCredit aims to complete a 1 billion euro ($1.4 billion) sale of property assets by the end of the year after dropping plans to sell a real estate fund last week, sources close to the matter said on Monday. "They are working to close by 2008," one of the sources said, confirming a report in Il Messaggero newspaper. "The value of the real estate, about 70 properties, is about 1 billion euros for a gross capital gain of 500 million euros," a second source said. The sources said the real estate would be sold to an Italian fund managed by Fimit SGR. On Thursday UniCredit said its net profit might be 23 percent lower than forecast if it did not manage to sell some property assets.
BNP Paribas Declines With Fortis Purchase at Risk (Bloomberg)
BNP Paribas SA, France's largest bank, fell to a six-year low in Paris trading on concern the Belgian government's offer to resign may stymie the company's 14.5 billion- euro ($20.3 billion) purchase of Fortis. BNP Paribas declined 71 cents, or 2.3 percent, to 29.66 euros, the lowest since October 2002. The shares have fallen 60 percent this year, valuing the Paris-based bank at 27 billion euros.
Deutsche Bank ‘Sensible' to Skip Call on Bonds, Moody's Says (Bloomberg)
Deutsche Bank AG's decision to pass up an opportunity to redeem 1 billion euros ($1.4 billion) of bonds was a “sensible economic action,” according to Moody's Investors Service. The bank drew a hostile reaction from investors last week when it declined to exercise an option to buy back 3.875 percent notes maturing in 2014 on Jan. 16. The Frankfurt-based lender chose instead to pay a step-up coupon of 88 basis points more than the euro interbank offered rate, or Euribor, for a total of about 3.93 percent. The decision took bondholders by surprise because banks typically repay callable notes at the first opportunity and the securities are valued on that basis. The Association of British Insurers last week described it as a setback for financial market stability and said it would increase bank funding costs. Deutsche Bank's move “is in line with ongoing efforts to preserve capital,” Moody's analyst Jean-Francois Tremblay said in a report today. “As long as the action does not result in further diminution of market confidence in a bank, which could potentially outweigh any savings on funding costs, the economics of the decision are beneficial.”
Bank of Ireland, Allied Irish Advance on Rescue Plan (Bloomberg)
Bank of Ireland Plc and Allied Irish Banks Plc rose in Dublin trading after the government said it will inject 2 billion euros ($2.8 billion) into each of them to protect the Irish financial-services industry from collapse. Bank of Ireland climbed 32 percent, the most in seven weeks, while Allied Irish rose 1.2 percent after the announcement late yesterday. Anglo Irish Bank Corp. fell 14 percent after the government said it would take control of the company by pumping in 1.5 billion euros. Ireland, the first country in Europe to guarantee all bank deposits, is being forced to use public money after initially urging lenders to seek support from private investors. Since the guarantees on Sept. 30, the ISEF Financial Index has plunged 70 percent as banks' capital was eroded by bad loans to homeowners and property developers in Ireland and the U.K.
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Pharma Morning
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AstraZeneca, Biocompatibles to Develop Diabetes Drug
AstraZeneca Plc will pay U.K. drugmaker Biocompatibles International Plc as much as 8.8 million euros ($12.4 million) to develop a treatment for diabetes and obesity. Under the agreement, London-based AstraZeneca may license any patents for those disease areas during any phase of the drug's development for 25 million euros, the companies said today in a statement. AstraZeneca will also pay Biocompatibles as much as 37.5 million euros for meeting certain development goals and royalties “in the single to mid-teens digit range,” the companies said. The treatment is from a new class of diabetes drugs designed to imitate a naturally occurring hormone called GLP-1, which stimulates the pancreas to boost insulin production. Research indicates that GLP-1 analogues also can curb appetite and reduce obesity. The World Health Organization estimates that more than 180 million people worldwide have diabetes and links the disease to about 3 million deaths annually. Biocompatibles gained 11.5 pence, or 11 percent, to 117.5 pence in London trading, boosting its market value to 45.9 million pounds ($67.8 million). It was the stock's biggest jump in two months. AstraZeneca fell 36 pence, or 1.3 percent, to 2,700 pence.
Glaxo Overhauls Policy on Giving to U.S. Political Campaigns
GlaxoSmithKline Plc, Europe's largest drugmaker, will stop contributing to U.S. political campaigns after this year. The U.K. drugmaker gave $761,670 to U.S. federal candidates through political action committees during the most recent two- year election cycle, the second-biggest spender among pharmaceutical companies behind Pfizer Inc., according to the Center for Responsive Politics, a Washington-based group that tracks political giving. “We continue to believe that it is important for GSK to be engaged in policy debates and the political process,” Chief Executive Officer Andrew Witty said in an e-mailed statement today. “However, we need to ensure that there is no implication whatsoever that corporate political contributions provide us with any special privileges.” The decision also clears up “disparities” in company policy between the U.S. and Europe, where Glaxo hasn't given political contributions since 2001, spokeswoman Alice Hunt said in an interview. The London-based drugmaker will continue to run its PAC funded by Glaxo employees, the company said today in a statement.
King Pharmaceuticals extends Alpharma buyout offer
King Pharmaceuticals Inc. extended its $37-per-share buyout offer for Alpharma Inc. on Monday and said about 92 percent of the company's outstanding shares have been tendered. The offer is now extended to 10.a.m. Dec. 29. It was set to expire Dec. 19. Bridgewater, N.J.-Alpharma agreed to Bristol, Tenn.-based King's $1.6 billion cash takeover offer in November, ending the drugmakers' months-long battle. The offer represented a 54 percent premium to Alpharma shareholders. Alpharma previously rejected a $1.4 billion offer from King, which then raised its bid and said it would take the offer directly to shareholders. Both boards of directors have since unanimously approved the deal. As of Dec. 19, just over 38.6 million shares of Alpharma's stock had been tendered, representing 92.2 percent of shares outstanding.
Epix's imaging agent gets FDA nod
Epix Pharmaceuticals Inc more than tripled in market value, after the company said its imaging agent for magnetic resonance angiography was approved by U.S. health regulators. The company said intravascular contrast agent Vasovist, which is marketed in 34 countries outside the United States, was approved for use in detecting narrow or blocked blood vessels carrying oxygenated blood from the heart. "Our strategy remains to monetize this asset and we believe these characteristics and market dynamics make Vasovist an appealing opportunity for a company interested in building or augmenting its competitive position in the imaging market," Epix's Interim Chief Executive Elkan Gamzu said. The U.S. Food and Drug Administration has been concerned about side effects with contrast imaging agents and earlier called for warnings after hundreds of reports of complications, including deaths. In June, it sought advice from an advisory panel, which called on companies to collect additional data for those already on the market.
Glenmark may beat rivals in novel chemical entity sale
Firm plans to start selling anti-diarrhoea drug in H12010. Glenmark Pharmaceuticals, India's 11th biggest drug maker by sales, may beat bigger rivals, including Ranbaxy, Dr Reddy's and Nicholas Piramal, in selling an original drug, or novel chemical entity (NCE), by 2010. Glenmark plans to start selling its anti-diarrhoea drug, Crofelemer, by the first-half of 2010 across the globe, except in North America, Europe, Japan and China, the company said. The confidence to sell the drug ahead of its rivals comes as the Crofelemer's original developer, Napo Pharmaceutical Inc, recently entered into a tie-up with a US-based drug maker, Salyx, for selling the drug in the US market, paving the way for Glenmark to sell it in the rest of the world. If successful, Glenmark will become the first Indian company to sell an NCE, which came through global standards of clinical drug development. Glenmark's Crofelemer has the potential to earn revenue of at least $80 million from sales to patients afflicted with HIV-related diarrhea. India is yet to discover and commercialise a new pharmaceutical drug, which involves a discovery process of 10-15 years and involves over a billion dollar of investment. At least half a dozen molecules under development - such as Dr Reddy's Laboratories' Balaglitazone, Glenmark's three molecules - Oglemilast (GRC 3886), Melogliptin (GRC 8200) and GRC 6211 for osteoarthritis and neuropathic pain, Ranbaxy's malaria drug Arterolane and Nicholas Piramal's oncology drug P276 and an oral herbal drug for inflammation- are still under development. Experts estimate that these drugs may reach the markets between 2010 and 2013.
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Healthcare / Pharma News Flash
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Meldex shares halted, clarifying cash position (Reuters)
Healthcare company Meldex International Plc asked for trading in its shares to be suspended on Thursday as it seeks to clarify its trading and working capital position. The company, which warned on Dec. 8 that its results for 2008 and 2009 would be below market estimates, said it was pursuing several strategic opportunities and would update shareholders once it had greater clarity. "The company is seeking to clarify its trading and working capital position," Meldex said in a statement. "The company is considering several strategic opportunities." Shares in the company, which have lost over 90 percent of their value since late last year, were up 2.6 percent at 7.08 pence when trading was suspended at 1500 GMT.
EU backs Sanofi "micro" flu shot, Baxter pandemic (Reuters)
European regulators on Thursday endorsed the first of a new kind of "micro" vaccine against seasonal flu from Sanofi-Aventis and a pandemic flu shot from Baxter International. Both products were recommended for approval by experts at the European Medicines Agency in London, whose decisions are normally endorsed by the European Commission within a couple of months. Sanofi's Intanza or IDflu vaccine is the first intradermal microinjection flu shot and was developed in collaboration Becton Dickinson a specialist in injection technology. Intradermal vaccination involves administering antigen into the dermal layer of the skin, which has a high concentration of specialised immune cells.
IBA says FDA OKs precise treatment delivery system (Reuters)
Belgian cancer diagnosis and therapy firm Ion Beam Applications said on Thursday the U.S. Food and Drug Administration approved its Pencil Beam Scanning treatment, which allows for precise treatment delivery. IBA is the first company with a cyclotron-based proton therapy system to receive approval from the FDA for Pencil Beam Scanning, the company said. Compared to conventional techniques used to treat cancer with protons, the method provides improved three-dimensional aim to the target, IBA said. This can better spare organs at risk and help prevent healthy tissue from being harmed by the treatment, it said.
EU backs Lilly, Daiichi blood clot preventer (Reuters)
Eli Lilly & Co and Daiichi-Sankyo's new blood clot preventer prasugrel won a major endorsement from international regulators on Thursday when the European Medicines Agency recommended its approval. A panel of experts at the London-based watchdog said the drug was suitable for use in preventing clots in patients who are to undergo percutaneous coronary intervention, or PCI, a procedure to widen narrowed arteries. Recommendations for marketing approval by the agency's Committee for Medicinal Products for Human Use (CHMP) are normally endorsed by the European Commission within a couple of months.
Quest Diagnostics Declares Quarterly Cash Dividend (Bloomberg)
Quest Diagnostics Incorporated the world's leading provider of diagnostic testing, information and services, today announced that its Board of Directors declared a quarterly cash dividend on Quest Diagnostics common stock of $0.10 per share, payable on January 26, 2009, to shareholders of record on January 9, 2009.
Pfizer's Fablyn Wins EU Backing for Osteoporosis (Bloomberg)
Pfizer Inc.'s bone drug Fablyn should be used as a treatment for osteoporosis in postmenopausal women at increased risk of fracture, a panel of the European Medicines Agency said. The drug, which analysts expect to have $500 million in peak annual sales, has yet to be approved by U.S. regulators, who rejected it under a different name three years ago. In September, a U.S. advisory panel recommended it be approved because the drug's benefits outweighed potential risks. About 10 million Americans, mostly older women, have osteoporosis, and demand for new treatments is increasing as the population ages. Market leader Fosamax, a tablet made by Merck & Co., had $3.05 billion in sales last year before lower-cost generic copies entered the market in February. Pfizer, based in New York, fell 13 cents to $17.12 at 4 p.m. in New York Stock Exchange composite trading.
Pfizer, Celldex Change Trial of Brain Cancer Drug (Bloomberg)
Pfizer Inc. and Celldex Therapeutics Inc. said they will change a clinical trial comparing their experimental brain cancer drug with a standard treatment to offer the new medicine to all patients in the study. The companies' decision followed a recommendation by the study's independent monitoring committee, which found that most of the patients receiving just the standard treatment, temozolomide, withdrew from the trial, Pfizer and Celldex said today in a PR Newswire statement. The study compared the new drug, CDX-110, in combination with temozolomide to the older treatment alone. CDX-110, an experimental vaccine designed to spur the immune system to attack tumor cells, is being tested against patients who are newly diagnosed with glioblastoma, an aggressive form of brain cancer. All patients in the amended trial will get CDX-110 in combination with temozolomide, according to the statement. Pfizer, based in New York, licensed CDX-110 from Needham, Massachusetts-based Celldex in an agreement last April.
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News Flash - Financials
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BRE Gets Poland's Approval to Sell Pension Fund Stake to Aegon
JPMorgan Chase & Co. lowered its price estimates for Turkish banks, citing forecasts for the country's economic growth and deterioration of asset quality in the banks. “Further downside risk exist should economic growth and hence asset quality deteriorate beyond our expectations,” wrote analysts including Paul Formanko in a note dated today. Turkey's economy grew 0.5 percent in the third quarter, the slowest annual pace in six years. JPMorgan downgraded Asya Katilim Bankasi AS, an Islamic lender, to “neutral” from “overweight” and reduced its price estimates for the lender by 66 percent to 1.15 liras. JPMorgan also cut its price estimate for Akbank TAS to 4 liras from 7.10 liras. Turkiye Is Bankasi AS, Turkey's biggest non-state bank, price estimate was lowered to 3.40 liras from 5.50 liras and price estimate for Turkiye Garanti Bankasi AS cut by 38 percent to 2.90 liras by JPMorgan.
BRE Bank SA, a Polish unit of Commerzbank AG, received approval from the country's financial market regulator to sell its stake in a pension fund to Aegon NV, which allows it to complete the transaction. Warsaw-based BRE, which earlier this year agreed to sell 49.7 percent of shares in the fund to the Dutch insurer for 482.5 million zloty ($168 million), will complete the sale in seven days and won't hold any shares in the fund, BRE said in a regulatory statement today.
Erste May Write Down Romanian Goodwill, Wood Says
Erste Group Bank AG, Austria's biggest publicly traded lender, may have to write down some of the 2.6 billion euros ($3.8 billion) of goodwill on its Romanian Banca Comerciala Romana unit, Wood & Co. said. “We will likely see some adjustments in goodwill at the end of 2008,” Prague-based Wood & Co. analyst Peter Vidlicka wrote in a note to investors today. The goodwill isn't part of the Vienna-based bank's core capital, which should rise to a “comfortable” 9.2 percent by the end of the year, he added. “While the analysis of Wood is in theory correct, there will be no writedowns of goodwill this year beyond 70 million euros in connection with the sale of the insurance unit,” spokesman Michael Mauritz said by telephone today. Goodwill on Erste's balance sheet will be cut after the bank sold an insurance business earlier this year to Vienna Insurance Group.
Raiffeisen Zentralbank Won't Earn a Profit on Iceland (Bloomberg)
Raiffeisen Zentralbank Oesterreich AG, Austria's third-biggest bank, said it won't make a profit in 2008 after writing off assets linked to Iceland and the failed U.S. firm Lehman Brothers Holdings Inc. RZB's net income will fall to around zero from 778 million euros ($1.13 billion) in 2007, Chief Executive Officer Walter Rothensteiner told journalists at a briefing in Vienna today. “Net profit will be around zero due to the difficult conditions of the intensified financial crisis in 2008,” he said. Profit will be reduced by 1.5 billion euros in writedowns and losses. About half that total involved losses incurred on Icelandic assets and Lehman Brothers. The remaining 750 million euros are markdowns on investments in securities and financial instruments. The Vienna-based lender will write off 487 million euros of Icelandic assets and 225 million euros mostly on Lehman Brothers assets this year. The bank's total risk in Iceland is about 600 million euros, Rothensteiner said.
Polish Central Bank Says it Doesn't Favor `Immediate' Market Intervention (Bloomberg)
Poland's central bank said it doesn't favor ``immediate intervention'' in the currency market. Today's statement came in reaction to an article in Gazeta Wyborcza yesterday that cited Governor Slawomir Skrzypek saying: ``I am not a supporter of intervention on the currency market, but I cannot rule out that such a need may arise.'' According to the bank, the daily suggested that Skrzypek supports ``immediate intervention,'' which is an over- interpretation of his words and ``may lead to unjustified turbulence'' on the currency market. The zloty traded at 4.1587 per euro at 1:27 p.m. in Warsaw, a 3 1/2-year low.
JPMorgan Cuts Price Estimates for Turkish Banks on Economy
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Anesiva's pain drug
Reason
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Anesiva's pain drug meets main goal (Reuters)
Anesiva Inc's experimental pain drug Adlea met the main goal of a late-stage trial, raising hopes that the tiny biopharmaceutical company may find a partner to further develop the drug and prompting a six-fold jump in its market value. "Anesiva should be able to go out and say that this is a drug that works and they should be able to attract a development partner sometime next year," Zacks Investment analyst Jason Napodano said. Adlea significantly reduced post-surgical pain in four to 48 hours in patients who underwent total knee-replacement surgery, compared with a dummy drug, in the late-stage trial. The drug candidate also reduced the intake of opioid medication in patients, the company, whose market capitalization stood at about $2.9 million on Monday, said. The drug candidate's success provides a break for Anesiva, whose market value has eroded by about $138 million since the start of the year. In November, the company had withdrawn its pain drug Zingo from U.S. markets, citing manufacturing problems, and cut its workforce by 85 percent to 15 employees to preserve capital. The latest trial data on Adlea could breathe new life into the struggling company, which has been looking for a partner for the pain drug. Tuesday's announcement puts Anesiva back in the reckoning to find a partner, or license the drug. A partnership is necessary for the company to conduct an additional late-stage study to prove Adlea's efficacy, Zacks Investment's Napodano and Pacific Growth Equities analyst Liana Moussatos said. "I would say that before the news today they weren't going to get anything. Today it is at least more likely that there will be a deal," Zacks Investment's Napodano said.
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Goldman Sachs
Reason
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Goldman Sachs's First Loss Is Narrower Than Some Analysts Had Estimated (Bloomberg)
Goldman Sachs Group Inc. reported a fourth-quarter loss of $2.12 billion, its first since going public in 1999, as the most profitable of Wall Street's biggest firms succumbed to the global credit crisis. The loss of $4.97 a share in the three months ended Nov. 28 was smaller than analysts' most pessimistic estimates, and the shares rose 14 percent. The firm reported net income of $3.22 billion, or $7.01, in the same period a year earlier. Chief Executive Officer Lloyd Blankfein, who led the firm to its lowest annual earnings since 2002, gave up his bonus after converting Goldman Sachs to a bank-holding company and accepting $10 billion in bailout funds from the U.S. government. The firm that set a Wall Street profit record in 2007 cut 10 percent of its employees as its stock plummeted 69 percent this year and revenue fell by half. ``I think people are just happy that it's not a disaster,'' said Len Blum, a managing partner at Westwood Capital LLC, a closely held investment bank in New York. ``This is the best of the bunch, and that just shows how weak the expectations are for the sector.''
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