Nintendo shares slump after loss

29 July 2011 Last updated at 07:17 GMT Nintendo's latest gadget the 3DS has not made a big impact on the market Shares in Nintendo have tumbled on the Tokyo stock exchange a day after the company announced a loss in the first quarter.

The shares closed down 13%, having fallen as much as 20%, on news of the worse-than-expected profits figures.

On Thursday, Nintendo reported a net loss of 25.5bn yen ($324m, ?201m) for the April-to-June quarter, its first-ever quarterly loss.

The company also cut its full-year profit forecast.

Nintendo said it now expects a net profit of 20bn yen for the year to March 2012, down 82% from its previous projection.

'Underweight' Nintendo earnings were hit by weak sales of its new gadget, the handlheld 3DS console.

In an attempt to boost sales the company has announced huge price cuts.

The price in Japan will be about 40% less - retailing at 15,000 yen. In the US, the price will drop next month to $169.99 from $249.99.

However, analysts said the price cut may hurt the company's earnings even further.

"The timing of the 3DS hardware price cut is surprising, given the major in-house software releases," said Hiroshi Kamide of JP Morgan.

"We believe the 3DS will be a heavy weight on earnings over the medium term," he added.

JP Morgan also cut its rating on Nintendo from "overweight" to "underweight," saying the current situation was worse than feared and the outlook uncertain.

Tired customers?

To make matters worse for the gaming giant, industry watchers say sales of the 3DS are unlikely to turn around anytime soon.

"Software is a big problem. Right now there are not many games available for the 3DS," said David Abrams, of CAGCast Video Game.

Mr Abrams added that while the 3DS has had a lukewarm response, smartphones continue to capture an increasing share of the gaming market.

He said easy availability of games and their low cost meant more and more people were preferring smartphones over specialised gadgets.

"The question is, are people willing to spend a premium to play the next Mario game or would they spend that amount to buy close to 40 games on their smartphones," he said

Mr Abrams added that despite the launch of its latest version, the DS gadget has been losing its charm.

"The reality is that people may be tired of the whole DS concept. It has been around for almost seven years," he said.

"May be its not that exciting to people anymore," he added.

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BYD shares fall on profit warning

13 July 2011 Last updated at 05:22 GMT BYD has been trying to boost its sales by introducing new electric and hybrid car models Shares of the Chinese car and battery maker BYD have fallen at the stock exchanges in Hong Kong and Shenzhen, after the company issued a profit warning.

BYD said its profit for the first half of the year could plunge by as much as 95% because of a drop in car sales.

BYD's shares dipped by as much as 6.7% in Hong Kong.

The company said the end of tax incentives for small cars in China had hit demand for its vehicles.

BYD revealed that its profit for the first six months of the year is likely to be between 121m yuan ($18.7m; ?11.7m) and 363m yuan, compared with 2.4bn yuan during the same period last year.

Uncertain times?

BYD's problems are not just confined to falling car sales, its other business units have also witnessed a recent slump.

The company said that sales of components that it makes for mobile telephone handsets and its assembly business also declined during the first half of the year, as one of its major customers deferred orders.

Last month, BYD reported that its first quarter profit dropped by 84%, compared to the same period last year.

Analysts said that given the company's recent performance, there may be more tough times ahead.

"It's below my expectation and there is a chance that they make a loss in the second quarter," said Steven Man of Samsung Securities.

Billionaire US investor Warren Buffett's company MidAmerican Energy, holds a 9.9% stake in BYD.

The renowned American investor, who made his fortune from the investment firm Berkshire Hathaway, is dubbed the Sage of Omaha.

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Ocado sees its shares decline 9%

27 June 2011 Last updated at 16:07 GMT Retail expert Bryan Roberts says Ocado is struggling to keep up with the pace of demand

Online grocery delivery company Ocado has seen its shares slump 9% despite reporting its first half-year profit.

In the six months to 15 May, Ocado made a pre-tax profit of ?200,000, compared with a loss of ?6.7m a year earlier.

Its sales for the half-year rose 21% to ?297m, although this was a slowdown on the 25% growth in the first 12 weeks of the period.

Ocado also announced a deal to sell products supplied by French supermarket group Carrefour.

These French items, to be called Reflets de France, will be trialled from 14 July.

They will be sold in addition to Ocado's current range of Waitrose lines.

Ocado said its profits were limited by its operational capacity, which it was now continuing to increase.

Its net revenues for the first six months of the year totalled ?277m, up 20% from ?230m a year earlier.

At one point Ocado's shares had been 12% lower, before recovering some losses to close down 9% or 17 pence at 169.9p at the end of trading on Monday.

Investment drive

Chief executive Tim Steiner said: "We are delighted to announce our new supply partnership with Carrefour, an important development in our strategy to offer the broadest and most diverse grocery range to all our customers in the UK."

Ocado has not released financial details of the Carrefour deal.

Continue reading the main story

It is hard to see how the brand can compete with leading retailers over the long term in its current guise”

End Quote Anna Smee Hundred Consulting In April, Waitrose announced that it would be expanding its online presence, which many retail analysts say will likely take orders away from Ocado.

Starting from 1 July, Waitrose will be able to deliver direct to its customers from any of its stores within the M25 around London.

Previously Waitrose had been prevented from doing this under an agreement it had with Ocado.

Waitrose already delivers direct from most of its stores outside the M25.

Ocado said it was now planning to spend ?80m over the next two years to increase its capacity up to 180,000 orders per week.

It added that it was continuing to see strong demand from its customers, but while the number of orders it receives was rising, there had been a slight decrease in the average order size.

Failed strategy?

Retail analyst Anna Smee, of Hundred Consulting, said Ocado's results showed "a degree of resilience in the current economic climate".

Continue reading the main story However, she added that the company still faced an uncertain future.

"The fundamental question mark above Ocado is that it has failed to lay out a clear long-term growth strategy," she said.

"Online shopping is now widespread but so, unfortunately, are the major food retailers that offer it, not least Waitrose, which could prove a major threat in core markets as the non-compete agreement comes to an end."

Ms Smee added that Ocado needed to explore growth options, such as expanding across the UK or oversees.

"It is hard to see how the brand can compete with leading retailers over the long term in its current guise," she said.

Ocado was founded in 2002 and floated on the London Stock Exchange in July last year.

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Clegg backs 'bank shares for all'

23 June 2011 Last updated at 10:44 GMT "Every (adult) citizen should get some shares," says MP Stephen Williams

Proposals to give the public shares in part-nationalised banks RBS and Lloyds have been backed by Nick Clegg.

The idea is that individual taxpayers would benefit from any long-term gains when shares in the banks are sold.

The deputy prime minister said it was important British people were not overlooked after their money was used to keep the banking system alive.

The Treasury said all options would be considered but some experts have warned the scheme would be difficult to run.

'Life-support machine'

Under the plan, the 45 million people on the electoral roll would be given free shares in the bailed-out banks, Royal Bank of Scotland and Lloyds Banking Group.

The shares would only have any value above a "floor price", equivalent to what the government paid for the holdings, so the Treasury could cover the cost of its investment.

That price is estimated at 74p per share for Lloyds and 51p for RBS.

Continue reading the main story About 75% of publicly-owned shares distributed to all British adults on the electoral roll - for free Recipients get full rights of shareholder When shares are sold, a fixed "floor price" goes to Treasury to return its investmentThe shareholder, who could choose when to sell, would keep any profitThe idea for so-called people's shareholdings, first suggested in March, was developed by City firm Portman Capital with the support of the Lib Dems' Treasury Parliamentary Committee, chaired by backbencher Stephen Williams.

He argued that the mass distribution of the bank shares would be the fairest way of giving taxpayers a share of the rewards, of getting back the money the government paid out in 2008, and would help restore confidence in state-owned financial institutions.

Mr Clegg has written to Chancellor George Osborne in support of the proposal.

Speaking on a trip to Brazil, Mr Clegg said: "Psychologically it is immensely important that the British people feel they have not just been overlooked and ignored.

"Their money has been used to the tune of billions to keep the British banking system on a life-support machine and they have absolutely no say at all in what happens when normality is restored.

"I think, in a sense, as a society we are condemned to take an interest in our banking system."

'Huge fees'

He said the scheme would give the Treasury an assurance that they would "break even" without allowing it "the freedom to grab the windfall if there is one".

Liberal Democrat leader Mr Clegg admitted there remained "a huge amount of detail still to be worked on".

Continue reading the main story Hugh Pym Chief economics correspondent, BBC News

If it happens it would be the biggest exercise yet in "people's shareownership", putting the Thatcherite privatisations into the shade.

The sales of British Gas and other utilities created a new generation of 10 million shareholders in the late 1980s and early 90s.

But they had all made a conscious decision to buy.

The proposed scheme for Lloyds and RBS would give 45 million adults shares, many with no experience or knowledge of the Stock Market.

The fact that Nick Clegg has thrown his weight behind it is significant.

There has been no rubbishing by the Treasury who say they will "look at all options".

But there's no guarantee it will go further.

The chancellor ultimately will decide whether its workable and gives value for taxpayer.

There have been suggestions the scheme could cost hundreds of millions to administer but Mr Williams, the MP who floated the idea, told the BBC he was convinced it would be cheaper than a conventional privatisation.

He said: "If you privatise a huge utility, like BT or British Gas, all the merchant banks get involved, stock brokers get involved... huge fees will be clocked up by the Treasury."

He added that people with "surplus cash" would be able to buy shares, but millions of citizens would miss out, despite having "felt the pain of contributing" to the bank bailout in the first place.

The idea has also been backed by the Conservative backbencher John Redwood, who told the BBC: "It is a great opportunity so that the taxpayers can be involved, the taxpayers could then it discipline the banks as their owners and shareholders and they can get something back when the banks have sorted themselves out."

Northern Rock

The Tory right winger asked Chancellor George Osborne about the idea in the Commons earlier in the week.

Mr Osborne told him was "always happy to discuss ideas" about disposing of the bank shares and the "good bank" in Northern Rock was going up for sale.

Continue reading the main story

The government needs to urgently explain what impact this proposal will have on the public finances”

End Quote Ed Balls Shadow Chancellor But he added: "We want to exit from our shareholdings in RBS and Lloyds in due course, but we do not judge now to be the right time."

Business Secretary Vince Cable said proposals were at a "preliminary" stage and it would be some years before the banks were in a position to be returned to the private sector.

But he said it would be a way for tax-payers to benefit after "saving" the banks.

Mr Cable, who has previously accused the banks of privatising their profits and socialising the losses, said the proposal would be one way of reversing that he said.

The taxpayer owns 83% of RBS and 41% of Lloyds after the government invested about ?65.8bn in 2008 at the height of the banking crisis.

A Treasury spokesman said: "While the question hasn't arisen at the moment, we've said we shall look at all options".

Labour dismissed the proposal as a headline grabbing exercise by Mr Clegg that had not been properly thought-through.

Shadow chancellor Ed Balls said: "The test for what happens to the nationalised banks must be the long-term best interests of the taxpayer not the short-term need to get headlines for Nick Clegg's overseas trip.

"The government needs to urgently explain what impact this proposal will have on the public finances, what the administration costs are estimated to be, how the scheme would work and what effect it would have on the balance sheets of the banks."

Michael Stephenson, general secretary of the Co-operative Party, which is affiliated to the Labour Party, accused Mr Clegg of recycling an old Conservative proposal "to sell off cheap shares in the rescued banks that can be sold on by the shareholders for a quick buck at taxpayers' expense".

Instead, he said Northern Rock should be "re-mutualised" to create a real "people's bank".

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Carrefour shares fall on warning

17 June 2011 Last updated at 10:06 GMT Carrefour has announced a new head to run its French operations Shares in Carrefour have fallen 6% after Europe's biggest retailer issued a warning that profits in its core French market were set to fall.

Carrefour, which issued two profit warnings last year, is facing fierce competition from rivals in France.

The company said late on Thursday that first-half results would be below expectations.

Analysts had feared a warning since May, when the head of operations in France unexpectedly left the company.

Carrefour, the world's second largest retailer behind Wal-Mart, has been under pressure from rivals E Leclerc and Auchan.

Carrefour shares have now fallen 14% since the start of the year.

Chief executive Lars Olofsson had taken personal control of the French business, while at the same time delivering a global turnaround strategy.

But on Thursday Carrefour announced that it had named company veteran Noel Prioux to take charge of its French operations.

France accounts for 40% of Carrefour's sales and is under pressure as rivals keep prices low to gain market share.

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MGM China shares rise 2% on debut

3 June 2011 Last updated at 11:43 GMT Rising gambling revenues in Macau have driven up the profits of casino operators in the territory MGM China has made its debut on the Hong Kong stock exchange as investors continue to bank on Macau's gambling boom.

The shares ended the day up 2% at HK$15.62. During the session, the company's shares rose as much as 6%.

MGM China is one of only six companies that have licences to operate casinos in Macau.

The company priced its stock at HK$15.34 per share, the top end of its expected range, raising $1.5bn (?912m).

Continue reading the main story

[Young people] know they will get a job in a casino and have a pretty good life. There's less drive to compete”

End Quote Ricardo Siu University of Macau Gambling revenues in Macau have been rising, turning it into the world's biggest gambling market.

Booming market

Major Asian economies are witnessing robust growth, which has helped revenue and profits of Macau's casino operators rise substantially.

Gambling revenue in Macau surged 57% in 2010 to $23.5bn (?14.4bn).

As a result, investors have made a beeline for shares of the leading operators in the territory.

Shares of SJM Holdings, the largest casino operator in the territory, have risen by 240% in the past year.

Galaxy Entertainment, which runs six casinos in Macau, has seen its stock price surge by 380%.

Analysts say that as the profile of Macau keeps rising, investors are betting on the operators in a bid to grab a share of the success.

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Airline shares hit by ash fears

23 May 2011 Last updated at 20:56 GMT There are fears that the ash cloud could spread to the UK and mainland Europe Shares in Europe's biggest airlines have fallen on fears that Iceland's latest volcanic eruption could disrupt flights across the continent.

International Consolidated Airlines and Easyjet fell by about 5%, with Air France KLM down 4.5%.

Flights in, to and from Scotland have been cancelled as ash from the Grimsvotn volcano continues to head towards the UK.

One year ago, Icelandic ash caused huge disruption to flights in Europe.

That was caused by the country's Eyjafjallajokull volcano.

Airport closure

British Airways, KLM, Glasgow-based Loganair and Eastern Airways have all cancelled flights on Tuesday, as the Civil Aviation Authority (CAA) warned that further disruption cannot be ruled out.

Icelandic air traffic control has already created a no-fly zone around the Grimsvotn and cancelled all domestic flights. The country's main international airport, Keflavik airport near the capital Reykjavik, has been closed.

However, the UK's Met Office, which runs Europe's Volcanic Ash Advisory Centre, said the latest eruption would not necessarily lead to airspace closures further afield.

Shares in Ryanair were also hit, falling 6.2%, but this was in part due to the budget airline's warning that it faced a tough winter ahead because of rising fuel costs.

This overshadowed the group's reported 23% rise in profit of 374m euros ($525m; ?325m) for the year to March.

Shares in German carrier Lufthansa fell 3.5%.

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Glencore's shares flat on debut

19 May 2011 Last updated at 17:41 GMT Glencore is expected to be fast-tracked into the FTSE 100 Shares in the commodities trading giant Glencore ended right where they started on the first day of conditional - or "grey" - trading in London.

They closed at the same price as they opened - 530p - although at one point they rose as much as 4% to 548p.

Full trading in the firm, whose ?36.7bn share-offer value makes it one of the biggest in the UK, begins on Tuesday.

It was expected to raise about ?6.8bn, making it London's largest initial public offering.

Glencore's valuation means it is expected to be fast-tracked into the FTSE 100 index at the end of its first day of full trading on 24 May - only the third time that has happened in the index's history.

Glencore is also selling shares in Hong Kong, which have been priced at 66.53 Hong Kong dollars per share.

Glencore's directors and employees still hold about 83.1% of the company, making them extremely wealthy on paper.

Chief executive Ivan Glasenberg, the largest shareholder with about 18% of the company, will be worth about ?6bn, making him one of the world's richest men.

"Glencore's offer has seen substantial interest from investors around the world and was significantly oversubscribed throughout the price range providing Glencore with a high-quality, diverse and geographically spread investor base," he said in a statement to the London Stock Exchange.

Secretive

The initial offering was only for institutions, so retail investors will not get a chance to buy into Glencore until the start of full trading.

Retail investors will be scrutinising Glencore's prospectus to find out more about what has until recently been a relatively secretive company.

The prospectus gives details of the company's activities in countries such as Colombia, Democratic Republic of Congo and Equatorial Guinea, which have attracted controversy in the past.

It also describes pending litigation, including the forthcoming trial of a former employee and a current employee, charged in Belgium with having "committed corruption in exchange for information covered by professional secrecy", in a case relating to the leaking of details of European agricultural quotas.

Former BP boss Lord Browne withdrew from a decision to become Glencore's chairman at the last minute, a move which was attributed to his concerns about transparency.

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LinkedIn shares double on debut

19 May 2011 Last updated at 17:04 GMT LinkedIn executives rang New York's opening bell on Thursday Shares in business networking website LinkedIn have more than doubled on their trading debut in New York, having been priced at $45 each.

Its share price hit $108 at one point in the sort of debut rally not seen since the dotcom bubble of the late 1990s.

The initial sale price was already at the top of an increased range.

LinkedIn sold 7.84 million shares at $45 each. At $100 a share the company is worth about $10bn.

LinkedIn is the first US social network site to get a share listing.

Some analysts believe its strong debut is down to investors' over-enthusiasm for social media stocks.

"The price we're seeing for LinkedIn shares has nothing to do with the value of the company," says Paul Kedrosky, angel investor and senior fellow at the Kaufman Foundation.

"It's just an indication of how much appetite and interest there is for social media stocks."

"LinkedIn is the only trading vehicle for this type of stock. It's the equivalent of trying to funnel thousands of people through a single door".

"Every investor I know is currently scouring around for a social media company to take public. They think it's worth selling at this stage, but not necessarily buying the stocks," he added.

Continue reading the main story Rory Cellan-Jones Technology correspondent, BBC News

$4bn looks a very fancy price for a company with revenues last year of $243m and profits of $15.4m.

That looks modest compared with the figures of $50bn and more being bandied around for Facebook's valuation.

Both price tags will look dumb to those sceptics who see Facebook as an ephemeral craze for people with poor social skills and LinkedIn as little more than a glorified Rolodex

There have been concerns that social networking sites are creating a new stock market bubble.

Shares in one of China's biggest social networking sites Renren rose sharply on their debut in New York earlier this month.

Renren's shares were priced at $14, and in their first day of trading peaked at $21.93 before closing at $18.01.

Facebook and Twitter are both expected to seek stock market listings in the next few years.

On Wednesday, the price range for LinkedIn's initial public offering was lifted from $32 to $35 a share to a range of $42 to $45.

Before shares in LinkedIn started trading, this new price range had valued it at about 17 times its earnings from 2010.

But at $100 a share the company is worth 25 times its 2011 revenue, assuming first-quarter sales are matched over the next three quarters.

Google, which went public in 2004, has a market value of about six times its annual revenues.

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