MARKET TALK: Williams Cos. Out Of Indonesia Bidding
27 Feb 12:54
Edited by Thomas Granahan
Of DOW JONES NEWSWIRES
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12:53 (Dow Jones) Interesting news out of Asia last night: Williams Cos.
(WMB) pulled out of a consortium bidding for a stake in a pipeline that will
bring $9 billion of natural gas from Indonesia to Singapore, saying it didn't
meet its investment requirements. Williams' exit may hurt the consortium's bid
- led by PowerGas Ltd. - for Transco 1, which will operate the pipeline. Other
consortia bidding for the Transco 1 stake are Unocal (UCL) in partnership with
El Paso Corp. (EP); Korea Gas along with U.S. investment firm AIDEC Management;
and a group led by Malaysia's Petronas. (CRW)
12:41 (Dow Jones) "Enronitis," or excess off-balance sheet debt, apparently
isn't afflicting the restaurant stocks he tracks, Morgan Keegan analyst Robert
Derrington reports. After capitalizing operating leases of eight casual-dining
chains, he found that the average pro-forma return on invested capital declined
only modestly. Similarly, interest coverage (ratio of profits before payment of
interest and taxes to interest on bonds and other contractual long-term debt)
remained "solid" on Applebee's International (APPB), CBRL Group (CBRL), CEC
Entertainment (CEC), O'Charley's (CHUX), Darden Restaurants (DRI), Outback
Steakhouse (OSI), Panera Bread (PNRA) and Ruby Tuesday (RI), Derrington said.
(RLG)
12:29 (Dow Jones) The General Accounting Office released a report today
arguing for government intervention in the property terrorism insurance market.
"The report shows a detailed knowledge of the current terrorism insurance
situation and renews our expectations that the issue is too important to the
economy not to be resolved," Salomon Smith Barney says. (JSX)
12:21 (Dow Jones) Outspoken shareholder activist Evelyn Davis, who once
warned Morgan Stanley (MWD) that her ghost would appear at annual meetings, may
cross the Atlantic for this year's event. Very much alive, Davis says she's
considering attending the meeting, even though it's in London. She said she
won't make the final decision until a few days before the event. It's not the
money she's worried about, she said, but the hardships associated with
traveling there from Washington, D.C. She skipped Morgan Stanley' meeting last
year due to illness. (CWM)
12:06 (Dow Jones) Congress is in the process of voting on the Tauzin-Dingell
bill, which would in effect reverse much of the Telecommunications Act of 1996
that required the nation's dominant local phone carriers to open their networks
to lease to competitors, spawning dozens of now-bankrupt startup phone
companies. Verizon (VZ), SBC (SBC), BellSouth (BLS) and Qwest (Q) have lobbied
for the bill, which is expected to be approved by the House. Senate approval
isn't seen any time soon. (CBN)
11:59 (Dow Jones) After a powwow with Citigroup (C) CFO Todd Thomson, analyst
Andrew Collins of U.S. Bancorp Piper Jaffray says the company's capital market
activity is off to a slow start, while fixed income is seasonally strong. Citi
also has very few surprises in terms of bad telecom loans, he added, since it
used "derivatives and the secondary markets to mitigate risks." Meanwhile, the
company doesn't have a problem with having to potentially move its "off-balance
sheet" items back onto the books. And don't assume Citi's low stock price will
preclude it from buying anything: with plenty of cash on hand, the behemoth is
interested in global consumer finance businesses, as well as emerging markets
and wealth management. (TAS)
11:47 (Dow Jones) Tiger Woods now holds yet another "honor": top taxpayer in
the prosperous Chinese city of Shenzhen. The world's No. 1 golfer paid 4.2
million yuan (about $500,000) in taxes on his fee for a November appearance, as
some folks ponied up $18,000 each to play a hole against him. (CRW)
11:36 (Dow Jones) The news out of eBay (EBAY) was good on both counts
Tuesday, says WR Hambrecht. The acquisition of NeoCom extends eBay's global
footprint into Taiwan, and the decision to withdraw from Japan is not
surprising and shows management is finally taking aggressive steps to address
an obvious deficiency in its franchise. Keeps strong buy rating, $75 target.
EBAY off 4% at $51.13. (TG)
11:27 (Dow Jones) Activities at this week's Singapore air show backs his view
that '02 and '03 will be down years for the commercial aircraft market, says
Pierre Chao of Credit Suisse First Boston. He doesn't expect jet deliveries to
pick up until '04-'05. One bright spot: business-jet makers such as General
Dynamics' (GD) Gulfstream are making sales, indicating that Asia could become a
major market for such jets. (SON)
11:15 (Dow Jones) Greenspan says that while "clearly what is going on in
Japan is negative to the outside world," it won't be able to arrest a U.S.
recovery "which is now under way." This is in line with the administration's
apparent view that while Japan's economic stagnation might be a hurdle for a
recovery here, it's a dead weight on the global economy in general. (GMM)
11:11 (Dow Jones) An update from the VIX watch: The CBOE's market volatility
index has eased 1.13 to 22.44 with stocks ahead, helped by Greenspan's
cautiously optimistic stance. This options fear gauge is now once again
approaching the 22 mark, which recently has preceded short-term stock-market
corrections. Since mid-November, VIX - which measures S&P 100 index option
prices to gauge investor sentiment - has flitted largely between 22 and 28;
over the past three months, VIX has edged back up (and stocks down) each time
VIX falls near the 22 mark. Many are watching to see if this trend holds. (KT)
11:03 (Dow Jones) Slumping retailer Gap's (GPS) $1 billion offering of
seven-year convertible notes are expected to have a coupon between 6% and 6
1/2% and a conversion premium between 22% and 25%. Announced Tuesday, the deal
is expected to price today. GPS off 4.2% at $12.98. (JD)
(END) DOW JONES NEWS 02-27-02
12:54 PM |
