RESEARCH ALERT-CIMB downgrades SGX to underperform
STATEMENT:Singapore Exchange , Asia’s no. 2 listed bourse by market
value, warned market activity in the near-term could be hit,
even as it posted an 18 percent forecast-beating rise in
quarterly profit on strong derivative revenues.CIMB cut its fiscal 2012-2014 earnings-per-share estimate as
it expects costs to rise from the second quarter, and as
October’s daily trading value was not promising, the brokerage
said.”Sure, first quarter results were good, with cost-control
the star. Unfortunately, subdued costs are a mirage with revenue
reflecting a quarter when market lethargy has yet to set in,”
CIMB said in a report.Shares of SGX have fallen about 25 percent since the start
of the year. They closed at S$6.29 on Monday.
Mobile telephony startup targets jump in sales
* Sees revenue run-rate reaching $100 mln next yearBy Tarmo Virki, European Technology CorrespondentOct 13 (Reuters) - Swedish startup Rebtel, the second
largest mobile Internet telephony firm after Skype, expects
sales to surge next year based on strong initial demand for its
new application combining Internet calls and traditional
calling.Venture-backed Rebtel has built a clientele of 13 million
users offering cheap international calls for cellphone users,
and it aims to reach $100 million annual revenue rate during
next year, compared with $62 million revenue seen for 2011.It unveiled on Thursday its new application for
international calls, which provides free calls between Rebtel
users, and technology enabling switching between traditional
voice calls and Internet calls if call quality drops too low.Rebtel says its the second largest mobile VoIP (Voice over
Internet Protocol) provider after Skype, which Microsoft is buying for $8.5 billion. Internet protocol services
offer free voice and video calls routed over Internet
networks.Andreas Bernstrom, Rebtel’s chief executive, said the
ability to use also telecom networks and allow calling to any
number, including landlines or simple cellphone models, make
the offering stand out among rivals.Operators have tried to block such services in some
countries and Bernstrom forecast the battle for $628 billion
voice calls market to continue.”We’re kind of a friend and an enemy for operators: from
wholesale perspective they like us, but from consumer
perspective they don’t,” Bernstrom said.Index Ventures and Benchmark Capital invested $20 million
in Rebtel in 2006 and Bernstrom said there were no imminent
plans to raise more capital as the firm turned profitable last
year, but said this could change if launch of the new app goes
well and capital markets would be better.”It might make sense to arrange Series B,” he said.
UPDATE 2-UK unemployment hits highest since 1994, youth suffer
* More than one in five of youngsters without a jobBy Sven Egenter and Olesya DmitracovaLONDON, Oct 12 (Reuters) - Unemployment in Britain has
jumped to its highest level since 1994, with young people hit
hardest as private companies fail to make up for job losses in
the public sector, piling pressure on the government to boost a
stagnant economy.Deep cuts in state spending will erase more than 300,000
public sector jobs in coming years, while the economy is
teetering on the brink of recession again as consumers tighten
their belts and key export markets slow down, particularly in
Europe.The government was quick to blame the rise in unemployment
to 2.57 million on the global financial crisis and the euro zone
turmoil. But calls for it to ease its austerity plans increased
as fears of a “lost generation” of young people without hope of
a job are growing.Economists also warned Britons should brace for more bad
news as employment numbers tumbled at recession-style rates.”The figures are a disaster,” said economist Alan Clarke of
Scotia Capital, adding that the economy was just not strong
enough to create jobs.Less than a week after the Bank of England launched a fresh
round of stimulus to prevent a recession, BoE chief economist
Spencer Dale told Reuters in an interview that the economy was
likely to weaken further in the final quarter of this year.The Office for National Statistics said the number of people
without a job on the ILO measure jumped by 114,000 in the three
months to August to 2.57 million, the highest total since
October 1994.The jobless rate hit 8.1 percent, the highest since 1996.Youth unemployment rose to 991,000, its highest since
records began in 1992, driving the jobless rate among eligible
16- to 24-year-olds to 21.3 percent.John Philpott, Chief Economic Adviser at the Chartered
Institute of Personnel and Development, warned that this number
looked set to exceed the psychologically important 1 million
mark next month.The government has been banking heavily on private firms to
create enough jobs to make up for the losses of private sector
jobs, but economists said the drop in employment was worrying.”The number of people in work plunged 178,000 in
June-August, the biggest drop since mid-09 and the kind of
decline that previously has only been seen during recessions,”
said Citi economist Michael Saunders.Employment Minister Chris Grayling agreed that the figures
were “not at all positive”.”What we’re now seeing, I’m afraid, is the impact of the
international financial crisis, the troubles in the euro zone on
the economy in this country,” he told the BBC.The number of Britons claiming unemployment benefit rose by
17,500 in September, below analysts’ forecast of a rise by
25,000.Unions seized on the dire numbers to mount a fresh attack
against the government.”In the middle of the worst international recession for 80
years the Government itself is creating unemployment with
250,000 public sector posts already gone and still more to come.
Government policy is hurting but it’s not working,” said Paul
Kenny, General Secretary of Britain’s GMB union, the country’s
third largest.The coalition government of Conservatives and Liberal
Democrats wants to boost growth through lower corporate taxes,
fewer labour market regulations and other supply-side measures.Finance minister George Osborne has also announced a scheme
to funnel loans more directly to credit-starved smaller firms,
though this plan may not take effect any time soon.Meanwhile the Bank of England has swung into action and will
pump an additional 75 billion pounds ($117 billion) into the
economy in order to prevent a renewed recession.But doubts remain over whether this will be enough of a
boost for the economy, which has barely grown over the past year
as consumers face a combination of soaring prices, higher taxes
and slow wage increases.The ONS’ figures showed that real incomes were still falling
as pay increases fell even further behind inflation rates of
nearly 5 percent.Average weekly earnings including bonuses grew by 2.8
percent. Analysts had forecast a rise of 2.9 percent. Excluding
bonuses, earnings rose only 1.8 percent, below analysts’
forecasts of 2.0 percent.
