Weekend Links #1

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The following are links to some interesting articles that you can checkout over this weekend:

1. Why The Dollar Is Getting Stronger – From Speigle Online by By Stanley Reed

2. Can the Footsie end 2008 above 4000? – By Philip Scott, This is Money

3. Finance, the American way – By The Mogambo Guru at Asia Times

4. German Auto Industry Facing the Abyss – ‘WORST CRISIS SINCE WORLD WAR II’ – By Dietmar Hawranek from Speigle Online

5. Which way now? – From The Banker

6. The Financial Times – Black Friday sales suggest longer stay in red

7. CAUGHT IN THE CRUNCH – LATIN AMERICA – By Antonio Guerrero, Global Finance

ABN AMRO Holding NV ADR Terminated

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ABn Amro

ABN AMRO ADR, which used to traded on the OTC market with ticker ABNYY, has been terminated effective yesterday November 24,2008.

In April of this year ABN Amro de-listed its stock from New York Stock Exchange (NYSE) since a consortium of banks led by Fortis (Holland), Royal Bank of Scotland (RBS -UK) and Banco Santander (STD – Spain) announced a deal to acquire ABN Amro.

Yesterday ABNYY closed at $50.25 on a volume 11,727 shares. ABN Amro’s 52-week high was $62.80.

As per the termination notice issued yesterday by the depository JPMorgan, each ADS (American Depository Shares) shareholder will receive $50.4089 per share.

Original Notice of Termination and Net Proceeds Announcement:
“JPMorgan announces it has received notice from ABN AMRO, terminating the Deposit Agreement (the “Deposit Agreement”) governing the ABN AMRO American Depositary Receipt (“ADR”) program. Such termination shall take effect thirty days from the date hereof. Effective immediately the transfer books of JPMorgan, as depositary under the Deposit Agreement, are closed for all purposes.

As a result of the squeeze-out transfer of all ordinary shares of the Company, including those represented by outstanding American Depositary Shares (ADSs), JPMorgan has received payment of EUR 40.029320 (EUR 37.88 + EUR 2.14932 (accrued interest)) per share for the securities underlying the ADSs of ABN AMRO issued under the Deposit Agreement. The proceeds were converted into US dollars and, as a result thereof, permit a distribution at a net rate of $50.4089 per ADS (after deduction of the expenses permitted under the Deposit Agreement). Hereafter, each ADS represents the right to a holder’s pro rata share in the net proceeds of $50.4089 per ADS. ABN AMRO has agreed to pay any cancellation fees owing in connection with the surrender of outstanding ADSs.”

Source: JPMorgan Chase & Co.

Founded in 1824, ABN Amro is now owned by RFS Holdings B.V. which is the consortium of Royal Bank of Scotland Group, Fortis Bank and Banco Santander. The group paid 70B Euros in October last year to take over ABN Amro.

Largest Companies Traded on the New York Stock Exchange

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The S&P 500 Index is down an incredible 45.52% year-to-date this year. The Financials within the index are down even more. The fall in stock prices have wiped out trillions of dollars in shareholder wealth. Last month the British Economist Fred Harrison, widely known as the “Prophet of Doom”, predicted that “”The massive contraction in demand caused by this ‘wealth effect’ will condemn the western economy to a decade-long depression,” and added that US$45 Trillion Global Wealth will be wiped-Out.

Considering the current situation in the equity markets world-wide, have you wondered how many companies that are listed on the New York Stock Exchange (NYSE) have market capitalization of more than $100B now? I did and ran the stock screener to find out.

Companies with Market Cap. of > $100B:

[TABLE=124]

Note: All data is based on Nov 21 closing prices.

Analysis:

  • Only 16 companies in NYSE have market cap. of > $100B.
  • USA leads the list with 10 companies.
  • Due to high oil prices in the past six of the top integrated oil firms have made it to this list.
  • Exxon Mobile (XOM) is the largest company with a market of $384.0 B.
  • None of the US financials are in this list since their stocks have fallen dramatically in the past few months.
  • HBC of UK is the only financial that seems to weathered this credit crisis better than others.
  • CitiBank (C),which had a market cap. of $123.0 B, back in April and made it to Forbes’ “The Global 2000” list, now has is worth only $20.0B.
  • GE had a market cap of $330.0B in April compared to just $139.0B now.
  • Johnson & Johnson (JNJ) is a major drugs maker with a multitude of products in its portfolio.
  • As the current recession worsens, WalMart (WMT) will have higher revenue as folks look for cheaper products.

With about six weeks to go in 2008, it will be interesting to see how this list changes by the end of the year.

4Q Earnings Release Dates and Writedowns for Canadian Banks

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The following are the 4Q-2008 Earnings Release Dates and Writedowns announced for the five major Canadian banks:

Bank of Montreal
BMO – Nov 25
Estimate: $0.94
Writedowns Announced so far(Before Tax): C$638 M

Bank of Nova Scotia
BNS – Dec 2
Estimate: $0.74
Writedowns Announced so far(Before Tax): C$899 M

Canadian Imperial Bank of Commerce
CM – Dec 4
Estimate: $1.30
Writedowns Announced so far (Before Tax): C$4.969 B

Toronto-Dominion Bank
TD – Dec 4
Estimate: $1.02
Writedowns Announced so far(Before Tax): C$65 M

Royal Bank of Canada
RY – Dec 5
Estimate: $0.86
Writedowns Announced so far(Before Tax): C$1.086 B

Eleven Canadian Dividend Aristocrats Index Components

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Canada FlagOn August 28, I wrote an article on the Top Canadian Dividend stocks available in the USA as interlisted stocks.Today’s post is an update to that article.

Out of the 37 stocks in the S&P; TSX Canadian Dividend Aristocrats Index, there are 11 stocks that are traded in the New York Stock Exchange. The following table and chart lists these stocks with their current yields:

[TABLE=9]

Analysis:Out of the five large banks in Canada, four made it to this list. All the four banks have yields of above 6% with BMO having the highest yield at 10.93%. So far, all four haven’t announced any cuts in dividend rates. However on Nov 18, ScotiaBank announced a writedown of $595 million after tax related to “relating to certain trading activities and valuation adjustments.”. TD has announced that it will have a “trading losses of approximately C$350 million leading to a net loss in its wholesale banking division.”

Fourth Quarter Results – Announcement Dates:

RY – December 5
TD – December 4
BMO – November 25
BNS – December 2

Sun Life Financial Services Canada and Manulife are both insurers. MFC is a good long-term play.Brookfield Properties Corp is a real-estate operator, not a favorite sector now. CNI, CNQ, ENB and IMO all have low dividend yields. They are included in this Aristocrats Index because they have increased dividends in the past 7 years though the dividend rate is still low.

The above 11 stocks had lower yields back in August. As the market has crashed in the following months their yields have risen to current levels. For an investor looking to invest in Canada, these stocks might be good picks to research further.Please bear in mind that dividend payments are not guaranteed and may be cut or suspended at any time.