Other News

Fed loans to help
WASHINGTON: Access to Federal Reserve loans means Lehman may have breathing room that Bear Stearns lacked before its abrupt collapse. The program, the Primary Dealer Credit Facility, could be used for funding while officials, regulators and executives find alternative sources of cash, Fed watchers said.

HSBC not to buy i-bank
HONG KONG: HSBC Holdings is ‘highly unlikely’ to buy an investment bank, its Asia CEO said on Wednesday, dousing speculation the bank may invest in Lehman. “Our approach, as we’ve said, is it’s highly unlikely that we will take a major interest in an investment bank,” said Sandy Flockhart, CEO of HSBC’s Asia-Pacific region.

BEAR STEARNS to pay $28m
NEW YORK: Bear Stearns and its EMC mortgage subsidiary agreed to pay $28 million to settle charges brought by the Federal Trade Commission that they used unlawful practices to collect payments on risky home mortgage loans. The FTC alleged the companies had misrepresented the amounts borrowers owed.

LEHMAN may be up for sale after $4 Billion Q3 Loss

LEHMAN Brothers, in a desperate bid to survive, announced plans Wednesday to sell a majority stake in its prized investment management business and said a sale of the entire company was possible.
Lehman, battling the nation’s worst financial crisis since the Depression, also said it would spin off a troubled real estate unit and slash its dividend. Those moves come as the nation’s fourth largest investment bank reported an almost $4 billion third-quarter loss, boosting its losses so far this year to about $6.5 billion. The nation’s fourth-largest investment bank said it will spin off $25 billion to $30 billion of its commercial real estate operations and slashed its dividend to 5 cents from 68 cents in a move to save $450 million a year. The moves are intended to prove to Wall Street that the embattled bank has enough liquidity to survive.
But Lehman also said it is open to “examining all strategic alternatives to maximise shareholder value” which on Wall Street suggests it would consider a bid for the entire company.
Lehman Brothers Holdings, whose shares have plunged more than 80% this year as investors lost confidence in the company, said it lost $3.9 billion during the third quarter. The company, like others on Wall Street, suffered from wrong-way bets on mortgage securities and other risky assets.
“This is an extraordinary time for our industry, and one of the toughest periods in the firm’s history,” chief executive Richard Fuld said in a statement. “The strategic initiatives we have announced on Wednesday reflect our determination to fundamentally reposition Lehman Brothers by dramatically reducing balance sheet risk, reinforcing our focus on our client-facing businesses and returning the firm to profitability.” Lehman shares rose 61 cents, or 7.8%, to $8.40 in morning trading.
Lehman’s quarterly loss includes gross writedowns of $5.3 billion on residential mortgages and $1.7 billion on commercial real estate positions. The results reflect a continued decline in Lehman’s portfolio — in the second quarter the company lost $2.8 billion for the period, and in the year-ago period it posted profit of $887 million.
Lehman said it has reduced its residential mortgage exposure by 31% to $17.2 billion, and expects its sale of $4 billion of its UK residential mortgage portfolio to BlackRock Financial Management to be completed within the next few weeks. Lehman Brothers also reduced its commercial real estate exposure by 18% in the third quarter to $32.6 billion from $39.8 billion.
The company did not name a buyer for a 55% stake in its investment management business, which includes the prized Neuberger Berman asset management unit. The bank said the spinoff of the commercial real estate portfolio into a separate publicly-traded company, Real Estate Investments Global, will be completed in the first quarter of 2009.

10 Companies for an Encore to your Portfolio

These are some of the companies which I(Arun) feel has bottomed out.These are pretty interesting companies with decent business models and good fundamentals. So check them out.

Aishwarya Telecom: In my earlier note i said it for no reason deserves a price of 136rs. Just look at the bechara now,quoting at 28rs. Surely bargain hunters would opt for it sooner or laters. So though not 136 but a mere 28 is very feasible for one to have a token position.

Asian Electronics: Market i feel has discounted all bad news of the company. Asian electronics at present level of 70 is a good buy. Within the next 6 months asian should rebound bigtime. Battle to regain its lost glory has already begun.

Futura Polyesters: The court recently sanctioned the demerger scheme. So one is surely entitled to get Innovasnyth technologies now. Futura polyester is a steal at present levels of 22.A great buy.

Jai Corporation: A huge success story being beaten down badly though for some reasons. But still jai corporation doesn’t deserve a price of 280. Several funds opted for it,a great company with a solid aggressive, vision oriented owner. He has taken oath to take the company beyond ones reach.A good value buy.

Jaiprakash Associates: I feel pity for these company,a superb company being misunderstood so badly.At 150rs its a must have in anyones core portfolio.You are also entitled to get free shares of JP Infratech.

Kemrock Industries & Exports: One of my hot favorites of yesteryears.Superb result,great aggressive management. The company supplies its products to the biggies like boeing and all. At 300 i would definitely book it for my portfolio.

Punj Lloyd: People who feel Larsen & Toubro is beyond your reach please don’t get disappointed. The next Larsen in making, the company with over 20000crs of order book is just quoting at 210 levels. Exit out flop ones in the basket to replicate it with a success, Punj lloyd.

Saag RR Infra: The company ended the fiscal with 66crs of topline.It has got a robust order book position of over 410crs.So huge revenue visibility,sunrising sector coupled with great outlook makes it a super buy.The company is quoting at 38rs.

Valuemart Info Technologies Ltd: To start with the company is quoting at “3″rs presently. To conclude-checkout its promoter-the real man with an amazing mind. He has taken a lot at 6rs now its hi-time you book it at the earliest.Valuemart info is a great but at the current level of rs 3.

Walchandnagar Industries Ltd: My 2nd 50 bagger,my darling,my walchandnagar. Dont be jealous guys though not a 50 bagger but Walchandnagar still has the potential to do an encore from the present levels of 200. A quality company at much of a discount.