Client News Release
FCStones profit rises, revenue falls (at bizjournals.com) and Report: BofA slapped with subpoena (at bizjournals.com)
City of Industry, CA --(www.FinancialNewsUSA.com)-- 11/19/2008 - Banking industry news provided by Financial News USA (OTC: FNWU). FCStone Group Inc. reported a 22 percent increase in net income for the fiscal year that ended Aug. 31. The Kansas City-based company (Nasdaq: FCSX) logged net income of $40.6 million, or $1.40 a share, for the year, up from $33.3 million, or $1.33 a share, the prior year. Revenue of $337.5 million was down 74.8 percent from last year's $1 billion, but the company saw a corresponding decrease in the cost of commodities sold to $1.1 million, down 99.9 percent from $1.1 billion last year. "A large portion of our growth is attributable to the ability of our risk management consultants to continually react to the changing needs of the customer by identifying new products, structures and solutions to manage their commodity risk," CEO Pete Anderson said in a release Thursday. [Read the full article]
New York State Attorney General Andrew Cuomo has issued a subpoena to Bank of America Corp. to get information on how it allocates its bonuses. According to The Wall Street Journal, Cuomo's office believes the bank (NYSE: BAC) hasn't adequately responded to an informal request made two weeks ago for information on executive compensation. Late last month, Cuomo sought information from the country's nine largest banks, including BofA, regarding their plans for paying bonuses. He also asked their boards to explain what mechanisms they have in place to protect the taxpayer funds obtained through the federal bailout package. The banks agreed to accept $125 billion in federal funds as part of the government's effort to add liquidity to the credit markets. How banks handle their compensation has become a political issue with the infusion of public funds. [Read the full article]
Investment brokerages aren't built to excel in extreme bear markets, but Barron's Michael Santoli says Charles Schwab (SCHW) comes closer to that ideal than any other firm. Schwab is a well-run asset-gathering machine, with steady revenue streams, pared down costs and branding as the 'honest broker.' All this means Schwab is in an excellent position to gain market share, even during the current economic turmoil. Schwab's stock has fallen 30% this year, but has outperformed the S&P 500 and its discount-broker and asset-manager peers. Friday's closing price was $16.61 but if markets merely stabilize and trading volume doesn't collapse, shares could easily approach $20 again. Schwab is trading at 14 times estimated 2009 earnings and under 16 times trailing earnings, compared to its previous 20 times earnings. The company regularly provides a 30% return on equity, and has a pretax profit margin near 40%. [Read the full article]
KANSAS CITY, Mo., Nov. 17, 2008 (GLOBE NEWSWIRE) -- Agora-X, LLC, which is creating a new electronic trading and negotiationplatform for commodities, has petitioned the Commodity Futures Trading Commission (CFTC) for an order to allow Agora-X to clear trades in agricultural swap and swaption contracts negotiated on its platform to a registered Designated Clearing Organization (DCO). Clearing of over-the-counter (OTC) trades in agricultural swaps and swaptions including wheat, corn and soybeans, which current CFTC rules do not allow without a specific exemption, is desirable because it would reduce counterparty risk between market participants, a concern during the current financial market disruption. The Agora-X petition seeks an exemption, under Section 4(c) of the Commodity Exchange Act (CEA) and CFTC Rule 35, to allow clearing of agricultural swaps and swaptions negotiated on the Agora-X platform. [Read the full article]
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