Increase in UIF ceiling 2012 from 1 October 2012.
The maximum earnings ceiling used for the calculation of UIF contributions has been increased from
R149 736 to R178 464 per annum with effect from 1st October 2012.
This makes the new earnings ceiling for the calculation of UIF as follows:
Period Ceiling :
From 1 October 2012 : Year R178 464
(Before 1/10/2012 : R149 736)
From 1 October 2012 : Monthly R14 872
(Before 1/10/2012 : R12 478)
From 1 October 2012 : Fortnight R6 864
(Before 1/10/2012 : R6 239)
Week R3 432
(Before 1/10/2012 : R3 120)
This translates to max UIF to be deducted monthly as follows:
1% of the income for UIF is paid by the employee & 1% is paid by the employer.
This is based on your Monthly, fortnightly, weekly salary from the first R1 up to the Capp.
The Max monthly salary of R14 872 Max UIF is deducted on this amount if the salary is higher it is capped at this amount for UIF.
Example: On Max - Monthly Salary of R14 872
Employee : R148.72 (OLD : R124.78)(MAX : R12 478)
Employer : R148.72 (OLD : R124.78)(MAX : R12 478)
Total monthly : R297.44 (OLD : R249.56)(MAX : R12 478)
Do yourself a favour - do what you have to right now to make sure this change is implimented in your October payroll.
This is just the sort of relatively "small change" problem for small business owners to clean up down the line if you don't do it right when you're supposed to.
If you need any help or any queries regarding this issue give me a call/e-mail
Tuesday, 9 October 2012
Tuesday, 2 October 2012
Pimco Investment Outlook for October 2012
REF : PIMCO Investment Outlook
A good read I came across from my brokers enjoy :
October 2012
"Damages
William H. Gross
The U.S. has federal debt/GDP less than 100%, Aaa/AA+ credit ratings, and the benefit of being the world’s reserve currency.
Studies by the CBO, IMF and BIS (when averaged) suggest that we need to cut spending or raise taxes by 11% of GDP and rather quickly over the next five to 10 years.
Unless we begin to close this gap, then the inevitable result will be that our debt/GDP ratio will continue to rise, the Fed would print money to pay for the deficiency, inflation would follow, and the dollar would inevitably decline.
I have an amnesia of sorts. I remember almost nothing of my distant past – a condition which at the brink of my 69th year is neither fatal nor debilitating, but which leaves me anchorless without a direction home. Actually, I do recall some things, but they are hazy almost fairytale fantasies, filled with a lack of detail and usually bereft of emotional connections. I recall nothing specific of what parents, teachers or mentors said; no piece of advice; no life’s lessons. I’m sure there must have been some – I just can’t remember them. My life, therefore, reads like a storybook filled with innumerable déjà vu chapters, but ones which I can’t recall having read.
I had a family reunion of sorts a few weeks ago when my sister and I traveled to Sacramento to visit my failing brother – merely 18 months my senior. After his health issues had been discussed we drifted onto memory lane – talking about old times. Hadn’t I known that Dad had never been home, that he had spent months at a time overseas on business in Africa and South America? “Sort of, but not really,” I answered – a strange retort for a near adolescent child who should have remembered missing an absent father. Didn’t I know that our parents were drinkers; that Mom’s “gin-fizzes” usually began in the early afternoon and ended as our high school homework was being put to bed? “I guess not,” I replied, “but perhaps after the Depression and WWII, they had a reason to have a highball or two, or three.”
My lack of personal memory, I’ve decided, may reflect minor damage, much like a series of concussions suffered by a football athlete to his brain. Somewhere inside of my still intact protective helmet or skull, a physical or emotional collision may have occurred rendering a scar which prohibited proper healing. Too bad. And yet we all suffer damage in one way or another, do we not? How could it be otherwise in an imperfect world filled with parents, siblings and friends with concerns of their own for a majority of the day’s 24 hours? Sometimes the damage manifests itself in memory “loss” or repression, sometimes in self-flagellation or destructive behavior towards others. Sometimes it can be constructive as when those with damaged goods try to help others even more damaged. Whatever the reason, there are seven billion damaged human beings walking this earth.
For me, though, instead of losing my mind, I’ve simply lost my long-term memory. It’s a damnable state of affairs for sure – losing a chance to write your autobiography and any semblance of recalling what seems to have been a rather productive life. But I must tell you – it has its benefits. Each and every day starts with a relatively clean page, a “magic slate” of sorts where you can just lift the cellophane cover and completely erase minor transgressions, slights or perceived sins of others upon a somewhat fragile humanity. I get over most things and move on rather quickly. The French writer Jules Renard once speculated that “perhaps people with a detailed memory cannot have general ideas.” If so, I may be fortunate. So there are pluses and minuses to this memory thing, and like most of us, I add them up and move on. If that be the only disadvantage on my life’s scorecard – and there cannot be many – I am a lucky man indeed.
The ring of fire
In last month’s Investment Outlook I promised to write about damage of a financial kind – the potential debt peril – the long-term fiscal cliff that waits in the shadows of a New Normal U.S. economy which many claim is not doing that badly. After all, despite approaching the edge of 2012’s fiscal cliff with our 8% of GDP deficit, the U.S. is still considered the world’s “cleanest dirty shirt.” It has federal debt/GDP less than 100%, Aaa/AA+ credit ratings, and the benefit of being the world’s reserve currency – which means that most global financial transactions are denominated in dollars and that our interest rates are structurally lower than other Aaa countries because of it. We have world-class universities, a still relatively mobile labor force and apparently remain the beacon of technology – just witness the never-ending saga of Microsoft, Google and now Apple. Obviously there are concerns, especially during election years, but are we still not sitting in the global economy’s catbird seat? How could the U.S. still not be the first destination of global capital in search of safe (although historically low) prospective returns?
Well, Armageddon is not around the corner. I don’t believe in the imminent demise of the U.S. economy and its financial markets. But I’m afraid for them. Apparently so are many others, among them the IMF (International Monetary Fund), the CBO (Congressional Budget Office) and the BIS (Bank of International Settlements). I hold on my lap as I write this September afternoon the recently published annual reports for each of these authoritative and mainly non-political organizations which describe the financial balance sheets and prospective budgets of a plethora of developed and developing nations. The CBO of course is perhaps closest to our domestic ground in heralding the possibility of a fiscal train wreck over the next decade, but the IMF and BIS are no amateur oracles – they lend money and monitor financial transactions in the trillions. When all of them speak, we should listen and in the latest year they’re all speaking in unison. What they’re saying is that when it comes to debt and to the prospects for future debt, the U.S. is no “clean dirty shirt.” The U.S., in fact, is a serial offender, an addict whose habit extends beyond weed or cocaine and who frequently pleasures itself with budgetary crystal meth. Uncle Sam’s habit, say these respected agencies, will be a hard (and dangerous) one to break.
What standards or guidelines do their reports use and how best to explain them? Well, the three of them all try to compute what is called a “fiscal gap,” a deficit that must be closed either with spending cuts, tax hikes or a combination of both which keeps a country’s debt/GDP ratio under control. The fiscal gap differs from the “deficit” in that it includes future estimated entitlements such as Social Security, Medicare and Medicaid which may not show up in current expenditures. Each of the three reports target different debt/GDP ratios over varying periods of time and each has different assumptions as to a country’s real growth rate and real interest rate in future years. A reader can get confused trying to conflate the three of them into a homogeneous “fiscal gap” number. The important thing, though, from the standpoint of assessing the fiscal “damage” and a country’s relative addiction, is to view the U.S. in comparison to other countries, to view its apparently clean dirty shirt in the absence of its reserve currency status and its current financial advantages, and to point to a more distant future 10-20 years down the road at which time its debt addiction may be life, or certainly debt, threatening.
I’ve compiled all three studies into a picture chart perhaps familiar to many Investment Outlook readers. Several years ago I compared and contrasted countries from the standpoint of PIMCO’s “Ring of Fire.” It was a well-received Outlook if only because of the red flames and a reference to an old Johnny Cash song – “I fell into a burning ring of fire –I went down, down, down and the flames went higher.” Melodramatic, of course, but instructive nonetheless – perhaps prophetic. What the updated IMF, CBO and BIS “Ring” concludes is that the U.S. balance sheet, its deficit (y-axis) and its “fiscal gap” (x-axis), is in flames and that its fire department is apparently asleep at the station house.
To keep our debt/GDP ratio below the metaphorical combustion point of 212 degrees Fahrenheit, these studies (when averaged) suggest that we need to cut spending or raise taxes by 11% of GDP and rather quickly over the next five to 10 years. An 11% “fiscal gap” in terms of today’s economy speaks to a combination of spending cuts and taxes of $1.6 trillion per year! To put that into perspective, CBO has calculated that the expiration of the Bush tax cuts and other provisions would only reduce the deficit by a little more than $200 million. As well, the failed attempt at a budget compromise by Congress and the President – the so-called Super Committee “Grand Bargain”– was a $4 trillion battle plan over 10 years worth $400 billion a year. These studies, and the updated chart “Ring of Fire – Part 2!” suggests close to four times that amount in order to douse the inferno.
And to draw, dear reader, what I think are critical relative comparisons, look at who’s in that ring of fire alongside the U.S. There’s Japan, Greece, the U.K., Spain and France, sort of a rogues’ gallery of debtors. Look as well at which countries have their budgets and fiscal gaps under relative control – Canada, Italy, Brazil, Mexico, China and a host of other developing (many not shown) as opposed to developed countries. As a rule of thumb, developing countries have less debt and more underdeveloped financial systems. The U.S. and its fellow serial abusers have been inhaling debt’s methamphetamine crystals for some time now, and kicking the habit looks incredibly difficult.
As one of the “Ring” leaders, America’s abusive tendencies can be described in more ways than an 11% fiscal gap and a $1.6 trillion current dollar hole which needs to be filled. It’s well publicized that the U.S. has $16 trillion of outstanding debt, but its future liabilities in terms of Social Security, Medicare, and Medicaid are less tangible and therefore more difficult to comprehend. Suppose, though, that when paying payroll or income taxes for any of the above benefits, American citizens were issued a bond that they could cash in when required to pay those future bills. The bond would be worth more than the taxes paid because the benefits are increasing faster than inflation. The fact is that those bonds today would total nearly $60 trillion, a disparity that is four times our publicized number of outstanding debt. We owe, in other words, not only $16 trillion in outstanding, Treasury bonds and bills, but $60 trillion more. In my example, it just so happens that the $60 trillion comes not in the form of promises to pay bonds or bills at maturity, but the present value of future Social Security benefits, Medicaid expenses and expected costs for Medicare. Altogether, that’s a whopping total of 500% of GDP, dear reader, and I’m not making it up. Kindly consult the IMF and the CBO for verification. Kindly wonder, as well, how we’re going to get out of this mess.
Investment conclusions
So I posed the question earlier: How can the U.S. not be considered the first destination of global capital in search of safe (although historically low) returns? Easy answer: It will not be if we continue down the current road and don’t address our “fiscal gap.” IF we continue to close our eyes to existing 8% of GDP deficits, which when including Social Security, Medicaid and Medicare liabilities compose an average estimated 11% annual “fiscal gap,” then we will begin to resemble Greece before the turn of the next decade. Unless we begin to close this gap, then the inevitable result will be that our debt/GDP ratio will continue to rise, the Fed would print money to pay for the deficiency, inflation would follow and the dollar would inevitably decline. Bonds would be burned to a crisp and stocks would certainly be singed; only gold and real assets would thrive within the “Ring of Fire.”
If that be the case, the U.S. would no longer be in the catbird’s seat of global finance and there would be damage aplenty, not just to the U.S. but to the global financial system itself, a system which for 40 years has depended on the U.S. economy as the world’s consummate consumer and the dollar as the global medium of exchange. If the fiscal gap isn’t closed even ever so gradually over the next few years, then rating services, dollar reserve holding nations and bond managers embarrassed into being reborn as vigilantes may together force a resolution that ends in tears. It would be a scenario for the storybooks, that’s for sure, but one which in this instance, investors would want to forget. The damage would likely be beyond repair.
William H. Gross
Managing Director "
A good read I came across from my brokers enjoy :
October 2012
"Damages
William H. Gross
The U.S. has federal debt/GDP less than 100%, Aaa/AA+ credit ratings, and the benefit of being the world’s reserve currency.
Studies by the CBO, IMF and BIS (when averaged) suggest that we need to cut spending or raise taxes by 11% of GDP and rather quickly over the next five to 10 years.
Unless we begin to close this gap, then the inevitable result will be that our debt/GDP ratio will continue to rise, the Fed would print money to pay for the deficiency, inflation would follow, and the dollar would inevitably decline.
I have an amnesia of sorts. I remember almost nothing of my distant past – a condition which at the brink of my 69th year is neither fatal nor debilitating, but which leaves me anchorless without a direction home. Actually, I do recall some things, but they are hazy almost fairytale fantasies, filled with a lack of detail and usually bereft of emotional connections. I recall nothing specific of what parents, teachers or mentors said; no piece of advice; no life’s lessons. I’m sure there must have been some – I just can’t remember them. My life, therefore, reads like a storybook filled with innumerable déjà vu chapters, but ones which I can’t recall having read.
I had a family reunion of sorts a few weeks ago when my sister and I traveled to Sacramento to visit my failing brother – merely 18 months my senior. After his health issues had been discussed we drifted onto memory lane – talking about old times. Hadn’t I known that Dad had never been home, that he had spent months at a time overseas on business in Africa and South America? “Sort of, but not really,” I answered – a strange retort for a near adolescent child who should have remembered missing an absent father. Didn’t I know that our parents were drinkers; that Mom’s “gin-fizzes” usually began in the early afternoon and ended as our high school homework was being put to bed? “I guess not,” I replied, “but perhaps after the Depression and WWII, they had a reason to have a highball or two, or three.”
My lack of personal memory, I’ve decided, may reflect minor damage, much like a series of concussions suffered by a football athlete to his brain. Somewhere inside of my still intact protective helmet or skull, a physical or emotional collision may have occurred rendering a scar which prohibited proper healing. Too bad. And yet we all suffer damage in one way or another, do we not? How could it be otherwise in an imperfect world filled with parents, siblings and friends with concerns of their own for a majority of the day’s 24 hours? Sometimes the damage manifests itself in memory “loss” or repression, sometimes in self-flagellation or destructive behavior towards others. Sometimes it can be constructive as when those with damaged goods try to help others even more damaged. Whatever the reason, there are seven billion damaged human beings walking this earth.
For me, though, instead of losing my mind, I’ve simply lost my long-term memory. It’s a damnable state of affairs for sure – losing a chance to write your autobiography and any semblance of recalling what seems to have been a rather productive life. But I must tell you – it has its benefits. Each and every day starts with a relatively clean page, a “magic slate” of sorts where you can just lift the cellophane cover and completely erase minor transgressions, slights or perceived sins of others upon a somewhat fragile humanity. I get over most things and move on rather quickly. The French writer Jules Renard once speculated that “perhaps people with a detailed memory cannot have general ideas.” If so, I may be fortunate. So there are pluses and minuses to this memory thing, and like most of us, I add them up and move on. If that be the only disadvantage on my life’s scorecard – and there cannot be many – I am a lucky man indeed.
The ring of fire
In last month’s Investment Outlook I promised to write about damage of a financial kind – the potential debt peril – the long-term fiscal cliff that waits in the shadows of a New Normal U.S. economy which many claim is not doing that badly. After all, despite approaching the edge of 2012’s fiscal cliff with our 8% of GDP deficit, the U.S. is still considered the world’s “cleanest dirty shirt.” It has federal debt/GDP less than 100%, Aaa/AA+ credit ratings, and the benefit of being the world’s reserve currency – which means that most global financial transactions are denominated in dollars and that our interest rates are structurally lower than other Aaa countries because of it. We have world-class universities, a still relatively mobile labor force and apparently remain the beacon of technology – just witness the never-ending saga of Microsoft, Google and now Apple. Obviously there are concerns, especially during election years, but are we still not sitting in the global economy’s catbird seat? How could the U.S. still not be the first destination of global capital in search of safe (although historically low) prospective returns?
Well, Armageddon is not around the corner. I don’t believe in the imminent demise of the U.S. economy and its financial markets. But I’m afraid for them. Apparently so are many others, among them the IMF (International Monetary Fund), the CBO (Congressional Budget Office) and the BIS (Bank of International Settlements). I hold on my lap as I write this September afternoon the recently published annual reports for each of these authoritative and mainly non-political organizations which describe the financial balance sheets and prospective budgets of a plethora of developed and developing nations. The CBO of course is perhaps closest to our domestic ground in heralding the possibility of a fiscal train wreck over the next decade, but the IMF and BIS are no amateur oracles – they lend money and monitor financial transactions in the trillions. When all of them speak, we should listen and in the latest year they’re all speaking in unison. What they’re saying is that when it comes to debt and to the prospects for future debt, the U.S. is no “clean dirty shirt.” The U.S., in fact, is a serial offender, an addict whose habit extends beyond weed or cocaine and who frequently pleasures itself with budgetary crystal meth. Uncle Sam’s habit, say these respected agencies, will be a hard (and dangerous) one to break.
What standards or guidelines do their reports use and how best to explain them? Well, the three of them all try to compute what is called a “fiscal gap,” a deficit that must be closed either with spending cuts, tax hikes or a combination of both which keeps a country’s debt/GDP ratio under control. The fiscal gap differs from the “deficit” in that it includes future estimated entitlements such as Social Security, Medicare and Medicaid which may not show up in current expenditures. Each of the three reports target different debt/GDP ratios over varying periods of time and each has different assumptions as to a country’s real growth rate and real interest rate in future years. A reader can get confused trying to conflate the three of them into a homogeneous “fiscal gap” number. The important thing, though, from the standpoint of assessing the fiscal “damage” and a country’s relative addiction, is to view the U.S. in comparison to other countries, to view its apparently clean dirty shirt in the absence of its reserve currency status and its current financial advantages, and to point to a more distant future 10-20 years down the road at which time its debt addiction may be life, or certainly debt, threatening.
I’ve compiled all three studies into a picture chart perhaps familiar to many Investment Outlook readers. Several years ago I compared and contrasted countries from the standpoint of PIMCO’s “Ring of Fire.” It was a well-received Outlook if only because of the red flames and a reference to an old Johnny Cash song – “I fell into a burning ring of fire –I went down, down, down and the flames went higher.” Melodramatic, of course, but instructive nonetheless – perhaps prophetic. What the updated IMF, CBO and BIS “Ring” concludes is that the U.S. balance sheet, its deficit (y-axis) and its “fiscal gap” (x-axis), is in flames and that its fire department is apparently asleep at the station house.
To keep our debt/GDP ratio below the metaphorical combustion point of 212 degrees Fahrenheit, these studies (when averaged) suggest that we need to cut spending or raise taxes by 11% of GDP and rather quickly over the next five to 10 years. An 11% “fiscal gap” in terms of today’s economy speaks to a combination of spending cuts and taxes of $1.6 trillion per year! To put that into perspective, CBO has calculated that the expiration of the Bush tax cuts and other provisions would only reduce the deficit by a little more than $200 million. As well, the failed attempt at a budget compromise by Congress and the President – the so-called Super Committee “Grand Bargain”– was a $4 trillion battle plan over 10 years worth $400 billion a year. These studies, and the updated chart “Ring of Fire – Part 2!” suggests close to four times that amount in order to douse the inferno.
And to draw, dear reader, what I think are critical relative comparisons, look at who’s in that ring of fire alongside the U.S. There’s Japan, Greece, the U.K., Spain and France, sort of a rogues’ gallery of debtors. Look as well at which countries have their budgets and fiscal gaps under relative control – Canada, Italy, Brazil, Mexico, China and a host of other developing (many not shown) as opposed to developed countries. As a rule of thumb, developing countries have less debt and more underdeveloped financial systems. The U.S. and its fellow serial abusers have been inhaling debt’s methamphetamine crystals for some time now, and kicking the habit looks incredibly difficult.
As one of the “Ring” leaders, America’s abusive tendencies can be described in more ways than an 11% fiscal gap and a $1.6 trillion current dollar hole which needs to be filled. It’s well publicized that the U.S. has $16 trillion of outstanding debt, but its future liabilities in terms of Social Security, Medicare, and Medicaid are less tangible and therefore more difficult to comprehend. Suppose, though, that when paying payroll or income taxes for any of the above benefits, American citizens were issued a bond that they could cash in when required to pay those future bills. The bond would be worth more than the taxes paid because the benefits are increasing faster than inflation. The fact is that those bonds today would total nearly $60 trillion, a disparity that is four times our publicized number of outstanding debt. We owe, in other words, not only $16 trillion in outstanding, Treasury bonds and bills, but $60 trillion more. In my example, it just so happens that the $60 trillion comes not in the form of promises to pay bonds or bills at maturity, but the present value of future Social Security benefits, Medicaid expenses and expected costs for Medicare. Altogether, that’s a whopping total of 500% of GDP, dear reader, and I’m not making it up. Kindly consult the IMF and the CBO for verification. Kindly wonder, as well, how we’re going to get out of this mess.
Investment conclusions
So I posed the question earlier: How can the U.S. not be considered the first destination of global capital in search of safe (although historically low) returns? Easy answer: It will not be if we continue down the current road and don’t address our “fiscal gap.” IF we continue to close our eyes to existing 8% of GDP deficits, which when including Social Security, Medicaid and Medicare liabilities compose an average estimated 11% annual “fiscal gap,” then we will begin to resemble Greece before the turn of the next decade. Unless we begin to close this gap, then the inevitable result will be that our debt/GDP ratio will continue to rise, the Fed would print money to pay for the deficiency, inflation would follow and the dollar would inevitably decline. Bonds would be burned to a crisp and stocks would certainly be singed; only gold and real assets would thrive within the “Ring of Fire.”
If that be the case, the U.S. would no longer be in the catbird’s seat of global finance and there would be damage aplenty, not just to the U.S. but to the global financial system itself, a system which for 40 years has depended on the U.S. economy as the world’s consummate consumer and the dollar as the global medium of exchange. If the fiscal gap isn’t closed even ever so gradually over the next few years, then rating services, dollar reserve holding nations and bond managers embarrassed into being reborn as vigilantes may together force a resolution that ends in tears. It would be a scenario for the storybooks, that’s for sure, but one which in this instance, investors would want to forget. The damage would likely be beyond repair.
William H. Gross
Managing Director "
Monday, 1 October 2012
Xstrata Recommends Glencore Bid After Winning Assurance on Board
Oct. 1 (Bloomberg) --
"Xstrata Plc’s board recommended shareholders vote in favor of a $33 billion sweetened takeover offer by Glencore International Plc after gaining assurances over the combined company’s board and decoupling approval of incentive payments from a vote on the offer.
“We have decided to decouple the resolutions to approve the merger from the resolution to approve the revised management incentive arrangements,” Xstrata Chairman John Bond said in a statement today. This will “enable shareholders to vote in line with their convictions” without influencing their voting on the Glencore combination, he said.
Glencore last month raised its offer to 3.05 of its shares for each in Xstrata from 2.8, after investors said the original bid undervalued the Swiss mining company. The Baar, Switzerland- based commodities trader invited Xstrata to propose changes to the bonus package to ensure shareholder backing for the year’s biggest takeover.
Xstrata, the largest exporter of thermal coal, delayed its response to Glencore’s revised proposal for a week to resolve issues over management and to determine who will take a seat on the combined board vacated by its Chief Executive Officer Mick Davis.
Sweetened Bid
The sweetened bid followed a threat by Qatar’s sovereign wealth fund, Xstrata’s largest holder after Glencore, to block the deal in the absence of a higher offer. Qatar Holding LLC said in June that a bid of 3.25 shares would be “more appropriate.” As little as 16.5 percent of investors can prevent the merger because Glencore can’t vote its 34 percent stake.
The combination of the two commodity giants, five years in the making, would couple Glencore’s global trading operations with Xstrata’s coal, copper, and zinc mines, creating the fourth-largest mining company.
A successful acquisition would be the second-largest in the mining industry, behind Rio Tinto Group’s $38 billion purchase of Canada’s Alcan Inc. in 2007. Global mining deals swelled to $98 billion last year, the highest volume since 2007 according to data compiled by Bloomberg, as commodity demand in developing nations and the deteriorating quality of mineral reserves pushed producers to seek greater economies of scale.
To contact the reporter on this story: Firat Kayakiran in London at fkayakiran@bloomberg.net "
Steven
Steven Morris CA (SA)
Mobie : 083 943 1858
Fax: 086 671 2498
E-Mail: steven@global.co.za
Website: www.stevenmorris.co.za
"Xstrata Plc’s board recommended shareholders vote in favor of a $33 billion sweetened takeover offer by Glencore International Plc after gaining assurances over the combined company’s board and decoupling approval of incentive payments from a vote on the offer.
“We have decided to decouple the resolutions to approve the merger from the resolution to approve the revised management incentive arrangements,” Xstrata Chairman John Bond said in a statement today. This will “enable shareholders to vote in line with their convictions” without influencing their voting on the Glencore combination, he said.
Glencore last month raised its offer to 3.05 of its shares for each in Xstrata from 2.8, after investors said the original bid undervalued the Swiss mining company. The Baar, Switzerland- based commodities trader invited Xstrata to propose changes to the bonus package to ensure shareholder backing for the year’s biggest takeover.
Xstrata, the largest exporter of thermal coal, delayed its response to Glencore’s revised proposal for a week to resolve issues over management and to determine who will take a seat on the combined board vacated by its Chief Executive Officer Mick Davis.
Sweetened Bid
The sweetened bid followed a threat by Qatar’s sovereign wealth fund, Xstrata’s largest holder after Glencore, to block the deal in the absence of a higher offer. Qatar Holding LLC said in June that a bid of 3.25 shares would be “more appropriate.” As little as 16.5 percent of investors can prevent the merger because Glencore can’t vote its 34 percent stake.
The combination of the two commodity giants, five years in the making, would couple Glencore’s global trading operations with Xstrata’s coal, copper, and zinc mines, creating the fourth-largest mining company.
A successful acquisition would be the second-largest in the mining industry, behind Rio Tinto Group’s $38 billion purchase of Canada’s Alcan Inc. in 2007. Global mining deals swelled to $98 billion last year, the highest volume since 2007 according to data compiled by Bloomberg, as commodity demand in developing nations and the deteriorating quality of mineral reserves pushed producers to seek greater economies of scale.
To contact the reporter on this story: Firat Kayakiran in London at fkayakiran@bloomberg.net "
Steven
Steven Morris CA (SA)
Mobie : 083 943 1858
Fax: 086 671 2498
E-Mail: steven@global.co.za
Website: www.stevenmorris.co.za
Sunday, 30 September 2012
Glencore Xstrata Deal !!
Got a e-mail from FT on Line to say the deal in principal has been apporved, Tomorrow it should be announced !!
Tomorrow will be an interesting day !!
Tomorrow will be an interesting day !!
Thursday, 27 September 2012
Asian Stocks Advance With Aussie on Prospect for More Stimulus
Sept. 27 (Bloomberg) --
"Asian stocks rebounded from the biggest slide in two months and the Australian dollar rose as China’s industrial profits fell for a fifth month, increasing speculation the government will do more to support economic growth. Emerging-market currencies strengthened.
The MSCI Asia Pacific Index climbed 0.4 percent at 1:45 p.m. in Tokyo, as the Shanghai Composite Index added 0.3 percent. Futures on the Standard & Poor’s 500 Index advanced 0.4 percent while contracts on the FTSE 100 Index added 0.2 percent. The so-called Aussie, Malaysia’s ringgit and the Philippine peso rose at least 0.3 percent against the dollar.
A government report showed Chinese industrial companies’ profits dropped in August and a Bank of Korea index of manufacturers confidence for October was at 72 from 75 the previous month, after reaching 70 in August, the lowest level since May 2009. China’s central bank added a net 365 billion yuan ($58 billion) to the financial system this week, the highest in Bloomberg data going back to 2008, as cash demand rises before a weeklong holiday next week.
“The positive would be a big China stimulus package that could send markets higher,” said Andrew Pease, Sydney-based chief investment strategist at Russell Investment Group, which manages about $150 billion. “The signals are that they are not really itching to do that.”
China Overseas
About five stocks gained for every four that fell on the MSCI Asia Pacific Index, which climbed 3.7 percent this quarter through yesterday as central banks in Europe, the U.S., Japan and China took action to boost their economies. The gauge slumped 1.4 percent yesterday, the most since July 23.
China Overseas Land & Investment Ltd., the country’s biggest developer by market value listed in Hong Kong, rose 0.5 percent. Komatsu Ltd., a maker of construction equipment that gets about 15 percent of its sales in China, gained 0.3 percent.
Baoshan Iron & Steel Co., the nation’s largest publicly traded steelmaker, fell 0.2 percent as the company suspended production at a Chinese plant after demand dropped for slabs used to make ships and bridges. China is unlikely to introduce any large stimulus plans on infrastructure investment in the near term because economic development is already “unbalanced,” a company executive said at a conference today.
Aussie, Kiwi
The Australian dollar was at $1.0398, rebounding from a two-week low, while the country’s bonds pared gains. New Zealand’s dollar added 0.2 percent after data showed the business outlook improved this month. The euro was 0.3 percent from a two-week low against the dollar and was last at $1.2876.
Asian currencies rose toward a four-month high, led by the Philippine peso and Malaysia’s ringgit, on optimism regional economies have scope to combat slowdowns by boosting state spending. The Bloomberg-JPMorgan Asia Dollar Index, which tracks the region’s 10 most-active currencies excluding the yen, was at 116.80. The gauge reached 117.06 on Sept. 21, the highest level since May 2.
“The Philippines and Malaysia would have the fiscal space to deal with the slowdown from the external side,” said Enrico Tanuwidjaja, an economist at Royal Bank of Scotland Group Plc. “I don’t see a massive gain in Asian currencies. Globally, markets are still looking at the developments in Europe.”
A final reading of the consumer confidence index in the euro area probably dropped to minus 25.9 this month, the lowest since May 2009, according to economists surveyed by Bloomberg News before the data due today, while a U.S. report may show orders for durable goods orders fell.
Euro Prospect
The exit of one or more member states from the euro won’t destroy the monetary union or the project of European integration, Czech President Vaclav Klaus said. An accord that paved the way to cut Ireland’s legacy bank debt won’t unravel, said Irish deputy prime minister Eamon Gilmore. Germany, the Netherlands and Finland indicated a retreat from the agreement to allow the euro-area bailout fund to recapitalize banks.
U.S. stocks fell for a fifth day yesterday in the longest slump since July as protests against European austerity measures fueled concern the region’s fiscal crisis may escalate. Spanish protesters yesterday marched for a second night in Madrid, calling on Prime Minister Mariano Rajoy to reverse budget cuts, while police in Athens dispersed protestors with tear gas.
The S&P 500 has erased all its gains since the Federal Reserve said Sept. 13 that it will undertake a third round of quantitative easing and probably hold the federal funds rate near zero until at least the middle of 2015.
Worldwide corporate issuance of $949 billion since June 30 brings the total for the year to $2.9 trillion, the second- fastest pace on record, according to data compiled by Bloomberg, as unprecedented investor demand allows issuers to refinance debt with borrowing costs at all-time-lows. "
To contact the reporters on this story: Glenys Sim in Singapore at gsim4@bloomberg.net ;
===
Steven
Steven Morris CA (SA)
Mobie : 083 943 1858
Fax: 086 671 2498
E-Mail: steven@global.co.za
Website: www.stevenmorris.co.za
"Asian stocks rebounded from the biggest slide in two months and the Australian dollar rose as China’s industrial profits fell for a fifth month, increasing speculation the government will do more to support economic growth. Emerging-market currencies strengthened.
The MSCI Asia Pacific Index climbed 0.4 percent at 1:45 p.m. in Tokyo, as the Shanghai Composite Index added 0.3 percent. Futures on the Standard & Poor’s 500 Index advanced 0.4 percent while contracts on the FTSE 100 Index added 0.2 percent. The so-called Aussie, Malaysia’s ringgit and the Philippine peso rose at least 0.3 percent against the dollar.
A government report showed Chinese industrial companies’ profits dropped in August and a Bank of Korea index of manufacturers confidence for October was at 72 from 75 the previous month, after reaching 70 in August, the lowest level since May 2009. China’s central bank added a net 365 billion yuan ($58 billion) to the financial system this week, the highest in Bloomberg data going back to 2008, as cash demand rises before a weeklong holiday next week.
“The positive would be a big China stimulus package that could send markets higher,” said Andrew Pease, Sydney-based chief investment strategist at Russell Investment Group, which manages about $150 billion. “The signals are that they are not really itching to do that.”
China Overseas
About five stocks gained for every four that fell on the MSCI Asia Pacific Index, which climbed 3.7 percent this quarter through yesterday as central banks in Europe, the U.S., Japan and China took action to boost their economies. The gauge slumped 1.4 percent yesterday, the most since July 23.
China Overseas Land & Investment Ltd., the country’s biggest developer by market value listed in Hong Kong, rose 0.5 percent. Komatsu Ltd., a maker of construction equipment that gets about 15 percent of its sales in China, gained 0.3 percent.
Baoshan Iron & Steel Co., the nation’s largest publicly traded steelmaker, fell 0.2 percent as the company suspended production at a Chinese plant after demand dropped for slabs used to make ships and bridges. China is unlikely to introduce any large stimulus plans on infrastructure investment in the near term because economic development is already “unbalanced,” a company executive said at a conference today.
Aussie, Kiwi
The Australian dollar was at $1.0398, rebounding from a two-week low, while the country’s bonds pared gains. New Zealand’s dollar added 0.2 percent after data showed the business outlook improved this month. The euro was 0.3 percent from a two-week low against the dollar and was last at $1.2876.
Asian currencies rose toward a four-month high, led by the Philippine peso and Malaysia’s ringgit, on optimism regional economies have scope to combat slowdowns by boosting state spending. The Bloomberg-JPMorgan Asia Dollar Index, which tracks the region’s 10 most-active currencies excluding the yen, was at 116.80. The gauge reached 117.06 on Sept. 21, the highest level since May 2.
“The Philippines and Malaysia would have the fiscal space to deal with the slowdown from the external side,” said Enrico Tanuwidjaja, an economist at Royal Bank of Scotland Group Plc. “I don’t see a massive gain in Asian currencies. Globally, markets are still looking at the developments in Europe.”
A final reading of the consumer confidence index in the euro area probably dropped to minus 25.9 this month, the lowest since May 2009, according to economists surveyed by Bloomberg News before the data due today, while a U.S. report may show orders for durable goods orders fell.
Euro Prospect
The exit of one or more member states from the euro won’t destroy the monetary union or the project of European integration, Czech President Vaclav Klaus said. An accord that paved the way to cut Ireland’s legacy bank debt won’t unravel, said Irish deputy prime minister Eamon Gilmore. Germany, the Netherlands and Finland indicated a retreat from the agreement to allow the euro-area bailout fund to recapitalize banks.
U.S. stocks fell for a fifth day yesterday in the longest slump since July as protests against European austerity measures fueled concern the region’s fiscal crisis may escalate. Spanish protesters yesterday marched for a second night in Madrid, calling on Prime Minister Mariano Rajoy to reverse budget cuts, while police in Athens dispersed protestors with tear gas.
The S&P 500 has erased all its gains since the Federal Reserve said Sept. 13 that it will undertake a third round of quantitative easing and probably hold the federal funds rate near zero until at least the middle of 2015.
Worldwide corporate issuance of $949 billion since June 30 brings the total for the year to $2.9 trillion, the second- fastest pace on record, according to data compiled by Bloomberg, as unprecedented investor demand allows issuers to refinance debt with borrowing costs at all-time-lows. "
To contact the reporters on this story: Glenys Sim in Singapore at gsim4@bloomberg.net ;
===
Steven
Steven Morris CA (SA)
Mobie : 083 943 1858
Fax: 086 671 2498
E-Mail: steven@global.co.za
Website: www.stevenmorris.co.za
Tuesday, 25 September 2012
Not all growth is equal
Another great article from PSG :
"In our strive toward continual improvement, we unashamedly look for guidance and wisdom from some of the world’s leading investors and historians which can then be applied and adapted to our methodology of investing. In many cases one needs to look no further than the Sage of Omaha.
In his 2007 letter to shareholders, Mr. Buffett fondly writes about See’s Candy, a business that has managed to deliver excellent growth while requiring very little in the form of additional capital.
See’s Candy was acquired for $25m in 1972 and at the time had invested capital of $8m, generating $5m in pre-tax earnings, a 60% pre-tax return on capital.
Fast forward to 2007 and See’s made pre-tax profits of $82m while the capital required to run the business amounted to $40m. On a cumulative basis the business earned a total of $1.35bn in pre-tax profits over the years, while only requiring $32m in the form of additional capital. All of the $1.35bn earned, except for the $32m, was “up-streamed” to See’s owner, Berkshire Hathaway to be used at their discretion, mostly to buy and grow other attractive businesses.
In Buffett’s own words, “Just as Adam and Eve kick-started an activity that led to six billion humans, See’s has given birth to multiple new streams of cash for us. (The biblical command to “be fruitful and multiply” is one we take seriously at Berkshire.)” – Berkshire Shareholder Letter 2007
As an investor, the See’s example appears to be the holy grail of investing; only paying an additional $32m to receive $1.3bn in dividends!
Behind See’s success were its strong brand positioning, which afforded the company extraordinary pricing power, the fact that the product was sold for cash, eliminating debtors, and its short production and distribution cycle, which minimized cash tied up in stock.
However, as growing companies generally have significant working capital and fixed infrastructure investment requirements, according to Buffett the typical company (as shown in table 1) would spend $400m in additional capital to grow earnings from $5m to $82m. While each additional dollar of invested capital generated $42 pre-tax earnings for See’s, company B only made an additional $3.4 for each dollar invested.
Company B’s 20% return on invested capital in 2007 is certainly not to be sneezed at, but the example clearly demonstrates the value inherent in growth for a capital light business.
While there aren’t many See’s available in today’s market, the investment team at PSG Asset Management is on the continual lookout for and proud owner of companies with strong sustainable competitive advantages, that are able to show capital light growth. In most cases these companies have exceptional management teams that are aligned to shareholders and not shy to part with excess cash resources should available investment opportunities either not strengthen their existing moat or satisfy shareholders’ stringent return requirements, as after all, not all growth is equal. "
REF : Philipp Wörz
"The PSG Angle is an electronic newsletter of PSG Asset Management. "
"In our strive toward continual improvement, we unashamedly look for guidance and wisdom from some of the world’s leading investors and historians which can then be applied and adapted to our methodology of investing. In many cases one needs to look no further than the Sage of Omaha.
In his 2007 letter to shareholders, Mr. Buffett fondly writes about See’s Candy, a business that has managed to deliver excellent growth while requiring very little in the form of additional capital.
See’s Candy was acquired for $25m in 1972 and at the time had invested capital of $8m, generating $5m in pre-tax earnings, a 60% pre-tax return on capital.
Fast forward to 2007 and See’s made pre-tax profits of $82m while the capital required to run the business amounted to $40m. On a cumulative basis the business earned a total of $1.35bn in pre-tax profits over the years, while only requiring $32m in the form of additional capital. All of the $1.35bn earned, except for the $32m, was “up-streamed” to See’s owner, Berkshire Hathaway to be used at their discretion, mostly to buy and grow other attractive businesses.
In Buffett’s own words, “Just as Adam and Eve kick-started an activity that led to six billion humans, See’s has given birth to multiple new streams of cash for us. (The biblical command to “be fruitful and multiply” is one we take seriously at Berkshire.)” – Berkshire Shareholder Letter 2007
As an investor, the See’s example appears to be the holy grail of investing; only paying an additional $32m to receive $1.3bn in dividends!
Behind See’s success were its strong brand positioning, which afforded the company extraordinary pricing power, the fact that the product was sold for cash, eliminating debtors, and its short production and distribution cycle, which minimized cash tied up in stock.
However, as growing companies generally have significant working capital and fixed infrastructure investment requirements, according to Buffett the typical company (as shown in table 1) would spend $400m in additional capital to grow earnings from $5m to $82m. While each additional dollar of invested capital generated $42 pre-tax earnings for See’s, company B only made an additional $3.4 for each dollar invested.
Company B’s 20% return on invested capital in 2007 is certainly not to be sneezed at, but the example clearly demonstrates the value inherent in growth for a capital light business.
While there aren’t many See’s available in today’s market, the investment team at PSG Asset Management is on the continual lookout for and proud owner of companies with strong sustainable competitive advantages, that are able to show capital light growth. In most cases these companies have exceptional management teams that are aligned to shareholders and not shy to part with excess cash resources should available investment opportunities either not strengthen their existing moat or satisfy shareholders’ stringent return requirements, as after all, not all growth is equal. "
REF : Philipp Wörz
"The PSG Angle is an electronic newsletter of PSG Asset Management. "
Friday, 21 September 2012
Apple Poised to Sell 10 Million IPhones in Record Debut
Sept. 21 (Bloomberg) --
Apple Inc. is poised for a record iPhone 5 debut and may not be able to keep up with demand as customers lined up in Sydney, Tokyo and New York to pick up the latest model of its top-selling product.
Global sales started at the Apple Store in Sydney’s George Street at 8 a.m., as about 500 people waited to buy the device. Besides Australia, the phone will debut in Japan, Hong Kong, Singapore, France, Germany, the U.K., Canada and the U.S. today. With a new wireless contract, the device costs $199, $299 and $399 in the U.S., depending on the amount of memory.
Pedro Mendez, a 21-year-old student from Elmhurst, New York, got in line at Apple’s flagship store on Fifth Avenue in New York on Sept. 18 to make sure he’d get the new phone.
“It’s something you have to do,” said Mendez, who plans to sell his iPhone 4S to a friend. “You stand in line, you see everyone the next day at school and talk about it.”
The crowds reinforce estimates from analysts that the iPhone 5 will be the largest consumer-electronics debut in history. Apple may sell as many as 10 million iPhones during the weekend sales rush, according to Gene Munster, an analyst at Piper Jaffray Cos. Because Apple generates about two-thirds of its profit from the iPhone, a successful introduction is critical to fuel growth that has led investors to catapult Cupertino, California-based Apple to the world’s most valuable company.
‘Cool Kids’
“We’ve never seen anything like this before,” said Andrew McAfee, principal research scientist at Massachusetts Institute of Technology’s Center for Digital Business. “It used to be that with tech products the nerds got them, obsessed about them, and talked about them, and the cool kids wanted no part of that conversation. That’s just not true anymore.”
Apple may have trouble keeping up with initial demand because of supply shortages of components such as in-cell screen displays, according to Barclays Plc. Already, the company had to push out some deliveries to October after early online purchases topped 2 million in 24 hours, double the record set last year with the iPhone 4S.
Apple is introducing the iPhone across the world faster than any of the device’s five previous debuts. The iPhone will go on sale in 22 more countries on Sept. 28, Apple said, and it will be in more than 100 countries by the end of the year.
Steve Wozniak, who co-founded Apple with Steve Jobs, was among those waiting at an Apple Store before the opening. He wrote on Twitter that he was in line in Australia to pick up the new iPhone.
Sydney, Tokyo
In Sydney, the first 11 places in line were taken up by companies using the sale to promote their own business. Some of them were there since Sept. 18, and were paid as much as A$200 ($209) a day to stand and advertise for business. Apple employees in blue T-shirts applauded as the first shoppers got into the store while police tried to manage the crowd outside.
At the Apple Store in Tokyo’s shopping district Ginza, about 750 people had lined up by 8 a.m.
“I’ve been taking time-offs since Saturday and waiting,” said Mitsuya Hirose, 37, who was the first in line. “When I bought the iPad, I was the third person in line, so I am happy now,” said Hirose, who bought his first iPhone three years ago.
In Hong Kong, hundreds of people jammed the entrance of the Apple Store in Hong Kong’s IFC mall, chanting and cheering as customers waited to be let in. Police and security guards were standing by as the store opened at 8 a.m., two hours earlier than usual. Only those customers who registered online to reserve a handset were allowed in.
Stolen Phones
Among them was Michael Chan, a 29-year-old airline industry worker, who called in sick at work to be able to buy two 64 GB black-colored iPhones. Chan said he had bought all previous versions of the iPhone, since they were introduced in 2007.
At three outlets in western Japan’s Osaka, 191 iPhone 5s were stolen earlier today, Kyodo News reported, citing police at the prefecture. A resident near one of the outlets saw three men break into the store and then leave in a car, the news agency said. Thefts were also reported from Kobe City, Kyodo said, citing local police.
The new iPhone has a bigger screen, lightweight body design and faster microprocessor, and is compatible with speedier wireless networks. Software upgrades include new mapping and turn-by-turn navigation features.
Technology gadget reviewers mostly praised the new device, especially for its swifter wireless speeds that improve Web browsing and other data-hungry tasks. One criticism was the new mapping features, which don’t include details on how to navigate public transportation.
Android Competition
On Sept. 19, two days before the introduction, about 17 people were lined up at Apple’s Fifth Avenue store in New York.
The lines around the world show how customers remain loyal to Apple once they buy one of its products, said Giri Cherukuri, a portfolio manager for Oakbrook Investments LLC, which owns Apple shares.
“The longer people are in the Apple ecosystem, the harder it is for them to switch away,” he said.
Apple shares fell less than 1 percent to $698.70 at the close in New York. The stock has risen 73 percent this year.
Apple is vying with rivals including Samsung Electronics Co., HTC Corp. and Google Inc.’s Motorola Mobility for dominance in a global smartphone market that reached $219.1 billion last year, according to data compiled by Bloomberg Industries. Those manufacturers primarily use Google’s Android operating system, which is the world’s most popular mobile software. Microsoft Corp., which has been working closely with Nokia Oyj, also is introducing a new mobile version of Windows later this year.
IPhone’s Popularity
The benefits of a successful iPhone debut extend beyond Apple. Suppliers including Qualcomm Inc., Broadcom Corp., LG Display and Hon Hai Precision Industry Co., the owner of Foxconn Technology Co., also will see a gain, according to Barclays.
To take advantage of the iPhone’s popularity, some of the first to get in line were there for the publicity.
In what may be the biggest consumer electronics debut in history, more than 200 people are expected to hold places in line for strangers at stores around New York and the San Francisco bay area for the iPhone 5, Bloomberg.com reported on its Tech Blog. These arrangements were made on the website TaskRabbit Inc., where a user can find workers to do odd jobs such as assembling Ikea furniture or waiting in long lines.
Joseph Cruz, 19, said Gazelle.com offered to pay for his iPhone, along with four others in line in New York, if he agreed to wear the company’s T-shirts and wrist bands.
“I’ve just got to wear this stuff for the whole week and they’ll pay for my iPhone,” he said. “I was going to stand out here regardless.”
To contact the reporters on this story: Adam Satariano in San Francisco at asatariano1@bloomberg.net ; Ryan Faughnder in New York at rfaughnder@bloomberg.net
To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net
===
Steven
Steven Morris CA (SA)
Mobie : 083 943 1858
Fax: 086 671 2498
E-Mail: steven@global.co.za
Website: www.stevenmorris.co.za
Apple Inc. is poised for a record iPhone 5 debut and may not be able to keep up with demand as customers lined up in Sydney, Tokyo and New York to pick up the latest model of its top-selling product.
Global sales started at the Apple Store in Sydney’s George Street at 8 a.m., as about 500 people waited to buy the device. Besides Australia, the phone will debut in Japan, Hong Kong, Singapore, France, Germany, the U.K., Canada and the U.S. today. With a new wireless contract, the device costs $199, $299 and $399 in the U.S., depending on the amount of memory.
Pedro Mendez, a 21-year-old student from Elmhurst, New York, got in line at Apple’s flagship store on Fifth Avenue in New York on Sept. 18 to make sure he’d get the new phone.
“It’s something you have to do,” said Mendez, who plans to sell his iPhone 4S to a friend. “You stand in line, you see everyone the next day at school and talk about it.”
The crowds reinforce estimates from analysts that the iPhone 5 will be the largest consumer-electronics debut in history. Apple may sell as many as 10 million iPhones during the weekend sales rush, according to Gene Munster, an analyst at Piper Jaffray Cos. Because Apple generates about two-thirds of its profit from the iPhone, a successful introduction is critical to fuel growth that has led investors to catapult Cupertino, California-based Apple to the world’s most valuable company.
‘Cool Kids’
“We’ve never seen anything like this before,” said Andrew McAfee, principal research scientist at Massachusetts Institute of Technology’s Center for Digital Business. “It used to be that with tech products the nerds got them, obsessed about them, and talked about them, and the cool kids wanted no part of that conversation. That’s just not true anymore.”
Apple may have trouble keeping up with initial demand because of supply shortages of components such as in-cell screen displays, according to Barclays Plc. Already, the company had to push out some deliveries to October after early online purchases topped 2 million in 24 hours, double the record set last year with the iPhone 4S.
Apple is introducing the iPhone across the world faster than any of the device’s five previous debuts. The iPhone will go on sale in 22 more countries on Sept. 28, Apple said, and it will be in more than 100 countries by the end of the year.
Steve Wozniak, who co-founded Apple with Steve Jobs, was among those waiting at an Apple Store before the opening. He wrote on Twitter that he was in line in Australia to pick up the new iPhone.
Sydney, Tokyo
In Sydney, the first 11 places in line were taken up by companies using the sale to promote their own business. Some of them were there since Sept. 18, and were paid as much as A$200 ($209) a day to stand and advertise for business. Apple employees in blue T-shirts applauded as the first shoppers got into the store while police tried to manage the crowd outside.
At the Apple Store in Tokyo’s shopping district Ginza, about 750 people had lined up by 8 a.m.
“I’ve been taking time-offs since Saturday and waiting,” said Mitsuya Hirose, 37, who was the first in line. “When I bought the iPad, I was the third person in line, so I am happy now,” said Hirose, who bought his first iPhone three years ago.
In Hong Kong, hundreds of people jammed the entrance of the Apple Store in Hong Kong’s IFC mall, chanting and cheering as customers waited to be let in. Police and security guards were standing by as the store opened at 8 a.m., two hours earlier than usual. Only those customers who registered online to reserve a handset were allowed in.
Stolen Phones
Among them was Michael Chan, a 29-year-old airline industry worker, who called in sick at work to be able to buy two 64 GB black-colored iPhones. Chan said he had bought all previous versions of the iPhone, since they were introduced in 2007.
At three outlets in western Japan’s Osaka, 191 iPhone 5s were stolen earlier today, Kyodo News reported, citing police at the prefecture. A resident near one of the outlets saw three men break into the store and then leave in a car, the news agency said. Thefts were also reported from Kobe City, Kyodo said, citing local police.
The new iPhone has a bigger screen, lightweight body design and faster microprocessor, and is compatible with speedier wireless networks. Software upgrades include new mapping and turn-by-turn navigation features.
Technology gadget reviewers mostly praised the new device, especially for its swifter wireless speeds that improve Web browsing and other data-hungry tasks. One criticism was the new mapping features, which don’t include details on how to navigate public transportation.
Android Competition
On Sept. 19, two days before the introduction, about 17 people were lined up at Apple’s Fifth Avenue store in New York.
The lines around the world show how customers remain loyal to Apple once they buy one of its products, said Giri Cherukuri, a portfolio manager for Oakbrook Investments LLC, which owns Apple shares.
“The longer people are in the Apple ecosystem, the harder it is for them to switch away,” he said.
Apple shares fell less than 1 percent to $698.70 at the close in New York. The stock has risen 73 percent this year.
Apple is vying with rivals including Samsung Electronics Co., HTC Corp. and Google Inc.’s Motorola Mobility for dominance in a global smartphone market that reached $219.1 billion last year, according to data compiled by Bloomberg Industries. Those manufacturers primarily use Google’s Android operating system, which is the world’s most popular mobile software. Microsoft Corp., which has been working closely with Nokia Oyj, also is introducing a new mobile version of Windows later this year.
IPhone’s Popularity
The benefits of a successful iPhone debut extend beyond Apple. Suppliers including Qualcomm Inc., Broadcom Corp., LG Display and Hon Hai Precision Industry Co., the owner of Foxconn Technology Co., also will see a gain, according to Barclays.
To take advantage of the iPhone’s popularity, some of the first to get in line were there for the publicity.
In what may be the biggest consumer electronics debut in history, more than 200 people are expected to hold places in line for strangers at stores around New York and the San Francisco bay area for the iPhone 5, Bloomberg.com reported on its Tech Blog. These arrangements were made on the website TaskRabbit Inc., where a user can find workers to do odd jobs such as assembling Ikea furniture or waiting in long lines.
Joseph Cruz, 19, said Gazelle.com offered to pay for his iPhone, along with four others in line in New York, if he agreed to wear the company’s T-shirts and wrist bands.
“I’ve just got to wear this stuff for the whole week and they’ll pay for my iPhone,” he said. “I was going to stand out here regardless.”
To contact the reporters on this story: Adam Satariano in San Francisco at asatariano1@bloomberg.net ; Ryan Faughnder in New York at rfaughnder@bloomberg.net
To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net
===
Steven
Steven Morris CA (SA)
Mobie : 083 943 1858
Fax: 086 671 2498
E-Mail: steven@global.co.za
Website: www.stevenmorris.co.za
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