How they boost income: 23-July-08
Sourav Mitra -
Wednesday, July 23, 2008 7:31 PM
Hedge Funds:
They borrowed almost 15 per cent, or about 550 million, of HBOS shares, which faced intense pressure from investors betting on the share price falling, and sold them to be able to buy them back cheaper.
[Short sellers borrow shares they do not own and then sell them hoping to buy them back more cheaply if the price falls. Prices of HBOS shares fell from 495.24p to 264.5p leaving the scope to make a profit of 230.74p a share, or a total of £1.27 billion]
[Click here for full story at Businessweek.com]
Foresight + market manipulation = scope net income jumps (sometimes at the cost of peace of mind lost in the shadowland between good and bad and right and wrong)
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Tom Group Ltd., the media company controlled by Hong Kong billionaire Li Ka-shing and Joost, a rival to YouTube:
1. They will form a venture to offer television programs over the Internet in China to revive Web revenue that fell 21 percent last year after wireless carriers China Mobile Ltd. and China Unicom Ltd. tightened restrictions on sales of ring tones and games to their handset users.
2. They will share advertising revenue generated by the venture.
[Click here for full story at Bloomberg.com]
Joint venture = more resources = more scope for income (even if it is to be shared)
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Asahi Glass Co., the world's biggest maker of car and truck windshields:
1. It will spend about 20 billion yen to build a fifth LCD-glass kiln in Taiwan.
2. It will spend 30 billion yen to install a furnace and polishing line to produce LCD glass at a plant in western Japan.
[Click here for full story at Bloomberg.com]
Tweaking production according to demand = more income
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De Beers, the world's biggest diamond company:
1. It boosted rough-diamond prices by about 8 percent in the first half.
2. It wants to raise production to keep pace with growing demand from increasingly wealthy Chinese and Indian consumers.
[Click here for full story at Bloomberg.com]
Price hikes + production hikes = more income (as long as demand sustains it)
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Telefonica SA, the biggest phone company in Spain and Europe's second-largest telephone company:
1. It is turning to Mexico as growth slows in its home market and Mexican regulators try to introduce more competition to the telecommunications market.
2. It may buy a cable-television provider to bolster its communications network in Mexico. It is talking to cable operators about possible deals.
[Click here for full story at Bloomberg.com]
Playing in growing markets + seeking out synergic partnerships = scope for high growth income