Portugal banks downgraded
Credit ratings agency Moody’s said it had downgraded five Portuguese banks and was putting seven others on negative watch, in a statement overnight. Moody’s downgraded by one notch Caixa Geral de Depositos, Banco Espirito Santo, BPI and Banif, aligning them with the rating for the Portuguese government, which was downgraded from “Ba2” to “Ba3” on Feb. 13. It downgraded by two notches to “Ba1” the rating of Banco Santander Totta, a subsidiary of the Spanish Santander group. The agency maintained its notation for BCP and Montepio banks, but with negative outlook as for the downgraded banks. The agency explained in its statement late on Wednesday that the quality of assets in Portugal held by these banks was likely to weaken, mainly because of the mediocre outlook for the Portuguese economy. Moody’s also expressed concern about the ability of the banks to access private finance.
H&M sees margin shrink
Swedish cheap-and-chic fashion giant H&M yesterday posted strong sales and a slightly higher net profit in the first quarter, but missed analyst expectations and saw its gross margin shrink amid higher purchasing costs. For the December-to-February quarter, H&M posted a net profit of 2.74 billion kronor (US$412 million), up slightly from the 2.62 billion kronor posted for the same quarter a year earlier, but falling short of the 2.99 billion analysts polled by the Dow Jones Newswires had expected to see. Meanwhile, sales grew by more than 13 percent to 27.83 billion kronor in the quarter, but the company’s gross margin shrank to 55.8 percent from 57. 8 percent a year earlier.
CEOs upbeat on economy
Chief executives’ view of the economy brightened in the first quarter of this year, with a growing number ready to hire more workers over the next six months, according to a Business Roundtable survey. Improving demand in the US offset concerns that Europe’s economy may be headed into recession, helping to give the Roundtable’s CEO Economic Outlook Index its largest lift since the third quarter of 2009, the group said on Wednesday. On the key metric of employment, 42 percent of CEOs said they planned to add staff over the next six months. That is a 16-point improvement from the December reading and more than double the 16 percent of CEOs who expect to cut jobs. “This suggests hiring will continue,” said James McNerney, CEO of Boeing Co and chairman of the Roundtable.
Exports create surplus
South Korea returned to a current account surplus last month, official figures showed yesterday, in another sign the export-led economy is coping with slow growth in Europe and the US. The account, the broadest measure of trade with the world, posted a US$639 million surplus last month, the central bank said, compared with a revised US$969 million deficit in January. The surplus was US$1.13 billion in February last year. The bank credited strong exports of cars and ships for the turnaround. The goods accounts recorded a surplus of US$1.39 billion last month, reversing a revised deficit of US$1.62 billion in January. Exports to Europe rose 21 percent last month year-on-year compared with a 38 percent decline in January. Shipments to the US rose 46.7 percent from a year earlier, compared with a 0.5 percent fall in January.