Monday, October 26, 2009

Hollingsworth Daily Post


Islamic Debt to Rally on Nakheel Recovery, GE Sukuk

Almost non-existent a decade ago, the Islamic bond market has grown to $130 billion, according to Moody’s Investors Service. Prices are rebounding after three defaults in the past year because investors expect Dubai’s government to prevent state-owned developer Nakheel from failing to make payments on its obligations. The company’s bonds due Dec. 14 rose to a record 108 cents on the dollar this month, up from 93.5 on Sept. 2 and 70 percent higher than a February low.


Facebook Fuels Growth With Games as Users Flock to ‘Mafia Wars’
Facebook Inc. is tapping virtual farmers, mafia dons and online pets to generate cash from the social-networking Web site’s 300 million users.
The company is testing a payment system to gain a cut each time an online-game player buys a digital tractor, weapon or hat on the site. That would give Facebook a piece of the hundreds of millions of dollars that are being pulled in by Zynga Inc., creator of “Farmville” and “Mafia Wars,” and Playfish Inc., maker of “Pet Society.” The social-games market will almost triple to $2 billion by 2012, estimates ThinkEquity LLC.


Junk Bond Rally Signals Profits for Stocks as Markets Diverge
While owning debt in the riskiest companies has paid about the same as the Standard & Poor’s 500 Index over the last 23 years, bonds are returning more than twice as much in 2009, according to data compiled by Merrill Lynch & Co. and Bloomberg. When high-yield credit beat the S&P 500 by 32 percentage points in the 12 months ending March 11, 2003, stock gains exceeded bonds by 19 percentage points for the rest of the year.
Barclays Plc and ING Groep NV are increasing share purchases on speculation that improving corporate earnings will prolong the rally in equities and shrink the gap again. Profits for S&P 500 companies are forecast to climb 53 percent over the next two years as the Federal Reserve holds interest rates close to zero to end the worst recession since the 1930s, according to analyst estimates compiled by Bloomberg.

Source - Bloomberg 26.10.09

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