Financial News

Novelis Inc. is relocating its North American headquarters from Cleveland to Atlanta, bringing 80 jobs to the city.

The company announced the move late Thursday.

Novelis, an aluminum products giant that has been a major supplier of bottlers of The Coca-Cola Co., said it will consolidate its North American headquarters with its existing world headquarters.

The consolidation, combined with other hires, will bring Novelis’ Atlanta staff to about 220 by the end of 2010.

The company's world headquarters is housed in Buckhead's Lenox Building.

Recently, however, company executives have been touring other Buckhead buildings where they might consolidate and expand, including Two Alliance Center and Phipps Tower. Two Alliance appears to be the frontrunner, and Novelis could be in the market to lease about 100,000 square feet.

"North America is one of our biggest markets, and it just makes good business sense to consolidate these operations at our Atlanta-based corporate headquarters," Philip Martens, president and chief operating officer of Novelis, said in a statement.

Novelis is a $10.2 billion company focused on aluminum products and aluminum can recycling. It has about 12,000 employees in 11 countries.

Novelis selected Atlanta as its world headquarters in 2005 when it was spun off from Canadian aluminum producer Alcan payday loans.

The move is the latest in a series of steps taken during the past year to streamline the company.

“Novelis’ consolidation of North American operations at its Atlanta headquarters provides additional evidence that multi-national corporations thrive in our city,” said Atlanta Mayor Kasim Reed. “Atlanta is a global center of international commerce with a vibrant corporate community. I am delighted to welcome the North American headquarters staff of Novelis to our great city.”

The Atlanta Development Authority and the Metro Atlanta Chamber also helped in the relocation.

Rob Metcalf of Jones Lang LaSalle represented Novelis in its real estate transaction.

“We’re delighted that we could help entice Novelis to expand its Atlanta headquarters. We look forward to a long-term relationship with the company as it continues to grow,” said Gregg Simon, manager of business engagement for ADA. ”Novelis is a wonderful corporate citizen, and its decision highlights the positive business climate offered in the city of Atlanta.”

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Brighton, a Clayton-based marketing and communications agency, hired Tom Shipley as vice president for interactive marketing.

Shipley began his career at Anheuser-Busch Cos. in 1989, and held a variety of positions in sales and marketing there, including senior director of industry development and senior director of Budweiser marketing.

His most recent job at Anheuser-Busch was as senior director of digital media and marketing.

He led the team responsible for all digital marketing and media initiatives for the Anheuser-Busch brand portfolio.
Shipley has a bachelor’s degree in American studies from the University of Dayton.

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Peopleclick, a Raleigh company that makes human resources software, has been purchased by New York private equity firm Bedford Funding for about $100 million, the companies announced Tuesday.

Bedford owns Massachusetts company Authoria Inc., a Peopleclick competitor. Bedford will merge the two makers of human-resources software into a combined entity called Peopleclick Authoria.

Charles S. Jones, managing partner of Bedford Funding, will become chairman and CEO of Peopleclick Authoria, working from the private equity firm's White Plains, N.Y., headquarters. At this point, the new company does not have specific plans to choose a headquarters in either Raleigh or Waltham, a spokeswoman said business?ards.

Bedford bought Waltham, Mass.-based Authoria, in 2008 for $63.1 million and immediately committed to invest $8 million more in the company, which makes talent management software. Peopleclick makes talent acquisition software. Bedford plans to integrate the two companies' products to include more analytics capability, the firm said in a press release.

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The Federal Reserve may cause another crisis by botching the withdrawal of liquidity from the U.S. economy, Morgan Stanley Asia Chairman Stephen Roach said.

The Fed is the “weak link” among central banks and may fail to tighten monetary policy in time to stop asset bubbles from forming, Roach said at a conference in Berlin today. The Fed helped trigger the boom and then bust of the subprime mortgage market by being “quick to slash, slow to normalize” interest rates, he said.

Fed Chairman Ben S. Bernanke said Dec. 3 he doesn’t rule out using monetary policy to prevent unfounded increases in asset prices, though he said financial regulation is a better approach. Bernanke said this week the U.S. economy continues to face “formidable headwinds,” signaling the Fed will keep its benchmark interest rate near zero for an extended period.

“They need to be very early in executing their exit strategies,” Roach, a former Fed economist, told Bloomberg Television. “I take Mr. Bernanke at his word that he’s looking for an extended period of monetary accommodation, which, quite frankly, I find very worrisome in assessing the prospects of a next bubble and the next crisis.”

‘Ludicrous’ View

The traditional view of central bankers that asset bubbles are hard to spot and deflate with rates is “ludicrous,” he said.

“This is a failed flaw in the intellectual construction of modern central banking that must be addressed,” said Roach. “If we don’t fix this problem we’re doomed to repeat the failed asymmetric policies of the past and set ourselves up” for another crisis.

Roach recommended the Fed be required to “hardwire” the goal of preserving financial stability into its mandate, alongside the pursuit of full employment and low inflation paydayloans. Central banks should not be “allowed to outsource their responsibilities” to regulatory bodies, he said.

Nobel laureate Robert Mundell told the conference that the Fed mismanaged monetary policy by not raising interest rates fast enough in the last recovery when gold and commodity prices rose.

It was an “insane, stupid policy,” he said. “Where’s the mea culpa from the Fed?”

Asset Bubbles?

While no Fed official spoke at the Berlin event, European Central Bank Vice President Lucas Papademos told reporters that in the future “there may be scope for the use of monetary policy as an instrument to also contribute to financial stability” in harness with other tools such as supervision.

Asked if he was concerned that asset bubbles are now forming, Papademos said he “wouldn’t come to this conclusion” because even with recoveries in markets and at banks, the financial system “is still facing challenges.”

“Overall financial conditions have not reached a stage that are signaling risks to financial stability,” he said.

Papademos defended central banks as having “avoided the meltdown of the financial system and through a variety of measures we are contributing to the return of the financial system to conditions of normality.”

Bernanke said on Dec. 3 that “regulation of the financial system is the strongest, most effective” way to deal with bubbles. “I do not rule out using monetary policy if necessary, if that situation does become worrisome and threatening,” though there are no signs of “extreme misvaluations,” Bernanke told the Senate Banking Committee.

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The jury deciding the fate of former state Senate Majority Leader Joseph L. Bruno is deadlocked, for the moment, on most of the criminal allegations against Bruno.

Jurors told U.S. District Court Judge Gary L. Sharpe on Tuesday afternoon that they have reached a unanimous verdict on two of the eight felony counts of mail and wire fraud facing Bruno. The announcement is the first confirmation of the jury’s progress on deciding whether to convict or acquit Bruno, 80.

However, the jury—made of seven women and five men—also said it has not yet been able to reach a unanimous agreement on any of the remaining six counts against Bruno. Jurors did not say which two counts they’ve reached a decision on, or what their verdict is on those counts.

Sharpe instructed the jury to continue deliberating. Jurors will resume their talks by 8:30 a.m. Wednesday; it will be their fourth day of deliberations.

The jury has no deadline for reaching a verdict. However, Sharpe may have to declare a mistrial if jurors cannot reach unanimous agreement on all of the counts facing Bruno.

Bruno, of Brunswick, is accused of intentionally and illegally covering up his outside business consulting activities while serving as a state legislator. Bruno maintains he is innocent.

The trial wrapped up on Nov. 23. That day, federal prosecutors and Bruno’s defense attorneys spent five hours on their closing arguments, attempting to summarize evidence and testimony from 70 witnesses who appeared at trial.

Visit albany.bizjournals.com for breaking news about the jury’s deliberations and its verdict.

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Galleon Asia is keeping its $500 million Asia hedge fund highly liquid ahead of likely calls from investors to withdraw money, after the founder of its U.S.-based parent was charged with insider trading.

The comments underscore the uphill task faced by funds under the Galleon group, as managers struggle to convince investors about keeping their money with them after Galleon’s tangle with the law.

“It is reasonable to expect there will be requests for redemptions,” said David Lau, CEO of Galleon Asia, adding so far there had been no such requests. “We are highly liquid. All the prime brokers are reaffirming their support for us (the Asia fund),” Lau told Reuters in an interview on Wednesday.

The U.S. Securities and Exchange Commission has charged Galleon’s founder Raj Rajaratnam, the 52-year-old Sri Lanka-born billionaire, and executives from other U.S. companies with the largest hedge fund insider-trading scheme in the United States.

“There will be pressure from institutions and endowment fund investors as well as regulators for more insights into the way hedge funds are managed and operated,” said Justin Ong, head of wealth management practice for PricewaterhouseCoopers in Asia, about the fallout from the Galleon case.

Galleon Asia’s comments added to concerns in Sri Lanka, where investors dumped stocks on fears there could be more selling from Rajaratnam, who is one of the biggest single investors on the Colombo bourse.

The Sri Lankan stock market fell 4 payday loans no fax.2 percent as of 0518 GMT, before erasing the losses on bargain-hunting.

“Nobody knows what’s happening with stakes that belong to Raj and Galleon Fund,” said Harsha Fernando, CEO at SC Securities in Colombo.

LEVERAGE REDUCED

The Asia fund has reduced leverage in the past few days and is prepared for any requests from investors, said Lau, a former joint head of financial markets at DBS Group who was hired by Galleon in mid-2008 to run its Asia unit.

He said most of the investors in the Asia fund are international institutions.

The Asia fund, which runs a long/short equity and macro strategy, is up over 15 percent since the start of the year, he said. Galleon Asia has a staff of 16 people including analysts and traders.

Lau said the Asia fund is not subject to any investigations by the SEC. “The center of the tsunami is not here,” he said.

“Where we have clear evidence that a financial institution has breached our laws and regulations, we will hold the financial institution to account,” a spokeswoman of the Monetary Authority of Singapore, the country’s financial regulator, said in response to queries.

Lau said Galleon has not put restrictions on investors in the past who want to withdraw money. 

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China will unswervingly apply its policy mix of massive government spending and loose money because its economic recovery remains fragile, Premier Wen Jiabao said on Thursday.

Wen’s insistence on caution and policy consistency has been the refrain of Chinese leaders in recent months, even as data from car sales to housing starts suggest that the world’s third-largest economy is well on the road to high-speed growth.

His one deviation from the standard script was to flag inflation as a risk, although the country is still experiencing deflation.

“We should fully implement and continuously improve policies and discover and resolve new problems in a timely manner,” Wen told a meeting of the World Economic Forum in Dalian.

“We should be alert and prevent all potential risks, including inflation.”

China’s consumer prices have fallen for six straight months, but economists think the pace of decline may have bottomed out, setting the stage for a potential rebound in inflation, fueled by a record surge of bank lending in the first half of this year.

If there was any question of China tightening monetary policy or reining in government spending, however, Wen made clear that Beijing would stay the course on its expansionary, stimulative path for now.

“The foundations of China’s economic recovery are not stable, not solidified and unbalanced,” he said.

“We cannot and will not change the direction of our policies at an inappropriate time. The top priority of our work is to maintain stable and quick economic growth, so we will unswervingly stick to a relatively loose monetary policy and an active fiscal policy.”

China’s latest economic data, covering the month of August, are due to be released on Friday and are expected to show an upturn in industrial output and steady growth in retail sales and investment.

PROPERTY BOOM

New evidence of strength in China’s property sector, vital to the country’s economic health, was furnished on Thursday, with investment growth accelerating sharply and prices and sales continuing to rise in August.

Figures released by the National Bureau of Statistics showed investment in the property sector rose 14.7 percent in January through August compared with a year earlier, picking up from 11.6 percent annual growth in the first seven months.

Lin Songli, an economist with Guosen Securities in Beijing, said strong property investment, encouraged by strong sales, would likely replace government spending this quarter to become the key driver of economic growth.

“Direct government spending may ease a little bit, and property investment will take the lead,” Lin said, adding property probably contributed the majority of growth in capital spending in August. 

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Anheuser-Busch InBev, the world’s largest brewer, said cost cutting had helped it beat analyst forecasts for second-quarter profit, although the second half of the year would be significantly weaker.

AB InBev has described beer as “resilient” in the face of the global economic slump, although the industry has seen consumers trading down from premium to cheaper brands, and opting to drink at home instead of the pub.

“We have strong operating momentum going into the second half of 2009, but recognize that many challenges remain. The beer industry, while resilient in most of our key markets, is not immune to economic pressures,” Chief Executive Carlos Brito said in a statement.

The maker of Budweiser, Stella Artois and Beck’s beers said earnings before interest, tax, depreciation and amortization (EBITDA) rose 18.5 percent to $3.596 billion, compared with the average $3.221 billion in a Reuters poll of 15 analysts.

Overall cost of sales decreased by 5.6 percent in the second quarter, or 2.4 percent per hectoliter, thanks to brewery productivity enhancements, the group said.

The brewer said it projected cost of sales per hectoliter to run flat or increase by low single digit percentages over the full 2009 year, which was “somewhat more optimistic” than previously anticipated.

It had benefited from lower spot prices for its non-hedged input costs — the cost of ingredients such as malting barley, other grains and hops — after a sharp rise in prices last year, it said.

By 5 a.m. EDT, AB Inbev shares had dropped 3.7 percent to 27.7 euros, against a 0.9 percent fall for the DJ Stoxx Europe food and beverage sector 500 fast cash.SX3P. Shares in Heineken, which reports on August 26, were down 3 percent.

“The market is reacting somewhat negatively to the group’s outlook,” said KBC analyst Wim Hoste, adding, however, that this reaction was a little exaggerated given the strong second-quarter EBITDA performance.

The company, reporting in dollars from this year, said second-half year-on-year EBITDA gains would be significantly below the 18.5 percent achieved in the second quarter of 2009, primarily due to more difficult comparisons.

Analysts were positively surprised by the group’s improved guidance for cost of sales.

“In a market which is going down it is very good that they can keep their costs under control,” Petercam analyst Kris Kippers said.

VOLUMES DROP, MORE SAVINGS EYED

The company said second-quarter volumes fell by 1.1 percent, against overall expectations for a 1 percent drop.

Volumes grew 7.0 percent in Brazil but fell 8.9 percent in Central and Eastern Europe (CEE) due to weak market demand and market share loss in the value segment. CEE nevertheless saw EBITDA growth of 39 percent in the second quarter as a result of price improvements, lower cost of sales and lower distribution costs, the group said.

World number two SABMiller’s underlying beer volumes were flat in the second quarter, while those of Carlsberg, the fourth biggest brewer, fell by 6 percent on a like-for-like basis. 

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BOSTON – The Boston Globe is moving toward charging readers for online content, while its parent, The New York Times Co., explores a possible – but not certain – sale of the newspaper.

"Nothing is absolute, but we are heading toward some sort of consumer pay model," for its Web site Boston.com, Globe spokesman Bob Powers said Friday.

Powers said the newspaper had assembled a team to explore options for online charges and informed Globe unions of its intent Thursday. Charging for Web content holds risks because it can drive away users who are accustomed to browsing the site for free, and in turn can lead to a loss of online advertising.

Times Co. confirmed in a regulatory filing that it had retained Goldman, Sachs & Co. to explore a potential sale of its New England Media Group, which includes the Globe, Boston.com and the Telegram & Gazette of Worcester, Mass.

In an interview with the Globe Thursday, Times Co. Chairman Arthur Sulzberger Jr. and Chief Executive Janet Robinson said the newspaper – once on track to lose $85 million this year – is now on a much stronger financial footing thanks to concessions by Globe unions and other measures.

Sulzberger said a sale was but one option.

"We are exploring that as a possibility. It does not mean it will absolutely be the case," he told the Globe.

"What's important here is that the Globe be maintained as a viable business entity, whether it's sold or we continue to operate it, and to make sure it has the financial stability to ensure its continuity," he said.

Powers said management of the newspaper believes readers would be willing to make a financial contribution to receive Web content, and has been conducting market research over the past several months in an attempt to determine "what consumers would be willing to pay, but weighing that against any potential loss of advertising.''

The Globe was exploring several prospective pay models, including charging for so-called "verticals" within the site, such as sports or arts and entertainment, or a method by which users would get a certain number of page views at no cost, with payment required for subsequent page views, Powers said.

There was no hard and fast timetable for when a decision would be made, he said credit reports free.

Many other publications have developed online subscription models or are considering doing so as the industry tries to recover from the one-two punch of readers – and advertisers – abandoning print versions for the Internet and the recession that has further weakened ad sales.

News Corp. chairman Rupert Murdoch told analysts Wednesday that visitors to newspaper Web sites owned by the company would have to begin paying fees within the next year. News Corp.'s properties include The New York Post, The Times of London and The Sun, a popular British tabloid. The company already charges for some access to The Wall Street Journal's Web site.

The Globe, citing unnamed sources, also reported Friday that Platinum Equity, a Los Angeles-based investment firm, had submitted a bid to buy the newspaper, becoming the third group to do so.

Platinum Equity made its first foray into newspaper publishing in May when it purchased The San Diego Union-Tribune from Copley Press Inc. for an undisclosed price.

"We don't discuss whether or not we're considering prospective acquisitions. Nor do we comment on market rumors that we're looking at or bidding on particular businesses," said Mark Barnhill, a principal at Platinum Equity, in an e-mail to the Associated Press.

The Globe previously reported on two other prospective bids, one by a group led by Boston Celtics owner Stephen Pagliuca and former Boston advertising mogul Jack Connors, and the other from a group headed by Stephen Taylor, a former Globe executive and member of the family that sold the Globe to the Times Co. for $1.1 billion in 1993. The newspaper cited unnamed people with knowledge of those offers and neither group has commented.

Powers said he could not comment on any prospective bids.

In its filing Thursday with the Securities and Exchange Commission, Times Co. indicated that the Globe's financial situation had improved through restructuring efforts that included gaining $20 million in wage and other concessions from the newspaper's unions.

The Globe lost $50 million in 2008, and Times Co. has said it was on track to lose $85 million this year before the agreements with the unions.

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A sales bounce last month has buoyed spirits at Plaza Motors. Profits were up nearly 20 percent over May at the Creve Coeur luxury vehicle dealer, which had to cut about 5 percent of its work force in the last year as the recession deepened.

But John Capps, Plaza’s president and CEO, isn’t ready to celebrate just yet.

"Nobody’s doing cartwheels at this point," Capps said. "We see business improving a little bit right now. I think it has turned, but we’re slowly crawling back up."

Luxury auto dealers nationwide saw sales of new vehicles improve in June, as the high-end segment increased its share of total auto sales for the third straight month, according to CNW Research, a national auto research firm. Brands such as BMW, Lexus and Mercedes all stemmed sales declines.

But the luxury market hasn’t escaped the economic fallout. Sales of luxury cars are still down about 31 percent compared to 2008, according to J.D. Power and Associates. That’s still better than the rest of the auto industry, where year-to-date sales have fallen almost 35 percent compared to last year.

Many luxury dealers are living significantly leaner, having slashed overhead and trimmed staff to stay afloat during the sagging auto industry’s record decline.

"It’s going to be a tough year," said J.J. Mills, co-principal at St. Louis Motorsports in Chesterfield, which sells a half-dozen luxury brands including Bentley, Rolls Royce and Maserati. "I think it’s going to get worse in the short term but better in the long term."

A trend toward smaller vehicles is helping spur pockets of growth in the luxury segment, which accounted for 1.65 percent of all car sales in June, according to CNW Research. Sales of compact premium crossover vehicles (CUV) are actually up almost 20 percent over last year, according to Jeff Schuster, the firm’s executive director of forecasting.

Mercedes, Audi, Infinity and Volvo have rolled out new crossovers in the last year. Models include the BMW X3, the Audi Q5 and the Volvo XC60.

"You have the segment more than doubling in terms of products being offered," Schuster said. "As you go from smaller to the largest within the premium segments there’s significant performance differences."

At Plaza Motors, Capps is starting to see burgeoning consumer interest in the smaller CUVs. But they have yet to become a consistent money-maker. "They’re new and exciting," he said. "Those cars are doing fairly well, but they’re relatively low-volume faxless payday loans."

But entry-level and used luxury cars are providing some relief. Manufacturers also are lowering prices on some of their basic cars, making luxury ownership more accessible to a broader audience, Capps said.

"You can get a new Mercedes, BMW or Lexus for a price that’s not too significantly different than what you’d pay for a high-end GM car or a Ford," Capps said. "They’re expanding their product lineup and appealing to people who can now drive those brand names."

On the other end of the luxury spectrum sits St. Louis Motorsports, whose Bentleys and Lamborghinis all push well into the six figures. While the dealership witnessed a slight sales rebound last month, its year-to-date sales for six upper-echelon manufacturers are down 30 to 50 percent nationwide, Mills said.

A volatile stock market and fluctuating investment portfolios have forced some high-end consumers to refrain from replacing older vehicles or making that first splurge, Mills said. "They’re looking at their money and basically being as discretionary as anyone else," he said. "People aren’t trading in cars as often."

Still, St. Louis Motorsports is currently the nation’s No. 3 Lamborghini dealership, after spending part of the last year in the top spot. "I would think it’s the last thing a person would be buying," said Mills. "It’s been a real pleasant surprise."

It’s also one of the few. Like most of the industry, sales and foot traffic have been in serious flux since last summer. St. Louis Motorsports has shed about 20 percent of its work force since October.

"We’ve all taken on additional duties and responsibilities within the store," Mills said.

The pain in the luxury market and the industry as a whole may persist a bit longer, said Schuster, the J.D. Power forecaster. He expects the stagnant market to drag through the summer.

But a handful of indicators, including rising consumer confidence and more consistent showroom traffic, suggest mild recovery might reshape the remainder of the year.

"We’re always on the optimistic side of sales, and I think you’re probably going to see the fourth quarter looking pretty good," said CNW president Art Spinella. "It’s not the usual auto market anymore."

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