Nama has cash pile of more than 4.2bn

The State's bad bank, Nama, has cash reserves of more than 4.2bn, despite the country being "bankrupt", the Sunday Independent has learned.

The amount of cash Nama has in its accounts is considerably more than the entire level of cuts, 3.8bn, made in last December's budget.

The agency has refused to make the funds available for any sort of stimulus package as it wants to use the money to work with developers to help them finish projects, and also pay down Nama debt.

"The cash is not available for Exchequer stimulus purposes," a Nama spokesman told the Sunday Independent yesterday. "This cash will be used to finance working and development capital and also towards paying down Nama bonds as part of meeting the agency's 7.5bn repayment target by end 2013."

Nama is now going to be questioned about why it is sitting on the cash pile at the Oireachtas Finance Committee on Wednesday.

Fianna Fail's finance spokesman Michael McGrath said yesterday it was not Nama's job to be sitting on huge piles of money, but it was supposed to be cleansing the banks of their bad loans and enabling bad loans to be worked out over time.

"I will be raising the issue when the agency comes before the finance committee on Wednesday. On the face of it, it looks like an inefficient use of resources. Nama should not be sitting on billions of euro for the sake of it when the country is in the dire state it is in," he said.

The agency said: "Nama is conscious of the role it can play every day in stimulating economic activity and supporting jobs.

"It has already approved almost 1bn in advances to debtors to fund the completion of development work and debtors' working capital requirements."

Nama has also said the vast majority of the developers it has engaged with are co-operating, but it has confirmed that it has taken legal action against 214 debtors.

Under a new pilot incentive scheme, the agency said it would guarantee the mortgages of 175 properties in a bid to kick-start the housing market. If the scheme was successful, it said it could be rolled out to up to 700 properties.

Nama chairman Frank Daly said the initiative was designed to push renters, who were on the verge of buying, over the threshold.

Under the plan, interested parties will be asked to put a 10 per cent deposit on a property. The buyer will then have to qualify for a 90 per cent mortgage.

For the first five years of the mortgage, the buyer will make repayments based on the 90 per cent mortgage. After five years, the value of the property will be independently assessed. If the value has fallen by anywhere up to 20 per cent, Nama will write that percentage of the mortgage off.

Apple's new iPad piles pressure on rivals

Now we know what Apple wanted us to see. The teasing invite that dropped into email inboxes a week ago said: "We have something you really have to see. And touch." Last night in San Francisco Tim Cook, Apple's chief executive, put an end to the flurry of speculation about what his company had planned and showed off the new iPad.

In truth, the rumours and speculation had got most of the details right. There was the improved display - 3.1 million pixels, which puts the iPad ahead of the average HDTV on screen resolution; a faster processor - quad-core for better graphics rendering; and an improved rear-facing camera with 5-megapixels and the same lens technology as the iPhone 4S. But as always, the specifications can only take you so far. What makes Apple's products so successful is how they are to use.

This isn't the iPad 3 or the iPad HD, it's just the new iPad. Its display offers such clarity that images appear to be painted on to the glass. As Apple says, you have to see it to appreciate the difference. That is a hallmark of the iPad, a device that is easy to dismiss until you use one.

Apple emphasised the importance of apps to the success of the iPad. The rivals, Cook explained, either don't have the apps or have only "blown-up smartphone apps". To make the point, Apple demoed apps that show off the power of the new processor as well as the graphics.

Whether its Epic Games' Infinity Blade: Dungeons or Apple's new iPhoto app, the screen looks fantastic and the apps zip along.

Two questions kept arising last night as analysts and Apple fans followed the news coming out of San Francisco. First, is this enough of an improvement on last year's model? The word from many observers after the announcement of the iPhone 4S in October last year was that the new features were a disappointment; analysts expected a radical redesign, 4G connectivity and, perhaps, a phone that makes your coffee. Is the new iPad a disappointment, analysts were asked time and again.

Second, are the new features strong enough to make existing iPad owners upgrade? Apple's pattern of refreshing existing products year on year is seen by critics as a cynical plan to keep the same people locked-in to a cycle of annual upgrades.

Both questions miss the point. Apple has taken a market-leading, and one could even say market-defining, product and made it more compelling. Despite the fact that the iPad 2 was termed a disappointment by some because its specifications didn't match the leading competitors, Apple has now sold 40 million iPads. The market share for the competition is growing but people still aren't buying rival tablets in significant numbers.

Forty million iPads is a lot but it still leaves a lot of people who don't have one and they are the people that Apple is aiming at. For those people, the question is not whether the specs are enough of an improvement on last year or whether to upgrade. The question is whether to join the iPad revolution at all and every year Apple makes its case that little more compelling.

Even before last night's announcement, IMS Research was predicting that a new iPad would increase Apple's share of the tablet market from 62 per cent in 2011 to 70 per cent in 2012. Based on the anticipated feature list for the new iPad, analyst Gerry Xu said : "To date there is no significant threat to the iPad’s continued dominance in the tablet market. In fact, the share of Android tablets is forecast to fall from 35 per cent in 2011 to 26 per cent in 2012."

Gaza electricity crisis piles up hardship on women

An electricity crisis has now piled up more burden on the already struggling Palestinian women in the besieged Gaza Strip.

Hasna Abu Shawish, 40, living in the beach refugee camp in Gaza city is suffering due to the electricity crisis that has increased hardships.

Just like many of the Palestinian refugees in the camp, she is unable to afford a portable generator. When electricity goes, the family huddles around the warmth of candlelights in the one-room house they live in.

"By afternoon our house is completely dark and there is not much we can do," she said. "My children can barely read and do their homework, and I've had to borrow money to buy a pair of glasses for one of my girls because her eyesight keeps getting worse," Hasna said.

Hasna, like many other women in Gaza Strip, has stopped using cooking gas in order to preserve whatever is left with them. Instead they cook using firewood and mud ovens.

"We're mostly eating sandwiches these days for I can't afford to use the gas since I don't know when I can get my gas tank refilled again," she said.

Like many people, a small task like washing clothes has become impossible for Hasna, causing endless torment for herself and family.

"Just last week, we got some electricity for two hours at 2am and I quickly woke up and put a load into the washing machine. However, before finishing the laundry, the electricity went again and the clothes remained unfinished and wet," she said. "This always tends to put my husband in a bad mood and blames me for the delay of the house work," she added.

Naila Al Ashi, Director of the Palestinian Women's Affairs Centre in Gaza Strip said: "When there is no electricity, women cannot complete their work in their homes. The children are stressed out and scared and women have to spend majority of their time comforting them. They have to find ways to juggle household expenses in order to afford fuel for generators. All of these things increase domestic problems, putting women at risk of abuse and violence."

Gaza's power plant has shut down twice and the 1.7 million residents of the coastal strip face up to 18-hour blackouts each day.

"The electricity crisis truly does put women under stress, while her husband and male sons might leave them alone at house if they felt bored."

Proview Scrap Piles Rise While Waiting on Apple Cash Infusion

As workers stream from factories in Shatou Jiao Free Trade Zone, none emerge from Proview Technology (Shenzhen) Co.’s green-glass and white-tile plant.

A walk round back tells the reason. The mothballed south China factory of what was once the world’s fourth-biggest maker of computer monitors is being dismantled for scrap.

Almost a year and a half since Proview Shenzhen shut after missing payments to suppliers and banks, the company teeters on bankruptcy. Founder Rowell Yang and creditors led by Bank of China Ltd. are now wringing out Proview’s last possession of value: rights to the iPad trademark in China that Apple Inc. wants and may have to dip into its $98 billion cash pile to get.

“The creditors hope that Proview Shenzhen can be renewed and restart production,” Roger Xie, an attorney for the company, said in a March 2 interview at his office in downtown Shenzhen. “Proview Shenzhen has two hopes. One is to transfer or license the trademark. The other is for Apple to compensate them and purchase the trademark to give Proview Shenzhen the ability to clear its debts.”

Apple last week appealed a Shenzhen court ruling that its 2009 purchase of the iPad trademark in China from a Taiwan sister company of Proview was invalid. Consumers in China associate the iPad name with Apple’s tablet, and it would be unfair to give Proview the value of that trademark which Apple created, the Cupertino, California-based company told the Higher People’s Court of Guangdong

Proview, which began selling its own product called the iPAD in 2000, shuttered its Shenzhen factory in November 2010. In contrast with the building’s facade, shattered windows scar the back, and rubbish is strewn on the yard.
Scrap Piles

During a March 2 visit, workers wearing blue dust-masks appeared from time to time to augment two towering piles of scrap in what used to be a loading bay. Metal sheets, pipes and tubes protruded from the heaps.

“It’s true,” said Yang, when asked whether the factory was being gutted, in a March 5 telephone interview. “The Banks have taken over the assets, and can sell them.”

Proview peaked at 10 percent of the global monitor market in 2006, when they ranked No. 4, said Alberto Moel, a Hong Kong- based analyst at Sanford C. Bernstein & Co.

“They could have at that point sustained themselves but they missed the window,” Moel said. “Competitors ramped production and took share. They blew up, but for a while, they actually were somebody.”
Community Pillar

Proview’s plant is a half-hour car ride due east of Xie’s office, along an expressway that tunnels through rolling green hills. Exiting the highway, a winding road curves down the hillside, around a hairpin turn before emerging into the heart of Yantian district, across the border from Hong Kong.

Yantian was formally established in 1998, and is home to more than 200,000 people and a deep-water port, as well as the Shatou Jiao Free Trade Zone, according to the local government’s website.

Within four blocks of entering the district, visitors pass the Yantian People’s Court, where dozens of creditors sued Proview. Xie declines to give the exact number, saying only it was “20, 30, 50” or more. Those cases ultimately led to the Yantian court-monitored arbitration that put an eight-bank group in control of Proview Shenzhen’s assets from March 2009.

At the courthouse, two guards at the door ask numerous times “Are you with Apple?” And again, even after a government-issued press card is produced.

After finally gaining entry, an official who refused to identify himself during two hours of negotiations for access to court documents, said that records of suits involving Proview and its creditors are not available to the public.

Proview is well regarded in the community as one of its best-known exporters, according to Yang. The willingness of creditors to allow the company to reorganize its debt rather than push it into bankruptcy was because of intervention by the Shenzhen municipal government, which asked the banks to help in February 2009, he said.

Proview’s special place can be seen on every street. While there are many businesses in the trade zone, including Ritech Technology, Spectrum Quality Toys and Europtronic, Proview is the only one identified on tourist information maps posted by the district government along its tree-lined streets.

Proview first set up a factory there in 1992, moving into its current premises in 1998, a year after the company’s Hong Kong initial public offering, share sale documents show. Relative newcomer Apple opened its first store in China in 2008. Liu Zixian, a former director of the Shatou Jiao zone, was appointed to the board of Proview in 2004, filings show.

A quiet success story built on a pile of proxy circulars

No, not zombies or vampires or werewolves. I’m talking about proxy circulars, which fill postal boxes each and every spring. The big Canadian banks have begun sending them out, and thousands of other companies that closed out their fiscal years in December will follow in the weeks after.

Surely there are companies that handle the drudgery of sending out these circulars and collecting votes? Yes, indeed – there’s one large one that handled more than 90 per cent of all the work last year in North America. That means it processed the proxy votes for more than 600 billion shares in 2011.

The best part of this is that the company, Broadridge Financial Solutions Inc., remains little-known, even as it grows profits and boosts its dividend .

Based, believe it or not, in Lake Success, N.Y., Broadridge started nearly 50 years ago as the “Brokerage Services” division of Automatic Data Processing, processing stock trades . It moved into proxy services in 1989; ADP spun off Broadridge in 2007.

Today, its Investor Communications Services division provides about 70 per cent of the company’s revenue and profits. It benefits from the practice of most shares being held not in the names of individual shareholders, but in “street name” at the various brokerage houses; companies pay brokerage firms to send out proxies, and brokerages, invariably, choose Broadridge for the task.

The move to electronic proxy voting, Broadridge says, boosts profitability. Roughly half the division’s revenue comes from low-margin postage reimbursement; eliminating the mailing shifts the mix to the higher-margin fees for service.

The business is extraordinarily steady – after all, public companies weren’t allowed to cancel their annual meetings to save money during the financial crisis – but there is some variability: Mutual funds issue more or fewer proxies in any given year, depending on whether they’ve changed managers or have other needs for interim communications with fund holders.

And as it happens, the company’s fiscal 2011, which ended last June, was an unusually quiet one for these “event-driven revenues.” Ian Zaffino at Oppenheimer & Co., who has a “buy” rating and $27 target price, believes “there is significant upside to numbers if … event-driven volumes recover.”

There seems to be limited growth potential in a business that Broadridge already dominates (although management disagrees, saying that related businesses, including tax reporting and other types of investor communications, represent a $10-billion market, compared to the $1.6-billion the Investor Communications segment brought in during fiscal 2011.)

But Broadridge’s additional business of handling securities transactions lends credence to the idea that the company is, as Christopher Donat of Sandler O’Neill Partners puts it, “more than a proxy processor.”

Broadridge says it ranks number one in the United States in processing both equity and fixed income transactions, and number one in Canadian equity transactions as well.

Yet unlike the proxy business, roughly half the transactions are still handled “in-house” at the brokerage houses themselves, giving Broadridge a chance to make the case for outsourcing.

You don’t have to completely embrace management’s rosy scenario, however, to see potential. As noted, the company is coming off a year with below-normal levels of event-driven proxy revenue, as well as relatively light trading volume .

The company’s current-year guidance is for earnings per share between $1.50 to $1.60. If event-driven revenue remains low, management says, $1.80 is possible for the year starting July 1; if there’s a rebound, that figure could be $2.

The shares, at the current price of $24, trade for about 13 times the conservative case, and 12 times the more optimistic number. At the same time, the company sports a dividend yield of about 2.7 per cent, having boosted the payout four times since the ADP spinoff.