London shares jump after EU deal on Greek debt (AFP)

LONDON (AFP) – Share prices jumped in early London trade on Friday after Europe reached a deal to avoid a Greek debt default.

London's benchmark FTSE 100 index climbed 78.01 points or 1.38% to at 5,752.39 at 8:29 am.

Greece, the EU and the IMF agreed early Friday on the final details of a 28 billion euros ($40 billion) savings plan that Athens needs to implement over the next five years in order to obtain cash to pay off its immediate debts.

The European Commission said the deal among international backers on the ground in Athens now has to be "translated into concrete legislative measures" by Greece.

However, investors are still nervous as they wait to see if Prime Minister George Papandreou can get his austerity measures though parliament next week.

But energy stocks were weak after the International Energy Authority's decision to release 60 million barrels of oil from emergency reserves, dealers said.

The agency said it made the move to make up for lost output in Libya and to give the global economy relief from high energy prices. It is only the third time the Paris-based group has taken such a step.

On the London market, natural resources stocks were the biggest gainers, with Antofagasta gaining 3.07% to 1,275 pence, Randgold adding 2.77% to 5,015 pence, Xstrata rising 2.73% to 1,277.50 pence and Kazakhmys up 2.72% to 1,285 pence.

Satellite communications operator Inmarsat was the only FTSE-100 faller, shedding 0.79% to 562.50 pence.

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RIM shares tumble again after Nokia warning (Reuters)

TORONTO (Reuters) – Shares of Research In Motion extended a two-day slide on Wednesday on concerns that a profit warning from Finland's Nokia could presage more difficulties for the Canadian maker of the BlackBerry smartphone.

As with Nokia, RIM is losing market share as consumers line up to buy Apple's iPhone and devices based on Google's Android technology.

"Nokia cited Android pressures in Europe at all price points. This is impacting RIM as well," said Avian Securities analyst Matthew Thornton.

Shares of RIM, which fell 4.4 percent on Tuesday, dropped a similar percentage to a fresh five-year low on the Toronto Stock Exchange on Wednesday, after Jefferies analyst Peter Misek wrote that the Nokia warning was a bearish signal for RIM.

RIM issued its own warning in late April, exacerbating fears raised a month earlier after revealing lackluster forecasts. RIM is due to release its earnings for the three months to late May on June 16.

The stock lost 16 percent of its value on April 29, the day after RIM warned it was not shipping as many devices in the United States and Latin America as it had expected.

"We have reviewed RIM's margins and believe that the handset business could be much lower margin this quarter and going forward as average selling prices collapse," Misek said in a note to clients.

"What is happening to Nokia could be a precursor to what could happen to RIM," said Misek, noting that both were embarking on difficult software transitions.

RIM's PlayBook tablet computer runs on its new QNX system that the company will begin using its smartphones next year. Nokia recently abandoned its Symbian software in favor of Microsoft software.

CLOUD THREAT

Speculation that Nokia is in talks to sell its core business to Microsoft for $19 billion may have added to nervousness about RIM. [ID:nLDE7500RE] The Finnish company denied as "baseless" a Boy Genius Report article that relied on unnamed sources.

Sterne Agee analyst Shaw Wu said that investors were also likely weighing the threat posed to RIM by Apple's announcement of its iCloud service, which will offer computing and data over the Internet and would pressure RIM's push network.

He said Apple's push services -- the ability to send information to a device without it being requested -- would "become more seamless and powerful" and RIM's advantage in that space would be "narrowed if not eliminated."

RIM shares fell 4.5 percent at C$39.51 on Wednesday on the Toronto Stock Exchange. The company's shares also fell to a two-year low on the Nasdaq, down 5.4 percent at $40.53.

RIM played the third-biggest role of any single stock in leading the Toronto Stock Exchange's S&P/TSX composite index lower on Wednesday.

Investors also dumped Nokia shares on Wednesday, taking them to their lowest in more than 13 years after a profit warning a day earlier raised fears the handset maker may never regain its shrinking market share.

Nokia said on Tuesday mobile phone sales in the second quarter would be substantially below a previous forecast and abandoned its full-year outlook, blaming difficult conditions in China and Europe.

(Reporting by Alastair Sharp and Euan Rocha; Editing by Frank McGurty)

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Nokia warns of weaker sales, shares drop 15 percent (Reuters)

HELSINKI (Reuters) – Mobile phone maker Nokia Oyj slashed its sales and profit outlook on Tuesday and scrapped forecasts for 2011 due to tumbling prices and intense competition, sending its shares crashing 15 percent.

Nokia, once the undisputed force in the mobile phone market, has seen its position challenged in recent years, particularly losing ground in the smartphone market to newcomers Apple Inc and Google Inc.

The company, which is still the number one handset maker by volume, has overhauled its phone business, adopting Microsoft Corp's software instead of its own Symbian platform.

But it continues to suffer from mounting competition and said in a profit warning it expects net sales from its devices and services business in the second quarter to be "substantially below" its previous forecast of between 6.1 billion euros ($8.7 billion) and 6.6 billion.

It expected its non-IFRS operating margin for devices and services to be around break-even in the second quarter, rather than previously expected range of 6 percent to 9 percent.

"This update is primarily due to lower than previously expected average selling prices and mobile device volumes," the company said.

"Given the unexpected change in our outlook for the second quarter, Nokia believes it is no longer appropriate to provide annual targets for 2011," it said, adding it would still provide quarterly updates.

"Given the internal turmoil that will be generated by this news, it is increasingly difficult to see that Nokia can leapfrog one handset generation and be on par with the competition in early 2012. Investors should be more than concerned about the dividend possibility," said WestLB analyst Thomas Langer.

"It seems like it's especially their emerging markets exposure in China where they are hit by competition in the low end of the market," said Sydbank analyst Morten Imsgard.

"Short term, there's a lot of turmoil in the company."

The warning comes a month after Nokia said it would cut 7,000 jobs and outsource its Symbian software development unit to cut costs.

The shares were down 14.9 percent at 4.908 euros at 9:17 a.m. EDT.

(Reporting by Helsinki Newsroom; Editing by Andrew Callus and David Holmes)

($1=.7000 Euro)

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Shares of Apple iPad maker Hon Hai fall after plant (Reuters)

TAIPEI (Reuters) – Shares of electronics company Hon Hai Precision Industry Co Ltd (2317.TW) fell as much as 5 percent on Monday on fears major client Apple Inc (AAPL.O) may shift orders to other producers following a blast at one of the company's plants in China.

Foxconn Technology Group, of which Hon Hai is the flagship unit and Apple's biggest manufacturing partner, said three people had died following a large explosion at its plant in the south western city of Chengdu on Friday.

Analysts said investors were concerned that a potential loss of orders from Apple for its iPads and iPhones could impact Hon Hai, the world's largest electronics component maker, adding to pressure on margins from rising costs.

"Foxconn Group makes 70-80 percent of Apple's parts, and Apple may reconsider concentrating production with one contract maker," said Hua Nan Securities Chairman David Chu. "This could hurt Hon Hai in the long run."

Hon Hai's Chengdu plant makes mainly casings for iPad 2, while final assembly is still done in Hon Hai's main plant in Shenzhen, Southern China, according to a report by Citi.

The brokerage said the explosion happened in a machinery room for cutting metal and, given that no assembly line or inventory was involved, the blast was unlikely to lead to any meaningful production disruption.

Last month Apple reported results that smashed expectations after booming sales of its iPhone and Mac computers and as demand for its iPad tablet computers outstripped supply.

Supplies of the hot-selling iPad were also slightly affected by the Japan earthquake in March, industry sources have said, and brokers including Bank of America-Merrill Lynch and JP Morgan have cut shipment forecasts.

Taipei-based Hon Hai said on Monday the company was assessing the damage to the plant and the local authorities were investigating the explosion. The plant would resume operation once the investigation finishes, it added in a statement to the stock exchange.

Hon Hai shares slumped as much as 5.2 percent after the news to the its lowest since late August. At 0454 GMT, Hon Hai shares were down 2.4 percent, versus broader marker's (.TWII) 0.9 percent decline.

"UBS analysts believe that a majority of iPad2 production is still done in Shenzhen, and that even if the whole Chengdu iPad2 production line is damaged, the impact should be less than 20 percent of iPad total production," according to a UBS research report.

Foxconn International Holdings (2038.HK), the group's Hong Kong-listed unit, fell 3.1 percent in a Hang Seng (.HSI) down 1.73 percent.

"The explosion has hit investor confidence hard," said Prudential Financial fund manager Bevan Yeh. "But we think the impact on Hon Hai will be limited, since it has many production facilities available for use."

The Chengdu facility is the new location set up late last year in an effort to lower labor costs which are cheaper in the inland areas.

Chengdu city government has said last October that Foxconn Technology Group would invest $2 billion on a new plant in Chengdu.

Many manufacturers including PC contract maker Quanta Computer Inc (2382.TW) and Compal Electronics Inc (2324.TW), have also been moving operations in China away from coastal regions such as Guangdong and Fujian to inland areas.

(Additional reporting by Faith Hung and Argin Chang; Editing by Chris Lewis and Lincoln Feast)

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Foxconn sees dramatic improvement in 2011 results, shares jump (Reuters)

HONG KONG (Reuters) – Foxconn International Holdings Ltd, the world's top contract cellphone maker, expects a "dramatic improvement" in its 2011 results, its chairman told shareholders, lifting its shares as much as 15 percent to its biggest daily gain in more than a year.

The money-losing company, whose parent Foxconn Technology Group helps assemble Apple Inc's iPhones and iPads, has been struggling under a host of problems, including rising costs and labor unrest that have led to staff suicides at its sprawling production facilities in China.

It is due to be removed from Hong Kong's benchmark Hang Seng Index on June 7.

During a shareholders' meeting on Wednesday, a small group of protesters chanted slogans and held up banners, including one that read "Bloody Apple", to highlight the fight for workers' rights at Foxconn, a unit of Taiwan electronics giant Hon Hai Precision Industry Co Ltd.

Foxconn International's shares, which had lost about 20 percent of their value since the start of the year, finished Wednesday up 11 percent . Intraday, the stock rose as much as 14.8 percent, the biggest one-day jump since December 2009.

Chairman Samuel Chin declined to elaborate on the results forecast. Analysts on average expect the company to post a net loss of $12 million for 2011, according to Thomson Reuters I/B/E/S.

"If you look at the first half, they should break even," said UBS analyst Arthur Hsieh in Taipei. "In the fourth quarter they will have a small profit."

"It's more because of the cost cuts. They have pretty much done a lot in terms of whatever they can scale down. They are relatively slim."

'DUMMY PHONES'

Foxconn International said it was banking on fast-growing smartphones and cost cuts, such as selling its Taiyuan operations to its parent, to improve its bottomline.

"Smartphones previously were a niche market. They have very much become mainstream products," Chin told a news conference after the shareholder meeting. "Today's smartphones will become tomorrow's dummy phones."

"With regard to smartphones, as I mentioned to you before, our R&D expenses have continued to increase and I can assure you that a tremendously high amount of that expense is focused primarily on smartphones/tablets," he said.

Foxconn International, whose customers include Nokia, Motorola Mobility Holdings Inc and Huawei Technologies Co Ltd, logged another loss for the second half of 2010 as the company struggled to regain its footing amid rising costs and falling prices.

About 70 percent of its revenue comes from Nokia and Motorola.

Shipments of smartphones, which allow users to surf the Internet, take pictures, and send email as well as make phone calls, are expected to grow to 97.2 million units this year, up from 55.8 million last year, industry figures showed.

But some analysts cautioned that the strong feature-phone focus of Foxconn International's client base could make it difficult for the company to perform well in the near future.

(Editing by Chris Lewis and Muralikumar Anantharaman)

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