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Hitachi Ltd, Japan’s biggest electronics firm by sales, will raise up to $4.6 billion to shore up its capital, joining a scrum of Japanese firms tapping equity markets before a possible economic slowdown.

Hitachi, which is headed for its fourth straight annual loss, said it will raise up to 416 billion yen after fees, issuing 318 billion yen worth of shares and convertible bonds worth 100 billion yen.

The Monday announcement came as its shares headed for their biggest single-day slide in six months after sources told Reuters about the public stock issue, Hitachi’s first in 27 years.

Hitachi, which has a joint venture with General Electric in nuclear power, will invest in its nuclear power, software services and lithium-ion batteries operations, while trimming losses.

But Hitachi has been forced to seek money before it could form a realistic plan for recovery, some analysts said.

“This amount is the absolute limit that Hitachi can seek from markets, but this may not be enough even to cover restructuring costs at such a mammoth firm, let alone invest in growth,” said Mitsushige Akino, chief fund manager at Ichiyoshi Investment Management Co.

“I don’t think investors will want to put their money in. There are so many more deserving companies that need funds.”

The share issue would boost Hitachi’s shares outstanding by more than 30 percent.

Hitachi, like many of its once high-flying peers, has lost market share in flat TVs and digital devices to rivals from South Korea and Taiwan, and is eager to focus its sprawling operations in growth such as in lithium-ion batteries and smart grids.

A sprawling conglomerate with more than 900 group firms, Hitachi has repeatedly said it will trim losses and focus on growth areas.

It said it will use the funds it raises to boost production capacity of nuclear reactors and lithium-ion batteries, to expand its software services operations and to spend more on research on its train systems.

But Hitachi, which supplies lithium-ion batteries to General Motors, remains weighed down by losses on its flat TVs and microchips.

It must shoulder an investment of about 80 billion yen to pave the way for a merger of Renesas Technology — its chip venture with Mitsubishi Electric — and chipmaker NEC Electronics next year.

Battered by deep losses, Hitachi’s shareholders’ equity ratio has slipped to just below 11 percent, roughly half that of rival NEC Corp, which earlier this month announced it would raise up to $1.5 billion.

The ratio is calculated by dividing shareholders’ equity by total assets and is a measure of financial strength. 

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Thanksgiving air travelers can expect crowded planes as a result of the most dramatic capacity cuts since World War II, according to the industry’s trade group.

Airplanes will be full, despite a 4% reduction in passenger volume for the Thanksgiving season compared to last year, according to the Air Transport Association. This is because the industry has slashed capacity by 6.9% year-over-year to improve efficiency in the face of higher fuel costs and slumping demand, said the trade group.

"Our expectation is that there will be fewer passengers flying because of economic measures," said ATA spokeswoman Elizabeth Merida. "The planes will still be full, even though the airports will be 4% less crowded."

This year has seen the biggest capacity reduction since 1942, when civilian aircraft were diverted towards the war effort, resulting in a cut of 16.9%, she said.

Since then, the industry has grown its capacity with few interruptions. The most dramatic capacity plunge, aside from the current decline and World War II, occurred immediately after the terrorist attacks of Sept. 11, 2001, but it was relatively short-term.

Packed airports and planes but fewer delays

Anne Banas, executive editor at smartertravel.com, said with fewer planes in the air the holiday travel experience may be streamlined.

"Yes, planes will be full, but I don’t think there will be so many delays," she said. "[It will be] smooth sailing compared to last year, in terms of getting stuck in the airports, because there are so few airplanes compared to last year."

But she added that the airports during the Thanksgiving holiday are packed with once-a-year fliers who tend to be less "savvy" in negotiating airport security, holding up the line for frequent fliers.

Rick Seaney, chief executive of Farecompare.com, said the airports will be "jam-packed full," despite the decline in passenger volume, because the Thanksgiving travel season is the busiest of the year - even busier than Christmas payday loan.

Forget about bringing those presents

The biggest and the newest obstacle facing air travelers will probably be the fees for checked baggage, said Seaney, which were implemented by most of the carriers last year.

"Everybody now is pretty much educated on baggage fees, so there’s going to be absolutely no room in the cabin for packages," he said. "So you might want to send your bags ahead. You don’t want to be in the back half of the boarding cycle."

As for air fares, the Air Transport Association said that ticket prices are down 13% this year, compared to 2008. Thanksgiving is fast approaching for those who haven’t purchased tickets. But Seaney said that some airlines, such as Delta Air Lines (DAL, Fortune 500) and UAL Corp.’s (UAUA, Fortune 500) United Airlines, have shortened their pre-flight purchase windows to seven days from 14, meaning that passengers still have time before fares hit their dramatic, short-term increases.

Banas suggested that people who haven’t purchased their tickets should schedule their return flight for the Monday following Thanksgiving, rather than the Sunday. The Monday fare should be cheaper, she said, because most travelers "maximize the weekend" and fly on Sunday.

As a final word of Thanksgiving advice, Seaney urged travelers to not vent their frustrations on airline and airport employees.

"The people who are working those holidays are just as frustrated about being at the airport as you are on the holiday, and you’re not going to get what you want if you blow up at them," he said. 

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Motorola Inc is in the early stages of looking into a potential sale of its $4.5 billion television set-top box and network equipment business, two sources said on Wednesday.

Motorola is in the early stages of seeking buyers for the unit, whose suitors include private equity firms and other communications equipment makers, said one source familiar with the situation.

Motorola may decide to keep the unit in the end, said the source, who was not authorized to speak with the media.

J.P. Morgan Chase & Co and Goldman Sachs Group Inc are advising Motorola on the possible sale, the source said.

J.P. Morgan and Goldman Sachs declined to comment.

Motorola, which has been losing market share in its cellphone business for years, declined to comment, but said it was still focused on its previously stated plan to separate its handset business from the rest of the company.

Analysts said there could be a lot of interest in the home and networks unit, particularly because Motorola has a strong market share in the set-top box segment, where it is bigger than Scientific Atlanta, owned by Cisco Systems Inc.

But RBC analyst Mark Sue said that a divestiture of any of Motorola’s other business units could hurt Motorola’s money-losing handset business.

“The mobile devices business still needs the rest of the businesses to fund its operations payday cash advance loans. It hasn’t really recovered fully yet so it would be a little too early to cut off the lifeline,” Sue said.

While growth in the mobile network equipment market has slowed dramatically in recent years, rival gear makers could see Motorola as a way to increase their market share, particularly in the United States.

Avian Securities analyst Matthew Thornton said a $4.5 billion price tag would represent an 18 percent premium over his estimated valuation of $3.8 billion for the home and networks unit, based on operating earnings.

Analysts at Avian Securities said that their sum-of-parts analysis values Motorola’s Home & Networks Mobility Division segment at $4.25 billion, according to an emailed report.

“Simply put, the deal price cited … is not far off from our valuation,” the report said.

Potential suitors could include Ericsson, Samsung Electronics Co Ltd, Alcatel Lucent SA or Nokia Siemens, a venture of Nokia and Siemens AG, analysts said.

The Wall Street Journal cited China’s Huawei Technologies Co Ltd and UK based Pace Plc as other potential buyers.

The Wall Street Journal cited potential suitors as Silver Lake Partners and TPG. 

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The U.S. economic recovery still faces many hurdles, including a persistently weak labor market and strained household budgets, Janet Yellen, President of the Federal Reserve Bank of San Francisco, said on Tuesday.

Yellen said in a speech to a local organization she was not worried about inflation, arguing instead that the possibility of a problematic drop in consumer prices remains the greater risk.

“The strength and durability of the expansion is in question,” Yellen said. “Some of the rebound is due to temporary government programs and a swing in inventory investment that will not provide an ongoing source of growth.”

Still, she credited the very same government efforts, in conjunction with unprecedented monetary stimulus from central banks worldwide, for reviving growth in the third quarter.

The U.S. economy expanded 3.5 percent during that period, following the worst recession in generations. Whether the private sector can pick up the slack once the government boost is gone remains to be seen, Yellen said.

“The danger is that demand may grow at too anemic a pace to support vigorous expansion,” said Yellen.

Addressing the nation’s battered housing market, Yellen said signs of stabilization were an important positive easy payday loans. But she cautioned that the high unemployment rate, currently at a 26-year high of 10.2 percent, raised the threat of a renewed wave of foreclosures that could again pressure home prices.

The outlook for commercial real estate is “worrisome,” Yellen said.

Given the recession’s toll, U.S. consumers are still strapped for cash, and stagnant incomes are not helping.

“High unemployment, weak job growth, and paltry wage increases are a recipe for sluggish consumer spending growth and a tepid recovery,” said Yellen.

Another possible impediment to a vibrant recovery is the banking sector, which is still facing a mountain of bad loans, Yellen argued.

“It may take quite a while for financial institutions to heal to the point that normal credit flows are restored. The credit crunch hasn’t entirely gone away,” she said.

(Reporting by Pedro Nicolaci da Costa, Editing by Chizu Nomiyama and James Dalgleish)

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AXA Asia Pacific rejected a $10.3 billion bid from parent AXA SA and Australian rival AMP Ltd on Monday, an initial hurdle for the French insurer’s bold ambitions to expand in Asia.

AXA SA, Europe’s second-largest insurer it would raise $3 billion to buy out its Asian assets in a two-stage deal which would see AXA Asia Pacific sold to AMP, then divided on geographical lines with the Australian firm keeping the Australia and New Zealand assets and selling the Asian assets back to AXA SA.

But AXA Asia Pacific’s independent directors rejected the main plank of the deal saying the deal “significantly undervalued” the company.

AXA SA had tried to buy out the minorities in AXA Asia Pacific five years ago but was knocked back.

“They’ve obviously wanted to have at least some of the assets of AXA Asia Pacific for some time. They wanted to do it cheaply before and they’re probably wanting to do it cheaply again,” said Ross Barker, managing director of Australian Foundation Investment Co.

AXA Asia Pacific shares jumped 30 percent on news of the takeover bid, with the market punting on AMP and AXA improving the offer.

AXA SA holds its Asian operations through its stake in Australia-based AXA Asia Pacific Holdings but now wants to own these assets outright, doubling its exposure to Asian life insurance savings, including in China and India.

“The proposal has been received against the backdrop of recent weakness in global financial markets and before the growth of our Asian operations is fully reflected in our profitability,” AXA Asia Pacific Chairman Rick Allert said in a statement.

With the buyout, AMP would buy all of the shares in the Asia Pacific unit, including the parent’s 53 percent stake in a deal worth $10.3 billion, and then sell AXA Asia Pacific’s Asian assets back to the French parent.

“The Asian assets are attractive,” said Mark Daniels, head of Australian equities for Aberdeen Asset Management.

“That’s one of the reasons why you’d hold AXA (Asia Pacific). They’ve got a very good business in Hong Kong and other Asian businesses are coming on track,” Daniels added.

In a separate development, AXA’s 15.6 percent stake in China’s No.4 life insurer, Taikang, attracted foreign and domestic bidders, including Temasek and Blackstone, valuing the holding at more than $1 billion, sources told Reuters.

“A BIT LIGHT”

AMP’s cash-and-shares offer for all of AXA Asia Pacific, the first stage of the deal, implied a bid of A$5.43 per AXA Asia Pacific share, valuing the target firm at A$11.2 billion ($10.3 billion), based on AMP’s closing share price on Friday. AMP is offering a 26 percent premium to AXA’s close on Friday.

AXA’s shares surged 33 percent to close at A$5.70, their highest since the collapse of Lehman Brothers. 

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Charles Schwab Corp expects to waive about $100 million in money market fees in the current quarter, up 28 percent from the previous quarter, the largest U.S. discount brokerage said on Thursday.

Management, speaking at a quarterly update for investors, added that the first 100 basis-point rise in interest rates could eliminate fee waivers altogether.

With near-zero interest rates continuing to hamper the online brokerage, it said Thursday it would incrementally move billions of dollars — but no more than $10 billion — from clients’ money market funds into its bank unit in 2010.

Schwab had $178.7 billion in client money market funds at the end of September.

Low interest rates, brought on by the recession, have forced the company to waive the fees it charges clients in managed funds. Schwab, by far the biggest online broker, also runs a fast-growing bank and offers investment advice.

The $100 million in fourth quarter waivers would be up from $78 million in the third quarter, and $36 million in the first half of the year payday loans online. It is also higher than the company’s previous forecast, which suggested $86 million in waivers remained this year.

Schwab shares were little changed after the new forecast. They were up 1.8 percent at $17.25 on the Nasdaq.

Chief Financial Officer Joe Martinetto said the company was preserving capital and flexibility amid market uncertainty, but “we’re now thinking that maybe the worst of that has past us.

“There is a substantial number that still sits out in money funds that we would see migrating toward the bank,” Martinetto said, adding later that $10 billion was the absolute most that could transfer next year.

San Francisco-based Schwab, which broadcasted its investor update online, posted a 34 percent profit drop in the third quarter, meeting Wall Street expectations.

(Reporting by Jonathan Spicer; Editing by Tim Dobbyn)

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The number of signed sales contracts to buy homes rose in September for the eighth straight month, according to a real estate industry report released Monday.

The September Pending Home Sales Index from the National Association of Realtors (NAR) spiked 6.1% to 110.1, consolidating a 6.4% gain in August. It was the index’s highest level since December 2006, when it stood at 112.8.

The leap was far better than expected. A panel of analysts surveyed by Briefing.com had forecast a 1.2% rise.

Analysts, including Lawrence Yun, NAR’s chief economist, have traced much of the improvement to the government’s first-time homebuyer tax credit program, which gives an up to $8,000 tax break to new homebuyers. It’s estimated that between 200,000 and 400,000 additional sales will have been made because of the credit.

"What we’re witnessing is a rush of first-time buyers trying to beat the expiration of the tax credit at the end of this month," said Yun.

The credit lapses after Nov. 30, and the housing industry is bracing for a major turndown in sales if Congress fails to pass some kind of extension.

"Clearly, buyers were eager to get business done before the credit’s November expiration," said Mike Larson, a real estate analyst for Weiss Research. "So I wouldn’t be surprised to see some give back in pending sales over the next month or two."

Favorable long-term prospects

Any fall-off should only be temporary, however, according to Yun. Market conditions are just so favorable for buyers right now that sales should rebound quickly should they suffer through a hangover following the tax credit demise.

With home prices well off their highs and mortgage rates still extremely low, the cost of homeownership is well within the range for many Americans who are not homeowners today. There are, Yun estimates, about 3 million renters who are now financially well-qualified to buy a median-priced home.

"As long as buyers do not overstretch and stay well within their budget, a sizable pent-up demand can be tapped among financially qualified potential buyers," he said.

That will not translate into a new boom, however, according to Larson. "No explosion of pent-up demand will send markets to new heights," he said. "The economy is still not in fantastic shape."

Housing markets certainly do not seem to be out of the woods, but this latest release added to a modest winning streak of positive recent reports. Prices appear to have stabilized, with the S&P/Case-Shiller Home Price index up four months in a row and completed sales of existing homes at their highest level in two years.

Foreclosures, however, continue to plague many markets, adding to supplies on homes for sale, according to Yun.

"An excess of homes remains on the market despite recent improvements," he said. "Although current inventory is getting closer to price equilibrium, foreclosures will continue to enter the pipeline."

Increased pending sales are a forward-looking indicator since contract signings precede actual closings; they typically take place two to three months later. Although some contract signings fall through, a jump in signings in September usually means NAR statistics on December existing home sales will improve. 

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Nearly half of U.S. workers who left their job last year cashed out their 401(k) accounts, according to a study released Wednesday, despite ongoing efforts to dissuade Americans from doing so.

Hewitt Associates, a global human resources consulting firm, said 46% of employees who left their job last year took a cash distribution from their 401(k) plan.

The "alarmingly high" number, which was based on a study of 170,000 401(k) participants, has remained virtually unchanged since 2005, the group said.

Pamela Hess, Hewitt’s director of retirement research, said employers and policymakers need to work together to change employee behaviors and reduce 401(k) cash-out rates.

"Otherwise, millions of Americans who rely on defined contribution plans will find themselves unable to achieve a financially secure retirement," Hess said in a statement.

While cashing in a 401(k) can make sense for some workers, most financial advisers say breaking your nest egg before retirement is a bad idea because of the penalties involved and the loss of potential interest.

"Over the course of 20 or 30 years, modest amounts of savings can turn into surprisingly large sums of money," Hess said fast payday loan no faxing.

Among the workers who did not cash out their plans, 29% left their savings in their prior employer’s 401(k) plan, while 25% rolled over their money into an IRA account or other retirement plan.

The study also showed that younger workers were more likely to take the money and run. Six out of ten workers in their 20s took a cash distribution from their 401(k) last year, compared with just one-third of employees in their 50s.

Hess said the high cash-out rate among young workers is troublesome because those employees are missing out on "decades-worth of tax-deferred growth on their investments."

Not surprisingly, the study found a correlation between 401(k) plan balances and cash-out rates.

Only 8% of workers with 401(k) balances of $100,000 or more cashed out their plans last year. That compares with 85% of workers with a balance of $1,000 or less who did take a cash distribution.  

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