CHICAGO, Jan. 3, 2011 /PRNewswire/ -- Zacks.com Analyst Blog features: Mitsubishi UFJ Financial Group Inc. (NYSE: MTU), Morgan Stanley (NYSE: MS), Bank of America Corp. (NYSE: BAC), Citigroup Inc. (NYSE: C) and CNOOC Ltd. (NYSE: CEO).
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Here are highlights from Friday's Analyst Blog:
Mitsubishi UFJ Morgan to Cut Jobs?
Mitsubishi UFJ Morgan Stanley Securities Co., a joint venture between Mitsubishi UFJ Financial Group Inc. (NYSE: MTU) and Morgan Stanley (NYSE: MS), is planning to right-size its company by trimming its payroll. The company would offer an early retirement program from February, according to a report in the Nikkei business daily. The job cut comes on the heels of difficulties pertaining to earnings generation, which the company is facing in a lackluster stock market environment.
The payroll trimming in February would target 200–300 jobs, representing about 3–4% of its total workforce. Employees aged 49–57 with at least 5 years of service in the company would be offered the early retirement option. Those who take part in this program would be given a severance package. Besides, the company would also pay to support their job-hunt.
Depending on the response the company gets through the number of sign-ups for the program in February, it could again offer this retirement program in autumn or later.
The news of job retrenchment is not new to Wall Street firms. The financial crisis has forced many of the Wall Street biggies such as Bank of America Corp. (NYSE: BAC) and Citigroup Inc. (NYSE: C) to reduce their workforce. Several other companies have also joined the bandwagon and opted for rightsizing of their workforce.
Though situations have slightly improved based on gradually increasing consumer spending, market stability still remains elusive. Also, in a situation of extreme competition and tight budgets, retrenchment remains an easier option.
CNOOC's CBM Endeavor
China National Offshore Oil Corporation (or CNOOC Group), the parent company of CNOOC Ltd. (NYSE: CEO), is heading toward an agreement to acquire 50% interest in China United Coal Bed Methane Company Limited ("CUCMB") for 1.2 billion yuan ($181.2 million). The move reflects the group's endeavor to concentrate more on unconventional gas resources.
CUCMB, which was a 50:50 joint venture company between China National Petroleum Corp. ("CNPC") and China Coal, has 27 coal bed methane (CBM) gas blocks with proven reserves of around 50 billion cubic meters. Coal bed methane or coal bed gas is a form of natural gas extracted from coal beds. Total acreage possessed by CUCMB is around 20,151 square kilometers, including 14 blocks or 15,915 square kilometers under collaboration with foreign investors.
In 2009, CNPC has departed from the joint venture and since then CUCMB is encountering financial crisis. Presently, China Coal holds 100% interest of the CBM producer. The fund from CNOOC will likely increase annual output of China CBM to 3–5 billion cubic meters by the end of 2015.
One of the largest independent oil and gas exploration and production companies of the world, CNOOC is a new entrant in the CBM market. The company is taking efforts to fortify its natural gas businesses and this acquisition marks a part of the process.
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