June 2010, Issue #49

The Summer Months Begin!

The auto industry has been receiving a lot of focus in the past month. General Motors announced on June 2nd that the sales of their four most active brands were up almost 32% compared to last year. Ford Motor Company also showed a nearly 22% increase in sales and released their plan to increase third quarter production. Honda Motor has been experiencing a major strike in their affiliate's factory in China since May 17th.

Though the amount of buyers is still relatively low due to the slow economic recovery, GM and Ford both showed significant increases in their car sales. According to the latest report, Ford is confident that their efforts to improve quality and increase fuel efficiency will gradually pay off and their stock price was up largely because of that effort. On the other hand, GM also demonstrated that they are making up for previous losses by shutting down Hummer, Pontiac and Saturn.

The Honda affiliate strike in China was said to be an indicator for the growth of China, and also brought up the dilemma Japanese companies (which built their factories in China) are now facing. While Chinese workers are demanding better wages and benefits than they did before, the increasing standard of living in China also opens up a huge market to make up for the shrinking Japanese market. Therefore, Japanese automakers, which used to look to China only for cheap labor, are changing their attitudes. They need to raise morale by providing a more structured compensation and promotion system and at the same time keep an eye on the budget to compete with local competitors.

The similar phenomenon also happened to Foxconn in China, which makes the iPhone, among other products. A series of employee suicides this year has become part of the reason why Foxconn announced a general raise of over 30% for factory workers on June 2nd. Looks like relations between Chinese labor and companies with factories in China will be continuously influencing the market into the future.

An Update on FirstradeNEXT

Another big release went out last week as we make the final push towards the official launch, stay tuned for the date. More invites for the preview are also being prepared for this week.

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A Quick Look @ Prudential plc. (NYSE:PUK)
In every issue we take a quick look at a stock that has been in the news. Feel free to make suggestions as to what stock you would like to see covered next by sending an email to editor@firstrade.com, or the editor will pull a random symbol out of a hat.

In this issue, we are going to talk about Prudential plc (NYSE: PUK). Over the past few months, the offer to acquire AIG's subsidiary by Prudential has been under the spotlight since it's critical to whether AIG will be able to pay off their debt to taxpayers. On June 2nd, it was announced that the previously expected acquisition was turned down by AIG. Prudential's stock price has fallen slightly since then.

Founded in 1848, the British financial services company, Prudential plc, serves over 21 million customers worldwide. The financial services company originally provided loans to professional and working people. Currently, Prudential has four business units including Prudential UK, M&G, Prudential Corporation Asia and Jackson National Life. These units offer a variety of products and services, such as: pensions, annuities, and investments; investment management services; life assurances in Asia; and life insurance, respectively.

Prudential plc was listed on the London Stock Exchange in 1924, and founded Egg, an Internet bank based in the UK in 1998. Egg was acquired by Citibank in 2007 after quickly obtaining a certain amount of customers. Prudential plc ADRs are also listed on the NYSE since 2000.

In 2004, Prudential started a joint venture with Discovery Holdings of South Africa and launched a new subsidiary, PruHealth to sell private medical insurance to the UK market. Most recently, Prudential was planning to acquire AIA but it did not work out in the end. Now, let's take a look at some key events of Prudential plc.



Key Events:

1. 1848 Founded in London as The Prudential Mutual Assurance Investment and Loan Association.
2. 1881 Converted to a limited company.
3. 1924 Listed on the London Stock Exchange.
4. 1997 Acquired Scottish Amicable for $1.75billion.
5. 1998 Set up Egg, an international bank within the UK.
6. 1999 Acquired M&G, a UK fund management company.
7. 2000 Listed on the NYSE.
8. 2004 Launched PruHealth to sell private medical insurance.
9. 2007 Sold Egg to Citibank.
10. 2008 Outsourced its back office functions to Capita.