Coming Soon! V for Visa IPO

Visa, the San Francisco-based credit card company, filed with Security and Exchange Commission Monday to sell its initial public offering (IPO) of 406 million shares to the public at an expected price of $37 to $42 a share. The electronic transaction processor expects to trade under ticker symbol V on the New York Stock Exchange within the next several weeks. The company expects to raise between $15 billion and $17 billion, which would make Visa the biggest IPO ever in the United States.

It may be noted that Visa’s main rival, the Purchase, N.Y.-based card processor MasterCard (MA), has been one of the great success stories in the IPO market in recent years, posting a 421% gain since its May 2006 offering.

The Visa offering will give public shareholders a 52% stake in the company. Visa's earnings in the quarter ended Dec. 31 were $424 million on revenue of $1.49 billion, as transactions processed rose 13% from a year earlier. For 2007, Visa reported an adjusted loss of $861 million on operating revenue of $5.2 billion.

Bank of America and Chevron joining Dow industrials

Today morning, the Dow Jones Indexes announced it is adjusting the components of its benchmark Dow Jones Industrial Average. The index group said the following changes would be effective with the opening of trading on Feb. 19:

In :
Bank of America Corp. (BAC)
Chevron Corp. (CVX)

Out:
Altria Group, Inc. (MO)
Honeywell International, Inc. (HON)

Bank of America would be the third bank and fifth financial services firm in the index. It's worth noting the trust that the index is bestowing on the financial sector, despite the recent turmoil originating from subprime mortgage and credit crunch. There were other large cap stocks that have been ignored by the index, such as Cisco, PepsiCo, Apple or Google.

For average investors, a good way to play the index would be to invest in the exchange traded fund, Diamond Trust (DIA).

New Currency ETNs from Barclays

Barclays has announced the launch of 3 new Exchange Traded Notes (ETNs). As we discussed in our past postings, ETNs trade like stocks or Exchange Traded Funds (ETFs), but they're debt instruments, meaning that investors are exposing themselves to risk that the issuing bank will go bankrupt.

Barclays already had other currency ETNs in its product lines: iPath EUR/USD Exchange Rate ETN (ERO) , iPath GBP/USD Exchange Rate ETN (GBB) and iPath JPY/USD Exchange Rate ETN (JYN) . The new ETNs are:

The Carry Trade ETN: The carry trade involves borrowing money in low-yielding currencies and investing it in high-yield currencies. This fund involves using long and short forward positions in G10 currencies to execute the trade. Among others, the index has holdings in the Norwegian krone, New Zealand dollar, Swiss Franc and Australian dollar. The fund has an expense ratio of 0.65%.

Barclays GEMS Strategy: GEMS stands for Global Emerging Markets Strategy. The fund is a 15-currency money market account that covers five geographic zones, including Eastern Europe, Africa and Latin America. It has a 0.89% expense ratio.

Asian and Gulf Revaluation: This one has exposure to five Middle Eastern and Asian market currencies that are tied to the U.S. dollar. It carries an expense ratio of 0.89%.

Readers should, however, take note of a related IRS ruling that these currency ETNs should be taxed as debt, and that gains from interest income and currency appreciation will be taxed as regular income tax.