By Lilla Zuill

NEW YORK (Reuters) - Visa Inc (V.N: Quote, Profile, Research) burned its name into the record books for U.S. initial public offerings on Tuesday, raising $17.9 billion as investors seized on its growth potential and lack of direct exposure to the global credit crisis.

San Francisco-based Visa, the world's largest credit card network, sold 406 million class A common stock for $44 per share, above the forecast range of $37 to $42.

Visa will begin trading on the New York Stock Exchange on Wednesday.

Anticipation for the IPO was high on hopes it will emulate the success of smaller rival MasterCard Inc (MA.N: Quote, Profile, Research), whose shares have more than quadrupled since its 2006 IPO.

The stock could jump as much as 10 percent in first-day trading on Wednesday, said Francis Gaskins, president of research firm IPOdesktop.com.

Visa's pricing and optimism about possible first-day gains were likely helped by Tuesday's rally, as U.S. stocks rang in their biggest one-day gains in more than five years.

Only days ago, U.S. stocks plunged on the near-collapse of Bear Stearns Cos Inc (BSC.N: Quote, Profile, Research).

MasterCard has done well despite the market slump, Gaskins pointed out. The stock rose 4.3 percent, or $8.73, to $210.25 on Tuesday, and gained almost 2 percent in aftermarket trading.

Both MasterCard and Visa are seen as good bets to avoid the market turmoil. Analysts say neither is directly exposed to rising defaults and late payments because it does not issue cards, unlike rivals such as American Express Co (AXP.N: Quote, Profile, Research).

"Visa is much bigger than MasterCard," said David Robertson, publisher of Nilson Report, an industry newsletter.

"The expectation is that by being freed from the constraints of being a not-for-profit member-owned association, it could become an even more formidable competitor to MasterCard," Robertson added.

Visa was priced at around 25 times earnings for the year ended Sept 30, adjusted for litigation reserves and other items, according to analysts' calculations. MasterCard trades at more than 35 times earnings for that period.

BANK PAYDAY

The Visa offering will give a much-needed boost to bank stakeholders, whose coffers have been raided by higher credit costs and losses from subprime mortgage bets.

Visa is using about $10.2 billion of proceeds to redeem shares held by its largest shareholders, including banks JP Morgan & Co (JPM.N: Quote, Profile, Research), Bank of America Corp (BAC.N: Quote, Profile, Research), National City Corp (NCC.N: Quote, Profile, Research) and Citigroup Inc (C.N: Quote, Profile, Research).

Another $3 billion is being set aside to cover litigation costs, and the balance for general corporate purposes, according to filings.

The offering is the first bright spot for the 2008 U.S. IPO calendar. Only 44 deals have been priced year to date, a 49 percent slump from the same period last year.

Underwriters, led by JPMorgan and Goldman Sachs (GS.N: Quote, Profile, Research), have the option to purchase an additional 40.6 million shares to cover overallotments, according to filings.

Visa has disclosed it expected to pay underwriters fees of about $500 million.

By raising $17.9 billion, Visa surpasses AT&T's $10.6 billion IPO in 2000, which was the record. If overallotments are exercised, the IPO could become No. 2 worldwide after Industrial & Commercial Bank of China Ltd (601398.SS: Quote, Profile, Research), which raised $22 billion in 2006, according to Reuters Data.

"(Visa) shows that the IPO market is not dead," IPO desktop's Gaskins said.

(Additional reporting by Jonathan Stempel, Phil Wahba and Dan Wilchins; editing by Jeffrey Benkoe)

Executive Summary

The business use of mobile devices by senior management and sales staff will be nearly universal in three years' time, according to a global survey of 395 senior executives conducted by the Economist Intelligence Unit for AT&T. Mobile usage will also escalate among customer service, IT, marketing and field workers.

Many will be connected to converged IP networks. Employees can continue to work from almost anywhere, and can connect on the move thanks to VoIP and IP VPNs.

Companies are struggling to integrate mobile applications with existing IT infrastructure. Security also needs to be tightened, and informal knowledge sharing between remote workers must be maintained as employees congregate less often.

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By Katy Marquardt

JPMorgan Chase has agreed to buy distressed investment bank Bear Stearns for a bargain-basement $236 million in a Federal Reserve-backed agreement. To help JPMorgan finance the purchase, the Fed is guaranteeing up to $30 billion of Bear Stearns's riskier assets. Here is the lowdown on the players and the bailout:

First of all, what is an investment bank?
Think of it as a bank for the big guys: corporate and institutional clients, governments, and financial intermediaries. Investment banks offer a range of services for these clients, such as buying and trading securities, assistance in raising capital, advice on mergers and acquisitions, and asset management. Leading investment banks include Merrill Lynch, Goldman Sachs, Morgan Stanley, and Lehman Brothers. Bear Stearns is the fifth-largest U.S. investment bank.

How do investment banks differ from traditional banks?
Most people are familiar with commercial banks, which collect deposits from clients and issue direct loans to businesses and individuals. At one point in time, banks were required to be of either the investment or commercial variety. But in 1999, the Gramm-Leach-Bliley Act allowed commercial and investment banks to consolidate. This is why JPMorgan, the nation's third-largest commercial bank, is also able to operate as an investment bank.

JPMorgan's dual role is important when it comes to the Bear Stearns deal. As a commercial bank, JPMorgan can borrow from the Fed, while Bear Stearns—as a pure investment bank—cannot. But now, even that is changing: As of today, the central bank is temporarily authorizing the New York Federal Reserve Bank to open up the discount window (where banks borrow directly from the Fed) to primary dealers, which includes investment banks. In essence, the Fed is extending direct lending to securities firms for the first time since the Great Depression.

Why is Bear Stearns in so much trouble?
Bear is heavily exposed to subprime mortgages. Plus, the firm has less capital and is less diversified than its rivals, which are supported by large asset- or wealth-management businesses. On Friday, Bear said its ability to finance operations—and service jittery clients who were cashing out—had "significantly deteriorated." Allowing the company to go under would have meant huge losses for banks and other Wall Street firms, which are tightly interconnected. Investors are now closely watching Lehman Brothers Holdings, which shares some of Bear Stearns's characteristics.

What will JPMorgan get out of the deal?
Plenty. JPMorgan will be able to expand its operations and acquire Bear Stearns at a dirt-cheap price with little risk.

How does this move affect the average investor?
Obviously, this is terrible news if you're a Bear Stearns shareholder. The deal also sparked another major sell-off of the broader market, severely punishing the shares of investment-bank stocks. Writes Tobias Levkovich of Citigroup: "We suspect that investors remain fearful that other weaker securities firms could follow this path, with extreme concern over financial institutions now." Of course, continuing spillover from the credit crunch means that banks finding it harder to raise money may charge higher rates of interest on loans.

COMPUTING professionals led the list of top 15 occupations for primary 457 visa grants in 2006-07, the Immigration Department said.

As the new temporary foreign workers change the face of Australia's workplaces, business groups last week called for an immediate boost to skills training positions and unions expressed concern that increasing reliance on developing-country workers risked lowering general wages.

Immigration Department figures obtained by The Weekend Australian provide a snapshot of temporary foreign workers brought into the country on skilled migrant visas, which allow the employees to stay for up to four years.

The figures show the breadth of the skills crisis runs across the economy, as industries ranging from the healthcare sector to communications, mining and manufacturing import skilled workers to fill vacancies.

Workers from India, China and The Philippines are flooding into Australia's hospitals, factories and construction sites as employers increasingly look to developing countries to combat chronic skills shortages.

In 2006-07, 46,680 temporary permits, known as 457 visas, were issued to foreign skilled workers.

Health and community services accounted for 16 per cent of all 457 visas issued, communication services 10 per cent, property and business services 10 per cent, manufacturing 9 per cent and construction 9 per cent. Professionals exceed the number of other 457 classes, making up seven of the top 10 skills categories.

But as employers search for workers, Australia is increasingly turning to developing countries to fill its vacancies. Britain contributed the most workers in the past six months (6130), followed by India (3670), The Philippines (1870), China (1850) and the US (1570).

British workers were most likely to work as doctors and nurses or in the property and business service sector. Americans were concentrated in communications.

But the use of Chinese workers grew rapidly, particularly in manufacturing. Indian workers were concentrated in communications and health, while workers from The Philippines were imported for building sites and manufacturing.

The rate at which the visas are issued continues to grow. While 46,680 visas were issued in the 12 months to June 30 last year, 25,750 were issued in the six months to the end of December - a 10 per cent increase on current trends.

While the resource-rich states of Western Australia and Queensland have been driving the so-called "two-speed" economy, the slower growth states of NSW and Victoria took the greatest numbers of 457 visa holders.

The chief executive of the Australian Industry Group, Heather Ridout, said the 457 program had grown quickly and business had become "dependent on it".

"But the economy is also very dependent on it and we're going to be very dependent on it if we want to keep the economy growing," she said.

The director of the Centre for Population and Urban Research at Monash University, Bob Birrell, said the most striking trend was the high take-up rate among citizens from the developing world.

"In the six months since the end of the financial year, China has overtaken the US. That's a pretty good indication of where the program is going," he said. "Five or six years ago, that was not the case."

LONDON (AFP) — Oil prices shot higher on Tuesday after the Federal Reserve slashed three-quarters of a point off interest rates, fueling expectations of stronger energy demand from the world's biggest economy.

The bold Fed action, though widely expected, signaled relief to markets worried about a potential meltdown of the global financial system two days after the central bank engineered a rescue of Bear Stearns, one of the largest US investment banks.

New York's main oil contract, light sweet crude for delivery in April, climbed 3.30 dollars to close at 109.42 dollars a barrel.

In London, Brent North Sea crude for May jumped 3.81 dollars to settle at 105.56 dollars.

The two benchmark contracts had hit record peaks on Monday -- 111.80 dollars in New York and 107.97 in London -- before closing lower as traders fretted that the fallout from rising financial market turmoil would curb energy demand.

The Fed on Tuesday lowered its base federal funds rate to 2.25 percent from 3.0 percent in a bid to stimulate sluggish economic growth and stave off a global credit crunch that is threatening to cripple the financial system.

"Previous rate cuts have fueled inflation concerns, and investors have moved money into the commodity complex in record fashion," said Eric Wittenauer, an analyst at AG Edwards.

While few analysts are predicting oil prices to retract at the moment, most energy experts agree that the oil market fundamentals do not support such an expensive price.

"Crude oil remains focused on the weak dollar and inflation stories although we see a large bearish divergence between the resulting rise in oil prices and the deteriorating underlying fundamentals," said Citigroup analyst Tim Evans.

Oil prices on Tuesday have benefited from general dollar weakness, which made commodities priced in the greenback cheaper for those trading in stronger currencies.

Meanwhile, higher equity markets boosted sentiment and meant players did not need to sell commodities in a bid to raise cash and cover losses, as was the case Monday.

Markets have improved on decent first-quarter results from Goldman Sachs and Lehman Brothers.

Sentiment towards commodities, in recent months, has tended to shift two ways, analysts said.

Either market players buy commodities and trade on the notion that they are a safe bet in times of economic crisis as raw materials, supported by a tight supply/demand balance, and will hold their value -- or they sell commodities when equity markets crash to raise cash and cover their losses.

Looking ahead, any sharp movements on the equity markets are likely to drive the oil price.

On the fundamental side, the US will release weekly inventory figures on Wednesday. But the data might go unnoticed, as oil prices continue to be driven by fund sentiment, rather than supply issues, analysts said.

Peter Kafka

An optimistic announcement is meant to show the Internet portal doesn't need help from Google, News Corp., or AOL. Do shareholders buy it?

by Catherine Holahan

Here's the message Yahoo! (YHOO) wanted to convey with its unscheduled update to investors: We're sticking by our growth forecasts despite the slowing economy, and that's all you need to know about why we're strong enough to keep rebuffing that pesky Microsoft takeover bid.

Here's the message many investors took away from the Mar. 18 declaration: All those serpentine maneuvers Yahoo has reportedly undertaken to keep Microsoft at bay—including talks with News Corp. (NWS), Google (GOOG), and AOL (AOL)—aren't panning out. So Yahoo is sticking to a strategy of growing the best it can on its own.

Reiterating the 2008 projections it gave in late January, just days before Microsoft's unsolicited bid, Yahoo said it expects to bring in between $4.32 billion and $4.8 billion in full-year profits on $7.2 billion to $8 billion in sales. Moreover, the company expects annual revenue to reach $8.8 billion by 2010. "Yahoo is positioned for accelerated financial growth—we have a powerful consumer brand, a huge global audience and a highly profitable operating model," Yahoo Chief Executive and co-founder Jerry Yang said during the presentation.

Remaining Low Amid Market Rally

Yahoo also strove to ease speculation the current quarter might produce an earnings disappointment that would send the one-time Web kingpin scurrying into Microsoft's protective embrace. First-quarter revenue is still expected to total between $1.68 billion and $1.84 billion. Should Yahoo miss Wall Street's expectations when it reports its first quarter results in April investors might start dumping its shares, fearful Microsoft will lower its bid.

Yahoo's update helped boost its shares by 7% amid a broad market rally spurred by the Federal Reserve's latest cut in lending rates. But despite the gain the stock remained nearly $2 dollars below the roughly $29.50 a share that Microsoft's cash-and-stock bid is now worth—a sign investors don't have much confidence Microsoft will sweeten its offer.

The reaction among industry analysts was mixed. In a note to investors, BMO Capital Markets analyst Leland Westerfield wrote Yahoo had shown its goals were even "more optimistic" than analysts previously thought. "Yahoo is presenting its case to remain independent of Microsoft, or at minimum, support why the buyout offer from Microsoft is insufficient in the Yahoo board's estimation," wrote Westerfield.

Online Ad Revenues Feeling the Pain

Yet Yahoo's bullish forecast, including a promise to double its operating cash flow to $3.7 billion by 2010, sounded hollow to some. "To say they are being aggressive is an understatement," said UBS analyst Benjamin Schachter. "This is a company that hasn't executed for a couple years, why should we believe that they will be able to grow the top line while keeping costs down?"

The ambitious projections may be even harder to meet given the increasingly grim economic outlook. Separately on Mar. 18, research firm eMarketer reduced its 2008 estimate for U.S. online ad revenues to $25.8 billion, down from an earlier forecast of $27.5 billion. Though the floundering economy would harm ad-supported sites less than other media—thanks to a shift in marketing dollars from traditional media to the Web—it will still slow the market's growth, said David Hallerman, a senior eMarketer analyst.

Share Prices Have Slipped

Analysts and investors have been burned before by buying too heavily into Yahoo's growth hype. A year ago many took management's assurances that a new search-advertising system, Panama, was performing better than expected as an indication profits would beat expectations. Instead, Yahoo failed to show a significant boost from higher ad-clicks after the system's debut and reported an 11% drop in profits during the first quarter of 2007 (BusinessWeek.com, 4/18/08).

Microsoft did not return calls seeking comment. The software maker has thus far refused to raise its bid despite Yahoo's assertion the offer "significantly undervalued" the company. Instead, Microsoft threatened to nominate a slate of directors to Yahoo's board who would favor the deal (BusinessWeek.com, 3/6/08). The offer, initially worth $44.6 billion, now values Yahoo at $42.4 billion because Microsoft's share price has slipped since the bid was launched.

Though the companies have reportedly been talking in recent days, there's been no sign that Microsoft is willing to open its purse any wider.

Holahan is a writer for BusinessWeek.com in New York .