Financial Services And Consultants, Stock Investment Advice - Home Spacer Investor Insight Spacer Devere Login
Home
Investor Insight
deVere Login
 
 
PIC logo
                 
 
           
 
       
 
PIC
 

P.I.C. - News

Skip Navigation Links
 
         

Home >  Label  >  Label
 
   

28 Mar, 2008


deVere Insight - 28th March 2008

VIEWS - In this edition we feature the Outlook from Barings

http://www.baring-asset.com/document/uk/ldnprd_001539

CURRENCIES -

Currency

U.K. £

U.S. $

Euro

¥en

Swiss Franc

AU $

Chinese Yuan

Can $

 1 U.K. £

=

1

1.9937

1.2627

197.6913

1.9807

2.1740

13.9885

2.0355

 1 U.S. $

=

0.5016

1

0.6333

99.1600

0.9935

1.0905

7.0165

1.0210

 1 Euro

=

0.7920

1.5789

1

156.5685

1.5687

1.7218

11.0787

1.6121

 1 ¥en

=

0.005058

0.010085

0.006387

1

0.010019

0.010997

0.070759

0.010296

 1 Swiss Franc

=

0.5049

1.0065

0.6375

99.8088

1

1.0976

7.0624

1.0277

 1 AU $

=

0.4600

0.9171

0.5808

90.9347

0.9111

1

6.4345

0.9363

 1 Chinese Yuan

=

0.07149

0.14252

0.09026

14.13240

0.14159

0.15541

1

0.14551

 1 Can $

=

0.4913

0.9794

0.6203

97.1205

0.9731

1.0680

6.8722

1

 

The dollar fell against the yen on Friday as investors worried that the credit crisis that has fractured the U.S. financial sector was far from over, pushing stocks lower.  The drop in U.S. shares and concerns that the credit crunch would make the funding of current account deficits difficult took some edge off the British pound and the New Zealand and Australian dollars.

"It's very difficult, even when equities begin to rally, for investors to sell the yen aggressively, considering that at any time you could have (U.S.) banks come out with massive losses," said Mark Meadows, a currency analyst at Tempus Consulting in Washington. "The risk is just too much right now."

The dollar fell to a session low of 99.110 yen.  It was last trading at 99.250 yen, down 0.4% on the day, with U.S. stocks ending down as credit-related worries sank financial shares.

Adding to investor concerns about the U.S. financial sector, Oppenheimer & Co analyst Meredith Whitney says Citigroup Inc. Wachovia Corp and other U.S. banks are likely to announce dividend cuts in April because their earnings will not support currently scheduled payouts.

Hawkish comments from European Central Bank Governing Council member Axel Weber and news that German consumer price inflation unexpectedly accelerated in March further diminished hopes for ECB interest rate cuts in the near term, keeping the euro supported.

The euro was last up 0.1% at $1.5800, within striking distance of last week's historic peak at $1.5904.  The dollar rose against the pound and the New Zealand and Australian dollars on declining U.S. shares and worries that the credit squeeze might make the funding of current account deficits a challenge.  Sterling fell 0.7% to $1.9933, while the New Zealand dollar dropped 0.8% to US$0.7961. The Australian dollar dipped 0.2% to US$0.9172.

"The high-yielders are underperforming; maybe the market is starting to look back at the issue of risk. It's notable that the riskier currencies in terms of the current account deficits are underperforming today," said Shaun Osborne, chief currency strategist at TD Securities in Toronto.

"We are looking for a significant current account deficit position in the UK," Osborne said.

Analysts said that, while the euro had seen a mild bout of profit-taking, investors were reluctant to aggressively sell the single currency ahead of Federal Reserve Chairman Ben Bernanke's testimony before Congress and March's nonfarm payrolls report, both next week.

With gains of more than 8% since the start of the year, the euro is still on track for its best quarterly performance since late 2004, and analysts say further gains toward $1.60 could well occur.

"There are lots of hurdles for the dollar next week. The one saving grace for the dollar would be if European data disappoints. At this point, it's very difficult to bet against the euro," said Omer Esiner, foreign exchange analyst at Ruesch International in Washington.

Reports showing a small increase in consumer spending, tame inflation pressure and a drop in U.S. consumer confidence boosted the view that the Fed will cut interest rates further to stimulate the weakening economy..

The diverging interest rate paths and signs that the euro zone, at least for now, appears to be weathering the U.S. led economic slowdown helped push the euro to record highs last week.

DUBAI - Dubai International Capital and private-equity firm Bridgepoint plan to bid jointly for healthcare group Euromedic International for about 700 million pounds ($1.4 billion), the London Times said on Sunday.

DIC, an investment agency owned by the ruler of Dubai, and Bridgepoint hired UBS AG to advise on an approach for the European firm, which is owned by private-equity house Warburg Pincus, the newspaper reported, without citing anyone.

A sale of Euromedic, which makes diagnostic equipment, would be one of the biggest private-equity deals this year, at a time when the credit crunch has dented mergers and acquisitions volumes, The Times said.

DIC and Bridgepoint already have a relationship in the healthcare sector after Bridgepoint sold Britain-based Alliance Medical to DIC for 600 million pounds last year. Bridgepoint reinvested some of the proceeds into Alliance in return for a 17% stake, the Times said.

The two partners are looking at a three-way merger involving Euromedic, Alliance Medical and Gambro, which Bridgepoint bought last year, the newspaper said.

Euromedic is a provider of both diagnostic and dialysis equipment to the central and eastern European markets, as well as Britain. Alliance Medical is a mainly western European business in the diagnostics field, while Gambro, which serves western and northern European markets, specializes in dialysis care services.

Putting the three together would create a pan-European healthcare giant in the manufacture of diagnostics and dialysis technology and services, The Times said.

Jehad Saleh, a spokeswoman for DIC, could not immediately be reached for comment when Reuters called on Sunday.

WARSAW - Poland's largest IT firm Asseco Poland SOBK.WA plans several acquisitions of small IT firms in Germany, preferably with clients in the banking sector, the firm's chief executive was quoted as saying on Saturday.

Adam Goral, a CEO and shareholder of Asseco, said he wants the German unit created from taken-over firms to initially have a net profit of 15 million euros annually and list on the Warsaw bourse in the first quarter of 2009.

"At the moment we have two companies there (in Germany), by the end of the year we want to buy several more... What I would really want is to find a company in Germany that would connect us to the banking sector," Goral told Parkiet daily.

The CEO did not disclose the amount he was willing to spend on acquisitions in Germany, where it owns two small IT firms AP-AG and Matrix24.

Asseco built its expansion strategy on buying small firms across Europe, with most recent takeovers taking place in the Balkans, Austria and Germany. The firm also eyes companies in the Benelux and the US.

Goral reiterated the consolidated net profit of Asseco may reach 250 million zlotys ($112 million) this year, even if the takeovers fail.

Asseco shares, which in March were included in Warsaw bourse's blue chip WIG20 .WIG20 index, fell this year 3.1%, but overperformed the market which already had dropped by 13.6%.

TOKYO - Mitsubishi Heavy Industries Ltd will invest about 40 billion yen ($404 million) over the next four years to double turbocharger output as automakers seek fuel-efficient technologies, the Nikkei business daily said on Sunday.

Mitsubishi Heavy, the world's No. 3 maker of turbochargers, plans to build a new factory near Bangkok with annual output of over 2 million units, and would also expand production at plants in Japan and Amsterdam, the Nikkei said.

The moves together would double its output of turbochargers, which power most commercial vehicles, to about 7 million units by March 2012, it said without citing sources.  Turbochargers, used to boost an engine's horsepower, have the potential to reduce emissions and improve fuel efficiency in cars.

Mitsubishi Heavy trails rivals Honeywell International Inc and BorgWarner Inc, which together control 60% of the market, the Nikkei said.

KUWAIT - Kuwait does not expect a land dispute with Saudi Arabia to delay the construction of its $14 billion Al-Zour oil refinery with contracts to be awarded in April, newspapers on Sunday quoted an oil official as saying.  State refiner Kuwait National Petroleum Co (KNPC) launched a tender in June for the 615,000 barrels per day refinery, which would be one of the largest refineries in the world.

KNPC wants to build the refinery in the neutral zone between Kuwait and Saudi Arabia. But Saudi Arabian Chevron has a lease on some of the land on Kuwait's side, which KNPC has earmarked for the new refinery.  Negotiations between Saudi Arabia and Kuwait have taken place at a government level for months, but no solution has been announced so far.

Kuwaiti daily al-Rai quoted Ahmad al-Jemaz, deputy managing director of KNPC's Shuaiba refinery, as saying there was now a full understanding with Saudi Arabia on the location and there would therefore be no delays.

Daily an-Nahar also quoted him as saying there were no problems with Saudi Arabia regarding the location.  The papers did not say how the location dispute would be solved.  KNPC could not be immediately reached for comment.

Rai quoted Jemaz as saying contracts would be awarded in April. "We are currently in the stage of evaluating the bids. Once contractors are selected, the execution will begin," he said, according to the paper. 

BEIJING - Chinese state oil firm CNOOC is zeroing in on five refineries in eastern China for possible acquisitions as the offshore oil and gas specialist pushes ahead on downstream expansion plans, a Chinese paper reported.

CNOOC has identified five plants as targets and is eying two bigger plants to set up a refining base of more than 200,000 barrels per day in eastern province of Shandong, The Economic Observer said on Sunday.

The potential acquisitions are in parallel with CNOOC's plans to start its first wholly-owned major refinery in southern China this October, as the company seeks establish itself as China's third-largest refiner.

The targeted local plants are Fuhai Group, Kenli Petrochemical Company, Zhonghai Chemical, HaiKe Group and Shandong Shida Technology Group, each with processing capacity of 20,000-40,000 bpd, said the paper, without providing estimates on investment.

CNOOC is also looking at two bigger plants in Shandong each of 110,000 bpd capacity, and discussions were under way, said the paper.

"As the domestic Chinese fuel prices lag behind international markets and as the country frequently suffers from fuel shortage, it's a best chance to acquire local refineries," the paper quoted CNOOC's spokesman Liu Junshan as saying.

Shandong boasts more than a third of China's independent refining capacity, but most refiners there have been operating severely under capacity in the past few years, squeezed by record prices of feedstock, mainly imported fuel oil and rigidly capped domestic fuel prices.

CNOOC, parent of CNOOC Ltd, will leverage its main offshore oil operations, which will provide its refineries access to cheap crude and income when downstream margins are slim with crude price hovering above $100 a barrel.

The oil refining and fuel marketing businesses of the world's second-largest consumer have long been dominated by Sinopec Corp and PetroChina.

DUBAI - United Arab Emirates-based Dana Gas DANA.AD said on Sunday it would drill 19 new wells in Egypt this year to potentially double the firm's reserves in the North African country.

Abu Dhabi-listed Dana Gas, which relies on Egypt for the bulk of its income, would develop 15 exploration wells and four development wells at the Komombo concession in Upper Egypt and two concessions in the Nile Delta, it said in a statement.

"The gas sector in Egypt is expanding rapidly," Dana Gas Egypt country director Hany Elsharkawi said in a statement.  "This exploration and development programme could potentially double the size of our reserves," he said, without giving further details.

Dana Gas said in January it plans to invest about $500 million in Egypt and Iraq's Kurdish region this year to boost natural gas output.  Dana Gas could spend more than $170 million in Egypt this year, it said on Sunday.

The firm posted a near 15% rise in fourth-quarter revenue compared with the third quarter on higher production from its Egyptian gas operations and higher prices.

Shares of Dana Gas, which have fallen more than 14% this month, were down 2.87% at 0850 GMT.

TOKYO - Lehman Brothers was fleeced out of more than $355 million in a fraud the U.S. investment bank believes was perpetrated by two employees at Japanese trading house Marubeni Corp., according to a person briefed on the matter.

The fraud may have hit other financial institutions as well, according to the source, who spoke on condition of anonymity.

If Lehman's arguments are true, the scamsters perpetrated one of the more sophisticated corporate con jobs since Enron set up a fake trading floor to impress analysts. Lehman believes the scam included forged documents and an impostor.

Lehman is trying to recover a loan to a fund headed by Asclepius Ltd, a now-bankrupt unit of LTT Bio-Pharma Co. Lehman, had believed the money, supposedly to be used to finance medical leases, was backed by Marubeni.

The bank believes Marubeni is now shirking its obligations to pay back the partnership between Lehman, Marubeni and the fund, the person told Reuters.

Marubeni, which fired the two employees on March 10, said the two employees may have been manipulated by the former president of Asclepius, that Marubeni had not approved the leases and that police are working on the case.

The employees were contractors, spokesman Hirokazu Iwashima said, adding that there was "no involvement by Marubeni as a company."  Lehman plans to sue Marubeni, spokesmen in Tokyo and New York said. They declined to say how much money it had put into the business or elaborate on what exactly the former Marubeni employees did.

"We are confident in our legal claim which we will pursue until we receive repayment from Marubeni," said Matthew Russell, Lehman Brothers head of Corporate Communications, Asia-Pacific, in a statement sent to Reuters. 

LONDON - U.S. private equity firm JC Flowers has made an indicative offer to buy UK insurer Friends Provident for around 149 pence per share, or 3.5 billion pounds ($6.99 billion), sources familiar with the matter said on Saturday.

Friends Provident's directors were considering the approach, made in a letter last week, the sources said. The level of the offer would be reduced if Friends goes ahead with plans to pay a 5.6 pence per share dividend, the sources added.

Shares in the troubled insurer closed at 120 pence on Friday in a market in which financial shares have suffered as a result of the sub-prime crisis.  Investors had hoped for a bid of in excess of 160 pence, the embedded value of the shares reflecting the actuarial value of the company.

A spokesman for the company declined to comment and no one was available for comment at JC Flowers.

Friends has been overhauling its strategy since last year, when a planned merger with rival Resolution   failed, prompting the departure of its chief executive and posing persistent questions over the strength of its balance sheet.  Flowers first announced in January that it was considering making an offer for Friends.

FRANKFURT - The financial market crisis could cause losses of up to $600 billion at banks and other financial institutions worldwide, a German magazine reported on Saturday, citing an internal report by German financial watchdog BaFin.

The $600 billion figure represents a worst-case scenario for losses linked to the financial turmoil sparked by the meltdown in the U.S. subprime mortgage market, Der Spiegel magazine said in a story released in advance of publication on Monday.

"Based on current knowledge and the market situation, we believe $430 billion is more likely," the magazine quoted what it said was a 16-page report by BaFin as saying.  BaFin calculated that banks had already acknowledged about $295 billion in losses, of which Germany accounted for around 10%, the magazine said.

Extrapolating from this percentage, German banks could suffer $60 billion in losses in the worst case and $43 billion in the more favourable scenario, the magazine added.  However, the magazine also said BaFin cited the risk that the financial crisis could spread beyond the banking sector to affect hedge funds, insurance companies, pension funds and even some non-financial companies.

A BaFin spokeswoman declined to comment on the Spiegel report but said the watchdog had prepared a discussion paper ahead of a two-day meeting of financial regulators and central bankers in Rome that ended on Saturday.  A figure of around $300 billion for losses reported to date came from publicly available sources, she said.

German mass-circulation Bild newspaper reported on Friday that German banks could face as much as 70 billion euros ($110 billion) in writedowns on their investments as a result of the credit crisis, citing "speculation by banking insiders" for the report. 

TOKYO - Eisai Co said on Saturday it had been granted a favourable preliminary injunction ruling by a U.S. district court in its Aricept patent infringement lawsuit against Teva Pharmaceuticals, with the world's largest generic drugmaker.

"We are pleased with the court's preliminary injunction decision to prevent the sale of Teva's generic product before the expiration of the donepezil composition of matter patent," said Hajime Shimizu, Chairman & CEO of Eisai Corporation of North America and Eisai Inc.  "We will continue to actively protect our intellectual property throughout the world."

The Alzheimer's drug Aricept is Eisai's biggest product and one of the few products for Alzheimer treatment.  Eisai's U.S. patent runs out in 2010.

Eisai, Japan's fourth-largest drug maker, expects group sales to grow to 739 billion yen ($7.46 billion) in the current business year ending March 31, compared to 674.11 billion yen a year earlier, and expects a group net profit of 78.50 billion yen, up from 70.61 billion yen last business year.

LUXEMBOURG - Top fund executives are resigned to the probability of a credit crisis lasting many months or even years, with some looking back as far as the Wall Street crash of 1929 for a possible comparison.

Few speakers at the Reuters Funds Summit in Luxembourg were ready to be contrarian and call the bottom to a crisis that began with the U.S. subprime meltdown last year and has seen banking groups Northern Rock and Bear Stearns receive central bank support.

"The Fed interest rate cut is interesting but that isn't going to save the financial world. There's still a huge degree of uncertainty out there," Charlie Porter, chief executive of Thames River Capital, said in an interview on the sidelines of the Summit.

"The thing about this one (crisis) is that it's totally different.  I've been in the industry 25 years and it's very different to what we've seen before." 

U.S. stocks on Tuesday posted their biggest one-day gains in more than five years after the Fed cut its benchmark interest rate by three-quarters of a percentage point.  Schroders' vice chairman Massimo Tosato sees central banks able to resolve the crisis in 12 to 18 months, while Polar Capital Chief Executive Mark Kary also sees prolonged economic and market troubles.

"The consensus in the market is that some time in the summer will be the right time to buy ... I think I would prefer to be more cautious. This isn't going to be a short-lived economic downturn. It will be something more significant... Will it be like 1929? I don't think we know," said Kary.

With fund executives now viewing the crisis as worse than the bear market of 2000-2003, a slump similar to the 1929 crash that preceded the "Great Depression" of the 1930s suddenly does not look out of the question.

"You have clients asking if it might be like 1929 or the 1930s. Clients might have thought this was just a correction.  It's no longer "should I buy?" but "should I sell some more?" said Guy Wagner, managing director of Banque de Luxembourg's asset management arm.

On 3 September 1929, the Dow Industrials hit a record peak of 381, a level it would not touch again for over two decades. The Dow eventually plunged 48% in just 10 weeks.  Today, few executives are yet ready to dive in and buy stocks that on pure price/forecast earnings ratios may look superficially cheap.

"It's a very comfortable place to be being pretty neutrally exposed to these markets as they stand," Thames River's Porter said.

"Nobody is able to make the call. Somebody at some point is going to be a hero for calling the turn on financials. You've got a lot of money still piling into emerging markets even throughout this thing that's going on and at some point that's going to look really, really clever, but it may not be yet."

Henri Reiter, director of fund advisory firm Fund Market, said his portfolios cut equity weightings to minimum levels in December and he is now recommending cash.  "Right now we are advising clients not to invest, to stay in cash.  We've never had so much cash in our portfolios."

LONDON - Britain's FTSE 100 index ended lower on Friday as banks and oil shares weighed, although Enterprise Inns jumped on hopes of becoming a low-tax real estate investment trust.

The blue-chip FTSE 100 index closed down 24.6 points, or 0.4%, at 5,692.9, for a weekly gain of 3.6%, the biggest weekly rise since July 2006.

But the UK benchmark index is still down more than 11% for the year on concerns about a U.S. recession, and is on course for its worst quarter since the third quarter of 2002 and its third consecutive quarter of losses. "If you believe there is more to come, then this is a precursor. If you think things are stabilising, then it's pretty good that we are not just doing this 200-point range in the afternoon. It's pretty good that we are having a quiet day," said Tom Hougaard, chief market strategist at City Index Markets.

"I am a subscriber of the latter. I do believe things are calming down a bit," he said.

Major European indexes also finished the day lower.  Pub group Enterprise Inns surged 12.6%  after it said it expected to be able to convert into a low-tax real estate investment trust, overshadowing news that trading remains tough.

Banks suffered, with HBOS down 3.1%, Alliance & Leicester shedding 3.2%, Standard Chartered losing 1.7%  and Lloyds TSB off 1.8%.  Index heavyweight oil shares eased, tracking weaker crude prices CLc1. BP was down 1.8%, while Royal Dutch Shell eased 0.2%  and Tullow Oil dipped 1.9%.

Also on the downside, builders came under pressure after being buoyed by bid speculation in the previous session, as traders cited profit taking and data which showed that British house prices fell for the fifth consecutive month in March.

Persimmon topped the losers' list on the FTSE 100, down 5.1%, while Taylor Wimpey dropped 0.7%  and Barratt Developments lost 6.2%.  Miners were mixed, with Vedanta Resources advancing 3.2%, Anglo American up 1% and Antofagasta adding 2.7%. But Xstrata slipped 2.3%  and Kazakhmys eased 0.6%.

Food producers fell after Dairy Crest Group warned about a rise in raw material costs and said unprecedented milk price increases meant it would make a loss on one supply contract. Dairy Crest shed nearly 10%.

Cadbury Schweppes dropped 2.8% and Associated British Foods lost 1.2%.  Sainsbury fell 3%. Lehman Brothers reiterated its "underweight" rating on the supermarket chain, saying Sainsbury's pricing flexibility remained limited compared with its main competitors.

Shares in British Airways slipped 2.9% after chaos at the opening of its new Terminal 5 at London's Heathrow airport led it to cancel a fifth of scheduled departures there, and amid jitters ahead of Sunday's start of the "open skies" deal to create greater competition on trans-Atlantic routes. 

EUROPE - European stocks fell on Friday, as signs of building inflation pressures in the euro zone dampened hopes for any European Central Bank rate cut soon, while banks and oil stocks also dragged the index lower.

E.ON weighed on the utilities sector, falling 2.5%, after the world's largest utility said 2008 profits would come out at the lower end of its predicted range.

BP and Total were down between 0.6 and 1.8% on the back of crude prices, which fell as flows through Iraq's pipeline system were restored after disruption by a bomb attack a day earlier.

The FTSEurofirst 300 index closed down 0.5% at 1,265.47 points. But the index rose 3.2% on the week, its first weekly rise in the last five weeks and its largest weekly increase since early December.

"Inflation came in at a fairly negative tone in particular in Germany and that's definitely a hindrance for the ECB and hence the market is basically taking a break," said Franz Wenzel, strategist at AXA Investment Managers, in Paris.

Data showed consumer price inflation in Germany accelerated faster than expected in March, threatening to push inflation in the euro zone to a new record. European Central Bank officials said on Friday euro zone price pressures are "alarmingly high."

"We have to be prepared for the first-quarter earnings season. If you look at Deutsche Bank as an example, I think that's something we have to be prepared for, here in Europe," Wenzel added.

Germany 's biggest bank Deutsche Bank warned on Wednesday that credit market aftershocks could hit its 2008 profits.  Banks have recently struggled with billions of dollars of writedowns related to the fallout from the credit crisis linked to troubles in the U.S. subprime mortgage market.

They again were among the biggest negative weight on the index this session. RBS fell 1%, HBOS was down 3.1%  and UBS eased 2.4%.

Britain 's Lloyds TSB said its respected head of UK retail banking is leaving the bank. The stock fell 1.8%.  Data showed U.S. consumer confidence fell further into recessionary territory in March, hitting a 16-year low, even as other data showed incomes rose and inflation dipped in February.

Worries over the prospects for global growth also put consumer product stocks under pressure, with Nestle falling 0.9%  and L'Oreal shedding 2.4%.

Bucking the trend, growing speculation about a possible sale of Allianz's Dresdner bank unit lifted the German insurer's shares by 2.9%, although financial sources said no negotiations were underway at this time.  Meanwhile, Commerzbank jumped 3.4% after Germany's second-biggest banks provided some relief by reiterating its 2008 outlook.

NEW YORK - U.S. stocks fell on Friday as a profit warning from J.C. Penney raised concerns about slowing consumer spending while persistent worries about credit-related problems throttled financial stocks.  J.C. Penney Co Inc shares fell 7.5% after disappointing Easter sales forced the department store operator to cut its quarterly outlook and raised concerns about how retailers would fare as the economy lags.

Financial shares also sagged after a prominent analyst warned of more dividend cuts and forecast a further 25% drop in banking shares.  The S&P index of financial stocks slipped 2%, with Citigroup Inc among the top drags on the S&P 500, while American Express was the heaviest weight on the Dow.

J.C. Penney was "significantly worse than expected, and maybe people are saying it's even worse out there than we thought," said Rick Campagna, portfolio manager at Provident Investment Council in Pasadena, California, while noting that the day's trading volume was light, which makes market reactions more severe.

The Dow Jones industrial average .DJI fell 86.06 points, or 0.70%, to end at 12,216.40. The Standard & Poor's 500 Index .SPX slid 10.54 points, or 0.80%, to finish at 1,315.22. The Nasdaq Composite Index .IXIC dropped 19.65 points, or 0.8%, to close at 2,261.18.

For the week, the Dow was down 1.2% and the S&P was down 1.1 percent, while the Nasdaq was up 0.1%.

Shares of J.C. Penney fell to $37.48 after the department store operator's forecast and comments that the environment remains will remain tough throughout 2008. That weighed on other retailers, including Kohl's Corp, down 4.9% at $42.33, and Macy's Inc, down 6% at $21.97.

Hitting the financial sector was a research note from Oppenheimer & Co analyst Meredith Whitney saying that earnings will not support current dividend payouts in 2008 at Citigroup, Wachovia Corp and other U.S. banks.

Also, Credit Suisse said it expects Citigroup to post a first-quarter loss.  Shares of Citigroup fell 4.4% to $20.83 and American Express declined 3.8% to $43.15, while shares of Wachovia dropped 4% to $25.99. All trade on the NYSE.

Overseas, shareholders of Swiss bank UBS were gearing up for a possible vote on another capital injection, as markets see it as likely the bank may need to take further credit write-downs.

On the Nasdaq, shares of for-profit education company Apollo Group Inc. sank 26.9% to $41.21 and hit their lowest price since January 2007, a day after reporting worse-than-expected second-quarter results. The stock ranked second among the Nasdaq's biggest percentage losers. It traded as low as $39.41.

Helping stocks earlier in the session was data showing a key inflation gauge reflected only a small increase in prices.

Government data showed year-on-year inflation, as recorded by the core personal consumption expenditures price index, tapered off last month. Investors have been concerned about the impact of inflation rising even as the economy deteriorates.

Stocks on the plus side included Apple, which rose 2% to $143.01. A Bank of America research report said Apple is expected to launch a high-speed wireless version of the iPhone in the second quarter, and produce as many as 8 million of the devices in the third quarter.

AT&T Inc, the exclusive U.S. carrier for the iPhone and a Dow component, was unchanged at $37.66.

On the New York Stock Exchange, only 1.35 billion shares changed hands, far below last year's estimated daily average of 1.90 billion. On the Nasdaq, about 1.79 billion shares traded, below last year's daily average of 2.17 billion.  Decliners outnumbered advancers by a ratio of 2 to 1 on both the NYSE and the Nasdaq.

TOKYO - Japan's Nikkei average rose 1.7% on Friday as investors bought to raise their portfolio value in the second-to-last session of the financial year, led higher by property firms such as Mitsubishi Estate.

Friday's rise snapped a two-day losing streak and helped the Nikkei gain roughly 2.7% on the week, its biggest weekly rise since mid-February, with Kyocera Corp and other high-tech firms also contributing to the gains.

The dollar edged up slightly against the yen, giving exporters a helping hand, but stayed stuck below 100 yen .

"The market tested the downside in the morning and didn't fall, so investors are now turning to window-dressing given that Monday is the final day of the fiscal year," said Masayoshi Okamoto, head of dealing at Jujiya Securities.

"Once this got started, everyone else is joining in, after all, who's against a higher portfolio, even by just one yen?  But the market in April could be scary if people then dump shares."

Many market participants have been steadily pushing back the time frame for stocks to recover, with most now saying the Nikkei may not start a real rebound for months despite its current low valuation, though it is also unlikely to fall below 12,000.  On March 17 the Nikkei fell to 11,691.00, its lowest point this year.

"What we're probably going to see for a while is a market where you can't make money by buying and can't make money by selling, we'll hover around 12,300 for a while," said Tomomi Yamashita, a fund manager at Shinkin Asset Management.

"We're unlikely to see much in the way of rises until the summer, and there's a chance of at least one more drop before then, perhaps set off by something like a snap election if the current parliamentary deadlock can't be resolved."

The benchmark Nikkei rose 215.89 points to 12,820.47. The broader TOPIX was up 1.4% at 1,243.81.  Property shares jumped, led by Mitsubishi Estate, which rose 5.8%  to 2,470 yen.

"There's a very slight tendency for investors to turn defensive today, to go for shares where the movements of the yen won't affect things, all in connection with window-dressing," said Yumi Nishimura, a manager in the investment advisory section of Daiwa Securities SMBC.

Other strong property performers included Heiwa Real Estate Co Ltd, an office leasing company that owns the Tokyo Stock Exchange building as well as those of exchanges elsewhere in Japan. It rose 5.7% to 479 yen.

Sumitomo Realty & Development, a comprehensive real estate developer, climbed 4.1% to 1,778 yen.

High-tech shares also rose, with Kyocera Corp up 2.7% at 8,780 yen, becoming the third-largest contributor to the Nikkei by volume weight. The leader was industrial robot maker Fanuc Ltd, which rose 3.4% to 9,680 yen.  Exporters rose as well as investors sought blue-chips, with Toyota Motor Corp up 2.5% at 5,240 yen and Hitachi Ltd up 2%  at 624 yen. Canon Inc rose 1.3% to 4,700 yen.

Just after the close, NTT DoCoMo Inc, Japan's top mobile phone carrier, said it would cancel 1.01 million shares, or 2.2% of its outstanding shares, on March 31. The company's shares ended flat at 155,000 yen.  Trade was light, with 1.8 billion shares changing hands on the Tokyo Stock Exchange's first section, compared with last week's daily average of 2.17 billion.  Advancing shares beat declining ones by three to one.

HONG KONG - Hong Kong stocks rose on Friday, tracking a rebound in mainland stock markets, after strong earnings from several blue-chip firms helped to restore investor confidence.

The benchmark Hang Seng Index climbed 2.74% to close at 23,285.95 points on Friday, ending the week 10.3% higher but still down more than 16% so far this year.

The China Enterprises Index of Hong Kong-listed mainland companies, or H shares, finished up 5.10% at 12,432.53, ending the week 14.7% higher but down about 23% for the year.

"The (Hong Kong) market was seen to have bottomed out in the short run as confidence was gradually restored among investors and market sentiment improved after generally encouraging corporate earnings," said Patrick Yiu, associate director at CASH Asset Management.

Mainboard turnover increased to HK$97.54 billion (US$12.5 billion) from HK$79.95 billion on Thursday.  China's main stock index surged nearly 5% in its biggest daily rise since early February, as rumours swept the market about possible Chinese government aid to support stocks.  The benchmark Shanghai Composite Index closed up 4.94% after tumbling 5.42% on Thursday.

Investors saw valuations of Hong Kong and Chinese stocks attractive after their recent weakness, with the fundamentally strong economy in both Hong Kong and the mainland giving incentives to accumulate shares, brokers said.

"However, it's too early to confirm an uptrend as worries over the U.S. economy are still haunting the market," CASH Asset's Yiu said.

Chinese life insurer China Life led the market rise, jumping 6.07% to HK$27.95, while Ping An surged 8.26% to HK$57.  PetroChina climbed 5.17% to HK$9.96, as its mainland-listed A shares bounced after dropping to their IPO price.

Shares of China Mobile, the second most actively traded stock, gained 2.51% to HK$118.30 and China Netcom rose 3.43% to HK$22.45.  Goldman Sachs added China Netcom to its "conviction buy list" as it saw attractive valuations amid potential restructuring benefits. The stock had been rated a "buy".

Shares of CNOOC Ltd climbed 6.83% to HK$11.88 with analysts foreseeing strong earnings for the top Chinese offshore oil and gas producer this year, as oil prices topped $110 a barrel this month.

Mengniu Dairy rose 10.24% to HK$21.85 on the possibility it may raise prices after its rival Bright Dairy & Food Co, China's third-largest dairy producer, said on Friday it had obtained approval from the National Development and Reform Commission for milk price increases.

Shares in trading firm Li & Fung fell 9.89% to HK$28.70 after its full-year results missed expectations due to a slowdown in orders from its dominant U.S. market.

Shares of Sinofert Holdings jumped 9.18% to HK$6.90 after China's largest fertiliser trader posted a yearly net profit of HK$1.29 billion for 2007, compared with a consensus forecast of HK$1.2 billion.

SAO PAULO - Brazil's stock market fell on Friday as a slump in crude prices weighed on the shares of state-controlled Petrobras, while the national currency weakened on growing aversion to emerging market assets.

The Bovespa index of the Sao Paulo Stock Exchange closed 0.51% lower at 60,452.12 points, led by a decline in Petrobras and banking shares.

But shares of Brazil's biggest phone company, Oi Participacoes, jumped more than 6% after it reached an agreement to buy smaller rival Brasil Telecom.

The Brazilian real weakened 0.4% to 1.744 per U.S. dollar after two days of gains on continued dollar outflows and concerns over the U.S. economy.

Economic data on Friday in the United States was mixed, with a key inflation measure pointing to moderate price increases in February, though consumer confidence for March fell to the lowest in 16 years.

"The market is showing some caution," said Carlos Alberto Postigo, a currency trader at Banco Paulista. "Aversion to risk continues to be strong, so we will continue to see a volatile market, paying close attention to overseas markets."

Yield spreads of Brazil's overseas bonds over comparable U.S. Treasuries as measured by JPMorgan's EMBI+ index rose sharply, reflecting an increase in investors' risk aversion toward Brazilian assets. The index 11EMJ showed the country's bond spread widened by 7 points to 280.

Interest-rate futures at the BM&F commodities and futures exchange in Sao Paulo were mostly lower after Brazil's broadest inflation measure, the IGP-M index, rose less than analysts expected.  On the local stock market, oil giant Petrobras lost 0.68% to 72.61 reais, tracking a 2.3% decline in crude prices in New York and 1.5% drop in London.

Brazil 's biggest phone company, Oi Participacoes, surged 6% to 45.50 reais and smaller rival Brasil Telecom gained 6.3% to 22.59 reais.  Oi reached an agreement to buy Brasil Telecom for an undisclosed sum and a formal agreement should be announced next week, an Oi spokesman said. Reports in local newspapers valued the deal at between 4.5 billion reais ($2.58 billion) and 8 billion reais.

Concerns over the U.S. economy and investors' appetite for banking shares weighed on local banking shares, with Banco do Brasil falling 4.8% to 23.42 reais and Bradesco dropping 1.8% to 48.04 reais.

MEXICO CITY - Mexican stocks rose on Friday as new rules will take effect next week allowing the country's pension funds to invest a larger part of their portfolio in stocks.  The benchmark IPC index ended up 0.34% in light trading to 30,089.90 points and the peso currency MEX01 was flat at 10.6955 per dollar at the official central bank close.

In debt trading, long-term bond yields fell for the fourth day in a row. The price of the benchmark 10-year government peso bond rose 0.069 of a point to bid 101.916, pushing its yield down 1 basis point to 7.47%.  Traders said equities were helped by anticipation of fresh liquidity hitting the market on Monday.

Ixe brokerage said in a research note that some 42 billion pesos ($3.9 billion) from funds could eventually flow into Mexican equities.

"This is putting a new floor under the stock market," one trader said. "If you want to maintain an attractive return in your fund, you better be in the market, and you better buy before it rises."

Mexican equities were firmer than U.S. stocks as worries about credit-related problems continued.  Bad news in the U.S. is usually negative for Mexico, which sends some 80% of its exports to its northern neighbour.

But since last week, Mexico has been outperforming U.S. markets. Measures taken by the U.S. Federal Reserve to inject liquidity into stretched financial markets have dampened worries that Mexico's chief trading partner could fall into a deep recession.

Growing optimism that President Felipe Calderon will be able to push an energy overhaul bill through the nation's divided Congress in April also bolstered equities, traders said.

Among gainers on the day, Mexico's biggest retailer Wal-Mart de Mexico (Walmex) rose 1.94% to 43.57 pesos.  Shares of holding company Carso Telecom, used by Mexican tycoon Carlos Slim to control fixed line giant Telefonos de Mexico, advanced 3.14% to 55.80 pesos.

Among losing shares, Cement maker Cemex, the world's No. 3 cement producer, shed 3.17%  to 27.76 pesos as the company's New York traded stock fell 3.36% to $25.88.  Santander cut its rating on Cemex to "hold" from "buy" on Thursday, citing the U.S. housing crisis and a slowdown in sales in its key Spanish market.

GOLD - Gold fell more than 2% in a broad commodities sell-off on Friday, with a rise in the dollar and softer oil prices dampening the metal's allure as an alternative investment.  Other key precious metals, base metals and major soft commodities traded lower, with investors pocketing profits before the end of the quarter.

Gold fell to $926.50 before rising to $933.30/934.20 an ounce at 1540 GMT, against $951.80/952.60 in New York late on Thursday. Last week, it hit a record high of $1,030.80 an ounce before tumbling to a one-month low of $904.70.

"The market is really correcting itself, but it's a general move out of commodities. It's not just gold," said Jeremy East, head of metals trading at Standard Chartered Bank.

The market witnessed a heavy sell-off last week before rebounding on technical buying. Now it was witnessing a continuation of the downward trend, with people liquidating their positions and running for cash, East said.

"But I don't think the bullish trend is over. There is still buying interest, but in the short term the market has probably overdone on the upside. We are in a consolidation phase and gold may break back down below $900 again."

The dollar edged higher but hovered not far from record lows against the euro after U.S. data showed inflation pressures were tame in February, affirming expectations of further interest rate cuts by the Federal Reserve to boost a weakening economy. 

DUBAI - The Gulf's private wealth is estimated to swell by a massive 81% to $3.8 trillion by 2012 from an estimated $2.1 trillion in 2007, according to Oliver Wyman, a global management consultancy.

According to a recent study "The Future of Private Banking - A Wealth of Opportunity?" by the firm has found that the bull run in stock markets and unprecedented wealth creation has driven an 11% year-on-year growth in assets held by high net worth individuals (HNWI) globally. However, due to a tougher market environment, annual growth is expected to slow to nine per cent over the next five years.

"The combination of increased competition and more difficult market conditions has marked the beginning of a more challenging era for the global private banking industry. We expect growth rates to vary significantly by region, with the Middle East and Asia-Pacific - except Japan - leading the pack," said Stefan Jaecklin, Partner and Head of the Wealth and Asset Management Practice at Oliver Wyman.

Globally, an estimated 16% of HNWI wealth was held offshore in 2007, while about 52 per cent of the Middle East's private wealth was held offshore.

However, the study observes that there is a strong trend among the GCC's richest to repatriate wealth and invest in regional assets. For a market that was historically served offshore, players are now hiring teams to service clients onshore, with many foreign wealth management firms also increasing their coverage of the Middle East. Regulatory pressure on tax avoidance will continue to rise, with the share of tax-driven offshore banking set to decline, the study said.

The scarcity of talent - skilled and experienced client relationship managers - is also a challenge in the Middle East.  The share of entrepreneurs is fast growing as opposed to "old money", in the client mix. This is particularly relevant for the Middle East.

Many private banks and wealth managers operate under one roof with investment banking units. While synergies do exist, this set-up can expose private banks to significant reputational risk, as shown by recent market turmoil and write-downs.

Current risk management strategies in banking are heavily geared towards solvency and liquidity-related issues. However, in private banking, the latter are often less significant than non-financial and reputational risks. These risks endanger the franchise and might irrevocably destroy shareholder value.

Private banks operate as much in the luxury market as in banking. Branding is instrumental in attracting and retaining the "right" clients. Wealth managers therefore need to create a suitable message that can be conveyed via brand imagery as a key component in maintaining and growing the value of the business.

MEXICO CITY - Mexico's government should shelve a planned reform to revive the flagging state-run oil sector given passionate opposition to a possible clause to let in private partners, a top lawmaker said on Friday.

Mexico 's ruling conservatives have been courting the two main opposition parties for weeks over a reform to shore up the oil industry, whose output and exports have been declining. President Felipe Calderon hoped a bill could be voted on before Congress winds down on April 30.

Yet left-wingers bitterly oppose proposals to lower barriers to private investment and permit private oil joint ventures to speed up Mexico's entry to deepwater fields, and they have been winning over centrist lawmakers whose votes Calderon needs to pass a new law.

"At this point they shouldn't present it," said lower house speaker Ruth Zavaleta, of the left-wing Party of the Democratic Revolution, or PRD.

"A reform should not be presented when what it is has never been clear, and when it has polarized society and people think that any bill that's presented here in the chamber is going to be privatization, even if it's not privatization."

Firebrand leftist Andres Manuel Lopez Obrador, who narrowly lost the 2006 presidential election for the PRD, is leading street protests against the idea of oil partnerships, which he says is tantamount to privatizing state oil monopoly Pemex.

"It's not the right moment to present any energy reform proposal and we should focus on other things such as education or labour issues," Zavaleta told reporters.

Many expect the PAN, which is finalizing its proposal this week after apparently giving up on a multi-party document, to present a watered-down bill restricting the entry of private partners to less controversial areas such as refining and include changes all parties agree on, such as giving Pemex more autonomy.

ABU DHABI - Emaar Properties announced the opening of its first dedicated sales centre in Abu Dhabi on Saturday. The Emaar sales centre, located on Muroor Road, will showcase Emaar's entire roster of property developments.

A dedicated sales team will manage the new sales centre. "Abu Dhabi is one of the strongest markets for Emaar with customers from the Emirate showing overwhelming sales interest in our projects. The new sales centre will greatly add to their convenience by assuring them professional service and extensive information on Emaar's various developments," said Saif Al Mansouri, Sales Director of Emaar Properties.

"As with all our other sales centres, customers can walk into the Abu Dhabi sales centre and buy any of Emaar's properties across the UAE. Additionally, they can explore home finance options from several financial institutions, and discuss with sales and finance professionals on the finer details of their investment plans," said Al Mansouri.

Emaar Pakistan, the country subsidiary of Emaar Properties, will hold a balloting for registered customers of Crescent Bay development tomorrow.

The balloting follows overwhelming sales interest to the Crescent Bay launch recently. Potential customers who registered will be selected from the lot for a right to purchase homes and office space within the master-planned community.

To ensure fair and transparent allocation of the properties to all customers who had registered at Karachi, Islamabad and Dubai, Emaar Pakistan has commissioned the service of a third party to conduct the balloting.

Representatives of the media and the management of Emaar Pakistan will be present. Results of the balloting will be displayed on the Emaar corporate website (www.emaar.com) within a week after balloting, the company said in a statement on Saturday.

JOHANNESBURG - A poor North West mining community is planning to lobby world auto makers in a campaign to stop resources giant Anglo Platinum from contaminating water resources and destroying farming lands of rural South Africans.

Mining communities claimed last week that Anglo Platinum, the world's biggest platinum miner, was causing untold misery and that the world needed to know about it.

Modise Mokgatle, the leader of the Baphalane ba Mantserre community, said: "Not only have communities been displaced but water has been poisoned and what was once arable land has been turned into heaps of rock."

Mokgatle, who last week led members of his mining community on a march to the premises of AngloPlats' Amandebult platinum mine, said the recent report by international anti-poverty agency, ActionAid, was spot on with its assessment of the plight of mining communities.

More than 1 000 people from the Ba Mantserre community marched with Mokgatle.  Mokgatle said the Ba Mantserre planned to team up with other affected communities to take their plight to international auto makers, the biggest consumers of platinum.

"They have to know that the platinum they use for inputs is mined without care for the needs of those living near the deposits.  We will call for an international boycott of their products if they do not hold platinum suppliers responsible for adversely impacting the rights and interests of other land users," he said.

The ActionAid report said thousands of poor people in rural areas had their farming land destroyed through mining by AngloPlats.

NAIROBI - Hundreds of investors flocked stock brokerage offices and banks to purchase the much publicized Safaricom shares.  In Nairobi, queues of potential investors formed outside offices brokerage firms seeking to fill forms of the Safaricom Initial Public Offer.

Similar demand for the shares was witnessed all major towns.   At the Discount Securities offices located at Merica Hotel Building along Kenyatta Avenue, prospective investors queued for hours to buy shares.

"I want to buy shares and sell them once they appreciate," said Ms Dorcas Wamaru.  Many braved the chilly morning weather to buy the shares.  "They are coming in large numbers and we are advising them on what they need to do," said a broker.

At Equity Bank, the situation was the same.  A number of those interviewed said although there was controversy over the sale of the shares, they hoped it would be resolved.

"We hope we are not dancing to the tune of some conmen out to swindle the Government," said Peter Momanyi, a street trader.

"I have borrowed money to purchase the shares and then resell them once the price goes up and I return the borrowed cash," said Ms Milly Adhiambo.

Over 100,000 new investors have opened CDS accounts to participate in the region's largest Initial Public Offering (IPO).  The additions bring to over 900,000 CDS accounts holders.

Finance minister, Mr Amos Kimunya is however optimistic that the IPO will net more investors into the capital markets going by the current investor interest.  And with the anticipated surge in the number of investors, Kimunya says the Company Act ought to be amended in time before Safaricom holds its first Annual General Meeting (AGM).

"We are working on amending the Company Act to allow electronic participation in AGMs by shareholders,'' said Kimunya.

The amendment will allow electronic participation by shareholders in AGMs without having to physically attend.  This will save companies costs of publishing annual reports and hosting shareholders in AGMs.

The need to amend the Act came to the fore following the first KenGen AGM that netted over 400,000 new investors.  The move if realised could save Safaricom tens of millions of shillings as it's expected to net over a million shareholders.

The offer price of the Safaricom IPO at Sh5 per share is the lowest ever, and represents a 14 per cent discount on the actual book value, implying Safaricom has an equity value of Sh200 billion.  Kimunya said the offer is expected to deepen the capital market by over 25 per cent.

"The market capitalisation, currently stands at Sh800 billion and is set to surpass the Sh1 trillion mark after this offer", said a beaming Kimunya.   The shares will be sold in two categories; domestic and international pool.

The domestic pool will enjoy 65% shares and will include the entire east African community citizens and the international pool will be specifically be restricted to foreign institutional investors.

MADRID - Banks that lent Colonial's two main shareholders billions of euros could take possession of some of their shares in the indebted Spanish property company, a source close to the deal said on Saturday.

"That's the way negotiations are going at the moment so the banks could end up with part of the stakes and therefore would have some control of the company," the source said.  Colonial declined to comment.

If the banks took a stake in Colonial, it would be the first instance of lenders taking active control to sort out debt problems at a Spanish property company since the real estate market started to slow sharply late last year.

Dozens of smaller property companies are in talks with their banks or have gone into administration to work out how to deal with their huge debts as sales dry up after a 10-year boom.

Colonial's main shareholders, former chairman Luis Portillo and Luis Nozaleda, borrowed about 2 billion euros ($3.2 billion) to fund their stakes in the group, using shares as collateral for more debt. They own about 46% of Colonial.

Sources have said the loans were based on Colonial shares being worth 3 euros but the stock has tumbled since December, partly as shareholders unwound derivatives and takeover bids failed. The shares closed on Friday at 0.96 euros.  This month Investment Corporation of Dubai (ICD) offered to buy Colonial's rental business, one of the few areas that are holding up in the slowdown. 

KAMPALA - A government that provides good leadership and management of national resources makes it a lot easier for its citizens to escape poverty and become prosperous. It would be nice to rest the case of responsibility for poverty at this point but even countries with good leadership or economic management still have poor people. Conversely, countries with poor leadership and management also do have people who have escaped the clutches of poverty.

As one person pointed out, people get the leaders they deserve. If there is a problem with leaders that lack vision or the ability to implement policies that enhance development and thereby provide better opportunities for citizens then we ought to ask who keeps re-electing such leaders into office.  Bad leaders who continue to enjoy the perks that go with incumbency do not have a strong enough motivation to follow through policies and programmes that will uplift their citizens.

The importance of citizens playing their civic roles cannot be overemphasised but the poor need to assume greater responsibility in order to experience a change in their wellbeing. There is a Ugandan proverb that "when you are pursuing a thief do not spend your entire energy chasing, spare some energy in case the direction of the chase is reversed."

Individuals and households must take responsibility for their income. In many economies the lack of jobs or if jobs are available the lack of a living wage is blamed for the existence and persistence of poverty. While jobs are important, other means of getting income should not be ignored.

Any person or household that desires to become wealthy have to consider other sources of income like self employment, owning a business and investing. The tragedy for many people, Ugandans included is that the educational system only prepares students to expect employment.

The late Dr Samson Babi Mululu Kisekka, former Prime Minister and Vice President of Uganda, loved to tell Ugandans to become job creators. The practical man that he was Dr Kisekka loved to say that if at his age (he was well over 70 years) he was able to thrive in business then how about younger people. Many people were offended by Dr Kisekka's advice and continued asking for jobs.

MOSCOW - On Tuesday, several key figures in the Russian banking industry spoke with reporters on the important issues the sector faces. President of the Association of Russian Banks (ARB) Garegin Tosunyan, Chairman of the Coordinating Council of the CIS Finance and Banking Board Anatoli Kazakov, and President of "Congress Management Network" Igor Zadvornov discussed matters in the run-up to the Banking Forum 2008 in Vienna, which was initiated by the ARB and will be held April 24 to 26.

Following last June's first Banking Forum of the CIS and Eastern European Countries, this year's forum should serve as a platform for East and West banking and finance cooperation.

Tosunyan mentioned that, although the current situation on international markets is accompanied by certain risks, it can also be used to guarantee Russia's attractiveness within the financial community. He expressed the need for Russia to develop its infrastructure in the financial market and widen its lending activities, especially those designated for the long term.

Any financially developed country, he said, must possess a financial centre of a global stature. In addition to the financial districts already popping up all over Moscow, Tosunyan expects still more to appear in the coming years and called for Moscow to transform itself further into an international financial centre.

Furthermore, Tosunyan renewed previous reassurances that "the liquidity crisis [on the world market] will not threaten Russian banks." He also added that "even in the face of a possible shock situation connected to external factors, the Central Bank and government have all opportunities to avoid crisis."

Speaking often on this topic in the past several months, Tosunyan has attributed much of the stability of Russian banks in the wake of market turbulence to Central Bank protection of susceptible quarters of the banking sector. More specifically, he gave the example of Sberbank and Vnesh­torgbank, which "were active in crediting Russian credit institutions. All this resulted in a situation where the Russian banking sector was able to endure the echo of world fluctuations relatively easily," he told the Eastern European Banking Weekly earlier this month.

Many expect Russian banking representatives to continue their efforts to penetrate financial markets in the CIS and position the ruble as a reserve currency in the region during next month's forum. Anatoli Kazakov also commented on this issue, noting that currently 15% of trade circulation in the CIS realm - taken from a total amounting to $150 billion annually - is calculated in rubles. Buyers and sellers lose a substantial percentage due to commission fees. He emphasized the need to create a common payment system and increase the number of financial instruments utilized in order to make the ruble a full and valid means of payment in CIS countries.

Kazakov explained to journalists the task ahead: growing assets and the mutual penetration of CIS banks. While banks in the EU have a margin of capital penetration around 17%, this figure lies at a meagre 1.2%  in the CIS.

In keeping with Tosunyan, dollar domination on the world market significantly contributed to the widespread financial crisis. Incorporation of the euro as a second powerful European currency presented a first step toward currency multipolarity and the ruble stands a reasonable chance to play the role of the euro within the region of the CIS. However, stated the ARB President, the ruble can only become a reserve currency "in a package with energy exchange," referring to the required active development of oil and gas trading on stock exchanges in St. Petersburg and the Far East.

The forum next month anticipates participation from various state leaders, tax authorities, bank associations, and credit organizations from CIS countries as well as Eastern and Central Europe, China and the Philippines. ARB President Tosunyan noted an "unprecedented" show of interest in this year's forum.

DUBAI - Minister of Economy Sultan Bin Saeed Al Mansouri has discussed with Dr Ahmad Khalil Al Mutawa, secretary general of the Gulf Organisation for Industrial Consulting (GOIC), methods of developing the performance of the UAE industrial sector. The meeting was attended by Jamal Nasser Lootah, assistant undersecretary for Industrial Affairs, and Seed Al Rokn director of Industrial Development at the ministry.

Al Mutawa briefed Al Mansouri on the organisation's major services needed to support the performance of the industrial sector in the UAE.  These services are in fact essential to help investors to increase the level of productivity and save efforts and time. The organisation's future plans were also highlighted especially in the field of promoting small and medium industries.

"Developing the performance of the industrial sector has high priority in the government's schedule. We will provide all required efforts to leverage the performance of this sector to position it as a major source for the whole industries in the region," Al Mansouri said.

MILAN - Italy's Banco Popolare bank reported a 16% drop in 2007 net profit and sold assets to boost its capital as it changes strategy to pursue less risky businesses after heavy derivatives losses at a unit.

The bank turned in a net profit of 617 million euros ($972.5 million) in 2007, down from 732 million euros a year ago, it said in a statement late on Saturday. Total income fell to 3.37 billion euros from 4.28 billion euros the year before.  Consensus estimates had been for net profit of 821.53 million euros according to Reuters data.

Banco Popolare was created on 1/7/2007, from the merger of regional lenders Banco Popolare di Verona e Novara and Banca Popolare Italiana.

Banco Popolare is Italy's fourth-largest lender with a market value of some 7.4 billion euros, ranking it among Italy's mid-tier banks, which are overshadowed by the country's two giants, Intesa Sanpaolo which is worth around 53 billion euros, and UniCredit at 57 billion euros. Banco Popolare said it sold 33 branches in Tuscany to Credito Emiliano for 155 million euros and expects to have a capital gain after taxes of 110 million euros from the sale. Banco Popolare has a total of 2,200 branches.

It's the latest asset sale the bank carried out to strengthen its capital structure.  As a result of four extraordinary operations in the past months, the core tier 1 ratio goes from 4% at end 2007 up to a pro-forma 5 percent, while the tier 1 ratio goes from 5.2% at end 2007 to a pro-forma 6.5%, the bank said.

Citigroup analysts said in a recent note they expected a core tier 1 ratio of 4.6%, adding that selling branches was one of the options for the bank to strengthen such capital ratios.

"Other initiatives underway aim at reaching a tier 1 of 7.5% in the course of 2008," Banco Popolare said in the statement.

Indices

 

Exchange:                    FTSE 100 Index

Price:                           5,692.90

Today's Change:          -24.60 (-0.4%3)

Prev Close:                  5,717.50

52-Wk High:                  6,754.10

52-Wk Low:                  5,338.70

Top of Form

Bottom of Form

 

Exchange:                     DJ INDUSTRIAL AVERAGE

Price:                            12,216.40

Today's Change:           -86.06 (-0.70%)

Prev Close:                  12,302.46

52-Wk High:                  14,198.10

52-Wk Low:                  11,634.82

 

Exchange:                     NIKKEI STOCK AVERAGE 225

Price:                            12,820.47

Today's Change:           +215.89 (1.71%)

Prev Close:                   12,604.58

52-Wk High:                   18,297.00

52-Wk Low:                   11,691.00

Jargon Corner



       
Contact Us
Valid XHTML 1.0 Transitional