28 Mar, 2008
deVere Insight - 28th March 2008
In this edition we feature the Outlook from Barings
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
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
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
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
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
"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
"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 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
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
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
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.
- 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
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
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
- 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
- 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.
- 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
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
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
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
CNOOC is also looking at two bigger plants in Shandong each of
110,000 bpd capacity, and discussions were under way, said the
"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.
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
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
- 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
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.
- 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
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.
- 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
- 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
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
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
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
- 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
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.
- 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
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
"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
"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
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
"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
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."
- 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
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
"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
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
- 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
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
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
"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
"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
'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
'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.
- 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
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
.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
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
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
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
- 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
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
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
"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
"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
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
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 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
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
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
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
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
- 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
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
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
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
"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
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.
'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
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
- 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
Ixe brokerage said in a research note that some 42 billion pesos
($3.9 billion) from funds could eventually flow into Mexican
"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
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
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 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
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
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
- 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
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
"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
- 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
'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.
- 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
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
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
- 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
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
"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
The ActionAid report said thousands of poor people in rural areas
had their farming land destroyed through mining by
- 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
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
"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
"We are working on amending the Company Act to allow
electronic participation in AGMs by shareholders,'' said
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
- 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
"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
- 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
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
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
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
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
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
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
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
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
- 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
"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.
- 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
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
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
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
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
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