Posts Tagged ‘economy

22
Mar

Arrow Energy Accepts Takeover Bid From Royal Dutch Shell and PetroChina

SYDNEY (AP) — Arrow Energy Ltd., a major owner of gas assets in Australia, has agreed to a sweetened takeover bid from Royal Dutch Shell and PetroChina Co. worth Australian dollars 3.44 billion ($3.15 billion).

The deal comes as Australia ramps up major natural gas projects in response to booming demand from China and elsewhere as a less polluting fuel than coal to drive power generators.

Arrow said Monday in a statement to the stock exchange it received an offer from a joint venture company owned by Shell and PetroChina named CS CSG Pty. Ltd. for AU$4.70 cash per share. Two weeks ago, the joint venture launched its takeover bid with a cash-per-share offer of AU$4.45.

Under the deal, Arrow will spin off its assets outside Australia — including interests in China, India, Vietnam and Indonesia — into a new company, Dart Energy Ltd., in which existing Arrow shareholders will get a stake.

Arrow said its board was unanimously recommending that shareholders accept the offer.

Arrow Energy is an integrated energy company focused on supplying coal seam gas to eastern Australia and Asia high risk personal loans. It claims to have the largest coal seam gas reserves in Queensland state.

The company had been planning to list 20 percent of its Arrow International arm, retaining 70 percent, with the remainder already held by Royal Dutch Shell.

Among major integrated oil companies, Shell considers itself expert in converting methane to liquefied natural gas (OOTC:LNGLF) , or LNG, so it can be shipped rather than piped away from its source.

It has a separate LNG project in the works in Queensland that would benefit from the extra supply from Arrow.

PetroChina Co. is Asia’s largest oil and gas company. Last year it signed agreements with Exxon Mobil Corp. (NYSE:XOM) worth $41 billion to buy LNG from the yet-to-be developed Gorgon gas field off Australia’s far northwest coast.

Arrow Energy Accepts Takeover Bid From Royal Dutch Shell and PetroChina

12
Mar

Financial Stocks: Regional banks gain, Citi stock pares gains

SAN FRANCISCO (MarketWatch) — U.S. regional bank shares added to weekly gains Thursday, while Citigroup shares moved higher as investors cheered Chief Executive Vikram Pandit’s relatively upbeat outlook.

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The gains in bank stocks helped the financial sector outperform the broader market. The Financial Select Sector SPDR Fund , an exchange-traded fund that tracks the financial stocks in the S&P 500 , rose 0.5% while the broader index added 0.2%.

Shares of Huntington Bancshares added 2.9%, Fifth Third Bancorp rose 2% and KeyCorp rose 2.8%.

Regional banks had rallied in the previous session after a report suggested Britain’s Barclays was hunting for a retail bank acquisition. Also, several bank executives were speaking at a Citi investment conference in New York City this week.

News Hub: Credit Markets Come Back to Life

Credit markets are showing signs of life after a year of lows and two years after the collapse of Bear Stearns auto loan. Grianne McCarthy tells the News Hub panel why U.S. companies are feeling more confident about the economy.

Citigroup shares climbed 4% to $4.12 after Pandit said that the banking giant should be able to cover future credit losses in its troubled local consumer lending business. There are “early signs of improvement” in the division, he said at the conference. See story on Citi CEO’s remarks

The stock came off its intra-day high of $4.16 after the CEO said the U.S. government may sell its 27% stake in the banking giant. See pulse on possible government sale of Citi stake

Citi shares have advanced 18% this week and 25% for the year-to-date, bolstered by reports Wednesday that a sale of trust preferred securities had gone well.

The SPDR KBW Bank ETF has benefited from the rally in Citi and other banks. That ETF is up about 19% for the year-to-date and is one of the best-performing ETFs in recent months. Read more about financial and bank ETFs

Earlier this week, the KBW Bank ETF hit a fresh 52-week high. On Thursday, it rose as high as $25.21. Its next hurdle is $25.44, which it last traded in November 2008.

Financial Stocks: Regional banks gain, Citi stock pares gains

10
Mar

Senate to pass jobless aid, business tax breaks

WASHINGTON – Legislation blending help for the jobless with popular tax breaks for businesses and individuals is slated to pass the Senate Wednesday over protests from conservatives who say it adds too much to the $12.5 trillion national debt.

But compassion for the jobless and the political power of an annual package of tax breaks is likely to produce a bipartisan vote to pass the measure, even though it would add more than $130 billion to the budget deficit over the next year and a half.

The bill would provide unemployment benefits of up to 99 months in many states for people mired in joblessness as the economy slowly recovers from the worst recession in decades. The measure easily cleared a procedural hurdle Tuesday by a 66-34 vote, with eight Republicans voting with Democrats to break a GOP filibuster.

The measure illustrates the great extent to which direct help for the jobless and the poor makes up a large portion of Democrats’ election-year agenda on jobs — and threatens to squeeze out other items amid concerns about a budget deficit projected at a record $1.6 trillion this year.

The sweeping bill cleans up a host of unfinished congressional business from last year that languished as the Senate focused on health care. It would also prevent doctors from absorbing a 21 percent cut in Medicare payments and extends through December a generous 65 percent subsidy of health insurance premiums for the unemployed under the COBRA program, at a cost of $10 billion.

Democrats also hope to finish work this week on a far smaller job-creation measure blending additional highway spending with new tax breaks for companies that hire the unemployed inferred heaters. The Senate could clear the measure for President Barack Obama’s signature by Friday.

Wednesday’s larger bill also provides the annual extension of $26 billion worth of tax breaks for businesses and individuals that are popular with senators in both parties.

The $66 billion cost of providing additional months of unemployment checks — the core benefit is 26 weeks — is added directly to a budget deficit expected to hit $1.6 trillion this year. Federal cash to help states with Medicaid adds about $25 billion more.

“Even though these programs may be good for your state, a senator has an obligation to stand up and say ‘no more,’” said freshman GOP Sen. George Lemieux of Florida. “No more spending our kids’ future. No more bankrupting the promise of this country.”

But Democrats said it would be heartless to cut off unemployment benefits to the long-term jobless and contended that the benefits inject demand into the economy, helping to lift it.

“This is not just some technical bill,” said Sen. Max Baucus, D-Mont. “This bill helps real people. Failure to enact this bill would cause real hardship. Failure to enact this bill would cost jobs.”

The tax breaks include a property tax deduction for people who don’t itemize, lucrative credits that help businesses finance research and development and a sales tax deduction that mainly helps people in the nine states without income taxes.

Senate to pass jobless aid, business tax breaks

25
Feb

Asian Shares Falter on Concerns About U.S. Economy

SINGAPORE — A tepid rally in Asian shares faltered early on Thursday and the dollar rose after the Federal Reserve chairman Ben Bernanke’s reaffirmation of an extended period of low U.S. rates boosted risk-seeking but also raised some concerns about global growth.

The Nikkei 225 average in Japan rose initially, helped by exporters like Canon and as Toyota Motor reversed most of its losses of the past two days after its chief apologized to consumers and pledged reforms to skeptical U.S. lawmakers at Congressional hearings. Toyota’s U.S.-listed shares jumped 3.9 percent.

But a more than 2 percent slide in Denso Corp. weighed on the broader Tokyo market after authorities said the FBI has raided three Detroit-area Japanese auto parts makers for a sealed federal antitrust investigation, including the Toyota suppliers Denso and Tokai Rika.

“The market welcomed a rebound in U.S. stocks after news that the country will continue its low rate policy,” said Yutaka Miura, a senior technical analyst at Mizuho Securities. “But we’ve seen a series of worse-than-expected economic data from America lately and uncertainty about the outlook for the U.S. economy is increasing.”

The MSCI Asia excluding Japan index fell 0.43 percent by midday, and sectors that fell the most were industrials and technology.

The Nikkei closed 0.95 percent lower.

A report on U.S. new home sales on Wednesday highlighted the Fed’s predicament. Sales slumped more than 11 percent to a record low, suggesting the sector at the center of the financial crisis had yet to fully heal.

Mr. Bernanke’s assessment of the economy was also grim, further curbing the speculation of quicker policy tightening that had been spurred by the Fed’s raising of the discount rate last week.

He also said a weak job market and tame inflation warrant low interest rates for “an extended period,” making clear that policy tightening is some time away, which helped the Dow Jones Industrial average rise 0 best humidifiers.89 percent.

The dollar fell initially in Asia but the trade-weighted index soon recovered to 80.96.

Gold was at $1,096 an ounce, far from a the previous day’s high of #1,107.95.

Oil prices also hovered just above the $80 mark but were also off the previous day’s highs at $80.45, a level hit when stock markets rallied on the back of Mr. Bernanke’s remarks despite a bearish report showing a build up in U.S. crude stockpiles.

The euro stayed weak at $1.3483, paring further the gains it had made soon after Mr. Bernanke’s remarks and heading closer to a nine-month low of $1.3442 struck last week.

Worries about a possible downgrade of Greece weighed on the European single currency, pushing it down from above $1.36 on Wednesday.

Standard and Poor’s said it may cut Greece’s BBB+ rating by one or two notches within a month, citing downside risks to growth that could hinder the country’s deficit-cutting plans.

“The Greek situation remains fluid. So acrimonious discussions between Athens and Brussels could easily result in further near term euro slippage,” Citigroup said in a note.

But Citigroup also said that with euro net short positions at a record high, any positive news from Greece in the coming weeks could lead to a bounce in the single currency.

The euro has lost over 10 percent since late November as fiscal woes in Greece intensified in the past few months leading to a huge sell-off by investors.

Reuters

Asian Shares Falter on Concerns About U.S. Economy

Hot News: Targets 4Q profit rises 53.7 percent

10
Feb

Earnings Preview: PepsiCo Inc.

NEW YORK – PepsiCo Inc., maker of soft drinks and snacks, reports its fourth-quarter results before the market opens Thursday.

WHAT TO WATCH FOR: Changes in the way consumers are buying snacks and soft drinks as they continue watching their wallets. PepsiCo Inc.’s beverage sales have fallen in North America as people either cut out the expense or started switching to healthier juices and teas. Snack sales have held up better as people buy more food at grocery stores and eat out less often.

Analysts expect PepsiCo to report that its beverage sales remained soft in the fourth quarter. They will focus on the company’s snack division, Frito-Lay, maker of brands like Doritos, where growth could slow in the quarter.

Competition in the snack business is intense, wrote Bill Pecoriello, an analyst who heads ConsumerEdge Research LLC.

“Frito has been losing share even as year-over-year price increases and promotional intensity come more in line with historical norms,” he said short term personal loan.

He said international growth trends need to hold up as well because they have been driving the company’s growth.

WHY IT MATTERS: PepsiCo makes products that people at varying income levels buy, so its results offer a window into how shoppers are spending their money.

WHAT’S EXPECTED: Analysts polled by Thomson Reuters expect PepsiCo to earn 90 cents per share on revenue of $13.27 billion.

LAST YEAR’S QUARTER: PepsiCo reported profit of $719 million, or 46 cents per share a year earlier. Excluding restructuring and other one-time items, the company earned $1.39 billion, or 88 cents per share.

Earnings Preview: PepsiCo Inc.

20
Jan

Kraft to Acquire Cadbury in Deal Worth $19 Billion

After months of fiercely resisting any deal, Cadbury agreed on Tuesday to an improved takeover offer from Kraft Foods, worth about $19 billion.

For Kraft, the deal offers a chance to expand its footprint in emerging markets and in higher-growth sectors like gum and candy.

“It transforms the portfolio, accelerates long-term growth and delivers highly attractive returns,” Irene B. Rosenfeld, Kraft’s chairwoman and chief executive, said in a statement.

Cadbury for its part will benefit from the supply chain of a larger company, said Jon Cox, a food and beverage analyst at Kepler Capital Management in Zurich.

But the prospect of a takeover of Cadbury, the 186-year-old British company, especially by an American multinational like Kraft, sent shudders throughout Britain and prompted a wave of public protests.

The Mail on Sunday, one of the biggest-selling British newspapers, ran a “Keep Cadbury British” campaign.

“It’s sad to see another British company bought up by a multinational,” Mr. Cox said, “but that’s finance.”

Prime Minister Gordon Brown said Tuesday that his government was “determined that the levels of investment that take place in Cadbury in the United Kingdom are maintained,” and that “at a time when people are worried about their jobs, that jobs in Cadbury can be secure.”

During a conference call Tuesday, Kraft executives reiterated that the company would keep a strong presence in Britain and would be a “net importer” of jobs in the country.

The move will also continue the consolidation that has dominated the food business over the last decade.

While mergers involving food companies dipped somewhat last year — preliminary data from the Food Institute, a trade organization, showed 58 acquisitions in 2009, versus 130 in 2008 — analysts expect deal-making to pick up again as companies seek greater scale and presence in developing countries.

“We’re in the middle of a little wave of deal activity,” Greg Pearlman, the head of the food and consumer group at BMO Capital Markets, said. “Will they all be as big and global and transforming as this? No good credit score. But I do think there’s some pent-up demand for strategic acquisitions.”

That may present challenges for companies like Hershey that lack an international presence to pursue global competitors. Hershey, based in Pennsylvania, had been readying a potential bid for Cadbury, according to people briefed on the matter. Yet with Cadbury’s board recommending the new Kraft bid, a counteroffer from Hershey seems unlikely.

The agreement between Kraft and Cadbury came together over the weekend, after weeks of sometimes blistering volleys.

Cadbury in particular fought fiercely. Its chairman, Roger Carr, derided Kraft as showing “contempt” for the well-known brand and dismissed its hostile bidder as a low-growth conglomerate.

On Tuesday, Mr. Carr softened his language, saying in a joint statement that the new offer “represents good value for Cadbury shareholders.”

“For Cadbury shareholders, it’s the best possible deal, given they were dealt a bum hand, because there were no counterbidders,” Mr. Cox said. “The clear winner is Kraft.”

Kraft’s original, unsolicited offer, made in September, was worth about $16.7 billion.

The new offer is about a 5 percent premium over Cadbury’s closing share price of 807.5 pence on Monday and a 14 percent improvement over Kraft’s first offer in September.

Under the terms, Kraft will pay 500 pence in cash and offer 0.1874 new Kraft shares for each share of Cadbury. That amounts to a payment of 840 pence ($13.80) for each Cadbury share. Additionally, Cadbury will pay out a special dividend of 10 pence a share.

Tuesday was the last day Kraft could raise its offer under British takeover rules. Cadbury shareholders have until 1 p.m. London time on Feb. 2 to decide whether to accept it. While the terms of the offer are final, Kraft reserved the right to raise its bid if a rival offer were made.

William Neuman contributed reporting.

Kraft to Acquire Cadbury in Deal Worth $19 Billion

17
Jan

Sponsor Takes the Next Step in Tennis

LAS VEGAS — Fernando Verdasco was straining against a leg-press machine as he raised 710 pounds, yet his strength and conditioning coach, Gil Reyes, was making the most noise. Reyes bellowed in two languages as Verdasco, a Spanish tennis star, raised the massive load 14 times before Reyes finally shouted at him to stop.

“He’s a beast,” Reyes said last month. “I stopped him because I didn’t want him to break down. If he totally maxed out today, there’s a good chance it would throw him off stride tomorrow or the next day.”

Reyes, an American who speaks in the tones and rhythms of an evangelist, was Andre Agassi’s trainer and protector for nearly 20 years. He is now a company man: one of three pillars of the unusual player-development program created and financed by Adidas.

The other pillars are Sven Groeneveld, a veteran Dutch coach who started the program in 2006, and Darren Cahill, an Australian coach who with Reyes helped Agassi keep scaling the heights into his mid-30s.

Groeneveld is based in Amsterdam, and Reyes and Cahill in Las Vegas, the program’s training base. Reyes still works out of his private gym decorated with Agassi’s eight Grand Slam singles trophies and 1996 Olympic gold medal. Agassi remains a frequent visitor and is also an occasional hitting partner and counselor for the players.

But the program’s scope is broader, with Groeneveld and Cahill traveling to tournaments worldwide to offer on-site assistance with Groeneveld’s assistant Mats Merkel.

The executive who devised and supervises the operation is Jim Latham, an American expatriate and former Duke tennis player who saw the program as a way to protect his company’s investment in increasingly young athletes who sometimes lacked structure and expert advice.

“It’s a compact, mobile tennis academy,” said Latham, the head of global sports marketing for tennis at Adidas.

It is also a delicate diplomatic mission in a cutthroat, territorial sport unaccustomed to coaches spreading the wealth of their knowledge democratically or to manufacturers striving to be more than suppliers of apparel and juicy contracts.

“It’s a given that we had to have elite-level coaches,” Latham said. “But the other given for me was that it had to be people who were great communicators, who could go into it with all these people and make them feel included, rather than ‘my way or the highway.’ ”

Manufacturers’ teams are the foundation of sports like Formula One auto racing. But the Adidas developmental team remains unique in tennis, and though it is not without detractors who question its part-time approach, it is playing an increasingly visible role in the sport and has been involved in some big hits as well as misses.

The hits include Ana Ivanovic’s victory at the 2008 French Open and rise to No. 1, and Verdasco’s surprise run to last year’s Australian Open semifinals and rise into the top 10. The team, Groeneveld in particular, also provided counsel and support to Caroline Wozniacki, a Danish teenager coached primarily by her father who broke into the top four last year after reaching the United States Open singles final.

The misses include players like Evgeny Korolev, Anna Chakvetadze, Marcos Baghdatis and Sania Mirza, whose rankings and singles careers have not prospered. Ivanovic also dropped out of the top 10 after a mediocre 2009 season but spent the off-season working primarily with Groeneveld.

National tennis federations have long been involved in developing talent and providing coaching at the professional level. Some private academies have done the same.

But no other company has yet plunged in, and what also makes Adidas’s program unusual is that it does not attempt to be full service, but rather a consultancy business card design.

Latham said Adidas had contracts with about 75 players, more than 40 of whom are in the singles draws at the Australian Open beginning Monday. Luminaries like Jo-Wilfried Tsonga and Justine Henin have not sought help, but Latham estimated that 30 to 35 players have had some contact like seeking a quick tip from Groeneveld or training in Las Vegas, which requires an invitation from Latham.

Working with multiple players reduces a coach’s vulnerability and dependency.

“These guys can give unsugarcoated advice,” Latham said of his team.

But the Adidas principals emphasized that their input should be supplemental and that they wanted top players to have full-time coaches.

“This is not about a threat, this is not about better than, or instead of, it’s a matter of one plus one maybe might equal three,” Latham said.

But Verdasco and Ivanovic thrived under the system when they were without full-time coaches. Patrick Mouratoglou, who owns a prominent academy in France, said that he tried to play a similar role to many players but that he felt it undermined their relationships with their personal coaches. He now focuses on one or two players.

“I don’t doubt the quality or competence of Sven or any member of the team,” he said. “I just think the system is flawed. I stopped doing it. At first, you feel good because everyone loves you, and you give a bit to everyone, and everybody wants you on their court giving input. It’s a drug. If you need affection, it’s amazing. If you want results, it doesn’t work.”

Cahill said that he was sensitive to personal coaches’ concerns but that the benefits of exchanging thoughts and challenging preconceptions outweighed the negatives.

He had other options. Early last year, he trained on a trial basis with Roger Federer in Dubai. But Cahill, who has two children and increasingly strong ties to Las Vegas, said he was not prepared to handle the travel commitment Federer required. Instead, Cahill joined Adidas last March while continuing to do television commentary for ESPN and to work with Agassi’s foundation in Las Vegas.

Latham said the team’s existence has helped Adidas recruit several players, including Daniela Hantuchova, a 26-year-old Slovak who trained with Cahill and Reyes in the off-season. But Latham and Baghdatis failed to reach an agreement, and Baghdatis is no longer under contract.

Verdasco, 26, who won a warm-up event Saturday in Australia, is definitely still with the program: exchanging embraces and fist bumps with Reyes during intense training sessions. He is seeking a second home in Las Vegas to be closer to Reyes and his weights.

Reyes prefers to work one on one, so visitors are limited to three at a time. From the outside, his gym looks like a suburban home. It is in a gated community on a road named after Agassi, who built a house next door for his parents as well as a practice court. The carpeted weight room is filled with machines Reyes designed and built himself for Agassi because nothing tennis specific enough existed.

“If this is the future, I don’t really know,” Verdasco said of the Adidas program. “But of course it really helped me a lot, because I really found Gil that I have this strong connection with. Maybe if Adidas took another guy, maybe I wouldn’t have that same connection, and maybe I wouldn’t like it as much.”

Sponsor Takes the Next Step in Tennis

11
Jan

Randgold Uses Turbulence To Etch New Base

Gold-mining stocks took some hard shots after the U.S. dollar began to strengthen in early December.

The Metal Ores-Gold/Silver industry group fell out of the top 20 the week before Christmas and was as low as No. 58 a week ago.

But things appear to be changing. The dollar began to sag again, and gold-mining stocks rallied. As of Friday's IBD, the group had hustled back up to No. 28 out of 197 industry groups.

Randgold Resources (NasdaqGS:GOLD - News) turned the retreat into a constructive exercise. It is shaping a base that could become either a flat base or a square box. The potential buy point 19 the same in either case — 90.40.

The base shows one net week of distribution. That's not what you want to see, but it isn't terrible no teletrack payday loan. The Accumulation/Distribution Rating has slipped from A- to B during the base-building process. The price action has been mostly tight, which is positive.

The Relative Strength line has been in a general uptrend since November 2008, though it's been a choppy ride. It's turned up in the past couple of weeks, but is not near the high it made six weeks ago.

Unlike some of its fellow gold miners, Randgold found consistent support at its 10-week moving average in recent weeks.

Randgold Uses Turbulence To Etch New Base

08
Jan

Mixed Data in Britain Prompts Bank to Keep Rates Unchanged

PARIS — The Bank of England held steady on interest rates and monetary stimulus Thursday amid mixed signals on the economic recovery in Britain, while separate data showed the moderate rebound in the euro area progressing.

The British central bank’s monetary policy committee voted unanimously to leave the benchmark interest rate at 0.5 percent and to keep its program for asset purchases, enacted as an unorthodox means of stimulating demand, at £200 billion, or $319 billion. The bank had expanded the asset-purchasing plan in November for a third time but chose to leave it unchanged last month.

The bank said in a statement that it expects the asset purchases “to take another month to complete,” and that “the scale of the program will be kept under review.”

Analysts had expected the central bank to remain cautious and wait another month before making any policy shift.

By contrast, some other countries have already started to scale back emergency stimulus packages.

The central bank of Switzerland said in December that it would stop buying corporate bonds. The European Central Bank has also announced plans to scale back its extraordinary fund auctions, while the Federal Reserve is expected to begin draining liquidity from the U.S. financial system this year.

In Britain, most of the central bank purchases have been British government bonds, or gilts. The bank is expected to complete the last of these purchases before its meeting next month, by which time it will have new data available, including fourth-quarter G.D.P. numbers.

Those numbers are expected by economists to show that the economy returned to positive growth, having entered recession in the spring of 2008 no faxing payday loan.

Britain has lagged its rivals in coming out of recession. The economies of France, Germany and the United States all started growing again during the third quarter of last year.

Meanwhile, in a report released Thursday, the European Commission said economic sentiment in the 16 countries using the euro improved in December, with both consumer and industrial confidence rising modestly.

The European Commission’s economic sentiment indicator rose to 91.3 in December from 88.8 in November. This was above the consensus forecast of 90. Economists said the numbers were consistent with an ongoing but moderate recovery.

German industrial orders were up 0.2 percent on the month in November, the Economy Ministry said. That followed a 1.9 percent decline in October.

Consumer-related data from the region, however, were softer.

Another release showed that retail sales in the region fell by 1.2 percent in November following a 0.2 percent rise in October.

The recent economic data from Britain have also been mixed.

British house prices rose 1 percent in December, ending the year 1.1 percent higher than at the end of 2008, according to the mortgage lender Halifax.

The Society of Motor Manufacturers said Thursday new car sales in Britain rose last month 39 percent from a year earlier as government incentives bolstered demand.

At the same time, consumer confidence fell in December, the Nationwide mortgage lender said Wednesday.

Mixed Data in Britain Prompts Bank to Keep Rates Unchanged

Hot News: Wall Street trades mixed as investors await key employment data

16
Dec

Shares of homebuilders climb on housing reports

NEW YORK – Shares of homebuilders climbed Wednesday after reports showed an uptick in home construction and mortgage application volume.

Construction of new homes and apartments rose 8.9 percent in November to a seasonally adjusted annual rate of 574,000 units, the Commerce Department said. The gain represented strength in all areas of the country, though the rise was slightly lower than economists had expected.

Applications for new building permits rose 6 percent to an annual rate of 584,000 units, a stronger showing than predicted.

Meanwhile, mortgage application volume inched up 0.3 percent last week, the Mortgage Bankers Association said Wednesday.

With interest rates still hovering near historical lows, homeowners are looking to lock in lower monthly payments. The average interest rate on a 30-year, fixed-rate mortgage rose to 4.92 percent last week from 4.88 percent a week earlier. It was the second straight week rates increased.

The survey by the trade association provides a snapshot of mortgage lending activity among mortgage bankers, commercial banks and thrifts no fax payday advance. It covers more than 50 percent of all residential retail mortgage originations each week.

Shares of homebuilders were higher in afternoon trading. Hovnanian Enterprises Inc. gained 43 cents, or 11.4 percent, to $4.23; Lennar Corp.’s stock rose 66 cents, or 5.5 percent, to $12.71; Meritage Homes Corp. added 94 cents, or 5.9 percent, to $16.97; Ryland Group Inc. gained 53 cents, or 2.9 percent, to $18.60; and shares of MDC Holdings Inc. advanced 97 cents, or 3.4 percent, to $29.72.

Pulte Homes Inc. climbed 49 cents, or 5.5 percent, to $9.38 and KB Home’s shares rose 86 cents, or 6.7 percent, to $13.68. Toll Brothers Inc. edged up 57 cents, or 3.2 percent, to $18.47, while DR Horton Inc. rose 46 cents, or 4.7 percent, to $10.27.

Shares of homebuilders climb on housing reports

30
Nov

Asian shares rebound but eyes on Dubai

HONG KONG (Reuters) – Asian stocks recovered after last week's steep sell-off over the Dubai debt crisis on growing speculation the fallout from a potential default will be limited, while assurances from various authorities also helped calm nerves.

European stock index futures pointed to a higher open, futures for the Eurostoxx 50, German DAX and French CAC gaining 0.3-0.4 percent.

Banking shares, which bore the brunt of the selling on Friday on worries about banks' exposure to Dubai World and property group Nakheel, were at the forefront of Monday's rebound in Asia.

"I think it's going to be okay. At the end of the day Dubai and Abu Dhabi need each other. And there will be a lot of pressure on Abu Dhabi to step in, from the neighboring countries," Templeton Asset Management fund manager Mark Mobius told Reuters.

Hong Kong shares, which posted their biggest single day loss in eight months on Friday, and stocks in Japan, which ended last week at a four-month low, were among the strongest performers in the region on Monday.

In South Korea, the government pledged it will stay vigilant while a top Indonesian central banker said there would be no fallout from Dubai's debt problems on Southeast Asia's biggest economy.

South Korean markets have been especially sensitive to international financial instability mainly because the highly leveraged local banking system is heavily exposed to the global credit market situation.

The MSCI index of Asia Pacific stocks traded outside Japan (.MIAPJ0000PUS) rose 2.8 percent while the Thomson Reuters index of regional shares (.TRXFLDAXPU) was 2.6 percent higher.

Reflecting some of the calm, U.S. stock futures are up 0.4 percent pointing to a firm start at Wall Street, which had already started showing some signs of a recovery on Friday having erased some of the losses toward close.

However, stocks in the United Arab Emirates, trading for the first time since the call for a delay in repaying billions of dollars in debt, dived with Dubai's index (.DFMGI) down 6.9 percent and Abu Dhabi's share benchmark (.ADI) 8.1 percent lower.

The dollar surrendered some of last week's gains against other major currencies and the yen retreated from a 14-year high hit last week. The two units rose sharply last week as fears of a possible Dubai debt default led to unwinding of carry trades.

AUTHORITIES SOOTHE NERVES

Investors were also placated by authorities' moves to prevent any major fallout from a looming debt default by two of Dubai's flagship firms.

Financial markets shuddered last week after Dubai said it would ask creditors of state-owned Dubai World and Nakheel, the builder of its palm-shaped islands, for a standstill agreement as a first step toward restructuring billions of dollars of debt used auto loans.

On Sunday, the United Arab Emirates offered banks emergency support to ease fears in financial markets although analysts say the move to inject liquidity into Dubai's banks by the central bank, together with promises by neighboring city-state Abu Dhabi to provide selective support, was the bare minimum they could do.

In Seoul, Vice Finance Minister Hur Kyung-wook said the government would maintain a daily monitoring system until the Dubai incident was resolved.

Indonesia's central bank deputy governor said the country is not expected to feel any fall-out from Dubai's debt problems while the Philippine central bank governor said the crisis was not seen having a major impact on remittances from the Filipino diaspora.

About a tenth of the Philippines' 91 million people live and work abroad and their remittances are vital to domestic spending.

Investors also took heart from Wall Street's truncated losses, raising hopes the flight to less risky assets seemed to be subsiding. U.S. stocks recovered slightly toward close after a slide of more than 2 percent at the open.

"The fall in U.S. stocks wasn't as bad as expected and that has lifted one of the biggest Dubai-related concerns, given that worries about that don't seem to be as bad as they once were," said Masayoshi Okamoto, head of dealing at Jujiya Securities.

BANKS LEAD REBOUND

Leading the recovery were bank and construction shares, which were the big losers last week as investors cut exposure to sectors most vulnerable to economic uncertainty.

HSBC Holdings (0005.HK), which fell 7.59 percent to close at a three-week low on Friday, climbed over 4 percent. Standard Chartered (2888.HK), which fell as much as 8.9 percent to a seven-week low last Friday, was also more than 4 percent higher.

Britain's HSBC (HSBA.L), Europe's biggest bank, has the biggest exposure to the UAE, according to end-2008 estimates by the Emirates Banks Association.

The MSCI index of banking shares in Asia Pacific outside Japan (.MIAPJFN00PUS) was up 3.7 percent while the materials index (.MIAPJMT00PUS) was 3 percent higher.

But stocks with exposure to Dubai continued to suffer.

These included Singapore's DBS Group (DBSM.SI) and City Developments (CTDM.SI), Indonesian property firm PT Bakrieland Development (ELTY.JK) and Malaysia's LCL Corp (LCLC.KL).

Japan's Nikkei average (.N225), which hit a four-month closing low last Friday, gained 2.9 percent as the yen's fall from a 14-year high against the dollar also lifted exporters.

(Additional reporting by Parvathy Ullatil in HONG KONG and Elaine Lies in TOKYO; Editing by Kazunori Takada)

Asian shares rebound but eyes on Dubai

26
Nov

China Joins U.S. in Pledge of Hard Targets on Emissions

BEIJING — The Chinese government announced Thursday that it had set a target to reduce greenhouse gas emissions by 2020 relative to economic development. China is aiming to reduce what it calls carbon intensity by 40 to 45 percent compared with 2005 levels, according to Xinhua, the state news agency.

The announcement came the day after President Obama pledged a provisional target for reductions in greenhouse gas emissions in the United States, the first time in more than a decade that an American administration has offered even a tentative promise to reduce production of climate-altering gases. President Obama discussed climate change with the Chinese president, Hu Jintao, when the two met in Beijing on Nov. 16.

China and the United States, the two largest emitters of greenhouse gases, have been in discussions on options that both nations can take to address the issue of climate change. Both countries are expected to be crucial players in talks next month at international climate meetings in Copenhagen at which nations will negotiate terms for a global post-2012 treaty on reducing emissions, although leaders have said they do not expect to come to an agreement there.

Chinese officials announced Thursday that Prime Minister Wen Jiabao would attend, after American officials said Wednesday that President Obama also planned to take part in the talks himself.

In Copenhagen, Mr. Obama will tell the delegates that the United States intends to reduce its greenhouse gas emissions “in the range of” 17 percent below 2005 levels by 2020 and 83 percent by 2050, American officials said Wednesday.

China’s announcement on Thursday of future reductions uses an altogether different benchmark. China will measure its reduction by carbon intensity, or amount of carbon dioxide emitted per unit of gross domestic product, meaning that emissions would still grow but the rate would slow. China has rejected demands to announce an absolute reduction in carbon emissions, arguing that environmental concerns must be balanced with economic growth and that developed countries must first demonstrate a significant commitment to reducing emissions.

Ahead of Copenhagen, China has been trying to deflect pressure by showing that it has made its own commitments to battling climate change. In September, President Hu Jintao announced at the United Nations that China would reduce its carbon intensity by 2020, but drew some criticism by not giving a number at the time. Earlier, China had set a goal of reducing by 2010 the energy consumption per unit of GDP by 20 percent compared with 2005 levels.

In Brussels, the European Commission on Thursday welcomed “the valuable steps China is taking to tackle climate change, and the leadership China is bringing to this negotiation.” But, the commission, the European Union’s executive body, said, “It will be disappointing to some that China does not go beyond business as usual.”

The commission was equally circumspect about President Obama’s comments on Wednesday. “On the United States offer, there are a number of positive elements,” the commission said. But his proposal was “lower than we would like,” the statement said, and “ will be disappointing to some.”.

The commission also pressed the Americans to come forward with an offer of money to help developing nations tackle climate change. Yvo de Boer, the United Nations climate chief, said earlier this week that developed parts of the world like the United States and the European Union should contribute around $10 billion annually from 2010 to 2012.

China stands at the heart of international concerns about global warming because it passed the United States two years ago as the world’s biggest emitter of greenhouse gases, and is still building coal-fired power plants at a brisk pace, although it is also expanding its investments in renewable energy us fast cash.

As part of national civil service reviews, provincial and even municipal officials are now assessed partly on how they have improved energy efficiency.

In Guangdong Province, for example, provincial officials have required the 200 largest city governments and the 200 largest companies to each sign contracts pledging to improve energy efficiency by 20 percent by 2010, as older factories are being scrapped or renovated.

China has also made significant investments in alternative energy over the past four years that will help it meet its target, with further installations already planned of wind turbines, solar panels and nuclear power plants.

It surpassed the United States as the world’s largest market for wind turbines this year, after doubling installations in each of the past four years, mainly because of heavy pressure by regulators on the state-owned power companies to build more wind turbines.

The government also requires the country’s two state-owned electricity grid companies to pay more for wind energy than they do for electricity generated from coal, which still accounts for four-fifths of China’s electricity.

The Chinese government has run into some problems along the way. Power generation companies have responded to the regulations by building wind turbines in remote locations that have lots of wind but are not close to large users of electricity, like big cities or heavy industry, such as smelters or steel mills. The grid companies have been slow to build costly high-power lines to these remote locations, with the result that energy economists estimate that up to a quarter of China’s wind turbines are not actually producing electricity that anyone can use.

A draft amendment this autumn to China’s renewable energy law would require the grid companies to build connections to all renewable energy projects, and allow power companies to sue the grid companies for losses if the connections are not built, said John Leary, the managing partner in the Shanghai office of the law firm White and Case. Under the draft, which is still being discussed in Beijing, the grid companies could seek compensation from a national energy fund for the extra cost of building the extra high-power lines.

The benchmark announced Thursday was a “voluntary action” taken by the Chinese government “based on our own national conditions,” the State Council, China’s cabinet, said in a written statement, according to Xinhua.

Some analysts say China may be unwilling to make larger commitments until the United States Congress passes legislation on emissions reduction targets. The figures released by the White House on Wednesday were based on targets specified by legislation that passed the House in June but is stalled in the Senate. Congress has never enacted legislation that includes firm emissions limits or ratified an international global warming agreement with binding targets.

Mr. Obama, who had not previously committed either to emissions targets or to going to Copenhagen, has been under considerable pressure from other world leaders and environmental advocates to reassert American leadership on climate change.

Edward Wong reported from Beijing, and Keith Bradsher from Hong Kong. James Kanter contributed reporting from Brussels, and Jonathan Ansfield from Mequon, Wis.

China Joins U.S. in Pledge of Hard Targets on Emissions