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Ft.com
Ngozi Okonjo-Iweala, the Nigerian finance minister seeking to become the first non-American to lead the World Bank, has warned rich nations that the selection process will test their “level of hypocrisy”. The World Bank presidency has always been in Washington’s gift, thanks to the superior voting power of the US and support from other developed nations. But there has been a strong push from the emerging world for an open contest to choose a successor to succeed Robert Zoellick, which the main World Bank shareholders say they support. Ms Okonjo-Iweala, backed by African leaders, is one of three candidates vying to take over from Mr Zoellick when his tenure ends in July. http://www.ft.com/intl/cms/s/0/cf444ff2-78ee-11e1-88c5-00144feab49a.html#axzz1qThSoYUc
European Central Bank action to shore up the eurozone financial system failed to prevent the region’s banks scaling back lending to the private sector again last month, but it did spur a surge in demand for government bonds. The ECB has provided more than €1tn in three year loans to eurozone banks since Mario Draghi became its president late last year – a move which he argues averted a severe “credit crunch”across the 17-country region. http://www.ft.com/intl/cms/s/0/13dfe02a-78ba-11e1-9f49-00144feab49a.html#axzz1qThSoYUc
European Union officials joined Madrid on Wednesday in insisting Spain’s banks would not need a cash injection from the eurozone’s rescue fund, despite concerns they willfail to raise more than €50bn in new government-mandated capital by the end of the year. The Spanish government last month passed laws requiring banks to presentrecapitalisation plans by the end of March to insulate them from further real estate market shocks, forcing prime minister Mariano Rajoy to decide soon whether the sector will need public aid. http://www.ft.com/intl/cms/s/0/22ad7542-78e5-11e1-88c5-00144feab49a.html#axzz1qThSoYUc
Efforts by some of the world’s biggest oil buyers to co-ordinate the possible release of emergency reserves and an intervention by Saudi Arabia sent crude prices tumbling on Wednesday, raising the prospect of relief for Europe’s flagging economies and American motorists facing pump prices of almost $4 a gallon. As France’s energy minister, Eric Besson, confirmed his country was in talks with the US, UK and Japan to release billions of barrels of oil on to the market, Saudi Arabia’s influential oil minister said Riyadh would do all it could to bring prices down.http://www.ft.com/intl/cms/s/0/49b267d0-78f2-11e1-88c5-00144feab49a.html#axzz1qThSoYUc
Wsj.com
Asian stock markets were mostly lower in sluggish trade Thursday as downbeat U.S. data hurt sentiment, while resources and energy stocks lost ground on falling copper and oil prices. Japan’s Nikkei Stock Average fell 0.8%, Australia’s S&P/ASX 200 was off 0.1%, South Korea’s Kospi Composite slipped 1.1% and New Zealand’s NZX-50 added 0.1%. Dow Jones Industrial Average futures were down five points in screen trade.http://online.wsj.com/article/SB10001424052702303404704577310470977084152.html?mod=WSJEUROPE_hpp_LEFTTopWhatNews
Politicians in Lisbon and policy makers in Brussels insist that Portugal isn’t like Greece. This spring, the country will have to prove it. The European Central Bank’s injection of money into the Continent’s banking system has, for now, pulled Italy and Spain away from the edge of the sovereign-debt crisis. But that medicine hasn’t soothed Portugal. Though its government-bond yields have improved this week, they remain at elevated levels that suggest distress.http://online.wsj.com/article/SB10001424052702304177104577309491538614560.html?mod=WSJEurope_hpp_LEFTTopStories
Iran’s oil exports appear to have dropped this month as buyers prepare for tough new sanctions, market observers say, and shipments are likely to shrink further if President Barack Obama determines by Friday, as expected, that markets can adjust to fewer barrels of Iranian oil. By the end of March, with three months until a European Union embargo on Iranian oil takes effect, Iran’s exports are expected to fall by about 300,000 barrels a day from last month, to 1.9 million barrels daily, a nearly 14% drop, according to Swiss oil-shipping specialist Petro-Logistics SA.http://online.wsj.com/article/SB10001424052702304177104577305400565164514.html?mod=WSJEUROPE_hpp_LEFTTopWhatNews
In assessing Europe’s debt problems, bond investors are moving beyond Portuguese debt in their hunt for the next bearish bet. Their search is taking them right next-door. Spain’s borrowing costs are rising amid worries Portugal’s looming budget deficits will ripple across the Iberian peninsula. Spain’s 10-year bonds yield 5.33%, up a quarter-percentage point in the past month. The renewed focus on Spain represents a shift from just a few months ago, when it was Italy’s weak economy and shaky public finances that were under scrutiny by the bond market. At the start of the year, Italy’s 10-year debt yielded more than 7%, two percentage points above Spain’s. Today, Italy’s benchmark bonds yield 5.087%, just below Spain’s yields, indicating investors are slightly more comfortable holding Italian debt than Spanish debt.http://online.wsj.com/article/SB10001424052702304177104577309693059982220.html?mod=WSJEUROPE_hpp_LEFTTopWhatNews
China is keen to contribute to a fund to bail out the euro zone, its trade minister said Wednesday, underscoring the Asian powerhouse’s growing interest in playing a bigger role in the global economy as its financial strength grows. “China will make due contributions” to rescue the European economy, Chen Deming said at a conference of trade ministers from the BRICS group of emerging nations–Brazil, Russia, India, China and South Africa.http://online.wsj.com/article/SB10001424052702303816504577309100319050654.html?mod=WSJASIA_hpp_LEFTTopWhatNews
Top officials from Japan’s government and ruling party formally endorsed a revised bill to double the country’s sales tax, despite strong objections from other party members, in a sign of their determination to rein in the nation’s soaring public debt. “I believe the cabinet will approve the bill on Friday,” said Shinji Tarutoko, the ruling Democratic Party of Japan’s deputy secretary-general, in announcing the endorsement on Wednesday. Six top officials from the government and the ruling party, including Prime Minister Yoshihiko Noda and DPJ Secretary-General Azuma Koshiishi, formally gave the endorsement. This opens the way for Mr. Noda’s cabinet to approve the bill Friday and submit it to parliament before Saturday’s deadline. http://online.wsj.com/article/SB10001424052702303816504577308701918515414.html?mod=WSJASIA_hpp_LEFTTopWhatNews
Regulators are examining volatile trading in a complex exchange-traded note that caused it to lose 60% of its value in the past week. The Securities and Exchange Commission is looking into the VelocityShares 2x Long VIX Short Term Exchange note, managed by Credit Suisse Group AG, which had about $700 million in assets before the decline, according to people familiar with the matter. The SEC review is preliminary, the people said. The scrutiny comes amid rising investor alarm and confusion over trading in exchange-traded notes. The Credit Suisse note, which trades as TVIX and is designed to track stock-market volatility, plunged 29% on Thursday last week and then another 30% on Friday, even though market volatility was little changed. Another exchange-traded note, a Barclays Capital product designed to track natural gas, plunged this week for reasons that investors say remain unclear. http://online.wsj.com/article/SB10001424052702304177104577310070587737332.html?mod=WSJEUROPE_hpp_LEFTTopWhatNews
Myanmar said it would float its currency, effective April 1, enacting a long-sought policy reform that is expected to make the resource-rich Southeast Asian country more inviting to foreign investors following decades of pariah-nation status. The move is one of the biggest reforms to date as Myanmar’s government seeks to re-engage with the outside world and get out from under the weight of tough Western sanctions. The country’s current foreign-exchange system, which involves a fixed “official” exchange rate that’s more than 100 times as valuable against the dollar as the country’s black-market rate, is so confusing that many foreign companies have refused to re-enter the country even if Western leaders ease sanctions against Myanmar as expected later this year.http://online.wsj.com/article/SB10001424052702303404704577308804188361084.html?mod=WSJASIA_hpp_LEFTTopWhatNews
China approved a broad package of financial reforms in Wenzhou, a city known for entrepreneurship and underground lending, in what may be a prelude to a national effort to liberalize China’s creaking financial system. The move by the State Council, China’s cabinet, represents an important symbolic step toward overhauling a system long seen as a barrier to developing a more substantial and sustainable growth model for the world’s second-largest economy. The key test will be whether the Wenzhou reforms are rolled out in other parts of the country. Other promised reform efforts in recent years have failed to materialize, and the government’s tendency toward overregulation could squelch innovation and keep its important but shadowy informal lending system underground.http://online.wsj.com/article/SB10001424052702303404704577309051957346004.html?mod=WSJAsia_hpp_LEFTTopStories
Marketwatch.com
The possibility that China will suffer an economic shock within the next three years is remote, but the risks are very real and the country may have to navigate several major hazards to avert it, according to fund managers and economists polled by MarketWatch. Nine of the 19 major global investment managers and brokerages that participated in the survey said a hard landing in China is unlikely anytime in the next three years, while eight said a credible risk of economic catastrophe does exist. However, 14 of the China market experts — about three-quarters of those surveyed — said the current level of fear of an imminent hard landing is unwarranted, compared to just three who said the concerns were justified. http://www.marketwatch.com/story/china-survey-hard-landing-possible-but-not-likely-2012-03-28
Reuters.com
Saudi Arabian Oil Minister Ali al-Naimi mounted his most direct rhetorical attack against high oil prices on Wednesday, but showed no sign of moving to increase supplies even as France joined the United States and Britain in talks for a release of strategic reserves. Two weeks after Reuters initially reported that Britain and the United States were set to agree on tapping emergency stockpiles, French Energy Minister Eric Besson said the European nation was also in talks with Washington. Le Monde reported that the move could come in a matter of weeks.http://www.reuters.com/article/2012/03/28/us-oil-saudi-france-idUSBRE82R1E620120328
Social-networking site Facebook is halting the sale of its shares on secondary markets effective next week as the company prepares to hold its initial public offering in May, according to a person familiar with the matter. Facebook recently asked firms that arrange trading of its privately held shares to stop doing so, a move intended to reduce churn in its valuation that could complicate matters as it sets an IPO price, according to another person familiar with the matter. Facebook is planning to raise $5 billion in an offering that could value the company at up to $100 billion, making it the largest IPO in Silicon Valley history. http://www.reuters.com/article/2012/03/28/net-us-facebook-secondary-idUSBRE82R18920120328
New orders for long-lasting U.S. factory goods increased only modestly in February, supporting the view that economic growth in the first quarter could be lackluster. Durable goods orders rose 2.2 percent last month, missing economists’ forecasts and only partially reversing January’s sharp decline, Commerce Department data showed on Wednesday. A gauge of future business investment also fell short of forecasts. “The economy is slowly improving, but it is definitely a halting recovery where we’re not accelerating to any great degree,” said Liam Dalton, president of Axiom Capital Management in New York. http://www.reuters.com/article/2012/03/28/us-usa-economy-idUSBRE82Q0VN20120328
Brent crude held steady near $124 on Thursday as news of a surge in U.S. crude inventories and Western nations’ talks on releasing strategic oil reserves offset supply disruption concerns over tension in the Middle East. Brent crude edged down 11 cents to $124.05 by 0432 GMT (12.32 a.m. EDT) after a fall of 1.09 percent in the previous session. U.S. crude extended losses after a drop of 1.79 percent on Wednesday and was down 9 cents at $105.32. “There is residual selling from news flow overnight,” said Ben Le Brun, a Sydney-based market analyst at brokerage OptionsXpress, pointing to the large build in U.S. crude inventories and the talks on releasing strategic oil stocks.http://www.reuters.com/article/2012/03/29/us-markets-oil-idUSBRE82B04920120329
Gold fell on Thursday after a rebound in the U.S. dollar erased early gains, while weaker equities also prompted investors to sell bullion to cover losses while waiting for more clues on the health of the U.S. economy. Gold hit a high of $1,664.79 an ounce before slipping to $1,661.30 by 0313 GMT (23.13 p.m. EDT), down $1.82. Gold fell 1.3 percent on Wednesday after data showing a smaller-than-expected rise in new U.S. manufactured goods orders spurred selling in commodities.http://www.reuters.com/article/2012/03/29/us-markets-precious-idUSTRE82403220120329
Bloomberg.com
Japan’s retail sales rose more than economists forecast in February, indicating that consumer confidence is returning as reconstruction demand boosts the world’s third-biggest economy. Sales (JNNETYOY) increased 3.5 percent from a year earlier, the biggest advance since Aug. 2010, the Trade Ministry said in Tokyo today. The median estimate of 15 economists surveyed by Bloomberg News was for a 1.4 percent increase. From a month earlier, sales gained 2 percent http://www.bloomberg.com/news/2012-03-28/japan-retail-sales-beat-forecasts-as-consumer-confidence-returns.html
European governments are preparing for a one-year increase in the ceiling on rescue aid to 940 billion euros ($1.3 trillion) to keep the debt crisis at bay, according to a draft statement written for finance ministers. The euro-area finance chiefs will probably decide at a meeting in Copenhagen tomorrow to run the 500 billion-euro permanent European Stability Mechanism alongside the 200 billion euros committed by the temporary fund, a European official told reporters in Brussels yesterday.http://www.bloomberg.com/news/2012-03-28/eu-nearing-one-year-rescue-boost-to-eu940-billion-draft-says.html
Goldman Sachs Group Inc. (GS) directors converge on India this week for their first meeting in the nation, where economic growth is headed for a three-year-low and the pace of reforms has disappointed the firm’s analysts. Chairman and Chief Executive Officer Lloyd C. Blankfein is leading a three-day meeting in Mumbai and New Delhi, India’s business and government capitals. The gathering completes trips by the New York-based firm’s board to all of the so-called BRIC nations — Brazil, Russia, India and China— whose rapid economic expansion has made them a priority for investment. “What India has failed to do is to live up to rising expectations,” Goldman Sachs Asset Management Chairman Jim O’Neill, who coined the term BRICs a decade ago, said in an e- mailed response to questions yesterday. “The occasional stated desires for 10-percent-plus growth cannot be met without much bigger reforms.” http://www.bloomberg.com/news/2012-03-29/goldman-sachs-board-meeting-in-laggard-india-closes-bric-cycle.html
Global dealmaking slumped for a third straight quarter as chief executive officers funneled cash into share buybacks and new products, a trend that may reverse in the coming months as the economic recovery gains momentum. Mergers and acquisitions so far this quarter fell 14 percent from the fourth quarter to $416 billion, making it the slowest three-month period in 2 1/2 years, according to data compiled by Bloomberg.Glencore International Plc’s (GLEN) $45 billion deal for Xstrata Plc (XTA) was the only announced purchase in the quarter that topped $8 billion. http://www.bloomberg.com/news/2012-03-29/global-takeovers-drop-in-quarter-as-bankers-see-reversal.html
Foxbusiness.com
Spanish Finance Minister Luis de Guindos on Wednesday said the country has no plans to ask the European Union and International Monetary Fund for money to help restructure its banking system, Dow Jones Newswires reported, as concerns mounted over the country’s finances. The comments came in response to local news reports that a senior EU official had urged Madrid to consider a bailout request in order to speed the restructuring process, the report said. De Guindos also called a Citibank research note that said the country may need to seek support “completely out of place,” the report said. The Spanish government is set to unveil its latest budget plan on Friday.http://www.foxbusiness.com/markets/2012/03/28/spain-finance-minister-no-plan-to-ask-for-bailout/#ixzz1qTlq5pm1
BBC.co.uk
London and New York will remain the most important world cities for wealthy individuals over the next decade, research suggests. However, Beijing and Shanghai are seen by high-net-worth individuals as the most important up-and-coming cities, according to the Wealth Report compiled by Knight Frank and Citi Private Bank. The research also notes the “relentless shift” in wealth towards Asia Pacific. It forecast the number of people worth $100m (£63m) would grow by 40% by 2016http://www.bbc.co.uk/news/business-17544621
Leaders of the Brics group are meeting in India to discuss closer trade links, amid Tibetan protests aimed at Chinese President Hu Jintao. Joining leaders of Brazil, Russia, India, and South Africa, Mr Hu is in Delhi for the fourth meeting of the bloc of emerging nations. They are expected to commit to the set-up of a new bank that will fund projects in developing nations. On Wednesday, a Tibetan activist who set himself on fire on Monday died. Jamphel Yeshi set himself on fire at a protest in the Indian capital against the visit by Mr Hu for Thursday’s summit. http://www.bbc.co.uk/news/world-asia-17545347
Telegraph.co.uk
The European Central Bank (ECB) said loans to the real economy fell in February, scotching claims that radical long-term refinancing operation (LTRO) would stem the crisis. Open Europe’s Raoul Ruparel said: “The LTRO has succeeded in avoiding a severe funding crunch…[But] it does not tackle the underlying lending risks which the banks are still keen to avoid, particularly with the looming recession in Europe.” As Spain faces a general strike on Thursday, economists called for the eurozone to use its bail-out funds to support the country’s banks. http://www.telegraph.co.uk/finance/financialcrisis/9172235/ECBs-LTRO-plan-flops-as-banks-cut-lending.html
The UK economy shrank 0.3pc in the final quarter of 2011, rather than the 0.2pc thought, the Office for National Statistics (ONS) said. That meant gross domestic product (GDP) grew just 0.7pc in 2011, rather than the 0.8pc first estimated. Growth figures for the first and second quarters of last year were also cut. While economists have been predicting the UK will avoid a return to recession – defined as two consecutive quarters in which the economy shrinks – the numbers raised fears that a double-dip will materialise.http://www.telegraph.co.uk/finance/economics/9170874/Shock-slowdown-in-UK-growth-as-GDP-contracts-0.3pc.html
Smh.com.au
Market expectations are building that the Reserve Bank could push through a 25 basis point interest rates next week to help spur demand and confidence in the economy. The recent shift in sentiment, combined with improving prospects for Europe and the US, has seen the Australian dollar fall by more than 1 cent over the past two days and to be down 4 cents since the start of the month. Around midday, the Australian dollar was trading at $US1.038. It was also buying 85.7 yen and 77.8 euro cents. This morning the market was tipping a 41 per cent chance of a rate cut when the RBA meets on Tuesday for its monthly board meeting, according to investment bank Credit Suisse’s index of interest rate futures. http://www.smh.com.au/business/markets/bets-rise-on-rba-interest-rate-cut-20120329-1vzu7.html#ixzz1qTnPxBNe
CLAIMS that mining companies held a meeting this week with coup leaders in the West African nation of Mali have been met with silence by Australian miners with projects in the country. Mali has been in crisis in recent weeks after a military mutiny escalated into a full-blown coup that has overthrown the government. The nation is one of several in West Africa that have recently attracted large numbers of Australian miners in search of large deposits, particularly gold. Most have issued statements in recent days, typically saying their operations had not been affected by the coup. http://www.smh.com.au/business/miners-met-with-mali-coup-leaders-20120328-1vyp6.html#ixzz1qTnXiIJx
Straitstimes.com
Italian Prime Minister Mario Monti on Wednesday said the root of the euro zone’s debt woes lay partly in the irresponsible parenting of Germany and France during the bloc’s infancy. Mr Monti told reporters in Tokyo that because the euro zone’s two largest players had not abided by fiscal rules, they had set a bad example for the rest of the continent. ‘The story goes back to 2003 (and) the still almost infant life of the euro,’ Mr Monti said. ‘It was in fact Germany and France that were loose concerning the public deficits and debts.’ http://www.straitstimes.com/BreakingNews/Money/Story/STIStory_782678.html
Cs.com.cn
China will reform the pricing mechanisms for electricity and refined oil products this year, an official with China’s top economic planner said here Wednesday. Peng Sen, deputy chief of the National Development and Reform Commission, said at a work conference that the country will initiate a tiered pricing system for household electricity consumption in the first half this year. Peng also said that China will reform the pricing mechanism for refined oil products this year by reducing the price adjustment cycle and enhancing the transparency of the pricing mechanism. http://www.cs.com.cn/english/ei/201203/t20120329_3299375.html
Thehindu.com
India and China on Wednesday indicated that they would continue to maintain normal relations with Iran, while citing high crude oil prices and energy security concerns. The Chinese Commerce Minister, Mr Chen Deming, said China respected all the United Nations resolutions. However, in a veiled reference to the US sanctions on Iran, he added that Beijing was not obliged to follow the domestic rules and regulations of any particular country. He was talking to reporters after the meeting of the BRICS (Brazil, Russia, India, China and South Africa) Trade Ministers, ahead of the summit on Thursday. Incidentally, China, India and South Africa are dependent on Iran for crude oil supplies. Brazil and Russia also raised concerns over the increase in crude oil prices following the sanctions being imposed on Iran by the US and European Union.http://www.thehindubusinessline.com/industry-and-economy/economy/article3254983.ece
Economictimes.com
Glitzy tech capital Bangalore just earned a new sobriquet, the costliest Indian city. An analysis of the Reserve Bank of India’s Consumer Price Index (CPI) shows that Bangalore is a couple of notches higher than the all-India cost-of-living average, with financial capital Mumbai just a shade behind. The CPI is a measure of a standard basket of items, including food, clothing and transport, across cities. In the price race, Delhi is comfortably placed very low in the table, deriving its cushion from the subsidies galore it receives from the Centre . Take, for instance, LPG cylinders, which is a must-have in middle-class families. http://economictimes.indiatimes.com/markets/real-estate/news-/bangalore-costliest-indian-city-to-live-in-survey/articleshow/12449520.cms
Finance minister Pranab Mukherjee reiterated his promise to reconsider his Budget proposal to tax unbranded jewellery, but remained firm on the import duty on gold. In his reply to the debate on Budget in the Rajya Sabha, Mukherjee said would make appropriate announcements in respect of unbranded jewellery in the second half of the budget session of Parliament. “You will have to wait till (debate on) the Finance Bill …we are examining… but please don’t insist on reduction of import duty (on gold). Import duty reduction is not possible,” he said.http://economictimes.indiatimes.com/news/economy/finance/pranab-mukherjee-firm-on-import-duty-on-gold/articleshow/12448972.cms
A new norm stipulating that only the ‘owner of the brand’ can invest in Indian retailers selling goods under a single brand threatens to derail their overseas fund-raising plans. The Foreign Investment Promotion Board, the nodal agency that clears investments entering India, is considering the proposal of an Indian retail company to induct a foreign private equity fund as an investor. The proposal is being closely watched as its fate will determine the ability of Indian single-brand retailers to access foreign capital.http://economictimes.indiatimes.com/news/news-by-industry/services/retailing/foreign-funding-tougher-for-retailers-new-norm-to-hinder-indian-brands/articleshow/12448562.cms
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