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China stocks end lower Friday pulled down by banks, developers

2010-05-14T06:07:00.000-07:00

Chinese shares closed lower Friday after rebounding more than 2 percent from the previous trading day, as financial and property shares remained weak.

The benchmark Shanghai Composite Index dropped 0.51 percent to close at 2,696.63 points.

The Shenzhen Component Index went down 0.84 percent to 10,330.14 points.

Total turnover shrank to 143.52 billion yuan (22.56 billion U.S. dollars) from 154.06 billion yuan the previous trading day.

Gainers outnumbered losers by 430 to 426 in Shanghai and 474 to 433 in Shenzhen.
Small caps rebounded as China unveiled a plan to encourage private investment and support private companies on Thursday, but market heavyweights remained weak amid uncertainty about their prospects.

The government had announced it would open more sectors to private investment, including transport infrastructure, telecommunications and energy, public utilities, and affordable housing construction.

Market heavyweights, usually state-owned enterprises, fell with the possibility that their dominance would be challenged by private enterprises, said Lu Hongze, analyst with Shenzhen Securities Information Company.

Sinopec, the country's largest oil refiner, dropped 1.08 percent to 9.2 yuan per share. Ping An Insurance, one of China's major insurers, dipped 2.19 percent to 48.3 yuan.

With the possible surge in private investment, the property sector, seen as a pillar of China's economy, might become less important for future development, which would allow more room for future curbs on the sector, Lu said.

Property developers fell 1.22 percent. China Vanke, the nation's biggest property developer by market value, dipped 0.81 percent to 7.31 yuan per share, while Poly Real Estate Co., the second largest, slid 1.71 percent to 10.9 yuan.

Banks declined 1.37 percent. The Industrial and Commercial Bank of China(ICBC), the country's largest bank by market value, went down 1.09 percent to 4.53 yuan.

World stocks plunge on eurozone debt spread fears

2010-05-05T00:21:00.001-07:00

Stocks around the world plummeted Tuesday as investors fled the markets on fears that the mounting Greek debt crisis could spread to other weak eurozone economies, possibly affecting the global economic recovery.

Rumors are running wild that the 110-billion-euro (145-billion-dollar) bailout pledged by the eurozone and the IMF would not be enough to rescue the Greek markets and the crisis could spread to such countries as Ireland, Spain and Portugal.

The fears sent investors fleeing global markets as they foresaw a possible derailment of the fragile global economic recovery.

Stocks in the United States and Europe were hit the hardest. The New York Dow Jones Industrial Average fell 225 points, its biggest drop in three months.

London, Paris, Frankfurt, Lisbon and other European markets also saw drops, with the Madrid stock exchange taking the biggest hit as stocks plunged 5.4 percent by the close.

The euro, the single European currency, lost two cents against the dollar to reach its 12-month low, as investors fled to the relative safety of the U.S. currency.

The wave of fears came as Greece witnessed mounting public outrage at the government's austerity measures. A nationwide general strike took place Wednesday in a test of the government's resolve to push through the unprecedented austerity cuts needed to avert the fiscal meltdown.

Among the major measures, the government is to cut bonus pay for civil servants and retirees, raise the retirement age for women to 65, and others. Germany, which will foot the biggest share of the bailout, has warned the Greek government that loans could be halted if it does not adhere to the plan.

Greece turned to the eurozone and IMF for help after its borrowing costs surged on critical bond markets as the scope of its debt and public deficit crisis became fully apparent.

On Tuesday, Greece's cost of borrowing through 10-year bonds rose to nearly 9.4-percent interest, up from just under 8.5 on Monday.

Even with the bailout package, many investors do not believe Greece could live through the crisis and fear that the country's troubles could trigger a knock-on effect elsewhere in Europe.

There were rumors that Spain was asking for a 280-billion-euro lifeline, forcing Spanish Prime Minister Jose Luis Rodriguez Zapatero to come out to quell the rumors, saying they were "absolute madness."

Spain's borrowing costs are also on the rise, and stood at close to 4.1 percent for its 10-year bonds on Tuesday. That was up from 3.8 percent in late March.

Portugal is also seen as likely to plunge into a debt crisis.

Analysts, however, do not see the market plunge as a surprise, arguing that investors are always on alert for anything that could disrupt economic recovery. They have warned for weeks that stocks were due for a retreat, amid concerns that stocks are overheated.

Some analysts are optimistic, saying the troubles in Greece are not serious enough to disrupt the global rebound, although they do worry that this small hole in the economy will become bigger.

U.S. economy up 3.2% in first quarter

2010-05-02T17:31:00.000-07:00

Strong consumer spending helped drive U.S. economic growth to an annual rate of 3.2 percent in the first quarter of 2010, according to the first estimate released Friday by the Commerce Department.

The growth pace was just below market expectations of 3.3 percent and down on the 5.6 percent recorded in the fourth quarter of 2009.

The U.S. government usually releases three estimates of the quarterly gross domestic product (GDP) -- the output of goods and services produced by labor and property located in the United States.

The department said the increase in real GDP in the first quarter primarily reflected positive contributions from personal consumption expenditures.

Consumer spending rebounded at a 3.6 percent pace, the strongest showing since early 2007 -- before the economy tipped into a recession. That marked a big improvement from the fourth quarter when consumer spending grew at 1.6 percent pace.

However, analysts say consumers will be wary of stepping up spending much further since the unemployment rate is high at 9.7 percent and is expected to stay elevated in the months ahead.

They believe sluggish income growth and problems getting loans could restrain shoppers' appetite to spend.

According to the report, other factors that propelled the first quarter economic growth included private inventory investment, exports, nonresidential fixed investment and imports.

Builders once again trimmed spending on housing projects, following two quarterly gains. Spending on commercial real estate ventures plunged 14 percent, the seventh straight quarterly decline.

Exports grew 5.8 percent in the first quarter, compared with an increase of 22.8 percent in the fourth quarter. Imports rose 8.9 percent -- reflecting stronger demand by U.S. consumers.

Spending by businesses on equipment and software rose at 13.4 percent, following an even bigger 19 percent growth rate in the fourth quarter in 2009.

In the first quarter, the federal government increased spending at a 1.4 percent pace, after being flat in the prior quarter.

But state and local government spending and residential fixed investment decreased.

Although the first quarter GDP growth is in line with expectations, economists believe growth may slow in the second half of the year as the government stimulus policies wane.

According to the latest World Economic Outlook report released by the International Monetary Fund last week, the U.S. economy was expected to grow 3.1 percent in 2010, but will only increase 2.6 percent in 2011.

Economists also warn fiscal problems are worsening as the economic recovery can not generate enough revenue to support the government's mass spending.

The U.S. federal budget imbalance, which hit a record high level of 1.4 trillion dollars in 2009 fiscal year, is expected to reach 1.56 trillion dollars in 2010.

Federal Reserve Chairman Ben Bernanke warned again Tuesday that the U.S. fiscal policy was unsustainable in the long run. He urged the White House and Congress to take measures as soon as possible to tackle the debt issue.

Buffett says he 100 percent behind Goldman Sachs

2010-05-02T17:30:00.000-07:00

U.S. billionaire Warren Buffett said on Saturday that he was 100 percent behind Goldman Sachs which was sued last month by the U.S. Securities and Exchange Commission for misleading clients.

"I did not hold it against Goldman Sachs that an allegation has been made," said Buffett, CEO of holding company Berkshire Hathaway, which invested 5 billion dollars in Goldman Sachs during the financial crisis in 2008.

Buffett insisted that he "loves" Berkshire's investment in Goldman Sachs and believes the firm remains the best investment bank in the world.

He also defended the troubled Goldman Sachs CEO, Lloyd Blankfein.

"My choice would be to have Lloyd running it this year, next year and 10 years from now," Buffett said in Omaha, where he was attending Berkshire's annual meeting. "Running Goldman is a big job, and there's nothing I could improve on."

Meanwhile, Buffett said he worried about the possibility of " significant inflation" in the U.S. and other countries.

"The prospects for significant inflation have increased, not only here but around the world," Buffett said at the annual meeting. "If you had to bet your life on higher or lower inflation I'd bet on higher, and maybe a lot higher."

"Weaning ourselves from the medicine" of government economic stimulus may be very difficult, he added.

He also noted that the Greece debt crisis "will be high drama" and possibly a "test case" for bailing out a country using a common currency.

"I really don't know how this movie ends, and I try not to go to movies like that," said the billionaire, adding he was "more bearish" on whether currencies will be able to hold their value in coming years.

Rising costs of raw materials and labor, top challenge for Chinese companies

2010-04-24T18:38:00.000-07:00

New data released Saturday reveal nearly 80 percent of Chinese entrepreneurs view rising costs of raw materials and labor as the biggest challenge for the future.

Rising costs of raw materials and labor topped the list of challenges for Chinese enterprises in three to five years, according survey results unveiled by Development Research Center of the State Council.

The other challenges include policy changes and government interference, changing customer demands, among others, according to the survey.
As a way of overcoming the difficulties, 75 percent of the respondents said they would look to benefit from rising domestic demand, while more than 66 percent said developing new products and business will help their companies survive.

The survey also shows that 86.4 percent of the entrepreneurs are trying to cut resource consumption in a bid to save costs, while 75 percent of the entrepreneurs are looking for opportunities in line with the country's low carbon use policy.

Targeting Chinese entrepreneurs, the survey was conducted by Development Research Center of the State Council through its Chinese Entrepreneurs Survey System (CESS) from August 10 to October 15 last year, and the results rely on 5,016 valid and completed mail questionnaires.

U.S. trade deficit rises 18.2% in September

2009-11-14T16:33:00.000-08:00

The U.S. trade deficit increased 18.2 percent in September to 36.5 billion U.S. dollars, the highest level since January, the Commerce Department reported Friday.

The figure was more than the 31.7 billion dollars economists had expected. The key factor that drove up the trade deficit in September was foreign oil prices, which rose to their highest level in nearly a year, offsetting a fifth consecutive gain in exports.

The Commerce Department said that exports, which have been rising since May, increased 2.9 percent to 132 billion dollars, reflecting stronger sales of American autos, aircraft and industrial machinery.

Imports rose 5.8 percent to 168.4 billion dollars, led by a 20.1 percent jump in oil shipments.

So far this year, the U.S. trade deficit is running at 366 billion dollars, about half of last year's 695.9 billion dollars deficit.

Analysts expected that a rebounding global economy will keep pushing demand for exports higher, helping to bolster the U.S. recovery.

President Barack Obama said earlier this month that the U.S. economy would transform its model of growth, indicating to promote the country's export.

Property official: China to restrain "abnormal" home price hike

2009-11-14T16:30:00.000-08:00

China should keep home prices from long time "abnormal increases" and divert profits made from home price hikes to the public through taxation, a senior property official said here Friday.

Dong Zuoji, director of land planning department of the Ministry of Land and Resources, said home prices would continue to rise as the land in the world's fastest-growing economy is becoming increasingly scarce, but the government should use taxes to give the added value of the land back to society.

"China hasn't seen overcapacity in real estate sector on the whole, otherwise home prices wouldn't have gained so much," he said while attending a meeting held in Beijing.

Dong said the government would increase land supply for subsidized homes and adopt measures to prevent developers from hoarding land.

The government would also guarantee land use for high-tech, high added-value enterprises while limiting that of backward production projects.

Due to a series of supportive measures adopted by the government, China's property sector rebounded strongly this year. Home prices in 70 large and medium-sized cities rose for the eight straight month in October.

Average house price in Beijing surged 43.7 percent in July from that of January, to 14,500 yuan per square meter, Golden Keys, a property agent said on July 17.

Dollar ends week lower as euro zone exits recession

2009-11-14T16:28:00.000-08:00

The dollar ended the week lower against major currencies as a growth of the euro zone economy boosted investors' risk appetite, which lacked support in previous sessions.

Gross Domestic Product (GDP) increased by 0.4 percent in the euro zone, and by 0.2 in the 27-nation European Union (EU) during the third quarter of 2009, according to Eurostat, the statistical office of the European communities.

The two largest economies in the euro zone, Germany and France, grew by 0.7 percent and 0.3 percent respectively in the third quarter, Eurostat said on Friday.

The 0.4 percent growth of the euro zone GDP, slightly less than expected, showed that the 16-nation zone emerged from its first recession since the single currency was unveiled in 1999. It ended a series of contractions in five consecutive quarters.

The euro zone slipped into recession in the third quarter of 2008, showing two consecutive quarters of negative growth. Its GDP contracted by a massive 2.5 percent in the first quarter of 2009 before showing signs of bottoming out.

The dollar "still remains on the strong side" despite its declines in recent months, the International Monetary Fund (IMF) said in a report. The comments suggested that the dollar could fall further.

There are indications that the dollar is now serving as the funding currency for carry trades. These trades may be contributing to upward pressure on the euro and some emerging economy currencies, the IMF said.

In carry trades, investors sells a certain currency with a relatively low interest rate and use the funds to purchase a different currency yielding a higher interest rate.

Benchmark rates of the United States have been kept at a range between zero and 0.25 percent, lower than other major economies. Economic conditions were likely to warrant exceptionally low levels of the federal funds rate for an extended period, said the U.S. Federal Reserve in a statement from its latest monetary policy meeting.

The dollar opened lower this week as a commitment from Group of20 (G20) policymakers boosted hopes for recovery. The G20 finance ministers and central bank governors, who met last Saturday in Scotland, agreed to maintain support for the recovery until it is assured by efforts to restore the global economy.

The dollar's declines took a break in mid-week trading as there were few U.S. economic reports released. Trade volume has been light because of the Veterans Day holiday on Wednesday.

The pound fell against the dollar on Wednesday after British Central Bank Governor Mervyn King said he was open on whether to pump more money into the economy.

The British economy had "only just started" along its road to economic recovery, King said.

The Bank of England expected the British economy to return to growth at the beginning of next year, and it would be late 2011 before the economy recovered to the pre-recession level.

The British currency rebounded on Thursday as some analysts said it was still undervalued.

Declines of the dollar sparked some worries that rising oil prices could hurt consumer spending and hinder economic growth. Appreciation of the currencies of other countries, especially emerging economies, dampens their export. This would also threaten a global recovery.

The Asia-Pacific Economic Cooperation (APEC) finance ministers who met in Singapore on Thursday promised to undertake monetary policies consistent with price stability in the context of market-oriented exchange rates that reflect underlying economic fundamentals, according to a joint statement.

The dollar strengthened on Thursday amidst the APEC statement and a report showing that U.S. oil inventories had jumped.

The Energy Information Administration of the U.S. Department of Energy reported an increase of 1.8 million barrels in crude stocks and a rise of 2.5 million barrels in gasoline inventory last week. The numbers are both higher than analysts' forecast.

Safety-haven demand for the dollar edged higher on Thursday as the EIA report showed that oil demand was not as good as expected. The demand faded on Friday amidst the euro zone GDP report.

The euro bought 1.4893 dollars in late Friday New York trading, about 0.4 percent higher than a week ago. The pound rose 0.4 percent to 1.6672 dollars.

The dollar fell 2.3 percent during the past week to 1.0517 Canadian dollars, and fell 0.4 percent to 1.0135 Swiss francs. It fell 0.3 percent to 89.63 Japanese yen.

Disney profit rises 18% as ESPN shines

2009-11-12T21:28:00.000-08:00

The Burbank, Calif.-based media conglomerate (DIS 29.70, +0.65, +2.24%) said it earned $895 million, or 47 cents a share, compared with a profit of $760 million, or 40 cents a share, in the prior year's fourth quarter.

Excluding an item, the company said it would have earned 46 cents a share in the latest three months.

Revenue rose 4% to $9.87 billion from $9.44 billion.

Analysts polled by Thomson Reuters expected to see a profit of 41 cents a share on sales of $9.31 billion.

Earlier Thursday, the company said long-time Chief Financial Officer Tom Staggs would become chairman of its theme parks and resorts unit, while Jay Rasulo, the current chairman of the parks, would become CFO.

"I didn't give Tom a multiple choice in terms of where he was going to go, and I made both Tom and Jay offers that I felt they couldn't refuse," said Chief Executive Bob Iger during a conference call with analysts.

"I also had the benefit with Tom and Jay of two executives that I thought would thrive in their new positions, and they were also both very right from a timing perspective to make this move having been in their current positions for quite a long period of time," Iger said.

The company's media networks division, which includes ABC, ESPN and Disney Channel, among other outlets, reported that its revenue jumped 14% to $4.73 billion, while its operating profit increased 26% to $1.49 billion.

ESPN was lifted by higher fees paid by cable and satellite operators. Ad revenue at the network declined, but ad sales are showing improvement in the current quarter, said Iger, speaking during a conference call.

"They are seeing strength across multiple sectors," said Iger. "...Automotive, men's grooming is up, insurance is strong. There's good business from the movie studios, and retail...those are all good signs."

The broadcasting unit swung to a profit of $2 million on syndication sales of "Grey's Anatomy" and "According to Jim," though lower ratings and greater programming costs kept results at the ABC Television Network about flat with those of the prior year.

CFO Staggs said ad rates at ABC are running more than 20% higher than they were last summer. And advertisers with an option to buy ads in the January quarter are doing so at a better rate than the network has seen in the last 10 years, Staggs said.

Revenue at the company's studio entertainment division rose 3% to $1.5 billion, but the unit moved to an operating loss of $13 million.

The segment was hurt by greater write-downs for theatrical films during the period.

Segment profit at the theme parks and resorts in the fourth quarter fell 17% to $344 million, as revenue fell 4% to $2.84 billion.

The unit was hampered by less guest spending -- as average ticket prices and daily hotel room rates were lower -- and an increase in costs related to an extra week of operations in the latest fourth quarter and higher labor expenses.

Communications, IT Exhibition kicks off in Syria

2009-11-12T21:24:00.000-08:00

The 15th Communications and IT Exhibition SHAAM, one of the most important exhibitions of its kind in the Middle East region, started in Damascus with the participation of 146 companies from 40 countries.

The annual event, the first in Syria, launched on Wednesday evening in the fairground, presents the latest solutions, systems, and applications in the field of communications and IT, according to organizers.

The exhibition, sponsored by the Syrian Computer Society (SCS), aims to give the occasion to computers and communication systems manufacturers and providers to present their latest inventions and technologies in a professional framework.

Foreign participation includes China, Cyprus, the United Arab Emirates (UAE), and Lebanon, with the highlight of the Chinese company HUAWEI, which reserved the biggest exhibition surface.

The exhibition is to last until Nov. 15, during which presentations, conferences and forums will be held every day.

Obama to hold job forum in December

2009-11-12T21:21:00.000-08:00

U.S. President Barack Obama announced Thursday that the White House will hold a job forum in December, acknowledging high unemployment is one of the "great challenges" facing his administration.

Obama said that over the past 10 months, the government has taken a number of bold steps to break the back of this recession.

The U.S. economy grew 3.5 percent in the third quarter after four consecutive quarters of contraction, but unemployment has continued to climb.

"The economic growth that we've seen has not yet led to the job growth that we desperately need," and millions of Americans "are desperately searching for jobs," Obama said before departing on a week long trip to Asia that ends on Nov. 19.

Obama reaffirmed that unemployment, usually a lagging indicator, will improve slower than the economic growth.

"Given the magnitude of the economic turmoil that we've experienced, employers are reluctant to hire," he said.

Obama said his administration has "an obligation to consider every additional responsible step that we can to encourage and accelerate job creation in this country."

"That's why in December we'll be holding a forum at the White House on jobs and economic growth," Obama said.

The forum will gather CEOs and small-business owners, economists and financial experts, as well as representatives from labor unions and nonprofit groups, to talk about how they can work with the government to create jobs and get economy moving again.

The October unemployment rate jumped to a 10.2 percent, or a 26-year high, and the White House has warned it could get a little worse before it starts getting better.

Many economists expected that the unemployment rate will not return to below 9 percent in 2010. They said creating jobs has become the biggest test for the Obama administration.

China's imports, exports drop 10.7% in Oct

2009-11-11T18:19:00.000-08:00

China's imports and exports fell 10.7 percent in October year on year, but monthly exports exceeded100 billion U.S. dollars for a fourth straight month this year, the General Administration of Customs announced Wednesday.

Imports stood at 86.8 billion U.S. dollars for October, a decrease of 6.4 percent compared with the same month last year, while exports dropped 13.8 percent to 110.8 billion U.S. dollars.

From January to October, the country's imports and exports totaled 1.76 trillion U.S. dollars, down 19.9 percent compared with the same period last year.

Imports for the first 10 months were 798.13 billion U.S. dollars, down 19 percent year on year; exports declined 20.5 percent to 957.36 billion U.S. dollars.

The trade surplus for the first 10 months was down 27.2 percent at 159.23 billion U.S. dollars.

The EU was China's biggest trading partner for this period, though bilateral trade declined 18.7 percent to 292.42 billion U.S. dollars in value; the U.S. was second with bilateral trade at239.36 billion U.S. dollars, down 14.9 percent; Japan followed with bilateral trade down 19.3 percent at 182.34 billion U.S. dollars.

Exports dropped 13.8 percent in October year on year, the smallest decline rate since January. In September, the rate was 15.2 percent.

"This suggests improving demand from overseas," said Zhang Junsheng, an international trade expert with the University of International Business and Economics, while forecasting exports would continue the downward trend until the first quarter next year.

Exports of labor-intensive products for the first 10 months showed a lower rate of decline than the average 20.5 percent drop in exports, the administration said.

In the year to October, the export value of garments dropped 10.9 percent, textiles were down 12.9 percent, and shoes fell 6 percent.

Meanwhile, imports of crude oil rose 9.4 percent, steel was up 10.3 percent, and iron ore increased by 36.8 percent, despite the 19-percent drop in total value of imports.

Zhang said this was because of rising industrial output and urban fixed-asset investment, which required more imports of some bulk stocks.

The National Bureau of Statistics announced Wednesday that industrial output of the world's third largest economy increased 9.4 percent year on year over first 10 months, and urban fixed-asset investment rose 33.1 percent to 15.07 trillion yuan (2.21 trillion U.S. dollars).

Gold soars to new record high as dollar hits new low

2009-11-11T18:13:00.000-08:00

Gold futures on the COMEX Division of the New York Mercantile Exchange rallied to a new all-time high on Wednesday as the U.S. dollar saw a new 15-month low, raising gold's appeal of hedge. Silver and platinum both rose.

The most active gold contract for December delivery gained 12.10 U.S. dollars, or 1.1 percent, to finish at 1,114.60 dollars an ounce. The precious metal touched a record peak of 1,119.10 earlier in the session.

Dollar continued to go down after several Fed officials said late Tuesday that the economic recovery is likely to be weak, which is considered by investors as another sign that policymakers will hold interest rates low to help economy recovery.
The dollar index, which measures the dollar against other currencies, slid to a new 15-month low of 74.855 in the overnight session.

Gold pared gains later in the session as the dollar recovered some ground but remained near a 15-month low.

December silver was up 31.5 cents to 17.537 dollars per ounce. January platinum rose 18.40 dollars to 1,369.60 dollars an ounce.

EU sets deadlines for member states to cut budget deficits

2009-11-11T18:11:00.000-08:00

The European Commission on Wednesday set deadlines for some of its member states to cut their excessive budget deficits.

The deadlines set are 2012 for Belgium and Italy, and 2013 for Austria, the Czech Republic, Germany, Slovakia, Slovenia, the Netherlands and Portugal.

It also extended the earlier deadlines set for France, Spain, Ireland and Britain by one year, that is 2013 for France and Spain,2014 for Ireland and financial year 2014-2015 for Britain, after concluding that the four countries have taken action to address the problem.

The Commission rebuked Greece for not taking "effective action" to reduce its budget deficit which is likely to rise to 12.7 percent in 2009.

"We all agree on the need to design clear and credible exit strategies to reduce public deficits and debts, which have been dramatically increased by the crisis," said Economic and Monetary Affairs Commissioner Joaquin Almunia.

"I believe the deadlines proposed today are appropriate and realistic," Almunia said.

The EU's Stability and Growth Pact requires member states to keep their budgetary deficit under the 3 percent limit, which only allows temporary breach to a small extent under exceptional circumstances.

However, the current economic crisis is taking a heavy toll on public finances in the EU due to falling revenues and rising social expenditure on the one hand, and the economic stimulus measures taken by the EU on the other hand.

According to the Commission's autumn economic forecasts, the average budgetary position in the EU fell from minus 0.8 percent of GDP in 2007 to minus 2.3 percent in 2008 when the economic crisis was hitting hard. The figure is expected to triple to minus6.9 percent this year and to increase further to minus 7.5 percent in 2010.

China raises gasoline, diesel prices

2009-11-09T18:55:00.000-08:00

China will raise gasoline and diesel prices both by 480 yuan (70.28 U.S. dollars) per tonne from Tuesday, the National Development and Reform Commission (NDRC) announced on its website Monday.

The benchmark price of gasoline will be 7,100 yuan a tonne and that of diesel 6,360 yuan a tonne, according to the NDRC.

The retail price of gasoline will climb by 0.36 yuan per liter and that of diesel will rise by 0.41 yuan per liter.

The country adopted a new fuel pricing mechanism, which took effect on Jan. 1.

Under the pricing mechanism, the NDRC will consider changing the benchmark retail prices of oil products when the international crude price changes more than four percent over 22 straight work days.

"Margins of price fluctuations are within expectation. The price hike can help relieve domestic refiners' pressure from soaring oil refining cost," said Wang Jing, an analyst on petrochemical sector with Orient Securities Company Limited.

The price hike was aimed to protect oil refiners' interests, ensure market supply and help lead rational consumption to promote energy-saving and emission reduction, the NDRC said.

The NDRC would take active measures to help reduce pressure brought to sectors like transportation, the NDRC said.

International crude oil price might continue to rise within this year as demand would continue to grow amid global economic recovery, Wang said.

Gold holds above $1,100/oz as rally pauses

2009-11-09T18:52:00.000-08:00

Gold held steady above $1,100 per ounce on Tuesday, taking a breather after reaching a record high above $1,110 the previous day as the dollar weakened and investors snapped up gold-backed exchange-traded funds.

Spot gold was at $1,104.90 per ounce at 0008 GMT, up 0.1 percent from New York's notional close of $1,103.85.

Bullion hit a new high of $1,110.85 per ounce on Monday, setting a record for the fourth time in five trading sessions.

U.S. gold futures for December delivery were at $1,105.70 an ounce, up 0.4 percent from Monday, when the contract rose $5.70 to $1,101.40. The December contract hit a record of $1,111.7 on Monday.

The SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, said its holdings rose 6.099 tons, or 0.55 percent, on Monday to 1,114.443 tons. It was the highest volume since early July, when the holdings stood at 1,120.19 tons.

Oracle Receives European Union Objections Over Sun

2009-11-09T18:51:00.000-08:00

Oracle Corp., the world's biggest database software maker, was told by European Union regulators that its $7.4 billion purchase of Sun Microsystems Inc. may break antitrust rules even though the U.S. approved the deal.

The European Commission, the EU's antitrust agency, issued a so-called statement of objections today, Sun said in a regulatory filing. The commission said Oracle's acquisition of Sun's MySQL database software causes competition concerns.

Oracle Chief Executive Officer Larry Ellison said Sept. 22 that its database software doesn’t compete with MySQL -- open- source software whose code is freely distributed and is used mainly to run Web pages. Ellison said Sun is losing $100 million a month as the transaction is delayed by the EU probe. He said he won’t divest MySQL, which he sees as an important asset to boost sales to small and midsize companies.

"The commission's statement of objections reveals a profound misunderstanding of both database competition and open- source dynamics," Oracle said today in a statement. "It is well understood by those knowledgeable about open-source software that because MySQL is open source, it cannot be controlled by anyone. That is the whole point of open source."

Sun, based in Santa Clara, California, is the fourth- largest maker of servers, computers used to run Web sites and corporate networks. Sun is also the owner of the Java programming language, Solaris operating system and Sparc computer chip used in some of its servers.

EU Pressure

While the statement of objections puts pressure on Oracle to offer concessions to the EU, it doesn't guarantee the regulator will block the deal. TomTom NV, Europe's largest maker of car-navigation devices, won approval for its acquisition of digital-mapping company Tele Atlas NV after receiving an EU complaint.

Oracle said in its statement that it plans to "vigorously oppose" the EU's statement of objections. The U.S. Justice Department's antitrust division approved the deal in August. In a statement today, Deputy Assistant Attorney General Molly Boast said "consumer harm is unlikely because customers would continue to have choices from a variety of well established and widely accepted database products."

Speedy Resolution

Boast also said the Justice Department remains "hopeful that the parties and the EC will reach a speedy resolution that benefits consumers in the commission’s jurisdiction."

Deborah Hellinger, a spokeswoman for Redwood City, California-based Oracle, didn’t respond to an e-mail seeking comment. Sun declined to comment beyond the statement, said Karen Kahn, a spokeswoman for the company.

Oracle said today that there are at least eight competitors in the database market, including International Business Machines Corp. and Microsoft Corp. Given the number of rivals and the fact that Oracle's database program and MySQL are "differentiated products," there is no basis in European law for the EU's objection, Oracle said.

"I happen to agree with Oracle," said Heather Bellini, an analyst at ISI Group in New York. She rates Oracle’s shares "buy" and doesn't own any. "I don't see how, at the end of the day, they could be considered competitors."

Oracle captured almost 43 percent of the database market in 2008, according to Gartner Inc., a research firm in Stamford, Connecticut. Sun’s share, including MySQL, was less than 0.5 percent, Gartner said in June.

The Brussels-based commission began an in-depth review of the takeover on Sept. 3 and is scheduled to rule by Jan. 19. The investigation followed lobbying by Oracle competitors including SAP AG and Microsoft.

After receiving the statement of objections, the company can request a hearing to convince the commission that there are no competition problems. Oracle also can appeal an EU veto at European courts in Luxembourg.

In the U.S., the Justice Department scrutinized the transaction's effect on the licensing of the Java programming language. The EU said in September that it had no issues with Java licensing.

Sun said last month that it plans to cut as many as 3,000 jobs, or about 10 percent of its workforce, to pare expenses over the next 12 months. The company last week reported that quarterly sales dropped 25 percent.

Oracle said today that the deal is "essential for competition in the high-end server market" and for helping to boost demand for Sun's other software, including Java. Competitors in the high-end server market include IBM and Hewlett-Packard Co. Sun's customers "do not benefit from the continued uncertainty and delay" caused by the EU's review, Oracle said.

"Given the lack of any credible theory or evidence of competitive harm, we are confident we will ultimately obtain unconditional clearance of the transaction," Oracle said.

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Credit Card Market Set To Change On Bank Shakeup

2009-11-08T17:21:00.000-08:00

The U.K. credit card market is set to undergo a massive change as banks sell off businesses and the government seeks to inject more competition in an attempt to entice consumers back to the market, according to a study released Monday.

The economic downturn has already cut credit card borrowing by 3% with the number of plastic cards down 8% over the last year, said PricewaterhouseCoopers. At the same time, bad debts in the sector have reached historic highs and now stand at nearly 6% of outstanding balances with every chance that these will reach 9% by the end of 2010, it added.

Meanwhile, the government has just launched a public consultation into credit and store card regulation primarily aimed at the way in which repayment policies lead to what are seen as excessively high interest rates. In addition, the way in which credit is sold across Europe is going to be tightened up to protect consumers through the Consumer Credit Directive, which is due to come into force by June next year.

"Large scale change within the sector over the next few years is inevitable. We???re likely to see credit cards being reinvented as payment rather than borrowing tools," said Richard Thompson, partner at PricewaterhouseCoopers.

Banks remain under colossal pressure to boost balance sheets and their credit card operations, fast-becoming another drain on dwindling profits, are likely to be sold alongside insurance and other retail services and products, giving new entrants the chance to enter the credit card market.

The result will be increased competition with consumers given more options over provider and type of product - contactless cards, prepaid cards and mobile payments are already being accepted by an increasing number of retailers, while previous 'cash-only' vendors such as taxis, public transport and vending machines are accepting card payments.

China hopes U.S. keeps deficit to appropriate size

2009-11-08T17:18:00.000-08:00

China hopes that the United States will keep its deficit to an appropriate size to ensure basic stability in the U.S. dollar exchange rate, Chinese Premier Wen Jiabao said on Sunday.

"We have seen some signs of recovery in the U.S. economy ... I hope that as the largest economy in the world and an issuing country of a major reserve currency, the United States will effectively discharge its responsibilities," Wen told a news conference in Egypt.

"Most importantly, we hope the United States will keep an appropriate size to its deficit so that there will be basic stability in the exchange rate, and that is conducive to stability and the recovery of the global economy," he added.

The premier had expressed concern in March that massive U.S. deficit spending and near-zero interest rates would erode the value of China's huge U.S. bond holdings.

China is the biggest holder of U.S. government debt and has invested an estimated 70 percent of its more than $2 trillion stockpile of foreign exchange reserves, the world's largest, in dollar assets.

"I follow very closely Chinese holdings of U.S. assets because that constitutes a very important part of our national wealth. Our consistent principle when it comes to foreign exchange reserves is to ensure the safety, liquidity and good value of the reserves," Wen said.

G20 reluctant to remove stimulus, differs on climate change financing

2009-11-08T17:15:00.000-08:00

It is still too early to remove stimulus, and climate change financing remains the key to success of the Copenhagen conference, the G20 finance ministers and bank governors said Saturday.

During the two-day G20 finance ministers and central bank governors meeting, the G20 policymakers held that many uncertainties still stood in the way of economic recovery, and the global economy would fall back to recession again if these uncertainties were not brought under control.

Both developed economies and developing countries agreed to maintain support for the recovery until it is assured, said a communique released after the meeting.

Although a series of positive signs showed up, such as the rising of stock value, house and commodity prices, British Prime Minister Gordon Brown maintained that these were "not a reason to end economic stimulus prematurely."

"We are only about halfway through dealing with the causes of the crisis," he said.

U.S. Treasury Secretary Timothy Geithner said at a news conference: "If we put on the brakes too quickly we will weaken the economy and the financial system... and the ultimate cost of the crisis will be greater."

Stephen King, global chief economist of HSBC, told Xinhua that developed countries were "like very sick patients being kept alive with special drugs," so it is hard to say whether they can gain a sustainable recovery after the stimulus is removed.

However, the G20 differed on ways of scaling back the stimulus and when. Though the United States, Japan and Germany hoped to lift the stimulus at an appropriate time, Britain stressed that the G20 should reach agreement over the principles for exit strategy and carry out the strategy in a coordinated way. Till now, Britain is still in recession.

For both developed and developing countries, stimulus policies are "a double-edged sword," analysts said. Officials are happy to see these policies have helped the economy out of recession, while they are worried that if the stimulus were not lifted at a good timing, they might face serious problems including inflation, quick-rising debts and asset bubbles.

By the end of the meeting, the G20 ministers agreed to adopt a detailed timetable on exiting stimulus measures, with the first steps to be announced by the end of January 2010, said the communique.

During the meeting, the G20, which accounts for the majority of the world economy, also discussed climate change financing, a month ahead of the UN Climate Change Conference in Copenhagen.

The ministers agreed that financing was the vital precondition for the success of the Copenhagen meeting, and also an indispensable part in dealing with climate change.

British Finance Minister Alistair Darling sent an appeal at a press conference that any efforts should be done to reach an agreement on climate change financing before Copenhagen conference.

"If there isn't an agreement on finance, if there isn't an agreement about contributions to make sure we can deal with this problem, the Copenhagen agreement is going to be much, much more difficult," he said.

However, the meeting failed to provide figures for climate change financing. The policymakers just committed to work toward an ambitious outcome in Copenhagen under the United Nations Framework Convention on Climate Change.

According to the communique, the G20 made no agreement on which options would be the most effective and feasible in tackling the threat of climate change.

The United States did not show its clear attitude on the financing issue, which was one of the main reasons for the failure to reach an agreement, observers said.

European Union leaders have also failed to specify how much they would contribute while agreeing that developing nations would need 100 billion euros (about 150 billion U.S. dollars) per annum by 2020.

Treasury Blocks the Sale of Tax Credits by Fannie

2009-11-07T23:37:00.000-08:00

The U.S. Treasury blocked Fannie Mae's proposed sale of nearly $3 billion in low-income housing tax credits to Goldman Sachs Group Inc. and Berkshire Hathaway Inc. on Friday after concluding that the deal was too costly for taxpayers.

The extraordinary move was the latest sign of tensions within the Obama administration over how to balance political and financial pressures resulting from the housing crisis.

Fannie Mae had agreed to sell roughly half of its $5.2 billion tax-credit portfolio and had received approval to proceed with the sale from its federal regulator, the Federal Housing Finance Agency.

Those credits are virtually worthless to Fannie because the company doesn't have any taxable income to offset, and it is forced to write down the value of those credits every quarter as their value declines.

But Treasury Department officials blocked the deal after concluding that it would have resulted in a loss of tax revenues greater than the savings to the federal government had it allowed the sale. "In short, withholding approval of the proposed sale affords more protection of the taxpayers than does providing approval," an administration official said in a statement.

In a federal filing on Thursday, Fannie said it had recorded $520 million in losses related to low-income housing tax credit and related investments during the third quarter and that it would be forced to record additional losses "if in the future we determine we no longer have the intent and ability to sell or otherwise transfer" those credits for value.

The blocked sale illustrates the political and policy challenges facing the government as it looks to conserve both companies' capital while balancing larger policy and political goals.

The deal pitted two government agencies against each other over how best to run Fannie and its smaller rival, Freddie Mac. The government took over both mortgage-finance companies 14 months ago through a legal procedure known as conservatorship.

Freddie Mac has a $3.4 billion portfolio of low-income housing tax credits and said in filings Friday that it would also be forced to record "significant" losses if it did "not receive regulatory approval for such transactions."

Spokesmen for Goldman Sachs and Fannie Mae declined to comment. Representatives for Berkshire Hathaway couldn't be reached for comment.

Approving the deal could have also furthered a perception that policy makers have taken steps that have favored Goldman ahead of other banks at a time when populist sentiment against Wall Street has surged.

$8,000 homebuyers tax credit extended

2009-11-07T23:35:00.000-08:00

President Obama signed an extension and expansion of the first-time homebuyers tax credit on Friday.

The $8,000 credit was scheduled to lapse on Dec. 1 but will now be in effect through the end of June. Homebuyers must sign a contract before April 30 and close by June 30. The income limits were also raised: Single buyers can now earn up to $125,000 and still get the full credit while a married couple can earn $225,000.

The bill also made more homeowners eligible to claim the credit on their taxes. First-time buyers -- those who have not owned a home in the past three years -- still qualify for an $8,000 rebate. But now people who want to trade up can also qualify. Those who have owned and occupied a residence for at least five years out of the past eight can claim a $6,500 tax credit if they close on a purchase by the end of June.

"The new version of the tax credit has the potential to stimulate the housing market even more than the old version due to the fact that more people will qualify under the new rules," said Gibran Nicholas, chairman of the CMPS Institute, an organization that certifies mortgage bankers and brokers.

Stocks end losing streak; Dow closes above 10,000

2009-11-07T01:48:00.000-08:00

Stocks snapped a two-week losing streak Friday as a surge in General Electric nudged the Dow Jones Industrial Average back above 10,000, marking its first weekly close above that level since the early days of the credit crisis.

Stocks snapped a two-week losing streak Friday as a surge in General Electric nudged the Dow Jones Industrial Average back above 10,000, marking its first weekly close above that level since the early days of the credit crisis.

The Nasdaq Composite Index (COMP 2,112, +7.12, +0.34%) was up 0.3% to 2112.44, up 3.3% on the week. The S&P 500 Index (SPX 1,069, +2.67, +0.25%) rose 0.3% to 1069.30, up 3.2% on the week.

Other markets showed a push into less-risky assets. U.S. gold futures topped $1,100 an ounce for the first time, settling at $1,095.10. Treasury prices were higher. Read more about gold and metals stocks.

Energy stocks lagged the broader market, hurt by a more-than-$2-a-barrel drop in oil prices as commodity traders bet on weak fuel demand following the jobs report. Oil futures settled down $2.19 to $77.43 a barrel in New York.

Consumer stocks benefited from the prospect that lower fuel prices might give Americans' greater leeway to spend on other items. Starbucks (SBUX 21.12, +1.42, +7.21%) was particularly strong, rising 7.2% after the coffee retailer raised its earnings outlook for next year and reported a $150 million fiscal fourth-quarter profit. Details about Starbucks' results.

Oil majors Exxon Mobil (XOM 72.58, +0.08, +0.11%) and Chevron (CVX 77.53, +0.29, +0.38%) were among the declining Dow components.

Sunoco (SUN 28.21, -2.91, -9.35%) , which reported a drop in earnings and poor margins on Thursday, was the biggest decliner among energy companies on the Standard & Poor's 500 Index. . Tesoro (TSO 13.97, -0.74, -5.03%) and Hess (HES 56.98, 0.00, 0.00%) , other big energy refiners, were also losers.

Declines in the Dow and in the broader market were led by financials and energy firms, including J.P. Morgan Chase (JPM 43.48, -0.39, -0.89%) .

$8,000 homebuyers tax credit extended

2009-11-07T01:41:00.000-08:00

U.S. unemployment rate hits 10.2%

2009-11-07T01:36:00.000-08:00

U.S. unemployment rate rose by 0.4 percentage point to 10.2 percent in October, the highest in more than 26 years, the Labor Department reported Friday.

In the past month, the employers cut 190,000 jobs, more than the 175,000 economists had expected but fewer than the 219,000 lost in September.

The October reading of unemployment rate was also worse than the 9.9 percent expected by economists. Since the recession began in December 2007, the U.S economy has lost a net total of 7.3 million jobs.

U.S. President Barack Obama said the surge in the unemployment rate was a "sobering" figure that underscored the economic challenges ahead.

"Although we lost fewer jobs than we did last month, our unemployment rate climbed to over 10 percent, a sobering number that underscores the economic challenges that lie ahead," he said.

"I promise I won't rest until America is prosperous once again," the president vowed.

According to the Labor Department, the manufacturing sector shed 61,000 jobs last month while construction industries axed 62,000 jobs. Retail trade employment fell by 40,000 over the month.

Meanwhile, professional and business services added 18,000 jobs, and employment in the education and health services grew by 45,000jobs over the month.

The average work week in October was unchanged at 33 hours, the lowest on records dating to 1964.

The Federal Reserve, which is the central bank of the United States, has said that the nation's unemployment rate will remain elevated into 2011. Many economists believe the labor market may not get back to normal -- meaning a 5 percent unemployment rate --until 2013.