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November 30, 2010

Estonia On Final Countdown To Euro Adoption

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Estonia on final countdown to euro adoption

 

With only one and a half month to go before the introduction of the euro in Estonia, the Commission today assessed the state of its practical preparations for the changeover. The Commission concluded that Estonia’s preparations are well advanced, while recommending further efforts in some areas during the final phase of the changeover. Estonia will be the 17th member of the euro area and will bring to 330 million the number of people in the European Union who share the single currency.

 

The Commission today adopted the eleventh regular ‘Report on the practical preparations for the enlargement of the euro area’. It focuses on Estonia, which will adopt the single currency on 1 January 2011.

 

“I am looking forward to welcoming Estonia in the euro area in January. The preparations in the financial sector are well advanced and the authorities are informing the public about the euro. I am confident everything will go well and I am convinced that Estonia will continue to pursue the stable and sound budgetary and macro-economic policies that will enable it to take full advantage of the euro”, said Olli Rehn, European Commissioner for Economic and Monetary Affairs.

 

Estonia has ordered around 45 million banknotes and 194 million coins to introduce the euro in cash. The banknotes will be borrowed from a National Central Bank in the euro area (Finland), in line with the practice in the recent changeovers. The euro coins are provided by the Mint of Finland following a public tender procedure.

 

The Central Bank of Estonia will start providing euro banknotes to commercial banks (so-called frontloading) in mid-November. The frontloading of euro coins started already in mid-September. As from 1 December 2010, all those retailers and businesses that have signed a specific contract with their bank will also be provided with euro cash. . All professional euro cash transports will be assured with the highest security.

 

As from 1 December 2010, 600,000 ‘euro coin mini-kits’ will be on sale at banks and post offices for people to by them in advance of the changeover. They will also be able to exchange their kroon cash holdings free of charge at the official conversion rate (1 EUR= 15.6466 EEK).

 

During the first two weeks of the changeover, Estonian kroons and euro will circulate in alongside each other. . Shops are however expected to give change in euro only whenever possible. This is important in order to speed up the changeover and reduce the cost of having to handle two currencies simultaneously.

 

In order to address consumers’ concerns about price increases and abusive practices in the changeover period, a Fair Pricing Agreement was launched at the end of August. The subscribers to the Agreement (e.g. retailers, financial institutions, local governments, internet shops etc) commit not to increase their prices without justification during the changeover to the euro and to respect the changeover rules. This is a very important initiative and special attention should be paid to improve its coverage, especially among small and medium-sized companies.

 

According to the latest Eurobarometer survey, carried out in September 2010, there has been an important income in the degree to which respondents in Estonia feel informed about the euro in comparison with May 2010, with 65% now feeling well informed (+15pp). This is encouraging, but efforts need to be pursued in order to reach all Estonian residents, in particular vulnerable groups, in time with the necessary information.

 

A staff working document attached to the report looks at the state of preparations in the other Member States that have not yet introduced the euro (except UK and Denmark that have a formal opt-out from the single currency)

 

=Estonia at a glance=

 

Estonia joined the European Union in 2004 and will adopt the euro on 1 January 2011

Surface area: 45 230 km2
Population: 1 340 341(Eurostat 2009)
Joined the European Union: 1 May 2004
Currency: kroon (EEK). Euro as of 1 January 2011

 

=Euro information=

Status: As of 1 January 2011, Estonia will be a member of the euro area. The kroon joined the Exchange Rate Mechanism (ERM II) on 28 June 2004 and observed a central rate of 15.6466 to the euro with standard fluctuation margins of ±15%. On 13 July 2010 the Council gave its green light to the adoption of the euro by Estonia on 1 January 2011.

 

Fixed conversion rate: €1 = 15.6466 Estonian kroonid

 

Adoption of the euro: Estonia will adopt the euo as of 1 January 2011

 

INFO : http://baltic-review.com/2010/11/12/estonia-on-final-countdown-to-euro-adoption/

 

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South Australian businesses strongest in ‘growth, cashflow’ – survey

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South Australian businesses strongest in ‘growth, cashflow’ – survey

SOUTH Australian small-to-medium-sized enterprises had the nation’s strongest business conditions and equal-highest cash flow position in the September quarter.

The latest NAB SME quarterly survey shows business conditions in SA rose by one index point, to eight, in the three months to September 30.

Nationally, the index fell by an average of one index point.

SA and Western Australia reported the nation’s strongest cash flow position, at 11 points.

NAB state general manager nabbusiness Jacqui Colwell said the results showed SA’s small businesses continued to outperform their Australian counterparts.

“South Australian SMEs have maintained the highest, or equal highest, business conditions nationally for the past year,” she said.

“The SA economy is characterised by steady growth without the level of peaks and troughs experienced in other states.”

Ms Colwell said the September quarter results highlighted the effects of ongoing global economic uncertainty, speculation around interest rates and this year’s drawn-out federal election.

“(This) caused some business owners to defer investment plans, focus on reducing debt levels and (curb) discretionary spending,” she said.

The survey also reveals that confidence among SMEs for the December quarter has improved strongly.

The 12-month outlook was “optimistic” at 25 points.

Other key results from the survey show:

* Small businesses operating in the finance and accommodation sectors had the strongest cashflow positions, with 28 and 14 points respectively. Construction and retail were the weakest in this area.

* Cash flows and borrowing costs were the most critical issues for SMEs.

*Business services, finance and health were the strongest performing SME sectors in the September quarter.

“The period leading up to Christmas is critical for many industries, particularly the retail sector which, unlike the Australian tourism industry, can benefit from the appreciating dollar,” said Ms Colwell.

November 28, 2010

HSBC Eyes Australian Expansion

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HSBC Eyes Australian Expansion

SYDNEY—HSBC Holdings PLC, Europe’s biggest bank by stock-market value, will beef up its corporate-finance business in Australia, part of a strategy to increase its presence in an economy booming on the back of Asia’s demand for commodities, the lender’s local chief executive said.

“There’s a lot of interest in good corporate fundamentals coming out of Australia,” Paulo Maia, HSBC’s Australia head, said in an interview with The Wall Street Journal.

A greater emphasis in Australia comes as HSBC and other international lenders search for low-risk opportunities outside more traditional markets in the U.S. and Europe, which are recovering more slowly than Asia from the global financial crisis. Asia accounts for more than half the bank’s total earnings.

The bank plans to hire for its Australian debt capital markets team as well as expand its onshore leveraged acquisition and loan syndication operations, said Mr. Maia, who was previously deputy chief executive of the European bank’s Brazilian business.

HSBC particularly wants to tap into the growing market for leading local corporations and banks to borrow money offshore. Already this year, the volume of nonbank corporations issuing foreign-currency debt has grown by 35% to 13.97 billion Australian dollars (US$13.71 billion) split across 26 deals, according to Dealogic.

HSBC’s first-half pretax profits from Australia grew 28% compared with a year earlier to A$152 million. Still, that’s a slower rate of growth than seen at local rivals, including Commonwealth Bank of Australia, which in the same period recorded a 37% jump in pretax profits.

Compared with its Australia rivals, HSBC has a relatively small retail-branch network in the country. But Mr. Maia rulef out buying a smaller local bank to build its presence in big urban centers like Sydney, Melbourne and Brisbane.

“We haven’t been able to identify any bolt-on acquisitions that would make sense for us,” he said. “We want to play on the mass affluent; we don’t want to go too much downmarket.”

HSBC’s enthusiasm for Australia comes as the bank remains locked in a war of words with the British government over the rising cost of basing itself in Europe. The bank’s outgoing CEO, Michael Geoghegan, and his successor, Stuart Gulliver, have warned separately that new rules proposed to curb pay in the financial-services industry are putting it at a disadvantage to its U.S. rivals in international markets.

From The Wall Street Journal – WSJ.com

Online sales see 16 percent spike on Black Friday

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Online sales see 16 percent spike on Black Friday

NEW YORK (AP) — Shoppers who skipped the crowds on Black Friday gave online merchants a 16 percent spike in revenue, according to data released Saturday.

That increase came partly from shoppers who spent more per online purchase during the traditional opening day of the holiday shopping season, according to Web research company Coremetrics. The average order rose to $190.80. That’s a 12 percent increase over $170.19 on the same day last year.

The solid increase adds to a 33 percent online spending spike on Thanksgiving day, and signs of bigger-than-expected crowds in stores.

Shopping on smart phones remained a small piece of the pie. Coremetrics said about 5.6 percent of people logged onto a retailer’s website using a mobile device.

More dollars have shifted to online shopping over the years, but it’s still a relatively small share of all holiday spending, between 8 and 10 percent.

But many shoppers have become converted to the comfort and convenience of browsing the Web for gifts.

Kelly Hager, 30, of Baltimore, Md., is shopping exclusively online for the fourth year in a row.

“It’s nice to not have to fight for a parking spot and deal with 3 billion people who are all trying to get the same thing I’m trying to get,” she said. Hager used to work at a mall, so she’s seen Black Friday from both sides.

Those who did fight the crowds had retailers feeling bullish about the prospects for the rest of the holiday season. Broad discounts spurred long lines.

Retailers and analysts were also encouraged that people seemed to be buying more items for themselves, a sign they’re feeling confident enough to spend more money overall.

Amanda Jewell was standing in a short line at the entrance of GameStop in Bellevue, Wash., before the doors opened at 7 a.m. Friday.

This year, Jewell is planning to spend about the same amount or maybe a little more on the holidays as in 2009 — $1,500 to $2,000 total.

“I feel a little more relaxed about it,” Jewell said. “Last year I was just buying presents, not for myself. This year I feel better about buying for myself.”

Jessica Mintz in Bellevue, Wash., contributed to this report

November 26, 2010

Conspiracy and the euro, but Soros Is ‘Confident’ in Euro ?

Filed under: Uncategorized — bigcapital @ 8:14 pm
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Conspiracy and the euro

I have reported from many countries where crises are blamed on “foreign hands”. More often than not they are unnamed. Indeed these sinister conspirators can have greater credibility if they remain in the shadows.

 

Sometimes the conspirator is identified. After the recent anti-government demonstrations in Iran, officials blamed British intelligence for stirring up the mob.

Now with the euro facing its severest test, some see conspiracy here too. The Greek Prime Minister, George Papandreou, when talking to his domestic audience, said that his country had become “a laboratory animal between Europe and the markets”. The message to the Greek people is that speculators are to blame.

The cry has been taken up by the Spanish Public Works Minister, Jose Blanco. “None of what is happening in the world,” he concludes, “including the editorials of foreign newspapers, is coincidental or innocent”.

Spanish papers report that the country’s National Intelligence Centre is looking into “speculative attacks on Spain”. Thrown into this inquiry is “the aggressiveness of some Anglo-Saxon media”.

As the conspiracy unfolds, the plotters emerge as “Anglo-Saxon” speculators. Some French commentators are drawn to this scenario. It’s the Anglo-Saxon banks and hedge funds who are behind the euro crisis, is their conclusion. Indeed, one French commentator was quoted as saying “those who played against Greece will pay dearly. The European Union states now view this as direct aggression against them.”

Even the head of the 16-nation Eurogroup, Jean-Claude Juncker, is drawn to the idea of the euro as victim. “We shouldn’t accept to be the target of financial markets,” he says. “I am concerned,” he goes on, “at the irrational way of behaving of financial markets”.

In the UK, Labour MP and former Europe Minister Denis MacShane writes that “the Anglo-Saxon club of anti-Europeans is on the rampage”.

So the plot seems to be this: that some Anglo-Saxon “hedgies” are targeting the euro, egged on by a supporting cast of anti-European scribes.

 

So what do we know?

It is true that speculators have raised their bets against the euro. It is reported that the Chicago Mercantile Exchange, which reflects hedge fund activity, has witnessed growing positions being taken on the euro falling further. It is, however, what foreign currency trading is all about. As Charles Grant of the Centre for European Reform points out, “people take bets on currencies – if they overreach themselves they go bust”.

Regardless of conspiracies, however, there are some real, fundamental problems. Firstly, the Greek accounts were exposed as fakes. When its deficit shot up, financial markets feared the huge public debt may cause it to default. That is not just a judgement by markets – senior officials in Greece believe that too. The Greek Finance Minister, George Papaconstantinou, admits his country is in “a terrible mess”. Confidence in Greek accounting has not yet returned.

There is little faith either that the Greek government can implement its austerity plans. Only today Greek customs officials walked off the job for three days in protest at the spending cuts. Fuel truck drivers may join in. The message from the meeting of European finance ministers today was that Athens “must surpass expectations (in its spending cuts), and so far they have not done so”.

Secondly, no one yet knows the details of how any bail-out would work. The uncertainty plays on market fears. Greece wants the EU to set out how any potential rescue would function. Several key countries including Germany don’t yet want to show their hands. They are giving Greece until 16 March to show it is making progress with its austerity plan. If it isn’t, they may insist on Athens taking harsher measures, including raising VAT.

It is worth noting that the IMF will have a strong and possibly growing role in monitoring and advising the Greeks on their plans.

Thirdly, Germany is willing to play the longer game because politically any bail-out would be very difficult to sell at home. The German people don’t want it. Charles Grant says, however, he is certain that in the end Germany would act to prevent Greece defaulting. After all, it has signed up to a statement to “defend the stability of the euro”. He says it is “understandable” at this stage that Germany wouldn’t want to be too “explicit” about its plans, but who exactly will do the bail-out remains unclear.

Fourthly, there are the imbalances between the countries in the eurozone. They cannot be wished away. Germany, for instance, has a tight wage policy. It relies on exports for growth and does well out of the eurozone. But Southern European countries can’t export their way out of recession when domestic demand in places like Germany remains so weak. And it is highly unlikely that Berlin will loosen its policies to save the Greeks.

Fifthly, there are widespread doubts among those who support the euro that it can survive in its present form whilst fiscal policies are decided at the level of national governments.

So as Nicolas Veron of the Bruegel Institute says “the markets are testing the limits of the single currency policy framework”.

So conspiracy? The markets are giving the euro a severe stress test because they suspect there are real flaws and uncertainties that have not been addressed.

The respected economist Paul Krugman had a take on all this today: “The real story behind Europe’s troubles lies not in the deficit but in the policy elites, who pushed the Continent into adopting a single currency well before the Continent was ready for such an experiment.”

 

Soros Is ‘Confident’ in Euro Zone ?

“I’m actually confident Greece will do whatever is necessary to meet conditions to remain a member of the euro to qualify for financing by the ECB for Greek government bonds,” Soros told reporters in Jakarta Newspaper

World stock markets rallied since yesterday as prospects for a bailout of Greece eased concern that deteriorating government finances will derail the global economic recovery

“Providing Greece meets its target, I hope the European Union, the European Central Bank, the euro zone will find a way to finance the government in a way that’s not too expensive for Greece to provide some relief,” said Soros, 79, who was in Indonesia meeting Vice President Boediono.

Billionaire investor George Soros, who made $1 billion in 1992 correctly betting against the British pound, said he expects Greece will be able to remain in the euro region.
 

 

“The Greatest Buying Opportunity for Euro ?”

“You never want a serious crisis to go to waste,” Rahm Emanuel, U.S. President Barack Obama’s chief of staff, said during the 2008 credit crunch. “It’s an opportunity to do things that you could not do before.”

The euro area and the European Central Bank are now dealing with what markets are calling the “PIGS” crisis: Portugal, Ireland, Greece and Spain. Sometimes Italy is added to the list, but its finances seem to be in slightly better shape.

The bond markets have picked on Greece, punishing the country for running up a budget deficit equal to 12.7 percent of gross domestic product. Now the focus is on other indebted countries in the euro area. Equity and currency markets are jittery as central bankers seek a lasting solution.

It’s a crisis, no doubt. But the ECB should, perhaps, see it as an opportunity.

There has been confusion about fiscal responsibility since the euro was created a decade ago. This is the chance to set the record straight. Get this crisis right, and the euro could establish itself as the dominant world currency. Get it wrong, and by 2030 the only place you’ll be able to get euro notes will be as souvenirs on EBay Inc.

The nub of the PIGS problem is very simple: For years, they have been able to incur debts in a currency that was far stronger, and had much lower borrowing costs, than the old national ones the euro replaced. Now the bill is falling due. Either they implement tough austerity measures, subjecting their economies to savage recessions. Or else they can quit the euro and introduce a new currency. Either way, the outlook is grim.

There is, however a three-step program, that would manage the crisis and strengthen the euro in the long term.

By Market Talk via News – Europe

.

November 19, 2010

Bernanke Fires Back At Criticism About Fed Easy Money Policies

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Bernanke Fires Back At Criticism About Fed Easy Money Policies

WASHINGTON (Dow Jones)–Federal Reserve Chairman Ben Bernanke fired back at criticism from home and abroad that his easy money policies are designed to cheapen the U.S. dollar, arguing China and other emerging economies are causing problems for themselves and the rest of the world by preventing their currencies from strengthening as their economies grow.

By keeping their currencies artificially low, Bernanke argued in remarks prepared for delivery in Frankfurt Friday, China and some other emerging markets are allowing their economies to overheat and are producing what he called “a two-speed…recovery” that isn’t sustainable. Their “strategy of currency undervaluation,” he warned, had “important drawbacks” for them and the world economy.

Bernanke has come under attack for deciding to buy $600 billion in U.S. Treasury bonds in an effort to drive down long-term interest rates. Critics in the U.S say it could cause inflation. Those abroad say the flood of dollars that the Fed is effectively printing to finance the purchases is causing investors to pour money into overseas economies and could cause asset bubbles. Some have accused the Fed of trying to weaken the dollar to spur U.S. exports.

Bernanke countered that argument, saying the Fed’s policies are aimed at strengthening the U.S. economy, which in turn should benefit the U.S. dollar.

The Fed chief underlined that the U.S. dollar’s status as a safe haven during times of financial market turmoil, such as Europe’s debt crisis earlier this year, stems from the underlying strength and stability the U.S. economy has shown over the years. The fact that when global investors get nervous, they prefer the U.S. dollar to any other currency is a good thing which the U.S. wants to maintain, Bernanke signaled.

“Fully aware of the important role that the dollar plays in the international monetary and financial system, the (Fed) believes that the best way to continue to deliver the strong economic fundamentals that underpin the value of the dollar, as well as to support the global recovery, is through policies that lead to a resumption of robust growth in a context of price stability in the United States.”

Bernanke effectively acknowledged the U.S. currency does need to weaken against currencies in emerging markets because their economies are growing so much faster than economies in the developed world.

“The exchange rate adjustment is incomplete, in part, because the authorities in some emerging market economies have intervened in foreign exchange markets to prevent or slow the appreciation of their currencies,” the former Princeton professor said.

Though scholarly in tone, the Fed chairman’s message was unusually blunt in laying blame for inflationary pressures in emerging markets and tensions over currencies on countries like China.

“Why have officials in many emerging markets leaned against appreciation of their currencies toward levels more consistent with market fundamentals?” he asked. Mainly because they believe that will spur exports and boost growth, he said, but that strategy is threatening global growth.

Central banks in many countries intervene in currency markets to manage exchange rates. As dollars flood into their economies from exports, the central banks hold on to the dollars and use them to purchase assets like U.S. Treasury bonds rather than converting them into back into their domestic currencies, which would make those currencies rise in value. Bernanke noted that by selling so much yuan in exchange for dollars to keep the yuan low, China has accumulated a massive $2.6 trillion stock of U.S. dollars assets.

Countries like China that keep their currencies undervalued could face important costs at home, including a reduced ability to use monetary policies to stabilize their economies and the risks associated with excessive or volatile capital inflows. Some economists fear inflation could take off in China’s over-heating economy, or a property bubble may be developing.

Bernanke also tried to respond to domestic critics of the Fed’s recent move, laying out a case that unemployment could keep rising without action by the central bank and that inflation was too low and could fall further.

Though critics say inflation could soar because of the Fed’s actions, Bernanke said he was committed to keeping inflation at around 2%. It is now around 1%, by the Fed’s preferred measures, which strip out food and energy prices.

“On its current economic trajectory the United States runs the risk of seeing millions of workers unemployed or underemployed for years,” Bernanke warned. “As a society, we should find that outcome unacceptable.”

Bernanke got one voice of support from an important internal skeptic Thursday. Narayana Kocherlakota, president of the Federal Reserve Bank of Minneapolis, said in comments in Chicago, that he supported the Fed’s easing program. He had expressed some skepticism about its need and effectiveness in the past, but described the program Thursday as “a move in the right direct” though he added he didn’t think it was a cure-all for the U.S. economy, a point that Bernanke echoed in his Frankfurt comments.

(END) Newswires

November 18, 2010 21:00 ET (02:00 GMT)

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More rate rises on the cards, says OECD

More rate rises on the cards, says OECD

* Australia’s recovery ‘will need further rate rises’
* ‘Mining boom is fuelling economic recovery’
* OECD report forecasts economic growth

AUSTRALIA’S strong recovery from the global economic downturn, fuelled by the mining boom, means the Reserve Bank of Australia (RBA) will have to continue to raise its official cash rate, the Organisation for Economic Cooperation and Development (OECD) says.

The OECD also said the global recovery has become more hesitant, but low interest rates in many countries suggest this “soft patch” is unlikely to persist for too long.

In its semi-annual Economic Outlook report, released overnight, the OECD said Australia’s projected growth was likely to require a further tightening of monetary conditions to ensure that a non-inflationary recovery remained on track.

The OECD is forecasting Australian economic growth at 3.6 per cent in 2011 and 4.0 per cent in 2012, after 3.3 per cent in 2010.

“OECD projections include further tightening of monetary policy to moderate demand pressures and rein in the level of inflation, which is relatively high at the beginning of the cycle,” the Paris-based institution said

The RBA’s increase in the cash rate this month to 4.75 per cent was the seventh rise since October 2009.

The OECD expects inflation to remain near the top of end the RBA’s two to three per cent target band – 2.8 per cent in 2011 and 2.9 per cent in 2012.

More broadly among the 33 OECD countries, growth is forecast to expand by 2.3 per cent next year and 2.8 per cent in 2012, with inflation at a subdued 1.5 per cent and 1.4 per cent, respectively.

“The global recovery is continuing to recover, but progress has become more hesitant,” the think tank said.

“With monetary policies remaining accommodative even as fiscal consolidation becomes widespread, the present soft patch in output growth is not projected to persist for long.”

Australia’s unemployment rate is expected to fall below five per cent after mid-2011 and to 4.7 per cent in 2012, compared with 5.4 per cent as of October this year.

This is well below the expected OECD average of 8.1 per cent next year and 7.5 per cent the following year

The OECD said increased business investment should be the main engine room of Australian economic growth.

“The strength of demand from major Asian countries and the terms of trade will favour the mining sector, whose expansion should have a knock-on effect on the rest of the economy,” the OECD said.

“These developments will probably compensate for weaker (government) demand and stimulate job creation, which should support household incomes and consumption.”

The OECD said this positive outlook, associated with the development of China, could boost confidence and produce even stronger than expected growth in domestic demand.

“However, this scenario might also be adversely affected by renewed financial turbulence in the OECD area or by an unexpected slowdown in the Chinese economy,” it said.

As in a more in-depth analysis of Australia by the OECD released last Sunday, the latest report urged reforms in the housing and infrastructure sectors to reduce bottlenecks that the mining boom was likely to exacerbate

SOURCE: http://www.news.com.au/business/

November 16, 2010

Abu Dhabi investment fund eyes European deals-paper

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ABU DHABI, Nov 15 (Reuters) – Abu Dhabi’s fastest growing investment fund Aabar is eyeing three European deals worth 2 billion euros ($2.74 billion) after selling its stake in Banco Santander’s Brazil unit, its chairman said in remarks published on Monday.

Aabar, which recently delisted from the Abu Dhabi Securities Market (ADX), is looking at two infrastructure investments in Europe valued at between 500 million and 1 billion euros, Khadem al-Qubaisi told the Financial Times.

Aabar is also considering buying a “small stake” in a blue-chip telecoms company in Europe or the United States that could be worth 1.95 billion euros, he told the paper.

International Petroleum Investment Company (IPIC), the parent company of Aabar, considered buying up to 10 percent of BP after the then chief executive Tony Hayward made an approach, he said, but IPIC backed off after the UK oil company made clear it wanted investors to buy shares in the open market.

Aabar’s assets have grown to $13 billion and are expected to touch $15-$16 billion by end of next year with new deals, he said.

 

 

Oil-exporter Abu Dhabi is investing billions of dollars in industry, tourism, real estate and infrastructure to diversify its economy away from oil. Its investment funds are actively investing across asset classes globally. ($1=.7312 Euro)

November 14, 2010

Irish Banks’ ECB Borrowings Rise to 130 Billion Euros

 

Irish Banks’ ECB Borrowings Rise to 130 Billion Euros

 

Bank of Ireland rose 5 percent to 40 euro cents as of 12:25 p.m. in Dublin trading, reversing earlier declines, while Allied Irish Banks Plc soared 15 percent and Irish Life & Permanent Plc gained 4.7 percent on Friday.

 

 

Nov. 12 (Bloomberg) — Irish-based lenders’ borrowings from the European Central Bank rose 7.3 percent last month as the yield investors demanded to hold the state’s debt surged on concerns about its budget deficit and mounting bank losses.

 

ECB funds used by lenders including international and domestic companies climbed to 130 billion euros ($178 billion) as of Oct. 29, from 121.1 billion euros at the end of September, according to statistics published on the central bank’s website today.

Irish government bonds gained for the first day in almost three weeks today after European finance ministers said plans for a new system to handle euro-region debt crises won’t apply to outstanding debt.

 

Ireland’s banks are becoming more dependent on the ECB after the central bank said in September a bailout of lenders may cost as much as 50 billion euros as the state sinks more funds into nationalized Anglo Irish Bank Corp. and other lenders. Finance Minister Brian Lenihan said yesterday markets didn’t “fully” believe the banking bailout figure and investors are taking a “wait and see” approach on bank losses.

 

The nation’s 10-year bond yield pared a two-day surge of more than 1 percentage point, and the difference, or spread, over German debt of similar maturity fell to 582 basis points today from 646 basis points yesterday. A basis point is 0.01 percentage point.

 

“Any new mechanism would only come into effect after mid- 2013 with no impact whatsoever on the current arrangements,” the finance ministers of Germany, France, Italy, Spain and the U.K. said in a statement distributed to reporters in Seoul today during the Group of 20 summit.

 

Ireland’s gross funding need for 2011 will be 23.5 billion euros, falling to 18.6 billion euros in 2014, the nation’s debt agency said today. Moody’s Investors Service said last month Ireland’s Aa2 rating may be cut, while Standard & Poor’s and Fitch Ratings already have reduced their rating on the country on concern about the cost of bailing out banks.

 

Bank of Ireland Plc, Ireland’s largest bank, has 20 billion euros of net borrowings from “monetary authorities,” compared with 8 billion euros at the end of June, executives at the bank said on a call with analysts today. Chief Executive Officer Richie Boucher said that its deposit base has been “broadly stable since the end of September,” following outflows after Ireland’s sovereign rating was cut in August.

 

Bank of Ireland rose 5 percent to 40 euro cents as of 12:25 p.m. in Dublin trading, reversing earlier declines, while Allied Irish Banks Plc soared 15 percent and Irish Life & Permanent Plc gained 4.7 percent.

The country’s central bank provides an update on ECB funding reliance only for domestic institutions at the end of every month.



November 13, 2010

Peru Central Bank May Raise 2010 GDP Growth Forecast To Over 8%

Filed under: Uncategorized — bigcapital @ 8:35 pm
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Peru Central Bank May Raise 2010 GDP Growth Forecast To Over 8%

 

 

LIMA (Dow Jones)–The Central Reserve Bank of Peru could increase its official economic growth forecast for 2010 to more than 8.0%, the bank’s chief economist said Friday.

 

During a conference call with journalists, Adrian Armas said there was “a possibility” of an upward revision from its current official forecast of 8.0% for 2010 in the bank’s next official report due out in December.

 

Armas also explained that the central bank’s decision Thursday

 

-The Wall Street JournaL-Saturday, November 13, 2010 As of 3:41 AM (GMT +8 hours)

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