Global stocks tumble as oil rises on Mideast worries (Reuters)

HONG KONG (Reuters) – Oil rose toward a 2-1/2 year high and stocks fell on Wednesday as investors shunned risky assets on concern that escalating tension in Libya would spread in the Middle East and disrupt fuel supplies.

Brent crude's dizzying 15 percent jump in less than two weeks has fanned worry about a stifling impact on the economic recovery, sending investors into relative safe assets such as gold and government bonds in volatile trading.

Though Asian stocks have gyrated to the swings in oil, markets have been largely resilient this time around compared with January's sell-off when investors dumped shares because of worry about inflation.

While oil's jump has put monetary policy behind the curve in some countries, many Asian central banks have already tightened considerably since the recovery began and therefore policy is not excessively loose in the region, IHS Global Insight said.

Shares in most Asian markets fell after Wall Street's slide overnight and as the CBOE Volatility Index VIX (.VIX), the so-called fear gauge, jumped sharply.

Tokyo (.N225) lead the losers with stocks falling more than 2 percent on futures-led selling. Seoul (.KS11) and Taiwan (.TW11) were down nearly a percent each.

Yahoo Japan (4689.T) was the notable outperformer with shares surging by 4.5 percent after a Reuters report that Yahoo Inc (YHOO.O) was in advanced talks to wind down its joint venture in Japan with Softbank Corp (9984.T).

"The market is volatile as oil's persisting gains and civil unrest in the Middle East is negatively affecting investor sentiment," said Lee Sun-yeb, a market analyst at Shinhan Investment Corp.

"But as long as we do not see the turmoil spreading to other countries within the region, current volatility will be contained and will eventually recover," Lee added.

The broader MSCI index of Asia-ex Japan stocks (.MIAPJ0000PUS) was down more than a percent. It fell two percent in February.

In the credit space, Asian sovereign spreads weakened with the Philippines widening the most by 4 bps to 140/143 bps.

Markets will keenly watch developments in the Middle East, especially Saudi Arabia, where stock markets tanked by nearly 7 percent on Tuesday and CDS spreads jumped.

GOLD, BONDS GAIN

U.S. Treasuries, a safe-haven asset, held near one-month lows with 10-year yields stabilizing at 3.40 percent, well below a peak of 3.74 percent hit last month..

Japanese government bonds too rose, with futures snapping a three-day losing streak.

Gold held just below a record high of $1,434 an ounce while spot silver hit a 31-year high.

In the currency markets, the euro dipped slightly after failing to break through a key resistance level, though further declines for the common currency may be limited a day before a European Central Bank (ECB) meeting.

Given euro zone inflation holding well above the ECB's target, markets expect the central bank to ramp up its anti-inflation talk with U.S. Federal Reserve Chairman Ben Bernanke's comments reinforcing market speculation that the ECB would raise rates before the Fed.

In Asian FX, the won is among the leading underperformers with the stock market working through a major support level.

The New Zealand dollar fell sharply after Prime Minister John Key said he expected the Reserve Bank of New Zealand (RBNZ) would cut interest rates next week after the devastating earthquake in Christchurch.

The Aussie/kiwi was last at NZ$1.3616 after hitting a high of NZ$1.3667, levels not seen since August 1992.

(Additional reporting by Jungyoun Park in SEOUL, Mantik Kusjanto in WELLINGTON, Krishna Kumar in SYDNEY, Jonathan Rogers at IFR; Editing by Robert Birsel)

View the original article here

Global stocks recover after oil price decline (AP)

LONDON – Stocks recovered their poise Friday following the previous day's sharp drop in oil prices on hopes that Saudi Arabia could make up for any shortfall in crude production from Libya.

The catalyst to Thursday's decline in oil prices was the expectation that Saudi Arabia, the world's biggest crude exporter, could pump more oil out to make up for lost supplies from Libya, which is effectively split into two after a popular uprising.

Under normal circumstances, Libya produces about 1.6 million barrels of crude per day, but its output has been heavily affected by the violence that has caused nearly 300 deaths, according to a partial count by Human Rights Watch.

In London, a barrel of Brent crude was up 15 cents at $111.51 a barrel, still $8 or so below its high point on Thursday. Meanwhile, the equivalent New York rate was down 7 cents at $97.23 a barrel, again around $5 down from the previous day's peak.

The knock-on effect on stocks has been positive as investors appeared releived that the recent sharp rise in oil prices has come to a halt, however briefly — the fear is that sky-high oil prices will choke the fragile economic recovery around the world.

In Europe, Germany's DAX closed up 0.8 percent at 7,185.17 while the CAC-40 in Paris rose 1.5 percent to 4,070.38. Britain's FTSE 100 index of leading British shares ended 1.4 percent higher at 6,001.20 after trading resumed following an earlier technical glitch that closed the market for about four hours.

In the U.S., the Dow Jones industrial average was up 0.4 percent at 12,114 around midday New York time while the broader Standard & Poor's 500 futures rose 0.8 percent to 1,316.

Libya was likely to continue to dominate sentiment as the trading week comes to a nervous end.

With reports indicating an escalation in the violence in the capital city of Tripoli, and large parts of the country under the control of opposition groups, there are fears that longtime leader Moammar Gadhafi may be preparing for a bloody showdown.

Autocratic leaders in Tunisia and Egypt have already had to quit this year following massive popular uprisings.

The biggest worry in the markets is not Libya but whether the crisis spreads through the Persian Gulf's bigger energy producers. Already Bahrain's government is facing daily protests and there are fears that Saudi Arabia's royal family may be next in line to face the wrath of its people. The announcement of a massive $36 billion package of benefits earlier this week was seen as an attempt by Saudi King Abdullah to ease popular discontent.

"If the political unrest was to spread to the world's largest oil producer, markets would have to discuss the possibility of a new oil crisis and its consequences for the global economy," said Ashley Davies, an analyst at Commerzbank.

If the crisis spreads there, experts say oil prices could reach $200 a barrel, potentially tipping the world economy back into recession.

The fragility of the global recovery was underlined by the fact that Britain contracted by a greater than anticipated 0.6 percent in the final three months of 2010, while the annualized growth rate in the U.S. for the same period was revised down to 2.8 percent from the initial estimate of 3.2 percent.

As elsewhere, the main focus in the currency markets was on events in Libya and the easing in the oil price from its most elevated levels gave the dollar a lift despite the lower-than-expected U.S. growth figures.

Elsewhere, the euro was 0.4 percent lower at $1.3756 while the dollar fell 0.2 percent to 81.75 yen.

In Asia, Japan's Nikkei 225 stock average rose 0.7 percent to close at 10,526.76 and South Korea's Kospi also added 0.7 percent, to 1,963.43. Hong Kong's Hang Seng index jumped 1.8 percent to 23,012.37.

The benchmark Shanghai Composite Index was virtually unchanged at 2,878.57, and down 0.7 percent for the week, while the Shenzhen Composite Index edged up less than 0.1 percent to 1,280.30 in lackluster trading.

____

Pamela Sampson in Bangkok contributed to this report.

View the original article here

Global IPOs have best start to year on record (Reuters)

LONDON (Reuters) – Global listings activity has been the highest on record so far this year, with firms raising a total of $24 billion to date, according to Thomson Reuters data, boosted by buoyant stock markets and improved investor interest.

It follows a record quarterly volume of initial public offerings (IPOs) in the final three months of 2010, which saw $122.2 billion raised globally, lifted by the mega floats of Asian insurer AIA Group (1299.HK) and U.S. automaker General Motors (GM.N).

Fundraising activity has been buoyed by relatively strong stock markets, with world equities, measured by the MSCI All-Country World Index (.MIWD00000PUS), hitting 2-1/2 year highs this month despite unrest in the North Africa region.

"Investor appetite for IPOs is effectively leveraged to equity market tone, and we finished 2010 with an exceptionally strong four month window from September to December that continued into early 2011," said Chris Whitman, global co-head of equity capital markets at Deutsche Bank.

"A larger universe of willing buyers then entices a larger universe of aspiring sellers."

Last year pockets of market volatility linked to euro zone sovereign debt worries created windows in which the IPO market, particularly in Europe, effectively closed, with billions of dollars worth of planned listings pulled.

"It's a sign of confidence that businesses which have been holding off in the past, as conditions weren't right, feel there's enough demand at the moment to get their floats away," said Henk Potts, equity strategist at Barclays Wealth.

"Valuations remain attractive and investors believe the equity market is a promising place to invest and therefore demand for those riskier equities has been increasing, and of course that very quickly filters through into a flourishing IPO market."

Although there are still some difficulties in the macro environment, investors are viewing the corporate environment more positively, Potts added.

The $24.3 billion raised globally since the start of January is a 20 percent increase on the same period last year, the data showed. Secondary offerings have also seen a boost, up 23 percent year-on-year to raise $67.7 billion globally.

Asia, which dominated equity capital markets in 2010, has continued to lead the field so far this year, with China accounting for 41 percent of issuance, including wind turbine maker Sinovel Wind's (601558.SS) $1.4 billion listing last month.

Boosted by strong energy and commodity prices, energy and power has been the most active sector, making up 30 percent of fundraising, followed by industrials on 16 percent.

U.S. pipeline company Kinder Morgan (KMI.N) raised around $2.86 billion earlier this month in the largest U.S. energy-related IPO since 1998, upping the size and price of its offering after strong demand.

With several big listings -- including a $3.7 billion offering from U.S. hospital operator HCA Holdings and a $2.4 billion IPO by Denmark's ISS -- currently in the works, and a huge pipeline of deals still to launch, the market shows no signs of slowing.

In particular, Europe is braced for a flurry of stock market listings in the next two months as firms use annual results as launching pads for share sales and hope to complete deals before investors disappear for the Easter break.

"If equity markets continue to be stable-to-higher, IPO activity is poised to continue to intensify," said Whitman.

"There is a good chance that IPO volumes for 2011 will be markedly higher than 2010."

(Editing by Hans Peters)

View the original article here

Global stocks recover after oil price decline (AP)

LONDON – Stocks recovered their poise Friday following the previous day's sharp drop in oil prices on hopes that Saudi Arabia could make up for any shortfall in crude production from Libya.

The catalyst to Thursday's decline in oil prices was the expectation that Saudi Arabia, the world's biggest crude exporter, could pump more oil out to make up for lost supplies from Libya, which is effectively split into two after a popular uprising.

Under normal circumstances, Libya produces about 1.6 million barrels of crude per day, but its output has been heavily affected by the violence that has caused nearly 300 deaths, according to a partial count by Human Rights Watch.

In London, a barrel of Brent crude was up 15 cents at $111.51 a barrel, still $8 or so below its high point on Thursday. Meanwhile, the equivalent New York rate was down 7 cents at $97.23 a barrel, again around $5 down from the previous day's peak.

The knock-on effect on stocks has been positive as investors appeared releived that the recent sharp rise in oil prices has come to a halt, however briefly — the fear is that sky-high oil prices will choke the fragile economic recovery around the world.

In Europe, Germany's DAX closed up 0.8 percent at 7,185.17 while the CAC-40 in Paris rose 1.5 percent to 4,070.38. Britain's FTSE 100 index of leading British shares ended 1.4 percent higher at 6,001.20 after trading resumed following an earlier technical glitch that closed the market for about four hours.

In the U.S., the Dow Jones industrial average was up 0.4 percent at 12,114 around midday New York time while the broader Standard & Poor's 500 futures rose 0.8 percent to 1,316.

Libya was likely to continue to dominate sentiment as the trading week comes to a nervous end.

With reports indicating an escalation in the violence in the capital city of Tripoli, and large parts of the country under the control of opposition groups, there are fears that longtime leader Moammar Gadhafi may be preparing for a bloody showdown.

Autocratic leaders in Tunisia and Egypt have already had to quit this year following massive popular uprisings.

The biggest worry in the markets is not Libya but whether the crisis spreads through the Persian Gulf's bigger energy producers. Already Bahrain's government is facing daily protests and there are fears that Saudi Arabia's royal family may be next in line to face the wrath of its people. The announcement of a massive $36 billion package of benefits earlier this week was seen as an attempt by Saudi King Abdullah to ease popular discontent.

"If the political unrest was to spread to the world's largest oil producer, markets would have to discuss the possibility of a new oil crisis and its consequences for the global economy," said Ashley Davies, an analyst at Commerzbank.

If the crisis spreads there, experts say oil prices could reach $200 a barrel, potentially tipping the world economy back into recession.

The fragility of the global recovery was underlined by the fact that Britain contracted by a greater than anticipated 0.6 percent in the final three months of 2010, while the annualized growth rate in the U.S. for the same period was revised down to 2.8 percent from the initial estimate of 3.2 percent.

As elsewhere, the main focus in the currency markets was on events in Libya and the easing in the oil price from its most elevated levels gave the dollar a lift despite the lower-than-expected U.S. growth figures.

Elsewhere, the euro was 0.4 percent lower at $1.3756 while the dollar fell 0.2 percent to 81.75 yen.

In Asia, Japan's Nikkei 225 stock average rose 0.7 percent to close at 10,526.76 and South Korea's Kospi also added 0.7 percent, to 1,963.43. Hong Kong's Hang Seng index jumped 1.8 percent to 23,012.37.

The benchmark Shanghai Composite Index was virtually unchanged at 2,878.57, and down 0.7 percent for the week, while the Shenzhen Composite Index edged up less than 0.1 percent to 1,280.30 in lackluster trading.

____

Pamela Sampson in Bangkok contributed to this report.

View the original article here

Global IPOs have best start to year on record (Reuters)

LONDON (Reuters) – Global listings activity has been the highest on record so far this year, with firms raising a total of $24 billion to date, according to Thomson Reuters data, boosted by buoyant stock markets and improved investor interest.

It follows a record quarterly volume of initial public offerings (IPOs) in the final three months of 2010, which saw $122.2 billion raised globally, lifted by the mega floats of Asian insurer AIA Group (1299.HK) and U.S. automaker General Motors (GM.N).

Fundraising activity has been buoyed by relatively strong stock markets, with world equities, measured by the MSCI All-Country World Index (.MIWD00000PUS), hitting 2-1/2 year highs this month despite unrest in the North Africa region.

"Investor appetite for IPOs is effectively leveraged to equity market tone, and we finished 2010 with an exceptionally strong four month window from September to December that continued into early 2011," said Chris Whitman, global co-head of equity capital markets at Deutsche Bank.

"A larger universe of willing buyers then entices a larger universe of aspiring sellers."

Last year pockets of market volatility linked to euro zone sovereign debt worries created windows in which the IPO market, particularly in Europe, effectively closed, with billions of dollars worth of planned listings pulled.

"It's a sign of confidence that businesses which have been holding off in the past, as conditions weren't right, feel there's enough demand at the moment to get their floats away," said Henk Potts, equity strategist at Barclays Wealth.

"Valuations remain attractive and investors believe the equity market is a promising place to invest and therefore demand for those riskier equities has been increasing, and of course that very quickly filters through into a flourishing IPO market."

Although there are still some difficulties in the macro environment, investors are viewing the corporate environment more positively, Potts added.

The $24.3 billion raised globally since the start of January is a 20 percent increase on the same period last year, the data showed. Secondary offerings have also seen a boost, up 23 percent year-on-year to raise $67.7 billion globally.

Asia, which dominated equity capital markets in 2010, has continued to lead the field so far this year, with China accounting for 41 percent of issuance, including wind turbine maker Sinovel Wind's (601558.SS) $1.4 billion listing last month.

Boosted by strong energy and commodity prices, energy and power has been the most active sector, making up 30 percent of fundraising, followed by industrials on 16 percent.

U.S. pipeline company Kinder Morgan (KMI.N) raised around $2.86 billion earlier this month in the largest U.S. energy-related IPO since 1998, upping the size and price of its offering after strong demand.

With several big listings -- including a $3.7 billion offering from U.S. hospital operator HCA Holdings and a $2.4 billion IPO by Denmark's ISS -- currently in the works, and a huge pipeline of deals still to launch, the market shows no signs of slowing.

In particular, Europe is braced for a flurry of stock market listings in the next two months as firms use annual results as launching pads for share sales and hope to complete deals before investors disappear for the Easter break.

"If equity markets continue to be stable-to-higher, IPO activity is poised to continue to intensify," said Whitman.

"There is a good chance that IPO volumes for 2011 will be markedly higher than 2010."

(Editing by Hans Peters)

View the original article here

Global stocks fall further on oil, inflation concerns (Reuters)

LONDON (Reuters) – World stocks fell further from a recent 30-month high on Wednesday while the euro rose as unrest in Libya drove oil higher and fanned concerns about inflation that could hamper a global economic recovery.
Wall Street suffered its worst day since August on Tuesday as the turmoil in oil exporter Libya gave investors an excuse to sell stocks and consolidate positions after a rally that has driven world stocks 6 percent higher this year.
The spike in oil prices comes at a time when many fast-growing emerging economies already face rising price pressure and the need to raise interest rates.
European Central Bank officials also stressed they stand ready to fight inflation with tighter monetary policy on Tuesday, prompting interest rate futures to bring forward expectations for a quarter point interest rate hike to August.
"There is very little reason for people to be adding to risk at the moment. The Middle East is going to cast a pall over the markets until they can see any proper direction," said Justin Urquhart Stewart, director at Seven Investment Management. The MSCI world equity index (.MIWD00000PUS) was down 0.25 percent at 340.74, falling more than 2 percent from Monday's peak. The Thomson Reuters global stock index (.TRXFLDGLPU) was down 0.15 percent on the day.
The FTSEurofirst 300 index (.FTEU3) fell 0.4 percent. Oil companies with operations in the Middle East fell, including BP (BP.L) and Royal Dutch Shell (RDSa.L), down 0.8 and 0.7 percent respectively.
Emerging stocks (.MSCIEF) lost half a percent.
SUPPLY CUT?
Popular protests have toppled entrenched leaders in Egypt and Tunisia, but Libya's defiant leader Muammar Gaddafi said he would not be forced out by the unrest sweeping Africa's third-largest oil producer.
At last three oil companies have halted output in Libya, which pumps 1.6 million barrels per day, or nearly 2 percent of global supply.
U.S. crude rose as high as $96.08 a barrel, the highest level since October 2008. Brent crude rose 84 cents to $106.62 a barrel. On Monday, Brent hit a 2-1/2-year high of $108.70.
The euro rose 0.4 percent to $1.3718. Luxembourg's Yves Mersch and Nout Wellink of the Netherlands both said on Tuesday the ECB was ready to fight inflation by increasing interest rates when needed -- adding to a series of warnings from the bank's policymakers this year.
"The associated warning about the risks of distortions from excessively low interest rates might not have been a clarion call for higher rates, but again highlight the clear divergence with the approach of the Fed," said David Watt, strategist at RBC Dominion Securities.
"These comments overshadowed concerns about the EU periphery."
The dollar (.DXY) fell 0.3 percent against a basket of major currencies.
The bund futures were steady on the day.
(Additional reporting by Brian Gorman; editing by Patrick Graham)
View the original article here

New Idea to Reduce Global Warming: Everyone Eat Insects (LiveScience.com)

There is a rational, even persuasive, argument for voluntarily eating insects: Bugs are high in protein, require less space to grow and offer a more environmentally friendly alternative to the vertebrates we Westerners prefer, advocates of the bug fare say.
However, this topic is not a hotbed of research, so while some data exist — in particular on the protein content of insects — there are some assumptions built into the latter part of this argument.
"The suggestion that insects would be more efficient has been around for quite some time," said Dennis Oonincx, an entomologist at Wageningen University in the Netherlands. He and other researchers decided to test it, by comparing the greenhouse gas emissions from five species of insects with those of cattle and pigs.
The results, Oonincx said, "really are quite hopeful."
Untapped potential
For much of the world, eating insects — officially called entomophagy — is neither strange nor disgusting nor exotic. In southern Africa, Mopani worms — the caterpillars of Emperor moths — are popular snacks. The Japanese have enjoyed aquatic insect larvae since ancient times, and chapulines, otherwise known as grasshoppers, are eaten in Mexico. But these traditions are noticeably absent in Europe and European-derived cultures, like the United States.
Insects' nutritional content, small size and fast reproduction rates have also made them appealing solutions to problems traditional agriculture can't solve. For instance, a task force affiliated with the Japanese space agency has looked to insects like silkworms and termites as a self-replenishing supply of fats and amino acids for astronauts on extended missions.
For children from 6 months to 3 years of age, low calories and low protein are the main causes of death, about 5 million a year, according to Frank Franklin, a professor and director of pediatric nutrition at the University of Alabama at Birmingham. Protein from insects could offer a less expensive solution if processed into a form similar to Plumpy'Nut, a peanut-based food for those suffering from malnutrition, he said.
Franklin embraced the arguments for entomophagy after learning about it roughly a year ago.
"The more I looked at it, the more it made incredible sense that this would be an important nutritional advance that is only going to bring back what has probably been there since the primitive man," he told LiveScience.
The comparison
A 2006 report by the U.N.'s Food and Agriculture Organization blamed the livestock sector for a sizable portion of humans' greenhouse gas emissions – 9 percent of our carbon dioxide emissions (much of this originates in changes in land use), 37 percent of our methane and 65 percent of our nitrous oxide emissions.
Oonincx and his colleagues used two important livestock animals, pigs and cattle, and compared existing data on their emissions of these greenhouse gases, plus ammonia, with data they collected from five species of insects: mealworms, house crickets, migratory locusts, sun beetles and Argentine cockroaches. The latter two species are not considered edible, at least not directly. Their taste is just not good, Oonincx said, however, protein extracted from them could be added to foods.
To quantify the animals' greenhouse gas footprints, the team measured the five insects' growth rates and their production of the greenhouse gases and ammonia — also a pollutant but not a greenhouse gas. They compared these to data already available on the cattle and pigs' growth rate and the rates at which they emitted the same pollutants.
Cattle produced the least carbon dioxide per unit of body mass. However, the picture changed once growth rate was considered. The data indicated that insects grow more rapidly, and they emit less carbon dioxide per unit of weight gained than do cattle and pigs. The cockroach was the clear winner in this latter category; meanwhile, cattle produced the most carbon dioxide per pound (or kilogram) gained. [The Truth about Cockroaches]
The insects generally produced less methane, nitrous oxide and ammonia both per unit of body mass and per unit of mass gained than pigs or cattle.
"It proves the hypothesis that insects can be a more efficient source [of protein], and I definitely believe there is a future for edible insects," Oonincx said. "It may not be as the animal as such but regarding protein extraction there is a lot to be learned and a lot to be gained."
Solving the livestock problem
There are strategies that can reduce greenhouse gas emissions associated with raising livestock but these improvements can't bring about reductions necessary to meet emissions targets intended to curb global warming, write the authors of a paper published in the medical journal the Lancet in November 2009.
Their solution: a 30 percent reduction in livestock production, and therefore, a drop in meat consumption. This would mean diets with less saturated fat and fewer premature deaths caused by heart disease, they write. (The researchers note that not everyone needs to reduce meat consumption; agriculture produces enough fat, protein and other nutrients to feed all of us, but food isn't distributed equally, resulting in malnutrition and starvation in some places.)
A policy that reduces our hamburgers and barbeque is likely to encounter resistance, one of the authors, Alan Dangour, of the London School of Hygiene & Tropical Medicine, acknowledged. However, so will a push to switch to insects, he told LiveScience in an e-mail.
"It is clearly worthwhile investigating alternative sources of high-quality protein," Dangourwrote. "However, the practical barriers to eating insects (in Westernized societies) are extremely large and perhaps currently even likely to be insurmountable."
David Gracer, an American advocate for entomophagy who co-organized a conference on the subject in December, welcomed the findings.
"It is wonderful to see science showing the world that what is instinctively apparent is actually factually correct," Gracer said. "The point is that most scientists in Western nations are too busy ignoring this subject to go ahead and take it seriously, and as soon as people do so, the experiments simply reinforce what we already assumed was true."
View the original article here

10 percent global rise in biotech crops: study (AFP)

SAO PAULO (AFP) – Global plantings of genetically modified crops increased 10 percent in 2010 compared to the prior year, according to a study which has been released by an organization that promotes crop biotechnology.
Last year, 15.4 million farmers in 29 countries planted genetically modified crops on 148 million hectares (366 million acres), said the report from the International Service for the Acquisition of Agri-biotech Applications (ISAAA).
The group's chairman, Clive James, said a rapid increase since 1996 shows that "biotech crops are the fastest-adopted crop technology in the history of modern agriculture."
The United States remained the largest biotech crop growing country with nearly 67 million hectares (165 million acres) of soybeans, corn and cotton.
Brazil was second with 25 million hectares (62 million acres), an increase of 19 percent over 2009.
Developing countries grew 48 percent of biotech crops last year, the report said, adding that they will surpass industrialized countries by 2015.
View the original article here

G20 sees 2 steps to tackling global imbalances: EU (Reuters)

BRUSSELS (Reuters) – Finance ministers from the world's 20 biggest developed and developing economies (G20) are likely to agree next week on a two-stage approach to tackling global economic imbalances, a European Union document showed.

Such imbalances, reflected in the current account balance, private and public savings, debt and capital flows, can trigger or augment crises, destabilizing the world economy. G20 leaders agreed in November to find a way to tackle them.

The first step would be to identify the imbalances using an agreed set of economic indicators and benchmark values.

The second step would be to analyze the causes of the imbalances and possibly make policy recommendations on how to deal with them.

The two-step approach has been agreed on by G20 deputy finance ministers who met in Paris for a preparatory meeting on January 14-15, the EU terms-of-reference document for EU G20 delegations to the Paris meeting on Feb 18-19 showed.

"The EU strongly supports the agreement reached by the deputies," said the document, obtained by Reuters.

"The two-step approach will add structure and focus to the work of the G20."

There is no agreement yet in the G20 on the full set of indicators to be used for the assessment of imbalances -- this is what G20 finance ministers are due to agree on in Paris.

The document said that the European Union would push for the following set:

- current account balance

- public deficit and debt

- private debt

- savings ratio

- net foreign asset position

- reserve adequacy

- real effective exchange rate

"The current account balance, rather than the trade balance should be a leading indicator as it provides a more complete and accurate picture of external sustainability," said the EU terms-of-reference document in an apparent reference to China, which a G20 source said preferred the trade balance measure.

A G20 source said that while the Paris meeting is likely to agree on which indicators to include in the assessments, their values, which would trigger a more in-depth analysis, would be decided in April at a G20 meeting in Washington.

INTERNATIONAL MONETARY SYSTEM

The G20 finance ministers will also discuss in Paris a reform of the international monetary system, including capital flows, international reserve assets and financial safety nets.

Investment flows can help poorer countries develop and grow, but they have been blamed for overheating economies and driving up inflation. They can also become a destabilizing force when investors suddenly withdraw money.

Over the past year fast-growing emerging markets such as Brazil have been the biggest recipients of these capital flows, and some nations have taken steps, such as raising taxes, to try to manage the influx.

"The EU believes in the benefits of the free movement of capital ... and sees with some concern the increasing use of temporary controls," the EU terms-of-reference document said.

"The EU sees temporary controls of capital inflows as a second best policy instrument to address volatile capital flows compared with macroeconomic macro-prudential and structural measures," the document said.

It added that the International Monetary Fund should identify what drove capital flows and what the appropriate domestic responses were as well as monitor global capital flows.

SDR ROLE

France, which took over the presidency of the G20 in November, is sounding out governments on ways to reform a monetary system dominated for decades by the U.S. dollar, with the aim of creating greater global stability.

French officials have said they hope to encourage greater use of the Chinese yuan as a reserve currency during their G20 presidency, including talks on a possible timetable for its inclusion in the basket of currencies which underpin the International Monetary Fund's Special Drawing Rights.

Other ideas include encouraging a greater role for the SDR itself as a reserve currency in an effort to move away from dollar hegemony.

The EU document indicated the 27-nation bloc was ready to consider the eventual inclusion of China's renminbi currency in the basket of currencies underpinning the SDR.

The EU was also ready to discuss SDR-denominated bonds, it said, inviting the IMF to explore ways to develop a private market for SDRs.

"The EU is also open to discuss the possible costs and benefits of SDR exchange rate pegs and SDR-denominated debt as a possible way to reduce balance sheet risks," it said.

(Editing by Greg Mahlich)

View the original article here

G20 sees 2 steps to tackling global imbalances: EU (Reuters)

BRUSSELS (Reuters) – Finance ministers from the world's 20 biggest developed and developing economies (G20) are likely to agree next week on a two-stage approach to tackling global economic imbalances, a European Union document showed.
Such imbalances, reflected in the current account balance, private and public savings, debt and capital flows, can trigger or augment crises, destabilizing the world economy. G20 leaders agreed in November to find a way to tackle them.
The first step would be to identify the imbalances using an agreed set of economic indicators and benchmark values.
The second step would be to analyze the causes of the imbalances and possibly make policy recommendations on how to deal with them.
The two-step approach has been agreed on by G20 deputy finance ministers who met in Paris for a preparatory meeting on January 14-15, the EU terms-of-reference document for EU G20 delegations to the Paris meeting on Feb 18-19 showed.
"The EU strongly supports the agreement reached by the deputies," said the document, obtained by Reuters.
"The two-step approach will add structure and focus to the work of the G20."
There is no agreement yet in the G20 on the full set of indicators to be used for the assessment of imbalances -- this is what G20 finance ministers are due to agree on in Paris.
The document said that the European Union would push for the following set:
- current account balance
- public deficit and debt
- private debt
- savings ratio
- net foreign asset position
- reserve adequacy
- real effective exchange rate
"The current account balance, rather than the trade balance should be a leading indicator as it provides a more complete and accurate picture of external sustainability," said the EU terms-of-reference document in an apparent reference to China, which a G20 source said preferred the trade balance measure.
A G20 source said that while the Paris meeting is likely to agree on which indicators to include in the assessments, their values, which would trigger a more in-depth analysis, would be decided in April at a G20 meeting in Washington.
INTERNATIONAL MONETARY SYSTEM
The G20 finance ministers will also discuss in Paris a reform of the international monetary system, including capital flows, international reserve assets and financial safety nets.
Investment flows can help poorer countries develop and grow, but they have been blamed for overheating economies and driving up inflation. They can also become a destabilizing force when investors suddenly withdraw money.
Over the past year fast-growing emerging markets such as Brazil have been the biggest recipients of these capital flows, and some nations have taken steps, such as raising taxes, to try to manage the influx.
"The EU believes in the benefits of the free movement of capital ... and sees with some concern the increasing use of temporary controls," the EU terms-of-reference document said.
"The EU sees temporary controls of capital inflows as a second best policy instrument to address volatile capital flows compared with macroeconomic macro-prudential and structural measures," the document said.
It added that the International Monetary Fund should identify what drove capital flows and what the appropriate domestic responses were as well as monitor global capital flows.
SDR ROLE
France, which took over the presidency of the G20 in November, is sounding out governments on ways to reform a monetary system dominated for decades by the U.S. dollar, with the aim of creating greater global stability.
French officials have said they hope to encourage greater use of the Chinese yuan as a reserve currency during their G20 presidency, including talks on a possible timetable for its inclusion in the basket of currencies which underpin the International Monetary Fund's Special Drawing Rights.
Other ideas include encouraging a greater role for the SDR itself as a reserve currency in an effort to move away from dollar hegemony.
The EU document indicated the 27-nation bloc was ready to consider the eventual inclusion of China's renminbi currency in the basket of currencies underpinning the SDR.
The EU was also ready to discuss SDR-denominated bonds, it said, inviting the IMF to explore ways to develop a private market for SDRs.
"The EU is also open to discuss the possible costs and benefits of SDR exchange rate pegs and SDR-denominated debt as a possible way to reduce balance sheet risks," it said.
(Editing by Greg Mahlich)
View the original article here

Gartner: Android ranks 2nd in global smartphones

A surge in sales turned Android into the second biggest smartphone platform in the world last year, according to a new report from Gartner.
Unit sales of smartphones running Google's mobile OS grew 888.8 percent year over year, from 6.8 million in 2009 to 67.2 million in 2010. In terms of market share, that translates into major shift--from 3.9 percent in 2009 to 22.7 percent in 2010.
Sales received a strong kick in the fourth quarter due to demand for a number of high-end smartphones, including HTC's Evo 4G and Incredible, Samsung's Galaxy S series, and Motorola's Droid X and Droid 2, Gartner said in today's report.
Though still in first place by a healthy margin, Nokia's Symbian saw its smartphone market share drop further, from 46.9 percent in 2009 to 37.6 percent in 2010. The fourth quarter was especially weak for Symbian, allowing Android to actually overtake it in sales during the period. Gartner noted one factor in Nokia's favor: Symbian is used by Fujitsu and Sharp and in legacy products from Sony Ericsson and Samsung.
Market share for Apple's iOS inched up from 14.4 percent in 2009 to 15.7 percent in 2010, but its unit sales soared from 24.8 million in '09 to 46.6 million last year. Those numbers helped Apple's mobile platform reach the No. 4 spot in the global smartphone rankings last year, just behind BlackBerry maker Research In Motion. Apple's iOS is in "excellent shape," according to Gartner.

Overall global smartphone unit sales climbed 72.1 percent last year, from 172.3 million in 2009 to 296.6 million in 2010. The industry as a whole still found its biggest audience in economically developed regions with faster networks and more disposable income.
"Western Europe and North America accounted for 52.3 percent of global smartphone sales in the fourth quarter of 2010, with smartphones accounting for close to half of all handsets sold in these regions," Roberta Cozza, principal research analyst at Gartner, said in a statement.
Looking at the entire mobile phone market--not just the smartphone segment--unit sales reached 1.6 billion last year, a 31.8 percent rise from 2009.
Among makers of all mobile handsets, Nokia was the top dog with a 28.9 percent chunk of the market, though that was down from 36.4 percent the prior year. Samsung and LG took second and third place, respectively, followed by RIM and Apple. But even taking into account the entire mobile phone landscape, smartphone sales were a deciding factor.
"Strong smartphone sales in the fourth quarter of 2010 pushed Apple and Research In Motion...up in our 2010 worldwide ranking of mobile device manufacturers to the No. 5 and No. 4 positions, respectively, displacing Sony Ericsson and Motorola," Milanesi said. "Nokia and LG saw their market share erode in 2010 as they came under increasing pressure to refine their smartphone strategies."

View the original article here