Financial Page International

23 January 2010 - Global Markets Review
Good Morning Ladies & Gentlemen,
 
Obama's Healthcare reforms on a sticky wicket; China's tightening of loans increasing pace and US Banks getting nervous at new banking measures - so much to talk about .....
 
But I wanted this week to mention something close to my heart - closer than cars even - and that is 'football'. 
 
Not soccer, but football; the game where people use their feet to kick the ball.  Unlike the US misnomer where they use their hands mostly and then call it football (go figure).
 
I wanted to talk about how US businessmen portrayed themselves as 'white knights' when they stepped into the football arena and now look like nothing more than starred and striped 'devils' as they cause potentially the demise of some of the biggest clubs in England.
 
Manchester United's parent company's debt increased to 716.6 million Pounds ($1.17 billion) in the last fiscal year as liabilities ballooned from the 2005 takeover of the 18-time English soccer league champion.
 
Red Football Joint Venture Ltd.'s borrowings increased from 699.2 million, according to a filing to Companies House for the 12 months to June 30, 2009.
 
While secured bank loans fell 1.8% to 509.5 million Pounds at the company, owned by the Glazer family of the U.S., so-called payment-in-kind debt increased 15% to 202.1 million Pounds. Net debt declined to 566.1 million Pounds from 649.4 million Pounds.
 
Red Football Joint Venture's interest payments were little changed at 68.5 million Pounds. Thanks to the world record 80 million-Pound sale of Cristiano Ronaldo to Real Madrid, the parent company posted net income of 6.42 million Pounds, after a loss of 42.7 million Pounds in the previous year.
 
Red Football's refinancing in 2006 included a payment-in- kind note with interest of 14.25%, which is repaid when the debt matures in 2017. The interest on the PIK note rises to 16.25% in August this year, according to the Companies House filing.
 
Manchester United increased the size of the Dollar portion of its issue of seven-year bonds after selling fewer notes in Pounds than planned.
 
The 18-times English football champions issued 250 million Pounds ($403 million) of 8.75% notes priced at a discount to face value to yield 9.125%, down from the 300 million Pounds of the securities initially proposed. The $425 million of 8.375% notes, increased from $325 million, were priced to yield 8.75%, data show.
 
Manchester United's management held investor presentations in Europe, Asia and the U.S. during the past two weeks, seeking to spur investor interest in the securities, which it's selling to refinance more than 500 million Pounds of bank debt. The club took on the debt after the US Glazer family bought it in a leveraged buyout in 2005. 
 
There have been conversations with traditional high- yield accounts in the UK and analysts struggled to find many who were willing to buy.  It just isn't the sort of business they feel comfortable getting involved with - for obvious reasons. 
 
The bonds in Pounds were priced to yield 569 basis points more than the 4% gilt due 2016 and the notes in Dollars were priced at a spread of 568 basis points over the 3.25% Treasury due December 2016. A basis point is 0.01% point. 
 
While the Manchester United bonds aren't rated, they would probably be graded in the B category, the second-lowest. Bonds in that category on average have a yield premium of 735 basis points more than similar maturity government debt, Bank of America Merrill Lynch index data show.
 
The securities were issued through MU Finance Plc and are guaranteed by Red Football Ltd., a holding company for the club, and some of its units. The club hired Bank of America-Merrill Lynch, Deutsche Bank AG, Goldman Sachs Group Inc., JPMorgan Chase & Co., KKR & Co. and Royal Bank of Scotland Group Plc for the deal.
 
Take-up from US investors was larger than initially forecast. The bond will allow the Glazers to pay off the majority of the £509 million of bank debt secured against Manchester United, and begin reducing the £202 million "payment-in-kind" loans borrowed against the family's holding in Old Trafford.
 
The seven-year bond will run to Feb 1 2017, and the Glazers will have to begin making the first interest payments to investors in August this year, coinciding with the first slice of domestic television revenue.
 
The prospectus used to market the bond last week revealed that the family will remove up to £127 million from the club in the coming year. Further club cash will pay down the so-called Payment in Kind loans that will attract an eye-watering 16.25% interest from 1 August 2010.
 
A spokesman for the family claimed the deal brought "transparency" to United's finances (ha-ha), although no comment was forthcoming on the revelation that the club will haemorrhage £565 million over the next seven years in dividends, interest and management fees .
 
The coupon rates on each tranche of the debt is 8.750% and 8.375% respectively, which will bring a yield of 9% to investors. Early trading saw the bond dip in value on the New York market, although there is little information to date about who bought the senior notes offering.
 
In the long-term the bond is very bad news for the football club because of the amount of money that will leave the club in dividends and interest. This is of course better news for the Glazers because it pushes back when they have to repay the debt to 2017.
 
It's not good news for the football club because when you look at the details, the Glazers will take interest and dividends out of the club. It means that the manager will have far less money to spend.
 
United's executive team, including Managing Director David Gill, held investor meetings in London, New York and Asia in the past week to drum up interest in the note issue, which has been oversubscribed.
 
It's been over-subscribed because the interest rate is way above the underlying interest rate in the market at the moment. But if the manager doesn't, in the long run, have sufficient resources to compete with Chelsea, Real Madrid and Barcelona inevitably they will decline.
 
Old Trafford (Manchester United's Stadium) could be sold to help pay down the debt but if they do that they'll only add to their operating expenses and will have still less money for the manager to spend on the playing squad.
 
All told, the whole Manchester United debt debacle - and to a chillingly similar Liverpool's Debt problem - has solely been caused by US Businessmen, coming into the sport with their limited amount of Dollars, buying the clubs and then leveraging against the assets of the club to have more money to spend in the US.
 
The club, once a model of good financial management, is now the Premier League's biggest debtor.
 
It needs the money to refinance some of its £700m debt pile, which has ballooned since the Glazers, US businessmen, bought the club in 2005 and promptly saddled it with the £790m price tag. Granted, the arrangement means the club could offset its huge and increasing interest payments against profits, cutting tax liabilities.
 
But the sheer scale of the club's debt is ringing loud alarm bells. Fans remember how rapidly old rivals Leeds United imploded when forced to sell players to service debt repayments. Manchester United as I say is even said to be considering selling off the Old Trafford stadium and leasing it back to raise cash.
 
Could Manchester United go bust?
 
No - at least not yet anyway. Manchester United enjoyed record sales of £257m in 2007/2008, with £101.5m coming from tickets at Old Trafford.
 
But attendances, especially lucrative corporate packages, have been falling. And although the club insists it has a rock-solid business model, it has been notably slow to shell out money on new players over the past year.
 
While manager Sir Alex Ferguson says that's because he can't see any value in the transfer market, sceptics point out that the club would have made a loss of £31.8m last year without the sale of Cristiano Ronaldo.
 
This year, without that boost, the prospect of Manchester United selling off players to service debts is moving closer.
 
If it does become a loss-making club, it will hardly be an exception: in the season ending in 2008 only three of the 20 Premier League clubs turned a profit.
 
Who else is in trouble?
 
Liverpool. Its debts are smaller than Manchester United's, at £237m, but there is more barely concealed wrangling within the club about how to deal with them.
 
More immediately, the most vulnerable club is bottom-of-the-table Portsmouth, which moved a step closer to administration this week when the High Court threw out its attempt to block a winding-up petition from major creditor Revenue & Customs.
 
There are plenty of other top-flight clubs looking wobbly as they struggle with debts totalling £3.1bn.
 
This week, publisher David Sullivan and retailer David Gold shored up ailing West Ham by taking 50% in a deal that valued it at £105m. Sullivan, who owned Birmingham City before selling it for £82m in October, bluntly conceded that the purchase made no commercial sense and that he fully expects a big club to go bust this season.
 
Why is football such a poor investment?
 
Quite simply, insane wage inflation. On the face of it, Premier League clubs should be raking it in - awash with TV rights cash and massive private investment by two or three of the world's richest men (Chelsea, Manchester City).
 
But take Bolton. Its most recent accounts show income of £37m from TV rights and £5m through the gate - but a staggering wage bill of £41m, some 80% of all football-related income.
 
Competition from European clubs, some of them backed by implicit or explicit state guarantees (Real Madrid, Barcelona) has driven up wages to the point where the likes of Manchester United's Ronaldo can sell for £80m.
 
Why do clubs pay these wages?
 
They get results.
 
In his book Soccernomics, written with the FT's Simon Kuper, the academic Stefan Szymanski studied 40 English clubs over 20 years and found that spending on salaries explained 92% of the variation in their average league position.
 
A similar study for Italy gave a correlation of 93%. (By contrast, they found that changing managers contributes very little.)
 
But the risk is that clubs will gamble everything to avoid relegation by overpaying poor footballers and wasting millions in the transfer market.
 
What's the future for English Football?
 
The Union of European Football Associations (UEFA) plans to bring in its "financial fair play" initiative, which will exclude heavily-indebted clubs from European competition.
 
UEFA boss Michel Platini has long been a critic of the Premier League, where rich individuals (such as Sheikh Mansour at Manchester City, which made a record loss of £92m last year) are free to bankroll clubs and, in effect, distort the market.
 
But if UEFA gets it way, and insists that all its competitions are played by debt-free clubs by 2012, it will almost certainly hasten the creation of a much-touted breakaway European Super League - permanently altering the English game.
 
All told, football and US businessmen trying to run it is as compatible as peanut butter and jelly - to  a Brit that is!
 
The likes of the Glazers, Hicks and Gillette and other US investors intent on making a 'fast-buck' out of 'the beautiful game' will not care a jot if they drive ancient British Football institutions into the ground all for their own gain.
 
Like it or not, when a Saudi or a Russian buys a club, at least they turn the debt into equity.
 
The 'Investors' from the US turn the hill of debt into a mountain of debt in the time it takes to say "howdy have a nice day".
 
Please, US Investors leave our 'beautiful game' alone because before long, your business greed is going to destroy everything that is good about football - and by 'football', yes, I mean soccer!
 
Also, as an Englishman I have to be honest and say that I wouldn't like to see some of the English ladies 'cheerleading' in a Bikini at half time - that in itself is reason enough to get the US influence out of English football!
 
And as a post-script, I could not help but mention that this week the English Football Club West Ham United has been bought.
 
By US Investors? Sheikhs or Icelandic Entrepeneurs?
 
Not a bit of it; in wanting to safeguard our Football heritage and image, West Ham United have this week been bought out by ..... wait for this ..... two English Porn Barons.
 
Better than two US 'Robber' Barons any day of the week!
 
Off my soapbox and on to the numbers for the week:
US Markets 
How the US did this week .....

 US SummaryUS stocks sank, capping the market's biggest three-day tumble since March, as financial shares slumped on President Barack Obama's plan to rein in banks and results at Google Inc. disappointed investors.
 
Bank of America led the S&P 500 Financials Index to a 3.3% drop as uncertainty over Ben S. Bernanke's confirmation for another term as head of the Federal Reserve also weighed on lenders. Google sank 5.7% after fourth- quarter sales growth missed the most optimistic of analysts' estimates. US Steel Corp. fell as Goldman Sachs Group Inc. said China's move to slow its economy will hurt metal producers.
 
The Standard & Poor's 500 Index lost 2.2% to 1,091.76 at 4:19 p.m. in New York, plunging the most since October and erasing its 2010 gain. The gauge slid 5.1% over the past three days as China curbed lending and Obama said banks should be banned from proprietary trading. The Dow Jones Industrial Average sank 216.9 points, or 2.1%, to 10,172.98.
 
The three-day rout in US equities was the biggest for the S&P 500 since the measure sank to a 12-year low in March amid the worst financial crisis since the Great Depression. The VIX, the benchmark index of stock options known as Wall Street's "fear gauge," jumped 55% to 27.31 in the past three days for its biggest gain since 2007.
 
Morgan Stanley lost 5.3% to $27.80, Bank of America fell 3.7% to $14.90 and Goldman Sachs declined 4.2% to $154.12. The S&P 500 Financials Index has slipped 6.1% over the past two days, its biggest decline since September.
 
Obama Thursday called for limiting the size and trading activities of financial institutions as a way to reduce risk- taking and prevent another financial crisis. The proposals, to be added to an overhaul of regulations being considered by Congress, would prohibit banks from running proprietary trading operations solely for their own profit and sponsoring hedge funds and private equity funds.
 
Financial shares extended declines as Democratic Senators Barbara Boxer and Russ Feingold said they won't support Ben S. Bernanke for a second term as the chairman of the Federal Reserve comes up for confirmation in the Senate. A second term would begin on Feb. 1.
 
American Express Co. and Capital One Financial Corp. fell 8.5% and 12% respectively as analysts at FBR Capital Markets reduced earnings estimates, citing shrinking margins and new US credit-card regulations.
 
Freeport-McMoRan Copper & Gold Inc., AK Steel Holding Corp. and US Steel Corp. retreated at least 2.7% after Goldman Sachs downgraded the industry to "neutral" from "attractive."
 
"Historically, investors have shunned these high beta sectors when concerns about Chinese demand have surfaced," Goldman Sachs analysts wrote in a note. "Although stocks have already corrected somewhat, there is a likelihood of more tightening measures that could further weigh on stocks."
 
The biggest risk for equities in 2010 is that policy makers withdraw stimulus measures through regulation, or raise rates before the stimulus has had a chance to help the Labour market, Michael Hartnett, Bank of America's chief global equity strategist, wrote in a report dated Thursday.
 
Google dropped 5.7%, the most since March, to $550.01. The owner of the world's most popular Internet search engine said sales excluding revenue passed on to partner Web sites increased 13% to $4.95 billion from the third quarter. Some analysts had predicted growth of as much as 17%, said Sameet Sinha of JMP Securities LLC in San Francisco.
 
Advanced Micro Devices Inc. had the biggest drop in the S&P 500, declining 12% to $7.88. The second-largest maker of personal-computer processors fell the most since July on concern the company will struggle to maintain sales gains. Some investors are concerned that PC demand may have topped out, making the stock too expensive, said Doug Freedman, a Broadpoint AmTech Inc. analyst in San Francisco.
 
Intel Corp., the biggest chipmaker, lost 4.5% to $19.91.
 
Schlumberger Ltd. dropped 4.5% to $65.24 as the world's largest oilfield-services provider said fourth-quarter profit fell 31% after oil producers slashed spending during the global recession.
 
General Electric Co. added as much as 4.6% before paring gains as the market sank. The stock closed up 0.6% at $16.11. The biggest maker of power-plant turbines posted fourth-quarter profit from continuing operations of 28 cents a share.
 
McDonald's Corp. rose 0.3% to $63.39. The world's largest restaurant company reported fourth-quarter earnings that topped analysts' estimates as global sales at established stores increased 2.3%.
 
Intuitive Surgical Inc. jumped 12% to $340.35, the highest price since April 2008. The maker of robotic systems for surgery reported fourth-quarter earnings of $1.95 per share. That beat the average estimate of analysts' by 15%.
 
The S&P 500 is down 4.8% since Alcoa Inc. started the fourth-quarter earnings season on Jan. 11 with lower-than- estimated profit. Analyst forecast total earnings for companies in the index grew 73% in the period, following a record nine quarter slump.

European Markets 
What has been happening in Europe this week .....
 Europe SummaryThe banking sector suffered big losses this week amid renewed Greek sovereign debt worries and fears that European banks would suffer the effects of the Obama administration's plans to curb excessive risk taking.
 
Greek banks were particularly unsettled as the country's bond yields rose, reaching their widest level against German Bunds since Greece joined the Euro.
 
The FTSE Eurofirst 300 closed 2.6% lower on the week at 1,025.39, its lowest level since the start of the year. The index has fallen 3.3% this year.
 
The automotive sector performed badly. Italy's Fiat dropped 7.3% to €9.89, German carmaker Daimler lost 6.3% to €34.18 and Renault fell 7.5% to €35.70.
 
European pharmaceutical stocks strengthened after a victory for the Republicans in a Senate seat election cast doubt on whether the US democratic party's healthcare reforms would be passed. But many slid later in the week.
 
The Dow Jones Stoxx 600 Index fell 1.1% to 249.91, the lowest close since 21 December. The measure has retreated 2.6% this week, the biggest drop since October. Record-low interest rates in the US and Europe and about $12 trillion committed by governments worldwide to thaw credit markets and revive economic growth have pushed the gauge 58% higher since March.
 
GERMANY
 
German stocks dropped, with the benchmark DAX Index extending a second straight weekly loss, after US President Barack Obama proposed limits to banks' size and trading.
 
Deutsche Bank AG and Deutsche Boerse AG declined more than 3%. Deutsche Lufthansa AG slumped 6.1% as the company said some analyst estimates for 2010 are "high." Daimler AG fell 1.7% after Goldman Sachs Group Inc. downgraded the world's second-biggest maker of luxury cars.
 
The DAX retreated 0.9% to 5,695.32, marking a third day of declines in the longest losing streak since Dec. 9. The gauge's rally since March 2009 has slowed this year amid concern the withdrawal of stimulus measures from the US to China will hamper the global economic recovery. The broader HDAX Index fell 1% Friday.
 
Deutsche Bank, Germany's biggest lender, dropped 4.2% to 45.03 Euros, the lowest close since July. Deutsche Boerse, operator of the Frankfurt exchange, tumbled 3.2% to 50.90 Euros, extending its third week of declines. About 20% of the volume at Deutsche Boerse's Eurex unit comes from proprietary trading, with half of that initiated by banks, according to analysts at BofA Merrill Lynch Global Research.
 
Germany will draw up its own proposals to overhaul financial-sector regulation, Finance Ministry spokesman Michael Offer said Friday. The plan will conform to Group of 20 directives to ensure financial institutions take on part of the costs of the crisis and will be complete by the G-20 summit in Canada in June, he said.
 
Lufthansa, Europe's second-biggest carrier, sank 6.1% to 11.70 Euros, its biggest drop since March. Chief Financial Officer Stephan Gemkow told analysts at a meeting Thursday that "given the enduring uncertainties in the industry concerning demand and the oil price, the estimates of some analysts" for 2010 are "high," spokeswoman Claudia Lange said. She added that Gemkow did not give guidance for the year.
 
Equinet AG cut its recommendation for Lufthansa to "reduce" from "hold," while the shares were lowered to "sell" from "buy" at Bankhaus Metzler.
 
Daimler lost 1.7% to 34.18 Euros as the stock was cut to "neutral" from "buy" at Goldman Sachs. Bayerische Motoren Werke AG and Volkswagen AG slipped 1.5% to 30.70 Euros and 2% to 56.91 Euros, respectively.
 
Celesio, Europe's biggest publicly traded drug wholesaler, rallied 1.9% to 21.94 Euros. The stock posted a twelfth day of gains in the longest winning streak on record. The shares were raised to "buy" from "hold" at Unicredit, with analysts saying "after a year as a wallflower in our German healthcare universe, the environment for Celesio has stabilized."
 
ElringKlinger slid 2.9% to 16.99 Euros after the German automotive supplier was downgraded to "sell" from "neutral" at Goldman Sachs.
 
Heidelberger Druckmaschinen slumped 6.5% to 5.38 Euros as shares of the German printing-press maker that's supported by government aid were rated "sell" in new coverage at Standard & Poor's.
 
Leoni, Germany's biggest maker of automotive electrical cables, retreated 3.8% to 15.88 Euros as Goldman Sachs lowered its recommendation on the stock to "neutral" from "buy."
 
Solarworld retreated 5.1% to 12.88 Euros as UniCredit downgraded the shares to "sell" from "hold," saying "the 15% subsidy cut in April will intensify competition and price pressure" in the second quarter of 2010. Separately, DZ Bank AG cut its recommendation to "sell" from "hold." Q-Cells SE (QCE GY) and Solon SE (SOO1 GY) slid 4.4% to 10.01 Euros and 1.5% to 6.80 Euros, respectively.
 
Stada Arzneimittel declined 2.9% to 24.93 Euros after the drugmaker's shares were rated "sell" in new coverage at Standard & Poor's.
 
TUI plunged 5.6% to 6.64 Euros. The company said it will ask shareholders to oppose a motion by Norwegian billionaire John Fredriksen to appoint a special auditor to examine the measures taken to finance Hapag-Lloyd AG.
 
FRANCE
 
France's CAC 40 Index fell for a third day, losing 41.38, or 1.1%, to 3,820.78 in Paris. The gauge declined 3.4% this week. The SBF 120 Index also slid 1.1% Friday.
 
Air France-KLM Group dropped 38 cents, or 3.1%, to 12.02 Euros. Airlines fell in Europe, led by Deutsche Lufthansa AG after Europe's second-biggest carrier said it considers some analysts' estimates for 2010 as "high" because they don't take into account how fares or fuel costs will develop.
 
BioMerieux (sank 5.06 Euros, or 5.9%, to 80.07 Euros, the steepest decline since October 2008. The maker of tests for HIV and hepatitis was downgraded to "underperform" from "outperform" at Cheuvreux and to "reduce" from "add" at Gilbert Dupont.
 
BNP Paribas, France's largest bank, dropped 1.01 Euros, or 1.9%, to 52.56 Euros. Banks stocks were the worst performers in Europe Friday after US President Barack Obama announced plans to curb risk-taking by banks.
 
Credit Agricole lost 30.5 cents, or 2.5%, to 11.86 Euros. Societe Generale SA (GLE IM) retreated 2.33 Euros, or 5.2%, to 42.44 Euros.
 
Electricite de France fell for a second day, losing 57 cents, or 1.4%, to 41.01 Euros. Europe's biggest power producer is hesitating over the proposed sale of its UK network, French daily Les Echos reported, citing an unidentified person.
 
CM-CIC Securities said in a note that "it is likely that the end decision on the UK network will be taken over the next few weeks, but the market is likely to be disappointed given the related requirement regarding debt reduction."
 
European Aeronautic, Defence & Space fell 21.5 cents, or 1.5%, to 14.19 Euros, extending losses of 2.8% Thursday. The owner of Airbus SAS and governments that ordered the A400M military plane ended talks without an agreement on the financing of the plane, EADS spokesman Alexander Reinhardt said. The two sides will seek a new round of talks next week and aim to reach a conclusion by the end of the month, he said by telephone.
 
Kepler Capital Markets cut its recommendation to "reduce" from "buy."
 
Faurecia advanced 28.5 cents, or 1.9%, to 15.62 Euros, ending a two-day loss. Goldman Sachs Group Inc. lifted its recommendation on shares of Europe's largest maker of automotive interiors to "buy" from "neutral."
 
Pierre & Vacances increased 1.77 Euros, or 3.4%, to 53.82 Euros, the highest in more than a week. The holiday-apartment company said that sales increased 11% in its first quarter to 329.3 million Euros.
 
Somfy rose to the highest in about two months, adding 6.48 Euros, or 5%, to 136.5 Euros. Gilbert Dupont upgraded the maker of motors for awnings and blinds to "add" from "reduce."
 
STMicroelectronics dropped 14.8 cents, or 2.4%, to 6.03 Euros. ST-Ericsson, the semiconductor joint venture between Ericsson AB and STMicroelectronics, said its fourth-quarter loss widened from the previous period because of higher restructuring charges.

 
Technip, Europe's second-largest oilfield- services provider, dropped for a fourth day, falling 1.25 Euros, or 2.5%, to 48.88 Euros as crude oil fell to a one-month low in New York.
 
Vallourec, the world's second-largest maker of steel tubes for oil and gas production, lost 2.15 Euros, or 1.7%, to 124.95 Euros, a third straight loss.
 
BELGIUM
 
Brussel's Bel 20 Bourse closed the week at 2,475.81, down 0.34% for the day.
 
Belgian health products distributor Omega Pharma reported a higher-than-expected 4% rise in fourth-quarter sales, helped by Belgian and emerging market expansion, and forecast similar growth in 2010.
 
The company, which sells non-prescription products to pharmacists, said rose to 213.6 million Euros ($303.4 million), compared with the average 210.6 million average forecast in a Reuters poll of five analysts.
 
Chief Executive Marc Coucke described 2009 as a year with two faces. After a weak first half, when turnover fell by 3% and core profit by 10%, the company registered 4% growth in both the third and fourth quarters.
 
Omega said it was convinced it could maintain that rate of growth in 2010.
 
Belgian dry goods shipper CMB on Thursday reported a better than expected final quarter profit bouncing back from a loss a year earlier and said prospects for 2010 were favourable.
 
Net profit for the October-December period was 42.3 million Euros ($60.08 million) compared with a loss of 11.2 million Euros a year earlier. The average of a Reuters poll of three analysts was 33 million Euros.
 
The company benefitted from a 23 million Euro capital gain of 23 million from the sale of three vessels. CMB said the prospects for 2010 remained favourable, with almost the entire fleet of its main unit Bocimar covered at "rewarding levels" for 2010.
 
Belgian chemical company Taminco plans to issue shares priced between 11 and 14 Euros and raise up to 421.5 million Euros ($598 million) in the country's biggest flotation since 2007.
 
The company, which makes chemical building blocks for crop protection, animal feeds, water treatment and drugs, launched the offer period on Thursday, saying it was expected to close on Feb. 4.
 
Wednesday, the National Bank of Belgium said in a report that the consumer confidence indicator stood at minus 15 in January, same as in the previous month. A year ago, the index was minus 20.
 
The measure for households' saving capacity over the next twelve months increased to 7 in January from 4 in the previous month. Meanwhile, the financial situation indicator remained unchanged at 1.
 
Further, the gauge for economic situation in Belgium over the next twelve months stood at minus 2 in December, down from zero reading in December. At the same time, the measure for unemployment remained stable at 65%.
 
THE NETHERLANDS
 
The AEX in Amsterdam finished the trading session Friday on 329.48, a dip of 0.81% for the session.
 
Dutch pension fund ABP Thursday recorded a 15% rise on the value of its investments in the second half of 2009, adding that it had to adjust its cover ratio as its financial obligations will be affected by increasing life expectancy in the Netherlands.
 
ABP, one of the world's largest pension funds with 2.5 million active and retired civil servants and teachers, said it booked a 15% return on its investments, or Eur27 billion. The gains were mainly from investments in stocks, real estate and corporate bonds, which have recovered well in the past six months.
 
ABP said its cover ratio rose to 104% by the end of 2009 from 98% at the end of the first half of 2009. The cover ratio refers to the funds held by ABP in relation to the financial obligations it has.
 
The pension fund said the ratio was originally 109%, but that it had to cut it by five percentage points due to higher financial obligations as a result of improved life expectancy in the Netherlands.
 
ABP's total capital stood at Eur208 billion in 2009, a sharp rise on the previous year, when the pension fund was badly hit by the slump in stock markets in the wake of the financial crisis.
 
Dutch telecom regulator OPTA Wednesday fined Royal KPN NV, the country's largest telecommunications company, a total Eur780,000 over competition concerns in its dealings with corporate clients, the company's second fine in just over a week.
 
OPTA said KPN breached competition rules through its dealings with corporate clients from the start of 2007 to April 2009, by making sure it would always be invited to participate in tender offers and forcing customers to choose KPN if it matched a competitor's offer. KPN would also be informed when a competitor undercut it, allowing the company to make an equal offer and therefore win the tender, the regulator said.
 
Last week, KPN was fined Eur500,000 for giving some of its corporate clients discounts for international phone calls. Although there are similarities between both cases there is not a direct connection between them, an OPTA spokeswoman said.
 
The regulator is also investigating other cases against KPN that will be completed in a few months.
 
KPN, which has a 50% market share of the Dutch corporate segment of fixed lines, said it will appeal both fines.
 
Dutch consumer spending dropped 2.7% year-on-year in November after falling a revised 2.5% in October, the Central Bureau of Statistics said Thursday.
 
Spending on services was 1.3% lower than in November last year and fell 4.3% on goods. The statistical office said the decline was slightly smaller in services and larger in goods than October.
 
Consumer confidence in the Netherlands improved to minus 10 in January from minus 11 in December, official data showed Thursday.
 
Households' view on economic situation in the past 12 months worsened slightly, but their assessment on future economic situation remained unchanged.
 
In January, consumers were less pessimistic about their financial situation in the past 12 months. But, the outlook for next 12 months showed notable increase, with the corresponding indicator climbing to 6 in January from minus 2.
 
But, continuing uncertainty regarding economic recovery held consumers back from making major purchases.
 
AUSTRIA
 
Vienna saw its ATX end the week at 2,581.01, off 0.97%.
 
Austria's economy is expected to expand by a moderate 1.8% a year on average in the next five years, hampered in particular by weaker exports to Eastern Europe in the wake of the global crisis, said the Austrian Institute of Economic Research, or WIFO, Thursday.
 
The anticipated 2010-2014 average growth rate is 0.75 percentage point below the average of the decade preceding the economic crisis, WIFO said.
 
"The growth margin above the Euro zone average will narrow considerably, because Austrian exports to Central and Eastern Europe should remain weak and the financial sector fragile," WIFO said, noting that the high credit exposure of Austrian banks to the Central and Eastern European region, which has been particularly hard hit by the crisis, poses a significant risk to Austria's medium term growth perspectives.
 
Midterm growth will, however, be supported by various international and national fiscal stimulus measures, including tax cuts, Labour market reforms and a number of large infrastructure projects, WIFO said.
 
At an estimated average of 1.5%, Austrian inflation is expected to remain below the European Central Bank's medium term price stability target of close to but just below 2% throughout the forecast period, WIFO said.
 
Italy's energy giant Eni said Thursday it has reached a deal to acquire Exxon Mobil Corp.'s Austrian oil downstream activities.
 
Eni said the deal includes a retail network with 135 service stations, the Industrial & Wholesale (I&W) business and the aviation business at the Vienna and Linz airports, including the 28.6% share in the proprietary joint venture for logistical assets at the Vienna airport.
 
Eni said the acquisition also includes the Supply & Distribution business with its 33.3% participation in the Salzburg terminal joint venture. "The lubricants and specialties business is excluded from the transaction," it added.
 
"With this acquisition, Eni will strengthen its existing downstream business in the country, operated through the local Eni affiliate Agip Austria, expanding the marketing capabilities and achieving supply synergies," it said.
 
Tuesday, the Statistics Austria announced that the producer price index or PPI dropped 2.1% year-on-year in November, compared to the 3.3% fall in the previous month. A year ago, the PPI was up 2.9%.
 
On a monthly basis, the PPI rose 0.2% in November, after falling 0.9% in October.
 
SWITZERLAND
 
The SMI in Zurich completed a volatile week at 6,493.96, down 1.29%.
 
The Swiss financial regulator said Thursday it will ask Switzerland's highest court to review the regulator's order last February for UBS AG (UBS) to hand over account data on several hundred bank clients, after a lower court ruled the move was "unlawful" earlier this month.
 
In a statement, Finma said part of the reason to appeal the ruling from earlier this month was to have Switzerland's supreme court rule on how much legal latitude Finma is to have in a crisis situation. A spokesman for UBS declined comment.
 
The decision stems from a Finma order nearly one year ago for UBS to immediately hand over details on nearly 300 accounts to US authorities. The handover was a key element of a settlement between UBS and the US authorities which, according to Switzerland, had threatened to indict the Swiss bank. UBS had been accused of setting up sham entities allegedly manufactured for the purposes of tax evasion.
 
Finma argued that it mandated the near-unprecedented data transfer to avert the risk that UBS might not survive a US indictment, and because UBS admitted to aiding tax fraud through hidden offshore accounts.
 
Thursday, Finma reiterated its view that the emergency data handover was justified because of potential fallout for the Swiss economy, which relies heavily on banking heavyweights UBS and Credit Suisse Group (CS).
 
After consulting with the Swiss government, Finma "considered this the only way to avoid the real threat of the US authorities starting proceedings against the bank, which would have threatened its existence and seriously worsened its liquidity situation, in turn impacting all the bank's clients and the whole Swiss economy," Finma said.
 
Swiss Re said Thursday it would release at least SFr300m ($292m) of capital by transferring a block of US life reinsurance business to Berkshire Hathaway, the US financial group controlled by the billionaire investor Warren Buffett.
 
The Swiss reinsurer, in which Mr Buffett has a stake, did not reveal any specific use for the capital released but said it believed it could invest the money more profitably elsewhere.
 
George Quinn, chief financial officer, said in a conference call that the transaction was not expected to have significant impact on profitability. Analysts broadly welcomed the release of capital and potential balance sheet strengthening.
 
The Swiss group last year lost its place as the world's biggest reinsurer and is still recovering from a testing period during which it reported heavy losses because of writedowns on investments and the severe impact of two disastrous structured credit default swaps for an unnamed client.
 
Switzerland's M3 money supply grew at a pace of 6.5% annually in December compared to prior month's revised growth of 7.9%, the Swiss National Bank reported Thursday. In December 2008, the growth rate was just 2.2%.
 
The report showed that M2 climbed 21.4% year-on-year, smaller than the 31% increase seen in November. According to SNB, currency in circulation rose 4.4%, down from 6.4% in the last month.
 
The economic sentiment indicator for Switzerland rose 2.2 points to 56.2 in January, a monthly survey conducted by Centre for European Economic Research or ZEW in cooperation with Credit Suisse showed Thursday. The assessment of the current economic situation surged 15.8 points to minus 27.1.
 
Around 75% of financial market experts surveyed still forecast no change in short-term interest rates in the coming six months. Nearly 49% of the respondents expect the Swiss inflation rate to rise over the coming six months.
 
The survey found that confidence among the financial market specialists regarding the Swiss stock market brightened up again, with 70.8% presuming that the Swiss Market Index will gain terrain in the next six months.
 
SWEDEN
 
The OMX in Stockholm rounded off the week at 951.06, a slight drop of 0.31% for the session.
 
Sweden extended its capital-injection program for banks Thursday in a bid to safeguard lending to companies and households in case the nascent economic recovery falters.
 
The 50 billion Swedish kronor ($6.98 billion) program was extended by six months to Aug. 17, 2010, Sweden's center-right government said. The program--introduced as a lifeline for Swedish banks to prevent them running into liquidity problems--had already been extended for six months last August.
 
"The conditions on the financial markets have improved significantly since last year, much thanks to the measures taken to safeguard financial stability," Swedish Financial Markets Minister Mats Odell said in a statement.
 
"By keeping the support measures in place for an extended time, we can make sure that Swedish companies and households can obtain credit at reasonable terms if the situation should deteriorate again," he added.
 
With normalizing financial markets and well-capitalized Swedish banks, the government said the time has come for the European Union to coordinate the withdrawal of extraordinary support measures introduced to prop up financial markets. It said the need for withdrawal should be carefully weighed against the need to maintain it for some time to foster financial market stability in case there is unexpected turn of events.
 
Only Nordea Bank, which is part-owned by the Swedish state, tapped the capital-injection program through its Eur2.5 billion rights issue last year.
 
Swedish industrial holding company Investor AB said Friday that it turned to a net profit of SEK31.4bn in 2009 from a net loss of SEK36.7bn a year earlier.
 
The board of directors proposed a dividend payment of SEK4 apiece for 2009, same as for the preceding year.
 
On 31 December 2009, Investor's net asset value stood at SEK187 per share compared to SEK150 at the end of 2008.
 
The total return of the Investor share was 18% in 2009, above the group's long-term goal, but turned out below the general market performance.
 
The company invested more that SEK7bn in line with its strategy to control companies with strong market positions, Investor's CEO Borje Ekholm said. Investor is well positioned for further growth in 2010, he added.
 
Net sales in 2009 declined to SEK381m from SEK407m. Investor moved to an operating profit of SEK32.3bn from a loss of SEK36.5bn. Pretax profit was SEK31.7bn compared to a loss of SEK36.8bn.
 
Diluted EPS stood at SEK41.1 versus a loss per share of SEK48.
 
In the fourth quarter of 2009, Investor posted a net profit of SEK5bn versus a net loss of SEK15.5bn.
 
Sweden's jobless rate stood at 5.6% in December, up from 5.3% in November, a report from the Public Employment Service said on Monday. Economists' expected the jobless rate to be 5.8%. The jobless rate is measured by the number of unemployed registered with the Employment Service.
 
The number of unemployed registered in the employment service totaled 261,000 in December, showing an increase of 1.6 percentage points or 73,000 persons over a year ago.
 
Lena Liljebäck, Employment Service's deputy director general said, "We will soon leave the hill in the Labour behind us. But still have high unemployment. There are vacancies, starting with an internship, a new start or the Employment Service's new program Lifting is a great way to enter the Labour market."
 
FINLAND
 
Helsinki's OMX arrived at the weekend on 6,534.06, shedding 1.01%.
 
Merrill Lynch, the Bank of America's investment banking arm, said Thursday it saw the Finland's gross domestic product (GDP) growing by 2.3% this year and by 3.2% in 2011.
 
Merrill Lynch's forecast is one of the most optimistic to date, with the Finnish finance ministry expecting 0.7-per cent growth this year and 2.4% next year.
 
Shares in Finnish power plant supplier Wartsila surged Tuesday after it said 2009 profitability improved as sales grew 14%.
 
The company said it expects 2010 profitability before non-recurring items will be at the upper end of its long-range target, despite an expected 10%-20% drop in sales on the year as a difficult marine market and lower order intake impacts.
 
The manufacturer of engines and power generators for the marine and energy sectors also said that fundamental changes in the market were forcing it to reduce manufacturing capacity, move most of its propeller and auxillary engine production to China, and cut 1,400 jobs through 2010.
 
The move will see 570 jobs go in the Netherlands, when the company closes two plants there, while one factory will also close in Finland. The remaining job losses will be seen across various divisions, functions and countries and will be clarified during the first half of 2010.
 
Non-recurring costs of the restructuring will be around Eur140 million but should yield annual savings of between Eur80 million and Eur90 million from the first half of 2011, the company said.
 
"The world has dramatically changed in a short period of time. China has become a strong maritime centre and its growth will continue," President and chief executive Ole Johansson said in a statement.
 
"The low activity in the global marine market continued throughout 2009. Wartsila Ship Power order intake was significantly lower than during previous years. Competition in the market will intensify."
 
Monday, the Statistics Finland announced that the producer price index or PPI for manufactured products dropped 2.6% year-on-year in December, compared to the 5.6% fall in the previous month.
 
On a monthly basis, producer prices rose 0.4% in December, faster than the 0.6% in November.
 
Export price index declined 4% on an annual basis in December, slower than the 7.1% drop in November, while import price index fell 1.9%. Month-on-month, export prices were up 0.6% and import prices increased 0.3%.
 
Meanwhile, the wholesale price index or WPI decreased 2.8% year-on-year in December, slower than the 6% decline in the previous month. The WPI increased 0.5% compared to the preceding month
 
Separately, the statistical office said, producer price index for services increased 0.1% on an annual basis in the fourth quarter.
 
NORWAY
 
The OBX in Oslo drew the week to a close on 325.32, losing 1.6% for the Friday session.
 
Despite a 10-month stock market bull run, Norwegian initial public offering (IPO) activity is seen as low in early 2010, but the Oslo bourse says several firms could weigh in later this year after a two-year drought.
 
Only a few minor Norwegian IPOs have been made since mid-2008, when the financial crisis put paid to a capital raising boom centred on the energy and oil services sectors.
 
Oslo's oil-heavy main index plunged 55% in 2008, but has been a top performer after growth returned to key economies last year and raw material prices regained momentum.
 
The main index has more than doubled from a March 2009 low and is back at the level it was before Lehman Brothers collapsed.
 
Oslo stock exchange listed six companies in 2008 after 30 new offerings in 2007 and 32 in 2006, including the $9.7 billion IPO of solar firm Renewable Energy, making Oslo the hottest Nordic market for IPOs in the pre-crisis years.
 
No major company introductions were made last year and only three firms were listed on Oslo Axess, a regulated securities marketplace that is not a stock exchange market in European Union terminology due to less stringent listing requirements.
 
"As of Friday we are in talks with between five and ten companies," Oslo bourse spokesman Tor Arne Olsen said.
 
Two firms, North Energy ASA and Idex ASA, have applied this year for listing on Oslo Axess -- which welcomes younger, smaller and less widely held companies. Axess listed ten firms in 2008, having introduced 24 following its inception in 2007.
 
North Energy ASA is an oil exploration company with 10 exploration licenses in the Norwegian Sea and Barents Sea, which plans to raise $70 million to finance a drilling programme. Idex ASA is a fingerprint recognition technology firm.
 
"We were confident in getting more applications before Christmas, but some postponed it into the new year," Olsen said, adding he expected to see more applications this month.
 
For years, mutually-owned insurer Gjensidige has aired the possibility of a bourse listing, which some analysts see as a stepping stone towards a potential tie-up with fellow Norwegian insurer Storebrand, in which it has a 25% stake.
 
Oil well service company Seawell, majority owned by drilling rig firm Seadrill, said last year it is mulling a separate listing, and gold producer Avocet Mining said it would apply for a secondary listing in Oslo.
 
Private investment firm Awilhelmsen recently agreed to buy two drilling rigs from Transocean, having preserved its capital after namesake rig company Awilco Offshore was sold to China Oilfield Services and delisted in 2008.
 
The Norwegian ministry of petroleum and energy said Tuesday it has awarded 38 new oil and gas production licenses in the North Sea, Norwegian Sea and Barents Sea to 42 companies.
 
Most of the licenses are in mature areas where oil and gas has already been explored for or produced, the ministry said in a statement. "The main challenge in mature areas is that the expected sizes of discoveries are declining," it said.
 
"Small discoveries can often not justify a standalone development, but can be profitable with a tie-in. It is therefore important to discover and develop resources in these areas before existing infrastructure in connection to other fields is shut down," it said.
 
Operators of the new license blocks include Royal Dutch Shell, Centrica, ConocoPhillips, Dana Petroleum, E.ON, GDF Suez, Marathon, Nexen, OMV, Repsol and Statoil.
 
DENMARK
 
Copenhagen's OMX entered the weekend on 346.87, off 0.8%.
 
Danish enzyme producer Novozymes Thursday posted a stronger-than-expected rise in fourth-quarter net profit and said it expects sales and earnings to grow in 2010, although its outlook for the year failed to meet market expectations.
 
Novozymes posted net profit of 301 million Danish kroner ($57 million) for the three months to Dec. 31, up from DKK241 million a year earlier and ahead of analysts' expectations for DKK269 million.
 
"Looking at 2010, we expect a positive development but with continued low visibility," Chief Executive Steen Riisgaard said in a statement. "Even with the current market conditions, we see very favorable long-term trends for Novozymes and remain confident of our ability to deliver on our long-term targets."
 
The Copenhagen-based company, which has a long-term target for 10% yearly sales growth, said it expects sales growth in Danish kroner of 1% to 5% in 2010. It forecast net profit growth of 9% to 13%, and operating profit growth of 3% to 7% in Danish kroner.
 
Riisgaard told Dow Jones Newswires Novozymes should be able to reach the 10% sales growth target "as soon as the dust settles after the economic crisis."
 
Business areas including biofuel and detergent enzymes will show healthy growth in 2010, and remain key growth drivers in the long run, he added.
 
Sales rose 7% to DKK2.17 billion, beating expectations for DKK2.05 billion. Earnings before interest and tax came in at DKK431 million, up from DKK370 million the year before and beating expectations for DKK398 million.
 
Danish food and trading group East Asiatic Company said on Thursday it had lowered its earnings estimate for 2009 due to changed accounting principles following Venezuela's recent currency devaluation.
 
On Jan. 8 Venezuela sharply devalued the bolivar, which has been fixed to the Dollar since 2005. EAC's biggest business unit, EAC Foods in Venezuela, is a main player in processed meat in that South American country.
 
"Since Venezuela technically is in hyperinflation as of December 2009, the accounts for EAC Foods for the entire year 2009 will have to be restated using IAS 29," the firm said in a statement.
 
IAS 29 is an international financial reporting standard for reporting in the currency of a hyperinflationary economy to make the financial information meaningful.
 
"This affects the outlook for 2009 ... but does not affect the underlying operation or the cash flow of the business," EAC said.
 
EAC said it now saw operating profits, calculated under the hyperinflationary accounting rules, at around 500 million crowns ($95.44 million) instead of a previous forecast, under historic accounting principles, for a profit of around 650 million crowns.
 
SPAIN
 
Madrid's IBEX closed out the Friday trading session and the week on 11,373.40, erasing 0.62%.
 
Spain's government is likely to face problems funding its ballooning fiscal deficit once the European Central Bank shuts off its abundant liquidity flow and massive domestic unemployment thwarts efforts to cut spending.
 
While no one thinks Spain will become the next Greece - seen by some investors facing potential default - risk premiums will push higher unless the government makes a more convincing case that is prepared to slash budgets at a time when the economy is still in the casualty ward.
 
The world's central banks launched a range of policies to combat the global financial crisis, such as providing unlimited liquidity to banks and even buying bonds outright like in Britain, boosting sovereign debt markets across the world.
 
Spain jumped on the opportunity to finance one of the world's largest stimulus plans in relative terms, with sovereign debt traders boasting large, liquid portfolios and Spanish banks -- the biggest buyers of bonos -- eager customers.
 
At the moment, Spanish 10-year bonds trade at a spread of about 89 basis points over benchmark German bunds, in line with Italy at 86 but far below the 291 basis points demanded of Euro zone pariah Greece.
 
However, in three years a fiscal surplus had been turned in to a deficit expected to top 10% of gross domestic product in 2009 and 2010.
 
With unemployment the highest in the Euro zone at almost 20%, the Spanish government isn't expected to make the deeply unpopular spending cuts needed to bring the deficit under control.
 
Once the ECB reins in its crisis measures this year and liquidity becomes scarce, markets will grow more discerning and Spain's fundamental economic woes will be more of an issue on trading floors.
 
Spanish media group Promotora de Informaciones SA said Thursday it has signed a joint-venture agreement with unlisted peer Zeta to sell advertising space at their publications.
 
The venture seeks to lure greater advertising for Prisa's El Pais, the country's main daily, and Zeta's El Periodico de Cataluna. The venture also targets greater ad sales at their respective sport publications As and Sport.
 
The agreement comes as Spanish media companies struggle with lower circulation and a sharp drop in advertising spending.
 
Spain's trade deficit stood at Eur 4.86 billion in November, widening from Eur 3.91 billion deficit in the previous month, the Ministry of Industry,Tourism and Trade said on Wednesday. A year ago, the trade deficit was Eur 5.95 billion.
 
Exports dropped 1.5% year-on-year to Eur 14.07 billion in November, while imports fell 6.5% to Eur 18.92 billion.
 
For the January to November period, exports dropped 17.4% compared to the same period of the previous year, while imports fell 27.3%. During the period, the trade deficit amounted to Eur 46.11 billion.
 
PORTUGAL
 
The PSI General in sunny Lisbon ended the day Friday on 2,796.42, a dip of 1.48%.
 
Portuguese stock market regulator CMVM said on Thursday it will open an inquiry into a possible unregistered stake held by state-owned bank CGD in cement-maker Cimpor, the target of a takeover bid.
 
CGD has registered a 9.6% stake in Cimpor. The regulator will look into whether the bank holds a larger stake.
 
"CMVM decided to open an inquiry on the existence of a possible unreported stake (in Cimpor) and its implications in the current context of the takeover offer. CGD has already been notified," the regulator said in a statement.
 
It said the inquiry follows declarations by CGD chief Fernando Faria de Oliveira on Wednesday suggesting that Portuguese shareholders should unite to keep control of the country's top cement maker in Portugal.
 
After the International Monetary Fund recently expressed concern regarding Portugal's public finances, economists at Commerzbank said it would be wise to stay away from Portuguese government bonds for the time being.
 
Portugal's public finances have taken a hit as a result of the economic crisis. A recent report from the IMF warned that Portugal's debt ratio could rise to 100% in the medium-term, unless further consolidation measures are undertaken. The lender considers 2 percentage points of the 2009 deficit ratio of 8% to be cyclically induced, which means they should disappear in the long run. Hence, if the deficit is to fall within the EU limit of 3% by 2013, the need for consolidation amounts to 1% of gross domestic product per year.
 
Commerzbank economists were of the opinion that further consolidation measures would need to be introduced by the Portuguese government to attain this goal. Portugal is urgently in need of radical reforms, with the economy plagued by high Labour costs, poor productivity, and deteriorating competitiveness and unless further reforms are pushed through, the economy could fall further behind placing even more of a strain on public finances.
 
Eventhough a situation similar to Greece is improbable in the near-term, the economists expect the Iberian nation to be under close scrutiny for the time being.
 
Wednesday, the Statistics Portugal announced that the producer price index or PPI rose 0.8% year-on-year in December, compared to the 1.6% fall in the previous month. A year year ago, the PPI was down 0.9%.
 
On a monthly basis, the PPI increased 0.2% in December, slower than the 0.5% growth in the preceding month.
 
Meanwhile, manufacturing PPI rose 0.2% annually in December, after falling 2.7% in November. Manufacturing PPI was up 0.2% compared to the preceding month.
 
ITALY
 
Italy's benchmark FTSE MIB Index declined 308.65, or 1.4%, to 22,567.81, a third straight loss, in Milan. The gauge fell 3.9% this week.
 
Autogrill, the world's biggest manager of airport restaurants, dropped for a third day, losing 20.5 cents, or 2.3%, to 8.86 Euros. Airlines fell in Europe, led by Deutsche Lufthansa AG as Europe's second-biggest carrier said it considers some analysts' estimates for 2010 as "high" because they don't take into account how fares or fuel costs will develop.
 
Banca Popolare di Milano lost 17.25 cents, or 3.5%, to 4.79 Euros, taking this week's decline to 12%. Italy's oldest cooperative bank had its price estimate cut to 5 Euros from 5.7 Euros at Mediobanca Securities, which kept a "neutral" recommendation. The brokerage said in a note it took into account "a less rigorous cost control than previously forecast."
 
Banco Popolare fell for a third day, losing 13 cents, or 2.5%, to 5.12 Euros. FBR Capital Markets cut its recommendation on the lender to "market perform" from "outperform," citing "low visibility on asset disposals" and "low internal capital generation."
 
Brembo rose 20.75 cents, or 4.4%, to 4.93 Euros, a first gain this week. Bank of America Merrill Lynch Global Research reiterated its "buy" rating on the world's largest manufacturer of disk brakes.
 
Bulgari dropped the most in almost three months, losing 26 cents, or 4.1%, to 6.13 Euros. UniCredit Markets & Investment Banking kept a "sell" rating on the world's third-largest jeweler, saying the shares "fully incorporate potential earnings surprises driven by a faster- than-expected top-line recovery and profit rebound." Citigroup Inc. said in a note that "Bulgari's share price outperformance seems overdone," and kept a "sell' rating.
 
Bulgari had its price estimate increased to 5.8 Euros from 5.7 Euros at JPMorgan Chase & Co., which kept a "neutral" rating, and to 5.4 Euros from 3.2 Euros at Credit Suisse Group AG, which reiterated an "underperform" recommendation.
 
Eni lost 24 cents, or 1.4%, to 17.5 Euros, a fourth straight decline. Royal Bank of Scotland Plc cut its recommendation to "hold" from "buy."
 
Fiat lost 14 cents, or 1.4%, to 9.9 Euros, a third straight decline. Barclays Capital reiterated an "underweight" recommendation on the carmaker, saying in a note that it remains "cautious on the pricing and demand metrics in the European market, particularly in Fiat's key A & B segments."
 
Intesa Sanpaolo fell for a third day, losing 9 cents, or 3%, to 2.9 Euros. Bank stocks were the worst performers across Europe Friday after US President Barack Obama announced plans to curb risk-taking by banks.
 
UniCredit retreated 9 cents, or 3%, to 2.9 Euros.
 
Prysmian increased for a second day this week adding 13 cents, or 1%, to 12.99 Euros. The Malacalza family is evaluating a possible purchase of a 16.8% stake in Italian cable maker Prysmian SpA owned by Goldman Sachs, news agency Radiocor reported.
 
Saipem, Europe's largest oil-field services contractor, retreated 32 cents, or 1.4%, to 23.26 Euros as crude oil fell to a one-month low in New York.
 
STMicroelectronics dropped 14.5 cents, or 2.4%, to 6.04 Euros. ST-Ericsson, the semiconductor joint venture between Ericsson AB and STMicroelectronics, said its fourth-quarter loss widened from the previous period because of higher restructuring charges.

 
Telecom Italia advanced 1.9 cents, or 1.9%, to 1.04 Euros, after gaining as much as 5.2% as daily la Repubblica reported on a possible merger between Italy's biggest phone company and Telefonica SA, one of its main investors. Assicurazioni Generali SpA, Mediobanca SpA and Intesa said in a joint statement the report was "entirely without foundation."
 
GREECE
 
In Athens, the Athex Composite drew the week to a close at 2,033.76, up 0.99% and the only market in Europe to be up Friday.
 
Jurgen Stark, a member of the European Central Bank's Executive Board, said on Wednesday that the ECB will not change its rules to help member states with high budget deficits such as Greece.
 
"Greece knows that it needs to catch up on its homework," he said in a speech at the University of Leipzig.
 
Athens' top priority at present is a fundamental reorientation of economic policies and a comprehensive fiscal consolidation program, he added.
 
Turning attention to the economy, Stark said growth in the Eurozone is likely to slow in the first half of 2010 from the second half of last year but does not expect the economy to fall back into recession.
 
"It is likely that the first half of 2010 will be a but quieter than the second half of 2009," he said. "But this should not be considered as signs of a renewed downturn but rather the characteristics of a gradual and uneven economic recovery."
 
Tuesday, the General Secretariat of the National Statistical Service of Greece announced that the industrial turnover dropped 9.5% year-on-year in November, compared to the 16.8% fall in a year ago.
 
Manufacturing turnover fell 9.4% on an annual basis in November, while mining and quarrying turnover dropped 12.9%.
 
Separately, the statistical office said the industrial new orders decreased 11.6% year-on-year in November, slower than the 14.9% decline in the previous year.
The UK Market 
Did it follow the Global trend .....
 UK MarketsVodafone was among a short list of gainers on Friday as the FTSE 100 hit its weakest level in a month.
 
Shares in Vodafone edged higher after results from two of its competitors in India, Bharti and Idea, showed signs that the market is stabilising following a price war.
 
The fierce competition in India, Vodafone's main growth market, is expected to weigh on the group's results early next month. Brokers forecast service revenue growth at its emerging markets unit to have slowed to about 11%, from 18% in the previous quarter.
 
But JPMorgan and Citigroup both remained positive ahead of the figures, with the brokers arguing that a nascent European recovery should be enough to boost confidence. "We expect investors will see these results as an inflection point in the longstanding pressures facing the European operations," JPMorgan analyst Hannes Wittig said.
 
Vodafone closed up 0.2% at 135½p, one of only 15 blue-chip stocks to gain. The FTSE 100, meanwhile, was down 32.11 points, or 0.6%, to 5,302.99.
 
That left the index down 2.8% for the week, its sharpest fall since October.
 
Inter-dealer brokers were the session's sharpest fallers in reaction to Barack Obama's plans to impose curbs on proprietary trading. Icapdropped 6.5% to 400¾p and Tullett Prebon was down 6% to 310p. The regulatory fears also weighed against London Stock Exchange, down 4.3% to 664½p.
 
Barclays led the banks lower as the Volcker proposals to limit private equity stoked uncertainties about its funding and balance sheet structure.
 
The stock - down 4.1% to 271¼p as more than three times the daily average changed hands - has been under pressure this week amid renewed speculation about a cash call to allow BarCap to split from the bank's retail business.
 
Building materials companies might also suffer from the Volcker rule, according to ING, which saw the proposals as presenting "a serious risk" of derailing a US housing recovery. It advised selling stocks including Wolseley, down 1.5% to £14.20.
 
Miners bounced off a one-month low, helped by analysts dismissing the chances of a proposed national resource tax in Australia becoming law.
 
All states would have to agree to the tax but Queensland and Western Australia, which account for about three-quarters of the nation's mining royalties, will be determined to retain the current royalty scheme, they argued.
 
Xstrata closed up 2.4% to £11.25, leading the blue-chip risers, while Anglo American was up 0.7% to £25.05 and ENRC took on 1.7% to 938p.
 
Petropavlovsk was the sector laggard, with the gold miner sinking 5.8% to 983p after surprising investors with a $330m convertible bond issue a day after results.
 
Invensys was 1.2% higher at 307p after a broadly reassuring, albeit uneventful, trading update.
 
Imperial Tobacco ended 0.1% higher at £20.08 following news that rival British American Tobacco would raise UK cigarette prices next week.
 
Imperial had already lifted wholesale prices at the start of January but has been using discounting to stay competitive until others followed suit. BAT's move "may signal little appetite within the industry to play price maverick", said Evolution Securities.
 
PartyGaming led the mid-cap risers, up 6.2% to 285½p, on hopes it may be nearing a merger with Bwin, the Austrian sports betting group.
 
PartyGaming and Bwin said they were talking with a number of companies regarding potential consolidation, with the former saying the discussions are "at a preliminary stage".
 
Sector peer 888 Holdings was up 4.4% to 116p in tandem.
 
There was heavy trading in Petra Diamonds as the administrators to Lehman Brothers sold a block of 20m shares that has been held as collateral against a loan that was rumoured to have been made to Saad, the troubled Saudi conglomerate.
 
The shares were placed with one City institution at just 42p - a 28% discount to Friday's opening price. Petra fell 8.5% to 54p.
 
The sale of stock held as collateral at Lehman was also behind the above average turnover in Cape, which supplies support services to the oil and energy sectors. More than 5m shares changed hands - 10 times the daily average - as the stake was placed in the market by Nomura. Cape fell 5.7% to 228¼p.
 
Optare, the busmaker that recently revealed a takeover approach, rose 14.6% to 6.87p after securing the first order for is zero emission bus and raising £2.2m via a placing of new shares at 6p.
 
Dragon Oil, an explorer focused on Turkmenistan, firmed 1.8% to 438p after a trading statement showed production had reached 50,000 barrels a day at the start of the year.
 
Skyepharma fell a further 11.4% to 76½p in continued reaction to Thursday's news that US regulators had turned down an application for its Flutiform asthma treatment.
 
London Town slumped 64% to 2.87p after the property developer unveiled plans to cancel its listing on Aim and gave warnings that in the event of a refinancing its shares would be worthless. 
Asia Pacific Regional Markets 
Did they set the tone or follow the lead .....
Asiapac IndicesJAPAN

The Nikkei 225 Stock Average closed Friday at its lowest level thus far this year, as lower commodity prices hit resource-related stocks, while a stronger Yen sank exporters.
 
The Nikkei closed down 277.86 points, or 2.6%, at 10,590.55, its lowest level year-to-date. For the week, the index lost 3.6%, leaving it just 0.4% higher for 2010.
 
Daiwa Securities Capital Markets deputy general manager Yumi Nishimura also cited the slide in US bank stocks as damping market sentiment.
 
The Topix index of all the Tokyo Stock Exchange First Section issues fell 15.09 points, or 1.6%, to 940.94.
 
Trading volume was relatively heavy at about 2.87 billion shares.
 
Sector-wise, oil developers and trading houses were among the worst performers, after crude futures fell overnight amid growing concerns over a possible decline in global liquidity that had been lifting commodity markets. Inpex dropped 4.2% to Y677,000, Japan Petroleum Exploration lost 3.3% to Y4,390, and Mitsui & Co. fell 2.9% to Y1,394.
 
Crude's downside is nevertheless probably limited because actual demand remains fairly solid, said Tokai Tokyo Research Center analyst Katsumi Hosoi.
 
The Dollar's fall below Y90 during the Tokyo stock session weighed on exporters.
 
Toyota Motor ended down 3.2%, with its recall of 2.3 million vehicles due to defective accelerators serving as an additional sell catalyst. Honda Motor lost 2.4% to Y3,230.
 
Notable individual decliners included Shin-Etsu Chemical, which dropped 6.0% to Y4,945 after saying late Thursday that it expects to post a 50% drop in group net profit for the current fiscal year. Morgan Stanley also cut its rating from Overweight to Equal-weight.
 
March Nikkei 225 futures ended down 250 points, or 2.3%, at 10,590 on the Osaka Securities Exchange.
 
Japan Airlines Corp. plans to cut around 15,000 jobs by March 2011, including close to 3,000 through an early retirement program, implementing in about a year the bulk of its total workforce reductions under its rehabilitation plan, sources close to the situation said Friday.
 
The move to concentrate most of the job reductions in fiscal 2010 starting in April is apparently aimed at promptly cutting down on personnel costs at JAL, which filed for bankruptcy protection Tuesday.
 
Under the plan's provisions unveiled earlier, the nation's top carrier is set to shrink its operations and improve its cost structure by cutting around 15,700 jobs, or about 30% of its group workforce, by March 2013.
 
The schedule for reducing its group workforce at an accelerated pace has been included in a rehabilitation plan compiled together with the state-backed Enterprise Turnaround Initiative Corp. of Japan, which is supporting the airline's restructuring process, the sources said.
 
ETIC will explain the job cut plan to JAL's Labour unions to seek their cooperation, the sources said.
 
The airline will conduct the early retirement program starting in March, mainly involving personnel at Japan Airlines International Co., the group's principal flight service unit, they said. Among the nearly 3,000 slots, it envisions having 1,000 ground staff and 250 cabin crew members leave under the program.
 
The rest of the personnel cuts will involve attrition, as well as the planned reduction of JAL's subsidiaries from the current 110 to 57 by March 2011, according to the sources.
 
JAL also plans to sell off its shares in 24 companies, including hotel operator JAL Hotels Co. and TFK Corp., which prepares in-flight meals, and liquidate 15 firms, including some overseas subsidiaries of JALPAK Co., a travel agency, the sources said.
 
In the government-led rehabilitation process, ETIC will invest 300 billion Yen in JAL and set aside a credit line of 600 billion Yen with the state-owned Development Bank of Japan to keep the debt-ridden carrier afloat.
 
SOUTH KOREA
 
South Korean shares closed down Friday as the proposed US banking curbs increased uncertainty across global financial markets, hitting broad-based sectors and financial stocks in particular.
 
A surge in the US Dollar against the Korean won on a flight to safety, lent support to some exporters such as automobile companies.
 
The Korea Composite Stock Price Index, or Kospi, declined to 1684.35 with a loss of 27.66 points, or 2.2%, the biggest daily percentage-point loss since Nov. 27 when the index skid 4.7%.
 
Foreigners offloaded a net KRW423.7 billion worth of stocks, the largest daily sales amount since Oct. 29, and sold a net 20,631 contracts, about KRW2.3 trillion worth of futures--an historic high, said the Korea Exchange.
 
Financial stocks fell on the US banking curb proposal and concerns that China's further tightening may reduce liquidity, said analysts. KB Financial Group fell 3.7% to KRW54,100, Shinhan Financial Group declined 4.1% to KRW40,900, and Daewoo Securities slid 4.1% to KRW21,000.
 
Investors locked in profits mostly in recent gainers. Samsung Electronics fell 2.9% to KRW825,000, Hyundai Engineering & Construction dropped 2.7% to KRW71,900, while Hyundai Heavy Industries lost 3.9% to KRW212,000.
 
SK Energy declined 3.5% to KRW110,500 after reporting late Thursday its fourth-quarter net loss widened to KRW106.3 billion from a KRW85.5 billion loss a year ago. The results came worse than the consensus forecast of 20 analysts by Seoul research firm FnGuide, which was for a net profit of KRW223.5 billion.
 
In line with the market trend, Korean Air fell 2.2% to KRW58,600 on profit-taking even after reporting Friday it reversed to a net profit of KRW122.3 billion for the three months ended Dec. 31 from a net loss of KRW644 billion a year earlier on increased outbound travel, a stronger won and lower fuel costs.
 
Bucking the broad market trend, shares of Kumho Asiana Group units jumped after local media reported financial investors in Daewoo Engineering & Construction made an offer to acquire a controlling stake in Kumho Industrial via a KRW2.6 trillion debt-for-equity swap and a KRW2.2 trillion rights issue.
 
Kumho Industrial surged by the daily limit of 15% to KRW5,950, Kumho Tire advanced 4.3% to KRW3,615, and Asiana Airlines added 1.7% to KRW3,835.
 
Korea Development Bank said Friday it may consider an offer presented by financial institutions invested in Daewoo Engineering, but said it would be difficult to change the direction of restructuring.
 
Korean Air Lines Co., South Korea's top carrier, said Friday it returned to profit in the fourth quarter of 2009 from a year ago thanks to a fall in oil prices and a stronger Korean won.
 
Net profit came to 122.3 billion won (US$106.2 million) in the October-December period, a turnaround from a net loss of 644 billion won a year ago, Korean Air said.
 
Sales fell 4.9% on-year to 2.58 trillion won, while operating profit rose nearly seven-fold to 154 billion won on the back of a 22% drop in fuel costs.
 
HONG KONG
 
Hong Kong shares ended lower Friday due to concerns over capital outflows and expectations of more tightening policies from Beijing, but some Chinese banks bucked the trend because of bargain hunting after recent declines.
 
The blue-chip Hang Seng Index fell 136.49 points, or 0.7%, to 20,726.18 after trading between 20,250.36 and 20,738.99 during the session. The index is down 4% this week and has fallen for eight of the last nine sessions.
 
Market volume totaled HK$104.17 billion, sharply up from HK$83.13 billion Thursday.
 
Analysts said the index faces further downward pressure because of concerns over a rate hike in China. Mark To, head of research at Wing Fung Financial Group, said the index may test the next psychological support of 20,000 in the near term.
 
Data issued Thursday showed China's consumer price index in December rose 1.9% from a year earlier, sharply up from November's 0.6% rise, adding to expectations of imminent monetary tightening.
 
Resources companies fell because of recent US Dollar strength. Cnooc fell 2.4% to HK$11.56 and Chalco was down 2.7% at HK$8.82.
 
Hong Kong developers fell as liquidity outflows triggered concerns of a correction in local property prices.
 
Morgan Stanley said Hong Kong residential property prices may start falling because liquidity overflows from the mainland could fall significantly this year.
 
Sun Hung Kai Properties was down 1% at HK$104 and Henderson Land dropped 1.4% to HK$51.20.
 
Denway Motors bucked the trend, rising 7.6% to HK$4.97, after its parent Guangzhou Automotive Group Co. submitted an application to list on the Hong Kong bourse, and said it would take Denway private via a share swap after the listing.
 
Despite a lack of detail on the deal, Deutsche Bank said in a note the plan will switch Denway shareholders' investments "to a more diversified auto manufacturer, and arguably a highly competitive one in China's mid-to-high end passenger vehicle market".

 
Some mainland banks also defied the market downtrend on bargain hunting due to attractive valuations after recent declines. ICBC rose 2.3% to HK$5.85 after falling 5.5% in the previous two sessions and China Construction Bank rose 1.3% to HK$6.20 after falling 4.7% over the same period.
 
CHINA
 
Chinese shares fell again Friday after Wall Street tumbled on President Barack Obama's proposal to limit risk-taking at banks, ending the week down 3%.
 
The benchmark Shanghai Composite Index slipped 30.28 points, or 1%, to close at 3,128.59. The Shenzhen Composite Index for China's smaller second exchange shed 2.7% to 1,161.89.
 
The market lost ground following an overnight retreat in the US on Obama's proposal for sweeping reforms to the way banks in the US operate, a move that aims to prevent future financial crises.
 
Investors have also started to see governments around the world pull back on stimulus policies, adding to jitters that the Chinese government has already tightened bank lending, analysts said.
 
China reported Thursday rapid economic growth of 10.7% year-on-year in the last quarter of 2009, and that has triggered expectations the government might take more action to cool inflation and curb easy credit.
 
Resource shares extended losses on sliding commodity prices. China Petroleum and Chemical Corp. declined by 1.1% to 12.2 RMB, while China Shenhua Energy Ltd., the country's biggest coal producer, lost 2.6% to 30.12 RMB.
 
Jiangxi Copper Ltd., China's biggest metal producers, dropped by 2.5% to 36.4 RMB, and Aluminum Corp. of China fell 1.8% to 13.48 RMB.
 
Real Estates shares lost again on liquidity concerns, with Poly Real Estate Group, China's No.2 developer, off 2.9% to 19.99 RMB, and rival China Vanke Ltd., down 2.6% to 9.55 RMB.
 
But banks rebounded as investors were bought on attractive values after previous slumps.
 
China Construction Bank, Ltd. gained 2.2% to 6.02 RMB, while Industrial & Commercial Bank of China Ltd., China's biggest commercial lender, added 1.2% to 5.08 RMB. Bank of China Ltd. edged up 0.7% to 4.16 RMB.
 
TAIWAN
 
Taiwan stocks ended down 2.47% at a one-month closing low on Friday, with bank shares including Cathay Financial down after the United States proposed tough restrictions on banks that could squeeze profits.
 
The main TAIEX share index finished down 200.56 points at 7,927.31, its lowest close since Dec. 23 and the biggest one-day percentage fall since Nov. 27, when the TAIEX slid 3.2% on fears over Dubai's debt problems.
 
Turnover rose to T$147.8 billion ($4.6 billion) from Thursday's T$128.6 billion.
 
Cathay Financial, the island's biggest listed financial holding firm, slipped 2.74% to a one-month closing low, dragging the financial sub-index 2.48% lower.
 
Smaller rivals Fubon Financial fell 2.61% and Shin Kong Financial ended down 3.69%.
 
Construction and technology counters also lost ground as investors feared that the new restrictions could cause consumers to pull back on spending and hit corporate earnings.
 
Farglory Land Development was down 3.01% while rival Chien Kuo Construction dropped 2.15%, pulling the construction sub-index 1.76% lower.
 
The world's No.2 PC brand Acer slipped 5.28% and electronics parts maker Hon Hai Precision slid 5.48% to a one-month closing low, with the electronics sub-index down 2.74%.
 
Chi Mei Optoelectronics bucked the trend, climbing 1.18%.
 
Synnex Technology International Corp fell 1.49% even after a local newspaper reported that the company had been removed from the Taiwan Stock Exchange's list of companies that Chinese qualified investors are forbidden to invest in.
 
THE PHILIPPINES
 
After days of listless trading, local stocks dropped 2% on Friday after US President Barack Obama's call for tougher rules for US banks spooked Wall Street.
 
The Philippine Stock Exchange main index shed 62.11 points or 2.01%, closing at 3,023.47 with 1.3 billion shares valued at P3.18 billion.
 
All shares index dropped 24.56 points or 1.27% to close at 1,906.89.
 
Financial stocks suffered the biggest blow, going down 22.52 points or 3.38% to 644.09. This was followed by the industrial index, dropping 123.92 points or 2.64% to close at 4,577.82.
 
Property stocks slid 24.30 points or 2.29%, closing at 1,038.19%, followed by holding firms with a 30.64-point drop, or 1.88% to 1,600.15.
 
The mining and oil sector fell 86.82 points or 0.82% to 10,456.38 index points.
 
Finally, the services sector registered a drop of 8.30 points or 0.54% to close at 1,541.06 index points.
 
The Philippine National Oil Company's A stocks were the day's top gainer, up by 50% to P20.25 apiece.
 
Meanwhile, Mabuhay Vinyl Corporation suffered the most, sliding 18.18% to close at P0.90 per share.
 
SINGAPORE
 
Singapore's index hit a one-month low Friday, weighed down by selling in financials and other big-caps.
 
Singapore's Straits Times Index ended down 1.1%, with DBS Group off 1.6%, United Overseas Bank down 1.5% and Oversea-Chinese Banking Corp 1.1% lower.
 
Genting Singapore declined 0.8% to S$1.22 after Citigroup initiated coverage of the stock with a "sell" rating and a target price of S$0.80.
 
Singapore's Tiger Airways staged a robust debut in the city-state on Friday in spite of a weak market after raising S$248m (US$177m) in the first initial public offering by an Asian airline for five years.
 
Shares of the low-cost carrier rose 5.3% to S$1.58, compared with its offer price of S$1.50.
 
Tiger was able to attract strong institutional and retail interests for its IPO despite initial queries about its ambitious forecasts as investors are confident that a strong pick-up in travel demand is under way.
 
Singapore's Changi Airport, which is Asia's fifth-biggest, hit a monthly record in December, pointing to a sustained recovery in air travel. The group said it handled 3.83m passengers, a 9.7% rise from a year earlier and 9.1% higher than the previous monthly record set in December 2007.
 
Investors are particularly optimistic that low-cost travel would be able to continue to gain popularity in the rapidly growing Australian and south-east Asian markets. In Changi, budget carriers account for about a fifth of passenger traffic, up from just 3% in 2004.
 
The Tiger IPO is also appealing because of its strong shareholder base, according to Mr Yusof. Tiger's controlling shareholders are Singapore Airlines and Temasek, the city-state's investment agency.
 
But the airline is seeing increasing competition from its two main rivals - Malaysia's AirAsia and Jetstar, owned by Qantas - which announced a co-operation agreement shortly before the listing.
 
Tiger is aiming to expand in south-east Asia and Australia. The carrier will use the bulk of the S$233m attributable to it from the IPO proceeds before expenses to help finance the acquisition of up to 51 new Airbus A320 aircraft by 2015, adding to its fleet of 17 aircraft. The airline has bases in Singapore, Melbourne and Adelaide.
 
INDONESIA
 
Indonesia's index, which earlier hit its lowest since Jan. 7, ended down 1.06% on the day, led by a 4.1% drop in Astral International and a 5.1% fall in miner Indo Tambangraya Megah.
 
However, optimism over the domestic economy has pushed Jakarta up 3% this year, making it Southeast Asia's best performer and Asia's fifth best.
 
PT Bhakti Energi Persada, one of Indonesia's biggest miners of brown coal, revealed on Thursday that it was in talks to form a joint venture with MEC Coal and MEC Infra, subsidiaries of Dubai-based MEC Holdings, and the Ras Al Khaimah Investment Authority.
 
"We're in preliminary talks with MEC to find ways to cooperate because both companies have mine sites near Muara Wahau, East Kutai district, East Kalimantan," said Jeffrey Mulyono, president director of Bhakti Energi. "It's not decided yet but it could be a joint venture on transportation and coal sales."
 
MEC and Ras Al Khaimah are planning a $5.2 billion integrated energy project in East Kalimantan, including a coal railway.
 
"MEC plans to purchase some of our coal while we hope we can transport our coal through their railway, too," he said.
 
MALAYSIA
 
Share prices on Bursa Malaysia finished off their lows on Friday on selective buying after sentiment was dampened by Wall Street's overnight loss.
 
At 5pm, the benchmark FTSE Bursa Malaysia Composite Index (FBM KLCI) fell 7.91 points to 1,300.45.
 
It had opened 4.93 points lower at 1,303.43 and thereafter moved between 1,296.44 and 1,303.43.
 
A dealer said Wall Street's slump, the worst in three months with the Dow Jones Industrial Average tumbling 213.27 points to 10,389.88, affected investors' sentiment in both local and regional markets.
 
Bursa Malaysia's Finance Index fell 65.64 points to 11,415.49, the Industrial Index skidded 12.44 points to 2,700.9 and the Plantation Index slipped 23.79 points to 6,439.72.
 
The FBM Emas Index shed 48.64 points to 8,750.0, the FBM Ace Index declined 40.45 points to 4,495.21 and the FBM70 Index dipped 35.12 points to 8,554.95.
 
Decliners outpaced advancers by 531 to 245 while 230 counters remained unchanged and 305 others untraded.
 
Volume decreased to 1.008 billion shares worth RM1.381 billion from Thursday's turnover of 1.065 billion shares valued at RM1.378 billion.
 
The FTSE Bursa Malaysia Kuala Lumpur Composite Index (FBM KLCI) futures on Bursa Malaysia Derivatives closed lower Friday in line with the weaker regional and cash markets, dealers said.
 
The spot January 2010 and February 2010 contracts fell nine point each to RM1,295.5 and 1,295.0 respectively while March 2010 shed seven points to 1,295.0 and June 2010 slipped 7.5 point to 1,294.0.
 
THAILAND
 
Thailand's benchmark stock index SET ended 0.7% lower, recouping some of its early fall to the lowest since 14 December.
 
Domestic politics continued to hurt sentiment, dealers said.
 
Red shirt anti-government demonstrators are planning a symbolic rally next week near Bangkok's main airport, although they insist there will be no repeat of the crippling blockade a year ago by a rival protest movement.
 
The market rebound is short-lived and it's a technical-led one.
 
Banpu, Thailand's biggest coal miner, fell 2.7%, due to technical-led selling, while top energy firm PTT lost 0.9% in response to a weak oil price, with US crude futures hitting a four-week low on Friday.
 
Bucking the trend, KCE Electronics, a maker of printed-circuit boards, gained 6.2% on expectations of strong fourth-quarter results and solid 2010 earnings as it boosted efficiency to cut costs.
 
The deadline for bids to buy a stake in Thailand's seventh-largest lender, Siam City Bank, has been extended to 1 February from 25 January, two financial sources close to the deal said on Thursday.
 
The Financial Institutions Development Fund (FIDF), a unit of the central bank, is in the process of selling its 47.58% stake.
 
INDIA
 
Lacklustre global markets pushed Indian shares lower Friday, with Larsen & Toubro, banks and technology stocks leading the losses.
 
The Bombay Stock Exchange's 30-stock Sensitive Index fell 1.1% to end at 16,859.68. It has lost 4.0% this week.
 
The index, which fell as much as 2.6% to 16,608.09 during the day, recovered some losses as a string of strong corporate results encouraged investors.
 
US shares fell sharply Thursday, hurt by weakness in top bank stocks after President Barack Obama proposed to limit the size of banks and the risks they can take. Most Asian markets ended lower Friday, weighed down by the news and on concerns that China would take more measures to cool its economy.
 
On the National Stock Exchange, the 50-stock S&P CNX Nifty slid 1.1% to 5,036.
 
Total traded volume on the BSE rose to 65.50 billion rupees ($1.4 billion) from Thursday's 63.55 billion rupees. Decliners outnumbered gainers 2,043 to 842, while 52 stocks remained unchanged.
 
Engineering company Larsen & Toubro slipped 3.4% to 1,472.35 rupees, extending losses for a second day, weighed down by weak results and outlook.
 
Bank stocks remained in the red, with ICICI Bank losing 1.5% to end at 840.65 rupees and HDFC Bank closing down 1.9% at 1,679.35 rupees.
 
Technology stocks declined on profit-taking. Infosys Technologies fell 1.8% to 2,573.05 rupees, while Tata Consultancy Services lost 2.0% to finish at 755.10 rupees.
 
Bharat Heavy Electricals jumped 3.3% to 2,372.20 rupees, a day after the state-run power equipment maker reported a 36% rise in third-quarter net profit.
 
"Strong earnings growth (at Bharat Heavy) is expected to sustain, given that raw material prices will continue to be favourable, wage negotiations have been completed and capacity expansion is expected to increase execution rates," Credit Suisse said in a note.
 
Reliance Industries, which reported a better-than-expected 14.5% rise in third-quarter net profit, closed flat at 1,053.15 rupees.
 
ITC climbed 2.1% to 249.35 rupees after India's largest cigarette maker by sales reported a 27% rise in third-quarter net profit.
 
AUSTRALIA
 
The Australian sharemarket closed sharply lower Friday on concerns about increased US banking controls and worries over a China slowdown.
 
The benchmark S&P/ASX 200 index was down 76.6 points, or 1.59%, at 4750.6, while the broader All Ordinaries index dropped 77.7 points (1.6%) to 4771.9 points. For the week, the index lost 3%, its sharpest fall since early January.
 
On the Sydney Futures Exchange, the March share price index futures contract was down 77 points at 4724, on 39,729 contracts.
 
Among the top miners, BHP Billiton fell 2.3% to A$41.70 and Rio Tinto Ltd lost 3.5% to A$72.94. Both fell to their lowest close in two months.
 
Volumes were close to average for BHP and Rio, ahead of a shortened trading week next week. Australian markets will be closed on Tuesday for the Australia Day public holiday.
 
Lihir Gold Ltd was swept up in the downturn, despite reporting a 19% rise in its fourth-quarter gold output. Its shares were down 2.2% at A$3.06.
 
The major banks were down between 1% and 2.6%, with the smallest of the big four Australia and New Zealand Banking Group leading losses with a decline of 2.6% to A$22.65, even though there is scant prospect of tougher US-style regulation of banking operations here.
 
Takeover target AXA Asia Pacific Holdings fell 0.3% to A$6.58. It said said National Australia Bank had completed due dilligence as part of its bid $12 billion bid.
 
NEW ZEALAND
 
New Zealand shares ended lower Friday, with investors spooked by a sharp fall on Wall Street on US President Barack Obama's proposal to limit banks' risk-taking and worries about potential monetary policy tightening in China.
 
The NZX-50 ended down 1.1%, or 35 points, at 3190.43. The benchmark index has shed 2.1% this week.
 
Fletcher Building, the nation's biggest construction company, fell 2.2% to $7.97, the first time it has dipped below $8 this month. Telecom Corp. slid 1.2% to $2.41.
 
Contact Energy fell 2.6% to $6 after the biggest utility on the benchmark index said first-half retail electricity sales declined 4.2%.
 
Fisher & Paykel Appliances dropped 4.7% to 61 cents, leading the NZX 50 lower.
 
Pan Pacific Petroleum fell 4% to 48 cents after crude oil sank on data showing US refineries reduced output because of lower demand for fuel. Crude for March delivery fell below US$76 a barrel, trading at US$75.75 in Asia.
 
New Zealand Oil & Gas fell 1.8% to $1.60. New Zealand Refining fell 3% to $3.90.
 
Pike River Coal, which is building up supplies of coking coal from its South Island mine in preparation for the first 20,000 tonne shipment worth $3.4 million next month, fell 3.8% to $1.01. A second, 40,000 tonne shipment is scheduled for the April-June quarter.
 
Nuplex Industries climbed 4.9% to $3.20 after the specialty chemicals company said it made a record first-half profit, lifted its full-year forecast and reinstated its interim dividends.
 
Profit in the six months ended Dec. 31 exceeded Nuplex's previous record of $60.6 million in the first half of 2008, managing director John Hirst said in a statement.
 
AMP NZ Office Trust rose 2.4% to 75 cents, snapping a three-day slide that was sparked by the Tax Working Group's proposals to overhaul property tax rules.
 
Monday is likely to be particularly quiet due to a regional holiday in Wellington. 
Global Commodities 
'Food for thought' or 'a Grain of truth' .....
 CommoditiesCrude oil fell to a one-month low after equities dropped on President Barack Obama's proposed restrictions on risk-taking at financial institutions and speculation China will raise interest rates.
 
Oil tumbled 2% as stocks decreased on the administration's plan to bar banks from trading for their own accounts. US refineries ran at 78.4% of capacity last week, the lowest rate outside the Atlantic hurricane season since at least 1989, the Energy Department said Thursday.
 
Crude oil for March delivery fell $1.54 to $74.54 a barrel on the New York Mercantile Exchange, the lowest settlement since Dec. 22. Futures are up 71% from a year ago.
 
March oil dropped 4.9% this week as declines in equity markets dented investor confidence and a stronger Dollar reduced the appeal of commodities as an alternate investment.
 
The Reuters/Jefferies CRB Index of 19 commodities declined 0.8% to 275.43, the lowest since Dec. 22. Gold futures for February delivery slipped $13.50, or 1.2%, to settle at $1,089.70 an ounce on the Comex division of the Nymex. It's the first time gold closed below $1,100 this year.
 
China's 10.7% growth in the fourth quarter ignited concern that the nations responsible for leading the world out of a recession will raise borrowing costs to keep their economies from overheating. China is the second-biggest energy consumer after the US.
 
Gasoline inventories climbed 3.95 million barrels to 227.4 million last week, the highest level since March 2008, the Energy Department said. Supplies of gasoline, crude oil and distillate fuel, a category that includes heating oil and diesel, were above the five-year average for the week.
 
Gasoline for February delivery declined 1.72 cents, or 0.9%, to end the session at $1.9657 a gallon in New York, the lowest settlement since Dec. 22. Heating oil for February delivery slipped 4.4 cents, or 2.2%, to $1.9416 a gallon, the lowest close since Dec. 15.
 
US fuel consumption in the past four weeks dropped 1.8% from a year earlier, the report showed.
 
Orange-juice futures gained, posting the longest rally in seven weeks, on escalating speculation that citrus crops were damaged by a cold snap in Florida, the world's second-largest grower.
 
The state said it had 13 straight days with periods of freezing weather in the first half of the month. Estimates of losses range from 5% to 30% of this season's harvest.
 
Orange-juice futures for March delivery gained 1.9 cents, or 1.4%, to $1.3865 a Pound on ICE Futures US in New York, the fourth straight gain. The most-active contract climbed 5.2% this week.
 
Retailers sold 152.3 million gallons of orange juice in the first 12 weeks of the season that started in October, up 3.9% from a year earlier, the Florida Department of Citrus said, citing Nielsen Co. data, in a report posted on its Web site last week.
 
Futures have climbed 83% in the past year as adverse weather and disease lowered output estimates for Florida. Brazil is the largest orange producer.
 
Aluminum demand in industrialized countries is "highly likely" to increase 2% to 3% a year, Jacynthe Cote, chief executive officer of Rio Tinto Group's Alcan unit, said Friday.
 
There is "good cause to hope that aluminum consumption rates will return to pre-recession levels within the next three years," Cote said in a speech Friday to the Montreal Board of Trade. "In the longer term, we can reasonably believe that global aluminum demand will grow by about 4% a year over the next two decades."
 
Aluminum prices gained 68% in the past 12 months on the London Metal Exchange. Alcoa Inc., the largest US aluminum maker, forecast on Jan. 11 that global demand for the metal will increase 10% this year, led by China.
 
The price of gold closed below $1100 for the first time in 2010 on Friday, ending a dismal week with another solid loss. Demand concerns and speculation that the Dollar may rise further versus the Euro has weighed heavily on commodity prices this week.
 
February gold fell $13.50 to settle at $1089.70 an ounce. A furious rally on concerns about government spending and Dollar weakness the drove gold to record highs above $1225 back in December.
Global Currencies 
In for a Penny, in for a Pound .....
UK Markets
 The Dollar fell from almost the highest level against the Euro since July and dropped against the Yen on speculation President Barack Obama's proposal to rein in trading by financial institutions will reduce investment in US assets.
 
The Yen posted a second weekly gain versus all of its most- traded counterparts as a drop in global stocks on the White House's plan to limit risk taking and concern China will slow economic growth discouraged demand for higher-yielding assets. Sterling fell against the Dollar for a third day as the UK's retail sales grew in December less than expected.
 
The Dollar declined 0.4% to $1.4139 per Euro at 5 p.m. in New York, from $1.4084 Thursday, when it appreciated to $1.4029, the strongest level since July 30. The US currency decreased 0.7% to 89.82 Yen, from 90.43, after sliding earlier to 89.79, the lowest level since Dec. 18. The Euro slid 0.3% to 126.98 Yen, from 127.37.
 
New Zealand's Dollar dropped 4.9% on the week to 63.75 Yen and South African's rand decreased 4.1% to 11.76 Yen on speculation investors will reduce carry trades, in which they buy riskier assets with amounts borrowed in nations with low interest rates. The benchmark of 0.1% in Japan has made the Yen popular for funding such transactions.
 
The Yen recorded a second straight weekly gain versus the Euro, trading 2.8% higher. The currency tends to rise during times of economic uncertainty because Japan's trade surplus makes the nation less reliant on foreign capital.
 
Sterling fell 0.5% to $1.6114 after the Office for National Statistics said the UK's retail sales by volume rose 0.3% last month.
 
The Euro logged a 1.7% weekly decline against the Dollar on concern Greece will fail to contain its budget deficit within the European Union's limits, diminishing the appeal of the 16-nation Euro region's assets.
 
Australia's currency posted a 2.4% weekly drop to 90.07 US cents and Norway's Krone was down 2.2% to 5.807 versus the Dollar on speculation China's efforts to cool its economy will reduce demand for assets of commodity producers.
 
Against the South African Rand, the US Dollar traded higher in New York trading on Friday. The greenback surged up to 7.6677 versus the Rand, which may be compared to Thursday's New York session close of 7.6030. This set a 1-month high for the US currency. As of now, the pair is worth 7.6079. On the upside, 7.7000 is seen as the next target level for the US Dollar.
 
In Asian currency trading, Thailand's Baht weakened 0.4% this week to 32.99, the Taiwan Dollar dropped 0.2% to NT$31.980 and the Philippine Peso declined 0.8% to 46.190. 
 
And as always, ending currencies this week here in China.  On the over-the-counter market, the Dollar was at CNY6.8268 around 0730 GMT in thin trade, flat from Thursday's close. It traded in a very narrow range between CNY6.8266 and CNY6.8270.
 
The Dollar-RMB central parity rate was set at 6.8271, almost unchanged from 6.8272 Thursday. The fixing has been set between 6.8270 and 6.8281 since the start of the year.
China 
Key news eminating from China this week .....
 China MarketsChina comfortably beat its target of 8% economic growth last year and came close to overtaking a stagnant Japan as the second-biggest economy in the world, even as signs emerged on Thursday that inflationary pressures are building.
 
The economy accelerated in the fourth quarter to expand by 10.7% and grew by 8.7% in 2009, in spite of the biggest global economic crisis in generations.
 
China's gross domestic product reached $4,900bn, just short of the $5,100bn Japan is expected to register after last year's contraction, according to Goldman Sachs.
 
However, consumer price inflation jumped sharply again last month, from 0.6% in November year-on-year to 1.9%, the latest indication that the economy could be at risk of overheating. Factory gate prices rose 1.7% in December, reversing November's 2.1% fall.
 
"My first worry is how to control price rises while promoting economic growth, " said Ma Jiantang, director of the National Bureau of Statistics, in the latest in a series of comments by senior officials about the risks of inflation. "Another concern that is shared by us all is that the price of assets is probably growing too fast. For instance real estate in some cities is growing too fast."
 
Regulators have ordered some banks to stop new loans until the end of the month for fear that frantic lending had been compromising monetary policy that most economists already considered too loose.
 
Prices of goods that matter to consumers such as food, housing and utilities are rising faster than income growth and that will worry Beijing.
 
This time last year, the government's 8% growth target was deemed too ambitious by many analysts but in what some economists have called the biggest easing in monetary and financial conditions in history, China's banks extended Rmb9,590bn in new loans last year, more than double the amount handled in 2008.
 
The rapid loan growth has led to increasing concern that asset price bubbles have formed in the economy, particularly in the white-hot property sector in which average prices in the 70 largest cities rose 7.8% in December compared with a year earlier.
 
Consumption in China remained strong with retail sales rising 17.5% year-on-year in December. Industrial production though slowed from a 19.2% increase year-on-year in November to 18.5%.
 
************************************
 
Chinese regulators have told some banks temporarily to halt lending amid growing fears of asset bubbles and inflation.
 
The renewed efforts to rein in credit growth after a burst of frantic lending activity by Chinese banks that have raised concerns about overheating in the Chinese economy.
 
The crackdown prompted stock market falls around the world as investors worried that China's tightening could cool its strong growth and dent expectations for the global recovery.
 
Traders said the China concerns added to fears over the outlook for Greece, which is struggling to convince investors it can fund the Eurozone's biggest deficit. Greek bond yields leapt dramatically on Wednesday, sharply raising the country's borrowing costs. The jitters sent the Euro to a five-month low against the Dollar and sterling at $1.4115 and 86.7p respectively.
 
In the first two weeks of January alone, Chinese banks extended as much as Rmb1,100bn ($161bn) in new loans, analysts and bankers told the Financial Times. If banks were to sustain that pace of lending, they would pump nearly Rmb30,000bn into the economy this year. That would equate to four times the Rmb7,500bn annual target for new loans announced on Wednesday by Liu Mingkang, chairman of the China Banking Regulatory Commission.
 
In response to the lending spike, the regulator has issued verbal "guidance" to all banks, imposing lending quotas and warning the most aggressive lenders temporarily to halt loans, according to several banking executives.
 
Mr Liu said Chinese banks needed to prepare for "the wrong kind of borrowers and the wrong kind of weather".
 
At least two banks - Bank of China and Agricultural Bank of China - have issued orders to lower level branches to stop issuing loans to corporate customers without explicit approval from their headquarters.
 
A Chinese state-run newspaper cited un-named sources as saying that Bank of China, which has been the most active lender among the large state banks, had switched off its internal electronic loan approval system.
 
BoC issued what amounted to a self-criticism, admitting in a statement that it had issued an unusually large volume of new loans in the first 20 days of January. It promised to return to a more sustainable and even lending pace while optimising and adjusting its credit structure and obeying government rules.
 
The bank did not disclose how much it had lent or answer questions about whether it had suspended lending operations.
 
Analysts said Beijing had also raised the required amount of capital some banks must hold in reserve with the central bank, leaving them less money to hand out as loans.
 
That news came after China's central bank last week raised the reserve requirements on all large lenders - the first increase in 18 months.
 
Chinese lenders extended Rmb9,600bn in new loans last year, more than double the amount in 2008, following government orders to support the economic stimulus programme and boost flagging growth in the face of the global crisis.
 
The flood of credit has led to soaring asset prices, particularly in the property market, and fears that inflation could take hold in the coming months.
 
In a speech published late on Tuesday night, Wen Jiabao, the Chinese premier, appeared to lend high-level support to tougher measures aimed at reining in surging lending.
 
"China will maintain reasonable and ample growth in money supply and credit, focus on optimising the credit structure and carefully manage the pace of lending to reduce financial risks," Mr Wen said.
 
Speaking in Hong Kong on Wednesday, Liu Mingkang, chairman of the China Banking Regulatory Commission, forecast that banks would issue Rmb7,500bn in new loans this year. That would mean a rise of 16-18% in total outstanding loans on an annual basis and would mark a sharp deceleration from the 32% rise in 2009.
 
Last year's massive rise in lending has raised concerns that the credit expansion would fuel asset bubbles in real estate and stock market investments, which in turn could spark a damaging rise in banks' non-performing loans ratios.
 
Mr Liu said Chinese banks had been told to "heighten vigilance" against a rise in credit risks. He added that the regulator was increasing scrutiny of second loans, in particular those relating to local government-sponsored projects, and was taking action against those banks that were concentrating lending risks.
 
He also said the commission had placed 190 banking institutions under better examination, although he did not name them, and said some banks had been asked to limit lending because they had failed to meet certain requirements, including capital.
 
Mr Liu stressed, however, that China had a large aggregate provisioning cushion: "We are confident that the risks envisaged can be absorbed."
 
On regulation, he said the regulator would soon issue new leverage and liquidity ratios and prevent banks from guaranteeing corporate bonds.
 
China's central bank last week unexpectedly raised the reserve requirements on its lenders - the first increase in 18 months. The ratio for big banks was raised this week by 50 basis points to 16%.
 
************************************
 
China's stronger-than-anticipated economic rebound in the fourth quarter may make it harder for Premier Wen Jiabao to achieve one of his main goals for 2010: convincing the public that consumer prices won't surge.
 
Inflation accelerated to a more-than-forecast 1.9% in December and gross domestic product climbed 10.7%, the National Bureau of Statistics said in Beijing Thursday. Since October, policy makers have said managing inflation expectations is one of the government's central objectives.
 
Policy makers will likely act sooner than previously anticipated to contain prices. The People's Bank of China will raise interest rates by the end of June and also ratchet up banks' reserve requirements, according to the median of 17 forecasts. A survey on Jan. 8 indicated the PBOC would wait until the third quarter before lifting borrowing costs.
 
Officials will also allow the RMB to appreciate after holding it unchanged since July 2008 to aid exporters, Thursday's survey showed. The RMB will increase about 3% by the end of this year against the Dollar.
 
Central bank Governor Zhou Xiaochuan reaffirmed the nation's moderately loose monetary policy, according to a recording of comments he made at a government meeting in Beijing Thursday. Officials will focus on flexibility, supporting economic growth and controlling inflation expectations, while credit policy will ensure that money goes to key sectors of the economy, he said.
 
Thursday's data showed China's growth accelerating to the fastest pace since 2007, capping Wen's success in shielding the nation from the global recession and adding pressure to rein in a surge in credit.
 
The one-year swap rate, an indicator of future changes in borrowing costs, climbed and the People's Bank of China guided three-month bill yields higher for the second time in two weeks.
 
A fourth-quarter survey by the central bank across 50 cities showed that 46.8% of households viewed consumer prices as "too high to accept," up from 45.2% in the previous three months. Chinese companies raising prices this year include Beijing Yanjing Brewery Co. and liquor maker Kweichow Moutai Co.
 
The statement from the statistics bureau mirrored a Wen speech on Jan. 19 by omitting a pledge to keep monetary policy "moderately loose." Ma Jiantang, the head of the statistics bureau, did cite that pledge in his press briefing.
 
After last year overtaking the US as the biggest auto market and Germany as the biggest exporter, China is poised to slot behind America this year as the second-largest economy. China's GDP last year was 33.535 trillion RMB ($4.9 trillion), the statistics bureau said Thursday, almost the same as the World Bank's 2008 estimate for Japan.
Summary  
The coming week looks like .....
Commodities Indices
 The US government's latest round of Treasury auctions could trump the Federal Reserve next week as market participants scrutinize auction statistics after a recent shift in bidding behavior.
 
The auctions will coincide with the Federal Reserve's first monetary policy meeting of the new year, and while the Fed has several new voters in place, market participants don't expect any major shifts in its thinking as the economy continues to limp along. Policy makers are expected to leave interest rates low for a while and most believe the Fed's first meeting statement of 2010 will differ very little from December's.
 
Concerns on Friday about a delay in the confirmation vote on Fed Chairman Ben Bernanke's second term could add another layer of uncertainty to trading next week. Given investors' preference for short-dated notes in times of uncertainty, it could even help raise demand at the government's auctions of a total of $118 billion in two-, five- and seven-year notes.
 
Bernanke's term expires on Jan. 31, and the Senate must vote on whether to confirm him for another five years. The vote has been pushed back to next week at the earliest. Several senators Friday said they would vote against a second term for Bernanke, but market participants believe that, in the end, he will be re-confirmed.
 
That leaves the main focus on the government's latest offering of Treasuries: a $44 billion sale of two-year notes on Tuesday, a $42 billion sale of five-years Wednesday and a $32 billion sale of seven-years Thursday.
 
Key will be the amount of bids placed in each auction outside the primary dealer system, made up of 18 large banks that trade directly with the Federal Reserve and are obligated to bid on US government debt. That so-called direct bid is expected to remain robust, as investors--flush with cash at the beginning of the year--seek to put their money to work in the government bond market without revealing their intentions to the primary dealers.
 
Typically though, it is auctions' indirect bid that market participants have a closer eye on; that category can include large institutions such as foreign central banks. The US needs foreign bidders at its auctions since it depends mostly on foreign investors to fund its deficit--China and Japan are the largest holders of US Treasuries.
 
Since November, some large domestic and foreign money managers, which typically bid at Treasury auctions through primary dealers, have instead placed bids directly with the Treasury. More direct bidders make it harder for primary dealers to gauge interest in auctions from customers and raise the risk that dealers' interest in the auctions could wane. Worst case, that uncertainty could drive down demand at Treasury auctions at a time when the government is auctioning massive amounts of debt to cover its budget deficit.
 
The US economy probably finished 2009 with the strongest rate of growth in nearly four years. Beneath that veneer, the economy still looks shaky.
 
The biggest number of the week - the first look at fourth-quarter GDP - comes on Friday next week and economists think output expanded at a 4.4% annual rate. That would be double the pace seen in the previous three months.
 
But a series of reports on the housing market, starting with existing home sales on Monday, are likely to paint a much gloomier picture. Thursday's weekly jobless claims also warrant close scrutiny after an unexpectedly sharp spike last week.
 
The Labour Department astonishingly blamed that jump on some technical factors, so economists will be watching to make sure that applications for unemployment aid are still on a downward path.
 
The earnings focus shifts from banks to the sort of companies - Philips, Ericsson, Siemens, Nokia, H&M, as well as US heavyweights Apple, Johnson & Johnson, Proctor & Gamble, Caterpillar, Microsoft, Motorola and 3M - that will give investors insight into how consumption and production are recovering.
 
High expectations cooled response to some recent results and the focus will be on 2010 guidance.
 
Meanwhile, pharmaceuticals giant AstraZeneca will dish out its own final results on Thursday and due to its regular updates, little is expected in the way of surprises. However, updates on sales of its major drugs should be covered in considerable depth and 2010 looks likely to serve up a few issues.
 
Still in the UK, economically-speaking, the biggest question on everyone's lips next week will be whether the UK has finally exited recession. On Tuesday, the release of the latest Gross Domestic Product figures for the fourth quarter should answer this once and for all.
 
Germany's Ifo institute releases its closely watched monthly index of business confidence in Europe's biggest economy - that will be noteworthy in Europe next week. Germany also sees Siemens reporting.
 
Down under, an upcoming Australian Consumer Price Index report will likely prove the highlight for Australian Dollar trade in the week ahead, while traders may likewise do well to monitor results from US Federal Reserve and Reserve Bank of New Zealand interest rate announcements. Neither central bank is expected to move rates at their upcoming meeting, but any noteworthy shifts in rhetoric from the US FOMC could easily force moves across financial markets. Interest rate traders are also pricing in a miniscule 5% chance that the RBNZ will raise interest rates by 25 basis points, and any especially large surprises could force sympathetic moves for the Australian Dollar.
 
Reserve Bank of Australia watchers will nonetheless keep a vigilant eye on upcoming Q4 CPI figures. Consensus estimates predict that prices rose 0.4% through the period and 2.0% on a year-over-year basis. Given buoyant employment data and other signs of economic health, we would expect that inflation risks remain to the topside ahead of the release. Overnight index swaps continue to price in substantial RBA rate hikes through the next 12 months, but considerable uncertainty surrounding the timing of the next interest rate hike will make upcoming CPI data especially significant. Watch for considerable Australian Dollar strength on an upside surprise, while a noteworthy disappointment could force even sharper AUD weakness.
 
In India, a Reuters poll found 24 out of 25 economists expected the RBI to raise the cash reserve ratio (CRR), the proportion of deposits banks need to keep with the Reserve Bank of India, by up to 50 basis points in its January 29 policy review.
 
Japan will release a spate of economic data with the central bank expected to leave rates unchanged. On the corporate front, Samsung and Nintendo are among the highlights.
 
The South African Reserve Bank (SARB) rates decision next week could be important especially if the SARB continues to talk the Rand down.
 
All told, plenty to watch next week especially as markets finished this week on such a downbeat note.
 
And of course, on Wednesday we will see President Obama deliver his State of the Union speech - 'state' being the operative word there I feel!
 
Finally, a snippet to leave you with this Saturday morning.
 
Miami-based Premier American Bank was closed by regulators on Friday, marking the fifth bank failure of 2010. Premier American Bank had roughly $350.9 million in assets and $326.3 million in deposits as of Sept. 30, the Federal Deposit Insurance Corp. said.
 
The bank's failure will cost the federal deposit insurance fund $85 million, the FDIC said as if it were water off of a duck's back!
As always, I will keep you posted with major developments as/when they occur in the week ahead.
 
In the meantime, I wish you all a very pleasant weekend.
 
Market Newsletter Written By 


Adrian Page

Managing Director
Financial Page International
 
In This Issue
US Markets
European Markets
The UK Market
Asia Pacific Markets
Global Commodities
Global Currencies
China This Week
Summary
Quick Links
Services
Our Services 
Personal Banking
Useful Tools