March 11, 2010

(BN) Top Stories: Stocks

Top Stories: Stocks
2010-03-11 08:36:47.153 GMT


     March 11 (Bloomberg) -- The following are the day's top stories on stocks:

European Stocks, U.S. Index Futures Drop; BHP Billiton, Lagardere Slide
     European stocks declined from a seven-week high, led by  basic-resource producers as growing Chinese inflation increased  speculation the government will pare back stimulus measures.
U.S. futures fell and Asian shares rose. BHP Billiton Ltd., the  world's largest mining company, dropped 1.3 percent in London  as China's inflation reached a 16- month high. Lagardere SCA  slumped the most in 10 months after France's biggest publisher  reported earnings that missed analysts' estimates. The Stoxx  Europe 600 Index slipped 0.2 percent to 257.77 at 8:27 a.m. in  London. The gauge has soared 8.6 percent since Feb. 5 on  speculation the European Union will support Greece if needed as  it struggles to reduce the region's biggest budget deficit.
Mohamed A. El-Erian, whose company runs the world's biggest  mutual fund, said deteriorating public finances may affect the  global economy more than is currently realized. ``The  importance of the shock to public finances in advanced  economies is not yet sufficiently appreciated and understood,''
El-Erian, co-chief investment officer at Pacific Investment  Management Co., wrote in an article on the Financial Times Web  site. The potential damage from increased government borrowings  is ``at present being viewed primarily -- and excessively --  through the narrow prism of Greece.''

Asian Stocks Rise on Outlook for Japanese Economy; BHP Billiton Declines
     Asian stocks rose, sending the MSCI Asia Pacific Index  toward a seven-week high, as speculation Japan's economy is  recovering outweighed concern China will pare back measures  that spurred growth. Mizuho Financial Group Inc., Japan's  third-largest bank by market value, and Aeon Co., the country's  No. 1 supermarket operator, climbed more than 1 percent in  Tokyo after the Nikkei newspaper said the government will boost  its economic outlook. BHP Billiton Ltd., the world's biggest  mining company, lost 0.5 percent in Sydney, and Jiangxi Copper  Co. dropped 1.1 percent after China said inflation in February  reached a 16-month high. ``The economy is undoubtedly in the  midst of mild recovery'' in Japan, said Mitsushige Akino, who  oversees the equivalent of $450 million at Tokyo-based  Ichiyoshi Investment Management Co. The MSCI Asia Pacific Index  rose 0.3 percent to 122.94 as of 5:05 p.m. in Tokyo, with five  stocks advancing for every four that dropped. The index, on  course for its highest closing level since Jan. 21, fell after  China reported its inflation figures, and then rebounded.

China Stock-Futures Market to Dwarf Cash Trade, History Says: Chart of Day
     South Korea and Taiwan's sevenfold increases in  stock-futures trading after they were introduced show the  potential for China's market, expected to begin trading next  month, according to China International Capital Corp. The CHART  OF THE DAY shows that within a decade, stock- index trading  volumes for South Korea's Kospi 200 index had grown to 757  percent more than that of the cash market by November 2009. The  Taiwan Stock Exchange's futures trade was seven times larger  than that of the cash market by the end of last year, data  compiled by CICC show. ``The potential for Chinese stocks is  substantial,'' Hao Hong, a Beijing-based equity strategist for  CICC, said in a report. ``Judging from the international  experiences in Taiwan and Korea, the futures markets may grow  several times over the physical market.'' The first stock-index  contracts, based on China's CSI 300 Index, may begin trading in  mid or late April, Shang Fulin, chairman of the China  Securities Regulatory Commission, said this month. The  regulator said index traders will have to keep at least 500,000  yuan ($73,239) in their brokerage accounts.

Peru Left Behind as Latin America Stocks Rise to Records: Chart of the Day
     Peru will be the only stock market in Latin America that  fails to rise to a record this year because it has the closest  relationship to metals prices that remain below all-time highs,  according to Banco BTG Pactual SA. The CHART OF THE DAY shows  the correlation between the Lima General Index and the  Bloomberg Base Metals 3-Month Price Commodity Index climbed to
0.83 yesterday, based on percentage changes in the past 30  days. That's the second-most ever and the strongest  relationship between commodities and stocks in the region, data  compiled by Bloomberg show. A reading of 1 means two assets  move in tandem, while zero means no relationship. Peru is the  world's second-biggest producer of copper and zinc, according  to Sociedad Nacional de Mineria Petroleo y Energia, and the  only Latin American stock market besides Brazil that hasn't  climbed to a record in 2010. The Bovespa needs to rally 5.1  percent to surpass its prior peak, less than 66 percent for  Peru's measure and 32 percent for the metals gauge. ``I don't  think Peru will reach record highs this year,'' said Alonso  Aramburu, an equity analyst with Pactual in New York.
``Commodity prices are still well below 2007 levels.''

Baltic Trading IPO Raises $228 Million at Low End of Forecast Price Range
     Baltic Trading Ltd., the New York- based shipping company  formed to operate dry-bulk cargo vessels, raised $228 million  in its initial public offering after selling shares at the low  end of its price range. Baltic Trading, established in October  by Genco Shipping & Trading Ltd. of New York, sold 16.3 million  shares for $14 each yesterday, according to a filing with the  Securities and Exchange Commission and Bloomberg data. The  company, which asked for as much as $16, will use the proceeds  to buy six ships that will transport iron ore, coal, grain and  steel products. The IPO is the first of three U.S. offerings  this week and comes after seven companies postponed or delayed  initial sales this year. While buyers have extracted  concessions in almost every deal, Baltic Trading became the  second company in 2010 to price shares within its forecast  range as the Standard & Poor's 500 Index rebounded from a  three-month low. ``With markets being much stronger across the  board, that's good momentum building for the IPO market,'' said  Josef Schuster, the Chicago-based founder of IPOX Capital  Management LLC and manager of the Direxion Long/Short Global  IPO Fund, which started this month. ``If these companies don't  price reasonably well in the market, that would absolutely be  disappointing.''

Tech Stocks Pushed by Analysts a Decade After Bubble Burst: Chart of Day
     Ten years after bullish analyst recommendations helped push  the Nasdaq Composite Index to a record, technology stocks are  the highest-rated industry group. The CHART OF THE DAY's bottom  panel shows the Nasdaq peak of 5,048.62 on March 10, 2000, and  its 78 percent plunge over the next two and a half years. The  top panel shows analysts giving technology companies the  highest average rating among nine industries, according to data  compiled by Bloomberg. Stock pickers project a 14 percent gain  for the group during the next 12 months, the data show. ``As  value investors, 10 years ago we were finding virtually nothing  in technology,'' Mark Donovan, co-chief executive officer of  Robeco Investment Management, a unit of Robeco Group, which  oversees about $194 billion, said in a Bloomberg Television  interview from Amsterdam. ``Today there are a lot of  high-quality global players in the tech area that are trading  at very sensible multiples. There are hidden values that are  plentiful in the group.'' Cisco Systems Inc., the world's  biggest network-equipment maker, had a price-to-earnings ratio  of 160 a decade ago. Now the company is trading at 23 times  reported profits. IPod maker Apple Inc.'s PE ratio has dropped  to 22 from 45, while the ratio for Microsoft Corp., the biggest  software company, has declined to 15 from 63, according to  Bloomberg data.

Swiss Market Index Falls; Zurich Financial, UBS, ABB Lead Declining Shares
     Switzerland's benchmark stock index, the Swiss Market  Index, fell 0.18 percent at 9:05 a.m. The index of 20 stocks  traded on the Electronic Bourse System fell 12.39 to 6,861.20.
Among the stocks in the index, 6 rose, 12 fell and 2 were  unchanged. Declines in the Swiss Market Index were led by Ubs,  Abb and Zurich Fin. Services. About 1.70 million shares traded  in the Swiss Market Index. --Editor: David Merritt.

Japan's Stocks Rise on Outlook for Economy, Iron-Ore Demand; Mitsui Climbs
     Japanese stocks rose, sending the Nikkei 225 Stock Average  to its highest close since Jan. 21, on speculation increased  demand will boost earnings at iron-ore producers and that the  nation's economy is recovering. Mitsui & Co., which owns a 15  percent stake in Vale SA's major shareholder, climbed 2.7  percent after the Nikkei newspaper reported Brazil-based Vale  is seeking to increase iron-ore prices. Mitsui O.S.K. Lines  Ltd., Japan's largest operator of iron-ore ships, rose 1.3  percent. Electric device retailer Yamada Denki Co. climbed 4  percent after the Nikkei said the government may lift its  outlook on the nation's economy. ``The economy is undoubtedly  in the midst of mild recovery,'' said Mitsushige Akino, who  oversees the equivalent of $450 million at Tokyo-based  Ichiyoshi Investment Management Co. ``Iron-ore producers don't  think of raising prices unless demand is very strong. That  could be further evidence that the global economy is  improving.'' The Nikkei 225 climbed 1 percent to 10,664.95 in  Tokyo, the highest close since Jan. 21. The broader Topix index  rose 0.9 percent to 930.38, with almost five times as many  shares advancing as falling. The gauges briefly pared gains  after a Chinese government report on rising consumer prices  spurred concern the country will raise interest rates to curb  inflation.

Most China Stocks Drop as CPI Climbs to 16-Month High; Automakers Decline
     Most Chinese stocks fell, led by automakers and developers,  after inflation accelerated and new loans exceeded forecasts,  boosting the prospect for higher interest rates. SAIC Motor  Corp., the country's largest carmaker, lost 2.9 percent and  Gemdale Corp. dropped 1.2 percent. Consumer prices climbed in  February to a 16-month high and lenders extended 700.1 billion  yuan ($103 billion), government reports showed today. Shanghai  Pudong Development Bank Co. rose 2.7 percent after selling  shares to China Mobile Ltd. ``The market's reading of the  economic data points to overheating and a lot of investors  believe an interest-rate increase will come soon,'' said Yan  Ji, who helps oversee about $1.2 billion at HSBC Jintrust Fund  Management Co. in Shanghai. More than two stocks fell for each  one that rose on the Shanghai Composite Index, which gained  2.36, or 0.1 percent, to 3,051.28 at the close. The gauge has  lost 6.9 percent this year on concern measures to curb property  price gains and rein in lending growth will slow the economy.
The CSI 300 Index slipped 0.1 percent to 3,276.71.

Buy Asian Equities to Gain Before `Lights Turn Green,' Goldman Sachs Says
     Investors should buy Asian stocks outside Japan after  valuations dropped and before sentiment strengthens further,  Goldman Sachs Group Inc. said. ``By the time all the lights  turn green, the race will already be well under way,'' Goldman  Sachs analysts led by Timothy Moe wrote today. ``Sentiment and  valuation will improve as the year progresses, and we would  prefer to be early.'' The MSCI Asia-Pacific excluding Japan  Index remains 0.5 percent lower this year, having rebounded  from year-to-date losses of as much as 9.7 percent. Stocks slid  earlier this year on concern that China will tighten lending to  combat faster inflation and that Greece's debt crisis will  spread. Analysts' earnings growth estimates for this year have  climbed to 26 percent on average, near Goldman Sachs's 30  percent forecast, according to the report. The most profitable  securities firm in Wall Street history is predicting a 21  percent increase in Asian corporate earnings in 2011.

     For the complete stories summarized here, and for more of the day's top news, see TOP .

-0- Mar/11/2010  8:36 GMT
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(BN) Top Stories: Bonds

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Top Stories: Bonds
2010-03-11 08:29:46.274 GMT


     March 11 (Bloomberg) -- The following are the day's top stories on bonds:

Treasury Two- to 30-Year Spread Near Record High Before Long Bond Auction
     Treasury 30-year yields were near the highest on record  compared with two-year rates as the U.S. prepared to sell $13  billion of long bonds amid signs the global recovery is gaining  momentum. Investors are seeking higher interest rates on  long-term loans to the government as President Barack Obama  borrows record amounts to sustain the U.S. economic revival.
Yields show investors added to bets on inflation for a seventh  session yesterday, the longest run in a year. ``We're facing an  unprecedented level of government borrowing,'' said Satoshi  Okumoto, a general manager in Tokyo at Fukoku Mutual Life  Insurance Co., which has the equivalent of $60.8 billion in  assets. ``Investors are demanding a premium for that. Yields  are going to rise a bit more.'' The 30-year bond yielded 4.69  percent as of 7:34 a.m. in London, according to data compiled  by Bloomberg. The 4.625 percent security due February 2040  declined 2/32, or 63 cents per $1,000 face amount to 98 27/32.
The rate was 3.78 percentage points more than two-year yields,  after increasing to 3.85 percentage points on Feb. 17, the  steepest slope to the so- called yield curve since Bloomberg  data tracking the figures started in 1980.

El-Erian Says World Economy Faces Threat of Deepening Sovereign Debt Shock
     Mohamed A. El-Erian, whose company runs the world's biggest  mutual fund, said deteriorating public finances may affect the  global economy more than is currently realized. ``The  importance of the shock to public finances in advanced  economies is not yet sufficiently appreciated and understood,''
El-Erian, co-chief investment officer at Pacific Investment  Management Co., wrote in an article on the Financial Times Web  site. The potential damage from increased government borrowings  is ``at present being viewed primarily -- and excessively --  through the narrow prism of Greece.'' Governments may have to  raise taxes and slash spending to cope with swelling deficits  after borrowing unprecedented amounts to stave off the global  financial crisis, said El-Erian, 51, who shares his job title  with Bill Gross. A failure to carry out fiscal measures in time  would raise the possibility of governments seeking to eliminate  excessive debt through inflation or default, he said. Pimco has  said debt strains in Greece, Portugal and Spain underscore its  view that 2010 will be a year of slower-than- average growth,  and predicts there will be a shrinking global role for the U.S.
economy.

Company Bond Spreads at the Narrowest This Year Lure GMAC: Credit Markets
     Corporate bond yields fell to the lowest this year relative  to benchmark government securities, luring GMAC Inc. to sell  its longest-maturity notes since 2004. GMAC, the Detroit-based  auto and home lender bailed out by the U.S. after credit  markets froze in 2007, sold $1.5 billion of 10-year, 8 percent  notes, according to data compiled by Bloomberg. Its second  offering in a month was priced to yield 4.532 percentage points  more than similar-maturity Treasuries. The extra yield  investors demand to own corporate bonds rather than government  debt fell yesterday to 159 basis points, or 1.59 percentage  point, the lowest this year, from as much as 174 basis points  Jan. 4, the Bank of America Merrill Lynch Global Broad Market  Corporate Index shows. Yields averaged 4.035 percent. The GMAC  sale shows growing optimism that Greece's budget crisis will be  contained and won't spread to corporate borrowers. ``The stars  are aligning for a company like GMAC, which has a bit of a  storied history, to do a big, longer-termed deal,'' said Sabur  Moini, who helps manage $1.3 billion at Payden & Rygel  Investment Management in Los Angeles. ``The market is looking  past the volatility we saw in early to mid-February now that it  looks like Greece is not going to default.''

Trade Deficit in U.S. Probably Widened for Third Month as Imports Climbed
     The U.S. trade deficit probably widened in January for a  third month as imports grew faster than exports, pointing to a  rebound in global economic growth, economists said before a  report today. The gap increased to $41 billion from $40.2  billion the prior month, according to the median forecast of 73  economists surveyed by Bloomberg News. Another report may show  initial claims for jobless benefits fell for a second week.
Imports may keep growing as the world's largest economy  improves and companies replenish depleted inventories. Emerging  countries are leading a worldwide recovery that, together with  a weaker dollar, is helping lift sales at companies including  Cisco Systems Inc., which may prevent the deficit from  deteriorating much more in coming months. ``Global trade is  definitely coming back,'' said David Semmens, an economist at  Standard Chartered Bank in New York. ``The U.S. will benefit  from rising exports. We can expect overseas economies to  improve faster than domestic growth.''

Emerging-Market Reserves Buildup Risks Return of `Imbalance': Chart of Day
     Developing nations' foreign reserves are approaching levels  reached two years ago, risking a return of the ``imbalances''
that helped spark the global financial crisis, Goldman Sachs  Group Inc. said. The Chart of the Day shows the five largest  foreign reserves holders in emerging markets excluding China  boosted their stockpile by 17 percent in the past year to $1.3  trillion, while the U.S. trade deficit swelled to its widest  level in a year in December. The lower panel shows China, the  world's largest reserves holder, increased its stock to a  record $2.4 trillion in 2009. The trend signals a return to the  last global economic expansion when U.S. consumers relied on  borrowing from abroad to finance their purchases, contributing  to an export boom from Asia. As China and other Asian nations  accumulated dollars from trade surpluses, they bought U.S.
Treasury debt and depressed global yields. Lower borrowing  costs helped fuel the U.S. housing and credit booms that turned  to bust in 2007. ``There's a risk the world could lapse back  into a regime in which emerging markets return to export-led  growth coupled with an accumulation of reserves,'' Goldman  Sachs economists led by London-based Jim O'Neill wrote in a  research note yesterday. ``To the extent that global imbalances  are making a comeback, they need to be taken seriously. The  bottom line is that the accumulation of reserves may have  helped create the problem that they ultimately helped to  solve.''

Senate Negotiations Said to Advance on Consumer Division Powers, Oversight
     Senate negotiators closed in on a deal for strengthening  consumer financial protections, giving bank regulators a role  in rule-making and enforcement, two Democratic Senate aides  briefed on the talks said. The talks have advanced on key  sticking points, including how much control prudential  regulators -- those responsible for insuring banks are  financially sound -- would have over a new consumer division at  the Federal Reserve, said the aides, who declined to be  identified because the talks are private. ``There will be a  mechanism whereby the prudential side has the ability to weigh  in to ensure we don't do anything to destabilize the safety and  soundness of our financial institutions,'' Senator Bob Corker,  a Tennessee Republican working on the legislation, told  reporters yesterday after a panel discussion at a Washington  conference. Corker and Senate Banking Committee Chairman  Christopher Dodd, in meetings over the past week, resolved some  differences over the unit's autonomy, although no final  decisions have been made. Corker said yesterday the legislation  will be introduced ``very soon'' and that the goal is to get  the measure through the banking committee by March 29, when the  Easter recess begins.

Ex-Bank of America Executives Win Dismissal of Some SEC Claims on Appeal
     Two former Bank of America Corp. executives won dismissal  of claims by securities regulators that they could be held  liable for allegedly false statements made to clients of the  bank's Columbia Management Group unit. The U.S. Court of  Appeals in Boston yesterday upheld a lower court's ruling  throwing out the claims against James Tambone, former  co-president of fund distribution at the bank's Columbia unit,  and Robert Hussey, a former sales executive. The U.S.
Securities and Exchange Commission sued the men in 2006,  claiming they gave clients literature saying Columbia's mutual  funds avoided rapid mutual-fund trades, a practice known as  market timing. The SEC said Tambone and Hussey knew the funds  engaged in the practice, which can hurt long-term shareholders.
The panel rejected the SEC's argument that the two were liable  even if the false statements were created by others because, by  directing the fund sales, they implied the prospectus documents  were truthful.

Naked Credit-Default Swaps Crackdown in Europe Rings Hollow Without U.S.
     European politicians and regulators could initiate a  continent-wide ban on speculative trading of sovereign  credit-default swaps tomorrow. Making it stick without the  Americans won't work. New York and London dominate swaps  trading, and both have resisted greater regulation. Last year,  U.S. regulators and Congress rejected a proposed ban on buying  credit-default swaps without owning the underlying debt. Adair  Turner, chairman of the U.K. Financial Services Authority, said  yesterday that these so-called naked swaps weren't the ``key  driver'' of the Greek debt crisis and it would be wrong to rush  to ban them. ``You need to get the U.S. on board, otherwise the  effect will be minimal because trading will simply move  elsewhere,'' said Jan Hagen, head of the financial services  group at the European School of Management and Technology in  Berlin. ``A ban would allow European politicians to tell voters  at least they're doing something.'' The European Union's top  regulatory official, European Commission President Jose  Barroso, said March 9 that the 27- nation bloc will consider  banning ``purely speculative naked'' credit-default swaps after  German Chancellor Angela Merkel and French President Nicolas  Sarkozy called for a crackdown on derivatives trading to  prevent a rerun of the Greek crisis.

Union Investment Favors Lebanon, South Africa Bonds on Local Bank Support
     Union Investment Privatfonds, Germany's third-largest money  manager, favors bonds sold by developing nations with active  local investors in foreign debt on concern the global  new-issues market will be ``overcrowded.'' The company with  $250 billion in assets will consider purchasing notes due to be  offered by Israel, Egypt and Mongolia in the coming weeks or  months, said Sergey Dergachev. The Frankfurt-based investor,  who helps oversee $6 billion of emerging-market debt, bought  securities sold by Lebanon and South Africa this month, he said  in an interview late yesterday. ``The pipeline risks being  overcrowded,'' Dergachev said. ``Sovereigns with solid  macroeconomic metrics, solid support from the local investor  base and which aren't frequently traded, limit the sell-off  risk,'' he said. Developing nations have raised $24.5 billion  from overseas debt sales this year as of yesterday, according  to data compiled by Bloomberg. That's the busiest start to a  year since emerging- market sovereign issuers borrowed $34  billion over the same period in 2005. Iran and Poland are among  at least 10 countries seeking about $7.6 billion of funding in  the coming months.

Shun Spain's Bonds on `Death by 1,000 Cuts,' Invesco, Merrill Lynch Say
     Investors should avoid Spain's bonds as the euro region's  highest levels of joblessness stifle the country's ability to  cut its budget deficit, according to Invesco Ltd. and Bank of  America Corp.'s Merrill Lynch unit. Spanish debt isn't yielding  enough to compensate investors for buying the bonds of a  country with the euro region's third- largest budget deficit,  according to Axel Blase, a fund manager in Frankfurt at  Invesco. Investors receive a 70 basis-point yield premium for  holding Spanish 10-year bonds rather than German bunds,  compared with 310 basis points for Greek debt. ``It's not a  time to increase exposure to Spain,'' said Blase, who helps  oversee the company's $423 billion in assets. ``The country is  in rather serious difficulties and the risk premium on Spanish  bonds isn't that attractive.'' Concern that Europe's most  recession-battered nations aren't doing enough to contain their  deficits sent Greek bond yields to the highest in more than a  decade, and helped push the euro 4.7 percent lower against the  dollar this year. While attention focused initially on Greece,  Spain may take years to recover from the recession, according  to Johan Jooste, a strategist at Merrill Lynch Wealth  Management in London.

Latvia Elections May Hamper Austerity, Weigh On Credit Rating, Fitch Says
     Latvian elections this autumn threaten to hamper government  efforts to push through austerity measures vital to its  international bailout, burdening the country's credit rating,  Fitch Ratings said. A parliamentary election scheduled for  October ``weighs on the rating, the uncertainty that comes with  the election, and I think there might be resistance to removing  the negative outlook because of that risk,'' Eral Yilmaz, a  credit analyst at Fitch, which ranks Latvian debt as junk, said  in an interview. Prime Minister Valdis Dombrovskis, who came to  office a year ago amid the former Soviet state's worst economic  crisis since it abandoned communism two decades ago, has pushed  through the toughest austerity package in the European Union to  comply with the terms of an International Monetary Fund-led  rescue. Fitch, which rates Latvia's debt BB+, wants to see  sustained signs of recovery before considering an upgrade,  Yilmaz said. ``Cuts may become politically more difficult from  now on as the public may want to see the results of the fiscal
belt- tightening in an economic recovery that results in job  creation,'' she said.

Japan's 10-Year Bonds Fall, End Two-Day Gain, as Rising Stocks Sap Demand
     Japan's 10-year bonds declined, snapping two days of gains,  as rising stocks sapped demand for the refuge of government  debt. Ten-year yields also climbed from the lowest level in  more than a week after Nikkei English News reported the  Japanese government is expected to upgrade its overall view of  the economy for the first time since July 2009. The government  sold 2.4 trillion yen ($26.5 billion) in five-year notes today.
``Market participants had a short bias because of the strong  stocks,'' said Takafumi Yamawaki, a senior strategist in Tokyo  at BNP Paribas Securities Japan Ltd., a unit of France's  largest bank. The yield on the 1.4 percent security maturing in  March 2020 increased two basis points, or 0.02 percentage  point, to 1.32 percent as of 4:57 p.m. in Tokyo at Japan Bond  Trading Co., the nation's largest interdealer debt broker. The  price fell 0.178 yen to 100.706 yen.

Japanese Bond Risk Index May Decline on Kawasaki Kisen's Exit, Mizuho Says
     The Markit iTraxx Japan index of credit-default swaps, a  benchmark for corporate bond risk, may fall March 23 if  Kawasaki Kisen Kaisha Ltd. and Shimizu Corp. cease to be  members, according to Mizuho Securities Co. Markit Group Ltd.
published a provisional list for its Series 13 of the Japanese  iTraxx today, which shows companies that may join or leave the  London-based data company's index. Kawasaki Kisen, the  country's third-biggest shipping line by market value, and  Shimizu, the biggest general contractor, may be removed, the  list shows. The index may decline by ``around 8 basis points on  a theoretical value basis,'' Mizuho credit analyst Seiichiro  Matsumoto said in a telephone interview from Tokyo. A basis  point is 0.01 percentage point. Credit-default swap indexes are  benchmarks for protecting bonds against default and traders use  them to speculate on credit quality. The swap contracts pay the  buyer face value in exchange for the underlying securities if a  borrower fails to meet its debt agreements, and a drop shows  improvement in perceptions of creditworthiness.

     For the complete stories summarized here, and for more of the day's top news, see TOP .

-0- Mar/11/2010  8:29 GMT
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(BN) Top Stories: Currencies

Top Stories: Currencies
2010-03-11 08:15:45.721 GMT


     March 11 (Bloomberg) -- The following are the day's top stories on currencies:

Yen, Dollar Strengthen as China Inflation at 16-Month High; Kiwi Weakens
     The yen and dollar rose versus their major counterparts  after Chinese reports on inflation, factories and loans fueled  concern the government will act to damp growth, boosting demand  for the lowest-yielding currencies. Japan's currency  strengthened from a two-week low against the euro after Chinese  inflation reached a 16-month high and on speculation exporters  brought funds home before the fiscal year ends this month. New  Zealand's dollar fell for a second day versus the greenback as  the central bank signaled a slower exit from stimulus measures.
South Korea's won slid on a media report the nation's largest  power company purchased dollars. ``Strong inflation data should  enhance pressure for tightening in China,'' said Minoru  Shioiri, chief manager of foreign-exchange trading in Tokyo at  Mitsubishi UFJ Securities Co., unit of Japan's largest publicly  traded bank by market value. ``The bias is for the yen to  rise.'' The yen rose to 123.26 per euro as of 6:58 a.m. in  London from 123.62 in New York yesterday, when it fell to  124.00, the weakest since Feb. 23. Japan's currency advanced to
90.38 per dollar from 90.52. The dollar climbed to $1.3636 per  euro from $1.3657, and advanced to $1.4961 per pound from  $1.4978.

Dollar to Keep Reserve Role If Markets Stay Sound, Standard & Poor's Says
     The dollar will retain its status as the world's reserve  currency as long as U.S. financial markets are sound and  government spending is sustainable, Standard & Poor's said. The  greenback is ``the world's most accepted currency,'' even after  the global recession that began in the U.S., John Chambers,  chairman of the S&P sovereign ratings committee, wrote in a  report released today. The dollar supports the nation's top AAA  credit ranking, improves the government's access to external  financing and helps lower borrowing costs, he wrote. ``The  dollar's widespread acceptance stems from the U.S. economy's  fundamental strength, which in our view comes from the  economy's size and the flexibility of labor and product  markets,'' New York-based Chambers wrote with David Beers,  global head of sovereign ratings at S&P in London. ``We view  U.S. banking and capital markets to be dynamic and unfettered  relative to their peers.'' Pacific Investment Management Co.,  the world's biggest manager of bond funds, said in its August
2009 Emerging Markets Watch report the dollar's reserve status  was endangered as the government pumped ``massive'' amounts of  money into the economy to stimulate growth.

Trade Deficit in U.S. Probably Widened for Third Month as Imports Climbed
     The U.S. trade deficit probably widened in January for a  third month as imports grew faster than exports, pointing to a  rebound in global economic growth, economists said before a  report today. The gap increased to $41 billion from $40.2  billion the prior month, according to the median forecast of 73  economists surveyed by Bloomberg News. Another report may show  initial claims for jobless benefits fell for a second week.
Imports may keep growing as the world's largest economy  improves and companies replenish depleted inventories. Emerging  countries are leading a worldwide recovery that, together with  a weaker dollar, is helping lift sales at companies including  Cisco Systems Inc., which may prevent the deficit from  deteriorating much more in coming months. ``Global trade is  definitely coming back,'' said David Semmens, an economist at  Standard Chartered Bank in New York. ``The U.S. will benefit  from rising exports. We can expect overseas economies to  improve faster than domestic growth.''

El-Erian Says World Economy May Face Disruptive Sovereign Debt Imbalances
     Mohamed A. El-Erian, whose company runs the world's biggest  mutual fund, said deteriorating public finances may affect the  global economy more than is currently realized. ``The  importance of the shock to public finances in advanced  economies is not yet sufficiently appreciated and understood,''
El-Erian, co-chief investment officer at Pacific Investment  Management Co., wrote in an article on the Financial Times Web  site. The potential damage from increased government borrowings  is ``at present being viewed primarily -- and excessively --  through the narrow prism of Greece.'' Governments may have to  raise taxes and slash spending to cope with swelling deficits  after borrowing unprecedented amounts to stave off the global  financial crisis, said El-Erian, 51, who shares his job title  with Bill Gross. A failure to carry out fiscal measures in time  would raise the possibility of governments seeking to eliminate  excessive debt through inflation or default, he said. Pimco has  said debt strains in Greece, Portugal and Spain underscore its  view that 2010 will be a year of slower-than- average growth,  and predicts there will be a shrinking global role for the U.S.
economy.

Emerging-Market Reserves Buildup Risks Return of `Imbalance': Chart of Day
     Developing nations' foreign reserves are approaching levels  reached two years ago, risking a return of the ``imbalances''
that helped spark the global financial crisis, Goldman Sachs  Group Inc. said. The Chart of the Day shows the five largest  foreign reserves holders in emerging markets excluding China  boosted their stockpile by 17 percent in the past year to $1.3  trillion, while the U.S. trade deficit swelled to its widest  level in a year in December. The lower panel shows China, the  world's largest reserves holder, increased its stock to a  record $2.4 trillion in 2009. The trend signals a return to the  last global economic expansion when U.S. consumers relied on  borrowing from abroad to finance their purchases, contributing  to an export boom from Asia. As China and other Asian nations  accumulated dollars from trade surpluses, they bought U.S.
Treasury debt and depressed global yields. Lower borrowing  costs helped fuel the U.S. housing and credit booms that turned  to bust in 2007. ``There's a risk the world could lapse back  into a regime in which emerging markets return to export-led  growth coupled with an accumulation of reserves,'' Goldman  Sachs economists led by London-based Jim O'Neill wrote in a  research note yesterday. ``To the extent that global imbalances  are making a comeback, they need to be taken seriously. The  bottom line is that the accumulation of reserves may have  helped create the problem that they ultimately helped to  solve.''

Senate Negotiations Said to Advance on Consumer Division Powers, Oversight
     Senate negotiators closed in on a deal for strengthening  consumer financial protections, giving bank regulators a role  in rule-making and enforcement, two Democratic Senate aides  briefed on the talks said. The talks have advanced on key  sticking points, including how much control prudential  regulators -- those responsible for insuring banks are  financially sound -- would have over a new consumer division at  the Federal Reserve, said the aides, who declined to be  identified because the talks are private. ``There will be a  mechanism whereby the prudential side has the ability to weigh  in to ensure we don't do anything to destabilize the safety and  soundness of our financial institutions,'' Senator Bob Corker,  a Tennessee Republican working on the legislation, told  reporters yesterday after a panel discussion at a Washington  conference. Corker and Senate Banking Committee Chairman  Christopher Dodd, in meetings over the past week, resolved some  differences over the unit's autonomy, although no final  decisions have been made. Corker said yesterday the legislation  will be introduced ``very soon'' and that the goal is to get  the measure through the banking committee by March 29, when the  Easter recess begins.

Brown Tries to `Perversely' Benefit From U.K. Relapse Risk Before Election
     Gordon Brown is trying to turn the threat of a double-dip  U.K. recession into an advantage. The British prime minister,  whose Labour Party is narrowing the gap in opinion polls with  the opposition Conservatives, is arguing that the economic  recovery is too ``fragile'' to justify cutting the U.K.'s  record budget deficit right away. Brown is seeking a fourth  term for Labour as Britain struggles to recover from its worst  slump in six decades. While jobless claims are at the highest  since the party came to power in 1997, opinion polls show that  Brown has made up so much ground that David Cameron's  Conservatives will fail to gain a majority in the election,  which must happen by June. ``A weak economy might perversely be  good for Labour,'' Jonathan Loynes, an economist at Capital  Economics Ltd. in London, said in a telephone interview. ``To a  degree it would support the government's position that it  shouldn't try to tackle the budget deficit too quickly, and at  the same time undermines the Conservatives' position.''

Swiss Central Bank May Keep Key Rate Unchanged As Economy Gains Strength
     The Swiss central bank may leave its benchmark interest  rate near zero today to bolster a recovery from the worst  recession in more than three decades. The Swiss National Bank,  led by Philipp Hildebrand, will leave the three-month Libor  target rate at 0.25 percent at its quarterly monetary  assessment, according to all 19 economists in a Bloomberg News  survey. The central bank announces the decision at 2 p.m. in  Zurich. The SNB has held its main rate close to zero for a year  and sold Swiss francs to keep a lid on the currency and counter  the threat of deflation. While SNB board member Thomas Jordan  said last month that it's too early to start raising borrowing  costs, the central bank has already softened its tone on  currency interventions as the economy gathers strength. ``They  will continue pointing to the risks to the economy, but the  statement will be on a more positive note,'' said Fabian  Heller, an economist at Credit Suisse Group AG in Zurich, who  sees the SNB rate unchanged until ``at least'' September.
``They will maintain their language on the currency'' though  policy makers may become ``more tolerant'' of a further  appreciation over time, he said.

Shun Spain's Bonds on `Death by 1,000 Cuts,' Invesco, Merrill Lynch Say
     Investors should avoid Spain's bonds as the euro region's  highest levels of joblessness stifle the country's ability to  cut its budget deficit, according to Invesco Ltd. and Bank of  America Corp.'s Merrill Lynch unit. Spanish debt isn't yielding  enough to compensate investors for buying the bonds of a  country with the euro region's third- largest budget deficit,  according to Axel Blase, a fund manager in Frankfurt at  Invesco. Investors receive a 70 basis-point yield premium for  holding Spanish 10-year bonds rather than German bunds,  compared with 310 basis points for Greek debt. ``It's not a  time to increase exposure to Spain,'' said Blase, who helps  oversee the company's $423 billion in assets. ``The country is  in rather serious difficulties and the risk premium on Spanish  bonds isn't that attractive.'' Concern that Europe's most  recession-battered nations aren't doing enough to contain their  deficits sent Greek bond yields to the highest in more than a  decade, and helped push the euro 4.7 percent lower against the  dollar this year. While attention focused initially on Greece,  Spain may take years to recover from the recession, according  to Johan Jooste, a strategist at Merrill Lynch Wealth  Management in London.

Latvia Elections May Hamper Austerity, Weigh On Credit Rating, Fitch Says
     Latvian elections this autumn threaten to hamper government  efforts to push through austerity measures vital to its  international bailout, burdening the country's credit rating,  Fitch Ratings said. A parliamentary election scheduled for  October ``weighs on the rating, the uncertainty that comes with  the election, and I think there might be resistance to removing  the negative outlook because of that risk,'' Eral Yilmaz, a  credit analyst at Fitch, which ranks Latvian debt as junk, said  in an interview. Prime Minister Valdis Dombrovskis, who came to  office a year ago amid the former Soviet state's worst economic  crisis since it abandoned communism two decades ago, has pushed  through the toughest austerity package in the European Union to  comply with the terms of an International Monetary Fund-led  rescue. Fitch, which rates Latvia's debt BB+, wants to see  sustained signs of recovery before considering an upgrade,  Yilmaz said. ``Cuts may become politically more difficult from  now on as the public may want to see the results of the fiscal
belt- tightening in an economic recovery that results in job  creation,'' she said.

Kiwi Slides as Bollard Signals Rate Rises; Aussie Is Near Seven-Week High
     The New Zealand dollar fell against its 16 major  counterparts as the central bank signaled a slower exit from  stimulus measures. Australia's currency traded near a  seven-month high as full-time jobs grew for a sixth month. The  kiwi dropped as Reserve Bank Governor Alan Bollard kept the  benchmark interest rate at a record low and said weak business  spending and higher bank-funding costs may slow the pace of  future rate advances. Australian employers added 11,400  full-time workers in February in the longest stretch of monthly  gains since 2006, raising prospects of a rate increase in  April. ``Market expectations prior to the decision had been for  a 25 basis point hike in June and every meeting thereafter  until the end of the year,'' said Mike Jones, a currency  strategist at Bank of New Zealand Ltd. in Wellington. ``One of  those tightenings may now be priced out of the curve, weighing  on the New Zealand dollar.'' New Zealand's dollar dropped 0.4  percent to 69.93 U.S. cents as of 5:08 p.m. in Sydney from
70.21 cents yesterday in New York. It slid 0.5 percent to 63.19  yen.

     For the complete stories summarized here, and for more of the day's top news, see TOP .

-0- Mar/11/2010  8:15 GMT
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Top Stories: Commodities

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Top Stories: Commodities
2010-03-11 08:38:30.921 GMT


     March 11 (Bloomberg) -- The following are the day's top stories on commodities:

Copper May Advance to Record on Chinese Demand, Sucden's Goldwyn Forecasts
     Copper may rise to a record this year, possibly surpassing  $9,000 a metric ton, driven by larger- than-expected imports by  China and a revival of demand in Europe and the U.S., according  to Sucden Financial Ltd. Chinese demand will be ``positive''
for the metal used in construction and the country may import  an average of 200,000 metric tons a month, said Jeremy Goldwyn,  who oversees business development in Asia for London-based  Sucden. The West may be a ``net positive'' for copper, Goldwyn  said in an interview. Copper peaked at $8,940 a ton in July  2008, two months before the collapse of Lehman Brothers  Holdings Inc. helped to push the global economy into recession.
Stimulus spending by China, the largest metal user, helped to  more than double prices last year and a further rally would  bolster producers' profits. ``Underneath any other factors,  China needs copper,'' Goldwyn said today from Shenzhen,  Guangdong. ``Any commodity that China is short of is a good  investment in the long term,'' said Goldwyn, who's worked in  the industry for 25 years and correctly forecast in 2007 that  the price would gain to a record.

El Nino May Cut Thai Rice Output, Boost Palm Oil Price as Drought Spreads
     Rice production in Thailand, the world's largest exporter,  may decline as drier-than-normal weather curbs yields, adding  to signs that an El Nino may be hurting farm output across the  region. ``Unmilled rice output in the next crop year may fall  below the average production level of 31 million tons if El  Nino puts off rainfall,'' Prasert Gosalvitra, head of the  nation's Rice Department, said today by phone from Bangkok.
Thailand accounts for about a third of the global trade in  rice. Lower production of rice from Thailand and palm oil from  Malaysia caused by the dry weather may drive commodity prices  higher, spurring food inflation. Asian agricultural companies  including Wilmar International Ltd. may benefit from the surge,  BNP Paribas SA told investors in a note today. ``We're worried  that delayed rainfall will probably hurt output,'' Apichart  Jongskul, secretary-general of Thailand's Office of  Agricultural Economics, said today by phone. ``The impact on  the next crop has yet to be evaluated,'' Apichart said.

Japan, Korea May Face Wheat Supply Disruptions From Closure of U.S. Rivers
     Japan, the biggest buyer of U.S. wheat, may stockpile the  grain or seek alternative supplies before the U.S. closes its  largest export gateway later this year for a three-month  revamp, potentially delaying shipments. Downstream lock gates  on the Columbia River and the Snake River in the U.S. Pacific  Northwest will be repaired from mid- December through  mid-March, closing the waterways to barge traffic, said Diana  Fredlund, a spokeswoman for the Army Corps of Engineers  Northwestern Division in Portland, Oregon. The work will affect  shipments of Western White wheat, said industry groups in Japan  and South Korea. The potential supply disruption from the  world's largest exporter may affect wheat prices, which have  fallen 11 percent this year partly because of rising global  inventories. The Columbia River is the biggest wheat and barley  export gateway in the U.S. and the third-largest grain gateway  in the world, according to the Web site of Pacific Northwest  Waterways Association. ``Buyers are concerned that supplies of  white wheat may be disrupted,'' said Park Jeong Seop, deputy  general manager at the Korea Flour Mills Industrial  Association. ``They are trying to work with suppliers and  related parties to find ways to minimize any possible  disruption.''

Cattle Speculators May Herd to Exit, Ending Rally in Prices: Chart of Day
     Cattle futures may fall 6.3 percent by June as the highest  prices in 16 months encourage speculators to exit positions,  said Jim Stellakis, an independent analyst and former  strategist at Touradji Capital Management. The CHART OF THE DAY  shows net-long positions by managers of hedge and index funds  were at the highest level ever in the week ended March 2,  totaling 86,320 contracts on the Chicago Mercantile Exchange.
New positions on higher prices are ``late to the party,'' after  cattle jumped 9.6 percent this year to 94.45 cents a pound on  March 8, Stellakis said. Cattle futures may peak this month at
96 cents a pound, before dropping as low as 88 cents during May  or June, based on seasonal chart patterns followed by some  traders, Stellakis said. Cattle futures for April delivery  closed yesterday at 93.875 cents. ``Anybody long the market  between now and 96 cents should be liquidating'' their  positions, Stellakis said by telephone from New York.
``Pullback toward the 89 level should be bought, if you're  looking to get into the market longer term.''

Copper Drops in Shanghai, London on Concern China May Raise Interest Rates
     Copper declined as inflation in China gained at the fastest  pace in 16 months, fueling concern that the government and  central bank may take further steps to cool the economy,  potentially curbing demand for the metal. The June-delivery  contract on the Shanghai Futures Exchange fell 2.2 percent to  close at 59,310 yuan ($8,689) a metric ton. Copper for  three-month delivery on the London Metal Exchange dropped 1  percent to $7,363 at 3:59 p.m. Shanghai time. China's consumer  prices rose 2.7 percent from a year earlier and new loans  exceeded forecasts, figures today showed, adding to the case  for the government to cut stimulus measures. The People's Bank  of China hasn't raised benchmark interest rates since December  2007, before the financial crisis deepened. ``The CPI number  fueled speculation for interest rate hikes, possibly in the  second quarter,'' Yang Su, an analyst at Jiangsu Suwu Futures  Co., said from Nanjing today. ``That's going to damp metals  demand, especially from speculators.''

China Inflation, Production Accelerate, Adding Pressure for Stimulus Exit
     China's inflation reached a 16- month high, industrial  output climbed and new loans exceeded forecasts, adding to the  case for the government to pare back stimulus measures.
Consumer prices rose 2.7 percent in February from a year  earlier, the National Bureau of Statistics said in Beijing  today, compared with the 2.5 percent median estimate of 29  economists surveyed by Bloomberg News. Seasonal factors  stemming from a weeklong holiday may have boosted prices.
Production rose 20.7 percent in the first two months of 2010,  the most in more than five years. Premier Wen Jiabao aims to  hold full-year inflation around 3 percent after banks flooded  the financial system with money to drive a rebound from the  global recession. Gross domestic product grew 10.7 percent last  quarter and central bank Governor Zhou Xiaochuan said March 6  that anti-crisis policies, including the yuan's peg to the  dollar, must end ``sooner or later.'' ``Inflation may top the 3  percent policy target by April, which is bound to trigger  further monetary tightening,'' said Dariusz Kowalczyk, chief  investment strategist at SJS Markets Ltd. in Hong Kong. He sees  benchmark interest rates increasing as early as this month.

Corn Rises for First Time in Six Days as Cold Weather Delays U.S. Planting
     Corn rose for the first time in six sessions on concern  that cold, wet weather last month may hamper planting work in  the U.S., the world's largest exporter. Corn for May delivery  rose as much as 2.5 cents, or 0.7 percent, to $3.68 a bushel on  the Chicago Board of Trade and traded at $3.67 at 11 a.m. Seoul  time. The price fell to a one- month low yesterday after the  U.S. government said inventories before this year's harvest  will be bigger than forecast. ``Corn may not fall any further  as investors may start buying on concern over delayed  planting,'' said Han Sung Min, a broker at Korea Exchange Bank  Futures Co. in Seoul. ``The focus of the market is now moving  on to planting and new crop.'' Average temperatures last month  were 8 degrees Fahrenheit lower than normal and rainfall in  Texas was more than double the normal average, Texas AgriLife  said March 9 in a report.

Silver, Platinum Drop From Seven-Week Highs; Gold Little Changed in Asia
     Silver and platinum dropped from seven-week highs after  China's inflation and industrial output accelerated, adding  pressure on the government to pare stimulus measures. Gold was  little changed. Silver for immediate delivery lost as much as
1.2 percent to $16.8150 an ounce and was at $16.9350 at 3:02  p.m. Singapore time, while platinum dropped as much as 0.8  percent. Consumer prices in China rose 2.7 percent in February  from a year ago, the National Bureau of Statistics said today,  compared with the 2.5 percent median estimate of 29 economists  surveyed by Bloomberg News. Silver prices reached $17.6525 an  ounce, while platinum gained to $1,610.75 an ounce yesterday,  the highest levels for both metals since Jan. 21, on optimism  industrial demand will increase as the global economic recovery  gains momentum. ``Unlike gold, silver, platinum and palladium  have industrial uses so they are affected by economic growth,''
said Zhu Lv, research manager at Shanghai Tonglian Futures Co.
``Any signs of a possible slowdown in China will have an effect  on prices of these metals.''

Crude Oil Falls on Concern China May End Stimulus Spending, Slow Demand
     Crude oil fell on speculation Chinese demand will slow as  the government may end stimulus programs amid an increase in  inflation and concern that recent price gains outpaced demand  growth in the U.S. Chinese consumer prices surged 2.7 percent  in February, a 16-month high, increasing expectations the  government may end policies to fight the global recession,  which may slow economic growth. U.S. refinery utilization fell  last week for the first time in five weeks to 80.7 percent of  capacity, an Energy Department report said yesterday. ``This  should be bearish because the Chinese government might tighten  their monetary policy earlier than expected,'' said Clarence  Chu, a trader with options dealers Hudson Capital Energy in  Singapore. ``Speculators in China will cut down on their  positions.'' Crude oil for April delivery dropped as much as 59  cents, or 0.7 percent, to $81.50 a barrel, in electronic  trading on the New York Mercantile Exchange. It was at $81.59  at 3:58 p.m. Singapore time. Yesterday, the contract rose 60  cents, or 0.7 percent, to $82.09, the highest settlement since  Jan. 11.

Vale Tells China of Plan to Drop Annual Iron Ore Pricing, UC361.com Says
     Vale SA, the largest iron ore producer, told Chinese  steelmakers it plans to drop a 40-year tradition of setting  annual prices in favor of shorter contracts, according to Hu  Kai, an analyst at research company UC361.com. The Rio de  Janeiro-based company sent a note to major Chinese steelmakers,  who haven't decided what their responses will be, Hu said from  Shanghai, citing mills he didn't name. Vale will stand to win  higher sales through regular pricing after spot market rates  soared to more than double last year's contract agreement. Iron  ore producers in Australia, the biggest exporter, will make $20  billion more a year by selling products at cash levels rather  than on annual contracts, Goldman Sachs JBWere Pty said March  1. Vale is seeking to raise contract iron-ore prices by more  than 90 percent for the second quarter of 2010 in negotiations  with Japanese steelmakers, Nikkei English News reported,  without saying where it obtained the information.

Rubber Drops as China Inflation Reaches 16-Month High, Stoking Rate Fears
     Rubber declined for a third day after data showed China's  inflation climbed to a 16-month high, raising concern that the  nation may raise interest rates to cool the economy, curbing  demand for the commodity used in tires. Rubber for August  delivery on the Tokyo Commodity Exchange fell as much as 0.9  percent, reversing an earlier 1 percent gain, and settled 0.3  percent lower at 291 yen a kilogram ($3,217 a metric ton).
China's consumer prices rose 2.7 percent in February from a  year ago, the National Bureau of Statistics said in Beijing  today, compared with the 2.5 percent median estimate of 29  economists surveyed by Bloomberg. The nation's output grew 20.7  percent in the first two months of the year, adding to the case  for the government to pare back stimulus measures. ``Concern  about monetary tightening in China is the largest drag on the  price of rubber,'' said Hisaaki Tasaka, an analyst at ACE Koeki  Co., a commodity broker in Tokyo. China has the world's largest  car market and is the biggest user of rubber.

Copper Prices May Extend Advance as Stockpiles Peak: Chart of the Day
     Copper, which has more than doubled in the past year, may  extend its rally and trade close to a record in 2011 as  production fails to meet soaring Chinese demand, sending  stockpiles tumbling. The CHART OF THE DAY shows copper prices  have soared even as inventories of the metal rose to the  highest since 2004. Prices typically move in an inverse  relationship to stockpiles, which can indicate the level of  demand. Paul Cliff, a metals and mining analyst at Nomura  Holdings Inc. in London, says the correlation will resume, with  stockpiles shrinking as demand in China, the largest  copper-using nation, keeps growing. ``A supply shortage will  push prices up as inventories fall sharply through 2010 and  2011,'' Cliff said. ``We're bullish short, medium and long  term.'' Nomura predicts the copper price will average $8,818 a  metric ton in 2011 as stockpiles drop to equal 37 days of  global consumption. Stocks slid to the equivalent of 39 days in  2006, when the price jumped 44 percent. The bank's price  forecast is the highest of 15 analyst estimates compiled by  Bloomberg. Demand will exceed output by 470,000 tons in 2010  and 950,000 tons in 2011, Nomura estimates.

Hebei Steel Is Planning More Acquisitions; Says Iron Ore Talks Continue
     Hebei Iron & Steel Group, China's biggest steelmaker, is  planning more mergers and acquisitions in China and abroad as  part of a government drive to improve the country's mills. ``We  want to make further progress on mergers and acquisitions,''
Chairman Wang Yifang said at a press conference in Beijing  today, without identifying targets. The state-owned company is  in talks to buy Shijiazhuang Iron & Steel Co., Wang said March  7. The Chinese government wants to accelerate consolidation in  the steel industry to tackle overcapacity and curb pollution as  output soared to a record last year. The overcapacity is  depressing prices and hurting profitability, the China Iron &  Steel Association said. ``In Hebei, two-thirds of the  production comes from privately owned mills,'' Wang said. ``In  times of favorable market conditions, they are unwilling to be  merged.'' Hebei Steel is in contact with producers outside of  its province for possible deals, he said.

     For the complete stories summarized here, and for more of the day's top news, see TOP .

-0- Mar/11/2010  8:38 GMT
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