Post Reply
3881-3900 of 4113
The 10 Countries In The Crosshairs of The Oil Price Shock
While we all new the oil price spike was here, ECB President Jean Claude Trichet confirmed the fact this morning when he said the eurozone's central bank would be willing to raise rates to combat the " shock" as soon as next month.
But just who's in the crosshairs of this spike?
This chart from Morgan Stanley details what country's spend the most of their GDP on oil imports. And while Morgan Stanley's Spyros Andreopoulos and Joachim Fels don't think that this price rise in oil is going to crash the global economy, there are some risks if the supply shock gets more severe.
The price of oil merely acts like an elastic leash on the dog that is the global economy. If the dog surges ahead too quickly, the constricting effect of the leash will make sure it slows down – but it will not stop. Between 2003 and 2007, the real price of oil roughly doubled, with little evident harm to the global economy. But exogenous, supply- induced shocks tend to be stagflationary in nature. In the dog metaphor, an oil supply shock could act as a jerk on the leash, which could bring the dog to a halt.
South Korea and India are notable worries, with both already grappling with inflation problems.
Don't miss: The 13 companies with the most to lose from Middle Eastern chaos >
The Eight Government Programs Both Democrats And Republicans Hate
Stocks Are Making A Huge Move -- Here's A Few Reasons Why
Real quick now, a few explanations for the big move today:
FAILING UP: Christina Aguilera Books NBC's " The Voice" After Drinking Arrest
Looks like NBC is willing to take a chance on on
Christina Aguilera, new criminal record and all.
Less than 48 hours after being sprung from jail -- police held her for several hours while she was intoxicated -- Aguilera officially locked up a role as a coach/mentor on NBC's new singing competition " The Voice."
She'll join Cee-Lo Green and Adam Levine -- as well as one yet-to-be-named fourth mentor. " The Voice" will have a different format than " American Idol" -- each of the four mentors will pick and work with eight contestants throughout the show.
The network was probably willing to stick with Aguilera, despite her recent personal troubles, because of her song-belting skills. After all, Green and Levine are strong singers and successful musicians -- but on a show called " The Voice," you need someone who's known for just that.
By the way -- remember how we called for Jessica Simpson to be considered as a possible Aguilera.
The 13 Oil Companies With The Most To Lose In The Mideast Crisis
Continuing civil unrest in the Middle East has put oil producing countries like Libya at risk.
A new Citi report has identified Libya, Algeria, Egypt, Yemen and Bahrain as high-risk countries, where 1.4 mmbls/day are under threat. And there are quite a few big oil giants exposed to their production.
They include names like like Eni, BG, Apache, Hess, Total and Anadarko.
We have the whole list of who's exposed, but also who may have a lot to gain in terms of the oil price spike.
#13 ConocoPhillips (COP)
RISK: 3.4% production exposure to " high risk" countries
OPPORTUNITY: 12.08% earnings per share increase when oil rises by $10
Analysis provided by Citi. " High risk" countries include Libya, Algeria, Egypt, Yemen and Bahrain.
#12 BP (BP.L)
RISK: 5.2% production exposure to " high risk" countries
OPPORTUNITY: 11% earnings per share increase when oil rises by $10
Analysis provided by Citi. " High risk" countries include Libya, Algeria, Egypt, Yemen and Bahrain.
#11 Repsol (REP.MC)
RISK: 5.7% production exposure to " high risk" countries
OPPORTUNITY: 8.30% earnings per share increase when oil rises by $10
Analysis provided by Citi. " High risk" countries include Libya, Algeria, Egypt, Yemen and Bahrain.
#10 Anadarko Petro (APC)
RISK: 8.1% production exposure to " high risk" countries
OPPORTUNITY: 9.02% earnings per share increase when oil rises by $10
Analysis provided by Citi. " High risk" countries include Libya, Algeria, Egypt, Yemen and Bahrain.
#9 Total (TOTF.PA)
RISK: 8.5% production exposure to " high risk" countries
OPPORTUNITY: 10% earnings per share increase when oil rises by $10
Analysis provided by Citi. " High risk" countries include Libya, Algeria, Egypt, Yemen and Bahrain.
#8 Hess (HES)
RISK: 9.2% production exposure to " high risk" countries
OPPORTUNITY: 21.72% earnings per share increase when oil rises by $10
Analysis provided by Citi. " High risk" countries include Libya, Algeria, Egypt, Yemen and Bahrain.
#7 Occidental (OXY)
RISK: 9.7% production exposure to " high risk" countries
OPPORTUNITY: 12.26% earnings per share increase when oil rises by $10
Analysis provided by Citi. " High risk" countries include Libya, Algeria, Egypt, Yemen and Bahrain.
#6 Marathon Oil (MRO)
RISK: 13.6% production exposure to " high risk" countries
OPPORTUNITY: 15.36% earnings per share increase when oil rises by $10
Analysis provided by Citi. " High risk" countries include Libya, Algeria, Egypt, Yemen and Bahrain.
#5 Nexen (NXY)
RISK: 16% production exposure to " high risk" countries
OPPORTUNITY: 28.90% earnings per share increase when oil rises by $10
Analysis provided by Citi. " High risk" countries include Libya, Algeria, Egypt, Yemen and Bahrain.
#4 OMV (OMVV.VI)
RISK: 17.2% production exposure to " high risk" countries
OPPORTUNITY: 12% earnings per share increase when oil rises by $10
Analysis provided by Citi. " High risk" countries include Libya, Algeria, Egypt, Yemen and Bahrain.
#3 Apache (APA)
RISK: 22.5% production exposure to " high risk" countries
OPPORTUNITY: 15.55% earnings per share increase when oil rises by $10
Analysis provided by Citi. " High risk" countries include Libya, Algeria, Egypt, Yemen and Bahrain.
#2 BG (BG.L)
RISK: 30% production exposure to " high risk" countries
OPPORTUNITY: 14% earnings per share increase when oil rises by $10
Analysis provided by Citi. " High risk" countries include Libya, Algeria, Egypt, Yemen and Bahrain.
#1 Eni (ENI.MI)
RISK: 33% production exposure to " high risk" countries
OPPORTUNITY: 12% earnings per share increase when oil rises by $10
Analysis provided by Citi. " High risk" countries include Libya, Algeria, Egypt, Yemen and Bahrain.
Hugo Chavez Says Qaddafi Has Agreed To His Peace Proposal
Venezuelan newspaper say Qaddafi has agreed to a conflict resolution plan proposed by Hugo Chavez. The Venezuelan plan involves negotiations through an international committee.
The Arab League also supports Chavez's plan, according to Reuters.
Of course we're not sure if Chavez's plan is serious.
The two leaders are known to be huge fans of each other. Here's a quote from a recent diplomatic cable:
The two Presidents congratulated each other on their " revolutions," with Chavez asserting, " What Simon Bolivar is to the Venezuelan people, Gaddafi is to the Libyan people." Chavez also awarded Gaddafi the " Orden del Libertador," Venezuela's highest civilian decoration, and presented him with a replica of Simon Bolivar's sword. Gaddafi praised Chavez for " having driven out the colonialists," just like he had driven out those in Libya. " We share the same destiny, the same battle in the same trench against a common enemy, and we will conquer."
Also without American or UN backing this plan would achieve little. What matters is establishing an authority that is respected by both sides of Libya's escalating civil war.
CIMB stays overweight Singapore eyes STI at 3560
Lady GaGa
CIMB maintains its Overweight stance on Singapore with an STI target of 3560, implying 1.9X CY11 P/BV (slightly above mean) and 14.2X CY12 P/E (below mean).
Analyst Kenneth Ng says the Overweight position is premised on: 1) the STI’s below-mean valuations “offering a measure of defensiveness if markets continue to sell down” and “its likely relative resilience to bubbling inflation across the world.”
In the short term, CIMB expects “the volatile cocktail of social unrest, rising commodity prices and unresolved sovereign-debt concerns to cascade and play out like a domino, making for a fragile investing ground in 1H11.”
However, by 2H11, “we suspect Asia should come through better in coping with inflationary pressures than the developed world. The STI should head higher, together with Asia.”
The houses top picks are Cache Logistics (K2LU.SG), CWT (C14.SG), DBS (D05.SG), Golden Agri (E5H.SG), Genting Singapore (G13.SG), KepCorp (BN4.SG), KepLand (K17.SG), UOL (U14.SG), SembMarine (S51.SG), STX OSV (MS7.SG).
ASEAN News Summary
• India-Asean trade to grow 40 percent
India is a fast emerging as a key trading partner for the Association of South East Asian Nations (Asean), with both parties benefiting from each other’s relative strengths.
• Asean agrees on rice reserves
The 10 members of the Association of Southeast Asian Nations and their dialogue partners, China, Japan and South Korea have agreed to establish rice reserves in each country.
• Mitsubishi to invest $20billion in Indonesia
Japan’s Mitsubishi Corp. is committed to expanding its business in Indonesia and will back up that commitment with capital, the Investment Coordinating Board chief said on Wednesday.
• Nissan tie-up could help Proton
Proton Holdings Bhd’s endeavor to incorporate select technologies and manufacturing expertise from Nissan Motor Co could lead to potential cost savings in capital expenditure and research and development (R& D) for the national carmaker.
• Philippines central bank hints interest rate hike
The Philippines Central Bank, Bangko Sentral ng Pilipinas (BSP), on Wednesday took on a more hawkish stance, signaling a possible increase in its record-low interest rates in the near term amid concerns over rising inflation.
• Thai government to divest private holdings
Another piece has been added to help Thailand’s government achieve a balanced budget in 2016, with the cabinet’s approval March 1 for the finance ministry to divest its stakes in more than 60 non-listed private companies – including Boon Rawd Brewery and Bangkok Broadcasting Television (BBTV).
• Government minister scrutinized for AIS move
Information and Communications Technology (ICT) Minister Juti Krairiksh has come under fire from industry watchers for floating a plan to sell the mobile business of Advanced Info Service (AIS) to a group of foreign telecom giants if compensation negotiations fail.
• Soft drink war fizzles
The long dispute between PepsiCo and its local bottler Serm Suk Plc (SSC) ended yesterday with the US beverage giant softening its tough stance and agreeing to amend its bottling contract with the Thai company.
Get the best in ASEAN News at www.aseanaffairs.com
POLITICS IN 60 SECONDS: What You Need To Know Right Now
Good morning! Here's what you need to know:
1. A gunman yesterday opened fire on a bus carrying US Air Force personnel outside Frankfurt, Germany's International Airport, killing two and wounding two others. The suspect was described as a " devout Muslim."
2. Islamic extremists shot dead the most senior Christian in Pakistan's national government. A message left at the scene of the murder promised that other members of the Pakistan government would be next.
3. Rebels in Libya, fighting off a key offensive by forces loyal to Col. Muammar Qaddafi, called for foreign airstrikes. Senior US defense officials threw cold water all over the idea.
4. President Felipe Calderón is in Washington today to meet with President Barack Obama. Spiraling violence in Mexico's drug war has frayed ties between the two allies.
5. Federal Reserve Chairman Ben Bernanke yesterday said that efforts to balance state and local governments will likely bring some stability to the muni market. At the same time, he warned that fiscal repair is " far from complete." 
6. What happens when the Fed stops printing money? No one really knows. But Fed Chairman Bernanke is pivoting toward the eventual end of the stimulus program.
7. The municipal bond market has remained relatively calm despite the political battles rocking state capitals. The selloff panic of late last year appears to have subsided, at least for now.
8. Amid huge protests, the Ohio State Senate passed a bill Wednesday that would sharply limit negotiating rights for public-sector employees. The legislation is expected to pass the state House next week.
9. Democratic Sen. Daniel Akaka will retire in 2012. The 86-year-old junior senator from Hawaii has held the seat since 1990.
10. Nearly 10% of all Medicare payments are fraudulent, according to a new GAO report. The study says that regulators aren't doing enough to stop the improper payments, which are costing the government $48 billion on an annual basis.
10 Things You Need To Know Before The Opening Bell
Good morning. Here's what you need to know:
- Asian markets were mixed in overnight trading, with the Shanghai Composite down 0.34%. Major European indices are all higher this morning, and U.S. futures indicate a positive open.
- The ECB is expected to hold its key interest rate steady at its 7:45 AM ET announcement. Members are likely to talk more hawkishly, however, on the threat of inflation throughout the eurozone.
- Buyers are lining up to bid Citigroup's consumer finance division, valued at $2 billion. The bidders include Santander and BlackRock.
- Bonus: Beyonce says she's donated the money she received from Libyan leader Muammar Qaddafi for a performance to Haiti " over a year ago."
many " banana money" (us dollars) in the market. how the interest will not fall?
should
* they increase bank reserve ratio.
* hike bank interest rate to encourage saving.
PREDICTION: After QEII Ends, Interest Rates Will Fall, Not Rise
Since it's early, and it's quiet, we figured we would make a prediction.
Yesterday, Bill Gross asked: Who will buy Treasuries when the Fed stops?
The implication is that maybe nobody will show up to the auction, and interest rates will surge. Here's a good rebuttal to the idea that nobody will show up.
But we'll make a prediction. A month after QEII ends, interest rates on the 10-year will be lower, not higher than they were on June 30, 2011 .
The reason is that a key reason rates have gone up is the huge gain in risk assets (like stocks) and thus the need for Treasury yields to catch up. If QEII ends, and the asset inflation tapers off, then yields can fall as they always do.
As a reminder, here's a 10-year look at the S& P 500 vs. the 10-year rate.
oil spike, did kill economy. proven in past cycle. mid east last time tighten the oil tap becos of economy meltdown resulted in gobal recession. two years from there was just a mild recovery, in short, a techical rebound. seems to be a more choppy and stormy journey ahead.
Factors:
*OPEC reduce oil quotas becos price slide below usd55, which would be unprofitable and expensive for driller to drill oil.
* spike in oil price hurt oil refinery industries as they need more $ to purchase oil, hence pass down the cost to consumers.
* Economy just pickup from scrap, and not even into recovering. All those control measures were still firmly in place.
* tightening of monetary measures were not heard eventually as the gobal economy remains fragile.
* should monetary tightens, the most likely result would be a double dips recession.
* ppl are not buying but exiting from previous investments since the worst ever finanical meltdown of the century happened.
* stricter investment regulations had stop and discouraging ppl from putting money in hope of growth.
** afterall, the economy still remains fragile, likely to be burst in two years time.
IT'S DIFFERENT THIS TIME: Why Higher Oil Prices Won't Kill The Economy
This Time Is Different is the title to Morgan Stanley's latest Global Monetary Analyst report, which argues that this time the oil spike won't have a big dampening effect on the economy.
Why?
Strategists Spyros Andreopoulos and Joachim Fels make a few arguments.
Here are a couple.
The first is that oil's intensity of global GDP continues to decline.
But then also this point:
Oil exporters will likely spend more of the wealth transfer than usual: With the risk of social unrest increasing, governments will be inclined to increase spending and transfers in order to maintain stability. This suggests that a larger part of the initial wealth transfer from net exporters to net importers will be reversed, over time, through goods imports of the former from the latter.
HK stocks hold onto gains as H shares, banks advance
HONG KONG, March 3 (Reuters) - Hong Kong stocks finished slightly higher on Thursday, helped in part by short-covering and buying in Chinese banking shares ahead of earnings reports from the sector later this month.
The Hang Seng Index < .HSI> ended up 0.32 percent at 23,122.42, paring some gains after advancing 1 percent by the midday trading break.
The Shanghai Composite Index < .SSEC> slipped 0.37 percent into the close after trading higher for most of the day as weakness in coal-related counters weighed.
HIGHLIGHTS:
* Standard Chartered Plc < 2888.HK> rose 4.4 percent after an Asia-fueled boom sent annual profit to a record. The bank, which saw India becoming its largest market last year, said profit jumped 19 percent in 2010. [ID:nSGE72200B]
* The main H-share gauge of Hong Kong-listed Chinese companies, the China Enterprises Index < .HSCE> outperformed on the day, rising 1.21 percent as investors bought into attractively valued mainland banking shares on optimism over earnings.
* The Hang Seng Index failed to cross a downward trend line established since the benchmark's January peak of 24,434.4 prompting some institutions to keep short positions intact and bet on further weakness.
DAY AHEAD:
In earnings, The materials sector will be in focus with fourth-quarter results expected from Zhaojin Mining Industry Co Ltd < 1818.HK> and cement producer China Resources Cement Holdings Ltd < 1313.HK> .
Investors will be also be closely watching for significant policy announcements from major government meetings that began on Thursday.
In the United States, payrolls data on Friday will follow initial jobless claims number for February, expected later on Thursday. (Editing by Chris Lewis) (vikram.subhedar@thomsonreuters.com +852 2843 6975 Reuters Messaging: vikram.subhedar.reuters.com@reuters.net))
Won strengthens as oil decline whets funds' appetite
* Won up 0.8 pct on offshore funds sale, rate hike views
* Weaker oil seen supporting emerging Asian currencies
* Dollar-buying intervention spotted from MAS, BI, BNM (Updates with text, prices)
By Jongwoo Cheon
SINGAPORE, March 3 (Reuters) - The South Korean won led emerging Asian currencies higher on Thursday, helped by a sharp decline in oil prices that led to increased foreign flows into regional equity markets.
Brent crude slid more than $3 as dealers anticipated a possible peace deal in Libya brokered by OPEC-member Venezuela, a signal for funds to re-enter bets on emerging Asian currency strength after the oil-induced volatility of the past few weeks.
Even after the decline in oil prices though, front-month Brent is up nearly $20 so far this year, suggesting that Asian policymakers will be under pressure to let their currencies rise and help mitigate pressures.
" Central banks will remain hawkish and lower oil price represent better risk appetite, so overall they should still be supportive for Asian FX," said Frances Cheung, a strategist at Credit Agricole CIB in Hong Kong.
The won's gains on the day were a bit of catch up with other emerging Asian currencies that have benefited from perceptions of policy credibility, such as the Indonesian rupiah.
Central banks in Malaysia, Indonesia and Singapore were spotted buying dollars to check the speed of gains in their currencies, dealers said.
WON
Dollar/won lost 0.8 percent to 1,119.3, the lowest since Feb 21 as offshore funds, including macro funds, hedge funds and model funds sold the dollar.
Dollar/won also came under pressure on revived expectations that the Bank of Korea will raise interest rates this month on stronger-than-expected economic data.
" Rate hike views are growing firmer after CPI data and selling interest is also getting stronger," said a local bank dealer in Seoul.
But importers bought dollars for settlements around 1,120, limiting falls in dollar/won.
SINGAPORE DOLLAR
Dollar/Singapore dollar hit a record low despite dollar-buying intervention was spotted.
Investors remain confident the MAS will allow further strength in Singapore dollar and comfortable with short positions in the pair.
Dollar/Singapore dollar stayed heavy, despite agent names sitting at the base at 1.2680 level. Traders are targeting the 1.2500 objective.
TAIWAN DOLLAR
Dollar/Taiwan dollar fell on exporters' sales for settlements but trading was thin before rate decision of the European Central Bank and U.S. job data later in the day.
CURRENCIES VS U.S. DOLLAR Change on the day at 0750 GMT Currency Latest bid Previous day Pct Move Japan yen 81.89 81.85 -0.05 Sing dlr 1.2680 1.2693 +0.10 Taiwan dlr 29.541 29.665 +0.42 Korean won 1119.50 1128.20 +0.78 Baht 30.49 30.52 +0.10 Peso 43.37 43.49 +0.29 Rupiah 8805.00 8810.00 +0.06 Rupee 44.96 44.94 -0.04 Ringgit 3.0305 3.0345 +0.13 Yuan 6.5691 6.5727 +0.05
Change so far in 2011 Currency Latest bid End prev year Pct Move Japan yen 81.89 81.15 -0.90 Sing dlr 1.2680 1.2820 +1.10 Taiwan dlr 29.541 30.368 +2.80 Korean won 1119.50 1134.80 +1.37 Baht 30.49 30.14 -1.15 Peso 43.37 43.84 +1.10 Rupiah 8805.00 9005.00 +2.27 Rupee 44.96 44.70 -0.58 Ringgit 3.0305 3.0820 +1.70 Yuan 6.5691 6.5897 +0.31 (Additional reporting by Faith Fung in TAIPEI and Catherine Tan of IFR Markets Editing by Tomasz Janowski)
For the new Reuters scrolling global forex service please click
Double click on brackets for following items:
Asian currencies Asian currencies in Asia
Malaysian ringgit Indonesian rupiah
Singapore dollar Thai baht
Taiwan dollar Hong Kong dollar
Philippine peso Korean won
SPEED GUIDES
Exotic currencies Non-G7 currencies
RELATED NEWS AND OTHER TOPICS
All Singapore news All Malaysian news
Thailand Indonesia Hong Kong Taiwan
Philippines Korea All emerging markets
All foreign exchange news
Foreign exchange technical analysis [FRX& INSI] (Editing by Tomasz Janowski)
2011-03-03 17:03:16
SE Asia Stocks-Mostly higher but in low volume airlines firm
* Airline stocks rise as oil dips energy-linked sectors hit
* Plantation shares up as palm oil prices rise
* Fund flows mixed Indonesia sees inflows
By Viparat Jantraprap
BANGKOK, March 3 (Reuters) - Southeast Asian stock markets rose on Thursday as oil dipped and some investors took heart from news of a peace plan for Libya, with airlines in particular seeing strong demand.
But volume across the region was relatively weak as many investors preferred to wait and see what happened to the peace plan. The energy-driven Thai stock market saw turnover drop to 0.8 times its 30-day average and oil-linked shares dropped.
Share markets ended off their day's highs, with Singapore, Malaysia, Indonesia and Thailand posting only small gains on the day.
Oil prices briefly dropped by more than $3 after the Arab League said a peace plan for Libya was under consideration, before recovering.
" There's still uncertainty. It's an excuse to buy the oversold region and investors took the view that the situation will not drag on for too long," said Warut Siwasariyanon, head of investment advisory at Finansia Syrus Securities in Bangkok.
" Apart from the oil price fall, there's also positive economic guidance from U.S. stock markets that gave support to Asia," he said.
Unrest in the Middle East and North Africa has driven the recent oil price rise, clouding the outlook for the earnings of Southeast Asian companies and triggering risk aversion.
Fund flows were mixed on the day, with Indonesia reporting inflows of $35.2 million and the Philippines having outflows of $3.1 million, according to Thomson Reuters data.
Malaysia had $40 million in outflows and Thailand posted $56 million in outflows, exchange data showed.
The Philippine share index rose 1.6 percent, climbing at one point to its highest in more than a week. Bucking the trend, Vietnam fell 1.2 percent to the lowest in almost three months.
Positive U.S. economic news helped lift most Asian stock markets on Thursday, with the MSCI index of Asia-Pacific stocks outside Japan up 0.8 percent.
Thailand's national carrier, Thai Airways International, surged 7.2 percent, Malaysia's AirAsia climbed 2.5 percent and Singapore Airlines, Southeast Asia's biggest airline, rose 0.8 percent.
Energy-linked stocks were among sectors to suffer. Thai oil exploration firm PTT Exploration and Production lost 2.5 percent and PT Indo Tambangraya Megah, Indonesia's third-biggest coal miner, slumped 4.8 percent.
Palm plantation stocks were among bright spots as Malaysian palm oil futures rose to a one-week peak on Thursday, buoyed by a potential import tariff cut in top consumer China.
Shares in Wilmar International, the world's largest listed palm oil company, gained 1.8 percent and Golden Agri-Resources climbed 2.2 percent. (Editing by Alan Raybould)
2011-03-03 18:28:47
Key political risks to watch in Nigeria
By Nick Tattersall
LAGOS, March 1 (Reuters) - Nigerian President Goodluck Jonathan is seen as the front-runner in April elections but the ruling party will face a tougher battle maintaining its strong parliamentary majority and regional dominance.
Preparations so far for the general elections give grounds for cautious optimism that the polls could be more credible and less violent than previous votes in Africa's most populous nation, although the toughest challenges still lie ahead.
Jonathan, a southerner, faces resistance from areas including parts of the Muslim north but campaigning in the presidential race has been largely free of the sort of rhetoric that could polarise the electorate around regional rivalries.
State and parliamentary polls are likely to be more closely fought. There has already been localised election-related violence, including in the oil-producing Niger Delta, the central " Middle Belt" and the remote northeast.
Key pieces of legislation, including oil sector reforms and the creation of a sovereign wealth fund, are sitting before parliament but with political minds focused on campaigning, it is unclear whether they will be passed before the polls.
Government spending has risen ahead of the elections, putting pressure on foreign reserves and weighing against efforts to drag inflation into single digits. A draft 2011 budget has yet to be approved by lawmakers.
The outlook for the capital markets is rosier.
Nigeria successfully launched a debut $500 million Eurobond in January as investors shrugged off near-term risk and the banking sector is emerging from crisis, with a state bad bank set to absorb all non-performing loans by the end of March.
Investment in parts of the real economy has continued apace with several global consumer goods firms announcing expansion plans. Potential investors in the planned privatisation of the power sector, key to ending chronic electricity shortages, are proving more cautious until the political picture is clearer.
ELECTIONS
Jonathan's victory at the primaries makes him the favourite to win the April 9 presidential election. The ruling People's Democratic Party (PDP) has won every poll since military rule ended in 1999.
His defeated main PDP rival, former Vice President Atiku Abubakar, initially questioned the conduct of the primary but has since said he will not go to court to challenge the outcome.
His main opposition challenger is Muhammadu Buhari, running on the Congress for Progressive Change (CPC) platform, a former military ruler who is hoping to capitalise on opposition to Jonathan from the Muslim north.
Jonathan's candidacy is controversial because it interrupts a pact within the PDP that power should rotate between north and south every two terms. Some in the party and in the opposition say only a northerner should be president this time around.
But billionaire businessmen and some former northern rivals have joined his campaign, including Kwara state governor Bukola Saraki, a northern challenger at the primaries now in charge of a " reconciliation committee" in the party.
Ibrahim Shekarau, governor of the northern state of Kano, and former anti-corruption chief Nuhu Ribadu are also running, although they are relative political lightweights and their chances of success are seen as limited, particularly if the opposition fails to form an anti-PDP alliance.
Under the constitution, an election victor must secure at least a quarter of the votes in at least two thirds of the country's 36 states and the capital Abuja.
Opposition parties are hoping their respective strengths in parts of the north and the southwest could prevent Jonathan from doing this, forcing a second round, which has to be held within a week and would most likely pit Jonathan against Buhari.
The Independent National Electoral Commission (INEC) says it has registered 67.8 million voters in a process which, although marred by some technical difficulties, has generally been judged by observers to bode well for polling itself.
What to watch:
-- Any signs of an alliance between opposition parties against the PDP.
-- Any challenges to the credibility of the new voter lists.
NATIONAL SECURITY
Parliamentary elections and state governorship polls are due to be held a week either side of the presidential vote and are more likely to cause localised instability.
Five of Nigeria's powerful PDP state governors won a court ruling in February which could prevent them having to stand for re-election. The five argued that their states should be exempted from governorship votes because they had not yet completed full four-year terms.
The decision could be challenged but, as it stands, means the PDP may avoid some of the fiercest state contests.
Flashpoints include Bayelsa state in the Niger Delta, where a bitter rivalry between state governorship candidates Timi Alaibe, a former presidential adviser, and incumbent Timipre Sylva has already triggered violence.
Several hundred have died in ethnic and religious clashes in Plateau state in the central Middle Belt since December, violence likely to intensify ahead of the polls.
And in the remote northeast, a wave of killings of police and local leaders by militant Islamist sect Boko Haram has increasingly targeted election officials. One of Borno state's main governorship candidates was gunned down.
Those responsible for a bomb in Abuja on New Year's Eve have still not been identified and there is concern that there could be further such attacks in the run-up to elections if, as widely assumed, the attack was meant to undermine Jonathan.
Jonathan in January named an anti-terrorism co-ordinator and a new adviser for the Niger Delta, a sign he is seeking to tackle national security concerns head on.
There have been several kidnappings at sea off the coast of the Niger Delta, but recent violence onshore has centred around local elections rather than targeting the oil and gas industry, a picture seen as unlikely to change for now.
What to watch:
-- Challenge to the court ruling stopping governorship elections in some states
-- Further localised acts of electoral violence
POLICY AND SPENDING
The political uncertainty also means major pieces of policy -- and the multi-billion dollar investment decisions that hinge on them -- are likely to be on hold until after the elections.
Arguably the biggest is the Petroleum Industry Bill, which will re-write Nigeria's decades-old relationship with foreign oil firms and redefine the fiscal and legal framework governing investment, including in its key offshore fields, expected to yield most of its future production growth.
The government has vowed the bill will pass within weeks, a message it has given before. Should it fail to do so, a new parliament could set the process back once again, particularly if the ruling party has a slimmer majority.
Potential investors in the planned privatisation of the domestic power sector, one of the cornerstones of President Jonathan's campaign, are also unlikely to go beyond statements of interest until the elections are over.
Government spending has been rising in the run-up to elections. Government borrowing had increased around 50 percent by late 2010, dwarfing private sector credit growth of just 3 percent in the year.
Foreign exchange reserves have started to stabilise but remain nearly a quarter below year-ago levels, although oil prices and production are rising.
The excess crude account, into which Nigeria saves windfall oil income, has dropped to $300 million from $20 billion at the start of the presidential term in 2007.
Jonathan presented a 4.2 trillion naira ($28 bln) 2011 budget proposal to parliament in December, an 18 percent cut in approved spending for last year but recurrent spending -- the cost of running government -- remains high in the plans.
The IMF said in February it believed the naira was overvalued but Central Bank Governor Lamido Sanusi has rejected their logic, suggesting he will continue to defend the local currency in a tight band around 150 to the U.S. dollar.
Banking reforms, led by Sanusi, continue apace and his 5-year tenure means even a change in president is unlikely to derail them. But credit flows have yet to return, limiting growth in the real economy.
What to watch:
-- Passage, or not, of oil reforms before elections
-- Further depletion of foreign exchange reserves (For more Reuters Africa coverage and to have your say on the top issues, visit: http://af.reuters.com/ ) (Editing by Alison Williams)
2011-03-02 01:52:28
SE Asia Stocks-Mostly higher but in low volume airlines firm
* Airline stocks rise as oil dips energy-linked sectors hit
* Plantation shares up as palm oil prices rise
* Fund flows mixed Indonesia sees inflows
By Viparat Jantraprap
BANGKOK, March 3 (Reuters) - Southeast Asian stock markets rose on Thursday as oil dipped and some investors took heart from news of a peace plan for Libya, with airlines in particular seeing strong demand.
But volume across the region was relatively weak as many investors preferred to wait and see what happened to the peace plan. The energy-driven Thai stock market saw turnover drop to 0.8 times its 30-day average and oil-linked shares dropped.
Share markets ended off their day's highs, with Singapore, Malaysia, Indonesia and Thailand posting only small gains on the day.
Oil prices briefly dropped by more than $3 after the Arab League said a peace plan for Libya was under consideration, before recovering.
" There's still uncertainty. It's an excuse to buy the oversold region and investors took the view that the situation will not drag on for too long," said Warut Siwasariyanon, head of investment advisory at Finansia Syrus Securities in Bangkok.
" Apart from the oil price fall, there's also positive economic guidance from U.S. stock markets that gave support to Asia," he said.
Unrest in the Middle East and North Africa has driven the recent oil price rise, clouding the outlook for the earnings of Southeast Asian companies and triggering risk aversion.
Fund flows were mixed on the day, with Indonesia reporting inflows of $35.2 million and the Philippines having outflows of $3.1 million, according to Thomson Reuters data.
Malaysia had $40 million in outflows and Thailand posted $56 million in outflows, exchange data showed.
The Philippine share index rose 1.6 percent, climbing at one point to its highest in more than a week. Bucking the trend, Vietnam fell 1.2 percent to the lowest in almost three months.
Positive U.S. economic news helped lift most Asian stock markets on Thursday, with the MSCI index of Asia-Pacific stocks outside Japan up 0.8 percent.
Thailand's national carrier, Thai Airways International, surged 7.2 percent, Malaysia's AirAsia climbed 2.5 percent and Singapore Airlines, Southeast Asia's biggest airline, rose 0.8 percent.
Energy-linked stocks were among sectors to suffer. Thai oil exploration firm PTT Exploration and Production lost 2.5 percent and PT Indo Tambangraya Megah, Indonesia's third-biggest coal miner, slumped 4.8 percent.
Palm plantation stocks were among bright spots as Malaysian palm oil futures rose to a one-week peak on Thursday, buoyed by a potential import tariff cut in top consumer China.
Shares in Wilmar International, the world's largest listed palm oil company, gained 1.8 percent and Golden Agri-Resources climbed 2.2 percent. (Editing by Alan Raybould)
2011-03-03 18:28:47
UK service sector growth slows, poses dilemma for BoE
* UK February services PMI falls more than expected to 52.6
* Survey suggests slow recovery after shock UK contraction
* Prices charged up for fifth month in a row, but pace eases
* Markit says index points to 0.5 percent qq GDP growth in Q1
(Adds reaction, Markit forecast for Q1 growth)
By Peter Griffiths
LONDON, March 3 (Reuters) - Growth in Britain's dominant service sector slowed sharply in February after January's weather-related bounce, a survey showed, suggesting the economic recovery may be too fragile for an early interest rate rise. February's headline services PMI index fell to 52.6 from January's eight-month high of 54.5, a peak that followed a contractionary reading in December blamed on snow. The index, compiled by Markit/CIPS, had been expected to fall to 53.5.
Investors had been betting the Bank of England would raise rates from a record low of 0.5 percent by the middle of the year to try to tame surging inflation.
The surprise 0.6 percent contraction in the fourth quarter of last year has made the central bank wary of raising rates, despite inflation running at double its target. Sterling fell to a session low and gilt futures briefly turned positive on the day after the data, as markets lowered their expectations of an imminent rate rise.
" This could be a game changer. It could push the first rate hike back some way," said Alan Clarke, economist at BNP Paribas.
" The services sector looks like it is growing, but only moderately and probably not enough to meet the Bank of England's expectations. A rate hike in the next few months is not the done deal that the market had priced in."
The weaker-than-expected services PMI survey contrasted with surprisingly strong data for manufacturing and construction earlier this week. Manufacturing growth held at a record high in February, while construction activity grew at its fastest pace in 8 months.
Economists cautioned, however, that it was hard to get a clear picture of recent PMI activity due to severe snow in December and a bounce-back from the bad weather in January.
" It won't be until March's survey that we get a completely weather distortion-free picture," said Vicky Redwood, economist at Capital Economics, adding that the services sector appeared to be stagnating.
The sector, which accounts for around three-quarters of the UK economy, faces headwinds this year from public spending cuts, tax rises and lower consumer confidence and spending.
Markit said its PMI surveys suggested the British economy grew by 0.5 percent in the first quarter, although that figure was inflated by the recovery from the snow-related disruption at the end of 2010. The underlying growth trend was closer to 0.2 percent, Markit said.
" February saw growth of the UK service sector return to the modest rate seen prior to the weather-related readings of December and January, leaving it on course to expand by around 0.3 percent in Q1," said Paul Smith, senior economist at Markit.
Although the pace of growth in the service sector eased in February, it remained close to the average for the second half of 2010 and will reinforce expectations the economy will recover early this year, but only slowly.
" Even with strength in manufacturing and the upside surprise to February construction data, the economy looks likely to deliver a rate of expansion that only offsets the decline in Q4 2010 to leave the underlying trend in GDP flattish," Smith said. Thursday's survey did contain some positive signals, however. Businesses were more upbeat about the future year's prospects than at any time since June and, excluding January's spike, the new business reading for February was the strongest in nine months.
The rate of input price inflation eased slightly from January's near two-and-a-half year high, while average prices charged rose for a fifth consecutive month as companies sought to offset higher input costs and January's sales tax rise.
The Bank of England is trying to reverse a surge in inflation, while protecting the fragile economic recovery.
Its Governor Mervyn King told a parliamentary committee on Tuesday the recovery would be choppy, although he pointed to more positive surveys at the start of the year. (Editing by Toby Chopra)
First Published: 2011-03-03 17:30:32
Updated 2011-03-03 18:30:00
