Korea Zinc to Cut Output on Weakening Demand, Price

By Sungwoo Park

Dec. 1 (Bloomberg) -- Korea Zinc Co., the world’s second- biggest zinc smelter, will cut production of the refined metal by 10 percent for more than a year because of weakening demand and falling prices.

Korea Zinc will maintain the reduced output at its Onsan plant, which has annual capacity of 450,000 metric tons, from today to the end of 2009, the Seoul-based company said today in an e-mailed statement. That may change depending on market conditions, it said.

Zinc has tumbled nearly 50 percent this year as slowing economic growth and the worst financial crisis since the Great Depression curbed demand for industrial metals. Chinese zinc smelters, which are all unprofitable, have cut production to try to lift prices and ease a domestic oversupply.

Zhuzhou Smelter Group Co., China’s biggest zinc smelter, slashed production by 20 percent last month because of slumping metal prices and weak demand, an executive said Nov. 17.

Korea Zinc declined 1.7 percent to 68,000 won at 10:02 a.m. in Seoul, compared with a 0.8 percent drop in the benchmark Kospi Index. The Onsan plant is the company’s only zinc smelter excluding those owned by its affiliates.

The Korean company produced 433,000 tons of zinc and 195,000 tons of lead in 2007, according to its Web site.

Zinc futures in London fell 0.8 percent to $1,210 a ton on Friday. The metal is used to galvanize steel used in cars and home appliances.

To contact the reporter on this story: Sungwoo Park in Seoul at spark47@bloomberg.net.

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Crude Oil Falls After OPEC Delays Decision to Reduce Production

By Gavin Evans and Christian Schmollinger

Dec. 1 (Bloomberg) -- Crude oil fell below $53 a barrel in New York after the Organization of Petroleum Exporting Countries deferred for another two weeks a decision to reduce output.

Slowing global growth means demand will be ``much lower'' than expected a month ago, OPEC said in a statement after the group's Nov. 29 meeting in Cairo. Another cut on Dec. 17 may not be needed if member states enacted 80 percent of the 1.5 million barrel-a-day reduction agreed in October, Al Hayat reported, citing Saudi Arabia's Oil Minister Ali al-Naimi.

``We've got a market that's focused a little bit too much on the demand-side factors and perhaps less on supply,'' Gerard Burg, energy and minerals economist at National Australia Bank Ltd. in Melbourne, said in a Bloomberg television interview. The impact of future cuts ``will be muted by the fact that spare capacity has been on the increase,'' he said.

Crude oil for January delivery fell as much as $1.47, or 2.7 percent, to $52.96 a barrel in after-hours electronic trading on the New York Mercantile Exchange. It was at $53.30 at 9:56 a.m. in Singapore.

The contract fell 1 cent on Nov. 28, when trading was shortened because of the Thanksgiving holiday the day before. Prices leapt 7.2 percent on Nov. 26 after China, the world's fourth-largest economy, slashed interest rates to sustain growth and the European Union proposed $259 billion of measures to limit the impact of the global financial crisis.

OPEC Output

OPEC, which pumps about 40 percent of the world's oil, plans to meet on Dec. 17 in Oran, Algeria. The group put off the decision to cut supplies to gauge the impact of the cuts agreed to on Oct. 24. Oil has dropped 17 percent since then.

``Right now they did the right thing,'' Tony Regan, a Singapore-based independent energy consultant, said in an interview with Bloomberg News. ``Had they cut dramatically and the market continued to fall because of the continued concerns about the economy, then they would have been seen to be in disarray.''

Prices around $75 a barrel would be ``fair'' and would support investment in new fields, al-Naimi said at the weekend. Slowing demand means the global market is over-supplied by more than 2 million barrels a day, Iranian Oil Minister Gholamhossein Nozari said yesterday.

OPEC ``is hoping that thing may look completely different in a couple of weeks,'' said Regan. ``They won't but things may be looking sufficiently different for them to take a bit of action to tighten the market.''

Brent crude oil for January settlement fell as much as $1.34, or 2.5 percent, to $52.15 a barrel on London's ICE Futures Europe exchange today. It was at $52.20 at 9:57 a.m. Singapore time.

Market Struggling

New York oil futures have tumbled 64 percent from their July 11 record of $147.27 a barrel as the U.S., Europe and Japan headed for their first simultaneous recession since World War II.

Prices gained 9 percent last week, having reached $48.25 on Nov. 21, the lowest since May, 2005, as U.S. equity prices plunged and U.S. oil stockpiles rose for an eighth week.

``The prospect of cuts in future might tend to stabilize the crude market for the short-term'' and prices have established ``something of a floor'' at $50, said National Australia's Burg.

A report today in the U.S., the world's largest oil consumer, will probably show manufacturing contracted for a fourth month in November, according to a survey of economists. The forecast decline will take the Institute for Supply Management's factory index to the lowest in 28 years.

Tanker Storage

U.S. crude oil inventories jumped 2.3 percent to 320.8 million barrels in the week ended Nov. 21, the most in six months, according to Energy Department data. Global stockpiles are equivalent to about 56 days of demand, when 52 days would be usual this time of year, OPEC Secretary General Abdalla el-Badri said Nov. 27.

Weak near-term oil prices have made it viable for companies to hire supertankers to store the commodity for later use, Frontline Ltd. Chief Executive Officer Jens Martin Jensen said Nov. 28. The company has leased two tankers for storage and is in talks for a third, he said.

To contact the reporters on this story: Gavin Evans in Wellington on gavinevans@bloomberg.net; Christian Schmollinger in Singapore on christian.s@bloomberg.net.

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Gold May Rise for Fifth Week on Dollar Outlook, Survey Shows

By Claudia Carpenter

Dec. 1 (Bloomberg) -- Gold may rise for a fifth straight week on speculation the dollar will extend a decline, increasing demand for the precious metal as an alternative investment.

Twenty-two of 35 traders, investors and analysts surveyed from Melbourne to Dallas from Nov. 26 to Nov. 28 advised buying gold, which climbed 3.4 percent last week to $819 an ounce in New York. Eight said to sell, and five were neutral.

The dollar dropped 1.9 percent last week against a weighted basket of six major currencies. Gold rose to a record in March as the dollar headed to the lowest ever against the euro.

Gold’s gain last week surprised the majority of analysts surveyed on Nov. 20 and Nov. 21. The survey has forecast prices accurately in 142 of 239 weeks, or 59 percent of the time.

Last week’s survey results: Bullish: 22 Bearish: 8 Neutral: 5

To contact the reporter on this story: Claudia Carpenter in London at ccarpenter2@bloomberg.net

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Asia Commodity Day Ahead: Gold Monthly Rise Biggest in 9 Years

Dec. 1 (Bloomberg) -- Gold had the biggest monthly increase in nine years, and cocoa had the largest weekly gain in six years. ThyssenKrupp AG said it will cut costs by more than 1 billion euros ($1.3 billion) this fiscal year. Freeport-McMoRan Copper & Gold Inc. may increase production cuts and take a “significant” writedown on its $26 billion acquisition of Phelps Dodge Corp., an analyst said.

PRECIOUS METALS

Gold Has Biggest Monthly Gain in Nine Years on Demand for Haven

Gold prices rose in New York, capping the biggest monthly increase in nine years, on demand for a haven following terrorist attacks in India. Gold rose $7.70, or 0.9 percent, to $819 an ounce on Nov. 28 in New York. This month, the price rose 14 percent, the most since September 1999. Platinum climbed $12.60, or 1.4 percent, to $882.30 an ounce. Silver fell 3.9 cents, or 0.4 percent, to $10.23 an ounce. Palladium gained $2.60, or 1.4 percent, to $194.25 an ounce.

Lonmin May Cut 5,400 Jobs, or 17% of Workforce, as Platinum Falls

Lonmin Plc, the world’s third-largest platinum producer, said it may cut as many as 5,400 jobs, or about 17 percent of its workforce, after prices plunged.

STEEL, COAL, URANIUM AND IRON ORE

ThyssenKrupp Plans to Reduce Costs By More Than $1.3 Billion

ThyssenKrupp AG will cut costs by more than 1 billion euros ($1.3 billion) this fiscal year as a weakening of demand from carmakers and builders leads to a “significant” drop in sales.

Cameco Temporarily Suspends Uranium Processing at Canada Plant

Cameco Corp., the world’s largest uranium producer, is suspending uranium-processing temporarily at a plant in Canada because of a dispute over supplies of hydrofluoric acid used in the production of nuclear fuel.

Metorex Shares Slump After Announcing Capital-Raising Plan

Metorex Ltd., a producer of copper in Africa, lost more than a third of its market value after it announced a plan to borrow money and sell new shares because of cost overruns at a Congolese mine.

INDUSTRIAL METALS, MINING

Freeport May Take ‘Significant’ Writedown, Dahlman Rose Says

Freeport-McMoRan Copper & Gold Inc. may increase production cuts and take a “significant” writedown on its $26 billion acquisition of Phelps Dodge Corp. because of slumping copper prices, Dahlman Rose & Co. said.

Copper Falls for Fifth Straight Month, Longest Slump Since 1999

Copper prices fell, capping the longest stretch of monthly declines since early 1999, as inventories climbed to the highest level in more than four years, signaling waning demand. Copper fell 4.2 cents, or 2.5 percent, to $1.6495 a pound in New York.

Frontera Copper Says Invecture Buys Stake, Seeking Control

Frontera Copper Corp., owner of the Piedras Verdes mine in Mexico, said closely held Invecture Group SA de C.V. has bought 16 percent of its shares and intends to purchase more until it has a controlling stake.

Rio Tinto Pension Plan Was Issue for BHP, Merrill Lynch Says

BHP Billiton Ltd., the world’s largest mining company, took into account Rio Tinto Group’s $16.5 billion pension plan liability when scrapping its hostile takeover this week, Merrill Lynch & Co. said.

Lundin Mining Says HudBay Deal ‘Fiscally Prudent’ Amid Turmoil

Lundin Mining AB, the Canadian copper miner negotiating a takeover by HudBay Minerals Inc., said the deal will help shield it from volatile markets that have slashed the value of both companies by more than 80 percent this year.

Alcoa Doesn’t Plan to Increase Its Stake in Rio Tinto Group

Alcoa Inc., the largest U.S. aluminum producer, said it doesn’t plan to increase its stake in Rio Tinto Group after BHP Billiton Ltd. abandoned a hostile takeover.

Southern African Coal Port Full Up on Lack of Trade Finance

Southern Africa’s second-biggest coal port, Mozambique’s Maputo, is full because a lack of trade finance is causing stockpiles to build up, according to Grindrod Ltd., the continent’s largest shipping company.

AGRICULTURAL COMMODITIES

Pilgrim’s Pride Anticipates $802 Million Loss in Fourth Quarter

Pilgrim’s Pride Corp., the largest U.S. chicken producer, said it expects to report a fiscal fourth-quarter loss of $802 million partly because of an impairment charge from the purchase of Gold Kist Inc.

Corn, Soybeans Decline as Global Economic Slump Reduces Demand

Corn and soybeans fell, capping the fifth straight month of declines, on speculation that a slumping global economy will reduce demand for meat, milk and eggs. Corn fell 5.25 cents, or 1.4 percent, to $3.6575 a bushel in Chicago. Soybeans declined 3 cents, or 0.3 percent, to $8.83 a bushel.

Wheat Gains as Egypt Buys U.S. Supplies, Bans Ukraine Grain

Wheat rose after Egypt, the world’s largest buyer of the grain, bought supplies from the U.S. and on a report that the North African country had suspended imports from Ukraine. Wheat rose 7.25 cents, or 1.3 percent, to $5.6125 a bushel in Chicago.

Hogs Have Biggest Monthly Gain in Six Years; Cattle Decline

Hog futures rose, capping the biggest monthly gain in six years, on signs that the record supply of animals to U.S. slaughterhouses this year is slowing. Hogs rose 1.25 cents, or 1.9 percent, to 67.025 cents a pound in Chicago. Cattle futures fell 0.5 cent, or 0.6 percent, to 87.65 cents a pound.

Kenya Tea Stockpiles Expand as Buyers Struggle to Finance Trade

Warehouses in the Kenyan port city of Mombasa, host to the world’s biggest tea auction, are filling up with the crop as buyers struggle to secure financing for cargoes, Africa Tea Brokers Ltd. said.

SOFT COMMODITIES

Cocoa Climbs, Caps Biggest Weekly Gain Since 2002; Sugar Rises

Cocoa prices rose, capping the biggest weekly gain in six years, on signs that the annual surplus of the commodity is shrinking. Cocoa added $73, or 3.3 percent, to $2,294 a metric ton in New York. Raw-sugar rose 0.09 cent, or 0.8 percent, to 11.90 cents a pound.

Cotton Rises as Demand Increases; Coffee, Orange Juice Decline

Cotton futures rose to the highest in a month on speculation that demand will increase after prices slumped to a six-year low. Cotton rose 1.36 cents, or 2.9 percent, to 47.91 cents a pound in New York. Arabica coffee slid 0.2 cent, or 0.2 percent, to $1.161 a pound. Orange-juice futures declined 2.55 cents, or 3.3 percent, to 74.35 cents a pound.

OTHER COMMODITIES

Aracruz Board Members, Executives, Resign After $2 Billion Loss

Aracruz Celulose SA, the Brazilian pulpmaker posting a $2.13 billion expense on bad currency bets, said three board members and four executives will step down after the resignation of Chief Financial Officer Isac Zagury.

Commodities Near Bottom on Consumer Rebound: Chart of the Day

Commodity prices that plunged from records since the end of June may be “near a bottom” as a return of consumer confidence signals a rebound, said Dale Durchholz, at AgriVisor LLC in Bloomington, Illinois.

For Related News: Top commodity stories: CTOP Top metals stories: METT Top agriculture stories: TOP AGR

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AirAsia, BHP, Chunghwa, Hyundai: Asia Ex-Japan Equity Preview

By Berni Moestafa

Dec. 1 (Bloomberg) -- The following companies may have unusual price changes today in Asia trading, excluding Japan. Stock symbols are in parentheses, and share prices are from the previous close, unless noted otherwise.

AirAsia Bhd. (AIRA MK): Southeast Asia’s biggest discount airline posted its first loss since it went public in 2004 after it took a one-time charge for contracts tied to fuel hedging and trades by Lehman Brothers Holdings Inc. AirAsia reported a net loss of 465.5 million ringgit ($128.5 million) from 180 million ringgit a year earlier, it said in a statement. Sales climbed 43 percent to 658.5 million ringgit. AirAsia fell 2 sen, or 1.8 percent, to 1.11 ringgit.

BHP Billiton Ltd. (BHP AU): The world’s largest mining company hired Hubie van Dalsen from Rio Tinto Group as its head of metallurgical coal. Van Dalsen, who was until recently Rio’s Australian managing director of coal, will take up his position in Brisbane on Feb. 2, Melbourne-based BHP said. BHP rose A$2.2, or 7.6 percent, to A$31.

Chunghwa Telecom Co. (2412 TT): Taiwan’s largest phone operator will start selling Apple Inc.’s iPhone on the island Dec. 13, the company said in a statement. Chunghwa rose 30 cents, or 0.6 percent, to NT52.5.

Gome Electrical Appliances Holdings Ltd. (493 HK): The company replaced Chairman Huang Guangyu, moving to distance itself from its billionaire founder after he was detained by Chinese police. Chief Executive Officer Chen Xiao will be acting chairman of Gome, which is “unconnected” to the probe, China’s biggest electronics retailer by stores said. Shares of Gome are suspended and the stock last traded on Nov. 21 at HK$1.12.

Hyundai Steel Co. (004020 KS): South Korea’s second-largest maker of the metal will cut prices of construction products by 11 percent, the second such price reduction this year, after demand fell and costs of raw materials declined. Hyundai Steel fell 350 won, or 1.1 percent, to 32,950.

JES International Holdings Ltd. (JES SP): The company is unsure of the status of a South Korean shipper’s orders for four bulk carriers, Lloyd’s List said, citing the sales and marketing manager at the Chinese shipbuilder. Parkroad ordered four bulk carriers last year and paid 20 percent of the total purchase price so far, Lloyd’s List quoted JES’s Yang Li Feng as saying. JES was unchanged at 11 Singapore cents.

Jih Sun Financial Holdings Co. (5820 TT): Shinsei Bank Ltd., the Japanese buyer of General Electric Co.’s local consumer finance businesses, may invest NT$10 Billion ($300 million) in Taiwan’s Jih Sun. Jih Sun advanced 11 cents, or 4.2 percent, to NT$2.76.

Malaysian Airline System Bhd. (MAS MK): The nation’s largest carrier said third-quarter profit dropped 89 percent to 38.1 million ringgit from a year earlier amid higher oil prices. The carrier said it is “intensifying” cost cuts to stay profitable. Malaysian Airline fell 7 sen, or 2.7 percent, to 2.56 ringgit.

Sime Darby Bhd. (SIME MK): The Malaysian car seller, homebuilder and palm oil producer slashed its profit target for this financial year amid the global recession. Sime is aiming for net income of 1.9 billion ringgit ($525 million) in the year ending June 2009, compared with a previous target of 3.7 billion ringgit, it said. The company also said fiscal first-quarter profit rose 46 percent to 877 million ringgit. Sime was unchanged at 5.85 ringgit.

To contact the reporter on this story: Berni Moestafa in Jakarta at bmoestafa@bloomberg.net

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Australia Stocks Decline as Slowdown Weighs on Profits, Metals

By Shani Raja

Dec. 1 (Bloomberg) -- Australian stocks fell as the deteriorating global economy weighed on corporate profit growth and commodity prices.

Brambles Ltd., the world’s biggest supplier of pallets used to move and store goods, plunged 6.1 percent. BHP Billiton Ltd., the world’s largest mining company, sank 4 percent, while rival Rio Tinto Group plunged 5.5 percent.

The S&P/ASX 200 Index lost 2 percent to 3,668.20 at 11:50 a.m. in Sydney, eroding the biggest weekly gain in the benchmark’s history dating back to 1992. The index has slumped in each of the past three months.

The benchmark has tumbled 46 percent from its Nov. 1, 2007, record as the credit crunch prompted a global recession. The Bureau of Statistics said in Sydney today that Australia’s corporate profit growth slowed in the third quarter as earnings at retailers, transportation businesses and manufacturers dropped.

Brambles lost 6.1 percent to A$6.81. BHP declined 4 percent to A$29.77, the most since Nov. 20. Rio dropped 5.5 percent to A$44.03. A measure of six metals traded in London fell 1.4 percent on Nov. 28. Zinc dropped 0.8 percent, copper 2.1 percent and nickel 0.5 percent.

Woodside Petroleum Ltd. (WPL AU) sank 79 cents, or 2.2 percent, to A$35.26, after Organization of Petroleum Exporting Countries deferred a decision on reducing production this year by two weeks, as it seeks to push oil prices up to $75 a barrel. Crude has dropped 62 percent from July’s record of $147.27 a barrel as the global recession erodes sales.

Australia’s S&P/ASX 200 Index surged 9.5 percent last week, as China, the biggest user of industrial metals and the world’s No. 2 energy consumer, cut interest rates the most in 11 years to ward off an economic slump.

To contact the reporter on this story: Shani Raja in Sydney at sraja4@bloomberg.net.

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Japan Stocks Slide on Developer Bankruptcy; Inpex Slumps on Oil

By Masaki Kondo

Dec. 1 (Bloomberg) -- Japan stocks fell on concern business failures and bad loan costs will mount after builder Morimoto Co. became the nation’s second-biggest bankruptcy this year.

Mitsubishi Estate Co., Japan’s second-biggest developer, dropped 5.9 percent. Japan General Estate Co. plunged 16 percent after Mainichi Daily News said the company withdrew job offers to university graduates. Inpex Corp., Japan’s largest oil and gas explorer, lost 4.7 percent after crude prices fell.

The Nikkei 225 Stock Average slumped 190.02, or 2.2 percent, to 8,322.25 as of 10:01 a.m. in Tokyo, retreating from the gauge’s biggest weekly gain in a month. The broader Topix index declined 12.11, or 1.5 percent, to 822.71, with more than three shares dropping for each that rose.

“The deterioration of the economy has become increasingly clear,” Tomochika Kitaoka, a Tokyo-based strategist at Mizuho Securities Co., said in an interview with Bloomberg Television.

Increasing costs to dispose of nonperforming assets and shrinking demand in the U.S. caused Japan’s biggest listed companies to collectively report a 32 percent drop in first-half earnings, according to data compiled by Bloomberg News. Companies ranging from Toyota Motor Corp. to TV maker Sharp Corp. plan to cut jobs to reduce costs.

Morimoto filed for protection from creditors on Nov. 28 with 162 billion yen ($1.7 billion) of debt, nine months after going public. The bankruptcy was the second-biggest in Japan this year after that of developer Urban Corp. and set a new annual record for failures of listed companies in the post-World War II period, according to bankruptcy research company Teikoku Databank Ltd.

Twenty-three of those 30 bankruptcy cases were in the real estate and construction sectors.

‘Severe’ Situation

Mitsubishi Estate, which had gained 32 percent in the previous five sessions, dived 5.9 percent to 1,336 yen, leading a decline in the Nikkei. Japan General Estate plummeted 16 percent to 116 yen, set for the lowest level on record. The Mainichi said on Nov. 29 the Tokyo-based company retracted offers to 53 university students last month because of a “very severe” financial situation.

A gauge of real-estate companies posted the sharpest drop among 33 industry groups on the Topix, followed by mining companies.

Inpex lost 4.7 percent to 583,000 yen, while closest domestic rival Japan Petroleum Exploration Co. slid 6.3 percent to 3,590 yen. Kanto Natural Gas Development Co. fell 4.9 percent to 647 yen.

Crude oil for January delivery fell as much 2.4 percent to $53.10 a barrel in New York after the Organization of Petroleum Exporting Countries deferred a decision to cut output for another two weeks. A $1 price change in a barrel of oil alters Inpex’s annual net income by 2.2 billion yen, the company said in May.

Nikkei futures expiring in December retreated 2.2 percent to 8,330 in Osaka and slumped 1.9 percent to 8,330 in Singapore.

To contact the reporter for this story: Masaki Kondo in Tokyo at mkondo3@bloomberg.net.



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Asian Stocks Decline on Signs Global Recession Is Deepening

By Patrick Rial and Masaki Kondo

Dec. 1 (Bloomberg) -- Asian stocks fell, snapping a four- day winning streak as Australian profit growth slowed and Japan’s Morimoto Co. became the country’s second-largest bankruptcy this year.

BHP Billiton Ltd., the world’s largest mining company, slumped 4 percent in Sydney as a report showed Australia’s corporate profit growth slowed in the third quarter and as commodity prices declined. Mitsubishi Estate Co., Japan’s second-biggest property developer, lost 3.9 percent, leading declines among the country’s real-estate shares after Morimoto filed for protection from creditors.

The MSCI Asia Pacific Index declined 1.4 percent to 81.51 as of 10:32 a.m. in Tokyo, ending a four-day, 7.6 percent advance. The gauge has slumped 48 percent this year, set for the worst annual performance on record, as the U.S. housing slump sparked a global financial crisis that dragged the world’s biggest economies into recession.

“The deterioration of the economy has become increasingly clear,” Tomochika Kitaoka, a Tokyo-based strategist at Mizuho Securities Co., said in an interview with Bloomberg Television.

Japan’s Nikkei 225 Stock Average lost 2.1 percent to 8,337.65. Economic and Fiscal Policy Minister Kaoru Yosano told the Financial Times a proposed fiscal stimulus package is unlikely to boost the nation’s economy. Benchmark stock indexes throughout Asia also fell.

The U.S. Standard & Poor’s 500 Index added 0.7 percent on Nov. 28 on speculation government bailouts will shore up the economy. Target Corp. slumped as retailers extended discounts to lure shoppers amid what is forecast to be the slowest holiday shopping season in six years.

Black Friday

U.S. retail sales rose 3 percent the same day, the smallest growth for a “Black Friday” in three years, and compared with a gain of 8.3 percent last year, ShopperTrak RCT Corp. said. The day after the Thanksgiving holiday is considered to be when retailers begin to make the bulk of their yearly profit.

Oil for January delivery dropped 1.6 percent to $53.55 and is off 63 percent from a record reached in July. The Organization of Petroleum Exporting Countries deferred a decision on reducing production this year by two weeks when it met in Cairo over the weekend.

Copper futures fell 2.5 percent in New York on Nov. 28, the biggest drop for a most-active contract since Nov. 19. Stockpiles monitored by the London Metal Exchange rose to the highest level since February 2004, adding to evidence the global recession reduced demand for the metal used in pipes and wires.

In Japan, Morimoto filed for protection from creditors on Nov. 28 with 162 billion yen ($1.7 billion) of debt, nine months after its initial public offering. The bankruptcy was the second-biggest in Japan this year after that of developer Urban Corp. and pushed up the total number of failures of Japan’s listed companies to the most since World War II, according to research company Teikoku Databank Ltd.

Shrinking demand in the U.S. and mounting costs to dispose of nonperforming assets caused Japan’s biggest listed companies to collectively report a 32 percent drop in first-half earnings, according to data compiled by Bloomberg News.

To contact the reporter for this story: Patrick Rial in Tokyo at prial@bloomberg.net; Masaki Kondo in Tokyo at mkondo3@bloomberg.net.

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Microsoft Backs New Yahoo Search Team, The Sunday Times Reports

By Caroline Binham

Nov. 30 (Bloomberg) -- Microsoft Corp. is backing a new management team to take control of Yahoo Inc.’s search business following its failed takeover attempt, the Sunday Times of London reported.

Microsoft will put up $5 billion to back Jonathan Miller, the former chief executive officer of AOL and Ross Levinsohn, a former president of Fox Interactive Media, the newspaper reported, without saying where it got the information.

The duo would seek to raise an additional $5 billion from institutional investors to buy a stake of over 30 percent in Yahoo, the Sunday Times said. The terms would give Microsoft a 10-year operating agreement to manage Yahoo’s search business, plus a two-year option to buy it for $20 billion.

Senior directors of the two companies have agreed the outline of the deal, the newspaper said without citing anyone.

A call to Microsoft’s press office in Portland, Oregon, by Bloomberg News outside office hours wasn’t immediately returned. An e-mail and phone call outside office hours to Emily Fox, a Sunnyvale, California-based spokeswoman for Yahoo, wasn’t immediately returned.

To contact the reporter on this story: Caroline Binham in London at cbinham@bloomberg.net

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Kuwait Telecommunications to Start Commercial Operations Dec. 3

By Fiona MacDonald

Nov. 30 (Bloomberg) -- Kuwait Telecommunications Co., licensed to be the Gulf state’s third mobile-phone company, will start commercial operations Dec. 3.

The company, also known as Viva, will enter the market “as a non-traditional Kuwaiti telecommunications company,” it said today in an e-mailed statement.

Viva Chief Executive Officer Najeeb al-Awadi said Sept. 28 the company aims to capture 10 percent of the market share in Kuwait, or 300,000 subscribers, in its first year of operations.

Demand for shares in Viva was three times the number sold to the Kuwaiti public in an initial public offering that ended Sept. 18. The company sold 250 million shares, or 50 percent, in the IPO. Saudi Telecom Co. holds a 26 percent stake in Viva and the Kuwaiti government 24 percent.

To contact the reporter on this story: Fiona MacDonald in Kuwait FmacDonald4@bloomberg.net

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Omantel Group Qualified to Bid for Iran’s Third Mobile License

By Arif Sharif

Nov. 30 (Bloomberg) -- Oman Telecommunications Co., the biggest phone operator in the Persian Gulf country, won preliminary approval to bid for Iran’s third mobile license.

Omantel, as the company is called, is part of a group that has now qualified for the second stage of the bid process in Iran, the company said in a statement to the Muscat bourse today.

To contact the reporter on this story: Arif Sharif in Dubai at asharif2@bloomberg.net

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Morgan Stanley Cuts Jobs at Its Dubai Regional Office

By Arif Sharif

Nov. 30 (Bloomberg) -- Morgan Stanley reduced its workforce at its regional hub in the Dubai International Financial Centre, joining others in the emirate who have cut jobs to manage the impact of the global credit crisis.

The bank cut 10 to 15 jobs last week from more than 110 at its office, Georges Makhoul, Morgan Stanley’s managing director for the Middle East and North Africa, said today in an e-mailed response to questions from Bloomberg News.

“We have no intention at all to redefine our presence here as it is strategic,” he said. The reductions were not made in any particular area or level, he added.

Nakheel, the state-owned developer planning a kilometer- high tower in Dubai, cut its workforce by 15 percent, or 500 jobs, as the company tries to limit the impact from the global financial crisis, it said today in an e-mailed statement.

To contact the reporter on this story: Arif Sharif in Dubai at asharif2@bloomberg.net

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Arabtec Board Approves Bonus Share Offer to Double Capital

By Shaji Mathew

Nov. 30 (Bloomberg) -- Arabtec Holding Co., the construction company building the world’s tallest tower in Dubai, plans to offer one bonus share for each existing share to double its capital.

Arabtec board approved plans to increase the Dubai-based company’s capital to 1.2 billion dirhams ($326 million) from 598 million dirhams, the company said today in a statement on the Dubai bourse Web site.

To contact the reporter on this story: Shaji Mathew in Dubai at shajimathew@bloomberg.net



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Gulf Shares Advance on Global Bailouts; Arabtec, Omantel Gain

By Haris Anwar

Nov. 30 (Bloomberg) -- Gulf shares gained, tracking the global markets, on speculation government bailouts will shore up the global economy and attract investors into the region.

Arabtec Holding Co., the construction company building the world’s tallest tower in Dubai, rose to the highest in almost three weeks after it offered one bonus share for each existing share. Emirates Telecommunications Corp., the United Arab Emirates’ biggest telephone company, advancing for a second day, while Oman Telecommunications Co. rose to the highest since Nov. 11.

The Dubai Financial Market General Index gained 1.9 percent to 1,964.66, advancing 8.3 percent in the past four trading sessions. The Abu Dhabi Securities Exchange General Index advanced 2 percent to 2,775.85, while the Kuwait Stock Exchange Index rose 1.7 percent.

“We’re seeing some shifts in sentiments globally,” said Chamel Fahmy, senior regional sales trader at Beltone Securities Brokerage in Dubai. “Our markets are following that trend. I think there is still 200 points upside in the Dubai market.”

The S&P 500 gained more than 12 percent in the past week, its best weekly performance since 1974, after China cut interest rates and the Federal Reserve committed $800 billion to help resuscitate lending markets, boosting speculation government action will pull the global economy out of recession.

Nakheel Effect

The Dubai index, which surged as much as 6.3 percent, pared gains after the state-owned developer Nakheel PJSC cut its workforce by 15 percent as the company scaled back some of its projects because of the global financial crisis. Nakheel is the developer of palm tree-shaped islands off the emirate’s coast. The company in October announced plans to construct a kilometer- high tower in Dubai.

Dubai is bracing for a slowdown in the property market as economic growth slumps, reducing demand for real estate. Emaar Properties PJSC, the Middle East’s largest real-estate developer, said Nov. 13 it’s reviewing recruitment policies as the global financial crisis squeezes credit facilities and slows the regional property market.

Oman’s Muscat Securities Market 30 Index rose 2.3 percent, while Qatar’s DSM 20 Index increased 6.1 percent. The Bahrain All Share Index added 1.2 percent. Saudi Arabia’s Tadawul All Share Index dropped 2.2 percent to 4,738.14.

Arabtec Gains

Arabtec surged 2 percent to 4.55 dirhams, its highest since Nov. 10. Arabtec’s board approved plans to increase the Dubai- based company’s capital to 1.2 billion dirhams ($326 million) from 598 million dirhams. Emirates Telecommunications, or Etisalat, rose 0.8 percent to 12.45 dirhams.

Oman Telecom, the biggest phone company in the Persian Gulf country, gained 3.2 percent to 1.731 rials after saying it was part of a group that qualified for the second stage of the mobile-phone license bid process in Iran.

The following stocks also rose or fell in the region. Stock symbols are in parentheses after company names.

Kuwait Projects Co. Holding K.S.C. (KPROJ KK), the country’s largest non-state-owned investment company, gained 6.4 percent to 670 fils after it repaid a 200 million-euro ($254 million) medium-term note due this month.

Qatar Telecom QSC (QTEL QD), the telecommunications firm that seeks to control PT Indosat, rose 3.3 percent to 127.1 riyals after the operator agreed to pay its original offer price for more shares in Indonesia’s second-largest telephone company.

Qatar International Islamic Bank (QIIK QD), the emirate’s second-largest bank complying with Muslim law, climbed 9.7 percent to 48.6 riyals after the bank said it may buy back 10 percent of its shares after a board meeting Dec. 14.

To contact the reporter on this story: Haris Anwar in Dubai on hanwar2@bloomberg.net.

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Japan Bond Sales to Exceed $314 Billion Next Year, Nikkei Says

By Toru Fujioka

Nov. 30 (Bloomberg) -- Japanese government bond sales will probably exceed 30 trillion yen ($314 billion) for a second straight year in the 12 months starting April 2009 as corporate tax revenue declines, Nikkei English News reported.

Japan’s tax receipts may fall short of the government’s estimate by about 6 trillion yen ($63 billion), the Asahi newspaper reported earlier this month.

Falling tax revenue and an increase in spending to stimulate growth will make it difficult to achieve the goal of balancing the budget by 2011, though it remains a “necessary first step” toward cutting Japan’s debt, the Organization for Economic Cooperation and Development said last week.

Japan’s public debt at central and local governments will reach 778 trillion yen by March 2009, according to the finance ministry. The OECD estimates the debt stands at more than 1.7 times the economy’s gross domestic product, the highest ratio among the group’s 30 member countries.

To contact the reporter on this story: Toru Fujioka in Tokyo at tfujioka1@bloomberg.net

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Mitsui Taps Fed Program to Get Low-Interest Funds, Nikkei Says

By Toru Fujioka

Nov. 30 (Bloomberg) -- Mitsui & Co., Japan’s second-biggest trading house, is the nation’s first firm to apply for borrowing through the Federal Reserve’s commercial paper purchase program, the Nikkei newspaper reported.

Mitsui applied to the program to secure stable funding at low interest after the borrowing rate rose about 2 percentage points in September because of the impact of the global financial crisis, Nikkei reported, without saying where it got the information.

Mitsui has sold about 50 billion yen ($523 million) of commercial paper a year in the U.S. through a subsidiary, according to the report.

To contact the reporter on this story: Toru Fujioka in Tokyo at tfujioka1@bloomberg.net

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Chidambaram Is New Home Minister, Singh Keeps Finance

By Bibhudatta Pradhan and Pratik Parija

Nov. 30 (Bloomberg) -- Palaniappan Chidambaram took over as India's home minister, replacing Shivraj Patil, who resigned today after owning moral responsibility for the worst terrorist attack in the nation in 15 years.

The attacks in Mumbai, which began on Nov. 26 at two luxury hotels, a railway terminal and a building housing a Jewish center, lasted until yesterday morning, leaving 195 people dead.

Prime Minister Manmohan Singh appointed a new home minister after Patil was criticized by opposition parties and others for intelligence and operational failures, apart from decision- making delays, in tackling this and other terrorist attacks in India. About 300 people have died this year in India as bombs have exploded in markets, mosques, bus stations and theaters, with most of the attacks still unsolved.

The new appointment was announced by the president of India in a press release issued in New Delhi. The finance portfolio will be held by Prime Minister Singh, President Pratibha Patil's office said. Singh, a former central bank governor, has served as finance minister before and is credited with starting India's economic-reform program in 1991.

Chidambaram, finance minister since 2004, when Prime Minister Singh's government came to power, will take over the home ministry after having steered India's economy through record growth.

With general elections due by May, the current government won't present a full-fledged budget in February for the next financial year, which starts April 1.

Home Ministry Experience

The new home minister has previous experience of the ministry. He served as junior minister for internal security from 1986 to 1989 under the late prime minister Rajiv Gandhi.

Chidambaram and Reserve Bank of India Governor Duvvuri Subbarao have been seeking to loosen fiscal and monetary policy to shore up growth in Asia's third-biggest economy and unlock a credit freeze that took hold in September.

Economic growth in the year to March 31 will slow to 7-8 percent because of the financial turmoil before rebounding to 9 percent in the following year, Chidambaram has said.

Chidambaram has been a key member of the administration's economic team, along with Prime Minister Singh and Montek Singh Ahluwalia, deputy chairman of the Planning Commission.

To contact the reporter on this story: Pratik Parija in New Delhi at pparija@bloomberg.net.

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India’s Home Minister Patil Quits Over Mumbai Terror Attacks

By Bibhudatta Pradhan and Vipin Nair

Nov. 30 (Bloomberg) -- India’s Home Minister Shivraj Patil resigned today, taking “moral” responsibility after the terrorist attacks in Mumbai that killed 195 people, the deadliest such assault in the country in 15 years.

Patil was criticized by opposition parties and others for intelligence and operational failures, apart from decision-making delays, in tackling this and other terrorist attacks in India. About 300 people have died this year in India as bombs have exploded in markets, mosques, bus stations and theaters, with most of the attacks still unsolved.

The resignation has been submitted to Prime Minister Manmohan Singh’s office, M. Veerappa Moily, a spokesman for the ruling Congress party, said by telephone. The minister offered his resignation on “moral grounds,” said R.K. Khatri, Patil’s personal assistant in a phone interview. A replacement for Patil hasn’t been announced.

The Mumbai terrorist attacks, which began on Nov. 26 at two luxury hotels, a railway terminal and a building housing a Jewish center, lasted until yesterday morning.

The attacks on India’s financial hub may stall the peace process with Pakistan as Foreign Minister Pranab Mukherjee has held elements from the predominantly Muslim neighbor responsible.

India may halt talks with its neighbor and suspend a five- year-old cease-fire on the Line of Control that separates the two sides in Kashmir, NDTV reported today. It may also boost troops on the Kashmir border and suspend rail and air links with Pakistan, NDTV said.

FBI-Style Agency

Singh is seeking support for a crime-fighting agency modeled on the U.S. Federal Bureau of Investigation.

Singh has called a meeting this evening in New Delhi with all the political parties in parliament to discuss the measures. In Washington yesterday, President George W. Bush pledged U.S. help to investigate the assault.

“The killers who struck this week are brutal and violent, but terror will not have the final word,” Bush said yesterday as he returned to the White House after spending the Thanksgiving Day holiday at Camp David in Maryland. India “can count on the world’s oldest democracy to stand by their side.”

The 60-hour siege puts a spotlight on security. P.R.S. Oberoi, chairman of the Oberoi Group that owns one of the hotels, urged the government to let businesses defend themselves.

“Their intention was to kill as many people as possible and do as much damage as possible,” Oberoi said of the terrorists. “It takes a long, long time for even one person to be armed. I wanted a security person for me, and it took nearly a year.”

Pakistani Elements

Mukherjee said on Nov. 28 elements from Pakistan, which has fought three wars with India, were behind the attacks. Pakistani Foreign Minister Shah Mahmood Qureshi challenged India to provide evidence of a link.

Singh yesterday met with chiefs of defense services and intelligence agencies after the opposition Bharatiya Janata Party blamed his government for doing too little, according to the Press Trust of India, which quoted BJP leader L. K. Advani as criticizing the government’s “non-serious approach.”

President-elect Barack Obama, briefed by Bush during the siege, called Singh Nov. 28 to offer condolences and said “he would be monitoring the situation closely,” Nick Shapiro, an Obama spokesman, said in an e-mailed statement yesterday.

Nine Attackers Killed

Vilasrao Deshmukh, chief minister of Maharashtra state, of which Mumbai is the capital, said nine of the 10 attackers were killed. More than 295 people were injured, M.L. Kumawat, secretary of internal security at the Home Ministry, told reporters in New Delhi yesterday. S. Jadhav, an official at the city’s disaster management unit, put the death toll at 195.

The Times of India, the nation’s biggest newspaper, reported the death toll could be the highest from a terrorist attack in the country. The figure may surpass the death toll of 257 in a series of bomb blasts in Mumbai in 1993, it said.

The indiscriminate killing of businessmen and tourists in five-star hotels marks an escalation in India’s battle against Islamic extremism.

The Oberoi Group had tightened security after the Islamabad Marriott hotel was bombed in September and will seek a meeting among all hoteliers and state and national governments to review security, P.R.S. Oberoi said.

Ratan Tata, the head of the Tata Group, which owns the Taj Mahal Palace and Tower Hotel in Mumbai, said there had been warning of a possible terrorist attack, following which security measures had been put in place.

Taj Curbs

The entry curbs, which were relaxed before the attacks, wouldn’t have stopped the attacks, he said.

“It’s ironic that we did have such a warning and we did have some measures,” which included metal detectors and restricted parking, Tata told CNN’s Fareed Zakaria in an interview posted on the broadcaster’s Web site today. “If I look at what we had, which all of us complained about, it could not have stopped what took place.”

Security forces recovered four AK-47s, 55 magazines and four pistols from the Trident-Oberoi hotel complex and Nariman House, Kumawat said. The authorities have yet to compile a list of arms recovered from the Taj Mahal Hotel, he said.

Six Americans died, U.S. Ambassador David Mulford said in New Delhi. More U.S. citizens are missing. Gavriel Holtzberg, the 29-year-old rabbi who ran the Chabad mission in Mumbai, and his wife Rivka, 28, were among five people killed after gunmen raided the five-story Chabad House synagogue. Rabbi Leibish Teitelbaum, a Brooklyn native, was also killed, New York City Mayor Michael Bloomberg said in a statement.

Foreigners Killed

The attacks killed three Germans, one Japanese, two Canadians and a Briton, chief minister Deshmukh said. Two Australians died and more may have been killed, Foreign Minister Stephen Smith said. Two French nationals died, President Nicolas Sarkozy said.

“No cause can make this acceptable, none, ever,” Sarkozy told reporters in Doha at a United Nations conference. “It’s barbarism.”

Indian forces yesterday combed the Taj Mahal hotel for unexploded devices and weapons after a shootout with three militants ended the siege. The ground floor of the 565-room hotel was flooded and strewn with debris after militants fought special forces in gun and grenade battles.

The terrorists held out because they knew the layout of the century-old hotel and were well trained in explosives and guns, authorities said.

Deccan Mujahedeen

A little-known Islamist group, the Deccan Mujahedeen, claimed responsibility for this week’s shootings and explosions across the western coastal city, Indian Home Ministry official Kumawat said.

The attackers began planning their assaults six months ago, India’s NDTV reported, citing an account from a captured terrorist. A seized global positioning system showed some of the group left Karachi, Pakistan, as early as Nov. 12, NDTV said.

Ten terrorists plotted the attacks for a year, the U.K.’s Sunday Telegraph reported, citing the police interrogation report of a person thought to be a member of the group. The terrorists were dedicated to fighting for an independent Kashmir, the disputed region claimed by India and Pakistan.

The group reached Mumbai in three speedboats from India’s Gujarat region after arriving in one boat from Karachi, the Mumbai Mirror said.

Lashkar, Jaish

Lashkar-i-Taiba or Jaish-i-Muhammad, two Muslim extremist terrorist groups from Pakistan that have attacked India in the past, may be involved, MSNBC reported on its Web site, citing unidentified analysts and counterterrorism officials. The groups are linked to violence in the disputed Kashmir region.

U.S. intelligence and counterterrorism officials said evidence in the past two days points to Lashkar-i-Taiba as being responsible, the New York Times reported. The group has a “maritime capability” and could mount a sophisticated operation in Mumbai, the Times reported, citing counterterrorism officials it didn’t identify.

“We came up against highly motivated terrorists,” Vice- Admiral J.S. Bedi, whose commandos led the assault against the militants, said in televised comments.

India will “go after” individuals and organizations behind the attacks, which were “well-planned with external linkages,” Singh said in a televised address, without identifying nations. “We will take the strongest possible measures to ensure that there is no repetition of such terrorist acts,” Singh said on Nov. 27 in his address to the nation.

To contact the reporters on this story: Bibhudatta Pradhan in New Delhi at bpradhan@bloomberg.net. Vipin V. Nair in Mumbai at vnair12@bloomberg.net;

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Hong Kong Job Vacancies Fall 20% in November, Morning Post Says

By Kelvin Wong

Nov. 30 (Bloomberg) -- The number of daily job vacancies in Hong Kong fell nearly 20 percent in November from a month earlier, the South China Morning Post reported, citing an official from the government’s Labor Department.

The number of jobs available each day in the city fell to about 2,300 last week from 2,800, the Hong Kong-based newspaper cited Assistant Labor Commissioner Stanley Ng as saying.

To contact the reporter on this story: Kelvin Wong in Hong Kong at kwong40@bloomberg.net

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Nakheel Cuts Workforce by 15% to Limit Financial-Crisis Impact

By Glen Carey

Nov. 30 (Bloomberg) -- Nakheel PJSC, the state-owned developer planning a kilometer-high tower in Dubai, has cut its workforce by 15 percent as the company tries to limit the impact from the global financial crisis.

The Dubai-based developer announced the loss of 500 jobs in an e-mailed statement today.

“We have the responsibility to adjust our short term business plans to accommodate the current global environment,” the company said in the statement. “The redundancies are indeed regrettable, but a necessity dictated by operational requirements which are in turn dependent on demand.”

To contact the reporter on this story: Glen Carey in Dubai at gcarey8@bloomberg.net.

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OPEC Defers Decision on Output Cut, Seeks $75 Oil

By Maher Chmaytelli and Ayesha Daya

Nov. 30 (Bloomberg) -- OPEC deferred a decision on reducing production this year by two weeks to gauge the impact of earlier cuts, as it seeks to push oil prices back up to $75 a barrel.

Crude has dropped 62 percent from July’s record of $147.27 a barrel as the global recession erodes sales. Ali al-Naimi, the oil minister of Saudi Arabia, OPEC’s largest exporter and its de facto leader, said yesterday that $75 a barrel represents a “fair price” needed to support investment in new fields.

OPEC, which accounts for more than 40 percent of the world’s supply, will next meet in Oran, Algeria, on Dec. 17. In a statement after yesterday’s meeting in Cairo, the group warned demand will be “much lower” than expected a month ago. The cost of crude has continued to slide even after the group agreed last month to lower production by 1.5 million barrels a day.

“The way demand data continues to come out, especially from the U.S., suggests that they will have to cut,” said Raja Kiwan, a Dubai-based analyst at consultant PFC Energy.

Compliance with existing supply quotas is “not good enough,” based on current forecasts, said OPEC Secretary General Abdalla El-Badri. He also urged non-OPEC members Russia, Mexico and Norway to restrain supply, as they did a decade ago when prices slumped toward $10 a barrel.

The 11 OPEC states subject to output quotas will produce 27.8 million barrels a day in November, according to Geneva- based consultant PetroLogistics Ltd., in excess of their official limit of 27.3 million barrels a day.

‘Additional Action’

The Organization of Petroleum Exporting Countries pledged to take any “additional action” needed to stabilize the market in Oran, according to Chakib Khelil, the group’s president. Asked if OPEC would seek to lower output in Algeria, al-Naimi replied: “A cut is possible, we will have to see.” A reduction would not be needed if members achieve 80 percent compliance with last month’s agreed cuts, al-Naimi told Al Hayat newspaper.

The Saudi oil minister said there was a “good logic” for $75-a-barrel, backing earlier comments from Saudi King Abdullah who told Kuwaiti newspaper Al-Seyassah that this represents a “fair price.” Crude for January delivery traded at $54.43 a barrel in New York on Nov. 28.

OPEC abandoned an official price target almost four years ago and ministers’ expectations have changed throughout 2008 as crude rallied to a record $150 in New York in July, then fell below $50 this month. Ministers from Venezuela, Iraq, Algeria and Nigeria also said yesterday oil should cost at least $75.

Outside Help

Producers and drillers from Exxon Mobil Corp. to BP Plc are already suffering from falling prices. OPEC’s export revenue will be $979 billion in 2008, 9.6 percent less than expected a month ago, because of sinking crude prices, the U.S. Energy Department forecasts.

El-Badri called for outside help to halt the plunge in prices. “All non-OPEC should come and help, it is a big burden for OPEC,” he told reporters. As well as Russia, “the ones we know that have the capability to cut are Norway and Mexico.”

Russia’s energy minister is expected to attend the Algeria meeting, El-Badri said. His plea for help elsewhere may fall on deaf ears after Norway, the world’s fifth-biggest oil exporter, ruled out production cuts earlier this month. “I don’t see any scenarios with regards to that,” Norwegian Oil Minister Terje Riis-Johansen said in a Nov. 18 interview.

OPEC will likely lower supplies before the end of the year, according to 18 of 21 analysts surveyed by Bloomberg last week. About half of those thought an accord would be made in Cairo, while others expected a decision later. Twelve predicted the reduction will be at least 1 million barrels a day, more than is pumped by Qatar.

Cairo Meeting

Venezuelan Energy and Oil Minister Rafael Ramirez said after yesterday’s “consultative” meeting in Cairo that OPEC will still need to cut production by at least 1 million barrels a day by the end of the year.

OPEC called ministers together in Cairo yesterday rather than wait until its next scheduled December conference in Algeria, as the slowing world economy reduced global consumption faster than expected. In September, the group urged greater compliance with existing output limits.

The Cairo meeting, originally intended just for ministers from Arab nations, was expanded into a full meeting for all OPEC members, including countries like Venezuela, Iran and Angola.

OPEC members have a balancing act to perform as they strive to boost prices without overreacting in terms of production cuts and being blamed for exacerbating the economic slowdown.

Demand for oil may fall for the first time since 1983 next year, Merrill Lynch & Co. said, as the U.S., Europe and Japan face their first simultaneous recession since World War II.

Jakarta Meeting

Eleven years ago, OPEC members bickered over quotas as prices slid 28 percent in 10 months amid the onset of the Asian financial crisis. At a meeting in Jakarta in November 1997, they raised quotas, even as economic turmoil in Asia was slowing demand and prices fell another 44 percent by December 1998 to a low of $10.35 in New York.

OPEC’s 13 member nations include Algeria, Angola, Ecuador, Indonesia, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, United Arab Emirates and Venezuela. Indonesia is expected to leave the group at the end of the year.

To contact the reporter on this story: Maher Chmaytelli in Cairo at mchmaytelli@bloomberg.netAyesha Daya in Cairo at adaya1@bloomberg.net

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Gillard Says Government Will Update ABC Strategy This Week

By Gemma Daley

Nov. 30 (Bloomberg) -- Australia’s government will this week update its strategy for ABC Learning Centres Ltd., the Brisbane-based child-care operator seized by lenders this month, Education Minister and Deputy Prime Minister Julia Gillard said.

ABC will review a third of its operations, covering more than 30,000 children, receiver McGrathNicol & Partners said on Nov. 26. All centers will remain open until the end of 2008 and 656 operations will continue into the new year as some 386 centers will be reviewed.

“As this week unfolds, we will be in a better position as the receiver makes more information available,” Gillard told Ten Network television’s Meet the Press program today.

ABC Learning, which looks after one in three Australian children in daycare at 1,042 centers, was seized after the credit crisis drove up its interest payments. The company, which looks after about 110,000 children, will have financing from its lenders to continue trading into 2009, receiver McGrathNicol & Partners said last week.

Australia’s federal government on Nov. 7 pledged A$22 million ($14 million) to keep ABC Learning’s centers open until at least Dec. 31.

“We are trying to lobby the government to extend the closures until April 2009,” Amanda White, a mother of one whose daughter attends an ABC center in the Perth suburb of Madora Bay, said in an e-mail. “Our center is one that will be closing, there is not enough time to find a suitable buyer for our center and have all the paperwork completed to allow the center to remain open with the same staff and have no effect on our children.”

ABC has A$1.66 billion in liabilities in Australia, creditors were told Nov. 18. There are no redundancy plans for workers at ABC Learning and the outside manager doesn’t intend to increase fees in 2009, McGrath’s receiver Chris Honey said.

To contact the reporter on this story: Gemma Daley in Canberra at gdaley@bloomberg.net

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Australia to Further Boost Economy If Growth Slumps, Swan Says

By Gemma Daley

Nov. 30 (Bloomberg) -- Australia’s government will follow up yesterday’s A$15.1 billion ($10 billion) spending package with additional stimulus measures if growth slows more than expected, Treasurer Wayne Swan said.

National and state leaders yesterday agreed on a five-year funding plan focused on education and health, following up A$10.4 billion in grants announced last month, as the country seeks to cope with the global financial crisis.

“It does stimulate the economy; it does create 133,000 jobs over five years,” Swan told Nine Network television. “We will do whatever we need to do in the next period to stimulate the economy should growth slow more than has been expected, or would have been expected some months ago.”

Prime Minister Kevin Rudd announced the spending plan, forecast to create 133,000 jobs, after annual talks with state leaders yesterday on national government funding for the states. The package adds to A$332 billion of spending forecast for this and the next three financial years.

Swan said he doesn’t expect the financial crisis to last five years and the government will accept a budget deficit if needed for extra economic stimulus. Australia’s budget was last in deficit in the year ended June 2002.

“If growth were to slow further than expected, then a temporary deficit would be the responsible thing to do to invest in the strength of the economy and to create jobs,” Swan said. “At the moment we are forecasting a modest budget surplus.”

Surplus Shrinks

Swan on Nov. 5 slashed the forecast budget surplus by 75 percent, citing the slowest economic growth in eight years. Reserve Bank Governor Glenn Stevens said Nov. 19 he would be comfortable if state and federal governments increased public spending, “even if that involves some prudent borrowing.”

Australia would join other developed nations forecasting budget deficits in 2009. The U.S. government shortfall may top $1 trillion next year and spending in the U.K. will push the deficit to 118 billion pounds ($181 billion) in the year starting April 1.

“The global financial crisis is still unfolding,” Deputy Prime Minister Julia Gillard told Channel Ten’s Meet The Press program today. “Its effects on our economy are still unfolding.”

The Reserve Bank of Australia this month reduced its 2008 economic growth forecast to 1.5 percent from 2 percent. The central bank has slashed its benchmark interest rate 2 percentage points since September to 5.25 percent.

Australia’s leading economic index fell in September, signaling the nation may slip into a recession, ending 17 straight years of economic expansion, Westpac Banking Corp. and the Melbourne Institute said on Nov. 19.

Australian business confidence plunged in October to a record low, consumers were pessimistic in November for a 10th straight month and house prices dropped in the third quarter by the most since 1978.

To contact the reporter on this story: Gemma Daley in Canberra at gdaley@bloomberg.net

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China GDP May Expand 10% in 2009, State Analyst Says

By Wang Ying

Nov. 30 (Bloomberg) -- China’s economy may grow 10 percent next year as the “huge” potential of domestic consumption and investments counters the impact of a global slowdown, a State Council researcher said.

The “vast development potential” of the world’s most- populous nation will ensure a fast rate of expansion in 2009, said Zhang Liqun, a researcher with the Cabinet’s Development Research Center, according to the official Xinhua News Agency. “Domestic enterprises need to accelerate the pace in upgrading their business structures to better cope with a severe world economic situation.”

China last week cut its benchmark interest rate by the most in 11 years and has unveiled a 4 trillion yuan ($586 billion) stimulus plan to protect the economy from a global recession. Zhang’s optimism isn’t shared by the World Bank, which on Nov. 25 said the Chinese economy is expected to expand next year at the slowest pace in almost two decades.

“We expect growth more likely to be at a rate of between 8 percent and 9 percent,” Fan Jianping, chief economist at China’s State Information Center, said by phone from Beijing today. “The stimulus package could contribute 1 to 2 percentage points, but the overall trend will be a down arrow.”

Consumer prices in China may increase by 3 percent in 2009, compared with 7 percent in the first nine months of this year, Zhang said in the Xinhua report.

Global Recession

China’s central bank lowered its key lending rate by 108 basis points to “ensure sufficient liquidity in the banking system and to promote steady loan growth so that monetary policy can play an active role in supporting economic growth,” the People’s Bank of China said last week. A basis point is 0.01 percentage point.

China can help cushion the global recession by stoking its own expansion, President Hu Jintao told Group of 20 nation leaders in Washington on Nov. 15.

The World Bank cut its forecast for China’s economic growth next year to 7.5 percent from 9.2 percent previously. The Organization for Economic Cooperation and Development also lowered its forecast.

China’s economy grew 9 percent, the weakest pace in five years, in the third quarter, slowing from 11.9 percent last year. The slowdown is deepening, after export orders fell last month to the lowest level since 2005 and property price slid.

The country’s cabinet said Nov. 26 it was studying extra measures to help struggling companies in the steel, auto, petrochemical and textile industries; to increase key commodity reserves; and to expand insurance for the jobless.

“The government probably has little choice if it is to follow through on its ambitious plan to revive the economy,” said Mark Williams, an economist at Capital Economics in London. “Beijing has at least signaled its willingness to use fiscal policy to support demand, but so far it has not been convincingly delivered.”

For Related News: Most-read stories on China: MNI CHINA 1W Most-read China economy stories: TNI CHECO MOSTREAD BN For top economic news: TOP ECO

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Nigerian Mobs Burn Churches, Mosques as 10,000 Flee Violence

By Dulue Mbachu

Nov. 30 (Bloomberg) -- Fighting between Christian and Muslims in the Nigerian city of Jos entered a third day as mobs burned churches, mosques and homes, leaving at least 80 dead and forcing 10,000 to flee.

“So far more than 80 bodies have been brought into the mortuary here,” Yakubu Ayuba, a worker at the Jos University Teaching Hospital, the city’s main hospital, said by phone yesterday. “Many more are dead going by the accounts of witnesses.”

About 10,000 people have fled their homes and are taking refuge in military and police compounds, Okon Umoh, a Nigerian Red Cross spokeswoman, said by phone from Abuja, declining to give figures for the dead. The death toll exceeded 350, according to This Day newspaper, based in Nigeria’s commercial capital, Lagos.

The violence followed local elections in Plateau state on Nov. 27, with fighting flaring in the capital Jos between indigenous, mainly Christian Berom people and predominantly Muslim Hausa-speaking settlers supporting rival candidates.

Nigeria, Africa’s most populous country with more than 140 million people, is almost evenly split between a mainly Muslim north and a largely Christian south. Parts of the country’s center fall into a religious fault-line that erupts periodically into violence.

Plateau state Governor Jonah Jang declared a night-time curfew on the city Nov. 28, and ordered troops to shoot rioters on sight in a bid to curb the city’s worst violence in seven years. Rival mobs defied the curfew yesterday, engaging in street battles and attacking people suspected of belonging to the opposing side, witnesses said.

‘Many Houses Burnt’

“Some of the worst fighting has occurred in Bauchi Road and Nassarawa Gwom areas where hundreds of cars and many houses were burnt,” said Chimezie Onuogu. The Jos resident said in a telephone interview yesterday that he fled with his family to a police station for refuge.

The local government elections resulted in victory for the Christian-backed ruling People’s Democratic Party, which won in all 17 councils including Jos city. The results prompted protests by supporters of the Muslim-backed opposition All Nigeria People’s Party.

More than 700 people were killed in sectarian violence which erupted between Christians and Muslims in Jos in September 2001. Another 500 people were killed in 2004 when violence broke out in the Plateau state town of Yelwa between Muslim Hausa- speakers with origins farther in the north and the indigenous Berom people.

Several thousand people have died in ethnic, religious and communal violence in different parts of the country since the end of decades of military rule in Nigeria in 1999 lifted the lid on long-suppressed grievances.

To contact the reporter on this story: Dulue Mbachu in Lagos at dmbachu@bloomberg.net

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