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Thursday, 27 December 2012
Friday, 21 December 2012
UPDATE 1-Anglo American says last Minas-Rio injunction lifted
n" readability="42">Dec 21 (Reuters) - Global miner Anglo American Plc said on Friday an injunction blocking installation of an electricity transmission line at its Minas-Rio iron ore project in Brazil has been lifted, clearing the final hurdle for the project.
A Brazilian court removed two injunctions in September, letting the company restart construction at the mine site, which has a capacity of 26.5 million tonnes per year.
The removal of the final injunction on Friday will allow the company to install a 90-kilometer (55 mile) electricity transmission line.
The project has faced a series of delays and cost overruns since it was bought for $5.5 billion from Brazilian billionaire Eike Batista's MMX Mineracao e Metais SA in 2008. Criticism of the project soured the relationship between Anglo American's former chief executive, Cynthia Carroll, who championed the purchase, and leading shareholders. Carroll resigned in October.
The company raised the estimated cost of the Minas Rio project last month, saying it was unlikely to cost less than $8 billion.
Anglo American shares fell 0.48 percent to 1,855.48 pence in London.
Anglo American says final injunction on Minas-Rio project removed
n">Dec 21 (Reuters) - Global miner Anglo American said an injunction on installing an electricity transmission line at its Minas-Rio iron ore project in Brazil has been removed, clearing away the final hurdle for the project.
A Brazilian court removed two injunctions in September, letting the company restart construction at the mine, which has a capacity of 26.5 million tonnes per year.
The removal of the final injunction on Friday will allow the company to install a 90 km (55 mile) electricity transmission line.
The project has faced a series of delays since it was bought for $5.5 billion from Brazilian billionaire Eike Batista's MMX Mineracao e Metais in 2008.
The company raised the estimated cost of the Minas Rio project last month, telling investors it was unlikely to cost less than $8 billion.
US STOCKS-Wall St slides as fiscal deal unlikely before 2013
* Failure of Boehner's bill suggests compromise difficult
* Banking shares tumble, Citigroup and BofA shares drop
* Research In Motion shares slide 17 percent
* Dow down 1.4 pct, S&P 500 off 1.5 pct, Nasdaq off 1.5 pct
By Leah Schnurr
NEW YORK, Dec 21 (Reuters) - U.S stocks lost more than 1 percent on Friday after a Republican proposal for averting the "fiscal cliff" failed to pass, diminishing hopes that a deal would be reached soon in Washington.
Trading is expected to be volatile as investors view a fiscal agreement between the White House and Republicans before the end of the year as increasingly unlikely. Lower volume heading into next week's Christmas holiday could increase volatility. The CBOE Volatility Index, or VIX, was up 10 percent.
Late on Thursday, Republican House Speaker John Boehner conceded there were insufficient votes from his party to pass a tax bill, dubbed "Plan B," to help avert the so-called fiscal cliff - $600 billion of tax hikes and spending cuts due to start in January. The fear is that failure to come up with a solution to avoid the cliff could tip the U.S. economy into recession.
Plan B had called for tax increases on those who earn $1 million or more a year, and the bill's failure suggested it would be difficult to get Republican support for the more expansive tax increases that Obama has urged, making it less likely an agreement will be reached between the White House and Republicans before the end of the year.
While Friday's slide reflected investors' anxiety, it was not a large enough drop to suggest they believed a deal would be reached too late to avoid damage to the economy, said Mark Lehmann, president of JMP Securities, in San Francisco.
"You could have easily woken up today and seen the market down 300 or 400 points, and everyone would have said, 'That's telling you this is really dire,'" Lehmann said.
"I think you get into mid-January and (the talks) keep going like this, you get worried, but I don't think we're going to get there."
Banking shares, which outperform in times of economic expansion and have led the market on signs of progress with resolving the fiscal impasse, were among the laggards. Citigroup Inc sank 2.7 percent to $39.10, while Bank of America slid 2.5 percent to $11.22. The KBW Banks index lost 1.7 percent.
The Dow Jones industrial average dropped 185.38 points, or 1.39 percent, to 13,126.34. The Standard & Poor's 500 Index tumbled 20.88 points, or 1.45 percent, to 1,422.81. The Nasdaq Composite Index lost 46.64 points, or 1.53 percent, to 3,003.74.
Even with the declines, the S&P 500 is up nearly 1 percent for the week and about 13 percent for the year, though uncertainty over the cliff may prompt many traders to lock in gains as the year draws to a close.
The day's round of data indicated that the economy showed surprising signs of resilience in November as consumer spending rose by the most in three years and a gauge of business investment jumped.
But separate data showed consumer sentiment slumped in December. The S&P Retail Index fell 1.5 percent.
U.S.-listed shares of Research in Motion sank 17 percent to $11.72 after the Canadian company, which makes the BlackBerry, reported its first-ever decline in its subscriber numbers late on Thursday.
US STOCKS-Wall Street slides as fiscal deal unlikely before 2013
* Failure of Boehner's bill suggests compromise difficult
* Banking shares tumble; Citigroup and BofA shares drop
* Research In Motion shares slide more than 18 percent
* Indexes down: Dow 1.1 pct, S&P 500 1.2 pct, Nasdaq 1.3 pct
By Leah Schnurr
NEW YORK, Dec 21 (Reuters) - U.S. stocks tumbled more than 1 percent on Friday after a Republican proposal for averting the "fiscal cliff" failed to pass, diminishing hopes that a deal would be reached soon in Washington.
Trading was volatile as investors reckoned a fiscal agreement between the White House and Republicans before the end of the year was unlikely. Lower volume ahead of the Christmas and New Year holidays exaggerated market swings further, and the CBOE Volatility Index, or VIX, was up 6.5 percent.
Late on Thursday, Republican House Speaker John Boehner failed to muster enough votes from his party to pass a tax bill, dubbed "Plan B," to avert the so-called fiscal cliff, $600 billion of tax hikes and spending cuts due to start in January. If U.S. lawmakers don't agree soon on a budget that avoids the cliff, the U.S. economy could tip into recession.
"The failure with Plan B was disappointing, if not terribly surprising, but now there's a real lack of clarity about what will happen and markets hate that," said Mike Hennessy, managing director of investments for Morgan Creek in Chapel Hill, North Carolina.
The lack of support for Plan B, which called for tax increases on those who earn $1 million or more a year, suggested it would be difficult to get Republican support for the more expansive tax increases that President Barack Obama has urged. That, in turn, reduces the possibility of an agreement between the White House and Republicans before the end of the year.
Earlier on Friday, Boehner said congressional leaders and Obama must try to move on and work together.
While Friday's stock market slide reflected investors' anxiety, it wasn't a large enough drop to suggest they believed a deal would be reached too late to avoid damage to the economy, said Mark Lehmann, president of JMP Securities, in San Francisco.
"You could have easily woken up today and seen the market down 300 or 400 points, and everyone would have said, 'That's telling you this is really dire,'" Lehmann said.
"I think if you get into mid-January and (the talks) keep going like this, you get worried, but I don't think we're going to get there."
Banking shares, which outperform in times of economic expansion and have led the market on signs of progress with resolving the fiscal impasse, led declines. Citigroup Inc fell 1.8 percent to $39.44, while Bank of America slid 2.4 percent to $11.24. The KBW Banks index lost 1.4 percent.
The Dow Jones industrial average dropped 147.89 points, or 1.11 percent, to 13,163.83. The Standard & Poor's 500 Index fell 17.08 points, or 1.18 percent, to 1,426.61. The Nasdaq Composite Index lost 39.90 points, or 1.31 percent, to 3,010.49.
Even with the declines, the S&P 500 is up nearly 1 percent for the week and about 13 percent for the year, though uncertainty over the cliff may prompt many traders to lock in gains as the year draws to a close.
The day's round of data indicated the economy was surprisingly resilient in November; consumer spending rose by the most in three years and a gauge of business investment jumped.
But separate data showed consumer sentiment slumped in December. The S&P Retail Index fell 1.3 percent.
U.S.-listed shares of Research in Motion sank 19.8 percent to $11.32 after the Canadian company, which makes the BlackBerry, reported its first-ever decline in its subscriber numbers on Thursday. A new fee structure for its high-margin services segment also concerned investors.
Herbalife dropped for an eighth day in a row. Investor Bill Ackman on Thursday ramped up his campaign against the company. Herbalife skidded 17.8 percent to $27.72 and has shed more than 35 percent this week.
UPDATE 2-EU charges Samsung with abusing vital telecoms patent
* Apple, Samsung locked in disputes in at least 10 nations
* Samsung says confident Commission will find in its favour
BRUSSELS Dec 21 (Reuters) - The European Commission charged Samsung Electronics on Friday with abusing its dominant position in seeking to bar rival Apple from using a patent deemed essential to mobile phone use.
The Commission sent a "statement of objections" to the South Korean group, with its preliminary view that Samsung was not acting fairly.
"Intellectual property rights are an important cornerstone of the single market. However, such rights should not be misused when they are essential to implement industry standards, which bring huge benefits to businesses and consumers alike," Competition Commissioner Joaquin Almunia said in statement.
Apple and Samsung, the world's top two smartphone makers, are locked in patent disputes in at least 10 countries as they vie to dominate the lucrative mobile market and win over customers with their latest gadgets.
The filing of competition objections is the latest step in the Commission's investigation. After notifying Samsung in writing, the company will have a chance to reply and request a hearing before regulators.
If the Commission then concludes that the firm has violated the rules, it could impose a fine of up to 10 percent of the electronics firm's total annual turnover.
Technology companies are increasingly turning to the European Commission as the European Union's competition authority, to resolve their disputes. The Commission is also investigating Google and Microsoft.
In the case of Samsung, its standard-essential patents (SEPs) relate to the EU's 3G UMTS standard. When this was adopted in Europe, Samsung committed to license the patents fairly to competitors, the Commission said.
However, it began seeking an injunction in 2011 in various EU member states against Apple's use of these patents. The Commission opened its investigation in January 2012.
Samsung said it was studying the Commission's statement. It said it would cooperate fully and "firmly defend ourselves against any misconceived allegations".
"Samsung is confident that, in due course, the Commission will conclude that we have acted in compliance with European Union competition laws."
U.S. holiday travel expected to be difficult as storm hits
By Mary Wisniewski
CHICAGO | Fri Dec 21, 2012 2:16pm EST
CHICAGO Dec 21 (Reuters) - Holiday travel could be a challenge from Michigan to the central Appalachian mountains as a blast of winter weather including heavy snow and high winds hits the region through Saturday, meteorologists said on Friday.
"Right now the Great Lakes are getting hit, from Lake Michigan to the east," said Pat Slattery, spokesman for the National Weather Service. "The big story for most people is it's going to mess travel up completely."
Pittsburg is expected to take the biggest blow of any major metropolitan area, with 10-18 inches expected to fall by Saturday evening. Western New York, including Buffalo, is looking at up to 14 inches, Slattery said.
The winter blast is part of the same system that buried parts of Iowa, Nebraska and Wisconsin Thursday in more than a foot of snow in some places, shutting down roads and schools.
More than 320,000 homes and businesses were without power in the eastern half of the United States Friday, following a series of snow and rain storms, power companies said. The hardest hit states include Michigan, New Jersey, New York, Illinois, Indiana and Wisconsin.
The storm system was also fueling strong winds in the east and southeast, with gusts of between 50 and 60 miles per hour. The winds were strong enough to knock down tree limbs, weaken trees and send unsecured objects into the air, noted Accuweather.com senior meteorologist Alex Sosnowski.
"It is possible the winds could disturb some repair work being done in the wake of Sandy," wrote Sosnowski in an article on the website, referring to the hurricane that devastated the east coast in late October.
The winds will likely result in flight delays in the region from Washington, D.C. to Philadelphia, New York City and Boston into the weekend. On the west coast, heavy rains are causing delays at San Francisco International Airport, according to Accuweather.com.
The sun is shining in Iowa Friday, and the state's Department of Transportation has "every person and every piece of equipment we have out on the roads," according to state maintenance engineer Bob Younie.
"Salt and the sun is going to be our friend today," Younie said. "I'd like think we're going to get the roads back to pretty drivable conditions."
The storm Thursday contributed to a 25-car accident near Clarion, Iowa that left three people dead.
The winter storm, named Draco by the Weather Channel, began Tuesday in the Rocky Mountains, marking a sharp change from the mild December experienced by most of the nation. High winds kicked up a dust storm in western Texas on Wednesday leading to one death in a traffic accident near Lubbock.
Chicago got just 0.2 of an inch of snow through midnight, ending a record streak of 290 days without measurable snow, according to Accuweather.com.
Other snowfalls set records Thursday, including Madison, Wisconsin with 13.3 inches, beating a previous record of 4.6 inches for the day set in 2000. Even heavier snow fell in Middleton, south of Madison, which got 19.5 inches, Slattery said.
Also setting a record was Des Moines, Iowa, with 12.4 inches, breaking a record of 4.5 inches set in 1925, according to Accuweather.com (Reporting by Mary Wisniewski; Additional reporting by Scott DiSavino in New York; Editing by Richard Chang)
UPDATE 1-U.S. EPA sets new emission limits on industrial boilers
(ADDS ADDITIONAL REACTIONS AND COST ESTIMATE FROM THE NAM)
WASHINGTON Dec 21 (Reuters) - The U.S. Environmental Protection Agency has finalized rules to curb pollution from industrial boilers and large incinerators, revising earlier versions to target only the largest polluters and give them more time to comply.
The agency on Friday formalized standards it initially released in March 2011 for reducing toxic air pollution, including mercury and particle pollution, known as soot, from boilers and solid waste incinerators.
Boilers, which are typically fired by coal, oil, natural gas and biomass, are used to power heavy machinery and provide heat for industrial processes.
The new rules target roughly 2,300 boilers, or less than one percent of the 1.5 million units now operating in the United States, requiring them to meet numerical limits on their release of air toxins.
These large-source boilers, found mainly at refineries, chemical plants, and other industrial facilities, will have three years to comply and can be granted a fourth year if needed to install controls, according to the EPA.
The rule also targets 106 industrial solid waste incinerators, which have five years to comply with the EPA standards.
"The adjusted standards require only the largest and highest-emitting units to add pollution controls or take steps to reduce air pollution, making the standards affordable, protective and practical," according to an EPA factsheet.
Some environmental groups said the EPA's handling of the long-delayed boiler rules signals that the agency's upcoming regulation will be more flexible to industry concerns.
"These watered-down rules suggest the Obama administration will collaborate more with industry in the second term," said Frank O'Donnell of Clean Air Watch.
The EPA first introduced the rule in 2005, but the U.S. Circuit Court of Appeals for the D.C. Circuit vacated it in 2007.
The rule was re-proposed in June 2010 but industry groups slammed that version, calling its set limits unachievable, prompting the EPA to relax and reintroduce the rule.
"After years of delays, the finalized Boiler MACT standard ends uncertainty and allows businesses to move forward with one standard that applies across the nation, leveling the playing field," said Howard Learner, executive director of the Environmental Law & Policy Center.
"MACT" is an acronym for Maximum Achievable Control Technology.
Despite relaxing the rules, the EPA said the standards will prevent up to 8,100 premature deaths, 5,100 heart attacks, and 52,000 asthma attacks. The agency estimated that Americans will receive $13 to $29 in health benefits for every dollar spent to meet the final standards and create a small net increase in jobs.
Some industry groups were still wary.
"Several billions of dollars in capital spending will be necessary to comply. This is a significant investment for an industry still recovering from the economic downturn, especially in light of the growing cumulative regulatory burden we face," the American Forest & Paper Association, the national lobby group of the forest products industry, said on Friday.
The National Association of Manufacturers (NAM), an opponent of EPA regulations, said in November that compliance costs for the agency's six air pollution rules, including the boiler rule, could total $111.2 billion by EPA estimates and up to $138.2 billion by industry estimates.
The lobby group said the boiler rule would cost covered sources $2.7 billion in annualized costs in 2013 and $14.3 billion in upfront capital spending - higher than EPA estimates of $1.9 billion in annualized costs in 2013 and $5.1 billion in capital spending.
Other groups that have opposed the rules include the Industrial Energy Consumers of America - representing the chemicals, cement, aluminum and other industries.
Bob Bessette, the President of the Council of Industrial Boiler Owners (CIBO), cautiously welcomed the revised rule but said it is still studying its economic impact.
"Hopefully, the changes EPA has made will decrease the economic and jobs impact on the still-struggling manufacturing, commercial, and institutional sectors and national economy," he said. (Reporting By Valerie Volcovici; Editing by Nick Zieminski and David Gregorio)
UPDATE 1-Expedia to acquire stake in German travel site
n" readability="46">Dec 21 (Reuters) - Expedia Inc said on Friday it would acquire a 61.6 percent equity stake in trivago, a German travel search engine that focuses on hotels, for roughly $632 million in cash and common stock, a move that will expand Expedia's worldwide reach.
Expedia, whose brands include Hotwire and Hotels.com, said in a statement that trivago has doubled its revenue each year since 2008 and currently expects about 100 million euros (about $132 million) in net revenue for 2012. It added trivago features search results from more than 600,000 hotels over 140 booking sites in more than 30 countries.
The acquisition "probably gives them some additional marketing opportunities," said Michael Millman of Millman Research Associates.
He added the Expedia purchase was "consistent" with Priceline.com's move to expand its travel research and advertising capabilities by announcing an acquisition of Kayak Software.
The Expedia deal is expected to close in the 2013 first half, subject to approval from competition authorities. Expedia said it expects the purchase to add to per-share profit excluding items next year.
The management team of trivago is expected to continue to operate independently from Dusseldorf, Germany, after the acquisition closes.
Shares of Expedia, which competes with Priceline and Orbitz Worldwide Inc, were down about 2 percent to $59.70 on Friday.
U.S. EPA sets new emission limits on industrial boilers
WASHINGTON | Fri Dec 21, 2012 1:11pm EST
WASHINGTON Dec 21 (Reuters) - The U.S. Environmental Protection Agency has finalized rules to curb pollution from industrial boilers and large incinerators, revising earlier versions to target only the largest polluters and give them more time to comply.
The agency on Friday formalized standards it initially released in March 2011 for reducing toxic air pollution, including mercury and particle pollution, known as soot, from boilers and solid waste incinerators.
Boilers, which are typically fired by coal, oil, natural gas and biomass, are used to power heavy machinery and provide heat for industrial processes.
The new rules target roughly 2,300 boilers, or less than one percent of the 1.5 million units now operating in the United States, requiring them to meet numerical limits on their release of air toxins.
These large source boilers, found mainly at refineries, chemical plants, and other industrial facilities, will have three years to comply and can be granted a fourth year if needed to install controls, according to the EPA.
The rule also targets 106 industrial solid waste incinerators, which have five years to comply with the EPA standards.
"The adjusted standards require only the largest and highest-emitting units to add pollution controls or take steps to reduce air pollution, making the standards affordable, protective and practical," according to an EPA factsheet.
The rules have taken a long road toward Friday's finalization. The EPA first introduced the rule in 2005, but it was vacated by the U.S. Circuit Court of Appeals for the D.C. Circuit in 2007.
The rule was re-proposed in June 2010 but industry groups slammed that version, calling its set limits unachievable, prompting the EPA to relax and reintroduce the rule.
"After years of delays, the finalized Boiler MACT standard ends uncertainty and allows businesses to move forward with one standard that applies across the nation, leveling the playing field," said Howard Learner, executive director of the Environmental Law & Policy Center.
"MACT" is an acronym for Maximum Achievable Control Technology.
Despite relaxing the rules, the EPA said the standards will prevent up to 8,100 premature deaths, 5,100 heart attacks, and 52,000 asthma attacks. The agency estimated that Americans will receive $13 to $29 in health benefits for every dollar spent to meet the final standards and create a small net increase in jobs.
Some industry groups were still wary.
"Several billions of dollars in capital spending will be necessary to comply. This is a significant investment for an industry still recovering from the economic downturn, especially in light of the growing cumulative regulatory burden we face," the American Forest & Paper Association, the national lobby group of the forest products industry, said on Friday.
The National Association of Manufacturers, an opponent of EPA regulations, said in November that compliance costs for the agency's six air pollution rules, including the boiler rule, could total $111.2 billion by EPA estimates and up to $138.2 billion by industry estimates. (Reporting By Valerie Volcovici; Editing by Nick Zieminski)
Union Pacific to adjust signal at Texas crash site
By Matthew Waller
SAN ANGELO, Texas | Fri Dec 21, 2012 12:18am EST
SAN ANGELO, Texas Dec 20 (Reuters) - Union Pacific Corp said on Thursday that it will adjust the signal system at the Midland, Texas, train crossing where four veterans were killed when a freight train the company operated slammed into a parade float last month.
The company said that the crossing meets federal regulations but that it plans to "improve buffer time," which it described as time beyond what is required for the signal system.
"The buffer time is added to further ensure that the signal system always provides the warning time required by the federal government - as it did on the day of the accident that occurred on Nov. 15," Union Pacific spokeswoman Raquel Espinoza said in a statement.
The collision between the train and the parade float occurred at the start of a weekend of festivities to honor veterans wounded in the Iraq and Afghanistan wars. At least 14 people were injured in the crash.
Investigators with the National Transportation Safety Board said the warning bells began sounding and lights flashed at the intersection 20 seconds before the train arrived.
Union Pacific did not say how long before the arrival of a train the new signals would activate.
Two lawyers representing some of the injured veterans and their wives said Thursday that their experts found the problem with the crossing and that Union Pacific agreed to fix it. The group is suing Union Pacific as well as the company that provided the flatbed trailer used as a float.
"Every one of our clients made it very clear that their No. 1 priority in this case is to make sure nothing like this ever happens again," said one of the lawyers, Bob Pottroff. "There are another 100,000 (crossings) or so out there that we need to make sure don't have similar problems."
Union Pacific, citing a National Transportation Safety Board investigation, says that the crash was caused by the truck failing to stop at a red light.
"We would not be having this conversation had the truck not driven through the active railroad crossing signals," Espinoza said.
Smith Industries, the oilfield equipment company that provided the flatbed trailer, has declined to comment.
China shares slip from 4-mth highs, but still post 3rd weekly gain
HONG KONG | Fri Dec 21, 2012 2:03am EST
The CSI300 of the top Shanghai and Shenzhen closed down 0.5 percent on Friday, but rose 0.7 percent on the week to 2,372 points. The Shanghai Composite Index shed 0.7 percent on Friday but inched up 0.1 percent this week.
Both indexes have had gains for three straight weeks. (Reporting by Clement Tan; Editing by Richard Borsuk)
GLOBAL MARKETS-Asian shares slide as U.S. budget impasse creates anxiety
* MSCI Asia ex-Japan, Nikkei both turn negative
* Yen firms a tad on "cliff" woes but pinned near lows
* U.S. House of Representatives may reopen Dec. 27
* Oil, gold, euro slump as fears of budget crunch grow
* European shares likely to decline
By Chikako Mogi
TOKYO, Dec 21 (Reuters) - Asian shares slid on Friday after a Republican proposal to deal with a U.S. fiscal crunch failed to get enough support, deepening uncertainty over the U.S. can avert the "fiscal cliff" of automatic spending cuts and tax increases set to start Jan. 1.
"Markets disliked signs of further delay in talks, with the risk that a deal may not be reached by the end of the year deadline," said Yuji Saito, director of foreign exchange at Credit Agricole in Tokyo. "It clearly hit risk sentiment."
The U.S. House of Representatives will adjourn until after Christmas, Republican Representative Peter Roskam said on Thursday, after House Speaker John Boehner's proposed tax bill designed to avert the fiscal cliff failed to pass.
U.S. stock index futures fell sharply. S&P 500 stock futures slipped 1.7 percent, while Dow Jones stock futures and Nasdaq futures both lost 1.5 percent.
European shares will likely drop also, with financial spreadbetters predicting London's FTSE 100, Paris's CAC-40 and Frankfurt's DAX will open down as much as 0.6 percent.
The worrying U.S. political news sparked selling in Asian shares, with MSCI's broadest index of Asia-Pacific shares outside Japan wiping out earlier gains to tumble 0.7 percent. The index was on track to end the week down 0.6 percent, the first weekly loss in five weeks.
Markets broadly had been supported by optimism that U.S. lawmakers would avoid the fiscal cliff, which threatens to derail the U.S. economy and drag down global growth with it.
Boehner's proposal was aimed at extracting concessions from the White House, which had threatened to veto it, and advance talks closer to a deal.
The Republican-led U.S. House of Representatives, which abruptly recessed on late Thursday, may return as soon as Dec. 27 with a yet-to-be-decided new plan, said a senior party aide.
"This is a major setback for a Fiscal Deal compromise between the two parties. I would say that chances of a deal are down to maybe 40 percent from 65 percent -- despite the dysfunction in Washington D.C," said Douglas A. Kass, founder of hedge fund Seabreeze Partners Management Inc.
Risk assets were sold off, from shares, oil to currencies such as the Australian dollar and the euro. The yen firmed slightly, though it was pinned near multi-month lows versus the dollar and the euro on expectations for more aggressive Bank of Japan easing next year to drive the economy out of deflation.
"The delay in resolving the U.S. fiscal cliff problem is raising concern as the market expected some sort of positive direction out of the talks by the end of the year," said Fujio Ando, a senior managing director at Chibagin Asset Management.
Safe-haven government bond prices rose, with U.S. 10-year Treasury yields moving away from an 8-week high hit this week, falling about 6 basis points to 1.74 percent. Benchmark 10-year Japanese government bond yields also ticked down half a basis point to 0.765 percent.
Inflows into U.S. Treasuries underpinned the U.S. dollar, which inched up 0.1 percent against a basket of major currencies .
Jim Barnes, senior fixed income manager at National Penn Investors Trust Co. in Wyomissing, Pennsylvania, saw Treasuries continuing to gain once U.S. markets open later, but expected a correction by the end of the day.
"Treasury yields will likely fall Friday morning and will begin to reverse course in the afternoon as investors become more optimistic a deal will be reached," Barnes said.
"So far, the market has been handling setbacks in negotiation talks very well. With still a little bit of time left on the clock, this time around will be no different."
Along with uncertainties surrounding the future of U.S. budget talks, a firmer dollar also weighed on dollar-based commodities.
The euro fell 0.3 percent to $1.3206, off an 8-1/2-month high of $1.33085 touched on Wednesday.
U.S. crude futures dropped more than $1 to $89.10 a barrel, but oil was still on track for its biggest weekly gain since August.
Spot gold extended losses to near a four-month low touched on Thursday, and was last down 0.1 percent to $1,644.90 an ounce. Gold remained on course for a 12th annual growth on rock-bottom interest rates, concerns over the euro zone financial stability and diversification into bullion by central banks.
YEN GAINS SLIGHTLY
Anxieties over the U.S. budget negotiations also took their toll on Japan's Nikkei average, which had been supported by a weaker yen. The Nikkei gave up all of earlier gains to close down 1 percent and below the key 10,000 mark it reclaimed for the first time since early April on Wednesday.
The dollar was down 0.4 percent to 84.02 yen, moving away from a 20-month high of 84.62 yen hit on Wednesday.
The euro slumped 0.7 percent to 110.91 yen also off a 16-month high of 112.59 yen reached on Wednesday.
The yen was kept under pressure after the Bank of Japan further eased monetary policy as expected on Thursday, with investors anticipating that the central bank will be persuaded to pursue more drastic measures next year.
The incoming prime minister, Shinzo Abe, has called for bolder action by the central bank to help bring Japan out of decades-long deflation.
For all the fears of a fiscal cliff debacle to come, several data series showed the United States remained on a recovery track, helping to underpin the dollar.
Asian buyers to deepen Iranian crude import cuts in 2013
* Asian buyers to further slash Iranian imports as sanctions tighten
* Reduction likely from 10 to 20 percent from this year's level
* Cuts may result in a further loss of $5 bln for the year for Iran
By Chen Aizhu and Manash Goswami
BEIJING/SINGAPORE, Dec 21 (Reuters) - Asian buyers of Iranian crude will deepen import cuts in 2013 and struggle to send cash to Tehran to pay for oil as tightening Western sanctions choke the flow of hard currency to Iran's coffers.
Tough sanctions from the United States and Europe to force Iran to curb its nuclear programme have already cut Iran's oil exports by more than half this year, costing it more than $5 billion a month. The reduced cash flow has contributed to a plunge in the value of Iran's currency, the rial.
Iran says it is enriching uranium to fuel power plants, not make bombs.
Almost all of Iran's remaining exports flow to China, South Korea, Japan and India. The additional cuts Asian importers will make in 2013 would translate into a fall in sales of about 135,000 barrels per day (bpd), resulting in a loss of about $5 billion next year based on today's oil price, according to Reuters calculations.
The United States requires buyers of Iranian crude to progressively cut imports to ensure they secure exceptions to the sanctions when they come up for review every 180 days.
Making matters worse for Iran is a little-noticed provision in U.S. sanctions, which goes into effect on Feb. 6, that states funds being used to pay for oil must remain in a bank account in the purchasing country and can be used only for non-sanctioned, bilateral trade between that country and Iran.
Any bank that repatriates the money or transfers it to a third country faces a sanction risk, including being cut off from the U.S. financial system.
That could halt most of the flow of petrodollars to Iran, given that the value of its oil exports is far higher than what it imports from its biggest customers.
Saudi Arabia, Iraq and West Africa are some of the producers that have gained as Iran's market has shrunk. To continue with exports, Iran is becoming increasingly creative in dodging Western sanctions, managing to sell a rising volume of fuel oil to generate revenue equal to up to a third of its crude exports.
Reuters previously reported that Iran had exported its own fuel oil to Malaysia on a National Iranian Tanker Company vessel, before transferring it at sea to a Vitol-chartered tanker. Iran also used a little-known port off the East Malaysia coast to hide millions of barrels of oil.
CHINA
Iran's top oil buyer and the world's second-largest importer, China, may reduce its purchases by a further 5 to 10 percent in 2013, according to preliminary indications, industry sources said. That would indicate a reduction of 20,000 to 40,000 bpd, according to Reuters calculations.
"A general policy seems to be 'let's manage and control the risk in lifting Iranian oil'," a Chinese industry official said. "Transportation was not a huge issue but Sinopec still sees it a political risk dealing with Iran."
Sinopec is China's state oil company and the top Asian refiner.
China reduced imports from Iran by 22 percent to 426,000 barrels per day (bpd) from January-October in 2012 from the same months a year earlier.
China is Iran's top trading partner and China has repeatedly voiced its opposition to unilateral sanctions outside the purview of the United Nations, such as those imposed by the United States.
But it cut imports sharply in the first quarter of 2012, as exclusively reported by Reuters, due to the differences in contract terms. Later, the flow was cut further as Iran struggled to ship the oil to China after EU sanctions halted the provision of insurance for ships transporting Iranian crude.
INDIA FOLLOWS CHINA
India plans to cut oil imports from Iran by 10 to 15 percent in the next fiscal year, and more if Iran does not lower prices to help cover higher costs resulting from Western sanctions, Reuters reported on Dec. 19.
"Next year our imports will be 10 percent to 15 percent less than this year," said a government official with direct knowledge of the matter, who declined to be identified because he is not authorised to speak to the media.
"If they don't cut prices, the decline will be substantial. Indian refiners have genuine problems with credit availability."
The pressure India is putting on Iran for better contract terms is similar to what China did early this year when negotiating annual term volumes with the Islamic Republic.
As rising international pressures forced other buyers out of the market for Iranian oil, Sinopec strong-armed Iran into giving it better terms for its annual oil purchases. As China haggled with the National Iranian Oil Corporation (NIOC) over price and terms, imports fell by nearly a third in the first quarter of the year.
JAPAN, SOUTH KOREA
A steeper cut will mean a reduction in imports by more than half for Japan and South Korea from the pre-sanctions levels of 2011 as the two have already slashed purchases by 40 percent this year.
Japan's oil imports from Iran may be about 15 percent lower next year, capped roughly at 160,000 bpd and may possibly be cut further, Yasushi Kimura, the chairman of JX Nippon Oil & Energy Corp, the country's top refiner, told reporters.
Japan's imports of Iranian crude oil fell to zero in July for the first time since 1981, according to Trade Ministry data, as the EU sanctions barred insurance companies providing cover on tankers carrying oil from Iran.
Shipments resumed after the government agreed to provide sovereign cover to local shipping companies to bring the oil, but the overall volume for January-October is down 41 percent to about 188,000 bpd, ministry data show.
Further cuts by smaller Japanese buyers would make it difficult to arrange shipping, industry sources familiar with the matter said. They said bigger buyers such as JX and Showa Shell, which together consume about 80 percent of Japan's total Iranian imports, would have room to reduce purchases further.
Following the cuts made this year, smaller buyers such as Idemitsu and Cosmo Oil have been forced to lift cargoes on a sporadic basis. If they make additional cuts, it would mean they would be buying less than one cargo, making shipping difficult. One Middle East crude cargo is typically about 500,000 bbls.
"I have the impression that it would be impossible to import the same volumes as this year in order to get the exemption," an industry source familiar with the talks said. "I don't know how much we will reduce by, but we are mentally prepared."
South Korean refiners will cut imports of Iranian crude during the six months to May by about a fifth from a year earlier, Reuters reported on Dec. 10.
The country hasn't spelt out its plans for the rest of the year, but all indications point to a reduction by the same amount to ensure it qualifies for the exception from sanctions.
The cut from December to May would imply imports of about 147,814 bpd, since the country imported 184,767 bpd of Iranian crude from December 2011 to May 2012.
South Korea became the first major Asian consumer of Iranian crude to announce a halt in imports in July. As a result, imports from Iran slumped 40 percent to 146,069 bpd in the first 10 months of the year.
Taiwanese buyers are still in talks with NIOC for next year's contract volume. They are likely to keep the volumes unchanged, with an understanding that the actual lifting may be a lot lower due to sanctions.
"We couldn't charter a boat because of shipping insurance issues so that made delivery a problem this year," a source said. Taiwan increased its supply from other Gulf producers such as Saudi Arabia, Kuwait, Oman, UAE and Iraq to cover the shortfall, government data showed.
Malaysia's Petronas early this year indefinitely suspended its annual contract to purchase crude from Iran. It is buying Middle Eastern and West African spot cargoes. (Reporting by Aizhu Chen in Beijing, Nidhi Verma in New Delhi, Meeyoung Cho in Seoul, Osamu Tsukimori in Tokyo; Writing by Manash Goswami; Editing by Simon Webb and Robert Birsel)
Indonesians beef about import curbs as meat runs out
* Import curbs part of plan for food self-sufficiency
* But so far result is lower supply, higher prices
* Street vendors pelt govt building with meatballs in protest
By Neil Chatterjee and Andjarsari Paramaditha
JAKARTA, Dec 21 (Reuters) - When Barack Obama visited Indonesia in 2010, he tucked in to a steaming bowl of meatball broth, known as bakso, served to remind him of his childhood in Jakarta. But the U.S. president may be out of luck if he wants another helping on a visit next year.
Bakso sellers, normally street vendors with pushcarts, are struggling to afford beef and on Thursday took the novel step of pelting the trade ministry building with meatballs in protest against prices doubling due to sharp restrictions on meat imports.
These curbs are part of a grand plan for the world's fourth most populous nation to become self-sufficient in key food commodities, but the result so far has only been lower supply and surging prices.
"There's no meat in the market. Maybe we'll have bakso tomorrow," said Gerang, sitting next to a chained up soup tureen at his empty bakso stand near Obama's old school in the exclusive Jakarta district of Menteng.
The two other bakso stalls in the area have already disappeared, after President Susilo Bambang Yudhoyono's government slashed 2012 import quotas for live cattle by over a third and beef by nearly two-thirds.
Next year quotas will be cut by another 30 percent for cattle and 6 percent for beef, even as consumption is seen rising 13 percent.
And beef stocks are dwindling, with officials saying Jakarta has run out of its annual import quota for the meat.
Some bakso sellers have been making up for the lack of beef with pork, considered an outrage in the world's most populous Muslim nation, as well as other unsavoury items.
"I stopped eating bakso two weeks ago after I found a small tail in my soup. I vomited right after that. I thought it was only an urban legend, but it happened to me," said Rudi Afriansyah, a diner at a food stall in Jakarta.
Indonesia has been partly protected from the global economic downturn in recent years by its domestic production of commodities such as palm oil and rice, creating calls by nationalist politicians for even greater self-reliance.
This has also led to taxes on imports of wheat flour, corn and soybeans. Last month Yudhoyono put domestic output and control of imports at the heart of a new food law, signalling further policies regulating trade in commodities are likely.
"Food should be available and affordable, but now it is not available and not affordable. It will get worse because they are trying to achieve self-sufficiency," said Thomas Sembiring, executive director of the Indonesian Meat Importers Association.
HOLY COW
The moves are affecting Australia as the top exporter of beef and live cattle to neigbouring Indonesia. The Australian Livestock Export council's chief Alison Penfold said exports were now significantly lower to Indonesia and farmers were pursuing other markets to make up for the loss.
"The Indonesian government has an admirable goal ... but is trying to force this goal by restricting imports from Australia," said David Farley, managing director of major beef cattle firm Australian Agricultural Company, in a commentary in the Jakarta Post newspaper this week.
"A more measured policy would be to increase collaboration with the Australian beef industry to supply Indonesia with the cattle and technical expertise it needs."
Indonesia's local beef output is forecast to rise to 449,000 tonnes in 2013, but this still leaves a shortfall as beef consumption is seen climbing at the same rate to 549,000 tonnes, with chains such as Burger King and local steak houses like Holycow spreading to cater to a burgeoning middle class.
"Self-sufficiency in beef is not rational. They should look for self-sufficiency in other commodities but not in beef. An additional 1 kg per capita per year will need an additional 1.5 million cattle ... and it takes four years to calf in cattle before slaughter," said Sembiring. (Additional reporting by Michael Taylor and Yayat Supriatna in Jakarta, Colin Packham in Sydney; Editing by Joseph Radford)
Regus offers to buy MWB Business Exchange 40 mln stg
n" readability="55">Dec 21 (Reuters) - Office space supplier Regus Plc SA said its unit offered to acquire MWB Business Exchange Plc for 40 million pounds ($65.04 million) to expand its portfolio to new locations through MWB's business centres.
Regus' wholly owned unit, Marley Acquisitions Ltd, offered to pay 61.576 pence per share to MWB shareholders - a premium of about 20 percent to the stock's Thursday close.
Regus, which offers ready-to-use offices for rentals, said it would identify duplication and potential efficiencies in certain areas and reduce headcount in the combined group.
It also plans to delist MWB's shares from London's AIM upon completion of the deal.
Hotel operator MWB Group Holdings Plc owns 75.22 percent stake in MWB.
MWB Group Holdings, which filed a notice of intention to appoint administrators last month, has 8 weeks to seek other potential buyers for its stake, Regus said in a statement.
Regus said it could make a revised offer for MWB if there is a rival bid, and MWB will be obliged to accept such an offer if it meets certain criteria.
MWB, which has 64 business centres across the UK, reported a net loss on ordinary activities from continuing operations before tax of 14.8 million pounds and revenue of 121.1 million pounds for the year ended June 30, 2012.
Regus said it would fund the deal with available cash resources.
Shares in Regus were trading up about 3 percent at 104.215 pence at 0821 GMT on the London Stock Exchange, while MWB's stock was up about 15 percent.
Hong Kong shares have worst day in 3 weeks, China slips too
* HSI -0.8 pct, H-shares -1.1 pct, CSI300 -0.5 pct
* Investors cut risk ahead of holiday next week on cliff concerns
* A-shares outperform HK 3rd week in a row
* China alcohol sector hit by more contamination reports
By Clement Tan
HONG KONG, Dec 21 (Reuters) - Hong Kong shares suffered their worst loss in three weeks on Friday as investors reduced risky holdings at the end of the year's last full trading week when the Republican House Speaker abandoned his Plan B bill to avert a "fiscal cliff"."
Onshore Chinese markets also fell, with weakness in alcohol and resource-related sectors helping trim index gains on the week, but they are still set to outperform offshore peers for a third straight week.
The Hang Seng Index went into the midday trading break down 0.8 percent at 22,486.7, slipping from a 17-month high. If losses persist, this would be its worst day since Dec. 3. The benchmark is now down 0.5 percent on the week.
The China Enterprises Index of the top Chinese listings in Hong Kong fell 1.1 percent. It is now down 0.7 percent on the week. Both Hong Kong indexes are set for their first weekly loss in five.
On the mainland, the Shanghai Composite Index and the CSI300 of the top Shanghai and Shenzhen listings each fell 0.5 percent. On the week, they are still set for a third-straight weekly gain, up 0.3 and 0.8 percent.
"It certainly looks like people are cutting risk (in Hong Kong) before the holidays next week, but things are not that bad," said Benjamin Chang, chief executive officer of LBN Advisors, a firm that manages more than $400 million in two China funds.
Republican lawmakers delivered a stinging rebuke to their leader, House of Representatives Speaker John Boehner, late on Thursday when they failed to back an effort designed to extract concessions from President Barack Obama in fiscal cliff talks.
On Friday, Chinese banking and energy majors were among the biggest losers of the Hang Seng Index components. Industrial and Commercial Bank of China (ICBC) dived 2.1 percent, while China Coal Energy Co Ltd fell 1.8 percent.
A more than 40 percent bounce from July 12 lows had helped ICBC had return to its highest since early March on Thursday. Friday's losses trimmed ICBC's gains on the year to 18.9 percent, compared to the 22 percent jump on the Hang Seng Index.
Chinese alcohol counters were hit by fresh mainland media reports of more products containing the toxic plasticizer elements, crimping a mild December rebound from the November rout suffered when the first allegations first emerged.
Jiugui Liquor fell 3.3 percent, while the sector's premium brand Kweichow Moutai fell 0.6 percent. Moutai is now up 0.5 percent on the month after diving 12.7 percent in November, its worst monthly loss in more than two years.
Gold miners were also weak as gold prices neared four-month lows, as investors took profit on rare earth producers which outperformed earlier this week.
Shandong Gold shed 1.5 percent, while Inner Mongolia Baotou Steel Rare-Earth Group lost 1.7 percent, cutting its weekly gain to 11.8 percent.
UPDATE 2-Italy's Fincantieri in $1.2 bln bid to buy shipbuilder STX OSV
* Fincantieri to buy 50.75 pct STX OSV stake at S$1.22 each
* To launch offer for rest of STX OSV after April 2013 at same price
* Offer was at 12.9 pct discount to last traded price
* Analysts say offer undervalues STX OSV
* STX OSV shares down 4.6 pct (Adds analyst comments, share price update)
By Charmian Kok
SINGAPORE, Dec 21 (Reuters) - Italian shipbuilder Fincantieri SpA plans to acquire Singapore-listed STX OSV Holdings for $1.2 billion to compete better in an industry dominated by South Korean companies.
Fincantieri said on Friday it will buy a 50.75 percent stake in offshore vessel builder STX OSV from STX Europe, a unit of South Korea's STX Corp, for S$730 million ($598.90 million), or S$1.22 a share.
After the completion of the stake purchase by end-April, Fincantieri will launch a mandatory offer for the remaining shares in STX OSV, also at S$1.22 each.
The Italian company expects the deal to make it one of the world's top five shipbuilders. Hyundai Heavy Industries Co Ltd and Samsung Heavy Industries Co Ltd are the world's top two shipbuilders.
The purchase price represents a discount of 12.9 percent to STX OSV's closing stock price on Dec. 20, triggering some scepticism from analysts about the public offer succeeding in full.
"The sale price was somewhat low considering that STX OSV has a relatively strong balance sheet," DMG & Partners said in a note. The brokerage does not expect Fincantieri's general offer, which it said was unattractive to minority shareholders, to succeed.
STX OSV shares were down 4.6 percent at S$1.335 in Friday morning trading after briefly being suspended. Still, they were up 12.9 percent since the start of the year.
PREFERRED BIDDER
Cash-strapped STX Corp said in August it had chosen Fincantieri as the preferred bidder for its stake in STX OSV. The highly-leveraged South Korean company has been selling stakes in its affiliates, including STX Energy, to raise cash.
STX OSV was listed in Singapore at the end of 2010. It has posted average revenues of about 1.6 billion euros ($2.12 billion) in the last three years, Fincantieri said in a statement.
Brokerage CIMB described the offer as "low ball" valuing the company at 6.5 times its 2013 price-to-earnings and 2.2 times its 2012 price-to-book value. That compares with a 12-month forward price-to-earnings of 10.3 times for Hyundai Heavy and 15.7 times for Ezion Holdings Ltd, according to StarMine data.
"Though we understand Korean parent company STX Corp's urgency to restructure its balance sheet, the sale price undervalues STX OSV," CIMB said in a research report.
After buying STX OSV, Fincantieri will own 21 shipyards, with nearly 20,000 employees, generating revenues of 4 billion euros, the Italian shipbuilder said.
"Fincantieri will become one of the top five shipbuilders worldwide and the leading western producer capable of competing with its Asian peers," it said.
Fincantieri expects the S$1.45 billion deal to be financed from internal resources and a syndicate loan provided by several banks including BNP Paribas and Unicredit. ($1 = 0.7555 euros) ($1 = 1.2189 Singapore dollars) (Editing by Muralikumar Anantharaman)
UPDATE 2-Crane to buy privately held MEI Conlux for $820 mln
* Deal to add about 25 cents/shr to Crane earnings within 1st year
* Synergies to grow to $25 mln a year pretax by 2015
* Company reaffirms 2012 EPS outlook
* Sees preliminary EPS of $4.05 to $4.20 in 2013
By Sakthi Prasad
Dec 20 (Reuters) - U.S. diversified manufacturer Crane Co said it will buy MEI Conlux Holdings and its Japanese affiliate for about $820 million from private equity firms Bain Capital and Advantage Partners to widen its base in making machines that can handle money through automated mechanisms.
Crane has invested over $220 million to grow its payment solutions business in recent years and MEI Conlux is the company's third deal since 2006 in a business segment that caters to a range of automated money handling solutions, aimed at the gaming, retail, transportation and vending markets.
In 2006 Crane bought Cash Code, which specializes in bill validation and dispensing devices, and Telequip, which provides coin dispensing equipment.
Crane acquired NRI, a European coin validation and dispensing business, in 1985 as part of the acquisition of UniDynamics Corporation.
Crane expects the MEI deal to add to earnings within the first year of acquisition by about 25 cents per share, including 5 cents in synergies.
"We expect synergies to grow to $25 million annually on a pre-tax basis, or 30 cents per share in 2015," Crane Chief Executive Eric Fast said in a statement.
MEI is a manufacturer of electronic bill acceptors, coin mechanisms and other unattended transaction systems. The company provides products for the vending, gaming, amusement, transportation, retail and kiosk markets.
"This acquisition is consistent with our strategy of niche market leadership," Fast said.
Fast also said the MEI deal would materially strengthen the company's existing payment solutions business, which has grown through three acquisitions beginning in 2006.
Crane said that it intends to finance the deal through a combination of cash on hand and additional debt.
MEI Conlux had sales of about $400 million in 2012, and employs 820 people worldwide. Crane's payment solutions business had annual sales of $175 million. On a pro forma basis, the combined sales of MEI and Crane Payment Solutions would be about $575 million in 2012.
The company said it continues to expect 2012 earnings in the lower half of the previously communicated outlook range of $3.75 to $3.85 per share.
Analysts, on average, were expecting 2012 earnings of $3.75 per share, excluding special items, according to Thomson Reuters I/B/E/S.
Also, the company's preliminary outlook for 2013 includes core sales growth of between 2-4 percent, excluding acquisition and foreign exchange impacts, and earnings per share in a range of $4.05 to $4.20. Analysts are expecting the company to earn $4.13.
Bain Capital is one of the world's biggest private equity firms with about $67 billion in assets under management.
Advantage Partners is a private equity firm based in Japan, which established the first buyout fund in the country in 1997, according to its website.
Hong Kong shares close down 0.7 pct, snap 4-week winning streak
HONG KONG | Fri Dec 21, 2012 3:08am EST
HONG KONG Dec 21 (Reuters) - Hong Kong shares posted their worst day in three weeks and their first weekly loss in five on Friday, as investors cut risk at the end of the last full trading week this year after talks stalled on a deal to avert a fiscal crisis in the United States.
The Hang Seng Index closed down 0.7 percent on the day and down 0.4 percent on the week at 22,506.3. The China Enterprises Index of the top Chinese listings in Hong Kong shed 1.1 percent on Friday and 0.7 percent this week.
The CSI300 of the top Shanghai and Shenzhen closed down 0.5 percent on Friday, but rose 0.7 percent on the week to 2,372 points. The Shanghai Composite Index shed 0.7 percent on Friday but gained 0.1 percent this week.
HIGHLIGHTS:
* Friday's losses, its worst since Dec. 3, knocked the Hang Seng Index off its highest since August last year. Any gains next week could be limited by stiff chart resistance seen at around 22,800, around the peaks seen in July and August 2011.
* Chinese banking and energy majors were among the biggest losers of the Hang Seng Index components. Industrial and Commercial Bank of China (ICBC) and China Coal Energy Co Ltd each fell more than 2 percent.
* Low turnover and strength in defensive plays such as Hong Kong utilities further pointed to risk aversion at the end of the last full trading week in 2012. Next week, Hong Kong markets will shut from noon on Monday and resume trading only on Thursday.
* Anta Sports jumped 3 percent to HK$6.54 after UBS raised their price target from HK$7.50 to HK$9, expecting Anta to be among the survivors of an ongoing consolidation in Chinese sportswear brands.
Thursday, 20 December 2012
UPDATE 3-Oracle buys web firm Eloqua to boost cloud presence
* Oracle offers $23.50 per share, a 31 pct premium
* $810 mln deal to close in first half of 2013 (Adds analyst comments, updates shares)
By Sayantani Ghosh
Dec 20 (Reuters) - Oracle Corp agreed to buy Eloqua Inc, a maker of web-based marketing automation software that listed in August, for about $810 million as it seeks to expand its cloud-computing services.
Eloqua makes software to help businesses predict and grow revenue by monitoring marketing and sales initiatives. Its customers include AON Plc, Dow Jones, Automatic Data Processing Inc, Polycom Inc and National Instruments Corp.
Oracle, which came late to cloud computing, is trying to be a one-stop shop for operating systems, databases, computer programs and infrastructure over the Web.
"The acquisition of Eloqua will add a leading market automation solution to Oracle's strong salesforce automation products and the recently acquired RightNow call center automation solution," Nomura Equity Research analysts said in a research note.
Oracle bought RightNow Technologies last year for $1.5 billion, sparking several more acquisitions in the cloud-computing market including IBM Inc's acquisition of Kenexa and SAP AG's purchase of SuccessFactors.
Oracle, which has traditionally offered installed software products, then bought Taleo, a cloud-based HR software firm.
"We would expect Oracle to continue to make acquisitions in this space, to bolster its Fusion Applications suite and respond to competitive pressure in the applications market from SAP and Salesforce.co," Nomura said.
Oracle priced the deal at $871 million, net of Eloqua's cash. Based on the 34.5 million Eloqua shares outstanding as of Oct. 31, the equity portion of the deal came to $810 million.
Cloud computing, a broad term referring to the delivery of services via the Internet from remote data centers, is a favorite with corporate technology buyers because it is faster to implement and has lower upfront costs than traditional software.
Oracle Chief Executive Larry Ellison mocked cloud computing in 2008 as "complete gibberish". He described it as a fad, comparing the computer industry to the fashion world.
But Oracle has since introduced its own web products and acquired several firms selling internet-based software as its corporate customers embraced web services offered by Salesforce.com Inc, Amazon.com Inc and Google Inc.
"Although Oracle already had strong marketing functionality, this gives it a cloud offering to deliver and an additional base of midmarket customers providing a recurring license maintenance stream," Nucleus Research analyst Rebecca Wettemann said.
The company's $23.50 per share offer for Eloqua represents a 31 percent premium to Eloqua's Nasdaq close on Wednesday.
Eloqua shares jumped to match the offer price while Oracle's shares were flat at $34.05 on the Nasdaq.
"Eloqua's leading marketing automation cloud will become the centerpiece of the Oracle Marketing Cloud," said Thomas Kurian, Executive Vice President of Oracle Development.
Eloqua's board has unanimously approved the deal, which is expected to close in the first half of 2013.
Oracle said on Tuesday that software sales growth will stay strong into the new year despite fears that there could be big tax hikes and U.S. government spending cuts that could cause a slump in spending by customers. (Editing by Don Sebastian and Rodney Joyce)
UPDATE 3-Discover profit falls short as costs climb
* Fourth-quarter EPS $1.07 vs est $1.13
* Net revenue $1.99 bln vs est $1.97 bln
* Expenses jump 20 pct
* Shares fall nearly 6 pct
By Tanya Agrawal
Dec 20 (Reuters) - Credit card company Discover Financial Services reported a quarterly profit that fell short of analysts' expectations as it spent more on building its new payment partnerships and other businesses, sending its shares down as much as 6 percent.
The company said costs rose 20 percent to $800 million in the fourth quarter as it increased hiring, paid more in compensation and raised its marketing spend.
Discover has been expanding its payment services division as it seeks new areas for growth. It signed a deal in August with PayPal, the online payment service of eBay Inc, under which PayPal users can buy from merchants using Discover's payment network.
It has also tied up with Google Inc to allow users link their Discover cards directly to Google Wallet and has started making home loans after buying home loan center assets from online loan provider Tree.com in May.
The company said pretax income in its payment services unit fell 21 percent to $33 million but transaction volumes rose 13 percent to $49 billion as it continues to invest in the segment.
"The payments business leveraged our network and acceptance footprint to achieve record volumes. We entered into several key partnerships, which we expect to be drivers of huge profitability," Chief Financial Officer Mark Graf said on a post-earnings conference call.
Although one analyst said the company had spent more money on its expansion plans than was expected, others said the expenses were justified.
"The increase in expenses is because the company is strengthening its fundamentals. It is a consequence of growth and is resulting in an improvement in the business lines," said Sanjay Sakhrani, analyst with Keefe, Bruyette & Woods.
Discover's delinquency rates continued to decline as fewer people defaulted on their credit card payments, and were at 1.86 percent compared with 2.39 percent a year earlier.
CARD SALES ROBUST
Fourth-quarter profit rose 7 percent to $551 million, or $1.07 per share, from $513 million, or 95 cents per share, a year earlier.
Analysts on average had expected earnings of $1.13 per share, excluding items, according to Thomson Reuters I/B/E/S.
Provision for loan losses rose 6 percent to $338 million as its loan portfolio increased 6 percent to $61 billion.
Credit card loans rose 6 percent to $49.6 billion in the quarter ended Nov. 30 on a 6 percent rise in card sales volumes, driven by holiday season shopping.
U.S. consumer confidence rose to a more than five-year high in early November on an increasingly upbeat view of the economy and jobs market.
Discover, like American Express Inc, lends directly to consumers but its business is a quarter of its rival's size. The two companies compete with Visa Inc and MasterCard Inc to process transactions for banks.
Shares of the Riverwoods, Illinois-based company were down 5 percent at $37.97 in afternoon trading on the New York Stock Exchange on Thursday. The shares have risen about 68 percent since the beginning of the year to Wednesday.
UPDATE 2-Brazil seeks private investors in two key airports
* Rio, Belo Horizonte concessions to be auctioned in Sept.
* Government looking for $5 billion in private investment
* Brazil will invest in upgrades for 270 regional airports (Adds details on concessions, president's comments)
By Leonardo Goy
BRASILIA, Dec 20 (Reuters) - Brazil unveiled a $9 billion plan to overhaul two of its international airports and upgrade others on Thursday as it rushes to accommodate surging air traffic in time for the 2014 soccer World Cup and the 2016 Olympic Games.
The plan to modernize Rio de Janeiro's Galeao airport, the country's second largest, and Belo Horizonte's Confins airport, should attract 11.4 billion reais ($5.48 billion) in bids from private companies, the civil aviation authority said.
Rio de Janeiro, whose creaking international airport struggles to serve rising numbers of tourists and business visitors, is one of 12 Brazilian cities fielding World Cup matches in 2014 and will host the Summer Olympics two years later.
Air travel has expanded rapidly in Brazil over the last decade of booming economic growth and the rise in middle class incomes, overcrowding the country's aging airports, which have long been starved of investment.
Private companies that win operating licenses to be auctioned in September will have control over the two airports, and state airport management company Infraero will have a minority 49 percent stake, the same arrangement used in concessions auctioned in February for the airports of Brasilia, Campinas and Sao Paulo's Guarulhos, Brazil's largest.
Seeking to draw more experienced airport operators, the Brazilian government is requiring that bidders for the two new concessions have experience managing airports with at least 35 million passengers a year. The operator must also take a minimum 25 percent stake in the winning consortium.
The government also said it would invest 7.3 billion reais to upgrade smaller regional airports and build 17 new ones to increase access to air travel in remote parts of Brazil.
The plan is part of President Dilma Rousseff's push to attract private investment to help upgrade Brazil's deficient transport infrastructure, from roads and railways to airports and seaports, that has made it a costly place to do business.
Rousseff rebuffed criticism that Brazil, where economic growth has stalled, is no longer a good place to invest. "We are improving the business environment in Brazil, triggering a huge advance in investment in productivity," she said after the airport announcement.
Brazil's economy grew just 0.6 percent in the third quarter. Rousseff pointed to lower interest rates, a weaker currency and her goal of lowering the country's tax burden as factors that will bring about a solid recovery in 2013.
LINKS TO FAR-FLUNG REGIONS
Rousseff said a country the size of Brazil needs better internal air travel facilities and that improving these links would require public-private partnerships.
"With the initiatives we are taking, we will enable regional aviation in our country that otherwise would not be viable," she said.
Brazil is larger than the 48 contiguous U.S. states, a country with much more developed road and rail networks. Some communities in Brazil, including many in its Amazon north, can only practically be reached by airplane.
The government will invest $1.7 billion reais in 67 airports in Northern Brazil, which includes the Amazon basin, and another $2.1 billion reais in 64 airports in the Northeast region, which has been one of the fastest-growing parts of Brazil in recent years but is a three-hour flight from the main economic hubs in the south of the country.
After a decade of brisk economic growth, passenger traffic more than doubled in 10 years, according to government figures, making Brazil one of the most promising aviation markets in the world. Some analysts say the volume of airline passengers could double again by 2030.
PRIVATE CAPITAL WANTED
While increasing air traffic fueled heady growth for a crop of ambitious new airlines such as Gol and Azul, many carriers now complain more growth is not possible without significant airport expansion.
Delays at roads, ports, factories, as well as airports, have also raised production and distribution costs and contributed to the drag that poor infrastructure has had on the once-booming Brazilian economy.
Rousseff's decision to tackle the problem with private investment is a reversal of the long-standing policy of her Workers' Party and of her predecessor and mentor, Luiz Inácio Lula da Silva. Lula opposed efforts during his two terms to allow private partners to manage Brazilian airports.
The government earlier this month launched a $26 billion public-private drive to modernize sea ports. In August it announced a plan to lure up to $133 billion reais in private investment for road and rail projects.
Rousseff's courting of private capital comes as some investors have begun to criticize the government's growing role in the economy.
A senior analyst for Fitch Ratings warned in September that Brazil's aggressive negotiation of energy rate cuts could spook foreign investors, for example, sapping appetite for concessions in other sectors.
Changes to the country's electricity concession contracts have caused the shares of many utilities to plunge.
Rousseff, however, brushed off the criticism on Thursday.
"I find it very weird when people say we're changing the rules of the game," she said in a speech following the investment announcement. "This is not true, because we want an environment of stable contracts."
($1 = 2.08 Brazilian reais) (Additional reporting by Silvio Cascione and Jeb Blount; Writing by Caroline Stauffer; Editing by Anthony Boadle and Leslie Adler)
Fifty-five drowned off Somali coast after boat capsizes-UNHCR
NAIROBI | Thu Dec 20, 2012 12:11pm EST
The U.N. High Commissioner for Refugees (UNHCR) said in a statement that it was the worst such incident in the Gulf of Aden since February 2011 when 57 Somali migrants perished while attempting to reach Yemen. (Reporting by James Macharia; Editing by Jon Hemming)
UPDATE 1-Allscripts shares plunge as company drops plan for sale
* New CEO Black sketches plans for role at Allscripts
* Chairman says strategic review process was rigorous
* Stock falls as much as 17 pct after announcement (Updates with background)
Dec 20 (Reuters) - Shares of Allscripts Healthcare Solutions Inc fell as much as 17 percent on Thursday after the company abandoned plans to sell itself and instead introduced new management to run the company as an independent entity.
Allscripts, which sells systems that enable hospitals and physicians to share patient records electronically, announced the changes late on Wednesday.
On Thursday the company's chairman, Dennis Chookaszian, told analysts on a conference call that the board had conducted a rigorous review of its options and ultimately decided that the best way to create value for shareholders was to exploit the company's long-term growth potential.
Allscripts named Paul Black, former chief operating officer at rival Cerner Corp and an Allscripts board member, to replace Glen Tullman, who led the company for 15 years.
Black, who addressed shareholders on the call, said his goals include freshening the company's product line, enhancing operating efficiencies and working to retain existing clients. He said he will spend time meeting with key constituents before laying out his plan in detail.
The company declined to provide a financial outlook except to say it was happy with the way the fourth quarter started. Black said he expects the company to benefit from having clarity now that the review process is over.
"There has been a lot of disruption in the marketplace," he said. "A lot of people were hesitant to make a decision until they knew who they would be working with."
Chookaszian declined to disclose whether the board's decision to remain independent was unanimous, saying the board "doesn't comment on its decisions."
The decision follows months of turmoil at Allscripts, which in June, under pressure, installed three board members nominated by the hedge fund HealthCor Management, which had lobbied intensively for the removal of Tullman.
Allscripts shares were down 14.6 percent at $9.13 on the Nasdaq at mid-day on Thursday.
Several private equity groups, including Blackstone Group LP , were apparently interested in Allscripts, but sources familiar with the situation told Reuters suitors had become concerned about Allscripts' declining earnings and market-share losses to larger rivals such as Cerner. (Reporting by Toni Clarke in Boston; Editing by Matthew Lewis and Steve Orlofsky)
UPDATE 3-Deutsche Telekom finance chief to replace CEO Obermann
* Obermann to leave at end-2013, be succeeded by Hoettges
* Hoettges says not planning big change in strategy
* Obermann says leaving of his own volition
* Shares up 0.5 percent
By Maria Sheahan and Christoph Steitz
FRANKFURT, Dec 20 (Reuters) - Deutsche Telekom chief executive Rene Obermann has unexpectedly announced he will step down at the end of 2013 and be succeeded by finance director Timotheus Hoettges.
Hoettges, 50, said on Thursday he was not planning major changes to strategy and would continue Obermann's drive of investing in the United States and Germany as the firm battles to return to revenue growth against a tough economic backdrop.
"I have worked with Obermann for 12 years, and I don't expect to change a lot in the way that we do things," he told journalists during a conference call.
He is, however, expected to bring a fresh spark to Germany's former state telecoms monopoly, as he is considered by analysts to have the energy to take on challenges and an ability to absorb knowledge. But he has a big job ahead of him.
The European telecoms industry is struggling with sluggish economic growth, costly investments and cut-throat competition, and on top of that Deutsche Telekom has had its hands full with trying to fix its troubled T-Mobile USA business.
The German government, Deutsche Telekom's biggest shareholder with a 32 percent stake, said it welcomed the choice of Hoettges as new CEO because it promised continuity.
"The chief strategist so far becoming the new captain indicates that the course will be held," a spokesperson for the finance ministry told Reuters.
Hoettges joined the group in 2000 after playing a central role in the merger of VIAG AG and VEBA AG to form E.ON , now Germany's biggest utility.
In 2009, he was promoted to finance chief at Deutsche Telekom and, among other things, oversaw the move to put its British mobile business in a joint venture with France Telecom,.
"Hoettges is extremely good as a CFO, he's well respected by investors, but it remains to be seen whether he has the vision and political clout to succeed as CEO," Espirito Santo analyst Will Draper said.
Hoettges said the company had not yet decided on a new finance director to replace him.
THE ENGINE ROOM
Obermann was the youngest-ever chief executive of a German blue-chip firm at the time when he took over in 2006, aged only 43. He gained a reputation for being eager to keep unions and politicians happy and wary of making big strategic decisions.
One of his boldest moves was a deal to sell T-Mobile USA, to AT&T, but it collapsed last year amid concerns from competition regulators, dealing a blow to Obermann's reputation.
T-Mobile USA was a growth engine for Deutsche Telekom in its early days but is a rundown asset now that has been haemorrhaging customers. Deutsche Telekom is now trying to merge the business with smaller rival MetroPCS.
Obermann said he was leaving to work for a smaller company where he was "closer to the engine room" than he could be at an international corporation, without providing details.
Analysts were split over whether to believe Obermann's assurances that he was leaving of his own volition.
"If the board or the main shareholders were unhappy about the CEO's performance, they probably would have appointed an outsider, not the CFO, who also has been responsible for what has happened at the company over the last few years," Exane BNP analyst Mathieu Robilliard said.
Espirito Santo's Draper meanwhile said: "Obermann has had a lot of opportunity to fix the U.S. and yet it still remains Deutsche Telekom's biggest problem."
Obermann also disappointed investors with a bigger than expected dividend cut announced earlier this month as the company's investment drive eats away cash.
European peers Telefonica, the Netherlands' KPN , Telekom Austria, and France Telecom had already cut their dividends earlier this year, hurt by a weak economy and fierce competition that has driven down prices.
Deutsche Telekom shares closed 0.5 percent higher at 8.63 euros, outperforming a 0.2 percent fall in the STOXX Europe 600 European telecoms index.
UPDATE 1-First major storm of winter pelts U.S. Midwest
* Possible tornado blamed for damage in Mobile, Alabama
* Blizzard warnings for US Midwest and central Plains
* Some 400,000 homes without power across US Midwest, South (Updates to add number of homes without power, details of storm in Midwest)
CHICAGO, Dec 20 (Reuters) - The first major winter storm of the year hit the U.S. Midwest on Thursday bringing a blizzard to the Plains and a possible tornado to Alabama as well as leaving around 400,000 customers in 13 states without electricity.
"There are blizzard warnings in effect from southeastern Nebraska through much of Iowa into Wisconsin," said Bruce Terry, a senior National Weather Service forecaster at the HydroMeteorological Prediction Center in College Park, Maryland.
"It's going to be very windy with considerable blowing and drifting of snow," he said, calling the pre-Christmas storm "a major winter snow storm event for the Midwest and western Great Lakes."
Accumulations of up to a foot (30 cm) of snow were expected in some areas, Terry said, adding there was a potential for severe weather on the so-called "warm side" of the storm in the U.S. southeast.
Blowing snow led to school closures in parts of Iowa, Nebraska, Kansas and Missouri, plus the closure of all state government offices in Iowa. Storms in those four states left around 130,000 homes without power.
"Thunder" snow was reported in Iowa during Wednesday night, especially in southeastern Iowa, as thunder and lightning accompanied the storm as it trekked across the state.
"At this point the storm is starting to pull slowly away from the state, but we still have widespread snow across much of Iowa," says Kevin Skow, a meteorologist with the National Weather Service. "That should slowly taper off during the mid-morning hours from west to east."
One suspected twister damaged buildings, snapped trees, downed power lines and flipped vehicles near downtown Mobile, Alabama, early on Thursday, but there were no reports of injuries, authorities said.
"The potential is there certainly for some isolated tornadoes," Terry said, referring to a broad swath of Gulf of Mexico coast and inland territory stretching from southeast Louisiana through the western Florida Panhandle.
While the heavy snow in the Upper Midwest will create potentially dangerous travel conditions, meteorologist Jeff Masters said it put an end to this year's "record-length snowless streaks in a number of U.S. cities."
Writing on his website weatherunderground.com, Masters said the storm would also provide "welcome moisture for drought-parched areas of the Midwest."
The winter storm, named Draco by the Weather Channel, began Tuesday in the Rocky Mountains, marking a dramatic change from the mild December so far in most of the nation.
In western Nebraska, the storm prompted the closure of a long stretch of Interstate 80 late Wednesday as blowing snow reduced visibility and caused treacherous driving conditions.
In Colorado, Interstate 70 was also closed east of Denver all the way to western Kansas due to high winds, wind-driven snow and reduced visibility, authorities said.
High winds kicked up a dust storm in west Texas on Wednesday, leading to at least one death in a traffic accident near Lubbock.
Power companies reported electrical outages in Iowa, Nebraska, Arkansas, Louisiana, Texas, Kansas, Missouri, Alabama, Mississippi, Oklahoma, West Virginia, Virginia and Tennessee. (Writing by Tom Brown and Nick Carey; Reporting by Mary Wisniewski in Chicago, Kaija Wilkinson in Mobile, Alabama and Keith Coffman in Denver, Colorado, Kay Henderson in Des Moines, Iowa, Kevin Murphy in Kansas City, Brendan O'Brien in Milwaukee, Matthew Waller in San Angelo, Texas and Scott DiSavino in New York.; Editing by Bernadette Baum, Greg McCune and Tim Dobbyn)
UPDATE 1-Fifty-five people drowned off Somali coast - UNHCR
NAIROBI | Thu Dec 20, 2012 12:23pm EST
NAIROBI Dec 20 (Reuters) - Fifty-five people were drowned, or missing and presumed to have drowned, after an overcrowded boat capsized off the Somali coast, the U.N. refugee agency said on Thursday.
The U.N. High Commissioner for Refugees (UNHCR) said in a statement that the accident on Tuesday was the worst such incident in the Gulf of Aden since February 2011 when 57 Somali migrants perished attempting to reach Yemen.
The U.N. agency quoted five of the survivors, all young Somali men, as saying the boat was overcrowded and ran into trouble almost immediately after leaving the port of Bosasso in the northern Somali breakaway region of Puntland.
It capsized just 15 minutes into its journey, spilling all 60 passengers into the sea. Those on board were Ethiopians and Somalis, the UNHCR said.
So far, 23 bodies have been recovered, including those of 14 women, eight men, and a boy said to be less than four years of age. Five of the dead are confirmed to have been Ethiopians. The 32 remaining passengers are presumed to have drowned.
"Without doubt, the Gulf of Aden is now the deadliest route for people fleeing conflict, violence and human rights abuses in the Horn of Africa," said UNHCR Representative for Somalia, Bruno Geddo.
African migrants often use unseaworthy boats to try to reach Yemen, seen as a gateway to wealthier parts of the Middle East and the West. Hundreds of migrants have perished at sea.
The UNHCR estimates that 100,000 people have crossed the Red Sea and the Gulf of Aden this year, despite warnings about the risks.
The latest deaths bring the number of those drowned or missing in the waters between Somalia and Yemen this year to 95, the UNHCR said. (Reporting by James Macharia; Editing by Jon Hemming)
UPDATE 1-Boeing books 47 net new plane orders in latest week
n" readability="36">Dec 20 (Reuters) - Boeing Co said it booked 50 new orders for planes in the latest week, including orders for 31 of its widebody 777 jets, worth about $9 billion at list prices.
Customers also canceled orders for three planes - one 747, one 777 and one 787 - bringing the net increase in orders to 47 for the week. So far this year, Boeing has booked net orders for 1,115 planes.
The 50 new orders include four 767s for FedEx Corp, one 777 for the Republic of Iraq, and 15 737s and 30 777s for customers that Boeing did not identify.
The company did not say which customers had canceled orders.
US STOCKS-Wall Street flat amid stalemate in fiscal talks
* Investors seek clarity on fiscal negotiations
* NYSE Euronext shares soar, ICE to buy for $8.2 billion
* Third-quarter GDP tops expectations; market barely reacts
* Dow off 0.03 pct, S&P 500 up 0.1 pct, Nasdaq off 0.1 pct
By Leah Schnurr
NEW YORK, Dec 20 (Reuters) - U.S. stocks were little changed on Thursday as investors fretted that a deal on the U.S. budget wouldn't come as soon as they had hoped after President Barack Obama threatened to veto a controversial Republican plan.
NYSE Euronext was the star of the day, surging more than 30 percent as the S&P 500's top percentage gainer, after IntercontinentalExchange Inc said it would buy the operator of the New York Stock Exchange for $8.2 billion.
NYSE was up 32.8 percent at $31.95, while ICE shares vacillated between gains and losses. The stock was last down 0.8 percent at $127.22.
The market barely reacted to a round of strong data, including an upward revision of gross domestic product growth and stronger-than-expected home sales, suggesting talks to avert the "fiscal cliff," steep tax hikes and spending cuts due in 2013, remain the primary focus for markets.
Republicans in the U.S House of Representatives pushed ahead with their own fiscal plan in a move that muddles negotiations with the White House. Obama has vowed to veto the plan.
While investors have hoped for an agreement to come soon between policy makers, this seems unlikely as wrangling continues over the details.
"At least in the posturing it looks as if there are ultimatums put on the table, which tends to box either side in," said Quincy Krosby, market strategist at Prudential Financial in Newark, New Jersey.
Still, the absence of a significant sell-off shows "the market still believes that there will be an announcement of some sort. But as the clock is ticking, the most you're going to get is a stop-gap measure," said Krosby.
The Dow Jones industrial average edged down 3.77 points, or 0.03 percent, at 13,248.20. The Standard & Poor's 500 Index added 1.12 points, or 0.08 percent, to 1,436.93. The Nasdaq Composite Index slipped 3.58 points, or 0.12 percent, to 3,040.78.
Stocks rallied earlier in the week on signs of progress in the negotiations, led by banking and energy shares, which tend to outperform in times of economic expansion. On signs of complications, however, many have turned to hedging their bets through options and exchange-traded funds.
Herbalife fell 5.3 percent to $35.35 in the wake of news that hedge fund manager Bill Ackman was betting against the company as part of his big end-of-the-year short.
The U.S. economy grew 3.1 percent in the third quarter, faster than previously estimated, while the number of Americans filing new claims for jobless benefits rose more than expected in the latest week.
"It is great to see this kind of growth, but investors know it could all disappear if there's no deal on the cliff," said Todd Schoenberger, managing partner at LandColt Capital in New York. "Macro data may be on the back burner for a while."
Existing home sales jumped 5.9 percent in November, more than expected, and by the fastest monthly place in three years. Housing shares gained 0.4 percent.
But KB Home slid 5.5 percent to $15.75 as the company reported higher homebuilding costs and expenses in the fourth quarter.
SE Asia Stocks-Most up; Philippines rises further after S&P upgrade
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UPDATE 1-Deutsche Bahn makes $729 mln court claim on rail cartel
* Follows fine by cartel office in July
* Deutsche Bahn suing Thyssenkrupp, Vossloh, Moravia
* Shares in Thyssenkrupp down 1 pct (Adds further background)
FRANKFURT, Dec 20 (Reuters) - German state rail operator Deutsche Bahn has filed a 550 million-euro ($729 million) claim for damages against a number of track suppliers including ThyssenKrupp, after four companies were fined earlier this year for operating a cartel.
In July the Bundeskartellamt fined four companies - ThyssenKrupp, two units of Voestalpine and Vossloh - a combined 124.5 million euros for price-fixing, and said it was investigating others.
Having said at the time it planned to seek at least 100 million euros in damages from the cartel members Deutsche Bahn said on Thursday it had since tried to reach an out-of-court agreement but some parties had broken off talks.
"And that's in spite of the fact it has been established without doubt that they caused damage to us. We see no other course but to take legal action," said Gerd Becht, Deutsche Bahn's board member for regulatory compliance.
The state-owned company said it was suing ThyssenKrupp, Czech group Moravia Steel, Vossloh and the former owners of a Vossloh unit.
Deutsche Bahn did not give details of the amount it was seeking in damages, but the court in Frankfurt where the claim was filed said it was for 550 million euros.
ThyssenKrupp said in reaction Deutsche Bahn had not mentioned a sum during talks and added that it wished to continue negotiations in January.
Meanwhile Voestalpine, which is not among those being sued and had acted as whistleblower in the case, said it was still in talks with Deutsche Bahn over a settlement.
Vossloh declined to comment.
Shares in ThyssenKrupp were down 1 percent at 18.38 euros at 1016 GMT, one of the biggest fallers on the DAX.
"In the worst case, the potential damage for ThyssenKrupp could range between 300 million and 400 million euros," said DZ Bank analyst Dirk Schlamp.
As Deutsche Bahn is state-owned, a large part of any damages awarded would go into public coffers, the rail operator said. ($1 = 0.7542 euros) (Reporting by Matthias Inverardi, Victoria Bryan, Angelika Gruber and Tom Kaekenhoff; Editing by Greg Mahlich)
Hong Kong shares end near 17-mth highs, China holds at 4-mth peak
(Updates to close)
* HSI +0.2 pct, H-shares -0.3 pct, CSI300 +0.6 pct
* Profit taking hits China banks, BOC off 52-wk high in HK
* Investors rotate heavily into HSBC, StanChart
* 4th straight gain buoys Galaxy Entertainment to record high
By Clement Tan
HONG KONG, Dec 20 (Reuters) - Hong Kong shares ended at their highest level in nearly 17 months on Thursday trade, as investors rotated into HSBC Holdings and Standard Chartered after taking profits in Chinese banks that outperformed recently.
Onshore Chinese markets reversed midday losses to crawl higher, holding at four-month highs for a fifth-straight session on strength in resource counters after state media reported rare earth quotas will stay steady in 2013.
The Hang Seng Index closed up 0.2 percent at 22,659.8, reversing midday losses to stay at its highest since Aug. 1, 2011, but trading volume was low. Chart resistance is next seen at about 22,800, peaks last seen in July-August 2011.
The China Enterprises Index of the top Chinese listings in Hong Kong slipped 0.3 percent.
In the mainland, the CSI300 of the top Shanghai and Shenzhen listings gained 0.6 percent to 2,384.8. The index is now up 1.7 percent in 2012 having spent most of the year in negative territory. It next faces chart resistance at around 2,412, the peaks seen in August this year.
The Shanghai Composite Index edged up 0.3 percent.
Both onshore Chinese indexes reversed midday losses, staying at their respective highest since August.
Shanghai volume improved slightly from Wednesday, but totalled just more than half of last Friday's when onshore Chinese markets had their best day in more than three years.
Hong Kong turnover was at its second weakest since Dec. 4 and was some 7 percent below its average in the last month as doubts reemerged over progress on averting a fiscal crisis in the United States.
"Trading at this time of the year can be quite tricky," said Jackson Wong, Tanrich Securities' vice-president for equity sales. "Investors are rotating out of outperformers today and into some laggards on some Chinese policy catalysts."
Chinese banking plays that have overperformed were weak in both China and Hong Kong markets. Sentiment toward banks took a knock after the mainland's banking regulator ordered them to tighten checks on sales of third-party financial products.
Having touched 52-week intra-day highs twice earlier this week, Bank of China (BOC) slipped 0.6 percent in Hong Kong, and 0.7 percent in Shanghai.
Growth-sensitive counters were also weak. Anhui Conch Cement slid 2.9 percent in Hong Kong, recording a third-straight daily loss after hitting its highest intra-day levels on Monday since November 2011.
In Shanghai, Anhui's shares shed 1.2 percent.
CHINA POLICY PLAYS STRONG
Inner Mongolia Baotou Steel Rare-Earth Group jumped 6.9 percent after the state-owned China Daily reported industry leaders as saying export quotas for rare earth metals will hold steady next year.
Strength in other rare earth producers helped onshore Chinese indexes reverse midday losses, with the CSI Materials sub-index an outperformers among sectors, rising 1.5 percent.
Chinese alternative energy counters extended gains after mainland news outlets reported on Wednesday that Beijing approved a second group of wind power projects.
The state-run China Securities Journal newspaper reported on Thursday that the State Council has issued new measures to support the solar industry, including subsidies and tax breaks to also benefit the wind power industry.
China Longyuan Power Group climbed 2.5 percent in heavy volume in Hong Kong, but it is still down 12.4 percent on the year, compared to the 22.9 percent gain on the Hang Seng Index.
Galaxy Entertainment Group jumped 4 percent to a record closing high, posting a fourth-straight daily gain after Deutsche Bank analysts upgraded on Monday its target price by 5.4 percent. (Editing by Simon Cameron-Moore)
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