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26. Feb. 2010
With so little public enthusiasm for official politics, average Egyptians will care more about the country's ability to face the global economic crisis. The last few years have witnessed a labor movement that has mobilized more people in protests than any Kifaya demonstration, as well as a collective concern over rapid cost-of-living increases.
While economic growth has slowed, it is still projected to reach at least 5% in 2010. However, official unemployment figures are rising as is inflation. In late 2008, when year-on-year inflation reached 23%, major government investment in subsidies was necessary. Inflation fell to just above 10% by summer 2009, but reached 13% in October 2010. Although US$1.8 billion in emergency social funding was approved this month, it has been kept off-budget, with the government attempting to stick to IMF-backed efforts to control its public debt.
In this context, although 150 state-owned companies are potentially available for privatization, the government is not in a hurry to find buyers, and may want avoid the anticipated strikes that will surround privatization sales. Instead, partial privatization - with the government retaining a 51% majority - appears the preferred option, offering income for the privatization program, but delaying the full sale of these companies.
[Zawya]
16. February. 2010
NEW YORK - A New York state manufacturing gauge published on Tuesday hit its highest level since October this month, while sentiment among home builders rose more than expected, signaling continued improvement in the U.S. economy.
But analysts said the data also showed a factory rebound might run out of momentum.
At the same time, a U.S. capital flows report showing China paring its Treasuries holdings underscored analysts' worry that the recovery could be stymied by a steep rise in bond yields, making borrowing more expensive for homeowners and companies.
However, the generally stronger-than-expected economic data helped boost risk appetite and drove Wall Street stocks up more than 1 percent in afternoon trading.
The New York Federal Reserve said in a barometer of manufacturing in New York state rose in February as inventories jumped. Its "Empire State" general business conditions index rose to 24.91 in February, the highest level since October and up from 15.92 in January.
"The U.S. manufacturing sector shows no signs of slowing down in February," said Kathy Lien, director of currency research at GFT in New York. "The strong number will lead the markets to expect a similar improvement in the Philadelphia Fed index, which will be released on Thursday."
On the surface, the index appeared to reinforce the impression that industrial companies are continuing to bounce back after the long recession. Economists polled by Reuters had expected a February figure of 18.
Despite a stronger-than-expected headline reading, however, some analysts said the details of the report were somewhat more bearish.
"A lot of the improvement was driven by a correction of inventories," said Anna Piretti, senior U.S. economist at BNP Paribas in New York. "It's a temporary factor. What worried me more was a sharp decline in new orders."
The inventories index rose sharply, to zero from negative 17.33, its highest reading in more than a year.
But the new orders index tumbled to 8.78 in February from 20.48 in January -- a warning sign that activity could decelerate in the future.
However, the report offered some signs of improvement in the job market at factories. Employment indexes were positive for a second consecutive month, although at relatively low levels, the Fed said.
Separately, the National Association of Home Builders said U.S. home-builder sentiment rose more than expected in February as low interest rates and a sharper-than-expected drop in unemployment boosted confidence for the first time since September.
The percentage of Americans falling behind on credit card bills stabilized in January, according to data from five lenders released on Tuesday, signaling that U.S. consumer credit woes may be leveling off.
CHINA CUTS TREASURIES
But continued improvement in U.S. mortgage and other lending markets still depends on borrowing rates staying low, a factor influenced by foreign purchases of U.S. debt.
Overall, net capital inflows into the United States rose to $60.9 billion in December from an inflow of $30.9 billion the prior month. But foreigners cut purchases of long-term securities, the Treasury said on Tuesday.
China has been a net seller of some $45 billion of U.S. Treasuries over the last five months, wrote Alan Ruskin, chief international strategist with RBS Securities Inc. He added that it was "a long enough period to hint strongly at a trend."
Japan overtook China as the biggest foreign holder of U.S. Treasury debt in December for the first time in more than a year.
Much of China's selling has been in short-dated Treasury bills, but China has not indicated that it will buy longer maturity U.S. government notes and bonds instead. "That is the bad news for the U.S. dollar and the Treasury market," Ruskin wrote.
Analysts said this underscored the risk that waning appetite for U.S. debt among major foreign holders could spark a sell-off and send yields rising.
Over the longer term, borrowing costs may determine how anemic the U.S. economic recovery will prove.
The U.S. economy will likely grow at a pace of close to 3 percent over the next two years, slower than many private-sector economists forecast, Federal Reserve Bank of Minneapolis President Narayana Kocherlakota said on Tuesday.
Also on Tuesday, Kansas City Fed President Thomas Hoenig said the ballooning U.S. budget deficit will increase pressures on the Fed to hold interest rates low and make it harder to avoid inflation.
[Reuters]
10. February. 2010
ArabianBusiness (by: Shane McGinley)
The number of Arabic internet users in the Middle East and North Africa is expected to grow by nearly 50 percent over the next three years, a vice president of Google said in Dubai on Wednesday.
At present there are roughly 56 million Arabic internet users in the MENA region, but this represents only seventeen percent of the 337 million population, according to research carried out last year by the Dubai-based research company Madar Research.
Vinton Cerf, a vice president at Google, forecast that this figure will rise to 82m by 2013, a rise of 46.4 percent.
“The internet has permanently altered world trade, reducing barriers to market entry, bringing companies closer to their customers and creating opportunities that reach beyond traditional geographic boundaries. The internet has created brand new markets and provided endless opportunities to individuals and businesses,” Cerf said, speaking at an event in Dubai to mark Google Day 2010.
While internet usage in the Middle East has grown more than tenfold since 2000, most markets are still in the early stages of adoption. According to the World Bank, there are more than 320 million Arabic speaking internet users worldwide, while less than one per cent of all online content is in Arabic.
Last year, California-based US internet giant Yahoo! acquired the Maktoob Arab community website in a deal valued at around $175m. At present, 22 million Arab users a month use Yahoo! and 18 million a month use Maktoob.com. However, Ahmed Nassef, the general manager of Maktoob from Yahoo!, said he aims to double that number over the next two years.
9. February. 2010
Reuters
The government of Ghana has blocked the estimated $4 billion sale of a stake in its Jubilee oil field, foiling months of talks between potential buyer Exxon Mobil Corp (XOM.N) and the stake's owner, Kosmos Energy LLC, the Wall Street Journal reported on Monday.
A Ghanaian official said state-run Ghana National Petroleum Corp would be the only entity allowed to buy Kosmos' stake in the field, the Journal said.
The Ghanaian government is "unable to support an Exxon Mobil acquisition of Kosmos's Ghana assets," the Journal said, citing a letter that Ghanaian Energy Minister Joe Oteng-Adjei reportedly sent to Exxon.
Exxon spokesman Patrick McGinn said the company does not "comment on the details of commercial discussions or opportunities," adding only that it "routinely evaluates potential development opportunities around the world."
Officials at the Ghanaian government could not immediately be reached for comment.
Kosmos is backed by U.S. private equity funds Blackstone Group LP (BX.N) and Warburg Pincus LLC WP.UL.
5. February. 2010
Seeking Alpha (The business Insider)
Sovereign debt concerns have exploded this year, and the chart below makes this fact very clear.
It shows short-selling interest for the sovereign debt of different nations, as calculated by short-interest firm Dataexplorers in a February report.
Dataexplorers presents Short interest as an alternative to using credit default swap data alone: "CDS data on these markets is well publicized, but what does short selling data tell us about the current market attitude to developing country government bonds?"
The degree of recent short selling is indicated by the blue bars, while that of one year ago is in red. Longer bars implies far more traders betting against a nation's debt.
What is particularly striking about the data is that while some of the infamous European sovereign-default-risk PIIGS (Portugal, Italy, Ireland, Greece, and Spain) rank highly on this list of troubled nations, many Eastern European nations look far worse in terms of short interest. Note some PIIGS aren't in the table, they might not have been included in Dataexplorer's screen.
If the shorts are right, Eastern Europe may actually be the spark that sets off the rest of Europe's financial crisis. Note Abu Dhabi shot up this year as well, no doubt due to Dubai's crisis.
31. January. 2010
Reuters
Nigeria's main militant group said on Saturday it was ending a three-month-old ceasefire and threatened to unleash an "all-out onslaught" against Africa's biggest energy industry.
The rebel group was severely weakened after its senior leaders and thousands of others accepted clemency and disarmed under a presidential amnesty which ended last October.
It is unclear who is now running the group.
Here are some details on the three main former Movement for the Emancipation of the Niger Delta (MEND) field commanders who accepted amnesty and the genesis of the group.
ATEKE TOM
A former gang leader in Rivers State in the eastern Niger Delta for around a decade, Ateke Tom set up the Niger Delta Vigilante (NDV), one of several groups to enjoy strong backing from politicians who used them to help rig elections.
The NDV was involved in some of the heaviest clashes in years in the oil hub of Port Harcourt in July and August 2007, when more than 100 people died in fighting with a rival gang involving automatic weapons and rocket-propelled grenades.
Tom had largely operated independently of MEND, the umbrella militant group in the region, but his faction has claimed some significant attacks against the oil industry.
Security sources say he was also heavily involved in oil bunkering, a lucrative trade in industrial quantities of stolen crude smuggled onto the international market.
FARAH DAGOGO
Also based in Rivers state, Dagogo started out as a top commander loyal to former militant leader Mujahid Dokubo-Asari, whose Niger Delta People's Volunteer Force turned over thousands of weapons in return for amnesty in 2004.
Dagogo then set up camp on his own before becoming one of the founding field commanders of MEND, which knocked out a quarter of Nigerian oil output when it burst onto the scene with a series of attacks in early 2006.
Dagogo is loyal to Henry Okah, the suspected leader of MEND who was on trial for gun-running and treason before being released last July after accepting President Umaru Yar'Adua's amnesty offer.
GOVERNMENT TOMPOLO
Full name Government Ekpemupolo, he was one of the leaders of the Federated Niger Delta Ijaw Communities (FNDIC), based in the western city of Warri and responsible for shutting down a large chunk of oil output from the western delta in 2003.
Tompolo is believed to have been key to drawing together the factions which went on to form MEND.
He was responsible in particular for attacks on Chevron (CVX.N) and thought to be a major oil bunkerer. Security forces used helicopters and gunboats to attack his camps around Warri, capital of Delta state, last May.
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