World stocks down as investors await US bill

LONDON: World stock markets fell Monday as investors fretted about the status of banking reform in the U.S. and awaited confirmation of a rescue package for debt-laden Greece. The British pound slipped amid growing British political and economic concerns.

In Europe, the FTSE 100 index of leading British shares was down 11.19 points, or 0.2 percent, at 5,614.46 while Germany's DAX fell 9.01 points, or 0.2 percent, to 5,936.10. The CAC-40 in France was 13.02 points, or 0.3 percent, lower at 3,914.38.

Wall Street was also poised to start the new week modestly lower — Dow futures were down 30 points, or 0.3 percent, at 10,543 while the broader Standard & Poor's 500 futures fell 4.4 points, or 0.4 percent, at 1,142.20.

Given the dearth of economic data in the early part of the week, investors are focusing in on the unveiling of a new banking bill in the U.S. — scheduled for Tuesday.

Investors remain unsure whether the bill will gain support from the U.S. Senate — last week financial stocks were in demand on expectations that the bill would fail to get the necessary support from the Senate.

However, there are signs that many Republicans may back some sort of bill, including giving the U.S. Federal Reserve more regulatory powers.

"Banking regulation has been a sour point across the world since the credit crunch led to many high profile failures," said James Hughes, market analyst at CMC Markets.

"It seems it has been a long time in coming and many are skeptical whether giving more power to the Fed would make any difference," he added.

Whatever happens on the regulatory front, the Fed will take center stage on Wednesday, when its rate-setting body issues its latest policy statement.

Though no one thinks there will be any change in the benchmark Fed funds rate from the current 0-0.25 percent, investors will be on the lookout for any changes in the statement accompanying the rate decision.

Neil Mackinnon, global macro strategist at VTB Capital, thinks the Fed will continue to make a distinction between its interest rate policy and its liquidity policy, paving the way for continued low borrowing costs.

Though the Fed will at some stage likely amend the language in the statement to signal to markets that the monetary landscape is changing especially in the light of stronger economic data, Mackinnon said the likely inclusion of Janet Yellen on to the Fed board of governors plus other candidates who are seen as dovish "is a positive for risk assets, especially equities, given that interest rate policy will remain accommodative for some time."

The British pound slid Monday as investors continued to worry about a political deadlock following the upcoming general election — opinion polls over the weekend continued to point to a so-called "hung parliament" when no one party has a majority. By late morning it was 0.8 percent lower at $1.5045 on the day.

Many investors worry that such as a situation would augur a period of instability and make dealing with the British deficit more difficult.

A warning from credit ratings agency Moody's that Britain, along with the U.S., are more likely than their triple A peers Germany and France to lose their top rating did little to inject a dose of optimism in the pound's fortunes.

In Europe, the focus will also be on Greece following weekend reports that the eurozone countries will provide the country with some sort of financial guarantee as it tries to tap the bond markets for money to plug its deficit.

Greece has the unenviable task of financing around €55 billion of debt maturing this year, with €20 billion due in April and May — the rise in Greek bond yields makes it more expensive to service the debt and that is why Greek Prime Minister George Papandreou is looking for some sort of support from eurozone partners, particularly Germany.

Earlier in Asia, Japan's Nikkei 225 stock average finished little changed at 10,751.98.

Hong Kong's Hang Seng was down 0.6 percent at 21,079.10 and South Korea's benchmark shed 0.8 percent to 1,649.50.

Elsewhere, Shanghai's market fell 1.2 percent after China's yearly policy meeting ended without new measures investors were hoping for to boost domestic consumption, renewable power and other fields.

"The meeting was pretty much about talk rather than substance," said Zhang Kun, an analyst for Guotai Junan Securities in Shanghai.

Markets in Australia and Taiwan also fell.

Oil prices were lower, with benchmark crude for April delivery down 49 cents to $80.75 a barrel.

The euro was down 0.5 percent at $1.3712 while the dollar was steady at 90.66 yen.

Saudi to set up index fund for foreigners

CAIRO: The head of Saudi Arabia's market regulatory agency says the country will launch a stock market index fund by the end of March into which foreigners can invest.

Capital Market Authority head Abdulrahman al-Tuwaijri, in comments published in Sunday's edition of al-Eqtisadiyah newspaper, that despite the move, Saudi Arabia is still reluctant to allow direct foreign investments in the exchange.

Foreigners are currently able to invest in the exchange — the Arab world's largest — through swap agreements, but are barred from direct ownership.

Analysts say the new fund marks a gradual, but clear, step toward opening the Saudi market to foreign investments.

Euro down to $1.3746 in European trade

FRANKFURT: The euro is slightly lower against the dollar though worries about Greece's debt problems have subsided recently, helping the common currency.

The 16-nation euro is buying $1.3746 in European morning trade Monday, down from $1.3757 late Friday in New York.

The British pound is lower at $1.5130 compared with $1.5179, while the dollar is higher at 90.66 Japanese yen from 90.51.

Greece said Friday it had exceeded its deficit-cutting targets in January and February while it has proposed higher taxes and spending cuts and sold bonds to get out of a debt crisis that has undermined the euro in recent weeks.

The euro moving to "a close above $1.3800 could well precipitate a move toward $1.40," Michael Hewson, an analyst at CMC Markets said.

35 business concerns to visit Malaysia

ISLAMABAD: A 35-member delegation of the leading businessmen of Lahore Chamber of Commerce and Industry will visit Malaysia on March 16 to explore joint industrial and marketing opportunities and identify potential areas to enhance Pak-Malaysia trade.

The delegation led by Engineer Sohail Lashari, former senior vice president, Lahore Chamber of Commerce and Industry will undergo a four-week visit, the Commercial Counselor for Pakistan in Malaysia Wajiullah Kundi said in Kuala Lumpur.

Kundi said the visit reflects the importance being given to Malaysia in South East Asia by Pakistan in terms of building strategic ties in bilateral trade, investment and business sectors.

He said these ongoing frequents bilateral visits by the private sectors of both the countries will certainly pave the way for greater cooperation leading to substantial increase in trade investment and business activities.

Wajiullah Kundi while giving detail of the visit said the delegation comprises members belonging to important sectors including agricultural machinery and implements, paper and board, iron and steel, electronics and automobiles, livestock and poultry, importer of used Heavy Agricultural Machinery, importer of Electronic Surveillance and Security Systems, power generation and solar energy, manufacturer of cables machinery, dairy and livestock related machines and textile made-ups (embroidery works).

He said during its stay in Malaysia the delegation is expected to hold meetings with the President and members of the Federation of Malaysian Manufacturers, President and members of the Associated Chinese Chamber of Commerce and Industry Malaysia (ACCCIM) followed by B-to-B meeting.

The delegation will also visit MATRADE Exhibition and Convention Centre (MECC) wherein meetings will also be arranged.

Bilateral trade between the two countries have received a boost after signing of Malaysia Pakistan Comprehensive Economic Partnership Agreement (MPCEPA) in Nov, 2007 which has reduced duties taxes and levies on trade between the two countries, he added.

Some 4 million jobs vanished in 2009: EU

BRUSSELS: Official data show that some 4 million jobs disappeared in the European Union last year, when countries were struggling to emerge from recession.

In a Monday release, the EU statistical agency Eurostat said EU employment numbers dropped 1.8 percent from 2008 and that 221.1 million people were working in the region in the last three months of the year.

In the 16 nations that use the euro, some 2.72 million jobs vanished as employment fell 1.8 percent from the previous year. Some 144 million were employed in the fourth quarter.

Eurostat says the highest number of job losses were in the manufacturng industry, construction and trade, transport and communication services. Agriculture and public administration, health and education added jobs.