India Infrastructure Output Growth Improves

Output of the eight infrastructure industries, which have a 38% weight in India's index of industrial production, grew 2.6% from a year earlier, compared with 1.6% in November, a government statement said Thursday.

Electricity output rose 4.4% from a year earlier, quicker than the previous month's 2.4% increase, while cement output grew 3.9% after contracting 3% in November.

Performance of some other key sectors such as steel was also healthy with output increasing 5.2% during the month, after a 6% rise the month before.

However, continued weakness in natural-gas as well as coal output weighed on overall activity.

Natural-gas output contracted 14.9% in December while coal output shrank 0.2%.

http://www.4-traders.com/news/India-Infrastructure-Output-Growth-Improves-in-December--15985053/

UK Banks Agree to Repay Customers

The U.K.'s four largest banks by assets may have to pay small-business customers hundreds of millions of pounds in compensation after the Financial Services Authority ordered them to start a full review of sales of products designed to reduce companies' interest-rate risk.

The regulator said Barclays PLC (>> Barclays PLC), HSBC Holdings PLC(>> HSBC Holdings plc), Lloyds Banking Group PLC (>> Lloyds Banking Group PLC)and Royal Bank of Scotland Group PLC (>> Royal Bank of Scotland Group plc)have agreed to review individual sales of the products and provide customer compensation where appropriate, in a follow-up to a probe started in June 2012 into the products.

The FSA last year found serious failings in how banks marketed the products, with regulatory rules breached in more than 90% of the 173 sales it initially reviewed. The products are designed to protect small businesses from moves in interest rates, but the FSA said many customers didn't understand the risks and the end product didn't always meet their actual needs. It said rewards and incentives for banks selling the products drove the failures.

The full review is expected to take six to 12 months. Barclays last year set aside GBP450 million against claims over the products, while RBS and HSBC made smaller provisions. Lloyds previously said it didn't expect its costs to be material.

http://www.4-traders.com/news/UK-Banks-Agree-to-Repay-Some-Interest-Rate-Hedge-Customers--15984565/

Oil-Service Companies Plunge as Saipem Lowers Forecast

Saipem SpA (SPM) plunged a record 39 percent after Europe’s largest oil-service provider cut profit forecasts, raising concern earnings across the industry will be lower than analysts estimated.

Saipem had its rating cut by at least 11 brokers after yesterday’s announcement that 2013 earnings before interest and tax would be 750 million euros ($1 billion) compared with analyst estimates of 1.7 billion euros. The company said the revised outlook was based on a review of its contracts.

Shares plummeted as much as 11.84 euros to 18.61 euros in Milan trading. The stock traded at 19.71 euros at 11:37 a.m. local time. Other providers of engineering to the oil industry dropped.Technip SA (TEC), Europe’s second-largest, fell as much as 7.9 percent, its biggest drop in more than a year. London-based Petrofac Ltd. (PFC) also tumbled as much as 7.9 percent.

http://www.bloomberg.com/news/2013-01-30/oil-services-plunge-in-europe-as-saipem-cuts-earnings-forecast.html

Coal prices may have touched bottom

Coal prices may have touched bottom and be poised to rise as disruptions from Colombia to Indonesia threaten supplies, Barclays Plc’s investment-banking unit said in a report.

Benchmark contracts are on the verge of breaking out of a range as workers at Cerrejon, a Colombian coal mine owned by BHP Billiton Plc (BHP), Xstrata Plc (XTA) and Anglo America Plc (AAL), prepare to strike as early as next week, Trevor Sikorski, an analyst at Barclays in London, wrote today. Bad weather in the Pacific Basin may affect shipments from Australia and Indonesia and rail work stoppages may arise in New South Wales, Australia, he said.

“Further price downside could be limited, given the low prevailing levels and the potentially bullish drivers” outlined, Sikorski said.

http://www.bloomberg.com/news/2013-01-25/coal-may-have-bottomed-out-as-supply-cuts-loom-barclays-says.html?cmpid=yhoo

Apple: Should you buy the shares?

Apple shares have been tumbling after the technology giant posted weaker-than-expected iPhone sales over Christmas. The shares are now down by a third since their peak at $705.07 in September.

The news prompted Wall Street analysts to take a red pen to their price targets, prompting investors to flee the shares in droves. However, the falls could have presented a buying opportunity and now is a good time for UK investors to be looking at foreign investments, as Sterling looks set for a period of weakness.

Were the results so bad that such as slump is warranted? Probably not.

Apple’s 2013 earnings multiple is just 10 compared with Centrica on 12.5 and caterer Compass on 16.3. The average price target of Wall Street analysts is still $650 a share, some 41pc above the current price.

With currency markets working in the favour of UK investors and the valuation now so low, it looks like a good time for UK investors to take a bite out of Apple shares.

http://soc.li/oGz1oAR

http://www.telegraph.co.uk/finance/markets/questor/9824696/Apple-Should-you-buy-the-shares.html

Pound remains under pressure as it loses safe haven status

Sterling had dipped to its lowest level against the dollar in nearly five months as Cameron spoke, although it bounced a little afterwards following the publication of data showing a fall in unemployment in the three months to December.

But by setting out the case for Britain to remain in the 27-member union, the prime minister gave a small comfort to investors who have been selling out of sterling since the start of year and have made the UK currency one of the worst performers of any G10 country so far this year.

Ross Walker, UK economist at Royal Bank of Scotland, warned that sterling was facing an "amber warning light" after a 3.45% decline against the euro and 2.5% fall against the dollar in the first three weeks of the year.

The restoration of calm in the eurozone where periphery countries have returned to the bond markets of late – including Portugal – has enticed investors back into the euro, which in turn has weakened sterling. Foley believes this means that sterling is now "exposed … to the full brunt of the UK fundamentals".

http://www.guardian.co.uk/business/2013/jan/23/pound-under-pressure-safe-haven-eu

Shrinking Pool of Chinese Workers Will Limit Recovery

China’s growth rebound will be capped by a labor-force squeeze and shrinking resources that leave the government satisfied with rates of expansion as low as half the peak during the past decade.

A pace of 7 percent to 8 percent reflects economic forces, Ma Jiantang, head of the National Bureau of Statistics, said on Jan. 18 after reporting 7.9 percent expansion in the fourth quarter from a year earlier. He said a decline last year in the working-age population was of “great importance.”

Ma’s comments bolster the contention that China’s economy is permanently downshifting a gear as its one-child policy drives down the labor force. Slower growth presents challenges for incoming leaders Xi Jinping and Li Keqiang, and may limit the country’s potential as a market for everything from Australianiron ore to German machinery.

“A declining labor force is just one of several economic headwinds looming on the horizon,” said David Loevinger, former senior coordinator for China affairs at the U.S. Treasury Department, now an Asia analyst in Los Angeles at TCW Group Inc.

http://www.bloomberg.com/news/2013-01-18/china-labor-squeeze-caps-rebound-as-bofa-sees-6-growth-by-2020.html

US tech sector underperforms

Wall Street expects the tech sector's fourth-quarter earnings to be down 1.1 percent from a year ago, the first drop since the third quarter of 2009, even though overall S&P 500 profits are still forecast to show growth, according to Thomson Reuters data.

Chip companies are expected to be among the worst performers because of softer-than-expected personal computer sales. Weak overseas demand and worries about the U.S. fiscal crisis have also likely caused corporations to put off IT spending.

"The lack of economic growth we've seen in Europe, the deceleration of emerging markets - that has put a significant amount of pressure, particularly on technology," said Omar Aguilar, chief investment officer for equities at Charles Schwab Corp, in San Francisco.

Tech stocks have struggled recently and further weakness could dent the bullish 2013 forecasts many strategists have for the U.S. stock market. But some investors and analysts say weak fourth-quarter numbers have already been baked into many tech stock prices and valuations are attractive.

Analysts at Bank of America Merrill Lynch wrote in a note this week that tech stocks are undervalued by about 32 percent, more than any other sector, based on current forward price-to-earnings ratios. Every tech industry except IT services is trading well below historical levels, the note said.

Within tech, "you're finding a lot of cash-rich companies trading at reasonably cheap multiples. So to value investors like us ... it starts to seem intriguing," said Eric Kuby, chief investment officer at North Star Investment Management Corp in Chicago, whose firm owns Microsoft Corp and Intel Corp.

It is unusual for tech, the largest of the Standard & Poor's 500 index's 10 industry sectors and accounting for nearly 23 percent of earnings, to underperform. Tech has been in the top half of S&P sectors for the last four earnings periods and it has posted stronger profit growth than the overall market 83 percent of the time in the last 10 years, according to Thomson Reuters.

http://www.4-traders.com/QUALCOMM-INC-4897/news/Once-reliable-technology-sector-drags-down-earnings-15827654/?countview=0

Profit from a falling pound

look for firms with overseas exposure and healthy dividends.

Video
http://www.telegraph.co.uk/finance/financevideo/yourmoneytheirhands/9793047/Questor-Plus-share-tips-profit-from-a-falling-pound.html

India Car Sales Continue to Lose Speed

India's auto industry - weighed down by high interest rates and rising fuel prices - continued to lose speed in December, with car sales recording their sharpest fall in four months and the local association of auto makers cutting its forecast for the fiscal year through March.

The Society of Indian Automobile Manufacturers, which collates data for the industry, Wednesday said that December car sales slipped 12.5% to 141,083 autos -- the biggest percentage drop since a 19% decline in August. It added that it now expects car sales for this financial year to be either flat or to grow 1% from the previous 12 months.

...sales of medium and heavy vehicles have been hit by a moderation in agricultural growth, a drop in mining activity, slowing industrial activity and lower demand from the replacement market.

http://blogs.wsj.com/drivers-seat/2013/01/09/in-india-car-sales-struggle-against-slow-economy-pricey-fuel/?mod=WSJBlog&mod=WSJ_autoIndustry_Driversseat

Turkey Beating Norway as Biggest Regional Oil Driller

Turkey is drilling for oil and natural gas with more rigs than any European country and plans new rules in 2013 to speed exploration of energy supplies for the fastest-growing major economy after China.

The country fielded 26 rigs at Dec. 31, according to data compiled by Bloomberg, and the number has since risen to 34, Energy Ministry officials said yesterday. Turkey has leapfroggedNorway as offshore drilling increased in the Black and Mediterranean seas. Spending on exploration jumped to $610 million last year from $42 million a decade earlier.

With economic growth forecast at 3.5 percent this year and about twice the pace of the most advanced economies to 2017, Turkey is drilling for its own energy to ease reliance on imports from Iran, Iraq and Russia. State-owned Turkish Petroleum Corp. has taken Royal Dutch Shell Plc (RDSA) and Exxon Mobil Corp. (XOM) as partners, after neighboring Israel and Cyprus made some of the decade’s biggest gas finds in the past three years.

Turkey imported about 92 percent of the oil it consumed in 2011 and 98 percent of the natural gas, according to the U.S. Energy Information Administration.

The scale of Turkey’s energy imports is swelling the current account deficit, fueling inflation and threatening to restrain economic growth.

http://www.bloomberg.com/news/2013-01-10/turkey-beating-norway-as-biggest-regional-oil-driller-energy.html

Hong Kong’s luxury sales rebounded

Hong Kong’s luxury sales rebounded in a sign that confidence is returning to a Chinese economy that probably picked up pace in the final three months of last year after a seven-quarter slowdown.

Chinese consumers have overtaken U.S. shoppers this year to become the world’s biggest buyers of luxury goods, accounting for 25 percent of global sales through purchases at home and overseas, consultant Bain & Co. said.

U.S. consumers now account for one-fifth of the world’s luxury sales, followed by the Japanese shoppers at 14 percent, according to a report released by Bain last month.

http://www.bloomberg.com/news/2013-01-03/hong-kong-luxury-sales-rebound-on-confidence-in-china-s-recovery.html

BMW sales surged 39 percent in the U.S

Bayerische Motoren Werke AG (BMW)’s BMW sales surged 39 percent in the U.S. in December to top Daimler AG (DAI)’s Mercedes-Benz in luxury-auto deliveries for the year as U.S. light-vehicle sales reached the highest level since 2007.

U.S. automakers General Motors Co., Ford Motor Co. (F) and Chrysler Group LLC all beat estimates for December sales while major Asian automakers missed. For the year, GM’s share fell to the lowest level since 1924, while Chrysler surprised analysts by gaining more market share than any automaker other than Toyota and Honda Motor Co.

http://www.bloomberg.com/news/2013-01-04/bmw-tops-mercedes-as-u-s-auto-sales-highest-since-2007.html

Automakers in China, tepid growth

Executives at local and foreign carmakers in China predict the overall vehicle market will grow 5 to 10 percent this year, roughly in line with 2012, when demand was hit by a slowing economy and rising fuel costs.

Japanese carmakers will likely continue to struggle in 2013 after they saw their China sales plunge by about half in 2012 after anti-Japanese protests and boycotts of Japanese goods broke out in mid-September over a territorial dispute between the two governments.

The market grew 46 percent in 2009 and 32 percent in 2010, thanks mainly to government incentives that expired at the end of 2010. Growth fell to just 2.5 percent in 2011.

Adding to sluggish the performance of the Japanese manufacturers, further initiatives by local governments to restrict car sales to help ease the worsening traffic gridlock is likely to weigh on the overall market.

So far Beijing, Guangzhou, Shanghai and Guiyang in southwestern China have cut the number of license plates they issue. In Guangzhou, the measure, which was introduced in August, will cut annual vehicle sales by a third.

http://www.reuters.com/article/2013/01/04/us-china-autos-outlook-idUSBRE90306320130104

Samsung to widen smartphone gap with Apple this year: Strategy Analytics

Global smartphone shipments will jump 27 percent to 875 million this year, slowing from last year's torrid 41 percent pace as growth is easing in many key markets such as North America, China, the developed economies of Asia, and Western Europe, Mawston said.

South Korea's Samsung Electronics is forecast to sell 290 million smartphones this year, up from a projected 215 million in 2012, the research firm said. Apple's smartphone sales are projected to reach 180 million this year, up 33 percent from last year, slightly trailing Samsung's 35 percent increase.

This will give Samsung a 33 percent share of the 2013 smartphone market, up from last year's estimated 31 percent, while Apple will hold 21 percent, versus last year's 20 percent.

Samsung may launch the Galaxy S IV, a new version of its flagship smartphone, in April, and the Galaxy Note III phablet and a series of other new smartphones over the course of this year, media reports and analysts have said recently.

"Samsung plays in more segments and this should enable it to capture more volume than Apple (assuming Apple does not launch an 'iPhone Mini' this year)," Mawston said.

Brian J. White, a researcher at Topeka Capital Markets, on Wednesday raised the possibility that Apple may launch a smaller and lower-priced iPhone - the iPhone Mini - to further penetrate markets such as China and India.

http://www.reuters.com/article/2013/01/04/us-samsung-apple-smartphones-idUSBRE90304I20130104

Manufacturing upbeat or down in December

Manufacturing in the United States and China grew in December, suggesting the global economy was on course for moderate growth this year, even as the euro zone looked set to sink deeper into recession.

EUROPE

Germany, Europe's largest economy, saw its crucial manufacturing sector shrink for the 10th straight month and at a faster pace, while French data showed a decline in all but one of the past 17 months.

The slump in Spain deepened and Italy's index, although improved, remained below 50 for the 17th month.

Ireland was the only member of the currency union to show manufacturing growth in December.

"It's pretty grim really," said Jonathan Loynes at Capital Economics. "These surveys are pointing to a pretty deep recession. If the German industrial sector is contracting quite sharply, it is pretty hard to see where growth across the euro zone as a whole is going to come from."

Economists are cautiously optimistic the euro zone economy will start growing at least by the second quarter of this year.

British factory activity jumped unexpectedly to its fastest pace since September 2011, raising the chance that the economy eked out some growth at the end of 2012. <GB/PMIM>

ASIA

Manufacturing activity expanded in Asia as a whole, driven by revival in China's economy, but export demand was uneven, pointing to further sluggish growth for the region.

For Asia, much hinges on the pace and quality of the recovery in China as a new generation of leaders prepares to take charge.

In India, Asia's third-largest economy, the HSBC Markit Manufacturing PMI, which gauges the business activity of the country's factories, but not its utilities, jumped to 54.7 in December from 53.7 in November, its biggest monthly rise since January 2012.

Activity in Southeast Asia's largest economy, Indonesia, expanded but at a slower rate, as growth of new export orders eased from a month earlier.

A lot may depend on elsewhere, however.

"Asia is gradually improving, but the region, including China, remains largely exposed to exports and without signs of improvement in the U.S. and Europe it will be hard for activity to take off," said Frederic Neumann, co-head of Asian economics at HSBC.

http://www.4-traders.com/news/Euro-zone-factory-slump-deepens-U-S-Asia-perk-up--15732135/?countview=0