Sterling falls, bruised by UK credit rating downgrade

Sterling fell to its weakest since July 2011 against a basket of major currencies on Monday, the first trading day after Moody's stripped the UK of its triple-A credit rating.

Further falls in the pound were expected in the coming weeks given the grim outlook for the British economy, the prospect of more monetary easing and growing evidence that the Bank of England is comfortable with a falling currency as it seeks to rebalance the economy and encourage exports.

"Investors will remain nervous about the pound," said Ian Gunner, portfolio manager at Altana Hard Currency Fund. "Monetary policy will now be more significant and the minutes last week showed more easing could be on the way."

http://www.4-traders.com/news/Sterling-falls-bruised-by-UK-credit-rating-downgrade--16299180/

U.S. companies willingness to spend capital

U.S. companies' capital spending plans are holding up, and mostly exceeding Wall Street forecasts, in the face of policy concerns created by arguments in Washington over the fiscal cliff, the debt ceiling and now automatic spending cuts.

Their willingness to spend on new offices, plants and machinery, as well as a pickup in deal making, shows that they are starting to dig into the massive amounts of cash that has been collecting more dust than interest on their balance sheets. That could prove a welcome counterpunch to a softer outlook for spending by consumers and government.

Clearly some will also be overseas. But there has been a surge in investment in oil and gas production in the United States, and there are signs that some manufacturing is returning, thanks to the promise of a cheaper energy supply.

http://www.4-traders.com/APPLE-INC-4849/news/U-S-companies-plan-to-spend-a-boost-for-the-economy-16253203/?countview=0

U.K. May Start Lloyds Banking Stake Sale This Year

The U.K. government may start selling its 40 percent stake Lloyds Banking Group Plc this year after a surge in the bank’s shares, according to Robert Talbut, chief investment officer of Royal London Asset Management Ltd.

A partial sale would be well-received by investors and voters, two years before Britain’s next general election, said Talbut, who helps manage 45 billion pounds ($70 billion) of assets, in an interview. Lloyds has gained 56 percent in the past year to 55.3 pence in London trading, 14 percent below the government’s break-even price.

Taxpayers injected about 20 billion pounds in Lloyds, Britain’s biggest mortgage lender, and 45.5 billion pounds in Royal Bank of Scotland Group Plc to bolster the lenders’ capital amid the 2008 financial crisis. The government has been prevented from selling its stakes as a stalled U.K. economic recovery and banking scandals including loan insurance mis- selling have left the shares behind the U.K.’s break-even price of investment.

http://www.bloomberg.com/news/2013-02-20/u-k-may-start-lloyds-stake-sale-this-year-talbut-says.html

Worldwide mobile phone sales fell in 2012: Gartner

Sales of mobile phones around the world fell last year for the first time since 2009 as consumers shunned cheaper feature phones, research company Gartner said on Wednesday.

"Tough economic conditions, shifting consumer preferences, and intense market competition weakened the worldwide mobile phone market," Gartner analyst Anshul Gupta said on Wednesday.

Smartphone sales, a category dominated by Samsung (>> Samsung Electronics Co., Ltd.) and Apple (>> Apple Inc.), continued to rise, he said, and the higher-end devices would account for more than half the market for the first time this year.

Total worldwide mobile sales to end users fell 1.7 percent to 1.75 billion units in 2012, Gartner said. Samsung and Apple continued to dominate the market, with the Korean company selling 385 million phones in 2012, of which 53.5 percent were smartphones, with Apple selling 130 million smartphones.

In the fourth quarter alone, Apple and Samsung accounted for 52 percent of smartphone sales, up from 46 percent in the third quarter.

Chinese company Huawei (>> Huawei Technology Co Ltd) reached third spot in worldwide smartphone sales for the first time in the fourth quarter, Gartner said. It sold 27.2 million smartphones to end users in 2012, up 74 percent.

http://www.4-traders.com/APPLE-INC-4849/news/Worldwide-mobile-phone-sales-fell-in-2012-Gartner-16046984/?countview=0

Apple Rises, in Talks to Return Additional Cash

Apple Inc. rose as much as 3.1 percent after saying it’s in “active discussions about returning additional cash to shareholders,” and that it’s considering a proposal that it issue preferred stock.

Apple, which has an existing plan to return $45 billion to shareholders over three years, said it will have completed $10 billion of that plan next week.

http://www.bloomberg.com/news/2013-02-07/apple-rises-after-saying-it-s-in-talks-to-return-additional-cash.html

India Predicts Growth at Decade Low

India forecast the weakest economic growth in a decade as subdued investment and elevated inflation add pressure on Prime Minister Manmohan Singh to extend policy changes and revive his development agenda.

Gross domestic product will rise 5 percent in the 12 months through March 2013, below last year’s 6.2 percent and the least since 4 percent in 2002-2003, a Central Statistical Office statement showed in New Delhi today. The median of 34 estimates in a Bloomberg News survey was 5.5 percent.

India faces inflation of more than 7 percent, one of the fastest levels in major emerging nations, limiting the extent the central bank can cut interest rates to spur expansion. The government has vowed spending curbs to damp price gains as it prepares to unveil the annual budget, part of a wider policy overhaul since September to lure capital inflows and ease bottlenecks by speeding up infrastructure projects.

http://www.bloomberg.com/news/2013-02-07/india-predicts-growth-at-decade-low-as-investment-slows.html

Chinese advertising ban hurting luxury sector

Burberry Group is the worst performing stock on the pan-European FTSEurofirst 300 index, with rival luxury goods companies also falling as traders cite a Chinese advertising ban on certain expensive gift items as hurting the sector.

China's Xinhua state news agency reported earlier this week that the country's radio and television stations are to ban advertisements for expensive gifts such as watches, rare stamps and gold coins.

"Ban on TV/radio in China hurting luxury sector," says a trader, commenting on the fall in Burberry's share price.

JN Financial trader Rick Jones says Burberry and other luxury goods companies may have to deal with the prospects of slower growth from their Asian markets in future.

"The growth coming from Asia might be slightly diminishing. There are signs that we're expecting to see lower growth forecasts for Burberry," says Jones.

http://www.lse.co.uk/ShareNews.asp?shareprice=BRBY&code=1fafpmz8&headline=STOCKS_NEWS_EUROPEBurberry_luxury_peers_fall_on_China_ad_ban

U.S. shale gas revolution

The United States is enjoying an energy bonanza thanks to shale gas, making it a magnet for industry, reducing import dependence and challenging Europe as it battles to dig itself out of recession, energy officials say.

Ukraine is said to have Europe's third-largest shale gas reserves at 42 trillion cubic feet (1.2 trillion cubic meters), according to the U.S. Energy Information Administration.

Its reserves are dwarfed by those of France however, estimated to be Europe's largest at 180 trillion cubic feet.

France has banned the procedure, known as fracking which is used to extract shale gas and which involves pumping vast quantities of water and chemicals at high pressure through drill holes to prop open shale rocks.

A recent confidential study by the German intelligence agency (BND) suggested the United States could turn from being the world's greatest energy importer into an oil and gas exporter by 2020, reducing its dependence on the Middle East and thereby giving it much more freedom in policy making.

China by contrast would become much more dependent on Middle East oil to fuel its rapid expansion.

Illustrating just how rapidly the shale revolution has taken hold, shale gas accounted for just 1 percent of gas production in 2005, whereas today it is a third, and by 2040 it will be 50 percent, U.S. special envoy Pascual said.

http://www.4-traders.com/news/U-S-shale-gas-revolution-throws-down-the-gauntlet-to-Europe--16006252/