NY precious metals, copper broadly up by noon

Date Mar 12 2010 15:31:45 Source:Reuters
NEW YORK, March 11 (Reuters) - The following are New York midsession prices and market updates for precious metals and copper:
    * COMEX April <GCJ0> up $0.40 at $1,108.50 an ounce at 12:05 p.m. EST (1705 GMT).
    * Ranged from $1,100.50 to $1,111.70.
    * COMEX gold volume at 98,050 lots at 11 a.m.
    * Market rebounded after earlier losses pressured by a firmer dollar - traders.
    * Spot gold <XAU=> at $1,105.40 an ounce, versus the $1,107.85 level in New York late on Wednesday.
    * London gold afternoon fix <XAUFIX=> at $1,104.
    * May <SIK0> up 7.87 cents at $17.095 an ounce.
    * Range spans $16.835 to $17.165.
    * Spot silver <XAG=> at $17.06, against $16.97 an ounce in the previous session''s late quote in New York.
    * London silver <XAGFIX=> fixed at $16.91 an ounce.
    * April <PLJ0> up $11.30 at $1,601.70 an ounce.
    * Spot platinum <XPT=> at $1,598 an ounce.
    * June palladium <PAM0> down $4.65 at $460.05 an ounce.
    * Spot palladium <XPD=> at $458 an ounce.
    * May copper <HGK0> up 1.65 cents, or 0.5 percent, at $3.3845 a lb.
Friday, 12 March 2010 01:15:52

CORRECTION-OFFICIAL-Cleared Feb LME aluminium volumes fall -LCH

Date Mar 12 2010 15:30:44 Source:Reuters
   (Official correction to show that original data from LCH.Clearnet did not provide a like for like comparison of numbers between this year and last. Adds paragraphs 2 to 5. Recasts throughout)
   LONDON, March 9 (Reuters) - Cleared volumes of dollar-denominated aluminium on the London Metal Exchange fell to 2.299 million lots in February from levels above 3.333 million lots in the same month last year, data from LCH.Clearnet showed on Tuesday.
   "The volumes reported by LCH.Clearnet are cleared volume not traded volume as LCH.Clearnet do not receive house to house and house to non-segregated cross trades from the LME." 
   Late last year the LME launched LMESmart -- a system for matching and registering trades.
   "Since then the LME matches all trades and sends only the exchange member to member trade halves and segregated client contracts to be cleared by LCH.Clearnet," LCH.Clearnet said.
   Reuters asked the clearing house to provide "like for like" numbers. "We are not able to provide further volume data," it said.
   Cleared volumes of dollar-denominated aluminium in January and February this year on the LME was above 4.512 million lots from more than 7.236 million lots in the same period last year, LCH said.
   For dollar-denominated copper, the equivalent cleared numbers for February this year and last were 1.656 million and 1.775 million lots respectively. The total for the first two months of this year was 3.123 million lots compared with 4.072 million lots, LCH added.
   One lot equals 25 tonnes for copper and aluminium.
Friday, 12 March 2010 00:41:27

Gold slips lower as pressure remains on euro

Date Mar 12 2010 15:29:29 Source:Reuters
 * Gold <XAU=> bid at $1,104.40 an ounce at 1615 GMT against $1,107.85 late in New York on Wednesday.
 * Bullion prices slip towards $1,100 an ounce as the dollar firms versus the euro after U.S. trade data, but prices are supported as buying emerges at lower levels.
 * Silver <XAG=> bid at $17.04 an ounce against $16.97.
 * Platinum <XPT=> bid at $1,589 an ounce versus $1,592.
 * Palladium <XPD=> bid at $453 an ounce against $461.50.
Friday, 12 March 2010 00:29:46

Don''t politicize yuan, China central bank tells Obama

Date Mar 12 2010 15:10:02 Source:Reuters

(Reuters) - The United States should not make a political issue out of the yuan, a Chinese central banker said on Friday, as the two countries lurched toward a potentially serious clash about Beijing''s currency regime.

People''s Bank of China Vice Governor Su Ning was responding to a question about remarks on Thursday by President Barack Obama, who called on China to move to a "more market-oriented exchange rate."

Speaking on the sidelines of China''s annual session of parliament, Su said the United States should look to itself to boost its exports and not cast blame on other countries.

"We always refuse to politicize the yuan exchange rate issue, and we never think that one country should ask another country for help in solving its own problems," he said.

Obama''s rare comment about the currency comes as his administration faces a decision over whether to label China a "currency manipulator" in a semi-annual Treasury Department report due on April 15.

With Obama facing domestic pressure to take a tough line against China and Beijing clinging to a de facto dollar peg, this U.S. Treasury report could be a tipping point.

If China flinches, it may soon resume the yuan appreciation halted in mid-2008 to cushion the country from the global credit crunch. If not, scattered trade spats between the two giants could escalate into a full-fledged dispute, with the U.S. even considering across-the-board tariffs against Chinese products.

"The chances of a collision have never been higher," Stephen Green, China economist for Standard Charter. "In the United States, the debate has moved from ''is the renminbi a problem'' to ''how do we resolve this problem''." The yuan is also called the renminbi.

Asked whether it might be counter-productive for Washington to ratchet up pressure over the yuan, Green said: "That''s the $64-billion question to which no one really knows the answer."

Li Jianwei, a director in Development Research Center, a think-tank under China''s cabinet, was unequivocal: demands for aggressive yuan appreciation will harm not only China but also the United States and others.

"A stronger yuan will hit exports and lead to a double dip in the Chinese economy, which in turn will hamper the global economic recovery," Li said.


Still, there are hints of division within China about the yuan. With inflation fast creeping up, investors are beginning to wonder just when the government will allow the yuan to rise again.

Data this week showed that China has considerable growth momentum and mounting price pressures, leading many analysts to conclude that the central bank will soon increase reserve requirements for the third time this year.

The central bank has been in overdrive trying to dispel worries over inflation after consumer prices rose more than expected to 2.7 percent in the year to February from 1.5 percent in the year to January.

"We had expected that February''s CPI would be higher than January," Su said on Friday. After adjustment for seasonal factors, month-on-month inflation did not show any sign of accelerating, he said.

"We are still observing to see whether the price trend is upward or downward, but we hope prices can move down a little bit," he said. He added that inflation was likely to peak in June or July when the base effect caused by the comparison with last year started to fade.

Central bank governor Zhou Xiaochuan also sounded a soothing note on inflation on Thursday, describing February''s jump as in line with his expectations.

China''s central bank has increased required reserves twice this year as part of its efforts to slow rampant credit growth and prevent the economy from overheating, and economists suspect a third rise is imminent.

But officials have shied away from drastic tightening for fear that fragile global demand could still sap the economy and a senior central banker said it was a tough to strike the right balance between cooling lending while sustaining growth.

Most economists do no not expect interest rates to rise until the second quarter at the earliest.

"The market is in a wait-and-see mode now. The PBOC may want to wait to see March data before deciding whether to tighten monetary policy and raise interest rates," said a money market trader at a mid-sized bank in Shanghai.

China Mobile invests $5.8 billion in Shanghai Pudong Development Bank

Date Mar 12 2010 15:03:27 Source:FinanceAsia

China Mobile will pay Rmb39.8 billion ($5.8 billion) for a 20% stake in Shanghai Pudong Development Bank (SPDB) as the two firms aim to tap into the market for mobile payments.

The deal is intended to enable the two parties to build mobile finance and mobile e-commerce businesses encompassing mobile phone payments, mobile bank cards and mobile funds transfers.

Hong Kong-listed China Mobile is buying 2.21 billion new shares in SPDB at Rmb18.03 per share. The price represents a discount of 13.1% to SPDB''s closing price on the Shanghai Stock Exchange on February 25, the last trading day before the parties entered a share subscription agreement, and a discount of 10% to the average trading price over the last 20 trading days up to the day SPDB''s board approved the deal. It is at a 120% premium to the net asset value of SPDB as of September 30 last year.

Chinese state-owned enterprise China Mobile is a telecommunications firm offering mobile services through a network covering 98% of the country. It will route the investment through a wholly owned subsidiary, Guangdong Mobile, which provides mobile services in Guangdong province. China Mobile was advised on the investment by China International Capital Corporation.

China Mobile will become the second-largest shareholder in SPDB after Shanghai International Group. As long as China Mobile owns 20% of SPDB, it has the right to nominate two non-independent directors and one independent director to the board.

SPDB is a joint-stock commercial bank with its headquarters in Shanghai. It has 33 branches and 565 outlets across China, as well as five subsidiaries in China and a representative office in Hong Kong. The deal, which involves the issue of new shares, will allow SPDB to recapitalise.

In a research report issued yesterday, Citi reiterated its buy recommendation on China Mobile. In the long-term, Citi expects China Mobile to be the strongest operator in China''s three-player telecom market, based on its diversified growth profile and the operational flexibility China Mobile derives from its size. Citi''s concerns are the "excessive competition and heavy-handed government intervention in the telecom market, with asymmetric regulations helping smaller/weaker telecom operators at China Mobile''s expense".

Mobile companies and financial services firms are forging innovative partnerships to leverage each other''s strengths and grow their businesses. In December last year SK Telecom, Korea''s largest mobile phone company, bought 49% of Hana Financial group''s credit card unit in the first instance of an equity partnership between a credit card company and a telecom firm.

China Mobile''s share price gained 1.6% to HK$75.35 on the Hong Kong exchange yesterday, while in Shanghai, SPDB rose 2.7% to Rmb21.70 as it resumed trading after being suspended since February 26.