A look at economic developments around the globe

AP News
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Posted: Dec 15, 2009 3:03 PM

A look at economic developments and activity in major stock markets around the world Tuesday:

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CAIRO _ OPEC nudged its 2010 forecast for global oil demand slightly higher, a week before a scheduled meeting, but cautioned that the pace of the global recovery may affect consumer appetite for its chief export.

The 12-nation Organization of the Petroleum Exporting Countries said in its December Monthly Oil Market Report that world oil demand was expected to increase by 800,000 barrels per day to 85.13 million barrels per day, largely from developing countries. That's a 70,000 barrel per day upward revision from its November forecast.

The group, which supplies about 35 percent of the world's crude, said the market still faced some risks linked in part to the pace of the world's ability to rebound from its worst recession in over six decades.

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WASHINGTON _ Foreign demand for long-term U.S. financial assets slowed in October and China's holdings of U.S. Treasury securities were unchanged.

Continued strong demand for U.S. debt is critical to financing America's soaring budget deficits and keeping domestic interest rates low enough to support a broad economic recovery.

Foreigners purchased $20.7 billion more in assets than they sold in October, down from a $40.7 billion increase in September, the Treasury Department said.

China, the largest holder of U.S. Treasury securities, maintained its holdings at $798.9 billion in October.

China's foreign holdings of Treasury securities are a direct result of the huge trade deficits the U.S. runs with China.

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HONG KONG _ China has outstripped the U.S. in the amount of money raised from stock listings, underscoring the region's stronger economy and a resurgence in investment.

Companies have raised nearly $52 billion from initial public offerings on exchanges in Hong Kong and mainland China so far this year, according to financial research firm Dealogic. That's about twice as much as the some $26.5 billion in American IPOs. In 2007, the amount of money raised from IPOs in Hong Kong and the mainland also exceeded the U.S. total.

Hong Kong alone has drawn more than $27 billion this year, making the southern Chinese financial center the world's top city for equity capital raising for the first time, according to Dealogic's records dating to 1997. Since 2000, Wall Street has led every year except for 2006, when London was the destination of choice.

The activity underscores the yawning gap in economic strength between Asia and the West.

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SHANGHAI _ China's economic planners have vowed to curb property speculation while downplaying fears that surging prices for real estate, food and other essentials may herald an inflationary spiral.

A statement by the main economic planning agency outlined various reasons for price increases that contributed to a rise in the consumer price index last month, the first increase since January.

After slowing in late 2007 through 2008, property sales bounced back this year. Prices have risen steadily since March, helped by lavish government support, tax cuts, a flood of bank lending _ and strong interest from speculators who are said to be among the biggest buyers in Shanghai, the financial capital.

China's cabinet, the State Council, pledged after an economic meeting Monday to promote healthy growth in the real estate sector, promising a bigger supply of affordable housing as property prices in some cities soar.

China's main index fell 0.9 percent amid news the government was vowing to clamp down on surging property prices. In other Asian markets, Japan's Nikkei 225 stock average fell 0.2 percent to 10,083.48 and Hong Kong's Hang Seng retreated 1.2 percent to 21,813.92. South Korea's Kospi rose 0.1 percent to 1,665.85, and Australia's benchmark added 0.4 percent.

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LONDON _ In European trading, the FTSE 100 index of leading British shares closed down 0.6 percent at 5,285.77, while Germany's DAX rose 0.2 percent to 5,811.34 and France's CAC 40 was 0.1 percent higher at 3,834.09.

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CAIRO _ Gulf Arab nations put into force a monetary pact, moving a step closer toward the so far elusive goal of a single regional currency and greater integration between the mainly oil-rich states.

The announcement by Kuwait's finance minister came as leaders from the six-member Gulf Cooperation Council nations wrapped up a two-day summit.

Mustafa al-Shimali told Kuwait's official KUNA news agency that the launching of the monetary pact would now allow the governors of the central banks of the six GCC nations to set up "a timetable for the establishment of a regional central bank, with the aim of launching a unified Gulf currency."

The GCC, which groups Kuwait, Saudi Arabia, Qatar, the United Arab Emirates, Oman and Bahrain, has been trying for years to develop a unified currency as part of a push for broader economic integration between their predominantly oil-rich nations.

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VIENNA _ An investigation has been launched to clarify the circumstances surrounding the near demise of troubled financial institution Hypo Alpe Adria, Austria's justice ministry said.

Austria on Monday nationalized Hypo Alpe Adria, a unit of German public-sector bank BayernLB, to prevent it from sliding into a bankruptcy fueled in part by bad loans _ most of them in Eastern Europe. The decision came after a weekend of intense, closed-door crisis talks.

In a statement, the ministry said prosecutors in the southern city of Klagenfurt were probing whether those responsible for the bank committed breach of trust and fraud. The statement did not provide any names and stressed the presumption of innocence.

There was also talk that other banks may face a similar fate having notched big losses too.

Austria's Die Presse newspaper said the country's three banking supervisory bodies have put Oesterreichische Volksbanken AG, the country's fourth largest bank, under surveillance. A central bank spokesman denied the report, saying there was no "watch list."

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BERLIN _ German investor confidence dipped for a third straight month in December amid expectations that Europe's biggest economy will recover only slowly from recession.

The ZEW institute's confidence index, which measures investors' outlook for the next six months, slipped to 50.4 points this month from 51.1 in November.

Despite the modest decline, ZEW said the index remains well above the historical average of 27 points, even though it has slipped back since September.

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EDINBURGH, Scotland _ Royal Bank of Scotland PLC Chief Executive Stephen Hester lashed out at "political interference" in the partly nationalized bank as shareholders met to approve its participation in a government asset protection program.

Still, bank shareholders gave formal approval to the bank's participation in a program that will let it offload shaky assets, part of the British government's massive efforts to shore up the country's banks after huge losses from the world financial crisis.

RBS has been subjected to a British government-imposed cap on bonuses and a forced sell-off of assets by European regulators since it accepted a multibillion taxpayer-funded bailout at the height of the financial crisis last October.

Hester, who has complained that the curbs on bonuses will restrict RBS's ability to find and retain workers needed to return it to profitability, said Tuesday that more than 15 billion pounds ($24 billion) has been wiped off the value of the government's 70 percent stake because of a related drop in RBS' share price.