UPDATE 2-Nigeria lays out roadmap for wealth fund launch

* SWF gets initial $1 billion start-up* Oil savings dip despite high price, output (Adds details, background)By Joe BrockABUJA, Oct 18 (Reuters) - Nigeria’s finance minister laid out a timeframe for the launch of the country’s sovereign wealth fund (SWF) on Tuesday, paving the way for Africa’s biggest oil exporter to improve the management of often-squandered crude oil earnings.Former World Bank chief Ngozi Okonjo-Iweala said the SWF would be managed by global auditor and consultancy KPMG, which had already begun recruitment to get a board for the fund in place by mid-December.”We are proceeding with the implementation of this very important programme following consultations with the Governors’ Forum because the feedback we have is the Nigerians strongly support saving for the future and the other core objectives of the fund,” Okonjo-Iweala told reporters in the capital.”It is also clear given the current challenges facing our economy and the global financial crisis, we cannot afford to waste any time.”President Goodluck Jonathan signed a bill into law in May authorising the SWF but political wrangling has caused delays.The powerful governors of Nigeria’s 36 states have expressed doubts about the SWF after meeting with Okonjo-Iweala this month. Some are concerned its implementation will mean there is less oil money allocated at state level.Okonjo-Iweala said discussions were ongoing with governors and further money would be put into the SWF only after talks with the state heads, meaning more negotiations could still delay the full commitment of oil savings to the fund.The SWF is meant to replace Nigeria’s Excess Crude Account (ECA), a pillar of IMF-backed reforms launched in 2003 into which the OPEC member nation saves any oil revenue above a benchmark price set each year in the budget.Okonjo-Iweala had announced that the 2012 budget would set the benchmark price at $75 a barrel but she said on Tuesday that this would be reduced to a more prudent $70 a barrel because of volatile oil markets.Nigeria exports more than 2 million barrels of crude oil a day and oil LCOc1 prices were $110 a barrel on Tuesday.Critics of the ECA say there is no clear legal basis on which to determine how the savings in the account should be shared between the tiers of government — federal, state and local — leading to constant political wrangling.An initial $1 billion has been allocated to the SWF from the ECA, which now contains $5 billion, down from $7 billion in April this year, despite high oil prices and production.The account contained more than $20 billion when late President Umaru Yar’Adua came to power in 2007 but by the end of last year held less than $1 billion as spending was ramped up ahead of nationwide elections.Nigeria was one of only three OPEC member states not to have a sovereign wealth fund. The government has said the fund will provide a firmer legal basis to ringfence Nigeria’s savings.It has three main aims: saving money for future generations, providing financing for badly-needed infrastructure, and providing a stabilisation fund to defend the economy against commodity price shocks.

WRAPUP 2-China inflation ticks lower, policy on pause

* Increases in food prices still a concern* Policy dilemma as global slowdown weighs* China already taken baby steps to support economy* Price official sees inflation pressures easing slightlyBy Aileen Wang and Koh Gui QingBEIJING, Oct 14 (Reuters) - China’s consumer inflation dipped to 6.1 percent in September, retreating further from three-year highs, although stubborn food price pressures will deter the central bank from loosening its policy reins anytime soon.A slowdown in price rises would be welcomed by policymakers as confirmation that a flurry of increases in interest rates and bank reserve requirements is working, just when China’s economy is showing increasing strains from the global downturn.Since inflation is still close to the three-year peak of 6.5 percent hit in July, few analysts believe China will follow the Brazil, Indonesia and Singapore and ease policy in the near-term, unless there is a marked deterioration in Europe’s debt woes.”The slowdown in the CPI last month is not drastic enough to reduce inflationary expectations, and it is still too early to confirm an easing trend in price pressures,” said Qiao Yongyuan, an analyst with CEBM in Shanghai.”The central bank is more likely to keep its current monetary stance unchanged and will wait for data in coming months to judge the direction of policy,” Qiao said.The dip in inflation in September was right in line with a poll of economists’ forecasts and lower than August’s reading of 6.3 percent.Food price pressures remained strong, however, rising 13.4 percent from a year earlier, unchanged from the pace in August’s data. Non-food inflation eased to 2.9 percent from 3.0 percent in August, the data showed.China’s producer price index in September came in below market expectations with a 6.5 percent rise from a year ago, compared with August’s 7.3 percent.”The data will come as a relief to the Chinese government, which now faces a deadlock in policymaking. It will fine-tune policies in December,” said Shen Jianguang, an economist with Mizuho Securities Asia in Hong Kong.China’s ruling Communist Party usually holds an annual agenda-setting economic policy conference in December.Headline inflation may have fallen for two months running, but other evidence shows that the battle is far from won, analysts said. Policymakers, worried about the potential for price rises to fuel social unrest, are sure to remain guarded.”Right now, they are not sure that inflation is slowing just (based on) one month’s number. The policy will be on hold for one or two more months,” said Shen.A central bank survey issued in September showed inflation expectations among urban Chinese rose in the third quarter.Monthly changes in the consumer price index suggested price pressures actually picked up in September, rising by 0.5 percent compared with 0.3 percent in August.The government pays particular attention to prices of pork, the staple meat for many ordinary citizens griping about inflation. Pork prices were 43.5 percent higher in September than a year earlier, barely easing from a 45.5 percent rise in August.After the data were released, a price official told the Xinhua news agency that inflationary pressures had reached a “turning point” and would begin to ebb, but only gradually.”Later, they will plateau and then fall, but the size of the fall will not be large,” said the official, Zhou Wangjun, of the National Development and Reform Commission, which steers economic policy.”Pork prices will steadily fall, but there are many other new factors pushing up prices,” added Zhou, who said those factors included resource and labour costs.POLICY ON HOLDAfter lifting interest rates five times and banks’ reserve requirements nine times since October 2010, Beijing has put policy tightening on hold as a slowdown in Europe and the United States threaten global growth.On Friday, Singapore eased its monetary policy, saying the “outlook for the global economy has deteriorated sharply.” That followed rate cuts in Brazil and Indonesia in recent weeks.China’s economic growth has been slowing down this year alongside increasing concerns that the developed world may be heading into a recession.Data on Thursday showed China’s import and export growth eased in September, as domestic and overseas demand cooled. The annual pace of exports to the troubled European Union in September more than halved from August.The government has already taken some baby steps to support the economy. On Wednesday, it unveiled measures to support cash-starved small businesses, which account for 75 percent of employment.A unit of China’s sovereign wealth fund is buying Chinese bank shares in the midst of concern about how they will be impacted by a mountain of local government debt.Some analysts say China may relax monetary policy if push comes to shove, although milder moves such as relaxing credit restrictions and lowering banks’ reserve requirements are likely to come before a more drastic rate cut.”The central bank may even see fit to ease policy before the end of the year, perhaps starting with cuts to very high reserve requirements, though it will be keen to keep a grip on lending growth,” said George Worthington, the chief Asia Pacific economist for IFR Markets.”Rate cuts are unlikely to be on the agenda barring a renewed global slump given the relatively modest tightening on that front since the last crisis in 2008/09.”

US STOCKS-Wall St eyes 2nd week of gains on data, Europe hopes

NEW YORK Oct 14 (Reuters) - U.S. stocks rose on Friday as better-than-expected retail sales further relieved fears of another recession while optimism kept growing that the euro zone was making progress on a solution to its debt crisis.Tech shares rallied after a blowout quarter from Google Inc , putting the S&P 500 on track for back-to-back weekly gains for the first time since early July.The benchmark S&P index is up 13 percent from the Oct. 4th intraday low of 1,074.77, which had temporarily tipped it into bear market territory.French and German officials are trying to put flesh on the bones of a crisis resolution plan in time for a European Union summit on Oct. 23, overshadowing Standard and Poor’s cut of Spain’s credit rating, a move that underlined the challenges facing Europe’s finance ministers.Adding to the positive tone, U.S. Commerce Department data showed September retail sales rose 1.1 percent from a month earlier, beating the median forecast in a Reuters poll for a 0.7 percent rise. Sales growth during August was revised upward to 0.3 percent.”The foggy picture in Europe is becoming slightly more clear, with governments talking about some constructive things that could potentially stop the trouble,” said David Smith, chief investment officer of Rockland Trust’s Investment Management Group in Rockland, Massachusetts.”And with retail sales being the kind of data that lessens the possibility of another recession, people are feeling good.”The Dow Jones industrial average was up 88.14 points, or 0.77 percent, at 11,566.27. The Standard & Poor’s 500 Index was up 11.10 points, or 0.92 percent, at 1,214.76. The Nasdaq Composite Index was up 23.18 points, or 0.88 percent, at 2,643.42.The recent rally since the S&P 500 briefly hit bear market territory on an intraday basis on Oct. 4 has pushed the benchmark index near 1,220, a key resistance point it’s been unable to cross since early August.”So long as things don’t deteriorate, this is a good buying opportunity for investors,” Smith said.Google Inc led the Nasdaq higher as shares jumped 5.7 percent to $591.09 a day after its results blew past Wall Street’s expectations, helped by strong advertising sales and deft cost controls.Apple Inc rose 2.2 percent to $417.36 as the newest version of its iPhone went on sale across the country.On the downside, Mattel Inc fell 1.2 percent to $27.46 as higher costs hurt its margins in the third quarter.Consumers remained pessimistic, despite the growth in retail spending. The Thomson Michigan’s preliminary October reading on consumer sentiment slipped to 57.5 from 59.4 the month before. It fell short of the median forecast of 60.2 among economists polled by Reuters.The Labor Department said overall import prices increased 0.3 percent, after falling 0.2 percent in August. Economists polled by Thomson Reuters had expected prices to drop 0.3 percent last month.

Danish design wins UK electric pylon competition

The gleaming white T-shaped design by Danish engineering firm Bystrup fought off 250 entries to claim a 5,000 pound ($7,800) prize, announced on Friday.National Grid hopes to build over 2,000 km in high voltage electricity lines over the next decade, said spokesman Chris Mostyn, as it replaces aging power lines and caters for new renewable projects.Erik Bystrup, founder of the winning firm, has been behind stripped-down electricity pylons that have appeared across Scandinavia.”We cut everything to the bone,” he said. “The design of a power pylon is not a question of making something that’s beautiful and looking nice. It’s a very technical thing to do.”It has to be capable of withstanding powerful forces like high voltage electricity and harsh British weather too, he added.Bystrup said the new design has a lighter carbon footprint because it uses fewer materials and gives a more positive impression than the current pylons, which he described as “grumpy old men standing in the fields, a hard worker bringing energy to you.”There are no fixed plans on where the design might be used, but the National Grid will now work with Bystrup to develop the T-Pylon further.Energy and Climate Change Secretary Chris Huhne praised the T-Pylon as “simple, classical and practical”.”We are going to need a lot more pylons over the next few years to connect new energy to our homes and businesses and it is important that we do this is in the most beautiful way possible,” Huhne said in a statement.The T-Pylon was unanimously voted the winner of the competition, launched in May 2011 by the Department of Energy & Climate Change, National Grid, and the Royal Institute of British Architects.

UPDATE 2-Locals to get 10 pct of Zimbabwe unit:Implats

By MacDonald Dzirutwe and Nelson BanyaSELOUS, Zimbabwe, Oct 13 (Reuters) - Impala Platinum said on Thursday it has agreed to turn over a 10 percent stake in its Zimbabwe units to locals after facing pressure from the government to give up equity or lose out in the state with the world’s second largest platinum reserves.Implats , the world’s second-largest platinum producer, said in September a government threat to remove Zimplats licence had “fallen away” after reaching an agreement on a revised plan to comply with a law requiring foreign mining firms to turn over a 51 percent stake to local blacks.The 10 percent stake is the first tranche is what is supposed to be a majority stake. Zimbabwe has not provided clear guidelines on how and when it expects companies to comply.Speaking at the official launch of the Zimbabwe Community Trust set up as part of the compliance measures, Chief Executive David Brown said Implats planned a new expansion programme at Zimplats from 2014, which would raise output to 360,000 ounces a year.Zimbabwe’s President Robert Mugabe told the meeting west of Harare that Zimplats had nothing to fear about its investments and it should build a refinery.”Mr Brown, go and tell your shareholders that we don’t intend to take over (Zimplats). We don’t want to steal or rob that which does not belong to us, but we don’t want to be robbed as well,” Mugabe said to Brown.Analysts said the law is more aimed at filling the coffers of Mugabe and his ZANU-PF party ahead of elections that could come as early as next year than it is at lifting incomes in one of the world’s poorest countries.”Nonetheless, wholesale asset grabs remain improbable and the chaotic process will be slowed by infighting within government,” said Anne Fruhauf, an Africa expert with the political risk consultancy Eurasia Group.Mining firms risk losing their claims if they do not play along. Many are waiting for a future government more amenable to international investment before they ramp up production, analysts have said.Brown offered Zimplats’ technical assistance to help state firm Zimbabwe Mining Development Corporation mine a claim valued at $153 million which he said had not been utilised since being released to the government.”In 2006, Zimplats released ground with 36 million ounces worth of resource. We note, however, that there’s no production on those claims, ” Brown said.Zimbabwe has pushed hard in the last few months to have foreign firms, mostly mining firms and banks, to abide by a law to turn over a majority stake of their holdings to locals.Prime Minister Morgan Tsvangirai’s Movement for Democratic Change, forced into a unity government with ZANU-PF after a disputed 2008 election marred by violence, said the law has undermined investor confidence and could strangle a fragile recovery in an economy crushed by hyperinflation under ZANU-PF management.

GLOBAL MARKETS-Asia shares rise on progress in euro zone rescue

* Eyes on China dataBy Chikako MogiTOKYO, Oct 13 (Reuters) - Asian shares rose on Thursday on growing hopes that Europe is taking concrete steps to contain the region’s debt woes and head off a systemic banking crisis.Strengthening investor confidence in the euro zone underpinned the single currency, while receding concerns about the banks’ problems threatening the wider financial system sharply tightened Asian credit markets.MSCI’s broadest index of Asia Pacific shares outside Japan rose 0.6 percent, following a 1.4 percent gain in the MSCI world equity index , which posted an increase for the sixth session in a row on Wednesday.The Nikkei average opened up 1.07 percent on Thursday. On Wall Street, the benchmark S&P 500 stock index compiled a gain of 9.8 percent over the past seven sessions, its steepest advance since mid-March 2009.The euro stayed bid early in Asia on Thursday, having jumped to a near one-month high on the dollar as Europe took a step closer to shoring up its financial rescue fund.Lawmakers in Slovakia struck a deal on Wednesday to ratify a plan to bolster the euro zone’s rescue fund by Friday, effectively ending a crisis that had threatened the currency’s main safety net. Slovakia is the only country in the 17-nation bloc left to approve the revamp of the fund.Adding to the sense of urgency, the President of the European Commission, Jose Manuel Barroso, said Europe needed to take decisive action on Greece and outlined a broad plan to contain the debt crisis.As European officials step up efforts to provide a more specific roadmap to resolve its debt woes and recover investor confidence, the European Union is expected to announce a bank recapitalization plan designed to cushion the impact any default by Greece could have on the region’s banks.Germany and France, the leading powers in the bloc, have promised to propose a comprehensive strategy to fight the debt crisis at an EU summit on Oct. 23.In credit markets, which had been feeling the strain of waning confidence in the financial system in recent months, the iTraxx Asia ex-Japan investment grade index narrowed by about 15 points.Oil prices fell on Thursday, with Brent crude futures down 0.1 percent at $111.21 a barrel after rising the day before for an 11.6 percent gain over six sessions. U.S. crude futures fell 0.85 percent to $84.84 a barrel, after snapping a five-session streak of higher closes on Wednesday.Asian markets are focused on China’s trade data due at around 0100 GMT to gauge the strength of the world’s second-largest economy.A stronger-than-expected reading would boost investor confidence about a soft landing for the Chinese economy, while a weaker outcome would add to worries about global growth.

Seoul shares gain for fifth straight session

SEOUL Oct 12 (Reuters) - Seoul shares reversed earlier falls to end up on Wednesday, posting a fifth consecutive session of gains supported by solid rises in automakers and brokerages including Hyundai Motor and Woori Investment & Securities .Despite Slovakia blocking a European bailout fund, the market largely viewed that as a minor setback, with analysts saying that overall rescue efforts in the troubled euro zone were not likely to be thwarted.”Policy expectation is still brewing and I do not think anyone seriously believes that rescue actions would be stalled because of Slovakia,” said Park Suk-hyun, a market analyst at KTB Securities.The parliament of tiny Slovakia rejected the expansion of a bailout fund to rescue the euro zone from its debt crisis on Tuesday, but international lenders said they were likely to grant a loan to Greece next month, buying time for a broader response.Foreign investors were buyers of a net 10.4 billion Korean won ($8.9 million) worth of stocks. Institutions purchased a net 218.2 billion won worth, buying for a fifth consecutive session.The Korea Composite Stock Price Index (KOSPI) ended up 0.81 percent at 1,809.50 points.Automakers and auto parts manufacturers outperformed amid expectations for the approval of a free trade agreement with the United States.A U.S. Senate panel on Tuesday backed long-delayed trade pacts with South Korea, Colombia and Panama, paving the way for final approval.Hyundai Motor added 1.47 percent and Hyundai Mobis rallied 4.33 percent.Substantial gains in brokerages gave the market further support.Shares in Woori Investment & Securities ended up 5.91 percent and Samsung Securities rose 4.14 percent.Shares in SK Securities jumped 4.42 percent after the Korea Exchange asked the brokerage to clarify rumours top shareholder SK Networks was looking to sell its 22.7 percent stake in the firm.”Shares reacted positively over an expectation of a potential sales premium,” said Chung Bo-seung, an analyst at Hanwha Securities.An SK Securities spokesman contacted by Reuters dismissed the talk as “groundless.”Shares in talent agency SM Entertainment Co Ltd spiked 9.72 percent on local media reports that its star group Girls Generation planned to debut in the United States.SM Entertainment could not be reached for a confirmation.Shares in firms with interests in North Korea were buoyed after South Korea said on Tuesday it would allow 120 firms to restart building a joint industrial park in the North.Apparel manufacturer Shinwon Corp , which has production units in North Korea, climbed 1.27 percent.But retailers came under pressure after discouraging job data. South Korea created the smallest number of jobs in a year in September, nudging the unemployment rate higher off a three-year low and adding to signs of a slowdown in Asia’s fourth-largest economy.Shares in Lotte Shopping Co Ltd , the country’s top retailer in terms of market value, declined 2.16 percent.Elsewhere, airlines and tour issues were hurt as the local won currency turned weak.A weaker won dampens demand for overseas tours and makes the cost of importing jet fuel more costly.Shares in Korean Air Line fell 1.77 percent and Hana Tour finished flat.The KOSPI 200 spot index gained 0.79 percent to 236.66 points and the junior Kosdaq market rose 1.87 percent to 467.65 points.Move on day +0.81 percent12-month high 2,231.47 27 April 201112-month low 1,644.11 26 September 2011Change on yr -11.77 percentAll-time high 2,231.47 27 April 2011All-time low 93.10 6 January 1981 ($1 = 1164.550 Korean Won)

Honda’s Thai production underwater as floods hit Japan firms

Among Japan’s big three automakers, Honda risks losing the most from the floods. Toyota Motor Corp has been forced to curtail production because of disruption to its supply of parts rather than any physical damage, while Nissan said it may experience some disruption.”Cars at the facility (in Ayutthaya, central Thailand) appear to be floating,” Honda spokesman Tomohiro Okada said.As no one is allowed into the area, Honda is still unable to assess the damage to production machinery or give any estimate of when output, halted since Oct. 4, can restart, he added.”We think resuming production will take some time,” Nomura analyst Masataka Kunugimoto wrote in a report.If it takes three months, that would mean lost production of 60,000 vehicles and could shave 25 billion yen ($325 million) off operating profit, he estimated. For the year to March 31, Honda expects operating profit of 270 billion yen.As Honda’s Thai plant supplies parts to other factories in the region, the damage may infect its supply chain and hurt output in other locations unless it can rustle up parts from elsewhere.”Capacity utilization in Japan is already high to meet post-earthquake recovery demand, so Honda’s Japanese plants may not be able to supply sufficient volumes,” Kunugimoto said in his report.Toyota on Wednesday said it would close its three Thai plants, which account for around 8 percent of its global production, until at least Oct. 15 because of a dearth of parts.Nissan officials were unavailable for comment.Other Japanese firms affected by the floods include Nikon Corp , which was forced to halt production of cameras in Thailand.Shares of Honda fell 2.2 percent, compared with a 0.4 percent decline in the benchmark Nikkei average. Toyota fell 1.1 percent, Nissan dropped 1.8 percent and Nikon lost 4.5 percent.

UPDATE 2-Transatlantic says in talks with fourth suitor

Oct 11 (Reuters) - Bermuda-based reinsurer Transatlantic Holdings Inc , which has been at the center of a months-long buyout battle, said it entered talks and signed a confidentiality agreement with a fourth, unnamed, suitor.Transatlantic is already in discussions with Validus Holdings Ltd , Berkshire Hathaway unit National Indemnity Co and an additional undisclosed party.Last month, Reuters reported that a former Berkshire insurance executive, Joseph Brandon, was working with Morgan Stanley on a possible bid for Transatlantic and was the undisclosed party in question.Transatlantic had a merger agreement with its peer Allied World, which was struck in June, but both sides called off the deal in September amid overwhelming opposition.Validus, which has been interested in Transatlantic for years, launched a hostile bid in July but agreed to a limited standstill while in talks with the company.Transatlantic shares rose 0.7 percent to $50.44 in early trading, their highest level in nearly six weeks.