IMF team to arrive in Egypt on Wednesday for loan talks

CAIRO, March 31 | Sun Mar 31, 2013 5:51am EDT

CAIRO, March 31 (Reuters) - An International Monetary Fund delegation will arrive in Egypt on Wednesday for talks with the government on a $4.8 billion loan, Egypt's government spokesman Alaa El Hadidi said on Sunday.

More than two years of political upheaval have battered the Egyptian economy, leaving it in dire need of IMF funding to relieve a currency and budget crisis.

President Mohamed Mursi's government initialled a deal with the IMF last November but postponed final ratification in December in the face of unrest triggered by a political row over the extent of his powers.

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UPDATE 1-IMF team to arrive in Egypt on Wednesday for loan talks

Sun Mar 31, 2013 6:32am EDT

CAIRO, March 31 (Reuters) - An International Monetary Fund delegation will arrive in Egypt on Wednesday for talks with the government on a $4.8 billion loan, Egypt's government spokesman Alaa El Hadidi said on Sunday.

More than two years of political upheaval have battered the Egyptian economy, leaving it in dire need of IMF funding to relieve a currency and budget crisis. The country's reserves of foreign currency have fallen to critically low levels, threatening its ability to import essential supplies of fuel and wheat.

President Mohamed Mursi's government initialled a deal with the IMF last November but postponed final ratification in December in the face of unrest triggered by a political row over the extent of his powers.

Hadidi, talking to reporters, gave no details on the new round of talks with the IMF. The IMF said last week a technical delegation would visit Cairo in the "first days of April".

Masood Ahmed, director of the IMF's Middle East and Central Asia department, visited Cairo on March 17, saying the Fund would continue talks aimed at agreeing possible financial aid.

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ECB's Draghi phoned Napolitano over resignation reports - press

ROME, March 31 | Sun Mar 31, 2013 6:46am EDT

ROME, March 31 (Reuters) - European Central Bank President Mario Draghi phoned Italian President Giorgio Napolitano after media reports that the 87-year-old head of state was planning to resign early to clear the way for new elections, newspapers reported on Sunday.

Napolitano pledged on Saturday that he would stay in office until the end of his term on May 15 following reports that he planned to step down to break the deadlock created by last month's election, which left no party able to form a government.

The move would be needed to allow Italy to return to the polls before the summer holiday period, because of constitutional provisions which prevent a president from dissolving parliament in the final months of his mandate.

The main newspapers on Sunday all reported that Draghi had called Napolitano to express concern that his resignation would leave Italy without leadership at a time of mounting tension in financial markets, exacerbated by the bank crisis in Cyprus.

An ECB spokesman declined to comment. No comment was immediately available from Napolitano's office.

Helped by the ECB's pledge to backstop countries by buying their bonds if necessary, financial markets have not shown the levels of panic seen during the crisis which brought down Silvio Berlusconi's last government in 2011.

However a poorly received auction of mid and long-term debt last week underlined the danger of a renewed bout of turmoil that could destabilize Italy's 2-trillion-euro public debt if the impasse continues.

Rumours have been circulating for days that Moody's is preparing to cut its rating on Italy's sovereign debt, which is already only two notches above "junk" grade, partly due to the uncertain political outlook.

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Italy president could resign to allow new election-source

ROME, March 30 | Sat Mar 30, 2013 4:27am EDT

ROME, March 30 (Reuters) - Italian President Giorgio Napolitano is considering resigning immediately to allow new elections after attempts to form a government failed this week, a person close to the situation said on Saturday.

"The idea is on the table along with many others," said the person, who declined to be named because of the sensitivity of the issue, adding that the president would probably make a statement on the next steps later in the day.

All of Italy's main newspapers reported that Napolitano, whose term ends on May 15, was considering going early to get around constitutional provisions which prevent a president dissolving parliament in the final months of his mandate.

The 87-year-old head of state met leaders of the main parties on Friday to try to find a way out of a stalemate since an election in February, which raised fears of extended political instability in the euro zone's third-largest economy.

However with all of the three main groups in parliament clinging to entrenched positions that have prevented a majority being formed, hopes of a solution that would avoid early elections have faded.

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Schaeuble says euro zone savings deposits are safe

By Erik Kirschbaum

BERLIN, March 30 | Sat Mar 30, 2013 5:21am EDT

BERLIN, March 30 (Reuters) - German Finance Minister Wolfgang Schaeuble has said savings accounts in the euro zone are safe, adding that Cyprus is a "special case" and not a template for future rescues.

In an interview with Bild newspaper published on Saturday, Schaeuble distanced himself from comments on Monday by Eurogroup chairman Jeroen Dijsselbloem, who said the rescue programme agreed for Cyprus - the first to impose a levy on bank deposits - would serve as a model for future crises.

"Cyprus is and will remain a special one-off case," Schaeuble said.

"The savings accounts in Europe are safe."

Schaeuble said the problem in Cyprus was that two large banks in Cyprus were in effect no longer solvent and the Cyprus government did not have enough money to guarantee savings.

"That's why the other euro zone countries had to help," he said. "Together in the Eurogroup we decided to have the owners and creditors take part in the costs of the rescue - in other words those who helped cause the crisis."

Schaeuble said he was confident Cyprus would be able to completely pay back the help. "Cyprus's economy will now go through a long and painful period of adjustment. But then it will pay back the loan when it is on a solid economic foundation."

Schaeuble said the euro was stronger today than at any time since 2010.

"Yes, you could see that during the Cyprus crisis," he said. "The entire turbulence did not have any impact on the other countries in Southern Europe."

He said it was different in early 2012, when elections in Greece caused interest rates across Southern Europe to rise.

"The financial markets have seen: we are better prepared now. We've accomplished quite a bit," Schaeuble said.

He said he was against thinking about individual countries leaving the euro zone. "What is more important is that we are strong enough to keep everyone in the boat," he said.

"I believe that we will one day read in the history books about this period that the crisis brought Europe even closer together," he said, adding the continent was currently enjoying "a very fortunate era".

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UPDATE 1-Italy president could resign to break deadlock

Sat Mar 30, 2013 5:44am EDT

* Early resignation among ideas on the table

* Move could open the way to elections within weeks

* Move comes after talks to form government fail

By Giselda Vagnoni

ROME, March 30 (Reuters) - Italian President Giorgio Napolitano is considering resigning immediately to make way for new parliamentary elections after attempts to form a government failed this week, a person close to the situation said on Saturday.

"The idea is on the table along with many others," said the person, who declined to be named because of the sensitivity of the issue, adding that the president would probably make a statement later in the day.

All of Italy's main newspapers reported that Napolitano, whose term ends on May 15, was considering stepping down to get around constitutional provisions which prevent a president dissolving parliament in the final months of his mandate.

The 87-year-old head of state met leaders of the main parties on Friday to try to find a way out of the stalemate left by an inconclusive election in February, which raised fears of prolonged uncertainty in the euro zone's third-largest economy.

However with all of the three main groups in parliament clinging to entrenched positions that have prevented a government-forming majority being formed, hopes of a solution that would avoid early elections have faded.

The apparently coordinated leak of Napolitano's thinking to the main daily newspapers may have been a move by the president to increase pressure on the intransigent parties to secure a deal, but their differences remain very wide.

Centre-left leader Pier Luigi Bersani, whose party controls the lower house but does not have a majority in the Senate, failed to win enough support to form a government from any of the other parties during a round of talks this week.

He rejected demands by centre-right leader Silvio Berlusconi for a cross-party coalition deal that would give the scandal-plagued former prime minister a share in power and the right to decide Napolitano's successor.

Both Berlusconi's group and the populist 5-Star Movement led by ex-comic Beppe Grillo have also ruled out supporting a new technocrat government like the one led by outgoing Prime Minister Mario Monti, blocking what appears to be the only other option.

ELECTIONS WITHIN MONTHS

If Napolitano did resign, a new president would have to be elected by a joint sitting of parliament along with representatives from the regions, with a fierce and probably extended battle likely between the three rival blocs on that as well.

If a successor were to dissolve parliament, new elections would be held between 45 and 70 days later, leaving weeks of uncertainty just as the Cyprus banking crisis has renewed fears of instability in the euro zone.

With investors mindful of the 2011 debt crisis that brought down Berlusconi's last government, the gridlock has fed worries about Italy's ability to confront a prolonged economic crisis that has fuelled growing disillusion with the political class.

The country has been in deep recession for more than a year, with record unemployment, especially among the young and a 2-trillion-euro ($2.6-trillion) public debt that is dangerously exposed to swings on international bond markets.

Rumours have been circulating for days that ratings agency Moody's is preparing to cut its rating on Italy's sovereign debt, which is already only two notches above "junk" grade, partly due to the uncertain political outlook.

With bond markets closed for the Easter break, investors have been left on the sidelines but a poorly received auction of mid and long term debt last week underlined the danger if the crisis drags on.

Opinion polls issued in the past few days have suggested that Berlusconi could continue the strong surge that enabled him to close a substantial gap with the centre-left in the final days of the election campaign in February.

A poll by the SWG company on Friday showed his centre-right alliance with the Northern League in first place with 32.5 percent of the vote, ahead of the centre-left on 29.6 percent and Grillo's 5-Star Movement on 24.8 percent.

The polls could encourage Berlusconi to gamble on a quick new election, although unless a deeply flawed electoral law is repealed before the vote, it could produce another damaging stalemate.

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UPDATE 1-Cyprus has no intention of leaving euro - president

Fri Mar 29, 2013 4:27am EDT

NICOSIA, March 29 (Reuters) - Cyprus has no intention of leaving the European single currency, the island's president said on Friday, assuring Cypriots the situation was "contained" in the wake of a tough bailout deal with the European Union.

Conservative leader Nicos Anastasiades spoke a day after banks reopened their doors following an almost two-week shutdown to prevent a run on deposits by panicked Cypriots and wealthy foreign depositors as the east Mediterranean island flirted with bankruptcy.

"We have no intention of leaving the euro," Anastasiades told a conference of civil servants in the capital, Nicosia.

Anastasiades, barely a month in the post, criticised Cyprus's partners in the 17-nation currency bloc, accusing them of making "unprecedented demands that forced Cyprus to become an experiment."

For the first time in Europe's handling of its debt crisis, bank depositors have been forced to bear some of the cost of a rescue plan intended to keep the country solvent and in the euro zone.

"We have averted the risk of bankruptcy," Anastasiades said. "The situation, despite the tragedy of it all, is contained."

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Italy's president seeks way out of political deadlock

Fri Mar 29, 2013 4:56am EDT

* Napolitano meets parties for consultations on Friday

* Centre-left bid to form government blocked

* Speculation grows that government could be led by outsider

By James Mackenzie

ROME, March 29 (Reuters) - Italian President Giorgio Napolitano meets political leaders on Friday in a bid to break a month-old stalemate after an election left no party able to form a government.

Centre-left leader Pier Luigi Bersani, who won the biggest share of the vote in the February 25 vote but fell short of a majority, told Napolitano on Thursday he had failed to secure enough support from rival parties to form a government.

The 87-year-old Napolitano, whose own term ends in mid-May, said he would personally meet representatives from the main parties to assess what options remain to prevent an early return to the polls.

The deadlock in Italy, the euro zone's third largest economy, comes as the Cyprus banking crisis has revived fears of renewed financial market turmoil that could threaten the stability of the currency bloc.

After five days of talks, Bersani failed to secure a deal with either Berlusconi's centre-right bloc, the second-largest force in parliament, or ex-comic Beppe Grillo's 5-Star Movement, which holds the balance of power.

The centre-left leader rejected Berlusconi's demand that he be allowed to decide Napolitano's successor as head of state, and Grillo's populist group maintained its refusal to support a government led by any of the big parties it blames for Italy's social and economic crisis.

Napolitano's options now include appointing a figure from outside politics to lead a technocrat government like that of outgoing Prime Minister Mario Monti or a cross-party alliance backed by the big parties.

Among possible candidates are Fabrizio Saccomanni, the widely respected director general of the Bank of Italy, the head of the constitutional court Franco Gallo or former prime minister Giuliano Amato.

Napolitano meets representatives from former prime minister Silvio Berlusconi's People of Freedom (PDL) party at 1000 GMT, before seeing the anti-establishment 5-Star Movement and finally Bersani's Democratic Party (PD) in the evening.

CRISIS

The political gridlock has fed growing worries about Italy's ability to confront a prolonged economic crisis that has left it in deep recession for more than a year, with a 2-trillion-euro public debt and record unemployment, especially among the young.

Rumours have been circulating for days that ratings agency Moody's is preparing to cut its rating on Italy's sovereign debt, which is already only two notches above "junk" grade, partly due to the uncertain political outlook.

The immediate pressure from the bond markets has been taken off during the Easter break but failure to make progress in securing an agreement could lead to new turbulence next week after a steady rise in Italy's borrowing costs in recent days.

However the prospects appear slim of appointing the kind of government capable of turning around an economy that has been in decline for more than a decade, with deep-rooted problems ranging from corruption to suffocating bureaucracy.

Napolitano has made clear that he does not want Italy to go back to new elections immediately, not least because the widely criticised election law is likely to lead to a similar inconclusive result.

However even a so-called "president's government" led by a political outsider, would need the backing of parliament, which may be difficult to secure given the deep divisions which remain between the parties.

Many are turning their thoughts towards new elections, with Berlusconi's centre-right bloc confident that the momentum created by the 76-year-old billionaire's surge in the final weeks of the last election campaign will continue.

"We're not afraid of going back to vote," Daniela Santanche, one of Berlusconi's most faithful allies told the daily La Repubblica. "The opinion polls are telling us that we'd win and the PD would lose 150 deputies," she said.

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UPDATE 2-Cyprus has no intention of leaving euro - president

Fri Mar 29, 2013 5:38am EDT

* Cypriot leader says risk of bankruptcy contained

* Hits out at Cypriot, European banking authorities

* Says capital controls to be gradually lifted, no time frame

By Michele Kambas

NICOSIA, March 29 (Reuters) - Cyprus has "contained" the risk of bankruptcy in the wake of a tough rescue package with the European Union and has no intention of leaving Europe's single currency, the island's president said on Friday.

Conservative leader Nicos Anastasiades assured Cypriots and wealthy foreign depositors that restrictions on bank transactions, imposed this week, would gradually be lifted, but gave no time frame.

He hit out at banking authorities in Cyprus and Europe for pouring money into a crippled Cypriot bank that now faces closure under the terms of a 10 billion euro ($13 billion) bailout plan that averted the immediate risk of financial meltdown.

"How serious were those authorities that permitted the financing of a bankrupt bank to the highest possible amount?" Anastasiades said during a speech to civil servants in the capital, Nicosia.

"I don't want to say more," he added. "Now is not the time to say who bears more or less of the blame."

Anastasiades clinched the last-ditch bailout in Brussels five days ago, but has faced a backlash from Cypriots angry at the price that came with it - the winding down of the island's second-largest bank, Cyprus Popular Bank or Laiki, and a raid on deposits over 100,000 euros that could spell the end of Cyprus as a hub for offshore finance.

The country faces steep job losses and a prolonged and deep recession.

"EXPERIMENT"

The president, barely a month in the job and wrestling with Cyprus's worst crisis since a 1974 war split the island in two, accused the 17-nation euro currency bloc of making "unprecedented demands that forced Cyprus to become an experiment".

But he added: "We have no intention of leaving the euro. In no way will we experiment with the future of our country."

He said the immediate danger of national bankruptcy had been averted, and that, "The situation, despite the tragedy of it all, is contained."

Warnings of a stampede at banks when they reopened on Thursday proved unfounded.

For almost two weeks, Cypriots were on a ration of limited withdrawals from bank cash machines. Even with banks now open, they face a regime of strict restrictions designed to halt a flight of capital from the island.

The move is unprecedented since euro coins and banknotes came into circulation in 2002, and flies in the face of the bloc's founding principle of the free movement of money and goods.

Cyprus's difficulties have sent jitters around the fragile single European currency zone.

The imposition of capital controls has led economists to warn that a second-class "Cyprus euro" could emerge, with funds trapped on the island worth less than euros that can be freely spent abroad.

"The temporary restrictive measures adopted concerning economic transactions will be gradually eased until we can return to normal," Anastasiades said.

Under a government decree, the capital controls are intended to last for seven days.

Foreign Minister Ioannis Kasoulides said on Thursday they could last "about a month", but economists warn it could be years before confidence in the Cypriot economy bounces back enough to lift the restrictions.

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Cyprus banks reopen, under tight controls

NICOSIA, March 28 | Thu Mar 28, 2013 6:01am EDT

NICOSIA, March 28 (Reuters) - Banks in Cyprus opened their doors on Thursday for the first time in almost two weeks, with tight controls on transactions to prevent a run on deposits after the island was forced to accept a stringent EU rescue package to avert bankruptcy.

In central Nicosia, queues of at least a dozen people had formed outside branches of the country's two biggest lenders, Bank of Cyprus and Cyprus Popular Bank, also known as Laiki.

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Italy economy minister knows nothing about possible rating cut

ROME, March 28 | Thu Mar 28, 2013 6:22am EDT

ROME, March 28 (Reuters) - Italian Economy Minister Vittorio Grilli said on Thursday he had no knowledge of any imminent decision by Moody's to cut Italy's sovereign debt rating.

Fitch cut Italy's rating this month and market rumours have been swirling for days that fellow agency Moody's, which has a negative outlook on Italy, is poised to follow suit.

"I have no news about that," Grilli told reporters in parliament.

Moody's rates Italy Baa2, two notches above "junk" grade.

Grilli said he hoped that moves by the government to start to pay back state sector debts to private firms would improve judgments on Italy even though they will increase the budget deficit and debt.

Bart Oosterveld, managing director of sovereign risk at Moody's, told Reuters on Wednesday that the outcome of Italy's attempts to form a government following last month's inconclusive election would have implications for its credit profile.

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Junior partner of Italy's Bersani rejects deal with Berlusconi

ROME, March 28 | Thu Mar 28, 2013 6:34am EDT

ROME, March 28 (Reuters) - The junior partner in Italy's centre-left alliance will not join a government that includes former prime minister Silvio Berlusconi or his People of Freedom (PDL) party, an official said on Thursday after talks between parties following a deadlocked election.

"No matter what, we will be against any form of government that contains in its majority the PDL or Berlusconi," Gennaro Migliore, the lower house leader of the Left Freedom Ecology (SEL) party told a reporters.

SEL is the junior partner of the centre-left alliance led by Pier Luigi Bersani, who is due to report whether he has enough support to form a government this week. Bersani has so far resisted an agreement with his traditional centre-right rivals, and has been rejected by newcomers, the 5-Star Movement.

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Italy's 5-yr debt costs rise to highest since Oct 2012

MILAN, March 27 | Wed Mar 27, 2013 6:26am EDT

MILAN, March 27 (Reuters) - Italy had to pay its highest yield since October 2012 to sell a new five-year bond at an auction on Wednesday as worries over the country's political stalemate weighed on investors' sentiment.

The treasury sold 3.91 billion euros of the new bond maturing June 2018 at a rate of 3.65 percent, up from 3.59 percent it paid on similar paper at a sale on Feb. 27, two days after Italy's inconclusive national election.

Rome also sold 3 billion euros of 10-year bonds with a yield of 4.66 percent, at the lowest level since January 2013, down from 4.83 percent at an end-February sale.

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UPDATE 1-Weak industry, exports push UK towards another recession

Wed Mar 27, 2013 6:34am EDT

By Olesya Dmitracova and Kate Holton

LONDON, March 27 (Reuters) - Sharp falls in industrial production and exports shrank Britain's overall output at the end of 2012, data confirmed on Wednesday, pushing the economy to the brink of a "triple-dip" recession.

The Office for National Statistics said that gross domestic product dropped 0.3 percent on the quarter in the October-December period. Compared with a year earlier, GDP grew 0.2 percent, slightly less than estimated earlier.

Separate fourth-quarter current account data showed that Britain's deficit with the rest of the world stood at 14.037 billion pounds ($21.3 billion), overshooting forecasts.

The already weak pound fell further after the releases.

"The current account figures show us that we're still terrible at exporting," said Alan Clarke, economist at Scotiabank. "I think the message is that while the UK's overseas export markets are in recession, a weaker pound isn't going to help much."

The economic contraction compared with the previous quarter was spurred by a 2.1 percent decline in industrial production - the biggest fall since the first quarter of 2009 - and a 2 percent slump in exports.

Wednesday's GDP figures showed that Britons' disposable income shrank 0.1 percent in real terms in the fourth quarter, but household spending help up, rising 0.4 percent. The household savings ratio fell to 6.7 percent.

If the economy shrinks again in 2013's first quarter, Britain will slip into its third recession since entering one in 2008, fuelled by the financial crisis.

News on the first quarter of 2013 has been mixed, with a sharp fall in manufacturing output in January but strong survey data on the dominant service sector in February. Analysts warn that the current spell of cold weather and snow could be enough to tip the fragile economy into recession.

Its fortunes will become clearer when the ONS publishes its index of services data for January on Thursday.

The latest economic forecasts by the independent Office for Budget Responsibility, used by the government, showed last week that Britain will eke out meagre 0.6 percent growth this year - half that it predicted only a few months ago.

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WRAPUP 3-Cyprus readies capital controls to avert bank run

Wed Mar 27, 2013 6:37am EDT

* Cyprus preparing capital controls

* Minister says controls to last weeks

* Russia says healthy banks should not suffer

* Banks remain closed until Thursday

By Michele Kambas and Costas Pitas

NICOSIA, March 27 (Reuters) - Cyprus is finalising capital control measures on Wednesday to prevent a run on the banks by depositors anxious about their savings after the country agreed a painful rescue package with international lenders.

Cypriots have taken to the streets of Nicosia in their thousands to protest against a bailout deal they fear will push their country into an economic slump and cost many their jobs.

European leaders said the deal averted a chaotic national bankruptcy that might have forced Cyprus out of the euro.

With banks due to reopen on Thursday, Finance Minister Michael Sarris said he expected the control measures to be ready by noon (1000 GMT) on Wednesday: "I think they will be within the realms of reason," he said, without going into details.

"Banks will open on Thursday ... We will look at the best way to limit the possibility of large sums of money leaving, and not imposing punitive conditions on the economy, businesses and individuals," Sarris said in a Cyprus television interview.

The central bank governor said earlier that "loose" controls would apply temporarily to all banks. Earlier, the finance minister said they could be in place for weeks. Banks have been shut since final bailout talks got under way in mid-March.

Russia, whose citizens have billions of euros in Cypriot banks, cautioned Nicosia against imposing onerous controls on healthy banks.

"If there are such measures, this will not foster trust but only provoke additional problems for participants, depositors," Russian Finance Minister Anton Siluanov, in South Africa for a summit of the BRICS emerging powers group, told reporters late on Tuesday.

State-controlled Russian bank VTB has a subsidiary in Cyprus, Russian Commercial Bank, which has not been affected by the bailout deal.

Siluanov cautioned that Russian willingness to restructure and extend a 2.5 billion euro loan to Cyprus in 2011 would depend on the island's decision on capital controls.

"We will discuss (restructuring of the loan) in the context of the decisions the parliament adopts," he said. "We are prepared to discuss within these parameters."

POPULAR ANGER

The terms of the 10-billion euro ($13-billion) rescue with the European Union, International Monetary Fund and European Central Bank have stirred popular anger within Cyprus at the country's partners in the EU, notably Germany, the bloc's main paymaster and fiercest advocate of austerity.

On Tuesday, up to 3,000 high school students protested at parliament, in the first major expression of popular anger since the bailout was agreed in the early hours of Monday morning in Brussels. The deal largely side-stepped parliament, and has triggered opposition calls for a referendum.

"They've just got rid of all our dreams," said one student, named Thomas.

Outside the central bank, about 200 employees of the country's biggest commercial lender, the Bank of Cyprus , demanded the resignation of central bank governor Panicos Demetriades, chanting "Hands off Cyprus" and "Disgrace".

Dimos Dimosthenous, a veteran Bank of Cyprus employee, said: "The bank is being driven to closure. That will be the end."

A Bank of Cyprus official said its Chief Executive Yiannis Kypri had been fired by the central bank.

It follows the appointment of a special administrator to run the bank, which is being restructured as part of the bailout deal, and an offer to resign by its chairman, Andreas Artemis.

ACCOUNTS FROZEN

Under the terms of the bailout, the second largest lender, Cyprus Popular Bank, is to be shut down, and accounts of under 100,000 euros will be moved to the Bank of Cyprus. Bigger accounts at both banks will be frozen.

Government officials have estimated that these larger depositors, many of them wealthy foreigners including Russians, could lose around 40 percent of their cash.

On Wednesday, the government was appointing special crisis teams of economic experts to advise ministers.

Many Cypriots say they do not feel reassured by the bailout deal, however, and are expected to besiege banks as soon as they reopen after a shutdown that began over a week ago.

The long closure of the banks has hurt business, according to Andreas Hadjiadamou, president of the Cyprus Supermarkets Association, who said consumer confidence had "hit the floor".

Maria Benaki, who runs a family silverware business on Nicosia's biggest shopping street, said she had not had a customer in days.

"The situation is dire," she said. "What will happen at the end of the month when I need to pay my bills?"

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ECB's Nowotny says Cyprus is a special case

PRAGUE, March 26 | Tue Mar 26, 2013 6:23am EDT

PRAGUE, March 26 (Reuters) - The banking crisis in Cyprus is a special case and the rescue plan used is not a model for other countries, European Central Bank Governing Council member Ewald Nowotny said on Tuesday.

Early on Monday, Cyprus managed to clinch a deal with international lenders to shut down its second-largest bank and inflict heavy losses on uninsured depositors in return for a 10 billion euro ($13 billion) bailout.

Nowotny echoed earlier comments from ECB Executive Board member Benoit Coeure, who disagreed with Eurogroup head Jeroen Dijsselbloem's assertion that the Cyprus bailout would serve as a model for crises elsewhere. The Dutchman later backtracked on his comments after markets read them as meaning private sector bail-ins would play a greater role in future rescues.

"Cyprus is a special case," Nowotny, who is also the head of Austria's central bank, told reporters at a conference in Prague. "It is no model for other instances."

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EU antitrust regulators expand CDS probe to ISDA

BRUSSELS, March 26 | Tue Mar 26, 2013 6:49am EDT

BRUSSELS, March 26 (Reuters) - EU antitrust regulators expanded their nearly two-year long investigation into the credit default swaps market on Tuesday to include industry body International Swaps and Derivatives Association (ISDA).

"The (European) Commission's inquiry found preliminary indications that ISDA may have been involved in a coordinated effort of investment banks to delay or prevent exchanges from entering the credit derivatives business," the EU executive said in a statement.

The Commission, which acts as EU competition watchdog, opened its investigation in April 2011.

The banks it listed at the time as part of the investigation included JP Morgan, Bank of America, Goldman Sachs, Deutsche Bank, Citigroup and 11 other banks, as well as financial data company Markit.

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UPDATE 1-Bank of Spain sees economy shrink further this year

Tue Mar 26, 2013 6:58am EDT

By Paul Day

MADRID, March 26 (Reuters) - Spain's economy will sink deeper into recession this year, the Bank of Spain said on Tuesday, sending a stark message to the government as it prepares to revise its own growth forecast.

In its annual update of economic forecasts, the central bank said it saw Spain's economy shrinking by 1.5 percent in 2013 following a 1.4 percent contraction last year as austerity continues to exacerbate the effects of a burst property bubble.

The central bank's new estimate is well below the official forecast of 0.5 percent of GDP, although the government is widely expected to revise that figure downwards in April.

The Bank of Spain prediction is broadly in line with consensus, with most economists expecting the economy to struggle to return to growth this year on the back of dire domestic demand and a weakening external sector.

Spain sank into its second recession since 2009 at the end of 2011 as the fallout from a property bust five years ago continued to weigh on every aspect of economic activity, from its beleaguered banks to high street sales.

The Bank of Spain data suggested the quarterly contraction in the first three months of this year had been less pronounced than in the last quarter of 2012 when the gross domestic product shrank at the fastest rate since the beginning of 2009.

It said the Spanish economy would exit the recession and register a 0.6 percent growth in 2014.

Spain's Economy Minister Luis de Guindos said in an interview on Sunday he expected the economy to return to quarterly growth by the end of 2013 and expand almost 1 percent next year.

But unemployment is likely to hit another record high of 27.1 percent in the course of the year, the bank said, up from a current 26 percent, one of the highest rates in the euro zone.

It also said the country's public deficit would reach 6 percent of gross domestic product for 2013, above targets set by Europe of 4.5 percent of GDP, and 5.9 percent of GDP next year.

Spain is in talks with the European Commission to soften its deficit-cutting path. It hopes to get one or two extra years, until 2016, to reduce its budget shortfall under the European ceiling of 3 percent of GDP.

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Cyprus bank closures have limited capital flight-Schaeuble

BERLIN, March 25 | Mon Mar 25, 2013 6:00am EDT

BERLIN, March 25 (Reuters) - There has been capital flight out of Cyprus but this has been limited in the past week thanks to the closure of banks in the Mediterranean island nation, German Finance Minister Wolfgang Schaeuble said on Monday.

Schaeuble, speaking at a news conference in Berlin, declined to provide figures on how much money had been pulled out of Cyprus in recent days or to say when banks would reopen, saying this was an issue for the European and Cypriot central banks to assess.

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Russian PM says "stealing continues" in Cyprus

MOSCOW, March 25 | Mon Mar 25, 2013 6:11am EDT

MOSCOW, March 25 (Reuters) - Russia reacted with anger on Monday to a European Union bailout of Cyprus that will result in heavy losses for foreign depositors at Cypriot banks.

"In my view, the stealing of what has already been stolen continues," Prime Minister Dmitry Medvedev was quoted by news agencies as telling a meeting of government officials.

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Italy's 2-yr borrowing costs rise to highest since Dec. 2012

MILAN, March 25 | Mon Mar 25, 2013 6:26am EDT

MILAN, March 25 (Reuters) - Italy had to pay a slightly higher yield at a 2-year-debt sale on Monday as investors asked for compensation in response to a domestic political outlook that still remains unclear one month after a parliamentary election.

A last-ditch agreement signed by Cyprus to save its euro zone membership, however, helped Italy sell 3.825 billion euros debt, just below its top planned 4 billion euros.

The treasury sold 2.825 billion euros of two-year zero-coupon bonds, with a yield of 1.75 percent, the highest level since December 2012.

Italy had paid a rate of 1.68 percent on the same bond at an auction on February 25 which took place just few hours before the result of an inconclusive domestic election. Bid-to-cover had been 1.65 at the end-of-February sale.

On Monday Italy offered also two inflation-linked BTPei bonds maturing September 2018 and September 2023 respectively.

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Cyprus bailout talks "at very delicate stage" - govt

NICOSIA, March 24 | Sat Mar 23, 2013 8:10pm EDT

NICOSIA, March 24 (Reuters) - Negotiations on an EU/IMF bailout for Cyprus are "at a very delicate stage" and will continue in Brussels on Sunday, the Cypriot government said, describing the situation as "very difficult".

In a statement, the government said President Nicos Anastasiades would travel to Brussels early on Sunday morning, with a Monday deadline looming to seal the bailout or see the island's stricken banks cut off from emergency funding.

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WRAPUP 2-Cyprus seeks 11th-hour deal to avert financial collapse

Sun Mar 24, 2013 3:22am EDT

* Talks break up without result, president due in Brussels

* Cyprus says situation "very difficult"

* Island nearing Monday deadline to seal EU bailout

* Faces banking collapse, possible euro zone exit

By Michele Kambas and Karolina Tagaris

NICOSIA, March 24 (Reuters) - Cypriot President Nicos Anastasiades was expected in Brussels on Sunday to seek an 11th-hour reprieve from financial meltdown, with a bailout from the European Union and the island's place in Europe's single currency bloc hanging in the balance.

Underlining the gravity of Cyprus' position, the EU's economic affairs chief said there were now "only hard choices left" for the latest casualty of the euro zone crisis.

Facing a Monday deadline to avert a collapse of the Cypriot banking system, talks in Nicosia to seal a bailout from the EU and International Monetary Fund broke up late on Saturday without result.

"Negotiations are at a very delicate phase," the Cypriot government said in a statement.

"The situation is very difficult and the deadlines are very tight," it said. Anastasiades was due to arrive in Brussels in mid-morning to continue the talks, it said.

The tone of the statement differed sharply from earlier expressions of cautious optimism during days of intense negotiations between Cypriot leaders and officials from the island's "troika" of international lenders, the EU, IMF and European Central Bank.

Cyprus' overgrown banking sector has been crippled by exposure to crisis-hit Greece, and the EU says the east Mediterranean island must raise 5.8 billion euros on its own before it can receive a 10 billion euro bailout.

Without a deal on Monday, the ECB says it will cut off emergency funds to Cypriot banks, spelling certain collapse and potentially pushing the country out of the euro zone.

Conservative leader Anastasiades, barely a month in the job and wrestling with Cyprus' worst crisis since a 1974 invasion by Turkish forces split the island in two, is expected to meet heads of the EU, the European Central Bank and IMF.

Finance Ministers of the 17-nation euro zone will meet at 1700 GMT Sunday.

Scrambling to find the funds, officials said Cyprus had conceded to a one-time levy on bank deposits over 100,000 euros, a dramatic U-turn from five days ago when lawmakers angrily threw out a similar proposal as "bank robbery."

A senior Cypriot official said Nicosia had agreed with its lenders on a 20 percent levy over and above 100,000 euros at the island's largest lender, Bank of Cyprus, and four percent on deposits above the same level at other banks.

'ONLY HARD CHOICES LEFT'

Finance Minister Michael Sarris spoke of "significant progress" in morning talks, as angry demonstrators outside the finance ministry chanted "resign, resign!"

The EU's Economic Affairs Commissioner, Olli Rehn, said progress was being made, but warned of tough times ahead.

"Unfortunately, the events of recent days have led to a situation where there are no longer any optimal solutions available," he said in a statement. "Today, there are only hard choices left."

In a stunning vote on Tuesday, Cyprus's 56-seat parliament rejected a levy on depositors, big and small, and Sarris spent three fruitless days in Moscow trying to win help from Russia, whose citizens have billions of euros at stake in Cypriot banks.

Rebuffed by the Kremlin, Sarris said the levy was back "on the table".

On Friday, lawmakers voted in late-night session to nationalise pension funds and split failing lenders into good and bad banks - a measure likely to be applied to No.2 lender Cyprus Popular Bank, also known as Laiki.

Cypriot media reports suggested talks were stuck on a demand by the IMF that Bank of Cyprus absorb the good assets of competitor Popular Bank and take on its nine billion euro debt to the central bank as well.

The reports said the Cypriot government was resisting.

A Cypriot plan to tap pension funds had already been shelved, a senior Cypriot official told Reuters, under opposition from Germany, which had warned the measure might be even more painful for ordinary Cypriots than a deposit levy.

It was also far from certain that a majority of lawmakers would back a revised levy, or whether the government might even try to bypass the assembly.

Ordinary Cypriots have been outraged by the levy and stunned at the pace of the unfolding drama. They elected Anastasiades in February on a mandate to secure a bailout and save banks whose capital was wiped out by investments in Greece, the epicentre of the euro zone debt crisis.

RUN ON BANKS

But for the past week they have been besieging cash machines ever since bank doors were closed on the orders of the government to avert a massive capital flight. Anticipating a run on banks when they reopen on Tuesday, parliament has given the government powers to impose capital controls.

On Saturday, some 1,500 protesters, many of them bank workers, marched on the presidency, holding banners that read, "No to the bankruptcy of Cyprus" and "Hands of workers' welfare funds".

The levy on bank deposits represents an unprecedented step in Europe's handling of a debt crisis that has spread from Greece, to Ireland, Portugal, Spain and Italy.

Cypriot leaders had initially tried to spread the pain between big holdings and smaller depositors, fearing the damage it would inflict on the country as an offshore financial haven for wealthy foreigners, many of them Russians and Britons.

The tottering banks hold 68 billion euros in deposits, including 38 billion in accounts of more than 100,000 euros - enormous sums for an island of 1.1 million people which could never sustain such a big financial system on its own.

"Cypriot banks have for years been taking the kinds of risks that are not allowed in France," Bank of France governor Christian Noyer told the French newspaper Le Journal du Dimanche. "Nobody wants Cyprus to leave the euro," he said. "The first people to suffer would be Cypriot citizens."

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Cyprus president faces "very difficult task" to save economy

NICOSIA, March 24 | Sun Mar 24, 2013 5:53am EDT

NICOSIA, March 24 (Reuters) - Cypriot President Nicos Anastasiades, due in Brussels on Sunday to seek an 11th-hour reprieve from financial meltdown, has a very difficult task ahead of him if he is to save the island's economy, a government spokesman said.

Anastasiades and his team, who are seeking a bailout from international lenders, have a "very difficult task to accomplish to save the Cypriot economy and avert a disorderly default if there is no final agreement on a loan accord," the spokesman said.

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U.S. Senate narrowly passes first budget in four years

WASHINGTON, March 23 | Sat Mar 23, 2013 5:16am EDT

WASHINGTON, March 23 (Reuters) - The U.S. Senate on Saturday narrowly passed its first federal budget in four years, a move that will usher in a relative lull in Washington's fiscal wars until an anticipated summer showdown over raising the debt ceiling.

The Senate budget plan passed on a 50-49 vote in the Democratic-controlled chamber. Four Democratic senators facing re-election in 2014 joined all Senate Republicans in opposing the measure, which seeks to raise nearly $1 trillion in new tax revenues by closing some tax breaks for the wealthy.

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WRAPUP 2-Cyprus bailout bid goes down to the wire

Sat Mar 23, 2013 5:32am EDT

* Euro zone finance ministers schedule Sunday meeting

* Cypriot parliament to debate bank levy after Brussels talks

* Russia rebuffs Cypriot entreaties for aid

* Cyprus eyes levy on bank deposits over 100,000 euros

By Michele Kambas and Karolina Tagaris

NICOSIA, March 23 (Reuters) - Cyprus's bid to avert financial collapse will go down to the wire after the island said it would hold a crucial sitting of parliament only after finance ministers of the 17-nation euro zone meet on Sunday.

Cyprus faces a Monday deadline to clinch a 10 billion euro ($13 billion) bailout from the European Union or the European Central Bank sauys it will cut off emergency funding to the country's stricken banks, spelling certain collapse and potentially pushing the island out of Europe's single currency.

Lawmakers are expected to debate a possible levy on big depositors in Cypriot banks to help secure the 5.8 billion euros demanded by the European Union before it gives the nod to the bailout.

But with euro zone finance ministers due to meet on Sunday afternoon, a senior lawmaker in Nicosia told Reuters the island's tiny legislature would wait until after the Brussels meeting to hold its debate.

"We will meet after the Eurogroup meeting," the lawmaker, speaking on condition of anonymity, told Reuters. "I don't know when."

A government official, who also declined to be named, said Cypriot officials were to hold talks with representatives from the so-called 'troika' of lenders - the EU, ECB and International Monetary Fund - on Saturday morning.

The official said President Nicos Anastasiades, barely a month in office and wrestling with Cyprus's worst crisis since an invasion by Turkish forces in 1974 split the country in two, may head to Brussels on Saturday depending on the outcome of the troika talks, though formal meetings are not expected until Sunday.

Racing to placate its European partners, Cypriot lawmakers voted in a late-night session on Friday to nationalise state pensions and split failing lenders into good and bad banks. They also gave the government powers to impose capital controls on banks, anticipating a flood of money from the island when banks are due to reopen on Tuesday after more than a week of lockdown.

PLUS-20 PCT LEVY?

Signalling a dramatic U-turn, officials said they were near agreement to tax deposits of over 100,000 euros in at least one Cypriot bank, having angrily rejected a similar measure on Tuesday branding it "bank robbery".

The turnaround came after Russia rebuffed Cypriot entreaties to help its banks, where Russian citizens and other foreigners have billions of euros at stake.

Cypriots were enraged by plans to hit small holdings of ordinary savers as well as large accounts.

Many of the biggest depositors are foreigners, including rich Russians, and European politicians are loathe to spend taxpayers' money on a bailout if the depositors take no losses.

Cypriot leaders, however, fear the damage the levy would do to the country's offshore banking industry. The tottering banks hold 68 billion euros in deposits, including 38 billion in accounts of more than 100,000 euros - enormous sums for an island of 1.1 million people which could never sustain such a big financial system on its own.

Much of the banks' capital was wiped out by investments in Greece, the epicentre of the euro zone debt crisis.

Party officials told Reuters that discussions were now centred on a 20 percent-plus levy on depositors holding over 100,000 euros, possibly only at the island's biggest lender, Bank of Cyprus.

The plan to nationalise semi-state pension funds has, however, met with resistance, particularly from Germany which made clear that tapping pensions could by even more painful for ordinary Cypriots than a deposit levy.

"EDGE OF AN ABYSS"

Taking a first step toward financial consolidation, Cyprus arranged on Friday for the takeover of big Greek units of its two biggest banks by a Greek competitor.

Lawmakers then gave the government the power to potentially split the good and bad assets of Bank of Cyprus and No. 2 lender Cyprus Popular Bank, also known as Laiki, and to protect deposits that enjoy a state guarantee of up to 100,000 euros.

"With the process of consolidation, the depositors over 100,000 euros will wait for several years to see how much of their deposits they will collect," said Averof Neophytou, deputy leader of the ruling Democratic Rally party.

"At the same time, this political decision to support this harsh law safeguards 100 percent of the deposits of 361,000 depositors in Laiki Bank," he added, referring to depositors with up to 100,000 euros.

The pace of the unfolding drama has stunned Cypriots, who have besieged bank cash machines since the levy was first mooted a week ago.

"Our so-called friends and partners sold us out," said Marios Panayides, 65, a protester at the parliament. "They have completely abandoned us on the edge of an abyss."

Retailers, facing cash-on-delivery demands from suppliers, warned stocks were running low.

"At the moment, supplies will last another two or three days," said Adamos Hadijadamou, head of Cyprus's Association of Supermarkets. "We'll have a problem if this is not resolved by next week."

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UPDATE 2-U.S. Senate narrowly passes first budget in four years

Sat Mar 23, 2013 6:18am EDT

* Four Democrats oppose their party's budget in 50-49 vote

* Passage of Senate plan shifts fiscal debate away from deadlines

* Possible fight over U.S. debt ceiling looms in summer

By David Lawder

WASHINGTON, March 23 (Reuters) - The U.S. Senate on Saturday narrowly passed its first federal budget in four years, a move that will usher in a relative lull in Washington's fiscal wars until an anticipated summer showdown over raising the debt ceiling.

The budget plan was passed by a 50-49 vote in the Democratic-controlled chamber. Four Democratic senators facing tough re-election campaigns in 2014 joined all the Senate Republicans in opposing the measure, which seeks to raise nearly $1 trillion in new tax revenues by closing some tax breaks for the wealthy.

The Senate budget, which reflects Democratic priorities of boosting near-term job growth and preserving social safety net programs, will square off in coming months against a Republican-focused budget passed by the Republican-dominated House of Representatives.

Neither of the non-binding blueprints has a chance of passage in the opposing chamber, leaving Congress no closer to resolving deep differences over how to shrink U.S. deficits and grow the economy. But they give each party a platform from which to tout their respective fiscal visions.

The Democrats' plan from Senate Budget Committee Chairman Patty Murray aims to reduce deficits by $1.85 trillion over 10 years through an equal mix of tax increases and spending cuts.

The Republican plan from House Budget Committee Chairman Paul Ryan seeks $4.6 trillion in savings over the same period without raising new taxes. It aims to reach a small surplus by 2023 through deep cuts to health care and social programs that aid the poor.

Murray said after the vote that she would try to work with Ryan on a path toward compromise.

"While it is clear that the policies, values, and priorities of the Senate budget are very different than those articulated in the House budget, I know the American people are expecting us to work together to end the gridlock and find common ground, and I plan to continue doing exactly that."

SHUTDOWN THREAT

Passage of a stop-gap government funding measure on Thursday lowered the temperature in the budget debate by eliminating the threat of a government shutdown next week.

"We're going to get a breather here. Congress will let things cool off a bit and there'll be other issues that come to the forefront in the spring," said Greg Valliere, chief political strategist at Potomac Research Group, a firm that advises institutional investors on Washington politics.

These issues include legislation on gun control, immigration reform and initial work on simplifying the tax code, which is particularly important to Republicans.

Joining Republicans in opposing the Democratic budget were Democratic senators from conservative-leaning states: Max Baucus of Montana, Mark Begich of Alaska, Kay Hagan of North Carolina and Mark Pryor of Arkansas. Voting for a budget that raises tax revenues could increase their vulnerability in congressional elections next year and put Democrats' thin majority at risk.

In the lead-up to the Senate vote early on Saturday morning, the body considered more than 100 largely symbolic, non-binding amendments to the budget aimed at scoring political points and staking out positions.

Among notable amendments, the Senate signaled strong support for allowing states more authority to collect sales taxes on Internet purchases, for approval of the controversial Canada-to-Texas Keystone XL oil pipeline and for repealing a tax on medical devices imposed by President Barack Obama's health care reform law.

The Senate also voted 99-0 to end policies that subsidized large banks considered "too big to fail" but came out against imposing taxes on industrial carbon emissions.

Ryan's plan aims to reach a small surplus with no tax increases by 2023 through deep cuts to social safety net programs. This enables Republicans to claim that they are more responsible by balancing the budget.

"The House budget changes our debt course, while the Senate budget does not," said Senator Jeff Sessions, the top Republican on the Senate Budget Committee.

BATTLE OVER "BALANCE"

In a taste of the ideological debates to come, Murray claimed that the Senate budget was more "balanced" because it emphasized job growth and offered an equal amount of revenue increases and spending cuts.

For a side-by-side comparison of the Ryan and Murray budgets, see here.

The Senate had not passed a budget resolution since 2009 because of fiscal policy disputes with House Republicans that forced Congress to turn to numerous stop-gap spending measures to avoid government shutdowns.

To protect their thin Senate majority, Democrats avoided exposing their members to potentially damaging votes to raise taxes ahead of 2012 elections, arguing that a 2011 budget deal set spending levels for several years and made the non-binding budget legislation unnecessary.

But this year, under the February debt limit increase law, members of both the House and Senate faced pay suspensions if their chamber had failed to pass a budget by April 15.

Although lawmakers in both parties have called for a return to normal budgeting procedures after years of stop-gap spending bills and high-pressure deadlines, there is little chance that they can work out differences between the two budgets.

"The idea of conferencing them is kind of a joke. You would expect that if there were a chance of success, they wouldn't have planted flags on completely different planets," said Sean West, U.S. policy director at Eurasia Group, a political risk consultancy.

Ultimately, it may take another 11th-hour deal between Obama and congressional Republicans to set a fiscal path forward as part of a deal to raise the debt ceiling, he said. The U.S. Treasury is expected to exhaust its borrowing capacity around late July or early August.

In 2011, a similar fight over the debt limit shook financial markets and cost the United States its top-tier credit rating.

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UPDATE 1-Cyprus poses no systemic threat to Russian banks -Russia central bank

Fri Mar 22, 2013 6:38am EDT

By Oksana Kobzeva

MOSCOW, March 22 (Reuters) - The financial crisis in Cyprus poses no systemic threat to the Russian banking system, a first deputy chairman of Russia's central bank, Alexei Simanovsky, said on Friday.

"I don't see any systemic or individual threat here," Simanovsky said, after the regulator conducted an "express-analysis" of links between Russian banks and Cyprus.

Cyprus's finance minister left Moscow empty-handed on Friday after Russia turned down appeals for aid, leaving the island to strike a bailout deal with the European Union before Tuesday or face the collapse of its financial system.

The Russian economy has a relatively low dependency on its banking system, with the ratio of total assets to gross domestic product ratio at 79.4 percent as of March 1, compared to over 100 percent in some developed countries.

After a proposed levy on bank deposits was rejected, Cypriot lawmakers are looking into other measures to raise at least part of 5.8 billion euros ($7.50 billion) required by the European Union as a condition for Cyprus to secure a 10 billion euro bailout.

Cypriot authorities are calling to impose capital controls to stem a flood of funds leaving the island when banks reopen, which they are expected to do on Tuesday after a week-long shutdown.

Ratings agency Fitch said on Thursday that Russian banks could face significant operational risks only if the crisis was prolonged and brokers and became reluctant to trade with Cyprus-based counterparts.

Russian banks do not see significant losses from the proposed levy.

Russian banks had $30 billion to $40 billion tied up in cross-border loans to Cypriot firms at the end of 2012 and some $12 billion on deposit with Cypriot banks, Moody's said earlier.

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UPDATE 1-Schroders in talks to buy Cazenove Capital

Fri Mar 22, 2013 6:42am EDT

LONDON, March 22 (Reuters) - British fund manager Schroders said on Friday it was in talks to buy smaller rival Cazenove Capital, raising the prospect of a marriage between two of London's oldest names.

In a regulatory statement, Schroders confirmed it was considering a cash offer for Cazenove, which manages 18.7 billion pounds ($28.39 billion) in assets, with a loan note alternative, for the firm's entire issued share capital.

Schroders has until April 19 to decide on whether to bid for the company, under UK takeover regulations.

Buying Cazenove would increase Schroders' assets under management by close to 10 percent. Last month 200-year old Schroders said assets had risen to 212 billion pounds following strong inflows in its fourth quarter.

Traditionally one of the least acquisitive of the larger UK asset management houses, Schroders has made small add-on deals recently. In December it said it had agreed to buy U.S.-based STW Fixed Income Management.

Cazenove, established in 1823, had by the 1940s become one of the top stockbroking firms for the well-heeled of London.

The fund management arm was split from the wider group after JP Morgan formed a joint venture with Cazenove's UK investment banking business in 2005.

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Cyprus agrees to spin off Greek units of Cypriot banks

NICOSIA, March 22 | Fri Mar 22, 2013 6:53am EDT

NICOSIA, March 22 (Reuters) - Cyprus has agreed with Greece on a takeover of the Greek units of Cypriot banks, the island nation's presidency said on Friday, ending uncertainty over the fate of those operations.

"After talks between Cyprus President Nicos Anastasiades with Greek Prime Minister Antonis Samaras, it was confirmed that the spinoff issue of Greek branches of Cypriot banks has been settled with the most favourable terms under the present circumstances, with a significant benefit for the Cypriot side," the Cypriot presidency said in a statement.

Euro zone finance ministers excluded the Greek branches of Cypriot banks from a controversial tax included in the island's international bailout on condition that those units would be transferred to Greek banks.

A least two of Greece's biggest lenders have showed interest in the Cypriot units, government officials and bankers told Reuters earlier this week.

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UPDATE 1-Spain beats bond sale target, brushes off Cyprus crisis

Thu Mar 21, 2013 6:26am EDT

* Spain sells 4.5 billion euros of debt at triple-bond sale

* Average yields lower on all three bonds

* Spain has sold more than 34 percent of 2013 bond issuance goal

By Paul Day

MADRID, March 21 (Reuters) - Spain sold more than planned at a bond auction on Thursday at yields slightly below those paid at sales over the last month, with investor appetite undimmed by the financial crisis in Cyprus.

The Treasury sold 4.5 billion euros ($5.8 billion) at the sale of three maturities, including the 10-year benchmark, beating the top end of its target range of 3 to 4 billion euros.

"It's a very good auction ... Contagion fears for the time being are not materialising and we believe this is going to continue," rate strategist at Commerzbank in London Michael Leister said.

Spain has now sold more than 34 percent of its total 2013 goal as it makes the most of renewed investor appetite in high-yielding debt, backed by the European Central Bank's pledge last summer to do whatever was necessary to protect the monetary union.

Cyprus has faced the prospect of bankruptcy since Tuesday, when its parliament voted unanimously against a levy on bank deposits and continues to search for a new plan to find billions of euros to qualify for European aid.

But Spain's dire economy, which is not expected to emerge from its more than a year-long recession until next year, massive unemployment and high deficit have become less of a worry for investors since the ECB plan to buy distressed members' bonds.

"(The sale has) gone very well. Clearly there is no Cyprus angst or Italy angst in that sale. They sold more than they were targeting," said Marc Ostwald, strategist at Monument Securities in London.

"It is basically people reaching for yield. You can't make any returns in Bunds, or in gilts or in Treasuries."

The risk premium investors demand to hold Spanish over German debt fell sharply after the auction, to around 347 basis points, a long way from euro-era highs last July of around 650 bps.

On Thursday, the Treasury sold 1.2 billion euros of a bond due March 31, 2015, at an average yield of 2.275 percent compared to 2.540 percent when it last sold Feb. 21. The bond was 4 times subscribed after 3.7 times in February.

The bond maturing Jan. 31, 2018 sold 1.0 billion euros, while yields fell to 3.557 percent from 3.572 percent just two weeks ago, with a bid-to-cover ratio of 3.6 compared to 2.3 previously.

The yield on the longer-dated, benchmark bond, due Jan. 31, 2023 was 4.898 percent compared to 4.917 percent at the beginning of March, with demand outstripping supply by 1.9 times compared to 2.3 times previously.

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UPDATE 1-British budget deficit and retail data offer rare positive news

Thu Mar 21, 2013 6:25am EDT

By David Milliken and Christina Fincher

LONDON, March 21 (Reuters) - Britain had a far smaller-than-expected deficit in February and retail sales got a boost, data showed on Thursday, a fillip for finance minister George Osborne a day after he released dismal economic forecasts.

Deficit reduction is the central economic policy of Britain's Conservative-led coalition government, which came to power in May 2010 when Britain's budget deficit was more than 11 percent of annual economic output - one of the highest for a major economy.

The government's budget plans have been plagued by weak growth, but retail sales figures released at the same time as the borrowing figures suggested at least some temporary relief after a dismal January for retailers.

The government's preferred measure of Britain's public borrowing, which strips out some of the effects of its bank bailouts, showed a deficit of just 2.756 billion pounds in February, the Office for National Statistics said on Thursday.

This is roughly a quarter of the 11.756 billion seen in February 2012 and far below analyst forecasts of deficit of 8.45 billion pounds.

The statistics office did not translate this into a percentage of output, or gross national product. Osborne announced on Wednesday that GDP would grow just 0.6 percent this year, half the previous prediction.

Britain is teetering on the brink of its third recession in four years - something Thursday's data may help it avoid. Growth is better than in the euro zone which is expected by many to contract this year. But it pales against other countries.

Sterling rose to a two-week high against the dollar and a five-week high against the euro after the data.

February's figures are flattered by a known 2.6 billion pound transfer of cash from the Bank of England under a deal to return gilt interest to the government, and 2.3 billion pounds from the sale of next-generation mobile phone frequencies.

But underlying performance was also strong, with a drop in local government spending and stronger central government tax receipts.

"It's mildly encouraging and we can see why sterling rallied on the back of that news," said Tom Vosa, economist at National Australia Bank. "Public sector borrowing now looks to be in line with the stronger employment growth and perhaps again more consistent that we have avoided the technical recession."

Separate official data showed that retail sales volumes rose 2.1 percent on the month, versus expectations for a 0.5 percent rise, and were 2.6 percent higher on the year - both the strongest rises since March 2012.

A bounce back from a snowy January and strong demand for tablet computers, sports goods and jewellery helped sales, the statistics office said.

Still, there were signs of weakness in the retail sector. Next, Britain's second-biggest clothing retailer, said trading in its new financial year had got off to a slow start.

Thursday's data showed Britain's total public debt, excluding the cost of bailing out its banks, rose to 1.1615 trillion pounds, equivalent to 73.5 percent of annual economic output, just shy of December's record 75.1 percent.

Since the start of the tax year in April 2012, borrowing has totalled 94.9 billion pounds, excluding a one-off boost from the transfer of Royal Mail pension assets.

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WRAPUP 4-ECB gives Cyprus bailout ultimatum, banks face cutoff

Thu Mar 21, 2013 6:34am EDT

* Finance minister discussing banking, energy cooperation with Russia

* President meets party leaders on "Plan B"

* ECB says to cut off bank funds without bailout deal by Monday

* Russia says EU behaving like "bull in a china shop"

* Eurogroup chairman says Russia won't lend Cyprus more

By Michele Kambas and Paul Carrel

NICOSIA/FRANKFURT, March 21 (Reuters) - The European Central Bank gave Cyprus until Monday to raise billions of euros to clinch an international bailout or face losing emergency funds for its banks and inevitable collapse.

The ultimatum came with the island's leaders locked in talks on a "Plan B" to try to raise 5.8 billion euros demanded by the EU under a 10 billion euro ($13 billion) rescue, after angry lawmakers threw out a tax on deposits as "bank robbery".

Officials said new options discussed on Thursday could include nationalising pension funds of semi-state companies, issuing an emergency bond linked to future natural gas revenue or a revised bank deposit levy hitting only large investors, many of them Russians.

The European Central Bank, which has kept Cyprus's banks operating with a liquidity lifeline, said the government had until Monday to get a deal in place, or funds would be cut off.

"Thereafter, Emergency Liquidity Assistance (ELA) could only be considered if an EU/IMF programme is in place that would ensure the solvency of the concerned banks," it said.

Cyprus's central bank governor said he expected to clinch a financial support package by then. He did not say how.

The government has ordered banks to stay closed until Tuesday. The stock exchange also suspended trading for the rest of the week.

There were long queues at some bank branches in Nicosia as staff replenished cash machines, which have continued to operate while banks have been closed since last week.

In Moscow, Cypriot Finance Minister Michael Sarris said he was discussing possible Russian investments in the island's banks and energy resources to reduce its debt burden, as well as an extension of an existing 2.5-billion-euro Russian loan.

Russian citizens have billions of euros to lose in the island's outsized, teetering banking sector.

"The banks are the ultimate objective in any support we get, so it'll either be a direct support to the banks or the support that we get through other sectors will be channelled to the banks," Sarris told Reuters during a second day of talks with his Russian counterpart, Anton Siluanov.

He said Cyprus had no plans to borrow more money from Russia and add to its debt mountain. The Russian Finance Ministry had said on Monday that Nicosia sought an extra 5 billion euro loan.

The chairman of euro zone finance ministers, Dutchman Jeroen Dijsselbloem, told the European Parliament Moscow had informed the EU that it had no intention of ploughing more money into Cyprus beyond the existing loan.

"Any other options, to go further, another loan or an investment in the banks, the Russians let us know that they are not willing to do that," he said. "Of course, the Cypriot government is now talking to the Russian government whether more can be done, I don't know the outcome of that yet."

Dijsselbloem said new loans from Russia would anyway not solve the debt issue, and that a revised levy on larger bank deposits was still on the table.

"I'm not sure that this package is completely gone and failed, because I don't see many alternatives," he told the European Parliament in Brussels.

EU officials believe at least some of the 5.8 billion they are demanding should come from the 68 billion euros in Cypriot banks, 38 billion of which are in the form of large deposits of more than 100,000 euros, mainly from foreigners.

But hitting small savers caused visceral outrage, and the Cypriot government fears that foisting too big a burden on large depositors would wreck the offshore financial industry that forms much of the country's economy.

Among the other options, nationalising pension funds of semi-public companies could yield between 2 billion and 3 billion euros, although European officials say it would raise less. Issuing bonds linked to future natural gas revenue is problematic because pumping any gas is years away.

INSOLVENCY

Doubts about the fate of the small nation of just 1.1 million people has shaken confidence in the single-currency euro zone and raised geopolitical tension between the EU and Russia.

Russian Prime Minister Dmitry Medvedev, who meets a European Commission delegation in Moscow on Thursday, said the bloc had behaved "like a bull in a china shop". He likened EU proposals, which would force Russian customers to contribute to the rescue of Cypriot banks, to Soviet-era expropriations.

Tuesday's parliamentary vote marked a stunning rejection of the kind of strict austerity accepted over the past three years by crisis-hit Greece, Portugal, Ireland, Spain and Italy.

European officials maintained the pressure on Nicosia.

"I cannot rule out a Cyprus insolvency," Austrian Finance Minister Maria Fekter said in an interview with the newspaper Oesterreich. "A euro exit would not achieve anything. Cyprus must act now."

With Cypriot Energy Minister George Lakkotrypis also in Moscow, officially for a tourism exhibition, speculation was rife that access to untapped offshore gas reserves could be on the table as part of a deal for Russian aid.

Cyprus is a haven for billions of euros squirreled abroad by Russian businesses and individuals - one of the reasons why Germany and other northern euro zone states are reluctant to bail it out without a contribution from bank depositors.

The island's banking sector was hollowed out by its exposure to bigger neighbour Greece.

The proposed levy on deposits would have taken nearly 10 percent from accounts over 100,000 euros. Smaller accounts would also have been hit, although the government proposed softening the blow to spare savers with less than 20,000 euros.

Cypriots were enraged at the proposal to tax accounts with less than 100,000 euros, which are meant to be protected by state guarantees across the European Union.

Marinos Panaretou, a 36-year-old retail manager, said he had been withdrawing the maximum 500 euros every day since Saturday, when news broke of the proposed levy.

"People feel safer if we have cash on us because you don't know what you're going to wake up to," he said. "Quite simply, you don't know what's going to happen tomorrow."

European officials say the Cypriot government could have protected small savers if it imposed a higher tax on big deposits, but it refused to do so to protect the rich foreign clients of its offshore banking business.

EU leaders are growing increasingly exasperated with Cyprus, while the threat of bankruptcy for a member of the euro zone, however small, raises fears for confidence in the currency.

"There is no obligation to accept help," said Polish Foreign Minister Radoslaw Sikorski, whose country does not use the euro. "Cyprus has the possibility of living with its own mistakes."

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UPDATE 1-Italian president seeks way out of political stalemate

Wed Mar 20, 2013 6:41am EDT

* Consultations with parties due to run to Thursday

* No sign of end to stalemate after inconclusive election

* Prospect of early return to polls if no accord reached

By James Mackenzie

ROME, March 20 (Reuters) - Italian President Giorgio Napolitano began consultations with political leaders on Wednesday to try to find a way of forming a government after the deadlocked election last month which left no party with a majority in parliament.

Senate speaker Pietro Grasso said after meeting Napolitano the president was determined to reach an accord, saying there was "an absolute necessity to give the country a government".

Napolitano would take "all roads possible", he said.

Italy's political stalemate and the prospect of months of uncertainty has created alarm across Europe just as the standoff over bank deposits in Cyprus reawakened fears that the euro zone debt crisis could flare up again.

Centre-left leader Pier Luigi Bersani, who won a majority in the lower house but not in the Senate, commands the largest bloc in parliament but cannot govern unless he has support from one of the other parties.

However, there has been no sign that an accord is possible with either former Prime Minister Silvio Berlusconi's centre-right alliance, the second biggest force in parliament, or the anti-establishment 5-Star Movement led by ex-comic Beppe Grillo, which holds the balance of power.

If no agreement can be struck between parties that are bitterly divided, Italy faces the prospect of a brief period under a caretaker government followed by a return to the polls, possibly as early as June.

Napolitano also meets minor parties, including Prime Minister Mario Monti's centrist group on Wednesday before the main meetings on Thursday when he sees representatives from the 5-Star Movement, Berlusconi's People of Freedom (PDL) party and Bersani's Democratic Party (PD).

Bersani, 61, received a small boost at the weekend when his candidates were elected the speakers of the two houses of parliament, despite the centre left's lack of a majority in the upper house.

Both speakers announced late on Tuesday that they would take a 30 percent wage cut and urged other parliamentarians to do the same, a move that followed an example set by 5-Star members elected as local officials in Sicily last year who gave up most of their salaries and used the savings to fund small businesses.

LIMITED

Bersani is proposing to present a limited package of reforms aimed at fighting corruption and creating jobs that he hopes can be backed by the 5-Star Movement.

Given the fractious climate, the prospects of a minority government surviving more than a short time are slim but Bersani has little alternative.

"The PD is not changing our line, we'll go to the consultations with the proposals which were voted by the party leadership immediately after the election," he told reporters on Tuesday.

Italy, the euro zone's third-largest economy, can ill afford a prolonged political crisis after the turmoil which brought down Berlusconi's last government and dragged the single currency to the brink of disaster just 16 months ago.

Its economy is deep in recession, and unemployment is at record levels especially among the young. Its 2 trillion-euro ($2.6 trillion) public debt is dangerously vulnerable to bond market volatility and any sharp rise in interest rates.

However, far from prompting the parties to cooperate as they did when Monti's technocrat government took over from Berlusconi in 2011, the crisis appears to have deepened hostility.

Grillo, who has pledged not to give a vote of confidence to a government led by any other party, warned followers against falling into a "trap" after a handful of rebels voted with the centre left in the election of the Senate speaker on Saturday.

Berlusconi, fighting a tax fraud conviction and facing trial for paying for sex with a minor, has demanded that the centre right be allowed to name the next president when Napolitano's term ends on May 15, offering his support to a Bersani-led government in exchange.

That offer was rejected as "indecent" by the PD, prompting Berlusconi to pledge street protests if parliament appointed a centre-left head of state.

A rally organised by the PDL, called "All for Silvio!" is already planned for Saturday to protest against what his supporters say is a political campaign by magistrates against the 76-year-old billionaire.

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American Realty offers to buy Cole Credit Property Trust for $5.7 bln

March 20 | Wed Mar 20, 2013 6:23am EDT

March 20 (Reuters) - Real estate investment trust American Realty Capital Properties Inc said it offered to buy Cole Credit Property Trust III Inc for $5.7 billion in cash and stock to create the largest publicly traded REIT in the net lease sector.

The offer is valued at more than $9 billion including debt, American Realty Capital said in a statement on Wednesday.

In a letter to the Cole Credit board, the company asked the trust to call off its planned acquisition of its external adviser, Cole Holdings Corp, saying its offer would provide immediate liquidity to the shareholders of the trust.

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China's Suntech declares bankruptcy - Xinhua

BEIJING, March 20 | Wed Mar 20, 2013 6:45am EDT

BEIJING, March 20 (Reuters) - China-based solar panel maker Suntech Power Holdings declared bankruptcy on Wednesday, state news agency Xinhua said.

On Monday Suntech said that it had defaulted on $541 million of its bonds due on Friday, triggering cross-defaults on loans from International Finance Corp and Chinese lenders.

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Cyprus to fall short of levy revenue target-central bank chief

NICOSIA, March 19 | Tue Mar 19, 2013 6:11am EDT

NICOSIA, March 19 (Reuters) - Cyprus will fail to raise the required 5.8 billion euros ($7.52 billion) from a planned levy on bank deposits if it scraps the tax for smaller savers, the country's central bank governor said on Tuesday.

"We will take less than 5.8 billion euros," Panicos Demetriades told a parliamentary committee, referring to the impact of a revised government draft bill that scraps the tax for bank deposits under 20,000 euros.

The draft bill on the deposits levy does not compensate for the lost revenue by raising it for those who have deposits above 100,000 euros.

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EURO GOVT-Bunds briefly hit session high, underpinned by Cyprus

LONDON, March 19 | Tue Mar 19, 2013 6:19am EDT

LONDON, March 19 (Reuters) - German Bund futures briefly hit a session high on Tuesday as uncertainty about Cyprus's bailout program underpinned demand for safe-haven debt.

German Bund futures rose to 144.33, the day's high, with a trader saying more buying was triggered at 144.20. The contract was last up 30 ticks on the day at 144.24.

"For the moment it looks like the choice is buying the dips which seems to be what's happening. 144.00 is becoming quite a good support level for Bunds and I wouldn't get short until we get below that level," the trader said.

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IMF backs Cyprus bid to help small depositors-Lagarde

FRANKFURT, March 19 | Tue Mar 19, 2013 6:33am EDT

FRANKFURT, March 19 (Reuters) - The International Monetary Fund supports the Cypriot government's efforts to ease the pain for smaller depositors under a levy that is part of an international bailout for the island, IMF Managing Director Christine Lagarde said on Tuesday.

"We are also obviously extremely supportive of the Cypriot authorities' intentions to introduce more progressive rates in the one-off levy or deposit-share swap within the agreed financial envelope of 5.8 billion (euros)," she told a conference.

Lagarde also said Cyprus needed to reduce the size of its banking sector and restructure it.

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TABLE-China gave $850 mln in foreign investment quotas in Feb

Mon Mar 18, 2013 6:03am EDT

  March 18 (Reuters) - China granted $850 million worth of investment quotas to nine foreign  institutional investors in February, paving the way for them to buy Chinese stocks and bonds.      The quotas, under the Qualified Foreign Institutional Investor (QFII) scheme, were awarded  to overseas institutions including BlackRock Asset Management North Asia Ltd, Hana Daetoo  Securities Co Ltd and British Columbia Investment Management Corp.      By the end of February, China had awarded a combined $40.8 billion of QFII quotas to 186  foreign institutions.           No.  QFII Name                                Obtained QFII Status     Quota         1  UBS AG                                       5/23/2003                 790         2  Nomura Securities Co.,Ltd.                   5/23/2003                 350         3  Morgan Stanley & Co. International            6/5/2003                 600            Limited                                                          4  Citigroup Global Markets Limited              6/5/2003                 550         5  Goldman, Sachs & Co.                          7/4/2003                 300         6  Deutsche Bank Aktiengesellschaft             7/30/2003                 600         7  The Hong Kong and Shanghai Banking            8/4/2003                 600            Corporation Limited                                              8  ING Bank N.V.                                9/10/2003                 400         9  JPMorgan Chase Bank, National                9/30/2003                 400            Association                                                     10  Credit Suisse (Hong Kong) Limited           10/24/2003                 500        11  Standard Chartered Bank (Hong Kong)         12/11/2003                 175            Ltd                                                             12  Nikko Asset Management Co.,Ltd.             12/11/2003                 450        13  Merrill Lynch International                  4/30/2004                 500        14  Hang Seng Bank Limited                       5/10/2004                 150        15  Daiwa Securities Capital Markets             5/10/2004                  50            Co.,Ltd.                                                       *16  Lehman Brothers International                 7/6/2004                 N/A            (Europe)  --- license withdrawn                                 17  Bill & Melinda Gates Foundation              7/19/2004                 300        18  INVESCO Asset Management Limited              8/4/2004                 350        19  The Royal Bank of Scotland N.V.               9/2/2004                 175        20  Société Générale                              9/2/2004                 250        21  Barclays Bank PLC                            9/15/2004                 600        22  Commerzbank AG                               9/27/2004                 325        23  Fortis Bank NV-SA                            9/29/2004                 500        24  BNP Paribas                                  9/29/2004                 200        25  Power Corporation of Canada                 10/15/2004                  50        26  Credit Agricole Corporate and               10/15/2004                  75            Investment Bank                                                 27  Goldman Sachs Asset Management                5/9/2005                 500            International                                                   28  Martin Currie Investment Management         10/25/2005                 120            Ltd                                                             29  Government of Singapore Investment          10/25/2005                1000            Corporation Pte Ltd                                             30  PineBridge Investment LLC                   11/14/2005                 150        31  Temasek Fullerton Alpha Investments         11/15/2005                1000            Pte Ltd                                                         32  JF Asset Management Limited                 12/28/2005                 375        33  The Dai-ichi Life Insurance                 12/28/2005                 250            CompanyLimited                                                 34  DBS Bank Ltd                                 2/13/2006                 100        35  AMP Capital Investors Limited                4/10/2006                 500        36  The Bank of Nova Scotia                      4/10/2006                 150        37  KBC Financial Products UK Limited            4/10/2006                  20        38  La Compagnie Financiere Edmond de            4/10/2006                 200            Rothschild Banque                                               39  Yale University                              4/14/2006                 150        40  Morgan Stanley Investment Management          7/7/2006                 450            Inc.                                                            41  Prudential Asset Management                   7/7/2006                 300            (Hongkong) Limited                                              42  Stanford University                           8/5/2006                 100        43  GE Asset Management Incorporated              8/5/2006                 300        44  United Overseas Bank Limited                  8/5/2006                  50        45  Schroder Investment Management               8/29/2006                 425            Limited                                                         46  HSBC Global Asset Management (Hong            9/5/2006                 432            Kong) Limited                                                   47  Mizuho Securities Co.,Ltd                     9/5/2006                  50        48  UBS Global Asset Management                  9/25/2006                 250            (Singapore) Ltd                                                 49  Sumitomo Mitsui Asset Management             9/25/2006                 350            Company, Limited                                                50  Norges Bank                                 10/24/2006                1000        51  Pictet Asset Management Limited             10/25/2006                 100        52  The Trustees of Columbia University          3/12/2008                 100            in the City of New York                                         53  Prudential Asset Management Co.,Ltd.          4/7/2008                   0        54  Robeco Institutional Asset management         5/5/2008                 235            B.V.                                                            55  State Street Global Advisors Asia            5/16/2008                  50            Limited                                                         56  Platinum Investment Company Limited           6/2/2008                 150        57  KBC Asset Management N.V.                     6/2/2008                 210        58  Mirae Asset Global Investments Co.,          7/25/2008                 250            Ltd.                                                            59  ACE INA International Holdings, Ltd.          8/5/2008                 150        60  Caisse de dépt et placement du Québec        8/22/2008                 200        61  President and Fellows of Harvard             8/22/2008                 200            College                                                         62  Samsung Investment Trust Management          8/25/2008                 450            Co., Ltd.                                                       63  AllianceBernstein Limited                    8/28/2008                 150        64  Oversea-Chinese Banking Corporation          8/28/2008                 150            Limited                                                         65  First State Investment Management            9/11/2008                 220            (UK) Limited                                                    66  DAIWA Asset Management Co.                   9/11/2008                 200        67  Shell Asset Management Company B.V.          9/12/2008                   0        68  T. Rowe Price International, Inc.            9/12/2008                 110        69  Credit Suisse AG                            10/14/2008                 300        70  UOB Asset Management Ltd                    11/28/2008                  50        71  ABU Dhabi Investment Authority               12/3/2008                1000        72  Allianz Global Investors Luxembourg         12/16/2008                 200            S.A.                                                            73  Capital International, Inc.                 12/18/2008                 100        74  Mitsubishi UFJ Morgan Stanley               12/29/2008                 100            Securities Co., Ltd.                                            75  Hanwha Investment Trust Management            2/5/2009                 238            Co., Ltd.                                                       76  Emerging Markets Management, L.L.C.          2/10/2009                  50        77  DWS Investment S.A.                          2/24/2009                 200        78  The Korea Development Bank                   4/23/2009                 150        79  Woori Bank Co., Ltd                           5/4/2009                  50        80  Bank Negara Malaysia                         5/19/2009                 400        81  Lloyd George Management (Hong Kong)          5/27/2009                  50            Limited                                                         82  Templeton Investment Counsel, LLC             6/5/2009                 300        83  BEA Union Investment Management              6/18/2009                 100            Limited                                                         84  The Sumitomo Trust & Banking Co.,            6/26/2009                  50            Ltd.                                                            85  Korea Investment Trust Management            7/21/2009                 200            Co., Ltd                                                        86  Baring Asset Management Limited               8/6/2009                 200        87  Ashmore Investment Management Limited        9/14/2009                 350        88  BNY Mellon Asset Management                  11/6/2009                 150            International Limited                                           89  Manulife Asset Management (Hong Kong)       11/20/2009                 300            Limited                                                         90  Nomura Asset Management CO., LTD            11/23/2009                 350        91  Tongyang Asset Management Corp.             12/11/2009                  70        92  Royal Bank of Canada                        12/23/2009                 100        93  Aviva Investors Global Services             12/28/2009                 100            Limited                                                         94  Ivy Investment Management Company             2/8/2010                 100        95  DIAM Co., Ltd.                               4/20/2010                 100        96  OFI Asset Management                         5/21/2010                 150        97  Aberdeen Asset Management Asia                7/6/2010                 200            Limited                                                         98  KB Asset Management Co., Ltd.                 8/9/2010                 200        99  Fidelity Investments Management (Hong         9/1/2010                 300            Kong) Limited                                                  100  Legg Mason Investments (Europe)              10/8/2010                 100            Limited                                                        101  Hong Kong Monetary Authority                10/27/2010                1000       102  Fubon Securities Investment Trust Co.       10/29/2010                 250            Ltd.                                                           103  Capital Securities Investment Trust         10/29/2010                 100            Corporation                                                    104  BMO Investments Inc.                         12/6/2010                 100       105  Bank Julius Bear & Co.,Ltd                  12/14/2010                 100       106  KTB Asset Management Co.,Ltd                12/28/2010                 100       107  Lyxor Asset Management                       2/16/2011                 100       108  Polaris International Securities              3/4/2011                 100            Investment Co. Ltd.                                            109  Assicurazioni Generali S.p.A.                3/18/2011                 100       110  Banco Bilbao Vizcaya Argentaria, S.A.         5/6/2011                 100       111  Cathay Securities Investment Trust            6/9/2011                 100            Co., Ltd.                                                      112  Fuh Hwa Securities Investment Trust           6/9/2011                 100            Co. Ltd.                                                       113  Comgest S.A.                                 6/24/2011                 100       114  Amundi Hong Kong Limited                     7/14/2011                 100       115  BlackRock Institutional Trust                7/14/2011                 100            Company, N.A.                                                  116  Grantham, Mayo, Van Otterloo & Co.LLC         8/9/2011                 100       117  Monetary Authority of Singapore              10/8/2011                 100       118  China Life Insurance Co.,                   10/26/2011                 100            Ltd.Taiwan                                                   119  Shin Kong Life Insurance Co., Ltd.          10/26/2011                 100       120  Princeton University                        11/25/2011                  50       121  Shinko Asset Management Co., Ltd.           11/25/2011                 100       122  Canada Pension Plan Investment Board         12/9/2011                 600       123  Van Eck Associates Corporation               12/9/2011                 100      *124  Hansberger Global Investors, Inc.           12/13/2011                 100       125  EARNEST Partners LLC                        12/13/2011                 150       126  Bank of Thailand                            12/16/2011                 300       127  Kuwait Investment Authority                 12/21/2011                1000       128  Northern Trust Global Investments           12/21/2011                 100            Limited                                                        129  Taiwan Life Insurance Co., Ltd.             12/21/2011                 100       130  The Bank of Korea                           12/21/2011                 300       131  Ontario Teachers' Pension Plan Board        12/22/2011                 100       132  Korea Investment Corporation                12/28/2011                 200       133  Russell Investments Ireland Limited         12/28/2011                 100       134  Metzler Asset Management GmbH               12/31/2011                 200       135  HI Asset Management Co., Limited.           12/31/2011                 100       136  Shinhan BNP Paribas Asset Management          1/5/2012                 100            Co., Ltd.                                                      137  Stichting Pensioenfonds voor                  1/5/2012                  60            Huisartsen                                                     138  National Pension Service (South               1/5/2012                 100            Korea)                                                         139  Mercuries Life Insurance Co Ltd              1/30/2012                  50       140  Prudential Financial Securities              1/31/2012                  70            Investment Trust Enterprise                                    141  Principal Global Investors LLC               1/31/2012                 150       142  Hospital Authority Provident Fund            1/31/2012                 100            Scheme (HK)                                                    143  TransGlobe Life Insurance Inc.                2/3/2012                150        144  Public Mutual Berhad                          2/3/2012                  60       145  Meiji Yasuda Asset Management Company        2/27/2012                 N/A            Ltd.                                                           146  Cathay Life Insurance Co., LTD.              2/28/2012                 150       147  Sumitomo Mitsui Banking Corporation          2/28/2012                 100       148  Fubon Life Insurance Co. Ltd                 3/1/2012                  150       149  American International Assurance Co          3/5/2012                  150            Ltd                                                            150  Neuberger Berman Europe Limited              3/5/2012                  100       151  Khazanah Nasional Berhad                     3/7/2012                  250     152    Capital Research and Management              3/9/2012                  100            Company                                                      153    Tokio Marine Asset Management Co Ltd        3/14/2012                  N/A    *154    Hana Daetoo Securities Co,Ltd               3/29/2012                  100     155    Genesis Asset Managers,LLP                  3/30/2012                  200     156    City of London Investment Management        3/30/2012                  100            Co Ltd                                                       157    JPMorgan Asset Management (UK) Ltd          3/30/2012                  N/A     158    Okasan Asset Management Co Ltd              3/30/2012                   50     159    Prescient Investment Management Pty,        4/18/2012                   50            Ltd                                                          160    Dongbu Asset Management Co.,Ltd             4/20/2012                  N/A     161    Janus Capital Management LLC                4/20/2012                  100     162    Mizuho Asset Management Co., Ltd            4/26/2012                  100     163    Henderson Global Investors Limited          4/28/2012                  N/A     164    Eurizon Capital S.A.                         5/2/2012                  N/A     165    BOCI-Prudential Asset Management Ltd         5/3/2012                  150     166    Fullerton Fund Management Company Ltd        5/4/2012                  250     167    Lion Global Investors Ltd                    5/7/2012                  N/A     168    Generali Fund Management S.A.               5/23/2012                  N/A     169    William Blair & Company LLC.                5/24/2012                  100     170    Investec Asset Management Ltd               5/28/2012                  N/A     171    ING Investment Management Aisa               6/4/2012                  150            Pacific (Hong Kong) Ltd                                      172    Mitsubishi UFJ Asset Management Co           6/4/2012                  N/A            Ltd                                                          173    BOC Group Life Assurance Co Ltd             7/12/2012                  200     174    Hall Capital Partners LLC                    8/6/2012                  N/A     175    Board of Regents of The University of        8/6/2012                  100            Texas System                                                 176    Nan Shan Life Insurance Co Ltd               8/6/2012                  200     177    Suva                                        8/13/2012                  300    *178    British Columbia Investment                 8/17/2012                  100            Management Corp                                              179    Value Partners Hong Kong Ltd                8/21/2012                  100     180    Ontario Pension Board                       8/29/2012                  150     181    The Church Pension Fund                     8/31/2012                   50     182    Macquarie Bank Ltd                           9/4/2012                  200     183    Andra AP-fonden                             9/20/2012                  N/A     184    Hai Tong Asset Management (HK) Ltd          9/20/2012                  100     185    IDG Capital Management (HK) Ltd             9/20/2012                  N/A     186    Duke University                             9/24/2012                   50     187    Qatar Holding LLC                           9/25/2012                 1000     188    EFG Bank AG                                 9/26/2012                  100     189    Cutwater Investor Services Corp            10/26/2012                  N/A    *190    OrbiMed Advisors LLC                       10/26/2012                   50     191    New Silk Road Investment Pte Ltd           10/26/2012                  N/A    *192    BlackRock Asset Management North Asia      10/26/2012                  100            Ltd                                                          193    JPMorgan Asset Management Taiwan            11/5/2012                  150     194    AEGON USA Investment Management, LLC        11/5/2012                  N/A     195    CDH Investment Advisory Private             11/7/2012                  200            Limited                                                      196    Skandinaviska Enskilda Banken              11/12/2012                  N/A            AB(publ)                                                    *197    Harvest Global Investments Limited         11/12/2012                  100                                                                         198    Greystone Managed Investments Inc          11/21/2012                  N/A     199    Uni-President Assets Management            11/21/2012                   50            Corporation (Taiwan)                                         200    Daiwa SB Investments Ltd                   11/19/2012                  N/A     201    APS Asset Management Pte Ltd               11/27/2012                  300    *202    CITIC Securities International             12/11/2012                  100            Investment Management (HK) Limited                           203    Pacific Alliance Investment                12/11/2012                  N/A            Management (HK) Limited                                     *204    E Fund Management (Hong Kong)              12/11/2012                  100            Co.,Limited                                                  205    Hillhouse Capital Management Limited       12/11/2012                  300                                                                         206    SinoPac Securities Investment Trust        12/13/2012                  N/A            Co.,Ltd                                                     *207    China Asset Management (Hong Kong)         12/25/2012                  100            Limited                                                      208    East Capital AB                            1/7/2013                    N/A     209    First Securities Investment Trust          1/24/2013                   N/A            Co., Ltd                                                     210    Investec Asset Management Ltd              1/24/2013                   N/A     211    UBS Global Asset Management (Hong          1/24/2013                   N/A            Kong) Ltd                                                    212    CSOP Asset Management Ltd                  1/31/2013                   N/A     213    EJS Investment Management S.A.             1/31/2013                   N/A     214    Guotai Junan Assets (Asia) Ltd             2/21/2013                   N/A     215    Taikang Asset Management (HK) Co Ltd       2/22/2013                   N/A     216    CMS Asset Management (HK) Co, Ltd          2/22/2013                   N/A       N/A: not available      Sources: China Securities Regulatory Commission; State Administration of Foreign Exchange.        Figures for licences are as of Feb. 28. Figures for quotas are as of Feb. 28 and in millions  of U.S. dollars.      * - Updated information  

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