World stocks rise as Alcoa sees stronger demand

BANGKOK (AP) — World stock markets rose Wednesday after the fourth-quarter earnings season got off to a positive start in the U.S. with aluminum giant Alcoa forecasting higher demand for 2013.
Demand for aluminum has been hurt by the weak global economy, but Alcoa predicted a 7 percent increase in demand this year, slightly better than the 6 percent increase in 2012. Because Alcoa makes aluminum for so many key industries, investors study its results for clues about the health and direction of the overall economy.
"Regional markets are mostly firmer after the Alcoa result set the tone early in Asia," said Stan Shamu of IG Markets in Melbourne in a market commentary. "Alcoa's results are generally considered a bellwether for the global economy and the fact that the aluminum giant forecasts higher demand in 2013 appeased investors."
European stocks rose in early trading. Britain's FTSE 100 rose 0.4 percent to 6,075.35. Germany's DAX added 0.3 percent to 7,720.34. France's CAC-40 rose 0.4 percent to 3,721.74.
Wall Street appeared headed for gains, with Dow Jones industrial futures up 0.2 percent at 13,291 and S&P 500 futures rising 0.2 percent to 1,454.70.
In Asia, Hong Kong's Hang Seng advanced 0.5 percent to 23,218.47 after a downturn in the prior session, with sentiment helped by gains in mainland Chinese shares.
"Stability in China is helping. We are taking a lot of cues from China-Asia," said Jackson Wong, vice president of Tanrich Securities in Hong Kong.
Japan's Nikkei 225 index opened lower on a strengthening yen but reversed course as the currency slipped against the dollar. The benchmark in Tokyo gained 0.7 percent to close at 10,578.57.
Australia's S&P/ASX 200 added 0.4 percent to 4,708.10. South Korea's Kopsi was 0.3 percent lower at 1,991.20. Benchmarks in Singapore, Taiwan, Thailand, and the Philippines rose. Indonesia and Malaysia fell. Mainland Chinese stocks were mixed.
Analysts at Capital Economics said in a market commentary that "2013 has begun with more optimism about prospects for the global economy."
Among individual stocks, shares of Australian company Alumina Ltd., a joint venture partner of Alcoa, jumped 4.6 percent. Mitsubishi Heavy Industries Ltd. rose 5 percent in Tokyo. Hong Kong-listed China Railway Group rose 5.1 percent.
Major indexes surged last week after U.S. lawmakers passed a bill to avoid a combination of government spending cuts and tax increases that have come to be known as the fiscal cliff. The deal, however, remains incomplete, and trading has been cautious since then. Politicians will face another deadline in two months to agree on more spending cuts.
U.S. stocks closed lower Tuesday, before Alcoa's earnings report was released.
Benchmark crude for February delivery was down 16 cents to $92.98 per barrel in electronic trading on the New York Mercantile Exchange. The contract fell 4 cents to close at $93.15 per barrel on the Nymex on Tuesday.
In currencies, the euro rose slightly to $1.3085 from $1.3084 Tuesday in New York. The dollar rose to 87.62 yen from 87.19 yen.

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Futures rise as earnings season begins in the US

NEW YORK (AP) — Stock futures are rising after a pair of U.S. companies opened the earnings season with a surprisingly strong start.
Dow Jones industrial futures are up 13 points to 13,280. The broader S&P futures have added 0.80 points to 1,435.10. Nasdaq futures are up 0.25 points to 2,714.25.
After markets closed Tuesday, Alcoa predicted rising demand for its aluminum this year and topped revenue expectations for the fourth quarter. Earlier in the day, agricultural giant Monsanto said its profit tripled and raised its guidance for 2013.
Alcoa's outlook, which could hint at a broader economic recovery, helped to buoy markets overseas Wednesday.
Britain's FTSE 100 rose 0.4 percent, Germany's DAX added 0.3 percent and France's CAC-40 rose 0.4 percent. In Asia, Hong Kong's Hang Seng advanced 0.5 percent.

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Stocks open higher for first day in three

NEW YORK (AP) — Stocks rose on Wall Street in early trading Wednesday after U.S. corporate earnings reports got off to a strong start.
The Dow Jones industrial average rose 75 points to 13,403 after the first hour of trading. The Dow is coming off of two days of losses.
The Standard & Poor's 500 index rose six to 1,463 and the Nasdaq composite rose 16 to 3,108.
Alcoa predicted rising demand for aluminum this year as the aerospace industry gains strength. Late Tuesday the company reported fourth-quarter revenue that beat analysts' forecasts. Investors pay close attention to Alcoa's results and forecasts because the aluminum it makes is used in so many industries including construction and manufacturing.
Consumer products maker Helen of Troy, whose brands include Dr. Scholl's, Vicks and Fabreze, rose 71 cents to $34.24 after reporting a 15 percent increase in net income.
The yield on the 10-year Treasury note was unchanged at 1.87 percent. The dollar edged higher against the euro and crude oil rose 13 cents to $93.28 a barrel.
European markets also rose. Benchmark indexes rose 1 percent in Britain and 2 percent in Italy. Germany's DAX rose 0.4 percent and France's CAC-40 rose 0.3 percent.
Among other stocks making big moves:
— Wireless network operator Clearwire jumped 22 cents to $3.14 after Dish network made an unsolicited offer to buy the company, which has already agreed to sell itself to Sprint. Dish rose 95 cents to $36.91 and Sprint fell 10 cents to $5.87.
— Online education company Apollo Group plunged 10 percent after reporting a sharp decline in fall-term student sign-ups at the University of Phoenix. The stock fell $2.12 to $18.82.

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Samsung Says It's Making More Money Than Apple, Now

Riding the wave of gadget goodness from the Consumer Electronics Show in Las Vegas, Samsung released a pretty impressive set of fourth quarter earnings estimates, including a record high profit. The South Korean electronics manufacturer says that it will make $8.3 billion in profits on $52.7 billion in revenue. That's a shade better than Apple's own record high profit of $8.2 billion on just $32 billion. Now, we could all day about the devilish details in the earnings reports and differences between the two companies revenue streams, but one things is brutally clear: Samsung is making more money than Apple, now. At least if its estimates are correct, they are.
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Tim Cook and company can't be thrilled about this news. Apple's very publicly struggled with Samsung's roaring success in the smartphone business, so much so that it has peppered its competitor with patent litigation lawsuits around the world in an attempt to get its products pulled from shelves. Though Apple won a big decision in the United States last fall, Samsung's been doing pretty well in the appeals process, and it's increasingly looking like Apple will not have its ban.
RELATED: These Are the Samsung Products Apple Wants Banned
Meanwhile, Samsung is still knocking the socks off of consumers. Just hours before releasing the glowing Q4 earnings estimates, the company pulled back the curtain on some pretty mind-boggling new TVs that will probably cost as much as a car but also shows that they're on the right side of the innovation curve. That would be the lucrative side.

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Samsung sees record-high 4Q profit

SEOUL, South Korea (AP) — Samsung Electronics Co., the world's largest technology company by revenue, expects record earnings for the fourth quarter of 2012 as shoppers continued to snap up its smartphones and tablets.
The company said Tuesday its operating profit for the October-December quarter would be about 8.8 trillion won ($8.3 billion), up 89 percent from a year earlier and higher than expectations. It will release its full quarterly result including net profit at the end of this month.
The maker of Galaxy smartphones and tablets said fourth quarter revenue likely rose 18 percent from a year earlier to 56 trillion won.
Analysts said nearly 70 percent of the operating income for the quarter was likely generated by Samsung's mobile division that makes and sells smartphones and tablets.
Samsung's mobile business, which recently overtook Apple in smartphone sales and Nokia in mobile handsets, has driven Samsung's earnings growth in recent quarters. Samsung's quarterly operating profit has risen steadily since the final quarter of 2011, while rival mobile-phone makers such as Nokia, Research In Motion and HTC have experienced falling market share and profits.
Samsung shipped at least 60 million smartphones in the last quarter of 2012, according to analysts' estimates, about 10 percent growth from the previous quarter.
The launch in September of the Galaxy Note II, a giant smartphone with a 5.5-inch screen and a digital pen, helped Samsung retain its market dominance during the Christmas holiday season despite competition from Apple's iPhone 5, analysts said. Samsung's flagship Android device, the Galaxy S III, also sold strongly.
Jin Sung-hye, an analyst at KTB Securities, estimated Samsung shipped 15 million S III smartphones and 7 million of the Note II during the final three months of 2012. The surprise popularity of the Note II device prompted other handset makers to increase the screen size of their smartphones as consumers embrace a wider mobile-phone screen to watch videos.
Market watchers speculate that Samsung will introduce a new Galaxy S smartphone, likely to be named the Galaxy S IV, before the end of April. Samsung usually rolls out the latest iteration of its Android-based flagship smartphone before the end of the second quarter, taking advantage of the time when rivals are months away from introducing new smartphone models.
With the early rollouts of the new Galaxy S model and an update to the Note series later in the year, analysts predict Samsung will sell at least 300 million smartphones in 2013, widening its lead over Apple. Samsung's smartphone shipments likely surpassed 200 million for the first time in 2012.
The company plans to act more aggressively to increase its share of the tablet PC market this year, which is still dominated by Apple's iPad, its executives said in an October conference call. The release of mini tablets that are between the size of smartphones and standard tablets also opens up a new growth area for Samsung.
While the mobile phone division has replaced Samsung's semiconductor business as the biggest profit generator, robust demand for smartphones around the world is benefiting Samsung's semiconductor operation as well. The company is the world's largest supplier of TVs and memory chips.
Analysts said Samsung's semiconductor division fared better in the last quarter than the quarter before as higher Samsung phone sales and launches of new mobile products by its customers lifted demand for Samsung's mobile processors.
In the first quarter of this year, market watchers said the strengthening of the South Korean currency against the U.S. dollar and the Japanese yen could hurt Samsung's component businesses, which is facing seasonally weak demand for TVs and display panels. But others predict Samsung will ship more smartphones than the previous quarter, which could outweigh lower TV and panel sales.
The South Korean company has been in global legal battles with Apple, one of its biggest clients, for nearly two years. Last month, Samsung dropped its bid to seek a sales ban against Apple's mobile products in Europe, saying it would like to protect consumer choice. Samsung, which is under investigations by the European Commission over its practice of licensing key mobile patents, is maintaining its lawsuits against the iPhone maker in other countries.
Shares of Samsung Electronics fell 1 percent in Seoul after earnings release. Samsung's shares, which gained 11 percent in the fourth quarter, hit a record high level earlier this month.
If Samsung's fourth quarter results are in line with Tuesday's guidance, the company will report 29 trillion won ($27.3 billion) operating profit on revenue of 201.1 trillion won ($189 billion) for 2012.

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Asia stocks down ahead of US corporate earnings

 Asian stock markets headed lower Tuesday as investors turned cautious before U.S. earnings season kicks off this week.
Investors will get a feel for corporate America's outlook as earnings reports start coming. Aluminum producer Alcoa Inc. will unofficially launch the reporting season for the fourth quarter of 2012 on Tuesday after U.S. markets close.
Events during the quarter such as Superstorm Sandy, the presidential election, and worries about the narrowly avoided "fiscal cliff" could lead to some unexpected results.
Japan's Nikkei 225 index tumbled 1.1 percent to 10,477.14 as the yen crept upward against the U.S. dollar. The rebound in the yen led some investors to sell export shares that had surged as the currency weakened in recent weeks. Toyota Motor Corp. fell 2.3 percent while Mazda Motor Corp. plunged 5 percent. Nintendo Co. shed 3 percent.
Hong Kong's Hang Seng fell 0.5 percent to 23,223.12. South Korea's Kospi lost 0.6 percent to 1,999.92. Benchmarks in Singapore, Taiwan and Thailand fell, while Indonesia and the Philippines rose. Mainland Chinese shares were mixed.
Australia's S&P/ASX 200 shed 0.6 percent to 4,690.80. That came as the government announced the country's trade deficit widened in November and a report by the Australian Industry Group and the Housing Industry Association showed the country's construction industry slowing for the 31st consecutive month.
"Investors are taking a wait-and-see attitude," said Evan Lucas, strategist at IG Markets in Melbourne, adding that many investors went for profits ahead of the release Wednesday of weekly jobless claims in the U.S. and the European Central Bank's rate-setting meeting Thursday.
"A lot of eyes are watching what will happen in Europe and America over the next couple of days," he said. Another closely watched development will be the Bank of England's monthly announcement on its key interest rate, due Thursday.
Major indexes surged last week after U.S. lawmakers passed a bill to avoid a combination of government spending cuts and tax increases that have come to be known as the fiscal cliff. The deal, however, remains incomplete. Politicians will face another deadline in two months to agree on more spending cuts.
"The looming budget battle in the US has also prompted some hesitancy to buy risk assets," said analysts at Credit Agricole CIB in Hong Kong.
Stocks in the U.S. closed down Monday from the five-year high it reached last week as investors shifted their focus to corporate profits. The Dow Jones industrial average fell 0.4 percent to 13,384.29. The Standard & Poor's 500 index fell 0.3 percent to 1,461.89. The Nasdaq composite index fell less than 0.1 percent to 3,098.81.
Benchmark crude oil contract for February delivery was up 1 cent to $93.20 per barrel in electronic trading on the New York Mercantile Exchange. The contract rose 10 cents to close at $93.19 a barrel on the Nymex on Monday.
In currencies, the euro rose to $1.3122 from $1.3112 in New York late Monday. The dollar fell to 87.44 yen from 87.84 yen.

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Eli Lilly banks on cost controls for higher 2013 profit

(Reuters) - Eli Lilly and Co said on Friday it expects profit in 2013 to increase by more than Wall Street had been forecasting, primarily due to cost controls and improved productivity.
Lilly, whose shares were up nearly 4 percent on Friday, said 2013 sales will be flat to a bit higher, despite the loss of patent on its $5 billion-a-year antidepressant, Cymbalta, in December.
The Indianapolis-based drugmaker is coming off a particularly difficult 2012 when sales declined sharply because of competition from cheaper generics.
It expects 2013 earnings to increase to $3.75 to $3.90 per share excluding items, from a forecast of $3.30 to $3.40 per share in 2012. In 2011, its adjusted earnings were $4.41 per share.
Analysts on average forecast earnings of $3.71 for 2013 and $3.36 per share for 2012, according to Thomson Reuters I/B/E/S.
"Overall, it was better than anyone expected," said Barclays Capital analyst Tony Butler. "From an earnings perspective, no one believed that operating expenses would be kept in check."
Morningstar analyst Damien Conover said, "They're cutting costs at a pace that's maybe a little quicker than people were anticipating, and that was one of the reasons for the outperformance in their guidance."
The company said 2013 net profit would benefit from a tax credit that had been pushed into this year because of the late signing of the American Taxpayer Relief Act of 2012 - the legislation that prevented the so-called fiscal cliff.
The company said it is not sure yet of the amount of the tax credit, which is related to research and development accounting, and said it would provide more information during its January 29 earnings conference call. Lilly said it excluded the impact from all of its financial guidance.
Similar uncertainty could face other drugmakers, as well as other corporate sectors with extensive research budgets, such as technology and defense. However, "It could be resolved by the time everybody else reports," Butler said of the pharmaceutical industry. "We've got another three weeks before anyone reports."
Lilly said the adjusted earnings forecast also excludes payment and income for revenue sharing with Bristol-Myers Squibb Co's Amylin unit on Byetta, a diabetes drug, and restructuring charges. Lilly severed ties with Amylin when it agreed to collaborate with Boehringer Ingelheim on diabetes drug development.
HELP ON THE WAY
Lilly forecast 2013 revenue of $22.6 billion to $23.4 billion, driven by sales of its drugs for diabetes, osteoporosis, cancer, erectile dysfunction and animal health. The company said it also expects significant revenue growth from Japan and emerging markets, such as China.
Analysts are looking for 2013 revenue of $22.82 billion.
While Cymbalta is not expected to start facing generic competition until the end of the year, the company cautioned that sales declines could begin sooner if wholesalers start to reduce inventory supplies prior to the patent expiration.
As a result, it said, the fourth quarter could look significantly different than the first three.
Lilly has already been battered by generic competition for its once top-selling schizophrenia drug, Zyprexa, and will face generic competition for its $1 billion-a-year Evista osteoporosis drug in early 2014.
But help is on the way. Lilly said it now has 13 drugs in late-stage testing, the most at any one time in its history. It could seek approvals this year for drugs for Type 1 and Type 2 diabetes, gastric cancer and for a type of lymphoma.
Chief Financial Officer Derica Rice told analysts on a conference call that the company was firmly focused on replenishing the developmental pipeline. "This is our future and it's our first priority."
The company also vowed to maintain its dividend payout and complete its share repurchase plan.
"Lilly has financially done a really good job. Obviously, you need the pipeline to come through," said Barclay's Butler, adding that positive late-stage data on ramucirumab in breast cancer could signal an important new product for Lilly. The drug is also in late-stage testing for the smaller gastric cancer market.
Other key events for Lilly in 2013 include the start of a new Phase III trial of solanezumab in patients with mild Alzheimer's disease after an earlier study failed but showed some signs of hope for the memory-robbing condition, and an August trial challenging a method of use patent on the $3 billion-a-year lung cancer drug Alimta.
Should Lilly prevail in court, the company could have patent protection on the medicine into 2022 even though the basic patent lapses in 2016.
Asked if the company would consider settling the case before it comes to trial, Phil Johnson, Lilly's vice president for investor relations, said: "Nothing is off the table, but we have not historically entered into those kinds of agreements."
Eli Lilly shares were up 3.8 percent at $51.60 on Friday afternoon on the New York Stock Exchange.

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Lilly 2013 profit forecast tops expectations

INDIANAPOLIS (AP) — Eli Lilly and Co. unveiled a better-than-expected 2013 earnings forecast Friday, in part because the pharmaceutical company expects growth from several established drugs to help make up for revenue lost to generic competition.
The Indianapolis drug developer saw sales for its all-time best-selling drug, the antipsychotics Zyprexa, crater in 2012 after it lost U.S. patent protection. Lilly will take another hit next December when it loses patent protection for its current top seller, the antidepressant Cymbalta.
But company executives told analysts Friday they still expect Cymbalta and another product that loses patent protection in 2013, the insulin Humalog, to help drive revenue growth along with products like the cancer treatment Alimta and the erectile dysfunction drug Cialis.
Lilly also expects more growth from Japan, developing countries and its animal health business.
All told, the drugmaker forecast 2013 adjusted earnings of between $3.75 and $3.90 per share on $22.6 billion to $23.4 billion in revenue.
That topped analyst expectations, on average, for per-share earnings of $3.72, according to FactSet. Analysts also expected $22.87 billion in revenue.
Company shares climbed $1.84, or 3.7 percent, to close at $51.56 Friday, while broader indexes rose less than 1 percent.
Lilly said it expects operating expenses will be flat or drop slightly compared with 2012, and that was slightly better than what Edward Jones analyst Judson Clark expected.
He called Lilly's 2013 forecast "a pleasant surprise," but he also noted that plenty of long-term concerns remain. Lilly won't feel the brunt of the Cymbalta patent loss until 2014, and Clark expects the company's earnings to shrink then. What remains to be seen, he said, is whether the drugmaker is willing to preserve its dividend and cut expenses enough to tame that loss.
"We think the real question marks are in 2014," he said.
Lilly also expects to counter the patent expirations by developing new drugs, and the company said Friday it has 13 experimental drugs in late-stage testing, the last phase before a company seeks regulatory approval.
Lilly reiterated on Friday that it expects at least $3 billion in net income and revenue of at least $20 billion through 2014. It also expects to keep paying its dividend and to buy back $1.5 billion in shares this year.
Zyprexa once brought in more than $5 billion in annual revenue for Lilly, but its sales sank 66 percent through the first nine months of 2012 after generic competition entered the market. The company expects revenue from Cymbalta, which topped $4 billion in 2011, to start falling in this year's fourth quarter.
Humalog, Lilly's best-selling insulin, brought in about $1.4 billion in U.S. revenue in 2011. That product may take less of a sales hit after it loses U.S. patent protection in May because it's a biologic drug made from living cells instead of a chemical formula. Those are harder for generic drugmakers to replicate.
Lilly should not expect to replace blockbuster drug revenue with another round of blockbusters, said WBB Securities analyst Steve Brozak. He said the company's success will depend on a combination of drug development, partnerships with other companies and acquisitions that help stoke its product pipeline.
But that approach will be difficult because other drugmakers also are facing patent expirations and will be competing with Lilly on those deals.
"If (Lilly executives) think that business as usual applies, their shareholders are going to vote with their sell orders," he said.

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"Cliff" concerns give way to earnings focus

NEW YORK (Reuters) - Investors' "fiscal cliff" worries are likely to give way to more fundamental concerns, like earnings, as fourth-quarter reports get under way next week.
Financial results, which begin after the market closes on Tuesday with aluminum company Alcoa , are expected to be only slightly better than the third-quarter's lackluster results. As a warning sign, analyst current estimates are down sharply from what they were in October.
That could set stocks up for more volatility following a week of sharp gains that put the Standard & Poor's 500 index <.spx> on Friday at the highest close since December 31, 2007. The index also registered its biggest weekly percentage gain in more than a year.
Based on a Reuters analysis, Europe ranks among the chief concerns cited by companies that warned on fourth-quarter results. Uncertainty about the region and its weak economic outlook were cited by more than half of the 25 largest S&P 500 companies that issued warnings.
In the most recent earnings conference calls, macroeconomic worries were cited by 10 companies while the U.S. "fiscal cliff" was cited by at least nine as reasons for their earnings warnings.
"The number of things that could go wrong isn't so high, but the magnitude of how wrong they could go is what's worrisome," said Kurt Winters, senior portfolio manager for Whitebox Mutual Funds in Minneapolis.
Negative-to-positive guidance by S&P 500 companies for the fourth quarter was 3.6 to 1, the second worst since the third quarter of 2001, according to Thomson Reuters data.
U.S. lawmakers narrowly averted the "fiscal cliff" by coming to a last-minute agreement on a bill to avoid steep tax hikes this weeks -- driving the rally in stocks -- but the battle over further spending cuts is expected to resume in two months.
Investors also have seen a revival of worries about Europe's sovereign debt problems, with Moody's in November downgrading France's credit rating and debt crises looming for Spain and other countries.
"You have a recession in Europe as a base case. Europe is still the biggest trading partner with a lot of U.S. companies, and it's still a big chunk of global capital spending," said Adam Parker, chief U.S. equity strategist at Morgan Stanley in New York.
Among companies citing worries about Europe was eBay , whose chief financial officer, Bob Swan, spoke of "macro pressures from Europe" in the company's October earnings conference call.
REVENUE WORRIES
One of the biggest worries voiced about earnings has been whether companies will be able to continue to boost profit growth despite relatively weak revenue growth.
S&P 500 revenue fell 0.8 percent in the third quarter for the first decline since the third quarter of 2009, Thomson Reuters data showed. Earnings growth for the quarter was a paltry 0.1 percent after briefly dipping into negative territory.
On top of that, just 40 percent of S&P 500 companies beat revenue expectations in the third quarter, while 64.2 percent beat earnings estimates, the Thomson Reuters data showed.
For the fourth quarter, estimates are slightly better but are well off estimates for the quarter from just a few months earlier. S&P 500 earnings are expected to have risen 2.8 percent while revenue is expected to have gone up 1.9 percent.
Back in October, earnings growth for the fourth quarter was forecast up 9.9 percent.
In spite of the cautious outlooks, some analysts still see a good chance for earnings beats this reporting period.
"The thinking is you need top line growth for earnings to continue to expand, and we've seen the market defy that," said Mike Jackson, founder of Denver-based investment firm T3 Equity Labs.
Based on his analysis, energy, industrials and consumer discretionary are the S&P sectors most likely to beat earnings expectations in the upcoming season, while consumer staples, materials and utilities are the least likely to beat, Jackson said.
Sounding a positive note on Friday, drugmaker Eli Lilly and Co said it expects profit in 2013 to increase by more than Wall Street had been forecasting, primarily due to cost controls and improved productivity.

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Lending to businesses still weak in Europe

FRANKFURT, Germany (AP) — Bank loans to companies fell again in Europe, another sign that the economy remains slack in the 17 European Union countries that use the euro.
The European Central Bank said Thursday that loans to non-financial corporations fell by 1.4 percent in November from the year before.
It's a sign that businesses remain reluctant to take on risk and borrow, despite the ECB's record low benchmark interest rate of 0.75 percent. The ECB expects the eurozone economy to shrink 0.3 percent in 2013 and only start to recover in the later part of the year.
Howard Archer, an analyst at IHS Global Insight, said the figures indicate "households and firms are reluctant to take on new debt amid weak economic activity levels and still appreciable uncertainty regarding the economic outlook."

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German jobless rate up to 6.7 percent

Germany's unemployment rate crept up to 6.7 percent in December due to seasonal factors and a more sluggish economy, but the labor market remained robust and the average number of people out of work last year was the lowest in more than two decades.
The unadjusted jobless rate rose from 6.5 percent in November, the Federal Labor Agency said Thursday. Some 2.84 million people were registered unemployed in Germany, Europe's biggest economy — 80,000 more than the previous month and 60,000 higher than a year earlier.
Germany's economy has enjoyed robust growth that kept down unemployment even as many debt-troubled European partners have seen output shrink and joblessness soar — to about 25 percent in the cases of Spain and Greece.
Still, the economy saw slower growth in 2012 than in previous years. Official growth figures for 2012 are due on Jan. 15; the government has forecast growth of 0.8 percent.
Excluding seasonal factors such as the Christmas holidays, Germany's unemployment rate was static at 6.9 percent in December, while the number of jobless was a modest 3,000 higher than the previous month.
Germany's labor market remains healthier than that of most other European countries, but "ramifications of the eurozone debt crisis ... have at least halted any further improvement for the time being," said Timo Klein, an economist at IHS Global Insight in Frankfurt.
Still, he noted that the upturn in unemployment figures "remains extremely subdued" and in fact slowed in the final months of 2012. German business confidence has rebounded lately, and Klein said he doesn't expect "any major deterioration with large increases in joblessness during the coming months."
The labor agency said that the number of people out of work averaged just under 2.9 million last year — 79,000 lower than in 2011 and the lowest figure since 1991, shortly after German reunification. The average unadjusted unemployment rate was 6.8 percent, down from 7.1 percent the previous year.

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Japan's finance minister in Myanmar with development pledges

NAYPYITAW, Myanmar (Reuters) - Japan's new government confirmed its support for the emerging democracy in Myanmar on Thursday when Finance Minister Taro Aso visited the country to reaffirm Japan's intention to cancel debt and help develop a big industrial zone.
Myanmar has implemented rapid economic and political reforms since President Thein Sein's quasi-civilian government took over from a long-ruling military junta in March 2011 and Japan has moved quickly to cement business ties.
Aso, also deputy prime minister, had already arranged the visit, prior to his ministerial appointment after an election last month, in his capacity as a senior member of the Japan-Myanmar Association, a lobby group set up to advance Japanese business interests in the Southeast Asian country.
"Following the change of government in Japan, just like the previous government, we want to maintain a good relationship with Myanmar," Aso told reporters after meeting the president at his palace in the new capital, Naypyitaw.
Senior members of the association with established ties to the former junta have been central to securing a debt waiver and fresh loans for the Thilawa industrial zone.
Thein Sein told Aso his government was delighted a "long-standing and sincere friend of Myanmar" has taken key posts in the cabinet.
Aso reaffirmed Japan's intention to waive part of the 500 billion yen ($5.74 billion) Myanmar owes it in debt.
About 300 billion yen would be waived in two stages in 2013 while a consortium of private Japanese banks led by Mitsubishi UFJ Financial Group was working on a bridging loan for the remaining 200 billion, sources familiar with the matter said.
On top of these pledges, Japan's government-linked Bank for International Cooperation will provide a $900 million bridge loan to clear Myanmar's debt arrears with the World Bank and the Asian Development Bank in January, allowing them to restart lending.
Myanmar owes nearly $400 million to the Washington-based World Bank and almost $500 million to the Manila-based ADB.
STRATEGIC INVESTMENT
Japan is Myanmar's largest creditor and the arrears of 300 billion yen had to be cleared before a fresh 50 billion yen loan could be given to develop the planned 2,400-hectare (5,930-acre) Thilawa special economic zone, renovate the country's ailing power plants and develop its regions.
With a land mass as large as Britain and France combined, Myanmar lies in a strategic location, sharing borders with 40 percent of the world's population in India, China, Bangladesh and Thailand.
Thilawa has grown into a flagship project for both Japan and Myanmar and could become a magnet for Japanese manufacturers that have started rethinking investment plans in China after a flare-up in a territorial dispute between Tokyo and Beijing.
A chunk of the 50 billion yen loan, which Japan hopes to implement by the end of March, is likely to mark the first tranche of its lending for infrastructure in Thilawa, which is to be developed by Japanese construction companies.
Over several years Tokyo's lending may add up to $12.6 billion, according to officials familiar with the project.
Mitsubishi Corp., Marubeni Corp. and Sumitomo Corp. form the Japanese side of the joint venture developing the industrial park. The plan is to build the first 400 hectares of the park by 2015 and start luring Japanese and global manufacturers.
Aso will visit Thilawa on Friday.
This is the first overseas trip by a member of the Japanese government that took office last month. Prime Minister Shinzo Abe plans to visit Washington around the end of January. ($1 = 87.1700 yen)

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Uganda holds key rate with eye on growth, inflation

KAMPALA (Reuters) - Uganda's central bank held interest rates on Thursday, treading a path between managing inflation and supporting an economic upturn it said would likely lead it to cut borrowing costs in the coming year.
With the country's currency under pressure, traders and analysts had mostly expected the Central Bank of Uganda to leave the key lending rate at 12 percent - ending a run of growth-boosting cuts that began last June when the base rate was 21 percent.
The bank said leaving rates unchanged would allow it to encourage economic growth while keeping inflation - which ticked up in December - around its medium-term target of 5 percent.
The bank also said the economy had grown faster than projected since the first quarter of 2012.
The Ugandan shilling weakened slightly after the rate announcement, falling 0.1 percent to 2697/2707 per dollar, a day after the central bank intervened to prop it up after it fell to a five-week low against the dollar.
Annual inflation rose last month to 5.5 percent from 4.9 percent in November, which the bank said was due to seasonal demand.
The bank's policy stance was "accommodative and supportive of economic growth as well as anchoring inflation expectations around the medium-term target," its acting deputy governor Justine Bagyenda told a news conference.
It had cut rates by 50 basis points in early December, citing sluggish economic growth.
Bagyenda said on Thursday that annualised economic growth in the last three quarters of 2012 had, at 5.2 percent, been "much higher than previously projected".
However, private sector credit growth remained subdued partly on account of the high lending rates on shilling loans, he said.
With rates of economic and credit growth likely to pick up later in 2013, "I expect a further reduction in lending rates," he added.
Analysts also saw room for further easing, and said the decision to hold rates this time was not surprising.
"The decision was in line with our expectations," said Mark Bohlund, a senior economist for IHS Global Insight.
"We still see potential for further monetary easing in the first half of 2013 as we are forecasting inflation to dip again amid sluggish domestic demand and limited pressure from food and energy prices."

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Botswana GDP growth at 1.1 pct q/q in Q3 2012

JOHANNESBURG (Reuters) - Botswana's economy grew by 1.1 percent quarter-on-quarter in the third quarter of 2012 after rising by a revised 0.3 percent in the second quarter, data from the Central Statistics Office showed on Thursday.
On a year-on-year basis growth was at 5.7 percent in the third quarter compared with a revised 8.5 percent in the previous quarter.

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China academics warn of "violent revolution" if no political reform

A prominent group of Chinese academics has warned in a bold open letter that the country risks "violent revolution" if the government does not respond to public pressure and allow long-stalled political reforms.
The 73 scholars, including well-known current and retired legal experts at top universities and lawyers, said political reform had not matched the quick pace of economic expansion.
"If reforms to the system urgently needed by Chinese society keep being frustrated and stagnate without progress, then official corruption and dissatisfaction in society will boil up to a crisis point and China will once again miss the opportunity for peaceful reform, and slip into the turbulence and chaos of violent revolution," they wrote.
The letter began being circulated on the Internet earlier this month, but online references to it in Chinese media reports have now been removed.
The government, which since 1949 has been controlled by the Communist Party, needed to push democracy and independence of the judiciary as well as deepen market reforms, the letter said.
He Weifang, a law professor at Peking University and one of the signatories, told Reuters he believed the demands were rather moderate, but that now was the time to make them as President Hu Jintao prepared to hand over the reins of state power to Xi Jinping, who was made party chief in November.
"We have come to that period again when the leadership is changing. People expect continuing advances when it comes to reform of the political system," he said.
"The Chinese people, including intellectuals, have been talking about this for a while, but little has happened. So I think we have the opportunity now to push it again."
Other signatories include Zhang Sizhi, defense lawyer for Mao Zedong's widow, Jiang Qing, leader of the "Gang of Four" that wielded supreme power during the 1966-76 Cultural Revolution. She was given a suspended death sentence in 1981 for the deaths of tens of thousands during that period of chaos.
About 65 Chinese academics, lawyers and human rights activists have signed a similar letter demanding top party members reveal their financial assets, saying it is the most fundamental way to end corruption.
Analysts have been searching for signs that China's new leaders might steer a path of political reform, whether by allowing freer expression on the Internet, greater experimentation with grassroots democracy or releasing jailed dissidents.
But the party, which brooks no dissent to its rule and values stability above all else, has so far shown little sign of wanting to go down this path, despite Xi trying to project a softer and more open image than his predecessor.
However, Xi himself warned shortly after becoming party boss that if corruption were allowed to run wild, the party risked major unrest and the collapse of its rule.
The letter said democracy, rule of law and respect of human rights were "a global trend that could not be stopped".
"China's 100 years of bloody and violent history - especially the painful and tragic lesson of the decade-long Cultural Revolution - show that once we go against the tide of democracy, human rights, rule of law and constitutional government, the people will suffer disaster and social and political stability will be impossible," the letter said.

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Gold ticks higher; on track for 12th annual gain

 Gold ticked up to around $1,660 an ounce on Monday after the euro firmed against the dollar, but wary investors stayed on the sidelines as last-ditch attempts by U.S. lawmakers to resolve a fiscal crisis seemed to be getting nowhere.
Lawmakers pushed the United States to the edge of the "fiscal cliff" as they struggled to reach a last-minute deal that could prevent the world's largest economy from plunging into recession. After adjourning for the day, the Senate will reconvene at 1600 GMT on Monday.
"Maybe a bit of cooling off is good. Well, they have a few hours to sort themselves," said CIMB regional economist Song Seng Wun. "I think Asian equities are probably, at this moment, positioning themselves for a possibility that there may not a be last minute compromise of sorts."
Gold added $5.12 an ounce to $1,660.02 by 0310 GMT. It is up around 6 percent for the year, heading for a 12th straight year of gains on rock-bottom interest rates, concerns over the financial stability of the euro zone, and diversification into bullion by central banks.
A failure to clinch a deal would likely spur safe-haven buying of gold, but since many investors have both equities and gold in their portfolios, the metal may also track stock markets higher if the White House and Congress finally reach an agreement.
U.S. gold for February rose $5.20 an ounce to $1,661.10.
Market holidays were in force in Japan, South Korea, Taiwan, Indonesia, Thailand, the Philippines and Vietnam, with half-day trading in Australia, New Zealand, Hong Kong and Singapore.
MSCI's broadest index of Asia-Pacific shares outside Japan was little changed. It has gained about 18 percent this year, a sharp turnaround from an 18 percent plunge in 2011.
"I have nothing to share today. I guess the market in the Middle East will still be trading a little bit. But that's a about it," said a physical gold dealer in Singapore.
"Premiums are unchanged at $1 to $1.20."
Spot gold drew support from the euro that edged up 0.1 percent to $1.3231, but hovered below an 8-month high of $1.33085 hit on December 19.
An agreement on the U.S. budget would be viewed as a positive for riskier currencies such as the euro and Australian dollar, while a deadlock would be deemed positive for the safe-haven and highly liquid dollar.
A softer dollar boosts commodities priced in the greenback by making them cheaper for holders of other currencies.
"There's nothing at all in Asia. It's very quiet. We don't expect surprises until the talks resume," said a dealer in Singapore.
Buoyed by his re-election in November, President Barack Obama has insisted that any deal must include a tax increase on the wealthiest Americans, who have seen their earnings rise steadily over the past decade at a time when income for the less affluent has stalled.

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Zambia extends deadline for new bank capital rules

Zambia's central bank has extended a deadline for commercial banks to meet new minimum capital requirements by a year to December 31, 2013, saying it was satisfied with progress made so far.
Zambia raised its capital requirements for foreign banks to $100 million from $2 million this year to insulate its banking sector from the effects of a weak global economy.
The capital requirement for local banks was raised to $20 million from $2 million.
The central bank said on Monday most banks had requested an extension of the deadline. "All banks that requested for dispensation against the initial December 31, 2012 deadline have been granted permission in this regards," it said.
"The extension is intended to enable banks to mobilise additional capital to meet the legal and administrative requirements associated with the new shareholding structures."
Nigerian group United Bank of Africa said in July it would turn its Zambian operation into a local bank and might issue shares to meet new capital rules in Africa's top copper producer..
Foreign banks operating in Zambia include Standard Bank and Standard Chartered Bank.

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S.Africa stocks up 22 pct in 2012 on retail surge

 South African stocks ended the year near record highs on Monday, after a 22 percent surge that marks their best annual return since 2009, lifted by a runaway performance from the booming retailing industry.
Equities in Africa's biggest economy have confounded market watchers this year, as shares largely shrugged off lacklustre economic growth and three months of crippling strikes in the crucial mining sector that sparked credit downgrades.
"It surprised everybody. If you look back at the consensus forecasts, even the optimists were not even close," said Abri du Plessis, chief investment officer at Gryphon Asset Management in Cape Town.
"Our market is running ahead and it is already discounting the commodities cycle picking up again, and I still cannot see that with what's happening in Europe... For that reason, I'm a bit negative on our market in the first half."
The benchmark Top-40 index finished the half day of trade down 0.39 percent at 34,795.50, just off its record high hit last week and up 22.22 percent for the year.
That was the Top-40's best annual performance since 2009, when it rose nearly 29 percent.
The broader All-share index finished the session 0.34 percent lower at 39,250.24, also near a record high and up 22.71 percent for the year.
Shares of Assore surged 94 percent in 2012, making the base mineral mining company the top performer on the blue-chip index.
Retailers have been the real standout in Johannesburg this year, lifted by optimism that government grants to the poor and the growth of a middle class will translate into stronger consumer spending.
SUB-SAHARAN EXPANSION
Woolworths, a clothing and high-end food retailer that is expanding its sub-Saharan presence beyond South Africa, rose 82 percent in 2012.
Mr Price, which targets money-conscious consumers, gained 76 percent, while grocer Shoprite gained 51 percent.
Some investors have cautioned that retailers were now too expensive after this year's steep gains. Eight of South Africa's largest retailers were trading at an average price-to-earnings ratio of 21, well above the average of 14 for the Top-40.
Like other emerging markets, South Africa was helped this year by global monetary stimulus that increased demand for riskier assets.
"It's the emerging markets story again. As global sentiment started to ease and got a bit more positive... emerging markets are one of the first that investors pick," du Plessis said.
In local currency terms, South Africa was the tenth best performer among 31 emerging stock markets tracked by Thomson Reuters.
The best performing emerging market this year was Venezuela, where the benchmark index has quadrupled in value.
In dollar terms, however, the Top-40 managed a more modest 16 percent return, putting South Africa in 18th place among the emerging market indices.
The rand currency has been hit this year by concerns about the outlook for Africa's top economy, which is saddled with high unemployment, slow growth and labour unrest.
Ratings agencies Moody's and Standard & Poor's have both downgraded South Africa's credit rating this year. Analysts expect Fitch will cut its rating at its next annual review in January.

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China to keep prudent monetary policy in 2013: central bank

 China will stick to a prudent monetary policy next year and keep consumer prices stable, its outgoing central bank governor, Zhou Xiaochuan, said on Monday, in fresh sign that Beijing won't be changing direction when the new government takes over in 2013.
Reiterating China's long-stated vow to reduce the level of central planning in its economy and make room for more market forces, Zhou also said China will deepen reforms in its financial sector in 2013.
"In 2013, we will continue to implement prudent monetary policy and make policies more pre-emptive, targeted and flexible," Zhou said in a brief new year address.
"We will keep overall price levels basically stable and promote healthy and sustainable growth of the economy," he said. "We will also further deepen financial reforms and the opening up of financial markets."
Zhou's remarks follows similar comments from China's soon-to-be-retired president, Hu Jintao, who promised that reform of China's economic growth model would be a crucial theme next year.
Hu said in a separate new year address broadcast nationally that China's economy will grow at a balanced and sustainable pace in 2013, whilst noting the challenge from sluggish growth for the world economy.
"Transforming the economic growth model will be a main theme," Hu said, without giving further details. "The trend of weak global economic growth will continue."
China's leaders have repeatedly promised to encourage domestic consumption and reduce the nation's heavy reliance on exports for growth, a task that has become more pressing due to expectations of prolonged weak demand in developed nations.
Most analysts and academics agree China needs to transform its growth model to allow consumption, not exports and investment, to drive activity.
But there is no clear agreement on how or when China can pursue such changes.
Zhou, who has been head of the central bank since 2003, is set to retire in coming months.
Hu will relinquish office March 5 when China starts its annual parliament meeting, to make room for his successor Xi Jinping.

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Japan's policy veteran Motegi likely to serve as trade minister: media

 Incoming Japan Prime Minister Shinzo Abe is likely to pick policy veteran Toshimitsu Motegi as trade minister, who will also take charge of energy and other key economic policies, media reported on Tuesday.
Motegi, 57, a former policy affairs chief for the Liberal Democratic Party (LDP), will tackle energy problems after last year's Fukushima nuclear crisis, as well as issues such as the U.S.-led Trans-Pacific Partnership (TPP) free trade pact, public broadcaster NHK said.
Motegi was a leading member of the LDP's panel tasked with drafting an economic revival plan aimed at tackling the strong yen, deflation and preventing Japanese firms from shifting overseas.
The LDP returned to power in the December 16 election for the lower house, calling for radical monetary easing and big spending on public works.
First elected to parliament in 1993 as a member of a small opposition party, Motegi joined the LDP shortly thereafter and has served posts including parliamentary vice-minister for the trade ministry and senior vice-minister for foreign affairs.
Motegi's formal appointment is likely to be made on December 26, when Abe is expected to be elected as prime minister in parliament and form a new cabinet.

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