LONDON, Dec. 29--Global stock markets fell Friday as the murder of Pakistani opposition leader Benazir Bhutto reverberated around the world, while investors took profits before the year-end.
European equities sank, mirroring losses earlier in Asia and overnight on Wall Street, as Bhutto’s assassination, together with weak US economic data, sent nervous investors fleeing to safe haven investments, AFP reported.
Investor sentiment was subdued in Frankfurt on Friday, which was the final trading day of 2007. However, London and Paris to re-open next Monday for a shortened session before a public holiday on Tuesday, January 1, 2008.
Gold and oil prices were traded near one-month highs, with New York crude at $97 per barrel--very close to the symbolic 100-dollar mark.
“Bhutto’s death could raise the geopolitical tension which would sustain the rise in oil prices,“ said Prayoga Triyono, a fund manager at Henan Putirai Asset Management in Jakarta.
In Europe on Friday, London’s FTSE 100 index of leading shares slid 0.41 percent to 6,471.10 points, the Paris CAC 40 shed 0.42 percent to 5,603.87 and Frankfurt’s Dax slipped 0.36 percent to 8,009.41 points.
Tokyo closed down 1.65 percent Friday on the final session of 2007, capping a tough year that saw the benchmark Nikkei-225 index slump 11.1 percent as fears over a US housing slump and related credit crunch battered markets.
Elsewhere, Hong Kong market dropped 1.70 percent and Shanghai dipped 0.89 percent. Seoul ended 0.6 percent lower, Singapore shed 0.90 percent and Sydney slid 0.2 percent. Manila lost 1.3 percent and Wellington gave up 0.81 percent.
The Dow Jones Industrial Average closed down 192 points, or 1.4 percent, at 13,359.61 on Thursday as investors reacted nervously to Bhutto’s assassination.
The Karachi Stock Exchange is closed for three days as the nation observes a period of mourning for the slain politician.
In related news, Standard & Poor’s Ratings Services said Friday Pakistan’s sovereign credit ratings could be lowered “if the assassination of Benazir Bhutto precipitates heightened levels of violence and political turmoil“.
“The assassination in itself will not result in a rating action. However, a further weakening of Pakistan’s institutions, in conjunction with rising levels of violence and disorder, and the possible postponement of the Jan. 8 elections would lead to a rating downgrade,“ The ratings agency warned, MarketWatch wrote.

January
- Angola Joins OPEC
- Crude oil prices open the new year at $58.32
a barrel.
- Vietnam joins the World Trade Organization
as its 150th member.
- Microsoft releases Windows Vista and Office
2007
- Ford Motor Co. says it lost $12.7 billion in
2006, the worst loss in the company’s 103-
year history.

February
- Chinese President Hu Jintao signs a series of
economic deals with Sudan.
- Dow Jones industrial average drops 546
points, the worst drop since the 2001 terrorist
attacks.

April
- A panel of international scientists says mil
lions of poor people will suffer from hunger,
thirst, floods and disease unless drastic action
is taken against global warming.
-US government says economic growth
slowed to a near crawl of 1.3 percent in the
first quarter, the worst performance in four
years.

June
- The FDA warns that toothpaste made in China
may contain a poisonous chemical used in
antifreeze.

WASHINGTON,
Dec. 29--The dollar is losing ground as the currency of choice in the world’s foreign exchange reserves, the International Monetary Fund said Friday.
The dollar’s share of forex reserves was 63.8 percent in the third quarter, compared with 65.0 percent in the second quarter and 66.5 percent in the 2006 July-September period, the IMF said on its website.
By contrast, the 13-nation eurozone currency made up 26.4 percent of global forex reserves in the third quarter, compared with 25.5 percent in the second quarter and 24.4 percent a year ago, AFP wrote.
The trend is a fairly recent development. In the third quarter of 2005, the dollar’s share was 66.4 percent and that of the euro was 24.3 percent, similar to the 2006 third-quarter levels.
In recent months, several emerging-market countries, whose foreign currency reserves have ballooned as a result of such factors as high commodity prices and strong exports, have signaled their intention to further diversify their foreign exchange reserves to offset the US currency’s depreciation.
That was particularly the case with China, which has the world’s largest reserves, at $1.430 billion in September. Observers estimate the dollar comprises 70 percent of Chinese reserves, mainly in the form of US Treasury bonds.

FRANKFURT, Germany, Dec. 29--The European Central Bank said Friday it had removed a further 150 billion euros ($220 billion) from eurozone money markets through a new offer aimed at absorbing excess liquidity.
The offer had a fixed rate of 4.0 percent, the same level as the ECB’s benchmark lending rate. Fifty-two banks participated in the bidding operation, which is to come to maturity on Dec. 31. The ECB on Thursday absorbed 145.64 billion euros from the market in a similar operation, AFP reported.
The ECB over the last few days has been providing liquidity for periods of two weeks or longer while mopping up excess cash in the shorter term to ensure that interbank lending markets are amply supplied--but in a manner that does not fuel inflation.
The latest operation was aimed at absorbing liquidity that had built up in the market since the start of a crisis in August in the US subprime--or high-risk--mortgage sector.
The subprime meltdown, which has seen a wave of foreclosures, left major banks that held shaky mortgage-backed securities reluctant to lend money, raising the specter of a global credit crunch.
That stance in turn prompted central banks in Europe and elsewhere to inject huge sums of money into the market.
The ECB, for example, last week made a record 350 billion euros available at 4.21 percent, an especially attractive offer that was below the rate charged by banks themselves. The objective was to prompt a realignment in short-term bank rates that had crept up in previous weeks, bringing them closer to the eurozone’s minimum bid rate of 4.0 percent.

MOSCOW, Dec. 29--President Vladimir Putin on Thursday urged government ministers to fight inflation by making Russia’s agriculture sector competitive against foreign food imports.
“One of the key tasks for 2008 is to fight inflation. Unfortunately we have not been successful at keeping inflation within the parameters we set,“ Putin told an end-of-year government meeting in Moscow, AFP reported.
“It’s not just the fault of the Finance Ministry ... it’s also because of external economic factors. Food prices will remain high,“ he said. “We have to develop our own agriculture.... Our food products must be higher quality and cheaper“ than foreign imports, he added.
Russia’s agriculture sector collapsed after the fall of the Soviet Union and has continued to struggle since then. Russia imports food worth around five billion euros every year, officials said.
Inflation has risen sharply in 2007 and could reach 12 percent by the end of the year, far higher than an eight percent target set by the government and many Russians have complained about rising food prices in particular.
The deputy head of the Central Bank, Alexei Ulyukayev, said on the Vesti-24 channel that the bank would raise its estimate for inflation in 2008 by between one and two percent, Interfax news agency reported.
The bank’s earlier 2008 inflation target was between six and seven percent.

FRANKFURT, Germany,
Dec. 29--The insurance industry faced $75 billion in losses despite a lack of “mega-catastrophes“ in 2007, German reinsurer Munich Re was quoted by UPI as saying on Thursday.
There were no Hurricane Katrina, but there were 950 catastrophic natural disaster events, the most since 1974 when Munich Re began tracking such events, MarketWatch reported.
“The figures confirm our expectations and endorse our insistence that risks be consistently written at adequate prices, despite years with comparatively low losses as in 2006,“ Munich Re board member Torsten Jeworrek said in a statement.
The insurance industry had $50 billion in losses last year, compared to $550 billion in 2005 when the US Gulf Coast was devastated by two hurricanes.
The worst insurance catastrophes of 2006 were Cyclone Sidr, which killed 3,300 people in Bangladesh, the winter storm that caused $10 billion in damage in Europe and summer flooding in England that caused $8 billion in losses.
“We should not be misled by the absence of ’mega-catastrophes’ in 2007,“ Jeworrek said.

BAGHDAD, Iraq,
Dec. 29--Iraq plans to boost sales of Kirkuk oil by at least 100,000 barrels per day starting in January and is offering incentives to win back and retain customers, an Iraqi official said.
The plans come in the wake of more reliable flows via Iraq’s 966 km pipeline to Turkey, which has been idled by sabotage and technical problems for much of the time since the US-led invasion in March 2003, Reuters wrote.
“Kirkuk is coming back“, the official said. “The security situation has improved and we’re very hopeful we can sustain an average of 450,000 barrels per day for the foreseeable future.“
Previously, Iraq’s State Oil Marketing Organization (SOMO) had allocated about 300,000 bpd of Kirkuk crude in term deals starting Jan 1. It has been selling batches of the crude via competitive tenders since September.
Increased sales via Turkey have lifted Iraq’s oil exports to the highest in more than three years and enabled it to benefit from record-high oil prices.
It has also given Baghdad the confidence to offer Kirkuk in term contracts for the first time since 2004.
“Because of the higher-than-expected volume, we are now considering requests for more than 100,000 bpd of extra term contract volume,“ the official said. “The aim is to sell 400,000 bpd or maybe more.“ Shipments of Kirkuk by pipeline over the past 10 days have been sustained at 400,000 bpd to 500,000 bpd, he said. Immediately before the war in 2003, Iraq was exporting about 700,000 bpd of Kirkuk.
The volume in storage at Turkey’s port of Ceyhan is close to 6.5 million barrels and will reach about 8 million, close to total capacity, by the end of the year, the official said.
Some in the industry remain skeptical that Iraq will sustain a regular flow of Kirkuk crude. The previous post-war attempt proved short-lived due to renewed bombing of the pipeline.
Iraq is notifying customers now and aims to finalize the plan for sales of at least 400,000 bpd by the weekend, the oil official said.
“SOMO has a new strategy to market Kirkuk. We’re working on three fronts. We’re being very flexible.“ The plan includes an encouraging pricing formula for January, a one-off additional discount to boost sales and increasing the volume.

CHICAGO, USA,
Dec. 29--Boeing Co. said Thursday it finalized a deal with British Airways, notching 790 orders for its long-awaited 787 Dreamliner plane during the last three years.
British Airways’ order for 24 Dreamliners gives the plane one of the industry’s most successful launches ever--even though the airliner has yet to take flight, AP wrote.
The Chicago-based aerospace company expects to fly the first 787 around the end of the first quarter of 2008 and begin deliveries in late November or December. It expects to deliver 109 airplanes in 2009, AP wrote.
The 787, Boeing’s first newly designed jet since airlines started flying the 777 in 1995, will be the world’s first large commercial airplane made mostly of light, durable less-corrosive carbon-fiber composites. Boeing says its new plane will be cheaper to maintain and offer better fuel efficiency and more passenger comforts than planes flying today.
Analysts called the demand for the Boeing plane “unprecedented“.
“This is a breakneck pace,“ said Morningstar analyst Brian Nelson. “The fact that it continues to get orders and airlines continue to order this represents great confidence that Boeing can build this plane and deliver this plane.“
British Airways placed options for another 18 and purchase rights for an additional 10 787s.
The British Airways deal is worth $4.4 billion at list prices, though carriers usually negotiate deep discounts on sizable orders.
“This order is a vote of confidence from one of the world’s leading global network carriers in the 787’s unprecedented performance,“ said Marlin Dailey, vice president of Sales for Europe, Russia and Central Asia, Boeing Commercial Airplanes.
Meanwhile Thursday, Brazil’s GOL Linhas Aereas Inteligentes S.A. said it exercised firm orders for 34 Boeing 737-800 NGs, completing the purchase option for 121 aircraft negotiated in October 2006. The carrier said it signed a new contract for the acquisition of 40 additional aircraft for delivery in 2012-2014.

ABU DHABI, UAE, Dec. 29--The UAE sees no need at the moment to follow Saudi Arabia and Qatar and raise the reserve requirement for banks to tackle inflation, central bank governor Sultan Nasser Al-Suweidi said on Thursday.
“We don’t see any need at the present time to raise reserve requirements,“ Al-Suweidi said in response to a question after a speech to a bankers’ lunch, Reuters reported.
Saudi Arabia raised the reserve requirement in November for the first time in 27 years, and Qatar followed suit this month.
Persian Gulf countries are struggling to control surging inflation, without being able to raise interest rates--because most peg their currencies to the dollar, they have been obliged to cut rates in line with the US Federal Reserve.
Raising the reserve requirement reduces the amount banks can lend, so it can curb inflation.