Archive for December, 2009

Freddie Mac sees rates headed to 6 percent by end of 2010 (Reuters)

Friday, December 25th, 2009 | Finance News

WASHINGTON (Reuters) –
After hitting an all-time low in early December, the average rate on a 30-year, fixed-rate mortgage rose to 5.05 percent this week and could climb to 6 percent by the end of 2010, the Washington Post reported on Saturday, citing U.S. mortgage financier Freddie Mac's latest survey.

The results are noteworthy because rates have not topped 5 percent since the last week of October, when they reached 5.03 percent, based on the results of this survey, which polls lenders during the first three days of every week, the newspaper said.

Amy Crews Cutts, deputy chief economist at Freddie Mac, told the newspaper that interest rates were bound to rise to 6 percent by the end of 2010 because private buyers would demand a higher rate of return on the securities than did the Federal Reserve, the U.S. central bank. Lenders may have to raise the rates they charge to consumers in order to make that happen.

"Extraordinary resources have been put into keeping the rates down and supporting the mortgage markets and it's hard to imagine that the rates can go much lower than they are," Crews Cutts said. "Anything we get at or below 5 percent is a gift at this point."

(Reporting by Jim Wolf; editing by Alan Elsner)


Toyota eyes 7.5 million global output for ’10: reports (Reuters)

Friday, December 25th, 2009 | Finance News

TOKYO (Reuters) –
Toyota Motor Corp expects a 17 percent increase in its 2010 global production, excluding units Daihatsu and Hino Motors, from this year to about 7.5 million units, Japanese media reported on Saturday.

The move comes as recovery signs of the economy emerge in Japan, the United States and Europe.

The figure is at a level similar to Toyota's output in 2005 and represents a decline of one million units from 2007, the Nikkei reported, adding the actual number for 2010 could top the projection because it does not take into account the impact from the government extending subsidies for environmentally friendly vehicles.

A Toyota spokesman said the company had informed its suppliers of its plans for production for next year, but the figure was still a rough estimate.

He added that Toyota would announce a finalized forecast as soon as it was compiled, most likely in January.

(Reporting by Chang-Ran Kim and Chikako Mogi; Editing by Jerry Norton)


South Korea’s Lee visits UAE; nuclear deal eyed (Reuters)

Friday, December 25th, 2009 | Finance News

SEOUL (Reuters) –
South Korean President Lee Myung-bak visits the United Arab Emirates on Saturday in a push to win one of the world's biggest nuclear power plant contracts.

The UAE is expected to award the contract estimated to be worth $40 billion to build several nuclear reactors "possibly early next week," industry sources have said.

A South Korean consortium of Korea Electric Power Corp. (KEPCO), Hyundai Engineering and Construction, Samsung C&T Corp, and Doosan Heavy Industries is in the running to win the largest-ever energy deal of the Middle East.

Other bidders include a consortium of General Electric Co (GE.N) and Westinghouse Electric, a subsidiary of Toshiba Corp (6502.T), and a French consortium led by EDF (EDF.PA) and GDF Suez (GSZ.PA) and including Areva (CEPFi.PA) and oil group Total (TOTF.PA).

Lee is scheduled to hold a summit meeting with UAE President Sheikh Khalifa bin Zayed al-Nahayan during his two-day visit, the South Korean presidential Blue House said in a statement.

"It remains unclear whether South Korea will win the final contract to build nuclear power plants and President Lee's visit to the UAE is part of summit diplomacy to win the final ticket in the bidding," Lee's office said.

The French consortium was initially seen as a front-runner for the deal but it recently appeared to be losing ground to the Korean.

On the Korea Exchange earlier this week, shares of Korea Power Engineering (052690.KS) and Doosan Heavy Industries rallied on expectations for the deal, analysts said.

IBK Securities analyst Yoon Jin-il said the contract is expected to be split in three stages with the initial order to be worth about $5 billion, but the first-phase winner is likely to take home the remaining two.

Work is expected to begin in 2012, UAE state news agency WAM said. The UAE is the world's third-largest oil exporter, but it is planning to build a number of nuclear reactors to meet an expected need for an additional 40,000 megawatts of power.

South Korea's commerce and energy ministry said on Monday that it would focus on the nuclear power sector in 2010 and step up work on a plan to develop nuclear reactors with indigenous technology, as it outlined next year's policy objectives.

(Reporting by Cho Mee-young and Jack Kim, additional reporting by Amena Bakr in Dubai and Jungyoun Park in Seoul; Editing by Jack Kim and Leslie Adler)