Business news for Mon, 17 Dec 2007 & with word demand. 35 news.

Wheat prices surged above $10 a bushel for the first time ever Monday amid concerns that strong demand globally could result in a grain shortage in the United States next year - worsening food price inflation.

PETROCHINA Co, the nation's biggest oil company, will start expanding an ethylene plant in northeast China's Daqing at the end of this month to tap rising chemical demand. The annual capacity of the plant will be doubled to 1.2 million metric tons, the largest in the country, parent China National Petroleum Corp said in its online newsletter China Oil News yesterday. It didn't give an investment figure or the completion date for the project. China plans to more than triple the annual capacity of ethylene to 18.13 million tons by 2010, Bloomberg News reported. PetroChina will raise its ethylene capacity to seven million tons a year by 2010 from 2.63 million tons last year, Liu Jie, deputy chief economic adviser at the firm's chemicals and market unit, said on May 24.

HSBC Holdings Plc, Europe's biggest bank by value, aims to start three new funds on the Chinese mainland next year as it taps into the country's rising demand for investment products. "We will see a strong growth and I would be surprised if we didn't see at least US$2 billion of new funds flowing in," Rudolf Apenbrink, chief executive officer of HSBC Investments Hong Kong Ltd, said in an interview with Bloomberg News. HSBC already manages three funds worth US$1.5 billion on the mainland under the joint venture HSBC Jintrust Fund Management Co. It expects to receive regulatory approval for its fourth fund soon and will apply for the qualified domestic institutional investment, or QDII, quota in May, Apenbrink said. Financial companies, including banks, fund managers and insurers, invest abroad using QDII quotas. To cope with managing more funds, HSBC Jintrust plans to recruit as many as 20 new employees next year, Apenbrink said. The company has about 100 employees.

SHANGHAI stocks tumbled yesterday, led by banks and property developers. The Shanghai Composite Index, which covers yuan-denominated A shares and hard currency B shares, fell 2.62 percent to end at 4,876.76, the biggest drop in two weeks. It had reached an intraday high of 5,007.35. Turnover rose to 102.65 billion yuan (US$13.87 billion) from 82.82 billion yuan on Friday. Gainers outnumbered losers 450 to 362 while 88 stocks were unchanged. "A massive drop of big-caps, including lenders and property developers, has led the local stock market to a slump," said Chen Huiqin, an analyst with Huatai Securities Co. "However, the recent correction from a high of 6,100 to the current level, a 20 percent drop, would probably create some opportunities for both institutional and individual investors." Banking stocks dropped on concern a slowdown in the property market will drain demand for housing loans. China Merchants Bank Co, the nation's sixth-largest lender in

WHEAT rose above US$10 a bushel for the first time yesterday, leading other grains and oilseeds higher in a food price spiral that threatens global economic growth. Chicago wheat futures jumped as much as 30 US cents, or 3.1 percent, to US$10.09 as dry weather threatened crops in Argentina, renewing concern that the world's farmers may not be able to grow enough to meet rising demand for bread, pasta and livestock feed. Rice also advanced to a record, while soybeans reached the highest price in 34 years and corn reached a nine-month peak, said Bloomberg News. Rising prices of food and fuel are stoking inflation and making it more difficult for central bankers to lower interest rates. Kellogg Co, the largest United States cereal maker, General Mills Inc, Nissin Food Products Co and Kikkoman Corp are among companies that have raised prices. "We are seeing a broad-based increase in cost pressures," Brian Redican, senior economist at Macquarie Group Ltd, said from

CHINA Eastern Airlines Corp, the nation's third-largest carrier, said it is in talks to buy 40 Boeing Co 737 planes and has applied to the government for 40 Airbus SAS A320s to expand its fleet. The planned purchases may help expand the Shanghai-based carrier's fleet by 53 percent to 322 aircraft in 2010 from the current 210, Zhang Jing, a China Eastern spokeswoman, said yesterday, confirming a Reuters report. Singapore Airlines Ltd and parent Temasek Holdings Pte plan to buy a 24-percent stake in China Eastern for HK$7.16 billion (US$918 million), cutting the carrier's debt and easing its "most difficult" period, Chairman Li Fenghua said last week. The cash infusion may help the company pay for the planes to compete with Air China Ltd, according to Bloomberg News. "Carriers are queuing up to buy planes as demand grows," said Ma Ying, an analyst at Haitong Securities Co in Shanghai. "China Eastern's stake sale will enable it to afford the

BAIDU.COM has teamed up with Huawei Technologies and Intel to strengthen its servers and search technologies to expand its lead in the domestic market over rivals including Google, Nasdaq-listed Baidu said yesterday. Baidu announced it will build a joint lab with Huawei to explore "next-generation" online search and test 3G-related mobile phone services, just one month after Google launched mobile search services in China. "Baidu has to break the bottleneck of the server capacity as the demand for search surges in China," William Chang, Baidu's chief scientist, said. "Baidu has to triple its existing capacity to reach the global level of services." In the third quarter, China overtook the United States to become the world's largest search traffic, with 10 billion hits per month, Baidu said. Baidu has launched a series of new services, such as an Olympics channel, game channel, Baidu TV and online music streaming (partnered with Rock Music Group).

OVERALL demand for office space in Asia's major commercial centers remained robust over the past quarter, led by expanding local businesses and non-finance-related occupiers increasingly notable in many regional markets, a leading global real estate service provider has said. Supply of Grade A office space continued to be tight in the central business district areas of Hong Kong, Singapore and Ho Chi Minh City in Vietnam, with vacancy rates hovering at five percent or lower. The Philippines and Singapore led the entire Asian market, with rents jumping over 15 percent over the past quarter, according to a recently released analysis by CB Richard Ellis. Rents in major Chinese cities also remained buoyant in the three-month period. In Shanghai, average rent rose 2.7 percent from a quarter earlier to 20.9 yuan (US$2.84) per square foot per month. In particular, rents grew 2.6 percent to 20.4 yuan per square foot per month in Puxi and rents increased 3.3 percent to 22.3 yuan per

THE United States' refusal to comply with a World Trade Organization decision on online gambling is threatening to undermine the entire set of rules binding the international trade system. The WTO is to decide soon on a demand from the tropical nation of Antigua and Barbuda for US$3.4 billion in annual compensation from the US, whose law banning Americans from betting on Internet gaming sites was first ruled illegal by the WTO in 2004. The implications of the case go far beyond Antigua, a nation of 69,000. That's because, instead of rewriting its gambling laws, the US rewrote its trade rules to remove the issue from the WTO's jurisdiction. The prospect that other nations may take a similar tack if cases don't go their way has spooked the international trade community. "This is by far the most significant WTO case ever," says Naotaka Matsukata, a policy adviser in Washington with Alston + Bird LLP and a former US trade official. Meanwhile, Antigua, which has

AFP - Oil prices fell on Monday as market participants fretted over the outlook for the US economy amid fears a potential economic slowdown could dampen oil demand.

Because of rising demand for ethanol, American farmers are growing more corn than at any time since World War II. And sea life in the Gulf of Mexico is paying the price.

Wheat prices surged above $10 a bushel for the first time ever Monday amid concerns that strong demand globally could result in a grain shortage in the United States next year — worsening food price inflation.

Voracious demand for books and a crackdown on small, polluting paper mills have caused a paper shortage in China. So far the problems have been largely confined to China, but experts say that if the trend is unchecked, publishers worldwide could find themselves paying higher costs.

AFP - Oil prices will remain at high levels into next year owing to tight supplies and despite fears that a weak US economy may dent crude demand, leading energy consultants said here Monday.

Shelly Yachimovich can't sleep because of the issue, averred the Labor Knesset member at a Knesset session yesterday over the health basket. ...

NEW YORK (MarketWatch) -- Gold futures edged lower on Monday, as falling crude-oil prices and firmness in the U.S. dollar lowered investment demand for the precious metal.

AFP - Oil prices fell as the market tracked fresh concerns about the US economy, with fears that a slowdown in the United States could dampen demand for crude, traders said Monday.

NEW YORK (MarketWatch) -- Gold futures edged lower early Monday, as falling crude-oil prices and firmness in the U.S. dollar lowered investment demand for the precious metal. Gold for February delivery fell $3.50 at $794.50 an ounce on the New York Mercantile Exchange. "Weaker oil and a stronger dollar weigh on gold, as a stronger dollar makes gold more expensive for foreign investors and also reduces the appeal of gold as a hedge against inflation," said analysts at Action Economics.

Nintendo is set to miss out on an estimated $1.3 billion ($£650 million) in sales this Christmas by failing to meet demand for its Wii video games console.