UPDATE 1-Russia ready in principle to buy Spanish debt

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* Euro zone needs to devise debt strategy first

* Russia the world's third-largest reserve holder

MOSCOW, Oct 10 (Reuters) - Russia is ready in principle to buy Spanish government debt once the euro zone's member states have put in place a strategy to overcome the currency bloc's debt crisis, Arkady Dvorkovich, economic adviser to President Dmitry Medvedev, said on Monday.

Russia is the world's third-largest reserves holder and has over two-fifths of its $517 billion in foreign reserves invested in euro-zone sovereign debt.

"When the European countries announce a concrete and clear strategy to exit the crisis, and if in the framework of this strategy support from Russia and other BRIC countries is necessary, then we would provide such support," Dvorkovich said in response to a question.

Dvorkovich, attending a conference in Moscow with Spanish Economy Minister Elena Salgado, said Salgado had met Russia's former Finance Minister Alexei Kudrin and Foreign Minister Sergei Lavrov.

Salgado left the event without taking questions from reporters.

The BRIC nations -- Brazil, Russia, India and China -- are a loose coalition of large emerging economies that together hold the bulk of the world's foreign exchange reserves.

Of Russia's total reserves, $109 billion are held in two sovereign wealth funds whose asset allocation is set by the finance ministry. The central bank decides how the remainder is invested.

Moscow has generally taken a sceptical approach towards offering bilateral financial support to euro-zone countries, saying it would prefer to invest in bonds issued by a common bailout fund, the European Financial Stability Facility (EFSF).

Officials have also said that they would prefer to support any debt initiative that is put together under the auspices of the Group of 20 nations, which is due to hold a summit in Cannes, France, next month.

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WRAPUP 4-Polish PM wins new term, markets buoyant

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* Tusk's Civic Platform wins new four-year term

* Tusk to seek new coalition with Peasants' Party

* Marklets, analysts welcome outcome as sign of stability

By Gareth Jones

WARSAW, Oct 10 (Reuters) - Centre-right leader Donald Tusk has become the first Polish prime minister since the fall of communism in 1989 to win a second consecutive term following his Civic Platform's election victory, nearly complete results showed on Monday.

With 93 percent of the votes counted, Tusk's pro-business party had 39 percent of the votes in Sunday's election. Its main rival, Jaroslaw Kaczynski's nationalist-conservative Law and Justice party, trailed on 30 percent.

On that projection, Civic Platform would secure 206 seats in the 460-member lower chamber, or Sejm.

Its ally, the rural-based Peasants' Party, was on track to win 30 seats, giving Tusk enough support to rebuild the same coalition that has steered Poland smoothly through the economic turmoil of the past four years.

Tusk is also expected to try to lure moderate members of the post-communist Democratic Left Alliance (SLD) into a new coalition. The SLD won only about 8.2 percent of the vote after losing many younger voters to a new libertarian grouping.

Palikot's Movement, founded by wealthy businessman and former PO lawmaker Janusz Palikot, won 9.9 percent. Palikot's attacks on the powerful Roman Catholic Church and championing of causes such as gay rights and legalisation of soft drugs have struck a chord among young urban voters.

Lech Walesa, Poland's former president and leader of the Solidarity trade union in communist times, said Palikot had successfully tapped into issues neglected by other parties.

"Palikot had a clearer message... and people want a simpler, clear message," Walesa told TVN24 television.

Financial markets welcomed Tusk's victory as a guarantee of political and economic stability in the European Union's largest eastern member state at a time of deepening crisis in the euro zone.

"From the point of view of the markets, this is very good news. Investors worried that we could see a coalition made up of three parties," said Ernest Pytlarczyk, chief economist at BRE Bank.

The Polish zloty was 1 percent higher against the euro in early Monday trade, bonds also firmed and the Warsaw bourse's main index rose 0.3 percent while other regional stock markets fell.

Polish President Bronislaw Komorowski, a former Civic Platform lawmaker, is expected to ask Tusk to form a government but has said he must first wait for the final election results, expected on Tuesday evening.

"I hope that it will be possible to reduce the time necessary for creating the government ... to a minimum," Komorowski said on Sunday evening.

The main surprise of the election was the rise of a new liberal grouping, Palikot's Movement, which the exit poll showed winning 9.9 percent, much of it at the expense of the former communists.

Janusz Palikot, its founder, is a wealthy businessman and former PO lawmaker whose attacks on the powerful Roman Catholic Church and championing of causes such as gay rights and legalisation of soft drugs struck a chord among young voters.

CONTINUITY

Political analysts said Sunday's election result showed Polish democracy had come of age.

"The ruling party and coalition for the first time in Poland's post-communist history has been re-elected and that shows the consolidation of democracy in Poland," said Jacek Raciborski, a political scientist at Warsaw University.

"Only the low turnout is worrying," he added.

About one in two eligible voters took part in the election, in which a return to power by Kaczynski would have threatened relations with Germany and Russia and worried investors.

Tusk's party also won a clear victory in the upper chamber, or Senate, where it was projected to win 62 of the 100 seats.

The outgoing coalition has presided over four years of strong economic growth, steering Poland smoothly through the 2008-09 global financial crisis without dipping into recession.

Its victory ends a string of defeats for ruling parties in elections in EU member states this year, including in Portugal, Latvia, Denmark and Ireland.

Civic Platform has pledged more cautious reforms aimed at reining in the public debt and budget deficit, expected to reach 53.8 percent and 5.6 percent respectively this year.

It also wants to continue a privatisation programme set to net 15 billion zlotys ($4 billion) for state coffers in 2011 and to pursue closer ties with Poland's EU partners.

The result is a personal triumph for Tusk, 54, a pragmatic liberal conservative from near Gdansk on Poland's Baltic coast, who was involved in the Solidarity movement that helped end decades of communist rule.

Tusk, whose country holds the EU presidency until the end of this year, favours closer integration with the rest of the bloc and says joining the euro remains a strategic goal for Poland despite the debt crisis in the euro zone.

He has good personal ties with German Chancellor Angela Merkel and has maintained a cautious rapprochement with Russia, despite strains over a plane crash there last year that killed then-President Lech Kaczynski, Jaroslaw Kaczynski's twin.

Jaroslaw Kaczynski's calls for a halt to privatisation, for higher taxes on the wealthy and for a more combative stance in dealings with the EU had unsettled investors.

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UPDATE 1-China's Citic Securities dips after $1.7bln HK debut

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(Adds details, background)

By Elzio Barreto

HONG KONG Oct 6 (Reuters) - Citic Securities Co Ltd, China's largest listed brokerage, fell as much as 4.5 percent before recovering on its Hong Kong stock market debut on Thursday, after raising a less-than-expected $1.7 billion in its first listing outside the mainland.

Citic Securities is among the few companies to successfully launch a stock offering in Hong Kong during the past months, with a long list of deals pulled or postponed due to the volatile markets.

In early morning trade, Citic Securities shares were trading at HK$12.96 compared with the offer price of HK$13.30 each and recovering from the day's low of HK$12.70. The company sold shares at the bottom of a revised price range of HK$13.30-$15.20 a share last week.

While the shares held close to the offer price, they traded far below the broader market. The benchmark Hong Kong stock exchange index was up 4.4 percent in early trade.

Citic Securities , already listed on Shanghai's stock exchange, is part of China's state-backed conglomerate Citic Group which was formed in 1979 as China's first financial group.

The Hong Kong listing comes at a time when global stock markets have plunged on concerns about European debt crisis, among other factors. The benchmark Hang Seng index tumbled to a 2-1/2 year low on Tuesday, falling eight of the past nine sessions, during which the index lost about 15 percent.

Citic Securities is the biggest Hong Kong listing since the $2.5 billion initial public offering by luxury goods maker Prada in June.

The offering is the first of nearly $35 billion in share sales in Hong Kong and China still planned in the coming months by financial companies, including Haitong Securities, New China Life and China Guangfa Bank.

Investors have been on high alert and remain wary of equity markets because of lingering concerns over Europe's debt troubles and fears of a slowdown in the U.S. and Chinese economies.

Just last month, some $4.5 billion worth of deals were pulled in Hong Kong including Sany Heavy Industry and rival XCMG Construction Machinery Co Ltd , underscoring tepid investor appetite for IPOs

Apart from Citic Securities, only five other companies including shoemaker Hongguo International Holding and tea company Tenfu Holdings sold stock in Hong Kong the past two weeks since offerings resumed after a two-month hiatus.

The five offerings raised a total of $510 million. The slowdown in share sales the past months in Hong Kong, Singapore and other main markets in the region contributed to a 49 percent slump in Asia Pacific equity capital markets in the third quarter from a year earlier.

Securities companies in China are forecast to post annual profit growth of nearly 20 percent between 2011 and 2013, buoyed by an increase in capital markets activity and new businesses such as margin financing and private equity investments, BOC International estimated.

Citic Securities was the sole global coordinator of the offer, with a group of banks including BOC International, CCB International, Bank of America Merrill Lynch and Credit Agricole's CLSA unit helping to underwrite the deal. (Reporting by Elzio Barreto; Editing by Denny Thomas and Michael Flaherty)

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Dexia accepts rescue offer after marathon meeting

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A boy walks past the logo of Belgian-French financial services group Dexia in Brussels in this October 9, 2011 file photo. Belgium will buy the Belgian banking business of Dexia for 4 billion euros ($5.4 billion) and provide the bulk of guarantees to cover leftover assets of the parent group, the Belgian government said on October 10, 2011.

Credit: Reuters/Francois Lenoir/Files

By Philip Blenkinsop and Robert-Jan Bartunek

BRUSSELS | Mon Oct 10, 2011 2:11am EDT

BRUSSELS (Reuters) - Franco-Belgian bank Dexia agreed early on Monday to the nationalization of its Belgian banking division and secured state guarantees in a rescue that could pressure other euro zone governments to strengthen their banking sectors.

Belgium will pay 4 billion euros ($5.4 billion) to buy Dexia Bank Belgium, the largely retail Belgian division, which has 6,000 staff and deposits totaling 80 billion euros from 4 million customers.

Dexia also secured state guarantees of up to 90 billion euros to secure borrowing over the next 10 years. Belgium would provide 60.5 percent of these guarantees, France 36.5 percent and Luxembourg 3 percent.

Dexia's announcement came after a board meeting that lasted some 14 hours from mid-afternoon on Sunday after France, Belgium and Luxembourg had agreed a rescue plan.

The extraordinary meetings at the end of the weekend had echoes of the dismantlement of financial group Fortis in October 2008 by the Netherlands, Belgium and BNP Paribas. Then, shareholders protested at the initial terms offered, and only agreed on improved terms six months later.

The governments rushed to support Dexia after it became the first bank to fall victim to the two-year-old euro zone debt crisis, as a credit crunch denied it access to wholesale funds and sent its shares down 42 percent last week.

"We found an agreement on the fair division of the costs related to the management of the 'rest bank'," Belgian Prime Minister Yves Leterme told a news conference in the early hours of Monday.

The likely burden of bailing out Dexia led ratings agency Moody's to warn Belgium late on Friday that its Aa1 government bond ratings may fall.

The country had a debt-to-GDP ratio of 96.2 percent last year, lower only than Greece and Italy among euro zone members and on a par with bailout recipient Ireland.

Finance Minister Didier Reynders said that the deal should not push Belgium's debt-to-GDP ratio above 100 percent.

Dexia, which used short-term funding to finance long-term lending, found credit drying up as the euro zone debt crisis worsened. The problem was exacerbated by the bank's heavy exposure to Greece.

Dexia has global credit risk exposure of $700 billion - more than twice Greece's GDP - and its rescue has stoked investors' anxieties about the strength of European banks in general.

The governments' rescue package came as the leaders of France and Germany agreed that European banks needed to be recapitalized, but papered over differences on how that would happen.

Paris wants to tap the euro zone's 440 billion euro ($594 billion) European Financial Stability Facility (EFSF) to recapitalize French banks, while Berlin is insisting the fund should be used as a last resort.

There were fresh reports over the weekend that big French banks BNP Paribas and Societe Generale might agree to capital injections as part of a Europe-wide plan to boost lenders' financial strength. However, both banks deny such plans.

Dexia's board had also instructed the company's chief executive to seek backing from French state bank Caisse des Depots. A consortium of CDC and La Banque Postale, the French post office's banking arm, would ensure the financing of public entities in France.

It was not clear what would be the fate of healthy businesses, such as Denizbank in Turkey, its asset management operation and its funds custody joint venture with Royal Bank of Canada.

Its Luxembourg division is set to be sold.

Otherwise, Dexia will be left with a portfolio of bonds in run-off, which totaled 95.3 billion euros at the end of June and including 7.7 billion euros of junk class and some 7.4 billion euros of mortgage-backed securities.

Dexia's shares have been suspended since Thursday afternoon. Belgium's financial markets watchdog said trading would resume on Monday after the bank's news conference and analyst call.

Chairman Jean-Luc Dehaene and Chief Executive Pierre Mariani were scheduled to host a news conference at 0900 Central European Time (0700 GMT). ($1 = 0.741 Euros)

(Reporting By Philip Blenkinsop. Editing by Sebastian Moffett and Ramya Venugopal)

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Shrewd hedge funds profit in turbulent September

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By Laurence Fletcher

LONDON | Fri Oct 7, 2011 5:30am EDT

LONDON (Reuters) - A select band of shrewd hedge fund managers have avoided September's market pitfalls to post healthy profits, even as Europe's deepening debt crisis leaves much of the $2 trillion industry nursing painful losses.

Bearish macro bets such as owning U.S. and European government bonds, as well as being short equities, commodities and the euro, have helped funds navigate a crisis that has seen fears of a global recession and a banking crisis grow.

Brevan Howard's $25 billion Master fund, one of the world's biggest hedge funds, gained 1.5 percent last month to September 23, said two sources who had seen data on the fund's performance. This takes profits this year to 12.3 percent.

And GLG, part of Man Group (EMG.L), saw its $2 billion Atlas Macro fund, which is managed by Driss Ben-Brahim and Jamil Baz, gain an estimated 6 percent in September, said a person close to the company.

In contrast, the average hedge fund lost 3 percent last month, according to Hedge Fund Research's HFRX index, taking year-to-date losses to 8.4 percent. The third quarter was the worst for three years.

Equity funds were hard hit, particularly those focusing on stocks' fundamental value, with MSCI's World index of stocks .MIWO00000PUS falling a further 8.8 percent during the month.

A number of industry insiders have pointed to markets being preoccupied with economic worries, rather than company fundamentals.

"This is not 2008, but perhaps one similarity with 2008 is that market's focus is on macro, and no-one is really focusing on the micro," said Frank Frecentese, global head of hedge fund investments at Citi Private Bank.

EQUITY, CREDIT FUNDS

Global macro funds -- made famous by the likes of George Soros -- have tended to be more bearish than equity managers and have benefited from falling bond yields in countries such as the United States, Germany and the UK.

On Thursday the Bank of England announced a further 75 billion pound stimulus, pushing yields on longer-dated debt to record lows.

Stenham Asset Management said its Trading fund, which invests in macro hedge funds, gained an estimated 0.8 percent in September, taking third-quarter gains to 3.4 percent.

Meanwhile, a smattering of equity managers were able to profit, even as markets fell.

Marshall Wace's $1 billion Eureka fund, managed by co-founder Paul Marshall, gained 1.5 percent in September, taking gains this year to 5.8 percent, said a source familiar with the matter.

And its Global Opportunities fund, which is run by Fehim Sever and which focuses on emerging markets, rose 6.5 percent last month, lifting this year's profits to 23.8 percent.

Among credit funds, CQS, one of Europe's biggest hedge fund managers, saw its Credit Long-Short fund, which is managed by Simon Finch, gain 1.7 percent in September, taking year-to-date gains to 7.9 percent.

This was helped by active trading of both long and short positions, according to a source familiar with the matter.

And while GLG's Emerging Markets fund has suffered this year, its Emerging Credit Opportunities portfolio gained 1 percent last month.

(Reporting by Laurence Fletcher. Editing by Chris Vellacott and Will Waterman)

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China's Huijin to buy shares of big state banks -Xinhua

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BEIJING | Mon Oct 10, 2011 4:04am EDT

The share purchases will start on Monday, it said.

The state banks are Industrial and Commercial Bank of China < 1398.HK > < 601398.SS >, Bank of China < 3988.HK > < 601988.SS >, China Construction Bank < 0939.HK > < 601939.SS > and Agricultural Bank of China < 1288.HK > < 601288.SS >. (Reporting by Aillen Wang and Kevin Yao; Editing by Ken Wills)

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Yang eyes Yahoo buyout with private equity

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1 of 3. A Yahoo! signs sits out front of their headquarters in Sunnyvale, California, February 1, 2008.

Credit: Reuters/Kimberly White

By Peter Lauria, Alexei Oreskovic and Nadia Damouni

NEW YORK/SAN FRANCISCO | Sun Oct 9, 2011 7:58pm EDT

NEW YORK/SAN FRANCISCO (Reuters) - For the last few years, a widely circulated joke about Jerry Yang was that he had the best tan in Silicon Valley from all the time he spent on Stanford University's golf course.

But the jests stopped about six months ago, when the Yahoo Inc co-founder and former CEO put away his golf clubs and began showing up on a daily basis at the Internet company's headquarters in Sunnyvale, California, according to a high-ranking Yahoo executive.

Now, Yang is interested in a deal with private equity firms that would take the $20 billion company off public markets, according to people familiar with the situation.

Such a deal would involve rolling over Yang's stake in Yahoo, which stood at 3.63 percent as of April 2. Yahoo's other co-founder, David Filo, would likely follow Yang's lead and roll over his stake, said other sources close to Yahoo. Filo held 5.90 percent of Yahoo's shares as of May 11.

Shortly after firing Carol Bartz as CEO in September, Yahoo and its longtime advisers at Allen & Co and Goldman Sachs began working on a strategic review, which could include a sale of the Internet pioneer, after receiving unsolicited expressions of interest.

Jack Ma, CEO of Chinese e-commerce giant Alibaba, said last month that he would be "very interested" in buying Yahoo, a deal that could help the former English school teacher expand into the U.S. Alibaba is being advised by UBS.

Microsoft Corp is also considering bidding for Yahoo, as is Silver Lake Partners, Providence Equity Partners and Hellman & Friedman, Reuters reported last week.

Another private firm that has expressed interest in Yahoo is Bain Capital, a source said. Bain has invested heavily in several media companies including Clear Channel Communications and The Weather Channel in recent years. A Bain spokesman declined to comment.

Yahoo declined to detail Yang's current role other than to say, "The entire Board, including Jerry, is fully aligned and unanimous in support of the comprehensive scope of the ongoing strategic review. As always, Jerry's singular focus remains to serve the best interests of Yahoo -- its shareholders, employees, users and advertisers."

THE GOING PRIVATE PLAY

Three years ago, Microsoft offered $33 per share, or $47.5 billion, to acquire Yahoo. Yang and the board turned down that bid, to the regret of many shareholders. Yahoo's shares closed at $15.47 on Friday.

Now Yang, who turns 43 in November, finds himself in essentially the same spot -- trying to resuscitate an organization where a lack of operational vision and clear leadership has made it susceptible to a takeover.

Yahoo's share of the U.S. Internet search market stood at 16 percent in August, compared with 19 percent two years ago, according to ComScore, despite a deal to outsource search technology to Microsoft. In contrast, Google Inc's search share has been steady at 65 percent, while Microsoft's share rose to 15 percent from 9 percent two years ago.

Yahoo's U.S. display ad impressions fell to 10.2 percent in June, and time spent by users on its site increased just 1.6 percent for the 12 months ended July 2011, according to ComScore. By comparison, Facebook's ad impressions swelled to 32.4 percent in June 2011 and time spent by users on its site jumped 58 percent for the 12 months ended July 2011.

Yahoo's advisors are expected to send financial information this week to interested parties, said a person familiar with the matter. Talks so far have been informal and have not firmed up on terms that would compel Yahoo to enter into direct negotiations, said another source.

There are several reasons why Yang might want to take Yahoo private. For starters, Yahoo is punished by Wall Street for not being a growth company and its low stock price prevents shares from being used as currency for acquisitions.

A buyer could sell off Yahoo's international assets, which include a partnership with Softbank in Yahoo Japan as well as about 40 percent stake in Alibaba.

The buyer could then use the cash -- estimated to be upward of $12 billion -- to pay off debt. That would pare down Yahoo to its U.S. operations, which has deteriorated to the point that they are being valued at just $5 billion and $6 billion, according to two sources close to the situation.

YANG'S WANING INFLUENCE

Whether Yang will succeed in taking Yahoo private remains to be seen -- it depends on the terms he manages to negotiate, as well as what other offers are on the table.

Yang still exerts influence over the board, but he has less clout with Yahoo management and staff now than he did during the talks with Microsoft, according to current and former employees.

Executives most loyal to Yang have matriculated out of the company over the years, replaced by a younger generation. Moreover, some detractors hold Yang responsible for refusing Microsoft in 2008, saying his decision was influenced by his personal attachment to Yahoo, rather than financial considerations.

"The Microsoft decision really split the company, with many feeling that Jerry's decision was bad for them personally because he left a lot of money on the table," said a former executive who worked at Yahoo at the time of the offer.

Nevertheless, Yang still retains pockets of support inside the company. His supporters say he has a deep concern for the direction and culture of the business he founded with Filo in 1995. They praised Yang for stepping in again to try to lift Yahoo's fortunes at a difficult juncture, just as he did in 2007 when he assumed the CEO role from Terry Semel.

Yang also has a deep network of contacts in the industry and a reputation for actively working behind the scenes.

"He'd be in the office, the door would be closed, he'd be working the phones, but you wouldn't know who he'd be working them with," said another former Yahoo executive who worked closely with Yang.

The Business Insider blog reported in September that Yang was trying to buy Yahoo.

Yang, whose quiet speech and calm demeanor belie a fiercely competitive streak, has a better chance of remaining involved with Yahoo in a management-led buyout than an outright sale. But private equity firms also like to install their own management at companies they acquire.

In pushing a go-private agenda, Yang appears to be hoping that his knowledge of Yahoo will be enough to convince a buyer to allow him to stay on and try to restore the company to its former glory, away from the harsh eyes of Wall Street.

(Reporting by Peter Lauria and Nadia Damouni in New York and Alexei Oreskovic in San Francisco; Additional reporting by Paritosh Bansal and Soyoung Kim in New York; Editing by Tiffany Wu and Richard Chang)

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HK shrs end flat as late surge in banks lifts index

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HONG KONG | Mon Oct 10, 2011 4:20am EDT

HONG KONG Oct 10 (Reuters) - Hong Kong shares bounced back from significant losses in the last 10 minutes of trade on a report that Huijin, the domestic investment arm of China's sovereign wealth fund, was buying shares of the top four mainland banks in its first such move since the 2008 financial crisis.

The Hang Seng index closed flat at 17,771.1 after trading as much 1.5 percent lower shortly before the close. The The China Enterprises index still closed down 0.2 percent with shares of metals producers dragging the index.

On the mainland, the Shanghai Composite , which closed before the Huijin news was out, fell to its lowest level in 2-1/2 years even as volume slumped to a 33-month low as news of weak property sales sapped investors confidence.

* Mainland banking shares, hammered by worries over bad loans and government tighening all year, surged in the final minutes of Hong Kong trading on what traders said was a spurt of knee-jerk short-covering. Mainland banking shares, amongst the most liquid stocks in Hong Kong, have become one of the most popular ways for investors bearish on China or for those looking for a relatively cheap way to hedge long China portfolios. ICBC closed up 1 percent while Bank of China shares rose 2.1 percent.

(Reporting by Vikram Subhedar; Editing by David Chance)

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Greece, troika meet to wrap up talks - source

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ATHENS | Mon Oct 10, 2011 3:55am EDT

ATHENS Oct 10 (Reuters) - EU, IMF and ECB mission chiefs meet Greek Finance Minister Evangelos Venizelos on Monday morning with the intention of concluding talks on a key aid tranche, a source close to the negotiations said.

"We are working on the assumption that meetings will wrap up today," the source close to the talks told Reuters on condition of anonymity.

The mission chiefs will then likely issue a joint statement on Monday or Tuesday, to conclude their visit.

Once this is done, inspectors will prepare reports for euro zone finance ministers and the IMF's board, who will decide on the aid tranche.

Athens could run out of cash as soon as mid-November without the new 8 billion euro aid installment, increasing the risk of a default that would drag the euro zone deeper into a debt crisis already shaking financial markets worldwide.

Senior officials from the so-called troika of EU, IMF and ECB inspectors said last week they expected to conclude their review soon but first wanted to receive more details on the implementation and impact of plans to slash the public sector workforce and increase taxes to plug a bigger-than-targeted fiscal gap.

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Sprint seeks to raise capital; investors flee

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A woman talks on her phone as she walks past T-mobile and Sprint wireless stores in New York July 30, 2009.

Credit: Reuters/Brendan McDermid

By Sinead Carew and Supantha Mukherjee

NEW YORK | Fri Oct 7, 2011 6:20pm EDT

NEW YORK (Reuters) - Sprint Nextel Corp said it needs to raise more money and signaled it will burn through its cash reserves, raising concerns about the wireless provider's financial stability and business strategy.

Shares fell 20 percent to close at $2.41 on Friday, while its credit default swaps rose, reflecting greater concerns about a default risk. Shares of Sprint affiliate Clearwire Corp tumbled 32 percent to $1.39.

The news that Sprint could spend more cash than it brings in to upgrade its network provoked angry questions at an investor meeting with Chief Executive Dan Hesse.

Analysts complained that Hesse gave few clear answers and instead raised many fresh questions. In particular, they were worried that Sprint said its cash shortfall did not yet factor in the undisclosed sum of money the carrier has to pay Apple Inc for the right to sell the popular iPhone.

"They're going to be spending more money than they're bringing in for the next couple of years... even before iPhone costs," Hudson Square analyst Todd Rethemeier said, adding that this makes Sprint -- already a risky investment prospect -- an even more dangerous bet.

The Wall Street Journal previously reported that Sprint agreed to pay Apple $20 billion over four years as part of their agreement.

Hesse conceded that selling the iPhone would be expensive, but promised it would be "quite accretive" to Sprint's profits over time.

"The part we struggle with here is the fact that Sprint wants us to think about the subscriber benefit from the iPhone, but ignore the financial impact," Jennifer Fritzsche from Wells Fargo wrote in a research note.

LIQUIDITY QUESTIONS

Sprint outlined a plan to spend $7 billion on a network upgrade that it wants to complete by the end of 2013, two years earlier than previously suggested. The company said that upgrade would save it $10 billion to $11 billion.

Chief Financial Officer Joe Euteneur said Sprint would pay for the upgrade with cash from its balance sheet and by raising capital. He said he could not provide details as he wanted the flexibility of being able to tap the market at the best time.

The company also flashed a presentation slide saying it expects its liquidity to improve after 2013, implying a tough two years before that.

Analysts, many of whom have covered Sprint for years, told management that they did not understand the presentation and several asked about liquidity.

"Seeing all these balls in the air is a little scary," said Evercore analyst Jonathan Schildkraut.

Analysts said there was no immediate risk of Sprint defaulting on its debt. But, in a sign of investor nervousness, Sprint credit default swaps rose.

It now costs $1.5 million paid upfront to insure $10 million of Sprint debt for five years, in addition to annual payments of $500,000, according to data provider CMA. That is up from an upfront cost of $1.04 million plus $500,000 a year on Thursday.

CLEARWIRE UNCERTAINTY

Sprint owns 54 percent of Clearwire, and was questioned about how long it plans to support the venture.

Executives for Sprint said it would stop selling phones using Clearwire's high-speed WiMax network by the end of 2012, and refused to speak about plans beyond that.

Sprint also said it hopes to bolster its own network using spectrum from Clearwire's rival, LightSquared, backed by hedge fund manager Phil Falcone, if that becomes available.

Sprint declined to comment on whether it would offer Clearwire more funding. When asked if Sprint would let Clearwire go bankrupt, Hesse's response was that if there was a bankruptcy, he would "expect it to be constructive."

Clearwire Chief Executive Eric Prusch told Reuters that he was optimistic that the company would be able to raise the $1 billion financing it needs to continue to operate and upgrade its network. He added that Sprint was still dependent on Clearwire's network.

At the Sprint meeting, Joan Lappin of Gramercy Capital Management angrily asked why it was spending to upgrade its own network while Clearwire, which has much more spectrum than Sprint, needs funding.

The question was greeted by loud clapping and cheering among analysts and investors.

Sprint said its network upgrade would help boost its margin from operating income before depreciation and amortization by 4 percent to 6 percent by 2014. It also said it would raise its margins by another 4 percent to 6 percent by improving its operations.

But analysts questioned whether investors would see any boost in profit because of the spending plans.

Bernstein Research analyst Craig Moffett also worried that Sprint's service could suffer while it sets aside spectrum for the network upgrade. It is not clear how the company would avoid "creating a capacity gap" when there will be big demands on the network, he said, particularly iPhone users.

Sprint plans to upgrade its network using Long Term Evolution, the same technology used by bigger rivals, AT&T Inc and Verizon Wireless, a venture of Verizon Communications Inc and Vodafone Group Plc.

(Additional reporting by Liana B. Baker. Editing by Gerald E. McCormick and Robert MacMillan)

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Job gains ease recession fears but still weak

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Job seekers attend a career fair at Rutgers University in New Brunswick, New Jersey, January 6, 2011.

Credit: Reuters/Mike Segar

By Lucia Mutikani

WASHINGTON | Fri Oct 7, 2011 6:43pm EDT

WASHINGTON (Reuters) - Employers hired more workers than expected in September and job gains for the prior two months were revised higher, easing recession fears.

But the unemployment rate remained stuck at 9.1 percent for a third straight month, keeping pressure on President Barack Obama and the U.S. Federal Reserve to do more to spur the recovery.

Nonfarm payrolls rose 103,000 in September, the Labor Department said on Friday, but that included the return of 45,000 striking communications workers. Excluding those workers, employment increased by a meager 58,000.

"It underscores the belief that the economy has skirted a recession, but that's not to say it's out of the danger zone because there are significant risks out there," said Millan Mulraine, senior macro strategist at TD Securities in New York.

Job growth is still falling short of the pace needed to pull down unemployment, though the report had a firmer tenor than economists had expected. Hourly earnings rebounded, the length of the average work week rose, and revisions showed 99,000 more jobs were added in July and August than initially reported.

The unemployment rate also managed to hold steady despite a surge of new workers into the labor force.

U.S. stocks snapped a three-day rally as a downgrade of Spain and Italy's credit ratings overshadowed the jobs report. Treasury debt prices fell for a fourth straight day, while the dollar rose marginally against a basket of currencies.

Economists had expected payrolls to increase 60,000 last month, with the jobless rate steady at 9.1 percent. Employment growth has decelerated sharply from the first quarter of the year, when payroll growth averaged more than 165,000 a month.

The weak labor market poses a critical challenge for Obama, who faces a tough battle to win reelection in November 2012.

Obama has proposed a package of measures to spur jobs growth, but the plan has run into stiff opposition from Republicans, raising the prospect Washington will be unable to take decisive action.

"It's anemic growth at best, and you don't see anything from this administration that's going to turn it around," Rick Santorum, a former senator and a former Republican presidential hopeful, said on CNBC.

White House officials conceded the jobs growth was not good enough.

"I would not say that we are satisfied in the slightest," National Economic Council Director Gene Sperling told Reuters Insider. "There still is a risk that this economy could stall out or even have a double-dip recession."

The U.S. economy needs to grow by at least a 2.5 percent annual rate, with payrolls expanding by around 125,000 positions a month, just to keep the jobless rate from rising.

RECESSION WATCH

Health care, construction, retail, and professional and business services all contributed to the rise in payrolls, while manufacturing was a drag for a second straight month.

The closely watched report was the latest sign to suggest the world's largest economy was likely to skirt a recession despite weakness over the summer, although prospects for the nation's 14 million unemployed remained grim.

Private employment increased 137,000 last month, an acceleration from August's mere 42,000. But government payrolls fell 34,000 as employment at the local government level fell 35,000 and the Postal Service shed 5,000 positions.

The drop in local government payrolls included a loss of 24,400 education jobs.

Recent reports on manufacturing, business spending and auto sales suggest the economy fared better in the third quarter after growing at an anemic 1.3 percent annual pace in the April-June period, although job growth did not pick up.

Analysts warn that the economy is still not out of the woods, with Europe's debt crisis posing a threat that could derail the U.S. recovery. Industrial output in Germany -- Europe's biggest economy -- fell in August.

PUSHING ON A STRING

The Federal Reserve last month announced new steps to breathe life into the recovery by pushing long-term borrowing costs lower, but economists do not expect the effort to bear much fruit at a time many Americans are unable to access credit.

U.S. consumer credit fell by the most in nearly 1-1/2 years in August, the Fed said in a separate report, confirming the retrenchment by households whose confidence was damaged by a wrenching political fight over the U.S. deficit and steep stock price drops.

Uncertainty over the economic outlook has made businesses reluctant to hire aggressively.

"One of the main problems in the economy is the lack of confidence in economic policies here and in Europe," said Sung Won Sohn, an economics professor at California State University in the Channel Islands. "Most of the cards have been dealt and the politicians have been squabbling among themselves."

While the jobless rate held steady last month, other measures of unemployment grew darker.

The average duration of unemployment hit a record high of 40.5 weeks. and almost 45 percent of the 14 million jobless Americans had been out of work for six months or more, up from 42.9 percent in August.

In addition, a broader measure of unemployment that includes people who want to work but have given up looking for jobs and those working only part time for economic reasons rose to 16.5 percent from 16.2 percent.

But there were also some bright spots.

Hourly earnings rose 4 cents after falling in August; the length of the work week rose to 34.3 hours from 34.2 hours; and job gains were widespread.

Health care and social services payrolls increased by 40,800 jobs, construction added 26,000 workers -- possibly due to rebuilding after Hurricane Irene -- and temporary employment rose 19,400. Temporary hiring is sometimes seen as a harbinger of permanent hiring.

But manufacturing, which has been the pillar of the economy, shed 13,000 jobs, the second straight monthly decline.

(Additional reporting by Mark Felsenthal in Washington; Editing by Andrea Ricci and Leslie Adler)

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Belgium's KBC sells private bank to Qataris for $1.4 billion

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BRUSSELS | Mon Oct 10, 2011 3:51am EDT

BRUSSELS (Reuters) - Belgian bank KBC (KBC.BR) has agreed the sale of its KBL private banking unit for 1.050 billion euros ($1.42 billion) to Qatari-backed Luxembourg firm Precision Capital, it said on Monday, falling 300 million euros short of previous plans for the sale.

The news sent KBC's shares down 2.45 percent at Monday's market opening.

The sale is a central part of a restructuring plan required by the European Commission in return for 7 billion euros of state aid that KBC received to help it through the global financial crisis.

Last year KBC agreed to sell the unit to Indian family-owned investment firm Hinduja Group for 1.35 billion euros, but the deal fell through for regulatory reasons.

"The market currently is much more volatile than it was a year ago," said a spokesman. KBC said in a statement the agreement would release a total of about 700 million euros in capital for KBC.

Precision Capital represents the business interests of a Qatari investor who has requested anonymity, it added.

Private equity firm KKR has previously been identified as a potential bidder, along with Societe Generale and Canadian lender Royal Bank of Canada.

Exor, the investment firm controlled by Italy's Agnelli family, had also been named as a potential bidder before the agreement with Hinduja was announced.

KBC is also planning to sell its majority stake in Poland's Kredyt Bank BKRE.WA and insurer Warta. ($1=0.741 euros)

(Reporting by Ben Deighton and Juliane von Reppert-Bismarck; Editing by Greg Mahlich)

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Banks to be forced to bolster liquid assets - FT

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LONDON | Sun Oct 9, 2011 9:41pm EDT

LONDON Oct 10 (Reuters) - Global banking regulators will press ahead with the first worldwide effort to force banks to hold more liquid assets, the chairman of the Basel Committee on Banking Supervision said in an interview with the Financial Times on Monday.

Stefan Ingves, who also heads the Swedish central bank, said the Basel group plans to put uniform implementation of the Basel III reforms at the top of its agenda.

The measures, which will also force banks to cut back on short-term funding, have come under scrutiny from some of the 27 member countries who say the rule changes could damage the broader economy.

The reforms, which were agreed to by the member states, will force banks to hold more top-quality capital against unexpected losses, but there are rising concerns that some countries will not stick to the agreement.

"It is going to be all about implementation in as uniform a way as possible. Balkanisation of the rules over the long term is not in anyone's interest," Ingves said.

The FT reported that the committee plans to publish "heat maps" that show which countries are in compliance with the measures. The committee will also send out teams of experts to look at whether each country's implementation laws and regulations are in accordance with the agreement.

The Basel group is still hammering out the details on two liquidity rules: the liquidity coverage ratio, which would require banks to hold enough liquid assets to survive a 30-day crisis; and the net stable funding ratio, which would force financial institutions to use more long-term funding.

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PRESS DIGEST - Financial Times - Oct 10

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Financial Times

'TIME SHORT' FOR EUROZONE, SAYS CAMERON

David Cameron has urged European leaders to take a "big bazooka" approach to resolving the eurozone crisis, warning they have just a matter of weeks to avert economic disaster.

BANKS TO BE FORCED TO BOOST LIQUID ASSESTS

Global banking regulators will press ahead with the first worldwide effort to force banks to hold more liquid assets and cut back the industry's reliance on short-term funding, despite complaints that the rule changes could damage the broader economy, the new chairman of the Basel Committee on Banking Supervision has warned.

CAMERON WANTS 'SAFEGUARDS' FOR FINANCIAL SERVICES

David Cameron is to demand "safeguards" to prevent France and other eurozone countries from distorting the European Union's single market in an attempt to shift financial services from Britain to the single currency area.

LLOYDS SET FOR LOSS ON REAL ESTATE DEAL

Lloyds Banking Group seems poised to take a loss of about 35 percent on a 1 billion pound ($1.6 billion) basket of commercial property debt as it enters second-round talks with four remaining bidders for the portfolio, according to people familiar with the process.

IMI LOOKS TO SPEND BIG ON ACQUISITIONS

IMI , the UK engineering group, is investigating spending up to several hundred million pounds on acquisitions to bolster its position in niche fields.

UK REGULATOR CRITICISES FRENCH AUDITORS

French auditors have been lambasted by the UK's leading accountancy regulator for their performance during the Greek debt crisis.

LADBROKES TAKEOVER OF RIVAL UNDER THREAT

Ladbrokes may pull the plug on its potential takeover of Sportingbet even if the online gambling suitor removes a perceived stumbling block to the deal by selling its Turkish business, according to people with knowledge of the situation.

STEEL COMPANIES BRACED FOR PRICE FALL

The steel industry faces tough times with companies braced for falling prices as buyers delay orders because of extreme nervousness about global economic weakness.

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PRESS DIGEST - British business - Oct 10

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The Times

SOLICITORS UNDER THREAT FOLLOWING NEW RULES

Thousands of high street solicitors could go to the wall in a "seismic" upheaval of Britain's 14 billion pound ($22 billion) consumer legal market following new ownership rules that came into effect in the UK last week.

BANKS TOLD TO JUSTIFY BAN ON RIVAL CASH MACHINES

Two of Britain's biggest high street banks, Royal Bank of Scotland and Lloyds , have been criticised for preventing account-holders from using cash machines owned by their rivals.

PLANS MADE FOR BREAK-UP OF DEXIA BANK

France and Belgium reached a deal on Sunday on sharing the cost of dismantling Dexia , which last week became the first banking victim of the eurozone debt crisis.

The Telegraph

TAXPAYERS' FACE WINDFALL AS URENCO NEARS SALE

British taxpayers could be in line for a 3 billion pound windfall from the government's one-third stake in Urenco after the target price was increased in a series of meetings between private equity firms and the nuclear power company ahead of an expected sale.

BOE POLICYMAKER SAYS THERE'S 'MORE SCOPE' FOR QE

The Bank of England is likely to follow up last week's 75 billion pound of quantitative easing with even more cash injections into the British economy, a leading rate-setter has said.

SELECTA DISPENSES 800 MILLION POUND SALE

Insurance giant Allianz could be serving up its vending machines business Selecta in a potential 800 million pound sale.

The Guardian

CHINA EYES SHALE GAS AND URANIUM FIRMS

China's growing attempts to seize global natural resources has reached Britain with a link to the recent shale discoveries near Blackpool and a bid for a London-listed uranium company.

The Independent

HIGH STREET BANKS ATTACKED OVER POLICY

The Independent Commission on Banking (ICB) is under attack for failing to push for portable bank accounts - a basic reform that campaigners say would free consumers to switch banks and increase the efficiency of the wider economy.

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Swiss officials convene bank crisis committee-paper

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* Committee to discuss possible impact of euro zone debt crisis -paper

* FINMA, SNB, finance ministry represented

* UBS, CS relatively well capitalised but must do more-FINMA

* UBS capital dented by trading scandal

ZURICH, Oct 9 (Reuters) - The Swiss authorities have convened a crisis committee set up after the 2008 government bailout of UBS to discuss the possible impact on the big banks of the euro zone debt crisis, the NZZ am Sonntag newspaper reported on Sunday.

Citing two unnamed sources, the newspaper said the committee had become active as concerns mount that the problems in the euro zone could trigger a new financial crisis that would spread through the banking sector again.

The committee is led by Patrick Raaflaub, director of the FINMA financial markets regulator, and also includes Fritz Zurbruegg, head of the Swiss finance department, as well as central bank vice chairman Thomas Jordan, the paper said.

FINMA was not immediately available for comment on the report.

The paper cited one source as saying that while UBS and Credit Suisse were relatively well capitalised, it was not clear how quickly this capital could be mobilised to cushion the shock of a serious crisis spreading through the system.

The NZZ am Sonntag quoted Raaflaub as declining to comment on the activities of the committee: "A body like the financial crisis committee can only function by definition out of the public eye in such phases."

He also declined to comment on particular measures FINMA was taking towards individual institutions, but urged UBS and Credit Suisse to continue building up capital.

"On an international comparison, the two banks have an above average amount of capital. But they must further improve the quality of their equity capital," he told the newspaper.

"It is no secret that we are encouraging the institutes to reach their objectives faster than is mandatory."

UBS said last week the $2.3 billion it lost in a trading scandal meant its Tier 1 capital ratio would decline slightly at the end of the third quarter from the strong 18.1 percent it reported at the end of the previous quarter.

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U.S. judge puts brakes on SEC's Deloitte case

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* Questions why SEC doesn't go through Hague

* Asks SEC to file additional briefs next week

* Lawyers for Deloitte have not yet appeared in case

By Aruna Viswanatha

WASHINGTON Oct 7 (Reuters)- A federal judge on Friday put the brakes on the U.S. government's attempt to quickly get documents related to possible accounting fraud at Chinese companies listed on U.S. stock exchanges.

U.S. Magistrate Judge Deborah Robinson questioned whether she could force a Chinese unit of accounting firm Deloitte & Touche to hand over records to the U.S. Securities and Exchange Commission.

In September the SEC asked the court to enforce a subpoena it sent to Deloitte seeking information about its Chinese unit's audits of Longtop Financial Technologies Ltd , a Chinese company under investigation by the SEC.

Dozens of China-based companies have disclosed auditor resignations and booking-keeping irregularities in the past year, prompting a broad SEC and Justice Department review.

But the probes have stalled as investigators face difficulties in obtaining documents and evidence from auditors in China.

On Friday, Robinson asked why the agency was not going through procedures set up by the Hague Convention to access that information and is instead going through U.S. courts.

That route would mean a long delay, SEC lawyer Mark Lanpher said in court. "We're talking about months and months," he said. "Time is of the essence."

Lawyers for Deloitte have not formally acknowledged to the court that they are representing Deloitte or have the motion, since Deloitte is not technically a defendant, a status that slows the process further.

Robinson ordered the SEC to submit by next Friday a brief outlining precedent for the court to force Deloitte to respond, and to show the SEC doesn't have to go through the Hague first.

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UPDATE 1-Australia competition body to scrutinise Woolworths, Coles

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n" readability="45">Oct 10 (Reuters) - Australia's competition watchdog said on Monday it would pay close attention to the market power of top supermarkets Woolworths and Coles , which hold a duopoly.

The Australian Competition and Consumer Commission's new chairman, Rod Sims, said many suppliers felt they had no ability to negotiate with the powerful supermarket chains.

"The two major supermarkets have significant market power, with many smaller suppliers feeling they lack a real ability to negotiate supply arrangements. The ACCC can and will watch closely to ensure any such dealings do not involve unconscionable conduct by the supermarkets," Sims told a business lunch.

Many local and international food suppliers, including Kraft Foods and Goodman Fielder , have said they have little ability to negotiate as the two supermarket chains dominate the industry and have also increased their share of home-label goods.

Sims said the supermarkets would need close scrutiny to ensure they did not misuse market power by selling both branded and private-label products.

In 2008, the consumer watchdog held an inquiry into the supermarket industry and concluded it was "workably competitive".

Sims said the ACCC would also watch dominant telecoms firm Telstra during the rollout phase of the new high-speed broadband network, when rivals will still depend on Telstra's copper network.

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U.S. closes two banks, bringing 2011 total to 76

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WASHINGTON | Fri Oct 7, 2011 7:47pm EDT

WASHINGTON Oct 7 (Reuters) - U.S. regulators closed two banks on Friday, bringing the total number of foreclosures this year to 76.

In Missouri, Sun Security Bank of Ellington was closed with about $355.9 million in assets and $290.4 million in deposits, the Federal Deposit Insurance Corporation said in a release.

Great Southern Bank in Springfield, Missouri will assume the failed bank's deposits, the FDIC said.

Great Southern Bank is a unit of Great Southern Bancorp Inc .

The RiverBank of Wyoming, Minnesota was also closed by regulators, with about $417.4 million in assets and $379.3 million in deposits.

That bank's deposits will be assumed by Central Bank of Stillwater, Minnesota, the FDIC said.

Most of the banks that have failed so far this year have had less than $1 billion in assets.

The largest U.S. banks have recovered more quickly from the 2007-2009 financial crisis and the overall outlook for the industry has been improving in recent quarters.

The industry earned $28.8 billion in the second quarter, a $7.9 billion increase from a year before, the FDIC announced on August 23.

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WRAPUP 2-Europe eyes buoying banks to weather debt storm

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AppId is over the quota

* Europe banks may need more than 100 billion euros -Ireland

* High risk that crisis could broaden - Schaeuble

* Merkel, Sarkozy to meet Sunday in Berlin

By Carmel Crimmins and Jonathan Gould

DUBLIN/FRANKFURT, Oct 8 (Reuters) - European banks may need more than 100 billion euros ($135 billion) to withstand the sovereign debt crisis, Ireland estimated on Saturday ahead of a meeting between German Chancellor Angela Merkel and French President Nicolas Sarkozy to work out how to recapitalise the lenders.

The falling value of banks' holdings of government debt from Greece and other euro zone periphery states has already provoked the implosion of Belgian lender Dexia , adding urgency to the Merkel-Sarkozy talks.

"There is a high risk that this crisis further escalates and broadens," German Finance Minister Wolfgang Schaeuble told German paper Frankfurter Allgemeine Sonntagszeitung in an interview released in advance of publication on Sunday.

Germany and France have so far been split over how to strengthen shaky lenders and fight financial market contagion that may follow a possible Greek default.

Paris is keen to tap the euro zone's 400 billion rescue fund, the EFSF, to recapitalise its own banks, while Berlin is insisting the fund should be used as a last resort.

The International Monetary Fund (IMF) has said European banks need 200 billion euros in additional funds.

Irish Finance Minister Michael Noonan said the capital needed to bolster banks' cushions was likely to come from a variety of sources but the total bill would be large.

"I think there is general agreement that it will be significantly in excess of 100 billion (euros)," Noonan told reporters on the sidelines of an economic forum in Dublin.

"I know that some of the big German banks that I was talking to personally intend raising money on the market so it will be private funding. Other banks would like to avail of the EFSF fund. Other banks will rely on their sovereign governments to provide the capital so there is going to be a range of ways of doing it," he said.

Regulators worry that forcing a raft of major lenders to take state aid would not be the best use of Europe's limited capital resources, while banks fear than singling out only some lenders for extra support could heighten market worries about weaknesses at individual banks.

German newspaper Frankfurter Allgemeine Zeitung on Saturday cited financial sources as saying France's five-biggest lenders would agree to take 10-15 billion euros in funding from the state but also wanted to see Germany's No. 1 lender Deutsche Bank plump its capital cushion.

But a senior French banking source shot down the idea that French banks could be pushing for state aid, saying the Frankfurter Allgemeine Zeitung report was baseless.

"I don't know what game the Germans are playing... This is wishful thinking," the source told Reuters, asking not to be named.

Deutsche Bank Chief Executive Josef Ackermann is against any role for the state in his own bank's capital position and has ruled out a capital increase.

A Deutsche Bank spokesman on Saturday referred to Ackermann's long-standing public position and declined further comment.

The chief financial officer of Deutsche Bank unit, Deutsche Postbank , said he expected the 21 percent haircut on Greek bonds that international banks agreed to take as part of a EU-brokered debt relief deal in July would not be enough.

"Therefore we would expect renewed writedowns in the third quarter," Postbank's Marc Hess told Boersen-Zeitung newspaper.

Banks' need to gird their capital bases is also leading some to merge, such as Spain's No. 5 retail bank Banco Popular , which launched an all-share bid for its smaller rival Banco Pastor on Friday.

FIGHTING FIRES

Sarkozy is due to arrive in Berlin on Sunday afternoon and hold a working dinner with Merkel in the evening, amid signs that conditions for resolving the crisis are getting no easier.

Slovakia's coalition government was in deadlock on Saturday over talks on ratifying a strengthening of the EFSF rescue fund, with a junior party insisting on conditions for its support.

Euro zone minnows Slovakia and Malta are the last countries holding up expansion of the EFSF mandate, which is needed to fight the sovereign debt crisis

Angry Greeks have taken to the streets to protest government efforts to slash spending, boost taxes and privatise state companies but Belgian Finance Minister Didier Reynders said the pain could not go on indefinitely.

"This is not acceptable on a political, social or even economic level: we do not want the cure to kill Greece," Reynders told Greek newspaper Proto Thema in an interview.

Meanwhile, Greece's representative at the IMF said the country's borrowing needs will be higher than currently projected due to a tougher-than-expected recession and the outcome of a debt agreement with private sector creditors.

"This financing gap will have to be covered either by increasing the 109 billion euro loan agreed on July 21 or through a restructuring of private debt," Panagiotis Roumeliotis said in an interview in financial daily Imerisia.

EU leaders agreed in July to provide Greece with a second bailout of more than 109 billion euros to help the country service its debt through to 2020.

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UPDATE 1-Finland's Elcoteq files for bankruptcy

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AppId is over the quota

(Adds CEO comments, details from statement)

HELSINKI, OCT 6 - Once an example of Finland's success in technology innovation, electronics manufacturer Elcoteq filed for bankruptcy on Thursday after failing to reverse a fall in sales and restructure its debt.

The assembler of cellphones and set-top boxes struggled after Nokia Oyj switched to cheaper Asian suppliers a few years ago.

It also worked for Research In Motion , LG Electronics and others, but was unable to replace the lost business.

Elcoteq had said in June that it would not be able to repay the remainder of a revolving credit facility, and entered talks with an outside investor.

On Thursday, Elcoteq said lenders, which include Danske Bank , froze its bank accounts and prevented payment transactions, forcing it to file for bankruptcy earlier in the day.

"Despite the company's continuous cost reduction measures and thorough efforts to restructure the company's debt, Elcoteq was unfortunately not able to find a solution that would have been acceptable to the revolving credit facility lenders," the company said. Chief Executive Jouni Hartikainen resigned in August.

Approximately 15 percent of the original 230 million euro ($306 mln) revolving credit facility remains outstanding , it said.

Trading in the company's shares was suspended earlier. ($1 = 0.751 Euros) (Reporting by Ritsuko Ando; Editing by Erica Billingham)

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UPDATE 1-China's Citic Securities dips after $1.7bln HK debut

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AppId is over the quota

(Adds details, background)

By Elzio Barreto

HONG KONG Oct 6 (Reuters) - Citic Securities Co Ltd, China's largest listed brokerage, fell as much as 4.5 percent before recovering on its Hong Kong stock market debut on Thursday, after raising a less-than-expected $1.7 billion in its first listing outside the mainland.

Citic Securities is among the few companies to successfully launch a stock offering in Hong Kong during the past months, with a long list of deals pulled or postponed due to the volatile markets.

In early morning trade, Citic Securities shares were trading at HK$12.96 compared with the offer price of HK$13.30 each and recovering from the day's low of HK$12.70. The company sold shares at the bottom of a revised price range of HK$13.30-$15.20 a share last week.

While the shares held close to the offer price, they traded far below the broader market. The benchmark Hong Kong stock exchange index was up 4.4 percent in early trade.

Citic Securities , already listed on Shanghai's stock exchange, is part of China's state-backed conglomerate Citic Group which was formed in 1979 as China's first financial group.

The Hong Kong listing comes at a time when global stock markets have plunged on concerns about European debt crisis, among other factors. The benchmark Hang Seng index tumbled to a 2-1/2 year low on Tuesday, falling eight of the past nine sessions, during which the index lost about 15 percent.

Citic Securities is the biggest Hong Kong listing since the $2.5 billion initial public offering by luxury goods maker Prada in June.

The offering is the first of nearly $35 billion in share sales in Hong Kong and China still planned in the coming months by financial companies, including Haitong Securities, New China Life and China Guangfa Bank.

Investors have been on high alert and remain wary of equity markets because of lingering concerns over Europe's debt troubles and fears of a slowdown in the U.S. and Chinese economies.

Just last month, some $4.5 billion worth of deals were pulled in Hong Kong including Sany Heavy Industry and rival XCMG Construction Machinery Co Ltd , underscoring tepid investor appetite for IPOs

Apart from Citic Securities, only five other companies including shoemaker Hongguo International Holding and tea company Tenfu Holdings sold stock in Hong Kong the past two weeks since offerings resumed after a two-month hiatus.

The five offerings raised a total of $510 million. The slowdown in share sales the past months in Hong Kong, Singapore and other main markets in the region contributed to a 49 percent slump in Asia Pacific equity capital markets in the third quarter from a year earlier.

Securities companies in China are forecast to post annual profit growth of nearly 20 percent between 2011 and 2013, buoyed by an increase in capital markets activity and new businesses such as margin financing and private equity investments, BOC International estimated.

Citic Securities was the sole global coordinator of the offer, with a group of banks including BOC International, CCB International, Bank of America Merrill Lynch and Credit Agricole's CLSA unit helping to underwrite the deal. (Reporting by Elzio Barreto; Editing by Denny Thomas and Michael Flaherty)

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UPDATE 1-Sbarro files amended bankruptcy plan

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AppId is over the quota
n" readability="55">Oct 7 (Reuters) - Bankrupt pizza chain Sbarro Inc filed an amended restructuring plan in which its lenders agreed to provide about $35 million of new capital, reduce its total debt and emerge from bankruptcy protection before the end of the year.
Under the plan, Sbarro's senior lenders would fund a $110 million exit loan comprising $35 million in outstanding debt under Sbarro's current bankruptcy loan and $75 million of debt from its pre-bankruptcy credit facility.
Another $100 million owed to the lenders would be converted to equity in the reorganized company. The lenders are led by collateral agent Cantor Fitzgerald Securities.
Sbarro said it expects to generate "positive cash flow before year-end".
The company also said the plan has the support of all its key stakeholders, including the unsecured creditors committee.
Melville, New York-based Sbarro, which filed bankruptcy in April, is seeking to get rid of the bulk of its $395 million debt load. The restaurant, which sells pizza, pastas and other Italian foods, has said in court filings that it has had discussions with an unnamed foreign investor it hopes will make a play for its assets.
The Sbarro family started their company as a salumeria, or Italian grocery store, in Brooklyn in 1956 soon after immigrating to the United States from Naples, Italy. Its ubiquitous green, white and red banner is a familiar sight in malls, rest stops and airports.
The case is In re: Sbarro Inc, U.S. Bankruptcy Court, Southern District of New York, No. 11-11527.
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Russia ready in principle to buy Spanish debt

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MOSCOW | Mon Oct 10, 2011 4:04am EDT

MOSCOW Oct 10 (Reuters) - Russia is ready in principle to buy Spanish government debt once the euro zone's member states have put in place a strategy to overcome the currency bloc's debt crisis, Arkady Dvorkovich, economic adviser to President Dmitry Medvedev, said on Monday.

"When the European countries announce a concrete and clear strategy to exit the crisis, and if in the framework of this strategy support from Russia and other BRIC countries is necessary, then we would provide such support," Dvorkovich said.

Dvorkovich, attending a conference in Moscow with Spanish Economy Minister Elena Salgado, said Salgado had met Russia's former Finance Minister Alexei Kudrin and Foreign Minister Sergei Lavrov. Salgado left the event without taking questions from reporters.

The so-called BRIC quartet, comprising Brazil, Russia, India and China, is a loose coalition of large emerging countries that together hold the bulk of the world's foreign exchange reserves.

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FTSE up as Germany, France promise eurozone action

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* FTSE up 0.3 pct on Germany, France's promise of a plan

* Oils gain as UBS ups view on risk assets

* Banks fall as Fitch donwgrades Italy and Spain

By David Brett

LONDON, Oct 10 (Reuters) - Energy stocks led Britain's top share index higher early on Monday as investors reacted positively to France and Germany's promise of action to deal with the euro zone's debt crisis.

London's blue chip index was up 16.45 points, or 0.3 percent at 5,319.85 by 0752 GMT, having finished the previous week on firmer footing following better than expected jobs data from the United Statesd and positive noises from Europe that the euro zone governments are preparing to take bolder steps to deal with their debt crisis.

Integrated oils were among the top performers as investors were tempted to forage around for bargains in so-called riskier assets.

Royal Dutch Shell Plc rose 0.7 percent as industry sources said the firm is restarting the largest crude distillation unit at its Singapore refinery less than two weeks after the plant was shut because of a fire.

UBS said it is now appropriate to shift from an "underweight" to a more "neutral" stance on 'risk assets', as we have seen progress on European leaders being prepared to recapitalise banks and improving growth relative to expectations, while it expects policy easing in emerging economies later in the year to also help sentiment.

But the broker cautioned: "To get even more constructive on global equity markets we need to see implementation in Europe, including credible bank recapitalisations in a number of countries, not a select few."

German Chancellor Angela Merkel and French President Nicolas Sarkozy said after talks in Berlin on Sunday evening that their goal was to come up with a sustainable answer for Greece's woes, agree how to recapitalise European banks and present a plan for accelerating economic coordination in the euro zone by a G20 summit in Cannes on Nov. 3-4.

And Franco-Belgian bank Dexia agreed early on Monday to the nationalisation of its Belgian banking division and secured state guarantees in a rescue package.

However, downgrades to both Spain's and Italy's credit ratings by Fitch on Friday, which brought in sellers in New York, has left analysts questioning the sustainability of recent gains.

"The announcement that Merkel and Sarkozy have reached agreement on how to reinforce beleaguered eurozone banks is certainly adding some support as it does increase the chances of finding a resolution to the crisis," Chris Weston, institutional trader at IG Markets, said.

"Although with ratings agencies continuing to cast a critical eye over all involved parties, further downgrades could yet follow and again this would surely give an adequate excuse to reach for the sell button once more."

That view was reflected in the performance of the perceived defensive stocks such as drugmaker GlaxoSmithKline and British American Tobacco , up 0.9 and 0.7 percent respectively, and the banks , which was the weakest performing sector on the UK's benchmark index.

Lloyds and Royal Bank of Scotland , which were among 12 UK financial institutions to have their ratings cut by Moody's on Friday, shed up to 1.1 percent.

Miners retreated too, having led the index higher last week, as fears of a possible "hard landing" for the Chinese economy enticed some profit taking, with traders citing a downgrade by Morgan Stanley as impacting Antofagasta , which fell 1.2 percent.

And London-listed corporates exposed to a sluggishly performing UK economy continued to cause concern for investors following profit warnings from Premier Foods and Mothercare in the previous week.

Michael Page International (MPI) shed 4.3 percent, as the British recruiters' commented on uncertainty in its markets in a Q3 trading update prompting Altium Securities to downgrade its rating to "hold" from "buy".

There was no British economic data scheduled for release during the session on Monday.

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Hartford Financial sees lower Q3 credit loss

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Hartford Financial Services Group Inc (HIG.N) sees lower credit losses in the third quarter and said it has no direct exposure to sovereign European debt.

The Hartford, which is one of the oldest companies in America, said it expects a third-quarter credit loss of about $61 million, primarily on structured securities, and a net unrealized gain of $2.6 billion as of Sept 30.

Shares of the Hartford, Connecticut-based insurer were trading nearly flat at $17.76 in the morning session Friday on the New York Stock Exchange.

(Reporting by Aditi Sharma in Bangalore; Editing by Anil D'Silva)

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FOREX-Euro rises on EU pledge, short-covering

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* Euro rises after Germany, France pledge to recap banks

* Single currency's rise extends on short-covering

* Trading thin due to Japan holiday

By Masayuki Kitano

SINGAPORE, Oct 10 (Reuters) - The euro rose on Monday, buoyed by a flurry of short-covering after leaders of Germany and France promised a new comprehensive plan by the end of the month to recapitalise euro zone banks.

The meeting between German Chancellor Angela Merkel and French President Nicolas Sarkozy offered no details, but drew a pledge to do what is necessary to shore up banks, settle the Greek debt crisis and help growth in Europe, giving a gentle boost to risk sentiment. .

Market players, however, remained cautious given the lack of details and since EU leaders have promised several times before to resolve the debt crisis, to no avail.

"The positive response could simply reflect the fact that positioning is now more balanced following earlier risk reduction," Todd Elmer, currency strategist at Citi in Singapore, said in a research note.

"It looks unlikely that EUR gains can be sustained absent further positive developments," he added.

The euro climbed 0.7 percent to $1.3475 , pulling away from a nine-month low of $1.3145 hit last week on trading platform EBS. The single currency's rise gained steam after it breached hourly resistance at $1.3423.

Concrete steps to recapitalise euro zone banks could offer some relief to the euro, which has been dogged by mounting worries about the impact of the euro zone's debt crisis on the European banking sector.

France, Belgium and Luxembourg agreed early on Monday a rescue plan for Dexia bank, while other French banks have come under intense pressure because of their exposure to Greece and other weak European countries.

BNP Paribas and Societe Generale denied they would seek to raise a combined 11 billion euros as part of a broader European recapitalisation plan.

Market liquidity was lower than usual with Japan on holiday, a factor that may have helped exaggerate the euro's rise. Market positioning was another contributing factor, traders said.

"On the open, Sydney ran the sell stops down through Friday's lows in EUR/USD... So now that those orders are done, path of least resistance is up I guess," said a U.S.-based trader.

A trader for a major Japanese bank in Singapore said short-covering helped fuel the euro's latest rise.

"When positions accumulate, various things can trigger this type of short-covering," he said, adding that short positions in the euro had increased on Friday, when Fitch cut the credit ratings of Italy and Spain.

The pledge from Merkel and Sarkozy to come up with fresh measures to solve the euro zone's debt crisis lent support to equities and helped nudge the Australian dollar higher.

The Aussie dollar rose 0.7 percent to $0.9836 , pulling away from a one-year low of $0.9388 hit last week.

One risk for the euro and risky assets in general is the fact that the next aid tranche for Greece is far from being a done deal with the IMF indicating the nation is at a crossroads and will need to implement "much stricter structural reforms" than seen so far.

Athens could run out of cash as soon as mid-November without the new 8 billion euro aid installment, increasing the risk of a default that would drag the region deeper into a debt crisis already shaking financial markets worldwide.

The dollar held steady against the yen at 76.74 yen in light trading with Tokyo players away on holiday.

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UPDATE 1-Erste to take Romania, Hungary hit, sees FY loss

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* Sees 2010 net loss of 700-800 mln euros

* To delay repayment of state capital, skip dividend

* Shares fall more than 10 pct

VIENNA, Oct 10 (Reuters) - Erste Group Bank said on Monday it expects to report a 700-800 million euro 2011 net loss after writing down goodwill in Romania and Hungary and scaling back euro zone exposure.

Emerging Europe's second-biggest lender said it would delay repayment of state capital to Austria and omit a 2011 dividend.

Erste said Hungarian legislation that lets customers repay foreign-currency loans at below market rates meant that it would suffer a 500 million euro ($675 million) loss at its unit there, which will now get about 600 million euros of new equity.

In Romania, it said a slower-than-expected economic recovery meant that it would have a 700 million euro pretax writedown of goodwill.

Erste said it had cuts its sovereign exposure to Greece, Portugal, Spain, Ireland and Italy to 0.6 billion euros as of the end of September and marked 95 percent of its exposure to market.

It said its core tier 1 ratio would remain unchanged at around 9.2 percent as operating profit helps offset the one-off charges.

It shares fell more than 10 percent by 0718 GMT.

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FOREX-Euro, high-yield currencies gain on Franco-German pledge

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Bankers warn of long crisis as rich seek comfort

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HSBC Regional CEO for Global Private Banking in EMEA Alexandre Zeller gestures during the Reuters Global Wealth Management Summit in Geneva October 5, 2011.

Credit: Reuters/Denis Balibouse

By Chris Vellacott

LONDON | Thu Oct 6, 2011 9:08am EDT

LONDON (Reuters) - Private banks are telling their clients financial volatility surrounding Europe's debt crisis will continue for at least a year as more of the continent's rich seek the comfort of household names or state backing when choosing where to bank.

"We are telling (clients) very honestly nobody knows how this is going to evolve and you have to be extremely careful in terms of your exposure," said Alexandre Zeller, head of private banking for Europe, the Middle East and Africa at HSBC.

Pierre de Weck, wealth management head at Deutsche Bank, said during the Reuters Global Wealth Management Summit that clients could expect at least another 18 months of volatility.

"If you're short term oriented and you cannot take pain, reduce risk because we are going to have a bumpy road over the next 18 months until this European sovereign crisis is resolved," he said.

The market volatility since the summer and fears over bank solvency have boosted the kind of institution often shunned during boom times, on account of perceptions they are old fashioned or conservative, bankers said at the summit in Geneva this week

"It has been an accelerating factor in the last few weeks, we have observed a flight to safety. Banks with solid balance sheets, with conservative management and approach to the markets, are seeing significant inflows on a global scale," said Zeller,

"If you look at it more locally, state guaranteed institutions are seeing significant inflows . part-nationalized banks or those with an implicit state guarantee," he said.

James Fleming, head of the international business at Coutts, a division of part nationalized British lender Royal Bank of Scotland, tracing its origins back to 1692, said it had attracted clients in the crisis seeking comfort in its history.

"All the major financial booms and busts in last 320 years, we've navigated our clients through. And I think clients see that," he said.

Yves Mirabaud, managing partner at Swiss bank Mirabaud & Cie, said the woes of large banking groups, most recently an alleged rogue trading scandal at Swiss giant UBS, was boosting the appeal of Switzerland's family-run partnerships.

"I don't know if the fact it is a family business is a selling point ... (But) when you see how the big banks have behaved the past few years I believe that the model is stronger than ever," he said.

(Reporting by Chris Vellacott; Editing by Hans-Juergen Peters)

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Oman's MB Holding looks at buys in Toronto, London

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MUSCAT | Mon Oct 10, 2011 4:06am EDT

MUSCAT Oct 10 (Reuters) - MB Holding, an Omani mining and energy group, plans to take advantage of depressed valuations to buy a stake in listed firms on the Toronto and London exchanges, its chairman said on Monday.

Mohamed Al Barwani said the Omani firm, whose operations range from oil field services and mining to tourism, was looking at companies with a market value of up to $500 million.

"A lot assets are coming on the market at lower prices ... our primary interest is oil and gas and mining," Barwani told reporters on the sidelines of a MEED conference in the Omani capital.

"We have a lot of open bank lines at the moment."

MB's Mawarid Mining LLC took a 9.98 percent stake, worth about $50.1 million, in Canada's Nautilus Minerals in August. Nautilus is using funds raised to develop a copper project off the coast of Papua New Guinea.

Barwani said the privately-owned conglomerate's main acquisition focus lay in the copper and gold sectors but it would consider attractive oil and gas production or exploration assets, particularly in Europe, to build on its operations on the continent.

"We're not looking at hostile takeovers," he said. "We're not going to take 100 percent. We're currently looking very closely into Toronto, into London."

Family-owned MB Holding Co. LLC (MB) has four wholly owned subsidiaries active in land-based oil field services operations, notably in Oman and Australasia, a small Oman-based oil and gas upstream operation, and copper mining activities, complemented by the manufacturing of drilling equipment.

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Cargolux: no deal reached on Boeing 747 delivery

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By Philip Blenkinsop and Kyle Peterson

Fri Oct 7, 2011 4:04pm EDT

n">(Reuters) - Cargolux Airlines International CLUX.UL on Friday said it has made progress but has not reached a deal to resolve a contract dispute that abruptly blocked a scheduled delivery of the first Boeing Co (BA.N) 747-8 Freighter last month.

The freight carrier said talks would continue over the weekend and that it would provide an update when a deal is reached. The company gave no estimate for when that would be.

The elongated version of Boeing's largest plane had been set for delivery September 19, but Cargolux suddenly refused to take the plane, embarrassing the world's second-largest aircraft maker.

"We continue to work with Cargolux and look forward to delivering its airplanes," said Boeing spokesman Jim Proulx.

Boeing and its customer previously had declined to identify the source of their friction.

But last week Akbar Al Baker, Chief Executive of Qatar Airways, which recently took a 35 percent stake in Cargolux, said the delay was because of General Electric Co (GE.N) engines not meeting performance guarantees.

He said the issue had been resolved, and that the plane would be delivered around October 12. But he declined to say whether Luxembourg-based Cargolux would receive compensation from GE for the engines not meeting agreed standards.

Boeing has taken 75 orders for the 747-8 Freighter, which lists at $319.3 million, according to the company's website.

Another customer, Atlas Air Worldwide Holdings (AAWW.O), last month terminated orders for three early-production Boeing 747-8 Freighter jets, citing lengthy delivery delays and "performance considerations."

Boeing also is testing a passenger version of the updated 747-8, dubbed the Intercontinental, which it plans to deliver in the fourth quarter to an unidentified VIP customer.

The upgraded 747 promises to burn less fuel, and the passenger version offers more comforts. The plane also boasts new wings, a new tail, state-of-the-art engines and a new cockpit.

Production of the 747-8 has been delayed by more than a year.

The 747 was the world's largest airplane until 2005, when EADS (EAD.PA) unit Airbus unveiled its A380.

Last month, Boeing finally made first delivery of its 787 Dreamliner, a carbon-composite plane, capping three years of delays to delivery of that plane. The lightweight, fuel-efficient 787 represents a bigger leap in technology than the revamped 747-8.

(Reporting by Philip Blenkinsop, Kyle Peterson and Tim Hepher; Editing by Steve Orlofsky, Bernard Orr)

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UPDATE 1-Glori Energy files for IPO of up to $115 mln

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* Credit Suisse, UBS, Piper Jaffray lead underwriters

* Intends to list under "GLRI" on NASDAQ (Follows alerts)

Oct 5 - Glori Energy Inc, which uses biotechnology to release oil trapped in reservoirs, filed with U.S. regulators on Wednesday to raise up to $115 million in an initial public offering of its common stock.

The company said it planned to use the net proceeds from the offering for general corporate purposes, which may include the acquisition, restoration and operation of low-producing oil fields.

The Houston-based company told the U.S Securities and Exchange Commission in a preliminary prospectus that Credit Suisse, UBS investment bank, Piper Jaffray and Robert Baird & Co were underwriting the IPO.

Investment company GTI Group and Energy Technology Ventures -- a joint venture of General Electric Co GE.N>, ConocoPhillips and NRG Energy Inc -- are some of the biggest stakeholders of Glori.

The company, which did not reveal how many shares it planned to sell or their expected price, intends to list its common stock on the Nasdaq under the symbol "GLRI".

The amount of money a company says it plans to raise in its first IPO filings is used to calculate registration fees. The final size of the IPO could be different. (Reporting by Aditi Sharma in Bangalore; Editing by Anil D'Silva)

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Hedge fund Elliott throws in towel at Actelion

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ZURICH | Wed Sep 28, 2011 8:56am EDT

ZURICH (Reuters) - Activist hedge fund Elliott Advisors has cut its stake in Swiss biotech firm Actelion to under 3 percent, in a sign it has given up trying to force change in the boardroom or push for a sale.

The hedge fund, which had built up a stake of around 6 percent, suffered a severe setback at a shareholder meeting in May when it failed to get its nominated candidates elected to the board.

It has since been lowering its stake. According to data published on the website of the Swiss stock exchange SIX on Wednesday, its investment has fallen below 3 percent.

Actelion (ATLN.VX) shares were 4 percent higher at 30.95 Swiss francs at 1251 GMT, outperforming a 0.7 percent higher healthcare sector index .SXDP.

"The shares had come under pressure recently because Elliott was selling shares. This pressure has disappeared now," a Zurich-based trader said.

Actelion shares have lost almost 42 percent of their value so far this year after soaring in the second half of 2010 on speculation Elliott might force a sale of the company.

"Elliott Advisors seems to have at least partly lost interest in Actelion," ZKB analysts said in a note. "That is positive for Actelion as the conflicts were very time-consuming and kept the management busy."

The New York-based hedge fund had criticised Actelion's strategy, blaming the management for a series of product setbacks.

But shareholders in May backed Actelion Chief Executive Jean-Paul Clozel and Chairman Robert Cawthorn.

(Reporting by Silke Koltrowitz and Paul Arnold; Editing by Erica Billingham)

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UPDATE 1-Icahn's Lions Gate stock offering on hold - source

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n" readability="48">Oct 4 (Reuters) - A secondary offering of shares in Lions Gate Entertainment Corp by affiliates of billionaire investor Carl Icahn has been put on hold due to poor market conditions, a source with direct knowledge of the process said.

Icahn, who waged a lengthy battle for control of the Hollywood studio, agreed in August to sell his stake, and he and his son Brett were due to offload up to 44 million Lions Gate shares.

Under that sale agreement, Lions Gate and MHR Fund Management, controlled by director Mark Rachesky, bought 11 million shares each from Icahn.

The offering, of 19.2 million of the remaining shares, had been expected to price this week, according to a filing with regulators by Lions Gate.

The source asked not to be identified as he was not authorised to talk to the media.

The delay comes at a time when the U.S. IPO market has stalled amid concerns about Europe's debt crisis and a weak domestic economic recovery. Several offerings have been withdrawn in recent months.

Lions Gate shares were flat at $6.84 on Tuesday on the New York Stock Exchange. (Reporting by Brenton Cordeiro in Bangalore, additional reporting by Jochelle Mendonca, Editing by Ian Geoghegan)

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