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New Zealand house prices climbed for a fifth month in February, fueled by increased demand for property in the nation’s largest cities as the economy emerges from a recession.

Prices rose 5.5 percent from a year earlier, following a 4.4 percent annual gain in January, according to a Quotable Value New Zealand Ltd. index. Prices in the 17 largest cities rose 7.3 percent, the Wellington-based government valuation agency said in an e-mailed report.

Further gains in house prices may be curbed by the prospect of higher interest rates and changes to taxation of investment property that will be announced in the May 20 budget. Prices in rural areas fell in February and the pace of increases in provincial cities and some urban areas is slowing, said Glenda Whitehead, valuation manager at Quotable Value.

“Values in the last few months have flattened in many areas,” she said. “The market remains patchy and buyers cautious.”

Reserve Bank Governor Alan Bollard said on Jan. 28 he expected to raise the official cash rate from a record-low 2.5 percent around the middle of the year.

Property sales and listings of houses for sale improved in February as the market approaches its busiest time of the year in late summer, Whitehead said.

“We expect values to stabilize over the coming months, reflecting the ongoing uncertainty around employment, pending interest-rate rises and continued tight lending criteria,” she said. “We may see more certainty in the market after the budget announcement.”

Unemployment

Damping consumer confidence, New Zealand’s jobless rate rose to a 10-year high of 7.3 percent in the fourth quarter. Banks are taking a careful approach to lending and are requesting fresh valuations where the borrower has a low deposit, Whitehead said.

The number of home-loan approvals in the three months ended Feb. 26 slumped 20 percent from a year earlier, according to central bank figures published March 3.

A separate report prepared by the Real Estate Institute last month said that house prices fell for a second month in January. The institute releases February figures on March 12.

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Shopping Web site Groupon, which offers a daily deal on the local goods, services and cultural events, launched in Memphis today.

Using the principles of collective buying, Groupon negotiates deals with local businesses and sends free daily e-mails to subscribers notifying them of the deals.

“With its vibrant Mid-South culture, Memphis offers food, music and activities you won't find anywhere else,” Groupon’s founder Andrew Mason said in a statement. “We look forward to introducing local residents to the best businesses in Memphis and saving them money on their favorite things to do.”

The deals are only activated if a minimum number of people agree to buy, encouraging subscribers to share the promotion with family and friends via social media tools such as Facebook and Twitter. Guaranteeing a large number of customers provides an incentive for companies to offer good deals, the company says, and has helped more than 2 million subscribers save nearly $80 million.

Memphis is the 35th city entered by Groupon, which was launched in November 2008 in Chicago. The company plans to be in 80 cities by the end of 2010.

“Groupon brings buyers and sellers together in a fun and collaborative way,” Mason said. “We offer the consumer a great deal they can’t get anywhere else and deliver the sales directly to the merchant.”

Groupon is a project of The Point, an online community launched in 2007 for organizing group action.

Consumers interested in its service can visit www.groupon.com. Businesses wanting their goods or services featured can visit www.grouponworks.com.

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Freer trade can help create jobs and support economic growth, and tariff-cutting accords should not be scaled back on account of the global downturn, senior U.S. and other officials said on Monday.

World Trade Organization Director-General Pascal Lamy told a WTO ministerial conference that completing the long-running Doha round would strengthen the global trading system that had helped countries come through the crisis.

But trade liberalization had to be backed by other domestic policies to absorb the shocks of increased competition, he told the opening session of the conference.

Launched eight years ago to open markets and help developing countries prosper through more trade, the Doha talks have been extremely tortuous. Political leaders have called for an accord in 2010, but a deal is not yet ready.

“The moment of truth is fast approaching when you will have to decide whether the 2010 target can be met,” Lamy told trade ministers from the WTO’s 153 members.

“Political leaders are practically unanimous that they want to meet it, but reaffirmation is not enough. Now we need action, concrete and practical action, to close the remaining gaps.”

U.S. Trade Representative Ron Kirk told Reuters that the ministers and senior officials gathered in Geneva needed to make sure trade can power continued growth and job creation.

“It’s an important opportunity for us to reaffirm the valuable role that liberalizing trade around the globe has in sustaining and promoting growth,” he said.

Many countries hold the United States responsible for the lack of progress in the Doha talks, as issues from healthcare to Afghanistan have higher priority in Washington.

But Kirk told the conference the United States was ready to move into the final stages of negotiations — provided agreement led to real new market opportunities in manufacturing and services as well as farming, the main focus of poor countries.

He repeated America’s call for big emerging countries like China and India to open their markets further to secure a deal.

Outgoing EU trade chief Catherine Ashton expressed concern that negotiations were not moving fast enough to reach agreement in 2010 and said the European Union was committed to a comprehensive deal in the months ahead.

LACK OF REGULATION

Criticism of the WTO and its free trade agenda has increased over the past year following global economic turmoil which many have attributed to a lack of oversight and regulation of financial services.

This week’s gathering falls on the 10th anniversary of a Seattle WTO ministerial meeting made famous by violent protests that contributed to the collapse of the conference. 

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CHICAGO–When the U.S. holiday shopping season kicks off the day after American Thanksgiving, retailers hope to see millions of less frightened, more bargain-hungry customers cross their thresholds.

Industry analysts expect a strong turnout Black Friday, which falls on Nov. 27 this year, as deep discounts lure shoppers after more than a year of subdued spending. They add that consumers in the U.S. still remain cautious.

"Given what we know about consumer shopping patterns, even this month, I would suspect, it will turn out to be a very strong performance," said Michael Niemira, chief economist of the International Council of Shopping Centers.

Special promotion days have been big drivers of sales, he said, pointing to the lift retailers saw on the Nov. 11 Veteran’s Day holiday.

Retailers and websites dedicated to Black Friday deals have leaked sales plans earlier than usual in the hopes of sparking demand for flat-panel televisions, toys and other goods after experiencing 2008, the worst holiday season in decades.

In 2008, holiday shopping started just weeks after the global financial crisis froze lending.

"Certainly, last year was a year of tremendous uncertainty going into Black Friday because we were right in the middle of the storm," said Chris Donnelly, a partner in Accenture’s retail practice.

More than 172 million shoppers visited stores and websites from Thanksgiving Day through Sunday last year, up from 147 million in 2007, according to the National Retail Federation. Average amount spent by shoppers over that year-ago weekend rose 7.2 per cent to $372.57 (U.S.) per person.

Even those numbers did not prevent the sales slide of 2.8 per cent for the entire shopping season last year, the first since the federation started tracking data in 1995.

The retail umbrella group has not issued a Black Friday forecast but it expects 2009 holiday sales to rise 1 per cent. The shopping centres council forecasts a 1-2 per cent rise.

With retail sales not stellar, but stabilizing, it’s hoped "as we go into the holiday season, that we are going to see some stability as well," Donnelly said.

Niemira, for one, refers to Black Friday as "Bargain Friday" since it is known for deals.

Sixty-one per cent of chief marketing officers at leading U.S. retailers, polled by BDO Seidman, expect Black Friday sales to be flat, while 33 per cent predicted an increase.

Market research firm IBISWorld expects total retail sales over the coming Black Friday weekend to rise 2.8 percent to $42.9 billion. It expects 76.9 million people to swarm into retail stores on Black Friday alone.

Fewer retailers are vying for that business. Bain & Co. reports 27 retailers went bankrupt in 2008, with 18 more gone this year. Together, those chains used to account for about $25-$30 billion in sales.

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The U.S. official who slashed pay for 25 top financial executives on Thursday said regulatory proposals to rein in excessive compensation are like plain “vanilla prescriptions” that might work or might not.

U.S. pay czar Kenneth Feinberg told a panel at New York University law school that his rulings drew so much public interest because they concerned pay for specific individuals, while other regulators have offered only general proposals. He said those proposals sound good, but have not been tested.

“As far as I know, we are the only one who have actually calculated pay,” Feinberg, the Obama administration’s point man on pay, said during the panel discussion about the future of regulation and the capital markets.

Last month, Feinberg slashed compensation for the top 25 earners at the seven companies for the final two months of the year — when bonuses are typically paid.

The seven companies are American International Group Inc, Bank of America Corp, Citigroup Inc, General Motors Co GM.UL, Chrysler, GMAC and Chrysler Financial.

Feinberg has said financial firms should be prepared to face tough scrutiny from regulators on pay plans.

The Federal Reserve last month issued bank pay guidelines aimed at curbing the type of reckless risk-taking officials say contributed to the crisis that nearly brought down the financial system last year payday loan in advance.

Top bank executives met with Fed officials on Monday to discuss the process for the incentive compensation arrangement reviews that are part of the new guidelines.

Feinberg said his office has met regularly with Fed officials and has also met with officials from the Securities and Exchange Commission and with Sheila Bair, chairman of the Federal Deposit Insurance Corp.

Feinberg was appointed as the pay czar in June amid public outrage that companies bailed out by the government were still paying huge bonuses.

Before his first wave of rulings, Feinberg joked he might need to move to Pluto because of the reaction he expected. But on Thursday he said he felt the reaction was “satisfactory.”

The panel also included Neil Barofsky, the special inspector general for the U.S. Treasury’s Troubled Asset Relief Program, which was used to bailout banks amid the financial crisis.

Feinberg is now in the process of ruling on the compensation structures that will apply to the 26th to 100th highest-paid workers at the seven firms. (Reporting by Steve Eder; Editing by David Gregorio)

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Fruit and vegetable producer Fresh Del Monte Produce Inc posted a higher-than-expected quarterly profit, mostly on tax benefits and lower interest expense, but its net sales missed expectations due to weak demand across most of its businesses.

For the third quarter, net income attributable to the company was $28.6 million, or 45 cents a share, compared with $29.3 million, or 46 cents a share, a year ago.

Excluding items, quarterly profit was 61 cents a share.

Net sales fell 8 percent to $766.2 million. Banana sales rose 5 percent, but this was offset by declining sales of most fresh fruits and vegetables and prepared food.

Analysts on average were expecting earnings of 37 cents a share, before special items, on revenue of $819 million, according to Thomson Reuters I/B/E/S.

The company, whose rivals include Chiquita Brands International Inc and the recently listed Dole Food Co Inc, saw tax benefits of $12.8 million in the quarter, compared with tax expenses of $2.6 million last year.

Fresh Del Monte’s shares closed at $21.92 Monday on the New York Stock Exchange.

(Reporting by Mihir Dalal in Bangalore; Editing by Himani Sarkar)

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An investment arm of Goldman Sachs is in talks with Chinese car maker Geely Automotive, which has been linked with both Volvo and Opel, to buy about $250 million of the company’s convertible bonds and warrants, two sources said.

“The two sides have basically agreed on the investment in Geely already, but have yet to work out some technical details,” one source with direct knowledge of the deal told Reuters.

Geely, China’s 10th largest vehicle maker, said this month its parent was considering a bid for Ford’s Swedish car brand Volvo with a local government-backed investment firm.

A successful deal would boost Geely’s profile and give it access to Volvo technologies which it needs to upgrade its cars.

A source told Reuters last week that Geely’s parent also had approached Canadian auto parts maker Magna International about a potential production partnership on Opel. General Motors agreed earlier this month to sell a 55 percent stake in car maker Opel to a group led by Magna.

Trade in Geely shares was suspended last week as the company said it was considering a convertible bond and warrants issue, though Geely Executive Director Lawrence Ang told Reuters the issue was not related to Volvo.

Geely would use the proceeds from a Goldman deal to boost its production capacity — including adding 150,000 units a year in the central province of Hunan, which can now produce 50,000 units, one of the sources said allstate insurance.

The sources declined to be named as the talks were not yet public. Geely and Goldman officials declined to comment.

Geely had said previously it would buy three new plants from its parent, with a combined annual capacity of 165,000 units, once construction was completed.

Car sales in China, the world’s largest auto market, have grown sharply this year, boosted by Beijing’s policy initiatives, including sales tax cuts on small cars and subsidies for rural buyers.

Automakers from GM to Volkswagen are building new plant or setting up new China joint ventures.

Geely, which competes against Chery Automobile and other local brands, has current annual production capacity for 370,000 cars, according to data provided by a Geely representative.

The car maker, based in the eastern city of Hangzhou, had said previously it aimed to add capacity of 315,000 in phases, including taking over its parent’s three facilities.

Geely’s January-August car sales rose 35 percent to more than 185,000 units, equivalent to 74 percent of its full-year target, another company executive said.

(Reporting by Fang Yan and Alison Leung; Editing by Jacqueline Wong and Ian Geoghegan))

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OTTAWA–Canada's auto warranty program designed to help out the troubled North American car industry ended today and it didn't cost taxpayers a dime, Industry Minister Tony Clement says.

"It was never activated because it was conditional upon either Chrysler or GM going into (bankruptcy protection) in Canada and neither of them happened," Clement told the Toronto Star today.

"Anytime we can save money for the taxpayers that's a good day," Clement said.

Back in April Clement announced a $185 million program to guarantee warranties for new cars purchased from either company, but since neither company had to seek the protection of the Companies' Creditors Arrangement Act, consumers didn't have to turn to the government program.

"It was necessary because there was some uncertainty at the time about whether these companies were going to go into bankruptcy protection and whether it was going to affect their car sales if people didn't think their warranties were going to be covered," Clement told the Star free credit report and score.

The Canadian warranty program paralleled the U.S. warranty program announced by President Barack Obama on March 30, 2009. The U.S., where the two companies did go into bankruptcy protection, has also since terminated its program.

Clement said the good news is that Canadian car sales are up 5.3 per cent year over year and North American built cars sales were up 6.3 per cent in the passenger category.

"I think it will be an industry that will be smaller but it will be sustainable," he said.

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MONTREAL – The airline industry says it will not turn a profit until after 2011, comparing its current woes to the economic devastation wreaked by the 9-11 terrorist attacks.

The International Air Transport Association, a Montreal-based association of airlines, painted a grim picture Tuesday of an industry in crisis caused by low demand and higher-than-expected fuel prices.

CEO Giovanni Bisignani told a Washington news conference that expected losses in 2009 would be $US2 billion worse than previously forecast, with total projected losses of $11 billion in 2009 and $3.8 billion next year.

One industry-watcher doesn't expect any real improvement for Canada's airlines until the economic recovery takes hold. Canadian aerospace analyst Cameron Doerksen says there do appear to be some signs of economic stability.

"That's not to say that things are rebounding for Canadian airlines – but they're not getting worse," he added.

"But at the end of the day, for the airlines in Canada, as is true for most airlines, it's really an economic recovery that's going to drive their results and drive a rebound."

IATA compares the current climate to 9-11.

Bisignani said the combined projected losses for this year and 2008 would be US$27.8 billion – bigger than for 2001 and 2002. Losses for 2001-02 were US$24.3 billion, as the Sept. 11, 2001, terrorist attacks triggered a precipitous drop in air travel.

"Combining last year and this year, losses are $27.8 billion and that is larger than . . . after Sept. 11," Bisignani said.

"This industry is in a massive crisis. . . The global economic storm may be abating, but airlines have not yet found safe harbor."

The formula used by IATA includes the full 2001 and 2002 calendar years, meaning it excludes the impact of the terrorist attacks from eight months out of the 24-month sample. The economy had already started slowing down earlier in 2001, causing some weakness in the airline sector before the attacks.

The market meltown of 2008, which sparked the worst period of the current recession, also arrived late in the year. Bisignani said revenues for 2009 will be US$80 billion below last year's levels.

Passenger and cargo revenues are expected to fall in 2009, led by a 20 per cent drop in demand for business travel. Passenger traffic is also expected to decline by four per cent, and cargo by 24 per cent, for 2009.

IATA says the situation is being made worse by the rising cost of fuel. Spot oil prices have been driven up sharply in anticipation of improved economic conditions.

The air association says the world's airlines, as a whole, last turned a profit of US$3.7 billion in 2000.

IATA, which represents 230 companies including Air Canada, doesn't expect profits until after 2011 – at the earliest.

"Revenues are not likely to return to 2008 levels until 2012 at the earliest," Bisignani added.

IATA warns of more bankruptcies among the world's 2,000 airlines in the coming months.

In an illustration of that risk, Japan Airlines Corp. announced drastic job cuts Tuesday as it faced severe financial difficulties. The carrier said it would slash its work force by 14 per cent.

Bisignani noted that 29 airlines have gone out of business since 2008 and that Air Canada went through a "very, very difficult moment" at the beginning of the year.

The Canadian carrier managed to negotiate concessions with its unions and got new financing.

Bisignani also slammed Toronto's Pearson International airport for its costly renovations, saying investments in infrastructure are welcome but they must be economically viable.

"Too many times we see cathedrals around in the world," he said.

"They have a massive investment to pay and that is making the (Toronto) airport less competitive."

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The Obama administration on Friday stepped up its efforts to curb environmental damage from surface coal mining, announcing plans to give 79 permit applications in four states additional scrutiny.

The U.S. Environmental Protection Agency said it wants to make certain the proposed mines won’t cause water pollution and violate the Clean Water Act before permits are issued by the Army Corps of Engineers.

Most of the permits are for mines in Kentucky, the nation’s No. 3 coal-producing state. Also on the list are operations in No. 2 coal producer West Virginia, Ohio and one mine in Tennessee.

The action targets a practice known as mountaintop removal mining. The highly efficient mining method involves blasting away mountaintops to expose multiple coal seams and, in most cases, burying intermittent streams with excess rock.

"Release of this preliminary list is the first step in a process to assure that the environmental concerns raised by the 79 permit applications are addressed," EPA Administrator Lisa Jackson stated.

Environmental groups cheered the administration, which they’ve criticized for not banning such mining altogether.

"We applaud this action," Sierra Club spokeswoman Mary Anne Hitt said.

The coal industry says the decision jeopardizes tens of thousands of jobs.

"By deciding to hold up for still further review coal mining permits pending in West Virginia, Kentucky, Ohio and Tennessee, the agency damages a weak economy struggling to recover in the worst recession in postwar history," National Mining Association President Hal Quinn said in a statement.

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