Forex Investment

VICTORIAN companies are growing like the proverbial beanstalk, adding more than $39.2 billion in value in just three months.

The market capitalisation of 164 companies included in the Deloitte Victorian Stock Exchange Index increased from $507.8 billion to $547 billion in the March quarter, outperforming the Australian sharemarket.

Deloitte partner Grant Hyde said the 7.7 per cent increase, on top of 15.7 per cent growth in the six months to December 31, showed the exceptional strength of Victorian companies.

In comparison, the S&P/ASX 200 Index gained about 6 per cent, the Dow Jones Industrial Average was up 1.7 per cent, and London’s FTSE 100 gained 0.4 per cent. Japan’s Nikkei was down 1 per cent and the Hang Seng performed similarly.

On the strength of metal prices, BHP Billiton was the biggest contributor to the index’s growth, adding almost $16 billion in value.

Telstra came in second, with its market capitalisation rising 13 per cent, or $6.7 billion.

But in percentage terms, Tattersall’s outperformed its large-capitalisation rivals, growing by 31.5 per cent over the period.

Companies with a market cap of more than $10 billion grew by almost 10 per cent. But micro-cap companies those valued between $50 million and $300 million also had a strong quarter, up 5.3 per cent.

Of the seven sectors that make up the index, it was the telecommunications, media and technology sector that gained most, growing 13.1 per cent.

Only the 21-member health, pharmaceutical and biotechnology sector went backwards, by less than 1 per cent, or $218 million.

Mr Hyde said the decrease could be explained by the exit of two companies from the index.

Mayne Pharma and Vision Systems were removed, and a combined $3.4 billion with them, with the completion of separate takeovers.

For a breakdown of the best micro-cap performers, see Monday’s Age.

http://www.tinyurl.com/3324ow

Crude oil futures plummeted more than 5% Monday, as signs of slowing economic growth raised worries that demand for petroleum products could be impaired. Futures recouped some losses at the close.

Crude’s huge loss dragged down gasoline and heating oil futures as well.

“The bottom line is that the market fears that a slowdown in the economy could slow the demand for oil,” Phil Flynn, an analyst at Alaron Trading in Chicago, wrote in a research note.

The day’s heavy losses come as industry analysts predict that Wednesday’s U.S. government petroleum inventory data will show that refined product inventories rose, while crude stocks fell last week.

On the New York Mercantile Exchange, September crude last traded at $72 in floor trading and then continued to drop in electronic trading, plunging $3.88 or 5.1% to $71.60. That was the biggest one-day intraday loss for Nymex crude since December 2004.

The contract later settled at $72.06, down $3.42, or 4.5%, the biggest percentage loss for a day settlement since Jan. 4, 2007, when prices fell 4.7%.

The day’s low was the lowest since July 6’s $71.56, with the $72.20 support giving way in late trading. Resistance was at $75.48.

From last Wednesday’s intraday high of $78.77, crude futures have plunged more than $7, or 9%.

“There is record open interest among speculators, and because of increasing jitters about potential softer (petroleum) demand, credit crunch worries and other economic concerns, the weight of this just overwhelmed the energy markets,” said Tom Knight, a trader at Truman Arnold in Texarkana, Texas.

“That has led to a significant liquidation of long positions,” he said.

In London, September Brent slid $3.58, or 4.8%, to settle at $71.17 a barrel, trading from $70.87 to $74.73.

Nymex September RBOB gasoline tumbled 10.31 cents, or 5.1%, to $1.9259 a gallon, trading from $1.92 to $2.0183. The low was the weakest since March 19’s $1.9030.

Nymex September heating oil settled at $1.9393 a gallon, falling 9.47 cents, or 4.7%, after trading from $1.9350 to $2.0348. The day’s low was the weakest since June 13, when prices fell to $1.9042.

Support charted at $2.00 per gallon for both products was breached in early trading.

The Energy Information Administration releases its oil inventory report Wednesday at 10:30 a.m. EDT.

LECEISTER (AFX) - Bank of England deputy governor Rachel Lomax today sought to manage market expectations for inflation, highlighting that the central bank will fulfil its duty of meeting the target rate over the medium term.

“We can and will keep inflation close to target on average. Short run deviations from the target should not leave anyone in any doubt about that,” she said in a speech marking the tenth anniversary of the central bank’s independence.

She also said the annual rate of CPI inflation will likely fall under the 2.0 pct target by the end of this year. After a rise to 3.0 pct in December, the CPI rate eased to 2.7 pct in January.

Still, the Monetary Policy Committee cannot work miracles and to some extent, has been a victim of it own success, she said.

“It is important that the unprecedented stability of the past decade does not lead people to believe that central banks can walk on water. They can’t,” she said.

Lomax repeatedly referred to the rise in the CPI annual rate to 3.0 pct in December as a “small movement” and criticized the “highly coloured media coverage” of the increase.

The media coverage may have had an unsettling effect on inflation expectations, a fact that the rate settling panel “can never afford to ignore”.

“Even a small movement in inflation away from target — one percentage point — has prompted some highly coloured media coverage, and may have unsettled people’s expectations about where inflation is headed in the short run.”

At the same time, measuring inflation expectations is no easy thing, after all “direct evidence of inflation expectations is very hard to come by; the measures we have are patchy and poor”, Lomax said.

The rate setting panel lifted borrowing costs unexpectedly in January, taking the benchmark refi rate to a 5-1/2 year high of 5.25 pct. One more quarter point hike this year is widely expected.

sivakumar.sithraputhran@thomson.com

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PALO ALTO, California: Mark Zuckerberg is considered the founder of Facebook, the popular social networking Web site estimated to be worth upwards of $1 billion.

Two Harvard classmates have long claimed that Zuckerberg stole the idea from them, the founders of ConnectU, and are suing him in U.S. district court in Boston.

But then there is Aaron Greenspan, yet another Harvard classmate. Lost in the glare of Zuckerbergs meteoric rise after founding the Web site, and the more recent acrimonious lawsuit over whether he stole the idea, is the apparent fact that Greenspan actually created the original college social networking system, before either side in the legal dispute. And he has the e-mails to prove it.

As a Harvard student in 2003 - six months before Facebook was started and eight months before ConnectU went online - Greenspan established a simple Web service that he dubbed houseSYSTEM. It was ultimately used by several thousand Harvard students for a variety of online college-related tasks. They included Zuckerberg, who was briefly an early participant.

An e-mail message, circulated widely from Greenspan to Harvard students on Sept. 19, 2003, describes the newest feature of houseSYSTEM as “the Face Book,” an online system for quickly locating other students. The date was four months before Zuckerberg started his own site, originally “thefacebook.com.” Greenspan retained his college e-mails and provided The New York Times with copies of his communications with Zuckerberg.

Later the two students, both of whom graduated in 2004, exchanged e-mail messages about their separate projects. When Greenspan asked what Zuckerberg was planning and suggested that the two integrate their systems, Zuckerberg responded, a month before his own service went online: “I actually did think about integrating it into houseSYSTEM before you even suggested it, but I decided that its probably best to keep them separated at least for now.”

Despite Greenspans entrepreneurial ambitions, it was Zuckerberg who was the first to move to Silicon Valley, raising venture capital and eventually transforming Facebook from a social networking site for U.S. college students into one of the fastest-growing Internet sites for both social and business contacts.

Indeed, Greenspan, who is now 24 and last year also moved to Silicon Valley, appears to be an example of what is a high-tech truism: establishing who was first with an idea is often murky at best, and it is frequently not the inventor who is the ultimate winner.

Zuckerberg declined to be interviewed, saying through a spokeswoman that he was not sure how to respond. He did not dispute the chronology of events or the authenticity of Greenspans e-mails. Zuckerberg is seeking to dismiss the UConnect suit.

Greenspan said that Zuckerbergs lawyer contacted him this year in connection with the ConnectU lawsuit but that he had declined to serve as a witness, fearing that he would become embroiled in the legal battle.

During an interview at a Bay Area caf? this week, Greenspan said he was now mostly at peace with the apparent fact that Zuckerberg would probably be the first Harvard 04 graduate to make a billion dollars.

If Zuckerberg did borrow some of Greenspans concepts, he may simply have been working in a grand Harvard tradition. After all, it was a young Harvard dropout, William Gates, and his classmate Paul Allen, who almost three decades earlier copied a version of the Basic programming language, designed by two Dartmouth college professors, to jump-start the company that would become Microsoft.

“Ive had a long time to think about this and Im not as bitter as I was a year ago,” Greenspan said. “Things like this arent surprising to me anymore.”

Still, he wants to have the last word.

He has described the events that preceded the original creation of houseSYSTEM, ConnectU and Facebook in “Authoritas,” a 306-page unpublished manuscript about his adventures and misadventures as a college student.

“This book is partly a search for justice,” he wrote in the introduction. “You dont write an autobiography in your early twenties unless theres something you need to get off your chest.”

2007-04-23 10:08:09

UK mortgage demand continued to slow in March - BBA

LONDON (Thomson Financial) - Demand for mortgages in the UK continued to

moderate in March as higher borrowing costs dampened households’ appetite for

loans, a leading industry group said today.

2007-04-23 10:00:24

Euro zone 2006 deficit 1.6 pct of GDP vs deficit 2.5; debt 45.8 pct vs 45.1

BRUSSELS (Thomson Financial) - The 13-country euro zone posted a deficit of

1.6 pct of GDP in 2006 compared with a 2.5 pct deficit in 2005, EU statistics

agency Eurostat said.

2007-04-23 09:59:57

World Bank independent report is ’searing indictment’ of Wolfowitz - report

LONDON (Thomson Financial) - An independent agency assessing the World

Bank’s effectiveness has issued a “searing indictment” on the leadership of

embattled president Paul Wolfowitz, the Financial Times reported.

2007-04-23 09:59:02

Hong Kong March CPI up 2.4 pct yr-on-yr vs up 0.8 pct in Feb

HONG KONG (XFN-ASIA) - The composite consumer price index (CPI) in March was

up 2.4 pct from a year earlier, compared with 0.8 pct increase in February, the

government said.

2007-04-23 09:43:34

UK March M4 money supply up 12.8 pct year-on-year; M4 lending up 12.7 bln stg

LONDON (Thomson Financial) - The Bank of England said provisional estimates

for M4 money, a broad measure of money supply, showed a rise of 1 pct in March

from February on a seasonally adjusted basis, for a 12.8 pct year-on-year rise.

2007-04-23 09:30:20

UK March mortgage lending highest ever for the month - CML

LONDON (Thomson Financial) - The UK housing market was strong in March with

gross mortgage lending registering a record performance for the month, the

Council of Mortgage Lenders said.

2007-04-23 09:30:09

UK mortgage lending hit highest ever level for month of March - BSA

LONDON (Thomson Financial) - The UK saw the biggest level of mortgage

lending for any March on record last week, although signs that the market is

beginning to cool are seen in a fall in the seasonally-adjusted number of

mortgage approvals, a leading industry group said today.

2007-04-23 09:16:48

Japan mulls investment fund to manage 909 bln usd of foreign reserves - report

LONDON (Thomson Financial) - Japan is looking at setting up a special state

investment fund to manage part of its 909 bln usd of foreign reserves, in a bid

to improve financial returns and mitigate the long-term impact of the ageing

population, the Financial Times reported.

2007-04-23 06:22:00

Japan March supermarket sales fall 1.5 pct yr-on-yr, down for 15th straight mth

TOKYO (XFN-ASIA) - Sales at supermarkets open for at least one year declined

1.5 pct in March from a year before to 1.128 trln yen, falling for the 15th

month in a row, as a sharp drop in temperature during the month hit sales

of spring clothing, the Japan Chain Stores Association said.

2007-04-23 02:52:37

Australia Q1 producer price index steady on Q4

SYDNEY (XFN-ASIA) - The final producer price index (PPI) for commodities,

excluding exports, was unchanged in the March quarter from the December quarter,

with a 0.1 pct increase in the domestic index but a 1.1 pct fall in the imports

component, the Australian Bureau of Statistics (ABS) said.

2007-04-23 02:42:54

Australia Q1 producer price index steady on Q4 versus consensus 0.6 pct rise

SYDNEY (XFN-ASIA) - The final producer price index (PPI) for commodities,

excluding exports, was unchanged in the Marcht quarter from the December

quarter, with a 0.1 pct increase in the domestic index but a 1.1 pct fall in the

imports component, the Australian Bureau of Statistics (ABS) said.

2007-04-23 01:35:57

China to step up controls on funds entering stock market - report

BEIJING (XFN-ASIA) - China will step up efforts to rein in rapid growth in

the stock market, with controls intended to bar those funds that should not be

invested in stocks, the official China Securities Journal reported, citing Zhang

Yutai, deputy director of the State Council’s Development and Research Center.

2007-04-23 00:01:08

UK businesses keep economy booming but risks are underestimated - ITEM Club

LONDON (Thomson Financial) - UK businesses are increasingly driving the

economy’s robust growth, although companies and individuals are too relaxed

about the risks associated with their borrowing and spending habits, a leading

economic consultancy said today.