Hedge funds post sold returns

NEW YORK – Hedge funds had their best annual performance in six years in 2009 as the global economy began recovering and investor confidence returned, according to Eurekahedge Pte. The Eurekahedge Hedge Fund Index, tracking more than 2,000 funds, rose 0.9 percent in December, bringing its 12-month return to 19 percent and total assets to $1.48 trillion, the Singapore-based research firm said in a preliminary report on its website. The annual return was the highest since 2003, when the index rose 21 percent.

Dubai Financial Centre to cut fees

DUBAI – Dubai International Financial Centre, a tax-free business park, plans a "substantial" cut in fees on asset managers this year to attract more funds and become internationally competitive. "We want a substantial share of the mutual funds industry," especially those investing in the Middle East and North Africa, DIFC Chief Economist Nasser Saidi told reporters at a conference in Dubai. DIFC is also looking to attract real estate investment trusts and funds complying with Muslim banking law, he said.

Hartford boosts Q4 earnings view

NEW YORK – Hartford Financial Services Group Inc. doubled its fourth-quarter earnings forecast yesterday, sending shares of the big US life and property insurer up nearly seven percent. Hartford said it expects earning from operations of $1.45 to $1.60 per share, up from a previous forecast of 65 cents to 80 cents, partly due to lower-than-expected underwriting losses and rising account values. Analysts' average forecast was 82 cents per share, according to Thomson Reuters I/B/E/S.

FDIC floats plan to tie bank pay to fee levels

WASHINGTON – US banks whose compensation plans encourage excessive risk-taking would have to pay more for deposit insurance under a proposal floated by the Federal Deposit Insurance Corp. The proposal is very preliminary and was contentious even among the members of the FDIC board, which is made up of regulators for different-sized financial firms. The board voted 3-2 to seek public comment on the proposal. The plan would use the incentive of lower insurance premiums to reward pay structures that tie banker pay to long-term performance and include "clawback" provisions to recoup payments if they were based on performance results that do not hold up over time.

American, partners boost JAL offer by $300m

TOKYO – American Airlines and its partners in the Oneworld alliance sweetened their offer to Japan Airlines to $1.4 billion to keep the struggling national carrier from joining hands with rival Delta Air Lines. The announcement came as JAL shares plunged 45 percent to a record low, wiping out nearly $900 million in market value, on growing expectations the airline is headed for bankruptcy and a delisting from the Tokyo exchange. The carrier, weighed down by $16 billion in debt and mired in losses, said yesterday it had secured enough support from retired workers for pension benefit cuts, which was required for it to qualify for a much-needed injection of public funds.

China surprises with bank reserve hike

BEIJING – China took its strongest step towards tightening monetary policy yesterday as the world's third-largest economy roars ahead, surprising investors with an increase in banks' required reserves that rocked global financial markets. The move came just days after China reported robust trade figures and was the first time that the central bank had adjusted the ratio since a cut in December 2008, when it was loosening policy to cushion the economy from the global financial crisis. The sudden move by the People's Bank of China to boost required reserves came earlier than investors had expected and appeared prompted by concerns that a renewed surge in bank lending was flooding the economy with too much cash, risking overheating and a surge in inflation.

Now or never on $400m rescue, says Airbus

SEVILLE, Spain – Airbus took a calculated gamble on its industrial and political future by attempting to force reluctant buyers into a last-ditch, three-week negotiation to rescue the $400m military plane from cost spikes and delays. The planemaker and its parent group EADS used a key annual press conference to inject a sense of urgency into a row with nations, led by Germany, over responsibility for billions of euros of exposure that could scupper the project. EADS Chief Executive Louis Gallois said Airbus was spending €100 to €150 million euros a month to keep the project afloat.

With Barbie revamp, Mattel eyes China

HONG KONG – Mattel Inc., the world's leading toymaker, said it has seen very strong sales for its Christmas hit Fashionista Barbie doll following a recent revamp of its 50-year-old mainstay product. The US company, whose products also include Hot Wheels cars and Fisher-Price toys, has sold "more than hundreds of thousands" of Fashionista Barbie, one of the industry's hot toys this holiday season, Stephanie Cota, senior vice-president of Barbie marketing, told Reuters yesterday. The strong sales follow a 2008 overhaul for Mattel's iconic bestseller – Barbie celebrated her 50th birthday last year – aimed at unifying the brand and making the dolls more relevant for today's girls. Her comments come as Mattel pushes to build its Asia presence with major campaigns in China and India.

France pressures Renault over Clio

PARIS – The French government wants to prevent Renault, the country's second-biggest carmaker, from producing a new model abroad to safeguard jobs in France as an economic crisis and unemployment fan protectionism. Christian Estrosi, Industry Minister and mayor of the Mediterranean coastal town of Nice, summoned Patrick Pelata, chief operating officer of Renault, to his offices as the group considers producing a new version of its Clio small car in Turkey. "No, we will not let the Clio 4 be produced in Turkey. This Renault will be made in France to be sold in France," Estrosi told parliament at question time.

Airline insurance prices to rise further

NEW YORK – Aon Corp., the world's largest insurance broker, said the cost of airline insurance will continue to rise after plane crashes and accidents made 2009 the most expensive year for airline insurers since the September 11 terrorist attacks on the US. Airlines globally saw the cost of insurance rise as losses soared by more than 60 percent to $2.3 billion, surpassing insurers' income from premiums and making 2009 the third consecutive year the industry has made an underwriting loss, Aon said.