By Soyoung Kim and Clare Baldwin Soyoung Kim And Clare Baldwin – Wed Nov 3, 7:57 pm ET

NEW YORK (Reuters) – General Motors on Wednesday finalized terms for a stock offering of about $13 billion to repay a controversial taxpayer-funded bailout and reduce the U.S. Treasury to a minority shareholder.

GM’s filing with the U.S. Securities and Exchange Commission is the final step before it begins marketing what is expected to be one of the largest-ever IPOs. The investors are expected to span the globe and include sovereign wealth funds.

The automaker plans to sell 365 million common shares, or 24 percent of its common stock, at $26 to $29 each, raising about $10 billion at the midpoint, according to updated initial public offering papers filed with the SEC.

In addition, GM said it planned to sell about $3 billion of preferred shares that would convert to common shares under mandatory provisions, a less risky form of equity that could attract dividend and growth-fund investors.

The IPO would value GM at just over $41 billion at the midpoint of the price range, making it all but certain that U.S. taxpayers would face a loss on the automaker’s still controversial bailout. GM needs a market value of roughly $70 billion if U.S. taxpayers are to break even.

At $41 billion, GM would also be priced at about a 16 percent discount to its smaller but more successful rival Ford Motor Co, which has a market capitalization of more than $48 billion.

“That would make sense,” said Bernie McGinn, chief investment officer at McGinn Investment Management in Alexandria, Virginia, who owns Ford stock. “Ford has done everything right, and GM is a year out of bankruptcy and it has a new CEO.”

McGinn said the discounted value for GM also reflected the urgency for the Obama administration to exit its investment in the U.S. automaker.

“I think this is a political thing. It’s being driven by Washington,” he said. “They just want to get out. And if you talk about eating $10 billion in losses, this is a city that can eat trillions of dollars.”

One source familiar with the offering said, “(The Treasury) decided they wanted a massive upside.” The source was not authorized to speak with the media and declined to be named.

“The tough actions that the Administration took to get the auto industry back on its feet and save over one million jobs played a crucial role in putting our economy on the path to recovery. Today’s development represents another important step forward in our oft-repeated policy of exiting these investments as soon as practicable and recovering funds on behalf of the American taxpayer,” the U.S. Treasury said in a statement.

GM, which will have 1.5 billion outstanding common shares following a planned 3-for-1 stock split in the IPO, would need to trade at roughly $50 per share in the market to reach the $70 billion break-even threshold.

The Treasury, which holds a 60.8 percent stake in GM as a result of its $50 billion bailout, will take a loss of up to $4.9 billion on its sale of shares in the IPO.

The Treasury plans to cut its stake to just over 43 percent, excluding the overallotment option.

Treasury officials led by former Lazard Freres and Co banker Ron Bloom have indicated that they are willing to take an initial loss on GM as part of the Obama administration’s stated goal of exiting from the government’s investment as “quickly as practicable.”

Underscoring the political sensitivities still surrounding GM’s bailout, Senator Chuck Grassley in a statement on Wednesday urged the Treasury to ensure “taxpayers get their money in full.”

TAXPAYERS’ ODDS

Some analysts said a rally in GM shares — and a stronger recovery in global auto sales — could still bring the U.S. taxpayer-funded investment closer to break-even.

“It’s only the starting point,” IHS Automotive analyst Aaron Bragman said of the initial valuation of GM and the paper loss for Treasury. “GM knew it was not going to get it all back at once.”

GM shares would have to gain over 80 percent after the IPO to allow the U.S. government to break even on its investment before accounting for banking fees. By comparison, shares in Ford have gained 52 percent this year.

GM executives say the company’s restructuring through its 2009 bankruptcy has allowed the company to break even at around 11 million in annual U.S. auto sales — a figure close to the near 30-year lows that the industry saw in 2009.

U.S. auto sales are expected to rise to about 11.5 million this year from 10.4 million last year, and are widely expected to recover to the pre-recession level of more than 15 million units within the next few years.

GM, the top U.S. automaker by sales, said earlier on Wednesday that it expected third-quarter earnings of $2.1 billion and that it would turn a “solid” profit for the full 2010 year.

BIGGEST U.S. IPO SINCE VISA

If everything goes as planned, the offering would be the largest U.S. IPO since Visa Inc’s $19.7 billion IPO in 2008.

GM’s underwriters could sell an additional 54.75 million common shares and 9 million preferred shares if the IPO attracts robust investor demand, raising another roughly $2 billion and potentially taking the total IPO amount to as much as $15.65 billion, the company said in the amended prospectus.

GM will use some charter flights for its executives on its visits to prospective investors over the next two weeks, GM said on Wednesday.

GM and its U.S.-based rivals Chrysler and Ford sparked public outrage two years ago when executives flew to Washington on chartered jets to ask the federal government for money.

Once a blue-chip stock, GM is expected to return to the New York Stock Exchange under the “GM” ticker symbol as well as a listing on the Toronto Stock Exchange. GM is expected to price its IPO on November 17 and begin trading on November 18, sources said.

The governments of Canada and Ontario plan to sell down their combined stake to 9.64 percent from 11.67 percent and the United Auto Workers VEBA trust is expected to reduce its stake to 15.33 percent from 19.93 percent.

GM plans to contribute $4 billion cash and $2 billion of common stock to its pensions after the IPO to address an area of investor concern.

Morgan Stanley, JPMorgan, Bank of America Merrill Lynch and Citi are leading the underwriters on the offering. UBS, which was listed as an underwriter as recently as GM’s last S-1 filing on October 29 was not listed in Wednesday’s filing. It was not immediately clear why UBS is no longer part of the syndicate and UBS declined comment.

(Reporting by Soyoung Kim, Clare Baldwin and Jonathan Stempel in New York, David Bailey, Kevin Krolicki, Deepa Seetharaman, and Bernie Woodall in Detroit; editing by Gary Hill and Andre Grenon)

Local businesses are expecting more opportunities to open up for export in the near future as several free trade agreements (FTA) between Vietnam and other countries are being negotiated.

In mid-October, the first session of a multi-national working party representing Vietnam, Russia, Belarus and Kazakhstan took place in Hanoi to prepare for the first researches on the impact of a free trade area between Vietnam and the Russia-Belarus-Kazakhstan customs alliance.

According to Dang Hoang Hai, Head of the European Market Department under the Ministry of Industry and Trade (MoIT), if a FTA is established, Vietnamese businesses will have more opportunity to trade in the Eastern European market as they do not face direct competition. In particular, agricultural products – a Vietnamese strongpoint – will get a better foothold in this market.

Also this month, the third round of negotiations on the trans-Pacific Partnership Agreement (TPP) was held in Brunei with eight countries taking part, including Singapore, Brunei, Australia, the US, New Zealand, Chile, Peru and Vietnam. The TPP is expected to stimulate growth for businesses that operate in the Asian-Pacific region, which is seen as one of the world’s most dynamic markets.

According to the President of the Vietnam Garments and Textiles Group (Vinatex) Le Quoc An, if Vietnam becomes a TPP member, garments manufacturers will have an enormous opportunity, especially in the US and South American markets. “Therefore, businesses are waiting expectantly for this agreement to be signed,” he said.

In addition, Vietnam is also actively preparing for FTA negotiations with Chile .

However, Vietnamese businesses are still weak in taking advantage of tariff preferences from FTA. They have failed to form alliances with regional businesses to make the most of tariff preferences and access to new technologies.

It is difficult for Vietnam to establish a new export market or find markets with large consumer demands, say experts, who emphasised the importance of taking advantage of tariff preferences in large markets such as Eastern Europe, the EU, the US, Japan, the Republic of Korea and India, who Vietnam will establish FTAs with.

They recommended that Vietnamese businesses should keep a close watch on FTA negotiations between Vietnam and the aforementioned partners to prepare to take advantage of these markets.

According to the MoIT, Vietnam, together with ASEAN, has to date signed and implemented FTAs with six major partners in East Asia, including the ASEAN-China Free Trade Agreement (ACFTA), the ASEAN-RoK Free Trade Agreement (AKFTA), the ASEAN-Japan Comprehensive Economic Partnership (AJCEP); the ASEAN-Indian Free Trade Agreement (AIFTA) and the ASEAN-Australia-New Zealand Free Trade Agreement (AANZFTA).

These agreements were valued as essential for Vietnam to increase its export turnover.

Source: http://www.vietnamnews.us/markets/vietnam-expects-more-promising-export-markets/

By Aileen Wang and Tom Miles Aileen Wang And Tom Miles  – Tue Oct 19, 11:08 am ET

BEIJING (Reuters) – China’s central bank surprised on Tuesday with its first increase of interest rates in nearly three years, a move that reflects concern about resurgent asset prices and could mark the start of a more aggressive phase of monetary tightening in the world’s fastest-growing major economy.

The People’s Bank of China said it was raising benchmark rates by 25 basis points, taking one-year deposit rates to 2.5 percent and one-year lending rates to 5.56 percent.

If there was ever any doubt about China’s role in driving the stuttering global economic recovery, the impact was felt by markets across the board. Oil and gold prices tumbled, stocks turned negative in Europe and the dollar jumped.

“The interest rate rise is entirely outside of market expectations,” said Zhu Jiangfang, chief economist at CITIC Securities in Beijing.

“The recent rise in headline inflation has put the real rate into negative territory. And I think that’s why the central bank needs to raise interest rates in such a hasty way,” he said.

Some analysts said the rate increase also suggested a deal was in place between China and the United States to strengthen the yuan and put an end to worries about a currency war of competitive devaluations ahead of upcoming Group of 20 meetings.

But others said just the opposite was the case — with higher rates, Beijing can afford to rely less on currency appreciation to keep the economy on an even keel.

Finance ministers of the G20 major economies will aim to tackle the currency strains in a meeting in South Korea starting on Friday. The country also hosts a G20 leaders’ summit in November.

Although announced by the People’s Bank of China, the decision to increase rates would have received approval from the highest echelons of Chinese power, with Premier Wen Jiabao likely signing off on it.

Once a consensus has been forged in Beijing to raise or cut rates, past experience shows that moves often come in bunches.

In the view of some, it is about time for China to embark on a more aggressive tightening cycle. To date, it has relied on lending restrictions and banks’ reserve requirements to keep growth from boiling over.

“Fundamentally, policy rates are just too low for an economy that’s growing around 10 percent. To avoid bigger distortions, China needs to start moving rates to more appropriate levels,” said Rob Subbaraman, an economist with Nomura in Hong Kong.

“China’s economy looks as though it’s decoupling from other major economies, and its policies should as well,” he said.

DEBATED BUT UNEXPECTED

A number of leading economists, including some advisers to the central bank, have urged an increase in deposit rates to keep savers’ returns in positive territory.

China reported consumer inflation of 3.5 percent in the year to August and economists expect that the pace climbed to 3.6 percent in September.

Still, the increase in rates is surprising given that several top leaders have recently expressed confidence that inflation is under control, and have said that higher rates would potentially suck in speculative capital from abroad.

“They did it now likely because Thursday’s GDP and CPI data is too strong for them,” said Dariusz Kowalczyk, senior economist at Credit Agricole CIB in Hong Kong.

China is due to report third-quarter GDP and a suite of economic data for September on Thursday. The consensus forecast is that economic growth slowed to 9.5 percent year-on-year last quarter, down from 10.3 percent in the second quarter.

Economists polled by Reuters last month had expected an extended period of interest rate stability in China, with no increase until the second quarter of 2011.

COLD WATER ON MARKET?

Propelled in part by these expectations of low rates, Chinese asset prices have shown signs of taking off.

The Shanghai stock index, a laggard for much of this year, has jumped nearly 16 percent in the past nine trading days. And despite a months-long campaign to clamp down on the real estate market, housing inflation has started to perk up again.

“This is a bucket of cold water for the market,” said Zhang Yuheng, an analyst with Capital Securities in Shanghai. “The hike itself is not a big one, but the psychological impact is big as the expectations for more rate hikes will appear.”

Higher rates make yuan-denominated assets more attractive and could in theory place upward pressure on the Chinese currency. Until a fall on Monday, the closely managed currency had risen 2.5 percent against the dollar since the end of August, its quickest pace of appreciation since a 2005 revaluation.

“It certainly leads to speculation that the U.S. and China are in some sort of a deal which will perhaps see the U.S. taking a more gradualist approach to QE (quantitative easing),” said Simon Derrick, head of forex research at Bank of New York Mellon.

The speculation was also fueled by recent events. U.S. Treasury Secretary Timothy Geithner said he had delayed a report due last Friday into whether Beijing manipulates the yuan’s value to win time to drum up support within the G20 for “improvements” in the currency policies of China and other emerging economies.

On Monday, he said the United States would not devalue the dollar to gain an export advantage.

Beijing, and other emerging markets, complain that loose money in the United States is generating an influx of speculative capital and weakening the dollar, while Washington and others say a deliberately undervalued yuan gives China an unfair trade advantage.

But Ting Lu, an economist with Bank of America-Merrill Lynch in Hong Kong, said the exchange rate’s rise would be capped.

“The People’s Bank of China will firmly control the pace of yuan appreciation once pressure from U.S. politicians is alleviated,” he said.

(Additional reporting by Reuters bureaux around the world; Writing by Simon Rabinovitch: Editing by Neil Fullick)

by Andrew Beatty Andrew Beatty   – Wed Oct 6, 4:57 pm ET

WASHINGTON (AFP) – Rich and emerging economies must dramatically change the way they trade with each other or risk throttling the global economic recovery, the International Monetary Fund warned on Wednesday.

In its latest economic outlook, the IMF said growth would slow more than previously expected in 2011, as the United States, Europe and Japan continue to struggle and China remains overly dependent on exports.

The recovery is “neither strong nor balanced and runs the risk of not being sustained,” warned Olivier Blanchard, the IMF’s chief economist.

Painting a picture of a faltering developed world — where business is still struggling to pick up where government crisis spending left off — the IMF predicted global growth would be pared back to 4.2 percent next year.

That is less than the 4.8 percent growth expected this year and 0.2 point below the IMF’s July forecast for 2011.

While restocking had helped short-term growth in the United States, Japan and some parts of Europe, the IMF said advanced economies were still reliant on dwindling government spending.

“For the past year or so, inventory accumulation and fiscal stimulus were driving the recovery. The first is coming to an end. The second is slowly being phased out,” the IMF said in its twice-yearly World Economic Outlook.

The IMF slashed its US growth forecast for 2011, to 2.3 percent, lopping 0.6 points off its July forecasts.

The growth forecast was also trimmed for this year, down 0.7 points to 2.2 percent, with warnings of “a weak recovery in coming quarters.”

The IMF recommended that some central banks, like the US Federal Reserve, continue their ultra-loose monetary policies, but warned the impact of such policies would now be limited.

“Not much more can be done, and one should not expect too much from further quantitative or credit easing.”

Increased exports must take up the slack, it added.

“Many advanced economies, most notably the United States, which relied excessively on domestic demand, must now rely more on net exports.”

Meanwhile the IMF said that rich countries, many of which are heavily in debt, would have to trim spending and balance their books in the medium term.

“Fiscal stimulus has to eventually give way to fiscal consolidation, and private demand must be strong enough to take the lead and sustain growth.”

There was a particular warning for Europe, with “severe external financing constraints” forecast for debt-laden Greece, Ireland, Portugal and Spain.

The picture could not be more different for emerging markets like India and China, where growth continues, but is limited by an over-dependence on exports to Europe, Japan and the United States that must be addressed.

“Emerging market economies with large current account surpluses must accelerate rebalancing. This is not only in the world economy’s interest, but also in their own.”

Wading into sensitive political waters, the IMF said China must allow its currency to strengthen to boost domestic demand and reduce its reliance on exports.

“To the extent that a stronger Chinese currency eases this process, other surplus countries in the region could follow suit, which would facilitate the needed shift towards domestic sources of growth,” the IMF said.

Emerging markets are expected to expand at a rate of 7.1 percent this year and 6.4 percent in 2011.

Advanced economies are expected to grow more slowly, at 2.7 percent in 2010 and 2.2 percent next year.

The WEO report came ahead of Friday’s opening of a two-day annual meeting of the IMF, where its 187 member nations are set to focus on a looming currency war and the dangers of protectionist trading policies.

By ALAN CLENDENNING and MATTHEW LEE, Associated Press Writers Alan Clendenning And Matthew Lee, Associated Press Writers   – 22 mins ago

MADRID – A rare advisory for U.S. travelers to beware of potential terrorist threats in Europe drew American shrugs Sunday from Paris to Rome, but tourism officials worried that it could deter would-be visitors from moving ahead with plans to cross the Atlantic.

The travel alert is a step below a formal warning not to visit Europe, but some experts said it could still hurt a fragile European economy already hit hard by the debt crisis.

“I think if someone was looking for an excuse not to travel, then this is just the ticket,” said George Hobica, founder of Airfarewatchdog.com. “However, I don’t think most people will alter their plans unless the threat is very specific.”

The State Department alert advised the hundreds of thousands of U.S. citizens living or traveling in Europe to take more precautions about their personal security. Security officials say terrorists may be plotting attacks in Europe with assault weapons on public places, similar to the deadly 2008 shooting spree in Mumbai, India.

Without a specific threat, however, American visitors were not letting the alert disrupt their travels.

“We live in New York. So in New York we think about these things all the time,” said Richard Mintzer, a 55-year-old American visiting Italy with his wife. “I wouldn’t say we are particularly worried in Rome, no more than we would be at home, or anywhere in the Western world.”

At Paris’ spring-summer 2011 ready-to-wear fashion shows, W magazine fashion market director Karla Martinez said she gets “worried for five minutes, but then I forget about it and get back to the job that I’m here to do.

“It’s a little scary when you’re staying in a big hotel with lots of tourists, because we hear that could be a target, but I try not to get too worked up about it,” she said. “At the end of the day all you can do is keep your eyes and ears open and try not to be naive.”

The nonprofit group IES Abroad sent e-mails Sunday warning about 1,500 college students in its European study abroad programs to avoid crowded tourist spots and hangouts typically frequented by Americans. The message — also sent to the students’ parents — also told students to leave public places if they see signs of trouble.

“We say, ‘Be alert, cautious and aware of your surroundings,’” IES executive vice president Bill Hoye said. “It means, ‘Don’t be totally plugged into your iPod.’”

Hours after the e-mails were sent by the Chicago-based group, it had no sign of any students who wanted to drop out of the programs.

The impact on travel could deepen if the threat leads to new, tighter security measures, said Henry Harteveldt, a travel analyst for Forrester Research. But the U.S.-based Air Transport Association, a trade group for the airline industry, said it expects “business as usual.”

United, Continental and Delta said they were operating as usual on Sunday without any cancellations or delays related to the terror alert. The airlines said customers will be charged the usual penalty if they want to change itineraries.

Kevin Mitchell, chairman of the Business Travel Coalition, said business travelers will likely keep their plans and hold onto nonrefundable tickets as long as the warning remains “fairly general.”

“The biggest impact will be those people who right now haven’t yet made their plans,” Mitchell said. “They’re the ones who will forestall their decision until the situation is a little bit more clear.”

The travel alert noted in particular “the potential for terrorists to attack public transportation systems and other tourist infrastructure.”

“Current information suggests that al-Qaida and affiliated organizations continue to plan terrorist attacks,” it said. “European governments have taken action to guard against a terrorist attack and some have spoken publicly about the heightened threat conditions.”

U.S. Sen. Charles Schumer, D-N.Y., stressed to reporters after talking to State Department and Justice Department officials that the alert “means be careful when you go, but they are not advising you not to go.”

U.S. and European security experts have been concerned for days about a terror attack similar to the one in Mumbai, which left 166 people dead and targeted two luxury hotels, a Jewish center, a popular restaurant and a crowded train station.

Britain’s Foreign Office on Sunday began warning British travelers to France and Germany that the threat of terrorism in those countries is high. Britain’s Home Secretary Theresa May said the threat of terrorism in the U.K. remains unchanged at “severe,” meaning an attack is highly likely.

Germany’s Interior Ministry said it saw no need to change its assessment of risks to the country and there were “still no concrete indications of imminent attacks” there. France’s interior minister said the threat of a terrorist attack is real but that the country is not raising its alert level.

“The terrorist threat exists, and could hit us at any moment,” the French defense minister, Herve Morin, was quoted as saying in the daily Le Parisien. “Networks organizing themselves to prepare attacks are constantly being dismantled around the world. It is good for the French to know this,”

A French official said Sunday that Italian police had arrested a Frenchman suspected of links to a network recruiting fighters for Afghanistan. The man was arrested in Naples in early September, said the official, who was not authorized to be publicly named because terrorism cases are classified.

The U.S. alert is not changing plans for three NBA teams to play preseason games this week in London, Milan and Barcelona, Spain, though Minnesota Timberwolves coach Kurt Rambis said players were getting additional security when they went out.

Kobe Bryant and other members of the Los Angeles Lakers attended a Premier League game between London rivals Chelsea and Arsenal. Lakers center Pau Gasol said he had no intention of spending his time in London sitting in a hotel room.

“It’s a great city to be out and walk around in, and experience things. It would be a crime to stay at the hotel,” Gasol said.

The U.S. notice said citizens “should take every precaution to be aware of their surroundings and to adopt appropriate safety measures to protect themselves when traveling,” according to the alert.

The alert wasn’t intended to urge travelers to stay away from public places. It fell short of a formal travel warning, which could have had broader implications including a stronger likelihood of canceled airline and hotel bookings and the suspension of many U.S. college and university study-abroad programs.

Despite concerns that the alert could cause a European travel slump, there was no strong opposition to it from European leaders, who were advised privately of the impending action, a European official said.

Marietta Rough, a British tour guide in Berlin, said being concerned about terrorism while traveling has simply become something everyone has to live with.

“It shouldn’t affect your daily life, and I certainly don’t feel like it is here in Berlin,” she said.

U.S. intelligence officials believe Osama bin Laden is behind the plan to attack several European cities. If that’s true, it would be the most operational role bin Laden has played in plotting attacks since Sept. 11, 2001.

Eight Germans and two British brothers are at the heart of an al-Qaida-linked terror plot against European cities, but the plan is still in its early stages, with the suspects calling acquaintances in Europe to plan logistics, a Pakistani intelligence official said last week. One of the Britons died in a recent CIA missile strike, he said.

The Pakistani official said the suspects are hiding in North Waziristan, a Pakistani tribal region where militancy is rife and where the U.S. has focused many of its drone-fired missile strikes.

____

Lee reported from Washington. Associated Press reporters Angela Charlton, Jenny Barchfield, and Nicolas Garriga in Paris, Chris Kahn and Julie Walker in New York, Kirsten Grieshaber in Berlin, Malin Rising in Stockholm, Alessandra Rizzo in Rome and David Koenig in Dallas contributed to this story.