LONDON, May 20--Asia has overtaken continental Europe as the top investment choice for investors living outside their country of origin, according to a survey published on Sunday.
The survey of 350 expatriate investors conducted by online broker Internaxx in March and April showed that 39 percent had exposure to Asia, up from 33 percent a year ago, Reuters reported.
Thirty-seven percent of investors have exposure to continental Europe, while 29 percent are exposed to the United States and 26 percent have investments in Britain.
A year ago, continental Europe was the most popular region, followed by the United States, Asia and the UK in the survey by Internaxx, a joint venture between Fortis Banque Luxembourg and brokerage company TD Waterhouse.
“The reasons for non-exposure to Asia--lack of knowledge, concerns about corporate governance, market volatility and uncertainty over economic prospects--have reduced,“ Internaxx Managing Director Robert Glaesener said.
MSCI’s measure of Asia Pacific stocks excluding Japan (^MSCIAPJ--news) rose 29.0 percent last year and has added a further 11.2 percent since the start of this year.
In comparison, the MSCI World (^MSCIWO - news) index returned 18.0 percent last year and has risen 8.0 percent since the start of this year.
Among emerging markets, 42 percent of investors in the survey said they viewed China most positively, while 32 percent picked India.
Only six percent of international investors opted for Russia, due to concerns about a lack of transparency, the political climate and unstable governance. Five percent chose Brazil, where investors are worried about nationalization and a risky political situation, the survey said.
The survey also showed that 90 percent of investors believe markets will rise or stabilize in 2007, up from 80 percent a year ago.
“Expatriate investors are very much like international investors,“ said Glaesener. “They have quite a progressive view of what to invest in.“

WASHINGTON, May 20--The crisis that brought down Paul Wolfowitz from the presidency of the World Bank has laid bare a chasm existing between the United States and European countries since the invasion of Iraq in 2003.
Wolfowitz, 63, was deputy defense secretary and one of the principal architects of the Iraq war in the administration of US President George W. Bush before he took the helm of the World Bank in June 2005.
Even at that time, European countries opposed to the war felt badly about the choice made by Bush, but resigned themselves and went along with it.
“Wolfowitz’s departure may have been justified, but his leaving had more to do with the bureaucracy’s resentment of his role in the Iraq war and his internal reform initiatives than about his lapse of ethics,“ said Ian Vasquez, director of the Center for Global Liberty and Prosperity at Cato Institute, a Washington think tank.
According to AFP, Wolfowitz himself felt he was a victim of an urge for revenge that fired up some of his opponents.
As early as April 12, when the crisis sparked by charges of favoritism first erupted, he declared to his critics that he did not work for the US government any more and represented only the bank and its 185 members.
Wolfowitz announced Thursday he would resign on June 30 after a bank panel found he had violated the organization’s code of conduct by arranging a hefty pay and promotion deal for his girlfriend, a fellow bank employee.
By tradition, the president of the World Bank is chosen by Americans while the head of the International Monetary Funds (IMF), the sister institution, is selected by Europeans.
A number of voices, including those coming from non-governmental organizations and some governments, rose in favor of abandoning that unwritten rule.
Dutch Development and Cooperation Minister Bert Koenders pointed out Friday that qualifications criteria should prevail in the selection of a future bank president over nationality.
But that approach would probably mean that Americans would ask Europeans to renounce their claim to leadership at the IMF, a request the latter would most likely find “unpalatable,“ insisted Devesh Kapur, author of a history of the IMF.
Holding 16.38 percent of the bank’s shares, the US is its principal stakeholder, followed by Japan (7.86 percent), Germany (4.49 percent), France and Britain (4.3 percent each).

GENEVA, May 20--Hedge funds look set to retain their dynamic role in the financial markets without fear of external regulation, though international central bankers urged the industry to do more to ensure discipline and transparency.
G8 finance ministers meeting this weekend rejected calls from their host, Germany, to move towards a voluntary code of conduct for the booming industry.
Instead, according to AFP, the ministers spoke only of the need for “vigilance“ in monitoring hedge funds.
“Given the strong growth of the hedge fund industry and the increasing complexity of the instruments they trade, we reaffirmed the need to be vigilant,“ the finance ministers of Britain, Canada, France, Germany, Italy, Japan, Russia and the United States said in a joint statement on Saturday.
These tallies with comments by the Bank for International Settlements--the Basel, Switzerland-based ’central bank of central bankers’--which said hedge funds were an important source of market dynamism.
Hedge funds “have generally been a spur to continuing financial innovation, and, by absorbing risk, have provided greater depth and liquidity to financial markets,“ the bank said in its first report on the industry since 2000.
Hedge funds now account for a significant share of turnover in many markets and of core financial institutions’ dealing volume and trading revenues, it said.
Hedge funds are largely unregulated pools of capital, whose managers often use borrowed money to take hugely complex and highly risky positions in a broad range of financial securities and commodities.
Germany has been particularly vocal of late on the need to regulate the industry, and European Central Bank governor Jean-Claude Trichet also told the Financial Times on Friday that there was an “emerging consensus“ on the need for some sort of regulation.
However, such a consensus was not in evidence at the G8 meeting in Potsdam, just outside the German capital Berlin.
Speaking there on Friday, Japanese finance minister Koji Omi said that “any inappropriate regulation that could hurt free market mechanisms should be avoided,“ adding that this view was also shared by the United States.
The BIS did acknowledge the need for further measures to be taken to guard against systemic risks and complacency, but argued the industry was fully capable of carrying this out itself.
The industry “should review and enhance existing sound practice benchmarks for hedge fund managers in the light of expectations for improved practices set out by the official and private sectors.“
“There has been some erosion in counterparty discipline recently... reflecting the strength of competition for hedge fund business. These complement other signs of complacency about risks in markets,“ it noted in its report.
But the bank there was a “generally high“ awareness within the sector of the risks posed by the growing complexity and diversity of products and markets.
“Rapidly changing products, rising trading volumes and closer market integration underscore the importance of continuing attention to infrastructure improvements,“ the BIS said.

CHICAGO, USA,
May 20--In a United Nations report released this month, scientists said the cost of aggressively tackling climate change was comparatively reasonable. By spending a little over a tenth of 1 percent of the world’s income each year for 23 years, they say, greenhouse gases could be held nearly in check, avoiding the worst predicted environmental disasters.
The same day, Bush administration officials argued that the same aggressive effort would throw the world’s economy into a global recession, Mercurynews.com says.
The reality, top climate economists say, is that cutting U.S. emissions sufficiently to hold greenhouse-gas concentrations at near-current levels could soon cost the United States twice as much per year as it is now spending on the war in Iraq. But, as the U.N. report essentially urges, spending a trillion dollars a year worldwide over the next two decades to aggressively curb climate change could be a bargain in the long run.
For the United States, the most aggressive scenario in the new U.N. Intergovernmental Panel on Climate Change mitigation report--holding greenhouse gases in the atmosphere to under 500 parts per million, up from the current 380 parts per million--could cost a whopping $240 billion a year, or 2 percent of the nation’s income, said Robert Mendelsohn, a climate change economist at Yale University. The war in Iraq, comparatively speaking, has cost a little under $100 billion a year on average since it began in 2003.
That 2 percent of national income figure is much higher than the cost of 0.12 percent of world income quoted in the U.N. report because the United States is the world’s leading producer of greenhouse gases and therefore has more work to do cutting them, Mendelsohn said. Many economists also say the U.N. figures suggesting a moderate cost for limiting climate change assume that nations around the world would act quickly and in concert to target the problem, something political leaders say is highly unlikely.
Whether that is a cheap or expensive price to pay for cutting emissions is a matter of perspective.
Choosing a sufficiently aggressive plan to stave off the worst effects of climate change without dire economic consequences is a complicated balancing act, economists say, particularly because so many variables remain unknown.
Under Mendelsohn’s scenario, average global temperatures would be expected to rise by 7 to 11 degrees Fahrenheit by the end of the century, according to the U.N. panel, compared with about 3 to 6 degrees under the most aggressive program.

Chinese investors view a stock price board at a private securities firm in Shanghai.

BEIJING, May 20--China’s fourth rate hike in the past year is partly aimed at taming a rampant bull market, but the move is unlikely to deter the country’s millions of small investors, analysts said.
The central bank raised interest rates, widened the yuan’s narrow trading band and raised mandatory bank reserves, in a series of moves apparently designed to cool blistering 11.1 percent growth and head off foreign criticism.
The measures were announced late on Friday, AFP says, just ahead of a meeting of Group of Eight finance ministers in Germany and this week’s high-level meeting between Chinese Vice Premier Wu Yi and US Treasury Secretary Henry Paulson.
“They’re obviously targeting both the stock market and the discussions,“ said Stephen Green, an economist with Standard Chartered Bank in Shanghai.
“The central bank’s decision is a signal demonstrating the government’s will to avoid overheating,“ said Xu Dianqing, a professor at Beijing University’s economic research centre.
“The most immediate significance is to say that the central government will not sit and do nothing faced with a persistently booming stock market.“
Worries over the stock market have multiplied as share prices continue to skyrocket, notching up several record closes for the Shanghai bourse.
On Thursday, Hong Kong billionaire Li Ka-shing called for an end to the buying fever, and the official China Daily urged investors to “stop the unstoppable.“
However, Professor Ning Xiangdong of Beijing’s Qinghua University was concerned that the cooling measures would not be enough with investors currently going “crazy“ for shares.
“In terms of theory, the central bank’s measures will take effect on the stock market. But I don’t know if they can really take effect or not,“ he said.
is not reasonable. Nearly everyone is speculating on the stock market.
CITIC Securities analyst Ma Qing said: “If the bourse continues to rise on Monday, it’s time to despair.“
Professor Sun Lijian, from Fudan University’s centre for research into China’s economy, said the new measures would have only a temporary effect.

The falling US dollar has had negative effects on the Kuwaiti economy.

KUWAIT CITY,
May 20--Kuwait has abandoned pegging its currency to the US dollar and returned to linking it to a basket of currencies, the Central Bank governor announced Sunday.
The fall of the exchange rate of the US dollar has “contributed to local inflation,“ and the Cabinet decided Sunday to peg the Kuwaiti dinar to a basket of currencies
instead, the Kuwait News Agency quoted the bank governor, Sheik Salem Abdul-Aziz Al Sabah, as saying, AP reported.
The falling US dollar has had “negative effects“ on the Kuwaiti economy for the last two years, al Sabah told the state-owned agency.
Al Sabah told KUNA the move was “necessary for national interest,“ but that the US dollar would continue to be part of the foreign currencies that determine the exchange rate of the Kuwaiti dinar.
This small oil-rich state has been a major ally of Washington since the US-led 1991 Persian Gulf War that liberated it from a seven-month Iraqi occupation under Saddam Hussein.
He said the new basket of currencies would reflect Kuwait’s commercial and financial ties, but did not provide further details about which country would be included.
Kuwait’s Central Bank had previously switched from a basket of currencies to the greenback in 2003 to comply with requirements from a plan for a unified Gulf currency by the year 2010.
The six members of the Persian Gulf Cooperation Council hope the move, similar to the creation of the Euro by the European Union, will boost regional trade and economic integration.
Along with Kuwait, the loose economic and political alliance groups Saudi Arabia, the United Arab Emirates, Qatar, Bahrain and Oman.
Despite the central bank’s decision, Kuwait remains “fully committed“ to the unified Persian Gulf currency by its target date of 2010, Al Sabah said.