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Africa money legalising rhino horn, ivory trade in focus

* Rhino horn now worth more than gold* Trade may be worth $234 million a year* Asian demand turbo-charged by economic growthBy Ed StoddardJOHANNESBURG, April 26 Almost two rhinos a day are being poached in South Africa for their horns, which are worth more than their weight in gold. This surge in rhino killings has coincided with a rise in elephant poaching for ivory across the continent and reignited debate about whether or not the trade in the commodities these animals are being killed for should be opened up. The questions raised are not just ethical or ecological but also economic, and we are not talking small change. Take rhino horn, which now has a street value of $65,000 a kg, making it more valuable than gold, platinum or cocaine. Used to treat a range of ailments in China and southeast Asia, its demand has rocketed in tandem with the region's blistering economic growth and appetite for other commodities. Trouble is, the sale of rhino horn is strictly banned under the Convention on International Trade in Endangered Species (CITES), the global treaty that governs trade in plants and animals. Almost 450 rhinos were poached in South Africa last year and at current rates, that number could reach 600 or more in 2012.

African rhinos have a pair of horns and in the case of the white rhino, the biggest and by far the most numerous of the two species on the continent, their average combined weight is usually close to 6 kgs, researchers say. The average weight of both horns on the smaller black rhino is about 2.5 kgs but over 90 percent of the poaching incidents involve white rhinos. So over 600 animals could mean 3,600 kgs of horn worth close to $234 million on the street. Advocates of reopening the trade including game farmers and end users make arguments similar to those who support the legalisation of drugs: they say such a move would remove criminals from the equation, allow the business to be regulated, and enable governments to tax it. In the case of rhino horn, the annual figures could far exceed $234 million annually if the animals were farmed for that purpose with their horns, which grow back after being cut off, harvested on a regular basis.

LIKE CATTLE, JUST BIGGER Sound far-fetched? Well, according to government data, in 2010, 4,531 of South Africa's population of 18,780 white rhinos were in private hands on game farms and ranches. In private collections there may be tens or perhaps hundreds of millions of dollars worth of rhino stockpiles. No one knows the precise figure but it almost certainly significant. Rhinos are a key species in game farming, which according to the Financial Mail, is now South Africa's sixth-biggest agricultural sector, employing more than 100,000 people. The argument goes that privately-owned rhinos could be bred and their horns harvested to meet the burgeoning Asian demand.

Horn harvesting could also be done in national and provincial parks with the proceeds put back into conservation. This part of the argument seems compelling when one considers the limited resources South Africa's government has compared to the country's pressing social needs. Spending money on animals may not go down well in poor black townships that still lack power or reliable water supplies. There are also huge stockpiles of ivory from elephant tusks locked in government vaults. The last CITES-sanctioned auction from such stores in 2008 by South Africa, Namibia, Botswana and Zimbabwe were supposed to generate funds for conservation. The bottom line is that in impoverished Africa, home to the last great numbers of what biologists term mega-fauna - meaning really big animals - wildlife must pay for itself. Opponents of opening up trade in rhino horn and ivory, including some conservationalists and animal welfare organisations, argue that wildlife in Africa is already paying for itself as it is the top draw in countries such as Kenya, east Africa's largest economy, which relies heavily on tourism. Tourism took a record 98 billion shillings ($1.19 billion) there in 2011. One concern is that "dirty" ivory or rhino horn will get laundered with the licit stuff - a point underscored by the involvement of organized crime groups in the illegal trade. The initial ban on the ivory trade in 1989 was credited with stemming a slaughter of African elephants at the time. Changing the rules for rhino horn or ivory is not easy and requires a two-thirds majority vote at CITES' Conference of the Party meetings, held every 2 to 3 years. South Africa has already signaled it will not put in a proposal to sell rhino horn at the next one in Thailand in 2013 but is widely expected to do so at a following meeting. One thing is clear: Asian demand for ivory and rhino horn, like its thirst for coal and oil, is only going to grow. Striking a balance and finding a way to meet it, while protecting African wildlife, may be essential.

Australia business activity weakened in sept survey

SYDNEY Oct 9 Australian business conditions weakened in September as retailers and wholesalers suffered from slack demand, while inflationary pressures remained very subdued, adding to the case for further cuts in interest rates. A monthly survey of around 400 firms by National Australia Bank found firms complaining of a high local dollar, tighter fiscal policy and softer commodity prices. As a result the survey's main measure of business conditions fell 3 points in September to stand at -3, some way below its long-run average. In contrast, the index of business confidence rose 3 points to stand at 0, reversing much of the fall seen the previous month. The two measures have been see-sawing for months with no clear trend emerging."The pull back in business conditions was led by particularly heavy declines in wholesale, retail and transport & utilities," said NAB chief economist Alan Oster.

"We expect to see one more rate cut in November, provided core inflation remains subdued, with the possibility of another in early 2013," he added. The Reserve Bank of Australia (RBA) cut interest rates a quarter point to 3.25 percent last week citing a slowdown in China, lower export prices and a high currency among reasons for the move.

Financial markets are pricing in around a two-in-three chance of a cut to 3 percent in November, and further easing to 2.75 percent or lower next year. The survey's measure of sales dropped 6 points to -3, while that for profitability eased 3 points to -5. Measures of future demand were also weak, with the index of forward orders falling 5 points to -7 in the month.

Employment was a shade softer, led by a pullback in the once red-hot mining sector. Mining giant BHP Billiton on Tuesday said it plans to cut an undisclosed number of jobs in iron ore, its biggest and most profitable business, as it tries to cope with weaker prices and higher costs. Yet overall mining employment conditions stayed positive, suggesting miners were still hiring but at a slower pace. Measures of inflation were benign with final product prices rising at the slowest pace since January. Input costs also eased, as did the wage bill. Official figures for consumer prices are due later in October and are expected to show underlying inflation remained near the floor of the RBA's 2 to 3 percent target band in the third quarter.

Bank of england may broaden islamic liquidity tools

The Bank of England is studying ways to increase the number of sharia-compliant assets that Islamic financial institutions can use in their liquidity buffers, a step towards reducing concentration risks in the sector. The move comes as part of a broader push to promote London as a top centre for Islamic finance, in the face of growing competition from other centres such as Dubai and Kuala Lumpur. Currently, sukuk (Islamic bonds) issued by the AAA-rated Islamic Development Bank are the only assets that meet the central bank's criteria for use in the liquidity buffers of the 22 Islamic financial institutions operating in Britain. These include six full-fledged Islamic banks such as the European Islamic Investment Bank, Bank of London and the Middle East and Gatehouse Bank.

In addition to reducing risks, expanding the eligible list could improve growth prospects for the industry and remove a potential entry barrier to the sector, a consultation paper released by the central bank said."Recognising only one asset also potentially limits the growth of existing sharia-compliant firms and creates barriers to entry for new sharia-compliant firms due to the difficulties that can be experienced obtaining the asset."

Islamic finance follows religious principles such as bans on interest and pure monetary speculation; this limits the types of financial tools that banks can use to manage their short-term funding needs. The Bank of England's proposal is in line with the approach of Basel III global banking regulations, which allow sukuk issued by high-rated sovereigns to be included in the liquid assets buffer without a haircut.

This would allow Britain's proposed 200 million pound ($330 million) sovereign sukuk issue to be used, as well as other high-investment grade instruments such as sukuk issued by the Malaysia-based International Islamic Liquidity Management Corp. Sukuk issued by sovereigns with lower credit ratings and other non-financial issuers could also be eligible, subject to haircuts and caps, the consultation paper said. The consultation will end on April 15 but no date was given for the proposed reform. Britain first announced plans for a sovereign sukuk issue six years ago but that issue never materialised as the country's Debt Management Office decided the structure was too expensive. The new proposal is less than a fifth of the size of the original, and is designed to boost London's status rather than to diversify Britain's investor base to a significant degree.

British holidaymakers hold off travel money buys as pound languishes

British travellers' appetite for dollars and euros has sunk in the three weeks since Britain voted to leave the European Union, as they seemingly wait as long as possible in the hope that the pound's exchange rate will rebound. Both Thomas Cook and Travelex said that travel money business had jumped in the run-up to last month's referendum on EU membership, as those with summer holidays booked in Europe or the United States worried the pound might be worth less afterwards. And since Britain voted to leave, with sterling now down 11 percent against the dollar and 9 percent against the euro, orders have dried up, and are well down on the equivalent period in previous years."After a rush from customers for foreign currency pre-Brexit, we've seen a slowdown," said Fraser Millar, head of financial services at Thomas Cook.

"We think customers are doing their own personal hedging, buying a bit now but holding off to buy the rest until just before they travel, to see whether the rate improves."Some providers said business had not been helped by reports of rates at airports - normally among the most expensive places to buy foreign currency - that put the pound close to parity with the euro, a huge mark-up on the rate of around 83 pence at which travel money firms can buy euros from banks."These sort of reports have probably frightened people off," says Sandy Perera, who runs a network of small foreign exchange booths ranked by comparison sites as among the cheapest places to buy currencies in London.

"This time last year was our peak period and we are down at least 10-12 percent on that. We'll probably get a rush of people next week, which is a big headache for us (because) managing the availability of some currencies is the hard bit."The development of electronic payment infrastructure across Europe has steadily brought down the cost of using major cards abroad to as little as 2-3 percent with major banks and credit card companies.

But when fees for drawing money out of foreign cash machines are added, using a broker to buy cash before travelling can still prove far cheaper. At the start of this year, when many people will have paid for package holidays, the pound was worth around $1.50. On Friday, it was worth just $1.32."The pound's volatility since the Brexit announcement has impacted people's desire to buy the euro and the U.S. dollar," a spokesman for Travelex said."Our rates have had to take the pound's volatility into consideration in order to be able to continue to provide our services to those who needed them."