SAN FRANCISCO -(Dow Jones)- Fire raged Friday after a natural gas pipeline owned by PG&E Corp. (PCG) ruptured and exploded in the San Francisco suburb of San Bruno, setting ablaze dozens of homes and burning residents, leaving at least one person dead and more than 30 others injured.

PG&E said in a statement that it was investigating the cause of the ruptured line after the blast that occurred late Thursday, but added that "if it is ultimately determined that we were responsible for the cause of the incident, we will take accountability."

"We have crews on the scene and are working with authorities," said PG&E spokesman Matt Nauman. "Our priority is to make the area safe."

More than 50 homes were seriously damaged and over 100 more had fire damage, the area fire chief said on local TV.

As night fell the fire was about 50% under control, CNN reported, citing unnamed officials.

Lieutenant Gov. Abel Maldonado declared a state of emergency in the area and was set to visit the scene later Friday, local station KGO-TV reported on its website. It said Maldonado is acting governor while Gov. Arnold Schwarzenegger is out of the country.

The explosion ignited a fireball as high as 100 feet (30 meters) that burned for more than an hour, fed by the gas line. The blast left behind a crater as the blaze quickly spread, whipped by high winds, to houses in several blocks near San Francisco International Airport.

The San Mateo County coroner's office confirmed one death related to the explosion. Officials believed the toll could rise, CNN reported.

More than 30 people were treated at a local Kaiser Permanente hospital in San Bruno, while others were rushed to burn units at other medical facilities, according to hospital spokesman Karl Sonkin.

The utility said it is working with emergency officials to make the area safe.

A water pipeline in the area also ruptured, requiring fire responders to truck in water with liquid tanker trucks, according to local news reports.

A number of fires were still raging out of control hours after the initial explosion, and parts of the affected neighborhoods looked like a war zone with several homes up in flames and debris littering the streets.

Television footage showed firefighters going house-to-house with sniffer dogs looking for victims, but "it is going to take us until at least into the afternoon (Friday) to do a complete search," said San Bruno fire chief Dennis Haag.

"A terrible, terrible tragedy has fallen on our city," said San Bruno Mayor Jim Ruane. The top priority, he said, was "making sure our citizens are safe."

"This is going to be a long haul for the city and our residents," Ruane said.

"I heard a sound like a low-flying plane, then all of a sudden the house shook," said Tina DiIoia, who was with her baby in their condominium in the town of San Bruno, just south of San Francisco, when the explosion occurred about half a mile (about half a kilometer) away.

"Then there was another explosion. I went outside and there was debris falling from the air."

As flames spread to more homes people were being evacuated from areas downwind of the inferno, while helicopters and airplanes were seen dumping water and fire retardant chemicals in an effort to stanch the flames.

Local media reported more than 50 homes had caught fire, and hundreds of dazed residents had gathered at an evacuation site at a nearby shopping center or at shelters staffed by the Red Cross in and around San Bruno.

The blast so close to the busy airport had initially sparked fears of terrorism, ahead of Saturday's ninth anniversary of the Sept. 11, 2001 attacks, but there was no information suggesting a link.

(With additional information from Agence France-Presse)

Copyright © 2010 Dow Jones Newswires

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By Antoni Slodkowski and Mariko Katsumura

TOKYO/SYDNEY, Sept 10 (Reuters) - Japan's Sekisui House willteam up with Australian property group Lend Lease to develop andmarket residential properties in Australia, aiming to bolster itsexpansion outside its saturated home market.

Under the deal, Sekisui will invest about 9 billion yen ($107million) to acquire a 50 percent interest in Lend Lease's144-apartment Serrata development in Melbourne as well as buyland from Lend Lease at the coastal resort of Hyatt Coolum, wherethe Japanese firm wants to build 450 homes, the companies said onFriday.

"We treat this residential development only as the start lineand, depending on the expansion of our projects, there's a highpossibility we will invest in commercial undertakings inAustralia too," Sekisui House Chief Executive Isami Wada toldreporters in Tokyo.

Lend Lease CEO Steve McCann told Reuters in an interview thathis company was also considering investing in Japan.

The latest deal will allow Sekisui, Japan's biggesthome-builder, to target 100 billion yen in sales in Australiaover the next three years, as the Australian economy is one ofthe best-performing among developed countries and its populationis projected to grow to 35 million from 22 million by 2050.

Japan's rapidly ageing population, by contrast, is expectedto shrink by a third in 50 years if current trends continue.

"But we can't simply go to places just because ofhigh-density ... from now on not only the property business butother businesses will have to go global," said Wada.

By joining forces with Lend Lease, Australia's largestproperty developer, Sekisui aims to continue the overseasexpansion that it began last year with the launch of residentialproperty developments in Australia. The Osaka-based company nowhas three residential projets there.

Sekisui and Lend Lease said they want to cooperate closely inthe future and look into bigger projects.

MULLING JAPAN

McCann said that Japan is an attractive market and that itseconomy remains solid.

"Focusing on Sekisui's expansion in Australia is a startingpoint for us, and there could be an opportunity in the reversedirection over time," he said.

Lend Lease expects in the next three to five years to start anew Asia fund that could invest in Japan and would be around $650million in size.

Sekisui House shares climbed 0.7 percent to 748 yen in Tokyo,while Lend Lease rose 3.4 percent to A$7.51 in Sydney. (Reporting by Antoni Slodkowski in TOKYO and Mark Bendeich inSYDNEY; Editing by Chris Gallagher and Joseph Radford)

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* Govt "continues to focus on Nakheel" (Recasts adding analyst quotes, further details)

By Jason Benham

DUBAI, Sept 10 (Reuters) - State-owned conglomerate DubaiWorld on Friday reached a formal deal to restructure around$24.9 billion of liabilities, partly easing recently heightenedconcerns over the Gulf emirate's debt woes.

While Dubai World's agreement with most of its creditors isseen as a positive step for Dubai, the announcement comes justdays after a unit of Dubai Holding, the conglomerate owned byDubai's ruler, said it will delay repayment on a $555 millionloan, the second time it has failed to meet a repaymentdeadline.

"Most players had expected this outcome and that therestructuring would be completed by October or November," saidAndre Andrijanovs, credit analyst at Exotix in London.

"It is a surprise that it has happened so quickly and thatan agreement was reached this week, and that be will a positivemomentum for Dubai ... There are other situations though thatneed resolving such as Dubai Holding."

Dubai World reached an agreement with over 99 percent of itscreditors by value to restructure around $24.9 billion ofliabilities, the government of Dubai said in a statement. DubaiWorld said in a separate statement it is well positioned toclose the restructuring in "the coming weeks".

"The agreement formalises a strong consensus about a fairand balanced restructuring proposal and is a key step to puttingDubai World on a sound and stable financial footing," SheikhAhmad Bin Saeed Al Maktoum, chairman of the Dubai Supreme FiscalCommittee said in the statement on Friday.

The government of Dubai remains a supportive and committedshareholder, the statement added.

Dubai World's target date for completion, assumingconsensual agreement reached with creditors, was October 1, afinal restructuring proposal presented to creditors on July 22and obtained by Reuters in August, showed. Concerns about theoverall debt burden of Dubai's state-linked companies mountedafter Dubai announced a standstill on repaying $26 billion indebt as it restructured Dubai World. It unveiled a $9.5 billionrescue plan for the firm in March.

"Any resolution is positive and we had news on Dubai Holdinglast week," said Abdul Kadir Hussain, chief executive of MashreqCapital in Dubai.

"There is progress on all of these which will deem positivefor the debt position in Dubai," he added.

FOCUS ON NAKHEEL

In Friday's statement the government said "it continues tofocus on Nakheel and is pleased with the significant progressachieved by the company to date in discussions with itscreditors."

Troubled Dubai property developer Nakheel, a unit of DubaiWorld, which overstretched itself building islands in the shapeof palms and other ambitious real estate, is holding separaterestructuring talks.

Under the restructuring of its parent company, the developerwould be placed directly in the hands of the government.

Dubai World, plans to sell its prized assets over a periodof eight years to generate as much as $19.4 billion to pay offcreditors, according to the restructuring proposal documentobtained by Reuters.

It said in the document asset disposals over an eight-yearperiod will help generate up to a maximum of $19.4 billion,while similar sales based on current prices would be worth amaximum of $10.4 billion.

The document also showed Nakheel has $10.9 billion of bankdebt and will receive key assets from Dubai World afterseparation.

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By Jason Benham

DUBAI, Sept 10 (Reuters) - State-owned conglomerate DubaiWorld has come to a formal agreement with over 99 percent of itscreditors to restructure around $24.9 billion of liabilities,the government of Dubai said on Friday.

In a separate statement Dubai World said it iswell-positioned to close the restructuring in "the coming weeks".

"The agreement formalises a strong consensus about a fairand balanced restructuring proposal and is a key step to puttingDubai World on a sound and stable financial footing," SheikhAhmad Bin Saeed Al Maktoum, chairman of the Dubai Supreme FiscalCommittee said in a statment.

The government of Dubai remains a supportive and committedshareholder, the statement added.

"The government of Dubai continues to focus on Nakheel andis pleased with the significant progress achieved by the companyto date in discussions with its creditors," it added.

Dubai World's target date for completion, assumingconsensual agreement reached with creditors, is October 1, afinal restructuring proposal presented to creditors on July 22and obtained by Reuters in August, showed. The date forlenders to return the signed lock-up agreement and get paid theconsent fee was September 9.

Dubai World, plans to sell its prized assets over a periodof eight years to generate as much as $19.4 billion to pay offcreditors, according to the document.

It said in the document asset disposals over an eight-yearperiod will help generate up to a maximum of $19.4 billion,while similar sales based on current prices would be worth amaximum of $10.4 billion.

The document also showed Dubai developer Nakheel has $10.9billion of bank debt and will receive key assets from DubaiWorld, its parent company, after separation.

Concerns about the overall debt burden of Dubai'sstate-linked companies mounted after Dubai announced astandstill on repaying $26 billion in debt as it restructuredDubai World. It unveiled a $9.5 billion rescue plan for the firmin March.

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SHANGHAI -(Dow Jones)- Property prices in China were flat for the second consecutive month in August on a sequential basis but continued to increase from a year earlier, underscoring the challenge Beijing faces in trying to cool down the real-estate market following the tightening measures it announced earlier this year.

Analysts said they don't expect any significant declines on a sequential basis in coming months. Despite this, the government is unlikely to make any major changes to its policies on the property market for now, though it may tweak some of the tightening measures, they said.

Property prices in 70 of China's large and medium-sized cities were unchanged in August on a month-on-month basis, the National Bureau of Statistics said Friday. Prices were also unchanged in July, and fell just 0.1% in June from the previous month. The property price index in August rose 9.3% from a year earlier, down from July's 10.3% rise. It was the fourth straight month of slower growth since April's record 12.8% increase, the bureau said.

Analysts said Beijing needs to strengthen the measures it has taken since April to curb the speculation that has driven up property prices and could increase social discontent and economic risks.

"The government may announce more stringent tightening measures to keep prices stagnant in the coming months," said Johnson Hu, an analyst at UOB KayHian, adding that these measures could include further credit curbs for developers and more stringent mortgage requirements for third-home buyers.

The official figures are lower than some private-sector estimates. Citigroup said in a research note Wednesday that on a month-on-month basis, property prices in China rose 6%, while transaction volume rose 28%.

"The government data itself doesn't support policy change, but from what we're seeing, sales volume has gone up a lot, and the average prices of the sold property have grown," said Citigroup analyst Ken Peng, adding the tightening measures taken by China haven't addressed structural imbalances.

"The sicknesses of the property market are excess liquidity, low real interest rates and the lack of investment alternatives. These structural problems are causing constant worry of a bubble and unless they are resolved, everything else is just a band-aid," Peng said.

Local media reports early this month said that China will gather data on unoccupied residential property in its nationwide population census starting Nov. 1 and assess the situation in some cities

In terms of floor space, nationwide property sales fell 10.1% to 68.9 million square meters in August from the same month a year earlier, but were higher than July's 64.7 million square meters. The rebound came ahead of the traditionally peak month for property sales in September.

However, Andy Rothman, China strategist for CLSA Asia-Pacific Markets, said the government is more focused on the month-on-month figure, and prices have remained essentially flat for the past three months following April's 1.4% rise.

"This shows that the government measures have been working quite well," he said.

"It depends on what you think the government wants to achieve from its tightening measures in April, if it's price falls from current levels then there could be further tightening," Rothman said. "From our discusssions with government officials, they're satisfied with flat prices."

On Thursday, the Shanghai Securities News reported People's Bank of China adviser Xia Bin as saying the recent rebound in property transactions is just a short-term phenomenon.

Beijing is also being careful as it wants to avoid the possibility of a hard landing for the economy, analysts said.

On a month-on-month basis, prices were flat in Beijing and fell 0.1% in Shanghai, 0.3% in Guangzhou and 0.2% in Shenzhen, said the statistics bureau.

Investment in real-estate development, one of the main forms of private investment in China, rose 36.7% in the January-August period from a year earlier to CNY2.84 trillion, slowing from the 37.2% rise in the January-July period, the bureau said.

Copyright © 2010 Dow Jones Newswires

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By Sonali Paul

MELBOURNE, Sept 10 (Reuters) - A manager of anaward-winning fund at Australia's biggest money manager,Colonial First State, is doubtful BHP Billiton can delivergrowth through takeovers, and is putting his money on rival RioTinto.

Renzo Casarotto, senior portfolio manager of Colonial'sGlobal Resources Fund, which has $4.2 billion in assets, alsois looking for a higher offer for Canada's Potash Corp than the$39 billion bid made by BHP.

"It really is concerning the market that BHP highlightedthe fact that they had the strongest balance sheet going intothe global financial crisis but haven't been able to use thatbalance sheet to enhance the position of shareholders,"Casarotto told Reuters in an interview.

"We're concerned that they're sort of struggling to executeproperly."

He referred to its failed bid for Rio Tinto two years agoand the difficulties it is having in winning approval for theiriron ore joint venture to illustrate his point.

Colonial First State is a unit of Commonwealth Bank ofAustralia. Its biggest holdings include BHP and Rio Tinto,mostly in their UK shares as they are cheaper than the twocompanies' Australian-listed shares. The fund manager is amongthe top 25 holders in BHP's UK shares and top 50 in itsAustralian shares.

As a Potash shareholder, Colonial thinks the world'sbiggest deal this year should get bigger, Casarotto said.

"Given the strategic positioning of Potash Corp, we thinkit's probably worth a little bit more than what BHP wasprepared to pay," he said.

The Global Resources Fund, lead managed by Joanne Warner,has outperformed the MSCI World Index since its launch in 1997,returning more than 13.7 percent a year on average against the2.4 percent return of the MSCI World Index, according toMorningstar, which has a "recommended" rating on it.

It was named the best resources fund in UK-based InvestmentWeek's fund manager of the year awards 2010.

VALUE IN MINING STOCKS

Casarotto said while BHP was strong operationally, Rio hada slightly cheaper valuation and better growth profile. He declined to comment on whether Colonial wants Rio toabandon its planned $116 billion iron ore joint venture withBHP.

"The market would certainly say that's a correctassessment," Casarotto said.

For the deal to go ahead, he said Rio should press BHP formore than the $5.8 billion it is slated to pay to equalise itsstake in the joint venture, but declined to estimate how muchmore BHP should pay.

Casarotto saw opportunities for cheap picks in the miningsector, with the market reflecting worries about a U.S.double-dip and growth slowing in China.

Spot commodities prices and freight rates point tocommodity prices improving later this year which should boostminers' shares, he said.

"So we're seeing value. It's a matter of seeing theseheadwinds abate a bit and then think these stocks will performquite strongly," Casarotto said.

The Sydney-based fund is chasing coking coal and coppercompanies with low-cost production, solid growth projects andclean balance sheets, as they would be well-positioned inmarkets where supplies are failing to keep up with demand.

Two of its top picks in those sectors are Chilean minerAntofagasta Minerals and U.S. coking coal producer WalterEnergy.

It is avoiding companies in aluminium and U.S. natural gas,where supply is expected to be in surplus for some time.

In the hot gold sector, amid takeover hype, the fund isswitching into stocks with cheaper valuations, focusing onsmall companies like San Gold and Romarco Minerals.

SOFT COMMODITIES FUND

Colonial started a soft commodities fund last November,which has A$22 million, managed by Skye Macpherson, looking toreap growth in companies that are poised to profit from rapidlygrowing global food demand.

"We still think there are significant opportunities forinvestment in global soft commodities equities going forward,"Macpherson told Reuters. The fund is targeting companies that are helping to boost foodproduction, like U.S. grains giant Archer-Daniels Midland andBrazilian group SLC Agricola, and those that can help improveproductivity, like Switzerland-based Sygenta.

"We tend to be underweight those companies that have thinmargins and are highly leveraged because they're quitevulnerable if the cycle turns against them," Macpherson said,pointing to beef and chicken producers like JBS in Brazil.

The soft commodities fund is up 7 percent since it launchedlast November, outperforming a 2.6 percent drop in Australia'sbenchmark S&P/ASX 200 index over the same period. ($1=1.082 Australian Dollar) (Editing by Muralikumar Anantharaman)

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HONG KONG -- Chinese property prices rose 9.3% in August from the same period a year earlier, marking a slowdown from the 10.3% increase registered in July, Reuters reported Friday, citing an official survey of 70 cities. The prices in August were unchanged from July, the report said.

Copyright © 2010 MarketWatch, Inc.

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NEW YORK -(Dow Jones)- Prices on agency mortgage-backed securities dropped Thursday as fears of faster pay-downs on these bonds ricocheted through the market. The decline was particularly sharp for securities with lower interest rates.

The price of a Fannie Mae 30-year bond with a 4% coupon, for example, fell to 102 18/32 from 103 9/32 at open on Tuesday, a loss of $7,1875.50 per $1 million of investment. Bonds with 5% coupons fell to 105 19/32 from 106 1/32, according to Tradeweb data; that would be a $4,375 loss on a $1 million investment.

Investors started selling the bonds after a monthly report showed that more homeowners were refinancing their mortgages, especially those whose loans were pooled into the 4% to 5% rate bonds. Mortgage securities can decline in value when loans are repaid sooner than anticipated.

"People were surprised, in general, at the ferocity of [the] bounce-back of prepayments," said Paul Jacob, director of research at Bank of Manhattan Capital in Manhattan Beach, Calif. "There's more prepayment risk in the system than the market expected."

Investors had been complacent over the summer months and confident that a refinancing wave wasn't coming. Many, including those who aren't typical buyers of these bonds, were lured by the government guarantee and the prospect of at least 150 basis points more in yield than comparable Treasury bonds.

Mortgage rates are at a historic low--4.35% according to the latest Freddie Mac survey released Thursday--and that threshold has brought more homeowners to consider getting a new loan at a lower rate, especially those who bought a home in 2008 and 2009, despite the cost of closing on a new loan.

The current low rate makes 67% of the outstanding loans eligible for refinancing, according to FTN Financial analysts.

Small and regional banks are taking this opportunity to increase their business and market share by offering lower rates and cheaper closing costs.

"That's been the surprise," Jacob said.

This refinancing wave is also expected to bring more supply of these bonds to the market, which will put further pressure on prices. Market participants worry that a lot of these bonds that are prepaying are those held in the Federal Reserve's portfolio. Chairman Ben Bernanke noted that the Fed received $140 billion of prepayments as of early August, and is expecting an additional $400 billion in pay-downs before the end of 2011.

Essentially, this is nearly $500 billion of fresh bonds that private investors need to buy.

This put additional pressure on the current coupon, and risk premiums on these securities widened by 3 basis points to 140 basis points on Thursday.

Copyright © 2010 Dow Jones Newswires

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Landholder AMREP (NYSE:AXR) said Thursday that its majority owner, Nicholas G. Karabot, who holds a 60% stake, submitted a proposal for it to merge with another one of his controlled companies.

The deal would offer remaining AMREP stockholders a cash consideration of $12 a share.

The proposal, which is not a definitive offer, is contingent upon approval from both AMREP’s board of directions and shareholders.

AMREP cautioned shareholders that although the proposal has been received, no decisions have been made.

Shares of AMREP surged on the news, up more than 18% to $1.85.

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By Ka Yan Ng

TORONTO (Reuters) - Canada had a record highmonthly trade deficit in July and the housing market stalled,data released Thursday showed, signaling sputtering economicgrowth as the third quarter got under way.

The weaker data came a day after the Bank of Canada raisedits key interest rate by a quarter point for a third straighttime this year, bringing the rate to 1 percent. But the bankalso cautioned that a weak U.S. economy would hamper Canada'srecovery.

The Canadian dollar held at three-week highsagainst the U.S. dollar Thursday, despite the soft data,while bonds stayed lower.

Canada's trade deficit rose more than three times expectedto C$2.74 billion ($2.66 billion) in July as exports to theUnited States sank because of anemic demand, while overallimports surged to their highest level since November 2008,Statistics Canada data showed.

The shortfall compared with a deficit of C$810 million thatwas forecast by analysts in a Reuters poll.

Statscan also revised its estimate of the June tradedeficit to C$1.81 billion from C$1.13 billion.

Exports fell 0.7 percent to C$32.80 billion in July,dragged down by weak demand for machinery and equipment andforestry products. But analysts were heartened by another jumpin imports, up 2 percent to C$35.54 billion, led by energyproducts and autos, and above the forecast of C$34.70 billion.

"If anything, the continued surge in real imports ofmachinery and equipment early in Q3 will reinforce thestatement made by the Bank of Canada that sees businessinvestment rising strongly in the coming months," said StefaneMarion, chief economist at National Bank Financial.

"Trade will obviously be a drag on growth in Q3, but it isa reflection of resilient domestic demand in Canada."

The Bank of Canada has forecast annualized growth of 2.8percent in the third quarter, following weaker-than-predicted2.0 percent growth in the second quarter. The central bank isexpected to update its forecast next month.

Canada's trade surplus with the United States narrowed toC$1.2 billion in July from C$2.4 billion in June as thestumbling U.S. economic recovery reduced demand for Canadiangoods.

"Momentum was already leaning against third quarter GDPgrowth, and this month's deterioration has all but sealed avery weak Q3 bottom line result," said Peter Hall, chiefeconomist at Export Development Canada.

Finance Minister Jim Flaherty said Thursday he wasconcerned by the trade deficit and he called on the privatesector to step up investment. Still, he said the relativelystrong performance of the economy means Canadians have everyreason to be confident despite global economic uncertainty.

HOUSING SECTOR SLOWS MORE

Housing starts fell in August for a fourth straight monthand new home prices edged lower in July for the first time in13 months, demonstrating further slowing in the sector, whichhad led the country out of recession.

Housing starts slipped a greater-than-expected 3 percent inAugust to a seasonally adjusted rate of 183,300 units from adownwardly revised 188,900 units in July, Canada Mortgage andHousing Corp (CMHC) said.

The monthly decline hit both urban single-family homes andmulti-unit dwellings, which fell 3.6 percent and 3.7 percent,respectively.

Separately, the introduction in July of a new sales tax,which blends the provincial and federal taxes into one, inOntario and British Columbia may have caused monthly declinesin the housing index in those two provinces, Statscan said.

The new housing price index slipped 0.1 percent in July,against forecasts for a 0.1 percent increase. Home prices rose0.1 percent in June.

Both housing measures add to months of data that has showna less robust housing market, robbing the nation's economicrecovery of one of its main drivers.

"Cooling housing markets are a big part of why domesticeconomic activity is slowing in Canada," said Pascal Gauthier,senior economist at TD Bank, adding homebuilding activity waseasing at an orderly pace.

Most industry watchers say the once booming sector willavoid a U.S.-style crash, however.

On Wednesday, the Conference Board of Canada was the latestto add its voice to the debate, saying the next few months willlikely not be "the best in history" for the resale and newhousing markets, but that it was not the start of a steepdownturn.

($1=$1.03 Canadian) (Additional reporting by Louise Egan, Howaida Sorour, JohnMcCrank, David Ljunggren in Ottawa; editing by Peter Galloway)

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