Eurozone debt burden hits all-time high

OFFICIAL figures show that the debt burden of the 17 European Union countries that use the euro have hit all-time highs in the first quarter despite austerity measures designed to return public finances to health.

Eurostat, the EU's statistics office, said on Monday that government debt as a proportion of the total annual gross domestic product of the eurozone pushed up to a record 92.2 per cent in the first quarter of 2013 from 90.6 per cent the previous quarter.

Though a number of countries are pushing through spending cuts and tax rises, many remain mired in recession - shrinking economies can make the debt dynamics look less favourable.

The highest debt-to-GDP ratio in the eurozone was Greece's 160.5 per cent, followed by Italy's 130.3 per cent.

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Hong Kong shares end 0.25% higher

HONG Kong shares ended 0.25 per cent higher on Monday, in line with an upturn on Shanghai's main index.

The benchmark Hang Seng Index climbed 54.08 points to 21,416.50 on turnover of HK$38.49 billion ($A5.44 billion).

The rise was welcome news for the market but trade volume nonetheless slumped to its lowest point since September.

Ben Kwong, chief operating officer at KGI Asia, told the Dow Jones Newswires that investors needed "some story to buy or sell".

"Right now, there is no story... the market as a whole is a non-event," he said.

Banking shares were particularly mixed after China's central bank on Saturday removed a lower limit on lending rates, leaving them free to set their own rates in a move analysts said could lead to narrower interest margins.

Smaller banks were hit the hardest on fears the move would spark a price war in the industry, with China Citic Bank falling three per cent to HK$3.51.

Jewellery retailer Luk Fook rose 2.3 per cent to HK$9.70, following a two per cent jump in gold prices.

China Resources Power, meanwhile, climbed 5.22 per cent following an announcement that the energy giant had scrapped a plan to combine with a sister company after shareholders rejected the proposal.

Chinese shares closed up 0.61 per cent. The benchmark Shanghai Composite Index rose 12.11 points to 2,004.76 on turnover of 69.6 billion yuan ($A12.37 billion).

"The fluctuation in share prices was caused by funds seeking short-term investment opportunities in smaller firms," Haitong Securities analyst Zhang Qi told AFP.

Media shares and environmental stocks led the gains. Liaoning Publishing & Media surged 6.51 per cent to 7.04 yuan while Shanghai Xinhua Media gained 4.98 per cent to 5.69 yuan.

Tianjin Capital Environmental Protection Group jumped 6.00 per cent to 7.77 yuan.

Bank of Nanjing rose 0.76 per cent to 7.95 yuan, while Bank of Communications fell 1.30 per cent to 3.79 yuan.

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UBS settles US mortgage lawsuit

SWISS banking giant UBS says it has settled a lawsuit linked to US subprime housing mortgages which sparked the 2008 global financial crisis.

The bank did not specify how much the settlement amounted to, but said it has set aside 865 million Swiss francs ($A1.01 billion),in the second quarter to meet litigation costs including the case.

"The full cost of the settlement is covered by litigation provisions established by UBS during the second quarter of 2013 and in prior periods," Switzerland's biggest bank said.

UBS and 17 other financial institutions were sued by the US Federal Housing Finance Agency in September 2011 for violating federal securities laws when selling residential mortgage-backed securities to government-backed lenders Fannie Mae and Freddie Mac.

The agency accused the 18 firms of misleading Fannie and Freddie about the credit-worthiness of the assets.

"UBS has reached an agreement in principle with the Federal Housing Finance Agency," UBS said.

The bank added that the deal, which still requires a final go-ahead from the different parties, would settle claims connected to the securities between 2004 and 2007.

Despite setting aside massive provisions, the bank, which is due to announce its second quarter results on July 30, said it would post a net profit of around 690 million francs for the three months ending June.

That is a jump of 62.5 per cent from a year ago and a stark improvement over the first quarter, when net profit slid 4.5 per cent. In the fourth quarter of 2012, UBS posted a loss of 1.9-billion francs.

The bank said its operating profit before tax would reach about 1.02 billion francs, an increase of 7.3 per cent over the second quarter in 2012.

Analysts hailed the better-than-expected results and the settlement of the mortgage securities suit, with Panagiotis Spiliopoulos of Vontobel predicting "juicy dividend payouts in the years to come".

Following the announcements, the bank's stocks jumped 3.4 per cent to 18.21 francs in midday trading, outperforming the Swiss stock exchange's main index, which gained just 0.12 per cent.

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Plain packs reduces allure of cigs: study

SCIENTISTS say they have evidence that plain packaging for cigarettes diminishes the appeal of smoking, as anti-tobacco campaigners suggest.

European countries are considering whether to follow Australia, which last year became the first country in the world to sell cigarettes in plain packets.

Cigarettes are now sold in identical olive-brown packets bearing the same typeface, in addition to health warnings.

Researchers questioned 536 smokers in Victoria during the transition phase, when both branded and plain-pack products were on sale.

Nearly three-quarters of those interviewed were smoking from plain packets, and the others from branded packets.

Plain-pack smokers were 66 per cent likelier to think their cigarettes were of poorer quality compared with a year earlier, and were 70 per cent likelier to say they found them less satisfying.

They were also 81 per cent likelier to have thought about quitting at least once a day during the previous week and to rate quitting as a higher priority in their lives compared to smokers using brand packs.

The study, published on BMJ Open by the British Medical Journal, did not follow up these smokers, to see what they thought or did after the transition period.

But, it says, the "early indication" is that drab packaging takes the gloss off cigarette brands.

"Plain packaging is associated with lower smoking appeal, more support for the policy and more urgency to quit among adult smokers," it says.

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Asylum boat detected with 60 on board

A suspected asylum seeker vessel was detected in waters near Christmas Island. Source: AAP

THE navy is escorting an asylum seeker boat with about 60 passengers on board to Christmas Island.

The Australian Maritime Safety Authority (AMSA) received a call from the vessel on Sunday morning, and asked the navy to assist.

A navy ship arrived in the early afternoon, and after boarding the asylum vessel began escorting it toward Christmas Island, an AMSA spokesman told AAP.

Under the Rudd government's tough new asylum seeker deal, any asylum seekers arriving by boat without a visa after last Friday will be sent to Papua New Guinea for processing.

If they're found to be genuine refugees, they may be resettled in PNG but not in Australia.

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Philippe ascends throne of divided Belgium

Belgium's King Albert II has officially abdicated in a solemn ceremony at the royal palace. Source: AAP

PHILIPPE has ascended the throne of Belgium as its seventh king amid National Day celebrations marked by hopes the fragile nation can remain united.

"I swear to abide by the constitution and the laws of the Belgian people," Philippe, 53, and dressed in full military uniform, said on Sunday in the country's three languages - French, Flemish and German.

"I am aware of the responsibilities weighing on my shoulders," he added, after the abdication of his father Albert II after 20 years at the helm of the linguistically-split country at the heart of Europe.

Albert, 79, abdicated in favour of his eldest son at a solemn ceremony in the royal palace's chandelier-laden throne room after saying he felt too old and too fragile to continue to reign.

In his last speech, Albert reiterated a call to the country's leaders "to work tirelessly in favour of Belgium's cohesion".

His voice breaking with emotion, Albert turned to his wife of 54 years, Queen Paola, to say: "As for the queen who constantly supported me in my task I would simply like to tell her 'thank you'.

"A big kiss", he added as she shed a tear and the audience of political leaders and other dignitaries broke into a long round of applause.

Under sunny skies and a light summer breeze, flags fluttered across Brussels as the day of pageantry began with a thanksgiving mass in the cathedral and crowds lined outside shouted "Long Live the King".

The medieval cathedral of St Michael and St Gudula was packed with Belgian government and other dignitaries, but there were no foreign guests in attendance.

But worries persist that the shy and often awkward prince Philippe may lack the political skills of his father to maintain unity in a nation deeply divided between its Flemish and French-speaking halves.

Mathilde, an outgoing 40-year-old who will be Belgium's first home-grown queen, is seen as his best asset in the couple's campaign to win the hearts of their 11.5 million people.

"Philippe, you have the heart and the intelligence to serve our country very well," Albert said in his abdication speech. "You and your dear wife Mathilde have all our confidence."

The monarchy more often than not is viewed as a rare symbol of Belgium's unity - along with its iconic fries and the national football team.

In the last decades, severe tensions across the linguistic divide have seen it morph progressively into a federal state that devolves increasing powers to its language-based regions.

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Japan PM Abe's coalition wins upper house

THE coalition of Japan's Prime Minister Shinzo Abe won a resounding victory in upper house elections, broadcasters' exit polls showed.

The Liberal Democratic Party and its junior partner New Komeito claimed at least 71 of the 121 seats that were being contested, NHK projected, handing them control over both chambers of parliament.

Citing its own polling and interviews with voters, the state broadcaster said the governing coalition could have won as many as 80 of the seats that were up for grabs.

There are 242 seats in the upper house, half of which are elected every three years on six-year terms.

Other television stations predicted a similar margin of victory.

The projected win means Abe will face few legislative obstacles in his drive to push through painful economic reforms, including liberalising trade and raising consumption tax to begin slowing the growth of Japan's runaway national debt.

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Abu Qatada denied bail in Jordan

A MILITARY court has rejected a bail application by Islamist cleric Abu Qatada, who faces terror charges in Jordan following his deportation from Britain, his lawyer says.

"The state security court today refused to release Abu Qatada on bail," Taysir Diab said on Sunday.

"The court gave no reason for its decision. I will meet with Abu Qatada on Wednesday to look into the issue and decide future steps."

Abu Qatada, 53, was charged on July 7 with "conspiracy to carry out terrorist acts", just hours after his deportation from Britain. He pleaded not guilty.

The next day, Diab asked the military tribunal to release on bail the Palestinian-born preacher.

He is currently in the Muwaqqar prison, a maximum security facility that houses more than 1000 inmates, most of them Islamists convicted of terror offences.

Abu Qatada was condemned to death in absentia in 1999 for conspiracy to carry out terror attacks, including on the American school in Amman.

But the sentence was immediately commuted to life imprisonment with hard labour.

In 2000, he was sentenced in his absence to 15 years for plotting to attack tourists in Jordan during millennium celebrations.

Britain's expulsion of Abu Qatada came after Amman and London last month ratified a treaty guaranteeing that evidence obtained by torture would not be used in his retrial.

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Blast heard at Beijing airport terminal

CHINESE state media say that a man set off a homemade bomb in Terminal 3 of the Beijing International Airport, but that no one besides the man was injured and order has been restored.

The official Xinhua News Agency cited witnesses in reporting that the explosion was heard at 6.24pm local time on Saturday, but gave no further details.

State-run China Central Television said on its microblog that the man was injured and sent to a hospital after setting off the bomb.

It says no one else was injured, no flights were affected and order has been restored at the airport.

Reached over the phone, the airport's news office said it was not aware of the explosion, and airport police declined to answer questions.

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Silliness reigns as UK awaits royal baby

FROM royal baby name generators to interminably dull live-feeds of a hospital door - the longer Britain waits for Prince William's wife Catherine to give birth, the more nonsense the internet provides.

Bored web users can while away hours creating ghastly photomontages of what the little heir will look like - taking Kate's hair, for example, adding William's nose and the ears of grandfather Prince Charles.

Elsewhere, a slew of royal baby name generators offer the chance to create an unlikely monicker for the newborn.

"Avoid pointless, time-wasting speculation over the name of the new royal baby, by using this handy name generator!" suggests satirical website The Poke, inviting users to create "aristocratic" monickers by adding their birthplace to the name of their pet.

With the world's media camped outside Kate's London hospital in preparation for the birth, several broadcasters are now offering riveting dawn-til-dusk online coverage of the "Great Kate Wait".

Occasionally there is a ripple of excitement when a pedestrian walks past the cameras trained on the doors of the Lindo Wing at St Mary's hospital.

Dozens of royal-themed smartphone apps are also available - including ones that allow you to transform photographs of your own children into little princes and princesses.

There are also plenty of smartphone games inspired by the future monarch, including "Royal Baby Slot Machine" and "Royal Baby Run".

"Select your royal and run as far as you can!" says the latter. Players must prevent a tiny figure of Prince William, with his baby in his arms, from falling in a ditch.

Skilled players can win credits that "unlock" other royals - Charles being the cheapest character, followed by Kate, William's brother Prince Harry and even Queen Elizabeth II herself.

Savvy advertisers, meanwhile, have also jumped on the royal baby bandwagon.

One bookmaker - taking bets on everything from the future monarch's name to its possible hair colour - dressed four men as grotesque "adult babies" and sent them onto London's underground train network, where they drew shudders from commuters.

Meanwhile The Sun, Britain's top-selling newspaper, decided on Friday to play a trick on the bored photographers camped outside the hospital.

It sent two passable royal lookalikes to the Lindo Wing, where they were frantically snapped as they walked up the steps -- only to turn around and reveal that they were actors wearing Sun t-shirts.

The burst of creativity was perhaps inspired by antics on the previous day, when a feminist activist briefly took the Sun's hospital livecam "hostage" to protest against the tabloid's use of topless models.

As the first royal baby born into the social media era, there is of course a daily avalanche of tweets on its impending arrival - including several accounts dedicated to royal baby news, or indeed the lack of it.

"Do we have a #RoyalBaby yet? Follow for frequent updates!" says the @RoyalBabyYet account. Scintillating posts include: "Not just yet, no."

Rumours that Kate may have gone into labour cause regular flurries of excitement on Twitter, but all have proved to be false alarms so far.

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