Low-cost carriers to continue to drive growth in aviation industry: analysts

SINGAPORE : Low-cost carriers are driving growth in the aviation industry this year, accounting for a billion dollar increase in the profits forecast for airlines in 2012.

And Singapore Airlines (SIA) has latched on to the trend with its newly-minted low-cost carrier Scoot, in a bid to remain competitive.

Low-cost carriers have continued to enjoy healthy profits, with the number of economy passengers more than doubling that of premium travellers, according to the International Air Transport Association.

Besides Jetstar and AirAsia, SIA's Scoot started operations this year, with Cebu Pacific joining the ranks next year. .

Siva Govindasamy, Asia managing editor of Flightglobal, said: "From virtually nothing four years ago, we will have four Southeast Asian long-haul low-cost carriers next year and you are still in a market segment that is unproven.

"People do not know how much money you can make in this market segment. AirAsia X is likely to have its IPO (initial public offering) next year and we will see how the market reacts to that long-haul low-cost business model. "

Asia Pacific carriers account for more than half of the profits in the aviation industry this year, and low-cost carriers currently take up about 18 per cent of the market in Asia Pacific, compared to 24 percent globally.

Some airlines are expecting deliveries of more aircraft in 2013, with the likes of LionAir and AirAsia both adding more than 30 new planes to their current fleet. And experts have said this could lead to a price war in Indonesia and Malaysia, which could result in consolidation for smaller players.

But full service carriers aren't resting on their laurels either. Besides ordering new aircraft, SIA is also spending S$95 million to upgrade existing cabins.

But Singapore's national carrier is also repositioning its focus from the premium to value segments.

Subhranshu Sekhar Das, director (aerospace & defense practice), at Frost & Sullivan, said: "The only way to survive in this market is to consolidate and position their strengths.

"We have been seeing multiple carriers creating multiple brands under one umbrella, either SIA creating SilkAir, Scoot; Thai Air with Thai Smile and their partnership with other low-cost carriers; MAS with MASwings, Firefly..."

Besides multiple offshoots, SIA is also starting to get embroiled in a competition in Australia. SIA recently bought a 10 per cent stake in Virgin Australia and sold off its loss-making unit in Tiger Australia.

This came after a recent tie-up between Qantas and Emirates. But Qantas Airways looks set to defend its turf.

Leithen Francis, editor of Aviation Week, said: "Qantas is going to be focusing on the domestic market. I think Alan Joyce's point of view is to invest in those bits of the business that are profitable.

"Their international long-haul business is not profitable but what is very profitable is their domestic 737 operation, and also their regional turbo prop and regional jet operation. So I can see them investing more in new equipment for their operations in Australia."

But with the recent fall of India's Kingfisher Airlines, some analysts also predict that competition might soon move to India's aviation market instead.

Mr Francis said Etihad is in active negotiations to take a stake in Jet Airways and India is a very important market for Middle Eastern carriers.

- CNA/ms

Read More..

HTC's global One S gets Android 4.1.1 Jelly Bean

Android 4.1.1, also known as Jelly Bean, will finally make its way to some global version of the HTC One S.

It's still unclear when the U.S. version of the
One S, sold by T-Mobile USA, will get the update. PocketNow was the first to pick up on the new software release.

HTC phones have been slow to get the latest version of Android, partly because the company has chosen to heavily customize their products with the Sense skin, which adds a layer of complexity to future software upgrades. In addition, the updates must be approved by the carriers, further slowing the process down.

HTC had promised an update as early as July, but has only now sent out the update.

The update also brings Sense 4+, a enhanced version of its skin seen in newer flagship devices such as the Droid DNA.

Read More..

Obama cuts Hawaii trip short to address "fiscal cliff"

KAILUA, Hawaii President Barack Obama is cutting short his traditional Christmas holiday in Hawaii to return to Washington as lawmakers consider how to prevent the economy from going over the so-called fiscal cliff, the White House said Tuesday.

Obama will fly back to the nation's capital Wednesday night, just five days after arriving in Hawaii, White House officials said. In the past, the president's end-of-the-year holiday in his native state has stretched into the new year.

Congress is expected to return to Washington on Thursday. Automatic budget cuts and tax increases are set to begin in January. So far, the president and congressional Republicans have been unable to reach agreement on any alternatives.

Play Video

Seven days 'til the "fiscal cliff"

11 Photos

The Obamas in Hawaii

CBS News correspondent Nancy Cordes reported earlier Tuesday that the president will likely put pressure on Congress to pass a Democratic plan being drafted by Senate Majority Leader Harry Reid.

"There still have been no conversations between Democrats and Republicans Tuesday on how to avert the fiscal cliff," Cordes reported from Hawaii. "That's a sure sign that Reid is working on crafting legislation on his own, which he'd essentially dare Republicans in the House and Senate to pass just before the deadline."

Cordes notes that Reid's bill would likely extend the Bush-era tax cuts for households making less than $250,000 a year. It may also include enough short-term spending cuts to temporarily offset, for about six to eight months, the across-the-board spending cuts set to go into effect on January 1, 2013.

Lawmakers have expressed little but pessimism for the prospect of an agreement coming before Jan. 1. On Sunday, Sen. Kay Bailey Hutchison, R-Texas, said she expects any action in the waning days of the year to be "a patch because in four days we can't solve everything."

The Obamas were spending the holiday at a rented home near Honolulu. On Christmas Day, the president and first lady Michelle Obama visited with Marines to express thanks for their service.

"One of my favorite things is always coming to base on Christmas Day just to meet you and say thank you," the president said. He called being commander in chief his greatest honor as president.

Obama took photos with individual service members and their families.

Read More..

Storms Spawn 34 Tornado Reports Across South

Severe Christmas day weather tore across the deep South, spinning off 34 possible tornadoes and killing at least three people in its path, while extreme weather is forecast throughout today for parts of the East Coast.

The storm first pounded Texas, then touched down in Louisiana and blasted through homes in Mississippi. In Mobile, Ala., a wide funnel cloud was barreled across the city as lightning flashed inside like giant Christmas ornaments.

Bill Bunting with the National Weather Service's Severe Storms Prediction Center said that the damage may not yet be done.

"Conditions don't look quite as volatile over a large area as we saw on Christmas day but there will be a risk of tornadoes, some of them could be rather strong, across eastern portions of North Carolina and the northeastern part of South Carolina," he said.

Across the Gulf region, from Texas to Florida, over 280,000 customers are still without power, with 100,000 without power in Little Rock, Ark. alone.

The punishing winds mangled Mobile's graceful ante-bellum homes, and today, dazed residents are picking through debris while rescue crews search for people trapped in the rubble.

"We've got a lot of damage, we've got people hurt," one Mobile resident told ABC News. "We've had homes that are 90 percent destroyed."

Melinda Martinez/The Daily Town Talk/AP Photo

In the Houston area a tree fell onto a pickup truck, killing the driver, ABC affiliate WTRK reported. In Louisiana, a 53-year-old man died when a tree fell on his house, and a 28-year-old woman was killed in a crash on a snowy highway near Fairview, Okla., according to the Associated Press.

At least eight states issued blizzard warnings Tuesday, as the storms made highways dangerously slick heading into one of the busiest travel days of the year.

Tuesday's extreme weather caused an 8-foot deep sinkhole in Vicksburg, Miss. Alma Jackson told ABC News that a concrete tank that was in her backyard fell into the sinkhole.

"It's really very disturbing," she said. "Because it's on Christmas day, and then to see this big hole in the ground and not have any explanation, and not be able to cover it. And the rain is pouring down."

Teresa Mason told ABC News that she and her boyfriend panicked when they saw the tornado heading toward them in Stone County, in southern Mississippi, but she says they were actually saved when a tree fell onto the truck.

"[We] got in the truck and made it out there to the road. And that's when the tornado was over us. And it started jerking us and spinning us, "she said."This tree got us in the truck and kept us from being sucked up into the tornado."

The last time a number of tornadoes hit the Gulf Coast area around Christmas Day was in 2009, when 22 tornadoes struck on Christmas Eve morning, National Weather Service spokesman Chris Vaccaro told ABC News in an email.

The deadliest Christmastime tornado outbreak on record was Dec. 24 to 26, 1982, when 29 tornadoes in Oklahoma, Missouri, Arkansas, Tennessee and Mississippi killed three people and injured 32.

The last killer tornado around Christmas, Vaccaro said, was a Christmas Eve EF4 in Tennessee in 1988, which killed one person and injured seven. EF4 tornadoes can produce winds up to 200 mph.

ABC News' Matt Gutman, Max Golembo and ABC News Radio contributed to this report.

Read More..

Syria to discuss Brahimi proposals with Russia

BEIRUT (Reuters) - Syrian President Bashar al-Assad dispatched a senior diplomat to Moscow on Wednesday to discuss proposals made by envoy Lakhdar Brahimi to end the conflict convulsing his country, Syrian and Lebanese sources said.

Brahimi, who met Assad on Monday as part of a series of planned talks with Syrian officials and dissidents in Damascus this week, is trying to arrange a peaceful transfer of power, but has disclosed little about how this might be achieved.

More than 44,000 Syrians have died in the revolt against four decades of Assad family rule, a conflict that began with peaceful protests but which has descended into civil war.

Past peace efforts have floundered, with world powers divided over what has become an increasingly sectarian struggle between mostly Sunni Muslim rebels and Assad's security forces, drawn primarily from his Shi'ite-rooted Alawite minority.

Deputy Foreign Minister Faisal Makdad flew to Moscow to discuss the details of the talks with Brahimi, said a Syrian security source, who would not say if a deal was in the works.

However, a Lebanese official close to Damascus said Makdad had been sent to seek Russian advice on a possible agreement.

He said Syrian officials were upbeat after talks with Brahimi, the U.N.-Arab League envoy, who met Foreign Minister Walid Moualem on Tuesday a day after his session with Assad, but who has not outlined his ideas in public.

"There is a new mood now and something good is happening," the official said, asking not to be named. He gave no details.

Russia, which has given Assad diplomatic and military aid in the 21-month-old uprising, has said it is not protecting him, but has fiercely criticized any foreign backing for rebels and, with China, has blocked U.N. Security Council action on Syria.

On Saturday, Russian Foreign Minister Sergei Lavrov said Syria's civil war had reached stalemate and international efforts to persuade Assad to quit would fail.

Assad's opponents insist the Syrian president must go, given the scale of bloodshed and destruction they blame on him.

Moaz Alkhatib, head of the internationally recognized Syrian National Coalition opposition, has criticized any notion of a transitional government in which Assad would stay on as a figurehead president stripped of any real powers.

SHELLING KILLS 20

The comments on Alkhatib's Facebook page on Monday suggested that the opposition believed this was among Brahimi's ideas.

"We have told every official we have met: the government and its president cannot stay on in power, with or without their powers. This is unacceptable to Syrians," Alkhatib wrote.

"The coalition leadership has told Lakhdar Brahimi directly that this type of solution is rejected."

While Brahimi was striving to bridge the vast gaps between Assad and his foes, fighting raged on across the country and a senior Syrian military officer defected to the rebels.

Syrian army shelling killed about 20 people, at least eight of them children, in the northern province of Raqqa, a video posted by opposition campaigners showed.

The video published by the Syrian Observatory for Human Rights showed rows of blood-stained bodies laid out on blankets. The sound of crying relatives could be heard in the background.

The shelling hit the province's al-Qahtania village, but it was unclear when the attack had occurred.

Rebels re-launched their assault on the Wadi Deif military base in the northwestern province of Idlib, in a critical battle for a major army base and fuel storage and distribution point.

Activist Ahmed Kaddour said rebels were firing mortars and had attacked the base with an explosives-rigged vehicle.

The British-based Observatory, which uses a network of contacts in Syria to monitor the conflict, said a rebel commander was among several killed in Wednesday's fighting, which it said was among the heaviest there for months.

As violence has intensified in recent weeks, with Assad using his air power and artillery to contain rebel advances, daily death tolls have climbed. At least 190 were killed across the country on Tuesday alone, the Observatory said.

The head of Syria's military police changed sides and declared allegiance to the anti-Assad revolt.

"I am General Abdelaziz Jassim al-Shalal, head of the military police. I have defected because of the deviation of the army from its primary duty of protecting the country and its transformation into gangs of killing and destruction," the officer said in a video published on YouTube.

A Syrian security source confirmed the defection, but said Shalal was near retirement and had only defected to "play hero".

Syrian Interior Minister Mohammed Ibrahim al-Shaar left Lebanon for Damascus after being treated in Beirut for wounds sustained in a rebel bomb attack this month.

(Additional reporting by Laila Bassam; Writing by Alistair Lyon)

Read More..

Thai court jails ex-trader over royal health web rumours

BANGKOK: A Thai court jailed a former equity trader for four years on Tuesday for posting false Internet messages about the king's health that sent stocks plunging in 2009, an official said.

Katha Pajariyapong, 39, was found guilty of three counts of breaching the kingdom's controversial computer crime laws in messages posted under his username on the Sameskybooks.org Internet forum.

The messages on October 14-15 in 2009 were followed by a slump in the Thai stock market -- which at one stage plunged by more than eight per cent -- over rumours about the condition of the revered but ageing King Bhumibol Adulyadej.

The court found Katha, of brokerage company KT ZMICO, guilty despite his denials during trial, a court official told AFP, adding "he is sentenced to four years in jail immediately".

An initial sentence of six years was reduced by a third because he had confessed when he was first charged three years ago, despite later pleading not guilty at trial.

The monarchy is a highly sensitive topic in politically turbulent Thailand. The 85-year-old king, who is revered as a demi-god by many Thais, has been hospitalised since September 2009.

Soon after Katha was charged a media rights group called for the dismissal of the "baseless" charges against him, and two others.

The trio were charged under section 14 of the computer crime act which punishes anyone found guilty of spreading "false information into the computer system" that damages national security or causes the public to panic.

Thailand also has a strict lese majeste law under which insulting or defaming any members of the royal family is punishable by up to 15 years in jail.

The Internet has become one of the key battlegrounds for Thailand's complex political debates with social networks surging in popularity over the last few years.

Tens of thousands of web pages have been removed from the Internet in recent years from for allegedly insulting the monarchy.

- AFP/jc

Read More..

LG's 2013 home theater line doubles down on sound bars, Bluetooth speakers

CES 2013 is still weeks away, but LG is getting a jump on the show by announcing its full line of home theater products on Christmas Day.

Its home audio offerings are anchored by four new sound bar models, with all but the entry-level NB2030A featuring built-in Bluetooth and a wireless subwoofer. The top two models come in a new, larger size, designed to match 47-inch TVs, which reflects the rising popularity of larger screen HDTVs.

The strangest model may be the NB3730A, which includes built-in Wi-Fi and a basic streaming-media suite including including Netflix, YouTube, Amazon, Hulu Plus, Vudu, and Pandora. Paying extra for streaming-media in a sound bar seems like a hard sell -- especially with the superior Roku LT available for just $50 -- so I'd be surprised if many people opted for the NB3730A over less expensive models. Full breakdown of sound bar features below:

Click to enlarge.

(Credit:
LG)

The chart also includes LG's line of Blu-ray home-theater-in-a-box systems, which all featuring built-in Wi-Fi and LG's full Smart TV suite of apps. You'll notice the higher-end models are listed as "9.1 systems", but that's more marketing than anything else -- the additional channels are top-mounted drivers on the speakers, designed to create a more immersive sound. (CNET's experience with "height" channels in home audio has been underwhelming.) Regardless, I've been hesitant to recommend HTIB systems these days over competing
options, and these models don't offer anything that changes my mind.

For Blu-ray, LG is slimming its line down to just three models: BP330, BP530 and BP730. At first glance, the entry-level BP330 looks most attractive, with built-in Wi-Fi and the same stripped-down collection of streaming services included on the NB3730A sound bar.

The most interesting step-up feature on the BP530 and BDP730 is "private sound mode", which lets you listen to the audio of your Blu-ray player via an app on your smartphone -- essentially a DIY wireless headphones solution. That's probably not enough incentive to pay extra over the BP330, but it's a feature that's likely to appeal to more buyers than 3D, 4K upscaling, or a Web browser. A full breakdown of the features is below:

Click to enlarge.

(Credit:
LG)

Like seemingly every manufacturer, LG is also expanding its selection of Bluetooth/AirPlay and docking speakers. There's not much to differentiate these kinds of speakers without listening to them, although the NP6630 and ND8630 interestingly include AirPlay, Bluetooth, DLNA, and NFC, with the latter also including a dual-dock that can accommodate iPhones, iPads, and some
Android devices.

While none of these products screams "break-out hit", there look to be many solid, workaday products in the new line for buyers looking to pickup a Blu-ray player, Bluetooth speaker, or sound bar, although we'll have a better idea after LG announces pricing.

Read More..

Pope decries slaughter of "defenseless" in Syria

VATICAN CITY Pope Benedict XVI wished Christmas peace to the world Tuesday, decrying the slaughter of the "defenseless" in Syria and urging Israelis and Palestinians to find the courage to negotiate.

Delivering the Vatican's traditional Christmas day message from the central balcony of St. Peter's Basilica, Benedict also encouraged Arab spring nations, especially Egypt, to build just and respectful societies.

He prayed that China's new leaders respect religion, a reference to persecution Chinese Roman Catholics have at times endured under communism.

As the 85-year-old pontiff, bundled up in an ermine-trimmed red cape, gingerly stepped foot on the balcony, the pilgrims, tourists and Romans below backing St. Peter's Square erupted in cheers.

Less than 12 hours earlier, Benedict had led a two-hour long Christmas Eve ceremony in the basilica. He sounded hoarse and looked weary as he read his Christmas message and then holiday greetings in 65 languages.

Play Video

Christians around the world celebrate Christmas

In his "Urbi et Orbi" speech, which traditionally reviews world events and global challenges, Benedict prayed that "peace spring up for the people of Syria, deeply wounded and divided by a conflict that does not spare even the defenseless and reaps innocent victims."

He called for easier access to help refugees and for "dialogue in the pursuit of a political solution to the conflict."

Benedict prayed that God "grant Israelis and Palestinians courage to end long years of conflict and division, and to embark resolutely on the path to negotiation."

Hours earlier, in the ancient Bethlehem church built over the site where tradition holds Jesus was born, candles illuminated the sacred site and the joyous sound of prayer filled its overflowing halls.

Overcast skies and a cold wind in the Holy Land didn't dampen the spirits of worshippers in the biblical West Bank town. Bells pealed and long lines formed inside the fourth-century Church of the Nativity complex as Christian faithful waited to see the grotto that is Jesus' traditional birthplace.

Duncan Hardock, 24, a writer from MacLean, Va., traveled to Bethlehem from the republic of Georgia, where he had been teaching English. After passing through the separation barrier Israel built to ward off West Bank attackers, he walked to Bethlehem's Manger Square where the church stands.

"I feel we got to see both sides of Bethlehem in a really short period of time," Hardock said. "On our walk from the wall, we got to see the lonesome, closed side of Bethlehem. ... But the moment we got into town, we're suddenly in the middle of the party."

Bethlehem lies 6 miles south of Jerusalem. Entry to the city is controlled by Israel, which occupied the West Bank in 1967.

For those who couldn't fit into the cavernous Bethlehem church, a loudspeaker outside broadcast the Christmas day service to hundreds of faithful in the square.

Their Palestinian hosts, who welcome this holiday as the high point of their city's year, were especially joyous this season, proud of the United Nations' recognition of an independent state of Palestine just last month.

Israel, backed by the United States, opposed the Palestinian statehood bid, saying it was a ploy to bypass negotiations, something the Palestinians deny. Talks stalled four years ago.

Back at the Vatican, Benedict offered encouragement to countries after the Arab spring of democracy protests. He had a special word for Egypt, "blessed by the childhood of Jesus."

Without citing the tumultuous politics and clashes in the region, he urged the North African region to build societies "founded on justice and respect for the dignity of every person."

Benedict prayed for the return of peace in Mali and harmony in Nigeria, where, he recalled "savage acts of terrorism continue to reap victims, particularly among Christians." He also recalled the problems of refugees from fighting in the Democratic Republic of Congo and decried brutal attacks hitting places of worship in Kenya.

The Vatican for decades has been worried about the well-being of its flock in China, who are loyal to the pope in defiance of the communist's government support of an officially sponsored church, and relations between Beijing and the Holy See are often tense.

Speaking about China's newly installed regime leaders, Benedict expressed hope that "they will esteem the contribution of the religions, in respect for each other, in such a way that they can help to build a fraternal society for the benefit of that noble people and of the whole world."

Acknowledging Latin America's predominant Christian population, he urged government leaders to carry out commitments to development and to fighting organized crime.

Read More..

Winter Storms, Tornado Threats for Christmas in US

Forecasts of snow, sleet and freezing rain threatened to complicate Christmas Day travel around the nation's midsection Tuesday as several Gulf Coast states braced for a chance of twisters and powerful thunderstorms.

A blizzard watch was posted for parts of Indiana and western Kentucky for storms expected to develop Tuesday amid predictions of up to 4 to 7 inches of snow in coming hours. Much of Oklahoma and Arkansas braced under a winter storm warning of an early mix of rain and sleet later turning to snow.

Some mountainous areas of Arkansas' Ozark Mountains could get up to 10 inches of snow amid warnings travel could become "very hazardous or impossible" in the northern tier of the state from near whiteout conditions, the National Weather Service said.

Early Tuesday, the Oklahoma Department of Public Safety said some bridges and overpasses were already becoming slick. Also, Kathleen O'Shea with Oklahoma Gas and Electric said the utility was tracking the storm system to see where repair crews might be needed among nearly 800,000 customers in Oklahoma and western Arkansas.

Elsewhere, areas of east Texas and Louisiana braced for possible thunderstorms as forecasters eyed a swath of the Gulf Coast from east Texas to the Florida Panhandle for the threat of any tornadoes.

Storms expected during the day Tuesday along the Gulf Coast could bring strong tornadoes or winds of more than 75 mph, heavy rain, quarter-sized hail and dangerous lightning in Louisiana and Mississippi, the weather service said.

"Please plan now for how you will receive a severe weather warning, and know where you will go when it is issued. It only takes a few minutes, and it will help everyone have a safe Christmas," Mississippi Gov. Phil Bryant said.

Ten storm systems in the last 50 years have spawned at least one Christmastime tornado with winds of 113 mph or more in the South, said Chris Vaccaro, a National Weather Service spokesman in Washington, via email.

The most lethal were the storms of Dec. 24-26, 1982, when 29 tornadoes in Oklahoma, Missouri, Arkansas, Tennessee and Mississippi killed three people and injured 32; and those of Dec. 24-25, 1964, when two people were killed and about 30 people injured by 14 tornadoes in seven states.

In Alabama, the director of the Emergency Management Agency, Art Faulkner, said he has briefed both local officials and Gov. Robert Bentley on plans for dealing with a possible outbreak of storms.

No day is good for severe weather, but Faulkner said Christmas adds extra challenges because people are visiting unfamiliar areas and often thinking more of snow than possible twisters.

"We are trying to get the word out through our media partners and through social media that people need to be prepared," Faulkner said

During the night, flog blanketed highways at times in the Southeast, including arteries in Atlanta where motorists slowed as a precaution. Fog advisories were posted from Alabama through the Carolinas into southwestern Virginia.

Several communities in Louisiana went ahead with the annual Christmas Eve lighting more than 100 towering log teepees for annual bonfires to welcome Pere Noel along the Mississippi River between New Orleans and Baton Rouge. That decision came after fire chiefs and local officials decided to go ahead with the tradition after an afternoon conference call with the National Weather Service.

In California, after a brief reprieve across the northern half of the state on Monday, wet weather was expected to make another appearance on Christmas Day. Flooding and snarled holiday traffic were expected in Southern California.

———

Associated Press writer Bob Johnson in Montgomery, Ala., and Ken Miller in Oklahoma City, Okla., contributed to this report.

Read More..

Egyptians fret over economy after rancorous vote on constitution

CAIRO (Reuters) - Egypt prepared to announce on Tuesday the result of a vote on a new constitution that Islamist President Mohamed Mursi hails as a step toward stability in a country beset by political and economic crisis.

But critics say that by ramming through the basic law, Mursi has angered his liberal, leftist and Christian opponents, and may have squandered any chance of building a broad consensus on tax rises needed to rein in a crushing budget deficit.

Unofficial tallies from Mursi's Muslim Brotherhood showed the charter was approved by a 64 percent majority. The electoral commission will announce the official result at 1700 GMT, with the final numbers widely expected to confirm earlier estimates.

Mursi believes the constitution will end a protracted period of turmoil that has haunted the most populous Arab nation since the fall of military-backed strongman Hosni Mubarak in 2011.

But ordinary people and some commentators worry that Mursi's approach in pushing through the contentious text will only galvanize his rivals to capitalize on any public backlash against austerity rather than help sell reforms to the nation.

Hossam El-Din Ali, a 35-year-old newspaper vendor in central Cairo, said he agreed the new constitution would help bring some political stability but like many others he feared the possible austerity measures lying ahead.

"People don't want higher prices. People are upset about this," he said. "There is recession, things are not moving. But I am wishing for the best, God willing."

If the "yes" vote is confirmed, a parliamentary election will follow in about two months, setting the stage for Islamists to renew their struggle with more liberal-minded opponents.

On the political front, tensions remain high. The opposition says the constitution, crafted mostly by Mursi's Islamist allies, fails to guarantee personal freedoms and the rights of women and minorities. The government denies this.

ECONOMIC WORRIES

Once a darling of emerging market investors, Egypt's economy has taken a hammering since Mubarak's fall.

The budget deficit surged to a crippling 11 percent of gross domestic product in the financial year that ended in June 2012 and is forecast to exceed 10 percent this year.

In a further worrying sign, Egypt has made it illegal for travelers to carry more than $10,000 in cash in or out of the country amid growing fears the government may not be able to get its fragile finances under control.

Reflecting investor concerns, Standard and Poor's cut Egypt's long-term credit rating this week and said another cut was possible if political turbulence worsened.

Adding fuel to people's worries, the central bank also said it was taking steps to safeguard bank deposits, in a statement which emerged after some Egyptians said they had taken out cash out of concern their accounts would be frozen by authorities.

Without broad support, Mursi will find it hard to implement reforms needed to secure a $4.8 billion loan from the International Monetary Fund.

Shortly before the referendum, Mursi enraged many by introducing hikes on the sales tax on goods and services that ranged from alcoholic beverages, cigarettes and mobile phone calls to automobile licenses and quarrying permits.

In an embarrassing policy U-turn, he withdrew them within hours under criticism from his opponents and the media.

Facing public anger, the Muslim Brotherhood's party, which propelled Mursi to office in an election earlier this year, may now also face a tougher fight in the parliamentary election.

(Writing by Maria Golovnina; Editing by Alistair Lyon)

Read More..