ANTIQUES SHOPS

China announced the rate cut as the Bank of England launched a third round of monetary stimulus and the European Central Bank cuts its main interest rate. Policymakers globally are trying to combat the impact of the euro area debt crisis on the world economy.

China's benchmark lending rates will be lowered by 31 basis points to 6 percent, and deposit rates will be cut by 25 basis points to 3 percent, the People's Bank of China said in a statement on its website.

The cuts are effective from Friday. The central bank last cut interest rates on June 7.

The central bank also took another step in liberalising interest rates by lowering the floor for lending rates to 70 percent of benchmark rates from 80 percent previously.

"The fact that China is actually cutting lending and deposit rates is a bigger deal than just reducing the reserve requirement," said David Morrison, market strategist at GFT Global. "But there's a great big Chinese data dump next week, so the question is whether this is a heads-up that the data will not be as good as hoped."

China is due to release data next week covering the second quarter and the month of June.

A Reuters poll published on Thursday showed that economists expect the data to show China's economy expanded in the second quarter by 7.6 percent from a year earlier, its weakest performance since the 2008-09 financial crisis.

That would be down from 8.1 percent in the first quarter and a sixth straight quarter of slowing growth.

China has lowered the amount of cash banks must keep in reserve in three 50-basis point steps since November, freeing up an estimated 1.2 trillion yuan ($190 billion) for fresh lending. The last cut was in May.

Beijing has also fast-tracked investment projects and rolled out new incentives to spur consumer spending on energy-efficient products, but it has studiously avoided any hint so far of putting together a repeat of the 4 trillion yuan fiscal spending package rolled out in 2009-10.

(Reporting by Koh Gui Qing, Shao Xiaoyi and Kevin Yao; Writing by Neil Fullick; Editing by Ian Geoghegan)

Senior officials from Greece's trio of international lenders met with conservative Prime Minister Antonis Samaras and Finance Minister Yannis Stournaras for the first time since Samaras's coalition government took power after a June election.

The mission from the "troika" - the European Union, European Central Bank and International Monetary Fund - is in Athens to review Greece's faltering progress on fiscal adjustment and reform under a 130 billion euro ($162.63 billion) bailout deal.

Trying to take advantage of a shift in Europe towards more growth-oriented economic policy measures, Samaras wants to soften the conditions attached to the bailout - withering tax hikes, job losses and wage cuts that have deepened a recession now into its fifth year.

Setting the tone, the fiery leader of the co-ruling PASOK Socialists, Evangelos Venizelos, told party lawmakers: "Savage dismissals (of public sector workers) can't happen and aren't necessary."

The government faces huge public pressure following a re-run election on June 17 that saw radical leftist bloc SYRIZA surge into second place on a promise to tear up the bailout terms, raising the prospect of a catastrophic Greek exit from Europe's single currency.

But the three-party coalition is running into stiff resistance from European partners, notably paymaster Germany, who say that while they are open to adjusting the program, they will not change its main tenets or targets.

Sworn in on Wednesday morning by black robed priests, Stournaras, a liberal economist who helped negotiate Greece's entry into the euro in 2001, was first to meet the troika. The talks ended without statements. Samaras was next up.

DEFAULT?

In Stockholm, Swedish Finance Minister Anders Borg said on Swedish Radio on Thursday there was a major risk Greece would fail to fulfill its obligations to its lenders and end up in "some sort of default".

Greece risks running out of cash within weeks if it fails to secure the next 31.5 billion-euro installment of bailout funds, Greek officials say.

The troika mission chiefs are expected to leave at the end of the week after meeting the new government but technical staff, who have already started work, will remain to review Greece's compliance with the terms of the bailout.

The mission chiefs are expected to return later in July. Only then will lenders decide how to adjust the program to take account of weeks of political paralysis during two elections in May and June and a deeper than expected recession.

The government says it wants tax cuts, a freeze on public sector layoffs, extra help for the poor and unemployed and an additional two years to cut its deficit.

If implemented in full, that program would undo many austerity measures the country agreed to earlier this year to clinch its second bailout since 2010.

It is offering in exchange to expand and speed up the privatization process.

Prime Minister Samaras will present his government's policy at the start of a three-day parliamentary debate on Friday. A vote of confidence on the coalition is scheduled to take place late on Sunday.

The head of the EU taskforce helping to rebuild the country's economy called on the government to urgently pay out a backlog of value-added-tax reimbursements owed to exporters to ease the financing crunch faced by Greek businesses.

The state owed exporters about 450 million euros in reimbursements since 2009, Horst Reichenbach told a conference in Athens.

"This backlog clearly should be cleared as soon as possible in view of the very difficult financial situation in which many of the exporters find themselves," he said.

(Additional reporting by Deepa Babington, Tatiana Fragou and Harry Papachristou; Writing by Matt Robinson; Editing by Catherine Evans)

* Energy and resources accounted for 6 pct vs 3 pct yr ago

* Says contagion risk from Europe significant

* China hard-landing unlikely, comfortable on banks (Repeats without any changes in text)

By Saeed Azhar

SINGAPORE, July 5 (Reuters) - Singapore state investor Temasek Holdings, whose portfolio swelled to a record in the last fiscal year, is looking to acquire assets in Europe and plough more money into energy and commodities after doubling its exposure to the sector.

Sovereign wealth funds such as China Investment Corp are struggling to deliver decent shareholder returns at a time when the European debt crisis and an anaemic U.S. economy are depressing capital markets from Brazil to Hong Kong. But beaten-down valuations have presented opportunities to investors such as Mexican tycoon Carlos Slim, who recently added European companies to his telecommunications empire.

Temasek's portfolio grew around 2.6 percent in the year ended March to S$198 billion ($156.37 billion), the company, whose assets are mainly in Asia, said in its latest report released on Thursday.

But net profit fell because of a tougher business environment for firms such as Singapore Airlines and Neptune Orient Lines, in which Temasek holds stakes. MSCI's broadest index of Asia-Pacific shares outside Japan declined 10.4 percent in the year ended March.

Temasek, headed by Ho Ching, the wife of Singapore's prime minister, said in the report that resources and energy accounted for 6 percent of its portfolio as of the end of March, up from 3 percent a year earlier.

In the 12 months ended March, Temasek invested S$2 billion in U.S. shale company FTS International and S$1.3 billion in fertiliser firm Mosaic Co. The firm also bought convertible shares of Chesapeake Energy, whose stock tumbled more than 30 percent in the last financial year.

"We will continue to look for opportunities in energy and resources," Chia Song Hwee, Temasek's head of strategy, told a media briefing.

Chia said there was significant contagion risk from Europe as the euro zone debt crisis heads towards its fourth year. But he said this would create opportunities to invest in companies that have exposure to Asia.

The sovereign investor said 72 percent of its portfolio was in Asia as of end-March, compared with 77 percent a year ago. Temasek's exposure to Europe and North America increased to 11 percent from 8 percent.

The Singapore fund held a net cash position at the end of March and had the financial flexibility to do deals, Chief Investment Officer Tan Chong Lee said at the briefing without elaborating.

Temasek's so-called Wealth Added, which it uses to determine the bonus pool, fell S$12.6 billion below its internal target. That was the fourth time it has dropped in the last five financial years, which will affect staff compensation.

The state investor has struggled to exceed the target since 2008 when it was burned by its exposure to European and U.S. banks because of the turmoil in global markets.

SHAREHOLDER RETURNS

Group net profit fell to S$10.7 billion from S$12.7 billion a year earlier, Temasek said.

Total shareholder returns dropped to 1.5 percent from 4.6 percent a year earlier. By comparison, Norway's $600 billion sovereign wealth fund said returns stood at 2.28 percent in international currency terms for the 12 months to March 31.

"They look reasonable, especially in the context of equity markets in recent years. The ability to do private equity-type investments could help boost future returns," said Mark Matthews, Asia head of research for Julius Baer.

"Having Singapore 'crown jewels' like the rig builders and getting stable yield from SingTel helps," he said.

In the current fiscal year, the sovereign investor has started to adjust its portfolio. Temasek paid $2.3 billion in April for a share of Industrial and Commercial Bank of China , the country's biggest bank. In May, it pared down stakes in China Construction Bank and Bank of China .

Temasek views investment in Chinese banks as long-term proxies to the broader growing Chinese economy and its expanding middle class population, according to the report.

The fund is also planning to swap a 67 percent stake in Bank Danamon for an enlarged share of Singapore's biggest lender DBS Group, a deal awaiting regulatory approval in Indonesia.

Temasek, surpassed in size locally only by the Government of Singapore Investment Corp, earlier this year hired former UBS Chief Financial Officer John Cryan to oversee its strategy for Europe, where the state investor has limited exposure.

Cryan was the most high-profile hire by the firm, raising speculation that Temasek is eyeing distressed assets in the euro zone.

"Europe is in a crisis and the best time to buy things are when there is a crisis," Julius Baer's Matthews said. "If you look at many of these European markets, they have really collapsed. I would definitely be shopping around for assets in Greece and Spain." ($1 = 1.2663 Singapore dollars) (Additional reporting by John O'Callaghan, Kevin Lim and Charmian Kok; Editing by Ryan Woo)