The Australian dollar has fallen due to continued concerns around the Euro Zone. The currency was trading at 100.54 US cents, down from 101.18 cents on Friday. Nomura Head of foreign exchange Kurt Magnus said Greece’s political situation continued to plague the market, with investors leaving the euro in favour of US dollars. “The euro is close to yearly lows, and is looking very vulnerable going into the weekend, while it’s trading below USD 1.2950,” he said. While the euro is being sold, the US dollar is being bought, as a safe-haven at the moment, and that is evident in the US dollar index.
Mining company Dart Energy has abandoned plans to drill a coal seam gas (CSG) well in Sydney’s inner west. In a statement to the Australian Securities Exchange, the company confirmed it will not undertake drilling at St Peters. Dart said it had indicated as much in a July 2011 statement, but was speaking up in light of media coverage regarding a decision by Marrickville Council on CSG drilling. The council on Tuesday unanimously voted to impose a condition prohibiting CSG mining at a site operated by recycling firm Dial-a-Dump as part of its development application.
The ANZ will cut its standard variable home loan rate by 37 basis points, becoming the final major Australian bank to move after the Reserve Bank’s official decision two weeks ago. The bank’s key mortgage rate will become 7.05 per cent, making it the second most expensive behind Westpac’s 7.09 per cent. That is the equivalent of USD 20 a week in interest repayments on an average USD 280,000 mortgage, the bank said in a statement. The decision has been long-awaited given the RBA’s 50 basis-point cut was made nearly two weeks ago. ANZ has decoupled its lending rate decision from the RBA and reviews it rates on the second Friday of each month.
The state-run Titas Gas Transmission and Distribution Company Limited, generally known as Titas Gas, will offload 10 per cent of its share in the secondary market. The decision was taken at a meeting of the board of directors of Bangladesh Oil, Gas and Mineral Corporation (Petrobangla), the parent company of Titas Gas. However, the shares will be ready for sale on the stock exchanges after some regulatory requirements are completed. The company has decided to offload the shares in line with a government decision, according to a posting on the Dhaka Stock Exchange website on Wednesday. The state-run gas company joined the country’s bourses under direct listing rules in 2008.
The National Board of Revenue (NBR) is going to introduce online tax payment system from May 26 this year aiming to facilitate paying taxes online. Prime Minister Sheikh Hasina is expected to inaugurate the payment system, first-of-its-kind in Bangladesh, on that day. The NBR will sign a tri-partite agreement next week with Sonali Bank Limited and Information Technology Consultant Limited (ITCL), a wing of Q-cash. Tax officials said the tripartite agreement will be signed to simplify and expedite collection of all types of fees and taxes of NBR.
China’s inflation rate slowed in April, raising hopes that the central bank will ease its monetary policy to sustain growth. Consumer prices rose by 3.4 per cent from a year earlier, down from 3.6 per cent in March. The rate of inflation has now been under the government’s target of four per cent for three consecutive months. This comes just a day after China reported that its export and import growth had slowed, leading to fears of a slowdown in its economy. “The slower pace of rise in consumer prices gives enough room to the central bank to step in and ease its policies further if it wants to,” Song Seng Wun of CIMB Research told BBC.
The country’s trade surplus swelled much more than expected last month, as a weak showing by its exporters outweighed even worse data for its imports. Imports to China grew just 0.3 per cent on the previous April to USD 144.8 billion, raising questions as to whether Beijing will be prompted to do more to maintain domestic demand as the country’s runaway growth rate loses pace.
Exports rose 4.9 per cent against a year earlier to USD 163.3 billion, as Chinese manufacturers felt the impact of stagnating growth in Europe and cooling demand from Asian neighbours. That left China with a trade surplus of USD 18.4 billion, a steep climb from its USD 5.4
billion surplus the previous month.
The US central bank said Industrial and Commercial Bank of China (ICBC), the biggest bank in China and 70.7 per cent owned by the government of China, will become a bank holding company. In addition, China Investment Corporation (CIC), an investment vehicle set up by the Chinese government to invest its massive foreign exchange reserves, and another company that CIC controls called Huijin Investment will be allowed to become bank holdings companies by taking control of The Bank of East Asia in New York. This is the first time a Chinese bank has been approved to acquire a US bank.
French President elect Francois Hollande signalled to Germany on Thursday that he will not be deflected from his drive to change Europe’s focus from austerity to growth after Chancellor Angela Merkel rejected any economic stimulus on credit. Hollande met Euro group President Jean-Claude Juncker in Paris as he tries to rally European partners to support his push to change the focus of Euro Zone policy. The Socialist will travel to Germany on Tuesday, hours after his inauguration as president to press his demand to add growth measures to Europe’s budget discipline treaty with Merkel.
Germany’s conservative chancellor told parliament in Berlin that growth on credit would just tip Europe deeper into crisis, rejecting stimulus policies that would require new debt.
The European Parliament has delayed approval of three major EU agency budgets because of concerns about their managers. Members of European Parliament (MEPs) have criticised the European Food Safety Authority (EFSA) for links to the food industry, considered a possible risk to EFSA’s independence. The head of EFSA’s board, Diana Banati, resigned on Wednesday. She is joining a powerful industry lobby group based in Washington DC. EFSA is based in a grand old palace in Parma, Italy, and its total budget in 2010 was 74.7 million euros. The other agencies criticised by MEPs are the EU Medicines Agency, based in London, and the Environment Agency, in Copenhagen.
Regulations to make using a mobile phone abroad significantly cheaper have been passed by the European Parliament. The plans, which were voted in by a huge majority, include imposing a price cap on operators. From July, using mobile data in Europe will not cost more than 70 cents per megabyte — far less than current rates. Consumers will also be able to choose a different operator abroad from the one they use at home. It is hoped this split-network approach — which comes into force in 2014 — will encourage greater competition. The first changes will come into effect from July 1.
India’s inflation rate probably eased only slightly in April, held firm by food prices, underscoring the Reserve Bank of India’s stance that it had little room for further rate cuts, a Reuters poll found. The median consensus from a survey of 27 economists forecast the wholesale price index, India’s main inflation gauge, rose 6.70 per cent in April versus a year ago. This is a tad slower than the average rate of 6.91 per cent in the last three months and significantly lower than the 9.52 per cent average through 2010 and 2011.
State-owned Air India risks losing a USD 5.8 billion government bailout, Civil Aviation Minister Ajit Singh said on Thursday, as industrial action by pilots disrupted flights for a fourth day. The national airline, which has been surviving on taxpayers’ money, is scheduled to get USD 1.3 billion in fresh equity from the government in the current fiscal year but this is linked to its performance. “Pilots need to understand that if Air India does not meet the performance yardsticks set in the plan, that money will not reach them. It’s not a one-time deal,” Singh told Reuters in an interview.
Shares in India’s SKS Microfinance have risen after the firm said it would cut 1,200 jobs and close 78 branches in the state of Andhra Pradesh. Its shares rose as much as 16 per cent to 105.7 Indian rupees on the Bombay Stock Exchange. Its business has been hit
after the state introduced strict rules two years ago to curb alleged harassment of clients by micro-lenders. India’s biggest micro-lender said it had written off IRs 11.2 billion of its loans in the state. “Closing down branches and reducing headcount are extremely painful decisions for us, but these have become urgent in view of the present financial situation,” said MR Rao, chief executive of SKS.
Sony shares have tumbled to a 31-year low, a day after the company reported a record annual loss of 456.7 billion yen. Sony shares fell as much as 6.7 per cent to 1,132 yen on the Tokyo Stock Exchange. The firm, which has been making a loss for each of the past four years, has forecast that it will return to profit in the current financial year. However, analysts said that investors were not convinced the firm would be able to achieve that target. “Sony is facing a lot of difficulties and the new president has not been able to produce a clear plan as to how he will turn around the company,” Yuuki Sakurai of Fukoku Capital Management told the BBC.
The Bank of Japan’s (BoJ) holdings of Japanese government bonds (JGBs) are projected to surpass the balance of bank notes for the first time in the post-war period by the end of this year, the central bank said Tuesday. This is because BoJ has decided to sharply increase JGBs it buys under an asset-buying programme, which was introduced in October 2010 to ensure financial market stability and provide stimulus to the economy, according to a report on the BoJ’s market operations for fiscal 2011. BoJ officials said the massive holdings will not pose any immediate problem. But if market players grow concerned that Japan’s fiscal discipline may be loosened, JGBs could meet with sales to boost long-term interest rates.
Infineon Technologies Kulim is investing four billion ringgit for its operations in Kulim Hi-Tech Park (KHTP) over the next 10 years. The investment is to expand its manufacturing facilities and develop a competency centre that will focus on technologies in the energy-efficiency and auto-motive industries. The current focus of the KHTP plant is the manufacturing of energy-efficient chips for automotive and power transmission industries, which are packaged in Infineon’s other plant in Malacca. Infineon Technologies Kulim Vice President and Managing Director Dr Thomas Reisinger said the decision to expand reflected Infineon’s strategy of driving its own organic growth.
Malaysia is not on the verge of bankruptcy as its debts are still at a manageable level, said a leading Malaysian economist. Professor Datuk Dr Mohamed Ariff Abdul Kareem said the saving grace for Malaysia is that the debts are largely domestically-financed which makes it less vulnerable to external shocks. Malaysia’s debt to gross domestic product ratio rose to 53.5 per cent in 2011, but it has survived its highest level yet at 112 per cent in 1986. “It can rise to 100 per cent if not much is done to reverse the (current) trend as there are already signs that the country’s credit rating is under pressure,” he said.
The government has set 4.3 per cent growth target and 825.2 billion Pakistani rupees development outlay for the next fiscal year on the conclusion of the daylong meeting of the Annual Plan Coordination Committee (APCC). The APCC meeting that was presided over by the Deputy Chairman Planning Commission, Dr Nadeem ul Haq and attended by representative of provincial governments and federal ministries and divisions decided to recommend to the National Economic Council 825.2 billion Pakistani rupees development projects for 2012-13 fiscal year. This includes development outlay of 350.2 billion Pakistani rupees federal and 475 billion Pakistani rupees provincial. The size of the foreign assistance component has been estimated 120 billion Pakistani rupees for the next fiscal year.
Independent power producers (IPPs) have held off legal proceedings against the government for failure to pay the dues and will wait for an Economic Coordination Committee (ECC) meeting, which will take up the issue. The move came just a few hours before the expiry of deadline when the government approached the IPPs, asking them to stop legal proceedings and give time for holding an ECC meeting to resolve the issue. “The IPPs advisory council has accepted the government’s request and will not proceed further before the ECC meeting on May 15,” said Abdullah Yousuf, chairman of the council, while talking to The Express Tribune.
Pakistan-US partnership appears to have reached a new low subsequent to Hillary Clinton’s statements on her recent visit to
India and the new congressional move restricting Pakistan aid, plunging the Foreign Office in a quandary, forcing it to cancel its weekly press briefing on Thursday. US Secretary of State Hillary Clinton visited New Delhi after staying in Dhaka and skipped Islamabad. In addition, she repeated the ‘Do more’ mantra, asking Pakistan to make sure that its territory was not used as a launching pad for terrorism. She also repeated Washington’s stance on the chief of a banned outfit, Jamaatud Dawa, Hafiz Saeed, saying the US had every reason to believe Saeed was the principal architect of the Mumbai terror strikes that claimed 166 people, including six Americans.
Russian Deputy Prime Minister Igor Sechin will join the board of the state oil and gas holding company, a sign he is likely to keep a leading role in the world’s largest energy industry even if he quits the cabinet. Sechin’s role in the new presidency of Vladimir Putin is a widely debated topic among Russian oil executives and foreign investors. Few doubt the close Putin ally will retain his grip on Russia’s vital industry, which is seen by many as a guarantee that an 11th hour push to win foreign capital and reform oil tax will continue.
Of all the signals and symbols that shape Russian foreign policy, this one seemed particularly blunt: Vladimir Putin, in one of the first decisions of his new presidency, will shun a Group of Eight summit hosted by US President Barack Obama. The May 18 to 19 visit was to have been Putin’s first foreign trip since he returned to the Kremlin on Monday, a chance to begin putting US ties back on track after growing tension over missile defence, Syria and Russia’s presidential campaign.
Instead, Putin is sending his junior partner, Prime Minister Dmitry Medvedev — and a message that as long as he is in charge,
Russia will not bend to Washington’s will when its interests are at stake.
Uncertainties over the euro resurfaced, sending global investors scrambling to readjust their investment strategies and holding the Stock Exchange of Thailand (SET) and regional bourses as hostages. The SET index plunged 16.60 points or 1.38 per cent to end the day at 1,190.65 on turnover of 45.8 billion baht. While European stocks opened broadly lower, Asian stocks declined as Greek politicians struggled to form a coalition government and European officials warned that the latest trench of bailout cash could be the last.
After a delay of nearly two months, the Information and Communications Technology Ministry inked a tablet-computer supply contract with the Chinese manufacturer, with the first 2,000 devices due to arrive next week and the rest to be delivered within 60 days. “The specs are higher than what was specified in the terms of reference. This model is being produced specifically for this project, not according to the general specs offered in the market,” said ICT Minister Anudith Nakornthap at the signing ceremony. He promised that the ministry’s committee would thoroughly check the devices’ specifications.
Yahoo Inc Chief Executive Scott Thompson, at the centre of a row over his educational qualifications, told his top executives on Thursday he never provided a résumé or incorrect information to Yahoo, a source familiar with the situation said. Yahoo acknowledged last week that Thompson, the former president of eBay Inc division PayPal, does not have a computer science degree, despite what was stated in his official company biography and in regulatory filings with the US Securities and Exchange Commission. Thompson sent an e-mail to Yahoo employees earlier this week apologising for the controversy, and saying he hoped a Yahoo board review of the matter would be concluded promptly.
JPMorgan Chase & Co, the biggest US bank by assets, said it suffered a trading loss of at least USD two billion from a failed hedging strategy, a shock disclosure that hit financial stocks and the reputation of the bank and its CEO, Jamie Dimon. For a bank viewed as a strong risk manager that went through the financial crisis without reporting a loss, the errors are embarrassing, especially given Dimon’s public criticism of the so-called Volcker rule to ban proprietary trading by big banks. “This puts egg on our face,” Dimon said, apologising on a hastily called conference call with stock analysts.
CBS sued ABC on Thursday to stop an upcoming reality show that CBS claims is being developed in violation of its copyrights and with secrets obtained from the long-running reality show ‘Big Brother.’ The federal lawsuit seeks an injunction barring ABC from continuing its work or airing ‘The Glass House,’ a show that will film and allow viewers to vote off contestants living together in a house. CBS claims the show copies the formula used for its hit series ‘Big Brother,’ and that ABC has hired 19 of the show’s former staffers to help make ‘The Glass House.’ The lawsuit also names two top producers of ‘The Glass House’ and an ABC programming executive who worked on ‘Big Brother,’ claiming they are violating non-disclosure agreements and giving away secrets of the show to their new employers.