AUSTRALIA
The federal government has justified plans to cut parenting allowances and welfare payments for people travelling overseas by stressing the importance of work for all Australians. The government is expected to scale down parenting payments in Tuesday’s budget, delivering USD 700 million in savings. Single parents would lose support payments when their youngest child turns eight and be transferred to the new start allowance. For partnered parents, income support will end when their youngest child turns six. Welfare recipients will lose benefits if they travel overseas for more than six weeks. Assistant Treasurer David Bradbury said the government believed in the importance and dignity of work for all Australians.The Reserve Bank of Australia (RBA) has lowered its forecasts for inflation and
economic growth, but sees those forecasts as resting on some key assumptions about wages and productivity. In its quarterly statement on monetary policy, the RBA confirmed that although Europe’s sovereign debt crisis remains the biggest risk to world economy, its interest rate cut on Tuesday was a response to slower economic activity in Australia. It had earlier flagged the possibility of lower
rates, given a benign inflation outlook, if the economy needed a boost. In the statement, the RBA said that data over the recent couple of months had suggested that it was appropriate to take a further step in that direction. Australian Businessman Clive Palmer said he plans to build and operate a fleet of four freighters to import nickel ore to a nickel refining plant purchased from BHP Billiton. The decision by the billionaire, who made much of his fortune buying and selling coastal real estate, comes days after announcing he would build an ‘unsinkable’ version of the Titanic to mark the 100th anniversary of the sinking of the original ocean liner. The shipping business, called Asia Pacific
Shipping Enterprises, will operate out of Singapore and be majority-owned by the Queensland Nickel Group of Companies,
according to a statement issued by Palmer.
BANGLADESH Karnaphuli Fertiliser Company Limited (KAFCO) proposed to set up its second unit spending USD one billion with a production capacity of 1.2 million metric tonnes of urea a year. KAFCO officials put forward the proposal at a meeting with Industries Minister Dilip Barua at his Shilpa Bhawan office in Dhaka. The new unit will be set up under Public Private Partnership (PPP) with financial support from Japan and Denmark. Once implemented, the unit is expected to produce 3,500 metric tonnes of urea a day on average. During the meeting, both parties decided to sign a memorandum of understanding soon after the approval to set up the second unit of KAFCO.
Bangladesh’s overall import orders decreased slightly in March this year over the previous month, mainly due to lower opening of letters of credit (LoCs) for fuel oil import, officials said. Opening of LoCs against import, generally known as import orders, fell by 7.33 per cent in March over February 2012, according to the central bank statistics. “The country’s overall import orders decreased in March mainly due to drop in opening of fresh LoCs for fuel oil import,” a senior official of the Bangladesh Bank, the country’s central bank, told BBN in Dhaka, adding that the import orders for petroleum products increased in February for harvesting of Boro crop across the country.
CHINA
China’s yuan is at equilibrium against the dollar and even high in some respects, the country’s main official newspaper said on Friday in remarks that could sow further tension in talks between Beijing and Washington. The People’s Daily, the mouthpiece newspaper of the ruling communist party, said differences in labour productivity and operating costs in the world’s two biggest economies show the yuan is reasonably valued versus the dollar. The article came just a day after US Treasury Secretary Timothy Geithner was in China with Secretary of State Hillary Clinton for annual talks with Beijing for more flexible policy. China’s services sector enjoyed its busiest month in half a year in April, with
business expectations at their highest level in 12 months, a private sector survey of purchasing managers showed on Friday. The seasonally adjusted HSBC China Services Purchasing Managers Index (PMI) rose to 54.1 in April from 53.3 in March, its strongest
reading since October 2011, and followed an uptick in HSBC’s manufacturing PMI released earlier this week. The rise in the HSBC
services PMI was in contrast to a retreat in China’s official services PMI, which was weighed down mainly by a continuing
downturn in the real estate sector. Singapore’s Temasek Holdings is seeking to sell USD 2.4 billion worth of its shares in Bank of China and China Construction Bank — two of China’s biggest lenders. The move comes as shares of the two banks have risen almost 14 per cent this year. However, profit growth at Chinese lenders has slowed recently amid tight controls on lending in the country. This is the second time in 10 months that Temasek has sold shares in the two banks. It offloaded USD 3.6 billion worth of shares in the two firms last July.
EUROPE
State-backed Royal Bank of Scotland (RBS) said it was on the path to recovery after a better-than-expected quarterly profit, and the government had ‘no desire’ to start selling its stake at current depressed prices. The government owns 82 per cent stake in the bank after a 2008 bailout during the financial crisis that also involved emergency loans to the bank. The bank would reportedly finish paying back the emergency loans next week. It will also recommence payment of dividends and coupons on hybrid capital. Sources said the government had held talks with Abu Dhabi in March, raising speculation RBS shares could be sold, although a deal is still seen as months away.
Prime Minister David Cameron’s conservatives suffered heavy losses in local government elections as voters punished the government for unpopular usterity measures that failed to avert a double-dip recession, early results showed on Friday. Cameron hopes a likely win for his
party’s larger-than-life London mayoral candidate, incumbent Boris Johnson, will soften the blow, but there was no mistaking the message from voters to the conservatives and their liberal democrat coalition partners. With results declared in more than half of the local councils being contested across the country, the opposition labour party had gained 457 councillors while the conservatives had lost 274 and the liberal democrats 127. Growth in the UK’s dominant service sector slowed in April but remained ‘solid’, according to a closely-watched survey. The Markit/CIPS services purchasing managers’ index (PMI) fell to 53.3 last month from 55.3 in March. A number above 50 indicates growth. The survey found that profit margins were under pressure from a ‘strong’ rise in input prices. But it also found business expect-ations at their highest level for two years. PMI figures published earlier in the week indicated growth in both the manufacturing and
construction sectors had slowed last month.
INDIA
The Vijaya Mallaya-promoted Kingfisher Airlines continues to hit air pockets with two real estate developers now slapping
eviction notice for allegedly defaulting on rent payments since last November. The airlines sources confirmed the development and said the management is negotiating with the developers to resolve the deadlock. The cash-strapped airline has a rented property in the Andheri suburb of the city, from where it is running a part of its operations, while the main administrative office is located at the Kingfisher House, which the promoter Mallya has been planning to monetise to raise some working capital funds for the airline. “Senior airlines representatives are in talks with some of the developers for quite some time now to resolve the deadlock and arrive at a solution,” Kingfisher Airlines sources said. Infosys has started offering its core banking solution on the cloud and is targeting smaller banks by offering fee-based usage of the product. “We are working with some cooperative banks on this and area also looking at the African market for this
product,” said Haragopal Mangipudi, senior vice president and global head of Finacle at Infosys. Finacle on the cloud would enable smaller banks without the resources to offer their customers the same kind of anytime-anywhere banking services offered by new generation banks. It would also enable them to use multiple channels like ATMs, internet and mobile for extending banking services without making large investments. With the Indian rupee fast losing value against the US dollar, Finance Minister Pranab Mukherjee on Friday blamed volatility in global commodity prices for currency depreciation and said deteriorating balance of payment (BoP) situation in several Asian countries also put stress on currencies. “In several Asian countries, except China, the BoP is under stress which leads to currency
depreciation,” Mukherjee told reporters. Mukherjee, who is attending 45th annual meeting of the Asian Development Bank Board of Governors, said certain fundament-als in the Indian economy have to be corrected against the backdrop of the rating agency Standard and Poor’s downgrading outlook for the country’s sovereign rating.
JAPAN
Japan could face ‘the day of reckoning’ sooner than expected if the government fails to raise the sales tax and investors
demand higher returns on government bonds, Moody’s Investors Service said on Wednesday, keeping up the pressure on Tokyo to enact tax reform bills. Tom Byrne, senior vice president and regional officer, acknow-ledged the tax increase would leave Japan
facing weaker economic growth but said the country needs to ‘bite the bullet’ and start fixing public finances driven by swelling welfare costs. “If you don’t increase taxes, you’d have to issue more JGBs, which moves the day of reckoning closer to the tipping point where markets demand higher risk premiums,” Byrne told reporters on the sidelines of the Asian Development Bank meeting in Manila.
The finance ministers and central bank chiefs of Japan, China and South Korea agreed to press ahead with purchases of each other’s bonds to further strengthen their financial cooperation on Thursday. Under the agreement, Finance Minister Jun Azumi announced that Tokyo will purchase government bonds from South Korea for the first time to diversify Japan’s foreign-exchange reserves and improve the credit-worthiness of South Korea. In March, Tokyo agreed to purchase bonds issued by the Chinese government. “It is better to have a wide variety in our holdings of foreign government bonds,” said Azumi. MALAYSIAThe share price of Malaysian Bulk Carrier (Maybulk) rose to its highest in more than two months on Friday, underpinned by the improvement in the outlook for the Baltic Dry Index (BDI), a key barometer for dry bulk
cargo rates. Maybulk was up 14 sen to 1.79 ringgit with 3.95 million shares done. The call warrants Maybulk-CC added six sen to 16.5 sen with 25.26 million units transacted and Maybulk-CE 1.5 sen to 6.5 sen (12.69 million shares) The BDI was at 1,164, as the demand for dry bulk carriers continued to improve. The BDI had fallen way below the key 1,000-mark to a three-year low during the Chinese New Year festive season. Kenanga Research raised its target price on MBM Resources to 6.57 ringgit per share from 5.38 ringgit, citing stronger earnings
outlook ahead for the Malaysian auto parts maker on the back of its expansion plans. “We believe in the potential for MBM to grow into a significant auto parts player that would complement its existing manufacturing division,” the broker said in a research note. Maintaining an ‘outperform’ call on counter, Kenanga said MBM offered operational cost efficiency that benefits the entire group in cost savings.
PAKISTAN
Federal Finance Ministry has said that over 1.167 trillion Pakistani rupees worth of currency notes were printed during the four years of the present government, Geo News reported. The finance ministry, in a written reply to the national assembly, said that
over 1.167 trillion Pakistani rupees worth of currency notes were printed during the last four years, of which, the maximum amount of more than 650 billion Pakistani rupees were of 1,000 notes. The reply further said that 216 billion Pakistani rupees worth of 500 Pakistani rupees notes, 676 billion Pakistani rupees of 1,000 Pakistani rupees notes, while the highest amount currency note of 5,000 Pakistani rupees were printed worth of 102 billion Pakistani rupees.Ministry of Petroleum has failed to remove Geological Survey of Pakistan (GSP) deputy director general whose reappointment has been declared illegal by the Islamabad High Court. The court in its judgement on April 26, 2012 declared the reappointment of Abdul Ghaffar Khan Afridi illegal and directed secretaries of Ministry of Petroleum, Establishment Division, the prime minister and the Federal Public Service Commission (FPSC) to immediately remove the respondent from his services. “He is still holding the post and no action has been taken so far in line with the direction of the Islamabad High Court,” a government official said.
RUSSIA
This week’s USD 75 million injection into classifieds advertising site Avito ru is further proof of the investment attractiveness of Russian startups, which are a key element in the government’s push for diversifying the country’s energy-dependent economy. But while innovative ventures are offering big opportunities, they are desperate for investors who are able to give not just cash but experience as well. “It’s not a problem to find entrepreneurs or good honest people,” said Esther Dyson, an investor in the country’s number one search engine Yandex, where she also serves as non-executive director.Banks are reporting a sharp increase in ATM skimming, a fraud in which perpetrators steal information from bank cards to make fake cards. A total of 362 cases of skimming have been registered in the first three months of this year, compared to just 40 cases in the same period last year and 397 cases for all of 2011, Kommersant reported Friday, citing data from the Russian Europay Members’ Association. The data on ATM fraud are based on information obtained from the association’s 20 largest banks, which account for about 90 per cent of all ATMs in Russia. In the scam, the perpetrator typically puts a device over an ATM’s card slot that reads the magnetic strip as the unsuspecting user passes his card through it. Often a small camera is inconspicuously attached to the ATM that allows the fraudster to record the pin number.
THAILAND
Thailand and Japan have agreed to boost bilateral trade to USD 100 billion by 2017, thanks to closer trade and investment
cooperation under the Japan-Thailand Economic Partnership Agreement. Commerce Minister Boonsong Teriyaphirom said two-way trade between Thailand and Japan as well as Asean and Japan should grow strongly thanks to the free-trade pact, while Japanese investors have vowed to continue investment in Thailand despite last year’s floods. To boost trade growth to achieve the target, both sides have agreed to promote connectivity among Asean members and Japan. They will help the growth of small and medium-sized
enterprises as well as promote an economic bloc in the Asia region.Leading property firm Pruksa Real Estate has restructured its business from a functional system to a cross-function system to reduce business losses and speed up the business process to maintain sustainable growth following disruption from floods last year, CEO Thongma Vijitpongpun told The Nation in an interview early this week. The company also will focus on re-branding its corporate and product branding with quality and design to match customer demand. “When home-buyers think about a Pruksa residence, it will be like buying a Toyota or Honda that has functionality and reasonable price,” he said.
USA
Stocks fell on Thursday as economic data sent mixed signals on the recovery a day before the April payrolls report, while shares of Green Mountain plunged after poor results. Slower-than-expected growth in the dominant US services sector drove the day’s trading. The retail sector dragged the market lower after several chains, including Target Corp and Gap Inc fell after missing April sales
estimates. Market expectations for Friday’s non-farm payrolls report have fallen this week. Traders now suspect the economy added 125,000 to 150,000 jobs in April, below a Reuters consensus forecast of 170,000. One trader said there had even been some talk of
a number below 100,000. The second largest US public pension fund said on Thursday it had sued current and former executives and board members at Wal-Mart Stores Inc, alleging bribery and a cover-up in the company’s expansion in Mexico. The USD 153 billion California State Teachers’ Retirement System, which holds more than 5.3 million shares of Wal-Mart Stores Inc, said in a statement that it had filed the derivative lawsuit in Delaware on behalf of the company. The lawsuit is based on a story that appeared last month in the New York Times that reported Wal-Mart de Mexico, which is 69 per cent owned by Wal-Mart, orchestrated a widespread bribery campaign to win market dominance. The article alleged senior Wal-Mart executives knew about the matter and tried to cover it up.
Yahoo Inc’s board of directors will review a discrepancy in the educational record of its Chief Executive, Scott Thompson, a spokesman told Reuters, after activist hedge fund Third Point accused Thompson of padding his academic credentials. Yahoo will also make an appropriate disclosure to shareholders when the review is complete, the spokesman said. On Thursday, Third Point’s founder and Chief Executive, Dan Loeb, wrote in a letter to Yahoo’s board that Thompson claims to hold a bachelor’s degree in
accounting and computer science from Stonehill College near Boston, but said Thompson ‘embellished his academic credentials’ because the CEO’s degree is in accounting only.
