USA
Special US military unit hunts Mexico border drug flightsA highly specialised US military task force is using battlefield technology to help federal police hunt elusive drug traffickers slipping over the Mexico border in hard-to-detect ultralight aircraft, officials said on Thursday. Joint Task Force North, a cadre of highly specialised Marines, soldiers, sailors and airmen, is using the military’s cutting edge radar and optical technologies to help the US Border Patrol nab the drug flights in southern Arizona and New Mexico. Wily traffickers attach bundles of up to a few hundred pounds of marijuana to the small, lightweight aircraft, which are difficult to spot and often fly in areas not covered by the Federal Aviation Administration, officials said. We take great pride in being able to say, ‘We own the night,’ Taskforce Spokesman Armando Carrasco told a news conference near Douglas. New York cuts pension benefits for public workersNew York state lawmakers approved pension reform that will save an estimated USD 80 billion over 30 years, largely by reducing benefits for newly hired state and local public workers, which union officials Thursday blasted as an attack on the middle class. Governor Andrew Cuomo praised the bill enacted by the legislature with several others starting late Wednesday as key to maintaining the state’s fiscal health. The bill also provides a safeguard for municipalities that will protect them from any financial burden if the state increases their pension benefits. Spiraling pension obligations are one of the top financial problems faced by state and local governments across the United States.
WORLD
Karzai asks NATO to leave Afghan villages; Taliban scrap talksAfghanistan’s President Hamid Karzai called for NATO troops to leave Afghan villages and confine themselves to major bases after the slaughter of 16 civilians by a US soldier, underscoring fury over the massacre and clouding US exit plans. In a near-simultaneous announcement, the Afghan Taliban said it was suspending nascent peace talks with the United States seen as a strong chance to end the country’s decade-long conflict, blaming “shaky, erratic and vague” US statements. Karzai, in a statement after meeting US
Defense Secretary Leon Panetta in Kabul, said as a consequence of the weekend massacre, “international security forces have to be taken out of Afghan village outposts and return to (larger) bases”.
Iran’s banks to be blocked from global banking system Swift, the body that handles global banking transactions, says it will cut Iran’s banks out of the system on Saturday to enforce sanctions. The move will isolate Iran financially by making it almost impossible for money to flow in and out of the country via official banking channels. It will hit its oil industry, but may also have a heavy impact on Iranians who live abroad and send money home. The move follows EU sanctions against Iran over its nuclear programme. The US and its allies accuse Iran of developing nuclear weapons — a charge it denies. Iran last week agreed to hold talks with six major world powers over its nuclear programme, although no date or venue has been set.
AUSTRALIA
Shares closed flat on Friday as weak miners offset gains in banking, but the bourse
finished the week firmly in the black. The benchmark S&P/ASX 200 shed 1.6 points to close at 4276.20, while the index gained 1.5 per cent for the week. The Australian dollar was recently trading at USD 1.0537, from USD 1.0462 late yesterday and at 87.8565 yen
from Y88.0105. The lackluster equities session followed gains for US stocks overnight as investors welcomed strong jobs and manufacturing reports, which helped lift the S&P 500 index past 1400 for the first time in nearly four years.First-home buyers on modest incomes should probably rule out Point Piper when choosing a suburb to start their Australian dream. The Sydney eastern suburbs neighbourhood was the priciest in Australia in 2011 with a median house price of USD 5,210,000, property analysts’ figures show. Point Piper’s median price was almost USD one million higher than the next-highest listed suburb, Sydney’s Tamarama, RP Data research shows. Seven of the top 10 most expensive suburbs in Australia last year were in Sydney, with two
in Melbourne and one in Perth.
The retail sector is facing a growing crisis which will dwarf the problems
experienced in the manufacturing sector, the National Retail Association warns. Gary Black, association executive director, said retail was tipped to shed 33,000 jobs over the next few years because of competition from overseas online outlets. “The jobs crisis unfolding in retail dwarfs the predicament and dilemmas that are confronted by the demise of the Australian manufacturing sector,” he told ABC television.
BANGLADESH
The government will recognise 87 businesspeople as commercially important persons (CIP) for their outstanding performance in business, especially exports, officials said. The commerce ministry will award the CIP status to the business-people for the year 2010, they added.
Commerce Minister GM Quader will hand over the CIP cards at a program at Sonargaon Hotel in the capital Dhaka on Tuesday. Of the CIP card recipients, 51 will be awarded in the export category that will include 15 sectors, and 36 from trade bodies in the ex-officio category. Kuwait Fund for Arab Economic Development will provide USD 48 million to finance the Lebukhali bridge project over Paira River in Bangladesh. A loan agreement to this effect was signed between Kuwait Fund and the Bangladesh government in the capital Dhaka on Tuesday. Kazi Shafiqul Azam, additional secretary of Economic Relations Division of Finance Ministry and Hesham Al-Waqyan, deputy director-general of Kuwait Fund for Economic Development signed the agreement on behalf of their respective sides. Kuwait Ambassador to Bangladesh Ali Ahmad Ebraheem Al-Dafiri was present at the signing ceremony, a press statement said.
CHINA
China’s fifth-biggest lender Bank of Communications, known as BoCom, is raising money to meet new, tougher capital requirements. BoCom is raising 56.6 billion yuan by selling shares to 12 institutional investors, including HSBC, which already owns 19 per cent of BoCom. BoCom previously had the lowest capital ratio of China’s five biggest banks. It is expected to be the start of a series of fundraising announcements from Chinese banks this year. Other institutional investors putting money into the issue include China’s Ministry of Finance, the national pension fund and two tobacco companies: Shanghai Haiyan and Yunnan Hongta.
Premier Wen Jiabao said on Wednesday that the 7.5 per cent GDP growth target for 2012 cannot be viewed as low. Wen said that the slower growth fits targets set in the 12th Five-Year Plan (2011-15). It can help shift focus on accelerating the transformation of economic development pattern, as well as making growth less polluting and less dependent on natural resources. 7.5 per cent growth rate ‘not low’. “We will make every effort to let ordinary people enjoy more benefits,” Wen told a news conference after the conclusion of the annual session of the National People’s Congress, China’s top legislature.
The country remains an attractive proposition for business leaders. About 30 per cent of global CEOs rank China as their top growth market this year. That’s because there is no sign of a pickup in the Euro Zone and the US economies, PricewaterhouseCoopers LLP said in a report on Thursday. “The Chinese economy may be slowing down, but the China story remains attractive and critical to global CEOs’ growth strategies,” said David Wu, PwC China Lead Partner for Beijing.
EUROPE
Britain is poised to cooperate with the United States on a release of strategic oil stocks that is expected within months, two British sources said, in a bid to prevent fuel prices choking economic growth in a US election year. A formal request from the United States to the UK to join forces in a release of oil from government-controlled reserves is expected ‘shortly’ following a meeting on Wednesday in Washington between President Barack Obama and Prime Minister David Cameron, who discussed the issue, one source said. Britain would respond positively, the two sources said, and Cameron said a release was worth considering.
France’s poll-leading Socialist presidential candidate Francois Hollande said on Thursday that budget-cutting targets should not be set in stone and he would bend them in favour of growth. Hollande, who has been shown mostly ahead of rival President Nicolas Sarkozy in pre-election polls, has promised to balance French finances by 2017 if he wins the April-May contest. “I will make the savings that are needed, but at the same time I will not sacrifice the interests of our country,”
Hollande said on French television. The
Socialist leader’s deficit targets are based on forecasts of 1.7 per cent growth in 2013, two per cent in 2014 and between 2 and 2.5
per cent from 2015 to 2017, figures which
economists have said are overly optimistic. The UK has hit back at Argentina’s threats of court action over Falkland Islands oil
exploration, calling its behaviour ‘illegal intimidation’. Foreign Minister Hector Timmerman had threatened legal action against firms drilling off the UK territory, over which Argentina claims sovereignty. But the UK
Foreign Office said it was a legitimate commercial venture. Prime Minister David Cameron said Britain would “continue to
protect and defend” the islands. In threatening legal action against oil prospectors,
Timmerman had told reporters: “The gas and oil that is found in the South Atlantic belongs to the Argentinian people.”All these companies are entering illegal territory.”
INDIA
India’s Finance Minister Pranab Mukherjee has unveiled the country’s annual Budget, saying that the economy is turning around. He also said India would look to cut its subsidy spending and push ahead with sales of state-owned companies. There have been concerns that India would struggle to meet many of its earlier spending promises. During the last three months of 2011, India’s economy grew at its slowest pace in the three years. Growth was 6.1 per cent in the fiscal third quarter, though on Friday Mukherjee explained that it was only a temporary slowdown.
Boeing has denied claims by the Indian government that it had agreed to pay compensation to Air India for delays to aircraft deliveries. Prashant Sukul of the Ministry of Civil Aviation had claimed that “two weeks back they agreed to pay” USD 500 million. The carrier has been seeking compensation for delays in the delivery of planes it ordered in 2005,
including 27 Boeing 787s. Deliveries of the 787 Dreamliner have been delayed for three years. However, Boeing said it had not agreed any such deal. “We don’t comment on deals that we’ve done. But I can tell you we’re not writing anybody a cheque for USD 500 million,” said Jim Albaugh, chief executive of Boeing.
India’s central bank has left interest rates unchanged, saying that inflation remains a risk despite a slowdown in the economy. The Reserve Bank of India (RBI) left its key rate
unchanged at 8.5 per cent. The decision came a day after data showed that consumer prices in India rose by 6.95 per cent in February from a year earlier. India’s growth has slowed
recently and the RBI hinted that it may cut rates soon to boost growth. “Recent growth-inflation dynamics have prompted the
Reserve Bank to indicate that no further
tightening is required and that future actions will be towards lowering the rates,” the bank said in a statement.
JAPAN
Asian shares edged higher on Friday while the dollar took a breather as its recent broad rally spurred some profit taking, with a fresh batch of encouraging US economic data further underpinning investor sentiment.
The MSCI Asia Pacific ex-Japan index MIAPJ0000PUS was up 0.1 per cent, for a weekly gain of nearly one per cent. The index has risen 13.7 per cent so far this year,
recovering three-quarters of an 18 per cent loss posted last year. Japan’s Nikkei N225 steadied and held near an 8-month high reached on Thursday. The benchmark is up nearly 20 per cent this year, reclaiming all of last year’s 17 per cent drop.
Sharp Corp named the head of its global operations as president to turn around a company facing a record annual loss, the latest Japanese firm to shake up management after tumbling into the red on slumping TV sales. Takashi Okuda, 58, a company veteran of over 30 years, immediately pledged to revamp the company after he takes the helm on April 1. He will replace Mikio Katayama, who becomes chairman. “I will take responsibility for that turnaround in tandem with the new president,” Katayama told a news conference.
The head of Japan’s cheap chic clothing chain Uniqlo has his eyes set firmly on Asia as he readies Friday to open the
company’s biggest store in Tokyo’s upmarket Ginza area. “Ginza is the best place in Japan, and more so it is the best place in Asia,” said Uniqlo Chief Executive Tadashi Yanai on Thursday ahead of the opening of a mega store on the district’s glitzy ‘Chuo Dori’ high street. “Opening a flagship store here is the first step to expand the business from here to the whole of Asia,” he said. “This is Japan’s largest gateway to the global market.”
MALAYSIA
Share prices on Bursa Malaysia closed broadly lower on cautious trading on Thursday, amid concerns over the extent of China’s economic slowdown, dealers said. The benchmark FTSE Bursa Malaysia Kuala Lumpur Composite Index (FBM KLCI),
however, rose 3.67 points to close at 1,579.38, reflecting investors’ appetite towards high-price blue chip stocks, which were more defensive. The market barometer moved between 1,574.59 and 1,579.54. A dealer said the local market is likely to remain in consolidation mode in the near-term, given the limited investor participation during the school holidays as most market players remained on the sidelines.
Inflation pressures are expected to rise once the new minimum wage policy comes into effect, says Standard Chartered Bank. A
minimum wage can lead to an increase in supply costs (overall wage levels) for businesses, which are passed on to consumers. It can also lead to higher wage levels for both minimum wage workers and others, which increase demand for goods and lead to higher inflation expectations. The government’s plan to implement a minimum wage, suggested at 800 to 900 ringgit per month, and may also be imminent. “Given that a considerable 34 per cent of the workforce earns less than 700 ringgit per month, implementing a minimum wage would add to inflation expectations,” it said in a note yesterday.
Bank Negara Malaysia said slightly less than half of the applicants for My First Home Scheme were unsuccessful in obtaining loans under the scheme as they failed to meet the eligibility criteria. These applicants amounted to 505, or 47.5 per cent, of the total applications of 1,062 as at the end of January, said the central bank in a statement yesterday. The participating banks received a total of 1,624 applications as of January, but 562 were subsequently withdrawn due to multiple applications to various banking institutions.
PAKISTAN
The Supreme Court reserved on Thursday its judgment on a case relating to corruption in Pakistan Steel Mills, which had suffered a whopping loss of 26.5 billion Pakistani ruppes in 2008-09 alone. Although a three-judge bench comprising Chief Justice Iftikhar Mohammad Chaudhry, Justice Khilji Arif Hussain and Justice Tariq Parvez closed the case, Tuesday’s proceedings seemed to suggest that the court in its final verdict might refer to the National Accountability Bureau all evidence relating to malpractices for penalising the delinquents. A nine-judge bench, headed by Chief Justice Iftikhar Chaudhry, had in August 2006 reversed the sale of Steel Mills, saying that the privatisation process had been carried out in ‘indecent haste’.
Borrowing for budgetary support is reaching close to a trillion, which is almost half of the entire revenue target set for the fiscal year 2011-12. The State Bank reported on Wednesday that the government borrowed 916 billion Pakistani rupees for the budgetary support till March 2 since July 1, reflecting weakness of the fiscal position of the government. The government has set a revenue collection target of 1, 952 billion Pakistani rupees for FY-12.
RUSSIA
Prime Minister Vladimir Putin on Thursday announced a change in the May national holiday schedule that could shatter plans to hold a large opposition rally around the day of his inauguration as president. He ordered an extended break for the Victory Day holiday,
a development that gives malcontents a tempting option to spend that time out of town, catching some fresh air. A large turnout would encourage anti-Putin sentiment and increase pressure for an earnest crackdown on corruption and greater democracy.
Credit-rating agency Standard and Poor’s (S&P) said Thursday that the government’s approach to banks under its control was ‘conflicted’ as state-owned Sberbank appeared likely to go ahead with a flagship USD 5.5 billion privatisation in April. The share price of the country’s biggest lender has recently broken through the 100 ruble threshold set by bank President German Gref and Central Bank Deputy Chairman Alexei Ulyukayev as a precondition for the sale. S&P, said there was a contradiction between
the privatisation plans for Russia’s state-owned financial institutions and pressure for growth. Later this year, the government is likely to sell a stake in VTB, the country’s second-largest bank. VTB has openly said it needs to raise capital.
THAILAND
Bank of Thailand Governor Prasarn Trairatvorakul attributed recent spikes in goods prices partially to inflation expectation, amid the upward trend in oil prices following geopolitical tension the Middle East. To keep inflation in check, the central bank will
undertake periodic surveys on inflation expectation of business operators and consumers, to see what they expect in the next three, six and nine months. Prasarn noted that on anticipation of higher inflation, operators would raise product prices while consumers would start hoarding.
Lack of progress in tax policy coordination between Thailand and other Asean members could lead to disputes and tax-payers could end up being victims, tax experts said. Tax disputes are already happening as different parties interpret domestic tax laws differently. In some cases, it leads to taxpayers suffering from double taxation imposed by Asean governments, Prapas Kong-ied, a judge at the Central Tax Court, said yesterday. Many tax disputes have happened and in some cases recently, the Supreme Court had to issue a ruling, Prapas said at the Asia-Pacific tax forum hosted by the Fiscal Policy Office.
About 42 companies from various industries have lodged a complaint with the Central Administrative Court over an official order requiring employers to raise their daily minimum wages. The move is a last ditch attempt by 42 Thai and Japanese firms to block the big pay hike, which they believe the government has pushed for without any appropriate reason. Their petition may affect more than 5.4 million workers who are hoping to get the higher pay from next month, according to Labour Ministry Permanent Secretary Somkiat Chayasriwong. “They have claimed the order issued by the Central Wage Committee [CWC] is illegal,” Somkiat said, in his capacity as the CWC chairman. “But I have already explained to the court that we have taken all relevant factors into account.”
USA
The Goldman Sachs resignation letter heard around the world has increased pressure on US regulators to quickly put in place a tough version of the Volcker rule that forces Wall Street to stop betting aggressively for its own bottom line. Greg Smith became an overnight sensation when the Goldman banker published a withering resignation letter in the New York Times on Wednesday. Smith described his former employer as a toxic Wall Street factory that only thinks about making money, mocking clients by referring to them as ‘muppets.’ For reform advocates, the editorial showed that Wall Street failed to learn its lesson after risky trades brought global markets to their knees in 2008.
The Securities and Exchange Commission (SEC) on Thursday released a new economic analysis that will be used to justify a critical final rule that will determine which companies will face new regulations of their derivatives trading. Opponents of new regulations have been successful in overturning SEC rules by challenging the quality of supporting economic analysis and by complaining interested parties were given insufficient time to comment. The 41pages analysis of the credit-default swap market comes as the SEC and Commodity Futures Trading Commission are still struggling to agree on joint final rules that will define who will be designated as a ‘swap dealer’ and ‘major swap participant.’
Economic growth showed signs of becoming more self-sustaining as the number of Americans claiming new jobless benefits fell back to a four-year low last week and manufacturing activity in the Northeast picked up this month.