USA
Romney dogged about personal taxes Questions about his personal taxes again dogged Republican Presidential Candidate Mitt Romney, his first day back on the US campaign trail after a rocky trip abroad. Romney promised to create 12 million jobs and ease the economic plight of middle-class Americans on a visit to swing-state Colorado, but he had to fend off an accusation by Senate Majority Leader Harry Reid that he may not have paid taxes for a decade long period. “The word’s out that he hasn’t paid any taxes for 10 years,” Reid said on the floor of the Senate. “Let him prove he has paid taxes because he hasn’t,” the Democrat said.
Congress takes five weeks offAfter a final day of partisan battles over drought relief and cyber security, members of Congress streamed out of the Capitol looking forward to five weeks of vacation and a fall fraught with decisions on the political and economic future of the country. Most lawmakers were headed home to make their party’s case for who should be entitled to tax cuts, how the government should avoid automatic cuts to defence and domestic programmes and who should be the next president. Many will drop by the Republican and Democratic presidential conventions at Tampa in Florida, and Charlotte at North Carolina, respectively. The last day, Thursday, saw lawmakers fall short in finding agreement on two pressing problems: how to help livestock producers suffering from the widespread drought and how to protect critical industries from cyber attacks launched by terrorists or other enemies.
WORLD
Frustrated Annan quits as Syria peace envoyFormer United Nations (UN) Secretary General, Kofi Annan, is quitting as international peace envoy for Syria, frustrated by finger-pointing at the UN while the armed rebellion against President, Bashar al-Assad, becomes increasingly bloody. As battles raged on Thursday in Syria’s second city, Aleppo, between rebel fighters and government forces using war planes and
artillery, UN Secretary General, Ban Ki-moon, announced in New York that Annan had said he would go at the end of the month. “Kofi Annan deserves our profound admiration for the selfless way in which he has put his formidable skills and prestige to this most
difficult and potentially thankless of assignments,” Ban said.
Israeli rhetoric not seen leading to Iran war yetFor all its recent tough talk, Israel looks highly unlikely to launch an attack against Iran ahead of US presidential elections in November, hoping that Washington will ultimately do the heavy lifting. Israeli Prime Minister
Benjamin Netanyahu delivered a blunt, public message to US Secretary of Defence Leon Panetta that time was running out to
tackle Iran and that US policies to curtail its nuclear programme had so far failed. An uptick of Israeli rhetoric this summer has fuelled speculation that Netanyahu is poised to follow through on a long-standing threat to attack Iran and destroy nuclear sites that many believe are geared towards creating an atomic bomb. Iran says its nuclear programme is peaceful and it would retaliate if attacked.
AUSTRALIA
Australian miner BHP Billiton has announced write downs in shale gas and nickel assets totalling USD 3.3 billion. Chief Executive Marius Kloppers and Head of Petroleum Mike Yeager will forgo their bonuses for 2012, the company said in a statement. It wrote down USD 2.84 billion on the value of the US Fayetteville shale gas assets it bought in 2011, and USD 450 million on the value of Australian nickel assets. The company bought its Fayetteville and Petrohawk shale gas businesses for USD 17 billion last year. Shale gas prices have plunged by about half since then. Shale gas is extracted by tapping gas from shale rock using a process called hydraulic fracturing, or fracking.
First it was Titanic II then rumours of cloning dinosaurs, now mining Mogul Clive Palmer has plans for a casino with hovercraft and airport. Palmer has unveiled plans for a multibillion dollar casino complex, which include an international airport and hovercraft port, at his Coolum Palmer Resort on the Sunshine Coast, north of Brisbane. A trademark for the name Coolum Casino and the domain name www.coolumcasino.com.au were registered in March leading to speculation the billionaire was planning a casino. The ambitious plans unveiled include a casino, as well as a hovercraft station, an international airport, a convention centre and a water park to name a few.
BANGLADESH
A cabinet panel has approved purchase of petroleum products worth USD 1.5 billion for the July to December period of this
year, officials said. The state-run Bangladesh Petroleum Corporation (BPC) will purchase 1.356 million tonnes of diesel, 0.19 million tonnes of jet oil, 40,000 tonnes of kerosene and 64,000 tonnes of octane for the period, Nurul Karim, additional secretary of the
cabinet division said after a meeting of the cabinet committee on public purchases, chaired by Finance Minister AMA Muhith at the secretariat in the capital. Karim said the estimated demand for the period is: diesel 1.695 million tonnes, kerosene 0.187 million tonnes, jet oil 0.185 million tonnes and octane at 57,000 tonnes.
Apparel factory owners should pay the apparel workers salary and Eid allowance before the 20th Ramadan to avoid any unrest in the sector, said different garment workers’ associations. At separate programmes, the leaders of the organisations made the demand so that the workers can spend Eid vacation with their families. Besides, Bangladesh Garment Workers Unity Council submitted a memorandum to the chairman of Minimum Wages Board demanding, among others, reformation of the wage board for garment workers. Meanwhile, a team from Bangladesh Knitwear Manufacturers and Exporters Association met with Deputy Governor of Bangladesh Bank, SK Sur
Chowdhury, for the assurance of package money for the association before Eid-ul-Fitr.
CHINA
China’s central bank pledged to guarantee steady expansion in money supply and credit to cushion the world’s second-largest economy against stiff global headwinds.
Chinese top leaders pledged to step up policy fine-tuning in the second half of 2012 to bolster an economy that saw its slowest pace of growth in more than three years in the second quarter. “China will use multiple monetary policy tools to guide stable and
appropriate growth in credit and money supply and maintain the reasonable scale of social financing aggregate,” the People’s Bank of China said in its second-quarter monetary policy implementation report.
“China will make monetary policy more forward-looking, targeted and flexible while continuing to pre-emptively adjust and fine-tune policy when appropriate,” it said in the report published on the bank’s website.China’s securities regulator stepped up efforts to restore confidence in the country’s sagging equities markets, making another round of cuts to transaction fees and encouraging companies to buy back their own stock. The China Securities Regulatory Commission (CSRC) said that it will cut transaction fees applied to stocks and futures trades, the third in a series of similar cuts since April. The statement said combined savings from the three rounds of cuts would total 15.5 billion yuan (USD 2.43 billion) in trading fees this year. The regulator is also actively working with other ministries to possibly lower stamp duty, state radio cited the CSRC as saying at a news conference.
China scrapped stamp duty for stock buyers in September 2008, but left the charge unchanged at 0.1 per cent for sellers.China could retaliate over a European anti-dumping complaint filed against Chinese solar companies, officials from a Chinese industry body said in a protracted row over cheaper Chinese solar modules. Western solar companies have been at odds with their Chinese counterparts for years,
alleging they receive lavish credit lines to offer modules at cheaper prices, while European players struggle to refinance. Jobs and profits would be lost if the European Commission ruled in favour of a complaint made by European solar firms, led by Germany’s SolarWorld, Sun Guangbin, secretary general of the China Chamber of Commerce for the Import and Export of Machinery and Electronic Products, told a news conference.
EUROPE
European markets have fallen after the European Central Bank (ECB) President Mario Draghi said the bank would come up with ways to assist struggling Euro Zone countries over the coming weeks. Analysts had been hoping for more details and
immediate action. Help from the ECB would also only be given if the governments themselves made certain commitments, he said. The Spanish and Italian stock markets fell about five per cent and both countries’
borrowing costs rose sharply. At a news conference at the ECB’s headquarters in Frankfurt, Draghi said the crisis was worsening and the bank was ready to help countries facing high borrowing costs by buying their debts at lower rates than on the open markets.
The Bank of England decided it was too soon to step up efforts to bolster Britain’s recession-hit economy, although future action looks increasingly likely as growth shows little sign of rebounding after a dismal few months. Britain’s economy tipped into its second
recession in four years at the end of 2011, and a multi-year austerity programme to close the country’s vast budget deficit is weighing both on consumer morale and government’s popularity. The bank restarted its asset purchase programme, which aims to lower big companies’ capital costs, last month. Wednesday marked the start of a joint scheme with the finance ministry to reduce the cost of bank loans for home-buyers and businesses.
The European Commission welcomed an agreement reached by the Greek government on new structural reforms and called for their determined implementation. “The 10 priorities for structural reform announced today by the minister of development are a clear sign of the commitment of the Greek government to bring about the much-needed reform of the Greek economy. This is welcome,” the Commission said in a statement. “The pursuit of these priorities will make an important contribution to the broader reforms to which Greece is committed within and which are needed to boost growth and employment,” the European Union’s executive arm said.
INDIA
With lenders continuing to offer special deals only to new home loan customers, the industry is set to see a churn in the port-folio as this is the only way a large number of existing borrowers will be able to take advantage of lower rates. SBI’s move has changed the equilibrium that loan rates had settled down to after the April rate cut by the Reserve Bank of India. While other lenders realise that SBI rates are the most competitive, they are still undecided about reducing their benchmark rates. SBI’s existing borrowers can take advantage of the new rates only after paying a conversion fee, which is one per cent of the outstanding loan. Officials in other banks say that rates for existing borrowers cannot be brought down without revising their benchmark base rate or prime lending rates (for housing finance companies), which are pegged to the overall cost of funds.
Private bank, Yes Bank, said it has raised around IRs 11.81 million through a dual currency syndicated loan facility from foreign markets. The facility has a maturity of one year and will be used for general corporate purposes and trade finance, the city-based private lender said in a statement. The bank had entered the market with an intention to raise USD 140 million euro and 32 million euro, but increased the amount to USD 155 million euro and 50 million euro following over-subscription, it added. It has received commitments from 14 banks from nine
countries, the statement said.
JAPAN
Japan Airlines (JAL) said on Friday it expected to raise about USD 8.5 billion in an initial public offering next month, nearly doubling the investment of a state-backed fund that injected capital into the carrier following its bankruptcy in 2010. The IPO is
set to be the world’s second-largest this year after the USD 16 billion offering of social networking pioneer Facebook. The Tokyo Stock Exchange gave the green light for a relisting of JAL stock on September 19, less than three years after the former national
flag carrier collapsed under the weight of a bloated cost base and USD 25 billion in debt.
In a regulatory filing, the airline gave an estimated price per share of 3,790 yen.
Nomura Holdings will be ordered to bolster internal controls by Japan’s financial regulator, four people with knowledge of the matter said, the lightest possible sanction for its role in three insider trading cases. Such an order requires Nomura to take various
measures to bolster compliance, but does not directly impact its business. The relatively light sanction moves Japan’s largest brokerage closer toward a resolution of a costly scandal that triggered the resignations of Chief Executive Kenichi Watanabe and his top Lieutenant Takumi Shibata recently.
Japan’s Mitsui and Co has agreed to extend by one month a loan commitment to Codelco to fund the possible purchase of a stake in Anglo American Plc’s Chilean copper properties, which are the subject of a legal dispute, a source familiar with the deal said. The agreement keeps Mitsui, Japan’s second-biggest trading house, in a strong position to take a small stake in Anglo’s prized Anglo American Sur copper asset in south-central Chile once a bitter row between Anglo America and Codelco, which also involves Japan’s top two trading houses, is settled.
Mitsui earlier committed to provide a loan of up to USD 6.75 billion until August 1 and has extended the period to September 1.
MALAYSIA
The Tun Razak Exchange is a game changer that will provide a new economic structure to Malaysia’s economic landscape in the eyes of the world, says Minister in the Prime Minister’s Department, Tan Sri Nor Mohamed Yakcop. The exchange, Kuala Lumpur’s new
financial district, launched by Prime Minister Datuk Seri Najib Tun Razak on Monday, can also be regarded as an iconic project that would generate investments from within and foreign. “The ambitious project will help realise our cherished vision to emerge as a
developed nation in 2020. An advanced nation must have a service sector that is not only hi-tech, but also offer services with a high added value,” he told Bernama after breaking fast with the Malaysian National News Agency’s staff.
Acknowledgement letters issued by Bank Negara to scheduled institutions have allegedly been misused to solicit investments from the public in financial schemes involving gold and other precious metals. In a statement, the public had been advised to exercise due caution when dealing with companies or individuals that use such acknowledgement letters purportedly issued by Bank Negara. It had received enquiries regarding companies which represented themselves as scheduled institutions with the central bank. Under the Banking and Financial Institutions Act 1989, a company that conducts either leasing, factoring, development finance or building credit activities only obtains a written acknowledgement from the central bank.
PAKISTAN
More than a dozen banks have challenged the show-cause notice issued by the Competition Commission of Pakistan for
overcharging customers using Automated Teller Machines (ATMs) in the Sindh High Court. The petitioners, including National Bank, Allied Bank, Al-Falah, Askari, Soneri, NIB, Standard Chartered, Faysal and Al-Habib, among others, have also questioned the
Competition Commission of Pakistan Act 2010. The Competition Commission of Pakistan had taken notice of different private banks overcharging their clients for using 1Link ATM facilities. Instead of a uniform fee of 15 Pakistani rupees, the banks were charging between 15 to 50 Pakistani rupees.
As the national budget deficit touches a new high, the centre is considering placing a binding on provinces to retire State Bank of Pakistan’s loans every quarter with an aim to ensure financial discipline at all tiers of the government. The move to have an institutional framework came after the four provinces recorded a cumulative deficit of roughly 37 billion Pakistani rupees during the recently ended fiscal year 2011-12 instead of saving 124 billion Pakistani rupees, said sources at the Ministry of Finance.
RUSSIA
Russia should be raising excise taxes on alcohol at a faster rate than currently planned, said Deputy Prime Minister, Arkady Dvorkovich. Russia has recently started to tighten regulation of alcohol sales to curb drinking, with measures already taken, including excise tax hikes, an increase of a minimum vodka price, and a ban of advert-ising in all media, including internet. “In my personal opinion, excise taxes on all alcoholic beverages — beer and everything containing alcohol — should grow more than it is currently envisaged in the budget,” Dvorkovich told reporters after a government meeting. He added that the final decision should be discussed with all the parties involved, without providing any details.
Prime Minister Dmitry Medvedev appointed his deputy, Arkady Dvorkovich, to oversee the creation of tax and customs incentives
for oil companies developing hydrocarbon reserves in the Arctic, in a measure aimed at increasing economic feasibility and attracting more private investors to resource potentially rich maritime territories. A working group of government officials and heads of companies developing Russia’s offshore fields will have three months to draft a set of economic measures to increase investment in exploration projects, as Russia lags behind its foreign peers in the race for developing underwater reserves in the Arctic.
Thailand
A set of guidelines for spouses to separate their annual personal income tax filing will be completed within this year, said
Director General of Revenue Department, Satit Rungkasiri. Currently, married women are required by law to include their personal income in the same tax-filing form as their husbands. However, the Constitution Court has ruled that this article under tax law does not comply with the constitution. According to Section 30 of the constitution, men and women have equal rights and should be
treated fairly. The tax law allows the woman or wife to file her personal income separately but this only applies to her extra income such as from rent, dividends or part-time jobs. For her fixed income or salary, she needs to file it in her husband’s tax form. The criteria behind this decision was that the wife’s salary is considered family income and only the husband can declare it.
The export data for Thailand turned south in June, killing any hope for an export revival in the first half of 2012. The US dollar value of overseas shipments in June contracted by 4.2 per cent from a year earlier, and if we exclude non-value adding gold trade, the contraction worsened to 5.5 per cent. Many economists had been hoping that May’s upside surprise of 9.1 per cent export growth would be a sign of an export revival. And some officials continue to express optimism about the second half of the year, hoping for record-breaking growth rates in the fourth quarter (totally meaningless given the very low post-flood base of a year earlier) to bring full-year growth back up above 10 per cent.
USA
Bank of America Corp is in talks with Fannie Mae to resolve a dispute over bad mortgages that the government-controlled entity wants the number two US bank to buy back, sources familiar with the matter said on Thursday. The two sides have been in
discussions for some time, but the talks have become more constructive recently, the sources said, although they cautioned that a resolution is not imminent. The issues are billions of dollars of mortgages that Bank of America and its Countrywide Financial
subsidiary sold to Fannie Mae from 2004 to 2008, during the US housing boom. As the loans go bad, Fannie wants Bank of America to buy them back. Bank of America has balked at buying back some of the loans.
Business software maker SAP agreed to pay rival Oracle Corp USD 306 million in damages over copyright infringement allegations against a SAP unit, avoiding a new trial. The proposed agreement requires court approval, and would clear the way for Oracle to ask the ninth US Circuit Court of Appeals to restore a USD 1.3 billion jury award in this case, according to a joint filing with a federal court in Oakland, California on Thursday. The companies agreed to the USD 306 million to save the time and expense of this new trial, and to expedite the resolution of the appeal lawyers for Oracle and SAP said in the filing. A Northern California jury determined in 2010 that Oracle should be paid USD 1.3 billion over accusations SAP subsidiary.
San Bernardino, the third California city to seek bankruptcy protection since June, is saddled with huge pension debt and will
produce details of those unfunded obligations within 15 days, its mayor said on Thursday. The city filed for bankruptcy protection
on Wednesday, citing over USD one billion in estimated liabilities and up to 25,000 creditors, many of whom are the city’s own employees. The city, 65 miles east of Los Angeles, also listed estimated assets as over USD one billion. Patrick J Morris, San Bernardino’s mayor, said in a telephone interview that the bulk of the city’s debt was due to unfunded liabilities related to pension and benefits for the city’s employees, and obligations to employee groups in labour contracts.
