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ONG KONG: Asian markets trod water on Monday with traders anxiously awaiting a crucial US


business The Manila Times TUESDAY August 10, 2010


Asian markets anxious ahead of Fed meet H


Federal Reserve meeting and Japanese stocks suffering under the pressure of a stronger yen.


A poor set of US jobs data on Fri-


day weighed on sentiment as they raised fears of a double-dip reces- sion in the world’s biggest economy. Japan’s Nikkei slid 0.72 percent, or 69.63 points, to end at 9,572.49, while the Topix index of leading companies dropped 0.41 percent, or 3.55 points, to 857.62. Japanese exporters have grown increasingly anxious about the yen, which has strengthened be- yond predicted levels because of investors seeking a haven from dollar and euro volatility.


The dollar fetched 85.46 yen in


Tokyo afternoon trade, down from 85.51 yen in New York on Friday, while the euro changed hands at 113.49 yen, down from 113.53 yen. The euro was worth $1.3279, against 1.3280 in New York. Among exporters Honda lost 1.64 percent and Nikon 0.57 per- cent. Pioneer dived 5.99 percent as first-quarter results disap- pointed, while Bridgestone rose 1.01 percent on firm January to June earnings.


Japanese finance minister Yoshi-


Beijing orders shutdown of polluting factories


BEIJING: The Chinese government has ordered over 2,000 firms in high- polluting and energy-intensive in- dustries to shut down outdated plants in its latest efforts to cut pol- lution and restructure the economy. A total of 2,087 firms that pro- duce steel, coal, cement, aluminum, glass and other materials have to close their old and obsolete facili- ties by the end of September, the Ministry of Industry and Informa- tion Technology said.


Companies that fail to do so risk


having bank loans frozen, approv- als for new projects and land dry up, and their electricity cut, the ministry said in a statement on its website Sunday. “Accelerating the elimination of


backward production facilities is an important move to change the eco- nomic growth pattern, restructure the economy and to improve qual- ity and efficiency of growth,” it said. China said last week its average energy consumption per unit of gross domestic product (GDP) had risen marginally in the six months to June—the first year-on-year in-


BP’s oil-spill costs reach billions


LONDON: British energy giant British Petroleum (BP) said on Monday that it had spent $6.1 billion so far to meet costs from the massive oil spill in the Gulf of Mexico, days after plug- ging the damaged well with concrete. “The cost of the response to date amounts to approximately $6.1 bil- lion (4.6 billion euros), including the cost of the spill response, con- tainment, relief well drilling, static kill and cementing, grants to the Gulf states, claims paid, and federal costs,” BP said in a statement.


An estimated 4.9 million barrels, more than 205 million gallons, spewed from BP’s ruptured well in the 87 days from the beginning of the disaster until the leak was finally capped on July 15, the US govern- ment has said. The company revealed on Thurs-


day that it had finished pumping ce- ment into the damaged well after a five-hour operation. “The MC252 well has been shut- in since July 15; there is currently no oil flowing into the Gulf,” the group said on Monday. It added: “Following the comple- tion of cementing operations on the MC252 well on August 5, pressure testing was performed which indi- cated there is an effective cement plug in the casing. BP believes the static kill and cementing procedures have been successful.”


crease since 2006 — despite pledges to improve efficiency.


Energy consumption per unit of


GDP was up by 0.09 percent in the first half from a year earlier, making it more difficult for the nation to meet its goal of cutting energy con- sumption by 20 percent per unit of GDP between 2006 and 2010. The outdated facilities due for closure include some owned by China’s biggest steel maker by output, Hebei Iron and Steel Group, and China Aluminum Corp of China, the nation’s big- gest aluminum maker, according to the ministry. Rapid industrialization over the


last 30 years has left China, the world’s third-largest economy, with some of the world’s worst water and air pollution and has left wide- spread environmental damage. The International Energy Agency recently announced that China had surpassed the United States last year to become the world’s top energy consumer—a dubious distinction rejected by Beijing, which called the data “unreliable.”


hiko Noda said he would “closely monitor” the yen’s strength. All eyes are on Tuesday’s meet- ing of the US Federal Open Mar- ket Committee (FOMC) for signs of any monetary policy action to stimulate the economy. The Labor department said Friday the US economy had lost 131,000 jobs in July and the unemployment rate remained high at 9.5 percent. That sparked a sell-off on Wall Street, but markets later regained ground, with the Dow ending just 0.20 percent lower and up 1.8 per- cent for the week.


With autumn mid-term elections approaching, analysts say there will be intense pressure on the Obama administration to take action. “News over recent weeks high- lighting the subdued nature of the US recovery, alongside the ongoing downtrend in core inflation . . . has fanned a widespread view that the


Fed may be forced to do more in terms of easier policy, if not at this meeting then down the track,” said Rory Robertson, interest-rate strate- gist at Macquarie Bank. Sydney rose, however, with the S&P/ASX 200 ending the day up 0.63 percent, or 28.8 points, at 4,594.9, led by resource giants Rio Tinto and BHP Billiton, as well as AXA Asia Pacific, which was lifted by a revived offer for the insurer by National Australia Bank.


Agribusiness stocks such as Elders and Nufarm continued ris- ing in light of Russia’s grain ex- port ban and the wider drought in the former Soviet region. Elders was up 13.67 percent and Nufarm up 3.85 percent. Hong Kong ended up 0.57 percent, or 122.79 points, at 21,801.59, led by companies such as retail goods trader Li & Fung and the MTR Corp. ahead of their corporate results.


Shanghai picked up 0.53 percent, or 14.14 points at 2,672.53. Steel and cement stocks rose after the government said it had ordered 2,087 companies in 18 industries to shut down obsolete plants in order to increase efficiency—particularly of energy consumption.


“This is very good news for the steel and cement sectors, as it will foster the development of these in- dustries,” Chen Jinren at Huatai Se- curities told Dow Jones Newswires. But property stocks such as China


Vanke and Poly Real Estate fell after the Shanghai Securities News re- ported that some banks in Beijing and Shanghai had voluntarily stopped issuing mortgages for pur- chases of third homes. Oil prices edged up following a dip last week. New York’s main contract, light


sweet crude for September delivery, advanced 58 cents to $81.28 a barrel.


holiday.


TOKYO: Japan’s current account sur- plus shrank year-on-year in June, its second straight month of decline, with the income surplus lower de- spite a higher trade balance. The surplus in the current ac- count—the broadest measure of trade with the rest of the world— dropped 18.2 percent from a year earlier to 1.047 trillion yen ($16 billion) in June, the Ministry of Finance said. Analysts had expected a 1.5-per- cent increase to 1.299 trillion yen. The trade surplus in June jumped 26.6 percent to 769 billion yen on robust exports to Asia, but the sur- plus in the income account nearly halved to 462 billion yen, reflecting the poorer performance of Japanese overseas investments. In May the current account sur- plus came to 1.21 trillion yen ($14.1 billion), down 8.1 percent from a year earlier. Historically, Japan has had a large surplus in its current account, which measures the flow of goods, services and investment income, because of its exports of cars, elec- tronics and other goods.


AFP


The global recession hit Japanese exports hard, but demand has been recovering in recent months.


Brent North Sea crude for September rose 57 cents to $80.73 after falling for three straight days last week. Gold opened at $1,204 to $1,205 an ounce in Hong Kong, up from Fri- day’s close of $1,197.40 to $1,198.40. Seoul rose 0.36 percent, or 6.34


points, to 1,790.17 Taipei rose 0.89 percent, or 71.19


points, to 8,034.49, surpassing the psychological 8,000 mark for the first time since April 30.


EnTie Commercial Bank was 7.0 percent higher at 16.45 Taiwan dol- lars, while Ruentex Industries closed 5.42 percent up at 107.0. Wellington added 0.32 percent, or 9.87 points, to close at 3,054.50. Telecom rose 3.0 percent to 2.08 New Zealand dollars and clothing retailer Hallenstein Glasson added 3.4 percent to 3.95. But Fletcher Building shed 0.5 percent to 7.60. Singapore was closed for a AFP


Poor investments pull Japan current account surplus »Japan surplus


The six months to June saw the current account surplus soar 47.3 percent thanks to record exports backed by brisk auto shipments to Asia and the United States, the fi- nance ministry said. For the first half the current account surplus came to 8.5 trillion yen, up


from 5.8 trillion yen a year earlier. The trade surplus jumped to 4.1 trillion yen from 647 billion yen, with exports surging 39.6 percent to a record 31.4 trillion yen “as auto exports to the United States and Asia recovered,” the ministry said in a statement.


Wind turns to gold in remote Romanian region


COGEALAC, Romania: Strong winds sweeping southeastern Romania have long been seen as a curse but as electricity companies are increasingly turning to renewable energy, the area has become a coveted asset. Romania’s decision to open up its wind-power market has triggered fierce competition among investors, several of whom target the Dobroudja region, described by experts as one of the best sites in Europe. In June, Czech company CEZ started operating its first wind en- ergy unit in Romania, at Fan-tanele, 260 kilometers east of Bucharest. The 1.1-billion-euro ($1.45-bil- lion) energy farm, expected to be- come the biggest in Europe next year, will have a capacity of 600 Megawatts. But CEZ’s plans to expand to the neighboring village of Cogealac have been hampered by Spanish energy giant Iberdrola, which has set its mind on the same site. Iberdrola and its local partner Eolica Dobrogea have announced plans to build the world’s largest land- based wind-energy farm, with a capac- ity of 1,600 megawatts. Total invest- ment should top 2.2 billion euros. The rivalry between the two groups sparked a violent protest last week, when the mayor of Cogealac backed by several dozen followers, some of them carrying clubs, tried to drive the Czechs away from the village. Security guards fired rubber bul-


AFP


lets, with the protest leaving five people injured, while five others— including mayor Hristu Cati—were arrested for disturbing the peace as the project got caught up in allega- tions of corruption.


Australian bank takeover of AXA Asia Pacific still on


SYDNEY: National Australia Bank Mon- day kept its hopes of a multibillion dollar takeover of financial services firm AXA Asia Pacific alive with a plan to make divestments to remove com- petition concerns. France’s AXA SA and NAB agreed in March on the buyout of AXA Asia Pacific, under which the French side would take its subsidiary’s Asian arm while NAB would control its Austral- ian and New Zealand businesses.


But the Australian Competition and Consumer Commission (ACCC) blocked the $13.3 billion ($12.2 bil- lion) takeover by the country’s fourth largest bank the following month cit- ing competition concerns. The ACCC said it would reassess the situation if AXA Asia Pacific divested it- self of its specialized investment plat- form North to IOOF Holdings Limited. The ACCC said it expected to make its final decision in early September. AFP


Imports were worth a record 27.3 trillion yen, up 25.1 percent from a year earlier, due to a rise in crude oil prices.


The surplus in the income account fell 14.6 percent to 5.9 trillion yen because of a decline in income from Japanese subsidiaries.


Germany’s trade


surplus up


FRANKFURT: Germany reported on Monday another strong trade sur- plus, suggesting that second-quar- ter growth could be the strongest since reunification 20 years ago, an analyst said. The world’s second-biggest ex- porter after China said that provi- sional figures showed exports climbed to 86.5 billion euros (115 billion dollars) in June, their highest level since October 2008.


■ Picture taken on August 2, 2010 in Cogealac, 250 kms east from Bucharest, shows wind generators. Romania’s decision to open its wind-power market has triggered fierce competition among investors, several of whom target the Dobroudja region, described by experts as the second-best choice in Europe. AFP PHOTO


Prosecutors said Hristu Cati was ar- rested for paying villagers to take part in the protest against the wind farm. “Hristu . . . is making us lose a lot of money that CEZ would have invested at Cogealac,” said Doina, 53, a former local councilor who does not want her family name to be mentioned. In a region where people hardly make a living by tilling the arid land, the Czech investment was nothing short of a windfall—the company pays 3,000 euros a year as rent for every plot of land where it installs a wind turbine. Sitting at a table in Fantanele’s only


bar, a beer in front of him, Marin, a driver in his thirties, wishes he was one of the happy few. “Boy, why wasn’t I so lucky to have a wind turbine fall from the sky on my land? That would have pulled me out of poverty.”


CEZ spokesman Cosmina Marin said benefits for the local commu- nity go far beyond this. “We have re- paired the roads, installed running water and plan to build a sewage sys- tem and pay for a rubbish dump.” All in all, the company has in-


vested several hundred thousand euros in modernizing the infrastruc- ture of Fantanele, she said, adding that the same could be done at Cogealac if it were not for the may- or’s “nonsensical” attitude. “I don’t get him, there’s enough wind for everybody here.” But wind power does come with restraints, experts say. Limited grid access is one. For if Romania enjoys a privileged position on Europe’s wind map, with a potential estimated at 14,000


megawatts, the national grid can only take on 3,000 megawatts. Economy Minister Adriean Vi- deanu said recently the authorities have received requests for a total production of 23,000 megawatts, “far more than the system can take.” Companies such as Enel (Italy), EDP (Portugal) and Petrom-OMV (Austria) figure among the groups planning to invest. But electricity system operator


Transelectrica said that in the absence of major investments, the national grid cannot carry a much bigger load. “Things could otherwise be risky because wind energy is whimsical.” But for now at least, the market is


open—Romania harnessed just 14 megawatts of wind power in 2009.


AFP Cartoons top smart-phone content


SEOUL: Cartoons are more popular than news with South Korean smart phone users, especially during the tedious morning commute, accord- ing to a survey seen Monday. The cartoon application got an


average of 372,000 hits a day com- pared with 280,000 for news and 275,000 for weather, said the survey by LG U+ (formerly LG Telecom). The country’s third-largest mobile operator said the data came from an analysis of its 170,000 smart phone users in July.


Cartoon viewing nearly doubled


from 6 a.m. to 8 a.m. compared with other times of the day as more people “assuage boredom in subways and buses during the morning commute”, said the com- pany in a report.


The number of users viewing


the weather app spiked between 7 a.m. and 9 a.m. and 4 p.m. and 6 p.m. as people prepared for journeys to and from work. The popularity of an app to find restaurants and nightspots surged


from 4 to 6 p.m. as users planned after-hours hangouts before leaving the office.


Those accessing the app to view


Cyworld, a social networking site and the Korean equivalent of Facebook, spiked from 6 p.m. to 10 p.m. South Korea’s mobile phone market is one of the world’s most vibrant, with 45 million users in a population of 49 million. But smart phones have a relatively small share, implying huge growth potential.


AFP


Imports hit a new record of 72.4 billion euros meanwhile, an all-time peak since statistics were first com- piled in 1950, the Destatis statistics office added.


That meant the overall German trade surplus surged by 44 percent from May to 14.1 billion euros, in line with an average analyst forecast compiled by Dow Jones Newswires. For the first half of 2010, the trade surplus recorded by Europe’s biggest economy gained 26 percent from the same period a year earlier to 74.6 bil- lion euros.


The first six months of 2009 were marked by the country’s worst post- war recession, however. Since then, the value of goods sold has picked up markedly, in particular to Asia, which has or- dered impressive amounts of Ger- man machine tools, automobiles and chemicals. Germany’s current account of the balance of payments, a broader measure of all current payments into and out of the country, surged in June to 12.9 billion euros, from 1.8 billion the previous month, provisional figures released by the central bank showed.


“The current export dynamics are not a new status quo,” ING senior economist Carsten Brzeski noted. “They will eventually slow down.” But German manufacturers none- theless still have some well-padded order books and the industrial sec- tor’s contribution to second-quarter growth should be substantial. “This week’s release of second- quarter growth should be a cracker,” Brzeski said.


“The German economy is bound to see its strongest quarterly growth rate since reunification” in October 1990.


AFP AFP


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