Kingfisher Scraps 40 Flights as Workers Protest Wage Non-Payment

By Pratik Parija - Jul 14, 2012

Kingfisher Airlines Ltd. (KAIR) canceled about 40 flights after some employees refused to work as they haven’t been paid, prompting Indian billionaire Chairman Vijay Mallya to say they may hamper efforts to revive the carrier.
“Damaging the future of Kingfisher in the public eyes is not going to produce cash,” Mallya said in a letter to employees posted on the company’s website today. “This only makes my recapitalization efforts more difficult by causing concern and apprehension among our potential investors.”
More than 75 percent of employees received their salaries on the “committed” date of July 13, Kingfisher said in a statement today. The company said it has assured staff the rest will get paid on July 16. The airline is operating 20 planes after reducing services to about 120 a day, compared with 66 aircraft and about 340 daily flights in March 2011.
Kingfisher’s market share in April dropped to the lowest among India’s six airline operators from second in October as it ended a discount service and grounded planes following more than 10 quarters of losses.
Kingfisher may post a loss of as much as 14 billion rupees ($254 million) this fiscal year and needs about $1 billion of funds, CAPA Centre for Aviation, an industry consultant, said in May. The airline has pledged its brand, office furniture and other assets against 64.2 billion rupees of debt, Junior Finance Minister Namo Narain Meena said in parliament in New Delhi on Dec. 9.
“We worked hard to gain the trust and confidence of our guests,” Mallya said. “Today, by forcibly canceling several flights we have lost most of that.”
To contact the reporter on this story: Pratik Parija in New Delhi at pparija@bloomberg.net
To contact the editor responsible for this story: Paul Tighe at ptighe@bloomberg.net;

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Indian Rupee Climbs as Trade Deficit Narrows to 15-Month Low By Tushar Dhara - Jul 13, 2012

Indian exports fell for the third time in four months in June, while a trade deficit that has pressured the rupee was the narrowest in more than a year as imports slid, government figures showed. The currency rose.

Merchandise shipments fell 5.45 percent from a year earlier to $25.06 billion, Director General of Foreign Trade Anup Pujari said at a briefing in New Delhi today. Imports slipped 13.46 percent to $35.3 billion, leaving a trade deficit of $10.3 billion, he said. The data are provisional.

India’s overseas sales of items such as engineering goods and cars have struggled this year as Europe’s debt crisis, slower Chinese growth and elevated unemployment in the U.S. crimp demand for Asian products. The rupee is down 19 percent against the dollar in the past 12 months, after being pressured by a trade shortfall that swelled to a record last fiscal year.

“Exports will stay weak till at least October,” said Sujan Hajra, chief economist at Anand Rathi Financial Services Ltd. in Mumbai. “But, on the other hand, the shrinking trade deficit is great news for the rupee,” which will appreciate to 54 per dollar by end-October and 48 by March 2013, Hajra said.

The rupee strengthened 1 percent to 55.3650 as of 3:42 p.m. in Mumbai. The benchmark BSE India Sensitive Index of stocks was little changed.

Narrower Deficit

The contraction in imports was the largest since 2009, while the trade deficit was the smallest since March 2011, based on historical data the government released on April 19, official monthly trade statements and today’s release.

The trade gap in the fiscal year that started April 1 may shrink from the level in 2011-2012, Pujari said. The deficit in the 12 months ended March was an unprecedented $184.9 billion. Exports are likely to pick up in a couple of months, Commerce Secretary S.R. Rao said at the same briefing.

Slowing economic growth, budget and trade shortfalls and uncertainty over tax changes have added pressure on Prime Minister Manmohan Singh’s government to overhaul policies and support the expansion in Asia’s third-largest economy.

India doubled the import tax on gold bars and coins and platinum to 4 percent from April to try and pare the trade imbalance, and last month said it will prolong a policy of providing subsidized credit for some exporters through the current fiscal year.

The Reserve Bank of India left interest rates unchanged in June after a cut in April, and has signaled price pressures may limit scope to join nations from China to South Korea in easing monetary policy this month.

Indian inflation probably accelerated to 7.61 percent in June from 7.55 percent in May, according to the median estimate in a Bloomberg News survey ahead of a report next week.

To contact the reporter on this story: Tushar Dhara in New Delhi at tdhara1@bloomberg.net

To contact the editor responsible for this story: Stephanie Phang at sphang@bloomberg.net.

Tata Consultancy Rises After Profit Exceeds Estimate

By Ketaki Gokhale - Jul 13, 2012

Tata Consultancy Services Ltd. (TCS), India’s largest software exporter, rose the most in more than two months after profit beat estimates and the company reiterated its sales will expand faster than industry average.

The shares rose as much as 4 percent to 1,285 rupees and changed hands up 1.9 percent as of 9:54 a.m. in Mumbai. Tata’s closest rival Infosys Ltd. (INFO), which yesterday cut its sales forecast for the year ending in March, slumped for a second day.

Chief Executive Officer Natarajan Chandrasekaran said Tata has a “pretty healthy” pipeline of deals after reporting a 38 percent increase in first-quarter net income. Accenture Plc (ACN) also reported profits that exceeded estimates as customers outsource more work, a trend that prompted researcher Gartner Inc. (IT) to raise its growth forecast for global information technology spending earlier this month.

“TCS has been getting a lot of market share from its customers’ vendor consolidation exercises,” said Ankita Somani, an analyst at Angel Broking Ltd. in Mumbai. “It is benefiting from a push in emerging economies, like Latin America.”

Profit in the three months ended in June totaled 32.8 billion rupees ($590 million), beating the estimate for 31.8 billion rupees. Revenue was 148.7 billion rupees, compared with the 146.6 billion-rupee median of 46 analyst estimates compiled by Bloomberg.

Order Outlook

“The deal pipeline is pretty healthy,” Chandrasekaran said in an interview with Bloomberg UTV today. “We also have a very disciplined approach in terms of what we can take on and what we can’t.”

Tata Consultancy will post sales growth higher than the forecast made by National Association for Software & Services Companies, Chandrasekaran said yesterday. The association has predicted industrywide revenue growth of as much as 14 percent in the year ending March 31.

The company won new contracts in the quarter from mobility, data, cloud computing and social media services, Chandrasekaran said at a press conference in Mumbai yesterday. The decline in the rupee helped the company mitigate the impact of wage increases, training and visa costs, he said.

The Indian rupee was Asia’s worst-performing currency against the dollar in the three months ended June, with an 8.6 percent depreciation over the period.

Tata Consultancy draws the majority of its revenue in dollars and euros from clients based in U.S. and Europe. A weakening in the rupee inflates the repatriated value of overseas sales.

“The unprecedented volatility among major currencies and the Indian rupee will continue to be a challenge in the short term,” Chief Financial Officer S. Mahalingam said in a statement. “We are taking the steps to mitigate any risks arising from this scenario.”

Infosys Lags Estimates

Infosys, India’s second-largest software exporter, cut its sales forecast yesterday after reporting first-quarter profit of 22.9 billion rupees, compared with the 24.2 billion-rupee median of 31 analysts’ estimates compiled by Bloomberg.

Sales in the year ending in March may rise to at least $7.34 billion, Infosys said in a statement yesterday, compared with an April forecast of $7.55 billion. The company sees “challenges” in the global economic situation and that’s “resulting in slower IT spends by large corporations,” Chief Executive Officer S.D. Shibulal said in the statement.

Shares of Infosys fell 0.4 percent to 2,254.75 rupees as of 9:54 a.m. in Mumbai.

Tata Consultancy, which provides computer services and back-office support to clients including Citigroup Inc. (C) and Singapore Airlines Ltd. (SIA), added 29 clients during the quarter.

The company derived 53.3 percent of its revenue from companies in North America, 15.2 percent from the U.K., and 10.1 percent from continental Europe last year, according to its last annual report.

Tata Consultancy added a net 4,962 employees during the quarter for a total of 243,545, according to the statement. Workers left the company at a rate of 12 percent in the quarter ended June 30, down from 14.8 percent a year earlier.

To contact the reporter on this story: Ketaki Gokhale in Mumbai at kgokhale@bloomberg.net

To contact the editor responsible for this story: Anand Krishnamoorthy at anandk@bloomberg.net

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Cooking-Oil Imports by India Fall as Rupee Drop Deter Buyers

By Swansy Afonso - Jul 11, 2012

Cooking-oil purchases by India, the world’s biggest consumer after China, probably dropped for the first time in five months in June after a plunge in the rupee to a record low deterred importers.

Shipments slid to 850,000 metric tons last month from 862,550 tons a year earlier, according to the median estimate in a Bloomberg survey of five processors and brokers. Imports of crude and refined palm oil declined 16 percent to 600,000 tons from 712,356 tons, the survey showed. The Solvent Extractors’ Association of India will publish shipment data next week.

Palm oil, used in candy and fuel, has slumped 17 percent from a 13-month high in April on concerns that a slowdown in China and the European debt crisis may curb demand. Lower Indian imports may boost inventories in Malaysia, second-largest palm oil supplier, as production enters the peak period. The rupee sank to a low of 57.3275 to a dollar on June 22, raising the cost of commodities priced in the U.S. currency.

“The rupee depreciation made imports expensive and kept importers away,” said Sandeep Bajoria, chief executive officer of Mumbai-based brokerage Sunvin Group. “Buyers were also holding back purchases to take advantage of the lower Indonesian export tax in July.”

Indonesia cut the tax rate for exports of crude palm oil in July to 15 percent, a level last seen in January, from 19.5 percent in June, Deddy Saleh, director general of foreign trade at the Trade Ministry, said June 25. The base price to calculate the levy was cut to $944 a ton from $1,098, he said.

Monsoon Delay

Palm oil for September-delivery fell as much as 2.3 percent to 3,011 ringgit ($946) a ton, the biggest loss for the most- active contract since June 14, and was at 3,015 ringgit at 8:25 a.m. in Mumbai. Futures rose to a 13-month high of 3,628 ringgit on the Malaysia Derivatives Exchange on April 10.

A surge in imports in the past four months lifted cooking- oil inventories including those at Indian ports to a record 1.7 million tons last month, according to the extractor’s association. Stockpiles may be about 1.6 million tons as of July 1, Sunvin’s Bajoria said.

Purchases will increase in the next four months as the worst start to the monsoon in three years delays soybean and peanut sowing, he said. Imports will be between 800,000 tons and 900,000 tons a month until October, Bajoria said.

The area under oilseeds dropped to 2.65 million hectares (6.5 million acres) as of July 6 from 3.73 million hectares a year earlier, according to the farm ministry. Soybean planting was 26 percent lower at 1.89 million hectares, it said.

Dwindling Supplies

Imports in the seven months through May jumped 32 percent to 5.61 million tons, according to the extractors’ association. India bought 8.7 million tons in 2010-2011. Purchases will climb to 9.7 million tons this year as local supplies are set to decline to 6.65 million tons from 7.25 million tons, GG Patel & Nikhil’s managing partner Govindlal G. Patel, who has traded edible oils for more than three decades, said last month.

Crude soybean-oil imports probably surged to 125,000 tons in June from 50,616 tons a year earlier, while sunflower-oil purchases may have risen to 110,000 tons from 50,560 tons, the Bloomberg survey showed.

Palm oil comprises almost 80 percent of India’s cooking-oil imports. The nation buys palm from Indonesia and Malaysia, and soybean oil from Brazil and Argentina.

To contact the reporter on this story: Swansy Afonso in Mumbai at safonso2@bloomberg.net

To contact the editor responsible for this story: James Poole at jpoole4@bloomberg.net

®2012 BLOOMBERG L.P. ALL RIGHTS RESERVED.

Iran's Ballistic Missiles Improving, Pentagon Finds By Tony Capaccio - Jul 10, 2012

Iran’s military continues to improve the accuracy and killing power of its long- and short-range ballistic missiles, including designing a weapon to target vessels, according to a Pentagon report to Congress.

“Iran has boosted the lethality and effectiveness of existing systems by improving accuracy and developing new submunition payloads” that extend the destructive power over a wider area than a solid warhead, according to the June 29 report signed by U.S. Defense Secretary Leon Panetta.

The improvements are in tandem with regular ballistic- missile training that “continues throughout the country” and the addition of “new ships and submarines,” the report found.

The report obtained by Bloomberg News was provided to the four congressional defense committees last week to comply with a fiscal 2010 directive to provide an annual classified and unclassified assessment of Iran’s military power. The unclassified version provides the latest snapshot of Iran’s so- called asymmetric capabilities designed to counter the strengths of western militaries.

The report summarizes what’s been said publicly about the status of Iran’s nuclear program and its aid to Syria, Lebanese Hezbollah, Hamas, and Iraqi Shiite groups. It repeats the long- standing U.S. assessment that Iran with “sufficient foreign assistance may be technically capable of flight-testing” an intercontinental ballistic missile by 2015.

Two analysts who follow Iranian military developments said the report provides new details and emphasis on the nation’s conventional ballistic missiles.

Accuracy Improvements

“There was a theme that Iran is improving the accuracy and lethality of its missiles,” said Congressional Research Service Iran analyst Kenneth Katzman. “U.S. government reports have previously always downplayed the accuracy and effectiveness of Iran’s missile forces.”

“The report seemed pretty sober and respectful of Iran’s capabilities, crediting Iran with improving survivability,” Katzman said.

The Pentagon report was delivered as a European Union embargo on buying Iranian crude took effect on July 1, adding to a series of trade and financial sanctions the U.S., EU and United Nations imposed on the second-biggest producer in the Organization of the Petroleum Exporting Countries in an effort to pressure the Persian Gulf nation over its nuclear activities.

‘Formidable Force’

Iran “would present a formidable force while defending Iranian territory,” the Pentagon said in the report. “We assess with high confidence” that over 30 years Iran “has methodically cultivated a network of sponsored terrorist surrogates capable of targeting U.S. and Israeli interests,” it said. “We suspect this activity continues.”

Iran also continues to develop ballistic missiles with range to reach regional adversaries, Israel and Eastern Europe, including an extended-range Shahab-3 and a 2,000 kilometer (1,240 mile) medium-range ballistic missile, said the report.

Citing the Iranian threat, the Obama administration shifted from the Bush administration’s plans to place missile-defense sites in Poland and radar in the Czech Republic to an approach that would in four phases place closer to Iran some Aegis-class Navy missile defense vessels, ground radar and eventually land- based Navy Standard Missile-3 interceptors.

Lockheed Martin Corp. (LMT), and Raytheon Co. (RTN) are among beneficiaries of the envisioned systems.

Missile Emphasis

The report appears to confirm Iran has actively deployed a new solid-fuel intermediate-range ballistic missile and that the Shahab-3 has improved accuracy and submunitions, said Anthony Cordesman of the Center for Strategic and International Studies in Washington.

The report also disclosed that Iran is seeking to improve its missile counter-measures against U.S. and Gulf Cooperation Council missile defenses and poses a potential new threat to Gulf shipping, said Cordesman, who this week is publishing CSIS updates to his reports on Iran and the Gulf military balance.

Iran, like China, is “developing and claims to have deployed short-range ballistic missiles with seekers that enable the missile to identify and maneuver toward ships during flight,” the report found.

“This technology also may be capable of striking land- based targets,” the Pentagon said.

Katzman said the language about Iran possessing a “formidable force defending Iranian territory” seemed to be a “signal to advocates of military action against Iran, suggesting any action on Iranian soil will carry risk.”

The Pentagon highlighted three early 2012 war exercises by the Islamic Revolutionary Guard Corps ground resistance forces “meant to show offensive and defensive capabilities.”

The maneuvers “were the first significant exercises” conducted by this branch of the Iranian military since 2008, the Pentagon said.

To contact the reporter on this story: Tony Capaccio in Washington at acapaccio@bloomberg.net

To contact the editor responsible for this story: John Walcott at jwalcott9@bloomberg.net

HSBC Account Holders Offered India Amnesty, Official Says By Anto Antony and George Smith Alexander - Jul 9, 2012

India has offered amnesty to more than 100 wealthy citizens who evaded taxes by hiding funds in accounts at HSBC Holdings Plc (HSBA)’s Swiss unit, according to a government official with knowledge of the matter.

The income tax department has agreed not to start criminal proceedings or levy a penalty if the Indians repatriate the money from Geneva and pay the taxes, the official said, asking not to be identified because the information is confidential. The official declined to name anyone on the list.

India joins countries including the U.K. and the U.S. in cracking down on rich people who haven’t disclosed offshore funds amid probes into money laundering and tax evasion. A British millionaire was convicted this month for hiding money in HSBC’s Swiss bank in the first case to come before a London court based on data that the U.K. obtained from France in 2010.

The amnesty offer in India is being made to some people who were on a list of 700 citizens with HSBC accounts in Geneva that was given to the South Asian nation’s government by French authorities last year, the official said, without providing additional details. The government is still investigating other people on that list, the person said.

‘Pragmatic Approach’

“It’s a pragmatic approach,” said R.K. Gupta, managing director at Taurus Asset Management Ltd., which manages $1 billion in assets. Bringing back money that hasn’t been accounted for is now a “global phenomenon,” he said.

The Central Board of Direct Taxes, which includes the income tax department, was asked to probe whether the 700 account holders had evaded taxes, India’s Sunday Express newspaper reported on Aug. 7, citing finance ministry officials that it didn’t identify. The names of HSBC clients won’t be disclosed until the income tax department begins prosecuting them, the Economic Times reported on Nov. 22, citing Finance Secretary R.S. Gujral.

Anuja Sarangi, a spokeswoman at the Central Board of Direct Taxes in New Delhi, didn’t return three calls to her mobile phone or respond to three e-mails seeking comment yesterday. Laxman Das, chairman of the CBDT, also didn’t respond to an e- mail. Rajesh Joshi, an HSBC spokesman in Mumbai, declined to comment.

“As a general principle, we do not comment on whether individuals are our clients or provide the number of clients of a particular nationality,” Medard Schoenmaeckers, a Zurich- based spokesman for HSBC’s private bank, said by phone.

Stolen Data

France obtained data on accounts held at HSBC in Geneva after a bank employee, Herve Falciani, stole information connected to at least 24,000 current and former clients, the London-based lender said in March 2010. Authorities in countries including Italy and the U.K. have since begun investigating whether those clients included people who were evading taxes or involved in money laundering.

At the time of the data theft more than five years ago by Falciani, HSBC’s Swiss private bank had no more than 1,500 clients in any one country, a Geneva-based official who declined to be named in line with company policy, said in May.

In the U.S., a Wisconsin neurosurgeon was re-indicted in September by a U.S. grand jury on new charges that he failed to declare an HSBC account in India valued in 2009 at $8.7 million. The U.S. crackdown on offshore tax evasion includes criminal tax charges filed by prosecutors against more than three dozen former U.S. clients of UBS AG (UBSN) and Credit Suisse Group AG (CSGN), Switzerland’s two biggest banks.

‘Black Economy’

India loses 14 trillion rupees ($250 billion) from tax evasion every year, depriving it of funds for investment in roads, ports and power, Arun Kumar, author of “The Black Economy in India,” said in July 2011. Based on those estimates, a successful crackdown could more than double the nation’s tax revenue, which collected about 9.3 trillion rupees for the year ended March 31, according to the most recent budget proposal.

Prime Minister Manmohan Singh began trying to reform the nation’s post-independence tax and regulatory code when he was finance minister in 1991, accelerating tax cuts and reducing the bureaucracy to make the tax system more effective. The top individual income tax rate is now 30 percent, down from 97.5 percent in 1971.

The Supreme Court in July 2011 also ordered a team headed by a judge to take over the government’s efforts to retrieve as much as $500 billion that Indians may have stashed illegally overseas, citing in a 53-page ruling a case where records were found of assets being held by a Swiss bank in Zurich.

Secrecy Protection

HSBC’s Swiss private bank in September 2008 asked clients and independent money managers to surrender their rights to banking secrecy protection. In countries including India, where rules demand investor disclosure, HSBC sought permission to hand over the names of clients that want to keep their overseas investments, the bank said in a letter e-mailed to Bloomberg News in July 2009.

India is also proposing a clampdown on tax avoidance from April 2013 onwards if foreign institutional investors route money to the country through tax shelters. The draft guidelines released by the finance ministry in New Delhi on June 28 will become law after discussions and approval from Prime Minister Manmohan Singh, the government had said.

The value of illicit Indian assets held abroad was about $462 billion, or 72 percent of the nation’s underground economy, according to a November 2010 report from Global Financial Integrity, a Washington-based research firm that focuses on the cross-border flow of illegal money. India has lost $213 billion in tax collection due to such flows from 1948 to 2008, it said.

The research firm’s estimates for illicit outflows from India, while being useful, “are incomplete and further studies are required,” India’s then-Finance Minister Pranab Mukherjee said in a report titled “White Paper on Black Money” in May.

To contact the reporters on this story: Anto Antony in Mumbai at aantony1@bloomberg.net; George Smith Alexander in Mumbai at galexander11@bloomberg.net

To contact the editors responsible for this story: Chitra Somayaji at csomayaji@bloomberg.net; Philip Lagerkranser at lagerkranser@bloomberg.net

China Must Prevent Rebound in Property Prices, Wen Says By Bloomberg News - Jul 8, 2012

Chinese Premier Wen Jiabao said downward pressure on the economy is still “relatively large” and the government will intensify fine-tuning of policies even as measures taken since April are helping stabilize a slowdown.

Wen’s comments, four days after the central bank announced the second interest-rate cut in a month, were made during an inspection tour of eastern Jiangsu province, the official Xinhua News Agency reported yesterday. The premier also pledged to “unswervingly” continue property controls and prevent prices from rebounding, Xinhua said.

Asia’s largest economy probably grew at the slowest pace in three years in the second quarter, underscoring the risks to a global recovery already threatened by a worsening crisis in the euro area and faltering employment gains in the U.S. The International Monetary Fund next week will cut its world-growth estimate this year, with Managing Director Christine Lagarde warning the outlook has “regrettably become more worrisome.”

“The big downside risks to economic growth increase the pressure for monetary easing,” economists Peng Wensheng and Zhao Yang from Beijing-based China International Capital Corp. said in a July 6 note. “Based on the recent developments in the global economy, we believe major central banks will take more conventional and unconventional measures in coming months to loosen monetary conditions and encourage bank lending.”

China’s inflation probably slowed to 2.3 percent in June, the lowest since January 2010, according to an analyst survey ahead of a government report due today at 9:30 a.m. in Beijing.

Reversing Slowdown

The People’s Bank of China also last week allowed banks to offer bigger discounts on loans, stepping up efforts to reverse a slowdown in the world’s second-biggest economy. The moves coincided with the European Central Bank’s decision to reduce borrowing costs to a record low and the Bank of England’s expansion of asset purchases.

China’s benchmark stock index fell for a third week on concern the government isn’t doing enough to stem an economic slowdown that will hurt company earnings. The Shanghai Composite Index rose 1 percent on July 6 after the PBOC announcement, paring the week’s decline to 0.1 percent.

The pace of China’s growth is “within the expected target zone set at the beginning of the year,” Xinhua reported Wen as saying during his tour from July 6 to July 8.

“In April this year we announced we would put stabilizing growth in a more prominent position and we intensified efforts to preemptively fine-tune policies,” Wen said. “Currently these measures have already seen some results and the economic slowdown has stabilized.”

Proactive Policy

The premier in March set a goal of 7.5 percent expansion for 2012, down from an 8 percent target in place since 2005.

Growth may have slid to 7.7 percent in the second quarter from a year earlier, according to the median estimate of 33 analysts in a Bloomberg News survey as of July 6. The data are due on July 13. The economy expanded 8.1 percent in the first three months, the fifth quarterly slowdown.

The government will “continue to intensify preemptive fine-tuning and implement a proactive fiscal policy, especially with a focus on improving the structural tax reduction policy,” Wen said, according to Xinhua. Authorities will “continue to implement a prudent monetary policy and effectively solve the structural contradiction between the supply of and demand for credit,” he said.

Even as Wen pledged to support growth, he reiterated that property controls will continue. Restricting speculative demand and investment in property must be made a long-term policy, Xinhua said in its reports of the premier’s visit.

Price Rebound

“We must unswervingly continue to implement all manner of controls in the property market to allow prices to return to reasonable levels,” Wen was quoted as saying when he met residents and local government officials in charge of affordable housing on July 7. “We cannot allow prices to rebound, or all our efforts will come to naught,” he said.

Market expectations about property prices are changing and citizens are worried prices will rise again, he said. Signals in the market are “chaotic” and misleading and speculative information must be stopped, Wen said, according to Xinhua.

Local governments that introduced or covered up a loosening of curbs on residential real-estate must be stopped, he said.

China’s new-home prices rose for the first time in 10 months in June, according to SouFun Holdings Ltd. (SFUN), owner of the nation’s biggest real-estate website.

‘Arduous’ Task

“As long as there are no new curbs to come and it’s only the implementation of existing policies, home prices will still rise,” Du Jinsong, a Hong Kong-based property analyst at Credit Suisse Group AG, said by telephone on July 7.

Property controls are still in a “critical period” and the task remains “arduous,” Xinhua reported Wen as saying in its July 7 report.

The government must “promote the study and implementation of changes to the property-tax mechanism, and to speed up the establishment of a comprehensive long-term mechanism and policy framework for controlling the property market,” Xinhua cited Wen as saying.

To contact Bloomberg News staff for this story: Chua Baizhen in Beijing at bchua14@bloomberg.net; Henry Sanderson in Beijing at hsanderson@bloomberg.net.

To contact the editor responsible for this story: Paul Tighe at ptighe@bloomberg.net