Jan. 23 (Bloomberg) -- Japanese stocks dropped, deepening the longest weekly losing streak in more than three months, as Sony Corp.’s loss forecast and worsening economic figures indicated the recession will be prolonged.
Sony, the world’s No. 2 maker of electronics, plunged 6.5 percent after projecting a loss almost four times greater than analyst estimates as sales of televisions and cameras sank. Office-equipment maker Ricoh Co. slumped 4.5 percent on a Nikkei newspaper report it may cut its profit target. JFE Holdings Inc., the No. 3 steelmaker globally, slid 5.8 percent as an economist survey showed China’s economic slowdown will deepen.
“The bad news about earnings and economies is accumulating,” Soichiro Monji, chief strategist at Tokyo-based Daiwa SB Investments Ltd., which manages the equivalent of $53 billion, said in an interview with Bloomberg Television. “Sony’s loss forecast was an order of magnitude greater than what some analysts had estimated.”
The Nikkei 225 Stock Average declined 211.23, or 2.6 percent, to 7,840.51 as of 10 a.m. in Tokyo, while the broader Topix index fell 13.73, or 1.7 percent, to 782.18. The Nikkei was poised for a 4.7 percent slump this week and the Topix slid 4.4 percent. Both gauges were set for third-straight weekly declines, the longest since the period ended Oct. 10.
The Nikkei tumbled by a record 42 percent last year as the world’s biggest economies slipped into recession, and the gauge has lost another 12 percent in 2009. The Bank of Japan yesterday said the nation’s economy will shrink 1.8 percent in the year to March 31 and 2 percent next fiscal year.
Fundamental Change
Sony yesterday joined Toyota Motor Corp. in forecasting an operating loss as the global recession worsened and a stronger yen reduced the value of repatriated overseas sales. Sony expects a record 260 billion yen ($2.9 billion) operating loss for the year to March 31. Analysts had estimated a loss of 70 billion yen.
The electronics maker “will need some time to fundamentally change the business model,” Koya Tabata, an analyst for Credit Suisse Group, wrote in a report dated yesterday. He maintained his “underperform” rating on the shares.
Sony dropped 6.5 percent to 1,813 yen, set for the lowest close since Dec. 24. Bigger rival Panasonic Corp. slid 4 percent to 1,072 yen, and Canon Inc., the world’s biggest digital-camera maker, dived 4.7 percent to 2,555 yen. Hitachi Maxell Ltd., a maker of audio and video tapes, plunged by its 100 yen limit to 780 yen after widening its annual loss estimate.
Deeper Slump
JFE retreated 5.8 percent to 2,200 yen, and Kobe Steel Ltd. slipped 3.5 percent to 137 yen. Nippon Steel Corp., the world’s second-largest maker of the alloy, lost 2.9 percent to 271 yen. A gauge of steelmakers posted the sharpest drop among 33 industry groups on the Topix.
China’s economic slowdown, already the deepest in seven years, is set to worsen, darkening the outlook for suppliers of raw materials. The nation’s gross domestic product will grow 6.3 percent this quarter from a year earlier, according to the median estimate of nine economists surveyed by Bloomberg News. The survey was conducted after yesterday’s report that China’s economy expanded 6.8 percent in the fourth quarter.
Ricoh, Japan’s No. 2 maker of office machines, slumped 4.5 percent to 1,081 yen. Falling sales of copiers and a stronger yen may push the company to cut its full-year profit forecast, the Nikkei newspaper said today.
Nikkei futures expiring in March retreated 2.5 percent to 7,830 in Osaka and slumped 2.4 percent to 7,830 in Singapore.
Thursday, January 22, 2009
Tuesday, January 20, 2009
Yen Falls as Gain in U.S. Stock Futures Spurs Demand for Yield Email | Print | A A A
Jan. 21 (Bloomberg) -- The yen fell, reversing a gain, on speculation an advance in U.S. stock futures will give investors more confidence to buy higher-yielding assets funded in the Japanese currency.
The yen snapped a two-day winning streak against the dollar after U.S. President Barack Obama called on Americans to take responsibility for rebuilding the economy. Japan’s currency also ended two days of gains versus the euro after a technical chart signaled its 9 percent advance this month was excessive.
“There’s talk that some investors are selling the yen for dollars and euros as they seem to perceive the dollar-yen and the euro-yen reached attractive buying levels,” said Toshihiko Sakai, head of trading for foreign exchange and financial products in Tokyo at Mitsubishi UFJ Trust & Banking Corp., a unit of Japan’s biggest bank. “The yen has also risen quite a bit so some players may be reducing long positions in the currency.” A long position is a bet an asset will gain.
The yen fell to 90.05 versus the dollar as of 11:27 a.m. in Tokyo from 89.76 late in New York yesterday. It earlier rose as high as 89.69. Japan’s currency dropped to 116.41 per euro from 115.85 late yesterday, after touching 115.30.
The yen snapped a two-day winning streak against the dollar after U.S. President Barack Obama called on Americans to take responsibility for rebuilding the economy. Japan’s currency also ended two days of gains versus the euro after a technical chart signaled its 9 percent advance this month was excessive.
“There’s talk that some investors are selling the yen for dollars and euros as they seem to perceive the dollar-yen and the euro-yen reached attractive buying levels,” said Toshihiko Sakai, head of trading for foreign exchange and financial products in Tokyo at Mitsubishi UFJ Trust & Banking Corp., a unit of Japan’s biggest bank. “The yen has also risen quite a bit so some players may be reducing long positions in the currency.” A long position is a bet an asset will gain.
The yen fell to 90.05 versus the dollar as of 11:27 a.m. in Tokyo from 89.76 late in New York yesterday. It earlier rose as high as 89.69. Japan’s currency dropped to 116.41 per euro from 115.85 late yesterday, after touching 115.30.
Indian Stocks Decline on Concern of Deepening Global Recession
Jan. 20 (Bloomberg) -- Indian stocks fell for the first time in three days after the U.K. widened a rescue plan for Royal Bank of Scotland Group Plc, sparking concerns that more lenders will need bailouts as the global recession deepens.
ICICI Bank Ltd., the nation’s second-largest bank, and HDFC Bank Ltd, the third-biggest, both declined the most in more than a month.
“RBS shook us up again,” said Shashank Khade, who helps manage $400 million at Kotak Securities Ltd. in Mumbai. “It shows that the rot is much deeper and the downside each bank faces has not been estimated properly.”
The Bombay Stock Exchange’s Sensitive Index, or Sensex, retreated 229.02, or 2.5 percent, to 9,100.55. The S&P CNX Nifty Index on the National Stock Exchange fell 1.7 percent to 2,796.60. The BSE 200 Index slid 2 percent to 1,087.29. Nifty futures for January delivery declined 2 percent to 2,777.
RBS forecast a loss of as much as 28 billion pounds ($40 billion) this year, the biggest in British history.
ICICI fell 4 percent to 396.30 rupees, the lowest since Dec. 8. Housing Development Finance dropped 3.9 percent to 1,485.80 rupees. HDFC Bank Ltd., the No. 3 lender, fell 3 percent to 912.45 rupees, the lowest since Dec. 8. State Bank of India, the largest, slid 2.9 percent to 1,112.90.
Overseas funds sold a net 5.63 billion rupees ($116 million) of Indian stocks on Jan. 16, according to the nation’s stock market regulator.
The following were among the most active shares traded on the Bombay and National stock exchanges. Stock symbols are in parentheses after company names:
Power companies: NTPC Ltd. (NATP IN) India’s biggest power generator, rose 7.55 rupees, or 4.2 percent, to 185.95. Tata Power Ltd. (TPWR IN) the second-biggest, added 8.5 rupees, or 1.1 percent, to 768.55. Reliance Infrastructure Ltd. (RELI IN), an electricity generator and distributor, gained 16.05 rupees, or 3 percent, to 551.40. Power Grid Corp. (PWGR IN), India’s biggest electricity transmission company, jumped 8.75 rupees, or 11 percent, to 87. Neyveli Lignite Corp. (NLC IN), a power producer, jumped 10.05 rupees, or 13 percent, to 87.05.
India plans to increase the rate of return on equity for power projects in a bid to attract investments. The rate of return on equity will be raised to 15.5 percent from 14 percent, India’s electricity regulator said in a statement in New Delhi today. For projects completed on schedule, the rate of return on equity will be 16 percent, the regulator said.
MindTree Consulting Ltd. (MTCL IN) dropped 22.20 rupees, or 9.3 percent, to 216.80, its lowest since listing in March 2007. The Indian computer-services provider set up by former Wipro Ltd. executives said group profit in the three months ended Dec. 31 dropped 56 percent to 87.2 million rupees.
Polaris Software Lab Ltd. (POL IN) surged 10 rupees, or 29 percent, to 44.35, the most since Jan. 2008. The Indian software- services provider to customers such as Citigroup Inc. said profit in the quarter ended Dec. 31 rose 94 percent to 371.7 million rupees.
Maytas Infra Ltd. (MAY IN) dropped 5.55 rupees, falling for an eighth day by its 5 percent daily limit, to 105.40. India ordered its fraud office to probe two companies owned by the founders of Satyam Computer Services Ltd. as they may be linked to the $1 billion fraud at the software maker.
The Indian software maker at the center of a fraud investigation for overstating earnings has a “nexus” with Maytas Properties Ltd. and Maytas Infra, Prem Chand Gupta, Company Affairs Minister, said yesterday.
Satyam rose 1.35 rupees, or 5.3 percent, to 26.85.
Tata Communications Ltd. (TCOM IN) slid 15.3 rupees, or 3.3 percent, to 449.55. The phone company controlled by India’s Tata Group has acquired the 30 percent stake in Neotel Ltd. previously owned by South Africa’s Transnet Ltd. and Eskom Holdings Ltd.
ICICI Bank Ltd., the nation’s second-largest bank, and HDFC Bank Ltd, the third-biggest, both declined the most in more than a month.
“RBS shook us up again,” said Shashank Khade, who helps manage $400 million at Kotak Securities Ltd. in Mumbai. “It shows that the rot is much deeper and the downside each bank faces has not been estimated properly.”
The Bombay Stock Exchange’s Sensitive Index, or Sensex, retreated 229.02, or 2.5 percent, to 9,100.55. The S&P CNX Nifty Index on the National Stock Exchange fell 1.7 percent to 2,796.60. The BSE 200 Index slid 2 percent to 1,087.29. Nifty futures for January delivery declined 2 percent to 2,777.
RBS forecast a loss of as much as 28 billion pounds ($40 billion) this year, the biggest in British history.
ICICI fell 4 percent to 396.30 rupees, the lowest since Dec. 8. Housing Development Finance dropped 3.9 percent to 1,485.80 rupees. HDFC Bank Ltd., the No. 3 lender, fell 3 percent to 912.45 rupees, the lowest since Dec. 8. State Bank of India, the largest, slid 2.9 percent to 1,112.90.
Overseas funds sold a net 5.63 billion rupees ($116 million) of Indian stocks on Jan. 16, according to the nation’s stock market regulator.
The following were among the most active shares traded on the Bombay and National stock exchanges. Stock symbols are in parentheses after company names:
Power companies: NTPC Ltd. (NATP IN) India’s biggest power generator, rose 7.55 rupees, or 4.2 percent, to 185.95. Tata Power Ltd. (TPWR IN) the second-biggest, added 8.5 rupees, or 1.1 percent, to 768.55. Reliance Infrastructure Ltd. (RELI IN), an electricity generator and distributor, gained 16.05 rupees, or 3 percent, to 551.40. Power Grid Corp. (PWGR IN), India’s biggest electricity transmission company, jumped 8.75 rupees, or 11 percent, to 87. Neyveli Lignite Corp. (NLC IN), a power producer, jumped 10.05 rupees, or 13 percent, to 87.05.
India plans to increase the rate of return on equity for power projects in a bid to attract investments. The rate of return on equity will be raised to 15.5 percent from 14 percent, India’s electricity regulator said in a statement in New Delhi today. For projects completed on schedule, the rate of return on equity will be 16 percent, the regulator said.
MindTree Consulting Ltd. (MTCL IN) dropped 22.20 rupees, or 9.3 percent, to 216.80, its lowest since listing in March 2007. The Indian computer-services provider set up by former Wipro Ltd. executives said group profit in the three months ended Dec. 31 dropped 56 percent to 87.2 million rupees.
Polaris Software Lab Ltd. (POL IN) surged 10 rupees, or 29 percent, to 44.35, the most since Jan. 2008. The Indian software- services provider to customers such as Citigroup Inc. said profit in the quarter ended Dec. 31 rose 94 percent to 371.7 million rupees.
Maytas Infra Ltd. (MAY IN) dropped 5.55 rupees, falling for an eighth day by its 5 percent daily limit, to 105.40. India ordered its fraud office to probe two companies owned by the founders of Satyam Computer Services Ltd. as they may be linked to the $1 billion fraud at the software maker.
The Indian software maker at the center of a fraud investigation for overstating earnings has a “nexus” with Maytas Properties Ltd. and Maytas Infra, Prem Chand Gupta, Company Affairs Minister, said yesterday.
Satyam rose 1.35 rupees, or 5.3 percent, to 26.85.
Tata Communications Ltd. (TCOM IN) slid 15.3 rupees, or 3.3 percent, to 449.55. The phone company controlled by India’s Tata Group has acquired the 30 percent stake in Neotel Ltd. previously owned by South Africa’s Transnet Ltd. and Eskom Holdings Ltd.
Tulsa Journal In McCain Country, Acceptance of Obama Grows
TULSA, Okla. — “I voted for John McCain and still would,” said Tim Driskill, in a flatly drawled declaration of certainty that still speaks for many in this place underwhelmed last November by the charms of Barack Obama, then the Democratic nominee for president.
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Brandi Simons for The New York Times
Billy Joe Daugherty, pastor at Victory Christian Center in Tulsa, Okla., led a prayer Sunday for the new president.
Not a single county in Oklahoma stirred from the orderly phalanx marching behind Mr. McCain, the senator from Arizona who was the Republican nominee, and Mr. Driskill, the owner of an insurance agency in downtown Tulsa, said he was proud to be in those ranks. Statewide, two out of three voters supported Mr. McCain, the highest percentage in the nation.
But that staunchly Republican, conservative Oklahoma is harder to find now. While there are countless Mr. Driskills here — and hardly anyone doubts that Mr. McCain would easily win again in a redo of the vote — there are also new fractures and fault lines as some voters have shifted toward accepting what the rest of the country wrought in giving Mr. Obama a lopsided victory.
In interviews in the week leading up to Mr. Obama’s inauguration, many people here said a tolerant spirit toward his presidency has been hastened, paradoxically, by some of the same groups that voted mostly Republican in the election. Those include active or former military personnel, and people who identify themselves as evangelical Christians, two groups with traditions of respecting hierarchical order and strong leadership.
“Oklahomans understand and respect the elections process,” said Chris Benge, a Republican from Tulsa who serves as speaker of the Oklahoma House. “Once the president has been determined, the vast majority of people are willing to get behind him.”
That does not mean, Mr. Benge said, that Mr. Obama has won Oklahomans over, but only that the campaign season has ended. Do not look for Mr. Benge at any inaugural parties. He said he would be watching what he could of the ceremonies on television in his office between meetings.
But some people have, in fact, changed their minds. Leonard Nelson, 63, a 23-year veteran of both the Army and the Navy, said he had voted for Mr. McCain mainly through military fealty, believing that Mr. McCain’s own military record would make him a better commander in chief.
“But I’ve come to think the better man won,” said Mr. Nelson, owner of the Humidor Cigar Shop, an aromatic haven of pipes, blended tobaccos and customers on a first-name basis. Mr. Nelson said that Mr. Obama, through his cabinet selections, sent a signal of centrist government intention that feels all right to him.
Mr. Nelson’s customers like Cliff A. Stark, a lawyer and pipe smoker, were more representative of the spirit of pained resignation that is common here. “It’s just something you can’t do anything about,” Mr. Stark said.
At one of the city’s biggest evangelical megachurches, Victory Christian Center, with 17,000 members, there were also mixed messages of enthusiasm.
The church’s pastor and founder, Billy Joe Daugherty, said that the selection of the Rev. Rick Warren, a prominent evangelical minister from California, to give the inaugural invocation went a long way to easing fears in Mr. Daugherty’s mostly conservative congregation about a liberal social agenda. Mr. Obama’s selection of Mr. Warren has been denounced by many gay rights advocates and other liberal groups.
“What I’m sensing from Obama in making the choice he did — he’s saying to all groups, ‘Why don’t we come together?’ ” Mr. Daugherty said in an interview.
Inauguration Day, though, will be mostly business as usual. The 5th through 12th graders at Victory Christian Center will watch the ceremony on a big screen, but Mr. Daugherty said he would be traveling. Church staff members might watch in their offices, he said.
To be sure, Oklahoma remains subtly distinct from the national pattern. The state unemployment rate, while up almost a percentage point from where it stood in the fall, is still well below the national average. And the state budget, for the moment, is running a surplus.
Gun sellers have also prospered, marketing the notion that the Obama administration might try to tighten rules on gun ownership. What had been a monthly gun show near downtown has been held twice a month since November.
But an economy that looked solid enough two months ago to feel insulated — or at least not shaky enough to nudge many voters toward the idea of changing party control of the White House — has also shivered since then in the chill breeze of recession.
Ron Green saw a change in mid-November. Sales at the downtown deli owned by his wife, Susan, called The Greens on Boulder, dropped 30 percent in one week, compared with the previous year. “Business fell off a cliff,” said Mr. Green, who pitches in at lunch.
In conservations with customers, he said he had heard more business people agree lately that an Obama stimulus plan was sounding pretty good for the city.
Some black people here say their racial anxiety has heightened since the election, an ill-defined uneasiness they feel in mixed-race situations. With 380,000 residents, Tulsa is 70 percent white, 15 percent black and 7 percent Hispanic.
Princetta Rudd-Newman is living through that mix of hope and anxiety. She exults one minute over Mr. Obama’s election, she said, and frets the next over the future of the city she loves.
Her family has a long history here — an uncle began one of Tulsa’s oldest black-owned businesses, a funeral home, in 1917 — and Ms. Rudd-Newman has been trying this month to organize an inauguration party in the city’s historically black north end. But the money has not been coming in, especially at the $150-a-ticket Patriot level, pitched to local white-dominated corporations.
Ms. Rudd-Newman said she did not think it was about race. “It’s financial, in my perception,” she said. “It’s hard times.”
But it is also a time, for many people, to wait and see. The political debate over what might be has developed into more practical considerations about what can be done with the world as it is.
“Nothing’s changed,” said John Rittenoure, a software developer for Tulsa’s electric utility company, referring to his opinion of Mr. Obama. “But you’ve got to give the guy a chance, see what he can do.”
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Obama Reaches Out for McCain’s Counsel (January 19, 2009)
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Brandi Simons for The New York Times
Billy Joe Daugherty, pastor at Victory Christian Center in Tulsa, Okla., led a prayer Sunday for the new president.
Not a single county in Oklahoma stirred from the orderly phalanx marching behind Mr. McCain, the senator from Arizona who was the Republican nominee, and Mr. Driskill, the owner of an insurance agency in downtown Tulsa, said he was proud to be in those ranks. Statewide, two out of three voters supported Mr. McCain, the highest percentage in the nation.
But that staunchly Republican, conservative Oklahoma is harder to find now. While there are countless Mr. Driskills here — and hardly anyone doubts that Mr. McCain would easily win again in a redo of the vote — there are also new fractures and fault lines as some voters have shifted toward accepting what the rest of the country wrought in giving Mr. Obama a lopsided victory.
In interviews in the week leading up to Mr. Obama’s inauguration, many people here said a tolerant spirit toward his presidency has been hastened, paradoxically, by some of the same groups that voted mostly Republican in the election. Those include active or former military personnel, and people who identify themselves as evangelical Christians, two groups with traditions of respecting hierarchical order and strong leadership.
“Oklahomans understand and respect the elections process,” said Chris Benge, a Republican from Tulsa who serves as speaker of the Oklahoma House. “Once the president has been determined, the vast majority of people are willing to get behind him.”
That does not mean, Mr. Benge said, that Mr. Obama has won Oklahomans over, but only that the campaign season has ended. Do not look for Mr. Benge at any inaugural parties. He said he would be watching what he could of the ceremonies on television in his office between meetings.
But some people have, in fact, changed their minds. Leonard Nelson, 63, a 23-year veteran of both the Army and the Navy, said he had voted for Mr. McCain mainly through military fealty, believing that Mr. McCain’s own military record would make him a better commander in chief.
“But I’ve come to think the better man won,” said Mr. Nelson, owner of the Humidor Cigar Shop, an aromatic haven of pipes, blended tobaccos and customers on a first-name basis. Mr. Nelson said that Mr. Obama, through his cabinet selections, sent a signal of centrist government intention that feels all right to him.
Mr. Nelson’s customers like Cliff A. Stark, a lawyer and pipe smoker, were more representative of the spirit of pained resignation that is common here. “It’s just something you can’t do anything about,” Mr. Stark said.
At one of the city’s biggest evangelical megachurches, Victory Christian Center, with 17,000 members, there were also mixed messages of enthusiasm.
The church’s pastor and founder, Billy Joe Daugherty, said that the selection of the Rev. Rick Warren, a prominent evangelical minister from California, to give the inaugural invocation went a long way to easing fears in Mr. Daugherty’s mostly conservative congregation about a liberal social agenda. Mr. Obama’s selection of Mr. Warren has been denounced by many gay rights advocates and other liberal groups.
“What I’m sensing from Obama in making the choice he did — he’s saying to all groups, ‘Why don’t we come together?’ ” Mr. Daugherty said in an interview.
Inauguration Day, though, will be mostly business as usual. The 5th through 12th graders at Victory Christian Center will watch the ceremony on a big screen, but Mr. Daugherty said he would be traveling. Church staff members might watch in their offices, he said.
To be sure, Oklahoma remains subtly distinct from the national pattern. The state unemployment rate, while up almost a percentage point from where it stood in the fall, is still well below the national average. And the state budget, for the moment, is running a surplus.
Gun sellers have also prospered, marketing the notion that the Obama administration might try to tighten rules on gun ownership. What had been a monthly gun show near downtown has been held twice a month since November.
But an economy that looked solid enough two months ago to feel insulated — or at least not shaky enough to nudge many voters toward the idea of changing party control of the White House — has also shivered since then in the chill breeze of recession.
Ron Green saw a change in mid-November. Sales at the downtown deli owned by his wife, Susan, called The Greens on Boulder, dropped 30 percent in one week, compared with the previous year. “Business fell off a cliff,” said Mr. Green, who pitches in at lunch.
In conservations with customers, he said he had heard more business people agree lately that an Obama stimulus plan was sounding pretty good for the city.
Some black people here say their racial anxiety has heightened since the election, an ill-defined uneasiness they feel in mixed-race situations. With 380,000 residents, Tulsa is 70 percent white, 15 percent black and 7 percent Hispanic.
Princetta Rudd-Newman is living through that mix of hope and anxiety. She exults one minute over Mr. Obama’s election, she said, and frets the next over the future of the city she loves.
Her family has a long history here — an uncle began one of Tulsa’s oldest black-owned businesses, a funeral home, in 1917 — and Ms. Rudd-Newman has been trying this month to organize an inauguration party in the city’s historically black north end. But the money has not been coming in, especially at the $150-a-ticket Patriot level, pitched to local white-dominated corporations.
Ms. Rudd-Newman said she did not think it was about race. “It’s financial, in my perception,” she said. “It’s hard times.”
But it is also a time, for many people, to wait and see. The political debate over what might be has developed into more practical considerations about what can be done with the world as it is.
“Nothing’s changed,” said John Rittenoure, a software developer for Tulsa’s electric utility company, referring to his opinion of Mr. Obama. “But you’ve got to give the guy a chance, see what he can do.”
Satyam Said to Draw SEC Scrutiny in Accounting Case
Jan. 20 (Bloomberg) -- The U.S. Securities and Exchange Commission is investigating whether India’s Satyam Computer Services Ltd. misled investors in an alleged $1 billion accounting fraud, two people familiar with the matter said.
Officials from the SEC have discussed the case with counterparts in India and plan to coordinate inquiries involving the nation’s fourth-biggest software exporter, one of the people said. The people declined to be identified because the SEC’s role in the case isn’t public.
Satyam Chairman Ramalinga Raju said on Jan. 7 that he had fabricated $1 billion of cash and assets, sparking an 85 percent plunge in the stock. American depositary receipts for the Hyderabad-based company trade in New York, requiring it to file financial statements with U.S. regulators and submit to their jurisdiction.
“It’s too big a matter for the SEC to take a pass,” said Charles Clark, a former SEC enforcement attorney who now works at Kirkland & Ellis LLP in Washington. “What will make it challenging is the practicalities of investigating a fraud in a country that’s incredibly far away.”
SEC spokesman John Nester declined to comment. “We haven’t got any information about the investigation,” a Satyam spokesperson said in a text message.
Price Waterhouse
India’s inquiries are being led by teams from the Andhra Pradesh state police’s criminal investigation department, the markets regulator, the independent accounting body and the government’s serious-fraud office.
In a Jan. 7 letter to Satyam directors, Raju said he had falsified the accounts “for several years” and quit. He and his brother Rama, the managing director, were detained Jan. 9 on charges including forgery, breach of trust and criminal conspiracy. India’s government fired other directors and appointed a new board to oversee the company.
The SEC will probably examine whether Satyam’s auditor, Price Waterhouse India, ignored irregularities and may look into what role the accounting firm’s U.S. affiliate played in checking financial reports, said James Coffman, a former SEC attorney who investigated auditors including Arthur Andersen LLP.
“Even if the U.S. firm didn’t perform the audit, they may have been reckless in terms of signing off on the audit or knowing that the audit didn’t comply” with U.S. accounting standards, Coffman said. Regulators haven’t accused the auditing firm of wrongdoing in the case.
Suspect Documents?
Mike Davies, a PricewaterhouseCoopers LLP spokesman who is based in London, said the U.S. firm “was the reviewer for the U.S. filings for Satyam.” He declined to elaborate. A spokesman for Price Waterhouse India couldn’t be reached for comment.
In a letter to Satyam directors disclosed to the Bombay Stock Exchange Jan. 14, the firm said its audit reports for the company could no longer be relied upon after Raju’s alleged admissions.
“We placed reliance on management controls over financial reporting, and the information and explanations provided by the management,” the firm said in the letter.
PricewaterhouseCoopers LLP has a “vigorous global network” allowing member firms to “operate simultaneously as the most local and the most global of businesses,” the firm says on its Web site. The site also includes a disclaimer that each member firm “is a separate and independent legal entity.”
Satyam had used forged documents from four banks including Citigroup Inc. and HSBC Holdings Plc to inflate assets by $1 billion, the Wall Street Journal reported today, citing an unidentified person familiar with India’s probe.
Officials from the SEC have discussed the case with counterparts in India and plan to coordinate inquiries involving the nation’s fourth-biggest software exporter, one of the people said. The people declined to be identified because the SEC’s role in the case isn’t public.
Satyam Chairman Ramalinga Raju said on Jan. 7 that he had fabricated $1 billion of cash and assets, sparking an 85 percent plunge in the stock. American depositary receipts for the Hyderabad-based company trade in New York, requiring it to file financial statements with U.S. regulators and submit to their jurisdiction.
“It’s too big a matter for the SEC to take a pass,” said Charles Clark, a former SEC enforcement attorney who now works at Kirkland & Ellis LLP in Washington. “What will make it challenging is the practicalities of investigating a fraud in a country that’s incredibly far away.”
SEC spokesman John Nester declined to comment. “We haven’t got any information about the investigation,” a Satyam spokesperson said in a text message.
Price Waterhouse
India’s inquiries are being led by teams from the Andhra Pradesh state police’s criminal investigation department, the markets regulator, the independent accounting body and the government’s serious-fraud office.
In a Jan. 7 letter to Satyam directors, Raju said he had falsified the accounts “for several years” and quit. He and his brother Rama, the managing director, were detained Jan. 9 on charges including forgery, breach of trust and criminal conspiracy. India’s government fired other directors and appointed a new board to oversee the company.
The SEC will probably examine whether Satyam’s auditor, Price Waterhouse India, ignored irregularities and may look into what role the accounting firm’s U.S. affiliate played in checking financial reports, said James Coffman, a former SEC attorney who investigated auditors including Arthur Andersen LLP.
“Even if the U.S. firm didn’t perform the audit, they may have been reckless in terms of signing off on the audit or knowing that the audit didn’t comply” with U.S. accounting standards, Coffman said. Regulators haven’t accused the auditing firm of wrongdoing in the case.
Suspect Documents?
Mike Davies, a PricewaterhouseCoopers LLP spokesman who is based in London, said the U.S. firm “was the reviewer for the U.S. filings for Satyam.” He declined to elaborate. A spokesman for Price Waterhouse India couldn’t be reached for comment.
In a letter to Satyam directors disclosed to the Bombay Stock Exchange Jan. 14, the firm said its audit reports for the company could no longer be relied upon after Raju’s alleged admissions.
“We placed reliance on management controls over financial reporting, and the information and explanations provided by the management,” the firm said in the letter.
PricewaterhouseCoopers LLP has a “vigorous global network” allowing member firms to “operate simultaneously as the most local and the most global of businesses,” the firm says on its Web site. The site also includes a disclaimer that each member firm “is a separate and independent legal entity.”
Satyam had used forged documents from four banks including Citigroup Inc. and HSBC Holdings Plc to inflate assets by $1 billion, the Wall Street Journal reported today, citing an unidentified person familiar with India’s probe.
Singapore Economy May Post Biggest Decline on Record
Jan. 21 (Bloomberg) -- Singapore’s economy may shrink a record 5 percent this year as exports slump, increasing pressure on the government to take steps to help businesses and consumers.
Singapore is going through its sharpest and deepest recession, which may be the longest in the country’s history, said Ravi Menon, an official at the trade ministry. Gross domestic product may shrink 2 percent to 5 percent this year, the ministry said today.
The Singapore dollar fell after the government cut its economic forecast for the second time in less than three weeks. Finance Minister Tharman Shanmugaratnam will unveil this year’s budget plan tomorrow to speed up aid to companies hurt by the global recession and minimize job cuts by manufacturers such as Creative Technology Ltd.
“All the government can do is to ensure that citizens and businesses cope with the recession because it’s not possible to counteract the drop in external demand,” said Chow Penn Nee, an economist at United Overseas Bank Ltd. in Singapore. “The situation may start to improve only in the fourth quarter.”
The Singapore dollar declined as much as 0.3 percent versus the U.S. currency to S$1.5120, according to data compiled by Bloomberg. That was the weakest since Dec. 8. It traded at S$1.5041 as at 9:39 a.m. local time.
The Southeast Asian economy has contracted for three straight quarters, sliding into recession along with Japan, Hong Kong and New Zealand. The likelihood of a sharp rebound in growth “appears low,” Menon told reporters in Singapore today.
Job Losses
The economy grew 1.2 percent last year, less than earlier estimated. A decline of 5 percent this year would be the worst since the nation gained independence in 1965, according to Bloomberg data.
“2009 will definitely be a tough year for Singapore and most of export-oriented Asia,” said Manpreet Gill, a strategist at Barclays Wealth in Singapore. “In Asia, I won’t expect a sharp recovery. It will be a bit more drawn out.”
More than 10,000 people were retrenched last year and a worsening economy may result in job losses tripling in 2009, reaching numbers not seen since the Asian financial crisis a decade ago, the government said this week.
The government said today the nation may experience deflation this year, with consumer prices falling as much as 1 percent or staying unchanged.
Gross domestic product declined an annualized 16.9 percent last quarter from the previous three months, after shrinking a revised 5.1 percent between July and September, the trade ministry said. The contraction in the fourth quarter was worse than a Jan. 2 estimate of 12.5 percent.
Manufacturing
“The economic downturn has spread to all the key sectors of the economy,” Trade Minister Lim Hng Kiang said Jan. 19. “Our manufacturing sector is likely to continue facing a slowdown this year.”
Manufacturing, which accounts for a quarter of the economy, fell a revised 10.7 percent in the three months ended December from a year earlier, and shrank 4.1 percent in 2008, the trade ministry said.
The export-dependent nation has been battered by declining orders for electronics goods and pharmaceuticals from its biggest customers in the U.S. and Europe, as well as emerging markets. Creative Technology, the Singaporean maker of accessories for Apple Inc.’s iPod, said Dec. 31 it eliminated 2,700 jobs or almost half its workforce last fiscal year after demand for its own music players tumbled.
Weak Sentiment
Overseas shipments may drop as much as 11 percent in 2009, the government said today, after a 7.9 percent decline last year that was the worst performance since 2001.
Growth in the services and construction industries slowed. Services dropped 0.1 percent in the fourth quarter from a year earlier, and grew 5 percent last year. Construction gained a revised 14.1 percent, and rose 17.9 percent in 2008.
“Weaker consumer sentiments among Singaporeans have affected the retail sector and the property market,” Trade Minister Lim said. “Retailers and restaurants are seeing slower business as consumers are reining in discretionary spending.”
Singapore’s visitor arrivals and tourism receipts missed government targets last year and the nation expects a “challenging year” for the industry in 2009 as the global recession curtails consumer spending and holiday plans.
Companies such as lender DBS Group Holdings Ltd. and manufacturer Stats Chippac Ltd. are firing workers as demand for goods and services ebb. About 4,800 people were retrenched last quarter, acting Minister for Manpower Gan Kim Yong said Jan. 19.
Government Spending
Credit Suisse Group predicts up to 300,000 positions may be shed by end-2010, compared with the government’s estimate of as many as 30,000 jobs lost this year.
The government may announce as much as S$20 billion ($13 billion) in additional spending tomorrow when it unveils its budget, said Selena Ling, head of treasury research at Oversea- Chinese Banking Corp. in Singapore.
Businesses will get help with rental and wage bills, Prime Minister Lee Hsien Loong said Dec. 31. The government in November said it will extend more loans to local companies and spend S$600 million over the next two years on worker training.
Measures to help citizens survive the recession may include as much as S$7.5 billion of cash handouts, tax and utility rebates, said Ling at Oversea-Chinese Banking Corp.
“The budget would likely take an aggressive and multi- pronged approach to reduce costs, assist businesses and Singaporeans, and pump-prime the economy while not forgetting medium-term competitiveness,” Ling said. It will “only partially mitigate the economic downturn.”
Singapore is going through its sharpest and deepest recession, which may be the longest in the country’s history, said Ravi Menon, an official at the trade ministry. Gross domestic product may shrink 2 percent to 5 percent this year, the ministry said today.
The Singapore dollar fell after the government cut its economic forecast for the second time in less than three weeks. Finance Minister Tharman Shanmugaratnam will unveil this year’s budget plan tomorrow to speed up aid to companies hurt by the global recession and minimize job cuts by manufacturers such as Creative Technology Ltd.
“All the government can do is to ensure that citizens and businesses cope with the recession because it’s not possible to counteract the drop in external demand,” said Chow Penn Nee, an economist at United Overseas Bank Ltd. in Singapore. “The situation may start to improve only in the fourth quarter.”
The Singapore dollar declined as much as 0.3 percent versus the U.S. currency to S$1.5120, according to data compiled by Bloomberg. That was the weakest since Dec. 8. It traded at S$1.5041 as at 9:39 a.m. local time.
The Southeast Asian economy has contracted for three straight quarters, sliding into recession along with Japan, Hong Kong and New Zealand. The likelihood of a sharp rebound in growth “appears low,” Menon told reporters in Singapore today.
Job Losses
The economy grew 1.2 percent last year, less than earlier estimated. A decline of 5 percent this year would be the worst since the nation gained independence in 1965, according to Bloomberg data.
“2009 will definitely be a tough year for Singapore and most of export-oriented Asia,” said Manpreet Gill, a strategist at Barclays Wealth in Singapore. “In Asia, I won’t expect a sharp recovery. It will be a bit more drawn out.”
More than 10,000 people were retrenched last year and a worsening economy may result in job losses tripling in 2009, reaching numbers not seen since the Asian financial crisis a decade ago, the government said this week.
The government said today the nation may experience deflation this year, with consumer prices falling as much as 1 percent or staying unchanged.
Gross domestic product declined an annualized 16.9 percent last quarter from the previous three months, after shrinking a revised 5.1 percent between July and September, the trade ministry said. The contraction in the fourth quarter was worse than a Jan. 2 estimate of 12.5 percent.
Manufacturing
“The economic downturn has spread to all the key sectors of the economy,” Trade Minister Lim Hng Kiang said Jan. 19. “Our manufacturing sector is likely to continue facing a slowdown this year.”
Manufacturing, which accounts for a quarter of the economy, fell a revised 10.7 percent in the three months ended December from a year earlier, and shrank 4.1 percent in 2008, the trade ministry said.
The export-dependent nation has been battered by declining orders for electronics goods and pharmaceuticals from its biggest customers in the U.S. and Europe, as well as emerging markets. Creative Technology, the Singaporean maker of accessories for Apple Inc.’s iPod, said Dec. 31 it eliminated 2,700 jobs or almost half its workforce last fiscal year after demand for its own music players tumbled.
Weak Sentiment
Overseas shipments may drop as much as 11 percent in 2009, the government said today, after a 7.9 percent decline last year that was the worst performance since 2001.
Growth in the services and construction industries slowed. Services dropped 0.1 percent in the fourth quarter from a year earlier, and grew 5 percent last year. Construction gained a revised 14.1 percent, and rose 17.9 percent in 2008.
“Weaker consumer sentiments among Singaporeans have affected the retail sector and the property market,” Trade Minister Lim said. “Retailers and restaurants are seeing slower business as consumers are reining in discretionary spending.”
Singapore’s visitor arrivals and tourism receipts missed government targets last year and the nation expects a “challenging year” for the industry in 2009 as the global recession curtails consumer spending and holiday plans.
Companies such as lender DBS Group Holdings Ltd. and manufacturer Stats Chippac Ltd. are firing workers as demand for goods and services ebb. About 4,800 people were retrenched last quarter, acting Minister for Manpower Gan Kim Yong said Jan. 19.
Government Spending
Credit Suisse Group predicts up to 300,000 positions may be shed by end-2010, compared with the government’s estimate of as many as 30,000 jobs lost this year.
The government may announce as much as S$20 billion ($13 billion) in additional spending tomorrow when it unveils its budget, said Selena Ling, head of treasury research at Oversea- Chinese Banking Corp. in Singapore.
Businesses will get help with rental and wage bills, Prime Minister Lee Hsien Loong said Dec. 31. The government in November said it will extend more loans to local companies and spend S$600 million over the next two years on worker training.
Measures to help citizens survive the recession may include as much as S$7.5 billion of cash handouts, tax and utility rebates, said Ling at Oversea-Chinese Banking Corp.
“The budget would likely take an aggressive and multi- pronged approach to reduce costs, assist businesses and Singaporeans, and pump-prime the economy while not forgetting medium-term competitiveness,” Ling said. It will “only partially mitigate the economic downturn.”
Monday, January 19, 2009
HSBC, Asian Banks Slump as RBS Loss Stoke Concerns
Jan. 20 (Bloomberg) -- HSBC Holdings Plc led banking shares lower in Asia after Royal Bank of Scotland Group Plc flagged the biggest loss in British history, fueling concerns among investors that the industry crisis is deepening.
HSBC, Europe’s largest bank, lost as much as 8.8 percent and traded at HK$58.10 in Hong Kong at 11:22 a.m., the lowest since October 1998. An index tracking 84 Japanese lenders fell 3 percent in Tokyo. Banks in Australia and Korea also declined.
RBS tumbled 67 percent in London yesterday after saying it may post a full-year loss of as much as 28 billion pounds ($40 billion). The U.K. government is stepping up an industry bailout, less than a week after Bank of America Corp. received a $138 billion rescue and Citigroup Inc. announced plans to split in two.
“The RBS forecast has hit already fragile sentiment,” said Nader Naeimi, a Sydney-based senior investment strategist at AMP Capital Investors, which manages about $85 billion. “It brings back all the doubts about more writedowns.”
Mizuho Financial Group Inc., Japan’s second-largest bank, fell 5.8 percent at the 11 a.m. break in Tokyo. National Australia Bank Ltd., the country’s biggest by assets, slipped 6 percent at 2:23 p.m. in Sydney. KB Financial Group Inc., which controls South Korea’s biggest bank, dropped 4.8 percent in Seoul, the lowest since Jan. 2. Industrial & Commercial Bank of China Ltd., the world’s largest lender by market value, slid 5.5 percent in Hong Kong.
‘Jitters Remain’
The decision by U.K. Prime Minister Gordon Brown to start a second-round, 100 billion-pound bailout shifted focus toward the problems still lingering in the banking system. As RBS investors braced for a full nationalization of the Edinburgh-based bank, Brown said yesterday he is “angry” banks are rationing credit.
“The financial crisis is not over yet and market jitters remain as banks’ asset quality worsens in slowing economies,” said Kim Young Il, head of equities at Korea Investment Trust Management Co. in Seoul, which manages the equivalent of $6.2 billion. “The attention is now on whether this signals a second round of financial crisis.”
London-based HSBC yesterday said it’s one of the world’s most “strongly capitalized” lenders and it “cannot envisage circumstances” where it would need government support. The statement came after shareholder Knight Vinke Asset Management LLC joined CSLA Asia-Pacific Markets, Morgan Stanley and Goldman Sachs Group Inc. in saying HSBC may need to sell stock to help plug a widening capital shortfall.
Goldman Sachs analyst Roy Ramos predicts HSBC’s Hong Kong shares will fall to HK$49. That’s below the price just before Aug. 14, 1998, when the Hong Kong government bought stock in HSBC and other companies on the benchmark Hang Seng Index to fend off an attack on the local currency.
Japan Injection Plan
Japan’s government said in December it plans to inject as much as 12 trillion yen ($133 billion) into the nation’s banks to boost their finances and stimulate lending to companies. Sapporo Hokuyo Holdings Inc., a Japanese bank holding company based in the north of the country, said it is considering applying for public funds yesterday to bolster capital.
Japanese banks including Mitsubishi UFJ Financial Group Inc. face larger potential losses on domestic shareholdings than from toxic U.S. mortgage securities, said analyst Kristine Li.
“Relative to RBS, the foreign exposure of Japan’s largest banks is not so deadly,” said Li, a Tokyo-based analyst at KBC Securities in Tokyo. “For Japanese banks the big, big issue is the equity market. That’s the big killer.”
Mitsubishi UFJ, Japan’s largest bank, said this month it will book 288 billion yen in charges on stock market investments in the quarter that ended Dec. 31, threatening to cause the lender’s first loss.
HSBC, Europe’s largest bank, lost as much as 8.8 percent and traded at HK$58.10 in Hong Kong at 11:22 a.m., the lowest since October 1998. An index tracking 84 Japanese lenders fell 3 percent in Tokyo. Banks in Australia and Korea also declined.
RBS tumbled 67 percent in London yesterday after saying it may post a full-year loss of as much as 28 billion pounds ($40 billion). The U.K. government is stepping up an industry bailout, less than a week after Bank of America Corp. received a $138 billion rescue and Citigroup Inc. announced plans to split in two.
“The RBS forecast has hit already fragile sentiment,” said Nader Naeimi, a Sydney-based senior investment strategist at AMP Capital Investors, which manages about $85 billion. “It brings back all the doubts about more writedowns.”
Mizuho Financial Group Inc., Japan’s second-largest bank, fell 5.8 percent at the 11 a.m. break in Tokyo. National Australia Bank Ltd., the country’s biggest by assets, slipped 6 percent at 2:23 p.m. in Sydney. KB Financial Group Inc., which controls South Korea’s biggest bank, dropped 4.8 percent in Seoul, the lowest since Jan. 2. Industrial & Commercial Bank of China Ltd., the world’s largest lender by market value, slid 5.5 percent in Hong Kong.
‘Jitters Remain’
The decision by U.K. Prime Minister Gordon Brown to start a second-round, 100 billion-pound bailout shifted focus toward the problems still lingering in the banking system. As RBS investors braced for a full nationalization of the Edinburgh-based bank, Brown said yesterday he is “angry” banks are rationing credit.
“The financial crisis is not over yet and market jitters remain as banks’ asset quality worsens in slowing economies,” said Kim Young Il, head of equities at Korea Investment Trust Management Co. in Seoul, which manages the equivalent of $6.2 billion. “The attention is now on whether this signals a second round of financial crisis.”
London-based HSBC yesterday said it’s one of the world’s most “strongly capitalized” lenders and it “cannot envisage circumstances” where it would need government support. The statement came after shareholder Knight Vinke Asset Management LLC joined CSLA Asia-Pacific Markets, Morgan Stanley and Goldman Sachs Group Inc. in saying HSBC may need to sell stock to help plug a widening capital shortfall.
Goldman Sachs analyst Roy Ramos predicts HSBC’s Hong Kong shares will fall to HK$49. That’s below the price just before Aug. 14, 1998, when the Hong Kong government bought stock in HSBC and other companies on the benchmark Hang Seng Index to fend off an attack on the local currency.
Japan Injection Plan
Japan’s government said in December it plans to inject as much as 12 trillion yen ($133 billion) into the nation’s banks to boost their finances and stimulate lending to companies. Sapporo Hokuyo Holdings Inc., a Japanese bank holding company based in the north of the country, said it is considering applying for public funds yesterday to bolster capital.
Japanese banks including Mitsubishi UFJ Financial Group Inc. face larger potential losses on domestic shareholdings than from toxic U.S. mortgage securities, said analyst Kristine Li.
“Relative to RBS, the foreign exposure of Japan’s largest banks is not so deadly,” said Li, a Tokyo-based analyst at KBC Securities in Tokyo. “For Japanese banks the big, big issue is the equity market. That’s the big killer.”
Mitsubishi UFJ, Japan’s largest bank, said this month it will book 288 billion yen in charges on stock market investments in the quarter that ended Dec. 31, threatening to cause the lender’s first loss.
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