Jan. 5 (Bloomberg) -- Japanese stocks rose for a second day, led by electronics makers and commodities traders after U.S. manufacturing climbed more than estimated and prices of oil and metals gained.
Sony Corp., Japan’s biggest exporter of televisions, added 1.6 percent. Mitsubishi Corp., the nation’s biggest trading company, climbed 3.1 percent, and Inpex Corp., its largest oil explorer, added 2.2 percent. Nippon Yusen K.K., Japan’s biggest shipping line, climbed 2.5 percent after a measure of cargo rates gained for the first time in a month.
“We can see from the positive U.S. economic data and rising commodity prices that there is a strong anticipation of a global self-sustaining recovery,” said Fumiyuki Nakanishi, a strategist at Tokyo-based SMBC Friend Securities Co.
Japan’s Nikkei 225 rose 0.8 percent to 10,743.72 as of 9:31 a.m. in Tokyo, headed for its highest close since October 2008. The broader Topix index climbed 1 percent to 925.30, with about four stocks rising for each that fell.
The Topix climbed 5.6 percent last year, the lowest return among benchmark indexes for the world’s 40 largest stock markets. Stocks in the gauge are valued at an average of 36 times estimated earnings, compared with 18 times for the Standard & Poor’s 500 Index in the U.S. and 13 times for the Dow Jones Stoxx 600 Index in Europe.
The S&P 500 added 1.6 percent in New York yesterday after the Tempe, Arizona-based Institute for Supply Management said its factory index, a measure of U.S. manufacturing, rose to 55.9, the highest level since April 2006. The median forecast by economists was 54.3. Readings greater than 50 signal expansion.
Electronics, Commodities
Sony climbed 1.6 percent to 2,775 yen. Hitachi Ltd., a maker of industrial equipment which receives more than 40 percent of its revenue overseas, rose 0.7 percent to 288 yen.
Crude oil for February delivery rose 2.7 percent in New York yesterday, the highest close in more than 14 months, as freezing weather and improving global economies bolstered the outlook for fuel demand. Gold prices surged the most in two months, or 2 percent, and copper futures for March delivery climbed 1.8 percent to a 16-month high.
Inpex gained 2.2 percent to 731,000 yen. Mitsubishi Corp. jumped 3.1 percent to 2,389 yen and was the biggest contributor to the Topix’s advance. Itochu Corp., Japan’s No. 4 trading company by market value, added 3.3 percent to 717 yen.
Shipping lines gained the most among the 33 industry groups in the Topix after the Baltic Dry Index, a benchmark for commodity cargo rates, added 4.5 percent yesterday in London, the first increase since Dec. 4. Nippon Yusen climbed 2.5 percent to 293 yen. Mitsui O.S.K. Lines Ltd., the operator of the world’s largest merchant fleet, added 2.6 percent to 505 yen. Kawasaki Kisen Kaisha Ltd. advanced 3 percent to 277 yen.
Monday, January 4, 2010
Sunday, January 3, 2010
U.S., U.K. Close Yemen Embassies; Brown Cites ‘Failing State’
Jan. 4 (Bloomberg) -- The U.S. and U.K. closed their embassies in Yemen, citing threats of attacks, as officials voiced concern over al-Qaeda’s presence in what British Prime Minister Gordon Brown called a “failing state.”
White House counterterrorism chief John Brennan said intelligence indicated that al-Qaeda plans attacks in Sana’a, the capital, “possibly against our embassy, possibly against U.S. personnel.” Shutting the embassy “was the prudent thing to do,” Brennan said yesterday on ABC’s “This Week” program.
The U.K. and U.S. are offering more security aid for Yemen, an impoverished Arabian Peninsula nation which is emerging as a base for al-Qaeda attacks as the terrorist group comes under pressure in Pakistan and Afghanistan.
U.K. Prime Minister Brown, who called Yemen a “failing state” in an interview with the British Broadcasting Corp. yesterday, will convene a Jan. 28 aid conference on Yemen in London at which the U.K. will seek to enlist support from oil- rich Gulf nations.
The Yemen branch of al-Qaeda claimed responsibility for the Dec. 25 attack, in which Nigerian Umar Farouk Abdulmutallab was charged with trying to blow up a Northwest Airlines flight with 278 passengers.
The failed attack prompted the U.S. Transportation Security Administration to issue new rules yesterday calling for “enhanced screening” of U.S.-bound air travelers who have passed through “countries of interest,” as well as requiring random checks on other international flights.
Other Attacks Feared
Brennan, President Barack Obama’s assistant for homeland security and counterterrorism, said there are “probably several hundred” al-Qaeda members in Yemen and the U.S. worries they may be training other operatives for attacks in the U.S. and elsewhere similar to the one attempted by Abdulmutallab.
“We’re not going to take any chances with the lives of our diplomats and others” at the American embassy, Brennan said on “Fox News Sunday,” one of four Sunday news shows on which he appeared.
Asked if American troops might be sent to Yemen, Brennan said: “We’re not talking about that at this point at all.”
“The Yemeni government has demonstrated their willingness to take the fight to al-Qaeda,” Brennan said. “They’re willing to accept our support. We’re providing them everything that they’ve asked for.”
The embassy closures came a day after the top U.S. general in the region, David Petraeus, paid an unannounced visit to Yemen and pledged more assistance in combating terrorism.
Doubling U.S. Aid
Petraeus, in talks Jan. 2 in Sana’a with President Ali Abdullah Saleh, reaffirmed the U.S. commitment to support anti- terrorism efforts in Yemen, the Yemeni presidency said in a statement on its Web site. Petraeus told reporters in Baghdad on Jan. 1 that the U.S. in fiscal 2010 will almost double last year’s $70 million in security aid for Yemen.
“The Yemeni president and parliament take this threat very seriously,” Petraeus, the top U.S. commander in the Middle East and Central Asia, said in Baghdad. “And that is of enormous significance, especially in a country facing such challenges.”
The London conference should concentrate on Yemen’s $11 billion development needs as well as anti-terrorism assistance, Deputy Minister for Planning and International Cooperation Hisham Sharaf said by phone from Sana’a yesterday.
A November 2006 donors’ conference in London led to pledges of $5.7 billion in aid for Yemen, almost half from Gulf nations, of which only $415 million has been received, Sharaf said.
“What is needed is a long-term aid strategy,” said Mustafa Alani, a regional security expert from the Dubai-based Gulf Research Center. “It would be wrong to focus only on security and counterterrorism.”
Other Challenges
Yemen is also struggling to subdue both an insurgency by northern Shiite Muslim rebels that has drawn in neighboring Saudi Arabia, a key U.S. ally, and a secessionist movement in the south. It is the poorest Arab nation and the government expects oil reserves that fund 70 percent of the budget to run out over the next decade.
Obama and Brown agreed to fund a police unit in Yemen to target terrorism and will support coast guard operations in the Arabian Peninsula nation, according to an e-mailed statement from the two governments yesterday.
Yemen said Dec. 24 it had foiled an al-Qaeda attack on the U.K. embassy a week earlier modeled on a twin suicide car bombing on the U.S. embassy in September 2008 that killed 17 people, including seven security guards and seven attackers.
Al-Qaeda Base
Yemen has become an increasingly important base for al- Qaeda, Yemeni Foreign Minister Abu Bakr al-Qirbi said on Dec. 29.
Abdulmutallab, a 23-year-old, spent about three months in Yemen before leaving the country in early December. He told U.S. investigators that in Yemen he received training and the bomb- making materials he used in his attempt to blow up the airliner.
Brennan said U.S. intelligence agencies had “snippets” of information that were recognized “in hindsight” to be related to the failed attack. There was a “failure to integrate and piece together those bits of information,” he said.
The top Republican on the Senate Intelligence Committee, Kit Bond of Missouri, said the U.S. national security system failed.
“With all of the leads dangling out there, somebody screwed up by not reporting it,” said Bond. In addition, the airport screening “was a disaster,” he said.
The Intelligence Committee, one of several congressional panels planning investigations of the incident, will hold a hearing Jan. 21. Bond, appearing yesterday on Fox, said there are no grounds at this point to fire Homeland Security Secretary Janet Napolitano, National Intelligence Director Dennis Blair or Leon Panetta, head of the Central Intelligence Agency.
Other Criticism
Other Republicans criticized the Democratic Obama administration’s anti-terrorism efforts.
“What we had in this case was a failure to act on a very credible report from the terrorist’s father that should, at the very least, have caused the State Department to revoke his visa,” Senator Susan Collins, a Maine Republican, said on “This Week.” Abdulmutallab’s father warned officials at the U.S. embassy in Nigeria that he was worried about his son’s extremist views, U.S. authorities said.
“Why wasn’t this individual’s visa revoked once we had such a credible report that he posed a threat?” Collins said.
She said it is “unacceptable” that there is no screening system in place to detect the explosive used in the Christmas Day incident, even eight years after would-be shoe-bomber Richard Reid used “the exact same explosive.”
Enemy Combatant
Senator Jim DeMint, a South Carolina Republican, said the U.S. “probably lost valuable information” by not viewing the attempted airline bombing as an act of war and the suspect as an enemy combatant.
“If we had treated this Christmas Day bomber as a terrorist, he would have immediately been interrogated military- style, rather than given the rights of an American and lawyers,” DeMint said on CNN.
Democratic Senator Claire McCaskill of Missouri, also appearing on CNN, said it is “unfair and, frankly, political to take pot shots at the president as we respond to this failure in our systems that we’ve got to get fixed.”
White House counterterrorism chief John Brennan said intelligence indicated that al-Qaeda plans attacks in Sana’a, the capital, “possibly against our embassy, possibly against U.S. personnel.” Shutting the embassy “was the prudent thing to do,” Brennan said yesterday on ABC’s “This Week” program.
The U.K. and U.S. are offering more security aid for Yemen, an impoverished Arabian Peninsula nation which is emerging as a base for al-Qaeda attacks as the terrorist group comes under pressure in Pakistan and Afghanistan.
U.K. Prime Minister Brown, who called Yemen a “failing state” in an interview with the British Broadcasting Corp. yesterday, will convene a Jan. 28 aid conference on Yemen in London at which the U.K. will seek to enlist support from oil- rich Gulf nations.
The Yemen branch of al-Qaeda claimed responsibility for the Dec. 25 attack, in which Nigerian Umar Farouk Abdulmutallab was charged with trying to blow up a Northwest Airlines flight with 278 passengers.
The failed attack prompted the U.S. Transportation Security Administration to issue new rules yesterday calling for “enhanced screening” of U.S.-bound air travelers who have passed through “countries of interest,” as well as requiring random checks on other international flights.
Other Attacks Feared
Brennan, President Barack Obama’s assistant for homeland security and counterterrorism, said there are “probably several hundred” al-Qaeda members in Yemen and the U.S. worries they may be training other operatives for attacks in the U.S. and elsewhere similar to the one attempted by Abdulmutallab.
“We’re not going to take any chances with the lives of our diplomats and others” at the American embassy, Brennan said on “Fox News Sunday,” one of four Sunday news shows on which he appeared.
Asked if American troops might be sent to Yemen, Brennan said: “We’re not talking about that at this point at all.”
“The Yemeni government has demonstrated their willingness to take the fight to al-Qaeda,” Brennan said. “They’re willing to accept our support. We’re providing them everything that they’ve asked for.”
The embassy closures came a day after the top U.S. general in the region, David Petraeus, paid an unannounced visit to Yemen and pledged more assistance in combating terrorism.
Doubling U.S. Aid
Petraeus, in talks Jan. 2 in Sana’a with President Ali Abdullah Saleh, reaffirmed the U.S. commitment to support anti- terrorism efforts in Yemen, the Yemeni presidency said in a statement on its Web site. Petraeus told reporters in Baghdad on Jan. 1 that the U.S. in fiscal 2010 will almost double last year’s $70 million in security aid for Yemen.
“The Yemeni president and parliament take this threat very seriously,” Petraeus, the top U.S. commander in the Middle East and Central Asia, said in Baghdad. “And that is of enormous significance, especially in a country facing such challenges.”
The London conference should concentrate on Yemen’s $11 billion development needs as well as anti-terrorism assistance, Deputy Minister for Planning and International Cooperation Hisham Sharaf said by phone from Sana’a yesterday.
A November 2006 donors’ conference in London led to pledges of $5.7 billion in aid for Yemen, almost half from Gulf nations, of which only $415 million has been received, Sharaf said.
“What is needed is a long-term aid strategy,” said Mustafa Alani, a regional security expert from the Dubai-based Gulf Research Center. “It would be wrong to focus only on security and counterterrorism.”
Other Challenges
Yemen is also struggling to subdue both an insurgency by northern Shiite Muslim rebels that has drawn in neighboring Saudi Arabia, a key U.S. ally, and a secessionist movement in the south. It is the poorest Arab nation and the government expects oil reserves that fund 70 percent of the budget to run out over the next decade.
Obama and Brown agreed to fund a police unit in Yemen to target terrorism and will support coast guard operations in the Arabian Peninsula nation, according to an e-mailed statement from the two governments yesterday.
Yemen said Dec. 24 it had foiled an al-Qaeda attack on the U.K. embassy a week earlier modeled on a twin suicide car bombing on the U.S. embassy in September 2008 that killed 17 people, including seven security guards and seven attackers.
Al-Qaeda Base
Yemen has become an increasingly important base for al- Qaeda, Yemeni Foreign Minister Abu Bakr al-Qirbi said on Dec. 29.
Abdulmutallab, a 23-year-old, spent about three months in Yemen before leaving the country in early December. He told U.S. investigators that in Yemen he received training and the bomb- making materials he used in his attempt to blow up the airliner.
Brennan said U.S. intelligence agencies had “snippets” of information that were recognized “in hindsight” to be related to the failed attack. There was a “failure to integrate and piece together those bits of information,” he said.
The top Republican on the Senate Intelligence Committee, Kit Bond of Missouri, said the U.S. national security system failed.
“With all of the leads dangling out there, somebody screwed up by not reporting it,” said Bond. In addition, the airport screening “was a disaster,” he said.
The Intelligence Committee, one of several congressional panels planning investigations of the incident, will hold a hearing Jan. 21. Bond, appearing yesterday on Fox, said there are no grounds at this point to fire Homeland Security Secretary Janet Napolitano, National Intelligence Director Dennis Blair or Leon Panetta, head of the Central Intelligence Agency.
Other Criticism
Other Republicans criticized the Democratic Obama administration’s anti-terrorism efforts.
“What we had in this case was a failure to act on a very credible report from the terrorist’s father that should, at the very least, have caused the State Department to revoke his visa,” Senator Susan Collins, a Maine Republican, said on “This Week.” Abdulmutallab’s father warned officials at the U.S. embassy in Nigeria that he was worried about his son’s extremist views, U.S. authorities said.
“Why wasn’t this individual’s visa revoked once we had such a credible report that he posed a threat?” Collins said.
She said it is “unacceptable” that there is no screening system in place to detect the explosive used in the Christmas Day incident, even eight years after would-be shoe-bomber Richard Reid used “the exact same explosive.”
Enemy Combatant
Senator Jim DeMint, a South Carolina Republican, said the U.S. “probably lost valuable information” by not viewing the attempted airline bombing as an act of war and the suspect as an enemy combatant.
“If we had treated this Christmas Day bomber as a terrorist, he would have immediately been interrogated military- style, rather than given the rights of an American and lawyers,” DeMint said on CNN.
Democratic Senator Claire McCaskill of Missouri, also appearing on CNN, said it is “unfair and, frankly, political to take pot shots at the president as we respond to this failure in our systems that we’ve got to get fixed.”
Asia Stocks Advance on China Manufacturing, Stronger Dollar
Jan. 4 (Bloomberg) -- Asian stocks rose after Chinese manufacturing expanded in December and a stronger dollar boosted the earnings outlook for Japanese car and electronics manufacturers.
Nippon Yusen K.K., Japan’s biggest shipping line, added 1.4 percent in Tokyo on optimism trade with China will rise. Honda Motor Co., which gets 42 percent of its revenue from North America, gained 1.9 percent. Japan Airlines Corp. soared 31 percent after the government said the Development Bank of Japan will double the amount of credit it will provide for the carrier.
The MSCI Asia Pacific Index rose 0.5 percent to 121.08 as of 10:51 a.m. in Tokyo. The gauge advanced 34 percent last year, the steepest annual climb since 2003 as lower interest rates and stimulus packages helped drag the global economy out of the worst slowdown since World War II.
“Asia is expected to remain the engine of growth for the world’s economy,” said Hiroshi Morikawa, a senior strategist at MU Investments Co., which manages the equivalent of $13 billion in Tokyo. “The first trading day of a year is often seen as a predictor of the year’s market climate. People are hoping this year will be better than last year and become more responsive to good news.”
The Nikkei 225 Stock Average rose 1.3 percent in Tokyo after a four-day recess. Australia’s S&P/ASX 200 Index added 0.2 percent even as a manufacturing index shrank in December for the first time in five months.
Futures on the Standard & Poor’s 500 Index added 0.5 percent. The gauge fell 1 percent on Dec. 31 as falling jobless claims raised speculation the economy was improving enough to allow the central bank to reduce stimulus measures. Government figures showed initial jobless claims in the week ended Dec. 26 fell to the lowest level since July 2008.
Last year’s jump boosted the price-book value ratio of the MSCI Asia Pacific Index to 1.61 times, the highest level since September 2008, data compiled by Bloomberg show.
China’s Purchasing Managers’ Index climbed to a seasonally adjusted 56.6, the Federation of Logistics and Purchasing said on Jan. 1. It was the fastest expansion in 20 months. South Korean exports increased 33.7 percent in December from a year earlier, the fastest pace in 17 months, the Ministry of Knowledge Economy said on Jan. 1. That exceeded the 27.9 percent gain projected by economists.
The yen weakened to as much as 93.15 per dollar on Dec. 31, a level not seen since Sept. 7, and traded at 92.88 today. A weaker yen increases the value of overseas sales at Japanese companies when converted into their home currency.
Nippon Yusen K.K., Japan’s biggest shipping line, added 1.4 percent in Tokyo on optimism trade with China will rise. Honda Motor Co., which gets 42 percent of its revenue from North America, gained 1.9 percent. Japan Airlines Corp. soared 31 percent after the government said the Development Bank of Japan will double the amount of credit it will provide for the carrier.
The MSCI Asia Pacific Index rose 0.5 percent to 121.08 as of 10:51 a.m. in Tokyo. The gauge advanced 34 percent last year, the steepest annual climb since 2003 as lower interest rates and stimulus packages helped drag the global economy out of the worst slowdown since World War II.
“Asia is expected to remain the engine of growth for the world’s economy,” said Hiroshi Morikawa, a senior strategist at MU Investments Co., which manages the equivalent of $13 billion in Tokyo. “The first trading day of a year is often seen as a predictor of the year’s market climate. People are hoping this year will be better than last year and become more responsive to good news.”
The Nikkei 225 Stock Average rose 1.3 percent in Tokyo after a four-day recess. Australia’s S&P/ASX 200 Index added 0.2 percent even as a manufacturing index shrank in December for the first time in five months.
Futures on the Standard & Poor’s 500 Index added 0.5 percent. The gauge fell 1 percent on Dec. 31 as falling jobless claims raised speculation the economy was improving enough to allow the central bank to reduce stimulus measures. Government figures showed initial jobless claims in the week ended Dec. 26 fell to the lowest level since July 2008.
Last year’s jump boosted the price-book value ratio of the MSCI Asia Pacific Index to 1.61 times, the highest level since September 2008, data compiled by Bloomberg show.
China’s Purchasing Managers’ Index climbed to a seasonally adjusted 56.6, the Federation of Logistics and Purchasing said on Jan. 1. It was the fastest expansion in 20 months. South Korean exports increased 33.7 percent in December from a year earlier, the fastest pace in 17 months, the Ministry of Knowledge Economy said on Jan. 1. That exceeded the 27.9 percent gain projected by economists.
The yen weakened to as much as 93.15 per dollar on Dec. 31, a level not seen since Sept. 7, and traded at 92.88 today. A weaker yen increases the value of overseas sales at Japanese companies when converted into their home currency.
Saturday, January 2, 2010
Yemen’s Chaos Aids the Evolution of a Qaeda Cell
SANA, Yemen — Al Qaeda in the Arabian Peninsula has rapidly evolved into an expanding and ambitious regional terrorist network thanks in part to a weakened, impoverished and distracted Yemeni government.
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Internal Conflicts and the Growing Influence of Al QaedaGraphic
Internal Conflicts and the Growing Influence of Al Qaeda
Related
Obama Says Al Qaeda in Yemen Planned Bombing Plot, and He Vows Retribution (January 3, 2010)
After Failed Attack, Britain Turns Focus to Yemen (January 2, 2010)
While Yemen has chased two homegrown rebellions, over the last year the Qaeda cell here has begun sharing resources across borders and has been spurred on to more ambitious attacks by a leadership strengthened by released Qaeda detainees and returning fighters from Iraq.
The priorities of the Yemeni government have been fighting a war in the north and combating secessionists across the south. In the interim, Al Qaeda has flourished in the large, lawless and rugged tribal territories of Yemen, creating training camps, attacking Western targets and receiving increasing popular sympathy, Yemeni and American officials say.
Al Qaeda’s growing profile in Yemen became clear after a Nigerian man, Umar Farouk Abdulmutallab, 23, was able to overstay his visa here by several months, connect with Qaeda militants and leave this country with a bomb sewn into his underwear.
In his weekly address on Saturday, President Obama for the first time directly blamed Al Qaeda in the Arabian Peninsula for the bombing attempt and said that fighting the group would be a high priority. “In recent years, they have bombed Yemeni government facilities and Western hotels,” he said, adding, “So as president, I’ve made it a priority to strengthen our partnership with the Yemeni government.”
The core of the group here is still thought to be small, perhaps no more than 200 people. But the group has the important advantage of being part of a larger, regional structure, having merged a year ago with the Saudi branch of Al Qaeda to form Al Qaeda in the Arabian Peninsula. And it has been able to originate fairly sophisticated operations here, in Saudi Arabia and now on an airliner headed for Detroit.
Though Yemen played an early role in Al Qaeda’s history — it is Osama bin Laden’s ancestral homeland, and it was the staging ground for the 2000 attack on the American destroyer Cole — the key chapters in the story of Al Qaeda’s rise here have been written recently by leaders who were released from detention at Guantánamo Bay, Cuba, escaped from Yemeni prisons or were drawn to shelter here by common cause and ideology.
Those men have transformed and reoriented a weak local Qaeda cell that had made a kind of peace with the government after 2003. In the year since the Saudi and Yemeni branches merged, Al Qaeda has taken full advantage of the government’s preoccupation with the rebellions, building support from the tribal structures and traditions in Yemen’s poor and lawless territories.
One big moment came in February 2006, when 23 imprisoned men suspected of being members of Al Qaeda escaped from a high-security prison, reportedly with the aid of some Yemeni security forces. All but three or four of the men were eventually recaptured or killed by Yemeni security forces. But one prisoner, Nasser al-Wuhayshi, became leader of the Qaeda cell in Yemen and moved to reorganize it, focusing it on attacks against nearby Western targets. Another prisoner, Qassim al-Raimi, became the military commander.
The next year, Mr. Wuhayshi found a deputy and, perhaps, a rival for leadership, Said Ali al-Shihri, 36, a Saudi citizen. He was released from six years’ detention in Guantánamo Bay in December 2007 to a Saudi-run rehabilitation program. He disappeared from Saudi Arabia and emerged in Yemen, and he is considered by many to be the rising star of the local movement. Mr. Shihri had traveled to Afghanistan in 2001 and was apparently wounded there, and he was captured crossing back into Pakistan in December of that year.
Another Guantánamo detainee, also captured in Pakistan in 2001 and released to a Saudi rehabilitation program, is Ibrahim Suleiman al-Rubaysh, 30, a Saudi who also disappeared and is now described as the mufti, or theological guide, to Al Qaeda of the Arabian Peninsula.
Anwar al-Awlaki, an American-born, English-speaking Internet imam of Al Qaeda here, returned to Yemen, his family’s home, in 2004. He was arrested in 2006 on security charges and was released in December 2007 after 18 months in prison. He then went to Britain and is believed to have returned to Yemen last spring.
Skip to next paragraph
Multimedia
Internal Conflicts and the Growing Influence of Al QaedaGraphic
Internal Conflicts and the Growing Influence of Al Qaeda
Related
Obama Says Al Qaeda in Yemen Planned Bombing Plot, and He Vows Retribution (January 3, 2010)
After Failed Attack, Britain Turns Focus to Yemen (January 2, 2010)
While Yemen has chased two homegrown rebellions, over the last year the Qaeda cell here has begun sharing resources across borders and has been spurred on to more ambitious attacks by a leadership strengthened by released Qaeda detainees and returning fighters from Iraq.
The priorities of the Yemeni government have been fighting a war in the north and combating secessionists across the south. In the interim, Al Qaeda has flourished in the large, lawless and rugged tribal territories of Yemen, creating training camps, attacking Western targets and receiving increasing popular sympathy, Yemeni and American officials say.
Al Qaeda’s growing profile in Yemen became clear after a Nigerian man, Umar Farouk Abdulmutallab, 23, was able to overstay his visa here by several months, connect with Qaeda militants and leave this country with a bomb sewn into his underwear.
In his weekly address on Saturday, President Obama for the first time directly blamed Al Qaeda in the Arabian Peninsula for the bombing attempt and said that fighting the group would be a high priority. “In recent years, they have bombed Yemeni government facilities and Western hotels,” he said, adding, “So as president, I’ve made it a priority to strengthen our partnership with the Yemeni government.”
The core of the group here is still thought to be small, perhaps no more than 200 people. But the group has the important advantage of being part of a larger, regional structure, having merged a year ago with the Saudi branch of Al Qaeda to form Al Qaeda in the Arabian Peninsula. And it has been able to originate fairly sophisticated operations here, in Saudi Arabia and now on an airliner headed for Detroit.
Though Yemen played an early role in Al Qaeda’s history — it is Osama bin Laden’s ancestral homeland, and it was the staging ground for the 2000 attack on the American destroyer Cole — the key chapters in the story of Al Qaeda’s rise here have been written recently by leaders who were released from detention at Guantánamo Bay, Cuba, escaped from Yemeni prisons or were drawn to shelter here by common cause and ideology.
Those men have transformed and reoriented a weak local Qaeda cell that had made a kind of peace with the government after 2003. In the year since the Saudi and Yemeni branches merged, Al Qaeda has taken full advantage of the government’s preoccupation with the rebellions, building support from the tribal structures and traditions in Yemen’s poor and lawless territories.
One big moment came in February 2006, when 23 imprisoned men suspected of being members of Al Qaeda escaped from a high-security prison, reportedly with the aid of some Yemeni security forces. All but three or four of the men were eventually recaptured or killed by Yemeni security forces. But one prisoner, Nasser al-Wuhayshi, became leader of the Qaeda cell in Yemen and moved to reorganize it, focusing it on attacks against nearby Western targets. Another prisoner, Qassim al-Raimi, became the military commander.
The next year, Mr. Wuhayshi found a deputy and, perhaps, a rival for leadership, Said Ali al-Shihri, 36, a Saudi citizen. He was released from six years’ detention in Guantánamo Bay in December 2007 to a Saudi-run rehabilitation program. He disappeared from Saudi Arabia and emerged in Yemen, and he is considered by many to be the rising star of the local movement. Mr. Shihri had traveled to Afghanistan in 2001 and was apparently wounded there, and he was captured crossing back into Pakistan in December of that year.
Another Guantánamo detainee, also captured in Pakistan in 2001 and released to a Saudi rehabilitation program, is Ibrahim Suleiman al-Rubaysh, 30, a Saudi who also disappeared and is now described as the mufti, or theological guide, to Al Qaeda of the Arabian Peninsula.
Anwar al-Awlaki, an American-born, English-speaking Internet imam of Al Qaeda here, returned to Yemen, his family’s home, in 2004. He was arrested in 2006 on security charges and was released in December 2007 after 18 months in prison. He then went to Britain and is believed to have returned to Yemen last spring.
U.S. Sees an Opportunity to Press Iran on Nuclear Fuel
WASHINGTON — As President Obama faces pressure to back up his year-end ultimatum for diplomatic progress with Iran, the administration says that domestic unrest and signs of unexpected trouble in Tehran’s nuclear program make its leaders particularly vulnerable to strong and immediate new sanctions.
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European Pressphoto Agency
Glyn Davies, right, the United States ambassador to the International Atomic Energy Agency, with Mohamed ElBaradei, the agency's departing director, in November in Vienna.
Related
Iran Gives West One-Month ‘Ultimatum’ to Accept Nuclear Counterproposal (January 3, 2010)
More on Iran's Nuclear Program
The long-discussed sanctions would initiate the latest phase in a strategy to force Iran to comply with United Nations demands to halt production of nuclear fuel. It comes as the administration has completed a fresh review of Iran’s nuclear progress.
In interviews, Mr. Obama’s strategists said that while Iran’s top political and military leaders remained determined to develop nuclear weapons, they were distracted by turmoil in the streets and political infighting, and that the drive to produce nuclear fuel appeared to have faltered in recent months.
The White House wants to focus the new sanctions on the Islamic Revolutionary Guards Corps, the military force believed to run the nuclear weapons effort. That force has also played a crucial role in the repression of antigovernment demonstrators since the disputed presidential election in June.
Although repeated rounds of sanctions over many years have not dissuaded Iran from pursuing nuclear technology, an administration official involved in the Iran policy said the hope was that the current troubles “give us a window to impose the first sanctions that may make the Iranians think the nuclear program isn’t worth the price tag.”
While outsiders have a limited view of Iran’s nuclear program, the Obama administration officials said they believed that the bomb-development effort was seriously derailed by the exposure three months ago of the country’s secret enrichment plant under construction near the holy city of Qum. Exposure of the site deprived Iran of its best chance of covertly producing the highly enriched uranium needed to make fuel for nuclear weapons.
In addition, international nuclear inspectors report that at Iran’s plant in Natanz, where thousands of centrifuges spin to enrich uranium for nuclear fuel, the number of the machines that are currently operating has dropped by 20 percent since the summer, a decline nuclear experts attribute to technical problems. Others, including some European officials, believe the problems may have been accentuated by a series of covert efforts by the West to undermine Iran’s program, including sabotage on its imported equipment and infrastructure.
These factors have led the administration’s policy makers to lengthen their estimate of how long it would take Iran to accomplish what nuclear experts call “covert breakout” — the ability to secretly produce a workable weapon.
“For now, the Iranians don’t have a credible breakout option, and we don’t think they will have one for at least 18 months, maybe two or three years,” said one senior administration official at the center of the White House Iran strategy. The administration has told allies that the longer time frame would allow the sanctions to have an effect before Iran could develop its nuclear ability.
Another administration official said that Israeli officials, while still publicly hinting that they might take military action against Iran’s nuclear facilities, “now feel that what’s happening in Iran makes the country vulnerable to real sanctions,” and might give Mr. Obama more time to persuade China and Russia to go along. A senior Israeli diplomat in Washington said that in back-channel conversations “Obama has convinced us that it’s worth trying the sanctions, at least for a few months.”
Sanctions will be a difficult balancing act for the administration, since it acknowledges that three previous rounds of sanctions have failed to deter Iran, and it also wants to avoid angering Iranians protesting in the streets by depriving them of Western goods. That is why the administration is focusing on the Revolutionary Guards, who are increasingly detested by the protesters, and who have built up billions of dollars of business interests in telecommunications, oil and construction.
The administration aims to get Arab and Asian nations to join Europe in cutting off financial transactions with front companies for the Revolutionary Guards.
China and Russia have been particularly reluctant and could seize on the Obama administration’s view of Iran’s nuclear troubles to resist Mr. Obama’s argument that new sanctions are needed now to punish Iran’s defiance of the United Nations Security Council mandate that it cease enriching uranium.
Iran’s insistence that its nuclear program is for civilian purposes only is roundly rejected by Western officials and, in internal reports, by international nuclear inspectors. Yet Washington’s assessments of how much progress Iran has made toward a weapon have varied greatly over the past two years, partly a reflection of how little is known about the inner workings of the country’s nuclear programs.
Mr. Obama’s top advisers say they no longer believe the key finding of a much disputed National Intelligence Estimate about Iran, published a year before President George W. Bush left office, which said that Iranian scientists ended all work on designing a nuclear warhead in late 2003.
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Glyn Davies, right, the United States ambassador to the International Atomic Energy Agency, with Mohamed ElBaradei, the agency's departing director, in November in Vienna.
Related
Iran Gives West One-Month ‘Ultimatum’ to Accept Nuclear Counterproposal (January 3, 2010)
More on Iran's Nuclear Program
The long-discussed sanctions would initiate the latest phase in a strategy to force Iran to comply with United Nations demands to halt production of nuclear fuel. It comes as the administration has completed a fresh review of Iran’s nuclear progress.
In interviews, Mr. Obama’s strategists said that while Iran’s top political and military leaders remained determined to develop nuclear weapons, they were distracted by turmoil in the streets and political infighting, and that the drive to produce nuclear fuel appeared to have faltered in recent months.
The White House wants to focus the new sanctions on the Islamic Revolutionary Guards Corps, the military force believed to run the nuclear weapons effort. That force has also played a crucial role in the repression of antigovernment demonstrators since the disputed presidential election in June.
Although repeated rounds of sanctions over many years have not dissuaded Iran from pursuing nuclear technology, an administration official involved in the Iran policy said the hope was that the current troubles “give us a window to impose the first sanctions that may make the Iranians think the nuclear program isn’t worth the price tag.”
While outsiders have a limited view of Iran’s nuclear program, the Obama administration officials said they believed that the bomb-development effort was seriously derailed by the exposure three months ago of the country’s secret enrichment plant under construction near the holy city of Qum. Exposure of the site deprived Iran of its best chance of covertly producing the highly enriched uranium needed to make fuel for nuclear weapons.
In addition, international nuclear inspectors report that at Iran’s plant in Natanz, where thousands of centrifuges spin to enrich uranium for nuclear fuel, the number of the machines that are currently operating has dropped by 20 percent since the summer, a decline nuclear experts attribute to technical problems. Others, including some European officials, believe the problems may have been accentuated by a series of covert efforts by the West to undermine Iran’s program, including sabotage on its imported equipment and infrastructure.
These factors have led the administration’s policy makers to lengthen their estimate of how long it would take Iran to accomplish what nuclear experts call “covert breakout” — the ability to secretly produce a workable weapon.
“For now, the Iranians don’t have a credible breakout option, and we don’t think they will have one for at least 18 months, maybe two or three years,” said one senior administration official at the center of the White House Iran strategy. The administration has told allies that the longer time frame would allow the sanctions to have an effect before Iran could develop its nuclear ability.
Another administration official said that Israeli officials, while still publicly hinting that they might take military action against Iran’s nuclear facilities, “now feel that what’s happening in Iran makes the country vulnerable to real sanctions,” and might give Mr. Obama more time to persuade China and Russia to go along. A senior Israeli diplomat in Washington said that in back-channel conversations “Obama has convinced us that it’s worth trying the sanctions, at least for a few months.”
Sanctions will be a difficult balancing act for the administration, since it acknowledges that three previous rounds of sanctions have failed to deter Iran, and it also wants to avoid angering Iranians protesting in the streets by depriving them of Western goods. That is why the administration is focusing on the Revolutionary Guards, who are increasingly detested by the protesters, and who have built up billions of dollars of business interests in telecommunications, oil and construction.
The administration aims to get Arab and Asian nations to join Europe in cutting off financial transactions with front companies for the Revolutionary Guards.
China and Russia have been particularly reluctant and could seize on the Obama administration’s view of Iran’s nuclear troubles to resist Mr. Obama’s argument that new sanctions are needed now to punish Iran’s defiance of the United Nations Security Council mandate that it cease enriching uranium.
Iran’s insistence that its nuclear program is for civilian purposes only is roundly rejected by Western officials and, in internal reports, by international nuclear inspectors. Yet Washington’s assessments of how much progress Iran has made toward a weapon have varied greatly over the past two years, partly a reflection of how little is known about the inner workings of the country’s nuclear programs.
Mr. Obama’s top advisers say they no longer believe the key finding of a much disputed National Intelligence Estimate about Iran, published a year before President George W. Bush left office, which said that Iranian scientists ended all work on designing a nuclear warhead in late 2003.
Harley-Davidson revs up to lure Indian fans
For most Indians, the term “chopped hog” would probably summon up visions of roast suckling pig in Goa, one of the country’s few pork-eating states.
But recently, bike fans in Mumbai’s gritty former textile mills district got a taste of what American author Hunter S. Thompson meant by the term in his book, Hell’s Angels.
Harley
Hell of a ride: Harley allowed Indian enthusiasts to test drive some of its ‘hogs’
EDITOR’S CHOICE
India delays mobile number portability - Dec-31
India mines riches as west’s back office - Dec-29
Two-wheelers make up ground on cars - Nov-25
In a publicity event before the formal opening of sales in India next year, US classic motorcycle maker Harley-Davidson turned over a collection of its “hogs” – the CVO, Touring, Softail, Dyna and Sportster models – to local enthusiasts for test rides.
“Maybe today a young Indian who sees a Harley can’t afford it,” Anoop Prakash, Harley-Davidson’s India director, says of the bike’s starting price of Rs700,000 ($15,000). “But if he falls in love with the bike now, he’ll buy it when he can.”
Harley-Davidson is the latest of the world’s motorcycle brands to target the Indian consumer. The country is the world’s second-largest two-wheeler market after China, with sales of 3.52m units in the first half of the fiscal year ending next March, up 15 per cent against a year earlier.
While Harley will appeal to the richest urban riders, the bulk of the Indian market – and the attraction for mainstream motorcycle companies – lies at the lower end of the consumer pyramid, particularly in the vast rural hinterlands.
Harley’s motorbikes serve every possible transport function, from commuter vehicle and family car to beast of burden and even a gift as part of a dowry.
The market leader is Hero Honda, 26 per cent owned by India’s Munjal business family and 26 per cent by Japan’s Honda.
The company, which began business in India in 1983 and today makes more than half the country’s motorcycles, has had a blockbuster start to the financial year in spite of the downturn, with sales up 21 per cent year-on-year between April and November to 3.04m units.
Its main competitor is homegrown motorcycle producer, Bajaj Auto, whose market share in November reached nearly 27 per cent, up from about 23 per cent earlier in the year, on the back of sales of new models. Bajaj sold 11 per cent more motorcycles between April and November against a year earlier.
Rural areas today account for about 40 per cent of Hero Honda’s sales, a number that is expected to rise steadily beyond 50 per cent in coming years as rural incomes increase, Pawan Munjal, the chief executive of Hero Honda, said.
With motorcycle penetration in rural India below 7 per cent of the market compared with about 25 per cent in urban areas, there is plenty of room for growth.
“The sales ratio between rural and urban sales is slowly inching up, and I do believe the bigger growth will keep coming from the rural market,” Mr Munjal told the Financial Times.
Some analysts believe a poor monsoon this year could curb rural spending, with farmers preferring to put on hold discretionary purchases such as motorcycles until the fate of their crops becomes clear.
“Farmers are indeed upgrading from bicycles to motorcycles. Even those who don’t need motorcycles are buying them. With the bad monsoon, they may put this on hold,” HSBC analyst Sachin Gupta said in a recent report.
But farmers still have extra money in their pockets after a $16bn government farm loan waiver.
The government has also increased its support prices for crops by 11 per cent, a move that should offset the loss of income from the monsoon, according to Jatin Chawla, an analyst at IIFL, a Mumbai-based brokerage.
The other much-touted threat to India’s motorcycle market is the emerging “ultra low-cost car” segment, led by the Tata Nano, with a starting price of about Rs100,000.
Tata Group chairman, Ratan Tata, says the Nano’s direct target market is motorcycle users. But analysts say motorcycles are still far cheaper to run. Not surprisingly, Hero Honda’s Mr Munjal is also a sceptic.
“The Nano is priced closer to premium end bikes, and the premium end bike user is not a Nano user,” says Mr Munjal.
Harley-Davidson’s Mr Prakash is not targeting Nano buyers. With other high-end motorcycles making inroads into India, such as Italy’s Ducati, he is keen to spread the religion.
Harley plans to open five dealerships in the country’s most prosperous cities and states next year.
Marc Billimoria, a banker and one of the test riders, said: “We’ve never had something like this in India ... it’s a dream come true.”
But recently, bike fans in Mumbai’s gritty former textile mills district got a taste of what American author Hunter S. Thompson meant by the term in his book, Hell’s Angels.
Harley
Hell of a ride: Harley allowed Indian enthusiasts to test drive some of its ‘hogs’
EDITOR’S CHOICE
India delays mobile number portability - Dec-31
India mines riches as west’s back office - Dec-29
Two-wheelers make up ground on cars - Nov-25
In a publicity event before the formal opening of sales in India next year, US classic motorcycle maker Harley-Davidson turned over a collection of its “hogs” – the CVO, Touring, Softail, Dyna and Sportster models – to local enthusiasts for test rides.
“Maybe today a young Indian who sees a Harley can’t afford it,” Anoop Prakash, Harley-Davidson’s India director, says of the bike’s starting price of Rs700,000 ($15,000). “But if he falls in love with the bike now, he’ll buy it when he can.”
Harley-Davidson is the latest of the world’s motorcycle brands to target the Indian consumer. The country is the world’s second-largest two-wheeler market after China, with sales of 3.52m units in the first half of the fiscal year ending next March, up 15 per cent against a year earlier.
While Harley will appeal to the richest urban riders, the bulk of the Indian market – and the attraction for mainstream motorcycle companies – lies at the lower end of the consumer pyramid, particularly in the vast rural hinterlands.
Harley’s motorbikes serve every possible transport function, from commuter vehicle and family car to beast of burden and even a gift as part of a dowry.
The market leader is Hero Honda, 26 per cent owned by India’s Munjal business family and 26 per cent by Japan’s Honda.
The company, which began business in India in 1983 and today makes more than half the country’s motorcycles, has had a blockbuster start to the financial year in spite of the downturn, with sales up 21 per cent year-on-year between April and November to 3.04m units.
Its main competitor is homegrown motorcycle producer, Bajaj Auto, whose market share in November reached nearly 27 per cent, up from about 23 per cent earlier in the year, on the back of sales of new models. Bajaj sold 11 per cent more motorcycles between April and November against a year earlier.
Rural areas today account for about 40 per cent of Hero Honda’s sales, a number that is expected to rise steadily beyond 50 per cent in coming years as rural incomes increase, Pawan Munjal, the chief executive of Hero Honda, said.
With motorcycle penetration in rural India below 7 per cent of the market compared with about 25 per cent in urban areas, there is plenty of room for growth.
“The sales ratio between rural and urban sales is slowly inching up, and I do believe the bigger growth will keep coming from the rural market,” Mr Munjal told the Financial Times.
Some analysts believe a poor monsoon this year could curb rural spending, with farmers preferring to put on hold discretionary purchases such as motorcycles until the fate of their crops becomes clear.
“Farmers are indeed upgrading from bicycles to motorcycles. Even those who don’t need motorcycles are buying them. With the bad monsoon, they may put this on hold,” HSBC analyst Sachin Gupta said in a recent report.
But farmers still have extra money in their pockets after a $16bn government farm loan waiver.
The government has also increased its support prices for crops by 11 per cent, a move that should offset the loss of income from the monsoon, according to Jatin Chawla, an analyst at IIFL, a Mumbai-based brokerage.
The other much-touted threat to India’s motorcycle market is the emerging “ultra low-cost car” segment, led by the Tata Nano, with a starting price of about Rs100,000.
Tata Group chairman, Ratan Tata, says the Nano’s direct target market is motorcycle users. But analysts say motorcycles are still far cheaper to run. Not surprisingly, Hero Honda’s Mr Munjal is also a sceptic.
“The Nano is priced closer to premium end bikes, and the premium end bike user is not a Nano user,” says Mr Munjal.
Harley-Davidson’s Mr Prakash is not targeting Nano buyers. With other high-end motorcycles making inroads into India, such as Italy’s Ducati, he is keen to spread the religion.
Harley plans to open five dealerships in the country’s most prosperous cities and states next year.
Marc Billimoria, a banker and one of the test riders, said: “We’ve never had something like this in India ... it’s a dream come true.”
Friday, January 1, 2010
Asia Stocks Rise Second Week for Biggest Annual Gain Since 1993
Jan. 2 (Bloomberg) -- Asian stocks rose for the second week, capping the MSCI Asia Pacific Index’s biggest annual gain since 2003, after China raised its economic growth figures and Japan said industrial production increased. Hitachi Ltd., Japan’s fourth-largest company by sales, added 4 percent. Suning Appliance Co., China’s biggest home- appliance retailer by market value, climbed 5.9 percent. Korea Electric Power Corp. jumped 4.1 percent in Seoul after leading a group that won the United Arab Emirates’ first order for a nuclear-power plant.
“The global economy is just about bottoming out,” said Masaru Hamasaki, chief strategist at Tokyo-based Toyota Asset Management Co., which oversees the equivalent of $14 billion. “I don’t expect huge economic growth, but I do see things recovering.”
The MSCI Asia Pacific Index rose 0.7 percent to 120.45 in a holiday-shortened week. The gauge climbed 34 percent in 2009, its biggest annual gain since 2003, on signs government spending and lower interest rates are bolstering economies.
Japan’s Nikkei 225 Stock Average rose 0.5 percent in the country’s three-day trading week, after factory output increased in November from October and the government said on Dec. 25 that gross domestic product will probably expand 1.4 percent in the year starting April 1.
The Nikkei 225 has plunged 73 percent since it climbed to an intraday record of 38,957.44 on the final business day of 1989, the world’s worst performer in the period. Japan’s broader Topix index rose 5.6 percent this year, the lowest return among benchmark equity gauges for the world’s 10 largest markets.
Hong Kong’s Hang Seng Index and Australia’s S&P/ASX 200 Index both climbed 1.7 percent this week.
Growth Estimate
The Shanghai Composite Index advanced 4.3 percent this week as China raised its 2008 growth estimate to 9.6 percent from 9 percent on Dec. 25, and said 2009’s quarterly figures will also increase.
Japan’s Cabinet Office said Dec. 25 that the economy will expand for the first time in three years, while the Trade Ministry said on Dec. 28 factory output increased 2.6 percent in November from October. The median estimate of 24 economists surveyed by Bloomberg News was for a 2.5 percent gain.
Hitachi climbed 4 percent to 284 yen. The maker of washing machines and nuclear reactors will sign a contract valued at as much as 1 trillion yen ($11 billion) early in 2010 for a high- speed train project in the U.K., the Sankei newspaper reported, without citing anyone.
Consumer Stocks
Suning Appliance Co., China’s biggest home appliance retailer by market value, added 5.6 percent to 20.78 yuan. GD Midea Holding Co., the nation’s second-biggest publicly traded appliance maker, gained 2.4 percent to 23.30 yuan.
“Consumer stocks are good bets as they will receive most of the government support next year,” Wei Wei, an analyst at West China Securities Co. in Shanghai, said Dec. 28. Central bank Governor Zhou Xiaochuan said on Dec. 31 the People’s Bank of China will maintain a “moderately loose” monetary policy.
The Shanghai Composite Index rallied 80 percent in 2009 as government spending and a credit boom helped the nation’s economy recover from its steepest slump in more than a decade.
Korea Electric jumped 4.1 percent to 34,100 won in Seoul. Its partners in the nuclear-power bid also gained, with Doosan Heavy Industries & Construction Co. soaring 9.7 percent to 81,100 won and Hyundai Engineering & Construction Co. climbing 4.3 percent to 70,900 won.
“We will probably start to see more business deals like this one, bit by bit,” said Toyota Asset Management’s Hamasaki.
The MSCI Asia Pacific Index’s 2009 advance has outpaced gains of 23 percent by the S&P 500 in the U.S. and 28 percent for the Dow Jones Stoxx 600 Index in Europe. Stocks in the MSCI gauge trade at an average of 23 times estimated earnings, compared with 18 times for the Standard and Poor’s 500 Index in the U.S. and 16 times for the Dow Jones Stoxx 600 Index in Europe.
Global Rally
The 2009 gain in Asian stocks is part of a global rally that has boosted the MSCI World Index by 27 percent, the steepest increase since 2003. The gauge plunged 42 percent in 2008, the most since inception 40 years ago, as mounting losses from the collapse of the U.S. subprime mortgage market and the bankruptcy of Lehman Brothers Holdings Inc. led investors to exit equities.
In October, the International Monetary Fund estimated global growth of 3.1 percent in 2010, compared with an estimated 1.1 percent contraction in 2009.
“Investors are generally a lot more relaxed right now,” Prasad Patkar, who helps manage about $1.6 billion at Platypus Asset Management in Sydney, said Dec. 31. “The sixty-four- million dollar question is: what happens next year where we could have a much stronger economic backdrop but tighter liquidity conditions? Markets may well end up consolidating gains in 2010 rather than making another big move upwards.”
Among stocks that fell in the week were Japan Airlines Corp. and Asiana Airlines Inc., both of which plunged on debt concerns.
Japan Airlines, Asia’s biggest carrier by sales, tumbled 31 percent to 67 yen, the lowest close since the stock began trading in 2002, on speculation it will file for bankruptcy. Asiana Airlines lost 13 percent to 3,645 won in Seoul after the carrier’s parent said it may restructure debt at affiliates.
“The global economy is just about bottoming out,” said Masaru Hamasaki, chief strategist at Tokyo-based Toyota Asset Management Co., which oversees the equivalent of $14 billion. “I don’t expect huge economic growth, but I do see things recovering.”
The MSCI Asia Pacific Index rose 0.7 percent to 120.45 in a holiday-shortened week. The gauge climbed 34 percent in 2009, its biggest annual gain since 2003, on signs government spending and lower interest rates are bolstering economies.
Japan’s Nikkei 225 Stock Average rose 0.5 percent in the country’s three-day trading week, after factory output increased in November from October and the government said on Dec. 25 that gross domestic product will probably expand 1.4 percent in the year starting April 1.
The Nikkei 225 has plunged 73 percent since it climbed to an intraday record of 38,957.44 on the final business day of 1989, the world’s worst performer in the period. Japan’s broader Topix index rose 5.6 percent this year, the lowest return among benchmark equity gauges for the world’s 10 largest markets.
Hong Kong’s Hang Seng Index and Australia’s S&P/ASX 200 Index both climbed 1.7 percent this week.
Growth Estimate
The Shanghai Composite Index advanced 4.3 percent this week as China raised its 2008 growth estimate to 9.6 percent from 9 percent on Dec. 25, and said 2009’s quarterly figures will also increase.
Japan’s Cabinet Office said Dec. 25 that the economy will expand for the first time in three years, while the Trade Ministry said on Dec. 28 factory output increased 2.6 percent in November from October. The median estimate of 24 economists surveyed by Bloomberg News was for a 2.5 percent gain.
Hitachi climbed 4 percent to 284 yen. The maker of washing machines and nuclear reactors will sign a contract valued at as much as 1 trillion yen ($11 billion) early in 2010 for a high- speed train project in the U.K., the Sankei newspaper reported, without citing anyone.
Consumer Stocks
Suning Appliance Co., China’s biggest home appliance retailer by market value, added 5.6 percent to 20.78 yuan. GD Midea Holding Co., the nation’s second-biggest publicly traded appliance maker, gained 2.4 percent to 23.30 yuan.
“Consumer stocks are good bets as they will receive most of the government support next year,” Wei Wei, an analyst at West China Securities Co. in Shanghai, said Dec. 28. Central bank Governor Zhou Xiaochuan said on Dec. 31 the People’s Bank of China will maintain a “moderately loose” monetary policy.
The Shanghai Composite Index rallied 80 percent in 2009 as government spending and a credit boom helped the nation’s economy recover from its steepest slump in more than a decade.
Korea Electric jumped 4.1 percent to 34,100 won in Seoul. Its partners in the nuclear-power bid also gained, with Doosan Heavy Industries & Construction Co. soaring 9.7 percent to 81,100 won and Hyundai Engineering & Construction Co. climbing 4.3 percent to 70,900 won.
“We will probably start to see more business deals like this one, bit by bit,” said Toyota Asset Management’s Hamasaki.
The MSCI Asia Pacific Index’s 2009 advance has outpaced gains of 23 percent by the S&P 500 in the U.S. and 28 percent for the Dow Jones Stoxx 600 Index in Europe. Stocks in the MSCI gauge trade at an average of 23 times estimated earnings, compared with 18 times for the Standard and Poor’s 500 Index in the U.S. and 16 times for the Dow Jones Stoxx 600 Index in Europe.
Global Rally
The 2009 gain in Asian stocks is part of a global rally that has boosted the MSCI World Index by 27 percent, the steepest increase since 2003. The gauge plunged 42 percent in 2008, the most since inception 40 years ago, as mounting losses from the collapse of the U.S. subprime mortgage market and the bankruptcy of Lehman Brothers Holdings Inc. led investors to exit equities.
In October, the International Monetary Fund estimated global growth of 3.1 percent in 2010, compared with an estimated 1.1 percent contraction in 2009.
“Investors are generally a lot more relaxed right now,” Prasad Patkar, who helps manage about $1.6 billion at Platypus Asset Management in Sydney, said Dec. 31. “The sixty-four- million dollar question is: what happens next year where we could have a much stronger economic backdrop but tighter liquidity conditions? Markets may well end up consolidating gains in 2010 rather than making another big move upwards.”
Among stocks that fell in the week were Japan Airlines Corp. and Asiana Airlines Inc., both of which plunged on debt concerns.
Japan Airlines, Asia’s biggest carrier by sales, tumbled 31 percent to 67 yen, the lowest close since the stock began trading in 2002, on speculation it will file for bankruptcy. Asiana Airlines lost 13 percent to 3,645 won in Seoul after the carrier’s parent said it may restructure debt at affiliates.
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