India’s bond yields are poised to rise for a third consecutive quarter as the central bank struggles to cool inflation.
The benchmark 10-year yield may climb nine basis points to 8.19 percent by the end of March, after increasing 18 basis points since Dec. 31, according to the median estimate of five primary dealers in a Bloomberg survey. Kaushik Basu, the finance ministry’s chief economic adviser, said in a Jan. 5 interview that the inflation rate is “too high,” and Masahiko Takeda, the International Monetary Fund’s India mission chief, said in a statement yesterday interest rates may need to be increased.
Finance Minister Pranab Mukherjee said last month wholesale prices will be rising at a 6.5 percent pace by the end of March, above a previous estimate of 6 percent, because of surging food and oil prices. Yields on India’s 10-year government bonds are 62 basis points above inflation, compared with 330 in the U.S. and 111 in Japan.
“Commodity prices are at significantly high levels, and we haven’t seen the complete pass-through of that in inflation,” Nirav Dalal, Mumbai-based head of debt capital markets at Yes Bank Ltd., partly owned by Rabobank Nederland NV and HSBC Holdings Plc, said in an interview on Jan. 3. “Bond yields at current levels don’t adequately capture that.”
Repurchase Rate
Food prices rose at an 18.3 percent rate in the week ended Dec. 25, the most since July, according to a commerce ministry report issued yesterday, prompting Mukherjee to say the acceleration is an “area of concern.” The data threaten progress made in curbing wholesale prices, which India uses as its barometer for inflation. Gains in wholesale prices slowed to an 11-month low of 7.48 percent in November. Food makes up about 14 percent of the benchmark index.
The Reserve Bank of India lifted the repurchase rate by 150 basis points last year to contain the surge in prices. The repurchase rate, at which lenders borrow from the central bank, may rise 25 basis points to 6.5 percent at the next review on Jan. 25, according to 11 of 16 economists in a Bloomberg survey. The rest forecast no change.
“The way inflation is, even the finance ministry people are changing their stance,” Pradeep Madhav, managing director at the Mumbai-based Securities Trading Corp. of India, said in an interview on Jan. 3. “I would think there would be a rate hike in January.” He predicted the benchmark yield will be 8.15 percent by the end of March.
Bond Underperformance
Of the other primary dealers surveyed, Axis Bank Ltd. and Royal Bank of Scotland NV concurred with Securities Trading Corp.’s assessment. Both ICICI Securities Primary Dealership Ltd. and IDBI Gilts Ltd. forecast the yield will increase to 8.25 percent.
The 10-year yield jumped 29 basis points in the third quarter of 2010 and eight basis points in the fourth quarter.
Investors would still earn an annualized return of 5.2 percent if the prediction by the primary dealers proves accurate, according to Bloomberg data. That would compare with the 5.3 percent the securities gained during the past 12 months, according to indexes compiled by HSBC Holdings Plc. Indonesian securities handed investors 24 percent, the most in the region, while Philippine notes delivered 12.5 percent.
Rupee’s Gain
India’s 10-year bond yield is the highest among Asia’s 10 biggest economies. The comparable rates are 7.66 percent in Indonesia and 3.79 percent in China. The real, or inflation- adjusted, yield in Indonesia is 71 basis points and a negative 131 in China. The difference in rates between India’s debt due in a decade and similar-maturity U.S. Treasuries was 469 basis points today, up 89 basis points from last year’s low.
India’s rupee rose 0.5 percent last quarter, the third- worst performance among Asia’s 10 most-traded currencies, as rising commodities prices aggravated food inflation. The currency declined 0.3 percent to 45.39 per dollar today.
The cost of protecting the debt of government-owned State Bank of India, which some investors perceive as a proxy for the nation, has increased 36 basis points since the start of 2010 to 154, according to CMA prices. Credit-default swaps pay the buyer face value in exchange for the underlying securities or the cash equivalent should a government or company fail to adhere to its debt agreements. A basis point equals $1,000 annually on a contract protecting $10 million of debt.
Borrowing Target
The outlook for bonds beyond March will rest partly on the finance ministry’s borrowing plan, according to Dhawal Dalal, head of fixed-income investments in Mumbai at DSP Blackrock Investment Managers Pvt. The federal government’s borrowing target in the current financial year is 4.47 trillion rupees ($98.5 billion), compared with a record 4.51 trillion rupees in the previous fiscal year.
“The key question the market will have to ask is ‘what the government’s expenditure will be next fiscal year?’,” Dalal said in an interview on Dec. 3. “The borrowing program will be an important factor.”
Basu, the chief economic adviser who studied at the London School of Economics, said in his interview that policy makers will withdraw fiscal stimulus to tame inflation.
“You will see steps being taken this year, next year and maybe the year after,” Basu, 58, said in the interview ahead of next month’s budget presentation for the next financial year by Mukherjee.
The IMF’s Takeda said there is “a possibility” that further monetary tightening may be needed to contain inflation. Those comments, made in a video on the IMF’s website, came after the fund completed an annual review of India’s economy.
The Reserve Bank, which raised borrowing costs the most of any monetary authority in Asia last year, still isn’t finished with its task, according to ICICI Securities Primary Dealership.
“Inflation is still higher than the central bank’s comfort zone,” Prasanna Ananthasubramaniam, the Mumbai-based chief economist at the unit of India’s second-biggest lender, said in an interview on Jan. 5. “The central bank will still be on their toes to tackle it.”
Friday, January 7, 2011
Oil Tankers Sail to Indian West Coast From Iran Amid Gridlock Over Payment
Three crude oil tankers from Iran, OPEC’s second-biggest oil producer, sailed for India’s west coast in January while the nations discussed ways to resolve a gridlock over payments for the fuel.
The Darab, owned by National Iranian Tanker Co., was headed this week to the western Indian port of Vadinar, where state-run Indian Oil Corp., the nation’s biggest refiner, and Essar Oil Ltd. take deliveries of crude, according to ship transmissions captured by AISLIVE on Bloomberg.
The Darab, with the capacity to carry 345,000 metric tons, departed from Kharg Island, Iran’s main crude-export terminal, Bloomberg data show.
Indian refiners need to find alternative means to pay for Iranian crude after the Reserve Bank of India on Dec. 27 said companies must settle trades with the Persian Gulf state outside the Asian Clearing Union, a regional payment arrangement. This dismantled a mechanism used to complete payments for oil in euros and dollars.
Two ships, the Remi and Fair Spirit, with a combined cargo of 180,000 tons, are scheduled to reach Mangalore in western India today, according to vessel transmissions and data from Clarkson Research Services Ltd., a unit of the world’s biggest shipbroker.
The Remi, which can transport about 105,000 tons, was chartered by state-run Mangalore Refinery & Petrochemicals Ltd. or MRPL to transport 90,000 tons from the Arabian Gulf in late December, according to data from Clarkson.
Ship Charters
MRPL, a unit of India’s biggest energy explorer Oil & Natural Gas Corp., buys about 7 million tons of crude from Iran every year, making it the South Asian nation’s biggest buyer of oil from the Persian Gulf state, Managing Director U.K. Basu said Dec. 30.
The Fair Spirit, which can carry about 100,000 tons, was chartered by MRPL to transport 90,000 tons to Mangalore from Kharg Island in early January, according to Clarkson data.
The Remi and Fair Spirit have been chartered by MRPL to also load 180,000 tons from Kharg Island and the Arabian Gulf in mid-January, the data show.
Indian Oil and state-run rival Hindustan Petroleum Corp. will get crude from Iran on credit this month, two people with direct knowledge of the matter said Jan. 4.
Crude on Credit
Iran will supply Hindustan Petroleum, India’s third-largest state refiner, with 1 million barrels on 90 days of credit, one of the people said. The refiners are exploring the possibility of paying for Iranian crude in yen, dirhams or rials, the people said.
Hindustan Petroleum rose as much as 0.9 percent to 390.90 rupees and was trading at 389.15 rupees in Mumbai at 10 a.m. local time. Indian Oil gained as much as 1.2 percent. MRPL fell 0.2 percent after climbing as much as 0.5 percent.
Oil Secretary S. Sundareshan said on Dec. 30 that India imports about 21 million tons of crude from Iran annually. The Middle East nation is India’s biggest supplier after Saudi Arabia, Oil Minister Murli Deora said in parliament April 15.
The United Nations in June stepped up punitive measures against Iran over its nuclear ambitions, applying a fourth round of sanctions. The U.S. and European Union later imposed additional restrictions. Iran says it is enriching uranium for power generation.
The U.S. has increased pressure on Iran’s banks, the country’s national security leadership and on companies that invest in Iran’s energy industry.
Iran pumped 3.7 million barrels a day in December, making it the second-largest producer in the Organization of Petroleum Exporting Countries, according to a Bloomberg survey. The other countries in the 12-member group are Algeria, Angola, Ecuador, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, United Arab Emirates and Venezuela.
The Darab, owned by National Iranian Tanker Co., was headed this week to the western Indian port of Vadinar, where state-run Indian Oil Corp., the nation’s biggest refiner, and Essar Oil Ltd. take deliveries of crude, according to ship transmissions captured by AISLIVE on Bloomberg.
The Darab, with the capacity to carry 345,000 metric tons, departed from Kharg Island, Iran’s main crude-export terminal, Bloomberg data show.
Indian refiners need to find alternative means to pay for Iranian crude after the Reserve Bank of India on Dec. 27 said companies must settle trades with the Persian Gulf state outside the Asian Clearing Union, a regional payment arrangement. This dismantled a mechanism used to complete payments for oil in euros and dollars.
Two ships, the Remi and Fair Spirit, with a combined cargo of 180,000 tons, are scheduled to reach Mangalore in western India today, according to vessel transmissions and data from Clarkson Research Services Ltd., a unit of the world’s biggest shipbroker.
The Remi, which can transport about 105,000 tons, was chartered by state-run Mangalore Refinery & Petrochemicals Ltd. or MRPL to transport 90,000 tons from the Arabian Gulf in late December, according to data from Clarkson.
Ship Charters
MRPL, a unit of India’s biggest energy explorer Oil & Natural Gas Corp., buys about 7 million tons of crude from Iran every year, making it the South Asian nation’s biggest buyer of oil from the Persian Gulf state, Managing Director U.K. Basu said Dec. 30.
The Fair Spirit, which can carry about 100,000 tons, was chartered by MRPL to transport 90,000 tons to Mangalore from Kharg Island in early January, according to Clarkson data.
The Remi and Fair Spirit have been chartered by MRPL to also load 180,000 tons from Kharg Island and the Arabian Gulf in mid-January, the data show.
Indian Oil and state-run rival Hindustan Petroleum Corp. will get crude from Iran on credit this month, two people with direct knowledge of the matter said Jan. 4.
Crude on Credit
Iran will supply Hindustan Petroleum, India’s third-largest state refiner, with 1 million barrels on 90 days of credit, one of the people said. The refiners are exploring the possibility of paying for Iranian crude in yen, dirhams or rials, the people said.
Hindustan Petroleum rose as much as 0.9 percent to 390.90 rupees and was trading at 389.15 rupees in Mumbai at 10 a.m. local time. Indian Oil gained as much as 1.2 percent. MRPL fell 0.2 percent after climbing as much as 0.5 percent.
Oil Secretary S. Sundareshan said on Dec. 30 that India imports about 21 million tons of crude from Iran annually. The Middle East nation is India’s biggest supplier after Saudi Arabia, Oil Minister Murli Deora said in parliament April 15.
The United Nations in June stepped up punitive measures against Iran over its nuclear ambitions, applying a fourth round of sanctions. The U.S. and European Union later imposed additional restrictions. Iran says it is enriching uranium for power generation.
The U.S. has increased pressure on Iran’s banks, the country’s national security leadership and on companies that invest in Iran’s energy industry.
Iran pumped 3.7 million barrels a day in December, making it the second-largest producer in the Organization of Petroleum Exporting Countries, according to a Bloomberg survey. The other countries in the 12-member group are Algeria, Angola, Ecuador, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, United Arab Emirates and Venezuela.
Economic fears as Indian food prices soar
Indian food prices have hit their highest level in more than a year, rising at an annual rate of 18 per cent in what economists have taken as a worrying sign that the impact of surging commodity prices is hitting the broader economy.
Food inflation in India is being driven by many of the same factors that have pushed the price of global commodities like wheat and barley to record highs. It also highlights rising fears of a global prices in the developing world, with the UN’s Food and Agricultural Organisation warning this week that global prices had surpassed levels seen during the 2007-08 crisis.
Bihari Lal, a 40-year-old fruit trader, said: “Buying fruit is a luxury for most people. They would rather spend the money on vegetables for an evening meal than for buying bananas, papayas, oranges and melons. For the poor it is unthinkable. So I am buying less fruit to sell to avoid wastage, but I am going through a bad time.”
India’s commerce and industry ministry said on Thursday that food prices rose at an annual rate of 18.32 per cent in the week to December 25.
The move capped more than a year of double-digit food price inflation for India, where millions still spend more than 50 per cent of their household income on food.
For Chhaya Singh, a 17-year-old student shopping for daily staples in Mumbai’s Colaba market, that has meant that even the cheapest and most basic meal of potato curry has become too expensive. “We have to find alternative vegetables,” she said.
For Nahi Chaudhary, a 38-year-old Mumbai housewife, the higher prices have meant buying fewer aubergines, okra and other now expensive vegetables. “The increase in price is terrible,” she said. “In fact we don’t eat out at all any more as restaurants have even increased their charges.”
Although still below the more than 20 per cent inflation levels seen in 2009, economists fear that a long-term structural shift in food consumption means prices are likely to be an ongoing concern for politicians and the Reserve Bank of India, the central bank.
According to Shubhada Rao, chief economist at Yes Bank in Mumbai, there is a “structural rigidity” in food inflation. “[This] is reinforcing fears that it will spill over to broader inflation, putting pressure on the Reserve Bank of India (RBI) to raise interest rates,” she said.
Nalini Rao, senior research analyst at Angel Commodities, said the price rises had hit a changing array of staples over the past year. “In June food inflation was driven by pulses and milk, while for December it is driven by crops such as onions [and] other vegetables such as potatoes and spices.”
The International Monetary Fund on Wednesday urged the RBI to maintain a tight monetary policy stance and keep raising interest rates in its efforts to tame inflation.
The latest sharp rise in Indian food inflation was partly due to the jump in the price of onions, a staple ingredient for India’s curries, which in recent weeks developed into a national scandal.
Manmohan Singh, the country’s prime minister was forced to step in and seek imports from Pakistan, in order to bring prices down to more reasonable levels. Onion prices suddenly doubled, after unseasonable rains in onion-growing regions damaged crops.
“It impacts us very much,” said Mina Singh, who runs a small canteen at a New Delhi arts centre, saying she is now spending Rs1,000 ($22) every two days on onions. “We can’t change the recipes – people will start complaining,” said Ms Singh. “We also serve onions as accompaniments alongside the dishes, but we can’t start charging for that – it’s like charging for water.”
Ali Mohammad, a 30-year-old onion trader in Mumbai, said: “People have to buy the same number of onions, it’s a staple, so that is why I haven’t seen any change in sales. But what I have seen is that rather than buying 1kg at a time as before, they will buy less, but more often so it is manageable.”
Food inflation in India is being driven by many of the same factors that have pushed the price of global commodities like wheat and barley to record highs. It also highlights rising fears of a global prices in the developing world, with the UN’s Food and Agricultural Organisation warning this week that global prices had surpassed levels seen during the 2007-08 crisis.
Bihari Lal, a 40-year-old fruit trader, said: “Buying fruit is a luxury for most people. They would rather spend the money on vegetables for an evening meal than for buying bananas, papayas, oranges and melons. For the poor it is unthinkable. So I am buying less fruit to sell to avoid wastage, but I am going through a bad time.”
India’s commerce and industry ministry said on Thursday that food prices rose at an annual rate of 18.32 per cent in the week to December 25.
The move capped more than a year of double-digit food price inflation for India, where millions still spend more than 50 per cent of their household income on food.
For Chhaya Singh, a 17-year-old student shopping for daily staples in Mumbai’s Colaba market, that has meant that even the cheapest and most basic meal of potato curry has become too expensive. “We have to find alternative vegetables,” she said.
For Nahi Chaudhary, a 38-year-old Mumbai housewife, the higher prices have meant buying fewer aubergines, okra and other now expensive vegetables. “The increase in price is terrible,” she said. “In fact we don’t eat out at all any more as restaurants have even increased their charges.”
Although still below the more than 20 per cent inflation levels seen in 2009, economists fear that a long-term structural shift in food consumption means prices are likely to be an ongoing concern for politicians and the Reserve Bank of India, the central bank.
According to Shubhada Rao, chief economist at Yes Bank in Mumbai, there is a “structural rigidity” in food inflation. “[This] is reinforcing fears that it will spill over to broader inflation, putting pressure on the Reserve Bank of India (RBI) to raise interest rates,” she said.
Nalini Rao, senior research analyst at Angel Commodities, said the price rises had hit a changing array of staples over the past year. “In June food inflation was driven by pulses and milk, while for December it is driven by crops such as onions [and] other vegetables such as potatoes and spices.”
The International Monetary Fund on Wednesday urged the RBI to maintain a tight monetary policy stance and keep raising interest rates in its efforts to tame inflation.
The latest sharp rise in Indian food inflation was partly due to the jump in the price of onions, a staple ingredient for India’s curries, which in recent weeks developed into a national scandal.
Manmohan Singh, the country’s prime minister was forced to step in and seek imports from Pakistan, in order to bring prices down to more reasonable levels. Onion prices suddenly doubled, after unseasonable rains in onion-growing regions damaged crops.
“It impacts us very much,” said Mina Singh, who runs a small canteen at a New Delhi arts centre, saying she is now spending Rs1,000 ($22) every two days on onions. “We can’t change the recipes – people will start complaining,” said Ms Singh. “We also serve onions as accompaniments alongside the dishes, but we can’t start charging for that – it’s like charging for water.”
Ali Mohammad, a 30-year-old onion trader in Mumbai, said: “People have to buy the same number of onions, it’s a staple, so that is why I haven’t seen any change in sales. But what I have seen is that rather than buying 1kg at a time as before, they will buy less, but more often so it is manageable.”
Wednesday, January 5, 2011
A Bonanza in TV Sales Fades Away
LAS VEGAS — By now, most Americans have taken the leap and tossed out their old boxy televisions in favor of sleek flat-panel displays.
Now manufacturers want to convince those people that their once-futuristic sets are already obsolete.
After a period of strong growth, sales of televisions are slowing. To counter this, TV makers are trying to persuade consumers to buy new sets by promoting new technologies. At this week’s Consumer Electronics Show, which opens Thursday, every TV maker will be crowing about things like 3-D and Internet connections — features that have not generated much excitement so far.
Unit sales of liquid-crystal and plasma displays were up 2.9 percent in 2010 from the previous year, according to figures from the market researcher DisplaySearch. That is tiny compared with the gains of more than 20 percent in each of the prior three years.
Those heady days of the last decade were the result of an unusual set of circumstances. The rise of flat-panel television technologies like plasma and LCD almost perfectly coincided with a government-mandated switchover to digital broadcasting and the availability of high-definition shows and movies — something these new televisions were all ready to display.
That sparked a mass migration of consumers from using the old cathode-ray tube television sets to the thinner and lighter plasma and liquid-crystal displays.
“Those were the golden years,” Paul Gagnon, director of North American TV research at DisplaySearch, said. “During that period, the whole pie grew. Technology inflated the size of the category.”
But now, most people who want a flat-screen TV already own one. Industry watchers and manufacturers estimate that nearly two-thirds of households in the United States have a flat-screen set.
“The laggards are stubborn,” Mr. Gagnon said. “They will not move as quickly as the rest of the market has.”
The industry’s response has been to promote 3-D and Internet capabilities. But these were also the buzzwords at last year’s show, indicating that after a period of consistent innovation and improvement — from higher resolutions to thinner displays — the TV market is maturing and stabilizing.
“In the next decade, the rate of change may not be the same,” said James Sanduski, Panasonic’s senior vice president for sales. “That said, it will still be significant.”
So far, 3-D has not prompted a rush to upgrade. John Revie, senior vice president for home entertainment at Samsung, said 3-D had been saddled with a perception that it stumbled out of the gate, even though its introduction compared favorably with other technological introductions.
“More than one million 3-D TVs were sold in 2010,” he said. “But LED, HD and Blu-ray each sold less than a million in their first year.”
That said, Mr. Revie acknowledged the perceived shortfall. “Frankly, Samsung was hoping to drive a bigger market.”
Some feel that 3-D’s appeal will remain limited. Riddhi Patel, director for television systems and retail services at iSuppli, a market researcher, said the sales pitch for 3-D was a complicated one.
“Consumers are aware of the hidden costs,” Ms. Patel said. “It’s not just the display, but now you need a 3-D Blu-ray player and 3-D media and additional glasses.”
She also questioned the payoff. “When everyone markets 3-D to you, they talk about ‘Avatar’ and the theatrical experience,” she said. “When you have a 42-inch TV or even a 50-inch TV, it’s not the same experience.”
Internet features are now common in new TV models. But recent missteps by technology companies like Google with its Google TV service, as well as the often confusing mosaic of streaming and download providers, has left the market looking a little muddled.
“Every manufacturer has their own way” of dealing with Internet video, Mr. Sanduski said. “There’s not one standard.”
One way manufacturers are trying to make these features friendlier is by using Apple’s iPhone model, allowing outside companies like Netflix to develop applications that work on their displays. On Wednesday, Panasonic and LG announced new Internet TV platforms that will open up the interfaces of their sets to outside developers.
One big issue for TV makers is price. From 2007 to 2010, the average price of an LCD TV dropped 36.3 percent, according to DisplaySearch. Plasma TV prices had an even more precipitous decline, dropping 51.6 percent in the same period.
But those price drops have slowed recently, as manufacturers have gotten a handle on what had been an oversupply of product and have started to charge more for the new features.
“It’s kind of like having the auto industry trying to raise the prices of cars by 20 percent by adding all these options to every vehicle,” Mr. Gagnon said.
In another bright spot for TV makers, consumers seem willing to upgrade their sets more frequently than they did in the tube era, when it was not uncommon for them to use the same sets for a decade or more. “People held on to their TV like an appliance,” Mr. Sanduski said.
Analysts and TV makers now assume a five-to-seven-year replacement cycle for televisions. For the manufacturers, that may feel like an awfully long time. But it is only slightly longer than the cycle for PCs, which are replaced every three to four years. “There’s a little bit of fatigue,” Mr. Sanduski said. “Many consumers are saying, ‘I just bought a TV. I’m going to wait.’ ”
Now manufacturers want to convince those people that their once-futuristic sets are already obsolete.
After a period of strong growth, sales of televisions are slowing. To counter this, TV makers are trying to persuade consumers to buy new sets by promoting new technologies. At this week’s Consumer Electronics Show, which opens Thursday, every TV maker will be crowing about things like 3-D and Internet connections — features that have not generated much excitement so far.
Unit sales of liquid-crystal and plasma displays were up 2.9 percent in 2010 from the previous year, according to figures from the market researcher DisplaySearch. That is tiny compared with the gains of more than 20 percent in each of the prior three years.
Those heady days of the last decade were the result of an unusual set of circumstances. The rise of flat-panel television technologies like plasma and LCD almost perfectly coincided with a government-mandated switchover to digital broadcasting and the availability of high-definition shows and movies — something these new televisions were all ready to display.
That sparked a mass migration of consumers from using the old cathode-ray tube television sets to the thinner and lighter plasma and liquid-crystal displays.
“Those were the golden years,” Paul Gagnon, director of North American TV research at DisplaySearch, said. “During that period, the whole pie grew. Technology inflated the size of the category.”
But now, most people who want a flat-screen TV already own one. Industry watchers and manufacturers estimate that nearly two-thirds of households in the United States have a flat-screen set.
“The laggards are stubborn,” Mr. Gagnon said. “They will not move as quickly as the rest of the market has.”
The industry’s response has been to promote 3-D and Internet capabilities. But these were also the buzzwords at last year’s show, indicating that after a period of consistent innovation and improvement — from higher resolutions to thinner displays — the TV market is maturing and stabilizing.
“In the next decade, the rate of change may not be the same,” said James Sanduski, Panasonic’s senior vice president for sales. “That said, it will still be significant.”
So far, 3-D has not prompted a rush to upgrade. John Revie, senior vice president for home entertainment at Samsung, said 3-D had been saddled with a perception that it stumbled out of the gate, even though its introduction compared favorably with other technological introductions.
“More than one million 3-D TVs were sold in 2010,” he said. “But LED, HD and Blu-ray each sold less than a million in their first year.”
That said, Mr. Revie acknowledged the perceived shortfall. “Frankly, Samsung was hoping to drive a bigger market.”
Some feel that 3-D’s appeal will remain limited. Riddhi Patel, director for television systems and retail services at iSuppli, a market researcher, said the sales pitch for 3-D was a complicated one.
“Consumers are aware of the hidden costs,” Ms. Patel said. “It’s not just the display, but now you need a 3-D Blu-ray player and 3-D media and additional glasses.”
She also questioned the payoff. “When everyone markets 3-D to you, they talk about ‘Avatar’ and the theatrical experience,” she said. “When you have a 42-inch TV or even a 50-inch TV, it’s not the same experience.”
Internet features are now common in new TV models. But recent missteps by technology companies like Google with its Google TV service, as well as the often confusing mosaic of streaming and download providers, has left the market looking a little muddled.
“Every manufacturer has their own way” of dealing with Internet video, Mr. Sanduski said. “There’s not one standard.”
One way manufacturers are trying to make these features friendlier is by using Apple’s iPhone model, allowing outside companies like Netflix to develop applications that work on their displays. On Wednesday, Panasonic and LG announced new Internet TV platforms that will open up the interfaces of their sets to outside developers.
One big issue for TV makers is price. From 2007 to 2010, the average price of an LCD TV dropped 36.3 percent, according to DisplaySearch. Plasma TV prices had an even more precipitous decline, dropping 51.6 percent in the same period.
But those price drops have slowed recently, as manufacturers have gotten a handle on what had been an oversupply of product and have started to charge more for the new features.
“It’s kind of like having the auto industry trying to raise the prices of cars by 20 percent by adding all these options to every vehicle,” Mr. Gagnon said.
In another bright spot for TV makers, consumers seem willing to upgrade their sets more frequently than they did in the tube era, when it was not uncommon for them to use the same sets for a decade or more. “People held on to their TV like an appliance,” Mr. Sanduski said.
Analysts and TV makers now assume a five-to-seven-year replacement cycle for televisions. For the manufacturers, that may feel like an awfully long time. But it is only slightly longer than the cycle for PCs, which are replaced every three to four years. “There’s a little bit of fatigue,” Mr. Sanduski said. “Many consumers are saying, ‘I just bought a TV. I’m going to wait.’ ”
Asian Stocks Rise on Optimism for U.S. Economic Recovery; Honda Advances
Asian stocks rose, with the regional benchmark index advancing for the eighth day in nine, as a stronger dollar boosted earnings prospects for exporters and reports in the U.S. signaled a broadening of the economic recovery.
Honda Motor Co., Japan’s No. 2 automaker by sales that counts the U.S. as its biggest market, gained 1.6 percent in Tokyo. Hyundai Motor Co., South Korea’s biggest carmaker, rose 1.3 percent in Seoul. Canon Inc., a Japanese camera maker that generates about 80 percent of its revenue overseas, rose 1.5 percent after the dollar surged against the yen, boosting the outlook for export earnings. Mitsui & Co., which gets about 40 percent of gross profit from commodities, advanced 2.3 percent after crude oil and copper futures increased.
“Investors are taking business confidence as being on a recovery track because economic measures are good in general,” said Mitsushige Akino, who oversees about $450 million in Tokyo at Ichiyoshi Investment Management Co. “A global pickup in business sentiment is boosting actual demand for commodities.”
The MSCI Asia Pacific Index climbed 0.5 percent to 137.88 as of 9:41 a.m. in Tokyo. Almost four stocks advanced for each that dropped on the gauge.
The index rose 14 percent last year, extending a 34 percent increase in 2009, as positive global economic data and corporate profits outweighed concerns about Europe’s debt crisis and China’s steps to curb inflation.
Japan’s Nikkei 225 Stock Average increased 1.2 percent. South Korea’s Kospi Index rose 0.1 percent and New Zealand’s NZX 50 Index gained 0.2 percent. Australia’s S&P/ASX 200 Index slipped 0.1 percent.
U.S. Services, Jobs
Futures on the Standard & Poor’s 500 Index were little changed today. The index rose 0.5 percent in New York yesterday to its highest level since September 2008.
The U.S. Institute for Supply Management said yesterday that its non-factory index, which covers about 90 percent of the economy, rose to 57.1 in December, exceeding the median forecast of economists surveyed by Bloomberg News and the fastest expansion since May 2006. A reading higher than 50 signals growth. ADP Employer Services said yesterday that U.S. companies added 297,000 jobs last month, almost triple the median economist estimate.
The dollar gained the most in three months against the yen yesterday in New York, advancing to as much as 83.38, the highest level since Dec. 23. A stronger dollar boosts the value of U.S. income at Japanese companies when revenue is repatriated.
Crude oil for February delivery increased to $90.30 a barrel in New York yesterday. Copper futures for March delivery rose 0.9 percent to close at $4.408 a pound yesterday.
Shares on MSCI Asia Pacific Index were valued at 14.1 times estimated earnings on average at yesterday’s close, compared with 13.5 times for the S&P 500 and 11.1 times for the Stoxx 600.
Honda Motor Co., Japan’s No. 2 automaker by sales that counts the U.S. as its biggest market, gained 1.6 percent in Tokyo. Hyundai Motor Co., South Korea’s biggest carmaker, rose 1.3 percent in Seoul. Canon Inc., a Japanese camera maker that generates about 80 percent of its revenue overseas, rose 1.5 percent after the dollar surged against the yen, boosting the outlook for export earnings. Mitsui & Co., which gets about 40 percent of gross profit from commodities, advanced 2.3 percent after crude oil and copper futures increased.
“Investors are taking business confidence as being on a recovery track because economic measures are good in general,” said Mitsushige Akino, who oversees about $450 million in Tokyo at Ichiyoshi Investment Management Co. “A global pickup in business sentiment is boosting actual demand for commodities.”
The MSCI Asia Pacific Index climbed 0.5 percent to 137.88 as of 9:41 a.m. in Tokyo. Almost four stocks advanced for each that dropped on the gauge.
The index rose 14 percent last year, extending a 34 percent increase in 2009, as positive global economic data and corporate profits outweighed concerns about Europe’s debt crisis and China’s steps to curb inflation.
Japan’s Nikkei 225 Stock Average increased 1.2 percent. South Korea’s Kospi Index rose 0.1 percent and New Zealand’s NZX 50 Index gained 0.2 percent. Australia’s S&P/ASX 200 Index slipped 0.1 percent.
U.S. Services, Jobs
Futures on the Standard & Poor’s 500 Index were little changed today. The index rose 0.5 percent in New York yesterday to its highest level since September 2008.
The U.S. Institute for Supply Management said yesterday that its non-factory index, which covers about 90 percent of the economy, rose to 57.1 in December, exceeding the median forecast of economists surveyed by Bloomberg News and the fastest expansion since May 2006. A reading higher than 50 signals growth. ADP Employer Services said yesterday that U.S. companies added 297,000 jobs last month, almost triple the median economist estimate.
The dollar gained the most in three months against the yen yesterday in New York, advancing to as much as 83.38, the highest level since Dec. 23. A stronger dollar boosts the value of U.S. income at Japanese companies when revenue is repatriated.
Crude oil for February delivery increased to $90.30 a barrel in New York yesterday. Copper futures for March delivery rose 0.9 percent to close at $4.408 a pound yesterday.
Shares on MSCI Asia Pacific Index were valued at 14.1 times estimated earnings on average at yesterday’s close, compared with 13.5 times for the S&P 500 and 11.1 times for the Stoxx 600.
India Inflation Threat May Force Subbarao to Add to Rate Rises, IMF Says
India’s central bank may have to keep raising interest rates to combat persistent inflationary pressures, the International Monetary Fund’s mission chief to the country said.
“We see a pretty strong underlying inflationary pressure still in there,” Masahiko Takeda said on a video on the IMF’s website. Monetary policy “has been appropriately tightened,” though “in our view there’s a possibility that further monetary tightening action may be needed to contain the high inflation.”
The Reserve Bank of India said Dec. 30 that threats to growth have “receded” and inflation risks “have come to the fore,” signaling it may tighten monetary policy further after boosting interest rates the most in Asia in 2010. Governor Duvvuri Subbarao, who increased rates six times in 2010, held off on raising borrowing costs in a Dec. 16 policy announcement as a record 1.1 trillion rupees ($24.3 billion) of share sales last year caused a cash squeeze in the banking system.
IMF’s Takeda made the comments after completing an annual review of India’s economy, which was discussed by the IMF board on Dec. 22. In the board’s conclusions released today, the IMF said that the Indian economy is expected to grow 8.75 percent in the fiscal year ending March 31, and 8 percent the following year. The IMF staff report was not published.
The IMF board also said it sees inflation measures between 8.5 percent and 10.5 percent amid “little slack in the economy, the ongoing exit from the policy stimulus introduced during the crisis, and structural factors affecting food prices.”
Less Inflation
India’s benchmark wholesale-price inflation cooled to near a one-year low of 7.48 percent in November. The reading exceeds the Reserve Bank of India’s goal of between 4 percent and 4.5 percent.
The Washington-based IMF also warned that capital inflows may increase more than India’s capacity to absorb them as growth remains “among the fastest” in the world and yields in advanced economies stay low.
“While exchange rate flexibility would remain the first line of defense, reserve accumulation and macroprudential measures could be employed if strong inflows continue,” the institution’s board said in an e-mailed statement.
Risks to growth are mainly linked to global expansion, the IMF said. It said “elevated inflation, fiscal consolidation needs, and buoyant capital inflows” as “near-term challenges” that call for “careful calibration of macroeconomic policies and the diligent pursuit of ongoing reforms.”
“We see a pretty strong underlying inflationary pressure still in there,” Masahiko Takeda said on a video on the IMF’s website. Monetary policy “has been appropriately tightened,” though “in our view there’s a possibility that further monetary tightening action may be needed to contain the high inflation.”
The Reserve Bank of India said Dec. 30 that threats to growth have “receded” and inflation risks “have come to the fore,” signaling it may tighten monetary policy further after boosting interest rates the most in Asia in 2010. Governor Duvvuri Subbarao, who increased rates six times in 2010, held off on raising borrowing costs in a Dec. 16 policy announcement as a record 1.1 trillion rupees ($24.3 billion) of share sales last year caused a cash squeeze in the banking system.
IMF’s Takeda made the comments after completing an annual review of India’s economy, which was discussed by the IMF board on Dec. 22. In the board’s conclusions released today, the IMF said that the Indian economy is expected to grow 8.75 percent in the fiscal year ending March 31, and 8 percent the following year. The IMF staff report was not published.
The IMF board also said it sees inflation measures between 8.5 percent and 10.5 percent amid “little slack in the economy, the ongoing exit from the policy stimulus introduced during the crisis, and structural factors affecting food prices.”
Less Inflation
India’s benchmark wholesale-price inflation cooled to near a one-year low of 7.48 percent in November. The reading exceeds the Reserve Bank of India’s goal of between 4 percent and 4.5 percent.
The Washington-based IMF also warned that capital inflows may increase more than India’s capacity to absorb them as growth remains “among the fastest” in the world and yields in advanced economies stay low.
“While exchange rate flexibility would remain the first line of defense, reserve accumulation and macroprudential measures could be employed if strong inflows continue,” the institution’s board said in an e-mailed statement.
Risks to growth are mainly linked to global expansion, the IMF said. It said “elevated inflation, fiscal consolidation needs, and buoyant capital inflows” as “near-term challenges” that call for “careful calibration of macroeconomic policies and the diligent pursuit of ongoing reforms.”
Pakistan turmoil deepens after murder
The governor of Pakistan’s central Punjab province has been gunned down by one of his own security guards, deepening the country’s political crisis.
Salman Taseer, a businessman and close ally of Asif Ali Zardari, the president, was shot after he stepped out of his bullet-proof car near a market in central Islamabad on Tuesday.
Witnesses said the gunman, a trained police commando, handed himself in to police after the attack, saying he was ready to face the consequences of his actions.
Malik Mumtaz Hussain Qadri told investigators he acted because of the liberal politician’s opposition to Pakistan’s blasphemy laws. Mr Taseer had campaigned for a pardon for Asia Bibi, a Christian woman sentenced to death in November under the blasphemy laws.
Mr Taseer was a friend and colleague of Mr Zardari’s wife, Benazir Bhutto, who was herself assassinated in 2007. His death is a blow to the president and immediately raised new questions over the future of his already troubled presidency.
On Sunday, the Pakistan People’s Party, led by Mr Zardari, became a minority government after one of its key allies left the ruling coalition, citing differences over the latest petrol price increase just a day earlier.
Shortly before Mr Taseer’s death, Nawaz Sharif, the former prime minister and the main leader of the opposition Pakistan Muslim League-Nawaz called for the recent oil price increase to be reversed and gave the government a three-day deadline, suggesting he could consider alliances with other parties.
A Pakistani federal minister on Tuesday said the withdrawal of the oil price increase would increase the budget deficit, already expected to run over a limit agreed with the IMF. He said: “If we save the coalition, relations with the IMF [under a $11.3bn loan agreed in 2008] will be further in trouble”.
Analysts said Mr Taseer’s killing raised fresh questions about the infiltration of the police and security services by Islamic hardliners.
Hasan Askari Rizvi, a political commentator, said: “This incident will be a powerful reminder of the way Pakistan is so badly exposed to the threat from Islamists. The killing will have to be followed by investigations to determine how deep was the penetration of such people around the governor’s police force.”
Salman Taseer, a businessman and close ally of Asif Ali Zardari, the president, was shot after he stepped out of his bullet-proof car near a market in central Islamabad on Tuesday.
Witnesses said the gunman, a trained police commando, handed himself in to police after the attack, saying he was ready to face the consequences of his actions.
Malik Mumtaz Hussain Qadri told investigators he acted because of the liberal politician’s opposition to Pakistan’s blasphemy laws. Mr Taseer had campaigned for a pardon for Asia Bibi, a Christian woman sentenced to death in November under the blasphemy laws.
Mr Taseer was a friend and colleague of Mr Zardari’s wife, Benazir Bhutto, who was herself assassinated in 2007. His death is a blow to the president and immediately raised new questions over the future of his already troubled presidency.
On Sunday, the Pakistan People’s Party, led by Mr Zardari, became a minority government after one of its key allies left the ruling coalition, citing differences over the latest petrol price increase just a day earlier.
Shortly before Mr Taseer’s death, Nawaz Sharif, the former prime minister and the main leader of the opposition Pakistan Muslim League-Nawaz called for the recent oil price increase to be reversed and gave the government a three-day deadline, suggesting he could consider alliances with other parties.
A Pakistani federal minister on Tuesday said the withdrawal of the oil price increase would increase the budget deficit, already expected to run over a limit agreed with the IMF. He said: “If we save the coalition, relations with the IMF [under a $11.3bn loan agreed in 2008] will be further in trouble”.
Analysts said Mr Taseer’s killing raised fresh questions about the infiltration of the police and security services by Islamic hardliners.
Hasan Askari Rizvi, a political commentator, said: “This incident will be a powerful reminder of the way Pakistan is so badly exposed to the threat from Islamists. The killing will have to be followed by investigations to determine how deep was the penetration of such people around the governor’s police force.”
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