HONG KONG — The military appropriations law signed by President Obama on Friday contains a little-noticed “Buy American” provision for the Defense Department purchases of solar panels — a provision that is likely to dismay Chinese officials as President Hu Jintao prepares to visit the United States next week.
Although there are many big issues to discuss, including concerns about North Korea, trade and economic matters are certain to be high on the agenda. And while both sides are aiming to keep the discussion positive — the United States is the world’s largest importer and China the largest exporter of goods — simmering resentments over trade in green-energy technologies could be a distraction.
China has emerged as the world’s dominant producer of solar panels in the last two years. It accounted for at least half the world’s production last year, and its market share is rising rapidly. The United States accounts for $1.6 billion of the world’s $29 billion market for solar panels; market analyses typically have not broken out military sales separately.
The perception that Beijing unfairly subsidizes the Chinese solar industry to the detriment of American companies and other foreign competitors has drawn concern in Congress. The issue of clean-energy subsidies is also at the heart of a trade investigation under way by the Obama administration, which plans to bring a case against China before the World Trade Organization.
The new Buy American provision, created mainly by House and Senate conferees during a flurry of activity at the end of the lame-duck session of Congress, prevents the Defense Department from buying Chinese-made solar panels.
The American military is a rapidly growing consumer of renewable energy products, because it is extremely expensive and frequently dangerous to ship large quantities of fuel into remote areas of Iraq and Afghanistan.
The solar panel provision is carefully written to help it comply with the free trade rules of the World Trade Organization, which would make it hard for China to ask a W.T.O. tribunal to overturn the provision, trade lawyers said.
Chinese leaders have strongly criticized such provisions in the past, particularly one in President Obama’s economic stimulus package in early 2009 that applied to government procurement of steel and construction materials.
But China required in the late spring of 2009 that virtually all of its $600 billion economic stimulus be spent within China, not just for construction materials.
Chinese officials in Beijing and Washington did not respond on Saturday or Sunday to requests for comment on the solar panel provision.
While the United States and Europe have focused on subsidizing buyers of solar panels, China has emphasized subsidies for solar panel manufacturers. It then exports virtually all of its panels to the United States and Europe, often helped by the American and European consumer subsidies.
The solar panel provision in the defense appropriations law comes as President Obama has ordered a broad investigation into whether Chinese export subsidies, local content requirements and other rules have violated W.T.O. rules. As a result of the investigation, the United States started a W.T.O. case on Dec. 22 against what it said were Chinese wind turbine manufacturing subsidies.
American trade officials said then that they were still examining other Chinese clean-energy subsidy policies to decide whether to file additional W.T.O. cases.
The solar panel provision was part of the initial defense appropriations bill passed by the House. The House version had a simple requirement that the Defense Department buy solar panels made in the United States.
The Senate, which has been more leery of interfering with free trade, had no comparable provision, however, and many people in the solar panel industry did not expect the final law to have such a provision.
But the conference of House and Senate leaders ended up retaining the House provision and modifying it, by adding legal language to require that it also comply with previous American trade legislation.
Representative Maurice Hinchey, Democrat of New York, said he had fought for the provision to be included in the bill.
“We’ve had a lot of money taken out of this country and invested in other places around the world, particularly China, and particularly in alternative energies,” he said in an interview by phone. “For them to be producing alternative energy, that’s great, but we need to do it ourselves, and as much of it as possible.”
Mr. Hinchey said he did not think the provision would jeopardize relations with the Chinese ahead of Mr. Hu’s visit. “We have provided them with a lot of economic growth there,” he said. “A lot of money has gone out of this country and into China, and a lot of manufacturing operations, particularly alternative energy, has also gone into China.”
Mr. Hinchey had praised the Obama administration in November for starting a broad investigation into Chinese subsidies for solar and wind energy exports, saying then that these subsidies had put a company in his district, Prism Solar Technologies of Highland, N.Y., at a competitive disadvantage.
Sunday, January 9, 2011
Asian Stocks Fluctuate as Australian Insurers Decline, Oil Producers Gain
Asian stocks fluctuated as Australian insurers dropped as flooding in Australia worsened and energy producers advanced after crude oil futures increased.
Suncorp Group Ltd., the country’s biggest Brisbane-based insurer, and Insurance Australia Group Ltd. fell at least 1 percent in Sydney. LG Chem Ltd., South Korea’s largest chemicals maker, declined 2.3 percent on speculation its battery designs have been compromised after partner Renault SA’s electric-car secrets were disclosed. Woodside Petroleum Ltd., Australia’s second-largest oil and gas producer, rose 0.6 percent as crude oil futures rose for the first time in three days after leak forced the shutdown of an Alaskan crude pipeline.
The MSCI Asia Pacific Excluding Japan Index was little changed at 477.15 as of 9:44 a.m. in Hong Kong, with six stocks declining for every five that advanced. The gauge climbed to a two-month high on Jan. 4 as data on U.S. manufacturing and services industries boosted optimism that a recovery in the world’s largest economy is strengthening.
Australia’s S&P/ASX 200 Index and New Zealand’s NZX 50 Index were little changed. South Korea’s Kospi Index fell 0.2 percent. Singapore’s Straits Times Index pared gains. Taiwan’s Taiex Index retreated 0.1 percent. Japanese markets are closed for a holiday.
Futures on the Standard & Poor’s 500 Index lost 0.2 percent. The index fell 0.2 percent on Jan. 7 after the world’s biggest economy added fewer jobs than forecast.
Suncorp Group Ltd., the country’s biggest Brisbane-based insurer, and Insurance Australia Group Ltd. fell at least 1 percent in Sydney. LG Chem Ltd., South Korea’s largest chemicals maker, declined 2.3 percent on speculation its battery designs have been compromised after partner Renault SA’s electric-car secrets were disclosed. Woodside Petroleum Ltd., Australia’s second-largest oil and gas producer, rose 0.6 percent as crude oil futures rose for the first time in three days after leak forced the shutdown of an Alaskan crude pipeline.
The MSCI Asia Pacific Excluding Japan Index was little changed at 477.15 as of 9:44 a.m. in Hong Kong, with six stocks declining for every five that advanced. The gauge climbed to a two-month high on Jan. 4 as data on U.S. manufacturing and services industries boosted optimism that a recovery in the world’s largest economy is strengthening.
Australia’s S&P/ASX 200 Index and New Zealand’s NZX 50 Index were little changed. South Korea’s Kospi Index fell 0.2 percent. Singapore’s Straits Times Index pared gains. Taiwan’s Taiex Index retreated 0.1 percent. Japanese markets are closed for a holiday.
Futures on the Standard & Poor’s 500 Index lost 0.2 percent. The index fell 0.2 percent on Jan. 7 after the world’s biggest economy added fewer jobs than forecast.
CFOs Start to Revive Global Bond Sales as Dollar Rates Fall: India Credit
Rural Electrification Corp. and Union Bank of India are reviving bond sales to international investors, after the market shut in December, as Indian dollar- denominated bond yields fall from a five-month high.
Rural Electrification in New Delhi may sell $500 million of bonds on Jan. 18, Finance Director Hari Das Khunteta said in a Dec. 29 interview. Union Bank is seeking as much as 200 million Swiss francs ($208 million) and European fund managers plan to buy as soon as they get their New Year allocations of cash, General Manager V.K. Khanna said in an interview on Jan. 4.
Indian companies more than tripled sales of foreign- currency bonds to $8.7 billion in 2010 as the central bank drove up rupee borrowing costs with six interest-rate increases to cool inflation. Average Indian dollar bond yields dropped to 5.10 percent from 5.22 percent last month, HSBC Holdings Plc indexes show. That compares with five-year funding costs in rupees for top-rated borrowers of 8.92 percent, according to Fixed Income Money Market and Derivatives Association of India or FIMMDA.
“The macro environment and risk appetite has improved from December,” Pierre Faddoul, a credit analyst in Singapore at Aberdeen Asset Management Ltd., which manages about $282 billion globally, said in a Jan. 6 interview. “The finding of a solution to the European sovereign crisis helped the overall sentiment.”
‘Choppy’
Indian borrowers stayed out of the market for global debt sales in December as U.S. Treasury yields climbed to the highest in more than four months after President Barack Obama’s extended tax cuts due to expire and as the European debt crisis worsened.
“Markets were choppy,” said Union Bank’s Khanna. Officials from the Mumbai-based state-owned bank met investors in Zurich, Geneva, Lausanne and Vaduz, Liechtenstein, between Nov. 18 and 20. Markets in Switzerland are stable and there’s still appetite for emerging-market bonds, Khanna said.
Reports showing an improving U.S. economy and bailouts of Greece and Ireland last year helped soothe deficit concerns and revive appetite for higher-yielding emerging-market assets.
Rural Electrification hired Credit Agricole CIB, Royal Bank of Scotland Group Plc, and Standard Chartered Plc to help manage its sale. The nation’s largest lender, State Bank of India, raised 750 million euros ($973 million) in November selling 4.75 percent bonds maturing in 2015.
Need Funds
“I expect huge issuances from India, especially among banks,” said Peter Varga, who manages $220 million of emerging- market corporate debt in Vienna at Erste Sparinvest KAG. “They will also need to fund their growth in 2011 after an amazing growth in credit last year.”
He owns bonds sold by Vedanta Resources Plc, Reliance Industries Ltd. and State Bank of India. “If the spreads are attractive, I will consider investing” in Indian debt, he said, referring to yields relative to benchmarks.
Average spreads on Indian dollar bonds have narrowed to 322 basis points from 382 basis points, or 3.82 percentage points, on Nov. 5, HSBC data show.
Indian banks borrowed an average 923 billion rupees ($20.3 billion) a day from the Reserve Bank of India last quarter, the most since 2000, as they struggled to meet rising demand for loans. The overnight borrowing rate between local banks was 6.38 percent last week, up from 5.5 percent a week earlier.
Deposit Growth
Deposits grew 14.7 percent in the two weeks ended Dec. 17 from a year earlier, lagging behind a 23.7 percent increase in lending, according to central bank data.
India’s state-run banks need to raise more capital to sustain credit growth, Chakravarthy Rangarajan, the prime minister’s chief economic adviser, said in New Delhi on Jan. 7.
The cost of protecting the debt of government-owned State Bank of India, which some investors perceive as a proxy for the nation, fell six basis points this month to 154 basis points on Jan. 6, according to CMA credit-default swaps prices.
Credit swaps pay the buyer face value in exchange for the underlying securities or the cash equivalent should a borrower fail to adhere to its debt agreements. The contracts rise when creditworthiness deteriorates and fall when it improves.
Issuance may revive across Asia, according to Aberdeen.
“A few Chinese companies and other Asian companies that did not go through with their issuance plans are now coming back,” Faddoul said. “January is when activity picks up and you have more people present to drive appetite.”
Yields Fall
The rate on emerging-market sovereign debt was 5.82 percent on Jan. 6, down from a five-month high of 5.99 on Dec. 16, according to an index compiled by JPMorgan Chase & Co. The spread to U.S. Treasuries narrowed to 229 basis points from 248 at the end of last year.
Elsewhere in Indian markets, the rupee had a weekly drop as investors bought dollars on rising confidence in the U.S. economy. The rupee declined 1.5 percent to 45.3850 per dollar, according to data compiled by Bloomberg.
Indian government bonds fell last week, pushing yields to the highest level in a month, on speculation the central bank will resume raising rates this month to slow food-price inflation.
“There are still three more weeks before the monetary policy action and the Reserve Bank of India should watch the behavior of the prices,” Chakravarthy Rangarajan, chairman of the Prime Minister’s Economic Advisory Council, said in an interview on Jan. 7 in Gurgaon, near New Delhi. “If prices continue to remain sticky, then probably some action will be required.”
The yield on the benchmark 7.80 percent bond due in May 2020 rose seven basis points to 8.2 percent on Jan. 7, according to the central bank’s trading system.
Food prices surged 18.32 percent in the week ended Dec. 25 from a year earlier, the most since July, according to a commerce ministry statement. The central bank is set to review monetary policy on Jan. 25.
Rural Electrification in New Delhi may sell $500 million of bonds on Jan. 18, Finance Director Hari Das Khunteta said in a Dec. 29 interview. Union Bank is seeking as much as 200 million Swiss francs ($208 million) and European fund managers plan to buy as soon as they get their New Year allocations of cash, General Manager V.K. Khanna said in an interview on Jan. 4.
Indian companies more than tripled sales of foreign- currency bonds to $8.7 billion in 2010 as the central bank drove up rupee borrowing costs with six interest-rate increases to cool inflation. Average Indian dollar bond yields dropped to 5.10 percent from 5.22 percent last month, HSBC Holdings Plc indexes show. That compares with five-year funding costs in rupees for top-rated borrowers of 8.92 percent, according to Fixed Income Money Market and Derivatives Association of India or FIMMDA.
“The macro environment and risk appetite has improved from December,” Pierre Faddoul, a credit analyst in Singapore at Aberdeen Asset Management Ltd., which manages about $282 billion globally, said in a Jan. 6 interview. “The finding of a solution to the European sovereign crisis helped the overall sentiment.”
‘Choppy’
Indian borrowers stayed out of the market for global debt sales in December as U.S. Treasury yields climbed to the highest in more than four months after President Barack Obama’s extended tax cuts due to expire and as the European debt crisis worsened.
“Markets were choppy,” said Union Bank’s Khanna. Officials from the Mumbai-based state-owned bank met investors in Zurich, Geneva, Lausanne and Vaduz, Liechtenstein, between Nov. 18 and 20. Markets in Switzerland are stable and there’s still appetite for emerging-market bonds, Khanna said.
Reports showing an improving U.S. economy and bailouts of Greece and Ireland last year helped soothe deficit concerns and revive appetite for higher-yielding emerging-market assets.
Rural Electrification hired Credit Agricole CIB, Royal Bank of Scotland Group Plc, and Standard Chartered Plc to help manage its sale. The nation’s largest lender, State Bank of India, raised 750 million euros ($973 million) in November selling 4.75 percent bonds maturing in 2015.
Need Funds
“I expect huge issuances from India, especially among banks,” said Peter Varga, who manages $220 million of emerging- market corporate debt in Vienna at Erste Sparinvest KAG. “They will also need to fund their growth in 2011 after an amazing growth in credit last year.”
He owns bonds sold by Vedanta Resources Plc, Reliance Industries Ltd. and State Bank of India. “If the spreads are attractive, I will consider investing” in Indian debt, he said, referring to yields relative to benchmarks.
Average spreads on Indian dollar bonds have narrowed to 322 basis points from 382 basis points, or 3.82 percentage points, on Nov. 5, HSBC data show.
Indian banks borrowed an average 923 billion rupees ($20.3 billion) a day from the Reserve Bank of India last quarter, the most since 2000, as they struggled to meet rising demand for loans. The overnight borrowing rate between local banks was 6.38 percent last week, up from 5.5 percent a week earlier.
Deposit Growth
Deposits grew 14.7 percent in the two weeks ended Dec. 17 from a year earlier, lagging behind a 23.7 percent increase in lending, according to central bank data.
India’s state-run banks need to raise more capital to sustain credit growth, Chakravarthy Rangarajan, the prime minister’s chief economic adviser, said in New Delhi on Jan. 7.
The cost of protecting the debt of government-owned State Bank of India, which some investors perceive as a proxy for the nation, fell six basis points this month to 154 basis points on Jan. 6, according to CMA credit-default swaps prices.
Credit swaps pay the buyer face value in exchange for the underlying securities or the cash equivalent should a borrower fail to adhere to its debt agreements. The contracts rise when creditworthiness deteriorates and fall when it improves.
Issuance may revive across Asia, according to Aberdeen.
“A few Chinese companies and other Asian companies that did not go through with their issuance plans are now coming back,” Faddoul said. “January is when activity picks up and you have more people present to drive appetite.”
Yields Fall
The rate on emerging-market sovereign debt was 5.82 percent on Jan. 6, down from a five-month high of 5.99 on Dec. 16, according to an index compiled by JPMorgan Chase & Co. The spread to U.S. Treasuries narrowed to 229 basis points from 248 at the end of last year.
Elsewhere in Indian markets, the rupee had a weekly drop as investors bought dollars on rising confidence in the U.S. economy. The rupee declined 1.5 percent to 45.3850 per dollar, according to data compiled by Bloomberg.
Indian government bonds fell last week, pushing yields to the highest level in a month, on speculation the central bank will resume raising rates this month to slow food-price inflation.
“There are still three more weeks before the monetary policy action and the Reserve Bank of India should watch the behavior of the prices,” Chakravarthy Rangarajan, chairman of the Prime Minister’s Economic Advisory Council, said in an interview on Jan. 7 in Gurgaon, near New Delhi. “If prices continue to remain sticky, then probably some action will be required.”
The yield on the benchmark 7.80 percent bond due in May 2020 rose seven basis points to 8.2 percent on Jan. 7, according to the central bank’s trading system.
Food prices surged 18.32 percent in the week ended Dec. 25 from a year earlier, the most since July, according to a commerce ministry statement. The central bank is set to review monetary policy on Jan. 25.
Saturday, January 8, 2011
Facing Scrutiny, Banks Slow Pace of Foreclosures
Bollywood star Shah Rukh Khan paid a record $2.4 million to field left-handed Indian batsmen Gautam Gambhir in his Kolkata Knight Riders Indian Premier League cricket team.
Gambhir’s was the opening sale in an auction of players in the southern city of Bangalore today in which another Indian all-rounder, Yusuf Pathan, was bought by the same team for $2.1 million. Former Indian captain Saurav Ganguly and West Indies batsman Chris Gayle did not receive any bids.
The Indian Premier League Twenty20 cricket tournament is a fast-paced form of the traditional five-day sport that features four-hour matches accompanied by blaring music between bowlers’ deliveries and cheerleaders.
England batsman Kevin Pietersen and Andrew Flintoff were the previous highest paid players in the league and went for $1.55 million in 2009, according to Agence France-Presse.
Robin Uthappa, another Indian batsman, was sold in the third session of the auction for $2.1 million to Team Pune. The auction of 350 domestic and international players ends tomorrow and unsold players will be put up for sale a second time.
The contracts with players are for two years and the team managements have the option to renew them for a third year on the same terms and conditions as the initial two years, according to a statement issued by the league.
The 10 participating teams have a total of $72.3 million to spend on players, according to the statement.
Gambhir’s was the opening sale in an auction of players in the southern city of Bangalore today in which another Indian all-rounder, Yusuf Pathan, was bought by the same team for $2.1 million. Former Indian captain Saurav Ganguly and West Indies batsman Chris Gayle did not receive any bids.
The Indian Premier League Twenty20 cricket tournament is a fast-paced form of the traditional five-day sport that features four-hour matches accompanied by blaring music between bowlers’ deliveries and cheerleaders.
England batsman Kevin Pietersen and Andrew Flintoff were the previous highest paid players in the league and went for $1.55 million in 2009, according to Agence France-Presse.
Robin Uthappa, another Indian batsman, was sold in the third session of the auction for $2.1 million to Team Pune. The auction of 350 domestic and international players ends tomorrow and unsold players will be put up for sale a second time.
The contracts with players are for two years and the team managements have the option to renew them for a third year on the same terms and conditions as the initial two years, according to a statement issued by the league.
The 10 participating teams have a total of $72.3 million to spend on players, according to the statement.
Asian Stocks Rise a Fourth Week as Dollar, U.S. Reports Boost Exporters
Asian stocks rose for a fourth straight week as exporters gained on a rising dollar and U.S. economic reports that boosted confidence in the world’s largest economy.
Toyota Motor Corp., an automaker that gets more than a quarter of its revenue from North America, gained 7.3 percent in Tokyo. Nissan Motor Co., Japan’s third-biggest carmaker by sales, soared 11 percent, while Hynix Semiconductor Inc., the world’s second-largest computer-memory chipmaker, jumped 8.8 percent in Seoul. Hyundai Motor Co., South Korea’s No. 1 vehicle maker, surged 14 percent.
“There are mounting expectations about an economic recovery in the U.S.,” said Naoki Fujiwara, who helps oversee $6 billion in Tokyo at Shinkin Asset Management Co.
The MSCI Asia Pacific Index rose 0.1 percent this week. The gauge surged to its highest level in 2 1/2 years on Jan. 4 as data on U.S. manufacturing boosted optimism that a recovery in the world’s largest economy is strengthening.
The U.S. jobless rate fell to 9.4 percent in December as payrolls increased 103,000, according to a Labor Department report released yesterday in Washington after Asian markets closed. The increase in jobs was less than the median forecast of 150,000 in a Bloomberg News survey. Still, a report earlier in the week showed the average number of applications for jobless benefits over the past four weeks dropped to the lowest level since July 2008.
China, Japan
The Shanghai Composite Index climbed 1.1 percent in China, after a slowdown in manufacturing boosted speculation that inflation eased last month, reducing pressure on the government to impose further curbs to rein in rising property prices.
In Japan, the Nikkei 225 Stock Average rose 3.1 percent as a stronger dollar boosted the profit outlook for Japanese exporters. Markets in Japan, China, Australia and New Zealand were closed on Jan. 3 for a holiday.
Hong Kong’s Hang Seng Index gained 2.8 percent, and South Korea’s Kospi index rose 1.7 percent. Australia’s S&P/ASX 200 Index declined 0.9 percent.
The MSCI Asia Pacific 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. Stocks in the gauge trade at an average 14.2 times estimated earnings, compared with about 22.7 times at the start of 2010.
Dollar Rises
The dollar had its biggest weekly gain since August against the currencies of major trading partners as evidence of a U.S. economic recovery spurred demand for assets denominated in the greenback.
IntercontinentalExchange Inc.’s Dollar Index, which tracks the greenback against the currencies of six major U.S. trading partners including the yen, increased 2.7 percent to 81.136 at 5 p.m. yesterday in New York, from 79.028 on Dec. 31. The gauge of the greenback rose yesterday for a fifth consecutive day.
“The growth outlook has improved quite a bit,” said Jens Nordvig, a managing director of currency research at Nomura Holdings Inc. in New York. “There is a much more dollar-bullish sentiment that is starting to develop.”
A higher dollar boosts the overseas revenue of Asian exporters when converted into local currencies.
Toyota, the world’s largest automaker, jumped 7.3 percent to 3,455 yen this week in Tokyo, while Nissan soared 11 percent to 861 yen.
Hyundai Motor surged 14 percent to 198,000 won this week in Seoul after it sold 33 percent more vehicles in the U.S. last month. Hynix Semiconductor soared 8.8 percent to 26,100 won.
Hong Kong Gains
Among Chinese exporters to gain on the better outlook for the U.S. economy, Foxconn International Holdings Ltd., the world’s biggest contract maker of mobile phones, gained 6.5 percent to HK$5.78 in Hong Kong this week, while Li & Fung Ltd., the largest supplier to Wal-Mart Stores Inc., gained 3.9 percent to HK$46.85.
U.S. government data released on Jan. 6 showed the average number of applications for jobless benefits over the past four weeks dropped to 410,750, the lowest level since July 2008.
Separately, the Institute for Supply Management’s manufacturing index climbed to 57 last month from 56.6 in November. The non-factory index, which covers about 90 percent of the economy, rose to 57.1, exceeding the median forecast of economists surveyed by Bloomberg News, from 55 in November. A reading greater than 50 points to expansion.
Commodity stocks declined this week as the dollar strengthened, dragging oil and metal prices lower by curbing their attractiveness as an alternative investment.
Commodities Under Pressure
“Soft commodities may be under pressure because of too much speculation previously,” said Danny Yan, a Hong Kong-based fund manager at Haitong International Asset Management, which oversees about $400 million. “With a rebounding U.S. dollar and sufficient global supply, they may see some profit taking.”
Newcrest Mining Ltd. sank 4.5 percent to A$38.61 this week in Sydney, and BHP Billiton Ltd., the world’s biggest mining company, slid 1.4 percent to A$44.62. Rio Tinto Group, the world’s No. 3 miner, retreated 1.2 percent to A$84.48.
Cnooc Ltd., China’s largest offshore oil producer, slid 0.3 percent to HK$18.38 in Hong Kong.
Crude oil for February delivery declined about 3.3 percent this week through Thursday in New York, while the London Metal Exchange Index of six metals including copper and aluminum dropped about 0.5 percent. Gold futures for February delivery declined for the fourth straight day yesterday.
Samsung, Acer
Samsung Electronics Co., the world’s largest maker of televisions, sank 3 percent to 921,000 won this week in Seoul after saying operating income fell 13 percent from a year earlier to 3 trillion won ($2.7 billion) in the three months ended December, lower than average analyst estimates compiled by Bloomberg.
Acer Inc., the world’s second-largest computer maker by market share, tumbled 8.1 percent to NT$82.80 in Taipei after saying snowstorms in Europe hurt its revenue for last quarter.
Yahoo Japan Corp., the operator of Japan’s most-visited Internet portal, slipped 4.1 percent to 30,200 yen in Tokyo after Goldman Sachs Group Inc. rated the stock “sell” in new coverage.
Toyota Motor Corp., an automaker that gets more than a quarter of its revenue from North America, gained 7.3 percent in Tokyo. Nissan Motor Co., Japan’s third-biggest carmaker by sales, soared 11 percent, while Hynix Semiconductor Inc., the world’s second-largest computer-memory chipmaker, jumped 8.8 percent in Seoul. Hyundai Motor Co., South Korea’s No. 1 vehicle maker, surged 14 percent.
“There are mounting expectations about an economic recovery in the U.S.,” said Naoki Fujiwara, who helps oversee $6 billion in Tokyo at Shinkin Asset Management Co.
The MSCI Asia Pacific Index rose 0.1 percent this week. The gauge surged to its highest level in 2 1/2 years on Jan. 4 as data on U.S. manufacturing boosted optimism that a recovery in the world’s largest economy is strengthening.
The U.S. jobless rate fell to 9.4 percent in December as payrolls increased 103,000, according to a Labor Department report released yesterday in Washington after Asian markets closed. The increase in jobs was less than the median forecast of 150,000 in a Bloomberg News survey. Still, a report earlier in the week showed the average number of applications for jobless benefits over the past four weeks dropped to the lowest level since July 2008.
China, Japan
The Shanghai Composite Index climbed 1.1 percent in China, after a slowdown in manufacturing boosted speculation that inflation eased last month, reducing pressure on the government to impose further curbs to rein in rising property prices.
In Japan, the Nikkei 225 Stock Average rose 3.1 percent as a stronger dollar boosted the profit outlook for Japanese exporters. Markets in Japan, China, Australia and New Zealand were closed on Jan. 3 for a holiday.
Hong Kong’s Hang Seng Index gained 2.8 percent, and South Korea’s Kospi index rose 1.7 percent. Australia’s S&P/ASX 200 Index declined 0.9 percent.
The MSCI Asia Pacific 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. Stocks in the gauge trade at an average 14.2 times estimated earnings, compared with about 22.7 times at the start of 2010.
Dollar Rises
The dollar had its biggest weekly gain since August against the currencies of major trading partners as evidence of a U.S. economic recovery spurred demand for assets denominated in the greenback.
IntercontinentalExchange Inc.’s Dollar Index, which tracks the greenback against the currencies of six major U.S. trading partners including the yen, increased 2.7 percent to 81.136 at 5 p.m. yesterday in New York, from 79.028 on Dec. 31. The gauge of the greenback rose yesterday for a fifth consecutive day.
“The growth outlook has improved quite a bit,” said Jens Nordvig, a managing director of currency research at Nomura Holdings Inc. in New York. “There is a much more dollar-bullish sentiment that is starting to develop.”
A higher dollar boosts the overseas revenue of Asian exporters when converted into local currencies.
Toyota, the world’s largest automaker, jumped 7.3 percent to 3,455 yen this week in Tokyo, while Nissan soared 11 percent to 861 yen.
Hyundai Motor surged 14 percent to 198,000 won this week in Seoul after it sold 33 percent more vehicles in the U.S. last month. Hynix Semiconductor soared 8.8 percent to 26,100 won.
Hong Kong Gains
Among Chinese exporters to gain on the better outlook for the U.S. economy, Foxconn International Holdings Ltd., the world’s biggest contract maker of mobile phones, gained 6.5 percent to HK$5.78 in Hong Kong this week, while Li & Fung Ltd., the largest supplier to Wal-Mart Stores Inc., gained 3.9 percent to HK$46.85.
U.S. government data released on Jan. 6 showed the average number of applications for jobless benefits over the past four weeks dropped to 410,750, the lowest level since July 2008.
Separately, the Institute for Supply Management’s manufacturing index climbed to 57 last month from 56.6 in November. The non-factory index, which covers about 90 percent of the economy, rose to 57.1, exceeding the median forecast of economists surveyed by Bloomberg News, from 55 in November. A reading greater than 50 points to expansion.
Commodity stocks declined this week as the dollar strengthened, dragging oil and metal prices lower by curbing their attractiveness as an alternative investment.
Commodities Under Pressure
“Soft commodities may be under pressure because of too much speculation previously,” said Danny Yan, a Hong Kong-based fund manager at Haitong International Asset Management, which oversees about $400 million. “With a rebounding U.S. dollar and sufficient global supply, they may see some profit taking.”
Newcrest Mining Ltd. sank 4.5 percent to A$38.61 this week in Sydney, and BHP Billiton Ltd., the world’s biggest mining company, slid 1.4 percent to A$44.62. Rio Tinto Group, the world’s No. 3 miner, retreated 1.2 percent to A$84.48.
Cnooc Ltd., China’s largest offshore oil producer, slid 0.3 percent to HK$18.38 in Hong Kong.
Crude oil for February delivery declined about 3.3 percent this week through Thursday in New York, while the London Metal Exchange Index of six metals including copper and aluminum dropped about 0.5 percent. Gold futures for February delivery declined for the fourth straight day yesterday.
Samsung, Acer
Samsung Electronics Co., the world’s largest maker of televisions, sank 3 percent to 921,000 won this week in Seoul after saying operating income fell 13 percent from a year earlier to 3 trillion won ($2.7 billion) in the three months ended December, lower than average analyst estimates compiled by Bloomberg.
Acer Inc., the world’s second-largest computer maker by market share, tumbled 8.1 percent to NT$82.80 in Taipei after saying snowstorms in Europe hurt its revenue for last quarter.
Yahoo Japan Corp., the operator of Japan’s most-visited Internet portal, slipped 4.1 percent to 30,200 yen in Tokyo after Goldman Sachs Group Inc. rated the stock “sell” in new coverage.
India Eases Coastal Development Law, Opening Way for New Mumbai Buildings
India eased restrictions on construction along the Mumbai coastline, opening the way for the redevelopment of neglected buildings and neighborhoods.
The Coastal Regulation Zone Notification 2011, published yesterday on the Environment Ministry’s website, replaces a law introduced 20 years ago to manage coastal construction. The new rules include special provisions for Greater Mumbai to allow for work on buildings previously in “no development” zones.
“With this relaxation a lot of projects for dilapidated buildings along the coast and slum redevelopment in Mumbai will take off,” Sunil Mantri, chairman of the Maharashtra Chamber of Housing Industry, said today by telephone.
Among the new measures, the “no development” zone has been reduced so that houses for fishing communities can be built 100 meters (330 feet) from the high-tide line, compared with the previous 200-meter stipulation.
The law also includes provisions to protect a chain of coastal lagoons known as the backwaters in the southern state of Kerala, and environmentally sensitive areas of Goa.
The Coastal Regulation Zone Notification 2011, published yesterday on the Environment Ministry’s website, replaces a law introduced 20 years ago to manage coastal construction. The new rules include special provisions for Greater Mumbai to allow for work on buildings previously in “no development” zones.
“With this relaxation a lot of projects for dilapidated buildings along the coast and slum redevelopment in Mumbai will take off,” Sunil Mantri, chairman of the Maharashtra Chamber of Housing Industry, said today by telephone.
Among the new measures, the “no development” zone has been reduced so that houses for fishing communities can be built 100 meters (330 feet) from the high-tide line, compared with the previous 200-meter stipulation.
The law also includes provisions to protect a chain of coastal lagoons known as the backwaters in the southern state of Kerala, and environmentally sensitive areas of Goa.
Friday, January 7, 2011
Small Companies Pursue Big Break at Tech Conference
LAS VEGAS — The 2,700 technology companies selling their wares at the Consumer Electronics Show here come in all shapes and sizes. At one end of the spectrum are the likes of Microsoft, Samsung and Sony, with their gargantuan booths on the show floor, where they ply potential business partners and journalists with drinks, food and private meetings with executives.
At the other end is Scott Starrett.
Mr. Starrett, 39, is here with the three other employees of Cervantes Mobile, a company he started last year. It makes one product — called Jorno, a foldable keyboard for handheld devices — which does not, by the strictest definition of the word, exist.
The company is financed with capital from Mr. Starrett’s family and friends and his personal bank account. And though he seems a bit frazzled in his 10-foot-by-10-foot booth set against the northernmost wall of the Las Vegas Convention Center, he insists that he mainly feels optimistic.
His brand of cheerfulness is easy to find here. Dozens of dreamers, serial entrepreneurs, husband-and-wife teams, copycats and garage-based inventors occupy the tiniest booths in the farthest reaches of the convention hall. For them, the electronics show is an opportunity to meet with distributors and potential business partners and maybe to ride a wave of publicity generated by the show into the public eye.
Usually, it is also a costly undertaking, a calculated gamble that the thousands of dollars it costs to travel to Las Vegas and rent a booth will pay off in the form of signed deals or at least greater momentum. But in a show that sprawls over 1.6 million square feet across three exhibition halls, it is not easy to gain a foothold.
“You’re just placing bets, essentially,” said Mr. Starrett, who paid $4,800 for his booth and several thousand dollars for expenses for the trip here from Los Angeles.
It is a long shot that can pay off, said Jake Sigal, a 29-year-old entrepreneur who first attended the convention in 2008. He did not have a booth then. Instead, he talked companies that he wanted to work with into meeting with him at a Starbucks in the convention center. Most doubted he would succeed; some, he said, admired his pluck and offered him a job.
And he did persuade Pandora, the Internet music service, to allow him to build an Internet radio that plays stations from the service. He bought booth space the next year, and was able to reach a similar deal with NPR after one of its employees happened to walk by his booth.
“I guarantee that if I would have called NPR in the middle of July, they would have said no,” said Mr. Sigal, who is from Columbus, Ohio.
Livio Radio, Mr. Sigal’s company, has begun to manufacture car stereos as well. On Friday, the company announced a third partnership, with Grooveshark, another Internet music service.
The Consumer Electronics Association, the trade organization that organizes C.E.S., tries to encourage small businesses. It hosts competitions for companies with innovative products, offering free or discounted booth space to the winners. At the show itself, it hosts events to showcase small businesses and holds mentoring programs.
Aaron LeMieux, who is 36 and from Cleveland, won discounted space at this year’s show after giving a three-minute pitch for the nPower Peg, a sticklike object that harnesses kinetic energy, the type of energy created when an object is put in motion, like when a user walks around with it in a backpack. He believes that similar technology will eventually be used to power pacemakers and to capture the energy of ocean waves.
But for now, it is working with cellphones. The device creates enough energy in 15 minutes of walking to allow for a minute of talk time on a typical cellphone, Mr. Lemieux said.
He first came up with the idea when hiking the Appalachian Trail in 1996.
“I knew I had an excess of kinetic energy, yet I was stopping into town to buy batteries,” he said. “Fifteen hundred miles gave me a lot of time to think, and I figured out a way to convert kinetic energy into electric energy. It took 10 years.”
Mr. Starrett’s trip from concept to execution is shaping up to be considerably quicker. He first had the idea for a folding keyboard last year, and he decided he was far enough along to commit to coming to the convention in late spring.
Despite his best efforts, however, production could not quite keep pace with his enthusiasm. The Cervantes team arrived in Las Vegas with two model keyboards, rather than a working prototype. One was locked in the closed position; the other was fixed in the open position. Hinges, it turned out, are tricky.
Mr. Starrett acknowledged the awkwardness of peddling a foldable keyboard that cannot actually fold. But he said he took heart in knowing that every year some of the products drawing all the attention to the larger booths are not fully functional either, noting Microsoft’s false start on tablet computers last year, or the recent delays with Google TV.
“As an entrepreneur, it’s nice to know you can stumble,” he said. “I just don’t want to stumble too often.”
At the other end is Scott Starrett.
Mr. Starrett, 39, is here with the three other employees of Cervantes Mobile, a company he started last year. It makes one product — called Jorno, a foldable keyboard for handheld devices — which does not, by the strictest definition of the word, exist.
The company is financed with capital from Mr. Starrett’s family and friends and his personal bank account. And though he seems a bit frazzled in his 10-foot-by-10-foot booth set against the northernmost wall of the Las Vegas Convention Center, he insists that he mainly feels optimistic.
His brand of cheerfulness is easy to find here. Dozens of dreamers, serial entrepreneurs, husband-and-wife teams, copycats and garage-based inventors occupy the tiniest booths in the farthest reaches of the convention hall. For them, the electronics show is an opportunity to meet with distributors and potential business partners and maybe to ride a wave of publicity generated by the show into the public eye.
Usually, it is also a costly undertaking, a calculated gamble that the thousands of dollars it costs to travel to Las Vegas and rent a booth will pay off in the form of signed deals or at least greater momentum. But in a show that sprawls over 1.6 million square feet across three exhibition halls, it is not easy to gain a foothold.
“You’re just placing bets, essentially,” said Mr. Starrett, who paid $4,800 for his booth and several thousand dollars for expenses for the trip here from Los Angeles.
It is a long shot that can pay off, said Jake Sigal, a 29-year-old entrepreneur who first attended the convention in 2008. He did not have a booth then. Instead, he talked companies that he wanted to work with into meeting with him at a Starbucks in the convention center. Most doubted he would succeed; some, he said, admired his pluck and offered him a job.
And he did persuade Pandora, the Internet music service, to allow him to build an Internet radio that plays stations from the service. He bought booth space the next year, and was able to reach a similar deal with NPR after one of its employees happened to walk by his booth.
“I guarantee that if I would have called NPR in the middle of July, they would have said no,” said Mr. Sigal, who is from Columbus, Ohio.
Livio Radio, Mr. Sigal’s company, has begun to manufacture car stereos as well. On Friday, the company announced a third partnership, with Grooveshark, another Internet music service.
The Consumer Electronics Association, the trade organization that organizes C.E.S., tries to encourage small businesses. It hosts competitions for companies with innovative products, offering free or discounted booth space to the winners. At the show itself, it hosts events to showcase small businesses and holds mentoring programs.
Aaron LeMieux, who is 36 and from Cleveland, won discounted space at this year’s show after giving a three-minute pitch for the nPower Peg, a sticklike object that harnesses kinetic energy, the type of energy created when an object is put in motion, like when a user walks around with it in a backpack. He believes that similar technology will eventually be used to power pacemakers and to capture the energy of ocean waves.
But for now, it is working with cellphones. The device creates enough energy in 15 minutes of walking to allow for a minute of talk time on a typical cellphone, Mr. Lemieux said.
He first came up with the idea when hiking the Appalachian Trail in 1996.
“I knew I had an excess of kinetic energy, yet I was stopping into town to buy batteries,” he said. “Fifteen hundred miles gave me a lot of time to think, and I figured out a way to convert kinetic energy into electric energy. It took 10 years.”
Mr. Starrett’s trip from concept to execution is shaping up to be considerably quicker. He first had the idea for a folding keyboard last year, and he decided he was far enough along to commit to coming to the convention in late spring.
Despite his best efforts, however, production could not quite keep pace with his enthusiasm. The Cervantes team arrived in Las Vegas with two model keyboards, rather than a working prototype. One was locked in the closed position; the other was fixed in the open position. Hinges, it turned out, are tricky.
Mr. Starrett acknowledged the awkwardness of peddling a foldable keyboard that cannot actually fold. But he said he took heart in knowing that every year some of the products drawing all the attention to the larger booths are not fully functional either, noting Microsoft’s false start on tablet computers last year, or the recent delays with Google TV.
“As an entrepreneur, it’s nice to know you can stumble,” he said. “I just don’t want to stumble too often.”
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