pryvateer.news : Global online news portal for business success. Provides daily information on economics (and a little politics) necessary to identify and act on global business opportunities.
Slow news day, as we perused the world economic and political news, a few things of note:
1. Commentary on the expected budget from the Tories in Canada. PM Harper's cut in "Status of Women" programmes on first blush appears to be anti-women but when you understand the plethoria of women's programmes funded from Ottawa, you could save that much mone by just consolidating programmes and eliminating overhead. Anytime a politician decides to take less money and let the true owners - us -keep it, kudo's for having some economic savy.
2. Competing news stories on energy and fuel, if you have followed all the news and commentaries, it appears you are damned if you do, damned if you don't. The most effective energy strategy for a government in the short term is to explore and extract (utilize) any resources while decentralzing control over development. Each locality has the potential to become self-sufficient; e.g. tidal and wind in New England, Atlantic Canada or BC; solar in Southwestern US and Mexico; geothermal in Alberta, Mountain States US, etc. You get the point. The most effective long term strategy is to allow industry to obsolete carbon with a cleaner replacement. All government can do is create a market and let the worlds entrepreneurs solve the proble. BTW - don't allow the hoax of man-made global warming stampede us into bad choices. The latest estimate is it will take over $1 trillion dollars to reduce man-made carbon dioxide emissions by 10% which sounds like allot until you realize that human activity only contributes 2.5% of the total. So do the math, 1/13 of the US economy to reduce human based carbon dioxide emission by .25% - what a deal!
3. The relative health of the global economy and the stark contrast with those governments that don't get it. India has been a reoccurring theme around here and the recent growth of their economy is based on one factor - the government getting out of the way. The English usually leave behind many positive things from their colonialzation, rule of law - property rights - entrepreneurship, but when they left India the parting gift was the worst: socialism. India has woke up to the fact that the country was under performing and it was self-imposed, hopefully this is exactly the same dynamic we are witnessing in China. Now if only the continent of Africa would take notice.
AUSTRALIAN mergers and acquisitions activity jumped almost 56 per
cent in the first three quarters of this year, led by blistering
activity in the retail sector, including the $17 billion bid for Coles
Myer.
Private equity is at the heart of the new boom, with the industry's
happiest hunting ground - the retail sector - generating over $US21
billion ($28 billion) of the $US115 billion of deals.
The largest retail deal by far was Kohlberg Kravis Roberts-led
bid for Coles Myer. But other large private equity deals in the sector
include Newbridge Capital's $1.4 billion acquisition of the Myer
department store chain; Ironbridge Capital's $500 million purchase of
Super Amart; Affinity Equity Partners' $450 million bid for Colorado
Group; and CCMP Capital Asia and Pacific Equity Partners' $300 million
plus acquisition of vacuum cleaner retailer Godfrey's.
Business confidence at large manufacturers rose to a
two-year high in the three months through September, according to the
Bank of Japan's latest "tankan" survey, despite forecasts by economists
it would either remain flat or slightly decline.
The BOJ said Monday its business sentiment index rose
for the second straight quarter, increasing to 24 for large
manufacturers from 21 in July -- the highest rise since September 2004,
when the index hit 26. Business sectors including industrial machinery,
electrical machinery, and iron and steel helped push up the figures.
However, large manufacturers appeared to be less
confident about the coming quarter. In the three months to December,
the index is projected at 21, down 3 points from the current index.
Many economists expect business in the United States to continue to
slow, dealing a negative blow to Japan's economy.
The tankan report boosted investors' confidence in the
economy, sending the 225-issue Nikkei stock average to a four-week high
Monday, closing at 16,254.29.
(BEIJING)
A black Mercedes-Benz sedan stopped by the gleaming Plaza 66, a
five-storey chrome-and-glass emporium of high-end brands in downtown
Shanghai. Michael Yan, 46, board chairman of a local real estate
company, stepped out and strolled amid Gucci, Prada and Versace inside
the mall, hunting for valuable items that match his position of an
annual income of over one million yuan (S$199,400).
Across the street from Plaza 66, Zhang Simin was also hunting for
valuable items - digging in a dustbin for discarded plastic bottles to
sell. 'In the past, everybody had almost the same income, so life was
about the same for everybody,' observed the 38-year-old farmer from
south-west China's Sichuan province. 'Nowadays, however, some people
are getting increasingly richer while people like me still lead a hard
life.'
Mr Zhang, who arrived at this leading metropolis and economic hub
four years ago, had tried to make a living as a construction worker and
vegetable vendor, but ended up in collecting recyclable garbage for a
meager 600 yuan per month.
CORPORATE sentiment in Japan improved unexpectedly during September, the Bank of Japan reported yesterday in its latest quarterly tankan survey.
Booster: The favourable tankan drove the Tokyo stock
market to a one-month high with the Nikkei 225 rising
126.71 points to 16,254.29
Coming on the heels of recent data suggesting that Japan's economic
recovery might be losing steam, the surprise news sent the Tokyo stock
market to a one-month high and gave a boost to prime minister Shinzo
Abe's new Cabinet.
The Nikkei 225 stock index rose by 126.71
points to 16,254.29, while government bonds fell on expectations the
favourable tankan might encourage the BoJ to raise interest rates.
However, Mr Abe urged the central bank yesterday not to raise rates
until economic recovery is more fully entrenched and deflation has been
fully purged from the economy.
Analysts had predicted that the September tankan would show no improvement, or even a setback.
But the key diffusion index measuring the balance of optimism and
pessimism among major manufacturing firms about business conditions
rose to plus 24 last month against a reading of plus 21 in June.
Internet major Yahoo is expanding its presence in India and
plans to launch up to six new portals in regional languages and acquire
or partner with an Indian company.
The company will also
increase head count at its R&D centre in Bangalore to 1,000 from
the current 800 by the end of this year. “The company is planning to
launch new portals in about two or six Indian regional languages and an
announcement to this effect is expected in the next few weeks,” said a
company spokesperson. Yahoo will add 200 software engineers at its
R&D centre at Bangalore, taking the total head count to 1,000 by
the end of the year, the official said.
The spokesperson said
Yahoo is in discussions with various Indian companies for partnerships
and acquisitions and a decision to this effect is expected in the next
six to ten months. However, the official declined to divulge further
details about the investments lined up for India. “The investments will
be made depending upon the opportunities which arise,” the company
official said.
VIKRAM S MEHTA One month is a
long time these days in the oil industry. My column four weeks back was
written against the background chatter of $100/barrel oil and deepening
concern that the government’s refusal to allow their marketing
companies to recover the costs of imported crude would push these
Navratnas to the financial edge. Today this article is being written
against a different backdrop. Prices have slid from around $75/b to
$60/b. The chatter is not whether $100 will be breached but whether
prices will come down to $50. It is not whether companies should be
handed another bailout but whether retail prices should be reduced. The
oil company executives have also dropped their hangdog expression. Last
week, the IOC chairman estimated that his company had saved Rs 600
crore during the month and that ‘underrecoveries’ had reduced from Rs
100 crore a day to Rs 50 crore. And Reliance, which had effectively
closed its pumps, was reportedly contemplating the resumption of sales.
All this in a month.
What has brought about this dramatic shift? Why have prices
suddenly reversed direction? Certainly, demand has not slowed down. And
there has been no material spurt in supplies. The physical fundamentals
have not altered. The answer lies not in economics 101 but in the
ephemeral term ‘perception’. What has changed is the perception of the
clever, young, computer bound, quantitatively inclined hedge fund
trader.
A
month back, he saw a world driven by resource nationalism; threatened
by turmoil in the Middle East and under risk from Atlantic hurricanes.
And a tight oil market in jeopardy of volatile and unexpected
disruption. He (and his ilk) bet $150 billion of their investor’s
capital on the perception that prices would not only remain high but
rise further.
A month later, he is more optimistic. The Lebanon ceasefire is
holding; oil companies’ godowns are flush with stocks to take care of
any exigency other than the deepest of winters and the anti American
rhetoric of the Presidents of Venezuela and Iran hasn’t, at least yet,
provoked anything but a verbal retort from Bush. The bears have
re-placed the bulls and the ‘hot money’ in oil funds is flowing
elsewhere. The decline in prices reflects this shift in perception.
Historically, the oil markets have driven politics.
Governments have adjusted their politics to access affordable and
secure oil supplies. Today, politics is driving the oil market. The
situation in the Middle East, the civil conditions in Nigeria or Iraq,
the ideology of other major resource holders like Russia—these are now
the lodestars. The result is that no one really knows where oil prices
are headed. People will of course speculate—some are paid to do so—but
the reality is ignorance.
Gross capital formation (GCF) in the corporate sector, at
current prices, increased 73.16% to Rs 1,26,363 crore in 2005-06 as
compared to Rs 72,974 crore in 2004-05, according to an FE Research
Bureau study of India's top 500 companies with more than Rs 100 crore
in sales. The share of gross fixed assets formation (GFAF) in GCF
increased from 71.1% in 2004-05 to 79.3% in 2005-06. Net capital
formation grew at a better rate, increasing from Rs 45,305 crore to Rs
96,984 crore, up 114%.
Reliance Industries leads the GCF chart followed by ONGC.
Industry-wise, the oil & gas group's share in total GCF was the
highest in 2005-06.
"India
Inc is growing at the blistering pace and it is not surprising that
huge capacity additions are taking place. Given this backdrop, the
gross fixed assets formation in the Indian corporate sector reflects a
far higher rate of growth," Anantpadmanabhan Sarma, exec VP, IDBI
Capital said.
Gross and net capital formation is obtained by adding increases in gross or net fixed assets and inventories.
For the study, the industries had been classified into 29
categories. The basic data was from audited annual accounts for the
period April to March 31 in the respective years 2003-04, 2004-05 and
2005-06.
Dharam Shourie The world can expect a robust economic growth of 3.6% this year, but it
could come down to 3% in 2007, according to the latest United Nations
assessment, which warned that widening global imbalances are raising
the risk of a sudden and sharp disorderly adjustment.
Pointing
to the ripple effect of the US economy and the worries about oil supply
disruptions, Josi Antonio Ocampo, Under Secretary-General for Economic
and Social Affairs, said a number of downside risks could reduce the
projection even further.
With an increasing income gap between
developing and the developed world, a "dual divergence" could be seen
alongside a "growth divergence" among the developing countries, he told
the UN's General Assembly Second Committee on economic and financial
matters yesterday.
Ocampo decribed the suspension of the UN
World Trade Organization (WTO) Doha Round of talks as a major setback.
He said the least developed countries are the most adversely affected
by trends in global disparities, and as such, development partners,
including other developing countries, should continue to increase their
support through the contribution of official development assistance
(ODA), debt reduction and the provision of market access.
10:20:58 AM comment []
Crude oil price fell to around $60 per barrel in London trades today on forecasts of further increase in inventories.
Nymex
crude lost 67 cents to $60.36 per barrel after hitting a low as $60.22
- the lowest since September 27. London Brent dropped 65 cents to
$59.80.
Updated at 1310 hrs: Crude oil recovered slightly in Asian trades today after heavy losses overnight.
The
New York's main contract, the light sweet crude for November delivery,
was up six cents to $61.09 per barrel from $61.03 dollars in late US
trade yesterday where it lost 1.88 dollars. The contract earlier hit a
low of $60.80 in Asian trade.
Turkey must accelerate democratic reforms and resolve a trade row
with Cyprus to avoid a "train crash" in its relations with the European
Union ahead of a key report on its bid to join the bloc, EU enlargement
chief Olli Rehn warned Tuesday.
"As a friend of Turkey, I want to be as frank as friends should
always be. The pace of reform has slowed down in the past 12 months,"
Rehn said at the start of a three-day visit coinciding with the first
anniversary of the start of EU-Turkey membership talks.
"It is important that new initiatives are taken and tangible
progress is achieved before the commission presents its progress report
on November 8," he told a conference at TURK-IS, Turkey's main trade
union confederation.
The EU commission has said that Ankara must respect its trade
obligations to EU-member Cyprus if it wants to keep its membership bid
on track.
It’s a proven fact that in many ways, “we are our
own worst enemy.” Negative self-talk, laziness, and lack of focus all
conspire to rob too many self-improvement seekers of the gains they
really deserve.
Asians
talk of “the monkey mind” – the interminable little voice that prattles
on as we go about our daily affairs. Dimming that voice and accepting
our present condition while seeking to do better in the future, can go
a long way toward heading us down the productive path.
Matt
Furey, fitness expert and motivational speaker writing on mattfurey.com
states: “The key to improving your body is accepting the condition
you're in right now. Not 'liking' it. Merely accepting where you are
now - letting it be okay - but also having a desire to change, and to
act upon that desire ... You can break free by accepting where you are
instead of denying it. You can break free by accepting your condition -
and while doing so, allowing positive changes to flow into your life.”
- DS
10:14:20 AM comment []
The controversy may be continuing in America, over
drilling for oil on our own shores. However, according to a Bloomberg
News story, the same hesitancy is not prevalent in China. The article
notes that although the world's most populous country was
self-sufficient in oil as recently as 1992, the nation now imports 40
percent of its energy needs, with the figure projected by the U.S.
Department of Energy to rise to 75 percent by 2025.
As
a result, China is now reportedly "scouring the backwaters of the
world, from monsoon-lashed Myanmar to the deserts of Iran, to the deep
seas off Sudan and North Korea, cutting deals with governments that the
United States and many other countries consider pariahs."
10:13:00 AM comment []
Young Americans entering the job market are "
ill-prepared" and sorely lacking in basic academic skills and more
advanced applied skills, according to a new report from The Conference
Board and the Society for Human Resource Management.
The
story posted by Financial Times notes that a survey of 431 business
leaders found "nearly three quarters of incoming high school graduates
were viewed as deficient in basic English writing skills, including
grammar and spelling. Almost 30 percent said they doubted their college
graduate employees could write a simple business letter." The story
quotes Linda Barrington, research director at The Conference Board, as
terming the findings a "warning bell," and saying, "as the economy and
the world of business change, the perceptions of employers are that we
don’t have enough excellence out there – including in our
college-educated workers – to compete. If we’re not demonstrating
excellence in communicating in English – our native language – how will
we compete internationally?"
10:11:52 AM comment []
LONDON, Oct 3 (Reuters) - Gold fell nearly one percent on
Tuesday as a drop in oil prices on healthy fuel inventories in
the United States rduceed the metal's appeal as a hedge against
inflation, dealers said.
The market ignored news that North Korea would conduct a
nuclear test in the future, but safe-haven gold was expected to
gain support from dollar weakness and seasonal physical buying
in major gold consuming countries.
"The market would be looking to external factors, especially
the dollar, oil prices and global tension," said Matthew Turner,
analyst at Virtual Metals.
Gold was under pressure because of weaker oil prices and
needed to regain $600 to rise further, he added.
Spot gold <XAU=> slipped as low as $591.70 an ounce and was
quoted at $592.80/593.80 by 0953 GMT, down from $597.50/598.25
late in New York on Monday.
Gold hit a two-week high around $606 on Sept. 28 on the back
of a recovery in oil, before dropping again to track a weaker
energy market and a firmer dollar.
Oil eased below $61 a barrel, extending a 3 percent drop in
the previous session as forecasts for a further build in fuel
stocks in the United States offset slight cuts in OPEC output.
"Falls in oil truly undermined sentiment for gold. The
market wasn't too confident about the sentiment for gold even
when prices were rising," said Hiroyuki Kikukawa, associate
director at Nihon Unicom Corp.
LONDON — Gold
prices slipped back below 600 a troy ounce today as crude oil prices
fell and weak US data suggested benign inflationary pressures, traders
said.
Spot gold was at $596,30/597,30 an ounce in early trade
compared with 597,50/598,25 late in New York yesterday. The metal is
down about 20% from its 26-year peak of $730 an ounce in mid-May.
Gold’s move below its 200-day moving-average support at
$599,68 is not a good sign, technical analysts said. Last week it hit a
two-week high at about $606 an ounce, but failed to clear resistance at
about $607/608.
“$607 is a pivotal level, it has proved to be a strong
resistance on the way up and strong support on the way down,” said a
trader.
“Apart from that, lower crude and weak US manufacturing have taken away some of the support.”
BANGKOK, Thailand (AP) Thailand's respected Central Bank chief
agreed to join the interim prime minister's Cabinet on Monday, as
the international community called for a swift return to democratic
rule some two weeks after a military coup.
U.S. Ambassador Ralph Boyce was the first foreign diplomat to
meet interim Prime Minister Surayud Chulanont since he was
appointed by the military council and took office on Sunday.
``We had a very good discussion,'' Boyce said. ``I think it's
very well known that the United States urges a speedy return to a
democratically elected government and protection of civil liberties
during the interim, and the prime minister assured me this would be
the case.''
The appointment of Bank of Thailand Governor Pridiyathorn
Devakula to the Cabinet was likely aimed at showing the business
community the post-coup regime can handle the economy. He told
reporters he expects a key position in the finance-economic sector,
but didn't elaborate.
The coup leaders have assured investors the interim government
will support local and foreign investment and give the private
sector a leading economic role.
Not everyone is happy about the federal government’s proposed $2
billion in cuts to social programs over the next two years,
particularly when the feds are sitting on a $13 billion budget surplus.
The cuts were aimed at everything from adult literacy programs to medical marijuana research and women’s rights groups.
“Likely the money from these programs will be designated for
some type of tax cut that the Harper Conservatives will announce in the
next federal election - probably sometime this spring,”Canadian Union
of Public Employees national president Paul Moist says. “When we look
at just two of these program cuts $5 million from the Status of Women
and $5.6 million from the Court Challenges program, a clear message is
being sent. The government is essentially saying that any voice given to
addressing gender inequality in this country will be further silenced -
furthermore any voices wanting to challenge the current status of the
laws of this land will be muzzled,” Moist says.
9:58:48 AM comment []
THE recent speculation that Westpac and Qantas might be about to
move about 900 jobs off-shore, apparently to India, should create a lot
of concern in the Australian community.
Both companies are considered highly recognisable symbols of
Australia, part of its folklore, and the suggestion that they might
abandon Australian workers is almost incomprehensible.
It is bad enough that foreign companies sit offshore, mostly in India, and harass us with their endless supply of telemarketers.
But it is much worse when one of our own is going to desert us.
At the time of writing this column it was up in the air as to whether or not Westpac would be going ahead with its plans.
But it would appear to be a fait accompli when it comes to the flying kangaroo’s position.
Qantas says the skills needed to upgrade its IT systems are no
longer in Australia, although this seemed to change to “that the skills
were not available to effect those systems in a cost effective way”.
Access to cheap energy is a linchpin of modern industry and civilisation. Energy, mostly from fossil fuels, allows us to heat homes, and power factories and transportation systems. Worldwide every day, we devour the energy equivalent of about 200 million barrels of oil, but much of this energy comes from coal, gas and nuclear fuel too.
