WEEKEND COVERAGE: 7 APRIL – 8 APRIL 2012

Asia

Ahead of a G20 meet in Washington later in April, Japanese Finance Minister Jun Azumi stated that it would engage in dialogue with China over increasing their contributions to the IMF Rescue fund aimed at mitigating the euro zone debt crisis. The European Union expects the G20 nations to come to an agreement to increase contribution to the IMF’s fund as it increased its own rescue fund to EUR 700 bn. (Reuters)

Indian jeweller’s association suspended its three-week old strike after Finance Minister Pranab Mukherjee stated that the excise duty imposed on unbranded jewellery could be rolled back. During the Union Budget, the government proposed imposing excise duty on unbranded jewellery of 0.3 percent and a tax collected at source on transactions worth more than INR 200,000. The import duty on gold was also doubled to 4 percent, all of which caused the strike.(Gulf News/Reuters)

Indian banking institutions are expecting the The Reserve Bank of India (RBI) to decrease the cash reserve ratio (CRR) during its annual monetary policy for FY12-13 on April 17, 2012. In related news, mortgage lender HDFC stated that home loan rates could decline by 0.50-0.75 percent in the coming months, contingent upon RBI’s review. (Economic Times & Moneycontrol)

Annual inflation in Mauritius declined for the fourth consecutive month to 5.9 percent in March as against 6.2 percent in February. Consumer prices increased by 0.3 percent in March over February on account of rise in prices of food, non-alcoholic beverages, housing, utilities and healthcare services. (Reuters)

Elpida Memory Inc. – Japanese memory-chip manufacturer, which filed for bankruptcy in February, has received bids from TPG Capital and Hony Capital. U.S based Micron Inc. has also been in talks to acquire the firm. (Bloomberg)

China’s decision to cut import duties on certain energy products, raw materials and consumer goods was praised by the World Trade Organization. The move would benefit imports from countries which have signed free trade agreements with China. With imports dropping since late last year, data from the country’s General Administration of Customs revealed that imports for January-February period increased to USD 268.6 bn. (China Daily)

Hitachi Ltd. – Co. is in talks to acquire eBworx Bhd, a Malaysian financial IT solutions company. The acquisition would enable the company to expand operations in South-east Asia and China, and would also setup a service centre targeting Japanese and local financial companies expanding operations in Asia. (The Star, Malaysia)

Private Equity investments in India declined to USD 1.88 b for quarter ended March comprising of a total of 90 deals.  Healthcare and life sciences sectors witnessed greater PE investments of USD 581 million, a 31 percent share of the total deal value across 14 investments during 2012. On a Y-o-Y basis for the same period, 107 transactions witnessed investments of USD 3.61 bn.  (Business Standard)

Europe

Thomas Cook – Co is close to securing a loan of GBP 1.2 bn from lenders which include Royal Bank of Scotland and Barclays plc. The company would extend the maturity of its bank loans until 2015 and would be faced with a higher interest rate and a one-off fee on its loans. The lending firms would also have the right to acquire a 5 percent stake in the company’s shares. (Reuters)

Iran has stopped exporting oil to Greek refining companies, Hellenic Petroleum and Motor Oil and could also cut supplies to Royal Dutch Shell over unpaid bills. Iran is already reeling under the impact of sanctions; it could also face a ban from the European Union on import of oil from the country from 1 July onwards. (Gulf News)

According to data from UK-based recruitment firm Morgan McKinley, employment rates fell by 57 percent on a Y-o-Y basis in the financial sector in the UK for March 2012. Median starting remuneration packages for senior workers declined by 16.5 percent for March. (Reuters)

Romanian government backed out of a deal to sell its state-owned copper mine Cupru Min Abrud for EUR 200.8 m to Canadian firm, Roman Copper Corp on account of failure to agree on certain terms of the deal. Romanian Economic Minister, Lucian Bode, stated that deal, which was a part of a USD 2 bn privatization plan agreed with international lenders, could not reach an agreement with the firm after 10 days of intense negotiations. The conditions stated that – all privatization contracts mandated public disclosure, payment of the deal to be settled within 30 days and the company had to set up a collateral deposit of EUR 32.27 m as a guarantee for future environment investment, which affected the deal. (Reuters)

Airbus – Plane manufacturer received 90 orders for the first 3 months of 2012. Sales of single-aisle aircraft, the A-320 dominated sales and the company also faced 10 cancellation orders for the year, taking its tally to 131 aircrafts. In related news, Boeing announced 1Q12 delivery contracts of 137 commercial aircrafts. (Reuters)

PKO Bank Polski SA – Polish bank will sell a portfolio of Polish Zloty (PLN) 700 m (USD 220.2 m) worth of non-performing retail loans for 21 percent of their value to Intrum Justitia. PKO will also sell PLN 270 m of corporate bad loans for PLZ 23 m to Kruk SA, a company which manages receivables of banks and debt. (Bloomberg)

North America

United States President Mr. Barack Obama signed a bipartisan Jumpstart Our Business Startups (JOBS) Act, to provide assistance to small businesses and start-ups in raising capital which could spur hiring activity. The bill would enable companies having annual gross revenues of less that USD 1 bn to be exempted from the Securities Exchange Commission’s (SEC) financial reporting requirements, thus reducing red tape and costs for the companies. (CNBC)

Rating agency Egan-Jones cut the sovereign rating of United States to ‘AA’ from ‘AA+’ with a negative watch on account of the government’s lack of solutions to reduce its federal debt. According to the agency, US federal deficit is expected to be in the region of USD 1.4 tn, debt at USD 16.7 tn for 2012 and a total GDP of USD 15.7 tn, leaving the debt-to-GDP ratio of 106 percent. The report also stated that the Congress government’s plan of cutting down on spending by USD 1.5 tn in over 10 years did not enhance credit quality in the country. (CNBC)



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