You are currently browsing the Finance & Economics category.
Financial Times – Wheat prices rose further on Friday morning in the wake of Russia’s decision to extend its grain export ban by 12 month, raising fears about a return to the food shortages and riots of 2007-08. In Mozambique, where a 30 per cent rise in bread prices triggered riots on Wednesday and Thursday, the government said seven people had been killed along with 288 wounded. The announcement by Vladimir Putin on Thursday extended an export ban first announced last month until late December 2011, sending wheat and other cereals prices to near a two-year high. Read Article
Guardian – The total number of British jobs axed by RBS and Lloyds TSB, both of which were bailed out by the taxpayer and are still part owned by the government, reached almost 45,000 today. RBS announced that it was axing 3,500 back-office jobs as a result of the sale of 318 of its branches to Santander, a move demanded by EU regulators in return for the bank’s £54bn government bailout almost two years ago. That takes the total number of posts lost since Stephen Hester took over as chief executive two years ago to almost 27,000. Read Article
ABC – The Australian Institute of Directors says the number of women in power at the country’s top companies has reached a “landmark” level. The proportion of women on boards at the ASX 200 companies hit 10 per cent yesterday with the appointment of Sam Mostyn to the board of Virgin Blue. So far this year, more than one in four new directors have been women, compared to one in 20 last year. John Colvin, from the Australian Institute of Company Directors, says the number of women appointed to ASX 200 boards has risen rapidly this year. Read article
BBC – House prices fell for the second month in a row in August, according to the Nationwide building society. Prices fell 0.9% last month, following a 0.5% decline in July, Nationwide said, adding that it was the first time that prices had fallen for two consecutive months since February 2009. The average house price now stands at just over £166,500. Nationwide said house prices had “essentially stagnated over the summer”. Read Article
CNBC – September and October hold bad news for stock markets and banks remain overleveraged as we head into the second leg of the financial crisis according to Pedro De Noronha, the managing partner at Noster Capital in London. “We are seeing one of the most challenging years for investors ever,” De Noronha told CNBC Tuesday. “Major investors are simply leaving the market. When it looks like markets are about to fall off the cliff they rally and vice versa. Read Article
Wall Street Journal – A top shareholder in Afghanistan’s largest bank called on the U.S. to shore up the lender after depositors withdrew about a third of its cash reserves in two days, while the country sought to avert a destabilizing crisis at a crucial moment in the fight against the Taliban. Mahmood Karzai, brother of Afghanistan’s president and the third-largest shareholder in Kabul Bank, urged the U.S. to calm the situation, saying the lender could keep up with the pace of withdrawals for only a few more days. Read Article
Financial Times – Alistair Darling admitted on Wednesday that Britain’s controversial supertax on bankers’ bonuses had failed to change the industry’s behaviour over pay as “imaginative” financiers devised ways to avoid it. The former Labour chancellor of the exchequer, who introduced the levy last year amid an unprecedented outcry over bank pay, said he thought it was unlikely that the tax would be reinstated by the current Con-Lib coalition government. Read Article
BBC – Four of the “big six” UK energy suppliers are to be investigated amid concerns of mis-selling to customers, the regulator has announced. Npower, Scottish Power, Scottish and Southern Energy, and EDF Energy all face questions over face-to-face and telephone sales of energy contracts. Ofgem said it had received information from a variety of sources suggesting they could have breached new rules. The quartet said they would work with Ofgem on the investigation. Read Article
Telegraph – Afghanistan’s authorities have ousted the managers of the country’s biggest bank to try and prevent a collapse due to toxic property investments and murky loans to politically powerful customers, it has been reported. Hamid Karzai personally approved the intervention to prevent a meltdown at Kabul Bank which could send shock waves through the Afghan economy. Sher Khan Farnood, the chairman, and his chief executive Khalilullah Frozi were replaced by staff from the Afghan central bank this week. Read Article
Reuters – France has sent detailed proposals to the European Commission calling for common action to regulate volatile commodities markets before it is due to head the Group of 20 economic powers, ministry officials said. President Nicolas Sarkozy said last week that regulating commodity derivatives would be one of the priorities of France’s presidency of the G20 starting in November for a year. France’s economy, energy and agriculture ministers sent a letter to three European commissioners on August 27 stressing that current European regulation was not enough and calling for coordinated and cross-sector EU action. Read Article
Bloomberg – The Organization of Petroleum Exporting Countries’ crude-oil output fell in August to a seven- month low, led by Iraq, where production was hobbled by a pipeline bombing, a Bloomberg News survey showed. Production slipped 75,000 barrels, or 0.3 percent, to an average 29.15 million barrels a day, the lowest level since January, according to the survey. Output by members with quotas, all except Iraq, dropped 5,000 barrels to 26.805 million, 1.96 million above their target. Iraqi output dropped 70,000 barrels, or 2.9 percent, to 2.345 million this month, the biggest decrease in OPEC. It was the lowest level since April. The Persian Gulf nation was the group’s third-largest producer in August. Read Article
Bloomberg – Wheat prices rose the most in a week on speculation that dry weather will reduce output more than forecast in Argentina and Russia. Argentina is “too dry,” and more rain is needed to boost yields in Russia and Ukraine, where growers are preparing to plant winter wheat, according to T-Storm Weather in Chicago. Wheat futures have jumped 47 percent since the end of June as adverse weather reduced harvests and crop prospects. Read Article
Forbes – Rumors have circulated in China that People’s Bank of China Gov. Zhou Xiaochuan has left the country. The rumors appear to have started following reports on Aug. 28 which cited Ming Pao, a Hong Kong-based news agency, saying that because of an approximately $430 billion loss on U.S. Treasury bonds, the Chinese government may punish some individuals within the PBOC, including Zhou. Read Article
USA Today – Off-balance-sheet liabilities. Bad mortgage loans. Uncertain growth prospects. These issues, which nearly toppled the U.S. banking industry and triggered the financial meltdown, are increasingly threatening the stability of Chinese banks. Last week, a slew of Chinese banks – including Industrial & Commercial Bank of China, Bank of China and Agricultural Bank of China – reported strong profits. Read Article
Daily Mail – Unemployment is set to soar past 10 per cent in the next five years across large parts of the country, a leading economic think tank has warned. A combination of government spending cuts, sluggish growth in the private sector and weak demand for British exports will push up the jobless rate in the north and in Wales, according to the Centre for Economics and Business Research. But workers in London and the South-East will escape relatively unscathed as the economy slows. Read Article
ABC – Australia has recorded its smallest current account deficit since the first quarter of 2002, as commodity exports boost earnings. ABS figures show the seasonally adjusted deficit improved by almost $11 billion to $5.640 billion in the June quarter. The improvement was mostly driven by a steep increase in the value of commodity exports, largely due to a shift to shorter-term contracts and a corresponding rise in prices. Read Article
ABC – Australian shares have reversed some of yesterday’s gain, losing about 1 per cent after economic fears hit Wall Street overnight. The All Ordinaries index closed 44 points lower at 4,439, and the ASX 200 was down 49 points to 4,404. A steep fall in metal prices led the major miners lower, with BHP Billiton sliding 2.2 per cent to $37.05, and Rio Tinto down 1.3 per cent. The major banks also lost ground on economic fears, with Westpac posting the steepest decline of 2.8 per cent. Read Article
National Affairs – The mining sector almost doubled its profits in the June quarter while earnings in the rest of the economy went backwards. The mining sector reaped 40 per cent of all company pre-tax profits in the June quarter, although it accounts for less than 7 per cent of the economy. Soaring prices for iron ore and coal boosted its earnings by $9 billion to $19.5bn. “The economy is awash with cash from the mining boom,” RBS chief economist Kieran Davies said. He said the mining profits would surge again in the September quarter before easing in line with some reductions in contract export prices. Read Article
Wall Street Journal – An agreement signed by the administration of the semi-autonomous region of Kurdistan in Iraq with German utility RWE AG (RWE.XE) to source gas from the area to feed the planned Nabucco pipeline is illegal, the federal Iraqi oil ministry said. Read Article
FOX – An all-out war has broken out between Citigroup CEO Vikram Pandit and a prominent securities analyst who is saying that the big bank may be cooking the books by inflating its earnings through an accounting gimmick, FOX Business Network has learned. The analyst, Mike Mayo, of the securities firm CLSA, has been telling investors that Citigroup (C: 3.67 ,-0.08 ,-2.13%) should take a writedown, or a loss on some $50 billion of “deferred-tax assets,” or DTAs. That is a tax credit the firm has on its financial statement that Mayo says is inflating profits at the big bank by as much as $10 billion. Read Article
ABC – The Bank of Japan has responded to government pressure to counter a strong yen by extending a multi-billion-dollar loan program, but the move has been viewed with disappointment by markets. The decision came after an emergency meeting was called in response to government pressure to try to curb the yen’s rise and support an economy mired in deflation after the unit hit a 15-year high against the US dollar last week. Fears for the health of the global economy have increased in recent weeks, and US Federal Reserve chief Ben Bernanke on Friday vowed to act if “unexpected developments” further threaten the shaky US recovery. Read Article
NY Times – During its decades of rapid growth, China thrived by allowing once-suppressed private entrepreneurs to prosper, often at the expense of the old, inefficient state sector of the economy. Now, whether in the coal-rich regions of Shanxi Province, the steel mills of the northern industrial heartland, or the airlines flying overhead, it is often China’s state-run companies that are on the march. Read Article
NY Times – Sanofi-Aventis, the French drug maker, publicly disclosed its $18.5 billion bid for Genzyme on Sunday, intensifying pressure on the American biotechnology company to engage in discussions about a sale. Sanofi approached Genzyme in June, and the two companies were engaged in friendly merger talks. But, according to Sanofi’s chief executive, Christopher Viehbacher, the discussions were stifled by Genzyme’s management. Read Article
BBC – The number of people trying to purchase their first home has fallen sharply in the past year, a report suggests. About 22% of potential buyers are looking to buy their first home in the next year, compared with 31% at the same point in 2009, property website Rightmove.co.uk said. It warned the proportion of first-time buyers was half the level needed for a healthy housing market. Read Article
Associated Press – Talk of the global economic recovery fizzling doesn’t faze Cho Byung-cheol, president of a small South Korean technology company that has already set up a branch in China and plans one soon in the United States. The company, which designs and makes semiconductor-based high-speed data storage and processing equipment, is planning to boost its South Korean workforce of nearly 60 by half, says Cho, who founded Seoul-based Taejin Infotech Co. in 1996. Sales, which totaled only 8.4 billion won ($7 million) last year, could swell fourfold this year and reach 100 billion won next year, he predicts. Read Article
