Multinational companies are buying more financial protection against swings in emerging market currencies, after being hit by a summer of volatility in countries that account for an increasingly large share of their business.

October 1, 2013 6:54 pm

Volatility pushes companies to buy more forex protection

By Delphine Strauss

Multinational companies are buying more financial protection against swings in emerging market currencies, after being hit by a summer of volatility in countries that account for an increasingly large share of their business. Citigroup, the market leader in foreign exchange trading by non-financial institutions, said its business with companies hedging exchange rate risk in emerging markets had risen 12-13 per cent since the sell-off in these currencies gathered pace in June. Read more of this post

European groups buffeted by emerging market currency volatility

October 1, 2013 1:54 pm

European groups buffeted by emerging market currency volatility

By Chris Bryant in Frankfurt and Rachel Sanderson in Milan

Unilever’s warning that “significant currency weakening” in emerging markets would cause quarterly sales growth to slow reminded investors this week that currency effects will weigh on European third-quarter corporate results. Over the past two years fast-growing sales in emerging markets have provided a much-needed cushion for large European multinationals, offsetting stagnation or decline in their core home markets. Read more of this post

New accounting rules make axing reactors cheaper?

New accounting rules make axing reactors cheaper

KYODO

OCT 1, 2013

The government revised accounting rules Tuesday for utilities to prevent their business from deteriorating abruptly if they decommission nuclear reactors earlier than planned. Power firms are required to set aside reserves for scrapping each of their reactors while they are still in service. The new rules allow them to continue to recoup the funds through electricity rates for up to 10 years beyond the end of a reactor’s operational life. Read more of this post

Thailand uses slaves from Myanmar to peel its shrimp

Thailand uses slaves from Myanmar to peel its shrimp

By Gwynn Guilford @sinoceros 10 hours ago

In some ways, Thailand is a fairytale of economic development. Thanks in large part to exports, its GDP per capita is now eight times what it was in 1980. Its people live 15 years longer than they did in 1970. They’re now better educated, so they are doing more high-value jobs. It’s also an exemplar of family planning; 80% of the reproducing population uses birth control, compared with just 15% in 1970. Which helps explain why Thailand’s unemployment rate is just 0.9%—the lowest among the world’s major economies. Read more of this post

Apple Now Holds 10% of All Corporate Cash: Moody’s

October 1, 2013, 4:43 PM ET

Apple Now Holds 10% of All Corporate Cash: Moody’s

By Emily Chasan

Senior Editor

Apple Inc.’s $147 billion cash hoard now counts for nearly 10% of all corporate cash held by nonfinancial companies, according to an analysis by Moody’s. U.S. nonfinancial companies held $1.48 trillion in cash as of June 30, according to Moody’s review of the more than 1,000 companies it rates. Cash stockpiles have grown by about 2% from $1.45 trillion at the end of last year, and up 81% from $820 billion at the end of 2006. Read more of this post

Bitcoin buzz grows among venture investors, despite risks

Bitcoin buzz grows among venture investors, despite risks

7:47pm EDT

By Wanfeng Zhou and Nick Olivari

NEW YORK (Reuters) – Venture capitalists show no sign of shying away from investing in startups related to Bitcoin even as authorities step up their scrutiny of the virtual currency and its possible connection to money laundering and other illegal activities. Investment has jumped in recent months as Bitcoin, the prominent digital currency not backed by a government or central bank, has begun to gain a footing among businesses and consumers, a key step for it to go mainstream. Read more of this post

Investors have lost billions on Australian toll roads and tunnels but that isn’t stopping others from following in their path

Oct 1, 2013

Australian Toll Roads, Tunnels Offer Divergent Paths for Investors

GILLIAN TAN

SYDNEY—While some investors have found that Australian toll roads amount to expensive wrong turns, others are choosing to follow them. Investors have collectively lost billions of dollars on the toll roads and tunnels in recent years because of too much debt and overestimates on traffic volume. Now, sharply lower prices for those assets and more-realistic traffic assessments are adding up to opportunities for others. Read more of this post

The Myth of Indonesia’s Resource Nationalism; Jakarta’s new mining and oil regulations are really about rent-seeking and corruption

October 1, 2013, 12:58 p.m. ET

The Myth of Indonesia’s Resource Nationalism

Jakarta’s new mining and oil regulations are really about rent-seeking and corruption.

JOHN KURTZ AND JAMES VAN ZORGE

Lately, the Indonesian government has unleashed an array of policies that are keeping mining and oil executives awake at night across this vast and geologically rich archipelago. The unpopular new regulations, aimed at reforming the mining and oil industries, are promoted in the name of “national interest.” Yet left uncorrected, they will inevitably lead to a dramatic decline of output in Indonesia’s extractive industries, damaging foreign investment and economic growth. Read more of this post

Luxury Yachts Find Rich Asian Buyers as Ranks of Wealthy Swell

Luxury Yachts Find Rich Asian Buyers as Ranks of Wealthy Swell

Singapore businessman Adrian Lee Chye Cheng, 33, is the super-yacht industry’s dream come true. Young, wealthy and passionate about boats, he embodies an emerging market that shipyards and brokers see looming large on the horizon. “The new market is in Asia,” Lee said in an interview on one of the panoramic decks of the Ocean Paradise, a 55-meter luxury yacht he and his brother Lionel acquired two months ago. Read more of this post

Unilever’s Emerging Market Pain Heralds Forecast Cuts; Asia and Latin America were the salvation for many European companies during the height of the debt crisis. Now, they’re eating into earnings

Unilever’s Emerging Market Pain Heralds Forecast Cuts

Asia and Latin America were the salvation for many European companies during the height of the debt crisis. Now, they’re eating into earnings. Unilever on Sept. 30 blamed weakening currencies in Indonesia, Brazil, South Africa and India for a sales slowdown, following Adidas AG (ADS) and Prada SpA in saying that the euro’s strength is eroding profit. Schneider Electric SA, Heineken (HEIA) NV and Danone (BN) are among companies most vulnerable to a profit reduction from emerging markets, analysts and investors estimate. Read more of this post

Nestle Draws Up Divestment Shortlist After Laggards Identified; “We have allowed underperformers to underperform for too long. We want to be in business, not agony.”

Nestle Draws Up Divestment Shortlist After Laggards Identified

Nestle SA, (NESN) the world’s biggest food company, has a shortlist of businesses it is looking to sell after identifying laggards that it cannot fix, Chief Executive Officer Paul Bulcke told investors today. The maker of Nescafe coffee has completed a review of 97 percent of its 1,800 distinct business units, Bulcke said at an investor seminar at Nestle headquarters in Vevey, Switzerland. There is a “slightly longer list” of units that the company will try to improve, he said, as it seeks to rebound after posting its weakest quarterly revenue growth in four years. Read more of this post

Japan Awaits Abe’s Third Arrow as Companies Urged to Invest

Japan Awaits Abe’s Third Arrow as Companies Urged to Invest

Japanese Prime Minister Shinzo Abe’s reflation campaign shifted to structural domestic reforms after he unveiled a stimulus package offering a short-term cushion for the first sales-tax rise since 1997. Abe’s administration is honing legislation for its “growth strategy” for the year’s final parliamentary session, an initiative companies will scrutinize for fresh reasons to invest in a domestic market burdened by a shrinking and aging population. For now, they get a slew of tax breaks unveiled with yesterday’s 5 trillion yen ($51 billion) program. Read more of this post

The Threat of ‘Abegeddon’ From Taxes in Japan; Abe Orders Japan’s First Sales-Tax Increase Since ’97

The Threat of ‘Abegeddon’ From Taxes in Japan

Posterity is watching carefully as Shinzo Abe goes ahead with a sales-tax increase aimed at getting a handle on Japan’s huge debt burden, the world’s largest. Unfortunately history may judge him no better than Ryutaro Hashimoto, the last Japanese prime minister to kill an economic recovery with ill-timed fiscal tightening. That’s not the conventional wisdom of the moment. Markets are euphoric over surging confidence among large Japanese manufacturers. September’s jump in the quarterly Tankan (JNTSMFG) index — to the highest levels since before the Lehman Brothers Holdings Inc. collapse in 2008 — gave Abe just the tail wind he needed to raise the consumption tax to 8 percent from 5 percent starting in April 2014, with a further 2 percent increase in the cards for 2015. Read more of this post

GTL Tradeup, a Sydney derivatives broker whose director has been linked to a multimillion-dollar Italian fraud case, has collapsed, owing clients more than $3 million

Clients owed millions after derivatives broker GTL Tradeup collapses

October 2, 2013

Gareth Hutchens

GTL Tradeup, a Sydney derivatives broker whose director has been linked to a multimillion-dollar Italian fraud case, has collapsed, owing clients more than $3 million. About 300 clients in Australia, New Zealand and China are believed to be affected. The clients were informed via email last week of the decision to go into liquidation. Corporate insolvency firm CRS Warner Kugel has been appointed liquidator. The GTL director who has allegedly been linked by Italian media to a $36 million fraud case – Mahmood Riaz – is in Australia and has been working with liquidators. Read more of this post

Spain’s Time Travel Won’t Make People Work Harder

Spain’s Time Travel Won’t Make People Work Harder

Spain’s political leaders, in their infinite wisdom, have decided that moving to a new time zone will make the country’s people more productive. They might want to consider Russia’s disappointing experiment in chronological manipulation. The Spaniards are concerned that the sun rises later in their country than in other longitudinally similar places, such as the U.K. Specifically, on October, 26, the last day of daylight saving time, the sun will rise at 8 a.m. sharp in Liverpool and at 8:39 in Madrid, though the two cities are almost on the same meridian, 3 degrees west of Greenwich. Read more of this post

Siemens CEO promises workers an end to restructuring

Siemens CEO promises workers an end to restructuring

1:03pm EDT

MUNICH (Reuters) – Germany’s Siemens has no plans for further restructuring measures after the engineering group’s massive 6 billion euro ($8.1 billion) savings program ends next year, its new Chief Executive Joe Kaeser said. In a letter sent to Siemens employees on Tuesday, Kaeser sought to reassure workers following news that the savings program would cost 15,000 jobs. “All measures have been discussed with the affected units. Beyond that, there are no further plans or measures,” Kaeser said in the letter, which was obtained by Reuters. Read more of this post

Norway to Fight Record Household Debt Load as Government Formed

Norway to Fight Record Household Debt Load as Government Formed

Norway’s new government, formed yesterday after two weeks of talks, plans to offer tax breaks to encourage consumers to set aside savings in an effort to help the nation deal with its record household debt burden. “I don’t think that we have too large of a private debt problem in Norway but we will create tax relief on savings,” Erna Solberg, leader of the Conservative Party and incoming prime minister after winning the Sept. 9 election, said yesterday in an interview after agreeing to form a minority coalition with the anti-tax Progress Party. “The policy will be to get more people saving for the future.” Read more of this post

Miami Beach Banker Party Shows Why Hotel Debt Fills Bonds

Miami Beach Banker Party Shows Why Hotel Debt Fills Bonds

The Fontainebleau Miami Beach is booked solid next week as bankers prepare to crowd the iconic lobby for cocktails at an annual bond-market convention. For owner Jeffrey Soffer, the conference helps justify a $1 billion makeover that almost cost him the property three years ago. Soffer is seeking a roughly $850 million mortgage on the 1,504-room resort from some of the same bankers gathering at the ABS East conference, according to people briefed on the details of the financing who asked not to be identified because the talks are private. The loan, intended to refinance debt and buy out Dubai World’s 50 percent stake in the hotel, will be packaged into commercial mortgage-backed securities as investors snap up the deals at the fastest pace in five years, according to the people. Read more of this post

Hollande Giving Workers Say in M&A Deepens Fortress-France Image

Hollande Giving Workers Say in M&A Deepens Fortress-France Image

Takeovers of French companies, already among Europe’s least targeted, are about to become even less desirable. Seeking to fend off hostile takeovers and limit plant closings, the French National Assembly yesterday adopted rules that would give employees a bigger say over bids. The bill, which also forces companies with more than 1,000 employees in France to document attempts to find a suitable buyer before shuttering a plant with more than 50 workers, is expected to become law once it has been discussed and voted in the Senate and then passed by parliament. Read more of this post

Wanted by the taxman: Indonesia’s $5 billion of lost coal

Wanted by the taxman: Indonesia’s $5 billion of lost coal

5:05pm EDT

By Fergus Jensen

JAKARTA (Reuters) – Indonesia may be the world’s top exporter of thermal coal, but that masks an embarrassing fact for a government scrambling to raise revenue – more than $5 billion worth of the fuel is mined illegally and goes untaxed each year. Export and consumption data shows Indonesia produces around 12-15 percent more coal annually than the ministry of energy and mineral resources reports. That’s enough to supply Taiwan, the world’s fifth-largest coal importer, for a year. Read more of this post

Only 30% of Myanmar has access to electricity

Only 30% of Myanmar has access to electricity

Tuesday, October 1, 2013 – 10:12

Eleven Myanmar/Asia News Network

Myanmar currently provides electricity to 30 percent of the population according to the Minister Electric Power, Khin Maung Soe. “Only 30 percent of the population now has access to power. To supply 50 percent, power lines will have to be constructed. The whole of Rakhine State will enjoy electricity at the end of 2014,” said the minister. Power lines are being constructed in Chin State and electricity will be supplied through the national grid by the end of 2014. The power lines have been completed in Kachin State and it will also be supplied electricity, added the minister. In Mon State, power lines are being set up from Mawlamyine to Ye. In the coming year, they will be extended to Dawei. In Shan State, the whole Inn region has access to power, but many villages are still not connected. Most of Naga region is still in the dark and the government says it is planning to build three small-scale hydropower plants next year. The government has also promised to provide 70 percent of Kayah State with electricity where Lawpita Hydropower Plant is situated by the end of 2014.