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Incheon named World’s Best Airport for eighth time; The process of departure takes only 19 minutes and arrival 12 minutes, far quicker than the global standard of 69 minutes and 45 minutes.

Wednesday, Mar 13, 2013

Mr Hong-Yeol Choi, VP Marketing at Incheon International Airport (left) receives the World’s Best Airport Award from Mr Edward Plaisted, Chairman of SKYTRAX (right), during the World Airport Awards held at Passenger Terminal EXPO in Vienna.

By Lee Ji-yoon
The Korea Herald/Asia News Network
Wednesday, Mar 13, 2013

KOREA – Incheon International Airport said Tuesday it won the World’s Best Airport title again this year for the eighth consecutive time.

The non-profit Airport Council International conducted a survey of 350,000 passengers over the past year and Incheon Airport earned the highest scores in service quality.

The airport also topped two other categories – best airport in Asia-Pacific and best among those with 25-40 million users annually.

It is unprecedented for an airport to win the industry’s top honour eight times, officials said. Read more of this post

China’s Tallest Tower Builder Assures Quality Amid Sand Scandal

China’s Tallest Tower Builder Assures Quality Amid Sand Scandal

China State Construction Engineering Corp. (601668), which is building the country’s tallest tower, said materials used in all its projects meet quality standard as the southern city of Shenzhen conducted inspections on builders.

Samples from buildings, including the 660-meter Ping An Finance Center due to be completed in 2015, were tested, according to Shenzhen’s Housing and Construction Bureau. The industrywide inspection in the city last week followed a China Central Television newscast on March 14 that investigated the use of substandard concrete by some developers in Shenzhen that used low-quality sea sand instead of river sand. Read more of this post

Singapore’s property trusts, the second-best performers in Asia in the past year, may have to diversify funding sources as they aren’t prepared for an “interest rate shock,” according to Fitch Ratings.

Singapore REITs to Vary Funds on Interest Rates: Southeast Asia

Singapore’s property trusts, the second-best performers in Asia in the past year, may have to diversify funding sources as they aren’t prepared for an “interest rate shock,” according to Fitch Ratings.

The city’s real estate investment trusts or REITs have been increasing short-term debt with record-low interest rates, according to Johann Kenny, director of corporates at Fitch. They face refinancing risks when borrowing costs rise, and may be pushed to sell assets or shares to boost their funding, he said.

“Singapore REITs are not really well equipped to withstand an interest rate shock,” Kenny said in a phone interview from Sydney yesterday. “When a rating agency looks at a company, we look at the long-run average through the cycle of the interest rate environment and we don’t see the current low interest rates as a sustainable model from a macro-economic perspective.”

Singapore REITs, the biggest fundraisers in the city’s initial public offering market in the past year, had relied on short-term debt to reflect the length of commercial leases, Kenny said. Their funding costs in the past six years don’t reflect the challenges in a “normalized” interest rate scenario, he said. Read more of this post

Indian gold funds are shrinking as investors in the biggest bullion- consuming nation follow billionaire George Soros in pulling money from products backed by the precious metal.

India Gold ETF Sales Mimic Soros as Goldman More Bearish

Indian gold funds are shrinking for the first time since June as investors in the biggest bullion- consuming nation follow billionaire George Soros in pulling money from products backed by the precious metal.

Exchange-traded funds in gold saw outflows of 80 million rupees ($1.5 million), data from the Association of Mutual Funds in India show. Investments in sovereign-debt funds rose by 4.46 billion rupees, the sixth straight month of inflows. Gold prices in India have slid 4.3 percent this year, while rupee bonds returned 2.7 percent, the second-highest gains in Asia.

“Globally we are seeing a decelerating gold trend, and overweight investors will be adjusting asset allocations,” Lakshmi Iyer, Mumbai-based head of fixed income and products at Kotak Mahindra Asset Management Co., which oversees about $6 billion of assets, said in a March 14 telephone interview. “We should see some interest-rate easing over the next two or three quarters,” encouraging people to seek capital gains in bonds, she added.

Soros cut his holdings in SPDR Gold Trust, the largest exchange-traded gold product, by 55 percent last quarter, and Goldman Sachs Group Inc. predicts the metal’s 12-year rally will end as a U.S. economic recovery gathers momentum. The Reserve Bank of India will lower its benchmark repurchase rate to 7.50 percent from 7.75 percent today, according to 30 of 35 economists in a Bloomberg survey. Five predict no change. Read more of this post

Delhi needs to sell the idea of the market; Indians say their country ‘grows at night while the government sleeps’, writes Gurcharan Das

March 18, 2013 7:01 pm

Delhi needs to sell the idea of the market

By Gurcharan Das

Indians say their country ‘grows at night while the government sleeps’, writes Gurcharan Das

When the Indian government presented its budget last month, the people were expecting giveaways, subsidies and bribes for votes. But it turned out to be a surprisingly responsible settlement that capped the fiscal deficit at 4.8 per cent of economic output. It was a sensible budget, but it will not get India growing again.

Meanwhile, the day before the budget, Sugata Mitra, a researcher at Newcastle University, won the TED (Technology, Entertainment and Design conference) prize of $1m to run Schools in the Cloud from India. The scheme aims to empower teachers and parents towards self-directed learning by children.

To Indians, the contrast between the budget and the prize confirms their perception of the country’s “bottom-up” success, driven by people, in contrast to China’s “top-down” success, induced by state investment. Prosperity is spreading, despite appalling governance in the world’s biggest democracy. Read more of this post

As Crop Prices Surge, Investment Firms and Farmers Vie for Land

March 18, 2013

As Crop Prices Surge, Investment Firms and Farmers Vie for Land

By JULIE CRESWELL

From the potato fields of Michigan to the high prairies of Kansas, farmers are receiving record prices for their land — but economists and banking regulators warn that this boom, like so many before it, could end badly.

Across the American heartland, farmland prices are soaring. In places like Waco, Neb., and Chickasaw County, Iowa, where the boom-and-bust cycle of farming reaches deep into the psyche, some families are selling the land that they have worked for generations, to cash in while they can.

Behind the rush is the age-old driver of farm booms: high crop prices. Corn, in particular, has been soaring, reflecting demand overseas and, domestically, for ethanol. High prices mean good profits for farmers, and many are using their growing incomes to bid for land. Sensing opportunity, investment firms are buying, too. David Taylor, of Oskaloosa, Kan., said he was saddened to sell his family’s farm but that the prices were too good to resist. Four generations had planted corn and soybeans on the 146-acre spread. But after living through the Midwest farm crisis of the 1980s, when land values plunged, and realizing that his children would not follow in his footsteps, he sold the farm at auction in December.

“I bawled like a baby,” Mr. Taylor, 59, said. His crop-producing fields sold for $10,100 an acre. Read more of this post

Economists: China Mirrors U.S. on Eve of Financial Crisis

March 18, 2013, 5:20 PM

Economists: China Mirrors U.S. on Eve of Financial Crisis

The same three warning lights that preceded America’s real estate crash and financial crisis are now flashing over China, two economists say, leaving the government limited time to get out of trouble.

In a research note published on Saturday, Nomura economists Zhiwei Zhang and Wendy Chen outline the way that elevated property prices, a rapid build-up of leverage and a slide in the country’s potential growth rate could lead to a systemic crisis.

House prices in the U.S. racked up an 84% rise between 2001 and 2006, Mr. Zhang and Ms. Chen say, citing the Case-Shiller housing price index. The Nomura economists have their doubts about China’s official index, which shows a “rather benign” 113% rise in the major cities from 2004 to 2012. They argue that it is too broad, including older, lower-quality property across the nation. By contrast, a recent academic paper taking into account these quality differentials found prices climbed 250% from 2004 to 2009, they say.

“The government obviously recognizes the risks in the property sector,” Mr. Zhang and Ms. Chen write. “It has introduced a series of progressively tighter policies to contain property prices over the past several years… The pattern has been for house prices to initially dip after tightening policies are introduced, then to rebound, which suggests that the risks have not been mitigated.” Read more of this post

Magazine-Cover Curse Takes on New Meaning in Asia

Magazine-Cover Curse Takes on New Meaning in Asia

Will Shinzo Abe’s plan to revive Japan suffer the magazine-cover curse? Might Benigno Aquino meet the same fate in the Philippines?

What both leaders have in common is everyone slapping the “-nomics” suffix onto their growth strategies. “Abenomics” has excited investors, not to mention the pundit class, with its aim of ending 15 years of deflation. The same is true of “Aquinomics” in a country long deemed the sick man of Asia, now an investment darling.

Such bouts of euphoria often end in tears: “Reaganomics,” “Rubinomics” and “Bushonomics” in the U.S.; “Thatchernomics” in the U.K.; “Berlusconomics” in Italy; and “Thaksinomics” in Thailand. Sometimes the reckoning comes in short order; other times it takes decades. The track records of all too many of these supposedly new formulas for prosperity are questionable.

The problem is hype versus real change. Having one of these splashy appendages added to your ideas tends to have the same reverse karma payoff as being on the cover of a large- circulation magazine. By the time a trend or ideology is popular enough to warrant such a tribute, the game is already up. So, is the buzz about the Japanese and Philippine economies overdone? It will be if leaders put too much stock in their own press. Read more of this post

Pimco’s Kiesel Says Corporate Bondholders ‘Wake Up’ to Risks

Pimco’s Kiesel Says Corporate Bondholders ‘Wake Up’ to Risks

Investors are “finally” acknowledging the risks of holding corporate bonds with yields hovering at about record lows as the Federal Reserve holds benchmark interest rates at close to zero for a fifth year, according to Pacific Investment Management Co.

“Bondholders are finally starting to wake up to the fact that easy monetary policy for an extended period can also have adverse consequences,” Mark Kiesel, global head of corporate bond portfolios at the manager of the world’s biggest bond fund, wrote today on the firm’s website. “This trend has helped reignite shareholder activism and corporate animal spirits.” Read more of this post

Ex-Calpers CEO Buenrostro Indicted Over Apollo Investment

Ex-Calpers CEO Buenrostro Indicted Over Apollo Investment

Ex-California Public Employees’ Retirement System Chief Executive Officer Federico Buenrostro was charged with conspiring to trick the pension fund into paying millions of dollars in fees for a $3 billion investment into funds managed by Apollo Global Management LLC. (APO) Read more of this post

Iceland’s Lost Billionaires Unmourned as Riches Draw Ire; “Greed can’t again lead the way,” said Prime Minister Johanna Sigurdardottir. “We’ve taken that route before with terrible consequences for this nation and its people.”

Iceland’s Lost Billionaires Unmourned as Riches Draw Ire

Iceland, a country with a $13 billion economy, had six dollar billionaires before the financial crisis struck in 2008. Now it has none.

Five of the men — including former West Ham soccer team owner Bjorgolfur Gudmundsson and Baugur Group hf founder Jon Asgeir Johannesson — have lost all, or most of, their fortunes after building empires on loans from banks that used the island’s investment bubble to stretch their assets to 10 times the size of gross domestic product.

At least three of Iceland’s ex-billionaires are, or have been, the subject of financial misconduct probes. Johannesson, who once flew around in a pin-striped private jet and owned luxury apartments in New York and London, received a suspended one-year jail sentence in February for violations including accounting fraud. He and Gudmundsson, who filed for bankruptcy in 2009, personified the boom-to-bust cycle that dragged Iceland away from fishing and tourism and turned it into a center for high finance.

“Greed can’t again lead the way,” said Prime Minister Johanna Sigurdardottir, 70, whose Social Democrat-led government took over from the coalition that led Iceland into the crisis just over four years ago. “We’ve taken that route before with terrible consequences for this nation and its people.” Read more of this post

Traders Short Junk-Bond ETFs as Gains Top 100%: Credit Markets

Traders Short Junk-Bond ETFs as Gains Top 100%: Credit Markets

Wall Street’s biggest credit brokers are for the first time using exchange-traded funds as a way to wager that junk bonds are overvalued.

Bank of America Corp. (BAC) traders who helped dealers move $1.5 trillion of credit-default swaps index contracts last year began offering clients the ability to trade blocks of bond ETF (HYG) shares in February, according to three people familiar with the trading and an e-mail sent to customers. Shares borrowed to make bearish bets on State Street Corp. (STT)’s $12 billion speculative-grade bond ETF soared to a record 11.5 percent of the total outstanding on March 1, up from 4 percent at year-end. Read more of this post

Sweden Laments ‘Crazy’ Devaluations Amid Krona Strength

Sweden Laments ‘Crazy’ Devaluations Amid Krona Strength

Sweden took another step to distance itself from policies targeting competitive devaluations as exporters were told a strong krona provides opportunities to make their businesses more efficient.

“It’s good for companies that they need to understand that they have to compete with real tools rather than the imaginary tool that the exchange rate is,” Financial Markets Minister Peter Norman said in a March 15 interview in the Swedish town of Karlstad, where his Moderate Party laid out the foundations for its 2014 election campaign.

While Swedish exporters have warned that continued krona appreciation will force them to cut jobs, the government and central bank have repeatedly rejected talk of boosting trade competitiveness through the exchange rate. And while policy makers from France to Japan argue in favor of weaker currencies, the Swedes have praised their krona’s strength. Central bank governor Stefan Ingves in an interview last month said he was “happy” with the currency’s gains.

Sweden didn’t always have such a hands-off approach. Between 1976 and 1981, when the krona was linked to the Deutschmark and later to a basket of currencies dominated by the U.S. dollar, it was devalued four times. In 1982, its value was again cut, by 16 percent. After the Riksbank was unable to defend the fixed exchange rate inside the European Exchange Rate Mechanism — even resorting to a 500 percent marginal interest rate in 1992 — the peg was scrapped and a free float was introduced. Read more of this post

China’s Largest Mass Merchant Auchan/RT-Mart Turns to Its Own Brands for Growth

China’s Largest Mass Merchant Turns to Its Own Brands for Growth

Sun Art Retail Group Ltd. (6808), China’s largest operator of big-box stores, will boost its own brand offerings and add higher-margin items to increase sales after opening new stores helped raise 2012 profit by half.

The company’s RT-Mart and Auchan chains will add at least 700 more own-label products including stationary and cutlery this year and reduce local brands in favor of higher-end lines, Peter Huang, executive director, said in an interview. The retailer plans to boost own-brand sales to 10 percent of revenue in two years from 8 percent now, he said.

Huang’s shift to higher-end products is intended to help the Shanghai-based venture between Taiwan’s RT-Mart and France’s Groupe Auchan SA maintain its lead over Wal Mart Stores Inc. (WMT) and Carrefour SA (CA), its biggest rivals. Retailers can earn gross profit margins of between 10 percent to 25 percent on own branded non-food items, said Nice Wang, an analyst with Yuanta Securities HK Co. Read more of this post