All posts in category Economics

Nissan: Full-Year Profit Forecast Cuts and Management Overhauls

According to Bloomberg, Nissan Motor Co. (7201), Japan’s second-biggest carmaker, lowered its full-year profit forecast by 15 percent after demand in emerging markets slowed and recall costs mounted.

The company expects to post net income of 355 billion yen ($3.6 billion) in the year ending March 31, it said today. That’s below the Yokohama, Japan-based carmaker’s previous forecast of 420 billion yen and the 440.3 billion yen average of 18 analyst estimates compiled by Bloomberg. Profit is still projected to rise from the previous year as the weaker yen helps bolster earnings.

Chief Executive Officer Carlos Ghosn also announced an overhaul of Nissan’s management as he pursues an operating profit margin target of 8 percent by the year ending March 2017. The changes and earnings shortfall come amid slowing sales in some emerging markets and a recall of 910,000 vehicles that Goldman Sachs Group Inc. estimates will cost the company about 15 billion yen.

“The outlook in Thailand will remain quite weak this year mainly due to the lack of pent-up demand,” said Ashvin Chotai, managing director of Intelligence Automotive Asia in London. “It’s also certainly hard to be optimistic about Indonesia — it’s a market which is always going to be volatile.”

Nissan also lowered its forecasts for operating profit and revenue.

Under the management changes, Chief Operating Officer Toshiyuki Shiga will become vice chairman and remain on the board, though the COO position will be abolished.

New Lieutenants

Three new positions will be created — reporting directly to Ghosn — to fill Shiga’s void, according to the company.

Among Ghosn’s new lieutenants will be Executive Vice President Hiroto Saikawa, who will be chief competitive officer overseeing the supply chain, research and development, as well purchasing and manufacturing, Nissan said. Executive Vice Presidents Andy Palmer and Trevor Mann will also take on positions as chief planning officer and chief performance officer, respectively, the company said.

Colin Dodge, currently executive vice president, will take on a new role managing special projects and report directly to Ghosn. Kimiyasu Nakamura, president of Chinese joint venture Dongfeng Motor Co., will assume companywide responsibility for customer satisfaction, reporting to Saikawa.

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by yhuang0125 on November 1, 2013 • Permalink

Posted in Business, Economics, Industry, Japan, Market

Posted by yhuang0125 on November 1, 2013

https://theasiancenturyreport.wordpress.com/2013/11/01/nissan-full-year-profit-forecast-cuts-and-management-overhauls/

Investors Welcome Malaysia Reform Budget

Malaysian Prime Minister Najib Razak (Bloomberg News)

According to The Wall Street Journal, upcoming national elections seem likely to hinder sorely needed economic reforms in places like India and Indonesia. Not so in Malaysia, where Prime Minister Najib Razak’s resounding victory in general elections last May gives him the leeway to push a reform agenda.

Mr. Najib’s 2014 budget presentation last Friday centered on reforms he believes will help balance the nations’ books by 2020. Key among them is a 6% tax on goods and services that Mr. Najib has talked of for years but never had the political clearance to push through – until now.

He also scrapped a sugar subsidy for consumers and announced the government will move to a system of targeted subsidies where only the poorer members of society would benefit from cheaper food items, cooking oil and fuel.

The government says targeted payouts will lower the total subsidy bill – which makes up about 18% of government spending – by some 15.6% next year. Mr. Najib said next year’s subsidy bill will fall to 39.41 billion ringgit ($12.6 billion) from this year’s 46.70 billion ringgit ($14.9 billion).

Mr. Najib forecast a budget deficit of 3.5% next year, down from a projected 4.0% this year.

Opposition parties warned they would protest the new goods-and-services tax – which in any case will exempt basic food items and essential services — but analysts and ratings agencies generally welcomed the budget. So too did investors, who sent the ringgit to a four-month high of 3.1425 against the U.S. dollar Monday, while the yield on the benchmark 10-year government bond hit a three-month low of 3.59. Stocks were little changed.

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by camelliacamellia on October 29, 2013 • Permalink

Posted in Asia, Economics, Finance, Investment

Posted by camelliacamellia on October 29, 2013

https://theasiancenturyreport.wordpress.com/2013/10/29/investors-welcome-malaysia-reform-budget/

Is it Really a Communication Problem for Japan’s Mizuho Bank Loans to Crime-Syndicate Members?

Mizuho Bank (The Wall Street Journal)

According to The Wall Street Journal, the 102-page report by an investigative panel of lawyers into why Mizuho Bank didn’t pull the plug on $2 million in loans to crime-syndicate members providessome answers about what went wrong. Among them: The panel said executives who initially started handling the problem didn’t fully brief their successors, following a management overhaul caused by a separate, unrelated computer-system breakdown in 2011.

To go back a step: The panel got its information by interviewing 85 officials from Mizuho and Orient Corp.8585.TO 0.00%, the consumer-loan affiliate that actually extended the loans with financing from Mizuho. It also screened email exchanges between employees. The details of the panel’s findings were confirmed by Mizuho, in a separate press conference on Monday.

The panel found that the questionable loans were initially discovered in 2010, when Mizuho Bank was led by an executive named Satoru Nishibori.

But amid the turmoil sparked by the March 2011 system failure, Mr. Nishibori resigned his post and didn’t give a full briefing on the issue to his successor, Takashi Tsukamoto, the panel found. In fact, most of the compliance-department officials who were involved in dealing with the loans left the department at that time, the panel found.

Meanwhile, the computer problems turned the attention of top executives toward solving systems issues, and the question of how to handle the loans to crime-syndicate members got less attention, the panel said. In materials handed out at several subsequent compliance and board meetings, for instance, reference to the loans was pared down to only a few sentences; all mention of the loans in such materials disappeared after January 2012, the panel found.

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by camelliacamellia on October 28, 2013 • Permalink

Posted in Asia, Bank, Economics, Investment, Japan

Tagged computer-system breakdown, consumer-loan, crime-syndicate member, Financial Services Agency, Gaku Ishiwata, Japan, loan, Mizuho, Mizuho Bank, Mizuho Financial Group, Orient Corporation, questionable loan, Satoru Nishibori, systems issue, Takashi Tsukamoto, Yasuhiro Sato

Posted by camelliacamellia on October 28, 2013

https://theasiancenturyreport.wordpress.com/2013/10/28/is-it-really-a-communication-problem-for-japans-mizuho-bank-loans-to-crime-syndicate-members/

How India’s Central Bank Expects Inflation to Remain Sticky?

India’s Central Bank (Reuters)

According to The Wall Street Journal, MUMBAI—The Reserve Bank of India Monday sounded concerned about inflation that it said would remain outside its comfort zone this fiscal year, amid expectations that controlling prices would remain the prime focus when the central bank reviews monetary policy Tuesday.

In its half-yearly review of macroeconomic and monetary developments, released a day before its monetary-policy meeting, the RBI also highlighted the need to boost economic growth. But its stress was more on inflation.

Inflation at the wholesale level—the main measure of prices in India—notched a seven-month high of 6.46% in September. It has remained above the central bank’s comfort level of 5.0% for four consecutive months through September.

Based on the prices that consumers pay, inflation is near the double-digit level. Authorities are particularly worried about food inflation, as the prices of vegetables such as onions have jumped sharply in recent months as heavy rains damaged crops.

Inflation is also fanned by a fall in the value of the local rupee currency, as it made imported commodities, such as oil, more expensive for Indian consumers.

The RBI said it expects both consumer and wholesale inflation to be sticky around their current levels. “This indicates persistence of inﬂation at levels distinctly above what was indicated by the Reserve Bank earlier in the year,” it said.

The RBI said it also cannot ignore risks to growth.

For Governor Raghuram Rajan, balancing the central bank’s policy to address both inflation and growth would be a complicated task. The former International Monetary Fund official raised the RBI’s main lending rate by a quarter percentage point in September, in the first monetary-policy review after he took over as the RBI governor.

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by camelliacamellia on October 28, 2013 • Permalink

Posted in Asia, Bank, Economics, India, Inflation

Tagged central bank, current account deficit, financial crisis, fund investment, global market, India, inflation, International Monetary Fund, macroeconomic, massive-bond-buying policy, monetary policy, Mumbai, Raghuram Rajan, RBI, Reserve bank of india, U.S. Federal Reserve

Posted by camelliacamellia on October 28, 2013

https://theasiancenturyreport.wordpress.com/2013/10/28/how-indias-central-bank-expects-inflation-to-remain-sticky/

Indonesia Home Prices Rise as Demand Bucks Higher Rates

Source: Bloomberg

According to Bloomberg, Indonesia’s most aggressive monetary tightening since 2005 is set to slow economic growth without denting soaring property demand in the world’s fourth-most populous nation.

A young population, elevated inflation and property-price gains that outpace interest rates are spurring real-estate sales from Jakarta to Manado. Home prices in the third quarter probably rose 14.6 percent from a year earlier, according to a Bank Indonesia survey, while the Indonesian Real Estate Association predicts housing sales will climb more than 50 percent this year.

“Indonesia has a huge population, that’s a potential market for us,” said Setyo Maharso, chairman of the Indonesian real estate association, which predicts 2013 property sales will rise to 400,000 units from 260,000 last year. “For our buyers, as long as they have the ability to pay monthly installments, sales will keep increasing till the year end.”

With foreigners restricted from owning property in SoutheastAsia’s biggest economy, Indonesia is confronting a surge in local demand rather than the capital inflows that spurred record home prices in neighboring Singapore and Hong Kong. After the central bank imposed stricter loan-to-value ratios for mortgages, persistent price gains may prompt the government to raise some real-estate taxes, PT Bank Danamon Indonesia said.

“By giving a luxury tax, especially for high-end properties, it would help to curb home-price increases,” said Anton Gunawan, chief economist at Bank Danamon who was a candidate for the No. 2 job at the central bank this year. “Returns from property remain high as there’s an expectation that home prices are still rising.”

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by camelliacamellia on October 23, 2013 • Permalink

Posted in Asia, Business, Currency, Economics, Indonesia

Posted by camelliacamellia on October 23, 2013

https://theasiancenturyreport.wordpress.com/2013/10/23/indonesia-home-prices-rise-as-demand-bucks-higher-rates/

IMF calls for Japan reforms, plan to clear debt

TOKYO (AP) — The International Monetary Fund said Japan’s economy is recovering from years of stagnation, but that far-reaching reforms and a “credible plan” are needed to reduce its debt mountain and sustain growth in the long run.

The assessment, in a report released Monday, said the near-term outlook of the world’s third-largest economy “has improved considerably” thanks to monetary easing and increased government spending under Prime Minister Shinzo Abe’s administration.

It forecasts that Japan’s economy will grow 2 percent in 2013, helped by stronger demand at home and overseas, but will expand only 1.2 percent in 2014 as consumers tighten their belts following an expected increase in sales tax.

The IMF’s report, based on a consultation with the Abe government last month, echoes earlier comments by the World Bank’s lending arm on the “Abenomics” strategy of breaking out of a long spell of debilitating deflation by flooding the economy with money. At Abe’s behest, Japan’s central bank is striving to generate 2 percent inflation within the next two years.

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by admin on August 7, 2013 • Permalink

Posted in Asia, Economics, Finance, Japan, Policy, Regulation

Tagged Abenomics, Associated Press, Economy of Japan, International Monetary Fund, Japan, Shinzo Abe, Tokyo, world bank

Posted by admin on August 7, 2013

https://theasiancenturyreport.wordpress.com/2013/08/07/imf-calls-for-japan-reforms-plan-to-clear-debt/

Cons of deregulating finance

It is speculated that China is set to accelerate the deregulation of its financial system. For years, China has restricted the ability of its residents and foreign investors to pull and push their money in and out of the country.

While that may be illiberal, there was a sound reason for this restriction: Every emerging market that has scrapped these regulations has had a major financial crisis and subsequent trouble with growth.

The world can’t afford that to happen in China. China is too big to fail.

This issue came to the fore last year when the People’s Bank of China announced that it might “liberalize” its financial system in five to 10 years. The move was in stark contrast to a National Development and Reform Commission-World Bank report that put such a plan much further into the future.

That study cited the overwhelming evidence that shows, first, that dismantling cross-border financial regulations is not associated with growth and, second, that it tends to cause banking crises in economies with fledgling financial systems.

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by admin on August 7, 2013 • Permalink

Posted in Asia, China, Economics, Finance, Regulation

Tagged Asia, China, emerging markets, Finance, National Development and Reform Commission, People's Bank, people's bank of china, world bank

Posted by admin on August 7, 2013

https://theasiancenturyreport.wordpress.com/2013/08/07/cons-of-deregulating-finance/

Fed Comments Weigh on Asian Shares

Asian markets were spooked Wednesday by fears the U.S. may withdraw its bond-buying program, with stocks in Tokyo slumping 4% to record their biggest decline in over a month.

A sharply higher yen also fueled the drop in Japanese shares with exporters suffering heavily. The yen strengthened to ¥96.93 to the dollar in late Asian trade, compared with ¥97.73 late Tuesday in New York.

The selloff was sparked after two Federal Reserve officials said the central bank could start to withdraw its $85 billion-a-month bond-buying program as early as September, reigniting debate over when the central bank will start to taper. The U.S. stimulus measures have been responsible for heavy buying in Asia earlier this year as global investors sought higher-yielding assets throughout the region.

“A lack of clarity over the tapering scenario seems to be hitting the greenback” versus the yen, said Tim Waterer, senior trader at CMC Markets in Sydney.

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by admin on August 7, 2013 • Permalink

Posted in Asia, Economics, Finance, Market, Stock

Tagged Asia, central bank, CMC Markets, Federal Reserve System, Hong Kong, New York, Sydney, Tokyo

Posted by admin on August 7, 2013

https://theasiancenturyreport.wordpress.com/2013/08/07/fed-comments-weigh-on-asian-shares/

Global stock markets soft despite survey showing sharp improvement in US services sector

LONDON — Global stock markets retreated on Monday despite another strong U.S. economic report showing the service sector grew sharply last month.

The Institute for Supply Management’s index of service-sector growth rose to 56.0 points from 52.2 in June, the highest reading since February and above market expectations. Any reading over 50 indicates expansion and the higher the number, the strong the growth.

The findings echoed big gains in a separate survey of the manufacturing sector and offset concerns about a weak jobs report last week.

But with U.S. indexes near record highs, investors were reluctant to buy into stocks any more at a time when the Federal Reserve is getting ready to rein in its monetary stimulus plan.

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by admin on August 5, 2013 • Permalink

Posted in Asia, Economics, Finance, Market, Stock, US

Tagged economic growth, February, Federal Reserve System, Institute for Supply Management, June, report, Secondary sector of the economy, Tertiary sector of the economy

Posted by admin on August 5, 2013

https://theasiancenturyreport.wordpress.com/2013/08/05/global-stock-markets-soft-despite-survey-showing-sharp-improvement-in-us-services-sector/

Credit squeeze in Asia now worst since financial crisis

Bank lending conditions in emerging Asian nations have tightened the most since the global financial crisis, according to the latest survey from the Institute of International Finance (IIF).

The report shows the region`s headline index falling to a reading of 45.7, below the key 50-level that divides easing and tightening territory and its lowest level since the beginning of the survey in 2009.

Asia also showed the tightest lending conditions of global emerging regions.

The survey questioned 133 banks across Latin America, Europe, Asia and the Middle East- Africa region and Asia`s headline figure of 45.7 was the lowest. Latin America was second-worst at 47.6 while Africa and the Middle East had the best result at 52.9.

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by admin on August 2, 2013 • Permalink

Posted in Asia, Bank, Business, Economics, Finance

Tagged Africa, Asia, Institute of International Finance, Late-2000s financial crisis, Latin America, loan, Middle East, Race and ethnicity in the United States Census

Posted by admin on August 2, 2013

https://theasiancenturyreport.wordpress.com/2013/08/02/credit-squeeze-in-asia-now-worst-since-financial-crisis-2/

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