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) Japan Weakens
Yasuo Fukuda faces an uphill battle as Japan's new prime minister.The 71-year-old has to heal a rural community that feels left behind after five years of combative economic reforms while imposing structural changes to boost the world's second-biggest economy.The former cabinet secretary has to restore the battered credibility of his ruling Liberal Democratic Party after a scandalous 12 months and work with a hostile Upper House in Parliament.The son of Takeo Fukuda, a former prime minister in the late 1970s, has to face the policy dilemmas of an aging population and a massive public debt that is 150% of Japan's gross domestic product.He must deal with weak wages growth and stubbornly high unemployment in some areas.The bespectacled party veteran said he had "drawn the short straw" to replace Shinzo Abe, 53, who was hospitalised shortly after resigning as prime minister after only one year in power.Yasuo Fukuda says he will not reverse policies that have helped Japan's economy."We have to promote reform," he said."The world is changing, and if we don't change we will be left behind."And he has acknowledged the tough challenges."Japan is at a turning point," he said."The population is shrinking and greying and the social structure is changing."We have to raise labour productivity to meet these challenges."Fukuda, who spent many years as an oil company salaryman, has received mixed reviews.He has been described as mild-mannered, a foreign policy dove, shrewd and tough, a quiet compromiser, a moderate on international affairs and typically bland but sometimes testy.Some Japanese fear he could represent a return to the old days of Japan.Others have said he will be a "good caretaker" as the new prime minister, a reference to opinion polls showing a majority of the Japanese people want an early election in summer time next year."This is something that we should consider carefully," Fukuda said.An election is not legally required until September 2009.He has held out an olive branch to the main opposition Democratic Party of Japan: "I want to have dignified discussions with the aim of protecting the people's livelihoods and national interests."But financial markets will be unforgiving if the reform agenda stalls.Standard & Poor's, a credit ratings agency, said it might lower its AA credit rating on Japan if the new Fukuda government did not continue the path of fiscal restraint."The ratings of Japan could come under pressure if political gridlock resulted in a reversal of the government's fiscal consolidation," S&P said in a statement."Policy risks present a serious challenge to improvements in Japan's economic and credit outlook."Japan's official interest rates of 0.5% are the lowest among rich countries.Last year the Bank of Japan (BOJ) first raised its official rates by a quarter of a percentage point to 0.25% after five years of zero interest rates due to an anaemic economy for more than a decade.The ultra-low rates have fuelled demand for yen carry trades.These risky bets involve investors borrowing the low-yielding Japanese currency to fund investments in high-yielding currencies, such as the Australian and New Zealand dollars."There is little pressure for the BOJ to consider aggressive moves on rates in the absence of higher inflation," ANZ Investment Bank senior currency strategist Tony Morriss said in a weekly report.Analysts at Westpac said the August BOJ minutes indicated the central bank's outlook remained basically on track, implying the board was taking a "glass half full" attitude on recent soft data."The board has some thinkers who feel that normalisation should proceed as soon as stability in offshore financial markets is again apparent," Westpac analysts said in a report.UBS recently trimmed its 2008 growth forecast for Japan by 0.1 percentage point to 1.8%.Just over a year ago, Fukuda said low official rates in Japan were abnormal but putting Japan's public finances back in order was the main priority for the ruling LDP government.Some analysts believe Fukuda's election to the top job will be positive for financial markets."It was good for financial markets to see Fukuda chosen as the new leader because of his clear commitment to fiscal consolidation," Seiji Shiraishi, chief economist at HSBC Securities in Toyko, was quoted by Reuters as saying.Japan's Asian neighbours are also likely to welcome Fukuda, who has ruled out visiting the controversial Yasukuni Shrine, which is often at the centre of political storms.Although the shrine is dedicated to about 2.5 million people who have died in Japan's conflicts between 1853 to 1945, it also venerates 14 convicted Class A war criminals."Fukuda respects other Asian countries," Zhou Yongsheng, a professor at the Institute of China Foreign Affairs University, was quoted by the Wall Street Journal as saying. More>> - (
) Ethanol industry reaching for relief
FAIRMONT — For those with little tolerance for risk, the numbers would seem to call for a very large container of Rolaids.Twenty-two months ago, when they turned their first ceremonial shovel of dirt, the Minneapolis-based management team of Advanced BioEnergy was looking at a cash corn price of about $1.80 a bushel.The wholesale price for ethanol in Omaha in December 2005 was about $1.99 a gallon. . More>> - (
) (AFX UK Focus) 2007-10-16 14:58 GMT: Rosneft Q2 net soars to 7.655 bln usd from 1.077 bln on acquisitions UPDATE
(Updates with company quote, Q2 production figures)MOSCOW (Thomson Financial) - OJSC Rosneft said its second-quarter net income soared more than seven-fold to 7.655 bln usd, up from 1.077 bln thanks to the consolidation of its Tomskneft acquisition and organic growth.
Sales in the period reached 10.785 bln usd, up from 8.602 bln.
Russia's largest crude producer also issued a separate adjusted net figure that included one-off effects related to Yuganskneftegaz's tax debt as well as other penalties accrued by some of the numerous assets of bankrupt Yukos it has acquired.
By this measure, second-quarter adjusted net rose to 1.657 bln usd from 1.108 bln.
"The results for the second quarter of 2007 show strong organic performance both through industry-leading production growth and increased profitability," company president Sergey Bogdanchikov said in a statement. More>>
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) Hospital consolidation advances with state grants
ALBANY, N.Y. (AP) - Hospital consolidations across the state got a boost from the state Health Department, which has announced $362.5 million in grants to 23 hospitals and seven nursing homes.The grants come from a $550 million pool designated for helping hospitals comply with the changes mandated by the state Commission on Health Care Facilities in the 21st Century - also known as the Berger Commission.
Based on the commission's recommendations, state lawmakers required several hospitals to merge under legislation enacted in January.
About 50 hospitals are to be restructured and nine are expected to close.
For those required to close or merge, grants are for retiring debt, paying legal fees and severance packages, and retraining or finding jobs for displaced workers, the department said. More>>
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) (AFX UK Focus) 2007-09-25 03:45 GMT: Singapore shares mixed in early trade on consolidation after Wall St fall
SINGAPORE (Thomson Financial) - Singapore shares were mixed in early trade Tuesday on consolidation following strong gains yesterday and Wall Street's weakness overnight amid concerns that credit markets may not loosen up despite last week's 50-basis-point rate cut by the Federal Reserve.At 10.00 am (0200 GMT), the Straits Times Index was down 6.49 points or 0.2 percent at 3,632.53.
But gainers led losers 283 to 157, with 215 stocks unchanged.
There were 813 million shares traded valued at 564 million Singapore dollars.
The uncertainties caused by the US subprime mortgage crisis remain a key risk for the stock market, DBS Vickers Securities said in a note to clients.
"The market remains vulnerable to (negative) news flow from (the) US and Europe. At this stage, it is premature to determine the possibility of a US slowdown affecting Singapore's earnings growth," DBS Vickers said. More>>
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) Nasdaq getting control of Nordic exchange OMX
Borse Dubai is buying a nearly 20 percent stake in the Nasdaq Stock Market as part of a sweeping global settlement of their battle for control of the Nordic exchange operator OMX.The multifaceted set of deals announced Thursday would help the U.S.-based Nasdaq avoid a bidding war with cash-rich Borse Dubai for OMX while Dubai gains footholds in both Nasdaq and the London Stock Exchange.The deals involving Nasdaq could face scrutiny in the United States, where a Dubai-owned company's plan to manage some U.S. ports previously raised an uproar.The Nasdaq Stock Market Inc. would take control of Stockholm-based OMX while selling a one-fifth stake in itself to Borse Dubai as well as a 28 percent in the London Stock Exchange. Nasdaq had owned a 31 percent stake in the London exchange.Borse Dubai will go ahead with its $4 billion cash bid for OMX, but when that transaction is completed it will sell all shares in the Stockholm-based exchange operator to Nasdaq.In exchange, Nasdaq Stock Market Inc. More>> - (
) Harbor Selectmen continue working on budget problems
The Boothbay Harbor Board of Selectmen and Town Manager Tom Woodin were on the same page in their early Thursday morning meeting last week, literally. At the board's request, Woodin provided a detailed spreadsheet outlining the town's 2007/2008 budget, likely budget shortfalls, and proposed corrective measures to offset the shortfalls. It wasn't the first time that Woodin had rolled out this budget presentation, but it was the first time that Woodin's proposed budget corrections were factored into the selectmen's regular financial report.The details of the Harbor's budget problems and proposed corrective measures have appeared in this paper previously. To summarize, the 2007/2008 budget as approved was likely to be exceeded by over $200,000. Woodin, with the board's concurrence, has restructured the town's debt and has proposed cuts in particular budget accounts to offset budget shortfalls. More>>