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									                                                                                                                                                                                                                            ARAB TIMES, SATURDAY, AUGUST 25, 2012
    BUSINESS                                                                                                                                                                                                                                                                       37


                  China mulls stronger controls                                                                     China to expand rare earths reserves
                                                                                                                                                                                                                                                            Carpenters sit on their
    China is studying new measures to          70 Chinese cities tracked by the                  China plans to add 18,000 tonnes of rare            trading partners. The report did not offer a fig-                                                      motorcycles with their
    beef up controls on the property           government increased in July from                 earths to its strategic reserves following an       ure for the size of current reserves.                                                                  boxes of tools waiting
    sector, state media said, amid             June, latest official data showed.                agreement with a domestic producer, a state-           Another Chinese newspaper said last                                                                 for clients at a corner
    signs of rebounding housing prices.        That represented a doubling from                  linked newspaper said Friday.                       month that China had already started the pur-                                                          street in Hanoi on Aug
       The housing ministry is “closely        25 in June.                                          The government agency that manages               chase — using state funds — and storage of                                                             24. Vietnam’s inflation
    monitoring” changes in the proper-            The price rebound came despite                 reserves will buy light rare earths from the        rare earths for strategic reserves.                                                                    has slowed to 5.04
    ty market and “is studying with rel-       government tightening policies for                country’s largest producer, Inner Mongolia             The latest report said the new deal fol-                                                            percent year-on-year
    evant departments further policies         more than two years that have                     Baotou Steel Rare-Earth (Group) Hi-tech Co,         lowed lower prices, and the transaction could                                                          in August, its lowest
    to strengthen market control”,             included prohibitions on buying                   the National Business Daily said.                   take place as early as next month. The                                                                 rate in nearly three
    Xinhua news agency said late               second homes, an increase in min-                    China produces more than 90 percent of           Baotou company declined to comment on the                                                              years. (AFP)
    Thursday, citing an unnamed offi-          imum down-payments and the                        the world’s rare earths, which are used in          report. But stock of the Shanghai-listed firm
    cial.                                      introduction of property taxes in                 high-tech products, and its control over the        ended the morning up 1.20 percent at 38.06
       New home prices in 50 out of the        certain areas. (AFP)                              elements has sparked a dispute with major           yuan after the news. (AFP)



                                                              Overseas investors deterred by graft, red tape and lack of economic reforms


India’s FDI inflow plummets 78 pct in June
NEW DELHI, Aug 24, (AFP): Foreign              hot destination for foreign money.

                                                                                             Pakistan rupee sinks to record low against dollar
direct investment in India slid by 78 per-        They have been deterred by a string of
cent in June, official figures showed on       graft scandals, suffocating red tape, high
Friday, amid mounting worries about cor-       inflation, sharply slowing growth and the
ruption, bureaucratic delays and lack of       government’s inability to further open up
economic reforms.                              the economy in the face of fierce political   KARACHI, Aug 24, (AFP): The                   Friday, down from 94.70 on                    today,” said analyst Mohammad                    light sweet crude for delivery in
   Foreign direct investment (FDI) in          opposition.                                   Pakistani rupee sank to an all-time           Thursday, and has now lost 33 per-            Sohail of Topline Securities.                    October was at $95.68.
June tumbled to $1.24 billion from $5.66          The central bank said India could help     low against the dollar Friday on              cent of its value against the US cur-           “These factors have contributed                   An official in the Ministry of
billion in the same month a year earlier,      reverse the investment decline by short-      high oil prices and forex reserve             rency since March 2008.                       to the panic in the currency mar-                Finance said Pakistan was set to
figures posted on India’s Department of        ening investment approval times and           fears as the country prepared to                 “The increase in the international         ket.”                                            pay $397 million to the IMF on
Industrial Policy and Promotion website        sorting out land acquisition issues.          repay nearly $400 million to the              oil price... has affected Pakistan’s            In Asian oil markets on Friday,                Friday and hoped it would have a
showed.                                           On Thursday, central bank governor         International Monetary Fund.                  foreign exchange reserves and they            Brent North Sea crude for October                “minimal effect” on the forex
   For the financial first quarter to June,    Duvvuri Subbarao cited the example of           The rupee fell to 94.75 to the              could suffer further with the repay-          delivery stood at $114.54 a barrel,              reserves, which stand at $15.18 bil-
                                                                                             greenback in trading in Karachi on            ment of IMF’s installment due                 while New York’s main contract,                  lion, according to the central bank.
FDI tumbled year-on-year by 67 percent         Singapore, an investment hub, to stress
to $4.43 billion, according to the depart-     the importance of doing away with cum-
ment, with big drops in construction, real     bersome rules that deter business.            ects,” he said in the bank’s annual report.   acquisition process for industrial proj-      overhaul its dilapidated ports, airports,        POSCO’s plans to build a $12-billion
estate, mining, and business and financial        “There is a need to make doing busi-
services.                                      ness easy by adopting models like the one        However, the same day, the govern-         ects.                                         highways and other infrastructure seen as        mill. The scheme has hung in limbo
   Overseas investors have increasingly        in      Singapore      where       multiple   ment postponed deciding on proposed              Experts say foreign investment is vital    key to boosting growth.                          since 2005, running into trouble over
been giving a wide berth to the country of     agencies/ministries sit together to quickly   changes to a long-awaited land acquisi-       for India, which needs to fund a $1 tril-       Among a host of stalled high-profile           land rights and environmental clear-
1.2 billion people, until recently seen as a   give a decision clearing investment proj-     tion legislation intended to ease the land    lion scheme over the next five years to       projects are South Korean steelmaker             ances.



                $5 bn wiped off during week
                                                                                             Asia condensate demand to double
    Vietnam markets slump as
    banking scandal spreads                                                                  by ’16, opens mkt to new suppliers
    HANOI, Aug 24, (AFP): Vietnam’s            nies, licensed in real estate, through
    stock markets have lost more than          which he funnelled millions of dol-
    $5.0 billion in value this week since      lars to amass stakes in other banks                                      About 550,000 bpd splitter capacity to start up in next 4 yrs
    the arrest of two top bankers, as          in his family members’ names, Tuoi
    experts warned the scandal could           Tre said.
    tip the fragile banking sector into           The central bank had said Kien’s           SINGAPORE, Aug 24. (RTRS): Asia’s condensate demand is                                        Yet, by the time these facilities come online, condensate sales from top suppliers such
    full-blown crisis.                         arrest was not related to the ACB —                                                                                                       as Qatar, also the world’s biggest LNG exporter, are slated to fall as the nation feeds
                                                                                             expected to double by 2016 as refiners and petrochemical                                    local demand that is expected to rise with more splitters coming up there. That will open
       Both the founder and the director       where he holds a less than five per-
    general of Asia Commercial Bank            cent stake. One banker based in Ho            makers build splitters to process an abundent supply of the                                 the Asian market to condensate supplies from Russia and North America, traders and
    were arrested this week for eco-           Chi Minh City said the authorities            super light crude into raw materials for making plastics and                                analysts said.
                                                                                                                                                                                           “Within the East of Suez region, we’ve kind of hit a hiatus” in new supply, said Al
    nomic crimes, triggering a run on          were trying to “ring fence” the key           for producing better quality gasoline to feed demand.                                       Troner, president of Houston-based Asia Pacific Energy Consulting. “But I think that’s
    deposits and forcing the central           institution.                                    South Korea, China and Singapore are building distillation units that cost
    bank to provide emergency liquidi-            Others warned however that it                                                                                                          going to give the window of opportunity for extra-regional sellers to start coming in.”
                                                                                             less than one seventh of a typical refinery to process large volumes of conden-               Condensate splitters of close to 550,000 barrels per day (bpd) in capacity would start
    ty to the institution.                     would be hard to restore public trust         sate produced along with liquefied natural gas (LNG).                                       operating between 2012 and 2016, industry data showed.
       After a three-day slump, markets        in the bank, after the arrest of Hai
    rallied Friday with the benchmark          who worked at the ACB for 15                                                                                                                                                                Condensate splitters mainly produce
    VN Index up 1.75 percent, but the          years.                                                                                                                                                                                   naphtha. Asia is short of the product,
                                                                                                                                                                                                                                        especially the heavy grade needed for
    combined market capitalisation of             The $384 million in withdrawals                                                                                                                                                       making aromatics, which is used for mak-
    the Hanoi and Ho Chi Minh City             by depositors was recorded over                                                                                                                                                          ing plastics, synthetic rubber and poly-
    exchanges had dropped by $5.62             Tuesday and Wednesday, the ACB’s                                                                                                                                                         ester. It is also used as an octane booster
    billion dollars since Monday,              new director general Do Minh Toan                                                                                                                                                        in gasoline.
    according to VietStock data.               said according to state media                                                                                                                                                               “Asia needs a lot of naphtha because of
       The arrest of Ly Xuan Hai late          reports.                                                                                                                                                                                 the petrochemical production, especially
    Thursday for “deliberate wrongdo-             The bank counts global banking                                                                                                                                                        in China where it produces end products
    ing causing serious consequences”          giant Standard Chartered as one of                                                                                                                                                       for many countries,” said Victor Shum,
    came just hours after the Asia             its “strategic partners”. The British                                                                                                                                                    managing director for downstream ener-
    Commercial Bank announced he               group has so far remained silent on                                                                                                                                                      gy consulting at IHS Purvin & Gertz.
    had resigned from the position of          the matter.                                                                                                                                                                                 China’s consumption of plastic may grow
    director general, Thanh Nien                  Le Tham Duong of the Ho Chi                                                                                                                                                           by up to 7 percent this year after stalling in
    reported.                                  Minh City-based University of                                                                                                                                                            2011, analysts said. While a slowdown in
       It deepened the problems facing         Banks told AFP that the case could                                                                                                                                                       Europe is weighing on the country’s indus-
    ACB, Vietnam’s largest private             eventually have a positive impact.                                                                                                                                                       trial output, there is little doubt of a revival
    bank, which has seen its share price                                                                                                                                                                                                in demand in coming years.
                                                             System                                                                                                                                                                        Large petrochemical makers such as
    dive nearly 20 percent and had jit-
    tery depositors withdraw at least             “We can’t leave the system as it                                                                                                                                                      Dragon Aromatics in China typically
                                               is... it is time to clean it up. Today                                                                                                                                                   have a condensate splitter at their plants
    $384 million since its flamboyant                                                                                                                                                                                                   to offer some control over costs by reduc-
    founder was arrested Monday.               ACB may have some difficulties
                                               (but) it will be certainly be much                                                                                                                                                       ing reliance on naphtha, said a Singapore-
       On Friday, Fitch ratings agency                                                                                                                                                                                                  based trader.
    placed the ACB on Rating Watch             better” in future, he said.
                                                  In the meantime, most foreign                                                                                                                                                            “They can at least have the option of
    Negative saying the arrests could                                                                                                                                                                                                   buying condensates or naphtha, depend-
    lead to “potential adverse impact...       investors “are still in ‘wait and see’
                                               mode,” Singapore-based Tony                                                                                                                                                              ing on the prices,” he said.
    on depositor confidence in ACB                                                                                                                                                                                                                          Volume
    and its credit profile.”                   Nash, managing director of IHS
       It left the overall bank ratings —      consulting, told AFP. These two                                                                                                                                                               Splitters also make a smaller volume
    already among the lowest in Asia           arrests are “not a wholesale indict-                                                                                                                                                       of middle distillates — the most prof-
    Pacific — unchanged but said it            ment of the Vietnamese banking                                                                                                                                                             itable part of the barrel — ensuring a fat-
    would “closely monitor the poten-          system... yet.”                                                                                                                                                                            ter return for these companies.
                                                  On Monday, the bank’s co-                                                                                                                                                                  Yet, condensate exports from Qatar
    tial impact,” of this week’s develop-                                                                                                                                                                                                 will slip below the current 500,000 bpd
    ments.                                     founder Nguyen Duc Kien was
                                               arrested on allegations of “illegal                                                                                                                                                        once a 146,000-bpd splitter at Ras Laffan
                     Lost                      trading,” triggering the largest ever                                                                                                                                                      starts operating in 2016, offsetting about
       ACB shares rose 3.8 percent             drop on the country’s main stock                                                                                                                                                           110,000 bpd of new condensate output
    Friday, having lost nearly seven           exchange. ACB’s share price has               A man walks in front of the electronic stock board of a securities firm as Japan’s Nikkei 225 index falls 100.94 points to                   from the Barzan gas project, according to
    percent each day for the last three        dropped some 15 percent. Seeking                                                           9,077.18 in Tokyo, Aug 24. (AP)                                                                 Tasweeq and Poten & Partners.
                                                                                                                                                                                                                                             In Asia, condensate output will
    days.                                      to reassure the public, the central                                                                                                                                                        increase slightly in Australia and in
       The broader risk “is that people        bank then said that Kien’s alleged
    lose confidence in the (private)           crimes were not related to his past                                      Mining boom not over: cenbank governor                                                                            Southeast Asia, but most of it will be con-
                                                                                                                                                                                                                                          sumed domestically, analysts said.
    banks and there is a massive bank          activities at ACB and pledged extra                                                                                                                                                           Asian supply is expected stay flat at
    run... it is a systemic economic           liquidity to the bank.                                                                                                                                                                     about 740,000-750,000 bpd, said Victor
    risk,” one banking sector foreign
    expert told AFP on condition of
    anonymity.
                                                  Kien withdrew from the manage-
                                               ment of ACB in 2010, but still holds
                                               stock there and in other Vietnamese
                                                                                             Australia cbank rules out intervention                                                                                                       Shum, managing director for downstream
                                                                                                                                                                                                                                          energy consulting at IHS Purvin & Gertz.
                                                                                                                                                                                                                                             North America is expected to step up
       After a decade of rapid, chaotic        banks.                                        SYDNEY, Aug 24, (AFP): Australia’s            Ferguson said: “You’ve got to under-          tracts to make plastic banknotes.                condensate exports following a shale gas
    bank liberalisation, Vietnam has 42           Information is tightly controlled          top central bank official Friday ruled        stand, the resources boom is over. The           The scandal was exposed by                    boom, while Russia is looking at sending
    domestic banks, many of which are          in Vietnam, but there has been spec-          out intervening in currency markets to        commodity price boom is over and any-         Australian media in mid-2009 and                 more condensate east as oil demand in
    overloaded with toxic debt. Last           ulation that the arrests of Kien and          rein in the booming local dollar, which       one with half a brain knows that.”            police were called in, but a confidential        Europe stagnates amid the euro zone cri-
    year,the government announced              Hai were related to efforts by the            is squeezing some industries.                    The Reserve Bank of Australia pre-         memo emerged this week suggesting at             sis.
    aggressive restructuring plans but         communist government to reform                   The Australian dollar is trading           dicted in its quarterly outlook on mone-      least one senior RBA official knew of               A revamp at the Panama Canal will
    the drive has stalled.                     the banking system, which has the             around 104.34 US cents and has been           tary policy this month that the boom          the allegations long before they became          allow bigger tankers of 160,000 dead-
       Multi-millionaire Nguyen Duc            highest level of bad debt in Asia and         consistently above parity with the            would end “somewhat earlier than pre-         public.                                          weight tonne to pass through, facilitat-
    Kien, 48, a shareholder in some of         is hurting growth, currently running          greenback this year, around 70 percent        viously thought”, putting it at “some-           The Sydney Morning Herald said it             ing condensate exports from the US
    Vietnam’s largest financial insti-         at around 4 percent.                          higher than the lows it experienced dur-      time in 2013-14”.                             showed recently retired deputy gover-            Gulf Coast, Troner said. “The US is
                                                                                             ing the global downturn.                         Stevens said there was no reason to        nor Ric Battellino was given a detailed          going to start exports before 2015 and
    tutions and one of the founders of            Much of the debt is owed by state-                                                                                                                                                      the Russians are already mobilising
    ACB, was reportedly involved in            owned conglomerates that were                    Canberra has previously warned that        alter his view that the pipeline of proj-     memo cataloguing alleged bribery and
                                                                                             the Aussie is likely to remain at a high      ects that helped the country avoid reces-     corruption inside NPA, or Note Printing          additional volumes to go east by next
    drafting the bank reform plans.            encouraged by the government to                                                                                                                                                            year,” he said. “The distance is slightly
       His fall highlights the high-risk       borrow money during the global                level for years as it comes to be seen as     sion in the global downturn would slow        Australia, in 2007.
                                                                                             a safe bet amid global turmoil.               more than previously expected.                                                                 greater, they are both long-haul car-
    economic environment where                 economic crisis in 2009 and 2010 to                                                                                                          Reports said the memo contradicted            goes, but this is formidable competi-
    “the line between violation and            try to create jobs. But many of them
                                                                                                But the strong dollar — which first                    ❑         ❑      ❑                several statements made by Stevens to a
                                                                                             breached parity with the greenback in                                                                                                        tion.”
    non-violation when doing busi-             used the money to expand into other                                                            Central bank governor insisted there       federal parliamentary committee in                  Towards the second half of the decade,
                                                                                             October 2010 — is hurting some local                                                        2011 that the RBA did not know of
    ness in Vietnam is very small,”            ventures, including speculation in            industries, with tourism, manufacturing       had been no attempt to cover-up alleged                                                        Brazil and East Africa could also be
    one Hanoi-based Vietnamese ana-            the property market, and have been                                                          bribery at its note-printing subsidiaries     bribes and corruption before the 2009            potential suppliers as they step up natural
                                                                                             and education exports particularly hard-                                                    media reports.
    lyst told AFP.                             unable to repay the money. Efforts to         hit.                                          as he won support from senior politi-                                                          gas production, he said.
       “One can be a very successful           clean up the system are believed to                                                         cians.                                           The development sparked a media                  Russian producer Novatek was already
                                                                                                Reserve Bank of Australia governor                                                       frenzy and calls for an independent
    businessman today, but can turn            be causing tensions within the coun-          Glenn Stevens told a parliamentary               Pressure mounted this week for an                                                           selling Porvosky condensate to North
    into a criminal the very next day,”        try’s tightly intertwined political and                                                     independent inquiry into the bank’s           inquiry by the Greens party, but Stevens         Asian users, traders said.
                                                                                             committee he thought the currency                                                           denied failing to alert police fast
    due to the communist country’s             economic elite.                               would be trading lower, given slowing         handling of the scandal, but Stevens                                                              Still, the Middle East will play a dom-
                                                                                                                                           said it had “at all times” dealt appropri-    enough.                                          inant role in Asia’s condensate market.
    opaque legal and political systems,           ACB, owned 15 percent by                   global growth and changing circum-
                                                                                                                                                                                            While it had been claimed the memo
    he said.                                   Standard and Chartered, was con-              stances for terms of trade.                   ately with authorities and responded                                                           Qatari exports will continue and Iran may
                                                                                                                                           honestly to questions.                        pointed to corruption, legal advisers            be become a regular supplier as conden-
       Kien, who was widely seen as            sidered one of the better run of the                      ❑        ❑      ❑                    “There was no attempt to hide any          “did not view it that way”, he said.             sate production is expected to offset
    being close to the Prime Minister,         more than 40 banks in Vietnam.                                                                                                               “It is completely without foundation          declining crude output in the country.
                                                                                                Australia’s central bank governor          information,” he said in a testimony to a
    has been accused of wrongdoing at          Fears of more arrests are causing             said Friday he sees no immediate sign         parliamentary committee.                      to suggest that this process ... represent-         Iran’s condensate output is expected to
    three smaller financial companies          political uncertainty and unnerving           of an end to the country’s mining boom,          Eight executives from two firms            ed an attempt at a ‘cover up’ by anyone          rise by 280,000 barrels per day (bpd) by
    where he is chairman.                      those with exposure to banking                a day after the resources minister            either wholly or partly-owned by the          in the Reserve Bank,” said Stevens.              2020 as it will start up several phases of
       He evaded banking regulations           stocks, contributing to the decline           declared it was over.                         bank — NPA and Securency — are fac-              He added that the bank had done a lot         gas production at its vast South Pars field
    by setting up a web of shell compa-        in investor confidence.                          Glenn Stevens weighed in on the            ing claims they conspired to bribe offi-      of work to tighten controls at its two           despite project delays, according to
                                                                                             debate after Resources Minister Martin        cials at foreign banks to secure con-         note-making companies.                           FACTS Global Energy.

								
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