ARAB TIMES, THURSDAY, MAY 19, 2011 BUSINESS 44 Rosneft receives new proposal Poland targets shale gas Russia’s state-run oil firm Rosneft said on Wednesday received proposals going outside the framework of pre- Poland is planning a major investment in shale gas, a But Poland seems undeterred by the risks, saying it it had received new cooperation proposals from BP viously concluded agreements,” the Rosneft statement potentially huge source of energy — and environmen- cannot afford to ignore such a valuable reserve of ener- after their joint Arctic exploration agreement collapsed said. tally dangerous chemicals — to break free of depend- gy. this week. Rosneft said these offers’ discussion did not require ence on Russian imports and boost its economy. Foreign Minister Radek Sikorski noted on The Russian giant did not give details nor make clear the company to extend the Monday deadline of the The use of shale gas, pioneered by the US and Wednesday how volatile energy markets have whether they included a potential new Arctic agree- original agreement. Canada, is controversial for its impact on the environ- become. Recent world events — particularly the insta- ment covering joint exploration of Russia’s northern “These proposals make it possible to discuss further ment and will be one of the main points on the agenda bility in North Africa and Japan’s nuclear disaster — reserves. cooperation outside the framework of the already when President Barack Obama visits Warsaw on May have caused oil prices to soar, hurting the global eco- The statement said the offers were made as the lapsed agreement,” Russia’s biggest oil producer said. 27-28. nomic recovery. sides tried to negotiate a way out of a dispute between The tie-up’s collapse left Rosneft without a partner Some US states were forced to step up environmen- “Exploration of our own resources is our chance and BP and its TNK-BP Russian joint venture which scup- who could provide it with the equipment and techno- tal standards after high levels of methane were found our obligation,” Sikorski said at a conference of experts pered the $16 billion deal. logical know-how to tap the remote fields and then in tap water, while France recently put a similar project on shale gas in Warsaw. Shale gas is “a chance to limit “As a result of the negotiations... Rosneft has deliver their oil to market. (AFP) on hold. Poland’s and Europe’s dependence on imports.” (AP) Rompuy speaks at China Europe Int’l Business School EU president says European recovery, euro strong SHANGHAI, May 18, (AP): Ailing All 27 EU members are reducing their should downplay the role of the dollar.” European economies are getting their houses in order and the euro remains a fiscal deficits, Van Rompuy said. And although Europe is still muddling through Returning to Beijing as he wrapped up his visit to China, Van Rompuy met later Shares of all four banks decline trustworthy currency, the European bailouts of Greece and Ireland and work- Wednesday with Vice President Xi Union’s president said Wednesday, ing out arrangements to stabilize Jinping, who is widely expected to describing the region’s recovery as “not bad at all.” Portugal, those countries account for only 7 percent of the gross domestic product become China’s next top leader. “You have made effective efforts in Moody’s downgrades Australia’s big four banks “Newspaper headlines might some- of the world’s largest combined economy. strengthening Europe’s economic gover- times overshadow that the economic “The members of weak economies nance and addressing the sovereign debt SYDNEY, May 18, (AFP): Moody’s on affects the country’s big lenders — tively high levels of wholesale funding recovery in Europe as a whole is on track have to do their homework and have to crisis,” Xi told Van Rompuy. Wednesday downgraded the debt rat- Australia and New Zealand Banking and the global financial crisis has and even gaining momentum in some put their houses in order and that is what In both Beijing and Shanghai, Van ings of Australia’s big four banks to Group Ltd, Commonwealth Bank of underlined the speed with which shifts member states,” Herman Van Rompuy they are doing,” Van Rompuy said. Rompuy urged China to do more to make Aa2, citing their dependence on Australia, Westpac Banking Corp, in investor confidence can impact said in a speech to the China Europe Regardless of the challenges all gov- its economy a level playing field for for- volatile global lending markets. and National Australia Bank Ltd. bank funding. International Business School in ernments face in bringing their deficits eign business, especially in the area of The move was well-flagged, with “The downgrade reflects our view “While the major banks have Shanghai. and debts under control, “the euro government procurement. Moody’s placing the banks on a neg- of the Australian banking system’s reduced their sensitivity to disrup- ative ratings watch in February, and structural sensitivity to conditions in tions in the wholesale funding mar- remains a “very strong currency trusted The EU, which has a population of brings them in line with the other two wholesale funding markets,” said kets, the Australian financial sec- “Our economic fundamentals remain by investors worldwide,” Van Rompuy about 500 million, is China’s largest major ratings agencies, Standard & Patrick Winsbury, senior vice presi- tor’s long-term, underlying reliance sound,” he said. said. export market, but European firms have Poor’s and Fitch, analysts said. dent based in Moody’s Sydney office. on offshore debt remains in place,” While forecast European growth rates He also defended the U.S. dollar, say- been battered by low-cost Chinese tex- The downgrade was from Aa1 and “Australia’s major banks have rela- he added. of 1.8 percent this year and 2.0 percent in ing that challenges to its dominant role in tiles, leatherwear and other goods. 2012 may appear modest compared with world finance and trade crop up each Meanwhile, European companies, along China’s near 10 percent pace, they reflect time it weakens, but are premature even with other foreign firms, complain of reg- exports, are also an irritant. “The impact of one’s exchange rate on the past six months, as China’s yuan was the maturity and prosperity of the though the Chinese currency is bound to ulatory barriers hindering their ability to China needs to keep moving toward the global system is bigger to the extent allowed to appreciate from roughly 6.6 to region’s economies. eventually take on a more important role. compete freely in China. Beijing’s cur- more “appropriate exchange rates,” Van one’s economy grows,” Van Rompuy the U.S. dollar to the current level of “It is really not bad at all,” he said. “It is a useless exercise to say we rency controls, which help boost Chinese Rompuy said. said, saying progress had been made in about 6.5. Commodities may correct: IMF IMF issues warning to Greece; New HK exchange to have bigger Asia role ECB rejects ‘soft restructuring’ HONG KONG, May 18, (Agencies): duction after massive disruptions fol- Hong Kong’s new commodity exchange backed by China’s biggest lowing the March 11 earthquake and tsunami that wiped out much of the Athens appoints advisers for privatisation projects bank and a Russian tycoon began trad- country’s industrialized northeast. ing Wednesday as the Asian city Bank of America Merrill Lynch said attempts to challenge established mar- a survey of fund managers for May ATHENS, May 18, (RTRS): The IMF warned Greece on their Greek debt but have also made clear that their first priority is ensuring Prime kets in Europe and the US showed investors growing more confi- Minister George Papandreou’s government steps up reforms. Wednesday that a drive to shore up its troubled finances “The programme will not remain on track without a determined reinvigoration of Exchange officials said that Asian dent in Japan’s ability to rebound from countries, especially China and India, the disasters. would fail unless Athens redoubled its reform efforts, and the structural reforms in the coming months,” Poul Thomsen, an International Monetary have been driving demand for global In April’s survey, respondents were ECB hit back at suggestions a debt restructuring might be the Fund envoy who arrived in Greece last week to assess its progress in meeting fiscal tar- commodities and the new exchange is divided evenly between those expect- gets linked to its EU/IMF bailout. solution. “Unless we see this invigoration, I think the programme will run off track,” he said, aimed at helping traders in the region ing the country’s economy to weaken European finance ministers broke a taboo this week and acknowledged for using some of the strongest language since Greece sealed the 110 billion euro rescue have a bigger say in setting prices. in the next year and those expecting it Trading of gold and other major com- to strengthen. This month, a net 59 the first time that some form of restructuring might be required to ease one year ago. modities has traditionally been domi- percent expected it to strengthen, the Greece’s debt burden, which at 150 percent of annual output is among the After Thomsen spoke, Greek Finance Minister George Papaconstantinou vowed to nated by exchanges in Chicago, New bank said. highest in the world. press ahead with budget consolidation efforts. He raised the prospect of firing some York and London. Reports that Japan’s Renesas They have said they could ask private creditors to agree to extend the maturities of public sector employees and said the government would seek talks with the opposition The only product available to trade Electronics Corp. ‚Äî a major provider to discuss ways out of the crisis. so far on the Hong Kong Mercantile of microprocessors that control brakes, Facing a third straight year of reces- Exchange is a futures contract for one engines and transmissions for cars ‚Äî sion, Papandreou’s government is strug- kilogram of gold with physical deliv- will boost production at a key plant gling to rein in rampant tax dodging and ery in Hong Kong. Some 3,415 con- helped lift sentiment, Kyodo news has come under pressure to sell off tens of tracts worth $163.3 million were trad- agency reported, citing analysts. billions of euros in state assets to plug ed by late afternoon. Renesas shares soared 5.8 percent. gaping budget holes. A silver contract will start trading in South Korea’s Kospi climbed 1.6 Under its rescue terms, Athens was to July. To capitalize on growing investor percent to 2,135.78, with automakers cut its deficit to 7.6 percent of GDP this demand for China’s gradually and shipbuilders leading the way. year. Without further measures, Thomsen strengthening currency, a yuan- Hyundai Heavy Industries Co., South said, Athens would not be able to get it denominated gold futures contract will Korea’s leading shipbuilder, shot up much below 10 percent. launch in the autumn. 6.6 percent. Kia Motors Corp. jumped Concerns about Greek debt pushed the Other products involving precious 3.7 percent. euro below $1.42 and sent the risk premi- and base metals, agriculture, energy Mainland China’s Shanghai ums on Greek 10-year bonds to their and commodity indexes are also in the Composite Index rose 0.7 percent to highest level in a week. The cost of insur- pipeline. Shareholders in the exchange 2,872.77 and the smaller Shenzhen ing government debt against default also include Industrial & Commercial Composite Index advanced 0.5 percent rose. Bank of China Ltd., the country’s to 1,202.70. Huaneng Power Euro zone ministers have not spelled biggest state-owned commercial International gained 1.3 percent amid out how what they refer to as a “reprofil- lender, and Cosco Group, a state- reports the government might allow a ing” of Greek debt would work. owned shipping company. EN+ slight increase in electricity rates for Convincing private holders of Greek Group, a mining and energy group some regions hit by power shortages. bonds to voluntarily accept later repay- controlled by Russian tycoon Oleg Coal miner and power producer China ment could be difficult and require costly Deripaska, is also a shareholder. Shenhua Energy added 0.9 percent. guarantees to avoid a hit to banks. Hong Kong’s attempt to wrest the Hong Kong’s Hang Seng rose 0.5 Such a move would buy Greece more commodities trading crown from the percent to 23,011.14 and Australia’s time but not reduce its overall debt bur- West follows one by Singapore last S&P/ASX 200 inched up 0.2 percent den. Many economists believe it would year. The Singapore Mercantile to 4,693.70. be followed by a more aggressive restruc- Exchange opened for business in Peter Elston, a strategist at turing involving “haircuts”, or forced August billing itself as a “new-genera- Aberdeen Asset Management in losses, of 50 percent or more from 2013, tion” market poised to ride a “new Singapore, said Asian stock markets when policymakers have said they could world economic order” led by Asian enjoyed a bounce that was nothing opt for radical steps. growth. “beyond a slight technical reaction to The European Central Bank, which The Singapore market trades about recent weakness.” holds up to 50 billion euros in Greek sov- 1,000 contracts for gold, silver, copper, “There are so many issues out there ereign bonds on its own books, has crude oil and currency futures worth causing a bit of market indigestion, Greece’s Prime Minister George Papandreou speaks during an Economist conference in Lagonissi, near Athens on May warned that even a “soft restructuring” $30 million to $50 million daily but so that’s really what’s caused the weak- 17. Papandreou once again ruled out a restructuring of Greece’s debilitating public debt, and said his Socialist govern- ment was focused on cutting the budget deficit to achieve primary surpluses, while pushing through a new platform of would put the stability of the euro zone at far has made little impact globally. ness in markets in recent days,” he risk and officials were out in force reiter- Its trading volumes are dwarfed by reforms and privatisations through 2015. (AP) said. Rising oil prices sent crude and ating that message on Wednesday. CME Group, which operates futures energy shares higher. CNOOC Ltd., markets in New York and Chicago that China’s main offshore oil and gas pro- Developing countries in race for IMF top job Opposed traded an average of 230,000 gold con- ducer, bounced 1.5 percent higher. “I’m opposed to soft restructuring tracts a day in April. Thousands of dif- Shanghai-listed Shanxi Guoyang New because I don’t know what it means. Europe moves to protect ‘job claim’ ferent types of commodity, currency Energy Co. Ltd. rose 2.9 percent. Nobody knows what it means,” Lorenzo and equity index futures are traded on Bini-Smaghi, a member of the bank’s CME’s markets, which had an average Also: executive board, said in Milan. daily turnover of 12.1 million con- SINGAPORE: Commodity prices are Speaking in Athens at the same confer- tracts in April. likely to fall further in the next month BERLIN, May 18, (AP): Europe is moving for Greece, Ireland and Portugal and is percent of voting share to emerging and ence as Thomsen, ECB board member The Hong Kong Mercantile or two before rebounding towards the quickly to protect its traditional claim to playing an important part in monitoring developing countries, but all the changes Juergen Stark warned policymakers that Exchange is betting that it will benefit end of the year as demand continues to the top job at the IMF ahead of the expect- those countries’ compliance with the loan have not taken effect yet. it was an “illusion” to think such a move from its proximity to mainland China grow, prompting MF Global to expand ed departure of current chief Dominique conditions. Germany’s Steegmans said at a gov- would resolve Greece’s problems. to drive trading volume. Hong Kong is its presence in the sector, a senior com- Strauss-Kahn, fending off any demand South Africa’s finance minister, howev- ernment press briefing that Europe has European politicians, however, are a special administrative region of pany executive said. from developing countries to claim the job er, said that a new IMF chief should come “an abundance of highly qualified candi- under pressure from angry taxpayers to China with its own financial system. Brokerage MF Global Holdings, for their own. from a developing nation to reflect the dates.” broaden out the burden of their bailouts “With our strategic location in Hong with a market value of $1.4 billion, Strauss-Kahn’s arrest on sex charges has interests of all countries. Steegmans didn’t name any potential to include banks that have lent to Greece Kong, HKMEx is ideally positioned to maintained its long-term bullish out- put new focus on the informal arrangement “It is against this background that South candidates or say whether Germany itself by buying up their bonds. facilitate trading in commodities look for the commodities and expected under which a European heads the IMF Africa calls for a candidate from a devel- might propose one. But he said it “makes Euro zone countries, together with the between China and the rest of the prices to rise 10-20 percent over the and an American the World Bank. oping country to be given the opportunity a lot of sense” to have an IMF chief who IMF, bailed out Greece and Ireland last world,” said exchange president Albert next 12 months from current levels Europeans are citing the IMF’s key role in to be the Managing Director of the IMF,” is “very familiar” with “Europe’s particu- year, and approved a new 78 billion euro Helmig. due to a weaker dollar and rising glob- fighting the eurozone’s debt crisis as a key Pravin Gordhan said in a statement. “Such larities, the currency questions and also rescue for Portugal on Monday. Markets in the Chinese cities of al demand. reason to keep the job on their continent. a candidate will bring a new perspective the political circumstances here.” Governments have pledged not to Shanghai, Dalian and Zhengzhou trade “We will see some weakness But many developing nations note that that will ensure that the interests of all Chancellor Angela Merkel has made force any losses on private holders of high volumes of commodities includ- between now and the end of summer because of their increasing wealth and role countries, both developed and developing, the same point, along with several Greek debt before 2013, when a new ing gold, fuel oil, rubber and industrial and then I think we are going to see a in the global economy, they should have a are fully reflected in the operations and European finance ministers. Possible anti-crisis facility — the European metals. However, those markets are steady move up,” MF Global’s Head chance to name the successor. policies of the IMF.” candidates mentioned in news media Stability Mechanism (ESM) — is due to off-limits to foreign traders and there- of Commodities Fred Demler told German government spokesman speculation include French Finance take effect. But they say a voluntary debt fore don’t play any role in setting glob- Reuters. Christoph Steegmans said Wednesday Interim Minister Christine Lagarde, French exchange before then might be an al prices. “I feel commodities are overpriced that Strauss-Kahn was entitled to pre- US Treasury Secretary Tim Geithner Finance Minister Christine Lagarde; the option. The new exchange’s 15-hours trad- by 5 to 10 percent right now, but a year sumption of innocence but “if the top job said Tuesday that Strauss-Kahn is “obvi- former head of the German central bank, “During the crisis, it was almost exclu- ing day will overlap with US and from now they will be 10 to 20 percent at the IMF does have to be filled at some ously not in a position” to run the IMF and Axel Weber; the head of Europe’s bailout sively European taxpayers that ultimately European trading hours, which higher than they are now.” point, then the government argues that that the organization needs to find an inter- fund, Klaus Regling; and Peer bore the risk of investors’ decisions. That exchange officials say will encourage The 19-commodity Reuters- there should again be a European at the im managing director. Steinbrueck, a former German finance is inadmissible,” German Finance cross-continent trading and boost liq- Jefferies CRB index has tumbled 9 top of the IMF.” The United States has a major say in minister. Minister Wolfgang Schaeuble said in a uidity. percent since April 29 when hedge Strauss-Kahn remains jailed in New determining who will head the IMF, in part Candidates from elsewhere include speech in Brussels. Japan’s Nikkei 225 index rose 1 per- funds and other large financial York after his arrest for allegedly sexually because it holds the largest number of Turkey’s former finance minister, Kemal “It was right to stop financial markets cent to close at 9,662.08, helped by investors began cutting their exposure assaulting a hotel maid, and his departure is votes at the 187-nation international lend- Dervis; Singapore’s finance chief Tharman from disintegrating in the past but it reports of a recovery in factory pro- to commodities. expected to be only a matter of time. ing agency. Changes to the IFM’s gover- Shanmugaratnam; and Indian economist would be wrong to cushion their losses in The IMF has contributed to bailout loans nance in 2008 and last year will shift 5.3 Montek Singh Ahluwalia. the future,” he added.