ARAB TIMES, SATURDAY, AUGUST 20, 2011 BUSINESS 37 Asian LNG prices rise above $15m Hong Kong arrests man over exchange hacking Asian liquefied natural gas (LNG) spot prices for September increased 9 percent year-on-year. Hong Kong police said on Friday they had arrested a 29- half a day. The website of the Hong Kong bourse, the rose above $15 per million British thermal units (mmBtu) Spot prices in Asia have now risen over 50 percent since year-old man over a cyber attack on the city’s stock world’s most valuable exchange operator, displays listed during the week, with strong Asian demand keeping prices Japan’s earthquake in March boosted demand for LNG. exchange website which halted trading in the shares of companies’ regulatory filings. high. The spread between Asian spot prices around $15.10 seven companies. Police said they detained the man on The bourse said it had to suspend the trading to ensure “Asian markets were holding just north of the $15 level for and British prices was about $5.40 per mmBtu this week, Thursday, seizing five computers, two mobile phones and investors had equal access to the filings. cargoes as the demand for LNG continues to ramp up,” wide enough to coax cargoes to Asia from the Atlantic. other items, a police spokesman told AFP. The exchange had said its other systems were not affect- ICAP analysts said in a note. Top LNG importers Japan and Recent Nigerian cargoes have been sent east to higher- “He is being investigated under the offence of access to a ed and trading in its securities and derivatives markets were South Korea both reported higher imports for July. paying Pacific markets. Shipments to Asia from the Middle computer with criminal or dishonest intent,” the spokesman operating normally. Japan’s LNG imports rose 14.3 percent in July compared East and the Atlantic Basin increased by 1.357 million and said, adding that the man was being held for questioning. The hacking was detected after HSBC announced the with the same period a year earlier as the nation continues 1.146 million metric tons respectively in July, while Asia- The bourse was hit last week by what it called a “mali- sale of its United States credit card and retail services busi- to depend on the fuel to replace nuclear power lost due to Pacific shipments of LNG to Asian buyers fell, Waterborne cious” attack which caused firms including banking giant ness as part of an overhaul to streamline its operations, while the March earthquake, while South Korea’s imports LNG analysts said in a note. (RTRS) HSBC and flag carrier Cathay Pacific to suspend trading for Cathay reported its 2011 half-year earning results. (AP) Western prospects dim, developing economies can do only so much Emerging powerhouses can’t save the world: analysts LONDON, Aug 19, (RTRS): Emerging rent account deficit leaves it vulnerable For Bill Belchere, global economist dynamic that is developing here is is a shift that matters. “China’s own if the rich world fell into recession, and markets will not save the world if the to an outflow of capital. Brazil is slow- at Mirae Asset Securities in Hong under-appreciated outside Asia,” demand has quickly become an impor- reduced demand for its exports would West slides back into recession. In an ing under the weight of lower spending Kong, Asia is finally reaping the bene- Belchere said. tant driver of growth in the rest of Asia; have a knock-on effect on commodity interconnected global economy, decou- by middle-class consumers hit by ris- fits of policies to nurture home-grown Rob Subbaraman, chief Asian econo- it is no longer just an assembly hub for prices and producers. This was the pling is a beguiling myth. ing interest rates. demand. With incomes across much of mist at Nomura in Hong Kong, said the the region,” Subbaraman said. main factor behind a cut in Morgan As fears mount that the developed The resilience displayed by the likes the continent now rising faster in the region would run into headwinds from Fitch on Tuesday cited the increased Stanley’s projection of 2012 GDP world is shifting from slow growth to of China and Indonesia is evidence of a countryside than in towns, millions of slower exports to the United States, importance of Asia as one reason why growth in Latin America, announced no growth, emerging markets seem to secular shift in the global economy peasant farmers are suddenly able to Europe and Japan. But he too pointed the economic outlook in sub-Saharan on Thursday, to 3.6 percent from 4.6 many economists better placed to from North to South, from West to afford a motorbike and a mobile phone to Asia’s reduced reliance on external Africa is brighter than it has been in percent. weather the storm than they were dur- East, rather than a substitute for zero or and perhaps set up their own small demand. In China, for example, net many decades; as trade with Asia “We are wondering what’s going to ing the great financial crisis of negative growth in the West. businesses. exports subtracted from GDP growth in remained buoyant, Africa was less happen with China right now,” said 2008/2009. Morgan Stanley estimates emerging “What we’re seeing is new poles of the first half of the year. exposed than in the past to what hap- Pedro Mariani Lacerda, the head of That is not universally true. India is markets will generate 80 percent of domestic growth in the larger The size of China’s economy will be pens in advanced countries, the ratings Horto, a financial consultancy and hamstrung by high government debt global gross domestic product growth economies. No one is totally insulated close to $7 trillion this year, up from agency said. investment fund in Rio de Janeiro, said and inflation. Turkey’s yawning cur- in 2011-2012. in a globalised economy, but the $4.5 trillion as recently as 2008, so this Still, China would not be unscathed of Brazil’s economic prospects. Hurdles ahead Smarting companies strengthen Australia having scope to defend its economy case for India’s policy breather SYDNEY, Aug 19, (RTRS): Australia Between September 2008 and April is almost uniquely placed among its rich peers in having scope to defend 2009 it slashed rates by 425 basis points to 3 percent, the lowest in over 11 interest rate hikes since March 2010 its economy from a global slowdown, two decades. yet there are hurdles this time that will That pulled mortgage rates down NEW DELHI/MUMBAI, Aug 19, (RTRS): A. Chandra “The scenario is that industries require my technology and services, but I do not have make it much harder to repeat the sharply and delivered a powerful the funds to start the projects,” said Shekhar, who predicts Solar India Solutions will do recession-beating stimulus of boost to incomes as around 85 percent Shekhar, the CEO of a small alternative energy solutions firm well to break even this fiscal year with no chance of order-book growth. 2008/09. of all home loans in Australia are at the heart of India’s much-vaunted boom story, should be “While we are trying to raise money, it has become too costly to even think about it. With laudably low government based on floating rates. rolling in orders and expanding his business on the coat-tails It is impossible for me to approach a big company without financial backing.” debt and the highest interest rates of Anticipating a replay of the last cri- any developed nation, there seems sis, the market has already moved to of near double-digit economic growth. Reeling from 11 interest rate rises since March 2010, Shekhar is one of a chorus of plenty of scope to ease should turmoil price in cuts of a full percentage point But his funding and growth prospects for the immediate future have dried industrialists and corporates suffering from the central bank’s single-minded strategy, in world markets morph into some- by Christmas with a chance of a move up, thanks to the anti-inflationary crusade of one of the most aggressive cen- which is increasingly presenting policymakers with a dilemma. thing worse. as early as September. tral banks in the world. With the government effectively paralysed by corruption scandals and protests, the “Australia arguably has more room However, there is a crucial differ- Reserve Bank of India (RBI) has been left for policy stimulus than any other ence with 2008: inflation. to fight the inflationary battle without fis- advanced country,” said Nomura sen- While underlying inflation was cal policy support, and equipped with lim- ior economist Stephen Roberts. “But much higher back then the central ited tools. It seems determined to persist politics and inflation mean there’s no bank was confident it had peaked and with its crusade against inflation for now. way it can ease on the scale it did dur- would head lower over the next cou- “At the moment the biggest priority for ing the last global crisis.” ple of years. India is inflation. Of that, there is very lit- On the face of it, Australia’s Labor Underlying inflation topped out tle doubt in my mind”, said Bimal Jalan, government has plenty of ammunition around 4.7 percent in the third quarter a former governor of the RBI. on hand. Net debt is expected to peak of 2008 and slowed steadily to a India’s growth rate is slowing — car at 6 percent of the country’s AUS$1.3 trough of 2.25 percent in the last quar- sales in July contracted for the first time trillion of annual gross domestic prod- ter of 2010. But since then it has sur- in nearly three years — and consumer uct (GDP), almost laughably small prised by accelerating to 2.7 percent goods demand in June slowed substan- compared to its peers. and the RBA recently had to lift its tially from a year earlier. Manufacturing Even gross debt of 24 percent forecast for inflation to 3.25 percent output also slowed substantially in the seems trifling when the OECD aver- for all of 2012 and 2013. April to June period. age is nearing 100 percent. That is a Since the bank has a target of keep- Businessmen like Shekhar are not alone. major reason Australia is now only ing inflation within 2 and 3 percent for Many small businesses in India have aban- one of 14 countries in the world rated the medium term, that gives it very lit- doned expansion plans or closed down triple-A by Standard & Poor’s. tle wiggle room on policy. units due to a dearth of affordable finance, The government ran budget sur- “We still have higher rates in mind says Chandrakant Salunkhe, president of pluses in 10 of the 11 financial years as the RBA is forecasting underlying the Small and Medium Business to end June 2008, giving it the scope inflation at, or above, the top of the Development Chamber of India. to launch a powerful stimulus package target band for the next three years,” In the debt-intensive real estate indus- worth 6 percent of GDP when the said Kieran Davies, chief economist at try, major players have sold off land global financial crisis struck. RBS. parcels to meet soaring repayments, and Deficit “Annualised inflation is already there are signs of a squeeze in sectors above the band, which is why the from autos to mining to fast-moving con- But with the budget now in deficit sumer goods - all at the heart of the India for three years there is less money to Bank almost raised rates this month, and we suspect that the inertia in price growth story. splash out should the global economy “There is a likelihood of closing down falter again. Indeed, tax receipts are pressures means that inflation could continue to surprise the market.” many SMEs for want of funds ... It is still running short of forecasts as therefore indispensable that the RBI Australians chose to spend less and Australia’s economy shrank 1.2 percent in the first quarter from the should not only bring down interest rates save more, and coal exports struggle to but also introduce new lending schemes recover from flooding early in the year. previous quarter, suffering its biggest decline in 20 years, after extensive for the sector at lower interest rates,” said Yet the far greater constraint is An Indian stockbroker watches share prices on his screen at a brokerage house in Mumbai on Aug 19. Indian stocks slid Salunkhe. domestic politics. flooding hit coal exports, but a mining nearly three percent to a 15-month low in afternoon trade extending opening losses, as Asian and European markets boom is expected to help growth That would be doable if inflation was It is almost an article of faith in plunged on feats of a fresh recession. (AFP) falling quickly. But headline inflation Australia that budget surpluses are bounce back quickly this year. Data showed annual growth in See Market Page 39 remains above 9 percent, much above the good, deficits bad and debt downright RBI’s comfort level of 4 to 4.5 percent, evil. The former Liberal-National gross domestic product slowed to a tepid 1 percent, down from 2.7 per- forcing the central bank to continue its government spent well over a decade demonising government debt, long cent. The results were in line with a Reuters poll of analysts. Household spending clammed up hawkish monetary policy stance. “A formal lowering of its GDP growth before it ever became a lightening rod forecast of 8 percent may not happen in US politics. Damage from the flooding and until ... October, but it will probably sig- As a result the current Labor gov- ernment felt it had to commit to a sig- nificant tightening of fiscal policy to return the budget to surplus by Cyclone Yasi came at a time when ris- ing utility and fuel prices were already crimping household spending and a strong local dollar was taking a toll on Australia retail sales data so soft nal downside risk to its growth forecast,” leading brokerage house CLSA said in a note. trade-exposed industries like manu- “But RBI will maintain its hawkish 2012/13, an earlier date than many SYDNEY, Aug 19, (RTRS): “It’s true that people are spending in away,” he added. stance”, the note added. economists thought necessary. facturing and tourism. Australia’s official retail sales data is different ways. Over time our wealth To gauge the extent to which retail Add to that the effect of earth- India’s stubborn inflation is due to sup- And Labor now governs in a minor- so soft that it gives the impression that has increased and we are spending less sales data understates the strength of ply bottlenecks, food prices and high oil ity, with the aid of a handful of inde- quakes in Japan and New Zealand, the nation’s major trading partners, and household spending has clammed up, and less on essential goods,” James the supposedly closeted Australian prices, and now it faces worries that a pendent and Greens MPs, meaning but even official statisticians doubt the said, noting that an early-1960s shop- consumer, it is worth comparing retail possible new round of quantitative easing that virtually any legislation, even rel- it’s not surprising that the economy atively uncontroversial bills, are noto- went into reverse. situation is really that bad. ping list was mostly made up of food sales data with a less conspicuous data by the US Federal Reserve could see a riously difficult to push through. “The economy has hit a temporary The Australian Bureau of Statistics and other essentials. series — household final consumption flood of capital into emerging markets. pot hole courtesy of the natural disas- believes its monthly data series, a “It’s nowhere near that order of expenditure. “Obviously, Ben Bernanke’s upcoming Talk that the latest turmoil in global speech in Jackson Hole, Wyoming, will markets could lead to slippage in the ters this year,” said Besa Deda, chief number that can move currency and magnitude now.” Household consumption spending is surplus timetable was instantly economist at St George Bank. “We are interest-rate markets, is in important Those June figures, released on Aug. produced quarterly, as part of the be the joker in the pack,” said a note by leading brokerage house CLSA. “Any pounced upon by the opposition as looking for the economy to recover as need of modernising and probably no 3, combined with global fears of a national accounts, and is published hint of further strong quantitative easing evidence the government could not be this year progresses, as a rebound in longer reflects the true strength of world economic slowdown to hurt the about two months in arrears — way by Bernanke could favourably affect risk trusted. coal exports occurs and we get a boost household spending. Australian dollar and to help drag the too late for markets to pay much notice appetite and commodity prices, and Which, in turn, forced Prime from construction.” “We think retail trade (data) covers local stock market to an 11-month low. — but it is a lot closer to actual house- hence will be bad for India’s inflation and Minster Julia Gillard to state in parlia- The Australian dollar rose nearly around about 35 percent of household They seemed to chime with endless hold spending patterns. half a cent to $1.0737, as investors interest rate outlook.” ment this week that the government consumption spending these days,” complaints from the retail industry In the March quarter, household With New Delhi only recently showing was “absolutely determined” to meet were relieved that the contraction was the 2012/13 target. not as dire as some had predicted. said Bruce Hockman, the bureau’s about a cautious mood on the high consumption jumped 6 percent from a fiscal discipline with a long delayed 9 “The government is only too adept However, the currency remained well head of national accounts data, street and with figures showing house- year earlier while retail sales rose just percent increase in diesel prices in June, below a 29-year peak of $1.1012 set a explaining that the monthly retail hold savings rates at 20-year highs. 0.8 percent. and capacity bottlenecks slow to clear as at painting itself into corners,” said Roberts at Nomura. “Then again, it’s month ago. series had slowly drifted away from But, oddly, the retail data also The government has allocated A$30 big projects and reforms stall, fighting almost impossible to have a rational The Reserve Bank of Australia has the full reality of modern household appeared to contradict the overall million ($31.5 million)over the next inflation has been left to the central bank. said that it would look past the weath- Despite the series of policy rate debate on debt in Australia and that spending habits. health of the economy, which is enjoy- four years for the bureau to improve increases, real interest rates in India are greatly reduces the flexibility of fiscal er-induced slowdown in growth when “When it (the data series) was first ing its biggest mining boom of all the quality of its economic data, with still in negative territory with the repo policy.” setting monetary policy, believing the introduced ... it was about 60 percent, time, low unemployment and rising retail sales a top priority. rate (the RBI’s main lending rate) still With fiscal firepower muzzled, it is effects will be temporary. so households have moved away from wages. The focus will be mainly on bring- lower than the headline inflation rate by just as well the Reserve Bank of Indeed, coal exports have showed perhaps traditional things and they buy The bureau’s Hockman suspects ing more services spending within the about 120 basis points. Australia (RBA) has some room to signs of recovering in March, helping more holidays and they spend more on retail sales growth would have been scope of the series, but the bureau is Even at an 8 percent pace, India will be ease. push the nation’s trade balance back Most importantly, with a cash rate into surplus, and analysts polled by Internet services and telecommunica- stronger if the survey and research also focusing on another gap — a the second-fastest economy in Asia, but it of 4.75 percent, the RBA actually has Reuters expect data on Thursday will tions services. All these sorts of things used to compile the data had included growing trend for consumers to bypass needs to grow quickly in order to raise something to cut. Rates in the United show the surplus growing to $2 billion are not directly covered by retail services such as telecoms and insur- the high street and look for offshore living standards and create jobs for a trade.” ance, which now make up a large bargains on the Internet. surging working-age population. States, UK, Japan and Switzerland are in April from $1.74 billion in March There is no sign at all of a possible already near zero and further stimulus as the recovery continues. The most recent retail sales data, for chunk of actual household spending. Australia’s Productivity plunge in growth to a “hard landing”, is proving problematic, not to mention Solid demand from Asia has led to June, showed a fall of 0.1 percent from “Services have been a growth area Commission estimates annual retail which is technically difficult to define but controversial. huge price increases for coal and iron May and just 2.6 percent growth in the of the economy and our traditional col- sales through foreign websites at conceptually would mean India couldn’t The events of 2008 and 2009 also ore, Australia’s two biggest exports, full year to June, the weakest annual lections (of data) were not quite A$4.2 billion, a fraction of total retail generate the number of new jobs needed show the RBA is not afraid to act helping lift the country’s terms of growth since 1961-62, according to designed for a modern economy,” sales last year of more than A$240 bil- for its young population or the revenue boldly if it thinks it warranted. trade to the highest in over a century. Commsec economist Craig James, Hockman said. “People have not lion but a number that has been rising gains the government requires to contain who was born in 1962. directly noticed, but it has drifted rapidly. its fiscal deficit.
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