The Daily Star :

US firms in China expect benefits in Beijing stimulus

Two thirds of American companies operating in China expect to benefit from a huge stimulus package unveiled by Beijing to counter the global crisis, a US business association said Monday.

The figure was one of the findings in a 2009 report on the state of US business released by the American Chamber of Commerce in China.

"Two thirds of US companies in China expect to directly or indirectly benefit from China's four-trillion-yuan (584-billion-dollar) stimulus package," the chamber said in a press release.

The white paper was based on a survey of more than 400 US companies in China, the chamber said.

The chamber called on Beijing to ensure its package would also be open to US business participation, while saying the corresponding US package should do the same for Chinese enterprises.

"It is important that both the Chinese and American stimulus packages are implemented efficiently and openly to maximise their economic impact," it said.

The Daiy Star :

Swine flu chills world economy

Travel, tourism sectors take a hit; pharmaceutical shares rise

The global outbreak of swine flu sent shivers through financial markets on Monday just as some signs had appeared that the global economic crisis might be easing.

Travel and tourism took the brunt of uncertainty about how the threat of a pandemic might crimp economic activity, but the pharmaceutical sector rose as attention turned to defensive medical treatments and equipment.

The latest swine fever scare scythed through stock markets, cutting back gains made last week on some signs that the global economic crisis may be bottoming out.

But some pharmaceutical groups were in fine form on prospects for sales of their flu treatments and related supplies.

In Europe, Societe Generale analyst Patrick Bennett said: "The outbreak of swine flu in Mexico is a concerning development for the global economy."

At financial betting firm ETX Capital in London, trader Manoj Ladwa said: "Swine flu is ripping through the markets creating uncertainty in its wake."

Investors turned anxious where at the end of last week they had shown some optimism that the financial fever which has ravaged economies for the last 20 months may be abating.

The one flu-resistant sector was the pharmaceutical industry. Swiss giant Novartis said the World Health Organisation had contacted it about developing a vaccine.

And shares in Swiss drug giant Roche showed a gain of 3.51 percent on prospects of a surge in demand for its treatment Tamiflu.

An analyst at Vontobel in Switzerland, Andrew Weiss, said that shares in Roche had surged "when fear about bird flu really took hold in the fourth quarter of 2005" and the group's sales of Tamiflu had totalled 4.0 billion Swiss francs (2.65 billion euros, 3.49 billion dollars) in 2006 and 2007.

GlaxoSmithKline, AstraZeneca and Shire all showed gains, and stock in Chugai Pharmaceutical, which sells the Tamiflu drug, climbed 14 percent.

A perception that the first sector to be hit would be the travel industry was given substance by EU Health Commissioner Androulla Vassiliou who urged people to avoid non-essential travel to flu-affected areas.

This provoked a sharp retort in the United States, where a state of public health emergency has been declared.

The bird flu epidemic that began in 2003 reduced the number of international travellers by 1.4 percent that year, data from the World Tourism Organisation shows.

In May of that year, traffic for airlines in the Asia-Pacific region where the crisis began, slumped by nearly 50 percent, the International Air Transport Association reported, costing those airlines six billion dollars in lost sales in 2003.

This swine fever scare, originating in Mexico, was likely to hit US and Latin American airlines hardest, followed by European airlines and notably the Spanish company Iberia, which operates most routes between Europe and South America, a French analyst who declined to be name, suggested.

The travel industry was already one of the sectors suffering greatly from the global economic crisis as businesses and consumers curtail expenditure.

The World Tourism Organisation had forecast zero growth to a contraction of 2.0 percent for international tourism this year after growth of 2.0 percent in 2008.

Microsoft suffers first sales dip

BBC News

Microsoft has said sales in the first three months of 2009 fell 6% from the previous year - its first quarterly drop in 23 years as a public company.

The world's largest software maker said profit dropped by 32% to $2.98bn (£2bn). Sales slipped to $13.65bn.

Microsoft makes most of its profit selling the Windows operating system and business software such as Office.

However demand has been hit by falling sales of personal computers as consumers and businesses trim spending.

"We expect the weakness to continue through at least the next quarter," said the firm's chief financial officer, Chris Liddell.

'On track'

Microsoft - which became a public company in 1986 - has been looking at ways of cutting costs.In January, it said it would cut up to 5,000 jobs over the next 18 months, including 1,400 immediately.

Microsoft's fall in profit was more severe than analysts had been expecting.

"There's stuff to be happy with - they're controlling costs and getting that under control," said Kim Caughey, a senior analyst with Fort Pitt Capital.

"The bad thing is demand and consumer preference seems to have affected their top line."

Shares in Microsoft rose by 4% in after-hours trading - possibly reassured by comments from the firm that it was on track to release the next version of its operating system, Windows 7, during its 2010 financial year.

Novartis profits slide 14pc

The New Age

Swiss pharmaceutical giant Novartis on Thursday posted a 14-per cent slump in first quarter net profit, hurt by unfavourable currency movements and a major acquisition.
The group’s net profit fell to $1.975 billion as the $40-billion takeover of the world’s biggest eye care company, Alcon, sapped its liquidity and increased its financing costs.
Sales also slipped two per cent to $9.7 billion, although it was up 8.0 per cent in local currencies, underlining the impact of foreign exchange rates.
Daniel Vasella, the group’s chairman and chief executive saw however an ‘opportunity’ in the turmoil.
‘The uncertain economy and currency market volatility create an opportunity to continue to enhance productivity and manage costs,’ he said.
The group said it expected sales to grow at about 5.0 per cent, although it warned that unfavourable exchange rates could cut any underlying improvements for the year.
Analysts, who had expected profits of about $1.85 billion, hailed the forecast-beating income, with Bank Helvea recommending investors to buy the stock.

Britain expects return to growth in 2009

The New Age

Britain on Wednesday forecast a return to growth in late 2009 after its worst recession since World War II, as prime minister Gordon Brown seeks to boost his popularity before key elections.
Delivering the Labour government’s annual budget to parliament, finance minister Alistair Darling predicted the British economy would start growing again ‘towards the end of the year’, winning the praise of Britain’s biggest union.
Chancellor of the Exchequer Darling warned however that British gross domestic product would contract 3.5 per cent in 2009, far worse than a previous government estimate.
The economy will then grow 1.25 per cent in 2010, forecast Darling, whose Labour Party led by Brown is trailing the main opposition Conservatives in the polls ahead of a general election that must be held by the middle of next year.
Analysts had expected Darling to say that growth would not resume until 2010 amid the worst global downturn since the 1930s.
Darling on Wednesday also warned that public borrowing would balloon to a record 175 billion pounds ($256b) in 2009-10 from 90 billion pounds in 2008-09.
The government’s forecasts for 2009 growth contraction and public borrowing in the current fiscal year are in line with analysts’ expectations.
The budget included plans aimed at helping young people back into work and providing a boost to Britain’s struggling housing and auto sectors.
In line with Germany, France and other European countries, Britain will launch a car-scrapping scheme from next month worth 2,000 pounds per car.
The leader of Britain’s biggest union Unite, Derek Simpson, said Darling deserved credit.
‘Alistair Darling had to deliver the toughest budget in decades but he has positioned Labour as the party for jobs and social justice while exposing the Tories for being the party of cuts and inequality,’ Simpson said.
But ahead of the budget, official economic data showed worsening unemployment and soaring public borrowing as Britain struggles with the global financial crisis.
Labour, in power since 1997, is lagging behind the Conservatives by up to 19 points, according to recent opinion polls.
Conservative leader David Cameron attacked the soaring levels of borrowing unveiled by Darling, saying the chancellor had written himself into the history books and ‘written a whole chapter in red ink’.
Official data Wednesday showed Britain’s public borrowing had soared to a record 90 billion pounds in 2008-09 as the government bailed out banks and tried to tame the recession.
Elsewhere, it was announced that Britain’s unemployment rate jumped to 6.7 per cent in the three months to February from 6.1 per cent in the previous three months as people claiming jobless benefits rose to 2.1 million — the highest level for 12 years.
Compounding Britain’s woes are slumping tax revenues, due to rising unemployment and also the government’s decision late last year to slash sales tax on goods and services to boost consumer spending.
The VAT reduction is due to expire at the end of 2009.
The public purse has meanwhile been stretched by a series of costly bailouts in which the government has rescued some of the country’s biggest banks from the international credit crunch.
The International Monetary Fund on Tuesday said the financial crisis would cost Britain’s banks the equivalent of 9.2 per cent of gross domestic product — or around 132 billion pounds — by the end of the year.
In his pre-budget report last November, Darling launched a 20-billion-pound economic stimulus package of tax cuts, including reducing the VAT rate.

Glaxo buys US skincare firm

The New Age

British pharmaceutical giant GlaxoSmithKline said Monday that it had agreed to buy US-based skincare group Stiefel Laboratories in a deal worth up to $3.6 billion.
The deal for Stiefel, a maker of anti-itching creams, acne treatments and other skincare products, had been widely expected after US media reports over the weekend.
‘GSK and Stiefel Laboratories today announced that they have signed an agreement to create a new world-leading specialist dermatology business,’ the pair said in a joint statement.
‘Under the terms of the agreement GSK will acquire the total share capital of Stiefel for a cash consideration of 2.9 billion dollars.
‘GSK also expects to assume 0.4 billion dollars of net debt upon closing. A potential further 0.3 billion dollars cash payment is contingent on future performance.’
Stiefel is part-owned by US buyout firm Blackstone Group and was put up for sale earlier this year.
‘This transaction will create a new world-leading, specialist dermatology business and re-energise our existing dermatology products,’ said GSK chief executive Andrew Witty in the statement.
‘The addition of Stiefel’s broad portfolio will provide immediate new revenue flows to GSK
with significant opportunities to enhance growth through leveraging
our existing global commercial infrastructure
and manufacturing capability.’
Witty said the acquisition was part of GSK’s strategy to grow and diversify its business.
In midday London trade, GlaxoSmithKline shares were up 0.77 per cent while the overall market was down 1.3 per cent.
Analysts were generally positive on the deal with Jonathan Jackson, head of equities at Killik & Co, saying it ‘represents a further step in the group’s previously-announced strategy to grow and diversify its business.
‘It provides immediate new revenue and synergy opportunities,’ Jackson said, adding that his house was a buyer of the stock which has fallen 19 per cent so far this year.
Stiefel Laboratories has been controlled by the founding Stiefel family for more than 160 years. Blackstone spent 500 million dollars on a large minority stake in the company in 2007.

China looks to its own consumers

BBC News

China is rebalancing its economy to focus more on domestic consumption than exports in order to achieve its growth target, Premier Wen Jiabao has said. Addressing an Asian regional forum in southern China, he announced a $10bn (£6.7bn) fund for infrastructure projects in south-east Asia. The Boao Forum for Asia has been dubbed the Oriental Davos.

Politicians, business leaders and academics are discussing Asia's response to the global downturn. China's economic performance and its influence abroad have become the focus of attention at the annual conference in Hainan Province, says the BBC's China Editor, Shirong Chen. Mr Wen has tried to inspire confidence in neighbours hit badly by the global economic crisis, our correspondent reports.

More foreign dignitaries have attended this year than before, including Pakistani President Asif Ali Zardari, New Zealand Prime Minister John Key and Vietnamese Premier Nguyen Tan Dung, as well as ex-US President George W Bush. Nearly two dozen Chinese government ministers are also in Boao to debate with other delegates on how to manage beyond the crisis and what role the emerging markets can play in reforming the international financial system.

'Paying off' Mr Wen told more than 1,600 delegates at the convention centre that China's stimulus package was "already paying off" and that the situation was "better than expected". "Investment growth has accelerated, consumption has increased quite rapidly and domestic demand continues to rise," he said in his keynote speech, which was broadcast live on China's state TV.

But the Chinese premier warned that there were still challenges ahead: "The main ones are: external demand continues to shrink, there has been a large drop in exports... there is overcapacity in some industries, the pick-up in industries is sluggish, economic efficiency continues to drop."

The concept of a Forum for Asia was born out of the Asian Financial Crisis in the late 1990s. It has served as a platform for China to push for closer integration with its Asian neighbours on the one hand and continued globalisation on the other, our China editor says. It is also, Shirong Chen adds, an indication that China is firming up its image as a regional leader in the face of the crisis.

Gold remains most secure investment: World Gold Council

The Hindu :Gold remains most secure investment: World Gold Council

With the current economic slowdown and dwindling returns on investment from other options, gold continues to remain the most secure investment according to the World Gold Council (WGC). As per data released by the WGC, gold has provided an annual average return of 26 per cent over the past decade (between 1999 and 2008). With the average gold price having grown every year, gold has always provided positive returns every year over the decade.

In the first quarter of 2009, gold has provided a positive return of 17 per cent when compared to the average annual price of Rs. 12,147 per 10 grams for 2008. The average price for the first quarter of 2009 was Rs. 14,180. The first quarter also saw the gold price peaking at an all time high of Rs. 15,780 on February 24. The average price of gold in 1999 was Rs. 3,850 and since then, it has provided an absolute return of 216 per cent with every year of the decade providing an annual return on investment (RoI) above 24 per cent (except 2006 when RoI was 19 per cent).

Commenting on gold’s sustained upward trend, WGC, Indian subcontinent, Managing Director Ajay Mitra said, “gold jewellery has been treasured, sought after and popular since the beginning of Indian history and till date, bears an extraordinary significance especially during festivals. The presence of a safe asset like gold in an investment portfolio ensures assured returns, which further adds to its appeal.”
“There is a strong buzz in the trade community that if the trend continues, Indian consumers could possibly witness a further appreciation of around 24 per cent assuming that the rupee dollar remains the same. It would be fair to say that this is the most favourable time to buy gold,” according to the WGC.

Gold Survey 2009, a study launched recently by GFMS (formerly Gold Field Mineral Services), a leading precious metals consultancy, predicts that in the coming months, gold could easily re-attain the $1000 an ounce mark, with an added expectation of crossing the $1100 barrier. International gold is currently hovering around $880-890.

VW to oust Toyota as market leader

The New Age

Volkswagen may have become the world’s top-selling automaker in the first quarter as government incentives have fuelled demand in its major markets, overtaking industry giant Toyota. The German automaker, with its nine car and truck brands including Audi, Skoda, Seat and Scania, has set a goal of overtaking Toyota and General Motors Corp to be the world’s No.1 seller by 2018 — a target that was initially met with scepticism.
But a deepening recession and credit crisis have crippled demand in Toyota’s top markets, with U.S. sales falling 38 percent and Japan sliding 24 percent in January-March. Volkswagen, meanwhile, is benefiting from government stimulus plans for the car industry that have boosted sales in Germany, China and Brazil, which together accounted for 44 percent of group sales last year, making it more likely that it beat Toyota or at least came close.
Alone in Germany, new registrations of Volkswagen group brands rose 19 percent to about 282,000. Toyota sales grew 43 percent but its market share is just 4.4 percent whereas about every third new car sold in Germany came from the Wolfsburg-based manufacturer.
Toyota, which significantly outsold every other manufacturer in 2008, is not entirely without blame for its volume declines, however. The Japanese carmaker has seen sales fall every month of this year in China, its third-biggest market.
In the first quarter of last year, the German group delivered 1.57 million vehicles, a third less than Toyota’s 2.41 million, which included sales at minivehicle and truck units Daihatsu Motor Co and Hino Motors Ltd.
Toyota has given no forecast for retail sales, but its latest estimate for shipments for the 2009 first quarter is 1.23 million vehicles, down 47 percent from a year earlier.

Tax refund: How to spend $2,705

CNN MONEY NEWS

Tax refund: How to spend $2,705
Here are some tips from the pros on the best way to spend your refund cash from Uncle Sam.

Expecting a hefty tax refund this year? You may have visions of plasma televisions and Hawaiian vacations. But with the economy locked in recession and the unemployment rate at a 25-year high, there might be more practical ways to spend the extra cash.

More than 70% of tax filers typically receive a refund. So far this year, the average refund is $2705, 11% higher than last year, according to data from the Internal Revenue Service.

In past years, tax refund splurges were common. But this year is different. We asked a handful of personal finance experts to weigh in on how your priorities ought to stack up in today's economy.

Pay off credit card debt. Across the board, financial planners said that using refund cash to pay down high-interest credit card debt was a win-win. "You pay off your debt first, no ifs, ands or buts about it," said Drew Tignanelli, president and CPA at the Financial Consulate.

"Psychologically, it seems like a good idea to have money in the bank," said Tignanelli. But if you're carrying high-interest debt, having money in the bank "is more of a psychological crutch than an economic benefit," he said, because keeping money in the bank when you are paying higher interest on debt just doesn't make financial sense.

If you have been procrastinating paying down credit card debt, then Tignanelli suggests using the refund from Uncle Sam as a "stake in the ground," representing a commitment to turn the tides on your credit card balance.

Build up emergency savings. Given the precarious labor market right now, building up a reserve fund of cash ought to be a top priority.

"If you have lost or think you are going to lose your job, then just put that money in the bank," said Beth Gamel, CPA/PFS at Pillar Financial Advisors. "If you are not in that situation - you have a job, and it looks pretty secure - you still should look at your cash reserve," she added.

Gamel said that risks associated with living paycheck to paycheck are higher now than before the recession, because banks are more reluctant to extend lines of credit to people with less-than-perfect credit histories.

So which should you do first - pay off debt or save for emergencies? Greg Plechner, CFP with Modera Wealth Management, said that while he recommends people have 6 to 9 months of expenses available in cash, the decision to pay down debt or accrue a reserve fund is a matter of interest rates.

"Any interest rate over 10%, in my mind that almost takes precedence over the emergency fund," said Plechner.

Invest for the long term. While stocks have started to climb back from multi-year lows, the major indexes still have a lot of growing room, and now is the time to take advantage.

Gordon Bernhardt, CFP and CEO at Bernhardt Wealth Management, recommends that if an individual has no credit card debt, this is a very good time to get into the market, by opening up a brokerage account or a tax-advantaged retirement account like an IRA.

If you've got at least 5-10 years before you'll need the cash, then investing for the future - particularly for your retirement - is a smart move today.

"I am extremely positive that 5 years from now, the market is going to be a lot higher," said Bernhardt.

To protect yourself from volatility, Bernhardt recommends you "take that money and buy an index fund - that is going to be the easiest way [to] get diversification at a low cost."

Refinance. For those without debt and job insecurity, lowering monthly housing payments might be the way to go. Lending rates are at record lows, and by locking in a lower rate, you save money every month, said Plechner.

"You need between $2000 and $3000 to refinance - those are the typical closing costs," said Plechner, although total costs can vary greatly depending on your home's value. Using your tax refund to pay for all or part of the refinance "would be a great use of the money and that would increase your monthly cash flow."

But refinancing doesn't make sense for everyone. For example, you should be able to knock at least a percentage point from your current rate to justify the cost. Plus, you need to have home equity and your credit needs to be good enough to qualify for the lowest rates, Plechner said. To figure out whether refinancing is right for you, try an online calculator like the one on Bankrate.com.

Treat yourself. If you're on top of your debt, feel secure in your job, and have a cushion of cash built up for emergencies, then even professional financial advisers are ok with you splurging on that new TV or vacation.

"We need to balance our long-term planning with our short-term planning, so I have no problem with my clients doing something fun, or an extravagance, and I encourage them to do that occasionally," said Tignanelli.

Gamel echoed the sentiment. While it may be a year when few consumers feel comfortable splurging, "if you don't have any problems, your job is secure, you have your debt in order, and don't foresee any demands from that cash cushion, then buy what you feel like," she said.

Citi to explore retail banking

The New Age

The US banking giant Citibank has planned to explore local retail banking to expand its area of services from present business and corporate banking.
Till date the bank is serving businesses, investors and industries, but retail banking would be a major service in near future.
The managing director and the country officer of Citi in Bangladesh, Mamun Rashid, said the retail banking option was under the review of higher authorities, who visited Dhaka recently.
He said Citi would also strengthen the existing services including capital market solutions and exploring other avenues of banking needs in the local market that were still untapped.
Mamun Rashid, who piloted the Citi in Bangladesh from a low-profile bank to one of the leading foreign banks, said ten years ago it was more likely for a cab driver to take you to a local bank with a different spelling, if you wanted to go to the Citibank’s local office in Dhaka.
‘Over the years the scenario has changed—now Citi is no more a strange name for most of us, and there is no confusion over the difference between the local bank and the global financial institution, though their names sound alike,’ he said.
Responding to a question on how such a transformation has occurred, Mamun, who joined the bank in 2001, said the very respectable brand value of the Citi was undermined in Bangladesh. ‘I utilised the value of this ‘global brand’ and successfully established it with my ‘world class’ colleagues.’
Citibank started its operations in Bangladesh in 1987, with the opening of a representative office and opened its first full-service branch in Dhaka in 1995. It now has four branches, one service outlet and three offshore banking units.
‘Citi provides a comprehensive range of financial services including treasury management, transaction services, foreign exchange and structured finance to corporate clients, governments and financial institutions’, Mamun said.
Partnering with few local banks, the bank also provides remittance services to the expatriate community all across the world and largely in the Middle East.
Giving a brief on the Citi’s business and structure in Bangladesh, Mamun said the bank made Tk 2.06 billion profit before tax last year with around 200 staff, of which 20 per cent are female.
‘Most importantly, all of our employees are local. The Citi in fact is the lone global bank in Bangladesh that runs its operation with hundred per cent local staff’.
The bank also value the diversity issue, he said and pointed out that some very important divisions of the bank were headed by female professionals.
Besides banking, Mamun has initiated options to engage the bank in the area of corporate social responsibilities. The bank now offers cooperation in financial education, information communication technology and most importantly micro-credit.
‘This role of the bank has made it well-known in the country,’ Mamun, said and gave a unique reference of sponsoring a Satkhira women to send her New York for her outstanding success in self-employment under micro-credit programme. ‘She was the first Bangladeshi women of her profile (who never travelled to Khulna, not to talk about Dhaka or outside) flew to the US to participated in a micro-credit conference’.
Also he referred to the bank’s involvement in financing country’s corporate houses including Grameen Phone, Brack, Lafarge Surma Cement, Khulna Power Company, Aktel, Sing Tel, AK Khan and Company and CityCell.
‘The bank will continue this kind of products and services to help grow business and industries in Bangladesh’, he said.

Twitter all clear after worm wave

BBC News

Twitter has been given the all clear after a worm infected "tens of thousands of users". But experts say the attack could have been much worse.

Over the weekend, a self-replicating computer program, or worm, began to infect profiles on the social network.

The worm was set up to promote a Twitter rival site, showing unwanted messages on infected user accounts.

Michael Mooney, a 17-year-old US student, told the Associated Press he created the worm to promote his site.

Mooney, who lives in Brooklyn, New York, said he wanted to expose vulnerabilities in Twitter. He told AP: "I really didn't think it was going to get that much attention, but then I started to see all these stories about it and thought, 'Oh, my God'."

The worm worked by encouraging users to click on a link to the rival Twitter site, called StalkDaily.com.

Once the link was clicked, infected users themselves automatically began to send out messages to friends, promoting the site.

No personal or sensitive information, such as passwords, was compromised in the attacks, according to Twitter, which has more than seven million users.

Mikko H Hypponen, chief research officer at security specialists F-Secure, told BBC News the attack could have been much worse.

"All the problems stayed on Twitter. Even if you were infected, nothing happened to your computer.

"It would have been simple to integrate a web browser exploit into this so that you could have done anything you wanted to the infected computer, including recording all keyboard strokes and capturing credit card details."

Mr Hypponen said he was surprised that the vulnerability had been present in Twitter.

"It was a very basic vulnerability. Similar holes were found in other web social services, such as MySpace and Facebook, quite a while ago.

"I guess Twitter has learned its lesson."

'On alert'

In a blog posting on Monday, Twitter co-founder Biz Stone said: "We are still reviewing all the details, cleaning up, and we remain on alert."

In all, there were four waves of attacks on Twitter.

The website said it had deleted almost 10,000 tweets, or messages, that could have continued to spread the worm.

Mr Hypponen said F-Secure had monitored at least one variant of the worm attack, using a link in a message that pledged to clear up the problem. It had been clicked on at least 18,000 times.

"We would estimate that tens of thousands of users were infected."

He added: "The root cause for these problems is that social networks are interactions with other people and we inherently trust the messages from people we know in real life or virtually.

"So when you get a message from someone on Twitter you trust it because in real life fake messages like this rarely happen."

Twitter has promised to conduct a "full review of the weekend activities".