Archive for October, 2011

Lending rate rise not likely, say bankers

The base rate may not be increased. Our compulsion to hike lending rates will happen if our deposit rates go up. As of on Tuesday, all the banks are seeing good inflow of retail deposits. The liquidity is plentiful and the banks continue to enjoy an advantage over the government savings schemes, said Pratip Chaudhuri, chairman, State Bank of India. The credit demand is also not that strong, and the preliminary results of the banks show the margins are quite high, Chaudhuri added.

The liquidity situation for the banks has been comfortable, and the credit offtake has been slow. The chairman of the largest public sector lender also said there was no need for banks to compete for deposits by increasing rates. There is excess liquidity with the banks at the moment, and we are thinking whether the liquidity could be cut, Chaudhuri told the media.

RBI has increased the repo rate by 350 basis points since March 2010 to combat inflationary pressures and has maintained an unflinching anti-inflationary stance. The central bank now expects the effect of its past actions to play out and inflation to come down to seven per cent by March.

Repo rates have moved up. There is an indication that further rate rises may not happen and there is a distinct possibility of inflation coming down to seven per cent. So, the pressure on interest rates might as well come down, said M V Nair, chairman and managing director, Union Bank of India. It would be a very careful decision that banks would have to make, considering the margins of the corporates have been under pressure, Nair added.

The incremental credit-deposit ratio, which reflects the amount banks are lending for every rupee deposit, has fallen to 55 per cent in the first six months of the current financial year from 76 per cent recorded during the same period of the previous year.

Despite the majority of the bankers hinting at the absorption of impact of the rise 25 basis points by them, YES Bank on Tuesday raised its base rate and benchmark prime lending rate by 25 basis points to 10.5 per cent and 19.75 per cent, respectively.

Treasury may ‘bribe’ banks to lend to small businesses

Treasury may bribe banks to lend to small businesses

Banks that increase lending to small businesses could be given financial
rewards by the Treasury, according to a proposal outlined by the governor of
the Bank of England.

ADCB earnings surge on wider lending margins

Abu Dhabi Commercial Bank almost doubled its profit as its margins on lending widened.

ADCB, the capitals second-biggest lender, reported a 91.2 per cent increase in third-quarter net profitto Dh607.5 million (US$165.3m).

Profit margins on lending were unbelievably strong, said Raj Madha, a financial analyst at Rasmala Investment Bank. It was a great quarter for ADCB, but I have a question mark on the sustainability of these levels of revenue.

The banks net interest income soared 48.6 per cent to Dh1.2 billion, driven by a sharp decline in interest expense.

ADCB is among the UAE banks that determine their interest rates for consumer borrowing and deposits using a formula that does not reflect declining interbank lending costs.

Interbank lending rates fell in the first half of the year and remained at historic lows throughout the third quarter.

This quarter has seen another positive period for ADCB, with sustainability in our financial performance and delivering both top and bottom line growth, said Deepak Khullar, the banks chief financial officer. The third quarter was the fifth consecutive quarter of earnings growth for ADCB. The third-quarter figure beat analysts estimates of Dh332m.

But Tirad Mahmoud,the chief executive of Abu Dhabi Islamic Bank (ADIB), sounded a note of caution yesterday on the deteriorating local and regional economy as the bank reported a third-quarter profitof Dh319.1m, 1.5 per cent higher than in the same period last year.

Many of the UAEs lenders, including Emirates NBD, have made substantial provisions during the past three months against fallout from the European debt crisis as the outlook for the world economy darkens.

Purchasing And Confidence For Consumers Remains Weak In Areas As Debt Remains …

As we near the end of October we are seeing some indications that consumer confidence remains weak in some areas and there are also some pessimistic views on purchasing that may arise during the holiday season, as consumers may either be in a position where they can’t spend as much money as they have in the past or are simply being cautious as some feel there is a great of uncertainty still in the economy as a whole, not to mention specific areas of their financial life. Furthermore, there are some issues which have arisen over the past months that may also impact consumer confidence and holiday purchases, which comes in the form of consumer debts that have continued to remain a problem.

We have seen over the past weeks that certain types of delinquencies have increased, specifically in the area of loans, but there are also some incoming reports that credit card missed payments are also returning once again, despite the fact that consumers had previously been thought to be in a position where they were working to pay down their debts, but some reports indicated that during the second quarter of 2011 spending began to increase once more.

However, what some officials worry the case happens to be is the fact that some consumers may be in such a difficult financial position that they are using their credit cards to make even the most basic of purchases, which is obviously going to be a dangerous practice if a consumer finds themselves in a position where they cannot pay even minimum payments on their credit card debt. While these loans and credit cards are not seeing negative results in every area, as certain types of personal loans have not seen increases in delinquencies and there are some lenders who are reporting more positive numbers in terms of credit card use, consumers are still being advised to take caution when spending, but of course officials don’t want spending to stop entirely as a wait-and-see attitude may delay economic improvement in the case where consumers might be in a position to buy more, handled debt, and contribute to the overall economy.

Obviously though, officials do not want consumers to spend when they do not have the money to repay nor are officials looking to consumers to rely on credit in cases where they may have to carry a balance for a substantial amount of time and pay interest rate costs in the long run, there are those mixed opinions as to how confident consumers are at the present time, as some areas are seeing lower numbers currently, but we still have some retailers who hope that consumer confidence and spending will lead to a more favorable holiday shopping season in the coming weeks and, may point to the ability of consumers to handle purchases in a variety of ways.

Tyfone debuts iCashe mobile wallet

Tyfone has announced the launch of iCashe, a new mobile wallet and eCommerce engine that blends mobile banking features with consumer purchasing, gifting and loyalty programs.

With iCashe, gift cards can be purchased and stored on a persons mobile phone for personal use, or sent to anyone in the US via email or SMS. iCashe requires a person to be logged into a trusted mobile banking app, making purchasing highly efficient, secure and as easy as checking an account balance, says Tyfone.

China Manufacturing Gauge Rises as Japanese Exports Advance

Oct. 24 (Bloomberg) — Chinas manufacturing may expand in October for the first time in four months, snapping the longest contraction since 2009, after a preliminary index of purchasing managers showed a rebound in new orders and output.

The reading of 51.1 for the index released by HSBC Holdings Plc and Markit Economics today was the highest in five months and compares with the final reading of 49.9 for September and August. A reading above 50 indicates expansion.

The Chinese report, along with Japanese data today showing an increase in exports exceeding economists forecasts, signaled that Asias largest two economies are withstanding Europes sovereign debt crisis. Shares and currencies in the region advanced as the figures, and a plan by European leaders to contain the regions financial woes, buoyed investor confidence.

As long as Europe and the US see very weak growth but not an outright recession, Asia in general and larger, more domestic-demand driven economies such as China, India and Indonesia in particular, should hold up, said Louis Kuijs, Hong Kong-based chief Asia economist at MF Global Holdings Ltd., who previously worked in Beijing at the World Bank. The PMI data today underlines just how well Chinas industrial sector is holding up against the global slowdown.

The MSCI Asia Pacific Index climbed 2.4 percent as of 11:46 am in Hong Kong. Stocks in China pared losses after the data. The benchmark Shanghai Composite Index was 0.4 percent higher at 2,325.30 at the 11:30 am local-time break. The gauge declined earlier after Wen Jiabao signaled over the weekend that policy makers will maintain an anti-inflation monetary stance.

Job Creation

The yuan rose 0.16 percent to 6.3741 as of 11:20 am in Shanghai, according to the China Foreign Exchange Trading System. The won gained 0.8 percent to 1,139 per dollar as of 11:38 am in Seoul.

China must continue efforts to control food and housing prices, Wen was quoted as saying by the official Xinhua news agency during a visit to southern city of Nanning. He also said that job creation should be a priority and that more support should be given to smaller businesses and private companies, according to the Xinhua report.

Inflation has exceeded the governments 2011 target of about 4 percent every month and accelerated to a three-year high of 6.5 percent in July from a year earlier. The pace moderated to 6.1 percent in September after the central bank raised interest rates, curbed lending and boosted subsidies to farmers.

Inflation Rebound

The government wont shift from its prudent monetary policy stance as inflation could still rebound, liquidity in the financial system is adequate and the slowdown in growth is only moderate, Zhu Baoliang, chief economist at the economic forecasting department of the State Information Center, was quoted as saying in the Financial News newspaper today. The center is affiliated with the top economic planning agency.

HSBCs preliminary manufacturing index, known as the Flash PMI, is based on 85 percent to 90 percent of the total responses to its monthly purchasing managers survey sent to executives in more than 400 companies.

The number has matched the final reading twice since HSBC began publishing the series in February. The index fell below 50, the level that separates expansion from contraction, in July. Manufacturing contracted for eight months through March 2009 during the global recession sparked by the US mortgage-market collapse.

No Hard Landing

Output advanced at a faster rate and new orders and export demand expanded after contracting the previous month, todays release indicated. The input prices sub-index rose at a slower rate, while the output price gauge accelerated.

The data confirm our view that there is no risk of a hard landing in China, Qu Hongbin, a Hong Kong-based economist with HSBC, said in a statement on the PMI report. The indexs expansion marks a steady start to manufacturing activities in the fourth quarter.

The official manufacturing index released by the statistics bureau and the China Federation of Logistics and Purchasing had a reading of 51.2 in September. The gauge hasnt fallen below 50 since February 2009.

If the official PMI follows suit of the HSBC PMI, we are probably further away from any hope of a meaningful stimulus, said Dong Tao, a Hong Kong-based economist with Credit Suisse AG. Im not convinced that the down cycle is over judging from steel, shipping, auto orders and home sales.

Inflation Cycle Turned

Xugong Group Construction Machinery Inc., Chinas biggest maker of construction equipment, has seen demand cool since April amid monetary tightening by the central bank and is concerned about Europes economic outlook, Chairman Wang Min said last week. Even so, government policies to boost spending on water projects and spur construction of public housing offer big room for manufacturing to pick up, he said.

The turn in the inflation cycle has been confirmed, Peng Sen, a vice director at the National Development and Reform Commission, was quoted as saying in the Securities Times newspaper today. He estimates price gains will drop to below 5 percent in the next two months.

–Zheng Lifei, Victoria Ruan. Editors: Nerys Avery, Chris Anstey

To contact Bloomberg News staff on this story: Victoria Ruan in Beijing at vruan1@bloomberg.net

To contact the editor responsible for this story: Chris Anstey in Tokyo at canstey@bloomberg.net

Close encounters in the Galapagos

Editors note: CNNs Destination Adventure series takes a look at travel locations for the explorer at heart. This week, were focusing on the Galapagos Islands. Well feature favorite regional foods, secrets from the locals and the best photos and stories from readers. Have you been to the Galapagos? Share your story with CNN iReport.

(CNN) — For close encounters of the furry, feathered, or scaly kind, theres no place on the planet quite like the Galapagos Islands.

You just see some of the craziest things, said Jonathan Brunger, operations manager for Adventure Life, a Montana company that arranges trips to the region.

While youre out snorkeling, the sea lions will come out and swim with you. … You feel a little nibble on the end of your flipper, you turn around and theres this sea lion wanting to play with you, wanting you to chase it.

Other times, theyll come up to your face and theyre looking at their own reflection in your snorkel mask.

The Galapagos — 19 islands that lie 600 miles west of Ecuador in the Pacific Ocean — are home to species of animals found nowhere else on Earth. Famously visited by Charles Darwin in 1835, the archipelago played a key role in his theory of evolution.

These days, both tourists and researchers flock to the islands to see giant tortoises that can live 150 years, marine iguanas that dive to find dinner, flightless cormorants, and penguins that somehow thrive near the equator.

With few predators to make them wary of humans, many of the creatures seem tame and curious.

Its just a fantastically wonderful place, said Herb Wilson, a biology professor at Colby College in Waterville, Maine, who has been to the Galapagos twice.

One of the most exciting things about it is that just the animals there are so fearless. So you have to step over sea lions and marine iguanas just to get from one place to another.

With their remote location, the Galapagos used to be more of a legend than a destination for most people — but thats no longer the case.

In the 1960s, just 2,000 tourists a year visited the islands, according to The Charles Darwin Foundation. Today, that number has grown to more than 150,000.

To limit their impact on the fragile ecosystem, Galapagos National Park — which makes up 97% of the archipelago — requires tourists to be accompanied by a certified guide when they enter protected areas. There are also limits on how many people can be at any visitor site at one time.

They seem to be doing a reasonable job of trying to find the happy medium between access and protection, Wilson said.

Here are some tips to consider if you want to pursue your own Galapagos adventure.

Whats the best time to go?

You can have a great experience in the Galapagos year-round, Brunger said, so theres really isnt a best time to go.

The busiest tourist seasons are during the summer and around Christmas, when kids are out of school and people have extra vacation, he said. The warmest months are between January and May, when average temperatures reach the upper 70s and the low 80s. The driest months are from June to December.

How do you get there?

The first step is to fly into mainland Ecuador and land either in Quito or Guayaquil. A nonstop flight from Miami to Quito takes about four hours.

From there, travelers can fly to one of two airports in the Galapagos Islands — Baltra or San Cristobal — via Lan Ecuador, AeroGal or TAME Airlines. That leg of the journey lasts about three hours from Quito.

Wilson said he didnt find the trip particularly difficult.

Where do you stay?

You can choose land-based lodgings or a cabin at sea.

There are four islands in the Galapagos with accommodations for tourists — options that include everything from small lodges to luxury hotels, Brunger said.

Wilsons hotels ranged from rustic to modern, but they were all comfortable and clean, he recalled. He dined at local restaurants, where seafood and chicken dishes were the most common fare.

For those who prefer staying on land, Brunger recommended the Finch Bay Eco Hotel in Puerto Ayora on Santa Cruz Island and the Iguana Crossing Hotel in Puerto Villamil on Isabela Island.

Many visitors, however, choose to take a cruise around the Galapagos, so they stay on board ships and take lots of land excursions. The cruises carry anywhere from 16 to 100 passengers, and most of the ships are relatively small, so this is not a good option if you get seasick easily or are not keen on living on a boat for several days, Brunger said.

Beginning next year, new regulations from Galapagos National Park will ban cruises from visiting any site more than once in a 15-day period. The goal is to cut tourist traffic at some of the most popular spots, according to the International Galapagos Tour Operators Association.

You can book a 15-day cruise or, if that is too long, sign up for a shorter itinerary. The most popular option is the 8 day/7 night cruise, which gives a good overview of the islands, Brunger said.

What are some of the most popular activities on the Galapagos?

Watching all of the incredible creatures, of course. (You might even catch a glimpse of the courtship dance of the blue-footed booby.) But theres also snorkeling, sea kayaking, hiking, horseback riding, mountain biking and more.

The Galapagos is a great, great destination for scuba diving, Brunger said. But it is for intermediate to expert (divers). Its not a place for beginning scuba diving because you have pretty strong underwater currents and the water is quite cold.

How much does a Galapagos trip cost?

As always, it all depends on your accommodations and length of stay, but heres an estimate of expenses:

Coach airfare from the United States to mainland Ecuador varies widely depending on your departure point. Once in Ecuador, a round-trip flight to the Galapagos costs about $400.

There is a $100 fee to enter Galapagos National Park.

An eight-day cruise around the islands will set you back anywhere from $2,000 to $5,000 per person, which includes accommodations, meals and excursions with a naturalist guide, Brunger said.

Be careful while purchasing goods from exhibitions

More power to the consumer is our motto, whether buying rajma or a watch. Pushpa Girimaji tells you how to get empowered.

As we come closer to the festival of lights, we see a number of orgnisations holding ‘exhibitions’ — a generic term for a temporary shopping location,

ANZ misled Primebroker, court hears

AS SHARE prices slumped and three of its key share-lending partners foundered in early 2008, ANZ Banks senior managers were desperate to keep the ailing Primebroker Securities operating because a declaration of insolvency would have triggered a huge payout by ANZ, a court heard yesterday.

Lawyers for Primebroker told the Victorian Supreme Court that the bank misled Primebrokers principals, Sal Catalano and Ian Pattison, during this time, constantly assuring them that if the firm reduced its $66 million margin call deficit then ANZ would support it.

But the court heard ANZ allegedly had a secret agenda to sever its relationship with Primebroker, wind down its securities lending business and do so without incurring losses.

Play Mass Effect 3 Early By Purchasing Battlefield 3

BioWare will be releasing a playable Mass Effect 3 demo in January of next year, but gamers who purchase Battlefield 3 will get access to the game earlier than that.

Joystiq reports that by purchasing a new copy of Battlefield 3, youll be able to redeem an online pass, which will eventually give you access to Mass Effect 3s online co-op multiplayer.

The online pass required to play ME3 early will be included in all three versions of Battlefield 3 when purchased brand-new.

While Battlefield and Mass Effect offer two distinctly different video-game experiences, I imagine theres enough crossover with their fans that makes this a smart way to simultaneously build up more interest around both franchises.

Also Read:
Is Star Wars: The Old Republic on the Wrong Side of History?

  • Print