Archive for January, 2010

Industrial stocks lift Shanghai index

Thursday, January 7th, 2010

INDUSTRIAL and consumer stocks lifted the Shanghai index today on speculation these companies will be most resistant to government plans to rein in economic growth and asset prices.

The Shanghai Composite Index, which tracks yuan-denominated A shares and hard-currency B shares, inched up 0.62 percent, or 32.17 points, to 5,233.35 at 3pm today.

Winners in the Shanghai market outnumbered losers 664 to 93 and 89 were unchanged.

The Shenzhen Composite Index, which covers the smaller mainland stock market, gained 1.65 percent, or 23.25 points, to 1,433.06.

Datang Power, China’s second-biggest electricity producer by market value, led the gain among industrial stocks today.

Datang Power surged 8.55 percent, or 1.48 yuan (20 US cents), to 18.79 yuan, extending a six-day, 12 percent gain. Huaneng Power International Inc, the listed unit of China’s largest power group, added 0.16 percent, or 1.1 yuan, to 15.01 yuan.

Consumer companies also rose today as investors switched stocks expected to be hurt by the government’s tightening measures.

Suning Appliance Co, China’s second-biggest home appliance retailer, gained 4.10 percent, or 2.85 yuan, to 72.30 yuan. Kweichow Moutai Co, the maker of Moutai, the fiery liquor used at official banquets, rose 2.55 percent, or 5.51 yuan, to 222.01 yuan.

Banks and real-estate firms remained gloomy today.

Industrial and Commercial Bank of China Ltd, the nation’s biggest listed lender, fell 1.61 percent, or 0.13 yuan, to 7.95 yuan. Gemdale Corp, a Chinese developer allied with ING Groep NV, dropped 1.79 percent, or 0.69 yuan, to 37.89 yuan.

The central bank has asked commercial lenders to set aside more reserves on 10 occasions this year, to curb loan growth. The bank raised companies’ borrowing costs to a nine-year high last week, the sixth such attempt this year to cool lending and inflation.

Airlines suffered a broad sell-off today on concerns rising crude oil prices will erode future earnings.

Air China, the world’s biggest airline by market value, recovered a little from morning losses and ended down 0.67 percent, or 0.18 yuan, to 26.52 yuan. China Southern shed 1.80 percent, or 0.49 yuan, to 26.69 yuan.

Crude oil rose as much as 0.7 percent to US$94.80 a barrel in after-hours trading in New York on speculation that a US Energy Department report will show inventories in the world’s largest energy user fell for a sixth week.

SOFA agreement controversy leaves DPJ under fire in Japan

Tuesday, January 5th, 2010

After three months in office, the Democratic Party of Japan (DPJ) is close to bringing to an end one of the most controversial episodes of its early days in power when Prime Minister Yukio Hatoyama looks to give details of a concrete proposal to President Barack Obama on a way to mend a rift over the future of U.S. troops based in Futenma, Okinawa Prefecture.

Since winning an election in August, the DPJ has said it would like to review the Status of Forces Agreement (SOFA) signed by the former governing Liberal Democratic Party (LDP) and administration of George W. Bush in 2006.

Under the agreement, the U.S. Marine Corps Air Station Futenma would be relocated from the center of the city of Ginowan to a less densely populated area of the prefecture, and 8,000 troops currently located there would be moved out of Japan to facilities in Guam. The U.S. has demanded a concrete proposal on the issue by Friday.

In pushing for changing the agreement, the DPJ has at times seemed to be a party of contradictions without a unified goal or purpose, which has led to intense media scrutiny, anger in Okinawa Prefecture, and criticism from both U.S. and Japanese politicians.

Looking to make changes to the current SOFA agreement, the DPJ has pushed for high-level negotiations with the United States, and in the process received criticism for its handling of the affair. In an editorial on Thursday, the conservative Sankei Shinbun newspaper said that by prioritising national politics, the Hatoyama government has “created a loss of confidence in its ability to handle international affairs.”

Meanwhile, the Asahi Shimbun condemned DPJ indecisiveness on the issue in a Friday editorial. “Hatoyama has a responsibility as prime minister to minimize friction over the Futenma problem. As a first step, he should make his stance clear as soon as possible,” the editorial said.

The Yomiuri Shinbun also demanded that the issue is resolved as soon as possible. “An early resolution to the issue with the current relocation plan is earnestly sought by the U.S. government, the Okinawa prefectural government as well as the Nago city government, which is where the base’s facilities would be relocated,” said the newspaper.

The government of the DPJ has handled the matter in a way that has led Washington to worry about Japan’s commitment to its alliance with the United States. On an October visit to Japan, U.S. Defense Secretary Robert Gates insisted that the current SOFA agreement signed between the two countries “may not be the perfect alternative for anyone, but it is the best alternative for everyone. And it is time to move on.”

Gates said that if Japan does not stick to the SOFA agreement, then there is a chance that the United States will not allocate funding to transfer U.S. marines to Guam in 2014.

On a visit to Japan in November, Obama agreed to set up high-level talks between the two countries, but the U.S. position has been consistent: stick to the current agreement.

Residents of Okinawa have in recent weeks held a number of protests demanding that their prefecture carries less of the U.S. military burden, or that American troops leave the area all together.

For local residents, the issue is emotive. In just the latest incident, a staff sergeant in the U.S. military is accused of being involved in a hit-and-run incident that led to the death of a 66-year-old man on Nov. 7. Okinawans are demanding that the U.S. hand the suspect over, but he remains on a U.S. base. On Sunday, some 1,500 people, including politicians, took to the streets to demand the soldier is handed over to Japan.

Over the years, crimes by U.S. servicemen and servicewomen have received a large amount of coverage in local media. In one of the most notorious incidents of U.S. military crime to come to light, three U.S. servicemen kidnapped, beat and raped a 12-year-old girl, sparking an outcry in Okinawa, and perhaps damaging the reputation of the U.S. forces in the region permanently.

The leader of the LDP Sadakazu Tanigaki has looked to capitalize on the confusion surrounding the SOFA agreement, calling into question the DPJ’s ability to lead the nation. “One mistake could leave a scar on bilateral ties between Japan and the United States,” he said in the Diet last month, adding “Japan’s security policies will be hampered.”

There has also been criticism from within the coalition government on the DPJ’s handling of the Futenma affair. While the DPJ has an absolute majority in Japan’s lower house, it depends on the support of the People’s New Party (PNP) and the Social Democratic Party (SDP) to maintain a majority in the upper house.

The SDP has been a vocal opponent of U.S. bases in Okinawa for many years, and party leader Mizuho Fukushima said earlier this month that if the SOFA agreement is kept in its current form, she would have to “seriously consider” taking drastic action, in a threat to leave the governing coalition.

Within the DPJ, there have been contradictory statements given by cabinet members, often on the same day, leading to questions about Hatoyama’s ability to lead the country. For his part, the prime minister has said that any final decision on the SOFA agreement “will be his and his alone.”

The DPJ has said that all options remain on the table, including maintaining the current SOFA agreement. The United States has asked Japan to reach a decision on the issue by Friday, so the issue is likely to come to a head this month.

Marathon consultations agreement ends Sudan’s NCP, SPL Mtension

Tuesday, January 5th, 2010

Following marathon consultations that lasted for three days, the Sudanese ruling National Congress Party (NCP) and the former rebel Sudan People’s Liberation Movement (SPLM) on Sunday reached a series of agreements, ending a tension between them aroused by differences over bills associated with elections, the referendum on self-determination for southern Sudan and other issues.

The Sudanese President and NCP Chairman Omar al-Bashir and First Vice President and SPLM Chairman Salva Kiir managed on Sunday to reach full agreements on the referendum bill on self-determination for southern Sudan, a bill on the popular consultation for Blue Nile and South Kordofan areas and another bill on the referendum for the disputed enclave of Abyei between northern and southern Sudan.

Senior officials of the two parties announced at a joint press conference following the meeting between al-Bashir and Salva Kiir that the two sides also agreed on formation of a joint committee to review the issue of elections and associating matters, and prepare a climate conducive to free and fair elections that involve all Sudanese political parties.

The NCP and SPLM, however, did not agree on the bill of security and intelligence, which the SPLM argues that it provides too much for the security organs. The two sides decided to continue consultations on the bill and said they expect to agree on it in a few days.

The two sides did not give further details on contents of the agreement on the referendum bill, especially the quorum and the percentage that decides unity or separation of southern Sudan.

The NCP and the SPLM had differed on all essential points of the referendum law, notably on who have the rights to vote, the headquarters of the referendum commission and the percentage that would decide unity or separation.

Rabie Abdul-Atie, a Sudanese political analyst, told Xinhua that the agreement indicated that the road-map set by the Comprehensive Peace Agreement (CPA) between northern and southern Sudan was progressing well and that everything stipulated in the agreement, in particular the elections, would be implemented.

“This agreement indicates ability of the two partners (NCP and SPLM) to overcome any difference,” he said.

He stressed that the two sides must maintain a harmonious relationship to be able to address issues of the coming phase, saying “the coming phase cannot bear further differences.”

The NCP and the SPLM signed the Comprehensive Peace Agreement in 2005, ending one of the longest civil wars on the African continent.

The latest tension between the two sides started when the SPLM announced withdrawal from the Sudanese National Assembly (parliament) on Oct. 14 in protest against non-endorsement of bills associated with democratic transition in the country, and accused the NCP of procrastination in endorsing those bills.

The two partners had encountered differences, but the recent one had almost destroyed their partnership.

The tension reached the summit when the SPLM led the opposition parties and attempted to stage a demonstration last week. The Sudanese authorities dispersed the demonstration.

The general elections in Sudan are slated for April 2010, while a referendum on self-determination for southern Sudan is set for early 2011.