Download China imports break 2-year losing streak

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Mazda recalls
2.2m vehicles
DETROIT: Mazda is recalling 2.2 million cars and
SUVs worldwide because
the rear hatches can fall
on people and injure
them. The recall covers
certain 2010 through 2013
Mazda 3 compact cars, as
well as 2012 through 2015
Mazda 5 vans. Also
included are certain 2013
to 2016 CX-5 and 2016
CX-3 SUVs. More than
759,000 vehicles in the US
and Canada are affected.
Mazda says the corrosion
protection coating
applied to the hatch lift
supports at the factory
wasn’t sufficient. Over
time, water containing
road salt can get into the
supports, causing them
to corrode and break.
Mazda says it has no
reports of accidents or
injuries caused by the
problem. Dealers will
replace both lift supports. Customers will be
notified in September or
October about when to
bring their vehicles in
for repairs. (AP)
Mubadala loses
$1.19b in H1
DUBAI: Abu Dhabi’s staterun Mubadala
Development Co wealth
fund has announced it
lost $1.19 billion in the
first half of 2016. In
results released on
Thursday, it blamed
lower commodity prices,
decreased gains in financial investments and
other woes for the loss.
That compares to a net
gain of $169 million the
same time last year.
Mubadala CEO Khaldoon
Khalifa al-Mubarak said
in a statement that “the
global economic challenges we have faced
since the beginning of
2015 persist”. Mubadala
is in the process of being
merged with the
International Petroleum
Investment Co, another
wealth fund in Abu
Dhabi, the oil-rich capital of the United Arab
Emirates. Mubadala’s
holdings include semiconductor maker
Globalfoundries and
renewable energy company Masdar, as well as
stakes in General
Electric Co. and The
Carlyle Group. (AP)
Egypt inflation
hits 15.5 percent
CAIRO: Egypt’s state
statistics bureau says
the annual inflation rate
in urban areas has
reached 15.5 percent in
August, a surge of nearly
two percentage points
over the previous month.
Data released Thursday
by the bureau says food
and beverages prices, the
single largest component
in the basket of goods
and services used to
gauge inflation, rose to
19.3 percent in August
compared to last year
and by 1.6 percent over
July. The rise is mostly
attributed to the
Egyptian pound’s depreciation and last month’s
hike in charges for
domestic electricity use.
Egypt’s double-digit
inflation follows last
month’s provisional
agreement with the
International Monetary
Fund for a $12 billion
loan over three years to
overhaul its ailing economy. Egypt is expected to
introduce far-reaching
economic reforms to
secure the loan. (AP)
money
world
Friday, September 9, 2016 | the kathmandu post
II
tie-up to
China imports break Mahindra-Ola
shape future auto design
2-year losing streak
REUTERS
MUMBAI, SEPT 8
Agence France-Presse
BEIJING, Sept 8
China’s imports rose for the
first time in nearly two years
in August, figures showed
Thursday, the 1.5 percent
annual increase beating
expectations in a positive sign
for the world’s second-largest
economy.
Exports dropped 2.8 percent
on-year to $190.6 billion, but
the fall was smaller than the
median forecast in a survey of
economists by Bloomberg
News. The data from Customs
was the latest indicator of
improving health for the
world’s biggest trader in
goods, with the rise in
imports—to $138.5 billion—
the first since October 2014.
China is crucial to the global economy and its performance affects partners from
Australia to Zambia, which
have been battered by its slowing growth. Its economy
expanded 6.9 percent last year,
its weakest rate in a quarter
of a century.
The trade figures’ “big surprise” was imports, said
Julian Evans-Pritchard of
Capital Economics, as they
hinted at stronger domestic
demand. He noted that some
of the improvement could be
attributed to a recovery in
commodity prices after years
of declines.
Customs data also showed
that import volumes of key
commodities rose year-onyear, with iron ore climbing
18.3 percent, crude oil up 23.5
percent, and coal surging 52.0
percent. “Climbing imports
dispels the myth of weakening economy,” said analysts
Jianguang Shen and Michael
Luk of Mizuho Securities in a
note.
Post-flood purchases after a
summer of unusually heavy
rains and widespread flooding
in southern China also lifted
imports, Zhao Yang of
Nomura said in a note, pointing particularly to increased
buying of automobiles to
replace destroyed vehicles,
and greater use of iron ore
and oil owing to reconstruction work. But such boosts
will be short-lived as recovery
efforts conclude, he said, adding that import growth was
likely to be “more transient
than long-lasting”.
In the fourth quarter
“downward pressures posed
by the possible slowdown of
property investment” were
likely to weigh down both
imports and general growth
momentum, he said.
For factors behind the
exports performance, analysts
pointed to a weaker exchange
rate for the yuan, which has
dropped roughly five percent
in the past year despite pledges by central bankers not to
depreciate the currency further.
The August trade surplus
fell 13.6 percent from last year
to $52.0 billion. But analysts
with ANZ described the figure
as “resilient” and said it
would help alleviate net capital outflows—although they
noted that sluggish global
demand would still weigh on
the outlook for China’s manufacturers.
China’s foreign exchange
reserves at the end of August
dropped to $3.19 trillion,
according to central bank
data, their lowest level since
the end of 2011. Coupled with
the trade surplus, the reserves
decline suggests that August
saw “another month of steady
hot money outflows”, the
Mizuho analysts said, estimating that $36.1 billion left the
country in August.
The trade figures recovered
from a worse-than-expected
performance in July, when
imports plunged 12.5 percent,
weighed by weaker commodity prices and lacklustre
domestic demand.
Earlier this month an official measure of manufacturing activity also beat expectations, rebounding to its
strongest level in nearly two
years, with the purchasing
managers’ index (PMI) coming in at 50.4 in August, a sign
of expanding activity in
Chinese factories and mines.
But investors were tepid on
the improved trade data, with
Shanghai stocks closing only
fractionally
higher
on
Thursday.
Indian automaker Mahindra
& Mahindra Ltd’s tie-up with
domestic ride-sharing giant
Ola will not only drive car
sales, but also influence and
shape the design of its vehicles in the future, Chairman
Anand Mahindra said on
Thursday.
Mahindra said automakers
will need to adapt and design
cars differently in the future
by building cars better suited
to the needs of the sharing
economy, so as to capitalize on
the rapid rise in ride-sharing
popularity both domestically
and overseas.
“This is going to completely
change the auto industry,”
Mahindra said in an interview, just ahead of announcing the alliance with Ola that
is expected to rake in $400
million in revenue over the
next two years via car and
service sales.
Mahindra joins the ranks
of Volkswagen, Toyota Motor
Corp and General Motors,
which have all inked tie-ups
with ride-sharing firms to
guard against a shift in consumer choice away from vehicle ownership. “Car companies are going to have to recognise this reality and find
ways of participating in this
new world of shared mobili-
Mahindra and Mahindra Group Chairman and Managing Director
Anand Mahindra (left) shakes hands with Ola cabs CEO Bhavish
Aggarwal an event in Mumbai on Thursday. AFP/RSS
n
ty,” he said. Mahindra, whose
company is one of the first
Indian carmakers to form
such an alliance, said he will
use some of Ola’s data on drivers and rides to influence cars
it designs in the future. It will
also feed into its research on
autonomous driving. The deal
with Ola, however, is not
exclusive and will not prevent
Mahindra from entering into
other similar partnerships in
the future.
Mahindra will sell a total of
40,000 vehicles to Ola in two
years starting with its Verito
sedan and possibly electric
cars in the future. In return,
Ola gains access to a one-stop-
shop for vehicles and services
for its drivers. Ola will also be
able to use the Indian automaker’s reach in rural areas
to lure new drivers to its platform.
There is a lot of synergy
possible between both companies, Ola Chief Executive
Bhavish
Aggarwal
told
Reuters in the interview, adding that Ola had initiated the
alliance talks with Mahindra
about a month and half ago.
The push by Ola comes
weeks after Uber said it would
merge its business in China
with that of local rival Didi,
freeing up the global ride-sharing firm to focus on India.
price
India president Japan GDP growth remains weak Gold
inches up on
weaker dollar
approves tax
reforms bill
Agence France-Presse
TOKYO, Sept 8
Indo-Asian News Service
New Delhi, Sep 8
Indian President Pranab
Mukherjee on Thursday gave
his assent to the landmark
Goods and Services Tax (GST)
Bill, an official said.
The President’s Office confirmed the development to
IANS. The central government
had
sent
the
Constitutional Amendment
Bill to the President after 16
states ratified the legislation.
The government targets to
implement the GST system
from April 1, 2017. The Centre
will have to pass the Central
GST and Integrated GST Bills,
while the states will need to
approve their respective GST
legislations. The Bill was earlier passed unanimously by
the Rajya Sabha and the Lok
Sabha.
The Goods and Services
Tax is a single indirect tax
that proposes to subsume
most central and state taxes
like Value Added Tax, service
tax, central sales tax, excise
duty, additional customs duty
and special additional customs duty.
The GST rate has to be
decided by the proposed GST
Council, which will be chaired
by the Union Finance
Minister. All state finance
ministers will be its members.
The Council also has to put in
place a dispute resolution
mechanism.
The states will, however, be
able to adopt a GST structure
that is different from that recommended by the GST
Council. The council recommendations will not be binding on the states.
The Bill says the GST
Council will make recommendations to the Centre and the
states on issues such as taxes,
n
Pranab Mukherjee
cess and surcharges that
might be subsumed in the
GST tax rate. Parliament and
state assemblies have the
right to accept those recommendations in their GST Bills.
While the pan-India overhaul of India’s indirect tax
regime has got the mandatory
support of more than half the
states, Tamil Nadu’s ruling
AIADMK had walked out
before the voting on the Bill
began, both in the Rajya
Sabha and the Lok Sabha.
The party had wanted some
changes in the Bill, such as
imposition of four percent
additional tax on inter-state
trade and transfer of money
thus collected to the state of
origin of the goods. The
Centre is to compensate the
states for revenue losses for
the first five years after the
implementation of the GST if
the states’ revenues come
down under the new tax
regime.
Meanwhile, at a meeting
here with the Empowered
Committee of State Finance
Ministers on GST last month,
India Inc pitched for an 18
percent standard rate on the
ground that this rate will generate adequate tax buoyancy
without fuelling inflation.
Japan’s economy barely grew
in the second quarter, revised
data showed Thursday, further calling into question
Prime Minister Shinzo Abe’s
big-spending easy-money policy drive.
While the figures were a
slight improvement on the
zero expansion in earlier estimates—owing to an upward
revision in capital spending
and public investment—they
were still well below the previous three months’ figures.
And analysts were cool on
the prospects for future
growth in the world’s number-three economy. “It’s getting better but the economy is
lacking a growth engine and
overall the outlook is pretty
bleak,” said Kohei Iwahara, a
Japan economist at French
The economy expanded 0.2 percent on-quarter in
April-June and 0.7 percent on an annualised basis
bank Natixis. “There may be
some growth in the third
quarter but nothing exciting—I’m not optimistic.”
Japanese leaders have
struggled to get a strong handle on the economy, which
contracted in the last three
months of 2015, before bouncing back in January-March
with a 0.5 percent rise
on-quarter and 2.1 percent
annualised. It expanded 0.2
percent on-quarter in AprilJune and 0.7 percent on an
annualised basis.
The unsteady trend is putting pressure on Japanese
officials to deliver as economists increasingly write off
Abe’s more than three-year
attempt to cement a lasting
recovery, dubbed Abenomics.
Tokyo recently announced
a whopping 28 trillion yen
($275 billion) package aimed
at kick-starting growth, after
Britain’s June vote to quit the
European Union sent financial markets into a tailspin
and sparked a rally in the yen,
which is hurting corporate
profits.
“Japan’s economy is only
managing this weak, fragile
growth,” Yasunari Ueno,
chief market economist at
Mizuho Securities, said in a
commentary. “Exports are
unlikely to be the engine of
recovery. With corporate profits set to decline this year, it’s
tough to see wage growth
spurring consumer spending
or firms stepping up their
own investments. Another
rise in the yen could tip the
economy into a recession.”
Investors tend to buy
Japan’s currency as a safe bet
in times of turmoil or uncertainty. But it makes exporters
less competitive overseas and
hits their profits. The problem
was highlighted recently as
many of the county’s bestknown firms, including Sony
and Toyota, reported lower
profits in the three months to
June.
Japan’s latest figures will
throw the spotlight on the central bank, which meets later
this month, as markets try to
guess if it will launch more
economic stimulus. Bank of
Japan policymakers disappointed at its late July meeting when they opted to leave a
record 80 trillion yen annual
bond-buying programme.
largest of its kind
n Antonov An-22A ‘Antei’ (Antheus), believed
to be the world’s largest turboprop-powered aircraft, takes off from the tarmac at the Antonov
aircraft plant before the first commercial flight after its renovation in the settlement of Hostomel outside Kiev, Ukraine, on Thursday. REUTERS
REUTERS
LONDON, SEPT 8
Gold edged higher on
Thursday on a weaker dollar,
with investors looking to the
outcome of a European
Central Bank policy meeting
later in the day for signs of
economic stimulus.
The eurozone economy is
widely expected to need more
stimulus from the ECB, but it
may not come at Thursday’s
meeting.
“There are just not enough
(assets) for the ECB to buy. If
we see more buying, it will
give a fillip to gold,” said
Jeffrey Halley, business development and market strategist
with OANDA Asia Pacific. “As
long as the dollar remains
weak, we can see gold test
$1,350 and make its way up to
$1,375-80 levels,” he said.
Spot gold was up 0.2 percent
at $1,347.01 an ounce by 0657
GMT. US gold futures rose 0.2
percent to $1,351.70. “While
weaker-than-expected US economic data over the past week
point to diminished market-expected probability of a
rate hike in September, we
believe that the outlook for
gold price movements is likely
to be mildly bearish over the
rest of 2016,” said NAB analyst Vyanne Lai.
Several US Federal Reserve
officials have made hawkish
comments in the past couple
of days, making a push for
rate increases.
Rising US interest rates
increase the opportunity cost
of holding non-yielding bullion and boost the dollar, in
which gold is priced. “In the
absence of bullish factors,
gold tends to recede rather
than hold steady. This may be
the case now, and we may see
further profit-taking near
term,” HSBC analyst James
Steel said. “The next rate rise
should put a near-term floor
on gold prices. Also bond
yields remain low, another
supportive factor.”
Deal sealed
New era for Formula One as Liberty agrees $8 billion takeover
Agence France-Presse
WASHINGTON, Sept 8
Formula One entered a new era
on Wednesday as US billionaire
John Malone’s Liberty Media
agreed a takeover that values the
motorsport at $8 billion and raises questions over the role of its
colourful, long-time mastermind,
Bernie Ecclestone.
In a deal that ends years of
speculation over F1’s future,
Liberty said it had struck an
agreement to buy out Formula
One’s parent company from CVC
Capital, and had already acquired
a minority stake of 18.7 percent.
Liberty Media group will pay a
total equity price of $4.4 billion
in cash, newly issued shares, and
exchangeable debt to complete
the deal, which gives Formula
One an enterprise value of $8.0
billion. Liberty said it would keep
Ecclestone, who built Formula
One into a global operation over
nearly four decades, as chief
executive, but also named 21st
Century Fox vice chairman
Chase Carey as the company’s
new chairman.
“I greatly admire Formula One
as a unique global sports entertainment franchise attracting
hundreds of millions of fans
each season from all around the
world,” Carey, 62, said.
“I see great opportunity to
help Formula One continue to
develop and prosper for the benefit of the sport, fans, teams and
investors alike.”
The takeover is set to be completed next year, subject to
approval by regulators, Liberty
Media’s shareholders and F1’s
governing body, the Federation
International de l’Automobile
(FIA). It gives Liberty control of
a global and highly profitable
sport which includes 21 races this
year stretching from Melbourne
and Shanghai to Sochi, Mexico
City and finishing in Abu Dhabi.
Formula One rakes in billions
from advertisers and broadcasting rights for what is one of the
world’s most-viewed competitions. It also earns millions from
Formula One-branded merchandise. F1’s future under CVC has
long been in question and a mooted share flotation in Singapore
was shelved in 2012.
Despite the big profits, some F1
teams are plagued by financial
problems and the sport faces
challenges to its fanbase and TV
viewership, with its races often
criticised as predictable.
Ecclestone, a former motorcycle dealer and racing driver, has
been the flamboyant figure at the
centre of Formula One since the
1970s, crafting it into one of the
world’s most glamorous and best
known sports.
After months of talks with the
sellers, Liberty agreed to retain
the canny and combative 85-yearold, who insisted his role would
remain unchanged despite the
arrival of Carey as chairman. “I
will stay on as F1 chief executive,’ Ecclestone told the
Autosport website. “I will continue to do all the things I have previously done, such as negotiate
with the circuits, television companies and people like that.
“The good news is we will have
someone on board in Chase, and
he will hopefully be able to push
F1 into new territories with
social media. I have never found
a way to make money from that.”
Ecclestone himself is valued
by Forbes magazine at $4.2 billion, making him one of the richest 400 people in the world. CVC
co-chairman Donald Mackenzie
praised Ecclestone, who forked
out $100 million to German
authorities to end a high-profile
bribery trial in 2014.
“Bernie has been a wonderful
CEO for us over the last 10
years,” Mackenzie said in a statement. “There have been many
successes and the occasional
challenge but there has never
been a dull moment and we have
had a lot of fun.
The combined skills of Chase
and Bernie mean that the successes should continue and we
wish them well.”
The purchase also adds a new
gem to the growing collection of
savvy, low-key tycoon Malone,
who Forbes estimates has a fortune of $7.1 billion.
The broader Liberty group
runs a wide range of media-centric businesses, including Time
Warner cable television, concert
promoter Live Nation, the
Atlanta Braves Major League
Baseball team, and a stake in
Formula E, the all-electric version of Formula One which
launched in 2012.
C M Y K
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