Japan still stationary
Mar31

Japan still stationary

Japan’s manufacturing activity dropped to a two-year low in March and posted its sharpest decline since records began in October 2001, a survey showed today. The disruption of production operation and supply chains caused by the earthquake and tsunami devastation caused the index of purchasing managers to fall to 46.4 from 52.9 in February, according to both JMMA and Market Economics. The survey offered a first insight into quantitative assessments of the damage created by the tsunami and earthquake on March 11, which caused a severe nuclear safety emergency and extensive power deficiency. Cost inflation rose at the quickest rate in two and a half years and new orders fell at the steepest pace in two years, according to the release. It was also highlighted that data was collected with great difficulty indicating just how badly the events in Japan had affected manufacturing. According to Markit, just 67 percent of the average number of replies was received in total, only 5 percent of average replies from Tohoku, 60 percent from the Kanto region and 85 percent from car manufacturing city Chubu.

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OPEC on target for $1trn revenue
Mar30

OPEC on target for $1trn revenue

OPEC, the crude oil producer’s cartel, could this year for the first time ever bank $1trn in export revenue if crude oil prices maintain their 100 bbl, the IEA said. Brent Light Crude traded at 115 bbl on the ICE exchange London while the US traded above $104 yesterday.  Amid the MENA uprisings the company’s cartel has been one of the key beneficiaries of elevated crude oil prices.  Although the total number of barrels exported by Opex in 2011 would be somewhat lower than in 2008 where cartel oil revenues reached $990bn, if the average price stays at the current 100 bbl, OPEC will reach a record $1tr for 2011. Analysts note that large oil producers like Saudi Arabia may use the extra income to boost public spending in an attempt to control public unrest.

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Construction returns to profit
Mar29

Construction returns to profit

Leading plumbing and construction supplier Wolseley saw its shares climb 3.8 percent and top the key gainers on the FTSE 100 this morning following the release of its results. The company posted half year net profit figures of $213m and said that trading across its networks improved, which will allow it to resume paying a dividend. A 15p a share interim dividend was announced by the company in spite of expressing some caution about the outlook. On the reinstatement of the dividend and the group outlook CEO Ian Meakins said: “The dividend reflects the strength of our balance sheet and our confidence in the future trading prospects of the group. We expect to continue to grow in the second half of the year, though the comparatives will now be much more demanding.” Despite challenging conditions the company’s revenue increased by 5 percent on a like for like basis whilst results showed that gross margin was 0.2 percent higher than last year at 27.7 percent. The supplier also announced that it saw improved trading profit and operating leverage across all geographies with a trading profit of $440m, or 64 percent ahead of last year. It also said that good cash generation with adjusted net debt reduced by $419.5m since July 31. Commenting on trading Meakins added: “Construction markets have now broadly stabilised in most of our geographies, particularly the new residential and RMI segments in the USA. The overall macro-economic environment in several regions continues to be fragile and pricing competition […]

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Pacific shares under pressure
Mar28

Pacific shares under pressure

For the first time in three days the FTSE Asia Pacific index has fallen 0.4 percent, while the Nikkei stock average fell 0.57 percent or 57.60 to 9578.53. Renewed worry about high levels of radiation at Japan’s nuclear power plant in Fukushima has again put Asia Pacific shares under pressure with radiation levels said to be 100,000 times higher than usual. Workers had to be evacuated late on Sunday from Reactor 2 in Fukushima following the finding that extremely elevated radioactivity levels were identified at the plant. Stocks may have also been affected as an earthquake with a initial magnitude of 6.5 hit Miyagi Prefecture and its vicinity in north-eastern Japan this morning, Japan Meteorological Agency said. A tsunami warning was issued for the Pacific coast of the prefecture but was later lifted. The FTSE Hong Kong index fell 0.46 percent but remained up by 0.2 percent after banks and the coal mining industry published results that showed higher than expected earnings. Meanwhile the FTSE ALL-World equity index has suffered its first loss in eight sessions, down 0.2 percent, and so terminates the successive stint that elevated stocks back to levels observed prior to the March 11 earthquake in Japan.

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Brazil’s housing carnival stokes bubble worries
Mar28

Brazil’s housing carnival stokes bubble worries

Listening to Jose Carlos de Vasconcellos talk about Rio de Janeiro’s property market is like being transported back to the bubble days in the US or Europe. The 60-year-old, who came out of retirement to join Brazil’s swelling ranks of real estate brokers, is convinced that property in the beachside city is a one-way bet despite a near doubling of house prices in just three years. “I’m confident that the market isn’t going to slow down any time soon,” he said, taking a break from his afternoon class at a Rio school for real estate brokers. “I don’t see any investment that’s as good as property.” Burned property investors elsewhere may beg to differ, but Vasconcellos is typical of the blissful optimism that has infused Brazil’s real estate market at a time when property in much of the developed world remains buried in sour debts. Rio, boasting picture-postcard scenery and plans for big investments ahead of the soccer World Cup in 2014 and the Olympic Games two years later, is not alone in a Brazilian housing boom that is inevitably raising fears of an asset bubble in one of the world’s hottest emerging markets. Since early 2008 – just as the credit crunch was biting in the developed world – residential property prices in Rio have risen 99 percent with Sao Paulo not far behind on 81 percent, according to a newly launched index by Brazil’s Fipe economic research institute. Brazil lacks an official gauge of national house prices, but […]

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