Regional News

China will reduce the companies that it allows to recycle lead-acid batteries to produce refined lead.

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Battery-Recycling-BinIndustry sources estimate China will only permit about 20 battery recyclers to operate in the near future, as opposed to  the many hundreds of firms presently in operation. According to Cao Guoqing, vice general secretary of the China Battery Industry Association, “The government will do it for sure in the future.” He did not say when the regulations were likely to be implemented. These regulations attempt to improve environmental regulations in the battery industry, the main user of refined lead in China.

China is the world’s largest producer and user of refined lead. Cao estimated that by 2015, China’s production of lead-acid batteries will reach 240 million kilowatt hours, which is twice 2009 levels. China used 2.35 million tons of refined lead for lead-acid battery production in 2009. This used about 70 percent of china’s total refined lead consumption in 2009, he said.

Woori seeks to Form Consortium While Hana Pursuing M&A

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The battle for Woori Finance Holdings is heating up, as the nation’s largest financial has expressed its intention to stand on its own feet, while Hana Financial Group is seeking to take over the state-run lender.

Woori Bank CEO Lee Chong-hwi said Monday that it plans to form a consortium of investors to buy a controlling stake in the financial group, which was put up for sale last week, the head of its bank unit said Monday.
The remarks came after the state-run Korea Deposit Insurance Corp. began to accept bids over the weekend for a 56.98 percent stake, worth about $6 billion.

Hana, the nation’s fourth-largest banking group, has openly expressed interest in taking over Woori, but Woori has pushed for finding a few big investors to jointly buy the stake in order to avoid falling under the control of a smaller rival.

“For the sake of independent privatization, we should form a consortium among domestic and foreign big investors,” Lee Chong-hwi, chief executive of Woori Bank, said in a monthly speech to bank employees.
“Putting the banking group under joint ownership by a small group of shareholders, rather than one dominant owner, is the most realistic solution for the privatization of Woori Finance, and it would also ensure a stable governance structure at the group,” the CEO said.

Woori has asked a few industrial groups, including steelmaker POSCO and information technology service giant KT, to buy some stakes in the group. However, so far not a single group showed any intention to buy stakes.

Recently a KT spokesman said the IT heavyweight has no plan to buy a Woori stake and about a month ago POSCO Chairman Chung Joon-yang told local reporters the world’s third largest steel company is not interested either.

Hana is moving to secure funds to buy the bigger rival by putting its real estate property up for sale. The boardroom of Hana approved a plan to sell the main office of Hana Daetoo Securities, a brokerage arm of Hana, last week.
The 23-floor building in Yeouido, a local center of financial services firms, is valued at around 300 billion won. Industry watchers said Hana decided to sell the building to secure enough cash in preparation for the acquisition of Woori.

Hana is also asking global financial firms to join the M&A deal. The company said so far a couple of investors have shown interest.
“A few overseas international financial companies said they are interested in joining the Woori bid,” Hana Spokesman Lee Jung-dae, said.
He said that there has been positive feedback in the process of inviting investors. “Thanks to the friendly investment support, we may not need to prepare many assets for the deal.”

Analysts said it is too early to predict the future of the deal, and said anything is possible at the moment.
“Nothing has been decided yet. If Woori attracts sufficient investors, it can survive on its own ability,” Choi Jung-wook, a senior analyst from Daishin Securities, said.

Others view Hana is in better position than Woori now.
“I think Hana has taken the initiative to lead the M&A deal. Hana is betting the group’s destiny on the deal, while Woori will have a difficult time to find financial investors,” Lee Hyuk-jae, an analyst from IBK Investment & Securities said.

China Tightening Deposit Minimums

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In order to fight against rising consumer prices and house prices, the Chinese central bank is likely to tighten monetary supply.

After November 15, Several commercial banks have will have to increase their minimum deposits at the central bank by 0.5 percentage according to various sources. This money will be pulled out of economic activity. On the stock market, the prices of big financial companies like the Bank of China fell by more than three percent.

“The economy is growing a bit too fast, so the country risks rising inflation,” said the chief economist at Industrial Securities, Dong Xian. “The authorities will therefore use monetary policy to bring down inflation expectations significantly.” The government is also concerned that the loose monetary policy of the US Central Bank will attract fresh capital to China, which will further drive asset prices up. The Fed wants to boost the U.S. economy by pumping 600 billion U.S. dollars of fresh money into circulation.

G20 leaders meet to Strengthen to World economic system

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SEOUL, South Korea – America’s move to flood its sluggish economy with $600 billion of cash, has triggered alarm in capitals from Berlin to Beijing. This has created tensions over currencies and trade gaps which are growing before the summit of global leaders this week.

The Group of 20 developing and rich nations are attempting to reform the world economy in the aftermath of the 2008 financial crisis. Two years ago the group’s leaders met for the first time. They set out an ambitious agenda to ensure stable economic growth and to strengthen financial supervision to prevent further meltdowns and to give developing countries more of a say in what’s going on.

The Federal Reserve’s decision to buy $600 billion of Treasury bonds over the next eight months helps tolower interest rates to spur growth and cut the high unemployment rate. However, this decision  is complicating  discussions on achieving those goals at the summit Thursday and Friday in Seoul

At the center of the discussions is the understanding that a decades-long global economic order centered on the U.S. buying exports from the rest of the world and running huge trade deficits while other countries such as China, Germany and Japan accumulate vast surpluses is no longer reasonable after the crisis.

The attempt to remake the world economy received some of its momentum from the rise of countries such as brazil, India, and China to become economic and political giants in their own right. The G-20 meetings themselves show the great changes since the crisis. They mark the end of a system in place since the 1940s in which the world economy was managed mainly by a small group of rich nations led by the United States, Europe and later Japan.

Investment Cooperation between France and China

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Last week, Chinese President, Hu Jintao, visited France for high level meetings. One of the meetings was sponsored by Medef, “The Movement of French Enterprises” which is the largest French employer’s unions. Medef organized a seminar attended by 250 French and Chinese investment companies. Commercial cooperation agreements were signed.

In his speech, Chinese Commerce Minister Chen also drew attention to the delicate issue of intellectual property. Chen tried to reassure French companies: “Our children need to innovate, not copy,” he told bosses came to the meeting. The Chinese Minister of Commerce invited all those who have concerns about doing business in china to come forward. He assured them that all problems will be reviewed within six months and solutions will be proposed.

He took the example of Schneider Electric, whose boss Jean-Pascal Tricoire was present at his side. “Schneider is very active in China,” said Chen Deming, “This French company is treated with all of the privileges of domestic companies.”

After China’s history of copying, is there room for innovation?

The Chinese Minister assured the contractors that innovation is what interests him, copying other companies’ products, patents and software is a thing of the past.

The financial agreements signed on Friday are signals of financial strength. They come at a time when China manufactures high speed trains for international tenders and when the first Chinese airplane is about to be produced. This plane will compete with Airbus and Boeing.

Opportunities for French and Chinese mutually beneficial business relationships will grow with time.

Coal India Is Gold India

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Today, the Indian government advised investors to remain with Coal India Ltd to multiply their fortunes. The government compared the strengths of the company with gold, which is one of the best long-term investments to create wealth.

“Coal India is actually Gold  for the investor community, remain with it,” Coal Minister Sriprakash Jaiswal said , after witnessing a 43 per cent rise in the company’s shares within 2 days of its debut on the stock exchanges.

The world’s largest coal producer, Coal India Ltd (CIL), made an impressive start on the stock exchanges. It ended the week up 43 per cent at Rs 349.65 a share on the Bombay Stock Exchange in contrast to the issue price of Rs 245 a share.

Analysts are upbeat on the future of coal India LTD and are raising their closing price estimates for the end of each successive trading session.

Panamanian President to visit three countries in Asia for investment

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Ricardo MartinelliPanama’s president, Ricardo Martinelli, begin on Friday a tour of Singapore, South Korea and Taiwan to strengthen relations with these countries and attract investment, said the Panamanian Foreign Minister Juan Carlos Varela.

Martinelli will meet with the presidents Sellapan Rama Nathan (Singapore), Lee Myung-Bak (Korea) and Ma Ying-jeou (Taiwan), with whom he seeks bilateral relations on economic issues, according to Carlos Varela.

“The president’s visit (Martinelli) is to bring bilateral relations and encourage foreign investment in the country,” Varela told reporters.

Varela said the tour, which will take 9 days, seeks to promote Panama as “a logistics center and convergence” of passengers and cargo for distribution in the continent.

Large Multinationals Are Investing China

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In late 2009 12.000 local Chinese investors in a  total of 13,000 companies with direct foreign investments were launched.  Direct investments were spread over 177 countries and territories around the world. In 2009, China’s direct investment abroad amounted to U.S. $ 56.5 million, placing fifth in the world.

In the next five years, China will have a number of large multinational companies. These projection serve to solidify the growing perception of China as a global economic powerhouse.

Indian Retail Remains Elusive to Investors

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Although there has been increased interest for retailers to enter the Indian markets, retail in India has remained in it infancy.  One example is food distribution.  This is done through small “Kirana Stores” or “public distribution shops.” Supermarkets or shopping centers, even according to Western patterns exist in India only in recent years. This has resulted in a  highly restricted focus distribution shops.” on consumer needs, thus creating a problem for large scale foreign investments to spur growth.

Now despite a slow start, there is a modern Indian retail sector beginning to emerge.  In 2006  although the industry went through a tremendous change  foreign companies still did business in Cash & Carry up to 100 percent and single-brand stores up to 51 percent. In contrast, foreign investors continued operation of multi-brand stores, such as department store chains or supermarkets in a limited sense.

It was therefore all the more surprising that the Indian Ministry announced for Industry and Commerce in the summer of 2010, to allow foreign retailers in the foreseeable future investments up to an investment limit of 49 percent in multi-brand trade. The government, combined with this step is incorporating  involvement of external providers in order to modernize an inefficient trade system as well as the general infrastructure. However, with such a step only the legal barriers to entry are reduced. Foreign retailers will continue to have to deal with the fact that it is unclear whether India’s new retail formats, such as large supermarkets and discount stores, will come on board at all.

Solaris Starts Chinese Backed Hedge Fund

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Solaris Asset Management, co-founded by Thomas Tey the former head of equities derivatives at Oversea-Chinese Banking Corp., is starting a hedge fund with money from investors in China.

The Solaris Capital SPC Equity Arbitrage Fund will start trading with S$30 million ($23 million) on Nov. 8, Tey said. Thomas Tey is a 24-year trading veteran with banks including Singapore- based Oversea-Chinese’s treasury division and Credit Suisse First Boston in Tokyo.

Tey’s aim is for the fund to grow to S$100 million by the end of 2011. He is actively targeting investors in Asia since raising assets in the U.S. and Europe has become “very, very tough.” About 50 percent of assets in Asian hedge funds come from Europe, while 40 percent are from U.S. investors, according to Eurekahedge Pte.

“This is not a very conducive environment to be raising money, but we expect to get to our target,” Tey, 49, said in an interview on Oct. 22nd.

The Solaris fund aims to trade stocks and derivatives including futures. The fund will be focused on arbitrage opportunities where it can profit from price differences between related securities, according to Tey.

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