Wednesday, November 11, 2015

SIA signs extensive partnership deal with Lufthansa

SIA signs extensive partnership deal with Lufthansa

By
nishar@sph.com.sg@Nisha_BT
SINGAPORE Airlines (SIA) and Lufthansa have inked a wide-ranging partnership agreement that will see the two airline groups operating key routes between Singapore and Europe on a joint-venture basis, in addition to expanding codeshare ties.
Flights between Singapore and both Frankfurt and Munich, as well as flights between Singapore and Zurich, are to be operated under revenue-sharing arrangements. SIA's new flights to Dusseldorf - to be launched in July next year - will also be covered under such arrangements.
Meanwhile, the expanded codeshare ties will provide SIA passengers access to and from points in Austria, Belgium, Germany and Switzerland - via certain European hubs - with more than 20 new codeshare routes.
Lufthansa and Swiss will in turn codeshare with SIA and its regional arm SilkAir on more routes serving destinations in South-east Asia and the South-west Pacific.
The two groups plan to tie up for key markets in Europe, South-east Asia and Australia, coordinating schedules to provide customers more convenient connections between route networks, offering joint fare promotions as well as aligning corporate programmes, and possibly enhancing their existing frequent-flyer programme ties.
Codeshare cooperation is expected to be expanded to more destinations going forward.
Some of the benefits of the agreement - such as codeshare services - will be rolled out in the coming months.

World nations reach landmark deal on using satellites to track flights

World nations reach landmark deal on using satellites to track flights

[GENEVA] World nations struck a landmark deal Wednesday on using satellites to track flights, which could prove key to preventing a repeat of the mysterious disappearance of flight MH370 in March 2014.
Countries reached an accord at a conference hosted by the UN's International Telecommunication Union (ITU) that aimed to improve on the current civilian flight-tracking system which relies on ground-based radars.
"In reaching this agreement... ITU has responded in record time to the expectations of the global community on the major issue concerning global flight tracking," the organisation's secretary general, Houlin Zhao, said in a statement.
The ITU statement made clear the deal was driven by the disappearance of Malaysia Airlines flight MH370 which had 239 people on board.
That tragedy "spurred worldwide discussions on global flight tracking and the need for coordinated action," the organisation said.
Representatives of more than 160 nations attended the conference.
It was tasked with determining technical requirements for a tracking system capable of providing complete surveillance of global airspace.
The ITU said a frequency band previously used to transmit signals from aircraft to terrestrial stations would be enabled to send transmissions from aircraft to satellites.
This change will enable "real-time tracking of aircraft anywhere in the world," said Francois Rancy, director of the ITU Radiocommunication Bureau.
AFP

Japan advisors call for minimum wage increase to boost consumption

Japan advisors call for minimum wage increase to boost consumption

[TOKYO] Japanese government advisors called for an increase in the minimum wage on Wednesday to boost consumer spending as part of a new package of structural reforms.
Prime Minister Shinzo Abe's government could decide how much it will raise the minimum wage before the end of the month as it compiles a set of policies to slow population decline, expand the labour force and meet its growth targets.
A large increase in the minimum wage could benefit low-income earners and counter criticism that the benefits of Mr Abe's plans to revitalise the economy have not trickled down to Japanese households that are most in need.
Private-sector members of the Council on Economic and Fiscal Policy, the government's top advisory panel, made the recommendation on the minimum wage and other policy steps at a meeting on Wednesday. "I want to lay the groundwork for these proposals to be put into place," Abe said at the meeting. "We need the private sector to increase capital expenditure and wages." Economics Minister Akira Amari, a central figure in economic policy, will use the panel's recommendations when deciding the structural reform package due later this month. "I do get a sense that the government is trying to make up for past mistakes," said Hiroshi Miyazaki, senior economist at Mitsubishi UFJ Morgan Stanley Securities. "During the first part of Abe's administration the government was more concerned about growth, but now the government is focusing more on employment and helping households." Raising wages is an urgent task for policymakers because they want consumer spending to drive domestic demand and pull the economy away from 15 years of deflation.
Japan's minimum wage differs by prefecture, but the highest minimum wage is 907 yen per hour payed to workers in Tokyo.
The minimum wage has been rising for the past few years, but Japan's rates are only slightly above the average for OECD members, and labour unions have argued for bigger increases.
Mr Abe, who took office late in 2012, met with initial success as his economic policies sparked a stock market rally and shareholders used their new-found wealth to fund a shopping binge.
However, average households started complaining that they were not benefiting.
An increase in the nationwide sales tax last year complicated the problem by causing low-income earners to cut back on spending, which triggered a recession.
A second sales tax increase is scheduled for 2017, and the government wants to avoid a repeat of what happened last year.
REUTERS

Myanmar President to meet Suu Kyi after final vote count

Myanmar President to meet Suu Kyi after final vote count

[YANGON] Myanmar President Thein Sein will only meet Aung San Suu Kyi after the final results of the Nov 8 election are tallied, following a request from the opposition leader for a sit-down to ensure the "people's will" is respected as the vote count drags on.
Three days after polls closed, the election commission has released results of less than 200 of the 498 seats in parliament being contested. Ms Suu Kyi's National League for Democracy has dominated the early returns. The commission has said counting could take a week or longer.
"The public has expressed their opinion," Ms Suu Kyi said in separate letters sent to Senior General Min Aung Hlaing, Thein Sein and parliament Speaker Shwe Mann. "It is important to implement the people's will in a peaceful manner for the sake of the country's dignity." The government will accept the outcome of the vote and will carry out the peaceful transfer of power at the appropriate time, Information Minister Ye Htut said in a written reply on behalf of Mr Thein Sein. The government would work with the NLD once the official results are released, the statement said.
Mr Shwe Mann said on his official Facebook page that he had received the letter and plans to meet Ms Suu Kyi next week to discuss national reconcilation. Mr Shwe Mann was ousted as leader of Thein Sein's Union Solidarity and Development Party in August.
BLOOMBERG

China's Postal Savings Bank nears US$8b stake sale ahead of IPO

China's Postal Savings Bank nears US$8b stake sale ahead of IPO

[HONG KONG] State-owned Postal Savings Bank of China (PSBC) is expected to unveil soon the sale of a 15 per cent stake to a group of investors for about US$8 billion, ahead of a planned IPO in Hong Kong in 2016, IFR reported on Wednesday citing people familiar with the plans.
UBS AG made the single largest investment in the group with US$2 billion and placed some of the shares with buyers including Hong Kong tycoons, added IFR, a Thomson Reuters publication. Other investors in the group included Singapore's Temasek Holdings, according to IFR, confirming a Reuters report from April.
JPMorgan and the International Finance Corp (IFC), a unit of the World Bank, also invested in the pre-IPO round. The initial public offering is expected to raise US$15-US$20 billion, IFR said.
REUTERS

Bank hedges hit record low as traders position for rate hikes

Bank hedges hit record low as traders position for rate hikes


[NEW YORK] Investors in US financial stocks are putting their faith in the Fed like never before as confidence grows that the day is drawing nearer when banks will benefit from higher interest rates.
Short interest in an exchange-traded fund tracking financial stocks in the Standard & Poor's 500 Index is the lowest in data going back to 2006, according to data compiled by Bloomberg and Markit Ltd. Traders are protecting less than ever against declines in financial firms as the Federal Reserve is seen as twice as likely to lift interest rates at its December meeting compared with just two months ago.
The positioning has been spurred by better-than-expected employment data and accelerating wage growth, two pillars of economic strength highlighted by the Fed as integral to a rate move. Higher lending rates will offer a way for financial firms to boost earnings after a challenging third quarter.
"Banks will see better fee income in a higher-rate environment, and that's what investors across the Street are looking at," said John Manley, who helps oversee about US$233 billion as chief equity strategist for Wells Fargo Funds Management in New York. "The Fed finally has the data to begin slowly raising interest rates, and that wasn't the case in September." Banks have already been climbing as the S&P 500 has rallied back from an August selloff. Financial-services stocks in the index have gained 10 per cent since Sept 28. They jumped 1.1 per cent on Friday after the biggest monthly surge in payrolls this year boosted the chances of a rate increase, and added 0.3 per cent at 9.35 am in New York.


Traders are now pricing in a 66 percent chance of a rate liftoff next month. That's up from about 50 per cent a week ago, before Fed Chair Janet Yellen said a December increase was a "live possibility" and the October jobs report came in stronger than expected. Previously, the highest probability of a rate hike going into a Federal Open Market Committee decision was on Sept 16, when traders saw a 32 per cent chance of an increase before the next day's meeting.
The Fed has long proclaimed itself data-dependent, and the increased expectation of higher rates has mirrored signs of a US recovery. The Citigroup US Economic Surprise Index, which gauges how much data is beating or trailing economists' estimates, was negative at the time of the Fed meeting in September. It's since climbed, edging into positive territory on Monday for the first time since January.
"We had a temporary slowdown in economic growth through the third quarter, and people are now thinking that might've just been a pause," said Bill Schultz, who oversees US$1.2 billion as chief investment officer at McQueen, Ball & Associates Inc in Bethlehem, Pennsylvania. "The pendulum has swung back towards the possibility of a rate hike." Bank earnings could use the boost that higher rates may bring, after a quarter in which bond trading revenue at the four biggest investment firms slumped 11 per cent.
Just 65 per cent of financial companies exceeded profit estimates in the third quarter, making the sector the third-worst performer out of the benchmark gauge's 10 main groups.  The industry's recovery from the August selloff has also trailed the overall market, with the return since Sept 28 ranking as the fourth lowest. Indeed, history may not favor financial shares before a potential December rate hike. The SPDR Financial Select Sector ETF has underperformed the broader SPDR S&P 500 ETF in 13 of the past 16 Novembers by an average of 2.2 per cent, according to data compiled by Bloomberg.
BLOOMBERG

China factory output, investment sluggish as old economy slows

China factory output, investment sluggish as old economy slows

[BEIJING] China's industrial production and investment slowed further in October, showing the government's pro-growth measures are yet to revive the nation's old economic engines. Retail sales defied the weakness, rising more than economists forecast.
Industrial output rose 5.6 per cent in October from a year earlier, the National Statistics Bureau said Wednesday, below the 5.8 per cent median estimate of economists surveyed by Bloomberg and compared with September's 5.7 per cent. Fixed-asset investment increased 10.2 per cent in the first 10 months, while retail sales climbed 11 per cent in October.
China's leaders are seeking to transition from an investment-driven, manufacturing-dominated economy to a more consumption and services-led one in the next five years while maintaining growth of at least 6.5 per cent a year. With the real estate sector stalling, manufacturing deteriorating, and inflation muted, policy makers are under pressure to step up stimulus as new growth drivers aren't picking up the slack quickly enough.
The better-than-expected economic growth figure last quarter "did not alleviate downside risks facing the economy," Liu Li-Gang, chief Greater China economist at Australia & New Zealand Banking Group Ltd. in Hong Kong, wrote in a note ahead of the data. Liu wrote that the central bank "will remain accommodative and keep market interest rates steadily low." The retail sales result compared with a median economist projection of 10.9 per cent. Wednesday is an annual e-commerce shopping bonanza known as Singles' Day in China. Transactions on this year's event passed 57.1 billion yuan (S$12.8 billion) before midday, eclipsing the 2014 mark with another 12 hours still to go.
China's consumer inflation waned in October while factory- gate deflation extended a record streak of negative readings, data Tuesday showed. That followed a tepid trade report suggesting the world's second-biggest economy isn't likely to get a near-term boost from global demand as overseas shipments dropped 6.9 per cent in October in dollar terms from a year earlier.
BLOOMBERG

Myanmar's Suu Kyi edges toward landslide victory

Myanmar's Suu Kyi edges toward landslide victory

[YANGON] Myanmar's democracy champion Aung San Suu Kyi moved closer to an absolute majority in the country's parliament on Wednesday and has made it clear she will wield it to run the country despite a constitutional ban on her becoming president.
Ms Suu Kyi's opposition National League for Democracy (NLD) has won over 90 per cent of the seats declared so far in the country's lower house and over 85 per cent in regional assemblies and the upper house, a triumph that will reshape the political landscape.
Under the constitution drawn up by Myanmar's former junta, Ms Suu Kyi is barred from the presidency because her children are foreign nationals, a clause few doubt was inserted specifically to rule her out.
But as the scale of her victory becomes clear, the Nobel peace laureate has struck an increasingly defiant tone on the charter's attempt to limit her power.
In interviews on Tuesday, she made it clear she would be calling the shots for a president chosen by her party, who would have no authority.
She told the BBC she would be "making all the decisions as the leader of the winning party" and Channel News Asia that the next president would have "no authority".
The ruling Union Solidarity and Development Party (USDP), which was created by the junta and is led by retired soldiers, has conceded defeat in a poll that was a milestone on Myanmar's rocky path from dictatorship to democracy.
To form Myanmar's first democratically elected government since the early 1960s, the NLD needs to win more than two-thirds of seats that were contested in parliament.
Results so far gave Suu Kyi's party 135 of 149 seats declared out of the 330 seats not occupied by the military in the chamber. Under the junta-crafted constitution, a quarter of the seats in both houses are unelected and reserved for the armed forces.
The NLD has said it is on course for over 250 seats in the lower house. Reuters was not able to independently verify the party's estimates of its own performance.
While the USDP has suffered a big defeat and the establishment shaken by the extent of Ms Suu Kyi's victory, the army remains a formidable power.
In addition to his bloc of parliament seats, the commander-in-chief nominates the heads of three powerful and big-budget ministries - interior, defence and border security - and the constitution gives him the right to take over the government under certain circumstances.
The military has said it will accept the outcome of the vote, but analysts say a period of uncertainty may be looming for former Burma because it is not clear if Ms Suu Kyi and the generals will be able to share power easily.
Military control of the country's pervasive bureaucracy through the interior ministry could provide a significant obstacle to the NLD's ability to execute policy. "So the first thing we must do is talk to the military," senior NLD leader Han Tha Myint told Reuters.
Ms Suu Kyi will face formidable challenges in power, including trying to put an end to decades of conflict with many of the country's armed ethnic groups. The government of President Thein Sein failed to do that despite protracted negotiations that led to a ceasefire with some groups.
The government's chief negotiator in peace talks with the ethnic groups, Aung Min, was among the high-profile establishment politicians that lost in the elections.
Aung Min was part of a powerful cabinet group closest to President Thein Sein, holding the office of minister in the president's office.
Sunday's vote was Myanmar's first freely contested general election since the military ceded power to a quasi-civilian government in 2011, ushering in reforms and opening up to foreign investors.
Money from abroad flowed in quickly as sanctions were eased. Foreign direct investment stood at US$8 billion in fiscal 2014/15, more than five times the flows recorded just two years earlier.
Washington welcomed the election as a victory for Myanmar's people, but said it would watch how the democratic process moved forward before lifting the remaining US sanctions on a country long considered a pariah.
US President Barack Obama has invested significant personal effort in Myanmar, visiting the country twice in the past three years, hoping to make its democratic transition a legacy of his presidency and an element of his strategic "pivot" to Asia.
Final results are due no later than two weeks after Sunday's poll.
REUTERS

Rabobank sees recovery in China offshore food and agri deals

Rabobank sees recovery in China offshore food and agri deals

[BEIJING] China's appetite for offshore investment in food and agriculture is expected to rebound from a lull that has delayed some deals, given strong interest to meet growing domestic demand, a leading banker said.
Confidence had stalled due to slower economic growth and ahead of the release of the government's new five-year plan but should recover quickly, Wilco Hendriks, Rabobank's chief executive for China, told Reuters. "There is a lot of appetite for our Chinese clients to make foreign acquisitions or partnerships," Mr Hendriks said.
Chinese interest in overseas food deals has grown rapidly in recent years, driven by demand for commodities, technology and quality brands to feed the country's 1.4 billion people.
China's outbound investment in food and agriculture hit US$8.8 billion dollars in 2014, according to Mergermarket, but has fallen to US$1.9 billion so far this year, although the number of deals has risen.
China's slowing economy and stockmarket turmoil had dented investor confidence, Mr Hendriks said.
"But if you look through that cycle, the fundamentals in our business remain solid. Maybe it will delay some acquisitions by six to 12 months but we are confident they will still happen."
State-owned agriculture companies and others with "indirect" state backing were also holding back while the government draws up its policy priorities for 2016-2020, but should resume buying once the 13th five-year plan is approved early next year, Mr Hendriks said.
The China-Australia Free Trade Agreement had boosted interest in Australian dairy, beef and sugar farms, while some investors were looking as far as Brazil for assets, he said.
Mr Hendriks said Dutch-based Rabobank, which has a global food and agricultural loan portfolio worth 92.3 billion euros (S$141 billion), also aimed to expand lending to China's smaller farms.
These often struggle to get financing because government-owned land cannot be used as collateral. "This is at an early stage but is one thing we are planning to do more," he said.
The bank was also still working closely with Agricultural Bank of China, despite selling off most of its stake earlier this year to reduce capital costs, he said.
REUTERS

Ousted Thai PM Yingluck defends rice scheme in open letter to junta leader

Ousted Thai PM Yingluck defends rice scheme in open letter to junta leader

[BANGKOK] Ousted Thai Prime Minister Yingluck Shinawatra sent an open letter to junta leader Prayuth Chan-ocha on Wednesday defending her position in a case involving rice subsidies that hemorrhaged billions of dollars and could see her jailed for up to 10 years.
Thailand's first woman prime minister faces criminal charges in the Supreme Court over her management of the rice scheme, a flagship election policy that helped sweep her to office in a landslide in 2011. She was banned from politics for five years in January after a military-appointed legislature found her guilty of mismanaging the scheme.
Yingluck, in a letter posted on Facebook, said that the attorney general was deliberately rushing the case against her and total losses caused by the rice scheme were still unknown.
The military government says the scheme was riddled with graft and incurred losses of US$16 billion. It distorted global prices and saw Thailand lose its crown as the world's number one exporter of the grain to India.
Yingluck, who has defended the scheme, said the case against her does not expire for another 15 years. "I insist that I am innocent and am ready to prove it," Yingluck said. "Rushing the legal process limits my chance to defend my position to the best of my abilities, which goes against basic human rights."
The Supreme Court has said it will review evidence and witnesses in the Yingluck case until November 2016 and has not yet set a trial date.
The rice subsidy scheme, which bought rice at above-market prices from farmers, left Thailand with around 13 million tonnes in stockpiles which the government is still struggling to shift.
Yingluck's government was toppled in a May 2014 coup which followed protracted political unrest in Bangkok.
Rivalry between the royalist-military establishment and the Shinawatra family, in particular Yingluck's brother, ousted populist premier Thaksin Shinawatra, has been at the heart of a decade of political turmoil in Thailand.
In September, Yingluck filed a criminal case against the attorney general alleging unfair handling of charges against her. The court threw the case last month, saying it found no evidence of abuse by prosecutors.
REUTERS

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