India names 20 cities for US$7.5b smart makeover

India named 20 cities on Thursday which it says will be provided with uninterrupted power and water supplies, proper sanitation and public transport in a US$7.5 billion makeover to turn them into smart cities with living standards comparable to Europe. 

PHOTO: EPA

JAN 28, 20169:32 PM

[NEW DELHI] India named 20 cities on Thursday which it says will be provided with uninterrupted power and water supplies, proper sanitation and public transport in a US$7.5 billion makeover to turn them into smart cities with living standards comparable to Europe.

India's cities lack basic infrastructure such as toilets and are bursting at the seams with the influx of tens of thousands of people from the countryside. Thirteen of them are in the WHO's list of the 20 most polluted cities in the world, topped by the capital New Delhi.

Prime Minister Narendra Modi has vowed to create 100 new smart cities by 2022 that will have internet connectivity, e-governance along with quality infrastructure such as waste management and efficient public transport.

The plan is also intended to boost investment and create jobs for millions of people, but it has faced criticism for being a slow starter.

The federal government has struggled to pass reform legislation making it easier to acquire land and build roads and it was not immediately clear how it would be able to provide high-quality infrastructure to these cities within five years.

On Thursday, Urban Development Minister Venkaiah Naidu named the first set of cities that will be targeted for a transformation.

These include Chennai in the south, which was ravaged by floods last year because of flawed urban planning, as well as a part of New Delhi. Other proposed smart cities are the tourist destinations of Jaipur and Udaipur and Bhubaneswar in the east. "This game-changing mission marks the end of a business-as-usual approach," Naidu told a news conference. About 35 million people live in the 20 cities.

REUTERS

   
 

US fed funds rate steady after FOMC statement

The US interest rate that the Federal Reserve targets held at 0.38 per cent for a fourth consecutive day on Wednesday after the central bank as expected left policy rate unchanged, according to Fed data released on Thursday. 

PHOTO: AFP

JAN 28, 20169:39 PM

[NEW YORK] The US interest rate that the Federal Reserve targets held at 0.38 per cent for a fourth consecutive day on Wednesday after the central bank as expected left policy rate unchanged, according to Fed data released on Thursday.

The average, or effective, fed funds rate, traded in a range of 0.33 per cent to 0.56 per cent for a third consecutive day.

On Wednesday, the Federal Open Market Committee, the Fed's policy setting group, to leave its target range on the fed funds rate at 0.25-0.50 per cent after raising it from zero to 0.25 per cent in December.

REUTER
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US jobless claims fall more than expected

The number of Americans filing for unemployment benefits fell from a six-month high last week, suggesting the labour market recovery remains intact despite a sharp stock market sell-off and signs the economy has lost significant momentum. 

PHOTO: AFP

JAN 28, 20169:43 PM

[WASHINGTON] The number of Americans filing for unemployment benefits fell from a six-month high last week, suggesting the labour market recovery remains intact despite a sharp stock market sell-off and signs the economy has lost significant momentum.

Initial claims for state unemployment benefits dropped to a seasonally adjusted 278,000 in the week ended Jan 23 from 294,000 the prior week, the Labour Department said on Thursday.

Economists polled by Reuters had forecast claims falling to 282,000 in the latest week. Claims have been volatile in recent weeks because of difficulties adjusting the figures to account for seasonal fluctuations.

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US durable goods orders plunge in December

New orders for long-lasting US manufactured goods tumbled in December as lower oil prices and softer global demand put more pressure on factories, the latest sign that economic growth weakened significantly at the end of 2015. 

PHOTO: AFP

JAN 28, 20169:46 PM

[WASHINGTON] New orders for long-lasting US manufactured goods tumbled in December as lower oil prices and softer global demand put more pressure on factories, the latest sign that economic growth weakened significantly at the end of 2015.

The Commerce Department said on Thursday that durable goods orders declined 5.1 per cent last month, likely also weighed down by a strong dollar, after slipping 0.5 per cent in November.

Economists polled by Reuters had forecast durable goods orders, which cover goods meant to last three years or more ranging from toasters to aircraft, falling 0.6 per cent last month.

REUTERS

China export threat to europe jobs needs deeper probe, EU says

JAN 29, 201612:14 AM

[BRUSSELS] European Union Trade Commissioner Cecilia Malmstroem said she's looking more deeply into the potential threat to jobs in Europe of lowering EU tariffs on Chinese goods such as steel.

The remark highlights reservations in the 28-nation EU about recognizing China as a market economy 11 months before a deadline for a European decision on the matter. Such a step would make it more difficult for manufacturers in Europe such as ArcelorMittal to win sufficiently high EU duties meant to counter alleged below-cost - or "dumped" - imports from China.

"We are running now a quite advanced impact assessment," Malmstroem told a conference on Thursday in Brussels. "It's still quite premature to say too much." The European Commission, the EU's executive arm, held an initial debate two weeks ago on whether to recommend that the bloc recognize China as a market economy and signaled it would return to the issue around mid-year. Any proposal from the commission would need the approval of EU national governments and the European Parliament.

Beyond being a political prize that Beijing is lobbying for, market-economy status for China would ensure the EU uses Chinese data for trade investigations affecting the country. The bloc currently uses other nations' figures to calculate anti- dumping levies against China on the grounds that Chinese state intervention artificially lowers domestic prices and makes them an unreliable indicator of a good's "normal value." This practice results in higher EU duty rates against Chinese exporters.

Under the agreement that led China to join the the Geneva- based World Trade Organization in 2001, WTO members pledged to scrap in December 2016 a shortcut for applying a non-market economy standard in calculating anti-dumping duties on China. At the same time, this development won't grant China blanket status as a market economy.

"It's not only a technical decision," Malmstroem said.

"It is also an economic and increasingly a political and social decision that needs to be made." She said that "huge" over-capacity at China's steel mills has led to Chinese dumping in Europe and that part of the European industry is "under a lot of stress." Job losses at EU steel companies are politically sensitive in Europe, according to Malmstroem.

"It's a very emotional debate in many countries," she said. "This is of course a very important social situation." Malmstroem said there is an "urgent need to adjust supply" in China, which accounts for about half of global steel production and posted its slowest economic growth in more than two decades in 2015. The Chinese government on Jan. 24 pledged steel-capacity cuts.

BLOOMBERG

    
 

Japan's Economy Minister is resigning over bribery allegations

• Stanley White and Leika Kihara, Reuters

• 5h
• 345

REUTERS/Yuya ShinoJapan's Economics Minister Akira Amari speaks during a news conference in Tokyo, Japan, January 28, 2016.

TOKYO (Reuters) - Japanese Economy Minister Akira Amari said on Thursday he was resigning to take responsibility for a political funding scandal that has rocked the government, but denied having taken bribes.

In a packed news conference televised live, Amari acknowledged taking money from a construction company executive but said he told his aides to correctly record them as a political donation.

While asserting his legal innocence, Amari, a key player in Prime Minister Shinzo Abe's policy team, said he was stepping down to prevent the scandal from being a distraction to his administration's drive to pull the country out of deflation.

"Japan is finally emerging from deflation," he said. "We need to pass legislation through parliament for steps to beat deflation and create a strong economy as soon as possible."

"Anything that hampers this must be eliminated, and I'm no exception. I, therefore, would like to resign as minister to take responsibility" for what he said his aides had done.

Part of the money has gone missing because of mishaps by his secretaries, Amari said, but two of them have resigned and he must take responsibility as their supervisor.

Just hours before the news conference, Amari had said he would fulfill his duties as minister "with utmost effort".

Last week, Japanese magazine Shukan Bunshun published an article accusing Amari and his aides of accepting money from an unnamed construction company in exchange for helping that firm receive government compensation for disputes over land ownership and waste removal at a public works site.

Amari is a close ally of Prime Minister Shinzo Abe and core member of his policy team. Amari has played a leading role in the prime minister's economic policies, and led Japan's negotiations for the Trans-Pacific Partnership free trade bloc.

The accusations on bribery come at a sensitive time because policy makers are already grappling with a stock market sell-off, a rising yen and worries about a weakening global economy.

(Additional reporting by Kaori Kaneko; Editing by Chang-Ran Kim, Ryan Woo and Jacqueline Wong)

Read the original article on Reuters. Copyright 2016. Follow Reuters on Twitter.

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China floods financial system with $52 billion to boost liquidity

• AFP

• 6h
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© AFP Mark RalstonSome analysts say the recent cash injections by China's central bank (pictured) are a replacement for monetary easing.

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Shanghai (AFP) - China's central bank said on Thursday it was funnelling 340 billion yuan ($52 billion) into the financial system, the second injection in three days to meet surging demand for funds ahead of the Lunar New Year holiday.

On Tuesday, the People's Bank of China (PBoC) poured 440 billion yuan ($67 billion) into the system through regular open market operations, which Bloomberg News said was the biggest in three years. 

Chinese companies typically pay salaries and bonuses before the holiday, which falls in early February this year. People also traditionally exchange cash and gifts during the period.

The PBoC last week flooded the financial system with more than 1.5 trillion yuan.

Some analysts say the recent cash injections are a replacement for monetary easing as the PBoC has become reluctant to cut reserve requirement ratios -- the proportion of money banks must put aside -- on worries over the impact on China's yuan currency, which has been weakening.

China's economy grew at its slowest rate in a quarter of a century in 2015, at 6.9 percent, raising expectations for further cuts in interest rates or reserve requirements.

"The huge amount of open-market injections are targeting the pre-holiday cash demand," Liu Changjiang, a Shanghai-based bond analyst at Soochow Securities, told Bloomberg.

"As the central bank has become less willing to cut reserve requirement ratios, such short-term funds are only keeping the money market tightly balanced."

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Most of China's regional provinces have lowered their 2016 growth targets

• David Scutt, Business Insider Australia
 

• 8h
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REUTERS/China DailyA farmer drives his buffalo to plow a paddy field in Daxiang village of Liuzhou, Guangxi Zhuang Autonomous Region, China, July 30, 2015.

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Setting the tone for a lower national target, most Chinese provinces have lowered their GDP forecasts for the year ahead.

According to the state-runPeople’s Daily newspaper, 15 provinces lowered their 2016 forecasts while six were left unchanged. 3 provinces in the nation’s Northeast raised their 2016 targets.

According to Lian Ping, chief economist of Bank of Communications, the lowered growth targets reflects the likelihood that China’s government will push ahead with plans to curb overcapacity in the nation’s industrial sector, impacting those provinces in China’s Northeast the hardest.

“This year the central government will focus on reducing production capacity, which will bring a lot of pressure on northeastern and central-western regions,” Lian said.

Along with lowering growth forecasts, the People’s Daily suggest that local governments will put more emphasis on the quality of growth achieved, rather than just the rate.

Many are also adopting range-based targets rather than a single figure.

Lian suggests this approach has been adopted for two reasons.

Firstly, it will allow for more flexibility given increased levels of uncertainty and secondly, it will allow for provinces to shift their focuses to capacity reduction and structural adjustment.

China’s Communist Party will announce its national growth target, along with inflation and money supply growth, at the National People’s Congress in March.

The vast majority of analysts believe that the headline GDP figure will be between 6.5% to 7.0%.

You can read more here. 

Read the original article on Business Insider Australia. Copyright 2016.

BRITAIN HITS — UK GDP growth in-line at 0.5%

• Oscar Williams-Grut
 
•  

• 6h
• 81

REUTERS/Fabrizio BenschChancellor George Osborne.

The UK's fourth quarter GDP growth just came in at 0.5% — in line with forecasts.

Economists forecasted quarter-on-quarter growth of 0.5%, up from 0.4% in the third quarter. The 0.4% figure was a downward revision from an earlier 0.5% estimate and even that 0.5% figure was a big miss to forecasts.

The mild pick up is will be welcomed by Chancellor George Osborne. 

Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said the weaker than expected third quarter GDP reading could be "the start of a pronounced slowdown." While today's figure is by no means a full rebuttal, it shows the third quarter slump could just be a blip that is reversing.

But disappointingly for Osborne, all the fourth quarter growth came from the service sector, as the chart below shows. Since coming to power in 2010, Osborne has been trying to "rebalance" the economy away from services, which includes everything from waitressing to banking.ONS

Year-on-year fourth quarter growth was 1.9%, in-line with forecasts and down from 2.1% in the previous three months.

Samsung Electronics' Q4 earnings sink 40 percent

• Youkyung Lee, Associated Press

• 10h
• 299

Thomson ReutersSamsung flags are set up at main entrance to Berlin fair ground

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SEOUL, South Korea (AP) — Samsung Electronics reported Thursday a bigger-than-expected decline in fourth quarter earnings as its mainstay smartphone and semiconductor businesses suffered from weakening global demand for consumer electronics.

The South Korean company also warned a recovery in profit is unlikely during the first half of this year due to a tough business environment.

Samsung's net profit for the October-December period plunged 40 percent from a year earlier to 3.2 trillion won ($2.7 billion).

The result fell short of expectations, even after considering the negative impact from foreign currency exchange rates estimated at 400 billion won. A survey of analysts by financial data provider FactSet forecast net profit of 5.1 trillion won.

Sales edged up 1 percent to 53.3 trillion won for the quarter. Operating income rose 16 percent to 6.1 trillion won, in line with Samsung's earnings preview earlier this month.

The latest results reflect additional challenges for Samsung as its semiconductor business, which helped offset declining earnings from smartphones since mid-2014, joined the mobile division in a profit slowdown.

Weakening global demand for smartphones and other consumer electronics products is taking a toll on Samsung's sales of mobile components to companies such as Apple, as well as sales of Samsung's own mobile devices.

The company is the world's largest maker of memory chips that are used in PCs and mobile devices. It is also the world's largest maker of smartphones and television sets.

For the full year, it earned 19.1 trillion won ($15.8 billion), down 19 percent from the previous year and the lowest level in four years. It was the second year in a row with a decline in annual net income after the company's earnings peaked at 30.5 trillion won in 2013.

Thomson ReutersThe logo of Samsung Electronics is seen at the company's headquarters in Seoul

During the final quarter of 2015, the semiconductor business reported its first quarter-over-quarter profit decline in more than one year. It logged 2.8 trillion won in operating income, about 25 percent lower than the previous quarter but slightly higher than a year earlier.

In addition to the softer global demand for mobile devices and PCs, an oversupply of memory chips that pushed down prices also drove the weaker-than-expected profit growth.

The mobile phone business posted its second straight quarterly profit decline with 2.2 trillion won in operating income. Even though Samsung rolled out its high-end smartphones sooner than usual, including the Galaxy Edge series with curved displays, they failed to increase premium smartphone shipments as consumers flocked to cheaper smartphones.

Samsung is not the only smartphone maker struggling to increase sales of premium smartphones. Apple, which reported earnings earlier this week, forecast its first year-over-year sales decline in 13 years.

The maker of Galaxy smartphones will likely not see a revival in its profit anytime soon.

"It would be a challenge to maintain the 2015 operating profit level as we expect weak macroeconomic conditions and the IT demand to persist during the first half," Robert Yi, a senior vice president at Samsung, said on a conference call.

"However, we expect the business conditions to improve in the second half driven by the strong seasonality in set businesses," he said referring to mobile phones, home appliances and TVs.

Apparently aware of growing pressure to seek new revenue sources, Samsung gave out some hints about its future plans. It pointed to transparent, mirror, automotive and flexible displays as future display business areas. And it singled out home and health as areas it will initially focus on with Internet-connected gadgets and home appliances.

Samsung reiterated its promise to increase shareholder returns and announced an additional plan to buy back and cancel shares. But the move did little to shore up its share price. After the earnings release, the company's shares traded 3 percent lower.

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