We need to find a fairer way of providing Goods and Services to the rest of the people on Earth.Cryptocurrencies and/or Gold Standard of money....maybe the answer to fight hyperinflation caused by too much printing of paper/fiat currencies by Governments and Central Banks all over the World. (https://nomorefiatmoneyplease.blogspot.com)
Shanghai bans top officials' spouses from running businesses
Shanghai banned spouses and children of senior officials from private business, making the Chinese financial hub the first to impose such strict controls over the family wealth of Communist Party cadres.
PHOTO: AFP
[SHANGHAI] Shanghai banned spouses and children of senior officials from private business, making the Chinese financial hub the first to impose such strict controls over the family wealth of Communist Party cadres.
Spouses of ministerial and provincial-level officials are prohibited from starting companies or getting involved in any business operations, according to regulations passed Monday at the Shanghai municipal government's general meeting. Children of local officials and their spouses cannot conduct business within Shanghai's jurisdiction. China treats the municipality of Shanghai as a province.
The ban also applies to spouses of senior officials in the local judicial system, heads of the state-owned companies based in Shanghai and district party chiefs. Their children and children's spouses are prohibited from operating businesses in the areas or jurisdiction they oversee to avoid potential conflict of interests, according to the rules, which were published on the Shanghai government's official Weibo account.
The regulations were first approved in late February at a meeting of a top reform group led by President Xi Jinping. Mr Xi, who was briefly Shanghai party boss before he assumed the mantle of Communist Party chief in November 2012, named Shanghai as the first place to experiment with such restrictions in March at the National People's Congress.
Relatives of senior officials have great potential for rent-seeking and other forms of corruption, Shanghai deputy party chief Ying Yong said Monday, according to the Weibo posting. The rules aim to make clear that officials need to choose between keeping their jobs and making money in the private sector, Mr Ying said.
Tsunami warning issued as magnitude 7.5 earthquake hits off PNG
[SYDNEY] A magnitude 7.5 earthquake struck off Papua New Guinea on Tuesday, triggering a tsunami warning for coastal communities.
The quake hit 137 kilometres south of Kokopo, the capital of East New Britain province that's home to about 26,000 people, according to the US Geological Survey. The Pacific Tsunami Warning Center said hazardous waves were possible for coasts within 300 km of the epicenter.
Papua New Guinea is in a zone where the Pacific, Indo- Australian and Philippine plates meet and constantly shift, sometimes causing earthquakes, some of them producing tsunamis.
Singapore perpetual bond investors hope "never" means three years
Singapore's richest investors are hoping that "never" means about three years in the bond market.
ST PHOTO: RUDY WONG
[SINGAPORE] Singapore's richest investors are hoping that "never" means about three years in the bond market.
Holders of perpetual notes with no set maturity face the island's first redemption options in September, when three companies including oil services firms Ezra Holdings Ltd and Swiber Holdings Ltd can choose to repay securities sold in 2012. While Ezra says it plans to pay off the notes and refinance, their yield has surged more than 200 basis points over the last year to 14.2 per cent, suggesting it may be costlier to replace them. Swiber faces the same test after saying it plans to redeem its bonds, which have added more than 230 basis points.
Private banks have snapped up the bulk of Singapore's S$9.5 billion (US$7.1 billion) of corporate perpetuals on behalf of wealthy clients, reckoning the companies would repay the notes at their soonest chance rather than incur higher interest rates when a so-called step-up coupon takes effect. While that would offer some compensation if the debt stays alive, any mishaps could shake faith in securities that have funded about 15 per cent of the island's corporate debt over the last four years.
If any issuers choose not to pay in September, "there would be some discomfort among investors when they realise that what they've been holding is not necessarily going to be paid off at the time they expected," said Vishal Goenka, the Singapore-based head of local currency credit trading at Deutsche Bank AG. "There is nothing right or wrong, issuers have already told them from the beginning the option was there, but there would be some confusion."
The absence of a maturity date means perpetuals usually offer higher yields than bonds with one. Companies are taking advantage of Singapore accounting rules that count the notes as equity and a tax law that exempts interest payments, while affluent local investors earning just 0.1 per cent from their cash deposits are lapping up the riskier investments.
"We intend to call the perpetuals in September 2015 and we are exploring a variety of refinancing options to do so," a spokesman from Ezra said by e-mail April 30. Swiber has "sufficient internal resources to redeem the perpetuals," the company said in an e-mail on the same day.
Ezra must repay a S$225 million bond due on Sept. 7, or 11 days before the call on its S$150 million of perpetual notes. The first securities were issued at a coupon of 5 per cent while the perpetuals offered a fixed return of 8.75 per cent. The offshore marine company had US$158 million of cash at the end of February, according to Bloomberg-compiled data.
Swiber reported an operating loss in 2014 and had US$166.3 million of cash at the end of the year. The company has a S$95 million bond due in June and an S$80 million perpetual paying 9.75 per cent that can be redeemed on Sept. 25.
The other call occurring that month is on Ezion Holdings Ltd.'s S$125 million perpetual bonds on Sept. 14. The marine logistics company's notes are trading above par.
The recurring payment on perpetuals lifts significantly after the date when the company is first allowed to buy them back. Investors often interpret that as a sign the bonds would be redeemed at their first call, according to Deutsche Bank.
If any company chooses not to redeem in September, the coupon for each note will rise by more than 300 basis points, according to data compiled by Bloomberg. That would still be lower than the current secondary yield on Ezra's and Swiber's perpetuals.
"Swiber has said they will call the perpetuals back by refinancing," said Chee Keong Yeak, an equity analyst at Maybank Kim Eng Securities in Singapore. "Right now, it seems like it depends on their relationship with the banks to get a lower yield to refinance the bonds."
In December 2008, Deutsche Bank irked global investors by not repaying perpetuals at their first call, citing high replacement costs. Over the following three days, a Bank of America Merrill Lynch index of riskier debt from some of the world's largest lenders lost 1.7 per cent. The Association of British Insurers called the bank's decision a "setback for the stabilisation of banking markets."
The lack of a perpetual's maturity date, in spite of the incentive to redeem at the first call, allows issuers to treat that debt as equity in their books, according to Choon Yuen Hui, who heads the debt capital markets practice at Singapore lawfirm Wong Partnership. That reduces the companies' leverage even as interest payments increase.
"If structured properly, accountants will be happy to treat such securities as equity," said Mr Hui. At the same time, the interest payments are tax deductible "in a manner no different from traditional bonds," he added.
Non-bank companies in Singapore have issued more than S$9 billion of perpetuals since April 2011, when waterworks firm Hyflux Ltd issued the first note. That's about 15 per cent of all corporate debt excluding government and banks issued in the period. The amount of notes that can be redeemed for the first time rises to S$1.1 billion next year and surges to S$4.9 billion in 2017.
"The impact on the market is hard to judge" if any issuers choose not to repay, said Dilip Parameswaran, the Hong Kong-based head of Asia Investment Advisors Ltd. "The Singapore dollar market is small and dominated by domestic institutional and retail investors. They may have invested based on an expectation of call, and may be disappointed if the bonds are not called."
As companies consider the cost of refinancing, he said, "if the secondary yields are higher than the step-up coupon, then it makes no sense for the company to call the perpetual."
Indonesia economy seen slowing further in Q1, highlights Widodo's challenge
Indonesia's economy is expected to have slowed further in the first quarter as falling exports, weak domestic consumption and policy inertia raise doubts about President Joko Widodo's promise to spur a revival in growth and investor confidence.
PHOTO: REUTERS
[JAKARTA] Indonesia's economy is expected to have slowed further in the first quarter as falling exports, weak domestic consumption and policy inertia raise doubts about President Joko Widodo's promise to spur a revival in growth and investor confidence.
Jakarta's benchmark stock index has dived 5.5 per cent over the past week as corporate earnings have lagged expectations, while the rupiah is down around 5 percent this year - the worst performance among emerging Asian peers.
Analysts are suitably downbeat on Southeast Asia's biggest economy, with a Reuters poll of 18 analysts predicting Tuesday's gross domestic product (GDP) data to show growth of 4.95 per cent in the first quarter, compared with 5.01 percent year-on-year in October-December quarter.
"The effects of lower commodity prices will have continued to feed into the real economy in Q1, and relatively high interest rates are also applying a brake," said Dan Martin, economist at Capital Economics in Singapore.
A raft of key indicators have raised concerns about the outlook, with the Reuters poll forecasting full-year 2015 growth at 5.3 per cent, below the government's 5.7 per cent target.
Domestic consumption remains weak, while the collapse of commodity prices have seen exports slumping 11.67 per cent in the first quarter year-on-year. Imports also fell 15.10 per cent.
That has sapped Indonesia's manufacturing sector, where activity shrank for the seventh straight month in April as export orders continued to decline and domestic demand remained weak, an HSBC Markit survey showed on Monday.
One bright spot is the upturn in foreign direct investment (FDI) in the first quarter, but falling cement sales seem to indicate that overall investment remains sluggish.
While the economy is struggling to motor on after slowing to 5-year lows in 2014, the danger of capital flight as the US Federal Reserve moves to raise rates later this year is limiting Indonesia's policy options.
Annual inflation in April, meanwhile, ticked up to 6.79 per cent, from 6.38 percent in March - another factor likely keeping the central bank sidelined for now after it cut rates in February by 25 basis points to 7.50 per cent.
President Widodo who came to power six months ago with strong business-friendly credentials and a promise to beef up the country's creaking infrastructure, has been hamstrung by rifts inside his own political party and squabbles between government agencies.
While Mr Widodo has slashed fuel subsidies and freed up billions of dollars for long-neglected capital spending, many infrastructure projects are tied up in red tape. "The president's plans to ramp up infrastructure are encouraging, but it will be a while before projects get off the ground. There's a danger that growth will get stuck below 5 percent over the coming quarters," Capital Economics' Martin said.
The tide of negative trends has prompted Finance Minister Finance Bambang Brodjonegoro to acknowledge that growth this year could slow to 5.2 per cent, the first time he's conceded that the official target could be missed.
Google acquires startup Timeful to help with smoother scheduling
Google Inc. is acquiring startup Timeful Inc to make it easier to schedule everything from phone calls to workouts as it looks to improve its mobile services.
PHOTO: REUTERS
[SAN FRANCISCO] Google Inc. is acquiring startup Timeful Inc to make it easier to schedule everything from phone calls to workouts as it looks to improve its mobile services.
Terms weren't disclosed. Timeful's software - which helps users organise items by understanding scheduling, habits and needs - could be used to improve Google's mobile e-mail software, calendar, and other services, the Mountain View, California-based company said in a blog post today on its site.
Google is investing in mobile services as it looks for new ways to attract users and advertisers. Last month, the company updated its main search feature to favor websites that are tailored to smartphones. Backers of Timeful include Kleiner, Perkins Caufield & Byers and Khosla Ventures.
"We're still inundated with too many updates, information and everyday tasks," Google said in its post. "You can tell Timeful you want to exercise three times a week or that you need to call the bank by next Tuesday, and their system will make sure you get it done based on an understanding of both your schedule and your priorities."
