In Tuesday's Asia papers

A summary of political, economic, trade, business and product news affecting the chemical and related industries.

 

Saddam capture has fleeting effect on markets

The capture of ex-Iraqi dictator Saddam Hussein provided an initial boost to global financial markets, but the euphoria proved short-lived. Markets were jolted back to reality after two deadly car bombs in Iraq dashed any hopes of a swift end to insurgency blighting US-led occupying forces and efforts to rebuild the country's ramshackle oil industry. On Wall Street, an early stock rally ran out of steam, leaving the major indexes lower at the close of trade. Oil prices were mixed as traders feared more sabotage attacks on the oil industry. But for the oil markets, the bottom line concerned implications for Iraqi production and exports, analysts added. The dollar enjoyed only a brief reprieve as players chose to concentrate on the weak sentiment plaguing the currency, allowing the euro to hit a fresh high. Against the Japanese yen the dollar slipped to 107.54 from 107.86 on Friday (12 December). Markets in Asia were among the first to respond to news that an eight-month manhunt for the 66-year-old ex-dictator had finally come to an end after Saddam was discovered on late Saturday (13 December) hiding in a hole near his hometown of Tikrit. Japanese share prices soared 3.16% to a five-week high of 10 490.77 points.

Channel News Asia, Singapore (online edition)

Nihon Keizai Shimbun, Japan (online edition)

Business Day, Thailand (online edition)

Russian PM in Tokyo to discuss trade, oil

Russian Prime Minister Mikhail Kasyanov arrived in Tokyo on Monday (15 December) for a three-day visit for talks with top Japanese officials on trade and energy, including a potential pipeline to bring Siberian oil to Japan. Russia is being lobbied by both China and Japan over competing pipeline projects: one to carry crude oil from Siberia to Daqing in China and the other flowing to the Russian Pacific port of Nakhodka to provide oil to Japan and other Asian markets. Kasyanov, who is charged mainly with economic affairs, said last week that he wanted to see if Japanese firms would invest in surveys on the size of oil reserves to be exploited for the pipeline. He met Foreign Minister Yoriko Kawaguchi and is scheduled for meetings with Prime Minister Junichiro Koizumi and Trade Minister Shoichi Nakagawa on Tuesday. He will also hold talks with executives of the Japan Business Federation and other business leaders in charge of energy and Russian affairs. On Wednesday (17 December), he will travel to Kyoto to meet business leaders. A senior Russian diplomat said that Kasyanov would limit political discussions to counter-terrorism, the Iraq situation and the North Korean nuclear crisis.

Straits Times, Singapore (online edition)

Nihon Keizai Shimbun, Japan (online edition)

Beijing issues first ever list of terror groups

China has issued its first ever list of 'terrorist' groups, blaming them for a series of bombings and assasinations and calling for international assistance to wipe them out. The groups are accused of trying to create an independent Islamic state called 'East Turkistan' in northwest China's Xinjiang region, which is populated by the Turkish-speaking Uighur Muslims. East Turkistan forces inside and outside China have long plotted and executed a series of bombings, assasinations, arsons, poisoning attacks and other activities in Xinjiang and elsewhere in China, said Ministry of Public Security official Zhao Yongshen. He called for help from countries where the groups operate. The groups identified were the Eastern Turkistan Islamic Movement, the Eastern Turkistan Liberation Organization, the World Uighur Youth Congress and the East Turkistan Information Center. Zhao declined to name the countries China wants to target for assistance, but the statement said some of the groups and their leaders have operated out of Germany and Turkey.

Channel News Asia, Singapore (online edition)

China Daily, China (online edition)

China FDI falters but retail sales robust

Foreign direct investment (FDI) in China plunged in November from a year ago, but pledges of future funds ballooned as investors still piled into the world's fastest growing major economy. Retail sales also showed healthy annual growth in November, giving hope that consumers could begin to drive economic growth next year as domestic investment trickles off. China drew $3.6bn (Euro2.1bn) in FDI in November, down 39% from a year earlier, the Commerce Ministry said on Monday (15 December). But contracted foreign investment, an indicator of future trends, was $11.8bn, up by 68.6% from the same period last year. FDI flows into China often see sharp swings from month to month, as illustrated this year by June's eye-popping $7bn figure that was followed by just $3.1bn in July. With cheap labour and a vast potential market, China overtook the US last year as the world's top target of foreign investment, pulling in nearly $53bon. In one of November's biggest deals, the world's fifth-largest retailer, Germany’s Metro, said it will invest $700m to open 40 new stores across China over the next five years.

Business Day, Thailand (online edition)

China Daily, China (online edition)

Channel News Asia, Singapore (online edition)

New policies to develop Chinese auto sector

China is set to launch new policies to better control the development of the automobile sector in hopes of curbing a seriously overheated market, state press has reported. The new policies will change rules that are not in line with the principles of the World Trade Organisation, the 21st Century Business Herald reported, citing an official with the State Development and Reform Commission (SDRC). Governments at all levels should neither build nor upgrade automobile projects using fiscal funds, while commercial banks will refuse loans to unqualified auto investment projects, it said. Local land administrators should also strengthen land management for designated auto factories and all auto manufacturers should follow the regulation system to win investment. SDRC director Ma Kai said that while the fast development of China's automobile industry was good for other industrial area such metallurgy, iron and steel, there was concern about investment flooding into the sector. China is expected to produce a total of 4.2m vehicles this year. China's current total vehicle production capacity is 5.5m units but is expected to increase by more than 6m units over the next five years with planned investment of over Rmb200bn ($24bn/Euro19bn).

Channel News Asia, Singapore (online edition)

China Daily, China (online edition)

Korean politician admits illegal fundraising

South Korea's failed conservative presidential candidate Lee Hoi-Chang has confessed to illegal campaign fundraising and said he deserved to go to prison. Lee turned himself in to prosecutors after confessing in a televised news conference that he had collected some Won50bn ($42m/Euro34m) in illegal funds from major business groups to finance his failed election campaign last year. Lee's confession came a day after President Roh Moo-Hyun said that he would resign if the inquiry revealed his aids had accepted more than one tenth of the illegal funding received by the main opposition Grand National Party. State prosecutors have combed the books of giant business corporations for months seeking evidence of illgel political funding and the GNP has been at the forefront of the investigation. However, the party, insisting it cannot trust prosecutors to conduct a fair inquiry has appointed a special counsel to probe the affair. The probe has uncovered the corrupt nexus between big business and political parties that characterise South Korean political life. Businesses fear that without contributions they would be subject to punitive tax demands or attacks in parliament.

Channel News Asia, Singapore (online edition)

Korea Herald, South Korea (online edition)

India expects strong economic growth in '03 

The Indian economy is showing strong economic growth for 2003. Good monsoon rains and improved sentiment in the stock markets have prompted the central bank to raise the country's growth forecast for fiscal 2003/2004. The Indian economy is now expected to expand between 6.5 and 7% and the uptrend may continue for several years to come. India's economy benefited from a host of feel-good factors in 2003. Everything from the weather to businesses to the stock markets have made investors increasingly bullish about the overall economy. Forex reserves are already at a historic peak of $92.6bn (Euro75.0bn). But the thing to watch going forward is the privatisation of state-linked companies. Some progress was made in 2003, with the disinvestment of firms. However, the Supreme Court recently stopped the sale of the two state firms in the oil sector: Hindustan Petroleum and Bharat Petroleum. That came as a rude shock, raising fears that the government's privatisation efforts may be stalled. What is needed for the coming year is a second generation of financial reforms, to accrue the full benefits of the first generation of reforms.

Channel News Asia, singapore (online edition)

Singapore's labour market on the mend

After waves of job losses, the labour market is finally showing signs of recovery with better job prospects in the next six months. The latest figures from Ministry of Manpower (MOM) show that the turnaround was brought about by the return of more service jobs as Sars-affected companies re-started their hiring engines. Hoteliers and caterers are the most upbeat, with many expecting to increase headcount, bolstered by a rise in tourist arrivals and year-end festivities. Such optimism also spilled over to the manufacturing sector, as job shedding appeared to have bottomed out. Spurred by the recovery in the US economy and higher demand for electronics products, companies are now looking to increase their staff numbers towards the year end. Buoyed by a strengthening economy, employment grew by 3025 in the services sector from June to September; the manufacturing sector recorded the smallest job loss in nearly three years at 2125. But despite the job gains, unemployment jumped to a 17-year high of 5.9% in the Q3, as more people, attracted by better prospects, started to look for work again. While the labour market has shown signs of 'incipient improvement', the MOM also warned that it would take some time before it would recover fully.

Straits Times, Singapore (online edition)

Thai economy is best in Asia after China

 

 

The Ministry of Commerce said on Monday (15 December) it might scrap a plan to buy Airbus planes if Thailand continues to be treated unfairly by the European Union (EU) when it comes to the import of frozen prawns. Commerce Minister Wattana Muangsuk said that the EU has created a trade barrier that singles out frozen prawns from Thailand, adding the country might decide to buy Boeing aircraft instead. The EU has sets an import tariff on frozen prawns from Thailand that amounts to 12%, while the import tax is only 4% for prawns from Malaysia, he said, noting that the economies of the southeast Asian neighbours are not much different. Thai Airways is now in talks to buy 15 more aircraft for its fleet after the Cabinet approved an additional investment budget for the national flag carrier to buy 17 planes, two of which have already been handed over. Of the remaining 15, Thai Airways plans to buy eight from Airbus and seven from Boeing, although the purchasing agreements have yet to be signed. The EU recently imposed stricter inspection measures on frozen prawns from Thailand, citing the fact that the particular product has been found to be contaminated by toxic residue. It also imposed a higher import tariff , weakening Thailand’s competitiveness in the EU.

 

 

 

 

As part of the government's effort to deregulate drug sales, Health Minister Chikara Sakaguchi is considering relabeling certain drugs as quasi-drugs so that convenience stores and other non-pharmacies can market them. Sakaguchi will present the plan to a health ministry panel meeting scheduled for Tuesday. Under the Pharmaceutical Affairs Law, only pharmacies and licensed drug marketers are allowed to sell pharmaceutical products. In April 1999, however, the Health Ministry allowed convenience stores and other retailers besides drug stores to sell health drinks by reclassifying them as quasi-drugs. Currently, ointment products for rashes and inflammation, among other products, are sold as quasi-drugs. Manufacturing quasi-drugs requires government approval, but their sales are not regulated.

 

 

Japanese unit to sell Parkinson's treatment

Nippon Boehringer Ingelheim in January will release a new therapeutic for Parkinson's disease that treats the symptoms but poses less risk of side effects. In step with the release of BI Sifrol, the Japanese arm of German pharmaceutical giant Boehringer Ingelheim will also create a team of some 70 medical representatives who will specialise in promoting drugs for the treatment of central nervous system disorders. An estimated 140 000 people suffer from Parkinson's disease in Japan, and the annual market for therapeutics is currently estimated to be worth Yen55bn ($514m/Euro416m).

 

Indonesian gas shares flare in IPO

Shares of Perusahaan Gas Negara (PGN), Indonesia's state-controlled gas distributor, rose as much as 17% in their debut on the Jakarta Stock Exchange after a $263m (Euro213m) share sale, the country's second-biggest this year. The shares rose Rp50, or 3%, to Rp1550 on Monday (15 Decembera) afternoon, paring earlier gains, from the offer price of Rp1500. PGN's listing comes as the benchmark stock index rose 63% in dollar terms this year, on optimism that lower interest rates and a strengthening currency would boost profit. The initial public offering (IPO) is part of the government's effort to help fund a budget deficit estimated at Rp34.4trn ($4.05bn/Euro3.28bn) this year. PGN will use the funds it raised to help pay for a 180-kilometre pipeline linking Grissik in South Sumatra to West Java.

Business Day, Thailand (online edition)

Jakarta Post, Indonesia (online edition)

Gasoline prices rise at pump

PTT, Thailand's oil and gas conglomerate, on Monday (15 December) raisedthe retail price of gasoline by Baht0.30/litre. Premium oil is Baht17.29/litre, regular oil Baht16.49, while the price of crude oil remains unchanged at Baht14.39. Senior executive vice-president Apisith Rujikeatkamjorn said the increase followed a global rise in the price of both premium and crude oils due to high consumption in the US because of a severe winter there and prospects of a cut in crude oil supply by the Organisation of Petroleum Exporting Countries early next year.

Business Day, Thailand (online edition)

(Some stories may not appear in all editions of the cited news media.)