Asia

Growth in Chinese manufacturing activity slowed this month for the first time since July, an industry survey showed, but the reading remained relatively strong and analysts predicted further inflation-fighting measures from the government like interest-rate increases and currency appreciation, the Wall Street Journal reported today. The HSBC China Manufacturing Purchasing Managers Index, a monthly gauge based on a survey of executives, also showed that prices for factory inputs rose in December at their slowest rate in three months.
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Indonesia said that it will tighten rules on banks’ foreign-exchange holdings and overseas borrowing to cope with capital inflows that have pushed up inflation and strengthened the rupiah this year, Bloomberg News reported today. Bank Indonesia will also reintroduce a 30 percent cap on lenders’ short-term overseas borrowing to minimize the risk of sudden capital outflows, it said yesterday. Banks must set aside 5 percent of their total foreign-exchange holdings as reserves as of March 2011, from 1 percent currently, Deputy Governor Budi Mulya said yesterday.
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China’s commerce ministry announced a steep reduction in export quotas yesterday for rare earth metals in the first months of next year, a move that threatens to cause further difficulties for manufacturers already struggling with short supplies and soaring prices, the New York Times reported today. China mines more than 95 percent of the global supply of the metals, which are essential for smartphones, electric cars, many computer components and a range of military hardware.
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Indian mergers and acquisitions in 2011 may surpass this year’s record $71 billion of deals, led by oil and gas, metals and mining companies, according to M&A bankers, Bloomberg News reported today. Billionaire Sunil Mittal’s $10.7 billion acquisition of mobile-phone operators in Africa led an almost four-fold increase in takeovers this year as deals surpassed 2007’s $69 billion, according to data compiled by Bloomberg.
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Vietnam's nearly-bankrupt shipbuilder Vinashin yesterday said that it will be allowed to take out interest-free loans, in another concession after it reportedly defaulted on a debt to international lenders, Agence France-Presse reported, according to Dow Jones Daily Bankruptcy Review today. Vinashin said Prime Minister Nguyen Tan Dung had authorized companies, workers, and former employees of Vinashin group to borrow money at zero percent interest from the state-owned Development Bank of Vietnam.
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Japan Airlines Corp. is privately placing stock with its top executives as the bankrupt carrier looks to boost accountability and reduce its tax burden, the Nikkei reported today, according to Reuters. About two dozen top executives, including President Masaru Onishi, took part in a recent offering, with each investing several hundred thousand yen. The combined stake comes to less than 1 percent. JAL needed to have multiple shareholders since a wholly owned subsidiary cannot adopt consolidated taxation, it said.
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China raised interest rates for the second time in slightly over two months, signaling the authorities' resolve to combat rising inflation, the Wall Street Journal reported today. The People's Bank of China said Saturday that it will raise the one-year yuan lending rate by a quarter of a percentage point to 5.81 percent from 5.56 percent, and the one-year yuan deposit rate to 2.75 percent from 2.50 percent. The move comes after the central bank raised on Oct.
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State-owned shipbuilder Vinashin's default on a $600 million loan late last week is just the latest crisis challenging Communist-run Vietnam's ability to get its economy under control after years of pell-mell growth and spiraling inflation, the Wall Street Journal reported today. Last week's default by shipbuilder Vinashin could be a make-or-break moment for Vietnam, say some analysts. Above, a ship is worked on at Vinashin's Nam Trieu shipyard in Hai Phong.
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China plans to tighten up rules governing sponsors of initial public offerings (IPO) after a surge of new issues this year sparked concerns about the quality of disclosure in IPO prospectuses, Reuters reported today. Under the new rules, IPO sponsors will be interviewed by the securities regulator regarding the due diligence process of a new issue and IPO sponsors will also be required to complete a due diligence check-list and sign off a declaration that they are aware of the legal consequences of negligent acts.
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