Asia

Pawn shops, banned during more than three decades of Communist rule from 1956 to 1987, are making a comeback as China’s government tries to ease the credit crunch that is strangling small businesses, Bloomberg reported. In 1997, Beijing only had four pawn shops. This year, Beijing and Shanghai authorized a record 94 new outlets for 2009 in an effort to channel funds to the entrepreneurs who drove the nation’s biggest economic boom, according to the Beijing Pawn Trade Association and Shanghai Pawn Trade Association.
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Toyota Motor Corp. said Monday it expects to post its first-ever operating loss in the fiscal year through March 2009 and barely eke out a net profit, showing how severely the global economic downturn is hitting even the world's most competitive companies, The Wall Street Journal reported. Japan's biggest company by market cap said it expects consolidated operating loss of ¥150 billion, or about $1.68 billion, in the fiscal year through March 31, 2009, hurt by sliding demand in the U.S., Europe and Japan and the rising yen against the dollar.
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Urban Corp., the developer that filed Japan’s biggest bankruptcy this year, may be sold separately after failing to attract final bids due today from investors, two people familiar with the situation said, Bloomberg reported. Daiwa House Industry Co., Japan’s biggest home builder, Goldman Sachs Group Inc.
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Global Investment House (GIH), the largest investment bank in Kuwait, has been downgraded to a notch above default by Fitch Ratings after the bank warned it may default on a loan, The National reported. The rerating to a ‘C’ came after GIH told Fitch that it is unable to repay a loan which matured yesterday. The company has a grace period of 72 hours to meet the obligation before defaulting. The downgrade followed the announcement from GIH earlier this month that it was seeking US$1 billion (Dh3.67 billion) from local banks.
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For years, the overseas operations of Ford and General Motors helped buoy Detroit when times were tough in the United States. But now, with the administration of President George W. Bush announcing Friday that it would step in to keep General Motors from falling into bankruptcy, and with Ford in serious trouble as well, fears are growing that the U.S. problems of the automakers will drag down their more successful units in Europe, Asia and Latin America, the International Herald Tribune reported.
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Over 100 companies globally have defaulted on their debt this year, affecting $302 billion worth of securities, but that figure could rise as nearly 900 issuers are poised for credit downgrades, Standard & Poor's said on Monday. Of the 108 defaults this year, 86 are from the United States, seven from Europe, five each from Asia and Canada, three from Latin America, and two from Russia. The figure contrasts with 22 defaults in 2007 and 30 in 2006.
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Kazakhstan sought to reassure investors on Wednesday that none of its banks would default on foreign debt although some bilateral loans may be restructured, the Guardian reported. Central bank Governor Anvar Saidenov said he was confident none of the local banks would default on its obligations. Kazakhstan has been hit badly by the global financial crisis and has announced a $21 billion aid package--roughly equivalent to 20 percent of gross domestic product--to help its oil-fuelled economy.
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Taiyo Kogyo Co., a Japanese plastic product wholesaler, filed for bankruptcy protection today with the Tokyo District Court after accumulating 14.8 billion yen ($157 million) of liabilities, Bloomberg reported today. The company made the announcement today in a filing to the Tokyo Stock Exchange. The stock will be delisted from the Jasdaq exchange on Dec. 9. Read more.
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The top automakers in Asia would not welcome the collapse of one or even all of their three big Detroit rivals, though those who follow the industry expect the likes of Toyota, Honda and Hyundai to gain market share in the long term, the International Herald Tribune reported. The immediate carnage from a bankruptcy of General Motors, Ford Motor or Chrysler would spread throughout an industry that is bleeding cash in a global slowdown, auto executives and analysts say.
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Central banks world-wide delivered sweeping interest rate cuts Thursday, even as the continuing turmoil in credit markets means cuts in rates are losing their power to curtail an accelerating global slowdown, The Wall Street Journal reported. Major European central banks, including the European Central Bank, the Bank of England and Sweden's Riksbank joined the central banks of New Zealand and Indonesia in making deep rate cuts. The goal: to stave off deep and painful slowdowns in the wake of financial market turmoil that has squeezed lending globally.
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