theSun | TUESDAY MARCH 24 2009 17

business

LONDON: Global stock markets surged

yesterday as investor optimism grew ahead
of the official launch of a US$500 billion
(RM1.9 trillion) US government plan to
purge banks of toxic assets.
In morning European trade, Frankfurt
won 2.04%, London gained 2.02% and Paris
Global stocks rally
on US debt plan
soared 1.37% in value.
In Asia, Tokyo leapt 3.39%, nearing a
two-month high, and Hongkong rocketed
by 4.78%.
“Today’s focus is squarely going to
be back on the US Treasury with an an-
nouncement to tidy up the ongoing toxic
debt issue amongst the banks being widely
expected by traders,” CMC Markets dealer holding back on providing credit”. the international credit crunch which has
Matt Buckland said yesterday. In Asian trade yesterday, Tokyo’s Nikkei- pulled the eurozone, Japan and the United
“This should prove to be good news for 225 index closed up 3.39% at 8,215.53 points States into recession.
equities ... but the detail of the US plan will – which was the best finish since Jan 29. Elsewhere, in Frankfurt yesterday,
likely take some time to disseminate which The Nikkei has risen in five of the past shares in the German auto and truck
could in turn help extend the rally.” six sessions, soaring more than 1,000 maker Daimler leapt higher after the group
US Treasury Secretary Timothy Geithner points, or 14%, as investors look beyond revealed that a UAE investment fund would
will unveil today plans to create a govern- the current economic downturn and focus would become its biggest shareholder.
ment body to relieve bank balance sheets of on prospects for a recovery. Daimler shares showed a gain of 4.19%
the troubled assets that lie at the heart of the “With more details on the US bad bank to 22.23 euros as investors welcomed pros-
global financial crisis. plan expected to come soon, it’s hard for pects for a stronger balance sheet.
Geithner wrote in The Wall Street Journal sellers to be aggressive,” Daiwa Securities Daimler which makes Mercedes-Benz
that the measure was needed because the US SMBC market analyst Yumi Nishimura told cars, has said Sunday that the Abu Dhabi
financial system as a whole was “still work- Dow Jones Newswires. state investment fund Aabar Investments
ing against recovery” and “many banks, Banks were among the main winners as would invest US$2.65 billion (RM10 billion)
still burdened by bad lending decisions, are the US banking plan eased worries about in return for a 9.1% stake. – AFP

‘US Treasuries still key to China investment plan’

BEIJING: Beijing will continue to make US
Treasury bonds the main investment vehicle
for its foreign exchange holdings, an official
said yesterday amid fears over the safety of
China’s assets in the United States.
“Investing in US Treasury bonds is an
important element in China’s investment
strategy and we will continue this practice,”
Hu Xiaolian, deputy governor of the China’s
central bank, told reporters.
China has been the top holder of US Treas-
ury bonds since September, when it overtook
Japan for the first time, according to US data.
As of late January, it had accumulated a
total of US$739.6 billion (RM2.8 trillion) in US
Treasury bonds, the most recent data from the
US government showed.
But some Chinese commentators have
voiced frustration that Beijing has been un-
able to find higher-yielding investment targets
for its huge forex reserves.
And in a rare expression of official concern
over Beijing’s huge bond holdings, Premier
Wen Jiabao earlier this month called on the
United States to safeguard its investments.
“To be honest, I am a little bit worried and
I would like to ... call on the United States to
honour its word and remain a credible nation
and ensure the safety of Chinese assets,” Wen
had said. He spoke after the United States ap- largest. Chinese media reported last
proved a massive economic stimulus package, week that the reserves had fallen by
which some fear could drive down the value about US$30 billion in January, partially
of dollar-based assets. due to a drop in the value of non-dollar
US President Barack Obama’s administra- assets.
tion quickly responded to Wen’s concerns by At yesterday’s briefing, Hu and other
saying China’s bonds were safe. officials said that at the G20 summit,
The central bank’s Hu said that while Chinese President Hu Jintao would
Treasury purchases would remain key to push for deep reform of the global fi-
China’s investment plans, Beijing would also nancial regulatory system and greater
keep a close eye on them. decision-making powers for developing
“I also want to stress that we pay great at- nations. – AFP
tention to the fluctuations of the value of our
assets,” she said, without elaborating.
Speaking at a press briefing on China’s
participation in next week’s G20 summit in
London, Hu said the world economic crisis
had impacted the rate of growth in China’s
forex reserves.
“In many emerging markets there has
been a serious outflow of capital, but this has
not happened in China. But compared to the
massive inflows of capital in recent years,
it has been slowing down,” she said, while
providing no figures.
“We have full confidence in China’s bal-
ance of payments.”
China’s forex reserves hit US$1.95 trillion
at the end of 2008, making them the world’s

The move would also allow recently ap-

briefs pointed chief executive Alan Joyce to stamp
his authority on the country’s largest airline,
the Australian Financial Review reported,
China hits out at protectionism, citing unnamed senior sources at Qantas.
It said the job cuts, to be announced in com-
rejects Coke fears ing weeks, came on top of the 1,500 positions
BEIJING: China hit out at trade protectionism Qantas announced it would scrap last July.
yesterday, a day after stressing its veto of Coca- The airline refused to comment on the
Cola’s bid for a local company does not mean it report.
is hostile to foreign investment. Joyce was appointed as chief executive in
Vice Finance Minister Li Yong called on the November last year after five years running
Group of 20 major economies to reject protec- the airline’s budget offshoot Jetstar. – AFP
tionism at next week’s meeting in London, say-
ing it could set back recovery from the economic S’pore inflation rate highest in
slowdown.
“Protectionism will seriously dampen the 28 years, says govt
momentum of economic recovery. We call on SINGAPORE: The city-state’s inflation rate
the G20 to send a signal of opposing trade pro-climbed to its highest level in 28 years in 2008,
tectionism,” he told reporters. with the poor being the hardest hit, the statis-
Li was speaking after last week’s rejectiontics department said yesterday.
of Coca-Cola’s US$2.4 billion (RM9.1 billion) bid The 6.5% rise in the consumer price index
for Huiyuan Juice triggered fears that China was
last year was more than triple the 2.1% increase
raising barriers to overseas companies. in 2007, it said in a report.
Commerce Minister Chen Deming on Sunday It was the highest since inflation hit 8.2%
called such worries “a very big misunderstand- in 1981, according to data from the statistics
ing” and said China was still open to foreign department’s website.
investment. – AFP Singapore’s lowest 20% income group
experienced a higher inflation rate of 7.4%
Australia’s Qantas to cut last year compared with higher wage earners
because of dearer food, housing and electricity
100 executives: Report costs, the department said.
MELBOURNE: Australian airline Qantas is Economists said inflation is likely to ease
planning to slash 100 senior executive jobs this year as Singapore faces what could be its
in response to the slump in global air travel, worst recession since independence because
a report said yesterday. of the global economic downturn. – AFP