Short View: Investment-grade crisis

Short View: Investment-grade crisis

Published: December 4 2008 19:40 | Last updated: December 4 2008 19:40

The credit crisis is widely held to have begun in July last year. That was when the market for debt instruments backed by subprime mortgages cracked, starting a chain of reactions that is still going on.

But for investment-grade non-financial companies, the true “crisis” did not start until three months ago – after the Lehman bankruptcy. At that point, their borrowing costs were barely any higher than they had been 15 months earlier. Since then, yields on BAA-rated bonds (investment grade) have risen by a third, according to Moody’s Investors Service, while yields on equivalent US Treasury bonds have dropped by a quarter.

That means the extra yield investors need before they will lend to investment-grade companies has gone from 2.7 to 5.9 percentage points in three months. This is a crisis.

Meanwhile, the pain for lower quality credit gets worse. The iTraxx Crossover index, which measures the cost of insuring against default by European companies on the cusp of investment grade, shows that it costs more than $100 to insure against $1,000 of defaults over the next five years.

Credit markets are thus braced for huge defaults. According to Deutsche Bank, current spreads imply a 50 per cent default rate for high-yield credits and an “inconceivable” default rate for investment-grade companies: government intervention to prevent defaults on such a scale, they believe, would be inevitable.

Two conclusions seem solid. First, credit is more attractive than equity. Credit investors could avoid losing money even if the next few years are as bad as the 1930s. This is not true of equities, which are only slightly cheaper than long-term norms.

A second is that equities will not sustain a meaningful rally (as opposed to the lurches of the past two months, none of which has lasted more than a week), until investors buy credit again.

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Auto bankruptcy options

Published: December 4 2008 14:43 | Last updated: December 4 2008 19:08

In this dangerous game of chicken, Detroit’s carmakers and a divided Congress have nearly reached the point of ripping out their steering wheels and brake pedals as they hurtle towards one another. General Motors and Chrysler say they need cash now, not in 46 days when a more sympathetic group will populate Capitol Hill and the White House.

In hindsight, the carmakers made a tactical error by not considering a “prepackaged bankruptcy”, which was reportedly being studied by Barack Obama’s advisers at least two weeks ago. Congress erred as well by holding out the hope of a deal as billions of dollars of the carmakers’ cash and precious time have evaporated.

US corporations facing bankruptcy have various choices. Beneath Detroit’s bluster that bankruptcy is “not an option”, media reports suggest that carmakers may now accept a “pre-arranged” reorganisation. Many bankruptcies are involuntary and result in either Chapter 7 (liquidation) or Chapter 11 (reorganisation). The latter can be negotiated ahead of time. For example, oilfield services company Halliburton put its KBR subsidiary through a prepackaged reorganisation after being overwhelmed by asbestos litigation. This can be far cheaper and might avoid spooking customers since re-emergence is fairly quick.

But there is scant time left now for workers, bondholders, unions, dealers and suppliers to all agree on concessions. A messier, lengthier and more expensive prearranged deal is more likely without the requirement for universal agreement. Congress could remedy one pitfall of a prearranged deal, at little risk to the taxpayer, by providing “debtor-in-possession” financing to carmakers and suppliers in reorganisation. This low-cost funding is senior to all other claims and would leave taxpayers with little risk. Alternatively, an 11th-hour bail-out might still buy time for a negotiated restructuring. But Detroit’s recent hard-headed tactics suggest a bankruptcy judge would get far quicker results.

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受け取り拒否でも免除なし、候補通知未開封で返送の人も
特集 あなたも裁判員

　来年５月に始まる裁判員制度で、裁判員候補者名簿に登録された人が、先月末に最高裁から郵送されてきた通知を開封せず、送り返すケースがあることが分かった。

　候補者が通知の受け取りを拒んでも、今後、裁判所からの呼び出しが免除されることはなく、最高裁刑事局は「通知には調査票が同封され、辞退を希望する月を２か月まで書き込める。まずは通知を開封してほしい」と呼びかけている。

　裁判員候補者への通知は先月２８日、普通郵便で全国の候補者約２９万５０００人に送られた。ただ、普通郵便は開封しないまま「受け取り拒絶」などと書いてポストに入れると、差出人に返送される。北海道在住の３０代の男性は「自分には人を裁く資格などない」という考えから、未開封の通知を最高裁に返送したという。

　最高裁は、受け取り拒絶で通知を返送した人については調査票への回答がなく、辞退を希望する時期がないものと見なすとしている。

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22:42 GMT, Wednesday, 3 December 2008
Lebanon's Aoun in Damascus visit
Lebanese Christian leader Michel Aoun (left) meets Syrian President Bashar Assad

The former Lebanese general and prominent Maronite Christian leader, Michel Aoun, has held talks in Damascus with Syrian President Bashar Assad.

Mr Aoun, who fought Syrian troops in the civil war but now leads a pro-Syrian faction in Lebanon's parliament, said they had had a frank discussion.

He added that Lebanon and Syria were now putting the past behind them.

Mr Aoun is the latest senior Lebanese leader to visit Syria since diplomatic relations were established in October.

The move came soon after a deal to calm the long-running power struggle between the Western-backed parliamentary majority opposed to Syrian influence in Lebanon and a coalition led by Hezbollah and its allies, including Mr Aoun.

"We are turning a new page where there is no victor and no loser - this is a return to normal relations"
Michel Aoun

Nevertheless, the BBC's Natalia Antelava in Beirut says this historic visit is one that most people in Lebanon could not have imagined even a short while ago.

As interim prime minister and military commander in 1989, Mr Aoun led the Christian-dominated army in a failed "war of liberation" against the Syrian army and its supporters which left thousands of civilians dead.

In October 1990, the Syrian troops drove Mr Aoun's out of their positions. He found sanctuary in the French embassy - reportedly after fleeing the presidential palace in his pyjamas - and 10 months later left for the south of France.

Mr Aoun returned to Lebanon in May 2005, a month after the end of Syria's 29-year military deployment in the country.

'Bright future'

At the start of his five-day visit to Damascus, Mr Aoun said his animosity toward Syria had ended when its troops left Lebanon.

Michel Aoun launched a furious six-month rebellion against Syria in 1989

Profile: Michel Aoun

Michel Aoun (February 1990)

"This is an old story that is now over. We must have better relations with Syria," he said.

"We spoke with our hearts and minds... so there remains no trace of a past in which there are many painful things."

Mr Aoun instead predicted a "bright future" for ties between the two neighbours.

"We are turning a new page where there is no victor and no loser. This is a return to normal relations," he added.

Buthaina Shaaban, an adviser to President Assad, said Mr Aoun's visit opened "a new era in relations between Syria and Lebanon that will serve the interests of the two countries and the two peoples".

During their meeting, the two leaders are also believed to have discussed the fate of Lebanese citizens missing since the 1975-1990 civil war. Support groups believe around 650 remain unaccounted for, but Damascus denies any involvement.

Mr Aoun also said Syria's president had been "supportive of the holding of legislative elections" due to take place in Lebanon in the spring, and had promised not to interfere in the process.

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Daewoo unsure of Madagascar deal

By Christian Oliver in Seoul

Published: December 5 2008 03:02 | Last updated: December 5 2008 03:02

Daewoo Logistics of South Korea has not received approval from Madagascar for a plan to farm maize and palm oil in an area half the size of Belgium, contrary to statements by company officials, it has emerged.

Daewoo managers told the media last month the company would develop 1.3m hectares on the island to secure stable food supplies for South Korea under a 99-year lease, joining a flurry of Asian and Middle Eastern companies seeking to tap Africa’s agricultural export potential.

A Daewoo official told the Financial Times that the company understood it would not have to pay to lease the land, given the investment involved and the jobs to be created.

But in a statement attributed to the company and posted on the website of the Malagasy president, Daewoo said: “There is not yet a contract on the land between Daewoo Logistics and [the] Madagascar government.”

Echoing that, the Malagasy land reform ministry told the FT: “There has been no contract at regional or central government level. They [Daewoo] have prospected for land and now the central government is waiting for the prospecting reports.”

The ministry said an environmental investigation would be required as well. Marius Ratolojanahary, the land reform minister, confirmed to a Malagasy newspaper that Daewoo still had several hurdles to clear.

“Every request must be examined by a commission before being supported by the cabinet,” he said. “So Daewoo was free to file an application in line with the procedure but that does not mean it will get the land.”

Daewoo declined to confirm or comment on the statement on the government website.

Responding to initial reports of the deal, critics said the welfare of Malagasy people and global food security would be better served by islanders being helped to manage their own farms.

They stressed the trickle-down effect of Daewoo’s plan would be marginal and noted the company’s focus on exporting food from a country in which about 600,000 people rely on relief from the United Nations World Food Programme.

South Korea is the world’s fourth biggest maize importer and wants to wean itself off US shipments.

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Honda quits F1 as financial crisis bites

By James Allen, Roger Blitz and Reuters

Published: December 4 2008 21:03 | Last updated: December 5 2008 05:07

Honda pulled out of Formula One on Friday, dealing a major blow to the sport and ending a dream for Japan’s number two carmaker.

Amid slumping car sales triggered by the global economic crisis, Honda was no longer willing to bankroll the Formula One team and its estimated annual budget of $500m.

Takeo Fukui , Honda’s chief executive, told a news conference that a return to the sport could take time and added that there were no plans to continue as an engine supplier.

“This difficult decision has been made in light of the quickly deteriorating operating environment facing the global auto industry,” Mr Fukui told reporters.

“Honda must protect its core business activities and secure the long term as widespread uncertainties in the economics around the globe continue to mount.”

“We will enter into consultation with associates of Honda Racing F1 and its engine supplier Honda Racing Development regarding the future of the two companies. This will include offering the team for sale.”

Mr Fukui, who told Reuters earlier this year that he would “spend a trillion yen” if he could to make Honda a Formula One winner, added: “But at this stage we have no plans to return to F1. We have no plans to supply engines to other teams. We do not want to be half in and half out of the sport.”

Honda would have little time to find a buyer with the 2009 season starting in Australia on March 29.

Ross Brawn, Honda’s team principal, broke the news to the 667-strong Honda staff at 6pm on Wednesday, prompting a flood of calls to other teams from staff looking for jobs. Other F1 teams were also informed of the Honda decision on Wednesday.

One potential customer could be Dubai International Capital, the emirate investment buy-out group. During this season, DIC pulled out of talks to purchase Honda’s sister team, Super Aguri.

Any buyer would take over a team whose engines would be supplied by Ferrari rather than using Honda’s V8 engines, which have proved very costly to manufacture.

The decision has huge implications for the future of motorsport’s elite competition, with fears that other teams wholly owned by car manufacturers may also be facing financial trouble. Particular focus will be on Toyota, Honda’s big Japanese rival which could use Honda’s decision to bow out itself.

With F1 teams already embroiled in talks about how to make savings, Max Mosley, president of the Fédération Internationale de l’Automobile, F1’s governing body, is expected to reinforce his argument for stringent cost-cutting measures, such as a cap on team budgets and the introduction of standard engines.

Honda’s decision comes after a season in which the team, based in Brackley in Northamptonshire in the UK, finished eighth in the world championships. The Japanese company poured £147m ($216m) into the team, the highest costs of any team on the grid.

Although turnover rose 23 per cent, only a tiny amount is thought to have come from sponsorship. Honda has heavily promoted its Earth car, the only team to attempt to promote environmental sustainability.

The outcome of the FIA’s meeting in Monaco next week is now critical to F1’s future. Williams has suffered net losses of £50m in the past two years. But plans to introduce standard engines are opposed by Ferrari and Toyota.

Honda came into motor racing in the 1960s and supplied engines in the 1980s and 1990s to Williams and McLaren. Honda bought out BAR in 2005, but the team won only one grand prix, in Hungary in 2006.

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Baghdad and Kurds near oil pact

By Anna Fifield in Beirut, Javier Blas in London and Delphine Strauss in Ankara

Published: December 4 2008 18:28 | Last updated: December 4 2008 19:20

Iraq’s central government and regional authorities in Kurdistan are moving closer to signing a long-awaited oil deal that could pave the way for exports from the northern region’s oil fields early next year.

Following last week’s agreement to link two northern oil fields to the main pipeline to Turkey, government and oil company officials say that a broader agreement on exports could be reached as soon as this month.

Signs of progress come after months of bitter disputes that have hindered the passage of Iraq’s hydrocarbons law, which is crucial to greater international involvement in the country’s oil and gas sectors. They also come as falling oil prices, which hit a near four-year low of $45.30 a barrel on Thursday, rapidly erode Iraq’s revenues.

But given the long history of disagreements and delays, analysts are cautioning against expecting too much too soon. “This is a big step forward for exports of Kurdish oil, which is really Iraqi oil,” said Muhammad-Ali Zainy of the Centre for Global Energy Studies in London. “But this is an agreement on the hardware. We still need to see if they can agree on the software.”

Hussain al-Shahristani, the Iraqi oil minister, and Nechiravan Barzani, the Kurdish prime minister, said last week they had agreed in principle to join the Tawke and Taq Taq oil fields in Kurdistan to Iraq’s main northern export pipeline, which runs to the Turkish port of Ceyhan.

The more difficult issues, particularly revenue sharing, have yet to be resolved.

“We still have some technical issues to discuss, so even if we link the pipelines this does not mean that we can begin oil exports to the outside world,” Fuad Hussein, chief of staff to the Kurdish president, told the Financial Times.

However, Mr Hussein and other officials suggested that resolving these issues, which are mainly financial, might take only a few weeks.

Analysts are sceptical that progress can be made so quickly.

“We could see it happen if there is significant political will on both sides, but there is a host of stumbling blocks that have been holding this up,” said Raad Alkadiri, head of the Iraq advisory service at PFC Energy, a consultancy. He cited differing opinions over who would calculate, control and distribute the revenues.

Under Iraq’s draft hydrocarbons law, Kurdistan would receive 17 per cent of federal oil revenues. Kurds contend that they deserve more, while some Arabs argue they should get less.

Iraq has the world’s third-largest proven oil reserves, at 115bn barrels. It pumped about 2.3m barrels per day in October, down slightly from this summer’s 2.5m b/d, which was the highest level since the US-led invasion in 2003, according to the International Energy Agency.

Investment in the oil sector has been hindered by disagreements over the proposed new hydrocarbons law, which would outline foreign participation in the oil and gas industries and how to share the revenues between Iraq’s provinces.

During the 18-month stalemate, the semi-autonomous Kurdistan regional government has enacted its own hydrocarbons law and has independently signed more than 20 exploration and development deals in its territory, which Baghdad considers illegal.

However, the Tawke field, operated by Norway’s Det Norske Oljeselskap, and Taq Taq, a joint venture between Turkey’s Genel Enerji and Swiss-Canadian Addax Pet­ro­l­eum, were cleared for export before Kurdistan introduced its law.

Analysts say that an agreement covering only the early contracts would be implicitly admitting that the later contracts were illegal, and the Kurds might have to give up some or all of the exploration contracts agreed with companies including Austria’s OMV, MOL of Hungary, and India’s Heritage.

That would be a high price for Kurdistan to pay, analysts say. But the Kurdish government has told DNO to expect exports from the Tawke oil field to begin during the first quarter of next year, the Norwegian company said, although it warned that it had yet to receive proper authorisation.

Linking Tawke to the northern pipeline could help Iraq sustain oil flows because the field is far from the area where the pipeline is frequently attacked by the Kurdish PKK rebel group.

Although Turkey would in principle buy or export the KRG’s oil and gas, it will not do so without Baghdad’s authorisation.

The two fields would probably produce about 60,000b/d each, but analysts estimate that their combined output could reach 250,000b/d by the end of next year.

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Gulf surpluses to shrink substantially

By Roula Khalaf in London

Published: December 3 2008 20:04 | Last updated: December 3 2008 20:04

Gulf states’ fiscal surpluses will narrow substantially next year as oil prices average $56 a barrel, but the region will escape a recession, the Institute of International Finance has forecast.

In a report published on Wednesday, the association of leading financial services firms said that although the ripple effects of the global financial crisis had hit the oil-rich Gulf, the region would confront the turmoil from a position of strength.

The institute expects real economic growth to slow to 3.6 per cent from this year’s 5.7 per cent.

Based on the $56 oil price forecast, the IIF estimates that the budget surplus of the Gulf Co-operation Council countries – Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and United Arab Emirates – will decline to between 3 per cent and 5 per cent of gross domestic product, down from more than 20 per cent of GDP this year.

Saudi Arabia, the world’s largest oil exporter, needs a $51 per barrel price to balance its budget, it says, while the UAE’s break-even oil price is just $36.

“The GCC region is facing the current situation from a far stronger position than in the past,” said George Abed, director of the IIF’s Africa and Middle East department.

“Nevertheless, the GCC authorities need to take policy measures to address the expected growth slowdown, financial stress in certain segments of the banking sector and the sharp correction in the property market.”

After years of high growth and big budget surpluses, GCC investors’ confidence has soured as oil prices have tumbled (they stood at $47 a barrel on Wednesday), stock markets have crashed and the property boom has turned into a sharp correction.

But the IIF insisted that the region’s diversification drive and the cushion built up in official reserves and foreign assets would help it to weather the storm with “scratches” rather than “permanent scars”.

Even if half of the planned property and infrastructure projects were cancelled or postponed due to the credit crunch, there would still be $1,000bn (€791bn, £679bn) of projects over the next five years, said the IIF. Accumulated wealth – foreign assets of governments and banking institutions are at about $1,500bn – provide governments with enormous resources to fund projects.

Since taxes are low and public sector spending high, the countries are essentially living what Mr Abed called “a fiscal stimulus on a ­continuous basis”.

In ­a sign of growing constraints on sovereign wealth funds’ international appetites, the IIF said the reduction in value of funds’ investments in western equities and property had increased pressure to redirect their investments to local markets.

The institute said sovereign wealth funds in the region held 40-50 per cent of their assets in fixed-income securities, which have held up well during this crisis; about 35 per cent in public equities, which have suffered losses; and the rest in alternative investments and private equity.

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China lectures US on economy

By Geoff Dyer in Beijing

Published: December 4 2008 04:32 | Last updated: December 4 2008 19:10

The US was lectured about its economic fragilities on Thursday as senior Chinese officials urged the administration to stabilise its economy, boost its savings rate and protect Chinese investments.

The message went to Hank Paulson, the US Treasury secretary, in Beijing for the strategic economic dialogue he helped launch to discuss long-term issues between the two countries.

As expected, Mr Paulson urged Beijing not to abandon efforts to let the renminbi appreciate, said US officials, amid fears China might want to let its currency weaken to help local exporters weather the global slowdown.

But Mr Paulson also found himself facing calls for the US to address its own economic problems. Wang Qishan, a vice-premier and leader of the Chinese delegation at the two-day talks, called on the US to take swift action to address the crisis.

“We hope the US side will take the necessary measures to stabilise the economy and financial markets as well as guarantee the safety of China’s assets and investments in the US,” he said.

The dialogue was dominated by the global crisis. Zhou Xiaochuan, governor of the Chinese central bank, urged the US to rebalance its economy. “Over-consumption and a high reliance on credit is the cause of the US financial crisis,” he said. “As the largest and most important economy in the world, the US should take the initiative to adjust its policies, raise its savings ratio appropriately and reduce its trade and fiscal deficits.”

Although China also faces a rapidly slowing economy and rising unemployment, the tone of the comments reflected an underlying shift in power.

Eswar Prasad, a senior fellow at the Brookings Institution, said: “One result of the crisis is that the US no longer holds the high ground to lecture China on financial or macroeconomic policies.”

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Economists warn on LatAm credit squeeze

By Stephen Fidler in London

Published: December 4 2008 18:07 | Last updated: December 4 2008 21:20

Huge volumes of US Treasury bonds issued as part of an effort to reverse an economic slump threaten to stop access to credit by Latin American governments facing financing needs of an estimated $250bn next year, a group of prominent economists from the region has warned.

The risk that Latin American and other emerging market borrowers may be “crowded out” from credit markets by a US fiscal deficit that could exceed $1,000bn next year has not been much emphasised in the scramble to save the US economy. But the economists said “powerful and innovative” new mechanisms were required to deal with the threat in order to direct money back into the region.

The group, known as the Latin American Shadow Financial Regulatory Committee (Claaf), includes former finance ministers and central bank governors , such as Roque Fernández, a former finance minister of Argentina, and Ruth de Krivoy, former Venezuelan central bank president. Angel Gurria, the head of the Organisation for Economic Co-operation and Development, sits on the panel as a guest.

The economists, who issued a statement after meeting in Washington, estimate Latin American governments need $250bn just to repay maturing debt and support budgets in 2009. They called for more work to determine the exact figure.

The group suggested existing funding through the International Monetary Fund and other multi-lateral institutions was utterly inadequate to cope with the scale of resources needed. It said “unprecedented resources” must be made available – through new facilities andgreater resources for existing institutions – to channel funds to the region.

The risks to Latin America posed by heavy US debt issuance also reinforced the need for countries running high current account surpluses, such as China, also to take measures to stimulate aggregate demand, the group said.

The statement described a marked deterioration of the region’s economic prospects in the past few months caused by a flight to high quality assets and the freezing up of international credit. The region would suffer from a sharp slowdown in the world economy and falling export prices, it said.

Unless credit found its way to the region, the economists said governments would be forced to choose between two unappetising alternatives: painful fiscal adjustment that would reinforce the downturn or distortive measures, such as import restrictions and capital controls.

“In the absence of adequate international actions, beggar-thy-neighbour policy responses may be politically inevitable, seriously undermining the basis of the global co-operative system that emerged in the aftermath of World War II [that] allowed for unprecedented rates of growth of trade and incomes and a reduction in global poverty.”

Guillermo Calvo of Columbia University, a member of the group and a former chief economist at the Inter-American Development Bank, said the region was suffering what economists call a “sudden stop” of credit flows. Some of the funds being raised by the US and other big industrialised countries should be recycled to emerging economies if they were to avoid crisis, he said.

“The north” – the US and other industrialised countries – “is crowding out the emerging market economies by creating these big public sector deficits,” he said.

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Nomura ready to start banking in Saudi Arabia

By Robin Wigglesworth in Abu Dhabi

Published: December 4 2008 02:00 | Last updated: December 4 2008 02:00

Nomura has completed the integration of Lehman Brothers' Middle East operations into its regional business and will soon start investment banking activities in Saudi Arabia, the company said yesterday.

The combined Middle East division of Japan's biggest broker, split between Nom-ura's base in Bahrain and Lehman's former regional headquarters in Dubai, will employ about 70 people, two-thirds of them from Lehman.

Nomura had already acquired a licence to operate in Saudi Arabia, the premier prize for investment banks in the Middle East because of its wealth and size, and expects to start operations early next year.

"The Saudi Arabian market is progressing every day," Takuya Furuya, chairman of Nomura in the Middle East, told the Financial Times. "The country is modernising and deregulating its economy, which will provide a lot of opportunity, and we will grow the team over time."

Saudi Arabia has the world's largest oil reserves, and an ambitious economic reform drive from the government has lured international banks to the conservative kingdom, hoping to boost fees at a time when the rest of the world is mired in fears of recession.

Although oil prices have tumbled, Saudi Arabia's stock market is in the doldrums and local banks are also feeling the pinch. Yet analysts say the Gulf's largest economy will weather the storm better than most, owing to its $400bn-$500bn currency reserves.

Nomura also hopes to benefit from the expected consolidation in the Middle East - particularly in the United Arab Emirates, the region's second-biggest economy - and plans to be active in Libya. "A lot of assets acquired by local investors in recent years will now need restructuring, so that should provide a lot of work," said Mr Furuya.

The integration of Lehman Brothers' Middle East staff has been "extraordinarily smooth", said Philip Lynch, chief executive for Nomura, Middle East and Africa, who joined from Lehman. "Nom-ura weren't naive about what they were buying."

The challenge of the merger will be "to find the optimal point, given the new market environment", added Mr Lynch. "Former Lehman people realise that the world has changed while Nomura understands that the intelligent use of balance sheet is still an essential component of investment banking."

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Belgrade turns over keys to "Eurovision" to Moscow

03.12.2008, 14.43

MOSCOW, December 3 (Itar-Tass) - A ceremony of turning over the symbol of Eurovision Song Contest from the 2008 host of the Eurovision Song Contest - Belgrade, to the 2009 Eurovision host - Moscow, will be held in late December, a source from the Moscow mayor's office told Tass Wednesday. The source put the allocations to the ceremony at 3. 2 million roubles. The date of the ceremony has not been specified.

A tradition of turning over the Eurovision symbol from one winner city to another was started on September 14, 2007 when the Eurovision winner - Helsinki, turned over the Eurovision symbol, titled "Helsinki Insignia", to Belgrade - the next Eurovision host city. Afterwards, the symbol was turned over to every subsequent Eurovision city host. The symbol is made in the form of a key with the inscription “Eurovision Song Contest City.” The key carries dates and names of cities that played host to the Eurovision Song Contest until 2006. There is also a picture of the Senate Square in Helsinki on the symbolic key.

Eurovision Song Contest -2009 will be held in Moscow on May 1-16. An official opening ceremony will be held on May 9 timed to coincide with VE Day celebrations in Moscow. The ceremony will be held on University Square in Vorobyovy Hills - the highest place in Moscow, that commands an excellent view of the city.

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Russia, India to sign next-generation fighter deal in early 2009
11:36 | 05/ 12/ 2008

NEW DELHI, December 5 (RIA Novosti) - Russia and India are due to sign a contract at the beginning of 2009 to jointly develop and produce a fifth-generation jet fighter, the head of the United Aircraft Corporation said on Friday.

"We are planning to conclude the contract at the beginning of next year," Alexei Fedorov said.

The Russian-Indian advanced multirole fighter is being developed by Sukhoi, which is part of Russia's United Aircraft Corporation (UAC), along with India's Hindustan Aeronautics Limited (HAL), under a preliminary intergovernmental agreement signed in October 2007.

Russia and India will simultaneously develop two versions of the combat aircraft - a two-seat version to meet the requirements of India's air superiority policy, and a single-seat version for the Russian Air Force.

Russia's Sukhoi aircraft maker earlier said it had started to construct a prototype of the fifth-generation fighter, which will feature high maneuverability and stealth to ensure air superiority and precision in destroying ground and sea targets.

The Russian version will be built at the Komsomolsk-on-Amur aircraft-manufacturing plant in Russia's Far East.

Flight tests of the fighter are due to begin as early as 2009, and the aircraft may go into production by 2015, Sukhoi said.

Russia's military cooperation with India goes back nearly half a century, and the Asian country accounts for about 40% of Russian arms exports.

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Russian naval task force heads to Atlantic, Mediterranean
10:41 | 05/ 12/ 2008

MOSCOW, December 5 (RIA Novosti) - A Russian task force from the Northern Fleet led by the Admiral Kuznetsov aircraft carrier began on Friday a tour of duty in the Atlantic and the Mediterranean, a navy spokesman said.

"A task force comprising the Admiral Kuznetsov aircraft carrier and the Admiral Levchenko missile destroyer, as well as two support ships, has left the Northern Fleet's main base and set course for the Atlantic and the Mediterranean," Capt. 1st Rank Igor Dygalo said.

According to the official, during the current tour, which will last for several months, the Russian warships will accomplish a number of assigned tasks, including joint drills with Russia's Black Sea Fleet, as well visits to several ports in the Mediterranean.

A task force from the Northern Fleet, consisting of the Admiral Kuznetsov, the Udaloy-Class destroyers Admiral Levchenko and Admiral Chabanenko, as well as auxiliary vessels, conducted from December 2007 to February 2008 a similar tour of duty in the Mediterranean and the North Atlantic.

Russia announced last year that its Navy had resumed and would build up a constant presence throughout the world's oceans.

Another naval task force from the Northern Fleet, comprising the nuclear-powered missile cruiser Pyotr Velikiy, the large ASW ship Admiral Chabanenko, and support ships, is currently on a visit to Venezuela and has recently conducted joint drills with the Venezuelan navy.

A task force from Russia's Pacific Fleet will leave its main base in Vladivostok on December 9 to take part in joint naval drills with the Indian navy in the Indian Ocean.

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株譲渡など金融所得、一体課税を先送り　政府・自民方針

　政府・自民党は5日、預金の利子や株式の譲渡益、配当などを一体で課税する金融所得一体課税の導入を、当初予定していた2011年から1年先送りする方針を固めた。追加経済対策の一環として株式譲渡益課税の優遇税率を11年まで3年延長させるため、証券投資のみに優遇税制を設けたまま、ほかの金融商品と一体で課税するのは困難と判断した。12日決定する予定の09年度与党税制改正大綱に盛り込む。

　株式譲渡益と配当に適用してきた軽減税率（10％、本則20％）は当初、来年以降段階的に戻される予定で、金融所得一体課税の導入時にはすべての金融商品の所得にかかる税率が20％でそろうはずだった。だが、証券優遇税制の3年間延長に伴い、政府・与党内で「一体課税は制度上、無理がある」との声が出ていた。一体課税開始には、銀行や証券会社などの間で情報をやりとりする新システムが必須。金融機関などの負担を考慮する必要も指摘されていた。(17: 04)

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企業の海外利益非課税に　自民税調方針、資金の国内還流狙う

　自民党税制調査会（津島雄二会長）は5日、2009年度税制改正で、日本企業が海外子会社から受け取った配当を非課税とする方針を固めた。海外で得た利益を国内に還流させるのが目的だ。日本の海外現地法人が持つ内部留保の残高は06年度に約17兆2000億円と過去最高水準に膨らんでいる。資金の国内還流で国内投資や研究開発の活性化を狙う。

　非課税対象とするのは、日本の親会社が、経営実態のある海外子会社から受け取る配当。6カ月以上の期間にわたって、25％以上を出資していることを条件にする案を軸に財務・経済産業両省と最終調整に入った。(16:00)

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外貨準備高、4カ月ぶり1兆ドル台　11月末

　財務省が5日発表した11月末の外貨準備高は前月末に比べ251億3800万ドル増え、1兆28億6100万ドルとなった。増加は4カ月ぶり。ユーロ安に伴ってユーロ建て資産のドル換算額が目減りしたものの、世界的な金利低下を受けて米国債など保有債券の時価評価額が膨らんだ。残高は4カ月ぶりに1兆ドルの大台を回復した。

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ホンダ、Ｆ１から撤退　技術者を次世代環境車に投入

　ホンダは5日、2008年シーズンを最後に自動車レースのフォーミュラ・ワン（Ｆ１）から撤退すると発表した。同日会見した福井威夫社長はＦ１の技術・開発者約400人を「次世代環境車やエンジン開発に投入する」と表明。自動車の販売不振が深刻化するなか、本業に経営資源を集中するというホンダの決断は、Ｆ１に参戦する欧州の自動車メーカーの戦略にも影響を及ぼす可能性がある。

　Ｆ１で培った車体設計や駆動制御などの技術を中・大型クラスのハイブリッド車や1000ccクラスの小型ガソリン車、小型ディーゼルエンジンなどの開発に生かす。09年を含め鈴鹿サーキット（三重県鈴鹿市）でのＦ１レース開催は継続する。

　ホンダは創業者の本田宗一郎氏の決断で1964年からＦ１に参戦。優勝も経験したが、68年に一度撤退。83年にエンジン供給で復帰し、一時は連戦連勝だった。

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新日鉄と伊藤忠丸紅鉄鋼、南アフリカの鋼板メーカーに出資

　新日本製鉄と鋼材商社の伊藤忠丸紅鉄鋼（東京・中央）は5日、アフリカを事業基盤とする建材メーカー、サファルグループが南アフリカに持つ鋼板製造会社、サファルスチールに出資すると発表した。同社が15日にも実施予定の第三者割当増資を引き受ける。増資後の持ち株比率は議決権ベースで新日鉄、伊藤忠丸紅とも7%になる。両社はこれまでもサファルに屋根用鋼板を供給しており、出資の要請に応じて関係を強化する。

　サファルスチールは熱延鋼板を冷延で引き延ばし、メッキ加工や塗装をする工場を2009年7月の稼働を目指して建設中。鋼板の冷延で年15万トンの処理能力を持つ予定で、新日鉄と伊藤忠丸紅は第三者割当増資と融資を合わせてそれぞれ約3億円を投じる。新日鉄は工場稼働後に材料である熱延鋼板を供給する。 (19:15)

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出光、ガソリン卸値を4.1円下げ　10週連続で下落

　出光興産は5日、8―14日に出荷するガソリンの卸価格（全国平均）を前週比で1リットル当たり4.1円引き下げると発表した。値下げは週単位での価格決定方式を10月に導入してから10週連続になる。景気悪化で需要が縮小するとの見通しから原油価格が急速に下落しているため。

　軽油は8.2円、灯油は3.8円、それぞれ値下げする。船舶などに使うＡ重油も4.8円引き下げる。

　石油情報センターによると、1日時点のレギュラーガソリンの給油所店頭価格（全国平均）は123.3円で、8月上旬のピークから約33％下がっている。(12:01)

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給油所の統廃合加速　新日石社長「15―20％削減も」

　新日本石油と新日鉱ホールディングスの経営統合はガソリンスタンドの再編が加速するきっかけともなりそうだ。「ＥＮＥＯＳ」ブランドで展開する新日石と、「ＪＯＭＯ」ブランドの新日鉱ＨＤ傘下のジャパンエナジーの給油所は合計で１万3000店以上。新会社は過当競争の解消に向けて給油所を減らす方針を示しており、中長期的にはガソリン需給の引き締まりで価格が下がりにくくなる可能性もある。

　新会社は店頭に掲げるブランドを新設も含めて１つに統合する方針。新日石の西尾社長は「（給油所を）15―20％は減らす必要があるかもしれない」と述べた。1999年に日本石油と三菱石油が合併して誕生した新日石も９年間で約4000店の給油所を減らした。(08:34)

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道路一般財源化の新交付金、「８割は道路向け」　自民・谷垣氏

　自民党道路特定財源の一般財源化に関するプロジェクトチーム座長の谷垣禎一元国土交通相は5日の党総務会で、来年度の創設を打ち出した約1兆円の地方向け交付金の使途について「約8割は道路に使われるイメージだ」と語った。

　8000億円程度が道路整備に充てられることになり、そのほかの事業などへの投資は2000億円程度にとどまる見通しだ。

　総務会では「病院に行くにしても道路が悪いと時間がかかる」などと道路整備を重視すべきだとの意見が出た一方、「一般財源化というなら、地方が自由に使える金にすべきだ」などの意見も出た。(23:38)

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貿易黒字：前年度比３２．３％減へ　資源高と景気減速で

　日本貿易会は５日、０８年度の日本の貿易黒字が前年度比３２．３％減の７兆９１００億円と３年ぶりに前年実績を下回るとの見通しを明らかにした。夏までの原油、金属、穀物価格の上昇で輸入が過去最高となる一方、世界的な景気減速で輸出が７年ぶりに減少するため。黒字減少幅は貿易黒字が定着した８１年度以降最大という。

　輸入は２．７％増の７１兆１４００億円と７年連続で増加し、原油高で鉱物性燃料が１９．４％増、化学製品も５．７％増となる見通し。輸出は２．３％減の７９兆５００億円で、欧米市場を中心とした需要減退で自動車など輸送用機器が６．３％減、電気機器も２．６％減になると見込んだ。

　一方、０９年度の貿易黒字は前年度比８５．５％増の１４兆６８００億円と９８年度に次ぐ過去２番目の高水準になると予測。輸出は世界景気の悪化と円高進行で６．７％減となるものの、資源や穀物価格の大幅下落で輸入は１７．０％減になるとみている。【小倉祥徳】