German bond sale’s fate signals trouble ahead

German bond sale’s fate signals trouble ahead

By David Oakley in London

Published: January 7 2009 13:30 | Last updated: January 7 2009 20:45

A German sovereign bond auction failed on Wednesday as investors shunned one of the most liquid and safe assets in the world in a warning for governments seeking to raise record amounts of debt to stimulate slowing economies.

The fate of the first eurozone bond auction of 2009 signals trouble ahead as governments around the world hope to issue an estimated $3,000bn in debt this year, three times more than in 2008.

The 10-year bonds failed to attract enough bids to reach the €6bn the German government wanted. Bids of €5.24bn, a cover of only 87 per cent, amounted to the second worst auction on record in terms of demand.

Such developments were rare before the credit crisis. Before the seven German bond auctions that failed last year, the last German bond auction to fail was in July 2000 after the dotcom crash.

Analysts said the vast amount of supply is deterring investors and a growing number of countries, including those with deep and mature bond markets, such as Germany, the UK and Italy, are struggling to attract buyers.

The Netherlands has seen bond auctions fail, the UK and Italy have been forced to offer investors higher yields to meet their auction targets, while Spain and Belgium have cancelled offerings because of a lack of demand.

The German finance agency admitted that investor appetite for government debt had waned, although insisted the auction was “not a disappointment”.

Meyrick Chapman, a UBS fixed-income strategist, said when a German bond auction failed it “does suggest there may be trouble ahead for other governments wanting to raise money in the debt markets. Before the financial crisis, German bond auctions just did not fail.”

However, analysts stress the heavy supply is being offset by fears of deflation and recession, which are typically supportive to government bonds and have depressed yields, which have an inverse relationship with price, to historical lows.

The UK on Wednesday successfully sold £2bn in gilts due to mature in 2038. But Robert Stheeman, chief executive of the UK Debt Management Office, has warned that the large supply of debt could deter buyers of gilts. Britain is planning to raise £146.4bn in bonds this financial year – three times more than last year.

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Billionaire Blavatnik hit hard by Lyondell failure
Wed Jan 7, 2009 5:01am EST

By Dmitry Zhdannikov

MOSCOW (Reuters) - Russian-born billionaire Len Blavatnik's international empire faces its biggest test with Tuesday's bankruptcy filing by a key component, the U.S. operations of LyondellBasell, the world's No. 3 petrochemical maker.

In two decades of impressive but highly leveraged growth fueled by Soviet-era links, U.S. citizen Blavatnik became a rare middleman between Western capital and a new generation of Russian entrepreneurs in the early 1990s.

His business interests stretch from the United States to Kazakhstan, and his $11 billion fortune ranks him 28th on the Forbes list of the 400 richest Americans. Google (GOOG.O: Quote, Profile, Research, Stock Buzz) co-founder Sergey Brin is the only Russian emigrant to rank higher.

Blavatnik was a pioneer in converting his Russian wealth into large assets in Europe and the United States, a path later followed by many Russian metals and oil barons.

He once earned $675 million on a Russian asset that previous owner George Soros rated his worst ever investment.

Blavatnik, who a spokesman said was not available for interview, is now in the vanguard of a less welcome trend as the global financial crisis strips the wealth of Russian tycoons.

The U.S. operations of LyondellBasell filed for bankruptcy protection in a New York court on Tuesday. The company took on billions of dollars in debt a year ago, when Blavatnik led a $12.7 billion leveraged buyout of Lyondell by Basell of the Netherlands.

Blavatnik, 51, emigrated to the United States in 1978, turning his back on a career as a Soviet engineer after four years of studies in Moscow's Transport Engineering Institute.

Three years later he became a U.S. citizen. He retained his appetite for studies, receiving a master's degree in computer science from Columbia University and an MBA from Harvard Business School.

His education, coupled with his title of chairman of then little-known investment firm Access Industries, was guaranteed to impress any potential partner in the former Soviet Union in the early 1990s. One knew Blavatnik better than most.

Viktor Vekselberg, a fellow student at the Moscow institute, aligned his Renova company with Access Industries to begin a decade-long crusade to capture Soviet oil and aluminum assets after the collapse of Communism.

Both men played big roles in Russia's privatization auctions. They ended up with significant stakes in Russia's No. 3 oil firm, TNK-BP (TNBPI.RTS: Quote, Profile, Research, Stock Buzz), and the world's largest aluminum producer as well as coal, telecoms, media and real estate assets.

Blavatnik once bought 25 percent of Russian national telecoms firm Svyazinvest for $625 million from Soros in 2006, eight years after Soros paid $1.875 billion for the stake.

Blavatnik later doubled his money selling the stake for $1.3 billion to Russian billionaire Vladimir Yevtushenkov.

PUBLICITY SHY

Blavatnik rarely gives interviews, and has even avoided having a link on www.compromat.ru, a website featuring rumors about wealthy people with links to Russia.

He sits on the academic boards at Cambridge University, Harvard Business School and Tel Aviv University and sponsors the Babylon exhibition at the British Museum in London, which runs until March 15.

Blavatnik retains an interest in Russia as a board member of aluminum leader United Company RUSAL and owner of a 12.5 percent stake in TNK-BP. He is estimated to have made $2 billion when Access/Renova and a third shareholder, Alfa Group, sold half of the company to oil major BP (BP.L: Quote, Profile, Research, Stock Buzz) for cash and shares.

Blavatnik's other major investment in Russia, a minority stake in UC RUSAL, also faces problems. Debts of $14 billion forced UC RUSAL's biggest shareholder, Oleg Deripaska, to ask the Kremlin for help in refinancing debts.

RUSSIA RISKS

Blavatnik, active in Russia during the 1998 financial crisis, is familiar with Russian risk. He bought German petrochemical giant Basell in 2005 for 4.4 billion euros from Royal/Dutch Shell (RDSa.L: Quote, Profile, Research, Stock Buzz) and BASF (BASF.F: Quote, Profile, Research, Stock Buzz).

Like many Russian-born peers, he drew heavily on loans to grow his business. LyondellBasell struggles under $26 billion of debt after Basell merged with Houston-based Lyondell in a $12.7 billion deal in 2007.

Still, associates say Blavatnik will not quickly lose his talent for big deals or his great connections.

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Short View: Bears in the money

By John Authers

Published: January 7 2009 18:21 | Last updated: January 7 2009 18:21

There’s money in dead cat bounces. Risky assets have made only barely discernible progress in recouping their losses for the credit crisis.

But, as traders charmingly point out, even a dead cat will bounce if it falls far enough. And the bounces recorded by risky assets once they hit bottom were spectacular.

For the S&P financials index, arguably the centre of the crisis, the rally after November’s crisis over Citigroup led to a gain of 58.7 per cent from top to bottom. The index was still down 64 per cent from its peak.

Meanwhile, the MSCI emerging markets index staged a 48.6 per cent rally after hitting its trough last autumn. It was always at least 49 per cent down from its peak. And crude oil’s recent rebound to exceed $50 per barrel once more involved a bounce of 56 per cent. Its peak, last July, was more than $140.

So far it is hard to view this as anything more than a trading phenomenon, driven by traders’ mass psychology, rather than anything more fundamental.

History’s worst bear markets were punctuated by rallies that made a lot of money for those lucky enough to time them correctly. The fall of the Dow Jones Industrial Average after 1929, and the Nasdaq Composite after 2000, both saw at least four rallies of more than 20 per cent before they hit bottom. During a panic, selling is indiscriminate, creating rallies when calmer heads prevail once more.

But stocks and commodities no longer appear to be obviously “oversold”, judged by moving averages of their prices.

And sell-offs on Wednesday suggested the dead cat may not bounce much further. The revelations from Satyam, ADP’s alarming US unemployment forecast, Alcoa’s announcement of US job cuts and lousy oil supply figures in the US were all reminders that there are many risks out there.

But traders make money out of dead cat bounces, so they will continue to look for them.

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Daimler to join forces with Chinese truck giant

By Patti Waldmeir in Shanghai

Published: January 7 2009 12:54 | Last updated: January 7 2009 12:54

Daimler is to form a $929m joint venture with Beiqi Foton, one of China’s largest truck makers, to produce heavy trucks in China at a time when Beijing’s economic stimulus package is expected to boost flagging demand for commercial vehicles.

The 50-50 joint venture could still face regulatory hurdles, auto market analysts said, noting that the two companies have been discussing a link up for several years. Beiqi Foton last year failed to get regulatory approval to sell a 24 per cent share stake to Daimler.

A spokeswoman for the Chinese company said the joint venture, which is expected to begin truck sales in 2012, aims to export about 20 per cent of its output, which is expected to target the low-end commercial vehicle market. Market analysts said production is likely to reach 100,000 units by the middle of the next decade.

The move will give Daimler a foothold in the Chinese truck sector, which is expected to benefit from the RMB4bn government economic stimulus package announced last year. The package is expected to focus on infrastructure and construction projects which will boost demand for commercial vehicles, analysts said.

But figures from JD Power, the auto consultancy, show that the truck sector has suffered severely so far from the Chinese economic slowdown: heavy truck sales in November last year fell 52 per cent, year on year. Heavy truck sales rose 10 per cent for year to November.

A Beiqi Foton spokeswoman said the company expects heavy truck sales to fall as much as 20 per cent this year. Analysts said the sector is expected to recover later, partly as a result of multi-year spending on infrastructure projects.

“The venture will be beneficial for both parties. Daimler has been looking for a solid manufacturing base for trucks in Asia Pacific, and it will give Beiqi Foton a great opportunity to upgrade its products into premier segments and leverage the global distribution network of its foreign counterpart,” said Li Chunbo, of CITIC Securities in Beijing.

However, regulatory hurdles remain, he said, noting that “according to Chinese law, foreign companies can’t have more than two Chinese partners in the country.” Daimler already has two vehicle joint ventures in China.

Auto market analysts also said that other Chinese companies have run into significant problems when they try to enter overseas markets with domestically produced vehicles. Chery, the big Chinese automaker, was recently forced to abandon a plan to make compact Chery cars in China for sale under the Chrysler brand in the US market.

The Daimer-Beiqi Foton venture “will be the first Sino-European commercial vehicle operation with an aim to expand production in international markets,” Wang Jinyu, president of Beiqi Foton, said in a statement last year when a letter of intent was signed for the venture.

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Funds of funds have to work harder

By John Gapper

Published: January 8 2009 02:00 | Last updated: January 8 2009 02:00

"For Monica and Walter Noel, their hilltop retreat on Mustique is all about the mix - of family, friends, great times and a sexy global design style," declared Town & Country in 2005 about the founder of the hedge fund group, Fairfield Greenwich, his Swiss-Brazilian wife and their five photogenic daughters.

Three years earlier, the Noels were photographed for a Vanity Fair article called "Golden in Greenwich". The piece marvelled at their lifestyle, with the "glamazon" daughters, having married globe-trotting financiers, living in London, New York, Rio de Janeiro and Lugano.

It was a fairy tale existence, in more ways than one. The Noels' millions, it turns out, were largely derived from Bernie Madoff's alleged $50bn (€36bn, £33bn) Ponzi scheme. The fees to investors on Fairfield's biggest hedge fund, the Madoff- managed Fairfield Sentry, produced two-thirds of Fairfield's $250m revenues, and $200m profits, in 2007.

Those figures, disclosed by The New York Times, illustrate just what a nice business the funds-of-funds industry had become. That profit of $200m was mostly distributed to Fairfield's 21 partners, including four of Mr Noel's sons-in-law.

The Noels did not know the family business was supported by fraud but that is not exactly a justification since Fairfield, like other funds of funds and European private banks that entrusted their investors' money to Mr Madoff, were paid above all to keep it safe.

Now the funds-of-funds industry, which hardly existed two decades ago but today handles 45 per cent of all hedge fund assets, has moved from hilltop retreat to dog house.

Fairfield Greenwich, which had $7.5bn invested with Mr Madoff, faces at least one class action lawsuit from enraged investors. In legal terms, it may have a defence, since a US court ruled in another case that a hedge fund advisory group was not liable for failing to spot a Ponzi scheme.

Still, Madoff-linked groups such as Fairfield Greenwich, Tremont Capital and Union Bancaire Privée clearly failed to perform their lucrative jobs well enough. That rounds off a bad year for funds of funds, which have performed even worse than hedge funds and now look ridiculous.

Warren Buffett always thought they did. The Sage of Omaha has a thing against "helpers", such as hedge funds, that take investors' money in fees while performing not much better than a low-cost index fund.

That applies especially to funds of funds, which exist to carry out due diligence for investors who do not have the time or resources to do it themselves, and put their money in a selection of hedge funds. For that, they charge 1 per cent plus 10 per cent of any investment profits.

Mr Buffett thinks this is money for old rope, a view it is hard to dispute in the case of the Madoff brokers. He has made a $1m bet with Protégé Partners, a New York fund manager, that an S&P 500 index fund will outperform five funds of funds, after fees, over 10 years.

Fraud aside, there are problems with the investment pitch that funds of funds make. Many sold the idea that they had access to the best hedge fund managers, who had closed funds to new investors.

Whatever the truth of that in the past, the industry cannot afford to be stand-offish now. "The days of managers who never opened the doors to new investors are gone," says Chris Jones, chief investment officer of Key Asset Management, a fund of funds.

I still believe there is a role for the good funds of funds, simply on numerical grounds. The hedge fund industry is so fragmented - with about 7,500 single manager funds and perhaps 2,000 funds of funds - that none but the very largest institutions can do all the work.

As for the billionaires, millionaires and assorted high net worth individuals who lost their money to Mr Madoff, there is little chance. Fraud is a real risk in the hedge fund world, filled with fancy promises and demands for secrecy, and the investors are ill-equipped to root it out themselves.

Two decades ago, hedge funds obtained most of their funds directly from individuals and family trusts. Now, there are many more funds to deal with and institutional money is steadily encroaching.

But funds of funds need to work harder and show that they actually contribute something valuable. The lack of safeguards on Mr Madoff's operations was breathtaking - a tiny auditor, no separate custody of assets or clearing of trades and so on.

The funds caught up in the scandal were hardly obscure. UBP is the biggest fund of funds in the world and Fairfield Greenwich and Tremont are both respected organisations, although Tremont invested money for a time with Bayou, a hedge fund uncovered as a fraud in 2005.

Nor is impossible for a fund of funds to do the legwork to ensure that hedge fund managers possess more than a glittering investment story and a secretive attitude.

"It is not as if this stuff is really complicated. A lot of the risk of fraud can be mitigated by measures that are low-cost and not very time-intensive," says Susan Mangiero, president of Pension Governance, a financial research group.

Mr Noel was a whizz at marketing both his family and Mr Madoff's supposed expertise. As the hedge fund industry has expanded rapidly in the past couple of decades, other funds of funds have also been able to make a fine living mainly by offering the promise of access.

The nitty-gritty stuff turns out to be more important. Doing worse than the S&P 500 is one thing; losing all your money is another. They were great, sexy times for funds of funds but that was in another country and besides, the illusion is dead.

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Brazil well-placed for the economic storm

By Nick Rice

Published: January 7 2009 17:59 | Last updated: January 7 2009 17:59

At the beginning of 2008, Brazil looked to many investors like the model of decoupling. Its financial system had little crossover with US subprime or investment banking in the developed world.

Its commodity exports, particularly iron ore, looked strong in an era of rocketing prices. But 2008 also highlighted the importance of Brazilian domestic consumption. Growth remained solid due to flourishing but conservative lending and well run groups in sectors such as retailing and telecoms.

At the start of 2009, all these factors potentially still apply, but with a key exception: the decoupling model has broken. Institutions have lowered their credit growth forecasts. Countries spending on infrastructure to stimulate their economies will need iron ore, so hard commodity prices could rise in the longer term. But the epic pricing power of the first half of 2008 is unlikely to repeat itself in the near future.

However, the economy remains much better placed to ride out the slowdown than it would have been in the past, as Andre Loes, chief economist at HSBC Brazil, explained at the World Federation of Investors Corporations’ congress in São Paulo.

“At the start of the 1990s, we had a very closed economy. We had a very weak balance of payments and hyperinflation. The state owned industries that it shouldn’t have,” he said. “In the late 1990s and early 2000s, we established an inflation-targeting regime. We approved a fiscal expenditure law. The state could only raise spending if it raised taxes.”

When high commodity prices, high interest rates and a strong currency entered the equation, the equity markets experienced powerful year-on-year growth. According to Brazilian stock exchange BM&F Bovespa, Brazil had seven IPOs in 2004 and nine in 2005. By 2006 it witnessed 26, while in 2007 it netted 64.

But by mid-September, the markets had seen just four new companies coming to market in 2008. Nor has the yield on Brazilian stocks incentivised investors to return. With the exception of utilities, domestic companies find it difficult to compete with high rates from savings accounts or government bonds.

However, in fixed income, this has proved extremely advantageous.

Even despite their conservative lending practices, Brazil’s banks are still forced by law to be among the best capitalised in the world. Financial uncertainty has also catalysed merger and acquisition speculation in Brazilian banking, which was started by the fusion of Banco Itaú and Unibanco towards the end of last year.

As Roberto Teixeira da Costa, the former chairman of Brazilian financial regulator CVM, put it when Lehman Brothers collapsed in September: “We are undergoing a crisis of confidence. When that sets in, it’s extremely serious.

“Morgan Stanley’s capitalisation is half that of Banco Itaú. These numbers astound us. We have no idea when confidence will come back. World trade will be affected. Investors will be affected. Your perception of risk changes at moments like this. Nevertheless, when the dust settles, Brazil will be in a good position.”

Nick Rice is chief reporter at Investment Adviser

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Monsanto boosted by South American demand

By Hal Weitzman in Chicago

Published: January 7 2009 17:22 | Last updated: January 7 2009 18:31

Monsanto, the world’s largest seed producer, brushed off the gloom in the corporate world on Wednesday as it said first-quarter profits had more than doubled and lifted its earnings outlook for the full year on the back of continuing strong demand in South America.

The company said its net income for the three months to the end of November – its fiscal first quarter – rose to $556m or $1 a share from $256m or 46 cents a share, in the same period a year ago. Excluding extraordinary items, Monsanto earned 98 cents a share, up from 45 cents in the previous year and well ahead of analysts’ expectations of about 59 cents.

Monsanto, best known for its genetically-modified seeds, said the healthy results were prompting it to raise its outlook for the year to $4.40-$4.50 a share from $4.20-$4.40 a share. Shares in Monsanto jumped 16 per cent to $84.69 in early afternoon trading in New York on Wednesday.

It attributed much of that to the strength of its South American business. Monsanto recently launched corn seed products in Brazil and Argentina.

“While no business is recession-proof, agriculture tends more than most to retain its intrinsic value in difficult times,” said Hugh Grant, chairman and chief executive.

“Fundamentally, our ability in tough times to grow market share, increase trait penetration and lift our financial commitments is the difference in being a technology company in an agricultural industry dominated by commodities and, unfortunately, by commodity mentalities.”

Monsanto’s bullish outlook bucks a trend among global agribusinesses. In Brazil, big farm lenders such as Bunge and Archer Daniels Midland have cut back on loans.

John Deere, the world’s biggest maker of tractors, has warned that demand for agricultural equipment could drop by a fifth this year in emerging economies as farmers find it increasingly difficult to access credit markets.

In the US, analysts expect farmers’ net incomes to drop this year by up to 42 per cent, while the Federal Reserve Bank of Kansas City has said that agricultural lenders are reporting tighter credit standards and that it expects reductions in the availability of funding.

“The strong start to the Latin American season is a huge positive,” said Terry Crews, finance chief.

“All signs point to the makings of a premium corn-seed business there. That said, we remain cautious from a credit perspective as we go into the second season in Brazil.”

Monsanto also said it had moved to the final phase of developing the world’s first drought-tolerant corn seeds. It said field trials for drought-tolerant corn conducted last year in the US had exceeded target yields and added that it had submitted the product to the Food and Drug Administration in the US for regulatory clearance ahead of a planned market launch “early next decade”.

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China eyes developed mine assets

By William MacNamara

Published: January 5 2009 17:26 | Last updated: January 5 2009 17:26

China looks set to expand its mining and metals holdings in developed economies, industry analysts and executives claim, as global mining companies in financial distress search for cash-rich, long-term investors.

China has focused its overseas resources acquisitions in the world’s least-developed countries – such as copper concessions in the Democratic Republic of Congo – but could now be poised to expand its reach into Canada, Australia and mining companies in other countries.

“The Chinese realise there are massive opportunities in the market,” said Keith Spence, president of Global Mining Corp, a China-focused resource investment company.

“A year ago, they were going to Africa to acquire early-stage development assets. But now they are looking for larger tonnage, longer life, later-stage assets. There is less of an emphasis on emerging markets, because now there is choice.”

Mr Spence is trying to raise a $250m fund that will target distressed mining assets in Canada, Australia, and South America. Sovereign wealth funds and “select Chinese companies”, should provide the capital.

His role will be to introduce Chinese and other investors to the growing numbers of Canadian junior miners who could use a “strategic investor” and an upfront cash deposit.

Moves to buy more developed mining assets would mirror the trends in the agricultural sector, where China has turned its attention away from Africa, instead buying assets in Latin American countries such as Brazil and Argentina.

Mining executives say that with no need to answer to shareholders, many state-backed companies can take a long-term view on the country’s demand for metals. Although industrial activity is slowing sharply in China, the government will step up spending on infrastructure as part of a fiscal stimulus package.

In addition, Chinese state-backed companies have more access to cash than their rivals in other countries.

“China has large foreign exchange reserves, and therefore Chinese companies which are government-backed have access to funds they can apply to assets outside China,” said Debbie Thomas, head of metals and mining at Deloitte.

Last month, in a takeover that could set a precedent for other Chinese companies, China’s third largest zinc producer, Zhongjin, bought a 50.1 per cent stake in Australian zinc miner Perilya for A$45m (US$32m, €23.6m, £22m). In Zhongjin, Perilya said it had found a “a strong and well-funded strategic partner committed to the long-term development of Perilya’s assets”. The deal will include an initial cash deposit of A$10m.

Perilya’s deal follows that of Albidon, an Aim-listed company that started producing nickel in Zambia just as the nickel price was crashing. In late November it raised $5m from its shareholder Jinchuan, which now owns 18 per cent of the company.

More importantly Jinchuan will take 100 per cent of the Zambian mine’s nickel for the life of the mine.

Meanwhile, Chinese aluminium company Chinalco has indicated it might raise its stake in Rio Tinto to nearly 15 per cent.

The deals highlight Chinese companies’ ability in the current market to access developed assets in relatively developed parts of the world. Mr Spence of Global Mining Corp acknowledged, “The Chinese companies we are looking at are also aware things have changed. Even though they have the money, they are also cautious.”

But such cautiousness looks bullish in a sector that is increasingly desperate. Smaller mining companies such as Albidon that have only a few assets, are finding it near-impossible to tap the London and Toronto markets for funds. This is pushing many of them towards bankruptcy or drastic cutbacks – in spite of, some executives protest, the underlying quality of their assets.

The field is open, executives say, for Chinese to buy stakes in both majors and juniors. “If I’m China Inc and I have $10bn, would I buy 60 per cent of Xstrata or a lot of reserves out in the middle of nowhere?” said Kalaa Mpinga, chief executive of Mwana Africa, an Aim-listed junior.

“If I had all these billions I would do this: buy 15 per cent of Anglo-American and get a seat on the board.”

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Asian pension systems at risk, says OECD

By Chris Giles in London

Published: January 7 2009 17:34 | Last updated: January 7 2009 17:34

It will soon be too late to save Asian state pension systems from running short of cash, the Organisation for Economic Co-operation and Development warned in a report on Wednesday.

Asia’s pension schemes suffered from the worst of all worlds, the report said, being “unlikely to be sustainable as populations age” as many “Asia/Pacific countries also face a problem of adequacy of retirement incomes”.

“There is now a narrow window for many Asian countries to avoid future pension problems and repeating many of the mistakes made in Europe and North America. But it will soon be too late,” the report concludes.

Although pension systems across Asia were diverse, the region was “ill-prepared for the rapid population ageing that will occur over the next two decades”, a process that would be more painful than that in the west where the transition to an older society had taken a century.

Relatively generous public pension schemes with low retirement ages were causing much of the problem. The most common retirement age across the 30 OECD rich countries was 65, but it was 59 for men in non-OECD Asian countries and 57 for women.

Given rapidly rising longevity in Asia, the expected time men will spend in retirement in many emerging countries is 20.3 years, two years longer than in the west. “Women in Sri Lanka,” the report said, “who can retire at age 50, can expect 33 years of retirement, most likely a longer period than they were working and contributing.”

Edward Whitehouse, the author, said China would have to levy charges of 50 per cent of salaries to fund the current pension system when it reached a steady state. The equivalent figure for advanced OECD countries was 10-20 per cent.

Not only were public pensions systems becoming unaffordable in Asia, they were also inadequate for most pensioners, it said. There were many gaps in the formal coverage of pension systems, employees were commonly allowed to withdraw savings from schemes before retirement and payments were generally not adjusted for changes in the cost of living.

The OECD recommended quick reforms to spread payments more equitably, raise retirement ages and pay entitlements as an annuity.

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Lights are turned off as cold war spreads

By FT Reporters

Published: January 7 2009 19:13 | Last updated: January 7 2009 19:13

Ivan Yotov, a 24-year-old Bulgarian student, changed the venue for his Saint’s day party on Wednesday, because the gas supply had been cut at the restaurant he booked in Sofia, the capital.

The holiday atmosphere was abruptly ended in Sofia as Orthodox Christmas lights were switched off to conserve electricity.

“We were expecting about 20 people,” Mr Yotov said. “Now we’ll have the party at my family home – at least we have a open fireplace to burn logs and keep warm, but there won’t be any room for dancing.”

Millions of people in south-east Europe are directly affected by the cut-off in Russian gas shipped across Ukraine to southern, central and western Europe.

The first to suffer have been consumers in countries with little domestic gas production and limited domestic gas storage, including Bulgaria and Greece. But with reserves being rapidly drawn down across the continent because of cold weather, it may not be long before other east European consumers find their pilot lights going out.

City heating utilities across Bulgaria cut output by one-third to conserve gas supplies. At least 45,000 households were without central heating, Reuters reported, and about 80 schools asked for permission to close. With Sofia residents turning to electric heaters, power outages were reported in some areas because of overloading of the grid, even though the authorities ordered street lighting and Christmas decorations to be switched off.

In Serbia, where Orthodox Christmas was celebrated on Wednesday, families bundled up warmly as they gathered to tuck into their traditional roasted pig.

Central heating systems, covering two-thirds of Belgrade along with much of the country, normally keep households heated to at least 20º C during the winter. The Belgrade heating utility capped the temperature at 16º-18º to conserve gas and heating oil.

In the northern city of Novi Sad 80,000 people had their heating shut as gas supplies dwindled last night.

“I don’t want to spread panic, but this is the most serious situation we have ever found ourselves in,” said Dusan Bajatovic, director-general of Srbijagas, the state-run gas distributor, on local television.

In Romania, the government declared a state of emergency, even though it has considerable domestic gas production. Adriean Videanu, economics minister, said the emergency powers would allow Transgaz, the partially state-owned distributor, to prioritise deliveries and minimise the effect on households, if necessary by cutting supplies to industry.

Ovidiu Chiorean, a Bucharest-based consultant, said: “Beyond the media fuss and agitation, there is no real panic for Romanian consumers. I can’t feel the cold at home or in the office.”

Industry is being asked to cut consumption in south-east and large swaths of eastern Europe. Manufacturers preparing for reductions include Wienerberger, the Austrian brickmaker with extensive east European investments; US Steel, which has a plant at Kosice in eastern Slovakia; and Slovnaft, the Slovakian refinery controlled by Hungary’s Mol.

In Hungary, industry was urged to prepare for reductions. In Poland, where the reliance on the Ukrainian gas transit routes is limited because of alternative supplies coming from Russia via Belarus, Pulawy and Police, the big fertiliser companies, have reduced output.

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ECB shuts its ears to rate cut call

By Ralph Atkins in Frankfurt

Published: January 7 2009 23:38 | Last updated: January 7 2009 23:38

The European Central Bank is showing few signs of succumbing to mounting calls to slash interest rates at its critical monetary policy meeting next week and now appears more likely than not to leave them unchanged or modestly reduced.

ECB policymakers enter their pre-meeting “purdah” week on Thursday, when they avoid public comment, without having sent any clear sign that their thinking has changed since early December. At that time, Jean-Claude Trichet, the ECB president, said interest rate cuts already announced and government rescue packages should be allowed to take effect – and warned of the risks of cutting borrowing costs too far.

That did not rule out a reduction at Thursday’s meeting, even one larger than a quarter percentage point, but nor did Mr Trichet’s comments make a cut a certainty. “The ECB’s consensus and stability-based approach implies that there is likely to be significant caution about further substantial easing,” said Julian Callow, Europe economist at Barclays Capital.

In December, the main policy rate was slashed by an unprecedented 75 basis points to 2.5 per cent, making the total reduction since early October 175 points. The economic outlook has since deteriorated further, fuelling speculation that another large cut is possible.

Germany saw unemployment rising for the first time in three years on Wednesday; eurozone inflation could turn negative in the coming months on the back of lower oil prices; and producer prices saw a record fall in November, according to data on Wednesday.

The ECB is not a dedicated follower of fashion, however. Financial markets have shown some signs of stabilising, allowing a return to a more normal approach to monetary policy – with inflation risks at the top of its mind.

Of little relevance are short-term falls in inflation, which will boost consumer spending power, stimulating growth. More important is the long-run outlook. José Manuel González-Páramo, an ECB executive board member, told a Spanish newspaper that monetary policy would continue to be “orientated towards its credibility in guaranteeing medium-term price stability”.

When oil and food prices are stripped out, eurozone inflation has remained more stable. While bond markets have priced in deflation in the US, expectations for eurozone inflation over the next five years do not necessarily point to a significant undershooting of the ECB’s target of an annual rate “below but close” to 2 per cent, weakening the case for early action.

Eurozone interest rates almost certainly have further to fall. If the main rate is not cut next Thursday, the February policy meeting is only three weeks later. Some policy easing is already in the pipeline – from January 21, the rate paid by the ECB on overnight deposits will fall by half a percentage point.

But the strict, inflation-oriented strategy does not fit with the approach in the US, where a popular view is that interest rates should be cut as fast as possible.

In another contrast to the US Federal Reserve, many at the ECB would not want interest rates falling too close to zero – even if there is no agreement where the floor should be.

“We have to beware of being trapped at nominal levels that would be much too low,” Mr Trichet, who sees the ECB as providing an anchor of stability, remarked last month.

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Temasek’s Merrill losses could exceed $2bn

By Saskia Scholtes and Greg Farrell in New York

Published: January 7 2009 23:13 | Last updated: January 7 2009 23:13

Temasek, the Singapore state investment fund, is sitting on significant paper losses related to its stake in Merrill Lynch, the investment bank acquired by Bank of America last week.

The state agency’s unrealised losses could amount to more than $2bn, excluding any hedges, according to a Financial Times analysis based on publicly available filings.

The loss is emblematic of the damage the financial crisis has wrought on sovereign wealth fund investments in the banking sector and helps explain why funds have been reluctant to commit further capital to banks.

Some 40 per cent of Temasek’s portfolio is in the financial sector, and it has suffered paper losses on other investments, including Barclays, Bank of China and China Construction Bank.

Temasek on Monday disclosed it had converted its 13.7 per cent stake in Merrill into BofA shares following the acquisition.

On December 31, the last day of trading before the deal closed, Temasek’s remaining stake in Merrill, for which it paid an average of $23 a share, had dropped to $12.10.

After ploughing $5bn into Merrill between December 2007 and February 2008, and with a further $900m commitment last summer, Temasek owns 189m BofA shares, according to Monday’s disclosure. At Wednesday’s opening price, they were worth $2.7bn.

However, Temasek appears to have sold more than 30m shares of Merrill stock in the first and third quarters of 2008, according to regulatory filings. Even if Temasek sold at the lowest possible prices in these periods, the sales would have generated a modest profit to defray some of Temasek’s unrealised loss.

Temasek declined to comment.

It could have been worse. Temasek’s initial investment allowed it to buy more than 104m shares at $48 per share.

But after Merrill was forced to raise further capital in July, the terms of Temasek’s original investment were reset. This effectively bought Temasek 151m new shares in Merrill for just under $6 per share, bringing the average price paid per Merrill share to a little over $23.

Temasek’s investment suffered again in September, as Merrill shares plunged on concerns about the US banking sector.

But any losses seemed to vanish when BofA agreed to buy Merrill in an all-stock deal which valued the latter at $29 a share. BofA’s shares have since slumped, however.

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Timeline: The Satyam scandal

By James Fontanella-Khan in Mumbai

Published: January 7 2009 11:12 | Last updated: January 7 2009 11:12

The chairman of India’s Satyam Computer Services on Wednesday confessed to fixing the IT outsourcing company’s books for the past “several” years, the country’s first major fraud case to emerge following the global financial crisis. Below are the recent events that led to Ramalinga Raju’s resignation.

Dec 16: Satyam announces the $1.6bn acquisition of two companies controlled by the family of Ramalinga Raju, chairman of the IT outsourcer. However, Satyam aborts the deal seven hours later due to a revolt by investors who oppose the takeover. Satyam shares plunge 55 per cent in New York.

Dec 17: Mr Raju says Satyam is considering a share buyback in a move to regain investors’ confidence after its stock plunged. Citigroup, JP Morgan and Merrill Lynch downgrade Satyam and slash their share price estimates by up to half. Satyam shares end the day down 30.2 per cent in Mumbai.

Dec 23: The World Bank bars Satyam from doing business with it for eight years in one of the most severe penalties by a client against a large Indian outsourcing company. On the day the stock drops a further 13.6 per cent, its lowest in more than four-and-a-half years.

Dec 25: Satyam asks the World Bank to withdraw the ”inappropriate” statements about the Indian outsourcer and to issue an apology for the harm done to the company

Dec 26: Mangalam Srinivasan, an independent director at Satyam, resigns following the World Bank’s critical statements and the botched attempt to buy two companies controlled by Mr Raju’s family.

Dec 28: Satyam postpones a board meeting set for December 29, where it was expected to announce a management shake up, to January 10. The move aims to give the group more time to mull options beyond just a possible share buyback. Satyam appoints Merrill Lynch to review “strategic options to enhance shareholder value”

Dec 29: Three more directors quit the company as the independence of the board members is questioned

Jan 2: Satyam says its founder’s stake fell by a third to 5.13 per cent.

Jan 5: Satyam shares tumble 9 per cent after the London-based World Council for Corporate Governance, which awarded Satyam a Golden Peacock last year, said it was seeking legal advice to understand the mechanics of the aborted takeovers as part of its effort to re-assess whether Satyam still deserved the award.

Jan 7: Mr Raju resigns after he admits falsifying Satyam books.

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The $1bn black hole at heart of company's finances

By Joe Leahy

Published: January 8 2009 02:00 | Last updated: January 8 2009 02:00

On the investor page of Satyam Computer Services' website yesterday was a box announcing results for the quarter ended September.

The box, which had not been changed since before the scandal began, kicked off with a bullish introduction from B Ramalinga Raju, the founder and now former chairman of the country's fourth largest software group.

"I am pleased to announce a better-than-guided performance for the second quarter of fiscal year 2009," Mr Raju said. "We achieved this in a challenging global macroeconomic environment."

In fact, by Mr Raju's own admission yesterday, the company achieved this by rigging the accounts from top to bottom - and not just in September but over the past several years. In the process he perpetrated a fraud so large, complex, and brazen that Indian business people are already calling it the country's "Enron".

"This is not pocket change we're looking at here, these are really, really large numbers," said Prof Sandeep Parekh at the elite Indian Institute of Management in Ahmedabad and a former executive director at the Securities and Exchange Board of India, the stock market regulator.

"Obviously a lot of people were paid to go to sleep at the wheel or were kind of winking at the last moment. I don't think this is a negligence-based thing - there will be many people implicated in this."

The first inkling most investors received that something was wrong at Satyam was late last year when Mr Raju and the board suddenly approved the $1.6bn acquisition of the Maytas infrastructure and property companies controlled by his family.

However, Mr Raju abandoned the deal within hours, after a rebellion from institutional shareholders.

The transaction would have depleted the company's more than $1bn in cash and left it with net debt of around $400m. At the time it was seen as a blatant attempt by the controlling family to raid the group's cashpile.

But gradually it emerged that Mr Raju was in much deeper trouble.

He revealed to the Bombay Stock Exchange that his 8 per cent stake in the company had been pledged to institutional lenders in return for loans. After the shares plunged in line with the global financial crisis, these institutions had begun liquidating the stock to cover margin calls.

With his stake in the company dwindling and faced with the possibility of being ousted from his management role, he seems to have had little choice but to come clean.

He said the company had rigged its results over a succession of quarters to show a large operating profit margin, in the range of 20 per cent, versus the actual margin in the September quarter of just 3 per cent.

At the heart of the fraud, though, is a Rs53.61bn ($1.1bn) cash balance that Mr Raju now claims was mostly "fictitious". At least Rs50.04bn of this amount never existed and was an accumulation of previous overstatements of company profit.

The letter he wrote to the board reads like the words of a villain in a Bond film helpfully laying out his whole dastardly plan for his audience at the end of the movie.

"The aborted Maytas deal was the last attempt to fill the fictitious assets with real ones," Mr Raju said.

He claimed he had not benefited "one rupee" from the fraud and that no board members knew of it. "I am now prepared to subject myself to the laws of the land and face the consequences thereof," Mr Raju said.

But others scoff at suggestions only a few people could have known of the scam.

"Although the regulations are there, there has been total negligence in the implementation, otherwise there is no way such a big fraud can happen by oversight alone," said Suresh Sarana, of RSM Astute Accounting Group.

The country's regulators, including Sebi and India's Institute of Chartered Accountants, have promised an investigation. Under the spotlight will be the role of PwC, the company's auditor, which last night said it was examining Mr Raju's statement.

Aside from stricter oversight of auditors, analysts believe the rules governing independent directors will need to be tightened to force them to be more accountable.

Questions are also being asked about governance at India's other family dominated businesses.

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Philippines completes 1.5 billion-dollar bond issue

3 hours 1 min ago
AFP

* Print Story

The Philippines said Wednesday it had raised 1.5 billion dollars in a 10-year bond issue to stem a shortfall in revenue this year caused by slowing economic activity.

Asia's first international sovereign bond for this year attracted around six billion dollars in demand from global investors, Dow Jones Newswires reported, quoting a Philippines finance department statement in Singapore where the float was launched.

"The transaction fulfills the government's expected external funding requirements for 2009 and represents an important success for the Philippines," Finance Secretary Margarito Teves said in the statement.

"We are hopeful that our success will bode well for other Philippines and Asian borrowers," he added.

The public offshore bond market has not seen a deal out of Asia since the global credit crisis took hold in September, the report said.

Pricing was at the tight end of the indicative yield range of 8.50 and 8.75 percent touted to investors Wednesday, it added.

The issue was lead-managed by Credit Suisse, Deutsche Bank and HSBC Holdings.

Manila will use the proceeds to help finance a programmed budget deficit of 102 billion pesos (2.2 billion dollars) this year.

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Madoff tried to hide jewels, gold: prosecutor

10 hours 24 mins ago
AFP

* Print Story

A diamond necklace and Cartier watch are among the items disgraced Wall Street financier Bernard Madoff has tried to hide since his arrest on charges of running a massive fraud, prosecutors allege.

Prosecutors in New York on Wednesday released details of their request for the court to jail Madoff pending trial because of alleged attempts to dispose of property, in violation of his bail terms.

The request was first made Monday at a court hearing.

Madoff's lawyers were due to submit their response Wednesday and the government side has until midday Thursday to make a further submission.

The chambers of the presiding magistrate, Judge Ronald Ellis, told AFP that a decision on whether or not to jail Madoff was likely either Friday or Monday.

Prosecutors say Madoff, who allegedly confessed to losing some 50 billion dollars in a giant pyramid fraud, is a "danger to the community" because he has not respected the bail terms.

They alleged Wednesday in a written motion that Madoff "sent a package containing a total of approximately 13 watches, one diamond necklace, an emerald ring, and two sets of cufflinks. The government has been informed that the value of those items could exceed one million dollars."

Madoff also allegedly mailed a Cartier diamond watch, a Tiffany diamond watch, four diamond brooches and other jewelry to relatives.

The items are now in government custody, the prosecutor's office said.

Madoff, 70, was arrested December 11 and released on a 10-million-dollar bail.

He was subsequently placed under 24-hour house arrest in his luxury Manhattan apartment and has also had his assets frozen.

Madoff's lawyer, Ira Sorkin, told the court the items had been sent innocently and did not violate the bail.

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Germany plans 100-bln-euro company financing scheme: MP

11 hours 56 mins ago
AFP

* Print Story

The German government plans to offer up to 100 billion euros (137 billion dollars) in help for companies that are experiencing financing difficulties, the head of the parliamentary group CDU-CSU Volker Kauder said Wednesday.

The assistance in the form of guarantees is designed for companies struggling to secure funding from banks or which are unable to raise capital in the financial markets, Kauder told the daily General Anzeiger newspaper, which issued a statement.

"As long as banks are not increasing their appetite to award loans, the public powers must make investments possible for our economy by making loans available," he said according to the interview to be published Thursday.

The German government offered 400 billion euros in guarantees to the banking sector in the midst of the financial crisis last year. The guarantees were designed to free up interbank lending, which had frozen.

State backing would help companies that faced problems in obtaining bank financing or issuing corporate bonds at reasonable rates.

The Financial Times Deutschland had reported earlier that the company guarantee plan was being considered by the government.

The German government is a coalition of the conservative CDU/CSU and the Social Democrat SPD.

Also on Wednesday, data showed that German unemployment in December rose for the first time in 33 months, with over three million people out of work as the recession in Europe's economic powerhouse begins to bite.

Putting further pressure on Chancellor Angela Merkel's government to counter what is forecast to be Germany's deepest post-war slump, the labour office said the number of jobless had risen in December by 114,000 to 3.1 million.

In recent months, the German jobs market has shown surprising resilience in the face of the economic crisis but officials and analysts warned that the tide had now definitely turned.

The labour office acknowledged that the "positive underlying trend" in employment had now changed.

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Suicide billionaire's German empire reaches rescue deal

Yesterday, 06:25 pm
AFP

* Print Story

Two days after German billionaire Adolf Merckle threw himself under a train, his troubled industrial empire said Wednesday it had reached a rescue deal with banks but with strings attached.

Under the terms of the agreement, which Merckle himself had been negotiating prior to his suicide near his home late Monday, his VEM group said it has secured a bridging loan from a consortium of lenders.

But in return -- sources told AFP the loan is worth 400 million euros (545 million dollars -- VEM has to sell its generic drug company Ratiopharm and Merckle's son Ludwig has to leave the firm, a statement said.

Ratiopharm employs 5,400 people and last year posted sales of 1.8 billion euros (2.5 billion dollars). Merckle's reportedly heavily debt-ridden group also includes cement giant HeidelbergCement and drugs wholesaler Phoenix.

The global financial crisis pushed his businesses onto the rocks and Germany's fifth richest person also lost a considerable part of his fortune after betting the wrong way on Volkswagen shares last year.

For now it appears that the Merckle empire, which employs some 100,000 people and has revenues of 35 billion euros, will not be fully broken up, although auditors KPMG are still combing through its books.

"Only Ratiopharm is mentioned in the agreement," a spokesman for the firm told AFP.

The body of the 74-year-old Merckle, who was worth more than nine billion euros and was 94th on the Forbes rich list, was found near train tracks on Monday evening after he had been reported missing by his family.

The Bild daily reported that the driver of the train that killed Merckle did not even notice what happened and that the body lay there for two hours before it was seen by another driver at around 7:30 pm (1830 GMT).

Prosecutors said an identification -- which is yet to be formally confirmed -- was only possible with DNA testing.

Merckle left behind a suicide note apologising to his wife Ruth and their four children, Bild said.

On Tuesday, the family said that the damage done by the financial crisis and the "powerlessness of not being able to do anything, broke this passionate family businessman and he ended his life."

Born in Dresden in eastern Germany in 1934, Merckle inherited in his mid-30s a pharmaceuticals company from his father with just 80 employees. Step by step, he built this up into the giant it is today.

He embodied the type of shrewd family businessman that form the backbone of Europe's biggest economy and in particular that of the wealthy Swabia region of Baden-Wuerttemberg in south-west Germany.

Merckle was a man of unremarkable and grandfatherly appearance who enjoyed mountain holidays in the Andes and Himalayas.

He avoided publicity and lived relatively frugally and unostentatiously in the small town of Blaubeuren.

"I have already survived quite a lot of 'stock market crashes'," Merckle said in a rare press interview last month. "But I was not prepared for a banking and financial crisis on this scale."

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No Thaw In Icelandic Relations

Yesterday, 01:34 pm
SkyNews Sky News

* Print Story

Lawyers for what was once Iceland's biggest bank are due to file a High Court lawsuit later against the British government.

Kaupthing Bank is suing Britain over a decision to place the bank's British arm in administration.

The Treasury placed Kaupthing Singer and Friedlander in administration on October 8, at the height of Iceland's financial crisis.

Officials said the action was aimed at protecting British retail depositors as the country's financial system collapsed as the credit crunch kicked in.

Iceland took control of Kaupthing a day later.

It has argued that Britain's actions helped bring about Kaupthing's failure prematurely.

"The Resolution Committee of Kaupthing has decided to sue the British Government and has the full support of the government," a press release from the Icelandic prime minister's office said.

Iceland has long been angry at Britain's handling of the situation.

The use of anti-terror legislation to seize the assets of Icelandic bank Landsbanki infuriated Iceland.

Prime Minister Geir Haarde referred to the matter repeatedly in the weeks that followed, always holding out the possibility of a lawsuit.

A Treasury spokesman said the Treasury was not aware of any legal action.

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China to keep closer eye on firms investing abroad: govt

2 hours 13 mins ago
AFP

* Print Story

China plans to tighten up supervision of domestic companies looking to invest overseas, the government said, after some high-profile investments abroad turned sour amid the global economic crisis.

The Ministry of Commerce will require Chinese companies to seek its approval for overseas investment of 100 million dollars or more, according to draft rules published on its website late Wednesday.

Companies will also need the ministry's approval for investments in countries that have no diplomatic relations with Beijing, overseas infrastructure projects or countries and regions with high risks, it said.

Non-central government firms will need approval from provincial branches of the commerce ministry for overseas investments of between 10 million and 100 million dollars.

The same applies for non-central government companies looking to invest in overseas energy and mining companies and real estate development projects of any size, it added.

The new draft rules, which will replace existing rules that came into force in 2004, are aimed to "promote and regulate overseas investments," the ministry said.

The ministry is soliciting public opinion on the draft rules until January 20.

Under existing rules, companies directly controlled by the central government need to apply for the ministry's approval for investments abroad while other firms only need the nods from the its provincial branches.

There were no monetary details of investments that would need approvals in the existing rules.

The move came after a few domestic firms faced severe criticism at home for their investment choices after the global financial crisis led to heavy paper losses, or unrealised losses, on investments that have yet to be cashed in.

China's second biggest insurer, Ping An Insurance Group, has booked such losses of 15.7 billion yuan (2.3 billion dollars) on its investment in embattled European financial group Fortis.

China Investment Corp, the country's 200-billion-dollar sovereign wealth fund, has also suffered hefty paper losses on its investments in Wall Street bank Morgan Stanley and private equity firm Blackstone Group.

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Kremlin lays down terms as gas crisis engulfs Europe

7 hours 55 mins ago
AFP Dario Thuburn

* Print Story

Russian President Dmitry Medvedev on Wednesday laid down terms for a resumption of Russian gas shipments via Ukraine to Europe as tens of thousands of Europeans suffered heating cuts amid freezing weather.

Russian energy giant Gazprom earlier announced a halt to all gas transit to Europe through Ukraine, around one-fifth of the European Union's gas demand, saying it had been forced to do so because Ukraine was blocking transit.

Medvedev told Ukrainian President Viktor Yushchenko that Ukraine must pay market rates for Russian gas, pay its gas debts and allow a new "control mechanism" involving EU observers to verify gas flows through its territory.

Speaking to Yushchenko in a phone conversation ahead of EU-brokered talks between Russian and Ukrainian energy officials set to take place in Brussels on Thursday, Medvedev also said that Moscow was ready to negotiate "any time."

"The price for the gas needs to be the market rate, corresponding to the European price level ... There must not be any discounts or special rates at all," Medvedev was quoted as saying in a Kremlin press service statement.

"For the resumption of gas supplies, there needs to be a control mechanism in place" with the participation of Russian and Ukrainian energy officials, EU observers and international legal firms, Medvedev continued.

Yushchenko, for his part, proposed the creation of a commission made up of representatives of Russia, Ukraine and European consumers to resolve the dispute, according to a statement by the president's press service.

Medvedev's comments appeared to summarise terms already laid out by various Russian officials, including Prime Minister Vladimir Putin.

Russia stopped gas deliveries to Ukraine on January 1 in a dispute that has seen supplies fully cut to at least 11 European states as temperatures in parts of Europe plunged as low as minus 25 degrees Celsius (minus 13 Fahrenheit).

There has been sharp condemnation from the United States, where national security advisor Stephen Hadley said Russia would lose global influence if it continued to "threaten its neighbours and manipulate their access to energy."

Dmitry Peskov, a spokesman for Putin, said efforts to portray Russia as the guilty party in the dispute were politically-motivated and did "not reflect reality." He accused Ukraine of trying to "blackmail European customers."

In France, where gas network operator GRTGaz said Russian gas supplies had nearly stopped later Wednesday, Prime Minister Francois Fillon condemned the situation as "totally unacceptable."

"The prime minister believes the current situation represents a challenge to the whole of Europe.... This failure to respect contracts is totally unacceptable," said a statement issued by the premier's office.

Efforts to resolve the crisis have gathered pace, with Russian, Ukrainian and European officials set to meet in Brussels on Thursday to discuss the idea of using international monitors to check gas flows from Russia via Ukraine.

The heads of Gazprom and Ukraine gas company Naftogaz were set to take part.

"Russia will resume its deliveries when the observer groups are in place," Czech Prime Minister Mirek Topolanek, whose country currently holds the EU's rotating presidency, told journalists at an EU meeting in Prague.

Topolanek promised a "stronger intervention" from the EU if supplies were not restored by Thursday.

He also said EU energy ministers would hold an extraordinary meeting on Monday if Russian gas imports through Ukraine are not restored.

Despite harsh rhetoric between Moscow and Kiev, both Putin and Ukrainian Prime Minister Yulia Tymoshenko said in separate comments on Wednesday that they supported the idea of sending EU technical observers to Ukraine.

Meanwhile, Romania declared a state of emergency and 70,000 households in the Bosnian capital Sarajevo were without heating. Bulgaria turned off heating on public transport in Sofia and temperatures in homes fell sharply.

Austria, Bosnia, Bulgaria, Croatia, the Czech Republic, Greece, Hungary, Macedonia, Romania, Slovakia and Slovenia have said that all their supplies of Russian gas had been cut off.

France, Germany, Italy and Serbia have also reported drastic falls in Russian gas supplies. Poland and Turkey said supplies from Ukraine had been completely cut but were getting increased amounts through different pipelines.

Experts have said however that the impact of the crisis would be mitigated by the fact that European countries consciously stocked up reserves after a similar Russia-Ukraine dispute caused shortfalls in 2006.

Russian state television broadcast a meeting between Putin and former German chancellor Gerhard Schroeder, head of a Baltic gas pipeline project to Germany that Russia is pushing as an alternative to supplies through Ukraine.

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水産物の直接取引、国の支援に懸念　卸業界など農相に申し入れ

　水産物卸で構成する全国中央市場水産卸協会など3団体は8日、漁業者と大手小売りによる水産物の直接取引を、国が助成していることについて懸念を示す要請書を石破茂農相に提出したと発表した。同協会などによると農相は支援をやめる意向は示さなかった。漁業者の団体である全国漁業協同組合連合会と卸売業界などがこの問題で協議していくことで合意したという。

　漁業者側は水産物は地方の市場を経由することでコストがかさみ、小売価格に対して漁業者の手取りが抑えられていると主張。市場を経ない直接取引の水産物は新鮮で、漁業者の手取りも増えるとして拡大している。ただ、水産卸協会などは鮮度が落ちやすい水産物は野菜などに比べて安定供給が難しく、市場の調整機能が必要と強調。一部の小売り大手や漁業者を財政支援する国の政策を非難した。(22:01)

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大手損保６社、自動車保険料収入1.3％減　08年４―12月

　東京海上日動火災保険など大手損害保険6社の2008年4―12月の営業成績が8日、出そろった。新車販売の低迷を受けて主力の自動車保険の保険料収入が前年同期比1.3％減の2兆2627億円。一方、電話やインターネットで加入を受け付ける直販損保は割安な保険料をてこに価格に敏感な消費者の支持を集めている。

　昨年の新車販売がガソリン高や景気の冷え込みを受け28年ぶりの低水準にとどまった。大手6社ではニッセイ同和損害保険を除く5社が自動車保険で減収。 08年度から保険料が下がった自動車損害賠償責任保険（自賠責）の影響を除いた全体の保険料収入は前年同期比で横ばいの4兆1477億円となった。

　一方、直販損保のソニー損害保険、アクサ損害保険、三井ダイレクト損害保険の保険料収入は合計で13.7％増の845億円。自動車保険全体におけるシェアはまだ小さいが、09年は景気悪化で消費者が大手から直販に乗り換える動きが広がる可能性もある。(21:01)

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経団連会長講演「雇用安定へ最大限の努力」　労組とも協議

　日本経団連の御手洗冨士夫会長は８日、東京都内で始まった「労使フォーラム」で講演し、「（企業は）雇用の安定に最大限の努力を注いでもらいたい」と語り、雇用対策に重点を置くよう求めた。また雇用の安全網を整備する重要性にふれ、「雇用対策について労働組合とも話しあっていきたい」と述べた。

　同フォーラムは経団連と連合による春季労使交渉の前哨戦ともなる。春季労使交渉の見通しについて御手洗会長は「連合が物価上昇分のベアを要求する方針などを固め、極めて厳しいものになると予想される」と述べた。国内の景気は「日を追うごとに悪化している」と指摘したうえで、雇用情勢は「一層悪化する恐れがある」との懸念を示した。

　今年の交渉では働き手の労働時間を短縮し、雇用の維持に努めるワークシェアリング（仕事の分かち合い）などが議題になる見通し。「（各企業は）今回のような経済危機のときにこそ労使関係の真価が問われる。存続と中期的な発展をみすえながら交渉に臨んでほしい」と語った。(12:15)

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九電、川内原発増設を自治体に申し入れ　国内最大159万キロワット

　九州電力は8日、川内原子力発電所（鹿児島県薩摩川内市）３号機の建設を地元自治体の鹿児島県と薩摩川内市に正式に申し入れた。３号機は1基当たりで日本最大となる出力159万キロワットを予定しており、2019年度の運転開始を目指す。運転時に二酸化炭素（ＣＯ2）を排出しない原発は環境対策の面から見直されており、電力会社の間で原発の新増設計画が相次いでいる。

　同日、九電の真部利応社長が鹿児島県の伊藤祐一郎知事、薩摩川内市の岩切秀雄市長を訪ね、３号機建設について説明し理解を求めた。地元の合意や国の許可などを得て計画通りに進めば、同社としては7基目の原発となる。

　３号機の原子炉の炉型は改良型加圧水型軽水炉で、出力は159万キロワットを予定。日本原子力発電が着工準備を進める敦賀原発３、４号機（福井県敦賀市、それぞれ153.8万キロワット）を上回り国内最大となる見通し。総事業費は約5400億円。(22:01)

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ニチイ学館、ダスキンの介護関連事業を買収　最大１億8000万で

　ニチイ学館は8日、ダスキンから訪問介護など介護関連事業を買収すると発表した。買収額は最大で1億8000万円。ニチイは4月から介護報酬の増額が決まったのを受けて事業規模を拡大する。両社は今後、高齢者向けの家事支援サービスなどで協力、9月末までに1億円を相互に出資する。

　ニチイは4月1日付でダスキンの介護子会社、ダスキンゼロケア（東京・港）の訪問介護やデイサービスなどの事業を引き継ぐ。同社は2004年の設立で、売上高は約25億円。介護報酬引き下げなどの影響で赤字経営が続いていた。

　ダスキンは大半の介護事業から撤退するが、車いすや介護用ベッドなど福祉用具のレンタル事業は続ける。今後は高齢者向けの家事支援サービスで、ニチイに人材教育を依頼する計画。このため両社は1億円を相互出資して提携する。出資比率はともに1％未満の見込み。(22:01)

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11月の旅行取扱額、海外は15％減　03年以来の減少率

　観光庁が８日発表した11月の主要旅行会社63社の取扱額は、海外旅行が前年同月比15.2％減の1893億7300万円だった。減少率はイラク戦争の影響に重症急性呼吸器症候群（ＳＡＲＳ）の流行が重なった2003年９月（18.1％減）以来の大きさで、景気後退や消費者心理の冷え込みが旅行業界を直撃している。前年割れは６カ月連続。国内旅行も3597億4400万円と3.0％減少した。

　外国人の訪日旅行も合わせた全体の取扱額は前年同月比7.7％減の5553億9900万円。４カ月連続のマイナスだった。(18:01)

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相続財産を無断処分　遺族が三菱ＵＦＪ信託を提訴

　夫から相続した投資信託や米ドル預金を無断で処分され損害を受けたとして、東京都在住の無職の女性（66）が8日、三菱ＵＦＪ信託銀行に約735万円の損害賠償を求める訴えを東京地裁に起こした。

　訴状によると、女性は2007年に死亡した夫から米ドル預金と投資信託を相続し、三菱ＵＦＪ信託と遺産整理業務の委任契約をした。しかし、三菱ＵＦＪ信託は無断で投資信託を売却して現金化したほか米ドル預金を円と交換した、としている。女性は「依頼したのは名義変更だけ」と主張し、損失分を請求している。

　三菱ＵＦＪ信託銀行の話　訴状が届いておらずコメントは差し控える。(22:01)

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テレビ通販、トラブル増加　「返品できず」注意呼び掛け

　「実演と違って効果がない」「返品を受け付けてもらえない」などと、テレビ通販を巡るトラブルが増えている。国民生活センターは、誤解を与えるような宣伝や契約条件などが映像で十分に表示されていないといった問題点を指摘。一方で自らの判断で申し込む通販はクーリングオフ制度の対象外で、消費者側にも制度の理解と注意を呼びかけている。

　大阪の60代の女性は2008年６月、「会員になると20％引き」との番組を見て化粧品を購入。その後も商品が送られ定期購入だったことに気付いたが、返品は受け入れられなかった。千葉の60代の女性も同年10月、「クリームをつけたその日は１日、しわやたるみが伸びる」との実演にひかれ購入したが、テレビのような効果は得られなかったという。(16:00)

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出入国者：入国の外国人５年ぶり減少

　法務省入国管理局は８日、０８年の出入国者数の速報値を発表した。日本に入国した外国人は９１４万６４１６人で、０７年比０．０６％減と５年ぶりに減少に転じた。世界的な景気後退の影響などが原因とみられる。一方、日本人の出国者は１５９８万７２４０人で、０７年比７．６％減。景気後退に加え、原油価格の高騰で航空運賃が上昇したことが、主な原因とみられる。

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雇用調査：企業の２６％が従業員削減　帝国データバンク

　帝国データバンクは８日、全国の企業を対象とした雇用に関する調査結果を発表した。景気悪化を理由に非正社員を含む従業員を削減したり削減を検討している企業の割合は２６．９％に上り、雇用情勢の深刻化を裏付けた。

　調査は、昨年１２月１７日～今年１月５日、２万４５５社を対象に実施し、１万７３１社から回答を得た。

　昨年末までに従業員を削減した企業は１５．４％、今年以降に削減を検討している企業は２２．４％（重複回答があるため、合計とは一致しない）。

　業種別は、製造業の３５．７％が削減を実施または検討と回答。自動車関連の「輸送用機械・器具製造」は６０．２％に達した。回答では「業務量が急激に減少し、背に腹は代えられない」などの声が多かった。

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子育て特別手当：親子４人で１０万円　年度内支給へ

　厚生労働省は８日、０８年度第２次補正予算案に盛り込んだ第２子以降の３～５歳の子どもに１人当たり３万６０００円を支給する「子育て応援特別手当」について、（１）支給対象は０２年４月２日～０５年４月１日生まれ（２）第１子の条件は「１８歳以下（９０年４月２日～０５年４月１日生まれ）」－－とすることを決めた。支給は０８年度限りで、年度内の支給を目指す。定額給付金同様、所得制限を設けるかは市町村が判断する。

　父母と支給対象の子どもを抱える４人家族の場合、定額給付金（父母各１万２０００円、子ども各２万円）に、特別手当の３万６０００円が加わり、計１０万円が支給される。厚労省は１７０万人程度の児童が対象になるとみている。

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光化学スモッグ：「注意報」過去５年で最少

　昨年１年間に発令された光化学スモッグ注意報の数は２５都府県で延べ１４４日と、過去５年間で最も少なかったと環境省が８日発表した。同省は「（発生しやすい）６月、８月の日照時間が短かったことが影響しているのではないか」と分析している。

　注意報は、光化学スモッグの原因となる「光化学オキシダント」の濃度が０．１２ｐｐｍ以上で継続する気象条件になると、大気汚染防止法に基づいて都道府県知事が発令する。

　発令延べ日数が最も多かったのは東京都で１９日、次いで埼玉県（１８日）、千葉県（１２日）。濃度が０．２４ｐｐｍ以上になると発令される「警報」はなかった。また、のどや目の痛みといった被害を訴えた人は１０都県で計４００人（対前年比１５１０人減）だった。

　光化学スモッグは、大陸から流れてきた大気汚染物質によっても発生するといわれる。昨年は中国政府が北京五輪（８月）に伴い大気汚染対策を強化したが、環境省によると、発令日数減少との関係は不明だという。

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東京都：皇居周辺の景観を保護…「誘導区域」指定へ
皇居周辺地域の景観誘導区域
皇居周辺地域の景観誘導区域

　東京都は皇居周辺を「景観誘導区域」に指定し、大規模な建築物を建てる事業者に景観に調和させるための事前協議を都とするよう義務付けることにした。豊かな緑や水辺を保つ皇居周辺を「首都東京の顔」として明確に位置づけ、秩序ある街づくりを促す狙い。９～２２日に意見を公募したうえで指定に踏み切り、４月から実施する。【木村健二】
　◇大規模建築、事前協議が必要

　都景観条例に基づく措置で、対象区域は皇居の中心から半径２キロ程度。千代田区や中央区など計５区にまたがる。江戸城内堀を囲むＡ区域と外堀を囲むＢ区域に分け、Ａ区域は建築物の高さや色彩の見え方についての評価指針を全域で適用。Ｂ区域はＡ区域にある眺望点から見て、悪影響を与える恐れがある建築物などに適用する。

　Ａ区域は▽大手町・丸の内・有楽町（大丸有）▽霞が関▽九段下▽千鳥ケ淵－－の４地区ごとに異なった「景観形成基準」を設定。例えば大丸有地区の日比谷通りでは、歴史的に形成されてきた屋根のライン（高さ３１メートル）の連続性を保ち、高層部は通り沿いの壁面から後退させるよう配慮しなければならない。

　景観誘導区域の事前協議制は、都が０７年度に導入。浜離宮恩賜庭園（中央区）など計９カ所が指定されている。０７年度は計５０件の事前協議を受け付け、マンションの高さが当初計画よりも抑えられたケースもあったという。

　一方、千代田区は大丸有地区で地権者らと街づくりのガイドラインづくりを進めてきた経緯もあり「景観は地域に密着したもので、一義的には地元自治体に任せるべきだ」と難色を示している。

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都心５区のオフィス空室率、08年12月末4.4―4.7％　民間調べ

　東京都心5区（千代田、中央、港、新宿、渋谷）で、オフィスビルの空室が増えている。大手仲介業者2社が8日まとめた2008年12月末の空室率は、 4.4―4.7％となった。空室率が上昇に転じた08年初頭からの上昇幅は2ポイント近い。テナントの増床意欲は鈍く、空室率は今後、借り手優位の目安とされる5％を超えて上昇するとの見方が支配的だ。

　三鬼商事（東京・中央）によると、指標となる大型ビル（同一の階で契約可能な面積が330平方メートル以上）の昨年12月末の空室率は、前月比0.16 ポイント上がり4.72％となった。ビルディング企画（東京・千代田）のまとめでは同0.29ポイント上がり4.4％だった。

　平均賃料（募集ベース）は、三鬼商事の調査で前月比0.7％（161円）下がり3.3平方メートル当たり2万2186円。ビルディング企画の調査では1.8％（558円）下がり3万100円だった。両調査とも下落は4カ月連続。(21:01)

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上海ディズニー、２０１３年開業へ
2009.1.8 22:22

　中国紙、上海証券報（電子版）は８日、上海ディズニーランドの建設計画で上海市側と米ウォルト・ディズニーが資金分担など合弁事業の細目で合意したと報じた。関係者によると２０１３年の開園をめざすという。上海ディズニーは、高層ビルが立ち並ぶ金融センターに比較的近い浦東地区に建設される予定だ。

　ディズニーランド開園はアジアで東京、香港についで上海が３カ所目となる。