2 * * THE WALL STREET JOURNAL. Tuesday, December 7, 2010 PAGE TWO What’s News— Inside i i i Business & Financen French President Sarkozy saidhe signed agreements advancinghis government’s plans to sell nu-clear reactors worth billions ofdollars to India. The two countriessigned seven pacts, includingagreements on space research andfilm production. 3n Changsha Zoomlion, a machin-ery maker, plans to raise as muchas $2.13 billion in a Hong Kongstock offering as signs of caution Asia Deal Journal:emerge among investors. 27 Australian taxes don’tn Japanese food and drug maker deter private equity. 19Otsuka set a premarket price foran IPO that could raise as much as$2.4 billion. 27n Google is launching GoogleeBooks, its long-anticipated digitalbookselling enterprise. 21n Euro-zone leaders will considerboosting their emergency lendingfacility for struggling membercountries this week, even thoughGermany remains staunchly op-posed to the idea. 5n Shinhan Financial’s president, Business & Finance:Shin Sang-hoon, stepped down as Rio Tinto pursues Reutersthe firm looks to regroup after aperiod of management turmoil. 22 Riversdale Mining. 19 Iran and six world powers held their first talks in more than a year Monday, which officials said focused mostly onn Ericsson said its chairman Tehran’s need to defuse fears about its nuclear programs. Delegates from Iran, the EU, U.S., Russia, Britain, France andplans to resign within the next Germany met in Geneva. Above, Iran’s chief negotiator Saeed Jalili, center, arrives at the conference center. Page 6two years. The Swedish telecom-equipment vendor also was cho- pledged his confidence he could n Pfizer’s chief retired unexpect- civilians join public service, a topsen to supply gear to Sprint. 22 prevent runaway inflation. 12 edly after 4½ years of leading the coalition commander said. 6 drug maker, citing fatigue fromn Australia’s Fairfax Media will n New doubts arose about the the job’s demands. 22 n The Afghan government easedconduct a search for a new chief sale of a controlling stake in restrictions on private-securityexecutive after the surprise depar- Hyundai Engineering when sellers i i i firms, stepping back from a com-ture of Brian McCarthy. 23 said documentation submitted by World-Wide plete ban announced in August. Hyundai Group on a loan for fi-n Prime Minister Kan reiterated nancing the bid is inadequate. 21 n A leaked diplomatic cable n Two suicide bombers disguisedhis policy plan for Japan, vowing shows Chinese Vice Premier Li as policemen killed 50 people into deliver a spending cap and n Samsung lowered its flat-panel Keqiang as saying in 2007, while an attack targeting a tribal meet-form a coalition as opposition factory utilization rate due to in a different post, that much of ing in northwest Pakistan.mounts to his leadership. 4 weak demand and to help ease a China’s provincial economic data Media Business: Ad global supply glut. 24 are unreliable. 4 n Youths clashed with police inn The DJIA wobbled as investors Athens, leaving one bystander in- recovery is forecast toparsed comments from Bernanke n U.S. officials charged over 500 n The prosecutor of the Interna- jured as thousands marched to continue in 2011. 25that the U.S. recovery may not be people in what they termed the tional Criminal Court said he commemorate the killing of a 16-self-sustaining, while gold looked largest-ever crackdown on scams opened a preliminary probe into year-old by police two years ago.set to settle at a record. Most ranging from Ponzi schemes to possible war crimes by North Ko-Asian markets ended higher. 29 pump-and-dump operations. 33 rea resulting from its recent n A French court found Conti- clashes with South Korea. WSJ.com nental Airlines and one of its me-n Fed chief Bernanke again de- n The euro fell as worry contin- chanics guilty of criminal wrong-fended the U.S. central bank’s ued about the outlook for fiscally n The measure of success in the doing in the crash of a Concordebond-buying program and weaker euro-zone members. 29 Afghan war will be whether more jet outside Paris a decade ago. ONLINE TODAY Most read in Asia Scene Asia blogs.wsj.com/scene In 2009, China ‘Wish Dream,’ a Heard on the Street: became the world’s painting by Arpita Honda revises its strategy in India. 34 largest importer of Singh, is set to sell Brazilian goods and is 1. 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Tuesday, December 7, 2010 THE WALL STREET JOURNAL. 3 WORLD NEWSFrance and India sign nuclear pactsBY AMOL SHARMA “France has made a strategic tors is estimated at €7 billion ($9.4 practice in most countries with nu- Powering India choice to believe in India—to believe billion). The agreements announced clear energy. NEW DELHI—French President in India’s future,” Mr. Sarkozy said Monday set contractual conditions India has said it may be able to India wants to increase its nuclearNicolas Sarkozy said he signed at a joint news conference Monday and break down roles and responsi- assuage U.S. concerns through regu- electricity generation 14-fold byagreements Monday advancing his with Indian Prime Minister Manmo- bilities of the parties, Areva said in lations, but has said changing the li- 2032.government’s plans to sell billions of han Singh. The official meetings be- a statement. Next steps include ability law will be too difficult. Rus-dollars of nuclear reactors to India, Current electricity sources: tween the leaders followed weekend studies to enable excavation at the sia already is building nuclearmoves that come as the U.S. is Other Nuclear sightseeing by the French president Maharashtra site and approvals plants in southern India.struggling to make progress in en- renewables 2.9% Oil and his wife, singer Carla Bruni, in- from India’s nuclear-safety author-tering India’s lucrative nuclear-en- 7.7% 0.9% cluding a visit to the Taj Mahal in ity, the company said.ergy market. Gas Agra. Mr. Singh said the French proj- France and India said they France and India said they 11% Mr. Sarkozy, who will travel to ect, which will ultimately producesigned a “framework agreement” Total: the financial capital of Mumbai on 10,000 megawatts of power, will signed a ‘frameworkthat paves the way for French state- 167 Tuesday to wrap up his visit, said “greatly increase the share of non-owned nuclear company Areva SA gigawatts that the nuclear agreements are polluting nuclear energy in electric- agreement’ that paves theto sell two reactors for a project in Hydro Coal “very favorable to French nuclear ity supply to our country.” way for French state-ownedIndia’s western state of Maharash- 25% 53% industry” and that he expects “no In contrast to Mr. Sarkozy, Mr.tra, along with nuclear fuel for 25 hidden surprises” as final negotia- Obama wasn’t able to make any an- nuclear company Areva SA toyears. Pricing has yet to be final- Note: Does not equal 100% due to rounding Source: Ministry of Power, India tions move forward. nouncements of progress with India sell two reactors .ized, and the countries still have to France intends to supply a total on nuclear-energy deals during hissort through various technical is- of six nuclear reactors to India in visit. While the U.S. led the interna-sues before completing the deal. Mr. Sarkozy’s four-day visit to coming years. India wants to de- tional effort to dismantle restric- Mr. Sarkozy reiterated his sup- The nuclear agreements were India, which follows a trip by U.S. velop nuclear electricity as a cleaner tions on nuclear trade with India port for India’s bid for a permanentamong seven pacts France and India President Barack Obama last month alternative to coal-fired power to beginning in 2005, American nu- seat on the U.N. Security Council,signed, including those on space re- and comes ahead of an expected help meet the energy-hungry coun- clear concerns are wary of selling saying that today India is “not in itssearch and film production. Mr. visit by Chinese premier Wen Jia- try’s needs. India has about 4,560 technology to India because of an rightful place in world governance”Sarkozy also lobbied for France to bao, was meant to strengthen stra- megawatts of nuclear power now, Indian law that exposes plant sup- and that a stronger Indian voice inwin a contract for an estimated $11 tegic ties between the nations while but wants to expand that roughly pliers to liability. global affairs is important for thebillion of fighter jets, a deal for making a case for French companies 14-fold by 2032. The U.S. companies want India to “equilibrium of the whole world.”which companies from the U.S. and in one of the world’s fastest-grow- Local media reported that the change the law and channel all lia- —Geraldine Amiel in Parisother countries are also vying. ing economies. value of the first two French reac- bility to plant operators, a standard contributed to this article. ENJOY RESPONSIBLY T h e u lt i m at e c o g n a c d e s t i n at i o n Richard Hennessy is the achievement of a unique blending of exceptional eaux-de-vie, the oldest of these are extremely rare and date back to the early 19th century. Each carafe is numbered and made of pure hand-blown crystal.
4 THE WALL STREET JOURNAL. Tuesday, December 7, 2010 WORLD NEWS: ASIA California pollution: made in China? Scientists have long known “It not only marks a milestone that pollution and dust from in the construction of the Beijing- China travels over the Pacific to Shanghai high-speed railway, but the Western United States. also is a major achievement of In a paper published in the China’s technology innovation,” latest issue of the scholarly Wang Yongping, spokesman of the journal Environmental Science and Ministry of Railways, was quoted Technology and picked up by by Xinhua as saying. Chemical & Engineering News, a Foreign high-speed train team of geochemists announced producers who taught China how that they have developed a to make bullet trains disagree. method for tracing fine airborne Many executives at those particulate pollution (also known companies shy away from as PM2.5 because the particles are commenting on China’s high- less than 2.5 microns wide) with speed technology out of fear of origins in East Asia by testing for offending the country’s a specific lead isotope, 208Pb, government, but a few who are Imaginechina/Zuma Press found in greater concentrations in willing to talk say theA construction site in Liaoning province, where Vice Premier Li Keqiang was Communist Party secretary in 2007. the region’s coal and metal ores. fundamental technology behindChinese data ‘man-made’ Led by University of California, those trains remains more or less Berkeley, identical to the postdoctoral technology researcher foreign Stephanie Ewing, companies the research providedLeaked cable shows now-vice premier calling local data unreliable team tested its filtering method originally half a decade ago. on samples from “What ChinaBY ANDREW BATSON dinner in Beijing with then-U.S. Am- reers often depend on how well the the San has is the same bassador Clark Randt on March 12, economy in their jurisdiction is per- Francisco Bay trains with BEIJING—A senior Chinese offi- 2007. His remarks focused on the forming, there is an incentive for Area, curious to see how much of beefed-up propulsion and othercial said in 2007 that much of the challenges of administering the them to report positive figures. Northern California’s pollution tweaked systems” to achievecountry’s local economic data are province of Liaoning, which because Many private-sector analysts came from East Asia. faster speeds, an official from oneunreliable, according to a leaked of its legacy of failed state-owned also closely track the indicators re- From December 2007 through foreign high-speed rail companydiplomatic cable published by the enterprises was burdened with a portedly favored by Mr. Li, which May 2008, the Chemical & says. —Norihiko ShirouzuWikiLeaks website. large number of unemployed work- are thought to reflect real activity Engineering News says, Ms. Ewing The official, Vice Premier Li Ke- ers. and be less subject to political influ- and team collected samples, then Ex-U.S. trade representativeqiang, was at the time Communist “When evaluating Liaoning’s ence. used mass spectrometry to filter not so diplomatic about ChinaParty secretary of the northeastern economy, he focuses on three fig- The nationwide gross domestic out the particulate pollution and Now that Susan Schwab, whoprovince of Liaoning. Since landing ures: 1) electricity consumption, product figures published by the Na- measure the amounts of different was U.S. trade representativehis current position, he has over- which was up 10% in Liaoning last tional Bureau of Statistics aren’t di- lead isotopes. After analyzing under President George W. Bush,seen many of the central govern- year; 2) volume of rail cargo, which rectly based on the provincial GDP data, the researchers found the has left public life, she is free toment’s efforts to improve the qual- is fairly accurate because fees are figures and attempt to correct for median proportion of Asian lead talk freely about the state of tradeity of its economic statistics, which charged for each unit of weight; and some of their biases. Indeed, almost in the samples was 29%. relations with China.continue to face many questions 3) amount of loans disbursed, which all of China’s provinces consistently The question now is how much “Foreign firms are in factover their accuracy and consistency. also tends to be accurate given the report GDP growth rates above the of that can be attributed to San discriminated against in this Mr. Li is considered the top con- interest fees charged,” the cable national average. Francisco’s penchant for China- market,” Ms. Schwab, now atender to take over as premier, the says. The NBS, while defending the na- made iPhones and iPads? professor at the University oftop economic policy-making posi- “By looking at these three fig- tionwide figures it produces as fun- —Josh Chin Maryland, said at a paneltion, when the current head of gov- ures, Li said he can measure with damentally accurate, has sought discussion in Beijing.ernment, Wen Jiabao, steps down in relative accuracy the speed of eco- more influence over the numbers Chinese train breaks Ms. Schwab referred to herearly 2013. The reported comments nomic growth. All other figures, es- compiled by local authorities. speed record, again own experience negotiating dealsprovide intriguing context for his pecially GDP statistics, are ‘for ref- In his public comments about A Chinese high-speed train set in China for Motorola in the earlycurrent role, which among other erence only,’ he said smiling,” the economic statistics, Mr. Li also has another world speed record 1990s. She did note that China’stasks include overseeing the ongo- cable reads. “GDP figures are ‘man- repeatedly stressed the importance during a test run Friday, breaking government recently launched aing nationwide population census. made’ and therefore unreliable,” the of gathering accurate information. its own record set just two new drive to address one of China’s Foreign Ministry has said cable paraphrases Mr. Li as saying. “Data live and die by its quality,” months ago. The Chinese Ministry foreign companies’ main problemsit will not comment on the content Analysts have long questioned he said at a government meeting in of Railways calls the feat a “major in China: violation of intellectual-of the diplomatic cables published the reliability of economic figures early 2009, urging accuracy in a achievement of China’s technology property rights in the form ofby WikiLeaks. The leaked cable re- produced by local governments in count of the nation’s businesses and innovation,” but doubts linger things like pirated software andports comments Mr. Li made in a China. Because local officials’ ca- their economic activities. over just how much of China’s knockoff handbags. But she bullet-train technology can be pointed out similar government described as its own. campaigns in past years haven’tJapan’s Kan sticks by his plan This record was accomplished resolved the problem. during the test run for a train The disenchantment of big called the CRH380A. According to corporations with China could a report by state-run Xinhua news have consequences for how the agency, the train hit a top speed political debate over trade evolvesBY TAKASHI MOCHIZUKI make a promised cut in Japan’s 40% censure motions on the two offi- of 486.1 kilometers per hour in the U.S., Ms. Schwab said. corporate tax rate without breach- cials. The moves have no practical between Zaozhuang City of —Andrew Batson TOKYO—Japanese Prime Minis- ing the debt limit. effect, but the actions represent the Shandong Province and Bengbuter Naoto Kan signaled Monday that The government hopes to finish strongest message yet of disap- City in eastern Anhui Province, Keep up on China minute byhe won’t give in to pressure from compiling the budget by the end of proval over the government. part of a new high-speed rail line minute with The Wall Streethis political opponents to change his December, and plans to propose it At a press conference Monday, that will eventually link Beijing Journal’s China Real Time Reportpolicies or members of his cabinet. when the Diet reconvenes in Janu- Mr. Kan said: “It’s not a matter of and Shanghai. at blogs.wsj.com/chinarealtime Mr. Kan also vowed to deliver on ary. But lacking a majority in the cabinet reshuffling” and Mr. “Sen-the government’s promise to cap upper house of parliament, Mr. Kan goku does not need to resign” be-main spending at 71 trillion yen needs support from an increasingly cause of the no-confidence motion.($858 billion) and new borrowing at hostile opposition to get the budget Instead, he said he will push to44.3 trillion yen in the budget for passed. With public support now build a “firm structure” that enablesthe next fiscal year starting April. around 20%, that outlook is dim. the government to carry out its pol- Mr. Kan’s remarks indicate his Instead it has launched a strong icies. To achieve that goal, Mr. Kandetermination not to follow the path attack against top officials in the is hoping to strengthen its ties withof the previous four premiers, none government. The main opposition smaller parties, including the ex-co-of whom lasted more than a year as parties are demanding that Mr. Kan alition Social Democratic Party.their public support fell. fire Chief Cabinet Secretary Yoshito But such a move carries its own However, opposition parties, in- Sengoku and Land Minister Sumio potential problems. The Social Dem-cluding the former-coalition Social Mabuchi over their handling of for- ocrats are staunchly opposed to theDemocratic Party, are demanding eign-affairs issues, including Sep- U.S. military presence in Okinawatough policy changes in return for tember’s collision between a Japa- and are demanding that a majorcooperation, such as removing a U.S. nese patrol ship and a Chinese base be moved out of Okinawa and Xinhua/ZumapressMarine base in Okinawa. At the fishing boat in disputed waters. preferably out of Japan entirely.same time, some economic issues Only last month, the opposition- —Takashi Nakamichi contributed The railway ministry is expected to limit the speed of these trains to 380 kph.remain unsolved, including how to controlled upper chamber slapped to this article.
Tuesday, December 7, 2010 THE WALL STREET JOURNAL. 5 WORLD NEWSGermany balks at bigger rescue fund BRUSSELS—Euro-zone leaders man Christoph Steegmans said at the €750 billion is enough for now always study very closely all the takes to settle such trades after theywill consider boosting their emer- the same news conference. and the fact that leaders met just proposals made by the member have been agreed means the ECB’sgency lending facility for struggling EU diplomats said leaders don’t about a week ago. states.” data only provide a complete pic-member countries this week, even perceive the market pressure as However, EU Commissioner Olli Amid market jitters about Portu- ture of its activity up until Tuesday.though Germany remains staunchly strong enough to require wrestling Rehn expressed support for euro guese and Spanish debt, the ECB In contrast to most weeks, however,opposed to the idea. with the complicated issue of intro- bonds. “There’s been a long debate said Monday it increased its pur- the ECB added explicitly that “the ducing a European bond, especially over decades over euro bonds,” he chases of government bonds last transactions made between Wednes- By Riva Froymovich, after the ECB last week decided to told reporters. “I find the idea intel- week, and went out of its way to say day, Dec. 1 and Friday, Dec. 3 have, Matthew Dalton extend its extraordinary liquidity lectually attractive,” Mr. Rehn said, it bought more than its own data with few exceptions, not yet settled and Bernd Radowitz measures into 2011. The diplomats adding that the EU commission suggest. and hence aren’t reflected in this added that any dramatic measures made a proposal for such bonds last The ECB said it settled €1.965 figure.” Investors in recent weeks have are unlikely at this meeting, and spring that was rejected by member billion of bond purchases in the —Marcin Sobczyk,pushed yields on European sover- that an expansion of the stability governments in favor of the bailout week ended Friday, up from €1.348 Monica Houston-Waesch,eign debt higher and the euro lower fund will also be a challenge given fund recently used to aid Ireland. billion the week before and the Patrick McGroartyover concerns that the €750 billion Germany’s very public position “That is the state of the debate for highest since the last week of June. and Frances Robinson($1.01 trillion) of funds set up by the against it, the belief by some that the moment. Having said that, we The two to three days that it contributed to this article.European Union and the Interna-tional Monetary Fund may not beenough to tackle the euro area’ssovereign-debt problems. On Monday, German ChancellorAngela Merkel said she sees no needto increase the size of the currentfinancial safety net for troubledeuro-zone member states. Ms.Merkel said that so far, only Irelandhas asked for aid from the facility,and the fund would be more thansufficient for Ireland. Still, finance ministers could de-cide to increase the size of the euro Robert Mundellzone’s €440 billion portion of the 17-18 January 2011fund, known as the European Finan-cial Stability Facility, an idea backedby Belgian Finance Minister Didier ASIAN FINANCIAL FORUMReynders and European Central Hong Kong Convention and Exhibition CentreBank President Jean-Claude Trichet. Oleg Mukhamedshin Earlier Monday, Guy Quaden, a UC RUSALmember of the ECB’s governingcouncil, said it may be appropriateto expand the fund. “It’s a decisionto be taken by political representa- 2 days main programme Xiao Gangtives, but I personally would be 8+ workshops Bank of Chinapretty favorable towards it,” he said,adding that the measures have 60+ speakershelped so far. “The two elementswhich have brought credibility are 200+ pre-arranged meetings Rintaro Tamaki Vice Minister of Finance forthat Europe has put in place the Victor Fung Tu Guangshao 1,500+ participants International Affairs, Japansupport fund, which has major re- The Li & Fung Group Vice Mayor of Shanghaisources at its disposal, and that thecountries with public finance prob-lems have put in place rigorousplans to make reforms and cut bud-gets.” The ministers are also set to dis-cuss the rescue package for Ireland Levin Zhuand “simple” changes to European China International CapitalUnion treaties in order to create a Corporation Patrick Raaﬂaubnew permanent mechanism to aid Swiss Financial Market Anthony Bolton Ronnie Chan Supervisory Authority (FINMA)troubled euro-zone states. They will Fidelity International Hang Lung Properties Perry Kaufmanalso consider a proposal from Lux-embourg Prime Minister Jean-Claude Juncker, who chairs thegroup of 16 euro-zone nations, and The Asian Financial Forum (AFF) brings together the most inﬂuentialItalian Finance Minister Giulio members of the global ﬁnancial and business community to discussTremonti to create EU bonds thatwould be issued by individual gov- developments and trends in todays markets.ernments but collectively backed bythe EU. The Chief Executive of the Hong Kong Special Administrative Region will Germany opposes the idea. Ms. Victor Chu ofﬁciate at the opening of this forum in his role as guest of honour.Merkel said bonds issued by Euro- Sameer Al Ansari First Eastern David Robson SHUAA Capital Investment Group Tethys Petroleumpean countries compete on the level Key topics that will be discussed include:of interest rates, while a commoneuro bond would remove that com- Other distinguished speakers: Changing dynamics of economic growthpetition. “The level of interest rates Chen Yuan Does quantitative easing breed quantitative tightening?is also an incentive to fulfill the sta- China Development Bankbility and growth pact,” Ms. Merkel RMB businesssaid, referring to the widely flouted Liu Chuanzhi Surﬁng the giant waves of global liquidityagreement designed to ensure that Legend Holdings (invited)no euro-zone state runs a budget Cross-border and regional investment opportunities Ong Chong Teedeficit of more than 3% of gross do- Monetary Authority of Singapore How do Chinese enterprises compete in the global arena?mestic product. Hedging against currency uncertainties The creation of euro bonds may Bill Shortenalso undermine fiscal responsibility, Assistant Treasurer and Minister Venture capital and private equity opportunitiesMartin Kreienbaum, spokesman for for Financial Services and Superannuation, AustraliaGermany’s ministry of finance, said Song Linat a government news conference China Resourcesearlier Monday. “The euro is set upin a way that countries are respon- Wang Jianzhousible for budgets and financial poli- China Mobile (invited)cies on a national level. A euro bond and many more...would divert attention from that,”he said. Also, the creation of euro bondswould require wide-ranging changesto EU treaties, government spokes- Register now at www.asianﬁnancialforum.com!
6 THE WALL STREET JOURNAL. Tuesday, December 7, 2010 WORLD NEWSGeneral describes Afghan challengesBY YAROSLAV TROFIMOV riguez said. they really do the right thing,” he Rodriguez said.AND MATTHEW ROSENBERG U.S.-led allies, he said, must of- said, pointing to Marjah, now on its The Taliban’s assassination cam- Battle planning ten work with corrupt officials, try- third governor since a major coali- paign is part of the insurgency’s U.S. milestones in Afghanistan KABUL—The measure of success ing to improve their conduct tion offensive there in February. changing tactics, as the insurgentsin the Afghan war, the coalition’s through mentoring. “You either get Following the seizure of Marjah shy away from openly confronting December 2009 Obamaday-to-day commander said, will be behavior modification,” Gen. Rod- from the Taliban, coalition and Af- superior coalition and Afghan forces announces surge of 30,000 troops.whether Afghan civilians decide to riguez warned, “or you get to the ghan forces recently cleared insur- and instead resort to roadsidetake risks and join public service. point where the people can hold gent strongholds around the south- bombings and intimidation, Gen. Ro- February 2010 Allied forces U.S. Army Lt. Gen. David M. Rod- their leaders accountable to serve ern city of Kandahar. In both areas, driguez explained. “They adjust just launch massive operation in Marjah.riguez on Monday outlined what he them properly.” however, the Afghan government is like we do.”saw as the military’s successes and struggling with the next step of set- Over the past year, he said, the July Gen. David Petraeus takesshortcomings in the year since the ting up effective administrations, in insurgents have also moved to new over as coalition forces commander,American troop surge began, in an ‘We’re not going to kill our part because of a Taliban campaign areas, scattering across the country succeeding Stanley McChrystal.interview ahead of President Barack to kill off public servants. as military operations push themObama’s Afghan policy review this way out of this insurgency, Gen. Rodriguez said he realized out of their redoubts. August-November Coalitionmonth. we’re not going to arrest our that local Afghans don’t join govern- Gen. Rodriguez said the coalition forces clear Taliban around the city The general, who commands the ment service because they are was making good progress in estab- of Kandahar.coalition’s war-fighting headquar- way out of the corruption.’ scared—and because they often lishing freedom of movement for Af-ters in Kabul, also highlighted a re- don’t trust their government, having ghan civilians in Helmand and Kan- December White House’s Afghancent shift in Taliban tactics, ac- had to deal with police who rob the dahar, the benchmarks of success policy review.knowledged that the insurgents Some Afghans have taken sides population instead of protecting it. that he outlined in another inter-operate in more parts of the country with the insurgency because of their Yet, the Afghans “also have to view a year ago. July 2011 Drawdown of U.S.than they did a year ago, and ex- anger with rapacious or incompe- take some risks” and must start fill- Yet, he said, the allies have yet forces set to begin.plained the limits of fighting cor- tent government officials. Gen. Rod- ing out government jobs, he added. to link up the relatively secure areasruption while trying to prop up a riguez said some 250 Afghan dis- “It’s never going to be perfect in these two provinces, and major December 2014 Goal forgovernment riddled with graft. trict-level and army officials were security before they fill those posi- challenges remain ahead. “The completion of handover of security “Just as we’re not going to kill removed since January, 40 of them tions….How that occurs over time things that hold these things back responsibilities to Afghan forcesour way out of this insurgency, for corruption. will really be the measuring stick of are always the same things,” Gen. and withdrawal of most coalitionwe’re not going to arrest our way “In many places you need to get how we’re really accomplishing this Rodriguez said. “The enemy always troops.out of the corruption,” Gen. Rod- through three or four leaders before mission of building stability,” Gen. has a vote.”Differences emerge as U.S.-Iran talks beginBY JAY SOLOMON moud Ahmadinejad and other Ira- nian political factions. GENEVA—As the U.S. and Iran U.S. officials have said in recentprepared for Monday’s first diplo- weeks that they would like to re-ex-matic meeting between the two amine the fuel-swap proposal withsides in more than a year, Tehran Tehran. But they said that Iranannounced delivery of its first ship- would need to ship out significantlyment of homemade “yellowcake” more of its low-enriched uraniumuranium—a troubling sign for West- stockpile to address the fears itern governments seeking to contain might move rapidly to assemble athe nation’s nuclear ambitions. nuclear bomb. During last year’s ne- At the same time, significant dif- gotiations, Iran had 1,600 kilogramsferences have emerged over such of low-enriched uranium, accordingbasics as the terms and substance of to the U.N.; today its supply standsthe discussions on Tehran’s nuclear at more than 3,000 kilograms.program Monday and Tuesday in It is estimated that Iran wouldGeneva. need about 600 kilograms of low- Iran on Sunday announced it had enriched uranium to make a bomb ifdelivered yellowcake, made from it decided to enrich the materialuranium ore from its Gachin mine further into weapons grade.near the Persian Gulf, to a fuel-con- Iran has given conflicting signalsversion facility in the city of Isfa- in recent months about its willing-han. Yellowcake, a concentrated ness to accept the nuclear fuel-swapform of uranium, is the key feed- proposal. Some Iranian officials havestock needed to produce either fuel said Iran would be open to buyingfor a nuclear reactor, or the highly more higher enriched uranium fromenriched uranium for atomic weap- the international market to produceons. Iran’s successful development medical isotopes, provided the fuel Reutersof the capacity to make its own yel- supply is guaranteed. But they havelowcake would make Tehran’s nu- stressed U.S. and European suppliersclear program less susceptible to Iranian President Mahmoud Ahmadinejad at a recent news conference. Iran is to engage in nuclear talks this week. are unreliable.outside pressure. Senior American and Iranian of- The quality of the yellowcake in other Iranian officials over the week- calls into further question Iran’s in- the four other permanent members ficials have squared off over the nu-the delivery isn’t known. Nuclear ex- end, who stressed at forums in the tentions,” said Mike Hammer, the of the United Nations Security clear issue in a number of differentperts believe that Iran’s uranium de- Persian Gulf and Europe that Tehran spokesman for the White House’s Council—Russia, China, France and venues in recent days.posits are too small and low-grade has a nonnegotiable right to produce National Security Council. “The pur- the U.K.—plus Germany, is Catherine Secretary of State Hillary Clintonto sustain a nuclear-power program, nuclear fuel. For that reason, they pose of the...talks here in Geneva to- Ashton, the European Union’s for- and her Iranian counterpart, Man-though it is already believed to have said, the discussions in Geneva morrow is to underscore the con- eign-policy chief. The Iranian side ouchehr Mottaki, gave competingenough low-enriched uranium to should focus on more general issues, cern of the entire international will be headed by Tehran’s chief nu- speeches at a regional security con-produce atomic weapons. such as the structure of the global community in Iran’s actions.” clear negotiator, Saeed Jalili. The ference in the Persian Gulf sheikh- Ali Akbar Salehi, head of Iran’s nonproliferation system and the sta- Iran last month agreed to a State Department’s No. 3 diplomat, dom of Bahrain on Friday. Mrs. Clin-Atomic Energy Organization, said tus of Israel’s presumed nuclear- meeting after a year of back and William Burns, is representing the ton stressed the U.S.’s desire forthe delivery, marking the first time weapons program. forth. Obama administration. better relations, but said that coulddomestically produced yellowcake Senior Obama administration of- Mr. Hammer said the U.S. wasn’t Monday’s meeting will mark the come only after Tehran addressedwould be used at a key nuclear ficials countered that any progress surprised by Mr. Salehi’s announce- first time Tehran has sat down with the concerns over its nuclear activi-plant, represented a major step for in the Geneva negotiations could oc- ment of the yellowcake delivery to these international powers since Oc- ties. Mr. Mottaki responded in hisits program. “This means that Iran cur only if Iran addresses the con- Isfahan. But U.S. and United Nations tober 2009. At that time, the Iranian speech that President Barackhas become self-sufficient in the en- cerns about its nuclear-fuel produc- officials have said recently that government initially agreed to a key Obama’s policy toward Iran hastire fuel cycle,” he told Iranian state tion—in particular, its moves to Iran’s relatively small supplies of confidence-building measure that proved no different than George W.television Sunday in Tehran. enrich uranium to levels closer to natural uranium ore, which is would have seen Tehran ship two- Bush’s. Mrs. Clinton told reporters “No matter how much effort they weapons grade. They also said Teh- ground into yellowcake, are inade- thirds of its uranium stockpile to she attempted to greet Mr. Mottakiput into their sanctions...our nuclear ran’s announcement of the yellow- quate to fuel the nuclear-power pro- third countries in exchange for en- following a dinner Friday in Bahrainactivities will proceed and they will cake shipment to the conversion fa- gram Tehran says it is developing. ergy and medical assistance. but that “he just turned away.”witness greater achievements in the cility only deepens the fears However, this supply—along with The U.S. liked that proposal be- Iran’s foreign minister responded infuture,” Mr. Salehi said, adding that internationally that Iran’s goal is to the yellowcake Iran imported from cause it would have denied Iran a Saturday press conference that heIran’s nuclear advances are only for build nuclear weapons. South Africa in the 1970s—is enough fissile material to build an had acknowledged Washington’speaceful purposes. “Given that Iran’s own supply of enough for a small nuclear-weapons atomic weapon. But Tehran backed chief diplomat, but had to quickly The announcement on the eve of uranium is not enough for a peace- arsenal, according to these officials. away from the deal amid political turn to greet Jordan’s King Abdul-talks echoed defiant tones struck by ful nuclear energy program, this Leading the talks for the U.S. and infighting between President Mah- lah.
Tuesday, December 7, 2010 THE WALL STREET JOURNAL. 7
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Sizing up your nest egg 10 WHY IS THIS BIRD WORTH SO MUCH 11TUESDAY, DECEMBER 7, 2010 LIFE & STYLE asia.WSJ.comA fashionable royal engagementIn light of the proposal heard ’round the world, a British author recalls her visit to Buckingham PalaceBY CAMILLA MORTON I empathized with Kate Middleton as sheofficially stepped onto the world’s stage forthe first time as the heir to the throne,Prince William’s, fiancée. In an instantly fa-mous midnight-blue dress by London de-signer Issa to match that all-important sap-phire, a battery of flash bulbs popped, keento capture her every breath. Personally, I’ve never been engaged to aprince, but I have dressed for a visit toBuckingham Palace. In March of this year, Iwas invited to meet Her Majesty the Queenand the Duke of Edinburgh to celebrate theBritish clothing industry. As Ms. Middletontook to the spotlight, I remembered theanxiety of wanting to get everything rightfor my visit, and thinking how this will bean issue the future Queen Catherine willhave to face every day! You thought dress-ing up for the party season had its pit-falls? No. Royalty is a whole other leagueof labels, hem lengths and butterflies. When the regal envelope droppedthrough my letterbox I was thrilled, hon-ored and utterly bewildered. As I crackedopen the seal I wondered if it might be amistake—I am not a great designer or lead-ing editor, I am merely a fashion writer andconsultant who, alas, doesn’t have any roy-als on speed dial. The closet I’ve ever cometo rubbing shoulders with the crown royalehas been through a coin or stamp. But, af-ter careful inspection by my mother, itseemed true—the Majestic Coat of Armshad proclaimed a royal command. The thick cream card stock read to arriveat five. This was not cocktail hour, nor did itsay to dress for high tea. The swirly raisedlettering added a clue: “The dress code isrecommended as day dress/lounge suit. How-ever, this is for guidance only and is not in- Corbis (Buckingham Palace, Middleton); Getty Images (2)tended to preclude other smart dress. Hatsand gloves are not required.” However help-fully intended, it was not, and left thingsvery much open to interpretation. In addition to the invitation’s do’s anddon’ts, the parking permits and the securitycards there was also the question of eti-quette and protocol. There are the colors toavoid: black, for example, is traditionallyonly for state mourning, white obviously hasbridal aspirations and purple is consideredthe color of (and only for) kings. I learnedthat skirts must drop at least 4 inches lowerthan the knee to avoid any indecent expo-sure mid-curtsy. And that handbags must be Clockwise from above, Kate Middleton and Prince William; Diana and Prince Charles in 1981; and the author and Stephen Jones at Buckingham Palace.small and dainty (and yet possess dimen-sions of a Mary Poppins carryall as to con- Toledo for her inaugural debut as first lady. one of his last London shows), or how my demure and yet elegantly at ease. Afterceal mobiles, keys, cameras and cigarettes, There was no rule book for Jacqueline Stephen Jones flower headpiece had been eight years, she’s grown (and beenwhich must never be exposed in Her Maj- Kennedy when she stepped into the White crafted that afternoon to set off my curtsy- groomed) into the woman we see steppingesty’s presence). Her Majesty is also known House. Luckily she had Oleg Cassini—and friendly black Dior skirt, which I felt repre- into the limelight, and into the most fa-to favor a matching heel and handbag. charm to spare—on inauguration day. The sented British talent abroad. I wanted to tell mous family in the world. She favors mini- Perplexed, I asked British milliner to the bar has been set high ever since. her how my heels were the very first pair of mal makeup and discreet labels (to whichstars Stephen Jones, who was also invited, When my time finally came to meet HM Manolo Blahniks I’d ever owned. But in fact, I she’s remained incredibly loyal) with a cutfor advice. “Tradition and protocol is what herself, she held the room—filled with every- didn’t say anything, really. I turned to air that flatters rather than overpowers, all themakes Britain great,” Mr. Jones said. “It all one from Mr. Harris Tweed and Twiggy to kiss Mr. Bailey and instead found myself fall- while maintaining a sense of ease andcomes down to a woman’s hat, gloves and Christophers Kane and Bailey—spellbound. ing as if in slow motion into the throne room down-to-earth appeal. Like the late Princessgrooming.” My best gloves were woolen, She mingled, as much as royalty mingle, in where the Queen was holding court. I bowed of Wales, Ms. Middleton doesn’t court thewhich certainly wouldn’t do, and most of an ethereal Angela Kelly box jacket and (got my knee in the wrong place, something I spotlight, but unlike her, she has had timemy hats were crowned with crazy bobbles. dress, completed with (of course) a black regret) and barely whispered “Ma’am.” to develop a style that suits her public life.Suddenly, I had a new respect for Carla handbag, shoes and gloves. For a crowd The ace Ms. Middleton has played for Her wedding dress will be her statement ofBruni-Sarkozy, who charmed the world in that’s often too cool for school, nobody could her first “official” style statement was the intent on the woman, wife and Queen sheDior on her first official appearance with take their eyes off her, or indeed remember a color of Princess Diana’s engagement suit wants to be. Ms. Middleton’s legacy is stillthe French president; and Michelle Obama, single word of sense. I never got to explain (royal blue), not to mention perfectly unknown, but as a picture (or in this case, awho fearlessly donned a pale yellow suit all the thought behind my vintage Galliano matched to her engagement ring. Upon her dress) paints a thousand words, be surefrom the then little-known designer Isabel Prince of Wales fitted jacket (which was from world debut, Ms. Middleton looked poised, this Princess will have a lot to say.
10 THE WALL STREET JOURNAL. Tuesday, December 7, 2010 LIFE STYLEYou’re retiring in 10 years? Uh-ohIf your nest egg is a lot skimpier than it should be, here’s what you can do now to get back on trackBY KAREN DAMATO smaller than you will need in order to were slightly more numerous than comfortably leave the work force, in- Seeking the ‘sweet spot’ the all-stock crowd, 15% to 13%.) Imagine this scenario: You’re vestment returns alone are unlikely By taking too little stock-market risk—or too much—pre-retirees can limit Here’s a closer look at the chal-only five or 10 years from when you to bail you out. You need to get seri- the income they’ll be able to draw from their nest eggs later on. This analysis lenges and options for pre-retirees.hope to retire—but your portfolio ous about trimming your spending to is for someone who is 55, 10 years to retirement and has savings equal to sixlooks like it needs another lifetime save more money, or resign yourself times salary. Key assumptions: 15% of salary No time for compoundingto bulk up. What do you do? to working more years. No. 2: When Percentage of salary that can be withdrawn is contributed annually to tax-deferred One way to estimate the lump Many people, of course, don’t your nest egg is small and time is annually in retirement accounts. Salary, contributions and sum you’ll need for retirement is to retirement withdrawals increase 3% aneed to imagine it. It’s their real- short, you can make things worse for 45% year for inﬂation. Withdrawals have rough out how much money you’llity—the result of watching their in- yourself by being either too conser- 40 an 80% probability of being need to pull from your portfolio an-vestments get clobbered in the two vative or too aggressive. 35 sustainable for 30 years. nually when you retire—and multiplybear markets of the past decade. Many pre-retirees hew to one ex- 30 Source: T. Rowe Price Group by the painfully large number of 25. If you’re one of those people, the treme or the other. When Fidelity 25 That’s based on the rule of thumbfirst step is to take a deep breath and Investments recently studied partic- 20 that you can probably withdraw 4% See WSJ.com/FundsAnalysis 15remind yourself that you’re far from ipants in the 401(k) retirement sav- for an interactive graphic of your account value in year one and 10alone. Misery does love company. ings plans it oversees in the U.S., it 5 covering six additional levels adjust that by inflation each year. Next, consider two messages that found that 28% of participants age 0 of current savings and more If you’re nowhere near that tar-financial pros say people need to 55 or older either had no money in 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% details on the studys get now, making changes to your as-hear before any more time elapses: stocks or 100% of their 401(k) bal- Percentage of portfolio in stocks assumptions. set mix—typically by adding No. 1: If your nest egg is far ances in stocks. (The no-stock folks stocks—isn’t as powerful a tool as it was when you were younger. It’s simple math: There aren’t many years for compounding to do its magic before you start pulling money out. Moreover, while stocks are typically the driving force in a long-term portfolio, due to their higher average returns over time, they are also a wild card. Pre-retir- ees face a catch-up conundrum: They could sure use the payoff from being heavily invested in stocks when the market is in a strong up- swing. But they can’t afford the risk of having their already skimpy nest eggs decimated shortly before or af- ter they leave the work force. Finding a balance What that means for how you in- vest is this: If you have very little in stocks—say, because you fled equi- ties amid the financial crisis of 2008—you can boost your expected return by adding some stocks to the mix. And by doing so, advisers say you’ll probably be able to increase the cash you can safely withdraw. Even 20% of assets in stocks may make a difference. Just don’t go so far that you are setting yourself up to bail out the next time the market plunges. If you’ve already got a lot in stocks, increasing that bet fur- ther could backfire—making your returns so unpredictable that it ac- tually reduces the amount of money you can safely withdraw from your portfolio. Particularly risky are big bets on individual securities, includ- ing your own company’s shares. Modeling the future Many financial firms use “Monte Carlo” simulations in which they look at thousands of possible pat- terns of market performance and evaluate the probabilities of differ- ent investment results. Using that type of analysis, Rande Spiegelman, vice president of financial planning at Charles Schwab, advises that people within three to five years of retirement should have no more than 60% of their assets in stocks and preferably closer to 40%. By Schwab’s math, stock exposure at just 20% of the portfolio can work, too, if you’re willing to start off withdrawals at 3.8%, not 4%, of your nest egg. In all three cases, if you maintain that portfolio mix through retirement, Schwab has calculated that you have a 90% probability of your money lasting 30 years. But Mr. Spiegelman cautions that the guidelines about how much you can pull out in retirement are all ballpark figures. He says people in retirement should stay flexible about adjusting their withdrawals to actual market conditions.
Tuesday, December 7, 2010 THE WALL STREET JOURNAL. 11 LIFE STYLEVALUATIONSWhat separates these birds from the flockBY NELLIE S. HUANG eled from China to the United 1735-1796), to his father, Emperor Quality: Cloisonné objects are Kingdom carrying with him a num- Yongzheng (ruled from 1722-1735). incredibly labor-intensive to cre- When it comes to putting a ber of pieces of Imperial Chinese Each statue features a smaller, ate. First, a brass form must bedollar value on Chinese works of works of art. A year later, Alfred younger crane (representing the created. Wires are soldered to theart, a few things matter: a tie to Morrison, a wealthy commoner, prince) next to an older, taller surface to form the cloudy cloi-the Imperial family, a solid prove- bought the works and displayed crane (the emperor), and the larger sonné patterns. Cells are fillednance, condition, quality of the them in his country manor in Font- crane holds a peach in his beak. with ground-glass enamel, fired,workmanship and rarity. hill, Wiltshire. Though some pieces Cranes and peaches are sym- then fired again and again until Few works meet all criteria. were sold, in the 1960s, 70s and in bols of longevity in Chinese folk- the enamel is flushed with theThat’s why these two crane statues, lore, according to Ms. Antebi. wire. Then the entire piece is pol-both featuring two of the long- “Whenever you see a decorative ished.legged wading birds, carry so high ‘Any piece with this kind of element of a peach in a work of The two cranes have a smooth,a price, according to Pola Antebi, art, it very often was for some- rounded shape that is difficult toChristie’s head of Chinese works of provenance, you can’t begin thing made as a birthday present.” achieve in cloisonné, and they’reart. “There’s a checklist of things to guess how excited people Statues of a crane typically standing on rocks, above a turbu-that collectors look for,” says Ms. stood on either side of the throne lent sea. “This was most certainlyAntebi, “and the Morrison Fonthill will become.’ in the Imperial Palace in Beijing’s done in an Imperial workshop,”cranes tick them all.” Forbidden City. “In one of the ma- says Ms. Antebi. “This was proba- The pair of 1.5-meter-tall cloi- jor halls in the palace, you can see bly a special commission.”sonné statues was the top lot of 2004, the cranes have been in a crane at either side of theChristie’s sale of Chinese works of Fonthill since 1861. “Any piece with throne,” Ms. Antebi says. “They Condition: Because the stat-art last week. The statues were this kind of provenance,” says Ms. are common symbols placed be- ues have been in the Fonthill col-bought by Hong Kong collector Antebi, “you can’t begin to guess fore the throne.” lection since 1861, and have beenand real-estate developer Joseph how excited people will become.” But they also served a purpose, well cared for, they are in pris-Lau for $16.7 million. Why were she adds. These statues were tine condition. “There’s a Christie’sthey valued so highly? Imperial: According to Ms. An- probably used as censers. The in- pre-1910 painting of Albert Morri- tebi, these statues were probably a cense was placed in a cavity under son. He’s shown reading in a Provenance: In 1860, an Eng- gift from Prince Hongli (later Em- the wings and smoke rose through chair at home and the two stat- Joseph Lau bought the pair oflishman named Henry Loch trav- peror Qianlong, who ruled from the neck and out of the beaks. ues are there,” she adds. cloisonné statues for $16.7 million.
12 THE WALL STREET JOURNAL. Tuesday, December 7, 2010 THE GLOBAL ECONOMYFed chief again defends bond buyingBY SUDEEP REDDY would be a more serious concern.” People who worry about inflation Federal Reserve Chairman Ben are “looking at some of the risks andBernanke took his message into uncertainties with doing this policyAmerican homes Sunday evening, action, but what I think they’re notdefending the U.S. central bank’s doing is looking at the risk of notbond-buying program and pledging acting,” Mr. Bernanke said.his “100%” confidence he could pre- Mr. Bernanke also said “itvent runaway inflation. doesn’t seem likely” that the econ- In a rare TV interview, on CBS’s omy would fall into recession again“60 Minutes” news program, Mr. but suggested that could happen ifBernanke warned that the economic the unemployment rate remainedrecovery “may not be” self-sustain- high “for a protracted period ofing. He said the chance of unem- time.” The Fed chairman said re-ployment staying high for a pro- turning to a more normal unemploy-tracted period was “the primary ment rate of 5% or 6% could takesource of risk that we might have four or five years. Some economistsanother slowdown in the economy.” say that assessment is optimistic. He also said “it’s certainly possi- As lawmakers in Washington de-ble” the Fed could expand a pro- bate extending tax cuts and cuttinggram to buy $600 billion in Trea- the deficit, Mr. Bernanke said policysury securities beyond the initial makers should focus on the long-target it announced about a month term structural budget deficit butago. “It depends on the efficacy of not take actions “that will affectthe program. It depends on infla- this year’s spending and this year’stion. And finally it depends on how taxes in a way that will hurt the re- Bloomberg Newsthe economy looks,” he said of the covery.” He also endorsed efforts toprogram aimed at lowering interest overhaul the tax code to increase itsrates and stimulating growth. efficiency and create more incen- This was the Fed chairman’s sec- tives for investment.ond appearance on “60 Minutes.” In Fed Chairman Ben Bernanke said inflation fears were ‘way overstated’ and warned of the risks of not taking any action. Mr. Bernanke called the growinga March 2009 interview, he de- income gap between rich and poorfended the central bank’s response with business leaders. quickly enough to keep prices in cided to embark on its bond-buying Americans “a very bad develop-to the financial crisis amid the back- The bond-buying announcement check. “We’ve been very, very clear plan because of high unemployment ment” that’s based in large part onlash over bailing out insurer Ameri- drew sharp attacks from foreign that we will not allow inflation to and “very, very low” inflation that education. “It’s creating two societ-can International Group Inc. Since leaders, who feared damage to their rise above 2% or less,” he said. “We put the economy at risk of deflation. ies,” he said. “If you’re a collegethe crisis began, Mr. Bernanke has export sectors, along with conserva- could raise interest rates in 15 min- “We’re getting awfully close to graduate, unemployment is 5%,’’ hetaken his message to the public tive economists and politicians who utes if we have to. So, there really is the range where prices would actu- said.through town-hall forums and dis- said it would spur runaway infla- no problem with raising rates, tight- ally start falling,” he said. By acting, “If you’re a high school graduate,cussions on college campuses. tion. ening monetary policy, slowing the “the risk is pretty low. But if the Fed it’s 10% or more. It’s a very big dif- Sunday’s TV interview was taped Mr. Bernanke called the inflation economy, reducing inflation, at the did not act, then given how much ference. It leads to an unequal soci-Tuesday at Ohio State University fears “way overstated” and said he appropriate time.” inflation has come down since the ety and a society which doesn’t havefollowing a separate public forum had 100% confidence he could act Mr. Bernanke said the Fed de- beginning of the recession, I think it the cohesion...that we’d like to see.”Latin American crises offer lessons for Europe IMF extended a loan that year, one an aggressive default is Argentina, load shrank by one-third after the advantage, as Argentina did, [ The Outlook ] in 2001 and another in 2002. The which has been essentially shut default, and it shifted into high unless they pull out of the euro. last IMF loan didn’t expire until out of international financial growth. Part of the reason is the Mr. Hausmann says such aBY BOB DAVIS 2005—giving Brazil seven years to markets since 2001, when it surge in demand for Argentine move would be difficult and have get its affairs in order, avoid committed the world’s biggest commodities, thanks to China. But unpredictable consequences but Latin America has endured default and set it on a path to sovereign-debt default, on $95 partly, it’s because the economy’s could quickly reduce a country’smore financial crises than any growth. Even so, countries resist billion of bonds. In 2005, it growth wasn’t stalled by overly foreign debt. If Ireland declaredother part of the world in the past turning to the IMF for loans crammed down creditors’ throats burdensome debt payments. one Irish pound equal to one euro,six decades. It has learned lessons because it requires big spending a 70% hit to the debt’s face value, “Aggressive debt defaults mean it could turn euro debt into Irishimportant now for the euro zone, cuts and often tighter monetary and it still has many holdouts who you’ll be classified as a rogue pound debt. Then it could let thewhich is coping badly with policy. are trying to pressure Buenos debtor, you’ll be excluded from value of the pound float onfinancial wildfire. But other Latin American Aires into paying more. capital markets—but there’s the currency markets, he said. The Although the two regions have examples also show that default, The downside: The market- possibility you might solve your inevitable devaluation would boostvery different levels of wealth, which euro-zone countries are friendly solution didn’t reduce problems more quickly,” says Mr. the country’s exportthere are important similarities. struggling to avoid, can have a big Jamaica’s overall debt level of Powell. competitiveness, withoutFinancial woes in both regions upside. “Restructuring can be less 140% of gross domestic product, Germany wants euro-zone worsening its domestic debt load.skip from country to country via painful than it appears provided it because the face value of domestic nations to force creditors to take The case of Brazil in 1995trade, finance and group is done cleanly and quickly,” says debt wasn’t touched and foreign hits on their debt in future crises, suggests a less-drastic alternative.psychology. Many Latin countries Harvard economist Ricardo debt wasn’t included in the plan. though it proposes a convoluted That time, the country was pulledtied their currencies tightly to the Hausmann, who has long worked “It gives you time to do the financial plan that may make such out of a financial funk when thedollar, leaving their monetary on Latin debt problems. “There adjustment, but you still have to an outcome unlikely. But euro- Argentine peso appreciated rapidlypolicy in the hands of the Federal have been restructurings that have do it,” Mr. Powell says. zone countries can’t devalue their because it was tied to what wasReserve, similar to how euro-zone had salutary effects” by reducing The upside: Argentina’s debt currencies to gain a competitive then a soaring dollar. Braziliancountries ditched their own debt burdens. agricultural exports boomed ascurrencies in favor of the euro and Structuring a deal is tricky. Argentina’s sank. Argentinathe European Central Bank. Andrew Powell, a senior researcher Crisis champs inadvertently became an economic How to fight a financial crisis at the Inter-American Development Number of banking crises 1945-2008* engine for Brazil.that is threatening to spin out of Bank, distinguishes between Germany could play the samecontrol? The traditional recipe of “market friendly” defaults and Europe role in Europe—though this timecutting budgets and social “aggressive” defaults. Jamaica—the Asia by design—if it revved upprograms to pay down debts, Caribbean is considered part of the North America domestic demand to draw imports 31bolstered by International Latin American region—this year 3 22 from Ireland, Greece, Spain andMonetary Fund loans, can work, persuaded more than 99% of other troubled European countries.Latin America’s experience shows. creditors to accept a reduced Latin America Nobel Prize-winning economistPartly that is because the IMF interest rate on its domestic debt Africa Joseph Stiglitz says Germanyessentially rolls over loans for and later repayment. That reduced would also need to help countries 35 17countries that make progress in the government’s yearly interest slash their debts, rather than justmeeting cost-reduction targets. In payments by about one-third, Mr. Oceania 3 providing more loans.Europe, it is working with a Powell estimates. The IMF and “These countries [in Europe]European fund to craft rescue multilateral development agencies could probably survive with justloans. provided a $2.2 billion loan to insisting creditors take haircuts,” When investors abruptly pulled support banks, which held much of rather than leave the euro, hemoney out of Brazil in 1998, *For some African and Asian countries, the timeframe begins at independence. the debt. Source: Economists Carmen Reinhart of University of Maryland and Kenneth Rogoff of Harvard says. “But they’ll need anotherthreatening to bankrupt it, the The most prominent example of tool—a huge amount of aid.”
Tuesday, December 7, 2010 THE WALL STREET JOURNAL. 13 OPINION: REVIEW OUTLOOK Japan’s QE BluesA s everyone waits for results from ing program “to support strengthening in industries like heavy manufacturing Prime Minister Naoto Kan has proposed the U.S. Federal Reserve’s new the foundations for economic growth.” where Japan already has a capacity glut. doubling, to 20%, the tax on capital quantitative easing, it’s already The central bank intended to lend There’s little evidence of renewed gains and dividends. This, incidentally,possible to pass an early judgment on three trillion yen ($36 billion) via borrowing enthusiasm from smaller works at cross-purposes to the BOJ’sanother developed-country experiment banks to small- and medium-sized en- companies, as with the longer-term effort to boost asset prices by buyingwith loose money: Japan. Recent events terprises in high tech or green tech. lending facility. Also unclear is what exchange-traded funds composed of eq-there offer some sobering warnings on It’s been a flop. In the most recent dis- banks will do with the cash they’ve re- uities.the role, or lack thereof, of monetary bursement, the BOJ found takers for ceived for their holdings. The danger is As of last week, Tokyo also is step-policy in sparking a recovery. only 46% of the nearly one trillion yen that if they simply buy government ping back from earlier promises to cut The Bank of Japan announced this it was willing to lend, and less than bonds—effectively taking advantage of its high 40% effective corporate taxyear a string of easing measures, from half of eligible banks BOJ-induced higher rate, with officials suggesting even aa return to its effective zero-interest- participated. corporate bond prices five-percentage-point cut might be “un-rate policy to several quantitative steps Banks know that en- Tokyo discovers, to cash out some of affordable.” Postal reform, a bellwetherto push more yen out its doors. So far trepreneurs are ambiv- their holdings—the of the government’s liberalization in-they’re not working as hoped. Inflation, alent about investing again, the limits move could exacerbate tentions, is stalled. And to top it all off,at 0.2%, was slightly positive in Octo- in their businesses; of monetary policy. deflation instead of some policy makers appear to be con-ber, the most recent month for which one clue is that small fighting it. templating a carbon tax to help fightdata are available, but nearly half of business confidence Then again, the global warming—an extra cost for whatthe price rise is explained by a hike in remains soft, despite some recent im- BOJ’s failure to spark growth might is already among the world’s most car-cigarette taxes. No one suggests Japan provement. And banks don’t need the not be such a terrible thing. The loom- bon-efficient economies.has kicked deflation for good. BOJ’s money anyway when they’re ing economic debate in Tokyo concerns Faced with such policies, no wonder As for growth, there’s less to the awash in deposits on which they pay the BOJ’s independence in the face of many businesses continue to be reluc-most recent quarter’s positive GDP rock-bottom interest rates. efforts by some smaller parties in the tant to make any job- and growth-numbers than meets the eye. GDP grew Nor will other, more vigorous, BOJ Diet to force the central bank into a boosting investments. Until executivesat an annual rate of 4.4% between July programs necessarily be any more effec- permanently accommodative stance by and entrepreneurs start using theand September. Households appear to tive. Last week, the central bank held its giving it a dual mandate for price sta- money the BOJ is throwing from its he-have front-loaded some of their con- first auction to buy corporate bonds un- bility and growth. Never mind that in licopter, the yen notes will flutter use-sumption of cars ahead of the expira- der the five trillion yen easing it an- other places where this has been tried, lessly to the ground.tion of the Japanese equivalent of nounced in October. This time it did notably the U.S., it eventually becomes As Japan grapples with these prob-America’s cash-for-clunkers program. manage to push money out. Yields have clear that a central bank that tries to lems, the rest of the world—and espe-Business investment is still weak. been falling in recent weeks in anticipa- do both will likely fail on both. cially Washington—can learn a few les- The problem remains, as always, tion of the BOJ purchases, and more Rather, the BOJ’s inability to spark a sons. The most important: No matterthat no matter how much money the companies than usual issued debt ahead reflation ought to start a debate over how loose the money is, it will spurBOJ prints, there simply isn’t demand of the BOJ move as a result. But don’t the many other Japanese policies that genuine growth only if other govern-for it in the economy. This is most ob- call this a success yet. Many of the cor- stifle growth. Recent weeks offer ment policies reward investment andvious in the failure of the BOJ’s lend- porate borrowers are larger companies plenty of examples. The government of entrepreneurship. Ethanol on the RunT he U.S. political class inevitably in- Tom Coburn dislike this costly industrial advanced fuels that aren’t made from compete in one of three ways: subsidize vokes the moon shot or Manhattan policy, while liberals like Barbara Boxer corn and also aren’t commercially viable, it, protect it from competition, or require Project as a model for every unre- and Sheldon Whitehouse are turning but we’ll take his partial conversion. its use. We understand that ethanol mayalistic energy goal, but for once maybe against the hefty carbon emissions that The ethanol industry is responding by be the only product receiving all threethat hyperbole is apt: A left-right coali- come with corn fuels. predicting disaster if it forms of support from the U.S. govern-tion is emerging to end ethanol subsidies. Even Energy Secre- loses its taxpayer feed- ment at this time.” Last week, no fewer than 17 Senators tary Steven Chu seems A left-right anti- ing tubes, with the Re- Sure enough, also last week, the Envi-signed a letter calling ethanol “fiscally in- to have found the anti- newable Fuels Associa- ronmental Protection Agency ruled thatdefensible” and “environmentally unwise.” ethanol religion. Speak- boondoggle coalition. tion evoking massive under the 2007 energy bill AmericansLed by Democrat Dianne Feinstein and ing at the National job losses and another must use at least 13.95 billion gallons ofRepublican Jon Kyl, the group said Con- Press Club last Monday, Dust Bowl. But what ethanol next year, or about 8% of totalgress shouldn’t extend certain subsidies Mr. Chu said that “ethanol is not an ideal kind of business can’t survive without U.S. fuel consumption. In protecting itsthat expire at the end of the year, includ- transportation fuel” and that the govern- subsidies when government also man- free ride, the ethanol lobby is like Fannieing the 45-cent-per-gallon tax credit for ment’s focus should be “on ways that we dates that consumers buy its products? Mae before the crash. But at least nowblending ethanol into gasoline and tariffs can actually go beyond ethanol.” Like As the Senators dryly noted, “Historically there’s a glimmer of political hope foron cheaper imports. Conservatives like most greens, he still supports so-called our government has helped a product taxpayers. The Walking Death TaxO verlooked in the Washington brawl Liberals are content to let the rate re- with a $1 million exemption will tax The Gallup results confirm that voters over expiring Bush-era tax rates is vert to 55%, with some moderate Demo- roughly 10 times more small businesses intuitively understand this tax isn’t really what will happen to the death tax. crats arguing for a 45% rate. Republican and farms than would Mr. Kyl’s proposal. about socking Bill Gates or Warren Buffett.Without action in the lame duck Congress, Jon Kyl of Arizona and Democrat Blanche A recent study by Doug Holtz-Eakin, the Those two billionaires, like most others,the estate tax will rise from the dead on Lincoln of Arkansas are pushing a compro- former director of the Congressional Bud- have made sure they’ll escape the grim taxJanuary 1, the rate climbing back to 55% mise that would lower the top rate to 35% get Office, finds that the estate tax re- reaper by parking most of their wealth infrom zero this year. The exemption with a $5 million deduction. That rate is duces savings and capital formation and tax-exempt foundations. That may explainamount will revert to a miserly $1 million, still 35 percentage points too high for our forces family businesses to liquidate at why the estate tax is so fiscally inconse-unindexed for inflation. liking, but we’ll take it as an alternative to the time of an owner’s death, which puts quential, raising barely 1% of all federal President Obama and Congressional the political confiscation of more than half hundreds of thousands of jobs in peril. revenue (0.6% in 2009).Democrats don’t think this is a high prior- the wealth built by someone who has As for the deficit, Congress could give At least 10 Senate Democrats have cam-ity, but voters do. A November Gallup Poll saved over a lifetime. An estate of $5 mil- relief to families and enhance revenue col- paigned at one time or another for deathfound 56% of Americans think keeping the lion isn’t that much for a successful busi- lections by lowering the gift tax rate to tax repeal or relief. The next few days willestate tax “from increasingly signifi- ness person to accumulate over 50 years. 10% or 15% from 35% on any gifts above determine whether they were telling thecantly” is “very important.” That’s more Mr. Obama, who professes to care $13,000 a year. This would allow parents truth. The result will tell us if Congress isthan think it is a priority to extend cur- about small businesses and jobs, should to pass along more money to their kids turning to a tax agenda rooted in growthrent tax rates (50%), extend jobless bene- pay attention to new estimates by the and grandkids while they are still alive, in- and fairness, or sticking with the policy offits (48%), ratify the Start treaty (40%) or Joint Committee on Taxation. The com- creasing federal tax collections in the next government greed and envy that has de-let gays serve in the military (32%). mittee finds that reverting to the 55% rate few years by billions of dollars. fined the last four years.
Tuesday, December 7, 2010 THE WALL STREET JOURNAL. 15 OPINION Girding for the CyberwarBY MORTIMER ZUCKERMAN immobilization of hundreds of key tween offense and defense. The sites in independent Georgia in average malware has about 175 Several years ago, during the 2008 was a Russian government lines of code, which can attack de-presidency of George W. Bush, operation accompanying its kinetic fense software using between 5many banks and Wall Street firms war in support of breakaway re- million and 10 million lines ofwere knocked offline. The financial gions in the former Soviet repub- code.industry, which had long been con- lic. In a cyberattack on South Ko- It is currently incredibly chal-sidered to have the best safeguards rea last year, an estimated 166,000 lenging to figure out the source ofagainst cyberinfections in the pri- computers in 74 countries flooded an attack, and this in turn inhibitsvate sector, discovered its comput- the websites of Korean banks and our capacity to prosecute theers had been penetrated by a government agencies, jamming wrongdoers or retaliate. Maliciousworm, so-called because a virus their fiber optic cables. programmers are always able togrown on one computer can worm Mr. Clarke argues in his book find weaknesses and challenge se-its way to millions of others. Mr. that China is one of the key players curity measures. The defender isBush asked then Treasury Secre- in developing a cyberwar capabil- always lagging behind the attacker.tary Hank Paulson to examine what ity. The Chinese use private hack- The task is of such a scale thatit would take to protect critical in- ers to engage in widespread pene- it needs nothing less than afrastructures. The upshot was that tration of U.S. and European souped-up Manhattan Project, likesteps were taken to strengthen the networks, successfully copying and the kind that broke the scientificsecurity of the military networks, exporting huge volumes of data. barriers to the bomb that endedbut little else was done. That’s on top of their capacity to World War II. America’s vulnera- The major shock about the mis- attack and degrade U.S. computer bilities are increasing exponen- Corbischievous WikiLeaks—even more systems and shut down critical tially. Cyberterrorism poses athan the individual headline networks. He believes that the se- threat equal to that of weapons ofitems—is that it dramatizes how nance. So it is not surprising that missiles to detonate, and wipe out crets behind everything from phar- mass destruction. A large scale at-vulnerable we still are. Digitization the Internet creators were com- reams of financial and supply- maceutical formulas, bioengineer- tack could create an unimaginablehas made it easier than ever to fortable with a network of net- chain data. Havoc can be created at ing designs, and nanotechnologies degree of chaos.penetrate messages and download works rather than separate net- the blink of an eye from remote lo- to weapons systems and everyday We should think of cyberattacksvast volumes of information. U.S. works for government, finance and cations overseas. Criminal groups, industrial products have been sto- as guided missiles and respondinformation systems have become other sectors. nation-states, terrorists and mili- len by the Chinese army or private similarly—intercept them and re-the most aggressively targeted in A symbol to many of the open tary organizations are exfiltrating hackers. taliate. This means we need a fed-the world. Each year, attacks in- communication of American cul- vast amounts of data from the U.S. The United States has done lit- eral agency dedicated to defendingcrease in severity, frequency, and ture, the Internet has thus evolved public and private sectors. tle to enhance the safety of the our various networks. You cannotsophistication. On July 4, 2009, for into a two-edged sword. Our exten- Another worrisome threat is networks that bolster our econ- expect the private sector to knowinstance there was an assault on sive systems facilitate control of the distributed denial of service at- omy. We urgently need to develop how—or to have the money—to de-U.S. government sites—including pipelines, airlines and railroads; tack, a deluge of Internet traffic defensive software to protect these fend against a nation-state attackthe White House—as well as the they energize commerce and pri- specifically intended to crash or networks and create impermeable in a cyberwar. One suggestion rec-New York Stock Exchange and Nas- vate banking. They give us rapid jam networks. Hackers using mali- barriers to the profusion of mal- ommended by Mr. Clarke is thatdaq. There were similar attacks access to medical and criminal re- cious computer code can mobilize ware. Network conver- the government create a Cyber De-that month on websites in South cords. But they also offer a target a “botnet,” or robotic network, of gence—transporting all communi- fense Administration. He’s right.Korea. In 2008, U.S. classified net- for terrorists and thieves. hundreds of thousands of ma- cations over a common network Clearly, defending the U.S. from cy-works, which were thought inviola- Most people who experience chines that simultaneously visit structure—increases the opportu- berattacks should be one of ourble, were penetrated. Three hack- “malware” have been victims of websites to shut them down. nities for and the consequences of prime strategic objectives.ers managed to steal 170 million so-called phishing, whereby crimi- More recently, a virus that tar- disruptive cyberattacks. Hackers Few nations have used com-credit-card numbers before the nals pretending to be bank employ- gets special industrial equipment are constantly devising new ways puter networks as extensively asringleader was arrested in 2008. ees, for example, trick the gullible has become widely known as the to trick systems. the U.S. has to control electric The Internet was originally in- into revealing account numbers “Stuxnet” attack. This is the worm Not many people realize that power grids, airlines, railroads,tended for thousands of research- and passwords. But cyberwarriors that this fall reportedly infiltrated all of America’s air, land and sea banking and military support. Fewers, not billions of users who did can do damage on a much larger the computers controlling Iran’s forces rely on network technolo- nations have more of these essen-not know and trust one another. scale, as former White House coun- nuclear centrifuge facilities, gies that are vulnerable to cyber- tial systems owned and operatedThe designers placed a higher pri- terterrorism czar Richard Clarke thereby delaying or even destroy- weapons, including logistics, com- by private enterprise. As with 9/11,ority on decentralization than on points out in his revealing book ing its nuclear-weapons program mand and control, fleet we do not enjoy the luxury of a dil-security. They never dreamed the “CyberWar,” published earlier this (the one Iran denies it has). It is positioning and targeting. If they atory response.Internet could be used for com- year. They can tap into these net- the world’s first-known super cy- are compromised or obliterated,mercial purposes or that it would works and move money, spill oil, berweapon designed specifically to the U.S. military would be incapa- Mr. Zuckerman is chairman andeventually control critical systems vent gas, blow up generators, de- destroy a real-world target. ble of operating. It does not help editor in chief of U.S. News &and undergird the world of fi- rail trains, crash airplanes, cause Similarly, many believe that the that there is a disproportion be- World Report. Break the Silence on Syria’s Nuclear ProgramBY GRAHAM ALLISON been convenient for world powers IAEA technical assistance. How- military and nonnuclear nature of unwelcome precedent for futureAND OLLI HEINONEN to let Syria slip off the radar and ever, it has not provided access to these sites, it has no obligation to proliferators. to move on as if these events had the facility, saying it will postpone provide more information to the A feasible next step is readily The United States has joined not occurred. substantive discussions and verifi- IAEA. But the safeguards agree- available. According to Syria’s con-other major powers in a danger- It is by no means certain that cation of these materials until ment contains no such limitation tract with the IAEA, the agencyous conspiracy of silence on Damascus has given up its nuclear March or April 2011. on access to information, activities must be provided access to loca-Syria’s nuclear program. Syria ambitions. Since November 2008, or sites. tions that have benefited from itsforeswore nuclear weapons when nine IAEA reports (the latest re- The design of the Dair Alzour technical support. More specifi-it ratified the nuclear Nonprolifer- leased last month) have docu- Three years after Israel project appears very similar to the cally, the safeguards agreement al-ation Treaty in 1969. To assure the mented Syria’s noncompliance with destroyed its Al-Kibar North Korean reactor in Yongbyon. lows the IAEA to conduct a “spe-world that it is fulfilling that com- its requests for more details about And North Korea is capable of pro- cial inspection” of the Dair Alzourmitment, Syria also signed a safe- its nuclear program. reactor, the Bashar Assad ducing fuel for such a reactor. site and other suspected sites. Onguards agreement with the Inter- Syria has not provided plausi- regime continues We recently learned from U.S. Dec. 3, a bipartisan group of U.S.national Atomic Energy Agency ble explanations for the presence nuclear expert Sigfried Hecker lawmakers called upon President(IAEA) in 1992. of man-made uranium particles to stonewall the IAEA. that North Korea, with Pakistan’s Obama to press the IAEA to con- Yet Syria was able to secretly found by the IAEA in 2008 at Dair help, has been able to build a duct such an inspection. Other-buy a nuclear reactor from North Alzour, the site of the bombed re- small uranium enrichment facility. wise, the world risks awakening toKorea, a country facing the most actor. More worrying, the agency It is essential that the IAEA es- Syrian President Bashar Assad told a Syria that has become the nextrestrictive sanctions regime in the has discovered uranium conver- tablish whether there is a link be- the Austrian newspaper Die Presse North Korea.world. If Israel had not bombed sion experiments at a research re- tween the uranium found in Dair in December 207 that Pakistanithe Al-Kibar reactor site in an air actor in Damascus, which Syria Alzour, Homs, and the research re- nuclear proliferator A.Q. Khan had Mr. Allison is director of thestrike in September 2007, it would had failed to report. (Uranium actor in Damascus to ensure that offered his nuclear technology to Belfer Center for Science and In-be producing plutonium by now conversion is a necessary step to- all nuclear material in Syria is de- Syria. Many Syrian engineers and ternational Affairs at Harvardfor Syria’s first nuclear bomb. ward creating weapons-grade ura- clared to the world’s international scientists would have been in- University’s Kennedy School and But this violation of Syria’s nium.) nuclear watchman. But there has volved in the Dair Alzour project. author of “Nuclear Terrorism: Thetreaty commitments was not dis- Syria has acknowledged that it been no progress in establishing What are they doing today, three Ultimate Preventable Catastro-covered by IAEA inspectors. And has used yellowcake (necessary to facts about the destroyed reactor years after that site was bombed? phe” (Times Books, 2004). Mr.the program was not halted by the initiate uranium enrichment) in or three other locations that may While Syria stalls, the authority Heinonen is a former deputy di-permanent members of the United these experiments from a facility be functionally related to it. Syria of the whole nonproliferation re- rector of the IAEA and is now aNations Security Council. So it has near Homs, which benefited from continues to argue that due to the gime is eroding. This sets another senior fellow at the Belfer Center.
16 THE WALL STREET JOURNAL. Tuesday, December 7, 2010 IN DEPTHChina clones, sells Russian fighter jets Continued from first page riers and carrier-based fighters, that could est weapons manufacturer and exporter. defeat in 1945.companies as China starts to compete in threaten Taiwan and test U.S. control of the China accounted for 2% of global arms China’s rapid mastery of Russian tech-global markets with advanced trains, Western Pacific. transfers between 2005-2009, putting it in nology raises questions about U.S. coopera-power-generating equipment and other ci- Chinese exports of fighters and other ad- ninth place among exporters, according to tion with the civilian faces of Chinese armsvilian products based on technology ob- vanced weapons also threaten to alter the the Stockholm International Peace Research makers.tained from the West. military balance in South Asia, Sudan and Institute (SIPRI). The Aviation Industry Corp. (AVIC), In this case, there is an additional secu- Iran. But no other Asian country has sought China’s state aerospace company, buildsrity dimension, however: China is develop- China’s military muscle still lags far be- to project military power—and had the in- fighters, for instance. But it is also makinging weapons systems, including aircraft car- hind that of the U.S., by far the world’s larg- digenous capability to do so—since Japan’s a new passenger jet with help from General Electric Co. and other U.S. aerospace com- panies. A GE official says the company has partnered with foreign engine manufactur- ers for decades “with elaborate protections built in place” that have preserved the com- pany’s intellectual property. There are also implications for U.S. weapons programs. Last year the Pentagon decided to cut funding for the F-22—cur- rently the most advanced fighter deployed in the world—partly on the grounds that China wouldn’t have many similar aircraft for at least 15 years. But then Gen. He Weirong, deputy head of China’s Air Force, announced that Chi- nese versions of such jets were about to un- dergo test flights, and would be deployed in “eight or 10 years.” The Defense Intelligence Agency now says it will take China “about 10 years” to deploy stealth fighters in “meaningful num- bers.” For Moscow and Beijing, meanwhile, a dispute over the intellectual-property rights to such weaponry is testing their efforts to overcome a long historical rivalry and build a new era of friendly ties. “We didn’t pay enough attention to our intellectual property in the past,” said a Russian defense official. “Now China is even competing with us on the international market.” Few things illustrate this more clearly than the J-11B, a Chinese fighter that Rus- sian officials allege is a direct copy of the Su-27, a one-seat fighter that was developed by the Soviets through the 1970s and 1980s as a match for the U.S. F-15 and F-16. Before the early 1990s, Moscow hadn’t provided major arms to Beijing since an ideological split in 1956, which led to a brief border clash in 1969. But after the collapse of the Soviet Union, the Kremlin was desperate for hard currency. In 1992, China became the first country outside the former Soviet Union to buy the Su-27, paying $1 billion for 24. The deal was a coup for China, which had shifted its military focus away from a potential Soviet land invasion, and now wanted to defend territorial claims over Taiwan and parts of the South China Sea and East China Sea. Efforts to upgrade its air and naval forces had been hampered by U.S. and Euro- pean Union arms embargoes imposed after the 1989 crackdown on protesters around Tiananmen Square. China’s military modernization program grew more urgent after its leaders were stunned by the display of U.S. firepower during the first Gulf War, Western military J-11B specs ENGINE Originally fitted with Russian AL31F engine, now being fitted with Chinese WS-10A RANGE 5,200 kilometers (with one aerial re-fueling) SPEED Mach 2.35 (2,500 kilometers per hour) RADAR Indigenous radar capable of tracking 6-8 targets, and engaging 4, simultaneously WEAPONS PL-8 and PL-12 air-to-air missiles, LT-2 laser-guided bomb, LS-6 Associated Press precision-guided glide bomb, 30mm cannon ESTIMATED NUMBER IN CHINESE AIR FORCE 50Chinese fighter jets, believed to be J-11Bs, train over Tibet in July. Russian officials allege it is a direct copy of the Su-27.
Tuesday, December 7, 2010 THE WALL STREET JOURNAL. 17 IN DEPTHofficials say. Beijing’s breakthrough came in 1996,when it paid Russia $2.5 billion for a license Russia’s Su-27 during an exhibition flight in Novemberto assemble another 200 Su-27s at the She- 2004 at the China Air Show in the Chinese city ofnyang Aircraft Company. Zhuhai. Russia used to be the star of this show, but The agreement stipulated that the air- last month it didn’t bring a single real aircraft.craft—to be called the J-11—would includeimported Russian avionics, radars and en-gines and couldn’t be exported. But after building 105, China abruptlycanceled the contract in 2004, claiming theaircraft no longer met its requirements, ac-cording to Russian officials and defense ex-perts. Three years later, Russia’s fears wereconfirmed when China unveiled its own ver-sion of the fighter jet—the J-11B—on statetelevision. “When the license was sold, everyoneknew they would do this. It was just a riskthat was taken,” said Vassily Kashin, a Rus-sian expert on the Chinese military. “At thattime it was a question of survival.” The J-11B looked almost identical to theSu-27, but China said it was 90% indigenousand included more advanced Chinese avion-ics and radars. Only the engine was stillRussian, China said. Now it is being fitted with a Chinese en-gine as well, according to Zhang Xinguo,deputy president of AVIC, which includesShenyang Aircraft. “You cannot say it’s just a copy,” he said.“Mobile phones all look similar. But tech-nology is developing very quickly. Even if itlooks the same, everything inside cannot bethe same.” The J-11B presented Russia with a starkchoice—to continue selling China weapons,and risk having them cloned, too, or to stop,and miss out on its still lucrative market. Russia’s initial response was to suspend Associated Presstalks on selling China the Su-33, a fighterwith folding wings that can be used on air-craft carriers. Since then, however, it has re-opened ne-gotiations on the Su-33, although it rejectedChina’s offer to buy just two, and insistedon a larger order. Milestones advanced jets like the J-11B. Last month, Russia’s government pro- Russia’s predicament mirrors that of many Sukhoi Aviation Holding Co.’s official posed new legislation attaching an intellec-position now is that it remains confident 1950s Soviet Union allows China to copy tual property rights clause to foreign mili-about its business in China. various low-tech weapons tary sales agreements. Indeed, many aviation experts believeAVIC is having problems developing an in- 1956 Ideological dispute leads to cutoff of The issue was raised during a visit by President Dmitry Medvedev to China in Oc- foreign companies asdigenous engine for the J-11B with the samethrust and durability as the original Russianones. Soviet military assistance 1992 China becomes first country outside tober, according to people familiar with the situation. “Of course we’re concerned, but we also China starts to Sukhoi is betting that China will have tobuy the Su-33 on Russian terms as Beijing former Soviet Union to buy Su-27 fighter jet recognize there’s very little we can do,” said Mr. Pukhov, of the Russian Defense Minis- compete in globalwill struggle to develop its own carrier-based fighter in time for the planned launch 1994 China buys four Kilo class diesel submarines from Russia try’s Public Advisory Council. Asked what advice he would give West- markets with civilian products based onof its first carriers in 2011 or 2012. ern aerospace firms, Sukhoi’s Mr. Sergeev The company also hopes to sell China the 1996 China buys license to assemble Su-27 said: “They should keep in mind what prod-Su-35—a more advanced version of the ucts they’re selling—whether they’re civil-Su-27—if the J-11B doesn’t perform wellenough. 1997 China buys two Sovremenny-class destroyers from Russia ian or dual use. And most important is to prepare very carefully your contract docu- technology obtained “We’re just hoping our aircraft will bebetter,” said Sergey Sergeev, deputy direc-tor general of Sukhoi. “It’s one thing to 2002 China buys eight more submarines and two more destroyers from Russia ments.” While Russia worries about intellectual property, other countries are concerned from the West. In thismake a good quality copy of a spoon, butquite another to make one of an aircraft.” 2007 China unveils J-11B, which Russians about security. The arms programs China initiated two or three decades ago are start- case, there is an The Russian and Chinese governmentsboth declined to comment. say is a copy of Su-27 ing to bear fruit, with serious implications for the regional—and global—military bal- additional security dimension, however: In private, however, Russian officials say ance.they worry that China is about to start “Whereas 15 years ago they had nothing re- The J-11B is expected to be used by themass producing and exporting advanced ally, now they’re offering reasonable tech- Chinese navy as its frontline fighter, capa-fighters—without Russian help. Chinabought $16 billion worth of Russian arms nology at a reasonable price.” China is generating particular interest ble of sustained combat over the entire East China Sea and South China Sea. China is developingbetween 2001 and 2008—40% of Russia’ssales. Photographs published recently on Chi- among developing countries, especially with the relatively cheap JF-17 fighter with a Russian engine. Aircraft carriers and J-15 fighters would further enhance its ability to stop the U.S. weapons systems that intervening in a conflict over Taiwan, andnese military websites appear to show en-gines fitted on the J-11B and a modified ver- The Kremlin has approved the re-export of the engine to Pakistan, as it has no arms test its control of the Western Pacific. China’s arms exports could have reper- could threaten Taiwansion—called the J-15—for use on aircraftcarriers. business there. But it was enraged last year when Azer- cussions on regions in conflict around the world. Pakistan inducted its first squadron and test U.S. control of the Western Pacific. That has compounded Russian fears that baijan, an ex-Soviet republic, began talks on of Chinese-made fighter jets in February,China has reverse engineered an Su-33 pro- buying JF-17s, according to people familiar potentially altering the military balancetotype it acquired in 2001 from Ukraine, ac- with the situation. with India.cording to Russian defense experts. Also last year, China’s JF-17s and Russia’s Other potential buyers of China’s JF-17 At last year’s Dubai Air Show, China MiG-29s competed in a tender from Myan- fighter jet include Sri Lanka, Bangladesh,demonstrated its L-15 trainer jet for the mar, which eventually chose the Russians, Venezuela, Nigeria, Morocco and Turkey. Infirst time. In June, China made its debut at but paid less than they wanted. the past, China has also sold fighters tothe Eurosatory arms fair in France. This year, both entered a tender from Sudan. In July, China demonstrated the Egypt, with China offering the JF-17 for $10 The potential customer of greatest con-JF-17—the fighter developed with Paki- million less than Russia’s $30 million cern to the U.S. is Iran, which purchasedstan—for the first time overseas at the MiG-29. about $260 million of weapons from ChinaFarnborough Airshow in Britain. That prompted Mikhail Pogosyan, who between 2002-2009, according to Russia’s China also had one of the biggest pavil- heads Sukhoi and the company that makes Centre for Analysis of the Global Armsions at an arms fair in Capetown in Septem- MiGs, to suggest that the Kremlin stop sell- Trade.ber. ing China the Russian engines for the JF-17. In June, China backed U.N. sanctions on “They’re showing up at arms fairs The Kremlin hasn’t done that yet, but Iran, including an expanded arms embargo,they’ve never been to before,” said Siemon Russian officials have suggested privately but Tehran continues to seek Chinese fight-T. Wezeman, an arms trade expert at SIPRI. taking legal action if China exports more ers and other weaponry.
As of 11 a.m. ET Euro 1.3287 g 0.72% Yen/US$ ¥82.64 g 0.02% Yen/A$ ¥81.74 À 0.06% Oil 89.14 g 0.06% Gold 1418.10 À 0.90% 10-year Treasury À 18/32 yield 2.950% 3-month Libor 0.30344 Nippon Steel’s chairman battles P&G should use bonds the yen, prices and competition to finance stock buybacks BUSINESS& FINANCE. BUSINESS & FINANCE 20 HEARD ON THE STREET 34Tuesday, December 7, 2010 THE WALL STREET JOURNAL. asia.WSJ.comRio Tinto looks at Riversdale MiningBig shareholders are chilly to possible $3.52 billion offer for Australian coal producer with Mozambique propertiesBY DAVID FICKLING be unlikely to sell for less than A$20 India’s Tata Steel Ltd. and Bra- a share. zil’s Cia. Siderurgica Nacional hold Riversdale Minings Riversdale Mining Benga project in SYDNEY—Rio Tinto has held “It’s very difficult to find compa- 24% and 13% of Riversdale shares, Daily closing share price Mozambiquetalks about acquiring Riversdale nies that are well-endowed with this respectively. Tata Steel said it con-Mining Ltd. in a deal that would sort of commodity in this sort of siders its Riversdale stake a “valu- Monday’s close: A$16.31,value the Australian company at quantity.…It’s two-thirds of the bat- able strategic investment” and that up 16%3.55 billion Australian dollars tle to find something that large,” it is monitoring the situation. A$16(US$3.52 billion), Riversdale said. said Clive Donner, managing direc- A memorandum of understand- Monday’s announcement by Riv- tor of LinQ Resources Fund, Rivers- ing between Wuhan Iron & Steelersdale sparked a 15% jump in its dale’s fourth-biggest shareholder. Co. and Riversdale that would have 14shares. Rio Tinto, which hasn’t “The market’s telling us that A$15 given the Chinese company 8% ofmade a formal offer, declined com- isn’t the right price. We think this the miner in return for a US$800 12ment. thing is worth A$15 to A$20 a million investment in the Zambeze Riversdale has 13 billion tons in share,” he said. project expired, but Riversdale said 10coking- and thermal-coal resources Andrew Gardner, an analyst at it remains interested in a deal.in its Benga and Zambeze projects MF Global in Sydney, said Riversdale Riversdale has also said it wouldin Mozambique, an important should be valued at A$17 to A$18 a consider entering a joint venture 8source of coal. share on the quality of its assets with a diversified miner over its The indicated takeover price of alone but that the presence of major Tete East project in Mozambique. 6A$15 (US$14.88) a share, a 6.4% pre- steelmakers as shareholders could Coking coal, a high-quality vari-mium to the company’s closing price drive the valuation higher. He said 2010 ety that is used in making steel, isFriday, was outstripped by a rise in the Rio Tinto talks could flush out in strong demand amid construction Sources: Thomson Reuters Datastream;Riversdale’s stock to A$16.21. Two other parties interested in Rivers- booms in emerging economies. But Bloomberg News (photo)major shareholders said they would dale’s assets. Please turn to page 20Deals boom in Australiadespite private-equity tax [ Asia Deal Journal ] Undeterred Australian acquisitions byBY ANDREW CRITCHLOW * private-equity ﬁrms, in billions ofAND CYNTHIA KOONS U.S. dollars SYDNEY—A year ago, when $8Australia began a push to taxprofits from private-equity deals, 6 PURE BREITLINGthe industry warned that buyoutfunds would take their sought- 4after capital elsewhere. The evidence suggestsotherwise. 2 By the time Australian taxauthorities upheld their initial tax 0decision last week, foreign-based 2005 ’06 ’07 ’08 ’09 ’10private-equity firms had YTD *Excluding add-on transactionsannounced several deals involving Source: DealogicAustralian firms. Private-equitydeals so far this year have totaled$5.2 billion in value, up more than 2.7% clip. Its resources-dependenteightfold from 2009 and the economy is closely tied to Asia’slargest amount since 2006. high-growth regions. In October, Kohlberg Kravis The recent deals share theRoberts & Co. made an offer for same logic: Australia’s economyfund manager Perpetual Ltd. that will continue to grow at a fastervalued it at up to 1.75 billion rate than other comparableAustralian dollars (US$1.73 industrialized nations, as Chinabillion). In July, a group led by and the rest of Asia consume everCarlyle Group LP beat out KKR greater quantities of its coal andwith a A$2.7 billion bid for ore. In this context, private equity The Navitimerhospital operator Healthscope may be willing to take the tax hitLtd. in exchange for access to Foster’s Group Ltd., brewer of Australian businesses.Australia’s Fosters beer, in It wasn’t always this way. TheSeptember rejected an approach government of former Primeof up to A$2.7 billion from an Minister John Howard offered taxunidentified international private- breaks and incentives beginning in W WW. B R E ITL ING . C O Mequity buyer. 2006 to encourage foreign Despite the tax, Australia’s investment. That was beforeeconomy is growing at a healthy Please turn to page 26
20 THE WALL STREET JOURNAL. Tuesday, December 7, 2010 BUSINESS FINANCEForging a yen strategyNippon Steel’s chairman battles currencies and input pricesBY ROBERT GUY MATTHEWS deal went through.] develop close relationships with [Japanese customers. Second, we TOKYO—Akio Mimura, chairman WSJ: How do you manage Nippon would like to provide local employ-of Nippon Steel Corp., is trying to through these high raw-material ment and maintain that social re-restore the Japanese company’s lus- prices? sponsibility.ter while battling a strong yen, ris- Mr. Mimura: In the short term, we However, it might be better withing raw-materials prices and in- have limited options. However, a change in the global environmentcreased competition from other mid- to long term, we can make in- to capture demand directly where itsteelmakers trying to tap China’s lu- novations in technology. exists. Demand is rapidly growing incrative market. other parts of the world outside of Mr. Mimura, through an inter- WSJ: What about buying your own Japan. This has been reidentifiedpreter, says this is a tough time to sources of raw materials, such as within our priorities. We have be a Japanese steel iron ore and coal mines, as your ri- turned our position to a globalBOSS executive. The yen’s val ArcelorMittal is doing now? player rather than being a domesti-TALK strength makes do- Mr. Mimura: Our cash flow is lim- cally production-based player. mestic steel produc- ited. We can’t do everything. We are Therefore, we are developing all oftion more expensive when sold in not trying to make a profit out of Andreas Seibert for The Wall Street Journal our new capacity overseas.overseas markets, but he says he mining as a business.feels a social responsibility to keep One major direction we are pur- WSJ: Where is Nippon seeing op-jobs in Japan. Meanwhile, the cost suing is overseas mining joint ven- portunities to grow and in whichof raw materials like iron ore and tures. Unless we have some amount kinds of steel products?coal are rising while uneven global of captive mine supply materials, we Mr. Mimura: Galvanized automotivedemand for steel pressures prices. won’t be able to enjoy advantages in steel [which has properties to avoid He also must determine the best this competitive landscape. It does rust]. We have two lines in China,way to capitalize on China’s rising not necessarily involve physical raw as well as in Brazil. We are advanc-demand. The company is offering materials being supplied from cap- ing to launch one line in Mexico. Wetechnological expertise to Chinese tive mines, but equity investments have one line existing in the Unitedsteelmakers to get a foothold into in mines. That lowers the effective States. We are advancing in India. Chairman Akio Mimura says soaring prices of raw materials are among thethat market by showing the Chinese price of our sourcing of raw materi- steelmaker’s biggest challenges.that Nippon can be a better partner als because we receive dividends. WSJ: Is one reason why Nippon isthan steelmakers who are unwilling mobilizing its growth out of Japan like to further reduce emissions by Nippon looking to the Japanese gov-to share technological secrets. WSJ: Unlike some other steel mak- and into other countries due to the another 25%. ernment for help? Excerpts: ers, Nippon is allowing China to use strength of the yen? If this was implemented as Mr. Mimura: We believe we are well some of Nippon’s technological ad- Mr. Mimura: The concern that I pledged, it would be almost impossi- positioned to enhance our globalWSJ: What is one of the biggest vances free. Why would Nippon give have most urgently is the sharp ap- ble to maintain steel production or competitiveness, so we are not seek-problems Nippon is facing? these secrets away? preciation of the yen, which has, I develop new capacity within Japan. ing any government subsidies toMr. Mimura: The soaring prices of Mr. Mimura: We understand that believe, accelerated the pace of Of course, we will see how the de- sustain our businesses.raw materials. As you know, iron U.S. steel producers are very hesi- transplanting [production] overseas bate works out internally among the However, there are other externalore, coking coal as well as other tant in disclosing technologies. We because it results in reduced domes- Japanese sectors that are involved conditions: corporate income-taxminerals, are priced by supply and have made an exception for environ- tic demand. and how Japan would like to balance rates, environmental regulations, asdemand. mentally friendly technologies. this with the rest of the world. well as market access to overseas by Our strong concern relates to the WSJ: You are under pressure to be economic-partnership agreements.concentration of ore suppliers. WSJ: is it fair to say that Nippon’s more environmentally friendly WSJ: Many steelmakers around the We have strongly demanded the BHP Billiton tried to acquire Rio growth is going to be outside Japan? within Japan. Can you achieve this? world are trying to get a leg up by government to at least maintain anTinto and they also [attempted] to Mr. Mimura: Having steel mills in Mr. Mimura: The Japanese govern- closing their doors to imports or equal footing with our competitorscombine their production. [Neither Japan is most favorable. We could ment has declared that Japan would seeking government subsidies. Is abroad in these terms.Verigy, Advantest hold buyout talks Rio Tinto takes look at RiversdaleBY KEVIN KINGSBURY test flash memory, computer mem- premium to Friday’s closing price. Continued from page 19 looking to take stakes in mines and ory chips and system-on-a-chip de- Verigy’s stock is down 29% this year supplies are limited, with two-thirds mining companies to ensure sup- Verigy Ltd. has entered into buy- vices. and was above the offer price as of global seaborne trade coming plies.out talks with fellow semiconductor- Verigy has decided the Advantest late as May. from Australia. Mozambique is ex- Canadian iron-ore explorertesting company Advantest Corp. offer it isn’t superior to the LTX Meanwhile, “the Verigy board pected to become the second-largest Baffinland Iron Mines Corp. lastafter the Japanese company made a deal, but it said the board believes continues to believe in the compel- producer of the commodity within month agreed to a 433 million Cana-nearly $735 million offer for Verigy. the bid “might lead to a superior ling strategic and financial merits of the next 15 years. dian dollar (US$432 million) take- The move comes in the wake of transaction, so it has determined to its proposed transaction with LTX- Booming prices for coking coal over offer from ArcelorMittal. Ar-the $400 million deal Verigy re- engage in discussions with Ad- Credence” and is still recommend- have driven competition for assets celor, the world’s biggest steelmakercently reached to buy LTX-Credence vantest.” ing its shareholders back the pur- between miners and steelmakers in by output, also had looked at buyingCorp. Verigy makes products that The offer is $12.25 a share, a 34% chase. recent years. Steel companies are U.S. coal miner Massey Energy Co. INDEX TO BUSINESSES AND PEOPLEBusinesses Apple.............................21 Clearspring Technologies Hyundai Group..............21 Midstream Media Savvis............................34 People Kwon Young-soo...........24This index of businesses ArcelorMittal................20 .......................................18 Hyundai Merchant International..............18 Shandong Gold-Mining.29 This index lists the LeBow, Bennett............21mentioned in today’s Marine........................21 Morgan Stanley............27 Shinhan Financial Group names of business- Levy, Maurice ............... 25 Areva...............................3 Daewoo Engineering & Ma Delun ...................... 33issue of The Wall Street Baffinland Iron Mines..20 Construction..............21 Hyundai Mobis..............29 Myer Holdings..............26 ..................................22,29 people and government Madoff, Bernard...........26Journal is intended to Bank of America...........29 Dai-ichi Life Insurance.27 Hyundai Motor Group .. 21 Newcrest Mining..........29 Siderurgica Nacional .... 19 regulators who receive McCarthy, Brian............23include all significant Dow Corning.................24 Industrial & Commercial News Corp.....................23 Siemens ........................ 22 significant mention in Melnikov, Valery...........33 Barnes & Noble ............ 21reference to companies. Dow Jones & Co...........23 Bank of China............33 Nippon Steel.................20 Singapore Exchange.....26 Today’s Journal. Mimura, Akio................20 Bertelsmann.................21 Nam Ki-yung.................24First reference to the Fairfax Media................23 Interclick.......................18 Nokia.............................22 Sprint Nextel................22 BHP Billiton..................20 Nicola, Mary..................29companies appears in FedEx.............................24 International Business Novartis ........................ 24 Sukhoi Aviation Holding Ackman, Bill.............21,29 Borders Group..........21,29 Palmisano, Samuel.......24bold face type in all Fidelity Investments....10 Machines....................24 Omnicom Group............25 .......................................17 Akino, Mitsushige........27 Picard, Irving.................26articles except those Bristol-Myers Squibb...27 Interpublic Group..........25 Tata Steel ..................... 19 Al-Sayed, Ahmad Fortune Brands.............21 OpenTable ..................... 34 Powell, Andrew ............ 12on page one and the Canon ............................ 29 J.C. Penney ................... 21 Telefon AB L.M. Ericsson Mohamed...................24 Read, Ian..................22,29 Foster’s Group..............19 Otsuka Holdings...........27 Applebaum, Stuart.......21editorial pages. Carlyle Group................19 J.P. Morgan Chase...26,27 .......................................22 Ryoo Shee-yul...............22 Goldman Sachs Group..27 Panasonic......................29 Bernanke, Ben.........28,29 CBS................................25 Time Warner.................25 Shin Sang-hoon............22 Google...........................21 Kellogg .......................... 23 Perpetual.......................19 Chang Won-kie.............24 Stiglitz, Joseph.............12ABB...............................22 Changsha Zoomlion Kohlberg Kravis Roberts UBS ............................... 26 Collett, Ben...................29 Green Dot......................34 Pfizer........................22,29 Svanberg, Carl-Henric .. 22 Heavy Industry Science Unilever N.V..................22 Corbett, Roger..............23Actividades de Healthscope..................19 .......................................19 Procter & Gamble.........34 Taylor, David.................29 & Technology Verigy............................20 Donner, Clive.................19 Treschow, Michael........22 Construcción y Development ............. 27 Hero Group....................34 Korea Exchange Bank...21 Publicis Groupe.............25 Servicios .................... 24 Vornado Realty Trust...21 Dougall, Scott...............21 Trichet, Jean-Claude.......5 Charter Communications Hero Honda...................29 Kumho Asiana Group...21 Qatar Holding...............24 Faucher, John................34 Turvey, Tom..................21Advantest ................ 20,29 White Funds .......................................18 Hochtief ........................ 24 Leighton Holdings........24 Quantcast ..................... 18 Management..............23 Fukunaga, Akito ........... 28 Vestberg, Hans.............22AIA Group.....................27 Honda Motor............29,34 LG Display.....................24 Rackspace Hosting.......34 WPP .............................. 25 Gardner, Andrew .......... 19 Vladeck, David..............18 China InternationalAlcatel-Lucent .............. 22 LinQ Resources Fund ... 19 Rio Tinto.............19,20,29 Hausmann, Ricardo......12 Warshavsky, Oren........26 Capital........................27 HSBC Holdings ............. 26 Wuhan Iron & Steel.....19 Hywood, Greg...............23 Wieser, Brian................25Amazon.com.................21 China Rongsheng Heavy Huawei Technologies ... 22 LTX-Credence................20 Riversdale Mining ... 19,29 Zhaojin Mining Industry Inadome, Katsutoshi....28 Willner, Robin...............24American International Industries Group ....... 27 Hyundai Engineering & Massey Energy.............20 Samsung Electronics .......................................29 Kindler, Jeffrey........22,29 Woodthorp, Katherine..26 Group..........................12 Cisco Systems .............. 29 Construction..............21 Microsoft ...................... 34 ..................................22,24 ZTE................................22 King, Steve ................... 25 Zyblock, Myles..............29
Tuesday, December 7, 2010 THE WALL STREET JOURNAL. 21 BUSINESS FINANCEGoogle opens e-book site Buyout is proposedWeb giant goes toe-to-toe with powerful rivals Apple and AmazonBY JEFFREY A. TRACHTENBERG “Publishers want more competi- be able to start reading e-books on for Barnes & NobleAND AMIR EFRATI tion in the marketplace, and we al- one device or computer and switch A Wall Street Journal Roundup ued at about $1 billion, is expected ready have a big investment,” said midway through the book to other to grow rapidly. Google Inc. on Monday launched Tom Turvey, a director of strategic devices without losing their spot, With the traditional book-retail- Mr. Ackman’s proposed $16-a-Google eBooks, its long-anticipated partnerships at Google. “We’re try- Google engineers said. ing business under seige, activist share offer for Barnes & Noble com-digital bookselling enterprise. ing to extend the value of content Pricing is similar to other major hedge-fund manager Bill Ackman, pares with the book chain’s $13.28 The venture, rolling out across that exists in the world by enabling e-books vendors, with new releases who holds a 37% stake in Borders Friday closing price. In Mondaythe Web, with hundreds of thou- people to find it and buy it.” from publishers operating under the Group Inc., said he would be pre- morning trading, Barnes & Noblesands of popular titles for sale and Users will be able to buy books so-called “agency pricing model,” in pared to finance the bookseller’s stock leaped 17% to $15.54. Bordersmillions more available free of through books.google.com/ebooks which publishers set the consumer purchase of larger rival Barnes & shares, which have been battered incharge, will compete for a slice of and read them on many devices, in- prices, generally less than $20. Noble for about $900 million. the past few years, rose even more--the digital-books business, which is cluding tablets, computers, smart- Google eBooks will set its own Until recently, the thought of gaining 24%. Even so, Borders’valued at close to $1 billion, and is phones and open format e-readers. prices for books sold by publishers combining two bookselling giants shares are trading around $1.37.expected to grow in coming years. Google on Monday released e-book under a traditional wholesale model. would have set off antitrust alarm Borders indicated its support for Google eBooks, formerly called buying and reading apps for Apple’s The new service is an extension bells, but the book industry has such a plan, issuing a statement thatGoogle Editions, represents another iPhone, iTouch and iPad as well as of Google Books, a book-search site been upended by the Internet. In ad- said: “We have previously expressedopportunity for the Web giant to go Android mobile devices. linked to the company’s main Web dition to Amazon.com Inc., Apple to Barnes & Noble our interest intoe-to-toe with two of its powerful Customers will be able to store search engine. Launched in 2004, it Inc. and others, Google Inc. on Mon- such a business combination, andrivals, Apple Inc. and Amazon.com their Google-purchased titles online displays full copies or previews of day rolled out Google Editions, its we look forward to continuing thoseInc., and to open up a new stream of on their own bookshelf accessible millions of books and points con- digital book-selling enterprise. The discussions.” Barnes & Noblerevenue outside of online ads. via their Google account. They will sumers to retailers. digital books category, currently val- spokesman declined to comment.Doubts emergeover financingin Hyundai bidBY SE YOUNG LEE SEOUL—Sellers of a controllingstake in Hyundai Engineering &Construction Co. say documentssubmitted by Hyundai Group on a1.2 trillion won (about $1 billion)loan for financing the conglomer-ate’s bid is inadequate, raising newdoubts on whether the deal will gothrough. Korea Exchange Bank, the leadinstitution among the nine financialcompanies selling their collectiveroughly 35% stake in Hyundai E&C,said in a brief statement Mondaythat if Hyundai Group fails to pro-vide more information about theloan by the current Tuesday dead-line, it will get an additional fivebusiness days. The bank didn’t spec-ify when the five days would begin. The statement marks the latestin a series of challenges—issued byboth the creditors and rival bidderHyundai Motor Group—calling onHyundai Group to prove its ability tofinance the deal without jeopardiz-ing the rest of its affiliates. HyundaiGroup was named the preferred bid-der for Hyundai E&C in mid-Novem-ber; the bid wasn’t disclosed, butpeople familiar with the situationsaid at the time that it was just over$5 billion, topping Hyundai MotorGroup’s offer of just over $4 billion. Hyundai Group on Monday reit-erated in a statement that the docu-mentation, which it submitted Fri-day, proves the crucial 1.2 trillionwon loan is unsecured, without anyshares of its affiliates pledged ascollateral. It also said no HyundaiE&C shares or assets have beenpledged as collateral, and addedthat the document has been en-dorsed by the lender, French bankNatixis. “Creditors’ insistence for theloan contract is unprecedented inthe history of M&As,” HyundaiGroup said, referring to mergers andacquisitions. The statement, though,didn’t definitively say whether itwould provide the contract to credi-tors, and a Hyundai Group officialdeclined to elaborate. Korea Exchange Bank demandedlast week that Hyundai Group sub-mit proper documentation for theloan, saying that if it doesn’t complythe creditors may scrap the memo-randum of understanding.
22 THE WALL STREET JOURNAL. Tuesday, December 7, 2010 BUSINESS FINANCEShinhan president quits Ericsson chairmanFirm withdraws embezzlement complaint against Shin Sang-hoonBY SE YOUNG LEE plans to step down BY GUSTAV SANDSTROM SEOUL—Shinhan FinancialGroup Co. President Shin Sang-hoon STOCKHOLM—Telefon AB L.M.stepped down Monday, as South Ko- Ericsson said Monday that Chair-rea’s third-largest financial holding man Michael Treschow intends tocompany by assets looks to regroup resign within the next two years.after a period of senior-manage- The Swedish telecommunica-ment turmoil that tarnished its rep- tions-equipment vendor also saidutation and sparked worries about Monday that it has been chosen toits governance structure. supply network equipment and ser- Shinhan Bank, Shinhan Finan- vices for Sprint Nextel Corp.cial’s flagship unit, said in a state- Under the five-year contract, Er-ment Monday that Mr. Shin resigned icsson said it will build a networkfrom his post as the holding com- for the telecom operator in centralpany’s president. In response, the and southeastern parts of the U.S.,bank has withdrawn its September including Atlanta, Miami, Houston,complaint to the South Korean pros- Kansas City and Dallas. Samsung Bloomberg Newsecutors that accused Mr. Shin of Electronics Co. of South Korea andbreach of trust and embezzlement. Paris-based Alcatel-Lucent will pro- “These decisions were based on vide gear for other parts of the net-the belief that Shinhan must restore work, Ericsson said. The total proj-market confidence amid a rapid re- ect is valued at as much as $5 Ericsson Chairman Michael Treschow Reutersorganization of the financial mar- billion, Sprint said.ket’s competitive landscape as well Meanwhile, Ericsson said its telecom giant, Mr. Treschow hasas the need for unity to continue Shinhan Financial President Shin Sang-hoon was suspended in September. nomination committee plans to pro- overseen a number of large acquisi-improving Shinhan’s value,” the pose a new board chairman at the tions, including that of U.S.-basedbank said in a statement. be expected to perform his duties nancial employees’ confidence in the company’s annual general meeting router vendor Redback and Norwe- Ryoo Shee-yul, a former presi- normally after Shinhan Bank’s alle- top management. in 2011 or 2012. gian digital-television-gear vendordent of Korea First Bank who was gations. Mr. Shin, who hasn’t re- Shinhan’s shares surged on the Mr. Treschow, 67 years old, said Tandberg Television in 2007, andappointed as Shinhan’s chairman in sponded to interview requests, has news, ending up 5% at 47,000 South his decision to step down had part of Canadian telecom-equipmentOctober, will be in charge of the told the Korean media he intends to Korean won ($41.31) Monday as in- evolved gradually over the past few vendor Nortel in 2009-2010.holding company until new leader- clear his name. vestors hoped that Shinhan Bank’s months. “I have been chairman for He also has appointed two chiefship is in place. Shinhan hasn’t com- Mr. Shin’s exit was expected by resolution with Mr. Shin would bol- nine years and that’s a long time,” executives: Carl-Henric Svanberg inmitted to a specific timeline on market analysts, who said the power ster the company’s efforts to re- he said. “I also feel that Ericsson is 2003 and Hans Vestberg in 2009.when it will select a new executive struggle among the top executives group. a very stable company in a strong Mr. Treschow said Ericsson’sto oversee the holding company. that led to Mr. Shin’s suspension de- “This will lead to unification for position, so this is the right time to new chairman will need to under- Mr. Shin has been suspended pressed Shinhan’s shares in recent an organization that [investors] leave.” stand the telecom-equipment mar-since September after Shinhan Fi- weeks. They said the dispute has feared may splinter,” Kyobo Securi- The Swedish national was ap- ket’s shifting competitive landscape.nancial’s board decided he couldn’t eroded investors’ and Shinhan Fi- ties said in a report. pointed Ericsson’s chairman in After industry consolidation, Erics- March 2002. He is also nonexecutive son’s main vendor rivals are now chairman of consumer-products Huawei Technologies Co. and ZTE company Unilever and a director of Corp. of China, Alcatel and Nokia power and industrial-automation Siemens Networks, a joint venture company ABB Ltd. between Nokia Corp. of Finland and During his time at the Swedish Siemens AG of Germany. Pfizer CEO Kindler leaves, citing fatigue BY JONATHAN D. ROCKOFF val Wyeth. He also divided Pfizer into business units, which he hoped Pfizer Inc. Chairman and Chief would create nimbler operations Executive Jeffrey Kindler retired un- that, by taking responsibility for expectedly after 4½ years of leading their own profits and losses, could the world’s largest drug maker by boost the company’s overall results. sales, saying the demands of the job The moves seemed to pay off in have worn him out. recent months. Pfizer gained ap- Ian Read, a Pfizer veteran who proval to sell the childhood vaccine headed sales and marketing of the Prevnar 13, one of several Wyeth No two days are company’s pharmaceuticals busi- ness, took the CEO post, Pfizer said products that have already begun boosting the combined company’s ever tHe same ® Sunday night. Mr. Read was also named a director. The board plans to appoint a nonexecutive chairman revenue. Pfizer also reported im- pressive clinical trial results for a cancer therapy called crizotinib and STArT yOUrS wiTh bLOOMberG TeLeviSiON ANd STAy bUSiNeSS ShArP from its current membership when the tasocitinib pill for treating rheu- it meets within the next two weeks, matoid arthritis, both of which have F st Up On T Mo As a Pfizer said. the potential to be blockbusters. Ex- 0700 - 0900 HKT 0900 - 1200 HKT “The combination of meeting the ecutives also touted the company’s Susan Li takes an early look at the market Rishaad Salamat brings you comprehensive requirements of our many stake- growth in fast-growing emerging openings in Asia and an analysis of all the coverage of market openings from Asia and breaking news stories. live reporting on the stories most impacting holders around the world and the markets such as China. business around the globe. 24/7 nature of my responsibilities But Pfizer, with more than $60 has made this period extremely de- billion in yearly sales and 100,000 Glo al Conn ct on t L nz Jan s Count o n t Ma am Namaz 1300 - 1400 HKT 1400 - 1600 HKT manding on me personally,” Mr. Kin- employees around the world, wasn’t Business and ﬁnancial news from the US, A fast-paced run-up to the opening of the dler said in a statement. going to be easy to transform. The Europe and Asia, to prepare you for the European markets, with in-depth interviews The 55-year-old Mr. Kindler reorganization into business units impact of the world on your business and analysis of what is happening in the day ahead. markets and why. headed Pfizer during some of the left many inside Pfizer confused company’s most difficult times, as it about the lines of authority. On T Mo t F anc n Lacqua T Puls t An a Cat oo prepared to lose patent protection Investors questioned how the 1600 - 1700 HKT 1700 - 1900 HKT for its top-selling drug, Lipitor, and combined company could grow sig- As Europe opens for business, Bloomberg Award-winning anchor Andrea Catherwood Television is there – business analysis with provides commentary and critical analysis on it struggled to find profitable new nificantly. Rumors began circulating CEOs and market leaders, live from where breaking business stories, along with key therapies, dropping disappoint- around Pfizer late last week that the news happens. interviews of major players impacting the ments like inhalable insulin in 2008 “the board had had it with Jeff,’’ market. after spending $2.8 billion to bring said a person familiar with the situ- it to market. ation. To offset the looming Lipitor Reached at home, Mr. Kindler de- loss, Mr. Kindler slashed costs and clined to comment on his departure. steered the New York company —Joann S. Lublin through a $68 billion takeover of ri- contributed to this article.
Tuesday, December 7, 2010 THE WALL STREET JOURNAL. 23 CORPORATE NEWS Associated PressCEO Brian McCarthy had a 34-year career with Fairfax Media and Rural Press.McCarthy exitsFairfax MediaChange at helm comes ahead of restructuringBY REBECCA THURLOW an executive search is conducted.AND LYNDAL MCFARLAND Mr. Hywood has held several senior management positions at Fairfax MELBOURNE, Australia—Fairfax during his years as a journalist, in-Media Ltd. is looking for a new cluding editor-in-chief of each of thechief executive after the surprise Age, the Australian Financial Reviewdeparture of Brian McCarthy. and the Sydney Morning Herald. Australia’s second-largest news- “Fairfax has been a little bit slowpaper publisher Monday said Mr. in the last couple of years in ad- QMcCarthy wouldn’t commit to Fair- dressing the digital challenge,” said EX ISWSJ AAD uo te 10 US UNdersen refax for the next three to five years Angus Gluskie, a fund manager at D r J C COA rea" wh "M fo S % IV T ! gis White Funds Management. “Some- Lwhile the company implemented its PWrecently announced strategic plan. times it’s better to see how the mar- Less than two weeks ago, Fairfax ket develops before you leap, but Esaid it plans to combine its flagship they are probably now at a pointnewspapers the Sydney Morning where they think they need a newHerald and the Age with its web- head in there to tackle this.”sites in a single business unit. The At the company’s strategy brief- terestructuring is aimed at further ing on Nov. 23, Fairfax said it would rin gmonetizing its online content and take every opportunity to monetizeincreasing efficiency. more of its online content, although One-day conference: 19 January 2011 Venue: The St. Regis Hotel, Beijing Like many of its peers, Sydney- Mr. McCarthy told investors hebased Fairfax, which also publishes wasn’t convinced readers would bethe Australian Financial Review, is willing to pay for general news. The 24 CFO speakers • Only 1 day out of the ofﬁcefacing a decline in circulation as group already has a paywall for itsmore readers go online for news. Australian Financial Review website. OUR DISTINGUISHED CFO SPEAKING FACULTY INCLUDES: “We agreed that now, at the be- Mr. McCarthy said he has had aginning of the implementation of 34-year career with Fairfax and Ru-the plan, it was appropriate time for ral Press, which Fairfax merged withthe leadership change,” said Fairfax a few years ago, and would take aChairman Roger Corbett. break before pursuing new business WARREN WANG MARK CLAYTON, TAN LI XIA, NINA TAN, ALAIN BRIDOUX, BO TAN, The company said Greg Hywood, opportunities. Fairfax competes in FENG, CFO, CFO, CFO, CFO, CFO,currently a nonexecutive director on Australia against News Corp., which CFO, China 2 West Haier Group Jurong Port The Sandvik Group 3SBio Inc.Fairfax’s board, has assumed the owns Dow Jones & Co., publisher of Zhongpin Inc. Servicesrole of acting chief executive while The Wall Street Journal.Kellogg CEO Mackay to retire JACKIE CHANG, VINCENT HU, MICHELLE LIU, TERENCE YAP, FRANK TSENG, JAMES TONG, CFO, CFO, CFO, CFO, CFO, CFO,BY PAUL ZIOBRO with lower revenue in recent quar- Tongxin Yuhe Lanxess Greater China Security Asia Paciﬁc Wire Tianyin ters. Last month, Fitch Ratings low- International Ltd. International China & Surveillance and Cable Pharmaceutical Kellogg Co. President and Chief ered its outlook on the company to Technology, Inc. Co. Inc.Executive David Mackay intends to “negative,” saying that buying back To see the full list of speakers, email firstname.lastname@example.org, call +65 6722 9388 or visit www.cfo-chinasummit.comretire at the end of the month and shares and pension contributionshand the reins to Chief Operating will likely raise its leverage. To ensure maximum interaction Ofﬁcial Newspaper Partner:Officer John Bryant. Mr. Mackay, who has been CEO Why you should and learning among CFO The move ushers in a transition since 2006 and president since NOT MISS CFO participants we have 4 hoursat Kellogg after a year where the 2003, also plans to step down from of scheduled networkingcompany struggled with product re- his role as director. He intends to China Summit 2011: opportunities plus a dedicatedcalls and weak cereal sales. It also stay on through March to help with speed networking session andcomes at a time when food compa- the transition. 100% CFO speakers evening networking cocktail Online Media Partner: reception that will allow you tonies are wrestling with higher costs Since joining the company in 100% Case studies meet fellow CFOs and industryfor grains and other commodities, 1998, Mr. Bryant has led Kellogg’sforcing them to navigate an environ- North America and international op- 100% Panel discussions peers in China.ment where they have to raise erations and also served as chief fi-prices for consumers. nancial officer. He was elected to PHONE: (65) 6722 9388 FAX: (65) 6720 3804 EMAIL: email@example.com Kellogg—whose brands include the board in July.Rice Krispies, Pop-Tarts and Eggo —Matt Jarzemsky www.cfo-chinasummit.comwaffles—also has been struggling contributed to this article.
24 THE WALL STREET JOURNAL. Tuesday, December 7, 2010 CORPORATE NEWSIBM provides free advice LCD makers Reuters Three-month share performance 30% LG DisplayManagers seek emerging-markets growth with consulting services 20BY SPENCER E. ANTE tionships with the right influencers are one way IBM hopes to generate and government leaders, providing goodwill with new contacts in those 10 In an unusual bid to bolster its high-quality references, and expand- areas, says Ms. Willner. No newbusiness in emerging markets—and ing our opportunities in those mar- business has come directly from the 0give its management training a glo- kets,” says Robin Willner, IBM’s vice program so far, however. Samsung Electronicsbal bent—International Business president of corporate citizenship. In a typical assignment, a hand- -10Machines Corp. is sending execu- Analysts say IBM has done well ful of executives work with local Sept. Oct. Nov. Dec. A visitor at an exhibitiontives to provide free consulting ser- at selling computer hardware, soft- businesses and government leaders, Source: Thomson Reuters Datastream in Goyang, north of Seoul.vices in Asia, Latin America, Eastern ware and consulting services in providing advice on economic-devel-Europe, Africa and the Middle East. emerging markets to large compa- opment and technology projects. Samsung cuts rate Since February, IBM has sent 36 nies and governments. But as those Each engagement costs IBM aboutexecutives on three-week consulting markets themselves mature, IBM $250,000, the company says.assignments to four emerging-mar- needs to win more contracts from Other companies are experiment-kets cities, including Rio de Janeiro small and midsize businesses there, ing with similar efforts. A group ofand Chengdu, China. Next year, IBM which won’t be as easy, says IDC an- Dow Corning Corp. employees re-plans to send 100 more executivesto 11 different cities. The idea, in part, is to get toknow more decision-makers in those alyst Frank Gens. “If they want to maximize their opportunity as time goes on they will need to think more about the cently returned from a volunteer as- signment in Bangalore, India, where they worked with a nongovernmen- tal organization to help market less- of LCD productionmarkets, which IBM views as in- small market opportunity,” says Mr. costly, safer cooking stoves. Dow BY IN-SOO NAM year-end maintenance and adjust-creasingly important to its future. Gens. “That has not been IBM’s Corning spokesman Jarrod Erpeld- ment of some output lines to gearThe program also gives executives strong suit.” IBM says it is success- ing says the goal is to help employ- SEOUL—Samsung Electronics up for new products.more familiarity with developing fully targeting small businesses, and ees learn about new markets and Co., the world’s largest producer of Samsung’s LCD division, whicheconomies and experience working that it has seen 22% growth this think more creatively. liquid-crystal-displays by sales, said makes LCD screens for phones,with people from a wider range of year in revenue from small busi- FedEx Corp. is piloting a similar Monday it has lowered its flat-panel computers and television sets, sawbackgrounds. nesses in emerging markets. program for high-potential employ- factory-utilization rate because of a sharp drop in operating-profit IBM needs to dig deeper in the To galvanize its business in ees in emerging markets that was weak demand and to help ease a margin to 6.5% in the third quarterdeveloping world as growth in more emerging markets, IBM two years modeled on IBM’s. And Novartis AG global supply glut. from 11.3% in the second quarter asmature markets slows. In the most ago created a “growth markets” unit this summer launched an “Entrepre- Samsung’s LCD factory-utiliza- weaker sales of TV sets weighed onrecent quarter, revenue from emerg- covering 140 countries and based in neurial Leadership Program” to ex- tion rate currently stands at 90% to demand for LCD screens.ing markets rose 16%, compared Shanghai. The strategy is to open pose its employees to health-care 94%, down from the end of Novem- South Korea’s LG Display Co.,with 3% for the entire company. IBM more offices, build large infrastruc- challenges in emerging markets. ber, when the company produced the world’s No. 2 LCD maker byexpects emerging markets, which ture projects for governments, and IBM Chief Executive Samuel J. LCD panels at full capacity, said sales, also said in October its third-accounted for 21% of IBM’s $24.3 develop technology systems for in- Palmisano says the company’s pro- Chang Won-kie, president of Sam- quarter net profit more than halvedbillion in revenue in the most recent dustries such as telecommunications gram is part of a broader push to in- sung Electronics’ LCD business, at to 224.2 billion won ($197 million)quarter, to reach 25% of its sales by and finance. IBM now has 103 sales ject a more global perspective, and a meeting of LCD industry execu- from the year-earlier period,2015. offices in the growth-markets coun- a bigger emphasis on collaboration tives. largely because of weak panel The program “is intended to ex- tries after opening 40 offices this among people from different back- LCD makers normally adjust prices, and forecast the decline inpand IBM’s presence in growth mar- year. grounds, into its management train- their factory-utilization rates prices would persist at leastkets in terms of establishing rela- The free-consulting assignments ing. around this time of the year, often throughout the fourth quarter. resulting in a drop in output. A spokesman for LG Display said But the Samsung executive’s Monday that the company’s LCD comment comes at a time when panel factory-utilization rate re- many LCD producers have been mains almost the same as that in reeling from falling profitability be- the third quarter. cause of weak demand for such LG Display said in October that screens from television-set makers, its average factory-utilization rate particularly those in Europe and in the third quarter was in the low the U.S. 90s in percentage terms. Analysts said Samsung’s effort to At the meeting of LCD industry reduce output, if joined by its rivals, executives Monday, LG Display could help contain further price falls Chief Executive Kwon Young-soo and advance a much-awaited indus- said the company will be flexible try rebound. about the timetable for its new “Samsung’s move is encourag- China plant, which it soon plans to ing,” said Lee Seung-woo, an ana- build after recently obtaining Chi- lyst at Shinyoung Securities. “Such nese government approval. an effort, if joined by other LCD Early this month, Samsung and makers, will help advance an indus- LG Display, which hold a combined try rebound, which is expected 50% share of the global LCD mar- some time in the first half of next ket, said that they had received ap- year.” proval from China to build LCD Nam Ki-yung, a Samsung Elec- manufacturing plants on the main- tronics spokesman, said the reduc- land, which is expected to become tion of the company’s LCD factory- the world’s largest market for flat- utilization rate is partly because of screen TV sets in a few years. Qatar to buy 9.1% of Hochtief BY NATALI SCHWAB said in September that it wanted to AND ALEX DELMAR-MORGAN take control. ACS is already Hochtief’s biggest FRANKFURT—Construction shareholder with a stake of 30% and group Hochtief AG said Monday has made an offer of €2.8 billion that a capital increase will allow Qa- ($3.75 billion) for the remaining tar Holding LLC to acquire about 70%. The Spanish company is offer- 9.1% of its stock, making the German ing eight of its own shares for every company more expensive as it faces five shares in Hochtief. a hostile takeover bid by Activi- Analysts said Hochtief’s decision dades de Construcción y Servicios to bring Qatar Holdings onto its SA of Spain. books will make it more expensive Qatar Holding, an investment ve- for ACS to acquire a controlling hicle of the Qatar Emirate and a unit stake because it will need to buy of the Qatar Investment Authority, more shares than previously needed. didn’t say whether it backed ACS’s Hochtief said it will increase the takeover attempt. “The aim is to be number of shares on issue by about a mediator to secure a win-win for 10% by issuing nearly seven million all parties,” said a spokesman for new shares at €57.114 each to Qatar Qatar Holding. Holding, meaning its investment is ACS declined to comment. valued at nearly €400 million. Other Hochtief has been trying to fend shareholders aren’t allowed to sub- off ACS since the Spanish company scribe to the issue.
Tuesday, December 7, 2010 THE WALL STREET JOURNAL. 25 CORPORATE NEWS Promoting improvement Madison Avenue is raising its forecasts of global ad spending. $200 billion 2009 2011* 2010* 2012* 150 d c m 13 h - 14 h 2010, ItC M h ,M m i www.chim i m .c m 100 50 0 North Western Asia- Central & Latin Africa, America Europe Paciﬁc Eastern America Middle East, Europe rest of world * Projected Source: Zenith OptimediaAd spendingto tick higher InvestIng beyond your borders Chi -I i - Mi e speCIal Corpor ate paCk ages avaIlable for WsJa readersDeveloping markets contribute to growth p i c :BY SUZANNE VRANICA Encouraged by significant adver-tising growth in developing marketsand a surge in online ads, MadisonAvenue’s prognosticators are onceagain raising their global ad-spend-ing forecasts. f h i m i ,c c : +971 4 367 1383 Zenith Optimedia said global ad q i i @ .c mspending—a barometer of economicconfidence—is expected to rise 4.9% c i i i ifrom last year to $449.6 billion in2010. Owned by ad giant PublicisGroupe SA, Zenith has upgraded its2010 predictions five times over thepast year. “We see a market that is muchstronger than we were anticipatingand much stronger than we had inall our forecasts,” said Maurice ReutersLevy, chief executive of Paris-basedPublicis. On Monday, ad companies in- Publicis CEO Maurice Levy spoke at acluding WPP PLC, Publicis and In- conference in Paris last week.terpublic Group of Cos. were ex-pected to present their forecasts of the acquisition trail, said Publicis’smajor media ad spending during the Mr. Levy. Publicis has “somethingUBS Global Media and Communica- close to $4 billion of liquidity, whichtions Conference in New York. Evi- is in cash or available funds,” hedence of the uptick will likely come said.from a group of media companies, The company, Mr. Levy added, isincluding Time Warner Inc. and focusing on buying small companiesCBS Corp., which are also expected but hasn’t ruled out large acquisi-to be presenters at the conference. tions down the road. He said, how- While many ad and media execu- ever, that he has yet to identifytives have been surprised at the “some big large acquisitions, whichquick pace of the rebound—given would make sense.” When asked ifthe massive decline the market ex- he would consider buying New York-perienced during the recession—the based Interpublic Group, Mr. Levyad business isn’t completely recov- declined to comment. The two com-ered. panies are widely viewed as poten- Ad growth for 2011 isn’t ex- tial partners and have talked in thepected to keep pace with 2010, and past about combining.the industry will likely have to wait Ad executives said there is a lackuntil 2012 for outlays to return to of consistency in the ad rebound.pre-recession levels, according to “It is really a bifurcated ad re-Zenith. (Publicis has been tracking covery, and it is mirroring the eco-ad spending since 1987). nomic recovery around the world,” “The rate of recovery has been said Brian Wieser, global director ofmore subdued than in past reces- forecasting for Mediabrands, an In-sions,” said Steve King, CEO of Ze- terpublic unit, which is also upgrad-nith. He blames the slow pace on ing its ad forecast.the lack of consumer confidence and Mr. Wieser said markets such asthe poor job market. Greece and Portugal are still hurting Forecasters said a lack of big while countries such as China andevents such as a World Cup will Argentina are seeing double-digittame growth next year. Dublin- percentage growth.based WPP’s GroupM is forecasting The surge in spending in marketsglobal ad growth of 5.9% for 2010 such as China has fueled many ofand 5.8% for 2011. Zenith expects the ad holding companies such asglobal ad spending to grow 4.6% in Publicis and New York-based Omni-2011, less than its forecast for this com Group Inc. to step up their ac-year. Still, ad conglomerates are quisition plans in those markets.growing more confident, and are Mr. Levy said he wants to dou-considering increasing dividends ble Publicis’s revenues in China.and spending more on hiring and Publicis, which declined to disclosebuying companies. its revenues in the region, trails ri- “We want to be very active” on val WPP there, analysts say.
26 THE WALL STREET JOURNAL. Tuesday, December 7, 2010 THE MART MARKETS AUCTIONS BUSINESS OPPORTUNITIES Madoff trustee goes after HSBC Lawsuit seeks $9 billion for fraud victims BY CHAD BRAY The trustee seeking money for victims of Bernard Madoff’s fraud sued HSBC Holdings PLC and a group of feeder funds on Sunday for at least $9 billion. The lawsuit, filed in federal bankruptcy court in Manhattan, is the latest move by Irving Picard, who has filed more than 100 law- suits in recent days in an effort to recover money from investors who received false profits from the Ponzi scheme or persons or institutions he Bloomberg News claims enabled the fraud. Under federal bankruptcy law, Mr. Picard must bring such lawsuits by Dec. 11, the two-year anniversary of Mr. Madoff’s arrest and his firm’s Irving Picard faces a Dec. 11 deadline. CAPITAL WANTED demise. In a statement, Mr. Picard said The trustee is seeking to recover HSBC and a network of feeder funds $9 billion, as well additional dam- in Europe, the Caribbean and Central ages. Capital Wanted America directed more than $8.9 bil- HSBC declined comment late Secured loans for purchase of U.S. lion in the fraudulent investment ad- Sunday. based Security Companies. visory business to Mr. Madoff’s firm. A number of HSBC companies 5 year term, 22% interest, He said they ignored indications that have been named as defendants in $25,000 min. Principals Only! Contact Mr. Vassell Mr. Madoff engaged in a fraud. Madoff-related lawsuits in the U.S., “Had HSBC and the defendants Ireland, Luxembourg and other ju- 914-260-2949 reacted appropriately to such warn- risdictions. In August, HSBC said ings and other obvious badges of those cases were at an early stage BUSINESSES FOR SALE fraud outlined in the complaint, the and the bank believes that it has Madoff Ponzi scheme would have good defenses to these claims and collapsed years, billions of dollars would defend them vigorously. and countless victims sooner,” Mr. Mr. Picard has filed suit after Picard said in a statement. “The de- several financial institutions in re- fendants were willfully and deliber- cent weeks, including J.P. Morgan ately blind to the fraud, even after Chase & Co. and UBS AG. Both learning about numerous red flags banks have said the allegations are surrounding Madoff.” without merit. Australian buyout deals surge despite a new tax Continued from page 19 “Australian private-equity funds BUSINESS OPPORTUNITIES Australia’s resource boom pro- are trying to raise money from in- pelled the country out of the tur- vestors and investors are looking moil from the global financial cri- at it and saying ‘You know what? sis much faster than many others. I’ll just wait a while,’” said The Australian Tax Office gave Katherine Woodthorp, chief of the private-equity investors plenty of Australian Private Equity & Ven- warning that in return for tapping ture Capital Association. “They Businesses Australia’s growth, the industry continue to view investment in would have to give up some of its Australia with skepticism.” profits on deals. In November The tax office is likely to re- 2009, authorities launched an ef- ceive a barrage of legal protests if fort to recoup more than US$620 it decides to backdate its ruling to For Sale. million from buyout firm TPG re- lated to its initial public offering target deals such as TPG’s Myer deal. Tax officials argue that TPG of department-store chain Myer set up its ownership structure of Holdings.The next month, Austra- Myer as a way to avoid taxes, us- Advertise in The Mart. lian tax authorities ruled that ing a web of companies in the profits from the sale of assets by Netherlands, Luxembourg and the Call (852) 2831-2553, private-equity firms can be Cayman Islands to funnel its Myer classed as taxable income. profits out of Australia without Des Maloney, deputy chief tax paying taxes there. TPG, which (65) 6415-4279 counsel for the Australian Tax Of- isn’t accused of criminal wrongdo- fice, said in an interview last week ing, has said it has met its Austra- or (813) 6269-2701 that while there is still some “de- lian tax obligations. bate at the margins” about Aus- Given Australia’s growing hos- tralia’s tax policy, most private- tility to foreign investment, seen BOATING TRAVEL equity firms now agree that they recently in the debate surrounding are in the business of buying and the proposed A$8.4 billion take- selling companies and therefore over of the country’s largest are subject to income tax. bourse operator by Singapore Ex- 121’ Moonen M/Y The tax office’s rulings could change Ltd., private-equity inves- Dutch Quality still be stymied by concerns in tors may figure the taxes are sim- Canberra and among industry lob- ply here to stay. 5 Stateroom - Tri Deck byists that the imposition of un- But private-equity firms clearly Must sell !!! competitive taxes could work feel they can handle the extra tax 1 954 646 3090 against the government’s policy burden in Australia. Otherwise, goal of making Australian cities they would have closed their like Sydney into financial hubs. checkbooks long ago.
Tuesday, December 7, 2010 THE WALL STREET JOURNAL. 27 MARKETSChinese machinery maker plans IPOBY NISHA GOPALAN ects—plans to offer 869.58 millionAND PRUDENCE HO shares in a price range of 13.98 to Initial reaction 18.98 Hong Kong dollars (US$1.80 to HONG KONG—Machinery maker The largest new listings on the Hong Kong Stock Exchange this quarter US$2.45) per share, people familiarChangsha Zoomlion Heavy Indus- with the deal said. The price rangetry Science & Technology Develop- Issuer Date Nationality Value, in billions of U.S. dollars translates to a 2011 price/earningsment Co. will test Hong Kong inves- AIA Oct. 2 Hong Kong $20.5 multiple of 11.5 times to 15.6 timestors’ appetite for new listings with without an overallotment optionthe market’s second-biggest initial China Rongsheng Heavy Industries Nov. 11 China 1.8 and 11.8 times to 16 times with thepublic offering of the quarter. Xinjiang Goldwind Science & Technology Oct. 4 China 1.1 option, one of the people said. Changsha Zoomlion, already Sihuan Pharmaceutical Holdings Oct. 21 China The deal has a greenshoe option 0.9listed on the Shenzhen stock ex- equivalent to 15% of the base deal, change, has secured Mongolian Mining Oct. 5 Mongolia 0.7 allowing Zoomlion to increase theIPO four cornerstone in- Source: Dealogic size to US$2.45 billion. If that over-FOCUS vestors ahead of its allotment option is exercised, the Dec. 23 listing in company would have a market capi-Hong Kong, a person familiar with Changsha Zoomlion plans to Rongsheng Heavy Industries Zoomlion’s IPO as cornerstone in- talization of as much as US$13 bil-the situation said Monday. raise as much as US$2.13 billion, Group Ltd., according to Dealogic. vestors, the person said, without lion. Hong Kong has been this year’s which would trail only AIA Group Hillhouse Capital Management giving details of the size of the in- Pricing is scheduled for Dec. 17.hottest market for IPOs, although Ltd.’s US$20.5 billion deal in Octo- Ltd., Keywise Capital Management vestments. J.P. Morgan Chase & Co., Chinarecent global uncertainty has ber. Second place at the moment is (HK) Ltd., SIIC Investment Co. and Changsha Zoomlion—which International Capital Corp., Gold-prompted some investors to pull held by last month’s US$1.8 billion Zhong Ke Bright Trinity Enterprises makes machinery for construction, man Sachs Group Inc. and Morganback. IPO by Chinese shipbuilder China Ltd. agreed to invest in Changsha energy and transportation proj- Stanley are handling the deal.Otsuka setsprice for IPOat low endBY KANA INAGAKI AND JURO OSAWA TOKYO—Japanese food and drugmaker Otsuka Holdings Co. has seta premarket price of 2,100 yen ashare for its initial public offeringworth as much as 198.45 billion yen($2.4 billion), which would be thecountry’s second-largest IPO thisyear. The premarket price is based onthe results of a book-building exer-cise that closed Friday, and is at thelower end of the tentative range be-tween 2,000 yen and 2,400 yen. Theshares will begin trading on theTokyo Stock Exchange’s First Sec-tion on Dec. 15. Despite signs of improving con-ditions in Japan’s equity markets,fund managers said investor appe-tite remains tepid for IPOs in thepharmaceutical industry, whichfaces grim prospects from the com-ing expiry of key drug patents in theU.S. Otsuka Holdings, which has Ot-suka Pharmaceutical under its um-brella, relies on its blockbuster drugAbilify, which treats schizophreniaand depression and is jointly mar-keted with Bristol-Myers SquibbCo. in the U.S. and Europe. Otsuka’spatent on Abilify is expected to ex-pire in April 2015. “We can’t envision a new drugafter the patent expiry since thiscurrent product was so huge,” saidMitsushige Akino, chief fund man-ager at Ichiyoshi Investment Man-agement Co. “It’s still difficult to say2,100 yen is undervalued.” Mr. Akino said Otsuka shareswon’t likely trade much above theIPO price, as investors will have lim-ited interest in the defensive, phar-maceutical sector with its modestgrowth prospects. Otsuka plans to sell a total of94.5 million common shares, makingit the largest public offering sinceDai-ichi Life Insurance Co.’s $11 bil-lion listing in April. Dai-ichi sharesare trading 24% below the IPO price. At Otsuka’s premarket price, thenewly offered shares will carry aprice/earnings ratio of 13.2 timesprojected earnings per share of159.28 yen for the fiscal year endingMarch 2011. It also makes the value of the is-sue’s market capitalization about1.171 trillion yen.
28 THE WALL STREET JOURNAL. Tuesday, December 7, 2010 THE INTERNATIONAL INVESTOR‘Helicopter Ben’ Japan yields decline before Japan Equity Speciality - Sector FUND SCORECARDboosts Treasurys bond auctions Funds investing into specific Japanese economic sectors or industries. At least 75% of stock assets in Japanese companies in specific sectors/industries. Ranked on % total return (dividends reinvested) in Euros for one year ending December 06, 2010 BY KAZUHIRO SHIMAMURA Leading 10 PerformersBY MIN ZENG Sunday evening and it is hard to FUND FUND LEGAL % Return in $US ** fight against the Fed,” said Russ TOKYO—Japanese government RATING * NAME FUND MGMT CO. CURR. BASE YTD 1-YR 2-YR 5-YR NEW YORK—Prices for Treasury Certo, co-head of rate trading at bond yields fell, following a drop in NS NEXT FUNDS Nomura Asset JPYJPN 18.53 28.06 32.48 NSsecurities rose in response to sup- Gleacher & Co., a boutique invest- U.S. Treasury yields on weaker- TOPIX-17 Machinery Management Co., Ltd.portive comments from Federal Re- ment bank and bond dealer. than-expected November jobs data. NS Nomura Sect Nomura Asset JPYJPN 24.51 25.96 23.09 -3.22serve Chairman Ben Bernanke and By late morning, the benchmark A comment by Federal Reserve Index Oil Nonferr Management Co., Ltd.continued worries about sovereign- 10-year note was 16/32 higher to Chairman Ben Bernanke on the flex- NS Daiwa ETF Daiwa Asset JPYJPN 11.67 25.40 17.77 NSdebt problems in the euro zone. yield 2.946%. The 30-year bond was ibility of the central TOPIX-17 Real Estate Management Co.Ltd. The benchmark 10-year note’s 22/32 higher to yield 4.276%. BOND bank’s bond-buying MARKETS NS Nomura TOPIX Nomura Asset JPYJPN 16.20 21.90 32.58 0.12 yield, which moves The five-year and seven-year program also con-U.S. CREDIT inversely to its Electric Appliances ETF Management Co., Ltd. notes, the favored target for the tributed to theMARKETS price, fell below 3% Fed’s bond-buying program, were move. The benchmark 10-year yield NS Daiwa ETF Daiwa Asset JPYJPN 17.70 21.02 16.54 NS again after hitting the best performers. The five-year fell 0.05 percentage point to 1.155%. TOPIX-17Construct Materials Management Co.Ltd.3.062% Friday, the highest level note’s yield fell by 0.08 percentage But trading was slow, with some NS Daiwa ETF Daiwa Asset JPYJPN 15.51 20.38 31.28 -0.19since July. point to 1.535%, as the price extend- long-term issues untraded until TOPIX Electric Appliances Management Co.Ltd. In an interview with CBS televi- ing Friday’s rally on the jobs report. midmorning, as investors refrained NS NEXT FUNDS Nomura Asset JPYJPN 15.94 20.29 16.82 NSsion aired on Sunday, Mr. Bernanke The Fed on Monday bought from increasing their exposure TOPIX-17EnergyResources Management Co., Ltd.said “it’s certainly possible” the Fed $2.044 billion in Treasurys matur- ahead of auctions for 30-year bonds NS Nippon Index Okasan Asset JPYJPN 20.39 19.73 27.24 3.25could expand a program to buy ing between August 2028 and No- Tuesday and five-year notes Thurs- 10 Machinery Auto Management Co., Ltd.$600 billion in Treasury securities vember 2040. By buying Treasurys day. NS NEXT FUNDS Nomura Asset JPYJPN 13.88 19.50 31.47 NSbeyond the initial target it an- regularly until June, the Fed hopes The government will offer 600 TOPIX-17ElecAppl Precision Management Co., Ltd.nounced about a month ago. to push borrowing costs lower. billion yen ($7.25 billion) of 30-year Mr. Bernanke warned that the Despite Monday’s rally, the Trea- bonds with a 2.0% coupon and 2.4 NS Daiwa ETF Daiwa Asset JPYJPN 14.02 18.82 31.70 NSeconomic recovery may not be self- sury market is bracing for the sale trillion yen ($29.02 billion) of five- TOPIX-17ElecAppl Precision Management Co.Ltd.sustaining, highlighting the chance of $66 billion in government debt year bonds. NOTE: Changes in currency rates will affect performance and rankings. Source: Morningstar, Ltd KEY: ** 2YR and 5YR performance is annualized 1 Oliver’s Yard, 55-71 City Roadof unemployment staying high as this week. “When the market’s focus is on NA-not available due to incomplete data; London EC1Y 1HQ United Kingdom NS-fund not in existence for entire period www.morningstar.co.uk; Email: firstname.lastname@example.org“the primary source of risk that we The Treasury will sell $32 billion the supply-demand balance, reac- Phone: +44 (0)203 107 0038; Fax: +44 (0)203 107 0001might have another slowdown in the in three-year notes on Tuesday, $21 tions to such events as the 30-yeareconomy.” billion in 10-year notes Wednesday auction, the five-year auction and The weak labor market has been and $13 billion in 30-year bonds the settlement of the December fu- creasing purchases of long-term point to 0.395%.one of the key reasons behind the Thursday. tures Thursday will be more impor- bonds. But “there is still a possibil- Elsewhere, India’s federal gov-Fed’s efforts to support the econ- Mr. Certo said Treasury trading tant” than exposure to economic in- ity” that the recently volatile mar- ernment said it would nearly halveomy with the bond-buying program, has been volatile and is likely to re- dicators like Wednesday’s ket climate will provide a reason to the size of the week’s bond auctions,known as quantitative easing. In the main so as the end of the year ap- machinery orders, said Akito Fukun- hold back,” said Mitsubishi UFJ cutting them by 50 billion rupeeslatest payrolls report on Friday, the proaches. He noted that many of his aga, chief rates strategist at RBS Se- Morgan Stanley strategist Katsu- ($1.11 billion), to help ease a short-jobless rate unexpectedly rose to big clients are moving to the side- curities. toshi Inadome. age of cash in the nation’s banking9.8% in November from 9.6% a lines. Hedge funds are waiting for The sale of 30-year bonds is The 30-year yield fell 0.015 per- system.month ago. the year end to pass to put money likely to attract solid demand from centage point to 2.13% and the five- —Bijou George in Mumbai “You got a helicopter Ben from to work again. Mr. Certo said. insurers who have recently been in- year yield dropped 0.04 percentage contributed to this article. Advertisement INTERNATIONAL INVESTMENT FUNDS [ Search by company, category or country at asia.WSJ.com/funds ] NAV —%RETURN— NAV —%RETURN— NAV —%RETURN— FUND NAME GF AT LB DATE CR NAV YTD 12-MO 2-YR FUND NAME GF AT LB DATE CR NAV YTD 12-MO 2-YR FUND NAME GF AT LB DATE CR NAV YTD 12-MO 2-YR Eur Income C OT OT LUX 12/03 EUR 6.81 8.2 8.6 20.7 Gl Bond AT OT OT LUX 12/03 USD 9.52 7.0 6.3 11.4 Gl Thematic Res. B GL EQ LUX 12/03 USD 14.90 15.6 15.8 46.5 Eur Income C OT OT LUX 12/03 USD 9.14 8.2 8.6 20.7 Gl Bond B OT OT LUX 12/03 USD 9.54 6.1 5.4 10.3 Gl Thematic Res. I GL EQ LUX 12/03 USD 19.31 17.5 17.9 49.2 Eur Income C2 OT OT LUX 12/03 EUR 13.91 8.4 8.8 20.8 Gl Bond B2 OT OT LUX 12/03 HKD 115.43 6.1 5.2 10.2 Gl Value A GL EQ LUX 12/03 USD 11.31 1.5 1.4 19.9 Eur Income C2 OT OT LUX 12/03 USD 18.68 8.4 8.8 20.8 Gl Bond B2 OT OT LUX 12/03 USD 14.87 6.1 5.2 10.2 Gl Value B GL EQ LUX 12/03 USD 10.29 0.5 0.4 18.6 Eur Income I OT OT LUX 12/03 EUR 6.81 9.2 9.7 21.8 Gl Bond BT OT OT LUX 12/03 HKD 74.21 6.1 5.4 10.2 Gl Value C GL EQ LUX 12/03 USD 10.94 1.0 0.9 19.4Data as shown is for information purposes only. No offer is being made byMorningstar, Ltd. or this publication. Funds shown aren’t registered with the Eur Income I OT OT LUX 12/03 USD 9.14 9.2 9.7 21.8 Gl Bond BT OT OT LUX 12/03 USD 9.56 6.1 5.4 10.2 Gl Value I GL EQ LUX 12/03 USD 12.12 2.3 2.3 20.8U.S. Securities and Exchange Commission and aren’t available for sale to United Eur Strat Value A EU EQ LUX 12/03 EUR 8.88 4.1 7.0 13.2 Gl Bond C OT OT LUX 12/03 USD 9.54 6.6 5.9 10.8 Greater China A AS EQ LUX 12/03 USD 44.51 11.2 10.7 36.5States citizens and/or residents except as noted. Prices are in local currencies. Eur Strat Value A EU EQ LUX 12/03 USD 11.92 4.1 7.0 13.2 Gl Bond C2 OT OT LUX 12/03 USD 14.81 6.6 5.9 10.9 Greater China B AS EQ LUX 12/03 USD 39.02 10.2 9.6 35.1All performance figures are calculated using the most recent prices available. Eur Strat Value I EU EQ LUX 12/03 EUR 9.16 4.8 7.8 14.1 Gl Bond I OT OT LUX 12/03 USD 9.54 7.6 6.9 11.9 Greater China C AS EQ LUX 12/03 USD 43.76 10.7 10.2 35.9 Eur Strat Value I EU EQ LUX 12/03 USD 12.30 4.8 7.8 14.1 Gl Conservative A US BA LUX 12/03 USD 15.30 5.0 4.7 12.3 India Growth A EA EQ LUX 12/03 USD 151.18 19.1 19.8 NS NAV —%RETURN— Eur Value A EU EQ LUX 12/03 EUR 9.62 4.6 7.6 15.4 Gl Conservative A2 US BA LUX 12/03 USD 17.76 4.9 4.7 12.3 India Growth AX EA EQ LUX 12/03 USD 132.51 19.4 20.2 57.1FUND NAME GF AT LB DATE CR NAV YTD 12-MO 2-YR Eur Value A EU EQ LUX 12/03 USD 12.92 4.6 7.6 15.4 Gl Conservative B US BA LUX 12/03 USD 15.30 4.0 3.6 11.2 India Growth B EA EQ LUX 12/03 USD 156.91 18.0 18.6 NS Eur Value B EU EQ LUX 12/03 USD 11.76 3.5 6.4 14.3 Gl Conservative B2 US BA LUX 12/03 USD 16.72 3.9 3.6 11.2 India Growth BX EA EQ LUX 12/03 USD 112.22 18.3 19.0 55.6 Eur Value B EU EQ LUX 12/03 EUR 8.76 3.5 6.4 14.3 Gl Conservative C US BA LUX 12/03 USD 15.32 4.5 4.2 11.8 India Growth I EA EQ LUX 12/03 USD 137.96 20.0 20.8 57.9 Eur Value C EU EQ LUX 12/03 EUR 9.26 4.2 7.1 14.9 Gl Conservative C2 US BA LUX 12/03 USD 17.30 4.5 4.2 11.8 Intl Health Care A OT EQ LUX 12/03 USD 136.18 -0.9 0.5 10.7 Eur Value C EU EQ LUX 12/03 USD 12.43 4.2 7.1 14.9 Gl Conservative I US BA LUX 12/03 USD 15.38 5.6 5.5 13.2 Intl Health Care B OT EQ LUX 12/03 USD 113.80 -1.9 -0.5 9.6 Eur Value I EU EQ LUX 12/03 USD 15.03 5.4 8.4 16.4 Gl Eq Blend A GL EQ LUX 12/03 USD 12.04 3.3 3.4 20.0 Intl Health Care C OT EQ LUX 12/03 USD 129.98 -1.3 0.1 10.2 Eur Value I EU EQ LUX 12/03 EUR 11.19 5.4 8.4 16.4 Gl Eq Blend B GL EQ LUX 12/03 USD 11.19 2.2 2.3 18.8 Intl Health Care I OT EQ LUX 12/03 USD 149.89 -0.2 1.3 11.6 EuroZone Strat Val AX EU EQ LUX 12/03 USD 10.45 10.7 14.6 17.8 Gl Eq Blend C GL EQ LUX 12/03 USD 11.77 2.7 2.9 19.4 Intl Technology A OT EQ LUX 12/03 USD 128.44 16.4 21.8 35.9n AHW CAPITAL MANAGEMENT EuroZone Strat Val AX EU EQ LUX 12/03 EUR 7.78 10.7 14.6 17.8 Gl Eq Blend I GL EQ LUX 12/03 USD 12.79 4.0 4.2 21.0 Intl Technology B OT EQ LUX 12/03 USD 110.27 15.3 20.6 34.6 EuroZone Strat Val BX EU EQ LUX 12/03 EUR 6.93 9.7 13.4 16.6 Gl Growth A GL EQ LUX 12/03 USD 44.17 5.4 5.9 20.5 Intl Technology C OT EQ LUX 12/03 USD 123.61 15.9 21.3 35.3Tel (+49) 1805 - 23 82 82 EuroZone Strat Val BX EU EQ LUX 12/03 USD 9.31 9.7 13.4 16.6 Gl Growth B GL EQ LUX 12/03 USD 36.53 4.4 4.8 19.2 Intl Technology I OT EQ LUX 12/03 USD 145.09 17.3 22.8 37.0www.ahw-capital.com EuroZone Strat Val CX EU EQ LUX 12/03 EUR 5.87 10.1 14.2 17.2 Gl Growth C GL EQ LUX 12/03 USD 42.21 5.0 5.4 19.9 Japan Eq Blend A JP EQ LUX 12/03 JPY 5881.00 -2.4 0.8 9.2AHW Top-Div.Int. GL EQ LUX 12/03 EUR 51.32 -5.9 -4.8 7.8 EuroZone Strat Val IX EU EQ LUX 12/03 USD 11.47 11.3 15.6 18.7 Gl Growth I GL EQ LUX 12/03 USD 49.42 6.2 6.7 21.4 Japan Eq Blend B JP EQ LUX 12/03 JPY 5622.00 -3.3 -0.2 8.1 EuroZone Strat Val IX EU EQ LUX 12/03 EUR 8.54 11.3 15.6 18.7 Gl High Yield A OT OT LUX 12/03 USD 4.62 14.4 17.1 39.1 Japan Eq Blend C JP EQ LUX 12/03 JPY 5762.00 -2.8 0.4 8.7 Gl Balanced (Euro) A EU BA LUX 12/03 USD 16.37 NS NS NS Gl High Yield A2 OT OT LUX 12/03 HKD 82.36 14.6 17.2 39.1 Japan Growth A JP EQ LUX 12/03 JPY 5531.00 -5.8 -3.5 3.1 Gl Balanced (Euro) B EU BA LUX 12/03 USD 15.79 NS NS NS Gl High Yield A2 OT OT LUX 12/03 USD 10.61 14.6 17.2 39.1 Japan Growth B JP EQ LUX 12/03 JPY 5289.00 -6.7 -4.4 2.0 Gl Balanced (Euro) C EU BA LUX 12/03 USD 16.19 NS NS NS Gl High Yield AT OT OT LUX 12/03 USD 4.58 14.8 17.4 39.2 Japan Growth C JP EQ LUX 12/03 JPY 5421.00 -6.2 -3.9 2.6 Gl Balanced (Euro) I EU BA LUX 12/03 USD 16.77 NS NS NS Gl High Yield AT OT OT LUX 12/03 HKD 35.55 14.8 17.4 39.2 Japan Strat Value A JP EQ LUX 12/03 JPY 6234.00 1.9 5.8 15.6 Gl Balanced A US BA LUX 12/03 USD 17.32 5.1 4.9 17.1 Gl High Yield B OT OT LUX 12/03 USD 4.62 13.4 15.9 37.5 Japan Strat Value B JP EQ LUX 12/03 JPY 5969.00 1.0 4.8 14.4 Gl Balanced B US BA LUX 12/03 USD 16.32 4.1 3.9 15.9 Gl High Yield B2 OT OT LUX 12/03 HKD 131.11 13.5 16.1 37.8 Japan Strat Value C JP EQ LUX 12/03 JPY 6103.00 1.4 5.3 15.0n ALLIANCE BERNSTEIN Gl Balanced C US BA LUX 12/03 USD 17.02 4.8 4.6 16.7 Gl High Yield B2 OT OT LUX 12/03 USD 16.89 13.5 16.1 37.8 Real Estate Sec. A OT EQ LUX 12/03 USD 16.37 14.1 15.3 32.7www.alliancebernstein.com/investments Tel. +800 2263 8637 Gl Balanced C US BA LUX 12/03 EUR 12.68 4.8 4.6 16.7 Gl High Yield BT OT OT LUX 12/03 HKD 36.17 13.5 16.3 37.8 Real Estate Sec. B OT EQ LUX 12/03 USD 14.82 13.0 14.1 31.3Am Eq Blend A US EQ LUX 12/03 USD 11.06 6.7 8.5 18.5 Gl Balanced I US BA LUX 12/03 USD 18.08 5.8 5.7 17.9 Gl High Yield BT OT OT LUX 12/03 USD 4.66 13.5 16.3 37.8 Real Estate Sec. I OT EQ LUX 12/03 USD 17.73 15.0 16.3 33.8Am Eq Blend B US EQ LUX 12/03 USD 10.30 5.6 7.5 17.3 Gl Bond A OT OT LUX 12/03 USD 9.54 7.0 6.4 11.3 Gl High Yield C OT OT LUX 12/03 USD 4.62 14.0 16.6 38.4 Short Mat Dollar A US BD LUX 12/03 USD 7.42 4.6 5.9 8.8Am Growth A US EQ LUX 12/03 USD 32.92 5.4 8.9 26.9 Gl Bond A2 OT OT LUX 12/03 HKD 133.05 7.1 6.3 11.4 Gl High Yield C2 OT OT LUX 12/03 USD 15.66 14.1 16.8 38.5 Short Mat Dollar A2 US BD LUX 12/03 USD 10.24 4.6 5.9 8.7Am Growth AX US EQ LUX 12/03 USD 35.73 6.0 9.6 27.7 Gl Bond A2 OT OT LUX 12/03 USD 17.14 7.1 6.3 11.4 Gl High Yield I OT OT LUX 12/03 USD 4.62 15.0 17.8 40.0 Short Mat Dollar AT US BD LUX 12/03 USD 7.41 4.7 5.9 8.8Am Growth B US EQ LUX 12/03 USD 27.42 4.4 7.8 25.6 Gl Bond AT OT OT LUX 12/03 HKD 73.90 7.0 6.3 11.4 Gl Thematic Res. A GL EQ LUX 12/03 USD 17.19 16.7 16.9 48.0 Short Mat Dollar B US BD LUX 12/03 USD 7.42 4.2 5.4 8.3Am Growth C US EQ LUX 12/03 USD 29.66 5.0 8.4 26.3 Short Mat Dollar B2 US BD LUX 12/03 USD 10.15 4.2 5.4 8.3Am Growth I US EQ LUX 12/03 USD 36.76 6.2 9.8 28.0 Short Mat Dollar BT US BD LUX 12/03 USD 7.43 4.3 5.6 8.0 [ALTERNATIVE INVESTMENT FUNDS www.WSJ.com] AdvertisementAm Income A OT OT LUX 12/03 USD 8.89 11.0 11.7 21.8 Short Mat Dollar C US BD LUX 12/03 USD 7.42 4.2 5.4 8.3Am Income A2 OT OT LUX 12/03 HKD 164.18 11.1 11.7 21.8 Advertisement Short Mat Dollar C2 US BD LUX 12/03 USD 14.36 4.3 5.4 8.3Am Income A2 OT OT LUX 12/03 USD 21.15 11.1 11.7 21.8 Short Mat Dollar I US BD LUX 12/03 USD 7.42 5.1 6.5 9.4Am Income AT OT OT LUX 12/03 HKD 68.85 11.0 11.7 21.7 US Thematic Portfolio A EUR H US EQ LUX 12/03 EUR 18.33 NS NS NSAm Income AT OT OT LUX 12/03 USD 8.87 11.0 11.7 21.7 US Thematic Portfolio B EUR H US EQ LUX 12/03 EUR 18.25 NS NS NSAm Income B OT OT LUX 12/03 USD 8.89 10.3 10.9 20.9 NAV —%RETURN— NAV —%RETURN— US Thematic Portfolio C EUR H US EQ LUX 12/03 EUR 18.29 NS NS NSAm Income B2 OT OT LUX 12/03 HKD 140.58 10.4 11.0 20.9 FUND NAME GF AT LB DATE CR NAV YTD 12-MO 2-YR FUND NAME GF AT LB DATE CR NAV YTD 12-MO 2-YR US Thematic Portfolio I EUR H US EQ LUX 12/03 EUR 18.38 NS NS NSAm Income B2 OT OT LUX 12/03 USD 18.11 10.4 11.0 20.9 US Thematic Research A US EQ LUX 12/03 USD 10.21 19.7 21.3 25.0Am Income BT OT OT LUX 12/03 HKD 69.24 10.3 10.9 20.9 n ALEXANDRA INVESTMENT MANAGEMENT Platinm-Gbl Dividend GL EQ CYM 10/29 USD 77.42 23.3 30.7 22.7 US Thematic Research B US EQ LUX 12/03 USD 9.31 18.6 20.0 23.7Am Income BT OT OT LUX 12/03 USD 8.92 10.3 10.9 20.9 Platinm-Nordic OT OT CYM 09/30 SEK 629.75 2.4 4.0 6.8 US Thematic Research I US EQ LUX 12/03 USD 11.07 20.6 22.2 26.0Am Income C OT OT LUX 12/03 USD 8.89 10.6 11.2 21.2 Tel: +1 212 301 1800 Fax: +1 212 301 1810 Platinm-Premier OT OT CYM 08/29 USD 28.37 NS NS NSAm Income C2 OT OT LUX 12/03 USD 27.00 10.7 11.2 21.2 AlexandraConvertibleBondFundI,Ltd.(ClassA) OT OT VGB 08/31 USD 2174.86 28.6 51.1 47.6 Platinm-Turnberry OT OT USA 10/29 USD 60.22 0.2 6.4 NSAm Income I OT OT LUX 12/03 USD 8.89 11.6 12.3 22.5Am Value C US EQ LUX 12/03 USD 10.17 19.2 20.6 24.4Emg Mkts Debt A GL BD LUX 12/03 USD 16.64 13.1 13.7 33.1Emg Mkts Debt A2 GL BD LUX 12/03 USD 22.77 13.2 13.7 33.2Emg Mkts Debt AT GL BD LUX 12/03 USD 16.71 13.3 13.8 33.3Emg Mkts Debt B GL BD LUX 12/03 USD 16.64 12.2 12.6 31.9 n ALLIANZ GLOBAL INVESTORS KAPITALANLAGEGESELLSCHAFTEmg Mkts Debt B2 GL BD LUX 12/03 USD 21.73 12.2 12.6 31.9 Concentra AE EU EQ DEU 12/06 EUR 61.16 18.3 21.0 32.2Emg Mkts Debt BT GL BD LUX 12/03 USD 16.67 12.2 12.6 31.9 n CREDIT PACIFIC ASSET MANAGMENT n SUPERFUND ASSET MANAGEMENT GMBH Industria AE EU EQ DEU 12/06 EUR 74.99 6.4 8.4 21.8Emg Mkts Debt C GL BD LUX 12/03 USD 16.64 12.7 13.2 32.5 www.creditpacific.com For info about open funds, contact email@example.com and www.superfund.com InternRent AE EU BD DEU 12/06 EUR 40.52 16.1 16.8 6.9Emg Mkts Debt C2 GL BD LUX 12/03 USD 22.29 12.8 13.3 32.6 CPS-Master Priv Fund GL OT WSM 12/03 USD 121.73 21.7 23.8 21.5 *Closed for New InvestmentsEmg Mkts Debt I GL BD LUX 12/03 USD 16.64 13.7 14.2 33.8 Superfund Cayman* GL OT CYM 11/30 USD 44.46 9.0 -10.9 -25.1 n CHARTERED ASSET MANAGEMENT PTE LTD - TEL NO: 65-6835-8866Emg Mkts Growth A GL EQ LUX 12/03 USD 39.06 12.7 14.2 46.3 Superfund GCT USD* GL OT LUX 11/30 USD 2230.40 1.6 -12.5 -21.1 Fax No: 65-6835 8865, Website: www.cam.com.sg, Email: firstname.lastname@example.orgEmg Mkts Growth B GL EQ LUX 12/03 USD 32.80 11.7 13.0 44.8 CAM-GTF Limited OT OT MUS 11/26 USD 403362.32 46.9 63.0 88.5 Superfund Green Gold A (SPC) GL OT CYM 11/30 USD 1173.47 21.7 2.6 5.1Emg Mkts Growth C GL EQ LUX 12/03 USD 33.72 12.3 13.7 45.6 Superfund Green Gold B (SPC) GL OT CYM 11/30 USD 1110.78 18.7 -3.8 -4.4Emg Mkts Growth I GL EQ LUX 12/03 USD 43.62 13.6 15.1 47.4 Superfund Q-AG* GL OT AUT 11/30 EUR 6838.00 3.3 -5.3 -10.9Eur Income A OT OT LUX 12/03 EUR 6.81 8.7 9.1 21.2Eur Income A OT OT LUX 12/03 USD 9.14 8.7 9.1 21.2 n WINTON CAPITAL MANAGEMENT LTDEur Income A2 OT OT LUX 12/03 EUR 14.01 8.9 9.2 21.2 n PLATINUM CAPITAL MANAGEMENT Tel: +44 (0)20 7610 5350 Fax: +44 (0)20 7610 5301Eur Income A2 OT OT LUX 12/03 USD 18.81 8.9 9.2 21.2 Tel: +44 207 024 9840, www.platinumfunds.net Winton Evolution EUR Cls H GL OT CYM 09/30 EUR 1049.82 11.2 8.1 NSEur Income AT OT OT LUX 12/03 EUR 6.81 9.0 9.3 21.3 Platinm-All Star OT OT CYM 10/29 USD 100.29 3.2 5.5 5.6 Winton Evolution GBP Cls G GL OT CYM 09/30 GBP 1056.92 11.4 8.3 NSEur Income B OT OT LUX 12/03 EUR 6.81 8.0 8.4 20.4 Winton Evolution USD Cls F GL OT CYM 09/30 USD 1332.74 11.3 8.3 3.5Eur Income B OT OT LUX 12/03 USD 9.14 8.0 8.4 20.4 Platinm-All Weather OT OT USA 10/31 USD 129.92 NS NS NS n GAM FUND MANAGEMENT LIMITED Platinm-Dynasty OT OT USA 10/29 USD 116.28 0.2 7.2 4.8 Winton Futures EUR Cls C GL OT VGB 09/30 EUR 216.04 10.1 7.2 3.5Eur Income B2 OT OT LUX 12/03 EUR 12.95 8.2 8.5 20.4 Winton Futures GBP Cls D GL OT VGB 09/30 GBP 223.85 10.3 7.5 3.9 Georges Court, 54-62 Townsend Street, Dublin 2, IrelandEur Income B2 OT OT LUX 12/03 USD 17.39 8.2 8.5 20.4 Platinm-Emancipation OT OT USA 10/29 USD 106.31 14.2 13.6 11.4 Winton Futures JPY Cls E GL OT VGB 09/30 JPY 15277.71 11.4 8.6 3.4 Tel +353 1 609 3927 Fax +353 1 611 7941, Internet: www.gam.comEur Income BT OT OT LUX 12/03 EUR 6.81 8.2 8.6 20.4 Platinm-Equity Plus OT OT USA 05/29 USD 35.02 -18.2 -63.7 -45.6 GAM Asia Eq Hdg JPY Op GL EQ VGB 11/30 JPY 13590.16 -12.5 -8.4 25.3 Winton Futures USD Cls B GL OT VGB 09/30 USD 768.05 10.3 7.6 3.6 For information about listing your funds, please contact: Carson Wong tel: +852 2831-6481; email: email@example.com
Tuesday, December 7, 2010 THE WALL STREET JOURNAL. 29 THE INTERNATIONAL INVESTORStocks take a breather; European debt Tokyo stocks ease back; concerns pushgold approaches record the euro lower Riversdale shares jumpBY KRISTINA PETERSON seeming to be most at risk. Bank of BY SHRI NAVARATNAM Japanese equities at Louis Capital America fell 1.6%. Citigroup lost BY ANDREW J. JOHNSON AND MATTHEW ALLEN Markets. “If anything, I find what he NEW YORK—U.S. stocks declined 0.4% and Morgan Stanley shed 0.3%. said quite reassuring [that] they’reas investors took a breather after Cisco rose 2.1% after Oppenhei- NEW YORK—The euro fell Asian stocks ended mostly going to use whatever ability theylast week’s climb and mulled over mer raised its stock-investment on against the dollar Monday as trad- higher Monday as investors consid- have to keep interest rates low.”Federal Reserve Chairman Ben Ber- the company to outperform from ers ditched the common currency, ered disappointing U.S. nonfarm In Sydney, Riversdale Miningnanke’s cautious words about the perform. The tech-heavy Nasdaq unnerved by the still-developing payrolls data released Friday and surged 16% after the company con-U.S. economic recovery. Composite eased 0.1% to 2587.99. sovereign debt crisis. Federal Reserve Chairman Ben Ber- firmed it was in talks with mining The Dow Jones Industrial Aver- The Standard & Poor’s 500-share in- Euro-zone finance ministers nanke’s comment that a further ex- giant Rio Tinto about a takeover of-age was down 20.77 points, or 0.2% dex slipped 0.3% to 1221.38. were expected to discuss Ireland’s pansion of the central bank’s asset- fer. Rio Tinto fell 0.5%. to 11361.32 in early Sprint Nextel jumped 5.9% after rescue package at a purchase program was possible. Shares of gold miners outper-ABREAST OF afternoon trading. announcing plans to simplify its net- CURRENCY meeting Monday In Tokyo, the Nikkei Stock Aver- formed the region after the metal’sTHE MARKET Traders said the work equipment, cutting billions of MARKETS and the establish- age slipped 0.1% to 10167.23, snap- price surged Friday. Newcrest Min- sluggish activity re- dollars in cost. ment of a euro-zone ping a three- ing rose 0.9% in Sydney, Zhaojinflected investors taking a step back Pfizer rose 1.2% after Chief Ex- debt agency to issue “e-bonds” in ASIAN-PACIFIC day winning Mining Industry added 1.4% inafter last week’s 2.6% climb. ecutive Jeffrey Kindler unexpectedly lieu of national debt. STOCKS streak, while Hong Kong, and Shandong Gold- Mr. Bernanke warned in a Sun- announced his retirement, citing the In late-morning trade, the euro the broader Mining rose 3.1% in Shanghai.day interview on CBS News’ “60 heavy demands of the job. Analysts was at $1.3286 from $1.3411 late Fri- Topix gained 0.3% to 881.41. China’s In Tokyo, some exporters wereMinutes” that the economic recov- said the management change-up day. The dollar was at 82.78 yen Shanghai Composite gained 0.5% to weak after the yen gained againstery may not be self-sustaining. Still, could reinvigorate the company’s from 82.71 yen, while the euro was 2857.18, Hong Kong’s Hang Seng In- the U.S. dollar on Friday. Canon fellhe said he doesn’t think a double- cost savings and other initiatives. at 109.97 yen from 110.86 yen. The dex declined 0.4% to 23237.69 and 1%, while Panasonic dropped 1.2%.dip recession in the U.S. is likely. Barnes & Noble surged 17% after U.K. pound fetched $1.5677 from Taiwan’s Taiex rose 0.9% to 8702.23. Honda Motor lost 0.6% after lo-The central banker also said the Fed activist hedge-fund manager Bill $1.5771. The dollar traded at 0.9871 “Traders essentially viewed the cal media reported that the com-could commit more money to boost Ackman said he would be prepared Swiss franc from 0.9755 franc. disappointing jobs number on Fri- pany plans to exit from its Indianthe economy after last month an- to finance Borders Group’s pur- The ICE Dollar Index was at day in the U.S. as building another motorcycle joint venture, Heronouncing plans for $600 billion of chase of its larger rival. Mr. Ackman 79.781 from 79.181. case for more stimulus measures. Honda Motors. Hero Hondaasset purchases. reported a 37% stake in Borders, up German Chancellor Angela The Federal Reserve has indicated dropped 2.5% in Mumbai trade. But Mr. Bernanke’s comments from 31% as of May, sending shares Merkel said Monday she sees no they may go into bat again, and the In Seoul, some auto-parts makersgave another push to gold, which of Borders up 39%. need to increase the European Fi- market looks like it wants more,” rose after the U.S.-South Korea freeappeared poised to settle at a fresh nancial Stabilization Facility after said David Taylor, markets analyst trade agreement was finalized overrecord. About an hour before the European stocks reports suggesting ministers could at CMC Markets in Sydney. the weekend. Under the pact, theclose, the front-month December fu- Commodity stocks rose on Mr. discuss whether the €440 billion Mr. Bernanke said on CBS’s “60 U.S. will be allowed to keep its 2.5%tures contract was up $9.60, or Bernanke’s comments. The Stoxx Eu- ($590.08 billion) bailout fund for Minutes” news program, which tariff on cars for five years, while0.7%, at $1415. The settlement re- rope 600 index added 0.2% at 271.38 euro-zone nations could be enlarged aired Sunday, that “it’s certainly South Korea would immediately cutcord, set Nov. 9, is $1409.80. as BP and Xstrata each gained 3.4%. to boost confidence in the euro. possible” the central bank could ex- its present 8% tariff in half, encour- Major banks weakened after No- Among major national bench- The dollar rose versus the yen pand a program to buy $600 billion aging more imports of U.S. cars intomura said that one or more U.S. marks, the U.K.’s FTSE 100 index after Federal Reserve Chairman Ben in Treasury securities beyond the Korea. Hyundai Mobis rose 1.5%.credit-rating firms could downgrade gained 0.4% to 5770.28. Germany’s Bernanke said in televised remarks initial target it announced about a Shinhan Financial Groupsome large U.S. banks and brokers DAX index rose 0.1% to 6954.38, and Sunday night “it doesn’t seem month ago. jumped 5% after the company con-in early 2011, with Bank of Amer- France’s CAC-40 index closed flat at likely” that the U.S. economy would “The language he used is very firmed a local media report that itsica, Citigroup and Morgan Stanley 3749.23. fall into recession again. measured,” said Ben Collett, head of president will resign. [ Search by company, category or country at asia.WSJ.com/funds ] INTERNATIONAL INVESTMENT FUNDS Advertisement NAV —%RETURN— NAV —%RETURN— NAV —%RETURN— NAV —%RETURN—FUND NAME GF AT LB DATE CR NAV YTD 12-MO 2-YR FUND NAME GF AT LB DATE CR NAV YTD 12-MO 2-YR FUND NAME GF AT LB DATE CR NAV YTD 12-MO 2-YR FUND NAME GF AT LB DATE CR NAV YTD 12-MO 2-YRGAM Asia Equity Hedge US GL EQ VGB 11/30 USD 256.82 -11.5 -8.2 26.5 GAMStar-AsPacEqEUR Acc AS EQ IRL 12/02 EUR 113.29 12.0 19.0 18.6 Money Market EURO A EU MM LUX 12/02 EUR 27.50 0.4 0.4 0.8GAM Asia Equity USD OT OT VGB 12/03 USD 714.07 9.2 9.7 42.5 GAMStar-AsPacEqEUR Inc AS EQ IRL 12/02 EUR 108.84 12.0 19.0 18.6GAM Asia-Pacific Eq USD AS EQ VGB 11/30 USD 1318.04 2.7 8.1 17.4 GAMStar-ContEurEqEUR Ac EU EQ IRL 12/02 EUR 12.31 12.0 16.3 19.5GAM Com Glb Bal EUR Op US BA VGB 11/29 EUR 103.96 5.7 5.7 11.7 GAMStar-EurpEqEUR Acc EU EQ IRL 12/02 EUR 194.97 6.5 10.0 15.6GAM Com Glb Bal USD Op US BA VGB 11/29 USD 135.04 5.7 5.7 11.7 GAMStar-EurpEqEUR Inc EU EQ IRL 12/02 EUR 176.97 6.5 10.1 15.6GAM Comp Glb Eq EUR Op GL EQ VGB 11/29 EUR 109.55 7.1 7.9 16.4 GAMStar-EurpEqUSD Acc EU EQ IRL 12/02 USD 15.73 -1.7 -3.3 17.9GAM Comp Glb Eq USD Op GL EQ VGB 11/29 USD 136.63 7.1 7.9 16.4 GAMStar-EurpEqUSD Inc EU EQ IRL 12/02 USD 14.20 -1.7 -3.3 17.9GAM Comp Glb Gr EUR Op US BA VGB 11/29 EUR 96.00 5.3 5.7 12.0 GAMStar-FrontierOppUSD Acc OT OT IRL 12/02 USD 6.08 10.9 11.6 12.4 n MANULIFE ASSET MANAGEMENT TEL:(852)2108 1110GAM Comp Glb Gr USD Op US BA VGB 11/29 USD 133.79 5.3 5.7 12.0 GAMStar-JpnEq EUR Acc JP EQ IRL 12/02 EUR 94.11 7.0 14.6 10.9 Internet:http://www.manulife.com.hk 47/F Manulife Plaza, Causeway Bay, Hong KongGAM CompAbsRT EUR Op OT OT VGB 09/30 EUR 141.71 9.1 0.1 -6.9 GAMStar-JpnEq EUR Inc JP EQ IRL 12/02 EUR 93.91 7.0 14.6 10.9 American Growth US EQ LUX 12/03 USD 16.63 8.9 12.0 20.9GAM CompAbsRT SGD Op OT OT VGB 09/30 SGD 102.21 9.2 -0.1 -8.3 GAMStar-JpnEq JPY Acc JP EQ IRL 12/02 JPY 910.27 -1.2 6.4 10.8 American Growth AA US EQ LUX 12/03 USD 0.96 8.6 11.7 20.6 n THE NATIONAL INVESTORGAM CompAbsRT USD Op OT OT VGB 09/30 USD 845.66 9.5 0.7 -7.0 GAMStar-JpnEq USD Acc JP EQ IRL 12/02 USD 11.34 2.0 6.7 11.7 Asian Equity OT OT LUX 12/03 USD 2.82 15.2 15.4 46.1 Asian Equity AA OT OT LUX 12/03 USD 0.91 14.9 15.1 45.6 TNI Tower | Zayed 1st Street Khalidia| Web:www.tni.aeGAM Cptal Apprec Eq Inc US EQ VGB 11/30 USD 272.30 9.5 14.0 25.1 GAMStar-World EqUSD Acc GL EQ IRL 12/02 USD 2267.13 2.2 1.5 18.8 TNI Mena Real Estate Fund OT EQ BMU 11/25 USD 806.10 -16.1 -21.9 -9.7GAM Cross Trading Inc OT OT VGB 11/22 USD 483.02 3.7 3.4 NS Asian Sm Cap Equity AA OT OT LUX 12/03 USD 1.56 35.3 35.6 71.2 TNI MENA Special Sits Fund OT OT BMU 10/31 USD 1120.56 3.8 -1.7 8.1GAM Diversity CHF Op OT OT VGB 11/22 CHF 90.67 -3.9 -4.0 -0.8 n HSBC Trinkaus Investment Managers SA China Value A AS EQ LUX 12/03 USD 8.50 19.6 18.3 46.5 TNI MENA UCITS Fund OT OT IRL 11/25 USD 1060.18 NS NS NSGAM Diversity EUR Op OT OT VGB 11/22 EUR 623.88 -3.8 -4.0 -0.2 E-Mail: firstname.lastname@example.org China Value AA AS EQ LUX 12/03 USD 2.67 19.3 18.0 46.1 TNI UAE Blue Chip Fund OT OT ARE 11/25 AED 5.13 -3.8 -17.7 -3.1GAM Diversity USD 2.5XL OT OT VGB 11/22 USD 69.87 -10.8 -11.2 -3.5 Telephone: 352 - 47 18471 Dragon Growth AS EQ LUX 12/03 USD 1.81 10.5 8.0 41.0GAM Diversity USD Op OT OT VGB 11/22 USD 659.10 -3.2 -3.4 NS Prosperity Return Fund A JP BD LUX 11/29 JPY 9981.95 1.0 NS NS Dragon Growth AA AS EQ LUX 12/03 HKD 8.81 10.4 8.0 40.8GAM Dvrsty II CHF Op OT OT VGB 11/22 CHF 95.11 -4.4 -4.7 NS Prosperity Return Fund B OT OT LUX 11/29 JPY 8868.08 -10.0 NS NS Emg Eastrn Europe A EU EQ LUX 12/03 USD 5.26 14.2 15.1 51.4GAM Dvrsty II EUR Op OT OT VGB 11/22 EUR 132.61 -4.4 -4.7 -0.9 Prosperity Return Fund C OT OT LUX 11/29 USD 94.87 -1.3 NS NS Emg Eastrn Europe AA EU EQ LUX 12/03 USD 2.26 14.1 15.0 51.2GAM Dvrsty II USD Op OT OT VGB 11/22 USD 201.87 -3.9 -4.2 NS Prosperity Return Fund D OT OT LUX 11/29 EUR 111.84 15.0 NS NS European Growth EU EQ LUX 12/03 USD 9.34 2.6 -0.2 28.8GAM DvrstyIII EUR Op OT OT VGB 11/22 EUR 110.36 -4.5 -4.7 -1.7 Renaissance Hgh Grade Bd A JP BD LUX 11/29 JPY 10206.87 3.4 NS NS European Growth AA EU EQ LUX 12/03 USD 0.67 2.3 -0.4 28.4GAM DvrstyIII USD Op OT OT VGB 11/22 USD 117.12 -4.0 -4.2 -1.4 Renaissance Hgh Grade Bd B OT OT LUX 11/29 JPY 9005.75 -8.4 NS NS Global Contrarain AA GL EQ LUX 12/03 USD 1.15 29.9 30.4 64.7GAM Euro Eq Hdg EUR Op EU EQ VGB 12/02 EUR 237.18 8.4 11.8 10.0 Renaissance Hgh Grade Bd C OT OT LUX 11/29 USD 95.73 0.5 NS NS Global Property AA OT EQ LUX 12/03 USD 0.77 14.9 16.0 38.6GAM Euro Eq Hdg USD Op EU EQ VGB 12/02 USD 219.50 7.9 11.2 11.6 Renaissance Hgh Grade Bd D OT OT LUX 11/29 EUR 105.83 9.0 NS NS Global Resources AA GL EQ LUX 12/03 USD 1.26 15.9 9.6 45.2GAM GAMCO US EQ VGB 11/30 USD 968.93 19.5 21.0 37.0 Healthcare AA OT EQ LUX 12/03 USD 0.98 3.7 5.9 14.2 India Equity AA EA EQ LUX 12/03 USD 1.28 16.3 17.0 53.2 n WEBSITE: WWW.VALUEPARTNERS.COM.HK, TEL: (852) 2880 9263, FAX: (852) 2564 8487GAM Gb EmMkts Hdg EUROp OT OT VGB 12/02 EUR 101.27 3.5 3.5 8.5GAM Gb EmMkts Hdg USDOp OT OT VGB 12/02 USD 108.15 4.8 4.7 9.4 International Growth GL EQ LUX 12/03 USD 3.13 2.6 2.2 16.5 *formerly known as China ABH Shares Fund International Growth AA GL EQ LUX 12/03 USD 0.73 2.4 2.0 16.2 Intel-Chin Mainlnd Foc AS EQ CYM 11/30 USD 37.73 26.4 28.7 60.8GAM Gbl Divers USD Inc. GL EQ VGB 11/30 USD 259.14 3.7 5.6 17.5 Japanese Growth JP EQ LUX 12/03 USD 2.90 5.2 2.8 12.6 Intel-China Converg* AS EQ CYM 11/30 USD 142.13 24.6 26.5 60.3GAM Grtr China Eq Hdg Op GL EQ VGB 11/30 USD 238.21 -16.9 -14.2 36.4 VP Classic - A AS EQ CYM 12/03 USD 229.67 23.2 22.3 57.8GAM Intrst Trend IIGAM Intrst Trend IncGAM Japan Eq Hdg EUR OpGAM Japan Eq Hdg USD OpGAM Japan Eq Hdg YEN Open US OT AS AS AS BD OT EQ EQ EQ VGB VGB VGB VGB VGB 07/02 11/30 11/30 11/30 11/30 USD USD EUR USD JPY 107.02 309.92 121.81 123.14 8503.03 13.7 23.2 4.4 0.9 1.2 40.0 23.8 12.0 9.0 9.3 1.8 37.3 8.0 7.7 7.7 LIST YOUR Japanese Growth AA Latin America Equity AA Manulife GF Strategic Income Fund AA MGF Asia Value Dividend Equity Fund Russia Equity AA JP GL OT OT EE EQ EQ OT OT EQ LUX LUX LUX LUX LUX 12/03 USD 12/03 USD 12/03 USD 12/03 USD 12/03 USD 0.75 1.43 1.09 1.35 0.79 3.7 11.9 10.3 18.7 22.8 1.3 10.3 NS 21.1 22.1 11.6 58.7 NS NS 72.2 VP CLassic - B VP High Dividend Stk AS OT EQ CYM OT CYM 12/03 11/29 USD USD 106.55 57.85 22.6 27.3 21.7 29.8 57.0 61.0GAM Japan USD JP EQ VGB 12/03 USD 1144.64 3.8 5.4 12.5 n J.P. MORGAN ASSET MANAGEMENT Taiwan Equity AA AS EQ LUX 12/03 USD 1.23 13.4 20.2 53.2GAM Japan YENGAM Money Mkt EuroOpGAM Money Mkt USDGAM Multi-Arb EUR Op JP EU US OT EQ MM MM OT VGB VGB VGB VGB 12/03 12/02 12/02 11/22 JPY EUR USD EUR 8793.30 51.20 100.18 98.27 -0.4 0.8 0.3 -11.6 3.5 0.8 0.2 -13.3 10.7 0.5 0.1 -7.9 FUNDS For additional fund prices, please visit www.jpmorganam.com.sg Tel: +65 6882 1328 JF ASEAN Eq (USD)A(acc) JF Asia Pac ex-Jap Eq(SGD)A(acc) AS AS EQ EQ LUX LUX 12/03 12/03 USD SGD 15.71 14.96 38.0 NS 40.4 NS NS NS Turkey Equity AA U.S. Bond AA U.S. Sm Cap Equity AA U.S. Special Opportunities OT US US US OT BD EQ BD LUX LUX LUX LUX 12/03 USD 12/03 USD 12/03 USD 12/03 USD 1.06 1.17 1.01 1.00 38.4 9.0 23.1 27.6 51.2 8.8 28.9 35.6 80.5 14.9 48.3 55.7GAM Multi-China EUR Op OT OT VGB 11/22 EUR 166.81 -0.7 1.7 6.1 JF Asia Pac ex-Jp (USD)A(acc) AS EQ LUX 12/03 USD 20.36 12.2 12.7 51.2 U.S. Tsy Inf-ProtSec AA OT OT LUX 12/03 USD n YUKI INTERNATIONAL LIMITED 1.20 6.2 4.3 9.2GAM Multi-China USD Op OT OT VGB 11/22 USD 177.31 0.4 2.8 7.0 JF China (SGD)A(acc) AS EQ LUX 12/03 SGD 13.73 -0.7 NS NS Tel +44-207-269 0203 www.yukifunds.comGAM Multi-Emer Mkts GBP OT OT VGB 11/22 GBP 135.07 2.7 3.8 12.9 JF China (USD)A(dist) AS EQ LUX 12/03 USD 51.09 7.0 4.4 38.0 n PT CIPTADANA ASSET MANAGEMENTGAM Multi-Emer Mkts USD OT OT VGB 11/22 USD 670.45 3.0 3.9 13.1 JF Greater China (SGD)A(acc) AS EQ LUX 12/03 SGD 14.92 5.4 NS NS Tel: +62 21 25574 883 Fax: +62 21 25574 893 Website: www.ciptadana.comGAM Multi-Eur EUR Op OT OT VGB 11/22 EUR 267.52 -0.5 -0.1 2.6 JF Greater China (USD)A(dist) AS EQ LUX 12/03 USD 28.68 13.4 13.7 43.9 Indonesian Grth Fund GL EQ BMU 12/01 USD 176.94 38.9 43.6 95.6 n YMR-N SeriesGAM Multi-Eur II EUR Op OT OT VGB 11/22 EUR 137.67 -0.5 -0.5 2.9 JF India (SGD)A(acc) EA EQ LUX 12/03 SGD 16.36 13.7 NS NS YMR-N Growth Fund JP EQ IRL 12/06 JPY 9251.00 -2.6 1.5 6.4GAM Multi-Eur II USD Op OT OT VGB 11/22 USD 112.78 -0.3 -0.4 2.8 JF India (USD)A(acc) EA EQ LUX 12/03 USD 28.40 22.4 24.0 55.3 YMR-N Small Cap Fund JP EQ IRL 12/06 JPY 6627.00 -7.3 -6.0 4.4GAM Multi-Eur USD Op OT OT VGB 11/22 USD 467.26 -0.1 0.2 2.5 JF Korea Equity (USD) A (acc) AS EQ LUX 12/03 USD 10.51 25.3 29.0 61.5GAM Multi-Nth Am EUR Special OT OT VGB 11/22 EUR 133.99 0.0 0.8 NS JF Pacific Tech (USD) A (acc) OT EQ LUX 12/03 USD 16.34 8.9 12.9 35.2 n Yuki 77 SeriesGAM Multi-Nth Am USD Special OT OT VGB 11/22 USD 218.52 0.2 0.9 7.5 JF Singapore (SGD)A(acc) AS EQ LUX 12/03 SGD 16.06 11.6 NS NS Yuki 77 General JP EQ IRL 12/06 JPY 5691.00 -7.7 -5.2 1.7GAM Multi-Pac EUR Op OT OT VGB 09/30 EUR 138.69 -3.3 -1.4 0.5 JF Singapore (USD)A(dist) AS EQ LUX 12/03 USD 32.95 20.3 22.1 59.8 Yuki 77 Growth JP EQ IRL 04/27 JPY 5230.34 -7.3 -5.4 -27.3GAM Multi-Pac USD OpGAM Portable Dvr/S&P500 OT OT OT OT VGB VGB 09/30 08/24 USD USD 161.14 70.11 -2.6 17.7 -0.8 -27.7 1.1 -22.9 In print & online. Contact: JPM Africa (USD) A (acc) JPM Asia Pac Bond (USD)A(acc) OT AS OT BD LUX LUX 12/03 12/03 USD USD 11.31 10.72 31.4 NS 29.0 NS 57.7 NS n Yuki Chugoku SeriesGAM Selection Hdg US EQ VGB 11/30 USD 3096.13 17.4 22.3 41.4 JPM Brazil Alpha+ (USD)A(acc) OT OT LUX 12/03 USD 11.97 12.1 9.6 64.8 Yuki Chugoku Jpn Gen JP EQ IRL 12/06 JPY 6619.00 -3.1 0.5 5.9GAM Sing/Malaysia EA EQ VGB 12/03 USD 2887.15 14.3 15.1 36.2 Yuki Chugoku JpnLowP JP EQ IRL 12/06 JPY 7672.00 1.1 2.5 0.1GAM Sterling Spe Bd IncGAM Trading EUR Inc OT OT OT OT VGB VGB 11/30 10/29 GBP EUR 260.10 340.86 13.1 4.8 14.1 4.6 26.2 6.2 email@example.com JPM Brazil Alpha+(SGD)A(acc) JPM East Eur (EUR)A(dist)(JF) OT EU OT EQ LUX LUX 12/03 12/03 SGD EUR 14.92 34.76 NS 33.3 NS 40.6 NS 64.4 n SENSIBLE ASSET MANAGEMENT LIMITED n Yuki Hokuyo Japan Series JPM Emerg EMEA (USD) A (dist) GL EQ LUX 12/03 USD 63.32 23.7 25.7 60.7 www.samfund.com.hk Tel: (852) 2868 6848 Fax: (852) 2810 9948GAM Trading USD Inc OT OT VGB 11/22 USD 1010.35 3.8 3.5 5.1 JPM Emerg Mid East Eq(SGD)A(acc) OT OT LUX 12/02 SGD 14.85 NS NS NS Asia Value Formula Fd-B OT OT CYM 12/03 USD 10.19 27.1 27.7 64.2 Yuki Hokuyo Jpn Gen JP EQ IRL 12/06 JPY 4279.00 -8.4 -4.7 -0.2GAM Trdg II IncEUR Op OT OT VGB 11/22 EUR 143.99 3.5 3.2 4.8 JPM Emerg Mid East(USD)A(dist) OT OT LUX 12/02 USD 25.12 24.7 32.2 36.2 Yuki Hokuyo Jpn Inc JP EQ IRL 12/06 JPY 4899.00 -6.9 -4.7 -2.2GAM Trdg II IncUSD Op OT OT VGB 11/22 USD 328.17 3.9 3.6 5.1 JPM Emerg Mkt Eq (SGD)A(acc) GL EQ LUX 12/03 SGD 15.27 7.3 NS NS n SGAM FUND Yuki Hokuyo Jpn Sm Cap JP EQ IRL 12/06 JPY 4804.00 -7.7 -6.5 3.7GAM Trdg IV IncEUR Op OT OT VGB 11/22 EUR 151.59 3.3 3.0 4.5 JPM Emerg Mkt Eq (USD)A(dist) GL EQ LUX 12/03 USD 32.86 15.5 16.0 50.8 AMUNDI HONG KONG LIMITEDGAM Trdg IV IncUSD Op OT OT VGB 11/22 USD 160.35 3.8 3.5 4.9 JPM Emerg Mkt Infra(USD)A(acc) OT OT LUX 12/03 USD 8.83 18.8 21.0 54.9 Hotline in Hong Kong (852) 2521 4231 n Yuki Mizuho SeriesGAM Trdg V IncEUR Op OT OT VGB 11/22 EUR 128.21 3.0 2.6 4.3 Yuki Mizuho Gen Jpn III JP EQ IRL 12/06 JPY 4029.00 -8.8 -4.9 -0.2 JPM Emerg Mkt LC Debt(USD)A(mth) OT OT LUX 12/03 USD 16.03 13.8 11.3 NS www.amundi.comGAM Trdg V IncUSD Op OT OT VGB 11/22 USD 134.21 3.6 3.2 4.8 Yuki Mizuho Jpn Dyn Gro JP EQ IRL 12/06 JPY 4285.00 -8.3 -4.7 -0.5 JPM Glb Dyn (SGD)A(acc) GL EQ LUX 12/03 SGD 14.51 2.0 NS NS Bonds US OppsCoreplus A US BD LUX 12/02 USD 40.13 8.8 7.9 14.2GAM TrdgIII IncEUR Op OT OT VGB 11/22 EUR 161.90 3.1 2.9 4.4 Yuki Mizuho Jpn Exc 100 JP EQ IRL 12/06 JPY 6320.00 -9.3 -5.3 4.9 JPM Glb Dyn (USD)A(dist) GL EQ LUX 12/03 USD 13.13 9.9 9.9 25.1 Bonds World A OT OT LUX 12/02 USD 43.27 3.0 -2.8 6.9GAM TrdgIII IncUSD Op OT OT VGB 11/22 USD 168.66 3.8 3.5 4.9 Yuki Mizuho Jpn Gen JP EQ IRL 12/06 JPY 8401.00 -2.7 1.0 5.5 JPM Glb Nat Res (EUR)A(dist) GL EQ LUX 12/03 EUR 21.73 43.2 43.0 79.8 Eq. AsiaPac Dual Strategies A AS EQ LUX 12/03 USD 11.57 11.0 11.2 41.3GAM USDSpecBondInc OT OT VGB 11/30 USD 623.76 17.7 20.8 43.5 Yuki Mizuho Jpn Gro JP EQ IRL 12/06 JPY 6158.00 -3.5 -1.4 2.2 JPM Glb Nat Res (SGD)A(acc) GL EQ LUX 12/03 SGD 26.05 23.6 NS NS Eq. China A AS EQ LUX 12/03 USD 24.97 3.5 0.9 35.1GAM Worldwide GL EQ VGB 12/02 USD 2265.80 1.8 1.1 18.0 Yuki Mizuho Jpn Inc JP EQ IRL 12/06 JPY 7295.00 -4.7 -1.7 -1.7 JPM Glb Nat Res (USD)A(acc) GL EQ LUX 12/03 USD 20.64 33.2 26.8 85.0 Eq. Global Energy A OT EQ LUX 12/02 USD 18.26 0.7 0.7 15.7GAMut Investments OT OT VGB 11/30 USD 8056.03 6.3 5.6 6.1 Yuki Mizuho Jpn Lg Cap JP EQ IRL 12/06 JPY 4892.00 -5.8 -1.9 1.8 JPM Latin Amer (USD)A(dist)JF GL EQ LUX 12/03 USD 46.58 16.6 13.8 66.1 Eq. Global Resources A GL EQ LUX 12/02 USD 127.80 17.0 10.0 46.7 Yuki Mizuho Jpn LowP JP EQ IRL 12/06 JPY 11109.00 -4.7 -2.0 1.9 JPM Russia (USD) A (dist) EE EQ LUX 12/03 USD 15.59 21.4 21.8 78.6 Eq. Gold Mines A OT EQ LUX 12/02 USD 40.74 34.5 17.6 59.8n GAM Star Fund Plc Eq. India A EA EQ LUX 12/03 USD 152.45 16.6 17.3 53.0 Yuki Mizuho Jpn PGth JP EQ IRL 12/06 JPY 7227.00 -9.6 -7.2 0.0GAMStar China EqUSD (SCHUA) AS EQ IRL 12/02 USD 20.99 19.3 21.3 67.0 Yuki Mizuho Jpn SmCp JP EQ IRL 12/06 JPY 6715.00 -7.6 -6.4 6.6 n JP MORGAN ASSET MGMT Eq. Luxury & Lifestyle EURO A OT EQ LUX 12/02 EUR 95.83 36.1 35.7 52.7 Yuki Mizuho Jpn Val Sel AS EQ IRL 12/06 JPY 5468.00 -3.3 -1.0 6.6GAMStar US All CapEqUSD (SACU) US EQ IRL 12/02 USD 9.08 9.6 12.7 25.5 Eq. Luxury & Lifestyle USD A OT EQ LUX 12/02 USD 126.21 36.1 35.7 52.7GAMStar-AsEqCHF Ord Ac OT OT IRL 12/02 CHF 11.52 4.4 9.6 27.8 Brokerline 0800 727770 Clients 0800 204020 Yuki Mizuho Jpn YoungCo AS EQ IRL 12/06 JPY 2369.00 -14.2 -13.4 0.7 JF ASEAN Eq (SGD)A(acc) AS EQ LUX 12/03 SGD 15.58 NS NS NS Eq. MENA EURO A OT OT LUX 12/02 EUR 41.96 8.8 5.1 13.9GAMStar-AsEqEUR Ord Ac OT OT IRL 12/02 EUR 14.04 17.9 25.8 39.3 Eq. MENA USD A OT OT LUX 12/02 USD 55.34 8.8 5.1 13.9 JPM Emerg EMEA (SGD)A(acc) GL EQ LUX 12/03 SGD 15.21 NS NS NS n Yuki Shizuoka Japan SeriesGAMStar-AsEqGBP Ord Ac OT OT IRL 12/02 GBP 1.77 13.0 18.1 39.1 Eq. US Rel Val A US EQ LUX 12/02 USD 22.39 8.7 10.6 24.5 JPM Latin Amer Eq(SGD)A(acc) GL EQ LUX 12/03 SGD 15.27 NS NS NS Yuki Shizuoka General Japan JP EQ IRL 12/06 JPY 4490.00 -17.0 -13.8 -3.1GAMStar-AsEqUSD Ord Ac OT OT IRL 12/02 USD 14.62 9.0 10.7 42.3 For information about listing your funds, please contact: Carson Wong tel: +852 2831-6481; email: firstname.lastname@example.org
30 THE WALL STREET JOURNAL. Tuesday, December 7, 2010 BLUE CHIPS BONDS Dow Jones Asia Titans: Mondays best and worst...Major players Market value, Previousbenchmarks in billions close, in STOCK PERFORMANCE Company Country Industry of US$ local currency Previous session 52-week Three-year Shinhan Financial Grp South Korea Banks $19.6 47,000 5.03% 0.6% -2.7%At right, a look at the Asia Titans, the biggest and best known CNOOC Hong Kong Exploration Production 104.5 18.16 2.37 49.6 26.1companies in Asia. Below, some of the Dow Jones Titans indexes ofbiggest and most liquid stocks in individual countries and regions JFE Hldgs Japan Steel 17.4 2,730 2.13 -14.7 -51.3 Nippon Steel Japan Steel 21.8 287.00 1.77 -17.3 -55.8Giants around the world In U.S.-dollar terms. Mitsui Japan Industrial Suppliers 29.8 1,361 1.49 6.2 -40.7Dow Jones Country Titans INDEX PERFORMANCE Bank of China Hong Kong Banks $44.4 4.12 -2.60% -3.7 2.8 Previous session Year-to-date 52-week China Construction Bank Hong Kong Banks 215.9 6.97 -1.83 0.1 -6.7Turkey 0.79% 26.0% 33.3% Cheung Kong Hong Kong Real Estate Hldg Dev 34.3 115.00 -1.37 13.5 -22.1Sweden -0.48 22.4 20.1 Indl Comm Bk China Hong Kong Banks 66.0 5.90 -1.34 -10.8 -4.4Russia 0.30 19.5 23.7South Korea 0.19 14.9 18.9 KDDI Japan Mobile Telecomms 25.6 478,000 -1.24 -2.2 -37.5South Africa 1.30 14.4 17.2GermanySingapore 0.12 0.42 12.6 11.5 15.8 15.5 ...And the rest of Asias blue chips Latest, Latest,Hong Kong -0.47 8.8 6.1 Market value, in local STOCK PERFORMANCE Market value, in local STOCK PERFORMANCECanada 0.17 8.7 10.6 Company/Country (Industry) in billions (U.S) currency Latest 52-week Three-year Company/Country (Industry) in billions (U.S) currency Latest 52-week Three-year Reliance Industries 74.3 45.46 1.34% -4.1% -38.9% Nissan Motor 40.4 821.00 -0.12% 12.8% -34.3%U.K. 0.48 4.9 6.8 India (Exploration Production) Japan (Automobiles)Netherlands -0.37 3.4 6.2 Nintendo 36.7 23,720 1.15 15.5 -65.0 BHP Billiton 147.5 44.53 -0.13 7.6 2.7 Japan (Toys) Australia (General Mining)Brazil -0.39 0.8 -0.3 Woodside Petroleum 32.7 42.68 1.11 -13.1 -10.5 Aus NZ Bk 58.8 23.27 -0.17 5.9 -17.2 Australia (Exploration Production) Australia (Banks)Switzerland -0.22 -0.1% 1.2 Mizuho Financial Grp 31.7 136.00 0.74 -19.5 -100.0 POSCO 31.8 468,000 -0.21 -19.2 -24.1Japan unch. -3.6 -2.1 Japan (Banks) South Korea (Steel) Tokyo Elec Power 37.5 1,969 0.51 -14.8 -37.1 Mitsubishi UFJ Finl 67.4 401.00 -0.25 -19.2 -67.3Australia -0.21 -4.5 -1.0 Japan (Electricity) Japan (Banks)France -0.03 -5.5 -3.2 Hon Hai Precision Ind 35.8 113.00 0.44 -8.3 -38.4 Commonwlth Bk of Aus 74.7 49.29 -0.28 -8.7 -18.4 Taiwan (Electrical Components Equipment) Australia (Banks)Italy -0.81 -12.5 -10.7 Sumitomo Mitsui Finl 44.6 2,640 0.42 -9.0 -99.7 China Life Insurance 31.8 33.20 -0.30 -19.0 -25.6 Japan (Banks) Hong Kong (Life Insurance)Spain -0.82 -13.1 -13.4 Nippon T&T 60.7 3,795 0.40 -0.9 -99.3 Samsung Electronics 100.6 890,000 -0.45 16.8 45.4China 88 0.78 -17.4 -19.3 Japan (Fixed Line Telecommunications) South Korea (Semiconductors) China Mobile (HK) 200.3 78.20 0.32 5.5 -46.3 Rio Tinto Ltd. 51.5 86.00 -0.49 19.7 -40.6 Hong Kong (Mobile Telecommunications) Australia (General Mining) Taiwan Smcndtr Mfg 58.9 68.50 0.29 11.4 10.7 Westfield Grp 28.0 12.28 -0.57 4.1 -43.3Dow Jones Regional Sector Titans Taiwan (Semiconductors) Australia (Retail) Kansai Elec Power 22.0 2,024 0.25 -5.4 -29.7 Honda Motor 69.2 3,135 -0.63 3.5 -17.9 Japan (Electricity) Japan (Automobiles)Auto Parts -0.40% 32.5% 33.1% Shin-Etsu Chml 21.5 4,190 0.24 -15.2 -37.2 Woolworths 32.2 26.48 -0.71 -4.7 -23.3 Japan (Specialty Chemicals) Australia (Food Retailers Wholesalers)Travel Leisure -0.02 30.4 29.6 East Japan Railway 24.4 5,100 0.20 -16.0 -99.5 Seven I Hldgs 22.3 2,087 -0.81 2.3 -31.1Chemicals 0.22 18.2 17.3 Japan (Travel Tourism) Japan (Broadline Retailers) QBE Insurance Group 17.9 17.52 0.11 -21.5 -46.5 National Australia Bk 49.6 23.72 -0.88 -15.6 -39.3Ind Gds Svcs -0.39 17.4 16.8 Australia (Reinsurance) Australia (Banks)Media -0.31 14.0 15.4 Mitsubishi 42.9 2,165 0.09 -0.5 -29.2 Takeda Pharm 37.0 3,875 -0.90 3.9 -43.5 Japan (Industrial Suppliers) Japan (Pharmaceuticals)Real Estate -0.54 13.7 13.7 Sony 36.4 3,020 ... 20.3 -49.7 Canon 60.7 4,070 -0.97 12.1 -30.3 Japan (Consumer Electronics) Japan (Electronic Office Equipment)Arab 50 0.14 11.1 14.0 Toyota Motor 124.6 3,275 ... -12.2 -47.5 Sun Hung Kai Prop 42.8 129.50 -0.99 9.2 -19.4Tiger 50* 0.08 9.1 9.2 Japan (Automobiles) Hong Kong (Real Estate Holding Development) Tokio Marine Hldgs 22.8 2,394 -0.04 -9.7 -42.0 Japan Tobacco 33.5 288,800 -1.03 -0.4 -57.1Asian 50 -0.20 4.3 3.4 Japan (Property Casualty Insurance) Japan (Tobacco)Global 50 -0.29 -1.4% -1.9 NTT DoCoMo 68.7 136,200 -0.07 1.9 -26.0 Westpac Bking 62.3 21.68 -1.14 -9.8 -23.4 Japan (Mobile Telecommunications) Australia (Banks)*Asia excluding Japan PetroChina 27.0 9.92 -0.10 ... -36.4 Panasonic 29.8 1,191 -1.16 -5.1 -50.0 Hong Kong (Integrated Oil Gas) Japan (Consumer Electronics) Source: Dow Jones Indexes Sources: Dow Jones Indexes; WSJ Market Data GroupTracking Credit derivatives Spreads on credit derivatives are one way the market rates Credit-default swaps: Asian companiescredit At its most basic, the pricing of credit-default swaps measures how much a buyer has to pay to purchase-and creditworthiness. Regions that are treading in rough waters can see how much a seller demands to sell-protection from default on an issuers debt. The snapshot below gives a spreads swing toward the maximum—and vice versa. Indexes below sense which way the market was moving yesterday. are for five-year swaps.markets Markit iTraxx Indexes Index: series/version Mid-spread, in pct. pts. Mid-price Coupon SPREAD RANGE, in pct. pts. since most recent roll Maximum Minimum Average Showing the biggest improvement... And the most deteriorationdealmakers CHANGE, in basis points CHANGE, in basis points Europe: 14/1 1.07 99.67% 0.01% 1.20 0.95 1.04 Yesterday Yesterday Five-day 28-day Yesterday Yesterday Five-day 28-day Eur. High Volatility: 14/1 1.61 97.21 0.01 1.84 1.45 1.60 Kookmin 134 –6 3 36 Hong Kong Spl Admin Region 49 ... 2 11 Europe Crossover: 14/1 4.67 101.30 0.05 5.37 4.24 4.76 Rep Philippines 130 –6 –7 8 Bk of Tokyo Mitsubishi 66 ... 8 6 Asia ex-Japan IG: 14/1 1.09 99.59 0.01 1.25 0.93 1.09 Shin Han 141 –5 5 36 Canon 28 ... 2 4 Japan: 14/1 0.97 100.16 0.01 1.10 0.90 1.00 Woori 145 –5 2 34 Fubon Finl Hldg 73 ... 5 2 Note: Data as of December 3 Rep Indonesia 137 –4 –8 13 TAISEI 122 ... –2 –29 In percentage points SK Telecom 92 –4 4 28 Spreads Marubeni 85 ... 5 –12 — NOTICE TO READERS — Index roll 2.00 HYUNDAI 125 –4 4 33 Bk of China 135 ... 1 15 Spreads on five- Samsung –4All statistics published in Asia ex-Japan IG 81 –3 30 Sumitomo Metal 69 ... –1 –6 year swaps for 1.50 POSCO –4The Wall Street Journal t 95 –2 29 ACOM 474 2 1 –84 corporate debt; Lg Electrs –4Asia from markets outside t 1.00 112 ... 33 KT&G 103 10 2 41 based on Markitthe Asian-Pacific region Australia Source: Markit Group iTraxx indexes. 0.50reflect preliminary data. 0 Behind Asias deals: Bank revenue rankings, Asia June July Aug. Sept. Oct.Nov. 2010 Behind every IPO, bond offering, merger deal or syndicated loan is one or more investment banks. Here are Source: Markit Group investment banks ranked by year-to-date revenues from recent deals. PERCENTAGE OF TOTAL REVENUE Revenue, Market Equity Debt Mergers & in millions share capital markets capital markets acquisitions Loans Nomura $853 7.2% 71% 11% 18% ... Mizuho 648 5.4 57 18 10 15% Goldman Sachs 549 4.6 73 12 15 ... Morgan Stanley WSJ.com 514 4.3 59 14 28 ... JPMorgan 455 3.8 67 12 18 2 Sumitomo Mitsui Financial Group 399 3.4 58 12 10 20 Follow the markets throughout the day, with updated stock UBS 365 3.1 61 19 19 ... quotes, news and commentary at WSJ.com. Deutsche Bank 364 3.1 57 19 23 1 Also, receive emails that summarize the day’s trading in Eu- Citi 336 2.8 64 13 20 3 rope and Asia. To sign up, go to WSJ.com/Email. Source: Dealogic
Tuesday, December 7, 2010 THE WALL STREET JOURNAL. 31 GLOBAL MARKETS LINEUPCommodities Prices of futures contracts with the most open interest Currencies London close on Dec. 6EXCHANGE LEGEND: CBOT: Chicago Board of Trade; CME: Chicago Mercantile Exchange; NYBOT: New York Board of Trade; MDEX: Bursa Malaysia Per In Per InDerivatives Berhad; LIFFE: London International Financial Futures Exchange; LME: London Mercantile Exchange; NYMEX: New York Mercantile Exchange; AMERICAS Per euro In euros U.S. dollar U.S. dollars EUROPE Per euro In euros U.S. dollar U.S. dollarsICE: IntercontinentalExchange Argentina peso-a 5.2847 0.1892 3.9775 0.2514 Euro zone euro 1 1 0.7526 1.3287 ONE-DAY CHANGE Contract Contract Commodity Exchange Last price Net Percentage high low Brazil real 2.2401 0.4464 1.6860 0.5931 1-mo. forward 1.0002 0.9998 0.7528 1.3284 Corn (cents/bu.) CBOT 563.50 -10.00 617.50 356.75 Canada dollar 1.3365 0.7482 1.0059 0.9941 3-mos. forward 1.0006 0.9994 0.7531 1.3278 -1.74% 1-mo. forward 1.3373 0.7478 1.0065 0.9935 6-mos. forward 1.0014 0.9986 0.7537 1.3267 Soybeans (cents/bu.) CBOT 1284.50 -15.75 -1.21 1,348.50 872.75 3-mos. forward 1.3392 0.7467 1.0080 0.9921 Czech Rep. koruna-b 25.092 0.0399 18.885 0.0530 Wheat (cents/bu.) CBOT 784.00 5.00 0.64% 864.25 504.75 6-mos. forward 1.3425 0.7449 1.0104 0.9897 Denmark krone 7.4535 0.1342 5.6098 0.1783 Live cattle (cents/lb.) CME 103.250 0.075 0.07 Chile peso 635.83 0.001573 478.55 0.002090 Hungary forint 280.41 0.003566 211.05 0.004738 Cocoa ($/ton) ICE-US 3,040 105 3.58 3,477 2,410 Colombia peso 2510.55 0.0003983 1889.55 0.0005292 Norway krone 7.9874 0.1252 6.0117 0.1663 Coffee (cents/lb.) ICE-US 209.50 4.70 2.29 221.45 131.40 Ecuador US dollar-f 1.3287 0.7526 1 1 Poland zloty 4.0249 0.2485 3.0294 0.3301 Sugar (cents/lb.) ICE-US 29.37 -0.13 -0.44 33.39 11.90 Mexico peso-a 16.4592 0.0608 12.3880 0.0807 Russia ruble-d 41.510 0.02409 31.242 0.03201 Cotton (cents/lb.) ICE-US 130.20 -2.14 -1.62 151.95 61.89 Peru sol 3.7514 0.2666 2.8235 0.3542 Sweden krona 9.1026 0.1099 6.8510 0.1460 Crude palm oil (ringgit/ton) MDEX 3,610.00 94 2.67 3,618 2,533 Uruguay peso-e 26.374 0.0379 19.850 0.0504 Switzerland franc 1.3069 0.7652 0.9837 1.0166 Cocoa (pounds/ton) LIFFE 2,020 61 3.11 2,322 1,610 U.S. dollar 1.3287 0.7526 1 1 1-mo. forward 1.3065 0.7654 0.9833 1.0170 Robusta coffee ($/ton) LIFFE 1,875 11 0.59 2,084 1,374 Venezuela bolivar 5.71 0.175251 4.29 0.232848 3-mos. forward 1.3056 0.7659 0.9827 1.0176 Copper (cents/lb.) COMEX 401.75 1.85 0.46 408.75 230.00 ASIA-PACIFIC 6-mos. forward 1.3039 0.7669 0.9814 1.0190 Gold ($/troy oz.) COMEX 1416.70 10.50 0.75 1,426.10 897.30 Australia dollar 1.3432 0.7445 1.0109 0.9892 Turkey lira 1.9739 0.5066 1.4857 0.6731 Silver (cents/troy oz.) COMEX 2991.00 63.90 2.18 2,997.50 1,475.00 China yuan 8.8340 0.1132 6.6489 0.1504 U.K. pound 0.8470 1.1806 0.6375 1.5686 Aluminum ($/ton) LME 2,297.50 -38.50 -1.65 2,481.50 1,857.00 Hong Kong dollar 10.3134 0.0970 7.7623 0.1288 1-mo. forward 0.8472 1.1804 0.6376 1.5683 Tin ($/ton) LME 25,540.00 190.00 0.75 27,325.00 14,950.00 India rupee 59.6099 0.0168 44.8650 0.0223 3-mos. forward 0.8476 1.1798 0.6379 1.5675 Copper ($/ton) LME 8,729.00 23.00 8,920.00 6,120.00 Indonesia rupiah 11971 0.0000835 9010 0.0001110 6-mos. forward 0.8484 1.1787 0.6385 1.5661 0.26 Japan yen 109.79 0.009108 82.64 0.012101 MIDDLE EAST/AFRICA Lead ($/ton) LME 2,335.00 -15.00 -0.64 2,616.00 1,580.00 1-mo. forward 109.75 0.009112 82.60 0.012106 Bahrain dinar 0.5009 1.9963 0.3770 2.6524 Zinc ($/ton) LME 2,216.00 6.00 0.27 2,659.00 1,617.00 3-mos. forward 109.68 0.009117 82.55 0.012114 Egypt pound-a 7.6823 0.1302 5.7820 0.1730 Nickel ($/ton) LME 23,395 -155 -0.66 27,590 15,910 6-mos. forward 109.52 0.009131 82.43 0.012131 Israel shekel 4.8203 0.2075 3.6280 0.2756 Crude oil ($/bbl.) NYMEX 89.14 -0.05 -0.06 93.29 69.08 Malaysia ringgit-c 4.1786 0.2393 3.1450 0.3180 Jordan dinar 0.9417 1.0619 0.7088 1.4109 Heating oil ($/gal.) NYMEX 2.4779 -0.0095 -0.38 2.5235 1.5200 New Zealand dollar 1.7465 0.5726 1.3145 0.7608 Kuwait dinar 0.3743 2.6720 0.2817 3.5501 RBOB gasoline ($/gal.) NYMEX 2.3419 -0.0102 -0.43 2.3699 1.8222 Pakistan rupee 114.131 0.0088 85.900 0.0116 Lebanon pound 2002.94 0.0004993 1507.50 0.0006634 Natural gas ($/mmBtu) NYMEX 4.455 0.106 2.44 11.750 3.853 Philippines peso 58.308 0.0172 43.885 0.0228 Saudi Arabia riyal 4.9832 0.2007 3.7506 0.2666 Brent crude ($/bbl.) ICE-EU 91.26 -0.23 -0.25 133.57 68.09 Singapore dollar 1.7346 0.5765 1.3056 0.7660 South Africa rand 9.1468 0.1093 6.8843 0.1453 Gas oil ($/ton) ICE-EU 770.25 3.00 0.39 782.25 592.50 South Korea won 1509.28 0.0006626 1135.95 0.0008803 United Arab dirham 4.8800 0.2049 3.6729 0.2723 Taiwan dollar 40.055 0.02497 30.148 0.03317 Source: Thomson Reuters; WSJ Market Data Group SDR -f 0.8632 1.1585 0.6497 1.5392 WSJ.com Thailand baht 39.893 0.02507 30.025 0.03331 a-floating rate b-commercial rate c-government rate c-commercial rate d-Russian Central Bank rate f-Special Drawing Rights Follow the markets throughout the day with updated stock quotes, news and commentary at WSJ.com from the International Monetary Fund ; based on exchange rates for U.S., British and Japanese currencies. Also, receive email alerts that summarize the day’s trading in Europe and Asia. To sign up, go to WSJ.com/Email Note: Based on trading among banks in amounts of $1 million and more, as quoted by Thomson Reuters.Major stock market indexes Stock indexes from around the world, grouped by region. Shown in local-currency terms. Price-to- PREVIOUS SESSION PERFORMANCE Price-to- PREVIOUS SESSION PERFORMANCEearnings ratio* Region/Country Index Close Net change Percentage change Yr.-to-date 52-wk. earnings ratio* Region/Country Index Close Net change Percentage change Yr.-to-date 52-wk. 16 ASIA-PACIFIC DJ Asia-Pacific 137.96 0.18 0.13% 12.1% 12.0% 27 Euro Zone Euro Stoxx 272.06 -0.72 -0.26% -1.0% 0.8% ... Australia SPX/ASX 200 4688.62 -5.60 -0.12% -3.7 0.3 14 Euro Stoxx 50 2769.14 -13.25 -0.48 -6.6 -4.4 ... China CBN 600 27073.04 -47.64 -0.18 -6.8 -9.1 21 Denmark OMX Copenhagen 410.29 1.87 0.46% 30.0 29.6 14 Hong Kong Hang Seng 23237.69 -82.83 -0.36 6.2 4.1 14 Finland OMX Helsinki 7386.43 Closed 14.4 19.2 20 India Sensex 19981.31 14.38 0.07 14.4 17.7 13 France CAC-40 3749.23 -1.32 -0.04 -4.8 -2.4 ... Indonesia Jakarta Composite 3722.347 26.087 0.71 46.9 49.9 14 Germany DAX 6954.38 6.66 0.10 16.7 20.2 ... Japan Nikkei Stock Average 10167.23 -11.09 -0.11 -3.6 ... 11 Italy FTSE MIB 19930.29 -190.51 -0.95 -14.3 -12.5 ... Topix 881.41 2.19 0.25 -2.9 -1.9 10 Netherlands AEX 342.34 0.15 0.04 2.1 6.9 ... Malaysia Kuala Lumpur Composite 1501.74 0.76 0.05 18.0 18.7 ... Russia RTSI 1711.44 24.08 1.43 19.9 23.2 ... New Zealand NZSX-50 3293.180 9.882 0.30 2.0 4.9 9 Spain IBEX 35 9889.9 -124.9 -1.25 -17.2 -17.7 9 Pakistan KSE 100 11440.07 33.41 0.29 21.9 27.2 14 Switzerland SMI 6412.22 -28.68 -0.45 -2.0 -0.9 13 Philippines Manila Composite 4223.12 46.64 1.12 38.3 38.6 ... Turkey ISE National 100 67712.10 851.91 1.27 28.2 35.7 ... Singapore Straits Times 3181.41 8.97 0.28 9.8 13.7 12 U.K. FTSE 100 5770.28 24.96 0.43 6.6 8.7 11 South Korea Kospi 1953.64 -3.62 -0.18 16.1 19.7 17 AMERICAS DJ Americas 331.32 -0.56 -0.17 11.7 12.9 14 Taiwan Weighted 8702.23 78.22 0.91 6.3 11.9 ... Brazil Bovespa 69526.13 -239.96 -0.34 1.4 1.8 10 Thailand SET 1034.06 Closed 40.8 47.4 ... Argentina Merval 3447.59 25.16 0.74 48.6 58.7 23 EUROPE Stoxx Europe 600 271.51 0.57 0.21 7.2 9.5 17 Mexico IPC 37441.88 55.97 0.15 16.6 16.3 14 Stoxx Europe 50 2556.57 2.77 0.11 -0.9 1.7 Thomson Reuters is the primary data provider for several statistical tables in The Wall Street Journal, including foreign*P/E ratios use trailing 12-months, as-reported earnings stock quotations, futures and futures options prices, and foreign exchange tables. Reuters real-time data feeds are usedEuropean and Americas index data are as of 12:00 p.m. ET. Sources: Thomson Reuters; WSJ Market Data Group to calculate various Dow Jones Indexes.Dow Jones Indexes Price-to- Price-to- PERFORMANCE MSCI indexes PERFORMANCEDividend earnings Net Year- Three-yr., Dividend earnings Net Year- Three-yr., yield* ratio* Dows Jones Index Last change Daily to-date 52-wk. annualized yield* ratio* Dows Jones Index Last change Daily to-date 52-wk. annualized Developed and emerging-market regional and country indexes 2.17% 16 Global TSM 2532.31 -4.22 -0.17% 9.2% 9.8% -7.2% 2.25% 13 Shenzhen -c 436.15 -4.33 -0.98% 4.7% 2.2% -1.9% from MSCI Barra as of December. 06, 2010 1.97 15 Global DOW 2034.20 -5.02 -0.25 2.5 2.9 -10.5 1.81 18 U.S. TSM 12751.49 -24.25 -0.19 12.0 13.8 -5.6 Price-to- LOCAL-CURRENCY 2.25 14 Global Titans 50 171.16 -0.50 -0.29 -1.4 -1.9 -11.3 4.52 14 Global Select Div -d 211.92 -1.11 -0.52 4.9 4.2 -9.5 Dividend earnings PERFORMANCE 2.34 16 Asia/Pacific TSM 1366.23 1.84 0.13 12.3 12.3 -6.2 5.55 11 Asia/Pacific Select Div -d 293.68 -1.71 -0.58 9.3 7.7 -10.5 yield ratio Morgan Stanley Index Last Daily YTD 52-wk. 2.47 16 Asia/Pacific ex-Japan TSM 3516.71 5.64 0.16 14.3 16.3 -4.6 3.68 7 Hong Kong Select Div -d 218.25 -0.33 -0.15 16.5 13.5 -0.2 2.40% 15 ALL COUNTRY (AC) WORLD* 322.13 -0.77% 7.6% 9.7% 2.68 15 Europe TSM 2672.58 -14.35 -0.53 -0.2 -1.1 -12.3 4.01 14 U.S. Select Dividend -d 350.10 -0.68 -0.19 10.9 11.4 -9.9 2.50 15 World (Developed Markets) 1,247.15 -0.78 6.7 8.5 2.04 12 Emerging Markets TSM 4726.30 6.80 0.14 16.5 16.9 -4.7 1.56 19 Islamic Market 2164.25 0.37 0.02 9.6 11.0 -4.0 1.70 26 World Small Cap 226.88 -1.12 19.3 24.6 2.75 13 Asian Titans 50 139.98 -0.28 -0.20 4.3 3.4 -8.6 1.93 14 Islamic Market 100 2176.76 0.07 ... 2.6 3.3 -6.5 2.55 13 BRIC 50 643.91 -0.38 -0.06 7.7 6.9 -6.4 2.22 14 Islamic China/HK Titans 30 1698.10 7.09 0.42 14.3 13.8 -7.7 2.50 15 Kokusai (World ex-Japan) 1,234.63 -0.67 6.5 8.4 2.55 13 CBN China 600 -c 27073.04 -47.64 -0.18 -6.8 -9.1 -10.6 1.29 17 Sustainability Korea 1408.76 10.20 0.73 16.9 17.2 -4.3 3.10 15 EAFE 1,617.47 -1.38 2.3 3.7 2.25 13 China Offshore 50 4303.43 -26.01 -0.60 5.5 2.3 -9.9 3.46 20 Brookfield Infrastructure 2238.60 -7.86 -0.35 10.5 14.2 -3.6 2.20 14 Emerging Markets (EM) 1,121.78 -0.69 13.4 17.7 2.25 13 Shanghai -c 363.19 -0.47 -0.13 -6.3 -8.5 -10.3 DJ-UBS Commodity -p 153.81 1.99 1.31 10.5 14.1 -4.5 2.70 15 AC ASIA PACIFIC EX-JAPAN 465.82 -0.67 11.8 15.8*Fundamentals are based on data in U.S. dollar. Footnotes: c-in local currency. d-dividends reinvested. p-previous day. Note: All data as of 11:30 a.m. ET. Source: DowJones Indexes 2.30 14 AC Far East ex-Japan 514.83 -0.30 14.4 19.4 2.00 16 Japan 551.16 0.25 -3.0 5.5Cross rates U.S.-dollar and euro foreign-exchange rates in global trading 2.20 14 China 67.94 -0.52 4.8 5.4 US$ A$ £ C$ YUAN EURO HK$ RUPEE RUPIAH YEN NZ$ WON RINGGIT PH. PESO S$ S FRANC TW$ BAHT 1.00 22 China A (China Domestic) 3,130.13 -0.12 -7.4 -6.2 U.S. 1.011 0.637 1.006 6.649 0.753 7.762 44.865 9009.82 82.635 1.314 1135.95 3.145 43.885 1.306 0.984 30.147 30.025 Australia 0.989 0.631 0.995 6.577 0.745 7.678 44.380 8912.51 81.743 1.300 1123.68 3.111 43.411 1.291 0.973 29.822 29.701 2.50 22 Hong Kong 12,313.79 -0.47 21.0 23.5 Britain 1.569 1.586 1.578 10.430 1.181 12.176 70.377 14133.26 129.625 2.062 1781.91 4.933 68.840 2.048 1.543 47.291 47.099 0.90 23 India 790.17 -0.51 11.7 15.7 Canada 0.994 1.005 0.634 6.610 0.748 7.717 44.602 8956.97 82.150 1.307 1129.29 3.127 43.628 1.298 0.978 29.971 29.849 China 0.1504 0.152 0.096 0.151 0.113 1.167 6.748 1355.09 12.428 0.198 170.85 0.473 6.600 0.196 0.148 4.534 4.516 1.20 11 Korea 558.61 0.78 16.2 26.0 Euro 1.329 1.343 0.847 1.336 8.834 10.313 59.610 11970.90 109.793 1.747 1509.28 4.179 58.308 1.735 1.307 40.055 39.893 Hong Kong 0.129 0.130 0.082 0.130 0.857 0.097 5.780 1160.72 10.646 0.169 146.34 0.405 5.654 0.168 0.127 3.884 3.868 2.30 18 Malaysia 553.20 -0.29 17.8 19.0 India 0.0223 0.0225 0.0142 0.0224 0.1482 0.0168 0.1730 200.82 1.8419 0.0293 25.32 0.0701 0.9782 0.0291 0.0219 0.6720 0.6692 2.80 15 Singapore 1,743.79 -0.59 7.3 14.3 Indonesia 0.0001 0.0001 0.0001 0.0001 0.0007 0.0001 0.0009 0.0050 0.0092 0.0001 0.13 0.0003 0.0049 0.0001 0.0001 0.0033 0.0033 Japan 0.012 0.012 0.008 0.012 0.080 0.009 0.094 0.543 109.03 0.016 13.75 0.038 0.531 0.016 0.012 0.365 0.363 3.40 14 Taiwan 307.57 0.72 3.9 12.1 New Zealand 0.761 0.769 0.485 0.765 5.058 0.573 5.905 34.131 6854.22 62.865 864.17 2.393 33.386 0.993 0.748 22.935 22.842 2.70 15 Thailand 415.28 0.28 37.6 48.2 South Korea 0.0009 0.0009 0.0006 0.0009 0.0059 0.0007 0.0068 0.0395 7.93 0.0727 0.0012 0.0028 0.0386 0.0011 0.0009 0.0265 0.0264 Malaysia 0.318 0.321 0.203 0.320 2.114 0.239 2.468 14.266 2864.81 26.275 0.418 361.19 13.954 0.415 0.313 9.586 9.547 4.20 16 Australia 957.41 0.39 -4.4 -1.1 Philippines 0.023 0.023 0.015 0.023 0.152 0.017 0.177 1.022 205.31 1.883 0.030 25.88 0.072 0.030 0.022 0.687 0.684 Singapore 0.766 0.774 0.488 0.770 5.093 0.576 5.946 34.365 6901.17 63.295 1.007 870.09 2.409 33.614 0.753 23.092 22.998 5.30 17 New Zealand 83.49 -0.21 -4.3 -2.2 Switzerland 1.017 1.028 0.648 1.023 6.759 0.765 7.891 45.611 9159.58 84.009 1.336 1154.83 3.197 44.614 1.327 30.649 30.524 1.80 17 US BROAD MARKET 1,385.30 -0.35 12.0 15.0 Taiwan 0.033 0.034 0.021 0.033 0.221 0.025 0.257 1.488 298.86 2.741 0.044 37.68 0.104 1.456 0.043 0.033 0.996 Thailand 0.033 0.034 0.021 0.034 0.221 0.025 0.259 1.494 300.08 2.752 0.044 37.83 0.105 1.462 0.043 0.033 1.004 3.30 14 EUROPE 93.80 -0.27 6.3 12.8 Source: Thomson Reuters via WSJ Market Data Group *Twenty-three developed and 26 emerging markets Source: MSCI Barra
32 THE WALL STREET JOURNAL. Tuesday, December 7, 2010 SCANNING THE GLOBEDow Jones Industrial Average P/E: 15 Nasdaq Composite Index P/E: 12* S&P 500 Index P/E: 18LAST: 11364.76 t 17.33, or 0.15% LAST: 2587.75 t 3.71, or 0.14% LAST: 1221.80 t 2.91, or 0.24%YEAR TO DATE: s 936.71, or 9.0% YEAR TO DATE: s 318.60, or 14.0% YEAR TO DATE: s 106.70, or 9.6%OVER 52 WEEKS s 974.65, or 9.4% OVER 52 WEEKS s 398.14, or 18.2% OVER 52 WEEKS s 118.55, or 10.7% High 12000 2625 1325 Close Low 11500 2500 1250 11000 2375 1175 t 10500 2250 1100 50–day moving average 10000 2125 1025 9500 2000 950 10 17 24 1 8 15 22 29 5 12 19 26 3 10 17 24 1 8 15 22 29 5 12 19 26 3 10 17 24 1 8 15 22 29 5 12 19 26 3Sept. Oct. Nov. Sept. Oct. Nov. Sept. Oct. Nov.*Price-to-earnings ratio for the Nasdaq 100 Note: Price-to-earnings ratios are for trailing 12 months Sources: WSJ Market Data Group; Birinyi AssociatesDJIA component stocks U.S. stocks: most active... ADRs of Asian companies* Volume, CHANGE Volume, CHANGE 52-WEEK Volume, CHANGEStock Symbol in millions Latest Points Percentage Stock Symbol in millions Latest Points Percentage High Low Stock Symbol in OOOs Latest Points PercentageAT&T T 6.0 $28.43 –0.06 –0.22% Citigroup C 190.6 $4.44 –0.01 –0.23% $115.04 $38.47 Baidu ADS BIDU 6,665.0 $109.48 0.25 0.23%Alcoa AA 9.1 14.24 0.01 0.07 SprintNextel S 68.8 4.14 0.22 5.61 18.78 7.05 SuntechPwr STP 4,609.7 8.79 0.51 6.16AmExpress AXP 2.1 44.77 –0.11 –0.25 BankAm BAC 61.5 11.71 –0.15 –1.26 37.65 13.85 TataMtrs ADS TTM 3,666.4 30.65 –1.00 –3.16BankAm BAC 61.5 11.71 –0.15 –1.26 SPDR S&P 500 SPY 46.5 122.66 –0.23 –0.19 12.00 9.30 TaiwanSemi TSM 3,291.8 11.87 –0.10 –0.84Boeing BA 1.2 66.50 –0.05 –0.07 CiscoSys CSCO 43.3 19.50 0.43 2.23 92.62 58.38 BHPBilton ADS BHP 932.7 88.58 –0.09 –0.10Caterpillar CAT 1.8 89.32 –0.06 –0.07 Dryships DRYS 31.8 6.26 0.38 6.48 58.22 32.68 ICICI Bk ADS IBN 850.2 51.18 –2.13 –4.00Chevron CVX 1.8 84.78 –0.11 –0.13 FordMotor F 31.1 16.66 –0.14 –0.83 13.30 8.38 AU Optrncs AUO 737.7 10.14 0.09 0.91CiscoSys CSCO 43.3 19.50 0.43 2.23 Pfizer PFE 29.9 16.90 0.18 1.08 15.68 10.34 ChinaUnicomHK CHU 666.5 13.43 –0.31 –2.26CocaCola KO 4.5 64.19 –0.31 –0.48 BkIrlnd ADS IRE 24.9 2.15 0.31 16.84 6.74 2.86 SemiMfgInt ADS SMI 592.0 3.86 0.03 0.78Disney DIS 2.0 37.45 –0.14 –0.37 iShrSilverTr SLV 22.7 29.36 0.76 2.67 4.24 2.50 UtdMicro ADS UMC 408.7 3.20 –0.08 –2.44DuPont DD 3.8 48.83 –0.41 –0.84 SPDR FnclSelSct XLF 20.9 15.13 –0.05 –0.33 54.70 44.36 ChinaMobile CHL 357.6 50.21 –0.19 –0.38ExxonMobil XOM 5.7 71.26 0.07 0.10 PwrShrs QQQ QQQQ 20.1 53.76 –0.11 –0.20 71.99 49.55 Infosys INFY 340.8 69.48 0.15 0.22GenElec GE 17.2 16.77 –0.01 –0.07 iShrMSCIEmrgMkt EEM 18.3 46.90 –0.24 –0.52 7.70 4.45 Slcnwr ADS SPIL 326.7 5.46 –0.04 –0.82HewlettPk HPQ 5.6 42.92 –0.11 –0.26 Microsoft MSFT 17.4 26.83 –0.19 –0.71 19.14 14.58 SK Tele ADS SKM 305.0 18.87 0.21 1.14HomeDpt HD 4.3 33.45 –0.03 –0.09 GenElec GE 17.2 16.77 –0.01 –0.07 5.63 4.48 MitsuUFJ ADS MTU 300.7 4.85 –0.02 –0.41Intel INTC 14.4 21.68 –0.01 –0.03 79.83 57.04 ChinaLfIns ADS LFC 235.6 63.89 –0.93 –1.43IBM IBM 1.5 145.12 –0.26 –0.18 Biggest gainers... 22.81 16.45 KT Crp ADS KT 232.8 20.65 –0.04 –0.19JPMorgChas JPM 10.0 39.56 –0.05 –0.12 16.81 11.30 Wipro ADS WIT 216.8 14.49 0.33 2.33JohnsJohns JNJ 3.5 62.32 –0.24 –0.38 Verigy VRGY 12,523.1 $12.37 3.23 35.28% 6.25 1.69 Rediff ADS REDF 216.6 4.35 –0.14 –3.12KftFoods KFT 3.0 30.20 –0.12 –0.40 NewLeadHldg NEWL 2.6 3.33 0.81 31.94 53.16 29.90 CtripInt ADS CTRP 213.4 43.76 –0.50 –1.14McDonalds MCD 1.3 79.59 –0.17 –0.21 ChinaShenZhou SHZ 3,088.2 3.90 0.82 26.62 21.59 13.75 LG DisplayADS LPL 206.2 18.14 0.33 1.85Merck MRK 3.9 35.15 –0.15 –0.44 Radware RDWR 3,601.2 39.38 6.62 20.21 3.22 1.18 SifyTech ADS SIFY 184.8 1.97 –0.08 –3.90Microsoft MSFT 17.4 26.83 –0.19 –0.71 GramrcyCap GKK 993.7 2.70 0.44 19.46 102.95 70.15 ChinaPete ADS SNP 181.0 92.35 –2.11 –2.23PfizerProctGamb PFE PG 29.9 2.3 16.90 62.14 0.18 –0.19 1.08 –0.30 ...Biggest losers 40.45 25.85 38.25 28.33 SonyCp HondaMtr ADS SNE HMC 177.6 36.50 0.18 169.7 37.90 –0.30 0.50 –0.793M MMM 1.2 86.93 –0.01 –0.01 LTX Credence LTXC 2,816.3 $7.33 –1.12 –13.25% 18.20 10.43 KoreaElecPwr KEP 168.9 12.48 –0.13 –0.99TravelersCos TRV 1.1 55.11 0.25 0.46 CyberDefender CYDE 107.2 2.56 –0.35 –12.03 41.30 23.10 DrRdyLab ADS RDY 163.4 41.11 0.08 0.19UnitedTech UTX 1.1 78.46 –0.28 –0.36 Ku6Media KUTV 127.8 7.05 –0.95 –11.88 25.38 17.36 ChunghwaTel CHT 158.4 24.29 –0.04 –0.16Verizon VZ 5.0 32.94 0.04 0.12 GenFin GFN 2.0 1.80 –0.24 –11.76 9.55 5.90 TeleNZ ADS NZT 156.0 8.35 ... –0.04WalMart WMT 3.3 54.57 –0.05 –0.09 CDC Softw ADS CDCS 66.9 6.30 –0.81 –11.39 23.97 19.59 Nippon ADS NTT 153.0 22.86 ... 0.02 *Most active American depositary receipts tracked by Dow Jones Source: WSJ Market Data GroupGlobal government bonds U.S. Treasury yield curveLatest, month-ago and year-ago yields and spreads over or under U.S. Treasurys on benchmark two-year The curve shows the yield to maturity of current bills, notes and bonds; all data as of 3 p.m. ET.and 10-year government bonds around the world. Data as of 11 a.m. ET Country/ SPREAD OVER TREASURYS, in basis points YIELD TOTAL RETURN Coupon Maturity, in years Yield Latest Previous Month ago Year ago Previous Month ago Year ago Yield to Modified Month Quarter Year 5% Ryan Index maturity duration to-date to-date to-date 12-month 4.750% Australia 2 4.940% 449.5 448.5 467.4 351.9 4.957% 5.049% 4.366% 30-year Treasury 4.315% 16.74 –3.53 % –8.09 % 11.16 % 6.12 % 4.500 10 5.443 249.3 247.9 272.0 195.8 5.490 5.255 5.442 4 10-year Treasury 3.016 8.66 –1.88 –3.38 10.72 6.93 5.000 Austria 2 1.121 67.6 60.2 78.7 11.2 1.074 1.162 0.959 7 Year Treasury 2.347 6.43 –1.22 –2.07 11.10 7.93 s 3.900 10 3.308 35.8 29.4 34.7 5.8 3.305 2.882 3.542 One year ago 3 Five-year Treasury 1.610 4.80 –0.68 –1.12 8.40 6.06 2.000 Belgium 2 1.543 109.8 106.7 85.7 27.1 1.539 1.232 1.118 Ryan Index 2.090 6.92 –1.26 –2.48 8.18 5.53 3.750 10 4.016 106.6 88.3 76.6 12.9 3.894 3.301 3.613 3 Year Treasury 0.779 2.92 –0.22 –0.19 4.78 3.60 2 1.500 Canada 2 1.577 113.2 117.0 110.0 43.4 1.642 1.475 1.281 Two-year Treasury 0.468 1.98 –0.03 0.01 2.34 1.73 s Friday 3.500 10 3.144 19.4 19.3 32.1 -16.6 3.204 2.856 3.318 1 Year Treasury 0.264 0.96 ... 0.06 0.81 0.72 1 4.000 Denmark 2 1.103 65.8 66.3 83.4 132.2 1.135 1.209 2.169 Six-month Treasury 0.203 0.50 0.01 0.03 0.25 0.25 4.000 10 2.971 2.1 0.0 2.3 12.0 3.011 2.558 3.604 Ryan Cash Index-a 0.188 0.44 0.01 0.04 0.34 0.33 0 0.750 France 2 0.933 48.8 60.7 77.2 43.3 1.079 1.147 1.280 Three-month bill 0.142 0.25 0.01 0.04 0.19 0.22 1 3 6 1 2 3 5 710 30 2.500 10 3.267 31.7 26.9 32.1 0.3 3.280 2.856 3.487 month(s) years One-month bill 0.142 0.07 ... 0.03 0.12 0.13 1.000 Germany 2 0.824 37.9 38.6 53.4 46.8 0.858 0.909 1.315 maturity a-Performance of a cash investment Source: Ryan ALM 2.500 10 2.847 -10.3 -15.7 -13.0 -27.5 2.854 2.405 3.209 0.360 Hong Kong 2 0.699 25.4 28.4 1.7 -51.3 0.756 0.392 0.334 2.869 2.440 2.000 10 Italy 2 2.445 -8.1 200.0 -9.8 188.6 -35.0 164.7 -119.4 73.4 2.913 2.358 2.185 2.022 2.290 1.581 Key money rates 3.750 10 4.500 155.0 146.6 138.8 51.1 4.477 3.923 3.995 Latest 52 wks ago Latest 52 wks ago Offer Bid 0.200 Japan 2 0.180 -26.5 -29.0 -23.5 -66.3 0.182 0.140 0.184 Prime rates Euro Libor Eurodollars 1.200 10 1.170 -178.0 -180.2 -160.4 -219.4 1.209 0.931 1.290 U.S. 3.25% 3.25% One month 0.76500% 0.45750% One month 0.3500% 0.2500% 5.000 Netherlands 2 0.854 40.9 41.0 63.8 8.0 0.882 1.013 0.927 Canada 3.00 2.25 Three month 0.97125 0.68000 Three month 0.5500 0.4500 3.500 10 3.067 11.7 8.1 9.7 -3.0 3.092 2.632 3.454 Japan 1.475 1.475 Six month 1.20625 0.98125 Six month 0.7500 0.6000 Britain 0.50 0.50 One year 1.48625 1.22500 One year 1.0500 0.8500 5.000 Portugal 2 4.204 375.9 405.2 405.1 42.2 4.524 4.426 1.269 ECB 1.00 1.00 Hibor 4.800 10 6.096 314.6 305.6 407.9 27.0 6.067 6.614 3.754 Switzerland 0.57 0.53 One month 0.20143 0.05000% Latest 52 wks ago 3.900 Spain 2 3.329 288.4 283.5 187.6 58.1 3.307 2.251 1.428 0.27214 Australia 4.75 3.75 Three month 0.10857 U.S. discount 0.75% 0.50% 4.850 10 5.204 225.4 210.4 183.0 29.6 5.115 4.365 3.780 Hong Kong 5.25 5.25 Six month 0.39071 0.25857 Fed-funds target 0.25 0.25 4.000 Switzerland 2 0.496 5.1 2.9 27.7 -42.7 0.501 0.652 0.420 One year 0.72000 0.58286 Call money 2.00 2.00 2.000 10 1.669 -128.1 -129.9 -106.2 -157.5 1.712 1.473 1.909 Libor Asian dollars 4.500 U.K. 2 0.985 54.0 55.1 28.6 35.8 1.023 0.661 1.205 One month 0.26500% 0.23469% One month 0.2711% 0.24% Overnight repurchase rates 4.750 10 3.385 43.5 40.9 44.3 22.0 3.420 2.978 3.704 Three month 0.30344 0.25656 Three month 0.3090 0.2646 U.S. 0.32% 0.12% 0.500 U.S. 2 0.445 ... ... ... ... 0.472 0.375 0.847 Six month 0.45969 0.48438 Six month 0.4690 0.4960 U.K. (BBA) 0.545 0.485 2.625 10 2.950 ... ... ... ... 3.011 2.535 3.484 One year 0.78250 1.05438 One year 0.7900 1.0580 Euro zone 0.69 0.36 Source: Thomson Reuters Sources: WSJ Market Data Group; Reuters
Tuesday, December 7, 2010 THE WALL STREET JOURNAL. 33 MARKETSU.S. charges 500-plus in scam sweepBY JESSICA HOLZER from just the criminal cases total would-be fraudsters: “Cheating in- $8.3 billion, while losses from the vestors out of their earnings and WASHINGTON—U.S. officials on civil cases amount to $2.1 billion, savings is no longer a safe businessMonday said they have charged the Justice Department said in a plan.”more than 500 people in what they news release. Already, 87 defendants have beendubbed the largest ever nationwide “These are staggering, stagger- sentenced for wrongdoing uncov-sweep of scam artists preying on in- ing numbers,” U.S. Attorney General ered by the probe, with several peo-dividual investors. Eric Holder said at the news confer- ple receiving sentences of more than Nearly 350 people have been ence. 20 years. One person was sentencedcriminally charged in the sting, Officals said that victims in to 85 years in prison, Mr. Holderwhich has targeted people across many cases were preyed upon by said.the country for allegedly running their neighbors or by members of The probe, called “Operationpump-and-dump and Ponzi schemes their church. A Texas man targeted Broken Trust,” began 3½ monthsas well as foreign-exchange scams. his fellow parishioners by claiming ago by an interagency task force set Officials, in a news conference at that his success in foreign-exchange up in November 2009 by Presidentthe Justice Department, said they trading was a “blessing from God,” Barack Obama to investigate finan-have also civilly charged 189 people Mr. Holder said. cial fraud. Getty Imagesin the probe. In another case, a former police- Officials across the U.S. govern- The alleged schemes uncovered man allegedly defrauded current ment, including from the U.S. Postalin the sweep have harmed more and former police officers and fire- Service, the Commodity Futuresthan 120,000 people and stolen fighters in a Ponzi scheme. Trading Commission and the Securi-thousands and sometimes millions Mr. Holder said the sweep’s re- ties and Exchange Commission, co- U.S. Attorney General Eric Holder, shown in August, described losses in theof dollars from victims. 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Peng Chau, HK Island, Discovery Bay Café Roma Chili’s Grill & Bar China launched the yuan-ruble Lan Kwai Fong Hotel Tel: (852) 9501-0478 G/F, Jervois House, G9, Bangsar Shopping Centre,trading pair on Nov. 22. No. 3 Kau U Fong, Central, Hong Kong Email: firstname.lastname@example.org 1 Jervois Street, Jalan Maarof Bukit Bandaraya, 59100 Kuala Lumpur Both Russia and China have in Tel: (852) 3650-0000 Website: www.healingfire.com Central, Tel: (603) 2092-2023 Website: www.lankwaifonghotel.com.hk Reiki, treatments, courses Hong Kongthe past several years called for “The Best Boutique Hotel in Asia” by Travel- Tel : (852) 2517-8484 Fax: (603) 2282-3207countries to lessen their reliance on Weekly.uniquely designed in décor,modern in sportsperformance Fax: (852) 2517-8585 Email: email@example.com U.S. dollar. style with Chinese accents 8/F AON China Building, Website: www.chilis.com President Dmitry Medvedev has 29 Queen’s Road Central, Hong Kong Habibi Restaurant Chili’s Grill & Barpushed for central banks to begin Hotel LKF b Rhombus: Tel: (852) 2521-6380 1/F, Grand Progress Building, Lot 346 B, Level 3, Suria KLCC, Award winning 5-star Boutique Hotel truly Fax: (852) 2521-6381 15-16 Lan Kwai Fong,using a wider array of regional re- located at Lan Kwai Fong Physiotherapy Centre Central, Kuala Lumpur City Centre,serve currencies, including the ru- Central, Hong Kong Hong Kong 50088 Kuala Lumpurble. Tel: (852) 3518-9688 Holistic Central Tel : (852) 2544-6198 Tel: (603) 2164-1400 The Micex will trade about three Email: firstname.lastname@example.org 16/F, Hing Wai Building, Fax : (852) 2805-1787 Fax: (603) 2164-4211 Email: email@example.com yuan ($450,000) daily start- Website: www.hotel-lkf.com.hk 36 Queens Road Central, Website: www.chilis.com Hong Kong Habibi Caféing Dec. 15, officials at the country’s Hotel Panorama b Rhombus: Tel : (852) 2523-8044 112-114 Wellington Street,largest market by volume said Mon- Award winning 4-star Business Hotel Fax: (852) 2521-3365 Central, Hong Kong San Francisco Coffee Suria KLCCday at a Moscow conference dedi- located in the heart of Tsim Sha Tsui Website: www.holistic-central.com Tel : (852) 2544-3886 Lot 134, Level 1 , Ampang Mall,cated to ruble-yuan trade. Kowloon, Hong Kong Family Medicine & Natural Therapies Fax: (852) 2544-3883 Suria KLCC 50088 Kuala Lumpur Tel: (603) 2382-7322 Trading will take place between Tel: (852) 3550-0388 Website: www.sanfranciscocoffee.com Website: www.hotelpanorama.com.hk LIFESTyLE SHOPS Comida Grill10 a.m. and 11 a.m. Moscow time G/F., 22 Staunton Streetand will be settled among Russian The Mood @LKF HMV Elements SoHo, Central, Hong Kong San Francisco Coffee HP Towersbanks and the Russian units of Chi- 31 Wyndham Street, Shop 1020-1021 Elements, 1 Austin Road Open Daily: 12 noon to 2:30 pm & 6 Lot GO2, Ground Floor, Connectingnese banks, Micex officials said. Central, West,Tsimshatsui, Kowloon, Hong Kong pm to 11 pm PodiumHP Towers, No. 12 Jalan Gelenggang Bukit Damansara, Traders will have to pay for any Hong Kong Tel: (852) 2196-8291 Tel : (852) 2530 3118 50450 Kuala Lumpur Tel: (852) 3961-5555 Fax: (852) 2196-8761 Fax : (852)2868 2516currency purchases immediately in Hip Hotel Apartments Retail (Entertainment) Email: firstname.lastname@example.org Tel. (603) 2166-7322a regime known as T+0. Website: www.comida.com.hk Fax: (603) 2732-7322 The initial interest in ruble-yuan Jumpstart Business Centre Cohen Optical Ltd Website: www.sanfranciscocoffee.comtrading is expected to come from 1501-08 Millennium City 5, 418 Kwun 45 Peking Road, G/F, Kowloon, HKRussian banks with a strong pres- Tong Road, Kowloon, Tel: (852) 2369-0548 Hong Kong Fax: (852) 2721-3781ence in Siberia or the Russian Far Tel: (852) 2961-4888 order available : email@example.comEast. Fax: (852) 2893-2300 website: www.cohenhk.com About 40 banks will participate Business Centrein trading, with five banks acting as BAR / CAFE / RESTAURANTmarket makers, including state- S-Residence 5-7 Catchick Street, Kennedy Town Jen Caféowned VTB, Russia’s second-largest Tel: (852) 2872-8922 (Novotel Centur Harbourview)lender, and Industrial & Commer- Email: firstname.lastname@example.org 508 Queen’s Road, Western District,cial Bank of China. Website: www.s-residence.com.hk Hong Kong Trading in the yuan-ruble pair Serviced Apartments Tel: (852) 2974-1234will be driven by market forces, cen- Fax: (852) 2974-0333 ING Life Hong Kong Hoteltral bank Deputy Chairman Valery 1/F, ING Tower, 308 Des Voeux Road,Melnikov said. Central, Hong Kong Divo Wine & Dining The exchange rate of the ruble Tel: (852) 3123-3123 16-17/F L’hart,itself is managed by the central Email: email@example.com 487-489 Lockhart Road, Causeway Bay,bank against a dollar-euro trading Website: www.ing.com.hk Hong Kong Insurance Tel : (852) 2836-6100basket, although Russia has said itintends to move toward a complete Fax: (852) 2836-6122 To Participate in Executive Lifestyle Program, La Mer Euro Cuisine & Wine,free float of its currency over the No. 69 Bisney Road, Hong Kong South Wine Dining, Lunch & Dinner please call Ms. Priscilla Wong at (852) 2831-2537.next few years. Tel: (852) 2819-8318 Local currency settlement be- Website: www.lamerproperty.com A heritage of the prestigious residencetween China and Russia will help that enjoys unobstructed South Chinabanks and companies in both coun- Sea view.tries cut costs and reduce exchange-rate risks, Ma Delun, deputy gover-nor of the People’s Bank of China,said last week.
34 THE WALL STREET JOURNAL. Tuesday, December 7, 2010 HEARD ON THE STREETEmail: firstname.lastname@example.org FINA NCIA L A NA LYSIS & COMMENTARY WSJ.com/HeardSingle-seater for Honda in India P&G buybacks using bonds Anticipation of Honda Motor’sexit from its 26-year-old joint ven- No more Hero are worthy betture with India’s Hero Group is Lately, Procter & Gamble’s Market share of two-wheeler salesbuilding. Investors in the Japanese bondholders have been served on a in India for October 2010company needn’t worry. silver platter, while shareholders Without the 26% stake in Hero Bajaj Hero Honda had to settle for crumbs. It may beHonda, Honda will lose some brag- 21.2% 44% time to trade places.ging rights, such as the claim it has P&G shares have risen just 0.3%58% of India’s motorbike market. this year, while the S&P 500-stock But in truth, Honda’s share of the index has gained 9.8%. Meanwhile,joint venture’s income is only $120 P&G’s bonds have outperformed,million a year, Deutsche Securities with its 3.15% bond due in 2015 upestimates. That is a fraction of the 4.9%, topping the roughly 4% rise in$6 billion profit Honda is forecasting its Markit iBoxx benchmark.for its full year through March. Such a mismatch has created an Others 21.1% Honda opportunity. P&G is able to borrow 13.7% at far lower rates than its stock’sLeaving its Hero Honda Sources: J.D. Power; Associated Press (photo) dividend yield. In mid-November, P&G sold $1 billion in bonds duejoint venture represents a A model poses with a Honda 2015 at a 1.97% yield. Because inter-rethinking of Honda’s VFR1200F motorcycle in New Delhi est is tax-deductible, the effective cost of debt is roughly 1.4%, assum-strategy in India. ing a tax rate of about 30%. P&G’s Critically, for Honda this isn’t an The company has said it plans to fetches for such a large chunk of the dividend yield is around 3%. exit from India. Rather, it is a re- increase production next year there venture. But even if it leaves some- That makes a strong case for Even the royalties the partner- shaping of its strategy toward the by more than one-third. Going alone thing on the table—a few hundred P&G to borrow to keep buying backship generates for technology used market, which once was unapproach- means Honda can keep building on million dollars—it would be only a shares. J.P. Morgan analyst Johnin the Hero Honda bikes aren’t terri- able without a local partner. this base without worrying about minor setback for a company sitting Faucher says P&G bought more thanbly significant because the technol- Honda already makes and sells tip-toeing around its partner. on more than $15 billion in cash. $2 billion worth of shares in each ofogy is old. Hero says it paid Honda bikes and scooters under its own This break-up will be harder on Honda’s guidance on this issue the first two calendar quarters and$90 million last year. Anyway, Honda brand in India, holding about 14% of Hero, which could lose access to has been less than stellar, but losing more than $3 billion in the thirdis likely to keep collecting the royal- the market by units sold, according Honda’s technology and brand name. the sidecar in India is a smart thing quarter.ties for some time. to J.D. Power & Associates data. So all eyes are on the price Honda to do. —James Simms The catch is that shareholders could benefit at the expense of bondholders. Even a company withFor stock investors, a shortcut to big returns high capacity for additional debt would see its bonds suffer if it takes on extra leverage. Take Microsoft, which had $33 billion in net cash on For a winning investment strat- funds are scouting for stocks to sell high valuation aren’t the only con- buy popularly shorted technology Sept. 30. That includes $4.75 billionegy, this year it has paid to bet short, good ideas are hard to come siderations when betting against a stocks, including data-center compa- of bonds the software company soldagainst the smartest guys in the by. stock. Another key is liquidity. If the nies Rackspace Hosting and Savvis, in late September with the purposeroom. Recall that to sell a stock short, number of shares borrowed by short website OpenTable and prepaid- of funding dividends or buybacks. Had an investor bought the 50 an investor sells shares borrowed sellers is higher than average daily debit-card company Green Dot. Yet Barclays Capital says insurancemost popularly shorted stocks at from another investor. The hope is trading volume, it could take multi- Year-to-date, they are up 100% on on Microsoft’s debt became morethe beginning of the year and held to buy them back, for return to the ple days for them to buy back average. expensive after the bond sale andthem through Friday, he would have original owner, after the price falls. shares to cover bets. Indeed, for the Solid fundamental analysis is par- remains costly even as a benchmarkearned an average return of 22%, in- But popular picks are often piled top 50 mentioned above, shorts amount when betting against any for such insurance has declined.cluding dividends, according to into, creating pent-up buying pres- would have had to buy all shares company. At the same time, hedge While the financial system isFactSet. That is nearly double the sure that can cause otherwise bad traded over an average 38-day pe- funds must beware crowded trades, flush with cheap cash, even more ofS&P 500’s 12% total return. stocks to appreciate rapidly. riod to close their positions. lest they get caught in the exit. the benefits should flow to equity One reason: Since so many hedge After all, a troubled business and Lately, a smart trade has been to —Rolfe Winkler investors. —John Jannarone Your comprehensive resource for sharp analysis and insight into what’s making news on the Korean peninsula. Covering the G-20 and the hottest topics of the day in business, economics, politics, culture and lifestyle. In English at asia.WSJ.com/korearealtime In Korean at realtime.WSJ.com/korea Join the conversation today.
Tuesday, December 7, 2010 THE WALL STREET JOURNAL. 35 MARKETS LINEUPMoving the Asian index movers…markets Nikkei Stock Average Hang Seng Straits-Times CBN 600At right, Japan’s benchmark stock index and Japan 10167.23 Hong Kong 23237.69 Singapore 3181.41 China 27073.04the biggest movers among the larger Asianstocks indexes and stocks Monday. Below t 0.11% or 11.07 t 0.36% or 82.81 s 0.28% or 8.97 t 0.18% or 47.66each index are its most actively traded stocks.The charts show the percentage change in Exporters declined on a firmer yen, while Banks and property stocks fell amid a focus City Developments rose 2.6%, recovering Property plays fell on a China Securitieseach index’s or stock’s value, rather than the steel and other commodity-linked shares on China policy moves. Investors are await- losses made last week. Keppel continued to Journal report that China wants lenders topoint change, for purposes of comparison. The were lifted by Fed Chairman Ben Bernanke’s ing China’s Central Economic Work Confer- gain; it is expected to get orders from Bra- halt property loans to state-owned firms comments on TV. ence, which is usually in early December. zil’s Petrobras, and a broker called it a buy. whose core business isn’t in real estate.index level or stock price is indicated on eachaxis. All indexes and stocks are shown in localcurrency terms. 15000 30000 4500 45000 12500 25000 3750 37500 10000 20000 3000 30000 7500 15000 2250 22500 5000 10000 1500 15000 D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N WSJ.com D J F M A M J J A S O N 2010 2010 2010 2010 Follow the markets throughout the day, Volume Change Volume Change Volume Change Volume Change with updated stock quotes, news and Stock in millions Close Net % Stock in millions Close Net % Stock in millions Close Net % Stock in millions Close Net % commentary at WSJ.com. Hitachi 54.31 416 unch. 1.46 CCB 251.59 6.97 –0.13 –1.83 Genting Spore 88.00 2.10 unch. 0.48 HaitongSecs 166.18 10.73 0.65 6.45 Mizuho Financial 41.21 136 1 0.74 Bank Of China 248.72 4.12 –0.11 –2.60 Golden Agri 44.18 0.74 … … CiticSecurities 157.79 13.74 0.58 4.41 Also, receive emails that summarize 148.74 Nippon Steel 28.56 287 5 1.77 Icbc 227.93 5.90 –0.08 –1.34 Noble Grp 20.30 2.08 0.01 0.48 Everbright Bank 3.89 0.05 1.30 the day’s trading in Europe and Asia. 135.90 Mtshbsh Fin Grp 26.70 401 –1 –0.25 PetroChina 119.62 9.92 –0.01 –0.10 Sing Telecom 11.79 3.11 0.02 0.65 AgricBkofChina 2.66 380.00 … To sign up, go to WSJ.com/Email. Kobe Steel 23.00 203 6 3.05 ChinaPetroChem 102.24 7.15 –0.11 –1.52 CapitaLand 5.83 3.68 0.01 0.27 Zijin Mining 123.82 8.42 0.14 1.69Asian stocks in the newsKobe Steel Swire Pacific A Tambang Batubara Shinhan Financial Grp RHB CapitalJapan ¥203 Hong Kong HK$126.80 Indonesia 22,400 rupiah Korea 47,000 won Malaysia 8.6 ringgit s 3.0% or ¥6 s 3.6% or HK$4.40 s 3.9% or 850 rupiah s 5.0% or 2,250 won s 5.8% or 0.5 ringgitA report said the company will team up to The stock recovered from Fridays sharp fall. The coal producer benefited from buying by Company President Shin Sang-hoon, who has The stock outperformed a market wheredomestically produce titanium materials for foreign funds that drove Indonesian shares been suspended since September, will resign. sentiment was dashed by Friday/s weak U.S.aircraft. higher. jobs report.In yen 350 In Hong Kong dollars 200 In rupiah 37500 In won 80000 In ringgit 10 280 160 30000 64000 8 210 120 22500 48000 6 140 80 15000 32000 4 70 40 7500 16000 2D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N 2010 2010 2010 2010 2010Price-to-earnings ratio 13 Price-to-earnings ratio 6 Price-to-earnings ratio 27 Price-to-earnings ratio 3 Price-to-earnings ratio 13Earnings per share, past four quarters 16.10 Earnings per share, past four quarters 20.36 Earnings per share, past four quarters 820.01 Earnings per share, past four quarters 15044.61 Earnings per share, past four quarters 0.64Dividend yield 1.5 Dividend yield 2.5 Dividend yield 2.4 Dividend yield 0.9 Dividend yield 2.6 PERCENTAGE CHANGE PERCENTAGE CHANGE PERCENTAGE CHANGE PERCENTAGE CHANGE PERCENTAGE CHANGE Daily 1 wk. 52 wks Daily 1 wk. 52 wks Daily 1 wk. 52 wks Daily 1 wk. 52 wks Daily 1 wk. 52 wksBasic Resources 0.7% 4.6% 13.5% Indus Gds & Svcs 0.2% 3.8% 20.5% Basic Resources 0.7% 4.6% 13.5% Banks -0.4% 2.5% 4.3% Banks -0.4% 2.5% 4.3%Kobe Steel 3.0% 3.6% 23.0% Swire Pacific A 3.6% 8.3% 35.4% Tambang Batubara 3.9% 12.0% 27.3% Shinhan Financial Grp 5.0% 5.9% 1.0% RHB Capital 5.8% 7.9% 62.1%BOC Hong Kong (Hldgs) Hyundai Heavy Industries Canara Bank Sands China Ltd. Bank Negara IndonesiaHong Kong HK$26.50 Korea 351,500 won India 694.05 rupee Hong Kong HK$16.32 Indonesia 4,300 rupiah t 4.2% or HK$1.15 t 4.5% or 16,500 won t 4.8% or 34.65 rupee t 5.0% or HK$0.86 t 8.5% or 400 rupiahBanks fell on continued worries about possible Shipbuilders fell on worries that new The Financial Chronicle said the bank plans a The Macau government rejected its request The stock gave back much of the gains madetightening measures in China. accounting rules could hurt what’s reported on share sale; bank officials aren’t commenting. for a plot of land in the Cotai area. last week ahead of a rights issue later this the bottom line. month.In Hong Kong dollars 40 In won 500000 In rupee 1000 In Hong Kong dollars 20 In rupiah 5000 32 400000 800 16 4000 24 300000 600 12 3000 16 200000 400 8 2000 8 100000 200 4 1000D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N 2010 2010 2010 2010 2010Price-to-earnings ratio 20 Price-to-earnings ratio 6 Price-to-earnings ratio 8 Price-to-earnings ratio 32 Price-to-earnings ratio 19Earnings per share, past four quarters 1.35 Earnings per share, past four quarters 56379.23 Earnings per share, past four quarters 87.24 Earnings per share, past four quarters 0.51 Earnings per share, past four quarters 222.40Dividend yield 3.7 Dividend yield 1.0 Dividend yield 1.4 Dividend yield None Dividend yield 1.3 PERCENTAGE CHANGE PERCENTAGE CHANGE PERCENTAGE CHANGE PERCENTAGE CHANGE PERCENTAGE CHANGE Daily 1 wk. 52 wks Daily 1 wk. 52 wks Daily 1 wk. 52 wks Daily 1 wk. 52 wks Daily 1 wk. 52 wksBanks -0.4% 2.5% 4.3% Indus Gds & Svcs 0.2% 3.8% 20.5% Banks -0.4% 2.5% 4.3% Travel & Leisure -0.2% 2.1% 15.2% Banks -0.4% 2.5% 4.3%BOC Hong Kong (Hldgs) -4.2% -0.9% 42.2% Hyundai Heavy Industries -4.5% -3.8% 116.3% Canara Bank -4.8% -2.2% 74.0% Sands China Ltd. -5.0% -5.4% 62.2% Bank Negara Indonesia -8.5% 12.0% 129.1%