As of 11 a.m. ET DJIA 11525.25 À 0.41% FTSE 100 5951.80 À 1.02% Nikkei 225 10370.53 À 1.51% Shanghai Comp. 2904.11 À 1.79% Hang Seng 22993.86 À 1.57% Sensex 20060.32 À 0.86% S&P/ASX 200 4771.86 À 0.74% OPINION: China’s new U.S. cracks down on China listings row with BUSINESS & FINANCE Page 17 the VaticanKKDN PPS 648/11/2010 (028507) Malaysia: RM6.00, Pakistan: Rs140.00, Philippines: Peso80.00, Singapore: S$4.00(Incl GST), Sri Lanka: Slrs180(Incl VAT), Taiwan: NT$60.00, Thailand: Baht50.00, Vietnam: US$2.50 Australia: A$6.00(Incl GST), Brunei: B$7.00, China: RMB25.00, Hong Kong: HK$18.00, India: Rs25.00, Indonesia: Rp18,000(Incl PPN), Japan: Yen500(Incl JCT), Korea: Won2,500, Page 11KKDN PP 9315/10/2010 (025811) VO L . X X X V N O. 8 1 * * Wednesday, December 22, 2010 ASIA (India facsimile Vol. 2 No. 142) asia.WSJ.com Russia signs Pricey onions cause tears in India KoreansMICA (P) NO. 164/10/2010 less keen several pacts to humorSK. MENPEN R.I. NO: 01/SK/MENPEN/SCJJ/1998 TGL. 4 SEPT 1998 with India the North BY EVAN RAMSTAD BY TOM WRIGHT In return, New Delhi wants better access to Russia’s oil SEOUL—South Korea NEW DELHI—India and and gas industry, and support called North Korea’s bluff by Russia signed a number of for its bid for a permanent staging a military drill in the economic and defense agree- seat on the U.N. Security face of threats this week, but ments, as Moscow moved to Council. The latter effort South Koreans are now more shore up its relationship with could take years and faces un- wary about their belligerent New Delhi, an old ally that certain prospects, but India’s neighbor and less willing to also has been courted in re- pursuit of permanent mem- tolerate the North’s fits of ag- cent months by the U.S., U.K., bership underscores its global gression. France and China. ambitions. South Korea’s military re- President Dmitry Medve- Mr. Medvedev on Tuesday mained on high alert Tuesday dev arrived in India for two offered an endorsement of In- for another attack by North days of talks, making him the dia’s U.N. ambitions. “Russia Korea, even after Pyongyang fifth and final leader from a considers India a strong and backed off threats it made nation with a permanent seat deserving candidate to have a over the South’s artillery test on the United Nations Secu- permanent seat on the United Monday. rity Council to visit the South Nations Security Council,” he A few residents of the is- Asian country in 2010. said in a joint news confer- land where the drill occurred, Moscow is eager to boost ence with Indian Prime Minis- called Yeonpyeong, returned its trade with India—the ter Manmohan Singh. home for the first time since world’s No. 2 fastest-growing U.S. President Barack the North’s Nov. 23 attack, major economy after Obama also backed India for a which happened after a previ- China—especially through ex- permanent seat during his ous artillery drill. Two ma- panded exports of defense trip to India in November. rines and two civilians died in and nuclear equipment. Rus- China’s Premier Wen Jiabao, the attack. sia’s two-way trade with India in India last week, said only Even so, one of the linger- totaled $4.6 billion in the year that Beijing understands In- ing effects of the attack and Reuters to March 31, a decline of 16% dia’s desire to play a bigger Please turn to page 16 from the prior year and only a role at the U.N., including on A worker packs onions in Chandigarh in northern India on Tuesday. Indian regulators said they tenth of China’s bilateral the Security Council. believe skyrocketing prices for onions—seen as a bellwether for general inflation—should ease after China asks for damages from trade with India. Please turn to page 16 the federal government this week suspended onion exports until Jan. 15. See india.WSJ.com. Seoul in fishing clash ........... 16 Hong Kong housing may be cooling BY ALICE TRUONG by an influx of so-called hot developer has sold only 25 money from China—specula- more flats. Cheung Kong de- HONG KONG—Signs are tive capital that evades Chi- Steep rise clined to comment. mounting that government nese regulators, who keep Price index for all residential “Cheung Kong has a his- measures aimed at taking the tight controls on the currency. properties in Hong Kong tory of clearing the entire de- speculative heat out of Hong Property prices in Hong 160 velopment within weeks of its Kong’s residential-property Kong have surged in response, launch,” says Paul Louie, an market are pushing some buy- especially in the luxury sector. 150 analyst at Nomura Holdings. ers to the sidelines, hitting Home prices rose 15% through 140 “This was not in character sales of some big new proj- September, after a 30% jump with what they usually do.” ects. in 2009, according to official 130 Similarly, Swire Proper- The government’s moves data. Data showing the impact 120 ties has seen a slowdown in to combat surging home of the new measures aren’t sales for its high-end residen- prices, including hefty taxes yet available, but a dropoff in 110 tial project Azura in the Mid- for selling an apartment activity is already apparent at 100 Levels district of Hong Kong within two years of its pur- some projects being sold. 2009 ’10 island. The development, chase, took effect a month That includes Festival City Note: August through October 2010 which launched Nov. 20 and ago. The measures, the latest II in the Tai Wai section of ﬁgures are provisional. saw one apartment fetch 58 Source: Hong Kong Census and in a series of market-cooling Hong Kong’s New Territo- Statistics Department million Hong Kong dollars moves, came after the Inter- ries—one of the largest resi- (US$7.5 million), sold 28 of its national Monetary Fund in dential developments first batch of 51 units within November urged the govern- launched in the autumn. Peo- Cheung Kong Holdings Ltd., the first two days, according ment to take action if asset- ple in the market are taking sold 216 of its 1,386 units to Swire’s records, but has price inflation continued, their time, says property con- when sales began Nov. 19, the sold only three since. Swire warning that it saw increasing sultant Jay Leung: “They’re day before the cooling mea- declined to comment on its risk of a property bubble in stopping to think” before sures took effect, according to sales. Hong Kong. The curbs were making a purchase. Credit Suisse. Since then, Since the cooling measures also prompted in large part Festival City II’s developer, Credit Suisse estimates the Please turn to page 29
2 * * THE WALL STREET JOURNAL. Wednesday, December 22, 2010 PAGE TWO What’s News— Inside i i i Business & Financen New York’s attorney generalfiled a suit against Ernst & Young,accusing the accounting firm ofhelping Lehman hide its financialweakness from investors for aboutseven years before the investmentbank collapsed in 2008. 17n U.S. stocks rose as news thatCanada’s Toronto Dominion willbuy Chrysler Financial led to hopefor more financial-sector take-overs. Auto shares rose in Asia as Business & Finance:Korean tensions eased. 25 Toshiba wants backn The U.K. government said Busi- its 3-D advantage. 18ness Secretary Vince Cable wouldplay no part in a key regulatorydecision regarding Rupert Mur-doch’s News Corp. amid a politicalfirestorm that erupted when hewas caught saying he had “de-clared war” on Murdoch. 20n Philippine Finance SecretaryPurisima said Filipinos need toprepare for a long period of U.S.dollar weakness by starting newbusinesses to spur the economy. 4n The SEC is cracking down on Xinhua/Zuma PressChinese firms that use mergers Technology: Googlewith dormant shell companies toobtain listings in the U.S. 17 Chrome OS makes push into cloud. 9n The U.S. slapped Toyota with China said it will raise gasoline and diesel prices by 3.8% and 4%, respectively, beginning Wednesday in the face of rising$32.425 million in civil penalties crude-oil prices, despite persistent worries about inflation. The increase marks the second in nearly two months. Above, afor failing to properly disclose woman refuels a vehicle at a gas station in Linyi, in Shandong province. Page 4what it knew about safety defectslinked to recalls. Separately, Toy- n China said it supports measures for new listings on the small-cap n Iraq’s parliament officially ap-ota is targeting vehicle sales taken by the EU and IMF to bail Mothers market. 22 proved a second term for Malikigrowth of 3% next year. 17, 20 out certain European countries and his partial cabinet line-up, and stabilize financial markets. 4 n Volkswagen signed a pact with ending a political impasse thatn Moody’s said it may lower Por- DRB-Hicom to assemble vehicles stretched for nearly 10 months.tugal’s credit rating by as much as n European regulators relaxed in Malaysia. 20two notches, adding that the euro tight inspection rules covering n China demanded compensationzone as a whole “retains signifi- Rolls-Royce engines on Airbus n State Grid Corp. of China will from South Korea over a recentcant financial strength.” 6 A380 superjumbo jets. 19 pay nearly $1 billion to buy seven clash in the Yellow Sea. 16 Brazilian power distributors, then The Fed is renewing a pact n Lend Lease agreed to buy Vale- latest bet by a Chinese company n Thailand will lift a state ofwith the ECB and other central mus Australia from Bilfinger on South American growth. 18 emergency Wednesday that wasbanks to lend them dollars as the Berger for $957 million. 20 imposed in April when protesters In Depth: Odds skewcost of swapping euros into the i i i overran Bangkok, but it will retainU.S. currency rises in Europe. 22 n Satyam will seek to list again World-Wide broad powers to detain suspects against investors in on the NYSE after filing its results and impose order. life insurance. 14n The BOJ governor pledged to based on U.S. accounting stan- n Australia’s severe weatherwatch for any impact of climbing dards. 19 could be a drag on economic n A suspicious package wasbond yields on Japan’s economy, growth, as the worst floods in 20 found in a subway car in Rome,as the central bank kept its mone- n Tokyo’s stock exchange will years ravage crops and disrupt prompting a scare, but the city’stary policy unchanged. 5 speed up the screening process mining across the country. 3 mayor said the device was a fake. ONLINE TODAYMost read in Asia Exchange Korea Real Time Scene Asia blogs.wsj.com/exchange blogs.wsj.com/scene Global fund Vote for your favorite managers plan to luxury abode from Heard on the Street: increase allocations among the top eight Hyundai Motor needs to Chinese equities ‘Home of the Week’ to refocus. 301. North Korea Backs Down, HoldsIts Fire next year. features. THE WALL STREET JOURNAL ASIA2. Opinion: FCC’s Threat to According to a poll by CLSA Asia- Dow Jones Publishing Company (Asia)Internet Freedom Pacific Markets 25/F, Central Plaza, 18 Harbour Road, Hong Kong Tel 852-2573 7121 Fax 852-2834 52913. Your Apps Are Watching You www.wsj-asia.com4. In China, Cars on a Budget SUBSCRIPTIONS and Address Changes, please5. 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Wednesday, December 22, 2010 THE WALL STREET JOURNAL. 3 WORLD NEWSAustralia’s rains threaten growth Australia’s economy is riding wheat with domestic consumption dustry economist at Australia &high on the mining boom, but se- of only about seven million tons, New Zealand Banking Group Ltd.,vere weather could be an unfore- leaving the remainder typically Wetter than expected who said she fears the nation’s eco-seen drag on growth, as the worst available for exports. Australia’s total rainfall in December nomic growth could be crimped byfloods in 20 years ravage crops and The heavy rains also have dis- the flooding in the December quar-disrupt mining across the country. rupted the sugar-cane harvest, driv- Rainfall ter. ing raw sugar output down 20%, ac- 600 mm The severe flooding is affecting By Rebecca Thurlow in cording to government estimates. Pilbara region coal mining in central Queensland. 400 Sydney and Ray Brindal in Australia is the third-largest ex- Several miners in the region have Canberra porter of sugar after Brazil and 300 called force majeure—or unavoid- Thailand. 200 able failure to meet an obliga- Authorities have declared natu- The September-to-November pe- tion—on deliveries because ofral-disaster zones in more than 100 riod was the wettest ever recorded, 100 floods, and the inability of miners toregions across five states, as flood- and above-average rainfall has con- 50 produce coal is depleting stockpiles,ing over the past three weeks has tinued into December, according to according to Greg Smith, general 25brought a dramatic end to a decade- the Bureau of Meteorology. The manager, operations, at Dalrymplelong drought in some areas. The ter- rainfall is associated with the 10 Bay Coal Terminal, one of the big-ritory hardest hit is prime agricul- weather pattern in the Pacific Basin gest coal ports in the world. “The 5tural land in the Murray-Darling ba- known as La Niña that is conversely Murray Darling Basin mine supply problem is the biggestsin, which spans parts of helping create a drought hitting 1 issue,” said Mr. Smith, adding thatQueensland, New South Wales and farmers in parts of New Zealand. 0 one area in the port’s hinterland re-Victoria states, covering an area Weather woes such as the cur- ceived 210 millimeters, or 8.4bigger than Germany. rent disturbance in Australia con- Source: Australia’s Bureau of Meteorology inches, of rainfall in four hours on Rain damage will result in about tinue to present a risk to global food Sunday. “A lot of these mines arehalf of Australia’s estimated 24-mil- supply. The past year has been one open pits, which become openlion-metric-ton wheat crop being of extremes for agriculture markets, and saw the country ban exports for largest grains exporters propelling swimming pools.”classified as suitable for livestock roiled by droughts, floods and unex- the year in a bid to curb food infla- prices higher and hurting trade The flooding has helped drive upfeed or downgraded this year, at a pected weather patterns playing tion as prices soared. A similar pic- flows around the world. coal prices. Prices are at their high-cost of nearly US$1 billion, National havoc with crop seasons. The hot- ture was seen in neighboring The rains are “certainly going to est level since late 2008.Australia Bank Ltd. estimates. Aus- test summer in 130 years plunged Ukraine, with the effect of reduced have an effect on a range of indus- —David Fickling in Sydneytralia is a major global supplier of Russia’s grains sector into turmoil supplies from two of the world’s tries,” said Julie Toth, a senior in- contributed to this article.
4 THE WALL STREET JOURNAL. Wednesday, December 22, 2010 WORLD NEWS: ASIAPhilippines plans for weak dollarBY JAMES HOOKWAY rencies, which now translate into fewer pesos than they used to. MANILA—Philippine Finance Stronger peso However, Mr. Purisima said aSecretary Cesar Purisima said that How many Philippine pesos one stronger peso also is reducing infla- Cesar Purisima,Filipinos need to prepare for a pro- dollar buys tion and interest rates, potentially Philippineslonged period of U.S. dollar weak- making it easier for Filipinos to es- 48 secretary ofness by taking advantage of lower tablish new businesses. “People ﬁnanceinflation and interest rates to start should try to become more entre-new businesses that will help drive 46 preneurial, and the department ofthe economy and lead to less reli- finance is working with other gov-ance on remittances from overseas ernment agencies to encourage that.workers. 44 In the future, if we are to sustain In an interview on Tuesday, Mr. growth, we need to find ways toPurisima said the country is trying help people do more here because 42to reduce its dependence on foreign- we can’t rely on remittances for-denominated debt and will continue ever.”recent efforts to replace it with Phil- 40 Still, remittances have affordedippine peso bonds. the Philippines a degree of comfort. 2010 Mr. Purisima said the Philippines Many of its overseas workers are Sources: Thomson Reuters via WSJ Marketis looking again to issue peso-de- Data Group; Bloomberg News (photo) employed in areas relatively resil-nominated bonds “in the next few ient to the impact of global eco-weeks” to finance the government’s nomic shocks, such as education and2011 budget. largest issuer of sovereign debt, also countries seeing strong currency sos. health care. In 2009, the country’s Refinancing the Philippines’ debt saw Standard & Poor’s upgrade its fluctuations this year, as investors “We have to be honest about the 10 million or so overseas workersin pesos potentially provides the ratings on the country’s sovereign have moved out of dollar-denomi- consequences of that and educate sent back about $18 billion, roughlyeconomy with a greater degree of debt to double-B from double-B-mi- nated assets and into Asian markets. people about what’s going on,” said 5% more than sent in 2008. In thestability and protects it from for- nus in November. While tensions on the Korean penin- Mr. Purisima, who became finance first 10 months of this year remit-eign-exchange risk. “We are seeing a fundamental sula and worries about the stability minister six months ago after the tances, were up 8%, to $15.46 bil- National Treasurer Robert Tan, shift in the global economy,” Mr. of countries on the periphery of the election of Benigno Aquino III as lion, compared with last year’s pe-meanwhile, said at least five inter- Purisima said in a telephone inter- euro zone have shored up the dollar president. riod.national banks have offered to un- view from Singapore. “The opportu- in recent weeks, many economists Remittances from overseas Mr. Purisima said the Philippinedertake the fund raising for a peso nities in Asia, where we are, are go- expect a steady appreciation in the workers drive a large proportion of government’s finances also shouldglobal bond after an initial peso ing to be greater, and the money is value of the peso to continue household spending in the Philip- provide fresh comfort for investorsbond in September raised $1 billion flowing our way. We’ll try to take through 2011, with some expecting pines, but much of the money Filipi- and entrepreneurs after the countryand attracted demand of around advantage of it.” it to reach 40 pesos to the dollar, nos send home is earned in euros, in posted its second consecutive$13.5 billion. The Philippines, Asia’s The Philippines is one of several compared with Tuesday’s 44.20 pe- U.S. dollars or in dollar-pegged cur- monthly budget surplus.China raises fuel prices as inflation looms BEIJING—China will raise gaso- China has taken steps in recent mula when it might have meant ma- increase until now and has also con- prices, on Oct. 26, benchmark Newline and diesel prices by 3.8% and weeks to curb inflation, including jor price increases. trolled the magnitude of the price York Mercantile Exchange light,4% respectively beginning Wednes- price controls, lending limits and in- China will raise gasoline and die- increase due to inflation and fuel- sweet crude futures were aroundday in the face of rising crude-oil creased bank reserve requirements. sel prices by 310 yuan and 300 yuan supply issues, it said without elabo- $83 a barrel, compared with just un-prices, despite persistent worries Officials hope to bring the economy ($46.53 and $45.02) a metric ton, ration. It said it expects China’s reli- der $90 Tuesday.about inflation. in for a soft landing after spending the commission said. That repre- ance on petroleum imports to be at China took a series of measures The increase—announced late billions on stimulus measures to sents a gasoline price increase of nearly 55% in 2010. in November to rein in the prices ofTuesday by China’s National Devel- spur growth during the global eco- 0.23 yuan a liter, or about 13.1 U.S. China will continue to subsidize agricultural commodities, includingopment and Reform Commission, nomic slows. China’s fuel-price rise cents a gallon. Diesel will rise by farmers, the fishery, forestry and price controls and releasing statethe nations economic planning will add to 0.07% of a sequential in- 0.26 yuan a liter, or 14.8 cents a gal- public transportation, the commis- reserves of some goods. China’s cen-body—marks the second increase in crease in consumer price index in lon. The price applies to what’s sion said. It won’t raise prices of ur- tral bank has raised banks’ reservenearly two months. It also comes af- December, the commission said. known as ex-factory production—ac- ban and rural public transportation, requirement ratio six time this year,ter China posted a 5.1% rise in con- Beijing controls fuel prices using tual retail prices at the pump vary including buses, train and air trans- indicating rising concern about in-sumer prices in November, the big- a basket of international crude by region and market. port after the price increase, it said. flation and excess liquidity.gest rise since July 2008. types but has veered from the for- The commission postponed the When China last adjusted fuel —Wan Xu and Liu LiBeijing backs EU bailouts, voices caution on effectsBY OWEN FLETCHER Last week, EU leaders met inAND AARON BACK Crucial partners | EU’s trade with China Brussels and agreed to replace the region’s emergency rescue fund, BEIJING—Chinese Vice Premier Exports to China Imports from China which expires in 2013, with a per-Wang Qishan said China supports manent crisis-finance program, inthe measures taken by the European €250 billion the latest move to rescue euro-zoneUnion and International Monetary countries facing debt crises.Fund to bail out certain European 200 While both Chinese and EU offi-countries and stabilize the financial cials lauded the benefits of closermarkets. 150 economic cooperation Tuesday, they Speaking at the third EU-China also aired complaints about each 100High Level Economic and Trade Dia- other’s trade practices.logue on Tuesday, Mr. Wang said 50 Mr. Chen said there has been anChina hopes the effects of the EU’s “obvious” rise in EU trade remedymeasures to address the euro-zone 0 actions against China this year.debt crisis become apparent quickly. 2000 ’01 ’02 ’03 ’04 ’05 ’06 ’07 ’08 ’09 ’10 Some Chinese companies have suf- Mr. Wang’s statement is the lat- 1H fered considerable losses from suchest by China’s leaders over the past Sources: Eurostat; Bloomberg News (photo) actions, which aren’t beneficial toyear expressing support for mea- economic ties, he said.sures taken to address the euro- Joaquin Almunia, the Europeanzone crisis. Commission vice president in charge The comments gave the euro of competition policy, said Europe’spositive momentum in currency Wang Qishan, exports to China have been risingmarkets during the Asia day, though Chinas vice premier recently due to fast economicthe currency later fell after ratings growth in China, not recent weak-firm Moody’s Investors Service ness in the euro exchange rate.warned of a possible debt down- and whether they will be effective. ter the EU-China meeting. He added sioner for economic and monetary Mr. Chen singled out one partic-grade to Portugal. “We are paying close attention that China will pay attention to affairs, said Europe welcomes ular European trade case for criti- But Chinese Commerce Minister to whether Europe’s debt crisis can “whether Europe’s consensus on China’s support for its measures. He cism, saying he hopes an EU investi-Chen Deming sounded a note of cau- be controlled, and especially what sovereign debt and risk prevention added that Europe’s economic situa- gation into Chinese-made wirelesstion, saying China is closely observ- will happen in the first quarter next can be turned into practical action.” tion is improving even as market modems can be terminated as sooning the actions that Europe is taking year,” Mr. Chen said at a briefing af- Olli Rehn, European commis- conditions remain volatile. as possible.
Wednesday, December 22, 2010 THE WALL STREET JOURNAL. 5 WORLD NEWS: ASIAJapan tweaks visa policyfor medical tourists BOJ to watch impact To cash in on its high-qualitybut expensive medical industry,Japan will ease visa requirementsto encourage wealthy travelers their grown-up children in Tokyo into the present day. Although the cast has yet to be finalized, the film—which has the of rising bond yieldsseeking medical treatment. working title “Tokyo Family”—will BY MEGUMI FUJIKAWA policy on the JGB yield curve. side risks to the economy are still The government will loosen be directed by veteran filmmaker The BOJ’s policy board voted almost balanced. The central bankvisa requirements in January that Yoji Yamada, who once worked TOKYO—The Bank of Japan gov- unanimously at the end of a two-day also kept its assessment of thewould allow patients to receive with Mr. Ozu and whose most ernor pledged to keep a close eye on meeting to leave the unsecured broad economy unchanged in De-renewable, multiple-entry, half- recent film was a remake of Kon the possible impact of recently overnight call loan rate in a cember, saying it “shows signs of ayear visas, lengthening the Ichikawa’s award-winning 1960 climbing bond yields on Japan’s 0.0%-0.1% range, as it is still exam- moderate recovery, but the recoverycurrent single-entry visa by about feature “Ototo.” Production is due fragile economic recovery. ining the impact of its previous seems to be pausing.”three months, according to a to start in the spring, with release Gov. Masaaki Shirakawa spoke measures. The Nikkei Stock Average fin-statement. The program would scheduled for early 2012, the Tuesday after the bank’s policy “The bank will continue to care- ished the day 1.5% higher atmake Japan a more competitive company said. board decided to keep its super-easy fully examine the outlook for eco- 10370.53—posting the sharpest one-destination for ailing patients, It is difficult to see how even monetary policy unchanged, follow- nomic activity and prices, and take day percentage gain for the indexwho have been turned off by the someone like Mr. Yamada can ing its recent moves designed to policy action in an appropriate man- since Dec. 2.country’s strict improve on a help stimulate lending and reduce ner,” the BOJ said in a statement re- Meanwhile, Tuesday’s widely ex-rules in favor of film that is deflationary pressures. leased with the rate decision. pected decision came partly as theneighbors like considered “Changes in long-term yields To forestall downside risks to foreign-exchange market, a statedSouth Korea great by film could affect economic, price, as well the economy, the BOJ in early Octo- area of concern, has been relativelyand Singapore buffs. The as financial conditions by increasing ber introduced monetary easing that stable with the dollar now aroundthat have fewer decision to companies’ and households’ fund- included a new five trillion yen 83.65 yen, rising from a low of 80.21visa constraints. update the story raising costs and weighing on prof- ($59.71 billion) asset-buying pro- yen on Nov. 1. The program may offer some its of financial firms, which have gram, as well as a rate cut to the “There remain various uncertain-is one of the hint of what to large holdings in government near-zero range, from 0.1% previ- ties over the prospects of the U.S.Democratic expect. bonds,” Mr. Shirakawa said at a ously. economy, but compared with a pe-Party of Japan’s growth In the early 1950s Japan was news conference. However, analysts are skeptical riod around the summer when astrategies. just beginning its dizzying rise to The BOJ chief said he believes whether increases in Japanese sense of pessimism over the U.S. The new visa will also allow prosperity, and Mr. Ozu’s gentle that recent rises in Japanese yields yields alone will prompt any imme- economy was strengthening, peoplefamily and nonfamily to but heartbreak-ing depiction of largely reflect similar moves in U.S. diate action by the central bank. are now becoming a bit more opti-accompany the patients. people too preoccupied with their Treasurys on the back of new opti- Even considering the recent JGB mistic,” Mr. Shirakawa said. —Yoree Koh own lives to look after aging mism over the U.S. economy. yield rises, the BOJ is unlikely to “And in reflection of that, inves- parents showed how traditional The yield on two-year Japanese take additional easing steps since tors’ risk aversion has...probablyApple Magic: Softbank’s Son family ties were transformed by government bonds jumped to as the recent yield moves “aren’t exert- been weakening,” easing demand forvoted 2010 best leader; the country’s headlong rush into high as 0.235% in mid-December, ing downward pressure on the econ- the Japanese currency as a haven,Jobs chosen as fourth the future. Fast-forward nearly 60 compared with around 0.1% in early omy,” said Kiichi Murashima, an he added. Masayoshi Son, the founder of years and Japan is a very different October, when the BOJ introduced a economist at Citigroup Global Mar- —Takashi Nakamichi,Softbank Corp., was chosen as the place. The bursting of the drastic easing package. The two- kets Japan. Takashi Mochizukibest company president this year, economic bubble in the early year bonds are considered most Indeed, the BOJ governor main- and Kazuhiro Shimamuraaccording to a survey released by 1990s caused two “lost” decades sensitive to changes in monetary tains a view that upside and down- contributed to this article.Sanno Institute of Management. of stagnant growth and Mr. Son received 23% of the deflation—a turbulent period thattotal votes cast by more than 400 has also cast doubt on the basiccorporate executives, earning him assumptions of the previous era.the top spot. Mr. Son jumped from Rising unemployment, lowerthird place to dethrone Fast job security, stagnant incomes andRetailing Co. Chairman and a lack of new, stable jobs forPresident Tadashi Yanai. Survey graduates have weakened therespondents admired Mr. Son for foundations of Japanese societyhis business savvy as Softbank, upon which much of the country’sJapan’s third-largest mobile postwar growth was built. It willcarrier by subscriptions, racked be interesting to see if the elderlyup subscriptions through sales of couple encounters this new JapanApple Inc.’s iPhone and iPad. in “Tokyo Family.” The fanfare for the Apple toys If the pair come up against thedidn’t go unnoticed by survey same neglect and indifferencerespondents. Apple’s Steve Jobs from their offspring in “Tokyowas voted the fourth best leader Family,” they can always cut theirin 2010, becoming the first from losses and hop on a bullet train,an overseas company to break the back to their picturesque seasidetop 10. —Yoree Koh home in a little over four hours. In Mr. Ozu’s film, the journeyShochiku to remake takes the best part of two days.‘Tokyo Story’ film classic —Andrew Joyce Japanese film producerShochiku Co., said it plans to Keep up on Japan minute byremake Yasujiro Ozu’s 1953 classic minute with The Wall Street“Tokyo Story” by bringing the tale Journal’s Japan Real Time atof an elderly couple’s trip to see http://blogs.wsj.com/japanrealtime Shochiku / The Kobal Collection/Agence France-PresseThe 1953 classic ‘Tokyo Story’ is being remade and updated.
6 THE WALL STREET JOURNAL. Wednesday, December 22, 2010 WORLD NEWS Moody’s warnsIran halts some Afghan fuel on PortugalBY MARIA ABI-HABIB credit rating, KABUL—Iran is preventingnearly 2,000 fuel tanker trucks from knocking eurocrossing into Afghanistan, claimingtheir load would supply U.S.-led co- SINGAPORE—Moody’s Investorsalition forces, Afghan officials say. Service warned it may lower Portu- The unannounced border block- gal’s credit rating by as many as twoade, which has entered its third notches, dealing another blow to in-week, threatens to push up fuel vestor confidence in the euro zone.prices ahead of Afghanistan’s severewinter, depriving the Kabul govern- By Arran Scott,ment of millions of dollars in cus- Jonathan Housetoms revenue, these officials say. and Alex MacDonald About 30% of Afghanistan’s fuelimports come through its western The warning on Tuesday came Agence France-Presse/Getty Imagesborder with Iran, according to the less than a week after the ratingscountry’s commerce ministry. The agency said it may downgrade itsAfghan government says all of these ratings on Spanish governmentimports are for civilian use. debt. Asked whether some of its fuel The warning also came as Primecomes through the Iranian border, Minister José Sócrates said he wasthe U.S.-led coalition said it “does “very satisfied” with the govern-not discuss which supply routes ment’s latest budget figures, which[are] used and the status of logisti- showed the central government def-cal operations for security reasons.” Trucks and tankers carrying supplies for NATO forces in Afghanistan cross into the country along the Pakistan border. icit narrowing for the first time thisThe bulk of the coalition’s fuel is year.shipped from the former Soviet re- rely on fuel from Iran,” said Walid said Sharif Shairifi, Afghanistan’s ing the flow of supplies to Afghani- Moody’s added that the europublics in Central Asia, Western of- Tamim, the vice chairman of Dawi deputy minister of commerce. stan. In September, Pakistan shut zone “retains significant financialficials in Afghanistan say. Oil, which imports civil aviation fuel The Iranian Embassy in Kabul down the main border crossing with strength” and has the “resources, While Iran has generally good re- into Afghanistan. declined to immediately comment Afghanistan for several days, in re- incentives, and political cohesion”lations with Afghan President About 600 fuel tankers are stuck on the matter, and Iran’s mission to taliation for coalition aircraft violat- needed to contain the sovereign-Hamid Karzai, whose office says it on the Iranian border with Afghani- the United Nations in New York ing Pakistan airspace. The border debt crisis. “We believe that policyreceives a regular cash subsidy from stan’s southwestern Nimroz prov- didn’t respond to requests to com- was reopened after the coalition makers have sufficient resourcesTehran, the Iranian regime opposes ince, said Nimroz customs chief Il- ment. apologized. and will use them as necessary tothe presence of American troops in hamuddin Mazhar, and similar-size The U.S.-led coalition, which con- Mr. Tamim from Dawi Oil said restore financial stability,” the rat-the country. American officials have backlogs have built up on the bor- firmed the Iran blockade, said the his company often must find alter- ings agency said. It added that all ofrepeatedly said Iran helps fund and ders of the western Herat and Farah fuel-supply disruptions aren’t af- native routes because of unpredict- its euro-zone sovereign ratings witharm some insurgent groups operat- provinces. fecting its operations. able border operations, costing his the exception of Greece are invest-ing in Afghanistan. Millions of Af- Tehran never formally an- Mr. Shairifi said ordinary Af- business thousands of dollars. Dawi ment-grade, reflecting its view thatghans work in Iran, a more-prosper- nounced the border ban. But in pri- ghans could soon face fuel short- Oil imports most of its fuel through “the risk of a euro-zone sovereignous and developed country, and vate discussions with Afghan au- ages—just as temperatures drop be- Uzbekistan and Pakistan, but uses default is very small.”trade between the two is booming. thorities, Iranian officials have low the freezing point through the Iranian border as well. Moody’s statement on Portugal Afghan officials say the stranded claimed this fuel supplies the U.S.- much of the country. “The Afghan government needs knocked the euro. The common cur-fuel, which includes Iranian imports led coalition in Afghanistan, accord- Afghanistan is also losing mil- to work to keep borders open with rency fell against the U.S. dollar andand supplies transiting via Iran from ing to top Afghan government offi- lions of dollars in customs revenue regional governments through offi- the yen early in European trading,Iraq and Saudi Arabia, is used to cials. from the dispute. Nimroz province cial agreements,” Mr. Tamim said. having rallied in Asian trading afterheat ordinary Afghans’ homes, run Afghanistan, which said it con- alone has lost about $3.5 million in “My business is constantly affected China expressed support for thebusinesses and fly civilian aircraft. tacted the Iranian government at customs fees in the past two weeks by our neighbors closing their bor- euro-zone’s stabilization efforts. The “This is going to hurt all of Af- the start of the blockade, hasn’t yet and Farah and Herat provinces are ders whenever they want to.” euro was at $1.3117 in afternoonghanistan. We’re a landlocked coun- received an official response on equally affected, Mr. Mazhar said. —Arif Afzalzada trading, down from the day’s high oftry, and our businesses and people when fuel imports would resume, Iran isn’t the only country halt- contributed to this article. $1.3202. The yield spread between Portuguese 10-year governmentSpain showcases its budget strengths bonds and the benchmark German bund edged slightly higher. In putting Portugal’s A1 long- term and Prime-1 short-term gov- ernment bond ratings on review,BY THOMAS CATAN the regional as well as the central- and banks are facing growing bad central to the government’s efforts Moody’s cited uncertainties over theAND JONATHAN HOUSE government level, said Andrés Fu- debts. That, some fear, could force to slash its budget deficit. While it longer-term health of Portugal’s entes, economist at the Organiza- the government to aid the banks isn’t officially a federal country, economy. It also doubted Portugal’s MADRID—Spain said its regional tion for Economic Cooperation and and hurt its own finances. Spain has one of the most devolved ability to access capital markets at agovernments are on track to meet Development. “I think the country is “This is somewhat reassuring, power structures in Europe. sustainable price.their budget targets this year, its on course to achieve its budgetary but it’s unclear what lies under the Spanish regions have been “In Moody’s opinion, Portugal’slatest effort to quell investor fears target this year and also next year.” hood of some of the banks,” said largely shut out from international solvency is not in question,” saidthat it could be the next European But some said that Spain isn’t Nicholas Spiro, a London-based sov- credit markets for much of the year Anthony Thomas, Moody’s vicecountry to need a financial bailout. out of the woods yet. The biggest ereign-risk strategist. as a debt crisis roiled the 16-nation president and lead analyst for Por- Facing intense market pressure, spending items usually appear in To reassure investors, Spain’s bloc that uses the euro as currency. tugal. “But the likely deteriorationSpain for the first time opened its the final quarter of the year, and tax central bank is bringing forward That has forced many to turn to in debt affordability over the me-regions’ books before year-end in a revenues could drop further, imper- plans to open books of regional sav- more expensive and short-term dium term and ongoing concernsbid to address investor worries that iling the country’s budget numbers. ings banks, which were most ex- funding that could make their fi- about the economy’s ability to with-the regions’ deteriorating accounts Spain’s property prices are still posed to the country’s property nances worse. stand fiscal consolidation and pri-could derail the government’s aus- falling after the bursting of a 15- bubble and closely tied to regional Catalonia, Spain’s most economi- vate-sector deleveraging mean itsterity drive. The early peek showed year, credit-fueled property boom, governments. Spain’s regions are cally powerful region, was recently outlook may no longer be consistentregional spending to be largely un- forced to raise money from its own with an A1 rating.”der control, though some analysts residents through “patriotic bonds.” Portugal is paying “an elevatedcautioned that the biggest test of Chronic deﬁcits Other regions, such as Valencia, are price” to borrow in the capital mar-their finances still lies ahead. following its example. kets, “which if sustained will in- Spain’s regional and municipal governments often posted budget deﬁcits The average deficit across the 17 Such local retail bonds have sig- crease substantially its debt service even when the Spanish economy was booming. Budget balances as aregions was 1.24% of gross domestic nificant drawbacks, however. They costs over time,” Mr. Thomas said. percentage of GDPproduct at the close of the third are an expensive and short-term Still, Mr. Sócrates said the latestquarter, the Finance Ministry Central Government Regional Governments Municipal Governments way for regions to fund themselves budget figures showed the govern-said—comfortably within the 2.4% 2% and compete with banks for resi- ment’s spending-cuts regime wastarget for the full year. Two regions 0 dents’ savings. That could end up the right course of action.have breached their deficit ceiling. 0 hurting banks’ efforts to rebuild “These numbers will give confi-But the two jointly account for –0.1 –0.1 –0.2 their financial strength. dence to the markets that we are onabout 6% of the national economy. –2 Investors fear that in a worst- the right track” with the deficit-cut- On Tuesday, officials said the case scenario the central govern- ting plan, Mr. Sócrates said. “With –4central government budget deficit ment might have to bail out regional these numbers, [we demonstrateshrank by nearly half in the first –6 and municipal governments. that] we have the ability to ensureeleven months of the year, providing Moody’s, for example, said the cen- that the deficit will reach our targetfurther evidence the country’s ef- –8 tral government has “very powerful of 7.3%” of gross domestic productforts to close one of the euro zone’s incentives” to support the regions in 2010. Portugal’s budget deficit –10biggest funding gaps is on track. 2005 ’06 ’07 ’08 ’09 should they find themselves shut was equivalent to 9.3% of GDP in The regional figures show “sub- Source: Spanish Finance Ministry out of public and banking markets 2009, over three times the level setstantial progress” is being made at for an extended time. by European Union guidelines.
Wednesday, December 22, 2010 THE WALL STREET JOURNAL. 7
8 * * THE WALL STREET JOURNAL. Wednesday, December 22, 2010 WORLD NEWSNuclear treaty nears passage in U.S.BY NAFTALI BENDAVID to resume after being suspended a victory for Mr. Obama just weeks af- Ratification opponents say the said, other than a prohibition on us-AND JONATHAN WEISMAN year ago. ter his party was soundly defeated treaty has been rushed through the ing certain long-range missile A key development came Tues- in the midterm congressional elec- Senate in the waning hours of the launchers in a missile-defense sys- WASHINGTON—A new nuclear- day as Sen. Lamar Alexander (R., tions, and in advance of a new Con- lame-duck session, and that changes tem. But he said that option wasarms treaty with Russia appeared Tenn.) announced his support. As gress convening in which Republi- are needed to make sure the treaty “something that our military leadersheaded for ratification after three the Senate’s No. 3 Republican, his cans will hold a stronger hand. doesn’t limit U.S. plans for missile do not want to do’’ because of theadditional Republican senators an- decision could be seen as a green defense. Republican senators have expense.nounced their support Tuesday light for others in the GOP to sign also secured an agreement from the White House officials on Tuesdaymorning. on. Ratification of the pact would Obama administration to spend tens credited a new attitude on both The treaty, one of President Ba- Also Tuesday, Republican Sens. of billions of dollars to modernize ends of Pennsylvania Avenue for therack Obama’s top year-end priori- Johnny Isakson of Georgia and Rob- mark another victory for the U.S. nuclear arsenal. bipartisanship on New Start andties, has split the Senate GOP cau- ert Bennett of Utah announced their President Obama just weeks Senate Minority Leader Mitch other legislative matters in recentcus, with two top Republicans support, following decisions an- McConnell of Kentucky and the sec- weeks.opposing ratification. Now, as many nounced Monday evening by Sens. after his party was soundly ond-ranked leader, Jon Kyl of Ari- White House press secretaryas nine Republican senators have Scott Brown of Massachusetts and defeated in the midterm zona, are among those opposing rat- Robert Gibbs said that Mr. Obamasaid they would back it. If their Bob Corker of Tennessee. Four Re- ification. had consulted far more with Repub-votes hold, backers will have the publicans had previously signaled congressional elections. Supporters include top military licans this month than in the open-support they need for passage. their support. officials and much of the Republican ing year of his presidency. The treaty, known as New Start, The Senate was expected to take foreign-policy establishment. “Senators have gotten the infor-would cap the Russian and U.S. de- a procedural vote on the treaty In the current lame-duck session Mr. Corker spoke in favor of the mation that they needed, and we’reployed strategic arsenals at 1,550 Tuesday afternoon, which if suc- of Congress, Mr. Obama has secured treaty on the Senate floor on Tues- pretty confident that more thanwarheads apiece, about a third less cessful would end debate and set passage of a major tax package, leg- day and took on some of the argu- two-thirds of them will vote to rat-than current limits. It also would al- the stage for a ratification vote islation to allow gays to serve ments of its critics. ify something that’s tremendouslylow on-site inspections of U.S. and Wednesday. openly in the military and a food- “There is nothing in this treaty important for our national security,”Russian nuclear-weapons facilities Ratification would mark another safety bill. that limits our missile defense,’’ he Mr. Gibbs said.Obama reclaims a measure of his independence [ Capital Journal ]BY GERALD F. SEIB In the second year of Ronald Reagan’s presidency, the magazine ConservativeDigest devoted an entire editionto portraying him as a man whohad turned his back onconservative principles. In his diary, Mr. Reagan notedthe magazine labeled him“turncoat” and said conservativeactivist Richard Viguerie sent hima copy of the magazine with aletter. “He tried to write insorrow, not anger about mybetrayal of the conservativecause,” the president noted. “Heused crocodile tears for ink.” To put it mildly, PresidentReagan—now considered a heroon the right—survived that European Pressphoto Agencycriticism from his own supporters.That lesson might heartenPresident Barack Obama as he islacerated by liberals of his ownparty even as he enjoys his firstreal set of bipartisan legislativesuccesses during Congress’scurrent lame-duck session. The problem with the president’s first two years in office was that he often came to be seen as an off-the-rack Democrat. Above, he signed the tax-cut bill Friday. President Reagan’s apostasythen, as is Mr. Obama’s now, was In that sense, the most rack Democrat, at once more Losing control of the House in Democrats. This time, there wasto compromise with the important movement Mr. Obama liberal and more partisan than November may not have been the an Obama tax bill.opposition on taxes, among the has made since the midterm many voters assumed. He worst thing for Mr. Obama. The Mr. Obama now will be accusedmost ideologically charged of election has been toward his own appeared less focused on finding Capitol’s dynamics changed in this of being more concerned with hissubjects. Mr. Reagan saw little independence—or, more precisely, common ground than in keeping month’s lame-duck session. own re-election than with the fatechoice but to do a tax deal to win back toward his own his House Democratic caucus Unable to count on a House of his party. There are questionsconcessions on other important independence. The Barack Obama together and in winning that majority, Mr. Obama was no about why, having given grounditems. He conceded not so much elected in 2008 presented himself elusive 60th Senate vote needed longer obliged to defer to that on taxes, he didn’t get moreto Democrats as to political reality as a kind of singular force, neither to break a filibuster. majority. Republicans, unable to assurances of Republican support—which is pretty much what Mr. party man nor ideological figure Along the way, the least avoid it, accepted responsibility on the new strategic armsObama did in his deal with but—in the campaign cliche—a popular of national Democratic for a deal on taxes. agreement with Russia, hangingRepublicans to extend tax cuts in postpartisan leader. Yes, he was figures, House Speaker Nancy It’s particularly instructive how by a thread in the Senate. Mr.return for more unemployment probably more instinctively liberal Pelosi, often was seen as driver of Mr. Obama’s tactics in the recent Obama will need his liberalbenefits and a new economic- than, say, Bill Clinton, but Democratic strategy, rather than tax debate differed from those he friends in the next two years, asstimulus bill by another name. ideology wasn’t the point. Making the postpartisan president who so pursued in the long and politically they will need him. For now he’s As those experiences show, it’s Washington work was the point. appealed to independent voters troublesome health-care won some victories and reclaimednice for a president to have a David Axelrod, the president’s not so long ago. discussion. In the health debate, a measure of his independence.dedicated base of ideological political counselor, says the In some cases, Mr. Obama had Mr. Obama never actuallyfollowers—and it’s also Obama candidacy actually was little choice in this approach. A presented his own plan but, WSJ.comtroublesome for a president to predicated on this pledge to “get president with a congressional rather, waited for congressionalhave a dedicated base of past hyperpartisanship.” majority is expected to use it, and Democrats to settle on one. Even ONLINE TODAY: See a video dis-ideological followers. Those The problem with the an opposition party with no as Republicans excoriated cussion with Jerry Seib on howfollowers often expect the president’s first two years in political control in Congress has “Obama’s health bill,” there was Obama is moving toward politicalpresident to be the leader of office was that he often came to no responsibility and therefore no Obama health bill, only independence at WSJ.com/USthem, not of the country. be seen as a traditional, off-the- little incentive to give ground. variations drawn by congressional
The father of fins CHUCK JORDAN AND THE HISTORY OF AUTO DESIGN 10WEDNESDAY, DECEMBER 22, 2010 LIFE & STYLE asia.WSJ.comGoogle looks to the clouds for new ideaWill Chrome OS make a decent attempt at challenging the Microsoft-Apple duopoly? [ Personal Technology ]BY WALTER S. MOSSBERG In the personal-computer in- dustry, where things change fast, one fact has been a constant for years: There are two major, mainstream operating systems for con- sumers. One, MicrosoftWindows, runs on many brands of hard-ware and dominates sales. The other, Ap-ple’s Mac OS X, runs only on its maker’sMacintosh computers, and has had a resur-gence in popularity in recent years. Othercontenders, such as various versions of Li-nux, have remained on the fringes. Next summer, however, Google hopes toadd a third broad-based computer-operat-ing system to challenge the duopoly. It’scalled Chrome OS, and is based on Google’sChrome Web browser. With Chrome, Googleisn’t just aiming to elbow its way into theOS business. It’s hoping to change the en-tire paradigm. Instead of storing most pro-grams and files on your computer itself, theChrome OS will mainly run programs from,and require you to keep your data in, thecloud—remote servers located on the Inter-net. In effect, it turns your entire computerinto a giant Web browser, instead of treat-ing the browser as just one among many lo-cal programs. The Chrome OS isn’t finished, and isn’t Googleready for broad public testing. Google read-ily concedes it has lots of bugs and rough A Cr-48 test machine, with Google’s Chrome OS installed. Google says Chrome will be licensed to select manufacturers.edges. But the company has designed asmall test laptop with the new operating all your stuff waiting for you. I also had to settle for Web-based pro- 100 megabytes of data free, but that is asystem installed and distributed “a few However, users of the Chrome OS will ductivity programs—like word processors small amount, and you have to pay forthousand” of them to outsiders to try. have a huge adjustment to make. They will and spreadsheets—with many fewer fea- more. I have been using this machine, called have to give up the rich, local programs they tures than standard local ones, such as Mi- Like the Mac OS, but unlike Windowsthe Cr-48, for about a week, and have some have spent years learning to use and tweak- crosoft Office. or Google’s own smartphone operatingexplanations and first impressions to share. ing to their liking. You can’t install local pro- And I ran into plenty of frustrations. At system, Android, the Chrome OS will beThis isn’t a formal review; that will have to grams on a Chrome OS computer. Instead, this stage, Chrome OS can’t do anything deeply integrated with hardware. So,wait till the product is finished and is on Google provides a Web Store inside the with USB flash drives or SD memory cards, Google doesn’t plan to distribute or li-commercial computers. browser that allows you to download icons and can’t synchronize phones. And it has a cense the new operating system to every I focused mainly on the software, which for “Web apps”—mostly Web sites designed very limited ability to store, or allow you to hardware maker—at least not at first. Youis built on a Linux underpinning. That’s be- to look and work like standard programs. do anything with, email attachments or won’t be able to install it on an existingcause Google doesn’t ever intend to sell the other files you might download and prefer computer. It will be available in 2011 on aCr-48 hardware, an all-black, unbranded to keep locally rather than on a server con- limited number of computer models fromlaptop with a 30.5 centimeter screen, a rub-bery surface and a large, buttonless touch- With Chrome, Google isn’t just trolled by somebody else. Printing was a chore, requiring a compli- selected manufacturers. Google says this is because security is apad that resembles those pioneered on the aiming to elbow its way into the OS cated setup on a Windows computer that high priority and requires special hardwareMac. In my tests, I found this early Chrome business. It’s hoping to change the Chrome used as a conduit to a printer. Plus, Chrome OS is hardly stable yet. I designs that tightly bond with the software. Also, Chrome OS computers will, inOS machine to be fast, with decent battery entire paradigm. suffered numerous crashes of Adobe’s Flash some respects, be more like iPads than lap-life and almost instant resumption from player, and even Google’s own Google Talk tops. They won’t have hard disks, just asleep. It handled most Web sites fine, and instant-messaging service, which appears in limited amount of flash-memory storage,worked almost exactly like the very nice Some of these, like Gmail, are familiar a little pop-up window on top of the and they won’t have DVD drives.Chrome browser on Windows and Mac. and popular. Others are newer. For in- browser. The company says it hopes to fix They are an attempt to realize the old I also liked the one hardware feature stance, the New York Times and AOL al- these problems by next summer. idea of a “network computer,” or one whichworth mentioning: a radically redesigned ready designed Web-based news apps for Finally, the biggest downside: Because is mostly a front end for network services.keyboard. Instead of function keys, or vari- Chrome OS, and there is a Web-based ver- it’s a cloud-oriented system, Chrome OS is Of course, many people already spendous legacy keys such as Caps Lock, Chrome sion of the TweetDeck program for Twitter. almost useless if you lack an Internet con- most of their time with their PCs and MacsOS keyboards feature dedicated browser- These apps, and the store’s own icon, ap- nection. Google says it plans to offer some connected to the Net. Many use Web-basedoriented keys, like ones for moving back pear on the new Tab screen of Chrome OS limited offline functionality, and to en- email programs or streaming music pro-and forth among Web pages and windows, (and also are available in the current courage makers of Web apps to do the grams instead of local software.refreshing a page, entering full-screen Chrome browser.) same. It will also eventually be able to So the time may be right for a cloudmode, or quickly opening a new tab and be- In my tests, I found these apps generally make some use of some files stored on ex- computer, a change in the paradigm. Googleginning a search. worked fine. But most aren’t as rich and ternal hard disks. But the basic operating certainly hopes so. The Chrome OS will have a big advan- versatile as local Windows and Mac pro- mode will require you to be connected totage. Because it is mainly a front-end-to- grams. For example, there was no way to the Internet. Find all of Walt Mossberg’s columns andcloud service, if you lose your laptop, you play my local, personalized iTunes music To help with this, the Cr-48 has a Veri- videos online, free, at the All Things Digitalcan get another one and just sign into your collection, unless I spent many hours up- zon cellular modem built in, to supplement Web site, walt.allthingsd.com. Email him atcloud accounts. You should be able to find loading it to some Web-based service. its Wi-Fi connectivity. Verizon is offering email@example.com.
10 THE WALL STREET JOURNAL. Wednesday, December 22, 2010 LIFE STYLEA wily impresario of findomIt’s thanks to Chuck Jordan that automobile tail fins became so flamboyantly oversized Clockwise from left, the 1948 Cadillac Sixty Special; the 1955 Chrysler 300; the 1959 Cadillac Eldorado; Chuck Jordan, who played a key role in Cadillac’s greatest years, in 1963.BY PAUL INGRASSIA it were. Even so, “as soon as the ’48 model appeared, the protests began Tail fins. They were an automo- to roll in,” Fortune magazine latertive design statement that, even reported. “In desperation, the com-today, remains an enduring icon pany hurried up designs on a finless(as in, “What were we thinking?”) rear fender.” But before GM couldof mid-20th-century America. de-fin the designs, public opinionTheir memory was invoked this began to change. People liked themonth by the passing of Chuck Jor- fins, and they stayed.dan at the age of 83. There things might have stayed, Mr. Jordan was General Motors’ fin-wise, if not for the smallest of General Motors (3); Chrysler Group (bottom right)vice president of styling in the late Detroit’s Big Three car companies,1980s, hardly the glory years of GM Chrysler. It had a reputation for en-design. But early in his career, as gineering excellence but boring de- sign. So the company lured Stude- baker’s styling chief, Virgil Exner, aAfter sculpting a full-size talented man who had worked under Mr. Earl at GM early in his career.clay model, he stepped back When Mr. Exner arrived,and realized the fins were Chrysler’s U.S. market share, tradi- tionally about 20%, had shrunk totaller than the roof of the car. about 13%. So he took to the draw- ing board. The result: Chrysler’s 1955 cars looked like nothing else onthe styling chief of GM’s Cadillac the road. decided to do some sleuthing. His nearing retirement, was touring was 3 feet longer than GM’s now-de-studios, he played a key role in help- They had bushy-browed name was Chuck Jordan. GM’s facilities in Europe. Revamping parted Hummer H2. “No seconding Cadillac reach the heights, as it “Frenched” headlights, as the design Mr. Jordan took a lunch-hour the designs in his absence could looks will be necessary to identifywere, of findom With GM now re- was called, and big tail fins that ride one day up Mound Road, a ma- cost Messrs. Mitchell and Jordan Cadillacs for 1959,” said Motor Lifecovering from bankruptcy, this tale pointed to the sky. Chrysler dubbed jor thoroughfare north of Detroit. their jobs. magazine. No kidding. GM’s marketof tails shows that even the com- it “The Forward Look.” The com- As he passed a Chrysler facility, he So Mr. Mitchell devised a com- share bounced back.pany’s dominant days had certain pany’s market share quickly jumped spotted some cars parked in a promise. He ordered the develop- Decades later, Mr. Jordan con-challenges. to 18%, confounding not only GM grassy field behind a fence. He ment of alternative 1959 designs fessed that the 1959 Cadillacs The first tail fins were the brain- but government trust-busters, drove in, peeked through the fence with big fins for virtually all GM looked “cartoonish.” His favoritechild of Harley Earl, the father of whose allegations that GM was a and spotted the biggest fins yet. cars, with the biggest fins reserved fins, he told me, were the shorterautomotive design and the styling monopoly were undermined. In the The young man tore back to the for Cadillacs, and had them dis- (but still substantial) ones on thechief at GM for three decades, from first two months of 1955, Chrysler’s GM Technical Center, which housed played next to the designs Mr. Earl 1960 models. Fins disappeared en-the late ’20s to the late ’50s. Mr. earnings outstripped its net income the company’s styling studios, and had approved. When Mr. Earl re- tirely from American cars in 1964.Earl was a brilliant but imperious for all of 1954. ran into the office of Bill Mitchell, turned, he surveyed the scene and They’re still a wonder to be-man whose underlings always called Emboldened, Mr. Exner added the No. 2 man on the design staff. stalked into his office, saying noth- hold, however, when viewed in thehim “Mr. Earl,” slurred into one even bigger fins to Chrysler’s tails “You’ve got to see what I just saw,” ing for three days, before finally metallic flesh. Some of the best-word as “Misterl,” but never “Har- in 1956 and in 1957, when the com- Mr. Jordan sputtered, as he recalled nodding approval. preserved specimens can be foundley.” He was enamored of aerody- pany touted its styling with the when I interviewed him a couple of Mr. Jordan’s work on the new in the General Motors Heritagenamics and aircraft. memorable slogan “Suddenly, It’s years ago. “You won’t believe it.” Cadillacs wasn’t done. At one point, Center. Ironically, it’s just off During World War II Mr. Earl 1960!” Mr. Exner was honored by Mr. Jordan, Mr. Mitchell and an- after sculpting a full-size clay Mound Road north of Detroit, nothad visited Selfridge Air Base near the Harvard Business School. Tail other colleague piled into a car and model, he stepped back and realized far from where Chuck Jordan madeDetroit for an up-close look at the fins “reflect the growing artistic drove back up to the Chrysler field. the fins actually were taller than the his fateful discovery in that long-Lockheed P-38. It was a versatile taste of the American consumer,” The sight at the site confirmed that roof of the car. So he downsized the ago summer of 1957.fighter plane with twin fuselages, he proudly declared. Well, they re- GM was about to get out-finned. fins a bit, hard as that is to believesort of like a catamaran, and two flected something, if not exactly It was way too late to change when viewing the cars today. Mr. Ingrassia is the author, mostfins protruding upward from the that. GM’s 1958 designs, which were When the 1959 Cadillacs debuted recently, of “Crash Course: Theend of its twin tail. Meanwhile, in the late summer of rounded shapes laden with Harley they sported the biggest tail fins American Automobile Industry’s Pleased with what he saw, Mr. 1957, rumors spread around Detroit Earl’s favorite material: chrome. ever, and more. The side panels Road from Glory to Disaster.” He’sEarl ordered fins mounted on the that Mr. Exner would unveil still Even changing Cadillac’s 1959 styl- looked like jet fuselages. The rear writing a new book, “Engines oftails of GM’s 1948 Cadillacs. They more styling magic on Chrysler’s ing would be a stretch, especially tail lights resembled jet-engine ex- Change,” about the cars thatwere modest little things: finlets, as 1958 models. So a Cadillac designer under the circumstances. Mr. Earl, haust portals. The longest model shaped American culture.
Wednesday, December 22, 2010 THE WALL STREET JOURNAL. 11 OPINION: REVIEW OUTLOOK Rome’s RebukeN uance and a measure of deferen- But for many clerics who have rejected the the Vatican secretary of state said in autonomy in church administration; the tial restraint are hallmarks of Vat- state church and remain faithful to Rome, 1999, appear to have cooled Beijing’s ire. basic human rights of China’s many wor- ican diplomacy, particularly when the three-day event was forced upon them Of late most of China’s feuding with shippers are at stake as well. China’sChina is on the receiving end. Neither by government authorities. Catholic news Rome has been over the appointment of constitution guarantees the right to freewas on display in a stinging communiqué agencies received re- bishops. The state-run religious practice, but the reality is farissued by the Holy See press office on ports of police literally church does not recog- more complex. Catholics in China mustFriday. dragging bishops from The Vatican shows new nize the Holy See’s au- regularly weigh their allegiance to the The statement, a response to a na- their homes to attend.tional conference of Chinese Catholic And lest the meeting be strength in speaking up thority to approve new diocesans. Pope Bene- Pope against their personal safety. By of- ficial tallies, 5.3 million Chinese nowrepresentatives held in Beijing this confused for a genuinely for China’s Catholics. dict XVI had made quiet worship at sites registered with the CPA.month against the Vatican’s objections, priestly one, the church efforts to reconcile with But many Catholics participate instead incondemned in no uncertain terms China’s representatives were bishops ordained with- underground congregations loyal toongoing interference in the administra- treated to an address by Politburo mem- out papal sanction. Beijing, still skittish Rome, risking detention and harassment.tion of the country’s Catholic Church. ber Jia Qinglin, who emphasized the great about ceding the authority of its civil The Holy Spirit Study Center in HongWith “profound sorrow,” the statement importance of religious work to the Com- ministries to an outside power, now Kong estimates that more than six mil-decried Beijing’s obsession with central- munist Party’s goals. seems to be backpedaling on those com- lion Catholics now practice in these un-ized control as “a sign of fear and weak- It was the Vatican’s official recogni- promises. In November the CPA ordained authorized churches.ness rather than of strength; of intransi- tion of Taiwan in 1951 that first caused a bishop, Guo Jincai, without Vatican Pope Benedict XVI addressed China’sgent intolerance rather than of openness the mainland’s then two-year-old Com- sanction—the first unapproved ordina- Catholics in a 2007 letter, saying thatto freedom.” munist government to expel the Papal tion in four years. The church represen- further dialogue to resolve these matters Given the character of the Beijing con- Nuncio and sever relations with the Vati- tatives who gathered in Beijing this was in the best interest of both sides.clave, though, such strong Vatican censure can. But the church’s position on Taiwan month selected an illegitimate bishop, Beijing, too, once looked willing to coop-should hardly come as a surprise. The has softened in recent decades. Sugges- Ma Yinglin, to serve as president of the erate; only a few months ago, a tentativeconference was convened to select new tions that the Holy See is willing to move bishops’ council. rapprochement seemed within sight.leadership for China’s state-sanctioned its embassy from Taipei to the mainland At issue is not just the Catholic That opportunity may now have beenchurch, the Catholic Patriotic Association. “not tomorrow morning, but tonight,” as Church’s doctrine of independence and squandered. ‘Totally Out of There’W e’ve supported President that “We’re going to be totally of there to get the support of Pakistan’s military military help. Obama’s Afghan surge, but some- come hell or high water by 2014.” in rooting out Taliban sanctuaries in If Mr. Biden really wanted to advance times it’s hard to tell if his Ad- White House spokesman Robert Gibbs North Waziristan and around Quetta. the day when U.S. forces can leave, heministration does. Only days after the tried to clarify on Monday that Mr. Biden The remarks also undermine months would have announced that the U.S.President spoke about supporting our was only referring to the “combat role” of of Administration effort to downplay its would like to keep air bases at Bagramtroops until they finish the job, Vice Presi- U.S. forces in 2014. But Mr. Biden’s re- original mistake of setting a July 2011 and Kandahar after 2014. This would sig-dent Joe Biden did one of his famous foot- marks will reinforce the view, widely held deadline for beginning to withdraw U.S. nal to everyone that the U.S. won’t letin-mouth numbers. in Kabul and Pakistan, that the Americans forces. The U.S. and its allies went out of the Taliban return to power and that the Speaking on NBC’s “Meet the Press” on are short-timers and so everyone in the their way at the recent NATO summit in Pakistanis should conclude that the U.S.Sunday, the master of subtle diplomatic region ought to make their accommoda- Lisbon to extend to 2014 the date when won’t abandon the region like it did atmessaging declared that on July 2011 the tions with the Taliban. Mr. Biden’s glib Afghan forces will take “full responsibil- the end of the Cold War.U.S. really will begin to leave the Afghan rhetoric implying a lack of American stay- ity for security” in their country. But As journalists, we appreciate that Mr.theater. “It will not be a token amount” of ing power will in particular make it that even full responsibility does not mean Biden’s gaffe-track makes good copy, buttroops leaving, Mr. Biden said, adding much harder for General David Petraeus the Afghans won’t need some foreign our troops aren’t laughing. New Start’s Old IllusionsT he Obama Presidency wouldn’t opinion. On Tuesday, a cloture vote is ardently supported by the Pentagon. round of arms-control talks. In answer to have been complete without an scheduled to cut off debate. As always, missile defense policy has criticism that New Start does nothing to arms-control treaty. Since at least So arms control has come to this: been more difficult. Since the late Ted address Europe’s fears over Russians tac-the Kellogg-Briand pact in the 1920s, From its august life at the center of Kennedy dubbed Ronald Reagan’s mis- tical, or short-range, nuclear missiles, thewhich outlawed war, it has been an arti- American policy debates, New Start will sile-defense proposal “Star Wars,” it has Administration has said this treaty wascle of faith in some circles that reason- slide through the Senate as one more been liberal dogma that defending limited to reducing long-range, strategicable men everywhere could be brought to slice in Harry Reid’s stacked, lame-duck against incoming nuclear missiles is a arsenals. Yes, and when the tactical talkssee the unreason of armaments and sandwich—Don’t Ask, provocation and mis- arrive, expect the Russians to put a scal-would sign binding treaties against them. Don’t Tell; the Dream take. So naturally can- ing down of U.S. missile defenses back in And so it came to pass this year that Act; a continuing reso- The arms treaty is didate Obama cam- play. Been there, done that.President Obama traveled to Prague to lution to fund the gov- paigned against missile Perhaps it is fitting, even useful, thatsign the New Start treaty with our Cold ernment, a food safety irrelevant to today’s defense and initially a largely irrelevant artifact such as NewWar arms-control sparring partners, the bill, and what the heck, nuclear proliferation. proposed cuts in spend- Start should appear as a footnote to theRussians. The treaty reduces nuclear an arms-control treaty. ing for the program. Cold War years. This means we may fi-launch vehicles and shrinks the inventory The good news is He has now done a nally be forced to confront the real worldof nuclear warheads. Now we are in- that New Start could have been worse. mid-course correction in support of mis- of the nuclear present, one inhabited notstructed by the arms-control community Before the treaty arrived at a Senate sile defense. On Saturday, Mr. Obama gave by Mikhail Gorbachev but by Mahmoudthat it is the Senate’s duty to rubber- vote, Arizona’s Jon Kyl negotiated useful the Senate a letter committing the Admin- Ahmadinejad and whichever North Ko-stamp—pardon the slip—“ratify” what commitments and clarifications from the istration in detail to the four phases of rean is playing with the nuclear buttonthe President has achieved. Obama Administration on missile defense missile defense for Europe and the U.S. this week. On Monday, uncertain Senate Republi- and nuclear warhead modernization. Sen- This followed disagreement over the It is the arms-control ideology behindcans were to have their concerns ad- ator Kyl is giving the idea of negotiating treaty’s preamble, which is nonbinding New Start and even Kellogg-Briand thatdressed in a classified briefing for Sen- with ourselves a good name. Absent but unhelpfully re-links nuclear weapons carries over into something like the 1994ate aides. In reply to Minority Leader these commitments, New Start was in- and missile defenses. The State Depart- Agreed Framework with North Korea, vi-Mitch McConnell’s complaint Sunday supportable. ment has been at pains to minimize Rus- olated with impunity, or the utterly failedthat the treaty’s ratification was being Senator Kyl got Mr. Obama to credibly sia’s threat to abandon New Start if it con- multiparty “talks” with Iran. This is arushed through the lame-duck Senate commit to warhead-modernization goals cludes our defenses threaten their nuclear dangerous world that will require new,and that he had concerns about its veri- that the Senator had won earlier from capability. Mr. Obama now says he “will hard-headed antiproliferation strategies,fication program, an Administration offi- the Bush Administration. Last month, the take very action available to me to sup- not the irrelevancies of New Start. Thatcial said the Senator obviously had spent White House promised to spend $4.1 bil- port” antimissile deployments. no doubt will require a new generation ofenough time with the treaty to form an lion on warhead modernization, a goal Or at least until the next, inevitable policy makers in Washington.
Wednesday, December 22, 2010 THE WALL STREET JOURNAL. ** 13 OPINION China’s National InsecurityBY JOHN LEE greater, rather than less, insecurity In some respects, the Party has ernment, and other political and as far as the Party is concerned. a point. Established Western de- social freedoms enshrined in the Events of the past year have Yet, for the Party, the attempt mocracies and some Asian coun- Charter 08 that he endorsed in De-put new dents in China’s claim of a to contain China is not just about tries such as Japan and South Ko- cember 2008 is little different to“peaceful rise.” Beijing has em- “guns, butter and alliances,” as one rea will find it difficult to accept what Beijing has been promisingbroiled itself in various territorial prominent Chinese strategist put it that China can be a “responsible to the West—and, more impor-disputes with neighbors. It has to me. The leadership is convinced stakeholder” unless there is signif- tantly, to its own people—for overalso started employing coarse that the United States, Europe and icant political reform in the coun- two decades.rhetoric against those who dis- American allies in Asia have stum- try. President Bill Clinton justified The official line has alwaysagree with it. In a July Asean bled upon a further, more subtle, American economic engagement been that these reforms will onlymeeting, foreign minister Yang and extremely effective two- with China and support for its en- occur “when the time is right.” InJiechi ominously reminded smaller pronged strategy. The first prong try into the World Trade Organiza- 2007, Wen provocatively suggestedSoutheast Asian counterparts who is to weaken and divide China in- tion in 2001 on the basis that par- that China may not be ready for Associated Presswanted American involvement to ternally. The second is to deny au- ticipation in the global economic democracy for another 100 years.help negotiate a settlement over thoritarian China the legitimacy system would speed up the pace of That time may be coming sooner.disputes in the South China Sea required for it to assume its natu- democratic reform in China—a China’s reform period is enteringthat, “China is a big country and ral place as regional leader. And logic that has since been reaf- its 32nd year, already having out-other countries are small coun- Dissident Chen Guangcheng this is where the Nobel Peace Prize firmed by Presidents George W. lasted Mao Zedong’s terrible reigntries, and that is just a fact.” comes in. Bush and Barack Obama. Liberal by five years. Its economy hasChina’s leaders have not only Beijing’s frenzied response is evi- As Chinese leaders such as Pre- democracies believe that domestic doubled in size every eight yearslashed out against Japan for the dence that the Chinese Communist mier Wen Jiabao have repeatedly political values significantly shape for the past three decades and isSeptember trawler incident, but Party remains a deeply insecure argued, “foreign devils” seek to foreign policy means and ends. now the second largest in thealso abused those who gently dis- and even paranoid regime. weaken China by dividing it. Just This means that an authoritarian world.agreed with the way it handled the As a starting point, Beijing sees as awarding the 1989 Nobel Peace China is destined to remain out- But as social unrest rises expo-awarding of the Nobel Peace Prize tension between itself and Amer- Prize to the Dalai Lama was an at- side the “democratic community” nentially each year throughoutto Liu Xiaobo earlier this month. It ica, Japan and Western Europe as tempt to strike a blow against Bei- that has been a hallmark of the China, the Communist Party re-even seems to have bullied some not only inevitable but also “struc- jing’s control over Tibet in a year American-led liberal order. mains as insecure as it has evernations into not attending the tural.” Chinese political leaders when nationwide protests brought But is there really such a pow- been. A regime that is awkward inaward ceremony in Oslo. and strategic thinkers begin from the Party to its knees, awarding erful conspiracy intricately de- its own skin and uncomfortable Many China watchers and for- the realist premise that estab- this year’s prize to Liu Xiaobo is signed to weaken and divide among its own people is always ineign officials were stunned that lished powers will always seek to an attempt to undermine the legit- China? Beijing should itself realize danger. Lech Walesa once said thatBeijing would jeopardize the gains contain the economic and military imacy of China’s political system the gaps in this accusation. Since democracy is about having a con-made over 15 years of “smile di- capabilities of emerging states. and values. the 1990s, China has benefited versation with your people. If Bei-plomacy” by reacting so fiercely to This is apparent in my survey of Beijing is convinced that Nobel more from economic engagement jing doesn’t start doing that, itsthe judgment of the non-govern- over 100 recent articles by Chinese Peace Prizes have long been used with the West than any other own paranoid backlash against themental Nobel Prize Committee. On strategists, in which four-fifths as a weapon by “foreign devils” country. Besides, when it comes to Peace Prize will end up as a back-the one hand, China is praised glo- were about responding to the on- against authoritarian regimes. Liu Xiaobo, the Chinese dissident lash against the Party.bally for its economic pragmatism, going “strategic containment of Many Chinese leaders warily ob- (or “criminal” as Beijing calls him)having denounced communist ide- China” by diluting, binding, over- served that awarding the prize to is not a product of a Western con- Mr. Lee is a foreign policy fellowology in 1978 to pick and choose coming or circumventing American past winners like Poland’s Lech spiracy. He is instead a Chinese at the Centre for Independentfrom the most successful economic and allied freedom of action in Walesa, Burma’s Aung San Suu Kyi citizen that has lived in China for Studies in Sydney and at the Hud-policies of East Asia and the West. Asia. Indeed, if China continues to and Iran’s Shirin Ebadi weakened all but one year of his life. Liu’s son Institute in Washington, DC.Yet, despite thirty years of eco- rise and its interests expand, this the legitimacy of authoritarian re- advocacy of political reform, con- He is author of “Will China Fail?”nomic contact with other nations, provides a structural reason for gimes in those countries. stitutional restrictions on the gov- (CIS, 2007). What Terrorizes India?BY SADANAND DHUME lam, Mr. Gandhi and his party are old caste/religious-based politics if Bharat and the Hindu Janajagruti Khomeini, they see the possibility at best dangerously naïve and at it feels it is in its interest.” Samiti—are ramshackle outfits of making their dream a reality. In Is Hindu radicalism a bigger worst calculatingly cynical. Taken To concur with this view is not with few members and scant popu- the oil rich kingdoms of the Middlethreat to India than the Lashkar-e- together with earlier remarks by to sympathize with Hindu nation- lar support. The Lashkar-e-Taiba, East, they find deep pockets to tap.Taiba? Yes, if you are to believe Mr. Gandhi and senior Congress alism. Indeed, at a superficial level by contrast, is part of a powerful None of these is true of HinduRahul Gandhi, the ruling Congress Party leaders, the comment to Mr. radical Islam and Hindu national- international network and has groups. The nature of Hindu soci-Party’s 40-year-old general secre- Roemer is part of a disturbing pat- ism have much in common. Both close links with both al Qaeda and ety—diffuse, lacking a binding tra-tary, widely regarded as India’s tern. In October, Mr. Gandhi lik- represent a kind of religious tribal- Pakistan’s notorious military intel- dition and largely comfortable withprime minister in waiting. Accord- ened another terrorist group, the ism marked by a sense of victim- ligence agency, Inter-Services In- modernity—makes the emergenceing to a cable released last week by banned Students Islamic Move- hood and deep suspicion of outsid- telligence. Despite international of a Hindu equivalent of the Lash-WikiLeaks, Mr. Gandhi had this to ment of India, to the Rashtriya ers. Both radical Islamists and pressure following the group’s kar-e-Taiba difficult to imagine.say last year in response to a ques- Swayamsevak Sangh (National Vol- Hindu nationalists are prone to In the end, Mr. Gandhi deservestion U.S. Ambassador to India Tim- unteer Corps), a grassroots Hindu- wild conspiracy theories—that the to be criticized not merely becauseothy Roemer posed about the Paki- nationalist organization that pro- 9/11 terrorist attacks were planned The notion that radical he’s wrong, but because his appar-stan-based transnational terrorist vides the opposition BJP with by the U.S. government, or that Mr. ent naiveté hurts India. His com-group Lashkar-e-Taiba—responsi- many of its foot soldiers, and much Gandhi, whose mother, Congress Hinduism is more of a ment to Mr. Roemer directly un-ble for the 2008 Mumbai attacks: of its ideology and leadership. President Sonia Gandhi, is Italian threat to India than radical dercut one of New Delhi’s main“The bigger threat may be the Another senior Congress leader, by birth, represents a secret Vati- foreign policy objectives—to getgrowth of radicalized Hindu Digvijay Singh, has repeatedly pan- can plot to take over India. Both Islam is ludicrous. the international community togroups, which create religious ten- dered to the most conspiracy- share a deep fascination with take the threat from Pakistan-sions and political confrontations minded elements of India’s 140- Western technology, and an aver- based terrorist groups more seri-with the Muslim community.” million strong Muslim population. sion to Western culture. Both place 2001 assault on India’s parliament ously. More broadly, Mr. Gandhi Predictably enough, Mr. Gan- Earlier this month, Mr. Singh group identity above individual and the Mumbai attacks, Islama- and his party encourage preciselydhi’s comment has ignited a hinted that Hemant Karkare, a top rights. bad has been loath to move against the kind of conspiratorial mindsetfirestorm of protest. Gujarat Chief policeman shot by Lashkar-e-Taiba But the similarities end there. Lashkar-e-Taiba. In part this is be- and culture of grievance among aMinister Narendra Modi of the op- militants during the Mumbai at- Simply put, the notion that the cause the group enjoys popular section of Indian Muslims thatposition Bharatiya Janata Party, a tacks, may have been killed by mil- radical Hindu threat to India is backing in Pakistan’s religion- they ought to be working to end.man not best known for his sub- itant Hindus upset by his investi- comparable to that posed by radi- drenched society. Finally, they raise the uncom-tlety, accused Mr. Gandhi of giving gation into bomb blasts ascribed to cal Islam is ludicrous. First there’s Nor can radical Hinduism—such fortable prospect of India being led“inspiration” to the United States’s them. Mr. Singh has also ques- the question of scale. Alleged as it is—claim anything approach- by a man out of touch with thealleged pro-Pakistan tilt. To his tioned the official account of a Hindu terrorists—not one of whom ing the ambition or ideological dominant ethos of the country hecredit, departing from his party’s 2008 terrorist shootout in New has been convicted—are accused of rigor of radical Islam. From Mo- seeks to lead, one that may beinitial instinct to dismiss the Delhi that claimed the life of a bomb blasts in 2007 and 2008 in rocco to Mindanao, radical Isla- flawed but remains essentially lib-leaked cable as part of a conspir- highly decorated policeman. Andhra Pradesh, Rajasthan and mists are motivated by the desire eral, humane and resistant to anyacy, Mr. Gandhi did not disavow Two years ago, he backed the Maharashtra that killed 17 people. to replace man’s law with God’s kind of radicalism. In the long run,his comments. Instead, his party assertion of another Congress According to the South Asia Ter- law by ordering every aspect of so- it’s this ignorance, not a handful ofissued a clarification stating that leader, Abdul Rehman Antulay, that rorism Portal, the toll in India from ciety and the state by the medieval Hindu zealots, that poses thein Mr. Gandhi’s view “terrorism terrorists “had no reason to kill about two dozen radical Islamic dictates of Shariah law. In ideo- greater threat to India.and communalism of all types are Karkare.” Another leaked U.S. em- terrorist attacks since 9/11 stands logues such as the Egyptian Sayyida threat to India.” bassy cable from the time de- at more than 950 dead and many Qutb (1906-66) and the Pakistani Mr. Dhume, a columnist for This anodyne formulation does scribed Mr. Antulay’s statement as hundreds more injured. Abul Ala Maududi (1903-79), they WSJ.com, is writing a book aboutlittle to reassure those who believe “outlandish”: evidence that the The principal Hindu groups ac- find religious justification for ter- the new Indian middle class. Fol-that when it comes to radical Is- Congress “will readily stoop to the cused of the bombings—Abhinav rorism. In Iran’s Ayatollah low him on Twitter @dhume01
14 THE WALL STREET JOURNAL. Wednesday, December 22, 2010 IN DEPTHOdds skew against investorsin bets on the lives of strangersCompany makes big fees from insurance transactions while often significantly underestimating life expectanciesBY MARK MAREMONT these policies, the insured was still alive at chase price and Life Partners’ fees, and put expectancy.”AND LESLIE SCISM the end of the life expectancy the company money in escrow to cover premiums during In late 2005, a policy on the life of an supplied to investors. Policies brokered in the insured’s life expectancy. If the insured 80-year-old California woman was availableI N THE summer of 2005, a firm called 2003 and 2004 show similar patterns. lives longer, investors owe more premiums. for purchase. Life Partners acquired the $1 Life Partners Holdings Inc. said Mar- Brian Pardo, Life Partners’ founder and Sean Turnbow, a Texas client, learned million policy on behalf of its clients, pay- vin Aslett, an Idaho rancher 79 years chief executive, acknowledged that many of earlier this year he had to pay additional ing $300,000, according to company filingsold, had two to four years to live. Life Partners’ life-expectancy estimates “are premiums on two fractional policies he in Texas. It didn’t make this estimate on his be- probably wrong.” It gets them from a doc- bought in 2006. “It’s started to make me It brokered the policy to the clients thehalf but for its customers. The company ar- tor in Reno, Nev., who has testified for a nervous,” he said. “I was under the impres- same day for more than $492,000 plus fiveranges to buy life-insurance policies from court case that he never sion that their physicians years of future premiums, an additionalpeople like Mr. Aslett and sells fractional checks the accuracy of his made very conservative es- $58,000.interests to investors, who collect the death prior predictions. Death wager timates with life expectan- This spread is lower than typical. Mr.benefits when the insured people die. But Mr. Pardo said Life Life Partners helps people invest cies, and that doesn’t ap- Pardo agreed with Journal estimates that The investors in a $2 million policy on Partners prices policies to in others’ life insurance but often pear to be the case at the on average, Life Partners sells a policy forMr. Aslett’s life would have made a tidy re- investors at a steep-enough has misjudged how soon they’ll moment.” about 2.4 times what the owner is paid,turn had he died as projected. But more discount to their face value die. Investments in 2002-05 Jacqueline Keller of Col- much of which goes to its own fees. In itsthan five years later, the rancher, now 84, to cushion the effect of any orado Springs, Colo., said most recent fiscal year, the firm reportedsays he runs on a treadmill, lifts weights flawed estimate. Clients are Died at or before Have not yet she is still paying premi- receiving an average of $308,000 in fees life expectancy reached lifeand chops wood, adding that all of his warned the insured may ums on pieces of two poli- from 201 policies sold.grandparents lived well into their 90s. 6.8% expectancy not die within the time cies she bought in 1996 on Around the time this woman’s policy 11.9% “I’m healthy as a horse,” he says. frame, he said, adding that AIDS patients. She said she was for sale, documents reviewed by the“There’s going to be a lot of disappointed even if an elderly insured had invested, in part, Journal show, two life-expectancy firms,investors.” lived 12 years, an investor Lived past life thinking this would help AVS Underwriting and Fasano Associates, Life Partners, a fast-growing company in would “still make as much expectancy the original owners in projected she had about 10 ½ years to live.Waco, Texas, has made large fees from its as they would in a bank de- 81.3%* their final months, but Life Partners told its investors she hadlife-insurance transactions while often sig- posit.” now, “every time I get a three to five.nificantly underestimating the life expec- He described the case of *5.8% died after exceeding life expectancy. bill in the mail, I get ticked Notes: Through Dec. 31, 2009. Includes 1,197 The woman, who at 85 has just exceededtancies of people whose policies its custom- Mr. Aslett, the Idaho policies. Source: Texas Dept. of Insurance off.” Life Partners’ longevity estimate, said in aners invest in, a Wall Street Journal rancher, as “a good exam- Many find it offensive interview she has “aches and pains” but isinvestigation found. ple of how the discounted that people can invest in “reasonably healthy.” Life expectancies are a key factor in the purchase price of the policy counterbal- strangers’ life insurance. “That you’ve got Mr. Pardo said a five-year expectancy onbusiness of investing in strangers’ life in- ances the risk of longer-than-estimated people out there betting—hoping—you will an 80-year-old was “not unreasonable,” andsurance. If estimates are too low, investors life,” saying investors would still receive a die soon is just a distasteful operation,” the policy was priced so “even if the in-face a double whammy: Their policy payout respectable single-digit return if he lived to says Joseph Belth, a professor emeritus of sured lived 11 years, the compounded re-is delayed, and they must keep paying pre- be 87. insurance at Indiana University. But the Su- turn would be a little under 5%.”miums as the person lives on. At Life Part- The Journal also was able to review preme Court ruled in 1911 that life insur- Life Partners doesn’t tell clients aboutners, according to the Journal investigation, about 20 instances where specific individu- ance was property people could sell. any longevity predictions besides its own.the result is that 10% or 15% yearly returns als’ longevity had been projected both by A Securities and Exchange Commission Mr. Pardo, 68, is a college dropout whopromoted to investors may prove elusive Life Partners and by independent firms that task force in July suggested asking Con- became a decorated Vietnam War helicop-for many. specialize in making such estimates. The in- gress to make such transactions subject to ter gunship pilot. He started a solar-heating Attractive projected returns for clients dependent firms’ estimates were greater, federal securities law, noting that “the SEC business, American Solar King, that becameare part of the company’s formula for suc- generally by 50% to 100%. has brought a number of successful actions a stock-market favorite in the early 1980s.cess. Life Partners topped Fortune maga- In September 2008, for example, Life alleging fraud in connection with life-settle- The renamed ASK Corp. later filed forzine’s 2009 list of fastest-growing small Partners sold its clients a $10.8 million pol- ment securities.” bankruptcy, and in 1989 the SEC accused itcompanies in the U.S. In its fiscal year icy on the life of a 78-year-old New York It said misrepresentation of life expec- and Mr. Pardo of overstating revenue andended Feb. 28, it earned $29.4 million on man, telling them he had a life expectancy tancies was an alleged problem in many profits. He settled in 1991 without admit-$113 million of revenue, for a rich profit of three to five years. Two independent cases. ting or denying wrongdoing.margin. firms earlier that year separately projected When Life Partners acquires policies, The same year, he moved into the na- Life Partners’ filings with the Texas De- the man had about 11 years to live. there’s a market price that is based partly scent life-settlement industry by foundingpartment of Insurance, obtained by the Mr. Pardo denied that Life Partners sys- on life expectancies that sellers’ agents or Life Partners. Mr. Pardo found himself inJournal under an open-records request, tematically attaches lower life expectancies potential buyers obtain from the indepen- the SEC’s sights again in 1994, when itshow that in policies old enough to provide than independent firms’ estimates. He said dent life-expectancy-calculation firms. charged his new firm with selling unregis-a measure, the insured people usually ha- the Journal’s sample was too small and the Life Partners says it sometimes sees tered securities. Life Partners won a fed-ven’t died within the life expectancy Life firm has “numerous examples where our these predictions. In brokering these poli- eral-court ruling that U.S. securities lawPartners gave its clients, and often were [life expectancy] is longer,” some involving cies to its clients, however, it attaches a dif- didn’t cover its products.still living beyond double or triple their policies Life Partners didn’t acquire for its ferent life expectancy, the one from its Since becoming wealthy—he holds aboutprojected span. clients. Reno doctor. half of Life Partners’ stock and owns a Lear In 2002, for instance, Life Partners bro- Since its founding 19 years ago, Life In general, the lower the life expectancy jet—Mr. Pardo has taken on a variety ofkered investments in 297 life policies. Actu- Partners has sold its clients rights to the on a policy, the more a firm like Life Part- charitable causes, including the support ofaries say if life-expectancy calculations on a proceeds of 6,400 life-insurance policies ners can charge investors. Life Partners in a female boxer from Austin who runs a gymgroup of people are well done, half should with a total face value of $2.8 billion. October said its policies are “priced to tar- that aids poor children.die by their projected dates. But in 95% of Clients pay a sum that covers the pur- get a compounded return of 12-14% at life Life Partners markets investments via a Longevity game | How Life Partners’ business works $$ An elderly woman A sellers broker gets a The broker markets the policy Life Partners gets its own Its clients buy the policy for a price Clients pay premiums and wants to sell an life-expectancy estimate to life-settlement providers, longevity estimate, from a based partly on the life expectancy collect death beneﬁt; their unneeded life- for her, which affects including Life Partners. doctor under contract to it. Life Partners used. Company collects yearly return depends on insurance policy. what the policy is worth. fees. how soon the insured dies. Source: WSJ research
Wednesday, December 22, 2010 THE WALL STREET JOURNAL. 15 IN DEPTH Marvin Aslett, 84, has outlived a longevity estimate given to investors in his life insurance by Life Partners.multi-tiered network of agents. Potential in- Colorado securities regulators had and four years or less on all but a handful.vestors, mostly individuals, must attest charged in state court that Life Partners Most were listed as HIV-positive. (Top to bottom) Charlie Litchfield for The Wall Street Journal; Life Partners Inc.they are financially sophisticated, and the sold unregistered securities and didn’t dis- If the projections were accurate, almostminimum investment is $50,000 across close “the rate in which [the insured] out- all of those policies should have “matured,”multiple policies, Mr. Pardo said. lived their life expectancies.” The company with the insured dead, by the end of 2009, They receive a “confidential case his- settled the case, agreeing to repurchase but instead the insured had outlived the es-tory” that includes the insured’s last name, policies from certain state residents. timate in 283 of the 297 policies.a brief medical history and the life-expec- In his deposition in the case, Dr. Cassidy A total of 262 were still alive, of whomtancy estimate. Commissions to sales said Life Partners paid him a monthly re- 64% had lived at least twice the life expec-agents, called licensees, are about 12% of tainer of $15,000, plus $500 for every pol- tancy Life Partners gave them, and 34% atthe amount investors put in. icy bought by Life Partners clients. That least triple. A news release from one licensee in translates to $270,000 annual pay for part- In 2003, of 299 policies the firm bro-2008 said: “15%+ Return on Investment Still time work that has brought him more than kered, the insured as of a year ago hadAvailable.” Another’s website includes a $1.3 million since 2002, Life Partners con- lived past the Life Partners life expectancy2007 brochure citing an “average annual- firmed. in 279 instances.ized ROI on actual payouts of 15.83%.” Dr. Cassidy, who declined to be inter- “Dr. Cassidy’s projections are largely far Such figures “exaggerate the return” be- viewed, testified that he reviewed case his- less than accurate,” Mr. Pardo agreed in onecause they include only matured policies, tories three days a week for Life Partners email. He later contradicted that, saying thewrote Prof. Belth of Indiana in an insurance and it sent him 100 to 200 cases weekly. Journal had “misinterpreted” the statementnewsletter he publishes. That translates to 33 to 66 per working day. as criticism of the oncologist’s “superior” Mr. Pardo said Life Partners didn’t ap- At life-expectancy firm Fasano Associ- projections.prove those pitches. Still, he said, the 15% ates, doctors review an average of six a day, In the now-settled action, Colorado regu- CEO Brian Pardofigure is “factual,” and is useful to clients said Michael Fasano, president. “These are lators accused Life Partners of not disclos- acknowledged that manybecause it signals that returns on overall complex medical histories of older people,” ing another risk: If any investors in a policy of Life Partners’ life-portfolios will be bolstered by early maturi- he said. Mr. Pardo said Dr. Cassidy is under didn’t pay additional premiums when expectancy estimates ‘areties. He said he is comfortable talking with no time pressure. asked, the policy could be cancelled. Life probably wrong.’clients about a portfolio return in the high Though Dr. Cassidy has said he doesn’t Partners says that isn’t a risk because it ei-single or low double digits. check the accuracy of his predictions, his ther finds other buyers of the fractional in- Life Partners says its life-expectancy es- track record can be pieced together from terest or steps in and pays the premium it-timates have long been provided by Donald the filings in Texas. self. It says it has lent clients $6.9 millionT. Cassidy, a cancer specialist in Reno. The In 2002, Life Partners put a life expec- for such payments over 3 ½ years.physician described his work for the firm in tancy of two years or less on the insured —Tom McGinty contributeda deposition two years ago. person in a third of the 297 policies it sold, to this article.
16 THE WALL STREET JOURNAL. Wednesday, December 22, 2010 FROM PAGE ONERussia and India sign pacts China asks Continued from first page for damages from Seoul ONGC bought Imperial Energy, a One of the agreements signed Russian company, for $2.4 billion.Tuesday is for India and Russia to But it has faced obstacles, includingjointly design and develop a fifth- Russia’s decision in September to in sea clashgeneration fighter aircraft, which disqualify a subsidiary of ONGC,could be ready for production by along with a number of other for-2020 and is valued at tens of bil- eign oil companies, from bidding forlions of dollars in contracts. Agence France-Presse/Getty Images the massive Trebs and Titov oil and India’s state-run Hindustan gas deposits in northwest Russia. BY JEREMY PAGEAeronautics Ltd., and Russia’s Suk- This month, Moscow named JSChoi Design Bureau Co. and Rosobo- Bashneft, owned by Sistema, as the BEIJING—China expressedronexport State Corp. will jointly winner of the Trebs and Titov auc- “grave concern” and demandedwork on the designs over two years. tion. compensation Tuesday over a week- Russia has been emphasizing its Mr. Medvedev appeared keen to end clash between Chinese fisher-long-term role in co-developing mil- change a perception in India that it men and South Korean coast guardsitary equipment with India—rather hasn’t been able to break into Rus- in the Yellow Sea, which resulted inthan just selling arms to New Russian President Dmitry Medvedev, left, and Indian Prime Minister Manmohan sia’s energy industry in a significant the death of one of the Chinese fish-Delhi—to bolster its chances of win- Singh during a meeting in New Delhi on Tuesday. way. ermen.ning immediate sales contracts. “India for us is a comfortable It was Beijing’s first official com- India has doubled spending on its build a steel plant in Karnataka trade in material that could be used partner in terms of energy,” Mr. ment since South Korean officialsmilitary over the past six years, to state in a joint venture with India’s to make arms—agreed to lift restric- Medvedev said. The ONGC partner- reported that a Chinese fishing boat$32 billion this year. Next year, New state-owned National Mineral De- tions on the export of nuclear fuel ship with Sistema “can serve as an had capsized Saturday after ram-Delhi will decide the winner of an velopment Corp., a deal reported and equipment to New Delhi. example of fruitful cooperation be- ming a South Korean patrol ship,$11 billion tender to supply 126 earlier this month. India also is pushing to develop tween us in this domain.” leaving one Chinese crew memberfourth-generation fighter jets to the Mr. Singh said he discussed with energy assets overseas and sees A Sistema spokeswoman said the dead and another missing.Indian Air Force, one of its largest- Mr. Medvedev the possibility of Rus- Russia as a key partner. pact signed Tuesday didn’t specify The Chinese boat was amongever military supply contracts. sia expanding the capacity of two Another agreement signed Tues- what agreements the companies about 50 that were fishing illegally Russia is hoping India will chose nuclear-power plants that Moscow day allows for the overseas arm of might work on together. She de- in South Korean waters, accordingthe MiG-35, but it has to compete is constructing in Tamil Nadu state India’s state-owned Oil & Natural clined to say whether the two com- to South Korean officials, who alsowith jets made by Boeing Co. and that are set to begin operations next Gas Co. to consider taking a stake in panies were discussing Trebs and accused some of the other fisher-Lockheed Martin Corp., of the U.S., year. assets owned by Russia’s AFK Titov. men of fighting the coast guardsFrance’s Dassault Aviation, and a India is a net energy importer Sistema, and vice versa. Other framework agreements in- with metal pipes, shovels and clubs.consortium of European companies. and has been developing its civilian ONGC has for years tried to de- volving Russian energy companies The clash follows a fierce diplo- A series of other commercial nuclear industry after the Nuclear velop assets in Russia and has a 20% in the past often have come to noth- matic dispute between Japan andagreements were signed on the Suppliers Group—an organization stake in a consortium led by Exxon ing, analysts said. China in September that was trig-sidelines of the meeting, including that seeks to stem the proliferation Mobil Corp. that is developing the —Nadia Popova in Moscow gered by Japan’s detention of a Chi-one for Russia’s OAO Severstal to of nuclear weapons by restricting Sakhalin-1 oil and gas field. In 2009, contributed to this article. nese fishing boat and its crew fol- lowing a collision with a Japanese coast-guard vessel near disputed is-South Koreans more wary of the North lands in the East China Sea. Chinese state media had played down Saturday’s incident in an ap- parent effort not to escalate ten- sions in a region that has been on Continued from first page tell whether the drill may help Mr. edge since a North Korean artillerytension of the past month is a new Lee’s ratings recover. Some opposi- raid on a South Korean island lastanger and mistrust among South tion party politicians before the drill month.Koreans toward the North. urged Mr. Lee to call it off, citing But China broke its silence Tues- Such sentiments were on display the risk of escalation in the conflict. day after North Korea announcedin extensive media coverage Tues- But the anger and wariness that it wouldn’t retaliate against aday of a steel tower on the inter-Ko- hasn’t necessarily translated into South Korean artillery test Mon-rean border that was lit like a more fear among South Koreans. day—despite threats by PyongyangChristmas tree by a Seoul church. The Realmeter survey found only against the South for severalReporters speculated North Korean 25% of respondents believed North days—and would allow U.N. inspec-soldiers might shoot at the lights Korea would carry out its threats to tors to examine its nuclear sites.and decorations, which haven’t been attack if the drill happened. “The Chinese side expresses itsput up since 2004 when the govern- Kim Sung-taek, an office worker grave concern about the incident,”ment halted the practice, saying the in Seoul, said he sees North Korea Jiang Yu, a Foreign Ministry spokes-Christian connotations of the dis- as an ongoing problem that must be woman told a regular news briefingplay went against a no-propaganda endured but he doesn’t think the in Beijing.agreement the South had signed North would risk its own survival by She said China had “made sol-with North Korea. starting a war with the South. emn representations” to South Ko- The return of the display and the “North Korea is not that irratio- rea, and called on it to rescue thecoverage of it was one indication of nal,” he said. “North Korea didn’t missing fishermen, punish the per-a decreased willingness in the South hit us to kill us, but they want to petrators, offer compensation forto humor the North as well as a hurt us and make us notice them.” the loss of life and property, and en- Agence France-Presse/Getty Imagessharpened vigil of what Pyongyang One senior South Korean official, sure that such incidents don’t hap-may do next. speaking with reporters Tuesday on pen again. “The Yeonpyeong incident re- the condition of anonymity because She did note that South Koreaminded people of the threat,” said of the current sensitivity with the had immediately deployed rescueLee Seo-jung, who was watching her North, said the South’s military ships and helicopters to the scene,son ice skate at a holiday rink in needed to change its tactics and and that they were still searchingSeoul. “People are thinking again training to counter the risk of asym- for the missing fisherman.that the war is not finished.” metric, small-scale actions, such as However, her strongly worded For more than a decade, South the Yeonpyeong attack and sinking statement could exacerbate concernKoreans have taken North Korea’s A South Korean military officer stands guard in front of a steel Christmas-tree of the South Korea warship Cheonan in South Korea and among othertantrums and provocations in stride, lighting display near the inter-Korean border Tuesday. in March. neighbors that China is deliberatelydespite the history of the Korean “North Korea always tries to sending its fishing boats into for-War of the 1950s, Pyongyang’s oft- been one of not letting any provoca- found that 67% of respondents fa- make a surprise attack. That is their eign or disputed waters to helpdeclared goal of taking over the tions from the North go unchal- vored going through with the mili- advantage,” the senior official said. meet domestic demand.South and its huge buildup of con- lenged, a position that appears to tary drill that Seoul carried out “In a full-scale war or one-on-one More than 300 Chinese fishingventional weapons. resonate more with South Koreans, Monday. Government officials ar- confrontation, North Korea knows boats are captured for fishing ille- Even when North Korea tested especially after the Nov. 23 attack. gued they needed to proceed with better than anyone else that they gally in South Korean waters everynuclear weapons in 2006 and 2009, Opinion surveys since the attack the drill to prevent North Korea’s don’t have any chance.” year, according to South Korea’sSouth Koreans expressed less alarm found sharp jumps in negative senti- attack from creating a de facto He also said public opinion in the coast guard.than people in other countries did. ments toward North Korea, particu- change in a maritime boundary. South has always been Pyongyang’s In 2008, one South Korean coastThe 2006 test wasn’t followed by larly among young adults who are “We have put up with North Ko- “strongest and most effective lever- guard officer was killed and six oth-any concrete action, while after the normally less interested in politics rea’s occasional provocations for de- age” on the North Korea policies of ers injured in a scuffle with Chinese2009 test, South Korea joined a and are two generations removed cades,” said Park Sun-min, chief ex- the Seoul government. fishermen fishing in South KoreanU.S.-led security effort aimed at from the Korean War of the 1950s. ecutive of Min Consulting, a “Since the Yeonpyeong incident, waters.stopping the shipping of nuclear The ratings of President Lee initially political consulting firm in Seoul. there’s been huge damage to that,” Over the past year, China hascomponents. took a hit amid perceptions of a “Now we’ve reached a level where he said. “So I think Yeonpyeong was also been reasserting its territorial But while the previous South Ko- weak response to the attack. we can’t do that anymore even if a political and military mistake by claims to almost all of the Southrean governments had a policy of A survey done by Realmeter, one that means we might endure some Pyongyang.” China Sea, alarming several South-reaching out to North Korea, Presi- of South Korea’s largest market re- limited warfare on our land.” —Jaeyeon Woo east Asian nations which claimdent Lee Myung-bak’s stance has searchers, on Saturday and Sunday Mr. Park said it was too early to contributed to this article. parts of it.
As of 11 a.m. ET Euro 1.3134 À 0.25% Yen/US$ ¥83.72 À 0.04% Yen/A$ ¥83.53 À 0.65% Oil 89.54 À 0.19% Gold 1384.60 g 0.06% 10-year Treasury À 5/32 yield 3.328% 3-month Libor 0.30281 Tokyo aims to jump-start Pfizer’s best medicine market for start-up stocks is emerging markets BUSINESS& FINANCE. MARKETS 22 HEARD ON THE STREET 30Wednesday, December 22, 2010 THE WALL STREET JOURNAL. asia.WSJ.comU.S. fines Toyota for safety lapses New YorkPenalties of $32.4 million levied for improper disclosure of defects linked to millions of recalls sues ErnstBY JOSH MITCHELL over repos WASHINGTON—The Obama ad-ministration slapped Toyota Motor BY LIZ RAPPAPORTCorp. on Monday with $32.425 mil-lion in civil penalties, the maximum New York Attorney General An-allowed by law, for failing to properly drew Cuomo filed a civil-fraud law-disclose what it knew about safety suit against Ernst & Young LLP ondefects linked to recalls of millions of Tuesday, accusing one of the na-vehicles last year and earlier this tion’s largest accounting firms ofyear. helping Lehman Brothers Holdings Toyota earlier this year paid a re- Inc. hide its financial weakness fromcord $16.375 million to resolve a re- investors before the bank finallylated government investigation, and collapsed in September of 2008.has agreed to pay the new fines with- Ernst & Young knew about, sup-out admitting any violations of U.S. ported and advised Lehman on itsauto safety laws, the U.S. Transporta- “Repo 105” transactions, in whichtion Department and the company the company labeled short-termsaid in statements released Monday. borrowings as sales, making Lehman In all, Toyota will have paid appear to investors less risky than itabout $49 million to the U.S. gov- really was, according to the com-ernment for infractions related to plaint. The audit firm also stood bythe recall of millions of vehicles glo- while Lehman allegedly misled ana-bally over gas-pedal and sudden-ac- lysts and investors on conference Reutersceleration problems. A fourth U.S. calls and in financial filings aboutinvestigation into the recalls is on- its levels of risk, particularly aftergoing, a U.S. official said. Toyota has vowed to ovehaul how it deals with U.S. regulators and consumers. Above, Toyotas on display in Tokyo. the firm’s stability began to crack The settlements come roughly 10 after the credit crisis began in 2007,months after Toyota Chairman and American executives more say in blows to its reputation for vehicle fects to safety regulators in a timely the complaint said.Chief Executive Officer Akio Toyoda quality and safety recall decisions. quality and corporate integrity. The fashion. One investigation was The attorney general’s office istestified before Congress to apolo- “These agreements are an oppor- company has lost 1.6 percentage prompted by the fatal crash in Au- seeking for Ernst & Young to paygize for his company’s handling of a tunity to turn the page to an even points of market share in the U.S. gust 2009 of a California Highway the state of New York the fees it ob-series of safety scandals that led to more constructive relationship” through Nov. 30 this year, while rivals Patrol officer and his family, who tained from Lehman from 2001 tothe recalls of more than five million with U.S. safety regulators, Toyota including Ford Motor Co. and Korea’s died when the trooper couldn’t stop the present, as well as investorvehicles for defects linked to unin- said in a statement. Hyundai Motor Co. have gained a Lexus from speeding up and damages. “Ernst & Young substan-tended acceleration. Mr. Toyoda Toyota’s agreement to pay the ground. crashed into another car. tially assisted Lehman Brothersvowed to overhaul the way the com- fines comes as the company is fight- Monday’s fines resulted from “Auto makers are required to re- Holdings Inc., now bankrupt, to en-pany deals with U.S. regulators and ing to regain momentum in the U.S. months-long investigations that de- port any safety defects to NHTSA gage in a massive accounting fraud,”consumers, including giving North market after suffering damaging termined Toyota failed to report de- Please turn to page 21 Mr. Cuomo wrote in his complaint. Ernst & Young declined to com- ment.A stir in U.S. over made-in-China stocks The suit alleges that Ernst & Young was aware Lehman’s Repo 105 transactions overstepped ac- counting rules, and that the ac- counting firm ignored warnings practices, these people said. capitalizations of under $500 from Lehman employees and from [ The Game ] China rising… and falling On Tuesday, the SEC filed a million. The companies tap into Ernst & Young staff about the pro- case in the area, settling a lawsuit the global fascination with priety of the transactions. RINO International share priceBY DENNIS K. BERMAN against accounting firm Moore Chinese markets, which are The accounting firm blessed Leh- $40 Stephens Wurth Frazer & Torbet creating dozens of new, high- man’s Repo 105 transactions from One of China’s LLP and one of its partners for its growth firms. the time Lehman became one of the least-noticed audits of China Energy, which was The problems stem, in part, firm’s most prominent clients in 30 exports to the U.S. listed on Nasdaq in 2005. from the way many small Chinese 2001, Mr. Cuomo said in his com- has been hundreds Behind the scenes, the House companies are audited. A plaint. Lehman hatched the idea for of Chinese 20 Financial Services Committee is company listing on a U.S. stock Repo 105 in 2001 in order to “reduce companies that revving into gear and may hold exchange must be audited by a the balance sheet,” according to a slipped onto U.S. hearings on Chinese-company firm registered with the “auditor’s memo from Lehman to Ernst & 10stock exchanges through back- accounting in 2011, according to a auditor”—known as the Public Young that is quoted in Mr. Cuomo’sdoor mergers with dormant shell person familiar with the matter. Company Accounting Oversight complaint.companies. 0 The committee’s fear is that some Board. The accounting firm collected Many of these small, high- 08 09 10 companies are rife with self- By this spring, some 340 more than $150 million in fees fromgrowth companies, including Source: FactSet Research Systems dealing and potential fraud, and Chinese companies listed on U.S. Lehman between 2001 and 2008, heindustrial companies RINO weak international standards have exchanges were using small, said in the complaint.International Corp. and China let that go largely undetected. largely unknown auditing U.S. In Lehman’s Repo 105 transac-Energy Savings Technology Inc., enforcement and corporation- More broadly, “the integrity of firms, who in turn may have been tions, the company shifted as muchhave minimal revenues, finance divisions have begun a the data could be flawed, and I contracting the work back out to as $50 billion of assets off of its bal-questionable accounting and wide-scale investigation into how don’t want this to be a junior local Chinese firms, according to ance sheet to foreign banks at criti-inscrutable corporate governance. networks of U.S. accountants, Madoff scandal,” Rep. Chris Lee the SEC’s chief accountant. cal financial reporting periods with Now, that back door may be lawyers and bankers have helped (R., N.Y.) said in an interview. It is perfectly legal for an a promise to buy back the securitiesstarting to close. The Securities bring scores of Chinese companies “China is the second-largest approved auditor to subcontract at a premium price days later, Mr.and Exchange Commission has onto the U.S. stock markets, these economy, and it’s growing at such the work to local accountants in Cuomo said in the complaint. Withbegun a crackdown on the people said. a rapid pace there is an China or elsewhere. But troubles the cash held in the meantime, Leh-practices of the “reverse The SEC has also begun opportunity for exploitation and are starting to pop up. man would pay down other debts,takeover” market for Chinese homing in on individual Chinese fraud.” In the case of China Energy, a appearing to have less debt and belistings, according to people with companies for accounting Today, most of the reverse- Chino Hills, Calif., auditor Kerry in better financial condition.knowledge of the probe. Its violations and lax auditing takeover stocks carry market Please turn to page 23 Federal regulators have yet to crack down on ‘window dressing’ ............ 23
18 THE WALL STREET JOURNAL. Wednesday, December 22, 2010 BUSINESS FINANCEToshiba aims for 3-D innovation China setsBY JURO OSAWAAND DAISUKE WAKABAYASHI power deal TOKYO—As Toshiba Corp. pre-pares to start selling the world’s in Brazilfirst glasses-free 3-D television setsin Japan this week, the Japanese BY DAVID WINNINGelectronics and industrial conglom- AND CHUIN-WEI YAPerate says it plans to go global witha larger model of over 40 inches in State Grid Corp. of Chinathe coming fiscal year. agreed to pay nearly $1 billion to The head of Toshiba’s TV opera- buy seven Brazilian power distribu-tions, Masaaki Osumi, said the new tors, the latest in a series of big betsTV, due sometime in the coming fis- by Chinese companies that rapidcal year starting in April, may offer economic growth in South Americathe option of watching 3-D with or will ignite energy demand.without glasses. The company plans Government-owned State Gridto reveal more details on the new also secured a 30-year concession toglasses-free TV at the annual Con- operate power lines, substations andsumer Electronics Show in Las Ve- other infrastructure that distribute Bloomberg Newsgas in early January, he said. power mainly to Brazil’s densely Tokyo-based Toshiba continues populated southeastern region,to push ahead with glasses-free, or which includes such big cities as Rio“autostereoscopic,” TV development de Janeiro and São Paulo.even as the company and its com- Toshiba’s Masaaki Osumi tries on a pair of 3-D glasses during the unveiling of the company’s Cell Regza 3-D TVs in July. The deal allows Brazilian author-petitors plow money into marketing ities to renew the license for a fur-3-D television sets requiring glasses. model Saturday. gets have glasses-free 3-D displays, But poor domestic demand could ther 20 years, China’s State-OwnedCompetitors have said the technol- B.K. Yoon, president of the vi- including Nintendo Co.’s new 3DS pose a challenge. Japan sales are Assets Supervision and Administra-ogy is still several years from being sual-display unit at Samsung said in hand-held game system due to falling after the government cur- tion Commission of the State Coun-market-ready for TVs, but Toshiba’s October that while 3-D without launch Feb. 26 and Sharp Corp.’s tailed a subsidy program this month cil said Tuesday.efforts could deter consumers from glasses is possible on phones and smartphones released earlier this aimed at encouraging consumers to State Grid is the world’s largestswitching to 3-D sets immediately, other small mobile devices, techni- month. buy energy-efficient appliances, and utility company, with 2008 revenuebased on expectations for glasses- cal hurdles remained for 3-D TV sets The Toshiba executive also said the program will end in March. of $164 billion. The company wasfree models to come soon. that would prevent the technology the company’s development of a Toshiba’s TV business has been founded in 2002 as part of China’s Mr. Osumi said Toshiba is con- from becoming mainstream in the new Internet-enabled TV running profitable for the past two fiscal efforts to overhaul and streamlinecentrating 3-D development efforts next five to 10 years. Google Inc. software is taking lon- years, but Mr. Osumi said a chal- its power grids, which had beenon the glasses-free technology, Creating the illusion of depth ger than expected. He said the com- lenging environment will make it managed by provincial governmentswhich he said he sees as a way for without special glasses is difficult: pany won’t demonstrate the new difficult to remain profitable next with competing interests.Toshiba and other Japanese firms to The effect can be created from only television at CES but aims to intro- fiscal year. State Grid said it expects thereclaim the technological advantage a limited number of viewing angles, duce it sometime next year. He said the TV markets in North Brazil deal will generate more thanlost to South Korean TV manufac- and stepping outside those viewing He declined to elaborate on the America and Europe are unlikely to $110 million in annual earnings.turers such as Samsung Electronics zones can cause images to be reason for the delays facing the In- return to the robust growth rates of A State Grid representative saidCo. and LG Electronics Inc. blurred or fuzzy. ternet TV, which will use the Google the past, while China, an overseas the acquisition involves the subsid- “Nobody thinks that we will be “The glasses-free 3-D TVs TV platform, a version of its An- bright spot, could face a glut of sup- iaries of Spanish companies Grupowearing glasses forever to watch Toshiba showed reminded us why droid operating system already ply as panel makers rush to build Cobra and Elecnor SA, as well as3-D TV,” he said. “It will have to be- we need the special glasses,” said widely used in smartphones and factories there. Brazil’s Grupo Isolux Corsán SA.come stress-free, without the hassle Ichiro Michikoshi, an analyst at tablet computers. Sony Corp. re- To offset the tough environment, China is targeting South Americaof putting on glasses every time. Tokyo-based market research firm leased Internet TV sets running Toshiba will try to increase sales in because there are few barriers to in-That’s the way it should be.” BCN. “Those TVs certainly set the Google’s software in October. emerging markets in Asia, the Mid- vestment and because the region’s Toshiba, the world’s sixth-largest direction for 3-D’s future, but it will In the current fiscal year through dle East and Africa. It will also try rapid economic growth—and risingflat-panel TV maker by units sold, take a while.” March 2011, Toshiba has targeted to reduce costs by further localizing energy consumption—are hard towill start selling 12-inch glasses-free While other 3-D TV sets on the sales of 15 million TV sets world- production. Mr. Osumi said Toshiba ignore. Brazil’s economy is on trackTV sets in Japan on Wednesday and market require glasses to create the wide. It aims to boost that figure to plans to start producing TVs in Rus- to expand 7.7% this year, accordingthen will offer the larger 20-inch illusion of depth, some small gad- 20 million units next fiscal year. sia and India by the middle of 2011. to Barclays Capital. INDEX TO BUSINESSES AND PEOPLEBusinesses Chrysler Financial....22,25 J.P. Morgan Chase...23,25 Shochiku..........................5 Clark, Ed........................22 Jamil, Mohammed Ichiro Michikoshi .......... 18 Scates, Greg ................. 23This index of businesses Citigroup ....................... 23 Kerry Properties...........29 Simclar..........................29 Cleveland, Jeffrey.........23 Khamil........................20 Morris, John..................22 Schwarzman, Steven....22mentioned in today’s Constellation Brands....21 Lehman Brothers Singapore Airlines........19 Codel, Franklin..............29 Jobs, Steve ..................... 5 Mueller, Joachim..........20 Shairifi, Sharif................6 Daihatsu Motor............20 Holdings.....................17 Sistema.........................16 Das, Pralay....................19 Juckes, Kit .................... 24 Murashima, Kiichi...........5 Shepherd, Freddie.........29issue of The Wall Street Daimler..........................20 Lend Lease...............20,25 Sony ......................... 18,25Journal is intended to Davidson, Iain...............29 Kameoka, Yuji...............25 Nayyar, Vineet..............19 Smith, Greg.....................3 Darden Restaurants.....25 LG Electronics...............18 State Grid Corp. of Chinainclude all significant Dassault Aviation.........16 Life Partners Holdings.14 Dresslar, Tom................23 Klingler, Christian.........20 Nolte, Paul....................25 Son, Masayoshi .............. 5 .......................................18reference to companies. Diageo...........................21 Lockheed Martin...........16 Droga, Marcus .............. 25 Leung, Blondy...............29 Osumi, Masaaki............18 Stromfeld, Lary.............23 Sukhoi Design Bureau..16First reference to the DRB-Hicom Bhd............20 Lufthansa......................19 Sumitomo ..................... 19 Fasano, Michael............15 Leung, Cusson...............29 Pardo, Brian D. ............. 14 Tamim, Walid..................6companies appears in Elecnor .......................... 18 Martek Biosciences......25 Sun Hung Kai Properties Gallois, Louis................19 Leung, Jay.......................1 Poon, Ricky ................... 29 Thomas, Anthony...........6bold face type in all Energy Resources.........25 Merck & Co. .................. 19 .......................................29 Ho, Barbara...................29 Louie, Paul ...................... 1 Pringuet, Pierre............21 Toyoda, Akio.................17articles except those Ernst & Young .............. 17 Microsoft.........................9 Suzuki Motor................20 Hurd, Mark....................25 Maris, David..................30 Raju, B. Ramalinga.......19 Wong, Brenda...............29 European Aeronautic Midland Realty.............29 Swire Properties.............1on page one and the Im Tae-geun..................25 Martin, Tony ................. 29 Rambourg, Erwan.........21 Yamagata, Kerry Dean.17 Defence and Space....19 Molycorp ....................... 19 Tech Mahindra..............19editorial pages. Fasano Associates........14 Moodys...........................6 James, Hamilton .......... 22 McCann, Steve..............20 Reilly, Kevin..................17 Yanai, Tadashi.................5 Toronto-Dominion Bank Ford Motor....................17 Morgan Stanley............23 ..................................22,25Adobe.........................9,25 Fortune Brands.............21 Motorola........................29 Toshiba..........................18Advanced Technology Fosters Group..............21 National Mineral Toyota Motor...........17,20 Corrections Amplifications Resource Group.........29 Freescale Semiconductor Development ............. 16 UBS ............................... 23American Express.........25 .......................................29 New World Development The trend and the scale were incorrect Genzyme ....................... 19 .......................................29 Verizon CommunicationsAnheuser-Busch InBev in a chart showing usable global com- NV..............................18 Goldman Sachs Group..23 Nikon.............................25 .........................................9 Corrected chart Google........................9,18 Nintendo ....................... 18 Volkswagen...................20 mercial stocks of oil that accompaniedAOL..................................9 Wells Fargo & Co..........29 World usable commercial-oil stocks,Apple............................5,9 Grupo Cobra..................18 OAO Severstal..............16 the continuation of the front-page Out- Yanzhou Coal Mining....25 look column Monday. A corrected chart days supply; 12-month moving averageASK ............................... 14 Grupo Isolux Corsan.....18 Oil & Natural Gas.........16 Henderson Land Pernod Ricard ............... 21 Zoom Diversified..........29 appears here, at right.AVS Underwriting ........ 14 20Bank of America......23,25 Development ............. 29 Pfizer........................19,30Berman..........................19 Hewlett-Packard......25,29 Posco.............................25 People Anheuser-Busch InBev NV is based inBHP Billiton..................25 Hindustan Aeronautics 16 Proton Holdings Bhd....20 This index lists the 16 Leuven, Belgium, but is largely underBilfinger Berger............25 Hino Motors..................20 Qantas Airways............19 names of business- Hitachi Metals..............19 Red Lobster .................. 25 Brazilian management. A CorporateBlackstone Group .... 22,29 people and government 12Boeing...........................16 Honda Motor.................20 RINO International.......17 News article Monday about Sara Lee regulators who receive Corp. incorrectly implied that InBev NVBrown-Forman..............21 Hyundai Electronics Rio Tinto....................3,25 significant mention in 8Carnival.........................25 Industries...................29 Rolls-Royce...................19 was based in Brazil when it bought An-Centaline Property Hyundai Engineering & Rosoboronexport State 16 Today’s Journal. heuser-Busch Cos. Agency ....................... 29 Construction.........25,30 Royal DSM....................25 4Cerberus Capital Hyundai Group..............30 Samsung Electronics....18 Atsushi Saito................22 Active-shutter 3-D glasses can be made Management....21,22,25 Hyundai Merchant Sanofi-Aventis..............19 Barrett, Doug................29 0 for as little as $15 after costing about 2007 ’08 ’09 ’10Cheung Kong Holdings...1 Marine...................25,30 Satyam ComputerChina Coal Energy........25 Hyundai Motor.........17,30 Services ..................... 19 Berger, Bilfinger...........20 $100 earlier this year. A front-page arti- Source: Oil Market IntelligenceChina Energy Savings Hyundai Steel...............25 Sharp.............................18 Brown, Edmund............29 cle Tuesday incorrectly said these were Technology.................17 Isuzu Motors ................ 20 Shepherd Offshore Cassidy, Donald T.........15 the selling prices.China Shenhua Energy.25 Johnson & Johnson......19 Services ..................... 29 Chung Mong-koo...........30
Wednesday, December 22, 2010 THE WALL STREET JOURNAL. 19 BUSINESS FINANCESatyam stock jumpson NYSE hopesBY RAGHAVENDRA UPADHYAYA Satyam, based in Hyderabad, isAND KENAN MACHADO in the midst of recovering from one of India’s biggest corporate scan- HYDERABAD—Satyam Com- dals. In January 2009, the companyputer Services Ltd. will seek to plunged into turmoil after itsagain trade on the New York Stock founder and then chairman, B. Ra-Exchange after filing its results malinga Raju, confessed to overstat-based on U.S. accounting standards, ing the company’s profits for yearsChairman Vineet Nayyar reiterated and holding a fictitious cash balanceTuesday, driving the Indian software of more than $1 billion. The damaged Rolls-Royce Trent 900 engine and wing section from a Qantas Airways Airbus A380 passenger jetexporter’s shares sharply higher. “If this [listing] happens, then Reuters, Australian Transport Safety Bureau report Satyam shares closed up 8.8% at they can seek more clients who EU eases tight jet rules69.05 rupees ($1.53) on the Bombay would want their vendors to file un-Stock Exchange, where the bench- der the U.S. GAAP,” said Pralay Das,mark Sensitive Index gained 0.9%. an analyst at brokerage Elara Capi- Satyam in late September said it tal.would delist its American deposi- Satyam is listed in India and istary receipts from the NYSE as itwas set to miss an Oct. 15 deadline now controlled by Tech Mahindra Ltd., which bought a stake through Regulator scales back inspections of Rolls-Royce superjumbo enginesto file its results with U.S. regula- a government-monitored auctiontors. On Sept. 29, Mr. Nayyar told and rebranded it Mahindra Satyam. BY ANDY PASZTOR agency said a review of manufactur- so quickly, particularly after such areporters that the company would The company has reported re- AND DANIEL MICHAELS ing and inspection data convinced dangerous event, indicates much ofseek to relist on the NYSE but didn’t sults for the year that ended March safety officials that many “lower the fleet is unaffected by oil-systemgive a time frame. 31, 2010, and for the April-June pe- European aviation regulators on risk” tubes are less prone to frac- manufacturing defects. The plan to again list Satyam on riod and for the July-September pe- Tuesday substantially relaxed tight ture and therefore don’t need such To further ensure the safety ofthe NYSE would be an important riod under Indian accounting stan- inspection rules covering Rolls- frequent checks. Rolls-Royce-powered A380 jets, Eu-step in the fraud-hit company’s road dards, but is still working accounts Royce Group PLC engines on Airbus The move to ease up on manda- ropean regulators previously alsoto recovery and its ability to attract that meet U.S. standards. A380 superjumbo jetliners, signaling tory inspections—barely four weeks ordered upgrades of Trent 900 elec-clients who require vendors to For the three months ended that safety concerns about the after they were imposed—suggests trical systems to prevent engineprove financial viability, usually Sept. 30, Satyam Computer reported planes are fading. that regulators and industry experts parts from turning dangerously fast,through their compliance with U.S. a net profit of 233 million rupees, The European Aviation Safety have agreed the engine’s safety a condition that can lead to disinte-accounting standards. compared with 975 million rupees Agency, dropping emergency man- problems are less widespread than gration of spinning disks. Those en- “The completion of the accounts for the April-June quarter. It was dates to inspect Trent 900 engines first anticipated. hancements already have been in-under the [U.S.] Generally Accepted the first time the company reported after every 20 flights, moved to re- A spokesman for Rolls-Royce, corporated into the A380 fleet.Accounting Principles is expected to quarterly earnings since the July- quire repetitive inspections of most which has scrambled to ensure the Problems caused by a manufac-take another six to eight months,” September period of 2008. of the engines after 100 flights. The safety and reliability of its Trent turing defect on an oil-supply tubeMr. Nayyar told shareholders at the Meanwhile, Mr. Nayyar said Sa- change is likely to reduce disruption 900s, said the company has been have been blamed for the explosivecompany’s annual general meeting. tyam plans to invest four billion ru- of flight schedules, according to in- “working closely with the regulators failure of a relatively new Trent en-“As soon as the accounts are done, pees to build offices at some special dustry officials. and our airline customers to achieve gine on the Qantas jet shortly afterwe will be happy to relist [on the economic zones in the southern cit- The tight rules were set by the a swift return” of the engines “to takeoff from Singapore. The faultNYSE].” ies of Hyderabad and Chennai. Com- European Union’s aviation authority normal operation.” has been found on the current fleet Satyam’s ADRs started trading panies with operations in special last month, and refined by Austra- When EASA in late November or- as well as at least one new planeon the over-the-counter market on economic zones get certain tax lian regulators in early December, dered stringent checks of Trent 900 slated for delivery to Qantas, ac-Oct. 14. breaks after a Trent 900 on a Qantas Air- engines after every 20 flights, many cording to industry officials. But on ways Ltd. A380 blew apart shortly industry officials projected that doz- Tuesday, EASA for the first time after takeoff from Singapore on Nov. ens of engines probably would have specifically defined what it consid-Hitachi Metals agrees 4. Investigators blamed a defective tube in the oil-supply system for prompting a chain of events that caused parts of the engine to over- hazardous defects. They expected lengthy efforts to identify and re- place suspect engines. But the latest decision by EASA ers to be an acceptable minimum thickness for the walls of the tubes. The Qantas aircraft’s autopilot system was able to function afterto rare-earth venture heat, turn too rapidly and spew out metal parts resembling shrapnel. EASA’s move follows intensive means substantially fewer of the su- perjumbo jets are affected. Earlier this month, Australian of- the engine failed, which Louis Gal- lois, chief executive of Airbus parent European Aeronautic Defence &BY TESS STYNES to begin construction of plants that inspections of Trent 900s on A380s ficials investigating the Qantas inci- Space Co., has said shows that the will process rare-earth elements. operated by Qantas, Singapore Air- dent said only three of 45 engines A380 “stood up remarkably well.” Molycorp Inc. and Hitachi Met- The agreement announced Tues- lines Ltd. and Deutsche Lufthansa failed the first round of inspections. The planes have redundant electri-als Ltd. agreed to form a joint ven- day followed news this month that AG. In its latest directive, the Lifting the emergency directives cal and hydraulic systems.ture to produce rare-earth alloys Japan’s Sumitomo Corp. agreed toand magnets, moving Molycorp buy $100 million, or more than 3%, Genzyme warms to deal talkscloser to establishing a rare-earth of Molycorp’s shares and providemanufacturing chain in the U.S. $30 million in financing as part of a The companies expect to sign a supply agreement.final pact in April and eventually Molycorp was formed in 2008 tobegin producing rare-earth magnets purchase the mine from Chevronused in a range of industries, includ- Corp. and went public in July. Using After months of playing hardball iar with the matter said. Sanofi has said Genzyme is tooing computers, health care, commu- material mined in past years, Moly- with Sanofi-Aventis SA, Genzyme Advisers for the companies are optimistic in its projection for Cam-nications and alternative energy. corp produces rare-earth elements Corp. is displaying a new willing- having discussions about price and path use on multiple sclerosis, andTerms of the preliminary agreement such as lanthanum, which is used in ness to talk about price and other a deal structure known as a contin- the French firm projects the drug’sweren’t disclosed. oil refining, and cerium, used in issues that have held up a deal, peo- gent value right, or CVR for short. MS revenues will register about The arrangement appears to glass polishing and automotive cata- ple familiar with the matter said. The structure is typically used when $700 million. Genzyme, meanwhile,move Molycorp closer to its goal of lytic converters. buyers and sellers can’t agree on a projects that sales will reach $3.5doing more than simply mine for Rare-earth elements are widely By Gina Chon, purchase price, and often kicks in billion in 2017. On Monday, Genzymerare earths. It also would help Japan used in high-tech applications and Anupreeta Das after an acquired company meets met with some of its investors toreduce its reliance on China, which for the military, and the world’s And Dana Cimilluca sales or regulatory targets. tout the potential of Campath.controls the vast majority of rare- near total reliance on China as a In Genzyme’s case, the CVR would Genzyme hasn’t invited Sanofi inearth mining and other processes in supplier is increasingly worrisome It’s still unclear whether the par- be largely tied to the performance of to conduct due diligence yet, but thatthe industry. to policy makers in Washington and ties can reach an agreement. But af- Campath, a Genzyme drug that is could be the next step if talks around Tokyo-based Hitachi is a top elsewhere. Chinese authorities re- ter Genzyme refused for months to currently used to treat leukemia but the CVR and price move ahead, themanufacturer of the lightweight cently compounded the worries by talk to France’s Sanofi about its is being tested for use on multiple people familiar with the matter said.magnets that the venture would slashing exports, citing the need to $18.5 billion hostile offer, there ap- sclerosis, the people familiar with the If Sanofi and Genzyme agree to aproduce, the companies said. limit environmental damage. China’s pears to be some hope that the two matter said. Both Genzyme and CVR in any deal, Genzyme’s share- Molycorp’s strategy long has Finance Ministry has announced sides can overcome their differ- Sanofi declined to comment. holders would stand to get an addi-been to replicate China, albeit on a plans to increase export taxes on ences, these people said. Genzyme is still unlikely to agree tional payment once the Cambridge,smaller scale, in mining rare earths metals next year, in what appears to Genzyme’s attitude change came to any deal at the $69-a-share that Mass.-based company hits a futureand producing items that use the be an effort to ensure that more after it reached out to third parties, Sanofi has offered, even if a CVR benchmark tied to sales of the Cam-metals. The Greenwood Village, production of items that use the such as Pfizer Inc., Johnson & structure is added on top of that path, according to the people famil-Colo., company refers to the strat- metals takes place in the nation. Johnson and Merck & Co. Inc., to price, the people familiar with the iar with the matter.egy as mine-to-magnets. A number of Japanese companies see if they were interested in ac- matter said. Sanofi doesn’t plan on Sanofi had been trying to court Molycorp said last week that it have approached Molycorp with an quiring all or part of Genzyme, immediately raising its offer, but Genzyme for months until it wenthad begun work ahead of restarting eye toward ensuring stable domestic these people added. So far, no com- company officials know they will hostile with its offer in October. Ear-active mining at its Mountain Pass, supplies as Chinese imports decline. pelling offer has emerged, prompt- have to eventually increase their of- lier this month, Sanofi extended theCalif., facility next year. The com- —James T. Areddy ing a fresh attempt to break the fer to get a deal done, people famil- tender offer for Genzyme, which waspany also has secured final permits contributed to this article. stalemate with Sanofi, people famil- iar with the matter said. set to expire on Dec. 10, to Jan. 21.
20 * * THE WALL STREET JOURNAL. Wednesday, December 22, 2010 CORPORATE NEWSVW rolls into Malaysia U.K. pulls officialVenture with DRB-Hicom to assemble up to 50,000 vehicles a yearBY K.P. LEE sembles auto models for Daimler said it might be difficult to serve from BSkyB deal AG’s Mercedes-Benz, Honda Motor the market effectively from just one BY ALISTAIR MACDONALD about cuts to welfare payments, KUALA LUMPUR—German car Co., Isuzu Motors Ltd. and Suzuki or two production facilities. “We are makes it clear that Mr. Cable is nomaker Volkswagen AG on Tuesday Motor Corp., said it will contribute always looking at opportunities,” he The U.K. government said Busi- fan of the deal.signed a pact with Malaysia’s DRB- about 70% of the initial investment said, when asked if there were plans ness Secretary Vince Cable would “I have blocked it using the pow-Hicom Bhd. to assemble as many as of about one billion ringgit while for more of such tie-ups in other play no part in a key regulatory de- ers that I have got and they are le-50,000 vehicles a year in Malaysia, Volkswagen will put in the remain- countries in the region, but he de- cision regarding Rupert Murdoch’s gal powers that I have got,” he said,after earlier attempts to enter ing 30%. clined to elaborate. News Corp. amid a political according to a tape on the newspa-Southeast Asia’s largest passenger- Volkswagen and DRB-Hicom said DRB-Hicom’s managing director, firestorm that erupted when he was per’s website late Tuesday. Mr. Mur-car market failed. in a joint statement Tuesday that Mohammed Khamil Jamil, said the caught on an undercover reporter’s doch’s “whole empire is now under The one billion ringgit ($318 mil- they will start the assembly of VW’s agreement between the parties al- tape saying he had “declared war” attack,” he added.lion) Malaysian assembly venture Passat model in DRB-Hicom’s Malay- lows for the production of between on Mr. Murdoch. Mr. Cable’s comments to the re-will be Volkswagen’s second in the sian plant in the fourth quarter of 40,000 and 50,000 vehicles a year. The revelation set off a multi- porters, as published by the DailyAssociation of South East Asian Na- 2011, with an initial annual capacity Mr. Khamil earlier had said the two front firestorm in the U.K.’s business Telegraph Tuesday morning, omit-tions, or Asean, region. Europe’s of “several thousand vehicles.” parties aim to produce some 30,000 and political worlds, and has impli- ted the critical remarks about Mr.largest auto maker by sales, which Christian Klingler, a member of vehicles annually by 2015. cations for both Britain’s new coali- Murdoch; those only came to lighthad last year agreed to set up a Volkswagen’s board of management, The Malaysian company has a tion government and for News when rival British Broadcastingplant in Indonesia that will produce said the company plans to expand plant with a production capacity of Corp.’s £7.8 billion ($12.1 billion) bid Corp. obtained a transcript of theits Touran multipurpose vehicle, its Malaysian line-up to include 96,000 vehicles a year. “We have to buy the 60.9% of broadcaster omissions. The Telegraph, owned bysaid it is also considering other pro- models such as the Jetta, and even- plenty of space to accommodate British Sky Broadcasting Group Telegraph Media Group Ltd., laterduction hubs in the region to fur- tually export the cars assembled in Volkswagen,” Mr. Khamil said, add- PLC that it doesn’t already own. released the missing remarks.ther boost sales in Southeast Asia. Malaysia to other Asean countries. ing that should production increase, On Tuesday, the BSkyB deal won “News Corporation is shocked VW’s partnership with DRB-Hi- Volkswagen has sold more than “expansion is a possibility.” approval from European Union regu- and dismayed by reports of Mr. Ca-com follows an unsuccessful second 12,000 vehicles in the Asean region Rising affluence has been boost- lators, as expected. ble’s comments,” a spokeswomanattempt by the German company to so far this year, but it has plans to ing motor-vehicle sales in Malaysia, Mr. Cable is a key Liberal Demo- for the company said before theform an alliance with Malaysia’s expand sales significantly with its Southeast Asia’s largest passenger- crat member of the government co- government acted. “They raise seri-state-owned auto maker, Proton new local production facilities, Mr. car market. According to the Malay- alition led by Prime Minister David ous questions about fairness andHoldings Bhd. Talks were called off Klingler said. He didn’t disclose a sian Automotive Association, vehicle Cameron’s Conservatives. In addi- due process.”early this year but no reasons were sales target. sales for the 11 months ended Nov. tion to his remarks about Mr. Mur- A spokeswoman for BSkyB and agiven. Earlier talks that started in With Asean’s diverse national 30 had risen 12.5% from a year ear- doch, Mr. Cable also made critical spokesman for Ofcom, the U.K.’s2004 collapsed in November 2007. markets and vehicle preferences dif- lier to 550,391 units despite recent comments about the coalition. telecommunications regulator, de- DRB-Hicom, which already as- fering across borders, Mr. Klingler economic uncertainties. Downing Street also stripped Mr. clined to comment. Representatives Cable of all responsibility for com- for Mr. Cable and the Department of petition and policy issues relating to Business, Innovation and Skills media, broadcasting, digital and didn’t immediately respond to re- telecommunications, representing a quests for comment. significant blow to one of Britain’s “The Daily Telegraph published most high-profile politicians. Mr. some of the comments Vince Cable Cameron described his business sec- made to our undercover reporters retary’s comments as “totally unac- today,” a spokeswoman for Tele- ceptable and inappropriate.” graph Media Group said Tuesday. The switch will also have impli- “We have made clear both in the pa- cations for Britain’s wider competi- per today and in interviews that we tion policy, which under the influ- have done that we will be publishing ence of the Liberal Democrats had further comments in the forthcom- been moving away from the ultra- ing days.” free-market philosophies typically She didn’t say why the newspa- voiced by Conservatives. per decided not to include Mr. Ca- Mr. Cable said he accepted the ble’s comments about Mr. Murdoch decision and apologized for the in its initial story. “embarrassment” he has caused the News Corp. is the publisher of government. The Wall Street Journal. It also The undercover tape, made by owns several U.K. newspapers. reporters at the Daily Telegraph —Laurence Norman posing as constituents concerned contributed to this article. Lend Lease to acquire Estimate Forecast Outward 10 Toyota’s global 8 vehicle sales, building firm Valemus in millions of 6 Overseas Toyota’s FT-EV II units 4 concept electric car, right, and a Prius hybrid Sources: the company; 2 Domestic car at the Guangzhou Associated Press 0 2010 auto show BY CYNTHIA KOONS share in the first full financial year (photo) 2007 ’08 ’09 ’10 ’11 AND GAVIN LOWER ending June 30, 2012. Lend Lease said it was attractedToyota targets 3% rise in vehicle sales MELBOURNE, Australia—Lend Lease Group agreed Tuesday to buy Valemus Australia from German par- ent Bilfinger Berger SE for 960 mil- to Valemus by its presence in the road, rail, social infrastructure, com- mercial- and industrial-building sec- tors and its government client base.BY YOSHIO TAKAHASHI company started compiling group- been cutting into profits at Toyota lion Australian dollars (US$957 mil- Lend Lease Chief Executive Steve wide sales data in 1999. Domestic and its local rivals. The Japanese lion), up to 30% less than Bilfinger McCann said the price tag was “at- TOKYO—Toyota Motor Corp. is sales are set to slump after the gov- currency is trading near a 15-year Berger sought from a stock-exchange tractive” and investors seemed totargeting vehicle sales growth of 3% ernment ended its incentive pro- high against the dollar. listing earlier this year. agree, driving its shares up 5.9%next year as it looks to capitalize on gram in September. On a Toyota-only basis, the car Valemus, an Australia-focused Tuesday to close at A$8.75.burgeoning demand in emerging The projected global sales would maker expects sales in China to rise construction company best known Meanwhile, Bilfinger Berger ismarkets in Asia to offset sagging mark the second straight year of 8% to 900,000 vehicles next year, for building the Sydney Opera considering spending up to €1 billiondemand at home. growth after a 13% tumble in 2009, while it sees its U.S. sales rising 9% House, has secured future revenue ($1.32 billion) on acquisitions fol- Toyota, the world’s biggest car when demand collapsed during the to 1.9 million. Sales are projected to of more than A$5 billion with over lowing the sale. The company is dis-maker by sales volume, said Tues- financial crisis. Toyota’s estimated gain 7% to 860,000 vehicles in Eu- 150 contracts on hand. posing of the unit as part of plans today that it aims to sell 8.61 million global sales for 2010 represent a 7% rope, while sales in the Middle East, When Bilfinger Berger tried to reduce its construction business, butvehicles world-wide in 2011, up from rise from the previous year driven Latin America and other overseas list Valemus in Australia in June, the cash inflow from the transaction andan estimated 8.37 million vehicles by solid sales at home and abroad. markets are expected to rise 6% to IPO was marketed at up to A$1.39 potential for financing mean it nowthis year. The sales projections in- This is an encouraging sign for 1.3 million. “The sales outlook looks billion, but it was pulled a month has scope to consider large take-clude vehicles sold by the company’s Toyota, which is still battling fallout a little bit too cautious,” said Ryo- later because the company was con- overs with an enterprise value ofDaihatsu Motor Co. and Hino Mo- from its massive global recalls of ichi Saito, an analyst at Mizuho In- cerned it wouldn’t get a good price €280 million to €350 million, Chieftors Ltd. subsidiaries. the past year. vestors Securities. in the market. Financial Officer Joachim Mueller While the Japanese car maker The solid sales forecast doesn’t Toyota’s projected decrease in its Lend Lease, a diversified prop- said in a conference call.looks to lift overseas sales by 8% guarantee healthy profit growth for domestic sales next year is worse erty group, is funding the acquisi- Bilfinger Berger has been ex-next year, it projects a fall of 12% to the next fiscal year, which starts in than the Japan Automobile Manu- tion from its cash reserves and a panding its services business1.93 million vehicles in domestic April, as the volume growth won’t facturers Association’s forecast for new five-year, A$225 million debt through acquisitions in recent years.sales—the biggest percentage drop be enough to offset the impact of a 10% decline in the overall Japa- facility. It expects the purchase to —Natali Schwaband the lowest volume since the the strength of the yen, which has nese market. add about 15% to its earnings per contributed to this article.
Wednesday, December 22, 2010 THE WALL STREET JOURNAL. 21 CORPORATE NEWS Stocking up | Pernod Ricard added several big brands over the past 10 years through acquisitions: U.S. firm 2001 2 005 20 0 8 seeks sale Purchase of 38% of Seagram’s wines and spirits business * Purchase of Allied Domecq ** Purchase of V&S Vin & Sprit AB of wine unit BY DANA CIMILLUCA AND DAVID KESMODEL Brown-Forman Corp., the maker of Jack Daniel’s whiskey, has put its €3.2 €6.6 €5.6 wine business up for sale, according to people familiar with the matter, billion billion billion becoming the latest small wine op- eration to hit the auction block at a challenging time for some parts of the industry. Brown-Forman, of Louisville, Ky., BRANDS ACQUIRED INCLUDED BRANDS ACQUIRED INCLUDED BRANDS ACQUIRED has hired investment bank Roth- schild to run the auction process, Martell cognac, The Glenlivet Beefeater gin, Ballantine’s Absolut the people said. Private-equity firms Scotch whisky, Chivas Regal Scotch whisky, Kahlua, Mumm and other global wine and spirits Scotch whisky champagne firms are expected to consider the business, which is unlikely to fetch much more than a few hundred mil- Notes: €1 billion = $1.3 billion; *Diageo was another buyer in the Seagrams deal **Certain brands were resold to Fortune Brands. Source: Pernod Ricard lion dollars. It is also possible that only part of the business will beSpirits brighten at Pernod Ricard sold, according to one of the people. Separately, Constellation Brands Inc., the world’s biggest vintner by sales, is close to selling the bulk of its non-U.S. wine portfolio to an un- identified buyer, people familiarUpturn in sales of high-end spirits could give a needed boost to the French drinks maker with the matter said. That deal, should it not fall apart, could come this week and fetch between $300BY CHRISTINA PASSARIELLO The company’s stock is up about HSBC analyst Erwan Rambourg. cent quarter, compared with 14% million and $400 million, the people 18% so far this year, as investors “But in hindsight, people will realize growth for the brand overall. The said. PARIS—Pernod Ricard, the com- have become more sanguine even it was a good acquisition because 18-year-old whisky is about twice Representatives for Constellationpany behind Absolut vodka, Chivas though the debt-reduction effort Pernod needed a vodka brand.” the price of the cheaper versions. and Brown-Forman declined to com-Regal Scotch whisky and Mumm isn’t going as fast as promised. Mr. Pringuet pledged a strict Other spirits giants also have ment.champagne, is raising a tentative “Everything is better in relative diet: to sell €1 billion of brands and sounded a more upbeat note lately, Constellation has been buffetedtoast to 2010 and drinking to the in- terms, but it’s too early to say we’ve reduce its debt to four times operat- particularly regarding the U.S., al- by a wine glut in Australia as welldustry’s health in 2011. returned to pre-crisis levels,” Mr. ing profit by 2012, from 5.4 times though consumer confidence re- as falling prices in the U.K., where The alcoholic-drinks business is Pringuet said in an interview, operating profit in June. He un- mains fragile. much of its wine is distributed.bouncing back from a two-year flanked by a wall of wine and spirits loaded brands such as Wild Turkey Diageo is seeing “signs of recov- Meanwhile, the sales for some ofdrought, and the holiday season bottles. “We will be happy to have whisky and Tia Maria liqueur. ery” in the U.S., including in the key Brown-Forman’s eight wine brandscould be the turning point, says Per- the Christmas season behind us.” But without a rebound in sales, bar-and-restaurant segment, Ivan have been sluggish in recent years.nod Ricard CEO Pierre Pringuet. The economic downturn hit Pernod Ricard’s debt target looked Menezes, president of Diageo’s Brown-Forman’s wine unit gener- That could provide Pernod Ri- drinks makers hard. With the senti- distant. In its latest full fiscal year, North America unit, told investors ated $310 million in sales in thecard with some relief as it struggles ment damped by layoffs and plum- ended in June, Pernod Ricard sales last week. “There are emerging, pos- company’s fiscal year ended into digest its acquisition of Absolut meting stock markets, consumers totaled €7.1 billion, down 2%. itive signs of life in fall retail sales,” April, down from $360 million intwo years ago, when it paid €5.6 bil- were in no mood to celebrate. In recent months, drinkers have he said. Diageo produces brands the year-earlier period.lion ($7.34 billion) at the peak of the Penny-pinchers drank at home sidled back up to the bar. Though such as Captain Morgan rum and It now accounts for just undermarket, financing the deal almost rather than in bars and restaurants unemployment remains high, con- Johnnie Walker scotch. 10% of the company’s net sales,entirely with debt. and switched to cheaper versions of sumers who have jobs have started Paul Varga, chief executive of which totaled $3.2 billion in its fis- Spirits at Pernod Ricard are vodka and whisky. Retailers kept spending again, Mr. Pringuet says. Brown-Forman Corp., the maker of cal year.much higher than they were a year their stock low, depleting their in- For Pernod Ricard, that is partic- Jack Daniel’s, told analysts this Its midprice flagship brand,ago. Sales of premium versions of ventory before reordering. ularly evident in sales to bars and month that “there’s more sanity in Fetzer, saw global sales volumes de-the company’s Martell cognac and Pernod Ricard was in a particu- restaurants, which account for 25% what we’re seeing” in U.S. holiday cline in fiscal 2010, slipping 5% toChivas Regal whisky have re- larly strained position. After it of its business in the U.S. After fall- pricing than in recent years. The 2.2 million cases. Most of the com-bounded, reversing the trend of con- bought Swedish drinks group V&S ing more than 10% last year, sales to winter-holiday period is key for pany’s higher-end wines, such assumers buying cheaper brands. Vin & Sprit AB, the parent of vodka the segment are flat this year, with makers of distilled-spirits. Bonterra and Sonoma-Cutrer, haveSales in the July-to-September quar- blockbuster Absolut, in spring 2008, a contrast between vibrant metropo- Brown-Forman said sales in bars continued to generate sales growthter increased 14% to €1.88 billion. the company’s debt stood at €13 bil- lises such as New York and the lag- and restaurants were starting to despite a tough economy. In New York and other cities lion. Though Pernod Ricard had ab- gard industrial states. grow, but said the environment re- Brown-Forman’s wine divisionwhere the economy is on the mend, sorbed two other major acquisitions “The value of a person’s stock mained volatile. Sales of spirits- ranks No. 10 in size among winerevelers are hitting bars again in in the past decade, catapulting it to market portfolio is not inconse- based drinks at U.S. bars and restau- companies in the U.S., according toboom-time style. The glut of cham- the world’s second-largest drinks quent; there’s a perceived feeling of rants are expected to rise by 2.3% in Wine Business Monthly. The unitpagne in France has dried up, and group behind Britain’s Diageo PLC, wealth,” says Mr. Pringuet. 2011, according to a report by Tech- sells about 4.5 million cases in theMr. Pringuet expects more full-price investors worried Pernod Ricard Consumers are spending on more nomic Inc., a food and beverage con- U.S. and another 1.5 million outsidebubbly sales this season—good news paid too rich a price for Absolut. upscale versions of alcohol again. sultancy. the country per year. Brown-Formanfor Mumm and its other champagne “I can’t think of worse timing for For instance, its 18-year Chivas Re- —David Kesmodel sold its Italian wine brands—Bollabrand, Perrier-Jouet. an acquisition than Absolut,” says gal whisky grew 32% in the most re- contributed to this article. and Fontana Candida—in December 2008. Some spirits companies haveU.S. fines Toyota over safety lapses linked to recalls also found the wine business chal- lenging because it is capital inten- sive and wine consumers tend to ex- periment with different brands, Continued from page 17 problems with accelerator pedals that said sticky pedals and entrapment The department said that after making it harder to build the brandswiftly, and we expect them to do so,” stuck open in certain cases, and floor by floor mats “are currently the the company recalled certain Hilux loyalty enjoyed by many liquorsaid David Strickland, head of the Na- mats that came loose and trapped ac- only two known causes of unin- trucks in Japan in 2004, it told U.S. products.tional Highway Traffic Safety Admin- celerator pedals. Both problems were tended acceleration in Toyota vehi- safety regulators that the were no Some have shed big wine brandsistration. “NHTSA acknowledges Toy- linked to reports of Toyota vehicles cles,” but added that the NHTSA is reports of problems in the U.S. But in recent years. Fortune Brandsota’s efforts to make improvements to speeding out of control. still investigating other possible in 2005, Toyota told NHTSA the Inc., which makes Jim Beam andits safety culture, and our agency will Toyota recalled 55,000 vehicles in causes with the help of engineers steering defect was present in sev- Maker’s Mark bourbon, sold its U.S.continue to hold all auto makers ac- September 2007, blaming out-of-po- from the National Academy of Sci- eral models sold in the U.S. and con- wine business to Constellation, forcountable for defects to protect con- sition floor mats. But after the 2009 ences and NASA. ducted a recall for nearly one mil- $885 million, about three years ago.sumers’ safety.” fatal crash of the state trooper in In the second case, Toyota agreed lion vehicles. Foster’s Group Ltd., the Austra- Toyota’s board in Japan voted ear- Santee, Calif., NHTSA reviewed to pay just over $16 million for fail- In May 2010, NHTSA received ad- lian wine and beer maker, earlierlier in the day to settle with the U.S., crash evidence and other data and ing to promptly tell regulators about ditional information, including com- this year rejected a bid for its slug-an Obama administration official said. found that removing floor mats was problems with defects in the steer- plaints from U.S. consumers, that gish wine operation from a suitor The Transportation Department insufficient and that the pedal itself ing systems of certain trucks that Toyota had not disclosed when it reported to be private-equity firmsaid Toyota agreed to pay a nearly was improperly designed, the could result in the loss of steering initially notified NHTSA that a U.S. Cerberus Capital Management LP.$16.4 million fine for failing to prop- agency said. control, the Transportation Depart- recall was unnecessary, the agency —Anupreeta Daserly disclose what it knew about The Transportation Department ment and Toyota said. said. contributed to this article.
22 THE WALL STREET JOURNAL. Wednesday, December 22, 2010 MARKETSTSE tries to boost Mothers Fed steps in as lendersExchange shortens screening process for listings on start-up market as IPOs have dwindledBY KANA INAGAKI seek dollars TOKYO—The Tokyo Stock Ex-change will speed the screening pro-cess for new listings on the small- in Europecap Mothers market in March, in an BY DAVID WESSELeffort to spur growth in the stag-nant market for start-up firms, the European banks are short of U.S.exchange’s president said. dollars, again. And the U.S. Federal TSE head Atsushi Saito said at a Reserve is coming to the rescue,news conference on Tuesday that a again.decline in confidence in the Mothers With the cost of swapping eurosmarket has slowed the flow of initial into dollars at the highest levelpublic offerings from up-and-coming since May, European banks, whichcompanies. need dollars, are feeling the pain. Only six businesses have listed Amid angst about their health, Eu-this year on the Mothers market, ropean financial institutions thatwhich was launched in 1999. That need dollars in thin year-end trad-compares with a peak of 57 in 2004, ing are being forced to pay an un-according to the TSE’s website. usually large 0.66 percentage points “These listing measures are above dollar London interbank of-aimed at revitalizing the market,” fered rates, Reuters reported. Bloomberg NewsMr. Saito said. So the Fed on Tuesday said it Japanese markets for venture will renew through Aug. 1 its agree-firms have struggled for years to ments with the European Centrallure back investors who were driven Bank, as well as the central banks ofaway by a string of accounting scan- Atsushi Saito, shown in November, said a decline in confidence in the Mothers market has slowed the flow of IPOs. England, Canada, Japan and Swit-dals. zerland, to lend them dollars. The The decline in new listings on anticipate two consecutive years of submit in listing applications. The TSE has made other changes agreements had been set to expirethe market of high-growth and profit growth are generally able to In terms of delisting standards, to the listing requirements in the in January.emerging stocks—or Mothers—was list on the market, the TSE’s new companies that have been listed on wake of the accounting scandals, in The renewed swap lines “re-triggered after the 2006 delisting of rules will allow companies that the Mothers market for 10 years will an effort to restore investors’ confi- spond to the re-emergence ofInternet start-up Livedoor when its don’t meet the profit-growth crite- face the same requirements used on dence. In late 2009, the exchange strains in short term funding mar-founder was jailed for his role in a ria to list if they can outline longer- the TSE’s first and second sections. said it would delist companies fromsecurities fraud. term growth prospects. Under the new regulation, a the Mothers market if their share The TSE is aiming to help com-panies list on the market by short- However, the rules will also make it harder for venture compa- company will be delisted from the Mothers market if its market capi- prices fall to less than 10% of their IPO prices within three years of list- The Fed said it will renewening the screening process to two nies with weak growth prospects to talization falls below one billion yen ing, and if the prices don’t recover agreements to lend dollarsmonths or less from the currentfour months. enter and remain on the market through stepped-up examinations of ($11.94 million) and stays below that level for nine months. The previous within nine months of submitting business-improvement plans to the to central banks that were Also, while only companies that the financial statements companies threshold was 500 million yen. exchange. to expire in January.Blackstone manages to raise TD Bank will kets in Europe. They are designed to improve liquidity conditions in glo- bal money markets and to minimize buy Chrysler the risk that strains abroad could$15 billion for buyout fund spread to U.S. markets, by providing Financial foreign central banks with the ca- pacity to deliver U.S. dollar funding to institutions in their jurisdic- BY CAROLINE VAN HASSELT tions,” the Fed said.BY GREGORY ZUCKERMAN meltdown, we are still far from the Analyst Ian Lyngen of CRT Capi- halcyon days” of 2006-2007, said TORONTO—Toronto-Dominion tal Group promptly emailed clients: Blackstone Group is finalizing a John Morris of Harbourvest Part- Bank, Canada’s second-largest bank “Not surprising, but on an otherwisenew $15 billion fund, the largest ners, an investor in private-equity in assets, confirmed it will buy uneventful morning it is a bond-fund for buyout deals since the fi- firms. “Any manager that can raise Chrysler Financial Corp., the auto bullish recognition that back-up li-nancial crisis erupted and one of the over $5 billion in this market is an lender owned by Cerberus Capital quidity facilities are still warrantedlargest on record. outlier.” Management LP, for about $6.3 bil- in the current environment.” The big sum is the latest sign of A Blackstone spokesman de- lion to expand its reach nationally in The Fed began lending dollars toimproving interest in private equity clined to comment. the U.S. market. foreign central banks amid a scram-and of the power of some well- The new fund is smaller than Chrysler Financial gives TD a ble for dollars in Europe during theknown firms to attract investors, Blackstone’s last fund, a $21.7 billion platform for growth in the North worst of the global financial crisis.despite some high-profile losses in fund that had a final close in No- American automotive lending mar- By the end of December 2008, Fedthe industry over the last few years. vember 2006, still the biggest on re- ket, allowing it to boost its con- swaps amounted to $545 billion,The fund will be the sixth-largest on cord. sumer loan portfolio, TD said. It es- about a quarter of all the credit hadrecord, based on information from To raise money, top Blackstone timates the business could generate it put into the economy. One of ev- Bloomberg Newsdata tracker Preqin. executives, including founder Steven a return on invested capital of about ery four dollars that the Fed lent Still, it wasn’t easy to get there. Schwarzman and President Hamil- 20% in three to four years. then was going not to U.S. banksThe firm had to hunt world-wide to ton “Tony” James, crisscrossed the “It’s the foundation we need in but, through foreign central banks,find enough investors for the much- globe, meeting with investors that the U.S.,” TD Chief Executive Ed to banks such as BNP Paribas SA inanticipated fund, which Blackstone Blackstone’s Hamilton ‘Tony’ James never had much or any cash with Clark said on a conference call. The France or Commerzbank AG in Ger-has been pursuing since late 2008, Blackstone, such as government and acquisition “doesn’t require a physi- many. As of Dec. 15, the Fed hadaccording to people familiar with cerns with private equity that have private entities in China, Singapore, cal presence and local expertise” only $60 million in swaps with for-the matter. grown since the financial crisis, in- Taiwan, Australia and Malaysia, ac- and strengthens the bank’s ability to eign central banks outstanding. China and East Asia represented cluding the long-term and illiquid cording to people close to the mat- generate assets, he said. The European Central Bank can,nearly 20% of the new fund’s com- nature of the investments. It has ter. The Canadian lender expects the of course, print euros, but it can’tmitments. also been harder for private-equity About $500 million of commit- purchase to be neutral to earnings print dollars. So under the agree- Though most of Blackstone’s firms to return cash to their inves- ments have come from new inves- in 2011 on an adjusted basis, adding ments, the Fed—for a fee—lendslongtime investors in the U.S. and tors, since the IPO market remains tors in Latin America, the people about $100 million in adjusted earn- dollars to central banks in exchangeEurope are participating, they have difficult. said. New money also has come ings in 2012. for euros or other currencies. Thecommitted smaller sums compared “It was like a rock fight,” said from investors in the Middle East. Chrysler Financial, which no lon- dollars are then lent to local com-with previous funds, these people one Blackstone executive who was Shares of Blackstone have disap- ger is affiliated with the auto maker, mercial banks. The foreign centralsay. part of the fund-raising effort. “A pointed over the past year, partly has seen improved performance banks take the risk that the money To entice interest, Blackstone long hard fight.” because of concerns that the firm lately. TD said it believes the auto won’t be repaid.gave those willing to write checks of As recently as two months ago, wouldn’t be able to raise big funds lender’s origination potential is Fed lending to overseas centralabout $500 million better terms the firm signaled the fund would be on the heels of the financial crisis. greater than $1 billion a month by banks occasionally draws criticismthan others, according to the peo- sized at about $13.5 billion. Some As of Monday, Blackstone’s shares 2013. from Capitol Hill. The Fed disclosesple. In the past, a $1 billion commit- executives said they were doubtful were up less than 8% over the past The acquisition is the latest in a the lending weekly and posts a de-ment was needed to elicit improved the fund could get much larger. year, compared with a gain of nearly string of U.S. purchases by Canadian tailed tally of swaps with foreignterms, they say. “Although the fund-raising envi- 12% for the Standard & Poor’s 500. banks, which have weathered the fi- central banks. The Fed also has re- Some of the fund-raising chal- ronment is better now than it has Blackstone shares were up 2.7% nancial crisis and recession better leased the legal agreements withlenges stemmed from investor con- been at anytime since the financial Tuesday morning in New York. than most of their U.S. peers. other central banks.
Wednesday, December 22, 2010 THE WALL STREET JOURNAL. 23 MARKETSBanks look to profit on muni fearsAs finances of U.S. cities and states weaken, derivatives dealers aim to sell more CDS contracts on bondsBY KATY BURNE who has been retained by the banks to advise them on standardizing Some of the world’s biggest muni CDSs.banks are lining up to profit from Investors are jittery about theworries about the declining finances municipal-bond market, providingof U.S. cities and states. ample volatility for swaps users to For the first time in two years, trade around. Many bondholdersSwitzerland’s UBS AG has begun had long assumed local govern-making markets in derivatives tied ments would never have a legiti-to municipal bonds and other secu- mate fiscal crisis because they couldrities. The credit-default swaps obli- continue raising taxes to cope withgate swap sellers to compensate the costs of servicing their debt.buyers if a municipal issuer misses But Vallejo, Calif., is reorganizingan interest payment or restructures in a rare municipal bankruptcy, andits debt. Harrisburg, Pa., last week joined the Separately, five large derivatives state’s oversight program for dis-dealers—Bank of America Corp.’s tressed cities amid calls for it to fileBank of America Merrill Lynch, Citi- for bankruptcy, too.group Inc., Goldman Sachs Group After 17 consecutive weeks of in-Inc., J.P. Morgan Chase & Co., and flows into U.S. muni-bond funds, in-Morgan Stanley—met last month in cluding exchange-traded funds, theNew York to discuss standardizing last five weeks saw $9.1 billion ofthe paperwork for “muni CDSs” in outflows, according to data froman effort to attract more buyers and Lipper, a Thomson Reuters unit.sellers. Risk premiums on triple-A-rated The issue is politically explosive. corporate debt over risk-free gov-States and cities are suspicious of ernment debt have declined byCDSs, saying they encourage specu- 1.22% over the past month, accord- Getty Imageslators to bet on, and at times ing to Bank of America Merrillworsen, states’ financial distress. Lynch index data, but risk premiumsCalifornia is about to require all 86 have climbed 14.3% in the case ofof its underwriting banks to disclose California Governor-elect Jerry Brown, left, meeting on California’s budget this month. With him is controller John Chiang. triple-A muni debt.what CDSs they have traded on the Likewise, insurance on a defaultstate’s debt, either for customers or The total value of CDSs written and administered by CDS pricing Jeffrey Cleveland, senior economist from California and Illinois, two offor their own accounts. on California grew 35% in the last service Markit, includes a range of at Los Angeles money manager the most commonly quoted CDS But just as states grow fearful of year, according to Depository Trust municipal obligations, including Payden & Rygel. “They’re looking contracts, has become more expen-more muni CDS trading, federal reg- & Clearing Corp., but on a net ba- bonds used to finance public proj- for the next subprime.” sive. As of Monday, the cost of pro-ulators are trying to streamline and sis—reflecting the actual exposure ects like local retirement communi- Those selling muni CDSs de- tection against a California defaultbring more transparency to the de- once buy and sell contracts have ties and schools. clined to comment on the record. was 295 basis points, or hundredthsrivatives market, which may have been offset—declined 5.8%. Muni CDSs are still thinly traded But they say that despite being a of a percentage point, equivalent tothe effect of expanding the number The size of the municipal CDS because the contracts are highly target of politicians, their instru- $295,000 a year for 10 years of in-of muni CDS contracts outstanding. market is about $50 billion, making customized and difficult to unwind. ments don’t control the market; surance on $10 million of bonds, ac- “There is no evidence that CDS it relatively tiny compared with the Two-thirds of muni-bond buyers are they only reflect it. cording to Markit. A year ago, thetrading has provided any benefits to size of the overall municipal-bond households and individuals invest- “By improving the liquidity and same protection was $253,000. Thethe municipal-bond market, and fur- market, which is $2.8 trillion. ing through mutual funds, who don’t transparency of the municipal CDS cost of protecting that much Illinoisther, we have seen little evidence CDSs can be purchased to pro- use derivatives. Hedge funds, mean- market, it will improve the second- debt was around $318,000 a year,that it serves much purpose beyond tect against a problem with a single while, are muni CDS buyers. ary market pricing of municipal compared with $161,000 a year ago.allowing speculators to get rich,” municipal issuer, or on an index “In the spring, when we saw bonds, and that ultimately helps Large-scale municipal defaultssaid Tom Dresslar, spokesman for tracking a basket of 50 states, cities muni CDS costs start rising, we borrowing costs for issuers,” said are rare, and losses are more likelythe California state treasurer’s and other tax-exempt issuers. That found out it was hedge funds trying Lary Stromfeld, partner at law firm on nontraditional debt, such as eco-office. derivatives index, called the MCDX to profit from a muni disaster,” said Cadwalader, Wickersham & Taft, nomic development bonds.New York leads way in the ‘repo’ chase Made-in-China stock listingsBY MICHAEL RAPOPORT loan crisis who now teaches eco- reduced a form of short-term bor- The SEC proposed new disclo- In 2001, the regulator of the na- nomics and law at the University of Missouri-Kansas City. “It’s the usual rowing, known as repurchase agree- ments, or “repos.” sures about short-term borrowing to help investors spot when compa- cause a U.S. stirtion’s biggest banks told its examin- problem of what you do with a ubiq- The banks dropped their loans nies are window dressing. In a Continued from page 17ers to be on the lookout for firms uitous practice,” he said. by an average of 42% at quarter’s speech this month, SEC Chairman Dean Yamagata failed to “exercisewhose regulatory filings made them Bank regulators’ apparent reluc- end from its peak level during the Mary Schapiro said “misleading professional skepticism and duelook healthier than they really were. tance to crack down on window same quarter, only to raise it again ‘window dressing’ in quarterly re- professional care” in reviewingThat followed guidelines issued in dressing comes as agencies assume after the start of the next quarter, ports” was one factor that has fos- company filings in 2004 and 2005,1990 that said banks could face dis- even more authority for overseeing according to the Journal analysis. tered investor skepticism. according to an SEC proceedingciplinary action if their filings “have the banking system in the wake of Window dressing came to the But the SEC said it hasn’t found that ordered the disgorgement ofsignificant inaccuracies or are ‘win- the Dodd-Frank law’s overhaul of fi- forefront as an issue in March, when any widespread inappropriate prac- $129,500.dow dressed.’ ” nancial regulation. a bankruptcy-court examiner’s re- tices in companies’ repo accounting. In 2006, the SEC sued China En- But it was the New York attorney Bank regulators may have pres- port said Lehman had used a win- It hasn’t taken public action against ergy for violating federal securitiesgeneral—not the Office of the sured some banks privately. But fed- dow-dressing maneuver it called any companies over the issue be- laws soon after its shares stoppedComptroller of the Currency, the eral regulators have been criticized Repo 105—accounting for repo yond requiring more disclosure. trading on Nasdaq.bank regulator—who filed a lawsuit for their inaction and coziness with transactions as sales instead of bor- The Federal Deposit Insurance More is coming. “The SEC has cer-alleging accounting firm Ernst & banks they police. rowings—to take as much as $50 Corp. said in a statement its exam- tainly been focusing on it,” said GregYoung LLP allowed Wall Street bro- Though Lehman’s transactions, billion in assets off its balance sheet iners also look for window dressing Scates, deputy chief auditor at theker Lehman Brothers Holdings to designed to remove assets from the before its 2008 collapse. and take appropriate action when PCAOB. “Some work papers are infake its books so it could appear fi- balance sheet, were of a different Securities and Exchange Com- improprieties are found. But it Chinese and the U.S. auditors can’tnancially healthier. type than most others, many banks mission inquiries subsequently noted banks must report average even read them. And so there is no Lehman was fingered by the ex- have engaged in window dressing on turned up billions of dollars in repo balance-sheet figures that would way that the auditor can conduct aaminer looking into its bankruptcy a broader scale—systematically re- transactions that Bank of America make clear when they are reducing review or perform appropriate super-last March, and other banks have ducing their debt before reporting Corp. and Citigroup Inc. acknowl- debt at the end of a period. The vision of staff.”admitted they engaged in similar financial results. The practice isn’t edged they had accounted for incor- FDIC said sometimes questionable Such fears became real after Nas-“window dressing” practices that illegal, though intentionally masking rectly—classifying them as sales practices arise from a bank’s broker- daq-listed RINO International, a Da-masked debt from investors’ view. debt to deceive investors violates when they should have been bor- dealer operations, which are outside lian, China maker of environmental But federal regulators, who were guidelines set by regulators. rowings, akin to what Lehman did the agency’s purview. products, disclosed accounting flawsblamed for failing to stop financial In a statement, the OCC said it with its Repo 105s. FDIC regulations point to the in autumn. RINO was delisted, and itabuses that led to the subprime- would take appropriate action if In the cases of Bank of America Federal Reserve, which “will dis- withdrew its 2008 and 2009 finan-mortgage crisis, haven’t acted. necessary. and Citigroup, the amounts were courage temporary balance sheet cial statements. Today, its shares “They haven’t taken any signifi- A Wall Street Journal analysis relatively small in the context of adjustments or any other ‘window trade on the Pink Sheets.cant action in pretty much forever,” found that, since the beginning of their giant balance sheets, and the dressing’ practices.” A Federal Re-said William K. Black, a bank regula- 2009, the group of 18 large Federal banks said the inaccurate account- serve spokeswoman declined to firstname.lastname@example.org;tor during the 1990s savings-and- Reserve primary-dealer banks has ing was inadvertent. comment. Twitter.com/dkberman
24 THE WALL STREET JOURNAL. Wednesday, December 22, 2010 THE INTERNATIONAL INVESTORSwiss franc hits U.S. Treasurys hold steady Fund of Funds - Event FUND SCORECARDnew high on euro on Fed buys These funds have at least 50% of their portfolios in event-driven strategies. Merger/convertible arbitrage, distressed securities and corporate actions. Ranked on % total return (dividends reinvested) in Euros for one year ending December 21, 2010 BY DEBORAH LYNN BLUMBERG Leading 10 PerformersBY JAVIER E. DAVID rency strategist at UBS AG in Stam- FUND FUND LEGAL % Return in $US ** ford, Conn. NEW YORK—Treasury prices RATING * NAME FUND MGMT CO. CURR. BASE YTD 1-YR 2-YR 5-YR NEW YORK—The Swiss franc In early afternoon trade, the held their gains as the market ab- NS Man Man Investments USDCYM NS 11.86 -1.45 -0.14strengthened broadly Tuesday, hit- euro was at $1.3114 from $1.3126 sorbed another purchase by the DistressedStrategies-ClassSOI3 (CH) AGting a record high against the euro late Monday. The dollar was at 83.81 Federal Reserve, with a second 4 Thames River Thames River USDCYM 6.02 10.33 7.46 6.98after Moody’s Investors Service yen from 83.74 yen. Sterling traded round due later. Distressed Focus A USD Capital Uk Ltdwarned it was placing Portugal’s at $1.5457 against the dollar, from The Federal Reserve Bank of New NS AIG Falcon Fund USDCHE 5.86 7.96 6.96 2.89credit rating on review for a possi- $1.5510. The dollar traded at 0.9589 York bought $7.79 billion in Trea- DiversifiedStratIIEventDrivenI Management (Switzerland) Ltdble downgrade. Swiss franc from 0.9652 franc. sury debt in the latest operation of NS Pan Special A.H. Haynes Co., USDUSA 4.35 7.17 NS NS The news reig- The ICE Dollar Index was slightly the Fed’s quantitative-easing pro-CURRENCY Opportunities, L.P. Inc. nited worries about higher on the day at 80.560. gram. Dealers of-MARKETS the euro zone and Traders said that heavy selling of U.S. CREDIT fered $18.224 billion 3 Key Recovery Key Asset USDCYM 3.43 5.10 8.52 2.82 prompted investors the euro/Swiss franc forced the euro MARKETS in debt maturing USD Management (UK) Ltdto seek a haven in Switzerland’s cur- lower against the dollar, which hov- from 2016 to 2017. NS Momentum Pioneer USDBMU NS 4.80 -3.13 -1.43rency. ered near session lows at $1.3120. In the afternoon session, the Fed Allweather Excel Alternative Investment Mgmt Ltd The euro fell to a record low at Against the yen, the single currency was to buy two-year to 30-year 3 HSBC Multi HSBC Management USDCYM 3.23 4.48 8.66 2.831.2599 Swiss francs. The Swiss franc traded at 109.85 yen, within view of Treasury inflation-protected securi- Adviser Arb S USD (Guernsey) Limitedalso hit a record high against the its lowest level in nearly three ties, with purchases of $1 billion to 5 SHK SHK Fund USDCYM 3.28 4.09 9.89 28.63U.K. pound, which traded near 1.4811 weeks. $2 billion expected. CorporateArbitrageManagerC Management Ltdfrancs, and sent the dollar to U.S. “The market is fairly skeptical Late morning in New York, the NS CS PST (Lux) Credit Suisse Fund USDLUX 0.98 3.68 2.18 2.73session lows against the franc near that the rating agencies are ahead benchmark 10-year note was up Event Driven B EUR Management S.A.95.85 centimes. of the game,” said Alan Ruskin, glo- 5/32, or $1.5625 for each $1,000 in- While the single currency got a bal head of G-10 foreign exchange vested, pushing the yield down to 2 Momentum Pioneer USDBMU 3.15 3.65 6.80 1.38modest boost from news that strategy at Deutsche Bank in New 3.328%, as prices and yields move AllWeather Fund Alternative Investment Mgmt LtdChina’s Vice Premier Wang Qishan York, adding that traders were in- inversely. The two-year note fell 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 Roadsaid his country supports the mea- clined to sell the single currency 1/32 to yield 0.606%. The 30-year 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: email@example.com taken by European officials to even before Moody’s warned about bond rose 9/32 to yield 4.44%. Phone: +44 (0)203 107 0038; Fax: +44 (0)203 107 0001stabilize markets, the effect proved Portugal. Bonds already were tradingshort-lived. While Moody’s said the euro higher before the Fed purchases, as Unnerved investors bought the zone has the financial and political concerns about the financial well- $14.57 billion of Treasurys. while on interest rates, inflationSwiss currency, traditionally a haven wherewithal to contain its sover- being of euro-using nations rolled The market has recovered some- tame and unemployment high—de-from market instability, as concerns eign-debt woes, many other market on, prompting investors to seek out what from last week’s sharp selloff spite the market’s selloff the lastabout the euro zone rose to the fore observers are skeptical about Eu- low-risk Treasurys. Tuesday, and continues to try to eek out few months. “People do want to buyin holiday-thinned trading. rope’s long-term prospects. Moody’s Investors Service Inc. more gains heading into year end. at some point,” he said, and espe- “Franc strength is basically a As a result, they have bought warned it may cut Portugal’s credit Mike Chang, an interest-rate cially the front end, with the Fedfunction of concern about the euro Switzerland’s currency despite the rating by as much as two notches. strategist at Credit Suisse in New keeping rates low. “It’s really aboutzone’s troubles. Thin liquidity exag- country’s policy makers warning With little data to digest, the York, said investors still believe timing. People are wary about thingerates part of the move,” said that the franc’s strength was not market was again left to focus on there is value in holding Trea- trading and are waiting until nextAmelia Bourdeau, senior G-10 cur- welcome. Fed buying. Monday, the Fed bought surys—with the Fed on hold for a year to buy.” 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 12/20 EUR 6.81 8.2 8.1 22.8 Gl Bond AT OT OT LUX 12/20 USD 9.48 6.6 5.6 9.9 Gl Thematic Res. B GL EQ LUX 12/20 USD 14.82 15.0 17.7 38.5 Eur Income C OT OT LUX 12/20 USD 8.93 8.2 8.1 22.8 Gl Bond B OT OT LUX 12/20 USD 9.48 5.4 4.7 8.9 Gl Thematic Res. I GL EQ LUX 12/20 USD 19.22 17.0 19.8 41.0 Eur Income C2 OT OT LUX 12/20 EUR 13.94 8.7 8.2 22.8 Gl Bond B2 OT OT LUX 12/20 HKD 115.08 5.6 4.6 8.9 Gl Value A GL EQ LUX 12/20 USD 11.37 2.1 3.9 17.0 Eur Income C2 OT OT LUX 12/20 USD 18.29 8.7 8.2 22.8 Gl Bond B2 OT OT LUX 12/20 USD 14.80 5.6 4.6 8.9 Gl Value B GL EQ LUX 12/20 USD 10.34 1.0 2.9 15.9 Eur Income I OT OT LUX 12/20 EUR 6.81 9.2 9.2 24.0 Gl Bond BT OT OT LUX 12/20 HKD 73.95 5.5 4.6 8.9 Gl Value C GL EQ LUX 12/20 USD 11.00 1.6 3.5 16.5Data 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 12/20 USD 8.93 9.2 9.2 24.0 Gl Bond BT OT OT LUX 12/20 USD 9.51 5.5 4.6 8.9 Gl Value I GL EQ LUX 12/20 USD 12.19 2.9 4.9 18.0U.S. Securities and Exchange Commission and aren’t available for sale to United Eur Strat Value A EU EQ LUX 12/20 EUR 9.05 6.1 9.0 16.1 Gl Bond C OT OT LUX 12/20 USD 9.48 5.9 5.2 9.5 Greater China A AS EQ LUX 12/20 USD 43.48 8.6 12.9 28.5States citizens and/or residents except as noted. Prices are in local currencies. Eur Strat Value A EU EQ LUX 12/20 USD 11.87 6.1 9.0 16.1 Gl Bond C2 OT OT LUX 12/20 USD 14.74 6.1 5.1 9.5 Greater China B AS EQ LUX 12/20 USD 38.11 7.6 11.8 27.2All performance figures are calculated using the most recent prices available. Eur Strat Value I EU EQ LUX 12/20 EUR 9.33 6.8 9.9 17.0 Gl Bond I OT OT LUX 12/20 USD 9.48 6.9 6.3 10.6 Greater China C AS EQ LUX 12/20 USD 42.74 8.1 12.4 27.9 Eur Strat Value I EU EQ LUX 12/20 USD 12.24 6.8 9.9 17.0 Gl Conservative A US BA LUX 12/20 USD 15.28 4.8 5.0 10.8 India Growth A EA EQ LUX 12/20 USD 147.13 15.9 20.9 NS NAV —%RETURN— Eur Value A EU EQ LUX 12/20 EUR 9.83 6.8 10.0 18.4 Gl Conservative A2 US BA LUX 12/20 USD 17.74 4.8 5.0 10.8 India Growth AX EA EQ LUX 12/20 USD 128.97 16.3 21.3 44.7FUND NAME GF AT LB DATE CR NAV YTD 12-MO 2-YR Eur Value A EU EQ LUX 12/20 USD 12.90 6.8 10.0 18.4 Gl Conservative B US BA LUX 12/20 USD 15.27 3.8 3.9 9.7 India Growth B EA EQ LUX 12/20 USD 152.64 14.8 19.7 NS Eur Value B EU EQ LUX 12/20 USD 11.74 5.8 8.7 17.2 Gl Conservative B2 US BA LUX 12/20 USD 16.69 3.7 3.9 9.7 India Growth BX EA EQ LUX 12/20 USD 109.18 15.1 20.1 43.2 Eur Value B EU EQ LUX 12/20 EUR 8.95 5.8 8.7 17.2 Gl Conservative C US BA LUX 12/20 USD 15.30 4.4 4.5 10.3 India Growth I EA EQ LUX 12/20 USD 134.31 16.8 21.9 45.3 Eur Value C EU EQ LUX 12/20 EUR 9.46 6.4 9.4 17.9 Gl Conservative C2 US BA LUX 12/20 USD 17.28 4.3 4.5 10.4 Intl Health Care A OT EQ LUX 12/20 USD 137.58 0.1 1.5 9.4 Eur Value C EU EQ LUX 12/20 USD 12.41 6.4 9.4 17.9 Gl Conservative I US BA LUX 12/20 USD 15.36 5.5 5.7 11.7 Intl Health Care B OT EQ LUX 12/20 USD 114.93 -0.9 0.5 8.3 Eur Value I EU EQ LUX 12/20 USD 15.01 7.7 10.9 19.4 Gl Eq Blend A GL EQ LUX 12/20 USD 12.07 3.5 5.6 17.4 Intl Health Care C OT EQ LUX 12/20 USD 131.29 -0.3 1.1 8.9 Eur Value I EU EQ LUX 12/20 EUR 11.44 7.7 10.9 19.4 Gl Eq Blend B GL EQ LUX 12/20 USD 11.22 2.5 4.6 16.2 Intl Health Care I OT EQ LUX 12/20 USD 151.49 0.9 2.3 10.3 EuroZone Strat Val AX EU EQ LUX 12/20 USD 10.40 12.8 16.8 21.0 Gl Eq Blend C GL EQ LUX 12/20 USD 11.81 3.1 5.3 16.8 Intl Technology A OT EQ LUX 12/20 USD 129.78 17.6 21.1 33.5n AHW CAPITAL MANAGEMENT EuroZone Strat Val AX EU EQ LUX 12/20 EUR 7.93 12.8 16.8 21.0 Gl Eq Blend I GL EQ LUX 12/20 USD 12.84 4.4 6.6 18.3 Intl Technology B OT EQ LUX 12/20 USD 111.37 16.5 19.9 32.1 EuroZone Strat Val BX EU EQ LUX 12/20 EUR 7.06 11.7 15.5 19.8 Gl Growth A GL EQ LUX 12/20 USD 44.21 5.5 7.9 18.0 Intl Technology C OT EQ LUX 12/20 USD 124.88 17.1 20.6 32.9Tel (+49) 1805 - 23 82 82 EuroZone Strat Val BX EU EQ LUX 12/20 USD 9.26 11.7 15.5 19.8 Gl Growth B GL EQ LUX 12/20 USD 36.55 4.5 6.8 16.9 Intl Technology I OT EQ LUX 12/20 USD 146.65 18.5 22.1 34.5www.ahw-capital.com EuroZone Strat Val CX EU EQ LUX 12/20 EUR 5.98 12.2 16.3 20.5 Gl Growth C GL EQ LUX 12/20 USD 42.24 5.0 7.4 17.5 Japan Eq Blend A JP EQ LUX 12/20 JPY 5958.00 -1.1 1.2 8.3AHW Top-Div.Int. GL EQ LUX 12/17 EUR 51.92 -5.0 -3.8 6.5 EuroZone Strat Val IX EU EQ LUX 12/20 USD 11.43 13.6 17.7 21.9 Gl Growth I GL EQ LUX 12/20 USD 49.48 6.3 8.8 19.0 Japan Eq Blend B JP EQ LUX 12/20 JPY 5693.00 -2.1 0.2 7.2 EuroZone Strat Val IX EU EQ LUX 12/20 EUR 8.71 13.6 17.7 21.9 Gl High Yield A OT OT LUX 12/20 USD 4.61 14.2 15.8 37.3 Japan Eq Blend C JP EQ LUX 12/20 JPY 5837.00 -1.5 0.7 7.8 Gl Balanced (Euro) A EU BA LUX 12/20 USD 16.11 NS NS NS Gl High Yield A2 OT OT LUX 12/20 HKD 82.58 14.7 15.8 37.1 Japan Growth A JP EQ LUX 12/20 JPY 5610.00 -4.5 -2.5 2.9 Gl Balanced (Euro) B EU BA LUX 12/20 USD 15.55 NS NS NS Gl High Yield A2 OT OT LUX 12/20 USD 10.62 14.7 15.8 37.1 Japan Growth B JP EQ LUX 12/20 JPY 5362.00 -5.4 -3.5 1.9 Gl Balanced (Euro) C EU BA LUX 12/20 USD 15.94 NS NS NS Gl High Yield AT OT OT LUX 12/20 USD 4.58 14.8 15.8 37.0 Japan Growth C JP EQ LUX 12/20 JPY 5497.00 -4.9 -3.0 2.5 Gl Balanced (Euro) I EU BA LUX 12/20 USD 16.52 NS NS NS Gl High Yield AT OT OT LUX 12/20 HKD 35.61 14.8 15.8 37.0 Japan Strat Value A JP EQ LUX 12/20 JPY 6306.00 3.0 5.5 14.0 Gl Balanced A US BA LUX 12/20 USD 17.32 5.1 6.0 14.9 Gl High Yield B OT OT LUX 12/20 USD 4.61 13.1 14.6 35.7 Japan Strat Value B JP EQ LUX 12/20 JPY 6036.00 2.1 4.6 12.9 Gl Balanced B US BA LUX 12/20 USD 16.31 4.1 5.0 13.8 Gl High Yield B2 OT OT LUX 12/20 HKD 131.48 13.6 14.7 35.8 Japan Strat Value C JP EQ LUX 12/20 JPY 6173.00 2.6 5.1 13.4n ALLIANCE BERNSTEIN Gl Balanced C US BA LUX 12/20 USD 17.02 4.8 5.7 14.6 Gl High Yield B2 OT OT LUX 12/20 USD 16.91 13.6 14.7 35.8 Real Estate Sec. A OT EQ LUX 12/20 USD 16.17 12.7 15.3 24.3www.alliancebernstein.com/investments Tel. +800 2263 8637 Gl Balanced C US BA LUX 12/20 EUR 12.97 4.8 5.7 14.6 Gl High Yield BT OT OT LUX 12/20 HKD 36.23 13.5 14.7 35.9 Real Estate Sec. B OT EQ LUX 12/20 USD 14.64 11.6 14.2 23.0Am Eq Blend A US EQ LUX 12/20 USD 11.23 8.3 10.1 17.7 Gl Balanced I US BA LUX 12/20 USD 18.09 5.9 6.8 15.8 Gl High Yield BT OT OT LUX 12/20 USD 4.66 13.5 14.7 35.9 Real Estate Sec. I OT EQ LUX 12/20 USD 17.52 13.6 16.3 25.3Am Eq Blend B US EQ LUX 12/20 USD 10.46 7.3 9.1 16.6 Gl Bond A OT OT LUX 12/20 USD 9.48 6.4 5.7 10.0 Gl High Yield C OT OT LUX 12/20 USD 4.61 13.7 15.2 36.6 Short Mat Dollar A US BD LUX 12/20 USD 7.42 4.6 5.2 8.5Am Growth A US EQ LUX 12/20 USD 33.35 6.8 10.6 26.4 Gl Bond A2 OT OT LUX 12/20 HKD 132.73 6.6 5.7 10.0 Gl High Yield C2 OT OT LUX 12/20 USD 15.68 14.3 15.4 36.5 Short Mat Dollar A2 US BD LUX 12/20 USD 10.26 4.8 5.1 8.5Am Growth AX US EQ LUX 12/20 USD 36.20 7.4 11.2 27.2 Gl Bond A2 OT OT LUX 12/20 USD 17.07 6.6 5.7 10.0 Gl High Yield I OT OT LUX 12/20 USD 4.61 14.8 16.4 38.1 Short Mat Dollar AT US BD LUX 12/20 USD 7.42 4.9 5.2 8.6Am Growth B US EQ LUX 12/20 USD 27.77 5.8 9.5 25.2 Gl Bond AT OT OT LUX 12/20 HKD 73.71 6.6 5.6 9.9 Gl Thematic Res. A GL EQ LUX 12/20 USD 17.11 16.2 18.9 39.8 Short Mat Dollar B US BD LUX 12/20 USD 7.42 4.2 4.7 8.1Am Growth C US EQ LUX 12/20 USD 30.05 6.3 10.2 25.9 Short Mat Dollar B2 US BD LUX 12/20 USD 10.16 4.3 4.6 8.0Am Growth I US EQ LUX 12/20 USD 37.25 7.6 11.5 27.4 Short Mat Dollar BT US BD LUX 12/20 USD 7.44 4.4 4.7 7.8 [ALTERNATIVE INVESTMENT FUNDS www.WSJ.com] AdvertisementAm Income A OT OT LUX 12/20 USD 8.78 9.7 9.9 18.0 Short Mat Dollar C US BD LUX 12/20 USD 7.42 4.2 4.7 8.1Am Income A2 OT OT LUX 12/20 HKD 162.82 10.0 9.9 18.0 Advertisement Short Mat Dollar C2 US BD LUX 12/20 USD 14.37 4.4 4.7 8.0Am Income A2 OT OT LUX 12/20 USD 20.94 10.0 9.9 18.0 Short Mat Dollar I US BD LUX 12/20 USD 7.42 5.1 5.7 9.1Am Income AT OT OT LUX 12/20 HKD 68.35 10.0 9.9 18.1 US Thematic Portfolio A EUR H US EQ LUX 12/20 EUR 18.67 NS NS NSAm Income AT OT OT LUX 12/20 USD 8.79 10.0 9.9 18.1 US Thematic Portfolio B EUR H US EQ LUX 12/20 EUR 18.59 NS NS NSAm Income B OT OT LUX 12/20 USD 8.78 9.0 9.2 17.1 NAV —%RETURN— NAV —%RETURN— US Thematic Portfolio C EUR H US EQ LUX 12/20 EUR 18.63 NS NS NSAm Income B2 OT OT LUX 12/20 HKD 139.41 9.3 9.1 17.2 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 12/20 EUR 18.73 NS NS NSAm Income B2 OT OT LUX 12/20 USD 17.93 9.3 9.1 17.2 US Thematic Research A US EQ LUX 12/20 USD 10.40 21.9 23.1 21.5Am Income BT OT OT LUX 12/20 HKD 68.66 9.2 9.1 17.2 n ALEXANDRA INVESTMENT MANAGEMENT Platinm-Gbl Dividend GL EQ CYM 11/30 USD 76.95 22.5 NS 28.5 US Thematic Research B US EQ LUX 12/20 USD 9.47 20.6 21.7 20.1Am Income BT OT OT LUX 12/20 USD 8.83 9.2 9.1 17.2 Platinm-Nordic OT OT CYM 11/30 SEK 644.51 4.4 5.2 7.8 US Thematic Research I US EQ LUX 12/20 USD 11.27 22.8 23.8 22.3Am Income C OT OT LUX 12/20 USD 8.78 9.2 9.4 17.4 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 12/20 USD 26.72 9.5 9.4 17.5 AlexandraConvertibleBondFundI,Ltd.(ClassA) OT OT VGB 08/31 USD 2174.86 28.6 51.1 47.6 Platinm-Turnberry OT OT USA 11/30 USD 59.92 -0.2 4.2 NSAm Income I OT OT LUX 12/20 USD 8.78 10.2 10.5 18.7Am Value C US EQ LUX 12/20 USD 10.35 21.3 22.3 20.8Emg Mkts Debt A GL BD LUX 12/20 USD 16.30 10.8 11.5 27.0Emg Mkts Debt A2 GL BD LUX 12/20 USD 22.37 11.2 11.6 27.0Emg Mkts Debt AT GL BD LUX 12/20 USD 16.41 11.3 11.6 27.0Emg Mkts Debt B GL BD LUX 12/20 USD 16.30 9.9 10.5 25.8 n ALLIANZ GLOBAL INVESTORS KAPITALANLAGEGESELLSCHAFTEmg Mkts Debt B2 GL BD LUX 12/20 USD 21.33 10.2 10.4 25.7 Concentra AE EU EQ DEU 12/20 EUR 62.01 19.7 20.8 29.1Emg Mkts Debt BT GL BD LUX 12/20 USD 16.37 10.2 10.4 25.8 n CREDIT PACIFIC ASSET MANAGMENT n SUPERFUND ASSET MANAGEMENT GMBH Industria AE EU EQ DEU 12/20 EUR 76.66 8.3 9.8 22.5Emg Mkts Debt C GL BD LUX 12/20 USD 16.30 10.4 11.0 26.5 www.creditpacific.com For info about open funds, contact firstname.lastname@example.org and www.superfund.com InternRent AE EU BD DEU 12/20 EUR 40.05 15.3 13.4 9.2Emg Mkts Debt C2 GL BD LUX 12/20 USD 21.88 10.7 11.0 26.4 CPS-Master Priv Fund GL OT WSM 12/20 USD 122.37 22.4 22.4 21.9 *Closed for New InvestmentsEmg Mkts Debt I GL BD LUX 12/20 USD 16.30 11.3 12.1 27.6 Superfund Cayman* GL OT CYM 12/14 USD 47.80 17.2 8.9 -24.1 n CHARTERED ASSET MANAGEMENT PTE LTD - TEL NO: 65-6835-8866Emg Mkts Growth A GL EQ LUX 12/20 USD 38.44 10.9 15.3 37.8 Superfund GCT USD* GL OT LUX 12/14 USD 2347.00 7.0 0.5 -20.0 Fax No: 65-6835 8865, Website: www.cam.com.sg, Email: email@example.comEmg Mkts Growth B GL EQ LUX 12/20 USD 32.27 9.9 14.1 36.5 CAM-GTF Limited OT OT MUS 12/10 USD 415374.41 51.3 60.5 84.2 Superfund Green Gold A (SPC) GL OT CYM 12/14 USD 1209.49 25.4 15.3 8.5Emg Mkts Growth C GL EQ LUX 12/20 USD 33.18 10.5 14.7 37.2 Superfund Green Gold B (SPC) GL OT CYM 12/14 USD 1146.42 22.5 10.9 -1.9Emg Mkts Growth I GL EQ LUX 12/20 USD 42.95 11.8 16.2 38.9 Superfund Q-AG* GL OT AUT 12/14 EUR 6982.00 5.5 NS NSEur Income A OT OT LUX 12/20 EUR 6.81 8.7 8.6 23.3Eur Income A OT OT LUX 12/20 USD 8.93 8.7 8.6 23.3 n WINTON CAPITAL MANAGEMENT LTDEur Income A2 OT OT LUX 12/20 EUR 14.04 9.1 8.7 23.3 n PLATINUM CAPITAL MANAGEMENT Tel: +44 (0)20 7610 5350 Fax: +44 (0)20 7610 5301Eur Income A2 OT OT LUX 12/20 USD 18.42 9.1 8.7 23.3 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 12/20 EUR 6.82 9.2 8.6 23.3 Platinm-All Star OT OT CYM 11/30 USD 100.49 3.4 4.3 8.1 Winton Evolution GBP Cls G GL OT CYM 09/30 GBP 1056.92 11.4 8.3 NSEur Income B OT OT LUX 12/20 EUR 6.81 8.0 7.9 22.5 Winton Evolution USD Cls F GL OT CYM 09/30 USD 1332.74 11.3 8.3 3.5Eur Income B OT OT LUX 12/20 USD 8.93 8.0 7.9 22.5 Platinm-All Weather OT OT USA 10/31 USD 129.92 NS NS NS n GAM FUND MANAGEMENT LIMITED Platinm-Dynasty OT OT USA 11/30 USD 118.02 1.7 4.3 7.4 Winton Futures EUR Cls C GL OT VGB 09/30 EUR 216.04 10.1 7.2 3.5Eur Income B2 OT OT LUX 12/20 EUR 12.97 8.4 7.9 22.5 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 12/20 USD 17.02 8.4 7.9 22.5 Platinm-Emancipation OT OT USA 11/30 USD 109.08 17.1 20.1 22.0 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 12/20 EUR 6.82 8.3 7.9 22.5 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 12/13 JPY 13984.46 -10.0 -10.2 25.6 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: firstname.lastname@example.org
Wednesday, December 22, 2010 THE WALL STREET JOURNAL. 25 THE INTERNATIONAL INVESTORFinancial stocks lead Japan yields Asian markets advance edge higherU.S. gains on deal hopes as stocks climb as Korea tensions ebbBY KRISTINA PETERSON by a third and the company provi- BY SHRI NAVARATNAM in Seoul. Posco rose 5.1% and Hyun- sioned much less for taxes than it BY KAZUHIRO SHIMAMURA dai Steel added 7.6% on an im- NEW YORK—U.S. stocks rose, led did a year ago. Adobe’s chief execu- Asian shares rallied as tensions proved sales outlook for next year.by financials, as deal activity tive said he expects 2011 revenue to TOKYO—Japanese government- eased on the Korean peninsula, with Hyundai Group affiliate Hyundaiboosted hopes for more takeovers increase 10% from 2010. bond yields generally firmed, taking Chinese and Japanese shares lead- Merchant Marine rose 0.9% onnext year and a Chinese official’s Darden Restaurants, the owner their main cue from a rise in domes- ing the advances. news its bid to buy a controllingcomments boosted sentiment of the Olive Garden, Red Lobster tic stocks that dimmed the allure of Sentiment also got a boost on stake in Hyundai Engineering &around the fragile euro zone. and other restaurant chains, slid safe-haven assets. Chinese Vice Premier Wang Qishan’s Construction had been scrapped by The Dow Jones Industrial Aver- 6.2% after its fiscal second-quarter But attention was focused on the comments that China backed Euro- the construction firm’s creditors. In-age was up 46.13 points, or 0.4%, at earnings rose 24%, but its lead over Bank of Japan governor’s state- pean officials’ efforts to stabilize vestors had fretted about the finan- 11524.26 in early af- competitors seemed to narrow and ments, which came after the market the global markets following the Eu- cial burden the 5.51 trillion wonABREAST OF ternoon trade. Fi- peers are gaining ground. closed. ropean debt cri- ($4.77 billion) bid would impose onTHE MARKET nancial components Carnival climbed 3.3% after its BOND Gov. Masaaki ASIAN-PACIFIC sis, lifting risk the company and its affiliates. led the measure in fiscal fourth-quarter earnings rose MARKETS Shirakawa pledged STOCKS currencies such Hyundai Engineering rose 2.1%.recent trade, with J.P. Morgan more than analysts expected. The to keep a close eye as the euro and The cooling of tensions on theChase up 2.3%, American Express advance came even as the company on the possible impact of recent the Australian dollar. Korean peninsula also underpinnedup 1.8% and Bank of America up projected a first-quarter profit be- climbs in bond yields on Japan’s “The comments didn’t explicitly Tokyo stocks, where exporters were1.4%. low Street expectations. fragile economic recovery. say this, but the comments implied led by a 2.7% rise in Sony shares, The Nasdaq Composite Index ad- “Changes in long-term yields China may increase its purchase of while Nikon added 2.8%.vanced 0.6% to 2664.63, and the European stocks could affect economic, price as well euro-zone debt in the nation’s for- The Bank of Japan left its policyStandard & Poor’s 500-stock index Shares rose for a second day in a as financial conditions by increasing eign reserves,” said Yuji Kameoka, rates and economic assessment un-rose 0.5% to 1253.54. row, as a senior Chinese official ex- companies’ and households’ fund- chief foreign-exchange strategist at changed from the last review. Gov. Investors said financials ap- pressed support for measures taken raising costs and weighing on prof- Daiwa Institute of Research. Masaaki Shirakawa said at a newspeared to be getting a boost from to address the euro-zone debt crisis its of financial firms, which have Japan’s Nikkei Stock Average conference after the market closeexpectations that deal-making in the and investors shrugged off the risk large holdings in government climbed 1.5% to 10370.53, China’s that the central bank will examinesector will continue next year after of a downgrade to Portugal’s credit bonds,” he told reporters at a news Shanghai Composite added 1.8% to developments in market interestCanadian bank Toronto-Dominion rating. conference. 2904.11 and Hong Kong’s Hang Seng rates and their impact on JapaneseBank agreed to acquire Chrysler Fi- The Stoxx Europe 600 index rose The BOJ chief said he believes Index rose 1.6% to 22993.86. South households and corporations.nancial, the auto lender owned by 1% at 281.11, bringing its monthly that recent rises in Japanese yields Korea’s Kospi rose 0.8% to 2037.09, Chinese coal shares leapt inCerberus Capital Management, for advance to 7.4%. largely reflect similar moves in U.S. Australia’s S&P/ASX 200 was up Shanghai and Hong Kong on hopes$6.3 billion. Shares of Toronto-Do- Global stocks rose broadly after Treasurys on the back of new opti- 0.7% to 4771.86 and India’s Sensex for strong winter sales. China Coalminion rose 2.7%. China Vice Premier Wang Qishan mism over the U.S. economy. advanced 0.9% to 20060.32. Energy added 1.7% and Yanzhou In other deal activity, Martek said China supports efforts by Euro- The central bank as expected Regional stocks rebounded from Coal Mining rose 3.2% in HongBiosciences soared 35% after the pean officials to stabilize the global kept monetary policy unchanged. Monday’s losses, reflecting relief Kong; in Shanghai, the stocks rosecompany agreed to a $31.50 a share markets hit by the euro zone’s debt The benchmark 10-year yield that South Korean artillery tests 3.7% and 2.8%, respectively. Chinabid, or $1.09 billion, from Dutch life crisis. slipped 0.005 percentage point to weren’t followed by a military re- Shenhua Energy, the country’s larg-sciences and materials-science con- In London, the FTSE 100 index 1.175%, while the five-year yield rose sponse from Pyongyang. Shinyoung est listed coal producer by output,cern Royal DSM. tacked on 1% to 5951.80, led by 0.02 percentage point to 0.49%. The Securities analyst Im Tae-geun said rose 6% in Shanghai and 3.7% in Adobe jumped 4.7% after the shares of Barclays, which rose 2.8%, Nikkei Stock Average jumped 1.5%, sentiment also was buoyed by ex- Hong Kong after saying it will buysoftware maker swung to a fourth- and Royal Bank of Scotland its biggest one-day move in nearly pectations of gains next year. 8.7 billion yuan ($1.3 billion) of as-quarter profit, as revenue climbed Group, up 4.5%. three weeks. Steelmakers paced the advance sets from its parent. [ 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 12/13 USD 264.38 -8.9 -9.3 26.7 GAMStar-AsPacEqEUR Inc AS EQ IRL 12/17 EUR 110.23 13.4 15.6 18.7 Eq. US Rel Val A US EQ LUX 12/17 USD 23.09 12.1 14.4 21.9GAM Asia Equity USD OT OT VGB 12/17 USD 702.00 7.4 11.3 32.4 GAMStar-ContEurEqEUR Ac EU EQ IRL 12/17 EUR 12.47 13.4 16.4 19.5 Money Market EURO A EU MM LUX 12/17 EUR 27.51 0.4 0.4 0.8GAM Asia-Pacific Eq USD AS EQ VGB 12/14 USD 1378.93 7.5 8.1 18.9 GAMStar-EurpEqEUR Acc EU EQ IRL 12/17 EUR 198.20 8.3 11.7 16.9GAM Com Glb Bal EUR Op US BA VGB 12/13 EUR 104.48 7.4 7.3 12.3 GAMStar-EurpEqEUR Inc EU EQ IRL 12/17 EUR 179.91 8.3 11.8 16.9GAM Com Glb Bal USD Op US BA VGB 12/13 USD 137.25 7.4 7.3 12.3 GAMStar-EurpEqUSD Acc EU EQ IRL 12/17 USD 15.95 -0.3 2.8 11.9GAM Comp Glb Eq EUR Op GL EQ VGB 12/13 EUR 112.38 11.6 11.7 18.4 GAMStar-EurpEqUSD Inc EU EQ IRL 12/17 USD 14.40 -0.3 2.8 11.9GAM Comp Glb Eq USD Op GL EQ VGB 12/13 USD 142.26 11.6 11.7 18.4 GAMStar-FrontierOppUSD Acc OT OT IRL 12/17 USD 6.32 15.1 11.8 11.9GAM Comp Glb Gr EUR Op US BA VGB 12/13 EUR 97.10 8.2 8.2 13.2 GAMStar-JpnEq EUR Acc JP EQ IRL 12/17 EUR 96.95 10.2 10.7 11.1GAM Comp Glb Gr USD Op US BA VGB 12/13 USD 137.44 8.2 8.2 13.2 GAMStar-JpnEq EUR Inc JP EQ IRL 12/17 EUR 96.75 10.2 10.7 11.1GAM CompAbsRT EUR Op OT OT VGB 09/30 EUR 141.71 9.1 0.1 -6.9 GAMStar-JpnEq JPY Acc JP EQ IRL 12/17 JPY 936.91 1.7 3.7 7.9 n MANULIFE ASSET MANAGEMENT TEL:(852)2108 1110GAM CompAbsRT SGD Op OT OT VGB 09/30 SGD 102.21 9.2 -0.1 -8.3 GAMStar-JpnEq USD Acc JP EQ IRL 12/17 USD 11.65 4.8 5.2 5.9 Internet:http://www.manulife.com.hk 47/F Manulife Plaza, Causeway Bay, Hong KongGAM CompAbsRT USD Op OT OT VGB 09/30 USD 845.66 9.5 0.7 -7.0 GAMStar-World EqUSD Acc GL EQ IRL 12/17 USD 2298.28 3.6 6.3 14.3 American Growth US EQ LUX 12/20 USD 17.08 11.8 15.6 19.8 n THE NATIONAL INVESTORGAM Cptal Apprec Eq Inc US EQ VGB 12/17 USD 289.09 16.3 18.7 29.1 American Growth AA US EQ LUX 12/20 USD 0.98 11.6 15.3 19.5 TNI Tower | Zayed 1st Street Khalidia| Web:www.tni.aeGAM Cross Trading Inc OT OT VGB 12/13 USD 483.20 3.7 3.9 NS n HSBC Trinkaus Investment Managers SA Asian Equity OT OT LUX 12/20 USD 2.79 13.8 18.2 35.2 TNI Mena Real Estate Fund OT EQ BMU 12/09 USD 840.07 -12.6 -13.5 -8.3GAM Diversity CHF Op OT OT VGB 12/13 CHF 91.11 -3.4 -3.7 0.0 Asian Equity AA OT OT LUX 12/20 USD 0.90 13.5 17.9 34.8 TNI MENA Special Sits Fund OT OT BMU 11/30 USD 1119.32 3.7 4.6 7.4GAM Diversity EUR Op OT OT VGB 12/13 EUR 626.97 -3.3 -3.6 0.6 E-Mail: email@example.com Asian Sm Cap Equity AA OT OT LUX 12/20 USD 1.53 33.1 36.1 60.2 TNI MENA UCITS Fund OT OT IRL 12/09 USD 1076.66 NS NS NSGAM Diversity USD 2.5XL OT OT VGB 12/13 USD 70.57 -9.9 -10.6 -1.6 Telephone: 352 - 47 18471 China Value A AS EQ LUX 12/20 USD 8.20 15.2 20.2 37.5 TNI UAE Blue Chip Fund OT OT ARE 12/09 AED 5.20 -2.4 1.4 -0.2GAM Diversity USD Op OT OT VGB 12/13 USD 662.25 -2.7 -3.1 NS Prosperity Return Fund A JP BD LUX 12/20 JPY 9894.41 0.1 0.5 NS China Value AA AS EQ LUX 12/20 USD 2.57 15.0 19.9 37.1GAM Dvrsty II CHF Op OT OT VGB 12/13 CHF 95.56 -4.0 -4.4 NS Prosperity Return Fund B OT OT LUX 12/20 JPY 8778.12 -10.9 -10.9 NS Dragon Growth AS EQ LUX 12/20 USD 1.74 6.0 10.8 31.7GAM Dvrsty II EUR Op OT OT VGB 12/13 EUR 133.24 -4.0 -4.4 -0.2 Prosperity Return Fund C OT OT LUX 12/20 USD 94.11 -2.1 -4.5 NS Dragon Growth AA AS EQ LUX 12/20 HKD 8.46 6.1 10.9 31.7GAM Dvrsty II USD Op OT OT VGB 12/13 USD 202.79 -3.5 -3.9 NS Prosperity Return Fund D OT OT LUX 12/20 EUR 111.94 15.1 13.5 NS Emg Eastrn Europe A EU EQ LUX 12/20 USD 5.19 12.7 17.0 48.3GAM DvrstyIII EUR Op OT OT VGB 12/13 EUR 110.88 -4.0 -4.4 -0.2 Renaissance Hgh Grade Bd A JP BD LUX 12/20 JPY 10121.17 2.5 2.5 NS Emg Eastrn Europe AA EU EQ LUX 12/20 USD 2.23 12.5 16.9 48.1GAM DvrstyIII USD Op OT OT VGB 12/13 USD 117.65 -3.5 -3.9 0.0 Renaissance Hgh Grade Bd B OT OT LUX 12/20 JPY 8947.94 -9.0 -9.4 NS European Growth EU EQ LUX 12/20 USD 9.57 5.1 7.9 24.4GAM Euro Eq Hdg EUR Op EU EQ VGB 12/17 EUR 240.47 9.9 11.9 11.6 Renaissance Hgh Grade Bd C OT OT LUX 12/20 USD 95.33 0.0 -3.3 NS European Growth AA EU EQ LUX 12/20 USD 0.68 4.8 7.6 24.1GAM Euro Eq Hdg USD Op EU EQ VGB 12/17 USD 223.18 9.8 11.7 11.6 Renaissance Hgh Grade Bd D OT OT LUX 12/20 EUR 105.97 9.1 7.4 NS Global Contrarain AA GL EQ LUX 12/20 USD 1.12 27.4 31.4 54.9GAM GAMCO US EQ VGB 12/14 USD 1023.24 26.2 28.9 36.1 Global Property AA OT EQ LUX 12/20 USD 0.77 14.1 17.8 28.7GAM Gb EmMkts Hdg EUROp OT OT VGB 12/17 EUR 100.49 2.7 2.3 7.4 Global Resources AA GL EQ LUX 12/20 USD 1.26 16.5 20.3 37.7 n WEBSITE: WWW.VALUEPARTNERS.COM.HK, TEL: (852) 2880 9263, FAX: (852) 2564 8487GAM Gb EmMkts Hdg USDOp OT OT VGB 12/17 USD 107.33 4.0 3.7 8.3 Healthcare AA OT EQ LUX 12/20 USD 1.00 6.4 9.5 11.4GAM Gbl Divers USD Inc. GL EQ VGB 12/13 USD 275.38 10.2 9.9 18.5 *formerly known as China ABH Shares Fund India Equity AA EA EQ LUX 12/20 USD 1.26 14.4 19.1 39.7 Intel-Chin Mainlnd Foc AS EQ CYM 12/15 USD 37.74 26.5 26.5 55.3GAM Grtr China Eq Hdg Op GL EQ VGB 12/13 USD 238.81 -16.7 -17.7 31.5 International Growth GL EQ LUX 12/20 USD 3.17 4.0 6.7 14.0GAM Intrst Trend IncGAM Japan Eq Hdg EUR OpGAM Japan Eq Hdg USD OpGAM Japan Eq Hdg YEN Open OT AS AS AS OT EQ EQ EQ VGB VGB VGB VGB 12/13 12/13 12/13 12/13 USD EUR USD JPY 310.13 124.77 126.14 8709.92 23.3 6.9 3.4 3.6 24.1 7.6 4.0 4.4 37.2 9.8 NS 9.9 LIST YOUR International Growth AA Japanese Growth Japanese Growth AA Latin America Equity AA GL JP JP GL EQ EQ EQ EQ LUX LUX LUX LUX 12/20 USD 12/20 USD 12/20 USD 12/20 USD 0.73 2.93 0.75 1.41 3.7 6.3 4.8 10.3 6.4 6.0 4.5 14.7 13.7 7.6 6.7 49.2 Intel-China Converg* VP Classic - A VP CLassic - B VP High Dividend Stk AS AS AS OT EQ CYM EQ CYM EQ CYM OT CYM 12/15 12/20 12/20 12/13 USD USD USD USD 141.78 222.37 103.14 58.50 24.3 19.2 18.7 28.8 24.1 23.7 23.1 28.1 54.8 48.2 47.4 56.3GAM Japan USD JP EQ VGB 12/17 USD 1168.64 6.0 6.4 6.9 Manulife GF Strategic Income Fund AA OT OT LUX 12/20 USD 1.09 10.6 10.8 NS n J.P. MORGAN ASSET MANAGEMENTGAM Japan YENGAM Money Mkt EuroOpGAM Money Mkt USDGAM Multi-Arb EUR OpGAM Multi-China EUR Op JP EU US OT OT EQ MM MM OT OT VGB VGB VGB VGB VGB 12/17 12/17 12/17 12/13 12/13 JPY EUR USD EUR EUR 9033.98 51.23 100.17 91.42 168.15 2.4 0.8 0.3 -17.8 0.1 4.4 0.8 0.2 -19.6 0.0 8.4 0.5 0.1 -10.6 6.4 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 12/20 12/20 USD SGD 15.35 15.03 34.9 NS 38.3 NS NS NS MGF Asia Value Dividend Equity Fund Russia Equity AA Taiwan Equity AA Turkey Equity AA U.S. Bond AA OT EE AS OT US OT EQ EQ OT BD LUX LUX LUX LUX LUX 12/20 USD 12/20 USD 12/20 USD 12/20 USD 12/20 USD 1.35 0.80 1.26 0.93 1.17 19.2 25.2 16.1 22.1 8.7 24.1 26.7 23.5 31.0 8.1 NS 70.2 44.5 59.4 13.4GAM Multi-China USD Op OT OT VGB 12/13 USD 178.74 1.2 1.1 7.2 JF Asia Pac ex-Jp (USD)A(acc) AS EQ LUX 12/20 USD 20.22 11.4 17.1 39.0 U.S. Sm Cap Equity AA US EQ LUX 12/20 USD 1.04 27.6 32.4 46.5GAM Multi-Emer Mkts GBP OT OT VGB 12/13 GBP 135.66 3.2 4.0 13.6 JF China (SGD)A(acc) AS EQ LUX 12/20 SGD 13.35 -3.4 0.8 NS U.S. Special Opportunities US BD LUX 12/20 USD 0.99 26.0 27.5 53.6GAM Multi-Emer Mkts USD OT OT VGB 12/13 USD 673.45 3.5 4.3 13.7 JF China (USD)A(dist) AS EQ LUX 12/20 USD 49.12 2.8 7.3 26.8 U.S. Tsy Inf-ProtSec AA OT OT LUX 12/20 USD 1.19 5.1 4.2 5.6GAM Multi-Eur EUR Op OT OT VGB 12/13 EUR 269.71 0.3 0.2 3.3 JF Greater China (SGD)A(acc) AS EQ LUX 12/20 SGD 14.94 5.5 10.7 NS n YUKI INTERNATIONAL LIMITEDGAM Multi-Eur II EUR Op OT OT VGB 12/13 EUR 138.80 0.3 0.2 4.6 JF Greater China (USD)A(dist) AS EQ LUX 12/20 USD 28.40 12.3 17.9 33.8 n PT CIPTADANA ASSET MANAGEMENT Tel +44-207-269 0203 www.yukifunds.comGAM Multi-Eur II USD Op OT OT VGB 12/13 USD 113.67 0.5 0.4 4.5 JF India (SGD)A(acc) EA EQ LUX 12/20 SGD 16.29 13.2 18.6 NS Tel: +62 21 25574 883 Fax: +62 21 25574 893 Website: www.ciptadana.comGAM Multi-Eur USD Op OT OT VGB 12/13 USD 470.95 0.7 0.5 3.2 JF India (USD)A(acc) EA EQ LUX 12/20 USD 27.97 20.5 26.4 41.4 Indonesian Grth Fund GL EQ BMU 12/15 USD 179.43 40.9 41.3 74.1GAM Multi-Nth Am EUR Special OT OT VGB 12/13 EUR 136.31 1.7 2.7 7.4 JF Korea Equity (USD) A (acc) AS EQ LUX 12/20 USD 10.82 29.0 33.7 44.9 n YMR-N SeriesGAM Multi-Nth Am USD Special OT OT VGB 12/13 USD 222.16 1.8 2.7 7.7 JF Pacific Tech (USD) A (acc) OT EQ LUX 12/20 USD 16.43 9.5 13.0 26.9 YMR-N Growth Fund JP EQ IRL 12/20 JPY 9394.00 -0.7 2.3 5.6GAM Multi-Pac EUR Op OT OT VGB 09/30 EUR 138.69 -3.3 -1.4 0.5 JF Singapore (SGD)A(acc) AS EQ LUX 12/20 SGD 15.87 10.3 13.6 NS YMR-N Small Cap Fund JP EQ IRL 12/20 JPY 6802.00 -3.0 -1.4 5.2GAM 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: JF Singapore (USD)A(dist) JPM Africa (USD) A (acc) AS OT EQ OT LUX LUX 12/20 12/20 USD USD 32.20 11.47 17.5 33.2 21.1 36.9 45.2 53.8 n Yuki 77 SeriesGAM Selection Hdg US EQ VGB 12/10 USD 3183.84 20.7 24.6 45.5 JPM Asia Pac Bond (USD)A(acc) AS BD LUX 12/20 USD 10.60 NS NS NS Yuki 77 General JP EQ IRL 12/20 JPY 5742.00 -6.6 -4.5 0.0GAM Sing/Malaysia EA EQ VGB 12/17 USD 2824.87 11.9 14.3 31.3 JPM Brazil Alpha+ (USD)A(acc) OT OT LUX 12/20 USD 11.45 7.2 12.6 53.5 Yuki 77 Growth JP EQ IRL 04/27 JPY 5230.34 -7.3 -5.4 -27.3GAM Sterling Spe Bd Inc OT OT VGB 12/13 GBP 261.05 13.5 14.4 26.7 firstname.lastname@example.org JPM Brazil Alpha+(SGD)A(acc) JPM East Eur (EUR)A(dist)(JF) OT EU OT EQ LUX LUX 12/20 12/20 SGD EUR 14.43 34.44 NS 32.1 NS 35.6 NS 66.7 n Yuki Chugoku SeriesGAM Trading EUR Inc OT OT VGB 11/30 EUR 336.25 3.4 2.8 5.0GAM Trading USD Inc OT OT VGB 12/13 USD 1010.75 3.9 4.0 5.0 JPM Emerg EMEA (USD) A (dist) GL EQ LUX 12/20 USD 62.55 22.2 25.5 52.0 Yuki Chugoku Jpn Gen JP EQ IRL 12/20 JPY 6670.00 -2.3 0.4 4.7GAM Trdg II IncEUR Op OT OT VGB 12/13 EUR 144.04 3.6 3.7 4.7 JPM Emerg Mid East Eq(SGD)A(acc) OT OT LUX 12/20 SGD 14.66 NS NS NS n SENSIBLE ASSET MANAGEMENT LIMITED Yuki Chugoku JpnLowP JP EQ IRL 12/20 JPY 7829.00 3.8 5.5 -1.1GAM Trdg II IncUSD Op OT OT VGB 12/13 USD 328.30 3.9 4.1 5.0 JPM Emerg Mid East(USD)A(dist) OT OT LUX 12/20 USD 24.67 22.4 24.2 26.9 www.samfund.com.hk Tel: (852) 2868 6848 Fax: (852) 2810 9948GAM Trdg IV IncEUR Op OT OT VGB 12/13 EUR 151.61 3.3 3.5 4.4 JPM Emerg Mkt Eq (SGD)A(acc) GL EQ LUX 12/20 SGD 15.29 7.4 11.8 NS Asia Value Formula Fd-B OT OT CYM 12/20 USD 10.23 27.6 31.5 50.6 n Yuki Hokuyo Japan SeriesGAM Trdg IV IncUSD Op OT OT VGB 12/13 USD 160.42 3.8 4.0 4.8 JPM Emerg Mkt Eq (USD)A(dist) GL EQ LUX 12/20 USD 32.54 14.3 18.9 38.6 Yuki Hokuyo Jpn Gen JP EQ IRL 12/20 JPY 4292.00 -8.2 -5.8 -1.8GAM Trdg V IncEUR Op OT OT VGB 12/13 EUR 128.16 3.0 3.1 4.2 JPM Emerg Mkt Infra(USD)A(acc) OT OT LUX 12/20 USD 8.74 17.6 22.2 43.2 n SGAM FUND Yuki Hokuyo Jpn Inc JP EQ IRL 12/20 JPY 5016.00 -4.4 -3.1 -1.8GAM Trdg V IncUSD Op OT OT VGB 12/13 USD 134.26 3.6 3.8 4.7 JPM Emerg Mkt LC Debt(USD)A(mth) OT OT LUX 12/20 USD 15.78 12.5 14.3 NS AMUNDI HONG KONG LIMITED Yuki Hokuyo Jpn Sm Cap JP EQ IRL 12/20 JPY 4933.00 -3.4 -1.7 4.5GAM TrdgIII IncEUR Op OT OT VGB 12/13 EUR 161.93 3.1 3.3 4.4 JPM Glb Dyn (SGD)A(acc) GL EQ LUX 12/20 SGD 14.83 4.3 6.9 NS Hotline in Hong Kong (852) 2521 4231GAM TrdgIII IncUSD Op OT OT VGB 12/13 USD 168.73 3.8 4.0 4.9 JPM Glb Dyn (USD)A(dist) GL EQ LUX 12/20 USD 13.27 11.0 13.9 20.2 www.amundi.com n Yuki Mizuho SeriesGAM USDSpecBondInc OT OT VGB 12/13 USD 626.80 18.3 21.3 45.4 JPM Glb Nat Res (EUR)A(dist) GL EQ LUX 12/20 EUR 22.29 46.9 52.8 80.4 Bonds US OppsCoreplus A US BD LUX 12/17 USD 39.92 8.2 7.2 13.1 Yuki Mizuho Gen Jpn III JP EQ IRL 12/20 JPY 4040.00 -8.6 -6.0 -1.3GAM Worldwide GL EQ VGB 12/17 USD 2297.07 3.2 5.9 13.7 JPM Glb Nat Res (SGD)A(acc) GL EQ LUX 12/20 SGD 26.63 26.4 31.6 NS Bonds World A OT OT LUX 12/17 USD 42.80 1.9 0.3 2.5 Yuki Mizuho Jpn Dyn Gro JP EQ IRL 12/20 JPY 4339.00 -7.0 -4.4 -0.8GAMut Investments OT OT VGB 12/15 USD 8049.35 6.2 6.3 5.7 JPM Glb Nat Res (USD)A(acc) GL EQ LUX 12/20 USD 20.86 34.6 40.1 75.4 Eq. AsiaPac Dual Strategies A AS EQ LUX 12/20 USD 11.45 9.9 14.6 32.8 Yuki Mizuho Jpn Exc 100 JP EQ IRL 12/20 JPY 6355.00 -8.8 -5.9 3.3 JPM Latin Amer (USD)A(dist)JF GL EQ LUX 12/20 USD 45.67 14.3 19.7 54.0 Eq. China A AS EQ LUX 12/20 USD 24.01 -0.5 3.4 23.7 Yuki Mizuho Jpn Gen JP EQ IRL 12/20 JPY 8516.00 -1.2 1.6 4.3n GAM Star Fund Plc JPM Russia (USD) A (dist) EE EQ LUX 12/20 USD 15.69 22.2 24.1 76.1 Eq. Global Energy A OT EQ LUX 12/17 USD 18.68 3.0 6.1 12.0 Yuki Mizuho Jpn Gro JP EQ IRL 12/20 JPY 6248.00 -1.7 0.2 1.0GAMStar China EqUSD (SCHUA) AS EQ IRL 12/17 USD 20.17 14.7 19.2 51.9 Eq. Global Resources A GL EQ LUX 12/17 USD 128.59 17.8 21.9 35.1 Yuki Mizuho Jpn Inc JP EQ IRL 12/20 JPY 7468.00 -2.2 -0.7 -2.0GAMStar US All CapEqUSD (SACU) US EQ IRL 12/17 USD 9.31 12.4 14.9 23.6 Yuki Mizuho Jpn Lg Cap JP EQ IRL 12/20 JPY 4938.00 -4.8 -2.1 0.5 n JP MORGAN ASSET MGMT Eq. Gold Mines A OT EQ LUX 12/17 USD 39.66 30.9 33.7 40.8 Yuki Mizuho Jpn LowP JP EQ IRL 12/20 JPY 11388.00 -1.5 1.7 1.7GAMStar-AsEqCHF Ord Ac OT OT IRL 12/17 CHF 11.07 0.3 2.8 24.3 Eq. India A EA EQ LUX 12/20 USD 150.38 15.0 19.8 39.9GAMStar-AsEqEUR Ord Ac OT OT IRL 12/17 EUR 13.85 16.3 20.8 37.9 Brokerline 0800 727770 Clients 0800 204020 Eq. Luxury & Lifestyle EURO A OT EQ LUX 12/17 EUR 96.90 37.4 39.9 41.4 Yuki Mizuho Jpn PGth JP EQ IRL 12/20 JPY 7289.00 -8.4 -6.6 -1.4GAMStar-AsEqGBP Ord Ac OT OT IRL 12/17 GBP 1.75 11.7 15.8 32.0 JF ASEAN Eq (SGD)A(acc) AS EQ LUX 12/20 SGD 15.40 NS NS NS Yuki Mizuho Jpn SmCp JP EQ IRL 12/20 JPY 6943.00 -2.7 -1.4 8.7 JPM Emerg EMEA (SGD)A(acc) GL EQ LUX 12/20 SGD 15.19 NS NS NS Eq. Luxury & Lifestyle USD A OT EQ LUX 12/17 USD 127.42 37.4 39.9 41.4GAMStar-AsEqUSD Ord Ac OT OT IRL 12/17 USD 14.39 7.3 11.3 32.2 Eq. MENA EURO A OT OT LUX 12/20 EUR 43.52 12.6 12.2 14.1 Yuki Mizuho Jpn Val Sel AS EQ IRL 12/20 JPY 5546.00 -1.8 0.9 4.2GAMStar-AsPacEqEUR Acc AS EQ IRL 12/17 EUR 114.73 13.4 15.6 18.7 JPM Latin Amer Eq(SGD)A(acc) GL EQ LUX 12/20 SGD 15.14 NS NS NS Yuki Mizuho Jpn YoungCo AS EQ IRL 12/20 JPY 2511.00 -7.9 -6.3 2.8 Eq. MENA USD A OT OT LUX 12/20 USD 57.27 12.6 12.2 14.1 For information about listing your funds, please contact: Carson Wong tel: +852 2831-6481; email: email@example.com
26 THE WALL STREET JOURNAL. Wednesday, December 22, 2010 BLUE CHIPS BONDS Dow Jones Asia Titans: Tuesdays best and worst...Major players Market value, in billions Previous close, in STOCK PERFORMANCEbenchmarksAt right, a look at the Asia Titans, the biggest and best known Company POSCO Country South Korea Industry Steel of US$ $32.9 local currency 493,000 Previous session 5.12% 52-week -15.9% Three-year -12.6% Japan Tobacco Japan Tobacco 34.8 303,500 3.97 3.7 -56.2companies in Asia. Below, some of the Dow Jones Titans indexes ofbiggest and most liquid stocks in individual countries and regions CNOOC Hong Kong Exploration Production 104.9 18.26 3.05 55.5 44.9 Sony Japan Consumer Electronics 35.9 3,010 2.73 16.7 -50.7Giants around the world In U.S.-dollar terms. Nintendo Japan Toys 37.2 24,300 2.70 13.6 -62.3Dow Jones Country Titans INDEX PERFORMANCE Nippon Steel Japan Steel $22.5 299.00 -0.33% -15.8 -54.8 Previous session Year-to-date 52-week Woodside Petroleum Australia Exploration Production 33.2 42.82 -0.14 -9.2 -9.1Sweden 1.00% 24.8% 23.8% Shinhan Financial Grp South Korea Banks 21.7 52,800 unch. 19.5 -4.5Turkey 1.62 20.3 23.6 Tokio Marine Hldgs Japan Property Casualty Insurance 23.5 2,493 0.04% -2.0 -32.1Russia 1.05 20.1 23.5 Kansai Elec Power Japan Electricity 21.9 2,028 0.05 -3.9 -25.3South Korea 0.47 19.9 22.8South Africa 0.69 15.2 16.0Germany 0.83 14.8 15.1 ...And the rest of Asias blue chipsSingapore 0.22 10.1 13.0 Latest, Latest,Canada 0.69 9.2 10.2 Market value, in local STOCK PERFORMANCE Market value, in local STOCK PERFORMANCE 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-yearHong Kong 1.58 8.0 12.0 Seven I Hldgs 23.2 2,192 2.62% 19.0% -30.6% Mitsubishi 43.2 2,198 0.96% 3.0% -28.6%U.K. 0.88 7.9 9.6 Japan (Broadline Retailers) Japan (Industrial Suppliers) Shin-Etsu Chml 22.4 4,420 2.43 -12.1 -36.6 Nissan Motor 39.8 796.00 0.89 9.8 -32.8Netherlands 0.94 6.9 7.5 Japan (Specialty Chemicals) Japan (Automobiles)Switzerland 0.69 1.8 1.8 Cheung Kong 34.7 116.30 2.02 22.4 -17.3 Hon Hai Precision Ind 37.4 115.50 0.87 -6.6 -32.4 Hong Kong (Real Estate Holding Development) Taiwan (Electrical Components Equipment)Brazil 1.61 0.1 3.7 Reliance Industries 77.5 47.40 1.94 7.7 -30.5 China Construction Bank 215.9 6.98 0.87 14.6 7.7 India (Exploration Production) Hong Kong (Banks)France 1.01 -1.0% unch. PetroChina 26.9 9.91 1.85 9.3 -28.4 Mitsui 28.5 1,316 0.84 5.6 -42.9Japan 1.01 -1.4 -0.4 Hong Kong (Integrated Oil Gas) Japan (Industrial Suppliers) Aus NZ Bk 60.5 23.70 1.80 13.1 -13.5 Mizuho Financial Grp 34.8 151.00 0.67 -13.7 -100.0Australia 0.78 -2.5 1.1 Australia (Banks) Japan (Banks) Sun Hung Kai Prop 42.7 129.40 1.73 15.5 -19.2 Tokyo Elec Power 38.0 1,980 0.66 -15.2 -32.3Italy 1.60 -9.1 -8.1 Hong Kong (Real Estate Holding Development) Japan (Electricity)Spain 1.93 -10.5 -9.9 Canon 61.8 4,185 1.58 12.5 -20.1 China Mobile (HK) 197.4 77.20 0.65 10.2 -44.0 Japan (Electronic Office Equipment) Hong Kong (Mobile Telecommunications)China 88 2.52 -16.1 -9.3 Bank of China 44.3 4.12 1.48 6.1 10.2 Toyota Motor 122.4 3,250 0.62 -12.6 -46.0 Hong Kong (Banks) Japan (Automobiles) Rio Tinto Ltd. 37.7 86.70 1.46 22.9 -32.6 Nippon T&T 59.4 3,755 0.54 2.9 -99.3 Australia (General Mining) Japan (Fixed Line Telecommunications)Dow Jones Regional Sector Titans China Life Insurance 30.3 31.70 1.44 -12.7 -21.9 Commonwlth Bk of Aus 78.0 51.00 0.53 -2.2 -11.7 Hong Kong (Life Insurance) Australia (Banks) BHP Billiton 152.0 45.42 1.34 10.9 14.6 Takeda Pharm 37.7 3,995 0.50 6.5 -38.4Auto Parts 0.80% 32.2% 33.5% Australia (General Mining) Japan (Pharmaceuticals)Travel Leisure 0.62 30.4 28.5 KDDI 26.6 503,000 1.31 5.5 -37.6 Honda Motor 72.0 3,295 0.46 9.1 -12.6 Japan (Mobile Telecommunications) Japan (Automobiles)Chemicals 1.13 20.2 21.7 NTT DoCoMo 71.8 143,700 1.27 10.8 -21.9 Samsung Electronics 105.0 936,000 0.43 21.4 67.1 Japan (Mobile Telecommunications) South Korea (Semiconductors)Ind Gds Svcs 0.77 20.2 20.8 JFE Hldgs 18.1 2,869 1.24 -16.8 -48.1 Westfield Grp 22.4 9.72 0.41 5.4 -41.0Media 0.66 16.2 16.4 Japan (Steel) Australia (Retail) National Australia Bk 51.2 24.21 1.17 -6.9 -36.0 Mitsubishi UFJ Finl 72.8 438.00 0.23 -7.4 -57.9Basic Res 1.65 15.6 20.4 Australia (Banks) Japan (Banks)Arab 50 0.40 12.9 12.5 East Japan Railway 25.4 5,370 1.13 -10.1 -99.4 Westpac Bking 67.7 22.71 0.22 -2.7 -17.5 Japan (Travel Tourism) Australia (Banks)Tiger 50* 0.96 9.7 13.7 Panasonic 29.0 1,169 1.12 -8.7 -49.2 Woolworths 32.3 26.71 0.19 0.1 -21.0 Japan (Consumer Electronics) Australia (Food Retailers Wholesalers)Asian 50 1.23 6.6 9.4 Indl Comm Bk China 64.4 5.77 1.05 -3.7 2.8 Taiwan Smcndtr Mfg 61.8 71.30 0.14 14.6 20.8Global 50 0.27 1.0 1.5 Hong Kong (Banks) Taiwan (Semiconductors) QBE Insurance Group 19.3 18.38 0.99 -25.2 -43.1 Sumitomo Mitsui Finl 48.4 2,895 0.07 1.9 -99.7*Asia excluding Japan Australia (Reinsurance) Japan (Banks) 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 companies At its most basic, the pricing of credit-default swaps measures how much a buyer has to pay to purchase-andcredit 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... CHANGE, in basis points And the most deterioration CHANGE, in basis pointsdealmakers Europe: 14/1 1.07 99.68% 0.01% 1.20 0.95 1.05 Yesterday Yesterday Five-day 28-day Yesterday Yesterday Five-day 28-day Eur. High Volatility: 14/1 1.55 97.50 0.01 1.84 1.45 1.59 Sumitomo Metal 73 –1 ... 5 Kookmin 125 9 5 15 Europe Crossover: 14/1 4.50 102.01 0.05 5.37 4.24 4.71 Daiwa Secs Gp 109 –1 –2 7 Shin Han 132 9 6 14 Asia ex-Japan IG: 14/1 1.06 99.71 0.01 1.25 0.93 1.08 Komatsu 40 ... ... 1 Woori 138 9 5 16 Japan: 14/1 1.02 99.90 0.01 1.10 0.90 1.00 Nippon Stl 56 ... ... 6 Korea Dev 116 9 6 16 Note: Data as of December 20 TOKYO GAS 28 ... ... 1 SK Telecom 86 9 6 15 In percentage points Sumitomo Elec 34 ... –1 4 Lg Electrs 105 10 5 16 Spreads — NOTICE TO READERS — Index roll 4.00 Swire Pac 83 ... ... –4 Samsung Electrs 75 10 6 17 Spreads on five-All statistics published in Honda Mtr 46 ... ... 6 POSCO 88 10 7 13 year swaps for 3.00The Wall Street Journal Kajima 152 ... 1 –1 HYUNDAI Mtr 118 11 7 14 corporate debt; Europe Sub FinancialsAsia from markets outside t 2.00 CHUBU Elec Pwr 36 ... 1 1 KT&G 91 11 2 13 based on Markitthe Asian-Pacific region Source: Markit Group iTraxx indexes. 1.00reflect preliminary data. t Europe Senior Financials 0 Behind Asias deals: Bank revenue rankings, Asia (ex Japan) July Aug. Sept. Oct. Nov. Dec. 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 Morgan Stanley $408 4.4% 72% 6% 22% ... JPMorgan 373 4.0 65 14 17 4% Goldman Sachs 366 3.9 70 15 15 ... UBS 343 3.7 63 20 15 1 WSJ.com Deutsche Bank 323 3.5 59 19 20 2 Follow the markets throughout the day, with updated stock Credit Suisse 318 3.4 62 12 21 4 quotes, news and commentary at WSJ.com. Bank of China Ltd 275 3.0 52 38 1 8 China International Capital Corp Ltd 256 2.8 71 22 7 ... Also, receive emails that summarize the day’s trading in Eu- Ping An Securities Co Ltd 256 2.8 96 4 ... ... rope and Asia. To sign up, go to WSJ.com/Email. Source: Dealogic
Wednesday, December 22, 2010 THE WALL STREET JOURNAL. 27 GLOBAL MARKETS LINEUPCommodities Prices of futures contracts with the most open interest Currencies London close on Dec. 21EXCHANGE 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 5.2189 0.1916 3.9738 0.2517 Euro zone euro 1 1 0.7614 1.3134 ONE-DAY CHANGE Contract Contract Commodity Exchange Last price Net Percentage high low Brazil real 2.2278 0.4489 1.6963 0.5895 1-mo. forward 1.0000 1.0000 0.7614 1.3134 Corn (cents/bu.) CBOT 602.75 3.25 617.50 356.75 Canada dollar 1.3368 0.7481 1.0179 0.9825 3-mos. forward 1.0004 0.9996 0.7617 1.3128 0.54% 1-mo. forward 1.3376 0.7476 1.0185 0.9819 6-mos. forward 1.0012 0.9988 0.7623 1.3118 Soybeans (cents/bu.) CBOT 1333.00 6.00 0.45 1,354.50 871.50 3-mos. forward 1.3394 0.7466 1.0198 0.9806 Czech Rep. koruna-b 25.235 0.0396 19.214 0.0520 Wheat (cents/bu.) CBOT 768.50 -1.00 -0.13% 864.25 504.75 6-mos. forward 1.3426 0.7448 1.0223 0.9782 Denmark krone 7.4508 0.1342 5.6731 0.1763 Live cattle (cents/lb.) CME 105.225 0.725 0.69 107.325 88.750 Chile peso 615.50 0.001625 468.65 0.002134 Hungary forint 276.74 0.003614 210.71 0.004746 Cocoa ($/ton) ICE-US 2,967 9 0.30 3,477 2,410 Colombia peso 2541.92 0.0003934 1935.45 0.0005167 Norway krone 7.8538 0.1273 5.9800 0.1672 Coffee (cents/lb.) ICE-US 231.70 7.05 3.14 234.00 131.40 Ecuador US dollar-f 1.3133 0.7614 1 1 Poland zloty 3.9932 0.2504 3.0405 0.3289 Sugar (cents/lb.) ICE-US 33.18 0.22 0.67 33.50 11.90 Mexico peso-a 16.2426 0.0616 12.3673 0.0809 Russia ruble-d 40.374 0.02477 30.742 0.03253 Cotton (cents/lb.) ICE-US 159.12 5.00 3.24 162.85 61.89 Peru sol 3.6816 0.2716 2.8032 0.3567 Sweden krona 8.9588 0.1116 6.8214 0.1466 Crude palm oil (ringgit/ton) MDEX 3,561.00 43 1.22 3,700 1,970 Uruguay peso-e 26.070 0.0384 19.850 0.0504 Switzerland franc 1.2586 0.7945 0.9584 1.0435 Cocoa (pounds/ton) LIFFE 2,002 15 0.75 2,322 1,610 U.S. dollar 1.3133 0.7614 1 1 1-mo. forward 1.2580 0.7949 0.9578 1.0440 Robusta coffee ($/ton) LIFFE 2,009 19 0.95 2,084 1,374 Venezuela bolivar 5.64 0.177293 4.29 0.232848 3-mos. forward 1.2571 0.7955 0.9572 1.0448 Copper (cents/lb.) COMEX 427.20 6.60 1.57 428.95 230.00 ASIA-PACIFIC 6-mos. forward 1.2553 0.7966 0.9558 1.0462 Gold ($/troy oz.) COMEX 1385.00 -1.10 -0.08 1,432.50 897.30 Australia dollar 1.3164 0.7597 1.0023 0.9977 Turkey lira 2.0442 0.4892 1.5565 0.6425 Silver (cents/troy oz.) COMEX 2924.50 -11.00 -0.37 3,075.00 1,475.00 China yuan 8.7449 0.1144 6.6585 0.1502 U.K. pound 0.8486 1.1784 0.6461 1.5477 Aluminum ($/ton) LME 2,394.00 53.00 2.26 2,481.50 1,857.00 Hong Kong dollar 10.2104 0.0979 7.7743 0.1286 1-mo. forward 0.8488 1.1782 0.6463 1.5473 Tin ($/ton) LME 26,200.00 50.00 0.19 27,325.00 14,975.00 India rupee 59.4291 0.0168 45.2500 0.0221 3-mos. forward 0.8492 1.1776 0.6466 1.5466 Copper ($/ton) LME 9,353.00 148.00 9,353.00 6,120.00 Indonesia rupiah 11875 0.0000842 9042 0.0001106 6-mos. forward 0.8501 1.1763 0.6473 1.5449 1.61 Japan yen 109.95 0.009095 83.72 0.011945 MIDDLE EAST/AFRICA Lead ($/ton) LME 2,464.50 22.50 0.92 2,616.00 1,580.00 1-mo. forward 109.90 0.009099 83.68 0.011950 Bahrain dinar 0.4952 2.0196 0.3770 2.6524 Zinc ($/ton) LME 2,311.00 23.00 1.01 2,659.00 1,617.00 3-mos. forward 109.83 0.009105 83.63 0.011958 Egypt pound-a 7.6253 0.1311 5.8060 0.1722 Nickel ($/ton) LME 24,600 -365 -1.46 27,590 17,100 6-mos. forward 109.68 0.009117 83.52 0.011974 Israel shekel 4.7176 0.2120 3.5920 0.2784 Crude oil ($/bbl.) NYMEX 89.54 0.17 0.19 93.87 60.30 Malaysia ringgit-c 4.1174 0.2429 3.1350 0.3190 Jordan dinar 0.9302 1.0751 0.7083 1.4119 Heating oil ($/gal.) NYMEX 2.5136 0.0098 0.39 2.5421 1.5800 New Zealand dollar 1.7653 0.5665 1.3441 0.7440 Kuwait dinar 0.3713 2.6935 0.2827 3.5376 RBOB gasoline ($/gal.) NYMEX 2.3712 0.0092 0.39 2.3790 1.8472 Pakistan rupee 112.685 0.0089 85.800 0.0117 Lebanon pound 1970.68 0.0005074 1500.50 0.0006665 Natural gas ($/mmBtu) NYMEX 4.208 -0.052 -1.22 11.610 3.854 Philippines peso 58.267 0.0172 44.365 0.0225 Saudi Arabia riyal 4.9252 0.2030 3.7501 0.2667 Brent crude ($/bbl.) ICE-EU 92.96 0.22 0.24 133.57 68.09 Singapore dollar 1.7234 0.5802 1.3123 0.7620 South Africa rand 8.9367 0.1119 6.8045 0.1470 Gas oil ($/ton) ICE-EU 774.25 10.00 1.31 782.75 592.50 South Korea won 1516.00 0.0006596 1154.30 0.0008663 United Arab dirham 4.8239 0.2073 3.6730 0.2723 Taiwan dollar 39.256 0.02547 29.890 0.03346 Source: Thomson Reuters; WSJ Market Data Group SDR -f 0.8579 1.1657 0.6532 1.5310 WSJ.com Thailand baht 39.604 0.02525 30.155 0.03316 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 139.34 1.45 1.05% 13.2% 15.8% 27 Euro Zone Euro Stoxx 280.74 3.12 1.12% 2.2% 2.8% ... Australia SPX/ASX 200 4771.86 35.28 0.74 -2.0 1.4 14 Euro Stoxx 50 2873.64 34.42 1.21 -3.1 -2.5 ... China CBN 600 27797.66 515.77 1.89 -4.3 3.5 22 Denmark OMX Copenhagen 424.34 1.42 0.34 34.4 35.4 14 Hong Kong Hang Seng 22993.86 354.78 1.57 5.1 9.0 14 Finland OMX Helsinki 7657.04 115.58 1.53 18.6 20.7 20 India Sensex 20060.32 171.44 0.86 14.9 20.2 13 France CAC-40 3927.49 42.41 1.09 -0.2 0.7 ... Indonesia Jakarta Composite 3637.446 68.636 1.92 43.5 47.4 14 Germany DAX 7077.99 59.39 0.85 18.8 19.0 ... Japan Nikkei Stock Average 10370.53 154.12 1.51 -1.7 -0.1 12 Italy FTSE MIB 20736.60 362.94 1.78 -10.8 -9.8 ... Topix 906.21 7.66 0.85 -0.2 0.3 10 Netherlands AEX 356.14 2.99 0.85 6.2 7.1 ... Malaysia Kuala Lumpur Composite 1505.18 9.30 0.62 18.3 19.4 ... Russia RTSI 1755.79 16.12 0.93 23.0 23.9 ... New Zealand NZSX-50 3319.100 19.144 0.58 2.8 4.4 9 Spain IBEX 35 10203.4 207.3 2.07 -14.5 -14.2 9 Pakistan KSE 100 11825.06 -18.59 -0.16% 26.0 26.7 14 Switzerland SMI 6558.17 36.92 0.57 0.2 -0.4 13 Philippines Manila Composite 4091.86 14.80 0.36 34.0 35.7 ... Turkey ISE National 100 64819.64 1318.06 2.08 22.7 25.8 ... Singapore Straits Times 3139.85 6.89 0.22 8.4 11.2 12 U.K. FTSE 100 5951.80 60.19 1.02 10.0 11.7 11 South Korea Kospi 2037.09 16.81 0.83 21.1 23.0 17 AMERICAS DJ Americas 337.66 1.57 0.47 13.9 14.1 14 Taiwan Weighted 8827.79 59.07 0.67 7.8 12.4 ... Brazil Bovespa 68219.88 956.28 1.42 -0.5 1.5 10 Thailand SET 1013.19 6.68 0.66 37.9 39.9 ... Argentina Merval 3466.95 1.64 0.05 49.4 55.8 23 EUROPE Stoxx Europe 600 280.75 2.37 0.85 10.9 11.7 17 Mexico IPC 38198.41 222.93 0.59 18.9 18.7 14 Stoxx Europe 50 2643.95 22.04 0.84 2.5 3.1 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 2578.17 20.27 0.79% 11.2% 12.5% -5.7% 2.25% 13 Shenzhen -c 455.34 6.98 1.56% 9.3% 18.6% -2.1% from MSCI Barra as of December. 21, 2010 1.97 15 Global DOW 2076.21 19.20 0.93 4.6 5.9 -9.1 1.81 18 U.S. TSM 13070.28 47.02 0.36 14.8 14.5 -4.3 Price-to- LOCAL-CURRENCY 2.25 14 Global Titans 50 175.36 0.47 0.27 1.0 1.5 -10.0 4.52 14 Global Select Div -d 213.04 1.54 0.73 5.5 8.0 -8.1 Dividend earnings PERFORMANCE 2.34 16 Asia/Pacific TSM 1379.04 14.16 1.04 13.4 16.0 -3.8 5.55 11 Asia/Pacific Select Div -d 290.68 2.47 0.86 8.2 12.9 -9.6 yield ratio Morgan Stanley Index Last Daily YTD 52-wk. 2.47 16 Asia/Pacific ex-Japan TSM 3531.43 38.43 1.10 14.8 19.9 -2.6 3.68 7 Hong Kong Select Div -d 216.56 2.98 1.39 15.6 19.5 0.9 2.40% 15 ALL COUNTRY (AC) WORLD* 324.52 -0.08% 8.4% 10.5% 2.68 15 Europe TSM 2736.82 32.98 1.22 2.2 4.2 -10.7 4.01 14 U.S. Select Dividend -d 357.91 0.52 0.15 13.4 12.9 -8.3 2.50 15 World (Developed Markets) 1,259.82 -0.16 7.8 9.6 2.04 12 Emerging Markets TSM 4689.31 61.14 1.32 15.6 19.4 -3.7 1.56 19 Islamic Market 2205.58 14.63 0.67 11.7 12.9 -2.8 1.70 26 World Small Cap 231.74 -0.16 21.9 27.3 2.75 13 Asian Titans 50 143.15 1.74 1.23 6.6 9.4 -5.7 1.93 14 Islamic Market 100 2230.21 12.57 0.57 5.1 5.8 -5.3 2.55 13 BRIC 50 636.77 6.54 1.04 6.5 10.6 -5.5 2.22 14 Islamic China/HK Titans 30 1662.38 21.37 1.30 11.9 16.6 -6.5 2.50 15 Kokusai (World ex-Japan) 1,247.87 -0.17 7.6 9.5 2.55 13 CBN China 600 -c 27797.66 515.77 1.89 -4.3 3.5 -11.1 1.29 17 Sustainability Korea 1454.82 5.98 0.41 20.7 24.1 -2.2 3.10 15 EAFE 1,624.62 -0.19 2.8 4.2 2.25 13 China Offshore 50 4237.61 64.14 1.54 3.9 7.8 -7.6 3.46 20 Brookfield Infrastructure 2238.24 7.47 0.33 10.4 12.3 -3.2 2.20 14 Emerging Markets (EM) 1,111.01 0.40 12.3 16.6 2.25 13 Shanghai -c 371.71 6.70 1.84 -4.1 3.5 -10.8 DJ-UBS Commodity -p 156.97 1.78 1.15 12.8 16.3 -4.6 2.70 15 AC ASIA PACIFIC EX-JAPAN 463.93 0.31 11.4 15.3*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 509.89 0.47 13.3 18.3 2.00 16 Japan 560.81 -0.49 -1.3 7.4Cross rates U.S.-dollar and euro foreign-exchange rates in global trading 2.20 14 China 65.41 -0.49 0.9 1.4 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) 3,155.34 -1.42 -6.7 -5.4 U.S. 1.002 0.646 1.018 6.658 0.761 7.774 45.250 9041.59 83.720 1.344 1154.29 3.135 44.365 1.312 0.958 29.890 30.155 Australia 0.998 0.645 1.016 6.643 0.760 7.756 45.146 9020.80 83.527 1.341 1151.64 3.128 44.263 1.309 0.956 29.821 30.086 2.50 22 Hong Kong 11,996.81 -0.48 17.9 20.3 Britain 1.548 1.551 1.575 10.305 1.178 12.032 70.033 13993.67 129.573 2.080 1786.50 4.852 68.664 2.031 1.483 46.261 46.671 0.90 23 India 786.67 0.12 11.3 15.1 Canada 0.982 0.985 0.635 6.542 0.748 7.638 44.456 8883.03 82.252 1.321 1134.05 3.080 43.587 1.289 0.942 29.366 29.626 China 0.1502 0.151 0.097 0.153 0.114 1.168 6.796 1357.91 12.573 0.202 173.36 0.471 6.663 0.197 0.144 4.489 4.529 1.20 11 Korea 579.55 -0.02 20.5 30.8 Euro 1.313 1.316 0.849 1.337 8.745 10.210 59.429 11874.77 109.954 1.765 1515.99 4.117 58.267 1.723 1.259 39.256 39.604 Hong Kong 0.129 0.129 0.083 0.131 0.856 0.098 5.820 1163.01 10.769 0.173 148.48 0.403 5.707 0.169 0.123 3.845 3.879 2.30 18 Malaysia 551.92 -0.31 17.5 18.7 India 0.0221 0.0222 0.0143 0.0225 0.1471 0.0168 0.1718 199.81 1.8502 0.0297 25.51 0.0693 0.9804 0.0290 0.0212 0.6606 0.6664 2.80 15 Singapore 1,722.25 -0.77 6.0 12.9 Indonesia 0.0001 0.0001 0.0001 0.0001 0.0007 0.0001 0.0009 0.0050 0.0093 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 0.093 0.540 108.00 0.016 13.79 0.037 0.530 0.016 0.011 0.357 0.360 3.40 14 Taiwan 312.10 -0.74 5.5 13.8 New Zealand 0.744 0.746 0.481 0.757 4.954 0.566 5.784 33.666 6726.94 62.288 858.80 2.332 33.008 0.976 0.713 22.238 22.435 2.70 15 Thailand 398.47 -1.99 32.1 42.2 South Korea 0.0009 0.0009 0.0006 0.0009 0.0058 0.0007 0.0067 0.0392 7.83 0.0725 0.0012 0.0027 0.0384 0.0011 0.0008 0.0259 0.0261 Malaysia 0.319 0.320 0.206 0.325 2.124 0.243 2.480 14.434 2884.08 26.705 0.429 368.20 14.152 0.419 0.306 9.534 9.619 4.20 16 Australia 966.47 -0.61 -3.5 -0.2 Philippines 0.023 0.023 0.015 0.023 0.150 0.017 0.175 1.020 203.80 1.887 0.030 26.02 0.071 0.030 0.022 0.674 0.680 Singapore 0.762 0.764 0.492 0.776 5.074 0.580 5.924 34.483 6890.14 63.799 1.024 879.63 2.389 33.808 0.730 22.778 22.980 5.30 17 New Zealand 84.39 -0.46 -3.2 -1.1 Switzerland 1.043 1.046 0.674 1.062 6.948 0.795 8.112 47.217 9434.54 87.358 1.403 1204.46 3.271 46.293 1.369 31.189 31.466 1.80 17 US BROAD MARKET 1,412.33 -0.26 14.2 17.3 Taiwan 0.033 0.034 0.022 0.034 0.223 0.025 0.260 1.514 302.50 2.801 0.045 38.62 0.105 1.484 0.044 0.032 1.009 Thailand 0.033 0.033 0.021 0.034 0.221 0.025 0.258 1.501 299.84 2.776 0.045 38.28 0.104 1.471 0.044 0.032 0.991 3.30 14 EUROPE 96.30 0.70 9.1 15.8 Source: Thomson Reuters via WSJ Market Data Group *Twenty-three developed and 26 emerging markets Source: MSCI Barra
28 THE WALL STREET JOURNAL. Wednesday, December 22, 2010 SCANNING THE GLOBEDow Jones Industrial Average P/E: 15 Nasdaq Composite Index P/E: 13* S&P 500 Index P/E: 18LAST: 11525.25 s 47.12, or 0.41% LAST: 2663.40 s 13.84, or 0.52% LAST: 1253.09 s 6.01, or 0.48%YEAR TO DATE: s 1,097.20, or 10.5% YEAR TO DATE: s 394.25, or 17.4% YEAR TO DATE: s 137.99, or 12.4%OVER 52 WEEKS s 1,060.32, or 10.1% OVER 52 WEEKS s 410.73, or 18.2% OVER 52 WEEKS s 135.07, or 12.1% High 12000 2600 1300 Close Low 11500 2500 1250 11000 2400 1200 t 10500 2300 1150 50–day moving average 10000 2200 1100 9500 2100 1050 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 3 10 17 Oct. Nov. Dec. Oct. Nov. Dec. Oct. Nov. Dec.*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 6.2 $29.09 –0.04 –0.14% Citigroup C 174.2 $4.71 ... 0.11% $12.73 $9.30 TaiwanSemi TSM 6,352.6 $12.39 0.06 0.49%Alcoa AA 10.9 14.97 0.20 1.32 BankAm BAC 60.9 12.78 0.16 1.27 115.04 38.47 Baidu ADS BIDU 5,052.9 100.86 2.07 2.10AmExpress AXP 5.5 43.28 0.78 1.84 SPDR S&P 500 SPY 40.3 125.18 0.58 0.47 37.65 13.85 TataMtrs ADS TTM 1,350.7 30.46 0.68 2.28BankAm BAC 60.9 12.78 0.16 1.27 CiscoSys CSCO 32.4 19.56 –0.06 –0.31 15.75 9.40 ChMedTech ADS CMED 1,202.9 11.74 0.54 4.86Boeing BA 2.0 63.83 0.56 0.89 SiriusXM SIRI 28.9 1.46 0.05 3.91 4.24 2.50 UtdMicro ADS UMC 1,036.1 3.11 0.04 1.30Caterpillar CAT 1.3 94.42 1.12 1.20 GenElec GE 22.2 17.98 0.28 1.58 92.62 58.38 BHPBilton ADS BHP 999.7 90.98 1.83 2.05Chevron CVX 2.4 89.70 0.90 1.01 iShrMSCIEmrgMkt EEM 22.1 46.52 0.69 1.52 53.16 29.90 CtripInt ADS CTRP 926.1 41.00 0.69 1.71CiscoSys CSCO 32.4 19.56 –0.06 –0.31 MGMResortsIntl MGM 20.7 14.79 0.45 3.14 18.78 7.05 SuntechPwr STP 821.9 8.26 –0.02 –0.24CocaCola KO 3.2 65.21 –0.10 –0.15 SprintNextel S 20.5 4.34 0.07 1.58 22.81 16.63 KT Crp ADS KT 811.4 21.09 –0.02 –0.09Disney DIS 1.8 37.38 0.32 0.86 Pfizer PFE 19.4 17.30 0.13 0.76 7.70 4.45 Slcnwr ADS SPIL 712.8 5.85 0.06 1.04DuPont DD 1.6 49.95 0.23 0.45 SPDR FnclSelSct XLF 19.3 15.73 0.19 1.22 40.45 25.85 SonyCp SNE 699.8 36.22 1.03 2.93ExxonMobil XOM 5.6 72.33 0.11 0.15 MicronTch MU 18.3 8.16 0.05 0.62 13.30 8.38 AU Optrncs AUO 632.0 10.30 –0.02 –0.19GenElec GE 22.2 17.98 0.28 1.58 FordMotor F 16.1 16.95 0.10 0.59 19.24 14.58 SK Tele ADS SKM 544.6 18.66 0.14 0.76HewlettPk HPQ 6.7 42.00 0.11 0.26 LasVegasSands LVS 16.1 47.60 0.12 0.25 58.22 32.68 ICICI Bk ADS IBN 528.7 50.46 1.67 3.42HomeDpt HD 2.5 35.27 0.06 0.18 Microsoft MSFT 15.4 27.97 0.16 0.58 41.80 23.13 DrRdyLab ADS RDY 515.1 36.80 –0.91 –2.41Intel INTC 13.2 21.17 –0.06 –0.28 18.20 10.43 KoreaElecPwr KEP 505.3 13.34 0.52 4.06IBM IBM 1.4 145.48 0.97 0.67 Biggest gainers... 5.56 4.48 MitsuUFJ ADS MTU 471.3 5.20 ... –0.02JPMorgChas JPM 11.7 40.81 0.86 2.14 21.59 13.75 LG DisplayADS LPL 412.2 17.27 0.10 0.58JohnsJohns JNJ 3.5 62.47 –0.02 –0.03 XOMA XOMA 4,353.7 $3.50 1.12 47.06% 5.97 3.33 AdSemEg ADS ASX 380.1 5.65 0.07 1.18KftFoods KFT 2.3 31.87 0.14 0.45 LaserCard LCRD 3,830.6 6.20 1.75 39.33 54.70 44.36 ChinaMobile CHL 363.0 49.85 0.49 0.99McDonalds MCD 1.9 76.66 –0.26 –0.34 MartekBiosci MATK 11,038.0 31.56 8.20 35.12 27.27 12.26 FocusMediaHldg FMCN 345.5 22.45 0.54 2.46Merck MRK 3.4 36.27 –0.23 –0.62 OptimumBk OPHC 5.3 2.85 0.60 26.67 74.16 49.55 Infosys INFY 315.5 74.17 0.42 0.57Microsoft MSFT 15.4 27.97 0.16 0.58 ThermoGen KOOL 221.0 2.82 0.50 21.55 15.68 10.34 ChinaUnicomHK CHU 292.3 14.96 –0.04 –0.27Pfizer PFE 19.4 17.30 0.13 0.76 17.19 12.14 Panasonic ADS PC 289.4 13.90 0.06 0.43ProctGamb PG 3.0 64.96 –0.01 –0.02 ...Biggest losers 140.34 87.80 Posco PKX 268.1 107.79 5.57 5.453M MMM 1.2 86.65 –0.69 –0.79 CPI Cp CPY 948.1 $23.39 –7.08 –23.24% 16.81 11.30 Wipro ADS WIT 238.1 15.30 0.25 1.66TravelersCos TRV 1.0 55.54 0.09 0.16 OrionMarineGp ORN 2,215.5 11.54 –3.20 –21.71 91.97 67.56 ToyotaMtr ADS TM 204.2 77.94 0.71 0.91UnitedTech UTX 1.2 79.15 0.25 0.32 TIB Fnl TIBBD 3.4 24.00 –6.00 –20.00 9.55 5.90 TeleNZ ADS NZT 168.4 8.27 0.09 1.10Verizon VZ 5.6 34.74 ... 0.01 BioanlySys BASI 89.2 2.89 –0.66 –18.59 5.27 3.05 VimicroIntl ADS VIMC 151.2 3.70 0.05 1.37WalMart WMT 3.1 53.70 –0.07 –0.14 KandiTech KNDI 2,125.0 5.48 –1.22 –18.21 17.52 13.98 NTT DOCOMO DCM 63.0 17.14 0.13 0.76 *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 5.120% 451.4 450.8 459.8 341.6 5.093% 5.113% 4.286% 30-year Treasury 4.457% 16.53 –5.58 % –10.05 % 8.79 % 5.87 % 4.500 10 5.550 222.8 226.4 261.1 178.5 5.525 5.489 5.466 4 10-year Treasury 3.349 8.57 –4.51 –5.97 7.75 5.34 3.800 Austria 2 1.595 98.9 98.8 71.0 5.8 1.573 1.225 0.928 7 Year Treasury 2.697 6.37 –3.29 –4.13 8.78 6.74 s One year ago 3.500 10 3.474 15.2 20.9 23.0 -8.4 3.470 3.108 3.597 1.948 4.75 –2.18 –2.62 6.76 5.07 3 Five-year Treasury 2.000 Belgium 2 1.741 113.5 118.6 80.8 17.3 1.771 1.323 1.043 Ryan Index 2.340 6.85 –2.76 –3.97 6.54 4.78 3.750 10 3.982 66.0 70.1 71.4 -8.1 3.962 3.592 3.600 2 3 Year Treasury 0.995 2.94 –0.74 –0.71 4.24 3.21 1.500 Canada 2 1.637 103.1 99.9 113.7 49.0 1.584 1.652 1.360 Two-year Treasury 0.597 1.93 –0.25 –0.22 2.11 1.58 3.500 10 3.167 -15.5 -13.1 26.3 -16.7 3.130 3.141 3.514 1 Year Treasury 0.295 0.99 0.01 0.07 0.81 0.73 1 4.000 Denmark 2 1.156 55.0 56.8 75.6 111.4 1.153 1.271 1.984 Six-month Treasury 0.193 0.50 0.03 0.06 0.27 0.27 s Monday 4.000 10 3.032 -29.0 -24.2 -4.3 -18.0 3.019 2.835 3.501 Ryan Cash Index-a 0.160 0.45 0.02 0.06 0.36 0.34 0 0.750 France 2 1.108 50.2 50.5 81.8 24.6 1.090 1.333 1.116 Three-month bill 0.132 0.25 0.03 0.07 0.21 0.23 1 3 6 1 2 3 5 710 30 2.500 10 3.329 0.7 8.5 23.1 -23.8 3.346 3.109 3.443 month(s) years One-month bill 0.020 0.07 0.02 0.04 0.13 0.13 1.000 Germany 2 1.037 43.1 45.3 58.9 28.7 1.038 1.104 1.157 maturity a-Performance of a cash investment Source: Ryan ALM 2.500 10 2.976 -34.6 -31.0 -18.0 -50.2 2.951 2.698 3.179 0.360 Hong Kong 2 0.804 19.8 22.4 3.4 -37.7 0.809 0.549 0.493 2.440 10 3.085 -23.7 -17.7 -39.1 -123.0 3.084 2.487 2.451 2.000 Italy 2 2.642 203.6 200.4 184.7 61.4 2.589 2.362 1.484 Key money rates 3.750 10 4.672 135.0 136.5 132.9 35.3 4.626 4.207 4.034 Latest 52 wks ago Latest 52 wks ago Offer Bid 0.200 Japan 2 0.193 -41.3 -38.0 -35.5 -70.0 0.205 0.160 0.170 Prime rates Euro Libor Eurodollars 1.200 10 1.183 -213.9 -207.1 -179.0 -245.9 1.190 1.088 1.222 U.S. 3.25% 3.25% One month 0.72750% 0.44438% One month 0.3500% 0.2500% 5.000 Netherlands 2 0.944 33.8 34.6 59.2 -2.0 0.931 1.107 0.850 Canada 3.00 2.25 Three month 0.94688 0.66875 Three month 0.5500 0.4500 3.500 10 3.164 -15.8 -11.6 4.3 -28.9 3.145 2.921 3.392 Japan 1.475 1.475 Six month 1.19375 0.97500 Six month 0.7500 0.6000 Britain 0.50 0.50 One year 1.48000 1.22188 One year 1.0500 0.8500 5.000 Portugal 2 4.532 392.6 391.5 408.4 41.6 4.500 4.599 1.286 ECB 1.00 1.00 Hibor 4.800 10 6.665 334.3 330.5 407.3 31.8 6.566 6.951 3.999 Switzerland 0.57 0.53 One month 0.26786 0.07000% Latest 52 wks ago 3.900 Spain 2 3.787 318.1 318.8 218.5 62.8 3.773 2.700 1.498 Three month 0.31000 0.11964 Australia 4.75 3.75 U.S. discount 0.75% 0.50% 4.850 10 5.562 224.0 226.1 185.6 24.8 5.522 4.734 3.929 Hong Kong 5.25 5.25 Six month 0.43000 0.24929 Fed-funds target 0.25 0.25 4.000 Switzerland 2 0.499 -10.7 -5.9 18.6 -28.8 0.526 0.701 0.582 One year 0.75929 0.58929 Call money 2.00 2.00 2.000 10 1.825 -149.7 -141.6 -127.8 -174.1 1.845 1.600 1.940 Libor Asian dollars 4.500 U.K. 2 1.207 60.1 57.0 25.4 33.8 1.155 0.769 1.208 One month 0.26063% 0.23188% One month 0.2711% 0.24% Overnight repurchase rates 4.750 10 3.507 18.5 21.6 50.8 18.2 3.477 3.386 3.863 Three month 0.30281 0.24875 Three month 0.3090 0.2633 U.S. 0.29% 0.19% 0.500 U.S. 2 0.606 ... ... ... ... 0.585 0.515 0.870 Six month 0.45719 0.43125 Six month 0.4690 0.4613 U.K. (BBA) 0.558 0.498 2.625 10 3.322 ... ... ... ... 3.261 2.878 3.681 One year 0.78325 0.97813 One year 0.7900 0.9925 Euro zone 0.37 0.31 Source: Thomson Reuters Sources: WSJ Market Data Group; Reuters
Wednesday, December 22, 2010 THE WALL STREET JOURNAL. 29 THE PROPERTY REPORTScottish factory gets a second windNew owner is likely to build wind-turbine plant on site of never-used memory-chip facility, and develop, sell landBY ANTHONY KLAN developed for industrial use by Ko- rea’s Hyundai Electronics Indus- In March, demolition workers tries Co., which announced plans inwill begin tearing apart a one-mil- 1996 to invest $1.4 billion to createlion-square-foot memory-chip fac- a semiconductor plant that wouldtory that, despite being built more employ 2,000 people. It was her-than a dozen years ago and owned alded as a panacea to unemploy-at different times by two of the ment problems in the region.world’s biggest electronics manufac- But in April 1998, amid the Asianturers, has never produced a single financial crisis, Hyundai mothballeditem. the project during its final stages of The once state-of-the-art semi- construction. The company said itconductor plant at Dunfermline, would resume work once KoreaScotland, about 20 miles northwest emerged from the worst of the eco-of Edinburgh, symbolizes the strug- nomic slump.gle the country has had in its at- Instead, the plant was sold threetempts to attract high-tech manu- years later to Motorola Inc., whichfacturers to its shores, and how planned to manufacturer memoryhard its commercial-property sector chips for mobile phones. But thathas been hit by the global economic never happened because of competi-downturn. tion in Asia and the slump in the The property is now embarking price of chips. When Motorola spunon a new life. It was purchased this off its Freescale Semiconductormonth by Shepherd Offshore Ser- unit in 2004, the Dunfermline fac-vices Ltd., a Newcastle resources tory went with it. Colliers Internationalcompany owned by former Newcas- Freescale, which was taken pri-tle United soccer club Chairman vate in 2006 in a $17.6 billion lever-Freddy Shepherd. aged buyout by a consortium led by Shepherd officials didn’t return Blackstone Group LP, put the prop-calls seeking comment. But people erty on the block in 2007. But thenfamiliar with the property said the The one-million-square-foot memory-chip factory in Dunfermline, Scotland, never produced a single chip. the global financial crisis hit, leav-company paid about £10 million ing the property on the market for($15.5 million) for it. yield about 600 jobs eventually, but companies shelve plans, shut their Taiwanese company operating in the three years without a buyer. After the demolition, the new we are going to have to be much doors or wind down in the face of Czech Republic. In 2005, Hewlett- Shepherd Offshore, the newowner likely will build a wind-tur- more conservative over this one,” far more favorable manufacturing Packard Co. announced plans to ax owner, plans to demolish almost allbine factory on the site, and develop said Fife Councilor Tony Martin, conditions in emerging economies 85 jobs at a plant in Erskine, and in of the never-used facility, accordingand sell of some of the land for “We have to realize this will take such as China and India. January 2007 electronics group to Doug Barrett, principal with Ad-commercial, retail and residential time; it isn’t a quick fix.” In 2001, computer company Simclar shut plants at Irvine and vanced Technology Resourceuses, according to the Fife Council, The Dunfermline semiconductor Compaq Computer Corp. announced Kilwinning, with a loss of about 420 Group, the U.S. advisory firm thata county governing body. plant is just one of a long list of 700 job losses from its Erskine jobs. co-brokered the deal with Colliers “Shepherd tells us the site will high-tech failures in Scotland, as plant, with that work moved to a The Dunfermline site was first International.Signs of cooling in Hong Kong Wells Fargo to modify Continued from first pagewere announced, prices for mass- California mortgagesmarket residences have declined BY MATTHIAS RIEKER nancial Corp. Both were bought by3%-5%, says Ricky Poon, executive AND JOAN E. SOLSMAN Wells Fargo. Terms of the deal an-director of residential sales at Col- nounced Monday were similar toliers International in Hong Kong. Wells Fargo & Co. agreed to those in the October agreement. In the luxury market, prices have make an estimated $2.4 billion in Wells Fargo’s biggest concentrationremained steady, Mr. Poon says, as mortgage modifications for Califor- to “pick-a-payment” is in California.owners turn from selling to leasing nia homeowners with “pick-a-pay- In addition to the loan modifica-in order to avoid cutting prices. ment” adjustable-rate loans, as part tions, Wells Fargo agreed to pay $33 Data from real-estate agents are of an agreement with the state’s at- million to California for customermixed. Centaline Property Agency torney general. outreach and to prevent or reduceLtd. says mass-market sales this The fourth-largest U.S. bank in the effects of foreclosures in Califor-past weekend were 11% higher than assets said it is seeking to reach an nia communities. Swire Propertiesthose of Nov. 13-14, the weekend be- agreement with other states. “I’d California Attorney General Ed-fore the stamp duties were enacted. love to get all 50 states in,” said mund “Jerry” Brown said the stateMidland Realty, another big agency, Franklin Codel, chief financial of- would use $32 million for restitu-says mass-market sales were down ficer of Wells Fargo’s mortgage unit. tion to roughly 12,000 pick-a-payabout one-third from where they A model living room of the Azura development in Hong Kong’s Mid-Levels. “We are pleased to be in this agree- borrowers in California who lostwere before the measures were an- ment” with California. homes through foreclosure.nounced. Neither agency tracks ing to buy in October, when her woman Brenda Wong. In October, the San Francisco Wells Fargo has written downsales in the luxury market. landlord raised the rent on her Some developers may decide to bank reached an agreement with the value of the mortgages qualify- A Centaline spokeswoman says Kowloon apartment by about 10%. wait it out, too. eight other U.S. states that investi- ing for modifications under Mon-asking prices have stayed stable, Several weeks after she started her “You’re going to see them hold- gated risky mortgages made by Wa- day’s agreement, meaning it won’tand the higher volume can be at- hunt, the government announced ing back a little until they can be chovia Corp. and Golden West Fi- have to take an additional charge.tributed to consumers beginning to the stamp duties, and she put her sure of a sales strategy,” Nomura’s BUSINESS REAL ESTATEbuy in the secondary market. purchase on hold. Now she is rent- Mr. Louie says, adding they would In theory, purchasers of lower- ing again, in another neighborhood, have to lower prices 15%-20% topriced homes who hold their prop- hoping to make a purchase within make it attractive enough for peopleerties for the long term aren’t af- the next year. to buy right now.fected by the new measures, which Analysts believe some developers Representatives for Cheung Kong MAKE GREATamong other things restrict credit may choose to shelve new launches Holdings, Henderson Land Devel- UNITED STATES CONNECTIONSfor apartments worth HK$12 million rather than lower prices. Already, opment Co., Swire Properties, Sun IN ASIA.or more. In addition, owners are lia- launches for two projects in Hong Hung Kai Properties and Kerry THE WALL STREETble for stamp duties of as much as Kong’s New Territories, Para Nara in Properties declined to comment on JOURNAL ASIA.15% of a property’s sale price if it is Yuen Long and Avignon in Tuen their strategies in the wake of thebought and sold within two years. Mun, have been pushed back from new measures. According to a No- To advertise But even ordinary homebuyers their original end-2010 target dates vember Citigroup report, these de- Brian Tong Sales Directorwho fall outside the scope of the in reaction to the stamp-duty in- velopers have 16 projects in the Vertical Marketsmeasures are reluctant to pull the creases, says Cusson Leung, a Credit pipeline for 2011. The Wall Street Journal Asia Hong Kong: 852 2831 2552trigger if they believe prices will Suisse property analyst. Barbara Ho, head of property Fax: 852 2574 2618slide. Sun Hung Kai Properties Ltd., sales for New World Development Singapore: 65 6415 4279 Fax: 65 6225 5039 “I foresee housing prices will the developer for both projects, is Co., says the company’s next project firstname.lastname@example.org on dropping,” says Blondy Le- waiting on government approvals to isn’t expected to come to marketung, a 29-year-old who started look- begin marketing them, says spokes- until next summer.
30 THE WALL STREET JOURNAL. Wednesday, December 22, 2010 HEARD ON THE STREETEmail: email@example.com FINA NCIA L A NA LYSIS & COMMENTARY WSJ.com/HeardHyundai Motor must look past emotions Hyundai Motor President Chung original empire and that HyundaiMong-koo has a good opportunity to Constructive relief and grief E&C started it all in 1947 highlightsreconsider his position on Hyundai Some key dates in Hyundai Group*, Hyundai Motor drama how emotional this contest is.Engineering & Construction. If Hyundai Motor insists on going Now that creditors have scotched Sept. 24: Sept. 27: Oct. 19: Nov. 16: Hyundai Nov. 29: Hyundai Dec. 10: Hyundai Dec. 20: ahead on the bid now, it needs to ex-Hyundai Group’s bid for a piece of Hyundai E&C Hyundai Motor Hyundai Motor Group chosen Group signs Group ﬁles Creditors revoke plain to shareholders why an autothe old Hyundai conglomerate, it is creditors start says to bid for says it will over Hyundai initial pact for injunction Hyundai Groups maker, which already has a unit totime for Hyundai Motor to focus on sale Hyundai E&C invest nearly $9 Motor as stake against creditors preferred build its plants and offices, needs awhat it does best: building a brand billion in preferred bidder to prevent sale bidding status major contractor; how that will con-and selling cars. Knowing that his contractor over cancellation tribute to the bottom line—not to thesister-in-law’s company—a rival rem- 80% decade, if it firm’s bragging rights—and minoritynant of the empire—won’t get the wins shareholder interests; and how that Share performancecontractor ought to make it easier integration won’t interfere with the 60for Mr. Chung to give up on the bid success it has had in recent years. Afor nostalgia. Owning a construction Hyundai Motor hard sell, indeed.company with little or no synergy 40 Getting away from the distractionbenefits smacks of an unfocused and drama of the Hyundai E&C bidstrategy. Mr. Chung should move 20 will serve Mr. Chung’s company andaway from that misguided notion. Hyundai Merchant Marine shareholders better. And the money Last month, in a highly public and 0 could be better used to rewardbarbed contest, Hyundai Group beat Sept. Oct. Nov. Dec. shareholders or to fund research andout cash-rich Hyundai Motor to be- development and expansion. * Proxy for unlisted Hyundai Group is its main unit Hyundai Merchant Marine. Sources: Thomson Reuters Datastream; WSJ reportingcome the preferred bidder for the Winning might satisfy Mr.35% equity chunk. Monday, Hyundai Chung’s quest to own more familyE&C lenders said they will scrap an Tuesday, shares of the group’s cerns eased over its financing burden The rival bidders were once part silver. But it’s the wrong way to goagreement to sell their controlling main unit, Hyundai Merchant Ma- for the group’s bid. Those of the auto of a conglomerate broken up in the about bolstering the conglomerate’sstake to Hyundai Group for around rine, jumped nearly 5% before set- maker ended down 1.7% on the view wake of the late-1990s Asian finan- legacy.$4.8 billion. tling back to close up 0.9%, after con- that it will be next in line to bid. cial crisis. That they are heirs to the —James SimmsPfizer’s best medicine may be in emerging markets After another painful year for further. Why? One reason is the FDA has provals is also a function of a ma- ture look? One important differencedrug stocks, investors are still wait- One piece of good news is that set a higher bar, requiring firms to turing industry. During the 1980s is a more-volatile revenue streaming for the medicine to kick in. the most severe patent expirations, spend more to get drugs approved. and ’90s, pharmaceutical companies from countries where health-care It is hard to dispute that large- such as Lipitor’s, are unlikely to discovered blockbuster drugs like spending is more cyclical. Yetcapitalization pharmaceutical stocks hurt Pfizer shares much more. The Lipitor and Prozac, both made from pharma companies can smooth outlook cheap. Pfizer, one of the leastexpensive of the group, trades for cholesterol drug, which generated 23% of total revenue in 2009, will be The greater concern for small molecules. Now, companies have focused on more complex some of the volatility through a di- verse set of sales sources.just 7.4 times 2011 consensus earn- open to generic competition in 2011, Pfizer’s stock is the outlook drugs to treat more complicated dis- A report from research firm IMSings, a 43% discount to the S&P 500.The trouble is that it traded at but analysts have long expected a whack to sales. The greater concern for drug sales a few years eases. Developing and testing such drugs is significantly more costly. points out that total emerging-mar- kets revenues for the industry grewroughly the same multiple a year is the outlook for drug sales a few down the road. Domestic troubles don’t mean Big at least 15% annually every yearago. Since then, the stock has de- years down the road. One reason is Pharma is sunk. Pfizer has made from 2005 to 2009. The transforma-clined 8%, while the S&P 500 gained that developing drugs for sale in the years of investments in emerging tion won’t happen overnight, but in10%. U.S. has become tougher in the past That could be the result of a markets that should soon begin to the meantime, Pfizer offers an im- That performance makes it tough few years. In 2009, the Food and tougher stance by President Barack pay off. Mr. Maris expects emerging pressive 4.7% dividend. That looksto rely on valuation alone to restore Drug Administration approved 26 Obama’s FDA appointees, which markets to account for about 20% of safe for now, and should be enoughPfizer’s stock price. Indeed, the key new drugs, according to CLSA ana- would mean at least two more years the company’s revenue within three to compensate investors for thequestion for investors is whether lyst David Maris. That is less than of headaches. years, from roughly 13% today. firm’s acute growing pains.earnings expectations could weaken half the number approved in 1996. But recent trouble with drug ap- How would the Pfizer of the fu- —John Jannarone Analysis and insight into business, finance, markets, policy, culture, sports and entertainment in the world’s largest democracy through regular posts from The Wall Street Journal and Dow Jones Newswires reporters. In English at asia.WSJ.com/indiarealtime In Hindi at realtime.WSJ.com/in/india Join the conversation today.
Wednesday, December 22, 2010 THE WALL STREET JOURNAL. 31 MARKETS LINEUPMoving the Asian index movers…markets Nikkei Stock Average CBN 600 Sensex Hang SengAt right, Japan’s benchmark stock index and Japan 10370.53 China 27797.66 India 20060.32 Hong Kong 22993.86the biggest movers among the larger Asianstocks indexes and stocks Tuesday. Below s 1.51% or 154.13 s 1.89% or 515.76 s 0.86% or 171.42 s 1.57% or 354.76each index are its most actively traded stocks.The charts show the percentage change in Eased concerns about Korean tensions and Developers surged after a Xinhua publication Coal firms rose. Rains in Australia and Indo- Metal and banking stocks led gains. JSWeach index’s or stock’s value, rather than the about euro-zone debt boosted shares. Ex- forecast a 20% rise in housing prices next nesia have hurt output, J.P. Morgan said. Steel rose 2.2% on news it will acquirepoint change, for purposes of comparison. The porters to Europe gained as the euro rose. year. China Vanke, Poly Real Estate and Bei- China Shenhua rose 3.7% after it said it will nearly 47% of domestic steelmaker Ispat. Is- Sony added 2.7%, and Nikon gained 2.8%. jing Capital Development rose by 10% limits. buy coal assets from its parent. pat fell 3.8%. ICICI Bank climbed 3.6%.index level or stock price is indicated on eachaxis. All indexes and stocks are shown in localcurrency terms. 15000 45000 30000 30000 12500 37500 25000 25000 10000 30000 20000 20000 7500 22500 15000 15000 5000 15000 10000 10000 J F M A M J J A S O N J F M A M J J A S O N J F M A M J J A S O N J F M A M J J A S O N WSJ.com 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. Mizuho Financial 121.11 151 1 0.67 PangangGrpSteelVan 310.63 10.97 0.52 4.98 Hindalco-A 2.79 233.55 9.95 4.45 Icbc 256.50 5.77 0.06 1.05 Mtshbsh Fin Grp 62.42 438 1 0.23 ChinaVankeCoA 297.09 9.13 0.83 10.00 Tata Steel-A 1.28 675.55 11.05 1.66 CCB 191.66 6.98 0.06 0.87 Also, receive emails that summarize Bank Of China 186.80 4.12 0.06 1.48 Shinsei Bank 53.33 98 8 8.89 Everbright Bank 219.96 3.87 0.13 3.48 Jindal Steel-A 1.16 685.10 9.75 1.44 the day’s trading in Europe and Asia. ChinaPetroChem 89.05 7.22 0.11 1.55 IsuzuMotors 31.02 383 6 1.59 GemdaleCorp 219.84 6.34 0.50 8.56 Sterlite (I)-A 1.11 176.40 7.80 4.63 To sign up, go to WSJ.com/Email. Nippon Steel 22.32 299 –1 –0.33 AgricBkofChina 216.85 2.65 0.04 1.53 Reliance Com-A 1.03 127.20 0.45 0.36 PetroChina 76.10 9.91 0.18 1.85Asian stocks in the newsSterlite Inds India POSCO PLUS Expressways SK Energy Hyundai SteelIndia 176.40 rupee Korea 493,000 won Malaysia 4.6 ringgit Korea 188,500 won Korea 127,000 won s 4.6% or 7.80 rupee s 5.1% or 24,000 won s 5.5% or 0.2 ringgit s 5.6% or 10,000 won s 7.6% or 9,000 wonIndian metals firms rose on strong base-metal The firm is expected to announce it will hold The firm got a takeover offer Monday from The oil refiner gained as refining margins are Korean steelmakers gained after recentprices. steel prices steady in January after a Jelas Ulung that topped a bid from UEM. improving and demand is seen as strong. underperformance on a more upbeat outlook December drop. for prices.In rupee 350 In won 1000000 In ringgit 7.50 In won 250000 In won 200000 280 800000 6.00 200000 160000 210 600000 4.50 150000 120000 140 400000 3.00 100000 80000 70 200000 1.50 50000 40000 J F M A M J J A S O N J F M A M J J A S O N J F M A M J J A S O N J F M A M J J A S O N J F M A M J J A S O N 2010 2010 2010 2010 2010Price-to-earnings ratio 14 Price-to-earnings ratio 8 Price-to-earnings ratio 18 Price-to-earnings ratio 20 Price-to-earnings ratio 11Earnings per share, past four quarters 12.28 Earnings per share, past four quarters 64314.97 Earnings per share, past four quarters 0.26 Earnings per share, past four quarters 9663.60 Earnings per share, past four quarters 11073.61Dividend yield 0.5 Dividend yield 1.8 Dividend yield 3.8 Dividend yield 1.1 Dividend yield 0.4 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 1.8% ... 18.8% Basic Resources 1.8% ... 18.8% Indus Gds & Svcs 1.1% -0.4% 22.6% Oil & Gas 1.6% ... 19.8% Basic Resources 1.8% ... 18.8%Sterlite Inds India 4.6% 3.4% -12.5% POSCO 5.1% 3.2% -17.3% PLUS Expressways 5.5% 5.7% 41.5% SK Energy 5.6% 12.5% 72.1% Hyundai Steel 7.6% 11.4% 53.2%Singapore Telecomm Hyundai Motor Samsung Hvy Inds Sun Pharml Inds Hana Finl GroupSingapore S$3.04 Korea 177,500 won Korea 39,250 won India 428.35 rupee Korea 42,200 won t 1.3% or S$0.04 t 1.7% or 3,000 won t 1.9% or 750 won t 3.3% or 14.40 rupee t 3.5% or 1,550 wonThe stock went ex-dividend. The firm looked in line to bid for Hyundai The stock is up 29% in the past two months. The Business Standard reported that two The shares are up 21% in the past month. Engineering after a rival bid was scotched. firms sued Sun for patent infringement on drug Actonel.In Singapore dollars 5 In won 250000 In won 50000 In rupee 750 In won 75000 4 200000 40000 600 60000 3 150000 30000 450 45000 2 100000 20000 300 30000 1 50000 10000 150 15000 J F M A M J J A S O N J F M A M J J A S O N J F M A M J J A S O N J F M A M J J A S O N J F M A M J J A S O N 2010 2010 2010 2010 2010Price-to-earnings ratio None Price-to-earnings ratio 10 Price-to-earnings ratio 10 Price-to-earnings ratio 25 Price-to-earnings ratio 9Earnings per share, past four quarters N.A. Earnings per share, past four quarters 17746.55 Earnings per share, past four quarters 4079.87 Earnings per share, past four quarters 17.40 Earnings per share, past four quarters 4456.68Dividend yield 4.9 Dividend yield 0.6 Dividend yield 1.3 Dividend yield 0.6 Dividend yield 1.2 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 wksTelecommunications 0.9% 0.2% 16.5% Automobiles & Parts 0.4% -0.3% 16.0% Indus Gds & Svcs 1.1% -0.4% 22.6% Health Care 0.7% -0.1% 11.8% Banks 1.0% -0.2% 12.3%Singapore Telecomm -1.3% -2.6% 0.3% Hyundai Motor -1.7% -2.5% 55.0% Samsung Hvy Inds -1.9% 9.2% 56.1% Sun Pharml Inds -3.3% -5.5% 42.4% Hana Finl Group -3.5% 2.2% 24.5%
32 THE WALL STREET JOURNAL. Wednesday, December 22, 2010Published by Dow Jones Publishing Company (Asia). Printed in Hong Kong by Superflag Printing and Communication Limited. 8 Chun Ying Street, NT. Printed in Indonesia by PT Gramedia Printing Group, Jalan Palmerah Selatan 22-28, Jakarta 10270. Printed in Japan by Yomiuri Shimbun, 1-7-1, Otemachi, Chiyoda-ku, Tokyo 100-8055. Printed in Korea by JoongAng Ilbo. 7, Soonwha-Dong, Chung-Ku, Seoul 100-130. 1997 June 04 Registration no.: SeoulKA00020 (Daily Newspaper), Publisher/Editor/Printer: Song, Pil-Ho. Printed in Malaysia by KHL Printing Co.Sdn. Bhd. (ROC No: 235060-A) Lot 10 & 12, Jalan Modal 23/2, Seksyen 23 Kawasan Miel Phase 8, 40000 Shah Alam, Selangor, Malaysia. Printed in Philippines by FEP Printing Corporation, 3817 Mascardo St., Corner Metropolitan Ave., Pasong Tamo, Makati City. Printed in Singapore by KHL Printing Co. Pte Ltd., 57 Loyang Drive, Singapore 508968. Printed and distributed in Taiwan by The China Post, 8 Fu Shun Street, Taipei 104. Printed in Thailand by Nation Multimedia Group Public Co., Ltd., 1854 Bangna-Trad Road, (K.M. 4.5), Prakanong, Bangkok10260. Published and printed on behalf of the Wall Street Journal India Publishing Pvt Ltd, 517B World Trade Centre, Barakhamba Lane, New Delhi 110001 by Mr Suman Dubey at A-8 Sector 7, Gautam Budh Nagar, Noida -201301 and PLOT No.EL208, TTC Industrial Area, Mahape, Navi Mumbai - 400710 (Maharashtra), India, Editor: Suman Dubey, phone: +91-11-6462 0215. ACP no. F.2 (T/3) Press / 2009 FACSIMILE EDITION.