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News Highlights - Week of 26 - 30 September 2011
Hong Kong, China's export growth moderated to 6.8% year-on-year (y-o-y) in August from 9.3% in July amid a weaker global economy. In the Republic of Korea, export growth in September eased to 19.6% y-o-y in September from 25.9% in August, while its current account surplus narrowed to USD0.4 billion in August from USD3.8 billion in July. The Philippines' trade deficit in July stood at USD570 million compared with USD183 million in July 2010. Thailand's trade surplus fell to USD705 million in August from USD2.7 billion in July as export growth eased and import growth surged. Viet Nam's exports rose 33.6% y-o-y in September while imports climbed 31.0% y-o-y.
*Viet Nam's cumulative GDP growth rate for January-September was reported at 5.8% y-o-y last week. The People's Republic of China's (PRC) Purchasing Managers' Index improved to 51.2 in September from 50.9 in August. Industrial production in Japan and the Republic of Korea expanded 0.6% and 4.8% y-o-y, respectively, in August. Factory output growth in the Philippines quickened to 6.8% y-o-y in July from 1.2% in June. Singapore's manufacturing output grew 21.7% y-o-y in August, largely due to strong growth in biomedical products.
*Consumer price inflation in Japan stood at 0.2% y-o-y in August, while in Viet Nam inflation reached 22.4% y-o-y in September on the back of a sharp rise in food prices.
*Last week, two banks in the Republic of Korea-Hana Bank and Woori Bank-issued 3-year bonds worth THB8.0 billion and MYR315 million, respectively, while Malaysia's AmIslamic Bank priced MYR600 million of 10-year subordinated notes.
*LCY corporate bond issuance in the Republic of Korea rose 27.1% month-on-month (m-o-m) in August, led by strong issuance growth in bank debentures and asset-backed securities.
*China Railway Construction announced last week its plan to issue CNY7.5 billion worth of medium-term notes. Shanghai Pudong Development Bank aims to sell CNY18.4 billion of subordinated debt. Indonesia plans to sell retail bonds with tenors of 3 years on 26 October. Krungthai Card intends to raise THB7.0 billion from a dual-tranche bond sale on 10 October. Thailand's Central Pattana aims to issue THB2 billion of 5-, 7-, and 10-year bonds.
*The PRC banking sector's assets grew 16.6% y-o-y to CNY104.4 trillion, while bank liabilities rose 16.0% y-o-y to CNY97.8 trillion in August.
*Government bond yields fell for all tenors last week in the PRC and Indonesia and for most tenors in Thailand and Viet Nam. Yields rose for all tenors in Hong Kong, China; Republic of Korea; and Singapore, and for most tenors in Malaysia. Yield movements were mixed in the Philippines. Yield spreads between 2- and 10-year tenors widened in the PRC; Hong Kong, China; Republic of Korea; and Singapore, while spreads narrowed in most other emerging Asian markets.
*Finally, some of the more interesting economic data due this week include consumer price inflation for Republic of Korea and the Philippines; export growth and trade balance for Malaysia; money supply for Japan and Indonesia; and foreign reserves for Hong Kong, China and the Philippines.
Sony's movie studio is in final talks to acquire the movie rights to the highly anticipated authorized biography of Apple co-founder Steve Jobs by Walter Isaacson.
According to a person familiar with the matter, the studio is negotiating to pay about $1 million for the rights to the project.
The person declined to be identified because the deal has not been finalized.
Sony was also behind the Oscar-winning biopic "The Social Network," about Facebook founder Mark Zuckerberg, and "This Is It," a documentary made of concert rehearsal footage of pop star Michael Jackson.
The news was earlier reported by Hollywood blog Deadline.com.
After Jobs' death on Wednesday, publisher Simon & Schuster pushed up the release date on Isaacson's "Steve Jobs" by a month to Oct. 24.
Large numbers of pre-orders of the digital e-book for $16.99 pushed the title to No. 1 on Apple's iTunes store and No. 2 on Amazon.com. Pre-orders of the hard cover copy, for $17.88, put the book at No. 1 on Amazon.
Last week Chitra Ahanthem ran out of sugar. But after visiting several shops around Imphal she realised there was no sugar available in the market. Most of her neighbours had stocked up. As the Sadar Hills District Committee's economic blockade enters its 61st day today, Ahanthem is just one of the thousands of residents in the Manipuri capital who are making major lifestyle changes.
"And I don't even belong to the economically weaker sections who have been hit the hardest by this blockade. This isn't the first time there has been a blockade in Manipur, it is, however, the longest. I fear it won't be the last either,"says Ahanthem who hasn't taken her car out for days as she can no longer afford the petrol.
Petrol costs Rs 140 per litre during the day and is sold at Rs 200 in the night. Apart from the petrol pumps, little shacks tucked into corners of overcongested markets and stretches of roads surreptitiously sell petrol. It's the same with gas cylinders —being sold at Rs 1,000 at the beginning of the month, the going rate for one cylinder is now Rs 2,000. There is no butter, no milk and all other commodities are being sold at prices marked up anywhere between 10-20 per cent. Rice, despite being locally grown, is being sold at anything between Rs 40-70 a kg.
Despite crippling life in Imphal, the economic blockade on National Highway 39 (Imphal-Dimapur) shows no sign of resolution. Instead, residents of Jiribam are now demanding a separate district and have put smaller pickets up on NH 37 (Imphal-Jiribam) tightening the noose around the valley. The police recently stepped up security on the highways and has now deployed commandos in the affected areas even as counter-economic blockades in Naga-dominated areas threaten to take off.
"The issue is complex which is why its taking the government so long to take a stand. The Kuki tribe which is the dominant tribe in the Sadar hills is demanding a separate district for administrative reasons. They feel that they have been neglected and for even something as simple as a birth or death certificate they have to travel 100 km to the district headquarters in Senapati district which is a Naga-dominated area. The Naga tribe in the state is opposing the move to create a separate Sadar Hills district as they feel that this land belongs to them. So whichever stand the government takes, it will be displeasing one tribe or the other,"says a senior government official.
But the government cannot ignore the "legitimate Kuki demand," says Ngamkhohao Haokip, president of the Sadar Hills District Demand Committee and the man behind the economic blockade in the state.
This could be the mother of all mining scams, and this time it's in Odisha, a State which accounts for over 30 percent of India's iron ore deposits.
A CNN-IBN investigation has exposed a mining scam estimated at Rs 3 lakh crore, a scale that dwarfs the Bellary mining scam in Karnataka and the Goa mining scam exposed by Firstpost recently.
The investigation by Jajati Karan has established that illegal mining flourishes in Odisha's Keonhjar distric. Five companies have been charge-sheeted for illegal mining by the Odisha government's vigilance department. Illegal mining operations in three companies – Serajuddin Mines, Rungta Mines and Indrani Patnaik Mines – were caught on camera by the CNN-IBN team.
The Odisha mining scam is estimated at Rs 3 lakh crore. Raman Kirpal/ Firstpost
These were among the 243 mines where work had been suspended after an uproar in the Odisha Assembly in 2009.
Yet, today, the illegal mining continues.
At Balda, at the Serajuddin mines, truckloads of iron ore could be seen emerging from the main gates, all of it mined illegally. Even at night, the CNN-IBN team found trucks leaving loaded with the illegally mined iron ore.
At Unchabali, the CNN-IBN team trekked past pillars marking the Indrani Patnaik Mines to the top of a hill where it caught images of illegal mining at a grand scale.
At Jajang, at the Rungta Mines, the team sneaked a camera in for a few minutes to uncover even more illegal mining.
According to the State Vigilance chargesheet, the illegal iron ore mining at these three mines alone has caused the loss of a staggering Rs 2,352 crore to the state exchequer.
Anup Patnaik, Director, Vigilance, says: "Show cause notices have been served on the owners of all the mines that we are investigating. We have also seized their materials, and told them that mining cannot continue till our case is over."
Independent estimates have valued the illegally mined iron ore at Rs 3 lakh crore. Each tonne of iron ore fetches the mining company nearly Rs 8,000, while the State government gets a measly royalty of Rs 78 per tonne.
The Mines Department of the Odisha government, however, defends the charge-sheeted mine owners.
Says Manoj Ahuja, Secretary, Steel and mines: "The royalty has been paid for, so it's not illegal in that sense. There are no accounts that somebody has done illegal mining." At worst, it is a violation of a technical norm, he adds.
Last year, the Indian Bureau of Mines issued a show-cause notice to these mines, but took no further action. Till date, 13 minor officials have been arrested, but none of the senior functionaries have been touched.
In April this year, the Odisha High Court finished its hearing over the demand for a CBI inquiry into the mining scam, but reserved its orders. Activists believe that only an independent and impartial inquiry can reveal the extent of the alleged nexus between mine owners, politicians and bureaucrats
RTI activist Biswajit Mohanty, who has filed a PIL calling for a CBI inquiry into the illegal mining in Odisha, points out that the mining scam was exposed accidentally in 2009, when a ruling BJD MLA asked an innocuous question to the Assembly. The reply exposed the mining scam. (Watch Mohanty's interview to CNN-IBN here.)
The government was then forced to order an inquiry, and the vigilance department conducted an enquiry. But Mohanty argues that the theVigilance Department is ill-equipped and incompetent to investigate a scam of this magnitude.
"It doesn't have jurisdiction, it cannot investigate beyond the State's border", which he says is critical because even the Central Ministry is involved."They have to be investigated, and it cannot be done by the Vigilance Department." In addition, he points out, the case has international ramifications because the ore has been exported to other countries, principally China.
"All of us have challenged this enquiry order on the simple ground that it lacks jurisdiction, it lacks competence, it lacks adequate manpower and infrastructure," Mohanty adds. "We believe it is a cover-up by the State government to protect the miners and allow illegal mining to continue."
The scam also highlights the issue of "intergenerational equity" which the Supreme Court has highlighted in an earlier vedict, Mohanty noted.
"The State and the Centre have to decide how much of mining can be permitted within, say, 25 years or 50 years or 100 years… At the rate at which leases have been given, we don't expect resources to last beyond 25 years. This kind of a policy cannot be permitted," reasons Mohanty.
