China: China today reported a $7.3bn trade deficit - - the biggest in seven years.
Exports rose 2.4% in February from a year before, the lowest since 2009 and imports jumped 19.4%, according to official data released today.
The Lunar New Year holidays fell during the month.
The European Union remained China's largest trade
partner in the period, with EU-China trade up 16.3% year on year to US$76.2bn
Origin Enterprises: The food and agri services group today reported tha profits
for the six months to the end of January rose by 3% to €613.3m. Operating
profits for the six months rose by 14% to €24m.
Goodbody's Liam Igoe commented -- "Origin Enterprises’ interim results were well ahead of our forecasts, which is captured in the fact that adjusted EPS (at 11.5c) was 28% higher than forecast of 8.9c. The better results reflect an improving background for farmers due to rising soft commodity prices.
The H1 performance combined with the announced acquisitions of UAP and Rigby Taylor means we will likely increase our full-year EPS forecast to around 41c. In the company’s core Agri-Services, which now represents 100% of the consolidated activities, operating profits increased by 61% to €12.6m, on the back of sales up 23% to €569m and margins that were 50bps higher at 2.2%.
The improved H1 results were due to increased volumes purchased by farmers (+8%), resulting from higher UK autumn plantings of winter wheat (especially beneficial for the Masstock’s crop protection products), favourable harvest and planting conditions and rising soft commodity prices. They also reflect, however, somewhat easier comps with last year, when lower pricing led to some deferral of input purchases (especially fertilisers) into H2, whereas the reverse in happening in FY11.
In Ireland, fertiliser sales were “satisfactory” in this slower period of the year, as were feed ingredients, though volumes were slightly lower due to good fodder conditions and higher prices - though margins improved. Origin has announced two significant acquisitions, which will further consolidate its leading farm advisory business in the UK with Masstock. UAP provides similar services to Masstock across the UK, though its 100 agronomists (Origin currently has 190), though its product range is somewhat less extensive than Masstock (esp. fertilisers and seed).
Rigby Taylor is a more niche player in agronomy services, by focusing on the UK leisure sector. We expect there should be good synergy potential with these deals. Combined EBIT of £7.4m will be mostly realised in FY11 due to the normal high seasonality of this sector and should, in its own right, add 3.5c to EPS."
Former Italian Prime Minister Romano Prodi speaks to Cheng Lei about the problems facing Europe as the economic divide within the region widens:
Bad news from Asia pushes down on stock prices: Davy economist, Conall Mac Coille, commented - -"Asian stock markets fell this morning on bad news from both the Chinese and Japanese economies. Japanese GDP growth in Q4 was revised down to a fall of 1.3%, from a decline of 1.1% in the previous release. This out-turn was slightly worse than the revision down to a 1.2% decline that the market had expected. Consumer spending in Japan fell by 0.8% in the fourth quarter, in part due to the end of a government subsidy in September on fuel efficient cars. This suggests that Japanese consumer spending may bounce back in Q1. And as in the other major economies, PMIs and industrial production data indicate that output should grow robustly in the first quarter.
Far more surprising was the news that the Chinese economy's trade balance was in deficit in February. The market had expected the trade surplus of $11.3bn in January to narrow to $4.9bn, so the news that there was a deficit of $7.3bn is very surprising. The Chinese trade deficit appears to be due to a collapse of exports. Year-on-year export growth was just 2.4% compared with the market's expectation for growth of 27.1%. This means that there must have been a sharp contraction of exports in February. Imports were also stronger than expected, at 32.6% compared to the market's expectation of 19.4%.
There has been little macroeconomic news to explain the decline in the Chinese trade deficit. Consumer spending and activity appears to have gained momentum in most of the developed economies in Q1. So, perhaps the impact of the Chinese New Year — which had a temporary impact on the size of Chinese trade balance in 2010 - had a larger negative effect on the trade balance this year than the market had expected.
Similarly, higher oil and commodity prices may have choked off demand. But the data suggest that Chinese export growth fell off a cliff in February, so these explanations are not particularly compelling. Data mis-measurement cannot be ruled out also. So the market will focus on data over the coming months to see if the decline in Chinese exports is predominately due to temporary factors. And if there really has been a sharp decline in Chinese exports we should see commensurate weakness in the US import data released later today."
Kit Juckes, global head of foreign exchange strategy at Societe Generale, expects the BoE to raise rates in May. He also assesses the upcoming changes to the MPC board:
The world's richest man remains Mexican teleco tycoon Carlos Slim Helu, who
retains the number 1 position in the Forbes rich list list for a second year.
His wealth jumped by $20.5bn to $74bn.
Ttransport prices in the fourth quarter of
2010 were up 23.2% on the fourth quarter of 2009. Compared with the third
quarter of 2010, the prices rose an average 5.1%. Although prices increased for
the sixth consecutive time - - compared with the previous quarter
- - in 2010 they were about 14% below the average level of 2008.
As had been speculated, the roles of a Finance Minister will effectively divvied up between two Ministers. Former Fine Gael Finance spokesperson Michael Noonan will hold the official title of Finance Minister, which will make him responsible for taxation and banking policy in particular, while he will also be charged with attending important EU finance ministers meetings and, one presumes, the key person in any discussions with the IMF, the EU and the ECB.
The second role within the Department of Finance will be held by Labour’s Brendan Howlin, who takes up a new post of Minister for Public Expenditure and Reform. One cannot underestimate the task that is facing this particular Minister either, given the need to reduce public expenditure through further cuts in numbers in the public service over the coming years.
This, of course, will involve having to deal with the powerful union lobby, which will create an interesting dynamic to say the least given the party’s links with unions. Suffice to say, it is the success of these two Ministers that will determine the path that the economy takes over the coming years. From the point of view of leadership, the decision taken at the first Cabinet meeting last night to cut the salaries of Ministers and the Taoiseach by 7% is something that should be commended.
The path that the country takes will also be very much determined by policy actions in Europe. In this regard, the new Taoiseach Enda Kenny will meet EU Commission President Barroso tonight ahead of an EU leaders’ meeting tomorrow. The real work starts now."
In New York Wednesday the Dow fell 1 point to 12,213.
The S&P 500 slid 0.14% and the Nasdaq slipped 0.51%.
The MSCI Asia Pacific Index of shares slumped 1.5% Thursday.
Japan's Nikkei 225 dipped 1.46%; China's Shanghai Composite fell 1.50%; Australia's S&P/ASX 200 Index slid 1.43% and the Bombay Stock Exchange's Sensex index declined 0.84% .
In Europe, the Dow Jones Stoxx 600 is down 0.48% in early trading Thursday.
The ISEQ has fallen 0.54% in Dublin.
CRH is down 1.42%; Elan is off 0.13% and Origin Enterprises is up 3.92%.
The euro is trading at $1.3821 and at £0.8569.
For live currency updates, check the right-hand column of the Finfacts home page.
The US dollar fell to $1.6038 per euro on Tuesday, July 15, 2008 - an-all time record.
The Baltic Dry Index, a measure of shipping costs for dry commodities, hit an all-time High of 11,771 on the 21st of May, 2008. From that time it reversed and on the 5th of December, 2008 it hit a low of 663 - - close to a 1986 low.
The BDI closed at 3,005 on Thursday, Dec 31st - - a rise of 289% in 2009. The index averaged 59% lower in 2009 than a year earlier.
On Thursday, July 15, 2010, the index fell for the 35th straight session, by 9 points, or 0.537%, to 1,700 points, Bloomberg report.
On Friday July16th, the BDI rose 20 points or 1.12% to 1,700 to break the 35-session losing streak.
On Wednesday this week, the BDI rose 48 points or 3.37% to 1,472.
The Financial Times reported
earlier in January, that Australia’s flooding and fears of ship oversupply has
pushed down a gauge of the cost of hiring ships to carry coal, iron ore and
other dry bulk by nearly half since October to the lowest level since the
aftermath of the financial crisis. The Baltic Dry index, the widely watched
measure of dry bulk charter rates, fell to 1,453, nearly half the 2,784 peak
reached on October 27, 2010.
margin between the US benchmark WTI (West Texas Intermediate) used on the New
York Mercantile Exchange and Brent is almost $11.
The spot price of an oz of gold is trading in New York at $1,426.00, down $2.90 from Wednesday's close.
Irish Financials: Standard Life talks about good start to year in Ireland business; Goodbody's Eamonn Hughes comments - - "Standard Life has FY10 results out this morning. It generally has limited enough commentary on its Irish business anyway given it is slotted into its International Division. Also, with IL&P having already reported its own FY10 results, the read-through is fairly minimal.
However, Standard Life does say that its “International businesses in Ireland and Hong Kong have had a strong start to trading in 2011”. For the record, we are forecasting flat new business sales for IL&P this year, with +6% in Retail diluted by -6% on the Corporate side. IL&P recently indicated that it is hoping for flat sales in its corporate business for the year and Retail up, so a net positive, so the commentary this morning from SL probably gives comfort - for the moment - that the market is closer to the IL&P trends, which are above our own targets."
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