Chinese Premier Wen Jiabao during a press conference after the closing meeting of the National People's Congress at the Great Hall of the People, Beijing, Sunday, March 14, 2010. Photo: Xinhua

Food group Aryzta today reported revenues of €800.9m for the six months to the end of January, down 7.4% from the same time the previous year. Operating profits for the half-year were flat at €106.5m, with underlying net profit growth of 1.1% to €73.8m.

Commenting on the results of company that is the result of a 2008 merger between Ireland's IAWS and Swiss bakery group Hiestand, Chief Executive Officer Owen Killian said: “The global economic recovery has yet to reach consumers who continue to adjust their patterns of spending in response to tough economic conditions. Credit availability remains difficult for many customers who need to maintain and develop their consumer-facing investment. Those customers who have adapted to the conditions and who offer a satisfying consumer experience by using ‘freshly baked’ throughout the dayparts demonstrate the resilience of the business."

Davy's John O'Reilly commented: "The trading environment for the group remains challenging. The statement notes that the global economic recovery has yet to reach consumers, who continued to adjust their patterns of spending in response to tough economic conditions.

In its food division (Origin Enterprises reported last week), underlying revenue growth declined year-on-year (yoy) by 10.1% in Europe and 2.7% in North America and rose by 3.4% in developing markets. Overall, underlying revenue growth in the food division fell by 7.6% in H1; at the Q1 stage, the decline was 8.4%. These declines are thought to be volume related for the most part.

As the year progresses, the comps will become less challenging. This means that the rate of decline in revenue for H2 should slow down markedly.

Group operating profit in the food group fell by 1.1%. In Europe, the decline was 5.1%; in North America, operating profit rose by 2.8%. Operating margin in food overall rose by 70bps yoy to 12.2%, continuing the margin progression seen over the past year. Cost savings continue to drive margin.

Continuing powerful cash generation was exhibited by the food division in the period. Operating cash flow was €91.4m. Finances are strong, with net debt to EBITDA of 1.7x. "

Results detail

Renminbi/yuan: Chinese Premier Wen Jiabao said in Beijing on Sunday that a stable exchange rate of the renminbi (RMB), or yuan, will facilitate the recovery of the world economy from the global financial crisis.

He made the remarks at a press conference after the closing of the annual National People's Congress meeting.

Wen said since China began its currency reform to unpeg the yuan against the US dollar in July 2005, the yuan has appreciated 21% against the US dollar, or 16% in real terms.

"We did not depreciate the RMB from July 2008 to February 2009 when the global economy was in extreme trouble, but it appreciated in real terms by 14.5%," Wen told hundreds of domestic and foreign journalists.

Wen said during this period, China's exports fell by 16% but imports only dropped 11% and its trade surplus decreased US$102 billion.

China's currency has been fixed to the US dollar since July 2008 and changes in China's currency against other currencies since then have been as a result of movements of the dollar.

The premier insisted that the currency is not undervalued. “We oppose all countries engaging in mutual finger-pointing or taking strong measures to force other nations to appreciate their currencies,” he said and added that he understood that countries wanted to increase exports but said they should not resort to what he termed as protectionism.

“What I don’t understand is depreciating one’s own currency, and attempting to pressure others to appreciate, for the purpose of increasing exports. In my view, that is protectionism,” Wen said.

SEE: Finfacts Dec 2009 article: Obama may have to play the Nixon card with China in 2011

While Chinese premier Wen Jiabao has rebuffed Washington's calls to revalue then yen, Eric Fishwick, head of economic research at CLSA, believes China will give in and appreciate the yuan eventually but the move will be more cosmetic than economic. He shares his thoughts with CNBC's Maura Fogarty & Oriel Morrison:

February's US retail sales figures suggest consumers might be starting to spend again: Davy chief economist Rossa White commented: "The 0.3% month-on-month gain in US retail sales in February indicates that the consumer might be starting to spend again. The increase follows a 0.1% rise in January and takes the year-on-year (yoy) increase to almost 4%. If this level is maintained in March, then Q1 consumer spending could be up over 4% yoy versus the 1.7% increase recorded in Q4 of 2009.

Excluding autos, sales numbers were 0.8% higher up from the 0.5% increase recorded in January. This is despite very poor weather conditions which were expected to have dampened consumers' spending enthusiasm.

Within the data, sales of building materials increased by 0.5% while clothing sales were 0.6% higher. One of the biggest areas was consumer electronics, which were 3.7% higher. This is significant in that this is really consumer discretionary spending and may illustrate a growing confidence.

While this is a positive signal, continuing deleveraging of consumer balance sheets combined with stubbornly high unemployment and a sluggish housing market may detract from this renewed optimism."

No major decisions on debt aid are expected from fin min meetings in Brussels, says Par Magnusson, senior analyst at Danske Bank. He discusses this and the differences between Europe's troubled economies and those in the U.S. & U.K with CNBC's Anna Edwards & Maura Fogarty.

Dodd Financial Reforms Won't Fix Banks;Prof. Peter Morici of the University of Maryland commented on Sunday: "America’s banks are as vulnerable today as before the credit crisis, and reforms offered by Senate Finance Committee Chairman Christopher Dodd won’t fix things.

Prior to the crisis, Americans spent vastly more than they earned, borrowing against overvalued homes through creative mortgages. Banks offered adjustable rate mortgages and other products that unrealistically assumed homeowners could shoulder much bigger monthly payments after five years or refinance homes at higher values. Often incomes and home values were not verified, and similar games abounded on credit cards.

Many borrowers knew they faced calamity, but cultivated delusions that their paychecks would miraculously increase and housing prices would perpetually rise to finance lifestyles built on fantasies more than facts.

Bankers played, because they often sold dodgy loans to big Wall Street financial houses who bundled those into bonds called collateralized debt obligations (CDOs) sold to unwitting investors. The latter were persuaded by the availability of credit default swaps—insurance contracts that promised to pay if mortgages failed.

When the housing bubble burst, we learned financial firms wrote the swaps with woefully inadequate collateral to cover obligations.

Lehman Brothers, Citigroup and many other banks were caught stuck with CDOs they either failed to peddle or purchased. Treasury Secretary Henry Paulson knew large banks held CDOs in special Structured Investment Vehicles (SIVs) but saw no threat.

Dodd proposes to fix all this with a new consumer protection agency—to keep Americans from borrowing too much. However, the Federal Reserve, FDIC and other regulators have already put screws to the banks, and loans are now much tougher to get.

The history of Congress meddling on behalf of consumers is to force banks to make imprudent loans to unqualified consumers and to charge lower fees than the resulting risks warrant.

Simply, at President Obama’s behest, Dodd is proposing a new agency that could undo good reforms already underway.

To keep banks, big financial houses and pesky hedge funds from mischief, Dodd also proposes a Systemic Risk Council of the chiefs of federal regulatory agencies to head off future debacles, but before the recent crisis Secretary Paulson and other regulators knew about the CDOs and SIVs and saw no danger. This Council will accomplish little.

Further, to cope with the next collapse of a “too big to fail” financial house, Dodd would tax big financial firms to create a $50 billion bailout fund, and federal regulators would be empowered to liquidate the firm using those funds to grease the process.

No one has done a reality check on these ideas.

Federal regulators already have that resolution power regarding Citigroup and AIG, and their bailouts required much more than $50 billion to finance. Simply, Federal regulators have found it impossible in a severe environment of deleveraging to sell off the good parts of those companies quickly to get back the taxpayers’ money. It’s fantasy to believe such authority would have accomplished a different outcome at Lehman Brothers.

Better discipline is required for banks and big financial houses, such as adequate collateral under swaps and better discipline on portfolio diversification.

Commercial banking—taking deposits and making loans—should once again be separated from other financial activities such as creating, selling and holding securities.

These would no doubt face fierce opposition from Wall Street, and the Treasury is disinclined to truly challenge J.P. Morgan and others.

Sadly, the recent crisis is sowing the seeds of an ever greater financial debacle. The Obama Administration and Congress are proving simply too inadequate to the task."

The MSCI Asia Pacific Index slipped 0.4% Monday on fears China will take further monetary measures to slow down the economy.

The Nikkei 225 added 0.01%; the Shanghai Composite dipped 1.21%; Australia’s S&P/ASX 200 Index lost 0.71% and India's Sensex Index gained 0.02%.

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Finfacts Reports

Global economic recovery remains strong in 2010 but the risks are mounting for 2011

Irish Economy: IBEC says credibility of corrective action must go beyond the public sector finances

Ireland and leadership at a time of crisis

Eurozone finance ministers meet to discuss Greece; French Economy Minister urges Germany to cut trade surplus and boost demand

London and New York lead in Global Financial Centres report followed by Hong Kong and Singapore; Dublin gets ranking of 31 in 75-city sample

Eurozone industrial production surged in January; December was revised up; Chemical sector boosted Irish production by 15.3% in month

In Europe, the Dow Jones Stoxx 600 has dipped 0.21% Monday.

The ISEQ has slid 0.39% in Dublin.

CRH is down 1.41%; food group Aryzta has risen 3.02%

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