Prices down for 23rd month
Consumer prices last month went south for the 23rd straight month as deflation kept its hold on the world’s No. 3 economy, the government said yesterday. However, the pace of decline slowed for the fourth consecutive month because of the recent upward march of food and fuel prices worldwide. The core consumer price index (CPI), which excludes fresh food, slipped 0.2 percent from a year earlier, the government said. The result is a tad better than Kyodo news agency’s average market forecast of a 0.3 percent fall. The preliminary core CPI for the Tokyo area — considered an indicator of broader price trends for the country — fell 0.4 percent.
Russia raises key rate
The Russian central bank yesterday said it was raising its main refinancing rate 0.25 basis points to 8 percent, its first hike in interest rates since the economic crisis in 2008. The Bank of Russia said in a statement that the rate hike, effective from Monday, was needed given expectations of higher domestic inflation and soaring global oil prices. “The decision was taken due to continued high inflation expectations and to create the conditions for the inflow of capital into Russia against the background of high oil prices,” it said in a statement.
AIA net profit surges 50%
Asian insurance giant AIA yesterday said its net profit last year soared more than 50 percent to US$2.7 billion, several months after the firm raised US$20.5 billion in a massive Hong Kong share sale. New business growth, along with currency and investment gains, propelled the pan-Asian insurer’s results for the fiscal year ended Nov. 30 to 54 percent above its US$1.8 billion net profit in 2009, the company said. On Thursday, parent American International Group reported a net profit of US$7.8 billion last year, largely aided by asset sales, including the AIA offering, after reporting an almost US$11 billion net loss in 2009.
NEC, Tianma team up
Japanese electronics maker NEC yesterday said it would form an LCD joint venture with China’s Tianma Micro-Electronics (天馬微電子). It will sell a 70 percent stake in its NEC LCD Technologies to the Avic International Group (中國航空工業國際控股) that owns LCD panel maker Tianma. The NEC subsidiary, based in Kawasaki near Tokyo, will be renamed and launched as a tie-up in July. NEC later yesterday revised down its earnings forecast for fiscal 2010, which ends in March, saying it now expects no net income as opposed to the ￥15 billion (US$183 million) expected earlier.
Margins under pressure
Deutsche Telekom expects stagnant earnings this year as it joined the league of major European telecoms operators struggling to defend their dominance on their home turf. “We have battled through the headwind caused by the economic environment, special taxes in several countries and stiff competition,” chief executive Rene Obermann said in a statement yesterday. He echoed France Telecom’s chief financial officer Gervais Pellissier, who said on Thursday that competition in France was intensifying and that margins were under pressure. Smaller peer Telecom Italia, whose embattled mobile unit is closely watched, also said yesterday that core earnings and sales would likely stagnate, while Spanish rival Telefonica forecast a 2 percent gain in revenue this year.