Construction spurs growth
Building work in quake-damaged Christchurch helped drive New Zealand’s economy to its fastest rate of growth in more than six years, government agency Statistics New Zealand said yesterday. The economy grew 3.8 percent in the first quarter from the same quarter a year ago and 1 percent from the previous quarter, it said. The quarterly rise took annual growth for the year to March 31 to 3.3 percent, it said. The Reserve Bank of New Zealand predicts that economic growth would moderate next year.
Ireland still at risk: IMF
Ireland faces significant challenges as it begins a tentative economic recovery, the IMF said on Wednesday in its first review since Dublin exited an international bailout program in December last year. The IMF forecasts the Irish economy would grow 1.7 percent this year and increase 2.5 percent on average from next year. However, based on current growth and revenue forecasts, Dublin will still require further austerity to reduce the deficit to 3 percent by next year under EU rules. The IMF also warned that nonperforming loans at Irish banks, which stood at 27 percent at the end of last year, were hindering lending.
Housing crash spurs suits
Investors led by BlackRock and Pacific Investment Management are seeking to recoup about US$250 billion in losses since the US housing bubble burst from so-called trust banks, the Wall Street Journal reported on Wednesday. The two major investment firms filed suit in New York State Supreme Court against units of Deutsche Bank and US Bancorp for their roles as trustees overseeing the bonds for investors who bought the securities, the report said. Other banks sued include units of WellsFargo, Citigroup, HSBC Holdings and Bank of New York Mellon, which are said to have managed more than 2,000 bonds issued between 2004 and 2008.
Rolls-Royce plans buyback
Britain’s Rolls-Royce plans to launch a ￡1 billion (US$1.7 billion) share buyback, saying that with no major acquisitions on the horizon, it would return to investors the proceeds from a recent disposal. A ￡1 billion share buyback is equivalent to about 5 percent of Rolls-Royce’s current ￡19 billion market capitalization. The company, which yesterday said it was on track to meet guidance for this year and next, also said it would reduce group capital expenditure to 4 percent of underlying revenue over the next three to five years, from 4.9 percent at the end of last year.
China eyes contingencies
Major Chinese oil firms have prepared evacuation plans in case spreading violence in a key energy provider to the Asian giant threatens their operations, state media reported yesterday. China has more than 10,000 workers on a wide range of projects in the nation, Chinese Ministry of Foreign Affairs spokeswoman Hua Chunying (華春瑩) said on Wednesday, although most are in the south, far from the current fighting. The ministry has issued security warnings and guidance to firms operating in Iraq, Hua said, adding: “We don’t want to see that the situation will come to what it was like in Libya when we had to carry a large-scale evacuation” in 2011.