Sun, Jul 04, 2010 page11

• Business Quick Take

  • AGENCIES
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  ■CURRENCY

  Yuan revaluation unlikely

  China’s deputy central bank governor Hu Xiaolian (胡曉煉) said big moves in major currencies hurt the global economy, signaling the government is unlikely to give into pressure from the US and EU over the strength of the yuan. A nation’s current account balance can be used as a “window” to watch if its exchange rate is at an equilibrium level, People’s Bank of China deputy governor Hu said at a financial conference in Shanghai. China’s current account surplus has been shrinking. The level of an exchange rate is based on market demand and supply, she said. It’s good to have currencies with a certain amount of flexibility, but big fluctuations in major currencies are bad, she said.

  ■FINANCE

  Bank of China to raise funds

  Bank of China Ltd (中國銀行) announced on Friday it will raise up to 60 billion yuan ($8.9 billion) in a new effort by a major Chinese state-owned lender to replenish capital following last year’s lending boom. Bank of China shareholders can buy 1.1 shares for each share they own “to improve the capital adequacy ratio of the bank,” the bank said in a statement. It said the new shares will be issued on exchanges in Hong Kong and Shanghai. Bank of China said its plan requires shareholder approval, but such permission is largely a formality because some 67.5 percent of its shares are owned by Central Huijin Investment Co (中央匯金), an arm of Beijing’s sovereign wealth fund.

  ■INTEREST RATES

  India raises interest rates

  India’s central bank on Friday hiked two key short-term interest rates by 25 basis points in a bid to tame double-digit inflation. The Reserve Bank of India said the decision was taken before its scheduled July 27 meeting “to contain inflation and anchor inflationary expectations going forward.” Governor D. Subbarao said the repo — the lending rate to commercial banks — has risen to to 5.50 percent with immediate effect, while the reverse repo — the rate the central bank pays to banks for deposits — is now 4.0 percent.

  ■TRADE

  Taiwan, Guangxi linking up

  There is great potential for Taiwan and China’s Guangxi region to cooperate in cultural creativity, Taiwan External Trade Development Council chairman Wang Chih-kang (王志剛) said on Friday. “Guangxi and Taiwan can cooperate in cultural creativity to develop a vast market,” Wang said at a Guangxi-Taiwan cooperation forum on business and culture. Wang suggested that both sides can strengthen cooperation in areas including LEDs, agriculture, automobile parts and components, automobile electronics and cultural creativity.

  ■AUTOMOBILES

  General Motors to file IPO

  General Motors Co plans to file its nearly US$20 billion initial public offering (IPO) in the middle of next month, a source familiar with the situation said on Friday, later than some expected as bankers work to help sort out the automaker’s finances post-bankruptcy. General Motors is also in talks with banks for a revolving credit line worth US$5 billion, sources said. Bank of America Corp, Citigroup Inc, JPMorgan Chase & Co and Morgan Stanley have already agreed to provide US$500 million of credit each, with other banks still to be chosen, a source said. The credit line is expected to be finalized in the next two weeks, about a month before the automaker files for its IPO, a source said.
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