EUROZONE
Japan buys fewer bonds
Japan bought 10 percent of 3 billion euros (US$4.13 billion) in bonds issued on Monday by the eurozone’s rescue fund, a government official said yesterday, less than its previous investments. Japan’s purchase came to 300 million euros, the official at the Ministry of Finance’s international affairs bureau said. Tokyo had bought 20 percent of previous bond sales issued by the European Financial Stability Facility (EFSF), the rescue fund. “We took into account our euro liquidity [in Japan’s special account of foreign currencies], terms on issuance and the market environment,” the official said of the fall in the Japanese purchasing share. Japan has purchased a total of 2.975 billion euros of EFSF bonds so far this year.
BANKING
Societe Generale profits dip
French bank Societe Generale says its profits dropped 30 percent in the third quarter because it set aside money for losses on Greek bonds as negotiated in a European deal to help Athens dig out of its debt hole. The agreement asks banks that hold Greek debt to take a loss of 50 percent. Societe Generale, like its peer BNP Paribas, factored in a writedown of 60 percent into its third-quarter earnings as they try to reassure investors they can weather the storm. As a result, the bank said yesterday that it booked a net profit of 622 million euros in the July-September period, down 30 percent from last year.
BANKING
Lloyds may miss targets
Lloyds Banking Group PLC, the UK’s largest mortgage provider, said it may miss financial targets set five months ago as it reported a 21 percent decline in pretax profit. Pretax profit fell to £644 million (US$1.03 billion) from £820 million for the second quarter, the lender said in a statement yesterday. “The attainment of some of our medium-term financial targets, principally with regard to income-related metrics, may be delayed to beyond 2014,” it said in the statement. Because of more challenging economic conditions, “We are reassessing our assumptions,” it said.
AIRLINES
Restructuring boosts JAL
Japan Airlines (JAL) said yesterday its first-half net profit reached US$1.25 billion, thanks to aggressive restructuring efforts after completing its bankruptcy proceedings. JAL posted a net profit of ¥97.4 billion (US$1.25 billion) for the six months to September, with operating profit of ¥106.1 billion on sales totaling ¥599.8 billion. For the financial year to March next year, JAL expects net profit of ¥120 billion and an operating profit of ¥140 billion on sales of ¥1.15 trillion. However, JAL said its business outlook for the third and fourth quarters remained “unclear” because of the Greek and eurozone debt crisis, flooding in Thailand and volatile foreign exchange.
HOSPITALITY
InterContinental’s profits rise
InterContinental Hotels Group PLC, owner of the Holiday Inn chain, said it is confident about its outlook after third-quarter earnings rose, led by business at its US and Chinese lodgings. “The economic environment continues to be uncertain, but we remain confident in our future due to our resilient business model, robust balance sheet and powerful brand portfolio,” CEO Richard Solomons said in a statement yesterday. Operating profit in the third-quarter rose 33 percent to US$153 million, while third-quarter sales rose 11 percent to US$467 million, the company said.
DIVIDED VIEWS: Although the Fed agreed on holding rates steady, some officials see no rate cuts for this year, while 10 policymakers foresee two or more cuts There are a lot of unknowns about the outlook for the economy and interest rates, but US Federal Reserve Chair Jerome Powell signaled at least one thing seems certain: Higher prices are coming. Fed policymakers voted unanimously to hold interest rates steady at a range of 4.25 percent to 4.50 percent for a fourth straight meeting on Wednesday, as they await clarity on whether tariffs would leave a one-time or more lasting mark on inflation. Powell said it is still unclear how much of the bill would fall on the shoulders of consumers, but he expects to learn more about tariffs
NOT JUSTIFIED: The bank’s governor said there would only be a rate cut if inflation falls below 1.5% and economic conditions deteriorate, which have not been detected The central bank yesterday kept its key interest rates unchanged for a fifth consecutive quarter, aligning with market expectations, while slightly lowering its inflation outlook amid signs of cooling price pressures. The move came after the US Federal Reserve held rates steady overnight, despite pressure from US President Donald Trump to cut borrowing costs. Central bank board members unanimously voted to maintain the discount rate at 2 percent, the secured loan rate at 2.375 percent and the overnight lending rate at 4.25 percent. “We consider the policy decision appropriate, although it suggests tightening leaning after factoring in slackening inflation and stable GDP growth,”
Greek tourism student Katerina quit within a month of starting work at a five-star hotel in Halkidiki, one of the country’s top destinations, because she said conditions were so dire. Beyond the bad pay, the 22-year-old said that her working and living conditions were “miserable and unacceptable.” Millions holiday in Greece every year, but its vital tourism industry is finding it harder and harder to recruit Greeks to look after them. “I was asked to work in any department of the hotel where there was a need, from service to cleaning,” said Katerina, a tourism and marketing student, who would
i Gasoline and diesel prices at fuel stations are this week to rise NT$0.1 per liter, as tensions in the Middle East pushed crude oil prices higher last week, CPC Corp, Taiwan (台灣中油) and Formosa Petrochemical Corp (台塑石化) said yesterday. International crude oil prices last week rose for the third consecutive week due to an escalating conflict between Israel and Iran, as the market is concerned that the situation in the Middle East might affect crude oil supply, CPC and Formosa said in separate statements. Front-month Brent crude oil futures — the international oil benchmark — rose 3.75 percent to settle at US$77.01