theSun | WEDNESDAY APRIL 15 2009 15

business

World stocks rally on hopes for global banking sector

LONDON: World stock markets
mostly rallied yesterday after up-
beat results from Goldman Sachs
sparked hope the banking sector
had turned the corner in the global
financial crisis, dealers said.
Goldman had posted on
Monday a first-quarter net profit
of US$1.81 billion (RM6.55 bil-
lion), with earnings per share of
US$3.39. That was sharply higher
than US$1.33 per share forecast
by most analysts.
Equities also won ground yes-
terday after Goldman launched
plans to repay its US govern-
ment rescue aid of US$10 billion
(RM36.2 billion) with a US$5 billion
(RM1.81 billion) share issue plus
cash from additional resources.
The Goldman news was ap-
plauded by investors who are
awaiting the latest results from
banking firms reeling from the
ongoing global financial and eco-
nomic crisis that erupted in 2007.
“The figures, (which) follow
similarly upbeat soundings from
Wells Fargo that it expects to
make a profit in the first quarter,
have bolstered sentiment for
financial stocks,” said Calyon
analyst Stuart Bennett.
“Citigroup and JP Morgan are
slated to release their earnings
figures later in the week and a
positive print from them is likely
to allow a further falling off of
risk aversion as the market starts
to consider that he worst really
might be over for the banking sec-
tor.”
In European markets yesterday,
Frankfurt fizzed 1.28% higher,
London rose 0.34% and Paris won
0.83%. All three markets were
shut on Friday and Monday for
the Easter holiday weekend.
In Asia, Hongkong share prices
leapt 4.55%, driven also by gains in
banking giant HSBC and Chinese
stocks, dealers said. – AFP
briefs

Singapore recession likely Qantas says ‘no choice’

as it cuts jobs
SYDNEY: Australia’s Qantas announced more job
cuts, slashed its profit forecast by more than half and
deferred new plane orders yesterday, saying it had no
choice if it hoped to weather the global downturn.

deeper than expected

SINGAPORE: Singapore’s worst
economic crisis since independence
is predicted to be even worse than
expected, with output now forecast to
shrink by up to 9% this year, official
data showed yesterday.
The Ministry of Trade and Indus-
try (MTI) said gross domestic product
(GDP) would fall by 6-9% this year, a
stunning downgrade from the previ-
ous official estimate of a decline of
2-5%.
“MTI’s earlier forecast had fac-
tored in the likelihood of a weak first
quarter, but the advance estimates
indicate that actual GDP growth will
undershoot earlier expectations by a
significant margin,” it said.
Previously, Singapore’s worst per-
formance since it became a republic in
1965 was in 2001, when the economy
contracted 2.4%.
The revised 2009 outlook was the
fourth downgrade since November, a
reflection of the severity of the reces-
sion confronting the trade-dependent
city state as electronics and other
manufactured exports continue to
plunge.
“It’s quite shocking,” Leong Wai
Ho, an economist with Barclays Capi-
tal, said of the government’s revised
outlook.
“It’s a reflection of their assump-
tion that things could get a lot worse
in external demand which we don’t
believe is the case,” said Leong, who
is still maintaining a forecast of a 4%
contraction for this year.
If Singapore’s GDP shrinks by 9%
this year, it will become the worst-
performing Asian economy this year,
economists said.
But Standard Chartered bank said
forecasts of a worse than 10% contrac-
tion this year “seem overly pessimistic
to us”.
The country’s influential found-
ing father Lee Kuan Yew last month
warned that the economy may shrink
by 10% if exports continue to fall
sharply.
Despite the latest official projec-
tion, the Straits Times Index of share
prices closed 1.08% higher at 1,897.02
points yesterday
The revised outlook came as fresh
data showed GDP shrank 11.5% in
the first quarter from a year ago, far
worse than the 4.2% decline recorded
in the preceding three months.
The fall is the worst ever for a
single quarter since records began
in 1976. Singapore’s previous record
quarterly contraction was in 2001
when GDP shrank 6.4% in the third
quarter.
On a seasonally adjusted annual-
ised basis, GDP declined 19.7% in the
first quarter this year, also a record,
compared with 16.4% in the previous
quarter, the ministry said.
The estimate is based on preliminary
data computed mainly from the first
two months of 2009 and a fuller picture
is likely to emerge next month.
Almost every sector of Singapore’s
economy was hit in the first quarter
with manufacturing especially af-
fected by the fall-off in exports, the
ministry said.
Manufacturing shrank 29% year
on year, pulled down sharply by de-
clines in crucial exports of electronics,
chemicals and biomedical products.
“With most of Singapore’s key
trading partners still in recession, the
manufacturing sector will continue to
remain weak for the rest of the year,”
the ministry said.
The revised GDP forecast was
made after key exports, known as
non-oil domestic exports (NODX),
fell by an estimated 17% in March to
S$11.88 billion (RM28.51 billion) from
a year ago.
The Monetary Authority of Sin-
gapore, the de facto central bank,
announced yesterday in a separate
statement it was adopting an easier
policy stance, which essentially allows
the local currency to depreciate.
The Singapore dollar is currently
hovering at around 1.50 to the US
dollar. – AFP
The flag carrier said it would get rid of up to 1,750
jobs and now expected full-year profits of A$100-200
million (RM240-480 million) – sharply down from the
A$500 million (RM1.2 billion) it predicted in November.
“The size of the cuts really surprised the market,
although the fact that there was a profit downgrade
Chelsea did not,” said Julia Lee, an analyst with Bell Direct, as
chairman shares in the airline plunged more than 8%.
“People did not expect the cuts to be so deep,” she
Bucks told Sky Business. It was Qantas’ third round of job cuts
trend by in less than a year. – AFP
ruling out
Mourinho Michelin to shut US tyre factory,
pg 31 cut 1,000 jobs
NEW YORK: The US subsidiary of French tyre
maker Michelin said Monday it will shut a US plant
in Alabama, where it employs 1,000 people, due to
an “unprecedented” slump in demand.
Michelin North America said the closure of the
plant in Opelika, Alabama, by Oct 31 was part of
a restructuring plan for its manufacturing opera-
tions “in response to the unprecedented drop in
market demand”. – AFP
China seeks to ease
South Korean concerns
BEIJING: China yesterday sought to ease concern in
South Korea about China’s rise as a global economic
power, saying its development was an opportunity
rather than a threat.
South Korea said on Monday the ascent of its
powerful neighbour could harm its own economic
growth and intensify competition, especially in export
markets and energy diplomacy.
But Chinese Foreign Ministry spokeswoman Jiang
Yu deflected those worries. “China and South Korea
are friendly neighbours, bilateral cooperation is mutu-
ally beneficial. We seek to have practical cooperation
in every field with South Korea on the basis of equality
and to develop together,” she said. – Reuters

Berjaya Hotel & Resorts opts

for flexi-pricing strategy
DUBAI: Berjaya Hotel and Resorts has opted for
flexibility in rates and pricing structure to ride out
the current economic downturn, said its regional
sales and marketing director Peggy Tan.
She said the hotel group is also focusing more
on domestic as well as regional markets, such as
the Middle East, India, China and Southeast Asia,
to boost business.
“Flexibility is the keyword for us. You can hold
your rates but if people are not occupying your
rooms, then there’s no point,” she told Bernama.
Tan said recent travel fairs held in Southeast
Asia showed that Malaysians still travelled and
that people would prefer to go to nearer destina-
tions, opting for more affordable packages.
According to her, travellers who chose to stay
in four-or five-star hotels would receive better
value for money because most of the hotels and
agents are currently offering “very good deals”
in the market.
She predicted that soft bookings would remain
perhaps for the next six to eight months, with a
tendency for last-minute bookings. “People don’t
book so early now because in the current situa-
tion they’re adopting the wait-and-see attitude,
what with low-cost carriers offering cheaper
tickets and hotels giving good deals. There’s a
lot of value-adding in the market,” she said.
Tan said as far as the Middle East is concerned,
the hotel group still considered it an important
market, especially countries like Saudi Arabia,
United Arab Emirates and Iran.
“We did a roadshow last year with Tourism
Malaysia which had actually benefited us in
terms of publicity in this market. We have to
increase our presence, be more aggressive in
working with key players in this region, including
agents and airlines,” she said.
Meanwhile, HolidayCity.com, a leading online
hotel reservation service provider specialising
in discounted room rates, announced yesterday
it has entered into a partnership with the hotel
group to provide its customers access to com-
petitive rates and a variety of accommodation
options in 15 Berjaya Properties in Malaysia, Asia
Pacific and Europe.
Lee Lai Huat, CEO of HolidayCity.com, re-
marked, “It’s an amazing opportunity indeed to
be able to work together with Berjaya Hotels
& Resorts (www.berjayahotels-resorts.com) in
offering our guests competitive rates and special
promotions at their properties”.
“Through this partnership, they can look
forward to extending their brand presence and
inventory to more target audiences online.”
Berjaya Hotels & Resorts’ director of e-Busi-
ness and Yield Management Chris Cheong said,
“HolidayCity.com has a wide distribution reach
and would fit well into Berjaya Hotels & Resorts’
current online marketing strategies”.
“Recognising this potential, we decided to
work together with HolidayCity.com to attract
more high-yield customers to our properties.
“Based on our current online marketing strate-
gies to create a higher net presence, HolidayCity.
com will be part of a larger internet marketing
strategy plan to reach an even wider selection
of customers worldwide.”