theSun | WEDNESDAY APRIL 29 2009  15

business

Stocks fall, yen gains on

US bank and flu worries
LONDON: World stocks and oil fell for
a second day yesterday and investors
took refuge in the yen as a report that
major US banks may need more capital
hit markets already dropping on fears of
a swine flu pandemic.
European stocks and US stock fu-
tures fell around 2% and the yen hit a
one-month high against the dollar after
the Wall Street Journal said US regula-
tors were pushing Bank of America and
Citigroup to raise more capital following
the initial results of stress tests.
“While most of the 19 banks that have
been tested are expected to show less
negative results, Citi and BofA seem to be
in a shaky situation, prompting investors
to pick up the yen on risk aversion as
stocks fell,” said Takashi Kudo, a director
at NTT SmartTrade in Tokyo.
The World Health Organisation raised
its alert level on swine flu to a phase four,
one step closer to declaring the first flu
pandemic in 40 years.
More countries have reported cases
of the flu but so far the deaths have not
spread beyond Mexico, where the
outbreak began and 149 people were
killed.
“This won’t help sentiment, but
for now, we’re at the beginning of the
outbreak and it’s hard to anticipate the
impact on the world economy,” said
Sebastien Barthelemi, analyst at Louis
Capital Markets in Paris.
“In the short term, airlines, hotel and
oil companies are vulnerable, while drug
companies could benefit from the situ-
ation.”
Japan’s Chugai Pharmaceutical, maker
of influenza drug Tamiflu, rose 1.9%.
Cathay Pacific Airways dropped 3% and
British Airways was down 5.69%.
The MSCI world equity index fell
1.32% to 217.36, extending Monday’s
losses after seven weeks of gains, and
the FTSEurofirst 300 index fell 2.27%
to 795.35. Futures on the US S&P 500
dropped 1.8%.
Emerging market stocks fell 2%,
with export-dependent economies seen
vulnerable to the spread of swine flu.
The traditionally safe-haven yen rose
around 0.8% against the dollar to 95.85,
just off earlier one-month highs, and the
same amount against the euro to 124.85,
close to earlier seven-week highs.
Market players cut back on holdings
of riskier higher-yielding currencies and
commodities for a second day, taking
profits on winning bets since the begin-
ning of March that a global economic
recovery was taking root.
Japan’s Nikkei average shed 2.7%
while Hongkong’s Hang Seng was down
1.92% and Taiwan’s weighted index was
1.9% lower.
Oil fell 2.73% to US$48.77 (RM177.52)
a barrel. – Reuters
Swine flu timing ‘could
McLaren not be worse’ for airlines
wait to GENEVA: Airlines suffered
hear an 11.1% fall in passenger
‘liargate’ numbers in March year-on-
fate year, and swine flu stands
to compound financial
pg 28 problems and suppress
traffic even more, an indus-
try body said yesterday.
“The global economic
crisis continues to reduce
demand for international
air travel,” the International
Air Transport Association
(IATA) said in a statement
that warned the swine flu
virus that has killed up to
149 people in Mexico could
prove costly for airlines.
“Anything that shakes the
confidence of passengers
has a negative impact
on the business. And the
timing could not be worse
given all of the other eco-
nomic problems airlines are
facing,” it said.
Cargo traffic fell 21.4%
last month compared to
March 2008.
IATA, which represents
230 airlines including
British Airways, Cathay
Pacific, United Airlines and
Emirates, has said airlines
would lose US$4.7 billion
(RM17 billion) this year as
a result of the economic
downturn that hsas kept
people and cargo from
flying. – Reuters

briefs
JAL hikes annual loss
forecast
TOKYO: Japan Airlines, Asia’s largest
carrier, said yesterday it would post a
net loss of about ¥63 billion (RM2.387
billion) for the past year to March, al-
most twice as much as expected.
Previously JAL had forecast an an-
nual net loss of ¥34 billion.
It now expects an operating loss of
¥51 billion for the year, against a previ-
ous projection of a ¥37-billion shortfall.
JAL blamed the worse than expected
performance on a “relentless” drop in
global demand for air transport. – AFP
Deutsche Bank posts
strong results
FRANKFURT: The biggest German
bank, Deutsche Bank, posted yes-
terday strong first quarter results,
the latest major bank in Europe and
North America to offer hope for an
eventual end to the financial crisis.
Deutsche Bank reported a net
profit of €1.2 billion (RM5.67 billion),
far surpassing market expectations.
In the first quarter of 2008, Deut-
sche Bank had posted a net loss of
€141 million, and analysts polled by
Dow Jones Newswires had forecast
a net profit of €764 million this time
around.
Bank chairman Josef Ackermann
said: “This was a key quarter for
Deutsche Bank. Once again we
demonstrated our strength, as we
have consistently throughout this
crisis.
“But in this quarter, we also
proved our earnings power.” – AFP
Pioneer to get lifeline
from Honda
TOKYO: Japan’s Pioneer Corp said
yeterday that it was getting a financial
lifeline from Honda Motor Co, which
will take a 6.5% stake in the electronics
maker to help it survive the recession.
Pioneer said it planned to raise
¥2.5 billion (RM93.6 million) by issuing
shares to Honda, which will become its
second-largest shareholder after Sharp
Corp. Sharp’s own stake will drop to
13.35% from 14.28% after the new
share issue.
Pioneer said it would use the money
to boost its position in car navigation
systems, in which it has a 30% domestic
market share.
The firm said it needed to raise a
total of about ¥40 billion to achieve its
recovery plan and would seek additional
financial support. Pioneer is consider-
ing applying for public funds to help it
through the slump. – AFP