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Indian Stocks Drop Most in Asia as Higher Oil Deepens Inflation Concerns
India’s stocks declined, with the benchmark index poised for its second weekly drop, as surging oil prices raised concerns about faster inflation higher interest rates.
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India Braces for Inflation Risks From Oil After Rate Increase
India faces pressure to step up its battle against price gains even after the steepest interest-rate increases among Asia’s major economies, as oil costs rise and consumer demand strengthens.
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Yen Drops on G-7 Intervention as UN Libya No-Fly Vote Spurs Oil
The yen fell the most since 2008 against the dollar, the Nikkei 225 Stock Average pared its weekly drop and U.S. index futures climbed after central banks intervened to weaken Japan’s currency. Oil rallied.
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Japan Tourism Drop Leaves Chinese to Fill Asia’s Empty Rooms
Asia’s holiday resorts may see fewer Japanese tourists as the tsunami and nuclear scare keeps some of the region’s wealthiest travelers at home, leaving countries more reliant on Chinese travelers to fill the gap.
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China’s New Home Prices Gain in Most Cities, Defying Curbs
China’s smaller cities led gains in home prices last month as Beijing, Shanghai and other larger metropolitan areas introduced local housing measures following new curbs from the central government.
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Asian Currencies Head for Weekly Rise as G-7 Intervention Halts Yen Rally
Most Asian currencies were poised for weekly gains as the Group of Seven nations agreed to buy yen to calm currency markets roiled in the aftermath of Japan’s biggest earthquake on record.
Thursday, March 17, 2011
Asia News
Japan Tourism Drop Leaves Chinese to Fill Asia’s Empty Rooms
Asia’s holiday resorts may see fewer Japanese tourists as the tsunami and nuclear scare keeps some of the region’s wealthiest travelers at home, leaving countries more reliant on Chinese travelers to fill the gap.
Government officials and lawmakers in Thailand, Taiwan, Vietnam, Malaysia and South Korea have predicted drops in tourist revenue in the past week. Japanese nationals spent $25 billion on travel in 2009, compared with $44 billion in expenditures from China, according to the latest available data from the United Nations World Tourism Organization.
“The Japanese outbound market has been in decline the past few years,” said Kris Lim, a director at the Pacific Asia Travel Association, an industry group. “For the next few months, the drop will be much more severe.”
Canceled travel plans after the world’s fourth-strongest earthquake since 1900 and resulting tsunami hit Japan a week ago crimped travel-related stocks around the region. The disaster will accelerate a trend that has seen countries in the region court more visitors from China, which may have eclipsed Japan as Asia’s biggest economy last year, Lim said.
Japanese tourists to the Asia-Pacific region declined for three straight years before rising to 17.5 million last year, still below 2006 levels, PATA data shows. By comparison, Chinese tourists surged to 48 million last year, five times more than a decade ago, with most heading to Hong Kong or Macau.
“The volume of Chinese visitors actually makes up a lot for some of those countries that have Japan as the number one source market,” Lim said by phone. “Most destinations in the region may not be experiencing a very huge decline.”
Hawaii Decline
The U.S. state of Hawaii, where Japanese visitors accounted for 17 percent of 7.1 million tourists last year, may see fewer arrivals, Sandra Carvao, a spokeswoman for the UNWTO, said in an e-mail today. The agency has maintained its forecast of global tourism growth at 5 percent after the Japan earthquake and uprisings in the Middle East and North Africa, she wrote.
“We expect that the proven dynamism and resilience of the tourism sector, particularly in Asia, will contribute to limit the medium- and long-term impact,” Carvao said.
Taiwan, where Japanese tourists comprised 19 percent of arrivals last year, may see its travel industry hurt due to the crisis, central bank Governor Perng Fai-nan said at a session of parliament in Taipei yesterday. China overtook Japan as Taiwan’s largest source of tourist arrivals in 2010 with 1.64 million visitors, a 68 percent rise from a year earlier.
South Korea’s tourism industry may be hurt because of a possible drop in the number of Japanese visitors after the quake, the Finance Ministry said March 12. In January alone, 1.9 million Japanese visited South Korea, comprising 33 percent of all arrivals, according to the Korea Tourism Organization.
“Even though there is no assessment yet on how much the number of Japan tourists coming to Thailand will fall, we believe Japan will focus on rebuilding their country more than traveling outside for a while,” Thai Finance Minister Korn Chatikavanij said March 14.
“Japanese volume has been flat in 2010 compared to 2009, so it’s not one of our growth markets,” Ririnda said, adding that visitors from China increased 20 percent last year.
Malaysian travel-related companies may suffer with the rest of the region, Lee Heng Guie, chief economist at CIMB Investment Bank in Kuala Lumpur, said in a March 15 report. Japanese tourists accounted for 1.7 percent of visitors to Malaysia last year, it said.
“We expect a more visible impact on the services and tourism sectors as the Japanese may avoid travelling abroad given dampened consumer sentiment,” the report said. “Likewise, Malaysians will refrain from travelling to Japan for fear of radiation leaks.”
Vietnam’s benchmark VN Index has fallen in four straight trading sessions since the earthquake on concerns Japanese visitors would decline and investors would leave the country.
“The earthquake will definitely affect the number of tourists,” Nguyen Manh Cuong, deputy head of Vietnam National Administration of Tourism, said by phone March 15. “They will have to prioritize spending to rebuild their lives.”
To contact the reporter on this story: Daniel Ten Kate in Bangkok at dtenkate@bloomberg.net
To contact the editor responsible for this story: Peter Hirschberg in Hong Kong at phirschberg@bloomberg.net
Government officials and lawmakers in Thailand, Taiwan, Vietnam, Malaysia and South Korea have predicted drops in tourist revenue in the past week. Japanese nationals spent $25 billion on travel in 2009, compared with $44 billion in expenditures from China, according to the latest available data from the United Nations World Tourism Organization.
“The Japanese outbound market has been in decline the past few years,” said Kris Lim, a director at the Pacific Asia Travel Association, an industry group. “For the next few months, the drop will be much more severe.”
Canceled travel plans after the world’s fourth-strongest earthquake since 1900 and resulting tsunami hit Japan a week ago crimped travel-related stocks around the region. The disaster will accelerate a trend that has seen countries in the region court more visitors from China, which may have eclipsed Japan as Asia’s biggest economy last year, Lim said.
Japanese tourists to the Asia-Pacific region declined for three straight years before rising to 17.5 million last year, still below 2006 levels, PATA data shows. By comparison, Chinese tourists surged to 48 million last year, five times more than a decade ago, with most heading to Hong Kong or Macau.
“The volume of Chinese visitors actually makes up a lot for some of those countries that have Japan as the number one source market,” Lim said by phone. “Most destinations in the region may not be experiencing a very huge decline.”
Hawaii Decline
The U.S. state of Hawaii, where Japanese visitors accounted for 17 percent of 7.1 million tourists last year, may see fewer arrivals, Sandra Carvao, a spokeswoman for the UNWTO, said in an e-mail today. The agency has maintained its forecast of global tourism growth at 5 percent after the Japan earthquake and uprisings in the Middle East and North Africa, she wrote.
“We expect that the proven dynamism and resilience of the tourism sector, particularly in Asia, will contribute to limit the medium- and long-term impact,” Carvao said.
Taiwan, where Japanese tourists comprised 19 percent of arrivals last year, may see its travel industry hurt due to the crisis, central bank Governor Perng Fai-nan said at a session of parliament in Taipei yesterday. China overtook Japan as Taiwan’s largest source of tourist arrivals in 2010 with 1.64 million visitors, a 68 percent rise from a year earlier.
Tourism Stocks Fall
Formosa International Hotels Corp. (2707), Taiwan’s largest listed hotel chain, has dropped 12 percent as of 9 a.m. local time today since the March 11 earthquake that killed 5,692 people. EVA Airways Corp. (2618), the island’s second-biggest airline, has fallen 10 percent in that time, fifth-most among the 31-member Bloomberg World Airlines Index, which declined 5.8 percent.South Korea’s tourism industry may be hurt because of a possible drop in the number of Japanese visitors after the quake, the Finance Ministry said March 12. In January alone, 1.9 million Japanese visited South Korea, comprising 33 percent of all arrivals, according to the Korea Tourism Organization.
“Even though there is no assessment yet on how much the number of Japan tourists coming to Thailand will fall, we believe Japan will focus on rebuilding their country more than traveling outside for a while,” Thai Finance Minister Korn Chatikavanij said March 14.
Little Japanese Growth
Minor International Pcl (MINT), Thailand’s biggest operator of hotel resorts and fast-food restaurants, hasn’t seen a “material cancelation” of Japanese tour groups so far, Ririnda Tangtatswas, senior investor relations manager, said in an e- mail. Japanese tourists, who accounted for 6.2 percent of the Thailand’s 15.8 million arrivals last year, are responsible for about 5 percent of the company’s hotel revenue, she said.“Japanese volume has been flat in 2010 compared to 2009, so it’s not one of our growth markets,” Ririnda said, adding that visitors from China increased 20 percent last year.
Malaysian travel-related companies may suffer with the rest of the region, Lee Heng Guie, chief economist at CIMB Investment Bank in Kuala Lumpur, said in a March 15 report. Japanese tourists accounted for 1.7 percent of visitors to Malaysia last year, it said.
“We expect a more visible impact on the services and tourism sectors as the Japanese may avoid travelling abroad given dampened consumer sentiment,” the report said. “Likewise, Malaysians will refrain from travelling to Japan for fear of radiation leaks.”
Vietnam’s benchmark VN Index has fallen in four straight trading sessions since the earthquake on concerns Japanese visitors would decline and investors would leave the country.
“The earthquake will definitely affect the number of tourists,” Nguyen Manh Cuong, deputy head of Vietnam National Administration of Tourism, said by phone March 15. “They will have to prioritize spending to rebuild their lives.”
To contact the reporter on this story: Daniel Ten Kate in Bangkok at dtenkate@bloomberg.net
To contact the editor responsible for this story: Peter Hirschberg in Hong Kong at phirschberg@bloomberg.net
Japan earthquake and tsunami aftermath: March 18, 2011
1 of 5 People wait to receive a radiation exposure scanning in Fukushima, northern Japan Friday, March 18, 2011, one week after a massive earthquake and tsunami. (AP Photo/Kyodo News) 
4 of 5 People wait to buy gasoline at a gas station in Watari, northern Japan Friday, March 18, 2011, one week after a massive earthquake and tsunami. (AP Photo/Kyodo News) 
5 of 5 Firefighters and rescuers pray in front of the body retrieved from the rubble in Rikuzentakata, northern Japan Friday, March 18, 2011, one week after a massive earthquake and tsunami. (AP Photo/Kyodo News)
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Wednesday, March 16, 2011
Indian Railway Finance Plans Overseas Debt Issue
MUMBAI – Indian Railway Finance Corp. Ltd. plans to raise the equivalent of $650 million via foreign currency bonds or loans in the fiscal year that starts on April 1, a senior executive said.
The company--which has so far issued debt only in dollars, yen and euro--may consider raising the money in currencies such as the Swiss franc, Malaysian ringgit, as well as the euro and yen, its managing director R. Kashyap said.
"We always look at the pricing [of a debt transaction] after hedging, because our end-use is in rupees. If it works out to be cost-effective for us after hedging, we'll be very happy to do a CHF [Swiss franc] transaction, because that is one thing we haven't done," Mr. Kashyap said in a recent interview.
Over the past couple of years, IRFC has increased its focus on the overseas debt market to meet its funding needs since the government has kept passenger fares unchanged for eight years. In this year's railway budget, freight rates haven't been raised.
Indian companies--particularly lenders--are in search of new markets and a fresh pool of investors as they try to avoid growing supply pressures in traditional overseas bond markets. Union Bank of India in January sold bonds denominated in Swiss francs while IDBI Bank was mulling ringgit-denominated bond issues as an alternative to rising yields.
IRFC's $650 million overseas borrowing will form part of the 105.94 billion rupees ($2.36 billion) it is allowed to raise, according to the federal budget presented in February.
The remaining will be a mix of tax-bearing bonds and term loans denominated in Indian rupees, Mr. Kashyap said.
The company can also raise 100 billion rupees by issuing tax-free bonds.
The total of over 205 billion rupees ($4.57 billion) is more than double the 91.2 billion rupees it was permitted to raise this financial year through March.
The money will be used to finance capacity enhancement projects and to buy rolling stock assets for the Indian Railways, the world's largest employer.
Mr. Kashyap said the company is planning to front-load its overseas borrowing for $500 million in the first half of the fiscal year beginning April 1.
IRFC raised $450 million and $350 million in September 2009 and September 2010, respectively, through syndicated loans, according to data and analytics provider Dealogic.
It is in the process of raising Y12 billion through a 15-year loan and $200 million by selling five-year bonds, Mr. Kashyap said.
"Our assessment is that, in the next three to four months, the conditions in the samurai [bond] market will improve. I think a few months from now, we should be in a position to enter the samurai market again without a guarantee from the Japan Bank for International Cooperation," Mr. Kashyap said.
As a government-owned company, IRFC has been mandated to employ a conservative hedging strategy.
Mr. Kashyap said the company tries to keep its external commercial borrowing portfolio within manageable levels, in a 12%-15% band of its total outstanding portfolio.
The company's foreign exchange exposure is $1 billion.
"The bulk of it is in dollars. Whenever hedging is done, we do it for the full residual maturity of any transaction," he said.
The company only engages in classical hedging, where an entity holds opposite positions in the market.
It has protected every yen trade, while a small portion of its euro and dollar trades remains unhedged.
"Some of the dollar transactions have been kept open because the medium-term view is that the rupee will remain strong against the dollar, and we didn't want to lock into a hedging arrangement," Mr. Kashyap said.
The Indian rupee has lost 0.7% against the dollar so far in 2011.
Mr. Kashyap said the company has been in the practice of taking a Principal Only Swap during the life of a debt transaction to protect against any event risk. "Because the repayment has to be on a single particular date and any untoward event taking place on that date could expose us to great risk."
Mr. Kashyap believes that the rupee will remain stable over the next three to four years.
"If the rupee slips to 47 or 48 to a dollar in the next three or four years, then we can still live with it," Mr. Kashyap said.
The company has felt the transient impact of foreign exchange volatility, but its profits haven't been hit in a big way as the overseas debt portfolio is small.
The company--which has so far issued debt only in dollars, yen and euro--may consider raising the money in currencies such as the Swiss franc, Malaysian ringgit, as well as the euro and yen, its managing director R. Kashyap said.
"We always look at the pricing [of a debt transaction] after hedging, because our end-use is in rupees. If it works out to be cost-effective for us after hedging, we'll be very happy to do a CHF [Swiss franc] transaction, because that is one thing we haven't done," Mr. Kashyap said in a recent interview.
Over the past couple of years, IRFC has increased its focus on the overseas debt market to meet its funding needs since the government has kept passenger fares unchanged for eight years. In this year's railway budget, freight rates haven't been raised.
Indian companies--particularly lenders--are in search of new markets and a fresh pool of investors as they try to avoid growing supply pressures in traditional overseas bond markets. Union Bank of India in January sold bonds denominated in Swiss francs while IDBI Bank was mulling ringgit-denominated bond issues as an alternative to rising yields.
IRFC's $650 million overseas borrowing will form part of the 105.94 billion rupees ($2.36 billion) it is allowed to raise, according to the federal budget presented in February.
The remaining will be a mix of tax-bearing bonds and term loans denominated in Indian rupees, Mr. Kashyap said.
The company can also raise 100 billion rupees by issuing tax-free bonds.
The total of over 205 billion rupees ($4.57 billion) is more than double the 91.2 billion rupees it was permitted to raise this financial year through March.
The money will be used to finance capacity enhancement projects and to buy rolling stock assets for the Indian Railways, the world's largest employer.
Mr. Kashyap said the company is planning to front-load its overseas borrowing for $500 million in the first half of the fiscal year beginning April 1.
IRFC raised $450 million and $350 million in September 2009 and September 2010, respectively, through syndicated loans, according to data and analytics provider Dealogic.
It is in the process of raising Y12 billion through a 15-year loan and $200 million by selling five-year bonds, Mr. Kashyap said.
"Our assessment is that, in the next three to four months, the conditions in the samurai [bond] market will improve. I think a few months from now, we should be in a position to enter the samurai market again without a guarantee from the Japan Bank for International Cooperation," Mr. Kashyap said.
As a government-owned company, IRFC has been mandated to employ a conservative hedging strategy.
Mr. Kashyap said the company tries to keep its external commercial borrowing portfolio within manageable levels, in a 12%-15% band of its total outstanding portfolio.
The company's foreign exchange exposure is $1 billion.
"The bulk of it is in dollars. Whenever hedging is done, we do it for the full residual maturity of any transaction," he said.
The company only engages in classical hedging, where an entity holds opposite positions in the market.
It has protected every yen trade, while a small portion of its euro and dollar trades remains unhedged.
"Some of the dollar transactions have been kept open because the medium-term view is that the rupee will remain strong against the dollar, and we didn't want to lock into a hedging arrangement," Mr. Kashyap said.
The Indian rupee has lost 0.7% against the dollar so far in 2011.
Mr. Kashyap said the company has been in the practice of taking a Principal Only Swap during the life of a debt transaction to protect against any event risk. "Because the repayment has to be on a single particular date and any untoward event taking place on that date could expose us to great risk."
Mr. Kashyap believes that the rupee will remain stable over the next three to four years.
"If the rupee slips to 47 or 48 to a dollar in the next three or four years, then we can still live with it," Mr. Kashyap said.
The company has felt the transient impact of foreign exchange volatility, but its profits haven't been hit in a big way as the overseas debt portfolio is small.
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