Year: 2011

Brazil has welcomed the candidacy of Agustin Carsten, Mexico’s central bank chief, in his pursuit to become the next head of the Washington-based IMF but said it required more time to decide which candidate to support.
 
Brazil’s Finance Minister Guido Mantega however noted on Thursday: “Emerging economies are under-represented in the fund’s leadership, especially Latin American countries.”
 
He added: “Being born in Europe or in the US does not make the candidate the most qualified for the position. According to Mantega candidates’ dedication to reforming the IMF is more significant than their place of birth.
 
Although Brazil has previously shown to be one of the key countries to appeal for more say for emerging markets in global economic affairs, government sources believe Brazil may be favouring Lagarde because of her influence within the IMF and her ability to push through reforms.
 
Carstens, who is currently in Brazil campaigning for backing for his candidacy against French Finance Minister Christine Lagarde, has defended Brazil’s response, saying emerging countries didn’t have enough time to co-ordinate.
 
Lagarde, who began lobbying for support among the emerging markets on Monday, promised during her visit to Brasilia to ‘universalise’ the IMF.
 
Although she is considered the favourite, sources say it is vital for her candidacy to get Brazil’s backing as it is the region’s largest economy. 

French power equipment specialist Schneider Electric has signed an agreement to acquire Spanish software firm Telvent GIT for €1.4bn ($2bn), the company said on Wednesday.

Schneider, the world’s largest producer of low and medium voltage equipment, hopes to reinforce its solution capability for the smart grid electricity software according to a company statement.

Telvent’s shareholders will receive $40 a share under the terms of the offer, which is 16 percent higher than the company’s closing price on Tuesday. The tender offer is expected to start mid-June and close in Q3.

Schneider’s president and CEO, Jean-Pascal Tricoire, said: “The acquisition is in line with our ambition to become a complete solution provider for our customers. Telvent offers software capability that complements and integrates with Schneider Electric’s offering.  It also brings complementary customer base and geographical coverage.”

Unemployment in Germany fell for a 23rd straight month in May the Federal Labour Agency in Nuremberg said on Tuesday.
 
The decline in unemployment is said to be largely due to increased spending by consumers and businesses and export driven growth according to the agency.  
 
Numbers fell to 2.96 million or 7 percent from April’s 7.3 percent, reflecting a drop of 118.000, to reach the lowest since records began for a reunified Germany in 1991.

Japanese car manufacturers Honda and Toyota reported on Friday a global production drop of around half for April compared to figures the same period last year.

Toyota reported a 47.8 percent slump in April to 308.555 vehicles while Honda announced a 52.9 percent drop year-on-year.

The car manufacturers said the production decrease was due to a shortage of parts which was triggered by the supply chain disruption following the March earthquake and tsunami.

According to Honda, production volume in Asia and Oceania is likely to start picking up in July as the supply of parts from Japan gradually increases.

French finance minister Christine Lagarde late on Wednesday formerly launched her bid to lead the IMF as managing director.
 
Lagarde, a former corporate lawyer, is the favourite to succeed Dominique Strauss-Kahn who resigned following sexual assault allegations.
 
Augustine Carstens, the governor of the Mexican central bank, is another key contender for the position.
 
The IMF executive directors representing BRICS on Tuesday called for a “transparent, merit-based and competitive process”, saying that selecting a European as managing director undermined the legitimacy of the IMF.

Australia’s largest pay-TV provider Foxtel has made a $2.02bn cash takeover offer for regional operator Austar United Communications, the company said on Thursday.
 
Following months of negotiations Foxtel offered $1.52 for each Austar share.
 
Austar, which offers subscription TV in non-metropolitan areas, considered the offer price by Foxtel ‘appropriate’ for a change of control transaction.
 
Foxtel said: “A successful transaction would bring together two of Australia’s major subscription TV service providers, creating one of Australia’s largest media businesses.”
 
“Austar intends to work with Foxtel over the coming weeks to satisfy the conditions upon which the proposal has been made so the parties can enter into a definitive transaction,” Austar said in a statement.

The head of Greece’s conservative party, Antonis Samaras, announced late on Tuesday that he would not back a further €6bn austerity measure to reduce the country’s deficit.
 
The political stalemate over austerity measures is threatening to jeopardise the country’s next tranche of a €110bn bailout worth €12bn, which is due in June.

Greece announced on Monday the immediate sale of state assets including the ports of Piraeus and Thessaloniki, and shares in OTE, Greece’s telecom operator.
 
Prime Minister Georgios Papandreou pledged to go ahead with the drastic privatisation plan in an attempt to reduce its elevated debt level.
 
In a televised speech to his ministers, Papandreou said: “Through our decisions and the sacrifices of the Greek people we avoided bankruptcy last year. We now need to take the necessary decisions to avoid the danger once and for all, and to change the country.”

Electronics giant Sony announced late on Monday a revised surprise $3.18bn net loss for the fiscal year that ended in March. It originally posted a profitable projection of $857m in February.
 
The company said the loss was triggered by the production disruptions due to the March earthquake and tsunami and the cyber attack on its online gaming service.
 
Sony estimates the April hacker attack, which forced the site to stay offline for 23 days and involved the theft of personal data from over 100 million users, will cost around $171m to fix.
 
The electronics company was not scheduled to report final earnings until Thursday but a rule imposed by the Tokyo Stock Exchange, which requires companies to inform investors of missed earnings targets of 30 percent or above, meant it had to announce preliminary results three days early.

Low cost airline Ryanair posted a 26 percent profit increase to €401m in the year to March compared to €319m the previous year.
 
Revenue rose 21 percent to €3.63bn from €2.98bn year-on-year due to a 12 percent jump in airfares, the company said on Monday.
 
“We were pleased to deliver a 26 percent increase in profits and eight percent traffic growth, despite higher oil prices, the global recession, and volcanic ash disruptions in Q1 last year,” CEO Michael O’Leary said.
 
The no frills airline also reported an eight percent increase in passenger traffic with a total of 72.1 million passengers. However, O’Leary warned that traffic growth is expected to slow to four percent in 2012 from last year’s eight percent.

He said: “Since we have limited visibility on bookings, we remain concerned at the impact of the recession, austerity measures, and falling consumer confidence on fares.”
 
“Despite these concerns we cautiously expect that our average fares will rise by up to 12 percent this year due to a better mix of new routes and bases, slower traffic growth, and higher competitor fuel surcharges,” O’Leary added.

Tokyo Electric Power, the operator of the Fukushima Daiichi power plant hit by the tsunami in March, announced on Friday an all time high $15bn net loss due to the disaster which destroyed four of its reactors.
 
The news was followed by the resignation of Tepco’s president Masataka Shimuzu, and the head of the nuclear division, Sakae Muto, who were both criticised for their handling of the nuclear disaster.
 
“We feel sorry for the victims of the earthquake and tsunami. At the same time we want to sincerely apologise for our nuclear reactors in Fukushima causing so much anxiety, worry and trouble to society,” Shimuzu said at a conference.
 
Shimizu will be replaced by the company’s managing director Toshio Nishizawa.

Dominique Strauss-Kahn has resigned as head of the IMF according to a statement issued late on Wednesday by the global finance body.
 
Strauss-Kahn, who faces charges of sexual assault and attempted rape in New York, said in his resignation letter: “I deny with the greatest possible firmness all of the allegations that have been made against me.”
 
He added: “I will devote all my strength, all the time, and all my energy to proving my innocence.”
 
John Lipsky has been appointed by the board of directors as the interim head of the IMF and will replace Strauss-Kahn at the G8 summit in Deauville on May 26.

Texas-based technology company Dell reported late on Tuesday that its Q1 profits had almost tripled due to stronger than expected big business sales.

Net income according to the company jumped to $945m from $341m a year earlier and revenue rose 1 percent to $15bn. The technology stalwart saw operating income reaching $1.2bn, while enterprise solutions and services revenue was up 5 percent to $4.4bn led by a server revenue increase of 11 percent.

“We’re off to a solid start in our fiscal year 2012. Our substantial profit increase demonstrates that our strategy is working and our execution is improving,” said chairman and CEO Michael Dell.

The company now expects mid-single digit revenue growth in Q2, slightly above its normal, and sequential seasonal growth of 2 to 3 percent. Dell’s updated outlook for fiscal 2012 includes revenue growth of 5 to 9 percent and an increase in non-GAAP operating income growth of around 12 to18 percent.

CFO Brian Gladden noted: “We have built an $18bn enterprise solutions and services business with exciting growth potential and our execution in the core client business continues to be very good.

BP’s attempt to gain a grip in Russia’s Arctic oilfields through a £10bn share swap deal with state controlled company Rosneft has collapsed after BP failed to address a dispute and reach an agreement with its partner TNK before the midnight Monday deadline.
 
The Russian half of the Russian-British TNK-BP joint venture had threatened in April to file a law suit for up to $10m against its parent company BP, saying BP breached its shareholder agreement for going straight to state oil company OAO Rosneft rather than through TNK-BP.
 
Rosneft and BP signed a share swap deal in January which agreed the joint development of the Russian Arctic shelf and entitled Rosneft to five percent in BP in exchange for nine percent of its own shares. The deal however was blocked by AAR, the company representing the interests of four billionaires in TNK-BP, because it felt the contract with Rosneft had broken their own agreement.
 
TNK-BP claimed losses due to BP’s actions, saying it had lost an opportunity to explore within the Russsian Arctic and would therefore be seeking damages.

In a deal valued an estimated $3.7bn or $49.50 a share, a group of Canadian pension funds and banks collectively known as Maple Group Acquisition, confirmed late on Sunday that it has submitted a tender to buy all of TMX Group’s shares.

The bid by Maple Group to buy the operator of the Toronto Stock Exchange was 20 percent higher than the bid by LSE and was submitted by the group in the hope of derailing a planned merger between the LSE and TMX.

Canadian banks had previously criticised the potential transatlantic merger, saying it could lead to foreign control of Canada’s capital markets and lessen Toronto’s position as a financial hub.

Investors in Maple Group include Canada Pension Plan Investment Board, Alberta Investment Management, Fonds de solidarite des travailleurs du Quebec, Scotia Capital, Caisse de depot et placement du Quebec, CIBC World Markets, National Bank Financial, Ontario Teachers’ Pension Plan Board, and TD Securities.