Sri Lanka Newspapers 11/02/2012

Asia stocks slip as Greek bailout remains in limbo

BANGKOK (AP) — Asian stock markets dropped Friday after Europe’s finance ministers demanded more spending cuts from Greece before clearing a euro130 billion ($170 billion) bailout to stave off the country’s bankruptcy.

Benchmark oil hovered below $99 per barrel while the dollar rose against the euro but fell against the yen.

Japan’s Nikkei 225 index fell 0.3 percent to 8,978.33. Hong Kong’s Hang Seng lost 0.6 percent to 20,888.68 and South Korea’s Kospi dropped 0.9 percent to 1,996.71. Australia’s S&P/ASX 200 shed 0.8 percent to 4,250.70.

Greece announced an agreement with European debt inspectors Thursday to cut costs and keep from defaulting on its debt next month, an event that would send shock waves through the world financial system.

But finance ministers from nations that use the euro said Athens didn’t go far enough and have given Greece just a few more days to find an extra euro325 million ($430 million) of spending cuts and get parliament to approve the measures.

All that suggests "further uncertainty on the horizon," Credit Agricole CIB in Hong Kong wrote in an email. "A Greek parliamentary vote set to begin this weekend may see some progress but markets will trade cautiously ahead of the vote."

The austerity package that failed to satisfy European finance ministers already calls for Greece to make steep new cuts in government jobs and spending. The country’s international lenders insisted on the cuts as a condition for a euro130 billion emergency bailout that Greece urgently needs to make a bond payment next month.

The cuts will be hard to implement in a country that has grown used to profligate government spending. Protesters have taken to the streets of Athens regularly to denounce the government and its austerity measures.

Jackson Wong, vice president at Tanrich Securities in Hong Kong, said investors were taking profits after markets posted solid gains earlier in the week.

"Everyone is waiting for results to see if the 130 billion euro rescue fund can be dispersed," he said.

Second-tier stocks in Hong Kong, particularly appliance makers, were benefiting from the rotation out of blue chips that often occurs once the market reaches a temporary high, Wong said. Haier Electronics Group Co. soared 7.9 percent and Skyworth Digital Holdings rose 4.9 percent. GOME Electrical Appliances was 1.8 percent up.

But financial shares sagged amid the uncertainty surrounding Greece. Mitsubishi UFJ Financial Group lost 2 percent. Australia & New Zealand Banking Group fell 1 percent. South Korea’s Shinhan Financial Group Co. lost 3.2 percent.

Australian mining giant Rio Tinto dropped 2.3 percent, a day after reporting a 59 per cent slump in full year profit due to a writedown of its aluminum business. Rival BHP Billiton, which reported weaker-than-expected profits earlier this week, fell 2.4 percent. Energy Resources of Australia tumbled 3 percent.

Hong Kong-listed Lenovo Group Ltd., the world’s second biggest personal computer maker, jumped 4.2 percent a day after reporting that quarterly profit grew by more than half.

On Wall Street, stocks were helped Thursday by U.S. jobs data. The number of people seeking unemployment assistance fell to its lowest level since April 2008.

The Dow Jones industrial average rose 0.1 percent to 12,890.46. The Standard & Poor’s 500 index rose 0.2 percent to 1,351.95. The Nasdaq composite rose 0.4 percent to 2,927.23.

Benchmark oil fell 38 cents to $99.46 per barrel in electronic trading on the New York Mercantile Exchange. The contract rose $1.13 to finish at $99.84 per barrel on the Nymex on Thursday.

In currencies, the euro fell to $1.3266 from $1.3290 late Thursday in New York. The dollar fell to 77.61 yen from 77.66 yen.
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*Govt invests Rs. 240mn to expand booming footwear and leather sector

The government is injecting US$ 2 million to upgrade its booming footwear and leather sector. It has started work on an exclusive industrial zone designated for leather and footwear production and is also launching special human resource training initiatives while enlisting a national university to upgrade the Leather and Footwear sector which netted US$ 36 million in export revenues in 2011, the Ministry of Industry and Commerce said.

The Sri Lankan footwear and leather sector players are also upbeat on the prospects of the latest fair currently underway at the BMICH.

"I am pleased to announce, that we will be setting up a footwear training school in collaboration with SLITA with the assistance of the Indian Footwear Development Design Institute at a cost of Rs 120 million, and we have also started preliminary work on a new Leather and Footwear industrial zone at a cost of Rs. 120 million at Wanathavilluwa region focus on leather tanning manufacturing as well as footwear. We are also planning to initiate a Degree Programme on Footwear and Leather at the University of Moratuwa," announced Rishad Bathiudeen, Minister of Industry and Commerce of Sri Lanka.

He was addressing the inauguration event of the Leather and Footwear Fair 2012 at the BMICH. Basil Rajapaksa, Minister of Economic Development, was present as the Chief Guest along with Jayarathna Herath, Deputy Minister of Industry and Commerce.

The Fair opened on 10 February morning amidst considerable local and Indian industry stakeholder presence. The fourth in a series, the fair has also received a boost due to strong participation by IFCOMA, the Indian leather and footwear manufacturers’ collective called the "Indian Footwear Components Manufacturers Association". IFCOMA has brought down 25 Indian footwear and leather manufacturing firms for the fair which will end on Sunday February 12. Also taking part are exhibitors from Italy and China.

"I also stress that the plentiful supply of trainable human resources available in Sri Lanka is a vital strategy, if not the key, to advance Sri Lanka’s footwear and leather industry to the international levels. To this end I am pleased to announce that our neighbour India has agreed to extend its valuable assistance to Sri Lanka’s footwear industry following a request made by myself in 2011 during the fourth Indian leather Buyer-Seller Meet held in Colombo for which I thank our supportive neighbour India,"the industry minister said.

"The assistance will be for skills building and training for the local footwear and leather industry. I stress that we still import the bulk of our leather requirements directly from Chennai. And all of us are aware that India has become the number two footwear producer in the world. I have no doubts that Sri Lanka’s 30,000 strong Footwear and Leather work-force will immensely benefit from this valuable assistance"

"We are very privileged to be a part of this prestigious fair" said Pradeep Aggarwal, General Secretary of IFCOMA addressing the occasion.

"IFCOMA has been a part of Sri Lanka footwear industry for a decade now and we have been conducting regular buyer-seller meets in Sri Lanka. Our objective is to create direct country to country industry linkages, specially component manufacturers in India and footwear and leather manufacturers in Sri Lanka. We have been quite successful in this as we have observed a substantial increase in trade between the two countries in this sector," Agarwal added.

Many Sri Lankan leather and footwear manufacturers taking part in the fair were upbeat as the latest show has given them an opportunity to forge wider industry linkages. "This year we have a wider variety of producers from this sector," said Chandralal De Silva, Chairman/CEO of Bettans Lanka Exports. "We want to see increased local raw material inputs to the industry. We will benefit immensely if we can increase it to 70%" De Silva said. De Silva is a pioneering footwear manufacturer in Sri Lanka and his Bettans Lanka Exports is a supplier to Fiordibaci label, the ladies footwear range from Italy.
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