Archive | April 7, 2013

Japanese Policy Hurts Hong Kong

The Japanese central bank has disclosed that it would begin to increase the buying of their government bonds and invest into different stocks and this information had a positive impact on the Japanese economy. The bank intends to increase the money supply in Japan, and its value against the dollar has dropped while its shares have seen a 1.6% increase. While Japan is seeing changes in its country, cities from neighboring countries such as Hong Kong is also seeing an affect due to this news. Many investors are now swaying to invest in Japan, dropping the amount of investments occurring in Hong Kong.

Though it is good for the Japanese economy that investors are now more willing to invest in Japanese stocks, the impact that their new policies have on the global economy should be put first. Since every country’s economy is so closely related, the fall of Hong Kong’s stocks and stocks from other neighboring countries may end up bouncing back at them in the end.

Written by: Jessica Ho
Source: The Wall Street Journal

http://online.wsj.com/article/SB10001424127887323646604578404161692943512.html?mod=WSJ_Heard_LEFTTopNews

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U.S Currency Versus Gold Price

Gold prices has been unsteady for the previous months, with great fluctuation from day to day trade sessions and news-outbreak. Gold however, has reached its continuum eight week slow-decrease, which is a streak that has lasted longest ever since 2004. The reason for the decline may result from the increase in the US dollar value, which then turns metal into alternative assets investments instead of the direct place investors go to for the need of safe haven.

Gold currently trades at a price of $1,576.11 an ounce, a .3 percent decline. The decline did occur after a great fluctuation of gold price which took place in last week’s gold price market; prices rallied 1.7 percent to $1,583.20.

The decline in gold value has a positive correlation to the US currency. As David Lennox, a analyst suspects, U.S. Currency are gradually growing because people has no better place to invest their money. He also mentions that U.S economy is in a better shape relative to other places.

Written by: Victor To

Source: http://www.bloomberg.com/news/2013-04-08/gold-resumes-decline-as-investors-cut-holdings-dollar-advances.html

Mideast Firms Aim to Boost Region’s TV Ad Spending

Advertisers and broadcasters in the Middle East are trying to break into the regional television advertising market due to the lack of high fees charged by the TV broadcasters and media-buying firms. Spending on TV ads in the Mideast that include 16 countries and 300 million people, is only about $2 billion a year, which is a really low amount. The goal of broadcasters, telecommunication operators and advertisers is that they are trying to create a measurement system that would allow them to figure out where TV advertisements would be most valuable. The devices used would be able to reflect the demographics of the country and details on what the people are watching. The most conflicting issue that they have is that they do not know the audience that they are targeting.

The people meter plan has a potential of falling apart if the ad firms do not cooperate with the new system because many of the firms also deny that their fees are high, when they actually are. I believe that the idea of having a people meter, if audited correctly, will change the way advertisements rates are calculated and how the audience of the Mideast will be marketed.

Written by: Samantha Chin

Source: The Wall Street Journal

http://online.wsj.com/article/SB10001424127887324373204578374360945574692.html

Pound It Out

For British businesses, the amount of hiring is expected to increase over the next six months, but due to falling confidence of manufacturer’s, overall growth of the nation’s economy is not expected. The accounting firm called BDO came up with an optimism index that measures business performance two quarters ahead rose from 90.6 in February to 92.2 in March. However the numbers are still below 95 which BDO says marks the dividing line between growth and contraction. However, BDO’s employment index, which measures the United Kingdom’s businesses’ hiring intentions over the next two quarters, climbed up to 96.0 in March, which is the the highest since August 2011.

Unfortunately, the British economy appears to be already approaching  its third recession in five years. With the falling value of the pound, which makes imports more expensive, and weak demands for British exports because other neighbors in the European Union are struggling as well, which decreases the confidence of manufacturers. Manufacturing makes up a fifth of the nation’s economy which is why it is the spearhead of the government’s recovery efforts.

 

Written by Constantine Kostikas

Source: http://www.nytimes.com/reuters/2013/04/07/business/07reuters-britain-firms-survey.html?src=busln

Payroll-Tax Rise Blamed For Job Weakness

The $85 billion across-the-board Sequester cuts were initially thought to increase unemployment but an article published today in the Wall Street Journal offers a contradictory view. The recent increase in payroll tax is to be blamed for the dismal amount of jobs created within the economy last month; the retail sector lost 24,000 jobs alone in March due to a decrease in spending by consumers. Social Security payroll tax was increased from 4.2% to 6.2% as part of a fiscal-cliff deal by Congress in January.

This article correlates the increase in payroll tax to the job market but also acknowledges that the Sequester will take some time to show up in official data. Government furloughs have yet to begin in full force but will not cause the disappearance of most jobs. The budget cuts may have spooked private businesses however, leading many to cease their hiring and fueling speculation that average monthly job growth will remain below 100,000 in the second quarter.

Evan Chang

Source:

The Wall Street Journal

Candy Trade Group Seeks PR Help as Sugar is Blamed For Americans’ Obesity

04-07-2013 NCA

The National Confectioners Association, based in Washington D.C., is tackling the negative image that sugar has picked up in recent years. The Association, composed of major members such as Mars Chocolate North, Nestle Confections, and The Hershey Company, is pushing for a newer image with an emphasis on health.

The review of the agencies is more than just reaching out to consumers, however. The way the public views sugary consumables can have a direct impact on regulations. As seen by Michael Bloomberg’s campaign against large sodas, the government can take drastic action to try deter the consumption of sugar.

Personally, I do not want the government micromanaging what I can and can not eat according to their standards of what is best for me. The problem is not the product, but rather the people consuming the goods have no sense of self-control. With the new campaigns, such as the voluntary “Treat Right” campaign, I hope that the emphasis can be switched from sugar being bad to the idea of maintaining a healthy diet with moderation. Of course, with all of the science putting the blame on sugar, the National Confectioners Association has quite the challenge ahead of it to remove the negative stigma around its products.

Source:

http://adage.com/article/agency-news/national-confectioners-association-pr/240720/

Life’s A Beach

It is usually a large problem when privacy guarantees are breached and secret information regarding wealthy individuals is leaked, but for German officials they could not be any happier. This week, the information of tens of thousands of offshore accounts have been leaked to officials and even Finance Minister Wolfgang Schäuble remarked ““I am pleased about these reports,”. This is due to to Berlin trying to fight the international financial market systems that make it easy for wealthy individuals to hide their wealth.

Germany has been lobbying for years within international organizations, such as the Group of 20 and the Organization for Economic Cooperation and Development in an effort to establish clear tax havens in an attempt to stop tax avoidance and comply with other dirty money statutes. However efforts have been impeded by international partners who do not share the same indignation that Germany is experiencing, including those in the EU. While information being leaked damages the reputation of German banks, they are trying to make the best of it by using the situation to punish tax evaders.

 

Written by Kevin Zhang

Source:

Eddy, Melissa. “Germans See Hope in Leak for Fighting Tax Evasion.” The New York Times. The New York Times, 05 Apr. 2013. Web. 7 Apr. 2013. <http://www.nytimes.com/2013/04/06/world/europe/german-officials-welcome-offshore-tax-havens-leak.html?ref=offshorebanking&gt;.

HMV Stores to Be Sold to Private Equity Firm

In a new technological advanced society, the demand for the actual discs of artist’s albums and brand new movies are at it’s lowest since its invention. HMV, a United Kingdom company, what used to be one of the biggest entertainment retail company are being bought out by Hilco. Founded in 1921, HMV enjoyed years of success until the recent surge of digital copies of entertainment and e-commerce making buying artists’ albums and movies much more convenient to obtain. in 2011, Hilco already acquired the HMV operations in Canada but with the announcement of bankruptcy for HMV earlier this year, Hilco has decided to acquire to entire company.

As a huge entertainment fan myself, I definitely understand and see why HMV are not going to perform as well as they used to. With the invention of iTunes and Netflix, buying entertainment is quicker and easier than ever so there is no more need of going to an actual store to get what you want. I am sure there are still plenty of consumers who prefer the traditional ways of purchasing this type of entertainment, but there just isn’t enough of them to keep the business going. Hopefully, Hilco knows what to do with HMV because it is sad to see such an old company going out of business.

-Derby Ng

http://dealbook.nytimes.com/2013/04/05/hmv-stores-to-be-sold-to-private-equity-firm/

Facebook Introduces Smartphone Software to Boost Ad Sales

As announced before, Facebook explains their new mobile software at an event in Menlo Park, California. Home is Facebook’s software that is designed to run with Google’s Android system. It includes basic features from Facebook that allows users to easily access their personal pages straight from their phones. It will also be a platform for Facebook to earn money from advertisements. Despite rumors, Mark Zuckerberg clarifies that the social-network company will not be developing its own smartphone. It will continue to use Google’s market to expand its own.

The company chose Google over Apple because the Android system is designed to have more flexibility. Home is designed to overlap Google’s original smartphone settings just like GO Launcher EX and Apex Launcher. This becomes a threat for Google because users will be using Facebook’s platform rather than Google’s. Facebook will be able to generate sales from this software because of the large number of people who rely on Facebook these days. The effect of the event was also apparent when Facebook’s stocks closed on Friday with an 1.18% increase.

 

Written By: Melody Mark

Source:

http://www.bloomberg.com/news/2013-04-04/facebook-said-to-plan-android-smartphone-software-debut.html

JPMorgan Works to Avert Split of Chief and Chairman Roles

JPMorgan Chase will be holding their annual meeting next month where a crucial vote will take place. JPMorgan Chase is actively working on saving the company some major embarrassment. Not only will major shareholders be at the meeting but also smaller shareholders as well because the vote so important. After JPMorgan Chase’s multi-billion dollar trading loss, the company is deciding whether Jamie Dimon should remain as the chairman of the company or should his role be split into another position. Based on last year’s statistics, 40% of JPMorgan’s investors thought that splitting the roles would be the better option because many investors have lost trust in the current chairman. The company’s fear is that if the chairman is going to split into two positions that Jamie Dimon would rather resign than split his power.

Splitting the position of chairman would be the better option in my opinion. With two position opposed to one, they can check on each other’s power. Having two positions also means that there would be an “another set of eyes and ears” according to Michael S. Levine, a portfolio manager at OppenheimerFunds. Although splitting the positions would be the better option, if Jamie Dimon decides to resign, there could be potential management problems because Jamie Dimon has done a great job with JPMorgan Chase.

Written by: Wilson Tang

Source:

http://dealbook.nytimes.com/2013/04/05/behind-the-scenes-jpmorgan-works-to-sway-shareholders-on-dimon-vote/

Prada’s Leather Bags Carry Earnings Higher

Prada has had a large increase in sales, most notably with leather products. Prada has been opening large amounts of stores these past few years in Asia, Middle East and South America. They believe the increase in amount of stores will lay a good foundation for future success. Much of the net profit has come from the investments in Asia. The Asian-Pacific region alone has increased sales by 33% to over 1.16 billion euros. Their loyal pool of consumers are flocking toward purchasing leather bags and wallets. This year the company’s net profit has rose roughly 45%, to 625 million euros, while revenue has rose to almost 3.3 billion euros.

Much of Prada’s success is their move toward opening and operating their own company stores. Prada’s movement away from wholesale businesses into directly operated shops have been increasingly profitable. The company is doing so well they plan on opening 80 more shops globally this year.

URL:http://online.wsj.com/article/SB10001424127887323646604578404324080222756.html

-Jonathan Chan