16 theSun | TUESDAY MARCH 10 2009

KLCI CLOSED Nikkei 7086.03 T

87.07
business STI 1,456.95 T56.17 TSEC 4,628.24 T
25.39
Hang Seng 11,344.58 T576.94 KOSPI 1,071.73 S
16.70
SCI 2,118.75 T74.26 S&P/ASX200 3,154.50  9.00
S

EU backs IMF
Nikkei stock index fund boost
BRUSSELS: EU finance ministers are
set to back a call from the Interna-

drops to 26-year low

TOKYO: Japanese shares slumped to the
lowest level in more than a quarter century
yesterday as fears deepened about the health
of Asia’s biggest economy.
Investors were rattled by news that Japan
logged its biggest-ever current account deficit
in January, the first such month of red ink in
13 years, as exports collapsed because of the
global downturn.
The Nikkei-225 index has fallen 20% so far
in 2009, after a record 42% slump last year.
The Nikkei slipped 87.07 points, or 1.21%,
yesterday to end at 7,086.03, the lowest closing
level since October 6, 1982.
The broader Topix index of all first-section
shares fell 10.86 points, or 1.51%, to a fresh 25-
year low of 710.53.
“Gloomy economic news from the US and
Japan as well as political uncertainty in Tokyo
hurt sentiment,” said Mitsushige Akino, chief
fund manager at Ichiyoshi Investment Man-
agement.
With the economy worsening and many
Japanese companies bracing for big losses, the
Nikkei could drop below 7,000, he warned.
Japan’s export-dependent economy has
been hammered by a worldwide drop in de-
mand for cars, high-tech goods and machinery,
putting it on course for the worst recession
since World War II.
The Nikkei is more than 80% off its all-time
high of 38,915 reached in December 1989 be-
fore the country’s asset bubble burst, ushering
in the “lost decade” of stagnant growth, reces-
sions and deflation.
“The 26-year low level is psychologically
important, but looking at the general picture
shares are simply following a continued down-
ward trend,” said Hirokazu Fujiki, chief equity
strategist at Okasan Securities. “I don’t see any
room for shares to rebound.”
There was more bad news from the corpo-
rate sector as a new survey showed that 1,318
companies went bankrupt in Japan in Febru-
ary, up 10% from a year ago.
Political worries also mounted after a gov-
ernment minister was implicated in a fund-
raising scandal that has also prompted calls for
the main opposition leader to step down.
Real estate firms were among the main vic-
tims yesterday. Mitsui Fudosan plunged 8.2%
to ¥885 and Sumitomo Realty & Development
tumbled 9% to 804.
Insurers were also hit. Tokio Marine lost
5.6% to 1,828 and Mitsui Sumitomo Insurance
Group Holdings declined 7.4% to 1,836. – AFP
tional Monetary Fund to double its
funds to US$500 billion (RM1.9 tril-
lion) to fight the global financial crisis,
a document showed yesterday.
The move, outlined in a paper
seen by Reuters, spells out the
European Union’s position ahead
of a G20 finance ministers meeting
and comes as a key US policymaker
said a coordinated global effort was
needed to stimulate demand and
drag the world out of recession.
“It is essential that the IMF has
appropriate financial means to as-
sist countries particularly affected by
the current crisis,” said the EU draft
document, to be approved by minis-
ters of the 27-nation bloc today.
G20 officials will on Friday and
Saturday discuss how to deal with the
global financial and economic crisis,
which has made several European
countries turn to the IMF for help.
The meeting is in preparation for
a summit in London next month of
the G20, which groups the world’s
richest nations and biggest emerg-
ing economies.
In an interview with the Financial
Times, US President Barack Obama’s
National Economic Council director,
Larry Summers, said kickstarting
growth should take precedence
over ironing out global imbalances.
“The right macro-economic focus
for the G20 is on global demand and
the world needs more global de-
mand. This notion that the economy
is self-stabilising is usually right, but
it is wrong a few times a century.
And this is one of those times.
Fears about the health of banks and
car makers pushed Japan’s Nikkei in-
dex to a 26-year closing low yesterday,
while Hongkong-listed shares of HSBC
fell to a 13-year trough. – Reuters

Computer Services said yesterday it had started

briefs
Ex-IMF chief calls for new
global super-agency
MANILA: The former managing director of the
International Monetary Fund (IMF) yesterday
called for a new super-agency that would rep-
resent all countries and help avoid a repeat of
the present global financial turmoil.
Speaking at an Asian Development Bank
forum in the Philippine capital, Michel Cam-
dessus said this “global governance group,”
would monitor both the financial and monetary
well-being of every country.
He said this could mean “broadening the man-
date of IMF from monetary to financial issues”.
For legitimacy, he said the new body would
“be rooted in the Bretton Woods architecture”
rather than in inter-governmental groups like
the G-8 and the G-20.
“We must ensure all the countries are
represented in all levels of governance in the
system, including at the highest end.” – AFP
HSBC shares down 24%
in Hongkong
HONGKONG: Hongkong-listed shares in
HSBC closed 24.1% lower yesterday as wor-
ries about the banking giant’s plans to raise
capital spooked investors, dealers said.
HSBC shares closed down HK$10.50 (RM5)
at HK$33, with support dropping off dramati-
cally in the last few minutes of trading.
Last week, the British-based bank
announced worse-than-expected annual
results and asked shareholders for a 17.8
billion US dollar cash boost, which it in-
sisted was to fund future investments and
not shore up its balance sheet. – AFP
Satyam starts bidding
process for 51% stake sale
MUMBAI: Indian outsourcing giant Satyam
the bidding process to sell off a 51% stake.
Each interested bidder will have to show
proof of availability of at least 15 billion rupees
(RM1.09 billion) in funds and submit a detailed
“expression of interest” to acquire the stake,
a company statement said.
Satyam has been battling for survival since
January when its founder B. Ramalinga Raju, now
in jail, stunned the corporate world by declaring
he inflated the firm’s balance sheet by more than
US$1 billion and fudged its profits for years.
Last Friday, market regulator Securities and
Exchange Board of India gave the go-ahead for
the stake sale to proceed. – AFP
Oil prices near six-week peak
on output cut prospects
LONDON: New York crude oil prices ap-
proached a six-week peak yesterday on
expectations that the Organisation of
Petroleum Exporting Countries will cut
production further, analysts said.
New York’s main futures contract, light
sweet crude for April delivery, rose as high as
US$46.76 per barrel in Asian trade. The con-
tract later stood at US$45.78 in London morn-
ing deals, up US$0.26 from Friday’s close.
Meanwhile, Brent North Sea crude
for April delivery dipped US$0.36 to
US$44.49.
The OPEC cartel, which pumps 40% of
the world’s oil, is due to meet on Sunday
for a crucial production meeting. – AFP
Merck, Schering-Plough
announce merger
WASHINGTON: US pharmaceutical giants
Merck and Schering-Plough announced their
merger early yesterday in a stock-and-cash
transaction valued US$41.1 billion (RM156
billion).
The combined company will bear the name
Merck after the transaction is completed.
The transaction was unanimously
approved by the boards of directors of both
conglomerates, a joint statement said. – AFP