The Star Online: Business
The Star Online: Business |
- Japan Inc resilient in face of sales tax, so far
- KLCI falls in early trade, CIMB drags
- Ford, IBM to face renewed US lawsuit over apartheid-era abuses
| Japan Inc resilient in face of sales tax, so far Posted: 17 Apr 2014 07:10 PM PDT TOKYO: Japanese companies have weathered the first days of a rise in the country's consumption tax, with sales resilient and pricing power little damaged, a Reuters poll showed on Friday, in an early sign the tax hike may not derail the economy. This good news for "Abenomics" bolsters the Bank of Japan's view that it does not need to ease policy further to cushion the impact from the tax, which Prime Minister Shinzo Abe's government raised on April 1 to help curb the nation's mountain of public debt. The increase in the national sales tax – to 8% from 5% – has sparked worries that consumers will tighten their wallets, threatening the economic recovery Abe has engineered with 16 months of loose monetary policy and government spending. But about 40% of the firms in the Reuters Corporate Survey, conducted April 2-14, said sales were steady after the tax increase compared with year-earlier levels. And more than a quarter were able to increase sales in the face of the hike. The longer-term sustainability of sales growth will also depend on wage increases. So far, salary raises at many companies have not been enough to cover the 3-percentage-point tax hike, and the poll shows that some firms remain reluctant to increase wages significantly. "The transfer of the tax to consumers could be viewed as a positive development, a success for Abenomics, so long as consumers are able to absorb the pain and it doesn't lead to stalling economic growth," said Takuji Okubo, chief economist at Japan Macro Advisors, who reviewed the poll results. The survey also showed that nearly half of the roughly 250 respondents, senior managers who are identified only by industry, said they were able to pass on the full cost of the tax increase to customers. A few managed to raise prices more than the scale of the hike. NOT LIKE 1997 The monthly survey of companies capitalised at more than 1 billion yen (US$9.8 mil), conducted for Reuters by Nikkei Research, adds to evidence that the sales tax hike will not be as severe as the last increase, in 1997, which ushered in a punishing recession. "While we estimate a small proportion of consumption to fall, we're not anticipating an extreme reduction," said an executive at a chemicals maker. The Reuters Tankan, run in conjunction with the corporate survey, on Thursday showed that manufacturers grew more confident in April for the first time in three months. Confidence at non-manufacturers hit a record. Also this week, BoJ Governor Haruhiko Kuroda said the impact from the sales tax rise would be short-lived, while Finance Minister Taro Aso said the post-tax-hike downturn in consumption was smaller than he had expected. Yet while the early signs point to the recovery surviving the tax hike, the survey suggests some companies are still hesitant to raise salaries – despite pleas from Abe for higher wages to help drive a durable expansion and sustain inflation. Raising wages is a lower priority for manufacturers in the survey than increasing labour productivity, improving workplace conditions for women, expanding overseas operations and postponing retirement, as strategies to combat Japan's falling labour population. Last month, some major companies like Toyota Motor Corp offered workers their most generous pay increases in years, but raises at many other firms were not enough to cover the 3-percentage-point increase in the sales tax. "The real target is to have moderate sustained inflation, stable inflation, and from that perspective, inflation won't be sustainable unless wages start to rise at the same pace," Japan Macro's Okubo said. – Reuters |
| KLCI falls in early trade, CIMB drags Posted: 17 Apr 2014 06:23 PM PDT KUALA LUMPUR: The FBM KLCI fell in early Friday trade, dragged by mild selling of IHH and CIMB, though key regional markets gained. At 9.11am, the KLCI was down 2.93 points to 1,847.61. Turnover was 155.69 million shares valued at RM77.98mil. The broader market was firmer, with 149 gainers, 82 decliners and 175 counters unchanged. BIMB Securities Research said in a note the market will continue to see some local support despite overall buying being rather muted. It expects the index to hang around the 1,845-1,850 levels today Reuters said stocks ended a holiday-shortened week with mostly modest gains on Thursday, though the S&P 500 notched its biggest weekly advance since July as Morgan Stanley and General Electric rallied after strong results. "The two were the latest to post earnings that topped expectations, helping to lift the S&P 500 and the Nasdaq to their fourth straight daily advance. "Tech bellwethers Google and IBM fell on disappointing figures and limited the broader market's gain. IBM's slide pushed the Dow into slightly negative territory at the close," it said. At Bursa Malaysia, CIMB fell five sen to RM7.35 and IHH six sen to RM3.90. Gamuda fell four sen to RM4.54 and Dialog four sen to RM3.56. Gainers were Pintaras, up eight sen to RM3.87, MISC six sen to RM6.80 and Datasonic 12 sen to RM3.24. |
| Ford, IBM to face renewed US lawsuit over apartheid-era abuses Posted: 17 Apr 2014 05:56 PM PDT NEW YORK: Ford Motor Co and IBM Corp will again have to face a U.S. lawsuit claiming they encouraged race-based human rights abuses in apartheid-era South Africa, despite a series of recent court decisions limiting the right to pursue such cases. Reviving a 12-year-old lawsuit, U.S. District Judge Shira Scheindlin in Manhattan accepted an argument from a group of plaintiffs that corporations may be held liable under a 1789 law, the Alien Tort Statute (ATS), that lets non-U.S. citizens pursue some cases in U.S. courts over alleged violations of international law. "No principle of domestic or international law supports the conclusion that the norms enforceable through the ATS ... apply only to natural persons and not to corporations," Scheindlin wrote. Her decision came in a case that the 2nd U.S. Circuit Court of Appeals, also in Manhattan, in August had said should be dismissed. "Obviously we're thrilled," said Diane Sammons, a partner at Nagel Rice law firm in Roseland, New Jersey, representing some plaintiffs. "Judge Scheindlin is not taking the word of the defendants that corporations are not liable for human rights abuses under the ATS." Sammons said she plans to file an amended complaint. Jonathan Hacker, an O'Melveny & Myers partner who represents Ford, did not respond immediately to requests for comment. Keith Hummel, a partner at Cravath, Swaine & Moore who represents IBM, did not respond immediately to similar requests. The plaintiffs contended that by having made military vehicles and computers for South African security forces, several companies during the 1970s, 1980s and early 1990s had aided and abetted South Africa's former apartheid government in perpetrating abuses, such as killings and torture. The litigation seeks class action status, with potential damages in the billions of dollars. TOUCHING AND CONCERNING U.S. TERRITORY Last April, the U.S. Supreme Court limited the sweep of the Alien Tort Statute, in the case Kiobel et al v. Royal Dutch Petroleum Co et al. In a decision by Chief Justice John Roberts, the court held that the 1789 law was presumed to cover only violations of international law occurring in the United States, and that violations elsewhere must "touch and concern" U.S. territory "with sufficient force to displace the presumption." Four months later, Circuit Judge Jose Cabranes wrote for the 2nd Circuit that these findings meant the case against Ford and IBM should be dismissed, having "plainly bar<red> common-law suits, like this one, alleging violations of customary international law based solely on conduct occurring abroad." The plaintiffs, however, said Cabranes' ruling was based on arguments made before the Supreme Court's decision in the Kiobel case, and sought a chance to meet the new, tighter standard set by that court. Thursday's decision provides that chance, and Scheindlin set a May 15 deadline to file a new complaint against Ford and IBM, whose full name is International Business Machines Corp. Germany's Daimler AG <DAIGn.DE> and Rheinmetall AG <RHMG.DE> had also been defendants, but Scheindlin agreed in December that the Kiobel decision barred claims against them. General Motors Corp had also been among the defendants, but Sammons said claims against it were discharged during that automaker's 2009 bankruptcy. Apartheid ended in 1994 when South Africa held its first all-race elections, bringing Nelson Mandela and the African National Congress to power. The case is In re: South African Apartheid Litigation, U.S. District Court, Southern District of New York, No. 02-md-01499.- Reuters |
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