The Star Online: Business
The Star Online: Business |
- AirAsia X shares up on higher revenue
- Credit Suisse escapes worst as it pleads guilty to US charges
- S'pore Q1 growth tops expectations
| AirAsia X shares up on higher revenue Posted: 19 May 2014 07:56 PM PDT KUALA LUMPUR: Shares of AirAsia X rose at mid-morning on Tuesday after posting a 40% jump in its first quarter revenue. At 10.47am, its shares rose six sen to 81.5 sen with some 24.14 million shares traded between the prices of 75.5 sen and 83.5 sen. The FBM KLCI was down 1.44 points to 1,885.63. Turnover was 751.92 million shares valued at RM409.27mil. There were 260 gainers, 293 decliners and 296 counters unchanged. AirAsia X saw its revenue for the first quarter ended March 31, 2014 jump 40% year-on-year to RM749.5mil from RM535mil, but still ended up recording losses of RM11.3mil. The company's loss before tax in the quarter came to RM48.1mil compared to a PBT of RM34.8mil previously. However, it enjoyed a net tax allowance of RM36.8mil versus RM15.4mil previously, which translated to the reduced loss of RM11.3mil. |
| Credit Suisse escapes worst as it pleads guilty to US charges Posted: 19 May 2014 07:27 PM PDT WASHINGTON/NEW YORK: Credit Suisse on Monday became the largest bank in 20 years to plead guilty to a US criminal charge, and will pay a US$2.5bil fine to authorities for helping Americans evade taxes, Attorney General Eric Holder said. But the Swiss bank escaped the worst for its business – its top management stayed in place, and the New York state bank regulator said it had decided not to revoke the bank's license in the state. US prosecutors said the bank helped clients deceive US tax authorities by concealing assets in illegal, undeclared bank accounts, in a conspiracy that spanned decades, and in one case began more than a century ago. "This case shows that no financial institution, no matter its size or global reach, is above the law," Holder said at a news conference in Washington. The Justice Department has not frequently pursued such convictions of financial companies, especially large ones that could become destabilized following an indictment, but US politicians have pushed for tougher punishment for big banks in response to the 2007-2009 financial crisis. Credit Suisse will pay financial penalties to the US Department of Justice, the Internal Revenue Service, the Federal Reserve and New York's banking regulator, the New York State Department of Financial Services, to settle the matter. It had already paid just under US$200mil to the Securities and Exchange Commission. "We deeply regret the past misconduct that led to this settlement," Credit Suisse Chief Executive Brady Dougan said in a statement. "We have seen no material impact on our business resulting from the heightened public attention on this issue in the past several weeks," he said. The bank will take an after-tax charge of 1.6 billion Swiss francs (US$1.79bil) in the second quarter, it said, adding it will reduce assets, sell real estate and take other actions to keep its capital at strong levels. Credit Suisse is the largest bank to plead guilty to a criminal charge in 20 years, Holder said. Dougan, who has come under pressure from Swiss politicians to resign, and Chairman Urs Rohner would both stay in their jobs after the settlement, a person close to Credit Suisse said on Monday. Credit Suisse declined to comment. HAND-DELIVERED CASH The US has been trying to wrest client data from Swiss banks in a long-standing spat with Switzerland and its strict bank secrecy laws. The standoff has already forced Wegelin & Co, the oldest Swiss private bank, to close shop after a guilty plea to charges of helping US clients evade taxes. Credit Suisse, which has a large business managing rich clients' money, helped them withdraw funds from their undeclared accounts by either providing hand-delivered cash to the US or using Credit Suisse's correspondent bank accounts in the US, the Justice Department said. Prosecutors said Credit Suisse had around 22,000 US client accounts worth around US$10bil, which included both declared and undeclared accounts. The bank was forced to plead guilty not only because of its complicity in tax evasion, but also because of its poor cooperation in the investigation, prosecutors said. It did not begin an internal probe until early 2011, and did not preserve some evidence of the wrongdoing, documents showed. New York's banking regulator said it would place a monitor of its choosing inside Credit Suisse, while the Fed said it was investigating whether other individuals should be subject to actions such as fines or bans. It did not name the individuals. Lloyd Blankfein, who heads Goldman Sachs, has warned that guilty pleas from banks such as Credit Suisse would have an unpredictable effect on markets, the Financial Times reported last week, though he would try to keep trading with such banks. Financial markets had been calm in the face of potentially stiff penalties against Credit Suisse. There had been no indications other banks have stopped doing business with the Swiss bank. It was still obtaining short-term funds in the repo and commercial paper markets, analysts said. New York bank regulators expressed concern about management during the talks, and discussed replacing Dougan and others, a source familiar with the negotiations said. But in the end, the option was not made a condition of the deal. CONCERNS ABOUT MANAGEMENT Christoph Blocher, vice president of the right-wing Swiss People's Party (SVP), this weekend called for Dougan and Rohner to step down, joining similar appeals from Social Democrat and Conservative Democrat politicians. Some on Credit Suisse's board were also unhappy with how Dougan had handled the case, another source familiar with the matter said last week, though it was not clear who the board members were, or what consequences, if any, this would have. They were blaming Dougan for the fact that the bank's US woes were dragging on for far longer than the case of rival bank UBS, this person said, which settled a similar probe in 2009 by paying a US$780mil fine. The last major international bank to plead guilty was France's Credit Lyonnais, which admitted in 2004 to lying to US regulators about its role in the takeover of a failed California insurer. The bank was acquired in the year before the agreement by bigger rival Credit Agricole. Mary Jo White, chair of the US Securities and Exchange Commission, on Monday said no bank was immune from criminal charges, and Holder earlier this month expressed a similar view, saying prosecutors are working closely with other regulators to address potential consequences before taking action. Still, negotiations overall had not gone well for the bank, the second source familiar with the situation said. Credit Suisse's legal team had initially tried to keep the fine below US$600mil or US$800mil, and was to be paid accordingly in an incentive scheme, but the numbers quickly outstripped that target, this source said. – Reuters |
| S'pore Q1 growth tops expectations Posted: 19 May 2014 07:14 PM PDT SINGAPORE: Singapore's economy grew faster than initially estimated in the first quarter, handily beating expectations, with solid manufacturing activity and a recovery in developed markets set to underpin growth over the year. The latest numbers released on Tuesday by the Ministry of Trade and Industry were complied after rebasing effects, with the base year for the national accounts now set to 2010 instead of 2005. The data showed the trade-dependent economy expanded an annualised and seasonally adjusted 2.3% in the January-March period from the previous three months. That compared with a 1% growth forecast in a Reuters poll and the government's earlier estimate of a 0.1% expansion. "I don't think there would be any change in policy stance due to this; the economy is pretty much in a healthy shape," said DBS senior economist Irvin Seah. In April the central bank stuck to its tight monetary policy stance, saying core inflation will remain elevated as a sustained recovery in advanced economies supports growth. "The year-on-year number surprisingly came down, that comes on the back of a massive revision in last year's figures, which saw every single figure adjusted." On a year-on-year basis, the economy grew 4.9% in the first quarter, missing a market forecast of a 5.5% growth in a Reuters poll. In April, the government had estimated the first quarter annual growth at 5.1%. The rebasing also counts research and development expenditure as investment in the data, which the government said will raise the level of nominal gross domestic product. The first quarter growth was boosted by solid performance in the manufacturing sector, helped by recovery in global demand. The sector saw annualised quarter-on-quarter growth of 11.9%, while year-on-year growth accelerated to a 9.8%, from a 7% rise in the previous period. Despite signs of a pick up in global demand, and expectations it will hold up Singapore's economy, some analysts raised worries about the financial sector. "Manufacturing will benefit little bit from a global recovery story," said Selena Ling, head of treasury research at Oversea-Chinese Banking Corp. "We may see momentum slowing in the financial sector. If we get bearish news like Fed rate hike expectations, we are going to see EM and Singapore being impacted," said Ling adding growth may slow down in the coming quarters. The finance and insurance sector grew 3.5% in the first quarter from the previous quarter. That compared with a 26% growth in the fourth quarter Singapore's economy has been growing at a steady pace in recent quarters on solid manufacturing output with a pick-up in demand from developed economies such as the US. Service sectors including finance have also propped up the wealthy South-East Asian country. In April Singapore's non-oil domestic exports rose more than expected, but some economists maintained a cautious view on overseas shipments, given sustained weakness in the electronics sector which is a key link in the global supply chain. Last year, the manufacturing sector made up roughly 19 percent of the local economy. The electronics sector accounts for 30% of total manufacturing activity. Over the course of 2014, the Singapore economy is seen benefiting from an expected pickup in US and European growth, even though a slowdown in the Chinese economy poses downside risks for growth in the city-state. The government expects Singapore's economy to grow 2%-4% in 2014, and economists generally tip full-year growth to come in near the upper end of that official forecast. The median forecast among 22 economists surveyed by the Monetary Authority of Singapore was for the city-state's gross domestic product to expand 3.8% in 2014, the Monetary Authority of Singapore said in March. – Reuters |
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