Interview: Walmart --- Su
>> 9:12 a.m. in sydney. expect a dry and hot day, moderate winds strong and knaest in the afternoon. gusty in the afternoon. high of 32 degrees celsius. holiday shoppers in the u.s. are off and spending. sales for the first weekend in the holiday season were ahead of last year’s pace. it’s a different story for the world’s largest retail. su keenan has more on why wal-mart is slashing its sales forecast. su?%
>> this had a big impact on the entire retailing industry stock group. this was a holiday shopping weekend kicked off by discounts and massive sales and wal-mart says it took a more balance approach. that strategy combined with higher energy prices led to sluggish sales. the stock chart shows shares tumbled as wal-mart cut its november sales forecast by more than half. the company now predicts the sales gain of .7% for november. this is the second time in four months that sales have failed to rise more than 1%. overall, analysts say the holiday retail sales season began well. credit card transactions for the two days after thanksgiving rose more than 6%. retail sales on friday, the day after thanksgiving, were 11% higher than this time last year. the national retail federation’s scott krugman says the luxury retailers, rather than discounters, continued showing strength.
>> that seemed to go gangbusters and we’re pleased but we have to put it in perspective. this is not a sprint but a marathon. the bulk of the holiday shopping is still to come and the most important period is the week leading into and the week after christmas.
>> even so, wal-mart’s sluggish sales are fueling investor concern that holiday sales may fall short. the index of major retailers was one of the weakest indexes in today’s trading. you add to that concern deutsche bank’s retail analyst downgrading federated department stores to hold from buy and also nieman market shares to hold, nieman-marcus’s shares tumbling almost 4%. higher energy prices will continue to hurt consumers’ appetite for spending.
>> you get back to the question of how high gasoline prices have begun to hurt the consumer and in particular, when you see the average consumer losing an extra $7 or $8 a week, that will come out of primarily the discounters first and potentially to broader consumer buying habits but it’s high gasoline and high heating oil prices.
>> we are just about to enter the colder winter months where home heating oil prices will have an impact. retail stocks, as you know, have been among the best performers year to date in the u.s. many analysts say there was profit-taking going on here with investors trying to lock in gains heading into the end of the year, also pressuring stocks. back to you.
>> good holiday cheer for u.s. retailers. thank you. india’s biggest software maker plans to higher as many as 600 people in north america. tata consultancy chief executive says he’s increasing the work force.
>> the demand is due to a number of reasons. one is the existing i.t. spends and getting more out of it. that’s one opportunity. again, is consolidation as they do mergers and acquisitions and reengineer systems so there are efficient systems themselves.
>> the company has 8,500 employees in north america. he’s optimistic about the outlook for his company and india’s information technology industry.
>> growth is the way we are looking at the future. instead of going into the future, the opportunities for growth are very much there.
>> tata’s customers include general electric and general motors. copper prices rise to a six-week high in u.s. rising u.s. and demand from china are cutting into stockpiles. more than half of the copper producers, traders and analysts surveyed by bloomberg expect prices will rise this week. copper futures are up 12% since june. a chinese investment bank prepares to handle the nation’s first share sale without an overseas partner. china international is helping the nation’s i.p.o. it’s handling it without half partners, which may mean more fees for beijing international. irrk, are i, doctoro―irico plans to list shares on december 20. southeast nations paving a way for the free trade zone. the 12-nation group is called to begin cutting tariffs by next year. asean nations need to remove trade barriers to spur growth after losing investment to india and china. china had more than double the foreign investment compared to asean’s. we’ll speak to a currency trader next about the dollar’s slide.
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Listen Market briefing --- Cathy (medium)
Asia pacific regions
good morning and welcome to “ live” from hong kong. i’m catherine yang. in addition to our breaking news and live market report, we’ll have in-depth analysis of the two-day asean summit in laos. plus, china and japan are set to hold their own meeting in laos as the two-day summit continues. we’ll hear from china’s premier wen jiabao as well as the head of the u.s.-asean council. we’ll hear from tero honda motor’s chief. also, a currency trader will weigh the latest market action in 20 minutes. also, the chairman of the south korean steel association will comment on a possible shortage. the dollar slide comes to a halt in new york trading after dropping to a record 1.3330 on friday. traders expect the dollar to resume its decline unless the country cut its record account deficit. japan’s finance minister warned the government may sell yen to weaken the currency and help exporters. china’s prime minister wen jiabao warned against the speculation, saying it’s not possible to change the currency peg. we’ll have more on his visit to the asean summit. wal-mart fell on wall street. the dow and s&p closed lower by .4%. and the nasdaq rose .25s. retailers were among the worst performing sectors. wal-mart says november sales were hurt by high energy prices. deutsche bank securities cut the ratings of federated department stores and nieman-marcus group. spider-man made a special appearance on wall street, joining sony executives to ring the closing bell, celebrating the release of “spider-man 2” on d.v.d. the 10-year treasury note fell pushing the yield to a three-month high on speculation foreign central banks and investors will cut holdings of u.s. debt as the dollar declines. bill gross with pacific investment management says investors should be careful with treasuries. in his december report, he recommends buying german bund instead of u.s. treasury. we’ll go to our stock market editor in sydney to learn more. how will the drop in u.s. and european retail stocks likely affect markets in asia?
>> we saw the decline in wal-mart, that was a 4% drop in wal-mart shares in the u.s., spill over. it could spill over into trading here in asia. you want to be looking out for the big exporters like toyota, nissan and honda. she’s companies selling into the u.s. markets particularly when people are saying high energy costs are one of the reasons why consumers didn’t spend. the halt in the dollar may help offset concern about retail sales in the u.s. as that would spell good news for the profits of those companies. another to watch for is samsung electronics which is also extremely dependent on the state of the u.s. economy and demand amongst consumers there.
>> talk a bit about malaysian airlines. how did that company manage to increase second-quarter profit when fuel prices have been rising?
>> quite an interesting result. second-quarter profit up 31% even as fuel prices have been soaring around the world. they managed to hedge their fuel costs. also, at the same time, they’ve added flights to china and will add one to stockholm and europe. they’ve added to their fares and started an upgrade of business and first-class seating. so malaysian airlines is one to look out for. the stock is down 10% so far this year.
>> what is likely to dominate trading in australia today?
>> well, i might remark to you quickly that the new zealand market is at a record, only 10 points from 3,000 points and could reach that later today or this week. australia’s asx 200 had its fourth consecutive record yesterday. today, watch out for retail stocks. they have been dominating the market lately, coles myer, woolworth. we have retail sales for october coming out at 11:30 sydney time in australia so those stocks could be the ones in the focus of investors.
>> thank you. japanese industrial production probably held near a six-month low in october. economists surveyed by bloomberg estimate factory output rose .1% following a drop in september. japanese companies are shedding inventories on concern demand for japanese exports is slowing. figures are due at 8:50 a.m. in tokyo. japan releases october employment and household spending numbers today. japan’s unemployment rate probably remained at 4.6%. both indicators are due at 8:30 a.m. in tokyo. malaysia’s economic growth probably slowed from its fastest pace in four years. economists surveyed by bloomberg estimate malaysia’s economy expanded 7% compared to a year ago, the slowest pace of the year. malaysia’s exports are slowing. record oil prices cut global demand. southeast asia’s number three economy reports third-quarter g.d.p. this afternoon in kuala lumpur. in news outside the business world, ukrainian president leonid kuchma backs a recount for the election of his successor.
>> very good morning to you. leonid kuchma favors either a recount or rerun of ukraine’s presidential election in the country’s two eastern regions. these two regions supported prime minister viktor yanukovich whom kuchma met with yesterday. kuchma warned of economic collapse, saying the country may fold up like a house of cards. protestors supporting yushchenko shut keiv, closed businesses, government buildings and blocked roads. lawmakers may consider a vote of no confidence in yanukovich today. the united nations secretary general kofi annan says he’s disappointed to learn his son was paid by a company being investigated for its role in iraq’s oil-for-food program. the 29-year-old received $125,000 from the geneva-based company. the payments ran for four years until february of this year. kofi annan said he thought his son stopped receiving pay in 1998 and says there’s a perception problem for the u.n. for conflict of interest. the u.n. program ran until a year ago. u.s. investigators believe saddam hussein stole $121 billion from the scheme. osama bin laden’s top lieutenant, al-zawahri, vows to carry on his war against the u.s. and will continue fighting the u.s. until its policies towards muslims change. the al qaeda leader made the comments on a videotape aired by al jazeera. the associated press said the video did not specify what policies should be altered and it wasn’t clear if the video was made before or after the november 2 u.s. presidential election. that’s world news.
>> thank you. back to business. exxon-mobil starts work on a oil refinery in china in the southern if you gene province. the official said aramco and exxon expect the plant to process nearly a quarter billion barrels of oil a day. china consumes 6.2 million barrelss of oil a day. after the break, shares of wal-mart suffered their biggest drop in a year. learn what’s happening at the world’s largest retailer, next on “ live.”
