Interview: Tokyo market
>> violence linked to al qaeda targets, of iraq’s prime minister. ron madison has that story and more in tokyo.
>> cathy, a group led by al qaeda operative abu musab al zarqawi has claimed responsibility now for a suicide car bombing that took place near the prime minister’s party headquarters. the press reports at least two people were killed, 10 others were hurt. now it is the second time this month the offices have been targeted by suicide bombers. the last attack left four people dead. now after the blast, the interim government issued an e-mail statement announcing the arrest of two of al zarqawi’s top aides. one was cited as telling interrogators that he plotted 75% of baghdad’s car bombings. ukraine’s president viktor yushchenko traveled to russia, one day after taking office. the associated press says the trip is aimed at smoothing over relations with the kremlin. the a.p. says the russian government feared he would move his country out of moscow’s sphere of influence and they openly support it. yushchenko’s opponent in ukraine’s presidential election. russian president vladamir putin is calling on the new president now to strengthen ukraine’s economic ties with russia by joining an economic union. yushchenko is the ukraine’s third president since the fall of the soviet union. now the northeast is struggling to recover from a blizzard that dumped more than a meter of know in some places. schools, government offices and courthouses are closed in many states now. boston’s airport finally has one runway open after being shut down for more than a day. and chicago’s airport had only one cancellation today after canceling nearly 1300 over the weekend. the storm is now being blamed for at least 15 deaths. cathy, that is the latest look at world news. back to you.
>> thank you for that, ron. and back to business. china aviation oil is asking creditors to write off 59% of the $530 million they owe as part of a bailout. the creditors include mitsubishi banking. shobi pereira is in singapore with the latest on this story. what is the latest?
>> in a statement, c.a.o. says it’s offered creditors 45.1 -- 41.5 cents per dollar of debt. now china aviation is a singapore-listed company. the units bejing-based parent, china aviation oil holding would convert $118 million loan into equity. now the parent company will also invest $100 million in total with an unnamed investor. now david gerald is president of the securities investors association of singapore and the association represents more than 63,000 individual shareholders. now he says given the circumstances, this is a reasonable offer and easy way, he says, would have been for the parent company to just walk away from this whole thing. now the background to all this is singapore’s high court ordering china aviation oil to submit a restructuring plan and that’s after the company lost $550 million betting on oil prices. now investors says the offer may help reduce the damage to singapore’s reputation as a financial center. cathy in
>> in terms of speculative trading, though, is there some concern from investors about that in general?
>> cathy, let me just quote here , one analyst that oversees $40 million of equities in asia, excluding japan base in london. what he is saying is that china aviation is just the tip of the iceberg. now he says as long as investors are having a love affair with everything chinese, the list of scandals, he says, is only going to get longer. now china aviation oil’s parent is the biggest creditor among 99 listed in a filing to singapore’s high court yesterday by the units. a senior investment strategist at c.f.c. securities says creditors may try to negotiate better terms and he says this is an opening proposal. and he thinks there will be negotiations because the creditors will want to bargain to get more. now the chinese government, he says, will be willing to improve the offer to the point where the market will be happy. now china aviation oil holdings spokesman said in a telephone interview that china aviation oil’s parent invited singapore’s holdings to invest in the reorganization. now they say it is still in discussions with the parent company and a spokeswoman says, in their words, we will make our decision to participate based on commercial considerations and whether the plan is acceptable to all parties concerned. that’s where they’re leaving it for now. back to you, cathy.
>> thank you for that, shobi. and coming up next, we’ll hear what john snow has to say about currency exchange rates and how the bush administration plans to tackle the twin deficits.
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Listen Interview: Oil trade
here are the headlines. oil trade hits an eight-week high as opec has followed through on promises to cut production. freezing temperatures in the northeast united states also boosted prices. the dollar falls against the euro after a report shows central banks boosted their euro holdings at the expense of the dollar. china’s expected to report today growth slowed in the fourth quarter after government lending curbs kicked in to reduce investment 6789 china expects an additional 35,000 to 40,000 more chinese to visit canada every year now that bejing has put it on an approved list of tourist destination, in addition to the more than 100,000 business deals lead by a trade delegation that wraps up an eight-day trip to china and hong kong today. canadian minister for international trade jim peterson tells bloomberg’s steven engel in hong kong that the mission was a success, even though he would not disclose the value of contracts signed by the canadian companies.
>> there were over 100 commercial signings. but the main purpose was not the contract so much as it was to establish relationships. we believe that in order to get into the chinese market , that relationships are very important . this may involve investment. we wanted to open up those relationships to the canadian businesses and that’s why we went there.
>> now the w.t.o. ministerial meetings will be held right here in―at the end of this year and the focus will be, of course, china. in the run-up to that, what is canada doing as far as striking bilateral trade agreements with this part of the world, be it south korea, be it china, and how does that position it against the w.t.o. framework, which, you know, targets more multilateral trade agreements?
>> our most important priority, of course, is the w.t.o. and it’s so significant to canada and the rest of world because it has the potential for eliminating or vastly reducing the high subsidies for agriculture in the e.u. and the u.s. and this is why the development has to be successle and i talked with my counterparts about that and mr. chang and i are committed to a very vigorous and optimistic round.
>> what was discussed in particular, though, with china as far as striking bilateral trade agreements, of course, with china?
>> we have undertaken, and this is reconfirmed, that we will be working this year on a foreign investment protection agreement with tchine, which is important for canadian investors and chinese investors in canada.
>> now one of the hotly debated topics at home in canada right now is the perception that state controlled companies, be it in china or elsewhere, are looking at purchasing a natural resource of companies in canada. how much of a concern is that and where do you draw the line between being open to foreign investments, but also not sacrificing national sovereignty?
>> welsh let me be very clear. we will not be discriminating against china. we have a law, called the investment canada act, whereby any foreign investment in canada of over about $250 million, has to demonstrate that it is to the net benefit of canada. so, this is a law which applies to all countries, including the united states.
>> another debated issue is canadian beef exports and whether the asian countries will resume importing of canadian beef. any movement on that? because we did have another case of b.s.e. at the beginning of this month. has that set canadian beef exports back?
>> it hand because the three asian companies that have opened up to canadian beef already have indicated that they will continue to determine the market . they have not indicated that they’re going to close their markets to canada and i’m very pleased that hong kong opened up its market to canadian beef on november 30, and we’ve had huge and very successful sales of beef into hong kong, for example.
>> will there be movement on china resuming?
>> we’re hoping. we’ve asked them to look at us and we’ve asked them to, like other countries, look at the risk.
>> on the currency exchange issue, how badly does an artificially m.m.b. negatively impact the trade imbalance between canada and china?
>> the thing that really affects it is the lower dollar itself and because our biggest trading partner, of course, is the united states. and in spite of an appreciation of over 35%, over a two and a half year-period, canadian trade figures have held up very well and the canadian economy has been very vigorous. we’re still creating more jobs than any other of the g-7 countries and so i think it is a real credit to the resilience of our canadian economy.
>> that’s canadian minister for international trade, jim peterson. australian consumer prices may have risen in the fourth quarter of last year. the government report is due at 11:30 a.m. in sydney. let’s go to david tweed in sydney for more on this report. what are investors expecting?
>> well, they’re looking for an increase of about .6% for the fourth quarter, consumer prices, c.p.i. index, which is coming out at 11:30 in sydney and here’s what a currency strategist at westbancorp ration in new york had to say about it. people have been quite sharply moving towards the idea of rate hikes in australia and a reasonably firm number will sustain that momentum. now remember, of course, last week we did have the home loan approvals which came out. they were the highests in two years. so, there has been some movement towards speculation that the australian reserve bank might indeed increase interest rates in australia. that would have, of course, an impact on the australian dollar and could, if we saw the australian dollar rise could be bad for our exers and look at our retail-related stocks, consumer-related stocks such as wol worths. also would likely quick to raise a story in the australian newspapers today, quite a speculative story, but they were talking about what coles mier might do in terms of capital management or returning money to shareholders and one of the options they might look at is returning much as australian dollars, one billion australian dollars to shareholders. cathy?
>> david, thank you for that. and coming up, china aviation oil asks creditors to write off more than half of the $530 million they are owed. our reporter in singapore is standing by with more on the bailout plan for the oil trading company.