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Canada to exempt current takeovers from new rules

Canada will consider applying a national security test to foreign takeovers of domestic companies, but will not apply it to deals already under way, Industry Minister Jim Prentice said on Tuesday,

Prentice signaled the new rules he will be examining this autumn would not apply to a proposed C$5 billion ($5.1 billion)

 takeover of oil and gas producer PrimeWest Energy Trust by Abu Dhabi National Energy Co .

“Transactions that are already in the works will proceed under the terms of the current legislation. Changing the rules in the middle of the game is not how this country does business,” he told a Vancouver business luncheon.

Prime Minister Stephen Harper said last week that Canada needed to tighten its foreign investment rules and adopt a security test, and Prentice said his speech was designed to provide “clarity” on the government’s position.

Prentice’s address gave no specifics on what type of test Canada might adopt, but cited Germany, Japan and China as examples of countries with restrictions.

He declined comment when asked when the new rules would likely be completed.

Canada now reviews foreign investments only to ensure they provide a “net benefit” to Canadians.

Prentice said he would also examine the need for guidelines on takeovers of Canadian companies by state-owned enterprises, though there was not any inherent presumption against them.

Reuters

Chartered appoints new S.Korea unit CEO

Standard Chartered has appointed a new head of its South Korean unit, SC First Bank said on Wednesday.

The board of SC First Bank, which the London-based bank acquired for $3.3 billion in 2005, has picked David Edwards, one of its non-executive directors, to replace John Filmeridis, the bank said in a statement issued after a board meeting.

Filmeridis had led the bank since April 2005.

“On behalf of the board of directors, I want to extend my thanks and appreciation to John who has decided to retire from the bank as president and CEO,” Tim Miller, Chairman of SC First Bank, said in the statement.

Edwards, a member of StanChart’s Group Management Committee, had been previously chief operating officer of the group’s wholesale banking and regional CEO for the Middle East and South Asia at the Asia-focused bank.

Reuters

Zoellick renews World Bank focus

In his first 100 days as head of the World Bank, Robert Zoellick has worked quickly to give the poverty-fighting institution a sense of direction after the storm surrounding his predecessor Paul Wolfowitz.

Zoellick marks his first 100 days at the World Bank on Wednesday with a policy speech in which he will outline a strategic direction for the institution that would position it to better deal with challenges in the developing world caused by globalization.

The speech comes as Zoellick prepares for his first meeting of the bank’s 185 shareholders in Washington next week.

Since joining the World Bank in July, Zoellick has sought to direct its energy towards its mission of fighting global poverty and away from the bruising battle that led to the resignation of Wolfowitz, a former U.S. deputy defense secretary and an architect of the Iraq war.

Wolfowitz resigned in June after a scandal involving a high-paying promotion for his companion at the World Bank.

Zoellick’s 100-day speech is expected to include a fresh take on how the bank could help not only poor countries, but also fast-growing emerging economies, Arab states that feel under-served by the institution and nations emerging from conflict.

Recently he reached a compromise with the bank’s 24-member board that increased the bank’s contribution to a fund for its poorest countries with the help of profits from its arm that lends to the private sector, the International Finance Corp (IFC).

The move gives the IFC a bigger role in poor nations while adding a private-sector component to a fund whose main function has been providing loans and grants to countries in dire need of infrastructure.

By contributing $3.5 billion of the bank’s own resources to the International Development Association (IDA), Zoellick has challenged donors to dig deep into their pockets during talks to replenish the fund for the world’s 81 poorest countries from 2009 to 2011.

To ease complaints by emerging countries that the IFC profits should have gone towards finding solutions for undeveloped markets and social needs in their countries, Zoellick cut the bank’s lending rates to emerging markets.

Still, with his background in U.S. trade policy and Wall Street, Zoellick has recognized that the World Bank needs to be more creative to overcome poverty in a more globalized world, which has created opportunities but also increased the divide between rich and poor.

Reuters

EU scraps quota limits for Chinese textile imports

The European Commission and China have agreed to scrap the current quota restrictions on Chinese textiles next year in favour of a monitoring system, the EU’s executive arm said Tuesday.

News of the accord was announced as Beijing came under European pressure elsewhere to allow its currency to trade more freely on foreign exchange markets, amid growing concern that the Asian giant is destablising the global economy.

The textiles quota agreement with Beijing, which expires at the end of this year, was imposed on fears that Chinese imports were swamping the European market.

The quotas will be replaced by a textile import “double checking system” that will track both the issuing of export licences in China and the import of goods into the EU, the EU’s executive arm said.

“I welcome this further step in the cooperation between the EU and China in ensuring a smooth transition to free trade in textiles,” in 2009, EU Trade Commissioner Peter Mandelson said in a statement.

“A system of joint monitoring means predictability for EU producers and traders as well as a clear picture of future developments as we make the final step to free global trade in textiles and clothing,” he added. The arrangement covers eight sensitive product categories: T-shirts, pullovers, trousers, bras, blouses, dresses, bed linen and flax yarn.

The two other items covered by the existing quotas agreement — cotton fabrics and table and kitchen linen — were deemed not to require such a monitoring system as the export volumes are smaller.

The new system, agreed with the Chinese Ministry of Foreign Trade, will be formally adopted by the European Commission in the coming days, the Commission said, and administered by EU Member States. Following the final stage of global liberalisation on January 1 2005, the amount of textile and clothing exports to Europe from China surged, while unit prices dropped.

The EU and China then negotiated a memorandum of understanding in June 2005 capping imports of the 10 key textile products from China at agreed levels until 2008.

France recently called for the quota system to be extended beyond next year. But the new agreement signals an end to China textile quotas. Despite the disappearance of the quota system “there is still the possibility that somebody somewhere would ask for activation of safeguard measures,” Mandelson spokesman Peter Power told reporters.

AFP

Vodafone’s Indian unit ramps up capital spending

The Indian subsidiary of British mobile giant Vodafone has doubled its capital spending to two billion dollars as it seeks to ramp up network coverage in the world’s fastest-growing cellular market.

The capital expenditure rise follows Vodafone Plc’s purchase in March of a majority stake in Hutchison Essar from Hong Kong-based Hutchison Telecommunications International for 11.1 billion dollars.

“Since our entry into India, our capital expenditure has doubled. We are now spending two billion dollars a year,” Vodafone chief executive Arun Sarin said on a visit to the Indian capital where he met Finance Minister P. Chidambaram.

Last month, Vodafone, the world’s leading cellular operator, began using its own name across India, rolling out what it called one of the globe’s biggest rebranding operations in the country of 1.1 billion people.

Vodafone is adding 1.6 to 1.7 million customers a month in the Indian cellular market, which in August grew by more than eight million subscribers to 201 million, making it the fastest expanding in the world.

“Before we came to India, the company was adding 800,000 customers (a month),” Sarin told reporters.

The purchase of the Indian unit is seen as crucial to Vodafone’s profits growth as it contends with saturated cellular markets in the developed world. India’s teledensity — the number of people owning a telephone out of every 100 people — stands at just 21 percent.

Sarin said Vodafone may share its cellular tower facilities with rivals so that network coverage can be rolled out faster. “We are looking at ways to piggyback on each other’s infrastructure to reach out to the masses quickly.”

Vodafone was talking to leading Indian mobile provider Bharti Airtel about sharing infrastructure but no final agreement had been reached, he said.

AFP

China No.2 in billionaires as assets boom

China has more billionaires than any country except the United States, as soaring stock and property prices helped to boost wealth among the country’s super-rich, researcher Rupert Hoogewerf said on Wednesday.

The number of Chinese worth $1 billion or more jumped to 108, from 15 last year, growing much faster than in western countries, Hoogewerf said in his 2007 China “rich list”, which ranks the 800 wealthiest individuals in the country.

The average wealth of those on the list doubled from a year earlier to $562 million. “There’s still plenty of growth opportunity as China’s top entrepreneurs turn their sights to the vast underdeveloped and largely unregulated economic hinterland,” Hoogewerf said.

Yang Huiyan, 25, tops the list after receiving $17.5 billion from her property developer father, the report said, echoing another China rich list published by Forbes magazine on Tuesday.

Last year’s champion, Zhang Yin, fell to second place even as her wealth tripled to $10 billion after a surge in the share price of Nine Dragons Paper (Holdings) Ltd, in which she holds a 72 percent stake.

Zhang, the world’s richest self-made woman, continues to widen the wealth gap with western counterparts such as U.S. television host Oprah Winfrey, eBay Inc founder Margaret Whitman and Harry Potter author J.K. Rowling, according to the report.

In a sign that China’s economic growth is largely driven by construction and manufacturing, rather than by science and technology, seven of China’s 10 richest people are mainly or partly in the real estate business.

Xu Rongmao, owner of Shimao Property Holdings Ltd, ranked number three with $7.5 billion in wealth.

Reuters

Singapore tightens monetary policy

Singapore’s central bank said on Wednesday it would maintain its policy of a “gradual and modest appreciation” in the Singapore dollar, a decision widely expected by the market, but said it would slightly increase the slope of its policy band.

“MAS will continue with the policy of a modest and gradual appreciation of the S$NEER policy band in the period ahead. However, we will increase slightly the slope of the S$NEER policy band,” the Monetary Authority of Singapore (MAS) said in a twice-yearly monetary policy statement.

All economists polled by Reuters had expected the MAS to maintain its three-and-a-half-year-old moderately tight monetary policy to keep a lid on inflation as asset prices spiral higher in a booming economy and after a sales tax increase in July.

However, some economists polled last week believed the central bank’s meeting in April next year could bring a policy change, citing concerns over inflation and the possibility of the economy overheating.

Singapore’s gross domestic product expanded at an annualised rate of 14.4 percent in the second quarter, its fastest growth in two years.

The MAS said it expected inflation in a 1.5 to 2 percent range in 2007, up from its previous forecast of 1 to 2 percent. The annual inflation rate reached 2.9 percent in August, its highest in 12 years.

Reuters