The Complete story of Who benefited and who lost in this recession

Thursday, May 14, 2009

global-economyA look at economic developments around the globe

A look at economic developments and stock market activity around the world Thursday:

TOKYO — Electronics giant Sony Corp. reported its first annual net loss in 14 years and forecast a bigger loss this year, saying the pressure from sliding sales, competition in gadget prices and a strong yen was expected to continue. Meanwhile, Sanyo Electric Co., which is being acquired by larger Japanese rival Panasonic Corp., reported an annual loss because of declining sales, the strong yen and rising material costs, but expects to muster a small profit this fiscal year.

Separately, Japanese electronics giant NEC Corp. said it will withdraw from a government-led project to produce a next-generation supercomputer, citing falling profits amid the global economic crisis. The decision could deal a major setback for Japan’s ambitious plan to develop a supercomputer that is much faster than the current leader. Hitachi, who was working on NEC’s contract for the project, will also have to pull out.

Japan’s benchmark Nikkei 225 stock average slumped 246.76 points, or 2.6 percent, to 9,093.73, and Hong Kong’s Hang Seng tumbled 517.93 points, or 3 percent, to 16,541.69.

Elsewhere in Asia, South Korea’s Kospi shed 2.4 percent to 1,380.95. Australia’s benchmark fell 3.4 percent, Shanghai’s index lost 0.9 percent and Taiwan’s stock measure shed 1.8 percent. India’s Sensex fell 1.2 percent as the country’s monthlong election ended.

LONDON — Telecommunications company BT Group PLC said it expects to cut another 15,000 jobs in the next year after its Global Services division dragged the company to a fourth quarter loss of nearly 1 billion pounds.

Meanwhile, a new survey provided further signs of a pickup in the British housing market. The number of new mortgages jumped by 29 percent in March from February, but was still 33 percent lower than last year.

The FTSE 100 index of leading British shares gained 31.21 points, or 0.7 percent, to 4,362.58.

HONG KONG — Bank of America Corp. sold part of its stake in China Construction Bank for some $7.3 billion as the U.S. lender seeks to raise billions more to help withstand the recession. The U.S. bank unloaded more than 13.5 billion shares, or a nearly 6 percent stake, in China Construction, the Chinese company told the Hong Kong stock exchange.

BERLIN — General Motors’ subsidiary Opel, threatened by a likely GM bankruptcy, may need more than €1 billion in credit to tide it over while it seeks a new partner, the head of the automaker’s European unit was quoted as saying.

However, German carmaker BMW AG said that starting in June it would resume two shifts a day at its Leipzig plant, where it had reduced production to one shift in November to adjust to weaker demand. At the company’s annual general meeting in Munich, company executives said it was reacting to strong demand for the BMW 1 series of sedans and had plans to build the BMW X1 SUV at the plant.

Meanwhile, the German government’s tax revenue is expected to fall more than €300 billion short of previous estimates through 2012 as the economic crisis weighs on growth, the Finance Ministry said.

Germany’s DAX rose 10.86 points to close at 4,738.47.

BRUSSELS — The European Union’s top economy official warned that heavy government spending to deal with the economic crisis may eventually force Europe to cut back its expensive social safety net.

Separately, European car sales fell 15.9 percent over the first four months of the year as the recession curbed demand, with only Germany recording sizable gains due to government incentives, the European auto makers association ACEA said.

Meanwhile, Belgium’s KBC bank received from the government a €22.5 billion guarantee on potential losses as it posted a €3.6 billion first quarter loss, due to write-downs on asset-backed securities. The Belgian federal government said the sum includes the option to recapitalize the bank with up to €2 billion. KBC said it would also call in the Flemish regional government’s offer of an extra €1.5 billion cash infusion.

PARIS — French bank Credit Agricole SA said its net profit fell 77 percent in the first quarter as the financial crisis weighed on its asset management, insurance and private banking activities.

Separately, the International Energy Agency said oil consumption will this year fall at the sharpest pace since 1981 due to the crisis afflicting world economies, and it cut its forecast for crude demand for the ninth month in a row. It now expects global oil demand to fall 3 percent to 83.2 million barrels a day this year.

France’s CAC-40 rose 3.39 points, or 0.1 percent, to 3,156.29.

MADRID — Spain’s once buoyant economy contracted by 1.8 percent in the first quarter and shrank by 2.9 over the past 12 months, the National Statistics Institute said.

LAGOS, Nigeria — Nigerian rebels said they hijacked an oil industry ship and were holding 15 foreign sailors hostage, and demanded that all oil workers leave the southern Niger Delta by Saturday.

SINGAPORE — Singapore Airlines Ltd. said its January-March profit plunged 92 percent as travelers cut down on trips amid a global economic slowdown.

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