The Wall Street Journal Asia No. 129 dated Friday-Sunday, March 4-6, 2011

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Friday - Sunday, March 4 - 6, 2011

ASIA

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UBS loses another top Asia banker BY NISHA GOPALAN AND JOANNE CHIU

Reuters

Demonstrators in Cairo shouted slogans Thursday calling for Prime Minister Ahmed Shafiq to quit. His resignation was announced by the military later in the day.

Egypt replaces PM as protests go on Egyptian Prime Minister Ahmed Shafiq resigned Thursday and was succeeded by a U.S.-educated engineer, a bid By David Luhnow and Matt Bradley in Cairo and Joe Parkinson in Manama, Bahrain by the country’s military rulers to placate a protest movement that continues to de-

High drama

mand deeper change after the ouster of the former president, Hosni Mubarak. The resignation of Mr. Shafiq, who had been appointed by Mr. Mubarak in the dying days of his regime, highlights the startling staying power of pro-democracy protest movements not only in Egypt but also elsewhere in the region—movements led by young people who are insist-

Opinion The Iranian regime’s ongoing repression deserves the same kind of condemnation being meted out to Gadhafi. Page 11

the protesters were calling for the same thing: That caretaker governments, charged with leading the countries until new elections, be swept clean of remnants of the previous regimes in order to ensure a smooth transition to democracy. Elsewhere, pro-democracy protesters seem to be digging in for the long haul. In Bahrain, opposition groups on

Australia’s Gillard faces test during visit to U.S. BY ENDA CURRAN

When Willie Revillame left one of the Philippines’ two biggest television networks for an upstart, he shook up one of the biggest TV-ad markets among emerging economies. Page 8

ing on real rather than cosmetic changes from their leaders. The move came only days after protests in Tunisia forced the resignation of interim Prime Minister Mohammed Ghannouchi, a longtime member of the government of Zine al-Abidine Ben Ali, the president toppled by protesters in January. In both Tunisia and Egypt,

CANBERRA—Australian Prime Minister Julia Gillard expects to discuss China’s growing might and the situation in Afghanistan with President Barack Obama next week during a U.S. visit as she battles perceptions of foreignpolicy weakness at home. In an interview Thursday, Ms. Gillard said she will push for greater defense cooperation between the two longtime allies, in her first state visit to the U.S. since she became prime minister last year. “We have a strong and enduring defense partnership, so I do anticipate that a major feature of my discussions

with President Obama will be something the world is reour shared mission in Afghan- sponding to. Obviously istan, as well as our defense China’s rise does also cause cooperation in the discussion of its rise modern age,” she as a military power, said. and those discusThe unfolding posions will continue,” litical turmoil in the Ms. Gillard said. Middle East, where Ms. Gillard is set Australia has pledged to meet with Mr. its support to United Obama on Monday Nations sanctions on the nine-day against Libya’s revisit, which begins gime and to any furSaturday. She is also ther international rescheduled to meet sponse, is expected with U.S. Secretary Julia Gillard to be a major issue. of State Hillary ClinDealing with the growing eco- ton, Treasury Secretary Timonomic and military power of thy Geithner and Federal ReChina will also be on the serve Chairman Ben agenda, she said. Bernanke. She is also ex“China’s rise obviously is Please turn to page 14

Thursday officially submitted demands to the island kingdom’s ruling al-Khalifa family that included the introduction of a constitutional monarchy and the dissolution of the government. The ruling family has offered a series of concessions Please turn to page 13
Gadhafi holds refinery ......... 12
Bahrainis list demands ........ 13

HONG KONG—UBS AG lost one of its top Asia deal makers to Bank of America Merrill Lynch, the latest in a series of defections that has rivals hoping they can dethrone the region’s longtime No. 1 bank. The investment-banking arm of Bank of America Corp. said Thursday that it named UBS banker Matthew Koder as head of global corporate and investment banking for the Asian-Pacific region, a newly created role. Mr. Koder has nearly 20 years of experience in investment banking and capital markets and most recently worked with UBS for eight years as head of global capital markets, a position that included initial public offerings, debt offerings and other fund-raising activities around the world. Mr. Koder is one of the biggest names in a series of departures from the Swiss bank over the past year. He Please turn to page 14

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THE WALL STREET JOURNAL.

Friday - Sunday, March 4 - 6, 2011

PAGE TWO

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What’s News—

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Business & Finance n The ECB’s Trichet signaled the central bank could raise interest rates next month for the first time since the worst of the financial crisis in 2008. He warned that “strong vigilance” is required to ensure that a rise in commodity prices doesn’t translate into a generalized increase in inflation. 3 n U.S. stocks gained on a strong reading on employment and a drop in the price of oil. Asia was led higher by a rebound in South Korean shares. 23

Technology: What the iPad 2 means for Asia component makers. 15

n Sony has whittled its yen exposure to the dollar to “virtually zero” by shifting manufacturing out of Japan to China, the company’s corporate treasurer said. 15 n A consortium from Japan and South Korea plans to pay $1.95 billion for a stake in a Brazilian miner that specializes in a metal used in high-grade steel. 16

n The U.K. gave provisional approval to News Corp.’s proposed takeover of BSkyB after the media company agreed to spin off BSkyB’s 24-hour news channel. 18 n U.S. retailers posted solid sales for February as fuller-priced clothing and winter-clearance merchandise both moved well. 17 n Myanmar halted rice exports to keep local prices in check as nations remain jittery about global food prices, which the U.N.’s food body said rose 2.2% in February. 4 n Itochu agreed to buy U.K. autorepair business Kwik-Fit from a European private-equity firm for $1.04 billion. 19 n Surging inflation and interest in trading Mongolia’s currency are challenges facing the Bank of Mongolia, a top official said. 4

Business & Finance: A homecoming for Citigroup’s Pandit. 20

Reuters

n BP said it won’t pay bonuses for 2010 to top executives who had responsibility for operations in the Gulf of Mexico during last year’s well disaster. 16

A paramilitary policeman salutes in Tiananmen Square after the opening of the 11th National Committee of the Chinese People’s Political Consultative Conference, which runs until March 13. Jia Qinglin, a senior Communist Party official, said the delegates would ‘actively yet prudently’ continue to oversee China’s economic development, Xinhua reported. n Hedge-fund manager John Paulson, who made his name betting against subprime mortgages in 2007, is the latest high-profile investor to expand into Asia. 15 n Citic Pacific said profit rose 50% in 2010 on improved specialsteel sales and asset disposals. 18

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World-Wide n A heavy military presence could be seen near the Libyan city of Zawiya, as armed antiregime protesters remained holed up in the city. In Bahrain, opposition groups submitted demands to the ruling family that included dissolution of the government. 12, 13

n The Philippines sent two military aircraft to disputed waters in the South China Sea after a Philippine oil-exploration vessel said it was confronted by two Chinese patrol boats. 3 n The IMF said it will lower its growth forecast for New Zealand, as rescuers gave up hope of finding any more quake survivors. 5 n German authorities were probing links between the suspect in the shooting of two U.S. servicemen in Frankfurt and a number of radical Islamist groups, but believe he acted on his own. 7 n Muhammad Yunus challenged the legality of a Bangladeshi gov-

ernment order dismissing him as the head of the microfinance bank he founded. 5 n Philanthropist Bill Gates warned that the high costs of U.S. health care and pensions for state employees take away funds needed for schools. 6 n Thirteen people died in a highway ambush and a car bomb attack targeting security forces in Pakistan’s northwest. n A Pakistani court said it would proceed with the trial of an American CIA contractor arrested for shooting and killing two Pakistanis, but held off on charging him, lawyers for both sides said.

Markets: Battered bonds are a blemish for Berkshire. 21

ONLINE TODAY Most read in Asia

1. Apple’s Showman Takes the Stage 2. Libya Rebels March West as Fronts Firm 3. Terrorism Eyed in Frankfurt Shootings 4. West Cools on Libya No-Fly Zone

Japan Real Time

blogs.wsj.com/japanrealtime

Photo Journal

A new class of ‘Hayabusa’ trains will come into service on the high-speed route between Tokyo and Aomori.

blogs.wsj.com/wealth

Developers are betting more than $240 million on appealing to China’s new rich who want to identify with European aristocracy.

Most emailed in Asia 1. Why the Dollar’s Reign Is Near an End 2. Apple’s Showman Takes ... 3. Opinion: The Decline of U.S. Naval Power 4. Hong Kong Offers Cash Handouts

Wealth Report

Check out the photos behind the stories making news at: blogs.wsj.com/photojournal

Heard on the Street: China’s auto industry is in a growth shift. 28 THE WALL STREET JOURNAL ASIA Dow Jones Publishing Company (Asia) 25/F, Central Plaza, 18 Harbour Road, Hong Kong Tel 852-2573 7121 Fax 852-2834 5291 www.wsj-asia.com SUBSCRIPTIONS and Address Changes, please telephone our local customer service hotline, Hong Kong/Taiwan: 852-2831 2555; Beijing: 86-10 6581 4090; Shanghai: 86-21 5836 8228; Indonesia: 62-21 527 7592; Japan: 81-3 6269-2760; Korea: 82-2 756 1695; Malaysia: 60-3 2026 4061; Philippines: 63-2 848 5873; Singapore: 65-6415 4000; Thailand: 66-2 652 0871; India: 91-11 6462 0215. Or email: [email protected] ADVERTISING SALES worldwide through Dow Jones International. Hong Kong: 852-2831 2504; Singapore: 65-6415 4300; Tokyo: 81-3 6269-2701; Frankfurt: 49 69 29725390; London: 44 207 842 9600; Paris: 33 1 40 17 17 01; New York: 1-212 659 2176. Or email: [email protected] Trademarks appearing herein are used under license from Dow Jones & Company. USPS 337-350ISSN 0377-9920

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WORLD NEWS

LONDON—European Central Bank President Jean-Claude Trichet Thursday signaled that the central bank could raise interest rates next month for the first time since the darkest days of the financial crisis in 2008. Mr. Trichet warned that risks of inflation in the euro zone “are to the upside” and that “strong vigilance” is required to ensure that a recent rise in commodity prices doesn’t translate into a generalized increase in inflation. “It is essential that the recent rise in inflation does not give rise to broad-based inflationary pressures over the medium term,” Mr. Trichet said at a news conference following the ECB’s governing council meeting. An increase in official interest rates next month “is possible,” he said. For the first time in years, Mr. Trichet omitted saying in his introductory statement that current interest rates are “appropriate,” and he added that the ECB’s policy stance was “very accommodative,” instead of merely “accommodative.” The ECB left all of its interest rates unchanged for the 22nd consecutive month at its governing council meeting earlier Thursday. The euro surged against the dollar, rising to $1.3940 against the dollar from $1.3835 before Mr. Trichet’s comments. Short-term German government bond prices fell

and euro money-market rates spiked as markets adjusted to the possibility of an impending rate hike. Mr. Trichet’s language represented a major sharpening of rhetoric from last month’s news conference, reflecting heightened concerns that uprisings in the Arab world may lead to a sustained period of high oil prices, squeezing inflation higher for a longer period than at first expected. Mr. Trichet said the central bank for the 17 countries sharing the euro will continue to lend as much as euro-zone banks want for at least another three months. That indicated that the ECB was still aware that higher interest rates could tip some of the euro zone’s weaker banks—or even governments—into insolvency. The central bank has taken a darker view of the inflation outlook, raising its inflation forecast this year by half a percentage point to 2.3%. It raised its 2012 forecast for inflation even more sharply to 2.2% from 1.5%. The ECB’s goal is to keep inflation at close to, but below, 2% in the medium term. The words “strong vigilance” have, when used by Mr. Trichet in the past, signaled an imminent increase in official interest rates. However, Mr. Trichet said the bank would stick to the “fixed-rate, full allotment” regime for its oneweek and one-month lending operations “for as long as is necessary,” and said the three-month operations

Filipino run-in fuels sea tension BY JAMES HOOKWAY The Philippines’ armed forces sent two military aircraft to the disputed waters of the South China Sea after a Philippine oil-exploration vessel said it was confronted by two Chinese patrol boats, Philippine officials said Thursday. The run-in, which took place Wednesday, is the latest incident to complicate the delicate balance of power in the waters, which are claimed in whole or part by China, the Philippines, Vietnam, Malaysia, Brunei and Taiwan. Last year, relations between Vietnam and China deteriorated badly after Vietnamese fishing vessels were apprehended by Chinese vessels in waters that China claims as its own. Beijing, meanwhile, was angered last year when U.S. Secretary of State Hillary Clinton told a regional security forum in Hanoi that a peaceful, multilateral resolution of the competing territorial claims in the South China Sea was in America’s interest. The waters straddle some of the world’s busiest shipping lanes and rich fish stocks. In addition, they are believed to lie atop substantial oil and natural-gas reserves. The latest incident involving China and the Philippines underscores the sensitivity of the resource-rich area, especially as the Philippines in recent months has been trying to improve relations with China.

In December, Philippine President Benigno Aquino III chose not to send a representative to the ceremony awarding the Nobel Peace Prize to Chinese dissident Liu Xiaobo. Mr. Aquino said at the time his decision was part of a diplomatic effort to save the lives of three Filipinos facing the death penalty in China for allegedly trafficking drugs. Their executions, scheduled for February, were postponed. Philippine Lt. Gen. Juancho Sabban, though, told the Associated Press Thursday that if the Philippines felt its territory was being violated, it would push back. “It’s clearly our territory,” Lt. Gen. Sabban said. “If they bully us, well, even children will fight back.” A news office official at China’s Foreign Ministry declined immediate comment. Lt. Gen. Sabban said Wednesday’s incident occurred on the Reed Bank near the Spratly Islands, which both the Philippines and China claim along with other countries. Officials from the Philippines say the Reed Bank is well within Philippine territory, but when an oil exploration vessel began preparation to probe the geological potential of the area, it was warned off by two Chinese patrol boats. Gen. Sabban said he then dispatched an OV-10 light bomber plane and Islander light aircraft to scan the area, but Chinese vessels had left the area by the time the Philippine planes arrived.

ECB head Jean-Claude Trichet said in Frankfurt Thursday that euro-zone interest rates could rise as early as next month. would also be “full allotment” for the next quarter. The three-month operations for the next quarter will be indexed to the rate on the weekly operations

over the respective period. Mr. Trichet repeated that the ECB, as it tightens monetary policy, can differentiate between its “conventional” policy tools, such as in-

terest rates, and its “unconventional” tools, such as the unlimited-lending policy. —Nina Koeppen in Frankfurt contributed to this article.

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Associated Press

Trichet flags chance of ECB rate rise

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Friday - Sunday, March 4 - 6, 2011

WORLD NEWS: ASIA

Myanmar puts lid on its rice exports SINGAPORE—Myanmar halted rice exports to keep local prices in check, a senior industry official said Thursday, as the country grapples with a bruising new round of inflation. The halt wasn’t expected to create major dislocations in the market for Asia’s most-important food, in large part because Myanmar isn’t a main exporter of the crop. Still, it underscored that governments remain jittery about the cost of food, which helped to trigger the unrest in the Middle East. Economists are particularly wary of the possible proliferation of agricultural export bans, for fear they could propel prices even higher on international markets. The steps are popular with some governments when food costs are rising, as they are now, because they help ensure an adequate local supply, keeping domestic prices lower. But they also often lead to higher costs elsewhere as buyers are forced to find new sources.

Economists are wary of agricultural export bans, for fear they could propel global prices even higher. A round of export bans in 2008 helped to contribute to a dramatic spike in food prices that year, while a Russia ban on wheat exports last summer likewise helped to send prices of that crop climbing. According to the United Nations Food and Agriculture Organization, world food prices in February were up 2.2% from January—the eighth monthly rise in a row—to the high-

est level in real and nominal terms since the agency started monitoring prices in 1990. And volatility in oil prices, the FAO warned, could push its index even higher. Global cereal supplies are also expected to tighten sharply this year due to low stock levels. Myanmar remains a relatively small player in the global rice trade, exporting up to a million tons a year in a global export market of about 30 million tons. Rice prices have stayed relatively low compared with other grains this year, and traders don’t currently expect the crop’s export powerhouses, including Thailand and Vietnam, to announce major limits on their exports. Global rice supply is ample because of large crops in Vietnam and Thailand, said Chookiat Ophaswongse, managing director of leading Thai exporter Huaychuan Rice Co. Mr. Chookiat said Thailand is expecting a record secondary rice crop of two million tons next month, after producing a larger primary crop in December, while Vietnam’s rice production is likely to be a record 25 million tons this year. The two countries together account for close to 50% of the global rice trade. Myanmar’s move nevertheless reflects stresses in that poor nation of 50 million people, whose military-backed government is accused of widespread human-rights violations and which has long been afraid of the risk of popular revolts. Higher consumer prices helped to trigger massive monk-led protests there in 2007, which the military brutally suppressed. Traders said Myanmar’s ban came after local prices of some rice grades there rose by around 15% last month, partly due to an increase in fuel prices. Higher fuel and transportation costs, with diesel prices rising by more than 40% in the past three weeks, have pushed up the

Growing problem Global grain prices have risen for eight months in a row 260 Cereal price index 240 220 200 180 160 140 2009

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A rice mill in the Indian state of Tripura price of grain, said a Yangon-based commodities trader. The ban on Myanmar exports took effect Feb. 25 and will continue till at least the end of April, said a member of the Myanmar Rice Industry Association’s executive committee. It wasn’t possible to reach anyone with the Myanmar government, which rarely speaks to foreign journalists. The ban means that this month’s planned shipment of close to 90,000 metric tons of rice to Bangladesh and African countries will be delayed until Myanmar decides to resume exports, traders said. Its grain is among the cheapest in the world, with the popular 25% broken grade last offered around $400 to $410

Japan investment rises BY TAKASHI NAKAMICHI TOKYO—Business investment in Japan posted its second straight quarter of increase, suggesting that improving corporate activity may help solidify the economic recovery in the months ahead. Business investment rose 3.8% from a year earlier in the OctoberDecember quarter, the government said on Thursday. The gain in capital investment—a pillar of domestic demand that accounts for 15% of gross domestic product—comes despite a fourth-quarter contraction in the overall economy caused by weak exports. Signs of resilience in investment could add to the sense of optimism that the winter slump is temporary and the economy will return to a recovery track from the current quarter. The figures showed that overall corporate performance is improving and capital expenditure appears to be staying relatively strong, a ministry official told reporters after the numbers came out. The latest data from the Finance Ministry follows a 5% on-year rise in capital investment in the July-September period, the first increase in three years. The survey also showed that corporate pretax profits rose by 27.3%

On the mend? Japan’s business investment in plant and equipment, change from a year earlier 20% 10 0 -10 -20 -30

2007

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Source: Ministry of Finance

in October-December. Corporate sales were up 4.1% from a year earlier, the ministry said. Although Japan’s deepening political impasse is threatening to disrupt the government’s economic policy steps in the coming months, analysts generally expect the export-led economy to resume growth from the current quarter, helped by solid demand in Japan’s major trade partners such as the U.S. and China. The government will use the quarterly survey to fine tune fourthquarter economic data. In the initial gross domestic product release last month the government said the

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Source: Food and Agriculture Organization of the United Nations

Reuters

BY SAMEER MOHINDRU AND CELINE FERNANDEZ

economy contracted at a 1.1% annual rate in the October-to-December quarter. Revised figures are due out March 10. Mizuho Research Institute economist Yusuke Ichikawa said the business investment figures suggest there will be no major adjustment to the GDP figures, which are “likely to remain unrevised.” But Yoshimasa Maruyama, senior economist at Itochu Corp., said the figures point to a downward revision to a minus 1.4% annualized rate and also suggest modest growth in 2011. “Capital expenditure will likely continue to increase in the months ahead, but its growth probably won’t accelerate much,” said Mr. Maruyama. Toshihiro Nagahama, chief economist at Dai-Ichi Life Research Institute, also said a downward revision to GDP now appears more likely, suggesting a revision to a range between -1.7% and -1.9%. The figures showed the rise in capital spending was confined to manufacturers, which posted a 13% gain, while non-manufacturers cut spending by 0.5%. Profit growth, meanwhile, was stronger among nonmanufacturers, which saw profits rise 31.6% compared with a 27.3% increase in the manufacturing sector.

per ton. The country shipped close to 200,000 tons of rice from the current crop before the export ban took effect. One trader said even shipments under licenses that were issued earlier are uncertain and exporters may have to declare a force majeure on some of the shipments. Such a declaration offers legal protection to suppliers in case they can’t guarantee deliveries. The ban isn’t expected to have much impact on global prices, however, as buyers in Africa and Bangladesh can get rice from other sources at only slightly higher prices. Vietnam’s 25% broken rice is currently offered at around $420 a ton, while the same grade of Thai rice is offered at close to $470 a

ton. The export ban has already had an impact on domestic prices, though. The cost of a 20-kilo bag of lower-quality grain has declined by 1,000 Myanmar kyat ($153) to 12,600 kyat since last week, though prices of medium and high-quality grades continue to remain high, traders said. Myanmar’s rice exports in 2010 were down by nearly half from 2009, to 500,000 tons from 900,000 tons, according to estimates by the International Grains Council. Myanmar temporarily halted rice exports in January 2010 and the pace of issuing licenses was slow even after shipments resumed. —Caroline Henshaw contributed to this article.

Mongolia faces rise in currency trading BY JAMES T. AREDDY ULAN BATOR, Mongolia—Surging inflation and interest in trading the nation’s currency, the togrog, are key challenges facing the Bank of Mongolia, a top central banker said Thursday. The economic costs of inflation— “our biggest enemy”—are well understood by the central bank, said Deputy Gov. N. Zoljargal. In an interview after speaking on a panel here, he said a primary central-bank mission is to manage confidence in the currency. As the profile of the togrog rises with traders, he said, the policy is “don’t fight the trend,” but ensure it happens smoothly. The togrog was among the world’s strongest currencies in 2010, gaining as the economy rebounded from the global financial crisis and amid expectations copper and coal mining will sustain the trend. Speaking at the same conference, Mongolia President Ts. Elbegdorj said the government’s job is to ensure the mine sector creates an economic foundation, including creating employment. He said the government is considering new min-

ing regulations, but wasn’t specific. The International Monetary Fund mission chief in Mongolia, Steven Barnett, who spoke on the same panel as the central banker, said the flexibility of the currency system is acting like a shock absorber and is “working very, very well.” Mr. Barnett, however, reiterated the IMF estimate that inflation is heading toward 20% without more fiscal restraint. The central-bank deputy said intervention by the Bank of Mongolia in the currency market has been almost nonexistent this year, as the business community grew to trust the policy would be aimed to smooth the currency appreciation. “The market takes you to the wrong direction when they don’t trust you,” he said. Mr. Zoljargal said monthly currency-market flows, about $400 million early in 2010, surged past $1 billion by August and hit $1.5 billion by year-end. “To manage it is an art, believe me,” he said. He said the flows remain high but there has been less upward pressure on the currency. He put foreign-exchange reserves at $2.3 billion.

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THE WALL STREET JOURNAL.

WORLD NEWS

IMF set to cut New Zealand forecast SYDNEY—The International Monetary Fund said Thursday it expects to lower its growth forecast for New Zealand, in a blow to the Pacific nation’s economy, on the same day rescuers gave up hope of finding survivors in the rubble of the earthquake-ravaged city of Christchurch. The IMF said it will send a delegation to New Zealand next week as part of its review of the economy. “That projection will take account of reconstruction work and other factors supporting growth,” the fund said. The IMF’s comments come as New Zealand search-and-rescue teams move into a recovery phase, as officials say there is no longer any hope of finding anyone alive after an earthquake devastated the country’s second-largest city Feb. 22. The last live rescue was Feb. 23. The death toll from the 6.3 magnitude earthquake now stands at 161. Traders said the IMF statement knocked the New Zealand dollar off its intraday high of 74.50 U.S. cents. The currency, known as the kiwi, later bounced back to 74.56 U.S. cents late Thursday in Wellington. Prime Minister John Key has estimated a 15 billion New Zealand dollar (US$11.1 billion) blow to gross domestic product from the tremors that have destroyed large areas of Christchurch. The IMF’s most recent forecast for New Zealand was for real gross

Agence France-Presse/Getty Images

BY ENDA CURRAN

A recovery-team member works in the rubble of a building in Christchurch, New Zealand, on Thursday. domestic product growth of around 3%. The fund’s plan to downgrade growth—even after factoring in spending on rebuilding, income from the coming Rugby World Cup and higher prices for agricultural

Laureate Yunus challenges dismissal Associated Press

DHAKA, Bangladesh-—Nobel laureate Muhammad Yunus challenged the legality Thursday of a Bangladeshi government order dismissing him as the head of the microfinance bank he founded. Nine members of Grameen Bank’s board of directors backed Mr. Yunus, an outspoken government critic, by filing a separate petition to the High Court, said his lawyer, Sara Hossain. The court heard arguments Thursday and said it would rule on Sunday. Bangladesh’s central bank ordered Mr. Yunus out of the bank Wednesday, arguing that the 70year-old had violated a law that makes retirement at age 60 mandatory. Grameen said it was exempt from the rule and Mr. Yunus would remain in his post. The government owns a 25% stake in the bank, which gives small loans to the poor. The remainder of the bank is owned by its borrowers. Mr. Yunus said outside the court Thursday that he is interested in handing his job to a successor. “I, too, want to quit, but it has to be done honorably,” he said. “If I’ve to leave because of malice then people will lose faith on Grameen Bank. I don’t want that to happen.” The demand for Mr. Yunus’s removal as Grameen’s managing director caps a string of problems. Mr. Yunus has long had frosty relations with Prime Minister Sheikh Hasina, who has publicly criticized Grameen Bank, saying its interest

rates are too high. The move to oust Mr. Yunus from Grameen has sparked criticism from foreign donors. “We are deeply troubled by the process here that is trying to remove Prof. Yunus,” U.S. Ambassador James F. Moriarty said after meeting with Finance Minister Abul Mal Abdul Muhith on Thursday. “It is an unusual way to handle a Nobel laureate who is considered outside the country as one of the greatest Bangladeshis,” he said. Mr. Muhith defended the government’s decision. “We know very well it would tarnish our image globally,” Mr. Muhith told reporters. “We had to do it in line with the law of the land.” Mr. Muhith said Mr. Yunus’s removal won’t harm Grameen. Mr. Yunus founded the bank three decades ago, pioneering the concept of reducing poverty by making tiny loans to the poor. His work, which spurred a boom in such lending across the developing world, earned him and the bank the 2006 Nobel Peace Prize. Recently, Mr. Yunus has been under pressure at home. In addition to his legal troubles, Prime Minister Sheikh Hasina has accused Grameen Bank and other microfinance institutions of charging high interest rates and “sucking blood from the poor borrowers.” Efforts to remove Mr. Yunus from Grameen has intensified in recent weeks. Grameen Bank, founded in 1983 in Bangladesh, currently has nearly nine million borrowers, 97% of whom are women.

commodities—will come as a blow to those hoping for a quick rebound. To be sure, the IMF said the government has fiscal room to maneuver, something that could take pressure off the country’s credit rating. The impact on the government’s

budget is buffered by sizable reinsurance offshore and the assets of the state-owned Earthquake Commission, the IMF said. Moreover, New Zealand has relatively low net public debt by advanced countries standards, giving

it some fiscal space to deal with such shocks,” the IMF said. New Zealand’s public debt stood at 15% of GDP at the end of June. Authorities have estimated damage from the two major earthquakes that hit Christchurch since September at up to NZ$20 billion, or 10% of GDP. The IMF’s statement will add to pressure on ratings agencies to adjust their views on New Zealand’s central bank, which is widely expected to cut rates in its next board meeting statement March 10. Thus far, the Reserve Bank has only once moved between meetings, when it made a half-point cut shortly after the U.S. terrorist attacks on Sept. 11, 2001. Moody’s Investors Service said last week that it would “await a fuller assessment of the long-term effects on government finances.” Moody’s rates New Zealand with a top grading and a stable outlook. The possibility of a move by the ratings agencies “has got to be rising,” said Roland Randall, strategist at TD Securities in Singapore, adding that with a weakened economy, New Zealand doesn’t have the ability to tax heavily, pushing the likely return to surplus further into the future. “It’s a pretty simple equation that it will push out the return to surplus,” he said. —James Glynn in Sydney and Rebecca Howard in Wellington, New Zealand, contributed to this article.

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6

THE WALL STREET JOURNAL.

Friday - Sunday, March 4 - 6, 2011

WORLD NEWS: U.S.

Poll reveals spending-cuts dilemma BY NEIL KING JR. SCOTT GREENBERG

AND

WASHINGTON—Fewer than a quarter of Americans support making significant cuts to Social Security or Medicare to tackle the U.S.’s mounting deficit, according to a new Wall Street Journal/NBC News poll, illustrating the challenge facing lawmakers who want voter buy-in to alter entitlement programs. In the poll, Americans across all age groups and ideologies said by large margins that it was “unacceptable’’ to make significant cuts in entitlement programs to reduce the deficit. Even tea-party supporters, by nearly 2-1, declared significant cuts to Social Security “unacceptable.” At the same time, a majority supported two specific measures that lawmakers might employ to shore up the shaky finances of the main entitlement programs. More than 60% of poll respondents supported reducing Social Security and Medicare payments to wealthier Americans. And more than half favored bumping the retirement age to 69 by 2075. The age to receive full benefits is 66 now and is scheduled to rise to 67 in 2027. Depending on how they are structured, those two changes could eliminate as much as 60% of Social Security’s underfunding, according to experts. Support for the two ideas in the poll is “impressive,” said Chuck Blahous, one of the program’s public trustees and a former Bush administration official. “I wonder if [public] receptivity is increasing.” The poll comes as Republican lawmakers, many elected on promises to slash spending, have focused mostly so far on cuts to nondefense, discretionary programs. But many political leaders say meaningful deficit reduction can’t be accomplished without changing entitlement programs. A small group of senators in both parties have begun discussions that include changes to entitlement programs, as well as to the tax code. House Republicans say they will address entitlements in their next budget. Several likely 2012 GOP presidential candidates have vowed to shore up Social Security and Medicare. But Republican Bill McInturff and Democrat Peter Hart, the pollsters who conducted the survey, said the poll raises warning signs for anyone

Findings from the latest WSJ/NBC news poll Top priorities

Reducing the deficit

What two items should be the top priority for the federal government? JOB CREATION AND ECONOMIC GROWTH

Which of the following programs do you think could be cut significantly? Mostly or totally unacceptable

56%

THE DEFICIT AND GOVERNMENT SPENDING

40%

HEALTH CARE

28%

Totally or mostly acceptable

SUBSIDIES TO BUILD NEW NUCLEAR POWER PLANTS

40%

57%

FEDERAL ASSISTANCE TO STATE GOVERNMENTS

45%

52%

NATIONAL SECURITY AND TERRORISM

20%

THE ENVIRONMENTAL PROTECTION AGENCY

46%

51%

ENERGY AND THE COST OF GAS

20%

MEDICARE

76%

23%

K THOUGH 12 EDUCATION

77%

22%

SOCIAL SECURITY

77%

22%

THE WARS IN IRAQ AND AFGHANISTAN

13% 12%

IMMIGRATION

Medicare, social security and other alternatives to cut the deficit Will it be necessary to cut Medicare to significantly reduce the deficit?

Not sure 28% Yes 18%

Will it be necessary to cut Social Security to significantly reduce the deficit?

No 54%

Not sure 29% Yes 22%

No 49%

If the deficit can’t be eliminated by cutting wasteful spending, which of these do you favor?

CUT IMPORTANT PROGRAMS

Feb. 2011 June 1995

RAISE TAXES

27% 23%

POSTPONE ELIMINATION OF THE DEFICIT

35%

33%

26%

37%

Source: WSJ/NBC News polls

proposing cuts to the three main entitlement programs, including Medicaid, that provide health and retirement benefits to seniors and the poor. The programs, which already make up 41% of federal spending, are expected to balloon in coming years. Mr. McInturff called the poll “a huge flashing yellow sign for Republicans on how much preparation will be needed if they propose to change Social Security and Medicare.” Asked directly if they thought cuts to Medicare were necessary to “significantly reduce” the deficit, 18% of respondents said yes, while 54% said no; the rest weren’t sure or had no opinion. On Social Security, 22% said cuts would be needed, while 49% said they wouldn’t. The results can’t be compared easily with prior polling, but they suggest durability to the support for entitlement programs. In 1995, when Congress was considering cuts to Medicare, 36% said in a Journal/NBC poll that they supported a plan to cut Medicare spending and devote the money to deficit reduction. Some 52% called for maintaining Medicare

at its existing level. The new poll found pessimism about the economy and the country’s direction. Only 29% thought the economy would improve over the next year, an 11-point drop since last month and the lowest since August. “This is a country that refuses to feel better,” said Mr. McInturff. Mr. Obama’s job approval fell to 48% from 53% last month but was higher than at any time since May. Some 46% disapproved of his job performance. Mr. Hart, the Democratic pollster, said that until the unemployment rate falls significantly, “it is always going to be a struggle for the president to get majority support.” As a snapshot of public opinion, the poll highlights some of the perils ahead for Republicans as their core voters and tea-party supporters demand big spending reductions. More than seven in 10 tea-party backers feared GOP lawmakers wouldn’t go far enough in cutting spending. But at the same time, more than half of all Americans feared Republicans would go too far. Among those most fearing spending cuts

were younger voters, independents, seniors and suburban women— groups that include many swing voters in national elections who potentially could turn against the GOP. “It may be hard to understand why someone would try to jump off a cliff” to solve the debt crisis, Mr. McInturff said of his fellow Republicans, “unless you understand that they are being chased by a tiger, and that tiger is the tea party.” Rep. Kevin McCarthy of California, the Republican House whip, said his party needs “to have a conversation with people” before proceeding with jarring changes to entitlement programs. Assessing the 2012 election, the survey found Mr. Obama leading potential GOP challenger Tim Pawlenty, the former governor of Minnesota, 50%-31%. Mr. Obama led 49%-40% in a hypothetical match-up against Mitt Romney, the former Massachusetts governor and a Republican candidate in 2008. When tested against an unnamed Republican running for president, Mr. Obama led 45%-40%. Mr.

McInturff said the finding contained warning signs for the president: Voters who remained uncommitted might be tough for the president to win, he said, as those voters disapproved of Mr. Obama’s job performance and believed the country was on the wrong track by large margins. Four years after starting his effort to win national office, Mr. Romney is known by 80% of the public, with 25% saying they feel positive toward him and 25% saying they have negative feelings. Amid the union protests in Wisconsin, the poll found that 62% of Americans oppose efforts to strip unionized government workers of their rights to collectively bargain, even as they want public employees to contribute more money to their retirement and health-care benefits.

WSJ.com ONLINE TODAY: See full poll results and track Mr. Obama’s approval rating since the start of his term at WSJ.com/Politics.

BY ROBERT A. GUTH AND MICHAEL CORKERY Billionaire philanthropist Bill Gates was to step into the U.S. debate over state budgets Thursday with a call for states to rethink their health-care and pension systems, which he says stifle funding for public schools. Mr. Gates said in an interview that he would use a high-profile conference Thursday in Long Beach, Calif., to urge that more attention be paid to how states calculate their employee-pension funding and health-care obligations. “These budgets are way out of whack,” Mr. Gates said. “They’ve used accounting gimmicks and lot of things that are truly extreme.” The comments come after Mr. Gates spent more than a year studying the issue and enlisting the advice of leading academics and others.

The talk was for a meeting of leading thinkers called the TED conference. Mr. Gates was to outline how, as he sees it, rising state health-care costs and flawed pension accounting hamper the ability of states to pay for education. He said he’d use California as an example to illustrate his point. “I’m just very worried about the investments we make for kids’ education and what that means for the future,” he said. “It’s going to take voters to really look at that.” Without that, he said, “The default course—where the health-care costs are squeezing out education—is quite bleak.” Dennis Van Roekel, president of the National Education Association, which has 3.2 million members, said U.S teachers have been trying to make up funding shortfalls by raising their contributions to their pension plans. He added that pensions

United Press International

Bill Gates says high pension costs hurt education

Bill Gates at the National Governors Association meeting on Monday. are one of the reasons schools can attract quality teachers. “People within public services know they are not going to make a high salary but they know that you have some semblance of retirement security,” Mr. Van Roekel said in an

interview. As co-chair of the Bill & Melinda Gates foundation, Mr. Gates focuses most of his efforts on three areas: global health, overseas development and U.S. education. Yet he occasionally uses his stature in the service of other causes, and when he does, it’s very deliberate. Two years ago, Mr. Gates used the same TED conference to outline his views on energy. That talk was the start of an increasingly higher profile by Mr. Gates in national discussion on the state of government investment into energy-related research and nuclear power. His involvement has stirred debate on streamlining the licensing process for U.S. nuclear-power facilities. He said he was concerned that states’ public employee-benefit costs could now stand in the way of broader changes. These include programs Mr. Gates’s foundation backs

that aspire to use technology (including cameras that monitor classrooms) and strengthened teacher evaluations to improve K-12 education. “Those goals will never be met with the kinds of cuts that we’re seeing right now” in education, he said. One focus of Mr. Gates is publicpension funds’ use of a relatively high discount rate to calculate obligations. The discount rate is an assumed rate of return used to calculate the current value of a future liability. The higher the rate, the smaller a fund’s obligations appear—and the less that states need to contribute to their pension funds. Critics blame this accounting approach for contributing to state pension shortfalls, estimated nationwide to total more than $1 trillion. Pension funds say their discount rates are prudent when considering investing returns over several decades.

Friday - Sunday, March 4 - 6, 2011

7

THE WALL STREET JOURNAL.

WORLD NEWS

Frankfurt airport suspect Ivory Coast women shot as war’s toll hits 400 depicted as a ‘lone wolf’ BY MONICA MARK

FRANKFURT—German authorities are investigating links between the suspect in Wednesday’s fatal shooting of two American servicemen at Frankfurt airport and a number of radical Islamist groups based in Germany, but believe that he acted on his own, according to people familiar with the matter. Arid Uka, a 21-year-old ethnic Albanian whose family moved to Germany from Kosovo, had been in contact with a number of prominent Islamists on Facebook, the people said. German prosecutors are expected to charge Mr. Uka, who was arrested shortly after the attack, with murder, attempted murder and aggravated assault at his arraignment in the southern German city of Karlsruhe on Thursday. In addition to the two dead servicemen, two others were injured, one critically. Reached by phone at his home in Frankfurt, Mr. Uka’s father, Murat Uka, declined to comment on his son’s arrest. German counterterrorism authorities hadn’t identified Mr. Uka as an extremist threat prior to the attack, a senior intelligence official said. “We don’t have a file on him. He is the type of terrorist we worry most about—the unknown threat,” the official said. German intelligence services are searching through Mr. Uka’s personal belongings and electronic records searching for links to possible accomplices, so far without success. “He appears to be a lone wolf,” the senior intelligence official said. Prosecutors haven’t charged Mr. Uka with membership in a terrorist organization because so far the evidence collected indicates he acted alone, this person said. At the same time prosecutors are review-

Reuters

BY DAVID CRAWFORD AND LAURA STEVENS

German federal police patrol at Frankfurt’s airport on Thursday. ing strong evidence that the shooting may have been motivated by Islamist extremism. A review of Mr. Uka’s Facebook page show links to dozens of people and Muslim organizations that have been the focus of recent investigations. By Thursday afternoon Mr. Uka’s Facebook page was no longer accessible and appeared to have been taken down. Facebook didn’t respond to requests to comment. One of Mr. Uka’s Facebook friends is Sven Lau, deputy chairman of Invitation to Paradise, an organization that German officials are seeking to ban based on allegations it supports extremist Islamist ideology including a call to impose Islamic law in the place of Germany’s constitution. Mr. Lau said in an interview that he knows several of Mr. Uka’s Facebook friends, but denies ever meet-

ing Mr. Uka in person. “When you have more than 1,000 Facebook friends, you can’t know all of them,” Mr. Lau said. Mr. Lau said Invitation to Paradise continues to operate as a Muslim organization and publisher, despite the initiation of German government proceedings that could lead to the organization’s banning. Mr. Lau denies any involvement in illegal activity. A recent high-school graduate, Mr. Uka had been working on a temporary contract for Deutsche Post AG, the German postal operator. He worked in the letter-sorting division of a postal center at Frankfurt airport, where international letters are sorted for transportation to other parts of Germany, a Deutsche Post spokesman said. His contract was expected to expire in March.

WORLD WATCH Euro-zone growth hits 0.3% as exports, consumption rise

India resumes oil payments to Iran despite sanctions

French prime minister says tax shield to be abolished

LONDON—The euro-zone economy grew at a steady albeit modest rate in the final quarter of last year as export and household consumption growth was offset by a slump in new investment and a slowdown in government expenditures, official figures showed Thursday. Separately, retail sales in the 17 countries that use the euro rose for the first time in 10 months in January, boosted by sales of nonfood products, official data showed. Euro-zone gross domestic product grew 0.3% for the second consecutive quarter in the period from October to the end of December, and was 2% stronger than in the fourth quarter of 2009, the European Union’s Eurostat agency said. The data are in line with preliminary figures published Feb. 15. Euro-zone economic growth failed to pick up in the fourth quarter of 2010 as Germany was hit by severe winter weather, France’s economy failed to accelerate, Italy slowed, and Greece and Portugal contracted. —Nicholas Winning

MUMBAI—India has started making overdue payments to Iran for crude oil imports after more than two months of negotiations to resolve the payment deadlock, India’s oil minister said Thursday. The countries have been in discussions since December, when India’s central bank placed restrictions on Iran transactions through a financial clearinghouse that Washington believes Tehran used to bypass international sanctions. It was unclear Thursday how the payments would be made without running afoul of sanctions intended to stop Iran’s pursuit of nuclear weapons. “Pending dues of National Iranian Oil Co. are now being cleared and as of March 1, payment of €1.5 billion ($2.1 billion) has been made to the Central Bank of Iran,” S. Jaipal Reddy told lawmakers in a written reply in the lower house of parliament. Mr. Reddy didn’t say how the payments were made. It is unclear whether a payment mechanism has been finalized. —Eric Yep

PARIS—French Prime Minister François Fillon Thursday confirmed the government intends to abolish a tax shield that has become a controversial hallmark of Nicolas Sarkozy’s presidency. Mr. Sarkozy decreased the threshold of the tax shield shortly after coming to power in 2007 so that no taxpayers pay more than half their income in taxes. But his ratings have hit lows and the tax shield has become a thorn in his side, as many voters see it as a measure benefiting the wealthy few. “We have to face up to reality: the tax shield has been misunderstood, and the crisis has probably made our citizens more sensitive to some of its effects,” Mr. Fillon told a conference organized to discuss the overhaul of property and capital taxes that Mr. Sarkozy has promised for the first half of 2011. The tax shield was designed in part to limit the impact of France’s wealth tax, which Mr. Sarkozy also intends to overhaul before the presidential elections in May 2012. —William Horobin

ABIDJAN, Ivory Coast—Security forces backing Ivory Coast’s incumbent president opened fire Thursday on female protesters, killing at least six and pushing the West African nation closer to civil war as the continent’s leaders grope for a solution. The clash came during an allwoman’s march in the restive Abobo suburb of the captial, Abidjan, residents said. A witness said the security forces arrived in the morning with armor-plated vehicles and shot at the women, who were waving palm fronds in protest against Ivory Coast’s embattled president, Laurent Gbagbo. Mr. Gbagbo has refused to step down following November’s presidential election, despite near-unanimous international recognition that the race was won by his challenger, Alassane Ouattara. Forces loyal to Mr. Gbagbo have dug in, in the past week fighting running street battles with Ouattara supporters. Heavy fighting has engulfed Abobo. Casualties have risen sharply in recent days, with the United Nations estimating Thursday that at least 26 people were killed in Abobo overnight. “The wounded can’t get to ambulances because we’ve been cut off in this district,” Abobo resident Kareem Coulibaly said by telephone, the crackling of gunfire audible on the line. He said he saw six bodies, and an additional two women with gun-

shot wounds. “Young people have been out in the streets burning tires and throwing rocks since the police left,” Mr. Coulibaly said. The U.N. says that in all, it has verified almost 400 deaths in the postelectoral violence. Most are believed to have been targeted by proGbagbo forces, although the U.N. has been blocked by government security forces from investigating alleged mass graves. In 2002, an attempted coup plunged the Ivory Coast into civil war. While fighting subsided a couple years later, the country has remained divided into a rebel-held north and government-controlled south. Now it appears to be lapsing back into full-blown conflict. Mr. Gbagbo’s forces have started using artillery and other heavy weaponry, prompting thousands to flee areas of Abidjan, the commercial capital. Mr. Gbagbo’s government is also accused of cutting off the electricity supply to the northern half of the country. Health workers there said only a few hospitals with generators were functioning, while electric-controlled water purifiers had stalled. A spokesman for Mr. Gbagbo said the outage occurred for technical reasons. “In light of the sanctions we’re undergoing, we have to ration electricity because of missing spare parts,” said Don Mello. Mediators from the African Union have repeatedly failed to break the violent deadlock between Messrs. Gbagbo and Ouattara.

8

THE WALL STREET JOURNAL.

Friday - Sunday, March 4 - 6, 2011

ON OTHER FRONTS

TV star Willie Revillame performs at the studios of TV5; his former network has sued over his defection.

A growing crowd Upstart TV5 is gaining television viewers in metropolitan Manila.

James Hookway/The Wall Street Journal (2)

Audience share for weekend GMA

4Q 2009 4Q 2010

32% 31% 31

ABS-CBN TV5 Other channels

23 19 29 19 17

Source: Nielsen

‘Willing Willie’ jolts Philippine TV Popular host’s departure from big network for upstart channel sparks lawsuit and shakes up advertising market BY JAMES HOOKWAY Manila

A

BATTLE involving a popular Filipino television host is turning into a major spectacle here and altering the balance of power in one of Asia’s most important media markets. For over a decade, Willie Revillame was a leading star at ABSCBN Broadcasting Corp., one of the Philippines’ two biggest TV networks. But in October he bolted to produce what quickly became a wildly popular variety show on an upstart channel. Now, he’s battling a multimil-

lion-dollar lawsuit filed by ABSCBN and inspiring other entertainers to jump ship. That is boosting the fortunes of his new network, TV5, and shaking up one of the biggest TV-advertising markets among emerging economies. With nearly $4 billion in spending last year, the Philippine TV ad market is bigger than India’s and on par with Indonesia’s, according to Nielsen Co. That’s partly because television is the name of the game in this sprawling archipelago of some 7,100 islands. While newspapers take up the bulk of advertising in India, TV eats up about 75% of ad

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spending in the Philippines and draws buyers from around the world. Until Mr. Revillame (pronounced reh-vil-YA-meh) defected to TV5, the Philippine TV market was dominated by ABS-CBN, which had 24 billion pesos ($554 million) in revenue for 2009, and GMA Network Inc. The rivals competed to develop soap operas, game shows and, more recently, reality programs to lure viewers and advertisers such as the big Philippine mobile-phone networks and consumer-products giants Unilever and Procter & Gamble Co. After Mr. Revillame took his song-and-dance extravaganza to TV5, other stars followed his lead. TV5, which was taken over and recast by local businessman Manuel Pangilinan in late 2009, now is clawing its way up the ratings. In the fourth quarter it grabbed 29% of the weekend prime-time audience in the Manila area to become No. 2, overtaking ABS-CBN, which had 23%. GMA, which remains No. 1, said it “welcomes the entry of TV5” and doesn’t see it as a threat in the Manila market. “The ratings competition is turning into a three-way battle sooner than we previously thought,” says Carissa Mangubat, an analyst at Deutsche Bank, which recently recommended selling ABS-CBN shares and downgraded GMA stock to “hold” from “buy.” Mr. Revillame plans this year to broadcast several shows from the Western U.S., where there are large Filipino communities. The hope is TV5 can build a global webcasting presence. Born to a 15-year-old waitress in the northern Philippines, Mr.

Revillame set out to become a jazz drummer but drifted into playing comic sidekicks in lowbudget action movies such as “Bobocop,” a play on the Filipino word for “dumb.” He later found his way into bit parts on the Philippines’ bawdy, lunch-time TV game shows. In 2005 he started hosting his own show at ABS-CBN, “Wowowee!,” a frenetic hour of song, banter and games that quickly became a hit but frequently ran afoul of censors. Over the years his bosses have taken him off the air several times for, in one example, speculating about

Mr. Revillame’s popularity is driven by a loyal audience that revels in his humor and the promise of cash prizes. the sex lives of dwarfs. He’s always bounced back, driven by a loyal audience that revels in his crude sense of humor and the promise of large cash prizes. “Every time I do something a bit naughty, the ratings go up,” the stubby, mop-haired Mr. Revillame says in an interview. But late last year, Mr. Revillame dropped a bomb. He asked a court to rescind his contract with ABS-CBN because it was keeping him off the air. He also announced plans to co-produce his own three-hour evening show, “Willing Willie,” on TV5. ABS-CBN in a statement says Mr. Revillame had more than a year left on his contract, which bars him from working elsewhere in the meantime. The network

sued for breach of contract and copyright infringement, saying he used some set designs and game formats from “Wowowee!” on “Willing Willie.” Mr. Revillame says he, not ABS-CBN, came up with the format for “Wowowee!” The broadcaster, which declines to comment beyond its statement, is seeking damages of 426 million pesos and an order that keeps Mr. Revillame’s TV5 show off the air. The court, however, allowed “Willing Willie” to stay on the air pending the outcome of the litigation, which could take months, if not years. Jay-P Bautista, a media buyer at Manila-based Mediaforce Vizeum Inc., says TV5 already is attracting advertisers since the arrival of Mr. Revillame. “It’s an alternative to what’s being shown on the other networks,” he says, adding that the cost of a placing an ad on TV5 is approaching what the established players charge. TV5 and Mr. Pangilinan, its chairman, didn’t respond to requests to comment. But Chief Executive Ray Espinosa said recently that the network expects to capture a third of total TV ad spending in the Philippines by 2015, up from 10% now. Meanwhile, Manila’s traffic police complain about having to prevent long lines of people from spilling into the streets outside the TV5 studios from where “Willing Willie” is broadcast each night, eager to win some of the cash Mr. Revillame hands out. “We’ve been following Willie ever since he started. Hopefully, this time we’ll win something,” says Loida Sevilla, 56, who traveled five hours to the studio.

Friday - Sunday, March 4 - 6, 2011

THE WALL STREET JOURNAL.

9

OPINION: REVIEW
OUTLOOK

Fracturing Malaysia

M

alaysia was once regarded as one of Asia’s most promising emerging economies, but over the last decade that story has soured. Output growth has cooled, and foreign investment plummeted from its peak in 2008. The government’s failure to speed up economic reform is partly to blame, but the underlying cause of the policy gridlock is social tension. With the United Malays National Organization at its head, the ruling National Front coalition maintains an uneasy peace between the country’s three main ethnic groups: Malays, Indians and Chinese. Protests by Indian activists last month reveal just how fragile that peace is. The controversy arose late last year when the government announced the addition of “Interlok,” a 1971 Malay-language novel, to the curriculum in some public schools. Cabinet ministers from the Malaysian Indian Congress, the largest ethnic-Indian party in the National Front, cried foul, saying that the novel depicted the Indian community in an offensive way. The issue ignited furious debate in the Malaysian media but did not at first seem to threaten broader unrest. A group of ethnic-Indian NGOs undertook a formal investigation of the novel’s content and found that it did contain a number of

historical errors and misrepresentations. even suspected of being a Hindraf symIn mid-January the Ministry of Education pathizer. On Sunday over 100 people convened a committee to amend the were jailed, and though most were renovel’s offensive bits, leased the next day, 11 apparently satisfying remain under investigathe MIC. Racial tension is boiling tion. The situation intensiThis sort of response over at a crucial fied, however, when two to peaceful protests Indian-rights organiza- political moment. shows the troubled tions—the Hindu Rights state of civil liberties in Action Force, or Hindraf, Malaysia. Since taking and a splinter group, the Human Rights office in 2009, Prime Minister Najib Party—called for nationwide protests Razak has clamped down on the press, against both the book and what they say jailed bloggers and suppressed public are UMNO’s “racist” policies generally. demonstrations, all in the name of mainHindraf was banned in 2008 for holding taining unity and stability. In a speech a massive antiracism rally the year be- early last month, he cautioned his counfore, at which hundreds of its supporters trymen against getting any ideas from the were jailed under the country’s stiff Inter- revolutions unfolding in the Arab world. nal Security Act. Last month, police de- “We will stop any attempt to bring such nied the groups’ requests for public-as- trouble into Malaysia,” he said. sembly permits and threatened to charge In part, it was the National Front that anyone who attended protests with par- created the conditions for the present ticipating in unlawful organizations. turmoil to begin with. Less well-off than Undeterred, demonstrators took to the Malaysia’s Chinese, Indians attribute streets in several cities, first on Feb. 13 their economic woes to affirmative-acand then in greater numbers last Sunday. tion rules that favor ethnic Malays in hirPolice delivered on the promised crack- ing and education. Groups like Hindraf down, patrolling the protest route with accuse the ruling coalition of yielding too trucks and keeping water cannons men- readily to nativist Malay voices that agiacingly nearby. Around Kuala Lumpur, of- tate against meritocratic reforms. ficers appeared to be accosting anyone Political games seem also to be afoot

in the Indian groups’ rabble-rousing, though. Hindraf and the HRP are likely using the present conflict to galvanize the Indian community ahead of a general election expected later this year. They may even calculate that an excessively harsh reaction by the government or ethnic-Malay factions to protests will win them additional public favor. But the MIC has distanced itself from last month’s unrest, and even opposition parties like the National Justice Party, or PKR, appear uneasy about siding with the protesters. Addressing his supporters in January, PKR chief Anwar Ibrahim advised against using the “Interlok” issue to score political points. “It would be extremely useful for the Ministry of Education to listen to reasonable comments on ‘Interlok’ and not to turn it into a divisive political issue,” he said. Too late for that, it seems. Malaysia’s Indians have legitimate reason to feel marginalized in society and ignored by their own leaders. But the risk now is that political parties representing the three races will be steered by extremist groups that exacerbate conflict for their own gain. The past month’s events suggest that years of redistributive policies designed to paper over ethnic divisions have only perpetuated the strife instead.

Obama’s Health Waiver Gambit

‘I

am aware that I have not convinced everybody here to be a member of the Affordable Care Act fan club,” President Obama told a group of Governors over the weekend, and he could have mentioned a majority of the public too. But he did promise to give states “the power to determine their own health-care solutions.” If only this were more than political maneuvering. Mr. Obama endorsed a bill sponsored by Oregon Democrat Ron Wyden and Massachusetts Republican Scott Brown that would putatively give states more flexibility and allow them to opt out of certain mandates. In theory, it sounds great: States could experiment with their own reforms, or as the President put it, “I don’t believe that any single party has a monopoly on good ideas. And I will go to bat for whatever works, no

matter who or where it comes from.” Mr. Obama’s new faith in federalism is trailed by his customary rhetorical asterisk. Any state that the Administration decided deserved a waiver would still need to cover the same number of uninsured, and its coverage would still need to include the same comprehensive benefits and be as “affordable” as the Administration says it should be. That is, it must be as heavily subsidized. So perhaps states could opt out of some consumer or employer mandates, which is a minor release valve. But they would still need to find other mechanisms to achieve the same liberal priorities, which in practice leaves little room to innovate—especially for a straight tax deduction or credit to purchase individual coverage or alternative insurance designs like high-deductible or value-based

plans. That’s why Democrats had nothing to fear from adding such a provision originally. The Wyden-Brown bill merely moves it forward by three years, to 2014. The reality is that the liberals who wrote this bill really do think they have a monopoly on good ideas, and they do not include markets. Democrats are more than happy to give the states more freedom, as long as the states use it to impose comparable government control. That may be why we hear that White House health staffers Stephanie Cutter and Nancy-Ann DeParle have been privately telling liberal interest groups that this is a way to increase centralization—for instance with a statebased “public option” or even single payer. Indiana’s Mitch Daniels and 20 other Governors recently wrote to the Administration requesting a genuine relaxation of

the waiver standards, and expanding them to Medicaid. On that score, the Heritage Foundation’s Stuart Butler, who has been pulling for health-care federalism for years, suggests that the waivers be granted by an evenly divided bipartisan commission. Also notable is that large businesses can sponsor insurance largely free of regulatory interference under the 1974 law known by the acronym Erisa, which governs 59% of workers insured through their jobs. Why not states too? The ObamaCare debate—now into its third year—has proved that there is nothing close to a national consensus and that some very large portion of the country opposes the President’s command-andcontrol entitlement model. Mr. Obama is trying to finesse that political reality, even as he still won’t yield on the substance.

Free Speech for Jerks

E

ven jerks are protected by the First Amendment of the U.S. Constitution, as the Supreme Court reaffirmed on Wednesday with an 8-1 decision in the important free speech case, Snyder v. Phelps. The jerks at issue are members of the Westboro Baptist Church who picketed the funeral of Marine Lance Corporal Matthew Snyder with signs that said “God Hates the USA/ Thank God for 9/11,” and “Thank God for Dead Soldiers.” The High Court upheld the Fourth Circuit’s ruling that Matthew’s father, Albert Snyder, was not entitled to damages for the emotional distress inflicted by the protesters. Despite the 8-1 vote, the Court walked a delicate line in affirming that Westboro’s demonstration addressed

issues of public concern and thus was en- senter, and we can appreciate his argutitled to the highest level of First Amend- ment that Albert Snyder was not a public ment protection. figure but simply a father who wished to “Westboro believes that America is “bury his son in peace” and that the morally flawed; many members of Westboro Americans might feel Baptist denied him the the same about West- Antiwar bullies unite ability to do that. While boro,” Chief Justice no one objects to left and right on the John Roberts wrote for church members exthe Court. “Westboro’s U.S. Supreme Court. pressing their views in funeral picketing is “countless available certainly hurtful and venues,” Justice Alito its contribution to public discourse may wrote, they picket military funerals to be negligible. But Westboro addressed grab the public attention that attends matters of public import on public prop- these events. The First Amendment, he erty, in a peaceful manner, in full com- wrote, does not allow church members to pliance with the guidance of local offi- “intentionally inflict severe emotional incials.” jury on private persons at a time of inJustice Samuel Alito was the lone dis- tense emotional sensitivity by launching

vicious verbal attacks that make no contribution to public debate.” However, the church members were in a public street and at a predefined distance from the funeral. Speech about public affairs is the essence of self-government, Justice Roberts noted, and thus deserves protection regardless of its underlying value. If nothing else, the Westboro bullies managed the rare feat of uniting the Court’s liberal and conservative wings. If the Court’s four liberals are willing to defend free speech for antiwar, antimilitary philistines, perhaps they’ll rethink their contradictory willingness to limit the political speech of businesses and other issue advocates in Citizens United (2010). Just asking.

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THE WALL STREET JOURNAL.

Friday - Sunday, March 4 - 6, 2011

OPINION

million motorbikes. That’s an understatement. It is an infinity of motorbikes. Imagine an entire city population riding atop a 100cc Honda or Yamaha. It’s impossible to imagine unless you see it. One is engulfed by motorbikes seconds away from Ho Chi Minh City airport (HCMC is the city’s official name, and though busts

[ Wonder Land ] BY DANIEL HENNINGER Ho Chi Minh City, Vietnam The TV screen in a hotel room in Singapore a fortnight ago poured out awful images from New Zealand’s Christchurch earthquake. A week later, in Saigon, the earthquake had given way in the news to images of fighting in the streets of Libya. So this, too, is the global village, the whole world watching the same disasters and dramas over dinner. But a “Libya” isn’t quite the same story in Vietnam as in the U.S. America’s great-power status obliges that the center of concern is “the U.S. response.” In emergent Vietnam, whose 89 million people make it the world’s 13th largest nation, the bigger concern is whether its rapidly inflating currency, the dong, at about 20,000 dong to the dollar, will slow this nation’s march to economic power. Don’t count on it. No one in Vietnam is “marching” to the future. “There’s nowhere to walk here,” explained a waitress in a Saigon restaurant. “The sidewalks are covered with motorbikes.” Saigon has been described as a city of nine million people and 30

The Vietnamese are riding into the economic big league, atop millions of motorbikes. and portraits of Uncle Ho abound in public buildings, I never heard anyone in Saigon call it Ho Chi Minh City). Saigon sprawls, like Los Angeles, and virtually every street, from end to end, from morning into the night, is filled with someone on a bike, often with baby sitting in front, holding the handlebars, faces wrapped in large pollution masks, going somewhere, at 35 mph. There are cars and trucks, but they look like whales surrounded by schools of fast fish. Welcome to Vietnam, the motorbike economy—adept, efficient, always in forward gear. The country is run by one of the world’s last Communist parties, which had the sense 20 years

ago to open the economy to the world but has a bad habit of degrading the value of Vietnam’s currency. Still, it’s doubtful that even a Bernankian flood of liquidity will crash the motorbike economy for long. I hadn’t come to Vietnam to see the motorbikes (though one could). It was to visit a symbol of Vietnam’s rise—the new, 500,000square-foot Intel microchip assembly and test factory on the edge of the city. In five years Intel hopes to hire 5,000 workers. Over a lunch of pho ga (chicken noodle soup) in the cafeteria, I talked with six of them. Naturally, I asked about the motorbikes. “We now have a motorbike culture,” said Nguyen Thi Bich Lan, who got a masters in industrial and operations engineering at the University of Michigan. “I can’t wait to get home to ride my bike,” she says. To where? “We hang out with our friends,” said Do Hoang Tram, a logistics manager. “It’s easy to get around,” she said, “so we ride all over the city, looking for new cafes or the latest good restaurant.” This is Vietnam’s emerging middle class—in their 20s or 30s, working for a household-name technology company. Two studied outside Vietnam. All spoke English (the country’s literacy rate is over 90%) with such relaxed self-confidence that after about an hour the

AFP/Getty Images

The Motorbike Economy

One way to get to the global economy. eerie thought occurred that if these six were sitting in the cafeteria of our building in New York, you’d assume they had been there for years. Saigon, a city in chaos 36 years ago, is a place that seems almost impenetrably Vietnamese but also wholly open to the world’s new rhythms. Something more than money is going on here. We talked about health care. It is a public system, but private hospitals and clinics run by private doctors can bill Intel’s insurance plan. We talked about Ameri-

can movies. “We get all of them here,” said Lam Binh Thanh, a senior engineer. These six represent the best part of the Vietnam story right now. Leaving Intel’s state-of-theart plant, a drive to the Mekong Delta takes one past miles of pretty shabby corrugated-steel shops, food stands and houses. See them while you can. Indochina Capital, an investment house based in Vietnam, issued a report this week predicting that by 2050, Vietnam will be the world’s 14th largest economy on a purchasingpower basis of total GDP—ahead of Canada, Italy, South Korea and Spain. Nokia said yesterday it would build a mobile-phone plant near Hanoi, “with further sizeable investments thereafter.” Indochina Capital estimates an annual growth rate through 2025 of about 7%. All is not lost, America. The techs in Intel’s Saigon plant mostly have masters or vo-tech degrees. For its new factories in Oregon (wafer fabrication) and Arizona (making beyond-small 14nanometer microchips), Intel needs loads of lunch-bucket workers with Ph.D.s—if they can find them in the U.S. Vietnam’s millions, rolling endlessly forward on their agile motorbikes, seem to know where they want to go. Next question: Do we?

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Poignant Songs for a People Divided BY STUART ISACOFF

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Almar Latour, Editor in Chief, Asia Peter Stein, Associate Editor Dean Napolitano, Senior Editor Hugo Restall, Editorial Page Editor Shawn Hiltz, Vice President, Marketing Alice Chai, Research Director Connie Cheng, Operations Director Simon Wan, IT Director Olivier Legrand, General Manager Digital Christine Brendle, Publisher Published since 1889 by

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jk

Composer Mark Grey premieres “Stories From Korea” at the Walt Disney Concert Hall in Los Angeles.

Huijin Wang/Korea Times LA

It’s easy to view acts of civil war on the Korean peninsula in strictly political terms: a thriving, free South perpetually threatened by an intransigent and incomprehensibly brutal North. Yet often missed are the personal stories behind these headlines—tales of human struggle, heartbreak and triumph; of families torn asunder and arduous journeys undertaken to reunite them. But where politics fail, art steps in. “Mugunghwa: Rose of Sharon,” for chorus and violin by composer Mark Grey, is based on the letters and poems of Kim Namsoo, tracing his struggles to rejoin his kin. The work is filled with poignant reminders of the human toll of the conflict: “a shattered bridge / on the curvy Great East river, / haggard eyes left to die / next to train tracks, / for those feeble souls / who wait for their last gasps, / the

music, explains the composer. Mr. Grey did not simply quote folk materials—“that would mean pulling the music out of its original con-

Jennifer Koh and Mark Grey explore the human toll of two Koreas. aches of my homeland.” “Mugunghwa” will be performed by the Los Angeles Master Chorale and violinist Jennifer Koh on Sunday in the Walt Disney Concert Hall. The project originated from a chance meeting between Mr. Grey and Ms. Koh. “I bumped into Jennifer on the street in Baltimore,” he recalls. “I was working with the Baltimore Symphony. We had coffee, and expressed an interest in working together. We had known each other for years, but I had a lot of questions about her background. Half of her family comes from North Korea, and half from the South. I realized that all of my Korean-American friends have similar stories. Millions fled the North and there was a mass migration—and many families were ripped apart.” For Ms. Koh, it was a subject long delayed. “My mom became ill a couple of years ago,” she says, “and that’s when I started studying

Korean culture, because I realized I had become disconnected from my roots. I came to an understanding of what my people went through partly by reading Holocaust literature—many Koreans still don’t know whether their relatives are alive or dead. I wanted this work to help people relate to what has happened.” The title of the piece is the name of the national flower of Korea—known here as the Hibiscus syriacus. It serves as a potent emblem of the hopes of a people partly because, as Mr. Grey says, “flowers have no borders.” Woo Sung-lee, director of the Korean Cultural Service in New York, points to the mugunghwa’s significance to his country’s culture. “We cherish it,” he explains. “It symbolizes both the success and the tribulations that Korea has experienced. It’s a symbol of national identity.” That identity is embraced by the

text, which is often ceremonial”—but searched for the heart of ancient traditions. “I do look at melodic, harmonic or rhythmic ideas in Korean music and infuse them into a western format,” he admits. “There are certain musical intervals that a Korean would recognize. But I feel that this is a nod to the culture without the work becoming trite. The opening and closing of this piece is a translation of a Korean shaman ceremony. In Korea, these are typically performed by women. So Jennifer’s violin serves as a shamanic voice. It plays in and out of the text, as a constant point of identity.” After its debut, might this work, with its important message, reach other audiences—on the East Coast, or even in Korea? “We welcome the performance,” says South Korean consul-general Kim Jaesoo. “Many Koreans have family members in both Koreas. We think it’s going to help. I don’t see why it couldn’t be performed everywhere.” Mr. Grey, who enjoys a double career as a composer and sound

designer (he has worked for composer John Adams in the latter capacity for the past 20 years), previously composed a Navajo oratorio, and he is currently at work on a Persian piece for Carnegie Hall. He says that pursuing such themes gives him an opportunity to explore the American fabric. “I wanted to look at the home base—what this land was built upon,” he explains. “I come from European stock. It’s a way to educate myself about the wider world in which I live. After all, we’re all children of migration. Every time you pass someone on the street, there is a hidden history there. I hope my work affords people who are not from these cultures a moment of real connection.”

Mr. Isacoff is on the faculty of the Purchase College conservatories of music and dance (SUNY).

Pepper . . . and Salt

THE WALL STREET JOURNAL

“Call me a hopeless romantic, but I assumed he was just inviting me.”

Friday - Sunday, March 4 - 6, 2011

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OPINION

The World Needs a Strong GOP BY DAVID DAVIS It is always hazardous for outsiders to offer opinions on a foreign country’s political landscape, and as a lifetime admirer of America and its values I have always been cautious in doing so. Nevertheless, the world today is as volatile and dangerous as it has been for a long time, and it needs a strong and coherent Republican Party leading American opinion and policy. With the streets of the Arab world in flames, an ever more ascendant and ambitious China, and a global financial crisis that has not been well managed, let alone resolved, the rest of the world needs America to be a confident champion of Western values. As a political movement, the various strands of Republican opinion have a force and vigor rarely witnessed elsewhere in the Western world. What is more, each strand brings its own wisdom and insight to the political debate. Take, for example, the tea party movement. European liberals deride it as unsophisticated and simplistic. Yet we should remember that they said much the same of Ronald Reagan when he

was alive, even as they now recognize him as the great, world-class statesman that he was. Discovering the right answer after the event is a luxury often exercised by the political left, but not one that we can afford now. So the tea party brings vigor, but it also reflects a skepticism about big government that is a wisdom of our times. In the aftermath of a historically unprecedented bank rescue and economic stimulus, and in the absence of a serious intellectual answer to the banking crisis, who is to say that they are entirely wrong? Similarly, it is fashionable to dismiss the neoconservatives for their aggressive foreign policy. I am uncomfortable with some of the incompetences of Western interventions, but the current explosion of unrest across the Arab world adds some validity to their claim that democracy is a universal human value wanted by everybody, irrespective of their culture, religion and history. Even more unfashionable with the political left are the social conservatives in Republican ranks. It may be that the problems facing the U.S. economy will ensure that social issues take a back seat to candidates’ fiscal policies, but

to America’s 60 million evangelical Christians social issues still matter. Those candidates seeking the Republican nomination in 2012 who choose to ignore socialissues voters will do so at their peril. It would be naive to claim that the Republican Party, with its 47 senators, 241 representatives and millions of voters, can be neatly divided into a small number of

Republicans can show the way with careful fiscal conservatism at home and quiet idealism abroad. distinct factions. It is potentially problematic for the Republicans, however, that there are groups within the GOP which hold widely different views not only about the party’s policy priorities, but also about what those policies should be. For instance, there is a sharp divide within the GOP on federal spending. A recent Pew survey showed that Republicans identifying themselves as tea party supporters would broadly welcome

cuts in spending on education, social-security and environmental programs, while non-tea party Republicans were more supportive of increased spending in these areas. This could be problematic come the 2012 election. Social Security, Medicare and other entitlement programs represent a huge and growing proportion of federal spending. Calling for cuts to these programs isn’t popular, but in the long term it may be difficult to formulate a credible plan for significant deficit reduction without doing so. Looking at the Pew survey it is hardly surprising that some senior Republican figures have suggested that the tea party could fight the 2012 presidential election as a third party. As Lincoln once observed, a house divided against itself cannot stand. What is needed most is not just a coalition of groups but an amalgam of ideas putting together the best and most attractive components of the Republican family’s beliefs. I suspect that the most successful formula would be a careful fiscal conservatism at home and a quiet idealism abroad. In that way America would re-establish itself as the financial linchpin of the world’s economy and its

foremost standard-bearer of democracy. The restoration of America’s economic might will not be achieved without difficulty, and for this reason the Republicans, if victorious in 2012, will need to demonstrate unity and discipline in government too. Recent events in Wisconsin, where Gov. Scott Walker’s plans to cut the deficit have met with 70,000-strong protests, show that cuts will rarely be popular in practice even if voters agree with the need for them in principle. We see the same in Britain. Whoever wins the Republican nomination in 2012 must build a broad base of support across the GOP. After encouraging gains in the November midterm elections, unemployment stuck at 9.4%, and the U.S. deficit expected to hit $1.6 trillion this year, the Republicans are well-placed to take the fight to President Obama in 2012. To do this, it is vital that the Republicans put together a conceptual framework that allows them to focus their fire on the Democratic leadership rather than their brothers in arms.

Mr. Davis, a Conservative, is a member of the British Parliament.

BY EMANUELE OTTOLENGHI While the world focuses on Libya’s popular uprising and Moammar Gadhafi’s murderous response, Iran has also—far from the international spotlight—been ratcheting up its repression. In the last few days, Tehran has moved to arrest the two leading figures of Iran’s opposition, Mir Hossein Mousavi and Mehdi Karroubi, and has reportedly transferred them from house arrest to a political prison run by the Revolutionary Guard Corps. Mass protests have erupted again, in open defiance of the regime, and are spreading far beyond Tehran.

The West should show the same moral clarity against Tehran’s human-rights abuses as it has against Gadhafi’s. But Iran’s rulers already showed in 2009 that they take no chances and no prisoners when it comes to shielding themselves from their people’s wrath. Another bloodbath now is not hard to imagine. Western democracies have been quick to condemn Gadhafi, and have passed a number of measures against him and his regime since Tripoli’s crackdown began. By contrast, Iran’s violent political repression is only part of the latest, gory wave that has been ongoing for more than a year and a half, and yet there appears no urgency in the West to adopt human-rights sanctions against Tehran. There are compelling reasons to rectify this policy discrepancy.

Like Libya, the Islamic Republic of Iran is a place where dissent has been put down, with varying degrees of brutality, for decades—since the early days of the 1979 Revolution. There, torture is rife and the family members of dissidents are intimidated, kidnapped and sometimes raped; hundreds of political prisoners, minorities, homosexuals and women die at the hangman’s hands every year, following hasty trials held in utter disregard for the most elementary rules of fairness and justice; and cruelty is dispensed regularly for the sole purpose of instilling fear in the population. Until Iranians openly challenged their regime following the June 2009 fraudulent elections, Western democracies did little to question Iran’s treatment of its own people. But then, Iran erupted. Its people, chanting “death to the dictator,” made it clear even to the most obtuse observers that their rulers kept power by force, not consent. Western leaders offered words of condemnation, but little else. Now is their second chance to show they’re not indifferent to Iranian people’s suffering, by hitting Tehran with similar measures to the ones they’re imposing on Gadhafi. Last week U.S. Senator Mark Kirk, a Republican from Illinois, gave a decent start, sponsoring a resolution calling for human rights to become a key tool of U.S. foreign policy toward Iran—a call the Obama Administration should now heed. The European Union, meanwhile, still has Iranian Foreign Minister Ali Akbar Salehi on its travel-ban list, on account of his recent role as the head of the Atomic Energy Organization of Iran. Since his appointment as Ira-

AFP/Getty Images

What About Iran?

nian Foreign Minister, there has been talk of lifting the travel ban to allow Salehi to fulfill his stately functions. But at a time when Iran’s entire state apparatus is intent on silencing the opposition and crushing peaceful street protests, Salehi should not be given the gift of travel. The same travel ban, along with asset freezes, should immediately be slapped on other Iranian officials, starting with President Mahmoud Ahmadinejad and all the other figures who bear command responsibility for humanrights violations. Obvious candidates include Iranian “Supreme Leader” Ayatollah Ali Khamenei; Saeed Jalili, the secretary of Iran’s Supreme National Security Council; and their gaggle of policy advisors. The EU should not stop at the top brass—for every order given at the top to fire on protesters, torture prisoners, coerce confessions, issue harsh sentences and otherwise intimidate, violate and abuse innocents, an army of enforcers carries out the deed. So the EU should next name hun-

dreds of Iranian officials at various levels of authority: Basij and Revolutionary Guards local commanders, judges in political trials, prison wardens, and their midlevel bosses in Iran’s ministries of Intelligence, Interior and Justice, for a start. These officials should also be barred from travelling, and their assets frozen. International arrest warrants should be contemplated against them for crimes against their own people. And diplomatic immunity—which the U.K. has now lifted for Gadhafi—should be similarly denied to all top Iranian officials. The EU should immediately recall all its member states’ ambassadors who are still in Tehran, and refuse to return them until Messrs. Mousavi and Karroubi are released. The same applies to other Western countries, such as Australia, Canada, Japan, Norway, South Korea and Switzerland, who enjoy full diplomatic relations with Iran. The EU, along with other Western democracies, should also move to undermine Iran’s stand-

ing in international forums. The farce of Libya sitting as a full member of the U.N.’s Human Rights Council finally came to an end this week, but an equally absurd spectacle continues with Iran’s membership in the U.N. Commission on the Status of Women. May it come to an abrupt end. Beyond that, the West needs to invest in helping the Iranian opposition. The country’s battered democrats desperately need free information, which the West can provide through boosting its Farsi-language radio and television broadcasts inside Iran. They also need the communication technology to bypass government strictures and keep them safe from Tehran’s digital monitors, which the West could help provide with licenses to export the relevant machinery and transfer it to the right people inside Iran. Finally, Iran’s dissidents need a safety net in the West for those who manage to escape; political asylum should be offered to those who flee Iran. International sanctions are no substitute for the courage the Iranian people need to confront their tyrants. But sanctions would offer them some succor, and would finally extract a price for the drunken orgy of violence that has gone on in Iran for far too long. In a rare moment of moral clarity, last week Western policy makers adopted punitive measures against Gadhafi. Here’s hoping that same clarity now informs their policy with the Iranian regime.

Mr. Ottolenghi is a senior fellow at the Foundation for Defense of Democracies and the author of “Iran: The Looming Crisis” (Profile Books, 2010).

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MIDDLE EAST

Gadhafi forces control key refinery Near the western rebel-held city of Zawiya, a heavy government military presence could be seen outside the important oil city, where a group of armed antiregime protesters remain holed up inside the city.

A military checkpoint guarded the entrance of the Zawiya Oil Refinery Co., the country’s secondlargest refinery. The government on Thursday escorted a throng of foreign reporters on a tour of the facility, and government minders appeared eager to demonstrate that the site was under their control. In the oil-refinery town of Brega, meanwhile, rebel forces consolidated their westernmost positions Thursday, a day after they successfully repulsed an offensive by forces loyal to Col. Moammar Gadhafi. Mr. Gadhafi’s fighter jets reportedly dropped bombs on or near the city early in the morning, according to residents, but it wasn’t clear what had been hit. Two massive craters lay along the roads leading up to the city’s university, which witnessed some of the fiercest fighting Wednesday. The military rebels, who along with civilian opponents of the government are trying to topple Col. Gadhafi, are calling for foreign airstrikes as they fend off the offensive by forces loyal to Col. Gadhafi, but senior U.S. defense officials are lowering expectations of an international military intervention in the country. At the Zawiya refinery Thursday, the company’s chairman, Naser Sharif, and board member Khalifa al-Saheli said during a briefing that, except for the absence of 30% to 40% of the refinery’s approximate 2,000-man work force, everything else was operating normally and the site was unaffected by the unrest in nearby Zawiya. Mr. Sharif said the refinery was

Xinhua/Zumapress.com

By Sam Dagher in Zawiya, Libya, and Charles Levinson in Brega, Libya

Libyan rebels take their position Thursday outside the eastern city of Brega, which contains a strategic oil installation. operating at about 80% of capacity of 120,000 barrels a day, which typically supplies products to the Brega distribution company. He said the refinery receives its crude via pipeline from southern oil fields. “I am not affected, if you are concerned, by what’s going on outside.…I have nothing to do with it,” Mr. Sharif said. Both men said no extra precautions were being taken, but they expressed concern that unspecified non-Libyans could exploit the situation and sabotage the facility. “We are concerned and hope…it will be settled and proper dialogue

implemented,” Mr. Khalifa. One administrative worker at the refinery, however, portrayed a grim situation inside Zawiya, where he lives. “We are besieged, and we do not even have children’s milk,” he said. Shops were opening only a few hours each day, and pro-government forces had banned trucks carrying supplies and provisions from entering Zawiya Tuesday. He said one of the regime’s military brigades, called the Khuwelidi al-Hamidi and based in nearby Sarman, was behind the siege of Zawiya. “Libya is living through unprecedented terror by the merce-

nary and the regime,” he said. On the main road leading into Zawiya, there were three checkpoints, all manned by pro-regime armed men in dark green camouflage and brandishing AK-47s, some looking shiny and new. A few of the men wore soft military caps. At the first checkpoint there was a tank and several pickups with what looked like artillery guns mounted in the back. A poster of Col. Gadhafi and a placard reading “Libya’s security and stability is paramount” were fixed at the first checkpoint. Tents were pitched alongside the road for the soldiers.

At the second checkpoint, barrels lined the road where vehicles were being searched. A group of men in a minibus who appeared to be foreign workers—apparently headed to the Tunisian border—were made to take out their suitcases for inspection. At the third checkpoint, antiregime graffiti was sprayed over in blue and “Moammar” was scrawled instead. Near that checkpoint, more pro-government forces congregated near shuttered shops, as uncollected garbage piled up nearby. The pro-government armed men and supporters appeared edgy and angry. One shouted, “You are reporters! Cover the truth!” In the eastern city of Brega, meantime, rebel reinforcements set up gun emplacements and antitank batteries. A pickup truck sped into a parking lot coming from a rebel position even further west. Inside the back seat of the extended cab pickup were four men the rebels said they had captured while they were trying to do a reconnaissance patrol to survey rebel positions. The four men looked like teeangers, and one of them was in tears. They said they were from Niger and had been brought to Libya with promises of employment. Once they got here, they had been given a gun and told to go fight. Rebel officers said they would be taken into custody and tried in a court of law, but it was unclear what court or legal system might hold the hearing. Hospital officials in Brega said they knew of 12 people who had died in the previous day’s fighting, including nine rebels and three proGadhafi fighters In the U.S. Wednesday, Defense Secretary Robert Gates, testifying before Congress, criticized “loose talk” about any military intervention in Libya.

WSJ.com ONLINE TODAY: See photos from Brega at WSJ.com/World

Asset freeze casts chill on Libya’s global holdings The Corinthia Hotel London, with soaring lobbies, marble bathrooms, and views of Trafalgar Square, is one of the year’s most-anticipated new luxury hotels. It hosted Colin Firth, Amy Adams and other movie stars last month at a By Anton Troianovski and Dan Fitzpatrick in New York and Cassell Bryan-Low in London lunch honoring nominees for the U.K.’s top film awards. Its largest owner is Libya’s sovereign-wealth fund, the Libyan Investment Authority. Middle Eastern oil wealth is no stranger to funding splashy deals, but Libya has only recently emerged as a significant player in global markets. With the government of Col. Moammar Gadhafi in turmoil, the country’s assets in banks, funds and real estate have counterparties around the world scrambling to grasp the implications of asset freezes and sanctions. The 294-room Corinthia, where construction is nearly complete, is expected to open on schedule next month, and the project hasn’t been affected by the U.K.’s freeze on as-

sets owned or controlled by Col. Gadhafi and his family, a person close to the project said. In the U.S., banks such as Citigroup Inc. that do business with the Libyan government are required to freeze assets and block any new transactions. Banks have to sit on these funds until the U.S. Treasury lifts the blockade. They don’t have to liquidate their holdings. Most assets subject to the $30 billion blockade consist of cash and securities, said a person familiar with the situation. Once the securities mature, they will be converted to cash, this person said. U.S. banks with outstanding loans to Libya can continue to collect payments, but otherwise have to block debt payments upon receipt

and put them into an interest-bearing account set at market rates, said people familiar with the situation. The banks then can apply to the Treasury Department’s Office of Foreign Assets Control for a license to unblock the transaction and get paid. Many of Libya’s real-estate holdings are in London, where the Libyan Investment Authority opened an office a couple of years ago. The authority bought a large office building in the financial district for about $200 million in December 2008. The following year, it bought a retail and office investment complex on Oxford Street, London’s main shopping boulevard, for about $250 million. Last year, it paid about $10 million for the leasehold of a building in

tony Mayfair, where many hedgefund managers and financiers have offices. “They bought quality buildings for long-term hold for the people of Libya,” said Harvey Soning, chairman of real-estate brokerage James Andrew International, who says he has advised the sovereign fund on its real-estate deals in the U.K. for 15 years. “I’ve always found them to be charming and highly educated individuals.” On Sunday, the U.K. said it was freezing assets owned or controlled by Col. Gadhafi and his family. The broadly worded statement said the freeze included anyone acting on their behalf or by entities controlled by them. The move means that any assets owned in the U.K. can’t be sold or transferred while the freeze

Rich in real estate | Some LIA holdings
11 Upper Brook Street, London: paid $10 million in 2010
Portman House, London: $250 million in 2009


Corinthia London Hotel: Owns stake of more than 50% in hotel set to open in April; secured $220 million loan from group of banks led by Barclays


14 Cornhill, London: $200 million in 2008


International Hotel Investments: owns 35% stake; company owns

luxury hotels from Tripoli to St. Petersburg, Russia
Zara Investment Holding: Owned 13% stake as of end of 2009; Jordan hotel landlord, owns hotels including Grand Hyatt Amman WSJ research

remains in place. Libya also holds stakes in a number of large European companies, including U.K.-based publisher Pearson PLC and a wide range of Italian companies from football club Juventus to defense contractor Finmeccanica SpA. The LIA is the top shareholder in Italy’s biggest bank, UniCredit SpA, and an investor in a private-equity fund run by Carlyle Group, of Washington. One of Libya’s longest-running ventures has been in hotels in Europe and Africa. Its state investment arm bought a stake in Malta hotelier Corinthia Palace Hotel Company Ltd., in 1974. In 2000 that company created a publicly traded subsidiary, International Hotel Investments PLC, which owns luxury hotels from Tripoli to St. Petersburg, Russia, and posted revenue of €45 million in the first six months of last year. In London, IHI in 2008 bought the Metropole Building, and later secured a $220 million loan from a syndicate of banks led and arranged by Barclays PLC to convert the property to a luxury hotel. Libyan Investment Authority has a 50% equity stake in the project as well as 35% ownership of IHI, according to a spokesman for IHI.

Friday - Sunday, March 4 - 6, 2011

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MIDDLE EAST

Bahrain groups list their demands MANAMA, Bahrain—Formal opposition groups submitted demands to the ruling family here that included the introduction of a constitutional monarchy and the dissolution of the government, a move that risked splintering antigovernment forces between those prepared for dialogue and radicals insisting the entire regime must fall. Bahrain’s Ministry of Information responded that the demands demonstrated the “substantial differences between the various groups and parties willing to engage in the national dialogue,” and underlined the need for dialogue to begin as soon as practically possible. “It is precisely for this reason that the dialogue must start in order that a political settlement can be reached by consensus,” the ministry said. The grouping of six main opposition parties, including major Shiite opposition bloc al-Wefaq as well as secular groups, outlined its core demands at a news conference in Manama, underlining their determination to secure sweeping political change. The proposals included the release of all political prisoners, electoral changes and the formation of a new interim government, along with an independent investigation into the deaths of seven protesters since clashes here began last month. The opposition groups said the demands represented a formal re-

Associated Press

BY JOE PARKINSON

Protesters in Manama on Thursday called for a new constitution for Bahrain. sponse to Crown Prince Salman bin Hamad al-Khalifa’s call for dialogue, but stressed that the opening of direct talks would depend on the government’s acceptance of their framework and the provision of guarantees for the safety of antigovernment protesters. “We want [the] regime to say that in principle they agree to [the] abolition of [the] 2002 constitution and [a] new assembly on one man, one vote,” said Ebrahim Sharif, a Sunni Muslim and former banker who heads the National Democratic Action Society, one of the groups

tasked with unifying the opposition’s message. Mr. Sharif said the ruling family must recognize “the rights of people to have [a] fully elected parliament with exclusive judicial oversight power.” Bahrain’s lower house of parliament is elected, but its powers to legislate are clipped by an appointed upper chamber and a royal council that can veto proposals. The formal opposition parties’ call for talks, albeit contingent upon sweeping political change, risks widening the gulf between mainstream political groups and protesters and

undermining opposition efforts to win reforms. Established political groups have struggled to convince hard-line protesters encamped at Manama’s Pearl roundabout to moderate calls for regime change, which were bolstered last week with the return from exile of Hassan Mushaima, a hard-line Shiite opposition leader. Mr. Mushaima returned from in London following a government amnesty. Mr. Mushaima’s al-Haq party wasn’t a signatory to Thursday’s list of demands, indicating it backs radical protesters’ calls for the overthrow of the monarchy. At the Pearl roundabout, the focal point of antigovernment protests that began Feb. 14, opinion was split on whether to back the formal opposition groups’ demands, although most appeared to favor regime change over dialogue. “Our only demand is that they leave…they took everything from our country and we should not negotiate with them. The opposition groups are playing politics and they don’t represent opinion on the roundabout,” said Ahmed al-Aradi, a 20-year-old student from Manama. Later on Thursday, thousands of antigovernment protesters expanded their demonstrations by parading cars along one of the capital’s major highways, enveloping the diplomatic quarter and blocking traffic. The protesters’ strategy of gathering at sensitive locations to pressure the ruling family was set to be broadened on Friday, with op-

position groups expecting the largest march in central Manama since protests began. The government has offered a series of concessions in recent days, releasing 308 political prisoners, shuffling the cabinet and reducing citizens’ monthly housing costs by 25% in a move to assuage protesters’ demands. Bahrain’s Ministry of Information said the crown prince has made clear he intends to begin a national dialogue with all sections of society to “move away from polarization and ensure that sectarianism does not take root in Bahrain.” The groups given the task of unifying the opposition’s message have been struggling for over a week to coordinate a response to the call for talks. Many in the opposition cite the need for further concessions from the ruling family after last month’s violent crackdown, which left seven people dead and hundreds injured, before they agree to direct talks. Others fear a replay of 2001, when King Hamad bin Isa al-Khalifa pledged to devolve power into a constitutional monarchy but pulled back a year later, leaving control in the hands of the ruling family. “We are part of the Arab revolution,” said Sheikh Ali Salman, leader of al-Wefaq, the largest opposition bloc, which resigned its seats in parliament in solidarity with protesters. “We want a constitutional monarchy, where the king reigns and the people rule; it’s not unreasonable,” he said.

Continued from first page in recent days, releasing 308 political prisoners, reshuffling the cabinet and reducing citizens’ monthly housing costs by 25% in a move to assuage protesters’ demands. In Yemen’s capital, San’a, there is a strong sense that several thousand protesters camped out in the city center are here to stay, demanding that President Ali Abdullah Saleh step down after 32 years in power. Every day, dozens of tents are added and the protesters overflow into nearby streets. More women and children have joined the demonstrations and local celebrities come to talk to the crowds. “President Ali must leave the throne, now even his chair is rusty,” protesters yelled Thursday evening. A coalition of opposition groups in Yemen have agreed to enter talks with the government, which on Monday offered to create a unity cabinet with the opposition. But many protesters say nothing short of Mr. Saleh’s departure will satisfy them. “There is no [middle-ground] solution that will be acceptable for the people in the street,” said Khaled alAnesi, a human-rights lawyer and protest leader. In Egypt, the Middle East’s most populous nation, protesters managed to oust Mr. Mubarak but continue to press their demands, which center on ridding the interim government of Mubarak allies, winning the release of political prisoners, and ending Egypt’s emergency law, which allows the government to detain citizens without a judicial warrant. Mr. Shafiq, the prime minister, was a main target of criticism. Protest leaders worried that the former

Air Force official was too close to Mr. Mubarak and would help the long-ruling National Democratic Party cling to power and prevent real democracy from taking hold—in effect, carry out a “counterrevolution.” The move will help defuse growing tensions between the military and the protesters. On the night of Feb. 25, night, protesters clashed with troops who tried to clear them out of Tahrir Square, the nerve center for the protest movement. Troops used electric prods and batons to clear out some protesters and arrested others. On Wednesday, a military court sentenced one protester, Amr Abdullah El-Behairy, to five years in prison for allegedly attacking an army officer during the clashes. The case has caused an outcry because Mr. El-Behairy was sentenced within three days by a military court, according to human-rights activists. Mr. Shafiq was succeeded by Essam Sharaf, an engineer who was transport minister from 2004 to 2006 under Mr. Mubarak’s government, but who is widely seen as free of the taint of the former leader. Dr. Sharaf also supported young protesters soon after they began a drive to kick Mr. Mubarak from power in late January—burnishing his pro-democracy credentials among the protest movement. In fact, it was protest leaders who suggested Dr. Sharaf as a suitable successor for Mr. Shafiq in a meeting with the army leadership this week, according to Abdul Rahman Samir, a member of Egypt’s revolutionary youth coalition. Pressure to remove Mr. Shafiq grew on the military after he went

European Pressphoto Agency

Egypt replaces PM as region’s protesters show tenacity

Outgoing Prime Minister Ahmed Shafiq, right, in Cairo after his resignation. on Egyptian television Wednesday night and held a confrontational interview with leading Egyptian intellectuals. On Tuesday, opposition figures Mohamed ElBaradei, the former head of the International Atomic Energy Agency, and Amr Mousa, former head of the Arab League, met with military brass and reiterated the protesters’ demand to

remove Mr. Shafiq. “The high council of the military forces has decided to accept the resignation of Mr. Ahmed Shafiq and assign Dr. Essam Sharaf to form a new cabinet,” the Supreme Council of the Armed Forces said in a statement on its Facebook page. Protest leaders and opposition politicians welcomed the choice.

“Goodbye Shafiq, friend of Mubarak, and welcome Sharaf and congratulations to the new Egypt,” Ayman Nour, the head of the opposition Ghad Party who ran unsuccessfully against Mr. Mubarak in 2005 presidential elections, wrote on his Twitter account. Mr. Sharaf got a master’s and doctorate in civil engineering at Purdue University. According to Kumares Sinha, an Edgar B. and Hedwig E. Olson Distinguished Professor of Civil Engineering at Purdue University in Indiana and Essam Sharaf’s doctoral thesis adviser, Dr. Sharaf was forced from his position as minister of transportation in 2006 after he pressed government officials to withdraw a license for Mamdouh Ismail, whose company, El Salam Maritime Transport, operated ferries on the Red Sea. Dr. Sharaf said the ferries were in violation of safety standards and were unfit to transport passengers. Mr. Ismail, who was widely seen as well-connected within the NDP, managed to avoid the suspension. A subsequent cabinet shake-up saw Dr. Sharaf relieved of his position. Dr. Sharaf was tragically vindicated the following year, when one of El Salam’s ferries, the MV alSalam Boccaccio 98, sank in the Red Sea, killing more than 1,000 people. A parliamentary inquiry blamed the company for the disaster. Mr. Ismail and four others were acquitted in the summer of 2008. The case inspired massive popular outrage because Mr. Ismail appeared to have benefited from his high-level NDP connections. At a retrial in 2009, Mr. Ismail was sentenced to seven years in jail. —Oliver Holmes in San’a, Yemen, contributed to this article.

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Friday - Sunday, March 4 - 6, 2011

FROM PAGE ONE

Gillard to address foreign policy issues Taliban. Australian defense officials have said this year is a pivotal one, and Ms. Gillard said last year she doesn’t expect a drawdown of Australian troops until 2014. China complicates Australia’s international policy. China’s factories depend on the coal and iron ore from Australia’s mines, and that demand is fueling the Pacific nation’s growth. At the same time, China has ramped up military spending and become more assertive in the AsiaPacific region, where it claims jurisdiction over large parts of the South China Sea. In response, Australia plans to spend as much as 275 billion Australian dollars (US$276 billion) over the next 20 years on updating its military with equipment including submarines, naval frigates and ships called air warfare destroyers, as well as the latest F-35 joint strike fighters.

Australia’s prime minister, Julia Gillard, has solidified her popularity at home with her handling of a series of devastating natural disasters in recent months. Australia also disagrees with China on exchange rates, with Canberra backing the U.S. position that the yuan is undervalued at the cost of the world’s economy. “We are looking at these currency wars question,” said Ms. Gillard. “The G20 needed to deal with this at the last meeting. We believe it’s important that currencies do move to floating regimes. We understand that that takes time, but in order for us to have sustained and balanced growth in the world economy we do need to deal with currency questions.” Reaching and sustaining a consensus on this issue won’t be easy, Ms. Gillard said. “There is a lot of work to do and a lot of discussions to be had between nations as we build the strength of the global economy and balance sustained growth,” she said.

Bloomberg News

Continued from first page pected to hold meetings with Wall Street banking and financial executives. Among other topics, she will lobby for Australia to win one of the U.N. Security Council’s rotating, nonpermanent seats. Ms. Gillard, who effectively deposed predecessor Kevin Rudd before narrowly forming a coalition government in September, will be under pressure to perform. Australians are seeking a greater say overseas as the country’s mining boom continues to feed China’s appetite for coal and iron ore. But unlike Mr. Rudd, a former diplomat who serves now as foreign minister, Ms. Gillard has spent her political career campaigning on domestic issues. During a summit in Brussels in October, she was quoted in local media as saying, “If I had a choice, I’d probably be more [comfortable] in a school watching kids learn to read in Australia than here in Brussels at international meetings.” In a more minor incident that has also been cited in local media, a set of dolls representing world leaders at the November Group of 20 nations summit in Seoul included one of Ms. Gillard dressed in the native garb of Austria. Ms. Gillard has solidified her popularity at home with her handling of a series of devastating weather events over the past four months. But foreign policy weakness could be a liability in a country that is accustomed to an outsize international role compared with its small population. Australia is a staunch military ally of the U.S., particularly in Afghanistan, where it has about 1,500 troops. Australian prime ministers have also played central roles in striking trade agreements with the U.S. and regional allies. ”Prime ministers come from different walks of life,” Ms. Gillard said Thursday. “You bring with you those experiences and your values and outlooks. Kevin Rudd came into politics after a long career as a diplomat, so he brought that experience with him.” Discussions on Afghanistan will likely center on whether progress is being made in the assault on the

Australia’s Julia Gillard is preparing for her first state visit to the U.S. since she became prime minister last year..

UBS banker defects to rival, in latest departure Continued from first page couldn’t be reached for comment. A UBS spokesman declined to comment. UBS kept its Asian franchise thriving despite earlier defections and the 2008 financial crisis. But regional management shifts as well as pay restrictions in the wake of the

crisis led to departures at UBS. The Swiss bank said recently that it was cutting its banking staff bonus pool for 2010 by 10% from a year earlier following public and shareholder criticism. UBS has long been No. 1 in the region in terms of investment-bank revenue, according to data provider

Clinging to No. 1 Investment-banking revenue in the Asian-Pacific region, excluding Japan, in millions of dollars for 2010 $607

UBS 554

J.P. Morgan

536

Credit Suisse

493

Goldman Sachs

476

Morgan Stanley 415

Deutsche Bank Bank of America Merrill Lynch Citi

328 299

Bank of China

298

CICC

295

Source: Dealogic

Dealogic. The bank has been especially strong in initial public offerings—an increasing source of revenue as regional markets have matured—and in China, where it has helped a number of Chinese companies raise capital in Hong Kong. UBS was the top-earning investment bank in the region for an eighth straight year last year, Dealogic said. The Swiss bank benefited from a rash of initial public offerings last year. It took central roles in the $3 billion IPO of Singapore’s Global Logistic Properties Ltd. and the $4 billion IPO of Australia’s QR National Ltd. It also was boosted by rights offerings from Chinese banks, including Bank of Communications Co. and China Merchants Bank Co., which raised a total of $10.65 billion. But it didn’t play a role in the region’s biggest IPO, the $22.1 billion offering of Agricultural Bank of China Ltd. in July last year. UBS played a secondary role in the region’s No. 2 IPO, the $20.5 billion

offering of American International Group Inc.’s AIA Group Ltd., which generated $408 million in fees. The Swiss bank’s former Asia head of global capital markets, Steven Barg, quit in May to join Goldman Sachs Group Inc. as its cohead of equity capital markets for Asia excluding Japan, days after Mr. Barg’s subordinate, Mark Williams, moved to Japanese bank Nomura Holdings Inc. Mr. Williams was UBS’s Asia head of equity capital markets. Henry Cai, UBS’s former Asia investment-banking chairman who is known for his strong political and business connections in Beijing, left to join Deutsche Bank AG in July as corporate finance chairman for Asia. In September, Bank of America Merrill Lynch said it hired Michael Benz from UBS to be its head of wealth management for the AsianPacific region. Mr. Koder is one of the biggest hires in the region since annual bonuses were given out by banks in re-

cent weeks, and follows a number of reshufflings in the region as banks pay up for talent in their biggest growth market. He will join the firm in the summer and report to the firm’s Asian-Pacific president, Brian Brille, Bank of America Merrill Lynch said. Mr. Koder, who was based in London and Hong Kong at UBS, will be based in Hong Kong.

UBS kept its Asian franchise thriving despite earlier defections and the 2008 financial crisis. The unit of Bank of America has been building out its Asian platform with a series of hires. In July, it hired Peter MacDonald, who helped set up Goldman Sachs Group’s Chinese securities business, as vice chairman of the Asian-Pacific region.

As of 11 a.m. ET

Euro 1.3939 À 0.43%

Yen/US$ ¥82.38 À 0.91%

Yen/A$ ¥83.52 À 0.57%

Oil 101.57 g 0.65%

Gold 1423.10 g 0.98%

Retailers tallied solid U.S. sales as shoppers snapped up goods

10-year Treasury g 20/32 yield 3.539%

3-month Libor 0.30950

PPL’s British power trip appears pricey

BUSINESS& FINANCE. BUSINESS & FINANCE 17

Friday - Sunday, March 4 - 6, 2011

BY YUN-HEE KIM HONG KONG—Asian electronics companies stand to benefit from a surge in demand for components in the new iPad but will see their already battered ambitions to make their own tablets challenged further. Companies including Japan’s Toshiba Corp. and South Korea’s Samsung Electronics Co. and LG Display Co. supply key components, such as memory chips and screens in the new version of the Apple Inc. tablet. But LG Display’s parent company, LG Electronics Inc., as well as Toshiba and Samsung also make their own tablets. If the new version of the iPad, unveiled Wednesday, is as successful as the original version, these component makers stand to benefit from an increase in sales, analysts say. But profit margins for their tablets could slip, given their late entry into the market and because more devices are being introduced this year, intensifying competition. “It’s a difficult balance for these companies,” said Kirk Yang, head of Asia technology hardware research at Barclays Capital. “Looking at the new version, we’re even more convinced that Apple’s iPad 2 will continue to dominate the tablet market this year with about a 70% market share.” Samsung, Toshiba and LG Electronics declined to comment Thursday on how the iPad 2 might impact their own tablet sales. Apple, which typically doesn’t comment on its suppliers, wasn’t immediately available for comment. At an event Wednesday in San Francisco, Apple Chief Executive Steve Jobs said the company had more than a 90% share of the market and “our competitors are just flummoxed.” He added that if 2010 was the “year of the iPad,” he might call 2011 “the year of the copycats.” Mr. Yang predicts that Apple will sell more than 33 million iPads this year. That compares with more than 14 million the company has sold already. Mr. Jobs said the iPad 2, which has a faster dual-core microprocessor and two video cameras, is thinner and lighter than its predecessor. The new version will start at $499, which is the same price as the original model. Apple said it will begin shipping on March 11 in the U.S., and in more than two dozen countries on March 25, including Japan and Australia. A Toshiba spokeswoman said the company hopes the iPad 2 will help further boost the market for what are known as NAND flash memory Please turn to page 17

THE WALL STREET JOURNAL.

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asia.WSJ.com

Sony calms a currency risk Japanese exporter’s yen exposure to U.S. dollar is ‘virtually zero;’ risks loom in China BY DAISUKE WAKABAYASHI

TOKYO—The shift of Sony Corp.’s manufacturing out of Japan to China has whittled the company’s yen exposure to the dollar down to “virtually zero,” but the electronics maker could be vulnerable to a strengthening Chinese yuan in the future, the company’s corporate treasurer said. This move has “greatly changed Sony’s currency landscape” over the past few years, Hiroshi Kurihara said during an interview Thursday. While the company used to track the dollar’s moves against the yen rate obsessively, he said “now we don’t really care.” “On a net basis, our U.S. dollar exposure is becoming virtually zero,” said Mr. Kurihara, who is in charge of Sony Global Treasury Services, which handles hedging in about 35 different currencies. Historically, Sony manufactured many goods such as television sets and PlayStation game consoles in Japan and then sold some of those products in the U.S. This meant that Sony would incur its costs in yen while generating its revenue in dollars, leaving itself vulnerable to changes in the dollar-yen rate. Sony has moved some production abroad in recent years, either at its own facilities in China or by using China-based contract manufacturers. Those costs are incurred in dollars, allowing the company to balance its dollar sales and costs. For major Japanese exporters such as Sony, which generates more

Global implications| Sony adjusts its risks t Sony’s

NGP

Sales by region* Europe 21.8%

Effect of currency movement on operating profit

Japan 29.4%

A one-yen drop in the U.S. dollar’s average rate resulted in...

Others 10.6%

¥2 billion ¥8 billion

Total sales: ¥5.5 trillion Asia Pacific 17.8%

drop in FY2010

drop in FY2001

A one-yen drop in the euro’s average rate: U.S. 20.4%

¥7 billion ¥5.5 billion drop in FY2010

*For the nine months ending Dec. 31 Sources: Sony; Getty Images (photo)

drop in FY2001

Fiscal years end March 31 of the following year

than 70% of its sales outside of Japan, the growing use of China as a manufacturing base has resulted in easing a major nonbusiness risk: the strong yen. When the yen rises against other currencies, it can drag on a Japanese company’s bottom line because it eats into overseas

profit brought back to Japan. So when the yen surged to a 15year high against the dollar late last year—and it continues to hover near those levels—there was a great deal of handwringing about how this might deal a devastating blow to Japanese exporters. But most com-

panies have managed to avoid damaging losses by handling currency exposures better. The dollar stood at 82.24 yen on Thursday morning in New York. For the current fiscal year ending in March, Sony has said each one-yen fall in the U.S. dollar’s average rate shaves two billion yen ($24.4 million) off the company’s full-year operating profit. By comparison, the same currency swing cost Sony eight billion yen in operating profit in the fiscal year ended in March 2002. Sony expects to post a group net profit of 70 billion yen for the current fiscal year after reporting a loss of 40.8 billion yen a year earlier amid restructuring costs. Signaling better growth prospects outside of Japan, Sony is also bringing a smaller percentage of its overseas profit back to Japan. Mr. Kurihara said Sony tends to leave dollar-based and euro-based overseas profits in those markets, because it might need to retain some money in those currencies for future acquisitions or other expenses. For rapidly growing countries such as Brazil, India and China, Sony is choosing not to repatriate profits from those markets, because the company will likely need money in those currencies to pay for future strategic investments. As a result, Mr. Kurihara said Sony now repatriates about 20% to 30% of its annual overseas profit back into yen, compared with about 50% five years ago. Please turn to page 18

Paulson gets Hong Kong trading license BY NISHA GOPALAN HONG KONG—Hedge-fund manager John Paulson, who made his name betting against subprime mortgages in 2007, is the latest high-profile investor to expand into Asia. Mr. Paulson, president of Paulson & Co., received a license from Hong Kong’s Securities and Futures Commission to deal in securities, according to a filing on the regulatory watchdog’s website. Mr. Paulson got a Type 1 license to deal in securities for Paulson Asia Ltd., on Feb. 21, according to the website. Such a license gives Paulson Asia the right to deal in stocks, bonds, stock options and funds, but doesn’t cover futures trading or asset management. Three former Morgan Stanley Asia executives who left the bank in recent years are involved with Paulson Asia, according to the filing. Sandra Lee, who left Morgan Stanley in July 2008, and Deng Xiaoli, who left in November 2009, are listed as

“responsible officers” in the firm. Mr. Deng was formerly vice president at Morgan Stanley Alternative Investment Partners. Winnie Wong, who left Morgan Stanley in early 2008, is listed as a representative of Paulson Asia. Mr. Paulson’s decision to set up shop in Hong Kong comes at a tumultuous time for hedge funds in Asia. Since the financial crisis, which led to a spate of fund closures, big funds and big names have succeeded in raising money from wealthy Asian investors, while smaller ones have suffered, experts say. “Asian money tends to buy the better-known global manager brands, and also, since the financial crisis, a hedge fund that has an institutional structure helps to attract institutional money,” said Andrew Gordon, head of BNY Mellon’s alternative investment services in Asia. “There are a number of smaller managers that have closed down because they haven’t managed to attract capital, and had average per-

Bloomberg News

Suppliers confront challenge from iPad

HEARD ON THE STREET 28

John Paulson, president of Paulson & Co., is shown in New York last month. formance investment.” Last year, 100 Asian hedge funds closed, data from hedge fund tracker Eurekahedge show.

The relatively poor recent performance of Asian stock markets—the MSCI Asia Pacific index is up just 0.04% this year, compared with the MSCI North America index, which has gained 4.7%—has also taken a toll. The Eurekahedge Asia ex-Japan hedge fund index, which tracks funds in the region, fell 1.2% in January, while the North America index rose 0.75%. Och-Ziff Capital Management LLC said Tuesday three of its four funds ticked higher last month, benefiting from a 3.4% rise in the Dow Jones Industrial Average, while its Asia Master Fund declined by 0.1%. Earlier this week, the head of Highbridge Capital Management’s Asia investments, Carl Huttenlocher, told colleagues he was leaving the multibillion-dollar hedge-fund firm owned by J.P. Morgan Chase & Co., people familiar with the matter said. He oversees about $2 billion in assets including the Hong Kong-based Highbridge Asia Opportunities Fund, which will be wound down.

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BUSINESS
FINANCE

Singapore Air inspects jet wiring Carrier calls move a precaution, following an electrical malfunction on Airbus superjumbo BY ANDY PASZTOR AND ROSS KELLY

A Japanese and South Korean consortium is buying a stake in a Brazilian miner that specializes in scarce metals for $1.95 billion, a move that highlights steelmakers’ race to secure resources amid tightening supply.

Agence France-Presse/Getty Images

Singapore Airlines Ltd. said it plans to inspect certain wiring on all of its Airbus A380 superjumbo jets “as a precaution,” in the wake of an unusual electrical malfunction at the end of January. In disclosing the inspections on Wednesday, an airline spokesman said they were prompted by an electrical fault aboard an A380 on Jan. 31, headed from Singapore to Hong Kong. Flight attendants reported the smell of smoke from a lavatory and discharged a portable fire extinguisher. After the plane landed safely at its destination, mechanics found burned electrical wiring in part of the plane’s cargo hold. Investigators have determined that the problem was prompted by a generator that supplied excessive voltage to the plane’s electrical system, Singapore spokesman James Boyd said Wednesday. Both Singapore and manufacturer Airbus, a unit of European Aeronautic Defence & Space Co., have described the January event as an isolated incident. Mr. Boyd didn’t elaborate on the timing of the inspections. The latest Singapore checks follow oil-pressure problems last month that affected two different

By Kyong-Ae Choi in Seoul and Alison Tudor in Hong Kong

A spokesman for Singapore Airlines said the inspections were prompted by an electrical fault aboard an A380 on Jan. 31. A380s operated by Qantas Airways Ltd. There have been no injuries stemming from the spate of recent incidents. Still, industry safety experts remain focused on A380 incidents partly because of the hazardous, high-profile disintegration of a Rolls-Royce PLC engine on a Qantas A380 in November, shortly after takeoff from Singapore. Engine parts damaged the fuselage and various aircraft systems, forcing pilots to confront a cascade of computerized fault messages, cope with leaking fuel and make a harrowing emergency landing.

The engine maker, Airbus and safety regulators came up with a fix and enhanced inspection requirements, though Quantas ended up grounding its entire A380 fleet for a longer period than other operators. Both of the subsequent engine oil-pressure drops affected what the airline described as an external fuel line, and weren’t directly related to previous manufacturing defects with Rolls-Royce’s Trent 900 engines. The oil-pressure problems occurred five days apart, while the A380s were en route from Singapore to London. The planes continued to safe landings. A spokesman for Qantas said

that in both February incidents, pilots detected a decrease in oil supply to one engine and rolled back thrust but didn’t shut down the affected engine. The airline has said that crews reacted appropriately and there weren’t any safety hazards. Four-engine jets such as the A380 are built and certified to fly on three engines. The spokesman for Qantas said the external fuel lines were removed to permit detailed internal engine inspections mandated after the November engine emergency. But the airline said that they were re-attached “in line with Rolls-Royce requirements.”

BP won’t pay bonuses to top executives BY JAMES HERRON LONDON—BP PLC said Thursday it won’t pay bonuses for 2010 to top executives who had responsibility during a fatal oil-well explosion in the Gulf of Mexico. Former Chief Executive Tony Hayward, former head of Exploration and Production Andy Inglis and current Chief Executive Robert Dudley will receive no cash bonus for 2010 and no shares under the longterm remuneration plan running

Asia firms buy stake in miner

from 2008 to 2010, BP said in its annual report to shareholders. Head of refining Iain Conn and Chief Financial Officer Byron Grote will receive cash bonuses of £104,000 ($169,800) and $207,000, respectively, for meeting targets within their own division. This is about 10% of the cash bonuses they received in 2009. Salaries for board members remained broadly unchanged from 2009 to 2010, excluding Mr. Dudley, whose basic pay increased to $1.18

million from $750,000 in 2009 as he became CEO. Separately, BP said oil production in its two main deep-water areas, the U.S. Gulf of Mexico and Angola, declined 15% in 2010 to 508,000 barrels a day. These figures, released in BP’s annual report, highlight how the fatal Deepwater Horizon blowout and subsequent oil spill in the Gulf of Mexico have hurt the company’s deep-water operations, which accounted for a fifth of total oil output

in 2010 and were to underpin much of the company’s future growth. BP said its total Gulf of Mexico deep-water oil production fell to 338,000 barrels a day, from 387,000 barrels a day in 2009. In Angola, where BP has suffered a number of technical problems, production fell to 170,000 barrels a day in 2010, from 211,000 barrels a day the previous year. BP’s total oil production in 2010 fell 6.4% to 2.374 million barrels a day, the company said.

The consortium is to sign a deal Friday to buy the 15% stake in Companhia Brasileira de Metalurgia e Mineracao, South Korean consortium member Posco said. CBMM mines and processes niobium, a metal used to produce high-grade steel products such as cars and oil pipelines, Posco said. CBMM, established in 1955, accounts for 82% of the world’s niobium market, with estimated reserves of more than 800 million metric tons, Posco said. The consortium consists of Japanese steelmakers JFE Holdings Inc. and Nippon Steel Corp.; Japanese trading company Sojitz Corp.; government-funded Japan Oil, Gas & Metals National Corp., or Jogmec; South Korea’s National Pension Service; and Posco. Mergers and acquisitions activity in the global mining industry is off to a quick start this year, with $27 billion in mining deals already announced in the first month-and-ahalf, according to a report by consultants at PricewaterhouseCoopers LLP. PwC expects the record-breaking run to continue through 2011 and deal sizes to grow. Emerging markets’ growth has underpinned demand for scarce commodities, prompting a rush to secure production in order to capitalize on price strengthening. The Japanese firms will take a combined 10% stake and the remaining 5% stake valued at $650 million will be evenly split between the two Korean firms, South Korea’s National Pension Service and Posco said.

INDEX TO BUSINESSES AND PEOPLE Businesses This index of businesses mentioned in today’s issue of The Wall Street Journal is intended to include all significant reference to companies. First reference to the companies appears in bold face type in all articles except those on page one and the editorial pages. ABS-CBN Broadcasting..8 Alkermes.......................23 Amylin Pharmaceuticals........23 Apple........................19,23 Associated Newspapers...............18 ASX ............................... 20 Azentus Capital Management..............15 Bank of America.............1 Barclays.........................12 Berkshire Hathaway.....21 Bharat Petroleum Corp..7 Big Lots.........................23 Bombardier ................... 19 BP..................................16 Brasileira de Metalurgia e Mineracao...............16

British Sky Broadcasting Group.....................18,23 BT Group.......................18 Buy.com.........................17 BYD ............................... 28 Carlyle Group................12 Chery Automobile.........28 Cheung Kong Infrastructure............28 China Construction Bank...........................23 China Development Bank...........................19 China Merchants Bank.23 China Minsheng Banking......................23 Chi-X Global..................20 Citic Group....................18 Citic Pacific...................18 Citigroup .................. 12,20 Corinthia Palace Hotel Company Ltd..............12 Daewoo Engineering & Construction..............23 Deutsche Börse ............ 20 Deutsche Post ................ 7 DuPont..........................23 Electricité de France .... 28 Eli Lilly..........................23 Encyclopaedia Britannica .................. 17 Energy Future...............21 E.ON..............................28 Essar Oil..........................7 European Aeronautic Defence & Space.......16

Facebook ......................... 7 Family Dollar Stores .... 23 Fifth Third Bancorp......20 Finmeccanica ................ 12 Gap................................17 Gartner..........................19 Geely Automobile Holdings.....................28 General Electric............23 General Motors.............28 Glencore International.........21,28 GMA Network.................8 Goldman Sachs Group..21 Google......................17,19 Grameen Bank................5 Guardian Media Group.18 HCL Technologies.........21 Higa Industries Co........18 Hindustan Petroleum Corp..............................7 H.J. Heinz......................23 Honda............................28 Hon Hai Precision Industry ..................... 17 Hot Topic.......................23 Hua Xia Bank................23 Huaychuan Rice Co.........4 Hyundai Engineering & Construction..............23 Hyundai Motor..............23 ICBC Financial Leasing.19 Indian Oil ........................ 7 Industrial & Commercial Bank of China Ltd 19,23 International Hotel

Investments .............. 12 Itochu.......................19,23 J.C. Penney ................... 17 JFE Holdings.................16 J.P. Morgan Chase........14 Kia Motors....................23 Kohlberg Kravis Roberts ...................... 21 Kohl’s.............................17 LG Display.....................15 LG Electronics...............15 Macy’s...........................17 Mangalore Refinery & Petrochemicals............7 News Corp................18,23 Nippon Steel.................16 Nissan ........................... 28 Noble Group..................28 Nomura Holdings..........20 Nordstrom.....................17 NYSE Euronext.............20 PAI Partners.................19 Paulson..........................15 Pearson.........................12 Posco.............................16 PPL...........................21,28 Qantas Airways............16 Reliance Industries.........7 Rio Tinto.......................28 Rolls-Royce...................16 Saks...............................17 Samsung Electronics....15 Shandong Gold-Mining.23 ShoreBank.....................20 Singapore Airlines........16

Singapore Exchange.....20 Softbank ....................... 23 Sojitz.............................16 Sony .............................. 15 State Bank of India........7 Target............................17 Toshiba..........................15 TPG................................21 Trian Group...................23 Trinity Mirror................18 TXU................................21 UBS ................................. 1 UniCredit.......................12 Wendy’s/Arby’s Group . 18 Xstrata.....................21,28 Yahoo.............................16 Yahoo Japan..................16 Zensho...........................18 Zhongjin Gold ............... 23 Zijin Mining Group.......23 ZTE................................17 Zumiez .......................... 23

People This index lists the names of businesspeople and government regulators who receive significant mention in Today’s Journal. Ader, David...................22 Aronson, Arnold ........... 17

Barlow, Gregory............17 Bautista, Jay-P...............8 Brien, Lou......................22 Buffett, Warren............21 Conn, Iain......................16 Dudley, Bob...................16 Espinosa, Ray.................8 Fowler, Peter ................ 20 Grote, Byron ................. 16 Hachey, Guy C...............19 Hayward, Tony..............16 Inglis, Andy...................16 Jobs, Steve...................15 Kleintop, Jeffrey...........23 Koder, Matthew..............1 Kurihara, Hiroshi .......... 15 Lau, Sven........................7 Lee, Sandra...................15 Lundgren, Terry ............ 17 Mangubat, Carissa ......... 8 Martis, Jharonne..........17 Mishr, Hemant..............21 Murdoch, Rupert...........18 Nayar, Vineet................21 Pandit, Vikram..............20 Pangilinan, Manuel.........8 Paulson, John ............... 15 Peltz, Nelson ................ 18 Pencak, Marko..............19 Poston, Daniel .............. 20 Revillame, Willie............8 Shiffler, George............19

Shu, David Dai..............17 Singhal, Amit................17 Smith, Roland...............18 Soning, Harvey.............12 Sze, Morgan..................15 Tregillis, Shane.............20 Trichet, Jean-Claude....3,7,22,23

Uka, Murat......................7 Wisot, Jeff....................17 Wong, Winnie...............15 Deng Xiaoli ................... 15 Yamashita, Makoto......23 Yoshii, Yutaka...............19 Yunus, Muhammad.........5 Chang Zhenming...........18

Corrections
Amplifications Yahoo Inc. holds a 35% stake in Yahoo Japan. A front-page article Thursday incorrectly said Yahoo owned a 30% stake. Witness accounts of a battle between Libyan rebels and forces loyal to leader Col. Moammar Gadhafi in the city of AlZawiya on Tuesday were provided by the Associated Press. A front-page article Wednesday on events in Libya omitted the attribution. Chinese businesses, including state-controlled companies, invested nearly $5 billion in U.S. firms last year. A Corporate News article Wednesday incorrectly said private-sector Chinese businesses were responsible for the investment.

Friday - Sunday, March 4 - 6, 2011

THE WALL STREET JOURNAL.

17

BUSINESS
FINANCE

U.S. retail sales perk up Google change stirs February store receipts show more shoppers willing to pay full price BY KAREN TALLEY

BY AMIR EFRATI

Bloomberg News

U.S. shoppers had spring in their step during February, with retail sales for the month showing solid spending. Fuller-priced clothing for warmer weather and the remnants of marked-down winter clearance merchandise both moved well, retailers said. For the month, they collectively turned in better-than-expected sales at stores open more than a year. February starts off the fiscal first quarter for most retailers and is the period’s smallest sales month. But it gives retailers a bead on just what kind of demand—and price acceptance—there is for their new spring and summer merchandise. Macy’s Inc. turned in a very strong performance as the retailer continued its strategy of tailoring merchandise to local tastes. Sales were strong at namesake stores and the company’s high-end Bloomingdale’s, with “consumer reaction to new spring merchandise encouraging,” Chief Executive Terry Lundgren said. Macy’s same-store sales rose 5.8%, ahead of the estimate of 3.7%. Fellow department store Kohl’s Corp. posted a 5% rise in samestore sales, beating expectations for 4.1%, while J.C. Penney Co.’s 6.4% growth compared with expectations for 4.2%, with both companies saying all divisions posted growth. High-end department stores continued to outperform, with especially strong sales that beat expectations by wide margins. Saks Inc. reported a 15% jump in same-store sales when 4.9% was expected. Nordstrom Inc. posted a 7.3% rise in comparable-store sales, handily beating projections for 4.2% growth.

Macy’s same-store sales rose 5.8% as it tailored merchandise to local tastes. While the February results are impressive for the most part, “They are not a firm confirmation retailers will have a good spring and full year,” said Arnold Aronson, managing director at retail consulting firm Kurt Salmon. “We’re still dealing with chronic issues like high unemployment, high gas-pump prices and longer-term the higher prices that will be passed on to consumers because of rising costs for cotton and other raw materials.” The 25 retailers that issued same-store sales showed a 4.2% gain from a year ago, according to Thomson Reuters. Analysts expected a 3.6% rise. The size of the anticipated growth indicates true demand, and not just bargain hunting, said Jharonne Martis, retail analyst at Thomson Reuters. Last month’s rise is on top of strong 4% growth a year ago, which presented the toughest comparison for retailers in five years. February same-store sales results did include some major com-

panies that missed analysts’ projections. Target Corp. posted a 1.8% rise when analysts were looking for 2.2% growth. The discounter said the showing met its own expectations, with its additions of fresh foods to stores and 5% discount for purchases on its credit and debit cards driving “meaningful incremental sales and traffic in stores.” Gap Inc., which installed a new North American brand chief in February, missed expectations, posting a 3% decline when a 0.9% drop decline was expected. Several retailers said March sales would be affected by Easter falling at the end of April this year instead of the beginning in 2010. Limited, for instance, said it sees March same-store sales roughly flat, hurt by about three to five percentage points. Although Limited didn’t elaborate, other retailers, including Target and Macy’s, said they expected to see pre-Easter sales pushed into April.

Bloomberg News

Getty Images

European Pressphoto Agency

Palm share | Apple and its suppliers are seeking to tap the tablet market

Apple’s iPad 2

Toshiba’s Folio 100

Samsung Galaxy

Asian firms confront challenge from iPad Continued from page 15 chips—the chips used to store songs, video and photos in electronic devices. Toshiba is the world’s second-largest supplier of these chips by revenue behind Samsung. Pricing in the NAND flash memory chip market has stayed firm this year thanks to strong demand from smartphone and tablet makers. Toshiba in November released its tablet, Folio 100, in Europe. The Folio 100 runs on Google Inc.’s Android operating system, but it has had little global presence in the market for tablet computers. The company said it plans to release an

Web winners, losers

Android-based tablet in the U.S. and Japan later this year. Samsung, which launched its Android-based tablet called Galaxy Tab last year to compete with the iPad, said in February it would be launching an upgraded version of the device. The upgraded model adds a brighter screen, dual-core processor and thinner design to its earlier Galaxy Tab, which has racked up about two million units sold since its launch in October. It also sports an eight-megapixel rear camera, twomegapixel front-facing camera as well as high definition video recording ability.

LG, which has been late in tablets, said last month its 8.9-inch tablet, which runs the Android software, will first hit the U.S. market in March through T-Mobile USA. —Juro Osawa in Tokyo and In-Soo Nam in Seoul contributed to this article.

WSJ.com ONLINE TODAY: See photos and video from the iPad announcement, plus review how Steve Jobs’s health has affected his Apple appearances at WSJ.com/Technology.

Google Inc. is creating a new set of winners and losers on the Web following its move to punish sites that it believed offered little useful information yet still ranked high in its search results. Websites affected by the change are retooling themselves to try to adapt to Google’s new standards. At the same time, several companies that benefited from the change—such as Encyclopaedia Britannica Inc.—have praised Google and are predicting increased revenue. Another site, Ezinearticles.com, which publishes articles by “expert authors” on everything from erectile dysfunction to fixing a leaky faucet, said it is racing to meet Google’s expectations and fears the 57 million unique monthly visitors it had before the change could be cut in half. In addition, several little-known blogs that generate original content complained that they were punished by the changes while sites that copied their content saw gains. The widening fallout follows Google’s announcement last week that it was changing its mathematical search formula to better weed out “low quality” sites that offer users little value. Some such sites offer just enough content to appear in search results and lure users to pages loaded with advertisements. Google didn’t name specific sites that would win or lose prominence in its rankings, but it said that original content “such as research, indepth reports, thoughtful analysis and so on” will move up. Google search engineer Amit Singhal said in an interview Wednesday that the overwhelming majority of responses to the change have been positive, based on Google’s regular

tracking of users’ satisfaction with their search results. “People are saying this change did exactly what it promised to do, which is to reduce low-quality content” and demote sites that copy content from original-content creators, Mr. Singhal said. He added that Google’s search results are “always a work in progress” and that the company is working on “further improvements to the algorithm” that helps rank sites according to how relevant they are to a search query. The algorithm “is not 100% accurate, even though it’s very, very accurate,” he said. The changes rolled out to U.S.based Google users last week, and the effect on websites will accelerate when Google extends the upgrade to non-U.S. users in the near future. Since the Google change, Britannica.com has been the top Google search result 15% more often than before and among the top three 18% more often, said Gregory Barlow, chief marketing officer of Encyclopaedia Britannica. The result: Visits from Google users rose 40%. Other benefactors of Google’s change include online retail sites such as Buy.com Inc. Jeff Wisot, Buy.com’s vice president of marketing, said that since last week, the site had seen an 11% increase in overall traffic from search engines, which make up a significant portion of its overall traffic. “We absolutely feel this will lead to an increase in sales,” he said. Mr. Singhal wouldn’t comment on the experience of individual sites. But he said “people generating original content and maintaining highquality websites” benefit Google. “If our algorithm has made a small amount of mistakes, we would study those and improve in the coming weeks,” he said.

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Friday - Sunday, March 4 - 6, 2011

CORPORATE NEWS

News Corp.’s plan for BSkyB proceeds LONDON—The U.K. government on Thursday gave provisional approval to News Corp.’s proposed takeover of British Sky Broadcasting Group PLC after the media giant agreed to spin off BSkyB’s 24-hour news channel. The move avoids a prolonged investigation by the nation’s competition regulator and brings News Corp.’s largest-ever acquisition a big step closer to completion. Jeremy Hunt, the secretary of state for Culture, Olympics, Media and Sport, who has been deliberating whether to trigger a lengthy antitrust review of the deal by the U.K. Competition Commission, said Thursday that he intends to accept a proposal from News Corp. that would enable it to sidestep one. A final decision will be made by Mr. Hunt after opponents of the deal have the chance to weigh in by March 21. The plan is for Sky News to be spun off as an independent public company. The ownership structure would be the same as the current BSkyB ownership structure, with News Corp. owning a 39.1% stake and BskyB’s public shareholders holding the rest. News Corp. and BSkyB announced the proposed takeover in June and said they would seek regulatory approval before negotiating a final price. The European Commission approved the deal in December. At today’s market value, buying the 60.9% of BSkyB that News Corp. doesn’t already own would cost roughly £8.7 billion ($14.2 billion). The proposed deal has generated fierce opposition from News Corp. rivals and some politicians in the U.K., who argue that News Corp. and its chairman and chief executive officer, Rupert Murdoch, already hold too much sway over U.K. media. News Corp. publishes several British newspapers, including the Sun and the Times of London. It also owns The Wall Street Journal. The public debate has centered around whether the proposed deal would hurt competition and limit

media choice or “plurality” in the U.K. To ensure “editorial independence and integrity in news reporting,” the new company would have a board made up of a majority of independent directors, including an independent chairman, and a corporate governance and editorial committee made up of independent directors who would have no other News Corp. interests. News Corp. won’t be allowed to increase its shareholding in the new company for 10 years without permission from the secretary of state. Mr. Hunt, who has consulted with Ofcom, the U.K. communications regulator, and the Office of Fair Trading, said he has followed independent advice in his deliberations over the deal. The new company would have guaranteed revenue streams from a 10-year carriage agreement with BSkyB and a seven-year renewable brand-licensing agreement to ensure its financial viability. News Corp. Thursday welcomed Mr. Hunt’s decision and said the spin-off of Sky News will keep it as a “distinct media enterprise.” BSkyB, the nation’s biggest pay-TV operator, said it will continue to cooperate with the ongoing regulatory process. Meanwhile, opponents of the deal lashed out at the latest developments. A spokesman for an alliance that opposes the deal, consisting of BT Group PLC, Guardian Media Group, Associated Newspapers Ltd., Trinity Mirror PLC, Northcliffe Media and Telegraph Media Group, said, “We deeply regret the fact that the Secretary of State is minded to clear the deal. The proposed undertaking is pure window-dressing. We shall be vigorously contesting this whitewash of a proposal during the consultation period, as well examining all legal options.” BSkyB’s independent directors rebuffed News Corp.’s 700 pence ($11.43) a share proposal when it was first made, indicating they would accept an offer closer to 800 pence. But the shares have steadily climbed since then.

Sony calms currency risk against the U.S. dollar Continued from page 15 Tokyo-based Sony said it hedges its currency exposure on a monthly or three-month rolling basis with basic forward contracts. Most of its overseas sales subsidiaries incur costs in either yen (for most Asian countries), dollars (for Latin America and Russia) or euros (for European countries). Sony’s biggest currency exposure is with the euro. A one-yen drop in the European currency’s average foreign-exchange rate for the full year results in a loss of seven billion yen in operating profit for the current year ending in March. The same move dealt a 5.5-billion-yen blow to Sony’s operating profit in the fiscal year ended in March 2002. Mr. Kurihara said part of the problem is that Sony has sold or closed many factories in Europe, reducing its costs in the euro. What’s

more, contract manufacturers with factories in the region also want to be paid in dollars, because they buy supplies in dollars as well. In China, Sony is likely to benefit if the yuan appreciates against global currencies as China loosens its currency controls, Mr. Kurihara said. Sony has a long position in the yuan because the company’s sales far outweigh its costs since contract manufacturers accept payment in dollars. Mr. Kurihara said he expects Sony’s contract manufacturers and Chinese suppliers to turn to the yuan for settlement in the future. This would reverse Sony’s current cost structure in China and leave it exposed to yuan appreciation. He added it would take at least five years for the full supply chain in China to move to settlement in yuan. If that happens, he said, “that would be a problem for Sony.”

Bloomberg News

Chairman Chang Zhenming, shown at last year’s earnings conference, confirmed Citic Group’s Hong Kong listing plans.

Citic Pacific profit soars BY POLLY HUI

Reuters. Revenue rose 54% to HK$70.61 billion. Mr. Chang said in a statement the Hong Kong-listed company, with operations including steel, iron-ore mining and property, has “emerged from the difficulties faced two years ago and has become stronger and better positioned for the future.” The blue-chip company had a net loss of HK$12.69 billion in 2008 owing to unauthorized bets made on the Australian dollar that caused billions of dollars in losses. Former Chairman Larry Yung and former Managing Director Henry Fan lost their jobs over the matter. Mr. Chang said the company has tightened its focus on its special steel, iron-ore mining and property businesses, which together accounted for 72% of its assets at the end of 2010. Citic Pacific’s special-steel operations contributed HK$2.1 billion to its overall net profit last year, up 49% from HK$1.42 billion the year before, owing to improved demand

HONG KONG—Citic Pacific Ltd. said net profit rose 50% in 2010 to 8.92 billion Hong Kong dollars (US$1.14 billion), its second-highest result on record, on improved special-steel sales and asset disposals. Chairman Chang Zhenming said Citic Pacific’s state-run parent, Citic Group, is working on a plan to list in Hong Kong. Earlier media reports said Citic Group, the largest conglomerate in China, plans to list in Hong Kong by the year end in a deal that would raise as much as 80 billion yuan (US$11.8 billion). “We do not have a concrete timetable for the listing plan. It involves a systematic change in the company. It also depends on whether we will meet the requirements of the regulator and the market conditions,” Mr. Chang said. Citic Pacific’s 2010 net rose from HK$5.95 billion dollars in 2009 and surpassed the HK$6.65 billion forecast analysts surveyed by Thomson

and as the company expanded production capacity and its product range. Mr. Chang said the company is on track to reach its annual production capacity target of nine million tons this year. Its iron-ore mining operations swung to a net loss of HK$346 million from the year-earlier net profit of HK$376 million following delays in construction of its magnetite iron ore project in Western Australia’s Pilbara region. Mr. Chang reiterated that Citic Pacific expects the project to begin exports this year and that all components needed for the operation of the first production line should be ready by the end of July. Citic Pacific’s property business contributed HK$960 million to its overall net profit in 2010, up 4.2% from HK$921 million the year before. Asset disposals contributed HK$4.40 billion to net profit last year, up 67% from HK$2.63 billion a year earlier.

Wendy’s prepares its return to Japan BY ANNIE GASPARRO AND MATT JARZEMSKY NEW YORK—Wendy’s/Arby’s Group Inc. is establishing a joint venture to re-enter the Japanese marketplace, while also considering investments in other markets such as China and Brazil. Wendy’s/Arby’s said it expects the venture’s first Wendy’s restaurant to open in Tokyo this year, and it plans to rapidly expand in the country over the next few years. The fast-food company previously had 71 Wendy’s restaurants in Japan, which were closed when the company withdrew from its partnership with beef-bowl restaurant operator Zensho Co. in 2009. In the next five years, Wendy’s/ Arby’s expects to surpass that number, Chief Executive Roland Smith said in an interview. The chain is now partnering with food product importer Higa Industries Co. on the venture. “The partnership is a significant indication of our long-term interest in the international marketplace,” Mr. Smith said. “We’ve been working on this for the better part of a year, and it just came to fruition over the past few weeks.”

Associated Press

BY LILLY VITOROVICH AND DANA CIMILLUCA

A Wendy’s restaurant is expected to open in Tokyo this year. The Atlanta-based company declined to comment on how much money it is investing in the deal. Wendy’s/Arby’s has 341 international restaurants, which it expects to increase to 1,000 over time. Mr. Smith said that since it left the Japanese marketplace, consumers have been voicing their desire to bring the burger chain back. The move comes amid the company’s strategic review of its Arby’s sandwich chain, which includes the possibility of a sale. The decision was seen as a concession by Chair-

man Nelson Peltz that the operation was struggling to compete in an industry where growth is driven by stealing market share from rivals or expanding overseas. The decision to consider selling Arby’s, he said, is “more influenced by our desire to focus our resources and efforts on the brand that we believe will provide the most shareholder value in the long term.” On Thursday, Wendy’s posted a narrower fourth-quarter loss of $10.8 million , compared with a year-earlier loss of $13.6 million.

Friday - Sunday, March 4 - 6, 2011

CORPORATE NEWS

Bombardier gets Chinese plane deal BY CAROLINE VAN HASSELT Bombardier Aerospace, a unit of Bombardier Inc. of Canada, said Thursday it has signed an $8 billion aircraft-leasing agreement with ICBC Financial Leasing Co. and ICBC’s major shareholder, Industrial Commercial Bank of China. The deal is the second big leasing agreement Bombardier has signed with a large Chinese bank recently, as the aircraft maker seeks to boost sales in China’s fast-growing market. Last year, Bombardier agreed to a $3.85 billion customer financing deal with China Development Bank Corp.’s leasing unit. The memorandum of understanding announced Thursday will provide advance-payment financing, delivery financing and other leasing services for customers of Bombardier’s Q-Series, CRJ Series and CSeries commercial aircraft, as well as several Bombardier business-jet models. “This MOU provides mutual benefits to Bombardier and ICBC Leasing since it addresses both parties’ objectives of providing optimized aircraft solutions to operators in

China and elsewhere,” Guy Hachey, president and chief operating officer of Bombardier Aerospace, said in a written statement. “We look forward to a long-lasting, fruitful cooperation with ICBC Leasing.” With big U.S. and European lenders tight-fisted after the global credit crisis, Chinese lenders have been seen as an important source of potential capital financing for airlines looking to restock their aging fleets. The Bombardier-ICBC accord could foreshadow a potential CSeries order in the next three to four months from a Chinese customer, said GMP Securities analyst Marko Pencak. “Given the size of the proposed facility, we are hard-pressed to imagine that demand for [business jets] and regionals would be anywhere close to $8 billion. In our view, only the CSeries has the potential to meaningfully draw on a facility of this size,” he said in a note. The company has previously said that it is in serious talks with a “handful” of customers, and sees tremendous potential for the narrowbody aircraft in China.

Itochu to buy Kwik-Fit for more than $1 billion BY HIROYUKI KACHI TOKYO—Itochu Corp. agreed to buy U.K. auto-repair business KwikFit (GB) Ltd. from European privateequity firm PAI Partners for £637 million ($1.04 billion), as the Japanese trading house strives to expand its overseas operations. The deal, announced Thursday, is the latest in a string of mergers and acquisitions by Japanese companies empowered by the strong yen to extend their global reach to counter slow growth at home. With annual sales of £875 million, Kwik-Fit operates 1,218 directly managed stores in the U.K., the Netherlands and France. The company’s core business is in the U.K., with 673 stores.

The purchase will increase Tokyo-based Itochu’s presence in Europe. Itochu already owns Stapleton’s (Tyre Services) Ltd., which operates 110 stores in the U.K. Yutaka Yoshii, general manager at Mito Securities, said Itochu’s expansion “will lead to stability in profit structure,” citing the high dependence of trading houses on natural resources. He said, however, that the outlook for trading-house shares remains cloudy, because investors are focusing less on the merits of higher crude-oil prices for the companies, and more on the possibility of a global economic slowdown from the increase. Itochu’s shares climbed 1.4% to 852 yen in Tokyo.

Firm lowers PC-growth outlook as tablets divert laptop demand BY MELODIE WARNER Consumer demand for Apple Inc.’s iPad and other tablet computers is sapping demand for traditional laptop computers, research firm Gartner Inc. said as it reduced its forecast for global computer shipments. “We expect growing consumer enthusiasm for mobile PC alternatives, such as the iPad and other media tablets, to dramatically slow home mobile PC sales, especially in mature markets,” George Shiffler, research director at Gartner, said Thursday. The technology researcher said it expects world-wide PC shipments to rise 10.5% to 387.8 million units in 2011, down from its November growth estimate of 14%. Gartner expects 2012 global PC shipments to

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THE WALL STREET JOURNAL.

increase 14% to 440.6 million units, down from its prior view of a 15% increase. Gartner said the rise of mobile devices with low-cost embedded WiFi modules and the limitations of the PC are two of many dynamics that played a significant role in its revised outlook. Tablet shipments have taken off with the success of Apple’s iPad, as well as competitors that use Google Inc.’s Android operating system. The iPad’s popularity has stoked both mobile-device and PC makers to develop tablets of their own to share the demand. Global shipments of tablet computers are expected to more than triple in 2011, researcher iSuppli Corp. said in January, though tabletunit shipments are still a fraction of the overall PC market.

ETHNIKI KEFALEOU S.A. Administration of Assets and Liabilities Company of the “NATIONAL BANK OF GREECE” Group CALL FOR TENDERS FOR THE SALE OF THE ASSETS AS SEPARATE ENTITIES OF “OLYMPIC AIRWAYS – SERVICES S.A.” – under liquidation “ETHNIKI KEFALEOU S.A. Administration of Assets and Liabilities”, seated in Athens, Greece (9a, Chryssospiliotissis str., 105 60) (hereinafter “the Liquidator”), in its capacity as special liquidator of the company “ OF “OLYMPIC AIRWAYS – SERVICES S.A.” – under liquidation”, seated in, Athens Greece (96, Syggrou Ave.) (hereinafter “the Company”), presently under special liquidation according to the provisions of Article 14A of Law 3429/2005 of the Greek Parliament, by virtue of the Decision No. 5716/2009 of the Athens Court of Appeal.

ANNOUNCES A CALL FOR TENDERS for the sale of the assets described below, which are being sold in separate entities

BRIEF INFORMATION ABOUT THE COMPANY The company was established in 1956 Law 3560/1956) under the company name “OLYMPIC AIRWAYS S.A.”. In 1975 the shares of OLYMPIC AIRWAYS S.A. were acquired by the state (Law 96/1975). In 2004 the Company was renamed “Olympic Airways – Services S.A. The Company’s objectives include the provision of all types of services to aircraft in relation to both domestic and international flights and cargo. On 2 October 2009 the Company was placed under special liquidation as provided by article 14A of Law 3429/2005 and amended by article 40 of Law 3710/2008.

ASSETS OFFERED FOR SALE The following assets are offered for sale on an individual basis, in an “as is, where is” condition. 1). Four (4) Auxiliary Power Units (APUS) & One Main Core Module CFM 56-3C1. 2). Main Landing Gear and Spare Components B.737-300/400 3). Aircraft Wheel Assemblies, Wheel Hubs, Brakes and Tires. 4). Chemicals for Aircraft Maintenance. 5). Raw Materials. 6). Aircraft B.737 (N.G.) Special Tools. 7). Shop & Ground Equipment, Tools and Hydraulic Power Unit (Hycom). 8). Aircraft Docking System 9). Aircraft Ground Support Equipment. 10). Fire extinguishers. 11). Office furniture. 12a). Link – Miles B 737-400. 12b). CAE Electronics B.737-200. 12c). THALES (ex- Thomson CSF) A300B4, Wicat A340 Static Maintenance Trainer, B.747-200 Static Simulator, B.737-200 Cockpit Procedures Trainer ( CPT), Link Instrument Flying Trainer 13). Metal Plasma Spray Equipment. 14a). Serviceable & unserviceable spare parts for aircraft B737 – 300/400 14b). Serviceable & unserviceable spare parts for aircraft A 300/600 14c). Serviceable & unserviceable spare parts for aircraft A340

OFFERING MEMORANDUM – ADDITIONAL INFORMATION Interested parties may obtain the Offering Memorandum describing the above assets, as well as any further information, upon signing a Confidentiality Agreement.

TERMS AND CONDITIONS OF THE AUCTION 1. Generally: The Public Auction shall be conducted in accordance with the provisions of article 14A of Law 3429/2005 (as amended by article 40 of Law 3710/2008), the terms and conditions set forth herein and the terms and conditions included in the Offering Memorandum, regardless of whether these are herein repeated or not. Submission of binding offers shall mean and be deemed as acceptance of all such provisions, terms and conditions. 2. Binding Offers: In order to participate in the Public Auction, interested buyers are hereby invited to submit sealed binding offers for one or more of the above groups of assets to the Notary Public of Athens, Mrs. Ioanna Gavrielli – Anagnostalaki, 50 Omirou str, 106 72 Athens (tel. +30 210 3629893) not later than 13.00 hours (local time) on March 28th, 2011. In order to participate in the sale procedure each interested buyer must show his identification card or any equivalent document. The bid must clearly specify the price offered for purchasing the assets payable in cash. The bids of all bidders shall be valid and binding until the notification of the successful bidder, as provided in clause 7 herein, and the bid of the successful bidder shall be valid and binding until the execution of the sale and purchase agreement. In case the price offered is specified in a foreign currency, the exchange rate shall be the one specified by the EURO “fixing” rate of the Bank of the Hellenic Republic, as in force on the previous day of submission of bids in the Tendering procedure. The bid must not include any terms, conditions or indefinite and vague expressions that cause doubt as to the amount offered or the mode of payment, or as to other matters relevant to the sale. 3. Letter of Guarantee: Each offer must include, in order to be valid, either a Bank Letter of Guarantee or a Bank crossed cheque in order of “ ETHNIKI KEFALEOU”, which have to be issued in both cases by a bank legally operating in Greece or by a branch of a foreign bank legally operating in Greece. The Letter of Guarantee must be drafted in Greek and must be valid until the execution of sale agreement (issued in accordance with the draft Letter of Guarantee included in Offering Memorandum).The amount of the Letter of Guarantee or of the Bank cheque is : § Œ 60.000 for the above group 1: (4) Auxiliary Power Units (APUS) & Main Core Module CFM 56-3C1 § Œ 10.000 for the above group 2: Main Landing Gear and Spare Components B.737-300/400 § Œ 30.000 for the above group 3: Aircraft Wheel Assemblies, Wheel Hubs, Brakes and Tires § Œ 1.500 for the above group 4: (Chemicals for Aircraft Maintenance). § Œ 15.000 for the above group 5: (Raw Materials) § Œ 5.000 for the above group 6: Aircraft B.737 (N.G.) Special Tools § Œ 60.000 for the above group 7: (Shop & Ground Equipment, Tools and Hydraulic Power Unit (Hycom) § Œ 10.000 for the above group 8: (Aircraft Docking System) § Œ 5.000 for the above group 9: Aircraft Ground Support Equipment § Œ 5.000 for the above group 10: (Fire extinguishers) § Œ 5.000 for the group 11:(Office furniture) § Œ 100.000 for the above group 12a: (Link – Miles B 737-400). § Œ 100.000 for the above group 12b: (CAE Electronics B.737-200) § Œ 100.000 for the above group 12c: (THALES (ex- Thomson CSF) A300B4, Wicat A340 Static Maintenance Trainer, B.747-200 Static Simulator, B.737-200 Cockpit Procedures Trainer ( CPT), Link Instrument Flying Trainer). § Œ 5.000 for the above group 13: Metal Plasma Spray Equipment § Œ 300.000 for the above group 14a: Serviceable & unserviceable spare parts for aircraft B737 – 300/400 § Œ 150.000 for the above group 14b: Serviceable & unserviceable spare parts for aircraft A 300/600 § Œ 400.000 for the above group 14c: Serviceable & unserviceable spare parts for aircraft A340 For the submission of an offer for each of the above groups a separate Letter of Guarantee or Bank cheque is necessary. The Letters of Guarantee shall be returned after the notification of the successful bidder. 4. Submissions: Binding offers, together with the Letter(s) of Guarantee, must be submitted in a sealed, opaque envelope. Submission of the offer shall be made either by the interested purchaser himself or by a lawfully appointed representative pursuant to a specific power of attorney, notarised and, if required, apostilled. Submission of offers on behalf of a third party shall be accepted only in case that is clearly stated specific notarial power of attorney is submitted (empowering the person that submits the offer to represent and submit the offer) and under the condition that the person that submits the offer gives full identification details of the third person and a personal guarantee for the performance of the obligations stipulated in the sale and purchase agreement. 5. The envelopes including the binding offers shall be opened by the above mentioned Notary Public, in her office at 14.00 hours, on March 28th, 2011. Any party that submitted a binding offer within the specified deadline, shall be entitled to attend the opening of offers and to sign the deed attesting the opening of the binding offers. 6. The Liquidator and the Creditors reserve the right either to reject any offer including terms or conditions, regardless of whether such an offer includes a higher offer price or not, or to consider such terms and conditions as non-existing, in which case the offer shall be binding pursuant to the rest of its content. 7. The successful bidder, according to applicable law, shall be the bidder, whose offer shall be determined, by the creditors specified in article 14A para. 1 of Law 3429/2005 representing at least 51% of the claims against the Company (hereinafter “the Creditors”), as the most profitable one for the Company’s Creditors, on the basis of the summary appraisal report of the Liquidator. 8. The Liquidator shall notify the successful bidder(s) in writing that it is mandatory that the successful bidder appears at the time and the place that such notification stipulates, for the execution of the sale and purchase agreement under the conditions of the offering memorandum, according to the terms of the bid as well as according to any other “best and final” terms that have been proposed by the creditors and have been accepted by the successful bidder. In case the successful bidder does not fulfil such obligation, the Letter of Guarantee will be forfeited in favor of the Company (under liquidation), due to the need that all kind of expenses and costs are compensated, without any further obligation of providing specific evidence; otherwise, the forfeiture of the Letter of Guarantee shall be deemed as a penalty. 9. All costs and expenses of any nature, for participation in the Tendering procedure, for the transfer of ownership and for any other action that should be taken in order that the transfer is effective and complete (including, non-exclusively, fees and compensations payable to/for notaries public, solicitors, etc.) shall be borne by the interested buyers and the successful bidder(s) respectively. Moreover, the V.A.T. as well as any other tax, levy, fees, royalties payable to any public authority or to any third party (with the exception of the exemptions awarded by applicable legislation) regarding participation in the Tendering procedure and the sale and purchase agreement, the transfer of ownership following the sale, the registrations and any other actions either prior or after the transfer of ownership, shall be solely borne by the successful bidder(s). 10. The Liquidator and the Creditors shall have no liability, nor any obligation whatsoever, to the interested purchasers with regard to the evaluation of the offers, nor to the award to the successful bidder, nor to any decision for repetition or cancellation of the Auction, nor to any other decision in connection with the proceedings and the conduct of the Auction. Interested buyers should conduct their own evaluation and study regarding the assets described in this Offering Memorandum, as well as regarding their legal and factual status, with the help of their technical and legal consultants. In particular, it is clearly specified that the buyer shall have no claims whatsoever against the Liquidator and the Creditors (e.g. in relation to any missing elements, a reduction in the purchasing price, non-implementation of the agreement, indemnity thereof, etc), in case the quantity of the assets on sale is found to be smaller than that stated in the Offering Memorandum on delivery, whereby articles 516 and 540 of the Civil Code are non-applicable. 11. The successful bidder is solely responsible for compliance with and execution of any conditions, approvals, procedures etc. etc. that may be required under applicable legislation both prior and after the execution of the sale and purchase agreement. The Liquidator is not in any way responsible for not making any reference herein, or in the Offering Memorandum, or for the aforementioned conditions, approvals, procedures etc. not being implemented due to rejection of approval, commitment etc. by any individual or by any legal entity, operating either in the public or in the private sector, or by any authority or due to any other grounds whatsoever. 12. Submission of binding offers shall not create any right for award of the sale of the asset(s), nor does this Call and/or the participation in the Auction create any right or claim against the Liquidator, the Company under Liquidation and the creditors and/or the Creditors for any reason whatsoever. 13. It is noted that the assets on sale that consist group 4,5,7,8,10,11,12c (items 4.5) and group 13(item 10) are located at Buildings 56 and 57 of the International airport of Athens which are hired by “OLYMPIC ENGINEERING S.A.” and from there the highest bidder will dismantle and remove them. This has to be done the latest within 20 days from the execution of sale and purchase agreement regarding the assets described in all above groups and the latest within 2 months from the execution of sale and purchase agreement regarding the assets described in group 8 and under the purchaser’s responsibility, supervision and expenses. The Liquidator and the Company under liquidation shall have no liability to the highest bidder neither for any loss or damage of the assets after the signing of the sale and purchase agreement – as the receipt and delivery of the assets will be completed with the signing – nor for any damage that may occure during the dismantle or transportation of the assets on sale, to third persons which must be fully restored. 14. All the assets shall be transferred in an “as is, where is” condition, in the factual and legal condition and in the place located at the date of execution of the relevant sale and purchase agreement 15. In case that, further to the resolution of the creditors specified in article 14A para. 1 of Law 3429/2005, the sale is cancelled, the Letter of Guarantee will be released, without any interest. In case the sale is not effected due to any reason attributable to the entity or individual that required the issue of the Letter of Guarantee, such Letter of Guarantee shall be forfeited in favor of the Company (under liquidation) 16. This Call has been drafted in Greek and translated into English. In any event, the Greek version shall prevail. Interested parties may obtain the Offering Memorandum, as well as any further information, upon signing a Confidentiality Agreement. Please contact either the Division of Liquidations of the Liquidator “Ethniki Kefaleou S.A. Administration of Assets and Liabilities”, 9a Chryssospiliotissis St. Athens 105 60, Greece, Tel.:+30-210-3340882-4, fax: +30-210-321.7905, e-mail address: [email protected] or the specified Attorney of the Liquidator, Mr. Karalis M., Athens International Airport, Building 97, tel.: +30 210 3563.611, Fax +30 210 3563.486, e-mail address [email protected]

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Friday - Sunday, March 4 - 6, 2011

MARKETS

Citigroup’s Pandit returns to India In first official visit to his country of birth since becoming CEO, he is hit with hard questions from students NEW DELHI—It was a tough crowd, but Vikram Pandit, chief executive of Citigroup Inc., managed to win over the room full of finance majors gathered to meet him in an Obama-esque town hall gathering in the first-floor ballroom of the Indian capital city’s regal Imperial Hotel. Mr. Obama had it easier, though. There was no dancing or hip-shaking here. This crowd meant business. It was all Street talk and all earnest. So Mr. Pandit, despite trying not to, was forced to be the professional banker that he is, and offer up statements similar to what he might exchange with his peers on Wall Street. Since taking over as chief executive in December 2007, Mr. Pandit is on his first official visit to his country of birth. His first stop was in Mumbai, where Citigroup hosted a cocktail reception in the glittering ballroom of the Taj Mahal Palace so he could meet some of his largest revenue generators, the firm’s clients. He has been in Delhi for two

Olivier Culmann for The Wall Street Journal

BY MEGHA BAHREE

‘Are there only finance majors?’ asked Vikram Pandit at the Imperial Hotel. days attending the spring meeting of the International Institute of Finance. Now that Citigroup is no longer on the verge of collapse, or owned by the U.S. government or still running huge losses—last year it netted globally $10.6 billion on revenues of $86.6 billion—the man at the helm finally has time to breathe, and to

check in on business in other parts of the world to gauge the growth opportunities. Mr. Pandit addressed the townhall-style meeting in Delhi at the Imperial Hotel, aglitter under three enormous chandeliers. Under their bright white light in the rectangular room, 150 men and women from business schools and graduate

schools across the city listened, with another 260 beaming in via a videoconference feed. And then started the volley of hard questions: During the financial crisis, the U.S. government infused dollars in the system but that money ended up as credit loans in India and other countries. How did this help the U.S. financial system? Another: How do you expect to compete with the private sector banks and other foreign banks in India? And then: How do you hope to increase credit to the small and medium companies across India and increase their access to financial products? And finally: Where does Citi see itself better positioned—in India or China with their respective governance and economic structures? Mr. Pandit sidestepped this question, saying, “There is a lot of convergence in the world,” and adding that executives “have to be realistic that we can get to the same point from different routes.” Mr. Pandit finally said: “Are there only finance majors in this room?

Anyone from marketing? We need to talk about the brand pretty soon!” In India today, Citigroup has 42 branches, 7,500 employees and services 45,000 companies. The bank doesn’t break out its revenues by country and will only say that it has been consistently profitable in India. Last year, the Asia-Pacific region provided 43% of net profits. Mr. Pandit says he wants to serve more midsize companies and is working with the Central Bank of India on regulation to see how the Citi can increase the number of bank branch offices. Reserve Bank of India rules restrict the number of branches that foreign banks can open in India each year. Other than diplomatically avoiding the India-China debate, Mr. Pandit won over the students with his final sales pitch: Whether for international experience or training and development of a suite of fancy financial products, whatever is your financial major’s hearts’ desire, “being at Citi reminds me of being in a candy store. We have everything, so whatever you want, we can offer it to you.”

Chi-X might open in Australia SEC examines how banks by October, giving ASX a rival handle troubled loans BY GEOFFREY ROGOW SYDNEY—A potential competitor to the Australian Stock Exchange could be in operation as soon as October, according to guidelines released Thursday by the Australian Securities & Investments Commission. Chi-X Global, partly owned by Nomura Holdings Inc., applied for an Australian license three years ago and should receive a full exchange license in April. There would then be a lag time as regulators review the firm’s trading technology before Chi-X could begin operations. Complicating a review of Chi-X, late last year Australian exchange operator ASX Ltd. reached a preliminary agreement to be acquired by Singapore Exchange Ltd. for 8.4 billion Australia dollars (US$8.54 billion), a deal that has faced stiff political opposition locally. ASX cited Chi-X’s approval in agreeing to the merger, which has since been followed by the proposed US$10 billion tie-up of NYSE Euronext Inc. and Deutsche Börse AG. Moreover, a May 6 “flash crash” in the U.S., in which the Dow Jones Industrial Average lost 600 points in about five minutes, has sharpened regulators’ focus on high-frequency trading, in which firms use supercomputers to hunt for market signals, such as the movement of interest rates, and make trades in

fractions of a second in an attempt to catch fleeting moves. The growth of this type of trading has heightened competition between stock-trading venues for brokers’ orders, helping drive the mergers. The timetable for Chi-X’s start of operations will allow brokers more than six months to ensure connection with Chi-X and for adherence to any new market rules aimed at ensuring the local market’s integrity as it moves from a single market operator.

The timetable for Chi-X’s start will allow brokers more than six months to ensure connection with ChiX and for adherence to any new market-integrity rules. “The timetable also depends on market operators and market participants taking all necessary steps to get ready for competition over the coming period,” said ASIC Commissioner Shane Tregillis. ASIC will complete new integrity rules by April, and the commission will continue to communicate with brokers and the two trading venues. “Chi-X Australia looks forward to

working closely with ASIC and participants as we move into this final phase of market launch,” said Peter Fowler, chief operating officer of Chi-X Australia. ASIC’s market-integrity rules are certain to include a clause for circuit breakers that halt trading under extreme stock moves, though such a rule was also in place in the U.S. when its flash crash occurred. A commission decision on dark pools, a fast-growing form of alternative trading where money managers trade large blocks of shares anonymously, was deferred. The commission said only that it would enhance the reporting of dark-pool operators. ASIC previously said it would force any trades of less than A$20,000 to take place on exchanges, while forcing dark-pool operators to report periodically. Promising lower trading costs, Chi-X’s entrance has been welcomed by brokers locally. The firm has applied for a “maker-taker” pricing model, where traders adding liquidity to the market receive a small payout while those taking the other side of offers pay a small fee. ASIC said Thursday it has no plans to ban this type of model. However, with ASX still acting as the country’s lone clearer of stock trading, costs aren’t expected to move lower too quickly.

New to the market

April 2011

April

July

SeptemberOctober

OctoberNovember

Timetable for the introduction of market competition in Australia

ASIC presents final marketintegrity rules to the government.

Upon granting of government license to Chi-X, integrity rules are published.

ASIC consults with industry on potential amendments to rules.

Chi-X completes connections to market participants and data vendors.

Subject to ASIC approval, Chi-X commences full operations.

Source: Australian Securities & Investments Commission (ASIC)

BY ROBIN SIDEL AND JEAN EAGLESHAM

The Securities and Exchange Commission is scrutinizing U.S. banks that have restructured troubled loans in order to make them appear healthier than they really are, according to people familiar with the situation. Officials at the SEC are seeking information from an unknown number of regional and community banks with large concentrations of commercial real-estate loans, these people said. The agency is zeroing in on a variety of practices used by financial institutions as they work to clean up loan portfolios that were bruised by the financial crisis or recession. While the U.S. banking industry is in recovery mode, many banks still are weighed down by soured loans. Among the practices being examined by the SEC is one known as “extend and pretend” or “amend and pretend,” in which a bank gives a borrower more time to repay a loan. Banks are permitted to modify loans to help troubled borrowers. The SEC also is looking into a more common practice called “troubled debt restructurings.” Such restructurings involve modifying an existing loan by changing the terms or breaking the loan into pieces. The scrutiny comes as banking regulators in the past year have supported the use of troubled debt restructurings, which may have opened the door to abuses. Although the practice is permitted, SEC officials are concerned about the way some banks are accounting for such loans, according to people familiar with the probes. Banks sometimes break up a troubled loan in order to place a portion of it on “performing” status, a sleight of hand that reduces the reserves needed to be set aside. It isn’t clear which banks have

been approached by the SEC for more information about extend-andpretend loans or restructurings of troubled loans, though several financial institutions have disclosed recently that they are the subject of SEC inquiries related to commercial loans prior to 2010. Fifth Third Bancorp, a regional bank based in Cincinnati that said Monday it has been subpoenaed by the SEC, declined to comment Wednesday when asked if the inquiry is related to the handling of troubles loans. Fifth Third Chief Financial Officer Daniel Poston said Tuesday that the SEC hasn’t told the bank about the specific purpose of the inquiry. Fifth Third’s “loan accounting is and has been appropriate,” he said. Restructurings of troubled debt played a part in last year’s collapse of ShoreBank Corp., a Chicago lender. A report released Wednesday by the Federal Deposit Insurance Corp.’s Office of the Inspector General concluded that ShoreBank failed to “accurately identify and account for” troubled debt restructurings. The report said ShoreBank restructured “numerous” loans in 2009 without accounting for them properly “despite rate and/or other concessions provided to financially distressed borrowers.” U.S. banks hold an estimated $156 billion of souring commercial real-estate loans, according to research firm Trepp LLC. About twothirds of commercial real-estate loans maturing at banks from now to 2015 are underwater, meaning the property is worth less than the amount owed. As of Dec. 31, 7.8% of commercial-property loans held by banks were delinquent, down from 8.6% a year earlier, according to Trepp. —Lingling Wei contributed to this article.

Friday - Sunday, March 4 - 6, 2011

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THE WALL STREET JOURNAL.

MARKETS

Bonds blemish Buffett’s year Berkshire records $1 billion write-down on utility investment in an otherwise banner 2010 BY SERENA NG

Rocky road Price of a 10.25% TXU bond* that matures in Nov. 2015

BY ALEX MACDONALD $80 70 60 50 40 Bloomberg News

Warren Buffett has recorded a big loss on a troubled investment, one he made near the height of the leveraged-buyout boom. In a blemish on an otherwise banner year for Mr. Buffett’s Berkshire Hathaway Inc., the Omaha, Neb., conglomerate recorded a $1 billion fourth-quarter write-down on $2.1 billion in “junk” bonds of the Texas power producer formerly known as TXU Corp., which went private in a record $45 billion buyout in 2007. Berkshire purchased the bonds issued by the renamed company, Energy Future Holdings, and a subsidiary in late 2007 at a discount to their face value. At the time, the billionaire investor called the purchase a one-of-a-kind investment that reflected his bullish view on the utility sector, rather than on the junk-bond market or leveraged buyouts per se. Mr. Buffett has previously expressed disdain for private-equity buyouts that employed excessive leverage. The bonds, which yielded more than 10% when Berkshire bought them, had been in an unrealized loss position for more than two years. In recording the $1 billion “other than temporary” impairment loss on the debt in the fourth quarter of 2010, Berkshire said it is unlikely to receive all the money it is owed, indicating it expects the bonds to default or be restructured. Berkshire still holds the bonds and didn’t name the debt issuer in its annual report, which was released Saturday. The impairment charge, which was required by accounting regulations, didn’t change Berkshire’s book value, which previously included the unrealized losses on the bonds. Berkshire recognized the charge in fourth-quarter earnings, which rose 43% to $4.4 billion, boosted by profits from railroad operator Burlington Northern Santa Fe and other businesses. Energy Future Holdings has been struggling under a gargantuan debt load, largely because of a sustained drop in the price of natural gas, which determines what the com-

2009

'10

'11

*Bond issued by Texas Competitive Electric Holdings LLC Source: MarketAxess

pany can charge for power. The 2007 buyout, led by private-equity firms headed by Kohlberg Kravis Roberts & Co., TPG Capital and Goldman Sachs Group Inc. took place at a time when prices of natural gas were about double what they are today. Energy Future last year chipped away at its debt load by getting some investors to exchange their bonds, but market prices still indicate a high probability of default. On Wednesday, some of its bonds were trading at between 40 and 60 cents on the dollar, according to data from MarketAxess. Berkshire has other large investments in regulated utilities through its MidAmerican Energy Holdings subsidiary and those are performing fairly well, producing $1.1 billion of Berkshire’s $13 billion in 2010 earnings. Mr. Buffett’s latest annual letter to shareholders included a section about the perils of too much borrowed money, or leverage. “Once having profited from its wonders, very few people retreat to more conservative practices,” he wrote, noting that “leverage is addictive” and it can be “lethal to businesses.” He didn’t refer to any particular companies, but noted how companies with large debts typically assume they can refinance it as it comes due.

But when there are companyspecific problems or a world-wide shortage of credit, he wrote, “maturities must actually be met by payment. For that, only cash will do the job.” Separately, Mr. Buffett, who recently told investors that Berkshire is seeking major acquisitions, said Wednesday in an interview on CNBC that he sees no target with a “high probability” of being pursued right now. Berkshire’s chairman and chief executive said Berkshire is always considering potential deals, “but certainly nothing that’s a high probability at the moment.” Mr. Buffett said Berkshire had a potential acquisition “that got taken out just a day or two ago” by another company. He didn’t specify either the target or its rival suitor, but said it wasn’t as big as last year’s $26.5 billion purchase of Burlington Northern. On Tuesday, PPL Corp, an Allentown, Pa., utility operator, said it would buy a large power distribution business in the U.K. in a $6.4 billion deal. Berkshire’s MidAmerican Energy unit was reportedly one of the interested bidders in the U.K. business. In his letter to shareholders last weekend, Mr. Buffett wrote that Berkshire is “prepared” for a large acquisition.

Asked about problems that state and local governments face in meeting worker pension obligations, Mr. Buffett said those entities should stop making new promises. “You may be able to fulfill the ones that you’ve got up to this point, but you say, ‘Look, this is going to bust us. I’m going to make no more new promises.’ ” An example of this, he said, are the hefty returns often assumed by those who run and invest in pension funds. Mr. Buffett described expected returns of as much as 8% “crazy” and said such assumptions require a “real overhaul.” He also warned that some current policies, if left unchanged, will lead the U.S. into inflation. “We’re following policies that will lead to a lot of inflation down the road unless changes are made.” The U.S., he said, can’t “run the kind of deficits we’re running and other policies … without it being enormously inflationary.” On the question of government stimulus spending, Mr. Buffett played down the need for more right now. Mr. Buffett anticipates more hiring by businesses in 2011 compared with last year. “I see businesses improving,” he said. —Mark Taylor contributed to this article.

India’s HCL rethinks its currency hedges BY MEGHA BAHREE NEW DELHI—After losing hundreds of millions of dollars on a long-term currency-hedging strategy, Indian information-technology company HCL Technologies Ltd. is taking a more short-term view. HCL, which gets 96% of its $3 billion in revenue from overseas, has developed its own process of hedging that doesn’t involve taking a clear bet on exchange rates. “In the absence of a wise model of predicting currency, we have adopted a layered hedging so that you have a uniform position,” Vice Chairman and Chief Executive Vineet Nayar said in an interview with The Wall Street Journal. “So instead of significantly swinging left, or swinging right, you are able to achieve middle of the street,” he said. HCL, whose shares are listed in India, learned its hedging lesson the

Glencore says profit rose 31% last year

hard way. In July 2007, it took a consultant’s advice and began taking a view on where exchange rates would be in two or three years. The company bet that the rupee would continue to rapidly appreciate against the dollar and other currencies. Instead, the opposite has happened, and HCL’s long-term hedge on more than $1 billion cost it almost $300 million over three years. It was time for a new strategy, Mr. Nayar said. HCL decided to cover its risks and not worry about making money through foreign-exchange plays, as some companies have sought to do, he said. “It’s not a profit-making strategy but to cover your risks so you do not get wrong-stepped on issues,” Mr. Nayar said. HCL does that by spreading its risk across multiple currencies, he said. As a result, only 55% of its revenue is in U.S. dollars, he said, and the rest is spread across euros,

pounds and Japanese yen. A few years ago, a greater percentage of revenue was in dollars. The company also adopted a policy of hedging its currency exposure monthly for each of the next 12 months. The result is a layered book built over time rather than one taking a view on currency moves. The third piece in its strategy is to have a short-term view in the belief that currencies are too volatile to hedge for a longer period. “I truly believe that six months to 12 months is what you should predict and beyond that you have to handle it as a business. You can’t handle it as currency hedging,” he said. Should the dollar-rupee exchange rate go “completely crazy,” the solution is to go back to the customers and renegotiate the rates, he said. Once HCL devised this policy, it back-tested it using a model for the

last 10 years—month by month, week by week, day by day—starting from 2000, he said. And other than in one year, the results showed that profits and losses from currency fluctuations averaged out. Hemant Mishr, managing director and head of global markets at Standard Chartered Bank South Asia, said he can’t speak specifically to HCL’s strategy, but many large Indian companies get large chunks of revenue from overseas. These firms feel worried about fluctuating foreign-exchange rates and interest rates, particularly in light of the huge movements since the global recession. To the extent they can, the firms want to reduce this risk, he said. Among the strategies employed, he said, are having an automatic hedge strategy within the business so receivables and payables offset each other, or spreading out receivables across multiple currencies.

LONDON—Swiss commodities concern Glencore International AG reported a 31% rise in full-year earnings that reflected an improved pricing environment for metals and minerals. The company said net profit for 2010 rose to $1.29 billion from $983 million a year earlier. Revenue rose 36% to $144.98 billion from $106.36 billion; earnings before interest and taxes and exceptional items, or Ebit, increased 60% to $5.29 billion. The rise was largely driven by the company’s industrial assets, which contributed $2.95 billion to Ebit, up 72%. Glencore’s trading and marketing activities contributed $2.34 billion, up 47%. The closely held company said the largest contribution to Ebit was its metals and minerals segment, which benefited from stronger metals prices and improving market sentiment in end-user industries such as automotive and construction. The agricultural products segment also contributed significantly, reflecting tight supplies in markets where unusual weather conditions affected such exporters as Russia, Ukraine and Australia. Glencore didn’t disclose whether it plans to publicly list its shares. Glencore paved the way for such a listing when it issued a $2.2 billion convertible bond at the tail end of the financial crisis. The firm now is preparing a dual listing in London and Hong Kong, according to people familiar with the matter. The listing may happen in the second quarter and value the company at $48 billion, a person familiar with the matter said. The listing is expected to provide the closely held company with an alternative way to raise cash after being reliant on debt markets for financing. Some market participants also consider it a necessary first step to a merger with Anglo-Swiss miner Xstrata PLC. Glencore owns a 34.5% stake and is thought to be interested in merging its business with Xstrata, but the company’s inability to arrive at a transparent valuation on Glencore’s business is considered a sticking point. Glencore’s strong performance in metals, minerals and agricultural segments was partially offset by a poorer performance from its energy-products segment. Oil marketing was “subdued in an unusually stable price environment characterized by surplus refinery capacity and a weak freight market,” Glencore said. Coal output was hurt by heavy rainfall in South Africa and Colombia. Glencore expects the energy-products segment to return to more normal operating conditions in 2011. Glencore reported cash and undrawn bank facilities of about $4.22 billion at year end, above its internal minimum target of $3 billion. Net debt rose to $14.8 billion from $10.2 billion, but coverage ratios improved, the company said. Net debt to earnings before interest, taxes, depreciation and amortization, or Ebitda, was 2.38, down from 2.59 at the end of 2009.

22

THE WALL STREET JOURNAL.

Friday - Sunday, March 4 - 6, 2011

INTERNATIONAL INVESTOR

Trichet comments drive euro higher BY JAVIER E. DAVID

the market enough.” As a result, Mr. Gilmore added that “you kind of have to recalibrate” the euro’s range, which he now expects to trade between $1.40 and $1.50. In late-morning trading, the euro pared some of its gains but was still nearly one cent higher on the day versus the dollar around $1.3947, compared with $1.3867 late Wednesday. That was still its strongest level since Nov. 9. The euro changed hands around 114.88 yen, its highest since Nov. 22. Meanwhile, the dollar bought 82.40 yen from 81.89 yen. The U.K. pound was at $1.6260 from $1.6327, while the dollar fetched 0.9310 Swiss franc from 0.9236 franc. The market’s focus on the ECB stole the spotlight from U.S. jobless claims, which beat market expectations by coming in below the 400,000 level. Coupled with Wednesday’s private-sector report that also showed strong job creation, the figures augured well for Friday’s key February nonfarm-payrolls data. But the dollar has been battered on all fronts by surging oil prices and interest-rate expectations. Instability in Libya has deprived the dollar of investors seeking sanctuary in the U.S. currency’s status as a haven, as investors fear a global oil shock that could spur a dramatic acceleration of inflation.

NEW YORK—The euro surged Thursday to its highest levels in more than three months against the dollar and yen, as a forceful stance against inflation CURRENCY from the European MARKETS Central Bank raised expectations that an interest-rate increase in the euro zone was imminent. In a widely expected decision, the ECB held borrowing costs at 1%. But in a news conference following the decision, ECB President JeanClaude Trichet said that “strong vigilance” was warranted against rising prices in the 17-nation currency bloc. Europe has yet to negotiate a solution to its wrenching debt crisis, and peripheral economies like Portugal, Spain and Ireland are still suffering from weak growth prospects. Yet by warning that the central bank could very well raise rates at its next meeting, Mr. Trichet left little room for interpretation and overwhelmed better-than-expected U.S. jobless and service-sector data that otherwise would have helped the dollar. Mr. Trichet’s hawkish tone “was definitely a surprise,” said David Gilmore, partner and analyst at FX Analytics in Connecticut. “The only reason they didn’t raise [rates] today was because they didn’t prepare

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NAV GF AT LB DATE CR

NAV

—%RETURN— YTD 12-MO 2-YR

n AHW CAPITAL MANAGEMENT Tel (+49) 1805 - 23 82 82 www.ahw-capital.com AHW Top-Div.Int.

GL

EQ LUX 03/02 EUR

52.73

3.1

5.8

21.5

15.1 14.1 17.4 18.1 16.2 16.9 18.3 9.5 9.5 9.5 9.5 9.5 8.7 8.7 8.7 8.7 8.7 9.0 9.0 10.1 9.1 9.2 9.2 8.1 8.1 8.1 8.6 8.7 9.7 15.3 14.2 14.8 16.3 8.1 8.1 8.2 8.2

32.2 30.9 35.4 36.2 34.1 34.9 36.5 19.4 19.4 19.4 19.4 19.4 18.6 18.6 18.6 18.6 18.6 18.9 18.9 20.1 27.8 27.9 27.9 26.6 26.7 26.6 27.2 27.3 28.4 50.8 49.2 50.1 51.9 27.1 27.1 27.2 27.2

n ALLIANCE BERNSTEIN www.alliancebernstein.com/investments Tel. +800 2263 8637 Am Eq Blend A Am Eq Blend B Am Growth A Am Growth AX Am Growth B Am Growth C Am Growth I Am Income A Am Income A2 Am Income A2 Am Income AT Am Income AT Am Income B Am Income B2 Am Income B2 Am Income BT Am Income BT Am Income C Am Income C2 Am Income I Emg Mkts Debt A Emg Mkts Debt A2 Emg Mkts Debt AT Emg Mkts Debt B Emg Mkts Debt B2 Emg Mkts Debt BT Emg Mkts Debt C Emg Mkts Debt C2 Emg Mkts Debt I Emg Mkts Growth A Emg Mkts Growth B Emg Mkts Growth C Emg Mkts Growth I Eur Income A Eur Income A Eur Income A2 Eur Income A2

US US US US US US US OT OT OT OT OT OT OT OT OT OT OT OT OT GL GL GL GL GL GL GL GL GL GL GL GL GL OT OT OT OT

EQ EQ EQ EQ EQ EQ EQ OT OT OT OT OT OT OT OT OT OT OT OT OT BD BD BD BD BD BD BD BD BD EQ EQ EQ EQ OT OT OT OT

LUX LUX LUX LUX LUX LUX LUX LUX LUX LUX LUX LUX LUX LUX LUX LUX LUX LUX LUX LUX LUX LUX LUX LUX LUX LUX LUX LUX LUX LUX LUX LUX LUX LUX LUX LUX LUX

Sector Equity Financial Services

BY BRADLEY DAVIS

Leading 10 Performers

02/28 USD 02/28 USD 03/02 USD 03/02 USD 03/02 USD 03/02 USD 03/02 USD 03/02 USD 03/02 HKD 03/02 USD 03/02 HKD 03/02 USD 03/02 USD 03/02 HKD 03/02 USD 03/02 HKD 03/02 USD 03/02 USD 03/02 USD 03/02 USD 03/02 USD 03/02 USD 03/02 USD 03/02 USD 03/02 USD 03/02 USD 03/02 USD 03/02 USD 03/02 USD 03/02 USD 03/02 USD 03/02 USD 03/02 USD 03/02 EUR 03/02 USD 03/02 EUR 03/02 USD

11.77 10.94 35.96 39.08 29.89 32.37 40.23 8.83 165.74 21.27 68.65 8.81 8.83 141.66 18.18 69.04 8.86 8.83 27.12 8.83 16.19 22.48 16.24 16.19 21.40 16.21 16.19 21.97 16.19 38.41 32.18 33.12 42.98 6.87 9.53 14.33 19.87

3.4 3.3 6.8 6.9 6.6 6.7 6.9 1.2 1.1 1.1 1.2 1.2 1.1 1.0 1.0 1.0 1.0 1.1 1.0 1.3 -0.4 -0.3 -0.4 -0.5 -0.5 -0.5 -0.4 -0.5 -0.3 -2.9 -3.1 -3.0 -2.8 1.7 1.7 1.9 1.9

FUND NAME

NAV GF AT LB DATE CR

Eur Income AT Eur Income B Eur Income B Eur Income B2 Eur Income B2 Eur Income BT Eur Income C Eur Income C Eur Income C2 Eur Income C2 Eur Income I Eur Income I Eur Strat Value A Eur Strat Value A Eur Strat Value I Eur Strat Value I Eur Value A Eur Value A Eur Value B Eur Value B Eur Value C Eur Value C Eur Value I Eur Value I EuroZone Strat Val AX EuroZone Strat Val AX EuroZone Strat Val BX EuroZone Strat Val BX EuroZone Strat Val CX EuroZone Strat Val IX EuroZone Strat Val IX Gl Balanced (Euro) A Gl Balanced (Euro) B Gl Balanced (Euro) C

OT OT LUX 03/02 OT OT LUX 03/02 OT OT LUX 03/02 OT OT LUX 03/02 OT OT LUX 03/02 OT OT LUX 03/02 OT OT LUX 03/02 OT OT LUX 03/02 OT OT LUX 03/02 OT OT LUX 03/02 OT OT LUX 03/02 OT OT LUX 03/02 EU EQ LUX 03/02 EU EQ LUX 03/02 EU EQ LUX 03/02 EU EQ LUX 03/02 EU EQ LUX 03/02 EU EQ LUX 03/02 EU EQ LUX 03/02 EU EQ LUX 03/02 EU EQ LUX 03/02 EU EQ LUX 03/02 EU EQ LUX 03/02 EU EQ LUX 03/02 EU EQ LUX 03/02 EU EQ LUX 03/02 EU EQ LUX 03/02 EU EQ LUX 03/02 EU EQ LUX 03/02 EU EQ LUX 03/02 EU EQ LUX 03/02 EU BA LUX 03/02 EU BA LUX 03/02 EU BA LUX 03/02

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FUND NAME

NAV

EUR EUR USD EUR USD EUR EUR USD EUR USD EUR USD EUR USD EUR USD EUR USD USD EUR EUR USD USD EUR USD EUR EUR USD EUR USD EUR USD USD USD

6.87 6.87 9.53 13.21 18.32 6.87 6.87 9.53 14.21 19.70 6.87 9.53 9.28 12.87 9.59 13.30 10.10 14.00 12.73 9.18 9.71 13.46 16.32 11.77 11.55 8.33 7.40 10.26 6.27 12.70 9.16 17.32 16.68 17.12

—%RETURN— YTD 12-MO 2-YR 1.9 1.6 1.6 1.8 1.8 1.8 1.7 1.7 1.9 1.9 1.8 1.8 3.3 3.3 3.6 3.6 3.4 3.4 3.1 3.1 3.3 3.3 3.5 3.5 6.0 6.0 5.7 5.7 5.7 6.0 6.0 NS NS NS

8.2 7.3 7.3 7.4 7.4 7.5 7.6 7.6 7.7 7.7 8.6 8.6 10.7 10.7 11.6 11.6 12.1 12.1 10.9 10.9 11.5 11.5 13.0 13.0 18.8 18.8 17.6 17.6 18.1 19.7 19.7 NS NS NS

FUND FUND RATING * NAME

NS NS NS NS NS NS NS NS NS NS

FUND MGM'T CO.

NAV GF AT LB DATE CR

NAV

27.2 26.3 26.3 26.2 26.2 26.3 26.5 26.5 26.6 26.6 27.7 27.7 29.9 29.9 31.0 31.0 32.2 32.2 30.9 30.9 31.6 31.6 33.2 33.2 30.9 30.9 29.5 29.5 30.4 32.0 32.0 NS NS NS

—%RETURN— YTD 12-MO 2-YR

2352.40

1.7

32.3

54.4

99.90

-18.5

-3.4

10.2

n CREDIT PACIFIC ASSET MANAGMENT www.creditpacific.com GL OT WSM 03/01 USD

NOTE: Changes in currency rates will affect performance and rankings. KEY: ** 2YR and 5YR performance is annualized NA-not available due to incomplete data; NS-fund not in existence for entire period

provement in the jobs market. Initial jobless claims fell by 20,000 to 368,000 in the week ended Feb. 26, the Labor Department said Thursday in its weekly report. It was the lowest level since May 2008. Economists surveyed by Dow Jones Newswires had expected claims would rise to 400,000.

FUND NAME

NAV GF AT LB DATE CR

Gl Balanced (Euro) I Gl Balanced A Gl Balanced B Gl Balanced C Gl Balanced C Gl Balanced I Gl Bond A Gl Bond A2 Gl Bond A2 Gl Bond AT Gl Bond AT Gl Bond B Gl Bond B2 Gl Bond B2 Gl Bond BT Gl Bond BT Gl Bond C Gl Bond C2 Gl Bond I Gl Conservative A Gl Conservative A2 Gl Conservative B Gl Conservative B2 Gl Conservative C Gl Conservative C2 Gl Conservative I Gl Eq Blend A Gl Eq Blend B Gl Eq Blend C Gl Eq Blend I Gl Growth A Gl Growth B Gl Growth C

EU US US US US US OT OT OT OT OT OT OT OT OT OT OT OT OT US US US US US US US GL GL GL GL GL GL GL

BA BA BA BA BA BA OT OT OT OT OT OT OT OT OT OT OT OT OT BA BA BA BA BA BA BA EQ EQ EQ EQ EQ EQ EQ

LUX LUX LUX LUX LUX LUX LUX LUX LUX LUX LUX LUX LUX LUX LUX LUX LUX LUX LUX LUX LUX LUX LUX LUX LUX LUX LUX LUX LUX LUX LUX LUX LUX

03/02 USD 03/02 USD 03/02 USD 03/02 USD 03/02 EUR 03/02 USD 03/02 USD 03/02 HKD 03/02 USD 03/02 HKD 03/02 USD 03/02 USD 03/02 HKD 03/02 USD 03/02 HKD 03/02 USD 03/02 USD 03/02 USD 03/02 USD 03/02 USD 03/02 USD 03/02 USD 03/02 USD 03/02 USD 03/02 USD 03/02 USD 03/02 USD 03/02 USD 03/02 USD 03/02 USD 03/02 USD 03/02 USD 03/02 USD

FUND NAME

NAV GF AT LB DATE CR

Platinm-Gbl Dividend Platinm-Nordic Platinm-Premier Platinm-Turnberry

GL OT OT OT

NAV 17.77 17.96 16.88 17.63 12.72 18.78 9.43 133.32 17.11 73.40 9.42 9.43 115.40 14.81 73.63 9.45 9.43 14.77 9.43 15.51 18.08 15.51 16.98 15.53 17.59 15.59 12.79 11.86 12.50 13.62 46.25 38.16 44.15

—%RETURN— YTD 12-MO 2-YR NS 2.5 2.4 2.4 2.4 2.7 0.0 0.1 0.1 0.1 0.1 -0.1 -0.1 -0.1 -0.1 -0.1 0.0 0.0 0.1 1.3 1.3 1.1 1.1 1.2 1.2 1.4 4.2 3.9 4.1 4.3 3.1 2.9 3.0

NS 10.2 9.1 9.8 9.8 10.9 4.6 4.5 4.5 4.7 4.7 3.6 3.5 3.5 3.6 3.6 4.1 4.1 5.1 7.0 6.6 5.9 5.5 6.5 6.1 7.6 13.4 12.2 12.9 14.4 13.4 12.3 12.9

NS 25.8 24.6 25.5 25.5 26.7 10.9 10.9 10.9 10.9 10.9 9.8 9.8 9.8 9.8 9.8 10.4 10.4 11.5 16.1 15.9 14.9 14.7 15.6 15.3 16.9 36.0 34.7 35.4 37.2 33.3 32.0 32.7

CYM USA USA USA USA

01/31 10/31 01/31 01/31 05/29

USD USD USD USD USD

102.26 129.92 115.19 113.15 35.02

CYM CYM CYM USA

01/31 01/31 08/29 01/31

USD SEK USD USD

78.75 637.61 28.37 60.53

—%RETURN— YTD 12-MO 2-YR 2.0 -4.7 NS -0.6

26.1 1.6 NS -0.4

33.5 7.9 NS NS

GL GL GL GL GL

OT OT OT OT OT

CYM LUX CYM CYM AUT

03/01 03/01 03/01 03/01 03/01

USD USD USD USD EUR

57.92 2675.00 1359.33 1351.69 7642.00

5.9 4.0 3.7 5.3 2.2

66.4 38.5 51.9 62.9 24.6

-17.9 -15.3 4.5 -3.6 -7.3

11.2 11.4 11.3 0.1 14.4 0.1 0.1

8.1 8.3 8.3 17.5 14.4 17.4 17.7

NS NS 3.5 3.9 4.8 3.2 4.0

n WINTON CAPITAL MANAGEMENT LTD Tel: +44 (0)20 7610 5350 Fax: +44 (0)20 7610 5301

n PLATINUM CAPITAL MANAGEMENT Tel: +44 207 024 9840, www.platinumfunds.net OT OT OT OT OT

EQ OT OT OT

NAV

n SUPERFUND ASSET MANAGEMENT GMBH For info about open funds, contact [email protected] and www.superfund.com *Closed for New Investments Superfund Cayman* Superfund GCT USD* Superfund Green Gold A (SPC) Superfund Green Gold B (SPC) Superfund Q-AG*

OT OT OT OT OT

0.3 NS -0.9 2.0 -18.2

4.4 NS 5.0 19.5 -63.7

LEGAL CURR. BASE

YTD

Fubon Taiwan Fubon Securities TWDTWN Finance ETF Inv Trust Co Ltd HLG Finance Hong Leong Asset MYRMYS Sector Mngt Bhd Polaris/P-Sh Polaris Intl Secs TWDTWN MSCI TW Fin ETF Invmt Tr Co., Ltd FF - Glbl Fidelity (FIL EURLUX Financial Services A Euro (Luxembourg) S.A.) ICBC Global ICBC (Asia) HKDHKG Financial Opportunities Investment Mgmt Co. Ltd LionGlobal Lion Global SGDSGP Financial Svcs Invmt A Investors Ltd Amundi Funds Amundi USDLUX Global Finance AU C BNPP L1 BNP Paribas EURLUX Equity World Finance Acc Investment Partners Lux JPM Global JPMorgan Asset USDLUX Financials A (acc)-USD Mgmt (Europe) S.a.r.l. Eurizon Eurizon Capital EURLUX EasyFund Eq Financial R S.A.

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AlexandraConvertibleBondFundI,Ltd.(ClassA) OT OT VGB 01/31 USD

Platinm-All Star Platinm-All Weather Platinm-Dynasty Platinm-Emancipation Platinm-Equity Plus

Funds that invest in equities of companies in the financial services sector. At least 75% of total assets are invested in equities. Ranked on % total return (dividends reinvested) in Euros for one year ending March 03, 2011 % Return in $US ** 1-YR 2-YR 5-YR

-5.91 30.81 55.62

NS

0.86 30.42 43.92 17.88 -7.27 24.45 51.62

NS

3.58

16.25 41.75 -1.72

1.00

14.47

NS

NS

4.82 13.60 43.26 -4.66 6.10

13.47 38.99 -3.44

6.61

13.27 52.13 -10.27

6.35 13.05 49.31 -6.18 6.38

12.83 46.64 -9.29

Source: Morningstar, Ltd 1 Oliver’s Yard, 55-71 City Road London EC1Y 1HQ United Kingdom www.morningstar.co.uk; Email: [email protected] Phone: +44 (0)203 107 0038; Fax: +44 (0)203 107 0001

“The claims numbers accelerated some of the weakness” that Treasury prices have seen recently, said David Ader, head of governmentbond strategy at CRT Capital Group LLC. “Obviously, in terms of pure economic data, we’re hyperfocused on nonfarm payrolls; this anecdotally suggests that will be a relatively strong number,” he said.

[ Search by company, category or country at asia.WSJ.com/funds ]

n ALEXANDRA INVESTMENT MANAGEMENT Tel: +1 212 301 1800 Fax: +1 212 301 1810

CPS-Master Priv Fund

FUND SCORECARD

NEW YORK—Treasury prices fell Thursday as stronger-than-expected U.S. economic data and tough-on-inflation comments from the European Central Bank chief led investors to step away from the safety of U.S. debt. U.S. CREDIT ECB President MARKETS Jean-Claude Trichet said an ECB rate increase could come as soon as next month, weighing on the dollar and boosting global risk appetite, which curbed demand for Treasurys. Meanwhile, a lack of alarming new headlines from Libya and the rest of the oil-producing Middle East and North Africa helped soothe investor nerves and pushed down the price of oil. In midday trading, the benchmark 10-year note was down 24/32 to yield 3.559%. Bond prices move inversely to their yields. “The big event was the fact that the ECB was extremely hawkish in its press conference,” said John Briggs, U.S. interest-rate strategist at RBS Securities Inc. in Stamford, Conn. Meanwhile, Thursday's data painted a brightening picture of the U.S. economy, with a stronger-thanexpected reading of the U.S. service sector. The number of U.S. workers filing new claims for unemployment benefits also unexpectedly dropped last week, pointing to continued im-

INTERNATIONAL INVESTMENT FUNDS

Data as shown is for information purposes only. No offer is being made by Morningstar, Ltd. or this publication. Funds shown aren’t registered with the U.S. Securities and Exchange Commission and aren’t available for sale to United States citizens and/or residents except as noted. Prices are in local currencies. All performance figures are calculated using the most recent prices available.

FUND NAME

Treasurys fall on ECB stance and U.S. data

9.8 NS 11.6 24.1 -45.6

Winton Evolution EUR Cls H Winton Evolution GBP Cls G Winton Evolution USD Cls F Winton Futures EUR Cls C Winton Futures GBP Cls D Winton Futures JPY Cls E Winton Futures USD Cls B

GL GL GL GL GL GL GL

OT OT OT OT OT OT OT

CYM CYM CYM VGB VGB VGB VGB

09/30 09/30 09/30 01/31 11/30 01/31 01/31

EUR 1049.82 GBP 1056.92 USD 1332.74 EUR 224.87 GBP 234.75 JPY 15874.03 USD 801.13

FUND NAME

NAV GF AT LB DATE CR

NAV

—%RETURN— YTD 12-MO 2-YR

Gl Growth I Gl High Yield A Gl High Yield A2 Gl High Yield A2 Gl High Yield AT Gl High Yield AT Gl High Yield B Gl High Yield B2 Gl High Yield B2 Gl High Yield BT Gl High Yield BT Gl High Yield C Gl High Yield C2 Gl High Yield I Gl Thematic Res. A Gl Thematic Res. B Gl Thematic Res. I Gl Value A Gl Value B Gl Value C Gl Value I Greater China A Greater China B Greater China C India Growth A India Growth AX India Growth B India Growth BX India Growth I Int'l Health Care A Int'l Health Care B Int'l Health Care C Int'l Health Care I Int'l Technology A Int'l Technology B Int'l Technology C Int'l Technology I Japan Eq Blend A Japan Eq Blend B Japan Eq Blend C Japan Growth A Japan Growth B Japan Growth C Japan Strat Value A Japan Strat Value B Japan Strat Value C Real Estate Sec. A Real Estate Sec. B Real Estate Sec. I Short Mat Dollar A Short Mat Dollar A2 Short Mat Dollar AT Short Mat Dollar B Short Mat Dollar B2 Short Mat Dollar BT Short Mat Dollar C Short Mat Dollar C2 Short Mat Dollar I US Thematic Portfolio A EUR H US Thematic Portfolio B EUR H US Thematic Portfolio C EUR H US Thematic Portfolio I EUR H US Thematic Research A US Thematic Research B US Thematic Research I

GL OT OT OT OT OT OT OT OT OT OT OT OT OT GL GL GL GL GL GL GL AS AS AS EA EA EA EA EA OT OT OT OT OT OT OT OT JP JP JP JP JP JP JP JP JP OT OT OT US US US US US US US US US US US US US US US US

51.84 4.69 85.48 10.97 4.65 36.23 4.69 135.81 17.43 36.86 4.73 4.69 16.17 4.69 17.71 15.32 19.94 12.20 11.07 11.79 13.10 43.14 37.74 42.38 137.07 120.22 141.92 101.57 125.32 139.49 116.29 132.99 153.83 137.94 118.14 132.60 156.11 6099.88 5822.20 5973.14 5713.54 5454.58 5595.92 6723.00 6424.00 6574.00 16.99 15.35 18.43 7.46 10.35 7.45 7.46 10.25 7.46 7.46 14.49 7.46 19.83 19.70 19.77 19.93 11.05 10.05 12.00

3.2 2.3 2.4 2.4 2.5 2.5 2.1 2.2 2.2 2.3 2.3 2.2 2.3 2.4 2.0 1.9 2.2 5.4 5.0 5.2 5.5 -2.6 -2.8 -2.7 -10.3 -10.2 -10.4 -10.4 -10.2 1.8 1.6 1.7 1.9 6.2 6.0 6.1 6.3 2.1 2.0 2.1 1.7 1.6 1.6 6.2 6.1 6.2 2.0 1.9 2.2 0.9 0.9 0.9 0.8 0.8 0.8 0.8 0.8 1.0 5.6 5.5 5.6 5.8 5.6 5.5 5.8

For information about listing your funds, please contact: Carson Wong tel: +852 2831-6481; email: [email protected]

EQ OT OT OT OT OT OT OT OT OT OT OT OT OT EQ EQ EQ EQ EQ EQ EQ EQ EQ EQ EQ EQ EQ EQ EQ EQ EQ EQ EQ EQ EQ EQ EQ EQ EQ EQ EQ EQ EQ EQ EQ EQ EQ EQ EQ BD BD BD BD BD BD BD BD BD EQ EQ EQ EQ EQ EQ EQ

LUX LUX LUX LUX LUX LUX LUX LUX LUX LUX LUX LUX LUX LUX LUX LUX LUX LUX LUX LUX LUX LUX LUX LUX LUX LUX LUX LUX LUX LUX LUX LUX LUX LUX LUX LUX LUX LUX LUX LUX LUX LUX LUX LUX LUX LUX LUX LUX LUX LUX LUX LUX LUX LUX LUX LUX LUX LUX LUX LUX LUX LUX LUX LUX LUX

03/02 USD 03/02 USD 03/02 HKD 03/02 USD 03/02 USD 03/02 HKD 03/02 USD 03/02 HKD 03/02 USD 03/02 HKD 03/02 USD 03/02 USD 03/02 USD 03/02 USD 03/02 USD 03/02 USD 03/02 USD 03/02 USD 03/02 USD 03/02 USD 03/02 USD 03/02 USD 03/02 USD 03/02 USD 03/01 USD 03/01 USD 03/01 USD 03/01 USD 03/01 USD 03/02 USD 03/02 USD 03/02 USD 03/02 USD 03/02 USD 03/02 USD 03/02 USD 03/02 USD 02/28 JPY 02/28 JPY 02/28 JPY 02/28 JPY 02/28 JPY 02/28 JPY 03/02 JPY 03/02 JPY 03/02 JPY 03/02 USD 03/02 USD 03/02 USD 03/02 USD 03/02 USD 03/02 USD 03/02 USD 03/02 USD 03/02 USD 03/02 USD 03/02 USD 03/02 USD 03/02 EUR 03/02 EUR 03/02 EUR 03/02 EUR 03/02 USD 03/02 USD 03/02 USD

14.3 15.1 15.4 15.4 15.4 15.4 13.9 14.2 14.2 14.1 14.1 14.6 14.8 15.7 22.1 20.9 23.1 13.9 12.7 13.4 14.9 13.3 12.2 12.9 11.4 11.8 10.3 10.6 12.3 -1.6 -2.6 -2.1 -0.9 29.1 27.8 28.5 30.1 4.2 3.2 3.7 2.6 1.7 2.2 9.0 8.0 8.4 20.2 19.0 21.2 5.0 5.0 5.1 4.5 4.5 4.5 4.5 4.5 5.5 NS NS NS NS 28.2 26.9 29.2

34.4 38.1 38.4 38.4 38.5 38.5 36.6 37.0 37.0 36.9 36.9 37.4 37.7 38.9 52.0 50.4 53.2 39.2 37.8 38.6 40.4 39.4 38.0 38.8 NS 50.8 NS 49.3 51.6 18.8 17.6 18.2 19.7 47.8 46.4 47.2 49.0 16.2 15.1 15.7 9.6 8.5 9.1 28.3 27.1 27.7 51.9 50.5 53.1 9.9 9.8 9.9 9.4 9.4 NS 9.4 9.3 10.4 NS NS NS NS 39.0 37.6 40.0

Friday - Sunday, March 4 - 6, 2011

23

THE WALL STREET JOURNAL.

INTERNATIONAL INVESTOR

Stocks surge on oil drop and strong jobs figures BY BRENDAN CONWAY

US Airways Group shares rose 5.5% after the company said traffic rose 4.5% in February from a year earlier amid an “exceptionally strong” demand environment. News Corp. rose 2.1% after the U.K. government gave it the green light to buy the 61% of British Sky Broadcasting Group it doesn’t already own, on the condition that it spins off the satellite broadcaster’s news channel. News Corp. is the owner of The Wall Street Journal. Budget retailer Big Lots reported quarterly earnings of $1.46 a share, up from $1.27 a share a year earlier. Its shares added 2.5%.

U.S. stocks surged to their biggest intraday gains since Dec. 1, as a strong reading on employment and a drop in the price of oil helped investors breathe a sigh of relief. The Dow Jones Industrial Average was up 175.17 points, or 1.5%, to 12241.97 at early afternoon. American Express and ABREAST OF Caterpillar were THE MARKET the strongest components, up 3%, followed by DuPont, up 2.9%. The Standard & Poor’s 500-stock index was up 1.5% to 1327.78, led by industrial and financial sectors. The Nasdaq Composite added 1.8% to 2798.51. The number of workers filing new unemployment claims unexpectedly fell to the lowest level since May 2008. Crude-oil futures fell under $101 a barrel. Stocks also got a bump after the euro slid following European Central Bank President Jean-Claude Trichet’s comment that the central bank could raise interest rates next month. Among stocks in focus, Amylin Pharmaceuticals slid 23% and Alkermes fell 12% after an investigational drug to treat Type 2 diabetes failed to meet primary endpoints in a 26-week study. February retail sales showed strength, and high-end department stores performed well. Saks gained 5.1%, and Nordstrom added 1.4% as sales topped expectations.

European stocks European stocks rose as upbeat U.S. economic data offset the European Central Bank president’s statement that an interest-rate increase next month “is possible.” The Stoxx Europe 600 index rose 0.3% at 283.55. The U.K.’s FTSE 100 rose 1.5% to 6005.09, Germany’s DAX gained 0.6% to 7225.96 and France’s CAC-40 advanced 0.7% to 4060.76. Shares of AMEC and IMI rallied 5.4% and 6.6%, respectively, after the two U.K. engineering firms reported strong results. In France, Alcatel-Lucent soared 6.4% after media reports of market speculation about a possible bid for the firm from a Chinese company. A spokeswoman for Alcatel-Lucent had no comment on the rumors.

BY KAZUHIRO SHIMAMURA

BY V. PHANI KUMAR AND SHRI NAVARATNAM

TOKYO—Yields on Japanese government bonds rose Thursday as weakness in U.S. Treasury debt and gains by Tokyo stocks encouraged selling. Higher oil prices, seen as a major concern for the global economy, limited the selling pressure. Investors expect unrest in the Middle East and a likely inflow of money from reBOND demptions of JapaMARKETS nese government securities to keep supporting the bond market in the near term. “Considering investors’ ample cash positions, yields will trend steadily at relatively low levels,” said Deutsche Securities’ chief strategist Makoto Yamashita. The yield on the benchmark 10year bond rose 0.025 percentage point to 1.290%, while the yield on five-year bonds rose 0.005 percentage point to 0.530% Investors may want to unload some of their holdings if the fiveyear yield comes near 0.5% and the 10-year yield slips closer to 1.2%, but “the high crude-oil price continues to pose a downside risk for the economy,” keeping Japanese government securities attractive as a haven investment for now, Mr. Yamashita said. Some analysts warn that a turning point for the bond market is approaching.

Most Asian stock markets advanced Thursday, led by a strong rebound in South Korean shares as foreigners snapped up beaten-down stocks, while Chinese banks helped lift Hong Kong’s market on an upbeat forecast about earnings. South Korea’s Kospi jumped 2.2% to 1970.66, Japan’s Nikkei Stock Average added 0.9% ASIAN-PACIFIC to 10586.02, Hong STOCKS Kong’s Hang Seng Index climbed 0.3% to 23122.42 and Australia’s S&P/ASX 200 edged up 0.1% to 4806.45. Taiwan’s Taiex gained 1.4% to 8738.37. The Shanghai Composite slipped 0.4% to 2902.98. Regional sentiment was underpinned by Wednesday’s modest rise on Wall Street, the U.S. Federal Reserve’s Beige Book report showing an improving economy and news of accelerating European manufacturing activity. But worries about high oil prices limited the gains. In Seoul, stocks were boosted by solid industrial-output data and bargain-hunting by foreign investors, who turned net buyers following a six-session selling spree. South Korea’s industrial output in January was up 13.7% from a year earlier, the third consecutive monthly increase, spurred by overseas demand for semiconductors and automobiles. Automobile stocks rose on robust February car-sales data. Hyun-

[ Search by company, category or country at asia.WSJ.com/funds ] FUND NAME

NAV GF AT LB DATE CR

NAV

—%RETURN— YTD 12-MO 2-YR

FUND NAME

NAV GF AT LB DATE CR

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—%RETURN— YTD 12-MO 2-YR

AS EQ IRL 03/01 USD OT OT IRL 02/28 USD OT OT IRL 03/01 USD OT OT IRL 03/01 USD GL BD IRL 02/28 USD OT OT IRL 03/01 USD AS EQ IRL 03/01 EUR EU EQ IRL 03/01 EUR EU EQ IRL 03/01 EUR EU EQ IRL 03/01 USD JP EQ IRL 03/01 EUR JP EQ IRL 03/01 JPY JP EQ IRL 03/01 USD GL EQ IRL 03/01 EUR

20.17 10.64 10.99 10.37 10.76 14.23 118.84 12.78 202.02 16.99 104.07 1014.80 12.72 11.88

-0.3 -2.8 1.2 -1.7 -2.8 -3.9 2.3 1.4 1.4 4.3 6.8 8.4 8.2 3.8

12.8 NS 7.7 NS 4.9 12.6 13.1 17.9 13.1 15.0 12.0 9.4 11.5 16.5

63.2 NS NS NS NS 40.1 23.2 28.0 23.6 29.0 20.2 18.7 22.2 25.9

9969.50 8968.45 98.72 113.33 10244.11 9174.35 100.20 106.64

1.6 4.1 5.5 1.8 2.3 4.7 5.9 1.2

-0.2 -3.7 5.3 13.5 3.3 -0.5 8.6 7.4

NS NS NS NS NS NS NS NS

n GAM Star Fund Plc

n ALLIANZ GLOBAL INVESTORS KAPITALANLAGEGESELLSCHAFT Concentra AE Industria AE InternRent AE

EU EQ DEU 03/03 EUR EU EQ DEU 03/03 EUR EU BD DEU 03/03 EUR

63.97 76.80 39.10

2.4 -1.3 -2.9

26.8 7.6 5.3

44.0 25.6 5.6

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34.1

74.8

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EQ OT EQ BA BA EQ EQ BA BA OT OT OT EQ OT OT OT OT EQ EQ EQ EQ EQ OT EQ EQ EQ EQ MM MM OT OT OT OT OT OT EQ EQ OT OT OT OT OT EQ OT OT

VGB VGB VGB VGB VGB VGB VGB VGB VGB VGB VGB VGB VGB VGB VGB VGB VGB VGB VGB VGB VGB VGB VGB VGB VGB VGB VGB VGB VGB VGB VGB VGB VGB VGB VGB VGB VGB VGB VGB VGB VGB VGB VGB VGB VGB

02/28 03/02 03/01 02/21 02/21 02/21 02/21 02/21 02/21 02/21 02/21 02/21 02/28 02/21 02/21 02/21 02/21 03/01 03/01 03/01 02/28 02/28 02/28 02/28 02/28 03/02 03/02 03/01 03/01 02/21 02/21 02/21 02/21 02/21 02/21 02/25 03/02 02/28 02/07 02/21 02/21 02/28 03/01 02/28 11/30

USD USD USD EUR USD EUR USD EUR USD EUR SGD USD USD EUR USD USD USD EUR USD USD USD USD USD USD JPY USD JPY EUR USD EUR USD EUR EUR USD USD USD USD GBP EUR USD USD USD USD USD USD

265.89 685.79 1443.34 107.02 142.29 117.27 150.79 100.10 143.88 151.38 109.35 908.21 315.67 639.50 73.80 676.11 206.38 237.53 220.18 1068.20 292.65 237.00 324.50 132.27 9157.77 1250.89 9585.74 51.07 100.08 90.19 674.78 290.54 149.52 122.60 507.48 3397.10 2782.88 253.25 341.84 1031.32 334.99 649.95 2480.54 8101.25 116.46

-1.7 -5.1 4.2 2.7 2.7 4.5 4.5 3.5 3.5 1.2 1.6 1.6 8.2 1.8 4.2 1.9 1.7 -3.2 -2.5 3.3 6.0 -1.7 4.9 3.8 4.1 5.9 6.2 -0.1 0.0 -2.1 -1.0 3.5 3.5 3.6 3.6 3.1 -4.9 3.0 -0.3 0.1 0.1 3.4 6.7 -0.3 2.5

2.3 10.5 14.4 13.3 13.3 23.5 23.5 16.9 16.9 6.6 7.3 7.7 28.8 -1.0 -4.6 -0.4 -1.4 8.2 8.0 30.9 18.3 -7.8 15.9 5.7 6.2 9.8 7.2 0.2 0.2 -19.8 5.8 10.0 10.1 10.3 10.4 25.9 14.9 13.5 5.7 6.8 6.8 16.3 18.2 6.4 10.3

29.7 42.4 28.4 15.3 15.3 24.5 24.5 17.6 17.6 8.0 8.5 8.9 41.7 1.4 1.0 1.8 0.9 11.5 11.9 46.4 30.6 35.2 53.9 13.4 14.1 24.0 20.1 0.5 0.1 -10.0 14.0 6.9 6.9 7.0 6.8 46.0 39.8 31.6 4.6 5.5 5.5 53.8 31.1 3.6 NS

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AS EQ LUX 03/02 SGD AS EQ LUX 03/02 USD AS EQ LUX 03/02 SGD AS EQ LUX 03/02 USD AS EQ LUX 03/02 SGD AS EQ LUX 03/02 USD AS EQ LUX 03/02 SGD AS EQ LUX 03/02 USD EA EQ LUX 03/01 SGD EA EQ LUX 03/01 USD AS EQ LUX 03/02 USD OT EQ LUX 03/02 USD AS EQ LUX 03/02 SGD AS EQ LUX 03/02 USD OT OT LUX 03/02 USD AS BD LUX 03/02 USD OT OT LUX 03/02 USD OT OT LUX 03/02 SGD EU EQ LUX 03/02 EUR GL EQ LUX 03/02 SGD GL EQ LUX 03/02 USD OT OT LUX 03/02 SGD OT OT LUX 03/02 USD GL EQ LUX 03/02 SGD GL EQ LUX 03/02 USD OT OT LUX 03/02 USD OT OT LUX 03/02 USD GL EQ LUX 03/02 SGD GL EQ LUX 03/02 USD GL EQ LUX 03/02 EUR GL EQ LUX 03/02 SGD GL EQ LUX 03/02 USD GL EQ LUX 03/02 SGD

Korean shares jump as foreign buyers step in

Japan yields edge upward as stocks gain

14.74 15.23 14.27 19.91 12.79 48.80 14.23 28.06 14.70 26.15 10.63 17.13 15.33 32.24 10.95 10.76 11.13 13.54 33.49 14.43 61.61 12.14 21.17 14.38 31.74 8.59 15.96 15.03 13.94 22.08 26.80 21.77 14.09

-6.5 -5.2 -5.2 -4.4 -3.1 -2.3 -5.1 -4.2 -10.9 -10.2 -6.4 0.5 -5.7 -4.9 -8.0 -0.6 -7.3 -8.6 -3.9 -5.8 -5.0 -17.5 -16.3 -6.2 -5.4 -4.8 0.3 3.2 4.0 -2.9 -0.3 0.5 -8.2

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NS 35.1 NS 13.0 -2.7 7.6 5.6 16.7 5.4 16.5 28.1 15.2 10.6 22.3 21.7 NS 8.2 NS 18.1 NS 19.3 NS 6.1 3.7 14.6 18.8 13.1 8.0 19.2 39.7 29.3 42.9 NS

NS NS NS 50.1 NS 40.0 NS 45.4 NS 52.4 63.4 41.4 NS 62.9 59.2 NS 58.0 NS 76.2 NS 64.6 NS 27.5 NS 49.6 56.0 NS NS 37.0 66.4 NS 74.6 NS

dai Motor advanced 2.8% and Kia Motors soared 6.6%. Construction and airline stocks also rebounded after their recent underperformance. Hyundai Engineering & Construction rose 6.6% and Daewoo Engineering & Construction climbed 4.2%. In Tokyo, Softbank advanced 4.8% on the news of Apple’s secondgeneration iPad, which Softbank sells in Japan. Itochu rose 1.4% after the trading house said it will buy U.K. tire company Kwik Fit. In Hong Kong, Chinese banks led gains on hopes rising interest rates on the mainland will boost their interest incomes. Also Thursday, Bernstein Research raised Chinese bankearning estimates for 2011 and 2012. China Construction Bank and Industrial & Commercial Bank of China each advanced 1%. In Shanghai, worries about further monetary tightening weighed on shares, though banks were strong on expectations the industry will report strong results for last year. China Merchants Bank rose 4.2%, Hua Xia Bank gained 3.2%, and China Minsheng Banking added 1.7%. Gold and coal miners led declines after recent gains. Zhongjin Gold slid 3.5% after rising 20% over the past 21 sessions, Shandong Gold-Mining fell 3.3% after gaining 23% over the same period, whileZijin Mining Group slid 2.6%. It had rallied by 26% during the 21 sessions.

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37.6 -8.3 -8.3 20.7 0.6 0.3

59.3 17.4 17.4 39.4 0.6 0.3

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18.04 1.03 2.85 0.90 1.53 8.18 2.56 1.76 8.51 5.57 2.39 10.38 0.73 1.17 0.82 1.34 1.04 1.18 3.40 0.78 3.18 0.81 1.38 1.12 1.34 0.87 1.24 0.84 1.19 1.08 1.02 1.20

4.5 4.5 -2.0 -2.1 -2.8 -2.3 -2.3 -1.7 -1.5 1.3 1.3 6.6 6.5 -0.2 3.1 3.9 3.2 -10.7 5.0 4.9 4.5 4.6 -5.0 1.9 -2.8 6.2 -4.3 -15.6 1.5 1.0 1.1 1.4

19.0 18.7 19.6 19.3 33.1 20.8 20.5 11.3 11.4 19.7 19.6 21.1 20.8 28.6 22.8 28.0 7.3 11.3 13.1 12.8 12.7 10.6 12.7 11.7 19.3 30.7 25.3 13.7 8.2 22.4 18.9 6.3

32.6 32.3 48.8 48.4 68.7 43.4 43.0 39.5 39.5 69.0 68.8 44.4 44.0 68.4 54.3 42.3 21.3 49.3 27.9 27.6 24.5 23.6 55.3 NS NS 85.9 53.8 70.3 14.0 54.5 58.5 8.0

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7129.00 8624.00

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24

THE WALL STREET JOURNAL.

Friday - Sunday, March 4 - 6, 2011

BLUE CHIPS
BONDS Dow Jones Asia Titans: Thursday's best and worst...

Major players
benchmarks

Company

Country

Industry

Market value, in billions of US$

Previous close, in local currency

Shinhan Financial Grp

South Korea

Banks

$20.4

47,950

STOCK PERFORMANCE Previous session

52-week

Three-year

11.4%

3.45%

-5.4%

At right, a look at the Asia Titans, the biggest and best known companies in Asia. Below, some of the Dow Jones Titans indexes of biggest and most liquid stocks in individual countries and regions

Japan Tobacco

Japan

Tobacco

39.5

338,500

1.80

5.8

-35.6

JFE Hldgs

Japan

Steel

16.4

2,556

1.75

-25.8

-41.0

Giants around the world

QBE Insurance Group

Australia

Reinsurance

19.2

18.03

1.58

-11.5

-15.0

Nippon T&T

Japan

Fixed Line Telecommunications

66.4

4,130

1.47

5.9

-99.1

CNOOC

Hong Kong

Exploration Production $100.9

17.60

43.8

38.8

Aus NZ Bk

Australia

Banks

61.3

23.60

-1.09

-1.2

12.8

National Australia Bk

Australia

Banks

54.4

25.29

-1.02

-3.5

-7.0

In U.S.-dollar terms.

Dow Jones Country Titans INDEX PERFORMANCE Previous session

Year-to-date

52-week

9.5%

Italy

0.08%

2.7%

Russia

0.24

7.9

31.8

Spain

-0.41

7.8

1.5

France

0.95

6.9

5.9

Canada

0.32

6.0

17.6

Japan

0.49

5.6

4.6

Netherlands

0.77

5.2

10.5

Germany

1.09

4.7

21.3

Switzerland

0.42

4.1

0.7

-0.02

3.6

-6.0

China 88 U.K. Australia Hong Kong

2.1

1.51

1.5

-0.6

0.35

0.7

14.8

Brazil

0.75

-0.5%

10.8

South Africa

0.92

-2.2

13.3

South Korea

2.37

-2.8

23.7

Sweden

1.04

-3.3

15.4

Singapore

0.27

Turkey

2.40

Commonwlth Bk of Aus

Australia

Banks

81.1

52.11

-0.88

-5.5

30.3

Seven I Hldgs

Japan

Broadline Retailers

24.3

2,268

-0.87

15.0

-10.4

...And the rest of Asia's blue chips

-4.1

East Japan Railway 27.8 Japan (Travel Tourism) Hon Hai Precision Ind 37.2 Taiwan (Electrical Components Equipment) Woodside Petroleum 34.0 Australia (Exploration Production) BHP Billiton 158.4 Australia (General Mining) Mitsui 33.0 Japan (Industrial Suppliers) China Construction Bank 212.7 Hong Kong (Banks) Indl Comm Bk China 67.6 Hong Kong (Banks) Mitsubishi 45.4 Japan (Industrial Suppliers) Tokio Marine Hldgs 25.3 Japan (Property Casualty Insurance) Reliance Industries 71.0 India (Exploration Production) Honda Motor 78.8 Japan (Automobiles) Sun Hung Kai Prop 41.5 Hong Kong (Real Estate Holding Development) PetroChina 29.2 Hong Kong (Integrated Oil Gas) Bank of China 44.3 Hong Kong (Banks) Mizuho Financial Grp 39.6 Japan (Banks) Taiwan Smcndtr Mfg 62.2 Taiwan (Semiconductors) Samsung Electronics 107.1 South Korea (Semiconductors) POSCO 31.9 South Korea (Steel) Takeda Pharm 39.0 Japan (Pharmaceuticals) China Life Insurance 28.1 Hong Kong (Life Insurance)

13.0

-10.0

15.4

Dow Jones Regional Sector Titans Oil Gas

0.80%

Media

1.24

12.6%

24.4%

10.6

29.1

10.2

Insurance

1.25

Ind Gds Svcs

1.64

7.7

26.2

Banks

0.73

7.7

6.0

Chemicals

1.50

7.4

34.8

5.0

12.3

10.9

Global 50

0.14

Asian 50

-0.06

1.8

10.9

Tiger 50*

1.02

0.6

19.2

Arab 50

0.73

-9.6%

Market value, in billions (U.S)

Company/Country (Industry)

6.9

-0.06

-1.35%

-0.4

*Asia excluding Japan

Latest, in local currency

STOCK PERFORMANCE Latest 52-week Three-year

5,790

1.40%

-5.4%

-99.3%

113.50

1.34

-4.8

-29.0

43.18

1.29

-2.3

-23.9

46.55

1.09

11.7

20.6

1,501

1.08

2.8

-31.9

6.89

1.03

15.7

22.0

6.07

1.00

4.9

16.3

2,272

0.98

-1.0

-26.0

2,646

0.92

6.4

-30.6

43.44

0.91

-2.1

-24.7

3,550

0.85

14.5

15.6

126.10

0.80

14.0

-5.6

10.78

0.75

20.7

-4.3

4.13

0.73

6.9

32.5

169.00

0.60

-5.6

-100.0

70.80

0.57

18.0

16.6

923,000

0.54

19.7

68.1

462,000

0.54

-13.2

-9.9

4,065

0.37

0.7

-28.7

29.40

0.34

-16.2

-2.3

Market value, in billions (U.S)

Company/Country (Industry)

Nippon Steel 22.5 Japan (Steel) Panasonic 27.4 Japan (Consumer Electronics) KDDI 28.7 Japan (Mobile Telecommunications) Rio Tinto Ltd. 37.2 Australia (General Mining) Tokyo Elec Power 41.1 Japan (Electricity) Woolworths 33.4 Australia (Food Retailers Wholesalers) Kansai Elec Power 23.4 Japan (Electricity) Westfield Grp 22.4 Australia (Retail) NTT DoCoMo 78.2 Japan (Mobile Telecommunications) Mitsubishi UFJ Finl 76.5 Japan (Banks) Sony 35.7 Japan (Consumer Electronics) China Mobile (HK) 188.1 Hong Kong (Mobile Telecommunications) Cheung Kong 36.5 Hong Kong (Real Estate Holding Development) Toyota Motor 143.1 Japan (Automobiles) Shin-Etsu Chml 23.4 Japan (Specialty Chemicals) Nissan Motor 42.7 Japan (Automobiles) Westpac Bking 70.1 Australia (Banks) Nintendo 36.0 Japan (Toys) Canon 58.0 Japan (Electronic Office Equipment) Sumitomo Mitsui Finl 52.1 Japan (Banks)

— NOTICE TO READERS — All statistics published in The Wall Street Journal Asia from markets outside the Asian-Pacific region reflect preliminary data.

STOCK PERFORMANCE Latest 52-week Three-year

294.00

0.34%

-14.3%

-43.7%

0.28

-12.5

-48.5

1,090 533,000

0.19

10.2

-15.5

84.20

0.10

14.0

-36.0

2,112

0.09

-15.1

-19.8

27.14

0.07

-1.6

-5.9

2,132

0.05

-0.3

-15.6

9.57

...

1.7

-28.0

154,000

...

10.7

...

453.00

...

-0.7

-49.8

2,944

-0.03

-6.1

-38.3

73.70

-0.07

-1.3

-36.5

122.90

-0.08

27.8

7.2

3,740

-0.13

9.4

-32.7

4,535

-0.33

-5.8

-14.3

840.00

-0.36

19.7

-8.8

23.11

-0.39

-14.4

1.6

23,140

-0.64

-11.8

-53.9

3,865

-0.77

1.8

-15.4

3,070

-0.81

6.3

-99.6

Sources: Dow Jones Indexes; WSJ Market Data Group

Source: Dow Jones Indexes

Tracking credit markets
dealmakers

Latest, in local currency

Credit derivatives

Credit-default swaps: Asian companies

Spreads on credit derivatives are one way the market rates creditworthiness. Regions that are treading in rough waters can see spreads swing toward the maximum—and vice versa. Indexes below are for five-year swaps.

At its most basic, the pricing of credit-default swaps measures how much a buyer has to pay to purchase-and how much a seller demands to sell-protection from default on an issuer's debt. The snapshot below gives a sense which way the market was moving yesterday.

Markit iTraxx Indexes Index: series/version

Europe: 14/1 Eur. High Volatility: 14/1 Europe Crossover: 14/1 Asia ex-Japan IG: 14/1 Japan: 14/1

Spreads Spreads on fiveyear swaps for corporate debt; based on Markit iTraxx indexes.

Mid-spread, in pct. pts. Mid-price

SPREAD RANGE, in pct. pts. since most recent roll Maximum Minimum Average

Coupon

Showing the biggest improvement...

And the most deterioration

CHANGE, in basis points

CHANGE, in basis points

0.99

100.03%

0.01%

1.20

0.94

1.03

1.35

98.47

0.01

1.84

1.29

1.52

Daiwa Secs

136

–3

3

15

Malayan Bkg

3.87

104.47

0.05

5.37

3.81

4.46

Bk of Tokyo Mitsubishi

80

–1

–1

–3

Rep Korea

1.09

99.60

0.01

1.25

0.93

1.08

Sumitomo Mitsui

80

–1

–1

–4

1.02

99.90

0.01

1.16

0.90

1.02

Indl Bk Korea

122

...

1

Yesterday Yesterday Five-day 28-day

Yesterday Yesterday Five-day 28-day 85

1

–1

–1

103

2

1

5

POSCO

97

2

1

5

1

KT

98

2

2

6

Note: Data as of March 2

Kookmin

129

...

2

3

Woori

145

2

2

3

In percentage points

ACOM

336

...

8

–82

ALL NIPPON Awys

156

2

3

–1

Wharf Hldgs

128

...

–3

–12

Kdom Thailand

118

2

1

7

72

...

–1

1

HYUNDAI

116

3

...

4

Mitsubishi Estate

55

...

1

2

Lg Electrs

108

3

1

4

GS Caltex Oil

119

...

...

3

Korea Expwy

102

3

...

2

Index roll Europe Sub Financials t

4.00 3.00 2.00

Europe t

Samsung Electrs

Source: Markit Group

1.00 0

Sept. Oct. Nov. Dec. Jan. Feb. 2010 2011 Source: Markit Group

Behind Europe's deals: Bank revenue rankings, European Behind every IPO, bond offering, merger deal or syndicated loan is one or more investment banks. Here are investment banks ranked by year-to-date revenues from recent deals. PERCENTAGE OF TOTAL REVENUE Debt Mergers & capital markets acquisitions

Revenue, in millions

Market share

Equity capital markets

Deutsche Bank

$210

7.4%

13%

55%

27%

6%

Goldman Sachs

176

6.2

14

28

54

4

Loans

Barclays Capital

162

5.7

20

51

25

4

WSJ.com

JPMorgan

154

5.4

17

35

41

7

Citi

148

5.2

17

41

40

3

Follow the markets throughout the day, with updated stock quotes, news and commentary at WSJ.com. Also, receive emails that summarize the day’s trading in Europe and Asia. To sign up, go to WSJ.com/Email.

Credit Suisse

147

5.2

27

48

23

3

Morgan Stanley

142

5.0

21

23

53

3

BNP Paribas

137

4.8

2

68

17

13

UBS

101

3.6

21

45

33

1 Source: Dealogic

Friday - Sunday, March 4 - 6, 2011

25

THE WALL STREET JOURNAL.

GLOBAL MARKETS LINEUP Commodities

Currencies

Prices of futures contracts with the most open interest

EXCHANGE LEGEND: CBOT: Chicago Board of Trade; CME: Chicago Mercantile Exchange; NYBOT: New York Board of Trade; MDEX: Bursa Malaysia Derivatives Berhad; LIFFE: London International Financial Futures Exchange; LME: London Mercantile Exchange; NYMEX: New York Mercantile Exchange; ICE: IntercontinentalExchange Contract ONE-DAY CHANGE Commodity Exchange Last price Net Percentage high CBOT

Corn (cents/bu.) Soybeans (cents/bu.) Wheat (cents/bu.) Live cattle (cents/lb.) Cocoa ($/ton) Coffee (cents/lb.) Sugar (cents/lb.) Cotton (cents/lb.) Crude palm oil (ringgit/ton) Cocoa (pounds/ton) Robusta coffee ($/ton)

CBOT CBOT CME ICE-US ICE-US ICE-US ICE-US MDEX LIFFE LIFFE COMEX

Copper (cents/lb.) Gold ($/troy oz.) Silver (cents/troy oz.) Aluminum ($/ton) Tin ($/ton) Copper ($/ton) Lead ($/ton) Zinc ($/ton) Nickel ($/ton)

COMEX COMEX LME LME LME LME LME LME NYMEX

Crude oil ($/bbl.) Heating oil ($/gal.) RBOB gasoline ($/gal.) Natural gas ($/mmBtu) Brent crude ($/bbl.) Gas oil ($/ton)

NYMEX NYMEX NYMEX ICE-EU ICE-EU

731.00 1409.50 825.00 112.200 3,720 274.20 30.59 204.54 3,600.00 2,384 2,382

9.50 15.25 13.75 0.800 56 4.65 0.21 3.94 10 38 19

453.20 1424.50 3447.50 2,613.50 31,620.00 9,909.00 2,597.00 2,500.00 28,875

3.40 -13.20 -36.00 29.00 -280.00 84.00 73.00 28.00 420

101.57 3.0395 3.0063 3.928 114.38 958.50

-0.66 -0.0182 -0.0232 0.034 -1.97 -9.50

744.25 1,467.50 925.50 116.600 3,729 278.40 33.11 208.93 3,930 2,392 2,417

1.32% 1.09 1.69 0.72 1.53 1.73 0.69 1.96 0.28 1.62 0.80 0.76 -0.92% -1.03 1.12 -0.88 0.85 2.89 1.13 1.48

AMERICAS Argentina peso-a Brazil real Canada dollar 1-mo. forward 3-mos. forward 6-mos. forward Chile peso Colombia peso Ecuador US dollar-f Mexico peso-a Peru sol Uruguay peso-e U.S. dollar Venezuela bolivar

Contract low

366.50 909.25 521.75 89.975 2,650 133.75 11.84 68.05 2,095 1,818 1,493

465.75 280.00 1,441.00 1,005.00 3,497.50 18.50 2,613.50 1,857.00 32,590.00 15,925.00 10,123.00 6,120.00 2,676.00 1,580.00 2,584.00 1,617.00 29,050 18,005 136.90 3.0825 3.0477 10.050 133.58 977.00

-0.65 -0.60 -0.77 0.87 -1.69 -0.98

67.95 1.7225 1.9900 3.851 68.02 634.25

Source: Thomson Reuters; WSJ Market Data Group

WSJ.com

Major stock market indexes Price-to-

16

Region/Country Index

PREVIOUS SESSION

Net change

Percentage change

12

Denmark

OMX Copenhagen

0.32

0.4

12.4

14

Finland

OMX Helsinki

0.23

-9.8

8.9

12

France

CAC-40

-5.6

36.2

13

Germany

DAX

0.89

3.5

4.3

12

Italy

FTSE MIB

0.62

5.6

5.7

13

Netherlands

AEX

-0.8

17.4

...

Russia Spain Switzerland

CBN 600

27397.28

-242.72

14

Hong Kong

Hang Seng

23122.42

73.76

17

India

Sensex

18489.76

43.26

...

Indonesia

Jakarta Composite

3494.539

8.342

0.24

...

Japan

Nikkei Stock Average

10586.02

93.64

948.69

5.82

1506.88

7.60

0.51

New Zealand

NZSX-50

3397.308

15.315

Pakistan

KSE 100

11762.00

62.84

12

Philippines

Manila Composite

3834.05

60.34

...

Singapore

Straits Times

3037.35

9.84

11

South Korea

Kospi

1970.66

42.42

15

Taiwan

Weighted

8738.37

118.47

10

Thailand

SET

990.08

2.49

16

EUROPE

Stoxx Europe 600

283.32

0.56

Stoxx Europe 50

2679.24

3.49

14

*P/E ratios use trailing 12-months, as-reported earnings European and Americas index data are as of 12:00 p.m. ET.

2.09% 1.90 2.18 2.30 2.56 2.64 2.12 2.60 2.56 2.56 2.29 2.29

16 15 14 16 16 15 12 14 12 12 13 13

Last

Net change

Global TSM 2716.72 24.11 Global DOW 2207.52 18.94 Global Titans 50 185.97 0.26 Asia/Pacific TSM 1408.99 6.21 Asia/Pacific ex-Japan TSM 3512.43 29.94 Europe TSM 2940.07 25.99 Emerging Markets TSM 4660.81 33.19 Asian Titans 50 148.28 -0.09 BRIC 50 655.84 2.50 CBN China 600 -c 27397.28 -242.72 China Offshore 50 4263.87 33.09 Shanghai -c 369.18 -2.75

0.44% 0.07 -0.88%

0.45

2.7

5.7

9

0.54

-2.2

23.7

10

1.60 0.33

U.S. Australia Britain Canada China Euro Hong Kong India Indonesia Japan New Zealand South Korea Malaysia Philippines Singapore Switzerland Taiwan Thailand

US$

1.014 1.628 1.027 0.1522 1.394 0.128 0.0222 0.0001 0.012 0.742 0.0009 0.330 0.023 0.788 1.075 0.034 0.033

1.605 1.013 0.150 1.375 0.127 0.0219 0.0001 0.012 0.732 0.0009 0.325 0.023 0.778 1.060 0.033 0.032

£ 0.614 0.623 0.631 0.093 0.856 0.079 0.0136 0.0001 0.007 0.456 0.0005 0.203 0.014 0.484 0.660 0.021 0.020

C$ 0.974 0.988 1.586

2.20

0.148 1.358 0.125 0.0216 0.0001 0.012 0.723 0.0009 0.321 0.022 0.768 1.047 0.033 0.032

0.90% 0.87 0.14 0.44 0.86 0.89 0.72 -0.06 0.38 -0.88 0.78 -0.74

9.162 0.844 0.1459 0.0007 0.080 4.876 0.0059 2.168 0.152 5.182 7.063 0.223 0.216

In U.S. dollars

1 0.9996 0.9986 0.9963 0.0412 0.1341 0.003673 0.1284 0.2505 0.02544 0.1133 0.7709 0.7711 0.7714 0.7719 0.4481 1.1678 1.1675 1.1666 1.1646

0.7174 0.7177 0.7184 0.7201 17.429 5.3493 195.34 5.5864 2.8637 28.202 6.3342 0.9306 0.9304 0.9299 0.9294 1.6011 0.6143 0.6145 0.6150 0.6160

1.3939 1.3934 1.3920 1.3888 0.0574 0.1869 0.005119 0.1790 0.3492 0.03546 0.1579 1.0746 1.0748 1.0754 1.0760 0.6246 1.6278 1.6274 1.6261 1.6234

MIDDLE EAST/AFRICA Bahrain dinar 0.5256 1.9027 Egypt pound-a 8.2236 0.1216 Israel shekel 5.0349 0.1986 Jordan dinar 0.9866 1.0136 Kuwait dinar 0.3872 2.5828 Lebanon pound 2101.38 0.0004759 Saudi Arabia riyal 5.2280 0.1913 South Africa rand 9.6328 0.1038 United Arab dirham 5.1199 0.1953 SDR -f

0.8849

0.3770 2.6522 5.8995 0.1695 3.6120 0.2769 0.7078 1.4129 0.2778 3.6004 1507.50 0.0006634 3.7505 0.2666 6.9105 0.1447 3.6730 0.2723

1.1301

0.6348

1.5753

4.1% 5.8 5.0 -0.1 -2.8 7.0 -2.9 1.8 0.2 2.6 0.4 3.7

18.1% 14.1 10.9 16.3 17.8 15.8 16.6 10.9 14.7 1.4 11.2 1.3

EURO 0.717 0.727 1.168 0.736 0.109 0.092 0.0159 0.0001 0.009 0.532 0.0006 0.237 0.017 0.566 0.771 0.024 0.024

HK$ 7.789 7.898 12.679 7.997 1.185 10.858 0.1729 0.0009 0.095 5.778 0.0070 2.570 0.180 6.141 8.370 0.264 0.256

RUPEE 45.040 45.668 73.318 46.240 6.853 62.783 5.782 0.0051 0.547 33.413 0.0403 14.860 1.039 35.512 48.399 1.527 1.478

Percentage change 0.27%

6.2

5.3

437.12

3.10

0.71

2.4

27.6

7458.70

38.95

0.52

-2.7

8.2

4060.76

26.44

0.66

6.7

6.1

7225.96

44.84

0.62

4.5

24.7

22154.23

-84.52

367.60

2.74

RTSI

2017.82

26.53

IBEX 35

10566.9

-76.9

SMI

6599.21

7.14

60387.04

1722.80

6005.09

90.20

358.38

3.84

1.08

26.4

...

Turkey

ISE National 100

9.7

12

U.K.

FTSE 100

-3.9

21.8

18

AMERICAS

DJ Americas

0.24

9.8

1.4

3.7

10.6

14.0

37.2

-0.38% 0.75 1.33

7.2

-1.7

2.5

-3.0

-8.5

17.4

-0.72 0.11 2.94 1.52

1.8

8.6

5.1

20.1

15.4

...

Brazil

Bovespa

67871.14

589.63

0.88

-2.1

0.1

-4.1

35.5

...

Argentina

Merval

3470.35

44.07

1.29

-1.5

51.5

0.20

2.7

12.0

16

Mexico

IPC

37116.17

252.64

-3.7

15.5

0.13

3.6

5.8

0.25

-1.2% -3.8 -4.8 -0.7 0.3 -5.7 -1.4 -2.3 -1.5 -10.5 -2.3 -9.9

PERFORMANCE Yr.-to-date 52-wk. 5.1% 8.4%

PREVIOUS SESSION

Net change 0.77

-2.6

1.37

PERFORMANCE YearThree-yr., to-date 52-wk. annualized

Daily

YUAN 6.572 6.664 10.699 6.747

Per U.S. dollar

7.14

Price-toDividend earnings yield* ratio* Dows Jones Index

2.29% 13 1.67 20 5.25 14 6.17 11 3.73 7 3.96 15 1.54 20 1.89 15 2.30 14 1.34 18 3.20 22

RUPIAH 8805.14 8927.97 14333.45 9039.72 1339.71 12273.93 1130.44 195.50 106.89 6532.09 7.88 2905.03 203.07 6942.48 9461.79 298.44 288.93

YEN 82.375 83.524 134.094 84.570 12.533 114.827 10.576 1.8289 0.0094

Last

Shenzhen -c 439.99 U.S. TSM 13840.20 Global Select Div -d 223.65 Asia/Pacific Select Div -d 296.86 Hong Kong Select Div -d 217.05 U.S. Select Dividend -d 368.09 Islamic Market 2321.76 Islamic Market 100 2343.97 Islamic China/HK Titans 30 1670.09 Sustainability Korea 1488.77 Brookfield Infrastructure 2364.09 DJ-UBS Commodity -p 167.88

61.110 0.0737 27.177 1.900 64.949 88.518 2.792 2.703

NZ$ 1.348 1.367 2.194 1.384 0.205 1.879 0.173 0.0299 0.0002 0.016 0.0012 0.445 0.031 1.063 1.449 0.046 0.044

WON 1117.34 1132.93 1818.87 1147.11 170.01 1557.52 143.45 24.81 0.13 13.56 828.90 368.64 25.77 880.98 1200.67 37.87 36.66

0.69

Thomson Reuters is the primary data provider for several statistical tables in The Wall Street Journal, including foreign stock quotations, futures and futures options prices, and foreign exchange tables. Reuters real-time data feeds are used to calculate various Dow Jones Indexes.

Net change

-7.04 167.46 0.11 -1.22 1.00 3.86 20.37 21.78 0.93 46.81 2.25 0.89

PERFORMANCE YearThree-yr., to-date 52-wk. annualized

Daily

-1.57% 1.22 0.05 -0.41 0.46 1.06 0.89 0.94 0.06 3.25 0.10 0.54

0.9% 5.4 3.2 -0.2 -1.4 2.7 4.2 4.4 0.1 -0.1 4.3 3.4

9.6% 19.7 15.7 12.4 15.6 14.8 18.7 12.9 14.2 27.2 17.7 23.6

-4.1% 1.1 -4.3 -7.4 4.9 -3.6 1.2 -0.6 -3.3 3.6 0.8 -8.0

Source: DowJones Indexes

U.S.-dollar and euro foreign-exchange rates in global trading A$ 0.986

In euros

2965.94

-8.7

*Fundamentals are based on data in U.S. dollar. Footnotes: c-in local currency. d-dividends reinvested. p-previous day. Note: All data as of 11:30 a.m. ET.

Cross rates

Per euro EUROPE Euro zone euro 1 1-mo. forward 1.0004 3-mos. forward 1.0014 6-mos. forward 1.0037 Czech Rep. koruna-b 24.294 Denmark krone 7.4567 Hungary forint 272.29 Norway krone 7.7872 Poland zloty 3.9918 Russia ruble-d 39.312 Sweden krona 8.8296 Switzerland franc 1.2972 1-mo. forward 1.2969 3-mos. forward 1.2963 6-mos. forward 1.2955 Turkey lira 2.2319 U.K. pound 0.8563 1-mo. forward 0.8565 3-mos. forward 0.8572 6-mos. forward 0.8587

Close 288.46

Euro Stoxx 50

-4.8

Sources: Thomson Reuters; WSJ Market Data Group

Dow Jones Indexes

Price-toDividend earnings yield* ratio* Dows Jones Index

Region/Country Index Euro Zone Euro Stoxx

1.4

China

...

Price-to-

earnings ratio* 14

2.6

...

9

PERFORMANCE Yr.-to-date 52-wk.

13

3.24

Kuala Lumpur Composite

0.9862 1.0140 6.5724 0.1522 7.7891 0.1284 45.0400 0.0222 8806 0.0001136 82.38 0.012140 82.36 0.012142 82.32 0.012148 82.24 0.012160 3.0310 0.3299 1.3480 0.7419 85.650 0.0117 43.360 0.0231 1.2683 0.7885 1117.35 0.0008950 29.504 0.03389 30.475 0.03281

1.2

4806.45

Malaysia

1.3748 0.7274 9.1616 0.1092 10.8576 0.0921 62.7835 0.0159 12274 0.0000815 114.83 0.008709 114.81 0.008710 114.75 0.008715 114.64 0.008723 4.2251 0.2367 1.8790 0.5322 119.392 0.0084 60.442 0.0165 1.7679 0.5656 1557.53 0.0006420 41.126 0.02432 42.481 0.02354

16.3%

SPX/ASX 200

...

4.0288 0.2482 1.6560 0.6039 0.9741 1.0266 0.9747 1.0260 0.9761 1.0245 0.9786 1.0219 473.35 0.002113 1903.30 0.0005254 1 1 12.0428 0.0830 2.7685 0.3612 19.400 0.0515 1 1 4.29 0.232848

...

0.63

Australia

Topix

In U.S. dollars

5.6159 0.1781 2.3084 0.4332 1.3578 0.7365 1.3586 0.7360 1.3606 0.7349 1.3641 0.7331 659.83 0.001516 2653.11 0.0003769 1.3939 0.7174 16.7871 0.0596 3.8592 0.2591 27.043 0.0370 1.3939 0.7174 5.99 0.167042

1.3%

142.53

...

...

Per U.S. dollar

In euros

Stock indexes from around the world, grouped by region. Shown in local-currency terms.

Close

ASIA-PACIFIC DJ Asia-Pacific

Per euro

a-floating rate b-commercial rate c-government rate c-commercial rate d-Russian Central Bank rate f-Special Drawing Rights from the International Monetary Fund ; based on exchange rates for U.S., British and Japanese currencies. Note: Based on trading among banks in amounts of $1 million and more, as quoted by Thomson Reuters.

Follow the markets throughout the day with updated stock quotes, news and commentary at WSJ.com Also, receive email alerts that summarize the day’s trading in Europe and Asia. To sign up, go to WSJ.com/Email

earnings ratio*

ASIA-PACIFIC Australia dollar China yuan Hong Kong dollar India rupee Indonesia rupiah Japan yen 1-mo. forward 3-mos. forward 6-mos. forward Malaysia ringgit-c New Zealand dollar Pakistan rupee Philippines peso Singapore dollar South Korea won Taiwan dollar Thailand baht

London close on March 3

RINGGIT PH. PESO 3.031 43.360 3.073 43.965 4.934 70.584 3.112 44.515 0.461 6.597 4.225 60.442 0.389 5.567 0.0673 0.9627 0.0003 0.0049 0.037 0.526 2.249 32.167 0.0027 0.0388 14.306 0.070 2.390 34.187 3.257 46.594 0.103 1.470 0.099 1.423

S$ S FRANC 1.268 0.931 1.286 0.944 2.065 1.515 1.302 0.955 0.193 0.142 1.768 1.297 0.163 0.119 0.0282 0.0207 0.0001 0.0001 0.015 0.011 0.941 0.690 0.0011 0.0008 0.418 0.307 0.029 0.021 0.734 1.363 0.043 0.032 0.042 0.031

TW$ 29.504 29.915 48.027 30.290 4.489 41.126 3.788 0.6551 0.0034 0.358 21.887 0.0264 9.734 0.680 23.262 31.704

BAHT 30.475 30.900 49.609 31.287 4.637 42.481 3.913 0.6766 0.0035 0.370 22.608 0.0273 10.054 0.703 24.028 32.748 1.033

0.968

Source: Thomson Reuters via WSJ Market Data Group

MSCI indexes Developed and emerging-market regional and country indexes from MSCI Barra as of March. 03, 2011 Price-toDividend earnings yield ratio Morgan Stanley Index

LOCAL-CURRENCY PERFORMANCE

Last

Daily

YTD

52-wk.

2.30% 16

ALL COUNTRY (AC) WORLD* 342.00

0.18%

3.4%

18.1%

2.30

16

World (Developed Markets) 1,337.94

0.22

4.5

18.1

1.60

26

World Small Cap

245.97 -0.02

4.0

29.7

2.40

16

Kokusai (World ex-Japan)

1,323.45

0.05

4.6

18.4

2.90

15

EAFE

1,736.23

0.69

4.7

16.0

2.20

14

Emerging Markets (EM)

1,113.31

-0.10

-3.3

19.0

2.70

15

AC ASIA PACIFIC EX-JAPAN 464.46

0.77

-3.0

17.9

2.40

14

AC Far East ex-Japan

506.76

0.99

-3.5

19.8

1.80

16

Japan

588.43

-2.16

4.8

5.3

2.30

14

China

65.49

-0.78

-1.5

8.1

1.00

22

China A (China Domestic)

3,193.22

-0.32

3.4

1.4

2.50

22

Hong Kong

11,982.59

-1.66

-1.9

21.2

1.10

19

India

725.34

0.00 -10.6

7.9

1.30

11

Korea

554.65

-0.47

-5.5

23.1

2.50

17

Malaysia

549.53

-0.35

-2.0

17.9

3.10

14

Singapore

1,658.67

-1.49

-5.6

7.7

3.30

15

Taiwan

307.52

-1.32

-3.7

15.0

2.80

14

Thailand

402.13

-0.83

-2.2

36.2

4.10

17

Australia

980.74

-0.51

1.5

2.1

4.80

17

New Zealand

87.18 -0.50

4.0

3.8

1.70

18

US BROAD MARKET

-0.21

4.1

20.5

3.10

15

EUROPE

97.86 -0.68

2.6

14.6

1,482.15

*Twenty-three developed and 26 emerging markets

Source: MSCI Barra

26

THE WALL STREET JOURNAL.

Friday - Sunday, March 4 - 6, 2011

SCANNING THE GLOBE Dow Jones Industrial Average

Nasdaq Composite Index

P/E: 15

s 161.13, or 1.34%

LAST: 12227.93 YEAR TO DATE: OVER 52 WEEKS

s 1,783.79, or 17.1%

High Close Low

s 42.43, or 1.54%

LAST: 2790.50 YEAR TO DATE: OVER 52 WEEKS

s 650.42, or 5.6%

S&P 500 Index

P/E: 13*

P/E: 18 s 16.38, or 1.25%

LAST: 1324.82 YEAR TO DATE: OVER 52 WEEKS

s 137.63, or 5.2% s 498.19, or 21.7%

s 67.18, or 5.3% s 201.85, or 18.0%

12500

2800

1350

12000

2700

1300

11500

2600

1250

11000

2500

1200

10500

2400

1150

t

50–day moving average

10000 3 10 Dec.

17 23

31

7

14

21

Jan.

28

4 Feb.

11

2300

18 25

3 10 Dec.

17 23

31

7

14

21

28

Jan.

4 Feb.

11

1100

18 25

3 10 Dec.

17 23

31

7

14

21

Jan.

U.S. stocks: most active...

Symbol

Volume, in millions

AT&T Alcoa AmExpress BankAm Boeing Caterpillar Chevron CiscoSys CocaCola Disney DuPont ExxonMobil GenElec HewlettPk HomeDpt Intel IBM JPMorgChas JohnsJohns KftFoods McDonalds Merck Microsoft Pfizer ProctGamb 3M TravelersCos UnitedTech Verizon

T AA AXP BAC BA CAT CVX CSCO KO DIS DD XOM GE HPQ HD INTC IBM JPM JNJ KFT MCD MRK MSFT PFE PG MMM TRV UTX VZ

8.2 10.5 3.6 54.4 1.6 4.2 3.1 25.3 4.1 4.9 3.3 5.9 22.4 6.8 3.2 23.4 1.5 9.9 3.5 2.4 3.5 6.7 23.3 23.6 5.9 1.6 1.3 1.5 7.1

$28.06 16.63 44.36 14.11 71.31 104.03 103.99 18.57 65.37 44.11 54.62 85.56 20.81 43.46 37.52 21.77 163.45 46.15 60.94 31.72 76.40 33.06 26.30 19.59 62.27 93.12 59.48 83.61 36.37

–0.11 0.45 1.34 0.28 1.74 3.06 0.52 0.07 0.94 0.82 1.56 0.48 0.49 0.22 0.86 0.28 3.29 0.94 0.13 0.23 1.71 0.48 0.23 0.40 –0.13 1.80 0.67 1.56 0.03

–0.39% 2.78 3.11 2.03 2.50 3.03 0.50 0.41 1.46 1.89 2.94 0.56 2.41 0.51 2.35 1.30 2.05 2.08 0.21 0.73 2.29 1.47 0.86 2.08 –0.22 1.97 1.14 1.90 0.08

WalMart

WMT

5.8

51.91

–0.06

–0.12

Stock

Latest

CHANGE Points Percentage

4 Feb.

11

18 25

Sources: WSJ Market Data Group; Birinyi Associates

*Price-to-earnings ratio for the Nasdaq 100 Note: Price-to-earnings ratios are for trailing 12 months

DJIA component stocks

28

Stock

Volume, Symbol in millions

Citigroup SPDR S&P 500 MetLife AlcatelLucent ADS BankAm SPDR FnclSelSct iShrRu2000 PwrShrs QQQ SprintNextel iShrMSCIEmrgMkt Yahoo iShrMSCI Jpn FordMotor CiscoSys Pfizer

C SPY MET ALU BAC XLF IWM QQQQ S EEM YHOO EWJ F CSCO PFE

ADRs of Asian companies* CHANGE Points Percentage

Latest

192.8 79.7 77.9 61.5 54.4 37.8 34.2 33.2 28.3 27.7 27.6 27.6 27.2 25.3 23.6

$4.64 133.22 44.80 5.34 14.11 16.70 82.91 58.26 4.37 46.70 16.90 11.47 14.71 18.57 19.59

0.04 2.01 1.39 0.09 0.28 0.30 1.95 1.12 0.12 0.76 0.27 0.06 0.04 0.07 0.40

0.98% 1.53 3.20 1.81 2.03 1.86 2.41 1.96 2.82 1.65 1.62 0.53 0.31 0.41 2.08

1,066.1 1,936.7 682.8 4,175.8 1,947.0

$24.15 25.70 5.14 3.90 4.22

8.07 8.21 1.52 0.95 1.02

50.19% 46.94 41.99 32.20 31.88

AMLN 13,782.4 BXDD 6.7 SIGM 850.0 ALKS 2,431.3 RTSA 6.0

$11.62 15.52 11.98 12.40 28.88

–3.39 –2.35 –1.72 –1.70 –3.79

–22.58% –13.15 –12.55 –12.06 –11.60

52-WEEK High Low

$13.85 15.55 5.68 131.63 96.23 6.66 7.27 3.94 37.65 27.50 58.22 12.55 17.60 53.16 10.06 54.70 77.92 19.24 22.81 48.70 9.50 16.81 21.59 4.78 3.56 40.45 17.32 9.10 52.30 2.02

Biggest gainers... GlbDefTechSys AmSvcGp Accelr8Tch SuprcndTch DUSA Pharm

GTEC ASGR AXK SCON DUSA

...Biggest losers AmylinPharm BarclaysShrtD SigmaDsgn Alkermes iPathSXRusl2000

$9.30 7.05 4.48 51.25 58.38 3.33 4.45 2.50 15.25 14.35 33.21 8.38 10.91 31.35 5.22 44.36 53.28 14.58 17.48 26.16 3.02 11.30 13.75 1.91 1.18 25.85 10.43 4.75 36.80 1.20

Volume, Symbol in OOOs

Stock

TaiwanSemi SuntechPwr MitsuUFJ ADS Baidu ADS BHPBilton ADS AdSemEg ADS Slcnwr ADS UtdMicro ADS TataMtrs ADS FocusMediaHldg ICICI Bk ADS AU Optrncs ChinaUnicomHK CtripInt ADS Kongzhong ChinaMobile Infosys SK Tele ADS KT Crp ADS Netease.com SilicnMotnTch Wipro ADS LG DisplayADS ChinaTch ADS SifyTech ADS SonyCp KoreaElecPwr O2MicroIntl Canon ADS Linktone

TSM STP MTU BIDU BHP ASX SPIL UMC TTM FMCN IBN AUO CHU CTRP KONG CHL INFY SKM KT NTES SIMO WIT LPL CNTF SIFY SNE KEP OIIM CAJ LTON

CHANGE Latest Points Percentage

7,886.0 $12.24 0.03 5,222.6 9.64 –0.17 2,247.5 5.51 0.01 2,177.4 121.83 2.34 2,069.8 96.03 1.60 1,243.2 5.96 0.13 1,236.4 6.91 0.03 1,145.0 2.91 0.06 897.9 26.13 0.70 819.1 27.32 0.86 794.5 45.98 1.62 765.3 9.27 0.21 737.6 16.77 0.07 683.8 38.87 0.57 644.0 7.92 0.84 641.5 47.79 0.37 534.1 68.34 1.49 477.2 17.61 0.10 443.8 19.65 –0.01 413.8 47.02 1.38 312.3 9.26 0.10 283.9 13.56 0.54 277.6 16.23 0.29 252.5 4.57 –0.03 245.2 2.77 0.10 218.9 36.20 0.01 214.4 12.26 0.02 198.4 8.18 0.10 189.3 47.46 –0.25 77.8 1.56 0.07

0.25% –1.73 0.18 1.96 1.69 2.23 0.44 2.11 2.75 3.25 3.64 2.32 0.42 1.50 11.94 0.78 2.23 0.57 –0.05 3.02 1.09 4.15 1.82 –0.65 3.75 0.03 0.16 1.21 –0.52 4.70

*Most active American depositary receipts tracked by Dow Jones Source: WSJ Market Data Group

U.S. Treasury yield curve

Global government bonds

The curve shows the yield to maturity of current bills, notes and bonds; all data as of 3 p.m. ET.

Coupon

Country/ Maturity, in years

5.020% 5.570 2.093 3.747 2.552 4.341 1.892 3.394 1.693 3.360 1.835 3.670 1.749 3.309 0.728 2.983 3.081 4.871 0.240 1.295 1.533 3.501 5.864 7.546 3.289 5.389 0.693 1.877 1.448 3.796 0.760 3.540

SPREAD OVER TREASURYS, in basis points Latest Previous Month ago Year ago

426.0 203.0 133.3 20.7 179.2 80.1 113.2 -14.6 93.3 -18.0 107.5 13.0 98.9 -23.1 -3.2 -55.7 232.1 133.1 -52.0 -224.5 77.3 -3.9 510.4 400.6 252.9 184.9 -6.7 -166.3 68.8 25.6 ... ...

427.6 206.0 127.9 22.9 161.4 83.9 113.0 -13.4 84.4 -19.1 92.9 14.9 88.6 -23.0 4.3 -49.4 228.2 136.2 -42.9 -216.2 65.6 -4.7 503.2 407.5 247.3 189.6 -4.6 -157.8 72.4 28.9 ... ...

431.0 211.1 127.3 23.1 185.4 89.6 110.4 -10.2 90.0 -17.9 99.1 16.0 81.8 -22.2 -2.8 -54.7 200.1 134.4 -37.0 -216.4 73.7 -4.7 400.3 366.7 253.1 199.9 8.4 -152.5 72.9 27.7 ... ...

379.2 186.7 46.3 -4.8 29.0 4.7 65.0 -20.6 86.8 -19.4 14.5 -18.1 5.3 -49.1 -14.1 -85.9 54.3 34.5 -65.2 -228.6 12.0 -20.8 109.4 66.5 40.4 26.0 -46.3 -171.3 26.8 40.8 ... ...

Previous

YIELD Month ago

Year ago

4.945% 5.495 1.948 3.664 2.283 4.274 1.799 3.301 1.513 3.244 1.598 3.584 1.555 3.205 0.712 2.941 2.951 4.797 0.240 1.273 1.325 3.388 5.701 7.510 3.142 5.331 0.623 1.857 1.393 3.724 0.669 3.435

4.880% 5.490 1.843 3.610 2.424 4.275 1.674 3.277 1.470 3.200 1.561 3.539 1.388 3.157 0.542 2.832 2.571 4.723 0.200 1.215 1.307 3.332 4.573 7.046 3.101 5.378 0.654 1.854 1.299 3.656 0.570 3.379

4.606% 5.491 1.277 3.576 1.104 3.671 1.464 3.418 1.682 3.430 0.959 3.443 0.867 3.133 0.673 2.765 1.357 3.969 0.162 1.338 0.934 3.416 1.908 4.289 1.218 3.884 0.351 1.911 1.082 4.032 0.814 3.624

Source: Thomson Reuters

5% 4 s

4.750% Australia 2 4.500 10 3.800 Austria 2 3.500 10 4.000 Belgium 2 4.250 10 1.750 Canada 2 3.500 10 4.000 Denmark 2 4.000 10 3.750 France 2 2.500 10 1.500 Germany 2 2.500 10 0.580 Hong Kong 2 2.440 10 2.000 Italy 2 3.750 10 0.200 Japan 2 1.300 10 5.000 Netherlands 2 3.500 10 5.450 Portugal 2 4.800 10 2.300 Spain 2 5.500 10 4.000 Switzerland 2 2.000 10 4.500 U.K. 2 3.750 10 0.625 U.S. 2 3.625 10

Yield

One year ago

3 2 1 s

Latest, month-ago and year-ago yields and spreads over or under U.S. Treasurys on benchmark two-year and 10-year government bonds around the world. Data as of 11 a.m. ET

Wednesday 0

1

3

6

month(s)

1

2 3 5 710

years maturity

30

Ryan Index

Yield to maturity

Modified duration

30-year Treasury 10-year Treasury 7 Year Treasury Five-year Treasury Ryan Index 3 Year Treasury Two-year Treasury 1 Year Treasury Six-month Treasury Ryan Cash Index-a Three-month bill

4.554% 3.464 2.869 2.158 2.481 1.153 0.688 0.234 0.163 0.163 0.132

16.09 8.30 6.32 4.71 6.72 2.90 1.98 0.94 0.50 0.44 0.25

One-month bill

0.122

0.08

Month to-date

TOTAL RETURN

Quarter to-date

–0.96 % –0.38 –0.24 –0.08 –0.26 0.07 0.02 0.01 0.01 0.01 0.01 ...

Year to-date 12-month

–2.87 % –0.76 –0.27 0.02 –0.65 –0.10 0.03 0.13 0.07 0.07 0.04

–2.87 % –0.76 –0.27 0.02 –0.65 –0.10 0.03 0.13 0.07 0.07 0.04

6.02 % 4.88 5.54 4.11 4.20 2.54 1.18 0.73 0.32 0.37 0.26

0.03

0.03

0.16

a-Performance of a cash investment

Source: Ryan ALM

Key money rates Latest

52 wks ago

Prime rates

Latest Euro Libor One month

Offer Eurodollars One month

Bid

0.82563%

0.38063%

0.3500%

0.2500%

1.04813

0.59813

Three month

0.5500

0.4500

Six month

1.33375

0.90938

Six month

0.7500

0.6000

One year

1.70688

1.19875

One year

1.0500

0.8500

0.15964

0.08000%

Latest

52 wks ago

0.23071

0.13000

U.S. discount

0.75%

0.75%

Six month

0.29071

0.23000

Fed-funds target

0.25

0.25

One year

0.63071

0.50000

Call money

2.00

2.00

U.S.

3.25%

3.25%

Canada

3.00

2.25

Japan

1.475

1.475

Britain

0.50

0.50

ECB

1.00

1.00

Switzerland

0.54

0.53

Hibor One month

Australia

4.75

4.00

Three month

Hong Kong

5.25

5.25

Libor One month

52 wks ago

Three month

Asian dollars One month

0.2720%

0.26000%

0.22813%

Three month

0.30950

0.25219

Three month

0.3145

0.2566

Six month

0.46150

0.38319

Six month

0.4731

0.3860

U.K. (BBA)

0.503

0.510

One year

0.78725

0.83406

One year

0.7980

0.8390

Euro zone

0.39

0.29

0.24%

Overnight repurchase rates U.S. 0.21%

0.18%

Sources: WSJ Market Data Group; Reuters

Friday - Sunday, March 4 - 6, 2011

27

THE WALL STREET JOURNAL.

MARKETS LINEUP Asian index movers…

Moving the markets At right, Japan’s benchmark stock index and the biggest movers among the larger Asian stocks indexes and stocks Thursday. Below each index are its most actively traded stocks. The charts show the percentage change in each index’s or stock’s value, rather than the point change, for purposes of comparison. The index level or stock price is indicated on each axis. All indexes and stocks are shown in local currency terms.

Nikkei Stock Average

Kospi

Japan

South Korea

s

10586.02 0.89% or 93.62

Wall Street’s modest overnight gains supported sentiment. Softbank advanced 4.8% on the news of Apple’s second-generation iPad, which Softbank sells in Japan.

CBN 600 s

1970.66 2.20% or 42.42

Foreigners returned, buying up battered shares after six sessions of selling. Auto makers rose on strong February sales. Kia Motors gained 6.6%, Hyundai Motor 2.8%.

Stock

Mizuho Financial

Worries about monetary tightening hurt the market, but banks gained on expectations of strong results for last year. China Merchants Bank rose 4.2%; Hua Xia Bank gained 3.2%.

Singapore s

3037.35 0.33% or 9.84

Stronger economic data in the U.S. gave shares a lift. Commodity firms gained on the possibility that oil’s rise will lift the whole sector. Golden Agri-Resources added 2.2%.

3000

45000

4500

12500

2500

37500

3750

10000

2000

30000

3000

7500

1500

22500

2250

1000 M A M J J A S O N D J F 2010 2011

M A M J J A S O N D J F 2010 2011

Follow the markets throughout the day, with updated stock quotes, news and commentary at WSJ.com. Also, receive emails that summarize the day’s trading in Europe and Asia. To sign up, go to WSJ.com/Email.

t

27397.28 0.88% or 242.72

15000

5000

WSJ.com

Straits-Times

China

Volume in millions

Close

Change Net

75.48

169

1

0.60

Volume in millions

Close

Chinhung Int

33.12

266.00

34.00

Mirae

29.53

435.00

Stock

%

M'bishi Heavy

66.71

372

19

5.38

Mtshbsh Fin Grp

50.80

453

…

…

Kia Motors

6.77

15000 M A M J J A S O N D J F 2010 2011

Change Net

%

Stock

Volume in millions

Close

2.67

0.05

14.66

AgricBkofChina

552.48

Change Net

1500 M A M J J A S O N D J F 2010 2011

%

Stock

1.91

Genting Spore

Volume in millions

Close

92.47

1.95

Change Net

%

0.02

1.04

31.00

7.67

ChinaMinshengBkg

472.23

5.29

0.09

1.73

Golden Agri

90.92

0.70

0.02

2.19

62,700.003,900.00

6.63

ChinaMerchantsBk

399.31

14.03

0.56

4.16

Noble Grp

30.84

2.18

-0.01

–0.46

14.98

Everbright Bank 352.84

3.98

0.06

1.53

Sing Telecom

24.88

2.90

-0.01

–0.34

2.41

ShanghaiPudDevBank 263.70

13.45

0.27

2.05

Olam Inter

20.62

2.71

0.00

…

Nippon Sheet Gls

43.42

247

11

4.66

Seong An

6.03

1,105.00 144.00

Hitachi

42.20

497

5

1.02

Dpc

5.96

1,910.00

45.00

Asian stocks in the news CITIC Pacific Hong Kong

Samsung Fire & Mar Ins HK$21.55 Korea

Softbank

240,000 won

Japan

Hyundai Eng & Con ¥3,410

Korea

76,100 won Korea

s 4.1% or 9,500 won

The conglomerate said its 2010 net profit rose 50%.

Korea insurers rose in expectation of a centralbank rate hike next week, which could lift returns.

Apple introduced a new iPad, which Softbank sells in Japan.

The shares rebounded after falling 18% since the beginning of February.

The car maker a day earlier posted strong domestic and export sales gains for February.

In Hong Kong dollars

In won

In yen

In won

In won

400000

4000

100000

60000

18

240000

3000

75000

45000

12

160000

2000

50000

30000

80000 M A M J J A S O N D J F 2010 2011

9 2.29 1.9

Price-to-earnings ratio Earnings per share, past four quarters Dividend yield

PERCENTAGE CHANGE Daily 1 wk. 52 wks

Indus Gds & Svcs CITIC Pacific

0.7% 3.9%

2.8% 9.5%

22.7% 24.7%

Tata Steel India

623.40 rupee

t 1.7% or 10.90 rupee

The firm raised its stake in coal company Riversdale Mining to 27.1%.

In rupee

18 13381.76 1.3

PERCENTAGE CHANGE Daily 1 wk. 52 wks

Insurance Samsung Fire & Mar Ins

1.0% 4.1%

2.6% 7.6%

Price-to-earnings ratio Earnings per share, past four quarters Dividend yield

PERCENTAGE CHANGE Daily 1 wk. 52 wks

Telecommunications Softbank

0.5% 4.8%

2.2% 5.4%

17.9% 47.8%

14 5323.91 0.8

Price-to-earnings ratio Earnings per share, past four quarters Dividend yield

PERCENTAGE CHANGE Daily 1 wk. 52 wks

Constructn & Matl Hyundai Eng & Con

1.4% 6.6%

3.0% 7.3%

11.0% 25.4%

11 5763.35 0.8

PERCENTAGE CHANGE Daily 1 wk. 52 wks

Automobiles & Parts Kia Motors

0.5% 6.6%

2.6% 11.2%

Cheung Kong Infr Hldgs

Indo Tambangraya Megah United Co. Rusal PLC

Australia

Hong Kong

Indonesia

A$3.60

t 2.7% or A$0.10

In Australian dollars

5

HK$36.35

t 3.1% or HK$1.15

42,100 rupiah Hong Kong

t 4.8% or 2,100 rupiah

J.P. Morgan raised its target price on the stock to HK$42 from HK$31.50.

The company's 2010 net profit fell 39% despite higher coal prices.

In Hong Kong dollars

In rupiah

60

29.7% 178.7%

HK$12.32

t 5.1% or HK$0.66

The firm denied a Reuters report that Guinea halted its alumina exports from Conakry port.

75000

In Hong Kong dollars

20

4

48

60000

16

600

3

36

45000

12

400

2

24

30000

8

1 M A M J 2010

7 87.94 1.3

J A S O N D J F 2011

Price-to-earnings ratio Earnings per share, past four quarters Dividend yield

PERCENTAGE CHANGE Daily 1 wk. 52 wks

1.5% 3.5%

8.5% 25.3%

21 166.30 0.1

15000 M A M J J A S O N D J F 2010 2011

Insurance Australia Grp

200

0.3% -1.7%

Price-to-earnings ratio Earnings per share, past four quarters Dividend yield

25000 M A M J J A S O N D J F 2010 2011

800

M A M J J A S O N D J F 2010 2011

Basic Resources Tata Steel

1000 M A M J J A S O N D J F 2010 2011

The stock went ex-dividend.

1000

Price-to-earnings ratio Earnings per share, past four quarters Dividend yield

75000

320000

J A S O N D J F 2011

Price-to-earnings ratio Earnings per share, past four quarters Dividend yield

125000

s 6.6% or 3,900 won

24

6 M A M J 2010

5000

s 6.6% or 4,700 won

62,700 won

s 3.9% or HK$0.80

30

s 4.8% or ¥155

Kia Motors

17.7% 1.0%

None -0.04 2.5

J A S O N D J F 2011

Price-to-earnings ratio Earnings per share, past four quarters Dividend yield

PERCENTAGE CHANGE Daily 1 wk. 52 wks

Insurance Insurance Australia Grp

1.0% 2.6% -2.7% -0.8%

8.5% -11.3%

15000

12 M A M J 2010

M A M J J A S O N D J F 2010 2011 16 2.23 3.7

Price-to-earnings ratio Earnings per share, past four quarters Dividend yield

PERCENTAGE CHANGE Daily 1 wk. 52 wks

Constructn & Matl Cheung Kong Infr Hldgs

1.4% -3.1%

3.0% -3.3%

11.0% 22.6%

4 M A M J 2010

26 1647.73 4.9

J A S O N D J F 2011

Price-to-earnings ratio Earnings per share, past four quarters Dividend yield

PERCENTAGE CHANGE Daily 1 wk. 52 wks

Basic Resources Indo Tambangraya Megah

0.3% 1.5% -4.8% -8.7%

17.7% 31.4%

7 1.67 None

PERCENTAGE CHANGE Daily 1 wk. 52 wks

Basic Resources United Co. Rusal PLC

0.3% 1.5% -5.1% -3.4%

17.7% 44.4%

THE WALL STREET JOURNAL.

Friday - Sunday, March 4 - 6, 2011

HEARD ON THE STREET FINA NCIA L A NA LYSIS & COMMENTARY

Email: [email protected]

WSJ.com/Heard

Big shift in China autos British power trip The world’s biggest auto market is getting congested. Lured to China by a powerful trend—rising incomes mean rising demand for autos—auto makers now face a slowdown in growth. The government has phased out tax breaks, financing purchases has become more difficult and Beijing has begun to restrict issuance of license plates. After expanding 36% in 2010, passenger-vehicle sales grew just 21% in January from a year earlier. But the decline may have been steeper than the data suggest. Because manufacturers hit their 2010 sales targets early, they might not have counted some December sales until January. For 2011 overall, J.D. Power & Associates is forecasting a much slower growth rate of around 11%. Demand is still in the fast lane at the lower-price end, but this also is where competition is most intense. Domestic brands are making big additions to production capacity. Taken together, BYD, Chery Automobile and Geely Automobile Holdings, which in 2010 accounted for more than 10% of a fragmented market, will effectively double production capacity between 2010 and 2015. But foreign companies such as

is pricey for PPL

Hitting the slow lane Growth of auto sales in China is expected to slow significantly this year Total sales

Percentage change

15 million

70%

10

50

5

30

0

2001

’02

’03

’04

’05

’06

* Forecast

General Motors, Nissan and Honda, in joint ventures with local partners, are trying to muscle in. Companies that previously focused on the glittering east are venturing inland and down market. A natural result of this contest will be lower prices. BYD has announced plans for price cuts of up to 19% across five of its main models. Chery and Geely have so far declined to follow, but stock investors still fear a price war. Throw higher costs for raw materials and labor into the

’07

’08

’09

’10

’11*

10

Source: J.D. Power Associates

mix, and the consequence is lower profit margins. After running up sharply, Hong Kong-listed shares of BYD have been falling for a full year, and Geely has dipped 31% from a peak in November last year, considerably more than the 7% fall for the Hang Seng Composite Index as a whole. China’s independent car makers have started to stall already. But with competition set to intensify, falling stock prices don’t mean value has started to emerge. —Tom Orlik

Rule No. 1 in mergers and acquisitions: Never outbid the Chinese. PPL forgot that one with its $6.5 billion acquisition of a U.K. power grid from Germany’s E.ON. PPL reportedly beat a rival bid by Hong Kong’s Cheung Kong Infrastructure Holdings, and the price paid would seem to confirm that. It equates to a 33% premium to the network’s regulatory asset value, according to Goldman Sachs, which is far higher than the 12% premium at which U.K. water companies trade. It also is higher than the premium Cheung Kong paid for Electricité de France’s U.K. grid last year, estimated at 21% by UBS. PPL should reap some savings by combining the new network with its existing U.K. business. Even so, the targets it announced, which factor in regulators inevitably clawing back some of the benefits for British bill payers, equate to a net present value of about $450 million at a discount rate of 7%. This is only about a quarter of the estimated premium paid. That PPL’s stock price rose on news of the deal speaks partly to the

optics of instant earnings-per-share accretion. Investors should remember, however, that it is pretty hard to get earnings dilution with a cash deal when interest rates are as low as they are. Of more benefit is that PPL expects this deal to raise its share of profits from regulated businesses to 75% by 2013, from 60% this year.

PPL reportedly beat out a rival bid by Hong Kong’s Cheung Kong Infrastructure Holdings. Steady regulated utility profits have become more attractive to investors whipsawed by the volatility of recent years. PPL’s own earnings more than halved in 2009. Reducing the company’s exposure to low U.S. electricity prices isn’t a bad thing, either. But PPL is paying a high price to escape its past. —Liam Denning

A closer look at Glencore reveals some cobwebs Glencore International is emerging into the sunlight. An as-yet-unconfirmed initial public offering could see Glencore sell as much as 25% of its shares to raise $12 billion, or $48 billion for the entire company, according to a person familiar with the situation. At eight to 12 times its projected earnings, that valuation is between those of commodities traders like Noble Group and pure mining companies like Xstrata, in which Glencore holds a 34.5% stake. As Glencore resembles both, the potential valuation doesn’t feel out of line at first glance. But its investor pitch will need to address key risks. Like Goldman Sachs, a partnership that went public in 1999, Glencore’s main selling point is its able personnel. Glencore will argue that its partners, whose average age is 43, are young and committed enough not to be tempted to cash out post-IPO. Key

department heads will likely have lengthy lock-ins on their holdings to make sure. Whether Glencore uses its new capital to pay down debt or for growth also is key. Its model relies on owning mining assets, run as cost centers, whose product Glencore’s trading arm can use to take advantage of arbitrage opportunities. Glencore will need new capital to fund acquisitions that could boost its trading operations. But it may need to pay down its debt, now rated just one notch above “junk” status. Glencore’s mining and trading model doesn’t provide insurance against commodities cycle swings, either. Return on equity was 33.1% in 2007 but fell to 16.3% in 2009. An IPO valuation on the low side of the current projected range may be justified. —Andrew Peaple

OVERHEARD Worries about China’s growing appetite for mining acquisitions may be overblown. PriceWaterhouseCoopers estimates $113 billion’s worth of mining mergers and acquisitions were done globally in 2010. Acquisitions by Chinese companies totaled not quite $12 billion, or just more than 10% of the total. Acquirers from Canada, the U.S. and Australia each were more active. Indeed, Rio Tinto and Xstrata—both British-based—together have bought more in value

terms in the past decade than all Chinese companies put together. Many Chinese deals, especially in Australia, have been small in nature, with Chinese acquirers providing financing in return for guaranteed supply. With the world’s mining output concentrated in the hands of a few producers, and India increasingly competing for the resources that remain, the prospects that Chinese acquirers can easily change the balance of power look bleak. —[email protected]

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WEEKEND JOURNAL. asia.WSJ.com/lifestyle

Gale International (top); Getty Images

Friday - Sunday, March 4 - 6, 2011

Cities of the sky

From top: South Korea’s New Songdo City features vast ‘instant neighborhoods’ and art for viewing from the air; passengers at the Dubai airport.

From Dubai to Chongqing to Honduras, the Silk Road of the future is taking shape in urban developments based on airport hubs: Welcome to the ‘aerotropolis.’ BY GREG LINDSAY o arrive at midnight at Terminal 3 of Dubai International Airport, as I did recently, is to glimpse the pulsing, nonstop flow of the new global economy. The airport, which runs full-tilt 24/7, is packed at all hours. Nigerian traders bound for Guangzhou mix with Chinese laborers needed in Khartoum, Indian merchants headed to clinch a deal in Nairobi, and United Nations staff en route to Kabul. Dubai’s recent financial woes have forced the tiny Gulf state to scrap or scale back some of its more outlandish development schemes, including The World, an artificial archipelago shaped roughly like a world map. But one project has not flagged: the new concourse for Terminal 3. With construction continuing around the clock, the annex to what is already the world’s largest building is desperately needed to accommodate the fleet of 90 Airbus A380s ordered by Emirates, Dubai’s government-owned airline. In a meeting two weeks ago, Sheikh Ahmed bin Saeed al-Maktoum, the chairman of Emirates, laughed as he recalled the widespread doubts that Emirates could pay for—and fill—its superjumbo jets. But it can, and it has, and despite the downturn, Dubai has stuck to its plans to develop the world’s largest airline from the world’s busiest hub. In public statements, Sheikh Ahmed has equated the future of Dubai with the future of Emirates, calling his country’s mammoth air-

T

port the center of a new Silk Road connecting China to the Middle East, India and Africa. Thanks to the jet engine, Dubai has been able to transform itself from a backwater into a perfectly positioned hub for half of the planet’s population. It now has more in common with Hong Kong, Singapore and Bangalore than with Saudi Arabia next door. It is a textbook example of an aerotropolis, which can be narrowly defined as a city planned around its airport or, more broadly, as a city

SELF-PORTRAIT MAN What inspires British painter Tony Bevan W4

less connected to its land-bound neighbors than to its peers thousands of miles away. The ideal aerotropolis is an amalgam of made-to-order office parks, convention hotels, cargo complexes and even factories, which in some cases line the runways. It is a pure node in a global network whose fastmoving packets are people and goods instead of data. And it is the future of the global city. This may come as a surprise to Americans, many of whom have had it with both

FALLING OFF THE BONE A Singapore chef’s recipe for perfect rack of lamb W5

flying and globalization and would prefer a life that’s slower and more local. But there is no resisting the relentless expansion of the world economy, and the aerotropolis—fast, efficient, far-reaching and filled with generic “world-class” architecture— embodies it. In places like Dubai, China, India and parts of Africa, cities are being built from scratch around air travel, the better to plug into the global trade lanes overhead. At present more than half of humanity lives in cities. The percentage is higher in the developed world—four in five Americans live in downtowns or suburbia. China’s rate is half that, and India has not yet begun to urbanize in a serious way, with only 29% of its people in cities. Between now and 2030, the McKinsey Global Institute estimates, India must build a new Chicago every year to absorb the millions of villagers streaming from the countryside in search of work. While the number of city dwellers worldwide will nearly double in 40 years to more than six billion people, the size of cities’ footprints is expected to increase twice as fast. This hasn’t been lost on Paul Romer, the Stanford University economist overseeing the development of an instant city in Honduras. He proposes building “charter cities” in impoverished states with new laws, new infrastructure and foreign investors—free trade zones elevated to the realm of social experiment. Mr. Romer sold Honduran President Porfirio Lobo on the idea in November Please turn to next page

THE NEW PLAID Gingham, that checked cotton fabric, is in for spring W7

W2

THE WALL STREET JOURNAL.

Friday - Sunday, March 4 - 6, 2011

WEEKEND JOURNAL

Cities of the sky for a world in motion The world in flight 2.4 billion Air travelers in 2010 3.3 billion Projected air travelers in 2014 9.4% Projected average annual growth in international passenger demand in the Middle East, 2010-2014 4.9% Projected average annual growth in international passenger demand in North America, 2010-14 31 million Metric tons of international cargo traffic in 2010 Zuma Press

38 million Projected metric tons of international cargo traffic in 2014 Source: International Air Transport Association

Attendants on an Emirates Airbus 380 in Beijing. Dubai has positioned itself as a major airport hub. ing it with $51 billion worth of aircraft. That was the precursor to its plan to lure franchise branches of the Guggenheim Museum, the Louvre and New York University, along with an entirely new section of the city in which to put them. Qatar’s rulers have done much the same in Doha, bulking up Qatar Airways and building a new airport ahead of its winning bid for the 2022 FIFA World Cup. The ultimate state capitalist and player in this game is, of course, China. For all the attention paid to its high-speed railways, the Chinese state is spending as much if not more to build 100 new airports by 2020, with new cities to match. In the western city of Chongqing, huge swaths of countryside have been paved in preparation for the arrival of China’s electronics manufacturers, which are pulling up stakes along the coast. Led by HewlettPackard and Foxconn, the maker of Apple’s iPhones and iPads, Chongqing aspires to produce nearly half the world’s laptops by 2015, all of which will leave the city by air. As a matter of policy, this strategy is a response to the millions of peasants leaving their farms for the city in search of work. China is building aerotropolises as a means

to funnel growth away from the coast. The aerotropolis is also attracting private developers. In India, where the government hopes to fund a half trillion dollars’ worth of infrastructure with public-private partnerships, airports are at the top of most companies’ wish lists. GMR, one of India’s largest industrial conglomerates, built a new airport in Hyderabad and a new international terminal in Delhi in exchange for land to develop around both. A private consortium—including the government of Singapore—is building new airports and cities near Ludhiana and Durgapur, in an attempt to create India’s answers to the FedEx and UPS cargo hubs in Memphis and Louisville, Kentucky. Outside Seoul in South Korea, Songdo International Business District bills itself as the world’s smartest, greenest city and the most expensive privately financed real-estate project in history, with a price tag of $35 billion. It was originally commissioned by South Korea’s government to be a magnet for attracting foreign direct investment. The American developer Stan Gale was hired to a build an instant city the size of downtown Boston on a man-made island connected to Seoul’s airport via a 21-kilome-

ter-long bridge. What was imagined as a hub for Western expatriates—a mini-Manhattan floating off the coast of South Korea, complete with a “Central Park”—has been settled instead by families from Seoul. The city won’t be finished until 2015, at the earliest, but Mr. Gale aims to sell 20 more just like it to mayors across China. Chongqing and Changsha have already expressed an interest. The aerotropolis arrives at a moment when urban centers seemingly have started to rule the world. Just 100 cities account for nearly one-third of the global economy. “If the 20th century was the era of nations,” South Korean President Lee Myung-bak pronounced at New Songdo’s christening in 2009, “the 21st century is the era of cities.” It is tailor-made for today’s world, in which no nation reliably dominates and every nation must fight for its place in the global economy. It is at once a new model of urbanism and the newest weapon in the widening competition for wealth and security. Greg Lindsay is co-author, with John Kasarda, of “Aerotropolis: The Way We’ll Live Next.”

Gale International

Continued from previous page and has stayed on as an adviser. Last month, the Honduran Congress voted to amend the country’s constitution to allow the pilot project to proceed. In making his case to the Honduran public, Mr. Romer pitched the city as an aerotropolis. “Honduras could be the hub that brings Central America and Latin America into the world-wide network of air traffic,” he wrote. “Central America will eventually have a major hub. It’s a question of where, not if.” Without air connections to the outside world, his charter city will stagnate. Every aerotropolis is locked in competition with every other one, just as every financial center is jostling for position in the new multipolar international order. The principle is the same: Everyone wants to be the hub; no one wants to be the spokes. This has made the aerotropolis ripe for experimentation when it comes to governance, whether it’s simple tax-free zones, the charter cities Mr. Romer proposes, or the “state capitalism” practiced by Dubai or Singapore. (The word “aerotropolis,” I should note, was coined by John Kasarda, a business professor at the University of North Carolina and my co-author on the forthcoming book of that title.) The basic aim of an aerotropolis is to disrupt local incumbents and monopolies using the long arm of air travel. It allows Indian hospitals to entice American heart patients for top-notch surgery at rock-bottom prices. It lets factories move out to the far reaches of western China to manufacture the iPad for lower wages while absorbing millions of urban migrants. Floating above it all, meanwhile, are the globe-trotting executives chasing emerging markets. The aerotropolis is the city that state capitalism built. In Dubai, Emirates is a wholly owned subsidiary of “Dubai Inc.” From its beginning 25 years ago, the airline was seen as a strategic arm of the state, paying no taxes while importing the foreign labor that built the place. Determined to prevent the world from connecting through Dubai, its oil-rich neighbor Abu Dhabi eventually followed suit, starting its own airline in 2003 and supply-

INCHEON GRAND BRIDGE The Incheon Grand Bridge is the longest cable-stayed bridge in South Korea, running over the water for more than 20 kilometers. Connecting New Songdo (which won’t be completed until at least 2015) with Incheon International Airport, it opened in 2009.

NORTHEAST ASIA TRADE TOWER The Northeast Asia Trade Tower is the tallest building in South Korea at 305 meters and 68 floors. Completed in 2009, it houses the country’s highest observatory (on the 65th floor), a luxury hotel, serviced residences and retail stores.

CENTRAL PARK New Songdo’s Central Park is a self-watering ‘eco park.’ It has plastic cisterns below ground to store water, and its canals, hillocks and plantings are designed to represent the landscape of the Korean peninsula when viewed from the air.

SONGDO CONVENSIA The Songdo Convensia Convention Center was conceived as a sculpture to be viewed from the air. The roof, with clad stainless steel ‘shingles’ that glint in the sun, can be seen distinctly on the flight paths to and from Incheon International Airport.

FIRST WORLD TOWERS The First World Towers are a residential complex, an ‘instant neighborhood’ made up of four 65-story towers, eight slab buildings and eight row houses. Home to 7,000 of the city’s 65,000 residents, it contains 2,545 apartments.

Friday - Sunday, March 4 - 6, 2011

THE WALL STREET JOURNAL.

WEEKEND JOURNAL

America goes gaga for Adele BY ETHAN SMITH n a British pop scene filled with female singers with penchants for vintage American soul, Adele stands apart for her powerful voice, her disarming candor—and a remarkable sales record. The 22-year-old London native’s second album, “21,” went on sale last week in the U.S., a month after it did in her home country, and is on pace to sell about 300,000 copies its first week out, a strong debut in these days of flagging album sales. “21” also was among the top 10 albums on iTunes before it even went on sale, and immediately hit No. 1 last Tuesday when it became available. Already a major star in the U.K., she’s now hoping that her second time out in the U.S. vaults her from promising newcomer to superstar. In more ways than one, Adele is the anti-Lady Gaga. The unapologetically full-figured Adele emphasizes substance over style, preferring to keep her sound spare and built around basics like guitar, keyboard, drums and horns. And unlike other British chanteuses who have tackled American soul—from Dusty Springfield up to Amy Winehouse—Adele writes most of her own songs.

I

Adele stands apart for her powerful voice, her disarming candor—and a remarkable sales record. A deliberately un-flashy artist like Adele presents an unusual challenge, and opportunity, for her U.S. handlers. In addition to courting retailers and soundtrack supervisors, her record label mounted an aggressive online marketing campaign that it dubbed “21 Days of Adele.” Each day starting Feb. 1, her website linked to a new performance, interview or contest. Adele (her last name is Adkins, though she goes by only her first name professionally) can be winningly self-effacing. During a headlining appearance at the Hollywood Bowl in 2009, she apologized to the audience that her makeup, on top of a recent sunburn, made her look “like a drag queen.” Trained as a pianist, guitarist and songwriter, Adele wrote most of the songs on her two albums, and is contractually free of record-company meddling in her music-making process, a measure of artistic control rare for a young performer. Though “21” still relies primarily on the same Motown influences that informed “19,” the singer also toyed with vocal inflections she picked up from country singers ranging from Dolly Parton to Wanda Jackson to Rascal Flatts. Did her British or American labels raise an eyebrow at the occasional hint of twang that appears in her voice? “They can’t say anything,” she says. Adele’s sales in the U.K. drew recent comment because they tied a record held by the Beatles, albeit an obscure one: two albums and two singles in the top-five charts in the same week. (The Fab Four did it in the days of “I Want to Hold Your Hand” and “She Loves You.”) For the U.S. release, Sony

Music’s Columbia Records spent nearly six months laying the groundwork. In October, Adele flew to Minneapolis to perform songs from her album for executives and employees at Best Buy and Target, two of the biggest retailers still selling CDs. Columbia executives including President Steve Barnett paid personal calls on executives at iTunes and Amazon.com to lobby for aggressive promotions. “We knew we could take nothing for granted,” Mr. Barnett recalls. After a private performance for movie and TV executives in Los Angeles, the song “Rolling in the Deep” played prominently during trailers for the film “I Am Number Four.”

Contour/Getty Images

The English soul singer-songwriter’s latest album, ‘21,’ is off to a strong start in the U.S.

Adele, 22 years old, prefers to keep her sound spare and built around basics like guitar, keyboard, drums and horns.

W3

W4

THE WALL STREET JOURNAL.

Friday - Sunday, March 4 - 6, 2011

WEEKEND JOURNAL TOP FIVE

K.F. Seetoh’s favorite Singapore cze char eats “Food is one of the saving graces of Singapore. Otherwise, this place is so squeaky clean and boring,” jokes street food guru K.F. Seetoh. His annual publication, the “Makansutra”—“makan” is Malay for “food and eating,” and “sutra” is Sanskrit for “guide”—has become the bible for foodlovers looking for the gems of Singapore’s hawker stalls and other lowbrow venues. For Mr. Seetoh, perhaps no cuisine hits closer to his heart than cze char (Hokkien for “cook, fry”) restaurants. The dishes served in these joints—which are to Singapore what the neighborhood deli is to New York—are famous for what Mr. Seetoh calls the “third taste.” “It’s not yours, it’s not mine, it’s a combination. Get it?” Mr. Seetoh explains. “Think about Indian cooks that fry noodles in woks like the Chinese; Hainanese cooks that make up a bloody good curry. These tastes are not tied to a specific culture or ethnicity. They originated from sheer ingenuity and desperation.” Given only enough room in your stomach to sample a few cze char specialties, Mr. Seetoh reveals his five favorite places to eat them in Singapore.

Ben Brown Fine Arts (3)

JB Ah Meng (Geylang, Lorong 3. Tel: 65-6741-2418): “Even Ferran Adrià [chef of El Bulli] fell head over heels for the crispy tempura prawns. They are coated with salted duck-egg yolk and batter-fried sweet-corn kernels,” says Mr. Seetoh.

Left, ‘Self Portrait after Messerschmidt’ (PC105), 2010; ‘Tony Bevan Head’ (PC049), 2010

Tony Bevan’s self-portraits Why the artist likes to paint his own image ritish contemporary painter Tony Bevan’s artwork—he’s best known for his self-portraits and paintings of architecture—has been described as “violent, vivid paintings, as angry as a bruise and seductive as a Glasgow kiss,” by one critic (Alfred Hickling for The Guardian). In a National Portrait Gallery catalog essay for Mr. Bevan’s current show, curator Paul Moorhouse writes, “In Bevan’s art, self-portraiture has broken with its historic infatuation with recording personal appearance.” His paintings are displayed in museums around the world, including the Metropolitan Museum of Art in New York and the National Portrait Gallery and Tate Gallery in London. Mr. Bevan, who was born in 1951 in Bradford, England, now works in London. His first solo show in Hong Kong is on view until April 9 at Ben Brown Fine Arts.

dent, I always thought you should just look at the sculptures first—the quality of the sculpture—and forget the titles and forget the psychoanalytic approach, whether this person was psychotic or not, but just to go and look at the sculptures. And… I think there are aspects of Messerschmidt that I’ve always held in my unconscious somewhere and have always filtered through, or percolated into, other works.

B

Why do you do self-portraiture? It’s something that I’ve been interested in for many years—the last 30 years. I think it’s possibly the way to express your own situation and experience through how you feel onto canvas. This interested me. It’s really having this model that you know and you revisit—as an endless supply of feeling that you can go into. When did you do your first self-portrait? I suppose I was doing it as a child. But it’s only in the last 35 years that I’ve continuously done self-portraits. And then around the period of 2009 I made a number of self portraits—about 20 self-portraits—that were really to sculptures of [Franz Xaver] Messerschmidt, an 18th-century German

British painter Tony Bevan at work sculptor, whose work I’ve been interested in for years. When I was a student I wrote my thesis on this German sculptor. I found the sculptures very fascinating, and they stayed with me for many years. I’ve used elements in the past, but recently I decided to work specifically through these sculptures. So I used formal elements from the sculptures to make self-portraits because it’s believed that a lot of these sculptures were self-portraits. So I used the formal elements of his to work through my own self-portraits. What about his work drew you to it? I first saw them illustrated in a book called “Psychoanalytic Approaches to Art”… When I came to them they looked incredibly contemporary, and I hadn’t seen any of them before. I just found these things fascinating, and they had very unusual titles, which I later found out were added a hundred years after his death because people saw this physiognomy, illustrations of single expressions, really. So when I wrote this art-history thesis, which you had to do as a stu-

Siang Hee (89 Zion Rd. Tel: 65-9736-4067): It’s not just the deep-fried pork knuckle—which is first steamed, then air-dried, and finally deep-fried to achieve extra crispiness—that’s delicious. It’s the addictive dipping sauce, made from chili, lime, and apricot jam. “When you put it in your mouth—fireworks,” says Mr. Seetoh. Joo Hing (360 Joo Chiat Rd. Tel: 65-6345-1503): In traditional Chinese cooking, steamed fish head—usually from cod—is seasoned with a simple douse of soy sauce and ginger strips. But the folks in this cze char eatery layer on a paste of Chinese miso (fermented beans), ginger, lime, chili and soy sauce. The end product is buried in crispy lard cracklings. Lai Huat Seafood (72 Horne Rd. Tel: +65-6299-3024): Mr. Seetoh’s choice for the ultimate beer food, the deep-fried pomfret has been a signature of this eatery for over half a century. The fish’s flaky, sweet flesh is perfectly balanced with a layer of sambal (a chili-based sauce), which is smeared over the entire fish. Be wary of the spice level. “You’ll be breathing out of your mouth,” says Mr. Seetoh. —Amy Ma

In your work, two things stand out: portraits and architectural paintings. What links these two subjects? For me, they’re very similar. If I’m working with a piece of architecture or painting the heads, they become these spaces to enter into, for the imagination to enter into. Spatially both the head and the building are a very close comparison. And with the structures—these internal and external structures of the head, and the structures of the buildings—for me, there’s a great deal of similarity. The lines become almost a threshold of going into this particular spatial area, into the building, and into the head. So they’re very closely connected. Is there a facet of contemporary art you try to investigate or examine further? I don’t think it has to do with if it’s contemporary because we’re in this time. But I absorb things around me, and also I’m very aware of art history, and how artists have dealt with it in the past…. For me, painting still holds a fascination. I get very excited by painting even after all these years. I just find it endlessly surprising and inventive—what can actually be done with paint. Ben Brown Fine Arts Hong Kong, 301 Pedder Building, 12 Pedder St., Central, Hong Kong. Tel: 852-2522-9600

Nico Di Mattia

BY DORETTA LAU

Sin Huat Seafood (Geylang, Lorong 35. Tel: 65-6744-9755): When Mr. Seetoh brought Anthony Bourdain here for an episode of “No Reservations,” a food show on the Discover Travel & Living Channel, the celebrity chef had to wait close to one hour just like everybody else. “The owner saves his best dish for last: a crab bee hoon (crab stir-fried with rice vermicelli) because it trumps everything else,” he says.

Friday - Sunday, March 4 - 6, 2011

W5

THE WALL STREET JOURNAL.

FOOD
DRINK

Burgundy: When it’s good, it’s very, very good... At a Bacchanalian wine event in New York, a taste of the ups and downs—and ups!—of fine Burgundy [ Wine ] ‘What I love about Burgundy is the authenticity,” says Daniel Johnnes, the hyperactive, diminutive dean of American Burgundy geeks, over an omelet at the New York restaurant Balthazar. “You meet a Burgundy grower, they’re farmers, they spend half the day on their tractors. You shake their hands and they are calloused. When you meet a chateau owner in Bordeaux, his hands are smooth and he’s wearing a foulard.” As generalizations go, this one is pretty accurate. Two days later, Mr. Johnnes welcomed more than 30 Burgundian winemakers for the 10th La Paulée de New York, and more than a few of them looked as if they’d just climbed off a tractor. These French farmers were received reverentially by several hundred of America’s wealthiest citizens, more than a few of whom travel in private jets and chauffeured Maybachs, and all of whom had paid 1,400 U.S. bucks for dinner. Mr. Johnnes modeled his New York celebration on La Paulée de Meursault, which was founded in 1923 when vigneron Jules Lafon gathered his neighbors for an autumn feast to celebrate the harvest. Mr. Johnnes, who comes from a family of union organizers, first fell in love with French food

Kent Hanson (2)

BY JAY MCINERNEY

From left, chef Michel Troisgros, Daniel Johnnes and chef Tom Colicchio at La Paulée de New York—this year marked the event’s 10th anniversary; right, les Cadets de Bourgogne, a 12-man choir, were flown in especially for the event. and wine when he lived there as a student in the 1970s. Originally he studied cooking but eventually turned his attention to wine, becoming sommelier for Drew Nieporent’s influential Montrachet in New York. As its wine director, Mr. Johnnes had a significant impact on the emerging American wine scene. The wine list was devoted to Burgundy and Mr. Johnnes began traveling to the source, the fabled Côte de Nuits. In 1989 he invited a few of his favorite Burgundy makers to New York. “It was kind of wild. Most of them had never been to the States,” he says. He continued to invite Burgundian vignerons to meet American oenophiles at Montrachet, and in 2000 he launched La Paulée de New York, an event that has become an insti-

tution in the wine world, the annual gathering of American Burgundy Nuts. When I say “nuts,” I’m being kind. You have to be more than a little mad, and more than a bit of a masochist, to love Burgundy. Burgundy is like the girl with the curl in the nursery rhyme. When she’s good she’s very very good and when she’s bad she’s horrid. Case in point, the La Paulée collector’s dinner, an intimate $3,750-a-head feast which took place the night before La Paulée’s larger mainevent dinner. At the collector’s dinner, which gave 40 guests a chance to taste some very rare bottles, there was wild bottle variation in the older wines dating back to 1966, none of which cost less than four figures a bottle and many of which were no fun to drink. Most

Melt-in-your mouth tender lamb Skip the preseasoning: Adding salt to meat draws out the moisture, and at low temperatures, it will also crystallize and form a hard layer on top of the meat. Instead, Mr. Chok seasons only with a light sprinkling of sea salt after the rack of lamb is finished roasting completely.

[ Dish ] Jimmy Chok, one of Singapore’s first homegrown celebrity chefs—he was a contestant on season two of Channel NewsAsia’s reality show “Perfect Meal” in 2010—keeps an his eye on the clock for the rack of lamb he has in the oven during his interview. His newest restaurant venture in the city, Bistro Soori, which boasts as a partner the hotelier Chan Soo Khian of Alila Villas Soori in Bali, opened in September 2010. Mr. Chok has been cooking this recipe—a rack of lamb with orange hoisin sauce—the same way since 1996, when he won gold with this dish at the Food Asia competition in Singapore. Though most chefs achieve this tender, falling-off-the-bone quality by cooking things sous vide, a technique that calls for ingredients to be sealed in airtight bags and cooked at low temperatures for long periods of time, Mr. Chok prefers cooking with things that “a typical person has in his or her home kitchen.” “Why make things more com-

Bistro Soori

BY AMY MA

plicated when it doesn’t have to be?” says Mr. Chok, adding that sous-vide is wasteful. A vacuum machine costs roughly 6,000 Singapore dollars (US$4,714), each plastic bag costs another 30 Singapore cents, and a circulator is about another S$2,000. He shows us how to create one of his triedand-true dishes without the fancy equipment. Slow cooking: “Temperature solves everything,” says Mr. Chok. He cooks his rack of lamb in the oven at 70 degrees Celsius for one-and-a-half hours. At that temperature, water doesn’t boil, so the juice stays within the lamb. “You’ll be surprised how not even a single drop of juice is on the tray,” he adds.

Fusion inspiration: To mask the gaminess of the lamb, Mr. Chok uses hoisin sauce, made milder with orange juice and zest, with garlic and chilis as the base for his sauce—a slightly sticky, but pourable concoction that is reminiscent of sweet-and-sour sauce. “Fusion is not a dirty word,” says the chef, defending the style of cooking from critics. “Think about French pastry for example. It uses vanilla beans from Madagascar, which is not a European ingredient. But is that considered fusion? All world cuisines are a blend of different flavors.” Starch binds it together: As an accompaniment to his dish, the chef often makes a batch of mashed potatoes. Just Idaho potatoes, cooked down, with a bit of olive oil. “Keep it chunky,” he adds. Price: S$28.50 Bistro Soori, 2 Teck Lim Rd., Singapore. Tel: 65 6438 3802

of the participants weren’t shocked by this development. And yet, when it’s good… La Paulée had many satellite events, seminars, tastings and even an auction, but the big event was the Saturday night dinner. The meal itself, presided over by chef Daniel Boulud—who has been La Paulée’s head chef from the first year and since 2005 has employed Mr. Johnnes as his wine director. It’s a thoroughly hedonistic experience. Collectors bring their best bottles of Burgundy to share with their tablemates. I brought a 1990 Rouget Echézeaux and a 1993 Anne Gros Richebourg—in most company these would be two superstars—and frankly I felt like a piker, given some of the other offerings. Early on, a Jeroboam of ’92 Leflaive Bâtard Montrachet ap-

peared at our table. I wish I could say that these Burgundy holy of holies were merely okay, but I can’t. Just when you’re about to swear off the stuff forever, which I was considering after the collector’s dinner the night before, I was suddenly wondering how much money I could get for an eight-year-old Audi, or whether I could just trade it for a single, 750-milliliter bottle of the ’64 DRC La Tache. The star at our table was Aubert de Villaine, the 71-year-old proprietor of Domaine de la Romanée-Conti, one of the few Burgundian vignerons who probably wears a foulard from time to time. But even the aristocratic Mr. de Villaine seemed attuned to the peasant spirit of Burgundy, singing and clapping along with les Cadets de Bourgogne, a 12-man choir of gray-haired bon vivants that Mr. Johnnes had flown in from Burgundy for the occasion. Mr. de Villaine was almost upstaged when someone announced the arrival of Jean-François Coche of the legendary domain Coche Dury. Hedge fund managers, investment bankers and heirs to huge American fortunes—and yes, one novelist/wine columnist— almost squealed with excitement, like teenage girls who’d just been informed that Justin Bieber was in the house. There’s only one wine region in the world, so far as I know, that inspires this kind of passion, even, and especially, among an audience that can afford anything its pampered heart desires.

Wine 101: What to do with leftover wine Once you pop open the cork, wines can spoil in a matter of hours. The fruity flavors and aromas in your wine would have died, leaving you with more or less alcoholic vinegar. “Oxygen is both wine’s friend and enemy,” says Susan Darwin, an executive at the wine bar California Vintage in Hong Kong. “It’s like a bell curve—exposure to oxygen in the beginning can bring out new flavors, but at the end of it, the wine can start to break down.” Thanks to some new technological advances, however, preserving opened bottles for a little longer has become a possibility. Here are some options. Vacuum pump and stopper. The least expensive way to preserve wine is to invest in a stopper and pump, which can be used multiple times and costs roughly US$5. Simply plug the plastic wine stopper into the bottle to form an airtight seal, and then place the pump on top and give it a few pushes to take out the residual oxygen in the bottle. Kept in the refrigerator, wines can last for around three days. Heavier-bodied wines with more alcohol will last longer than light-bodied wines with less alcohol. Inert gas. Inert gases are nonreactive gases, which won’t cause oxidation. Nitrogen and argon gas are popular choices for wine preservation. Simply spray the gas (about US$15 for a box of four cannisters) into your opened bottle, and because it weighs more than oxygen, the gas will sink and blanket the surface of your wine.

Then pop back your cork. Inert gases can extend the life of opened bottles up to roughly five days, depending on the type of wine. Wine machines. Heavy-duty professional machines can preserve open bottles for up to a year. They have airtight seals (similar to the vacuum pump and stopper), and also use inert gas to displace the wines immediately, minimizing exposure to oxygen. But with price tags in the hundreds of dollars, you’ll most likely only find them in wine bars where multiple bottles are offered “on tap.” One caveat: The best alternative, ultimately, is to leave no bottle unfinished. —Amy Ma

W6

THE WALL STREET JOURNAL.

Friday - Sunday, March 4 - 6, 2011

FASHION

The higher the heel, the harder the fall If you haven’t toppled off your shoes before, this spring should provide you with ample opportunity [Style] I don’t wear heels, which renders me anathema in the fashion business. I know, of course, why most women love a seven-inch heel (about 18 centimeters high) and a pointy toe—the lengthening of the leg, the slimming of the silhouette, the Darwinistic “pertening” of the bottom and the semisexual arching of the back... But then again, spending hundreds of hours, as I have, watching women in our business scuttling (or, should I say, staggering) from show to show, party to party, meeting to meeting, hobbled by their towering, pinching, overpriced, underworn footwear makes my blood run cold. I’d love to say that the high heel was a male contrivance created to constrict and oppress womankind; in fact, for quite some time, heels were worn by both sexes—notably Egyptian butchers, the Romans and today, still, the Japanese, in the form of Geta flip flops, and Hollywood’s (short) leading men, in the form of “lifts.” I’m discounting those infamous “beheeled” nomadic horsemen here because their high heels were simply a method of keeping their feet in the stirrups. I am, however, all for blaming that peacock Louis XIV for at least some of the fuss. The Louis heel, still popular today, was first created for him in the 1660s. It seems silly to hold a grudge, especially since most of us females have embraced “the heel” with a passion normally reserved for our own children and early blooming love affairs. There’s a belief, promulgated, I think, by shoe designers, marketers and fictional characters like the dreadful Carrie Bradshaw from “Sex and the City,” that wearing a great pair of shoes is better than sex. Which begs the question about the quality of the sex in the first place. I understand that a great shoe can make a foot look incredibly seductive (and for “great shoes,” see and spend only on the master—Manolo Blahnik), but unless one is chauffeured everywhere (see New York and L.A.), then I fail to see the point of something that slows one down, makes cobbles, grass and church aisles a liability, and is treacherous for one’s back. If you think that all of this ranting makes me sound like a grumpy, disenchanted fortysomething, you’d be right. But bear in mind that I can run for a bus, cross a busy road and sprint from a sudden downpour with aplomb. So extraordinary, though, was and is my nonheel policy in the business world that I inhabit that a recent stint in New York (and subsequent attendance of New York fashion week in Manolo Blahnik flip-flops, not open-toed heels), drew criticism from the gossip press. The subtext? I couldn’t be a “real” editor in chief if I wasn’t attired in the prerequisite spiky, vertiginous stilettos.

Left page, clockwise from top left, Sergio Rossi; Jimmy Choo; YSL; Heathcliff O’Malley/Rex Features; 2010 Fashion for Relief

BY TINA GAUDOIN

From left, top row, Sergio Rossi pump; Jimmy Choo ‘Lily’ sandals; Yves Saint Laurent leather ‘Tribute’ heel. Above left, model Agyness Deyn takes her heels off after stumbling at Naomi Campbell’s Fashion for Relief Haiti NYC 2010 show; model Shu Pei Qin walks barefoot at Burberry Prorsum’s spring/summer 2011 show where Nina Porter took a tumble. Certainly in the world of the runway, the ability to walk like a gazelle in ridiculously high heels is all. I can’t count the times I have sat on the side of a runway and winced as a leggy 16-year-old stumbled or tripped in her unviable footwear. I was there too when Naomi fell in her infamous blue Westwood heels, when Nina Porter ripped off her shoes in frustration after falling during Burberry’s spring/summer 2011 show and glided down the catwalk barefoot to a ripple of applause; I also witnessed the topple of social fashionista Daphne Guinness from her McQueen platform “stacks” at his memorial service. There are, readers, few more undignified moments for a female than falling off her own shoes. If you haven’t toppled off your shoes before, then this spring/

summer should provide you with ample opportunity. I have never seen more ridiculous heel/wedge heights than exist out there right now. I’d love to say it’s a sinister conspiracy, but I’m not sure whom to blame. Rather, it looks to me like a preposterous, lemming-like dash by the industry to compete for the highest, most dangerous piece of footwear on the planet. I’m resisting the impulse to quote a back surgeon or even a podiatrist here, because one doesn’t need a medical qualification to figure out that heel heights that stray into the realms of nine inches are quite simply bad for you. There is an argument, of course, to be made for the trend toward the hidden platform, which is built inside the shoe and lessens the actual drop of the shank (the ski slope between the heel and the

sole). Personally, I don’t think this makes a whole lot of difference, though a canny sales assistant, like the one I encountered in Gucci recently, will tell you different. If you are going to trip or fall, then a half-inch platform won’t make the difference. Should you, readers, in spite of, or perhaps because of, my diatribe, wish to buy yourself a pair of silly shoes this season, here’s my take on the very best in stilettos, platforms and wedges with the proviso that I haven’t road-tested them myself—for the obvious reasons. You just have to accept that should you choose wedges this season, you will look as though you are wearing bricks on your feet, so wide is the breadth from back to front on this season’s hottest shoes. On the plus side, these shapes flatter the rest of the body

(legs appear thinner and the whole body longer) and they allow maximum femininity on the clothing front. In fact, the only rule about these wedges is that they don’t go with an uptight business suit, or, for that matter, a sheath dress. Fendi’s cork wedges with turquoise, pink and aqua ribbon detailing are the best examples of the extreme wedge trend, along with Dior’s “Eden” python and hessian wedges and Balenciaga’s “Mamoulian” hessian and leather gladiators in navy and taupe. Givenchy’s “Bela” sandals in black could almost be children’s leather school sandals, save for the enormous wedge they have been created on top of (eight inches is my tape-measure-free guesstimate), whilst Céline’s huge, clompy “Oliver” wedge would take some serious confidence (or a good tan and super-skinny legs) to carry off. On the silly stiletto and platform shoe front, Jimmy Choo was amongst the first notoriously dizzy-making stilettos, thanks to Carrie Bradshaw, who namechecked the brand in “Sex and the City” so many times that it’s surprising Tamara Mellon, Choo’s CEO, didn’t name her first-born after her. Their black “Lavish” open stiletto with neon webbing and ankle strap are very Carrie. Nicholas Kirwood’s black platform “Swansons” complete with webbing, also have a very downtown New York vibe to them, though you’d have to be assured of getting taxis or being carried everywhere in order to survive the evening with all limbs intact. YSL is the last word in nosebleed shoes and this season is no exception. Their bright-red, open-toed platform sandals have an extraordinary “look at me” pebble dash/ diamante effect on the platform, whilst Gucci, as you might expect, has created the ultimate in disco glamour with its extraordinary rhinestone, champagne-satin, open-toed platforms. I argued with the store assistant about the size of the heel and the results were inconclusive (a surprise to find a man arguing that seven inches is not “that big”). You can trust in Chanel for many things; the first being chic restraint. Sure, the open-toed platforms I’m going to recommend are yellow with a silver front, but in the scheme of everything else that’s out there, these are positively Grace Kellyesque. Sergio Rossi, on the other hand, has managed to create a dazzlingly dangerous-looking pair of nude platforms, with a towering heel but also with a front cutout that has a Mr. Tumnus cloven effect on one’s feet. But readers, why play it safe with a seven- or eight-inch heel when you could go the whole hog and stretch to 11 inches with Prada’s “Papaya” platforms? With a polished heel and a hessian platform, these shoes are a structural work of art. (Think suspension bridges or stomach-churning funfair rides). I can’t be sure of Ms. Prada’s motivation (and, like a good actor, she always has one), but the color itself makes them worth the money. Plus, the view from up there must be breathtaking.

Friday - Sunday, March 4 - 6, 2011

W7

THE WALL STREET JOURNAL.

FASHION

What you don’t know about Jason Wu The designer of delicate confections reveals his new accessories collection and his inner homemaker [ 20 Odd Questions ] Since launching his namesake label in 2006, American sportswear designer and maestro of the cocktail dress Jason Wu has earned a devout following among Hollywood ingénues and society gals. In 2008, the Taiwan native, who apprenticed under Narciso Rodriguez, shot to sartorial stardom when he beat out established designers like Oscar de la Renta in the race to outfit Michelle Obama for the inauguration. (That legendary white chiffon confection is on permanent exhibit at the Smithsonian.) Now a household name, the Parsons alum continues to forgo fleeting trends for timeless, elegant ensembles in his growing empire of ready to wear, bridal and accessories. Recently, the 28-year-old unveiled his first collection of handbags and shoes all hand-crafted in Italy. As he prepped for his autumn runway show, we visited the couturier’s 836-square-meter Garment District studio where he talked about his inspirations, favorite spring looks and fondness for turbans. Besides Ms. Obama, my favorite first lady would be Nancy Reagan. She wore James Galanos. So chic! I admire any woman who isn’t afraid to wear a great dress and still be in a powerful position. The best color for all skin tones is fuchsia. It’s great for darker skin and light skin. There is a particular shade of magenta that has a little purple in it that I find myself going back to every season. In my office, it’s all about mixing the old and the new. I worked with interior designer Jesse Carrier to merge raw, industrial elements of the space with found items like 19th-century doors from upstate New York and Charme chairs from DDC. My home is a little bit more modern. I like colorful furniture. The secret to good health is green tea. I quit coffee. Three months and counting! Now I love the

Clockwise from left: WireImage; Courtesy Jason Wu (2); Getty Images; Everett Collection; Botanica/Getty Images

BY JASON WU

Clockwise from left: Jason Wu; Ms. Wu handbag from the designer’s spring collection; Dovima shoe; Argo green tea; style inspiration Anna Karina; a peony, Mr. Wu’s favorite flower. strawberry-infused green tea from Argo. I drink it every day. If I wasn’t a designer, I’d be a pastry chef. It has a lot of the same qualities as design. You eat with your eyes first, and when I make dishes, presentation is just as important as taste. The best restaurants in New York are Taisho in the East Village for yakitori and Momofuku Milk Bar. The compost cookie is my favorite thing to get. It’s made with potato chips and pretzels. It’s everything you’d want in one cookie. My favorite shop is Ochre, a contemporary furniture and lighting shop in SoHo. My favorite piece

of furniture is the chandelier in my office and it’s from there. I also love John Derian in the East Village. I give his decoupage as gifts all the time. If I could own one piece of art it would be an original by fashion illustrator René Gruau. I’ve been obsessed with his work since I was in my teens. He used a lot of bold colors and shapes and the women he drew had such sensuality. There is always a little bit of him in my collections. I’ve never been trend focused but I think turbans are a great new way to accessorize the head. They’ve been dormant, but they’re making a strong comeback for spring. I

I love fresh flowers. They’re one of my favorite things, especially peonies and white roses. I also love the scent of pomegranates.

also love high-waisted trousers, which were predominant in the ’40s and ’70s. When I go home to Taiwan, I love visiting the little street food vendors for dumplings.

One bad habit is my sweet tooth. My friend [stylist] Kate Young got me a subscription to MilkMade, which is a local ice cream delivery service. You can choose a flavor every month. I’m getting Kahlua with coffee and chocolate chips now.

I never forget to pack my sketchbook. I’m always doodling. The owl icon, which is on all of my bags and shoes, came from me drawing a little face in the “O” of my logo. It gives it a little quirkiness and humor, which I think is always needed in fashion.

My secret skill is cooking. I make a good macaroni and cheese with truffles and I bake berry pies. I’m a not-so-secret homemaker.

A true style icon is Anna Karina. She was the sexier, lesser-known gamine of Godard’s films, but she was so chic with her heavy fringe.

—Edited from an interview by Nicole Berrie

THE ANSWER | By Jason Chow

Meet gingham, the season’s new plaid As fashion continues to mine American classics of half a century ago, gingham has become popular again, popping up everywhere from Club Monaco to Ralph Lauren. Given the preoccupation with all things plaid in past months, it was only a matter of time before the colorful checked pattern—a lighter, more spring-like cousin to the wintry tartan—had its time to shine. We all think of gingham as the checkered pattern of picnic

tablecloths, and it is exactly that: a cloth made of yarn-dyed cotton woven into a pattern. But while the pattern is typically small checks, sometimes it’s a plaid—and originally it was stripes. Gingham’s fabric—cotton—and its weave make it light, which is why the material has been popular for warmer months and hotter climes. It’s also easy to clean, making it a practical choice for household linens such as tablecloths, kitchen towels, aprons and the like. And it’s a popular fabric for pajamas. The rush on gingham was foreshadowed last summer when the pattern graced the runway shows for many brands, from Dolce & Gabbana to Zegna and everything in between.

In Asia, Mr. Bathing Ape, the more office-friendly line of Japanese streetwear brand Bathing Ape, has a dapper gingham jacket in its current lineup. And Saadi Gadhafi, the former footballer son of the Libyan dictator, showed sartorial cool in the heat of his country’s upheaval, sitting for an interview with Christiane Armanpour sporting a blue-and-white gingham blazer. Back to your wardrobe: The gingham shirt is a summer classic, so it pairs naturally with shorts or light chinos, and even with a fedora, while you’re holding a mint julep or a cold beer. But the gingham shirt can also be prepped for the office. Choose a shirt

that is made of a blend of cotton and synthetic fibers, or at least a sturdier cotton so it won’t wrinkle easily. And stick to the darker colors—a traditional check of navy blue and white will always work. And finally, pair it with a tie in a solid dark color such as charcoal gray or blue. Tried and true, this pairing will never go wrong. The more daring might try gingham with gingham: J.Crew and Paul Smith, to name two labels, have slick modern versions of slim gingham ties. Overkill? Not if you match appropriately: These ties will pair better with light-colored shirts, so a pink gingham tie on a baby-blue gingham shirt will work; on a brown gingham shirt, not so well.

Getty Images

Gingham is everywhere these days, but why now? And can it look appropriate at anything other than a weekend garden party? Can you dress it up for the office?

Actor Ryan McPartlin wears checks.

W8

THE WALL STREET JOURNAL.

Friday - Sunday, March 4 - 6, 2011


 
    

     

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Friday - Sunday, March 4 - 6, 2011

SPORTS

Lessons from Keith Richards Mastering guitar is a lot like mastering the game of golf

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One of the chief liabilities of being a golf obsessive is that you find a connection to the game in almost everything you do, see or read. Take Keith Richards’s autobiography, “Life,” for example. It’s a juicy tell-all about sex, drugs and rock ’n’ roll, especially dishy about his complicated relationship with fellow Rolling Stone Mick Jagger. But for me the most satisfying portions of the book dealt with Richards’s pains to learn and master the guitar. Why? Because it read so much like the journey that master golfers make. Drug-addled reprobate that he admits to being, Richards makes a forceful case that would-be guitarists need to devote themselves first to the good old-fashioned fundamentals of the acoustic guitar. “Don’t think you’re going to be Townshend or Hendrix just because you can go wee wee wah wah, and all the electronic tricks of the trade,” he wrote. He devoted years of surprisingly diligent effort to figuring out how the great blues masters played the key chords they did, then years to finding his own sound. The parallels to the stories Ben Hogan and Lee Trevino tell about finding their own swings is striking. But what impressed me most was how Richards, once he owned the guitar technically, felt free to give himself over to instinct. In the end, he wrote, “There is no ‘properly.’ There’s just how you feel about it. Feel your way around it.” The key to developing some of his most famous, later-career riffs, in songs like “Jumpin’ Jack Flash” and “Gimme Shelter,” was realizing that “there is often one note doing something that makes the whole thing work.” I thought of all this last weekend while watching Fred Couples, at 51, contend deep into the final round at the Northern Trust Open. The guy cannot practice much anymore because of his balky back, and all week couldn’t hit certain shots with confidence and authority because of the pain. Yet he “got the ball around,” as he put it modestly after his brilliant secondround 66, and wound up fading from contention only on the final nine. He finished tied for seventh. “When I’m healthy and everything is right,” he told me earlier, “I feel like I play better now than I did when I was 30.” Couples claimed not to know why that was so, or even how it was possible. But when I mentioned what I’d picked up about mastery from reading Richards’s book, he shared some his own experiences. Couples seems to have reached a similar place of playing almost entirely instinctual golf. In his last few years on the regular Tour, he said, he probably hadn’t been paying as much attention as he could have. “I never want to second-guess, but when you’re 45, you tell yourself you’re older, the younger guys are better,”

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Fred Couples says when he doesn’t think too much, ‘everything gets very simple.’ Keith Richards says in his autobiography ‘Life’: ‘Feel your way around it.’ he said. “Sometimes someone would ask, ‘What keeps you playing golf?’ and I’d answer, ‘Well, to win.’ But really that’s just a comment, because you don’t want to go blank, you know what I mean? If nobody had ever asked me, I would never have had an answer, except just that playing golf is what I do.” When he got to the Champions Tour last January, however, his intensity ramped up. He finished second in his first event, then won three in a row, even though he hadn’t won on the PGA Tour since the 2003 Shell Houston Open.

‘There is no “properly.” There’s just how you feel about it. Feel your way around it,’ Richards writes “I enjoyed the heavy competition of actually having a shot at winning with nine holes to play. When you’re in the heat of competition like that, you just play, you just do what it takes, and everything gets very simple,” he said. The main difference, he said, was his “unbelievable” putting. “On the regular Tour, tee to green, I could still get it done, probably better than I used to,” he said. But the 4- and 5-foot comeback putts were killing him. “On the regular Tour, you know you have to make those. It’s a dumb way of thinking, but that’s the way it was. And once you start

thinking that way, you’re behind the eight ball,” he said. Part of the pressure was knowing, from experience, exactly what kind of scores he needed if he wanted to contend. At Riviera, site of the Northern Trust Open, he knew that it usually takes 12 or 14 under par to win. “So if I shoot 70 [one under] in the first round, I know I’m in trouble,” he said. (Aaron Baddeley won last week with 12 under.) On the Champions Tour, by contrast, he didn’t know what scores he needed to post. “So I just went out and played golf. I was knocking putts in like they were nothing,” he said. By year’s end, he was the Tour’s statistical putting leader. The exhilaration with winning carried over to his few tournaments on the regular Tour. He finished sixth at the Masters last spring. I did a word count of the transcript of our conversation in December, and Couples used the word “simple” 14 times in 25 minutes. For him, and for Richards, simple works wonders. But just as Jagger approached his work with the Stones differently than Richards, aging golfers have their own styles: Bernhard Langer, with five victories, beat out Couples as Player of the Year. ‘“There’s nothing at all simple about golf,” Langer told me this week. “I’m still striving to get better by working on all the different aspects of my game on a daily basis.”

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FILM

‘Of Gods’: divine beauty, terror, faith As monks, fine cast illuminates a tragedy; admirable ‘Never Let Me Go’ offers little hope [ Review ] ‘Of Gods and Men,” in French and Arabic, is one of the most beautiful movies I know, even though its subject matter and otherwordly pace set it apart from mainstream entertainment. They set it so far apart that the film made me recall, of all things, the most beautiful rendition I know of “I Got Rhythm.” In an old recording by the MitchellRuff Duo, the upbeat Gershwin classic is played as a ballad, slowly and meditatively. It’s exasperating at first—you want the jazzmen to get on with it, to lift your spirits by breaking into a familiar tempo. But then, spellbound, you start hearing the single notes, the chord progressions and the lovely melody as never before. The same sort of spell is woven by this story, loosely based on real events, of eight Christian monks menaced by Islamic terrorists in the Algeria of the 1990s. The narrative takes its rhythm from the brothers’ unhurried lives. In doing so, it finds new meaning in their rituals, and lifts your spirits with their fervent questioning of faith in the face of remorseless brutality. The director was Xavier Beauvois; he wrote the screenplay with Etienne Comar. The cast is headed by Lambert Wilson and Michael Lonsdale, two French stars who are well known to American audiences—the former for his villainy as the Merovingian in the “Matrix” series, the latter for his perspicacity as the police inspector in “The Day of the Jackal,” as well as for scores of distinctive roles in such films as “Munich,” “Ronin” and “Moonraker.” These are worldly actors playing men at home in two worlds—their Cistercian-Trappist monastery, which, with its working farm, stands on rocky soil in the Atlas mountains; and the tranquil

Sony Pictures Classics

BY JOE MORGENSTERN

Jacques Herlin and Michael Lonsdale in ‘Of Gods and Men,’ a story about eight Christian monks in 1990s Algeria. Muslim village they serve. Mr. Wilson’s Father Christian, the monastery’s prior, studies the Quran along with the Bible. Mr. Lonsdale’s aged and asthmatic Father Luc, the village’s only physician, not only ministers to the sick but dispenses sage advice to a local girl who wants to know about love. (“It’s lots of things,” he says, “but you’re in turmoil, great turmoil, especially when it’s the first time.”) Mr. Beauvois structures his film, like a liturgy, around music—the monks’ chants, whose beauty is allowed to sing for itself; no fancy reverb effects, no ethereal voices. When the brothers aren’t chanting they are farming, exchanging ideas or attending the prior’s teachings, and when they aren’t doing any of that, Christian or Luc may be out in the town mingling with their Muslim friends. Until, that is, bloodthirsty fanatics sweep into the region and local authorities urge the monks to return to France for their own safety. Then the issue becomes one of survival versus faith, and the questions deepen as the danger grows. At what point may the shepherd leave the flock? Of what avail is unsung martyrdom?

These are not rhetorical questions for the frightened monks; they must make fateful decisions. The decision-making process, in which paternalism gradually gives way to democracy, provides part of the film’s appeal. Each of the eight men has his own reasons for staying or going, and each case is stirring, since the acting is uniformly superb. This is, among other things, a drama of ideas. For Father Christian, Muslims and Christians are inextricably bound by spiritual brotherhood. If that seems impossibly utopian at the moment, it helps explain the film’s big win at last year’s Cannes Film Festival, and its subsequent popularity in Europe. We want to believe that such comity remains possible, and there’s no arguing against the film in rational terms, since its position, like that of Father Christian, amounts to an expression of faith. More than anything, “Of Gods and Men” is a drama of character, and warm humanity. The terrorists are brutes, but recognizably human brutes. Father Christian is admirable, but not always accessible. Father Amédée has little to say—he may lack the clarity to say it—but his wide eyes and

wizened face bespeak a lifetime of devotion. The most vivid character is Father Luc, and not only because Mr. Lonsdale is one of the great actors of our time. Luc personifies love. He loved women, he tells the village girl, until he found a greater love and responded to it. That response resonates, without a sound, in an exquisite moment that finds the weary old man touching—almost snuggling with—the figure of an anguished Christ on a monastery wall.

‘Never Let Me Go’ For its delicate tone, provocative themes, impeccable craftsmanship and superb performances—by Carey Mulligan, Andrew Garfield and Keira Knightley—“Never Let Me Go” earned my great admiration. I wish I’d been affected in equal measure, but I wasn’t, and it’s not the sort of film you can will yourself to enjoy, even though you know that many others will be moved by its tale of romance, class oppression and harsh destiny. This adaptation of Kazuo Ishiguro’s novel was directed by Mark Romanek from a screenplay by Alex Garland. The book was an ex-

ceedingly slow reveal. Ever so gradually did it let the reader know that a key setting, an English boarding school called Hailsham in the 1970s, was part of an alternate sci-fi universe not unrelated to such classic dystopias as “Soylent Green.” Ever so gradually did the school’s ostensible students discover that they were carefully nurtured clones who would die after donating their organs to long-lived residents of an England they were barely aware of. I’m revealing these plot points here only because, in recent interviews, both the director and the novelist have approved of doing so. As they see it, the potential for surprise has dwindled to nil since the book was published five years ago, while a knowledge of the premise will enhance our appreciation of the characters’ plight, and deepen our involvement in the intertwined subjects—what it means to be human, and what inhumanities may be committed in the name of science. They’re right on both counts. It’s fascinating—or haunting, if your mind can defer to your heart—to watch the trio at the center of the story work their way through love, betrayal and reconciliation to a poignant peace with their fate. Ms. Mulligan’s performance, in particular, is a quiet triumph, thanks to the dissonance between her character’s dire circumstances and her gift for expressing wordless expectancy. Charlotte Rampling is chillingly effective as Hailsham’s stern headmistress, and Sally Hawkins distinguishes herself in the small but pivotal role of a teacher who teaches kids the truth. If only the film had offered some relief from all that poignancy and resignation. Not comedy, certainly, nor even rebelliousness, since that’s ruled out by fidelity to the literary source, but brighter sparks of life than the emotional spectrum contained. “Never Let Me Go” hardly allowed me a scintilla of hope. ‘Never Let Me Go’ opens in theaters in Hong Kong, Singapore and Japan this month.

Preparing for the Asian Film Awards [ Talking Movies ] BY DEAN NAPOLITANO The movie awards season continues this month with the fifth annual Asian Film Awards scheduled for March 21 in Hong Kong. Twenty-nine films from across Asia are competing in 14 categories. Leading this year’s nominations—with six each, including best film—are the Chinese adventure comedy “Let the Bullets Fly” and the Japanese thriller “Confessions.” Launched in 2007 and

organized by the Hong Kong International Film Festival Society, the AFA aims to lift the profile of the region’s filmmakers and “play an important role in promoting the development of the Asian film industry,” according to AFA Director Yuet-fung Ho. The winners are selected by a panel of 13 jurors from the film industry in Asia and Europe. This year’s jury president is Hong Kong-based director Yonfan, whose films include “Bugis Street” (1995) and “Prince of Tears” (2009). A new digitally restored version of his 1988 film, “Last Romance,” starring Maggie Cheung, will screen during the film festival. Yonfan spoke with The Wall Street Journal.

How do the Asian Film Awards stand apart from other high-profile movie awards? The AFA is a very unique event. It honors all of Asia’s filmmakers—it’s essential for the industry to bring them together. It’s a place where people can exchange discussions about their cultures. But AFA is young and it still has a long way to go. You have said that Asian films are the most interesting. Please elaborate. In India you have Bollywood— full of color, energy and music. And Japanese films are known for their aesthetic—they have their own way of dealing with a film’s tempo and the color is more

mellow. Koreans really concentrate on high drama—they are either very violent or very subdued. Hong Kong has its kung fu, action and comedy films, while filmmakers in Taiwan find the flavor of their own culture. China is a very big market, and they are making films that show what the audiences want. Independent productions in Thailand, the Philippines, Malaysia and Indonesia all have their own characteristics—there is an outcry for films in those countries. Is there any concern that AFAnominated films are focused more on East Asia versus West Asia? I think we have to give west-

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Jury president Yonfan on why Asian films are more interesting

Hong Kong-based director Yonfan ern Asian countries a chance. Many of the countries—Iran and Turkey—make a lot of films that are quite popular in the West. What’s good about AFA is that they nominate some of these films, such as best cinematography for “The Light Thief” from Kyrgyzstan, and audiences know what’s going on in those countries.

Friday - Sunday, March 4 - 6, 2011

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BOOKS

An Engine of Perpetual Revolution The Philosophical Breakfast Club: Four Remarkable Friends Who Transformed Science and Changed the World By Laura J. Snyder Broadway Books, 439 pages, $27 BY ALAN HIRSHFELD We often think of scientists as working in lonely isolation, hunched over a lamp-lit desk in tedious computation or shivering in the frigid gloom of the observatory. Isaac Newton had clear hermit-like tendencies. Michael Faraday shut himself up daily in his basement laboratory, with orders not to be disturbed. Dr. Frankenstein, in Mary Shelley’s novel, didn’t even have an Igor to share in his inhuman achievement. Yet scientists are a gregarious lot, both by nature and of necessity—what makes the scientific process self-correcting is communication and collaboration. The group is more effective than the individual at sussing out weak hypotheses, flawed experiments or biased observations, and one of the vital contributions of Europe’s “natural philosophers” during the Enlightenment was the creation of societies to disseminate and evaluate their ideas. Such conclaves served as intellectual hubs before the rise of modern research universities and institutes, and remain important today. Among the first was Rome’s Accademia dei Lincei, formed around 1600, briefly disbanded following accusations of poisoning and incanta-

tions but reassembled in 1609 with a membership roster that included Galileo. Similar societies followed in England, France and Germany. Prompted in part by the writings of the English empiricist philosopher Francis Bacon, a pivot in methodology was taking place in the early 17th century. Where previously the pursuit of truth had been conducted through pure deduction—speculating why a stone falls to earth—it was now permissible to roughen one’s hands in the mechanics of experiment, measuring precisely how the stone falls. Edward Dolnick, former chief science writer at the Boston Globe, has turned his eye to this critical period in “The Clockwork Universe.” From the opening chapter, Mr. Dolnick plunges the reader down a rabbit hole into the filth, tumult and poverty of Restoration London, a place “so disease-ridden that deaths outnumbered births.” Out of this social muck emerged a group of intellectual explorers confident that nature’s seeming disorder was, in fact, harmony misunderstood. In 1660, a group of Baconian advocates—including the chemist Robert Boyle, the pioneer of the microscope Robert Hooke and the architect Christopher Wren—formed a society for the advancement of knowledge through observation and experiment. Granted a charter two years later by Charles II, London’s Royal Society is the world’s longestrunning scientific academy. Its motto, Nullius in Verba—roughly, “accept nobody’s word”—declares its faith in verifiable facts. Yet so hazy was the 17th-century divide between science and pseudo-science that the weekly meetings were as likely to examine the curative properties of powdered “unicorn” horn and “death sweat” from executed

Revolution took off in a cloud of steam. Joseph Priestley isolated oxygen and contributed to early studies of electricity. William Herschel discovered Uranus and, later, infrared light. Though both of these men were eventually admitted to the Royal Society, neither (one a Dissenter, the other an immigrant) was the sort of gentleman-researcher who had founded it. Meanwhile the society’s ranks were filled with wealthy patrons who lacked scientific credentials. Botanist Joseph Banks maintained the society’s autocratic governance and indulgently lax membership requirements during his four-decade presidency, which ended only with his death in 1820. But as early as 1812 thoughts of reformation, if not outright rebellion, had begun to brew in the minds of four energetic Cambridge University students: the mathematician Charles Babbage, who would create a programmable computer and serve as a lightning rod for discord within the scientific establishment; the astronomer John Herschel, son of William and himself a future pioneer of photography; William Whewell, a polymath who, in 1833, would coin the term “scientist”; and the political economist Richard Jones, a depressive bon vivant who applied Baconian methods to improve the lot of the poor. The foursome met for an afterchapel breakfast every Sunday to trade opinions about the state of science. As they saw it, their vaunted institution stifled creativity through its outmoded curriculum (there was no degree in the natural sciences) and its nationalistic pride (the analytic mathematics of Lagrange and Laplace was only grudgingly taught). Further, science

Alamy

The Clockwork Universe: Isaac Newton, the Royal Society, and the Birth of the Modern World By Edward Dolnick Harper, 378 pages, $27.99

MONUMENTAL Isaac Newton, president of the Royal Society from 1703 to 1727. prisoners as the makeup of Saturn’s rings or improvements in optical glassmaking. Mr. Dolnick presents this freefor-all of ideas as a character-rich, historical narrative while providing a detailed account of the period’s many advances, primarily Isaac Newton’s mathematical formulations of motion and gravity. Newton, who became the society’s president in the early 1700s, looms large in the story, especially in the latter half of the book, where he spars with the German mathematician Gottfried Leibniz over who deserves credit for discovering calculus. Though Newton biographies abound, Mr. Dolnick memorably renders a figure whose mind ranged the cosmos yet who never saw the ocean. If the 17th century saw the infancy of a new mode of scientific investigation, the 18th century witnessed the fruits of its exuberant youth. In England, the Industrial

was unfunded and unappreciated by the state, which remained blind to its potential societal benefits. By contrast, in France, science was viewed as an elite intellectual enterprise, supervised and supported by the state. (Of course, this centralized approach engendered its own set of problems.) Laura J. Snyder’s “The Philosophical Breakfast Club” describes how, over the next few decades, Babbage, Herschel, Whewell and Jones set out to modernize the way science in England was taught, organized and conducted—to elevate science from an avocation into a specialized profession. In Ms. Snyder’s telling, the lives and ideas of these men come across as fit for “Masterpiece Theater.” The friends corresponded constantly, shared in life’s joys and sorrows, even named their children after one another. Though they debated heatedly—about everything from social change to the question of (Herschel’s phrase) “the origin of species”—Herschel wrote that their “thousand delightful associations [kept them] from tearing each other’s eyes out.” Ms. Snyder clearly loves the give-and-take that good science requires. Still, she bats into a literary triple play with her complaint that today’s scientists have lost their sense of wonder about nature, cannot express that wonder to the public, and have all but abandoned the humanities. If Ms. Snyder doesn’t believe me, she should attend a meeting of a scientific society. That buzz she hears in the hallways? It’s the wonder she claims has been lost. —Mr. Hirshfeld, a professor at the University of Massachusetts Dartmouth, is the author of “Eureka Man: The Life and Legacy of Archimedes.”

I Am the Market: How to Smuggle Cocaine by the Ton, In Five Easy Lessons By Luca Rastello Faber and Faber, 178 pages, $22 BY BRUNO MADDOX Owing to a rather freewheeling prose style, and possibly also to the fact that it has been translated from Italian, there are passages in Luca Rastello’s otherwise very readable account of the international cocaine trade that just don’t make a whole lot of sense. One of them is its title: “I Am the Market.” After interviewing a slew of big-league drug-runners, Mr. Rastello, a reporter for Rome-based La Reppublica, has woven their stories together into the true-but-fictional memoir of a single, composite smuggler—though why such a figure would ever think of himself as “The Market,” Mr. Rastello never explains. So we may as well take it as our narrator’s name, because none other is provided. The Market begins by recounting what he calls “The Problem.” When he first entered the business in the early 1990s, Americans, all of a sudden, weren’t snorting as much cocaine as they had been, whereas Europeans—trailing trends by a decade, as is their adorable wont—suddenly couldn’t get enough of the stuff. The problem was how to get the product all the way across the Atlantic.

The big cartels had grown used to smuggling cocaine into El Norte by means of light aircraft, high-speed cigarette boats and transborder tunnels. But, since nobody fancied trying to dig a tunnel from Colombia to, say, Italy, smugglers had little choice but to sneak their product aboard container ships and cargo planes. At first that meant individually bribing every single harbor master, shipping agent and customs officer that might come into contact with a shipment on its journey around the world. This effort was enormously expensive, but that wasn’t the problem: Cocaine yields $1,000 in profit for every dollar invested, meaning overhead is easily absorbed. The problem was how to keep everybody quiet. All it took was a single pang of conscience along the chain of supply and someone might run squealing to the cops. One obvious solution was not only to bribe everyone up front but also to kill them once they’d served their purpose. The most arresting anecdote in “I Am the Market” involves an Italian smuggler named Bonazzi, who worked the relatively unchallenging route from Columbia to Venezuela in the early 1980s. Bonazzi’s practice was to have Colombian truck drivers cart his product over the border, whereupon he’d pay them, buy them dinner, take them to a whorehouse, and then gun them down by the dozen in an alligator swamp. After retrieving his

money from the corpses’ pockets, he would return to Venezuela for another run. Bonazzi’s “payment by lead” method worked smoothly for several years, apparently, until the population of Colombian truck drivers fell to near-extinction levels and suspicions were raised. The Market had a better idea, he tells us—well, actually what he tells us, in his histrionic style, is that he hit upon “the secret of all secrets . . . the masterstroke, the brainwave, the revolution.” Instead of bribing hundreds of merchant seamen to look the other way, The Market would bribe a single harbor master to issue a bogus set of transit papers for his shipment, ideally in the name of some reputable international corporation. Thus, the book implies, most of the people smuggling cocaine today don’t even know they’re doing it, especially if the cocaine has been disguised using one of the ingenious methods that The Market describes: dissolving powder in water and trapping it between panes of glass, for instance, or smearing it as paste over a consignment of fashionably crusty blue jeans. “I Am the Market” overflows with this kind of juicy tidbit. The notorious practice of having drug “mules” swallow ovules of cocaine wrapped in condoms, he explains, is usually a diversion technique: While customs officers are posing on the evening news with half a kilo of product seized from some poor soul’s intestines, the real shipment

Associated Press

Smuggler’s Tales

A DROP IN THE BUCKET A Colombian soldier guards bags of seized cocaine at the port of Buenaventura. of maybe half a ton passes through the airport unmolested. Drug-sniffing dogs, on the other hand, turn out to be every bit as good as advertised—which is why smugglers rent the best of them to check the smellproofing of their shipments before they ever leave the depot. Many of The Market’s revelations will lend ammunition to anyone who thinks that the War on Drugs is a boneheaded exercise in waste and futility. Indeed, there are enough of these fascinating and tantalizing tidbits in the book that one wishes Mr. Rastello had taken a more straightforward approach to his material and given us more of them. The Market is certainly an entertaining narrator, with his swagger and his prostitutes

and his fondness for starting paragraphs with: “Listen to this.” But what Mr. Rastello has to tell us is dramatic and incredible enough without forcing us to hear it from a shadowy, made-up figure who insists on talking as if he’s silhouetted against a Venetian blind in some sort of wide-brimmed hat, blue smoke from a Cohiba twirling up into a squeaky Casablanca fan. Then again, maybe that’s part of Mr. Rastello’s message. On top of whatever macro-level harm this insidious white powder may have done to the world, we should never lose sight of the human cost: It makes people really annoying to talk to. —Mr. Maddox, former editor of Spy magazine, lives in Wales.

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AUTOS

Hyundai’s bold stand in the compact race The new 40 mpg Elantra goes wheel-to-wheel, right to the tape, with the 2012 Ford Focus [ Rumble Seat ] Except for the fact that it’s not particularly fast, the Hyundai Elantra is a bullet, and that bullet just whistled past Ford’s head. Or maybe grazed its skull. Hyundai’s freshly redesigned compact sedan—handsome, roomy, richly detailed and stacked to the rafters with standard and optional amenities—would be the best car in its segment, but for the inconvenient existence of the 2012 Ford Focus. The Focus outpoints the splendid Elantra, but by a margin that makes Bush-Gore in Florida look like a landslide. Fear not, bolt-counters. I’ll get to the specifics soon. But for a moment, I’d like to talk about the longitudinal study that is my driveway. I drive about 100 new cars a year, every year. So in the process of scoring cars and car companies, it’s not just the machine itself that’s in play. It’s also the distance traveled between generations of cars, the degree of relative improvement. That’s where a car company’s pace, its momentum, its brand mojo can be felt. An aside: Perhaps you’ve seen words to this effect on a car magazine cover: “2012 Dimplerood Panther 5000: The Best Panther Ever!” This is the emptiest of praise, an exercise in car-magazine diplomacy. Unless the product planners are openly sabotaging the company, cars always get better over time. It’s in the nature of engineering to establish a baseline and make incremental improvements. And be especially wary of any car that gets the rhetorical-question treatment, as in, “The Best Panther Ever?” That’s one lousy Dimplerood. In my driveway, among massmarket competitors lately, Hyundai and Ford consistently reach farther between model iterations than other car makers. Ford’s new Focus and Explorer utterly nail their predecessors into the coffin of obsolescence. Hyundai’s Sonata makes the old car feel like it was built at somebody’s summer fat camp. These two companies have broken away from the mass-market peloton and they’re in a race all their own. One’s an incumbent; one’s an insurgent. One’s Detroitbased, the other anywhere-but-Detroit (the Elantra was designed in California and built in Alabama). Both companies embrace the radical idea that product counts. And with the Focus and the Elantra, it’s wheel-to-wheel, right to the tape. Specifics, then: The new Elantra is 2.54 centimeters longer (453 centimeters) than the previous model, over a wheelbase stretched by 5 centimeters (270 centimeters), and the car is about 5 centimeters lower and 82 kilograms lighter than before. The dieting helps the car reach the 40-mpg highway mark (roughly 6 liters per 100 kilometers), on the strength of a new 1.8-liter, 148horsepower four-cylinder engine

Dan Neil/Wall Street Journal (top); Ford

BY DAN NEIL

(with variable induction, dual-cam variable valve timing, and all-aluminum construction). Forty miles per gallon has become a kind of magical number in this segment. The Cruze, the Focus and the yetto-be-released 2012 Honda Civic all have low-volume, high-mileage variants that will hit 40 mpg—the better to advertise with. Typically, though, the Focus gets 38 mpg. And Hyundai is sandbagging a bit: Unlike its competitors, the new Elantra doesn’t have a directinjection cylinder head, which typically improves fuel efficiency 5% to 10%. Should the car get a DI engine, as is likely, look for a bump in overall mpg. Penciled out, the 160-hp Ford has almost exactly the same power-to-weight ratio as the Elantra (depending on the models compared), and in a drag race these two ladies probably are within a few tenths of each other. They both hit 100 kph around the 9-second mark. Call it a tie. Chuck the pencil out the window and the Focus, with its dualclutch six-speed automatic, feels appreciably more spirited and willing, especially when its tranny is slotted into Sport mode. So, advantage Ford. Also, the Hyundai shares with its larger sibling Sonata a tendency to get a bit thrashy at certain parts of the tachometer. At low-engine speeds while the car is heading up slight grades, the Elantra engine chuffs and rocks in its cradle; and at moderate-tohighway speeds, if you kick it hard in the slats, the powertrain starts to whine with something approaching resentment. It’s a minor point and, in other ears, might be perceived as driving character. But the silky Focus and Elantra are so terribly close in so many categories, any daylight is revealing.

The 2012 Ford Focus, bottom, is a taut shape, especially its five-door form, but the Elantra, top, wins in the looks category.. One superlative the Elantra owns outright: It’s the better-looking car. Styled at Hyundai’s Southern California design studio, the car manages to wear Hyundai’s so-called fluidic styling without looking like it’s retaining water. Among the Elantra’s many grace notes are question-mark-shaped reflectors in the oversized headlamp assemblies. Like BMW’s glowing irises, these give the Elantra a distinctive set of eyes at a distance, especially at night. The Focus is a taut shape, too, especially in five-door form. But the Elantra absolutely owns the compact-sedan swimsuit competition. No small feat. Where’d that pencil go? You’ll need it to tabulate the Elantra’s value equation, which is stout, for sure. First, let’s dispense with the chicanery of the base model (US$14,830 in the U.S.), which doesn’t include the $2,500 automatic-transmission option. A reasonably equipped Elantra GLS (with Bluetooth, alloy wheels and

some other must-haves) is around $18,430. The more compelling deal is the Limited ($20,700), with automatic, heated leather front and rear seats, power sunroof, automatic headlamps and simply reams more gear. Our test car lacked only the Technology package ($2,000), which includes navigation, 360watt sound system, rear camera and automatic headlamps. Such a collection of amenities risks looking like a Best Buy showroom post-earthquake, but the Elantra interior is simply terrific, well organized, intuitive and perfectly distinctive. The materials and workmanship are first-rate. When you start putting it all together—the standard four-wheel disc brakes; the battery of smartbraking functions; the midsize roominess of the cabin; the netextra features for this class such as outside-mirror turn indicators—the Elantra is, on paper, pretty much unbeatable for the money. The Focus might be slinking off to sulk in its dorm room.

But while the Elantra is certainly well sorted and competent, it doesn’t have quite the leg of the Focus. The Elantra’s steering feel is light and bereft of feedback. The car doesn’t have much enthusiasm for hard cornering, sort of hitching its pants on turn-in and leaving it to the tires to hold it on line. The Focus, on the other hand, loves to run. You could credit the Ford’s torque-vectoring front axle, which helps put down the power exiting corners, or its independent multilink rear suspension, which maintains contact with the road better than the Elantra’s rear beam axle. Typically, a $20-thousandsomething compact sedan is not what you’d call a reward for a life well lived, but shoppers in this segment should feel fortunate to have a choice between these two estimable machines. In my opinion, the Ford narrowly scores a win in the Electoral College. I wouldn’t be surprised if the Hyundai wins the popular vote.