The Wall Street Journal Asia, Wednesday, April 06, 2011

As of 12 p.m. ET

DJIA 12415.21 À 0.12% FTSE 100 6007.06 g 0.16%

Nikkei 225 9615.55 g 1.06%

Shanghai Comp. 2967.41 Closed Hang Seng 24150.58 Closed. Sensex 19686.82 g 0.08% S&P/ASX 200 4900.13 À 0.27%

VO L . X X X V N O. 1 5 2

(India facsimile Vol. 2 No. 213)

* *

Wednesday, April 6, 2011

ASIA

asia.WSJ.com

China steps up inflation fight BY AARON BACK AND JASON DEAN BEIJING—China raised interest rates for the fourth time in less than six months in a fresh attempt to battle faster inflation that has weighed on consumers and businesses in the world’s No. 2 economy. The People’s Bank of China said benchmark rates would increase on Wednesday by a quarter percentage point to 3.25% for one-year deposits in

the local currency, and 6.31% for one-year loans. The central bank has now raised the official cost of credit by one percentage point since October, but deposit rates remain well below the rate of inflation, and lending rates are only slightly above it. The central bank’s statement Tuesday said the increase would also apply to mortgage loans. That was also true with previous increases, but Tuesday was the first time in the series of recent

moves—in October, December, and February—that the central bank flagged the effect on mortgages, indicating at least part of its motivation is to contain rising property prices that have been a major source of public complaint. A rate increase was widely expected, though the timing of Tuesday’s news—on a national holiday when markets and most businesses were closed—was earlier than some expected. That prompted speculation that the con-

sumer-price index reading for March—scheduled to be announced next week—may be higher than Beijing had hoped. In both January and February, the CPI rose 4.9% from a year earlier, down slightly from November’s 5.1% but still running near 2½-year highs. “This rate hike suggests that the March CPI that is to be released early next week may have surprised to the upside,” said Morgan Stanley economist Wang Qing in a

note. “It also suggests that Chinese authorities are confident in the sustainability of underlying growth momentum.” China’s leaders are trying to manage a precarious balance between damping inflation—which, at much higher levels, has triggered social unrest in China in the past—and keeping its economy churning Please turn to page 18
Heard on the Street: Beijing’s holiday rate move................... 32

U.K. leader extends olive branch to Pakistan on whirlwind trip

Agence France-Presse/Getty Images

SK. MENPEN R.I. NO: 01/SK/MENPEN/SCJJ/1998 TGL. 4 SEPT 1998

Australia: A$6.00(Incl GST), Brunei: B$7.00, China: RMB25.00, Hong Kong: HK$18.00, India: Rs25.00, Indonesia: Rp18,000(Incl PPN), Japan: Yen500(Incl JCT), Korea: Won2,500,

MICA (P) NO. 164/10/2010

Malaysia: RM6.00, Pakistan: Rs140.00, Philippines: Peso80.00, Singapore: S$4.00(Incl GST), Sri Lanka: Slrs180(Incl VAT), Taiwan: NT$60.00, Thailand: Baht50.00, Vietnam: US$2.50

KKDN PP 9315/10/2011 (026992)

Nasdaq takes a bite out of Apple in index rebalancing Page 3

An honor guard greets British Prime Minister David Cameron, who arrived in Islamabad for a single-day visit Tuesday in an effort to restore ties with Pakistan. Page 8

Contaminated fish found off Japan’s coast

Japanese authorities said Tuesday they had discovered for the first time fish swimming off the country’s Pacific By Juro Osawa andYoree Koh in Tokyo and Daisuke Wakabayashi in Kesennuma

coast carrying high levels of radioactive materials. The finding, the latest blow from the nuclear crisis, is stoking concerns about environmental damage to local marine life, the safety of the nation’s food supply, and the viability of Ja-

pan’s iconic seafood industry, which was already struggling following the tsunami. The two separate samples of tiny fish were caught before Tokyo Electric Power Co., the operator of the crippled Fukushima Daiichi reactors, began the process Monday night of dumping 11,500 tons of contaminated water into the sea, raising fears that the problem could spread significantly in coming days. Tepco has said that, before the authorized unloading of water, there was an uncontrolled leak of an uncertain quantity of highly radioactive

Disaster in Japan
Ecosystems could take years to rebound................... 4
Japan Real Time: radio stations’ pivotal role............ 5
Insurers are slow to pay quake claims.......................... 19

water from the reactors into the sea. Efforts to end the release of more highly radioactive water at the Fukushima Daiichi plant finally met with some success Tuesday, Tepco said, as the injection of what

it called “liquid glass” gel around a damaged pipe managed to reduce the toxic flow by half. Workers poured 3,000 liters of gel-like sodium silicate onto the rocks supporting the pipe. Authorities said the substance would continue to harden over time and could continue to slow the flow of water. Workers have tried a variety of methods to reduce the flow since it was discovered Saturday. The water is thought to be from the highly damaged No. 2 reactor. A water sample taken just outside the water intake for the No. 2

OPINION: Another blow to protectionists in the U.S. Page 11

unit showed the level of radioactive iodine-131 at 7.5 million times the allowable limit, the most dangerous level of radiation so far detected. Separately, South Korea said Tuesday it would seek more information from Japan’s Foreign Ministry about the decision to allow Tepco to dump the 11,500 tons of lowlevel radioactive water into the ocean. The water is being discharged to free up storage space for much more toxic water. “We regret having caused concern to other countries bePlease turn to page 5

SGX bid for ASX is dealt a blow BY ENDA CURRAN AND SAM HOLMES Australia dealt Singapore Exchange Ltd. a major setback Tuesday in its proposed 8.4 billion Australian dollar (US$8.7 billion) takeover of stock market operator ASX Ltd., in a blow to Singapore’s growth ambitions and the strongest sign yet that the Asian-Pacific region will resist the consolidation going on in the U.S. and Europe. Australian Treasurer Wayne Swan said in a statement Tuesday that the country’s foreign-investment advisory watchdog has “serious concerns” about the proposed transaction and that he intended to follow its guidance that the offer isn’t “in the national interest.” The statement falls short of an outright rejection, and Mr. Swan noted that he hadn’t yet made a final decision. But the statement deepens the odds against the deal, because Mr. Swan’s Labor party holds a fragile grip on power and some of its allies have heavily criticized the deal. Singapore Exchange Chief Executive Magnus Bocker said he was “surprised” by the timing of the board’s notificaPlease turn to page 18
Heard on the Street: Doors need to stay open................... 32

Flawed miracle

India projects an image of a nation churning out students who are well educated, a looming threat to the middleclass workers of the West. But in reality, companies are having difficulty finding employees. Pages 14-15

2

THE WALL STREET JOURNAL.

* *

Wednesday, April 6, 2011

PAGE TWO

i

i

What’s News—

i

Inside

Business & Finance n Corporate deal making is roaring back on renewed confidence by company executives and private-equity firms—many in the developing nations of Asia. Texas Instruments agreed to buy National Semiconductor for $6.5 billion in cash, a move that would unite two venerable names in the chip business. 19, 22 n Nasdaq is rebalancing its Nasdaq-100 index to reduce the weighting given to Apple. The move, which takes effect on May 2, could mean significant selling pressure for Apple stock. 3

U.S. News: Republicans seek balanced budget by 2015. 6

n Russia hopes to attract as much as $90 billion in foreign cash with a government-backed fund aimed at private-equity investors now deterred by the country’s rough business climate. 25 n An AIG unit has paid 6% of the claims stemming from Japan’s earthquake and tsunami, illustrating the delays confronting claimants seeking payouts. 19

n Siemens’s contracts in Iran underscore how efforts to curb Tehran’s nuclear ambitions have limited impact on the state’s ability to draw on technology to maintain its broader infrastructure. 20 n Procter & Gamble is selling its Pringles brand to Diamond Foods under a $1.5 billion stock deal designed to minimize the tax bite. 21 n Delta plans to restart flights from the U.S. to Tokyo’s Haneda Airport in June, moving to head off an effort by United Continental to gain access to the routes. 21 n Satyam Computer agreed to pay $10 million and Pricewaterhouse affiliates, $6 million, to set-

Life & Style: Australia is the world’s hottest music venue. 10

Agence France-Presse/Getty Images

n Huawei is a finalist for a contract to build out the fourth-generation wireless network for U.S. Cellular. The Chinese company is under fire from some lawmakers as it tries to find new ways to expand into the U.S. market. 21

Two generals close to Ivory Coast’s strongman Laurent Gbagbo are negotiating his surrender, France’s Prime Minister Francois Fillon told French lawmakers, in a possible breakthrough for a months-long political impasse that has turned into a full-scale military conflict, Above, soldiers loyal to internationally recognized leader Alassane Ouattara rode Tuesday in an armed vehicle in Abidjan. tle U.S. regulatory accusations that the Indian outsourcing provider engaged in “a massive accounting fraud.” 20 n U.S. prosecutors are investigating whether smartphone applications illegally obtained or transmitted information about users without proper disclosures. 19 n Vedanta Resources will launch an open offer for shares in oil ex-

plorer Cairn India, moving a step closer to its goal of entering the Indian energy industry. 20

i

i

i

World-Wide n Tribesmen loyal to Yemen’s embattled president clashed with a group of soldiers whose commander has sided with the opposition, and fighting in a suburb of the capital San’a left three tribes-

men dead, according to tribal elders and military officials. n Col. Gadhafi’s forces pushed back in the oil town of Brega against rebels, who said they need more from NATO to win. 7 n Bangladesh’s Supreme Court ruled that Nobel laureate Muhammad Yunus must step down as head of microlender Grameen Bank. 6

Corporates News: Troubles over ending Internet Explorer 6. 22

ONLINE TODAY Most read in Asia

1. Worries Grow for Those Still by Power Plant 2. Japan Utility Dumps Radioactive Water 3. Few India Graduates Are Fit to Hire 4. Australia Rates on Hold as Currency Soars

Scene

Technology

blogs.wsj.com/indiarealtime

Which wealthy investor persuaded the chef to attach his name to a Hong Kong restaurant?

The cricket World Cup is over, but money and rewards for the winning Indian players have only just started to pour in.

Alejandro Sánchez’s involvement with Mesa 15 is minimal.

Most emailed in Asia 1. Few India Graduates ... 2. Fujitsu Chief Looks at Japan’s Crisis 3. How You Can Pull a GE on Taxes 4. Why Some People Need Little Sleep

India Real Time

blogs.wsj.com/scene

Get the low-down on start-ups, product news and strategic moves: blogs.wsj.com/digits

Heard on the Street: Tepco crisis could fuel utility deals. 32 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: 66-2 690 4222 to 7; 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

Wednesday, April 6, 2011

THE WALL STREET JOURNAL.

3

WORLD NEWS

Apple will be crunched in rare Nasdaq rebalance BY TOM LAURICELLA Nasdaq is taking a bite out of Apple. In a move likely to ripple across the stock market, Nasdaq OMX on Tuesday announced a rare rebalancing of its Nasdaq-100 index, which will reduce the weighting of Apple Inc. The company currently makes up more than 20% of the index. The rebalancing was driven in part by the seemingly unstoppable rise in Apple shares, which are up more than fourfold in the past two years. The tech company’s big weighting means that a change in fortune for the maker of iPhones, iPods and iPads has a huge impact on one of the most heavily traded indexes in the market. After the rebalancing, which takes effect before the market open on May 2, Apple will make up 12% of the Nasdaq-100. The Nasdaq-100 consists of the 100 largest nonfinancial stocks that trade on the Nasdaq and is the index tracked by the heavily traded QQQ exchange-traded fund and many other securities. The move matters to investors because more than $330 billion worth of assets track the index via exchange-traded funds, mutual funds, options and futures. The move could mean significant selling pressure on Apple shares by money managers tracking the index. Because of the way the index has been calculated, Apple was given more than twice the weight in the index than it should have had based on its number of shares. Under the new plan, it will be reduced to the weight it should have given its size. Apple’s market capitalization is roughly $300 billion, twice that of Google. But its weighting in the index was five times that of Google. After the rebalancing, Google’s share of the index will be 5.8%, compared to Apple’s 12.3%. Apple will remain the largest component of the index. In addition to Apple, 81 other stocks will see their share of the index reduced. The remaining 18 stocks will get a boost in the index. Among the biggest beneficiaries will be Microsoft Corp., whose weighting in the index was reduced in the only other special rebalancing of the index 13 years ago. Microsoft will see its weighting boosted to 8.3% from 3.4%. At midday in New York, Apple shares were down 63 cents, or 0.2%, at $340.59, while Microsoft was up 44 cents, or 1.7%, at $25.98. The rebalancing is likely to kick off waves of trading in the stock market as money managers scramble to adjust holdings to reflect the new composition of the index. There are more than 2,900 financial products tracking the Nasdaq-100 in 27 countries, Nasdaq says. That includes the $24.4 billion PowerShares QQQ exchange-traded fund, which over the past year has been the sixth most actively traded stock on U.S. exchanges. Nasdaq estimates that for every $1 billion directly tracking the index, such as through mutual funds or ETFs, 9.5 million shares will change hands. “It’s going to be a big trade,” says John Jacobs, executive vice president at Nasdaq. However, “we wanted to make this very transparent. Everyone will see what we’re doing and everyone will have a month before we do this.” The rebalancing is being driven

by more than just Apple, even if it is by far and away the stock that will see the biggest change. The reasons tie back to the complex inner workings of the index that determine each stock’s weighting. The reweighting is based on shares outstanding for the stocks in the index as of March 31, Nasdaq said. When the Nasdaq-100 was formed in 1985, it was comprised of the 100 biggest nonfinancial stocks

listed in the Nasdaq Composite index based on their share prices and number of shares outstanding. However, the index was retooled near the peak of the tech bubble in 1998 to make it possible for an exchange-traded fund to be launched based on the index. The rebalancing won’t affect the order of the stocks in the index or result in any stocks leaving or joining the index.

The new Nasdaq Weightings changes to the Nasdaq-100 index

Current weight

20.5%

1.8 3.4

3.3

4.2

All others

4.2 Projected 12.3% 5.8 weight

-8.2

8.3

+1.6

6.7

All others

+2.4

Change in percentage points

+4.9

+3.4

Source: Nasdaq OMX Group

NOTHING IS AS STRONG AS TEAM SPIRIT

R E TA I L B A N K I N G - C O R P O R AT E & I N V E S T M E N T B A N K I N G SPECIALISED FINANCIAL SERVICES & INSURANCE P R I VAT E B A N K I N G , G L O B A L I N V E S T M E N T M A N A G E M E N T & S E RV I C E S Societe Generale is a credit institution and investment services provider (entitled to perform banking activities and/or to provide investment services other than the operation of Multilateral Trading Facilities) authorised and regulated by the French Autorité de Contrôle Prudentiel (Prudential Control Authority) and Autorité des Marchés Financiers (Financial Markets Authority). Societe Generale is subject to limited regulation by the UK Financial Services Authority («FSA») for the conduct of its business in the United Kingdom. Details of the extent of its regulation by the FSA are available from us on request. Societe Generale benefits from the EC passport authorising the provision of certain banking and investment services within the EEA. This material has been prepared solely for information purposes and does not constitute an offer from Societe Generale to buy or sell any securities or financial instruments, or to participate in any trading strategies. Not all products and services offered by Societe Generale are available in all jurisdictions. Please contact your local office for any further information. © 2011 Societe Generale Group and its affiliates. © GettyImages -

4

THE WALL STREET JOURNAL.

Wednesday, April 6, 2011

DISASTER IN JAPAN

Eric Bellman

Last month’s tsunami affected close to 80% of the farmland in Japan’s northeastern coastal city of Yamamoto Town, above, which used to have hundreds of strawberry farms.

Environment is ravaged in northeast Residents confront damage to farms, other land from debris, toxins tsunami washed in; strawberry fields suffer BY ERIC BELLMAN YAMAMOTO TOWN, Japan—As much of Japan worries about nuclear radiation, residents along its northeastern coast are confronting a different environmental disaster: the wide-scale destruction and contamination of farms and other land from salt water, chemicals and other detritus and toxins washed in with last month’s tsunami. The March 11 earthquake and waves not only left more than 25,000 people dead or missing, and hundreds of thousands more homeless, but also spread debris and chemicals across hundreds of kilometers of the country’s best farmland, fishing areas and tourist zones. Government officials say they have only just started to survey the environmental damage, but early indications are that some ecosystems and the industries that depend on them could take years to rebound. More than 40% of the farmland of the costal city of Sendai, for instance, has been soaked with salt water, sludge, cars and garbage. The city is still trying to figure out how that potentially toxic cocktail has affected its many rice paddies and wheat fields, and whether they can be cleaned. “There is debris everywhere,” said Tomio Tsuchita, a manager at the agricultural promotion department of the city of Sendai. “Until we start to get rid of that garbage, we cannot even think about using the land again.” Fishing and farming are two of the biggest employers in this region, and authorities had high hopes for more tourism, given the area’s onceunspoiled natural assets. Dealing with the environmental damage represents yet another long-term challenge for Japan as it determines how to rebuild its hardest-hit communities, and could play a major factor in deciding which of those areas can be rebuilt at all.

The Japanese government said over the weekend that an initial survey, using satellite images and onthe-ground reports, showed that in Miyagi prefecture alone, more than 15,000 hectares of farmland have been covered in seawater and debris. That is around 11% of its total farmland. Earlier reports cited by the United Nations indicated as many as 24,000 hectares of agricultural land in several prefectures were damaged, with the equivalent of 53,000 football fields inundated. One expert, Kyoto University associate professor Nagahisa Hirayama, estimated there could be more than 14 million tons of waste left over in Miyagi prefecture. The prefecture has the capacity to dispose of only about 800,000 tons a year, according to data released by Japan’s Ministry of the Environment in 2008, the most recent statistics available. Rivers, groundwater sources and fishing areas are also at risk, as everything from factory barrels to hospital trash bins to high-school laboratory chemical sets were washed out to sea and other water sources. “As the tsunami washed houses, cars, and factories among other things out to the ocean, it’s highly possible that the ocean has been contaminated,” said Koichi Miyamoto, an oceans expert at the environment ministry. “We need to look into this.” Authorities faced similar problems in the aftermath of the 2004 Indian Ocean tsunami, which dumped salt on thousands of hectares of farmland, destroyed coral reefs at popular scuba-diving sites and left a film of gasoline and oil in mangrove forests along the coasts of Indonesia, Sri Lanka and elsewhere. Although relief groups were able to restore many of the damaged areas, after three years only about 25% of the aquaculture ponds in some of the worst-hit areas had been repaired, according to a report pub-

Water damage Coastal farmlands affected by the tsunami Total damaged farmland, estimate Area of detail

23,600

Aomori

Iwate

hectares

Miyagi

Sendai Fukushima

Affected cities

Fields

Yamamoto City

I baraki

Paddies

In Miyagi prefecture, estimate

15,002 hectares

Tokyo

Chiba

lished by the United Nations. Japan’s recovery will likely be helped by the fact that it has more money to invest in the cleanup. But it also has far more trash to clear—and fewer places to put it, given the lack of available space for landfills. “This will make it more difficult to handle in Japan,” says Muralee Thummarukudy, a program officer at the United Nations Environment Program. The task of sorting out environmental damage “is going to be really huge.” Yamamoto Town, a sleepy seaside suburb of Sendai, dubbed its waterfront the “Strawberry Line” for all the strawberry farms that stretch along the coast. The aim was to attract tourists to enjoy hiking, sea breezes and strawberry picking. Now close to 80% of the farmlands are soaked with salt water and covered with garbage. Some 90% of the farms have been destroyed, locals estimate. Hundreds of greenhouses have been washed away, along with the latest crop of strawberries and everyone’s farm equipment. Most homes were scraped off the

Source: Ministry of Agriculture Forestry and Fisheries

coast down to their concrete foundations. Crooked pipes that once were part of greenhouses are all that remain in most fields. “It was a good life,” said Takaharu Otsubo, 63 years old, who has been farming strawberries with his wife for 30 years. “Now we want to move, but we don’t have the money.” Theirs was one of the few homes left standing, but now its living room is filled with debris from the neighborhood. Uprooted pine trees pierce their ground floor. Even if the soil isn’t ruined by salt, which can reduce farms’ productivity, the Otsubos said it would take hundreds of thousands of dollars and years of work to bounce back. There is also the issue of continued worries over the crippled Fukushima Daiichi nuclear plant, which could make consumers reluctant to buy fish or food from the region for a long time, even if it doesn’t leak more radiation. Mr. and Mrs. Otsubo aren’t sure whether they can rise to the challenge at their ages. “None of the strawberries are coming back. Even the onions that I planted here are dead,” said Mr. Otsubo’s wife, Shu, 63, as she walked

around her fields looking for signs of life. “We would have to start from zero again.” Farming and fishing communities up and down the coast tell similar stories. Sea beds that used to yield tons of surf clams are covered with debris. Swans have stopped showing up in area swamplands. To revive the fields, farmers will need government help cleaning out the debris, which also includes tractors and trains. They will have to test what is in the soil now, and whether it will poison plants. Some farmers figure they will have to bring in truckloads of new soil and expensive fertilizer. The local agricultural cooperative is recommending farmers flood their fields and paddies with water to wash the salt out. “The problem is that there is no water and no way to bring it to the fields right now,” said Kazuhiro Miura, a Sendai representative of the Japan Agricultural Cooperative, which advises and organizes farmers across Japan. Yoichi Fukanuma, 30, a thirdgeneration strawberry farmer, said many of the older farmers are planning on giving up. He and other younger farmers hope that with a lot of government help, and debt, they can start over again. The soil used to be quite fertile for growing fruits and vegetables, he said, and Yamamoto Town had a longer harvesting season than many areas because the nearby hills blocked the coldest winter winds from the west, while sea breezes keep the area cool in the summer. Even those that want to rebuild say they may move their homes, though. The terror of the tsunami is still fresh. Maybe “we can work here but live somewhere else,” Mr. Fukanuma said. —Patrick Barta, Miho Inada and Yoree Koh contributed to this article.

THE WALL STREET JOURNAL.

Wednesday, April 6, 2011

5

DISASTER IN JAPAN

Since the March 11 earthquake and tsunami in Northeast Japan, local stations such as FM Iwaki have played a major role in keeping people informed at a grass-roots level mainstream media can’t match. The station in this Fukushima prefecture city of more than 300,000 people has delivered emergency information 24 hours a day, providing an indispensable resource for people in the Iwaki region. The radio station doesn’t have listener ratings, but its online streaming broadcast has been accessed on average 45,000 times a day, or about 100 times its normal traffic. Masaaki Abe, 53 years old, station chief for FM Iwaki, says that in the first days after the quake, listeners would call in to ask about relatives and friends, or to tell family members where they fled after the tsunami swept through the town, displacing 3,500 people among 60 evacuation centers. At one point, the eight staff members who stayed on after the disaster took turns lining up for water and eating handouts left by listeners outside the station. Now, there are about 15 staffers, including people who returned after the initial evacuation. The information the station is relaying has changed, Mr. Abe says. It is no longer about missing people or where to get water, but how to claim insurance and how to start planning for the next few months. —Daisuke Wakabayashi

Cabinet abandons overalls, switches to recovery gear Nothing marks a new dawn like a wardrobe change: The first day at a new job, heading back to school and, in Japan’s case, beginning to tread down the path to recovery. And nowhere does uniforms like Japan. Three weeks after the triplepunch crises hit Japan, the country’s leaders have stepped out of the sky-blue emergency workman overalls and into buttondown suits. “We wanted to show that the government is now stepping out toward its second role to look

toward the future reconstruction plans,” said Chief Cabinet Secretary Yukio Edano at a press briefing Friday, looking more statesman-like in a pressed charcoal gray suit than he did in the overalls. Images of the lawmakers hard at work in Tokyo clothed in uniforms not unlike the jumpsuits worn by on-site disaster teams were intended to project a sense of unity with the labor crews. Still, as the weeks wore on, for some irked onlookers, the outfits appeared to look more like costumes as the public grew frustrated with the government’s apparent inability to resolve the nuclear crisis. —Yoree Koh

Tsunami left 16 years’ worth of garbage in its wake The mountain of garbage from the tsunami’s destruction may total 16 years’ worth of waste in the most stricken prefectures, according to one academic estimate. Kyoto University associate professor Nagahisa Hirayama estimates the garbage from the five tsunami-ravaged prefectures will reach about 26.7 million tons, one of the first such estimates available. The Ministry of Environment said it is still investigating the matter. Miyagi prefecture, where the tsunami swallowed entire villages, is predicted to accumulate the most amount of waste: more than 14 million tons, or about 16 years’ worth of garbage, based on how much is typically accumulated in the prefecture each year. Rubble from the earthquake adds another couple million tons. The prefecture has the capacity to dispose of only roughly 0.8 million ton a year, according to data released by Japan’s environment ministry in 2008, the most recent statistics available. Mr. Hirayama estimated that the debris from one large building amounts to about 113 tons. —Yoree Koh Keep up on Japan minute by minute with The Wall Street Journal’s Japan Real Time at http://blogs.wsj.com/japanrealtime

Associated Press

Japan’s Prime Minister Naoto Kan visited a shelter in Rikuzentakata Saturday.

Contaminated fish found Continued from first page cause of the discharge of the radioactive water,” said Hidehiko Nishiyama, deputy director general of the Nuclear and Industrial Safety Agency, the industry regulator. “We will try to avoid further dumping of contaminated water as much as possible.” Officials from Tepco and the agency have said repeatedly that the level of radiation that has seeped into the sea over the past two weeks—while measured at highly elevated levels right near the plant—posed no major immediate threat to humans or to the environment, because the water disperses quickly into the vast ocean. But the contaminated fish were caught about 80 kilometers south of the reactors, well beyond the 20-kilometer evacuation perimeter. One sample of konago—or young lance fish—caught Friday contained twice the permissible level of radioactive iodine, which has a half-life of eight days and which can accumulate in the thyroid in humans, possibly raising the risk of thyroid cancer. The other konago sample, caught Monday, had just over the permissible limit for cesium, an element with an uncertain impact on human health but with a half-life of 30 years. While the local government near the location where the fish were caught said it would suspend fishing of the particular species contaminated, national government officials said no broader fishing ban was contemplated. “It will be necessary to monitor various parts of the sea, and also to consult marine ecology experts,” said Chief Cabinet Secretary Yukio Edano at a news conference Tuesday. The reports of contaminated fish have followed reports of tainted produce including spinach and broccoli, as well as raw milk, in Fukushima prefecture and other areas close to the reactors. The reports of contaminated seafood are potentially more worrisome, because the contaminated seawater, and the fish, move in uncontrollable and untraceable paths. It isn’t clear how extensively the contamination will spread, but fears of radioactive Japanese fish, both at home and abroad, threaten to further hurt an industry already weakened by the tsunami, which wiped out a number of fishing villages along Japan’s northeastern coast. Even as the country has industrialized, the fishing industry has remained integral to its image, with a fishing community dotting Japan’s shores every 5.6 kilometers, according to a 2009 agriculture ministry white paper. Just under half of Japan’s roughly $3 billion in annual food exports comes from seafood in raw or processed forms. On Tuesday, India suspended food imports from Japan for three months, fearing radioactive contamination, an Indian government statement said. The ban could be extended. Also Tuesday, the European Union said it will further reinforce radiation controls on imports of food and animal feed from Japan, according to Reuters. “This too?” Hiro Onodera said Tuesday, discussing the official dumping of contaminated water, as he shoveled mud out of his wholesale fish shop across from the oncethriving fish market of Kesennuma, a port town known for its abundance of bonito, mackerel pike and tuna. The market, devastated by the

Agence France-Presse/Getty Images

After quake, radio stations played pivotal local role

Women sort fish Tuesday at a market in Kitaibaraki, Ibaraki prefecture. tsunami, is seeking to reopen in June. “Japanese people are very sensitive about food safety so I worry that this could be another hurdle that we’d have to clear,” the 56-year-old Mr. Onodera said. “What we’re concerned about is damage from misinformation,” said Hiroshi Somekawa, deputy secretary of the fisheries division of Kesennuma’s industrial department. “While we’re trying so hard to rebuild this industry, it’s not desirable that people may start to turn away from fish or refuse to eat it altogether.” There are already signs that such attitudes are spreading. Australian seafood producer Clean Seas Tuna Ltd. is seeing increased demand from overseas for its farmed yellowtail kingfish following the Japanese nuclear crisis, Managing Director Clifford Ashby said Tuesday. “The increased demand is coming mainly from Southeast Asian countries that normally take Japanese product, and from the U.S.,” he added. Nani Abdul Manap, a deputy manager at the Japanese-owned Isetan department story in Kuala Lumpur, Malaysia, said she is certain Japanese fish now on sale there “are safe because we brought them in before the tsunami.” But Ms. Nani said “once it runs out, we will source from neighboring countries. And if the suppliers there cannot supply us, then we won’t sell that item. We don’t think we will take fish and crabs from Japan because of the radiation there.” The contaminated konago were both found in Ibaraki prefecture, just south of Fukushima, home to the leaking nuclear plant. No fishing is currently being done in Fukushima. The radioactive material was found in the fish after Ibaraki had decided to resume fishing after the tsunami. All ports aiming to restart fishing now will be required to test for radioactive contamination before resuming. Ibaraki’s fishery department said konago tend to swim in shallow waters close to the coast, and usually come to Ibaraki from northern areas. It is possible that the sampled fish passed through the waters near the nuclear plant before arriving in northern Ibaraki, officials said. Local fishery cooperatives also tested 10 other kinds of fish, but none of those samples exceeded safety limits, prefecture officials said. Only fishing for konago will be suspended

in Ibaraki. The fears of contaminated fish come after the tsunami had crimped Japan’s fishing industry. An April 1 United Nations report said 18,500 fishing vessels had been damaged or lost in northern Japan; in some areas, more than 90% of the industry was wiped out. “The damage to fishing ports has also been severe,” the report said. “Reconstruction...will be critical for the reconstruction of livelihoods.” Japan’s overall production totaled 5.3 million tons of fish in 2009, according to the Japan Fisheries Agency. The coveted catch in the waters along the Tohoku coastline accounted for about 25% of the total, before the natural disaster hit. Fukushima prefecture produced the largest part of that, 830,000 tons. Iwate prefecture, known for its salmon supply, 190,000 tons and Miyagi prefecture—where Kesennuma is located—360,000 tons. A Fisheries Agency spokesman said some fisheries in Iwate, 200 kilometers north of the troubled nuclear-power plant, will resume business as early as next week. The prefectures will check the water for radioactive contamination before giving the go-ahead. —Mitsuru Obe in Tokyo, Celine Fernandez in Kuala Lumpur and Ray Brindal in Canberra, Australia, contributed to this article.

Watching the water Radiation levels in the sea 15 km offshore of Fukushima Daiichi, in becquerels per cubic centimeter 0.20

Iodine 131

Cesium 134

Cesium 137

0.18 0.16 0.14 0.12 0.10

Japan’s permissible limit t

0.08 0.06 0.04 0.02 0 April 2 3 4

2 3 4

2 3 4

Source: Ministry of Economy, Trade and Industry

6

* *

THE WALL STREET JOURNAL.

Wednesday, April 6, 2011

WORLD NEWS

GOP proposes big cuts in U.S. budget WASHINGTON—House Republicans on Tuesday proposed a U.S. budget for the next fiscal year that would spend $3.53 trillion—$179 billion less than President Barack Obama’s plan—and aims to bring the budget into balance, excluding interest payments, by 2015. The GOP budget for 2012, crafted by Rep. Paul Ryan (R., Wis.), chairman of the House Budget Committee, would mark a reversal of a years-long trend of growing deficits. Mr. Ryan says that after three years of deficits exceeding $1 trillion, the GOP plan would bring the deficit down to $995 billion in 2012, with deficits declining steadily thereafter. The budget proposal stands little chance of becoming law, since it would have to be approved by the Democratic-controlled Senate and signed by Mr. Obama, and, among other things, it would repeal Mr. Obama’s signature health-care law. It would make fundamental changes to Medicare and Medicaid and reduce spending on the government health-insurance programs. The proposal marks an extraordinary political statement by House Republicans, propelled to power by a surge of concern over government spending. It’s a gamble that voters are so concerned about the size of government that they are willing to accept significant cuts in popular programs and a transformation of the pillars of the New Deal and Great Society. Mr. Ryan, who has long advocated a significant reduction in government’s reach, portrayed the changes as necessary to reverse a federal expansion that is threatening the country’s financial and moral health. The plan “calls for a

Bloomberg News

BY NAFTALI BENDAVID

Rep. Paul Ryan unveiled the GOP budget plan Tuesday in Washington. It aims to cut the deficit to $995 billion in 2012. government faithful to its limited but noble mission: securing every American’s right to pursue a destiny of his or her choosing,” Mr. Ryan wrote in the introduction to his budget proposal, which he calls “The Path to Prosperity.” Democrats, based on early reports of the budget’s contents, portrayed it as an extreme document, dedicated to dismantling the protections government has provided the lower- and middle-class for decades, while declining to make businesses pay their fair share. While government spending is currently about 24% of the U.S.’s gross domestic product, Mr. Ryan

says his budget would bring that to 22.5% next year and to less than 20% by 2018. By 2021, the deficit would be reduced to $385 billion. In all, the GOP proposal would cut spending by $5.8 trillion over the next 10 years and spend $6.2 trillion less than Mr. Obama has advocated over the same period. Nondefense, nonsecurity discretionary spending would be cut by $79 billion next year and by $1.6 trillion over the next 10 years. This category includes the traditional domestic spending that Congress approves each year for programs such as environmental protection and scientific research.

Such cuts would likely be politically difficult. Currently, Congress is on the verge of triggering a partial government shutdown due to a stalemate over a House GOP plan to cut a smaller amount—$61 billion—in discretionary spending in the current fiscal year. Democrats say the cuts are too deep and are offering $33 billion in cuts, some of it from nondiscretionary programs. In the Ryan proposal, some of the biggest changes would occur in Medicare, the health program for the elderly and disabled, and Medicaid, the health program for the poor. People who retire after 2021 would no longer have access to Medi-

care, the government-run fee-for-service health-insurance program. Instead, Medicare for them would be converted into a “premium support” system, meaning beneficiaries would choose from an array of private insurance plans, with government helping pay the premium. People 55 and older wouldn’t be affected. Medicaid would be converted into a block grant for the states. The GOP budget estimates it would save $771 billion on Medicaid over the next 10 years. It would also turn the Food Stamp program into a block grant system. To Democrats and liberal groups, these moves amount to undermining the key programs by which government helps seniors and the less fortunate. Mr. Ryan argues that these programs face financial problems and must be overhauled in order to save them. The GOP budget would also overhaul the tax code, setting the top individual and corporate rates at 25% rather than 35%. The changes would be revenue-neutral, since the budget would eliminate a series of tax breaks. But even some Republicans say it is unrealistic to try to balance the budget without some increases in revenue. Not all programs would be severely cut. Mr. Ryan would adopt $178 billion in Pentagon cuts identified by Defense Secretary Robert Gates. But he would reinvest $100 billion of this in other defense programs, using the remaining $78 billion for deficit reduction. Mr. Ryan’s budget also consolidates an array of job-training programs into “career scholarships” aimed at retraining workers. And it would end the federal conservatorship of Fannie Mae and Freddie Mac, the home-mortgage giants.

BY TOM WRIGHT Bangladesh’s Supreme Court ruled Tuesday that Nobel laureate Muhammad Yunus must step down as head of microlender Grameen Bank, a decision likely to ratchet up diplomatic tensions with the U.S. The court ruled unanimously to uphold a central-bank decision last month that Mr. Yunus, 70 years old, must resign as managing director of Grameen, which pioneered lending small amounts to poor borrowers without collateral. The central bank found that Grameen had failed to get its approval, as required by a law that formally set up the bank, when it reappointed Mr. Yunus managing director in 1999. Mr. Yunus appealed, but Tuesday’s Supreme Court ruling ended that legal avenue. Nine of Grameen’s 12 board members have launched a separate case at the Supreme Court calling for Mr. Yunus’s reinstatement, which is likely to be heard Wednesday. Mr. Yunus has remained at work since the central bank’s ruling, but he appears to be running out of legal options to stay in the job. His ouster, if made final, could dent Bangladesh’s international reputation at a time when its textiledriven economy is growing steadily and its moves to clamp down on Islamist extremism have won plaudits. Some analysts say Mr. Yunus’s

fame after he shared the 2006 Nobel Peace Prize with Grameen has angered Bangladesh Prime Minister Sheikh Hasina and that she increasingly views the bank as a competing power center. While Bangladesh has lurched between unstable civilian and military governments since it was carved out of Pakistan after a 1971 war, nongovernmental organizations like Grameen have grown in stature. Bangladesh received large amounts of foreign aid following independence, which spawned a huge nongovernment sector. Grameen, which Mr. Yunus founded in the 1970s, initially was dependent on aid but hasn’t taken any donor money since 1998, as it became more profitable. More recently, it moved in to a range of other businesses, including cellphones and dairy products. Mr. Yunus also floated a political party in 2007, although it quickly folded. The U.S. has supported Mr. Yunus. Robert Blake, U.S. assistant secretary of state for South and Central Asian affairs, used a trip to Bangladesh last month to urge the government to find a compromise on the issue. The U.S., he said, was “concerned about the dampening effect this will have on civil society in general and on the integrity and effectiveness of Grameen Bank in particular.” Those comments were viewed by a swath of Bangladesh’s media as unwar-

Associated Press

Bangladesh court upholds Yunus’s ouster

Muhammad Yunus and the microlender he founded won a Nobel Prize in 2006. ranted meddling in the country’s internal affairs. Ms. Hasina hasn’t commented on Mr. Yunus’s court cases. Mashiur Rahman, an economic adviser to Ms. Hasina, denied there was anything political in the central bank’s decision to oust Mr. Yunus. Grameen was wrong not to have sought the central bank’s approval to reappoint Mr. Yunus as managing director in 1999, Mr. Rahman said. Mr. Yunus must abide by the Su-

preme Court decision, or risk being in contempt of court, he added. A spokeswoman for Grameen confirmed the court decision Tuesday. Mr. Yunus wasn’t available for comment. He has previously denied any desire to move into politics. “I have stated many times that I have no political ambitions now and I am sure that the prime minister does not see me as a political threat to her,” Mr. Yunus wrote last month

in answers to emailed questions from The Wall Street Journal. Ms. Hasina in December blamed microfinance banks for “sucking blood” from poor borrowers. The global microfinance industry has faced criticism, especially in the southern Indian state of Andhra Pradesh, for saddling the rural poor with high levels of debt and making large profits for bank owners. Grameen, however, is majorityowned by its 8.3 million borrowers and has largely escaped such criticism. The bank has turned a profit for all but three years of its existence, Grameen says. Under a special 1983 law that turned the bank into a formal lender, the government has the right to hold up to a 25% stake in Grameen and appoint a nonexecutive chairman and two other board members. Mr. Rahman, the economic adviser, said the government made loans at below market rates to Grameen in 1983, a year when the bank had a loss. That support, he said, has given the government a close supervisory role in Grameen’s development. The government has a 3.5% stake in Grameen. Mr. Yunus last year proposed to Bangladesh’s finance ministry that he stand down from running operations if he could become chairman of the board to ensure a smooth transition of leadership.

THE WALL STREET JOURNAL.

Wednesday, April 6, 2011

7

**

WORLD NEWS

Gadhafi halts rebels at oil port town By Stephen Fidler in Brussels and Charles Levinson in Benghazi, Libya The rebels had managed to take part of the oil town of Brega, aided by an international air campaign that the North Atlantic Treaty Organization said has already destroyed nearly a third of Col. Gadhafi’s weaponry. But the top military commander of Libya’s rebels said opposition fighters are unlikely to make significant gains unless NATO can respond more quickly to requests for airstrikes, and gives the rebels advanced weapons, including helicopters. “If NATO listens to us and takes our requests seriously, this war won’t last long,” said rebel

European Pressphoto Agency

Libyan government forces unleashed a new round of bombardment of rebels trying to take back a key oil town to thwart their latest drive, as officials close to Col. Moammar Gadhafi said they might consider some reforms but the leader wouldn’t be stepping down.

Libyan rebels prepared a missile launcher on the road to Brega on Tuesday. Chief of Staff Gen. Abdel Fattah Younis, in an interview Monday at a safe house in a rural suburb of Benghazi. “If they don’t give us what we are asking for, I don’t know how long it will last.” Control of Brega, an oil town that has changed hands several times since the fighting began last

month, could significantly boost the rebels’ hunt for revenue they can use to purchase heavy weapons for the fight against Col. Gadhafi’s better-equipped troops and militiamen. The rebels said Col. Gadhafi’s forces have targeted oil-storage facilities in an effort to deprive the opposition of assets.

Shipping industry data provider Lloyd’s Intelligence said a tanker was headed for the rebel-held port of Marsa el-Hariga on Tuesday to load a shipment of oil for export, the first in almost three weeks, the Associated Press reported. NATO estimated Tuesday that allied air attacks have taken out 30% of the capacity of Col. Gadhafi’s military forces, which are also being forced to take heavy armor such as tanks out of front-line fighting. Brig. Gen. Mark van Uhm, chief of allied operations, said NATO forces conducted 14 strikes against Libyan targets Monday. NATO aircraft hit air-defense systems, tanks and armored vehicles around the besieged city of Misrata, while further east, around Brega, they destroyed a rocket launcher, he said. Ammunition storage facilities were also hit. The general described Misrata as “a No. 1 priority because of the situation on the ground over there.” “In Misrata, tanks are being dispersed, being hidden, humans being used as shields in order to prevent

NATO forces to identify and target those assets,” he said. Gen. Charles Bouchard, the Canadian in direct charge of the allied operations, said pro-Gadhafi forces have changed tactics because of NATO airstrikes, and are now using trucks and light vehicles to move troops to the front lines while keeping tanks and other heavy armor far behind, in urban areas so they won’t be targeted by allies concerned about hitting civilians. Libya’s oil minister, Shukri Ghanem, suggested a change in who leads the country was inevitable, although he gave no clear indications on the timing. “There will be changes of course, whether we like it or not,” he said. The comments were echoed later as government spokesman Moussa Ibrahim said the regime was considering proposals that could pave the way for Col. Gadhafi to relinquish power. Earlier offers of change by the government have yet to materialize. —Sam Dagher and Tom Barkley contributed to this article.

8

THE WALL STREET JOURNAL.

Wednesday, April 6, 2011

WORLD NEWS

OECD warns on inflation U.K.’s Cameron seeks BY GABRIELE PARUSSINI PARIS—Economic growth in the world’s richest countries outside disaster-stricken Japan is gaining strength, the Organization for Economic Cooperation and Development said Tuesday, but it warned about the impact of commodity prices on inflation expectations. “We are relatively upbeat; it seems that the recovery is gaining strength,” Pier Carlo Padoan, the OECD’s chief economist, said in an interview, adding that the Group of Seven economies could reach annualized growth of about 3% in the first half of the year. Still, he said, “we may be at the beginning of second-round effects, with commodity prices feeding into inflation expectations.” The OECD’s appraisal of the world economy has improved from

the twice-yearly forecast the think tank published in November, which at the time predicted 2.3% growth for its 33 members this year. The European Central Bank and the U.S. Federal Reserve, which have behaved in tandem in the past, have diverged in their outlooks, Mr. Padoan said. “The ECB is rightly concerned about inflation expectations becoming less anchored,” he added. The divergence in monetary policy seems to be influencing exchange rates, with the euro now “relatively strong” against the dollar, he said. Households and businesses are becoming less confident in the central bank’s ability to keep inflation under control, thus risking self-fulfilling expectations for rising prices, and ensuing interest-rate rises. In the euro zone, inflation has been overshooting the ECB’s target, set at

just below 2%, and President JeanClaude Trichet is widely expected to announce a rate increase this week. Fed Chairman Ben Bernanke, on the other hand, as recently as Tuesday played down inflation threats to the economy, saying the rise in prices of oil, grains and other global commodities is likely to be temporary and won’t translate into a broader inflation problem. The OECD didn’t publish any projection for Japan’s economy, arguing that it is too early to estimate the costs of the earthquake and the tsunami that hit the country, coupled with the nuclear disaster at the Fukushima Daiichi plant. Growth in the world’s third-largest economy might be reduced by between 0.2 and 0.6 percentage point in the first quarter, and by between 0.5 point and 1.4 points in the second quarter, the report said.

to restore Pakistan ties BY ZAHID HUSSAIN

ISLAMABAD, Pakistan—British Prime Minister David Cameron, on a whirlwind trip to Pakistan, sought to restore relations that have been turbulent over the past year. Mr. Cameron, who arrived in Pakistan’s capital, Islamabad, for a one-day visit Tuesday, announced a new joint facility in the northwestern city of Peshawar, where the U.K. will share its knowledge of countering improvised explosive devices used by the Taliban. The U.K. will also extend $1.1 billion in aid to Pakistan to help build schools, buy textbooks and train teachers. The announcements were an olive branch to Pakistan, which reacted angrily last year when Mr.

Cameron, during a visit to India, said Islamabad was “looking both ways” by receiving billions of dollars in Western aid while continuing to “promote the export of terror” to India, Afghanistan and elsewhere. On Tuesday, Mr. Cameron struck a different note, saying he wanted to start fresh, build trust and put the relations between the two countries on a new footing. He praised Pakistan for its fight against the Taliban and al Qaeda in the border regions with Afghanistan. Still, many British and U.S. officials are concerned Pakistan isn’t doing enough to stomp out militant havens. Mr. Cameron has urged Pakistan and India to push forward peace talks, and sought to assure Pakistan that his country wouldn’t take sides.

Ideas are manufactured only by the imagination and the determination of people. And only the businesses that recognize this are the ones who will succeed. Our mission is to help organizations across the globe achieve more than they ever thought possible. From workforce assessment, recruiting and training, to career management and talent based outsourcing, our Innovative Workforce Solutions let businesses reach their fullest potential by reawakening them to the very real power of people. We are ManpowerGroup™. manpowergroup.com

Experis™ / Manpower® / Right Management® © 2011 ManpowerGroup. All rights reserved.

iStockphoto

Desktop apps 10 WHAT’S LURING KATY PERRY TO AUSTRALIA? 10

WEDNESDAY, APRIL 6, 2011

LIFE & STYLE

asia.WSJ.com

New Firefox 4: Re-built to play catch-up Mozilla’s latest browser improves on previous editions, but most of its features are nothing new [ Personal Technology ] BY WALTER S. MOSSBERG

Google in Firefox, left. Options for Firefox’s new synchronization feature, above.

Firefox (2)

In the long browser wars, Microsoft’s Internet Explorer has been the leader. But the sentimental favorite was Mozilla’s Firefox, mostly because it was faster, hewed better to Internet standards and offered an unmatched array of third-party add-ons that enhanced its functionality. In recent years, however, Firefox has slipped. It lost its speed dominance to Google’s upstart Chrome browser and to Apple’s Safari. And as its rivals stripped down their interfaces to make more room for Web content, Firefox remained saddled with lots of toolbars and menus.This week, Mozilla is striking back. It released a sleeker, faster new edition, called Firefox 4, for both Windows and Mac. After testing it, my verdict is that this new version is an improvement, but many of its new features are catch-ups to those present in other browsers. Mozilla, a Silicon Valley nonprofit organization, this week also released a new mobile version of Firefox for phones running Google’s Android operating system. I took a quick look at the Android version, which seems good, but this review is focused on the computer version. Though Mozilla doesn’t say so, I believe one reason for the revamp is to try to win back the hearts and minds of those techies and influential users who shun IE and once swore by Firefox. My anecdotal observation is that these folks have been shifting gradually to Chrome. In addition, the big gun, Microsoft, last fall released a new version of IE that is faster and slicker than prior editions. I tested Firefox 4 on three Windows PCs and two Macs, and compared it with its three main rivals (for IE, I was able to do this comparison only on Windows, as it lacks a Mac version). I found the new Firefox to be snappy. It easily handled video-heavy sites and “Web apps,” including Web-based email programs, simple games, productivity sites like

Google Docs and the like. Some of these more complex sites use a new and evolving Web standard called HTML 5, which Mozilla has strongly supported. The new browser didn’t noticeably slow down for me, even when many tabs were opened. But, in my comparative speed tests, which involve opening groups of tabs simultaneously, or opening single, popular sites, like Facebook, Firefox was often beaten by Chrome and Safari, and even, in some cases, by the new version 9 of IE, which has ramped up its own speed. I should stress that these tests, which I conducted on a Hewlett-Packard desktop PC running Windows 7, generally showed very slight differences among the browsers. Their speeds are converging. But Firefox 4 won only a couple of them. Still, speed isn’t everything. The main new features in Firefox 4 do a lot to streamline the browser. As with its rivals, the tabs have been moved to the top.

In the Windows version, the menu bar functions have been consolidated into a new orange “Firefox button” at the upper left, though you can turn the menu bar back on if you like. In another streamlining move, bookmarks are now accessed through a single button, though you can turn back to the familiar bookmarks toolbar. Taking a cue from Chrome, Firefox now lets you permanently “pin” tabs for favorite sites to the tab bar. These appear as small icons to the left of the bar, and are always open. They are called app tabs, because Mozilla assumes they’ll be used primarily for app-like sites such as Web email, which you check frequently. If something changes on a pinned site, such as a new email arriving, the app tabs notify you with a slight glow effect. (IE embeds icons for favorite sites right in the Windows taskbar.) Another nice new feature is called Panorama. It allows you to group thumbnails of tabs representing favorite sites, name the

group, and then open its contents in tabs at once. For instance, you might use this feature to quickly get to all your favorite news or sports sites.I also successfully tested a synchronization feature, which allows you to view on one PC or Mac the bookmarks, history and open tabs from a copy of Firefox running on another.It even worked when I tried it on the Android version of Firefox. This ability to sync with mobile devices is likely to be a bigger deal as Web surfing continues to shift away from PCs. However, like a similar synchronization feature in Chrome, the one in Firefox doesn’t work across different browsers. An add-on program called Xmarks, which I use daily, does. Like IE, the new Firefox also includes an emerging, optional privacy feature called Do Not Track that sends a signal to websites to stop tracking your Internet activity. However, the tool won’t be fully useful unless a large majority of sites agree to obey it. The idea, though, is getting traction among some advertisers and publishers. If you are a Firefox fan, the new version will take some getting used to, but I recommend upgrading, at mozilla.com. If you currently rely on another browser, Firefox 4 is worth a look, but you aren’t likely to see lots of big features you haven’t seen before.com.

APP HAPPY

Golf Rules Quick Reference A handy app for any frequent links-dweller, “Golf Rules Quick Reference” is an essential resource for solving any in-game confusion. Rules are sorted intuitively, first by where you are (on the tee, on the car path, in a water hazard) and then by what questions might occur (What if there are obstructions? What if you can’t find the ball?). And with golf’s complex and sometimes perplexing rules, it’s often useful to have this quick and comprehensive compendium in your pocket: Did your ball hit another player? Play as it lies. Did your ball hit you? One-stroke penalty! $10, available on iPhone and Android (all prices are in US dollars)

Let’s Golf! 2 Don’t let the cutesy, bobbleheaded avatars fool you. This game is a plenty-fun diversion for those times you can’t make it out to the real golf course. While the all-important stroke mechanism is simplistic (correctly time a power meter, then another for accuracy), “Let’s Golf! 2” hits all the right golf-game bases, featuring solid gameplay, a variety of courses and multiplayer tee-offs. Throw in the impressive graphics, with visual goodies ranging from airplanes crossing the sky to detailed houses sitting right on the green, and you’ve got a solid, enjoyable game that’ll surely keep you entertained long enough to heal up that rotator cuff. $1, available on iPhone

Tiger Woods: My Swing While the shameless self-branding might be a turnoff, Tiger’s swing instruction app does have a lot to offer. The videos, recorded while he was embarking on his fourth and latest swing change, are hi-res and well-produced, and overall the app has a level of polish befitting its premium cost. After some instruction, record yourself doing your thing and cross-compare with the master using the annotation tool, which draws lines over your video highlighting essential postures and alignments. It’s a slick, quality app and best of all, not a totally selfish shill: Tiger’s share of the proceeds go to the Tiger Woods Foundation. $10, available on iPhone —Dennis Tang

Oliver Munday

Getting right into the swing of things

10

THE WALL STREET JOURNAL.

Wednesday, April 6, 2011

LIFE
STYLE

Desktop shopping for apps

Redferns

Now there’s a better way to install new software on a PC

Australia had previously struggled to attract foreign acts. But stars such as Katy Perry, Usher and Bob Dylan are taking their tours Down Under.

Australian dollars lure Katy Perry Google

BY GEOFFREY ROGOW

The Chrome Web Store sorts apps into categories and stores them in the cloud, not locally on the PC.

[ The Digital Solution ] BY KATHERINE BOEHRET Installing software on a personal computer can be a time-consuming and tedious process that’s nowhere near as fast and effortless as downloading an app for a smartphone. Now there’s a better way: Get an app for your PC. After successfully proving the popularity of app stores on mobile devices, Apple and Google have brought them to the personal computer. In January, Apple unveiled a version of its app marketplace to computers: the Mac App Store. In December, Google gave PC and Mac users a way to download apps on their computers using the Chrome Web Store, accessible via Google’s Chrome Web browser. Each of these marketplaces includes a different set of apps than those available for mobile; Apple’s offers about 3,400 apps and Google’s, about 3,700. Apps (short for applications) are programs that have been around for decades, going back to the Palm Pilot years. But Apple changed the game in 2008 with its developer-friendly App Store, which now hosts some 350,000 apps that have been downloaded over 10 billion times on the iPhone, iPod touch and iPad. Apple’s Mac App Store is a new way of organizing and distributing traditional programs that are installed on the computer, while Google’s Chrome Web Store offers apps that run in the browser and are remotely stored on the Web, not on the PC. Apple’s Mac App Store surprised some users of the Snow Leopard operating system by popping up after a routine software update. An icon labeled “App Store” suddenly appeared in the

system dock, and opened to reveal what looked much like a simplified version of Apple’s iTunes Store. The Mac App Store includes five quick ways to navigate through apps at the top: Featured, Top Charts, Categories, Purchased and Updates. This last section lights up with a number when an update is available for one of the downloaded apps, much like on the iPhone or iPad. I signed into the Mac App Store using my iTunes account, which meant that any gift certificates or credits I had in my account carried over for use here. Suggestions of apps to download are offered in a visually digestible way, with lists like Staff Favorites, Top Free, What’s Hot, and apps sorted by category like Education, Medical and Social Networking. One of the best features of the Mac App Store is that it gives users a way to download software they otherwise would have to buy and install using physical disks. A Mac App bonus: As soon as a program is installed, a clever animation makes the icon for the program gleefully hop from the Mac App Store down into the system dock. Some popular games and apps found on the original App Store, like Angry Birds and Twitter, can be found on the Mac App Store. The TweetDeck and the NPR apps—two apps that I use a lot on my iPad—aren’t available, however. And there’s still no way to wirelessly sync one downloaded app to multiple devices, like downloading the Twitter app on the Mac App Store and seeing that app appear on my other Apple devices, like the iPad and iPhone. Google’s Chrome Web Store differs from the Mac App Store in several ways. First, it’s available to anyone who has downloaded the Chrome Web browser on a Mac or PC. Apple’s Mac App Store is only usable on Macs. Second,

some of its apps, which run off the Web rather than on the computer, replace entire programs that would otherwise run separately on the PC. An example of this is TweetDeck, which runs in its app format just like the separate TweetDeck program that users must download and run separately on their computers. The Windows PC at my office has trouble running TweetDeck in its computer-run version, but it worked like a charm with the in-browser version from the Chrome Web Store. Since Chrome Web Store apps are remotely stored in the cloud, people can use Chrome sync to synchronize data across multiple computers including apps, bookmarks and preferences. This all goes along with Google’s overall strategy to create a Chrome operating system for the computer that encourages users to run all programs from their Web browsers and to store a majority of their data in the cloud. The Chrome Web Store doesn’t offer large programs for permanent storage on the computer like Apple’s Mac App Store. For example, one of the most expensive apps that can be downloaded in the Chrome Web Store is Fraboom Gold, a self-described interactive children’s museum that costs $6 a month for a subscription. Apple sells Aperture 3, the company’s photo-editing software, for $80 at the Mac App Store. Downloading and installing apps from the Chrome Web Store takes a click of the on-screen Install icon. After apps download, they appear on the home page of the browser, each represented by a large, colorful icon. These apps run in their own separate browser tabs. Notifications from some apps pervasively pop-up on the screen, even if that app’s tab isn’t on the screen.

SYDNEY—Australia is suddenly the world’s hottest music venue. Both teen heartthrob Justin Bieber and pop princess Katy Perry, who played to sold-out houses here in 2010, are returning in 2011. Hip-hop power couple Jay-Z and Beyoncé flew down with Oprah Winfrey earlier this year; other acts that have made the trip since November include U2, Usher and Rihanna. From rock band Kings of Leon to teeny bopper Miley Cyrus (both touring later this year) to easy-listening star Neil Diamond (seven cities last month), musicians of every stripe are heading Down Under. The reason: The Australian dollar. This week the currency is changing hands at US$1.04, up nearly 30% in a year, its highest level since the currency was floated in 1983. The artists themselves don’t benefit from the exchange rate, because their performance fees are paid in U.S. dollars—for some of them, more than US$200,000 a show—but a more valuable Australian dollar means less risk for the Australian promoters. They can sign more acts and bigger names and organize larger festivals without the fear of losing money. In years past, “working with the currency at 70 [U.S.] cents and you’d like an act that’s US$100,000, but you may have to settle for someone that costs US$40,000,” said Dwayne Cross, managing director of Australian promoter Paperchase Touring and Entertainment. With the Australian and U.S. dollars at rough parity, “that isn’t an issue.” RBS’s Chief Australian Economist Kieran Davies said, “It’s part of the general trend where we are buying more, even indirectly, from offshore.” Mr. Davies notes that as it currently stands the currency is at levels it hasn’t been since the early 1980s, which provides “a huge change for anyone thinking of coming here to make money.”

This weekend, Paperchase’s annual SuperFest event will bring to Australia Snoop Dogg, Nelly, Busta Rhymes and others in the urban music scene for four eight-hour live-music shows. About 100,000 people are expected to attend, with ticket prices ranging from A$139 to A$189. And next month’s Byron Bay’s Bluesfest has drawn a trio of heavyweights—Bob Dylan, B.B. King and English singer-songwriter Elvis Costello—to headline an event unaccustomed to the biggest names in the industry. Australia’s distance from other well-to-do economies—and once in Australia, the distance between its cities—had previously made it a difficult sell for foreign acts. “We have the same number of people as Manhattan but are spread out over the size of North America,” said Matthew LazarusHall, chief executive of Chugg Entertainment, which organizes about 70 tours a year in Australia, New Zealand and Singapore and recently brought American country music stars Tim McGraw and Alan Jackson to Australia, as well as Pearl Jam frontman Eddie Vedder. A change in the music business broadly has helped: As record sales have declined, artists have had to generate more revenue from concerts. The 2010 and 2011 currency surge has now set Australia apart. Still, locals hoping the pick-up in popular acts will translate into more entertainment jobs in Sydney and other Australian cities may have to think again. Even as the strong currency has helped bring in international musical acts, it’s badly dented a film and television industry that used to benefit from being a global lowcost production center. “American production companies that used to come here and film at Fox Studios or up on the Gold Coast just aren’t coming here anymore,” said Morgan C. Calton, a Sydney-based producer.

WSJ.com ONLINE TODAY: Food, wine, fashion, design, entertainment, culture and the arts in Asia. It’s all at blogs.WSJ.com/Scene

Wednesday, April 6, 2011

THE WALL STREET JOURNAL.

**

11

OPINION: REVIEW
OUTLOOK

Vindicating Guantanamo

T

he Obama Administration did a full spinning reversal with a triple twist Monday on its plans to prosecute terrorists, announcing that it will now try September 11 mastermind Khalid Sheikh Mohammed in a military tribunal at Guantanamo Bay after all. We were going to applaud the Administration for sticking the national security dismount, but then we saw U.S. Attorney General Eric Holder grouse through his press conference and say that he only took this step because Congress made him do it. “Members of Congress have intervened and imposed restrictions blocking the Administration from bringing any Guantanamo detainees to trial in the United States,” he said Monday, in spinning twist No. 1. The Justice Department was prepared to make a “powerful case against the 9/11 defendants in federal court,” but the politics were causing too many delays on the trial, and it couldn’t wait any longer.

For the record, we assume Mr. Holder to bend and last year he was still telling is referring to the likes of New York Dem- the New Yorker that KSM’s trial in a ciocratic Senator Chuck Schumer and the vilian court would be “the defining event Democrats who ran the Congress last of my time as attorney general.” year and passed a law He was right about that blocked the fundthe “defining” part. His ing for civilian trials for Eric Holder adopts tenure has now been Guantanamo detainees. defined by one of the the Bush antiMr. Schumer—no most overwhelming bislouch at divining pub- terror architecture. partisan Congressional lic opinion—was an policy repudiations in early and vocal oppohistory. nent of Mr. Holder’s brainstorm to try Mr. Holder’s third twist was to assert KSM in downtown Manhattan. And Mon- that he and President Obama still intend day Mr. Schumer called the decision the to close the prison at Guantanamo Bay. “final nail in the coffin of that wrong- But if that ever happens, Mr. Holder will headed idea.” be long gone. Monday’s Gitmo climbMr. Holder’s twist No. 2—that the de- down came after the Supreme Court relays in trying KSM are also Congress’s jected appeals from three Guantanamo fault—is especially rich because Mr. detainees challenging their indefinite deHolder first proposed to try the mass tention. If no other country will take killer in New York as long ago as Novem- them, the detainees have nowhere else to ber 2009. The public and Congress imme- go. diately revolted, but Mr. Holder refused KSM and his fellow murderers will

now be tried by military commissions of the kind that President George W. Bush proposed in the earliest days of the conflict formerly known as the war on terror. Someone should write the headline: Holder vindicates Ashcroft, as in Mr. Bush’s first AG. Or how about: Current State Department Counselor Harold Koh vindicates John Yoo, the much-maligned Bush Justice Department official whose views on Presidential power have also been increasingly adopted by Team Obama. Somehow we doubt we’ll hear the same moral denunciations we once heard about Mr. Bush’s policies. The Europeans are mute about Guantanamo, and Newsweek hasn’t come up with any more pseudo-scoops about Gitmo guards desecrating the Quran. Mr. Holder made clear he’s not about to apologize, much less thank his predecessors for their foresight, but we suppose his vindication of Guantanamo is enough.

Supreme School Choice

T

he U.S. Supreme Court’s big school church-state theory, only to have it rechoice decision Monday is notable vived by the Ninth Circuit Court of Apmainly for its insight into the pro- peals. Monday’s 5-4 decision was another gressive mind. To wit, no fewer than four well-deserved rebuke to the nation’s leadJustices seem to believe that all wealth ing judicial activists who dominate that belongs to the government, and then gov- appellate court. ernment allows citizens to keep some of In part, the litigants were attempting an it by declining to tax it. end-run around the High At issue in Arizona Court’s landmark 2002 Christian School Tuition A narrow decision school choice ruling in Organization v. Winn Zelman v. Simmons-Haraverts a legal assault was a state tax credit ris, which upheld a for donations to organi- on private schools. Cleveland voucher prozations that offer scholgram even though some arships for private of the money went to schools, including (but not exclusively) re- Catholic schools. The Court reasoned that ligious schools. A group of taxpayers parents decide how to use the vouchers, so sued, claiming that religion was being the program didn’t amount to the governsubsidized on their dime, in violation of ment somehow “establishing” a religion. the First Amendment’s establishment Taxpayers rarely have the standing to clause. sue over the government’s spending The district court tossed out this novel choices, but this suit was hung on the

slender 1968 Warren Court precedent of Flast v. Cohen, which created a narrow exception in establishment law cases. If one Justice had flipped, it would have created a broad new avenue of legal attack against school choice, as well as for lawsuits against everything from Medicare payments to Catholic hospitals to student loans for Jewish colleges. Writing for the majority, Justice Anthony Kennedy ruled that the litigants don’t have standing because they weren’t harmed, and also that they don’t have standing under Flast because tax credits and spending programs are different. “A dissenter whose tax dollars are extracted and spent knows that he has in some small measure been made to contribute to an establishment in violation of conscience.” But a tax credit “is not tantamount to a religious tax or tithe.” To think otherwise, Justice Kennedy contin-

ues, “assumes that income should be treated as if it were government property even if it has not come into the tax collector’s hands.” And what do you know, four Justices assume precisely that. Newcomer Elena Kagan delivered a fiery 24-page apologia for that position, claiming that “the distinction” between appropriations and tax credits “is one in search of a difference.” There’s a debate to be had about tax credits, but one question for Justice Kagan: Is the U.S. government also establishing religion by not imposing a 100% tax rate on churches, mosques and synagogues? With one more vote, the current Court’s liberal minority would surely ban school choice involving any religious schools. The Arizona decision shows again that the Court is only a single vote away from many decisions not all that far removed from those of the Ninth Circuit.

Protectionist Zeros

T

he U.S. Commerce Department is on a losing streak. Fresh off a World Trade Organization reprimand over one protectionist rule, Commerce has now been rebuked by an American appeals court over another. Maybe the message will sink in. The latest case involves a practice called zeroing, a mathematical trick with pernicious economic consequences. Antidumping cases, which hinge on whether a foreign company is selling a good in the U.S. at less than the cost of production, depend on collecting accurate data on relative prices in America and abroad. Zeroing, roughly speaking, allows Commerce bureaucrats to discount instances when the foreign price is lower than the U.S. price (meaning, examples that are the exact opposite of dumping) when bureaucrats plug numbers into their spreadsheets. As a result, zeroing makes dumping appear more common and more severe. Of the 400 goods currently subject to an-

tidumping duties in the U.S., up to half of have paid billions of dollars more over them would not have faced duties at all the years in higher prices either because if Commerce hadn’t fiddled with the antidumping duties raised prices on imnumbers in this way, according to esti- ports or because those duties sheltered mates in a study last year from Chad P. domestic companies from downward Bown of the World price competition. Bank and Thomas J. This was bad ecoPrusa of Rutgers Uni- A well-deserved blow nomics, and now it versity. turns out it was bad to a Washington For the rest, the dulaw, too. The World ties imposed would effort to block imports. Trade Organization has have been dramatically dinged Washington relower, since zeroing peatedly for zeroing. falsely inflates the U.S.-foreign price dif- Commerce and Congress have done their ferentials used to set duty rates. The only best to avoid complying, at considerable scholars to examine duty calculations us- expense to American credibility abroad. ing Commerce’s own confidential data, Most recently, Commerce attempted to Brink Lindsey and Dan Ikenson of the stop zeroing for new antidumping invesCato Institute, found in 2002 and 2004 tigations while keeping the practice for that in the 18 cases they investigated, us- existing duties, to placate both the WTO ing real data instead of Commerce’s ze- and domestic protectionists. roed statistics would have resulted in duLast week’s appellate court ruling puts ties that were on average 86% lower. an end to that charade by finding that unPut another way, thanks to statistical der existing U.S. law Commerce has to eisleight-of-hand, American consumers ther zero in all cases or zero in none.

Since the department has abandoned zeroing for new investigations, there’s reason to hope the Obama Administration will disavow zeroing entirely instead of searching for some way around a carefully reasoned and forceful appellate ruling. More broadly, it’s worth pointing out how absurd it is that something as important as the trade policy of the United States can hinge on whether to plug a zero into a spreadsheet. This kind of policy-by-Excel, typical of antidumping law, is expensive both in lost growth at home and lost economic leadership abroad. Proponents of this kind of trade law have argued that this makes trade “fairer,” which is also President Barack Obama’s rationale for focusing so heavily on enforcement in his own trade policy. In reality, as the zeroing fiasco shows, such laws mostly give bureaucratic cover to protectionists at home. A judicial rebuke on zeroing is an opportunity for a rethink.

12

THE WALL STREET JOURNAL.

Wednesday, April 6, 2011

OPINION

*

*

*

Kazakhstan Is Thriving, Not Stagnating J. Edward Conway (“Coming to Grips with ‘Regime Stagnation’ Risk,” Business Asia, March 31) overlooks the impressive progress Kazakhstan has made in creating democratic institutions that will last long beyond the tenure of any sitting politician, including the country’s president, Nursultan Nazarbayev. In 2007, Kazakhstan instituted a constitutional reform that reduced the presidential term to five years from seven. Two years later, laws were adopted that guaranteed that at least two political parties would be represented in the Mazhilis, the lower house of the Kazakh Parliament. Public funding of political parties was also authorized. Last year, Kazakhstan served as chair of the world’s premier election monitoring group, the Organization for Security and Co-operation in Europe. If that’s not proof that Kazakhstan is serious about democratic governance, I don’t know what is. And late last year, a large group of citizens pushed without government prompting to schedule a referendum this spring that, if approved, would have extended the presidential term, without intervening elections, for an*

other 10 years. But in January, based on a ruling by the Kazakh Constitutional Council, President Nazarbayev rejected the referendum and, instead, called for the election that was held this past Sunday. Presidential elections will be held again in five years as the Constitution requires. A recent survey by the International Republican Institute shows that large majorities of Kazakhs are happy with their lot in life, their democratic institutions and with President Nazarbayev. Ninety percent of Kazakhs polled in February approved of the job the president was doing and 84% believed the country was headed in the right direction. He easily won re-election on Sunday with greater than 95% of the vote. Mr. Conway raises a false specter when he warns that Kazakhstan might drift into chaos because it lacks a real democracy. Our progress toward democracy is irreversible. A significant step toward that goal was on display Sunday. ERLAN IDRISSOV Ambassador, Republic of Kazakhstan Washington, D.C. *

*

Blinder’s Rosy Outlook Ignores A Few Important Facts Alan Blinder’s “Handicapping the Economic Recovery” (op-ed, April 1-3) is good as far as the hurdles he mentions: the Japanese disaster, the European sovereign debt crisis, the game of chicken in raising the debt ceiling and the oil market. But he doesn’t mention the biggest hurdle of all—the Federal Reserve’s policy of keeping short-term interest rates close to zero, with quantitative easing to further drive down long rates. This has impaired the domestic system of financial intermediation so that large banks pile up huge excess reserves while being unwilling to lend to smaller banks for a derisory yield. But small banks are the natural lenders to small and medium-sized enterprises, which tend to be the main source of new employment in economic recoveries. Instead, bank loans to small businesses continue to decline, as the U.S. Journal mentions in its March 31 issue, and overall bank credit has never recovered from the credit crunch of 2008. No wonder employment gains have been so sickly in 2010 and 2011. PROF. RONALD MCKINNON Stanford University Stanford, Calif. You can’t add up the probabilities the way Prof. Blinder does in his last paragraph unless all the variables are independent. His certainly are not. An adverse outcome in any one of the four will greatly increase the chances of the others going badly, too. ROB SLOCUM Stamford, Conn

Even though Mr. Blinder is a former vice chairman of the Federal Reserve, he neglects to mention Fed policy and trust in government officials as potential economic hazards. As the Fed keeps its pedal to the metal in printing U.S. dollars, for example, should investors and consumers trust that Chairman Ben Bernanke (or President Obama or Treasury Secretary Timothy Geithner) has a rock-solid commitment to maintaining the purchasing power of the dollar? An economic recovery juiced by government borrowing (federal, state and local), income transfers, excessive currency printing and currency depreciation can be far more hazardous in the long term than a period of deleveraging and spending restraint. Sustainable economic growth requires confidence in the full faith and credit of the U.S. government. So following Mr. Blinder’s analytical process, let’s handicap the trust race. Continued irresponsible spending and fickle tax policies have, say, a 35% chance of derailing the recovery. Fed policy also has a 35% chance of spooking foreign investors, undermining the U.S. dollar as the world’s reserve currency and sparking inflation. That adds up to 70%, leaving the betting odds in favor of long-term economic mismanagement and malaise. Americans don’t like those odds and their expectations are the ones that ultimately determine the health of the economy. TOM WALTERS Fairfax, Va.

Could Israel Become an Energy Giant? [ Global View ] BY BRET STEPHENS Jerusalem “That is beautiful product.” Harold Vinegar is holding a little vial of oil, lightbrown in color, with a look of paternal pride. “It’s much lighter than typical crude,” he says, describing it as “the equivalent of Saudi extra-light.” Maybe somewhere else this would be no big deal. But this is Israel—a country that’s been drilling dry holes for six decades in a famously fruitless quest for oil. And the liquid Mr. Vinegar is holding has been extracted from a nearby deposit of shale oil, which Israel has in abundance. What kind of abundance? The World Energy Council estimates Israel’s shale deposits, located some 30 miles southwest of Jerusalem, could ultimately yield as many as 250 billion barrels of oil. For purposes of comparison, Saudi Arabia has proven reserves of 260 billion barrels. The United States consumes about seven billion barrels a year. Mr. Vinegar works out of a small Jerusalem office for a startup called Israel Energy Initiatives (IEI). Until recently he was a chief scientist at Shell in Houston, with a remarkable 266 patents to his name. Many of those patents are connected to his quest to develop “unconventional” energy sources such as shale (a grayish sedimentary rock) that are abundant in North America but pose major technological hurdles and are uneconomical to extract when oil prices are low. Shale is much in the news in the U.S. thanks to discoveries of huge natural-gas resources—estimated at 2,500 trillion cubic feet—in our own shale rock that can be extracted by a newish version of a method called hydraulic fracking. And natural gas is much

Bret Stephens

Letters To The Editor

Drilling for shale oil in Israel. in the news in Israel, thanks to the discovery last year of a major offshore deposit estimated at around 16 trillion cubic feet. Yet shale does not only contain natural gas. The U.S. is thought to have 1.5 trillion barrels of shale oil, while China has some 355 billion barrels. Israel ranks third, just ahead of Russia. Most of the U.S. deposit is in Colorado, where Mr. Vinegar spent much of his career perfecting various techniques that involve sinking electric heaters into the ground, warming the shale for as long as three years, and then extracting the oil that’s released, roughly as one would from a regular well. But there’s a problem with the Colorado resource: “In Colorado the aquifer runs right through the oil shale,” says Mr. Vinegar. One advantage of Israel’s shale, he explains, is that the aquifer runs several hundred feet below it. A second advantage is the richness of the deposits, which he believes yield between 23 and 25 gallons of oil per ton of shale. A third is Mr. Vinegar’s estimate of $34-$40 per barrel cost of commercial production—roughly comparable to the cost of deepwater drilling today. Mr. Vinegar thought there would be one more advantage to working on shale extraction in Is-

Notable
Quotable William H. Gross of PIMCO in the firm’s April 2011 “Investment Outlook”: That adorable skunk, Pepé Le Pew, is one of my wife Sue’s favorite cartoon characters. There’s something affable, even romantic about him as he seeks to woo his female companions with a French accent and promises of a skunk bungalow and bedrooms full of little Pepés in future years. It’s easy to love a skunk—but only on the silver screen, and if in real life—at a considerable distance. I think of Congress that way. Every two or six years, they dress up in full makeup, pretending to be the change, vowing to correct what hasn’t been corrected, promising discipline as opposed to profligate overspending and undertaxation, and striving to balance the budget when all others have failed. Oooh Pepé—Mon Chéri! But don’t believe them—hold your nose instead! . . . I speak, of course, to the bud-

get deficit and Washington’s inability to recognize the intractable: 75% of the budget is non-discretionary and entitlement based. Without attacking entitlements—Medicare, Medicaid and Social Security—we are smelling $1 trillion deficits as far as the nose can sniff. Once dominated by defense spending, these three categories now account for 44% of total Federal spending and are steadily rising. . . . [A]fter defense and interest payments on the national debt are excluded, remaining discretionary expenses for education, infrastructure, agriculture and housing constitute at most 25% of the 2011 fiscal year federal spending budget of $4 trillion. You could eliminate it all and still wind up with a deficit of nearly $700 billion! So come on you stinkers; enough of the Pepé Le Pew romance and promises. Entitlement spending is where the money is and you need to reform it.

rael: Less bureaucracy, more cando. But nimbyism, the permitting rigmarole, and a powerful environmental lobby are facts of life in Israel too, and Benjamin Netanyahu’s government hasn’t helped matters by jacking up taxes on energy companies now that sizable resources have been discovered. For now, all this is far afield for IEI, which is still waiting on a permit for its first pilot project. Beyond that lie years of lead time and billions in investment to bring the project to commercial scale. The history of oil prospecting, even when the technology is right and the resources proven, abounds with failures. This could well be one of them (a point I hasten to underscore since Rupert Murdoch, chairman of this newspaper, has a 0.5% stake in Genie Energy, IEI’s U.S.-based parent company.) But regardless of whether IEI is destined for rags or riches, its efforts raise important issues about both Israel’s and the world’s energy future. Israel currently imports nearly all of its oil by tanker, mainly from Russia and the former Soviet republics. Those imports were abruptly cut off during the 2006 war with Hezbollah, which brought the country perilously close to running out of fuel. More recently, there has been talk in Egypt of raising the price on its natural-gas supplies to Israel and perhaps cutting it off entirely. Energy independence may be a chimera for the U.S. For Israel, some measure of independence is a strategic imperative. As for the rest of the world, it is steadily depleting its reserves of conventional oil even as demand continues to skyrocket. Biodiesels and other enviro-fads will not make up the shortfall. But unconventionals could, provided we get over our hypochondria about exploiting them and our illusions about downside-free sources of energy. At least there’s no question about where the shale deposits lie. There would be much surprise—and some justice—if Israel were someday to become the Mideast’s newest energy giant. Then again, who would have predicted a decade ago that Iraq would be the Arab world’s first democracy? The Middle East always retains its capacity to shock—and sometimes even delight.

Write to [email protected]

AS IA

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

Dow Jones and Company © 2011 Dow Jones & Company. All Rights Reserved

jk

THE WALL STREET JOURNAL.

Wednesday, April 6, 2011

13

**

OPINION

The GOP Path to Prosperity BY PAUL D. RYAN The U.S. Congress is currently embroiled in a funding fight over how much to spend on less than one-fifth of the federal budget for the next six months. Whether we cut $33 billion or $61 billion—that is, whether we shave 2% or 4% off of this year’s deficit—is important. It’s a sign that the election did in fact change the debate in Washington from how much we should spend to how much spending we should cut. The new House Republican majority is introducing a budget that moves the debate from billions in spending cuts to trillions. America is facing a defining moment. The threat posed by our monumental debt will damage our country in profound ways, unless we act. No one person or party is responsible for the looming crisis. Yet the facts are clear: Since President Obama took office, our problems have gotten worse. Major spending increases have failed to deliver promised jobs. The safety net for the poor is coming apart at the seams. Government health and retirement programs are growing at unsustainable rates. The new health-care law is a fiscal train wreck. And a complex, inefficient tax code is holding back American families and businesses. The president’s recent budget proposal would accelerate America’s descent into a debt crisis. It doubles debt held by the public by the end of his first term and triples it by 2021. It imposes $1.5 trillion in new taxes, with spending that never falls below 23% of the economy. His budget permanently enlarges the size of government. It offers no reforms to save government health and retirement programs, and no leadership. Our budget, which we call The Path to Prosperity, is very different. For starters, it cuts $6.2 trillion in spending from the presi-

A Choice of Two Futures Debt as a percentage of GDP 900% 800 700 Status Quo 600 500 400 300 200 World War II

Path to Prosperity (FY2012 Budget)

100 0 1940 1950 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050 2060 2070 2080

dent’s budget over the next 10 years, reduces the debt as a percentage of the economy, and puts the nation on a path to actually pay off our national debt. Our proposal brings federal spending to below 20% of gross domestic product (GDP), consistent with the postwar average, and reduces deficits by $4.4 trillion. A study just released by the Heritage Center for Data Analysis projects that The Path to Prosperity will help create nearly one million new private-sector jobs next year, bring the unemployment rate down to 4% by 2015, and result in 2.5 million additional private-sector jobs in the last year of the decade. It spurs economic growth, with $1.5 trillion in additional real GDP over the decade. According to Heritage’s analysis, it would result in $1.1 trillion in higher wages and an average of $1,000 in additional family income each year. Here are its major components: • Reducing spending: This bud-

get proposes to bring spending on domestic government agencies to below 2008 levels, and it freezes this category of spending for five years. The savings proposals are numerous, and include reforming agricultural subsidies, shrinking the federal work force through a sensible attrition policy, and accepting Defense Secretary Robert Gates’s plan to target inefficiencies at the Pentagon. • Welfare reform: This budget will build upon the historic welfare reforms of the late 1990s by converting the federal share of Medicaid spending into a block grant that lets states create a range of options and gives Medicaid patients access to better care. It proposes similar reforms to the foodstamp program. Finally, this budget recognizes that the best welfare program is one that ends with a job—it consolidates dozens of duplicative job-training programs into more accessible, accountable career scholarships that will better serve

people looking for work. As we strengthen and improve welfare programs for those who need them, we eliminate welfare for those who don’t. Our budget targets corporate welfare, starting by ending the conservatorship of Fannie Mae and Freddie Mac that is costing taxpayers hundreds of billions of dollars. It gets rid of the permanent Wall Street bailout authority that Congress created last year. And it rolls back expensive handouts for uncompetitive sources of energy, calling instead for a free and open marketplace for energy development, innovation and exploration. • Health and retirement security: This budget’s reforms will protect health and retirement security. This starts with saving Medicare. The open-ended, blank-check nature of the Medicare subsidy threatens the solvency of this critical program and creates inexcusable levels of waste. This budget takes action where others have ducked. But because government should not force people to reorganize their lives, its reforms will not affect those in or near retirement in any way. Starting in 2022, new Medicare beneficiaries will be enrolled in the same kind of health-care program that members of Congress enjoy. Future Medicare recipients will be able to choose a plan that works best for them from a list of guaranteed coverage options. This is not a voucher program but rather a premium-support model. A Medicare premium-support payment would be paid, by Medicare, to the plan chosen by the beneficiary, subsidizing its cost. In addition, Medicare will provide increased assistance for lower-income beneficiaries and those with greater health risks. We must also reform Social Security to prevent severe cuts to future benefits. This budget forces policy makers to work together to enact common-sense reforms. The

goal of this proposal is to save Social Security for current retirees and strengthen it for future generations by building upon ideas offered by the president’s bipartisan fiscal commission. • Budget enforcement: This budget recognizes that it is not enough to change how much government spends. We must also change how government spends. It proposes budget-process reforms—including real, enforceable caps on spending—to make sure government spends and taxes only as much as it needs to fulfill its constitutionally prescribed roles. • Tax reform: This budget would focus on growth by reforming the nation’s outdated tax code, consolidating brackets, lowering tax rates, and assuming top individual and corporate rates of 25%. It maintains a revenue-neutral approach by clearing out a burdensome tangle of deductions and loopholes that distort economic activity and leave some corporations paying no income taxes at all. This is America’s moment to advance a plan for prosperity. Our budget offers the nation a model of government that is guided by the timeless principles of the American idea: free-market democracy, open competition, a robust private sector bound by rules of honesty and fairness, a secure safety net, and equal opportunity for all under a limited constitutional government of popular consent. We can reform government so that people don’t have to reorient their lives for less. We can grow our economy, promote opportunity, and encourage upward mobility. This budget is the new House majority’s answer to history’s call. It is now up to all of us to keep America exceptional.

Mr. Ryan, a Republican, represents Wisconsin’s first congressional district and serves as chairman of the House Budget Committee.

Obama’s Half-Rumsfeld in Libya BY GEORGE MELLOAN Defense Secretary Robert Gates promised Congress last week that the U.S. will put no “boots on the ground” in Libya to enforce President Barack Obama’s edict that Moammar Gadhafi must step down. Yet it has been leaked that CIA operatives are on the ground in Libya aiding efforts by the eastern tribes to unseat Gadhafi. Maybe there’s a distinction between boots and whatever CIA people wear on their feet. This seeming contradiction is rather typical of the confusion the administration has been sowing as it strives to formulate a policy towards the uprisings in the Middle East. But if the CIA is indeed helping the Libyan rebels—a report Mr. Gates declined to address—there may be a shred of policy at work. Whether the administration is prepared to expand that shred into something more robust is still a question. President George W. Bush and Defense Secretary Donald Rumsfeld went to considerable pains to formulate strategy for fighting un-

conventional wars. To do so, they had to overcome resistance from their generals, whose idea of boots on the ground is the deployment of thousands of troops and heavy armor. But after 9/11, there was no time for that. An outraged America demanded that the president retaliate quickly against al Qaeda terrorists and their Taliban enablers in Afghanistan. Assembling an invasion force, as the U.S. Army first proposed, would have taken months. So Messrs. Bush and Rumsfeld, and CIA Director George Tenet, deployed CIA agents and highly trained special forces “Ateams” to work with anti-Taliban tribes. The results were dramatic. The Americans provided arms and supplies. More importantly, they guided highly effective air strikes on the Taliban from U.S. bombers and gunships. The first A-team entered Afghanistan on Oct. 19, 2001, less than six weeks after 9/11. Only two months later they had driven the Taliban out of every major Afghan city, including Kabul, the nation’s capital. By September 2004, the Afghans were able to hold a

successful national election. During the interim between the ouster of the Taliban and the establishment of democratic rule, the U.S. never had more than 15,000 troops on the ground in Afghanistan. Messrs. Rumsfeld and Bush

CIA agents helped Afghans remove the Taliban from power. They can help the rebels oust Gadhafi as well. made it very clear to Hamid Karzai that he could not threaten the use of U.S. troops against other tribal leaders. He was told to solve such problems through negotiation and the judicious distribution of patronage. He did that, and challenges from other tribal leaders subsided. Negotiation is a traditional way to settle differences in tribal cultures. Afghanistan has had setbacks since. But it is now a U.S. ally rather than enemy, and it is no longer a base for attacks on America.

Libya is a different kind of place. It is lightly populated and its hinterland is mostly infertile desert. But there are similarities as well. Like Afghanistan, it is tribal. And there is a semblance, if recent disclosures are true, of the strategy the U.S. used in Afghanistan. The British reportedly are supplying the special forces working with the CIA, an exercise in bilateralism that may have limitations. The British and French also are conducting some of the air attacks. But the rebellious tribes would have a lot more bargaining power over the tribes supporting Gadhafi if the pro-Gadhafi tribes were convinced that the Western powers were serious in their efforts to dislodge Gadhafi. Instead, Mr. Obama has stopped U.S. air attacks, leaving that chore to NATO allies, so there seems to be very little of the dedication that brought the Bush administration such immediate results in Afghanistan. Clearly the American president is trying to have it both ways, letting it be known that he is doing something to aid the rebels while trying not to publicly mention the

key role of the CIA. The CIA has been anathema to the left wing of his party since the Vietnam era. In the mid-1970s, the Church Committee, chaired by Sen. Frank Church (D., Idaho), succeeded in partly emasculating the agency’s ability to conduct covert operations in foreign countries. After 9/11, it became evident that the world was a lot more dangerous than Mr. Church may have thought and that a more effective CIA might have forestalled a tragedy. Mr. Bush gave it a daunting assignment in Afghanistan, and its field operators performed well. Today, Mr. Obama has publicly declared that Gadhafi has to go. He has the power and a tested strategy for making that happen at a low cost in American treasure and lives. It would be a shame if domestic political considerations are staying his hand.

Mr. Melloan, a former columnist and deputy editor of the Journal editorial page, is author of “The Great Money Binge: Spending Our Way to Socialism” (Simon & Schuster, 2009).

14

* *

THE WALL STREET JOURNAL.

Wednesday, April 6, 2011

IN DEPTH

Vivek M.for the Wall Street Journal

Job applicants at 24/7, which says only three of 100 are qualified. In the nation that made offshoring a household word, 24/7 finds itself so short of talent that it is having to offshore.

India graduates millions, but too few are fit to hire Executives say schools are hampered by bureaucracy and a focus on rote learning rather than critical thinking BY GEETA ANAND Bangalore, India

C

ALL-CENTER company 24/7 Customer Pvt. Ltd. is desperate to find new recruits who can answer questions by phone and email. It wants to hire 3,000 people this year. Yet in this country of 1.2 billion people, that is beginning to look like an impossible goal. So few of the high school and college graduates who come through the door can communicate effectively in English, and so many lack a grasp of educational basics such as reading comprehension, that the company can hire just three out of every 100 applicants. India projects an image of a nation churning out hundreds of thousands of students every year who are well educated, a looming threat to the better-paid middleclass workers of the West. Their abilities in math have been cited by President Barack Obama as a reason why the U.S. is facing competitive challenges. Yet 24/7 Customer’s experience tells a very different story. Its increasing difficulty finding competent employees in India has forced the company to expand its search to the Philippines and Nicaragua. Most of its

The Journal is examining the threats to, and limits of, India’s economic ascent. 8,000 employees are now based outside of India. In the nation that made offshoring a household word, 24/7 finds itself so short of talent that it is having to offshore. “With India’s population size, it should be so much easier to find employees,” says S. Nagarajan, founder of the company. “Instead, we’re scouring every nook and cranny.” India’s economic expansion was supposed to create opportunities for millions to rise out of poverty, get an education and land good jobs. But as India liberalized its economy starting in 1991 after decades of socialism, it failed to reform its heavily regulated education system. Business executives say schools are hampered by overbearing bureaucracy and a focus on rote learning rather than critical thinking and comprehension. Government keeps tuition low, which makes schools accessible to more students, but also keeps

teacher salaries and budgets low. What’s more, say educators and business leaders, the curriculum in most places is outdated and disconnected from the real world. “If you pay peanuts, you get monkeys,” says Vijay Thadani, chief executive of New Delhi-based NIIT Ltd. India, a recruitment firm that also runs job-training programs for college graduates lacking the skills to land good jobs. Muddying the picture is that on the surface, India appears to have met the demand for more educated workers with a quantum leap in graduates. Engineering colleges in India now have seats for 1.5 million students, nearly four times the 390,000 available in 2000, according to the National Association of Software and Services Companies, a trade group. But 75% of technical graduates and more than 85% of general graduates are unemployable by India’s high-growth global industries, including information technology and call centers, according to results from assessment tests administered by the group. Another survey, conducted annually by Pratham, a nongovernmental organization that aims to improve education for the poor, looked at grade-school performance

Falling behind Percentage of fifth graders in India who read on a second-grade level 60%

58

56

54

52

50 2007

’08

’09

Source: Pratham’s Annual Status of Education Report

’10

THE WALL STREET JOURNAL.

Wednesday, April 6, 2011

15

IN DEPTH at 13,000 schools across India. It found that about half of the country’s fifth graders can’t read at a second-grade level. At stake is India’s ability to sustain growth—its economy is projected to expand 9% this year—while maintaining its advantages as a low-cost place to do business. The challenge is especially pressing given the country’s more youthful population than the U.S., Europe and China. More than half of India’s population is under the age of 25, and one million people a month are expected to seek to join the labor force here over the next decade, the Indian government estimates. The fear is that if these young people aren’t trained well enough to participate in the country’s glittering new economy, they pose a potential threat to India’s stability. “Economic reforms are not about goofy rich guys buying Mercedes cars,” says Manish Sabharwal, managing director of Teamlease Services Ltd., an employee recruitment and training firm in Bangalore. “Twenty years of reforms are worth nothing if we can’t get our kids into jobs.” Yet even as the government and business leaders acknowledge the labor shortage, educational reforms are a long way from becoming law. A bill that gives schools more autonomy to design their own curriculum, for example, is expected to be introduced in the cabinet in the next few weeks, and in parliament later this year. “I was not prepared at all to get a job,” says Pradeep Singh, 23, who graduated last year from RKDF College of Engineering, one of the city of Bhopal’s oldest engineering schools. He has been on five job interviews—none of which led to work. To make himself more attractive to potential em-

ployers, he has enrolled in a five-monthlong computer programming course run by NIIT. Mr. Singh and several other engineering graduates said they learned quickly that they needn’t bother to go to some classes. “The faculty take it very casually, and the students take it very casually, like they’ve all agreed not to be bothered too much,” Mr. Singh says. He says he routinely missed a couple of days of classes a week, and it took just three or four days of cramming from the textbook at the end of the semester to pass the exams. Others said cheating, often in collaboration with test graders, is rampant. Deepak Sharma, 26, failed several exams when he was enrolled at a top engineering college outside of Delhi, until he finally figured out the trick: Writing his mobile number on the exam paper. That’s what he did for a theory-of-computation exam, and shortly after, he says the examiner called him and offered to pass him and his friends if they paid 10,000 rupees each, about $250. He and four friends pulled together the money, and they all passed the test. “I feel almost 99% certain that if I didn’t pay the money, I would have failed the exam again,” says Mr. Sharma. BC Nakra, Pro Vice Chancellor of ITM University, where Mr. Sharma studied, said in an interview that there is no cheating at his school, and that if anyone were spotted cheating in this way, he would be “behind bars.” He said he had read about a case or two in the newspaper, and in the “rarest of the rare cases, it might happen somewhere, and if you blow [it] out of all proportions, it effects the entire community.” The exam-

iner couldn’t be located for comment. Cheating aside, the Indian education system needs to change its entire orientation to focus on learning, says Saurabh Govil, senior vice president in human resources at Wipro Technologies. Wipro, India’s third largest software exporter by sales, says it has struggled to find skilled workers. The problem, says Mr. Govil, is immense: “How are you able to change the mind-set that knowledge is more than a stamp?” At 24/7 Customer’s recruiting center on a recent afternoon, 40 people were filling out forms in an interior lobby filled with bucket seats. In a glass-walled conference room, a human-resources executive interviewed a group of seven applicants. Six were recent college graduates, and one said he was enrolled in a correspondence degree program. One by one, they delivered biographical monologues in halting English. The interviewer interrupted one young man who spoke so fast, it was hard to tell what he was saying. The young man was instructed to compose himself and start from the beginning. He tried again, speaking just as fast, and was rejected after the first round. Another applicant, Rajan Kumar, said he earned a bachelor’s degree in engineering a couple of years ago. His hobby is watching cricket, he said, and his strength is punctuality. The interviewer, noting his engineering degree, asked why he isn’t trying to get a job in a technical field, to which he replied: “Right now, I’m here.” This explanation was judged inadequate, and Mr. Kumar was eliminated, too. A 22-year-old man named Chaudhury Laxmikant Dash, who graduated last year, also with a bachelor’s in engineering, said

Left back Among the U.S. and the four countries that are the fast-developing BRIC nations, India has the highest percentage of young people, but relatively few enrolled in college. POPULATION

2009 population 141,850,000 people

193,733,795

14.1%

307,007,000

17.3%

1,155,347,678

14.1%

1,331,460,000

19.3%

16.9%

Percentage of population aged 15–24 (2000-2010)

SCHOOLS Number of universities ranked in the top 500 in the world, 2010

2

2

6

22

154

ENROLLMENT

The number of people enrolled in a college or university per 100 college-aged people, 2007

75

30

Sources: United Nations (percentage of people 15-24 years old); Center for World-Class Universities and the Institute of Higher Education of Shanghai Jiao Tong University (university rankings); World Bank (all others)

82

13

22

he’s a game-show winner whose hobby is international travel. But when probed by the interviewer, he conceded, “Until now I have not traveled.” Still, he made it through the first-round interview, along with two others, a woman and a man who filled out his application with just one name, Robinson. For their next challenge, they had to type 25 words a minute. The woman typed a page only to learn her pace was too slow at 18 words a minute. Mr. Dash, sweating and hunched over, couldn’t get his score high enough, despite two attempts. Only Mr. Robinson moved on to the third part of the test, featuring a single paragraph about nuclear war followed by three multiple-choice questions. Mr. Robinson stared at the screen, immobilized. With his failure to pass the comprehension section, the last of the original group of applicants was eliminated. The average graduate’s “ability to comprehend and converse is very low,” says Satya Sai Sylada, 24/7 Customer’s head of hiring for India. “That’s the biggest challenge we face.” Indeed, demand for skilled labor continues to grow. Tata Consultancy Services, part of the Tata Group, expects to hire 65,000 people this year, up from 38,000 last year and 700 in 1986. Trying to bridge the widening chasm between job requirements and the skills of graduates, Tata has extended its internal training program. It puts fresh graduates through 72 days of training, double the duration in 1986, says Tata chief executive N. Chandrasekaran. Tata has a special campus in south India where it trains 9,000 recruits at a time, and has plans to bump that up to 10,000. Wipro runs an even longer, 90-day training program to address what Mr. Govil, the human-resources executive, calls the “inherent inadequacies” in Indian engineering education. The company can train 5,000 employees at once. Both companies sent teams of employees to India’s approximately 3,000 engineering colleges to assess the quality of each before they decided where to focus their campus recruiting efforts. Tata says 300 of the schools made the cut; for Wipro, only 100 did. Tata has also begun recruiting and training liberal-arts students with no engineering background but who want secure jobs. And Wipro has set up a foundation that spends $4 million annually to train teachers. Participants attend week-long workshops and then get follow-up online mentoring. Some say that where they used to spend a third of class time with their backs to students, drawing diagrams on the blackboard, they now engage students in discussion and use audiovisual props. “Before, I didn’t take the students into consideration,” says Vishal Nitnaware, a senior lecturer in mechanical engineering at SVPM College of Engineering in rural Maharashtra state. Now, he says, he tries to engage them, so they’re less nervous to speak up and participate in discussions. This kind of teaching might have helped D.H. Shivanand, 25, the son of farmers from a village outside of Bangalore. He just finished a master’s degree in business administration—in English—from one of Bangalore’s top colleges. His father borrowed the $4,500 tuition from a small lending agency. Now, almost a year after graduating, Mr. Shivanand is still looking for an entry-level finance job. Tata and IBM Corp., among dozens of other firms, turned him down, he says, after he repeatedly failed to answer questions correctly in the job interviews. He says he actually knew the answers but froze because he got nervous, so he’s now taking a course to improve his confidence, interviewing skills and spoken English. His family is again pitching in, paying 6,000 rupees a month for his rent, or about $130, plus 1,500 rupees for the course, or $33. “My family has invested so much money in my education, and they don’t understand why I am still not finding a job,” says Mr. Shivanand. “They are hoping very, very much that I get a job soon, so after all of their investment, I will finally support them.” —Poh Si Teng and Arlene Chang contributed to this article.

16

THE WALL STREET JOURNAL.

Wednesday, April 6, 2011

Special Advertising Section

ExEcutivE DigEst ADJUSTING TO A RAPIDLY EVOLVING ENVIRONMENT GETTY IMAGES/Jan Erik Posth

Education and adaptability are vital in today’s world Companies count on innovation more than ever to maintain a competitive advantage

I

n the last century, you got an education, then you got a job. But the future isn’t going to be so clear-cut. Jobs appear in new sectors while other sectors shrivel away as markets change and technology evolves. “In that kind of situation, knowledge and vocational skills could be more likely to get outdated more quickly than in the past,” says Hiro Izushi, senior lecturer in innovation at Aston Business School in Birmingham, U.K., and director of the Centre for International Competitiveness. “If you move from one sector to another, there’s a good chance that what you learned might not be applicable to the sector you’re moving to.” That means workers at all levels need to keep learning, whether to keep up with the changes or to move to emerging opportunities as new sectors develop. “As we move to a knowledge economy, the number of jobs where people can simply turn up and be told how to do the job and be well paid for it is diminishing rapidly,” says John Howkins, author of the book, “The Creative Economy,” and chairman of BOP Consulting in London. “We need now to go on learning throughout our lives,” he adds. The basics like math and reading continue to be important, but the ubiquity of technology means we no longer need to memorize data—encyclopedic information is but a click away. Instead, we need the ability to sort through mountains of information and decide which bits are important. And we need exposure to several disciplines in order to have not just the creativity to come up with new ideas but also the ability to see how to translate something from the drawing board into an actual product or service. We also need interpersonal skills to work with collaborators or to lead teams.

1. Analyze this Even if we no longer really need to memorize vast amounts of information, we are faced in our professional lives with ever greater amounts of information. What we need to learn is how to sort it out—discern the good from the bad, prioritize, synthesize, analyze. One thing universities are good at is helping students “foster a critical eye about knowledge, and that is transferable across any sector,” says the Aston Business School ‘s Dr. Izushi. “In any sector you are likely to be in a situation where you have to make a quick decision with a limited amount of knowledge, or else you are overloaded with information and have to decide what is important. Then it is important that you have the ability to judge the knowledge.” Dr. Izushi sees tension among MBA students who say education is not meeting their needs. They want ready-made knowledge applicable to their specific situations. But in MBA programs—and education in general—the process of learning is more important than memorizing specific pieces of knowledge, he says. “We have to build the ability to learn in the first instance,” says Robert Huggins, professor of management and policy at the Cardiff School of Management at the University of Wales and director of the Centre for International Competitiveness. Skills that are gaining importance include enterprise development, leadership, management, and knowing how to access information, he says, adding, “In the end, it’s going to become just a prerequisite to have this high-level work force with these high-level, adaptable skills.”

2. Soft skills Companies count on innovation more than ever to maintain a competitive advantage. Innovation requires three ingredients: intellectual capital that can be converted into something valuable; financial capital to fund the process; and

GETTY IMAGES/Gautam Narang

By Catherine Bolgar

human capital to sustain the entrepreneurial process, says John Kao, author of the book “Innovation Nation: How America Is Losing Its Innovation Edge, Why It Matters and What We Can Do to Get It Back,” and chairman of the Institute for Large-Scale Innovation, a San Francisco-based nongovernmental organization that promotes societal cooperation for innovation. That raises the profile for “soft” people skills. “Mentoring and collaboration are much more important in a creative economy than in one based on fixed goods, output and repetition,” says Mr. Howkins of BOP Consulting. Another soft skill rising in stature is entrepreneurship. It’s not just for people who want to create their own companies. Established corporations are seeking more people who bring an entrepreneurial spirit, says Prof. Huggins of Cardiff, and universities are stepping up their offerings. He points to the University of Waterloo, in Ontario, Canada, which established a center for business, entrepreneurship and technology. And FedEx runs a program in Asia where the spirit of entrepreneurship is nurtured in the younger generation of

potential business leaders. “One of our focus areas is to connect education with the real world by inspiring participation in global trade,” says David L. Cunningham Jr., president, Asia-Pacific, FedEx Express. “Based on a mentoring and coaching model, we have been running this program with Junior Achievement successfully for five years now. By simulating the marketing of products or services in a global environment, the program reinforces critical thinking, leadership among other life-long skills that will equip participants for the challenges and opportunities throughout their lives.”

3. Hybrid education The education of the future is likely to be a hybrid of specific technical expertise complemented by a grounding in entrepreneurship or management. Besides the University of Waterloo, the U.K. National Council for Graduate Education has invested in programs to match mainstream science and engineering skills with entrepreneurial education to create a more creative work force of the future, Prof. Huggins says. “If we want innovation, it’s no longer just about training scientists, it’s about understanding the whole value chain,” says Dr. Kao of the Institute for LargeScale Innovation. “There’s almost an integrated set of skills that needs to be represented in the process. In the past, we segmented innovation. But there are lots of ‘hyphenated’ people now who can see across traditional boundaries.” As more developing countries pour resources into improving their educational systems, the developed world has to count on these special hybrids to stay a step ahead. “Not only is innovation becoming more important, but it’s becoming more global,” says John Boudreau, professor of management and organization at the Marshall School of Business at the University of Southern California in Los Angeles and author of the book, “Beyond HR: the New Science of Human Capital.”

Wednesday, April 6, 2011

THE WALL STREET JOURNAL.

17

18

THE WALL STREET JOURNAL.

SGX dealt blow in bid for ASX Continued from first page tion but that Mr. Swan’s views need to be taken “very seriously.” He said its cash-and-stock offer still stands. Shares of Singapore Exchange, known as SGX, jumped 4% to 8.33 Singaporean dollars (US$6.61), while ASX fell 3.3% to A$33.70 (US$34.92) in Sydney, after hitting a six-month intraday low of A$33.35. SGX’s bid to acquire all of ASX would have created the world’s fifth-largest listed exchange by market capitalization of the combined company at the time of the deal announcement. It is among the boldest steps toward exchange consolidation in Asia, which lags behind Europe and the U.S. in regional tie-ups. A setback on the Australian deal could prompt SGX to consider tie-ups with other exchanges, though opportunities could be limited. “SGX won’t be jumping into another deal anytime soon—it would smack of desperation,” Nomura analyst Anand Pathmakanthan said. “They will have to focus on organic growth options.” The flurry of consolidation comes as exchanges are being challenged by new electronic rivals that pose a threat to their traditionally strong roles in their home markets. For SGX, the ASX deal would significantly bolster its presence in natural resources, given the Australian exchange’s heavy weighting in mining and energy stocks. It would also make a greater competitive threat to the fast-growing Hong Kong Stock Exchange, which has been the most sought-after exchange among foreign companies wanting to tap the Asia growth story, and the upgraded Tokyo Stock Exchange. But Asian consolidation has been stymied by national pride, with regional governments loath to sell to a rival, market watchers say. Meanwhile, global rivals are getting bigger. Deutsche Börse AG and NYSE Euronext are in advanced talks for a merger that could create the world’s largest financial exchange, with dominant positions in trading derivatives and equities on

both sides of the Atlantic. More recently, Nasdaq OMX Group Inc. and IntercontinentalExchange Inc. joined forces for a rival bid for NYSE Euronext.. London Stock Exchange Group and Toronto-based TMX Group are also in merger talks that would create a trans-Atlantic group heavy on resource and cleanenergy listings. SGX has taken steps to boost its trading volumes and remain an attractive destination for foreign listings. These include allowing trading of Asian-listed American Depository Receipts on a new platform of SGX, trading of corporate bonds on the SGX for retail investors and the introduction of dark pools—an electronic trading venue that allows money managers to trade large blocks of shares anonymously. Mr. Bocker declined to comment on whether he will throw his hat in the ring of exchange consolidation in the West. “The global exchange industry continues to change and consolidate, as we have seen from recent announcements. These developments clearly validate the rationale behind the proposed merger between SGX and ASX,” he said. By not rejecting the offer completely, the Australian government is treading a fine line between domestic political concerns and a desire to be seen as an open market welcoming of foreign investment. But politics could make it harder for the government to convince investors that Australia is a suitable destination for their money. SGX had already made a number of concessions after initial talks with regulators, including agreeing to a quota on the number of Australians sitting on the merged entities’ board. “As an ASX shareholder, it’s disappointing,” said John Sevior, head of equities at fund manager Perpetual Investments. Some Australian lawmakers say the deal would erode national sovereignty and Sydney’s role as a financial hub. Under Australian law, no single shareholder can own more than 15% of the ASX and any regulation to lift that threshold must be

Wednesday, April 6, 2011

FROM PAGE ONE Deal imperiled | History of the proposed takeover A$42

Daily share prices of ASX Tuesday’s close: A$33.7, down 3.3%

40 38 36 34 32

1 2

S$11

boosts commodity prices and causes funds to flow into faster-growing emerging markets. South Korea, Thailand, Indonesia and the Philippines have already reported consumer-price rises for March, and all were either at post-financial-crisis highs or near them, signaling regionwide pressure to continue to raise interest rates. Vietnam on Tuesday said it will raise the minimum wage for public servants and employees of state companies by 13.7% from May, a moved designed to help employees cope with rising prices but one that economists said would fuel inflation further. In addition to raising interest rates, China has also sharply increased the share of deposits that lenders must keep on reserve with the central bank in an effort to reduce the flow of credit after two years of huge loan growth. Authorities have also pressured companies,

6

7

Daily share prices of Singapore Exchange Tuesday’s close: S$8.33, up 4.0%

10 9 8 7

October 2010

November

2010 1 Oct. 25: ASX and

Singapore Exchange disclose deal for the Singapore company to offer A$8.4 billion for all of its Australian counterpart. 2 Oct. 28: Tokyo Stock

Exchange President Atsushi Saito criticizes deal out of concern

December

January 2011

that it will dilute TSE's 5% stake in Singapore Exchange. 3 Dec. 15: Australian

competition watchdog clears the merger after ruling that it's unlikely to deter competition.

February

March

structure to address Australian governance and national-interest concerns. 5 March 10: SGX officials

7 April 5: Australia's

government says the country's Foreign Investment Review Board believes the deal isn't in the national interest.

6 March 15: Opposition

2011 4 Feb. 15: SGX and ASX

unveil a revised board

April

facing intense parliamentary scrutiny because of its unequal nature.

visit Australia to push the merger with ASX. lawmaker Malcolm Turnbull tells Dow Jones Newswires the deal is

Source: Dow Jones Newswires Photo: Bloomberg News

The Australia Securities Exchange building in Sydney, considered by both parliamentary bodies in Canberra. The Labor government depends in part on the Greens party, which opposes the deal. Mr. Bocker said Tuesday he had received no feedback from the Australian government requesting changes. “The treasurer will make the final decision—at the time of the final decision we will make our final decision on what we can do and what we can’t do,” he said in a conference

call. He said he expected Mr. Swan’s final word before Monday, the end of the typical initial 30-day review period from Australia’s Foreign Investment Review Board, but that the final decision announcement could be pushed back. The board offers recommendations to Australia’s treasurer, who must approve the deal before it can be completed. Mr. Bocker said the SGX isn’t “aggressively” pursuing other acquisitions and that as a group it re-

China pushes tightening measures Continued from first page fast enough to generate jobs for its huge population. Beijing’s success or failure holds enormous consequences for the global economy because Chinese economic growth is a major driver for corporations and economies that sell consumer goods, such as cars and computers, and commodities, such as steel and copper, to China. Tuesday’s news sent the Australian dollar down against the U.S. dollar on concerns about the impact on demand for Australia’s iron ore and other minerals. Developing economies around the world are battling soaring consumer prices, thanks in part to ultra-low interest rates in developed economies that are trying to keep growth from petering out. Chinese policy makers have argued that loose monetary policy in the U.S. causes imported inflation pressure in China because it

5

4

3

including Unilever PLC, to delay increases in the prices of their food products and consumer staples. Property prices have continued to rise in most major Chinese cities despite a series of measures by central-government regulators to rein them in, including higher down-payment requirements for mortgages and outright bans on buying second or third homes in some cities. Wang Yuanhong, an economist of the State Information Center, a think tank affiliated with China’s economic planning agency, estimated that CPI growth accelerated to 5.2% or 5.3% in March, as price increases spread increasingly to nonfood items. Tuesday’s rate move came because “the country faces very big pressures in curbing inflation and liquidity,” he said. Still, some economists say China may be nearing the end of its tightening efforts. “We think rates may

now have peaked,” economist Mark Williams from consulting firm Capital Economics said in a note, pointing to data he said indicated a slowdown in economic activity and inflation leveling out. In a survey conducted in late March, all 10 economists polled by Dow Jones Newswires expected a fresh interest-rate move by the end of June, with about half predicting there would also be another quarter-point increase afterward. Tuesday’s increase fell on the tomb-sweeping festival holiday, marking the latest in a string of oddly timed rate announcements. The last two rate moves were on Feb. 8, the final day of the weeklong Lunar New Year holiday; and Dec. 25, Christmas Day, which isn’t an official holiday in China. Goldman Sachs economist Yu Song said he isn’t predicting another increase, but if the central

mained in a very strong position with a solid franchise. A rejection by Mr. Swan would be only the second time a treasurer has squelched a deal directly, said Justin Smith, a partner with law firm Blake Dawson in Melbourne. The only previous rejection by Australia’s treasurer was in 2001, when then-Treasurer Peter Costello blocked Royal Dutch Shell PLC’s attempted takeover of Woodside Petroleum Ltd. —P.R. Venkat and David Fickling contributed to this article.

Playing catch-up Despite four interest-rate increases since October, Chinese depositors are getting returns far lower than inflation. CPI, year on year

5% 4 3 2

One-year deposit rate

1 0 2010

'11

Source: People’s Bank of China (rate); National Bureau of Statistics

bank were to raise interest rates again during the next public holiday, which starts May 1, “it probably wouldn’t surprise many people.” —Liu Li in Beijing and Alex Frangos in Hong Kong contributed to this article.

As of 12 p.m. ET

Euro 1.4205 g 0.21%

Yen/US$ ¥84.54 À 0.76%

Yen/A$ ¥87.46 À 0.73%

Oil 108.41 g 0.06%

Gold 1448.70 À 1.15%

China’s Huawei faces opposition as it bids for U.S. Cellular job

10-year Treasury g 12/32 yield 3.474%

Russia aims for $90 billion in foreign investment

BUSINESS& FINANCE. BUSINESS & FINANCE 21

MARKETS 25

THE WALL STREET JOURNAL.

Wednesday, April 6, 2011

3-month Libor 0.29375

**

asia.WSJ.com

Big deals roar back as spirits revive Corporate acquisitions are climbing toward pre-meltdown levels, driven by buyers in developing nations of Asia BY GINA CHON The deals market is back in a big way. Early this week, new mergers popped up across the globe—including Texas Instruments’ $6.5 billion purchase of venerable National Semiconductor, an unsolicited $6.5 billion offer by a state-owned Chinese mining company for a Canadian-Australian firm, KKR’s $2.4 billion deal for a Pfizer Inc. unit, and a consortium of Japanese metal companies paying $680 million for Kentucky-based ARCO Aluminum. Companies around the world had announced $784.1 billion of deals this year through Monday, up from $637.9 billion over the same period in 2010, according to Dealogic. That marks the largest year-to-date deal volume since 2007, when $1.1 trillion of transactions were announced in the same stretch. The deals show a renewed confidence by corporate executives and private-equity firms—many in the developing nations of Asia—who are sitting on $2.4 trillion in cash. With rates held low by the U.S. Federal Reserve, financing rates remain at some of the cheapest on record.

Big days for deals The past week has brought a spate of new mergers and acquisitions around the globe.

Countries involved:

Deal value: Details:

Source: WSJ research

$11.3 billion Nasdaq OMX Group and IntercontinentalExchange launch an $11.3 billion bid for NYSE Euronext, trying to break up the pending deal with Frankfurt’s Deutsche Börse Group.

The deals also reflect the unleashing of years of pent-up demand, as mergers across the globe largely came to a halt at the end of 2007, and worries that inflation might pick up, boosting rates. All this has happened while evidence mounts that mergers often fail. Nonetheless, a change in psyche has pushed corporations to make

$6.5 A unit of China Minmetals Corp. makes an unsolicited offer for Equinox Minerals Ltd. of Australia and Canada.

$6.5 Texas Instruments spends $6.5 billion for National Semiconductor, paying a nearly 80% premium for National shares.

deals—if only for fear that a rival may strike first. Nowhere is that more clear than in the financial-exchanges business, where seven global players—in the U.S., Germany, Canada, England, Singapore, and Australia—are fighting for primacy of the world’s financial markets. “There are certain situations if you don’t act now, you

$0.7 A consortium of Japanese metals companies purchase Kentucky-based ARCO Aluminum from BP.

may lose your chance,” said Bruce Evans, head of Americas M&A at Deutsche Bank. Deal makers may be further encouraged by stockholders, who are tending to reward companies that make acquisitions, pushing shares higher after deal announcements. Typically, shareholders punish companies that make big deals. Shares

of Nasdaq OMX Group, for instance, rose 9% on Friday, after it announced an unsolicited $11.3 billion for NYSE Euronext last week. Chip maker Texas Instruments on Monday announced its all-cash purchase of rival National Semiconductor, bringing together two big makers of devices used in cellphones, industrial equipment and consumer electronics. The price represented a nearly 80% premium over what National shares traded at on Friday. The scope of this year’s deals has been larger than in years past, with three so far valued at more than $15 billion each, compared to four at those heights in all of 2010, said Antonio Weiss, Lazard global head of investment banking. The latest deals are bypassing traditional hot spots in the U.S. and Europe. In nearly a third of all deals last year, at least one party came from an emerging market, Mr. Weiss said. Emerging-markets deals are at their highest ever, says Dealogic, at around $210 billion during 2011. China is now the third-most active nation for cross-border deals, with volume about one-third that of Please turn to page 22

App makers investigated Insurers slow to pay U.S. federal prosecutors in New Jersey are investigating whether numerous smartphone applications illegally obtained or transmitted information about their users without proper disclosures, according to a By Amir Efrati, Scott Thurm and Dionne Searcey person familiar with the matter. The criminal investigation is examining whether the app makers fully described to users the types of data they collected and why they needed the information—such as a user’s location or a unique identifier for the phone—the person familiar with the matter said. Collecting information about a user without notice or authorization could violate a federal computer-fraud law. Online music service Pandora Media Inc. said Monday it received a subpoena related to a federal grand-jury investigation of information-sharing practices by smartphone applications. Pandora disclosed the subpoena, issued “in early 2011,” in a Securities and Exchange Commission filing. The Oakland, Calif., company said it had been informed it is “not a specific target of the investigation.” Pandora said it believed similar subpoenas had been issued “on an industrywide basis to the pub-

lishers of numerous other smartphone applications.” A Pandora spokeswoman declined to comment. The Wall Street Journal reported in December that popular applications on the iPhone and Android mobile phones, including Pandora, transmit information about the phones, their users and their locations to outsiders, including advertising networks. Smartphone apps—of which there are thousands—are software programs that allow, say, a user to read an e-book, play a game, get sports scores or search for a restaurant. The Journal tested 101 apps and found that 56 transmitted the phone’s unique device identifier to other companies without users’ awareness or consent. Forty-seven apps transmitted the phone’s location in some way. Five sent a user’s age, gender and other personal details to outsiders. At the time they were tested, 45 apps didn’t provide privacy policies on their websites or inside the apps. In Pandora’s case, both the Android and iPhone versions of its app transmitted information about a user’s age, gender, and location, as well as unique identifiers for the phone, to various advertising networks. Pandora gathers the age and gender information when a user registers for the service.

Legal experts said the probe is significant because it involves potentially criminal charges that could be applicable to numerous companies. Federal criminal probes of companies for online privacy violations are rare. Anthony Campiti, creator of the Pumpkin Maker iPhone game app, said he received a subpoena requesting information and documents related to his app. Mr. Campiti said he had turned the request over to his lawyer and didn’t recall who had issued the subpoena. “They’re just doing informationgathering to get a better understanding” of the industry, Mr. Campiti said. “We’re not doing anything wrong and neither is anyone else doing anything wrong.” The probe, which likely will continue for months, may not result in any charges. Rebekah Carmichael, a spokeswoman for Paul J. Fishman, the U.S. attorney in New Jersey, declined to comment. Apple Inc. and Google Inc., which oversee digital “stores” that offer mobile applications to users of iPhones, iPads and mobile-devices powered by Google’s Android software, have been asked to provide information about the applications and app makers, the person familiar with the matter said. Please turn to page 22

Japan quake claims BY MARIKO SANCHANTA

TOKYO—Chartis Inc., the general insurance subsidiary of American International Group Inc., has paid 6% of its outstanding claims stemming from the earthquake and tsunami in Japan, underlining the delays confronting claimants who have lost their homes and businesses and are seeking reimbursements. Industry efforts have been hampered by the difficulty of assessing the scale of the damage, said Jose

Hernandez, chief executive of the unit’s Chartis Far East Holdings arm, which covers Japan and South Korea. The March 11 earthquake and ensuing tsunami killed more than 12,000 people as of the most recent count and left more than 200,000 people living in shelters. “We’ve dealt with earthquakes, we’ve dealt with typhoons, but dealing with an earthquake and a tsunami back to back is unprecedented,” Mr. Hernandez said. Please turn to page 27

Bloomberg

Damaged homes in the port city of Ishinomaki, Miyagi prefecture.

20

THE WALL STREET JOURNAL.

* *

Wednesday, April 6, 2011

BUSINESS
FINANCE

Siemens uneasy on Iran sales As its revenue in sanctioned state soars, engineering giant weighs contracts against risks BY DAVID CRAWFORD AND VANESSA FUHRMANS

Booming business Siemens sales in Iran, in millions €800 600 400 200 0 2002 ’03 ’04 ’05 ’06 ’07 ’08 ’09 ’10*

Getty Images

BERLIN—A year after German engineering giant Siemens AG pledged to retreat from Iran under international pressure, it is grappling with a thorny problem: a big jump in revenue in the country. Siemens has kept a promise not to pursue new projects in Iran. But its existing contracts there underscore how international efforts to curb Tehran’s nuclear ambitions have had only limited impact on the state’s ability to draw on the technology and expertise it needs to maintain its broader infrastructure. The company’s Iranian business also shows how Tehran depends on a powerful tool to maintain its commercial ties to foreign companies. The rules that govern international commerce make it tough for Siemens to sever ties with Iran even if it wanted to. “Otherwise we could be accused of breaching contracts and face compensatory damages,” Siemens Chief Executive Peter Löscher said at the company’s shareholder meeting in January. The U.S. State Department and the European Union declined to comment on Siemens’s business in Iran. In Siemens’s fiscal year ended Sept. 30, the company’s revenue in Iran rose to about €680 million ($967 million), up more than 20% from the previous year and more than 50% over a two-year period, said people familiar with the matter. Revenue for this year is still unclear. Siemens hasn’t violated any sanctions imposed by the U.S. and EU. Its business in Iran stems from contracts from years past. Until it ceased bidding for new

People protested Siemens’s activities in Iran before a shareholder meeting in January. The sign reads, ‘Siemens: No aid for the torturing regime Iran!’ orders last year, Siemens vigorously pursued and won billions of dollars in long-term contracts in Iran. In 2006, Siemens won a €294 million deal to supply 150 locomotives for Iran’s railways and several multimillion-euro orders the following two years for gas turbines and compressors to power-plant producers. An assessment by Siemens lawyers put the potential legal penalties for terminating its contracts in Iran at up to €4 billion—if tried before a Swiss arbitration court, as many Siemens contracts in Iran specify, a person familiar with the matter said. Siemens’s decision to continue to fulfill those contracts, however, threatens to complicate the German firm’s U.S. business. During two decades of expansion, the U.S. has become Siemens’s largest single market, accounting for a fifth of its global sales of $103 billion in fiscal 2010. Much of this revenue come

from government contracts, such as a $466 million deal struck last October with Amtrak to supply the government-owned rail operator70 electric locomotives. Other multinationals whose own governments allow them to pursue business in Iran also worry about the threat to their U.S. interests, legal experts say. “It’s a significant issue for some of those companies now deciding to withdraw from Iran,” said David Lorello, a partner in international law firm Steptoe & Johnson who specializes in anticorruption and trade compliance. Other German blue-chip firms such as Thyssen-Krupp AG and Linde AG also have announced plans over the past year to pull out of Iran and wind down contracts there as soon as possible, as political pressure at home and abroad has mounted. But a complete withdrawal

Notes: 2005 data not available; Fiscal years end on Sept. 30th *From people familiar with the numbers Source: the company

could take time. Some U.S. companies also have lingering business ties in Iran via foreign units. Honeywell International Inc., a manufacturer with big aerospace and defense contracting activities, said it committed to stop accepting new Iranian projects last year. “We will complete existing work that was undertaken under pre-existing contracts only to the extent authorized under the new [2010 U.S. sanctions] law,” it said. The EU sanctions are the bloc’s toughest yet, but they still allow for areas of trade with Iran. Even in sanctioning oil and gas-related business, they permit existing contracts. The new U.S. sanctions, which come on top of an already broad trade embargo and other sanctions, widen the federal government’s powers to penalize foreign companies or entities of U.S. companies that do business in Iran. But they, too, grant some exceptions to prior contracts.

Satyam to pay $10 million in settlement with U.S. BY NATHAN BECKER Satyam Computer Services Ltd. agreed to pay $10 million to settle U.S. Securities and Exchange Commission accusations that the Indian technology-outsourcing provider engaged in “a massive accounting fraud.” The regulator accused the company of overstating its revenue, income and cash balances by more

than $1 billion over a five-year span. In addition to the penalty, Satyam agreed to mandatory training of officers and employees on securities laws and accounting principles. The company didn’t admit or deny guilt, the SEC said Tuesday. A Satyam representative didn’t return an email seeking comment. The SEC also sanctioned five India-based affiliates of PricewaterhouseCoopers LLP that served as

auditors for Satyam for “repeatedly conducting deficient audits.” The affiliates agreed to pay a $6 million penalty to settle the SEC’s claims. Pricewaterhouse’s India division said it settled with the government without admitting or denying guilt. “We regret that the Satyam fraud occurred,” said Deepak Kapoor, chairman of Pricewaterhouse’s firms in India. “We have, however, worked hard to learn the lessons of the Sa-

tyam matter. We made significant changes to our audit processes.” Satyam used false invoices and forged bank statements to inflate its cash balances and make it appear “far more profitable” to investors than it actually was, the SEC said. According to the regulator’s complaint, Satyam created more than 6,000 phony invoices and created bank statements to reflect payment of those invoices.

Vedanta to launch Cairn offer BY BIJOU GEORGE AND PRASENJIT BHATTACHARYA MUMBAI—Vedanta Resources PLC said Tuesday that it will launch an open offer for shares in oil explorer Cairn India Ltd., moving a step closer to its goal of entering the Indian energy industry. The open offer, for a stake of up to 20% in Cairn India, is part of London-based miner Vedanta’s plan to eventually acquire as much as 60% of the Cairn Energy PLC unit. The deal was first announced in August and is valued at as much as $9.6 billion. “We will be posting the mails [open offer invitations] in the next one or two days,” Vedanta Chairman Anil Agarwal told reporters on the sidelines of an industry conference. Vedanta is making the offer through its Sesa Goa Ltd. unit. The original offer price of 355 rupees ($8) per Cairn India share won’t be revised, Mr. Agarwal said. The bid price is now lower than Cairn India’s current share price. Cairn India holds stakes in 10 oil and gas blocks in India, including the huge RJ-ON-90/1 oil block at Barmer in western Rajasthan state. The block’s output of 125,000 barrels a day accounts for about 17% of India’s total crude production. Sesa Goa received approval to float the open offer from the Securities and Exchange Board of India, the country’s capital-markets regulator, a few days ago. India’s government has yet to clear the deal, even though Cairn Energy sought federal approval in September. “The government has assured us the decision will come very soon. As far as we are concerned, the deadline [for the government’s decision] is April 15,” Mr. Agarwal said. One of the reasons for a delay in the government’s decision is related to concerns from state-run Oil and Natural Gas Corp., which is Cairn India’s minority partner in the key Rajasthan block but pays the entire royalty to the government. Mr. Agarwal said the government should treat the acquisition of a controlling stake in Cairn India purely as a “corporate transaction” between Cairn Energy and Vedanta, while royalty disputes between ONGC and Cairn India should be “taken up separately.”

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. Activant Solutions ....... 22 Adobe Corp ................... 22 Akamai Technologies ... 25 Alcatel-Lucent .............. 21 American International Group.....................19,27 AMR .............................. 21 Apax Partners...............22

Apple.....................3,19,27 Arco Aluminum.............19 ASX ....................... 1,27,32 AT&T..............................22 Boeing...........................23 BP.............................22,32 Browsium Inc................22 BT Group.......................21 Cairn Energy.................20 CenterPoint Energy......32 Cisco Systems .............. 27 Clean Seas Tuna.............5 Clearwire.......................21 Corio..............................24 Cox Communications....21 Cubist Pharmaceuticals........27 Delta Air Lines.............21 Deutsche Börse ............ 18 Diamond Foods........21,27 DPL................................32 Duke Energy ................. 32 EMC...............................22 Enterprise Inns.............24

Epicor Software............22 Equinox Minerals.....22,27 Expedia..........................27 Extract Resources ........ 27 Galleon Group...............25 GDF Suez ...................... 32 Gecina............................24 Goldman Sachs Group..25 Google..............3,19,25,27 Grameen Bank................6 Hammerson .................. 24 Hawaiian Holdings ....... 21 Hilton Hotels................25 Honda Motor.................27 Honeywell International..............20 Huawei Technologies....21 Hyundai Motor..............27 InterContinentalExchange ................................... 18 KB Home.......................27 Kia Motors....................27 KKR ............................... 19 Linde..............................20

L.M. Ericsson................21 London Stock Exchange Group..........................18 Microsoft...............3,22,27 Minmetals Resources ............. 22,27 Nasdaq OMX............18,19 National Semiconductor.19,22,27 New Castle Partners....25 Nissan Motor................27 NKSJ Holdings..............27 Nokia.............................20 NYSE Euronext........18,19 Oracle............................22 P&G................................27 Pandora Media..............19 PepsiCo..........................21 Pfizer.............................19 Polycom.........................25 Procter & Gamble.........21 Progress Energy ........... 32 ProLogis European Properties..................24

Questcor Pharmaceuticals........27 Siemen..........................20 Singapore Exchange............1,27,32 Southwest Airlines ...... 23 Sumitomo Light Metal Industries...................22 Teva Pharmaceutical Industries...................27 Texas Instruments.....19,22,27 Thyssen-Krupp..............20 T-Mobile USA................22 TMX Group....................18 Tokio Marine Holdings.27 Tokyo Electric Power.................1,27,32 Toyota Motor................27 United Continental Holdings.....................21 U.S. Cellular..................21 Vedanta Resources.......20 Vneshekonombank ....... 25 Walgreen.......................27

People This index lists the names of businesspeople and government regulators who receive significant mention in Today’s Journal. Abe, Masaaki..................5 Agarwal, Anil................20 Ashby, Clifford Walter...5 Binshtok, Max .............. 22 Blankfein, Lloyd............25 Bocker, Magnus..............1 Campiti, Anthony ......... 19 Chandler, Marc..............26 Chatterjee, Aroop.........26 Chiesi, Danielle.............25 Crowley, Matthew........22 Dmitriev, Vladimir........25 Dowd, John...................25 Fishman, Paul J............19

Fukanuma, Yoichi ........... 4 Ginzburg, Sam..............27 Goglia, John..................23 Heller, Matthew ........... 22 Hernandez, Jose...........19 Hirayama, Nagahisa....4,5 Holwell, Richard ........... 25 Hu, Ken ......................... 21 Jacobs, John...................3 Khan, Roomy ................ 25 Lorello, David................20 Löscher, Peter...............20 Lutzius, John................24 Macedo, Lisa.................24 Macleod, Donald...........22 Manap, Nani Abdul ........ 5 McCarthy, Ward............26 McDonald, Robert.........21 Meijer, Harm.................24 Mendes, Michael .......... 21 Miura, Kazuhiro..............4

Miyamoto, Koichi............4 Otsubo, Takaharu...........4 Padoan, Pier Carlo..........8 Pathmakanthan, Anand.........................18 Plummer, Bill................21 Rajaratnam, Raj............25 Rovers, Gerior J.M. ...... 24 Rutherford, Linda.........23 Saluzzi, Joe...................27 Schare, Gary ................. 22 Sevior, John..................18 Shacknofsky, Kevin ...... 27 Sherman, J.D................25 Silver, Michael..............22 Smith, Justin................18 Taylor, Kieran................25 Templeton, Rich............22 Tsuchita, Tomio .............. 4 Xu, RuiXue....................26 Yamazaki, Nobuto ........ 26 Yunus, Muhammad.........6

Wednesday, April 6, 2011

THE WALL STREET JOURNAL.

21

BUSINESS
FINANCE

Huawei is finalist for job to build for U.S. Cellular BY SHAYNDI RAICE

Bloomberg

Pringles—called ‘crisps’ rather than chips because they aren’t 100% potato—are made in the U.S., Europe and Asia.

Diamond Foods acquires Pringles brand from P&G BY PAUL ZIOBRO Diamond Foods Inc. is acquiring the Pringles potato-crisp brand from Procter & Gamble Co. in a $1.5 billion stock transaction designed to minimize the tax bite. The deal, in which P&G will get Diamond Foods stock and Diamond will assume $850 million of Pringles debt, will transform the maker of Emerald nuts, Pop Secret Popcorn and Kettle Brand chips into the second-largest global snack company behind PepsiCo Inc., owner of FritoLay brands. The deal will be structured to minimize the tax impact to P&G shareholders, who can elect to exchange P&G shares for Diamond Foods shares. P&G will set up an entity to own the Pringles business, and merge it with Diamond Foods. P&G shareholders will own 57% of the combined company. Procter & Gamble used the same transaction structure when it sold Folgers coffee to J.M. Smucker Co. in 2008. With Pringles, Diamond Foods will more than triple the size of its snack business—which already had doubled last year with its $615 million acquisition of premium potatochip maker Kettle Foods. It also helps P&G trim another

noncore business from its portfolio, which is increasingly focused on personal-care and household-product brands. P&G Chief Executive Bob McDonald declined to comment on the prospect for future divestitures, saying that the company constantly reviews each business line for sales growth, earnings potential and “overall fit.” Analysts say that Procter & Gamble’s pet-foods business, which includes Iams, and its Duracell battery brand could be candidates for spinoffs. “This is it for now,” Mr. McDonald said on a conference call. “We’re committed to growing all of our business and continue to evaluate each business on its own merit.” Shares of Diamond Foods jumped on the news Tuesday morning, rising $5.23, or 9%, around midday to $62.45 on the Nasdaq Stock Market. P&G shares dropped 0.4%, or 24 cents, to $62.02. The addition of Pringles will bring Diamond Foods’ total annual sales to more than $2.4 billion. Pringles, the world’s largest potato-crisp brand, which is sold in 140 countries, also gives Diamond Foods a global brand that it can use to help increase sales of its current brands.

Pringles, which are called “crisps” rather than chips because they aren’t made from 100% potato, are manufactured in the U.S., Europe and Asia. The company aims to boost margins through cost cuts. Diamond Foods’ executives said the time was right to jump on another deal after “meaningfully” completing most of the integration from the Kettle deal. “You don’t get to pick your time with good transactions,” Diamond Foods Chief Executive Michael Mendes told analysts Tuesday. The Kettle acquisition has bolstered Diamond Foods’ results in recent quarters, although growth hasn’t always been as strong as some analysts expected. Tuesday, Diamond gave a relatively cautious 2012 earnings forecast for its core business, predicting a per-share profit of $2.85 to $2.98, compared with the $2.98 average estimate of analysts polled by Thomson Reuters. Assuming the Pringles deal closes by the end of the calendar year, Diamond Foods forecast adjusted earnings per share of $3 to $3.10 on $1.8 billion in net sales for its 2012 fiscal year. —Matt Jarzemsky contributed to this article.

Delta to resume service to Haneda BY DOUG CAMERON Delta Air Lines Inc. said it plans to restart flights from the U.S. to Tokyo’s downtown Haneda Airport in June, moving to head off an effort by United Continental Holdings Inc. to gain access to the routes. Atlanta-based Delta suspended services to Haneda, a favorite with business travelers, on March 24 following last month’s earthquake and tsunami. United and other U.S. carriers also have trimmed schedules and switched to smaller planes on some routes as traffic declined. United Continental last week asked regulators to grant it backup

authority to fly into Haneda if Delta or other U.S. carriers abandoned the market. Airlines have 90 days to restart flights or risk having their takeoff and landing slots at congested Haneda awarded to another carrier. Delta in a response to regulators Monday said United Continental’s move was unwarranted and chided its rival for not noting the “highly unusual” condition of the U.S.-Japan market following the March 11 disasters. The Chicago-based holding company for United and Continental last year lost out in a contest to start flying to Haneda. Delta won two of the four daily services available,

with the American Airlines unit of AMR Corp. and the Hawaiian Airlines unit of Hawaiian Holdings Inc. securing one apiece. Haneda was opened to overseas airlines last October, and its downtown proximity makes it more popular among business travelers than the more distant Narita International Airport. American said last week it would suspend its daily U.S.-to-Haneda flight from Wednesday through April 29. Delta said it would restart its service from Los Angeles on June 2, with its Detroit flight resuming June 16. Hawaiian didn’t suspend Haneda service.

Chinese telecom-gear maker Huawei Technologies Co. is a finalist for a contract to build out the fourth-generation wireless network for U.S. Cellular Corp., the country’s sixth largest wireless carrier, people familiar with the matter say. In addition, Huawei says it is in talks with government agencies to provide wireless technology to build the U.S.’s first nationwide publicsafety network. On Monday, several U.S. lawmakers sent a letter to President Barack Obama, asking the government to seek a “permanent legislative solution” to stop Huawei’s efforts to sell network infrastructure equipment in the U.S. The letter was signed by Republican Sens. John Kyl, Saxby Chambliss, Richard Burr, James Inhofe and Tom Coburn, and Republican Rep. Darrell Issa. In addition, the letter urges the president to prevent Huawei from receiving government subsidies. And it asks the appropriate government agencies to disclose whether any federal funds have been used to buy products or services from Huawei. The company has come under fire from some U.S. lawmakers as it tries to find new ways to expand into the U.S. market. They have expressed concern about Huawei’s ties to the Chinese government and military and the security implications of including its equipment in critical U.S. infrastructure.

Huawei has repeatedly denied such links and has offered to open its equipment and software to thirdparty inspection. In an open letter posted on the company’s website in February, Deputy Chairman Ken Hu called claims against Huawei “falsehoods” that “have had significant and negative impact on our business activity.” Referring to the legislators’ letter, Bill Plummer, vice president for government affairs for Huawei USA, said that the company has been cooperating fully with the government on the issue of bidding on publicsafety- network business. He added that a few weeks ago, Huawei sent a letter to the U.S. Department of Homeland Security to inform it of the company’s intent to bid on public-safety-network business. The U.S. Department of Commerce’s National Institute of Standards and Technology is already working with the company to test Huawei’s LTE technology for use in public-safety networks. So far, Huawei has closed deals in North America only with smaller wireless operators such as Clearwire Corp. and Cox Communications Inc. In contrast, in Europe the company has won contracts with such companies as BT Group PLC. A final decision on the U.S. Cellular contract is expected in the next few weeks, said one person familiar with the matter. Other finalists are L.M. Ericsson and Alcatel-Lucent SA, two of the people said.

22

THE WALL STREET JOURNAL.

* *

Wednesday, April 6, 2011

CORPORATE NEWS

Businesses cling to Chip makers strike deal Microsoft browser Texas Instruments to pay $6.5 billion for National Semiconductor Microsoft Corp. wants firms to stop using Internet Explorer 6, but its campaign is causing problems for businesses and creating an opportunity for an upstart company that may have developed a way to keep the aging browser alive indefinitely. Last month, Microsoft introduced its newest browser, Explorer 9, and at the same time announced that “it’s time to say goodbye” to Explorer 6. The old browser, which isn’t nearly as fast and secure as newer versions, is used by 11.6% of computers world-wide. At its website ie6countdown.com, Microsoft says its goal is to reduce usage to less than 1%. The problem: Explorer 6 was introduced in 2001, a period when many businesses were starting to write internal Web applications for everything from expense management to process control, and up to 40% of those applications don’t work on newer versions of Explorer. Halting the use of Explorer 6 would force businesses to rewrite applications at considerable cost, even though the ones they have can operate safely behind corporate firewalls. As with operating systems and office-productivity software, the challenge for Microsoft is to retain its dominance in the browser market while it is struggling to push a huge installed base toward change. Various programs allow companies to run old applications, such as Explorer 6, in a “virtual bubble” on top of later versions of Explorer, but, says Michael Silver, of Gartner Inc., “Microsoft claims these violate their use rights.” Indeed, in a recent letter to customers, Microsoft said it doesn’t support products that “virtualize any version of IE.” One of the people delivering that message used to be Matthew Heller, whose last job before leaving Microsoft last year was to urge customers to upgrade beyond Explorer 6. Now, he and fellow Microsoft alumni Gary Schare and Matthew Crowley have founded Browsium Inc. in Redmond, Wash., and introduced a product called UniBrows aimed at solving the Explorer 6 problem without violating Microsoft’s usage agreements.

Web strands Global market share of Internet browsers, by versions Firefox 3.6 17% IE 6.0

11%

IE 7.0

8%

Chrome

Internet Explorer 8.0 34%

7%

Other 4% 18%

Safari Note: Data don’t add up to 100% due to rounding Source: NetMarketShare.com

When a user clicks on a Web link using a computer running UniBrows, the computer evaluates the Web page and then renders it using the version of Explorer for which it was designed. UniBrows does the same for older versions of Java, a programming language now owned by Oracle Corp., and Flash, Adobe Corp.’s multimedia format. Removing Explorer 6 from the public Internet is a good idea, says Mr. Schare, Browsium’s president. The browser wasn’t designed to address today’s security threats. But for applications running inside a secure corporate network, UniBrows lengthens the time companies can use the Explorer 6 application safely before rewriting it into a modern format. UniBrows doesn’t violate terms of use because it isn’t a virtual browser. It opens pages as tabs within a more recent version of Explorer, which must be installed on the computer. Microsoft declines to comment on Browsium or its products. In a written response to questions, the company says a “temporary” fix is to run Explorer 6 applications through Microsoft’s own virtualization utility called MED-V. But the company says “virtualization options are not appropriate” for ongoing use of Explorer 6. “The ie6countdown site is about encouraging the very positive trend of moving the Web to a browser platform that isn’t a decade old,” the company statement says.

LEGAL NOTICES INTERNATIONAL NOTICES
           

 


    
         

 
 


 
 

 
   
   !  
        
 
  
  

  " 


    
    
  




   
    
       

    
!

 "# 
 $ % &

   
    
  ' 


  
   

  
 (( 
    
()    *  +   
 ,  

   !   

 - 
       +       
      
     


*   !    


      
 
     
      
    


 .
&/ 
 

     


 

 !* 0 0 1    2*    
  3 4   

 
 *    
   /
 
  
5
   

 .
&/ 
 
    
    
    



       

            

 ! 


    
 .
&/ 
 
  
 0 0 1   *    


5
      
 
 .
&/ 
 

     


 

 !*     
 !   

   
5
   

 .
&/ 
 
  
 0 0 1   !   

 '  5
   
      
 
     
  
  


 

 
 ! 


  

 
'    
   * 5
 
 6 
 1
 0 0 1    

  

 .
&/ 

  #!    
 

  
#!   *   !            
      
 !  
   
 
 6 
 1
 0 0 1     5
     


 .
&/ 
 

     '  !*  / 
  


   
 
  
 
    
 

 /

#     


 .
&/ 
 7 8"4$  &
 ! %  3 "++9 -  %
   

 


  .   






: 33 (3 ;< = : 33 (2 ))  >  

?# *  # 
? # ** 1 @61
 
   

Texas Instruments Inc. agreed to buy rival National Semiconductor Corp. for $6.5 billion in cash, a move that would unite two of the most venerable names in the chip business and provides new evidence of deal-making fervor in the technology industry. The bid’s hefty premium casts light on a large but unglamorous semiconductor business—chips based on analog technology and used for such duties as amplifying radio signals in cellphones and managing power consumption in computers. Both companies specialize in the field and have reduced their focus on digital chips, a more competitive market that requires costly investments in the latest production technology. Analog chips, by contrast, often command low prices but can be produced very profitably on older production equipment. A deal would give Dallas-based TI a broader set of products to sell to existing customers in the medical device, telecommunications and industrial equipment markets. Rich Templeton, TI’s CEO, said his company has 30,000 individual products and typically adds about 500 new ones a year. By acquiring National, he said, it would add 12,000 products in one fell swoop. The analog chip market remains fragmented, split among rivals including STMicroelectronics NV, Analog Devices Inc. and Linear Technology Corp. As a result, the deal isn’t likely to face significant antitrust challenges, said Will Strauss, an analyst with market-research firm Forward Concepts. TI and National estimated that world-wide sales of analog semiconductors generated about $42 billion in revenue in 2010, with TI accounting for about 14% of the market and National 3%. National Semiconductor CEO Donald Macleod said the Santa

Reuters

BY DON CLARK

BY STEVEN D. JONES

TI’s Rich Templeton says his company can add 12,000 products with the deal. Clara, Calif., company hadn’t sought to be acquired. “TI approached us,” he said. Its board agreed to explore the combination and concluded that it provided benefits to customers as well as investors. “This really does provide National shareholders with very compelling value right now,” he said in a conference call. Mr. Templeton said National would be operated largely as the fourth major unit inside TI’s analog chip business. He estimated the return on investment from the deal would exceed TI’s cost of capital to complete it within three to five years. “The numbers work,” he said. Texas Instruments agreed to pay $25 for each National share, a pre-

mium of 78% to the stock’s price before the deal was announced Monday afternoon. In trading on the New York Stock Exchange early Tuesday, National shares were ahead 71% to $24.11, while TI rose 1.5% to $34.63. Both companies’ boards have approved the deal, and the companies said they expect it to close within nine months. The merger must pass regulatory scrutiny. Recent deal making in the technology sector includes AT&T’s $39 billion bid for T-Mobile USA and EMC Corp.’s $2.25 billion bid for Isilon Systems Inc. —Ian Sherr and Nathan Becker contributed to this article.

Big deals roar back as confidence rises Continued from page 19 the U.S. and more than half that of the U.K., according to Dealogic. Chinese firms have targeted oil and gas deals most avidly, followed by mining and chemicals. One of the boldest moves this week came from China’s Minmetals Resources Ltd., which said Monday it was making a $6.5 billion bid for Canadian-Australian Equinox Minerals Ltd. Minmetals is part of a Chinese state-owned mining conglomerate, whose previous interest in Canadian companies in 2004 received widespread derision among Canadian politicians at the time. Sentiment in Canada has changed

since then, as politicians view Chinese deals as a necessary part of raising capital for new natural-resources investment. The proposed deal represents China’s largest acquisition bid since China Petrochemical offered $7.1 billion for a 40% stake in Repsol Brasil last October, according to Dealogic. Despite turmoil in the Japanese economy, companies there haven’t shied away from transactions. On Monday, Japan’s Sumitomo Light Metal Industries announced it was leading a group of Japanese firms to buy Kentucky-based ARCO Aluminum from BP PLC for $680 million. Companies and private-equity

firms see the next several months as a window of opportunity, especially if inflation picks up. Private-equity firms also need to put money to work as funds wind down and they embark on new rounds of fund raising. On Monday, Pfizer announced it was selling its Capsugel unit, which makes hard capsules, to Kohlberg, Kravis Roberts & Co. in a $2.4 billion deal. Also, private-equity firm Apax Partners announced it was acquiring Epicor Software Corp. and Activant Solutions Inc., both software providers, in deals totaling about $2 billion.

App makers face privacy investigation Continued from page 19 An Apple spokesman declined to comment. Google didn’t respond to requests for comment. One app maker mentioned in the Journal’s article, Max Binshtok, creator of the Daily Horoscope Android app, said he hadn’t received a subpoena. Makers of other applications declined to comment or didn’t re-

spond to requests for comment. The Journal also tested its own app, which didn’t send information to outsiders. A Journal spokeswoman declined to comment. The probe centers on whether app makers violated the Computer Fraud and Abuse Act, said the person familiar with the matter. That law, crafted to help prosecute hack-

ers, covers information stored on computers. It could be used to argue that app makers “hacked” into users’ cellphones. Several companies involved in smartphone apps are facing civil lawsuits from consumers alleging their privacy has been violated through the transmission of personal information.

THE WALL STREET JOURNAL.

Wednesday, April 6, 2011

23

CORPORATE NEWS

Southwest tear shows stress hazard Fuselage rupture highlights potentially dangerous cracks; airline finishes inspection of Boeing jets, holds back five The fuselage rupture that prompted Southwest Airlines Co. to temporarily ground part of its fleet Saturday has highlighted an insidious hazard: potentially dangerous cracks that can develop under the aluminum skins of some older Boeing 737 jets. Inspections by Southwest and new inspections the Federal Aviation Administration will change the way certain aging 737s are maintained and checked world-wide. But the longer-term result, according to government and industry safety experts, could be that airlines and regulators broadly rethink how they deal with metal fatigue on many aircraft models. On Friday, a five-foot gash opened in a 737 fuselage during a Southwest flight, prompting an emergency nose dive while passengers hurriedly donned oxygen masks. The plane landed safely.

Associated Press

BY ANDY PASZTOR AND TIMOTHY W. MARTIN

A Southwest jet is inspected. Southwest said Tuesday it had finished inspections on the 79 planes it voluntarily grounded since the incident. Of those, five aircraft were found to have “small, subsurface cracks” that would require further evaluation and possibly repairs.

The FAA said Monday it intends to issue an emergency safety directive calling for stepped-up structural inspections affecting about 170 of aircraft giant Boeing Co.’s workhorse 737s world-wide. In addition to Southwest’s aircraft, the FAA’s order affects some 100 other planes operated by foreign carriers, including two slightly different 737 models. Depending on what those inspections of a relatively few planes show—and what additional details accident investigators glean from the Southwest incident Friday—there could be greater emphasis on in-depth inspections for budding structural problems in certain parts of planes that haven’t received much attention in the past. “The existing inspections procedures just weren’t adequate to uncover what they eventually found under the surface,” said John Goglia, a former member of the National Transportation Safety Board. “Now, there may be moves to do

more detailed inspections, and do them earlier, on various types of airplanes,” he said. The FAA said Monday that it wants airlines to begin using electromagnetic testing devices to check for tiny cracks in certain sections of the older 737s where lines of rivets join overlapping skin panels together. In those areas, which haven’t been considered especially prone to cracking due to metal fatigue, there currently aren’t any repetitive inspection requirements, according to industry officials. Government investigators and industry safety experts were surprised not only at the location of the cracks, but that some of the aircraft didn’t have as many takeoffs and landings as might have been expected to cause such damage. For Southwest, which was forced to cancel hundreds of flights after the incident, the findings also were a surprise. The company said it believes the

subsurface cracks found on four of its Boeing 737-300s come from an inspection blind spot, noting Boeing hadn’t issued any guidance for checking that area of the jet. The Dallas-based budget carrier also believes it uncovered a previously unknown structural problem. “It happened to us, but we do not believe that it’s a Southwest Airlines issue. We believe that we discovered something that actually is an issue for the world-wide 737-300 fleet,” said Southwest spokeswoman Linda Rutherford. She cautioned that her comments shouldn’t be viewed as a final conclusion, given the continuing National Transportation Safety Board investigation. According to government and industry officials, Boeing believes the configuration of the Southwest planes makes them more prone to such problems, but the company is working closely with the FAA to determine if additional steps are warranted.

24

THE WALL STREET JOURNAL.

Wednesday, April 6, 2011

THE PROPERTY REPORT

Property may win from ECB move

Follow the leader

BY WILLIAM BOSTON

6%

Special to the WSJ

With the European Central Bank likely to raise short-term interest rates this week for the first time in three years, the era of cheap money on the Continent appears to be coming to a close. But for property owners, there could be a positive short-term impact. At times of rising inflation, investors looking for a safe haven tend to turn to tangible assets such as real estate. “As we move from a world of falling inflation to one in which rising

inflation is something investors should worry about, I see real estate playing a protective role,” says John Lutzius, head of the European office of boutique brokerage Green Street Advisors in London. Economists expect the ECB to raise its main short-term interest rate by 0.25 percentage point to 1.25% on Thursday. To be sure, should interest rates rise high enough to slow economic growth in Europe’s larger economies, the impact on commercial property wouldn’t be pretty. Slower economic growth could stall corporate demand for offices and ware-

houses while eroding consumer confidence and spending in stores. But analysts and investors point out that European-listed property companies and real-estate investment trusts have only a limited exposure to fluctuations in short-term interest rates. Rising interest rates in the 17-nation euro zone won’t hit all countries equally. Economists expect the impact to be positive on big countries with strong economies such as Germany and France. But Greece, Portugal and Ireland, all countries where worries about the financial health of euro-zone countries have

ECB key interest rate vs. Euribor three–month interest rate

been most severe, may be put under even greater pressure, and Spain’s economic changes could be threatened. Some economists are forecasting that a rate rise this week will be the first of several as a way to fight inflation, now running at 2.6%. “An interest-rate rise in the euro zone [on Thursday] is factored in [earnings projections],” said Gerior J.M. Rovers, chief investment officer for European real-estate securities at brokerage Cohen & Steers in Brussels. “But does it mean this is just a blip or are we going to see higher rates from here on in?”

Euribor

5 4 3 2

ECB

1 0

'05

'06

'07

'08

'09

'10

'11

Source: Thomson Reuters via WSJ Market Data Group

BUSINESS REAL ESTATE AUSTRALIA

ANNOUNCEMENTS


* 




 


    


 
 




     

  
 




% &' 
" " ('

     !  " & * !+$ , 
.*  /     /     00)   ,#)  -     
1 /   & 2    2   3   
4    2 /    /    / / 
              5    &+    
%  6)(+(#


# $    !  " &  7 !+$"" , .* * / 89  ./  
* /     / +    0)$   ,#$$  -   :
3   ; %  8     %2.
&   5    &+    
%  6+!


)%+
) +





    

               !"#!$!$ %  & ' ($)

)   *


 

           

  !

           


      

     


       


         
 
   
   !




  



   !


      


                         

FRANCE




4    <   ;   5/   * 

   

<0""#


 
    
 
                               ! !     ! "        !        #  !! $ %   &! #  !  $  ' ( ) ' 
* *+, #!  '
*- + #! . $ ! /) !   '      $     / '  $  0+1-  -2
3*4 "1415  364-64  *0 0+67863 0  # % ' 9     !  $'   0    :
    ! ! $  ;'   $  ! 

Notable Commercial Properties. Commercial Listings Every Wednesday. List Your Property Today. Call (852) 2831-2553 (65) 6415-4279 or (813) 6269-2701

INVESTMENT PROPERTIES

UNITED STATES


   


  

    


  

    

 

Southern California USA School Property (5) Five acre licensed private school academy property and land offered for sale. Interested parties should contact Steve at

303 863 7227 [email protected]

THE WALL STREET JOURNAL.

Wednesday, April 6, 2011

25

MARKETS

BY MICHAEL ROTHFELD AND CHAD BRAY A former hedge-fund trader bragged in a conversation with Galleon Group founder Raj Rajaratnam about getting inside information on a technology company and rejoiced a few days later over the profits they made on the tip, according to two secretly recorded phone calls played for a jury. The conversations between Danielle Chiesi, a former analyst and trader at New CasTHE GALLEON tle Partners, and TRIAL Mr. Rajaratnam were among the last secretly recorded calls that prosecutors are expected to play during the insider-trading trial of Mr. Rajaratnam. They planned to conclude their case as soon as Wednesday before defense lawyers present their side. Mr. Rajaratnam’s lawyer, John Dowd, said the defense would take about a week. Mr. Rajaratnam, who is charged with 14 counts of securities fraud and conspiracy, has denied any wrongdoing and said he traded based on legitimate research. In one phone call, from July 24, 2008 and played Monday, Ms. Chiesi says she has learned that Akamai Technologies Inc., which makes products to manage Internet traffic, is about to “guide down,” or reduce,

its earnings projections for the year. “I just got a call from my guy,” Ms. Chiesi says. “I played him like a finely tuned piano.” Prosecutors say she received that information from Kieran Taylor, a marketing executive at Akamai Technologies and her family friend. The phone calls were played after U.S. District Judge Richard Holwell ordered certain “colorful” portions of the conversations, as a prosecutor put it, redacted so as not to prejudice the jury. Ms. Chiesi pleaded guilty in January to conspiracy to commit securities fraud. Mr. Taylor, who hasn’t been accused of wrongdoing, couldn’t immediately be reached. When Akamai’s new projections were announced on July 30, the stock declined more than 25%, according to J.D. Sherman, Akamai’s chief financial officer, who testified on Monday. During Mr. Sherman’s testimony, prosecutors played a tape of another call Mr. Rajaratnam made to Ms. Chiesi that day. “Hi Dani, Raj. I just wanted to say thank you,” he says, telling her she had handled the Akamai tip “in such a classy way.” “And I want to tell you that it’s my pleasure,” Ms. Chiesi says. “I really am beyond excited, because I needed this, but, I really did.” “It’s a conquest,” Ms. Chiesi con-

Russian fund seeks foreign investment BY GREGORY WHITE MOSCOW—Russia hopes to attract $60 billion to $90 billion in foreign investment over five years with a new government-backed fund that is aimed at private-equity investors now deterred by the country’s rough business climate, according to a top official. “Investors are simply scared,” Vladimir Dmitriev, head of Vneshekonombank, the state bank setting up the new fund, said in an interview. “Investors are ready to come only on [the] condition the government shares the risks with them.” He provided the first detailed account of how the new venture, to be called the Russian Direct-Investment Fund, will operate. Unlike a traditional sovereign-wealth fund, which usually invests outside its home country, the new fund will put its capital into projects inside Russia. Foreign partners—big international private-equity and sovereign-wealth funds—will be offered the chance to take stakes alongside it, but won’t hold shares in the fund itself. To be officially launched by President Dmitry Medvedev in June, the new fund is part of the Kremlin’s new drive to woo the foreign capital it needs to overhaul Russia’s outdated industry and infrastructure and stimulate growth. Contacts with major investors over the past few months have been something of a cold shower for the Kremlin, however. “They told us directly that for the majority of investors, there’s no

more BRIC, just the BIC,” Mr. Dmitriev said, referring to the grouping of Brazil, Russia, India and China. Russia’s oil-dependent economy was by far the hardest hit of the four by the global financial crisis. Mr. Dmitriev said the Russian government will contribute $2 billion this year to start the fund, using excess tax revenues generated by high oil prices. Authorities have pledged to contribute $2 billion annually for five years, he said, but have dropped plans to tap Russia’s existing sovereign-wealth funds for money. The fund will take stakes of 15% to 25% in each project, spending between $50 million and $500 million, he said. The bulk of the investment in the projects—including controlling stakes—will come from the foreign partners. Typical for private equity, the fund and its partners will hold stakes for five to seven years, exiting through public offerings or other sales. The fund will invest across Russia’s economy, except in natural-resource sectors, which are already well-funded. Mr. Dmitriev declined to comment on specific potential projects, but said he expected to have about $1 billion invested by year end. Returns of about 20% are expected over a five- to seven-year investment plan, he said. The fund’s management will be independent, made up of professionals from the industry to allay any fears of political influence or conflicts of interest, Mr. Dmitriev said.

Bloomberg News

Trader rejoices over alleged tip

Galleon Group co-founder Raj Rajaratnam, left, arrives at federal court with attorney John Dowd on Monday. tinues. “It’s mentally fabulous for me…I love the way that I feel.” Ms. Chiesi also mentions that she has a meeting at the Chinese consulate, saying that though she doesn’t “ever get too cocky…I wanna own China, as you know, I need to own them.” Prosecutors also played a tape of another call, from Oct. 10, 2008, in which Mr. Taylor tells Ms. Chiesi that he is coming to New York and wants to give her “a major present.” “Drugs?” Ms. Chiesi asks. “I hope not.” “Information, information,” Mr. Taylor says. “That is a great present,” she replies. “I love you for that. When will I see you?”

Separately, prosecutors say they decided not to call Roomy Khan, one of the first government informants in the case, as a witness and would instead use phone and trading records to show that she gave Mr. Rajaratnam tips on Google Inc., Hilton Hotels Corp. and Polycom Inc. Defense lawyers had been expected to attack her credibility, in part because she had pleaded guilty in connection with insider trading in an earlier case. On Tuesday, Judge Holwell barred prosecutors from showing jurors video tapes of Ms. Khan allegedly faxing confidential information to Mr. Rajaratnam. Prosecutors had hoped to show a short video related to an internal in-

vestigation of Ms. Khan, while she worked at Intel Corp. The surveillance video reported showed Ms. Khan faxing confidential “book-tobilling” reports to Mr. Rajaratnam on two occasions in March 1998. The video would have been played during the testimony of Mark West, who was an Intel executive in the late 1990s when the internal probe of Ms. Khan was conducted. The judge also barred prosecutors from showing fax records related to the alleged Khan-Rajaratnam interactions from that time. “There is an increasing likelihood that the jury will fill in the blanks by inferring the defendant did something wrong in 1998,” Judge Holwell said.

presented by:

in partnership with:

Is your innovation engineered for success? Sometimes recognition is all that’s needed to elevate an idea onto the world stage. From an entirely new invention to the advancement of a classic, the Asian Innovation Awards and the Credit Suisse Technopreneur Award are committed to finding the next big ideas in Asia. Whether conceptualized in a backyard or a laboratory, we are seeking innovations that break with conventional processes in creative ways to improve quality of life or productivity, as well as those demonstrating the greatest potential for financial success. Entries welcomed from individuals, small businesses, large corporations and academia in Asia Pacific, from any field including health care, technology, medicine, energy, social sciences, government and others.

To enter or to find out more, visit wsj-asia.com/aia

Deadline Extended: April 8, 2011 © 2011 Dow Jones & Company, Inc. All rights reserved.

26

THE WALL STREET JOURNAL.

* *

Wednesday, April 6, 2011

INTERNATIONAL INVESTOR

Dollar lower vs. euro after Fed news, data BY STEPHEN L. BERNARD

The Institute for Supply Management’s nonmanufacturing index fell to 57.3 in March from 59.7 in February. Economists expected the index to remain at 59.7 in March. While the reading still shows the sector is expanding, it tempers expectations for coming growth. Continued steady growth is needed to push the Federal Reserve to increase interest rates. But until the Fed raises rates, the dollar is likely to remain somewhat weak against other major currencies, analysts said. The European Central Bank is expected to increase interest rates later this week. After a strong service-sector purchasing managers’ index reading in the U.K., expectations are growing the Bank of England will raise rates next month. The BOE is meeting this week, but even with the upbeat report, it is unlikely the central bank will in-

NEW YORK—The dollar gave up early gains after a disappointing report on the U.S. nonmanufacturing sector damped the greenback’s momentum. The dollar stayed lower versus the euro after the release of minutes from the Federal CURRENCY Reserve’s last policy MARKETS meeting, but it rose to its strongest level in over six months versus the yen after Fed officials expressed concern over inflation pressures. The euro recovered from an early fall after a surprise interestrate increase by China’s central bank and held onto gains. The weaker U.S. data led the “dollar selloff a bit,” said Aroop Chatterjee, chief foreign-exchange quantitative strategist at Barclays Capital in New York.

FUND SCORECARD India - Large Cap Funds which are fairly representative of the Indian large cap equity market. At least 75% of total equity assets invested in Indian equities. Ranked on % total return (dividends reinvested) in U.S. dollars for one year ending April 05, 2011

Leading 10 Performers FUND FUND RATING * NAME

crease rates, said Marc Chandler, global head of foreign exchange at Brown Brothers Harriman. “I don’t think anyone changes their mind for this week” but possibly for May, Mr. Chandler said following the U.K. report. In afternoon trade, the euro was at $1.4240, compared with $1.4217 late Monday. The dollar rose above ¥84.73 to touch its highest level since Sept. 24 from ¥84.03, while the euro was at ¥120.46 from ¥119.52. The pound fetched $1.6288 from $1.6125. The dollar had been broadly stronger ahead of the report on the nonmanufacturing sector. C hina’s 0.25 percentage-point increase to its benchmark lending and deposit rates initially damped investors’ willingness to take on risk, helping the dollar. —Bradley Davis contributed to this article.

FUND MGM'T CO.

LEGAL CURR. BASE

YTD

UTI Mutual Fund

% Return in $US ** 1-YR 2-YR 5-YR

NS

UTI SUNDER

INRIND

1.85

31.45 86.21

NS

NS

ICICI Pru ICICI Prudential INRIND FocusedBluechipEqInstlIGr Mutual Fund Sundaram Sel Sundaram BNP INRIND PSU Opp Div Paribas Mutual Fund Quantum L/T Quantum Mutual INRIND Equity Div Fund HDFC Growth HDFC Mutual Fund INRIND Div Fidelity Fidelity Fund INRIND Equity Div Management Private Limited Fidelity Fidelity Fund INRIND India Growth Div Management Private Limited HDFC Top 200 HDFC Mutual Fund INRIND Div Reliance NRI Reliance Mutual INRIND Equity Bns Fund IDFC IDFC Mutual Fund INRIND StrategicSector(50-50)EquityDiv

-0.97

21.64 57.79

NS

21.27

NS

NS NS NS NS NS NS NS NS

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

1.74

NS

-4.01 20.65 63.47 17.45 -4.07

19.22 58.63 15.87

-2.75 19.04 56.47 14.89 -2.78 18.99 57.20

NS

-3.51

18.22 59.20 17.08

-2.95

18.13 57.35 16.39

-2.54 16.98 37.04

NS

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

Treasurys fall on repo worries Japanese yields decline BY CYNTHIA LIN

term lending markets. While details are still unclear, the rule initially supported shorterdated notes, since tightness in the repurchase, or “repo,” market makes the securities more expensive to sell short. Short sales represent bets against a security. But traders on Tuesday speculated that the Fed may conduct reverse repo operations to alleviate such conditions sooner than expected, which hurt prices. “This puts the Fed a little behind the eight ball,” said Ward McCarthy, chief financial economist at Jefferies & Co. “But they’re going to watch it very carefully, and if it looks like a serious market dislocation, then they’ll just have to bite

NEW YORK—Treasurys declined Tuesday after talk emerged that the Federal Reserve may step in to ease the recent squeeze in the overnight lending market through reverse repos. The minutes U.S. CREDIT from the Federal MARKETS Open Market Committee’s latest meeting on monetary policy failed to change investors’ view of the outlook for rates, leaving prices lower. A new Federal Deposit Insurance Corp. rule that became effective on April 1 is discouraging banks from lending out their Treasurys holdings, cramping conditions in short-

Advertisement

INTERNATIONAL INVESTMENT FUNDS FUND NAME

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

NAV GF AT LB DATE CR

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

GL EQ LUX 04/04 EUR

NAV

52.15

—%RETURN— YTD 12-MO 2-YR

2.0

-4.2

13.6

n ALLIANZ GLOBAL INVESTORS KAPITALANLAGEGESELLSCHAFT Concentra AE Industria AE InternRent AE

EU EQ DEU 04/05 EUR EU EQ DEU 04/05 EUR EU BD DEU 04/05 EUR

63.93 75.47 38.27

3.4 -1.1 -5.4

18.1 3.7 3.5

32.3 19.2 7.1

n CHARTERED ASSET MANAGEMENT PTE LTD - TEL NO: 65-6835-8866 Fax No: 65-6835 8865, Website: www.cam.com.sg, Email: [email protected] CAM-GTF Limited

OT

OT MUS 03/25 USD 389414.36

-6.2

20.3

81.2

GAM Asia Equity Hedge US GL EQ VGB 04/04 USD GAM Asia Equity USD OT OT VGB 04/04 USD GAM Asia-Pacific Eq USD AS EQ VGB 03/29 USD

280.22 728.91 1332.47

1.5 0.8 -3.8

-0.7 10.3 -1.5

GAM Com Glb Bal EUR Op GAM Com Glb Bal USD Op GAM Comp Glb Eq EUR Op GAM Comp Glb Eq USD Op GAM Comp Glb Gr EUR Op GAM Comp Glb Gr USD Op GAM CompAbsRT EUR Op GAM CompAbsRT SGD Op GAM CompAbsRT USD Op GAM Cptal Apprec Eq Inc GAM Diversity EUR Op GAM Diversity USD 2.5XL GAM Diversity USD Op GAM Dvrsty II USD Op GAM Euro Eq Hdg EUR Op GAM Euro Eq Hdg USD Op GAM GAMCO Eq GAM Gbl Divers USD Inc. GAM Grtr China Eq Hdg Op GAM Intrst Trend Inc GAM Japan Eq Hdg USD Op GAM Japan Eq Hdg YEN Open GAM Japan Eq USD GAM Japan Eq YEN GAM Money Mkt EuroOp GAM Money Mkt USD GAM Multi-Arb EUR Op GAM Multi-Emer Mkts USD GAM Multi-Eur EUR Op GAM Multi-Eur II EUR Op GAM Multi-Eur II USD Op GAM Multi-Eur USD Op GAM Selection Hdg GAM Sing/Malaysia Eq GAM Sterling Spe Bd Inc GAM Trading EUR Inc GAM Trading USD Inc GAM Trdg II IncUSD Op GAM USDSpecBondInc GAM Worldwide GAMut Investments GAMut Investments - T class

n GAM Star Fund Plc

n GAM FUND MANAGEMENT LIMITED George's Court, 54-62 Townsend Street, Dublin 2, Ireland Tel +353 1 609 3927 Fax +353 1 611 7941, Internet: www.gam.com 30.0 32.3 15.6

NAV GF AT LB DATE CR

GAMStar China EqUSD (SCHUA) GAMStar DiversMktNeutCredit USD Acc GAMStar Emer Mkt Rates USD Acc GAMStar GEO USD Acc GAMStar Global Conv.Bd USD Acc GAMStar Global Eq Inflat Focus USD Acc

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

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

03/28 03/28 03/28 03/28 03/28 03/28 03/28 03/28 03/28 04/01 03/28 03/28 03/28 03/28 04/01 04/04 03/31 04/04 03/31 03/31 03/31 03/31 04/04 04/04 04/04 04/04 03/28 03/28 03/28 03/28 03/28 03/28 03/31 04/04 03/31 02/28 03/28 03/28 03/31 04/04 03/31 11/30

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

AS EQ IRL 04/01 USD OT OT IRL 03/31 USD OT OT IRL 03/31 USD OT OT IRL 04/01 USD OT OT IRL 03/31 USD GL EQ IRL 04/01 USD

BY TAKASHI MOCHIZUKI

the bullet and take action.” Mr. McCarthy added that doing a reverse repo strictly to address a squeeze in overnight money markets would prompt a “negative response” from the market, and could send “a very mixed signal” in terms of policy in conjunction with the continuing bond-buying program. In early afternoon trade, the benchmark 10-year note was down 15/32, leaving its yield at 3.485%. Bond prices and yields move in opposite directions. The two-year note was down 3/32 at 99 28/32 to yield 0.8136%. The two-year note’s yield has dropped from as high as 0.901% Friday, the strongest level in nearly a year.

NAV 103.39 139.46 111.65 146.77 95.34 139.91 147.26 106.65 886.01 320.66 634.27 72.08 670.41 204.56 237.44 220.70 1093.68 283.35 238.58 336.39 126.13 8740.47 1143.49 8844.20 51.05 100.10 87.67 672.56 287.23 147.82 121.12 501.51 3387.55 2919.07 257.11 340.43 1010.73 328.31 666.65 2505.03 7996.70 116.46 20.09 10.14 10.70 10.54 10.53 153.11

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

—%RETURN— YTD 12-MO 2-YR 0.6 0.6 1.7 1.7 0.6 0.6 -1.5 -0.9 -0.9 9.9 1.0 1.8 1.0 0.8 -3.3 -3.1 5.8 1.9 -1.1 8.8 -1.1 -0.6 -3.2 -2.0 -0.1 0.0 -4.8 -1.3 2.4 2.4 2.4 2.3 2.5 -0.3 4.6 -0.7 -1.9 -1.9 6.0 7.5 -1.6 2.5 -0.7 0.3 -2.3 5.4 4.0 8.8

6.9 6.9 12.2 12.2 8.4 8.4 1.5 2.5 2.9 22.1 -2.7 -8.7 -2.1 -3.2 5.4 4.7 26.3 6.4 -13.4 12.4 -7.8 -7.3 -8.8 -12.1 0.1 0.3 -22.3 2.9 6.8 6.9 7.1 7.1 21.4 13.4 11.3 6.0 4.9 5.0 12.9 10.8 3.6 10.3 4.1 NS NS NS NS NS

TOKYO—Japanese government bond yields fell as a solid 10-year debt auction eased investor concerns that oversupply might damage demand for the BOND safe-haven assets. MARKETS The benchmark 10-year yield dropped 0.02 percentage point to 1.27%. The government sold ¥2.001 trillion ($23.81 billion) of 10-year paper at the lowest price of 99.95, yielding 1.305%. The price was higher than the 99.92 expected by the market. Coupled with other indicators such as the bid-to-cover ratio, the auction proved solid, traders say.

Ahead of the offering, investors were selling bonds amid bets that Tokyo will have to increase government-bond issuance for the current fiscal year to pay for reconstruction efforts following the March 11 earthquake and tsunami. But the auction result was a huge help in easing such concerns, traders say. “It was good news for the market because it was the first auction in this fiscal year and the bonds offered were the benchmark 10-year ones,” said Nobuto Yamazaki, executive fund manager at DLIBJ Asset Management. RuiXue Xu, a bond strategist at RBS Securities, said the 10-year yield may now fall to 1.15% by the end of the month.

15.4 15.4 24.7 24.7 17.4 17.4 7.0 7.5 7.8 37.6 1.1 0.3 1.5 0.5 11.2 11.3 45.1 25.1 29.5 54.9 7.0 7.8 9.3 5.2 0.4 0.1 -11.2 13.4 6.3 6.3 6.4 6.5 43.7 38.3 35.2 4.6 4.1 4.1 52.6 27.2 3.4 NS 53.2 NS NS NS NS NS

FUND NAME

NAV GF AT LB DATE CR

GAMStar Global Rates USD Acc GAMStar Keynes Quant Strategy USD Acc GAMStarPharoEmerMktDebt&FXUSDAcc GAMStar Technology USD Acc GAMStar Trading USD Acc GAMStar-AsEqUSD Ord Ac GAMStar-AsPacEqEUR Acc GAMStar-ContEurEqEUR Ac GAMStar-EurpEqEUR Acc GAMStar-EurpEqUSD Acc GAMStar-JpnEq EUR Acc

Advertisement

FUND NAME

OT OT GL OT OT OT AS EU EU EU JP

OT OT BD EQ OT OT EQ EQ EQ EQ EQ

IRL IRL IRL IRL IRL IRL IRL IRL IRL IRL IRL

03/31 04/01 03/31 04/01 03/31 04/04 04/04 04/04 04/04 04/04 04/04

USD USD USD USD USD USD EUR EUR EUR USD EUR

NAV 11.03 10.30 10.91 9.95 9.83 14.96 109.16 12.75 201.05 17.45 90.82

—%RETURN— YTD 12-MO 2-YR 1.5 -2.3 -1.5 NS NS 1.0 -6.0 1.0 0.7 7.1 -6.4

3.7 NS 1.9 NS NS 10.8 -5.1 8.9 3.6 8.7 -10.7

NS NS NS NS NS 32.0 13.1 25.6 22.2 26.9 8.7

NAV GF AT LB DATE CR

AlexandraConvertibleBondFundI,Ltd.(ClassA) OT OT VGB 02/28 USD

NAV

—%RETURN— YTD 12-MO 2-YR

2364.66

2.2

29.4

52.1

103.64

-15.4

-3.9

11.0

n CREDIT PACIFIC ASSET MANAGMENT www.creditpacific.com GL OT WSM 03/31 USD

JP EQ IRL 04/04 JPY JP EQ IRL 04/04 USD

NAV

—%RETURN— YTD 12-MO 2-YR

918.15 11.39

-1.4 -2.7

-11.8 -8.9

7.7 10.7

10215.29 9678.54 103.35 114.51

4.1 12.3 10.4 2.8

0.2 -1.1 8.8 12.4

NS NS NS NS

n HSBC Trinkaus Investment Managers SA E-Mail: [email protected] Telephone: 352 - 47 18471 Prosperity Return Fund A Prosperity Return Fund B Prosperity Return Fund C Prosperity Return Fund D

JP BD LUX 04/04 JPY OT OT LUX 04/04 JPY OT OT LUX 04/04 USD OT OT LUX 04/04 EUR

OT OT OT OT OT GL

OT OT OT OT OT EQ

CYM USA USA USA USA CYM

02/28 10/31 02/28 02/28 05/29 02/28

USD USD USD USD USD USD

103.48 129.92 114.52 117.39 35.02 NS

FUND NAME

NAV GF AT LB DATE CR

Platinm-Nordic Platinm-Premier Platinm-Turnberry

OT OT CYM 02/28 SEK OT OT CYM 12/31 USD OT OT USA 02/28 USD

NAV 628.58 NS 60.14

—%RETURN— YTD 12-MO 2-YR -6.0 NS -1.2

3.4 NS -3.0

8.6 NS NS

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*

GL GL GL GL GL

OT OT OT OT OT

CYM LUX CYM CYM AUT

03/31 03/31 03/31 03/31 03/31

USD USD USD USD EUR

NS 2606.86 1322.88 1300.74 NS

3.1 1.4 0.9 1.3 0.4

28.5 13.9 31.4 31.4 7.2

-16.2 -14.7 5.8 -2.3 -7.0

3.1 3.1 3.1 1.6 1.6 1.6 1.6

17.8 17.8 18.1 16.5 16.6 16.4 16.7

5.3 5.7 5.4 4.8 5.1 4.4 4.9

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

GAMStar-JpnEq JPY Acc GAMStar-JpnEq USD Acc

NAV GF AT LB DATE CR

[ALTERNATIVE INVESTMENT FUNDS www.WSJ.com] Advertisement

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

CPS-Master Priv Fund

FUND NAME

1.5 NS -1.5 5.8 -18.2 2.3

5.7 NS 4.1 24.1 -63.7 23.6

10.7 NS 10.3 30.6 -45.6 38.1

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

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

GL GL GL GL GL GL GL

OT OT OT OT OT OT OT

CYM CYM CYM VGB VGB VGB VGB

02/28 02/28 02/28 02/28 02/28 02/28 02/28

EUR NS GBP NS USD NS EUR 228.31 GBP 247.50 JPY 16111.36 USD 813.20

THE WALL STREET JOURNAL.

Wednesday, April 6, 2011

27

**

INTERNATIONAL INVESTOR

Tech stocks lead Car makers weigh on Tokyo blue-chip gains BY V. PHANI KUMAR AND SHRI NAVARATNAM

BY BRENDAN CONWAY

72% after Texas Instruments said late Monday that it will buy the group for $6.5 billion in cash, or $25 a share. Texas Instruments rose 2%. Diamond Foods rose 6.6% after agreeing to a $1.5 billion merger with Proctor & Gamble’s Pringles brand. P&G shed 0.8%. KB Home fell 4.3% as the builder’s fiscal first-quarter loss widened sharply and plunging orders led to a bigger revenue drop than analysts had predicted. Charges also weighed on the bottom line.

NEW YORK—U.S. stocks held modest gains after minutes from the Federal Reserve’s last meeting offered investors little fresh insight. The Dow Jones Industrial Average rose 18 points, or 0.2%, to 12418 in afternoon trade, led by Alcoa, which gained 2.4%, and Cisco Systems, up 2.2%. The ABREAST OF Standard & Poor’s THE MARKET 500 index rose 2 points to 1335, led by materials and energy stocks. The Nasdaq Composite gained 0.4% to 2800. The minutes from the March 15 meeting of the Federal Open Market Committee highlighted several of the same concerns raised by central bankers in recent weeks. Some members noted the state of the economy may warrant less easy money, while others said that “exceptional’ accommodations might be appropriate beyond 2011.” Monday evening, Fed Chairman Ben Bernanke downplayed inflation fears, calling the recent increase in global commodity prices “transitory.” He predicted that prices “will eventually stabilize.” The comments followed hawkish-sounding remarks from Fed regional-bank presidents last week that the central bank may need to tighten policy sooner than expected. Apple was fractionally lower after Nasdaq OMX said a rebalancing of the Nasdaq 100 will reduce the technology giant’s weighting in the index from more than 20% to a little more than 12%. In addition to weighing on the iPod-maker’s shares, the rebalancing could make some traders better appreciate stocks such as Microsoft and Cisco, according to Joe Saluzzi, co-head of equity trading at Themis Trading. Microsoft, which will have a bigger weighting in the index, gained 1.2%. National Semiconductor surged

European stocks A rally in technology shares on the back of the Texas Instruments deal for National Semiconductor pushed up European benchmarks. The Stoxx Europe 600 index gained 0.2% to 280.91. German chip maker Infineon Technologies rose 3.9% in Frankfurt, STMicroelectronics advanced 2.5% in Paris, and British microchip designer ARM Holdings gained 2.6% in London. Analysts at Cheuvreux said the likes of STMicroelectronics and Infineon are likely to play the role of consolidators, targeting smaller vendors such as Dialog Semiconductor, Micronas Semiconductor Holding, Elmos Semiconductor, CSR, Nordic Semiconductor and Wolfson Microelectronics. Wolfson surged 5.1% and CSR advanced 3.1% in London, and Nordic gained 2.8% in Oslo. In Frankfurt, Dialog jumped 4.6% and Elmos gained 3.7%. Bayer fell 3.6% in Frankfurt after a study of the German firm’s and Johnson & Johnson’s anti-clotting drug rivaroxaban showed it prevented clots but raised bleeding rates in some patients. Siemens declined 1.3% in Frankfurt after the industrial conglomerate said second-quarter profit from continuing operations would fall short of that achieved in the first quarter.

Renaissance Hgh Grade Bd A Renaissance Hgh Grade Bd B Renaissance Hgh Grade Bd C Renaissance Hgh Grade Bd D

NAV GF AT LB DATE CR JP JP JP JP

BD BD BD BD

LUX LUX LUX LUX

04/04 04/04 04/04 04/04

JPY JPY USD EUR

NAV 10438.94 9847.08 104.22 107.40

—%RETURN— YTD 12-MO 2-YR 4.3 12.3 10.2 1.9

LIST YOUR FUNDS

3.3 2.0 12.0 6.0

AS AS AS AS AS AS AS AS EA EA AS OT AS AS OT AS OT OT EU GL GL OT OT GL GL OT OT GL GL GL GL GL GL GL EE

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

04/04 04/04 04/04 04/04 04/04 04/04 04/04 04/04 04/04 04/04 04/04 04/04 04/04 04/04 04/04 04/04 04/04 04/04 04/04 04/04 04/04 04/04 04/04 04/04 04/04 04/04 04/04 04/04 04/04 04/04 04/04 04/04 04/04 04/04 04/04

SGD USD SGD USD SGD USD SGD USD SGD USD USD USD SGD USD USD USD USD SGD EUR SGD USD SGD USD SGD USD USD USD SGD USD EUR SGD USD SGD USD USD

15.79 16.45 15.27 21.46 13.69 52.66 15.05 29.89 15.86 28.46 11.98 16.63 15.99 33.90 11.18 11.04 11.95 14.42 35.24 15.44 66.42 13.28 23.35 15.25 33.91 9.32 16.62 15.19 14.20 21.50 26.60 21.77 14.85 46.80 17.64

0.1 2.4 1.5 3.1 3.7 5.4 0.4 2.0 -3.9 -2.3 5.5 -2.5 -1.6 0.0 -6.1 1.9 -0.5 -2.7 1.1 0.8 2.4 -9.7 -7.6 -0.5 1.0 3.3 4.6 4.3 5.9 -5.4 -1.1 0.5 -3.3 -1.0 9.0

In print & online. Contact:

NAV GF AT LB DATE CR

¥4,000 3,750 3,500 3,250 3,000

Jan.

Feb.

after the company on Monday began dumping radioactive water from the Fukushima Daiichi nuclear-power plant into the Pacific Ocean. The move, which Japan’s Chief Cabinet Secretary Yukio Edano said was “unavoidable” because of the limited options available to store the water, dissipated hopes of a near-term resolution to the nuclear crisis. Shares of Tepco also were pressured after the utility said it would delay the release of its financial re-

Continued from page 19 The insurer stressed that claims would be processed more quickly in the near future, as it turns to alternative ways of assessing damage, including using Apple Inc.’s iPads equipped with cameras. Mr. Hernandez said the iPads helped Chartis conduct as many as 30 surveys in a day, more than twice the number as earlier. Instead of engineers and surveyors going to the sites, inspectors can show the specialists images remotely. Insurance companies world-wide could face losses of between $20 billion and $30 billion as a result of Japan’s earthquake and tsunami, Boston-based risk-modeling agency

NAV

—%RETURN— YTD 12-MO 2-YR

AIR Worldwide said late last month. AIG, the oldest and largest foreign insurer by direct premiums operating in Japan, has estimated its property-and-casualty business would have to pay $700 million in claims, on top of the $500 million in catastrophe reserves its Japanese operations earlier established for earthquake damage to people’s homes. Chartis said that it has received about 31,000 claims calls, and has paid about 6% of its total claims outstanding as of Monday. Mr. Hernandez declined to disclose the total value of the claims. Tokio Marine Holdings Inc., Japan’s largest nonlife insurer by market capitalization, said the company

[email protected]

has received about 80,000 claims since the quake. Japan’s third largest, NKSJ Holdings Inc. received about 85,000 claims as of March 28. Neither company has said how many claims have been paid. Mr. Hernandez said that smallbusiness owners, in particular, were going to be hard hit by the natural disaster. “Small-business owners are a big concern for us. They are a big segment of the market we go after in Japan. If we get the small enterprises in Japan back on their feet, that’s the best effort we can do in getting the economy back on its feet.” —Atsuko Fukase contributed to this article.

INTERNATIONAL INVESTMENT FUNDS

FUND NAME

NAV GF AT LB DATE CR

NAV

—%RETURN— YTD 12-MO 2-YR

FUND NAME

Advertisement

NAV GF AT LB DATE CR

NAV

—%RETURN— YTD 12-MO 2-YR

n WEBSITE: WWW.VALUEPARTNERS.COM.HK, TEL: (852) 2880 9263, FAX: (852) 2564 8487 *formerly known as China ABH Shares Fund

Asia Value Formula Fd-B

NS NS NS 37.7 NS 28.9 NS 34.1 NS 47.7 44.8 26.1 NS 50.8 44.8 NS 48.5 NS 60.7 NS 52.0 NS 27.1 NS 38.3 43.8 NS NS 28.1 53.0 NS 57.6 NS 51.1 76.5

sults. The stock’s value has fallen more than 80% since the March 11 earthquake and tsunami. Toyota Motor fell 2.4% after the Associated Press reported the car maker will temporarily shut down all of its North American plants owing to earthquake- and tsunami-related disruptions to its parts suppliers. Honda Motor declined 2.5% and Nissan Motor fell 2.2%. In Sydney, miner Equinox Minerals advanced a further 1.1% on top of its 29% surge in the previous session, after China’s Minmetals Resources launched a $6.5 billion offer for the company. Extract Resources rose 3.1% after the company said a feasibility study indicated its Husab uranium deposit in Namibia could be developed into one of the largest uranium mines in the world. Late trading in Sydney was dominated by news that Australian Treasurer Wayne Swan was inclined to reject SGX’s proposed takeover offer for ASX to protect “national interest.” In Seoul, auto makers advanced on hopes they will benefit from the Japanese car industry’s troubles. Hyundai Motor and Kia Motors each added 1.2%.

Japan earthquake claims slow to be paid

n SENSIBLE ASSET MANAGEMENT LIMITED www.samfund.com.hk Tel: (852) 2868 6848 Fax: (852) 2810 9948

NS 34.2 NS 14.3 0.3 11.2 6.7 18.2 3.3 14.6 33.9 4.5 9.5 21.5 16.0 10.5 12.8 NS 11.7 NS 17.3 NS 4.9 2.3 13.4 21.0 13.7 2.4 13.5 23.5 17.4 30.0 NS 13.6 21.2

March

Source: Thomson Reuters Datastream

NS NS NS NS

n J.P. MORGAN ASSET MANAGEMENT For additional fund prices, please visit www.jpmorganam.com.sg Tel: +65 6882 1328 JF ASEAN Eq (SGD)A(acc) JF ASEAN Eq (USD)A(acc) JF Asia Pac ex-Jap Eq(SGD)A(acc) JF Asia Pac ex-Jp (USD)A(acc) JF China (SGD)A(acc) JF China (USD)A(dist) JF Greater China (SGD)A(acc) JF Greater China (USD)A(dist) JF India (SGD)A(acc) JF India (USD)A(acc) JF Korea Equity (USD) A (acc) JF Pacific Tech (USD) A (acc) JF Singapore (SGD)A(acc) JF Singapore (USD)A(dist) JPM Africa (USD) A (acc) JPM Asia Pac Bond (USD)A(acc) JPM Brazil Alpha+ (USD)A(acc) JPM Brazil Alpha+(SGD)A(acc) JPM East Eur (EUR)A(dist)(JF) JPM Emerg EMEA (SGD)A(acc) JPM Emerg EMEA (USD)A(dist) JPM Emerg Mid East Eq(SGD)A(acc) JPM Emerg Mid East(USD)A(dist) JPM Emerg Mkt Eq (SGD)A(acc) JPM Emerg Mkt Eq (USD)A(dist) JPM Emerg Mkt Infra(USD)A(acc) JPM Emerg Mkt LC Debt(USD)A(mth) JPM Glb Dyn (SGD)A(acc) JPM Glb Dyn (USD)A(dist)(JF) JPM Glb Nat Res (EUR)A(dist) JPM Glb Nat Res (SGD)A(acc) JPM Glb Nat Res (USD)A(acc) JPM Latin Amer Eq(SGD)A(acc) JPM Latin Amer Eq(USD)A(dist)JF JPM Russia (USD) A (dist)

FUND NAME

Tuesday: ¥3,260, down 2.4% Year-to-date change: up 1.2%

Japanese stocks retreated on signs the nation’s nuclear crisis may not be resolved in the near term, while car makers fell on uncertainty over parts sourcing. Stocks in Sydney advanced as the recent strength in commodity prices and merger-andASIAN-PACIFIC acquisition activSTOCKS ity attracted buyers, but exchange operator ASX skidded 3.3% after saying Australia is likely to reject Singapore Exchange’s proposed takeover. Shares of Singapore Exchange jumped 4%. The Nikkei Stock Average slid 1.1% to 9615.55. Australia’s S&P/ASX 200 rose 0.3% to 4900.13. South Korea’s Kospi climbed 0.7% to a record 2130.43, the eighth advance in the past nine sessions. Singapore’s Straits Times index tacked on 0.2% to 3146.75. India’s Sensex slipped 0.1% to 19686.82, after having risen in nine of the previous 10 sessions. Stock markets in China, Hong Kong and Taiwan were closed for a holiday. In Japan, Tokyo Electric Power shares plunged 18% to a record low

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

Toyota Motor

OT

OT CYM 04/01 USD

n MANULIFE ASSET MANAGEMENT TEL:(852)2108 1110 n SGAM FUND Internet:http://www.manulife.com.hk 47/F Manulife Plaza, Causeway Bay, Hong Kong AMUNDI HONG KONG LIMITED American Growth US EQ LUX 04/05 USD 18.51 7.4 17.0 27.8 Hotline in Hong Kong (852) 2521 4231 American Growth AA US EQ LUX 04/05 USD 1.06 7.3 16.7 27.4 Asian Equity Asian Equity AA Asian Sm Cap Equity AA China Value A China Value AA Dragon Growth Dragon Growth AA Emg Eastrn Europe A Emg Eastrn Europe AA European Growth European Growth AA Global Contrarain AA Global Property AA Global Resources AA Healthcare AA India Equity AA International Growth International Growth AA Japanese Growth Japanese Growth AA Latin America Equity AA Manulife GF Strategic Income Fund AA MGF Asia Value Dividend Equity Fund Russia Equity AA Taiwan Equity AA Turkey Equity AA U.S. Bond AA U.S. Sm Cap Equity AA U.S. Special Opportunities U.S. Tsy Inf-ProtSec AA

OT OT OT AS AS AS AS EU EU EU EU GL OT GL OT EA GL GL JP JP GL OT OT EE AS OT US US US OT

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

04/05 04/05 04/05 04/05 04/05 04/05 04/05 04/05 04/05 04/05 04/05 04/05 04/05 04/05 04/05 04/05 04/05 04/05 04/05 04/05 04/05 04/05 04/05 04/05 04/05 04/05 04/05 04/05 04/05 04/05

USD USD USD USD USD USD HKD USD USD USD USD USD USD USD USD USD USD USD USD USD USD USD USD USD USD USD USD USD USD USD

3.05 0.98 1.65 8.67 2.72 1.86 9.05 6.02 2.58 10.32 0.74 1.22 0.82 1.36 1.09 1.27 3.40 0.79 2.80 0.72 1.48 1.13 1.43 0.92 1.27 1.04 1.19 1.10 1.02 1.22

6.4 6.3 4.8 4.8 4.7 4.8 4.7 12.3 12.2 7.2 7.1 4.3 3.4 5.3 7.7 -3.9 5.5 5.4 -7.2 -7.1 1.4 3.0 3.6 12.2 -2.0 4.4 1.9 3.4 1.3 2.7

22.5 22.2 32.5 22.9 22.6 12.8 12.6 21.7 21.5 14.3 14.0 29.2 17.4 24.8 8.5 12.0 8.4 8.2 -4.1 -6.1 13.9 10.6 21.9 26.2 21.5 25.9 7.8 17.5 15.6 7.4

38.1 37.6 64.2 38.2 37.9 32.7 32.6 56.1 55.9 29.8 29.5 53.5 40.9 32.3 21.0 41.6 20.9 20.6 11.0 10.1 45.7 NS NS 64.1 37.8 70.6 13.7 42.3 52.8 6.4

n PT CIPTADANA ASSET MANAGEMENT Tel: +62 21 25574 883 Fax: +62 21 25574 893 Website: www.ciptadana.com Indonesian Grth Fund

GL EQ BMU 03/30 USD

180.76

-0.7

28.4

73.3

Bonds US OppsCoreplus A Bonds World A Eq. AsiaPac Dual Strategies A Eq. China A Eq. Global Energy A Eq. Global Resources A Eq. Gold Mines A Eq. India A Eq. Luxury & Lifestyle EURO A Eq. Luxury & Lifestyle USD A Eq. MENA EURO A Eq. MENA USD A Eq. US Rel Val A Money Market EURO A Money Market USD A

US OT AS AS OT GL OT EA OT OT OT OT US EU US

BD OT EQ EQ EQ EQ EQ EQ EQ EQ OT OT EQ MM MM

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

04/01 04/01 04/04 04/04 04/01 04/01 04/01 04/04 04/01 04/01 04/04 04/04 04/01 04/01 04/01

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

Intel-Chin Mainlnd Foc Intel-China Converg* VP Classic - A VP CLassic - B VP High Dividend Stk

10.86

2.7

28.4

54.5

40.69 43.45 12.10 25.13 21.82 139.63 39.05 149.85 88.71 125.49 38.79 55.08 25.38 27.58 15.89

1.2 -0.4 2.3 3.7 12.9 5.2 -3.9 -4.4 -1.2 -1.2 -4.6 -4.6 7.5 0.2 0.1

8.8 6.2 13.8 6.5 19.8 24.5 25.6 10.9 25.0 25.0 -0.7 -0.7 16.1 0.6 0.3

12.0 7.8 36.3 26.2 28.1 36.0 27.6 41.1 49.3 49.3 21.5 21.5 33.6 0.6 0.3

AS AS AS AS OT

EQ CYM EQ CYM EQ CYM EQ CYM OT CYM

03/31 03/31 04/01 04/01 03/28

USD USD USD USD USD

37.45 139.05 230.80 106.90 57.93

1.3 0.5 3.0 2.8 1.3

22.7 19.5 18.3 17.7 21.8

48.5 46.4 46.4 45.6 49.3

JP EQ IRL 04/05 JPY

9139.00

-3.0

-8.1

6.9

JP EQ IRL 04/05 JPY JP EQ IRL 04/27 JPY

5580.00 5230.34

-3.5 -7.3

-13.0 -5.4

-1.5 -27.3

6382.00 7667.00

-4.9 -2.7

-12.6 -10.1

2.6 2.9

4172.00 4840.00 4748.00

-3.4 -4.0 -4.6

-16.2 -15.4 -8.6

-0.2 1.0 6.8

3923.00 4172.00 6195.00 8313.00 6005.00 7214.00 4721.00 10923.00 6991.00 6784.00 5342.00 2353.00

-3.4 -4.4 -3.1 -3.0 -4.1 -3.9 -4.8 -4.5 -4.4 -3.2 -4.3 -6.3

-15.4 -14.2 -14.5 -10.4 -8.5 -11.9 -14.9 -13.9 -14.3 -6.6 -12.2 -16.8

-0.4 0.0 2.3 3.6 2.2 -0.2 0.5 3.0 -1.0 11.1 3.3 2.5

n YUKI MANAGEMENT & RESEARCH n YMR-N Series YMR-N Growth Fund

n Yuki 77 Series Yuki 77 General Yuki 77 Growth

n Yuki Chugoku Series Yuki Chugoku Jpn Gen Yuki Chugoku JpnLowP

JP EQ IRL 04/05 JPY JP EQ IRL 04/05 JPY

n Yuki Hokuyo Japan Series Yuki Hokuyo Jpn Gen Yuki Hokuyo Jpn Inc Yuki Hokuyo Jpn Sm Cap

n THE NATIONAL INVESTOR TNI Tower | Zayed 1st Street Khalidia| Web:www.tni.ae TNI Mena Real Estate Fund TNI MENA Special Sits Fund TNI MENA UCITS Fund TNI UAE Blue Chip Fund

OT EQ BMU 03/24 USD OT OT BMU 02/28 USD OT OT IRL 03/24 USD OT OT ARE 03/24 AED

760.83 1066.09 1009.30 4.85

n Yuki Mizuho Series -8.2 -7.1 -8.2 -4.0

-18.0 -3.9 NS -8.1

-5.5 5.6 NS 4.5

Yuki Mizuho Gen Jpn III Yuki Mizuho Jpn Dyn Gro Yuki Mizuho Jpn Exc 100 Yuki Mizuho Jpn Gen Yuki Mizuho Jpn Gro Yuki Mizuho Jpn Inc Yuki Mizuho Jpn Lg Cap Yuki Mizuho Jpn LowP Yuki Mizuho Jpn PGth Yuki Mizuho Jpn SmCp Yuki Mizuho Jpn Val Sel Yuki Mizuho Jpn YoungCo

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

JP EQ IRL 04/05 JPY JP EQ IRL 04/05 JPY JP EQ IRL 04/05 JPY

JP JP JP JP JP JP JP JP JP JP AS AS

EQ EQ EQ EQ EQ EQ EQ EQ EQ EQ EQ EQ

IRL IRL IRL IRL IRL IRL IRL IRL IRL IRL IRL IRL

04/05 04/05 04/05 04/05 04/05 04/05 04/05 04/05 04/05 04/05 04/05 04/05

JPY JPY JPY JPY JPY JPY JPY JPY JPY JPY JPY JPY

28

THE WALL STREET JOURNAL.

Wednesday, April 6, 2011

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

Major players
benchmarks 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

Giants around the world

In U.S.-dollar terms.

Company

Country

Industry

QBE Insurance Group

Australia

Reinsurance

Market value, in billions of US$

Previous close, in local currency

$20.6

19.00

STOCK PERFORMANCE Previous session

52-week

5.50%

Three-year

-9.6%

-24.6%

Japan Tobacco

Japan

Tobacco

34.6

304,500

1.94

-9.6

-41.4

BHP Billiton

Australia

General Mining

164.5

47.55

1.43

8.2

23.2

Rio Tinto Ltd.

Australia

General Mining

38.7

86.16

0.77

8.2

-34.2

Aus NZ Bk

Australia

Banks

64.1

23.94

0.34

-5.3

1.6

Tokyo Elec Power

Japan

Electricity

$6.9

362.00

-85.2

-87.3

Dow Jones Country Titans INDEX PERFORMANCE Previous session

Russia

Year-to-date

11.3%

-0.39%

Spain

-0.95

Italy

unch.

10.0 7.4

Honda Motor

Japan

Automobiles

62.6

2,934

-2.52

-13.2

0.5

Toyota Motor

Japan

Automobiles

121.5

3,260

-2.40

-14.5

-34.7

-1.0

Nissan Motor

Japan

Automobiles

35.4

715.00

-2.19

-13.3

-15.7

Kansai Elec Power

Japan

Electricity

18.6

1,738

-1.75

-17.1

-34.2

-5.7

Hong Kong

Closed

6.6

China 88

Closed

6.3

-8.0

Canada

-0.08

5.7

14.0

France

-0.57

5.5

-1.1

Brazil

-0.11

5.2

10.4

Netherlands

-0.40

4.8

4.0

South Korea

0.78

4.1

22.6

Australia

0.14

3.7

-2.6

Germany

-0.53

2.8

10.5

U.K.

-0.35

1.9

2.6

14.8

Turkey

0.28

1.2

14.2

Switzerland

-0.35

0.8

-5.6

Sweden

-0.38

-0.2%

11.6

South Africa

-0.08

-0.3

10.1

Singapore

0.22

-0.8

Japan

-1.39

...And the rest of Asia's blue chips Takeda Pharm 36.4 Japan (Pharmaceuticals) Westpac Bking 75.0 Australia (Banks) National Australia Bk 58.3 Australia (Banks) China Mobile (HK) 190.0 Hong Kong (Mobile Telecommunications) Indl Comm Bk China 74.6 Hong Kong (Banks) Shinhan Financial Grp 22.5 South Korea (Banks) Bank of China 47.5 Hong Kong (Banks) China Construction Bank 232.5 Hong Kong (Banks) China Life Insurance 28.6 Hong Kong (Life Insurance) Cheung Kong 38.7 Hong Kong (Real Estate Holding Development) Sun Hung Kai Prop 41.9 Hong Kong (Real Estate Holding Development) Taiwan Smcndtr Mfg 62.6 Taiwan (Semiconductors) Samsung Electronics 112.6 South Korea (Semiconductors) CNOOC 119.8 Hong Kong (Exploration Production) PetroChina 32.7 Hong Kong (Integrated Oil Gas) Shin-Etsu Chml 20.3 Japan (Specialty Chemicals) POSCO 35.8 South Korea (Steel) Hon Hai Precision Ind 35.0 Taiwan (Electrical Components Equipment) Westfield Grp 22.2 Australia (Retail) Reliance Industries 77.8 India (Exploration Production)

-16.7

Dow Jones Regional Sector Titans Oil Gas

14.9%

0.02% 9.5

20.0%

Media

-0.55

Insurance

-0.39

8.6

3.4

Ind Gds Svcs

-0.91

8.2

17.8

Chemicals

-0.80

8.0

29.9

Constructn Mat

-0.70

7.0

Tiger 50*

0.11

5.7

Global 50

-0.17

5.2

Asian 50

-0.83

Arab 50

0.67

19.0

9.9 17.2 6.5

-3.2%

-0.7

-8.4

Market value, in billions (U.S)

Company/Country (Industry)

8.7

-7.0

-18.10%

26.3%

52-week

-4.1

*Asia excluding Japan

Latest, in local currency

STOCK PERFORMANCE Latest 52-week Three-year

3,895

0.13%

24.33

0.04

-12.9

26.06

0.04

-5.8

-16.2

73.65

Closed

-2.5

-40.5

6.68

Closed

12.5

15.8

51,500

...

11.5

-5.7

4.42

Closed

9.5

29.1

7.52

Closed

19.3

18.9

29.85

Closed

-21.4

0.8

129.90

Closed

26.7

8.3

127.10

Closed

8.1

-4.6

70.70

Closed

13.3

9.8

945,000

...

8.6

45.4

20.85

Closed

59.4

70.6

12.04

Closed

30.3

15.3

-4.5%

Company/Country (Industry)

Commonwlth Bk of Aus Australia (Banks) East Japan Railway Japan (Travel Tourism) Woolworths Australia (Food Retailers Wholesalers) Sony Japan (Consumer Electronics) Mizuho Financial Grp Japan (Banks) Mitsubishi UFJ Finl Japan (Banks) Nippon T&T Japan (Fixed Line Telecommunications) JFE Hldgs Japan (Steel) Mitsui Japan (Industrial Suppliers) Mitsubishi Japan (Industrial Suppliers) NTT DoCoMo Japan (Mobile Telecommunications) Woodside Petroleum Australia (Exploration Production) Nintendo Japan (Toys) Tokio Marine Hldgs Japan (Property Casualty Insurance) Canon Japan (Electronic Office Equipment) Panasonic Japan (Consumer Electronics) Sumitomo Mitsui Finl Japan (Banks) Nippon Steel Japan (Steel) KDDI Japan (Mobile Telecommunications) Seven I Hldgs Japan (Broadline Retailers)

-29.8% -3.2

4,045

...

-29.0

-29.9

505,000

...

-9.5

-2.3

106.00

Closed

-14.9

-33.1

9.34

-0.11

0.0

-33.8

47.60

-0.29

-3.2

-19.6

Market value, in billions (U.S)

52.25

-0.36%

21.2

4,535

-0.44

14.9%

-29.8

-99.5

33.5

26.79

-0.59

-5.0

-12.7

30.9

2,622

-0.68

-27.3

-38.5

33.5

131.00

-0.76

-28.0

-100.0

63.9

382.00

-0.78

-21.7

-61.3

58.3

3,725

-0.80

-4.5

-99.2

14.7

2,341

-0.93

-39.0

-49.3

32.1

1,499

-0.99

-7.8

-29.5

45.5

2,339

-1.06

-6.0

-28.0

71.9

145,400

-1.09

0.8

-7.4

37.8

47.14

-1.19

0.5

-15.9

33.2

21,900

-1.26

-33.2

-59.7

21.1

2,262

-1.35

-16.7

-47.4

52.6

3,600

-1.37

-20.2

-26.4

28.5

1,040

-1.42

-29.6

-51.5

42.1

2,545

-1.47

-17.8

-99.7

19.4

260.00

-1.52

-29.5

-50.9

27.0

515,000

-1.53

7.2

-22.4

21.4

2,045

-1.59

-13.7

-25.4

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: 15/1 Eur. High Volatility: 15/1 Europe Crossover: 15/1 Asia ex-Japan IG: 15/1 Japan: 15/1

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

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

Coupon

And the most deterioration

CHANGE, in basis points

CHANGE, in basis points

100.14%

0.01%

1.04

0.97

1.02

1.35

98.37

0.01

1.42

1.35

1.40

Hysan Dev

62

–8

–8

–5

Japan Tob

45

3

1

9

3.68

105.55

0.05

3.93

3.68

3.83

Hitachi

103

–12

4

40

KDDI

48

2

2

13

1.04

99.79

0.01

1.16

1.04

1.11

DENSO

54

–5

2

3

Mizuho Corporate

148

6

10

49

1.38

98.13

0.01

1.43

1.38

1.40

Fujitsu

75

–6

–1

18

Mazda

144

4

12

28

Sony

78

–6

1

21

Nippon Telegraph Tel

42

1

3

13

Bridgestone

51

–4

1

11

Renesas Electrs

182

5

14

34

Nippon Sheet Glass

In percentage points

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

Showing the biggest improvement...

0.97

Index roll

2.00 1.50

Australia t

1.00

t

— NOTICE TO READERS —

-8.0%

Sources: Dow Jones Indexes; WSJ Market Data Group

Note: Data as of April 4

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

82.7

Source: Dow Jones Indexes

Tracking credit markets
dealmakers

Latest, in local currency

Yesterday Yesterday Five-day 28-day

Canon

Yesterday Yesterday Five-day 28-day

37

–3

–1

8

168

4

...

17

Sumitomo Mitsui

106

–6

4

30

SANYO Elec

56

1

4

15

Victor Co of Japan

627

–34

–56

73

MISC

70

2

–8

–3

82

–4

5

22

Sekisui House

71

1

4

15

Oji Paper

Source: Markit Group

0.50

Asia ex-Japan IG

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

WSJ.com 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.

Europe, Middle East & Africa: Bank revenues from equity capital markets Behind every IPO, follow-on or convertible equity offering is one or more investment banks. At right, investment banks historical and yearto-date revenues from global equitycapital-market (ECM) deals

n Equity capital markets n Debt capital markets (both in billions, left axis) 6

60%

ECM as a percentage of total (right axis) t

4

40

2

20

0

0 2005

2006

2007

2008

2009

2010

2011 Source: Dealogic

THE WALL STREET JOURNAL.

Wednesday, April 6, 2011

29

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

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)

3.75 -10.00 -7.75 -1.400 -47 6.35 -0.31 -2.55 -16 -41 62

427.65 3900.50 1450.30 2,626.00 31,400.00 9,271.00 2,720.00 2,411.00 25,175

2.15 51.10 17.30 -14.00 -300.00 -164.00 -45.00 -7.00 -470

108.41 3.1885 3.1947 4.283 122.00 1,017.00

-0.06 0.0171 0.0259 -0.006 1.34 11.50

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

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

COMEX COMEX COMEX LME LME LME LME LME LME

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

764.00 1374.00 819.00 119.500 2,992 262.40 25.62 193.00 3,366.00 1,914 2,370

CBOT CBOT

NYMEX NYMEX NYMEX NYMEX ICE-EU ICE-EU

766.25 1,467.50 1,036.00 121.625 3,710 296.65 29.75 219.70 3,872 2,348 2,543

0.49% -0.72% -0.94 -1.16 -1.55 2.48 -1.20 -1.30 -0.47 -2.10 2.69

Contract low

366.50 909.25 540.00 89.575 2,670 133.75 11.82 68.05 3,163 1,837 1,604

465.75 280.00 1,450.00 775.00 3,899.00 18.50 2,640.00 1,857.00 32,590.00 15,925.00 10,123.00 6,120.00 2,765.00 1,580.00 2,584.00 1,617.00 29,050 18,005

0.51 1.33 1.21 -0.53 -0.95 -1.74 -1.63 -0.29 -1.83

129.16 3.5800 3.1937 10.050 134.60 1,019.25

-0.06 0.54 0.82 -0.14 1.11 1.14

66.00 1.6000 2.0122 3.805 58.40 637.00

Source: Thomson Reuters; WSJ Market Data Group

WSJ.com

PREVIOUS SESSION

Region/Country Index

Close

ASIA-PACIFIC DJ Asia-Pacific

14

Net change

139.46

-1.02

...

Australia

SPX/ASX 200

4900.13

13.29

...

China

CBN 600

27725.61

Hong Kong

Hang Seng

24150.58

India

Sensex

19686.82 3685.936

-14.111

9615.55

-103.34

847.16

-12.59

1553.07

-2.41

Indonesia

Jakarta Composite

Japan

Nikkei Stock Average

...

Topix

-0.73% 0.27% Closed

13 ...

Percentage change

Closed

18 ...

4.0538 0.2467 1.6074 0.6221 0.9647 1.0366 0.9653 1.0360 0.9667 1.0345 0.9692 1.0318 474.25 0.002109 1836.10 0.0005446 1 1 11.8393 0.0845 2.8075 0.3562 19.100 0.0524 1 1 4.29 0.232848

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

1.3731 0.7283 9.3011 0.1075 11.0413 0.0906 63.0489 0.0159 12305 0.0000813 120.09 0.008327 120.07 0.008328 120.02 0.008332 119.92 0.008339 4.2991 0.2326 1.8436 0.5424 121.240 0.0082 61.593 0.0162 1.7909 0.5584 1545.29 0.0006471 41.546 0.02407 42.892 0.02331

0.9666 6.5478 7.7728 44.3850 8663 84.54 84.53 84.49 84.42 3.0265 1.2979 85.350 43.360 1.2608 1087.85 29.248 30.195

In euros

-0.08

-14.91

-0.38 -1.06 -1.46 -0.15

PERFORMANCE Yr.-to-date 52-wk. -2.2%

7.0%

3.3

-1.1

13

3.8

-2.2

19

4.8

12.1

-4.0

9.7

436.50

1.61

14

Finland

OMX Helsinki

7607.46

12.21

12

France

CAC-40

4041.74

-1.18

-0.5

27.9

13

Germany

DAX

-6.0

-14.8

12

Italy

FTSE MIB

-5.7

-14.5

12

Netherlands

1.5829

2.2

15.5

...

0.16

5.7

-1.1

2.2

19.3

-0.7

2.3

6.2

-0.3

3.8

14.8

9.3

-5.5

-0.03 unch.

2088.64

-6.61

Spain

IBEX 35

10678.6

-77.5

Switzerland

SMI

6430.30

15.70

67689.46

107.51

6007.06

-9.92

-0.16

1.8

3.9

362.21

-0.37

-0.10

6.3

14.0

69860.02

156.22

3528.27

14.93

37908.20

4.62

4.8

9

0.24

10

14

Philippines

Manila Composite

4167.09

-42.34

-0.8

28.1

...

Turkey

ISE National 100

...

Singapore

Straits Times

3146.75

6.13

-1.4

5.8

13

U.K.

FTSE 100

11

South Korea

Kospi

2130.43

14.56

3.9

23.4

18

AMERICAS

DJ Americas

15

Taiwan

Weighted

8705.13

10

Thailand

SET

1076.13

-2.53

16

EUROPE

Stoxx Europe 600

280.80

0.54

0.19

Stoxx Europe 50

2624.61

3.83

0.15

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

0.37%

RTSI

14.2

-0.23

-0.14

Russia

4.8

0.69

-0.09%

PERFORMANCE Yr.-to-date 52-wk. 5.2% 2.2%

-0.05

-1.0

Closed

Percentage change

368.96

0.29

-3.0

7.6

...

Brazil

Bovespa

4.2

33.2

...

Argentina

Merval

1.8

4.3

11

Mexico

IPC

1.5

-2.0

0.23 -0.01 -0.32

4.1

3.8

18.0

27.9

-0.72

8.3

-4.3

0.24

-0.1

-6.6

0.16

2.6

15.9

0.22

0.8

-2.3

0.1

42.8

-1.7

12.3

0.42 0.01

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.

Sources: Thomson Reuters; WSJ Market Data Group

Dow Jones Indexes

MSCI indexes Last

Net change

Global TSM 2726.82 -9.33 Global DOW 2195.75 -9.88 Global Titans 50 186.25 -0.31 Asia/Pacific TSM 1380.53 -9.90 Asia/Pacific ex-Japan TSM 3704.61 4.52 Europe TSM 2953.22 -14.52 Emerging Markets TSM 4945.32 5.36 Asian Titans 50 141.12 -1.19 BRIC 50 697.93 0.24 CBN China 600 -c 27725.61 ... China Offshore 50 4627.43 -4.32 Shanghai -c 376.38 ...

Price-toDividend earnings yield* ratio* Dows Jones Index

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

Daily

-0.34% -0.45 -0.17 -0.71 0.12 -0.49 0.11 -0.83 0.03 ... -0.09 ...

4.5% 5.2 5.2 -2.1 2.6 7.5 3.1 -3.2 6.6 3.8 9.0 5.7

11.9% 7.3 6.5 7.1 15.3 11.0 14.5 -0.7 12.5 -2.2 13.4 -2.0

-2.0% -5.6 -5.9 -1.8 2.2 -7.1 1.4 -4.9 1.4 -1.3 0.9 -0.4

2.27% 17 1.72 19 4.83 12 5.94 11 3.82 6 3.94 15 1.56 17 1.92 15 2.44 16 1.23 20 3.16 21

Last

Shenzhen -c 441.45 U.S. TSM 13968.19 Global Select Div -d 227.96 Asia/Pacific Select Div -d 304.88 Hong Kong Select Div -d 226.93 U.S. Select Dividend -d 376.90 Islamic Market 2343.70 Islamic Market 100 2343.11 Islamic China/HK Titans 30 1741.53 Sustainability Korea 1644.69 Brookfield Infrastructure 2430.02 DJ-UBS Commodity -p 170.85

Net change

... -22.06 -1.02 -0.76 -0.04 -0.83 -4.54 -4.10 -0.30 4.93 -6.33 0.84

*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.

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

Daily

...% -0.16 -0.45 -0.25 -0.02 -0.22 -0.19 -0.17 -0.02 0.30 -0.26 0.49

1.2% 6.4 5.2 2.4 3.1 5.1 5.2 4.4 4.4 10.3 7.3 5.2

4.7% 13.9 12.1 9.4 15.0 11.3 13.9 8.5 14.5 29.7 16.0 26.1

6.6% 0.5 -4.6 -6.4 6.1 -3.7 0.8 -1.2 -0.7 5.5 1.4 -5.8

Source: DowJones Indexes

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

0.637 0.094 0.873 0.079 0.0138 0.0001 0.007 0.473 0.0006 0.203 0.014 0.487 0.665 0.021 0.020

0.6317

AEX

9.867

1.573 1.002 0.148 1.373 0.124 0.0218 0.0001 0.011 0.745 0.0009 0.319 0.022 0.767 1.047 0.033 0.032

1.1143

0.3770 2.6526 5.9540 0.1680 3.4680 0.2884 0.7088 1.4109 0.2773 3.6059 1501.50 0.0006660 3.7502 0.2667 6.7248 0.1487 3.6729 0.2723

51.17

28.09

1.035 1.628 1.037 0.1527 1.421 0.129 0.0225 0.0001 0.012 0.771 0.0009 0.330 0.023 0.793 1.083 0.034 0.033

1.4205 1.4196 1.4178 1.4142 0.0583 0.1905 0.005381 0.1823 0.3548 0.03534 0.1579 1.0828 1.0830 1.0834 1.0841 0.6530 1.6276 1.6269 1.6254 1.6222

-0.02

11901.37

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

0.7040 0.7044 0.7053 0.7071 17.160 5.2491 185.83 5.4840 2.8187 28.299 6.3337 0.9236 0.9234 0.9230 0.9224 1.5315 0.6144 0.6147 0.6152 0.6164

7175.31

3469.376

£ 0.614 0.636

1 0.9994 0.9981 0.9955 0.0410 0.1341 0.003788 0.1284 0.2498 0.02488 0.1111 0.7623 0.7624 0.7627 0.7632 0.4597 1.1458 1.1453 1.1442 1.1420

22058.98

KSE 100

0.20

Net change -0.25

OMX Copenhagen

NZSX-50

-1.01

Close 288.65

Denmark

Pakistan

A$ 0.967

In U.S. dollars

0.8974

-4.21

New Zealand

US$

SDR -f

2951.63

...

Cross rates

Per U.S. dollar

MIDDLE EAST/AFRICA Bahrain dinar 0.5355 1.8674 Egypt pound-a 8.4577 0.1182 Israel shekel 4.9263 0.2030 Jordan dinar 1.0068 0.9933 Kuwait dinar 0.3939 2.5385 Lebanon pound 2132.88 0.0004688 Saudi Arabia riyal 5.3272 0.1877 South Africa rand 9.5526 0.1047 United Arab dirham 5.2174 0.1917

Euro Stoxx 50

8

15 14 14 14 16 14 14 13 15 15 17 17

In euros

PREVIOUS SESSION

Kuala Lumpur Composite

2.17% 1.95 2.29 2.46 2.57 2.77 2.10 2.67 2.51 2.51 2.27 2.27

1.0346 0.1527 0.1287 0.0225 0.0001154 0.011829 0.011831 0.011835 0.011846 0.3304 0.7705 0.0117 0.0231 0.7932 0.0009193 0.03419 0.03312

Region/Country Index Euro Zone Euro Stoxx

Malaysia

Price-toDividend earnings yield* ratio* Dows Jones Index

Per euro EUROPE Euro zone euro 1 1-mo. forward 1.0006 3-mos. forward 1.0019 6-mos. forward 1.0045 Czech Rep. koruna-b 24.376 Denmark krone 7.4563 Hungary forint 263.96 Norway krone 7.7900 Poland zloty 4.0039 Russia ruble-d 40.199 Sweden krona 8.9970 Switzerland franc 1.3119 1-mo. forward 1.3117 3-mos. forward 1.3111 6-mos. forward 1.3103 Turkey lira 2.1755 U.K. pound 0.8728 1-mo. forward 0.8731 3-mos. forward 0.8740 6-mos. forward 0.8757

Price-to-

earnings ratio* 14

...

14

In U.S. dollars

5.7584 0.1737 2.2832 0.4380 1.3703 0.7298 1.3712 0.7293 1.3732 0.7282 1.3767 0.7263 673.67 0.001484 2608.18 0.0003834 1.4205 0.7040 16.8177 0.0595 3.9881 0.2507 27.132 0.0369 1.4205 0.7040 6.10 0.163920

Per euro

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

Price-to-

earnings ratio*

Per U.S. dollar

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

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

Major stock market indexes

London close on April 5

C$ 0.965 0.998 1.570 0.147 1.370 0.124 0.0217 0.0001 0.011 0.743 0.0009 0.319 0.022 0.765 1.045 0.033 0.032

YUAN 6.548 6.774 10.657 6.788 9.301 0.842 0.1475 0.0008 0.077 5.045 0.0060 2.163 0.151 5.194 7.090 0.224 0.217

EURO 0.704 0.728 1.146 0.730 0.108 0.091 0.0159 0.0001 0.008 0.542 0.0006 0.233 0.016 0.558 0.762 0.024 0.023

HK$ 7.773 8.041 12.651 8.058 1.187 11.041 0.1751 0.0009 0.092 5.989 0.0071 2.568 0.179 6.165 8.416 0.266 0.257

RUPEE 44.385 45.918 72.239 46.011 6.779 63.049 5.710 0.0051 0.525 34.199 0.0408 14.665 1.024 35.205 48.059 1.518 1.470

RUPIAH 8662.51 8961.80 14098.67 8979.95 1322.96 12305.09 1114.46 195.17 102.47 6674.46 7.96 2862.22 199.78 6870.92 9379.58 296.18 286.89

YEN 84.540 87.461 137.593 87.638 12.911 120.089 10.876 1.9047 0.0098 65.138 0.0777 27.933 1.950 67.055 91.538 2.891 2.800

NZ$ 1.298 1.343 2.112 1.345 0.198 1.844 0.167 0.0292 0.0001 0.015 0.0012 0.429 0.030 1.029 1.405 0.044 0.043

WON 1087.84 1125.43 1770.52 1127.71 166.14 1545.28 139.96 24.51 0.13 12.87 838.18 359.44 25.09 862.85 1177.89 37.19 36.03

RINGGIT PH. PESO 3.027 43.360 3.131 44.858 4.926 70.571 3.137 44.949 0.462 6.622 4.299 61.593 0.389 5.578 0.0682 0.9769 0.0003 0.0050 0.036 0.513 2.332 33.409 0.0028 0.0399 14.327 0.070 2.401 34.392 3.277 46.949 0.103 1.483 0.100 1.436

S$ S FRANC 1.261 0.924 1.304 0.955 2.052 1.503 1.307 0.957 0.193 0.141 1.791 1.312 0.162 0.119 0.0284 0.0208 0.0001 0.0001 0.015 0.011 0.971 0.712 0.0012 0.0008 0.417 0.305 0.029 0.021 0.733 1.365 0.043 0.032 0.042 0.031

TW$ 29.247 30.258 47.602 30.319 4.467 41.546 3.763 0.6590 0.0034 0.346 22.535 0.0269 9.664 0.675 23.198 31.669

BAHT 30.195 31.238 49.144 31.302 4.611 42.892 3.885 0.6803 0.0035 0.357 23.265 0.0278 9.977 0.696 23.950 32.694 1.032

0.969

Source: Thomson Reuters via WSJ Market Data Group

Developed and emerging-market regional and country indexes from MSCI Barra as of April. 05, 2011 Price-toDividend earnings yield ratio Morgan Stanley Index

LOCAL-CURRENCY PERFORMANCE

Last

Daily

YTD

52-wk.

2.40% 15

ALL COUNTRY (AC) WORLD* 346.91 -0.36%

4.9%

12.9%

2.40

15

World (Developed Markets) 1,345.62

-0.31

5.1

12.1

1.60

25

World Small Cap

252.34

-0.51

6.7

23.8

2.40

15

Kokusai (World ex-Japan) 1,348.92

-0.32

6.6

13.8

3.10

14

EAFE

1,719.51

-0.61

3.7

8.5

2.20

14

Emerging Markets (EM)

1,193.13

-0.67

3.6

18.1

2.70

15

AC ASIA PACIFIC EX-JAPAN 493.83 -0.70

3.1

16.8

2.30

14

AC Far East ex-Japan

543.77 -0.84

3.6

20.2

2.00

15

Japan

534.95

-0.28

-4.7

-12.6

2.20

14

China

70.30

1.36

5.7

10.1

1.00

22

China A (China Domestic)

3,199.40

0.00

3.6

-0.2

2.60

20

Hong Kong

12,442.49

2.17

1.9

19.6

1.00

19

India

777.74

1.36

-4.1

8.8

1.20

12

Korea

606.91

-0.21

3.4

26.4

2.60

18

Malaysia

2.90

14

Singapore

3.20

15

2.80

574.71

-0.01

2.5

18.7

1,736.68

0.69

-1.1

8.8

Taiwan

309.08

0.00

-3.2

9.4

14

Thailand

443.76

1.80

7.9

34.7 -1.3

4.10

16

Australia

997.17

0.34

3.2

4.80

19

New Zealand

88.68

0.10

5.8

4.4

1.70

17

US BROAD MARKET

1,516.64 -0.07

6.5

16.1

3.30

13

EUROPE

1.7

6.1

96.96

*Twenty-three developed and 26 emerging markets

0.06

Source: MSCI Barra

30

THE WALL STREET JOURNAL.

Wednesday, April 6, 2011

SCANNING THE GLOBE Dow Jones Industrial Average

Nasdaq Composite Index

P/E: 15

s 15.18, or 0.12%

LAST: 12415.21 YEAR TO DATE: OVER 52 WEEKS

s 1,445.22, or 13.2%

High

s 9.66, or 0.35%

LAST: 2798.85 YEAR TO DATE: OVER 52 WEEKS

s 837.70, or 7.2%

S&P 500 Index

P/E: 13*

P/E: 18 s 2.66, or 0.20%

LAST: 1335.53 YEAR TO DATE: OVER 52 WEEKS

s 145.98, or 5.5% s 362.04, or 14.9%

s 77.89, or 6.2% s 146.09, or 12.3%

13000

2925

1375

12500

2800

1300

12000

2675

1225

11500

2550

1150

11000

2425

1075

Close Low

t

50–day moving average

10500 7 Jan.

14 21

28

4 Feb.

11

18 25

4 Mar.

11

18

25

2300

1

7 Jan.

14 21

28

4 Feb.

11

18 25

4 Mar.

11

18

25

1000

1

7 Jan.

14 21

28

4 Feb.

11

18 25

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

15.3 14.6 2.1 36.7 2.0 3.2 3.1 56.0 2.6 3.2 2.7 7.2 21.3 8.4 5.2 39.4 1.6 11.4 5.4 3.6 1.9 4.0 49.2 15.7 4.1 0.9 1.1 0.9 6.0

$30.90 17.83 45.54 13.42 73.91 112.82 109.26 17.41 67.50 42.71 56.15 85.31 20.54 40.61 37.68 19.78 164.36 46.63 59.92 31.50 76.48 33.12 25.99 20.52 61.93 93.83 59.38 85.48 38.49

0.13 0.27 0.12 –0.02 –0.04 –0.56 1.03 0.35 –0.16 0.08 0.56 0.44 0.01 0.27 0.21 0.29 0.11 0.29 –0.23 –0.01 0.09 –0.15 0.44 –0.02 –0.33 0.19 –0.25 0.25 –0.12

0.42% 1.54 0.26 –0.15 –0.05 –0.50 0.95 2.08 –0.24 0.19 1.01 0.52 0.04 0.67 0.56 1.48 0.07 0.63 –0.38 –0.04 0.12 –0.45 1.72 –0.10 –0.53 0.20 –0.41 0.29 –0.31

WalMart

WMT

5.0

53.00

0.35

0.66

Stock

Latest

CHANGE Points Percentage

11

18

25

1

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

4 Mar.

Stock

Volume, Symbol in millions

Citigroup NtlSemi SPDR S&P 500 CiscoSys Microsoft iShrMSCIEmrgMkt InspirePham Intel iShrMSCI Jpn BankAm FordMotor PwrShrs QQQ BkIrlnd ADS iShrRu2000 SiriusXM

C NSM SPY CSCO MSFT EEM ISPH INTC EWJ BAC F QQQ IRE IWM SIRI

ADRs of Asian companies* Latest

CHANGE Points Percentage

270.9 88.7 63.5 56.0 49.2 43.7 40.5 39.4 38.0 36.7 33.6 32.2 28.0 25.4 24.7

$4.45 24.13 133.69 17.41 25.99 49.97 4.96 19.78 10.00 13.42 15.69 57.43 2.43 85.65 1.74

0.02 10.06 0.44 0.35 0.44 0.10 0.97 0.29 –0.16 –0.02 0.14 0.16 –0.09 0.92 0.04

0.34% 71.46 0.33 2.08 1.72 0.20 24.50 1.48 –1.57 –0.15 0.90 0.28 –3.57 1.09 2.06

NSM 88,694.4 ISPH 40,509.0 QCOR 5,026.9 AAU 1,479.5 HGSH 25.8

$24.13 4.96 18.25 4.75 3.05

10.06 0.97 3.33 0.71 0.43

71.46% 24.50 22.29 17.66 16.41

$3.03 11.97 15.80 15.23 5.00

–0.96 –2.49 –3.07 –1.90 –0.56

–24.06% –17.22 –16.27 –11.09 –10.12

52-WEEK High Low

$13.85 143.48 53.16 2.97 44.56 15.55 98.85 4.50 3.94 37.65 93.90 5.68 7.27 38.63 12.55 7.67 52.69 58.22 9.90 19.24 4.15 16.58 21.59 77.92 54.70 17.60 6.66 15.72 52.30 55.46

Biggest gainers... NtlSemi InspirePham Questcor AlamdenMnl ChinaHGSRealEst

...Biggest losers DuoyGlblWtr ADS SemiLEDS MeruNtwrks WrightMed ZST DgtNtwk

DGW LEDS MERU WMGI ZSTN

5,863.3 817.4 1,894.4 1,416.7 401.3

Volume, Symbol in OOOs

Stock

TaiwanSemi Baidu ADS CtripInt ADS Novogen ADS HondaMtr ADS SuntechPwr BHPBilton ADS PranaBiotech UtdMicro ADS TataMtrs ADS ToyotaMtr ADS MitsuUFJ ADS Slcnwr ADS SonyCp AU Optrncs NmuraHldg Netease.com ICICI Bk ADS Rediff ADS SK Tele ADS SifyTech ADS KoreaElecPwr LG DisplayADS Infosys ChinaMobile ChinaUnicomHK AdSemEg ADS Panasonic ADS Canon ADS KBFinc ADS

$9.30 59.67 31.35 0.41 28.33 7.05 58.38 1.09 2.49 15.25 67.56 4.44 4.45 25.85 8.14 4.75 26.16 33.21 1.69 14.58 1.18 10.43 13.75 53.28 44.36 10.91 3.33 10.76 36.80 37.06

CHANGE Latest Points Percentage

TSM 10,421.3 $12.43 0.25 BIDU 3,821.9 141.50 –1.62 CTRP 2,651.9 44.71 1.87 NVGN 2,551.7 1.79 0.48 HMC 2,401.4 34.72 –1.12 STP 1,856.2 9.24 ... BHP 1,535.2 98.55 0.65 PRAN 1,355.4 2.59 0.15 UMC 1,315.0 2.81 0.02 TTM 1,033.0 28.27 0.05 TM 936.9 77.79 –1.69 MTU 921.4 4.49 –0.08 SPIL 803.4 6.29 0.08 SNE 751.5 31.23 –0.22 AUO 709.0 8.82 0.14 NMR 691.5 4.95 –0.09 NTES 634.7 51.73 0.02 IBN 604.6 50.36 –0.31 REDF 568.6 8.32 0.32 SKM 556.2 18.92 –0.10 SIFY 554.7 4.06 0.17 KEP 549.7 12.54 –0.02 LPL 522.4 16.96 0.50 INFY 510.1 73.42 0.03 CHL 440.6 47.56 0.01 CHU 411.0 17.49 –0.05 ASX 369.9 5.63 0.12 PC 349.9 12.29 –0.25 CAJ 318.0 42.96 –0.56 60.4 53.96 0.24 KB

2.05% –1.13 4.37 36.64 –3.13 ... 0.66 5.94 0.72 0.18 –2.13 –1.75 1.29 –0.70 1.61 –1.79 0.04 –0.62 4.00 –0.53 4.37 –0.16 3.04 0.04 0.02 –0.29 2.18 –1.99 –1.29 0.45

*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.

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 12 p.m. ET Country/ Maturity, in years

4.920% 5.537 2.224 3.817 2.221 4.263 1.851 3.381 1.810 3.473 1.861 3.742 1.839 3.391 0.778 2.893 2.812 4.764 0.209 1.268 1.818 3.662 9.221 8.922 3.129 5.294 0.734 2.000 1.434 3.767 0.822 3.480

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

409.8 205.7 140.2 33.7 139.9 78.3 102.9 -9.9 98.8 -0.7 103.9 26.2 101.7 -8.9 -4.4 -58.7 199.0 128.4 -61.3 -221.2 99.6 18.2 839.9 544.2 230.7 181.4 -8.8 -148.0 61.2 28.7 ... ...

416.0 210.5 141.7 39.3 143.9 82.6 103.8 -7.4 104.3 2.0 106.8 30.8 105.2 -4.7 0.8 -52.5 207.1 134.0 -55.9 -212.1 103.0 23.7 816.0 538.4 242.0 187.1 -5.7 -142.0 60.6 30.8 ... ...

431.4 206.6 142.5 24.3 178.1 81.6 115.8 -15.8 110.8 -12.4 112.9 16.6 107.4 -20.0 6.9 -58.1 241.0 140.0 -45.1 -219.2 87.8 -3.1 539.2 410.3 258.1 189.9 4.9 -158.9 72.6 22.5 ... ...

376.5 176.6 1.5 -51.9 -12.0 -45.0 65.7 -31.8 40.5 -60.7 -25.5 -57.7 -22.4 -89.4 -34.9 -107.9 33.0 -13.7 -100.1 -260.5 -26.5 -66.0 46.5 20.5 -3.4 -16.1 -70.8 -206.6 -20.7 -5.6 ... ...

Previous

4.930% 5.523 2.187 3.811 2.209 4.244 1.808 3.344 1.813 3.438 1.838 3.726 1.822 3.371 0.778 2.893 2.841 4.758 0.211 1.297 1.800 3.655 8.930 8.802 3.190 5.289 0.713 1.998 1.376 3.726 0.770 3.418

YIELD Month ago

4.999% 5.558 2.110 3.735 2.466 4.308 1.843 3.334 1.793 3.368 1.814 3.658 1.759 3.292 0.754 2.911 3.095 4.892 0.234 1.300 1.563 3.461 6.077 7.595 3.266 5.391 0.734 1.903 1.411 3.717 0.685 3.492

TOTAL RETURN Year ago

4.941% 5.756 1.191 3.471 1.056 3.540 1.833 3.672 1.581 3.383 0.921 3.413 0.952 3.096 0.827 2.911 1.506 3.853 0.175 1.385 0.911 3.330 1.641 4.195 1.142 3.829 0.468 1.924 0.969 3.934 1.176 3.990

Source: Thomson Reuters

5% 4

One year ago

s

6.500% Australia 2 5.750 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 1.750 Netherlands 2 3.250 10 5.450 Portugal 2 3.850 10 2.300 Spain 2 5.500 10 4.000 Switzerland 2 2.000 10 4.500 U.K. 2 3.750 10 0.750 U.S. 2 3.625 10

Yield

3 2 s

Coupon

Monday 1 0

1

3

6

month(s)

1

2 3 5 710

years maturity

30

Ryan Index

Yield to maturity

Modified duration

Month to-date

Quarter to-date

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

4.486% 3.429 2.860 2.197 2.496 1.228 0.774 0.204 0.132 0.104 0.051

16.08 8.22 6.29 4.70 6.69 2.88 1.97 0.93 0.50 0.43 0.25

0.47 % 0.22 0.25 0.17 0.21 0.11 0.04 0.06 0.03 0.03 0.02

0.47 % 0.22 0.25 0.17 0.21 0.11 0.04 0.06 0.03 0.03 0.02

–1.41 % –0.16 0.21 0.20 –0.19 –0.09 –0.03 0.21 0.11 0.10 0.06

11.20 % 8.00 7.95 5.82 6.44 3.33 1.63 0.83 0.35 0.40 0.26

One-month bill

0.031

0.07

...

...

0.04

0.16

a-Performance of a cash investment

Year to-date 12-month

Source: Ryan ALM

Key money rates Latest

52 wks ago

Prime rates

Latest Euro Libor One month

52 wks ago

Offer Eurodollars One month

Bid

0.94500%

0.36563%

0.3500%

0.2500%

1.20750

0.58313

Three month

0.5500

0.4500

Six month

1.52188

0.89063

Six month

0.7500

0.6000

One year

1.97563

1.19000

One year

1.0500

0.8500

Latest

52 wks ago

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

0.52

0.52

Hibor One month

0.21000

0.09821%

Australia

4.75

4.00

Three month

0.26000

0.14893

U.S. discount

0.75%

0.75%

Hong Kong

5.00

5.25

Six month

0.32143

0.24929

Fed-funds target

0.25

0.25

One year

0.64143

0.56857

Call money

2.00

2.00

Libor One month

Three month

Asian dollars One month

0.2449%

0.23550%

0.25075%

Three month

0.29375

0.29488

Three month

0.3040

0.2953

Six month

0.45650

0.45438

Six month

0.4605

0.4460

U.K. (BBA)

0.543

0.502

One year

0.77775

0.95000

One year

0.7845

0.9240

Euro zone

0.55

0.29

0.26%

Overnight repurchase rates U.S. 0.10%

0.18%

Sources: WSJ Market Data Group; Reuters

THE WALL STREET JOURNAL.

Wednesday, April 6, 2011

31

MARKETS LINEUP

Moving the markets

At right, Japan’s benchmark stock index and the biggest movers among the larger Asian stocks indexes and stocks Tuesday. 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.

Asian index movers… Nikkei Stock Average

Kospi

Japan

South Korea

t

9615.55 1.06% or 103.34

Fishery-related shares fell on news of Tepco’s release of contaminated water. Chip makers slipped after the Philadelphia semiconductor index fell almost 1%.

Foreign buying and gains in tech and refining stocks helped lift the index to a record close. Auto makers rose amid hopes they would benefit from Japanese rivals’ troubles.

s

3146.75 0.20% or 6.13

The benchmark finished higher for a sixth consecutive trading day as takeover activity in the resources sector and speculation of more to come lifted mining stocks.

Shares in Singapore Exchange climbed after investors viewed the setback in a proposed deal to buy ASX as positive for the local bourse. 4800

12500

2500

6000

4000

10000

2000

4800

3200

7500

1500

3600

2400

Change Net

1000 A M J J A S O N D J F M 2010 2011 Volume in millions

Close

257.61

131

–1

–0.76

Samyang Optics

23.23

Tokyo Elec Power 209.94

362

–80

–18.10

Daechang Ind

Mtshbsh Fin Grp

82.20

382

–3

–0.78

Shinwoo

Hitachi

46.39

418

–9

–2.11

Chinhung Int

14.02

238.00

Toshiba

44.32

394

–10

–2.48

Mirae

13.84

440.00

Mizuho Financial

Singapore

7200

Volume in millions

Stock

s

4900.13 0.27% or 13.29

3000

A M J J A S O N D J F M 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.

s

Straits-Times

Australia

15000

5000

WSJ.com

ASX 200 2130.43 0.69% or 14.56

%

Stock

Close

2400 A M J J A S O N D J F M 2010 2011

Change Net

%

Stock

Volume in millions

Close

2.52

0.12

1,150.00 105.00

10.05

Lynas Fpo

52.01

15.88

2,145.00 270.00

14.40

Telstra

48.29

2.85

14.76

1,330.00 155.00

13.19

Good Group Forus

37.50

0.72

–5.00

–2.06

Panaust Fpo

34.26

14.00

3.29

Stockland Trust

30.02

Change Net

1600 A M J J A S O N D J F M 2010 2011 Stock

%

Volume in millions

Close

Change Net

91.64

2.10

0.01

0.48

%

5.00

Genting Spore

0.02

0.71

Golden Agri

55.81

0.70

-0.02

–2.10

0.01

0.70

GlbLogisticProp

23.59

2.00

0.02

1.01

0.83

–0.02

–1.79

CapitaLand

22.41

3.41

0.04

1.19

3.80

0.04

1.06

NeptuneOrientLines

21.72

1.97

-0.02

–1.01

Asian stocks in the news Daewoo Shipbldg & Mar Korea

S-Oil

34,450 won Korea

s 2.5% or 850 won

LG Chem 149,000 won

s 3.8% or 5,500 won

Korea

QBE Ins Grp 468,500 won

s 4.9% or 22,000 won

Australia

Sesa Goa Ltd. A$19.00 India

s 5.5% or A$0.99

314.20 rupee

s 6.5% or 19.30 rupee

Investors continued to bet that orders from overseas firms will rise.

Oil refiners recovered from Monday’s steep losses sparked by gasoline and diesel price cuts over the weekend.

Korean chemical firms rallied on a robust earnings outlook.

The firm kept its outlook for its insurance profit margin and raised its growth forecast for net earned premiums.

Shares rose after the top court lifted a ban on iron-ore shipments from the state of Karnataka.

In won

In won

In won

In Australian dollars

In rupee

50000

150000

500000

32

600

30000

90000

375000

24

450

20000

60000

250000

16

300

30000 A M J J A S O N D J F M 2010 2011

9 4035.45 1.5

1.1% 4.1%

9.7% 74.0%

Honda Motor Japan

¥2,934

Investors fear that car production will continue to be hampered by problems at suppliers due to the earthquake. In yen

6000

Oil & Gas S-Oil

-0.4% 3.0% 21.7% 3.8% -6.6% 168.5%

Japan

¥4,510

t 2.8% or ¥130

-0.7% 4.9%

Chemicals LG Chem

1.7% 5.8%

26.0% 87.4%

Australia

A M J 2010 16 1.22 3.5

Price-to-earnings ratio Earnings per share, past four quarters Dividend yield Insurance QBE Ins Grp

-0.4% 5.5%

2.9% 5.9%

-3.3% -10.7%

A$33.70

Indonesia

Basic Resources Sesa Goa Ltd.

0.2% 6.5%

4.0% 9.6%

11.2% -33.9%

Tokyo Elec Power

28,550 rupiah Japan

¥362

t 18.1% or ¥80

The Australian government appears likely to block Singapore Exchange's proposed takeover offer.

The shares pulled back after a 19% surge over the previous four sessions.

Shares fell to a record low after the utility began dumping radioactive water into the Pacific Ocean.

In yen

In Australian dollars

In rupiah

In yen

10000

60

37500

48

30000

3600

6000

36

22500

2400

4000

24

15000

2000 A M J J A S O N D J F M 2010 2011

9.0% -11.9%

PERCENTAGE CHANGE Daily 1 wk. 52 wks

t 7.2% or 2,200 rupiah

8000

10 298.10 1.8

7 46.96 1.0

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

PERCENTAGE CHANGE Daily 1 wk. 52 wks

Hanjaya Mandala Samp t 3.3% or A$1.15

J A S O N D J F M 2011

Leading chip-related shares dropped on concerns over semiconductor supply-chain problems.

J A S O N D J F M 2011

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

PERCENTAGE CHANGE Daily 1 wk. 52 wks

Technology Tokyo Electron

-0.5% -2.8%

2.2% 1.5%

3.6% -30.9%

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

PERCENTAGE CHANGE Daily 1 wk. 52 wks

Financial Services ASX Ltd

-0.6% 2.0% -3.3% -3.2%

4.8% -0.5%

1750 1250 750

250 A M J 2010

A M J J A S O N D J F M 2010 2011 18 1.91 2.7

2250

7500

12 A M J 2010

12 382.00 2.3

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

PERCENTAGE CHANGE Daily 1 wk. 52 wks

-1.9% -2.1% -2.5% -4.3%

J A S O N D J F M 2011

PERCENTAGE CHANGE Daily 1 wk. 52 wks

ASX Ltd

1200

Automobiles & Parts Honda Motor

16 29344.96 0.9

150

8 A M J 2010

4800

A M J J A S O N D J F M 2010 2011 Price-to-earnings ratio Earnings per share, past four quarters Dividend yield

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

PERCENTAGE CHANGE Daily 1 wk. 52 wks

Tokyo Electron

t 2.5% or ¥76

125000 A M J J A S O N D J F M 2010 2011

25 6055.39 1.7

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

PERCENTAGE CHANGE Daily 1 wk. 52 wks

-1.0% 2.5%

750

120000

10000

Indus Gds & Svcs Daewoo Shipbldg & Mar

40

40000

A M J J A S O N D J F M 2010 2011 Price-to-earnings ratio Earnings per share, past four quarters Dividend yield

625000

20 1456.08 5.3

J A S O N D J F M 2011

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

PERCENTAGE CHANGE Daily 1 wk. 52 wks

Personal & Hshld Gds Hanjaya Mandala Samp

-0.8% 0.3% -2.2% -7.2% 10.2% 106.9%

None -62.20 8.3

PERCENTAGE CHANGE Daily 1 wk. 52 wks

Utilities Tokyo Elec Power

-1.6% -3.4% -18.1% -36.0%

-13.6% -85.2%

THE WALL STREET JOURNAL.

Wednesday, April 6, 2011

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

Email: [email protected]

WSJ.com/Heard

Tepco’s ills suggest deals Is Australia still When banks get too big to fail, society suffers. It doesn’t work that way in the energy world, as Tokyo Electric Power’s nuclear crisis demonstrates. So get ready for more U.S. utilities merging. Whether Tepco can avoid nationalization after this crisis is of secondary importance to Japan. Even if the company survives as a private entity—as Prime Minister Naoto Kan says he wants—it is likely to do so only with taxpayer aid. That’s despite the fact that, prior to the disaster, Tepco was one of the world’s largest utilities by market capitalization, worth about $42 billion. Today, it’s worth less than $9 billion. Size matters. One often overlooked lesson from BP’s oil-well disaster last year is that only a company of that scale could absorb the costs involved without going under. Now Tepco’s crisis has highlighted the risks around electricity generation, particularly nuclear power. Compared with Big Oil, though, Big Power is puny. The world’s largest utility by market cap is France’s GDF Suez, worth $90 billion. Yet it would be only a second-tier company compared with the oil giants. The largest U.S. utility, on a pro

open for business?

World powers World's top 10 utilities by market capitalization Company GDF Suez EDF E.On Enel Iberdrola Duke Energy* National Grid NTPC RWE Endesa

Market cap in billions of dollars

Country $90.6 76.8 61.5 59.8

48.2 38.2 34.9 34.9 33.8 33.2

*Pro forma assuming merger with Progress Energy

forma basis, is Duke Energy, which announced its intention to merge with Progress Energy in January. Even so it would be worth less than pre-crisis Tepco and, at $38 billion, wouldn’t make the global top five. Still, Duke’s deal points the way forward. Tepco’s situation is an extreme one, but sensitivities around nuclear power are now intense. Consolidating balance sheets and diversifying exposure through mergers offers a way of offsetting higher risk premiums attached to stock prices.

France France Germany Italy Spain U.S. U.K. India Germany Spain

Sources: Dow Jones Indexes, WSJ reporting

Regulators should be sympathetic. Apart from nuclear safety, investment requirements have spiraled as a result of raw-materials inflation. Smaller regulated utilities make prime acquisition targets. Their steady cash flows reduce risk and allow for the recovery of investment costs through consumers’ bills. Investors should consider owning stocks like CenterPoint Energy and DPL in anticipation of potential deals. This is one trend that is too big to ignore. —Liam Denning

Keep your money, mate. Australian Treasurer Wayne Swan’s decision to effectively block Singapore Exchange’s 8.4 billion Australian dollar (US$8.7 billion) takeover offer of its local rival ASX risks turning foreign investors away from the resource-rich nation. Faced with the prospect of fierce political objections, Mr. Swan and his colleagues in the minority Labor government probably breathed a sigh of relief that Australia’s foreigninvestment watchdog thought the takeover posed a threat to the “national interest.” Cross-border exchange deals are nothing new, and if regulators in New York, Europe and even the Middle East can stomach foreign investment, or ownership of their stock markets, it is difficult to see why Australia can’t. After all, the deal could help open up its geographically remote stock market to greater capital inflows from Asia. Australian officials’ confidence in turning away foreign capital likely reflects the benign economy. Australia has recovered more quickly than

most of its industrialized peers. But economies that rely on commodity exports have proven to be vulnerable. Saudi Arabia struggled to pay its debts in the late 1990s, when oil prices fell below US$10 a barrel. Australia’s economy is more diverse but, it is often labeled the Saudi Arabia of the Pacific because of its vast natural-resource wealth. And its weakness was revealed when new figures showed Australia’s trade balance in February fell into deficit for the first time since March 2010 as coal exports from Queensland were disrupted by floods. It is almost 10 years to the day since Australian regulators blocked Royal Dutch Shell’s bid to take over Woodside Petroleum, another questionable judgment. Mr. Swan should be wary of clogging up channels of investment at a time when the world economy still needs a kick-start. Australia may be riding high at the moment, but it needs to keep an open door to foreign capital if it wants to prosper in the longer term. —Andrew Critchlow and David Fickling

Beijing’s waning interest in raising borrowing costs Holiday rate increases in China no longer take anyone by surprise. Today’s 0.25 percentage point increase in the one-year deposit and lending rates is the fourth since the tightening cycle kicked off in October last year. As the third increase on a public holiday, it also gives market participants a chance to digest the news before itchy trading fingers send the Shanghai Composite Index into free fall.

When it

With a little time for reflection, investors should realize that Tuesday’s rate increase isn’t particularly surprising. The increase in the consumer-price index came in at 4.9% year on year in February. It is widely expected to push past 5% in March, way above the government’s 4% target for the year. The bond markets—canary in the coal mine of China’s monetary policy—were pricing in an increase in April.

The question is how far the tightening process still has to run. Inflation should peak in the second quarter before easing down in the second half, the result of a higher base effect, weaker food prices and the impact of tightening measures already in place. If inflation comes off its peak and tighter labor markets mean it stays sticky around 4%, most economists expect the country’s central bank to turn timid.

There is one good reason why they might be right. The biggest creditors in the Chinese economy are households—who are long deposits and short loans as they save for a future with a limited social safety net. The biggest debtors are the government and the state sector of the economy, which used the 2009-2010 stimulus to borrow. High inflation and low interest rates will hurt households, whose

low-yielding deposits get eroded, while helping the state sector manage down the enormous debt it has taken on in the past two years. When the government is the biggest borrower, why would it increase the interest rate more than it has to? Tuesday’s move might not be the last holiday treat from the central bank, but there won’t be many more rate increases to come. —Tom Orlik

was initially developed and immediately became functional,

further development and adaptation was contemplated alongside its international rollout. Whereas a mobile phone application may

takes hours

to search for any new platform to be customized so it can learn and compensate for the information you need, and then operate on other platforms too. As far as starting a global marketing trend, the new platform has potential for wide adoption now that the business has evolved to post development. The immediate intention is to commence the rollout of the product offering, initially in the United States and South Africa to be followed in the medium term by a staged international rollout. But Mobile users who download the consumerfriendly application remain wary about hidden costs and ask is

it really free?

Accurate. Powerful. Efficient. Factiva provides actionable insight from 28,500 sources, spanning 200 countries, in 23 languages—when, where and how you need it. Quickly find critical information not available on the free Web, on or before the day of publication. Keep ahead of competitors with the world’s most influential publications, newswires, websites, blogs and broadcast media—all on one page.

For more information, visit factiva.com/wsja © 2011 Dow Jones & Company, Inc. All rights reserved. 5ECFA1134

Published by Dow Jones Publishing Company (Asia). Printed in Hong Kong by Superflag Printing and Communication Ltd., 1/F, 8 Chun Ying St., Tseung Kwan O Ind. Est., Tseung Kwan O, NT. Printed in Indonesia by PT Gramedia Printing Group, Jalan Palmerah Selatan 22-28, Jakarta 10270. Printed in Japan by Yomiuri Shimbun, 1-7-1, Otemachi, Chiyoda-ku, Tokyo 100-8055. Printed in Korea by JoongAng Ilbo. 7, Soonwha-Dong, Chung-Ku, Seoul 100-130. 1997 June 04 Registration no.: SeoulKA00020 (Daily Newspaper), Publisher/Editor/Printer: Song, Pil-Ho. Printed in Malaysia by KHL Printing Co. Sdn. Bhd. (ROC No: 235060-A) Lot 10 & 12, Jalan Modal 23/2, Seksyen 23 Kawasan Miel Phase 8, 40000 Shah Alam, Selangor, Malaysia. Printed in Philippines by FEP Printing Corporation, 3817 Mascardo St., Corner Metropolitan Ave., Pasong Tamo, Makati City. Printed in Singapore by KHL Printing Co. Pte Ltd., 57 Loyang Drive, Singapore 508968. Printed and distributed in Taiwan by The China Post, 8 Fu Shun Street, Taipei 104. Printed in Thailand by Nation Multimedia Group Public Co., Ltd., 1854 Bangna-Trad Road, (K.M. 4.5), Prakanong, Bangkok 10260. Published and printed on behalf of the Wall Street Journal India Publishing Pvt Ltd, 517B World Trade Centre, Barakhamba Lane, New Delhi 110001 by Mr Suman Dubey at A-8 Sector 7, Gautam Budh Nagar, Noida -201301 and PLOT No.EL208, TTC Industrial Area, Mahape, Navi Mumbai - 400710 (Maharashtra), India, Editor: Suman Dubey, phone: +91-11-6462 0215. ACP no. F.2 (T/3) Press / 2009 FACSIMILE EDITION.

32