ADB lends China $100m for Xinjiang
MANILA: The Asian Development Bank has said it is providing a loan of 100 million dollars to iminfrastructure in the northwest Chinese province of Xinjiang.
The loan will be to build or upgrade more than 100 kilometres (62 miles) of roads, install traffic signals and other road safety systems, and construct public toilets and other sanitation facilities, the ADB said in a statement from its headquarters in the Philippines.
The newest loan will complement other ADB programmes to improve urban infrastructure in Xinjiang, which shares borders with eight countries and serves as a gateway between China and Central Asia, the ADB said.
Despite its location, Xinjiang has some of China's highest poverty rates and has lagged behind China's coastal regions in benefiting from the country’s economic boom, the multilateral institution noted.
Fitch cuts Toyota’s rating to A+
TOKYO: Toyota Motor Corporation, Japan’s biggest carmaker, had its credit rating cut by Fitch Ratings as weak car demand hampers earnings.
Fitch downgraded Toyota two notches to A+ from AA, its fifth-highest rating, the agency said in a statement today.
Toyota expects an annual loss of 550 billion yen ($5.7 billion) for the 12 months ending March, its second straight unprofitable year. The carmaker has predicted global sales will fall about 14 percent to 6.5 million vehicles this year as the recession hammers demand in North America, its biggest market.
“It may take several years for Toyota to approach previous levels of profitability,” said Jeong Min Pak, Director at Fitch Ratings in a phone interview. “Decision making and management reaction to the crisis seems to be faster at its rivals.”
The carmaker has 8.3 trillion yen in outstanding bonds and loans. A lower credit rating may increase Toyota’s borrowing costs.
Toyota cut the annual dividend by 40 yen to 100 yen in the year ended March, ending a streak in which the dividend jumped sixfold in 10 years. The company hasn’t yet said what it will pay this year.
Fitch cut its rating on Toyota in November and was followed by Moody’s Investors Service and Standard & Poor’s Rating Services.
“ If Toyota’s operating environment becomes such that its earnings will further deteriorate from what we expect them to be, there is a possibility that we will downgrade again,” said Shinsuke Tanimoto, a Moody’s analyst.
Standard & Poor’s analyst Osamu Kobayashi could not be reached for comment.
OIL RISES IN ASIA
SINGAPORE: Oil rebounded in Asian trade Wednesday after falling overnight on figures showing declining consumer confidence in the United States, the world's biggest energy user, analysts said.
New York's main contract, light sweet crude for August delivery rose 66 cents to 70.55 dollars. Brent North Sea crude for August delivery advanced 75 cents to 70.05 dollars.
Analysts expect the rebound in crude prices, coming mainly on the back of investors looking for an alternative to equities, to be temporary amid fresh worries about US energy demand.
OIL PRICES BELOW 70 DOLLARS
NEW YORK: Oil prices sank from eight-month peaks Tuesday after new data signaled a plunge in consumer confidence in the United States, the world's largest energy consumer.
New York's main contract, light sweet crude for delivery in August, tumbled 1.60 dollars from Monday's closing price to 69.89 dollars per barrel, after earlier touching 73.38 -- a level unseen since October.
London's Brent North Sea crude for August delivery fell 1.69 dollars to 69.30 dollars a barrel, having earlier surged as high as 73.50.
Consumer confidence in the United States -- the world's biggest energy consuming nation -- sank in June as households worried about the prolonged recession and vanishing jobs, the Conference Board said Tuesday.
The news pushed the dollar higher against the euro on currency markets as investors flocked to buy the world's main safe-haven currency and moved away from risky currencies.
A stronger US currency makes dollar-priced oil more expensive for buyers holding weaker currencies, which in turn tends to dampen demand and pull the market lower. "The rising dollar affected the crude oil prices," said Mike Fitzpatrick of MF Global.
Oil prices have increased dramatically -- by 40 percent or more than 20 dollars -- in the second quarter on gaining confidence that the global slump is easing. It had closed at 49.66 dollars on March 31, which was the last day of the first quarter.
The Conference Board, a US business research group, said Tuesday its consumer confidence index retreated to 49.3 points in June from a revised 54.8 in May, an eight-month high. Most analysts expected a much stronger reading of 55.3 points.
This dashed hopes for a recovery soon from the recession that began in December 2007. "Once again we've seen the green shoots arguments shot down," said analyst David Fineberg at financial spread-betting firm CMC Markets in London.
"This shift in outlook is also hammering oil prices -- crude is back below 70 dollars a barrel -- so in summary, falling consumer demand is painting a rather bleak picture."
The loan will be to build or upgrade more than 100 kilometres (62 miles) of roads, install traffic signals and other road safety systems, and construct public toilets and other sanitation facilities, the ADB said in a statement from its headquarters in the Philippines. 
