Business & Financial News

On February, 27th the world stock markets have tested significant correction, and the basic impact was taken up by developing markets. The reason of a panic was the maximal for last 10 years a collapse of the Chinese stock indexes. Shanghai and Shenzhen 300 Index has fallen to 9, 2 % on a background of expectations of toughening of regulation of the financial markets and monetary policy of the country.
The Chinese government has approved the creation of the special commission on struggle against illegal investments into actions against the purpose of prevention of market overheat. The analysts consider that the danger of financial bubble has logically appeared: for the last half a year the Chinese stock indexes have flied up twice, the attitude of capitalization to profit (P/E) has exceeded 30. In 2006 US 11, 2 billion dollars or 50 % of pure inflow of the global investors in funds of actions of developing markets capital, has been concentrated in China.
Recently, the chief of Federal service on the financial markets, making comments on attraction of means of the population on the share market, has warned against “the Chinese syndrome” - when people sold apartments, removed money from deposits and got into debts to buy stocks. Besides the national bank of China since February, 25th, 2007 in fifth time since July of the last year has raised the rate of deductions in fund of obligatory reserves (FOR) - up to 10 %, and a number of experts predicts still triple increase of the specification of reservation up to the end 2007 the Country leaders tries to avoid an overheat of economy, however while rates of growth of gross national product of China exceed 10 % and in 2007 the World bank predicts stagnation up to 9,6 %.
The situation in the Chinese economy and in the stock market is reflected in the global financial markets. Actually, the stagnation of Chinese economy can reduce demand for the raw goods that threatens with decrease in the world prices for oil and metals. The second risk factor consists in the general deterioration of the attitude of investors to risks of developing markets, as owing to sharp falling of the Chinese stock market (China and Russia were recently considered by many global investors within the limits of the common BRIC brand), and because of increase of geopolitical risks (many investors prefer to wait such periods in the most conservative financial tools). However this can be an ordinary correction of the Chinese stock market after excessive growth and a measure on of overheat restriction, undertaken by the government, should improve the present situation.

The US state secretary Condoleeza Rice has confirmed, that the international conference with G8 participation is being prepared in Iraq.
In the text of the Rice’s speech, prepared for the hearings in senatorial committee on assignments it is spoken that the government of Iraq prepares for the expanded meeting of neighbors, all over again at a level below the ministerial rate, which will be held in Baghdad in first half of March.
It was also said in the document, endurances from which in advance were distributed with a department of state of the USA, that the nearest Iraq’s neighbors, representatives of other states of region, the multilateral organizations, and also constant members of the UN Security Council are among the expected participants.
Rice has also informed that after first such meeting, the second meeting at a ministerial level with participation of the same invited plus members of “the big eight” will, probably, take place takes place in April.
The US state secretary has noted that the Iraq government has invited Iran and Syria for both meetings.
Rice has told that World Community expects that these (two) governments will take advantage of an opportunity for improvement of the relations with Iraq and would work for the sake of the world and stability in this region.
Rice has also declared, that George Bush’s administration “completely supports” the diplomatic initiative of the Iraq government of on carrying out of conference in Baghdad.

The USA state secretary Condoleeza Rice considers, that such critical applications, sounding from Russia to address of the USA, concerning expansion of the NATO’s activity in the Europe, which does not promote strengthening of bilateral attitudes between these two countries. Rice has pointed out that she did not think, that similar statements would not strengthen Russian -American mutual relations and the situation would change for the worse, if Russia would not reconsider their attitude towards American foreign policy and the expansion of the NATO’s activity in the East.
Rice has also reminded that the Russian and American representatives have for more than 10 times officially met for discussion of the American plans in this area, and that these discussions were also carried out within the limits of Russia-NATO Council.
The US foreign policy department chief has informed that she had already talked about this with the Russian officials, having noted, that the American plans in the Europe are not a surprise for the Russian government.
Rice has declared that the comments on similar things concerning Poland and Czech Republic - the independent countries and members of the NATO- were unnecessary and unreasonable.
Having concerned a question on NATO’s expansion, the state secretary has declared, that she considers this process as the major moment in the present world history.
Rice has emphasized that it has helped to consolidate the democratic and the protected Europe, and Russia has nothing to be afraid from the democratic states at its borders.

The situation in the urgent market of precious metals is characterized by essential increase of the gold prices. So, at the Commodity exchange of New York (COMEX) the gold prices for the first time for nine months have exceeded a mark US 680 per ounce.
The ounce of gold at COMEX has raised US 23, 0 dollars (+3, 5 %) in price for a day.
The rise in gold prices on has been caused by active purchases of future contracts by large investment funds. Purchases of gold have been caused by the high prices for oil which have reached a record level from the beginning of 2007.
Purchases of gold were also promoted by the strengthened influence of the geopolitical factor. The market expects strain of relations between Iran and the USA on a nuclear problem. From the beginning of the year, the USA has expanded the military presence in the Persian Gulf region.
Purchases of gold are also promoted by fears for inflationary processes in US economy. In January 2007 consumer prices in the USA have grown on 0,2 % in comparison with the last month, and in comparison with January, 2006 the rise in prices has made 2,1 %, that is above the forecast.
The prospective range of gold prices can make: the nearest prospect will be US 659, 0-686, 5 /ounce; intermediate term prospect will be US 646, 5-690, 0 per ounce.

The group of the Japanese trading and energy companies is to start negotiations on possible technical communication with Russian natural gas monopoly Gazprom.
As it became known, next month the companies are to start negotiations in the certain areas of cooperation, including processing of natural gas. The agreement is expected to be reached within the year.
The Japanese Natural resources and Energy agency will serve as the intermediary for the Russian and Japanese governments. Now it looks like Japanese partners try to establish the system which would guarantee the steady delivery of energy and strengthening the cooperation between two countries.
In the beginning of next week, Akira Amari, Japanese Economy Trade and Industry Minister, plans to start the negotiations with Russian representative, Victor Khristenko. The Russian government wishes to establish the possible union between the Japanese companies and Gazprom. The Russian industry and power minister, accompanied by Russian Prime Minister Michail Fradkov are going to visit Japan in order to start negotiations.
After the official meeting at a level of ministers, the business representatives of 13 largest Japanese companies, such as Mitsui and Co., Corporation Mitsubishi, Tokyo Electric Power Co. And Oil Corporation Nippon etc., are going to meet with Russian officials and businessmen in order to start negotiations concerning the establishment of the Russian-Japanese joint structure.
Gazprom is for cooperation with the Japanese companies in the areas of extraction of helium from natural gas and transformation of natural gas to liquid fuels for diesel engines. In addition to technical cooperation is also expected. Japan, in its turn, is interested in steady supplies of Russian gas and oil from Sakhalin-1 and Sakhalin-2 projects.

Japanese Law enforcement bodies have arrested three employees of Yamaha Motor Company. They are suspected in contraband deliveries of pilotless helicopters to China.
According Japanese policemen, helicopters were intended for cartographical Chinese company Beijing BVE Technology Co. The Japanese authorities are inclined to suspect this company illegal communications with the Chinese army.
According to the Japanese current legislation, such transactions should be approved by the government. Nevertheless, any Yamaha has not received any sanctions for such activity. The police consider that Yamaha Motor’s employees managed to sell about 8 machines, which can be used in the military purposes.
For the first time Yamaha has been suspected in contraband in 2005 during the Trade Ministry’s inspection. After the information on possible deliveries had been forwarded to the law enforcement bodies, the police have carried out the total inspection of the company.
By the way, political and trading relations between two countries have been periodically marked with distrust and rivalry. Peking tries to challenge the fact of Japanese Senkaku islands possession. It is worth of mentioning that the wave of the anti-Japanese performances caused by occurrence in Japan of textbooks in which it was not spoken directly about the mass destruction of the Chinese arranged by imperial armies in Nanking in 1937, has rushed through China in 2005.

Italian prime-minister Romano Prodi has submitted the application on resignation. Today the application was accepted by the president of Italy.
Prodi’s decision can be explained by voting in the upper chamber of the Italian parliament which has not approved the resolution of the government on foreign policy.
The split inside of the ruling majority has occurred because of three parties, which entered into the ruling coalition, - the Party of the Italian communists, the Party of communistic transformation of Italy and the Party green - have refused to support the government in a question of participation of Italians in peace-making mission in Afghanistan and expansions of American military base.
In spite of the fact that the Minister of Foreign Affairs and prime-minister have repeatedly holding meetings with considerably adjusted pacifists, proving to them, that Italy cannot break the obligations to the USA, and also refuses participation in UNO’s mission, that would lead to the international isolation of the country, some “dissidents” have refused to vote in support of the governmental resolution.

The Eurocommission considers the construction of the North-European gas main on a bottom of Baltic Sea from Russia to Germany as the priority project which can provide access to the Russian gas of the countries Northern, Western and the East Europe.
Making comments on requirements of Poland and the Baltic states to lead ecological examination of this project, the representative of Eurocommission has informed that shareholders of the project are engaged in its organization. As he said, the Eurocommission considers observance of ecological norms as “the important priority” during realization of the project.
As the former chancellor of Germany, holding a post of chairman of the shareholders council, of Nord Stream Company, realizing the project of the North-European gas main, has declared at press conference in Bruxelles that the company is measured to finish ecological examination of the project in the 3-rd quarter of this year. He has assured that Nord Stream Company understands fears which are stated by Poland and the Baltic states. Nevertheless, everyone is aimed at development of mutually acceptable decisions with all interested parties.
“Gazprom”, Wintershall and E.ON Ruhrgas are the shareholders of Nord Stream Company. The company plans to start the exploitation of an underwater gas main by extent of 1200 km in the beginning of 2010.

On Tuesday the secretary of Supreme National Security Council (SNSC) of Iran Ali Larijani will carry on negotiations in the Austrian capital with the general director of the International Agency on Atomic Energy (IAEA).
As the constant representative of Iran in IAEA has informed o the delegation led by Ali Larijani is going to visit Austria. The basic themes of negotiations will concern the cooperation of Teheran with this international organization, and also a situation around of the Iranian nuclear problem.
This business meeting is to be held on February, 9th in Vienna. However the Iranian party has cancelled it because of the “technical reasons”.
Teheran still insists on the right to enrich uranium in the peace purposes. The development of the nuclear program of Islamic Republic causes serious concern of the World Community, being afraid that Teheran is hiding that it is using the nuclear program in the military purposes.
This week the term, given by Security Council of the United Nations to Teheran for a time suspension of works on enrichment of uranium is finishing.
On February, 23rd the IAEA will present to the United Nations agenda the report on how Teheran carries out the requirements of the resolution 1737 of Security Council across Iran, accepted in December, 2006. If the facts that Iran has not executed the requirement of the international community will be specified in the report, it is possible that UN Security Council will take additional measures on the basis of clause 41 of chapter of VII Charter of the United Nations.
Clause 41 authorizes Security Council to decide, what measures, not connected with use of military force, and should be applied to realization of its decisions. Nevertheless Security Council’s sanctions can include full or partial break of economic attitudes, the termination railway, sea, air, post, cable, radio- or other kinds of communications, and also a severance of diplomatic relations.
Before a meeting with IAEA general director Larijani (at conference in London) has declared that it is impossible to solve Iranian nuclear problem only by sanctions. And it is necessary to achieve understanding and to reach the agreement between the conflicting parties.

As it became known, the secretary of Supreme National Security Council (SNSC) of Iran Ali Larijani will renew negotiations on the Iranian nuclear problem with the Supreme representative of the European Union’s foreign policy Javier Solana in the near future.
The Iranian Foreign Ministry official representative Mohammad Ali Husseini has declared that at the conferences on safety in Munich Ali Larijani has specified, that the enrichment of uranium up to 4 % could become a good basis for renewal of negotiations between the EU and Iran. According to Larijani’s words the opposite party (EU) has got more incentives for getting out of the developed deadlock around of the nuclear program of Iran.
Husseini has also noted that the renewal of negotiations is expected and Iranian government welcomes and is ready to consider any project which will provide the rights of Iran for using peace nuclear technologies.
Husseini has again rejected the possibility of introductions by Teheran of the moratorium on enrichment of uranium. The Iranian Foreign Ministry official representative has emphasized that the moratorium concerns to the past and it has no lawful or logic substantiations and it is unacceptable for Iranian policy.
The Iranian Ministry of Foreign Affairs has also declared that Iran will not agree to freeze the nuclear program that demanded by Security council of the United Nations.
The Iranian Foreign Ministry official representative has told that the suspension of nuclear development programs is unacceptable. He said that there are no bases for this purpose.
The UN offered to Iran a term for freezing of the nuclear development programs till February, 21st.