Rare diamond to go under the hammer
A rare round blue diamond will go under the
hammer in Hong Kong in October, with auctioneers hoping the sale will fetch a
record-breaking $19m despite fears over the slowing Chinese economy.
Auction house Sotheby's expect the 7.59-carat fancy vivid blue diamond, which is about the size of a shirt button, to set a new record for price-per-carat.
Quek Chin Yeow, Sotheby Asia's deputy chairperson, said Hong Kong was the natural venue to sell the gem, known as "The Premier Blue", with collectors expected to fly in from all over the world.
"While there is a slowdown (in Chinese economy), the number of top-level collectors are still there," he told AFP.
"We have been selling very well in Hong Kong."
Jewellery auctions
Hong Kong has become a centre for jewellery auctions thanks to growing wealth in China and other parts of the region, as well as the region's increasing taste for art.
But there are fears for the future of the Chinese economy, the world's second largest, where growth fell to 7.8% in 2012 - its slowest pace in 13 years.
Blue diamonds seldom hit the market and have been coveted by royals and celebrities for centuries, while a round cut is rarely used in coloured stones because of the high wastage.
The most famous example of a blue diamond is the "Hope Diamond", which was bought by King Louis XIV of France in the 17th Century.
The term "fancy" is used to describe a diamond of intense colour, while a gem's saturation grading ranges from light to vivid for coloured diamonds.
The Premier Blue will go up for auction on October 7. Quek said the owner wanted to remain anonymous.
In April, a rare 5.3-carat fancy deep-blue diamond was sold for £6.2m ($9.5m) at a London auction, then setting a record for price-per-carat at $1.8m.
Auction house Sotheby's expect the 7.59-carat fancy vivid blue diamond, which is about the size of a shirt button, to set a new record for price-per-carat.
Quek Chin Yeow, Sotheby Asia's deputy chairperson, said Hong Kong was the natural venue to sell the gem, known as "The Premier Blue", with collectors expected to fly in from all over the world.
"While there is a slowdown (in Chinese economy), the number of top-level collectors are still there," he told AFP.
"We have been selling very well in Hong Kong."
Jewellery auctions
Hong Kong has become a centre for jewellery auctions thanks to growing wealth in China and other parts of the region, as well as the region's increasing taste for art.
But there are fears for the future of the Chinese economy, the world's second largest, where growth fell to 7.8% in 2012 - its slowest pace in 13 years.
Blue diamonds seldom hit the market and have been coveted by royals and celebrities for centuries, while a round cut is rarely used in coloured stones because of the high wastage.
The most famous example of a blue diamond is the "Hope Diamond", which was bought by King Louis XIV of France in the 17th Century.
The term "fancy" is used to describe a diamond of intense colour, while a gem's saturation grading ranges from light to vivid for coloured diamonds.
The Premier Blue will go up for auction on October 7. Quek said the owner wanted to remain anonymous.
In April, a rare 5.3-carat fancy deep-blue diamond was sold for £6.2m ($9.5m) at a London auction, then setting a record for price-per-carat at $1.8m.
China bans more dairy products
More New Zealand milk products sold to China have been banned after elevated levels of nitrates were found, raising further concerns over quality and testing in the world's largest dairy exporter in the wake of a contamination scare earlier this month.
New Zealand's agricultural regulator said on Monday it has revoked export certificates for four China bound consignments of lactoferrin manufactured by Westland Milk Products after higher than acceptable nitrate levels were found by tests in China.
Two of the four consignments had been shipped to China but had not reached consumers, New Zealand's Ministry of Primary Industries (MPI) said.
"Any food safety risk to Chinese consumers is negligible because the quantities of lactoferrin used in consumer products was very small, meaning the nitrate levels in those products would easily be within acceptable levels", Scott Gallacher, the acting director-general of the MPI, said in a statement.
The announcement comes just weeks after Westland's much bigger competitor, Fonterra, said some of its dairy ingredients were contaminated with a botulism-causing bacteria. This prompted a recall of infant formula products, sports drinks and other products in China, New Zealand and other Asia-Pacific nations.
"All of the product has been located, none of it has entered the retail food chain," Westland Chief Executive Rod Quin told . "We're well aware of the wider context of the issue and related concerns, so we've acted to make sure the product doesn't go any further."
China's top quality watchdog said it had halted all imports of the product from Westland and asked other New Zealand dairy companies exporting lactoferrin to provide nitrate test reports.
The General Administration of Quality Supervision, Inspection and Quarantine of China urged the New Zealand government to thoroughly scrutinise its dairy companies as well as their products to ensure the safety of exports to China, New Zealand's top dairy market.
Affected batches
The four consignments were derived from two affected batches of lactoferrin, a naturally occurring protein found in milk, manufactured by Westland at its Hokitika factory on the country's South Island.
Initial investigations pointed to contamination by cleaning products which contain nitrates that were not property flushed from the plant, Quin said.
Privately owned Westland makes about 120 000 tonnes of dairy product each year, exporting the majority. Its production pales in comparison with that of Fonterra, which exports 2.5 million tonnes of product.
ANZ agricultural economist Con Williams said that the 390 kg of affected Westland product was much smaller than the 38 tonnes of contaminated product produced by Fonterra. As a result, he expected it would have limited impact on global demand for New Zealand dairy products.
"The timing isn't ideal. There's heightened concern around food safety issues at the moment especially in the dairy sector in light of the Fonterra issue two weeks ago," Williams said.
"But in terms of the actual issues, it doesn't seem to be substantial ... It looks like only a very small amount of product was affected and it doesn't seem to be a food safety issue."
The two batches of lactoferrin showed nitrate levels of 610 and 2 198 parts per million, respectively, above the New Zealand maximum limit of 150 parts per million.
Westland exported one batch directly to a Chinese distributor, which sold the product on as an ingredient for other dairy products. The second batch was supplied to New Zealand's Tatua Co-operative Dairy Company, and also exported to China.
"MPI, the Ministry of Foreign Affairs and Trade and the companies concerned are working closely with the Chinese authorities on this issue," Gallacher said.
There was no affected lactoferrin used in products in New Zealand or exported elsewhere.
New Zealand relies on diary exports for about a quarter of its NZ$46bn ($37bn) in annual export earnings.
New Zealand plans tainted dairy probe
New Zealand on Monday announced plans for a government inquiry into how ingredients made by dairy giant Fonterra became contaminated with a botulism-causing bacteria, as the country tries to salvage its reputation as an exporter of safe agricultural products.
The inquiry, to be held alongside two internal Fonterra investigations and another by the country's agricultural regulator, will examine how the potentially contaminated products entered the international market and whether adequate regulatory practices were in place to deal with the issue.
"This will provide the answers needed to the questions that have been raised about this incident, both domestically and internationally," said Primary Industries Minister Nathan Guy, who is leading the inquiry along with Food Safety Minister Nikki Kaye.
"It is also an important step in reassuring our trading partners that we take these issues seriously," he said in a statement.
The contamination announced earlier this month has led to product recalls in countries from China to Saudi Arabia.
Fonterra, the world's largest dairy exporter, has come under attack at home and abroad for dragging its feet in disclosing the discovery of the bacteria.
Fonterra chief executive Theo Spierings welcomed the inquiry, saying in the statement that the company would provide all necessary information.
The inquiry will be expected to provide an interim report in around three months.
New Zealand depends on the dairy industry for a quarter of its total exports. China is a major export market for New Zealand's dairy products.
Foreign Affairs Minister Murray McCully is visiting Beijing this week in to smooth relations with the country's biggest milk powder customer, and Prime Minister John Key has said he plans to visit China later this year to discuss the contamination issue after the inquiry results are complete.
Greece sacks privatisation agency chief
Greece dismissed the chairperson of its privatisation agency on Sunday after a newspaper reported that he travelled on the private plane of a businessman who just bought a state company.
Stelios Stavridis is the second head of HRADF to leave in less than six months, reigniting controversy around Greece's ailing privatisation programme which is a key part of its international bailout.
Delays and privatisation receipt shortfalls are a constant headache for the European Union and the International Monetary Fund, which bankroll Greece's €240bn rescue.
The lenders said last month that they would review the way HRADF was operating, after it emerged that the agency would miss its 2013 revenue target by about €1bn.
"Finance Minister Yannis Stournaras asked today for the resignation of HRADF chairperson Stelios Stavridis," the finance ministry said in a brief statement.
A finance ministry official, speaking on condition of anonymity, told that Stavridis's resignation was effective immediately.
The official said the dismissal followed a report in Proto Thema on Saturday that Stavridis travelled last week on the private plane of shipowner Dimitris Melissanidis, a major shareholder of a Greek-Czech consortium which in May agreed to buy a 33% stake in state gambling firm OPAP.
Stavridis was not immediately available for comment.
According to the newspaper report, he admitted he used Melissanidis's plane to travel to his holiday home.
"Melissanidis, who was travelling to France, offered to take me with him to accommodate me," he was quoted as saying by the newspaper.
Stavridis took the flight immediately the signing of an agreement to finalise the €652m OPAP deal, Proto Thema said.
HRADF chief executive Yannis Emiris told he was keeping his post and that Greece's ailing privatisation programme would not suffer from Stavridis's resignation.
"There will be absolutely no delays to the programme," he said, rejecting the idea that the OPAP deal might be reversed as a result of Stavridis's resignation.
The finance ministry official confirmed the OPAP deal would not be affected and the Stavridis's resignation was for "ethical reasons".
Stavridis's predecessor Takis Athanasopoulos stepped down after he was charged by a prosecutor with breach of duty over his former role as chairman of a state utility.
China wants fewer free trade zone curbs
China hopes to suspend its laws governing foreign investment in proposed free trade zones, the cabinet said, in a sign the world's second-biggest economy could open further to foreign competition.
The State Council, China's cabinet, will ask senior members of the National People's Congress, or parliament, for the power to suspend laws and regulations governing both foreign-owned companies and joint ventures between Chinese and foreign companies in free trade zones, including Shanghai, the cabinet said on its website.
The move is aimed at "accelerating transformation of the government's role ... and innovating ways of (further) opening up (to foreign investment)," according to the statement, seen on Sunday. It set no timetable, and gave no further details.
Foreign direct investment in China slowed in 2012 but reversed its decline in the first quarter of this year as confidence improved.
China attracted $38.3 billion in foreign direct investment in the first four months of 2013, up 1.2 percent from the same period in 2012.
China's financial centre, Shanghai, will test yuan convertibility and cross-border capital flows in the free trade zone pilot programme.
The country's new leaders have signalled they want to speed the process of making the yuan fully convertible over the next few years, as part of efforts to boost the currency's use in trade and support wider financial reforms.
Shanghai officials are keen to experiment with freeing up the capital account and yuan convertibility, fearing the city could be left behind as rival centres, such as Hong Kong and Taiwan, move to develop cross-border yuan financial services.
Shanghai stepped up lobbying efforts after the 2012 creation of a special trade zone in Qianhai, near the southern boomtown of Shenzhen and across from Hong Kong, where yuan convertibility is being trialled.
The Qianhai zone, administered by the central bank, the People's Bank of China, lets banks from Hong Kong offer cross-border yuan-denominated loans to mainland firms.
Other initiatives announced in 2013 include trial programmes to smooth the way for foreign firms to move funds in and out of China, cutting the need for approvals and easing bank procedure.
Investors dump India as crisis deepens
Indian policymakers are looking increasingly panicky as they battle the worst currency crisis in more than two decades, and more worryingly there is no sign their remedies are working.
The rupee lurched to a new lifetime low of 62.03 to the dollar on Friday while the benchmark share index posted its biggest one-day fall since September 2011.
"None of the policymakers' Band-Aid measures (from capital controls to tightening liquidity) seems to be working. They have not been able to turn the tide," Rajeev Malik, economist at investment house CLSA, told AFP.
"The government and the Reserve Bank of India are taking fire-fighting measures."
The rupee has lost 57% of its value against the US currency since it peaked at 39.40 rupees to the dollar in February 2008.
The currency's strength began unravelling when Lehman Brothers collapsed later that year, triggering the global financial crisis.
But pressure on the rupee has mounted in the past two years as investor alarm over a slowing economy and a ballooning current account deficit - the widest measure of trade - has grown.
Part of the reason for the currency's most recent slide - it has fallen 13% this year against the greenback - lies outside Indian policymakers' remit.
The currencies of emerging markets globally have fallen on expectations that an increasingly buoyant United States will soon roll back stimulus responsible for funnelling big investments overseas in quest of high yields.
But other reasons for the rupee's drop are home-made - failure to move fast enough on economic reform, a series of government corruption scandals, perceptions of policy paralysis and the record current account deficit, analysts say.
Since June 1, overseas funds have pulled out $11.58bn from India's stock and debt markets.
Investors worry that despite the long-term growth potential of the country of 1.2 billion people, "things are not in shape in the interim period", said investment house IDBI research head Sonam Udasi.
As the rupee's woes have deepened, authorities have responded with a clutch of measures to try to stem its decline and avert a balance-of-payments crisis.
India has painful memories of its 1991 balance of payments crisis when it failed to attract enough foreign currency and was forced to fly 47 tonnes of gold as collateral for an International Monetary Fund loan in what was seen as a national humiliation.
Indian Prime Minister Manmohan Singh, who was finance minister at the time, was moved Saturday to rule out a repeat, saying: "There is no question of going back to the 1991 crisis."
In the past few weeks, Indian policymakers have hiked short-term interest rates, announced plans to allow state firms to raise foreign funds abroad and curbed gold imports.
They have also threatened to imposed higher duties on imported electronic appliances such as fridges, which are made locally.
But it is their most recent step - stealthily announced late Wednesday on the eve of a national holiday - that has fanned the deepest consternation.
The central bank sharply tightened controls on the amount of money firms and individuals can send abroad.
The move looked to observers like a disturbing throwback to the days before India unleashed its economic liberalisation drive in the early 1990s when Indians' access to foreign exchange was strictly limited.
Confederation of Indian Industry president Kris Gopalakrishnan criticised the move as "retrograde".
While the capital controls only apply to local individuals and firms, the restrictions may raise worries among overseas investors that they could be extended to foreign companies operating in India, analysts say.
Under the new policy, Indian individuals can send just $75,000 out of the country annually, down from $200 000 - making it tougher to pay children's overseas university fees, for example.
Companies can invest abroad only 100% of their net worth, down from 400% - though the central bank says firms can ship out more money if they give authorities a good reason for doing so.
"While the authorities aim to reduce foreign-exchange volatility, we fear they may end up sending a panic signal," Nomura economist Sonal Varma said.
There have been no signs so far of domestic capital flight but analysts say the controls may have been tightened to avert one in the face of India's troubles.
The economy expanded last year at a decade-low of five percent and indicators this year have been grim with economists warning about "stagflation" - a combination of high inflation and low growth.
With an election to be held by May 2014 and pro-market reforms divisive, there is no way the Congress government can undertake root-and-branch reforms needed to put the economy back on track, economists say.
"There is a complete lack of faith in the markets" about India's outlook, said Param Sarma, chief executive at consultancy firm NSP Forex.
