Dinosaurs Extinction: Attributed to an Asteriod

 

So how did teh dinosaurs disappear?

Today, a Reuters report indicates that scientists are agreeable that they were done in by an asteroid smashing onto earth and the resultant environmental conditions no longer supported the continued existence for the dinosuars.

Let us read this report.

A giant asteroid smashing into Earth is the only plausible explanation for the extinction of the dinosaurs, a global scientific team said yesterday, hoping to settle a row that has divided experts for decades.
A panel of 41 scientists from across the world reviewed 20 years’ worth of research to try to confirm the cause of the so-called Cretaceous-Tertiary (KT) extinction, which created a “hellish environment” around 65 million years ago and wiped out more than half of all species on the planet.

Scientific opinion was split over whether the extinction was caused by an asteroid or by volcanic activity in the Deccan Traps in what is now India, where there were a series of super volcanic eruptions that lasted around 1.5 million years.
The new study, conducted by scientists from Europe, the United States, Mexico, Canada and Japan and published in the journal Science, found that a 15km-wide asteroid slamming into Earth at Chicxulub in what is now Mexico was the culprit.
“We now have great confidence that an asteroid was the cause of the KT extinction. This triggered large-scale fires, earthquakes measuring more than 10 on the Richter scale, and continental landslides, which created tsunamis,” said Joanna Morgan of Imperial College London, a co-author of the review.

The asteroid is thought to have hit Earth with a force a billion times more powerful than the atomic bomb at Hiroshima.

Morgan said the “final nail in the coffin for the dinosaurs” came when blasted material flew into the atmosphere, shrouding the planet in darkness, causing a global winter and “killing off many species that couldn’t adapt to this hellish environment.”

Scientists working on the study analysed the work of palaeontologists, geochemists, climate modellers, geophysicists and sedimentologists who have been collecting evidence about the KT extinction over the last 20 years.
Geological records show the event that triggered the dinosaurs’ demise rapidly destroyed marine and land ecosystems, they said, and the asteroid hit “is the only plausible explanation for this.”

Peter Schulte of the University of Erlangen in Germany, a lead author on the study, said fossil records clearly show a mass extinction about 65.5 million years ago — a time now known as the K-Pg boundary.
Despite evidence of active volcanism in India, marine and land ecosystems only showed minor changes in the 500,000 years before the K-Pg boundary, suggesting the extinction did not come earlier and was not prompted by eruptions.
The Deccan volcano theory is also thrown into doubt by models of atmospheric chemistry, the team said, which show the asteroid impact would have released much larger amounts of sulphur, dust and soot in a much shorter time than the volcanic eruptions could have, causing extreme darkening and cooling.

Gareth Collins, another co-author from Imperial College, said the asteroid impact created a “hellish day” that signalled the end of the 160-million-year reign of the dinosaurs, but also turned out to be a great day for mammals.

“The KT extinction was a pivotal moment in Earth’s history, which ultimately paved the way for humans to become the dominant species on Earth,” he wrote in a commentary on the study.

The move by Bank Negara Malaysia to raise the Overnight Policy Rate (OPR) by 25 basis has been expected by economists who are now projecting a further rise in the OPR by year end.

The central bank’s decision to raise the OPR to 2.25 per cent at its Monetary Policy Committee meeting this evening is expected, said Affin Investment Bank economist, Alan Tan. The stronger economic growth for the fourth quarter last year provided the room for Bank Negara to normalise interest rates after cutting it to a historical low last year, he said.

Tan said the process of normalising interest rates amid the backdrop of limited pressure on inflation coincide with the stronger-than-expected 4.5 per cent year-on-year gross domestic product growth in fourth quarter last year. He said with prevailing uncertainty in the global economic recovery, the increase in interest rates should not be seen as tightening of monetary policy but rather the normalising of interest rate which has been at record low, partly to address the issue of financial imbalances. Tan said he also expected a total of 50 basis points hike in OPR this year, which will bring the OPR to 2.5 per cent by end of the year.

Bank Islam Malaysia Bhd’s chief economist Azrul Azwar Ahmad Tajudin said he expected an even bigger increase in the OPR, and was looking at 3.0 per cent as a strong possibility this year. “I expect they (Bank Negara) will increase 25 basis point at each Monetary Policy Meeting until July this year, then it will take a breather until end of the year,” he told Bernama, expecting the move to be gradual. He said the ringgit should gain some grounds following the OPR hike and strengthen further going forward, while the Government’s decision not to make a fuel price adjustment would ease the pressure of inflation this year. “With such a modest inflation outlook, I don’t foresee an aggressive monetary tightening campaign,” he said.

RAM Holdings Bhd chief economist Dr Yeah Kim Leng expected another 75 basis points increase in the OPR this year and expected the rise to be gradual and to the pre-crisis level. He said 3.25-3.5 per cent should be a normal level for the OPR to ensure sustainable growth in the country. Yeah said raising the OPR signalled Bank Negara’s confidence in the economic recovery.

“The confidence is rising. We can see that the GDP projection is achievable,” he told Bernama, adding that many were expecting GDP to grow as much as five per cent this year with the Government looking at 6.0 per cent. He also expected the ringgit to strengthen further this year, in line with other Asian currencies. Yeah also expect the local unit to hit 3.2-3.3 level against the US dollar by end of this year. “The uptrend will continue because of the recent Euro and Pound weaknesses. Asian currencies will appreciate faster than other currencies,” he added.

Malaysian Investors Association president Datuk Dr P.H.S. Lim attributed the hike in interest rate to the better economic performance in the last quarter of 2009, and the US Federal Reserve move to increase interest rate by 0.25 points to 0.75 points. With a better economic background, interest rate will move up in line with global economic growth and to combat inflation, he added.

Furniture Business Scenario @2009

Let us looks at some facts and the scenario of furniture manufacturing in 2009.

There are more than 1,800 furniture companies currently operating locally and 90% of the production is for export. Total investment in the industry last year came to RM174.7mil. This information was given yesterday by the International Trade Minister at the Malaysian International Furniture Fair (MIFF) Exhibition 2010, Mustapha Mohamed.

Malaysia-made furniture is exported to more than 160 countries and the country is ranked the world’s 10th largest furniture exporter, while local furniture exports were valued at RM7.6bil last year, accounting for 1.9% of total exports of manufactured goods, according to Mustapa.

MIFF 2010, which began yesterday, will run till Saturday at three venues – the Putra World Tarde Centre, Kuala Lumpur Convention Centre and the Matrade Exhibition & Convention Centre (MECC).MIFF Sdn Bhd is the organiser of the fair with The Star as the official media partner.

More than 500 exhibitors from countries like Malaysia, China, Indonesia, South Korea, Singapore, the United States, Turkey and Japan are showcasing their products.
MIFF managing director Datuk Tan Chin Huat said sales of about US$750mil were expected at this year’s fair, compared with US$710mil last year.

“More than 20,000 visitors are expected at the fair this year, compared with a total of 19,075 visitors last year,” he told a press conference.

He said economic spinoffs of over RM40mil were expected to be generated for Malaysia’s tourism, hotel, restaurant and other businesses during the fair.

In an effort to highlight ongoing trends in the furniture industry, a series of seminars with the theme, “Sustainable Materials for Green Future,” has also been arranged by the organiser.

MRCB: Rights Serendipity

After the annoucement that the rights issue was over-subscribed,this definitely came as a big bomb! A technical under-subscription? How did it occur? Are the MRCB lawyers as well as the Investment Bank that conducted the rights issue offer,'asleep at the wheel'?

Let us read how the imbroglio happened. This is the STAR on-line report on 4 March 2010.

The Employees Provident Fund (EPF) has made a conditional takeover offer to buy all the shares in Malaysian Resources Corp Bhd (MRCB) for RM1.50 each after triggering the takeover threshold.

The exercise could see EPF pay up to RM1.36bil for MRCB if there was full acceptance from other shareholders.

The conditional offer was prompted after EPF was allocated additional shares under MRCB’s RM566mil rights issue that led to the fund’s shareholding in the developer exceed 33% to 33.78%.

The increase in EPF’s shareholding past the 33% threshold obliged the fund to conduct the takeover under the Malaysian Code on Take-Overs and Mergers, 1998.

In a statement to Bursa Malaysia yesterday, MRCB said EPF, however, intended to maintain the listed status of MRCB and would not privatise the company.

OSK Research head Chris Eng said the offer of RM1.50 a share was slightly below the brokerage’s fair value and that the offer itself was not very attractive.

“There is a lot more potential in the company which we have not factored into the fair value of the stock,’’ he said.

MRCB is talked about being a bidder for major tracks of land in the Klang Valley and the money it raised from the rights issue would go towards buying land for future development projects.

Analysts said its track record in developing KL Sentral would act as a good platform for MRCB in making its case in any bids for such land.

Sources said EPF was unable to apply for a waiver from making the takeover from the Securities Commission as it did not fulfill an important criterion, which is the condition of not trading a company’s shares in the past six months.[As such the issuing house Investment Bank should take note of this condition: They should not be buying the targeted shares within the period of 6 months if they attend to apply for a Mandatory General Offer(MGO) waiver.]

Under the Code, EPF would have to offer to shareholders of MRCB the highest price it paid to buy an MRCB share over the past six months, sources said.

The offer for MRCB represents a small 2% premium over the last traded price of the stock of RM1.47. Sources said EPF wanted to make a fair offer but did not intend to give large premiums of around 20% seen in other privatisation deals as it was not the fund’s intention to delist the company from the stock exchange.
“It does not want to take the company private and would like to see future capital appreciation of MRCB,’’ the source said.

Sources also shot down suggestions that the takeover offer was a new strategic direction for the fund where it would prefer direct control of companies.
 
Although EPF controls RHB Capital Bhd and Malaysian Building Society Bhd, it does not want to take MRCB down the same path.

Sources said even if EPF, which also owns large stakes in other developers such as IJM Corp Bhd, dramatically increases its stake in MRCB, it would not make MRCB its vehicle for property ventures.

So which way will the share price go now? It is obvious that the shareholders will not take this offer price of RM1.50 when the current current  price is RM1.46

China: Rural Buying Surge!

This Reuters report shows that rural buying support in spurring the GDP of the Chinese nation.

When Dell Inc reported its fourth-quarter results last month, the announcement included a surprising figure — an 81 percent jump in the PC maker’s China sales during the quarter.

Fueling this result, said the company, were government incentives to spur domestic consumption, particularly in small cities and rural areas.

Dell, which sells its computers in China through retail chains as well as through its direct sales model, is not alone.

Competitors ranging from China’s Suning and GOME to foreign rivals like Wal-Mart Stores Inc and Best Buy are profiting from Beijing’s determination to drive economic growth by boosting spending in the country’s US$1.8 trillion (RM6 trillion)retail market.

The Chinese government announced recently that it will extend its incentives for rural and small-city consumers, setting off what is likely to be a close competition among retailers that have until now focused mainly on China’s big cities.

The opportunity is big. More than two-thirds of China’s 1.3 billion people live in rural areas — roughly three times the entire population of the United States. Retail sales in these areas grew 16 per cent to 4 trillion yuan (RM1.97 trillion) last year.

Investor optimism about China’s stimulus spending has already sent China retail shares soaring. GOME, for one, jumped 180 per cent in 2009, outstripping a 52 per cent rise in the broader  Hong Kong market.
China’s domestic electronics retailers are pursuing their new customers aggressively.

Suning, the country’s largest electronics chain by market value, said it would use the 3 billion yuan it raised from a share sale to expand sales network and to develop logistics centres. It plans to add 520 new stores in 2010 on the existing network of 941 stores across China.

Rival GOME, with over 700 stores across China, has adopted a “go rural” policy, and plans to team with small local retailers to increase the range of products on offer in a bid to tap rural spending growth.

Foreign retailers are also starting to look outside the tier-one cities. Wal-Mart, the world’s biggest retailer, electronics retailer Best Buy and France’s Carrefour are all eyeing growth in second and third-tier cities, if not yet rural areas.

Profits from these ventures won’t be immediate, however.

Suning and GOME probably won’t see their new rural stores break even in fewer than five years, said Natalie Zhu, a senior China retail analyst from JLM Pacific Epoch, a Shanghai- and Beijing-based research firm.

And as they move into China’s hinterlands, domestic and foreign retailers alike will have to confront entrenched local competitors.

“Individual operators now occupy the majority of the (rural) market,” said Zhu. “Even (national) local players have very little market share for the time being, not to mention the foreign operators.”

Independent local players, which account for more than 50 per cent of the rural market, have advantages including being able to use their familiarity with local spending behaviour to adjust their offerings and provide customised product advice to their customers.

“Even domestic players will find it quite difficult to penetrate the true rural areas, because the market, the demand and the customers have very different profiles compared with bigger cities,” said Bei Fu, a director of corporate and infrastructure ratings at Standard & Poor’s.

Consider televisions. Rural consumers tend to prefer big screen TVs, which confer greater status in their villages while urban shoppers are more focused on quality and brand, according to Zhu.

While national operators like Suning and GOME will struggle to compete with local chains, their wide selection of fast-selling electronics products may give them an edge over foreign players such as Wal-Mart and Carrefour.

When asked recently about flat-screen televisions, a salesman in the small electronics department of a newly opened Carrefour in the second-tier factory town of Dongguan suggested the reporter look elsewhere.
“You can probably get a wider choice of products in the Suning just down the street,” he said.

There is another risk in the retailers’ rural expansion plans: if China scales back its incentives, rural spending growth could stall, saddling retailers with a costly and unprofitable network of stores.

For now, though, that seems like a distant worry.

“What does China have the most of? Farmers. The rise of this spending group will drive growth of the retail sector,” said Linus Yip, strategist of First Shanghai Securities.

“Growth is definitely there.”

Axiata: Cash Flow Positive

So for the first time Axiata, Malaysia’s second-largest mobile phone company Axiata may consider paying a dividend from 2011 as improving business conditions have helped bolster its balance sheet, its chief executive said on Wednesday.

A likely payout to shareholders would be the first dividend from the company since its listing in 2008 after it was split from Telekom Malaysia.

“We have not made any decision ... However given the strength of our balance sheet, especially our cash and debt position, we are in good position to consider it from 2011 onwards,” Axiata’s CEO Jamaludin Ibrahim told Reuters in an interview.

Axiata’s 2009 net profit tripled to 1.65 billion ringgit, helped by strong performance of its overseas subsidiaries in Indonesia and Bangladesh unit AxB.

The firm, which has a market value of $9.5 billion, turned free cash flow positive for the first time in 2009 and slashed its gross debt to earnings before interest tax depreciation and amortisation (EBITDA) ratio to 2.4 times from 4.6 times.

Malaysia: Stimulus Pullback?

Bloomberg tweeted this news report today.

Let us read this tweet.

"Malaysia may be the next Asian country to pull back monetary stimulus as its recovery strengthens, moving to raise borrowing costs or reduce excess cash in the economy ahead of neighboring Indonesia.

Eighteen out of 29 economists surveyed by Bloomberg News expect Bank Negara Malaysia to raise its benchmark interest rate to 2.25 per cent from 2 per cent or ask lenders to set aside more money as reserves at its March 4 meeting. None of the 22 economists surveyed expect Bank Indonesia to increase its reference rate from a record-low 6.5 per cent tomorrow.

Asia is leading a global recovery from the worst slowdown since World War II, prompting the region’s central banks to start removing some emergency steps taken to counter the slump. Malaysia’s economy expanded 4.5 per cent last quarter, rebounding from nine months of contraction, while Indonesia, which has avoided a recession, is trying to boost lending.

“Indonesia’s economy has been doing very well but it has not surprised on the upside to the extent that it has in Malaysia,” said Kevin Grice, an economist at Capital Economics Ltd in London. “Central banks don’t want to surprise, and there have been comments by policy makers in Indonesia that rates are appropriate compared to Malaysia, where the governor has been hawkish.”

Malaysia’s one-year interest-rate swap reached a one-year high of 2.675 per cent on Feb 24 after a report showed the nation exited its recession last quarter. The three-month rate due in one year stood at 3.42 per cent, suggesting the market has priced in about 1.42 percentage points’ increase in the policy rate in a year’s time, according to Bloomberg data.

Exports Revival

Prime Minister Datuk Seri Najib Razak expects Malaysia’s US$195 billion economy to expand 6 per cent in 2010, faster than the 2 per cent- to-3 per cent pace the government forecast in October, a newspaper reported this week. His trade minister said yesterday exports may climb this year at twice the pace predicted earlier as the global recovery revives overseas sales of Sime Darby Bhd’s palm oil and Intel Corp’s computer chips.

Policy makers in Australia, China, India and Vietnam have started tightening monetary policy to stave off inflation and asset bubbles. Australia’s central bank yesterday resumed raising interest rates after a one-meeting pause amid a booming jobs market, rising home prices and a rebound in confidence.

‘Hawkish’ Comments

Malaysia’s central bank Governor Tan Sri Dr Zeti Akhtar Aziz has been making “hawkish comments” since the last interest-rate meeting in January, economists including HSBC Holdings Plc’s Robert Prior-Wandesforde said. Bank Negara has kept the benchmark overnight policy rate at a record-low 2 per cent for seven straight meetings.

The central bank lowered rates under emergency conditions and the economy is no longer in such an extraordinary situation, Market News International reported Zeti as saying in Frankfurt on March 1. Any interest-rate adjustment would be “a measured one,” she was cited as saying.

Thirteen of the 29 economists surveyed expect the central bank to raise the benchmark rate. Still, Bank Negara may prefer to raise the reserve requirement for banks rather than increase its overnight policy rate, according to at least six analysts, including economists at Capital Economics and Royal Bank of Scotland Group Plc. A 0.5 percentage-point increase may be announced tomorrow to help drain funds from the financial system, they predicted.

Indonesian Inflation

The reserve ratio, which determines the amount of funds lenders must hold as zero-interest-bearing reserves at the central bank, was cut to 1 per cent in March 2009, a quarter of the November 2008 level.

In Indonesia, where inflation has accelerated to the fastest pace in nine months, economists are unanimous that the policy makers will judge it too soon to raise interest rates. The consumer price index rose 3.81 percent in February from a year earlier.

Consumer price gains will remain within the central bank’s target range of 4 per cent to 6 per cent, and Bank Indonesia can wait until the third quarter before raising rates, said Wellian Wiranto, an economist at HSBC.

Bank Indonesia, which forecasts the nation’s 121 commercial lenders will accelerate credit growth to as much as 20 per cent this year, may wait until there are more signs of banks extending loans before raising interest rates, economists say.

“Indonesia’s central bank is now encouraging commercial banks to reduce their lending rate so if they raise rates, it’s contrary” to that goal, said Gundy Cahyadi, an economist at IDEAglobal in Singapore. He expects a rate increase at the beginning of the third quarter.

Indonesia’s decision is due after 11 am in Jakarta tomorrow. Malaysia will release its decision at 6 pm.