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President Barack Obama cancels visits to Malaysia and Philippines

The shutdown of the U.S. government appeared likely to drag on for another week and possibly longer as lawmakers consumed day three of the shutdown with a stalling game and there was no end in sight until the next crisis hits Washington around October 17.

Bowing to the reality that the impasse requires him to remain in Washington, President Barack

Obama cancelled plans to attend summits in Indonesia  and Brunei next week. Earlier this week, he cancelled visits to Malaysia and the Philippines because of the shutdown.

October 17 is the date Congress must raise the nation's borrowing authority or risk default, and members of Congress now expect it to be the flashpoint for a larger clash over the U.S. budget as well as President Barack Obama's healthcare law.

The situation gives "every appearance of getting dangerously close to the conversation on the debt ceiling," said Nancy Pelosi, the Democratic minority leader of the House of Representatives.

In fact, she said, "We're in the conversation on the debt ceiling."

At the same time, hopes that the debt ceiling fight could be resolved without a catastrophe were raised by reports in The New York Times and Washington Post that House Speaker John Boehner told other lawmakers he would work to avoid default, even if it meant relying on the votes of Democrats, as he did in August 2011.

Source: Reuters

India:Gurgaon from fields to Global Tech Hub

The farmers’ children in dusty Darbaripur no longer want to work the land. For them, software engineering is the new occupation of choice.

It’s not surprising. Their paddy fields have given rise to India’s latest technology hub – tall glass buildings dot the skyline, the hundreds of offices inside brightly light up Gurgaon. It’s 7am in the morning. Buffaloes graze nearby, and farmers settle down to their traditional clay hookahs. There’s very little left of their ancestral village.

“There are no farms left here for us to remain farmers,” he says. “Our hope is that our future generation will also be employed as software engineers in the offices that have sprung up here. Given good education and the right facilities, our children are also capable of achieving anything.”

The dream is not as far-fetched as it seems. Located just outside India’s national capital, Delhi, the high-rise homes and offices in India’s so-called “Millenium City” are the product of two decades of the country’s rapid economic growth. Hundreds of software companies and call centres have set up shop here. The private sector is championing the India dream – it accounts for 87% of the total investments worth $72 billion USD (4.5 lakh crore rupees) that were attracted by the state (as of June 2012), according to the Associated Chambers of Commerce and Industry of India.

Gurgaon is becoming one of India's most important cities. Its proximity to Delhi means that companies have access to political decision makers. The diversity of companies here – ranging from every major telecom player to automobile manufacturer to banking company means that the talent pool is diverse and with valuable experience. Many experts in India feel that Silicon Valley succeeded because of the kind of crossroads it provided for technical, creative minds with the right financial and marketing input. Gurgaon seems to be at a similar cusp now.

Unlike Bangalore or Mumbai, real estate is not a problem here; the city was started by developers so there is an abundance of high-quality office and residential spaces. So, in the 1990s, when multinational companies looked for office space to house thousands of employees in call centres in India, Gurgaon became an obvious choice. 

Indian real estate company DLF persuaded Jack Welch – then the chief executive of General Electric (GE) – to set up a facility here, and in 1997 it became the first US company to outsource software work to India.

Genpact’s story best illustrates Gurgaon’s success. The company began as a call centre within General Electric, but it was hived off in 2005 as a separate entity, and began to service other clients outside of GE. Today it employs nearly 60,000 people, and has centres across the world.

Gurgaon too has grown; it’s now the biggest hub of outsourcing companies in the world. Thanks to the success of its industry, half-a-million new jobs have been created in the area. India now has over 50% market share in the world’s IT outsourcing industry, and most of that work happens from Gurgaon. The total global and domestic outsourcing market opportunity for India is expected to grow three-fold from $500bn in 2008 to $1.5tn by 2020, according to India Brand Equity, a foundation set up by the government.

Ministers at TPP talks aim for basic agreement

Ministers at the Trans-Pacific Partnership free trade talks say they are determined to pave the way for a basic agreement on the most contentious issues.

The ministerial talks began on Thursday in Bali, Indonesia, with the 12 member nations represented. Economic Revitalization Minister Akira Amari is representing Japan.

On the first day of the 4-day meeting, the delegates said they will work to resolve differences on tariff elimination on farm products, patent rules and other issues.

They agreed to lay the groundwork for the leaders of their countries to reach a basic agreement at the summit talks next Tuesday.

Source: NewsOnJapan

Japan's economy: Third arrow, please. The Economist

THE last time any politician dared to raise Japan's unpopular consumption tax, people were beginning to use something called e-mail, the craze for Tamagotchi pets was spreading, and the economy was almost five times the size of China's.

It was 1997, and Ryutaro Hashimoto, then prime minister, wanted to rescue the public finances. The economy weakened sharply after the tax increase, and Mr Hashimoto was gone soon afterwards. That memory hangs over the decision this week by Shinzo Abe, the prime minister, to raise the consumption tax from its current level of 5% to 8% next April (see article). He is expected to raise it to 10% 18 months later. Not surprisingly, Mr Abe's people blew hot and cold for months about whether he should endorse the rise. Now that he has done so, his backers are claiming that his move will come to be seen as a turning-point for Japan's troubled finances. The gross national debt stands at well over 200% of GDP, the highest ratio in the rich world. Since the country's financial and property bubbles burst in the early 1990s, government spending has leapt, while tax revenues have stagnated.

The splurge was driven partly by Keynesian attempts to end Japan's slump. But spiralling health and pension costs also had much to do with it-and, with a rapidly ageing society, they have a lot further to climb. Welfare-related spending now consumes almost a third of the general budget, about double the proportion in 1990. Against this background, a modest rise in the consumption tax ought scarcely to be an issue. In fact, the consumption tax probably needs eventually to go up to 20%-ie, to European levels-if Japan is ever to have a hope of stabilising its finances.

The trouble has always been a fragile, stop-start economy. The political class has long been haunted by the experience of 1997, though the Asian financial crisis raging at the time surely also played its part in the recession. This time, though, things are different. An increase in the tax has been in the political works for years. Postponing it would have shattered any credibility Mr Abe claimed for fiscal discipline, while undermining his argument that his programme of "Abenomics" to get the economy moving again is working.

Source: The Economist

New EyeSight Collision avoidance system in Vehicles

Fuji Heavy Industries Ltd. has announced that its next-generation EyeSight collision avoidance system will be installed in new vehicles it will launch in 2014.

The new EyeSight system uses a color-recognizing camera to detect the brake light color of the car in front and automatically stops the vehicle in the event of a possible collision, the maker of Subaru vehicles said Wednesday.While the existing EyeSight uses black and white images to analyze the situation in front of the car, the new color recognition technology enables the vehicle to detect red light.

China-Malaysia to deepen Economic and Strategic Cooperation

Chinese President Xi Jinping arrived here Thursday for a state visit to Malaysia, the second leg of his maiden trip to Southeast Asia since he assumed presidency in March.

During his stay in the country, Xi is scheduled to meet Supreme Head of State Abdul Halim Mu'adzam Shah and Prime Minister Najib Razak and attend a China-Malaysia economic cooperation summit.

Both China and Malaysia are important countries in the region and they share extensive common interests, Xi noted in a statement delivered upon arrival.

"To deepen the strategic cooperation between our two countries accords with the aspiration of our people and the trend of the times," Xi said, adding that it is also conducive to regional peace, stability and prosperity.

The Chinese president expressed the hope that the visit will help deepen the traditional friendship between the two countries and achieve new progress in China-Malaysia strategic cooperation.

Prior to Xi's visit, Najib told Xinhua in an interview that the visit signals China's desire to maintain warm ties with Malaysia, which will advance on a strong footing under China's new leadership.

The trip, added the prime minister, will lift bilateral ties to a higher level and add fresh impetus to Malaysia-China cooperation.

China and Malaysia have seen the development of their relations gaining momentum in recent years.

China has been Malaysia's largest trading partner for four consecutive years, while Malaysia has been China's largest in the 10-member Association of Southeast Asian Nations (ASEAN) for five years in a row.

In 2012, two-way trade soared to a record high of 94.8 billion U.S. dollars, nearly a quarter of China's total with ASEAN.

Source: Xinhua

China-Indonesia Comprehensive Strategic Partnership

Visiting Chinese President Xi Jinping and his Indonesian counterpart, Susilo Bambang Yudhoyono, on Thursday mapped out the future course of their countries' cooperation.

The course of action was laid out in a joint document released Thursday and titled "Future Direction of China-Indonesia Comprehensive Strategic Partnership."

During the visit, the two presidents held extensive and in-depth talks and reached important consensus on bilateral relations as well as global and regional issues of common concern.

Commending the past progress in the development of bilateral ties, they agreed to lift the China-Indonesia relationship to a comprehensive strategic partnership.

On political cooperation, the two leaders emphasized that they will continue to enhance mutual support on issues involving the two countries' core interests and major concern.

Xi stressed Beijing's respect and support for Indonesia's national unity and territorial integrity, and Yudhoyono reiterated Jakarta's adherence to the one-China policy.

The two presidents agreed to maintain regular exchange of visits between leaders of the two countries and improve various bilateral consultation mechanisms.

They also hailed the achievements in bilateral defense cooperation and vowed to push forward cooperation in joint military exercises and training, maritime security, defense industry and non-traditional security areas.

The two sides agreed to intensify the bilateral counter-terrorism consultation mechanism and continue promoting judicial and law enforcement cooperation.

On the economic front, the two leaders pledged to continue working vigorously to achieve the 80-billion-U.S.-dollar goal in bilateral trade by 2015, and China vowed to continue to encourage its enterprises to increase direct investment in Indonesia.

The Chinese president reaffirmed Beijing's readiness to continue encouraging and supporting Chinese enterprises to participate in Indonesia's infrastructure development.

Yudhoyono welcomed and encouraged China's greater investment in and contribution to the infrastructural connectivity in Indonesia, such as railways, bridges, highways, seaports and airports.

The two leaders also agreed to boost industrial cooperation, improve connectivity between the two countries, and promote cooperation in ensuring food security and energy security.

In addition, the two sides agreed to push forward maritime cooperation and strengthen practical cooperation in such areas as navigation safety, maritime security, navy cooperation, marine scientific research and environmental protection.

They also pledged to promote cooperation in science and technology, and agreed to establish a joint committee to boost exchanges in aerospace surveying and satellite development, launch and application.

To enhance the understanding and friendship between the peoples of the two countries, the two sides agreed on a series of measures to expand cultural and non-governmental exchanges.

On international and regional affairs, the two presidents stressed the importance for people of all countries to independently decide their own social systems and development paths.

The two sides voiced support for the reform of the United Nations Security Council to better fulfill its responsibility of maintaining international peace and security.

They also recognized the Regional Comprehensive Economic Partnership, now under negotiation, as an important platform for regional integration, and agreed to push forward relevant talks under the principles of openness, equality and mutual benefit, equitable development and common prosperity.

The two leaders recognized that it is the common responsibility of the countries in the region to maintain peace and stability in the South China Sea.

The document urged relevant parties to work together to fully and effectively implement the Declaration on the Conduct of Parties in the South China Sea (DOC), enhance mutual trust, promote cooperation, and maintain peace and stability in the South China Sea.

The two leaders agreed to work towards the eventual adoption of a code of conduct in the South China Sea in line with the principles and spirit of the DOC.

Xi left here for Malaysia on Thursday after a two-day state visit to Indonesia. After Malaysia, he will travel to the Indonesian resort island of Bali for the 21st informal economic leaders' meeting of the Asia-Pacific Economic Cooperation.

Source: Xinhua

Verbal Sino-Japanese dispute,and Economic and Geopolitical Realities

"Japanese Prime Minister Shinzo Abe has used his time on the world stage to unleash a new verbal salvo against Beijing. While addressing the United Nations General Assembly, Abe decried "an immediate neighbor" for swelling its military budget by more than 10% annually. Abe, who plans on increasing Tokyo's military budget by 3% this year, defiantly exclaimed "So call me, if you want, a right-wing militarist." 
At a news conference in New York, Abe said Chinese vessels persistently test the waters around the disputed Senkaku/Diaoyu islands: "The intrusions by Chinese government vessels in our territorial waters are continuing, to our regret. However, Japan will not make a concession on our territorial sovereignty." 
  Spokesperson Geng Yansheng quoted an ancient Chinese proverb to counter Abe's claims: "A gentleman is open and poised; a petty man is unhappy and worried. Whoever is overreacting has a 'ghost' in his mind."
The essential issue defining Sino-Japanese relations is a rapid and unprecedented shift in relative power between the two nations. China only overtook Japan as the world's second largest economy within the last three years; now the Chinese economy is half and again the size of Japan's. The simple fact is China has ever-increasing resources to spend on military hardware, while Japan does not. Even in the absence of a tragic history of invasion and massacre, and a lingering territorial dispute, this power dynamic would cause significant geopolitical tension. 
   Besides the hard figures on GDP and military spending, there are even more significant statistics affecting the most important bilateral relationship in East Asia. China is Japan's number one trading partner by a large margin. Japan is China's second-largest source of foreign trade, after the United States. The volume of trade between the two countries is well over US$300 billion per year - more than six times Abe's proposed military budget for Tokyo. 
Two days after Abe's speech blasting China's military expansion, Chinese Foreign Minister Wang Yi addressed the UN General Assembly. Wang acknowledged concerns about China's growing regional and global influence:

As China has enjoyed fast development over the years, some people are concerned that China may repeat the beaten track that a country will inevitably become arrogant and seek hegemony when it grows in strength and becomes powerful; and various versions of China threat have surfaced… However, what happened in the past cannot be applied indiscriminately to today's China … We are committed to working with others to establish a new type of international relations based on win-win cooperation and seek peaceful resolution of international and regional disputes.

           There are several reasons why Wang's pledge may be grounded in strategic reality. 

China borders more nations than any other country in the world - and some of these neighbors are significant global actors. In the event of a unilateral push for military supremacy, Beijing could find itself countered by a potent alliance involving India, Japan, and possibly Russia. China could face significant geopolitical resistance, even in the absence of the massive military assets of the United States in South Korea, Japan, and the Pacific.

Furthermore, it is very much in China's economic interests to avoid regional conflict. China does more international trade than any other country on earth. Any adventurism that threatened this trade would pose huge economic and political risks to the rulers in Beijing. 

Given the economic and strategic realities of East Asia, in the long run both nations will have little choice but to reach some sort of accommodation". 

Source: Brendan P O'Reilly 

            Asia Times

Twitter files for IPO

Twitter Inc, racing toward the largest Silicon Valley IPO since Facebook Inc's 2012 coming-out party, hopes to woo investors with rip-roaring revenue growth despite never having made a profit in the past three years.

The eight-year-old microblogging service, the preferred communications tool for celebrities and politicians alike, gave potential investors their first glance at its financials on Thursday when it publicly filed its IPO documents.

Revenue almost tripled to $316.9 million in 2012, driven largely by advertising. In the first half of 2013, it posted revenue of $253.6 million but had a loss of $69.3 million.

Crucially, Twitter managed average revenue per user in the second quarter of 2013 of 64 cents 

compared to Facebook's roughly $1.60, according to Reuters' calculations.

Although its user base is expanding steadily, Twitter's IPO filing showed that the ad prices it has commanded from marketers had been falling for the past five quarters.

"We generate the substantial majority of our revenue from advertising. The loss of advertising revenue could harm our business" the company said in its filing.

The average cost per ad engagement slid 46 percent in the June quarter, compared with the previous quarter. But the company said that decline was the result of a conscious effort to rapidly expand its available inventory, and change its algorithm to distribute ads more frequently throughout each day.

Its target is to raise $1 billion, a figure devised mainly for registration purposes and that will change as the company embarks on a roadshow to sell its IPO to investors.

About 65 percent of its revenue derives from mobile users,for twitter mobile is not an issue.

Growing Concern for no end to US Government Shutdown

The U.S. government shutdown prompted growing concern of wider economic consequences when it stretched into a third day on Thursday, and President Barack Obama challenged Republicans to "stop this farce" by allowing a straight vote on a spending bill.

Both sides in the standoff, which was triggered by Republican efforts to halt Obama's healthcare reforms, appeared entrenched.

Republicans in the House of Representatives are planning at least 10 more small bills to reopen specific federal programs, according to a senior Republican aide. Democrats reject that piecemeal approach.

Fears grew that the crisis would merge with a more complex fight looming later this month over raising the federal debt limit and that this could stymie any attempts to end the shutdown before the middle of October.

Obama said there were enough Republicans willing to pass a spending bill immediately if House Speaker John Boehner would allow a vote on a spending bill without partisan conditions attached, a so-called clean vote. But Obama said the speaker was refusing to do so because "he doesn't want to anger the extremists in his party."

Source: Reuters

TV's future. Michael Lynton CEO of Sony Entertainment

The days of waiting impatiently for an episode of our favourite TV shows is over. We expect to be able to enjoy them at our leisure – either bingeing on box sets or watching the episodes we’ve missed on catch-up TV.

The ability to see them on tablets on the way to work or in marathon sessions on a Sunday afternoon may mean the end of the water cooler discussions about last night’s TV, but it may have helped create better TV, says Sony Entertainment CEO Michael Lynton.

He believes the flexibility makes TV series more attractive to top writers – which in turn attracts better directors and actors.

Google buys Flutter a developer gesture-recognition software

Google has bought a start-up that develops gesture-recognition software.

Flutter, founded three years ago in San Francisco, detects simple hand signals via webcam, using them to control apps such as iTunes and Netflix.

The acquisition has caused speculation that Google will integrate the technology, used by some of its rivals, into its ranges of Chromebook laptops and Nexus handheld devices.

The search giant has not released any details of the deal.

Continue reading the main story

“Start Quote

It could be particularly useful as a tool for older people”

Dr Richard PickingGlyndwr University

Gesture-recognition technology is widely used in gaming consoles, such as Nintendo's Wii and Microsoft's Xbox Kinect.

It is also used in some smart TVs, and Samsung recently introduced gesture recognition for its Galaxy S4 smartphone.

The phone's Air Gesture technology allows users to scroll through web pages, accept calls, and control music by waving their hands.

Widespread use

An expert told the BBC that despite Google's acquisition, it remained to be seen whether gesture recognition would become a mainstream technology.

Co-founder Navneet Dalal, who used to work at Google, announced the deal on Flutter's website.

"Today, we are thrilled to announce that we will be continuing our research at Google," the statement read.

"We're excited to add their rocket fuel to our journey."

Flutter said it would continue to support its current app.

Asia LNG Impoters:Japan and India try to push LNG buyers for lower prices

"'Japan and India have stepped up their
protests against paying an “Asian
premium” on their LNG imports and have
agreed to establish a multilateral group of
LNG buyers to push for lower prices.
Ministers from the two countries released a statement
on Monday ahead of the Japanese government-hosted
2nd LNG Producer-Consumer Conference in Tokyo which
started on 10 September.
“Japan and India, as major LNG-consuming countries
in Asia, will work together towards the development of a
market environment that would enable effective, stable
and globally competitive LNG procurement,” India’s
minister of petroleum and natural gas, Marpadi Veerappa
Moily, and Toshimitsu Motegi, the head of Japan’s Ministry
of Economy, Trade and Industry (METI) said.
Both governments also indicated that they will ask other
current and future Asian LNG importers, including South
Korea and Singapore, during the conference to join the
planned Multilateral Joint LNG Study Group.
Japan’s LNG imports were 16% higher in the first seven
months of 2013 compared with the corresponding period
in 2011, as the country’s utilities had been forced to
turn to LNG to replace lost nuclear power capacity. The
country’s average LNG import costs also rose by 23%
over the same period in 2011 to $16.23/MMBtu in 2013.
However, the Japanese government’s plan to loosen its
monetary policy to weaken the Japanese yen against the
US dollar and make its exports more competitive has in
turn put more pressure on the import bill.
Average LNG import costs rose by 43% in domestic
currency terms in the first seven months of 2013
compared with the corresponding period in 2011.
India’s own currency issues, which saw the rupee fall by
20% against the US dollar over the past four months,
have significantly weakened the ability of its state-owned
importers of LNG and other fossil fuels to compete''.

Source: ICIS

U.S. Jobless Claims Low, but Service Sector Slows

The number of Americans filing new claims for jobless benefits remained at pre-recession levels last week but growth in the massive U.S. service sector cooled in September as firms took on fewer new workers.

The data could provide some of the strongest guidance this week on the health of the U.S. economy as a partial government shutdown delays the release of other data, including the monthly employment report that was scheduled to be released on Friday.

Initial claims for state unemployment benefits edged up by 1,000 to a seasonally adjusted 308,000, the Labor Department said on Thursday.

That was still fewer than seen before the 2007-09 recession, a signal that the long cycle of elevated layoffs has ended. New jobless claims have been falling for much of this year

However, employers have been more reticent about adding new workers to payrolls. The Institute for Supply Management (ISM) said its services index fell to 54.4 last month after nearing an eight-year high in August. The pace of hiring cooled, with the employment sub-index slipping to 52.7 last month, a four-month low.

Source: Reuters

Hong Kong Exchange Chief Executive Dream about Alibaba's IPO

    According to an article published today in the Wall Street Journal:

"The head of Hong Kong’s stock exchange operator must have had some sleepless nights ahead of Alibaba's decision on whether to host its multibillion-dollar initial public offering in the city. 
In a 2,000-word blog posted on the website of HongKong Exchanges & Clearing Ltd., Chief Executive Charles Li penned an account of a recent night he spent dreaming of the debate overwhether to change the status quo in  Hong Kong.
The dream features nine characters–Mr. Tradition, Mr. Innovation, Mr. Disclosure, Mrs. Practical, Mr. Righteous, Ms. Future, Mr. Process, Mr. Big Investor and Mr. Solution–duking it out over the best direction for HKEx.

Big global tech companies such as Google Inc. and Facebook Inc. have special voting rights that protect their founders, says Mr. Innovation, “a young man with spikey hair” who “talks fast and excitedly.”

“Most other exchanges in the world permit them, it’s just you Hong Kong stick-in-the-muds who can’t accept change,” he says in response to Mr. Tradition, who is in the “if it isn’t broken, why fix it?” camp.

Mr. Innovation says. “Look at what happened to Apple!  Steve Jobs got kicked out of the company on perfect corporate governance processes but Apple almost went bust before Jobs was asked to come back–and then he recreated one of the greatest companies on earth!”

Level-headed Mr. Disclosure steps in to mediate, arguing that the U.S. and Hong Kong are very different markets, with disclosure regimes suited to each, while Mr. Big Investor and Mrs. Small Investor clash over their respective investment needs.

The dream finally ends when someone suggests calling Mr. Solution to settle the debate.

“In real life, there isn’t a Mr. Solution who can put the right decision together for us,” wrote Mr. Li, who said he wasn’t using the blog as a platform to advocate for any position in particular, but simply to “promote an honest, balanced and respectful debate” on the issue.

It may be that the debate has already run its course. On the same day that Mr. Li’s blog was published, The Wall Street Journal reported that Alibaba  has ended its talks with HKex and is moving toward a New York IPO".

• 
  

China: Talk of Inheritance Tax Sparks Debate

According to an article published today in the Wall Street Journal:

"Whether or not to tax the dead has become a big question in China.

The country doesn’t currently have an inheritance tax—also commonly known as the death or estate tax—a levy paid by people who inherit money or property, or a tax on someone’s estate after they die.

But a recent media report has sparked discussion about whether China should start levying such a tax, and if so, how heavy rates should be.

The private 21st Century Business Herald reported (in Chinese) on Sept. 27 that the Communist Party’s top decision makers will consider the inheritance tax at the Third Plenum, a key meeting of senior leaders expected in November, citing Liu Huan, an academic adviser to the nation’s State Council, or cabinet''.

Markit: EU MARKET SENSITIVE INFORMATION

Markit Eurozone PMI and GDP

Nations ranked by all-sector output growth (Sep)*
Ireland 55.7 2-month low
Germany 53.2 2-month low
Italy 52.8 29-month high
France 50.5 20-month high
Spain 49.6 2-month low
Of the four largest nations, Germany reported the
fastest output growth and an increase in
employment for the second time in the past three
months. Italy also reported a solid increase in
business activity – the sharpest since April 2011 –
and the slowest rate of job losses for two years.
France eked out a marginal expansion of output,
following a one-and-a-half year sequence contraction. The French labour market moved
closer to stabilising as well, with only slight
reductions in staffing levels signalled at
manufacturers and service providers alike.
Spain was the main weak spot in September, as a
fall back into contraction in service sector activity
more than offset continued modest growth in
manufacturing production. Although Spain’s rate of
job losses eased to a 28-month low, it remained the
steepest among the big-four eurozone economies.
Services:
At 52.2 in September, up from 50.7 in August, the
Services Business Activity Index rose to a 27-
month high and came in above its earlier flash
estimate of 52.1. Service sector output expanded
for the second month running.
Growth hit a seven-month high in Germany, a 20-
month record in France and a two-and-a-half year
high in Italy. The expansions in France and Italy
followed periods of sustained contraction. Spain fell
back into decline, however, following a modest
expansion in August, while growth in Ireland
remained strong despite easing sharply over the
month.
The outlook for the eurozone service sector
remained positive on the whole, with new business
growth at a 27-month record and business
confidence rising to its highest level since March
2012. Companies were heartened by the ongoing
signs of recovery in both the currency union and
broader global economy.
The higher levels of output and new business,
alongside the brightening outlook for the sector,
were reflected in the labour market in September.
Employment stabilised, halting a 20-month
sequence of job losses. Ireland and Germany
reported stronger increases to payroll numbers,
while the rates of reduction in France, Italy and
Spain all slowed.
The rate of inflation in average input prices eased
to a three-month low in September. Higher costs
were linked to increased fuel, oil and transportation
prices. Although strong competition led to further
selling price decreases, the pace of decline was the
weakest since May 2012.

Chris Williamson, Chief Economist at Markit said:

“Growth is being led by Germany, but France has
also now returned to growth. Even more
encouraging are the upbeat survey data for Ireland
and Italy, both of which show signs of returning to
robust growth, and Spain has also stabilised, as
ongoing weakness in the domestic economy is
offset by a strong upturn in exports.
“The region is by no means out of the woods yet,
however. Growth remains only modest – the
Eurozone PMI is consistent with GDP rising by just
0.2% on the third quarter, and the political instability
that has reared up in Italy is a reminder that there
remains plenty of scope for recoveries to be
derailed.”

Source:  Markit

Hong Kong Mogul Li-Ka Shing look to cash-in his Utilities

  According to an article published in the Wall Street Journal the issue is Mr Li-Ka Shing trying to cash-in his Hong Kong's utilities:

"Li-Ka Shing,  Asia's richest man according to Forbes.His empire today stretches from ports to grocery stores. He's now taking his Hong Kong utilities business public—before the Federal Reserve starts winding down its bond purchases soon.

Mr. Li-controlled Power Assets Holdings, which runs electricity operations in Hong Kong, Europe and Australia, will spin off up to 49% of its Hong Kong unit. It may sell shares by the end of the year, though pricing and other details aren't out yet. The company says the listing is to gain "financial strength" so it can look for assets abroad.

Timing matters, though, and Mr. Li may be striking while the iron's still hot.

When interest rates are low, utilities stocks tend to do well thanks to their steady profits and high dividends. But if the Fed pushes rates upward, valuations could cool.                           Power Assets used to trade at 16.5 times forward earnings before Mr. Bernanke's whispers in late May. It's now at 14 times, but that's still rich compared with a 15-year average of 11.7, according to FactSet.                                                                                                                        Mr. Li has a history of cashing out of richly valued businesses and deploying the cash into bargain bets".

Google's Guru Ben Gomes make search intuitive, multimedia and super smart.

What do you do if you get more than three billion queries a day?

If you are Ben Gomes, Google's Tanzania-born, India-bred, US-educated vice-president of search, you are responsible for helping to answer all of them - in the shortest time possible, on all devices: desktops, tablets, phones. And now, in the spoken word too.

Continue reading the main story

“Start Quote

Now search is becoming mobile - on phones and tablets. The challenge is that it is on a small screen, so it's hard to type”

Ben Gomes

Search is Google's raison d'etre and cash cow, bringing in a bulk of its $50bn (£33bn) revenues last year. It is also, says Mr Gomes, "about having a continuous conversation with the user to find out what he wants".

For a change, we are having a conversation with Mr Gomes, the boy-like 45-year-old guru of search in Googleplex, the funky low-slung company headquarters set in the manicured greens of Mountain View, California.

From his modest lair, Mr Gomes and his team work relentlessly on their fine-tooth comb search of the worldwide web to serve up the popular search engine, which is now a part of our everyday lives.

"When I joined Google in 1999, search was about basically finding the words that you search for in a document. Then we took this view that we were going to understand what you want and give you what you need," he says.

Today, crawling through more than 20 billion pages a day on the continuously expanding world wide web, Mr Gomes and his army of search - a substantial number of the company's 44,000 employees - use algorithms in an attempt to make search intuitive, multimedia and super smart.

The "maths that computers use to decide stuff" - as algorithm expert Kevin Slavin called it once - helps rank pages in order of their importance, identifies spelling errors, provides alternatives to words, predicting auto-complete queries, and does unified searches using images, audio and video and voice.

And then, with a hint of understated pride, Mr Gomes talks animatedly about Knowledge Graph, a new function launched last year to make the site's algorithms "act more human" in an attempt to offer instant answers to search questions. Time magazine called it the "next frontier for search".

"It's a database of all things in the world. It pulls together different databases and unifies them into a single coherent one that has about 500 to 600 million people, places and things in them and about 18 billion attributes and connections between those things," he says.

Markit Eurozone PMI rose to 52.2 in August

The September PMI surveys provided further
evidence that the eurozone recovery gathered
pace, after the region pulled out of the longest
recession in its history. There were also reassuring
signals on the jobs front as the rate of losses eased
to a very modest pace, raising the possibility of
employment starting to recover in the near future.
The final Markit Eurozone PMI® Composite
Output Index rose to a 27-month high of 52.2 in
September, up from 51.5 in August and above the
earlier flash estimate of 52.1.
Rates of output expansion were identical in the
manufacturing and service sectors, as growth at
manufacturers eased from August’s high and the
recovery in service sector business activity caught
up by hitting a 27-month record.
Underpinning the latest expansion in eurozone
economic output was a second straight month of
rising inflows of new business. Moreover, the rate
of growth in new orders was the sharpest since
June 2011.
Companies benefited from improved demand at
home and abroad. Solid new business growth was
registered at manufacturers and services providers,
including a further increase in manufacturing new
export orders.
The price front remained a mixed picture. Rising oil
prices led to a further increase in average costs.
The rate of inflation remained solid at service
providers, while manufacturers saw purchase
prices rise for the first time since January. In
contrast, strong market competition led to a further
reduction in average selling prices, despite the rate
of decline easing to a 16-month low.

Source: Markit