SYRACUSE, NY — There may be new hope for re-development of the Hotel Syracuse. A New York City based company is looking to purchase the downtown hotel and bring it back to life.
Fundamental Advisors has reportedly made an offer to buy the hotel, renovate it and reopen it. The landmark hotel has been closed since 2004 and according to the city, there are hundreds of thousands of dollars in back taxes owed on the building.
The Syracuse Common Council and its economic development committee are expected to discuss the possible sale and could vote on authorizing the deal at their meeting on Monday.
After spending years owning only part of the property, the township is taking steps to purchase land on Milltown Road for open space use.
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The township council unanimously introduced an ordinance Nov. 21 for the aquisition of about 28.77 acres of land on Milltown Road for open space and recreation.
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The property itself is located at 511 Milltown Road.
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If approved, the land will be paid for with $500,000 from the townships Open Space Trust Fund. In addition, according to the ordinance, the township will reimburse owner James Fierro up to $25,000 for the demolition and removal of structures on the site and the filling of a man-made pond on the property.
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And the agreement states the township will be paid back taxes from that $500,000.
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According to township attorney William Savo, about eight years ago the township purchased development rights for a portion of this property.
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The owner has been pursuing the town to get the rest of the rights, he said. Weve been able to negotiate a purchase price within the appraisal area.
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Savo said the land is part farmland preserve, with about two acres not under that condition.
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We will own the properties outright, and we retain any income received on it, and that offsets taxes, he said.
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In addition, Savo said, the county has expressed interest in participating in the purchase, but no decisions have been made.
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The county was unable to make a commitment yet, so the township can negotiate with the county if we want them to participate, he said. In the new year, we can discuss with the county.
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Public hearing for the ordinance will be held Dec. 5.
Nov. 30 (Bloomberg) — John Ryding, chief economist at RDQ Economics, and Allen Sinai, chief global economist at Decision Economics Inc., talk about the outlook for the US economy.
The Federal Reserve says the economy expanded at a moderate pace in 11 of 12 districts, led by gains in manufacturing and consumer spending. Ryding and Sinai also discuss six central banks move to make it cheaper for banks to borrow dollars in an effort to ease Europes sovereign debt crisis. They speak with Mark Crumpton on Bloomberg Televisions Bottom Line. (Source: Bloomberg)
Voters who approved government programs to purchase discounted electricity likely thought the lower rates would be available to all eligible residents and small businesses.
And thats how city officials viewed the program.
But if a proposed rate plan between AEP Ohio and the staff of the Public Utilities Commission of Ohio is approved, the number of residents who could switch to another electric supplier at the lowest rate would be limited.
Canton Law Director Joseph Martuccio said the development was a rude awakening to city officials.
AEP wants to limit the deepest discount to 21 percent of the power capacity it provides to suppliers statewide who service residential customers, said Terri Flora, AEP Ohios communications director.
But come early January, if that 21 percent cap has not been reached and the proposed rate plan is approved, the significantly discounted rate would be made available to commercial and industrial customers. As a result, fewer residential customers could get the same level of cost savings.
In that case, Flora says, residential customers still could switch to another supplier, but not at the steepest discount.
Critics of the proposal say it would prevent rival suppliers from offering discounts to more households.
In response, city officials are urging residents to sign up early for the discounted electric plan, which the citys energy consultant estimates could save an average residential customer about $72 a year.
Those who enroll now will receive a 9 percent discount compared to AEPs rate, according to city officials. The discount jumps to 10 percent in the spring.
Residents can return a form mailed to them or call FirstEnergy Solutions at 1-877-635-0485.
If residents wait until spring, when the citys electric program is expected to be established and formalized, they automatically would be enrolled in the bulk buying program unless they opt out.
However, Martuccio said, residents who wait run the risk of getting locked out of the best rate.
OTHER COMMUNITIES
In the Nov. 8 election, voters in Canton, East Canton and Plain and Paris townships authorized their local governments to establish bulk buying electricity programs by contracting with a supplier, technically referred to as electric aggregation.
All of the communities with newly approved electric programs could be impacted by AEPs proposal.
As its written, AEPs plan would create barriers for rate shopping, said Doug Colafella, spokesman for FirstEnergy Corp., AEPs competitor.
Essentially, if they dont get in under the caps their vote is essentially being nullified because they cant realize the savings benefits of this program (and) it puts the communities really at the back of the line for this finite amount of capacity, Colafella said.
Flora, of AEP, said there is no place in the agreement where there is the terminology, cap on shopping.
Its a balanced plan because we do want … to be able to promote economic development and job growth, Flora said. And still support low income needs, and allow us to change our business structure over the next three years in (the) new environment the state is heading.
Matthew Butler, spokesman for PUCO, said there is no specific cap on shopping proposed in the AEP stipulation.
There are, however, proposed caps on the amount of capacity available to suppliers at the (lower) market capacity rate, he wrote in an email.
Once these caps are met, suppliers will pay AEP the cost-based rate for capacity. The cost-based rate is less competitive than the market-capacity rate, and therefore could contribute to less competitive offers from suppliers.
Of course, the most important thing to note in this discussion is that nothing is final, Butler said. The five commissioners must still decide the case. They are not required to implement the stipulation as it is written.
LOAD CAPACITIES
Colafella, of FirstEnergy Corp., acknowledged the 21 percent threshold is not a hard cap. But the rate proposal effectively prohibits (some) people from switching (and makes it) cost prohibitive for us to serve them, he said.
In 2013 and 2014, the 21 percent threshold would rise to 31 and 41 percent, respectively, according to the proposal.
Under AEPs proposed rate plan, the purpose of the thresholds is to allow AEP Ohio to transition to a fully market-based pricing system.
Colafella has a contrasting view.
We just feel that communities need to put pressure on (PUCO) to stand up for the citizens … including Stark County communities, and reject or at least modify the (proposed AEP rate plan) to basically allow these communities to benefit from aggregation.
Purchasing managers who use e-procurement systems are breathing a collective sigh of relief, as a remarkable technological innovation is solving age-old supplier onboarding and enablement problems.
Atlanta, Georgia (PRWEB) November 30, 2011
Purchasing managers who use e-procurement systems are breathing a collective sigh of relief, as a remarkable technological innovation is solving age-old supplier onboarding and enablement problems.
The solution, called the PunchOut Wizard, is part of a proprietary technology platform known as PunchOutCX.
CoreXpand, the veteran e-commerce company behind this innovation, says the response has been extremely enthusiastic. Given the normal complexities of supplier onboarding and enablement, its no wonder purchasing managers and buyers alike have embraced [the PunchOut Wizard], stated Lindsey Tanner, founder and CEO of CoreXpand.
Id call it more like chaos, a former purchasing professional said, describing the daily stresses of managing the e-procurement systems used by large purchasing organizations.
According to several purchasing managers who have spoken to CoreXpand, the hassles comes from working with suppliers to get their product and pricing data formatted and entered into the e-procurement system properly.
For most suppliers, all of that work results in basic line item catalog formats, which can be cumbersome and limited in information for buyers trying to locate products.
For these types of catalogs, also referred to as hosted catalogs, even when the catalog is finally loaded, the hassle doesnt end. Thats because any minor change to product or price must be reformatted, resubmitted, and reloaded into the system.
One solution is PunchOut catalogs, which present products and prices in a more user friendly online store type of environment. But these can be even more difficult to get right inside the e-procurement system.
But according to the happy customers, the PunchOut Wizard is putting an end to all those headaches.
With a one-time setup, any purchasing organization which uses e-procurement software can define their perfect PunchOut. From there, any authorized supplier can login to a simple online interface and, after completing eight simple steps, the PunchOut Wizard delivers a stable, perfectly formatted PunchOut catalog that is completely in sync with the business processes and preferences of the purchasing organization.
Its never been easier to onboard and enable suppliers to participate in a companys e-procurement system. This allows companies to really maximize their investment in their e-procurement system.
Weve even taken out the risk associated with PunchOut catalogs by incorporating buyer controls so they dont get product or pricing surprises. Just that little feature alone saves them time, money, and hassle by eliminating the need for manual or third party audits, stated Tanner.
Some state government purchasing organizations have been taking advantage of the PunchOut Wizard, and it looks like its only a matter of time before it catches on in the private sector.
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For the original version on PRWeb visit: www.prweb.com/releases/prweb2011/11/prweb9005301.htm
TRENTON — Two new bills dropped into the lame-duck session of the Legislature would, if passed into law, mark significant changes for local governments and school districts.
Municipalities and school districts would be required to participate in county purchasing programs under one bill. It would create potential for wider local government consolidation and shared services.
Another bill would eliminate annual school budget votes for any school districts that keep within the state budget cap and move their school board elections to November.
School budget votes have long been a pet peeve of the educational establishment, because, school officials contend, residents often use the up-or-down ballots to unleash their fury at rising property tax bills.
Both bills are backed by prominent Democrats in the Democratic-controlled Legislature.
State Senate Budget Committee chairman Paul A. Sarlo, D-Bergen, is the sponsor of the county purchasing bill, along with outgoing Democratic Assembly Majority Leader Joseph Cryan.
The school elections bill is sponsored by incoming Assembly Majority Leader Louis D. Greenwald and state Sen. Donald Norcross, D-Camden, brother of prominent Democratic leader George E. Norcross.
A spokesman for Assembly Speaker Sheila Y. Oliver, D-Essex, said she is reviewing the bills and no action is currently scheduled. A spokesman for state Senate President Stephen M. Sweeney said no decision has been made about either bill.
Michael A. Vrancik, a lobbyist for the New Jersey Schools Boards Association, said the heavyweight sponsors on the bills suggest that both may move quickly the lame-duck time period after the Legislature?s general election, when controversial legislation often is passed.
County purchasing often involves bulk buying of often-used products and services, but Vrancik said he believes the county purchasing bill could lead to talk of other back-office school district administrative functions being done by county-level officials.
?It sets the stage for a discussion about other consolidations,? Vrancik said.
He said the association believes county purchasing should be optional and not mandatory.
An analyst for the New Jersey State League of Municipalities said the association is opposed to the bill.
?It doesn?t guarantee the lowest price,? analyst Jon R. Moran said. ?If it were an option for municipalities to use, it would make a lot of sense. There is a perception is that bigger is better. ? But what people really want is good value at a low price.?
The school elections bill would reset three-year school board terms to begin in January after the November election. Currently, they begin in April. Voters would only have the chance to approve or reject spending beyond the state budget caps.
The districts must keep elections during November for at least four years. State officials would retain oversight over district budgets.
Purchasing Christmas gifts for folks that enjoy fishing and hunting is a relative easy task if one does a bit of research. For instance, does good ole? Dad or Uncle Joe enjoy shooting waterfowl or fishing for bass. Is Aunt Gertrude an avid sporting clays shooter or crappie angler? Once the particular outdoor activity is ascertained, the search for that ?just right? gift is much easier.
The biggest mistake made when shopping for family or friends that enjoy the outdoors is purchasing ?a gun? or ?a bow?, assuming the receiver of the gift will automatically be thrilled. Rifles, shotguns and archery equipment are very specialized items and it?s best to know exactly which gun or bow the recipient of the gift needs or wants.
I was once at a gun store and overheard a lady tell the salesman behind the counter that she wanted to buy ?a gun? for her husband?s Christmas present. Luckily the salesman was more interested in helping her choose the right firearm than grabbing a rifle or shotgun off the shelf and making an easy sale.
The questions he asked the lady helped her make a wise decision.
?What does your husband need the ?gun? for? What does he hunt or does he strictly shoot targets?? the veteran salesman quizzed.
?Oh, replied the lady, he hunts deer.?
?Well, that narrows it down a bit. You?re looking for a rifle. Does he have a scope??
?Is that the round tube that screws on top of the barrel? she quizzed.
With that statement, the salesman did a very wise thing.
?I don?t think we have enough information to wisely choose a rifle and scope for your husband, the salesman diplomatically offered. I advise a gift card that you can give him and then, HE can come in and choose the rifle that best suits his needs!?
The lady bought the card and I assumed the result was a happy husband that ultimately wound up with the ?just right? rifle.
As an outdoors writer and outdoor radio show host, I am constantly testing and using outdoor products. Here?s a list that might help you purchase that ?just right? gift this year. I?ve found them all to be very useful.
ELECTRIC SMOKER – For several years, I?ve used my Smokin Tex electric smoker (www.smokintex.com). I use it on the average a couple times per week and found it very useful in preparing everything from the Christmas turkey to whole venison or pork hams. I also use it to cold smoke cured pork and sausages and making jerky. Most folks that enjoy hunting or fishing like to cook their game/fish. These units are built to last a lifetime.
EZ MOUNT UMBRELLA HOLDER – During the warm weather months, shade becomes very important when fishing in a stationary position. The EZ Mount umbrella holder mounts to the base of your boat seat in a matter of minutes and accepts most golf or beach umbrellas. Check them out at www.umbrellae-zmount.com.
THE ELEMINATOR – This little unit replaces the spinner on game feeders and seals the flow of corn until the feeder?s timer activates the motor. At about $20 per hundred pounds, it saves lot of corn/money by sealing the supply of corn away from raccoons, squirrels and crows. Check it out at www.ultramaticfeeders.com.
EVERYTHING FOR THE OUTDOOR COOK – For a one stop shop, go online to www.alliedkenco.com. This Houston based company has everything for the outdoor cook. Order one of their catalogs and spend some time searching for that perfect gift. Allied Kenco offers a full line of seasonings for making sausage, jerky, meat cures, grinders, etc.
JALAPENO WINE FOR MARINADING – Mike Pell at Sweet Dreams Winery (www.sweetdreamswinery.com) near Palestine has perfected the perfect wine for marinating fajita meat, duck breasts, etc. His Sweet Heat Jalapeno wine is excellent for adding to sausage meat before stuffing and smoking.
HUNTING BOOTS – For the past several years, I?ve worn the Red Head high top snake proof boots from Bass Pro Shop. The boots come in standard and insulated versions; I own both styles. The tall boots keep your lower legs dry and protected from brush and thorns, not to mention snakes. When duck or deer hunting, I wear my insulated boots and switch to the standard pair when doing a lot of walking on upland bird hunts.
CAMPFIRE COOKING – The Auspit www.auspitbbq.com is a tough little spit built in Australia. It?s designed for cooking over a campfire. It?s powered by two D cell batteries and is a great way to cook over the campfire where electricity is not available.
ELECTRIC HUNTING VEHICLE – Ken Blackstock, owner of Plano Golf Carts (www.planogolfcarts.com) markets very rugged electric hunting vehicles. They sell for about half the price of nationally advertised units and I?ve found them to perform well from the mountains of Colorado to my hunting lease here in Texas.
GUIDED FISHING OR HUNTING TRIP – Most sportsmen, regardless their level of expertise, enjoy hunting or fishing with a guide. Consider giving a guided fishing or hunting trip for hogs, ducks, deer or turkey as a Christmas gift this season.
STRIPER BITE STRONG AT TEXOMA – Guide Larry Sparks with Sparkys Guide Service (www.sparkysguideservice.com) says the cold weather has triggered the best striper bite of the year.?We?re catching limits of stripers and they are all in very good shape. Shad numbers are high and stripers have plenty to eat. We?re fishing 30-40 feet deep along the creek and river ledges and often catching our limits from one anchor.
WHITETAIL RUT STILL UNDERWAY – Whitetail guide Randy Oldfield says bucks have been on the move on the 6,000 acre Clay Hill Ranch (www.clayhillranchhunting.com) where he guides.
?There is a strong number of mature bucks on the ranch and now, while they are up and moving chasing does, is the best time to hunt them. With range conditions less than optimal, deer and hogs are hitting the feeders hard. It?s a good year for seeing lots of game.?
DUCK NUMBERS HIGH – North Texas should be in for a banner opening of the second split of duck season. Thanks to rainfall earlier this week, there should be plenty of areas with shallow water to attract ducks. The recent strong cold front should bring even more birds into the region.
This hearty retriever is eagerly awaiting the second split of duck season. Bird numbers are high and recent rainfall should make for some excellent hunting. photo by Luke Clayton
As the season progresses, it will be more and more important to keep blinds brushed in well to avoid being spottedby wary birds. Overcalling is a common mistake among novice duck hunters, especially when hunting late season birds. I only call to attract passing flocks or, when ducks looking my spread over decide to leave.
Listen to Outdoors with Luke Clayton Radio at www.catfishradio.com. Email Luke via the website with hunting and fishing news from your area.
Nov. 30 (Bloomberg) — Business activity in the US expanded in November at the fastest pace in seven months, a sign the factory-led expansion continues in the face of Europes debt crisis.
The Institute for Supply Management-Chicago Inc. said today its business barometer increased to 62.6 in November from 58.4 the prior month as orders and production strengthened. Readings above 50 signal growth.
A pickup in consumer spending and more business investment at a time when companies are holding fewer inventories may help set the stage for stronger factory production. Still, the threat of a recession in Europe poses a risk to American manufacturers, which have led the US recovery.
The recent strength in retail demand, along with steadily improving auto sales and declining inventory levels, are all very positive indicators for the manufacturing sector over the near-term, Russell Price, a senior economist at Ameriprise Financial Inc. in Detroit, said before the report. Assuming consumer activity remains even modestly positive, production activity will have to improve or businesses will risk losing sales.
Economists forecast the gauge would rise to 58.5, according to the median of 56 estimates in a Bloomberg News survey. Projections ranged from 56 to 60.7.
The Chicago groups production gauge increased to a seven- month high of 67.3 from 63.4. The gauge of new orders rose to 70.2, the highest since March, from 61.3.
The employment measure eased to 56.9 from 62.3 the prior month.
Inventory Growth Slows
The measure of prices paid decreased to 60.2 from 66, and a gauge of inventories fell to a three-month low of 53.6 from 54.4.
Economists watch the Chicago index and other regional manufacturing reports for an early reading on the national outlook. The Chicago group says its membership includes both manufacturers and service providers with operations in the US and abroad, making the gauge a measure of overall growth.
The ISMs national factory index climbed in November to 51.7 from 50.8 the prior month, according to the median projection in a Bloomberg survey ahead of the groups report tomorrow. Like the Chicago survey, a reading greater than 50 signals expansion.
New York-region factories expanded after five months of contraction and manufacturing in the Philadelphia area expanded for a second month in November after two consecutive months of contraction, figures from the Federal Reserve showed.
Durable Goods
A Commerce Department report last week showed orders for durable goods dropped 0.7 percent in October, while demand for computers and other business equipment decreased by the most since January.
Corporate spending on equipment and software climbed at a 15.6 percent pace in the third quarter as the economy grew at a 2 percent pace, the Commerce Department reported last week. Thats less than preliminary estimates of 17.4 percent growth in equipment spending and a 2.5 percent gain in gross domestic product.
A rush to qualify for a larger government tax credit may be contributing to the increase in businesses investment. The Obama administrations tax compromise allows companies to depreciate 100 percent of investment in capital outlays in 2011 and 50 percent in 2012.
Caterpillar Inc., the worlds largest construction and mining-equipment maker, last month announced higher-than- expected third-quarter profit and sales, reinforcing forecasts that exports and capital spending will help the US maintain its economic expansion.
Caterpillar, Europe
While the European debt crisis and the level of US growth are concerns, they dont signal the onset of recession, Caterpillar said in a statement.
A growing middle class in China, India and other emerging countries is driving demand for commodities, demand for energy and the need for increased infrastructure investment, Caterpillar Group President Richard Lavin said on a Nov. 8 conference call.
A dollar that has lost about 8 percent of its value since June 2010 has made American goods more competitive. August and September were the best months for US exports on record, according to figures from the Commerce Department.
US light-vehicle sales jumped in October to their fastest rate since February even as automakers reduced discounts, a sign that more consumers are returning to showrooms.
Auto Sales
A reviving auto industry, much of it located in the Midwest, is also boosting the US economy. Industrywide light- vehicle sales ran at a seasonally adjusted annualized rate of 13.2 million in October, according to Autodata Corp. Automakers in the US, led by Toyota Motor Corp., trimmed spending on incentives. Chrysler Group LLC reduced them by 7.7 percent and General Motors Co. discount offers slipped 1.1 percent.
The sales rate may be challenged for 2011s last two months as Thailands floods disrupt output for Toyota and Honda Motor Co., who were expected to boost incentives as they recovered from Japans tsunami in March, said Paul Ballew, chief economist for Nationwide Mutual Insurance Co.
–With assistance from Chris Middleton in Washington. Editor: Vince Golle
To contact the reporter on this story: Bob Willis in Washington at bwillis@bloomberg.net
To contact the editor responsible for this story: Christopher Wellisz at cwellisz@bloomberg.net.
(Updates with economists comment in fourth paragraph.)
Nov. 30 (Bloomberg) — Business activity in the US expanded in November at the fastest pace in seven months, a sign the factory-led expansion continues in the face of Europes debt crisis.
The Institute for Supply Management-Chicago Inc. said today its business barometer increased to 62.6 in November from 58.4 the prior month as orders and production strengthened. Readings above 50 signal growth and this months figure exceeded the highest estimate in a Bloomberg News survey.
A pickup in consumer spending and more business investment at a time when companies are holding fewer inventories may help set the stage for stronger factory production. Still, the threat of a recession in Europe poses a risk to American manufacturers, which have led the US recovery.
New orders are rising, production is increasing and employment will likely improve given that inventories are being drawn down, said Carl Riccadonna, a senior US economist at Deutsche Bank Securities Inc. in New York, who forecast a reading of 60. Things are shifting in the right direction.
Economists forecast the gauge would rise to 58.5, according to the median of 56 estimates in a Bloomberg survey. Projections ranged from 56 to 60.7.
Stocks Soar
Stocks soared after six central banks including the Federal Reserve acted to make more funds available to banks help ease strains from Europes debt crisis. The Standard amp; Poors 500 Index climbed 3.2 percent to 1,233.07 at 10:13 am in New York.
The Chicago groups production gauge increased to a seven- month high of 67.3 from 63.4. The gauge of new orders rose to 70.2, the highest since March, from 61.3.
The employment measure eased to 56.9 from 62.3 the prior month.
The measure of prices paid decreased to 60.2 from 66, and a gauge of inventories fell to a three-month low of 53.6 from 54.4.
Economists watch the Chicago index and other regional manufacturing reports for an early reading on the national outlook. The Chicago group says its membership includes both manufacturers and service providers with operations in the US and abroad, making the gauge a measure of overall growth.
National Index
The ISMs national factory index climbed in November to 51.7 from 50.8 the prior month, according to the median projection in a Bloomberg survey ahead of the groups report tomorrow. Like the Chicago survey, a reading greater than 50 signals expansion.
New York-region factories expanded after five months of contraction and manufacturing in the Philadelphia area expanded for a second month in November after two consecutive months of contraction, figures from the Federal Reserve showed.
A Commerce Department report last week showed orders for durable goods dropped 0.7 percent in October, while demand for computers and other business equipment decreased by the most since January.
Corporate spending on equipment and software climbed at a 15.6 percent pace in the third quarter as the economy grew at a 2 percent pace, the Commerce Department reported last week. Thats less than preliminary estimates of 17.4 percent growth in equipment spending and a 2.5 percent gain in gross domestic product.
Tax Credit
A rush to qualify for a larger government tax credit may be contributing to the increase in businesses investment. The Obama administrations tax compromise allows companies to depreciate 100 percent of investment in capital outlays in 2011 and 50 percent in 2012.
Caterpillar Inc., the worlds largest construction and mining-equipment maker, last month announced higher-than- expected third-quarter profit and sales, reinforcing forecasts that exports and capital spending will help the US maintain its economic expansion.
While the European debt crisis and the level of US growth are concerns, they dont signal the onset of recession, Caterpillar said in a statement.
A growing middle class in China, India and other emerging countries is driving demand for commodities, demand for energy and the need for increased infrastructure investment, Caterpillar Group President Richard Lavin said on a Nov. 8 conference call.
Cheaper Dollar
A dollar that has lost about 8 percent of its value since June 2010 has made American goods more competitive. August and September were the best months for US exports on record, according to figures from the Commerce Department.
US light-vehicle sales jumped in October to their fastest rate since February even as automakers reduced discounts, a sign that more consumers are returning to showrooms.
A reviving auto industry, much of it located in the Midwest, is also boosting the US economy. Industrywide light- vehicle sales ran at a seasonally adjusted annualized rate of 13.2 million in October, according to Autodata Corp. Automakers in the US, led by Toyota Motor Corp., trimmed spending on incentives. Chrysler Group LLC reduced them by 7.7 percent and General Motors Co. discount offers slipped 1.1 percent.
The sales rate may be challenged for 2011s last two months as Thailands floods disrupt output for Toyota and Honda Motor Co., who were expected to boost incentives as they recovered from Japans tsunami in March, said Paul Ballew, chief economist for Nationwide Mutual Insurance Co.
–With assistance from Chris Middleton in Washington. Editor: Vince Golle
To contact the reporter on this story: Bob Willis in Washington at bwillis@bloomberg.net
To contact the editor responsible for this story: Christopher Wellisz at cwellisz@bloomberg.net.
China’s Stocks Drop to Six-Week Low on Property Slowdown Concern December 05, 2011, 6:32 PM EST
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China Stocks Drop to 2-Year Low on Housing Slump, European Debt
Emerging Stocks Snap Two-Day Slump on Europe, China Speculation
Exports, Moody’s Warning Push N.Y. Stocks Lower: China Overnight
Haitong Securities Cancels $1.7 Billion Offering on Volatility
China’s Stocks Decline to 2-Year Low on Exports, Property Curbs
By Bloomberg News
Dec. 5 (Bloomberg) — China’s stocks fell, sending the benchmark index to a six-week low, after non-manufacturing industries contracted as the government’s curbs on property and lending damped demand.
Anhui Conch Cement Co., China’s biggest maker of the building material, and Hebei Iron & Steel Co. dropped at least 2 percent after a purchasing managers’ index shrank for the first time since February. China Vanke Co. and China Merchants Property Development Co. retreated among property companies after the central bank said developers are facing tighter credit conditions.
“The economy is on a downtrend and the question is how slow growth will be next year with the weakness in the property market and exports,” said Wu Kan, a fund manager at Dazhong Insurance Co., which oversees $285 million. “The slower economic growth becomes, the earlier we’ll see the government relax monetary policy.”
The Shanghai Composite Index sank 27.44 points, or 1.2 percent, to 2,333.23 at the close, the lowest level since Oct. 21 and extending four straight weeks of losses. The CSI 300 Index fell 1.4 percent to 2,521.39. The ChiNext index of start- up companies tumbled 4.4 percent to its lowest close since Oct. 24. The Bloomberg China-US 55 Index, the measure of the most- traded U.S.-listed Chinese companies, retreated 0.8 percent in New York on Dec. 2.
The Shanghai Composite slid 0.8 percent last week as manufacturing contracted for the first time since February 2009 in November. The gauge is valued at 11.1 times estimated earnings, compared with a six-year average of 18.3 times, according to weekly data compiled by Bloomberg.
PMI Gauge
The index has tumbled 17 percent this year, extending last year’s 14 percent loss, after the central bank raised interest rates and lenders’ reserve-requirement ratios to curb inflation.
A purchasing managers’ index for November fell to 49.7 from 57.7 the previous month, the China Federation of Logistics and Purchasing said in a Dec. 3 statement. A reading above 50 indicates expansion. The gauge covers industries including construction, retail, and property.
“Investment in infrastructure and real estate is playing a smaller role in driving the economy,” Cai Jin, vice chairman of the logistics federation, said in the statement. A separate PMI service index fell to 52.5 from 54.1 in October, according to a statement from HSBC Holdings Plc and Markit Economics.
An index of materials producers in the CSI 300 slipped 2.3 percent. Anhui Conch, China’s biggest cement maker, dropped 2.4 percent to 16.45 yuan. Huaxin Cement Co., an affiliate of Holcim Ltd., lost 5.8 percent to 14.39 yuan, the most in three months. Hebei Steel, the listed unit of the country’s biggest steelmaker, retreated 2 percent to 3.43 yuan. Angang Steel Co. slid 1.2 percent to 4.77 yuan.
Profit Plunge
Profit margins from product sales at 77 large and medium- sized Chinese iron and steel companies was 0.47 percent in October, the Economic Information Daily reported, citing Luo Bingsheng, a deputy party secretary of the China Iron and Steel Association. Total profit dropped 82.6 percent in October compared with a month earlier, Luo said.
“The turning point of property prices is emerging,” the People’s Bank of China said in a Dec. 2 statement after the market closed. It noted that property investment growth has eased from a “high level” and that developers are facing tighter credit conditions. Banks and property developers could cope with a 20 percent to 30 percent decline in home prices, according to the statement.
Developers Retreat
Vanke, the nation’s biggest listed property developer, fell 1.2 percent to 7.29 yuan. Merchants Property lost 1 percent to 16.71 yuan.
China may extend restrictions on purchasing properties in selected cities when the orders expire around the end of the year, Cb.com.cn, the website of the China Business Journal, reported over the weekend, citing an unidentified official at the Ministry of Housing and Rural Development.
It may take between three and six months for new lending and monetary supply to increase after last week’s reduction in reserve requirement ratio, Hou Zhenhai, an analyst at China International Capital Corp, wrote in a note dated yesterday. Stocks may rebound in spring next year on a rebound in new loans and M2, according to the report.
The economic slowdown could lead to social unrest and the country’s provincial officials need to find ways to prepare for the negative effects of the market economy, the Financial Times reported today, citing Zhou Yongkang, a member of the Communist Party of China’s Politburo.
A gauge tracking Shenzhen-listed small and medium-size companies slid 3.4 percent to a level not seen since July 2010.
Fine Tuning
China’s central bank reduced lenders’ reserve requirements on Nov. 30 for the first time since 2008. Premier Wen Jiabao has pledged to “fine-tune” economic policies to sustain growth amid a deepening debt crisis in Europe that threatens to trigger a global recession.
China’s central bank will periodically loosen monetary policy while maintaining a prudent stance, the People’s Daily cited Ba Shusong, a researcher at the State Council’s Development Research Center, as saying.
Government debt, which may have risen to 20 trillion yuan ($3.14 trillion) by the end of 2010, or about 50 percent of its gross domestic product, is becoming a major constraint on its economic growth, research firm Beijing Fost Economic Consulting Company Ltd. said in a report dated Dec. 3.
European leaders will meet this week to seek to resolve the region’s sovereign-debt crisis. Two people familiar with the negotiations said a proposal to channel European Central Bank loans through the International Monetary Fund may deliver as much as 200 billion euros ($268 billion) to fight the crisis.
–Zhang Shidong. Editors: Richard Frost, Darren Boey
To contact Bloomberg News staff for this story: Zhang Shidong in Shanghai at szhang5@bloomberg.net
To contact the editor responsible for this story: Darren Boey at dboey@bloomberg.net