Good morning

The headlines:

  1. Japan has had an unexpected trade surplus for February! Everyone is surprised – particularly the 28 economists that called it dramatically wrong in the Bloomberg survey (just before a big announcement is made – most news agencies and/or traders will do a quick phone-around to get a general feeling of what the market is expecting). The reason for the surprise? Well – trade surpluses occur when exports exceed imports. And Japan – Japan has just mourned the one-year anniversary of the tsunami that shut down some of its nuclear reactors. Therefore, it has to import its energy: in an environment of rising fuel costs. However: the reason for the surplus? Well after the Bank of Japan purchased government bonds, thereby increasing the money supply, thereby depreciating the yen. This has made exporters more competitive, so exports were higher than anticipated. Some economists say that the level of exports is sustainable. I say: the yen appreciated after the announcement. Link: The Japanese Trade Surplus.
  2. Visa has suggested that China’s decision to allow Citigroup to issue credit cards in China may indicate the start of a “broader market opening”. Citigroup will be the first foreign bank permitted to issue credit cards in China. Visa is excited because currently, it is only allowed to process foreign-currency denominated payments in China. Payments in yuan are the monopolistic province of China UnionPay Data Co. According to Elizabeth Buse, Visa group president for business outside the Americas, volume growth was over 50% in China last year. Madness. Link: Visa plans to expand in China when it’s allowed to.
  3. On the topic, the Chinese Central Bank announced yesterday that it’s cutting the reserve ratios of 379 Agribank branches, thereby boosting rural credit. This is part of China’s reaction to the “soft landing” that everyone is talking about. When in crisis, give the people more money. Except yes: that’s the reserve ratios of bank branches. The Agricultural Bank of China is the country’s third largest lender by value. And some of its branches (an original 563 in the original trial, plus the new 379) are having their credit policies loosened. Branches?!  Link: China cuts some reserve ratios.
  4. The consumer giant Kraft Foods Inc. (owner of Cadbury’s and Hershey’s and Oreos) is changing its name to Mondelez. I dare you to try pronounce it. The grocery arm of the business will retain the name Kraft. Link: Kraft name change.
  5. And the Africa News in Brief. Link: All Africa Business. The highlights:
    • Essar Global says that it will invest $4 billion in Zimbabwe’s steel industry over the next 10 years.
    • Trade between Nigeria and Brazil has reached $6 billion. It’s not clear whether this amount is cumulative or per year. Probably per year though.
    • The Bank of Uganda has handed back the Libyan-owned Tropical Bank Limited, which it ceased in March last year as part of UN sanctions.
    • Zimbabwean farmers have warned of a food crisis after a third of the country’s maize crop was declared a write-off.
That’s all for now.
Have a good Thursday!