Venezuela announces widely expected currency devaluation sharply cutting bolivars value

AddThis Sharing ButtonsShare to TwitterTwitterShare to FacebookFacebookShare to RedditRedditShare to 電子郵件Email Venezuela announces widely expected currency devaluation, sharply cutting bolivar’s value CARACAS, Venezuela – Venezuela’s government announced Friday that it is devaluing the country’s currency, a long-anticipated change expected to push up prices in the heavily import-reliant economy.Officials said the fixed exchange rate is changing from 4.30 bolivars to the dollar to 6.30 bolivars to the dollar.The devaluation had been widely expected by analysts in recent months, though experts had been unsure about whether the government would act while President Hugo Chavez remained out of sight in Cuba recovering from cancer surgery.It was the first devaluation to be announced by Chavez’s government since 2010, and it pushed up the price of the dollar against the bolivar by 46.5 per cent.By boosting the bolivar value of Venezuela’s dollar-denominated oil sales, the change is expected to help ease a difficult budget outlook for the government, which has turned increasingly to borrowing to meet its spending obligations.But analysts said the move would not be sufficient to end the government’s budget woes or balance the exchange rate with an overvalued currency. Economists predicted higher inflation and a likely continuation of shortages of some staple foods, such as cornmeal, chicken and sugar.Planning and Finance Minister Jorge Giordani said the new rate will take effect Wednesday, after the two-day holiday of Carnival. He said the old rate would still be allowed for some transactions that already were approved by the state currency agency.Venezuela’s government has had strict currency exchange controls since 2003 and maintains a fixed, government-set exchange rate. Under the controls, people and businesses must apply to a government currency agency to receive dollars at the official rate to import goods, pay for travel or cover other obligations.While those controls have restricted the amounts of dollars available at the official rate, an illegal black market has flourished and the value of the bolivar has recently been eroding. In black market street trading, dollars have recently been selling for more than four times the official exchange rate of 4.30 bolivars to the dollar.Economist Pedro Palma, a professor at Caracas’ IESA business school, said the government’s decision to allow some previously requested dollar transactions for products in categories such as food, health care, construction and autos will somewhat soften the impact on inflation. But he predicted the devaluation would inevitably further drive up inflation.Economist Jose Guerra told The Associated Press that given the devaluation, he predicts inflation of more than 25 per cent this year.The announcement of the devaluation came after the country’s Central Bank said annual inflation rose to 22.2 per cent in January, up from 20.1 per cent at the end of 2012.The oil-exporting country, a member of OPEC, has consistently had Latin America’s highest officially acknowledged inflation rates in recent years. Spiraling prices have come amid worsening shortages of some foods.Seeking to confront such shortages, the government last week announced plans to have the state oil company turn over more of its earnings in dollars to the Central Bank while reducing the amount injected into a fund used for various government programs and public works projects.It was the fifth time that Chavez’s government has devalued the currency since establishing the currency exchange controls a decade ago in an attempt to combat capital flight.Giordani said the government also decided to do away with a second-tier rate that has hovered around 5.30 bolivars to the dollar, through a bond market administered by the Central Bank.That rate had been granted to some businesses that hadn’t been able to obtain dollars at the official rate, and accounted for roughly one-fifth of government-approved foreign currency transactions.Central Bank President Nelson Merentes called that bond trading system, known by the acronym Sitme, “imperfect.”“It doesn’t make much sense to keep a system that seeks the country’s debt to feed it,” Merentes said.Palma said it’s worrying that the government is not providing any additional outlet for Venezuelans to obtain dollars, given the strong demand for foreign currency. Guerra, a professor at Central University of Venezuela, predicts that demand for dollars is likely to keep pushing the so-called “parallel” dollar market higher.The government’s announcement drew strong criticism from opposition leader Henrique Capriles, who said that the government’s heavy spending was to blame for the situation and that officials were trying to slip the change past the public at the start of a long holiday weekend.“They spent the money on campaigning, corruption, gifts abroad!” Capriles said in one of several messages on his Twitter account. Capriles was defeated by Chavez in an October presidential vote that was preceded by a burst of heavy government spending.Capriles criticized Vice-President Nicolas Maduro’s handling of the situation. Maduro, who was named by Chavez as his preferred successor before undergoing cancer surgery Dec. 11, has taken on more responsibilities and a higher profile during the president’s nearly two-month absence.“They give Mr. Maduro a little more time in charge and he finishes with the country,” Capriles said. “Look at the inflation in January, and now the devaluation.”Maduro said on television that the measure had been approved by Chavez. He said the change was necessary in response to a recent “speculative attacks” against the country’s currency.___Associated Press writer Jorge Rueda contributed to this report. by Fabiola Sanchez, The Associated Press Posted Feb 8, 2013 8:39 pm MDT read more

Agrium target of activist investor Jana reports higher Q4 earnings

by Lauren Krugel, The Canadian Press Posted Feb 21, 2013 7:44 pm MDT AddThis Sharing ButtonsShare to TwitterTwitterShare to FacebookFacebookShare to RedditRedditShare to 電子郵件Email Agrium, target of activist investor Jana, reports higher Q4 earnings CALGARY – Agrium Inc., which is embroiled in a proxy fight with its largest shareholder, reported higher fourth-quarter profits and sales on Thursday.The Calgary-based fertilizer giant says net earnings for the last three months of 2012 were $354 million, or $2.34 per share, up from $193 million, or $1.20 per share, a year earlier.Sales were $3.26 billion, up from $3.18 billion.The results were helped by a $22 million recovery of previously paid and disputed guarantees for letters of credit in an AWB Ltd. investment. AWB is the Australian grain handler Agrium acquired in 2010.The quarter also included an $18 million recovery in share-based expense payment expenses.Without those items, net earnings would have been $326 million, or $2.16 per share.The earnings beat analyst expectations of $2.02 per share, while revenue came in line with Street predictions, according to Thomson Reuters.The dispute with Jana Partners LLC went public in August, after the New York hedge fund had first approached Agrium privately in May. The fund has spent $1 billion for a 6.5 per cent stake in the fertilizer giant.Among other things, Jana wants Agrium to split its retail division, which sells seeds, fertilizers and other products to farmers, from its wholesale segment.Agrium says that proposal would expose shareholders to too much risk and destroy value.Agrium’s retail segment had record sales of $2 billion during the fourth quarter, an increase of eight per cent, compared to $1.8 billion a year earlier.“The increase was primarily due to a combination of the large winter wheat crop planted, early harvest and favourable weather conditions for the fall application season in the U.S.,” Agrium said.Wholesale had sales of $1.4 billion, a slight dip from the record $1.5 billion it reported during the same quarter of 2011.Jana has also attacked Agrium for its costs, capital allocation and governance.The fund wants to appoint five directors to Agrium’s board. Its slate includes Jana managing partner Barry Rosenstein, former Liberal agriculture minister Lyle Vanclief and three men with the executive experience in distribution that the fund says is lacking on Agrium’s board.Last week, Agrium put forward two of its own candidates, former Viterra Inc. CEO Mayo Schmidt and former Deere & Co. executive David Everitt.Agrium said it had been close to reaching a compromise with Jana to put an end to what has become a bitter proxy fight, but that the hedge fund “reneged” at the “last minute.” Jana takes issue with that version of events.In an open letter to Agrium shareholders earlier this week, Jana said neither Schmidt nor Everitt have the adequate distribution experience that Agrium needs and were “pre-screened to ensure compliance with the status-quo.”The letter also took aim at Agrium’s decision to schedule its annual general meeting on April 9, a month earlier than the event normally takes place. Agrium says it wants to get the battle over with, while Jana accuses it of cutting short the debate.Agrium shares dropped 1.8 per cent to $108.75 on the Toronto Stock Exchange Thursday. read more

NY court OKs overthecounter sales of some nextday contraception while appeal proceeds

by Larry Neumeister And Lauran Neergaard, The Associated Press Posted Jun 5, 2013 2:28 pm MDT AddThis Sharing ButtonsShare to TwitterTwitterShare to FacebookFacebookShare to RedditRedditShare to 電子郵件Email NY court OKs over-the-counter sales of some next-day contraception while appeal proceeds NEW YORK, N.Y. – Generic versions of emergency contraception can be sold without a prescription or age restrictions while the federal government appeals a judge’s ruling allowing the sales, an appeals court said Wednesday.The brief order issued by the 2nd U.S. Circuit Court of Appeals in Manhattan permitted two-pill versions of emergency contraception to immediately be sold without restrictions, but the court refused to allow unrestricted sales of Plan B One-Step until it decides the merits of the government’s appeal. It did not specify why the two-pill versions were being allowed now, though it said the government failed to meet the requirements necessary to block the lower-court decision.The order was welcomed by the Center for Reproductive Rights, where President Nancy Northup called it a “historic day for women’s health.”“Finally, after more than a decade of politically motivated delays, women will no longer have to endure intrusive, onerous and medically unnecessary restrictions to get emergency contraception,” she said in a statement.The centre’s litigation director, Julie Rickelman, said the government has two weeks to decide whether to appeal the 2nd Circuit’s decision on the stay to the full appeals court or the Supreme Court. Even if there is no appeal of the stay ruling, it was unclear how soon drugstores would move the two-pill emergency contraception from behind the counter. She said she hoped the pills would be available without restriction within a month.“What it does mean is that generic two-pill products are going to be readily available to women without age restrictions, on any drugstore shelf,” Rickelman said. “It’ll be like buying Tylenol. You’ll be able to go get it off the drugstore shelf, no ID, at the regular counter.”Justice Department spokeswoman Allison Price said the government was reviewing the court’s order.The government has appealed U.S. District Judge Edward Korman’s underlying April 5 ruling, which ordered levonorgestrel-based emergency contraceptives be made available without a prescription, over-the-counter and without point-of-sale or age restrictions.The government asked Korman to suspend the effect of that ruling until the appeals court could decide the case, but the judge declined, saying the government’s decision to restrict sales was “politically motivated, scientifically unjustified and contrary to agency precedent.” He also said there was no basis to deny the request to make the drugs widely available.The government had argued that “substantial market confusion” could result if Korman’s ruling was enforced while appeals were pending, only to be later overturned.The Food and Drug Administration was preparing in 2011 to allow over-the-counter sales of the morning-after pill with no limits when Health and Human Services Secretary Kathleen Sebelius overruled her own scientists in an unprecedented move.The FDA announced in early May that Plan B One-Step could be sold without a prescription to those 15 and older. Its maker, Teva Women’s Health, plans to begin those sales soon. Sales had previously been limited to those who were at least 17.Korman later ridiculed the FDA changes, saying they established “nonsensical rules” that favoured sales of the Plan B One-Step morning-after pill and were made “to sugarcoat” the government’s appeal.He also said they place a disproportionate burden on blacks and the poor by requiring a prescription for less expensive generic versions of the drug bought by those under age 17 and by requiring those over age 17 to show proof-of-age identification at a pharmacy.Plan B One-Step is the newer version of emergency contraception — the same drug, but combined into one pill instead of two.___Neergaard reported from Washington. read more

Job claims for Nova Scotias 60 million investment in DSME unrealistic

HALIFAX – The Nova Scotia government was told seven months after committing $60 million to a wind tower manufacturing plant that claims of 500 jobs to be created within three years were “unrealistic,” say documents obtained by The Canadian Press.Internal government studies obtained through freedom-of-information legislation also show provincial government revenues and the economic impact to households were only fractions of what was originally projected.The former NDP government announced with much public fanfare in 2010 that it was taking a 49 per cent equity stake as part of a $90-million refit of the former TrentonWorks railcar plant after it was bought by Korean-owned Daewoo Shipbuilding and Marine Engineering.The plan was for DSME Trenton to eventually develop the capacity to produce 250 wind turbine towers and 200 blade sets per year.But prior to the targeted May 2011 startup, it was already clear to the government that the facility would face difficulties when it shifted its focus from building exclusively for DeWind, a DSME-owned wind turbine company, to seeking business with other clients.“DeWind does not have sufficient orders and DSME Trenton must undertake its own sales and marketing,” said a March 2011 briefing note prepared for Percy Paris, then the economic development minister.The documents show that by October 2011, despite meeting its first year target of more than 140 workers, the company had reduced its three-year employment estimate to 350 from 500.By the end of January 2012, Paris was advised that the original projection of 500 jobs was “considered unrealistic” by his department’s director of strategic services.Several reasons are given in the briefing notes, including the actual size of the plant’s assembly line layout.The notes say other factors “are limited market size … a weak global economy and barriers to entry for certain provincial markets, like Quebec and Ontario.”By October 2012, the province had disbursed $46.9 million to the company, including a $3.7-million forgivable loan, $19.6 million in equity and $23.6 million from a $30-million authorized loan. The plant delivered 20 towers, but was down to 72 employees.With the wind industry market in decline by February 2013, both the provincial government and DSME Trenton said they recognized the need to diversify the plant’s business into areas such as industrial metal fabrication, oil and gas fabrication, pressured vessels, power plants and shipbuilding components.The documents also include a 2009 study with economic projections and a one-time economic impact assessment of DSME carried out for the years 2010 to 2012. Both were prepared for the government by the province’s Finance Department.The minimum economic projection foresaw total household income hitting $101 million and provincial government revenues of $11.3 million over the three-year period.The followup study shows that in 2012, those projections were far short, with household income at $21 million and provincial government revenues totalling $2.9 million.Liberal Economic Development Minister Michel Samson, whose party while in Opposition was highly critical of the provincial investment in DSME, expressed confidence in the company’s future, adding that it now has 150 employees.Samson said the plant has landed some “modest” contracts to build wind turbine towers and pressurized tanks for the offshore industry and is looking for potential spinoff work once the federal navy ship contract won by Irving Shipbuilding ramps up.“The question is what can we do now to assist the company to find growth in new areas and to be able to achieve success,” Samson said.He said just over $56 million of the province’s $60 million commitment has been spent.A spokesman for DSME Trenton declined an interview request but in an email said business at the facility was thriving.“We are currently quite busy with the construction of wind towers at the plant and are all focused on the fabrication and manufacturing of these large unit sections, processing through the facility,” Brad Murray said. by Michael Tutton and Keith Doucette, The Canadian Press Posted Jun 22, 2014 2:00 am MDT Job claims for Nova Scotia’s $60 million investment in DSME ‘unrealistic’ AddThis Sharing ButtonsShare to TwitterTwitterShare to FacebookFacebookShare to RedditRedditShare to 電子郵件Email read more