Japan's new Prime Minister Shinzo Abe attends a news conference at his official residence in Tokyo December 26, 2012.

TOKYO | Thu Dec 27, 2012 10:37pm EST

TOKYO (Reuters) - Japan's new government said on Friday it hoped to stick to a three year deadline to decide whether to restart all nuclear reactors after safety checks, despite the country's newly formed nuclear regulator saying the deadline was impossible to meet.

Economy Minister Toshimitsu Motegi, who is also responsible for energy policy, said reactors would be restarted as units received the all-clear from the atomic regulator.

"We will rely on the NRA (Nuclear Regulation Authority) to judge safety from an expert point of view and will not restart ones as long as safety is not confirmed," Motegi told a news conference.

NRA Chairman Shunichi Tanaka said in an interview in the Asahi newspaper on Friday that completing safety checks within the three-year timeframe set by new Prime Minister Shinzo Abe will be impossible to meet.

All but two of Japan's 50 reactors remain switched off after an earthquake and tsunami caused meltdowns and explosions at the Fukushima Daiichi station in northeastern Japan in March 2011.

Atomic energy supplied about 30 percent of Japan's needs before Fukushima, but since the disaster support for nuclear power has plummeted.

Abe's government, which was installed on Wednesday after a landslide election victory, has said it will take 10 years to decide on the best energy mix for Japan.

"We have not decided on the policy of going zero-nuclear by the 2030s," Motegi said, referring to the previous government's policy.

An order from former Prime Minister Yoshihiko Noda to restart the two reactors now operating in western Japan prompted the biggest demonstrations in the country in decades and contributed to his election defeat this month.

The NRA, which still needs to draft new rules on safety, has signaled it will take a tougher stance on nuclear stations situated over possible seismic fault lines and prevent risky plants from restarting.

If a review of a faultline under the operating reactors at the Ohi station shows it is active, the NRA will request a halt for the units, operated by Kansai Electric Power Co, Tanaka said in the interview.

A panel of NRA experts this week confirmed its assessment that there are active faults under the Higashi Dori nuclear plant in northern Japan, which is owned by Tohoku Electric Power Co. The assessment means the NRA is unlikely allow the plant to restart.

(Reporting by Osamu Tsukimori; Editing by Aaron Sheldrick and Michael Perry)

View the original article here

France's President Francois Hollande (R), his companion Valerie Trierweiler (2ndL) and Louvre museum's president Henri Loyrette visit the new Department of Islamic Arts galleries during its official opening ceremony at the Louvre museum in Paris September 18, 2012.

PARIS | Thu Oct 11, 2012 12:59pm EDT

PARIS (Reuters) - President Francois Hollande's Socialist government moved on Thursday to halt a push to extend a wealth tax to artworks, eager to head off a new tax row during a belt-tightening drive.

Culture Minister Aurelie Filippetti said that Hollande and Prime Minister Ayrault shared her opposition to targeting art with the wealth tax, as sought by a fellow Socialist lawmaker.

Following a proposal from MP Christian Eckert, the lower house of parliament's finance committee backed an amendment to the 2013 budget on Wednesday that would apply the tax to art, even though the measure is divisive for both the left and right.

With a long tradition of public support for the arts, France has spared artworks from the wealth tax since former Socialist president Francois Mitterrand introduced the levy in 1982.

People with assets worth more than 1.3 million euros ($1.68 million) are liable for the wealth tax of 0.25 percent on top of their income tax. The rate doubles to 0.5 percent for assets over 3 million euros.

Hollande's cash-strapped government has already come under fire for adding new taxes on the rich, especially for a new 75 percent tax rate on incomes over 1 million euros which is prompting some wealthy French to consider moving abroad.

Eckert said earlier this week that the measure was more about fiscal justice than raising new revenues, which he acknowledged were unlikely to be significant.

Under the amendment, artworks worth more than 50,000 euros would be included in the assets used to calculate a person's fortune. Eckert had originally sought the threshold to be 5,000 euros.

Filippetti said it would be a "grave error" to take away special tax treatment for art at a time of growing competition between the world's major art markets.

"We have made and will make efforts so Paris recovers a top position. That's the best way to help French artists," Filippetti said in an interview on the website of Les Echos newspaper.

ART WORLD UP IN ARMS

The amendment quickly ruffled feathers in the Paris art world just as it is preparing for the opening next week of its annual flagship art show, the FIAC.

"I think we should be extremely careful in France and very vocal against the extreme danger of this bill," said FIAC director Jennifer Flay.

"It would compromise the art market's healthy fundamentals and put at risk the means by which artists make a living," she added.

The amendment is to be voted on by the lower house of parliament next week and then go before the Senate. The Socialists have a majority in both chambers.

The fiscal credibility of President Hollande's government already took a knock last week when high-profile protests by business owners forced the government to retreat from plans to raise taxes on entrepreneurs when they sell their companies.

Hollande is pushing through France's toughest budget in at least three decades, relying heavily on tax increases on the wealthy as it seeks to get its deficit down to 3 percent of national output next year from 4.5 percent this year.

Socialist party veteran Jack Lang, Mitterrand's culture minister when the wealth tax was introduced, urged lawmakers to vote against the measure on art, warning it would harm the art market and France's cultural reputation.

"It would cause a haemorrhage of art, and collectors' exile to more welcoming countries," Lang said in a statement.

Stephane Jacquin, head of wealth management at Lazard Freres Gestion, said he did not expect the amendment to get sufficient backing in parliament.

"This isn't the first time this debate has come up, and each time art continues to be excluded from the wealth tax," he said. ($1 = 0.7751 euros)

(Reporting by Leigh Thomas and Lionel Laurent; Writing by Leigh Thomas; Editing by Susan Fenton, Ron Askew)

View the original article here

n">(Reuters) - Rising foreclosures and delinquent real estate mortgages are threatening the credit quality of New Jersey's local governments, Moody's Investors Service said.

Cities, towns and other local governments in New Jersey and many other states rely on property tax collections as their main source of revenue. Abundant foreclosures keep the taxable value of property low, hurting that funding source, Moody's said in a commentary late Thursday.

New Jersey has the second highest percentage of foreclosures in the United States behind Florida, Moody's said, citing an August report by the Mortgage Bankers Association.

And the percentage of seriously delinquent mortgages increased by 2.4 percent in New Jersey in the second quarter of 2012, while they declined nationally, Moody's said.

"Foreclosure rates in the state are likely to stay higher than the national average over the medium term because New Jersey's practice of administering foreclosures through the courts tends to be a slow and cumbersome process that tends to be prone to backlogs," Moody's said.

The scenario is likely to keep housing prices in the state low for years, because distressed properties usually sell at steep discounts, Moody's said.

The credit rating agency expects New Jersey's economy to recover more slowly than the rest of the nation from the recession.

The state's credit quality is also under pressure. On September 18, Standard & Poor's Ratings Services revised its outlook to negative from stable on New Jersey's "AA-minus" general obligation rating, citing a structural budget imbalance and optimistic revenue assumptions.

In August, the state's jobless rate was 9.9 percent, the fourth-highest rate in the country and the highest rate for New Jersey since 1977.

(Reporting By Hilary Russ; Editing by M.D. Golan)

View the original article here

1 of 2. A customer walks past a glass case displaying Maotai liquors with different price tags at a supermarket in Shenyang, Liaoning province August 8, 2012.

HONG KONG/SHANGHAI | Thu Aug 9, 2012 10:59pm EDT

HONG KONG/SHANGHAI (Reuters) - The makers of China's fiery liquor baijiu, a pricey, potent drink that is a staple at state dinners, say it inspires poets and can even ward off dementia.

For investors in the largest baijiu makers Kweichow Moutai Co Ltd and Wuliangye Yibin Co Ltd, the appeal is more mundane: the companies paid out huge dividends and raised earnings forecasts when a slowing economy had prompted dozens of Chinese firms to issue profit warnings.

Demand for high-grade liquor at state banquets and premium pricing helped Moutai post an operating profit margin last year that was more than double that of tech giant Apple Inc, the world's most valuable company, Thomson Reuters data shows.

Moutai is even a partner of the Chinese Olympic Committee, pushing out a commemorative brew for the London 2012 games.

But the stellar first-half results that these companies are expected to report this month may mark the high point if Beijing cracks down on lavish baijiu-drenched banquets.

Moutai posted a 43 percent increase in first half net profit late on Thursday, yet its shares fell almost 4 percent on Friday as the growth fell short of what some analysts had predicted. Wuliangye is expected to announce its interim results after markets close on August 19.

Premier Wen Jiabao pledged in March to ban the use of public funds for luxury items including baijiu, which retails for about $300 per standard bottle and well into the thousands for rare, aged varieties.

"It really depends on how strongly the government would like to execute this policy," said Melinda Zhang, a manager in the consumer and retail practice at the consultancy Booz & Co, who has studied the baijiu sector.

"In the long term, we see the China baijiu market keeping stable growth," she added. "The demand is there. Consumption behavior of businesses and the government will not have significant change."

DRYING UP

At the five-star Okura Garden Hotel in Shanghai, a top banquet venue, the beverage manager, surnamed Liao, said baijiu sales had dropped more than 20 percent since March.

In Tianjin, a bustling port city near the capital Beijing, Moutai sales were down by as much as 50 percent over the past half year, the official China Daily reported in late July.

Some localities have introduced their own rules, like prohibitions on drinking at lunch, to improve the image of government officials. In Jiangsu province's Siyang county, public expenditures on receptions had been cut by two-thirds, the Shanghai-based Oriental Morning Post reported.

The clamp-down on government profligacy, a hot-button issue in China where ordinary people sometimes associate officialdom with boozy banquets and corruption, comes ahead of the sensitive once-in-a-decade political transition later this year.

Yet fund managers and sell-side analysts have remained almost uniform in their bullishness on Moutai and Wuliangye, in part premised on the companies' ambitious earnings guidance. Wuliangye is predicting a 51 percent jump in first-half profit.

Of the 22 analysts tracking Wuliangye, 21 rate it a 'strong buy' or 'buy,' according to Thomson Reuters StarMine. For Moutai, 17 of 18 have a 'buy' or 'strong buy' rating.

While onshore Chinese stock markets fell 33 percent over 2010 and 2011, Moutai was a standout outperformer, surging 25 percent. Wuliangye rose a more modest 3.6 percent.

In 2012, Shanghai-listed Moutai is up 35 percent, while Shenzhen-listed Wuliangye is up 14.2 percent. This compares with a 2.8 percent gain in the CSI300 Index of the top Shanghai and Shenzhen listings.

"In the awful (stock) market conditions of the last two-and-a-half years, the outperformance of baijiu stocks has got to do with their earnings visibility," said Cao Xuefeng, head of research at Huaxi Securities in Chengdu. "Growth for the sector will stay high, but rates of growth will slow down."

Moutai and Wuliangye currently trade at 16.6 and 13.2 times their respective forward 12-month earnings, at the low end among shares of companies classified as "consumer staples" in China.

Wuliangye did not respond to repeated interview requests and Moutai declined to comment for this story.

BRIDGE TO THE WORLD

Baijiu, which translates to "white spirits," traces its roots back centuries and is made from a mixture of grains including rice, wheat and corn. It packs a punch similar to vodka, with an alcohol content typically above 50 percent, and is normally downed fast and neat in tiny shots.

On their websites, Moutai and Wuliangye both boast of their firms' long histories. Moutai also claims health benefits, saying moderate drinking "keeps the dementia away" and even helped a 92-year-old man re-grow his teeth.

But it is demand from the Communist Party that drives sales.

"As liquor for state banquet, Wuliangye has become an envoy and bridge between China and the outside," Wuliangye said on its website, adding that "many famous scholars, poets (and) generals in history have got addicted to the marvelous flavor."

That bridge to the outside has reached investors including BlackRock Asset Management, which is listed among the top 10 shareholders in both Wuliangye and Moutai.

But the alcohol itself has found few foreign fans. Some 98 percent of Wuliangye's 20.35 billion yuan ($3.19 billion) in revenue last year was domestic. For Moutai, 97 percent of its 18.4 billion yuan in revenue last year came from within China.

"There is almost no export market. 'Laowais' (foreigners) don't drink that thing," said Hong Hao, chief equity strategist at Bank of Communications International Securities.

Indeed, some foreigners have likened drinking baijiu to swallowing razor blades or jet fuel. That suggests China will struggle to follow the lead of Japan, which succeeded in making sake a popular global drink.

British drinks company Diageo Plc is trying. Last year, Diageo bought a majority stake in Sichuan Swellfun Co Ltd, maker of Shui Jing Fang baijiu, a deal that the company said would "enable us to bring one of the leading Chinese white spirits brands to international markets."

So far, those international markets are limited to places such as San Francisco and London, where wealthy Chinese tourists snap up baijiu because it is cheaper overseas and buyers believe they run less of a risk of picking up a counterfeit bottle.

Paul Mathew, a British bar owner and drink consultant living in Beijing, said he did some baijiu experimenting for Diageo. One example was the Shui Jing Fang Grapefruit Sour, which mixes a shot of baijiu with pink grapefruit juice, lemon juice, cinnamon syrup and an egg white.

Derek Sandhaus, an American living in Chengdu, Sichuan, who chronicled his conversion from baijiu hater to enthusiast in a blog entitled "300 Shots at Greatness," said he developed a taste for the liquor after 75 attempts. The title of his blog, however, refers to one study that estimated it takes 300 shots to start to enjoy the stuff.

"There's definitely a cultural barrier in terms of cocktails," Sandhaus said.

HOME SHOPPING NETWORK

That leaves domestic consumption as the main driver.

But as demand slows, supply is building. Credit Suisse analysts said inventory growth hit a record high of 35 percent in 2011, outpacing sales growth.

"It doesn't matter if you have superior pricing power like Moutai does right now. That will disappear when there's oversupply," BoComm International's Hong told Reuters.

With an operating margin of 67 percent last year -- triple the industry median according to Thomson Reuters data -- Moutai can afford to lose a little pricing power. Wuliangye's margin was a relatively modest 42 percent, still double the industry median.

"In terms of margins, Kweichow Moutai has the advantage because most of what they produce is higher-quality liquor," said Yi Yangfang, a fund manager at Guangzhou-based GF Fund Management, which manages $7.9 billion worth of assets that includes stakes in both Kweichow Moutai and Wuliangye.

Some long-time China watchers said the government's crackdown on lavish banquets may not last long.

Paul French, a veteran Shanghai-based market consultant with the firm Mintel, said campaigns like the one launched by Wen, who is due to retire early next year, have tended to be cyclical and easy to circumvent.

"Every time they try to do anything like this people find a way around it... If you sit around long enough you'll come up against that story again in a few years," he said.

(Editing by Emily Kaiser and Ryan Woo)

View the original article here