Hong Kong
12 May 2008
A strong yen and a slow U.S. auto market are to blame for Japanese automaker Toyota's profit drop in the first quarter, and Malaysia's Maybank will buy a stake in a Pakistani lender. Claudia Blume has more on these and other business stories in our weekly summary of business news from Asia.
Japanese automaker Toyota posted a larger-than-expected 28 percent drop in net profit for the first quarter. Profit from January to March was $3 billion, down from $4.2 billion in the same period last year.
The profit drop was mainly caused by the stronger yen, weak auto sales in the United States and soaring commodity prices. President Katsuaki Watanabe warned that because of the adverse conditions, Toyota will see its annual profit drop this year, ending a seven-year string of record results.
"We are facing a very severe environment," he said. "But Toyota considers this a valuable opportunity to turn into a more flexible and stronger company."
One of Malaysia's leading lenders, Maybank, will buy up to 20 percent of Pakistan's MCB Bank. Maybank will pay close to $690 million for a 15 percent stake in Pakistan's fourth largest bank. It has the right to buy an additional five percent stake in the future.
The investment is part of Maybank's expansion drive, which includes buying stakes in Vietnamese and Indonesian banks.
In other news from Malaysia's banking sector, the country's state pension fund will sell a 25 percent stake of banking group RHB Capital, which it controls, to Abu Dhabi Commercial Bank. The deal is worth about $1.2 billion. The acquisition will make Abu Dhabi Commercial Bank the second-largest shareholder in RHB Capital.
Surging food and energy prices have pushed inflation in the Philippines to a three-year high of 8.3 percent in April. The price of rice alone went up almost 25 percent from a year ago. The Philippines is one of the world's largest rice importers and has been hit hard by rising global prices.
Inflation is also a big worry in South Korea. To try to curb the problem, the Bank of Korea decided to keep interest rates unchanged at five percent for a ninth straight month.
As a result of rising food and energy costs, South Korea's inflation rate reached a four-year high of 4.1 percent in April. Adding to the concerns is South Korea's currency - the won, which has dropped more than 10 percent in value this year. That means imported goods, such as crude oil, are more expensive.