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Posts Tagged ‘recovery’

Banking stocks support markets’ recovery

In Uncategorized on December 16, 2010 at 10:06 am

Vietnam’s benchmark VN-Index rebounded on December 15 as banking shares once again buoyed stocks on the Ho Chi Minh Stock Exchange.

The gauge of 271 companies and five mutual funds restored 0.78 percent, or 3.82 points, to close at 493.47 points.

On the benchmark, 77 stocks advanced, 146 fell, while 53 were unchanged.

Trading volume on the city bourse remained on high level. Around 95.68 million shares changed hands at a value of VND2.18 trillion.

Saigon Thuong Tin Commercial Bank or Sacombank (STB) became the most active share on the benchmark with 9.16 million shares changing hands, followed by Tan Tao Investment Industry Corporation (ITA) with 6.06 million shares.

Saigon Securities Inc. (SSI), the country’s largest brokerage, came next with 5.39 million shares traded.

Vinafco Joint Stock Corporation (VFC) increased for five consecutive days, gaining 4.97 percent to VND19,000.

Viet Nam Joint Stock Commercial Bank for Industry and Trade or Vietinbank (CTG) surged for the fourth straight day, emerging 4.95 percent to VND21,200.

Hanoi-based technology company CMC Corporation (CMG) revived 4.92 percent to trade at VND19,200.

Tay Bac Minerals Investment Joint Stock Company (KTB), Saigon Beverages Joint Stock Company (TRI), and Viet – Han Corporation (VHG) all plunged the daily maximum allowed limit of 5 percent to VND24,700, VND5,700, and VND17,100 respectively.

Vien Dong Investment Development Trading Corporation (VID) sank the second day, losing  4.96 percent to VND11,500.

Vimedimex Medi – Pharma Joint Stock Company (VMD) eroded 4.92 percent to VND30,900.

The smaller bourse on the north also performed well as the Hanoi’s HNX-Index climbed 0.83 percent, or 0.99 points, to close at 120.6 points. Trading volume sharply dropped over the previous trading session as just nearly 79 million shares changed hands at VND1.55 trillion.

Meanwhile, the UPCom-Index also added up by 0.19 points to 42.19 points this morning. A total of 216,534 shares changed hands at a value of VND2.9 billion.

Source: SGGP

Robust economic recovery in East Asia, says WB

In Uncategorized on October 20, 2010 at 11:03 am

The economic recovery in Vietnam in particular and in East Asia and the Pacific in general is robust, said the World Bank in its latest East Asia and Pacific Economic Update.

The WB Update was announced at a press briefing in Hanoi on Oct. 19.

According to the Update, Vietnam ’s economy has recovered strongly with a GDP growth of 5.3 percent in 2009 and is on the way to the target of 6.5 percent this year. The nation’s foreign investment rose from USD6.9 billion in 2009 to USD7.6 billion in 2010.

In addition, manufacturing companies’ relocation of plants in Southeast Asia is benefiting Vietnam as its workers’ salaries are low and its sea-bordered position is favorable for attracting investment capital.

The Update notes that output has recovered to above pre-crisis levels throughout developing East Asia, and is expanding at near pre-crisis rates in some countries.

Real GDP growth is likely to rise to 8.9 percent in the region in 2010 (6.7 percent excluding China), up from 7.3 percent in 2009 and in line with the average growth rate during the 2000-2008 period. Private sector investment is once again driving growth, confidence is on the rise, and trade flows have returned to pre-crisis levels.

Yet, greater confidence in the region’s growth prospects and concerns about tepid economic expansion in advanced economies is creating the need for policymakers to perform a delicate balancing act — in particular, around the return of large capital inflows and appreciating currencies.

“Should inflows remain strong, especially against a background of weak global growth, the authorities will be faced with the challenge of balancing the need for large capital inflows — especially foreign direct investment — with ensuring competitiveness, financial sector stability, and low inflation,” said Vikram Nehru, World Bank chief economist for the East Asia and Pacific region.

The East Asia and Pacific Update which is published twice yearly is the WB’s comprehensive review of the region’s economies.

Source: SGGP

Early elections in Italy could hamper recovery: president

In Uncategorized on August 13, 2010 at 11:22 am

ROME, Aug 13, 2010 (AFP) – Italy’s President Giorgio Napolitano said Friday he was against early elections after a rift opened in Prime Minister Silvio Berlusconi’s government coalition, as they could hamper the economic recovery.

“We have seen recent positive and encouraging signs of a productive recovery and a return to growth in Italy even as the world scenario remains difficult,” Napolitano said in an interview published on left-wing daily L’Unita.

“But I wonder, what could happen to this country if we head towards a political void and towards a brutal electoral clash?” Napolitano asked.

Italy’s economic output grew by 0.4 percent both in the first and second quarter of 2010, and it is expected to grow by 1.1 percent by the end of the year.

Berlusconi, 73, lost his once-comfortable parliamentary majority last month when lower house speaker Gianfranco Fini ended a 16-year alliance with him, leaving the People of Freedom (PDL) party.

Fini’s supporters set up breakaway parliamentary groups of 33 deputies and 10 senators.

Napolitano acknowledged the “serious political conflict within the coalition that won the 2008 elections, within the government coalition” that has fueled speculation about possible early elections in November or in early next year.

Berlusconi has said his government will face a crucial test of strength in September in the form of a confidence vote.

If the vote brings down the government, Napolitano will poll parliamentary group leaders on the possibility of forming a transitional government, failing which he will dissolve parliament and call elections.

“My institutional responsibilities will come into play only when it becomes clear in parliament that the majority has dissolved,” Napolitano said.

The president also invited Berlusconi’s camp to stop calling for Fini’s resignation as lower house speaker.

“It is time to end the institutionally very de-stabilising campaign that aims to take away legitimacy from the president of a branch of parliament,” Napolitano said.

“It is the time to lower tones… and look at the country that needs answers to its problems rather than showdowns and threatening proclamations,” he said.

Il Giornale, a daily owned by the Berlusconi family, has questioned the propriety of the sale of a house in Monaco by Fini’s former party, the National Alliance, which merged with Berlusconi’s Forza Italia into the PDL in 2008.

On Friday, Il Giornale devoted its first seven pages to Fini’s involvment in the sale and said it had collected 50,000 signatures calling for his resignation.

Berlusconi and Fini have been at odds since a public spat in April — largely over legislation that would help Berlusconi avoid prosecution on corruption and tax fraud charges — ahead of their dramatic split late last month.

Source: SGGP

US Fed promises stimulus to help slowing recovery

In Uncategorized on August 11, 2010 at 7:20 am

 The US Federal Reserve promised more stimulus spending to prop up the economy, as it warned the recovery had slowed.

Facing pedestrian growth rates and high joblessness, the Fed vowed to renew crisis-era measures that pumped hundreds of billions of dollars into ailing markets.

Members of the Federal Open Market Committee downgraded their assessment of the health of the world’s largest economy, saying growth “has slowed in recent months.”

The 10-member committee warned “the pace of economic recovery is likely to be more modest in the near term than had been anticipated.”

In a sign of how seriously Washington is viewing the slowdown, the Fed promised to maintain crisis measures, which had been due to end.

A trader works on the floor of the New York Stock Exchange.

The bank had battled the worst recession in a generation by buying up US debt, mortgage-backed securities and other financial products to lubricate markets.

The Fed said it would now reinvest cash from maturing mortgage bonds rather than shrink its two-trillion-dollar portfolio as planned — essentially resuming crisis-era spending.

“To help support the economic recovery in a context of price stability, the committee will keep constant the Federal Reserve’s holdings of securities at their current level,” the FOMC said.

The move was seen as “an unambiguous downshift in the Fed’s assessment of… the current state of the economy,” according to Ian Shepherdson of High Frequency Economics.

In early August, the Fed held around 1.2 trillion dollars in mortgage-backed securities, which it had hoped to whittle away.

“Prior to this new directive from the FOMC, the balance sheet was set to shrink by as much as 200 billions dollars per year,” said Stephen Gallagher and Aneta Markowska of Societe Generale.

The pair added that the Fed’s move might help stimulate a moribund housing market: “The Fed’s investments in longer-dated Treasury debt should…lower mortgage and other borrowing rates.”

In June, the Fed had said the economic recovery was “proceeding” despite headwinds and would remain “moderate for a time.”

But against stiff headwinds, the bank on Tuesday promised to keep interest rates at “exceptionally low levels…for an extended period.”

Stock markets pared loses shortly after the announcement, with the Dow index replacing triple digit losses to close down 55 points, or around half a percent.

But it was not welcomed universally.

“The Fed is running scared,” said Stephen Stanley of Pierpont Securities, accusing the bank of “exacerbating the environment of uncertainty by conducting policy erratically and feeding the sense of fear by wetting the bed over a soft patch (in the economy).”

But the Fed’s move also seemed unlikely to end speculation about the need for more robust action.

“Simply reinvesting the proceeds from maturing agency securities will not provide much additional stimulus,” said Michael Gapen of Barclays Capital.

“Should the outlook continue to worsen, then the Fed will likely initiate a new round of asset purchases.”

Source: SGGP

US growth slows fueling fears over recovery

In Uncategorized on July 31, 2010 at 11:18 am

US economic growth slowed dramatically in the second quarter, the government has said, stoking fears that the recovery is losing steam and fueling a fierce political debate over how to respond.

Gross domestic product (GDP) growth fell back sharply to 2.4 percent in the second quarter, the Commerce Department said, slamming the brakes on an already tepid rebound and painting a bleak picture of the road ahead.

“The post-recession rebound is history,” said Bart van Ark, chief economist for The Conference Board, a leading business research group.

In the first quarter, growth hit 3.7 percent, up substantially from the 2.7 percent previously reported by government.

Amid weak consumer spending and a widening trade gap, few took solace from fresh data that appeared to confirm the US recession has ended and only marginally failed to meet analysts’ expectations of 2.5 percent growth.

President Barack Obama admitted more work needs to be done, but stressed the economy was on the right path, pointing to four consecutive quarters of growth.

“Our economy is growing again instead of shrinking. And that’s a welcome sign compared to where we were,” he said in Detroit.

“But we’ve got to keep on increasing that rate of growth and keep adding jobs so we can keep moving forward,” he said.

Revisions to previous GDP data Friday showed the recession was much worse than previously thought, with negative growth reaching a whopping 6.8 percent in the final three months of 2008.

“The fourth quarter of 2008 and first quarter of 2009 had the worst two quarterly declines in 51 years,” said Beth Ann Bovino, a senior economist Standard & Poor’s.

Detailed figures for the April-to-June period showed much of the slowdown came from businesses reining in inventory spending, which had grown rapidly in the wake of the financial crisis.

Increased imports — which are subtracted from the GDP figure, as that money flows abroad — also played a strong role.

Americans bought more, but that spending was tilted toward foreign goods and services.

“Purchases by US residents of goods and services wherever produced — increased 5.1 percent in the second quarter, compared with an increase of 3.9 percent in the first,” the Commerce Department said.

“Imports of goods and services increased 28.8 percent, compared with an increase of 11.2 percent,” in the first quarter, it said.

Friday’s data fueled a fierce debate about whether the government needs to again jump start the economy, and how best that could be done.

Obama has clashed with Republicans over the need for government to help the ailing economy, making spending one of the most fiercely fought political battles in the US capital.

Obama’s critics accuse the president of putting Americans’ future at risk by causing US debt to balloon through ineffective stimulus spending.

In Detroit, Obama touted a 64-billion-dollar bailout that kept the Motor City’s automakers afloat, promoting it as the type of “tough decision” needed to avoid economic depression.

The White House claims one million auto jobs were saved by Obama’s actions, and GM and Chrysler have returned to profit.

Businesses offered a possible bright spot in the Commerce Department’s report, as their investment increased 17 percent in the second quarter, compared with an increase of 7.8 percent in the first.

Shoppers and pedestrians walk past an extrance to Macy’s Department Store in New York.

“Business investment was up substantially,” said Stephen Gallagher of Societe Generale, sounding a note of caution.

“Stronger profits are behind the business investment, but unfortunately, these profits are not sparking as much employment growth.”

According to economist Peter Morici, American consumers will have to start spending again if the recovery is to gain traction.

“Unless spending picks up… once businesses stop piling up unsold goods, layoffs will outnumber hires, unemployment will rise with a vengeance, and the economy will head into a second dip.”

Source: SGGP

Blue-chips’ recovery boost market high

In Uncategorized on July 30, 2010 at 11:19 am

Movements of VN-Index from July 26 to 30. (Photo: unfavorable news, Vietnam’s stock markets advanced on July 30, thanks to rallying blue-chip stocks.

Most investors expected that stocks would decline after Fitch Ratings cut Vietnam’s credit rating to B+ from BB- yesterday. However, markets moved contrastingly.

Vietnam’s benchmark VN-Index, a measure of 251 companies and four mutual funds listed on the Ho Chi Minh Stock Exchange, added 0.57 percent, or 2.8 points, to finish at 493.91.

Among the index members, 151 increased, 48 dropped and 56 treaded water.

Liquidity slightly improved over the previous trading session as more than 46 million shares changed hands, valuing VND1.33 trillion.

HCMC-based Refrigeration Electrical Engineering Corporation (REE) became the most active share by volume with 3.16 million changing hands.

Vinh Son – Song Hinh Hydropower Joint Stock Company (VSH) took the second position, trading 2.5 million shares.

Ranking third, Ocean Group Joint Stock Company (OGC) saw 1.11 million shares change hands.

Cadovimex Seafood Import-Export and Processing Joint Stock Company (CAD), Vietnam Electricity Construction Joint Stock Corporation (VNE), and Viettronics Tan Binh Joint Stock Company (VTB) all jumped the daily maximum allowed limit of 5 percent to VND12,600, VND16,800 and VND21,000 respectively.

Investment and Trading of Real Estate Joint Stock Company (ITC) gained 4.9 percent to VND30,000.

From August 3 to October 1, Nguyen Thi Lang, member of Board of Supervisors of Investment and Trading of Real Estate Joint Stock Company (ITC), registered to sell 214,192 shares to cover family expenses, reducing her holdings to 53,547 shares, accounting for 0.077 percent of the company’s chartered capital.

On July 27, Vietnam Azalea Fund Limited, a major shareholder of ITC, bought 2.8 million shares, raising its holdings to 3,919,140 shares, accounting for 5.67 percent of ITC’s chartered capital.

Losers on the city bourse included Saigon Beverages Joint Stock Company (TRI), Godaco Seafood Joint Stock Company (AGD) and Ocean Group Joint Stock Company (OGC).

The Hanoi-based trading floor also performed well as the HNX-Index edged up 0.34 points, or 0.22 percent, to 153.33. However, trading volume fell by more than 10 million shares over the previous trading session to nearly 35.48 million shares, worth VND988.89 billion.

The UPCoM-Index continued its losing trend and contracted 0.07 points to 52.51. A total of 443,352 shares were traded at VND6.15 billion as of 11 am local time.

Source: SGGP

US recovery faces litmus test

In Uncategorized on July 2, 2010 at 2:20 pm

WASHINGTON (AFP) – The patchy US economic recovery faces a crucial litmus test Friday when fresh unemployment figures are released, but few expect positive results.

(AFP file) A trader reacts during trading at the New York Stock Exchange.

Most analysts say the ranks of jobless Americans are likely to have swollen to more than 15 million, pushing the unemployment rate from 9.7 percent to 9.8 percent.

That would be bad news for President Barack Obama, who is running out of time to put the economy back on track before Congressional elections in November.

Although the White House has repeatedly warned that unemployment will remain high for the rest of the year, polls show it is still a crucial issue with voters.

The drop would also be bad news for markets, which have been convulsed by worry about a double dip recession in recent weeks.

The last quarter has been tortuous for the top 30 US companies, with the Dow Jones Industrial Average losing more than ten percent of its value, in large part over fears about the fate of the US economy.

“This Friday’s employment report will provide an important gauge on the robustness of the recovery underway,” Goldman Sachs analysts warned.

Goldman predicts that payrolls shrunk by 100,000 last month, the first negative figure this year.

One reason for the skepticism is the continued weakness of the private sector, which created just 41,000 jobs in May.

Faced with an uncertain outlook and poor access to credit, US firms have been reluctant to rehire workers.

Analysts fear the June figures will also see the evaporation of hiring for the 2010 Census, which accounted for 95 percent of new jobs in May.

And on Thursday the Labor Department reported yet more people claimed unemployment benefits last week, when new jobless claims rose to 472,000, an increase of 13,000 from the week before.

“Claims drifted higher still over the course of June… suggesting the labor market has not regained the traction that appeared to be building in the first four months of the year,” said Deutsche Bank analysts.

The weakness has sparked calls for Obama to provide more government spending to restart the recovery.

But proponents of this plan admit it is nearly impossible as Washington zeroes in on elections in which the national debt is also likely to feature prominently.

Congress is currently locked in a bitter debate over extending unemployment insurance for over one million workers and is likely to balk at a wider spending package.

The US House of Representatives extended federal unemployment benefits through November 30 on Thursday, but now the Senate has to take up the controversial measure.

Without the extension, some 1.7 million unemployed would be unable to receive their benefits after July 3, according to the House Financial Services Committee.

A new vote on the measure is not expected until Congress returns from its week-long July 4 Independence Day holiday recess.

“I think this report will show that really we need to do more,” said Heidi Shierholz of the Economic Policy Institute, a Washington-based think tank. “The private sector is not yet poised to takeover and sustain a robust recovery.”

With state governments cutting jobs to balance their books, Shierholz said there was a strong case for extending unemployment benefits and aid to states, despite the political difficulties.

“This is one of those cases where the political realities are completely at odds with economic sense,” she said advocating fresh stimulus of around 400 billion dollars.

“I don’t know what is going on in the heads of these people, the economic case is so cut and dry, it is so clear what needs to be done.”

Source: SGGP

G-20 prioritises protecting economic recovery

In Uncategorized on June 28, 2010 at 4:50 pm

G-20 prioritises protecting economic recovery

QĐND – Monday, June 28, 2010, 22:6 (GMT+7)

The Group of the world’s 20 leading industrial and major developing countries agreed to prioritise protecting and reinforcing the current economic recovery to lay the foundations for robust, sustainable and balanced growth as well as safeguarding financial institutions against risks.

This was stated by the G-20 leaders at the end of their Summit in Toronto, Canada, on June 28.

Having approved a framework for strong, sustainable and balanced growth, the heads of the 20 countries agreed on reforming the global financial sector and international financial institutions, discouraging protectionism and facilitating trade and investment.

Earlier, the G-20 and their guests and international organisations held a plenary session on reforming international financial organisations and administrative mechanisms.

Speaking for ASEAN, as Vietnam holds the chair this year, Prime Minister Nguyen Tan Dung delivered a speech on the global economy and its prospects and challenges.

He said that ASEAN member countries have recently achieved a considerable degree of economic recovery after the global recession, which has helped the Asian economy to recover as well the world’s economy.

He noted that the world has weathered the worst of the storm but not yet gotten to the root of the global financial crisis, which could be disastrous if an additional crisis occurs on a national and international scale, in both developed and developing countries.

He said that ASEAN urged the G-20 to continue concentrating on the fundamental and long-term issues in its policies and measures, referring to the development of sustainable economic models of growth, settling development matters, narrowing the development gap, dealing with climate change and food and energy security.

Discussing protectionism and the facilitation of trade and investment, PM Dung voiced the group’s concern about the slowness of the Doha talks and called on the G-20 to take the lead in speeding up efforts to complete the talks as soon as possible.

He said that ASEAN praised the G-20’s strong opposition to all forms of trade and investment protectionism and asked the group to continue taking measures to outlaw barriers on trade and foreign direct investment while supporting the G-20’s measures to facilitate trade and investment.

PM Dung delivered ASEAN’s proposal that it will work together with other blocs, such as the EU, NAFTA, AU and the G-20 to compile and issue a joint statement to express a determination to complete the Doha talks within the next 12 months.

Touching on the reform of international financial institutions, PM Dung emphasised Vietnam’s and other ASEAN members’ high evaluation of the initiatives and endeavours to increase the transparency and efficiency of international financial institutions.

He praised these financial institutions for assisting development banks in the region, which has enabled them to continue aiding developing countries in terms of capital, experience and technical assistance, so they can deal with macro-economic uncertainties.

PM Dung suggested that international and regional financial institutions step up the provision of assistance to developing countries when completing their millennium development goals.

He urged the WB in particular to prioritise initiatives that support the fight against climate change and improve its capacity to coordinate financial resources in the field.

ASEAN’s representative also underlined the need to enhance cooperation and policy consultations between international financial institutions and regional organisations to make these institutions’ operations more effective.

Source: VNA

Source: QDND

World leaders meet to thrash out recovery plans

In Uncategorized on June 27, 2010 at 12:46 pm

The leaders of the world’s most powerful countries were to pursue talks Sunday on settling their differences over how to nurse the fragile world economy back to health.

Britain’s Prime Minister David Cameron, left, and U.S. President Barack Obama, right, reach out to shake hands during their bilateral meeting on the sidelines of the G20 summit in Toronto, Saturday, June 26, 2010

The G20 nations convened in the eastern Canadian city of Toronto on the heels of a tough-talking G8 summit, in which the world’s major industrialized powers laid down the law to rogue operators Iran and North Korea.

US officials called on leading economies to focus on a return to growth, in a move set to pit the world’s top economy against European nations some of whom have ordered spending cuts to slash back public deficits.

“This summit must be fundamentally about growth, and our challenge, as the G20, is that we all need to act to strengthen the prospects for growth,” US Treasury Secretary Timothy Geithner told reporters.

He took a swipe at powers like Germany, Britain and Japan that he fears have moved too quickly towards budget cuts.

“It’s fair to say that I don’t think that you’ve seen from those countries yet a set of policies that would, again, give everybody confidence that you’re going to see stronger domestic demand growth,” he said.

The G20 talks opened late Saturday with battle lines being drawn as members disagreed over the balance to be struck between reducing budget deficits and encouraging growth and spending.

“If it sounds like everyone is rushing to the exit it might cause problems,” a senior G20 official told AFP, summarizing the concerns of the United States and many emerging powers that Europe’s new parsimony could stifle growth.

Brazil warned Europe’s plans to radically cut government spending would hurt emerging economies, comments echoed by UN chief Ban Ki-moon.

“If the cuts take place in advanced countries it is worse, because instead of stimulating growth they pay more attention to fiscal adjustments, and if they are exporters they will be reforming at our cost,” said Brazilian Finance Minister Guido Mantega.

Ban also warned the G20 working dinner that the challenge facing the group had changed from when it first came together in Pittsburgh in September.

“Let me emphasize this evening that, under any circumstances we must not balance budgets on the backs of the world’s poorest people,” he said.

He called for greater investment in agriculture and the green economy which could help fuel jobs.

France’s President Nicolas Sarkozy stuck up for Europe, insisting there was no deep trans-Atlantic rift on the deficit issue.

“I’ve heard Obama say how important it is to support sustainable policies, including for the United States, he has indicated quite clearly the risk posed by deficits and debt,” he told reporters.

Signs also emerged that the US position may not be as firm as it seems.

The New York Times on Sunday cited US administration officials as saying that despite the Obama administration’s public pitches for more stimulus measures, the United States will go along with other leaders who are more concerned about rising debt and join in a commitment to cut their governments’ deficits in half by 2013.

At the end of two days of talks in an exclusive resort north of Toronto, the leaders of the Group of Eight richest nations acknowledged in their final statement that economic recovery remained “fragile.”

The leaders of Britain, Canada, France, Germany, Italy, Japan, Russia and the United States also took a tough stand on pressing international problems.

They demanded Iran reveal the extent of its nuclear program in transparent talks, condemned North Korea’s alleged torpedo attack on a South Korean warship and urged Afghanistan to boost efforts to take charge of its security.

In bilateral talks US President Barack Obama concentrated on ties with Asia, meeting China’s Hu Jintao and assuring his South Korean counterpart Lee Myung-Bak that Washington would stand “foursquare behind” Seoul in its standoff with the north.

Security remained tight, and the G20 leaders’ arrival in Toronto was marred by clashes between so-called “black bloc” anarchist protesters and vandals, who broke away from a large, peaceful protest.

At least three police cars were set ablaze and riot officers arrested 75 people, resorting to tear gas to protect the steel and concrete barricade shielding the downtown conference venue.

Canada spent more than a billion dollars to secure this week’s back-to-back G8 and G20 summits, hoping to avoid the serious street battles that have marred recent gatherings of such global forums.

Source: SGGP

IATA meets as airline industry shows signs of recovery

In Uncategorized on June 6, 2010 at 10:19 am

BERLIN (AFP) – The commercial aviation industry, battered by plunging sales and fallout from the Icelandic ash cloud, is at last emerging from a steep downturn, the International Air Transport Association (IATA) says.

“We are meeting as the industry continues its recovery from the global financial meltdown,” IATA general director Giovanni Bisignani said ahead of its general assembly starting Monday.

The organisation represents 230 airlines that account for 93 percent of commercial air traffic.

Staff hand out folding chairs to passengers as they wait for information at Manchester Airport, in northwest England after it was closed because of an Icelandic ash cloud in May. AFP file

The pace of the sector’s recovery has been slowed by the eruption in April of an Icelandic volcano, which spread an ash cloud over Europe that brought commercial air travel to a standstill for a week.

International passenger traffic, after rising 10.3 percent in March, showed only a 2.4 percent gain in April.

Bisignani said however that the strong growth recorded prior to the volcano eruption presages a sustained recovery.

“It is finally time for some cautious optimism,” he said.

IATA estimates that the global civil aviation industry lost 9.4 billion dollars (7.8 billion euros) last year, with Europe accounting for 3.8 billion dollars.

The Franco-Dutch airline Air France-KLM last week reported a 4.3 percent gain in traffic in May.

“If this year we see no growth, it is possible that we will be able to regain momentum in 2011,” company chief executive Pierre-Henri Gourgeon said.

“In 2012, the air transport industry will be at a level that will exceed that reached before the (2008 global financial) crisis.”

Industry analyst Christophe Menard of Bryan, Garnier and Co. said that “overall, the trend has been positive over the last months.

“We will incorporate signs of recovery starting in the second half of the year and … should be at the top of the cycle in two years.”

Airlines have taken account of recovery prospects and have told manufacturers they planned to take delivery of aircraft as scheduled in 2011.

Results in the first quarter of the year improved, notably in Asia and North America, according to IATA. The first quarter is traditionally the weakest of the year.

“Airlines typically make 80 percent of their earnings in the second and third quarters,” IATA noted.

Menard said recent airline mergers in the United States should help absorb excess capacity.

At research group Oliver Wyman, analyst Olivier Fainsilber stressed that the economic recovery could prompt an increase in business travel and sales of flexible tickets at higher prices.

“This should be a fillip to generalist companies that have continued to offer a wide range of flight schedules during the crisis but without getting the benefit of sales of flexible tickets,” he said.

Source: SGGP