Finance and Economic

In an aggressive effort to highlight their growth and health at a time of challenge for all publishers, The Business Journal Serving Greater Milwaukee and the 39 other papers in the American City Business Journals group this week took a novel approach to tell their story: All 40 business journals printed a four-page “wrap” around their papers filled with statistics and testimonials from readers in their local markets, detailing the niche their papers fill in each of their communities.

To see the wrapper, click here.

The testimonials highlighted ways that their papers have connected them to new sales, new jobs, and new ways to grow their businesses, and most recently, ways to tap government stimulus dollars. The national campaign cites statistics that include recent numbers for paid circulation, time spent reading business journals, and event attendance.

Collectively, the papers gained in paid circulation by 3.85 percent between 2005 and 2009, while daily newspapers in those same markets lost 18.81 percent in the same years, according to Audit Bureau of Circulations publisher statements. From 2007 to 2009 alone, the ACBJ circulation growth totaled 2.7 percent, according to ABC figures.

Nationally, ACBJ readers spend an average of 50 minutes reading their local business journal each week, according to media audits.

And through 2009, about 175,000 business leaders have attended business journal events across the country.

The campaign has linked the papers together under a single message that asks, “Who Do You Want To Meet Today?” That message centers on the way each paper connects business leaders with each other, via print, in person, at events, or online through the bizjournals pay day loans.com network of local business journal sites.

ACBJ newspapers reach 4 million readers each week with in-depth coverage of their business communities. ACBJ cites recent research as evidence of the sweet spot it occupies in the media: 83% of all business news is local. Further, the company attributes it commitment to exclusive, top-quality journalism as vital to its success.

“No one in the local business community is more connected, more aware, more in touch than business journals are,” says ACBJ CEO Whitney Shaw, in a Q&A offered in each paper’s four-page wrap. “We're giving vital, up to the minute information to corporate executives, small business owners, community leaders, to virtually anybody who has a stake in the economy. And we're giving that information with a depth they can't get anywhere else.”

ACBJ is a unit of Advance Publications Inc., which also operates Conde Nast Magazines, Parade magazine, Fairchild Publications, the Golf Digest companies, Newhouse Newspapers and cable television interests.

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South Korea’s won, Asia’s second best-performing currency this year, may be “affected” as the nation’s current-account surplus narrows by about 50 percent in 2010 and capital inflows slow, a central bank official said.

The surplus, forecast to widen to more than $40 billion this year, will decrease by “half next year as domestic demand revives, imports increase and oil prices continue a modest rise,” Ahn Byung Chan, head of the international bureau at the Bank of Korea, said in an interview yesterday. Inflows of investment may be slowed by the global financial crisis, he said.

“The unrest in the international financial markets won’t evolve into a systemic risk but if the wobbles are prolonged, the Korean won rate will be affected,” Ahn said, declining to comment on any level or direction for the currency. “Capital inflows won’t be larger than this year.”

Finance Minister Yoon Jeung Hyun said in October it is “premature” to unwind expansionary policies as the nation still faces risks from a possible delay in the global economic recovery and asset price instability. Exporters helped drive acceleration in economic growth to 2.9 percent last quarter from the previous three months, the fastest pace in seven years.

“This is probably mostly an attempt to talk down the won,” said Dariusz Kowalczyk, chief investment strategist at SJS Markets Ltd. in Hong Kong. “A lot of the economic pickup this year has been due to the earlier won weakness. They wouldn’t want to lose the edge the currency has provided.”

Bullish Forecasts

The won was little changed at 1,155 per at 9:16 a.m. in Seoul, according to data compiled by Bloomberg. It touched 1,149.4 on Nov. 17, the strongest level since September 2008. The currency strengthened 9 percent this year, second in Asia only to the 16 percent gain in the Indonesian rupiah.

The won will rise to 1,070 per dollar by the end of June, Kowalczyk predicted. That is more bullish than the 1,110 median forecast of 22 analysts in a Bloomberg News survey.

The current account swung to a $37 billion surplus in the first 10 months of the year after a deficit of $6.41 billion in 2008, the first shortfall since 1997, central bank data showed. The current account is the broadest measure of trade, tracking the flow of goods, services and investment income.

Foreign-exchange reserves climbed to a record $270.9 billion last month from $264.2 billion at the end of October, the Bank of Korea said yesterday. Reserves slumped to their lowest level in almost four years in November 2008 after the won declined and the global financial crisis made it difficult for companies to refinance overseas debt.

The central bank probably bought dollars to slow gains in the won, Mitul Kotecha, Hong Kong-based head of global foreign- exchange strategy at Calyon, said yesterday.

‘No Complaints’

November’s reserves were boosted by investment inflows and a weaker U.S. dollar which increased the value of holdings in euros and yen. Ahn said the greenback will weaken until the Federal Reserve increases interest rates. He said a stronger greenback won’t necessarily translate to won appreciation.

The competitiveness of Korean companies contributed more to the recovery in exports than a weaker currency, Ahn said. Hyundai Motor Co., the nation’s largest automaker, more than tripled third-quarter profit from a year earlier on a weaker won and surging sales in the U.S. and China.

South Korea’s exports rose 18.8 percent in November from a year earlier, the first increase in more than a year, the Ministry of Knowledge Economy said Dec. 1. Imports rose 4.7 percent, driven by higher consumer spending and fuel costs. Crude oil gained 74 percent this year.

“The Korean won appreciated a lot since March, but still our exports are growing,” he said. “These days there are no complaints among exporters and importers. We decide our exchange rate policy. Their opinion is not important.”

Capital Movements

Foreign investors bought $22.9 billion more local shares than they sold this year through yesterday, helping drive the Kospi stock index 42 percent higher. Stocks fell 4.7 percent on Nov. 27 after Dubai World sought to delay payments on its debt.

“Any similar case to the Dubai shock will slow the inflows,” Ahn said. “A rise in stock prices towards 1,600 reduces incentives for foreigners to jump in.”

South Korea may discuss measures to address inflows of speculative capital that are causing the currency to strengthen, Kim Jong Chang, governor of the Financial Supervisory Service, said on Nov. 19.

“We will watch the global discussions about imposing taxes on capital movements,” said Ahn. “So far, we think capital inflows haven’t had any side effects on the Korean financial market. We are monitoring it carefully.”

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General Motors Co’s chief executive, Fritz Henderson, abruptly resigned on Tuesday, after the company’s board decided it wanted to chart a new course for the restructuring automaker.

Henderson was asked by the board to step down at a meeting in Detroit after being on the job for just eight months, according to a person with direct knowledge of the matter.

GM Chairman Ed Whitacre, 68, will become interim chief executive as the automaker begins an immediate search for a replacement, the company said.

The announcement of Henderson’s sudden departure underscored the tough oversight being exerted by a slate of new GM directors led by Whitacre and selected by the automaker’s majority shareholder, the U.S. Treasury.

Henderson, 51, became CEO in March after his predecessor, Rick Wagoner, was forced out by the Obama administration as part of the U.S. government-funded restructuring of GM.

“The board decided — and Fritz agreed — that given where we are, it was time to make some changes,” GM spokesman Chris Preuss said at a hastily arranged news conference.

Whitacre, a former AT&T chief executive, became chairman of GM in July as part of a new board vetted by the U.S. Treasury and intended to safeguard the government’s $50 billion investment in the automaker.

The U.S. government has a majority stake in GM, but the Obama administration has repeatedly said that it is leaving oversight of the company to Whitacre and the board.

“This decision was made by the board of directors alone. The administration was not involved in the decision,” a White House spokeswoman said.

WHO’S NEXT?

Whitacre, who became the public face of GM in its first ad campaign after bankruptcy, appeared briefly before reporters at GM’s headquarters in Detroit but did not take questions on why the board had chosen to part ways with Henderson.

Whitacre said Henderson, who helped GM through its July bankruptcy, had “done a remarkable job in leading the company through an unprecedented period of challenge and change.”

“While momentum has been building over the past several months, all involved agree that changes needed to be made,” Whitacre said.

Whitacre, a plain-spoken Texan who said he knew nothing about the auto industry when he became GM chairman, has surprised GM insiders by making unannounced plant visits and putting blunt questions to workers at all levels.

With his move to become GM’s interim CEO, all three U.S. automakers are now headed by outsiders to Detroit. 

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The Treasury Department is expected to meet with lenders on Monday to press them to do more to rework troubled home mortgage loans, a source familiar with the Treasury’s thinking said.

Herbert Allison, the Treasury Department’s assistant secretary for financial stability, is expected to meet with the mortgage servicers, said the source who requested anonymity because the meeting has not been publicly announced.

The New York Times in its Sunday edition quoted Michael Barr, the Treasury Department’s assistant secretary for financial institutions, as expressing dissatisfaction with lenders over the slow pace at which they are amending loan agreements to help borrowers make their monthly payments.

A Treasury spokeswoman said on Saturday the department was taking additional steps to enhance mortgage servicer transparency and accountability as part of a broader focus on maximizing conversion rates to permanent modifications.

The Treasury spokeswoman said that that could include new resources for borrowers and said the department will announce new measures on Monday.

(Reporting by Rachelle Younglai, editing by Matthew Lewis)

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