Finance Blog number 1

The CEOs of top performing local public companies received much bigger pay raises in 2009 than the CEOs of top performing companies in 10 major cities nationwide, according a new study.

The study by BDO USA LLP, a professional services firm, looked at the relationship between the change in total CEO compensation (including salary, bonus, stock options, etc.) between 2008 and 2009 and the total shareholder return of the company over the same year.

It found that the 25 top performing D.C.-area companies posted a median increase in shareholder returns of 85 percent, significantly lower than the median for top performing companies nationwide of 98 percent. Yet the CEOs of those local companies got a 37 percent increase in compensation, compared to just a 5.5 percent increase for CEOs of top performing companies nationwide. Local CEO pay hikes were second only to those of Atlanta CEOs, who received a 45 percent bump in compensation.

The CEOs at the 25 worst-performing public companies in the D.C. area also fared a bit better than their under-performing brethren nationwide.

Shareholder returns at the lowest-performing local companies decreased by a median of 5 percent, while their CEOs took a 4 percent pay cut — equivalent to 80 percent of the decline in shareholder returns. Nationally, the bottom-performing companies saw shareholder returns drop 10.5 percent, while CEO pay fell 9 percent — equivalent to 86 percent of the decline in shareholder returns. This means local under-performing CEOs didn’t receive as big a pay cut, relative to their performance, as underperforming CEOs nationwide.

“Tying pay to company performance is critical now more than ever given the increased scrutiny both from regulators and shareholders,” said Randy Ramirez, Northeast regional leader of the compensation and benefits practice at BDO in a statement. “Our analysis shows that top performing companies in Washington, D.C., are more rigorous than their poor performing counterparts when it comes to developing a performance-based strategy for CEO compensation. However, there are still some notable gaps. Performance cycles do not coincide with changes in company tactics and performance measures do not accurately reflect changes in operational focus.”

The Washington Business Journal conducted a smaller compensation study in May which found that CEO compensation at local financial services companies declined 39 percent in 2009, despite an improvement in company performance.

Here are the breakdowns on CEO pay for performance at companies in the 10 largest cities nationwide, according to the BDO study:

Top 25 performing companies

City / shareholder return / CEO pay increases

1. New York / 243 percent / 10 percent
2. San Francisco / 155 percent / -14 percent
3. Houston / 152 percent / 5 percent
4. Dallas / 135 percent / 6 percent
5. Miami / 109 percent / 2 percent
6. Boston / 86 percent / 1 percent
7. D.C. / 85 percent / 37 percent
8. Atlanta / 74 percent / 45 percent
9. Chicago / 63 percent / 4 percent
10. Los Angeles / 58 percent / 10 percent

Bottom 25 performing companies

City / shareholder return /CEO pay increases

1. San Francisco / 4 percent / -9 percent
2. Miami / -1 percent / 0 percent
3. D.C. / -5 percent / -4 percent
4. Atlanta / -7 percent / -25 percent
5. Chicago / -10 percent / -9 percent
6. LA / -11percent / 2 percent
7. Dallas / -13 percent / 0 percent
8. Boston / -13 percent / -10 percent
9. Houston / -19 percent / -10 percent
10. New York / -27 percent / -17 percent

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Pennsylvania has received a dozen AmeriCorps grants totaling $9 million, which will create up to 2,200 community service positions in the state, the Department of Labor & Industry said Friday.

PennSERVE: The Governor’s Office of Citizen Service will distribute seven state grants totaling more than $5.3 million, which will create more than 1,700 positions. Five national grants totaling more than $3.9 million will also be awarded to multistate programs operating in the state, with the support of PennSERVE, which will create up to 480 additional AmeriCorps positions, the department said.

“These grants create thousands of opportunities for individuals to make a difference in their communities through citizen service,” Labor & Industry Secretary Sandi Vito said. “From tutoring and mentoring, to renovating residences and community cleanup, the work carried out by these organizations will have an immediate and positive effect on our neighborhoods and residents.”

Grants funded through PennSERVE have been awarded to the following, which serve counties in the local area:

• Jumpstart for Young Children Inc. (Allegheny and Philadelphia counties), $320,453 grant, will create 174 positions, AmeriCorps members serve in preschool settings, including Head Start, faith-and community-based centers to engage students in learning activities

• Trustees of the University of Pennsylvania, $50,722 grant, will create 287 positions, college students will serve as AmeriCorps members at nonprofit organizations to support local education and other human needs that target various beneficiaries throughout the state, including Chester, Delaware, Montgomery and Philadelphia counties.

• City Year Inc., $2,415,000 grant, will create 210 positions, AmeriCorps members provide in-school tutoring and after-school services in Greater Philadelphia area schools.

• Teach For America, $802,497 grant, will create 330 positions, AmeriCorps members will provide classroom instruction and enrichment activities focused on overcoming the achievement gap for schools through education and volunteer generation in under resourced communities in Philadelphia County cash till payday advance.

National direct-funded grants have been awarded to the following, which serve counties in the local area:

• HOPE Worldwide, $298,101 grant, will create 94 positions, AmeriCorps members provide direct service and perform capacity-building activities in three primary programmatic areas that focus on academic enrichment, environmental stewardship and community rebuilding in Delaware County.

• Health Federation of Philadelphia, $1,198,486 grant, will create 94 positions, the National Health Corps promotes health careers and health education in Pennsylvania, Illinois and Florida. Members assist uninsured individuals with accessing health care, resources and assist with enrolling the uninsured in insurance and/or drug prescription programs.

• Philadelphia AIDS Consortium, $374,070 grant, will create 60 positions, AmeriCorps members will provide health education and support services and mobilize volunteers for programs that target low-income minorities living with, and affected by, HIV in Pennsylvania, New Jersey, Delaware and California.

• Temple University of the Commonwealth System of Higher Education (Philadelphia), $247,619 grant, will create 90 positions, AmeriCorps program addresses health literacy needs of elders, elderly immigrants and refugees through service learning, civic engagement and tutoring. Project assists elderly immigrants and refuges in communication with health-care providers. Members support the target population’s access to health services and strengthen immigrant-serving organizations’ ability to address the needs of this growing population.

AmeriCorps was able to add 500 people to its ranks in Pennsylvania last year through the help of funding from the American Recovery and Reinvestment Act.

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Henry Paulson and Timothy Geithner, two key players in the government’s bailout of the financial system, said Thursday that steps should be taken to shed light on the darker corners of Wall Street in order to prevent another crisis from happening.

Paulson, who was Treasury Secretary at the height of the 2008 financial meltdown, and his successor, Geithner, who was president of the Federal Reserve Bank of New York at the time, both testified before the Financial Crisis Inquiry Commission in Washington.

The commission, which is holding a series of hearings this year to investigate the causes of the crisis, is probing unconventional and lightly regulated lending practices known as "the shadow banking system."

"The lesson of this crisis, and of the parallel financial system, is that we cannot make the economy safe by taking functions central to the business of banking, functions necessary to help raise capital for businesses and help businesses hedge risk, and move them outside banks, and outside the reach of strong regulation," " Geithner said in prepared remarks.

Geithner said the parallel, or shadow, banking system grew rapidly over the last few decades, reaching about $8 trillion in assets at its peak and rivaling the traditional banking system.

But the nation’s regulatory framework, which is designed to limit excessive-risk taking in a traditional setting, did not keep pace with the innovations in the shadow banking system, he said.

As the crisis intensified, Geithner added, the system became instable and investors panicked. In response, the government implemented "aggressive policy measures" to avert a second Great Depression, he said.

"This was a pure failure of market discipline," said Geithner, referring to the rapid buildup of risk in the shadow banking system. If regulators had broader authority to curb risky bank behavior, "such a large emergency response would not have been necessary."

"That is a key reason why financial reform is necessary," he said.

The Senate on Wednesday took a major step forward in the push to create a Wall Street reform package by approving a bipartisan deal to unwind big financial firms that are considered too big to fail. But lawmakers are still debating a number of other proposals, including new rules for the derivatives market and new consumer protections.

While Paulson’s testimony echoed many of Geithner’s comments, the former Treasury Secretary and Goldman Sachs alum cautioned against over-regulating the non-traditional banking system.

The shadow banking system, which he described as large credit and capital markets, helps provide short and long-term funding for municipal governments, corporations and individuals savings account payday loans. These credit markets "have greatly benefited our nation, spurring growth and prosperity at all levels of our economy," he said.

Paulson acknowledged that the system was marred by "global excesses and regulatory flaws," but he said lawmakers should not throw the baby out with the bathwater.

"In our haste to deal with the flaws in the non-bank financial system, we should not move ourselves back to a system of consolidated, monolithic commercial banks," said Paulson.

Still, Paulson identified four areas where tighter regulation is needed, including securitization, commercial paper, derivatives and money market mutual funds.

Paulson also took the opportunity to offer his explanation of the factors that led up to the crisis. He said the housing bubble, at the heart of the problem, was exacerbated by government policy and irresponsibility on the part of both borrowers and lenders, namely Fannie Mae and Freddie Mac.

But the crisis was also rooted in imbalances in global capital flows, over-leveraged financial institutions, poor consumer protection and "an archaic and outmoded financial regulatory system," he said.

"Many mistakes were made by all market participants, including financial institutions, investors, regulators, and the rating agencies, as well as by policy makers," said Paulson.

He supported the steps policy makers have taken to safeguard the system, but added that risks remain. "A number of the root causes are not being addressed and remain sources of danger to our country," Paulson said.

The testimony came one day after the commission heard from former Bear Stearns executives, including the former chief executive, James Cayne, who argued that the failure of the Wall Street bank was due to market volatility, spurred by unfounded speculation, and not risky behavior.

In his comments Thursday, Geithner said Bear Stearns and Lehman Brothers, two of the main casualties of the crisis, were among the main players in the market for overnight repurchase, or "repo," agreements, asset-backed commercial paper and other structured investment vehicles that make up the shadow banking system.

Bear Stearns was crippled in March 2008 as investors and creditors fled the bank amid fears about its exposure to risky mortgage-backed securities. The investment bank was bought by JPMorgan for about $2.2 billion, or $10 a share, in a fire sale orchestrated by the government.

Lehman Brothers, meanwhile, became the largest bank failure in history when it succumbed to losses in September 2008. 

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Advanced Micro Devices Inc. said Thursday that it would see a $325 million non-cash gain in the quarter ended March 27 from its spinoff of GlobalFoundries Inc.

AMD launched its former manufacturing business as GlobalFoundries in March 2009. The spinoff was done as a joint venture with Abu Dhabi-based Advanced Technology Investment Corp. AMD owns 34.2% of the venture.

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Sun Hung Kai Properties Ltd., the world’s biggest developer by market value, won Hong Kong’s first land auction of the year with a bid that exceeded most analysts’ estimates after selling 900 homes over the weekend as demand for property in the city surges.

The shares closed 2 percent higher after the developer paid HK$3.37 billion ($434 million) for the site in the eastern Tseung Kwan O district. The company raised HK$4.2 billion in a weekend apartment sale that attracted 120,000 prospective buyers in the city of 7 million.

The land auction and the weekend sale fanned speculation a bubble is forming in Hong Kong’s housing market, where home prices surged 29 percent in 2009 as low interest rates and an increase in buying by mainland Chinese stoked demand. Norman Chan, chief executive of the Hong Kong Monetary Authority, told lawmakers Feb. 1 that the city faces a “huge” potential risk of bubbles forming in its asset markets given high liquidity.

“The outcome is positive for the Hong Kong property market,” said Eva Lee, a Hong Kong-based property analyst at Macquarie Securities Ltd. “People expect 2010 won’t be an easy market given the strong growth last year, but the auction has reinforced their confidence.”

Sun Hung Kai spokeswoman Brenda Wong confirmed the company made the winning bid today. Price estimates for the auction ranged from HK$2.6 billion to HK$3.4 billion, and the median projection of five analysts Bloomberg News surveyed by phone and e-mail was HK$2.9 billion.

‘Reasonable’

Hong Kong is trying to ease a shortage in land supply and new properties that developer Cheung Kong (Holdings) Ltd. said last month may help raise home prices by as much as 20 percent this year.

Sun Hung Kai paid a “reasonable” price for the site, Victor Lui, executive director of Sun Hung Kai’s real estate broker, said by phone today. The price paid was “higher than expected but reasonable,” he said, adding he is “positive” about the outlook for the property market.

Sun Hung Kai plans to invest HK$6.5 billion on the plot of land in a medium-sized residential project, which may take between three and four years to complete, Lui said.

The developer at the weekend sold 900 apartments at the Yoho Midtown apartment complex in northwestern Yuen Long district for an average HK$5,400 per square foot, Amy Teo, Sun Hung Kai project director, said. That compares with an average HK$3,000 per square foot for new homes in the area a year ago, according to Wong Leung-sing, an associate director at Centaline Property Agency Ltd.

Crowds Attracted

“All the ingredients are in place for a property bubble in Hong Kong, including low interest rates and limited supply, but I don’t think we are in one yet,” said Buggle Lau, chief property analyst at Midland Holdings Ltd. “If more speculators enter the market then it could push prices up too high.”

The city had the world’s fastest-growing major housing market last year, according to a survey compiled by real-estate agents Knight Frank LLP.

Some 120,000 prospective buyers have flocked to the show homes since Feb. 19, Teo said, speaking at the display properties set up in a shopping center near the apartment complex in the city’s New Territories. Sun Hung Kai increased the number of apartments on sale to 900 from 700 because of demand, she said. The building complex has a total of 1,890 homes, according to Teo.

About 40 units were immediately advertised for resale at asking prices of as much as 20 percent more than the original costs of purchase, the South China Morning Post newspaper reported, citing property agents.

Supply

The number of private homes completed in Hong Kong last year fell 18 percent to 7,200 units, the lowest since 1997, the government said in a report Jan. 22.

The city’s home sales more than doubled in value in January from a year earlier to HK$36.2 billion, according to figures released by the government’s land registry. Sales gained 4.1 percent last month from December, the agency said.

The authority, Hong Kong’s de facto central bank, raised deposit levels for luxury apartments in October to try to cool lending. The government also plans to raise stamp duty, or transaction tax, on homes selling for more than HK$20 million to 4.5 percent from 3.75 percent in a bid to rein in the property market, the Chinese-language Sing Tao Daily said Feb. 11.

“Government intervention could lead to higher interest rates, but I can’t see mortgage rates much above 2.5 percent this year, which is unlikely to deter some buyers,” said Midland Holdings’ Lau.

Prices may rise as much as 15 percent in the first quarter, Centaline’s Wong said. Hong Kong’s Chamber of Commerce forecasts the city’s economy may grow between 3 percent and 4 percent this year.

“Given that the U.S. is unlikely to raise interest rates sharply and the yuan is under appreciation pressure, Hong Kong property prices may have substantial growth this year, but there is also a risk of a bubble,” said Benny Wong, executive director at Hong Kong-based Pan Asian Mortgage Advisory Company Ltd. “I expect the Hong Kong government will increase land supply this year in response to the high prices.”

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China is likely to soon overtake Japan to become the world’s second largest economy, a milestone that will only fuel growing fears about the economic might of the world’s largest country.

China’s economy grew by 8.7% in 2009, even in the face of a global economic slowdown. Japan, which will report its full-year numbers on Feb. 14, is expected to slip behind China due to the steep decline in its economy in the first half of last year.

Both China and Japan are likely to end the year with a gross domestic product, the broadest measure of economic activity, of just over $5 trillion. To put that in context, that’s only a little more than a third of the size of the U.S. economy.

But with its huge population edge on the United States, many economists believe it is inevitable that China will eventually overtake the United States — even if it takes another 20 or 30 years.

"It’s kind of like the U.S. and Great Britain 125 years ago. Given how much larger we were, it was only a matter of time before we caught them," said Jay Bryson, global economist for Wells Fargo Securities. "And it’s only a matter of time before they catch us."

But there are still many limitations on China’s growth prospects. For those who are scared that the U.S. will fall behind its Chinese rivals sooner rather than later, it’s useful to think back a bit more than 20 years, when Japan was considered a similar threat to U.S. economic dominance.

John Makin, a visiting scholar specializing in Asian economies at the American Enterprise Institute, pointed out that in the late 1980s, Japan was "viewed as the unstoppable force."

Since then the Japanese economy has struggled mightily, suffering through the so-called "Lost Decade" of economic decline followed by a period of only weak growth after that.

Of course, there are differences between Japan in the late 1980s and China today. Most notably, Japan was already a fully developed economy two decades ago.

China is still an emerging economy, feeding off the growth that comes from massive public works projects designed to catch-up to the infrastructure already found in the United States, Europe and Japan, as well as consumers entering the middle class eager to buy their first car or household appliance personal business card.

Echoes of Japan’s problems. But there are plenty of similarities as well.

There are signs of a developing asset bubble in China’s housing and equity markets. China’s banking system has been dogged by questions about its transparency. There is also a dependence on exports that are supported by the government’s manipulation of the currency and limits on population growth.

All were factors in Japan’s troubles over of the last two decades.

The last year shows one of the problems with a country whose economy is greatly export driven. When the global recession hit, China’s exports were not spared, and it took about $586 billion in government spending, to fill the gap.

That turned out to be a much bigger share of China’s GDP than all the various bailouts and stimulus packages in the United States.

Lakshman Achuthan, managing director of Economic Cycle Research Institute, said China’s exports, driven by its cheap currency, makes it vulnerable to even lower-cost developing economies.

"A ‘Lost Decade’ is not an immediate issue for China, but they need to shift away from export dependence," he said.

Adding to these risks is the obvious fact that China is still a communist country where the government, rather than free markets, makes many decisions on the allocation of capital and resources. The free flow of information is also limited.

Most Western economists would argue that this it not conducive to long-term economic growth, even if government control of economic decisions can help to boost output in the short-term.

"It’s a bit like a very powerful but inefficient engine," said Makin. "They need to develop a way to allocate resources and capital that’s not driven by not a bunch of central planners." 

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Democratic leaders have told Oregon Gov. Ted Kulongoski they won’t craft legislation that would change Oregon’s kicker laws.

Kulongoski said in a release late Thursday that leaders “do not intend to refer kicker reform and an emergency reserve fund to the November ballot during this special session, or anytime this year.”

The decision means residents will continue to collect refunds when money collected in Oregon’s general fund exceeds projections the state makes every two years.

It also means a major effort to restructure the state’s revenue system, a primary Kulongoski goal, won’t happen during the governor’s term. Kulongoski leaves office Jan. 1.

Kulongoski and several lawmakers from both sides of the aisle sought to change the kicker rules in order to build state reserves, then use that money to help defray effects from recessions and economic downturns.

Critics of the kicker say that because money is returned to state residents instead schools and public safety programs face peril when Oregon’s economy goes south no fax payday loans.

Kulongoski broached kicker reform as an olive branch to opponents of two tax measures that Oregon voters passed on Jan. 26.

“This decision by legislative leadership is disappointing and a missed opportunity for the people of Oregon who strongly support using a portion of the kicker revenues to build an adequate reserve for critical services,” Kulongoski said in his statement.

Kulongoski went as far to say that kicker reform is the Legislature’s most important issue during the short session, which will end around March 1.

“Oregonians deserve the opportunity to establish an emergency reserve fund in our state constitution that will help provide fiscal stability and certainty in the state’s budgeting process,” he said. “The people of Oregon deserve better.”

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Federal Labour Minister Rona Ambrose is urging the union representing striking Canadian National Railway locomotive engineers to accept binding arbitration as management tried to keep the trains running Saturday.

Ambrose said in a statement she’s "disappointed" the Teamsters union and CN couldn’t reach an agreement before some 1,700 engineers across the country walked off the job Friday at midnight.

Despite sharing several railways in the GTA, CN representatives say GO Transit will not be affected by the engineers strike.

Ambrose said CN has already agreed to binding arbitration and the government is ready to appoint an arbitrator once the union gives its approval.

The Teamsters did not immediately respond Saturday to Ambrose’s statement.

The union has said a strike could have been postponed had the railway agreed to negotiate and not impose a 1.5 per cent wage increase and new mileage caps.

CN made contractual changes after three days of negotiations broke off Nov. 20 following 14 months of talks.

The Teamsters Canada Rail Conference (TCRC) responded by issuing a 72-hour strike notice, saying CN was effectively locking out employees by unilaterally changing the terms of the collective agreement.

TCRC president Daniel Shewchuk said in an interview Saturday that while the union made "substantial movement" during Friday’s talks, the railway wouldn’t budge.

The union has said raising the mileage cap – the maximum distance engineers can travel in one month – by 500 miles to 4,300 mileswould require some workers to work seven days a week, with no time off, and cause layoffs. CN says its locomotive engineers work on average 37 hours a week, and the new cap would increase that to 41 hours.

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Delta Air Lines Inc. has renewed its vendor contract with gategroup, parent company of food contractor Gate Gourmet.

The multi-year extension, valued at more than $1 billion in revenue over the life of the contract, also involves gategroup subsidiaries Gate Safe, eGate Solutions, Pourshins and deSter, the company said in a Wednesday news release.

“Delta is a leading customer for gategroup and its brand companies and has been for more than 50 years,” Guy Dubois, gategroup CEO, said in a statement. “We're delighted to call the world's largest airline one of our top customers. The scope of this business validates gategroup's strategy of building a brand portfolio that provides end-to-end solutions to the travel industry, and demonstrates the cross-selling power of the brands.”

The deal with Atlanta-based Delta (NYSE: DAL) covers 40 airports worldwide and expands catering service to airports in Amsterdam, Fort Lauderdale, Fla electronic check payday advance., Los Angeles and Newark, N.J.

Gate Safe, the catering screening and security subsidiary of Zurich-based gategroup, will expand to serve all Delta, Northwest and Delta Connection stations currently served by Gate Gourmet in the U.S.

The contact also extends agreements with eGate and Pourshins, the company’s in-flight catering management and food, beverage and equipment sourcing and logistics arms.

"Consistency of product delivery is a key component of Delta's brand experience for our customers," Joanne Smith, Delta senior vice president of in-flight services, said in the release. "The complete integration of catering solutions is another important step in bringing together the best of Delta and Northwest."

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Thailand’s economy probably contracted the least in a year last quarter as a nascent global recovery and government spending began to pull the nation out of its first recession in a decade.

Gross domestic product fell 3.2 percent in the third quarter from a year earlier, after contracting 4.9 percent in the previous three months, according to the median estimate of 16 economists surveyed by Bloomberg News. The government will release the data on Nov. 23 at 9:30 a.m. in Bangkok.

The benchmark stock index has risen two straight quarters since the start of April and the baht gained 4.5 percent against the U.S. dollar this year as companies including Hana Microelectronics Pcl report rising orders. Prime Minister Abhisit Vejjajiva said yesterday the government will pursue its stimulus spending plans amid lingering “political problems.”

“A gradual global recovery, fiscal stimulus packages and easy money policy are resulting in improved GDP performance,” said Luz Lorenzo, an economist at ATR-Kim Eng Securities Inc. in Manila. “The improvement will be gradual. This is barring any grave political developments.”

Singapore, which raised its 2009 GDP estimate in October, said yesterday its economy will grow 3 percent to 5 percent in 2010 after shrinking as much as 2.5 percent this year. Malaysia may report today that its recession eased last quarter, according to a Bloomberg News survey.

Interest Rates

The Bank of Thailand said last month Southeast Asia’s second-largest economy is “out of recession”, citing improving employment and quarter-on-quarter GDP expansion. Still, the central bank refrained from raising borrowing costs for a fourth straight meeting on Oct. 21 as it judged the nation’s economic recovery to be at “an early stage.”

There may be cause to keep interest rates low for a while as economists including Morgan Stanley Asia Chairman Stephen Roach say the global recovery faces risks.

“My outlook remains extremely cautious although we can see the worst is over” for the global economy, Roach said in Singapore today. Asian economies are still too export dependent, he said.

Thailand’s consumer confidence fell for the first time in five months in October on concern that the economic recovery may be derailed by rising oil prices, politics and a court case that has stalled 76 government-approved projects on pollution complaints.

Political Risk

At least five people were injured after a bomb exploded at a Nov. 15 protest against former Prime Minister Thaksin Shinawatra, the Nation newspaper reported this week. Power in Thailand has shifted between parties allied to Thaksin and his opponents since the 2006 coup that ousted him, with protests and leadership changes hurting successive governments’ ability to implement spending plans.

Abhisit’s government has managed to stay in power for almost a year and implemented a 116.7 billion-baht stimulus package in the first half of 2009. It plans to spend 1.3 trillion baht on transportation, logistics, health and education projects over three years to help revive the economy.

The fiscal spending helped “stop the economic contraction” and prevented unemployment from jumping, Abhisit said Nov. 16.

“Our only concern is politics,” said Santi Vilassakdanont, chairman of the Federation of Thai Industries. “If the political stability continues like this, the economy can move ahead. If not, things may turn bad again.”

Return to Growth

The government expects the Thai economy to return to growth this quarter. Thailand’s exports dropped the least in 11 months in September as more than $2 trillion in stimulus by governments worldwide helped revive global demand.

Hana Microelectronics, which makes parts for computers and mobile phones including Apple Inc.’s iPhone, has restored its workforce to “pre-crisis” levels and will spend about $20 million by March 31 to expand capacity and meet rising demand, Chief Executive Officer Richard Han said.

“We continue to see robust demand,” said Han. “We expect the fourth-quarter performance to be an improvement over last year.”

The central bank has kept its benchmark interest rate unchanged at 1.25 percent since cutting it by 2.5 percentage points from December to April. Thai consumer prices rose for the first time in October after falling for nine consecutive months.

“The recovering global economy will lead to improving exports and tourism,” Abhisit said yesterday. “The government is also committed to spend money under our stimulus plan. Everything still goes as planned despite political problems” that may persist into next year, he said.

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