Financial Freedom. Best business news.

Royal Bank of Canada's Voyageur Asset Management arm will buy some assets of Boston-based Access Capital Strategies, it said Tuesday.

Terms of the transaction were not disclosed. The acquisition is subject to regulatory approvals.

Access Capital, which has more than $650 million in assets under management, serves as an adviser to banks, foundations, endowments and community trusts. It manages the Access Capital Strategies Community Investment Fund, which invests in debt securities that support community development serving low- and moderate-income individuals and communities payday loans.

Voyageur is based in Minneapolis and has $34 billion in assets under management. It said the acquisition will help RBC to build a U.S. presence and increase its activities in socially responsible investment assets.

Source

Inflation is now the biggest threat to the global economy as the credit crisis starts to recede, according to executives and officials who met in Russia over the weekend.

“I don't think anyone has found a silver bullet to deal with inflation,'' Ernst & Young LLP Chief Executive Officer James Turley said in a Bloomberg Television interview in St. Petersburg yesterday. “Consumers are losing confidence. The liquidity crisis and the credit crisis will work themselves through.''

Turley was among 2,300 businesspeople and politicians who gathered in Russia's former imperial capital a day after crude oil prices staged their biggest increase ever. The surge reinforced concern that central banks will need to either raise interest rates or forgo further cuts, even as growth slows.

“If something should wake us up at night, it's the return of this inflationary environment around the world,'' Caio Koch- Weser, Deutsche Bank AG vice chairman and former German deputy finance minister, told the St. Petersburg International Economic Forum, Russia's largest trade and investment fair, on June 7.

European Central Bank President Jean-Claude Trichet said on June 5 that the bank may raise rates as soon as next month. Two days earlier, Federal Reserve Chairman Ben S. Bernanke indicated he's finished cutting for now.

`Very Dangerous'

“We are facing a very dangerous situation caused by these tremendously increasing prices for commodities, food and oil,'' German Finance Minister Peer Steinbrueck told the gathering.

Inflation in the 15 nations using the euro accelerated to 3.6 percent in May, matching a 16-year high reached in March. The International Monetary Fund already estimates inflation to be running at its fastest since 1995 in advanced economies.

UN Secretary-General Ban Ki-moon said last week that the world needs to invest as much as $20 billion a year on agriculture to tackle a 60 percent gain in food prices over the past 18 months that has sparked riots in more than 30 countries.

Even with a coordinated effort, prices aren't going to fall any time soon, the IMF said.

“It's pretty clear that we're not going to see a complete reversal of these prices,'' First Deputy Managing Director John Lipsky told Bloomberg Television. “The challenge is to make sure that doesn't turn into ongoing inflation, or a deterioration in inflation expectations.''

BRICs to the Rescue

As the world's biggest economies slow, many companies are looking for sales growth in emerging markets, in particular Brazil, Russia, India and China, known as the BRICs cash advance loan. Continued economic expansion here will see the nations closing the gap with the U.S. and Europe, Lipsky said.

By the second half, “all the major industrial economies will be growing at a below-trend pace,'' Lipsky predicted. By contrast, growth in emerging market economies “will still be above their 10 or 15-year averages,'' he said.

Goldman Sachs Group Inc. Chief Economist Jim O'Neill, who coined the term BRIC in 2001, forecast China will be the world's second-largest economy by 2020, worth 15 percent of global gross domestic product, against 20 percent for the U.S.

Prolonged growth in BRIC countries and their increased integration with the world economy will help mitigate the damage from the current global downturn, said Muhtar Kent, president and chief operating officer of Coca-Cola Co., the world's largest soft-drink maker.

“With very disciplined economies in the emerging world, compared to four or five years ago — no deficit, lower inflation, fiscal discipline that is in place today, and the general global macroeconomic scene, there is a higher likelihood that we can pass through this with less pain,'' Kent said. He will become chief executive of the company on July 1.

Paramount U.S.

WPP Group Plc, the world's second-biggest advertising company, posted 35 percent growth in Russia last year, making it the company's fastest-expanding market, Chief Executive Officer Martin Sorrell said.

Even so, the influence of the U.S. economy will remain paramount, he said.

“Everything in the end still points to America,'' Sorrell said in an interview. “If America falters, if America sneezes, we'll catch not influenza, but a cold, and it will have an impact even in a place like Russia.''

Coca-Cola's Kent said consumer sentiment, dented by rising prices, is the main factor affecting global economic growth.

“Consumer sentiment is at a lower level in the U.S. now than in the rest of the world,'' he said. “We don't know yet the impact on purchasing power, on demand, in the rest of the world due to the rising price of oil and rising price of food.''

Source

Hawaiian Airlines said Wednesday it will add four Boeing 717-200s to its interisland fleet to meet growing demand.

Two planes will begin service in September while the other two will be in operation by the end of the year.

The move comes in response to the April 1 shutdown of Aloha Airlines.

The four planes, which will increase the carrier's interisland fleet to 15 aircraft, are being acquired under long-term leases from Boeing Capital Corp.

Hawaiian, a subsidiary of Hawaiian Holdings (Nasdaq: HA), flies 150 daily flights among Oahu, Kauai, Maui and the Big Island paydayloans.

The airline has begun recruiting flight crew and additional ground staff to support the expanded operations.

Hawaiian also operates a fleet of 18 wide-body Boeing 767-300 aircraft on 16 flights to 14 destinations outside Hawaii.

Source

China's central bank rejected predictions that exports will collapse because of the U.S. economic slump, signaling policy makers are unlikely to relax lending curbs or stem the yuan's appreciation.

“Some think drastically weakening external demand may lead the economy to a hard landing and that we should loosen policies,'' the bank's financial research institute said in a report e-mailed to Bloomberg News yesterday. Analysis of exports should be objective and “not exaggerated,'' it said, adding that a “drastic'' slowdown in shipments won't come soon.

China has allowed the yuan to gain 5 percent against the dollar this year and told banks to set aside more reserves four times as it battles inflation near a 12-year high. The report shows that the People's Bank of China regards rising prices, exacerbated by last month's earthquake, as a bigger threat than cooling export demand.

“This is what we think the People's Bank has been arguing behind closed doors for quite a long time,'' said Mark Williams, an economist at Capital Economics Ltd. in London. “It underlines that we should expect to see continued rapid appreciation of China's currency.''

The yuan rose today to the highest since a peg against the dollar was scrapped in 2005. It advanced 0.09 percent to 6.9268 versus the U.S. currency as of 11:59 a.m. in Shanghai.

Banks' Reserves

A stronger currency reduces import costs and may stem the flow of cash into the economy by increasing export prices. The yuan gained 7 percent in 2007.

China has pushed the proportion of deposits that banks are required to set aside as reserves to a record 16.5 percent this year. It has kept interest rates unchanged to avoid encouraging inflows of capital from abroad.

The reserve requirement will rise to 18.5 percent in 2008, James McCormack, head of Asia-Pacific sovereign ratings at Fitch Ratings, said at a briefing in Beijing today.

China's economic growth slowed to 10.6 percent in the first quarter from 11.9 percent for the whole of last year as export growth cooled. Overseas shipments rose 22 percent in April, down from the 31 percent gain in March.

The slowing of the economy remains “moderate,'' the central bank said. “The overall economy is turning from heated to stabilized.''

Earthquake's Effect

The earthquake, which has left more than 87,000 people dead or missing, will have a limited economic effect compared with previous disasters in Japan and Taiwan, the central bank said creditscore. It may add short-term pressure for prices to rise and lead to an acceleration in fixed-asset investment.

“Large-scale reconstruction of buildings, roads and other infrastructure in the earthquake zones may push fixed-asset investment growth higher,'' the bank said. “The impact on consumer prices may be short-term, but one should not ignore the impact on upstream producer prices as demand increases in the near future for cement, steel, copper, aluminum and other construction materials needed for reconstruction.''

Controlling inflation will be “tough'' this year because of higher costs for energy and labor, rising grain prices and the risk that rebounding loan growth will fuel demand.

Inflation quickened to 8.5 percent in April, up two percentage points from December, when the central bank last raised interest rates. The benchmark one-year lending rate is 7.47 percent, and the equivalent for deposits is 4.14 percent.

`Off The Agenda'

“Significant interest-rate increases are pretty much off the agenda,'' said Capital Economics' Williams, citing the government's concern that higher rates will attract money from overseas investors.

Fitch's McCormack said he expected inflation to force rates to rise twice this year.

Exports won't cool “drastically'' soon because the nation's products remain competitive, the likelihood of a recession in the U.S. has lessened, and shipments to Europe and emerging markets are increasing, the central bank said in the report.

“A slowdown in export growth in the short-term will help adjust China's export structure'' by reducing the nation's dependence on overseas sales, which has led to record trade surpluses, tension with the U.S. and Europe, and inflows of money that may fuel inflation.

The central bank will “use multiple monetary policy tools flexibly to support earthquake relief and reconstruction and at the same time continue to implement tight monetary policies and step up liquidity control,'' it said.

Source