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Australia Unveils New Budget, Toyota Drives into Focus

Asia closes the curtain on five days of sleepy, holiday trading and the week ahead is an outpour of earnings results mixed with key economic data that will push Asian investors back into full-alert mode.

Monday sees whether the Macquarie Bank-led consortium, Airline Partners Australia (APA), has succeeded in its bid to takeover the Flying Kangaroo, also known as Qantas Airways. The consortium, which also includes private equity firm Texas Pacific Group, can extend the offer for two weeks if it reaches 50% of acceptances, but will still need 70% to seal the deal. The deadline for the bid was Friday, May 4.

On Tuesday, as all of the region’s participants finally return from the Golden holidays, Australia will take center stage in releasing their national budget. The drought-stricken environment and aging population were the leading concerns in designing the 2007/2008 spending plan. Both Prime Minister John Howard and Treasurer Peter Costello have been quoted stressing the importance of fiscal restraint in maintaining the estimated US$9.7 billion underlying surplus.

Keeping the Nikkei 225 Average moving in Japan, the week’s first major earnings reports will also be released on Tuesday. Retail investors will be eager to see if market favorite, Softbank’s $21 billion jump in sales had any effect on this year’s profit results. Also keep an eye on CNBC’s Kaori Enjoji. She will be interviewing Honda Motor’s Chief Financial Officer, Fumihiko Ike. Tune in to CNBC’s CashFlow 10 a.m. to 12 noon Hong Kong and Singapore time on Tuesday.

On Wednesday, the U.S. Federal Open Market Committee monetary policy communiqué will be released. Analysts expect the Fed to keep interest rates unchanged at 5.25%.

On Thursday, investors will look abroad for market direction as both the Bank of England and European Central Bank prepare to raise, lower or hold their respective interest rates. Later the same day, U.S. trade balance figures for March will be posted. Congressional members will no doubt prepare their trade deficit debate accordingly.

Finally on Friday, U.S. April Retail Sales will be published. IDEAglobal expects a 0.4% rate of growth.

Earnings

Wall Street heavyweight, General Motors may be looking a little green on Wednesday – green with envy that is … as newly minted number one automaker Toyota releases its much anticipated report card. Japanese banks will also be posting their earnings. Shares of Shinsei Bank are likely to slip as the lender has already reversed early profit forecasts by estimating a $492 million net loss due to its failing consumer lending business.

Other major company earnings to be released in the workweek ahead include:

Asian Corporate Earnings Calendar

Monday May 7 Mori Seiki
Tuesday May 8 Softbank, Olympus, UOB
Wednesday May 9 Toyota Motor, Shinsei Bank, Japan Airlines
Thursday May 10 Nikon, Konica-Minolta, Casio, Datacraft, National Australia Bank
Friday May 11 SIA, Tokyo Electron, Inpex

Holidays

The Japanese markets reopen on Monday, but China takes an extra day off and will only be back to work on Tuesday.

And that’s the week ahead for Asia. We'll leave you with some special days of note …

This Week In History

1946 May 7 Tokyo Telecommunications Engineering (later renamed Sony) is founded with 20 employees
1933 May 8 Mohandas Ghandi begins a 21-day fast in protest of British oppression in India
1994 May 9 Nelson Mandela is inaugarated as South Africa's first black president
1979 May 10 The Federated States of Micronesia become self-governing
1949 May 11 Siam changes its name to Thailand
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