Financial Industry Eyewitnesses Recount Japan Quake

By Hannah Glover March 21, 2011

Charlie Kime, senior investment analyst at American Century Investments, was headed to Narita Airport near Tokyo when the earthquake hit.

 

Kime’s bus got stuck on the highway, and passengers initially thought the tires had been blown out. Kime eventually got to the airport on March 11, but it wasn’t until days later that Kime learned of the scope of the destruction of earthquake and subsequent tsunami.

 

“My heart goes out to the Japanese people,” says Kime, who is based in New York.

 

While firms rushed to update websites and blogs to provide shareholders with investment commentary on the impact of the disasters, companies industry-wide have also been reaching out to colleagues and contributing to relief efforts on the ground.

 

As of midday Friday, the National Police Agency of Japan put the official death toll from the nearly 9.0 magnitude earthquake and subsequent tsunami at 6,406 people. The agency said another 2,409 were injured and 10,259 remained missing, according to Dow Jones. Reuters reports that about 410,000 people were in shelters, displaced from their homes, which had been destroyed or abandoned amid the ongoing threat of a radiation from the badly damaged Fukishima Daiichi Nuclear Power Station.

 

Although Kime reached Narita that Friday, it was Sunday before he was finally able to fly out. Travelers hunkered down, listened to radio reports of the threat of the tsunami, ate Ritz crackers and drank water, and slept in blue sleeping bags provided by officials. Eventually, the sleeping bags ran out, and in some cases, people sprawled out on their luggage. Meanwhile, “constant aftershocks” jolted the building, he says.

 

Kime drew comparisons between the recent events and the quake that rocked the city of Kobe in 1995. At the time, Kime was living in the Hyōgo prefecture, of which Kobe is the capital, teaching English. The area affected by that disaster, which also includes the city of Osaka, is more densely packed with manufacturing companies. The cities clustered in that region, which is further south on Honshu Island than the area now in distress, represent about 4% of the country’s gross domestic product, or an economy the size of Canada’s.

 

The area affected by the most recent disasters, by comparison, is less densely populated and represents about 2% of Japan’s GDP, he says. Still, the rebuilding of Kobe represented a cost of about $110 billion, whereas early estimates for this month’s disaster are near $250 billion, he says. He also cited the need for basics like drinking water and fuel, such as kerosene, in the North, especially since about one third of the country’s energy comes from nuclear power.

 

“Clearly, the loss of life is on a different scale [than in 1995 in Kobe]. The tsunami just took entire villages,” he says. Kime points to the resiliency of Japan’s economy and its people but says he worries about friends in Tokyo, where many companies are operating under business-as-usual standards. “Imagine the stress they are under while doing all of this,” he says.

 

Kenichi Amaki, co-manager of the Matthews Japan Fund, was also witness to the devastation. Amaki landed at Haneda Airport, near Tokyo, about seven hours after the earthquake.

 

The pilot had made an announcement about the quake about an hour before landing. Earthquakes are relatively common in Japan, but the magnitude of the one that struck 81 miles off of the coast of Sendai was not clear until passengers were on the ground, he says. In Tokyo, all public transportation had been suspended when Amaki arrived.

 

By Saturday, however, restaurants, supermarkets and transportation were all operating again. But in the convenience stores, non-perishable food, batteries and cell phone chargers were all scarce, he says. Amaki had meetings scheduled with companies in which his fund invests or is considering investing. Several, perhaps out of courtesy he says, agreed to keep their appointments. Amaki decided instead to reschedule his trip for a time when companies would be able to better understand the quake’s impact on their businesses, he says. He returned to the U.S. after four days.

 

He also endured the 1995 Kobe earthquake. “I know firsthand what people go through after that type of devastation,” he says. Amaki was attending high school in Kobe at the time. Although his family’s home withstood the ’95 earthquake, everything inside was destroyed.

 

After Kobe, the country went to work quickly to rebuild. Amaki remembers many miles of an elevated highway near his house collapsed in that disaster, which killed more than 6,400 people. Within two years, the highway had been reconstructed, he says. “If any country can come back from such a disaster, it will be Japan,” he says.

 

But the country has some real and immediate needs, he notes. The area that has been hardest hit is still quite cold and was blanketed in snow last week. “There are people who have lost their homes or whose homes have literally been washed away,” says Amaki. That created a need for temporary shelter away from the stricken area. People need food and other supplies. The Los Angeles Times reported that worries about the possibility of a total meltdown at the nuclear plant had scared some aid workers from the region, leaving area residents more vulnerable.

 

Gas, water and electric lines are another concern. Electric grids can be restored relatively quickly, but concerns about gas leaks can mean it takes longer for that to come back online. In Kobe, Amaki’s family went for between two and three months without gas, he says.

 

Many firms, including Matthews International Capital Management and American Century, have opened matching gift programs, corporate grants or fundraising efforts to assist with the relief efforts. Please see the chart below for a listing of several industry efforts.

 

Meanwhile, the Japanese people appear to be bravely carrying on with their daily work. “On Monday, I had a friend who posted on Facebook, ‘It’s going to take me three hours, but I am still going to work,’” says Amaki. When he asked his friend why not take the day off, his friend responded that he had customers to tend to. “He said, ‘I need to go into the office and call up my customers and make sure they are OK.’”

Industry Firms Focus on Colleagues and Relief
Several fund companies have employees in Tokyo. While it's business-as-usual in many ways, many are encouraging employees to work from home, rather than come to the office. Meanwhile, the industry is also pitching in to help with relief efforts.
Firm Employees Charitable Efforts
American Century None permanently in Japan. The American Century Foundation is matching up to $20,000 of employee contributions made between March 16 and March 31. Funds will be distributed to the American Red Cross and Heart-to-Heart International.
American Funds 85 employees in Tokyo office. Office has "minimal" staff presently. "We have told all of the associates that their first priority is their and their families' safety and well being, and that they should make the decisions the need to make to put their families first," says spokesman Chuck Freadhoff. Parent company Capital Group matches employee donations to non-profits by a ratio of $2 corporate to every $1 employee for a maximum of up to $5,000 corporate per employee per year. The firm is also in contact with organizations in Japan and plans to make a corporate donation soon.
Bank of New York Mellon 200 employees in Tokyo, across business lines. "While we are operating in a business as usual capacity we have engaged our global crisis team, reviewed our contingency plans, and continue to assess any potential impact to the services we provide to clients," said Dan Smith, Chief Administrative officer for Asia-Pacific in a statement. BNY Mellon is making a contribution to the International Federation of Red Cross and Red Crescent Societies. The firm also has created an online site for employee donations. BNY Mellon, which includes Pershing, Dreyfus and several other subsidiaries, matches employee gifts of up to $1,000 for the year.
Fidelity "A little over a dozen," employees, according to spokesman Vin Loporchio. The office is open, but most employees have been working remotely, he says. Did not provide details.
Franklin Templeton Investments 38 employees in Tokyo. "We continue to monitor the situation closely and communicate updates regularly to our employees globally," says spokeswoman Stacey Johnston. Franklin Templeton made an immediate donation to the Red Cross to support emergency relief, and plans to make future contributions to organizations focused on long-term recovery, says Johnston. The firm also matches employee donations to non-profit organizations. In addition, employees globally are planning different activities in support of the relief efforts, she says.
The Hartford 200 employees in Japan, focused on the annuity business. Offices have resumed operations. The Hartford Financial Services Group made a $100,000 donation to the American Red Cross. The firm also encourages employees to donate to the Red Cross, according to a statement announcing the gift.
Invesco More than 160 employees in Tokyo Invesco will make a $100,000 contribution to the Japan Society's Japan Earthquake relief fund. Invesco will also match up to $100,000 in employees' donations to assist with earthquake relief efforts.
Janus 12 employees in Japan. "Their personal safety is our top priority," says spokesman James Aber. Offices are open, and employees may work remotely, but, Aber says, "We have encouraged them to focus on the safety and well-being of families and loved ones. We are asking them to rely on their colleagues in other offices for day-to-day duties." Janus has a charitable program underway, Aber says. Janus matches employee donations to non-profits by a ratio of $2 corporate to every $1 employee, he says.
JPMorgan Chase 14,330 employees in Japan, across all business lines JPMorgan Chase made a donation of $5 million. Included within that is $1 million to match employee contributions to the American Red Cross and World Vision to assist with temporary shelters, medical help, sanitation and other pressing issues, according to a statement from CEO and chairman Jamie Dimon.
Matthews International Capital Management None permanently in Japan. The firm has made a donation to the American Red Cross, earmarked for the relief efforts in Japan.
MFS/Sun Life Financial 27 Sun Life employees in Tokyo, through MFS Investment Management. Sun Life Financial's International Response Fund, which was established in conjunction with the Canadian Red Cross in 2005, made an initial contribution of $CN 50,000 to that organization earmarked for immediate relief in the affected area. U.S. associates have access to a corporate matching program of up to $500 per year, and have been supporting organizations including the American Red Cross, International Medical Corps and Save the Children.
OppenheimerFunds None permanently in Japan. OppenheimerFunds has a matching gifts program, according to a spokesman.
Prudential Financial 23,000 employees in Japan, most of whom are in the company's insurance business. There are a "small number" with Prudential Investment Management, says spokesman John Chartier. The Companies were "not severely damaged" according to a statement, and are operating. The Prudential Foundation has announced it will contribute $6.1 million to support relief efforts in Japan. In addition, the Prudential Foundation will match employee contributions, according to a statement from Prudential
T. Rowe Price 24 employees in Tokyo. "We continue to monitor the situation," says spokesman Brian Lewbart. Offices are open, but employees can choose to work remotely. T. Rowe Foundation is making a grant to the American Red Cross, and to Save The Children, as well as other to-be-determined organizations. The firm also matches employee contributions to non-profits of greater than $25 for U.S. employees dollar-for-dollar. The company offers different matching programs to employees outside the U.S., as well.
Vanguard 7 employees in Tokyo. The office is open. Vanguard has a link on its Intranet to the American Red Cross Japan relief fund, and is matching employee donations. The Vanguard Charitable Endowment Program, a donor-advised fund, has asked for input. Donors have recommended making grants of $208,500 specifically earmarked for groups providing aid to the victims in Japan, says spokesman Joshua Grandy. Other grants have been made to relief organizations operating in the area, he says.
Wells Fargo 50 employees in two Tokyo offices, across various businesses. "We continue to monitor the situation and have encouraged team members to work remotely," says spokeswoman Lauren Sawyers. Wells Fargo expects the company and its employees to contribute as much as $1.5 million, according to Sawyers. The company made an immediate donation of $500,000 to the American Red Cross. Wells Fargo will match employee contributions dollar-for-dollar up to a total match of $500,000. In Japan, Wells Fargo is also waiving foreign currency and ATM fees for credit and debit cardholders through June 15.

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Two months after Japan quake, neediest victims still await aid

By Yoko Kubota
Reuters
updated 5/11/2011 12:57:40 PM ET 2011-05-11T16:57:40
Crushed fishing boat which were devastated by the March 11 earthquake and tsunami are collected in Soma
Issei Kato  /  REUTERS
Fishing boats damaged by the March 11 earthquake and tsunami are collected in Soma, Fukushima prefecture.

The neediest victims of Japan's devastating earthquake and tsunami have yet to receive much of the record $2.2 billion aid two months later, mainly because the authorities have yet to identify them, the country's Red Cross said Wednesday.

The March 11 quake and tsunami and nuclear crisis that followed at the Fukushima Daiichi plant left nearly 25,000 dead or missing, sent more than 117,000 people away from their homes and destroyed infrastructure in the north of Japan.

The Japanese Red Cross Society has so far collected 174 billion yen ($2.2 billion) in relief money, the most it has ever been given for any relief campaign.

The charity distributed about 65 billion yen in April to regional governments in the disaster-hit area, but says that this fund has yet to reach those most in need.

"The biggest problem is that those who should be receiving the money cannot be identified, as more than 10,000 people are still missing, resident registrations are gone and the administrative functions at the periphery are not working," said Tadateru Konoe, president of the Japanese Red Cross.

"The money has reached the prefectural level, but I recently saw a report that much of the actual distribution (to quake victims) has yet to take place," he told a news conference.

All of the organization's relief money is meant to be handed to victims, in cash, and the group has been criticized for the delay in distribution. In 1995, when a huge quake struck Kobe in western Japan, the initial round of cash handouts was made within about two weeks of the disaster.

A panel of officials and experts decided last month on the parameters of the initial round of aid distribution, such as giving 350,000 yen to families who lost a member and the same amount to families whose homes were destroyed.

The Japanese Red Cross still has more than 100 billion yen in relief money, and Konoe, also president of the International Federation of Red Cross and Red Crescent Societies, said there was no clear plan yet on how to distribute this. He said the money could also be given to businesses as well as individuals.

Japan has started to clean up and rebuild the damaged region but the job is daunting and the area is still a ruin.

A no-entry zone is still in place 20 km (12 mile) around the stricken Fukushima Daiichi plant, though residents of one town were allowed to return Tuesday for two hours for the first time since the disaster.

In a poll by Yomiuri newspaper that surveyed mayors and leaders of 41 towns and cities in the disaster-struck areas, most said they felt there was no clear vision for rebuilding their lives.

Seventeen mayors said they did not have a clear idea of when the clearing of rubble would finish in their areas, while nine said they did not know when the electricity and water systems would function properly again.

Konoe said that many medical services in disaster-struck areas remained shut and that stress-related illnesses were among the biggest health risks to the displaced.

The total cost of the damage has been estimated at $300 billion, making it the world's most costly natural disaster. ($1 = 80.835 Japanese Yen)

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Posted by Bryan Hays