Shaw Issues Statement on Events in Japan

BATON ROUGE, La., Mar 13, 2011 (BUSINESS WIRE) -- The Shaw Group Inc. (NYSE: SHAW) issued the following statement regarding the recent events in Japan:

"On behalf of all Shaw employees around the world, I give our deepest sympathy to the people of Japan. This is an extraordinary tragedy, and we can only imagine how painful and challenging this time is for everyone in the country," said J.M. Bernhard Jr., Shaw's chairman, president and chief executive officer.
"To aid in the humanitarian efforts, Shaw has made a significant contribution to the American Red Cross, and I personally have directed all of our employees, including our team of nuclear experts, to stand ready to provide any assistance and support that we can to the government and people of Japan in responding to this terrible event.
"While it is premature to speculate on any impact the events in Japan may have on the U.S. nuclear industry, we continue to believe in the importance of nuclear energy and the role it will play in the future of our country, as well as the rest of the world. The new generation technology under construction today has been designed with greater safety systems in place that will even more effectively address the challenges we are seeing in Japan. The industry consistently incorporates operating experience and lessons learned and will continue to use those insights to make nuclear energy even safer.
"At this time, we do not believe there will be an impact on Shaw's nuclear projects currently under construction in the United States and China. Our customers have indicated they intend to move forward, and we believe the construction timelines will continue as planned," said Mr. Bernhard.
The Shaw Group Inc. (NYSE:SHAW) is a leading global provider of engineering, construction, technology, fabrication, remediation and support services for clients in the energy, chemicals, environmental, infrastructure and emergency response industries. A Fortune 500 company with fiscal year 2010 annual revenues of $7 billion, Shaw has approximately 27,000 employees around the world and is the power sector industry leader according to Engineering News-Record's list of Top 500 Design Firms. For more information, please visit Shaw's website at www.shawgrp.com.
This press release contains forward-looking statements and information about our current and future prospects, operations and financial results, which are based on currently available information. Actual future results and financial performance could vary significantly from those anticipated in such statements.
Among the factors that could cause future events or transactions to differ from those we expect are those risks discussed in our Annual Report on Form 10-K for the fiscal year ended August 31, 2010, our Quarterly Reports on Form 10-Q for the quarters ended February 28, 2010, May 31, 2010 and November 30, 2010, and other reports filed with the Securities and Exchange Commission (SEC). Please read our "Risk Factors" and other cautionary statements contained in these filings. Our current expectations may not be realized as a result of, among other things:

• Changes in our clients' financial conditions, including their capital spending;
• Our ability to obtain new contracts and meet our performance obligations;
• Client contract cancellations or modifications to contract scope;
• Worsening global economic conditions;
• Changes to the regulatory environment;
• Litigation or arbitration decisions;
• Failure to achieve projected backlog.

As a result of these risks and others, actual results could vary significantly from those anticipated in this press release, and our financial condition and results of operations could be materially adversely affected. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, the occurrence of certain events or otherwise.
SOURCE: The Shaw Group Inc.
The Shaw Group Inc.
Media and Financial Contact:
Gentry Brann, 225-987-7372
gentry.brann@shawgrp.com

Portfolio Recommendations: Shaw Capital Management Korea

We have made no changes in the balance of our portfolios this month. The strength of the equity markets is encouraging, and we expect that the global economy will continue to recover, and push the markets even higher by year-end.

Portfolio Recommendations: Shaw Capital Management Korea. Market Developments. Economies virtually everywhere have been recovering for some months; the question is what to do post-crisis. For some, like Ireland, Iceland and Latvia, there is little option but severe and immediate public sector retrenchment. For most however there is a choice: on the fiscal side

cuts (or tax rises) now, or later spread over a long period. On the monetary side, continued printing of money or cessation and even reversal. In fact this is one of those periods when the ‘independence’ of central banks, that is their independent authority to set interest rates and

the extent of money printing, is a disadvantage for the economy, all of which need at present careful coordination of monetary and fiscal policy.

Portfolio Recommendations: Shaw Capital Management Korea. There has been an increase in the risks in the bond market; the current situation, with the latest attempts to resolve the Greek debt crisis achieving only limited success, and a sudden weakening in the world bond market emphasising the funding problems that are affecting the entire bond market.

Portfolio Recommendations: Shaw Capital Management Korea. Independence of Central Banks. Economies virtually everywhere have been recovering for some months, the question is what to do post-crisis. For some, like Ireland, Iceland and Latvia, there is little option but severe and immediate public sector retrenchment.

For most however there is a choice: on the fiscal side cuts (or tax rises) now, or later spread over a long period. On the monetary side, continued printing of money or cessation and even reversal. In fact this is one of those periods when the ‘independence’ of central banks, that is their independent authority to set interest rates and the extent of money printing, is a disadvantage for the economy, all of which need at present careful coordination of monetary and fiscal policy.

At Shaw Capital Management we give you the information and insight you need to make the right investment choices. We look forward to working with you and being the open architects of your financial well being.

Every investor will achieve better long-term risk-adjusted results by working with a true open architecture advisor. Our philosophy is simple: almost every investor will achieve better long-term risk-adjusted results by working with a true open architecture advisor.

Before Shaw Capital Management South Korea launched the open architecture revolution, investors had to make the unhappy choice between selecting an advisor who was independent, but unsophisticated (the traditional pension and endowment consulting firms), or selecting an advisor who was sophisticated but had conflicting interests (global banks, trust companies, money management firms).

Today, virtually all investors faced with the challenge of managing a significant pool of capital can access open architecture advice.

bott_ � i ; �^y z ttom:.0001pt;text-align: justify;text-justify:inter-ideograph;line-height:normal;mso-layout-grid-align: none;text-autospace:none'>The UK and the Budget: Shaw Capital Management Korea. Spending cuts To begin with the last, the current government unleashed a massive surge in public spending from 2000, raising it by 8% of GDP before the crisis raised it by more again.

Everyone knew that without reform and gradual increases, such money would be wasted; there is no practical way to spend such vast sums without raising wages and wasting money on speculative projects.

Productivity in the public sector duly slumped and public sector remuneration including pensions has surged past the private sector where market forces suggest pay should be higher to reflect greater insecurity.

The UK and the Budget: Shaw Capital Management Korea. To reduce public spending back to where it started in 2000 as a share of GDP (at around 36%) would require it to grow in real terms by about 16% less than real GDP over the next five years. Since total GDP growth over that period is likely to be about 10%, that means that spending must be cut by about 1% a year in real terms.

This is a feasible target. The UK Treasury under Gordon Brown became a brute instrument of spending increase, oddly somewhat against the protests of some departments worrying about wasteful effects. The UK Treasury was never traditionally like this … very much the opposite, a place from which wringing money was like getting blood from stones.

It should be returned to its traditional function of restraint; Treasury control, old-style, is the best instrument for forcing departments to find the economies they privately know they can make.

The UK and the Budget: Shaw Capital Management Korea

In the UK it is obvious that there is no possibility of continuing with budget deficits of some 13% of GDP, the present prospect if no action is taken.

Unfortunately however the recent UK Budget produced no credible plan for dealing with this problem. It swept it into the lap of the new government after the May election, whatever that government is.

The UK and the Budget: Shaw Capital Management Korea. The UK cannot delude themselves that rapid resumed growth will lead to a rapid return of the previous revenue streams. UK growth in most forecasts, ours included, is projected as slow. In our view there is a good reason: the continuing shortage of oil and raw materials worldwide prevents rapid growth for the world

as a whole and since emerging market economies are continuing to grow rapidly that restricts the growth possibilities in countries like the UK and other developed countries.

We are already seeing inflation spread into China and otheremerging countries, forcing a tightening of policy.

It seems likely that this tightening will be enough to restrain world growth to rates that will not push commodity prices much higher. So even the fast-growing world economies are being forced to limit their growth ambitions; as for the UK they are achieving ‘recovery’, but hardly enthusiastic growth.

All this will only change when innovation in raw material use has freed up net world supplies.

Fortunately the flexibility of the UK labour market has restricted the jobs fallout. Unemployment has peaked below 8% (just over 5% on the benefit-claimant measure) as people have opted for wage freezes or cuts and shorter hours … so there is underemployment but not the disaster of double-digit unemployment rates. But this environment is one in which tax revenues will not recover much and in which the demands for public spending will continue.

Time will tell how big the ‘structural deficit’ … that will emerge once the recovery is complete … may be.

But policy decisions cannot wait until this is better known. So in this Budget the need was to produce a five-year public sector adjustment plan.

Two things should guide this plan: keeping the taxes down and competitive, so that growth and innovation resume, and restoring efficiency in public spending.

The UK and the Budget: Shaw Capital Management Korea. Spending cuts To begin with the last, the current government unleashed a massive surge in public spending from 2000, raising it by 8% of GDP before the crisis raised it by more again.

Everyone knew that without reform and gradual increases, such money would be wasted; there is no practical way to spend such vast sums without raising wages and wasting money on speculative projects.

Productivity in the public sector duly slumped and public sector remuneration including pensions has surged past the private sector where market forces suggest pay should be higher to reflect greater insecurity.

The UK and the Budget: Shaw Capital Management Korea. To reduce public spending back to where it started in 2000 as a share of GDP (at around 36%) would require it to grow in real terms by about 16% less than real GDP over the next five years. Since total GDP growth over that period is likely to be about 10%, that means that spending must be cut by about 1% a year in real terms.

This is a feasible target. The UK Treasury under Gordon Brown became a brute instrument of spending increase, oddly somewhat against the protests of some departments worrying about wasteful effects. The UK Treasury was never traditionally like this … very much the opposite, a place from which wringing money was like getting blood from stones.

It should be returned to its traditional function of restraint; Treasury control, old-style, is the best instrument for forcing departments to find the economies they privately know they can make.