Please read this article below. Going to be a very RED day tomorrow. Watch out for Shorts. Very likely GAP DOWN.
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NEW YORK (MarketWatch) -- U.S. stocks fell Tuesday as investors, fretting over recent economic weakness, moved to the safety of the dollar and Treasurys ahead of key housing data.
The Dow Jones Industrial Average /quotes/comstock/10w!i:dji/delayed (DJIA 10,017, -157.42, -1.55%) dropped 92 points, or 0.9%, to 10082, in early trading. All 30 of the measure's components were in the red. Leading the slide, Caterpillar, Inc. /quotes/comstock/13*!cat/quotes/nls/cat (CAT 64.76, -2.08, -3.11%) dropped 2.3%, Walt Disney /quotes/comstock/13*!dis/quotes/nls/dis (DIS 32.25, -0.69, -2.08%) dropped 2% and Cisco Systems Inc. /quotes/comstock/15*!csco/quotes/nls/csco (CSCO 21.35, -0.34, -1.55%) declined 1.9%.
The Nasdaq Composite /quotes/comstock/10y!i:comp (COMP 2,121, -38.29, -1.77%) fell 1.4% to 2129. The Standard & Poor's 500 index /quotes/comstock/21z!i1:in\x (SPX 1,051, -16.76, -1.57%) declined 1.2% to 1055, with all its sectors in the red, led by technology and materials.
AM Report: Fed Split on Move to Bolster EconomyAs the economic recovery showed signs of sputtering, at least seven of 17 Fed officials spoke against or expressed reservations about a plan to alter the way the Fed manages its huge portfolio of securities before the move was approved on Aug. 10. Jon Hilsenrath discusses. Also, Jenny Strasburg discusses a Chinese sovereign-wealth fund in talks to invest a large sum of money in a hedge fund devoted to profiting from 'Black Swan' market swoons.
The broad decline, which puts stocks on track for their fourth-straight day in the red, comes as investors have grown increasingly concerned about the global economy.
Despite strong second-quarter earnings and a recent uptick in merger-and-acquisition activity, economic data have been disappointing. Investors are fearful that if economic numbers continue to come in weak, the economy could be headed toward a double-dip.
"Investors are running away from risk," said John Apruzzese, partner and equity portfolio manager at Evercore Wealth Management. "It's clearly concern about economic growth in the U.S. as well as globally."
Crude-oil futures fell below $72 a barrel and gold futures declined as investors fled to the safety of the dollar and Treasurys. The U.S. Dollar Index /quotes/comstock/11j!i:dxy0 (DXY 83.13, +0.01, +0.01%) , which tracks the U.S. currency against a basket of six others, climbed 0.3%. Gains in Treasurys pushed the yield on the 10-year note /quotes/comstock/31*!ust10y (UST10Y 2.51, -0.09, -3.54%) down to 2.52%. The 10-year note earlier touched 2.509%, its lowest level since March 2009.
The data on tap Tuesday and this week are expected to provide more insight into the health of the economy, with existing-home sales due Tuesday, new-home sales to be released Wednesday and the government's second reading of second-quarter economic growth due Friday. That report is expected to show a significant slowdown in U.S. economic growth, with the estimate for second-quarter gross domestic product predicted to be cut to 1.3% growth from 2.4% growth.
Ahead of those reports, the market is particularly jittery.
"Investors are hyper sensitive to macro economic data because they got burned two years ago and they're afraid of it happening again," Apruzzese said.
Tuesday, August 24, 2010
Singapore H1 GDP grew 17.9 pct, sees global risks
Reuters - Monday, August 9
SINGAPORE, Aug 8 - Singapore's economy grew 17.9 percent in the first half of 2010, a pace likely to moderate in the second half, Prime Minister Lee Hsien Loong said on Sunday.
There are still risks facing the economies of Europe and the United States and the global financial system is yet to fully recover from the credit crisis, Lee said in a televised speech on the eve of a national day celebrating Singapore's 45th year of independence.
Lee maintained a government forecast for 13-15 percent growth in 2010, which would make Singapore one of the world's fastest growing economies.
The first-half GDP figure showed the economy expanded at a slightly lower pace in the second quarter from an earlier estimate of 19.3 percent released on July 14. [ID:nSGE673073]
The government had earlier estimated the economy grew 18.1 percent in the first half of 2010 from a year earlier.
Lee did not provide the final second quarter growth figure.
"Growth is likely to moderate in the second half," said Lee. "Risks remain in the world economy, especially in Europe and the U.S. The global financial system is not fully mended."
Lee also touched upon the issue of foreign workers, saying while the government will control the flow the country needed immigrants to make up for a shortage of local workers.
We will control the inflow, to ensure that it is not too fast, and not too large," Lee said. "We will only bring in people who can contribute to Singapore, and work harder to integrate them into our society. And we will make clear that citizens come first."
SINGAPORE, Aug 8 - Singapore's economy grew 17.9 percent in the first half of 2010, a pace likely to moderate in the second half, Prime Minister Lee Hsien Loong said on Sunday.
There are still risks facing the economies of Europe and the United States and the global financial system is yet to fully recover from the credit crisis, Lee said in a televised speech on the eve of a national day celebrating Singapore's 45th year of independence.
Lee maintained a government forecast for 13-15 percent growth in 2010, which would make Singapore one of the world's fastest growing economies.
The first-half GDP figure showed the economy expanded at a slightly lower pace in the second quarter from an earlier estimate of 19.3 percent released on July 14. [ID:nSGE673073]
The government had earlier estimated the economy grew 18.1 percent in the first half of 2010 from a year earlier.
Lee did not provide the final second quarter growth figure.
"Growth is likely to moderate in the second half," said Lee. "Risks remain in the world economy, especially in Europe and the U.S. The global financial system is not fully mended."
Lee also touched upon the issue of foreign workers, saying while the government will control the flow the country needed immigrants to make up for a shortage of local workers.
We will control the inflow, to ensure that it is not too fast, and not too large," Lee said. "We will only bring in people who can contribute to Singapore, and work harder to integrate them into our society. And we will make clear that citizens come first."
Singapore Stocks-SingTel lifts index; upside seen at 2950 pts
Reuters - Tuesday, August 24Send IM Story Print
* Index up 0.6 percent, seen in 2900-2950 range near term
* SingTel rose 2 percent by midday
By Charmian Kok
SINGAPORE, Aug 24 - Singapore shares rose 0.61 percent on Tuesday, outperforming regional bourses like Hong Kong, as the benchmark index got a boost from Southeast Asia's largest telcom firm Singapore Telecommunications.
By the midday break the Straits Times Index <.FTSTI> was up 17.91 points at 2,943.90. More than 129.3 million shares had changed hands.
SingTel's shares rose 2 percent to S$3.00 as investors shrugged off previous concerns that a potential weakness in the Australian dollar resulting from Australia's political stalemate will hit its bottom line.
"There could be some bargain hunting going on as investors recover from yesterday's knee-jerk reaction to news of Australia's hung parliament. The actual impact on SingTel's bottomline isn't so great," said Carey Wong, an investment analyst at OCBC Investment Research.
SingTel's Australian subsidiary, SingTel Optus, accounted for about 19 percent of its bottom line for the fiscal year ended March 31, although it made up 64 percent of its revenue.
Shipbuilders like Yangzijiang Shipbuildingand Cosco Corporation outperformed the broader index, as Cosco secured new contracts and Yangzijiang said it would buy a site in China that can be used to expand its yard. [ID:nSGE67N01B]
Shares of Yangzijiang rose as much as 2.6 percent on Tuesday to S$1.55, while Cosco rose 1.9 percent to S$1.58.
"I expect the STI to continue trading in a tight range (of 2,900-2,950) for the next two weeks. The problem is the earnings season has ended and there's no major economic data we expect in the coming week," said Tey Tze Ming, a market strategist at Saxo Capital Markets.
* Index up 0.6 percent, seen in 2900-2950 range near term
* SingTel rose 2 percent by midday
By Charmian Kok
SINGAPORE, Aug 24 - Singapore shares rose 0.61 percent on Tuesday, outperforming regional bourses like Hong Kong, as the benchmark index got a boost from Southeast Asia's largest telcom firm Singapore Telecommunications
By the midday break the Straits Times Index <.FTSTI> was up 17.91 points at 2,943.90. More than 129.3 million shares had changed hands.
SingTel's shares rose 2 percent to S$3.00 as investors shrugged off previous concerns that a potential weakness in the Australian dollar resulting from Australia's political stalemate will hit its bottom line.
"There could be some bargain hunting going on as investors recover from yesterday's knee-jerk reaction to news of Australia's hung parliament. The actual impact on SingTel's bottomline isn't so great," said Carey Wong, an investment analyst at OCBC Investment Research.
SingTel's Australian subsidiary, SingTel Optus, accounted for about 19 percent of its bottom line for the fiscal year ended March 31, although it made up 64 percent of its revenue.
Shipbuilders like Yangzijiang Shipbuilding
Shares of Yangzijiang rose as much as 2.6 percent on Tuesday to S$1.55, while Cosco rose 1.9 percent to S$1.58.
"I expect the STI to continue trading in a tight range (of 2,900-2,950) for the next two weeks. The problem is the earnings season has ended and there's no major economic data we expect in the coming week," said Tey Tze Ming, a market strategist at Saxo Capital Markets.
Genting Malaysia faces down stockholder revolt
Reuters - Wednesday, August 25Send IM Story Print
KUALA LUMPUR, Aug 24 - Genting Malaysiashareholders backed the company's move to acquire the UK casino operations of Genting Singapore in a 340 million pound deal despite a large number of votes against.
Shareholder revolts in Malaysia are rare and 38 percent of the stockholders voting disapproved of the move in the resolution put to Tuesday's extraordinary meeting.
"People wanted assurances over the next three years to come over Genting UK's profitability," said Genting's deputy chairman Mohammed Hanif Omar.
Genting Malaysia stock was down 2.23 percent at 3.07 ringgit at 0914GMT, underperforming a 0.l9 percent rise in the main Kuala Lumpur stock index <.KLSE>.
(Reporting by Fong Min Hun; Writing by David Chance; Editing by Niluksi Koswanage)
KUALA LUMPUR, Aug 24 - Genting Malaysia
Shareholder revolts in Malaysia are rare and 38 percent of the stockholders voting disapproved of the move in the resolution put to Tuesday's extraordinary meeting.
"People wanted assurances over the next three years to come over Genting UK's profitability," said Genting's deputy chairman Mohammed Hanif Omar.
Genting Malaysia stock was down 2.23 percent at 3.07 ringgit at 0914GMT, underperforming a 0.l9 percent rise in the main Kuala Lumpur stock index <.KLSE>.
(Reporting by Fong Min Hun; Writing by David Chance; Editing by Niluksi Koswanage)
Singapore lifts ban on brokers on sale of structured notes
Reuters - 2 hours 27 minutes agoSend IM Story Print
SINGAPORE, Aug 24 - Singapore's central bank lifted a ban on the sale of structured notes for six brokerages on Tuesday after they complied with the regulator's orders.
The ban was imposed last year after a probe into the sale and marketing of the derivatives linked to failed Wall Street bank Lehman Brothers.
The brokerages are CIMB Securities Pte Ltd, DMG & Partners Securities Pte Ltd, Kim Eng Securities Pte Ltd, OCBC Securities Pte Ltd, Phillip Securities Pte Ltd and UOB Kay Hian Pte Ltd, the Monetary Authority of Singapore said in a statement.
The central bank said the six financial institutions have publicly pledged to implement various measures to ensure these products are fairly marketed and sold to retail investors. "These include stepping up training and supervision of their staff and enhancing the policies and procedures on their sales and advisory process, it said.
Thousands of Singapore investors lost money in 2008 after they bought risky derivatives linked to the collapsed U.S. investment bank that had been marketed as relatively safe alternatives to fixed deposits, sparking several protests in the tightly controlled city-state. [ID:nSIN22393]
Under MAS' directions, the financial institutions were required to appoint an external person to review their action plan and report on its implementation.
SINGAPORE, Aug 24 - Singapore's central bank lifted a ban on the sale of structured notes for six brokerages on Tuesday after they complied with the regulator's orders.
The ban was imposed last year after a probe into the sale and marketing of the derivatives linked to failed Wall Street bank Lehman Brothers.
The brokerages are CIMB Securities Pte Ltd, DMG & Partners Securities Pte Ltd, Kim Eng Securities Pte Ltd, OCBC Securities Pte Ltd, Phillip Securities Pte Ltd and UOB Kay Hian Pte Ltd, the Monetary Authority of Singapore said in a statement.
The central bank said the six financial institutions have publicly pledged to implement various measures to ensure these products are fairly marketed and sold to retail investors. "These include stepping up training and supervision of their staff and enhancing the policies and procedures on their sales and advisory process, it said.
Thousands of Singapore investors lost money in 2008 after they bought risky derivatives linked to the collapsed U.S. investment bank that had been marketed as relatively safe alternatives to fixed deposits, sparking several protests in the tightly controlled city-state. [ID:nSIN22393]
Under MAS' directions, the financial institutions were required to appoint an external person to review their action plan and report on its implementation.
OCBC'S STOCK COMMENT: Wilmar International
OCBC'S STOCK COMMENT: Wilmar International expands into the sugar business by acquiring a sugar refinery in Indonesia and a sugar trading company in Singapore. Asia Pac sugar consumption to see 6% growth over the next few years with demand outstripping supply. Still early days before meaningful contributions from its sugar business, we hold off adjusting our estimates. Our S$7.25 fair value and BUY rating maintained.
Catch Money Mind this Sunday (Aug 29)
Catch Money Mind this Sunday (Aug 29) as we go on the trail of some of the world's greatest investors - many of whom owe their success to just one man - Benjamin Graham. But who is he? And what is his magic money-making formula?
European Stocks, U.S. Futures Retreat; Rio Tinto, CRH Fall
Stocks dropped for a fourth day, U.S. futures slipped and commodities fell while the yen strengthened to a 15-year high against the dollar on concern the economic recovery is dissipating. Government bonds rallied.
The Stoxx Europe 600 Index declined 1.3 percent at 10:25 a.m. in London, while Japan’s Nikkei 225 Stock Average entered a bear market. Standard & Poor’s 500 Index futures sank 0.8 percent. The yen appreciated against all of its 16 major peers. German 10-year bonds jumped, widening the yield difference with Irish debt to within nine basis points of its euro-era record. Oil and copper retreated for a fifth day.
Sales of existing U.S. homes probably tumbled in July to the lowest level since March 2009, according to a Bloomberg survey. CRH Plc, the world’s second-largest maker of building materials, forecast lower earnings, citing concern about the U.S. outlook. Slower Asian economic growth will have a “serious negative impact,” Olli Rehn, the European Union’s economic chief, said yesterday in a Bloomberg Television interview.
“Yields down, yen up, risk off,” a team led by Kit Juckes, head of foreign-exchange research at Societe Generale SA in London, wrote today in a report. “Today’s key economic data will come in the form of U.S. existing home sales, and the only straw anyone could snatch at is that no-one has any hope of good news. Equities are vulnerable today.”
CRH, Vedanta, Cairn
The MSCI World Index of stocks in 24 developed nations fell 0.6 percent. Construction and materials companies led declines by all 19 industries on Europe’s Stoxx 600, while more than 16 shares dropped for every one that gained. CRH slumped 15 percent, the biggest intraday drop since 2002. Vedanta Resources Plc tumbled 5.7 percent to a 10-month low. Cairn Energy Plc sank 1.4 percent after its first well off Greenland found natural gas rather than crude oil. WPP Plc, the world’s largest advertising company, lost 3 percent after profit missed estimates.
Rio Tinto Group slipped 2.8 percent after the Globe and Mail reported that the world’s third-largest mining company may be considering a bid for Potash Corp. of Saskatchewan Inc. together with a Chinese partner to rival a $40 billion proposal by BHP Billiton Ltd. Dell Inc. fell 1.1 percent in Germany as a person close to the matter said the company may raise its bid for 3Par Inc. after Hewlett-Packard Co. offered to buy the maker of data-center equipment for about $1.6 billion, 33 percent higher than Dell’s offer.
Bear Markets
The MSCI Asia Pacific Index sank 0.8 percent as Japan’s Nikkei 225 fell to its lowest close since May 1, 2009. The gauge has fallen 21 percent since reaching an 18-month high on April 5, a drop that signifies a bear market to some analysts. Vietnam’s VN Index tumbled 3 percent, taking its drop since May 6 to 21 percent.
The decline in U.S. futures indicated the S&P 500 may drop for a fourth day. Purchases of previously owned U.S. homes plunged 13.4 percent from June to a 4.65 million annual rate, a third decline in a row, according to the median of 74 forecasts in a Bloomberg News survey. The report from the National Association of Realtors is due at 10 a.m. in Washington.
The yield spread between Irish and German 10-year government debt widened two basis points to 307 basis points, near the level set before the European Union and the International Monetary Fund set up a 750 billion euro ($947 billion) fund to protect the single currency on May 8. The Greek-German spread gained five basis points to 867 basis points, and the Portuguese-German spread increased nine basis points to 306 basis points.
Treasuries, Bunds
Treasuries and German government bonds rose, with the yield on 10- and 30-year bunds falling to record lows. U.S. 10-year yields fell five basis points to 2.55 percent, within one basis point of the least since March 2009. German 10-year yields fell four basis points to 2.24 percent, while 30-year yields also dropped four basis points, to 2.87 percent. U.S. two-year note yields were within one basis point of a record low before the sale $37 billion of the securities.
Europe is at risk of going into a so-called “double-dip” recession, as governments cut spending to narrow their fiscal deficits, Nobel Prize-winning economist Joseph Stiglitz said in an interview with Dublin-based RTE Radio today.
The pound fell to its weakest level in almost a month against the dollar after Bank of England policy maker Martin Weale said the U.K. economy may slip back into a recession. The British currency depreciated 0.6 percent to $1.5412 and weakened 0.5 percent to 82 pence per euro.
Yen, Dollar
The yen appreciated 0.8 percent to 84.45 per dollar, the strongest since July 1995. It jumped 1.6 percent against the Korean won. The dollar climbed against all its major peers except the yen, while the euro fell 0.2 percent to its lowest against the U.S. currency since July 13.
Industrial metals declined for a fifth day, led by a 2 percent drop in nickel prices on the London Metal Exchange. Inventories of nickel, copper, lead and zinc all increased in warehouses monitored by the LME, signaling slowing demand for the metals. Oil declined 0.9 percent to $72.43 a barrel in New York as analysts estimated that U.S. inventories of crude rose last week.
Raw-materials stocks led a 1 percent drop in the MSCI Emerging Markets Index, the biggest decline in nine days. The Philippine Stock Exchange Index sank 2.3 percent, the most in 11 weeks, and the peso fell 1 percent against the dollar after at least eight tourists from Hong Kong were killed by gunfire yesterday in a bus siege in Manila.
Hungary’s forint dropped to a three-week low against the euro after the central bank raised its inflation forecast and lowered its growth estimates for the next two years. South Africa’s rand slumped 0.7 percent versus the dollar before a report today that may show economic growth slowed in the second quarter.
To contact the reporter on this story: Stephen Kirkland in London at skirkland@bloomberg.net
The Stoxx Europe 600 Index declined 1.3 percent at 10:25 a.m. in London, while Japan’s Nikkei 225 Stock Average entered a bear market. Standard & Poor’s 500 Index futures sank 0.8 percent. The yen appreciated against all of its 16 major peers. German 10-year bonds jumped, widening the yield difference with Irish debt to within nine basis points of its euro-era record. Oil and copper retreated for a fifth day.
Sales of existing U.S. homes probably tumbled in July to the lowest level since March 2009, according to a Bloomberg survey. CRH Plc, the world’s second-largest maker of building materials, forecast lower earnings, citing concern about the U.S. outlook. Slower Asian economic growth will have a “serious negative impact,” Olli Rehn, the European Union’s economic chief, said yesterday in a Bloomberg Television interview.
“Yields down, yen up, risk off,” a team led by Kit Juckes, head of foreign-exchange research at Societe Generale SA in London, wrote today in a report. “Today’s key economic data will come in the form of U.S. existing home sales, and the only straw anyone could snatch at is that no-one has any hope of good news. Equities are vulnerable today.”
CRH, Vedanta, Cairn
The MSCI World Index of stocks in 24 developed nations fell 0.6 percent. Construction and materials companies led declines by all 19 industries on Europe’s Stoxx 600, while more than 16 shares dropped for every one that gained. CRH slumped 15 percent, the biggest intraday drop since 2002. Vedanta Resources Plc tumbled 5.7 percent to a 10-month low. Cairn Energy Plc sank 1.4 percent after its first well off Greenland found natural gas rather than crude oil. WPP Plc, the world’s largest advertising company, lost 3 percent after profit missed estimates.
Rio Tinto Group slipped 2.8 percent after the Globe and Mail reported that the world’s third-largest mining company may be considering a bid for Potash Corp. of Saskatchewan Inc. together with a Chinese partner to rival a $40 billion proposal by BHP Billiton Ltd. Dell Inc. fell 1.1 percent in Germany as a person close to the matter said the company may raise its bid for 3Par Inc. after Hewlett-Packard Co. offered to buy the maker of data-center equipment for about $1.6 billion, 33 percent higher than Dell’s offer.
Bear Markets
The MSCI Asia Pacific Index sank 0.8 percent as Japan’s Nikkei 225 fell to its lowest close since May 1, 2009. The gauge has fallen 21 percent since reaching an 18-month high on April 5, a drop that signifies a bear market to some analysts. Vietnam’s VN Index tumbled 3 percent, taking its drop since May 6 to 21 percent.
The decline in U.S. futures indicated the S&P 500 may drop for a fourth day. Purchases of previously owned U.S. homes plunged 13.4 percent from June to a 4.65 million annual rate, a third decline in a row, according to the median of 74 forecasts in a Bloomberg News survey. The report from the National Association of Realtors is due at 10 a.m. in Washington.
The yield spread between Irish and German 10-year government debt widened two basis points to 307 basis points, near the level set before the European Union and the International Monetary Fund set up a 750 billion euro ($947 billion) fund to protect the single currency on May 8. The Greek-German spread gained five basis points to 867 basis points, and the Portuguese-German spread increased nine basis points to 306 basis points.
Treasuries, Bunds
Treasuries and German government bonds rose, with the yield on 10- and 30-year bunds falling to record lows. U.S. 10-year yields fell five basis points to 2.55 percent, within one basis point of the least since March 2009. German 10-year yields fell four basis points to 2.24 percent, while 30-year yields also dropped four basis points, to 2.87 percent. U.S. two-year note yields were within one basis point of a record low before the sale $37 billion of the securities.
Europe is at risk of going into a so-called “double-dip” recession, as governments cut spending to narrow their fiscal deficits, Nobel Prize-winning economist Joseph Stiglitz said in an interview with Dublin-based RTE Radio today.
The pound fell to its weakest level in almost a month against the dollar after Bank of England policy maker Martin Weale said the U.K. economy may slip back into a recession. The British currency depreciated 0.6 percent to $1.5412 and weakened 0.5 percent to 82 pence per euro.
Yen, Dollar
The yen appreciated 0.8 percent to 84.45 per dollar, the strongest since July 1995. It jumped 1.6 percent against the Korean won. The dollar climbed against all its major peers except the yen, while the euro fell 0.2 percent to its lowest against the U.S. currency since July 13.
Industrial metals declined for a fifth day, led by a 2 percent drop in nickel prices on the London Metal Exchange. Inventories of nickel, copper, lead and zinc all increased in warehouses monitored by the LME, signaling slowing demand for the metals. Oil declined 0.9 percent to $72.43 a barrel in New York as analysts estimated that U.S. inventories of crude rose last week.
Raw-materials stocks led a 1 percent drop in the MSCI Emerging Markets Index, the biggest decline in nine days. The Philippine Stock Exchange Index sank 2.3 percent, the most in 11 weeks, and the peso fell 1 percent against the dollar after at least eight tourists from Hong Kong were killed by gunfire yesterday in a bus siege in Manila.
Hungary’s forint dropped to a three-week low against the euro after the central bank raised its inflation forecast and lowered its growth estimates for the next two years. South Africa’s rand slumped 0.7 percent versus the dollar before a report today that may show economic growth slowed in the second quarter.
To contact the reporter on this story: Stephen Kirkland in London at skirkland@bloomberg.net
Asia Slowdown to Have `Serious Negative Impact' on Europe, EU's Rehn Says
By Sara Eisen and Meera Louis - Aug 24, 2010 3:12 PM GMT+0800
Business ExchangeTwitterDeliciousDiggFacebookLinkedInNewsvinePropellerYahoo! BuzzPrint Slower economic growth in China, India or other Asian economies would have a “serious negative impact” on Europe’s growth, the European Union’s economic chief said.
Olli Rehn, the EU commissioner for economic and monetary affairs, said yesterday in a Bloomberg Television interview that a slowdown in the U.S. recovery and turmoil in the sovereign debt markets also could cause concern in Europe.
Strengthening global growth helped Europe’s economy show the fastest expansion in four years in the second quarter after the Greek budget crisis earlier damped confidence in the euro currency and forced governments to step up deficit-cutting measures. Euro-area growth is likely to decelerate in the second half of the year as signs of a slowdown in the U.S. and China dim export prospects.
In the U.S., the world’s biggest economy, the Commerce Department may revise lower its second-quarter growth rate to the slowest since the recovery began, according to the median forecast of economists in a Bloomberg News survey. China’s expansion eased to 10.3 percent in the second quarter and industrial production cooled more than forecast in June, data showed last month, signaling a deeper second-half slowdown.
“Any slowdown in Asia, in the emerging economies of Asia, China, India and others, would have a serious negative impact on economic growth in Europe,” Rehn said in the interview in New York.
Growth Prospects
Asian stocks dropped today and European shares opened lower on concern the global recovery is faltering. The MSCI Asia Pacific Index fell 0.7 percent as of 3 p.m. in Tokyo, and the Dow Jones Stoxx 600 Index declined 1 percent at 8:05 a.m. in London.
John Lipsky, the International Monetary Fund’s first deputy managing director, said on July 27 that the global recovery is likely to be “moderate” as renewed strains in financial markets pose risks to growth prospects.
While economic recovery is “under way” in Europe, Rehn said “it is essential that countries like Greece, Portugal and also Spain address their problems of competitiveness.” Even as gross domestic product in Germany jumped 2.2 percent in the second quarter, Spain’s economy grew just 0.2 percent and Greece, which was forced to seek an EU-led bailout in May, experienced a 1.5 percent contraction.
Greece
The EU said last week that Greece is ahead of schedule in meeting its deficit-cutting commitments under the 110 billion- euro ($139 billion) rescue package, putting the country on track to secure the next loan installment. Greek Prime Minister George Papandreou has cut wages and pensions and increased taxes to qualify for the loans, granted to stave off a default.
Greece’s budget cuts will convince investors that concerns about a debt restructuring are “unfounded,” Rehn wrote in an article published today in the Wall Street Journal.
“We are seeing signs of a gradual stabilization in market sentiment toward Greece,” Rehn wrote. “I am confident that risk perceptions will ease as the adjustment moves forward, which should lay the ground for an eventual orderly return to market access.”
To contact the reporters on this story: Sara Eisen in New York at seisen@bloomberg.net; Meera Louis in Brussels at mlouis1@bloomberg.net.
Business ExchangeTwitterDeliciousDiggFacebookLinkedInNewsvinePropellerYahoo! BuzzPrint Slower economic growth in China, India or other Asian economies would have a “serious negative impact” on Europe’s growth, the European Union’s economic chief said.
Olli Rehn, the EU commissioner for economic and monetary affairs, said yesterday in a Bloomberg Television interview that a slowdown in the U.S. recovery and turmoil in the sovereign debt markets also could cause concern in Europe.
Strengthening global growth helped Europe’s economy show the fastest expansion in four years in the second quarter after the Greek budget crisis earlier damped confidence in the euro currency and forced governments to step up deficit-cutting measures. Euro-area growth is likely to decelerate in the second half of the year as signs of a slowdown in the U.S. and China dim export prospects.
In the U.S., the world’s biggest economy, the Commerce Department may revise lower its second-quarter growth rate to the slowest since the recovery began, according to the median forecast of economists in a Bloomberg News survey. China’s expansion eased to 10.3 percent in the second quarter and industrial production cooled more than forecast in June, data showed last month, signaling a deeper second-half slowdown.
“Any slowdown in Asia, in the emerging economies of Asia, China, India and others, would have a serious negative impact on economic growth in Europe,” Rehn said in the interview in New York.
Growth Prospects
Asian stocks dropped today and European shares opened lower on concern the global recovery is faltering. The MSCI Asia Pacific Index fell 0.7 percent as of 3 p.m. in Tokyo, and the Dow Jones Stoxx 600 Index declined 1 percent at 8:05 a.m. in London.
John Lipsky, the International Monetary Fund’s first deputy managing director, said on July 27 that the global recovery is likely to be “moderate” as renewed strains in financial markets pose risks to growth prospects.
While economic recovery is “under way” in Europe, Rehn said “it is essential that countries like Greece, Portugal and also Spain address their problems of competitiveness.” Even as gross domestic product in Germany jumped 2.2 percent in the second quarter, Spain’s economy grew just 0.2 percent and Greece, which was forced to seek an EU-led bailout in May, experienced a 1.5 percent contraction.
Greece
The EU said last week that Greece is ahead of schedule in meeting its deficit-cutting commitments under the 110 billion- euro ($139 billion) rescue package, putting the country on track to secure the next loan installment. Greek Prime Minister George Papandreou has cut wages and pensions and increased taxes to qualify for the loans, granted to stave off a default.
Greece’s budget cuts will convince investors that concerns about a debt restructuring are “unfounded,” Rehn wrote in an article published today in the Wall Street Journal.
“We are seeing signs of a gradual stabilization in market sentiment toward Greece,” Rehn wrote. “I am confident that risk perceptions will ease as the adjustment moves forward, which should lay the ground for an eventual orderly return to market access.”
To contact the reporters on this story: Sara Eisen in New York at seisen@bloomberg.net; Meera Louis in Brussels at mlouis1@bloomberg.net.
Franklin Templeton says M&A cycle has just begun
Written by Thomson Reuters
Tuesday, 24 August 2010 16:22
Franklin Templeton expects mergers and acquisitions at US companies, especially in the technology sector, to accelerate, as large firms are seeking fast growth, are bulging with cash and valuations are still cheap.
“We are in that early stages of what we see is an M&A cycle,” Grant Bowers, vice president and portfolio manager, who helps manage the US$932 million ($1.3 billion) Franklin US Opportunities fund, told Reuters in an interview.
Tuesday, 24 August 2010 16:22
Franklin Templeton expects mergers and acquisitions at US companies, especially in the technology sector, to accelerate, as large firms are seeking fast growth, are bulging with cash and valuations are still cheap.
“We are in that early stages of what we see is an M&A cycle,” Grant Bowers, vice president and portfolio manager, who helps manage the US$932 million ($1.3 billion) Franklin US Opportunities fund, told Reuters in an interview.
Olam increases offer for NZ farming systems by 27%
Written by Bloomberg
Tuesday, 24 August 2010 10:06
Olam International, a Singapore-based commodity producer, raised its takeover offer 27% after NZ Farming Systems Uruguaysaid the first bid was too low. Shares rose 13%.
Olam increased its bid to 70 New Zealand cents a share from 55 cents, valuing NZ Farming at NZ$171 million ($164.2 million), according to a filing with the New Zealand stock exchange. The new offer beats a 60 cents-a-share bid plan announced last week by Union Agriculture Corp., a Uruguayan landowner.
Tuesday, 24 August 2010 10:06
Olam International, a Singapore-based commodity producer, raised its takeover offer 27% after NZ Farming Systems Uruguaysaid the first bid was too low. Shares rose 13%.
Olam increased its bid to 70 New Zealand cents a share from 55 cents, valuing NZ Farming at NZ$171 million ($164.2 million), according to a filing with the New Zealand stock exchange. The new offer beats a 60 cents-a-share bid plan announced last week by Union Agriculture Corp., a Uruguayan landowner.
Stocks Fluctuate as Economy Concerns Offset Takeover Optimism - Bloomberg
Stocks fluctuated, erasing earlier gains, as speculation the economy may slip into another recession offset investor optimism amid more than $1 trillion in takeovers this year. The yen rose to a seven-week high against the euro.
Traders edgy over economy - The Business Times
Published August 23, 2010
WALL STREET INSIGHT
Traders edgy over economy
Mega mergers fail to inspire as jobs, manufacturing data sway wary market
By ANDREW MARKS
NEW YORK CORRESPONDENT
THE summer doldrums are firmly in place with what feels like half of Wall Street away on vacation but there is no mistaking the nervous tension pervading the stock market's psychology as August draws to a close.
Three straight days of advances early in the week produced hopes for a summer rally that might provide investors with some positive momentum, and a breakthrough of the range-bound trading.
But those hopes sagged in the face of another round of discouraging news on the employment front, and the nascent rally quickly gave way to a sell-off that has traders bracing themselves for a stressful week.
'It's hard to believe that there's going to be much meaningful action this time of year, when so many people are away and market volume is so low, but I've got the feeling from the jumpy way the market reacted to the weekly jobless claims data on Thursday that the market is pushing to the edge of a significant negative move,' said Mike Kennedy a money manager at Case Asset Advisers after last Friday's closing bell.
WALL STREET INSIGHT
Traders edgy over economy
Mega mergers fail to inspire as jobs, manufacturing data sway wary market
By ANDREW MARKS
NEW YORK CORRESPONDENT
THE summer doldrums are firmly in place with what feels like half of Wall Street away on vacation but there is no mistaking the nervous tension pervading the stock market's psychology as August draws to a close.
Three straight days of advances early in the week produced hopes for a summer rally that might provide investors with some positive momentum, and a breakthrough of the range-bound trading.
But those hopes sagged in the face of another round of discouraging news on the employment front, and the nascent rally quickly gave way to a sell-off that has traders bracing themselves for a stressful week.
'It's hard to believe that there's going to be much meaningful action this time of year, when so many people are away and market volume is so low, but I've got the feeling from the jumpy way the market reacted to the weekly jobless claims data on Thursday that the market is pushing to the edge of a significant negative move,' said Mike Kennedy a money manager at Case Asset Advisers after last Friday's closing bell.
Commodities still buoyant - The Business Times
Executive Money
Published August 18, 2010
Commodities still buoyant
Thanks to rising demand and growth in the emerging markets, reports GENEVIEVE CUA
COMMODITY investments hit a record US$300 billion in assets under management in July, but will the party continue?
Barclays Capital, in its August issue of The Commodity Investor, believes that strong medium term demand still underpins the asset class, thanks to growth in the emerging markets.
It says, however, that growing uncertainty over the economic outlook has made the choice of investment strategy 'a much more complicated task' than a few months ago. 'A deterioration in growth prospects is perhaps reducing some of the upside in oil and industrial metal markets. However, there would need to be the prospect of some very large shifts in the economic landscape before we could be persuaded that downside risks to prices are very large in all but a few markets,' it said.
Barclays says big swings in sentiment have obscured a steady improvement in demand for most commodities. 'So far this year, global demand has surprised to the upside across regions for both oil and other commodities, and that process has further to run, in our view.'
Recently Goldman Sachs reiterated its 'overweight' call on commodities, even though it pared its 12-month forecast for the GSCI Enhanced Total Return Index to 19 per cent from 21 per cent. Commodities have suffered yet another bout of volatility, no thanks to renewed concerns over whether a double-dip recession was imminent.
Goldman is expecting prices to be choppy, but it also believes that rising demand in the emerging markets is likely to keep the supply balance tight.
Barclays' paper addresses two top investor concerns - the sustainability of demand and the close correlation between commodities and other risk assets. The latter has intensified debate over whether commodities qualify as an asset class.
Barclays is forecasting an 'all-time high' in global demand this year, in markets ranging from crude oil, aluminium, copper, corn and soybean. 'The strength of emerging market demand was a key factor in the much-quicker-than-expected V-shaped recovery in demand experienced in many commodity markets and suggests that this component of global consumption has now reached critical mass.'
While demand slumped in mature economies throughy 2009, demand in emerging markets 'barely missed a beat through the credit crisis', it said. Non-OECD oil demand was negative for only one quarter in 2009. Chinese copper demand turned negative in 2008 and early 2009, but has since recovered to hit a high last year, and is now running past that high.
Barclays expects the key drivers of commodity demand to be China, India, the Middle East and Brazil.
On commodities' role in a portfolio, Barclays believes it is premature to draw conclusions on permanent changes in asset class behaviour based on the last couple of years. It points out that commodities did provide diversification benefits in the early stages of the credit crisis.
Between Q4 2007when banks began to reveal the scale of their subprime mortgage exposures, and the second half of 2008, commodity returns based on the DJ-UBS index were 33 per cent, compared with the S&P500's minus 15 per cent. Commodities began to cave in the third quarter of 2008 along with other asset classes, as markets began to price in massive dislocations.
'The strong link between commodities and other asset classes is neither surprising nor new,' it said, citing other crises such as the Gulf war and dot com bubble. 'In each of the cases, commodities went through a period where they were strongly linked with trends in other markets, but subsequently reasserted their independence.'
Published August 18, 2010
Commodities still buoyant
Thanks to rising demand and growth in the emerging markets, reports GENEVIEVE CUA
COMMODITY investments hit a record US$300 billion in assets under management in July, but will the party continue?
Barclays Capital, in its August issue of The Commodity Investor, believes that strong medium term demand still underpins the asset class, thanks to growth in the emerging markets.
It says, however, that growing uncertainty over the economic outlook has made the choice of investment strategy 'a much more complicated task' than a few months ago. 'A deterioration in growth prospects is perhaps reducing some of the upside in oil and industrial metal markets. However, there would need to be the prospect of some very large shifts in the economic landscape before we could be persuaded that downside risks to prices are very large in all but a few markets,' it said.
Barclays says big swings in sentiment have obscured a steady improvement in demand for most commodities. 'So far this year, global demand has surprised to the upside across regions for both oil and other commodities, and that process has further to run, in our view.'
Recently Goldman Sachs reiterated its 'overweight' call on commodities, even though it pared its 12-month forecast for the GSCI Enhanced Total Return Index to 19 per cent from 21 per cent. Commodities have suffered yet another bout of volatility, no thanks to renewed concerns over whether a double-dip recession was imminent.
Goldman is expecting prices to be choppy, but it also believes that rising demand in the emerging markets is likely to keep the supply balance tight.
Barclays' paper addresses two top investor concerns - the sustainability of demand and the close correlation between commodities and other risk assets. The latter has intensified debate over whether commodities qualify as an asset class.
Barclays is forecasting an 'all-time high' in global demand this year, in markets ranging from crude oil, aluminium, copper, corn and soybean. 'The strength of emerging market demand was a key factor in the much-quicker-than-expected V-shaped recovery in demand experienced in many commodity markets and suggests that this component of global consumption has now reached critical mass.'
While demand slumped in mature economies throughy 2009, demand in emerging markets 'barely missed a beat through the credit crisis', it said. Non-OECD oil demand was negative for only one quarter in 2009. Chinese copper demand turned negative in 2008 and early 2009, but has since recovered to hit a high last year, and is now running past that high.
Barclays expects the key drivers of commodity demand to be China, India, the Middle East and Brazil.
On commodities' role in a portfolio, Barclays believes it is premature to draw conclusions on permanent changes in asset class behaviour based on the last couple of years. It points out that commodities did provide diversification benefits in the early stages of the credit crisis.
Between Q4 2007when banks began to reveal the scale of their subprime mortgage exposures, and the second half of 2008, commodity returns based on the DJ-UBS index were 33 per cent, compared with the S&P500's minus 15 per cent. Commodities began to cave in the third quarter of 2008 along with other asset classes, as markets began to price in massive dislocations.
'The strong link between commodities and other asset classes is neither surprising nor new,' it said, citing other crises such as the Gulf war and dot com bubble. 'In each of the cases, commodities went through a period where they were strongly linked with trends in other markets, but subsequently reasserted their independence.'
S'poreans ill equipped for retirement, survey shows
Mon, Aug 23, 2010, my paper, By Reico Wong
SINGAPOREANS are not savvy enough when it comes to planning their long-term finances and are, thus, generally unprepared for retirement, a study by HSBC has revealed.
The HSBC Future of Retirement (FoR) survey, which polled 15,000 respondents across 15 markets and about 1,000 Singaporeans aged 30-70, found that a staggering 91 per cent of locals do not have any idea what their retirement income will look like.
HSBC said that this feeling of unpreparedness among Singaporeans was in part due to a tendency to focus more strongly on the short term.
They had limited understanding about their funds for the long haul, as reflected in the 23 per cent who indicated that they are confident about their long-term finances.
This is despite 26 per cent viewing retirement as a strong motivation to save. About 40 per cent of the locals aged 30 to 50 years said they were willing to save between $500 and $800 each month for retirement.
"This shows that Singaporeans are aware of the need for retirement planning but may not have taken action to prepare for it, perhaps because they don't know where to start," said Mr Walter de Oude, chief executive of HSBC Insurance.
He added that Singaporeans should be proactive in seeking the aid of financial advisers, even if they are saving regularly.
"They'll be able to better identify gaps in retirement planning and ensure that they are on track to achieve the retirement lifestyle they want," he said.
On the back of the FoR survey, HSBC will announce the launch of its new retirement plan, SecureIncome, today.
Targeted at individuals aged 40 to 65 years old, the plan is designed to provide a monthly income or lump-sum savings for one's future needs.
Customers are required to save at least $200 per month, and can choose to accumulate their savings over 10 years, or to age 55. One to 1.5 per cent yield is guaranteed per annum.
The policy can be extended on expiry, and customers can either leave the funds with the insurer to earn interest once again, or receive a monthly income for the next 10 years, together with a non-guaranteed monthly dividend.
If they choose the latter, they also have the option of leaving the income payments with the insurer. They will then receive additional non-guaranteed monthly dividends and interest.
Commenting on the new product, Mr de Oude said: "SecureIncome will make retirement planning less daunting, given its simple design and flexibility."
The policy allows for the deferment of premiums for a year, in the event of unemployment.
It also has a terminal-illness benefit that pays the death benefit in advance.
HSBC has, in recent years, increasingly boosted its suite of retirement solutions.
Past products from the group include Growth Manager, an investment- linked plan that facilitates regular investment and asset accumulation; and GoalSaver, which targets those younger and healthier but want slightly higher insurance coverage.
SINGAPOREANS are not savvy enough when it comes to planning their long-term finances and are, thus, generally unprepared for retirement, a study by HSBC has revealed.
The HSBC Future of Retirement (FoR) survey, which polled 15,000 respondents across 15 markets and about 1,000 Singaporeans aged 30-70, found that a staggering 91 per cent of locals do not have any idea what their retirement income will look like.
HSBC said that this feeling of unpreparedness among Singaporeans was in part due to a tendency to focus more strongly on the short term.
They had limited understanding about their funds for the long haul, as reflected in the 23 per cent who indicated that they are confident about their long-term finances.
This is despite 26 per cent viewing retirement as a strong motivation to save. About 40 per cent of the locals aged 30 to 50 years said they were willing to save between $500 and $800 each month for retirement.
"This shows that Singaporeans are aware of the need for retirement planning but may not have taken action to prepare for it, perhaps because they don't know where to start," said Mr Walter de Oude, chief executive of HSBC Insurance.
He added that Singaporeans should be proactive in seeking the aid of financial advisers, even if they are saving regularly.
"They'll be able to better identify gaps in retirement planning and ensure that they are on track to achieve the retirement lifestyle they want," he said.
On the back of the FoR survey, HSBC will announce the launch of its new retirement plan, SecureIncome, today.
Targeted at individuals aged 40 to 65 years old, the plan is designed to provide a monthly income or lump-sum savings for one's future needs.
Customers are required to save at least $200 per month, and can choose to accumulate their savings over 10 years, or to age 55. One to 1.5 per cent yield is guaranteed per annum.
The policy can be extended on expiry, and customers can either leave the funds with the insurer to earn interest once again, or receive a monthly income for the next 10 years, together with a non-guaranteed monthly dividend.
If they choose the latter, they also have the option of leaving the income payments with the insurer. They will then receive additional non-guaranteed monthly dividends and interest.
Commenting on the new product, Mr de Oude said: "SecureIncome will make retirement planning less daunting, given its simple design and flexibility."
The policy allows for the deferment of premiums for a year, in the event of unemployment.
It also has a terminal-illness benefit that pays the death benefit in advance.
HSBC has, in recent years, increasingly boosted its suite of retirement solutions.
Past products from the group include Growth Manager, an investment- linked plan that facilitates regular investment and asset accumulation; and GoalSaver, which targets those younger and healthier but want slightly higher insurance coverage.
Golden Agri cut to Neutral by OSK; $0.50 target
OSK has downgraded Golden Agri-Resources (E5H.SG) to Neutral from Trading Buy, citing uncertainty stemming from Greenpeace’s allegations of plantation group engaging in environmentally harmful practices, giving false information to investors, says Dow Jones.
OSK cuts target price to $0.50 from $0.68, based on 11x FY11 earnings vs 15x previously: “The company’s chairman has previously admitted that in an organization as large as this, there are bound to be certain areas of weaknesses, which led to the company strengthening its standard operating procedures. Still, the uncertainty created by the possibility of being investigated by the authorities could weaken the stock price considerably.”
Stock off 1.8% at $0.545.
OSK cuts target price to $0.50 from $0.68, based on 11x FY11 earnings vs 15x previously: “The company’s chairman has previously admitted that in an organization as large as this, there are bound to be certain areas of weaknesses, which led to the company strengthening its standard operating procedures. Still, the uncertainty created by the possibility of being investigated by the authorities could weaken the stock price considerably.”
Stock off 1.8% at $0.545.
Funds may offload more: AmFraser
Initial interest in Singapore shares dissipates by midday as investors opt to cash out, await better entry levels, according to Dow Jones.
Market breadth negative at just over 1.5 decliners for every gainer vs slight positive bias in early trade. STI off 0.5% 2,921.84, with support still at 2,900.
AmFraser Securities strategist Najeeb Jarhom expects more downside in near term: “With no bullish impetus foreseen in coming weeks till the next reporting season in late October to November, fund managers may either leave their portfolios untouched or more likely lighten in anticipation of unforeseen events.”
Notable decliners among STI components include Golden Agri-Resources (E5H.SG), off 1.8% at $0.545, Jardine C&C (C07.SG), off 1.9% at $32.36, Noble Group (N21.SG), off 1.8% at $1.60, Singapore Airlines (C6L.SG), off 1.2% at $15.42. Overall market volume thin at 628.3 million shares worth $544.7 million.
Market breadth negative at just over 1.5 decliners for every gainer vs slight positive bias in early trade. STI off 0.5% 2,921.84, with support still at 2,900.
AmFraser Securities strategist Najeeb Jarhom expects more downside in near term: “With no bullish impetus foreseen in coming weeks till the next reporting season in late October to November, fund managers may either leave their portfolios untouched or more likely lighten in anticipation of unforeseen events.”
Notable decliners among STI components include Golden Agri-Resources (E5H.SG), off 1.8% at $0.545, Jardine C&C (C07.SG), off 1.9% at $32.36, Noble Group (N21.SG), off 1.8% at $1.60, Singapore Airlines (C6L.SG), off 1.2% at $15.42. Overall market volume thin at 628.3 million shares worth $544.7 million.
SingTel appoints Hui as CEO of International Business
Written by Bloomberg
Monday, 23 August 2010 19:32
Singapore Telecommunications, Southeast Asia’s largest phone operator, appointed Hui Weng Cheong as chief executive officer of international operations to replace Lim Chuan Poh, who is retiring.
Monday, 23 August 2010 19:32
Singapore Telecommunications, Southeast Asia’s largest phone operator, appointed Hui Weng Cheong as chief executive officer of international operations to replace Lim Chuan Poh, who is retiring.
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