By Jonathan Burgos and Norie Kuboyama - Sep 3, 2010 12:42 PM GMT+0800
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Play VideoSept. 2 (Bloomberg) -- John Vail, chief global strategist at Nikko Asset Management, talks about equity investment opportunities in Japan and the impact of the strengthening yen on strategy. He speaks with Mark Barton on Bloomberg Television's "Countdown." (Source: Bloomberg)
Play VideoSept. 2 (Bloomberg) -- Bloomberg's Elizabeth Faublas reports on the performance of the U.S. equity market today. U.S. stocks rose, with the Standard & Poor’s 500 Index building on its biggest rally in almost two months, after retail sales improved, initial jobless claims fell and pending home sales unexpectedly increased. Bloomberg's Pimm Fox also speaks. (Source: Bloomberg)
Most Asian stocks rose, led by technology companies, after U.S. reports showed an unexpected increase in pending home sales and improved retail sales.
Sony Corp., the electronics maker that gets 22 percent of sales from the U.S., rose 1.6 percent. James Hardie Industries SE, the biggest seller of home siding in the U.S., climbed 4.4 percent in Sydney. Toyota Motor Corp., an automaker that earns about 70 percent of its revenue abroad, increased 1.2 percent. OZ Minerals Ltd., an Australian copper and gold producer, surged 5 percent as commodity prices advanced.
“Investors are kind of relieved because a downward spiral in the global economy had a pause this week,” said Naoki Fujiwara, who helps oversee about $6 billion in Tokyo at Shinkin Asset Management Co. “But investors won’t jump into buying shares just because of that, since there is still a strong sense of uncertainty.”
The MSCI Asia Pacific Index gained 0.3 percent to 119.63 as of 1:39 p.m. in Tokyo, extending its advanced for a third day. The gauge advanced 2.4 percent this week after Japan’s government said it’s preparing a new stimulus plan to help businesses threatened by the strong yen and as reports showed Chinese and U.S. manufacturing, as well as the Australian economy, grew faster than economists estimated.
Japan’s Nikkei 225 Stock Average gained 0.6 percent. Taiwan’s Taiex Index climbed 1.3 percent, the most among Asia Pacific major gauges as the nation’s technology companies rallied.
South Korea’s Kospi Index and Hong Kong’s Hang Seng Index rose at least 0.1 percent. New Zealand’s NZX 50 Index increased 0.7 percent.
Chain Store Data
Futures on the Standard & Poor’s 500 Index fell 0.2 percent today. In New York yesterday, the index increased 0.9 percent, rounding out its biggest two-day gain since early July, after a report showed pending sales of existing U.S. houses climbed 5.2 percent in July, compared with a 1 percent drop economists had estimated in a Bloomberg survey.
Same-store sales at 30 U.S. retail chains probably rose 3.5 percent in August, according to Retail Metrics Inc., beating analysts’ estimates of 2.8 percent.
“The excessive pessimism about the U.S. economy is coming to a halt,” said Juichi Wako, a senior strategist at Tokyo- based Nomura Holdings Inc. “The market was totally pessimistic, but a ray of sunlight has come out this week.”
Exporters Advance
Sony, the maker of Bravia televisions, climbed 1.6 percent to 2,466 yen. Canon Inc., a Japanese camera maker that gets 28 percent of its revenue from the Americas, rose 0.9 percent to 3,535 yen. James Hardie, which counts the U.S. as its biggest market, climbed 4.4 percent to A$5.51 in Sydney.
Japanese exporters also increased as the yen depreciated to as low as 84.43 against the dollar today in Tokyo, compared with 84.17 at the close of stock trading yesterday. A weaker yen boosts overseas income at Japanese companies when converted into their home currency.
Toyota Motor, the world’s biggest automaker, gained 1.2 percent to 2,885 yen. Toshiba Corp., the world’s second-biggest maker of flash memory, advanced 0.8 percent to 387 yen.
The MSCI Asia Pacific Index has declined 2.2 percent from a three-month high on Aug. 6 as the yen’s advance to a 15-year high against the dollar and disappointing U.S. data fueled global growth concerns. U.S. government reports released last month showed orders for durable goods increased less than forecast in July and companies hired fewer workers in the same month.
Tech Stocks Climb
Stocks on the MSCI gauge are valued at an average 13.7 times estimated earnings, compared with 13.1 times for the S&P 500 Index and 11.6 times for the Stoxx Europe 600 Index.
A measure of technology companies posted the biggest advance among the 10 industry groups in the MSCI index amid expectations demand will increase.
In Taipei, Realtek Semiconductor Corp., a maker of chips used in computers, surged 6.9 percent, the second-biggest advance on the MSCI Asia Pacific Index, to NT$67.9. Investors are speculating revenue will rise this month, said Lucas Chen, an analyst at Polaris Securities Co.
Chimei Innolux Corp., Taiwan’s largest maker of liquid- crystal displays, advanced 6.9 percent to NT$35.75, amid speculation fourth-quarter demand for consumer electronics will improve from the previous three months, said Richard Ko, an analyst at Jih Sun Securities Co.
Esprit Declines
PT Indosat, Indonesia’s second-biggest phone operator, surged 7.1 percent to 4,900 rupiah after Deustche Bank AG raised the stock to “hold’ from “sell.”
Raw-material producers climbed after crude oil for October delivery rose 1.5 percent yesterday in New York. The London Metal Exchange Index of six metals including aluminum and copper advanced for a second day yesterday to the highest level since April 30.
OZ Minerals Ltd., which has mines in Africa and Asia, climbed 5 percent to A$1.37, its highest level since October 2008, in Sydney. Mitsubishi Corp., Japan’s biggest commodities trader, rose 0.7 percent to 1,840 yen. Inpex Corp., Japan’s largest oil explorer, climbed 1.4 percent to 406,000 yen.
Among stocks that declined today, Esprit Holdings Ltd., the biggest clothier listed in Hong Kong, tumbled 5.2 percent to HK$40.65 after JPMorgan Chase & Co and CIMB Group Holdings Bhd. cut their ratings on the stock. The company yesterday reported full-year earnings that missed analysts’ estimates.
To contact the reporters on this story: Jonathan Burgos in Singapore at jburgos4@bloomberg.net; Norie Kuboyama in Tokyo at nkuboyama@bloomberg.net
Showing posts with label Bloomberg. Show all posts
Showing posts with label Bloomberg. Show all posts
Friday, September 3, 2010
Tuesday, August 31, 2010
Mr Obama - Biggest Bad move of the year? I feel you are.
Obama Blows Off 3 Billion Wannabe Billionaires: William Pesek
By William Pesek - Aug 30, 2010 3:00 AM GMT+0800
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William Pesek
For a guy who talked big about re- engaging Asia, Barack Obama has a funny way of showing it.
Nobody doubts the U.S. president’s team is supremely busy juggling oil spills, Muslim cultural centers, convincing ignoramuses he has a birth certificate and averting recession. Yet there’s no excuse for blowing off last week’s Association of Southeast Asian Nations trade meeting in Vietnam.
It was a dreadful decision and its significance didn’t escape members of the fourth-biggest market for U.S. goods. This is no time for the U.S. to be taking the most dynamic economies for granted. Not with China becoming an ever-bigger player both in Asia and globally.
On any list of George W. Bush’s failings, ignoring Asia deserves a prominent mention. When his administration bothered with Asia, it was all terrorism all the time. There was little talk about potential, cooperation or partnership. Bush just wanted to know how many bad guys governments were rounding up.
He tried to make amends in the twilight of his presidency, naming a U.S. ambassador to Asean in 2008. Recently, Obama tapped that official, Scot Marciel, to be U.S. ambassador to Indonesia. Obama hasn’t bothered to name a new Asean envoy.
The U.S. missed a timely opportunity last week to confer with the economic ministers of Asean’s 10 members, along with counterparts from Australia, China, India, Japan, South Korea, New Zealand and Russia.
Blowing Off Asia
At a time of global crisis, one the U.S. caused, does Obama really want to be sending a message of indifference to Asia? Coming a week after the announcement that China’s economy has surpassed Japan’s, the U.S.’s closest Asian ally, you would think the White House would be stepping up a charm offensive. Instead, it risks turning off the region.
“Confidence in the United States and its ability to lead and follow through on commitments is based on its economic well- being, and that status is being questioned by friends and competitors alike in Asia,” Ernest Bower, an analyst at the Center for Strategic and International Studies in Washington, wrote in a recent report.
China’s rapid growth is slowly, but surely, chipping away at the U.S.’s importance. Granted, at almost three times China’s economy, the U.S. will long be a vital customer for Asia’s goods. Officials here also know that depending on growth in a developing economy is risky.
U.S. Brand
Yet neglecting future trade ties with the liveliest economies is just plain dumb. Asia is churning out a fast- growing number of billionaires and is home to 3 billion consumers who aspire to join them. The U.S. wants to be in on that process.
Obama must not forget just how much the 2008 meltdown damaged the U.S. brand. During Asia’s 1990s crisis, U.S. officials preached the free-market gospel. They told leaders to raise interest rates to support currencies, slash spending and debt, scrap subsidies and avoid bailing out industries. When the U.S. faced a crisis, it did exactly the opposite.
There’s also considerable grumbling over the dollar. True or not, the theory that the U.S. is devaluing to help exporters is making the rounds. That perception is a problem if you want China to let its currency strengthen. It doesn’t play well in Japan, where panic is rising over the strong yen.
Nor can the U.S. complain about corruption in Asia. Incestuous ties between Washington and Wall Street helped cause the U.S. crisis. Conflicts of interest between regulators and oil companies led to BP Plc’s devastating Gulf of Mexico leak. The U.S. has little moral high ground on dodgy dealings.
Corruption’s Cost
That’s a shame, considering the magnitude of Asia’s corruption fight. In Indonesia, for example, officials face an uphill battle to weed out graft and allow more of the nation’s people to benefit from 6 percent growth.
In the Philippines, the honeymoon enjoyed by Benigno Aquino, since becoming president in June, ended last week in gunfire. Eight Hong Kong tourists being held hostage in Manila died in a botched rescue attempt. The tragedy was emblematic of what plagues the nation’s economy.
The gunman was a former police inspector who was dismissed on allegations of extortion. The standoff’s surreal finale suggested a breakdown in the nation’s security apparatus, ineptness at many levels and weak diplomacy. Corruption is the common link in all these shortcomings.
Lost Opportunity
Obama got off to a good start, becoming the first U.S. leader to meet with Asean in November. Vietnam was the perfect opportunity to go further -- to discuss views on credit markets, North Korea’s provocations, China’s currency, Australia’s election, Russia’s growth prospects, and Japanese deflation.
This last topic is a growing concern. Not only have consumer prices fallen for 17 consecutive months, but Japan now has a leadership battle on its hands. Prime Minister Naoto Kan faces a challenge to remain head of the ruling party by veteran kingmaker Ichiro Ozawa. It’s the last thing Japan needs: its sixth prime minister in three years.
Obama’s team could have learned about all of this, and much more, if it had only shown up in Asia. It should do so as soon as possible.
(William Pesek is a Bloomberg News columnist. The opinions expressed are his own.)
To contact the writer of this column: William Pesek in Tokyo at wpesek@bloomberg.net
By William Pesek - Aug 30, 2010 3:00 AM GMT+0800
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Business ExchangeTwitterDeliciousDiggFacebookLinkedInNewsvinePropellerYahoo! BuzzPrint Bloomberg Opinion
William Pesek
For a guy who talked big about re- engaging Asia, Barack Obama has a funny way of showing it.
Nobody doubts the U.S. president’s team is supremely busy juggling oil spills, Muslim cultural centers, convincing ignoramuses he has a birth certificate and averting recession. Yet there’s no excuse for blowing off last week’s Association of Southeast Asian Nations trade meeting in Vietnam.
It was a dreadful decision and its significance didn’t escape members of the fourth-biggest market for U.S. goods. This is no time for the U.S. to be taking the most dynamic economies for granted. Not with China becoming an ever-bigger player both in Asia and globally.
On any list of George W. Bush’s failings, ignoring Asia deserves a prominent mention. When his administration bothered with Asia, it was all terrorism all the time. There was little talk about potential, cooperation or partnership. Bush just wanted to know how many bad guys governments were rounding up.
He tried to make amends in the twilight of his presidency, naming a U.S. ambassador to Asean in 2008. Recently, Obama tapped that official, Scot Marciel, to be U.S. ambassador to Indonesia. Obama hasn’t bothered to name a new Asean envoy.
The U.S. missed a timely opportunity last week to confer with the economic ministers of Asean’s 10 members, along with counterparts from Australia, China, India, Japan, South Korea, New Zealand and Russia.
Blowing Off Asia
At a time of global crisis, one the U.S. caused, does Obama really want to be sending a message of indifference to Asia? Coming a week after the announcement that China’s economy has surpassed Japan’s, the U.S.’s closest Asian ally, you would think the White House would be stepping up a charm offensive. Instead, it risks turning off the region.
“Confidence in the United States and its ability to lead and follow through on commitments is based on its economic well- being, and that status is being questioned by friends and competitors alike in Asia,” Ernest Bower, an analyst at the Center for Strategic and International Studies in Washington, wrote in a recent report.
China’s rapid growth is slowly, but surely, chipping away at the U.S.’s importance. Granted, at almost three times China’s economy, the U.S. will long be a vital customer for Asia’s goods. Officials here also know that depending on growth in a developing economy is risky.
U.S. Brand
Yet neglecting future trade ties with the liveliest economies is just plain dumb. Asia is churning out a fast- growing number of billionaires and is home to 3 billion consumers who aspire to join them. The U.S. wants to be in on that process.
Obama must not forget just how much the 2008 meltdown damaged the U.S. brand. During Asia’s 1990s crisis, U.S. officials preached the free-market gospel. They told leaders to raise interest rates to support currencies, slash spending and debt, scrap subsidies and avoid bailing out industries. When the U.S. faced a crisis, it did exactly the opposite.
There’s also considerable grumbling over the dollar. True or not, the theory that the U.S. is devaluing to help exporters is making the rounds. That perception is a problem if you want China to let its currency strengthen. It doesn’t play well in Japan, where panic is rising over the strong yen.
Nor can the U.S. complain about corruption in Asia. Incestuous ties between Washington and Wall Street helped cause the U.S. crisis. Conflicts of interest between regulators and oil companies led to BP Plc’s devastating Gulf of Mexico leak. The U.S. has little moral high ground on dodgy dealings.
Corruption’s Cost
That’s a shame, considering the magnitude of Asia’s corruption fight. In Indonesia, for example, officials face an uphill battle to weed out graft and allow more of the nation’s people to benefit from 6 percent growth.
In the Philippines, the honeymoon enjoyed by Benigno Aquino, since becoming president in June, ended last week in gunfire. Eight Hong Kong tourists being held hostage in Manila died in a botched rescue attempt. The tragedy was emblematic of what plagues the nation’s economy.
The gunman was a former police inspector who was dismissed on allegations of extortion. The standoff’s surreal finale suggested a breakdown in the nation’s security apparatus, ineptness at many levels and weak diplomacy. Corruption is the common link in all these shortcomings.
Lost Opportunity
Obama got off to a good start, becoming the first U.S. leader to meet with Asean in November. Vietnam was the perfect opportunity to go further -- to discuss views on credit markets, North Korea’s provocations, China’s currency, Australia’s election, Russia’s growth prospects, and Japanese deflation.
This last topic is a growing concern. Not only have consumer prices fallen for 17 consecutive months, but Japan now has a leadership battle on its hands. Prime Minister Naoto Kan faces a challenge to remain head of the ruling party by veteran kingmaker Ichiro Ozawa. It’s the last thing Japan needs: its sixth prime minister in three years.
Obama’s team could have learned about all of this, and much more, if it had only shown up in Asia. It should do so as soon as possible.
(William Pesek is a Bloomberg News columnist. The opinions expressed are his own.)
To contact the writer of this column: William Pesek in Tokyo at wpesek@bloomberg.net
Tuesday, August 24, 2010
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.
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.
Tuesday, August 17, 2010
Hong Kong Land Fetches $528 Million at Auction, Beating Analyst Estimates
Billionaire Li Ka-shing’s Cheung Kong (Holdings) Ltd. paid a higher-than-estimated HK$7.61 billion ($979 million) for two Hong Kong development sites, signaling confidence in the property market four days after the government stepped up efforts to cool home prices.
Cheung Kong bought a property in the Ho Man Tin district for HK$4.1 billion and a plot in Hung Hom for HK$3.51 billion at a government land auction today. Both sites fetched more than the highest forecast in a Bloomberg survey of seven analysts.
The prices defy the government’s Aug. 13 announcement that it will tighten mortgage rules and boost land supply to curb a 45 percent jump in housing prices since the start of last year. Financial Secretary John Tsang said home values are approaching the level of 1997, the height of a previous bubble that was followed by a six-year slump.
Cheung Kong bought a property in the Ho Man Tin district for HK$4.1 billion and a plot in Hung Hom for HK$3.51 billion at a government land auction today. Both sites fetched more than the highest forecast in a Bloomberg survey of seven analysts.
The prices defy the government’s Aug. 13 announcement that it will tighten mortgage rules and boost land supply to curb a 45 percent jump in housing prices since the start of last year. Financial Secretary John Tsang said home values are approaching the level of 1997, the height of a previous bubble that was followed by a six-year slump.
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