Archive for April, 2009

Uncertainty still prevails whether the profits will continue even after the rise in Asian shares

Monday, April 13th, 2009

With the preceding week’s profits on Monday the Asian shares witnessed a high once more along with the rise in the financial stocks through the turn down of the service stocks in Australia. The Nikkei of Japan rose to 2.3 percent, NZX-50 of New Zealand had an addition of 0.5 percent, and Kospi of South Korea gained a high by 1.1 percent. But some of the market analysts were not confident about the continual of the market mood due to the economic slump in America.

One of the experts at RBC Capital Markets was the of the view that with some good days in American market previous week the risk seekers will be able to have their first victory after so many months. Last week The Dow Jones Industrial Average increased to 9.01 percent. No main feedback is observed to the remarks made by Mr. Ben who is the Chairman of Federal Reserve. He was the first Federal chairman to be televised on sixty minutes in over two decades. He said that he believes that the economy will soon get normal and this will only happen after the stabilizing of the various banks and financial markets.

Nymex crude oil decreased in the field of electronics after OPEC chose to support enhanced compliance along with the current decrease amid doubts that with the high prices it could endanger the chances of bouncing back in the world economy. Economic stocks witnessed an increase with UFJ FG of Mitsubishi by 4.5 percent, Shinsei Bank increased by twelve percent, and Sumitomo Mitsui FG increased by 5.3 percent. Macquarie included 3.6 percent and Australia’s Commonwealth Bank increased by 3.5 percent.

According to a person having knowledge about the situation the government of Australia has extended the review of China’s Aluminum Corp or the planned US $19.5 billion investment in Rio of Chinalco. Also with an institutional shareholder with Australian Foundation Investment Co was of the view that Chinalco would give major authority and they don’t even have to pay the premium.

Pioneer shares increased by ten percent in Japan while they were not involved in talks with Mitsubishi Electric. According to Yomiuri Shimbun weekend report, the two had started discussion on alliance in car navigation and other fields of auto parts. In Korea the auto stocks were superior following the posting of the good sales in Europe as compared to their competitors. Kia Motors witnessed a high of 4.1 percent and Hyundai Motor increased by 2.1 percent.

In New Zealand Sentiment was assisted by Nuplex saying that for the time being their banks had given up agreements for its senior debt cover ratio and they are also planning a NZ$110 million capita increase.

Their shares got suspended from trade but in the midst of the active stocks, Mainfreight collected 4.0 percent and Pike River Coal increased by ten percent. The market of currency was uneven where the euro dropped early as compared to the yen of Japan and American dollar. After falling to $1.2832 as compared to Friday’s in New York $1.2919 and Y126.38 in Asia the euro was lately recorded at $1.2872. The American dollar was approximately at Y98.11 at first falling to Y97.56. A group of twenty central bankers and finance ministers discussed all new steps in facing the economic slump.

The profit of China Mobile up by 29.6 percent for the year 2008

Monday, April 13th, 2009

On Thursday China Mobile Ltd which is the largest phone company across the world made a statement that their profits for the year 2008 increased 29.6 percent regardless of the slow economy. It was also said that it will benefit from stimulus expenditure in Beijing. One of the Beijing’s company said that the earnings increased to 112.7 billion yuan as the revenue increased 15.4 percent to 412.2 billion yuan regardless of the slump and earthquake in China.

According to the statement released by the company, the China Mobile added over 7.2 million new customers every month in the year 2008 which helped in increasing the total to 456 million accounts. According to the number of customers which is estimated at 649 million accounts, China is ranked as the world’s largest cell phone market.

In a statement made by the chairman and Chief Executive Officer Mr. Wang, the year of 2008 was the year of the challenges and the group attained new heights in different fields. Various efforts made to develop the business really helped in flourishing the business. According to the China Mobile Ltd they are anticipating to earn profit from the China’s four trillion yuan stimulus. This way the demand will be increased for the telecom services and will also support government hard work for encouraging domestic development of the technology.

The economic development of China considerably came down to 6.7 percent for the final quarter of the year 2008 and it was down by 2007’s growth of thirteen percent. There is a prediction that in the current year the development rate will decrease to as low as five percent but it will be a major one as compared to any other main economy. Different carriers and China Mobile Ltd experienced heavy loss in the earthquake that hit Sichuan in the southwest of China on May 12th which killed around ninety thousand. One of the employees of the China Mobile Ltd died during the maintenance work.

In a statement China Mobile Ltd said that they suffered no considerable losses due to the economic crisis across the world. Mr. Wang was quite positive about the rollout of the Chinese Mobile of their 3G cell phone mobile network. The whole system is totally based on Chinese standard and it has not been used before. The experts are of the view that the company probably will face some tests if the company provides the complete services that is based on the technology.

The previous year Beijing reorganized their telecom industry in order to refresh the level of competition. They want to reorganize the carriers in the states in three different groups every carrier with the fixed and mobile resources. Mr. Wang gave a statement that China Mobile Ltd will seek more and more overseas investments but he didn’t mentioned any concrete target markets. In the beginning this year for developing the network, the company will be investing five hundred million with its subordinate in Pakistan, CM Pak Ltd.

The Dollar made a major downfall

Monday, April 13th, 2009

As the Federal Reserve is preparing for buying Treasuries promoted a rumor of degrading the greenback, the dollar came down against the currencies of the six of the main American business associates ever since the Plaza Accord which took place a quarter century ago. In an interview Mr. Bill who is co-chief investment officer of Pacific Investment Management Co. made a statement that it has given rise to the currency related problems to the degree which has led the Fed to purchase what is not liked by the foreign owners.

He also added that the Fed can easily maintain the rate of interest where they want at least from six to eighteen month but in the future it has its own disadvantages. With the central bank making a decision for increasing their balance sheet by $1.14 trillion lowered yields which reduced the value of US assets. This week since the month of January for the first time American currency came down further than $1.36 per euro.

With the Fed’s move encouraged the progress in the commodities, the New Zealand dollar and Norwegian Krone rallied. Yesterday the dollar decreased 4.7 percent in value from $1.2927 at $1.3581 per euro on March 13. On March 19 the American currency reached $1.3737 which was considered the best of the levels since January 9. The dollar also registered a drop of 2.1 percent from 97.94 to 95.93 yen. For a fifth week as compared to the yen, yesterday the euro increased 2.8 percent to 130.28 from 130.48 which was the highest level since December 18.

This week the trade-weighted Dollar Index of ICE came down 4.0 percent at 83.82. This was considered to be the highest reduction since the week in the month of September 1985 when the countries like Japan, West Germany, America, France, and Britain decided in bringing together the dollar’ depreciation as compared to deutsche mark and the yen.

On March 18 the American currency came down 3.2 percent as compared to the euro which is considered to be the highest fall since the sixteen nation’s currency debut back in the year 1999. Mr. David

Mr. David who is the global head of foreign-exchange planning at Barclays Capital in London in an interview said that the falling of the dollar this week has been valued in the policy reaction. This week the stocks witnessed progress and the crude oil. The 500 Index of Standard & Poor raised 1.5 percent and the crude oil increased more than fifty dollars a barrel.

As compared to the dollar the Krone of Norway came out as a major player where it increased seven percent at 6.376. As compared to the American cents the Australian dollar increased 4.3 percent. Norway is the biggest exporter of the crude oil and sixty percent of the abroad sales of Australia comprises of the raw materials. The peso of Colombia raised 3.5 percent at 2,358 per dollar.

According to Mr. Wen, the foreigners have fifty percent of the profitable Treasury debts. China is a major foreign holder along with $739 billion and China is concerned for the holdings of Treasuries and they expect a promise about the safety of the investments.

Goldman Sachs Group Inc has increased their betting objectives on March 19 to the dollar at $1.39 per euro. On the same day Citigroup Inc. also gave a proposal that their customers will buy the euro against the dollar. As the Japan bought the government notes and made the subordinate loans in banks to encourage the economy the yen came down a three month low as compared to the euro.

Ringgit of Malaysia move towards five week high

Monday, April 13th, 2009

Following the rumors of American attempts for removing the bad assets from the banks, Malaysia’s ringgit jumped a five week high. It will help in opening the credit and encourage the up-and-coming market assets and the bonds also registered a fall. The currency witnessed a rise for the fourth day versus the dollar. This happened after the statement made by the American Tresury for financing around one trillion dollars for buying the bad assets in order to renew the economic business.

MSCI Asia Pacific Index for the regional stocks increased on the second day and it is heading towards the biggest close in the two months. According to Mr. Lim who is the head of treasury at ECM Libra Investment Bank Bhd in Kuala Lumpur there is still hope as for the stock market to rise seeing the steps taken by the America. According to the available data in Kuala Lumpur, the rinngit increased 0.3 percent at 3.6264 per dollar. It touched 3.6201, the highest since February 17th.

According to EPFR Global of Massachusetts which is a research company which manages funds worth eleven trillion dollars, the investors are placing $348 million in the equities of the up and coming market. Asia’s five famous currencies increased in which the yen was not included after Mr. Timothy who is Treasury Secretary made a statement that America will be using seventy-four billion dollars to hundred billion dollars for purchasing property assets. It is evident that Public Private Investment Program is dependant on Federal Deposit Insurance Corp and Federal Reserve financing debt assurances.

This year the ringgit dropped down 4.7 percent. For the consecutive second day three year bonds declined and this lifted the yields. The next week the government is also making plans for selling extra securities. According to Bank Negara of Malaysia which is responsible for the sales for the treasury, on March 30th Malaysia will use 4.4 billion ringgit for auction of 2012 notes.

As per their debt schedule next month one more time the government will be selling three year bonds. Mr. Wei who is a fixed income analyst with OSK Investment Bank Bhd in Kuala Lumpur said that as the calendar for auction has been skewed in the direction of temporary bonds, there is still hope some selling difficulties in the three year time. He also added that the supply will increase in the coming month. The price slashed down 0.32 and the basis point is 0.01 percentage point.

Once more Asian shares are on a rise

Monday, April 13th, 2009

On Tuesday the Asian shares once again increased which was maintained by a public gathering on Wall Street for detoxifying the banks of their unpleasant loans. Nikkei 225 of Japan increased 2.1 percent after it increased 3.3 percent along with S&P/ASX 200 of Australia increase by 1.4 percent and Kospi Composite of South Korea up by 1.1 percent. NZX-50 also increased 2.3 percent.

The Dow Jones Industrial Average crossed 6.7 percent on Monday as the investors accepted the particulars for the Treasury’s plans for relieving the banks from the debt. The financial field of S&P 500 increased seventeen percent. Mr. Philip who is the first NZ Capital Broker said that this is related to the basic matters which have now being addressed to in America.

The experts at UBS were of the view that they were anticipating rally in stocks to be one more bear market alteration. Mr. Alex who is a senior dealer with ANZ gave his comment as it is quite madness with the things taking place in the equity market. He also said that he would like to make use of an expression i.e. caveat emptor which means that buyer be cautious. The financial stocks making good progress with the ANZ of Australia increased by 3.5 percent, Adelaide and Bendigo Bank increased by 6.1 percent, Suncorp Metway increased by 3.3 percent and Commonwealth Bank up by 4.6 percent. In Tokyo Mitsubishi UFJ FG increased by 5.5 percent along with Sumitomo Mitsui FG increase of 3.8 percent and Mizuho FG up by 6.3 percent.

In Tokyo the insurers also increased along with Tokio Marine up by 5.1 percent, but there are chances that some of the profit-takers will turn up in the Japan’s shares. The commodity plays were associated by the strong base metals along with Rio Tinto increased by 5.7 percent, Bluescope Steel up by 4.2 percent, Arrow Energy up by 3.8 percent, BHP Billiton increased by 3.1 percent. OZ Minerals came down fifteen percent with the Foreign Investment Review Board expanded their evaluation of China Minmetals’ A$2.5 billion offer for takeover spoiling the planning of OZ of rapid sanction of the contract.

After having the fresh profits auto stocks didn’t performed well enough. Since February 17th the main index of New Zealand for a short time touched its maximum level. Fisher & Paykel Appliances increased by 8.1 percent, Telecom +4.2 percent, and Fletcher Building increased by 4.8 percent. With the euro at Y133.34, the Japanese yen constantly registered a fall with its maximum level since October 21. The euro also touched $1.3670 from $1.3644 along with the American dollar at Y97.65 from Y96.90.

The yen crossed the Australian dollar hit Y69.24 which is its biggest level since November 10th and the Pound reached Y142.52 which was its best since December 1st. According to Mr. Sean who is a Westpac’s senior currency strategist, the merging of the dollar probably will continue. It also included the selling of the euro in the middle of a talk about the possible step taken by European Central Bank in the direction of quantitative easiness should decrease. The quantitative easing is not possible next week. At the dollar’s cost the currencies of Asia increased along with the greenback fell at KRW1, 384.04 versus Korean won from KRW1, 391.59 on Monday.

Despite of the fall in American Treasurys the Asian government bonds were mixed. May Nymex crude oil futures came down twenty percent at $53.58 per barrel on Globex from rising up to $1.72 in New York.

New Zealand Dollar and Australia Dollar go down

Monday, April 13th, 2009

After one month high the New Zealand and Australian dollars came down. According to the statistics department the manufacturing sales without the price rise came down 5.3 percent as for the fourth quarter. Tomorrow The Reserve Bank of Australia released minutes of the board meeting which took place on March 3rd where the policy makers stopped reductions in the borrowing costs. Ever since that meeting the reports of the government showed that the domestic product came down in eight years. This also increased the unemployment rate.

Mr. Sean who is a senior currency strategist in Sydney at Westpac Banking Corp said that because of the Reserve Bank of Australia minutes the markets have moved many times and that is the reason the traders feel uncomfortable. The Australian currency came down 0.2 percent to 65.61 American cents in Sydney from 65.81 cents last week in New York when it reached 66.03 cents. The currency remained the same at 64.46 yen.

Mr. Sean was of the view that the Australian dollar will trade 65.14 to 66.19 cents to the American dollar and New Zealand dollar came down 0.1 percent to 52.38 American cents from 52.47 in New York on March 13th. The New Zealand dollar will be probably doing trade between 51.40 to 52.00 cents to the dollar. For the first time in seven months the policy makers in Australia deserted the standard rate of interest.

For the purpose of purchasing and selling the futures are agreements which are fixed at a decided price and a date. The euro also came down against the dollar, which ended the four days of profits on the rumor that European countries will not be able to increase spending to face the financial slump in that particular area. According to Statistics New Zealand the manufacturing sales in New Zealand also came down to 5.3 percent in the fourth quarter which was led by the fuel, dairy, and meat industries.

In a statement Bank of New Zealand Ltd and Business New Zealand said that the service industry in New Zealand made a contract for eleven month in the month of February with the sales came down by renewing different contracts, crimping the demand for various business services.

Mr. Deda said that there are chances that the Australian dollar will settle above 65.1 American cents and just for a while it might go above 65 cents. He also added that the New Zealand currency might not be able to deal with Australia’s economy because of its current condition. It is projected that in the coming months the New Zealand dollar might grow weaker as compared to the Australian dollar and it might. It might trade between 52 and 52.7 American cents.

The government bonds of Australia were unaffected. The price of 5.24 percent security which is due on March 2019 came down from 0.02 to 107.76.

Long bond expansion is difficult in Thailand

Monday, April 13th, 2009

According to the Finance Minister of Thailand Mr. Korn, it is very hard to develop the market of long-dated bond for funding the economic stimulus arrangements. It was on March 14 in London that Mr. Korn gave a statement in an interview that it is not an easy task for developing or extending the market of long-dated bond. He made this statement referring to the debts which in the developed countries are securities along with the maturity of fifteen years or more than that. This will not make any difference to the country’s creditworthiness as it can be dependant on the temporary borrowing.

Mr. Korn added that across Asia the governments need to come together and intensify the bond market as the interest-rate cuts and incentive plans raises the concern that the price rise will speed up. The region has declared over seven hundred billion dollars in extra expenditure as the finance business losses a worldwide slump.

According to Mr. Nattapol who is the president of Thailand’s Bond Market Association as the yields are less along with the apprehension of price rise because of inflation, the market is not making any efforts towards making the long-terms investments. For anything stretching more than ten years there are also scarcity for the effective hedging tools. Currently the swaps the swap can only go to ten years.

Mr. Abhisit who has done his education from Oxford joined the office on December 17th after so many objections. Mr. Korn said that Thailand must learn not to be dependent on temporary borrowing through creating a market for the long-dated bonus. He also added that liquidity is also tight in that particular part of the market. According to Mr. Nattapol the long-dated bonds usually cater to the problems which are more than ten years. It has been noticed in the past that majority of the times the buyers are the insurance companies.

These investors demand for the maximum yields for holding long maturity-bonds in order to compensate for the price rise. A sharp yield curve signifies that the governments which are willing to borrow long term, they will have to go through the high financing costs. Mr. Korn said that it is not limited to Thailand and it is also the same for Asia and together we have to work through. Every government is in need to borrow and this is a fact.

On January 14 Mr. Pongpanu who is the director general of Public Debt Management Office said that the government has strategies for issuing 534.6 billion baht of the debt at the end of the fiscal year ending September 30th, 2009. Mr. Nattapol was of the view that the government of Thailand is interested in issuing ten to twenty year bonds for funding their budget deficit.

Even after one day markets don’t seem keen for Fed Plan

Monday, April 13th, 2009

The economic markets were not so keen how it will work out even after 24 hours of the ramping of the plans by Federal Reserve to refresh the economy through injecting over one trillion dollars. The investors still are not confident enough from both the Fed and governmental plans that it could really help in resuming the lending to the consumers. They are still concerned that it is not easy for Fed to remove them from being involved in the market.

On Wednesday with this news the stock markets witnessed an increase along with Dow Jones Industrial Average came down by thirty-four points led by the turn down in the shares of the banks. Lately the Dollar also came down as compared to the other currencies, it came down a ten week low to the euro and a one month low against the yen. It is said that the commodity markets which include oil and gold are in a comfortable position.

There is no doubt that the investors seems little worried about the price rise. The Fed plans comprises of purchasing long-term treasury worth three hundred billon dollars along with doubling their buying of the mortgage-related debt. This would add $1.14 trillion to the extra liquidity in to the whole system. Mr. Michael who is a main economist with Action Economics in Boulder, Colo was of the view that the aggressive move made by Fed came as a complete surprise for the markets. Now the Fed is planning to hold the treasury yields.

Bank of America, Citigroup, and J.P. Morgan Chase they all are off over three percent. Morgan Stanley came down eight percent and Goldman Sachs came down two percent. But the Wall Street’s investors stayed positive that the Fed’s hard work will help reducing the credit calamity. Dow Jones-AIG Commodity Index jumped 5.1 percent and the crude raised fifty dollars a barrel. It all happened due to the major fall of the dollar value which will witness the increase in its supply by the moves made by Fed. In the international markets the oil is priced in the dollars and some of the main oil producing countries officials have also made a comment that the oil prices will naturally rise with the weaker dollar.

With the trading which was noticed on Wednesday after hours the prices of gold have increased a little. On Thursday afternoon some of the Latin American currencies like Mexican peso have came down sharply.

Due to economic slump Singapore dollar expected to drop 7.5 percent

Monday, April 13th, 2009

According to the Goldman Sachs Group Inc the Singapore dollar is expected to witness a drop of 7.5 percent at S$1.63 against the greenback due to the poor economic condition impelled the central bank to support the feeble currency. Mr. Enoch who is a Hong-Kong based economist said that the bank has discontinued their approximation from S$1.55 and made a modification in their GDP (Gross Domestic Product) growth of 2009 to minus eight percent, which is twice the speed of reduction which were formerly shown.

By moving the policy band lower which is planned to take place in the month of April, there are chances that Monetary Authority of Singapore might deteriorate SGD. Lately the Singapore dollar did a business at S$1.5165 against the American currency. In the current year the city-state’s currency witnessed a downfall of 4.9 percent. It is compared with the ten percent downfall in the Korea won which is amongst the poor performers of the ten of the efficient currencies in Asia but here the yen is not included.

This year the Singapore central bank conducted a survey where the economists made a prediction of downfall of 4.9 percent in the economy compared to the previous forecast of one percent. According to Mr. Idris who is a currency strategist at UBS in Singapore, both HSBC Holdings Plc which is the biggest currency trader in the world and UBS AG were of the view that central bank of Singapore will look for a weak currency at the policy review in the month of April. There are chances that the city’s dollar might fall to S$1.62 in the 3 months and by the end of the year it will bounce back to S$1.59.

According to Mr. Robert who is a Singapore-based senior economist at HSBC, this year the economy of Singapore will contract nine percent and there are probabilities that the central bank will declare a one-off reduction of their small trade-weighted rate of exchange. It is scheduled for April 9 and there are probabilities that it will be in the order of around two percent.

The Ministry of Manpower on March 16 provided with the information that in the fourth quarter of the year 2008 the unemployment rate increased to 2.4 percent from 2.1 percent. Mr. Enoch in his note said that the unemployment rate will increase to seven percent in the year 2010 which will really affect the private spending.

The central bank of Singapore carries out their monetary strategies by directing the dollar within the secret band of trade-weighted currencies of their most important business partners. The central bank of Singapore holds its monetary policy twice in a year. In the month of October 2007 the Monetary Authority of Singapore agreed to a more effective currency appreciation, declared a one-off increase in April 2008 and last year stopped supporting the profits made in the month of October.

After the assurance of Obama the dollar is nearing one week high

Monday, April 13th, 2009

After the statement made by Mr. Obama (President of America) that the American currency is holding strong as the investors believe in their economy, the trading of the dollar neared the maximum level versus euro. After a report from the government of Japan showed that that country has shown the reducing demand for the goods the yen might fall for the fourth day against the greenback.

There are probabilities that the euro might decline for the fifth day versus the pound. Since January 9th this can be the biggest losing stretch. According to Mr. Muramatsu who is the manager of Group Treasury Asia in Tokyo at Commerzbank AG (Germany’s second biggest lender) the dollar is slowly improving and people are again start believing in American economy. It is because of the aggressive policies that now America which was the first victim of recession is seeing a light of hope of recovering themselves.

In Tokyo the American currency did a trading at $1.3481 per euro in the afternoon from $1.3466. The greenback was still untouched at 97.79 yen from 97.85 yen and the euro was at 91.84 British pence from 91.71 pence. Yesterday the yen did a trading at 131.79 from 131.80, the currency of Japan also declined to 68.17 as compared to the dollar of Australia from 68.06, and got weaker to 79.53 versus dollar of Canada from 79.41.

On the second day the Dollar Index also increased with the American President made a comment that his attempts renewing the economy has begun to take hold and the budge of 2010 will lay the stone for the growth and development. In a press conference at White House in Washington, Mr. Obama said that there is no need for the international currency. The Dollar Index of ICE which is also responsible for tracking greenback versus the euro, pound, yen, Swedish krona, Swiss franc, and Canadian dollar increased 0.2% at 84.059 after getting to 82.62 on March 19th. It is considered to be the minimum level since the early January.

After the report of Finance Ministry showed that the due to the recession the demand has weakened for the electronic products and cars, the currency of Japan might get weakened. In the month of February the exports declined 49.3% and this is considered to be the highest drop since the year 1980 at the time the government started keeping the comparable data.

The Nikkei 225 Stock Average declined 0.1% and MSCI Asia-Pacific Index of local shares increased 0.1%. Seeing the chances of recession in Europe are getting serious, the demand for euro might decline. According to a survey from the economists the Ifo institute’s German trade index declined to 82.1 in the month of March from 82.5 in February. Since the month of November 1982 this would be the minimal level and Ifo will be disclose their report in Munich at 10 a.m.