Asian News

[Ichiro]

30may-U.S. Stock-Index Futures Slip; General Electric, Honeywell Fall

By Ludwig Burger

May 30 (Bloomberg) -- U.S. stock-index futures retreated after the Chinese government tripled the tax on securities transactions, sparking concern that another global rout may be in the making following drops in Asian and European indexes today.

General Electric Co., the world's biggest provider of power- plant turbines, and Honeywell International Inc., the largest maker of airplane controls, paced a decline in Europe of companies dependent on China for revenue growth.

U.S. real-estate shares surged yesterday on takeover speculation, propelling the Standard & Poor's 500 Index to within 10 points of a record. European and Asia stocks slid today after China raised the transactions tax to 0.3 percent.

``You have to be prepared for a correction at any time,'' said Oliver Hagen, who manages $135 million in U.S. stocks at LGT Capital Management in Bendern, Liechtenstein. ``We are overbought. A slump in Chinese stocks has the potential to trigger a short-term reaction in the U.S.''

CDW Corp. shares surged in Germany after Madison Dearborn Partners LLC agreed to buy the computer reseller for about $7.3 billion.

S&P 500 futures expiring in June lost 6.1 to 1516.4 as of 11:28 a.m. in London. Dow Jones Industrial Average futures fell 58 to 13,500. Nasdaq-100 Index futures declined 9 to 1897.75

China

China's CSI 300, a benchmark measure for Asia's best performing equity market so far this year, posted the biggest slump in three months today, leading Asian markets lower. The index lost 6.8 percent, the biggest fluctuation among markets included in global benchmarks.

http://www.bloomberg.com/apps/news?pid=20601103&sid=a9bULOlTIxco&refer=us

 

[Ichiro]

31may-China's Olympian stock-market sprint

Current thinking is that Chinese markets will rally at a furious pace through the 2008 Summer Olympics -- and then investors should take the money and run. Don't bet your gold medal that strategy will work.

By Jim Jubak

I read something in The Wall Street Journal last week that really scared me (besides the editorial page, I mean): "In Beijing, investors talk of a one-way bet on the market until at least next year's Olympics."

In other words, even though the Shanghai stock market is up 52% this year, was up 130% in 2006 and is up 305% since this rally began back in June 2005, and even though everyone knows this speculative bubble isn't sustainable, it's smart to keep pouring money into Chinese stocks -- no matter their price -- because the government won't intervene and risk crashing the market until after the showcase Beijing Olympics are over.

So invest as much as you can in anything you can until Aug. 24, 2008, the day the Beijing games come to an end. Then run -- don't walk -- in an orderly fashion to the exit.

Yeah, like that will work.
Watch out for stampede
Speculative markets that think they've got a green light to run from excess to excess until a specific date scare me. The possibility of a stampede for the exits on the Shanghai exchange starting a wave of fear that spreads around the globe scares me. And the very real possibility that the Beijing government will make a mistake and crash the Chinese stock market scares me.

Everything is not black, however. Because the Chinese stock market is, so far, only tenuously connected to the global financial market, any crash in Shanghai is likely to have only modest global effects.

With those cheery thoughts fresh in mind, let's take a look at why speculators in Shanghai think they've got a green light until August 2008.

http://articles.moneycentral.msn.com/Investing/JubaksJournal/ChinasOlympianStockMarketSprint.aspx

 

[Ichiro]

31may- AP-Stocks Up Slightly After GDP Reading
Thursday May 31, 2:20 pm ET
By Madlen Read, AP Business Writer
Stocks Little Changed After More Takeover Deals, Feeble GDP Growth

NEW YORK (AP) -- Stocks posted slight gains Thursday after a weak reading of the nation's gross domestic product muted Wall Street's enthusiasm over a new spate of acquisitions.

The Commerce Department's latest estimate of first-quarter GDP was 0.6 percent, lower than the average economist estimate of 0.8 percent and the 1.3 percent projected in April.


The fact that first-quarter growth has been the most sluggish since the last quarter of 2002, but that the Dow Jones industrial average has nonetheless surged more than 9 percent this year, caused some investors to pause.

"There's friction between those two numbers. That's why investors are a little bit worried, and why we're not hitting home runs every day," said Hugh Johnson, chairman and chief investment officer of Johnson Illington Advisors.

Still, most on Wall Street expect growth to pick up later in the year, and remain optimistic about the stock market thanks to the unrelenting wave of takeovers, which are on track to beat last year's record tab of $4 trillion.

On Thursday, banking company Wachovia Corp. said it would acquire A.G. Edwards Inc. for $6.8 billion in cash and stock to form the second-largest retail stock brokerage in the country. And payroll processor Ceridian Corp. said late Wednesday it will be bought out by investment firm Thomas H. Lee Partners LP and insurance provider Fidelity National Financial Inc. for about $5.3 billion.

http://biz.yahoo.com/ap/070531/wall_street.html?.v=30

 

[Ichiro]

31may-U.S. Economy: First Quarter May Have Been Low Point (Update2)

By Shobhana Chandra

May 31 (Bloomberg) -- The U.S. economy grew last quarter at the slowest pace in more than four years, a 0.6 percent annual rate that may prove to have been the low point of the expansion.

The gain in gross domestic product, announced by the Commerce Department today in Washington, was lower than the 0.8 percent rate economists had forecast, and less than the government's previous 1.3 percent estimate. A private report from Chicago today showed a jump in business activity, while figures since the March 30 end of the quarter show a rebound in corporate spending and consumer confidence.

Traders further reduced bets that Federal Reserve Chairman Ben S. Bernanke will need to cut interest rates this year. The prospect of a recession, given a one-in-three chance by former Fed Chairman Alan Greenspan, looks less likely as business investment and manufacturing strengthen.

http://www.bloomberg.com/apps/news?pid=20601087&sid=aguRviOo2DoI&refer=home

 

[Ichiro]

31may-European Stocks Rise to 6 1/2-Year High; E.ON, Iberdrola Climb

By Sarah Jones and Ludwig Burger

May 31 (Bloomberg) -- European stocks rallied, sending the Dow Jones Stoxx 600 Index to the highest since September 2000, after E.ON AG said it will buy back $9.4 billion in shares and Belgian billionaire Albert Frere bought a stake in Iberdrola SA.

E.ON and Iberdrola led utility shares to a record. Scottish & Southern Energy Plc rose after earnings beat analysts' estimates. ASML Holding NV climbed the most in six weeks on plans to pay cash to shareholders. BHP Billiton Ltd. paced a rebound in mining stocks as copper advanced and the company named a new chief executive officer.

http://www.bloomberg.com/apps/news?pid=20601085&sid=aIkZiSiuSHfo&refer=europe

 

[Ichiro]

31may-Dollar Heads for Best Month Versus Euro in a Year on Economy

By Min Zeng and Bo Nielsen

May 31 (Bloomberg) -- The dollar headed for its biggest monthly gain versus the euro in more than a year as signs of economic strength reduced the likelihood of cuts in interest rates later this year by the Federal Reserve.

The U.S. currency rebounded in May from an all-time low on reports showing gains in new home sales and manufacturing. The central bank said in minutes of its May 9 meeting released yesterday that it still expects a pickup in the economy this year and views inflation as its main concern.

``We are starting to see some recovery in the U.S. economy, which increases the risks that the Fed's next move is a hike rather than a cut,'' said Matthew Strauss, senior currency strategist in Toronto at RBC Capital Markets Inc., a unit of Canada's biggest bank by assets. ``The dollar is gaining strength.''

http://www.bloomberg.com/apps/news?pid=20601083&sid=aVvIBI1Ey0S0&refer=currency

 

[Ichiro]

31may-India's Economy Grows at Fastest Pace in Two Decades (Update5)

By Cherian Thomas

May 31 (Bloomberg) -- India's economy grew at the fastest pace in almost 20 years as companies lifted production to meet surging consumer demand.

South Asia's largest economy expanded 9.4 percent in the year ended March 31, the biggest gain since 1989 and more than the government's initial estimate of 9.2 percent, the Central Statistical Organisation said in New Delhi today.

http://www.bloomberg.com/apps/news?pid=20601013&sid=aIDBNk_D1iR4&refer=emergingmarkets

 

[Ichiro]

31may- AP-Stocks Are Flat After Weak GDP Report
Thursday May 31, 4:25 pm ET
By Madlen Read, AP Business Writer
Stocks Finish Flat After More Takeover Deals, Feeble GDP Growth

NEW YORK (AP) -- Stocks finished largely flat Thursday after a weak reading of the nation's gross domestic product muted Wall Street's enthusiasm over a new spate of acquisitions. Technology stocks fared better than most, however.


The Commerce Department's latest estimate of first-quarter GDP was 0.6 percent, lower than the average economist estimate of 0.8 percent and the 1.3 percent the government projected in April.

http://biz.yahoo.com/ap/070531/wall_street.html?.v=38

 

[Ichiro]

1jun- AP-Dollar Rises in Asia on Yen-Carry Trades
Friday June 1, 3:09 am ET
Dollar Climbs in Asian Trading as Investors Step Up Yen-Carry Trades

TOKYO (AP) -- The dollar rose in Asia Friday as investors stepped up yen-carry trades to take advantage of low Japanese interest rates to buy other currency with the yen.

The dollar was trading at 121.92 yen midafternoon, up from 121.73 yen late Thursday in Tokyo. The euro fell to $1.3450 from $1.3453.


Traders said the yen may fall further because worries about financial market risks are fading, prompting a resumption of yen-carry trades.

Earlier this week, they had been carefully monitoring the Chinese stock market, which slumped Wednesday after the government raised a tax on trading.

But such worries have been reduced lately as it became clear that global stock markets remain solid, they said.

China's markets have rebounded from Wednesday's losses with two straight days of gains, and most Asian markets have made gains Friday, with index records hit in South Korea and the Philippines.

"As long as stock markets remain firm, risk appetite will remain intact and yen-carry trade will continue," said Shuichi Kanehira, senior trader at Mizuho Corporate Bank.

http://biz.yahoo.com/ap/070601/asia_dollar.html?.v=1

 

[Ichiro]

1jun- AP-Stocks Head Toward Higher Opening
Friday June 1, 7:27 am ET
By Madlen Read, AP Business Writer
Stocks Point to Higher Opening Ahead of May Jobs Report

NEW YORK (AP) -- Stocks pointed toward a higher opening Friday as Wall Street awaited the government's employment report for May and a widely-followed survey on manufacturing.

Investors will be trying to glean from the data any clues about the future of the economy and the direction of interest rates. The market is steadfastly hoping that the weakening economy will force the Federal Reserve to eventually lower rates, but at the same time expecting growth to bounce back later this year.


The Labor Department will release its unempoyment and jobs creation figures at 8:30 a.m. EDT.

According to the median estimate of economists surveyed by Thomson Financial, the market anticipates that nonfarm payrolls rose by 138,000 in May, a bigger increase than in April, and that the unemployment rate held steady at 4.5 percent. Any number showing significantly stronger employment could take stocks lower, because investors would interpret it as pointing away from a rate cut.

http://biz.yahoo.com/ap/070601/wall_street.html?.v=5

 

[Ichiro]

4jun-China's Stocks Post Record Drop; Extend Rout Past $350 Billion

By Zhang Shidong

June 4 (Bloomberg) -- China's key stock index plunged by a record number of points after the government's main securities daily signaled officials won't try to halt a slump that's erased more than $350 billion of market value in four days.

The CSI 300 Index dropped 292.52, or 7.7 percent, to close at 3511.43. The measure, which doubled in the past six months, has plunged 16 percent from its May 29 peak after the government tripled the tax on share trades to 0.3 percent.

The speed that stock prices soared by was ``extremely unusual'' and highlighted ``structural bubbles'' in the market, the state-owned China Securities Journal wrote in an editorial.

More than half of the stocks included in the CSI 300 plunged by the 10 percent daily limit, including Huaneng Power International Inc., the nation's largest electricity producer, and Air China Ltd., the biggest international carrier.

``There's panic selling,'' said Yan Ji, an investment manager at HSBC Jintrust Fund Management Co. in Shanghai, which manages about $517 million. ``Investors are convinced the government won't do anything to support the market.''

http://bloomberg.com/apps/news?pid=20601087&sid=au9qV8VcFjO8&refer=worldwide

 

[Ichiro]

4jun-Fed Faces Growing Pressure to Raise Rates, Options Market Says

By Daniel Kruger

June 4 (Bloomberg) -- In the options market where the savviest investors take apart conventional wisdom, the Federal Reserve is facing growing pressure to consider raising interest rates as soon as December.

Options on Federal Fund futures at the Chicago Board of Trade indicate a 41 percent chance the central bank will lift its target rate for overnight loans between banks to 5.5 percent from the current 5.25 percent, according to data compiled by Bloomberg. A month ago, they showed no expectations for an increase.

While the economy expanded at the slowest pace in more than four years in the first quarter, inflation remains at the top of the Fed's comfort zone, business activity has rebounded, the jobless rate is near the lowest in six years and stock indexes are setting record highs. Just three months ago, options traders speculated the weakest housing market in 16 years would force the central bank to cut interest rates to 4.5 percent by January.

http://bloomberg.com/apps/news?pid=20601087&sid=avIYhj2Cj8kE&refer=worldwide

 

[Ichiro]

4jun-Asian Stocks Rise to Record on Spending, Growth; Toyota Gains

By Chen Shiyin and George Hsu

June 4 (Bloomberg) -- Asian stocks advanced to a third straight record after Japanese companies increased spending and reports showed U.S. employment and manufacturing expanded more than expected.

Toyota Motor Corp., the world's biggest carmaker by market value, climbed to a 10-week high after reporting a jump in sales. China's CSI 300 Index slumped, taking its losses to 16 percent in the four days since the government tripled stamp duty on share trades to try to cool a surging market.

``Solid economic growth is the bedrock of good corporate earnings and stock prices,'' said Liu Juming, who helps manage $1.7 billion at IBT Securities Co. in Taipei. ``China's a secluded market, so its plunge will have limited regional impact.''

The Morgan Stanley Capital International Asia-Pacific Index added 0.6 percent to 152.31 as of 4:14 p.m. in Tokyo. Energy and materials stocks including BHP Billiton Ltd., the No. 1 mining company, posted the biggest gains among the measure's 10 industry groups, tracking an advance in the price of crude oil and metals.

Japan's Nikkei 225 Stock Average added 0.1 percent, while the broader Topix gained 0.3 percent. Benchmarks in South Korea, Australia, Singapore, the Philippines and Indonesia climbed to new highs. New Zealand's market was closed for a holiday.

http://bloomberg.com/apps/news?pid=20601080&sid=aB.Y.vljTIqc&refer=asia

 

[Ichiro]

4jun-European Bank Stocks Decline, Led by Deutsche Bank, BNP Paribas

By Adria Cimino

June 4 (Bloomberg) -- European bank stocks dropped, led by Deutsche Bank AG and BNP Paribas SA, after JPMorgan, Chase & Co. cut its recommendation on the investment-banking industry.

Tiscali SpA gained on speculation the Italian Internet provider may be bought. Clariant AG, a Swiss chemical company, also paced advancing shares.

Europe's Stoxx 600 climbed to the highest since September 2000 last week as a rebound in metals prices buoyed mining companies and economic reports in the U.S. suggested growth in the world's biggest economy is picking up. The measure is within 6 points of a record.

``The risk is linked to the euphoria we've seen in the stock market,'' said Guillaume Duchesne, a Luxembourg-based equity strategist at Fortis Private Banking, which manages $76 billion. ``We're nervous about the evolution of the market and fear a correction.''

The Stoxx 600 fell 0.1 percent to 399.98 as of 8:25 a.m. in London. The Stoxx 50 also lost 0.1 percent and the Euro Stoxx 50, a measure for the 13 nations sharing the euro, slipped 0.2 percent.

JPMorgan downgraded investment banks to ``underweight'' from ``neutral.'' The analysts cut shares of Deutsche Bank, Germany's biggest bank, to ``underweight'' from ``neutral.'' JPMorgan also lowered BNP Paribas, France's largest bank, to ``neutral'' from ``overweight.''

``We believe we are witnessing a `near-perfect' fixed-income market environment that is unlikely to get much better,'' analysts led by Kian Abouhossein said in a note to clients today.

http://bloomberg.com/apps/news?pid=20601085&sid=aCvA2L5jZ48E&refer=europe

 

[Ichiro]

5Jun- AP-Stocks Eke Out Gain Despite China Drop
Monday June 4, 5:21 pm ET
By Joe Bel Bruno, AP Business Writer
Wall Street Finishes Slightly Higher Despite Chinese Stock Market Plunge

NEW YORK (AP) -- Wall Street recovered from a mostly down session Monday, eking out a gain as investors brushed off another slide in Chinese stocks.

The market had little in the way of corporate or economic news to give it direction, but while it was in negative territory for much of the day, in the end it shook off an 8.3 percent slide in the benchmark Shanghai Composite Index. The Chinese index had its biggest one-day drop since the Feb. 27 plunge that set off a brief global market selloff as the Chinese government attempts to cool the country's market boom.

Investors used Monday to adjust positions after both the Standard & Poor's 500 index and Dow Jones industrial average surged to record closes in the previous session. The market was encouraged by economic data released last week that suggested the economy was slowing, but not too quickly, and inflation remained in check.

However, the Commerce Department reported Monday that orders to U.S. factories were weaker than expected in April. Investors might find some information to trade with the release of the Institute of Supply Management's service sector index on Tuesday, but not much other information is expected.

http://biz.yahoo.com/ap/070604/wall_street.html?.v=39

 

[Ichiro]

5jun- AP-Dollar Falls on U.S. Factory Orders Data
Monday June 4, 4:56 pm ET
Dollar Drops Against Major Currencies After Weaker Factory Orders Reported in U.S.

NEW YORK (AP) -- The dollar weakened Monday, dragged down by weaker-than-expected factory orders in the United States.

The 13-nation euro climbed to $1.3488 in late New York trading from $1.3443 late Friday after the U.S. Commerce Department reported orders to factories rose less than expected in April.


Orders were up 0.3 percent. It was the weakest result in three months and less than half of the 0.8 percent increase that analysts expected.

Markets are closely watching U.S. economic data for pointers to the Federal Reserve's future interest rate course.

http://biz.yahoo.com/ap/070604/dollar.html?.v=4

 

[Ichiro]

5jun-Asian Stocks Rise to a Record, Led by Cnooc; Hon Hai Advances

By Darren Boey and Makiko Suzuki

June 5 (Bloomberg) -- Asian stocks climbed, sending a regional benchmark to a record, after crude-oil prices traded near a two-week high and HSBC Holdings Plc raised its targets for Cnooc Ltd. and PetroChina Co.'s shares.

``Money is heading to commodity-related shares, pushing the level of the overall market higher,'' said Terunobu Kinoshita, who helps manage $785 million at Fund Creation Co. in Tokyo. ``Investors should anticipate further gains.''

Hon Hai Precision Industry Co. led technology shares higher after brokerage and media reports prompted speculation that industry demand is picking up. China's CSI 300 Index gained 3.5 percent, rebounding from a 7.5 percent slump earlier. The measure had lost $402 billion of market value in the four days through yesterday since the government tripled a tax on stock trading.

The Morgan Stanley Capital International Asia-Pacific Index added 0.3 percent to 152.89 at 7:19 p.m. in Tokyo, set to surpass yesterday's record close of 152.43. Japan's Nikkei 225 Stock Average gained 0.5 percent. Benchmarks in South Korea, Malaysia and Pakistan climbed to records.

MSCI's index of Asia-Pacific energy stocks rose 1.6 percent after oil futures in New York yesterday climbed 1.7 percent to $66.21, the highest since May 21. Prices were recently at $65.82 in after-hours trading.

http://www.bloomberg.com/apps/news?pid=20601080&sid=aCvMz2a35vY4&refer=asia

 

[Ichiro]

5jun-China's Stock Index Rebounds From Loss: World's Biggest Mover

By Zhang Shidong and Xiaowei Li

June 5 (Bloomberg) -- China's key stock index rose 3.5 percent, rebounding from an earlier loss, on speculation the government will take steps to halt a rout that wiped out more than $400 billion of market value in less than a week.

Datong Coal Industry Co. and Hong Yuan Securities Co. were among 20 stocks on the index that rose by the 10 percent daily cap. Only two members fell by the maximum, down from about 100 at the midday break.

``It is likely the government will do something to support the market,'' said Xie Yan, an analyst at Haitong Securities Co. in Shanghai.

Speculation the government will announce a market stabilization fund and rule out the introduction of a capital gains tax boosted stocks in the afternoon, Xie said. The benchmark fell by as much as 7.5 percent in morning trade.

Citic Securities Co. rose after the brokerage said it plans to sell shares valued at about $2.5 billion.

The benchmark CSI 300 Index gained 123.20 to 3634.63 at the close, the biggest fluctuation among markets included in global benchmarks. The measure, having fallen as much as 22 percent from a peak on May 29, has now dropped 13 percent since the government tripled its tax on securities trading.

http://www.bloomberg.com/apps/news?pid=20601080&sid=aJTsUQifvm1o&refer=asia

 

[Ichiro]

5jun-China Will Likely Raise Lending, Deposit Rates Again (Update1)

By Nipa Piboontanasawat

June 5 (Bloomberg) -- China may raise lending and deposit rates at least once more this year to cool investment and curb asset bubbles, a survey showed.

Benchmark one-year borrowing costs will rise from 6.57 percent and deposit rates from 3.06 percent, according to 21 of 25 economists surveyed by Bloomberg News. The central bank may order lenders to set aside more money as reserves at least two more times, 16 economists said.

China is trying to stop money from record trade surpluses fueling stock or property bubbles and overcapacity in manufacturing. Inflation has outpaced after-tax returns on bank deposits, encouraging stock market speculation that's driven the CSI 300 Index to a 70 percent gain this year. The benchmark fell 7.7 percent yesterday and dropped another 1.1 percent as of 1:39 p.m. in Shanghai today.

``Raising deposit rates by 27 basis points to quell the liquidity inflow into the stock market is like trying to dam the Yangtze River with a matchstick,'' said Glenn Maguire, chief Asia economist at Societe Generale SA in Hong Kong. ``And if equity markets cool, the risk is of a rebound in property.''

The People's Bank of China last month raised the key one- year deposit rate by 0.27 percentage point to just above April's inflation rate of 3 percent.

http://www.bloomberg.com/apps/news?pid=20601089&sid=aOdq8vtZJ3mc&refer=china

 

[Ichiro]

5jun-apanese Stocks Rise; Toyota, Auto-Related Shares Lead Gains

By Makiko Suzuki

June 5 (Bloomberg) -- Japanese stocks rose, with the Nikkei 225 Stock Average closing above 18,000 for the first time since February. Automakers such as Toyota Motor Corp. led gains as concern eased a slowdown in the U.S. economy will drag on the companies' profit growth.

Energy producers advanced after the price of crude oil climbed above $66 a barrel in New York.

Denso Corp., an auto-parts maker affiliate of Toyota, jumped 2.3 percent. AOC Holdings Inc., Japan's second-largest oil explorer by sales, surged 7.4 percent.

``The U.S. economy has shown signs of recovery and automakers rose, reflecting people's easing worries over the companies' earnings,'' said Naoki Fujiwara, who oversees $720 million at Shinkin Asset Management Co. in Tokyo. ``Rising oil prices provided a good support for commodity-related shares.''

Fast Retailing Co. dropped, leading losses by retailers, after saying its same-store sales declined last month.

http://www.bloomberg.com/apps/news?pid=20601101&sid=asDtVFSVBn0w&refer=japan