Keppel Corp (BN4.SG) +0.9% at $9.80 vs $9.77 at break, after announcing wholly-owned subsidiary, Keppel FELS, enters Letter of Intent with Mermaid Maritime to build two jackup rigs, worth US$360 million ($467.8 million) with option for two more jackups; if exercised, would bring total value over US$700 million. Not expected to have material impact on Keppel NTA, EPS current FY; first two jackups scheduled for delivery December 2012, March 2013 respectively.
Deal comes on same day Keppel reported lower 3Q revenue on lower work volume at offshore, marine arm, lower net orderbook at $4.12 billion vs $4.81 billion end-2Q; CIMB, which has Outperform rating, $11.30 target earlier upgraded 2011-2012 orderbook assumptions to $4 billion per year vs $3 billion“ in view of revived interest in the rig and drillship market.” House remains bullish on chances of winning Petrobras orders; tips $2 billion of Petrobras orders for 2011.
just CREATE GOLD DOLLAR as ONLY WORLD CURRENCY
G20 ministers no need to meet anymore
they are repeating the SAME 1997 MISTAKE
WHAT the meetings for ? ? ? ?
for FUN ? ? ? ?
A previous version of this report incorrectly named the site of the finance officials’ meeting. It has been corrected.
HONG KONG (MarketWatch) — Asian finance ministers and central bankers will use this weekend’s meeting of the Group of 20 major economies in Seoul to communicate the hardships they face from surging capital inflows and appreciating currencies.
Concerns are mounting that if left unchecked, current trends are creating a bubble that could suddenly burst in replay of the 1997 Asian financial crisis that ended a boom-time for the region.
“We have a situation right now where pretty much every major emerging-market economy is being subjected to a wall of money emanating from the U.S.,” said Cantor Fitzgerald economist Uwe Parpart in Hong Kong.
“The assumption that all of this money is genuine investment money is clearly mistaken — a great deal of it is purely speculative,” he said.
The G-20 finance ministers and central bank officials will gather in Gyeongju, South Korea, from Friday for a weekend meeting, followed by a two-day meeting of the G-20 heads of state in November. Asian members of the bloc include China, Japan, India, South Korea, Indonesia and Australia.
Reuters
South Koreans stage a rally to celebrate Seoul’s hosting of this year’s meetings of the Group of 20 major economies.
“There is every good reason for Asia financial officials to take the opportunity of these upcoming forums to tell the U.S. this is not acceptable, you are pursing a one-sided monetary policy that is in your own best interest,” Parpart said.
Parpart said emerging markets in Asia, much the same as their developing peers in other regions of the world, have been inundated by “highly destabilizing” inflows of surplus dollars, mainly as a result of ultra-easy U.S. monetary policy.
“I don’t think it’s a new Plaza Accord type of deal that’s called for. I think what’s called for is for the U.S. to show some awareness and some willingness of what to do with these footloose dollars that it’s printing and washing ashore in Asia,” Parpart said. The Plaza Accord was a 1985 agreement to allow the U.S. dollar to depreciate. See column on current parallels with Plaza Accord.
However, Action Economics economist David Cohen said working out a compromise on Asian currencies’ rise against the dollar will likely be a goal for the G-20 meeting, especially in terms of the Chinese yuan.
“Part of the issue is that the Chinese currency is seen as undervalued, and as long as it’s undervalued, all other emerging-market economies can’t afford to lose competitiveness to the Chinese,” he said.
Dollar’s fall could be good thing
Should the U.S. dollar take one for the home team? Ben Bernanke and Tim Geithner might want the U.S. currency to fall.
Cohen said that the onus is shifting to China to accept currency appreciation, much as Japan had accepted appreciation as a result of the Plaza Accord.
“The question is whether Asians will feel confident enough,” he said.
The dangers for Asian economies from rapid currency appreciation have been in the spotlight recently. The World Bank said in a report Tuesday that East Asian economies run the risk of renewed equity and real-estate bubbles, as asset prices that recovered from losses during the financial crisis look set to march higher.
Larger inflows combined with ample domestic liquidity and rising confidence have boosted stock markets, real-estate prices and other asset valuations in some countries, precipitating fears of a new bubble, the global lender said.
Several export-dependent Asian economies have already responded to the environment of inflows by setting up tighter capital controls.
Among them, Thailand earlier this month imposed a 15% withholding tax on foreign investors’ profits from trading in government-related bonds. Recent data showed a huge jump in foreign-fund purchases of its sovereign debt to $4.96 billion in the third quarter, up from $724 million in the second quarter.
South Korean officials are also reportedly considering a similar measure. Indonesia and Taiwan have likewise enacted measures in the last year to control inflows of foreign funds.
Chris Oliver is MarketWatch's Asia bureau chief, based in Hong Kong.
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