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krisluke
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15-Apr-2011 20:44
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HK shares post first weekly loss in 4, property, energy plays weigh
HONG KONG, April 15 (Reuters) - Hong Kong shares posted their first weekly loss in a month, led by profit-taking in energy and property counters, where weakness could spill over to next week as lending conditions in the territory tighten up.
The Hang Seng Index ended flat on the day but down 1.6 percent on the week at 24,008.07. The China Enterprises Index fell 0.9 percent on the week, outperforming the broader market and helped by steady gains in Shanghai. The Shanghai Composite Index finished down up 0.26 percent on Friday at 3,050.53. Its 0.7 percent gain on the week outperformed the MSCI Asia ex-Japan's 1.2 percent drop. HIGHLIGHTS: * Turnover on Hong Kong's main stock exchange came in at HK$72 billion, about 12 percent below the average seen over the past month, as investors retreated from making large bets. A rise in short-selling on the iShares FTSE/Xinhua China ETF , which tracks the A-share market, added to the sense of caution heading into next week. * The sub-index of property stocks in Hong Kong fell 0.57 percent on the day, underperforming the Hang Seng Index, after HSBC Holdings Plc raised mortgage rates for the second time in a month and as valuations became less attractive. Sun Hung Kai Properties Ltd fell 1.3 percent, while China Overseas Land & Investment Ltd dropped 1.1 percent. * Steel stocks were big underperformers after a profit warning from Angang Steel Co Ltd sent its shares down 5.3 percent, their biggest single-day drop since June last year. Steel companies have seen earnings forecasts downgraded sharply over the past fortnight, although shares have rallied on expectations that demand from Japan will support prices. WEEK AHEAD: * Markets will be on high alert for another increase in bank reserve requirements after inflation in March hit its highest level since June 2008. China will also release its monthly property price index for 70 cities on Monday, which investors will watch closely for signs the government's tightening efforts have helped in curbing price increases. (Reporting Vikram Subhedar Editing by Chris Lewis) |
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krisluke
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15-Apr-2011 20:37
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Investors extend bets on yuan, Singapore dollar
By Jongwoo Cheon
SINGAPORE, April 15 (Reuters) - Investors added to their bets on the Chinese yuan and the Singapore dollar and turned bullish on the South Korean won, expecting these countries will use their currencies to contain inflation, a monthly Reuters poll showed on Friday. Currency investors in April increased their long positions in the yuan and Singapore dollar to their highest since October 2010 and reversed their bearish views on the won and the Taiwanese dollar . Last month, investors broadly reduced their long bets on emerging Asian currencies as a devastating earthquake and nuclear crisis in Japan dampened appetite for riskier assets. [ID:nL3E7EE1AW] But regional currencies have sharply rebounded in the past three weeks with the Singapore dollar hitting a record high against the U.S. dollar. Investors have also returned to stocks and bonds in Asia. Asian policymakers are expected to continue to tighten monetary policies and have recently allowed more currency appreciation as an additional tool to ease the blow of higher prices. The poll asked 10 currency strategists to estimate how the currency market was positioned in eight Asian currencies against the U.S. dollar. The survey measures estimates of the net long or short position in a currency on a scale of minus 3 to plus 3. A score of plus 3 indicates the market is significantly long on dollars. |
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krisluke
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15-Apr-2011 20:30
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10 Things You Need To Know Before The Opening BellGood morning. Here's what you need to know.
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krisluke
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15-Apr-2011 20:05
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April 15 (Bloomberg) -- The euro fell against the dollar, yen and pound after Moody’s Investors Service lowered Ireland’s credit rating, stoking concern that Europe’s debt crisis may worsen as Greece battles to avoid a bond restructuring. The shared currency slid against a majority of its 16 most- traded peers as Moody’s cut Ireland to the lowest investment grade and indicated more downgrades may follow. The yen rallied after China said inflation reached the fastest pace in more than two years, spurring demand for a refuge and reviving concern the world’s second-largest economy will take steps to cool growth. “There’s an increase in risk aversion, so it makes sense that we’re seeing this slight selloff in the euro,” said Kasper Kirkegaard, a senior currency strategist at Danske Bank A/S in Copenhagen. The euro declined as much as 0.3 percent to $1.4442 and traded at $1.4455 as of 6:33 a.m. in New York. The 17-nation currency lost 0.5 percent to 120.39 yen. Japan’s currency gained 0.2 percent to 83.30 per dollar, and has gained 1.7 percent since April 8. The Dollar Index was near the lowest since December 2009 on bets rising commodity prices won’t be enough to convince Federal Reserve policy makers to bring forward interest-rate increases. Restructuring Concern Europe’s currency fell to an almost one-week low against the dollar yesterday after Germany’s finance minister and Standard & Poor’s said Greece may need to restructure debt to avoid defaulting. Greece will announce more than 22 billion euros of deficit-reduction measures through 2014 today, according to Finance Minister George Papaconstantinou. The euro has still gained 8 percent versus the dollar this year on bets accelerating inflation will prompt euro-area policy makers to raise interest rates, even as the so-called peripheral nations struggle to reduce their debt burdens. “Greece’s problems won’t be solved by restructuring its debt but by restructuring the country,” Prime Minister George Papandreou said today in Athens in comments broadcast live by state-run Net TV. The euro stayed lower even as a report showed inflation in the 17-nation euro-region accelerated more than forecast to 2.7 percent in March, the fastest pace in more than two years. The European Central Bank raised its key rate last week to 1.25 percent from a record low 1 percent and indicated further increases may follow. The Fed has kept its target rate for overnight lending between banks at zero to 0.25 percent since December 2008. China Data China’s economy grew 9.7 percent in the first quarter, while consumer prices increased 5.4 percent in March from a year earlier, the statistics bureau in Beijing said today. The median forecasts in Bloomberg surveys of economists were for economic growth of 9.4 percent and inflation of 5.2 percent. The Asian nation will implement “prudent” monetary policy and ensure stable consumer prices, China’s cabinet said after meeting this week to review the economy. The central bank has raised rates four times since the global financial crisis. “Higher interest rates and inflation tend to hurt growth, which knocks confidence, and that would help the yen as guys clear out their short-yen positions,” said Neil Jones, head of European hedge-fund sales at Mizuho Corporate Bank Ltd. in London. “When risk aversion kicks in, the yen gets bought across the board.” The Dollar Index, which tracks the greenback against six U.S. trading partners’ currencies, rose less than 0.2 percent to 74.80 after falling to 74.617 yesterday, the lowest since December 2009. U.S. Prices The U.S. currency has weakened 4.8 percent against a basket of nine developed-nation peers this year, according to Bloomberg Correlation-Weighted Currency Indexes. That’s the second-worst performance, trailing the yen. The U.S. consumer-price index climbed 0.5 percent in March, matching the previous month’s reading, which was the biggest gain since June 2009, a survey showed before the Labor Department data today. Excluding volatile food and fuel costs, so-called core prices may have advanced 0.2 percent in March for a third month, another survey showed. Fed Chairman Ben S. Bernanke last week said an acceleration in inflation is likely to be transitory. Fed Bank of Richmond President Jeffrey Lacker said yesterday the central bank should end its stimulus programs before inflation picks up. Britain’s pound rose for a third day against the euro, adding 0.3 percent to 88.32 pence. It was little changed versus the dollar at $1.6362. Bank of England policy maker Andrew Sentance said in an interview with Bloomberg yesterday that a rate increase to boost the currency wouldn’t be “unwelcome,” because a slowdown in inflation may prove short-lived. “We’re going to see a further upward move in inflation through the summer,” and “there’s clearly a risk that inflation goes up to 5 percent or a bit above,” Sentance said. While consumer-price growth unexpectedly slowed to 4 percent in March, it’s still double the central bank’s target. The nine-member Monetary Policy Committee voted to keep its benchmark interest rate at a record low of 0.5 percent last week to boost the U.K.’s economy. |
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krisluke
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14-Apr-2011 21:21
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Tmr 1000hrs china will announce the CPI... DO keep a watch for " inflation fear" |
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krisluke
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14-Apr-2011 21:11
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HK stocks down, Chinese banks down ahead of China inflation data
HONG KONG, April 14 (Reuters) - Banks led Hong Kong to a weaker finish on Thursday as trading volume fell ahead of China inflation data on Friday and amid caution over a possible increase in the reserve requirement for Chinese banks.
The Hang Seng Index ended down 0.5 percent at 24,014 on Thursday, after bargain-hunters had lifted the benchmark 0.7 percent on Wednesday. The China Enterprises Index lost 0.62 percent to close at 13,481.73. The Shanghai Composite Index finished down 0.25 percent at 3,042.64. HIGHLIGHTS: * Volume on Hong Kong's main stock exchange decreased for a fourth session in a row, hitting 0.7 times its 30-day average, the lowest since March 29. * Large mainland banks were among the biggest drags on the Hang Seng Index, with China Construction Bank Corp , Industrial & Commercial Bank of China Ltd and Bank of China Ltd all down by more than 1.1 percent. * Bernstein Research banking analyst Mike Werner in Hong Kong, who favours large banks over mid-sized peers, rated CCB and ICBC as " outperform" , with the former as his top pick in the sector. * Agricultural Bank of China Ltd , while not a benchmark constituent stock, bucked the trend as it finished up 2.2 percent, with volume at 1.6 times its 30-day average. Analysts said ABC was benefit ting from some rotational buying on Thursday as it finished the day technically overbought with the relative strength index at 72, up from 65 yesterday. * Shun Tak Holdings Ltd headlined broad gains in Macau-related stocks listed in Hong Kong, gaining 6.9 percent on Thursday as investors remained bullish on the sector for the longer term. DAY AHEAD: * China releases March inflation numbers on Friday. Hong Kong media reported on Thursday that Chinese inflation in March accelerated to as fast as 5.4 percent from a year earlier.[ID:nL3E7FE0EO] (Reporting by Clement Tan and Vikram Subhedar Editing by Chris Lewis) |
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krisluke
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14-Apr-2011 21:09
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Asian stocks edge up China, Singapore data cheer
Graph with stacks of Australian dollars
SYDNEY (Reuters) - Asian stocks reversed losses on Thursday after Hong Kong media reported upbeat Chinese economic data a day ahead of the official release, and surprisingly strong growth figures from Singapore underscored investor confidence in the region. Gold edged closer to a record high of $1.476.21 as the U.S. dollar fell to fresh 16-month lows versus a basket of major currencies, while U.S. crude firmed to $107.45 a barrel, helped by a sharp fall in U.S. gasoline stocks. Hong Kong's Phoenix TV, citing an unnamed source, reported higher-than-expected increases in Chinese retail sales and industrial output, but also said inflation in the world's second biggest economy had accelerated. Singapore impressed after reporting its economy grew 23.5 percent in the first quarter on an seasonally-adjusted annualised basis, blowing past even the most bullish forecast in a Reuters poll. Singapore's central bank also allowed an immediate rise in the value of its currency to help tackle inflation, which it said would likely stay elevated. The Singapore dollar -- the world's 12th most actively traded currency -- rose to an all-time high of S$1.2477 per U.S. dollar before slipping back slightly. The upbeat data helped Asian stocks regain ground with Japan's Nikkei ending 0.1 percent higher, having earlier fallen as much as 0.9 percent. Stocks elsewhere in Asia put on 0.08 percent, keeping in sight a three-year peak set on Monday. U.S. stock index futures traded modestly higher, suggesting a positive start for Wall Street. Australia's S& P/ASX 200 index was one of the weakest performers in the region, closing down 0.6 percent, led by a 12 percent plunge in contractor Leighton Holdings, which flagged a big year loss. " We've had a fantastic run in the previous three weeks. We're easing back a bit now and that's probably the way we'll glide into Easter," said Austock Securities senior client adviser, Michael Heffernan. U.S. DOLLAR STRUGGLES By allowing its currency to rise, Singapore could encourage other Asian central banks to let their currencies appreciate further to contain imported inflation. " The monetary policy is a little more aggressive than we expected, so I think it's a realisation that inflation is going to be a bigger problem in the months ahead," said Wai Ho Leong, economist at Barclays Capital. " The recent crisis in Japan is probably adding to inflation pressure, rather than subtracting from growth in the near term." Still, last month's devastating earthquake and tsunami in Japan's northeast saw Japanese corporate confidence plunge by a record amount in April, a Reuters survey showed. The U.S. dollar, already under pressure, slipped further in the wake of Singapore's action. Chinese Premier Wen Jiabao, in remarks published by the official Xinhua news agency on Thursday, said China should make its currency more flexible to help rein in price rises. The dollar index, which tracks its performance against a basket of major currencies, plumbed a fresh 16-month trough of 74.642. There was little market reaction to U.S. President Barack Obama's freshly announced goal of cutting the U.S. budget deficit by $4 trillion over 12 years through spending cuts and tax increases on the rich. " The move to fiscal discipline is not likely to weigh materially on growth in 2011," BNP Paribas analysts wrote in a client note, adding it was unlikely to hit 2012 hard as well given it is an election year. " But efforts to address the longer-term fiscal picture would indeed be encouraging." |
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krisluke
Supreme |
14-Apr-2011 21:07
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SGD: Spore tightened its monetary policy Thursday for a 3rd time in a row, intensifying its fight against inflationary pressures that have continued to build on high global commodities prices. The move came as the government reported better-than-expected economic growth for 1Q... The MAS raised its SGD trading band, but left the width and slope of the band unchanged. It said it recentered the trading band below the level of the Spore dollar's nominal effective exchange rate that prevailed prior to Thursday's announcement... The USD/SGD has climbed back from its post MAS record low of 1.2453 and is now at 1.2509. DBS notes the MAS tightening was a bit less than expected, hence the bounce back due to some SGD profit taking. Still, believes the trend is for long-term appreciation. Tips an end-2Q target of 1.2300 but sees support for the USD/SGD around 1.2430. |
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krisluke
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14-Apr-2011 21:05
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Spore Economy: 1Q GDP +8.5% yoy, vs +5.7% forecast by analysts and +12% in 4Q. Growth was led by the manufacturing sector which grew 13.9% yoy. This strong growth was driven by the electronics and precision engineering clusters, which benefitted from a pick-up in business investment in the region… Meanwhile, the construction sector grew 2.6% yoy, reversing the contraction of 2% in the previous quarter. And the services producing industries also expanded 7.2%, following the growth of 8.8 per cent in the preceding quarter. Growth was also driven by the financial services sector, which saw an increase in commercial bank lending activities… OCBC says better-than-expected 1Q GDP expansion suggests resilience in the economy, expects upside to growth and inflation in the coming months, as Singapore has so far weathered the shocks from Japan and Middle East well. Adds, inflation may peak in 1H11, with the MAS tightening to temper inflation by 2H11. Notes biggest risk is in oil prices, and rosy data not yet reflecting full impact from external shocks. |
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krisluke
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13-Apr-2011 22:54
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10 Things You Need To Know This MorningGood morning. Here's what you need to know.
 Image: AP
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krisluke
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13-Apr-2011 22:32
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G20 to work on imbalances plan amid crowded agenda
France's President Nicolas Sarkozy attends the opening of the G20 seminar on the international monetary system, in Nanjing
WASHINGTON/PARIS (Reuters) - The world's biggest economies hope to make progress this week on a plan to identify countries that put the global economy at risk, while China warned against any moves that would curb its red-hot growth. The meeting of the Group of 20 rich and emerging-market nations comes at a time of conflicting economic signals. Just as signs of a strengthening recovery in some rich countries have pushed their central banks to begin to pull back on economic supports, world markets have been rocked by fears that high oil prices will put the brakes on global growth. Finance chiefs from the G20 countries will try to advance a complex plan for better balancing the world economy, and avoiding the kind of imbalances that led to the financial crisis of 2008-09, when they meet on Thursday and Friday. Crowding the agenda at the meetings in Washington will be concerns about oil prices and surging capital flows to emerging markets, both immediate threats to the recovery. The G20, which includes rich and developing nations such as China, India and Brazil, agrees the world economy needs to be weaned from U.S. spending and that more demand must come from trade surplus nations, most notably China. But agreement on how to achieve this better balance is proving difficult. Ahead of the G20 meeting, China, the world's No. 2 economy, warned it would not let others create a " political tool" for curbing its economic expansion by trying to cap its hefty trade surpluses. China is the country most often associated with excessive trade surpluses and has been criticized by advanced and developing economies for its rigid control over the value of its yuan currency, which holds down the cost of its exports. As the G20 seeks consensus on how to lay a more solid foundation for long-term growth, oil prices are near a 32-month high and prices for other commodities, such as corn and gold, have hit records. And hot money flows into emerging markets have driven fears over the risk of asset bubbles. Oil prices retreated on Tuesday as Goldman Sachs warned of a price reversal and the International Energy Agency said the high prices are beginning to curb economic growth. France, the host of the G20 session, which occurs on the sidelines of semiannual meetings of the International Monetary Fund and World Bank, want to build on a hard-fought agreement in February on indicators for measuring global imbalances. This time, French officials say the G20 should not only agree on how to identify those causing imbalances but also devise a way to red-flag those most responsible. " We hope to reach a deal on the methodology this week," said a French source. " We will demand more of the economies which are systemic than the economies which are not." A senior U.S. Treasury official said the G20 hopes to make progress on guidelines for identifying imbalances this week and will soon be able to list countries with the biggest problems. Progress has been slow. China in February refused to accept consideration of excessive accumulation of foreign currency reserves as an indicator of possible imbalances. The U.S. official acknowledged the controversy around the process was a sign of progress that views are converging. " I think it is contentious because it is ploughing new ground." France hopes a road map encompassing not only the indicators to gauge imbalances but a means for applying them can be signed at a summit it will host in November. The U.S. Treasury official cited a heightened awareness among Chinese officials about the need to rebalance its economy to rely less on exports and more on domestic consumption. The Group of Seven club of developed countries meets on Thursday night and the U.S. official said they were likely to hold to their long-standing position that " excessive volatility" in currency exchange markets was unacceptable. The G7 -- the United States, Britain, Canada, France, Germany, Italy and Japan -- conducted a rare cordinated intervention in currency markets last month after the Japanese yen strengthened sharply after the country's earthquake. NEW RISKS EMERGE French officials also want to advance with rules for curbing volatility in commodities prices although officials said there was no likelihood of an agreement in Washington on a proposal to allow trading limits in commodities markets. France, G20 chair this year, wants to make progress towards a code of conduct setting conditions for the first time on the use of controls to tame the type of hot money flows that are threatening to destabilize many emerging markets. The IMF agrees that capital controls can be useful at times, but should be seen as a last resort. G20 members Brazil, South Korea and Turkey have used them and are unlikely to accept curbs that would limit their ability to do so again. In a communique on Friday, the G20 is expected to say the recovery from the 2007-2009 financial crisis is intact despite damage from Japan's earthquake and political instability in North Africa and the Middle East, officials say. (Additional reporting by Yann Le Guernigou in Paris, Glenn Somerville in Washington, Louise Egan in Ottawa and Jan Strupczewski in Brussels |
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krisluke
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13-Apr-2011 22:31
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Hong Kong accelerates land supply plan to cool market
HONG KONG, April 13 (Reuters) - Hong Kong will accelerate a plan to boost land supply by releasing 12 sites in the coming quarter, while the city's financial secretary said on Wednesday that further cooling measures might be taken to stabilise the frothy property market.
The Hong Kong authorities have been grappling with soaring property prices, driven by a low interest rate environment and buying by affluent mainland Chinese investors, lifting prices by about 60 percent since 2009. Even with the accelerated provision of fresh land in the former British colony, however, its finance chief warned that further cooling measures might be considered with February prices continuing to climb beyond 1997 peaks. " The overall property market has continued to rebound in the continued low interest rate environment," Hong Kong financial secretary John Tsang told lawmakers. " I'm very concerned about this situation. I will closely monitor the real estate market and if needed, I won't hesitate to take further measures to reduce the risk of a bubble." Secretary for Development Carrie Lam said 12 plots of land in the space-starved city would be put on the market between April and June, providing an estimated 2,650 residential units. " In January and February the (property) market was very active," said Lam in announcing the land provision programme. " The (government's) determination to increase land supply is undoubtable." Three of the plots would be sold or tendered in April, five in May and four in June, Lam said. At least nine would be for residential purposes, while three would be for commercial or non-residential usage. In February, John Tsang announced in his annual budget that the city would substantially increase land supply for residential use and issue up to HK$10 billion in inflation-linked bonds to ease the sting of rising prices. At the time, Tsang said at least nine more residential sites would be tendered or auctioned in the coming year to replenish the land bank. (Reporting by James Pomfret Editing by Chris Lewis) |
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krisluke
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12-Apr-2011 22:21
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IMF urges U.S. to move quicker to cut debt ratios
* U.S. must move quicker to cut debt ratios
* Fiscal cost of Japan earthquake will be significant * Food and fuel price rises to squeeze emerging markets (Updates with quotes, background, paragraphs six to end) By Lesley Wroughton WASHINGTON, April 12 (Reuters) - The International Monetary Fund on Tuesday urged the United States to outline credible measures to reduce its budget deficit, pressuring the White House to detail plans to ratchet down record debt levels. President Barack Obama on Wednesday will offer proposals for reducing the nation's debt, aiming to seize the high ground in a debate over how best to cut red ink. Republican lawmakers are pushing for deep spending cuts in return for agreeing to raise a limit on the nation's ability to borrow. The IMF said while most advanced economies were taking steps to rein in budget gaps, two of world's largest economies -- Japan and the United States -- had delayed action to nurse their recoveries. The fund said Japan should spell out medium-term fiscal plans as soon as earthquake rebuilding costs become clearer. Japanese authorities said on Tuesday the economic damage from the massive earthquake and tsunami last month is likely to be worse than first thought. [ID:nL3E7FC092] " Countries delaying adjustment in 2011 will face more significant challenges to meet their medium-term objectives," the IMF warned in its updated " Fiscal Monitor" report. BUDGET TANGLE U.S. lawmakers reached a last-minute deal on Friday to avoid a government shutdown when they agreed to $38 billion in spending cuts. Now, with the United States about to hit the $14.3 trillion limit on its borrowing authority, the stakes are even higher because of the risk of potential default. The IMF said " a major" adjustment will be needed in the United States next year to put the budget back on track. In January the IMF issued a stark warning to the United States and Japan to adopt credible deficit-cutting plans, saying markets could soon lose patience and dump their bonds. The 2007-2009 financial crisis led to a dramatic rise in debt issued by developed nations as governments sought to prop up sinking economies and moved to bail out banks. " Market concerns about sustainability remain subdued in the United States, but a further delay of action could be fiscally costly, with deficit increases exacerbated by rising (bond) yields," the IMF cautioned in Tuesday's report. The lender expressed concern that upcoming elections in the United States, France and Japan could complicate policy efforts needed to lower their debt levels. The fund said the biggest fiscal burden in advanced economies will come from spending on pensions and health care. New IMF staff projections suggest annual spending on public health will rise by an average of 3 percentage points of GDP in advanced economies over the next two decades, with an increase of 5 percent of GDP in the United States and 2 percent on average in Europe. FOOD AND FUEL PRESSURES In emerging market economies, where the IMF sees threats from higher oil prices and inflation, deficits are likely to come down further this year. However, the fund warned that higher food and fuel prices could slow the pace of spending cuts. Oil exporters are expected to show sharper declines in their deficits, the IMF said. Oil prices rose to above $126 a barrel last week but eased to about $124 on Tuesday. Meanwhile, in the Middle East, widespread protests in countries such as Tunisia, Egypt, Yemen, Jordan, Bahrain and Syria are likely to fuel an increase in spending on subsidies to ease social pressures from higher oil and food prices. Such steps will widen deficits across the region, the IMF said. (Editing by Neil Stempleman) |
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krisluke
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12-Apr-2011 22:08
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OECD Jobless Rate Continues To Drop In February(RTTNews) - Unemployment in the OECD area declined for a fourth month in a row in February, data released by the Organization for Economic Co-operation and Development (OECD) showed Tuesday. |
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krisluke
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12-Apr-2011 21:53
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Biosensors International Group: Nobori stent approved in Japan Summary: Biosensors International Group (BIG) announced that Terumo Corporation (Terumo) has received approval for the sale of its Nobori drug-eluting stent (DES) in Japan, based on a document released by Japan’s Ministry of Health, Labour and Welfare. The Nobori DES uses the stent technology and proprietary Biolimus A9 drug licensed from BIG (similar to BIG’s BioMatrix DES) in exchange for royalty payments. Hence BIG would be able to reap additional licensing revenues from Terumo moving forward. The DES market for Japan is estimated to be worth ~US$600m and is currently dominated by the four U.S. medical technology giants. We expect Terumo to penetrate this market strongly, underpinned by (i) the proven safety and efficacy of BIG’s DES technology and (ii) Terumo’s ability to leverage on Japanese physician’s loyalty given that it is the first local firm to rollout a DES. We update our assumptions for BIG’s licensing revenues and bump up our FY12F revenue and core earnings forecasts by 7.3% and 10.6% respectively. This in turn raises our DCF-based fair value estimate from S$1.32 to S$1.48. Reiterate BUY. (Wong Teck Ching Andy) Mapletree Logistics Trust (MLT): Capital recycle play kick-started Summary: Mapletree Logistics Trust (MLT) recently announced that a local IT solutions company and CK Holdings have exercised their purchase options on 8 Apr for two MLT properties - 9 and 39 Tampines Street 92 at a purchase consideration of S$12.8m and S$14.7m, respectively. MLT cited that the two properties have building specifications that are now outdated and no longer ideal for modern logistics operations. Given its limited growth potential, it believes that divesting them would be the best option to maximise returns. The net proceeds will be deployed to fund MLT’s recent S$24.5m acquisition of Jian Huang Building, which provides an initial NPI yield of 8.2%. We take delight that MLT is starting to recycle proceeds into better-yielding assets. However, we remain wary of its Japan exposure and increased the country risk premium to 75 bp for its Japan assets in our valuation. Maintain BUY with a reduced RNAV-derived fair value of S$1.01 (prev: S$1.03). (Ong Kian Lin) Olam Int’l: Tata Chemicals taking 25.1% stake in Urea project Summary: Olam International Limited (Olam) announced that Tata Chemical Limited (TCL) – part of the Tata Group – will invest US$290m to acquire 25.1% stake in the Urea Manufacturing Project in Gabon from Olam and the Republic of Gabon (RoG). The investment by TCL represents an Enterprise Valuation (EV) of US$2b, or a 54% premium over its book value this will also effectively reduce Olam’s and RoG’s stakes from 80.0% to 62.9% and 20.0% to 12.0%, respectively. With the latest deal, Olam’s share of the total equity investment will reduce from US$364m to US$146m RoG’s share will also reduce from US$91m to US$19m. According to Olam, execution work on Stream 1 of 1.3m TPA of Urea has already commenced and it is expected to be commissioned in three years’ time TCL will also be primarily responsible for project management during the erection and commissioning of the plant as well as O& M of the plant for the first three years post commercial production. We will be attending an analyst briefing later and will provide more updates later. Due to a change in analyst coverage, our BUY rating and S$3.53 fair value is under review. (Carey Wong) Yangzijiang Shipbuilding: Secures US$512.3m contracts in 1Q11 Summary: Yangzijiang Shipbuilding (YZJ) announced that it has entered into a total of six effective shipbuilding contracts in Mar 2011 worth about US$214.2m. The vessels, which are scheduled for deliveries from 2012 to 2013, comprise two units of 82,000 DWT bulk carriers, two units of 10,000 DWT bulk carriers and two units of 4,800 TEU container ships. This brings the number of effective shipbuilding contracts secured in 1Q11 to 14, totaling US$512.3m, an improvement compared to our estimate of seven contracts (worth about US$196.6m) in 1Q10. According to Lloyd’s List, Greek ship owners have been keen on ordering 4,800 TEU boxships, perceived as a vessel in demand by operators eager to build share in trades in South America and Africa where there are shallower draft ports. Meanwhile, it is encouraging to note that there are still bulk carrier orders despite the weakness in the Baltic Dry Index. We maintain our BUY rating with fair value estimate of S$2.36 on YZJ. (Low Pei Han) Midas Holdings: Capacity expansion plans in Luoyang City Summary: Midas Holdings (Midas) announced yesterday evening that one of its newly incorporated subsidiaries will be establishing a new plant in Luoyang City, Henan Province. This move is in line with Midas’ strategy to expand its aluminium extrusion capacity in Central China to be in closer proximity to its customers. Midas intends to invest an estimated RMB600-650m to cover the capex requirements for its new plant, with construction expected to be completed in 2HCY12. With this new production capacity, Midas’ total annual extrusion production capacity is set to increase by 40% to 70k tonnes. Separately, Midas also said that it has entered into a master supply agreement with Luoyang CSR Mass Transit Vehicle Co (Luoyang CSR). Under the terms of the agreement, Luoyang CSR has agreed to procure 100% of its requirement for aluminium alloy extrusion products and fabricated parts from Midas on a ‘preferred supplier basis’. Our current BUY rating and fair value estimate of S$1.10 is UNDER REVIEW due to a change in analyst coverage. (Research Team) For more information on the above, visit www.ocbcresearch.comfor detailed report. NEWS HEADLINES - Singapore's economy is still on track to grow at the projected 4-6% this year - and inflation to stay relatively tame at 3-4% - despite the earthquake-tsunami-nuclear meltdown triple whammy that hit Japan and the unrests in the Middle East. - The Singapore Exchange will implement circuit breakers for the equity market by early next year. - Singapore has come in third among world exchanges in terms of total capital raised globally, according to Ernst & Young's 1Q 2011 Global IPO update. - Tripartite Developers - a JV between Singapore's Hong Leong Group, City Developments and TID - is expected to begin sales later this week for its Hedges Park Condominium along Upper Changi Road. - Total passenger numbers on Tiger Airways grew 23% to 6m in the Apr 2010-Mar 2011 year, up from 4.9m passengers in the preceding 12 months. - SingTel said its wholly owned subsidiary, Viridian Limited, has purchased 2.83m shares of Bharti Airtel Limited in the open market for about S$26m. |
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krisluke
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12-Apr-2011 21:45
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Strategy & Macro (longer term outlook): Investors should brace themselves for some volatility going forward as GDP forecasts are about to be cut given oil approaching US$120bbl. The IMF has fired the first salvo shaving US growth by 0.2%pts to 2.8%. Nonetheless we think the general trend will still be up as portfolios offload bonds for a better inflation hedge - stocks. Technicals & Inter-Market (Short/Intermediate Term Outlook): The STI closed lower by 26.87 points (0.84%) to close at 3,160.44. Volume was 1.25 billion shares worth S$1.39 billion. Gainers lagged losers 144/331. The Shanghai Composite index shed 7.27 points (0.24%) to close at 3,022.75. Price action neutral, technicals unchanged. In the US, the S& P 500 fell 3.71 points (0.28%) closing at 1,324.46. Alcoa beat profit estimates but fell short of revenue targets. Price action leans towards the bearish side with day lows testing support region 1,320/21. Potential for more downside present if the results season continues to be mediocre. Energy shares fell on concerns that company outlooks might fall short of expectations. Oil fell as well, apparently on a Goldman Sachs call to take profits. Overall, this does tell us that sentiment is leaning more towards the bearish side at this point. We will have to see if the rest of the company results are enough to turn sentiment around. STI technicals are perhaps finally seeing a more meaningful pullback/consolidation. Current overbought RSI conditions in the daily need to be worked off. Price has slid to support at 3,160. Next support at 3,150/40 region before heavier support at 3,120. Resistance at 3,180 before 3200. 
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krisluke
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12-Apr-2011 21:26
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S.Korea bonds firmer after BOK holds fire, governor comments
* Won closes near session low but stays at 31-mth high vs dlr
* Two to five-year notes lead yield drops * C.bank economic forecast revisions, jobless rate due Wed SEOUL, April 12 (Reuters) - South Korean bond yields dropped on Tuesday, welcoming the Bank of Korea's expected move to hold the policy interest rate unchanged and the central bank chief's comments bolstering expectations for a gradual pace of tightening. Bank of Korea Governor Kim Choong-soo signalled further rate increases would likely be needed to rein in inflation and its monetary policy committee made a stronger expression in a statement by saying it would put a " greater" emphasis on price stability. [ID:nL3E7FB2KQ] But Kim's remarks were viewed as similar to previous months' and reaffirmed market expectations for two more hikes starting from May for the remainder of the year. [ID:nL3E7FC0GX] " The governor's comments sounded a little bit dovish and seemed to give an excuse to cover shorts (on the dollar)," said a foreign bank dealer. A majority of analysts expect the central bank to raise its policy rate next month for the fifth time in its current tightening cycle and once again later in the year, according to a Reuters survey conducted after the rate decision. [ID:nL3E7FC0G5] Reflecting the steady market outlook, yields on two to five years dropped more than other maturities', with the 3-year treasury yield down 6 basis points to close at 3.72 percent. June-delivery three-year treasury futures < KTBc1> added 0.15 points to 103.05. The won declined against the dollar after retreating crude oil prices triggered a bout of profit-taking in risky assets across the region. It settled at 1,093.6 per dollar, just off a session low of 1,094.4, but stuck within 2-1/2 year highs. Foreign investors unloaded a net 227 billion won of shares on the Seoul bourse, which scraped an all-time high last week, capping their buying spree started on March 16. By contrast, they were net buyers of 636 billion won in the treasury futures market. On Wednesday, the Bank of Korea is set to revise its 2011 economic forecasts, while the March jobless rate will be released by Statistics Korea. 0730 GMT Prev close Dollar/won 1,093.6 1,084.3 Yen/won 12.9652/58 12.8517 *KTB futures 103.05 102.90 5-yr treasury bonds 4.09 pct 4.15 pct 3-yr treasury bonds 3.72 pct 3.78 pct Average O/N call rate 3.10 pct 2.93 pct ^6-mth KORIBOR 3.54 pct 3.54 pct KOSPI 2,089.40 2,122.39 * Front-month futures on three-year treasury bonds ^ Korea interbank offered rate (Reporting by Kim Yeonhee and Lee Kyong-ho Editing by Jonathan Hopfner) |
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krisluke
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12-Apr-2011 21:24
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Yuan ends down after slew of record highs, guided by PBOC
* PBOC fixes mid-point weaker after six record highs
* Traders see yuan consolidating for rest of week * But yuan will continue to rise in medium term * Yuan at 6.5403, up 4.37 pct since depegging By Lu Jianxin and Jacqueline Wong SHANGHAI, April 12 (Reuters) - The yuan closed down slightly against the dollar on Tuesday after hitting a slew of record highs since the start of this year, with the People's Bank of China signalling it wanted to see some pullback for now. The central bank has engineered a series of record highs for the Chinese currency recently as part of a solution to contain inflation, partly aggravated by surging global commodity prices. But on Tuesday, the PBOC allowed the yuan's mid-point, or its reference rate from which the dollar/yuan can rise or fall 0.5 percent in a given day, to weaken slightly. The central bank has all along adopted a tactic of allowing the yuan to rise for several days, only to then pull it back to deter speculators from betting on one-way appreciation. Conversely, that strategy means the PBOC can also let the yuan fall for a prolonged period of time. " We see the yuan continuing its consolidation for the rest of this week, with the PBOC watching reaction to the yuan's recent slew of record highs," said an Asian bank dealer in Shanghai. " After all, the yuan is still tightly controlled by the PBOC under China's capital account restrictions and no one can fight with the central bank." But traders said the prospect for the yuan appreciating in the medium term remained intact, with the benchmark Reuters Jefferies CRB index , which covers 19 mostly U.S.-traded commodities, having leapt 46 percent since June last year. China is the world's fastest growing market for staple goods. Spot yuan closed at 6.5403 against the dollar, down from Monday's close of 6.5383. The currency has appreciated 4.37 percent since it was depegged in June 2010, and 0.75 percent so far this year. Before trading began, the PBOC fixed the yuan's mid-point at 6.5440, weaker than a record high of 6.5401 on Monday, which was the sixth straight trading day that the PBOC fixed the mid-point at all-time high. The fixing is used by the PBOC to express the government's intentions for the currency. Offshore, one-year non-deliverable forwards were bid at 6.3860 in late trade, up from 6.3740 at the previous close. Their implied yuan rise in a year's time fell to 2.47 percent compared with 2.66 percent. |
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krisluke
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12-Apr-2011 21:22
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Clinton to attend NATO meeting, visit Seoul, Tokyo
U.S. Secretary of State Hillary Clinton listens to a question after the Libya Conference at the Foreign & Commonwealth Office in London
The Western security alliance will meet as NATO uses air power to help Libyan rebels seeking to end Muammar Gaddafi's 42-year rule in the oil-exporting Arab nation, the latest to see a popular revolt against authoritarian leaders. Clinton will be in Berlin from Wednesday through Friday for the talks among the North Atlantic Treaty Organization's 28 members, who will also discuss Afghanistan and hold separate meetings with Georgia, Russia and Ukraine. She will travel to Seoul on Saturday and Sunday amid a diplomatic flurry that seems designed to try to resume talks on ending North Korea's nuclear programs. A South Korean nuclear envoy is in Washington this week to meet top officials, including Deputy Secretary of State Jim Steinberg and Stephen Bosworth, the U.S. special representative for North Korea policy. Clinton ends her trip in Tokyo on Sunday in a gesture of support to Japan following its March 11 earthquake and tsunami, which killed thousands, crippled a nuclear power plant and rattled the world's third-largest economy. While in Japan, she will meet Japanese Prime Minister Naoto Kan and Foreign Minister Takeaki Matsumoto. (Reporting by Arshad Mohammed Editing by Paul Simao) |
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krisluke
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12-Apr-2011 21:20
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Wall St set for lower open on Japan, earnings concerns
The New York Stock Exchange seen with a Wall street sign in front
* Japan raises nuclear crisis level to same as Chernobyl * Futures down: S& P 8.1 pts, Dow 68 pts, Nasdaq 13 pts * For up-to-the-minute market news see [STXNEWS/US] (updates with data) By Angela Moon NEW YORK, April 12 (Reuters) - Wall Street was poised for a lower open on Tuesday in the wake of a disappointing revenue miss from Alcoa and Japan's upgrade of the severity of its nuclear crisis. Investors were cautious after Japan raised the severity of the Fukushima nuclear power plant accident to the highest level on the International Nuclear and Radiological Event Scale, putting it on par with the Chernobyl 1986 disaster. For details, see [ID:nL3E7FB2TZ] The stock market showed a muted reaction to a government report showing the U.S. trade deficit shrank in February, with both imports and exports falling, which suggested a slowdown in global demand.[ID:nCAT005408][ID:nCLACFE7DF] There was also concern because Alcoa Inc < AA.N> , after the closing bell on Monday, reported revenue that missed forecasts, which sent the company's shares lower in post-market trade despite its reporting a first-quarter profit above expectations. [ID:nLDE73B02A] Mining stocks will be in focus as metals prices fell on worries Japan's massive earthquake and a nuclear crisis would weaken recovery prospects in the world's third-largest economy. [ID:nLDE73B066] Selling in key commodities were also triggered after Goldman Sachs < GS.N> warned its clients to lock in trading profits before oil and other markets reverse. U.S. traded shares of Rio Tinto < RIO.N> fell 2.3 percent to $72.10 in premarket trade. " There's been an undercurrent of selling in the market this last week. The tone appears to be becoming more negative. Risk levels appear to be rising. The next few days are going to be important if we don't get a bounce from these oversold levels, that's a negative," said Wayne Kaufman, chief market analyst at John Thomas Financial in New York. Brent crude futures pushed up to around $124.50 a barrel on Tuesday, edging up from a sharp fall, as the International Energy Agency issued a fresh warning that high prices could erode demand. S& P 500 futures < SPc1> fell 8.1 points and were below fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures < DJc1> lost 68 points and Nasdaq 100 futures < NDc1> shed 13 points. Looking at merger and acquisition news, two sources familiar with the matter told Reuters that Hewlett-Packard Co < HPQ.N> had considered buying business software company Tibco Software Inc < TIBX.O> until two weeks ago when talks fizzled. [ID:nN11117616] In other corporate news, Chevron Corp < CVX.N> , the second-largest U.S. oil company, said first-quarter exploration and production earnings would be higher than in the previous quarter. [ID:nN11101509] Also, The Wall Street Journal reported that the Bank of America Corp's < BAC.N> internal auditors are reviewing why its chief financial officer and chief accounting officer were not consulted before the bank disclosed to investors that its dividend increase had been rejected by regulators. [ID:nL3E7FC0FR] U.S. stocks mostly fell on Monday, with energy shares selling off on lower oil prices and concerns that company outlooks may fall short of expectations. [ID:nN11111495] (Reporting by Angela Moon, Editing by Chizu Nomiyama) |
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