Asia - Economic Data & News

Re: Asia - Economic Data & News

Postby blid2def » Tue Sep 16, 2008 9:24 am

Hahahaha.... very farnee lah you. :D But hey, who knows, maybe one day we will be big and steady enough to really provide news/analysis to others. :D
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Re: Asia - Economic Data & News

Postby helios » Tue Sep 16, 2008 11:07 am

Asian Stocks Extend Global Rout on Lehman, AIG, Oil Decline

Bloomberg - Asian stocks plunged the most in six months, extending a global rout, led by creditors of Lehman Brothers Holdings Inc. and commodity producers after raw- material prices slumped.

Mitsubishi UFJ Financial Group Inc., the largest Japanese bank, dropped 9.8 percent in Tokyo. Babcock & Brown Ltd., among Australia's biggest losers from the global credit crisis, sank 32 percent. American International Group Inc., seeking funds to avoid failure, plunged 61 percent yesterday in New York, part of the biggest tumble in U.S. stocks since the September 2001 terrorist attacks. Nippon Mining Holdings Inc. lost 5.5 percent, leading mining companies lower, as oil and copper dropped.

Source: Bloomberg
Full Article: http://www.bloomberg.com/apps/news?pid= ... refer=home
Date: 16-Sept.
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Asia - Economic Data & News

Postby ishak » Tue Sep 16, 2008 8:42 pm

Asia central banks try to calm markets with cash, words
Reuters, 16 Sep 2008

* Japan banks get biggest cash injection since March
* Indonesia cuts repo rate, keeps main policy rate steady
* Australia, India pump funds into money markets
* Interbank rates jump in Hong Kong, Korea
* Investors bet on 25 bps Fed cut, analysts sceptical


Japan, Australia and India flooded money markets with cash on Tuesday as central banks across Asia-Pacific sought to prevent the upheaval on Wall Street from clogging the pipes of the global financial system.

The region's banks dished out US$17 billion, following Monday's US$70 billion Federal Reserve injection into the US money market, which seized up after Lehman Brothers collapsed to become the latest casualty of the 13-month old credit crisis.

Last weekend's dramatic events that also saw crisis-hit Merrill Lynch taken over by Bank of America and insurer American International Group scrambling to raise cash, increased bets on a Fed interest rate cut later on Tuesday.

The Bank of Japan (BOJ) gave the banking system its biggest cash injection in almost six months as the prime minister met top financial policy makers to discuss the fallout of the latest act in the credit turmoil that pushed Lehman into bankruptcy.

The rates at which banks lend to each other jumped in South Korea and the financial hubs of Hong Kong and Singapore, while Asian stock markets, many of them closed for a holiday on Monday, tumbled and currencies whipsawed.

'I expect the BOJ to keep a generous funding stance for a while until market jitters subside,' said Shinsuke Kanabu, joint general manager at money broker Central Tanshi.

Authorities across Asia said they were ready to act and Japan's central bank backed that up by injecting billions of dollars into the banking system.

'The Bank of Japan will carefully monitor the recent situation surrounding US financial institutions and its impact,' Governor Masaaki Shirakawa said in a statement.

The central bank, which begins a two-day rate review on Tuesday, pumped 2.5 trillion yen (US$23.67 billion) into the money market in two injections, the biggest since March 31, pushing the overnight call rate slightly lower to 0.52 per cent.

Fed cut?

Indonesia reduced its overnight repo rate, at which commercial banks can borrow overnight funds from the central bank by 200 basis points to 10.25 per cent to boost liquidity, while it kept its benchmark BI target rate at 9.25 per cent.

The Bank of Japan is expected to leave its benchmark interest rate unchanged at 0.5 per cent on Wednesday, with its banking system largely unscathed by the global credit squeeze triggered by US mortgage defaults.

In contrast, markets are pricing in an 88 per cent chance of a 25 basis point cut in the US benchmark rate to 1.75 per cent.

Economists, however, expect the central bank to express its readiness to cut rates swiftly if needed, but to stop short of lowering borrowing costs just yet. .

US markets appeared poised for another selloff on Tuesday after ratings agencies downgraded AIG's debt, complicating its battle for survival.

Shockwaves from the Wall Street crisis prompted the Reserve Bank of Australia to pump nearly A$1.8 billion (US$1.5 billion) into the banking system, nearly three times as much as the market's estimated requirement, in its second injection in two days.

The Reserve Bank of India added almost 60 billion rupees (US$1.32 billion) through a refinance operation, its biggest injection in at least a month.

And China surprised markets on Monday with its first interest rate cut since 2002, seen partly as support the jittery stock and property markets Hong Kong, South Korea, Taiwan and New Zealand all offered verbal reassurances.

'We will take appropriate steps if we see fluctuations in the foreign exchange market,' South Korean Vice Finance Minister Kim Dong-soo said.

The presidential Blue House has called a meeting of ministers to discuss the impact of the latest turmoil on the economy, a South Korean government source said, speaking on the customary condition of anonymity.

While the region's officials sought to calm markets and said their banking systems were robust enough to withstand the turbulence, they made clear there was more pain to come.

'As events in the United States demonstrated in the past 24 hours, regrettably, it has a long way to run yet,' Australian Prime Minister Kevin Rudd told parliament.
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Re: Asia - Economic Data & News

Postby ishak » Tue Sep 16, 2008 9:33 pm

ishak wrote:Asia central banks try to calm markets with cash, words
Reuters, 16 Sep 2008

* Japan banks get biggest cash injection since March
* Indonesia cuts repo rate, keeps main policy rate steady
* Australia, India pump funds into money markets
* Interbank rates jump in Hong Kong, Korea
* Investors bet on 25 bps Fed cut, analysts sceptical




MAS says ready to inject liquidity

Reuters, 16 Sep 2008

Singapore's central bank said on Tuesday the country's three banks were well-capitalised, but that it was ready to inject extra liquidity into financial markets if necessary.

'MAS stands ready to inject additional liquidity if the situation warrants,' the Monetary Authority of Singapore said in a statement.
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Asia - Economic Data & News

Postby ishak » Wed Sep 17, 2008 12:38 pm

Central banks dish out emergency cash despite AIG rescue
Reuters, 17 Sep 2008

* Stocks rally after AIG rescue, but lending tight
* Australia, Japan inject US$22.5b into money markets
* Dollar overnight funds trade at up to 8.5%


Japan and Australia pumped more emergency funds into money markets on Wednesday, as a US government bailout of insurer AIG did little to ease a funding squeeze triggered by the crisis engulfing Wall Street.

Overnight dollar funds were quoted at 7.5 per cent in Asia, compared with the Federal Reserve's 2 per cent target rate.

Traders in Singapore said dollar funds were costing as much as 8.5 per cent, down from 10 per cent late on Tuesday.

'The market is still short on dollars. Guys here indicate all are scrambling for dollars,' said Suresh Kumar Ramanathan, head of currency and rates strategy at CIMB Investment Bank in Kuala Lumpur.

Lending between banks nearly seized up this week after the global credit crisis pushed Lehman Brothers into bankruptcy, Merrill Lynch in the arms of Bank of America and insurer American International Group (AIG) to the brink of collapse - all during one tumultuous weekend.

Tuesday's US$85 billion government bailout of the struggling US insurance giant sparked a relief rally in US and Asian shares, but barely relieved the pressure on money markets.

Australia's central bank supplied the banking with extra cash for the third day running, more than doubling the previous day's injection to A$4.285 billion (US$3.4 billion), nearly twice the market's estimated cash need.

Bank of Japan (BOJ) pumped two trillion yen (US$19.05 billion) into the market after overnight rates spiked up and dealers expected Wednesday's total injection to top Tuesday's supply, which was the biggest in almost six months.

'Funding tightness is worse than yesterday, and bidding by foreign banks and securities firms stands out,' said a money market dealer at a big Japan bank.

The BOJ is due to announce its rate decision after a two-day meeting and is expected to keep its benchmark unchanged just as the Fed did on Tuesday.

The Federal Reserve, which supplied a bridge loan for the AIG rescue, disappointed market players who had bet that it would top up its injection of emergency funds with an interest rate cut.

'The degree of confidence among participants in the market is at a low level. Cutting the cost of money - like if the Fed had cut last night - is not necessarily the solution,' said Patrick Bennett, Asia currency and rates strategist at Societe Generale in Hong Kong.

'What they need to do is bring confidence back into the market.'

In Australia, the spread between Australian three-month bank bill rates and three-month overnight index swap rates remained around the widest in five months at 60 basis points.

Bank bill/swap spreads are seen as an indication of banks' willingness to lend to one another, with a wider spread suggesting tougher lending conditions.

And Japan's overnight call money rate shot up above 0.7 per cent, well above the central bank's benchmark target rate of 0.5 per cent.

Throughout this week's Wall Street turbulence that in one fell swoop has radically changed the face of the US financial industry, policymakers from Germany to New Zealand were at pains to reassure local markets that such scenario did not have to repeat itself on their home turf.

Australia's central bank on Wednesday echoed earlier official comments and said in its annual report that the nation's banks were in good health and there had never been any doubt about the solvency of its commercial banks.
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Asia - Economic Data & News

Postby ishak » Wed Sep 17, 2008 1:01 pm

Macquarie denies story on finance fears
Reuters, 17 Sep 2008

Macquarie Group, Australia's biggest investment bank, denied on Wednesday a media report that investors were concerned the company would struggle to refinance A$5 billion (US$3.97 billion) in debt soon.

'Macquarie remains well funded and well capitalised with liquid assets of more than A$20 billion as at 30 June 2008, which is twice the level of a year ago,' it said in a statement.

'The author (of The Australian newspaper article) did not provide the group with an opportunity to respond to these claims.'

Scary, another rumour.
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Asia - Economic Data & News

Postby ishak » Thu Sep 18, 2008 3:26 pm

Asia battles to shield markets from Wall St crisis
Reuters, 18 Sep 2008

* China drops repo funds in second policy easing this week
* Japan, Australia, India inject funds into money markets
* Overnight dollar rates ease to 6-8.5%
* South Korea supplies dollars, signals cut in bond supply

SYDNEY/SHANGHAI - Asian authorities poured more cash into money markets on Thursday and sprang to the defence of tumbling currencies, bonds and stocks to prevent upheaval on Wall Street from shattering regional confidence.

China relaxed policy for the second time this week, while Japan, Australia and India pumped a further US$28 billion into money markets which nearly seized up after the collapse of Lehman Brothers and the nationalisation of US insurer AIG.

South Korea sold dollars in the swap market and said it would try to halt the slide in bond prices, the Philippines intervened to support the peso, and Taiwan warned it could use a state fund to prop up stocks as markets whipsawed across the region facing it toughest test since the Asian financial crisis of 1997.

The Asian Development Bank urged the region's policymakers and regulators to get down to business now to shield the banks from the turmoil triggered by US mortgage defaults that have inflicted more than US$400 billion in losses and write-downs on Western lenders.

Asian banks have largely escaped the worst of the losses from defaults on US sub-prime home loans that have now escalated into Wall Street's worst crisis since the Great Depression and threaten to rupture the global financial system.

'Even if sub-prime-related losses have to date been lower than elsewhere, this is no guarantee recent events will not affect major Asian financial institutions,' Haruhiko Kuroda, the president of the ADB said in Manila.

'We need to establish best practices for handling liquidity shortages or ensuring effective financial sector safety nets,' Mr Kuroda said.

Global stock markets plunged after US government's US$85 billion rescue of insurance giant American International Group (AIG) failed to calm investors, now wondering which company will be the next victim of the 13-month old credit crisis.

Overnight, news emerged of takeovers involving No 2 US investment bank Morgan Stanley, top US savings and loan Washington Mutual and major UK mortgage lender HBOS, reflecting the seismic change in the global financial landscape.

'Banks are still reluctant to lend money to each other, everybody seems to sit on stockpiles of cash,' said Markus Ammann, a trader at Bayerische Hypo und Vereinsbank in Hong Kong.

The squeeze eased a notch in early Asian business on Thursday, but US dollars still were in short supply and overnight funds traded at 6-8.5 per cent, still well above their usual level close to the Federal Reserve's 2 per cent target.

The Bank of Japan, pumped 2.5 trillion yen (US$23.92 billion) on Thursday into the money market, topping up the 5.5 trillion injection in the past two days, as overnight rates crawled back above the central bank's 0.5 per cent policy target.

Australia's central bank added a total A$3.015 billion (US$2.40 billion) in cash to the market in its daily operation, bringing its injection this week to A$11.2 billion. In India, the central bank supplied banks with 62.4 billion Indian rupees (US$1.35 billion), its biggest injection in at least a month.

Well-oiled money markets where banks lend short term funds to each other to smooth out daily swings in their balances are crucial for the proper functioning of the financial system and the economy at large.

Banks around the world have responded to the squeeze, exacerbated by investors' flight into safe havens of gold and government bonds, by flooding markets with cash and verbal reassurances, but with only limited success.

China's central bank surprised markets by allowing yields on its three-month bills to drop 4 basis points to at an auction after keeping the rate steady for six month. That was effectively the second policy relaxation this week after a interest rate cut on Monday.

Eight out of nine currencies in emerging Asia tracked by Reuters fell on Monday and traders said the Philippines central bank was in the market selling dollars to support the peso.

Taiwan said it may use a state fund set up to smooth out market swings, to put a floor under the stock market that lost 10 per cent this week.

The Bank of Korea said it was selling dollars in the local dollar/won swap market and a finance ministry official said the government may reduce bond sales to support debt prices.
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Asia - Economic Data & News

Postby ishak » Thu Sep 18, 2008 7:50 pm

Asia at risk from US fallout: ADB
AP, 18 Sep 2008

The Asian Development Bank (ADB) warned on Thursday that Asia's financial institutions remain at risk from US financial turmoil even if the region's losses from the sub-prime crisis have been lower than elsewhere.

Asia appear to be cushioned against immediate effects of the turmoil with its growing domestic demand, rising foreign currency reserves and healthy current accounts, but vulnerabilities remain, ADB President Haruhiko Kuroda told a Manila regional forum on the US sub-prime mortgage crisis.

'Even if subprime-related losses have to date been lower than elsewhere, there is no guarantee recent events will not affect major Asian financial institutions,' Mr Kuroda said.

He called for the establishment of an 'Asian Financial Stability Dialogue' among finance ministers, central banks and financial regulators in the region to coordinate regulatory development and improve surveillance of the region's financial markets.

'This week's turbulence only underlines the urgent need for central banks and regulators to assess the underlying problems and build a cogent and proactive plan of action to better preserve regional financial stability,' Mr Kuroda said.

Mr Keith Lui, executive director for market supervision of Hong Kong's Securities and Futures Commission, said the crisis will have minimal impact in Asia given the region's limited exposure to sub-prime credit products.

The region has also been strengthened by post-1997 Asian financial crisis reforms, including a more robust regulatory and infrastructure framework and enhanced governance, he added.

But Mr David Fernandez, head of JP Morgan's Emerging Asia Research, said pain from the US financial crisis is being felt most acutely in Asia, where stock markets are now among worst performing among emerging economies.

Asian stocks tumbled on Thursday as investors feared more financial institutions could succumb to the global financial crisis after the collapse of Lehman Brothers and government bailout of American International Group.
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Asia - Economic Data & News

Postby ishak » Fri Sep 19, 2008 9:50 am

S-E Asian firms are good buys for private funds
They are politically steady, with safe banks and stable currencies, says CVC

BT, 19 Sep 2008

Amid global financial strife, companies in Indonesia, Malaysia and Singapore present good opportunities for private equity funds, says leading fund CVC.

CVC, one of the top five private equity funds worldwide in April, raised US$4.2 billion for its third Asia-Pacific fund and expects to invest 25-30 per cent of it in South-east Asia, said Asia-Pacific managing partner Roy Kuan.

It is looking at deals in Indonesia, Malaysia and Singapore because valuations in these countries have become attractive, he said, adding: 'More owners of businesses are selling - in Singapore particularly.'

Many people who set up their companies in the 1970s and 80s are now in their 60s and their children are not interested in the business, he pointed out.

Indonesia tends to be overlooked but has turned quite favourable for foreign investors, according to Sigit Prasetya, CVC's Asia-Pacific managing director and head for South-east Asia. 'Politically it's quite steady, banks are safe, the currency is stable and the economy is least open to the global markets,' he said. Exports make up less than 30 per cent of gross domestic product (GDP).

So far, CVC's deals in South-east Asia include the public-to-private acquisition of Malaysian betting company Magnum in June this year, a transaction valued at US$1.54 billion.

In August 2007, CVC and Standard Chartered Private Equity took over Singapore-based Amtek Engineering. And there were reports last month that they are looking to sell the company for $1 billion - almost double what they paid for it.

While bear markets have made valuations attractive, the turmoil in financial markets has made borrowing more difficult, said Mr Kuan. 'Right now, there's less debt financing. We have to work harder to find that finance,' he said.

CVC usually borrows 40-60 per cent for a deal, and Mr Kuan said that he foresees more equity-funded acquisitions in the next 12 months.

Its model is to buy businesses with a leading market position and good management and work with the existing managers. 'We want to bring the management in as owners and employees,' said Mr Kuan.

Typically, the managers will own 10-15 per cent of the company and to do so, will invest a year's gross salary, he said. They are given a preferential ratio, called in jest the 'envy ratio' which refers to them putting in about 2 per cent of capital and getting 10 per cent of the company.

'It's a European model we have followed for 26 years, no stock options and big salaries,' Mr Kuan said.

CVC, founded in 1981 and based in Luxembourg, manages more than US$43 billion in equity funds. It has completed 270 transactions since 1981, including over 30 in Asia - more than any other buyout fund in the region.
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Asia - Economic Data & News

Postby ishak » Mon Sep 22, 2008 11:26 am

Asia sheltered thus far
BT, 22 Sep 2008

Some described it as a once-in-a-life-time event. The unfolding of the financial crisis in the West sent stock markets globally into a tailspin. Early last week, the US markets fell the most since the Sept 11, 2001 terrorist attacks. But when the US government stepped in with the mother-of-all bailout plan and banned naked short-selling, and a number of central banks chipped in to inject liquidity into the markets, investors' relief sent Wall Street into its biggest two-day rally since October 1987. Almost all the losses earlier in the week were recovered.

The blue-chip Dow Jones Industrial Average fell merely 0.29 per cent in the week to 11,388.44. The broad-market Standard & Poor's 500 index rose 0.27 per cent to 1,255.08 and the technology-heavy Nasdaq composite managed a gain of 0.56 per cent to 2,273.90.

However, the jury is still out as to whether what the US government is doing is enough to diffuse the crisis. 'It's like having a heart attack, and you go and get your chest cracked open and get it fixed, but the next morning you're still hurting,' Reuters quoted Warren Simpson, managing director at Stephens Capital Management in Little Rock, Arkansas, as saying. 'This has been a beast of biblical proportions. Nobody has seen anything like it.'

After curbing short-selling and guaranteeing mutual funds in an effort to stabilise financial markets, the US government last week said it is preparing to mop up hundreds of billions of dollars in bad mortgage debt. Sources put the numbers at between US$500 billion and US$800 billion.

'We must now take further, decisive action to fundamentally and comprehensively address the root cause of our financial system's stresses,' US Treasury Secretary Henry Paulson said. 'The federal government must implement a programme to remove these illiquid assets that are weighing down our financial institutions and threatening our economy.'

The US government has pledged more than US$1 trillion to prop up the financial system and housing market. The US Treasury said on Friday it would use US$50 billion to back money-market mutual funds whose asset values fall below $1.

Banks worldwide have suffered more than US$500 billion of writedowns and loan losses since the global credit crisis began more than a year ago. The crisis grew more acute this month with government takeovers of mortgage-finance companies Fannie Mae and Freddie Mac; the bankruptcy of Lehman Brothers Holdings Inc; Merrill Lynch & Co's agreement to be bought by Bank of America Corp; and a bailout of insurer American International Group (AIG). This came just six months after a government-backed rescue of Bear Stearns Cos.

Despite the US government and global central banks' measures, questions remain about their ability to contain a credit crunch that has kept global markets lurching from one crisis to another for more than a year. 'The bottom line is, it doesn't do anything to address the genesis of the whole problem, which is housing,' Bill Strazzullo, partner and chief market strategist at Bell Curve Trading in Boston, was quoted by Reuters as saying. 'It treats the symptoms, not the root problem. Housing prices will keep going down, and that means more bad loans, more writedowns, more pressure on bank balance sheets.'

In Singapore, shares are expected to remain volatile as investors await assurances that moves to address a deep global financial crisis will bring results, dealers said. 'We're in a period of a very volatile market,' AFP quoted Chan Tuck Sing, dealing director at UOB Kay Hian brokerage, as saying. 'It doesn't take very much to tip over one side or the other.'

In the week ended Sept 19, the blue-chip Straits Times Index closed at 2,559.07, down 11.60 points or 0.45 per cent for the week.

Average daily volume traded for the week was 1.44 billion shares valued at $1.77 billion, compared with 966.75 million shares worth $1.32 billion the previous week.

Smaller-cap stocks, however, did not have such luck as to recover most of their losses for the week. As our portfolios show, most still ended significantly lower - up to 11 per cent lower.

In comparison to the maelstrom in the West, Asia has been relatively sheltered thus far. According to Jan Lambregts, the corporate balance sheets in Asia are in better shape now than in 1997 and 2001. Leverage is less of a problem.

The banking sector here is also healthier. And policy makers now have more degrees of freedom when it comes to monetary, fiscal or foreign exchange policies because of the increased foreign exchange reserves, improved fiscal balances, better current account balances and structural reforms.

'Asia is the best region to be in next year,' he said. But he cautioned that although Asia can take a punch, there are no winners in a protracted global slowdown.
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