By Tom Schoenberg - Jan 7, 2012 4:48 AM GMT+0530
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U.S. pilots and airlines asked a federal judge to stop the Export-Import Bank of the United States from giving Air India $1.3 billion in loan guarantees to buy Boeing Co. aircraft.
U.S. District Judge James Boasberg in Washington today heard arguments by trade associations for the largest U.S. airlines and pilots requesting that he block the guarantees while he considers their legal challenge. Boasberg said he would rule on the request by Jan. 13, three days before Boeing is scheduled to deliver one of its aircraft to Air India.
“It’s highly likely that Air India will put these airliners on routes in competition with American airlines and records show zero jobs would be created,” Robert Bailey, a lawyer for the Air Line Pilots Association, told the judge.
The Air Transport Association of America Inc., now called Airlines for America, filed the lawsuit in November claiming the bank didn’t seek public comments or consider the impact on the U.S. airline industry before approving $1.3 billion in loan guarantees and $2.1 billion in preliminary commitments to support the sale of 30 Boeing aircraft to Air India.
At least 27 of those aircraft are the 787 Dreamliner, which lawyers for the trade groups said are “dramatically efficient.”
Air India is getting “access to the very best planes in the world at a subsidized rate,” Michael Kellogg, a lawyer for the Air Transport Association, told the judge.
Potential Impact
The groups asked the court to find the loan-guarantee commitments unlawful, to prevent them from being issued and to require the Export-Import Bank to study the guarantee’s potential impact on U.S. industry and jobs.
The Export-Import Bank is a federal agency that provides loans, loan guarantees and insurance to foreign companies. According to the lawsuit, the bank’s loan portfolio is “overwhelmingly devoted” to financing the purchase of airplanes for export. In fiscal year 2010, air transportation loans accounted for 47 percent of the bank’s $75.2 billion in total outstanding loans, the lawsuit claims.
The Air Line Pilots Association intervened in the lawsuit in the airlines behalf.
The bank argued that the association lacks any legal basis to challenge the loan commitments and that blocking the commitments would be disastrous for the 77-year institution.
Market Signal
“It would send a signal to the market that it could no longer rely on Ex-Im as a guarantor,” Ian Gershengorn, deputy assistant attorney general in the Justice Department’s civil division, told the judge.
If the Export-Import Bank didn’t guarantee the Air India loans, the airline would have sought financing elsewhere and purchased aircraft from Airbus, the world’s largest passenger- jet maker, Gershengorn said.
“Boeing was awarded a contract of $5 billion with Air India in large part because of efforts by the bank,” he said.
Gershengorn argued that Congress gave the bank wide discretion to operate much like a commercial bank.
He also noted that several of the trade group’s largest members, such as United Air Lines Inc., Continental Airlines Inc., American Airlines Inc., Atlas Air Inc., Federal Express Corp. and United Parcel Service Inc., didn’t join the lawsuit.
Chicago-based Boeing isn’t a party in the case.
The case is Air Transport Association of America Inc. v. Export-Import Bank of the United States, 11-cv-2024, U.S. District Court, District of Columbia (Washington).
To contact the reporter on this story: Tom Schoenberg in Washington at tschoenberg@bloomberg.net
To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net
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Saturday, January 7, 2012
Friday, January 6, 2012
Bids Double Offers on Tax-Exempt Debt as RBI Says Rates Peak: India Credit By Jeanette Rodrigues - Jan 6, 2012
India’s individual investors, lured by yields at about the highest since 2008, offered to buy more than twice the amount of tax-exempt bonds sold by state-run companies as a central banker said interest rates have “peaked.”
National Highways Authority of India and Power Finance Corp. received 335 billion rupees ($6 billion) of bids from private investors for the 140 billion rupees being sold to finance government improvements, underwriters said. The notes yield as much as 8.3 percent, compared with the 7.55 percent that Indian Railways Finance Corp. offered in October, when it sold the nation’s first public issue of tax-free debt.
“The hope that we are now at the top of the rate cycle adds to investor interest and tax-free and tax-deductible bonds offer better implied yields,” S.J. Balesh, a Mumbai-based senior director at Infrastructure Development Finance Co., or IDFC, said in an interview on Jan. 3. “There is more retail interest because of the high yields offered.”
Investors want to lock in yields as Deputy Governor Subir Gokarn signaled yesterday that the Reserve Bank of India’s benchmark (INRPYLD) rate won’t rise from the current 8.5 percent. India’s repurchase rate compares with 0.25 percent in the U.S. and 1 percent in the euro zone after policy makers sacrificed growth last year to rein in price increases in a nation where the average person lives on less than $2 a day. The inflation focus meant that 10-year government bond yields (GIND10YR) rose 65 basis points in 2011 while the Sensitive Index (SENSEX) of shares fell 25 percent.
Bond Bids
IDFC, based in Mumbai, plans to issue tax-deductible bonds “soon,” according to Balesh.
National Highways Authority, the road builder known as NHAI, got 245 billion rupees of bids for its 100-billion rupee debt issue that comprises 10- and 15-year maturities, G. Suresh, the company’s chief general manager for finance, said in an interview on Jan. 4.
Power Finance (POWF), which aims to raise 40 billion rupees from 10- and 15-year debt, has received bids for more than 90 billion rupees, according to Ashish Agarwal, executive director at A.K. Capital Services Ltd., one of the arrangers. Both the NHAI and Power Finance notes are rated AAA by Standard & Poor’s Indian unit, Crisil Ltd.
Rating, Returns
Indian Railway Finance Corp., the funding arm of the nation’s rail ministry, hired arrangers for a sale of tax-exempt bonds that may begin as soon as this month, according to a person with direct knowledge of the matter who declined to be identified because the terms weren’t set.
Trinath Behera, New Delhi-based general manager for bonds at Indian Railway Finance, said in an interview yesterday that a date for the issue hadn’t yet been decided.
The tax breaks on the bonds mean that investors may lock in returns of as much as 12 percent, 3.7 percentage points more than the yield on 10-year government debt, according to Mumbai- based Kotak Mahindra Bank Ltd., one of the arrangers of the NHAI issue.
“The bonds are also benefitting from their top rating, as they are issued by government-backed companies,” Paritosh Kashyap, a Mumbai-based executive vice president at Kotak Mahindra Bank, said in an interview on Jan. 4. The demand for the bonds shows that “the retail market is developing and investors are getting more educated about their investment options,” he said.
Economy Slows
Investors in the government debt market are betting that the central bank will cut borrowing costs in 2012 as the economy slows. Food prices fell 3.36 percent in the week ended Dec. 24 after increasing 0.42 percent the previous week, commerce ministry data showed yesterday. Industrial output (INPIINDY) shrank 5.1 percent in October from a year earlier, the first contraction since June 2009, government data showed last month.
The yield on the government’s benchmark 8.79 percent note due in November 2021 rose one basis point, or 0.01 percentage point, to 8.34 percent today, according to the central bank’s trading system. The yield has dropped 23 basis points this month.
The yield (BCOPAAA0) on 10-year bonds issued by top-rated Indian companies was 9.34 percent yesterday, after touching 9.8 percent in November, the highest level since 2008.
The difference (GIND10YR) in yields between Indian securities due in a decade and similar-maturity U.S. Treasuries has shrunk 9 basis points this month to 635 basis points. Rupee-denominated notes returned 6.7 percent in the past year, according to indexes compiled by HSBC Holdings Plc. Indonesian debt returned 19.2 percent, the most among Asian markets monitored by the lender.
No ‘Win-Win’
Allowing state-run companies to sell tax-free bonds isn’t a “win-win proposition” for the government, according to Mumbai- based A.K. Capital Services Ltd., one of the arrangers for the Power Finance sale.
“The bonds hurt the exchequer as the government is missing out on a heavy amount of taxes,” Ashish Agarwal, a New Delhi- based executive director at A.K. Capital, said in an interview on Jan. 4. This may make the finance ministry “circumspect” about allowing companies to sell more tax-free bonds in the financial year starting April, especially as the economy slows (INQGGDPY), he said.
The rupee advanced 0.4 percent to 52.7550 per dollar today after the RBI’s Gokarn said policy makers are “very concerned” about the currency’s 16 percent depreciation last year.
Default Swaps
The cost of protecting the debt of State Bank of India, considered a proxy for the nation, has surged to 393 basis points from 153 basis points a year earlier, according to data provider CMA, which is owned by CME Group Inc. and compiles prices quoted by dealers in privately negotiated markets. The swaps pay the buyer face value for the underlying securities should a company fail to adhere to its debt agreements.
India’s benchmark Sensex stock index fell for a third day today, dropping 0.7 percent. The index’s slide last year was the worst since 2008.
Investor demand for tax-free bonds will continue to be “amazing,” according to Mumbai-based IDBI Federal Life Insurance Co. that oversees about $430 million.
“The yield is so attractive that eligible investors would not let go of this opportunity,” Aneesh Srivastava, the Mumbai- based chief investment officer at IDBI Federal, said yesterday.
To contact the reporter on this story: Jeanette Rodrigues in Mumbai at jrodrigues26@bloomberg.net
To contact the editor responsible for this story: Sandy Hendry at shendry@bloomberg.net
®2012 BLOOMBERG L.P. ALL RIGHTS RESERVED.
National Highways Authority of India and Power Finance Corp. received 335 billion rupees ($6 billion) of bids from private investors for the 140 billion rupees being sold to finance government improvements, underwriters said. The notes yield as much as 8.3 percent, compared with the 7.55 percent that Indian Railways Finance Corp. offered in October, when it sold the nation’s first public issue of tax-free debt.
“The hope that we are now at the top of the rate cycle adds to investor interest and tax-free and tax-deductible bonds offer better implied yields,” S.J. Balesh, a Mumbai-based senior director at Infrastructure Development Finance Co., or IDFC, said in an interview on Jan. 3. “There is more retail interest because of the high yields offered.”
Investors want to lock in yields as Deputy Governor Subir Gokarn signaled yesterday that the Reserve Bank of India’s benchmark (INRPYLD) rate won’t rise from the current 8.5 percent. India’s repurchase rate compares with 0.25 percent in the U.S. and 1 percent in the euro zone after policy makers sacrificed growth last year to rein in price increases in a nation where the average person lives on less than $2 a day. The inflation focus meant that 10-year government bond yields (GIND10YR) rose 65 basis points in 2011 while the Sensitive Index (SENSEX) of shares fell 25 percent.
Bond Bids
IDFC, based in Mumbai, plans to issue tax-deductible bonds “soon,” according to Balesh.
National Highways Authority, the road builder known as NHAI, got 245 billion rupees of bids for its 100-billion rupee debt issue that comprises 10- and 15-year maturities, G. Suresh, the company’s chief general manager for finance, said in an interview on Jan. 4.
Power Finance (POWF), which aims to raise 40 billion rupees from 10- and 15-year debt, has received bids for more than 90 billion rupees, according to Ashish Agarwal, executive director at A.K. Capital Services Ltd., one of the arrangers. Both the NHAI and Power Finance notes are rated AAA by Standard & Poor’s Indian unit, Crisil Ltd.
Rating, Returns
Indian Railway Finance Corp., the funding arm of the nation’s rail ministry, hired arrangers for a sale of tax-exempt bonds that may begin as soon as this month, according to a person with direct knowledge of the matter who declined to be identified because the terms weren’t set.
Trinath Behera, New Delhi-based general manager for bonds at Indian Railway Finance, said in an interview yesterday that a date for the issue hadn’t yet been decided.
The tax breaks on the bonds mean that investors may lock in returns of as much as 12 percent, 3.7 percentage points more than the yield on 10-year government debt, according to Mumbai- based Kotak Mahindra Bank Ltd., one of the arrangers of the NHAI issue.
“The bonds are also benefitting from their top rating, as they are issued by government-backed companies,” Paritosh Kashyap, a Mumbai-based executive vice president at Kotak Mahindra Bank, said in an interview on Jan. 4. The demand for the bonds shows that “the retail market is developing and investors are getting more educated about their investment options,” he said.
Economy Slows
Investors in the government debt market are betting that the central bank will cut borrowing costs in 2012 as the economy slows. Food prices fell 3.36 percent in the week ended Dec. 24 after increasing 0.42 percent the previous week, commerce ministry data showed yesterday. Industrial output (INPIINDY) shrank 5.1 percent in October from a year earlier, the first contraction since June 2009, government data showed last month.
The yield on the government’s benchmark 8.79 percent note due in November 2021 rose one basis point, or 0.01 percentage point, to 8.34 percent today, according to the central bank’s trading system. The yield has dropped 23 basis points this month.
The yield (BCOPAAA0) on 10-year bonds issued by top-rated Indian companies was 9.34 percent yesterday, after touching 9.8 percent in November, the highest level since 2008.
The difference (GIND10YR) in yields between Indian securities due in a decade and similar-maturity U.S. Treasuries has shrunk 9 basis points this month to 635 basis points. Rupee-denominated notes returned 6.7 percent in the past year, according to indexes compiled by HSBC Holdings Plc. Indonesian debt returned 19.2 percent, the most among Asian markets monitored by the lender.
No ‘Win-Win’
Allowing state-run companies to sell tax-free bonds isn’t a “win-win proposition” for the government, according to Mumbai- based A.K. Capital Services Ltd., one of the arrangers for the Power Finance sale.
“The bonds hurt the exchequer as the government is missing out on a heavy amount of taxes,” Ashish Agarwal, a New Delhi- based executive director at A.K. Capital, said in an interview on Jan. 4. This may make the finance ministry “circumspect” about allowing companies to sell more tax-free bonds in the financial year starting April, especially as the economy slows (INQGGDPY), he said.
The rupee advanced 0.4 percent to 52.7550 per dollar today after the RBI’s Gokarn said policy makers are “very concerned” about the currency’s 16 percent depreciation last year.
Default Swaps
The cost of protecting the debt of State Bank of India, considered a proxy for the nation, has surged to 393 basis points from 153 basis points a year earlier, according to data provider CMA, which is owned by CME Group Inc. and compiles prices quoted by dealers in privately negotiated markets. The swaps pay the buyer face value for the underlying securities should a company fail to adhere to its debt agreements.
India’s benchmark Sensex stock index fell for a third day today, dropping 0.7 percent. The index’s slide last year was the worst since 2008.
Investor demand for tax-free bonds will continue to be “amazing,” according to Mumbai-based IDBI Federal Life Insurance Co. that oversees about $430 million.
“The yield is so attractive that eligible investors would not let go of this opportunity,” Aneesh Srivastava, the Mumbai- based chief investment officer at IDBI Federal, said yesterday.
To contact the reporter on this story: Jeanette Rodrigues in Mumbai at jrodrigues26@bloomberg.net
To contact the editor responsible for this story: Sandy Hendry at shendry@bloomberg.net
®2012 BLOOMBERG L.P. ALL RIGHTS RESERVED.
Thursday, January 5, 2012
Bids Double Offers on Tax-Exempt Debt as RBI Says Rates Peak: India Credit By Jeanette Rodrigues - Jan 5, 2012
India’s individual investors, lured by yields at about the highest since 2008, offered to buy more than twice the amount of tax-exempt bonds sold by state-run companies as a central banker said interest rates have “peaked.”
National Highways Authority of India and Power Finance Corp. received 335 billion rupees ($6 billion) of bids from private investors for the 140 billion rupees being sold to finance government improvements, underwriters said. The notes yield as much as 8.3 percent, compared with the 7.55 percent that Indian Railways Finance Corp. offered in October, when it sold the nation’s first public issue of tax-free debt.
“The hope that we are now at the top of the rate cycle adds to investor interest and tax-free and tax-deductible bonds offer better implied yields,” S.J. Balesh, a Mumbai-based senior director at Infrastructure Development Finance Co., or IDFC, said in an interview on Jan. 3. “There is more retail interest because of the high yields offered.”
Investors want to lock in yields as Deputy Governor Subir Gokarn signaled yesterday that the Reserve Bank of India’s benchmark (INRPYLD) rate won’t rise from the current 8.5 percent. India’s repurchase rate compares with 0.25 percent in the U.S. and 1 percent in the euro zone after policy makers sacrificed growth last year to rein in price increases in a nation where the average person lives on less than $2 a day. The inflation focus meant that 10-year government bond yields (GIND10YR) rose 65 basis points in 2011 while the Sensitive Index (SENSEX) of shares fell 25 percent.
Bond Bids
IDFC, based in Mumbai, plans to issue tax-deductible bonds “soon,” according to Balesh.
National Highways Authority, the road builder known as NHAI, got 245 billion rupees of bids for its 100-billion rupee debt issue that comprises 10- and 15-year maturities, G. Suresh, the company’s chief general manager for finance, said in an interview on Jan. 4.
Power Finance (POWF), which aims to raise 40 billion rupees from 10- and 15-year debt, has received bids for more than 90 billion rupees, according to Ashish Agarwal, executive director at A.K. Capital Services Ltd., one of the arrangers. Both the NHAI and Power Finance notes are rated AAA by Standard & Poor’s Indian unit, Crisil Ltd.
Rating, Returns
Indian Railway Finance Corp., the funding arm of the nation’s rail ministry, hired arrangers for a sale of tax-exempt bonds that may begin as soon as this month, according to a person with direct knowledge of the matter who declined to be identified because the terms weren’t set.
Trinath Behera, New Delhi-based general manager for bonds at Indian Railway Finance, said in an interview yesterday that a date for the issue hadn’t yet been decided.
The tax breaks on the bonds mean that investors may lock in returns of as much as 12 percent, 3.7 percentage points more than the yield on 10-year government debt, according to Mumbai- based Kotak Mahindra Bank Ltd., one of the arrangers of the NHAI issue.
“The bonds are also benefitting from their top rating, as they are issued by government-backed companies,” Paritosh Kashyap, a Mumbai-based executive vice president at Kotak Mahindra Bank, said in an interview on Jan. 4. The demand for the bonds shows that “the retail market is developing and investors are getting more educated about their investment options,” he said.
Economy Slows
Investors in the government debt market are betting that the central bank will cut borrowing costs in 2012 as the economy slows. Food prices fell 3.36 percent in the week ended Dec. 24 after increasing 0.42 percent the previous week, commerce ministry data showed yesterday. Industrial output (INPIINDY) shrank 5.1 percent in October from a year earlier, the first contraction since June 2009, government data showed last month.
The yield on the government’s benchmark 8.79 percent note due in November 2021 fell four basis points, or 0.04 percentage point, to 8.33 percent yesterday, according to the central bank’s trading system. The yield has dropped 24 basis points this month.
The yield (BCOPAAA0) on 10-year bonds issued by top-rated Indian companies was 9.34 percent yesterday, after touching 9.8 percent in November, the highest level since 2008.
The difference (GIND10YR) in yields between Indian securities due in a decade and similar-maturity U.S. Treasuries has shrunk 13 basis points this month to 639 basis points. Rupee-denominated notes returned 6.7 percent in the past year, according to indexes compiled by HSBC Holdings Plc. Indonesian debt returned 19.2 percent, the most among Asian markets monitored by the lender.
No ‘Win-Win’
Allowing state-run companies to sell tax-free bonds isn’t a “win-win proposition” for the government, according to Mumbai- based A.K. Capital Services Ltd., one of the arrangers for the Power Finance sale.
“The bonds hurt the exchequer as the government is missing out on a heavy amount of taxes,” Ashish Agarwal, a New Delhi- based executive director at A.K. Capital, said in an interview on Jan. 4. This may make the finance ministry “circumspect” about allowing companies to sell more tax-free bonds in the financial year starting April, especially as the economy slows (INQGGDPY), he said.
The rupee was little changed at 52.9850 per dollar yesterday after the RBI’s Gokarn said policy makers are “very concerned” about the currency’s 16 percent depreciation last year.
Default Swaps
The cost of protecting the debt of State Bank of India, considered a proxy for the nation, has surged to 392 basis points from 153 basis points a year earlier, according to data provider CMA, which is owned by CME Group Inc. and compiles prices quoted by dealers in privately negotiated markets. The swaps pay the buyer face value for the underlying securities should a company fail to adhere to its debt agreements.
India’s benchmark Sensex stock index fell for a second day yesterday, dropping 0.2 percent. The index’s slide last year was the worst since 2008.
Investor demand for tax-free bonds will continue to be “amazing,” according to Mumbai-based IDBI Federal Life Insurance Co. that oversees about $430 million.
“The yield is so attractive that eligible investors would not let go of this opportunity,” Aneesh Srivastava, the Mumbai- based chief investment officer at IDBI Federal, said yesterday.
To contact the reporter on this story: Jeanette Rodrigues in Mumbai at jrodrigues26@bloomberg.net
To contact the editor responsible for this story: Sandy Hendry at shendry@bloomberg
National Highways Authority of India and Power Finance Corp. received 335 billion rupees ($6 billion) of bids from private investors for the 140 billion rupees being sold to finance government improvements, underwriters said. The notes yield as much as 8.3 percent, compared with the 7.55 percent that Indian Railways Finance Corp. offered in October, when it sold the nation’s first public issue of tax-free debt.
“The hope that we are now at the top of the rate cycle adds to investor interest and tax-free and tax-deductible bonds offer better implied yields,” S.J. Balesh, a Mumbai-based senior director at Infrastructure Development Finance Co., or IDFC, said in an interview on Jan. 3. “There is more retail interest because of the high yields offered.”
Investors want to lock in yields as Deputy Governor Subir Gokarn signaled yesterday that the Reserve Bank of India’s benchmark (INRPYLD) rate won’t rise from the current 8.5 percent. India’s repurchase rate compares with 0.25 percent in the U.S. and 1 percent in the euro zone after policy makers sacrificed growth last year to rein in price increases in a nation where the average person lives on less than $2 a day. The inflation focus meant that 10-year government bond yields (GIND10YR) rose 65 basis points in 2011 while the Sensitive Index (SENSEX) of shares fell 25 percent.
Bond Bids
IDFC, based in Mumbai, plans to issue tax-deductible bonds “soon,” according to Balesh.
National Highways Authority, the road builder known as NHAI, got 245 billion rupees of bids for its 100-billion rupee debt issue that comprises 10- and 15-year maturities, G. Suresh, the company’s chief general manager for finance, said in an interview on Jan. 4.
Power Finance (POWF), which aims to raise 40 billion rupees from 10- and 15-year debt, has received bids for more than 90 billion rupees, according to Ashish Agarwal, executive director at A.K. Capital Services Ltd., one of the arrangers. Both the NHAI and Power Finance notes are rated AAA by Standard & Poor’s Indian unit, Crisil Ltd.
Rating, Returns
Indian Railway Finance Corp., the funding arm of the nation’s rail ministry, hired arrangers for a sale of tax-exempt bonds that may begin as soon as this month, according to a person with direct knowledge of the matter who declined to be identified because the terms weren’t set.
Trinath Behera, New Delhi-based general manager for bonds at Indian Railway Finance, said in an interview yesterday that a date for the issue hadn’t yet been decided.
The tax breaks on the bonds mean that investors may lock in returns of as much as 12 percent, 3.7 percentage points more than the yield on 10-year government debt, according to Mumbai- based Kotak Mahindra Bank Ltd., one of the arrangers of the NHAI issue.
“The bonds are also benefitting from their top rating, as they are issued by government-backed companies,” Paritosh Kashyap, a Mumbai-based executive vice president at Kotak Mahindra Bank, said in an interview on Jan. 4. The demand for the bonds shows that “the retail market is developing and investors are getting more educated about their investment options,” he said.
Economy Slows
Investors in the government debt market are betting that the central bank will cut borrowing costs in 2012 as the economy slows. Food prices fell 3.36 percent in the week ended Dec. 24 after increasing 0.42 percent the previous week, commerce ministry data showed yesterday. Industrial output (INPIINDY) shrank 5.1 percent in October from a year earlier, the first contraction since June 2009, government data showed last month.
The yield on the government’s benchmark 8.79 percent note due in November 2021 fell four basis points, or 0.04 percentage point, to 8.33 percent yesterday, according to the central bank’s trading system. The yield has dropped 24 basis points this month.
The yield (BCOPAAA0) on 10-year bonds issued by top-rated Indian companies was 9.34 percent yesterday, after touching 9.8 percent in November, the highest level since 2008.
The difference (GIND10YR) in yields between Indian securities due in a decade and similar-maturity U.S. Treasuries has shrunk 13 basis points this month to 639 basis points. Rupee-denominated notes returned 6.7 percent in the past year, according to indexes compiled by HSBC Holdings Plc. Indonesian debt returned 19.2 percent, the most among Asian markets monitored by the lender.
No ‘Win-Win’
Allowing state-run companies to sell tax-free bonds isn’t a “win-win proposition” for the government, according to Mumbai- based A.K. Capital Services Ltd., one of the arrangers for the Power Finance sale.
“The bonds hurt the exchequer as the government is missing out on a heavy amount of taxes,” Ashish Agarwal, a New Delhi- based executive director at A.K. Capital, said in an interview on Jan. 4. This may make the finance ministry “circumspect” about allowing companies to sell more tax-free bonds in the financial year starting April, especially as the economy slows (INQGGDPY), he said.
The rupee was little changed at 52.9850 per dollar yesterday after the RBI’s Gokarn said policy makers are “very concerned” about the currency’s 16 percent depreciation last year.
Default Swaps
The cost of protecting the debt of State Bank of India, considered a proxy for the nation, has surged to 392 basis points from 153 basis points a year earlier, according to data provider CMA, which is owned by CME Group Inc. and compiles prices quoted by dealers in privately negotiated markets. The swaps pay the buyer face value for the underlying securities should a company fail to adhere to its debt agreements.
India’s benchmark Sensex stock index fell for a second day yesterday, dropping 0.2 percent. The index’s slide last year was the worst since 2008.
Investor demand for tax-free bonds will continue to be “amazing,” according to Mumbai-based IDBI Federal Life Insurance Co. that oversees about $430 million.
“The yield is so attractive that eligible investors would not let go of this opportunity,” Aneesh Srivastava, the Mumbai- based chief investment officer at IDBI Federal, said yesterday.
To contact the reporter on this story: Jeanette Rodrigues in Mumbai at jrodrigues26@bloomberg.net
To contact the editor responsible for this story: Sandy Hendry at shendry@bloomberg
Tuesday, January 3, 2012
Top Funds See Yields at One-Year Lows on Series of Rate Cuts: India Credit By V. Ramakrishnan - Jan 3, 2012
Yields on India’s sovereign bonds will drop to a one-year low by March, the nation’s top- performing debt-fund managers predict, after the central bank signaled it would cut borrowing costs as inflation cools.
The yield on the government’s benchmark 10-year note will slide 36 basis points to 8 percent, according to Tata Mutual Fund and Peerless Mutual Fund, both based in Mumbai. Tata Mutual’s bond fund returned 13.04 percent in 2011, the most among 521 fixed-income plans tracked by Bloomberg and almost double the average gain of all funds. Investors in Peerless Mutual earned 12.96 percent, the second-best performance.
Reserve Bank of India Governor Duvvuri Subbarao, who raised borrowing costs (INRPYLD) seven times last year, said he expects a “reversal” of monetary tightening in 2012 as inflation and growth slow, according to an interview posted on the British Broadcasting Corp.’s website on Jan. 2. Rupee-denominated government notes gained 6.2 percent in the past year, compared with 6.4 percent in China, 5.8 percent in Russia and 17.6 percent in Brazil, JPMorgan Chase & Co. indexes show.
“The outlook for bonds will be good as inflation is coming down and investors expect a series of rate cuts,” Murthy Nagarajan, the Mumbai-based head of fixed income at Tata Mutual that oversees $4.2 billion, said in an interview on Jan. 2. “We are running long positions in all our funds.”
Wholesale Prices
The 521 debt funds tracked by Bloomberg returned 6.76 percent on average last year, compared with a loss of 22 percent in the nation’s 495 equity funds. Commodity funds earned 24 percent as gold prices gained for an 11th consecutive year.
Tata Mutual’s top performing Fixed Income Portfolio Fund Scheme C3 (TAFC3RG) bought securities maturing in less than 270 days on signs Asia’s third-biggest economy is slowing. Industrial output (INPIINDY) shrank 5.1 percent in October from a year earlier, the first contraction since June 2009, government data showed last month. Wholesale prices, which the central bank uses to guide monetary policy, rose 9.11 percent in November, the least in a year.
“We have acknowledged that growth is going to be a concern,” Subbarao told the BBC. “We could expect a reversal of monetary tightening, but it’s difficult to say when that will take place and in what shape it will roll out.”
Alpana Killawala, a Mumbai-based spokeswoman for the Reserve Bank, directed Bloomberg to a policy statement issued on Dec. 16, when Subbarao underlined risks to economic growth.
Bonds Rally
Yields on debt (GIND1YR) due in 12 months slid 30 basis points, or 0.30 percentage point, in December to 8.47 percent, while those on securities due in 10 years fell 17 basis points.
The yield on the 8.79 percent note due in November 2021 slipped three basis points to 8.36 percent yesterday on speculation the Reserve Bank will cut the benchmark repurchase rate when it meets on Jan. 24, according to the central bank’s trading system.
The outcome of this month’s policy review may be influenced by wholesale-price data for December due on Jan. 13, according to Peerless Mutual.
“If inflation decelerates below 8 percent in December, the central bank will have leeway to cut interest rates,” Ganti N. Murthy, the Mumbai-based head of fixed-income at Peerless Mutual that oversees about $1.1 billion, said in an interview on Jan. 2. “These are good levels to buy government notes as there can be rate cuts ahead.”
Debt Sales
Increases in wholesale (INFINFY) prices will be “close to” 6 percent by March, Murthy predicts, spurring the Reserve Bank to cut the repo rate by as much as 50 basis points in 2012.
The government’s announcement last week that it would sell 8.5 percent more debt than planned in the year ending March will weigh on bonds, according to Mumbai-based Canara Robeco Asset Management Ltd. The finance ministry will borrow a record 5.1 trillion rupees in the current financial year, the central bank said Dec. 30, raising the bond-sale target for a second time in three months.
“Yields will inch up as there will be no let-up in borrowings,” Ritesh Jain, the Mumbai-based head of investment at Canara Robeco, which oversees about $1.3 billion, said in an interview on Jan. 2. “In the current environment, it will be very difficult for the government to hold down its borrowings.”
Ten-year note yields may range from 8.40 percent to 8.80 percent in 2012, Jain said. Canara Robeco’s InDigo Fund, which wasn’t included in the ranking because it also invests in gold, returned 14.6 percent last year.
Fund Holdings
India’s higher yields are attracting global investors. International investors bought (FIINDEBT) $3.9 billion more of India’s bonds than they sold last month, taking their ownership to $26.1 billion, according to exchange data. They increased holdings by $8.4 billion in 2011 as a declining currency made the debt cheaper.
As their holdings rose, the difference (USGG10YR) in yields between the nation’s debt due in a decade and similar-maturity U.S. Treasuries shrank to 641 basis points yesterday from a record 697 basis points reached Nov. 9.
The rupee lost 16 percent last year, the worst performance among Asia’s most-traded currencies, according to data compiled by Bloomberg. It advanced 0.2 percent to 53.2250 per dollar yesterday.
The cost of credit protection on State Bank of India using credit-default swaps was 395 basis points on Jan. 2, seven basis points higher than a week earlier, according to data provider CMA, which is owned by CME Group Inc. and compiles prices quoted by dealers in the privately negotiated market. Some investors consider the lender a proxy for the nation.
The contracts pay the buyer face value in exchange for the underlying securities or the cash equivalent should a company fail to adhere to its debt agreements.
State Bank of Bikaner & Jaipur, a unit of the nation’s largest commercial bank, forecasts the central bank will cut the repo rate by 25 basis points to 8.25 percent on Jan. 24.
“Cooling inflation and slowing growth may prompt the central bank to reverse its rate-tightening cycle soon,” R.S. Chauhan, the Mumbai-based chief dealer of treasury at State Bank of Bikaner & Jaipur, said in an interview yesterday. “That expectation will help bonds to rally further.”
The 10-year yield may drop to 8 percent by March, he said.
To contact the reporter on this story: V. Ramakrishnan in Mumbai at rvenkatarama@bloomberg.net
To contact the editors responsible for this story: Sandy Hendry at shendry@bloomberg.net
®2012 BLOOMBERG L.P. ALL RIGHTS RESERVED.
The yield on the government’s benchmark 10-year note will slide 36 basis points to 8 percent, according to Tata Mutual Fund and Peerless Mutual Fund, both based in Mumbai. Tata Mutual’s bond fund returned 13.04 percent in 2011, the most among 521 fixed-income plans tracked by Bloomberg and almost double the average gain of all funds. Investors in Peerless Mutual earned 12.96 percent, the second-best performance.
Reserve Bank of India Governor Duvvuri Subbarao, who raised borrowing costs (INRPYLD) seven times last year, said he expects a “reversal” of monetary tightening in 2012 as inflation and growth slow, according to an interview posted on the British Broadcasting Corp.’s website on Jan. 2. Rupee-denominated government notes gained 6.2 percent in the past year, compared with 6.4 percent in China, 5.8 percent in Russia and 17.6 percent in Brazil, JPMorgan Chase & Co. indexes show.
“The outlook for bonds will be good as inflation is coming down and investors expect a series of rate cuts,” Murthy Nagarajan, the Mumbai-based head of fixed income at Tata Mutual that oversees $4.2 billion, said in an interview on Jan. 2. “We are running long positions in all our funds.”
Wholesale Prices
The 521 debt funds tracked by Bloomberg returned 6.76 percent on average last year, compared with a loss of 22 percent in the nation’s 495 equity funds. Commodity funds earned 24 percent as gold prices gained for an 11th consecutive year.
Tata Mutual’s top performing Fixed Income Portfolio Fund Scheme C3 (TAFC3RG) bought securities maturing in less than 270 days on signs Asia’s third-biggest economy is slowing. Industrial output (INPIINDY) shrank 5.1 percent in October from a year earlier, the first contraction since June 2009, government data showed last month. Wholesale prices, which the central bank uses to guide monetary policy, rose 9.11 percent in November, the least in a year.
“We have acknowledged that growth is going to be a concern,” Subbarao told the BBC. “We could expect a reversal of monetary tightening, but it’s difficult to say when that will take place and in what shape it will roll out.”
Alpana Killawala, a Mumbai-based spokeswoman for the Reserve Bank, directed Bloomberg to a policy statement issued on Dec. 16, when Subbarao underlined risks to economic growth.
Bonds Rally
Yields on debt (GIND1YR) due in 12 months slid 30 basis points, or 0.30 percentage point, in December to 8.47 percent, while those on securities due in 10 years fell 17 basis points.
The yield on the 8.79 percent note due in November 2021 slipped three basis points to 8.36 percent yesterday on speculation the Reserve Bank will cut the benchmark repurchase rate when it meets on Jan. 24, according to the central bank’s trading system.
The outcome of this month’s policy review may be influenced by wholesale-price data for December due on Jan. 13, according to Peerless Mutual.
“If inflation decelerates below 8 percent in December, the central bank will have leeway to cut interest rates,” Ganti N. Murthy, the Mumbai-based head of fixed-income at Peerless Mutual that oversees about $1.1 billion, said in an interview on Jan. 2. “These are good levels to buy government notes as there can be rate cuts ahead.”
Debt Sales
Increases in wholesale (INFINFY) prices will be “close to” 6 percent by March, Murthy predicts, spurring the Reserve Bank to cut the repo rate by as much as 50 basis points in 2012.
The government’s announcement last week that it would sell 8.5 percent more debt than planned in the year ending March will weigh on bonds, according to Mumbai-based Canara Robeco Asset Management Ltd. The finance ministry will borrow a record 5.1 trillion rupees in the current financial year, the central bank said Dec. 30, raising the bond-sale target for a second time in three months.
“Yields will inch up as there will be no let-up in borrowings,” Ritesh Jain, the Mumbai-based head of investment at Canara Robeco, which oversees about $1.3 billion, said in an interview on Jan. 2. “In the current environment, it will be very difficult for the government to hold down its borrowings.”
Ten-year note yields may range from 8.40 percent to 8.80 percent in 2012, Jain said. Canara Robeco’s InDigo Fund, which wasn’t included in the ranking because it also invests in gold, returned 14.6 percent last year.
Fund Holdings
India’s higher yields are attracting global investors. International investors bought (FIINDEBT) $3.9 billion more of India’s bonds than they sold last month, taking their ownership to $26.1 billion, according to exchange data. They increased holdings by $8.4 billion in 2011 as a declining currency made the debt cheaper.
As their holdings rose, the difference (USGG10YR) in yields between the nation’s debt due in a decade and similar-maturity U.S. Treasuries shrank to 641 basis points yesterday from a record 697 basis points reached Nov. 9.
The rupee lost 16 percent last year, the worst performance among Asia’s most-traded currencies, according to data compiled by Bloomberg. It advanced 0.2 percent to 53.2250 per dollar yesterday.
The cost of credit protection on State Bank of India using credit-default swaps was 395 basis points on Jan. 2, seven basis points higher than a week earlier, according to data provider CMA, which is owned by CME Group Inc. and compiles prices quoted by dealers in the privately negotiated market. Some investors consider the lender a proxy for the nation.
The contracts pay the buyer face value in exchange for the underlying securities or the cash equivalent should a company fail to adhere to its debt agreements.
State Bank of Bikaner & Jaipur, a unit of the nation’s largest commercial bank, forecasts the central bank will cut the repo rate by 25 basis points to 8.25 percent on Jan. 24.
“Cooling inflation and slowing growth may prompt the central bank to reverse its rate-tightening cycle soon,” R.S. Chauhan, the Mumbai-based chief dealer of treasury at State Bank of Bikaner & Jaipur, said in an interview yesterday. “That expectation will help bonds to rally further.”
The 10-year yield may drop to 8 percent by March, he said.
To contact the reporter on this story: V. Ramakrishnan in Mumbai at rvenkatarama@bloomberg.net
To contact the editors responsible for this story: Sandy Hendry at shendry@bloomberg.net
®2012 BLOOMBERG L.P. ALL RIGHTS RESERVED.
Monday, January 2, 2012
India, China Manufacturing Shows Resilience By Unni Krishnan - Jan 2, 2012
Manufacturing in India and China improved in December, a sign the world’s fastest-growing major economies are withstanding Europe’s debt crisis.
The Purchasing Managers’ Index in India rose to 54.2, the most in six months, from 51 in November, HSBC Holdings Plc and Markit Economics said in an e-mailed statement yesterday. In China, the index was at 50.3 from 49 in November, the Beijing- based logistics federation said in a statement on Jan. 1. A number above 50 indicates expansion.
In another positive sign, a Chinese index for non- manufacturing industries rose today. Europe’s crisis may still cap demand for goods from Asia with an index for Chinese export orders indicating a third month of contraction in December. India’s economic growth will be constrained by higher borrowing costs and global economic weakness, HSBC and Markit said.
“Asian economies are holding up as of now despite the turmoil in overseas markets,” said Madan Sabnavis, chief economist at Mumbai-based Credit Analysis & Research Ltd. “Europe’s debt woes though will keep demand for Asian goods subdued in the coming months.”
A Chinese non-manufacturing PMI jumped to 56 in December from 49.7 in November, the logistics federation and statistics bureau said today.
Optimism in Asia
Asian stocks rose on optimism the region’s economies will withstand Europe’s crisis. The MSCI Asia Pacific Excluding Japan Index gained 1.3 percent as of 9:33 a.m. in Hong Kong.
In the euro area, where leaders return to work this week seeking to rescue the single currency from fragmentation, a contraction in the manufacturing sector eased from November as an indicator of output in Germany, the region’s largest economy, reached a two-month high.
A manufacturing gauge based on a survey of purchasing managers in the 17-nation euro region rose to 46.9 from 46.4 in November, London-based Markit Economics said yesterday.
In China, the “festival effects” of western and Chinese New Year celebrations helped to boost the manufacturing PMI, said the logistics federation, which releases the data with the statistics bureau. China has also unwound some tightening measures to spur growth, cutting banks’ reserve requirements in November for the first time since 2008.
Chinese Stocks
The Shanghai Composite Index (SHCOMP) tumbled 22 percent last year, the most since 2008, on concern that monetary tightening and efforts to rein in property prices in big cities will limit growth. The index’s 33 percent drop since 2009 makes it the worst performer among the world’s 15 biggest markets.
In the Chinese manufacturing PMI, an index of export orders was at 48.6 from 45.6 in November, still below 50, the dividing line between contraction and expansion. A measure of output jumped to 53.4 from 50.9.
A Chinese manufacturing index released by HSBC and Markit on Dec. 30 indicated that manufacturing contracted for a second month. At the same time, HSBC said that “the pace of China’s slowdown is starting to stabilize.”
India’s “manufacturing activity rebounded on the back of increases in output and new orders,” Leif Eskesen, a Singapore- based economist at HSBC, said in the statement yesterday. “Inflationary pressures remain firm leaving no room for the RBI to ease its tight monetary policy stance in the near term.”
In India’s PMI data, measures of output, employment, orders, and export orders all rose, HSBC said.
India’s central bank on Dec. 16 kept rates unchanged for the first time in eight meetings after the economy expanded in the three months through September at the weakest pace in more than two years.
Car Sales
The Society of Indian Automobile Manufacturers may cut its annual domestic passenger-car sales target as higher rates and fuel prices sap demand for Maruti Suzuki India Ltd. and Honda Motor Co. vehicles, Sugato Sen, a senior director for the group, said last month.
The Reserve Bank of India’s repurchase rate is 8.5 percent after 13 increases since mid-March 2010. The next policy decision is scheduled to be announced on Jan. 24.
India’s central bank may reverse its rate increases to boost growth as inflation is showing signs of easing, the British Broadcasting Corp. reported citing Governor Duvvuri Subbarao. The central bank’s approach to managing inflation and growth will be different in 2012, the BBC quoted Subbarao in an interview posted on its website yesterday.
India’s benchmark wholesale-price inflation slowed to a one-year low of 9.11 percent in November from 9.73 percent in October.
India’s inflation readings in December were “not encouraging,” according to the statement from HSBC and Markit. Input price increases remained “well above historical levels” and the index of output prices rose to 56.2 from 55.4 in November, the statement showed.
To contact the reporter on this story: Unni Krishnan in New Delhi at ukrishnan2@bloomberg.net
To contact the editor responsible for this story: Paul Panckhurst at ppanckhurst@bloomberg.net
®2012 BLOOMBERG L.P. ALL RIGHTS RESERVED.
The Purchasing Managers’ Index in India rose to 54.2, the most in six months, from 51 in November, HSBC Holdings Plc and Markit Economics said in an e-mailed statement yesterday. In China, the index was at 50.3 from 49 in November, the Beijing- based logistics federation said in a statement on Jan. 1. A number above 50 indicates expansion.
In another positive sign, a Chinese index for non- manufacturing industries rose today. Europe’s crisis may still cap demand for goods from Asia with an index for Chinese export orders indicating a third month of contraction in December. India’s economic growth will be constrained by higher borrowing costs and global economic weakness, HSBC and Markit said.
“Asian economies are holding up as of now despite the turmoil in overseas markets,” said Madan Sabnavis, chief economist at Mumbai-based Credit Analysis & Research Ltd. “Europe’s debt woes though will keep demand for Asian goods subdued in the coming months.”
A Chinese non-manufacturing PMI jumped to 56 in December from 49.7 in November, the logistics federation and statistics bureau said today.
Optimism in Asia
Asian stocks rose on optimism the region’s economies will withstand Europe’s crisis. The MSCI Asia Pacific Excluding Japan Index gained 1.3 percent as of 9:33 a.m. in Hong Kong.
In the euro area, where leaders return to work this week seeking to rescue the single currency from fragmentation, a contraction in the manufacturing sector eased from November as an indicator of output in Germany, the region’s largest economy, reached a two-month high.
A manufacturing gauge based on a survey of purchasing managers in the 17-nation euro region rose to 46.9 from 46.4 in November, London-based Markit Economics said yesterday.
In China, the “festival effects” of western and Chinese New Year celebrations helped to boost the manufacturing PMI, said the logistics federation, which releases the data with the statistics bureau. China has also unwound some tightening measures to spur growth, cutting banks’ reserve requirements in November for the first time since 2008.
Chinese Stocks
The Shanghai Composite Index (SHCOMP) tumbled 22 percent last year, the most since 2008, on concern that monetary tightening and efforts to rein in property prices in big cities will limit growth. The index’s 33 percent drop since 2009 makes it the worst performer among the world’s 15 biggest markets.
In the Chinese manufacturing PMI, an index of export orders was at 48.6 from 45.6 in November, still below 50, the dividing line between contraction and expansion. A measure of output jumped to 53.4 from 50.9.
A Chinese manufacturing index released by HSBC and Markit on Dec. 30 indicated that manufacturing contracted for a second month. At the same time, HSBC said that “the pace of China’s slowdown is starting to stabilize.”
India’s “manufacturing activity rebounded on the back of increases in output and new orders,” Leif Eskesen, a Singapore- based economist at HSBC, said in the statement yesterday. “Inflationary pressures remain firm leaving no room for the RBI to ease its tight monetary policy stance in the near term.”
In India’s PMI data, measures of output, employment, orders, and export orders all rose, HSBC said.
India’s central bank on Dec. 16 kept rates unchanged for the first time in eight meetings after the economy expanded in the three months through September at the weakest pace in more than two years.
Car Sales
The Society of Indian Automobile Manufacturers may cut its annual domestic passenger-car sales target as higher rates and fuel prices sap demand for Maruti Suzuki India Ltd. and Honda Motor Co. vehicles, Sugato Sen, a senior director for the group, said last month.
The Reserve Bank of India’s repurchase rate is 8.5 percent after 13 increases since mid-March 2010. The next policy decision is scheduled to be announced on Jan. 24.
India’s central bank may reverse its rate increases to boost growth as inflation is showing signs of easing, the British Broadcasting Corp. reported citing Governor Duvvuri Subbarao. The central bank’s approach to managing inflation and growth will be different in 2012, the BBC quoted Subbarao in an interview posted on its website yesterday.
India’s benchmark wholesale-price inflation slowed to a one-year low of 9.11 percent in November from 9.73 percent in October.
India’s inflation readings in December were “not encouraging,” according to the statement from HSBC and Markit. Input price increases remained “well above historical levels” and the index of output prices rose to 56.2 from 55.4 in November, the statement showed.
To contact the reporter on this story: Unni Krishnan in New Delhi at ukrishnan2@bloomberg.net
To contact the editor responsible for this story: Paul Panckhurst at ppanckhurst@bloomberg.net
®2012 BLOOMBERG L.P. ALL RIGHTS RESERVED.
Sunday, January 1, 2012
Most Asian Stocks Fall, Euro Weakens By Shiyin Chen - Jan 1, 2012
Most Asian stocks (MXAPJ) declined on the first trading day of 2012, while the South Korean won and the euro weakened on concern the global economic recovery will be hampered as Europe’s debt crisis enters a new year.
More than two shares retreated (MXAP) for every one that rose on the MSCI Asia Pacific excluding Japan Index, which retreated 0.1 percent at 9:17 a.m. in Hong Kong. Financial markets from Japan to Hong Kong and the U.S. are closed for a holiday. The won fell 0.2 percent to 1,154.75 per dollar and the euro retreated 0.1 percent to $1.2943. Silver advanced as much as 0.2 percent to $27.8875 per ounce, set for a third day of gains.
Indexes of stocks and commodities had the worst yearly returns since the financial crisis in 2008. South Korea said yesterday export growth will slow this year and Singapore’s government said its economy grew less than previously forecast in 2011. Data today may confirm European manufacturing shrank for a fifth straight month, as regional leaders return to work from the Christmas holidays seeking to buy time to rescue the single currency from fragmentation.
Taiwan’s Taiex Index (TWSE) slipped 0.4 percent, while South Korea’s Kospi Index gained 0.5 percent. India’s SGX S&P CNX Nifty Index futures climbed 0.3 percent after the government said yesterday it will allow overseas individual investors to directly buy local equities.
South Korea’s export growth will probably slow to 6.7 percent this year from 19.6 percent in 2011, the Ministry of Knowledge Economy said yesterday. Separately, Singapore’s Prime Minister Lee Hsien Loong said the island’s gross domestic product rose 4.8 percent in 2011, compared with the government’s earlier forecast of a 5 percent increase, and said the economy will expand 1 percent to 3 percent in 2012.
Data yesterday showed China’s purchasing managers’ index climbed to 50.3 in December from 49 in November, beating all forecasts in a Bloomberg News survey of 15 economists. A gauge of euro-region manufacturing was 46.9 in December from 46.4 the previous month, according to economists surveyed (PMITMEZ) by Bloomberg News before Markit Economics releases the data today. A reading below 50 indicates contraction.
To contact the reporter on this story: Shiyin Chen in Singapore at schen37@bloomberg.net
To contact the editor responsible for this story: Richard Dobson at rdobson4@bloomberg.net
®2012 BLOOMBERG L.P. ALL RIGHTS RESERVED.
More than two shares retreated (MXAP) for every one that rose on the MSCI Asia Pacific excluding Japan Index, which retreated 0.1 percent at 9:17 a.m. in Hong Kong. Financial markets from Japan to Hong Kong and the U.S. are closed for a holiday. The won fell 0.2 percent to 1,154.75 per dollar and the euro retreated 0.1 percent to $1.2943. Silver advanced as much as 0.2 percent to $27.8875 per ounce, set for a third day of gains.
Indexes of stocks and commodities had the worst yearly returns since the financial crisis in 2008. South Korea said yesterday export growth will slow this year and Singapore’s government said its economy grew less than previously forecast in 2011. Data today may confirm European manufacturing shrank for a fifth straight month, as regional leaders return to work from the Christmas holidays seeking to buy time to rescue the single currency from fragmentation.
Taiwan’s Taiex Index (TWSE) slipped 0.4 percent, while South Korea’s Kospi Index gained 0.5 percent. India’s SGX S&P CNX Nifty Index futures climbed 0.3 percent after the government said yesterday it will allow overseas individual investors to directly buy local equities.
South Korea’s export growth will probably slow to 6.7 percent this year from 19.6 percent in 2011, the Ministry of Knowledge Economy said yesterday. Separately, Singapore’s Prime Minister Lee Hsien Loong said the island’s gross domestic product rose 4.8 percent in 2011, compared with the government’s earlier forecast of a 5 percent increase, and said the economy will expand 1 percent to 3 percent in 2012.
Data yesterday showed China’s purchasing managers’ index climbed to 50.3 in December from 49 in November, beating all forecasts in a Bloomberg News survey of 15 economists. A gauge of euro-region manufacturing was 46.9 in December from 46.4 the previous month, according to economists surveyed (PMITMEZ) by Bloomberg News before Markit Economics releases the data today. A reading below 50 indicates contraction.
To contact the reporter on this story: Shiyin Chen in Singapore at schen37@bloomberg.net
To contact the editor responsible for this story: Richard Dobson at rdobson4@bloomberg.net
®2012 BLOOMBERG L.P. ALL RIGHTS RESERVED.
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