Feb. 25 (Bloomberg) -- Australia’s dollar weakened, reversing earlier gains, as speculation Greece won’t be able to push through fiscal cuts needed to gain European Union help in paying its debts undermined demand for higher-yielding assets.
The so-called Aussie pared this month’s advance versus the U.S. dollar after Standard & Poor’s said yesterday it may downgrade Greece’s credit rating by the end of March. Demand for the South Pacific nations’ currencies also declined as Asian stocks and commodities fell. Concern over Greece’s sovereign risk may prompt the Reserve Bank of Australia to keep borrowing costs unchanged at next week’s meeting, Barclays Capital said.
“The risk remains that concerns about sovereign credit ratings in the euro area could lead the RBA to hold off once again,” said David Forrester, a currency economist at Barclays in Singapore. “The news flow on this front remains discouraging and a bit of a weight on the Australian dollar.”
Australia’s currency dropped to 89.20 U.S. cents as of 12:51 p.m. in Sydney, from 89.37 cents yesterday in New York, reversing earlier gains of as much as 0.2 percent. It is up 1 percent so far this month. It fell to 80.13 yen from 80.56 yen.
New Zealand’s dollar declined to 69.05 U.S. cents from 69.34 cents. The so-called kiwi fell to 61.98 yen from 62.50 yen.
The South Pacific nations’ currencies declined as the MSCI Asia Pacific Index of regional shares slumped 0.1 percent, having earlier gained as much as 0.2 percent.
“We believe that a further downgrade of Greece of one to two notches is possible within a month,” S&P analysts led by Marko Mrsnik in London said in a statement that was released late Feb. 24.
Greece Rating
S&P cut Greece’s rating in December from A- to BBB+ and signaled then it may reduce the grade again. The government has since struggled to persuade investors it can slash the budget deficit from last year’s 12.7 percent of gross domestic product without outside help or a default.
Declines in the New Zealand dollar were tempered after Federal Reserve Chairman Ben S. Bernanke said the U.S. needs low interest rates, safeguarding the South Pacific nation’s yield advantage.
“Expect yield support for the New Zealand dollar again to factor throughout trading today,” said David Croy, a strategist at ANZ Investment Bank in Wellington. Bernanke “reassured markets that it will be a long process to revert to normalization,” he said.
U.S. Rates
Bernanke said the U.S. economy is in a “nascent” recovery that still requires low borrowing costs to encourage demand from consumers and businesses once federal stimulus expires.
“A sustained recovery will depend on continued growth in private-sector final demand for goods and services,” Bernanke told the House Financial Services Committee in Washington yesterday at the start of his two days of semi-annual testimony before Congress. “Private final demand does seem to be growing at a moderate pace.”
Benchmark interest rates are 3.75 percent in Australia and 2.5 percent in New Zealand, compared with 0.1 percent in Japan and as low as zero in the U.S., attracting investors to the South Pacific nations’ higher-yielding assets. The risk in such trades is that currency market moves will erase profits.
New Zealand’s two-year swap rate, a fixed payment made to receive floating rates which is sensitive to rate expectations, rose to 4.155 percent today from 4.1478 percent yesterday.
Australian government bonds rose for a second day. The yield on the benchmark 10-year note fell two basis points to 5.53 percent, according to data compiled by Bloomberg. The 5.25 percent security due March 2019 advanced 0.12, or A$1.20 per A$1,000 face amount, to 98.04.
Wednesday, February 24, 2010
Tuesday, February 23, 2010
Asia Stocks Fall for First Time in Three Days on U.S. Concern
Feb. 24 (Bloomberg) -- Asian stocks declined for the first time in three days, led by materials companies and carmakers, after a drop in U.S. consumer confidence to a 10-month low spurred concern that the economic recovery will slow.
BHP Billiton Ltd., the world’s largest mining company, fell 1.8 percent in Sydney on speculation a slowdown will dent demand for metals. Canon Inc., a camera maker that gets 79 percent of sales outside Japan, sank 3.4 percent, leading Japanese exporters lower after the dollar weakened against the yen. Hyundai Motor Co., South Korea’s biggest carmaker, declined 3 percent after AutoWeek magazine said the company halted U.S. sales of some cars due to a door-lock problem.
“The U.S. consumer confidence report has again created nervousness about the fragility of the recovery and its sustainability,” said Nader Naeimi, an investment strategist in Sydney at AMP Capital Investors, which oversees about $90 billion globally. “Nevertheless, the fundamentals remain strong and we are still seeing good earnings coming through.”
The MSCI Asia Pacific Index fell 1.3 percent to 117.48 as of 10:28 a.m. in Tokyo, snapping a 3.2 percent gain in the past two days. Eight times as many stocks declined as rose. The gauge has lost 7.3 percent from a 17-month high on Jan. 15 on concern governments will start withdrawing stimulus measures, and that Greece, Spain and Portugal will struggle to curb deficits.
Japan’s Nikkei 225 Stock Average dropped 2 percent to 10,146.17. Australia’s S&P/ASX 200 Index declined 1 percent in Sydney. South Korea’s Kospi Index slipped 1.1 percent.
Confidence, Commodities Decline
Futures on the Standard & Poor’s 500 Index fell 0.1 percent. The measure retreated 1.2 percent in New York yesterday after the Conference Board’s confidence index for February decreased to the lowest level since April 2009, a report from the New York-based private research group showed.
In addition, the Ifo institute in Munich said its survey of German business confidence unexpectedly fell for the first time in 11 months in February as the coldest winter in 14 years damped retail sales and construction.
Material producers sank the most among the MSCI Asia Pacific Index’s 10 industry groups. BHP fell 2.2 percent to A$41.17 and was the biggest drag on the gauge. Rio Tinto Group, the world’s No. 3 mining company, lost 2.3 percent to A$70.59. Mitsubishi Corp., a trading company that gets about 40 percent of sales from commodities, declined 2 percent to 2,218 yen in Tokyo.
Crude oil for April delivery lost 1.8 percent in New York yesterday, the steepest decline in two weeks. The London Metal Exchange Index of six metals including copper and zinc dropped for a second day yesterday, slipping 2.3 percent.
Dollar Weakens
Japanese exporters declined as the dollar weakened to as low as 89.92 yen in Tokyo from 91.08 at the 3 p.m. close of stock trading yesterday. Japanese companies consider an average level of 92.90 as the dividing line between losses and profits, the Cabinet Office said on Feb. 19.
Canon, the world’s largest camera maker, dropped 3.1 percent to 3,705 yen. Sony Corp., an electronics maker that receives 23 percent of sales from the U.S., declined 2.8 percent to 3,100 yen. Nissan Motor Co., a carmaker that gets 35 percent of revenue in North America, slid 2.7 percent to 725 yen. Honda Motor Co., which gets about 44 percent of sales in North America, lost 1.9 percent. Hyundai Motor fell 3 percent to 113,500 won.
BHP Billiton Ltd., the world’s largest mining company, fell 1.8 percent in Sydney on speculation a slowdown will dent demand for metals. Canon Inc., a camera maker that gets 79 percent of sales outside Japan, sank 3.4 percent, leading Japanese exporters lower after the dollar weakened against the yen. Hyundai Motor Co., South Korea’s biggest carmaker, declined 3 percent after AutoWeek magazine said the company halted U.S. sales of some cars due to a door-lock problem.
“The U.S. consumer confidence report has again created nervousness about the fragility of the recovery and its sustainability,” said Nader Naeimi, an investment strategist in Sydney at AMP Capital Investors, which oversees about $90 billion globally. “Nevertheless, the fundamentals remain strong and we are still seeing good earnings coming through.”
The MSCI Asia Pacific Index fell 1.3 percent to 117.48 as of 10:28 a.m. in Tokyo, snapping a 3.2 percent gain in the past two days. Eight times as many stocks declined as rose. The gauge has lost 7.3 percent from a 17-month high on Jan. 15 on concern governments will start withdrawing stimulus measures, and that Greece, Spain and Portugal will struggle to curb deficits.
Japan’s Nikkei 225 Stock Average dropped 2 percent to 10,146.17. Australia’s S&P/ASX 200 Index declined 1 percent in Sydney. South Korea’s Kospi Index slipped 1.1 percent.
Confidence, Commodities Decline
Futures on the Standard & Poor’s 500 Index fell 0.1 percent. The measure retreated 1.2 percent in New York yesterday after the Conference Board’s confidence index for February decreased to the lowest level since April 2009, a report from the New York-based private research group showed.
In addition, the Ifo institute in Munich said its survey of German business confidence unexpectedly fell for the first time in 11 months in February as the coldest winter in 14 years damped retail sales and construction.
Material producers sank the most among the MSCI Asia Pacific Index’s 10 industry groups. BHP fell 2.2 percent to A$41.17 and was the biggest drag on the gauge. Rio Tinto Group, the world’s No. 3 mining company, lost 2.3 percent to A$70.59. Mitsubishi Corp., a trading company that gets about 40 percent of sales from commodities, declined 2 percent to 2,218 yen in Tokyo.
Crude oil for April delivery lost 1.8 percent in New York yesterday, the steepest decline in two weeks. The London Metal Exchange Index of six metals including copper and zinc dropped for a second day yesterday, slipping 2.3 percent.
Dollar Weakens
Japanese exporters declined as the dollar weakened to as low as 89.92 yen in Tokyo from 91.08 at the 3 p.m. close of stock trading yesterday. Japanese companies consider an average level of 92.90 as the dividing line between losses and profits, the Cabinet Office said on Feb. 19.
Canon, the world’s largest camera maker, dropped 3.1 percent to 3,705 yen. Sony Corp., an electronics maker that receives 23 percent of sales from the U.S., declined 2.8 percent to 3,100 yen. Nissan Motor Co., a carmaker that gets 35 percent of revenue in North America, slid 2.7 percent to 725 yen. Honda Motor Co., which gets about 44 percent of sales in North America, lost 1.9 percent. Hyundai Motor fell 3 percent to 113,500 won.
Japan’s Export Growth Accelerates on Global Rebound
Feb. 24 (Bloomberg) -- Japan’s exports climbed at the fastest pace in almost 30 years in January, supporting the nation’s economic recovery as falling wages damp demand at home.
Shipments abroad advanced 40.9 percent from a year earlier, the biggest increase since February 1980, the Finance Ministry said today in Tokyo. The median estimate of 22 economists surveyed by Bloomberg was for exports to rise 39.5 percent.
The growth was led by the biggest advance in exports to China since 1985, while shipments to the U.S. increased for the first time in more than two years, spurring sales at manufacturers from Mazda Motor Corp. to Bridgestone Corp. More than $2 trillion in worldwide government spending has helped sustain Japan’s expansion, stimulus the economy needs to keep growing as its consumers pare spending.
“Exports will continue to be a driving force for the economy,” said Tatsushi Shikano, senior economist at Mitsubishi UFJ Securities Co. in Tokyo. “Still, given that the export recovery is driven by stimulus measures, this won’t be enough to benefit households and help Japan return to a path of self- sustained growth.”
The yen traded at 90.20 against the dollar at 9:58 a.m. in Tokyo, compared with 90.24 before the report was released. Exports rose a seasonally adjusted 8.6 percent from December.
Japan posted a trade surplus of 85.2 billion yen in January, better than the median prediction for a 136 billion-yen deficit. Imports rose 8.6 percent, the first increase since October 2008, today’s report showed.
Favorable Comparison
The improvement in exports was partly due to a favorable year-on-year comparison. In January 2009, shipments abroad tumbled 45.7 percent as global trade froze in the aftermath of the collapse of Lehman Brothers Holdings Inc. in the previous September.
A government report last week showed that Japan’s economy expanded at an annual 4.6 percent rate last quarter. The export- led recovery was driven by Asia, especially China, where gross domestic product accelerated to the fastest pace since 2007 last quarter. The nation is Japan’s largest overseas customer.
Mazda Motor plans to increase production capacity in China to meet growing demand in the world’s biggest car market. The automaker aims to boost China sales 22 percent this year.
Bridgestone, the world’s largest tiremaker by sales, forecast a more than 40-fold increase in 2010 profit on rebounding auto sales in Japan, the U.S. and Europe.
Exports to Asia advanced 68.1 percent in January from a year earlier and shipments to China climbed 79.9 percent.
U.S. demand is also improving after a report last month showed the nation’s economy expanded the most in six years last quarter. Shipments to the U.S. rose 24.2 percent. Exports to Europe rose 11.1 percent.
Benefitting Consumers
The resurgence in demand hasn’t been benefiting consumers at home, who have been grappling with falling wages. BNP Paribas forecasts Japan’s economy will grow an annualized 1.2 percent in the three months ending March, less than half last quarter’s pace.
Demand for services slipped at the fastest pace in nine months in December and retail sales have slid for 13 months. The impetus from government stimulus measures are also fading.
“The foundations for economic recovery are by no means rock solid, with frail domestic demand and a pronounced skew toward restocking and exports to Asia,” said Tetsufumi Yamakawa, chief Japan economist at Goldman Sachs Group Inc. “In particular, January-March is in economic policy limbo and we expect near-zero growth.”
Japan’s construction machinery shipments will likely rise for the first time in three years in fiscal 2010, supported by continued demand in China and other Asian nations, according to the Japan Construction Equipment Manufacturers Association.
Toyota Motor Corp., the country’s biggest automaker, has recalled 8 million vehicles because of accelerator and brake problems.
The government lowered its evaluation of both exports and imports yesterday, saying they are increasing “moderately.” Shipments to Asia are slowing and there’s a need to monitor the effects of recent auto recalls, said Keisuke Tsumura, a parliamentary secretary at the Cabinet Office.
Shipments abroad advanced 40.9 percent from a year earlier, the biggest increase since February 1980, the Finance Ministry said today in Tokyo. The median estimate of 22 economists surveyed by Bloomberg was for exports to rise 39.5 percent.
The growth was led by the biggest advance in exports to China since 1985, while shipments to the U.S. increased for the first time in more than two years, spurring sales at manufacturers from Mazda Motor Corp. to Bridgestone Corp. More than $2 trillion in worldwide government spending has helped sustain Japan’s expansion, stimulus the economy needs to keep growing as its consumers pare spending.
“Exports will continue to be a driving force for the economy,” said Tatsushi Shikano, senior economist at Mitsubishi UFJ Securities Co. in Tokyo. “Still, given that the export recovery is driven by stimulus measures, this won’t be enough to benefit households and help Japan return to a path of self- sustained growth.”
The yen traded at 90.20 against the dollar at 9:58 a.m. in Tokyo, compared with 90.24 before the report was released. Exports rose a seasonally adjusted 8.6 percent from December.
Japan posted a trade surplus of 85.2 billion yen in January, better than the median prediction for a 136 billion-yen deficit. Imports rose 8.6 percent, the first increase since October 2008, today’s report showed.
Favorable Comparison
The improvement in exports was partly due to a favorable year-on-year comparison. In January 2009, shipments abroad tumbled 45.7 percent as global trade froze in the aftermath of the collapse of Lehman Brothers Holdings Inc. in the previous September.
A government report last week showed that Japan’s economy expanded at an annual 4.6 percent rate last quarter. The export- led recovery was driven by Asia, especially China, where gross domestic product accelerated to the fastest pace since 2007 last quarter. The nation is Japan’s largest overseas customer.
Mazda Motor plans to increase production capacity in China to meet growing demand in the world’s biggest car market. The automaker aims to boost China sales 22 percent this year.
Bridgestone, the world’s largest tiremaker by sales, forecast a more than 40-fold increase in 2010 profit on rebounding auto sales in Japan, the U.S. and Europe.
Exports to Asia advanced 68.1 percent in January from a year earlier and shipments to China climbed 79.9 percent.
U.S. demand is also improving after a report last month showed the nation’s economy expanded the most in six years last quarter. Shipments to the U.S. rose 24.2 percent. Exports to Europe rose 11.1 percent.
Benefitting Consumers
The resurgence in demand hasn’t been benefiting consumers at home, who have been grappling with falling wages. BNP Paribas forecasts Japan’s economy will grow an annualized 1.2 percent in the three months ending March, less than half last quarter’s pace.
Demand for services slipped at the fastest pace in nine months in December and retail sales have slid for 13 months. The impetus from government stimulus measures are also fading.
“The foundations for economic recovery are by no means rock solid, with frail domestic demand and a pronounced skew toward restocking and exports to Asia,” said Tetsufumi Yamakawa, chief Japan economist at Goldman Sachs Group Inc. “In particular, January-March is in economic policy limbo and we expect near-zero growth.”
Japan’s construction machinery shipments will likely rise for the first time in three years in fiscal 2010, supported by continued demand in China and other Asian nations, according to the Japan Construction Equipment Manufacturers Association.
Toyota Motor Corp., the country’s biggest automaker, has recalled 8 million vehicles because of accelerator and brake problems.
The government lowered its evaluation of both exports and imports yesterday, saying they are increasing “moderately.” Shipments to Asia are slowing and there’s a need to monitor the effects of recent auto recalls, said Keisuke Tsumura, a parliamentary secretary at the Cabinet Office.
Monday, February 22, 2010
Australian Economy to Boom Later This Decade, BIS Shrapnel Says
Feb. 23 (Bloomberg) -- Australia’s economy will accelerate over the next two years before building “into a boom” amid a surge in business investment, BIS Shrapnel Ltd. said.
Gross domestic product will rise 2.7 percent in the 12 months through June 2010, 3 percent in fiscal 2011 and 3.8 percent the following two years, the Sydney-based forecaster said today.
A surge in house construction and government investment in infrastructure such as schools and roads will help stoke economic growth, BIS Shrapnel predicts. Inflationary pressures, leading to higher interest rates, will increase in three to four years as a mining expansion intensifies.
“We are now well and truly into recovery from what turned out to be a modest downturn,” said BIS Shrapnel economist Richard Robinson. “Investment, and primarily the construction side of it, is the primary driver of growth in the economy.”
“Growth will pick up speed over the next two years and build into a boom later this decade,” the BIS Shrapnel report said.
Gross domestic product will rise 2.7 percent in the 12 months through June 2010, 3 percent in fiscal 2011 and 3.8 percent the following two years, the Sydney-based forecaster said today.
A surge in house construction and government investment in infrastructure such as schools and roads will help stoke economic growth, BIS Shrapnel predicts. Inflationary pressures, leading to higher interest rates, will increase in three to four years as a mining expansion intensifies.
“We are now well and truly into recovery from what turned out to be a modest downturn,” said BIS Shrapnel economist Richard Robinson. “Investment, and primarily the construction side of it, is the primary driver of growth in the economy.”
“Growth will pick up speed over the next two years and build into a boom later this decade,” the BIS Shrapnel report said.
Malaysia May Have Emerged From Recession Amid Global Recovery
Feb. 23 (Bloomberg) -- Malaysia’s economy probably emerged from its first recession in a decade last quarter, giving room for the central bank to raise interest rates from a record low as early as next month.
Gross domestic product increased 3.4 percent in the fourth quarter from a year earlier, after contracting 1.2 percent in the previous three months, according to the median estimate of 14 economists surveyed by Bloomberg News. The figures are due to be released at 6 p.m. in Kuala Lumpur tomorrow.
Central banks around the world are starting to raise interest rates or tighten monetary policy as the global recovery takes hold. Malaysia’s government has said the economy may expand more than the current 2 percent-to-3 percent forecast this year and the central bank has warned that borrowing costs cannot be kept “too low” for too long as growth strengthens.
“We expect Malaysia’s economy to register a positive recovery in the fourth quarter on resilient domestic demand and fiscal stimulus measures while the pace of external demand contraction eases further,” said Alvin Liew, an economist at Standard Chartered Bank in Singapore. “Based on the improved outlook, we believe the central bank can start to focus on normalizing monetary policy from its next meeting.”
Malaysia’s neighbors are among Asian economies that are recovering from the global slowdown. Singapore last week raised its economic growth forecast for 2010, predicting an expansion of as much as 6.5 percent this year. Thailand yesterday said its economy grew a faster-than-expected 5.8 percent last quarter as it emerged from a yearlong recession.
Rising Demand
Malaysia’s industrial production climbed the most in 22 months in December amid an increase in orders for manufactured goods. The government predicts overseas sales will increase 3.5 percent this year after slumping in 2009.
“Positive developments in manufacturing production, financing activity, external trade and labor market conditions reaffirm the assessment that the economic recovery is gaining strength,” the central bank said Jan. 26. “The economy is expected to expand further in 2010, with growth being supported by strengthening domestic demand, particularly private consumption, and further improvements in external demand.”
Bank Negara Malaysia has kept the overnight policy rate at 2 percent for seven straight meetings, the lowest since it was introduced in April 2004. Governor Zeti Akhtar Aziz said Jan. 29 that Malaysia needs to “normalize” rates from their current “unprecedented levels.” Policy makers next meet on March 4.
Stimulus Measures
Malaysia’s $195 billion economy probably shrank 3 percent last year, International Trade and Industry Minister Mustapa Mohamed said Feb. 4. The government is confident of 5 percent GDP growth in 2010, Second Finance Minister Ahmad Husni Hanadzlah said last month.
Consumer prices probably rose 1.5 percent in January from a year earlier, after a 1.1 percent gain the month before, according to the median estimate of seven economists in a Bloomberg survey. The statistics department will release the figures at 5 p.m. tomorrow.
Malaysia unveiled two stimulus plans worth a combined 67 billion ringgit ($20 billion) in 2008 and 2009 to revive growth as the worst global slump since the Great Depression hurt exports of Malaysian Pacific Industries Bhd.’s semiconductors and other goods.
The country still faces competition for investment from the rest of the region even after liberalizing some services industries, including banking and insurance, Trade Minister Mustapa said in August. Approved factory investment declined in 2009 as companies delayed projects and foreign investment more than halved last year.
New Model
The government is working on a new economic model to bolster investments and sustain long-term growth and will unveil its plans next month. In neighboring Singapore, a government- appointed panel this month outlined seven proposals to restructure the economy including doubling productivity and relying less on foreign labor.
“It is the consistent policy in the medium to long term that makes a country competitive, like Singapore, Hong Kong or China,” Francis Yeoh, managing director of Malaysia’s biggest builder YTL Corp., said Feb. 8 in Kuala Lumpur. “I’m not going to advocate short-term stimuli, more subsidies. That is the wrong thing to do.”
Gross domestic product increased 3.4 percent in the fourth quarter from a year earlier, after contracting 1.2 percent in the previous three months, according to the median estimate of 14 economists surveyed by Bloomberg News. The figures are due to be released at 6 p.m. in Kuala Lumpur tomorrow.
Central banks around the world are starting to raise interest rates or tighten monetary policy as the global recovery takes hold. Malaysia’s government has said the economy may expand more than the current 2 percent-to-3 percent forecast this year and the central bank has warned that borrowing costs cannot be kept “too low” for too long as growth strengthens.
“We expect Malaysia’s economy to register a positive recovery in the fourth quarter on resilient domestic demand and fiscal stimulus measures while the pace of external demand contraction eases further,” said Alvin Liew, an economist at Standard Chartered Bank in Singapore. “Based on the improved outlook, we believe the central bank can start to focus on normalizing monetary policy from its next meeting.”
Malaysia’s neighbors are among Asian economies that are recovering from the global slowdown. Singapore last week raised its economic growth forecast for 2010, predicting an expansion of as much as 6.5 percent this year. Thailand yesterday said its economy grew a faster-than-expected 5.8 percent last quarter as it emerged from a yearlong recession.
Rising Demand
Malaysia’s industrial production climbed the most in 22 months in December amid an increase in orders for manufactured goods. The government predicts overseas sales will increase 3.5 percent this year after slumping in 2009.
“Positive developments in manufacturing production, financing activity, external trade and labor market conditions reaffirm the assessment that the economic recovery is gaining strength,” the central bank said Jan. 26. “The economy is expected to expand further in 2010, with growth being supported by strengthening domestic demand, particularly private consumption, and further improvements in external demand.”
Bank Negara Malaysia has kept the overnight policy rate at 2 percent for seven straight meetings, the lowest since it was introduced in April 2004. Governor Zeti Akhtar Aziz said Jan. 29 that Malaysia needs to “normalize” rates from their current “unprecedented levels.” Policy makers next meet on March 4.
Stimulus Measures
Malaysia’s $195 billion economy probably shrank 3 percent last year, International Trade and Industry Minister Mustapa Mohamed said Feb. 4. The government is confident of 5 percent GDP growth in 2010, Second Finance Minister Ahmad Husni Hanadzlah said last month.
Consumer prices probably rose 1.5 percent in January from a year earlier, after a 1.1 percent gain the month before, according to the median estimate of seven economists in a Bloomberg survey. The statistics department will release the figures at 5 p.m. tomorrow.
Malaysia unveiled two stimulus plans worth a combined 67 billion ringgit ($20 billion) in 2008 and 2009 to revive growth as the worst global slump since the Great Depression hurt exports of Malaysian Pacific Industries Bhd.’s semiconductors and other goods.
The country still faces competition for investment from the rest of the region even after liberalizing some services industries, including banking and insurance, Trade Minister Mustapa said in August. Approved factory investment declined in 2009 as companies delayed projects and foreign investment more than halved last year.
New Model
The government is working on a new economic model to bolster investments and sustain long-term growth and will unveil its plans next month. In neighboring Singapore, a government- appointed panel this month outlined seven proposals to restructure the economy including doubling productivity and relying less on foreign labor.
“It is the consistent policy in the medium to long term that makes a country competitive, like Singapore, Hong Kong or China,” Francis Yeoh, managing director of Malaysia’s biggest builder YTL Corp., said Feb. 8 in Kuala Lumpur. “I’m not going to advocate short-term stimuli, more subsidies. That is the wrong thing to do.”
Sunday, February 21, 2010
Asian Stocks Gain as Fed Rate Concern Eases, Commodities Rise
Feb. 22 (Bloomberg) -- Asian stocks rallied from the biggest decline in two weeks after a smaller-than-estimated increase in U.S. consumer prices eased concern the Federal Reserve will increase interest rates.
BHP Billiton Ltd., Australia’s top oil producer and the world’s largest mining company, gained 2.3 percent after metal and crude oil prices rose. Mitsubishi Corp., a trading company that gets about 40 percent of sales from commodities, advanced 2.9 percent in Tokyo. Camera maker Nikon Corp. climbed 3.6 percent in Tokyo after Credit Suisse Group AG upgraded the stock.
“The market will take back last week’s losses as concerns over the Fed rate increase ease,” said Kazuhiro Takahashi, a general manager at Daiwa Securities Capital Markets Co. in Tokyo.
The MSCI Asia Pacific Index gained 1.9 percent to 117.55 as of 9:46 a.m. in Tokyo. The gauge sank 2.1 percent on Feb. 19 after the Fed raised the cost of direct loans to banks. The index has lost about 7.3 percent from a 17-month high on Jan. 15 on speculation central banks will tighten monetary policy, and that Greece, Spain and Portugal will struggle to curb deficits.
Japan’s Nikkei 225 Stock Average advanced 2.8 percent to 10,401.12. South Korea’s Kospi Index gained 2.1 percent and Australia’s S&P/ASX 200 Index increased 1.6 percent. New Zealand’s NZX 50 Index rose 0.5 percent.
Futures on the Standard & Poor’s 500 Index gained 0.2 percent. The gauge rose 0.2 percent in New York on Feb. 19 after a government report showed an index of U.S. consumer prices rose 0.2 percent in January from the previous month, less than the 0.3 percent projected by economists.
New York Fed President William Dudley indicated on Feb. 19 that policy makers are more concerned about maintaining growth than fighting inflation, citing the consumer price data. The Fed raising the so-called discount rate from 0.5 percent to 0.75 percent on Feb. 18 triggered concern stimulus programs are winding down.
A gauge of raw material producers posted the biggest gain of the MSCI Asia Pacific Index’s 10 industry groups today.
Crude oil for March delivery climbed 1 percent to $79.81 a barrel on Feb. 19. The London Metal Exchange Index of six metals including copper and zinc gained 1.9 percent to its highest level since Jan. 20.
BHP Billiton Ltd., Australia’s top oil producer and the world’s largest mining company, gained 2.3 percent after metal and crude oil prices rose. Mitsubishi Corp., a trading company that gets about 40 percent of sales from commodities, advanced 2.9 percent in Tokyo. Camera maker Nikon Corp. climbed 3.6 percent in Tokyo after Credit Suisse Group AG upgraded the stock.
“The market will take back last week’s losses as concerns over the Fed rate increase ease,” said Kazuhiro Takahashi, a general manager at Daiwa Securities Capital Markets Co. in Tokyo.
The MSCI Asia Pacific Index gained 1.9 percent to 117.55 as of 9:46 a.m. in Tokyo. The gauge sank 2.1 percent on Feb. 19 after the Fed raised the cost of direct loans to banks. The index has lost about 7.3 percent from a 17-month high on Jan. 15 on speculation central banks will tighten monetary policy, and that Greece, Spain and Portugal will struggle to curb deficits.
Japan’s Nikkei 225 Stock Average advanced 2.8 percent to 10,401.12. South Korea’s Kospi Index gained 2.1 percent and Australia’s S&P/ASX 200 Index increased 1.6 percent. New Zealand’s NZX 50 Index rose 0.5 percent.
Futures on the Standard & Poor’s 500 Index gained 0.2 percent. The gauge rose 0.2 percent in New York on Feb. 19 after a government report showed an index of U.S. consumer prices rose 0.2 percent in January from the previous month, less than the 0.3 percent projected by economists.
New York Fed President William Dudley indicated on Feb. 19 that policy makers are more concerned about maintaining growth than fighting inflation, citing the consumer price data. The Fed raising the so-called discount rate from 0.5 percent to 0.75 percent on Feb. 18 triggered concern stimulus programs are winding down.
A gauge of raw material producers posted the biggest gain of the MSCI Asia Pacific Index’s 10 industry groups today.
Crude oil for March delivery climbed 1 percent to $79.81 a barrel on Feb. 19. The London Metal Exchange Index of six metals including copper and zinc gained 1.9 percent to its highest level since Jan. 20.
Reliance Said to Raise Lyondell Bid to $14.5 Billion
Feb. 22 (Bloomberg) -- Reliance Industries Ltd., owner of the world’s largest oil-refining complex, raised its offer for bankrupt LyondellBasell Industries AF to about $14.5 billion, according to two people with knowledge of the offer.
The revised bid allows Lyondell creditors to opt for cash or equity as part of the deal, said the people, who declined to be identified because the talks are private. Reliance, the Mumbai-based refiner and energy explorer controlled by billionaire Mukesh Ambani, offered an undisclosed amount on Nov. 21 to buy a controlling stake in the chemicals and fuels maker.
Buying LyondellBasell would create a company with more than $80 billion in revenue and give Reliance chemical plants and two crude oil refineries in the U.S. and Europe. The chemicals maker rejected a previously revised Reliance bid that valued the company at $13.5 billion, the Wall Street Journal reported Jan. 8.
Reliance had outstanding debt of 700 billion rupees ($15 billion) and cash and cash equivalents of 159.6 billion rupees as of Dec. 31, the company said. Reliance has raised about $2 billion selling shares since September, Chief Financial Officer Alok Agarwal said last month.
David Harpole, a Lyondell spokesman, declined to comment on the revised offer. Manoj Warrier, a spokesman for Reliance, didn’t immediately return a message before regular business hours in India. The Telegraph in India previously reported that Reliance was increasing its offer.
$22 Billion in Debt
Lyondell was formed in a 2007 deal financed with $22 billion in debt in which it was bought by Basell AF, a unit of Len Blavatnik’s Access Industries Holdings LLC. Creditors have said the buyout crippled one of the world’s largest polymers, petrochemicals, and fuel companies, causing it to seek bankruptcy.
Lyondell Chemical Co. filed a plan to reorganize in December while evaluating the offer from Reliance, pitting India’s biggest company against lenders. Lyondell has said it plans to reorganize by repaying its $8 billion bankruptcy loan in full and giving an equity stake in the new company to lenders, including sponsors of a $2.8 billion rights offering.
Access and Apollo Management LP have affiliates that were backers of the company’s rights offering. Ares Corporate Opportunities Fund III was a third sponsor of the rights offering, according to court documents.
The revised bid allows Lyondell creditors to opt for cash or equity as part of the deal, said the people, who declined to be identified because the talks are private. Reliance, the Mumbai-based refiner and energy explorer controlled by billionaire Mukesh Ambani, offered an undisclosed amount on Nov. 21 to buy a controlling stake in the chemicals and fuels maker.
Buying LyondellBasell would create a company with more than $80 billion in revenue and give Reliance chemical plants and two crude oil refineries in the U.S. and Europe. The chemicals maker rejected a previously revised Reliance bid that valued the company at $13.5 billion, the Wall Street Journal reported Jan. 8.
Reliance had outstanding debt of 700 billion rupees ($15 billion) and cash and cash equivalents of 159.6 billion rupees as of Dec. 31, the company said. Reliance has raised about $2 billion selling shares since September, Chief Financial Officer Alok Agarwal said last month.
David Harpole, a Lyondell spokesman, declined to comment on the revised offer. Manoj Warrier, a spokesman for Reliance, didn’t immediately return a message before regular business hours in India. The Telegraph in India previously reported that Reliance was increasing its offer.
$22 Billion in Debt
Lyondell was formed in a 2007 deal financed with $22 billion in debt in which it was bought by Basell AF, a unit of Len Blavatnik’s Access Industries Holdings LLC. Creditors have said the buyout crippled one of the world’s largest polymers, petrochemicals, and fuel companies, causing it to seek bankruptcy.
Lyondell Chemical Co. filed a plan to reorganize in December while evaluating the offer from Reliance, pitting India’s biggest company against lenders. Lyondell has said it plans to reorganize by repaying its $8 billion bankruptcy loan in full and giving an equity stake in the new company to lenders, including sponsors of a $2.8 billion rights offering.
Access and Apollo Management LP have affiliates that were backers of the company’s rights offering. Ares Corporate Opportunities Fund III was a third sponsor of the rights offering, according to court documents.
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