Dec. 18 (Bloomberg) -- Asian stocks fell after claims for unemployment benefits in the U.S. unexpectedly increased, FedEx Corp. forecast lower-than-estimated profit and international regulators said banks must hold more capital.
BHP Billiton Ltd., the world’s biggest mining company, dropped 1.8 percent in Sydney after metal prices declined. Mizuho Financial Group Inc., Japan’s No. 3 bank by market value, and Seoul-based Woori Finance Holdings Co. lost at least 2 percent. Telstra Corp., Australia’s largest telephone company, retreated 2.8 percent after cutting annual sales forecast.
“Concerns that the global economy is going to slow will increase as people recognize the fragility of U.S. employment,” said Juichi Wako, a senior strategist at Nomura Holdings Inc., Japan’s biggest brokerage. “Money is moving away from risk assets.”
More than three stocks retreated for each that rose on the MSCI Asia Pacific Index, which fell 0.2 percent to 118.15 as of 9:38 a.m. in Tokyo. The gauge has declined 1.3 percent in the past five days, set for a second week of slumps, on concern China will take steps to curb property speculation and that the U.S. Federal Reserve will raise interest rates.
Japan’s Nikkei 225 Stock Average slid 0.8 percent, and the S&P/ASX 200 Index fell 1.2 percent in Sydney. The Kospi Index dropped 0.4 percent in Seoul.
U.S. Stocks
Futures on the Standard & Poor’s 500 Index fell 0.3 percent. The benchmark index sank 1.2 percent in New York yesterday, the most in three weeks, after FedEx, the second-largest U.S. package-shipping company, said earnings for the three months ending in February will be in a range of 50 cents to 70 cents a share, compared with the 84 cents estimated by analysts.
Initial claims for joblessness benefits rose to 480,000 in the week ended Dec. 12, a report from the U.S. Labor Department showed, while economists had projected a decline to 465,000.
The MSCI Asia Pacific Index has rallied 32 percent this year, outpacing gains of 21 percent by the S&P 500 and 25 percent for Europe’s Dow Jones Stoxx 600 Index. Stocks in the benchmark are valued at 22 times estimated earnings, compared with 18 times for the S&P and 15 times for the Stoxx.
The London Metal Exchange Index of six metals including copper and zinc tumbled 2.2 percent yesterday, the most since Oct. 30. Gold futures for February delivery sank 2.5 percent.
Banks should increase the quality of the capital they hold by the end of 2012 to cope with losses, the Basel Committee on Banking Supervision said in a report yesterday. Banks’ core capital should exclude stock or instruments that may require lenders to make payments to third parties, as these could reduce reserves needed for meeting losses, the committee said.
Thursday, December 17, 2009
Wednesday, December 16, 2009
American Air May Sweeten Bid to Keep ‘Critical’ JAL
Dec. 17 (Bloomberg) -- AMR Corp.’s American Airlines may increase the $1.1 billion it’s offered to invest with private- equity firm TPG in Japan Airlines Corp. to persuade the Asian carrier to stay in the Oneworld alliance.
No new proposal has been made, American Chief Executive Officer Gerard Arpey told reporters in Tokyo yesterday after meeting with Japan Transport Minister Seiji Maehara. He didn’t say how much more Fort Worth, Texas-based American might bid.
A possible sweetening of the deal underscores Arpey’s aim of keeping Japan Air from defecting to the SkyTeam group of carriers led by Delta Air Lines Inc. Losing Japan Air would leave American without a partner in the world’s second-largest economy and bolster Delta’s leading position in Tokyo.
“American can’t afford to lose, and they will do whatever it takes to win,” said Jeff Straebler, an analyst at RBS Securities Inc. in Stamford, Connecticut, who doesn’t rate AMR or Delta shares. “This is critical for them.”
American, the world’s second-largest carrier, is vying with Delta to invest in Japan Air as the money-losing Asian carrier restructures. Both U.S. carriers want to seek government approval to coordinate trans-Pacific flights and fares with Japan Air, also known as JAL.
“There could be a bigger investment made by the Oneworld- TPG-American group, depending on the circumstances that have to be worked out with the government and JAL,” said Arpey, who met for the first time with Maehara to discuss the Japan Air offer. “The situation today is very fluid, and that’s a big part of the conversation that’s ongoing.”
Delta’s Offer
Delta, the world’s biggest airline, and its SkyTeam partners have offered to invest $500 million in Tokyo-based JAL as part of a $1 billion package, including debt financing. JAL also is seeking a financial bailout from Japan’s government.
Japan Air, not the government, will decide which U.S. partner it pursues, Maehara told Arpey, reiterating a statement made Dec. 9. Arpey and Chief Financial Officer Tom Horton also met with JAL executives and plan sessions with other government officials through today.
Owen Blicksilver, a spokesman for Fort Worth-based TPG, declined to comment.
JAL dropped 1 percent to 102 yen at 11 a.m. in Tokyo trading. AMR rose 27 cents, or 3.6 percent, to $7.86 yesterday in New York Stock Exchange composite trading, while Atlanta- based Delta climbed 70 cents, or 6.4 percent, to $11.65.
‘Open Skies’
Last week’s agreement between the U.S. and Japan on an “Open Skies” accord will allow U.S. carriers to seek antitrust exemptions for closer ties with Japanese partners on flights and pricing, reducing costs and boosting revenue. UAL Corp.’s United Airlines, Continental Airlines Inc. and All Nippon Airways Co. have said they plan to apply for immunity.
Oneworld, SkyTeam and the Star Alliance that includes United and Continental each have about one-third of U.S.-Japan traffic. A JAL switch would give SkyTeam carriers 62 percent of that business, while Oneworld’s share would tumble to 6 percent, according to American.
A Delta-JAL alliance “would make a mockery of Open Skies,” Arpey said. “It would turn Open Skies and immunity into a farce. I don’t believe that’s the objective.”
Delta has predicted it would be able to win antitrust approval with JAL and said it could deliver about 3.2 million passengers a year to the Tokyo-based airline.
Delta’s Response
“A partnership with SkyTeam provides the best long-term option for Japan Airlines to thrive, with revenue opportunities that greatly exceed those of its current alliance,” said Trebor Banstetter, a Delta spokesman.
Should JAL choose Delta, the damage to American would extend to the Oneworld alliance it leads alongside British Airways Plc. Oneworld is the smallest of the three global alliances based on traffic, and the loss of JAL’s Asian network would create a gap in the group’s route system and endanger travel contracts with business customers.
“It would be catastrophic,” said Robert Mann, owner of consultant R.W. Mann & Co. in Port Washington, New York. “It would eliminate Oneworld from real contention in terms of a global travel network and corporate travel contracts.”
Neither American nor Delta has said how much revenue it has at stake in a JAL move to stay in Oneworld or shift to SkyTeam.
SkyTeam is the only alliance without a Japanese partner. Delta acquired a Japanese route system and hub at Tokyo’s Narita airport when it bought Northwest Airlines Corp. in October 2008, and a desire to protect those assets helped trigger interest in teaming with JAL.
“They can taste this,” Mann said of Delta’s pursuit of JAL. “If they were to pull this off, they would absolutely secure the No. 1 spot and eradicate a three-alliance problem. There can only be two winners because there are only two Japanese carriers of note.”
No new proposal has been made, American Chief Executive Officer Gerard Arpey told reporters in Tokyo yesterday after meeting with Japan Transport Minister Seiji Maehara. He didn’t say how much more Fort Worth, Texas-based American might bid.
A possible sweetening of the deal underscores Arpey’s aim of keeping Japan Air from defecting to the SkyTeam group of carriers led by Delta Air Lines Inc. Losing Japan Air would leave American without a partner in the world’s second-largest economy and bolster Delta’s leading position in Tokyo.
“American can’t afford to lose, and they will do whatever it takes to win,” said Jeff Straebler, an analyst at RBS Securities Inc. in Stamford, Connecticut, who doesn’t rate AMR or Delta shares. “This is critical for them.”
American, the world’s second-largest carrier, is vying with Delta to invest in Japan Air as the money-losing Asian carrier restructures. Both U.S. carriers want to seek government approval to coordinate trans-Pacific flights and fares with Japan Air, also known as JAL.
“There could be a bigger investment made by the Oneworld- TPG-American group, depending on the circumstances that have to be worked out with the government and JAL,” said Arpey, who met for the first time with Maehara to discuss the Japan Air offer. “The situation today is very fluid, and that’s a big part of the conversation that’s ongoing.”
Delta’s Offer
Delta, the world’s biggest airline, and its SkyTeam partners have offered to invest $500 million in Tokyo-based JAL as part of a $1 billion package, including debt financing. JAL also is seeking a financial bailout from Japan’s government.
Japan Air, not the government, will decide which U.S. partner it pursues, Maehara told Arpey, reiterating a statement made Dec. 9. Arpey and Chief Financial Officer Tom Horton also met with JAL executives and plan sessions with other government officials through today.
Owen Blicksilver, a spokesman for Fort Worth-based TPG, declined to comment.
JAL dropped 1 percent to 102 yen at 11 a.m. in Tokyo trading. AMR rose 27 cents, or 3.6 percent, to $7.86 yesterday in New York Stock Exchange composite trading, while Atlanta- based Delta climbed 70 cents, or 6.4 percent, to $11.65.
‘Open Skies’
Last week’s agreement between the U.S. and Japan on an “Open Skies” accord will allow U.S. carriers to seek antitrust exemptions for closer ties with Japanese partners on flights and pricing, reducing costs and boosting revenue. UAL Corp.’s United Airlines, Continental Airlines Inc. and All Nippon Airways Co. have said they plan to apply for immunity.
Oneworld, SkyTeam and the Star Alliance that includes United and Continental each have about one-third of U.S.-Japan traffic. A JAL switch would give SkyTeam carriers 62 percent of that business, while Oneworld’s share would tumble to 6 percent, according to American.
A Delta-JAL alliance “would make a mockery of Open Skies,” Arpey said. “It would turn Open Skies and immunity into a farce. I don’t believe that’s the objective.”
Delta has predicted it would be able to win antitrust approval with JAL and said it could deliver about 3.2 million passengers a year to the Tokyo-based airline.
Delta’s Response
“A partnership with SkyTeam provides the best long-term option for Japan Airlines to thrive, with revenue opportunities that greatly exceed those of its current alliance,” said Trebor Banstetter, a Delta spokesman.
Should JAL choose Delta, the damage to American would extend to the Oneworld alliance it leads alongside British Airways Plc. Oneworld is the smallest of the three global alliances based on traffic, and the loss of JAL’s Asian network would create a gap in the group’s route system and endanger travel contracts with business customers.
“It would be catastrophic,” said Robert Mann, owner of consultant R.W. Mann & Co. in Port Washington, New York. “It would eliminate Oneworld from real contention in terms of a global travel network and corporate travel contracts.”
Neither American nor Delta has said how much revenue it has at stake in a JAL move to stay in Oneworld or shift to SkyTeam.
SkyTeam is the only alliance without a Japanese partner. Delta acquired a Japanese route system and hub at Tokyo’s Narita airport when it bought Northwest Airlines Corp. in October 2008, and a desire to protect those assets helped trigger interest in teaming with JAL.
“They can taste this,” Mann said of Delta’s pursuit of JAL. “If they were to pull this off, they would absolutely secure the No. 1 spot and eradicate a three-alliance problem. There can only be two winners because there are only two Japanese carriers of note.”
Bombay Exchange Extends Trading Twice to Regain Market Share
Dec. 17 (Bloomberg) -- Bombay Stock Exchange, Asia’s oldest bourse, extended its trading hours for the second time in as many days to regain its market share as India’s two largest exchanges compete to boost trading volumes.
The Bombay bourse will open at 9 a.m. from Dec. 18, matching the National Stock Exchange’s new timing announced yesterday. The BSE, which began trading futures contacts in 2000, announced on Dec. 15 it would add 10 minutes to its trading day to expand its derivatives business and compete with the National Stock Exchange, the world’s largest single stock futures market.
The 17-year-old National exchange, partly owned by the NYSE Group Inc. and Goldman Sachs Group Inc., has been winning market share from the older rival, which is backed by Deutsche Boerse AG and Singapore Exchange Ltd. Average share trading value on the exchange founded in 1875 declined 14 percent this year, while it increased 6 percent on the national bourse, according to Bloomberg data.
Without the new trading hours, “all the business will go to the NSE, which we couldn’t let happen,” Sayee Srinivasan, head of product strategy at the BSE, said in an interview to Bloomberg-UTV yesterday. Starting at “9 a.m. is a completely different story. We will just have to live with it.”
India’s market regulator on Oct. 23 allowed stock exchanges to extend trading from 9 a.m. to 5 p.m., adding 2 hours 25 minutes to the day. Bourses won’t extend until there’s a consensus on timing and most market participants oppose the change, Ravi Narain, chief executive officer at the National Stock Exchange of India Ltd. said last month.
‘A Bit Early’
The National exchange, which licensed its benchmark S&P CNX Nifty Index to Singapore’s bourse, proposed the extension to narrow the gap between share trading in India and overseas. The plan isn’t linked to the Singapore Exchange’s license, the bourse said in March.
“It is a bit early for the market participants,” said Alex Mathews, head of research at Geojit BNP Paribas Financial Services Ltd. in Kochi. “But it will benefit small traders who did not have access to trading of the Nifty futures on the Singapore exchange.”
The two exchanges trade for five hours, 35 minutes a day. That compares with four hours on the Shanghai. Developed markets already trade longer hours. The Deutsche Boerse is open for 8 1/2 hours while the New York Stock Exchange trades for 6 1/2 hours.
Abandoned Plans
“The surprise is that the stock exchanges gave investors so little time to adjust to the new timing,” Vikas Pershad, chief executive officer at hedge fund Veda Investments LLC, said over telephone from Chicago. Still “the move is likely to benefit investors in the long term. Over time, we may see a migration toward continuous trading.”
The Bombay exchange’s investor Deutsche Boerse, operator of the Frankfurt Stock Exchange, and Turquoise, an equity dealing system, abandoned plans for an earlier start last year after pressure from customers to leave trading hours unchanged.
The extension may mean “we will have to work in two shifts,” said Kishor Ostwal, managing director of CNI Research (India) Ltd., a publicly traded equities research provider in Mumbai.
The Bombay exchange began working on becoming more competitive after the younger rival started trading shares in 1994. Within a year after the National Stock Exchange initiated on-line trading, the Mumbai stock exchange moved from the open outcry system to computers. The exchange also became the first to trade in index futures contracts on June 9, 2000.
The Bombay bourse will open at 9 a.m. from Dec. 18, matching the National Stock Exchange’s new timing announced yesterday. The BSE, which began trading futures contacts in 2000, announced on Dec. 15 it would add 10 minutes to its trading day to expand its derivatives business and compete with the National Stock Exchange, the world’s largest single stock futures market.
The 17-year-old National exchange, partly owned by the NYSE Group Inc. and Goldman Sachs Group Inc., has been winning market share from the older rival, which is backed by Deutsche Boerse AG and Singapore Exchange Ltd. Average share trading value on the exchange founded in 1875 declined 14 percent this year, while it increased 6 percent on the national bourse, according to Bloomberg data.
Without the new trading hours, “all the business will go to the NSE, which we couldn’t let happen,” Sayee Srinivasan, head of product strategy at the BSE, said in an interview to Bloomberg-UTV yesterday. Starting at “9 a.m. is a completely different story. We will just have to live with it.”
India’s market regulator on Oct. 23 allowed stock exchanges to extend trading from 9 a.m. to 5 p.m., adding 2 hours 25 minutes to the day. Bourses won’t extend until there’s a consensus on timing and most market participants oppose the change, Ravi Narain, chief executive officer at the National Stock Exchange of India Ltd. said last month.
‘A Bit Early’
The National exchange, which licensed its benchmark S&P CNX Nifty Index to Singapore’s bourse, proposed the extension to narrow the gap between share trading in India and overseas. The plan isn’t linked to the Singapore Exchange’s license, the bourse said in March.
“It is a bit early for the market participants,” said Alex Mathews, head of research at Geojit BNP Paribas Financial Services Ltd. in Kochi. “But it will benefit small traders who did not have access to trading of the Nifty futures on the Singapore exchange.”
The two exchanges trade for five hours, 35 minutes a day. That compares with four hours on the Shanghai. Developed markets already trade longer hours. The Deutsche Boerse is open for 8 1/2 hours while the New York Stock Exchange trades for 6 1/2 hours.
Abandoned Plans
“The surprise is that the stock exchanges gave investors so little time to adjust to the new timing,” Vikas Pershad, chief executive officer at hedge fund Veda Investments LLC, said over telephone from Chicago. Still “the move is likely to benefit investors in the long term. Over time, we may see a migration toward continuous trading.”
The Bombay exchange’s investor Deutsche Boerse, operator of the Frankfurt Stock Exchange, and Turquoise, an equity dealing system, abandoned plans for an earlier start last year after pressure from customers to leave trading hours unchanged.
The extension may mean “we will have to work in two shifts,” said Kishor Ostwal, managing director of CNI Research (India) Ltd., a publicly traded equities research provider in Mumbai.
The Bombay exchange began working on becoming more competitive after the younger rival started trading shares in 1994. Within a year after the National Stock Exchange initiated on-line trading, the Mumbai stock exchange moved from the open outcry system to computers. The exchange also became the first to trade in index futures contracts on June 9, 2000.
Tuesday, December 15, 2009
N.Z. Should Improve Access to Capital, Taskforce Says
Dec. 16 (Bloomberg) -- New Zealand should increase companies’ access to funding to help them reach the scale needed to compete internationally, according to a government taskforce charged with reviewing the nation’s capital markets.
“Access to domestic capital is important,” the Capital Market Development Taskforce said in a report released in Wellington today. “The evidence is, local markets matter for economic growth.”
The taskforce, chaired by Rob Cameron, was formed last year to develop a blueprint on how to improve the nation’s capital markets in order to encourage firms to raise more funds locally. The group recommended creation of a single regulator, and suggested the nation needs a Minister for Capital Markets to be responsible for policy development.
“The government will consider the report as a matter of priority,” Commerce Minister Simon Power said today. “There are plenty of things to look at.”
Prime Minister John Key will lead the response and the government expects to report back in February, Power told reporters in Wellington. Aspects of the recommendations will be included in a review of the Securities Act, which will be published early next year, he said.
“The notion of regulation occurring in one place as opposed to several different regulators operating in this space is a notion I am very interested in,” Power said.
Single Agency
The taskforce recommends a single regulator to replace a “plethora” of agencies which includes the Companies Office, the stock exchange and the Ministry of Economic Developments, Cameron said in a presentation today.
A problem for the economy is that many companies get to a stage where they have to grow either by acquisition or overseas expansion and find they are unable to access risk capital, Cameron said.
The so-called private capital markets aren’t working, and there should be scope for an agency such as NZX Ltd., which runs the stock exchange, to get involved, he said.
The report makes 60 recommendations designed to create a “healthy environment for investors” and to get markets “to act as an engine for growth,” he said.
Only about a third of New Zealand’s 200 companies are publicly traded compared with two thirds in Australia, Cameron said. Agriculture companies, financial institutions and utilities are underrepresented.
Agricultural Cooperatives
Accordingly, the government should consider ways in which state-owned companies may offer shares to the public, he said. The stock exchange should make itself more attractive to agricultural cooperatives such as Fonterra Cooperative Group Ltd., the world’s biggest dairy exporter.
New Zealand could become an “agricultural capital markets hub,” using its knowledge in industries such as dairy and meat, to be a base for global trading of commodities and related derivatives, Cameron said.
Members of the taskforce include Mark Weldon, NZX chief executive officer, and Jonathan Ling, chief executive officer at Fletcher Building Ltd., the nation’s largest building products company.
“Access to domestic capital is important,” the Capital Market Development Taskforce said in a report released in Wellington today. “The evidence is, local markets matter for economic growth.”
The taskforce, chaired by Rob Cameron, was formed last year to develop a blueprint on how to improve the nation’s capital markets in order to encourage firms to raise more funds locally. The group recommended creation of a single regulator, and suggested the nation needs a Minister for Capital Markets to be responsible for policy development.
“The government will consider the report as a matter of priority,” Commerce Minister Simon Power said today. “There are plenty of things to look at.”
Prime Minister John Key will lead the response and the government expects to report back in February, Power told reporters in Wellington. Aspects of the recommendations will be included in a review of the Securities Act, which will be published early next year, he said.
“The notion of regulation occurring in one place as opposed to several different regulators operating in this space is a notion I am very interested in,” Power said.
Single Agency
The taskforce recommends a single regulator to replace a “plethora” of agencies which includes the Companies Office, the stock exchange and the Ministry of Economic Developments, Cameron said in a presentation today.
A problem for the economy is that many companies get to a stage where they have to grow either by acquisition or overseas expansion and find they are unable to access risk capital, Cameron said.
The so-called private capital markets aren’t working, and there should be scope for an agency such as NZX Ltd., which runs the stock exchange, to get involved, he said.
The report makes 60 recommendations designed to create a “healthy environment for investors” and to get markets “to act as an engine for growth,” he said.
Only about a third of New Zealand’s 200 companies are publicly traded compared with two thirds in Australia, Cameron said. Agriculture companies, financial institutions and utilities are underrepresented.
Agricultural Cooperatives
Accordingly, the government should consider ways in which state-owned companies may offer shares to the public, he said. The stock exchange should make itself more attractive to agricultural cooperatives such as Fonterra Cooperative Group Ltd., the world’s biggest dairy exporter.
New Zealand could become an “agricultural capital markets hub,” using its knowledge in industries such as dairy and meat, to be a base for global trading of commodities and related derivatives, Cameron said.
Members of the taskforce include Mark Weldon, NZX chief executive officer, and Jonathan Ling, chief executive officer at Fletcher Building Ltd., the nation’s largest building products company.
Australian Economy Grew 0.2% on Government Spending
Dec. 16 (Bloomberg) -- Australia’s economy expanded in the three months through September for a third straight quarter, boosted by government spending on roads, ports and schools.
Gross domestic product gained 0.2 percent from the second quarter, when it rose 0.6 percent, the Bureau of Statistics said in Sydney today. The median estimate in a Bloomberg News survey of 17 economists was for a 0.4 percent rise.
Growth in Australia, one of the few economies to skirt the global recession, will accelerate in 2010 as demand rises for exports such as iron ore and Prime Minister Kevin Rudd spends A$22 billion ($20 billion) on infrastructure including schools, the central bank said yesterday. Faster growth adds to pressure on Governor Glenn Stevens to raise borrowing costs in February after this month becoming the only policy maker in the world to increase interest rates three times this year.
“The government’s huge schools program is starting to show up in the numbers,” Kieran Davies, chief economist at RBS Group Australia Ltd. in Sydney, said ahead of today’s report. The central bank “is on track to hike again at its February meeting.”
Consumer spending advanced 0.7 percent in the quarter, adding 0.4 percentage point to GDP, today’s report said. Exports decreased 2.3 percent. Government spending rose 0.7 percent.
The Australian currency fell for a second day, trading at 90.35 U.S. cents as of 11:32 a.m. in Sydney, from 90.67 cents before the release of the GDP report.
Global Rebound
The economy grew 0.5 percent from a year earlier, the report showed. Economists forecast a 0.7 percent expansion.
“The Australian economy has weathered the global financial crisis well,” Ted Evans, chairman of Westpac Banking Corp., said in a speech at the company’s annual general meeting in Melbourne today. “To a significant extent, that reflects the prompt stimulatory action by the Australian government.”
Today’s report adds to global evidence of an economic rebound. Europe’s economy emerged from its worst slump in more than six decades in the third quarter, expanding 0.4 percent from the previous three months, a report showed on Dec. 3. The U.S. economy grew at a 2.8 percent annual pace.
Australia’s economy is expanding faster and generating more jobs than the government and central bank forecast at the start of the year as China’s demand for raw materials including iron ore, coal and gas prompts mining and energy companies such as BHP Billiton Ltd., Woodside Petroleum Ltd. and Santos Ltd. to increase investment and hire workers.
Jobs Surge
The nation’s benchmark S&P/ASX 200 index has climbed 26 percent this year, outpacing the Standard & Poor’s 500 index, which has gained 23 percent.
Treasurer Wayne Swan last month forecast GDP will rise 1.5 percent in the 12 months through June 30, 2010, compared with a May prediction of a 0.5 percent contraction. The central bank says the economy will grow 2.25 percent this fiscal year and 3.25 percent in 2010-11.
Employers added 99,500 workers between the start of September and Nov. 30, the biggest three-month hiring surge in three years, a report showed last week. The jobless rate fell to 5.7 percent from 5.8 percent.
Chevron Corp. said this month it has signed a deal with Japan’s Tokyo Electric Power Co. to supply liquefied natural gas from its Wheatstone venture in Western Australia. The project, estimated to be worth $82 billion, is forecast to generate 6,500 jobs during construction.
It is in addition to the $39 billion Chevron-led Gorgon gas venture, also in Western Australia, which is forecast to create 10,000 jobs when construction starts early next year.
‘Cusp of Boom’
Favorable domestic conditions and overseas demand for Australian resources mean the country may be on the cusp of an economic boom, Gerry Harvey, chairman of Australia’s biggest electronics retailer Harvey Norman Holdings Ltd., said in an interview with Bloomberg television on Dec. 2.
“We’ve had very good sales figures in October and November and I can’t think of any reason why that won’t follow into December,” he said. “I think we’ll have a record Christmas.”
Stronger economic and jobs growth will increase Governor Stevens’s scope to raise borrowing costs next year. He boosted the overnight cash rate target by a quarter percentage point on Dec. 1 to 3.75 percent, adding to similar moves in October and November. By contrast, rates are close to zero in the U.S. and Japan.
“Members agreed that, if developments unfolded as currently expected, monetary policy would need to be adjusted further over time to lessen the degree of stimulus,” central bank officials said in minutes of their Dec. 1 meeting released yesterday.
The Australian dollar has gained 29 percent this year against the U.S. currency as investors seek higher-yielding assets in a so-called carry trade that Reserve Bank Assistant Governor Guy Debelle said last week is “back in vogue.”
Rate Outlook
Policy makers weighed “the high level of the exchange rate” when making their decision to raise interest rates this month, according to yesterday’s minutes.
Investors are betting there is a 58 percent chance of a quarter-point increase in the benchmark lending rate to 4 percent at the central bank’s next meeting on Feb. 2, according to Bloomberg calculations based on interbank futures on the Sydney Futures Exchange at 7:26 a.m.
The statistics bureau, which normally publishes third- quarter GDP figures in the first week of December, delayed publication of the report this year by two weeks as officials adopt new accounting standards.
The chain price index, a measure of retail prices, rose 0.4 percent from the second quarter and fell 3.1 percent from a year earlier, today’s report showed.
Gross domestic product gained 0.2 percent from the second quarter, when it rose 0.6 percent, the Bureau of Statistics said in Sydney today. The median estimate in a Bloomberg News survey of 17 economists was for a 0.4 percent rise.
Growth in Australia, one of the few economies to skirt the global recession, will accelerate in 2010 as demand rises for exports such as iron ore and Prime Minister Kevin Rudd spends A$22 billion ($20 billion) on infrastructure including schools, the central bank said yesterday. Faster growth adds to pressure on Governor Glenn Stevens to raise borrowing costs in February after this month becoming the only policy maker in the world to increase interest rates three times this year.
“The government’s huge schools program is starting to show up in the numbers,” Kieran Davies, chief economist at RBS Group Australia Ltd. in Sydney, said ahead of today’s report. The central bank “is on track to hike again at its February meeting.”
Consumer spending advanced 0.7 percent in the quarter, adding 0.4 percentage point to GDP, today’s report said. Exports decreased 2.3 percent. Government spending rose 0.7 percent.
The Australian currency fell for a second day, trading at 90.35 U.S. cents as of 11:32 a.m. in Sydney, from 90.67 cents before the release of the GDP report.
Global Rebound
The economy grew 0.5 percent from a year earlier, the report showed. Economists forecast a 0.7 percent expansion.
“The Australian economy has weathered the global financial crisis well,” Ted Evans, chairman of Westpac Banking Corp., said in a speech at the company’s annual general meeting in Melbourne today. “To a significant extent, that reflects the prompt stimulatory action by the Australian government.”
Today’s report adds to global evidence of an economic rebound. Europe’s economy emerged from its worst slump in more than six decades in the third quarter, expanding 0.4 percent from the previous three months, a report showed on Dec. 3. The U.S. economy grew at a 2.8 percent annual pace.
Australia’s economy is expanding faster and generating more jobs than the government and central bank forecast at the start of the year as China’s demand for raw materials including iron ore, coal and gas prompts mining and energy companies such as BHP Billiton Ltd., Woodside Petroleum Ltd. and Santos Ltd. to increase investment and hire workers.
Jobs Surge
The nation’s benchmark S&P/ASX 200 index has climbed 26 percent this year, outpacing the Standard & Poor’s 500 index, which has gained 23 percent.
Treasurer Wayne Swan last month forecast GDP will rise 1.5 percent in the 12 months through June 30, 2010, compared with a May prediction of a 0.5 percent contraction. The central bank says the economy will grow 2.25 percent this fiscal year and 3.25 percent in 2010-11.
Employers added 99,500 workers between the start of September and Nov. 30, the biggest three-month hiring surge in three years, a report showed last week. The jobless rate fell to 5.7 percent from 5.8 percent.
Chevron Corp. said this month it has signed a deal with Japan’s Tokyo Electric Power Co. to supply liquefied natural gas from its Wheatstone venture in Western Australia. The project, estimated to be worth $82 billion, is forecast to generate 6,500 jobs during construction.
It is in addition to the $39 billion Chevron-led Gorgon gas venture, also in Western Australia, which is forecast to create 10,000 jobs when construction starts early next year.
‘Cusp of Boom’
Favorable domestic conditions and overseas demand for Australian resources mean the country may be on the cusp of an economic boom, Gerry Harvey, chairman of Australia’s biggest electronics retailer Harvey Norman Holdings Ltd., said in an interview with Bloomberg television on Dec. 2.
“We’ve had very good sales figures in October and November and I can’t think of any reason why that won’t follow into December,” he said. “I think we’ll have a record Christmas.”
Stronger economic and jobs growth will increase Governor Stevens’s scope to raise borrowing costs next year. He boosted the overnight cash rate target by a quarter percentage point on Dec. 1 to 3.75 percent, adding to similar moves in October and November. By contrast, rates are close to zero in the U.S. and Japan.
“Members agreed that, if developments unfolded as currently expected, monetary policy would need to be adjusted further over time to lessen the degree of stimulus,” central bank officials said in minutes of their Dec. 1 meeting released yesterday.
The Australian dollar has gained 29 percent this year against the U.S. currency as investors seek higher-yielding assets in a so-called carry trade that Reserve Bank Assistant Governor Guy Debelle said last week is “back in vogue.”
Rate Outlook
Policy makers weighed “the high level of the exchange rate” when making their decision to raise interest rates this month, according to yesterday’s minutes.
Investors are betting there is a 58 percent chance of a quarter-point increase in the benchmark lending rate to 4 percent at the central bank’s next meeting on Feb. 2, according to Bloomberg calculations based on interbank futures on the Sydney Futures Exchange at 7:26 a.m.
The statistics bureau, which normally publishes third- quarter GDP figures in the first week of December, delayed publication of the report this year by two weeks as officials adopt new accounting standards.
The chain price index, a measure of retail prices, rose 0.4 percent from the second quarter and fell 3.1 percent from a year earlier, today’s report showed.
Monday, December 14, 2009
East Asia Growth May Accelerate Next Year, ADB Division Says
Dec. 15 (Bloomberg) -- China, South Korea and other emerging economies in East Asia may grow at the fastest pace in three years in 2010 as the global recovery spurs demand for the region’s goods, a division of the Asian Development Bank said.
China, South Korea, Taiwan, Hong Kong and 10 Southeast Asia economies may expand 6.8 percent in 2010 from 4.2 percent this year, according to a report released today by the ADB’s Office for Regional Economic Integration in Manila.
Asia is leading the world’s emergence from its deepest recession since the 1930s after governments boosted spending, cut taxes and slashed interest rates, averting a spiral into another Great Depression. Growth could falter as the effect of stimulus measures fade and governments exit expansionary policies, the ADB division said.
“With the global recovery tentative, monetary policy should remain accommodative where feasible, with a watchful eye on inflation and asset prices,” the division said. “The recovery could falter if policy makers tighten too early, but tightening too late may lead to higher inflation and unsustainable fiscal deficits in the coming years.”
Confidence in the world economy dipped last month as central banks’ actions to withdraw some emergency measures sparked concern about the strength of the recovery, a Bloomberg survey of users on six continents showed.
Policy makers in Asia have started raising borrowing costs to contain accelerating inflation. The Reserve Bank of Australia increased borrowing costs a total of 75 basis points at its last three meetings and Vietnam raised its benchmark rate by one percentage point to 8 percent in November.
Subdued Inflation
“Inflationary pressures appear to be well under control for the moment,” the ADB’s regional integration office said. “While recently showing slight increases, inflation is still expected to remain subdued as economies operate with excess capacity.”
Recovery in East Asia also hinges on the revival of growth in Europe and in the U.S., as this will affect the region’s export-dependent economies, the office said.
“The deleveraging cycle is still in its early years, and if households in developed countries, particularly the U.S., save more-than-expected to repair their balance sheets, then weaker consumer demand will delay recovery in these economies,” the ADB division said.
Emerging East Asia groups China, the Southeast Asian nations of Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Thailand and Vietnam, and the newly industrialized economies of Hong Kong, Singapore, South Korea and Taiwan.
Developing Asia, which includes economies such as India and Pakistan and excludes Japan, will probably expand 6.6 percent next year after growing 4.5 percent in 2009, the ADB said in a separate note today.
To contact the reporters on this story: Karl Lester M. Yap in Manila at kyap5@bloomberg.net.
Last Updated: December 14, 2009 21:30 EST
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* Yahoo! Buzz Dec. 15 (Bloomberg) -- China, South Korea and other emerging economies in East Asia may grow at the fastest pace in three years in 2010 as the global recovery spurs demand for the region’s goods, a division of the Asian Development Bank said.
China, South Korea, Taiwan, Hong Kong and 10 Southeast Asia economies may expand 6.8 percent in 2010 from 4.2 percent this year, according to a report released today by the ADB’s Office for Regional Economic Integration in Manila.
Asia is leading the world’s emergence from its deepest recession since the 1930s after governments boosted spending, cut taxes and slashed interest rates, averting a spiral into another Great Depression. Growth could falter as the effect of stimulus measures fade and governments exit expansionary policies, the ADB division said.
“With the global recovery tentative, monetary policy should remain accommodative where feasible, with a watchful eye on inflation and asset prices,” the division said. “The recovery could falter if policy makers tighten too early, but tightening too late may lead to higher inflation and unsustainable fiscal deficits in the coming years.”
Confidence in the world economy dipped last month as central banks’ actions to withdraw some emergency measures sparked concern about the strength of the recovery, a Bloomberg survey of users on six continents showed.
Policy makers in Asia have started raising borrowing costs to contain accelerating inflation. The Reserve Bank of Australia increased borrowing costs a total of 75 basis points at its last three meetings and Vietnam raised its benchmark rate by one percentage point to 8 percent in November.
Subdued Inflation
“Inflationary pressures appear to be well under control for the moment,” the ADB’s regional integration office said. “While recently showing slight increases, inflation is still expected to remain subdued as economies operate with excess capacity.”
Recovery in East Asia also hinges on the revival of growth in Europe and in the U.S., as this will affect the region’s export-dependent economies, the office said.
“The deleveraging cycle is still in its early years, and if households in developed countries, particularly the U.S., save more-than-expected to repair their balance sheets, then weaker consumer demand will delay recovery in these economies,” the ADB division said.
Emerging East Asia groups China, the Southeast Asian nations of Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Thailand and Vietnam, and the newly industrialized economies of Hong Kong, Singapore, South Korea and Taiwan.
Developing Asia, which includes economies such as India and Pakistan and excludes Japan, will probably expand 6.6 percent next year after growing 4.5 percent in 2009, the ADB said in a separate note today.
China, South Korea, Taiwan, Hong Kong and 10 Southeast Asia economies may expand 6.8 percent in 2010 from 4.2 percent this year, according to a report released today by the ADB’s Office for Regional Economic Integration in Manila.
Asia is leading the world’s emergence from its deepest recession since the 1930s after governments boosted spending, cut taxes and slashed interest rates, averting a spiral into another Great Depression. Growth could falter as the effect of stimulus measures fade and governments exit expansionary policies, the ADB division said.
“With the global recovery tentative, monetary policy should remain accommodative where feasible, with a watchful eye on inflation and asset prices,” the division said. “The recovery could falter if policy makers tighten too early, but tightening too late may lead to higher inflation and unsustainable fiscal deficits in the coming years.”
Confidence in the world economy dipped last month as central banks’ actions to withdraw some emergency measures sparked concern about the strength of the recovery, a Bloomberg survey of users on six continents showed.
Policy makers in Asia have started raising borrowing costs to contain accelerating inflation. The Reserve Bank of Australia increased borrowing costs a total of 75 basis points at its last three meetings and Vietnam raised its benchmark rate by one percentage point to 8 percent in November.
Subdued Inflation
“Inflationary pressures appear to be well under control for the moment,” the ADB’s regional integration office said. “While recently showing slight increases, inflation is still expected to remain subdued as economies operate with excess capacity.”
Recovery in East Asia also hinges on the revival of growth in Europe and in the U.S., as this will affect the region’s export-dependent economies, the office said.
“The deleveraging cycle is still in its early years, and if households in developed countries, particularly the U.S., save more-than-expected to repair their balance sheets, then weaker consumer demand will delay recovery in these economies,” the ADB division said.
Emerging East Asia groups China, the Southeast Asian nations of Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Thailand and Vietnam, and the newly industrialized economies of Hong Kong, Singapore, South Korea and Taiwan.
Developing Asia, which includes economies such as India and Pakistan and excludes Japan, will probably expand 6.6 percent next year after growing 4.5 percent in 2009, the ADB said in a separate note today.
To contact the reporters on this story: Karl Lester M. Yap in Manila at kyap5@bloomberg.net.
Last Updated: December 14, 2009 21:30 EST
* Business Exchange
* Delicious
* Digg
* Newsvine
* Propeller
* Yahoo! Buzz Dec. 15 (Bloomberg) -- China, South Korea and other emerging economies in East Asia may grow at the fastest pace in three years in 2010 as the global recovery spurs demand for the region’s goods, a division of the Asian Development Bank said.
China, South Korea, Taiwan, Hong Kong and 10 Southeast Asia economies may expand 6.8 percent in 2010 from 4.2 percent this year, according to a report released today by the ADB’s Office for Regional Economic Integration in Manila.
Asia is leading the world’s emergence from its deepest recession since the 1930s after governments boosted spending, cut taxes and slashed interest rates, averting a spiral into another Great Depression. Growth could falter as the effect of stimulus measures fade and governments exit expansionary policies, the ADB division said.
“With the global recovery tentative, monetary policy should remain accommodative where feasible, with a watchful eye on inflation and asset prices,” the division said. “The recovery could falter if policy makers tighten too early, but tightening too late may lead to higher inflation and unsustainable fiscal deficits in the coming years.”
Confidence in the world economy dipped last month as central banks’ actions to withdraw some emergency measures sparked concern about the strength of the recovery, a Bloomberg survey of users on six continents showed.
Policy makers in Asia have started raising borrowing costs to contain accelerating inflation. The Reserve Bank of Australia increased borrowing costs a total of 75 basis points at its last three meetings and Vietnam raised its benchmark rate by one percentage point to 8 percent in November.
Subdued Inflation
“Inflationary pressures appear to be well under control for the moment,” the ADB’s regional integration office said. “While recently showing slight increases, inflation is still expected to remain subdued as economies operate with excess capacity.”
Recovery in East Asia also hinges on the revival of growth in Europe and in the U.S., as this will affect the region’s export-dependent economies, the office said.
“The deleveraging cycle is still in its early years, and if households in developed countries, particularly the U.S., save more-than-expected to repair their balance sheets, then weaker consumer demand will delay recovery in these economies,” the ADB division said.
Emerging East Asia groups China, the Southeast Asian nations of Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Thailand and Vietnam, and the newly industrialized economies of Hong Kong, Singapore, South Korea and Taiwan.
Developing Asia, which includes economies such as India and Pakistan and excludes Japan, will probably expand 6.6 percent next year after growing 4.5 percent in 2009, the ADB said in a separate note today.
Asian Stocks Fluctuate; China Developers Fall, Miners Advance
Dec. 15 (Bloomberg) -- Asian stocks fluctuated, as Chinese developers fell on speculation China’s government will take more steps to curb property speculation. Mining stocks rose as JPMorgan Chase & Co. upgraded BHP Billiton Ltd.
China Vanke Co., the nation’s biggest listed developers, slid 2.5 percent after the Xinhua News Agency said the government will target “excessive” property prices in some cities. Mitsui O.S.K. Lines Ltd., Japan’s No. 2 shipping line, fell 1.3 percent after cargo rates dropped. BHP, the world’s largest mining company, climbed 0.9 percent as copper advanced.
The MSCI Asia Pacific Index lost 0.1 percent to 120.26 as of 12:06 p.m. in Tokyo. It swung between gains and losses at least six times. The gauge has climbed 34 percent this year, set for its biggest annual gain since 2003, on signs government spending packages and lower interest rates are reviving the global economy.
“Asia does not offer much value in a valuation perspective, which is why we’re a bit cautious going into the new year,” said Christopher Wong, a fund manager at Aberdeen Asset Management Ltd. in Singapore, which oversees about $25 billion of Asian assets, told Bloomberg Television today. “We haven’t taken money off the table. We just need to wait for fundamentals to catch up.”
Japan’s Nikkei 225 Stock Average lost 0.2 percent. Hong Kong’s Hang Seng Index dropped 0.9 percent, while the Shanghai Composite Index sank 0.4 percent in China. Australia’s S&P/ASX 200 Index rose 0.4 percent. Platinum Australia Ltd. surged 4.6 percent after prices of the metal climbed.
Dubai Support
Futures on the Standard & Poor’s 500 Index were little changed. The gauge rose 0.7 percent to the highest since October 2008, as Abu Dhabi agreed to provide financing to Dubai’s financial support fund, allowing Dubai World to repay $4.1 billion of Islamic bonds that were due yesterday.
The MSCI Asia Pacific Index has climbed 71 percent from a more than five-year low on March 9, outpacing gains of 65 percent by the S&P 500 and 56 percent for Europe’s Dow Jones Stoxx 600 Index. Stocks in the benchmark are valued at 22 times estimated earnings, compared with 18 times for the S&P and 16 times for the Stoxx.
BHP Billiton rose 0.9 percent to A$41.02. Rio Tinto added 0.5 percent to A$70.83. JPMorgan boosted their ratings after the broker increased its iron ore, coal and metal price forecasts. BHP was raised to “neutral” from “underweight” and Rio to “overweight” from “neutral,” JPMorgan analysts said yesterday in a report.
Metals Demand
Earnings per share next year at Rio, the second-biggest producer of iron ore, may be 30 percent higher than forecast because of higher metal prices, the JPMorgan report said. The earnings per share forecast for BHP this fiscal year was increased by 16 percent for next year.
Raw-material producers are the best performing of the MSCI Asia Pacific Index’s 10 industry groups this year on optimism global growth will fuel metals demand. Copper prices have more than doubled this year. Active futures on the metal rose 0.3 percent in New York after-hours trading, taking a three-day advance to 1.9 percent.
Platinum Australia, which owns mines in the country and South Africa, climbed 5.7 percent to 93 Australian cents after the metal rose the most in almost two weeks in New York yesterday. Aquarius Platinum Ltd., the world’s fourth-biggest producer of the metal, surged 5.4 percent to A$6.69.
China Vanke slid 2.5 percent to 11.50 yuan after Xinhua reported the Chinese government plans to “speed the construction of low-cost housing” and strengthen supervision of the real- estate market.
Policy Risk
Poly Real Estate Group Co. lost 3.2 percent to 23.80 yuan. China Overseas Land & Investment Ltd., a developer controlled by China’s construction ministry, sank 2.8 percent to HK$17.82 in Hong Kong.
“Government policy is a big risk to property stocks,” said Zhang Qi, an analyst at Haitong Securities Co. in Shanghai.
China’s property prices climbed last month at the fastest pace since July 2008, adding to concern that record lending may fuel unsustainable asset-price increases. The State Council said last week the government will re-impose a sales tax on homes sold within five years, after cutting the period to two years in January.
Asset bubbles are the No. 1 threat to financial stability in Asia, posing a bigger danger than inflation, Norman Chan, the head of Hong Kong’s de facto central bank said yesterday.
In Tokyo, Mitsui O.S.K. lost 1.3 percent to 459 yen, while in Seoul, STX Pan Ocean Co., South Korea’s biggest bulk carrier, fell 1.7 percent to 11,900 won.
Shipping stocks fell after the Baltic Dry Index, a measure of shipping costs for commodities, posted a sixth straight drop as the market for hiring capesize vessels for transporting iron ore and coal weakened. The index slid 1.4 percent yesterday to a five-week low.
“There’s just a general feeling that we are winding down for New Year and the bulk of the buying has been done this year,” said Chris Weston, an institutional dealer at IG Markets in Melbourne. “We’re just lacking the catalyst to really attract buyers at present. Traders are more happy to trade individual news stories.”
China Vanke Co., the nation’s biggest listed developers, slid 2.5 percent after the Xinhua News Agency said the government will target “excessive” property prices in some cities. Mitsui O.S.K. Lines Ltd., Japan’s No. 2 shipping line, fell 1.3 percent after cargo rates dropped. BHP, the world’s largest mining company, climbed 0.9 percent as copper advanced.
The MSCI Asia Pacific Index lost 0.1 percent to 120.26 as of 12:06 p.m. in Tokyo. It swung between gains and losses at least six times. The gauge has climbed 34 percent this year, set for its biggest annual gain since 2003, on signs government spending packages and lower interest rates are reviving the global economy.
“Asia does not offer much value in a valuation perspective, which is why we’re a bit cautious going into the new year,” said Christopher Wong, a fund manager at Aberdeen Asset Management Ltd. in Singapore, which oversees about $25 billion of Asian assets, told Bloomberg Television today. “We haven’t taken money off the table. We just need to wait for fundamentals to catch up.”
Japan’s Nikkei 225 Stock Average lost 0.2 percent. Hong Kong’s Hang Seng Index dropped 0.9 percent, while the Shanghai Composite Index sank 0.4 percent in China. Australia’s S&P/ASX 200 Index rose 0.4 percent. Platinum Australia Ltd. surged 4.6 percent after prices of the metal climbed.
Dubai Support
Futures on the Standard & Poor’s 500 Index were little changed. The gauge rose 0.7 percent to the highest since October 2008, as Abu Dhabi agreed to provide financing to Dubai’s financial support fund, allowing Dubai World to repay $4.1 billion of Islamic bonds that were due yesterday.
The MSCI Asia Pacific Index has climbed 71 percent from a more than five-year low on March 9, outpacing gains of 65 percent by the S&P 500 and 56 percent for Europe’s Dow Jones Stoxx 600 Index. Stocks in the benchmark are valued at 22 times estimated earnings, compared with 18 times for the S&P and 16 times for the Stoxx.
BHP Billiton rose 0.9 percent to A$41.02. Rio Tinto added 0.5 percent to A$70.83. JPMorgan boosted their ratings after the broker increased its iron ore, coal and metal price forecasts. BHP was raised to “neutral” from “underweight” and Rio to “overweight” from “neutral,” JPMorgan analysts said yesterday in a report.
Metals Demand
Earnings per share next year at Rio, the second-biggest producer of iron ore, may be 30 percent higher than forecast because of higher metal prices, the JPMorgan report said. The earnings per share forecast for BHP this fiscal year was increased by 16 percent for next year.
Raw-material producers are the best performing of the MSCI Asia Pacific Index’s 10 industry groups this year on optimism global growth will fuel metals demand. Copper prices have more than doubled this year. Active futures on the metal rose 0.3 percent in New York after-hours trading, taking a three-day advance to 1.9 percent.
Platinum Australia, which owns mines in the country and South Africa, climbed 5.7 percent to 93 Australian cents after the metal rose the most in almost two weeks in New York yesterday. Aquarius Platinum Ltd., the world’s fourth-biggest producer of the metal, surged 5.4 percent to A$6.69.
China Vanke slid 2.5 percent to 11.50 yuan after Xinhua reported the Chinese government plans to “speed the construction of low-cost housing” and strengthen supervision of the real- estate market.
Policy Risk
Poly Real Estate Group Co. lost 3.2 percent to 23.80 yuan. China Overseas Land & Investment Ltd., a developer controlled by China’s construction ministry, sank 2.8 percent to HK$17.82 in Hong Kong.
“Government policy is a big risk to property stocks,” said Zhang Qi, an analyst at Haitong Securities Co. in Shanghai.
China’s property prices climbed last month at the fastest pace since July 2008, adding to concern that record lending may fuel unsustainable asset-price increases. The State Council said last week the government will re-impose a sales tax on homes sold within five years, after cutting the period to two years in January.
Asset bubbles are the No. 1 threat to financial stability in Asia, posing a bigger danger than inflation, Norman Chan, the head of Hong Kong’s de facto central bank said yesterday.
In Tokyo, Mitsui O.S.K. lost 1.3 percent to 459 yen, while in Seoul, STX Pan Ocean Co., South Korea’s biggest bulk carrier, fell 1.7 percent to 11,900 won.
Shipping stocks fell after the Baltic Dry Index, a measure of shipping costs for commodities, posted a sixth straight drop as the market for hiring capesize vessels for transporting iron ore and coal weakened. The index slid 1.4 percent yesterday to a five-week low.
“There’s just a general feeling that we are winding down for New Year and the bulk of the buying has been done this year,” said Chris Weston, an institutional dealer at IG Markets in Melbourne. “We’re just lacking the catalyst to really attract buyers at present. Traders are more happy to trade individual news stories.”
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