Bookies see Europe stocks flat, stress tests eyed

July 24, 2010 By Leave a Comment

July 23 (Reuters) – Financial bookmakers expected to see the leading European benchmark indexes opening flat on Friday, following the previous session’s rally, as investors eagerly awaited results from the banking sector’s stress tests.

Financial spreadbetters expected Britain’s FTSE 100 .FTSE to open down 1 point to up 1 point, Germany’s DAX .GDAXI unchanged to up 1 point, and France’s CAC-40 .FCHI down 1 to 2 points.

In an effort to calm investors’ jitters over the potential impact of the euro zone debt crisis on Europe’s banking system, regulators are assessing how 91 banks across Europe would cope with another economic downturn, and the results are expected to be published on Friday.

“At this point, the market seems to have priced in the tests, as investors believe Europe won’t shoot itself in the foot by revealing very negative surprises. But to be credible, there has to be some damage,” said Christian Parisot, chief economist at Aurel BGC.

(Reporting by Blaise Robinson and Florent Le Quintrec; Editing by Helen Massy-Beresford)

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Amid Fears of Double-Dip Recession, Ceridian-UCLA Pulse of Commerce Index(TM) Falls Sharply in June

July 14, 2010 By Leave a Comment

MINNEAPOLIS, July 13 /PRNewswire/ — The Ceridian-UCLA Pulse of Commerce Index™ (PCI) by UCLA Anderson School of Management tumbled 1.9 percent in June after its impressive 3.1 percent gain in May. Coming in the midst of other disappointing economic reports, the PCI’s drop seemingly reinforces the fear that the economy is on the brink of a double-dip recession, but further analysis tells a different story, according to PCI Chief Economist Edward Leamer.

“While June’s number is substantially down, erasing two-thirds of May’s great gain, the daily and weekly activity on which the monthly PCI is based does not suggest that the economy is heading over a cliff,” said Leamer. “Part of the apparent strength of May and weakness in June is the result of the Memorial Day holiday occurring on the last day of May, allowing the negative Memorial Day effect which is usually confined to May to leak into June. More importantly, the June weakness was confined to the first two weeks, and by the second half of June, we were seeing strong growth again.”

The PCI data also indicates strong year-over-year and quarter-over-quarter growth, even though the month-to-month comparison is worrisome. The annualized number for June climbed 8.6 percent, the seventh consecutive month of positive year-over-year results.

“The PCI has not been showing the sustained negative numbers characteristic of a double-dip recession,” Leamer said.

The PCI is based on an analysis of real-time diesel fuel consumption data from over the road trucking tracked by Ceridian, a global provider of electronic and stored value card payment services and human resources solutions. By analyzing payment card data for the location and volume of diesel fuel purchased by truck operators, the PCI provides a detailed picture of the movement of goods and materials across the United States.

The PCI closely tracks the Federal Reserve’s monthly Industrial Production (IP) index and forecasts expected results for the IP, which is released later in the month. Due to the negative June PCI report, the PCI is projecting June IP growth of 0.25 percent.

On a quarterly scale, the PCI grew 6.2 percent during the second quarter 2010, down from previous periods. The weaker PCI number suggests a Q2 GDP growth rate of only 2.5 percent, which is a positive number but not significant enough to put the unemployed back to work.

“Since the last half of 2009, manufacturers had been actively replenishing inventories, which brought the quarterly PCI numbers up due to more trucking activity. Now that the heavy period of inventory build-up is over, we’re seeing a corresponding drop in the quarterly number,” said Craig Manson, senior vice president and index expert for Ceridian.

The Ceridian-UCLA Pulse of Commerce Index also provides data for the nine Census regions. The decline in June is widespread, with only the New England region (e.g. Maine and Vermont) experiencing an increase, improving 0.9 percent. Areas of the country seeing the most significant decreases included the East South Central region (e.g. Alabama and Tennessee) dropping 3.7 percent and the East North Central region (e.g. Ohio and Michigan) declining 3.1 percent.

The complete June report and additional commentary is available at www.ceridianindex.com or by contacting index@Ceridian.com. The site offers further detail such as index graphs and downloadable data, video commentary and sound bites, information on how the data is obtained, and the opportunity to receive updates on the latest information via e-mail and RSS feeds.

About Ceridian-UCLA Pulse of Commerce Index

The Ceridian-UCLA Pulse of Commerce Index™ is based on real-time diesel fuel consumption data for over the road trucking and serves as an indicator of the state and possible future direction of the U.S. economy. By tracking the volume and location of fuel being purchased, the index closely monitors the over the road movement of raw materials, goods-in-process and finished goods to U.S. factories, retailers and consumers. Working with economists at UCLA Anderson School of Management and Charles River Associates, Ceridian provides the index monthly and also offers companies access to more detailed fuel-use information. Ceridian is a global business services company providing electronic and stored value card payment services and human resources solutions. UCLA Anderson School of Management is perennially ranked among top-tier business schools in the world. Charles River Associates is a leading global consulting firm that offers economic, financial, and business management expertise to organizations around the world.

For additional information on the Ceridian-UCLA Pulse of Commerce Index, please visit www.ceridianindex.com.

SOURCE Ceridian

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UK firms cut advertising spend in Q2 – survey

July 13, 2010 By Leave a Comment

July 12 (Reuters) – British companies cut their marketing budgets in the second quarter and sentiment dropped to its lowest level for a year, a survey showed on Monday, suggesting the rebound in economic activity is waning.

The survey of around 300 British companies for the IPA/BDO Bellwether report found that advertising budgets for nearly all categories were revised down.

“The downward revision to marketing budgets in the second quarter is disappointing as it fails to build on the return to growth seen earlier in the year and highlights the fragility of the UK economic recovery,” said Chris Williamson, chief economist at Markit and author of the report.

“Companies are exercising increased caution in their expenditure in the face of likely slower economic growth in the second half of the year.

“However, it is encouraging to see that marketing spend is still set to increase for the year as a whole compared to 2009, albeit to a lesser extent than signalled in the first quarter.”

The report also said the rate that companies cut their budgets was much slower than that seen at the height of the economic downturn.

Almost 20 percent of the companies reported a cut to their spending, compared with 15 percent that increased the rate.

Some 25 percent of marketing executives described themselves as pessimistic about the financial prospects for their company, compared with 20 percent in the first quarter.

Of the different categories, main media spend was revised down in the quarter following a modest upgrade in the previous quarter. Spending on the Internet increased slightly however the rate of growth was the slowest for three quarters.

“The second quarter BDO/IPA Bellwether report reveals a cautious and uncertain picture,” Andy Viner, the head of media at BDO said. “After a strong rebound in Q1, optimism and confidence appear to be waning.

“It is clear that there are increasing signs that uncertainty over economic prospects continue and that corporates remain focussed on cost control against a backdrop of the risk of a double dip.”

(Reporting by Kate Holton; Editing by Erica Billingham)

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Shifts in China’s FX reserves have to be slow-IMF

July 10, 2010 By Leave a Comment

July 9 (Reuters) – Any changes to the makeup of China’s massive pile of foreign exchange reserves will have to be gradual so as not to cause volatility in world markets, the International Monetary Fund’s chief economist said.

Shifts in the composition of the Chinese central bank’s more than $2 trillion portfolio would have to be “very, very slow”, Olivier Blanchard, the IMF’s economic counsellor and director of research, said at an Asia Society event in Hong Kong on Friday.

China bought a record $7.9 billion in short-term Japanese debt in May, a surge that some analysts said was a sign of foreign reserves diversification into the yen and away from the euro and the dollar. [ID:nTOE66705G] (Reporting by James Pomfret, writing by Kevin Plumberg; Editing by Chris Lewis)

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Nikkei back above key retracement, off 7-mth low

July 7, 2010 By Leave a Comment

TOKYO, July 6 (Reuters) – Japan’s Nikkei inched up on Tuesday, paring losses to climb back above support at a key retracement level after falling to a seven month low.

Comments from ex-IMF chief economist Kenneth Rogoff on the Bloomberg website that China’s property market is beginning a “collapse” that would hit banks was seen to have contributed to a stronger yen, which hit shares of Japanese exporters such as Canon Inc (7751.T) in early trade, dragging the Nikkei down.

But the index pared losses and rebounded, taking heart from a bounce in Chinese stocks.

The benchmark Nikkei .N225 started trade below 9,200, a key support around the level of a 50 percent retracement from its March 2009 low to its April high, before hitting a seven-month low of 9,091.70 and coming within sight of its next support — 9,076, a trough touched last November.

But the benchmark pared its losses and was up 19.34 points at 9286.12, a 0.2 percent climb.

The broader Topix gained 0.3 percent to 839.67.

“A rise in Shanghai stocks and a pullback by the yen helped soothe market sentiment. Some investors also appeared to have bought back stocks with Japanese government bonds (JGBs) sagging today,” said Kazuhiro Takahashi, general manager at Daiwa Securities Capital Markets.

The Shanghai Composite Index .SSEC rose 1.8 percent.

“But a strong trend has struggled to emerge (in Tokyo) as the market has been thinly traded as the United States was on holiday yesterday. The market will need stronger incentives to establish a clearer trend.”

U.S. markets were closed on Monday for a holiday.

“There’s still some concern about Europe and now we also have these comments from Rogoff, in which he used the word ‘collapse’,” said Hiroaki Kuramochi, chief equity marketing officer at Tokai Tokyo Securities.

“As to whether the market falls still further or not, that depends on currencies.”

Market players said that with the settlement of Nikkei options approaching on Friday, trade was likely to be volatile.

Market players said on Monday that there are a large number of option triggers on Nikkei futures at 9,000 and 8,500, and that the market remains gamma short — meaning traders need to follow market moves to hedge their books, often leading to volatile moves.

In addition, the technical picture has given mixed signals.

The Nikkei’s RSI now comes in at 34, with 30 and under considered oversold, while its slow stochastic — a measure of how oversold the market is and whether it is in a short-term up or down trend — began pointing up again after a brief morning dip.

But the Nikkei’s MACD, a measure of market momentum, continues to fall.

EXPORTERS PARE LOSSES

Exporters pared their losses or rebounded after the yen fell back slightly.

Tokyo Electron Ltd (8035.T) shed 0.2 percent to 4,725 yen after going as low as 4,550 yen, while Canon Inc (7751.T) gained 0.5 percent to 3,300 yen after falling as much as 2.2 percent. Honda Motor Co (7267.T) rose 1 percent to 2,536 yen after shedding as much as 1.6 percent.

Mitsui O.S.K. Lines (9104.T) and other shipping companies fell after the Baltic Exchange’s main sea freight index .BADI dropped to its lowest level in over nine months on Monday as weak iron ore activity hurt sentiment. [ID:nLDE6641MZ]

ABC Mart Inc (2670.T) fell 2.2 percent to 3,295 yen after the shoe retailer said its June same-store sales declined 1.5 percent from a year earlier, the first drop in eight months, blaming bad weather for keeping shoppers at home.

The euro was down 0.4 percent at 109.68 yen, pulling back from an intraday low of 109.14 yen EURJPY=R. (Editing by Joseph Radford)

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UPDATE 1-BAT’s Durante to succeed Adams as CEO in 2011

June 25, 2010 By Leave a Comment

TOKYO, June 24 (Reuters) – Japan’s annual export growth slowed for a third consecutive month in May in a sign that its overall economic growth could start to slow as the pace of recovery in overseas demand moderates.

Exports also fell 1.2 percent from the previous month on a seasonally adjusted basis as signs of weakness in the U.S. economic recovery and steps to curb bank lending and investment in China hampered demand for Japanese goods.

External demand is likely to continue to make a positive contribution to Japan’s gross domestic product due to demand from Asia. But analysts say this positive contribution could shrink as global restocking of inventories runs its course.

They are also cautious about the outlook as Europe’s debt problems and recent yen strength could slow Japanese shipments in the coming months.

“Exports grew at a slower-than-expected pace apparently due to the effects of China’s tightening” of banks’ reserve requirements, said Takeshi Minami, chief economist at Norinchukin Research Institute in Tokyo.

“Europe’s debt crisis is also expected to impact China’s exports to Europe in the coming months as the euro’s drop hurts Chinese firms’ competitiveness. This in turn is likely to prevent Japan’s exports from recovering fully.” <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ Graphic on Japan exports r.reuters.com/zym73m More stories on the Japanese economy [ID:nECONJP] ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>

Exports rose 32.1 percent in the year to May on gains in shipments of cars, steel and semiconductors, less than the median forecast for a 36.9 percent rise, the Ministry of Finance said. [JPEXPY=ECI]

Export growth has been slowing after shipments rose an annual 45.3 percent in February, the largest gain since 1980.

Exports to fast-growing Asia including China, which accounts for more than half of Japan’s total shipments, rose 34.4 percent from a year earlier, slowing for the fourth consecutive month after they jumped a record 68.3 percent in January

Economists polled by Reuters expect Japan’s economic growth to slow to 0.4 percent in April-June from the 1.2 percent seen in the first quarter, partly as the effects of government stimulus fades and export growth moderates. [ID:nSLAGHE671]

They expect the world’s No.2 economy to grow 2.5 percent in the fiscal year to next March, largely in line with government projections and more than the Bank of Japan forecast.

The government has vowed to achieve an average 2 percent real growth over the next 10 years by carrying out its growth strategies. But analysts say this will be a tall order given that the economy grew a meagre 1.3 percent on average in the decade until the financial crisis in 2008 that led to a global recession.

NO EFFECTS FROM EUROPE

A finance ministry official said the trade data showed no effects from Europe’s debt problems. But the ministry will keep an eye on its impact on Japan’s exports in the future, he said.

Shipments to the European Union rose an annual 17.4 percent due to demand for auto parts and electronics parts from Germany. Annual growth has slowed for the second straight month after a 26.7 percent rise in March, the biggest gain since 1998.

Yoshimasa Maruyama, an economist at Itochu Corp, said Japan’s real exports to the EU grew 2.4 percent from the previous month, with capital goods such as chemicals and metal products marking double-digit gains.

“I guess the euro’s weakness helped boost exports and output in countries like Germany, which has in turn increased demand for Japanese parts and materials,” Maruyama said.

“There was no major change in the trend that expansion in emerging Asia leads the world economy. Therefore Japan’s exports will continue to grow, but the pace of growth will be slower compared with the past year as global restocking of inventory runs its course.”

Slowing export growth was also evident in shipments to the United States, a key destination for Japanese goods. U.S.-bound exports rose an annual 17.7 percent, but pace slowed from a 50.5 percent rise in February, the biggest gain since 1984.

The Federal Reserve acknowledged the faltering pace of U.S. economic recovery on Wednesday as it renewed its vow to hold benchmark interest rates exceptionally low for an extended period.

In a statement at the end of a two-day meeting, the Fed scaled back its assessment of the pace of recovery, recognising pockets of weakness, and also issued a cautionary note about volatile financial markets in light of Europe’s debt woes. [ID:nN22150078]

Japan’s finance ministry is also watching any effects from China’s yuan policy on the country’s trade, the official said, adding that it could have both merits and demerits.

China’s trading partners are anxious for Beijing to spell out how quickly it will let the yuan rise after it said on Saturday that it was ending the currency’s 23-month-old peg to the dollar. [ID:nCHINATAKE]

Japan’s overall imports rose 33.4 percent in May from a year earlier, marking the biggest gain since 2006 and bringing the country’s trade surplus to 324.2 billion yen ($3.61 billion). [JPIMPY=ECI][JPTBAL=ECI] ($1=89.93 Yen) (Editing by Michael Watson and Joseph Radford)

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Romania – Factors to Watch on June 24

June 25, 2010 By Leave a Comment

June 24 (Reuters) – Here are news stories, press reports and events to watch which may affect Romanian financial markets on Thursday.

Energy

AUSTERITY

Romania’s powerful Constitutional Court is expected to rule on challenges to planned government cuts in state wages and pensions, key to keeping afloat a 20 billion euros IMF-led aid package.

MAY MONEY SUPPLY

The central bank is expected to release money supply data for May.

ROMANIA PARLIAMENT DELAYS IMF-MANDATED PENSION BILL

Romania’s parliament postponed on Wednesday the approval of an IMF-mandated plan to reform the country’s communist-era pension system until September, missing a deadline agreed with the Fund.

[ID:nLDE65M19X]

ROMANIA LEVIES NEW TAXES ON STATE FIRMS, INDIVIDUALS

Romania’s government raised the amount state-owned companies must contribute from their profits to the state budget and enforced new taxes on individuals and employers as it seeks to cut its budget deficit.

[ID:nLDE65M1RQ]

FISCAL COUNCIL

Romanian official institutions, including the central bank, have nominated on Wednesday proposals for the country’s fiscal council set up to assess the government’s budget plans through an IMF-mandated fiscal responsibility law.

Parliament is expected to approve the nominations on Tuesday.

Agerpres

PUBLIC SECTOR LAYOFFS

The government would need to lay off about a quarter of its 1.4 million public sector employees to ensure enough resources next year to reverse a planned 25 percent cut in state wages for 2010, the central bank’s chief economist Valentin Lazea said.

Gandul, Page 4

NOTE- For a diary of forthcoming Romanian events, double

click [RO/DIARY], and a calendar of east European economic indicators, see [CONV/DIARY].

For other related news, double click on: ————————————————————— Romania Market Debt [RO-DBT] Romanian forex [RO-FRX] Romania Market Report [ROL/] Romanian money [RO-M] Emerging Market Debt [EMRG/DBT] Emerging forex [EMRG/FRX] All Emerging Markets news [EMRG] CEE indicators [CONV/DIARY] All East Europe News [EEU] E.Europe equities [.CEE] TOP NEWS — Emerging markets [TOP/EMRG] TOP NEWS — Convergence watch [TOP/EAST] Romanian indicators [RO/ECI] Main page of Reuters poll —————————————————————

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Nikkei slips off 1-mth high after 5 days of gains

June 18, 2010 By Leave a Comment

TOKYO, June 17 (Reuters) – Japan’s Nikkei average fell 0.7 percent on Thursday after five days of gains, coming off one-month highs, though support was expected to hold at the level of the benchmark’s 25-day moving average.

The Nikkei was stuck near 10,000, which market players say is a prerequisite for confirming a double bottom, but further rises were likely to be hard going amid an apparent lack of investor interest, both from overseas investors and at home.

Foreign investors sold a net 916.9 billion yen of Japanese stocks last week, more than the 75.2 billion yen they sold in the previous week and the biggest outflow in one week since March 2008, Finance Ministry data showed.

“Given where the market stands, investors want to bet on a rebound as long as other financial markets — particularly moves in dollar/yen and euro/yen — are calm,” said Akio Yoshino, chief economist at Societe Generale Asset Management.

“But the environment is actually pretty bad. Not only are Greece’s problems bad but the contagion is also serious, with Spain’s yields rising. The market had been ignoring that aspect up until now but the adjustment in stock prices was probably inevitable.”

A Spanish newspaper reported that the European Union, International Monetary Fund and U.S. Treasury were drawing up an emergency credit line for Spain.

The European Commission denied the report, but the spread between the yield on 10-year Spanish bonds and German bunds hit the highest level in the euro’s 11-year history. [ID:nLDE65F0GX]

Coming off a 1-month high hit the previous day, the benchmark Nikkei .N225 shed 67.75 points to 9,999.40 after spending most of the day above 10,000, a key level that has been both support and resistance at different times over the past year.

It had risen 6.7 percent over the past five trading days in its best such streak since a six-day run from Nov. 30 last year.

Support was seen around 9,800, the level of the Nikkei’s 25-day moving average, after the Nikkei closed above it on Tuesday for the first time in roughly two months.

The next resistance levels will likely be around 10,200 and 10,300, near the Nikkei’s 50-week moving average and its 200-day moving average.

In addition, the 38.2 percent retracement from the Nikkei’s April high of 11,408.17 and its June low of 9,378.23 comes in around 10,156.

The broader Topix slipped 0.6 percent to 887.48.

Market players said on Wednesday that long positions had accumulated in blue chip shares, leaving them vulnerable if upward momentum peters out.

“Wednesday’s rises also were without much strength, since the cash market was pushed up mainly by short-covering in futures,” said Yutaka Miura, senior technical analyst at Mizuho Securities.

Trade was thin on the Tokyo exchange’s first section, with 1.5 billion shares changing hands but up from the four-month low marked early this week.

Declining shares outnumbered advancing ones by 983 to 531.

TAKEFUJI CLIMBS

Shares of consumer lender Takefuji Corp (8564.T) ended the day up 6 percent at 302 yen after a company source said it has secured the 41.4 billion yen ($453 million) of funds it needed to redeem convertible bonds due on Saturday. [ID:nTKB006866]

The news confirmed a report in the Nikkei business daily.

But shares of exporters fell after leading gains in the broader market the previous day, hurt by a flat Wall Street finish in the wake of mixed economic data underlining the uneven nature of the economic recovery.

U.S. housing starts fell more than expected in May to a five-month low, casting a shadow over better-than-expected industrial production data for the same month and underscoring the uneven nature of the recovery, helping Wall Street end flat. [ID:nN16144404]

Sony Corp (6758.T) slid 2.8 percent to 2,564 yen and Kyocera Corp (6971.T) slipped 2.9 percent to 7,990 yen. Honda Motor Co (7267.T) fell 0.8 percent to 2,736 yen.

Shares of Fujitsu Ltd (6702.T) and Toshiba Corp (6502.T) gained after the Nikkei business daily said they had reached a deal to integrate their cell phone businesses, with Fujitsu to take a majority stake in a joint venture to be launched as early as October. [ID:nSGE65F0J1]

Fujitsu rose 1 percent to 593 yen and Toshiba climbed 0.8 percent to 487 yen. (Editing by Edwina Gibbs)

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Romania – Factors to Watch on June 16

June 17, 2010 By Leave a Comment

June 16 (Reuters) – Here are news stories, press reports and events to watch which may affect Romanian financial markets on Wednesday.

Energy

GOVERNEMNT MEETING

The centrist coalition government holds weekly government meeting at 0600 GMT with no major items on the preliminary agenda.

FINANCIAL SEMINAR

Central bank governor Mugur Isarescu is expected to attend a seminar about small and medium sized enterprises.

Central bank chief economist Valentin Lazea and Isarescu’s adviser Lucian Croitoru are also expected to attend.

CURRENT ACCOUNT

The central bank is expected to release 4-month current account data.

ROMANIAN GOVT SURVIVES AUSTERITY CONFIDENCE VOTE

Romania’s centrist coalition government survived a no-confidence vote in parliament on Tuesday over planned drastic spending cuts, a key step towards securing international aid for its recession-hit economy.

[ID:nLDE65E06I]

ROMANIA’S IMF DEAL STILL AT RISK AFTER VOTE

Romania’s vital IMF deal could yet be derailed by legal challenges and investors will still worry about public finances, even after the coalition government survived a no-confidence vote on Tuesday.

[ID:nLDE65E29Q]

BUDGET REVISION

A budget revision tu cut spending could take place in the next two or three weeks, Finance Minister Sebastian Vladescu said.

Gandul, page 5

FITCH GDP FCAST

Romania’s economy will drop by 1 percent in 2010 and no significant improvement of the country’s rating is expected in the next period, Richard Hunter, Fitch Group Managing Director for European and Asian Corporates was paraphrased as saying.

Ziarul Financiar, Page 2

CARS

Car registrations dropped 49 percent on the year in January-May in Romania, to about 26,300 units.

Ziarul Financiar, Page 11

GOVERNMENT RESHUFFLE

A government reshuffle could take place in about two weeks, a minister who did not want to be named told daily Gandul.

Gandul, Page 1

*The number of ministries in the government could be reduced to 9 or 10, sources said. Also, at Wednesday’s government meeting the ministers are expected to come up with proposals to reduce the number of deputy ministers.

Evenimentul Zilei, Page 2

WIND TURBINES FACTORY

Swiss company Windex plans to build a 25-million-euro wind turbine factory in the south-eastern Constanta county in two months.

Romania Libera, Page 3

NOTE- For a diary of forthcoming Romanian events, double

click [RO/DIARY], and a calendar of east European economic indicators, see [CONV/DIARY].

For other related news, double click on: ————————————————————— Romania Market Debt [RO-DBT] Romanian forex [RO-FRX] Romania Market Report [ROL/] Romanian money [RO-M] Emerging Market Debt [EMRG/DBT] Emerging forex [EMRG/FRX] All Emerging Markets news [EMRG] CEE indicators [CONV/DIARY] All East Europe News [EEU] E.Europe equities [.CEE] TOP NEWS — Emerging markets [TOP/EMRG] TOP NEWS — Convergence watch [TOP/EAST] Romanian indicators [RO/ECI] Main page of Reuters poll —————————————————————

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In China’s interest to revalue -IMF chief economist

June 17, 2010 By Leave a Comment

June 16 (Reuters) – It is in China’s interest to revalue its currency, and from the point of view of the rest of the world, it should happen as soon as possible, the International Monetary Fund’s top economist was quoted as saying.

Bonds | Global Markets

“Some sectors in China are overheating and workers are demanding more pay. They (authorities) don’t want the inflation risk to grow,” IMF Chief Economist Olivier Blanchard said in Finnish business paper Kauppalehti on Wednesday.

“I don’t know when and by how much the yuan will be revalued, but I believe it is in their (China’s) interests. For the rest of the world it is important that it happens as soon as possible,” he said.

Blanchard also said it was clear the global economy was on a growth path.

“The real economy is recovering, of that there is no doubt. If anything the recovery has been stronger than we have forecast,” he said.

(Reporting by Brett Young; Editing by Neil Fullick)

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UPDATE 1-Japan business mood, capex improve despite yen rise

June 14, 2010 By Leave a Comment

TOKYO, June 14 (Reuters) – Big Japanese manufacturers grew more optimistic about the business environment in the April-June quarter in a sign corporate sentiment is weathering a rising yen and market turmoil stemming from Europe’s debt crisis.

Companies also sharply raised their capital expenditure plans for the fiscal year to March 2011 in a sign that corporate appetite to spend is gradually picking up.

“Sentiment is gradually improving both for underlying conditions and the outlook,” said Takeshi Minami, chief economist for Norinchukin Research Institute.

“The euro’s decline triggered by the Greek debt crisis doesn’t seem to have had much impact, at least for now.”

The business survey index (BSI) of sentiment at large manufacturers rose to plus 10.0 in April-June from plus 4.3 in the previous quarter, a joint survey by the Ministry of Finance and the Cabinet Office’s Economic and Social Research Institute showed on Monday. [JPBUSC=ECI]

Large manufacturers expect their sentiment index to improve to plus 13.8 in July-September, compared with plus 10.3 in the previous survey.

Companies also see capital spending in the year to March 2011 rising 9.2 percent from the previous year, a sharp improvement from a 5.5 percent drop forecast in the previous survey.

The improvement bodes well for new Prime Minister Naoto Kan, who plans to lay out plans to boost Japan’s potential growth as well as a medium- and long-term target to fix the country’s tattered finances.

The Bank of Japan is expected to announce details of a new loan scheme aimed at redirecting money to industries with growth potential after a policy meeting ending on Tuesday. [ID:nTOE65D004]

The BSI measures the percentage of firms that expect the business environment to improve from the previous quarter minus the percentage that expect it to worsen.

The survey was conducted in May, when the euro EUR= tumbled, the yen JPY= jumped and global stock markets fell sharply as Greece’s debt crisis fanned fears of contagion to other European countries and the euro-zone banking system.

Japanese business sentiment has been improving as exports and industrial output recovers due to strong demand from Asia.

Economists forecast robust exports to Asia and other emerging economies will keep supporting Japan’s recovery from its worst postwar recession, but growth may slow later this year as gains in consumption could moderate due to a lacklustre jobs market.

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Reuters Insider – ECB Chief Economist Jürgen Stark on the Euro

June 12, 2010 By Leave a Comment

Reuters Insider is holding a live panel debate at 0915 GMT examining the debt crisis in Europe and the future of the euro with insight from the ECB’s Chief Economist Jürgen Stark, Deutsche Bank Chief Economist Thomas Mayer and Goethe University Professor Volker Wieland.

To watch live, go to insider.thomsonreuters.com and log in, or register for an account.

The show will also be available live and on demand on 3000 Xtra. Click on:

link.reuters.com/ran39k

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RPT-US Gulf oil output growth triple the previous record-BP

June 10, 2010 By Leave a Comment

LONDON, June 9 (Reuters) – Oil output growth in the U.S. Gulf of Mexico last year tripled the previous record, British oil major BP said on Wednesday, as it tries to contain the large oil spill from its deep water drilling well.

BP (BP.L) said oil production outside the Organization of the Petroleum Exporting Countries (OPEC) increased by 450,000 barrels per day last year, with the United States being the largest contributor.

“By far the biggest contribution to production growth came from the U.S., with output rising by 460,000 bpd, the strongest increase since 1970,” Christof Ruehl, BP’s chief economist, said at a conference for the release of BP Statistical Review of World Energy.

“It was driven by offshore production in the Gulf of Mexico, which grew by 390,000 bpd, triple the previous record growth.”

New oil fields and limited disruptions by hurricanes sustained the output increase in the gulf, which accounts for about 28 percent of U.S. oil output, he said.

However, BP did not give precise outlooks for oil production volume or potential volumetric impact from the spill.

“It is not clear yet and premature to judge what the cost could be,” Managing Director Iain Conn said.

Conn said subsurface and deepwater drilling and oil product technologies would have to be reviewed to increase safety.

He also said it was too early to say if the spill would trigger major shifts to non-conventional energy from conventional energy of fossil fuel.

The oil spill, which began on April 20, is causing an ecological and economic disaster along the U.S. Gulf Coast and it has been at the top of President Barack Obama’s agenda. [ID:nN08105101]

Government scientists have estimated that the leak spews 12,000-19,000 barrels a day, with one estimate as high as 25,000 barrels. They are due to present revised estimates later this week or early next week.

Filed Under: International News Tagged With: , , , , , , , , , , , , , , , , , , ,

Four Star Holdings, Inc. Reaches Construction Milestone

June 4, 2010 By Leave a Comment

BIRMINGHAM, Ala., June 3, 2010 (GLOBE NEWSWIRE) — Four Star Holdings, Inc.
(OTCBB:FSTH) is excited to announce that they have surpassed original goals by
completing construction on 1,100 single family homes. Four Star demonstrates an
intimate knowledge of the Birmingham, AL home market and has a vested interest
in developing additional homes on their 5,500 potential new home sites. These
homes will be constructed over the next 7 years with an estimated average
selling price of $170,000.00.

Lawrence Yun, Chief Economist for National Association of Realtors, predicts
future new home needs in the upcoming years in this article released in June
2010;

http://www.realtor.org/rmonews_and_commentary/economy/1006_economy_housingshorta

e. In the article, Mr. Yun states, “that the under production over the past
three years could be an issue”; and further states, “a housing shortage is
something we won’t be able to dismiss too quickly.”

Fran Mize, President of Four Star stated today, “I am very confident that our
construction and sales goals will not only be met, but surpassed over the next
year. Housing needs are continuing to grow in the Birmingham area, and we are
here to answer those demands.”

ABOUT FOUR STAR HOLDINGS, INC.

Four Star Holdings, Inc. (OTCBB:FSTH), operates as the 4th largest homebuilding
company in the Birmingham, Alabama area, closely competing with D.R. Horton
(NYSE:DHI), Hovnanian Enterprises, Inc (NYSE:HOV) and HPH Homes, LLC as a fully
integrated builder and developer. The company operates in three segments, Land
Development, Structural Community Planning including Homebuilding, and Realty
Brokerage Services. The corporation is headquartered in Odenville, Alabama.

The Four Star Holdings, Inc. logo is available at

http://www.globenewswire.com/newsroom/prs/?pkgid=7467

SAFE HARBOR STATEMENT

This Press Release contains or incorporates by reference “Forward-looking
statements,” including certain information with respect to plans and strategies
of Four Star Holdings, Inc. For this purpose, any statements regarding this
announcement, which are not purely historical, are forward-looking statements,
within the meaning of the Private Securities Litigation Reform Act of 1995,
including Four Star Holdings, Inc. beliefs, expectations, hopes or intentions
regarding the future. All forward-looking statements are made as of the date
hereof and based on information available to Four Star Holdings, Inc. as of such
date. There are a number of important factors that could cause actual events or
actual results of Four Star Holdings, Inc. and its subsidiaries to differ
materially from those indicated by such forward-looking statements.

CONTACT: Golden Key Business Ventures
(631) 750-6718

Filed Under: International News Tagged With: , , , , , , , , , , , , , , , , , , ,

G20 still has to prove itself after promising start

June 3, 2010 By Leave a Comment

June 2 (Reuters) – If the Group of 20 were a wine, a connoisseur would say that it has great potential but that a lot depends on how it matures over the years.

The old root stock of the Group of Seven industrial nations has been freshened up with fast-growing emerging economies including China, India and Brazil. The likes of Indonesia and Argentina add spice to the assemblage.

Now comes the hard part: making a finished product that is well-balanced and harmonious.

“It’s not going to be about the G7 any more. That’s very clear. It’s just that the G20 is not yet a well-functioning team,” Alicia Garcia-Herrero, Hong Kong-based chief economist for emerging markets at Banco Bilbao Vizcaya Argentaria.

<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^

TAKE A LOOK on the G20 meeting [ID:nSGE64R00R]

G20 ministers face wrangling over bank tax [ID:nLDE64O0MP]

Q+A - G20 efforts to agree a bank tax [ID:nLDE64Q135]

FACTBOX-What the G20 will discuss in Busan [ID:nLDE64Q1LB]

FACTBOX-G20 progress on financial regulation[ID:nLDE64N0NC]

^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>

For sure, near-term expectations are low.

A meeting of G20 finance ministers and central bank chiefs in this port city on Friday and Saturday is unlikely to make much headway on the contentious issues of international financial regulation and a global bank tax to pay for any future bailouts.

Ministers are expected to fudge the tax issue by drawing up a “list of principles” for the group’s leaders to consider at a summit in Toronto on June 26/27, according to a G20 source.

Papering over differences would reinforce criticism voiced by officials — from both rich and emerging countries — that the G20 is more of a talking shop than an executive committee to steer the world economy.

“There is still a transition, in that having many more players at the table in a relatively disorganised way makes it hard to take decisions,” Garcia-Herrero said.

LEGITIMACY

Although world leaders last September elevated the G20 to be the premier international economic policy forum, it was telling that it was G7 finance ministers who held a conference call last month to discuss Greek and euro zone debt woes — an issue set to feature prominently in Busan. [ID:nN14134540]

Consensus over a bank tax would have eluded even the tighter membership of the G7, given Canada’s fierce opposition.

Still, the bickering is taking some of the shine off the G20′s impressive response to the 2008/09 financial meltdown. The group’s governments pledged $5 trillion in stimulus spending and loan guarantees in a display of urgency that some fear is fading.

“As the economy has started to recover, we observe a very diluted imperative for global cooperation and standard setting, in favour of more technical and nationalistic proposals,” Li Daokui, an economics professor at Beijing’s Tsinghua University, and Suzanne Nora Johnson, a trustee of the Carnegie Institution for Science in the United States, wrote in a paper for the World Economic Forum issued last week.

Yet markets ignore the G20 at their peril.

Accounting for 85 percent of global GDP, the group unquestionably enjoys greater political legitimacy than the G7.

And not least because China is a member, it is the G20 that holds the key to ironing out global economic imbalances.

“Increasingly the G20 is a big focus,” said Michael Buchanan, chief Asian economist for Goldman Sachs. “Given China’s preference for multilateral institutions, the G20 seems a much more appropriate forum for China to make its voice heard.”

Buchanan agreed that it would be better to have a smaller group — with the United States, China and a single euro zone representative at its core — to thrash out currency policy.

“But if you want to have a discussion about the risk to global growth and you don’t include China with a proper seat at the table, that’s not too sensible,” he said.

To improve the workings of the G20, governments are debating the merits of a permanent secretariat to ease the burden on the rotating presidency, a Chinese official said.

Garcia-Herrero with BBVA said that in addition to a stronger secretariat, the G20 could call on regional and international institutions to work on various issues.

“It would become more multilateral than it was at the G7 because there are more people involved. But that doesn’t mean it won’t work,” she said. (Additional reporting by Brian Love in Paris; Editing by Ken Wills and Neil Fullick)

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Rejecting negative gearing changes is ‘cowardice’

May 4, 2010 By Leave a Comment

Federal Treasurer Wayne Swan has responded to the Henry tax review by saying Labor would never reduce the existing concessions on negative gearing and capital gains tax.

The latest official estimates show house prices jumping by 20 per cent over the past year and critics say that reinforces the need to wind back tax breaks that inflate house prices.

Former New South Wales auditor-general Tony Harris says Mr Swan’s response to the recommendation is the wrong attitude for lifting Australia into the next league.

“It doesn’t do Australia any good to have a government which when they see these rational arguments from a very well experienced team, they give it three minutes’ thought and then just ditch it,” Mr Harris said.

Treasury Secretary Ken Henry’s panel proposed an innovative solution: replacing a raft of investment tax breaks with one – a 40 per cent discount on your marginal tax rate.

It would have meant that low to middle-income earners would not pay tax on the interest they get from money in the bank.

Mr Harris says not only would that help the less well-off, it would benefit the economy.

“One of the things it does is help the banks reduce their reliance on foreign borrowings. The biggest problem Australia faces is the fact we’ve got $700 billion or $800 billion worth of net debt to overseas lenders,” he said.

“Some of that would have been replaced by Australian lenders because the Australians would have found investing in bank deposits, bank bonds and the like significantly better.”

The Henry plan would also have cut back the ability of high-income earners to avoid paying income tax by investing in loss-making property, while upping the bill on their capital gains a little.

And that, says Saul Eslake, formerly the chief economist at ANZ and now a fellow of the Grattan Institute at Melbourne University, is good policy.

“Broadly I thought these were sensible recommendations that addressed what has been glaring anomalies between the tax treatment of different forms of saving,” he said.

“Anomalies that for the most part work to the advantage of higher-income earners and to the disadvantage of those lower down the income scale.”

Mr Eslake says it is not surprising the Government rejected any change to negative gearing or capital gains tax concessions.

“I was disappointed, although I wouldn’t have expected them to have taken up such controversial recommendations immediately before an election,” he said.

“It was rather disappointing that they were put in the never-ever category rather than in the category of measures that might be on the agenda for a second term of the present government if it’s re-elected later this year.”

Disadvantaged

Housing commentator and the NSW general manager for property valuers Herron Todd White, Michael McNamara, says it makes sense to dilute the attractiveness of negative gearing.

“Negative gearing inevitably puts house prices up because what happens is you get investors competing with first homebuyers who are also being incited to enter the property market and those investors and first homebuyers compete with mums and dads in the very same property market,” he said.

“This inevitably puts pressure on property prices, disadvantaging those people in the middle which are generally regarded as your mum and dad property owners.”

Mr Swan said the Government rejected recommendations from the Henry review that did not fit with Labor values and philosophy.

Mr McNamara says subsidising the high-income earners who invest in property at the expense of low and middle-income families is a strange reflection on Labor values.

“Essentially what happens today is that taxpayers subsidise investors. We subsidise them when interest rates go up by the tune of their marginal tax rate, which might be as much as 48 cents in the dollar,” Mr McNamara said.

“It’s a regime that encourages investors to make losses which is inevitably picked up by the taxpayer.”

Then taxpayers subsidise the capital gains.

Mr Harris says the rejection of the Henry review’s recommendations on property taxes and other reforms smacks of political cowardice and ranks this Government one of the most timid and ineffective in modern times.

“I mean you contrast this with the Hawke/Keating government where they actually introduced capital gains tax and they did that knowing it might hurt a little but knowing that Australians would benefit in the long run,” he said.

“I think this Government – well it’s certainly got less courage than the Hawke/Keating. It’s got less courage than the Howard/Costello government. It probably has even less courage than the Whitlam government.

“One wonders why they’re in government if they’re not going to do anything.”

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Refs dumped but boss backs sin bin

April 21, 2010 By Leave a Comment

The Australian share market has finished higher after trading in positive territory for the entire day.

Following solid overnight gains on Wall Street, the finance sector led the way with the NAB the strongest performer of the big four banks, posting a 2.5 per cent increase to $28.83.

The All Ordinaries closed 10 points higher at 4,950 and the ASX 200 finished higher by the same amount at 4,926.

Economists say a May interest rate rise is more likely following the release of the Reserve Bank’s minutes on its April decision.

The RBA documents show a $50 billion boost to Australia’s income from rising commodities prices played a major part in the lifting of the official cash rates by a quarter of a percentage point this month.

The Reserve Bank says economic growth is forecast to return to average levels and so should interest rates.

National Australia Bank chief economist Alan Oster says that means more rate hikes are in the pipeline.

Mr Oster is expecting interest rates to be somewhere around 5.25 per cent by the end of the year.

The Association of Asia Pacific Airlines (AAPA) says airlines are losing an estimated $40 million a day from the closure of European airspace due to the Iceland volcanic eruption.

AAPA head Andrew Herdman says the group has joined a push for European authorities to urgently review air space closures with a view to reopening certain routes.

It follows the Qantas decision today to cancel flights for tomorrow and Thursday.

The International Air Transport Association has estimated the loss for global airlines at $270 million a day.

Channel Seven is on track to be the new owner of one of Australia’s biggest tractor hire company’s, Westrac.

The deal to merge the two companies, which are both controlled by billionaire businessman Kerry Stokes, was endorsed at a shareholder meeting in Sydney this morning.

The Federal Court still needs to approve the vote.

At the close of trade the Australian dollar was buying 92.90 US cents, 86.08 yen, 60.68 British pence and 68.95 euro cents.

Gold is trading at $US1,137 an ounce and a barrel of West Texas Crude oil has fallen to $US83.32.

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