Category Archives: Asian Finances

Optimism on Asian stock markets after allegations about the agreement on US debt

Asian IndexesThe major indexes of Asian markets (Except in China) started up after US politicians have hinted that soon the Republicans and Democrats can announce that they have reached agreement on the US budget. According to some sources it will be later today. The Japanese benchmark Nikkei 225 stock average ended the session on Tuesday with a rise of 0.26% to 14 441.54 points. Hang Seng index added 0.47% to its value and reached 23 328.57 points. Australia’s S&P ASX 200 climbed 0.98% to a new two-week high – 5 259.15 points. South Korean Kospi even reaching 10 -month high after trading ended with an increase of 1.02% to 2 040.96 points. Single leading Chinese Shanghai Composite Index fell – by 0.19% to 2233.41 points. The markets in Singapore, Malaysia, Indonesia and the Philippines do not work because of holidays. Were revealed details of Monday’s talks between the leader of the Senate Democrats Harry Reid and his Republican counterpart Mitch McConnell. According to the information they have agreed to a short-term increase in the debt ceiling, which will announce Tuesday. The deal will put an end to the blockade of the government and will increase the debt by as much as necessary for the country to meet its obligations until mid- February 2014. The Japanese Nikkei rose thanks to Sony and Panasonic, whose shares rose by 1% and 0.6%. Shares of Fuji Heavy Industries have added 0.7% to its value after the automaker announced a growth of 250% in the operating profit of the group for the second quarter of 2013.

Asian markets continue to collapse

Asia financesMost Asian equity markets consolidate its negative trend on Wednesday amid growing fears of a coming war in the Middle East. Selling affected most sensitive peripheral markets in the region, which influenced negatively the currencies of emerging economies. Philippine index PSEi lost 3.02% after the retreat of nearly 4 percent in the previous session. In Indonesia JSX Composite lower it to 1.48 percent, heading for its fifth straight day of losses. Thai SET is down by 1.3% and the Sensex in India lost 0.52 percent and the rupee reached a new low against the U.S. dollar. The data for these markets to date 30 minutes before closing.
“We expect the authorities in India and Indonesia, where current account deficits already sent currencies considerable panic at the prospect of thinning stimulus from the Fed to be challenged to keep the pressure under control today”, said Tim Condon, an economist at Singapore-based unit of ING Financial Markets Research.
Among the developed markets in the region in Japan Nikkei Stock Average ended the day with a decline of 1.5%. Hong Kong’s Hang Seng index lost 1.63 percent just before the end of the session after the retreat in afternoon trading. In Australia, the S&P/ASX 200 hand finished 1.1% down.

Pessimism on the Asian markets

Asia financesThe leading stock markets in Asia stepped back during the session on Wednesday, led by investor caution before publication of the report of the last meeting of the Federal Reserve in July. Document is expected to give further guidance on the future of monetary incentives to US Bank. The growth rates among major regional indexes were observed only in Japan and Australia. Nikkei added 0.2 percent, while the S&P / ASX 200 ended the session with a rise of 0.4%. Wider Japanese benchmark Topix however fell 0.3%. The Hong Kong’s Hang Seng lost 0.7%, while South Korea’s Kospi slid 1.1%.
“Markets are preparing for the possibility of the Fed to launch a thinning of the incentives at its next meeting in September. Nevertheless, today’s report likely to give clear signals in this direction is very small”, said Ric Spooner, chief market analyst at CMC Markets. The minutes of the meeting of the Federal Open Market Committee (FOMC) in July is expected to be presented at 21:00 CET today. Meanwhile, China’s Shanghai Composite ended with a slight increase of 0.02 percent. Shortly before the end of the session in Indonesia JSX does climbed 1.3%.
The Indonesian benchmark retreated in the last four sessions, after rising yields on US government bonds and weak recent local economic data reinforced concerns about possible capital flight from the country.

Asian markets retreated after the weak data on US employment

Asia financesThe Japanese stock markets retreated on Monday after declines in some of the key financial and technology companies in the region. The benchmark Nikkei Stock Average fell 1.4% in Tokyo after rising in the previous two sessions, while Australia’s S&P/ASX 200 fell slightly by 0.1%. South Korea’s Kospi index, in turn, slid 0.4%. The declines came as a result of weaker than expected data on employment outside the agricultural sector in USA in July. However, US stock indexes Dow Jones and Standard & Poor’s 500 reached a new historical record in Friday’s session.
“The data on employment in USA in July were supported by the decline in hourly wages and shorter working week, which actually gave even more negative signal”, said currency analyst at Brown Brothers Harriman Mark Chandler.
The Chinese Shanghai Composite Index rose 1%, while Hong Kong’s Hang Seng added 0.1 percent minimum. Earlier in the day it became clear that China’s service sector has expanded slightly in July, according to research by the British bank HSBC. Experts saw this as a sign that growth in the sector has stabilized. The services sector has a share of nearly 43% in the Chinese economy. Calculated by HSBC index of business activity outside the manufacturing sector in China has remained unchanged in July at a level of 51.3 points. Index above 50 shows expansion of the activity. The data HSBC’s latest government estimates, published late last week, which showed an increase to 54.1 points from 53.9 points in June.

Optimism in USA infected the Asian markets

USA financesThe optimism, which covered the United States after the publication of the GDP data for the largest economy in the world for the second quarter infect Asian stock markets on Thursday. The Chinese benchmark Shanghai Composite jumped 1.8%, while Hong Kong’s Hang Seng rose 0.9%. The growth came after the official China PMI index unexpectedly rose to 50.3 points in July to 50.1 points in June. All values ‚Äč‚Äčabove 50 indicate improvement in business conditions. The official government data differ from earlier results by HSBC, which showed a drop to 47.7 points, reaching 11-month low.
“The growth in the official China PMI index did not come out of the blue. Official data give greater weight to heavy industry where there was a twist in the last few months”, commented in a note to clients of Capital Economics. “The demand for investment remains strong, as the government encouraged industrialization and urbanization”, said Sue Shaosha on Wednesday, the head of the National Commission for Development and Reform Commission, said in a statement on the website of the department. “We are confident that we have the conditions and ability to achieve projected annual growth of around 7.5%”, said he.

Asian indices started looking for direction after the negative data from China

Asian indexes 2012The stock markets in China reported volatile session on Wednesday amid weaker than expected data on manufacturing activity in the country dropped to 11-month low. Rise of the JPY against the USD even had a negative effect on Japanese equities. Shanghai Composite index fell 0.5%, after preparation by Markit and HSBC PMI index for the manufacturing sector in China recorded a decline to 47.7 points in July to 48.2 points a month earlier. Hong Kong’s Hang Seng rose again by 0.3% after volatile afternoon trade. Both markets started trading on Wednesday with declines amid expectations that Chinese authorities are likely to intervene in support of the economy. The state media reported earlier this week that Beijing will not tolerate growth below 7 percent.
“In view of the slowdown of economic activity we expect more signals from different government agencies over the coming weeks to support growth”, said Chang Jian, chief economist at Barclays in China. The shares of Shares of China Minsheng Banking Corp. lost 2%, Jiangxi Copper Co decreased by 4.4%, while Poly Real Estate Group Co lost 3.1% in Shanghai. Meanwhile, the Japanese Nikkei 225 fell 0.3% after two consecutive sessions of growth. In Taiwan’s benchmark Taiex fell 0.2%, Australia’s S&P/ASX 200 and South Korean Kospi added 0.4% each.

Japanese stock markets reacted poorly to the victory of Abe

Abe JapanThe major Japanese stock indexes reported slight changes in today’s session after Prime Minister Shinzo Abe received a vote of confidence in its economic policy, known as “Abenomika”. Justifying mass estimates, led by Abe’s Liberal Democratic Party won a majority in the upper house of parliament in Sunday’s election, according to preliminary results. Once in early trade advanced 1.2%, the benchmark Nikkei 225 stock average sank profit to 0.5%. The analysts attribute this development of the stock market likely victory of the ruling party had already been calculated in the share price and trading strategies. Since he assumed the premiership at the end of last year, Abe made policies to overcome deflation in Japan and to accelerate growth.
“We have won public support for a strong and stable policy so that you are able to pursue its economic goals and will ensure that we fulfill the expectations”, said Abe to Japanese public broadcaster NHK, after the media announced that the Liberal and coalition their partner have won the required majority. The analysts note that Abe can now start implementing painful economic reforms relating to the “third dart” of planned policies, the first two are weak monetary policy and government spending.

Green start for the Asian indices

Asian marketsMost Asian markets continued their upward trend on Monday, led by growth in the leading indexes Japanese amid a dramatic slide in the yen against the USD. The regional markets overcame initial hesitation in early trading to take only up to the end of the session on Monday. Development is against the optimistic sentiment among investors about upcoming decisions of the Federal Reserve in USA later this week, especially with regard to the monthly rate of purchases of bonds.
“The most likely outcome is the Fed confirmed that unemployment remains high, several key indicators continue to fluctuate, but the US economy has not entered into rhythm. This will force central bankers to keep the incentive program, the tendency to see decrease after three to four months”, said IG Markets analyst Evan Lukas.
After a shaky start the main Japanese Nikkei 225 index ended the session with a growth of 2.73%. The Friday’s session went back to the green area indicator, which expanded by 1.9% after three consecutive days of declines. The broader Topix index, in turn, moved up 2.1%. In other Asian markets, Hong Kong Hang Seng Index climbed 1.2%, while Taiwan Taiex added 0.69% to its value. The benchmark Australian S&P/ASX 200 does advanced 0.71%.

Huge government spending creates debt problems to China

ChinaWhile the economic power of China grows, its trading partners in USA, Europe and Asia are breathless. Tensions about growth and internal imbalances of the economy forced Chinese leaders to review pursued thus far otherwise successful economic model. The new plan for the second largest economy in the world is now available. It will aim to transform the relations of China with the United States and the world. The new leadership led by President His Jinping and Premier Li Keqiang will run in the next 10 years. Reforms if they are successful, they will transform the model of state capitalism in China in a way that can provide them with a level playing field with trading partners such as USA.
“The private sector will be revived only if you have better protection of intellectual property”, said Nicholas Larti, senior fellow at the Peterson Institute for International Economics. “Definitely one of the things that depress the economy in the private sector is the lack of intellectual property protection”. Over the past three decades technocratic government has invested heavily in coastal factories, modern cities, transport and shipping. This has resulted in exports and by artificially reduced purchasing power of the Chinese currency. Due to the huge trade surpluses Beijing accumulate significant reserves of foreign currency.

Sharp decrease in the Istanbul stock exchange because of the protests

BIST declineThe Istanbul Stock Exchange Borsa Istanbul (BIST) began the first week of June with a sharp drop as investors reacted negatively to the several protests against some of the policies of the central government led by Recep Tayyip Erdogan. The index Borsa Istanbul National 100 index fell by 6.43% to 79,047 points from 80,463 points on Friday. Turkish currency in turn retreated to 1.891 liras against the USD, reaching close to 18-month low against the USD. The sharp decline reflected the most sensitive index of banking in the country, which at the opening on Monday fell by 7.53%. Despite the slight increase in consequence indicator still remained in the red with 4.8%. Banking stocks, which suffered the greatest shock were those of private Garanti Bank and state Halkbank, which fell by 5.15 and 4.23 per cent.
“Panic on the market causes irrational pricing. Domestic and foreign investors who do not want to take unnecessary risks tend to sell their existing assets immediately”, told the head of the Istanbul Stock Exchange. The protests in Istanbul, which entered today in its seventh day continued with the use by police of tear gas against demonstrators, the main clashes took place in Istanbul’s Besiktas. Many civilians and students headed to their jobs and schools were affected by the actions of the police, communications agency Xinhua.