Seoul, South Korea (CNN) -- South Korea's financial watchdog has pledged to supply liquidity and buy back bad property loans to try and calm the market after six savings banks had their operations suspended in recent days.
Spain: 'Cajas' have EUR 100b of 'problematic' assets. The total exposure of Spanish savings banks to real estate and building amounts to EUR 217b (USD 297b), of which EUR 100b is classed as "potentially problematic," the Bank of Spain said. The banks, known as Cajas, had covered 100 percent of actual losses connected to the industry with provisions and of the "potentially problematic" assets, 38 percent is covered, Bank of Spain Governor Miguel Angel Fernandez Ordonez said in Madrid. (Source: Bloomberg)
Japan: Raised its assessment of the economy for a second straight month as exports and industrial production spur growth in a nation coming out of a contraction in the fourth quarter. The economy is "emerging from a recent pause in activity," the Cabinet Office said in a monthly report in Tokyo. The recovery will continue as overseas nations expand, the statement said. (Source: Bloomberg)
India: Bonds are rebounding with the second-best performance in Asia so far this month as the government signals it will raise taxes and narrow the budget deficit in the coming year. Investors in rupee notes earned 0.6%, the biggest gain after rupiah debt, while Philippine securities lost 1.2%, the most in the region, indexes compiled by HSBC Holdings Plc show. The yield on India's benchmark bonds has dropped 13 basis points from an eight-month high of 8.23% on Jan. 17. Montek Singh Ahluwalia, the prime minister's top economic adviser, said this week India will withdraw the fiscal stimulus injected during the global financial crisis as the economy expands. (Source: Bloomberg)
Vietnam: To raise power prices, risking faster inflation. Vietnam will increase average electricity prices by 15.3% starting March 1, putting pressure on inflation to accelerate from a 23-month high. The tariffs will rise to VND 1,242 (6 cents) per kilowatt-hour from VND1,077, Hoang Quoc Vuong, deputy minister of trade and industry, confirmed in a mobile-phone text message to Bloomberg News. (Source: Bloomberg)
Malaysia: Bank Negara expects GDP to grow 5% to 6%
Malaysia is expected to meet its target GDP growth of 5% to 6% this year, following a 7.2% growth in 2010. Bank Negara had forecasted a 4.5% to 5.5% growth for 2010. Bank Negara governor Tan Sri Dr Zeti Akhtar Aziz gave no indication if interest rates will be raised in the near future. She said that an important part of the economic recovery is the strong recovery in private investment as capacity utilization increases and as the dynamic nature of Malaysia’s economy presents new investment opportunities in new growth areas. (Financial Daily)
Thailand: Economy grew 1.2% last quarter
Thailand’s economy strengthened in the fourth quarter on exports and consumer spending, capping the fastest annual expansion in 15 years. GDP rose 1.2% q-o-q, compared with a revised 0.3% decline in the third quarter, which reflected a mid-2010 slump stemming from political unrest and flooding. Economists expected a 0.9% gain. The expansion slowed to 3.8% y-o-y from a revised 6.6% y-o-y advance in the third quarter. Private consumption rose 3.8% y-o-y, manufacturing expanded 4.8% and total investment advanced 6.4%. Exports climbed 22.3% in January y-o-y. For the full year, the economy grew 7.8% in 2010. (Bloomberg)
Hong Kong: Unemployment rate falls to 3.8%
Hong Kong’s unemployment rate fell to its lowest level in more than two years, helping bolster spending and economic growth in the city. The jobless rate for the three months through January was 3.8%, lower than the forecasted 4% and the lowest level since November 2008. Hong Kong’s GDP expanded at an annual pace of 6.8% pace in the third quarter and officials estimate 2010 full-year growth may be 6.5%. (Bloomberg)
Middle East: Bahrain, Libya gets debt rating cut
Bahrain and Libya’s sovereign credit ratings were cut as the two Arab countries struggle to contain antigovernment protests. Bahrain’s long-term rating was reduced by one level to A- and the short-term rating lowered to A-2 at S&P’s Ratings. Libya’s long-term foreign and local currency issuer default rating was cut to BBB from BBB+ at Fitch Ratings. S&P expects demonstrations in Manama, Bahrain to persist and placed the country’s debt on “creditwatch with negative implications,” meaning it may be lowered again.(Bloomberg)
EU: German business confidence unexpected rises
German business confidence unexpectedly rose to a fresh record high in February as booming exports spurred hiring and consumer spending. The business climate index increased to 111.2 from 110.3 in January. That’s the highest since records for a reunified Germany began in 1991. The German government expects Europe’s largest economy to expand 2.3% this year after record growth of 3.6% in 2010. (Bloomberg)
EU: Services, manufacturing expand most in four years
Growth in Europe’s services and manufacturing industries accelerated to the fastest pace in more than four years in February, led by stronger output in Germany. A composite index based on a survey of euro-area purchasing managers rose to 58.4 in February from 57 in January, above the median forecast of 56.9. The euro area’s manufacturing gauge rose to 59 in February from 57.3 while the services indicator increased to 57.2 from 55.9. Germany’s manufacturing index increased to 62.6 from 60.5 while its services gauge slipped to 59.5 from 60.3. (Bloomberg)
G-20: China fights against West's economic formula. China led resistance to making bulging foreign-exchange reserves a measure of economic imbalances as Group of 20 finance officials struggled for consensus on realigning the skewed world economy. Sparring over early warning indicators reflected the split among fast-growing emerging countries and debt-laden advanced economies over how to prevent a repeat of the harshest recession since World War II. (Source: Bloomberg)
U.S: House approves Republicans' USD 61b in spending cuts, setting up a budget confrontation with Democrats that threatens a government shutdown. Members adopted changes that will make agreement with the Senate difficult, including a ban on funds for President Barack Obama's health-care overhaul and for Planned Parenthood, which provides abortions. The measure would block regulations on greenhouse-gas emissions, for-profit colleges and the Federal Communications Commission's "net neutrality" Internet rules. (Source: Bloomberg)
U.K: Retail sales rose almost four times as much as forecast in January as consumer spending rebounded after the coldest December in a century. Sales gained 1.9% MoM, when they fell a revised 1.4% MoM as snow and freezing temperatures kept Britons from shopping, the Office for National Statistics said. From a year earlier, sales increased 5.3% YoY.(Source: Bloomberg)
China: Leading economic indicator in December fell for the first time since 2008, highlighting the risk that monetary tightening may trigger a slowdown in the fastest- growing major economy. The index slid 0.5% to 154.3 in December from November, The Conference Board, a New York-based research organization, said on its website, citing preliminary data. (Source: Bloomberg)
China: Tells Banks to set aside bigger reserves to cool inflation. China's central bank ordered lenders to set aside more money as reserves for the second time this year, draining cash from the financial system to restrain inflation and limit the risk of asset bubbles. Reserve ratios will climb half a percentage point effective Feb. 24, the People's Bank of China said in an announcement made 10 days after an interest-rate increase. (Source: Bloomberg)
Singapore: To spend SGD 6.6b as elections loom. The government will hand cash to all adult citizens as a "dividend" from record growth, upgrade homes and invest in improving productivity, Finance Minister Tharman Shanmugaratnam said in the city state's budget speech. Companies will be required to increase contributions into employees' pension funds and pay more to hire foreign workers, he said. (Source: Bloomberg)
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