Malaysia: CPI for November up 3.3%
Malaysia’s Consumer Price Index (CPI) for November 2011 rose 3.3% to 104.1 from 100.8 in the same month last year. When compared to the previous month, the CPI increased by 0.1%, the Statistics Department said in its latest release yesterday. It said that for the first 11 months of the year, CPI rose 3.2% to 103.1 compared to 99.9 in the same period last year. (Malaysian Reserve)
China: Dim sum sales to double in 2012, underwriters say
CNY bond sales in Hong Kong may double in 2012 as Chinese companies take advantage of lower borrowing costs and European issuers seek alternatives to EUR fundraising, the market’s biggest underwriters predict. So-called Dim Sum offerings may rise to CNY300bn (USD47.3bn) in 2012 from CNY150bn this year. While yields on Dim Sum debt have climbed to 5.91% on the Bank of China Offshore RMB Index, they’re lower than the 6.56% one-year benchmark lending rate and the 10% yield for BBB+ rated issuers in China. Average Dim Sum bond yields jumped almost 4 ppts this year as traders pared expectations for CNY appreciation and debt ratings companies raised “red flags” on corporate governance. (Bloomberg)
India: Bearish Rupee bets at ‘08 high as confidence ebbs
International investors are boosting bets that India’s INR will extend the worst slide since 2008 as an economic slump deepens, suggesting a lack of confidence in the central bank’s steps to curb exchange-rate volatility. Twelve-month non-deliverable forward contracts on the rupee dropped 2% this month to INR55.85/USD even as the Reserve Bank of India introduced measures to boost USD supply and curb INR sales. Forwards fell as much as 6.5% below onshore spot INR prices yesterday, the deepest discount since 2008, data compiled by Bloomberg show. (Bloomberg)
UK: Consumer confidence down
UK consumer confidence fell this month to its lowest level since the depths of the financial crisis in 2009 as pessimism about the economy increased amid continuing turmoil in the euro area, GfK NOP Ltd said. An index of sentiment dropped two points from November to -33, the weakest reading since February 2009, the London-based research group said in an e-mailed report. A measure of expectations for the economy over the next year fell eight points to -41, the lowest since January 2009. (StarBiz)
US: Shale boom heralds fifth year of gas declines
Booming US natural gas production from shale formations and slowing demand from households, factories and power plants are poised to send prices down for an unprecedented fifth year in 2012. Gas may tumble 8.2% from its 2011 average next year, as output rises 2.8% to a record 67.72bn cubic feet a day, according to the Energy Department. Demand will probably climb 1.7%, after a 1.8% increase this year, the department said in its 6 Dec Short-Term Energy Outlook. (Bloomberg)
US: Sales of existing US homes rise from deep slump
Sales of existing homes in the US rose in November to a 10-month high, showing demand may be starting to stabilize following a plunge over the past four years that was steeper than previously calculated. Purchases climbed 4% to a 4.42m annual pace, the most since January, the National Association of Realtors said yesterday in Washington. The group revised down figures going back to 2007 by an average 14%, putting them more in line with other measures of demand. (Bloomberg)
US: Mortgage bonds miss rally as Europe sales loom
US mortgage bonds that lack government backing are trading at about the lowest prices in more than a year, even as riskier assets from high-yield company bonds to stocks rally, with investors bracing for sales of home-loan debt by European banks. A set of subprime bonds tumbled to a two-year low of 28.1 cents. Banks across Europe have pledged to cut more than EUR950bn (USD1.2trn) of assets during the next two years, after regulators made them increase core capital to 9% by June instead of in 2019. (Bloomberg)
Malaysia : Maintains 5% GDP growth forecast for 2011, 2012 The government is maintaining its GDP) forecast for this year and next year at 5%, based on the strong domestic demand. The PM said that the country was still committed towards the 5% growth this year and that it was on course to achieving that. He also said that in order to ensure strong domestic demand, the government departments and ministries must achieve a very high rate of spending in terms of their development expenditure. (Bernama)
US: Faces 2013 Fitch AAA downgrade unless deficit cuts made The US’s AAA rating will probably be cut by Fitch by the end of 2013 unless lawmakers are able to formulate a plan to reduce the budget deficit after next year’s congressional and presidential elections. In order to do so, agreement will also have to be reached on raising the federal debt ceiling, which is expected to become binding in the 1H of 2013. Fitch assigned a negative outlook on the US in November after a congressional committee failed to agree on budget cuts. The rating firm forecast federal public-debt will exceed 90% of GDP by the end of the decade unless the government addresses rising health and social security spending through tax increases or reductions in expenditures. (Bloomberg)
US: Fed proposes new, tougher rules for big banks The Fed said the largest US banks and financial companies should hold extra cash on their balance sheets to cushion themselves against financial crises. The proposal by the chief US banking regulator, will affect banks with assets over $50bn in assets. There are even stricter rules for companies with over $500bn in assets such as JPMorgan Chase, Goldman Sachs and Citigroup.US banks opposed the rules citing they would be forced to hold too much extra cash, hampering their ability to make loans. (Associated Press)
EU: Banks gorge on ECB loans Banks gobbled up nearly 490bn euros in 3-year cut-price loans from the ECB, easing immediate fears of a credit crunch but leaving unresolved how much will flow to needy euro zone economies. The near half a trn euro take-up of ECB funds exceeded almost all forecasts. A total of 523 banks borrowed with demand way above the 310bn euros expected by traders polled by Reuters, making it the most the bank has ever pumped into the financial system. (Reuters)
EU: Mark Mobius sees end to Euro crisis by June Mark Mobius expects Europe's debt crisis to be resolved in the middle of next year, sparking a rise in global bourses. Mobius, who as chairman of Franklin Templeton's Emerging Markets Group oversees $50bn in investments, said investors were overstating the potential impact of the crisis. He warned, however, that the size of derivatives contracts tied to European sovereign debt offered real risks to investors. (Reuters)
UK: Moody's says Euro crisis endangers UK's top-notch rating According to Moody, Britain's top-notch debt rating is under threat from the crisis in the euro zone, and further shocks to the country's economy could derail government efforts to balance the budget. Britain's scope to absorb further fiscal shocks while retaining its stable outlook and triple-A rating have deteriorated over the past year due to weak growth. (Reuters)
Italy: GDP contracts, signaling new recession The Italian economy contracted in the third quarter, signaling the country may have entered its fifth recession since 2001 as the government adopts new austerity measures that will further weigh on growth. GDP declined 0.2% from the second quarter, when it expanded 0.3%. It was the first contraction since the final three months of 2009 and matched the median forecast in a survey of 23 economists by Bloomberg News. Consumer spending declined 0.2% from the second quarter, with investment contracting 0.6%. Exports grew 1.6% in the quarter, while imports fell 1.1%. (Bloomberg)
Hungary: May raise EU’s highest rate again as IMF pressure mounts Hungary may need to raise the EU’s highest benchmark interest rate next year as talks over a bailout stalled and the government and the central bank spar over monetary-policy independence. The Magyar Nemzeti Bank increased the two-week deposit rate by a half- point for a second month to 7% yesterday and said it would raise borrowing costs further if country risk worsens. Policy makers also considered a quarter-point increase. The European Commission and the IMF suspended talks on a financial aid package to Hungary last week, citing objections to a draft law on the central bank that they say may undermine policy autonomy. (Bloomberg)
South Korea: Overseas investors jump back into stocks after Kim’s death Foreign investors bought the most Kospi index stocks in three weeks as some fund managers overlooked possible political upheaval in North Korea to buy equities in South Korea, Asia’s cheapest major market. Overseas investors purchased a net 329.9bn won ($287m) of shares in Kospi companies yesterday, the most since Dec. 1, according to data from Korea Exchange Inc. A net 564.9bn won was sold during the previous two days, the data showed, after the death of North Korean leader Kim Jong Il sparked concerns over succession in the totalitarian nation. (Bloomberg)
China: Facing slowing growth, high prices Chinese Premier, Wen Jiabao said slowing growth and elevated prices are adding to the difficulties the government faces in helping manage the world’s second-biggest economy. He also said China will keep its export policies such as tax rebates “basically stable” next year and use fiscal spending to support “structural tax cuts” and to improve people’s lives. (Bloomberg)
Japan: November exports fall as Asia demand weakens Japan's exports fell at their fastest annual pace in 6 months in Nov as a persistently strong yen, Europe's sovereign debt crisis and a slowdown in emerging economies weighed on overseas demand.The decline in exports and a jump in imports tipped Japan's trade balance nd into a deficit of 684.7bn yen ($8.8bn), bigger than forecast and the 2 straight month in the red, finance ministry data showed on Wednesday. This casts doubt over whether Japan can achieve a solid economic recovery early next year, although the central bank is set to stand pat on policy at a rate review. (Reuters)
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