While most economies across the board will experience growth moderation due to the prevailing uncertain global financial landscape, their strong domestic economies are expected to mitigate the drop, said Bank Negara Malaysia Governor Tan Sri Dr Zeti Akhtar Aziz. Domestic economic activities have remained strong in emerging economies, including Malaysia which is buoyed by the restructuring and economic transformation as well as the strengthening of its regional trade and investment activities, she said.
"We have a resilient financial sector that is still providing credit. Other macro economy fundamentals are low unemployment and we are not over leveraged," she added. Meanwhile, on the new blueprint for the financial sector, Zeti said it would be unveiled next month by PM Datuk Seri Najib Tun Razak. The blueprint will set the course for the development of the Malaysian financial sector from 2011 to 2020. (Bernama)
Inflation in Malaysia has peaked and stabilised although there is still food inflation which has to be addressed by other measures besides interest rates, Bank Negara Malaysia Governor Tan Sri Zeti Akhtar Aziz said Tuesday. She said there would always be risks on the horizon for both inflation and growth as Malaysia was such an open economy. “If there is a sudden shortage of commodities or energy as we saw earlier, this causes energy and commodity prices to rise sharply and if they do, it will affect our rate of inflation. Or if there are disruptions in supply of food, it will cause food prices to rise. So there is always a risk of higher inflation,” she said. “Given the on-going financial crisis, if it were to deteriorate beyond the current circumstances, yes it is going to be a risk to our growth," she said. On another note, Zeti said Malaysia already has a resolution framework in place should conventional or Islamic financial institutions in the country, including foreign banks, come under stress. “Islamic finance is insulated by the first-round effect because it is more resilient. It is totally linked to the real economy and there are built-in checks and balances in profit- sharing, therefore more responsible lending. But of course, if companies slow down and financial markets get corrected, this will affect financial institutions,” she noted. (Bernama, BT)
Malaysia's bilateral trade with the South Korea amounted to RM36.91bn with exports valued at RM19.25bn and imports RM17.65bn for Jan to Sep this year. International Trade and Industry Ministry's senior director of Economic and Trade Relations Division, Wong Seng Foo, said Korea continues to be one of Malaysia's main sources of foreign direct investment since 1980. To date, a total of 296 projects have been implemented with total investment of US$2.72bn, he said. (Bernama)
The increased focus on financial stability, especially fundamental changes in the regulatory environment, is the central aspect of the new Islamic financial landscape in an increasingly more challenging environment, Bank Negara Malaysia Governor Tan Sri Dr Zeti Akhtar Aziz said yesterday. These include changes to institutional arrangements for oversight of the financial system -- both at the international level and within national borders in a number of countries. The two institutional arrangements, the Islamic Financial Services Board (IFSB) and the International Islamic Liquidity Management Corporation (IILM), were established for overall stability of the global financial system in a way that better serves households and businesses. (Bernama)
China: Central bank sells bills at lower rate for second week
China’s central bank sold one-year bills at a lower rate for a second week, pushing government bond yields lower on speculation policy makers will keep pumping cash into the economy. The People’s Bank of China issued the bills at 3.49%, beneath its benchmark deposit rate for the first time since January and compared with 3.57% at a 8 Nov sale, according to a trader at a primary dealer required to bid at the auctions. The monetary authority yesterday issued CNY52bn (USD8.2bn) of the securities, the most in six months. (Bloomberg)
Indonesia: Bank Indonesia cuts GDP forecasts as global slowdown hurts Asia
Indonesia’s central bank cut growth forecasts for Southeast Asia’s largest economy, adding to signs Europe’s debt crisis is hurting expansion in Asian nations from the Philippines to Singapore. Bank Indonesia lowered its 2012 economic growth forecast to 6.5% from a previous estimate of 6.7%, Perry Warjiyo, director of economic research and monetary policy, said in Jakarta. The bank cut its fourth-quarter forecast to 6.6% from 6.7%, he said. Indonesia led Asian economies in cutting interest rates last month while the government has said it is preparing a fiscal stimulus package that may be implemented in the first half of 2012. (Bloomberg)
New Zealand: English says Asia-Pacific exports ‘critical’ to economy
New Zealand’s exports to Asia Pacific nations will be “critical” to rebalancing the nation’s economy away from consumption and debt as bigger free-trade blocs emerge, Deputy Prime Minister Bill English said. English, also the finance minister, is relying on exports to fan an economic recovery that has been hurt by a slump in spending and confidence after devastating earthquakes that struck Christchurch, New Zealand’s second-biggest city. The country faces a NZD20bn repair bill and expects rebuilding to stoke expansion from 2012. (Bloomberg)
UK: Inflation may have slowed ahead of King forecast cut
UK inflation probably eased from a three-year high in October and may slow further as Europe’s debt crisis depresses the economic outlook. Inflation slowed to 5.1% from 5.2% in September, according to the median estimate of 33 economists in a Bloomberg News survey. Because the rate exceeds the government’s 3% upper limit, Bank of England Governor Mervyn King will be required to write a letter of explanation to Chancellor of the Exchequer George Osborne. The Bank of England is in the second of a four-month program of bond purchases aimed at supporting the recovery. (Bloomberg)
E.U: Italian yields reach 7%, French debt slides as bond rout deepens. Italian bonds led a slump in euro-area government debt as investors abandoned all but the safest assets amid rising borrowing costs at auctions and concern the region's financial woes are deteriorating. German two-year rates dropped below 0.3% for the first time, while the extra yield investors demand to hold 10-year bonds from France, Belgium, Spain and Austria instead of bunds all increased to euro-era records. (Source: Bloomberg)
Germany: Investor sentiment fell to three-year low in November on concern the sovereign debt crisis will push Europe's largest economy into recession. The ZEW Center for European Economic Research in Mannheim, Germany, said its index of investor and analyst expectations, which aims to predict developments six months in advance, declined to minus 55.2 from minus 48.3 in October. (Source: Bloomberg)
Spain: Underlying inflation rate was unchanged in October as the economy stalled and unemployment surged. Core consumer prices, which exclude energy and fresh food, gained 1.7% YoY, the same as in September, the National Statistics Institute in Madrid said. Headline inflation, based on European Union calculations, held at 3.0% YoY. (Source: Bloomberg)
Italy: Monti says he’s confident Italy can overcome current crisis
Mario Monti, Italy’s prime minister designate, said he is “convinced” the country can overcome the current crisis as he prepares to meet with President Giorgio Napolitano tomorrow to present his new government. Two days of talks seeking support from political parties, unions and employers were “intense and useful,” Monti said at a briefing in Rome. The former European Union Competition Commissioner has been under pressure to announce his new team, with the yield on Italy’s 10-year bond exceeding the 7% threshold yesterday. (Bloomberg)
US: Sales rise more than forecast, driving growth
Retail sales rose more than projected in October as American shoppers gave the economy a boost at the start of the fourth quarter. The 0.5% gain, helped by the biggest jump in electronics purchases in two years, followed a 1.1% increase for September, Commerce Department figures showed in Washington. The median forecast of 81 economists surveyed by Bloomberg News called for a rise of 0.3%. Stocks rose, propelled by technology shares, as the sales figures and separate figures showing New York-area manufacturing expanded in November for the first time in six months tempered concern about Europe’s debt crisis. (Bloomberg)
U.S: Wholesale prices declined 0.3% MoM as the cost of energy and automobiles decreased, pointing to waning inflation. The so-called core measure, which excludes volatile food and energy, was unchanged, marking the first time without an increase since November 2010. (Source: Bloomberg)
Wednesday, November 16, 2011
20111116 0948 Global Market Related News.
Asian Stocks Swing Between Gains, Losses Amid Europe Concern (Source: Bloomberg)
Asian stocks swung between gains and losses as U.S. retail sales beat estimates while Italian bond yields rose amid concern Italy’s new government will struggle to trim its debt and prevent Europe’s crisis from spreading. Sony Corp. (6758), Japan’s No. 1 exporter of consumer electronics, fell 1.3 percent. Hyundai Motor Co. (005380), South Korea’s biggest carmaker by market value, rose 0.9 percent. BHP Billiton Ltd. (BHP), the Australian oil producer, rose 0.9 percent after oil approached $100 a barrel. The MSCI Asia Pacific Index slipped 0.2 percent to 117.51 as of 9:20 a.m. in Tokyo, after swinging between gains and losses at least six times. The measure fell 0.9 percent yesterday.
“The U.S. seems to be back on the recovery path, which is very helpful because it’s the biggest economy in the world and it fixes sentiment in a big way,” said Prasad Patkar, who helps manage about $1 billion at Platypus Asset Management Ltd. in Sydney. “Investors around the world would be happy if Europe doesn’t export its toxicity.”
U.S. Stocks Rise on Italy Optimism as Retail Sales Top Estimates (Source: Bloomberg)
U.S. stocks rose, rebounding from earlier losses, on speculation Italian Prime Minister designate Mario Monti will succeed in forming a new government to battle the debt crisis and after growth in retail sales beat estimates. Technology and industrial shares had the biggest gains among 10 groups in the Standard & Poor’s 500 Index, rising at least 0.5 percent. Intel Corp. (INTC) spurred a rally in semiconductor companies, climbing 2.9 percent, after Warren Buffett’s Berkshire Hathaway Inc. said it invested in the world’s largest chipmaker. Wal-Mart Stores Inc. (WMT) slumped 2.4 percent as profit at the world’s biggest retailer trailed analysts’ forecasts. The S&P 500 gained 0.5 percent to 1,257.81 at 4 p.m. New York time, rebounding from a loss of 0.6 percent. The Dow Jones Industrial Average advanced 17.18 points, or 0.1 percent, to 12,096.16. About 6.3 billion shares changed hands on U.S. exchanges, 24 percent below the three-month average.
European Stocks Drop as Monti Struggles to Win Backing in Italy (Source: Bloomberg)
European stocks declined as Italy’s premier in waiting Mario Monti struggled to get political parties to help form his new Cabinet and the country’s biggest defense company forecast an unexpected loss. Finmeccanica SpA (FNC) sank 20 percent, saying it will sell 1 billion euros ($1.4 billion) in assets after predicting a loss for this year. UniCredit SpA (UCG) slid 4.5 percent as banks posted one of the worst performances of the 19 industry groups in the Stoxx Europe 600 Index. Cable & Wireless Worldwide Plc (CW/) plunged 26 percent as the company suspended future dividend payments and named a new chief executive officer. The benchmark Stoxx 600 fell 0.6 percent to 237.03 at the close of trading. The gauge has declined 19 percent from this year’s high on Feb. 17 as policy makers struggle to contain a debt crisis that has Greece on the edge of a default.
Japanese Stocks Swing Between Gains, Losses on Europe, BOJ (Source: Bloomberg)
Japanese stocks swung between gains and losses ahead of the Bank of Japan’s monetary policy decision today, and amid concern Italy’s new government will struggle to secure enough support to ease Europe’s debt crisis. The Nikkei 225 (NKY) Stock Average rose 0.1 percent to 8,550.45 as of 9:06 a.m. in Tokyo, after declining as much as 0.1 percent. The broader Topix index slipped 0.1 percent to 730.45, with about six stocks falling for every five that advanced.
Electronics Boost U.S. Retail Sales (Source: Bloomberg)
Retail sales rose more than projected in October as American shoppers gave the economy a boost at the start of the fourth quarter. The 0.5 percent gain, helped by the biggest jump in electronics purchases in two years, followed a 1.1 percent increase for September, Commerce Department figures showed today in Washington. The median forecast of 81 economists surveyed by Bloomberg News called for a rise of 0.3 percent. “Another recession is pretty unlikely,” said Samuel Coffin, an economist at UBS Securities in Stamford, Connecticut, who correctly predicted the gain in retail sales. The report “suggests a very strong start to the quarter. We’ll continue expanding at a better pace.”
Democratic Lawmakers Said to Consider $800 Billion in New U.S. Tax Revenue (Source: Bloomberg)
Democrats on Congress’s supercommittee are weighing whether to reduce to about $800 billion their demand for new tax revenue as part of a deficit- reduction agreement, according to a Democratic aide. Last week, Democrats proposed a plan that would include $1 trillion in new revenue, $1 trillion in spending cuts and $300 billion from interest savings. A second Democratic aide said the spending cuts in any new proposal also would be smaller, without giving an amount. Both aides weren’t authorized to speak publicly. Republicans offered a plan for $300 billion in tax increases, which some lawmakers hailed as a breakthrough demonstrating new Republican support for tax increases. After Democrats rejected the plan, talks have been in a stalemate as Republicans called on Democrats to make a counteroffer.
Fed’s Evans Calls For More Economic Stimulus Steps to Address Unemployment (Source: Bloomberg)
Federal Reserve Bank of Chicago President Charles Evans said he is calling for “increasing amounts of policy accommodation” to reduce a 9 percent unemployment rate that’s far above the Fed’s objectives. “We ought to be behaving as if there’s a very big problem out there,” Evans said in New York today at the Council on Foreign Relations. Evans, 53, voted against the Federal Open Market Committee’s November decision to maintain its level of stimulus, casting the U.S. central bank’s first dissent in favor of further easing since December 2007. He said today that his position is “unusual” among policy makers. “I’m finding myself sufficiently outside” of the “consensus that I thought I had to publicize that,” Evans said. His vote contrasted with those by three of his colleagues. Dallas Fed President Richard Fisher, Charles Plosser of Philadelphia and Narayana Kocherlakota of Minneapolis earlier this year dissented against further easing in August and September.
Wholesale Prices in U.S. Declined by Most in Four Months, Core Unchanged (Source: Bloomberg)
Prices paid to U.S. wholesalers fell in October by the most in four months as the cost of energy and automobiles decreased, pointing to waning inflation. The producer price index declined a more-than-projected 0.3 percent after a 0.8 percent gain in September, Labor Department figures showed today in Washington. Economists forecast a 0.1 percent decrease, according to the median of 74 estimates in a Bloomberg News survey. The so-called core measure, which excludes volatile food and energy, was unchanged, marking the first time without an increase since November 2010. The report showed cheaper raw materials and partially finished goods, indicating companies are under less pressure to raise prices. Cooling inflation gives Federal Reserve policy makers more room to spur the recovery should the world’s largest economy falter.
Goldman’s Blankfein: Growth to ‘Snap Back’ (Source: Bloomberg)
Goldman Sachs Group Inc. (GS), the fifth- biggest U.S. bank, is preparing for a faster global economic rebound than most forecasters expect, Chairman and Chief Executive Officer Lloyd C. Blankfein said. “I don’t think that we can conclude that this slowdown is secular rather than cyclical change,” Blankfein, 57, said today at an investor conference in New York hosted by Bank of America Corp. (BAC)’s Merrill Lynch unit. “The world will snap back and it will be a surprise and it will be faster than people think. I don’t know when that will be and we will gear ourselves accordingly.” Goldman Sachs, which was the most profitable securities firm in Wall Street history before converting to a bank in 2008, last month reported its second quarterly loss in 12 years as a publicly traded company. The stock dropped 41 percent this year through yesterday to $99.29, below the company’s $120.41 tangible book value per share at the end of September.
Treasuries Hold Gain on Speculation Report to Show Cooling Consumer Prices (Source: Bloomberg)
Treasuries held gains from yesterday before a government report that economists said will show the cost of living in the U.S. stopped rising for the first time in four months, adding to signs inflation is cooling. The difference between yields on 10-year notes and Treasury Inflation Protected Securities, a gauge of trader expectations for consumer prices over the life of the debt, has narrowed to 2.03 percentage points from a 2011 high of 2.67 percentage points in April. The 12-month average is 2.26 percentage points. “Demand is very soft in the U.S.,” said Zeal Yin, a money manager at Taipei-based Shin Kong Life Insurance Co., Taiwan’s second-largest life insurer with the equivalent of $39.7 billion in assets. “A moderate slowdown in inflation was within expectations. It’s good for Treasuries.”
Temasek in Talks With BofA to Buy CCB Shares (Source: Bloomberg)
Temasek Holdings Pte., Singapore’s state-owned investment company, is in talks to buy shares of China Construction Bank Corp. (939) that Bank of America Corp. (BAC) is selling, a person with knowledge of the matter said. Bank of America will sell 10.4 billion shares this month in private transactions for a profit of about $1.8 billion, leaving the second-biggest U.S. lender with a 1 percent stake in Construction Bank, according to a statement Nov. 14. Charlotte, North Carolina-based Bank of America said the buyers were a group of investors, without providing names. Stephen Forshaw, a spokesman for Temasek, declined to comment on “market speculation.” Mark Tsang, a Bank of America spokesman in Hong Kong, had no comment.
Temasek bought shares in the Beijing-based lender in September for as much as HK$21.7 billion ($2.8 billion), about eight weeks after paring its holdings.
Euro Falls as Spain, France Prepare Bond Sales (Source: Bloomberg)
The euro declined for a third day against the dollar as Spain and France prepare to sell notes tomorrow after Italy led a slump in euro-area debt. The 17-nation currency was 0.2 percent from a one-month low versus the yen after the extra yield investors demand to hold bonds from France, Belgium, Spain and Austria instead of German bunds climbed to euro-era records on concern the region’s debt crisis is spreading. The dollar rose against the majority of its most-traded peers as investors sought safer assets. “France, Spain, they’re all seeing yields move out so you get the impression that we’re at some sort of juncture where banks, investors and corporations are starting to prepare for the worst-case outcome,” said Greg Gibbs, a currency strategist at Royal Bank of Scotland Group Plc in Sydney. “The euro will remain under pressure.”
Monti Confident Italy Can Overcome Crisis as He Prepares Cabinet Unveiling (Source: Bloomberg)
Italian Prime Minister-designate Mario Monti will announce his new government today as he strives to convince investors he can trim Europe’s second-biggest debt and fend off contagion from the euro-area sovereign crisis. Monti concluded two days of talks with political leaders yesterday in a bid to gain broad support for a Cabinet tasked with pushing through an overhaul of the currency region’s third- biggest economy. “Tomorrow morning I’ll be able to present a synthesis of this work” to President Giorgio Napolitano, the former European Union commissioner said last night in Rome. Monti, 68, is due to meet with Napolitano at 11 a.m. to officially accept the post and possibly present his ministers. He said his consultations with parties, unions and employers have left him “convinced” that Italy can overcome the crisis.
No Stopping Technocrats Rule as Debt Crisis Brings Down Europe Governments (Source: Bloomberg)
The European debt crisis has toppled four elected governments with the last two, in Greece and Italy, falling last week without a shove from voters. The appointment of prime ministers in Athens and Rome to push through unpopular austerity measures echoes efforts in the past five decades by European leaders to control policy-making when democratic means fall short. “The euro zone would never have been created if voters had been given a say,” Fredrik Erixon, head of the European Centre for International Political Economy in Brussels, said in a telephone interview. “It’s an elite project but that doesn’t mean it’s a bad project.” Greek Prime Minister Lucas Papademos, a former central banker, and Italian Prime Minister-designate Mario Monti, an academic and former European commissioner, were chosen by each nation’s president after their elected predecessors were abandoned by political allies, making them unable to pass legislation demanded by the other members of the euro region.
Asian stocks swung between gains and losses as U.S. retail sales beat estimates while Italian bond yields rose amid concern Italy’s new government will struggle to trim its debt and prevent Europe’s crisis from spreading. Sony Corp. (6758), Japan’s No. 1 exporter of consumer electronics, fell 1.3 percent. Hyundai Motor Co. (005380), South Korea’s biggest carmaker by market value, rose 0.9 percent. BHP Billiton Ltd. (BHP), the Australian oil producer, rose 0.9 percent after oil approached $100 a barrel. The MSCI Asia Pacific Index slipped 0.2 percent to 117.51 as of 9:20 a.m. in Tokyo, after swinging between gains and losses at least six times. The measure fell 0.9 percent yesterday.
“The U.S. seems to be back on the recovery path, which is very helpful because it’s the biggest economy in the world and it fixes sentiment in a big way,” said Prasad Patkar, who helps manage about $1 billion at Platypus Asset Management Ltd. in Sydney. “Investors around the world would be happy if Europe doesn’t export its toxicity.”
U.S. Stocks Rise on Italy Optimism as Retail Sales Top Estimates (Source: Bloomberg)
U.S. stocks rose, rebounding from earlier losses, on speculation Italian Prime Minister designate Mario Monti will succeed in forming a new government to battle the debt crisis and after growth in retail sales beat estimates. Technology and industrial shares had the biggest gains among 10 groups in the Standard & Poor’s 500 Index, rising at least 0.5 percent. Intel Corp. (INTC) spurred a rally in semiconductor companies, climbing 2.9 percent, after Warren Buffett’s Berkshire Hathaway Inc. said it invested in the world’s largest chipmaker. Wal-Mart Stores Inc. (WMT) slumped 2.4 percent as profit at the world’s biggest retailer trailed analysts’ forecasts. The S&P 500 gained 0.5 percent to 1,257.81 at 4 p.m. New York time, rebounding from a loss of 0.6 percent. The Dow Jones Industrial Average advanced 17.18 points, or 0.1 percent, to 12,096.16. About 6.3 billion shares changed hands on U.S. exchanges, 24 percent below the three-month average.
European Stocks Drop as Monti Struggles to Win Backing in Italy (Source: Bloomberg)
European stocks declined as Italy’s premier in waiting Mario Monti struggled to get political parties to help form his new Cabinet and the country’s biggest defense company forecast an unexpected loss. Finmeccanica SpA (FNC) sank 20 percent, saying it will sell 1 billion euros ($1.4 billion) in assets after predicting a loss for this year. UniCredit SpA (UCG) slid 4.5 percent as banks posted one of the worst performances of the 19 industry groups in the Stoxx Europe 600 Index. Cable & Wireless Worldwide Plc (CW/) plunged 26 percent as the company suspended future dividend payments and named a new chief executive officer. The benchmark Stoxx 600 fell 0.6 percent to 237.03 at the close of trading. The gauge has declined 19 percent from this year’s high on Feb. 17 as policy makers struggle to contain a debt crisis that has Greece on the edge of a default.
Japanese Stocks Swing Between Gains, Losses on Europe, BOJ (Source: Bloomberg)
Japanese stocks swung between gains and losses ahead of the Bank of Japan’s monetary policy decision today, and amid concern Italy’s new government will struggle to secure enough support to ease Europe’s debt crisis. The Nikkei 225 (NKY) Stock Average rose 0.1 percent to 8,550.45 as of 9:06 a.m. in Tokyo, after declining as much as 0.1 percent. The broader Topix index slipped 0.1 percent to 730.45, with about six stocks falling for every five that advanced.
Electronics Boost U.S. Retail Sales (Source: Bloomberg)
Retail sales rose more than projected in October as American shoppers gave the economy a boost at the start of the fourth quarter. The 0.5 percent gain, helped by the biggest jump in electronics purchases in two years, followed a 1.1 percent increase for September, Commerce Department figures showed today in Washington. The median forecast of 81 economists surveyed by Bloomberg News called for a rise of 0.3 percent. “Another recession is pretty unlikely,” said Samuel Coffin, an economist at UBS Securities in Stamford, Connecticut, who correctly predicted the gain in retail sales. The report “suggests a very strong start to the quarter. We’ll continue expanding at a better pace.”
Democratic Lawmakers Said to Consider $800 Billion in New U.S. Tax Revenue (Source: Bloomberg)
Democrats on Congress’s supercommittee are weighing whether to reduce to about $800 billion their demand for new tax revenue as part of a deficit- reduction agreement, according to a Democratic aide. Last week, Democrats proposed a plan that would include $1 trillion in new revenue, $1 trillion in spending cuts and $300 billion from interest savings. A second Democratic aide said the spending cuts in any new proposal also would be smaller, without giving an amount. Both aides weren’t authorized to speak publicly. Republicans offered a plan for $300 billion in tax increases, which some lawmakers hailed as a breakthrough demonstrating new Republican support for tax increases. After Democrats rejected the plan, talks have been in a stalemate as Republicans called on Democrats to make a counteroffer.
Fed’s Evans Calls For More Economic Stimulus Steps to Address Unemployment (Source: Bloomberg)
Federal Reserve Bank of Chicago President Charles Evans said he is calling for “increasing amounts of policy accommodation” to reduce a 9 percent unemployment rate that’s far above the Fed’s objectives. “We ought to be behaving as if there’s a very big problem out there,” Evans said in New York today at the Council on Foreign Relations. Evans, 53, voted against the Federal Open Market Committee’s November decision to maintain its level of stimulus, casting the U.S. central bank’s first dissent in favor of further easing since December 2007. He said today that his position is “unusual” among policy makers. “I’m finding myself sufficiently outside” of the “consensus that I thought I had to publicize that,” Evans said. His vote contrasted with those by three of his colleagues. Dallas Fed President Richard Fisher, Charles Plosser of Philadelphia and Narayana Kocherlakota of Minneapolis earlier this year dissented against further easing in August and September.
Wholesale Prices in U.S. Declined by Most in Four Months, Core Unchanged (Source: Bloomberg)
Prices paid to U.S. wholesalers fell in October by the most in four months as the cost of energy and automobiles decreased, pointing to waning inflation. The producer price index declined a more-than-projected 0.3 percent after a 0.8 percent gain in September, Labor Department figures showed today in Washington. Economists forecast a 0.1 percent decrease, according to the median of 74 estimates in a Bloomberg News survey. The so-called core measure, which excludes volatile food and energy, was unchanged, marking the first time without an increase since November 2010. The report showed cheaper raw materials and partially finished goods, indicating companies are under less pressure to raise prices. Cooling inflation gives Federal Reserve policy makers more room to spur the recovery should the world’s largest economy falter.
Goldman’s Blankfein: Growth to ‘Snap Back’ (Source: Bloomberg)
Goldman Sachs Group Inc. (GS), the fifth- biggest U.S. bank, is preparing for a faster global economic rebound than most forecasters expect, Chairman and Chief Executive Officer Lloyd C. Blankfein said. “I don’t think that we can conclude that this slowdown is secular rather than cyclical change,” Blankfein, 57, said today at an investor conference in New York hosted by Bank of America Corp. (BAC)’s Merrill Lynch unit. “The world will snap back and it will be a surprise and it will be faster than people think. I don’t know when that will be and we will gear ourselves accordingly.” Goldman Sachs, which was the most profitable securities firm in Wall Street history before converting to a bank in 2008, last month reported its second quarterly loss in 12 years as a publicly traded company. The stock dropped 41 percent this year through yesterday to $99.29, below the company’s $120.41 tangible book value per share at the end of September.
Treasuries Hold Gain on Speculation Report to Show Cooling Consumer Prices (Source: Bloomberg)
Treasuries held gains from yesterday before a government report that economists said will show the cost of living in the U.S. stopped rising for the first time in four months, adding to signs inflation is cooling. The difference between yields on 10-year notes and Treasury Inflation Protected Securities, a gauge of trader expectations for consumer prices over the life of the debt, has narrowed to 2.03 percentage points from a 2011 high of 2.67 percentage points in April. The 12-month average is 2.26 percentage points. “Demand is very soft in the U.S.,” said Zeal Yin, a money manager at Taipei-based Shin Kong Life Insurance Co., Taiwan’s second-largest life insurer with the equivalent of $39.7 billion in assets. “A moderate slowdown in inflation was within expectations. It’s good for Treasuries.”
Temasek in Talks With BofA to Buy CCB Shares (Source: Bloomberg)
Temasek Holdings Pte., Singapore’s state-owned investment company, is in talks to buy shares of China Construction Bank Corp. (939) that Bank of America Corp. (BAC) is selling, a person with knowledge of the matter said. Bank of America will sell 10.4 billion shares this month in private transactions for a profit of about $1.8 billion, leaving the second-biggest U.S. lender with a 1 percent stake in Construction Bank, according to a statement Nov. 14. Charlotte, North Carolina-based Bank of America said the buyers were a group of investors, without providing names. Stephen Forshaw, a spokesman for Temasek, declined to comment on “market speculation.” Mark Tsang, a Bank of America spokesman in Hong Kong, had no comment.
Temasek bought shares in the Beijing-based lender in September for as much as HK$21.7 billion ($2.8 billion), about eight weeks after paring its holdings.
Euro Falls as Spain, France Prepare Bond Sales (Source: Bloomberg)
The euro declined for a third day against the dollar as Spain and France prepare to sell notes tomorrow after Italy led a slump in euro-area debt. The 17-nation currency was 0.2 percent from a one-month low versus the yen after the extra yield investors demand to hold bonds from France, Belgium, Spain and Austria instead of German bunds climbed to euro-era records on concern the region’s debt crisis is spreading. The dollar rose against the majority of its most-traded peers as investors sought safer assets. “France, Spain, they’re all seeing yields move out so you get the impression that we’re at some sort of juncture where banks, investors and corporations are starting to prepare for the worst-case outcome,” said Greg Gibbs, a currency strategist at Royal Bank of Scotland Group Plc in Sydney. “The euro will remain under pressure.”
Monti Confident Italy Can Overcome Crisis as He Prepares Cabinet Unveiling (Source: Bloomberg)
Italian Prime Minister-designate Mario Monti will announce his new government today as he strives to convince investors he can trim Europe’s second-biggest debt and fend off contagion from the euro-area sovereign crisis. Monti concluded two days of talks with political leaders yesterday in a bid to gain broad support for a Cabinet tasked with pushing through an overhaul of the currency region’s third- biggest economy. “Tomorrow morning I’ll be able to present a synthesis of this work” to President Giorgio Napolitano, the former European Union commissioner said last night in Rome. Monti, 68, is due to meet with Napolitano at 11 a.m. to officially accept the post and possibly present his ministers. He said his consultations with parties, unions and employers have left him “convinced” that Italy can overcome the crisis.
No Stopping Technocrats Rule as Debt Crisis Brings Down Europe Governments (Source: Bloomberg)
The European debt crisis has toppled four elected governments with the last two, in Greece and Italy, falling last week without a shove from voters. The appointment of prime ministers in Athens and Rome to push through unpopular austerity measures echoes efforts in the past five decades by European leaders to control policy-making when democratic means fall short. “The euro zone would never have been created if voters had been given a say,” Fredrik Erixon, head of the European Centre for International Political Economy in Brussels, said in a telephone interview. “It’s an elite project but that doesn’t mean it’s a bad project.” Greek Prime Minister Lucas Papademos, a former central banker, and Italian Prime Minister-designate Mario Monti, an academic and former European commissioner, were chosen by each nation’s president after their elected predecessors were abandoned by political allies, making them unable to pass legislation demanded by the other members of the euro region.
20111116 0947 Global Commodities Related News.
Midwest Farmland in Third Quarter Rises 25%, Most Since 1977, Fed Reports (Source: Bloomberg)
Farmland values in the U.S. Midwest surged 25 percent during the third quarter, the most since 1977, as higher grain and livestock earnings boosted demand for acreage, the Federal Reserve Bank of Chicago said. Rising net income for corn and soybean growers and improved cattle, hog and milk earnings supported higher land prices from a year earlier in Iowa, Illinois, Indiana, Michigan and Wisconsin, the Fed said today in a report. Land values rose 7 percent from the second quarter, and 39 percent of the 216 bankers surveyed forecast higher values in the fourth quarter. “There has continued to be very strong increases in land values this year,” David B. Oppedahl, a business economist at the Federal Reserve Bank of Chicago, said in a presentation today at the bank.
Nationalism Replaces Crisis as Biggest Threat to Metal Supply: Commodities (Source: Bloomberg)
Rising government demands for higher taxes and royalties are becoming a bigger threat to mining companies and their production than the financial crisis that’s wiped $6 trillion off stock market values since July. “You can’t ignore it and the problem is it’s gathering pace,” David Russell, a director at Ernst & Young LLP’s mining and metals team in London, said Nov. 14. “It’s almost like a contagion. The key risk is an inability to plan.” Resource nationalism, as the push by states is known, jumped to being the number one concern among mining executives this year, replacing capital allocation, Ernst & Young said in its annual risk survey published in August. At least 11 countries from Australia to Ecuador have this year raised or revealed plans to increase taxes or royalties on sales of resources such as gold and coal, according to Deutsche Bank AG.
Corn (Source: CME)
US corn futures settled at a three session high, buoyed by spillover support from a spike in soybean prices and renewed optimism about global demand. News of South Korea buying U.S. corn provided a fundamental lift for prices, says Terry Reilly, analyst with Citi in Chicago. The sales were first new sales for corn in a while, and with strong domestic demand, limited farmer selling, and sharp gains in beans, sellers were reluctant to press prices, he added. CBOT Dec corn corn ended up 12c at $6.45 1/2/bushel.
Wheat (Source: CME)
US wheat futures end higher, recovering from prior declines on spillover strength from soybeans and some technical buying. Traders exited some previously sold positions after recent declines took investment-fund positions near record short levels, analysts say. The market bounced today on short-covering, but without some significant export demand, analysts say it will be hard to sustain rallies. CBOT December wheat rose 17c to $6.32 3/4 a bushel, December KCBT ended up 13c at $7.05 and December MGEX added 3 3/4c to $9.31 1/4.
Rice (Source: CME)
US rice futures recover from early losses by the close thanks to spillover support from rallying grain and soybean futures. Rice is showing some stability after falling more than $2/hundredweight in recent weeks, with poor export demand pressuring prices and outweighing worries about Asian crops damaged by floods. January CBOT rice ended up 1/2c at $15.22 1/2.
EU's 2011-12 Grain Crop Seen At 282.5M Tons, Above Expectations - USDA (Source: CME)
The European Union's 2011-12 grain crop is now expected to reach 282.5 million metric tons, the U.S. Department of Agriculture's London attache said, 2.5 million tons above previous expectations. Wheat production is estimated at 137.5 million tons, the USDA said, just over 1 million tons above previous estimates and largely due to reduced concerns over the French harvest. Corn production is expected to reach the record figure of 62 million tons, the USDA said, 1 million tons above previous expectations, while the barley crop is pegged at 52 million tons. The total grain crop of 282.5 million metric tons is an increase of 7 million tons over 2010-11, the USDA said, but nearly 31 million tons below the record crop of 2008-09. The USDA cautioned that even though the total grain crop is above previous expectations, the European nations have carried around 27.5 million tons of stocks into the current marketing year, so supply remains tight.
A lack of rain in the major producing countries of France, Germany and the U.K. through most of the spring months caused considerable concern, the USDA said, yet downfalls came in time for the wheat crop in Southern France and the barley crop in Germany. Dry weather has seen challenging planting conditions in much of the European Union for the 2012 grain harvest, the USDA said, particularly for the U.K., Bulgaria, Romania and Hungary. However, the USDA said recent rainfall has assuaged producers' concerns about water availability for the late running winter plantings, particularly in the north and west of Europe. Increased industrial use of wheat in Germany is expected to result in varying intra-EU trade, the USDA said, with French wheat instead being imported into Belgium and the Netherlands, while French exports to Spain, Italy, and Greece are likely to decline due to competition from Bulgaria and Romania.
The return of low-priced Black Sea origin wheat in 2011-12 will mean more competition for EU exports, the USDA said, but exports are forecast to fall just 6 million tons from the very high level seen last season.
East Australian Grain Quality Little Affected By Rain (Source: CME)
Rainfall that has delayed harvesting of winter crops including wheat in eastern Australia hasn't had much impact on grain quality, GrainCorp Ltd. said, though concerns persist about grain quality in Western Australia. Widespread concern has been voiced in the industry about the possibility of a downgrading of grain quality due to wet weather at harvest in eastern and western Australia. Heavy and widespread rainfall and flooding in eastern Australia during the previous harvest forced a downgrading of wheat quality, resulting in an unusually high percentage of the crop being graded suitable only for livestock feed. In a typical year, nearly all the crop is graded as milling wheat fit for human consumption. Another La Nina climate event in the Pacific this year has raised industry concerns about a repetition of last year's rains, floods and grain quality downgrades.
On Monday, Cooperative Bulk Handling Ltd. reported that wet conditions in Western Australia are frustrating, raising grain quality issues, but it will be some time before the industry has an accurate idea about the rain's impact. Commonwealth Bank of Australia said that the price premium for Western Australian milling wheat over New South Wales milling wheat has widened a little in the past week "because of downgraded grain quality." GrainCorp reported that the harvest is already nearly over in central Queensland but is in full swing in southern areas of the state, while storm-related rainfall has disrupted harvest across Victoria and New South Wales, slowing crop maturation. "Rainfall [is] not of an intensity or amount to have a marked effect on grain quality to date," the company said. It operates eastern Australia's biggest upcountry grain storage network. In the fiscal year starting Oct. 1, GrainCorp has already received 3.04 million metric tons into its upcountry storages as of Nov. 15.
Most forecasts for this crop year peg wheat production in a range of 25 million-26 million tons, compared with a record 26.3 million tons produced last year ended March 31. Agriculture Minister Joe Ludwig said that growing conditions over winter and spring were broadly favourable in Australia's major winter-cropping regions and crops were generally reported to be in good condition. World wheat and coarse grain prices are forecast to remain relatively high in 2011-12 due to relatively low availability, while world oilseed prices are forecast to increase as a result of higher imports by China, greater oilseed crush and growth in feed demand from livestock industries, Ludwig said in a statement.
US soy up on forecast of harvest rain, wheat slides
SINGAPORE, Nov 15 (Reuters) - Chicago soy rose 1 percent, gaining more ground as the market was supported by rains delaying the last leg of the U.S. harvest and expectations of strong demand led by China, the world's top buyer.
"Demand destruction remains at the forefront of the market's mind as we are seeing relatively sluggish export results out of the United States," said Luke Mathews, a commodity strategist at Commonwealth Bank of Australia.
Philippines sees 2011 rice output below goal
MANILA, Nov 15 (Reuters) - The Philippines' unmilled rice production this year is expected to reach 16.68 million tonnes, below a target of a record output of 17.3 million tonnes, the Bureau of Agricultural Statistics (BAS) said on Tuesday.
Rice production in October to December was expected to decline by 8.8 percent from a year earlier to 5.93 million tonnes due to typhoon damages to crops, the state agency said in a report.
Manila's Q3 rice output below fcast; import review on
MANILA, Nov 15 (Reuters) - The Philippines' rice output in the third quarter grew 20 percent from a year earlier, below a government forecast partly due to typhoon damages to crops, as Manila reviews plans to import more rice in 2012 than earlier estimated.
Unmilled rice output grew almost 16 percent to 10.745 million tonnes in the nine months to September from a year earlier, the Bureau of Agricultural Statistics (BAS) said in a report released on Tuesday.
Philippine Jan-Sept farm output grows 4.28 pct y/y
MANILA, Nov 15 (Reuters) - Philippine farm output grew 4.28 percent in January to September from a year earlier, reversing a near 3.0 percent contraction in the same period last year, as favourable weather boosted rice and corn production, a senior government official said on Tuesday.
Unmilled rice output rose 15.96 percent in the first nine months from a year earlier, said Maura Lizarondo, assistant director of the Bureau of Agricultural Statistics (BAS).
Argentina approves more 2010/11 corn exports
BUENOS AIRES, Nov 14 (Reuters) - Argentina's government approved another 500,000 tonnes of 2010/11 corn for export on Monday and an industry group said more might soon be freed up for shipment.
Argentina's government controls corn and wheat exports through a quota system designed to guarantee affordable local food supplies and help tame high inflation, a system that irritates growers in the world's second-biggest corn supplier.
Ukraine 2011 grain crop at 54 mln T so far
KIEV, Nov 14 (Reuters) - Ukraine's grain harvest reached 54.1 million tonnes bunker weight as of November 14, 2011 compared to 41.2 million at the same date in 2010, the Agriculture Ministry said on Monday.
The ministry said in a report farms had harvested 96 percent of the planted area and the grain yield averaged 3.65 tonne per hectare. The yield totalled 2.84 tonne in 2010.
Weather favours Russia winter grain crop-forecaster
MOSCOW, Nov 14 (Reuters) - The weather favours Russian winter grains crop, the sowing of which was 90 percent complete last week, Russia's top weather forecaster said on Monday.
"The weather conditions are highly favourable and the state of winter crops are very good," Roman Vilfand, director of the Hydrometcentre weather forecasting service, told reporters, adding in some producing regions snow was plentiful.
ICE markets steady, focus on euro zone debt
LONDON, Nov 15 (Reuters) - ICE cocoa, sugar and coffee futures were little changed in early trading as investors focused on Southern European countries' ability to tackle their debt problems.
ICE March cocoa was down $8 or 0.3 percent at $2,547 a tonne at 0920 GMT, just above Monday's 2-1/2-year trough. The contract had dipped to $2,515 on Monday, the lowest level for the second month since July 2009.
Vietnam Coffee-Farmers rush to harvest, quality a concern
HANOI, Nov 15 (Reuters) - Vietnam, the world's largest robusta coffee producer, has harvested around 10 percent of its current 2011/2012 crop and farmers are accelerating the picking process to thwart theft, traders said on Tuesday.
Thieves, encouraged by high coffee prices, often pick both ripe and unripe cherries in farms with lax security. Most farms are owned by individual growers who try to prevent theft by boosting their own security or by harvesting early.
Ivorian patchy rains mixed for cocoa, west too dry
ABIDJAN, Nov 14 (Reuters) - Lack of rain last week in Ivory Coast's cocoa centre-western region raised concerns of poor yields and quality next year, but good rains elsewhere boded well for the crop, farmers said on Monday.
Ivory Coast, the world's top cocoa grower, is due to enter the dry season from mid-November to March, when rains are scarce. Depending on how severe it is, it can weigh on the size and quality of the crop.
Rains return to Brazil's thirsty coffee belt
BRASILIA, Nov 14 (Reuters) - Heavy rains should return to Brazil's coffee belt early in the week, forecaster Somar said on Monday, bringing badly-needed moisture trees to ensure tiny coffee fruit swells up and provides next year's crop.
The Minas Gerais coffee belt will see close to 70 millimeters (2.7 inches) of rain on Monday and Tuesday alone, according to the forecast, a significant volume given the state has been mostly dry so far this month.
India rubber seen extending losses for third week
MUMBAI, Nov 15 (Reuters) - India rubber futures are likely to extend fall for the third week in a row weighed by a jump in imports as industry takes advantage of a global fall in prices, with local farmers unwilling to sell their produce at lower prices, analysts said.
The benchmark December rubber on India's National Multi-Commodity Exchange (NMCE) was 3.9 percent down at 18,901 rupees per 100 kg, after losing 7.4 percent in the previous two weeks.
Petronas finds "significant" oil off Malaysia's Sabah
KUALA LUMPUR, Nov 15 (Reuters) - Malaysia's Petronas discovered oil offshore Sabah in the latest "significant" find this year in the hydrocarbon-rich state on Borneo island, as the national oil company sets to boost reserves and output amid easing production costs.
Initial estimates put the well's reserves at 227 million barrels of oil equivalent (boe) and tests in three different reservoirs yielded a maximum output rate of 8,200 barrels per day (bpd), Petroliam Nasional Bhd (Petronas) said on Tuesday.
Brent rises above $112 but wary over euro crisis
LONDON, Nov 15 (Reuters) - Brent crude oil futures rose more than $1 per barrel as hopes for progress in resolving the euro zone's debt crisis helped encourage some consolidation after heavy falls in the previous session.
"More selling in oil may be expected in coming days because of concerns about the prospects for growth in Europe," said Victor Shum, managing consultant at Purvin & Gertz. "But we are also entering a strong demand season, which will set a relatively high floor on prices, limiting any pullback."
Libya data forecasts full crude exports end-2012
LONDON, Nov 14 (Reuters) - Libya's National Oil Corporation (NOC) expects crude exports to rise to 1.345 million barrels per day (bpd) by the fourth quarter of 2012, indicating the OPEC member's oil is returning to the international market faster than expected.
The NOC made the forecast in a table entitled "Estimated Daily Production", which was sent to NOC clients and seen by Reuters on Monday.
OPEC will be fine without outside involvement-Iran OPEC governor
DOHA, Nov 15 (Reuters) - The Organization of Petroleum Exporting Countries will watch market developments closely and will be able to work well together as long as there is 'no outside influence', Iran's OPEC governor said on Tuesday.
OPEC, at its last meeting in June, failed to reach consensus on an output deal to contain crude oil prices and scheduled to meet again in early December.
Taiwan September crude imports up 83 pct from August
Nov 15 (Reuters) - Taiwan's September crude imports increased 83 percent from the month before, as refineries started coming back online following outages and maintenance work, government data showed on Monday.
September crude import volume stood at 25.4 million barrels, up from August's 13.9 million barrels.
S.Korea October LNG imports rise 9 pct y/y
SEOUL, Nov 15 (Reuters) - South Korea's imports of liquefied natural gas (LNG) jumped 9 percent year-on-year in October, as the world's second-largest LNG buyer built its inventory ahead of winter demand, customs data showed on Tuesday.
South Korea imported 2.98 million tonnes of LNG in October, up from 2.74 million tonnes a year earlier, the Korea Customs Service data showed.
Oil Trades Near Three-Month High on U.S. Economy, Declining Fuel Supplies (Source: Bloomberg)
Oil traded near the highest level in more than three months in New York as investors speculated that signs of U.S. economic growth indicate fuel demand may increase in the world’s biggest crude consumer. Futures were little changed, after climbing 1.3 percent yesterday as the Commerce Department reported that U.S. retail sales rose 0.5 percent in October, beating the median forecast in a Bloomberg News survey of economists. Fuel inventories fell last week, according to the American Petroleum Institute. Crude oil for December delivery was at $99.29 a barrel, down 8 cents, in electronic trading on the New York Mercantile at 10:35 a.m. Sydney time. The contract advanced $1.23 to $99.37 yesterday, the highest settlement since July 26. Prices have advanced 21 percent in the past year.
Farmland values in the U.S. Midwest surged 25 percent during the third quarter, the most since 1977, as higher grain and livestock earnings boosted demand for acreage, the Federal Reserve Bank of Chicago said. Rising net income for corn and soybean growers and improved cattle, hog and milk earnings supported higher land prices from a year earlier in Iowa, Illinois, Indiana, Michigan and Wisconsin, the Fed said today in a report. Land values rose 7 percent from the second quarter, and 39 percent of the 216 bankers surveyed forecast higher values in the fourth quarter. “There has continued to be very strong increases in land values this year,” David B. Oppedahl, a business economist at the Federal Reserve Bank of Chicago, said in a presentation today at the bank.
Nationalism Replaces Crisis as Biggest Threat to Metal Supply: Commodities (Source: Bloomberg)
Rising government demands for higher taxes and royalties are becoming a bigger threat to mining companies and their production than the financial crisis that’s wiped $6 trillion off stock market values since July. “You can’t ignore it and the problem is it’s gathering pace,” David Russell, a director at Ernst & Young LLP’s mining and metals team in London, said Nov. 14. “It’s almost like a contagion. The key risk is an inability to plan.” Resource nationalism, as the push by states is known, jumped to being the number one concern among mining executives this year, replacing capital allocation, Ernst & Young said in its annual risk survey published in August. At least 11 countries from Australia to Ecuador have this year raised or revealed plans to increase taxes or royalties on sales of resources such as gold and coal, according to Deutsche Bank AG.
Corn (Source: CME)
US corn futures settled at a three session high, buoyed by spillover support from a spike in soybean prices and renewed optimism about global demand. News of South Korea buying U.S. corn provided a fundamental lift for prices, says Terry Reilly, analyst with Citi in Chicago. The sales were first new sales for corn in a while, and with strong domestic demand, limited farmer selling, and sharp gains in beans, sellers were reluctant to press prices, he added. CBOT Dec corn corn ended up 12c at $6.45 1/2/bushel.
Wheat (Source: CME)
US wheat futures end higher, recovering from prior declines on spillover strength from soybeans and some technical buying. Traders exited some previously sold positions after recent declines took investment-fund positions near record short levels, analysts say. The market bounced today on short-covering, but without some significant export demand, analysts say it will be hard to sustain rallies. CBOT December wheat rose 17c to $6.32 3/4 a bushel, December KCBT ended up 13c at $7.05 and December MGEX added 3 3/4c to $9.31 1/4.
Rice (Source: CME)
US rice futures recover from early losses by the close thanks to spillover support from rallying grain and soybean futures. Rice is showing some stability after falling more than $2/hundredweight in recent weeks, with poor export demand pressuring prices and outweighing worries about Asian crops damaged by floods. January CBOT rice ended up 1/2c at $15.22 1/2.
EU's 2011-12 Grain Crop Seen At 282.5M Tons, Above Expectations - USDA (Source: CME)
The European Union's 2011-12 grain crop is now expected to reach 282.5 million metric tons, the U.S. Department of Agriculture's London attache said, 2.5 million tons above previous expectations. Wheat production is estimated at 137.5 million tons, the USDA said, just over 1 million tons above previous estimates and largely due to reduced concerns over the French harvest. Corn production is expected to reach the record figure of 62 million tons, the USDA said, 1 million tons above previous expectations, while the barley crop is pegged at 52 million tons. The total grain crop of 282.5 million metric tons is an increase of 7 million tons over 2010-11, the USDA said, but nearly 31 million tons below the record crop of 2008-09. The USDA cautioned that even though the total grain crop is above previous expectations, the European nations have carried around 27.5 million tons of stocks into the current marketing year, so supply remains tight.
A lack of rain in the major producing countries of France, Germany and the U.K. through most of the spring months caused considerable concern, the USDA said, yet downfalls came in time for the wheat crop in Southern France and the barley crop in Germany. Dry weather has seen challenging planting conditions in much of the European Union for the 2012 grain harvest, the USDA said, particularly for the U.K., Bulgaria, Romania and Hungary. However, the USDA said recent rainfall has assuaged producers' concerns about water availability for the late running winter plantings, particularly in the north and west of Europe. Increased industrial use of wheat in Germany is expected to result in varying intra-EU trade, the USDA said, with French wheat instead being imported into Belgium and the Netherlands, while French exports to Spain, Italy, and Greece are likely to decline due to competition from Bulgaria and Romania.
The return of low-priced Black Sea origin wheat in 2011-12 will mean more competition for EU exports, the USDA said, but exports are forecast to fall just 6 million tons from the very high level seen last season.
East Australian Grain Quality Little Affected By Rain (Source: CME)
Rainfall that has delayed harvesting of winter crops including wheat in eastern Australia hasn't had much impact on grain quality, GrainCorp Ltd. said, though concerns persist about grain quality in Western Australia. Widespread concern has been voiced in the industry about the possibility of a downgrading of grain quality due to wet weather at harvest in eastern and western Australia. Heavy and widespread rainfall and flooding in eastern Australia during the previous harvest forced a downgrading of wheat quality, resulting in an unusually high percentage of the crop being graded suitable only for livestock feed. In a typical year, nearly all the crop is graded as milling wheat fit for human consumption. Another La Nina climate event in the Pacific this year has raised industry concerns about a repetition of last year's rains, floods and grain quality downgrades.
On Monday, Cooperative Bulk Handling Ltd. reported that wet conditions in Western Australia are frustrating, raising grain quality issues, but it will be some time before the industry has an accurate idea about the rain's impact. Commonwealth Bank of Australia said that the price premium for Western Australian milling wheat over New South Wales milling wheat has widened a little in the past week "because of downgraded grain quality." GrainCorp reported that the harvest is already nearly over in central Queensland but is in full swing in southern areas of the state, while storm-related rainfall has disrupted harvest across Victoria and New South Wales, slowing crop maturation. "Rainfall [is] not of an intensity or amount to have a marked effect on grain quality to date," the company said. It operates eastern Australia's biggest upcountry grain storage network. In the fiscal year starting Oct. 1, GrainCorp has already received 3.04 million metric tons into its upcountry storages as of Nov. 15.
Most forecasts for this crop year peg wheat production in a range of 25 million-26 million tons, compared with a record 26.3 million tons produced last year ended March 31. Agriculture Minister Joe Ludwig said that growing conditions over winter and spring were broadly favourable in Australia's major winter-cropping regions and crops were generally reported to be in good condition. World wheat and coarse grain prices are forecast to remain relatively high in 2011-12 due to relatively low availability, while world oilseed prices are forecast to increase as a result of higher imports by China, greater oilseed crush and growth in feed demand from livestock industries, Ludwig said in a statement.
US soy up on forecast of harvest rain, wheat slides
SINGAPORE, Nov 15 (Reuters) - Chicago soy rose 1 percent, gaining more ground as the market was supported by rains delaying the last leg of the U.S. harvest and expectations of strong demand led by China, the world's top buyer.
"Demand destruction remains at the forefront of the market's mind as we are seeing relatively sluggish export results out of the United States," said Luke Mathews, a commodity strategist at Commonwealth Bank of Australia.
Philippines sees 2011 rice output below goal
MANILA, Nov 15 (Reuters) - The Philippines' unmilled rice production this year is expected to reach 16.68 million tonnes, below a target of a record output of 17.3 million tonnes, the Bureau of Agricultural Statistics (BAS) said on Tuesday.
Rice production in October to December was expected to decline by 8.8 percent from a year earlier to 5.93 million tonnes due to typhoon damages to crops, the state agency said in a report.
Manila's Q3 rice output below fcast; import review on
MANILA, Nov 15 (Reuters) - The Philippines' rice output in the third quarter grew 20 percent from a year earlier, below a government forecast partly due to typhoon damages to crops, as Manila reviews plans to import more rice in 2012 than earlier estimated.
Unmilled rice output grew almost 16 percent to 10.745 million tonnes in the nine months to September from a year earlier, the Bureau of Agricultural Statistics (BAS) said in a report released on Tuesday.
Philippine Jan-Sept farm output grows 4.28 pct y/y
MANILA, Nov 15 (Reuters) - Philippine farm output grew 4.28 percent in January to September from a year earlier, reversing a near 3.0 percent contraction in the same period last year, as favourable weather boosted rice and corn production, a senior government official said on Tuesday.
Unmilled rice output rose 15.96 percent in the first nine months from a year earlier, said Maura Lizarondo, assistant director of the Bureau of Agricultural Statistics (BAS).
Argentina approves more 2010/11 corn exports
BUENOS AIRES, Nov 14 (Reuters) - Argentina's government approved another 500,000 tonnes of 2010/11 corn for export on Monday and an industry group said more might soon be freed up for shipment.
Argentina's government controls corn and wheat exports through a quota system designed to guarantee affordable local food supplies and help tame high inflation, a system that irritates growers in the world's second-biggest corn supplier.
Ukraine 2011 grain crop at 54 mln T so far
KIEV, Nov 14 (Reuters) - Ukraine's grain harvest reached 54.1 million tonnes bunker weight as of November 14, 2011 compared to 41.2 million at the same date in 2010, the Agriculture Ministry said on Monday.
The ministry said in a report farms had harvested 96 percent of the planted area and the grain yield averaged 3.65 tonne per hectare. The yield totalled 2.84 tonne in 2010.
Weather favours Russia winter grain crop-forecaster
MOSCOW, Nov 14 (Reuters) - The weather favours Russian winter grains crop, the sowing of which was 90 percent complete last week, Russia's top weather forecaster said on Monday.
"The weather conditions are highly favourable and the state of winter crops are very good," Roman Vilfand, director of the Hydrometcentre weather forecasting service, told reporters, adding in some producing regions snow was plentiful.
ICE markets steady, focus on euro zone debt
LONDON, Nov 15 (Reuters) - ICE cocoa, sugar and coffee futures were little changed in early trading as investors focused on Southern European countries' ability to tackle their debt problems.
ICE March cocoa was down $8 or 0.3 percent at $2,547 a tonne at 0920 GMT, just above Monday's 2-1/2-year trough. The contract had dipped to $2,515 on Monday, the lowest level for the second month since July 2009.
Vietnam Coffee-Farmers rush to harvest, quality a concern
HANOI, Nov 15 (Reuters) - Vietnam, the world's largest robusta coffee producer, has harvested around 10 percent of its current 2011/2012 crop and farmers are accelerating the picking process to thwart theft, traders said on Tuesday.
Thieves, encouraged by high coffee prices, often pick both ripe and unripe cherries in farms with lax security. Most farms are owned by individual growers who try to prevent theft by boosting their own security or by harvesting early.
Ivorian patchy rains mixed for cocoa, west too dry
ABIDJAN, Nov 14 (Reuters) - Lack of rain last week in Ivory Coast's cocoa centre-western region raised concerns of poor yields and quality next year, but good rains elsewhere boded well for the crop, farmers said on Monday.
Ivory Coast, the world's top cocoa grower, is due to enter the dry season from mid-November to March, when rains are scarce. Depending on how severe it is, it can weigh on the size and quality of the crop.
Rains return to Brazil's thirsty coffee belt
BRASILIA, Nov 14 (Reuters) - Heavy rains should return to Brazil's coffee belt early in the week, forecaster Somar said on Monday, bringing badly-needed moisture trees to ensure tiny coffee fruit swells up and provides next year's crop.
The Minas Gerais coffee belt will see close to 70 millimeters (2.7 inches) of rain on Monday and Tuesday alone, according to the forecast, a significant volume given the state has been mostly dry so far this month.
India rubber seen extending losses for third week
MUMBAI, Nov 15 (Reuters) - India rubber futures are likely to extend fall for the third week in a row weighed by a jump in imports as industry takes advantage of a global fall in prices, with local farmers unwilling to sell their produce at lower prices, analysts said.
The benchmark December rubber on India's National Multi-Commodity Exchange (NMCE) was 3.9 percent down at 18,901 rupees per 100 kg, after losing 7.4 percent in the previous two weeks.
Petronas finds "significant" oil off Malaysia's Sabah
KUALA LUMPUR, Nov 15 (Reuters) - Malaysia's Petronas discovered oil offshore Sabah in the latest "significant" find this year in the hydrocarbon-rich state on Borneo island, as the national oil company sets to boost reserves and output amid easing production costs.
Initial estimates put the well's reserves at 227 million barrels of oil equivalent (boe) and tests in three different reservoirs yielded a maximum output rate of 8,200 barrels per day (bpd), Petroliam Nasional Bhd (Petronas) said on Tuesday.
Brent rises above $112 but wary over euro crisis
LONDON, Nov 15 (Reuters) - Brent crude oil futures rose more than $1 per barrel as hopes for progress in resolving the euro zone's debt crisis helped encourage some consolidation after heavy falls in the previous session.
"More selling in oil may be expected in coming days because of concerns about the prospects for growth in Europe," said Victor Shum, managing consultant at Purvin & Gertz. "But we are also entering a strong demand season, which will set a relatively high floor on prices, limiting any pullback."
Libya data forecasts full crude exports end-2012
LONDON, Nov 14 (Reuters) - Libya's National Oil Corporation (NOC) expects crude exports to rise to 1.345 million barrels per day (bpd) by the fourth quarter of 2012, indicating the OPEC member's oil is returning to the international market faster than expected.
The NOC made the forecast in a table entitled "Estimated Daily Production", which was sent to NOC clients and seen by Reuters on Monday.
OPEC will be fine without outside involvement-Iran OPEC governor
DOHA, Nov 15 (Reuters) - The Organization of Petroleum Exporting Countries will watch market developments closely and will be able to work well together as long as there is 'no outside influence', Iran's OPEC governor said on Tuesday.
OPEC, at its last meeting in June, failed to reach consensus on an output deal to contain crude oil prices and scheduled to meet again in early December.
Taiwan September crude imports up 83 pct from August
Nov 15 (Reuters) - Taiwan's September crude imports increased 83 percent from the month before, as refineries started coming back online following outages and maintenance work, government data showed on Monday.
September crude import volume stood at 25.4 million barrels, up from August's 13.9 million barrels.
S.Korea October LNG imports rise 9 pct y/y
SEOUL, Nov 15 (Reuters) - South Korea's imports of liquefied natural gas (LNG) jumped 9 percent year-on-year in October, as the world's second-largest LNG buyer built its inventory ahead of winter demand, customs data showed on Tuesday.
South Korea imported 2.98 million tonnes of LNG in October, up from 2.74 million tonnes a year earlier, the Korea Customs Service data showed.
Oil Trades Near Three-Month High on U.S. Economy, Declining Fuel Supplies (Source: Bloomberg)
Oil traded near the highest level in more than three months in New York as investors speculated that signs of U.S. economic growth indicate fuel demand may increase in the world’s biggest crude consumer. Futures were little changed, after climbing 1.3 percent yesterday as the Commerce Department reported that U.S. retail sales rose 0.5 percent in October, beating the median forecast in a Bloomberg News survey of economists. Fuel inventories fell last week, according to the American Petroleum Institute. Crude oil for December delivery was at $99.29 a barrel, down 8 cents, in electronic trading on the New York Mercantile at 10:35 a.m. Sydney time. The contract advanced $1.23 to $99.37 yesterday, the highest settlement since July 26. Prices have advanced 21 percent in the past year.
20111116 0945 Soy Oil & Palm Oil Related News.
The palm oil industry is expected to be the engine of growth for the country in the face of the current global economic slowdown. Plantation, Industries and Commodities Minister Tan Sri Bernard Dompok said the outlook of the industry was positive as the price of the commodity remained at around RM3,000 per tonne despite the gloomy global economy. “Malaysia's palm oil exports may exceed RM70bn this year and it is the second biggest export after electrical and electronics. This is much bigger compared with petroleum if we exclude the export of gas,” he said. Dompok expected the industry to continue growing, with the current output of 18m tonnes surpassing earlier target of about 17m tonnes. (Starbiz)
Malaysia is assessing the feasibility of implementing its own sustainable palm oil certification even as efforts are stepped up to raise the competitiveness of the country's palm oil and related downstream products globally. The Malaysian Sustainable Palm Oil (MSPO) is under consideration, Plantation Industries and Commodities Minister Tan Sri Bernard Dompok said. Dompok also said Malaysian and Indonesia policymakers would soon meet to resolve issues on the differences in export tax structures for palm oil products. (Financial daily)
Soybeans (Source: CME)
U.S. soybean futures rallied, continuing a three day a correction from prior losses on technical buying and market perception of fresh export demand. There is speculation of China buying U.S. or South American soybeans, a fundamental feature helping to underpin soybeans' rally. Traders viewed most of the gains as technical in nature, with buyers encouraged that prices were oversold after traders were unable to press prices through early October lows. The combination of light new buying on the lows, backed by renewed speculation of China's buying, opened the door for a strong correction in soybean prices, said John Kleist, senior analyst with ebottrading.com. CBOT Jan soybeans ended up 22 cents, or 1.9%, at $12.00 1/4/bushel.
Soybean Meal/Oil (Source: CME)
Soy product futures ended higher, with soyoil futures soaring near a one-month high. Advances in soyoil were driven by supportive demand outlooks, with crude oil rising near $100 a barrel making margins on biodiesel produced from soyoil more attractive, says Jack Scoville, analyst with Price Futures Group. Soyoil also drew support from fundamentally bullish inventory data from Monday's NOPA October soy-crush report. CBOT Dec soyoil ended up 2.7% or 1.38c at 52.60 cents/lb, and Dec soymeal end up $2.20 at $301.40/short ton.
Malaysia In Talks With Indonesia On Reviewing CPO Export Taxes - Minister (Source: CME)
Top palm oil producers Malaysia and Indonesia are reviewing export taxes on palm oil and may announce new measures by the year-end that will benefit downstream palm oil processing industries in both countries, Malaysia's Commodities Minister Bernard Dompok said. "Both countries are cooperating to develop downstream palm oil industries," he said on the sidelines of an industry conference. Officials from Malaysia's Commodity Ministry have held several meetings with Indonesian counterparts in the past few weeks following a bilateral meeting late last month between Prime Minister Najib Razak and Indonesian President Susilo Bambang Yudhoyono on the Indonesian island of Lombok. Dompok declined to elaborate on the proposals suggested by both parties.
An industry executive, who didn't wish to be named, told Dow Jones Newswires that Malaysian officials have proposed a revision of Indonesia's duties on refined palm product exports, lowering of Malaysia's high export tax on CPO as well as a duty-free quota on Indonesian-origin CPO bound for Malaysian ports. "These are just some of the suggestions that Malaysia is proposing to the Indonesians. We hope both governments will come to an agreement. Otherwise, some independent palm oil refiners will be out of business when Indonesia's [fresh] refining capacity comes on stream in the next 6-12 months," the executive said. Malaysia imposes a tax of 27% on crude palm oil exports to boost its downstream refining industry, which helped ramp up capacity in the past few years. Its refiners were also buying 80,000-100,000 tons monthly from Indonesia, whose annual production is usually around 23 million tons, compared with Malaysia's 17 million tons.
However, Indonesia raised export taxes mid-August to boost its refining capacity, which limited the availability of oil for exports and made it more expensive for Malaysian refiners to import Indonesian CPO. The maximum tax now is 13% for refined palm olein 22.5% for CPO.
Palm rises near 5-mth high, retreats on euro zone fears
JAKARTA, Nov 15 (Reuters) - Malaysian palm oil futures eased slightly after rising to their highest level in nearly five months as lingering concerns about the euro zone's debt offset robust demand and expectations of falling output.
"Europe is on everyone's mind -- what will eventually happen is anybody's guess," said a Kuala Lumpur-based palm trader. "But we have China's insatiable demand and supply constraints ... November and Dec are low production months."
Australia harvesting record canola crop
SYDNEY, Nov 15 (Reuters) - Australia farmers are busy harvesting an expected record canola crop of around 2.62 million tonnes, up more than 20 percent from the previous season's bumper crop, the Australian Oilseeds Federation (AOF) said on Tuesday.
Benign weather ahead of the harvest, which is now well advanced across most areas of Australia where the oilseed, also known as rapeseed, is grown, had boosted yields, AOF said.
Brazil soy planting picks up pace, passes halfway
SAO PAULO, Nov 14 (Reuters) - The planting of Brazil's soybean crop is well ahead of schedule and has surpassed the halfway mark for planting of a record area this year, grain analysts Celeres said on Monday.
Ample rains since late September in most soy producing regions have allowed producers to sow an early crop this year, unlike last season when spring rains were delayed by a month and a half due to the effects of La Nina.
Fresh rains forecast for Brazil soy belt - Somar
SAO PAULO, Nov 14 (Reuters) - Rains were forecast to return to Brazil's southern grain belt and push into the center-west region, as producers rush to plant the remaining half of the soy crop, weather forecaster Somar said Monday.
A slow moving cold front should begin to break up over the main grain producing areas after Tuesday and move into Brazil's northeastern farms and then, finally, out to sea.
Malaysia is assessing the feasibility of implementing its own sustainable palm oil certification even as efforts are stepped up to raise the competitiveness of the country's palm oil and related downstream products globally. The Malaysian Sustainable Palm Oil (MSPO) is under consideration, Plantation Industries and Commodities Minister Tan Sri Bernard Dompok said. Dompok also said Malaysian and Indonesia policymakers would soon meet to resolve issues on the differences in export tax structures for palm oil products. (Financial daily)
Soybeans (Source: CME)
U.S. soybean futures rallied, continuing a three day a correction from prior losses on technical buying and market perception of fresh export demand. There is speculation of China buying U.S. or South American soybeans, a fundamental feature helping to underpin soybeans' rally. Traders viewed most of the gains as technical in nature, with buyers encouraged that prices were oversold after traders were unable to press prices through early October lows. The combination of light new buying on the lows, backed by renewed speculation of China's buying, opened the door for a strong correction in soybean prices, said John Kleist, senior analyst with ebottrading.com. CBOT Jan soybeans ended up 22 cents, or 1.9%, at $12.00 1/4/bushel.
Soybean Meal/Oil (Source: CME)
Soy product futures ended higher, with soyoil futures soaring near a one-month high. Advances in soyoil were driven by supportive demand outlooks, with crude oil rising near $100 a barrel making margins on biodiesel produced from soyoil more attractive, says Jack Scoville, analyst with Price Futures Group. Soyoil also drew support from fundamentally bullish inventory data from Monday's NOPA October soy-crush report. CBOT Dec soyoil ended up 2.7% or 1.38c at 52.60 cents/lb, and Dec soymeal end up $2.20 at $301.40/short ton.
Malaysia In Talks With Indonesia On Reviewing CPO Export Taxes - Minister (Source: CME)
Top palm oil producers Malaysia and Indonesia are reviewing export taxes on palm oil and may announce new measures by the year-end that will benefit downstream palm oil processing industries in both countries, Malaysia's Commodities Minister Bernard Dompok said. "Both countries are cooperating to develop downstream palm oil industries," he said on the sidelines of an industry conference. Officials from Malaysia's Commodity Ministry have held several meetings with Indonesian counterparts in the past few weeks following a bilateral meeting late last month between Prime Minister Najib Razak and Indonesian President Susilo Bambang Yudhoyono on the Indonesian island of Lombok. Dompok declined to elaborate on the proposals suggested by both parties.
An industry executive, who didn't wish to be named, told Dow Jones Newswires that Malaysian officials have proposed a revision of Indonesia's duties on refined palm product exports, lowering of Malaysia's high export tax on CPO as well as a duty-free quota on Indonesian-origin CPO bound for Malaysian ports. "These are just some of the suggestions that Malaysia is proposing to the Indonesians. We hope both governments will come to an agreement. Otherwise, some independent palm oil refiners will be out of business when Indonesia's [fresh] refining capacity comes on stream in the next 6-12 months," the executive said. Malaysia imposes a tax of 27% on crude palm oil exports to boost its downstream refining industry, which helped ramp up capacity in the past few years. Its refiners were also buying 80,000-100,000 tons monthly from Indonesia, whose annual production is usually around 23 million tons, compared with Malaysia's 17 million tons.
However, Indonesia raised export taxes mid-August to boost its refining capacity, which limited the availability of oil for exports and made it more expensive for Malaysian refiners to import Indonesian CPO. The maximum tax now is 13% for refined palm olein 22.5% for CPO.
Palm rises near 5-mth high, retreats on euro zone fears
JAKARTA, Nov 15 (Reuters) - Malaysian palm oil futures eased slightly after rising to their highest level in nearly five months as lingering concerns about the euro zone's debt offset robust demand and expectations of falling output.
"Europe is on everyone's mind -- what will eventually happen is anybody's guess," said a Kuala Lumpur-based palm trader. "But we have China's insatiable demand and supply constraints ... November and Dec are low production months."
Australia harvesting record canola crop
SYDNEY, Nov 15 (Reuters) - Australia farmers are busy harvesting an expected record canola crop of around 2.62 million tonnes, up more than 20 percent from the previous season's bumper crop, the Australian Oilseeds Federation (AOF) said on Tuesday.
Benign weather ahead of the harvest, which is now well advanced across most areas of Australia where the oilseed, also known as rapeseed, is grown, had boosted yields, AOF said.
Brazil soy planting picks up pace, passes halfway
SAO PAULO, Nov 14 (Reuters) - The planting of Brazil's soybean crop is well ahead of schedule and has surpassed the halfway mark for planting of a record area this year, grain analysts Celeres said on Monday.
Ample rains since late September in most soy producing regions have allowed producers to sow an early crop this year, unlike last season when spring rains were delayed by a month and a half due to the effects of La Nina.
Fresh rains forecast for Brazil soy belt - Somar
SAO PAULO, Nov 14 (Reuters) - Rains were forecast to return to Brazil's southern grain belt and push into the center-west region, as producers rush to plant the remaining half of the soy crop, weather forecaster Somar said Monday.
A slow moving cold front should begin to break up over the main grain producing areas after Tuesday and move into Brazil's northeastern farms and then, finally, out to sea.
Tuesday, November 15, 2011
20111115 1815 FCPO EOD Daily Chart Study.
Bollinger band reading : pullback correction upside biased.
MACD Histrogram : turned lower, buyer taking profit.
Support : 3150, 3100, 3070, 3050, 3020 level.
Resistance : 3200, 3250, 3270, 3300 level.
Comment :
FCPO closed recorded small loss with higher volume traded while overnight soy oil closed higher and currently trading firmer while crude oil price pulling back lower.
Better export data release by both cargo surveyor triggered FCPO price to test new high 4 month high with some profit taking activities kick in.
Daily chart formed a down doji bar candle closed below upper Bollinger band level after market opened unchanged, eased lower and surge upward tested above 3200 resistance level before fall lower into negative zone and trade range bound to closed off the low of the day.
Chart study revised to suggesting a pullback correction taking place upside biased market development testing support and resistance.
When to buy : buy at support or weakness with quick cut loss and profit target.
When to sell : sell at resistant or strength with quick cut loss and profit target.
20111115 1745 FKLI EOD Daily Chart Study.
Bollinger band reading : pullback correction little upside biased.
MACD Histrogram : falling, buyer leaving as seller testing market.
Support : 1458, 1445, 1440, 1435 level.
Resistance : 1470, 1477, 1485, 1491 level.
Comment :
FKLI closed recorded loss surrender most of yesterday gains with decreasing volume transacted doing huge 15 points discount compare to cash market that closed marginally lower. Overnight U.S. markets ended recorded loss and today Asia markets closed mostly lower while European markets currently in negative zone.
Resume concern on European debt problem after higher Italy bond yield development.
Daily chart formed a down doji bar candle closed below middle Bollinger band support level after market opened lower, edge few ticks higher and traded side way range bound followed by last 30 minutes fall lower to closed near the low of the day.
Chart wise, market still likely to trade within a pullback correction little upside biased development testing support and resistance level.
When to buy : buy at support or weakness with quick cut loss and profit target.
When to sell : sell at resistance or strength with quick cut loss and profit target.
20111115 1717 Global Market & Commodities Related News.
Asian shares fall as euro zone yields rise
TOKYO, Nov 15 (Reuters) - Asian shares fell, as a rise in euro zone bond yields reflected lingering doubts about the ability of politicians in Italy and Greece to push through painful reforms to resolve their debt crises and win market confidence.
"Italy can't find buyers to finance its debt, as fears over high price volatility in Italian bonds and speculators hitting shares of banks with huge exposure to Italy have made European financial institutions, traditionally long-term investors, wary of purchases," said Takashi Nakagawa, a senior credit analyst at Daiwa Capital Markets.
FOREX-Euro dips; dollar/yen spikes briefly on stops
SINGAPORE, Nov 15 (Reuters) - The euro dipped on Tuesday, stuck near the bottom of a recent trading range after a rise in Italian and Spanish bond yields underscored the challenges facing Europe as it tries to contain the region's debt crisis.
The dollar briefly spiked higher against the yen but later gave back most of its gains, and traders said the move was likely caused by a large-lot flow and stop-loss buying, and was probably not intervention.
US soy up on forecast of harvest rain, wheat slides
SINGAPORE, Nov 15 (Reuters) - Chicago soy rose 1 percent, gaining more ground as the market was supported by rains delaying the last leg of the U.S. harvest and expectations of strong demand led by China, the world's top buyer.
"Demand destruction remains at the forefront of the market's mind as we are seeing relatively sluggish export results out of the United States," said Luke Mathews, a commodity strategist at Commonwealth Bank of Australia.
Australia harvesting record canola crop
SYDNEY, Nov 15 (Reuters) - Australia farmers are busy harvesting an expected record canola crop of around 2.62 million tonnes, up more than 20 percent from the previous season's bumper crop, the Australian Oilseeds Federation (AOF) said on Tuesday.
Benign weather ahead of the harvest, which is now well advanced across most areas of Australia where the oilseed, also known as rapeseed, is grown, had boosted yields, AOF said.
Australia wheat crop faces quality risks -Cargill
SYDNEY, Nov 14 (Reuters) - Australia's 2011/12 wheat harvest, now gathering pace, runs the risk of quality downgrades following wet weather although overall quality is expected to be an improvement on last year, according to Cargill Inc's Australian grain marketing chief.
"We've still got a fair way to go so at this stage there doesn't seem to be too many problems in eastern Australia although in Western Australia there's been a few issues," Mitch Morison, commercial general manager of Cargill's Australian grain trading arm, said in a telephone interview.
Vietnam Coffee-Farmers rush to harvest, quality a concern
HANOI, Nov 15 (Reuters) - Vietnam, the world's largest robusta coffee producer, has harvested around 10 percent of its current 2011/2012 crop and farmers are accelerating the picking process to avoid theft, which would lead to lower quality, traders said on Tuesday.
The harvest began early this month after prolonged rain had slowed cherry's maturing process. Traders have forecast November coffee shipment to rise to 50,000-75,000 tonnes, from 30,000 tonnes estimated for October loading.
Argentina approves more 2010/11 corn exports
BUENOS AIRES, Nov 14 (Reuters) - Argentina's government approved another 500,000 tonnes of 2010/11 corn for export on Monday and an industry group said more might soon be freed up for shipment.
Argentina's government controls corn and wheat exports through a quota system designed to guarantee affordable local food supplies and help tame high inflation, a system that irritates growers in the world's second-biggest corn supplier.
Brent above $112, recoups some losses; Europe weighs
SINGAPORE, Nov 15 (Reuters) - Brent crude futures rose above $112, recouping some of the previous session's fall of more than $2, while concerns over Europe slipping into a recession and hurting oil demand growth capped the gains.
"Investors are constantly in a risk-on, risk-off mode because of the uncertainty in Europe," said Natalie Robertson, an analyst at ANZ. "The key thing is to look at Europe. Macroeconomic developments are overshadowing everything else."
S.Korea October LNG imports rise 9 pct y/y
SEOUL, Nov 15 (Reuters) - South Korea's imports of liquefied natural gas (LNG) jumped 9 percent year-on-year in October, as the world's second-largest LNG buyer built its inventory ahead of winter demand, customs data showed on Tuesday.
South Korea imported 2.98 million tonnes of LNG in October, up from 2.74 million tonnes a year earlier, the Korea Customs Service data showed.
Copper experts trim 2012 price fcast-Chile Cochilco
SANTIAGO, Nov 14 (Reuters) - Copper market experts have revised down their 2012 average price estimates in light of the risks of a recession in the euro zone and slowdown in China, Chile's state copper commission Cochilco said on Monday.
Cochilco said 19 specialists it polled forecast an average copper price of $3.62/lb for next year, compared to an average forecast of $4.19/lb estimated in a previous survey conducted in August.
Codelco offers lower 2012 copper premiums to China -trade
HONG KONG, Nov 14 (Reuters) - Chile's Codelco, the world's top copper producer, offered a 4.3 percent cut in physical copper premiums to its Chinese buyers for 2012, the first decline since 2009, trading sources said on Monday.
The offer of a $110 premium per tonne over cash London Metal Exchange copper prices is in line with expectations and lower than the $115 Chinese buyers have paid this year. The 2011 premium rose 35 percent from the previous year.
METALS-Copper down on euro zone worries
SHANGHAI, Nov 15 (Reuters) - Copper fell on Tuesday, struggling to define a new technical range, as investors stayed cautious after Italy's five-year bond yields rose to a record euro-era high, fuelling fears that high borrowing costs would hamper the nation's efforts to trim its debt.
Three-month copper on the London Metal Exchange inched down 0.04 percent to $7,756.75 a tonne by 0402 GMT, after rising 1.6 percent previously.
PRECIOUS-Gold tracks risk assets down on Europe fear
SINGAPORE, Nov 15 (Reuters) - Spot gold prices inched down on Tuesday, as investors unnerved by an Italian bond auction focused on the scope of the task faced by new governments in Italy and Greece in keeping the region's sovereign debt crisis under control.
Though gold is supported by its safe-haven allure, it is prone to spillover from the heavy sell-off in the wider financial market, where sentiment remains fickle over Europe's painful journey en route to solving its debt crisis.
Gold tracks risk assets down on Europe fear
SINGAPORE, Nov 15 (Reuters) - Spot gold prices inched down, as investors unnerved by an Italian bond auction focused on the scope of the task faced by new governments in Italy and Greece in keeping the region's sovereign debt crisis under control.
"There is a much greater likelihood of its ending badly," said a Singapore-based trader.
TOKYO, Nov 15 (Reuters) - Asian shares fell, as a rise in euro zone bond yields reflected lingering doubts about the ability of politicians in Italy and Greece to push through painful reforms to resolve their debt crises and win market confidence.
"Italy can't find buyers to finance its debt, as fears over high price volatility in Italian bonds and speculators hitting shares of banks with huge exposure to Italy have made European financial institutions, traditionally long-term investors, wary of purchases," said Takashi Nakagawa, a senior credit analyst at Daiwa Capital Markets.
FOREX-Euro dips; dollar/yen spikes briefly on stops
SINGAPORE, Nov 15 (Reuters) - The euro dipped on Tuesday, stuck near the bottom of a recent trading range after a rise in Italian and Spanish bond yields underscored the challenges facing Europe as it tries to contain the region's debt crisis.
The dollar briefly spiked higher against the yen but later gave back most of its gains, and traders said the move was likely caused by a large-lot flow and stop-loss buying, and was probably not intervention.
US soy up on forecast of harvest rain, wheat slides
SINGAPORE, Nov 15 (Reuters) - Chicago soy rose 1 percent, gaining more ground as the market was supported by rains delaying the last leg of the U.S. harvest and expectations of strong demand led by China, the world's top buyer.
"Demand destruction remains at the forefront of the market's mind as we are seeing relatively sluggish export results out of the United States," said Luke Mathews, a commodity strategist at Commonwealth Bank of Australia.
Australia harvesting record canola crop
SYDNEY, Nov 15 (Reuters) - Australia farmers are busy harvesting an expected record canola crop of around 2.62 million tonnes, up more than 20 percent from the previous season's bumper crop, the Australian Oilseeds Federation (AOF) said on Tuesday.
Benign weather ahead of the harvest, which is now well advanced across most areas of Australia where the oilseed, also known as rapeseed, is grown, had boosted yields, AOF said.
Australia wheat crop faces quality risks -Cargill
SYDNEY, Nov 14 (Reuters) - Australia's 2011/12 wheat harvest, now gathering pace, runs the risk of quality downgrades following wet weather although overall quality is expected to be an improvement on last year, according to Cargill Inc's Australian grain marketing chief.
"We've still got a fair way to go so at this stage there doesn't seem to be too many problems in eastern Australia although in Western Australia there's been a few issues," Mitch Morison, commercial general manager of Cargill's Australian grain trading arm, said in a telephone interview.
Vietnam Coffee-Farmers rush to harvest, quality a concern
HANOI, Nov 15 (Reuters) - Vietnam, the world's largest robusta coffee producer, has harvested around 10 percent of its current 2011/2012 crop and farmers are accelerating the picking process to avoid theft, which would lead to lower quality, traders said on Tuesday.
The harvest began early this month after prolonged rain had slowed cherry's maturing process. Traders have forecast November coffee shipment to rise to 50,000-75,000 tonnes, from 30,000 tonnes estimated for October loading.
Argentina approves more 2010/11 corn exports
BUENOS AIRES, Nov 14 (Reuters) - Argentina's government approved another 500,000 tonnes of 2010/11 corn for export on Monday and an industry group said more might soon be freed up for shipment.
Argentina's government controls corn and wheat exports through a quota system designed to guarantee affordable local food supplies and help tame high inflation, a system that irritates growers in the world's second-biggest corn supplier.
Brent above $112, recoups some losses; Europe weighs
SINGAPORE, Nov 15 (Reuters) - Brent crude futures rose above $112, recouping some of the previous session's fall of more than $2, while concerns over Europe slipping into a recession and hurting oil demand growth capped the gains.
"Investors are constantly in a risk-on, risk-off mode because of the uncertainty in Europe," said Natalie Robertson, an analyst at ANZ. "The key thing is to look at Europe. Macroeconomic developments are overshadowing everything else."
S.Korea October LNG imports rise 9 pct y/y
SEOUL, Nov 15 (Reuters) - South Korea's imports of liquefied natural gas (LNG) jumped 9 percent year-on-year in October, as the world's second-largest LNG buyer built its inventory ahead of winter demand, customs data showed on Tuesday.
South Korea imported 2.98 million tonnes of LNG in October, up from 2.74 million tonnes a year earlier, the Korea Customs Service data showed.
Copper experts trim 2012 price fcast-Chile Cochilco
SANTIAGO, Nov 14 (Reuters) - Copper market experts have revised down their 2012 average price estimates in light of the risks of a recession in the euro zone and slowdown in China, Chile's state copper commission Cochilco said on Monday.
Cochilco said 19 specialists it polled forecast an average copper price of $3.62/lb for next year, compared to an average forecast of $4.19/lb estimated in a previous survey conducted in August.
Codelco offers lower 2012 copper premiums to China -trade
HONG KONG, Nov 14 (Reuters) - Chile's Codelco, the world's top copper producer, offered a 4.3 percent cut in physical copper premiums to its Chinese buyers for 2012, the first decline since 2009, trading sources said on Monday.
The offer of a $110 premium per tonne over cash London Metal Exchange copper prices is in line with expectations and lower than the $115 Chinese buyers have paid this year. The 2011 premium rose 35 percent from the previous year.
METALS-Copper down on euro zone worries
SHANGHAI, Nov 15 (Reuters) - Copper fell on Tuesday, struggling to define a new technical range, as investors stayed cautious after Italy's five-year bond yields rose to a record euro-era high, fuelling fears that high borrowing costs would hamper the nation's efforts to trim its debt.
Three-month copper on the London Metal Exchange inched down 0.04 percent to $7,756.75 a tonne by 0402 GMT, after rising 1.6 percent previously.
PRECIOUS-Gold tracks risk assets down on Europe fear
SINGAPORE, Nov 15 (Reuters) - Spot gold prices inched down on Tuesday, as investors unnerved by an Italian bond auction focused on the scope of the task faced by new governments in Italy and Greece in keeping the region's sovereign debt crisis under control.
Though gold is supported by its safe-haven allure, it is prone to spillover from the heavy sell-off in the wider financial market, where sentiment remains fickle over Europe's painful journey en route to solving its debt crisis.
Gold tracks risk assets down on Europe fear
SINGAPORE, Nov 15 (Reuters) - Spot gold prices inched down, as investors unnerved by an Italian bond auction focused on the scope of the task faced by new governments in Italy and Greece in keeping the region's sovereign debt crisis under control.
"There is a much greater likelihood of its ending badly," said a Singapore-based trader.
20111115 1715 Regional Markets EOD Daily Chart Study.
DJIA chart reading : pullback correction upside biased.
Hang Seng chart reading : pullback correction upside biased.
KLCI chart reading : pullback correction little upside biased.
20111115 1052 Global Market & Commodities Related News.
GLOBAL MARKETS-Asian shares fall as euro zone yields rise
TOKYO, Nov 15 (Reuters) - Asian shares fell on Tuesday, as a rise in euro zone bond yields reflected lingering doubts about the ability of politicians in Italy and Greece to push through painful reforms to resolve their debt crises and win market confidence.
"Global financial markets are facing a key pivotal point," said Barclays Capital analysts in a research note.
COMMODITIES-Oil leads drop as markets turn volatile
NEW YORK, Nov 14 (Reuters) - Oil prices fell on Monday after new governments in Italy and Greece failed to assuage fears about Europe's debt crisis, threatening to put commodities on a renewed path of volatility.
"The markets are realizing there are real economic problems in Europe," Christophe Barret, oil analyst at Credit Agricole, said as the weak industrial data, political woes and the euro-era high price for Italy's 5-year bonds combined to pressure global markets.
Oil falls on weak euro zone data, recession worry
NEW YORK, Nov 14 (Reuters) - Oil prices fell on Monday as contracting industrial output in the euro zone highlighted the danger of recession in the region as Europe struggles to contain its sovereign debt crisis.
"The markets are realizing there are real economic problems in Europe," said Christophe Barret, global oil analyst at French bank Credit Agricole.
POLL-U.S. crude stocks seen down on lower imports, higher runs
Nov 14 (Reuters) - U.S. crude oil inventories are expected to have dropped last week for the second straight time on lower imports and slightly higher refinery runs, a preliminary Reuters poll of analysts showed on Monday.
On average, U.S. crude stockpiles were forecast down 1.1 million barrels for the week ended Nov. 11, the poll of seven analysts showed. In the week to Nov. 4, crude stocks in the United States fell 1.37 million barrels to 338.09 million barrels, data from Energy Information Administration (EIA) showed.
Libya data forecasts full crude exports end-2012
LONDON, Nov 14 (Reuters) - Libya's National Oil Corporation (NOC) expects crude exports to rise to 1.345 million barrels per day (bpd) by the fourth quarter of 2012, indicating the OPEC member's oil is returning to the international market faster than expected.
The NOC made the forecast in a table entitled "Estimated Daily Production", which was sent to NOC clients and seen by Reuters on Monday.
S.Korea October LNG imports rise 9 pct y/y
SEOUL, Nov 15 (Reuters) - South Korea's imports of liquefied natural gas (LNG) jumped 9 percent in October over a year earlier, as the world's second-largest LNG buyer built its inventory ahead of winter demand, customs data showed on Tuesday.
South Korea imported 2.98 million tonnes of LNG in October, up from 2.74 million tonnes a year earlier, the Korea Customs Service data showed. It imported LNG mostly from Indonesia, Qatar, Malaysia, Oman and Russia.
Euro Coal-S.African prices fall $1/T with oil
LONDON, Nov 14 (Reuters) - Prompt physical coal prices dropped by around $1.00 a tonne or 0.9 percent on Monday following oil's $2 loss on worries over implementation of reforms in Italy and Greece after naming new leaders and lower industrial output in the euro zone .
"We're living in a post-RWE world and there are more sellers now than there were a few weeks ago," one major European trader said.
Natural gas ends down 3.5 pct on weather, supply
NEW YORK, Nov 14 (Reuters) - U.S. natural gas futures ended down on Monday for a fourth straight day, with concerns about growing supplies and fairly mild U.S. weather in November again driving most contracts to new lows.
"We don't have the space heating load yet, and unfortunately, we're probably looking at at least two more weeks of storage injections," a Texas trader said, noting storage will head into winter at record highs for a third straight year.
TOKYO, Nov 15 (Reuters) - Asian shares fell on Tuesday, as a rise in euro zone bond yields reflected lingering doubts about the ability of politicians in Italy and Greece to push through painful reforms to resolve their debt crises and win market confidence.
"Global financial markets are facing a key pivotal point," said Barclays Capital analysts in a research note.
COMMODITIES-Oil leads drop as markets turn volatile
NEW YORK, Nov 14 (Reuters) - Oil prices fell on Monday after new governments in Italy and Greece failed to assuage fears about Europe's debt crisis, threatening to put commodities on a renewed path of volatility.
"The markets are realizing there are real economic problems in Europe," Christophe Barret, oil analyst at Credit Agricole, said as the weak industrial data, political woes and the euro-era high price for Italy's 5-year bonds combined to pressure global markets.
Oil falls on weak euro zone data, recession worry
NEW YORK, Nov 14 (Reuters) - Oil prices fell on Monday as contracting industrial output in the euro zone highlighted the danger of recession in the region as Europe struggles to contain its sovereign debt crisis.
"The markets are realizing there are real economic problems in Europe," said Christophe Barret, global oil analyst at French bank Credit Agricole.
POLL-U.S. crude stocks seen down on lower imports, higher runs
Nov 14 (Reuters) - U.S. crude oil inventories are expected to have dropped last week for the second straight time on lower imports and slightly higher refinery runs, a preliminary Reuters poll of analysts showed on Monday.
On average, U.S. crude stockpiles were forecast down 1.1 million barrels for the week ended Nov. 11, the poll of seven analysts showed. In the week to Nov. 4, crude stocks in the United States fell 1.37 million barrels to 338.09 million barrels, data from Energy Information Administration (EIA) showed.
Libya data forecasts full crude exports end-2012
LONDON, Nov 14 (Reuters) - Libya's National Oil Corporation (NOC) expects crude exports to rise to 1.345 million barrels per day (bpd) by the fourth quarter of 2012, indicating the OPEC member's oil is returning to the international market faster than expected.
The NOC made the forecast in a table entitled "Estimated Daily Production", which was sent to NOC clients and seen by Reuters on Monday.
S.Korea October LNG imports rise 9 pct y/y
SEOUL, Nov 15 (Reuters) - South Korea's imports of liquefied natural gas (LNG) jumped 9 percent in October over a year earlier, as the world's second-largest LNG buyer built its inventory ahead of winter demand, customs data showed on Tuesday.
South Korea imported 2.98 million tonnes of LNG in October, up from 2.74 million tonnes a year earlier, the Korea Customs Service data showed. It imported LNG mostly from Indonesia, Qatar, Malaysia, Oman and Russia.
Euro Coal-S.African prices fall $1/T with oil
LONDON, Nov 14 (Reuters) - Prompt physical coal prices dropped by around $1.00 a tonne or 0.9 percent on Monday following oil's $2 loss on worries over implementation of reforms in Italy and Greece after naming new leaders and lower industrial output in the euro zone .
"We're living in a post-RWE world and there are more sellers now than there were a few weeks ago," one major European trader said.
Natural gas ends down 3.5 pct on weather, supply
NEW YORK, Nov 14 (Reuters) - U.S. natural gas futures ended down on Monday for a fourth straight day, with concerns about growing supplies and fairly mild U.S. weather in November again driving most contracts to new lows.
"We don't have the space heating load yet, and unfortunately, we're probably looking at at least two more weeks of storage injections," a Texas trader said, noting storage will head into winter at record highs for a third straight year.
20111115 1018 Global Economic Related News.
India: Inflation exceeds 9% for 11th month, reducing scope for rate pause
India’s inflation exceeded 9% for an 11th straight month, crimping the central bank’s scope to keep interest rates unchanged and shield the economy from a faltering global recovery. The benchmark wholesale-price index rose 9.73% in October from a year earlier, the commerce ministry said in a statement in New Delhi today. That compares with a 9.72% jump in September and the median forecast of 9.65% in a Bloomberg News survey of 19 economists. Asian nations from Indonesia to South Korea are either cutting rates or keeping them on hold to protect expansion as Europe’s debt crisis threatens to trigger a global slump. India’s central bank last month signaled it’s nearing the end of monetary tightening, provided inflation slows, after it raised rates for the 13th time since mid-March 2010. (Bloomberg)
Japan: Economy expands at 6% pace as exports drive post-earthquake recovery
Japan’s economy expanded for the first time in four quarters as exports recovered from a record earthquake, an expansion that is already slowing because of weakening overseas demand. Gross domestic product grew at an annualized 6% in the three months ending 30 Sept, the fastest pace in 1 1/2-years, the Cabinet Office said today in Tokyo. At JPY543trn (USD7trn), economic output was back to levels seen before the 11 March earthquake. A sustained rebound will depend on how much reconstruction demand can offset a slowdown in global growth as Europe’s debt crisis damps global confidence and an appreciating yen erodes profits. (Bloomberg)
Russia: Growth accelerated in third quarter for first time since last year
Russia’s economic growth accelerated in the third quarter for the first time since last year as companies stepped up investment and bank lending buoyed consumer spending. Gross domestic product expanded 4.8% from a year earlier, the fastest pace since the second quarter of 2010, after increasing 3.4% in the previous three months, the Federal Statistics Service said in an e-mailed statement today. The median estimate in a Bloomberg survey of 14 economists was 5%. The Economy Ministry estimated it at 5.1%. The world’s largest energy exporter is counting on domestic consumption to balance shrinking demand abroad as Europe fights to staunch a debt crisis. (Bloomberg)
Argentina: Cuts reserve requirements after deposits tumble by USD645m
Argentina’s central bank cut dollar reserve requirements after bank deposits plunged USD645m last week following the government’s moves to restrict foreign exchange purchases in South America’s second-biggest economy. Argentine banks will be required to hold just 20% of their dollar deposits at the central bank as reserves, Banco Central de la Republica Argentina said in a 11 Nov statement. Banks previously had to keep all dollar savings not being used to finance exporters at the central bank. President Cristina Fernandez de Kirchner’s efforts to slow capital flight since her 23 Oct re-election by ramping up oversight of foreign exchange purchases, ordering energy and mining companies to repatriate export revenue and telling insurance companies to bring investments back to the country sent investors to banks to withdraw dollars. (Bloomberg)
India’s inflation exceeded 9% for an 11th straight month, crimping the central bank’s scope to keep interest rates unchanged and shield the economy from a faltering global recovery. The benchmark wholesale-price index rose 9.73% in October from a year earlier, the commerce ministry said in a statement in New Delhi today. That compares with a 9.72% jump in September and the median forecast of 9.65% in a Bloomberg News survey of 19 economists. Asian nations from Indonesia to South Korea are either cutting rates or keeping them on hold to protect expansion as Europe’s debt crisis threatens to trigger a global slump. India’s central bank last month signaled it’s nearing the end of monetary tightening, provided inflation slows, after it raised rates for the 13th time since mid-March 2010. (Bloomberg)
Japan: Economy expands at 6% pace as exports drive post-earthquake recovery
Japan’s economy expanded for the first time in four quarters as exports recovered from a record earthquake, an expansion that is already slowing because of weakening overseas demand. Gross domestic product grew at an annualized 6% in the three months ending 30 Sept, the fastest pace in 1 1/2-years, the Cabinet Office said today in Tokyo. At JPY543trn (USD7trn), economic output was back to levels seen before the 11 March earthquake. A sustained rebound will depend on how much reconstruction demand can offset a slowdown in global growth as Europe’s debt crisis damps global confidence and an appreciating yen erodes profits. (Bloomberg)
Russia: Growth accelerated in third quarter for first time since last year
Russia’s economic growth accelerated in the third quarter for the first time since last year as companies stepped up investment and bank lending buoyed consumer spending. Gross domestic product expanded 4.8% from a year earlier, the fastest pace since the second quarter of 2010, after increasing 3.4% in the previous three months, the Federal Statistics Service said in an e-mailed statement today. The median estimate in a Bloomberg survey of 14 economists was 5%. The Economy Ministry estimated it at 5.1%. The world’s largest energy exporter is counting on domestic consumption to balance shrinking demand abroad as Europe fights to staunch a debt crisis. (Bloomberg)
Argentina: Cuts reserve requirements after deposits tumble by USD645m
Argentina’s central bank cut dollar reserve requirements after bank deposits plunged USD645m last week following the government’s moves to restrict foreign exchange purchases in South America’s second-biggest economy. Argentine banks will be required to hold just 20% of their dollar deposits at the central bank as reserves, Banco Central de la Republica Argentina said in a 11 Nov statement. Banks previously had to keep all dollar savings not being used to finance exporters at the central bank. President Cristina Fernandez de Kirchner’s efforts to slow capital flight since her 23 Oct re-election by ramping up oversight of foreign exchange purchases, ordering energy and mining companies to repatriate export revenue and telling insurance companies to bring investments back to the country sent investors to banks to withdraw dollars. (Bloomberg)
20111115 1017 Malaysia Corporate Related News.
Spurts in penny stocks result in unusual market activity queries
With penny stock spurts resulting in nine queries in half a month, November is turning out to be a record month for so-called unusual market activity (UMA) queries. Three queries were issued yesterday to SYF Resources, DPS Resources and Flonic Hi-Tech. SYF saw 60% of its share base traded on the open market while DPS saw more than 100% of its shares changing hands. Flonic has gained 87% over seven market days, while Harvest Court is now 28 times the value it closed at seven weeks ago. Others that have been queried so far this month are Emico, Hibiscus Petroleum, Sanichi Technology, GPRO Technologies and Maxbiz. (Financial Daily)
Penang rolls out RM5bn-RM8bn infrastructure jobs
The Penang government will pay developers with prime land around the tourist belt area of Gurney Drive to construct three bypass highways and a sea tunnel linking the island to the mainland to reduce traffic congestion in the state. Of the four projects, the Penang government plans to build a 6.5km undersea tunnel connecting Butterworth on the mainland and Gurney Drive, from which a 4.2km bypass would be constructed linking it to the Tun Dr Lim Chong Eu Expressway. There is also intention to establish a light-rail transit network. These public-private partnership projects would be undertaken via open tenders involving domestic and foreign construction companies. The projects are estimated to cost RM5bn to RM8bn, with a targeted completion in 2020. (The Star)
Pavilion targets RM695m from IPO
Pavilion REIT Management SB launched the prospectus for Pavilion REIT with a proposed listing on the Main Market of Bursa Malaysia on 7 Dec 2011. Pavilion REIT will offer 790m units at an indicative retail price of RM0.88 per unit, raising gross proceeds of approximately RM695m from the IPO. The company plans to use a majority of the proceeds as part payment for the acquisition of the initial property portfolio while the remaining amount will be utilized as working capital and listing expenses. (Malaysian Reserve)
Gleneagles to open 2 more hospitals by 2014
Gleneagles Hospital, under its parent company Parkway Pantai Ltd, is set to open two more hospitals in Malaysia by 2014, at an approximate cost of RM700m. The two new hospitals, located in Iskandar Malaysia and Kota Kinabalu, are now seeing earthworks development and should be fully operational by 2014. The hospital in the Iskandar region will host an initial 150 beds but boast a total capacity of 300, while that in Kota Kinabalu will have 200. (BT)
Malton buys Gombak land for residential project
Malton has acquired a 56.05-acre parcel of land in Gombak, Selangor for a total consideration of RM105m (RM43 per sq ft) for a proposed residential development with an estimated GDV of RM500m. The company has entered into a sale and purchase agreement to acquire the land from Ukay Spring Development SB. (Financial Daily)
With penny stock spurts resulting in nine queries in half a month, November is turning out to be a record month for so-called unusual market activity (UMA) queries. Three queries were issued yesterday to SYF Resources, DPS Resources and Flonic Hi-Tech. SYF saw 60% of its share base traded on the open market while DPS saw more than 100% of its shares changing hands. Flonic has gained 87% over seven market days, while Harvest Court is now 28 times the value it closed at seven weeks ago. Others that have been queried so far this month are Emico, Hibiscus Petroleum, Sanichi Technology, GPRO Technologies and Maxbiz. (Financial Daily)
Penang rolls out RM5bn-RM8bn infrastructure jobs
The Penang government will pay developers with prime land around the tourist belt area of Gurney Drive to construct three bypass highways and a sea tunnel linking the island to the mainland to reduce traffic congestion in the state. Of the four projects, the Penang government plans to build a 6.5km undersea tunnel connecting Butterworth on the mainland and Gurney Drive, from which a 4.2km bypass would be constructed linking it to the Tun Dr Lim Chong Eu Expressway. There is also intention to establish a light-rail transit network. These public-private partnership projects would be undertaken via open tenders involving domestic and foreign construction companies. The projects are estimated to cost RM5bn to RM8bn, with a targeted completion in 2020. (The Star)
Pavilion targets RM695m from IPO
Pavilion REIT Management SB launched the prospectus for Pavilion REIT with a proposed listing on the Main Market of Bursa Malaysia on 7 Dec 2011. Pavilion REIT will offer 790m units at an indicative retail price of RM0.88 per unit, raising gross proceeds of approximately RM695m from the IPO. The company plans to use a majority of the proceeds as part payment for the acquisition of the initial property portfolio while the remaining amount will be utilized as working capital and listing expenses. (Malaysian Reserve)
Gleneagles to open 2 more hospitals by 2014
Gleneagles Hospital, under its parent company Parkway Pantai Ltd, is set to open two more hospitals in Malaysia by 2014, at an approximate cost of RM700m. The two new hospitals, located in Iskandar Malaysia and Kota Kinabalu, are now seeing earthworks development and should be fully operational by 2014. The hospital in the Iskandar region will host an initial 150 beds but boast a total capacity of 300, while that in Kota Kinabalu will have 200. (BT)
Malton buys Gombak land for residential project
Malton has acquired a 56.05-acre parcel of land in Gombak, Selangor for a total consideration of RM105m (RM43 per sq ft) for a proposed residential development with an estimated GDV of RM500m. The company has entered into a sale and purchase agreement to acquire the land from Ukay Spring Development SB. (Financial Daily)
20111115 1011 Global Market Related News.
Asia Stocks Fall as Italian Yields Stoke Concern (Source: Bloomberg)
Asian stocks fell, paring yesterday’s advance, after Italian borrowing costs surged at a note sale, reviving concern Europe’s sovereign-debt crisis is spreading, damping investor confidence for riskier assets. Sony Corp. (6758), Japan’s No. 1 exporter of consumer electronics, fell 1.9 percent. Paladin Energy Ltd. (PDN), an Australian firm producing uranium in Africa, jumped 8.4 percent as Australian Prime Minister Julia Gillard seeks to overturn a ban on uranium shipments to India. The MSCI Asia Pacific Index dropped 0.3 percent to 118.38 as of 9:16 a.m. in Tokyo. The measure rose 1.2 percent yesterday, paring two weeks of losses.
U.S. Stocks Decline as European Debt Concerns Return; Boeing Shares Gain (Source: Bloomberg)
U.S. stocks declined, snapping a two-day advance in the Standard & Poor’s 500 Index, as an increase in Italian borrowing costs deepened concern Europe will struggle to contain its sovereign debt crisis. Morgan Stanley and Citigroup Inc. (C) fell more than 2.6 percent. Bank of America Corp. (BAC) slid 2.6 percent after agreeing to sell most of its China Construction Bank Corp. stake to boost capital. Bank of New York Mellon Corp. (BK) slid 4.5 percent as the world’s largest custody bank said it would book a charge of as much as $100 million this quarter. Boeing Co. (BA) added 1.5 percent after winning a record $26 billion order from Emirates. The S&P 500 retreated 1 percent to 1,251.78 at 4 p.m. New York time. The Dow Jones Industrial Average decreased 74.70 points, or 0.6 percent, to 12,078.98. About 5.5 billion shares changed hands on U.S. exchanges, the lowest since April 25.
European Stocks Decline as Borrowing Costs Rise; Banks Retreat (Source: Bloomberg)
European stocks dropped as Italy’s borrowing costs rose after the nation sold 3 billion euros ($4.1 billion) of bonds at the highest yield since 1997. UniCredit SpA (UCG) dropped 6.2 percent after Italy’s largest bank approved a 7.5 billion-euro share sale. Banco Bilbao Vizcaya Argentaria SA (BBVA) led Spanish lenders lower as the nation’s borrowing costs climbed. Hochtief AG (HOT) plunged 11 percent after the construction company said the sale of its airport-operating business has been delayed. The benchmark Stoxx Europe 600 Index retreated 1 percent to 238.47 at the close in London, with all 19 industry groups declining. The cost of insuring against default on sovereign and corporate debt advanced, according to traders of credit-default swaps.
Japanese Stocks Decline as Surging Italian Yields Revive Europe Concern (Source: Bloomberg)
Japan’s Nikkei 225 (NKY) Stock Average fell for the first time in three days, after Italian and Spanish borrowing costs surged, reviving concern Europe’s sovereign-debt crisis is spreading and damping appetite for riskier assets. Nintendo Co., the video-game company that gets more than 40 percent of sales in Europe, sank 2 percent. Inpex Corp. (1605), Japan’s top energy explorer by market value, slid 2.6 percent after crude prices dropped yesterday. Sumitomo Mitsui Financial Group Inc. (8316), Japan’s second-biggest bank by market value, gained 2.7 percent after raising its full-year profit forecast. Olympus Corp. (7733) was poised to soar, extending yesterday’s surge after a report the scandal-hit company may avoid delisting. The Nikkei 225 declined 0.5 percent to 8,563.93 as of 10:30 a.m. in Tokyo, headed for its first drop in three days. The broader Topix index retreated 0.3 percent to 733.54.
Fed Economists: 2012 Recession Odds Top 50% (Source: Bloomberg)
The odds of a U.S. recession in early 2012 exceed 50 percent as a result of Europe’s debt crisis, according to researchers at the Federal Reserve Bank of San Francisco. “Prudence suggests that the fragile state of the U.S. economy would not easily withstand turbulence coming across the Atlantic,” economist Travis Berge, research associate Early Elias and research advisor Oscar Jorda wrote in a paper released by the bank today. “A European sovereign debt default may well sink the United States back into recession.” The probability that the world’s largest economy will slip into another slump has increased since last year, when Berge and Jorda estimated a one-in-two chance such an event would occur toward the first six months of 2012.
Fed’s Fisher Sees U.S. Poised for Growth (Source: Bloomberg)
Federal Reserve Bank of Dallas President Richard Fisher said the U.S. economy is “poised for growth” going into next year and that he sees a declining likelihood the central bank will need to ease further. “The direction we’re moving in is positive,” the policy maker said today in an interview from Bloomberg’s headquarters in New York. He said he expects gross domestic product to expand by 2.5 percent to 3 percent in the fourth quarter, “gradually getting better as we go through time.” Fisher’s comments contrast with those of Chairman Ben S. Bernanke, who predicted on Nov. 2 that the pace of recovery will be “frustratingly slow,” and with researchers at the San Francisco Fed, who project a better than 50 percent chance of recession early next year. The Dallas Fed president is among the most vocal critics of Fed policy, dissenting twice this year against moves to push down long-term rates and keep the benchmark U.S. interest rate low until at least June 2013.
He voted five times in 2008 in favor of tighter policy.
Treasuries Hold Gain on Italy Debt Losses; Gross Sees Low Rates (Source: Bloomberg)
Treasuries held a gain from yesterday as declines in Italian and Spanish bonds added to concern that Europe will struggle to contain a debt crisis that is threatening to slow global economic growth. The Federal Reserve will keep interest rates low “for a number of years” to support the U.S. economy, said Bill Gross, who runs the world’s biggest bond fund at Pacific Investment Management Co. Thirty-year bonds advanced yesterday after the Fed purchased securities maturing from 2036 to 2041 as part of its Operation Twist policy of swapping holdings of shorter-term Treasuries for longer maturities. “Concerns surrounding Europe are likely to keep yields from rising,” said Hitoshi Asaoka, a senior strategist in Tokyo at Mizuho Trust & Banking Co., part of Japan’s third-largest publicly traded bank. “Treasuries are being bought in a mild risk-off environment.”
China Wary of Choking on U.S. Dollar Driving Hong Kong Dim Sum Debt Sales (Source: Bloomberg)
The helicopter swooped over Hong Kong’s Victoria Harbor trailing a huge red-and-white banner: RMB SOVEREIGN BONDS. There were billboards on buses and banks and at the entrance to the cross-harbor tunnel. The city’s biggest sale of bonds in China’s currency, the renminbi, may not have blown away the man and woman on the street. Yet the burst of advertising in August did signal just how important the event was to the Beijing government and to the bankers and traders who feed off the Chinese economy, Bloomberg Markets magazine reports in its December issue. Nicknamed Dim Sum bonds after Hong Kong’s favorite dining pastime, the securities are the hottest financial innovation in town.
Shanghai Cuts Rates in Nation’s First Muni Bonds (Source: Bloomberg)
Shanghai may cut its borrowing costs by almost two percentage points as China allows local governments to sell bonds for the first time, helping policy makers reorganize 10.7 trillion yuan ($1.7 trillion) of debt. The city will probably sell 3.6 billion yuan of three-year notes at 3.15 percent and 3.5 billion yuan of five-year securities at 3.35 percent today, according to the median estimates in a Bloomberg survey of seven finance companies. Five-year bonds sold by companies set up by the city to fund infrastructure yield an average 5 percent, data compiled by Bloomberg show. Tax-exempt, top-rated five-year U.S. municipal debt yields 1.1 percent, according to a Bloomberg index.
The market for regional authorities’ debt, which hasn’t existed since the Communist Party took power in 1949, will require issuers to publish annual reports and stipulate clearer obligations than for the more than 6,000 companies set up by local governments to raise money for sewers, bridges and toll roads. China’s non-performing loans may surge to 12 percent in the next few years from about 1.8 percent at the end of September as many of the enterprises lack sufficient revenue to service debt, Credit Suisse Group AG said in an Oct. 12 report.
Japan Economy Expands at 6% Pace as Exports Drive Post-Earthquake Recovery (Source: Bloomberg)
Japan’s economy expanded for the first time in four quarters as exports recovered from a record earthquake, an expansion that is already slowing because of weakening overseas demand. Gross domestic product grew at an annualized 6 percent in the three months ending Sept. 30, the fastest pace in 1 1/2- years, the Cabinet Office said today in Tokyo. At 543 trillion yen ($7 trillion), economic output was back to levels seen before the March 11 earthquake, the report showed. Japan’s return to growth after three quarters of contraction was driven by companies including Toyota Motor Corp. making up for lost output from the disaster. A sustained rebound will depend on how much reconstruction demand can offset a slowdown in global growth as Europe’s debt crisis damps global confidence and an appreciating yen erodes profits.
India’s Inflation Exceeds 9% for 11th Month, Reducing Scope for Rate Pause (Source: Bloomberg)
India’s inflation exceeded 9 percent for an 11th straight month, crimping the central bank’s scope to keep interest rates unchanged and shield the economy from a faltering global recovery. The benchmark wholesale-price index rose 9.73 percent in October from a year earlier, the commerce ministry said in a statement in New Delhi today. That compares with a 9.72 percent jump in September and the median forecast of 9.65 percent in a Bloomberg News survey of 19 economists. Asian nations from Indonesia to South Korea are either cutting rates or keeping them on hold to protect expansion as Europe’s debt crisis threatens to trigger a global slump. India’s central bank last month signaled it’s nearing the end of monetary tightening, provided inflation slows, after it raised rates for the 13th time since mid-March 2010.
“Prices are not coming off,” said Madan Sabnavis, chief economist at Mumbai-based ratings company Credit Analysis & Research Ltd. “The RBI will have to probably revisit its guidance if inflation remains elevated.”
Indonesia Sells $1B Sukuk at Half 2009 Yield (Source: Bloomberg)
Indonesia sold $1 billion of seven- year Shariah-compliant bonds at half the borrowing cost of its previous sale in 2009, reflecting investor optimism that the nation may win an investment-grade debt rating. The dollar-denominated securities sold at 4 percent, data compiled by Bloomberg show. The sale targeted a rate of 4.25 percent, said a person familiar with the transaction, who asked not to be identified as the details are private. The nation’s debut sukuk, $650 million worth of five-year debt, was issued in April 2009 at 8.8 percent. Indonesia’s foreign-exchange reserves have more than doubled since 2009, while the government of President Susilo Bambang Yudhoyono is targeting economic growth of 6.5 percent this year, the fastest since the Asian financial crisis in 1998. Standard & Poor’s raised Indonesia’s foreign-currency rating to BB+ in April, with a positive outlook, signaling the country may be on the verge of winning investment-grade status.
Argentina Cuts Reserve Requirements After Deposits Tumble by $645 Million (Source: Bloomberg)
Argentina’s central bank cut dollar reserve requirements after bank deposits plunged $645 million last week following the government’s moves to restrict foreign exchange purchases in South America’s second-biggest economy. Argentine banks will be required to hold just 20 percent of their dollar deposits at the central bank as reserves, Banco Central de la Republica Argentina said in a Nov. 11 statement. Banks previously had to keep all dollar savings not being used to finance exporters at the central bank. President Cristina Fernandez de Kirchner’s efforts to slow capital flight since her Oct. 23 re-election by ramping up oversight of foreign exchange purchases, ordering energy and mining companies to repatriate export revenue and telling insurance companies to bring investments back to the country sent investors to banks to withdraw dollars.
Russian Growth Accelerated in Third Quarter for First Time Since Last Year (Source: Bloomberg)
Russia’s economic growth accelerated in the third quarter for the first time since last year as companies stepped up investment and bank lending buoyed consumer spending. Gross domestic product expanded 4.8 percent from a year earlier, the fastest pace since the second quarter of 2010, after increasing 3.4 percent in the previous three months, the Federal Statistics Service said in an e-mailed statement today. The median estimate in a Bloomberg survey of 14 economists was 5 percent. The Economy Ministry estimated it at 5.1 percent. The world’s largest energy exporter is counting on domestic consumption to balance shrinking demand abroad as Europe fights to staunch a debt crisis. Prime Minister Vladimir Putin, who will run for president next year, is seeking annual growth of between 6 percent and 7 percent and turn the economy into one of the world’s five largest.
Euro Maintains Decline Before German Confidence Data, Spanish Bill Auction (Source: Bloomberg)
The euro held losses before a report forecast to show German investor confidence fell to a three-year low as Europe’s debt crisis threatens to curb economic growth. The 17-nation currency weakened against half of its 16 major peers as Spain prepares to sell up to 4 billion euros ($5.5 billion) of bonds on Nov. 17 after Italy’s borrowing costs surged to the highest level since 1997 at a note sale yesterday. Australia’s dollar snapped a decline from yesterday after the nation’s central bank said in minutes to its Nov. 1 meeting that there was a case for keeping interest rates unchanged even though policy makers lowered the benchmark. “A poor reading is expected for November, but probably the risk is that we get an even weaker result on the ZEW survey and that just adds to the poor sentiment over Europe,” said Besa Deda, chief economist at St. George Bank Ltd. in Sydney. “In the short term you must be bearish euro given that the sovereign-debt crisis hasn’t been contained and downside risks remain.”
Asian stocks fell, paring yesterday’s advance, after Italian borrowing costs surged at a note sale, reviving concern Europe’s sovereign-debt crisis is spreading, damping investor confidence for riskier assets. Sony Corp. (6758), Japan’s No. 1 exporter of consumer electronics, fell 1.9 percent. Paladin Energy Ltd. (PDN), an Australian firm producing uranium in Africa, jumped 8.4 percent as Australian Prime Minister Julia Gillard seeks to overturn a ban on uranium shipments to India. The MSCI Asia Pacific Index dropped 0.3 percent to 118.38 as of 9:16 a.m. in Tokyo. The measure rose 1.2 percent yesterday, paring two weeks of losses.
U.S. Stocks Decline as European Debt Concerns Return; Boeing Shares Gain (Source: Bloomberg)
U.S. stocks declined, snapping a two-day advance in the Standard & Poor’s 500 Index, as an increase in Italian borrowing costs deepened concern Europe will struggle to contain its sovereign debt crisis. Morgan Stanley and Citigroup Inc. (C) fell more than 2.6 percent. Bank of America Corp. (BAC) slid 2.6 percent after agreeing to sell most of its China Construction Bank Corp. stake to boost capital. Bank of New York Mellon Corp. (BK) slid 4.5 percent as the world’s largest custody bank said it would book a charge of as much as $100 million this quarter. Boeing Co. (BA) added 1.5 percent after winning a record $26 billion order from Emirates. The S&P 500 retreated 1 percent to 1,251.78 at 4 p.m. New York time. The Dow Jones Industrial Average decreased 74.70 points, or 0.6 percent, to 12,078.98. About 5.5 billion shares changed hands on U.S. exchanges, the lowest since April 25.
European Stocks Decline as Borrowing Costs Rise; Banks Retreat (Source: Bloomberg)
European stocks dropped as Italy’s borrowing costs rose after the nation sold 3 billion euros ($4.1 billion) of bonds at the highest yield since 1997. UniCredit SpA (UCG) dropped 6.2 percent after Italy’s largest bank approved a 7.5 billion-euro share sale. Banco Bilbao Vizcaya Argentaria SA (BBVA) led Spanish lenders lower as the nation’s borrowing costs climbed. Hochtief AG (HOT) plunged 11 percent after the construction company said the sale of its airport-operating business has been delayed. The benchmark Stoxx Europe 600 Index retreated 1 percent to 238.47 at the close in London, with all 19 industry groups declining. The cost of insuring against default on sovereign and corporate debt advanced, according to traders of credit-default swaps.
Japanese Stocks Decline as Surging Italian Yields Revive Europe Concern (Source: Bloomberg)
Japan’s Nikkei 225 (NKY) Stock Average fell for the first time in three days, after Italian and Spanish borrowing costs surged, reviving concern Europe’s sovereign-debt crisis is spreading and damping appetite for riskier assets. Nintendo Co., the video-game company that gets more than 40 percent of sales in Europe, sank 2 percent. Inpex Corp. (1605), Japan’s top energy explorer by market value, slid 2.6 percent after crude prices dropped yesterday. Sumitomo Mitsui Financial Group Inc. (8316), Japan’s second-biggest bank by market value, gained 2.7 percent after raising its full-year profit forecast. Olympus Corp. (7733) was poised to soar, extending yesterday’s surge after a report the scandal-hit company may avoid delisting. The Nikkei 225 declined 0.5 percent to 8,563.93 as of 10:30 a.m. in Tokyo, headed for its first drop in three days. The broader Topix index retreated 0.3 percent to 733.54.
Fed Economists: 2012 Recession Odds Top 50% (Source: Bloomberg)
The odds of a U.S. recession in early 2012 exceed 50 percent as a result of Europe’s debt crisis, according to researchers at the Federal Reserve Bank of San Francisco. “Prudence suggests that the fragile state of the U.S. economy would not easily withstand turbulence coming across the Atlantic,” economist Travis Berge, research associate Early Elias and research advisor Oscar Jorda wrote in a paper released by the bank today. “A European sovereign debt default may well sink the United States back into recession.” The probability that the world’s largest economy will slip into another slump has increased since last year, when Berge and Jorda estimated a one-in-two chance such an event would occur toward the first six months of 2012.
Fed’s Fisher Sees U.S. Poised for Growth (Source: Bloomberg)
Federal Reserve Bank of Dallas President Richard Fisher said the U.S. economy is “poised for growth” going into next year and that he sees a declining likelihood the central bank will need to ease further. “The direction we’re moving in is positive,” the policy maker said today in an interview from Bloomberg’s headquarters in New York. He said he expects gross domestic product to expand by 2.5 percent to 3 percent in the fourth quarter, “gradually getting better as we go through time.” Fisher’s comments contrast with those of Chairman Ben S. Bernanke, who predicted on Nov. 2 that the pace of recovery will be “frustratingly slow,” and with researchers at the San Francisco Fed, who project a better than 50 percent chance of recession early next year. The Dallas Fed president is among the most vocal critics of Fed policy, dissenting twice this year against moves to push down long-term rates and keep the benchmark U.S. interest rate low until at least June 2013.
He voted five times in 2008 in favor of tighter policy.
Treasuries Hold Gain on Italy Debt Losses; Gross Sees Low Rates (Source: Bloomberg)
Treasuries held a gain from yesterday as declines in Italian and Spanish bonds added to concern that Europe will struggle to contain a debt crisis that is threatening to slow global economic growth. The Federal Reserve will keep interest rates low “for a number of years” to support the U.S. economy, said Bill Gross, who runs the world’s biggest bond fund at Pacific Investment Management Co. Thirty-year bonds advanced yesterday after the Fed purchased securities maturing from 2036 to 2041 as part of its Operation Twist policy of swapping holdings of shorter-term Treasuries for longer maturities. “Concerns surrounding Europe are likely to keep yields from rising,” said Hitoshi Asaoka, a senior strategist in Tokyo at Mizuho Trust & Banking Co., part of Japan’s third-largest publicly traded bank. “Treasuries are being bought in a mild risk-off environment.”
China Wary of Choking on U.S. Dollar Driving Hong Kong Dim Sum Debt Sales (Source: Bloomberg)
The helicopter swooped over Hong Kong’s Victoria Harbor trailing a huge red-and-white banner: RMB SOVEREIGN BONDS. There were billboards on buses and banks and at the entrance to the cross-harbor tunnel. The city’s biggest sale of bonds in China’s currency, the renminbi, may not have blown away the man and woman on the street. Yet the burst of advertising in August did signal just how important the event was to the Beijing government and to the bankers and traders who feed off the Chinese economy, Bloomberg Markets magazine reports in its December issue. Nicknamed Dim Sum bonds after Hong Kong’s favorite dining pastime, the securities are the hottest financial innovation in town.
Shanghai Cuts Rates in Nation’s First Muni Bonds (Source: Bloomberg)
Shanghai may cut its borrowing costs by almost two percentage points as China allows local governments to sell bonds for the first time, helping policy makers reorganize 10.7 trillion yuan ($1.7 trillion) of debt. The city will probably sell 3.6 billion yuan of three-year notes at 3.15 percent and 3.5 billion yuan of five-year securities at 3.35 percent today, according to the median estimates in a Bloomberg survey of seven finance companies. Five-year bonds sold by companies set up by the city to fund infrastructure yield an average 5 percent, data compiled by Bloomberg show. Tax-exempt, top-rated five-year U.S. municipal debt yields 1.1 percent, according to a Bloomberg index.
The market for regional authorities’ debt, which hasn’t existed since the Communist Party took power in 1949, will require issuers to publish annual reports and stipulate clearer obligations than for the more than 6,000 companies set up by local governments to raise money for sewers, bridges and toll roads. China’s non-performing loans may surge to 12 percent in the next few years from about 1.8 percent at the end of September as many of the enterprises lack sufficient revenue to service debt, Credit Suisse Group AG said in an Oct. 12 report.
Japan Economy Expands at 6% Pace as Exports Drive Post-Earthquake Recovery (Source: Bloomberg)
Japan’s economy expanded for the first time in four quarters as exports recovered from a record earthquake, an expansion that is already slowing because of weakening overseas demand. Gross domestic product grew at an annualized 6 percent in the three months ending Sept. 30, the fastest pace in 1 1/2- years, the Cabinet Office said today in Tokyo. At 543 trillion yen ($7 trillion), economic output was back to levels seen before the March 11 earthquake, the report showed. Japan’s return to growth after three quarters of contraction was driven by companies including Toyota Motor Corp. making up for lost output from the disaster. A sustained rebound will depend on how much reconstruction demand can offset a slowdown in global growth as Europe’s debt crisis damps global confidence and an appreciating yen erodes profits.
India’s Inflation Exceeds 9% for 11th Month, Reducing Scope for Rate Pause (Source: Bloomberg)
India’s inflation exceeded 9 percent for an 11th straight month, crimping the central bank’s scope to keep interest rates unchanged and shield the economy from a faltering global recovery. The benchmark wholesale-price index rose 9.73 percent in October from a year earlier, the commerce ministry said in a statement in New Delhi today. That compares with a 9.72 percent jump in September and the median forecast of 9.65 percent in a Bloomberg News survey of 19 economists. Asian nations from Indonesia to South Korea are either cutting rates or keeping them on hold to protect expansion as Europe’s debt crisis threatens to trigger a global slump. India’s central bank last month signaled it’s nearing the end of monetary tightening, provided inflation slows, after it raised rates for the 13th time since mid-March 2010.
“Prices are not coming off,” said Madan Sabnavis, chief economist at Mumbai-based ratings company Credit Analysis & Research Ltd. “The RBI will have to probably revisit its guidance if inflation remains elevated.”
Indonesia Sells $1B Sukuk at Half 2009 Yield (Source: Bloomberg)
Indonesia sold $1 billion of seven- year Shariah-compliant bonds at half the borrowing cost of its previous sale in 2009, reflecting investor optimism that the nation may win an investment-grade debt rating. The dollar-denominated securities sold at 4 percent, data compiled by Bloomberg show. The sale targeted a rate of 4.25 percent, said a person familiar with the transaction, who asked not to be identified as the details are private. The nation’s debut sukuk, $650 million worth of five-year debt, was issued in April 2009 at 8.8 percent. Indonesia’s foreign-exchange reserves have more than doubled since 2009, while the government of President Susilo Bambang Yudhoyono is targeting economic growth of 6.5 percent this year, the fastest since the Asian financial crisis in 1998. Standard & Poor’s raised Indonesia’s foreign-currency rating to BB+ in April, with a positive outlook, signaling the country may be on the verge of winning investment-grade status.
Argentina Cuts Reserve Requirements After Deposits Tumble by $645 Million (Source: Bloomberg)
Argentina’s central bank cut dollar reserve requirements after bank deposits plunged $645 million last week following the government’s moves to restrict foreign exchange purchases in South America’s second-biggest economy. Argentine banks will be required to hold just 20 percent of their dollar deposits at the central bank as reserves, Banco Central de la Republica Argentina said in a Nov. 11 statement. Banks previously had to keep all dollar savings not being used to finance exporters at the central bank. President Cristina Fernandez de Kirchner’s efforts to slow capital flight since her Oct. 23 re-election by ramping up oversight of foreign exchange purchases, ordering energy and mining companies to repatriate export revenue and telling insurance companies to bring investments back to the country sent investors to banks to withdraw dollars.
Russian Growth Accelerated in Third Quarter for First Time Since Last Year (Source: Bloomberg)
Russia’s economic growth accelerated in the third quarter for the first time since last year as companies stepped up investment and bank lending buoyed consumer spending. Gross domestic product expanded 4.8 percent from a year earlier, the fastest pace since the second quarter of 2010, after increasing 3.4 percent in the previous three months, the Federal Statistics Service said in an e-mailed statement today. The median estimate in a Bloomberg survey of 14 economists was 5 percent. The Economy Ministry estimated it at 5.1 percent. The world’s largest energy exporter is counting on domestic consumption to balance shrinking demand abroad as Europe fights to staunch a debt crisis. Prime Minister Vladimir Putin, who will run for president next year, is seeking annual growth of between 6 percent and 7 percent and turn the economy into one of the world’s five largest.
Euro Maintains Decline Before German Confidence Data, Spanish Bill Auction (Source: Bloomberg)
The euro held losses before a report forecast to show German investor confidence fell to a three-year low as Europe’s debt crisis threatens to curb economic growth. The 17-nation currency weakened against half of its 16 major peers as Spain prepares to sell up to 4 billion euros ($5.5 billion) of bonds on Nov. 17 after Italy’s borrowing costs surged to the highest level since 1997 at a note sale yesterday. Australia’s dollar snapped a decline from yesterday after the nation’s central bank said in minutes to its Nov. 1 meeting that there was a case for keeping interest rates unchanged even though policy makers lowered the benchmark. “A poor reading is expected for November, but probably the risk is that we get an even weaker result on the ZEW survey and that just adds to the poor sentiment over Europe,” said Besa Deda, chief economist at St. George Bank Ltd. in Sydney. “In the short term you must be bearish euro given that the sovereign-debt crisis hasn’t been contained and downside risks remain.”
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