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China property to get hit

September 30, 2010 Leave a comment

Property sector with China exposure: Yanlord, Yingli, Ho Bee, Capitaland and CapMallsAsia. Anymore?

Seems like screwing up property is a never-ending story. Cap brothers are STI component and so how much can they affect the market? But if nothing happens? Can it be the market is so strong?

Recently market is 1 day up, 1 day down, indicating market is consolidating. Looking to see if more counters break out, and can they maintain the bullishness will be a very useful indicator.

[CNA] BEIJING: China on Wednesday announced it had taken further steps to cool its red-hot property market, ordering banks not to provide loans for third home purchases and above.

The new measures are aimed at preventing house prices from rising too fast, the State Council or Cabinet said in a statement, amid fears of a speculative bubble that analysts say could derail the world’s second largest economy.

The Cabinet said down payments on all home purchases would now have to be at least 30 percent. It also limited the number of homes that people can buy in cities where prices are too high, have risen too quickly or where supply is tight.

The new measures urged banks to strengthen their oversight of consumer loans, banning them from being used to buy homes.

The Cabinet also called for a trial reform of the property tax now being carried out in some cities to be sped up and gradually expanded to the whole of China.

This is widely expected to entail an expansion of the tax on commercial real estate to cover residential houses.

The measures are the latest in a series issued this year — such as tightening restrictions on advance sales of new developments — to try and prevent the property market from overheating.

Official data has suggested that these efforts have started to pay off, with growth in China’s property prices slowing for the fourth straight month in August.

– AFP/ir

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Just before Wall St

September 23, 2010 Leave a comment

Manipulating volume is an abuse. So what about those computerized trading system where it tries to earn a pip? And hence it is important to buy counter with huge volume so that you know they will find it hard to manipulate. Imagine counters from STI component. One mountain will be higher than another.

[Edge] Singapore’s central bank fined CIMB-GK Securities trader Tan Wee Kiat Melvin $50,000 for false trading and suspended his license for three months as the city cracks down on market abuse.

Tan, who admitted contravening the securities act, made a profit of $3,800 after falsely creating the appearance of a large supply of Singapore Petroleum Co. shares on Aug 11, 2009, the Monetary Authority of Singapore said in an e-mailed statement today.

“The entry and deletion of orders with intent to artificially raise or depress the closing price of securities distorts the market and undermines its efficiency,” said Leo Mun Wai, assistant managing director of the capital markets group at the regulator. “MAS will not hesitate to take action against anyone who engages in such conduct.”

Tan had placed four sell orders for a total of 275,000 Singapore Petroleum shares in the last five minutes of trading on Aug 11, 2009, with no intention of fulfilling the orders, the regulator said. Seconds before the trading day closed, he deleted three of the orders, seeking to achieve a higher selling price for the remaining trade, according to the statement.

The central bank’s action comes as it pledged more action after winning its first civil lawsuit last week for stock rigging against fund manager Tan Chong Koay and Pheim Asset Management Sdn. The regulator also won its first civil lawsuit for insider trading against former WBL Corp. chief financial officer Kevin Lew this year.

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Cramer rules for defensive play



Now is not the good time to be hero, better play safe and defensive than too optimistic.

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Singapore May Pass China as Asia’s Fastest-Growing Economy

Bloomberg:

Singapore may overtake China as Asia’s fastest-growing economy this year, increasing the attractiveness of the city state’s stocks and putting pressure on policy makers to check inflation with a stronger currency.

Gross domestic product of the Southeast Asian island will rise 10.8 percent in 2010, according to the median of 13 estimates in a Bloomberg News survey before the July 14 second- quarter GDP report. By comparison, Goldman Sachs Group Inc., BNP Paribas and Macquarie Group Ltd. have cut estimates for China to at most 10.1 percent in recent weeks.

An acceleration in pharmaceutical output and the opening of two casino resorts boosted growth in the first half, the result of Singapore’s efforts to diversify sources of expansion beyond electronics exports. The push to bolster services may sustain the economy and support investment that spurred the island’s benchmark stock index to outperform counterparts in China, Taiwan, Japan and Australia this year.

“Singapore has unique growth characteristics of its own as a function of having some new areas of growth,” said Manraj Sekhon, the London-based head of international equities at Henderson Global Investors Ltd., whose firm oversees about $94 billion in assets, including shares in Singapore companies.

Stock Performance

Henderson has “meaningful positions” in Singapore-based companies such as Wilmar International Ltd., the world’s largest palm-oil trader, and Keppel Corp., the biggest maker of shallow- water rigs, he said. Its holdings of Singaporean stocks, also including CapitaLand Ltd. and casino operator Genting Singapore Plc, are “close to the highest positions we’ve had,” he said.

Singapore’s benchmark stock index has climbed 28 percent in the past year, more than Hong Kong’s Hang Seng and Taiwan’s Taiex, while the Shanghai benchmark has fallen 22 percent. The Straits Times Index rose 0.3 percent as of 9:45 a.m. local time.

Faster growth may prod the Monetary Authority of Singapore to do more at its next policy review in October, according to Kit Wei Zheng, an economist at Citigroup Inc. in Singapore. Wage pressures are increasing and inflation may reach 5 percent by the end of 2010, from 3.2 percent in May, he said.

“There are now higher odds for the MAS to tighten further in October via a steeper appreciation” of the Singapore dollar, he said. Citigroup, which predicts Singapore’s GDP will advance 12.5 percent this year, says there are upside risks to its forecasts and the expansion may be as much as 15 percent.

Currency Revaluation

The central bank uses the Singapore dollar instead of interest rates to manage inflation, and on April 14 allowed a revaluation and shifted to a stance of gradual appreciation. The currency rose as much as 1.2 percent on the day of the MAS announcement, before slipping the following month as Europe’s debt crisis threatened to slow the global expansion. Singapore’s $182 billion economy is about 1/24 the size of China’s.

Against the U.S. dollar, Singapore’s currency rose 0.1 percent to S$1.3787 as of 9:45 a.m., a sixth day of gains and compared with a high for the year of S$1.3649 on April 30. It may advance to S$1.36 by year-end and S$1.33 at the end of 2011, according to the median forecasts in Bloomberg News surveys.

Singapore’s ties to the global economy mean it’s unlikely to escape the impact of any renewed slowdown. Governments in Europe are embarking on austerity programs to cut budget deficits and households in some of the world’s largest economies are holding back spending, clouding the outlook for the rebound.

Cracks Showing

“Some cracks are starting to show in the global economy,” said Alvin Liew, a Singapore-based economist at Standard Chartered Plc. “Drugs and tourists likely boosted second- quarter growth above the first quarter but a Jekyll-Hyde year may see a weaker second half. Life can become very unpredictable” if you rely on pharmaceuticals and “start dabbling in casinos,” he said.

The performance of Singapore’s pharmaceutical industry is volatile as production swings by companies such as Sanofi- Aventis SA can cause industrial output to fluctuate.

Prime Minister Lee Hsien Loong’s government has raised the island’s GDP forecast twice this year as tourists arrive in record numbers, companies increase hiring and vessels leave the city’s ports carrying more cargo. The economic rebound has caused inflation to accelerate as rising demand stokes home and car prices.

Asia’s Fastest

Singapore is likely to become Asia’s fastest-growing economy this year, according to Credit Suisse Group AG and Oversea-Chinese Banking Corp. Forecasts for the island’s expansion this year range from 9.7 percent to 13 percent among the economists surveyed by Bloomberg.

Estimates by Goldman, BNP Paribas, Macquarie and China International Capital Corp. for China’s 2010 growth range from 9.5 percent to 10.1 percent. The government in Asia’s second- largest economy is scheduled to release second-quarter GDP figures on July 15.

The last time Singapore’s GDP rose more than China’s was in 2000, according to data compiled by the International Monetary Fund.

Singapore’s manufacturing increased an average 45 percent in the first five months of 2010, after declining an average 13 percent in the same period last year. Pharmaceutical output has at least doubled every month from March to May.

How come I don’t see my pay increase as fast?

“We’re the Monaco of the East, minus the bikini girls on the yachts,” Song Seng-Wun, an economist at CIMB Research Pte in Singapore

Think it’d make me just very sad. The rich gets richer, the poor gets poorer. This is especially true in Singapore. Well, it’s time to wait for the Q2 GDP figures to be released in 15th July !!! Hope my counters all move up!

Categories: news, singapore Tags: ,

Shift in equilibrium

From WSJ
TIANJIN, China—Toyota Motor Corp. suspended production at an assembly plant in China on Friday because of a strike at a supplier factory, as the impact of labor unrest escalates for the world’s largest auto maker in the biggest car market.

Hitoshi Yokoyama, a Beijing-based Toyota spokesman, said a shortage of certain plastic interior parts from the supplier plant, where workers have been striking since Thursday, began curtailing production at Toyota’s car plant in Tianjin Thursday night. By Friday afternoon, all three of its assembly lines had been idled.

Toyota doesn’t know how long the shutdown will last but is doing its best to resume work as soon as possible, Mr. Yokoyama said.

The Tianjin plant, which makes Corolla, Rav4 and other models and has capacity to produce 400,000 cars a year, is one of Toyota’s largest in China. It has assembly plants in three other Chinese cities—Changchun in the northeast, Chengdu in the southwest, and Guangzhou in the south.

The worker unrest at the Toyota supplier plant is part of a wave of labor action across China in recent weeks that also has hit Honda Motor Co. Honda resolved strikes at two supplier plants in the southern province of Guangdong that also temporarily halted production of vehicles.

At a third plant, Honda Lock (Guangdong) Co. in the Guangdong city of Zhongshan, striking workers agreed to return to their posts earlier this week pending a new compensation offer from management Friday. Workers have threatened to resume their strike if they don’t like the terms of that offer. As of late Friday afternoon, no agreement had been reached, representatives of both sides said.

Any prolonged disruption in Tianjin could sting Toyota in a market where it is lagging behind its rivals. Its sales in China last year grew 21% to 700,900 vehicles, even as China’s total sales surged about 50% to 13 million vehicles, vaulting it past the U.S. as the world’s largest market.

Toyota’s problems in Tianjin stem from a strike at Tianjin Toyoda Gosei Co., a joint venture part-owned by Japan’s Toyoda Gosei Co., which in turn is 42%-owned by Toyota. Tianjin Toyoda Gosei has two facilities located near each other that employ a total of 1,700 workers in an industrial park in this northeastern port city.

About 40 workers at one of the Tianjin Toyoda Gosei plants began striking early Thursday, with more joining later in the day. By Friday afternoon, that plant appeared to be empty, with no activity visible through an open door. Workers were present at the other facility, although they said that production there had been temporarily halted earlier Friday.

Workers said a large number of police showed up at the Tianjin Toyoda Gosei plant Thursday night, apparently to try to end the strike. Two workers said in interviews that police beat some striking workers and that several workers had to go to the hospital.

An officer with the Tianjin public-security department confirmed that policemen had been sent to Tianjin Toyoda Gosei Thursday to “keep order.” He declined to say whether any workers were hit or detained.

On Friday afternoon, only a handful of police could be seen near the factories.

One of the workers, who said he witnessed the police hitting colleagues, said he and his work mates are now demanding a significantly larger pay increase because they are angry about the police assault. “I came here to save money,” said the man, a 24-year-old from nearby Hebei province who declined to give his name out of fear of retaliation. But he said it isn’t easy from the “meager pay” he receives, which he put at about 1,000 yuan a month, or $146.

A number of workers at another Toyota supplier in Tianjin, Tianjin Star Light (Xingguang) Rubber Plastic Co., which is 51%-owned by Toyoda Gosei, walked off the job earlier in the week, demanding a pay hike. But those workers, who produce rubber weather strips, quickly agreed to return.

A Toyoda Gosei manager said Thursday that workers at Tianjin Toyoda Gosei began threatening to strike a week or so ago. The plant agreed to provide a 20% wage increase Tuesday, and the factory’s labor union formally accepted the offer the next day. But 40 workers in the plant’s logistics department, which handles parts deliveries to Toyota plants, began asking for a bigger pay hike and walked off the job Thursday morning.

A Chinese worker at Tianjin Toyoda Gosei said workers are frustrated despite the offered wage increase because they feel their requests to negotiate with the company were ignored for months. “Our Japanese bosses think we should not get a raise at all,” said the worker, who asked not to be named. “They look down on Chinese workers.” Workers generally make slightly more than 900 yuan a month, she said, though that doesn’t include overtime and some workers make more.
—Gao Sen and Kersten Zhang contributed to this article.

I recalled MM Lee had mentioned many years ago, we have to accept what is given until the China catch up in terms of wages. And here we see the cruelty of capitalism at work. Seems like companies nowadays are lacking ideas to beautify their balance sheet for shareholders other than maintaining strict level of cost-cutting measures, which of cos include depressing pay. This is especially true for engineers working in competitive market. This has happened to engineers in Singapore 10 years ago till now and nothing has been changed.

As for China, it looks exactly the same like Singapore. The China workers are working harder and harder and yet to see the thing they can spend on lesser and lesser due to inflation. You can see they are paid only 1000 yuan per month? In order to get out of this vicious cycle, it means they have to go for further education for better paying job, which most do not have the financial means to do so. But even so, I think there might be too many PHD, masters or degree holders trying hard looking for job in China.

Meanwhile, I don’t think the China government has a way to solve the problem of widening disparity of income. Even Singapore can’t solve it. On one hand, they need the blue-collared worker to continue to work to drive the economy, at the same time, they couldn’t force the company to increase their pay because the moment company finds that it is not cost-effective to do business here, they will shift their operations elsewhere. This will make the country less competitive and drive up the rate of unemployment and thereby worsening the problem.

What we need is innovation, where we can put people on better use elsewhere. Creating a new industry to create more jobs for the people. Innovation is also a double-edged sword. It also means people will get irrelevant quicker in this economy. More upgrading of skills on individual is needed and hence more effort and cost on individual is required.

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Spain credits down from AAA to AA+

I would rather Moody and Fitch downgrades all countries once and for all instead of slowly whacking one by one. Market now is trading on news. Fundamental analysis doesn’t seems to work for now. But think about it, this will be a good time where Warren will be shopping in Spain because storm will eventually be over and you’re buying at a huge discounted price with a huge yield. Researching for stable utilities companies might work?

LONDON (MarketWatch) — Fitch Ratings on Friday cut Spain’s credit rating from AAA to AA+, citing expectations that efforts to reduce public- and private-sector debt levels would significantly slow economic growth over the medium term.

Fitch said Spain’s ratings outlook was stable.

“Despite government debt and associated interest costs remaining within the AAA range, Fitch anticipates that the economic adjustment process will be more difficult and prolonged than for other economies with AAA-rated sovereign governments, which is why the agency has downgraded Spain’s rating to AA+,” said Brian Coulton, head of EMEA sovereign ratings at the agency.

The move, announced after the close of European markets, put added pressure on U.S. stocks. The euro (CUR_EURUSD 1.2267, -0.0095, -0.7685%) remained lower versus the U.S. dollar at $1.2302, down around 0.3% on the day.

But economists said the downgrade wasn’t a surprise.

Spain moved into the spotlight in the long-running euro-zone sovereign debt crisis this week as worries mounted about the country’s banking sector after the Bank of Spain stepped in to rescue CajaSur, a failed regional lender.

The Spanish parliament earlier this week approved a controversial 15 billion euro ($18 billion) package of austerity measures by a single vote. The measures include cuts to pay for civil servants and a pension freeze. Read about Spain’s austerity plan.

“All in all, no big news, and Spain losing AAA status is therefore not overly surprising,” said Tullia Bucco, economist at UniCredit Bank in Milan. “While recent austerity measures are credible and go in the right direction, growth prospects remain investors’ main concern.”

Standard & Poor’s last month downgraded Spain to AA from AA+. Read about S&P’s downgrade.

Fitch said Spain’s rigid labor market and the restructuring of regional and local savings banks, or cajas, will hinder the pace of adjustment, particularly in the aftermath of the nation’s collapsed property bubble.

The agency said the government’s fiscal consolidation plan is “ambitious and supported by specific and detailed measures, some of which have already been implemented.” It also noted what it called Spain’s track record of responsible public finances and an “unblemished” debt-servicing record.

But the recovery is likely to underperform the government’s expectations.

Servicing Spain’s foreign debt will be a source of strain, while the costs of restructuring the caja sector could be “substantial,” although likely to remain significantly less than the €9 billion set aside under the governments Fund for Restructuring of Banks, Fitch said.

The stable outlook for Spain’s sovereign rating reflects expectations the country’s credit profile “will remain very strong and consistent with its AA+ rating, even in the event of some slippage relative to official fiscal targets,” the agency said.

William L. Watts is a reporter for MarketWatch in London.

One interesting comment I’m saw

Euro was rigged by GS.. Either Euro down or USD would loose its dominance. The Banksters thought with weakening Euro, USD would go up, and gold would be depressed. Things turn out differently, Gold is gaining momentum against fiat currencies. Fiat currencies are good for greedy banksters, as it allow banksters to monopoly wealth. Eventually, the true currency (gold) will prevail out tons of fake wealth presented by fiat currencies, including the USD. You may be able to manipulate the system to up to a point, but eventually the system dynamic will shift towards the real currency. The days of creating “wealth” out of thin air is numbered.

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Most exposure countries to PIIGS

Looking through the countries having exposure to PIIGS, it just bring me so much fear. It’s like a domino effect if things is not set out right. Just dead worried.

What the hell has gone wrong with our generation. Are we spending so much that we are in such circumstances or is it the work of politics…

piigs exposure

courtesy of msnbcmedia

Looking at the STI performance today makes me feel very uncomfortable. Maybe its time to go for a second dip to sort out all such problem once and for all.

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