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December 10, 2012
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  Top Stories 
  • Output, sales figures confirm China rebound
    China's industrial production climbed 10.1% year-on-year last month, while retail sales surged 14.9% in two heartening signs tending to confirm an economic rebound. In further good news, inflation clocked in at 2%, up slightly from October but still half the target rate, and a survey revealed improved investment in November. However, a new measure of urban unemployment pegged it at 8.1% at midyear, far above the officially reported rate, indicating that China's new leaders might take action to address the problem. Bloomberg (12/9) , (China) (12/8) , China Daily (Beijing)/Xinhuanet (12/9) LinkedInFacebookTwitterEmail this Story

  • U.S. jobless rate falls to 4-year low
    The U.S. unemployment rate fell to 7.7% in November, the lowest since December 2008, as employers added 146,000 jobs. Economists, however, described the latest report as mixed, with much of the decline in the headline rate due to discouraged job seekers giving up. The Inquisitr (12/8) LinkedInFacebookTwitterEmail this Story
  • U.S. Fed can be expected to continue improvising as "twist" ends
    The U.S. Federal Reserve's so-called Operation Twist is about to end, but more innovative moves can be expected in a bid to shield the economy from the aftereffects of the "fiscal cliff" or any solution that avoids the mandated spending cuts and tax increases but imposes others. Above all, however, "the bond market is counting on the Fed -- and can keep counting on it -- to hold short-term interest rates near zero for some time to come," said Kathy A. Jones, fixed-income strategist for the Schwab Center for Financial Research. The New York Times (tiered subscription model) (12/8) LinkedInFacebookTwitterEmail this Story
  • Italy's Monti to step down
    Mario Monti, the prime minister who has guided Italy through its ongoing debt struggles to date, says he will resign after losing the support of the party of former Prime Minister Silvio Berlusconi, who is waiting in the wings to make another run for office. Monti says he will step down after he and his unelected Cabinet of technocrats try to formulate and pass a budget that keeps Italy on course to get its financial house in order. The Salt Lake Tribune (Utah)/The Associated Press (12/8) LinkedInFacebookTwitterEmail this Story

  Market Activities 
  • U.S., European shares gain
    European shares got a boost Friday from a favorable U.S. jobs report for November while U.S. shares benefited from a favorable jobs report for November. The Stoxx Europe 600 index edged up 0.13% to 279.17, and the S&P 500 added 0.29% to close the week at 1,418.07. Looking ahead in the U.S., shares might be under pressure this week as investors anticipate the possibility of higher taxes in 2013. The Wall Street Journal (12/10) , The Wall Street Journal (12/7) , MarketWatch (12/9) , Reuters (12/9) LinkedInFacebookTwitterEmail this Story
  • Asian shares end third positive week on a mixed note
    Asian shares posted a third week of gains with a lift from urban development plans in China and further indications of a recovering economy in the U.S. On Friday, however, markets were mixed, with the Nikkei edging down 0.19% to 9,527.39, the Hang Seng losing 0.26% to 22,191.17, the Kospi adding 0.40% to 1,957.45 and the S&P/ASX advancing 0.94% to 4,551.80. Bloomberg (12/7) LinkedInFacebookTwitterEmail this Story
  Economic Trends & Outlook 

  Capital Markets & Financial Products 
  • South Korea's solid fundamentals are seen as key to bond investors
    Macroeconomic soundness is the main draw for South Korea's sovereign bond market, even as the country's growth rate declines, said Kwon Young-sun, a managing director and senior Korea economist at Nomura International. Also noting the likelihood of a freeze in the Bank of Korea's key rate next year, Kwon noted that "there are many who make their investments from long-term perspectives regardless of ups and downs of the key rate, and thus I see the freeze will not have a huge impact on investments in bonds." Maeil Business Newspaper (South Korea) (12/7) LinkedInFacebookTwitterEmail this Story
  • CBRC advises banks on capital ratios ahead of Basel III
    The China Banking Regulatory Commission is advising banks to "stick to the capital replenishing mechanism based on endogenous capital accumulation" ahead of implementation of Basel III next month. In addition, the CBRC noted that systemically important banks will have minimum capital thresholds of 6.5% for core tier 1 capital ratio, 7.5% for tier 1 capital ratio and 9.5% for capital ratio. Caijing Magazine online (12/7) LinkedInFacebookTwitterEmail this Story

  • Doubt is cast on perceived safety of bond investing
    With shocks to the system likely in coming years and with interest rates and bond-price volatility currently artificially low, bonds are not necessarily safe investments at this juncture, Khairul Azwa Bahrin, director of risk management and compliance at KWAP, said at AsianInvestor's Southeast Asia institutional investment forum in Singapore. The expected shocks will be "driven mainly by government policies and other central banks that tend to mimic the U.S. Federal Reserve," he said. (12/7) LinkedInFacebookTwitterEmail this Story
  Industry & Regulatory Update 
  • Olam is no Enron, former Temasek managing director says
    Although Olam International might be guilty of moving "a little bit too fast and too far," the company bears no resemblance to Enron, as suggested by short seller Muddy Waters, according to Michael Dee, a former senior managing director at Temasek Holdings. Olam is "a company that saw a tremendous business opportunity, to take an existing platform and grow it on the back of relatively inexpensive debt," Dee said in an interview. The Business Times (Singapore) (12/8) LinkedInFacebookTwitterEmail this Story
  • Hong Kong's new IPO rules introduce stricter standards
    Hong Kong's new rules for initial public offerings will be considerably stiffer and more like those currently in place in the U.S., sources say. The new rules include the possibility of criminal liability for banks if they help bring to market companies with false statements in their IPO prospectuses, the sources note. The Wall Street Journal (12/7) LinkedInFacebookTwitterEmail this Story

  • Outlook is cloudy for South Korean financial firms
    Low growth and low rates are likely to put a strain on South Korea's financial firms in 2013 and years following, the Financial Supervisory Service projects. "The financial sector grew at 6% in 2010 and 3.6% last year. We're expecting 2% this year and hopefully 3% in 2013, but most firms are drawing up plans for the worst," said FSS Governor Kwon Hyeok-se. Yonhap News Agency (South Korea) (12/9) LinkedInFacebookTwitterEmail this Story
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