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January 10, 2013 Sign up Forward Archive   Top Stories  Japanese stimulus plan is pegged at 20 trillion yen, raising skepticism    Azo/Reuters The new Japanese government's total stimulus spending program could come to more than ¥20 trillion once all national and local government spending as well as private-sector inputs are weighed in, government sources say. On the monetary front, meanwhile, Deputy Prime Minister Taro Aso said the government is seeking a written policy accord with the Bank of Japan, with the central bank asked to take into consideration unemployment. Observers are now calling into question the aggressiveness of the stimulus, with some characterizing the initiatives as print and spend. Yomiuri Shimbun (Japan) (1/9) , Yomiuri Shimbun (Japan)/Jiji Press (Japan) (1/9) , Channel NewsAsia (1/9)      Fitch: China's investment-led growth model might be reaching its limit China's growth model, with its heavy emphasis on investment, is being called into question by Fitch Ratings. Fitch points to debt financing by local governments as well as the shadow banking system as worrying factors. Noting that China's attempts at rebalancing its economy are "not optional," Andrew Colquhoun, head of Fitch's Asia-Pacific Sovereigns section, said the process must be carried out over the long term, posing a challenge as "the debt issue is tightening constraints on the old investment-driven growth model." China Daily (Beijing) (1/9)      U.K. trade figures fail to offer any hope Although the U.K.'s trade deficit in goods narrowed to £9.2 billion in November from £9.5 billion the previous month, the slim improvement suggested that the export sector isn't likely to provide any support for the nation's teetering economy any time soon, analysts said. "Without a marked turnaround in December, net trade looks like it may well drag on GDP growth in the final quarter of the year. But prospects for such a turnaround are slim," said Martin Beck, U.K. economist at Capital Economics. The Telegraph (London) (tiered subscription model) (1/9)      Morgan Stanley trims sails with 1,600 job cuts In the latest example of investment bank belt-tightening, Morgan Stanley is eliminating 1,600 jobs, or about 6% of positions, in its institutional securities group. Financial Times (tiered subscription model) (1/9)      Live broadcast from the India Investment Conference 10 January 2013, 8:00 pm PST. Convert time zone here. Investing in the New Financial Order Mr. Roger Urwin Global Head of Investment Content, Towers Watson Topics: New normal, new practices, and new "isms" in the future of finance and the financial ecosystem. Learn more.   Market Activities  INTERNATIONAL MARKETS OVERVIEW A strong earnings report from U.S. aluminum producer Alcoa buoyed shares Wednesday in Europe and the U.S., boding well for overall corporate earnings. The Stoxx Europe 600 rose 0.69% to 288.22, and the S&P 500 ended with a 0.27% gain at 1,461.02. Here is a continuously updated list of global stock indexes. The Wall Street Journal (1/10) , Bloomberg (1/9) , CNNMoney (1/9)      Asian shares get a lift from U.S. earnings Further declines in the yen and a positive launch to the U.S. corporate earnings season helped lift shares in most Asian markets Wednesday. The Nikkei rose 0.67% to 10,578.57, the Hang Seng added 0.46% to 23,218.47 and the S&P/ASX was up 0.38% at 4,708.14, while the Kospi slipped 0.31% to 1,991.81. MarketWatch (1/9)      Live Webinar Meeting the Global Challenge of Funding Retirement: A Case Study of Financial Engineering in the Design and Implementation of a "Next-Generation" Solution Featuring Nobel laureate Robert C. Merton Thursday, 10 January 2013 9:00 a.m. GMT (London) 5:00 p.m. HKT (Hong Kong)   Economic Trends & Outlook  China is expected to tighten monetary policy in 2013    Reuters The new year is likely to see a switch in China's monetary policy from 2012's loosening to one of prudence in a bid to keep inflation from cutting into gains achieved by a rebounding economy, analysts say. "We predict this year's GDP growth will accelerate a bit from last year, and consumer prices will also climb. So the monetary policy will not be necessarily loosened," said Lian Ping, chief economist for the Bank of Communications. Xinhuanet.com (China) (1/9)      South Korea's outstanding household loans hit record high Although South Korea's rate of increase in household lending declined for the 15th straight month in November, the total outstanding balance of household loans extended by depository institutions reached a record US$611.50 billion, the Bank of Korea reported. Separately, Statistics Korea reported slower employment growth for December, with the 277,000 jobs created down from 353,000 the month before. MK.co.kr (South Korea) (1/9) , The Korea Herald (Seoul) (1/9)      Retail sales offer little boost for slowing Australian economy Online purchases from overseas leveraging the nation's strong currency and general skittishness over spending led to a 0.1% decline in retail spending in Australia in November from October. The figure suggests little support for the slowing economy will be forthcoming from retail. "With credit growth also weak, there are still very few signs that interest-rate relief is being used for purposes other than deleveraging," said Michael Turner, a strategist at RBC Capital Markets in Sydney. The Wall Street Journal (1/9)      Thai central bank maintains benchmark rate With prospects for a mending global economy and Thailand's domestic economy bearing up well, the country's central bank left its benchmark interest rate at 2.75% Wednesday. The last rate cut, of a quarter point, was in October. The Business Times (Singapore) (1/9)        Capital Markets & Financial Products  China regulator acts to speed IPOs on mainland China's mainland regulator is forming special working groups to go over results statements for companies applying to list on domestic stock markets in a bid to ease the backlog. Financial Times (tiered subscription model) (1/9)      As some companies exit, China's "B" market might be on the way out With some of its 85 companies looking for conversion to other markets, China's moribund "B" market may be seeing its last days. Financial Times (tiered subscription model) (1/9)      Hong Kong fund sales at record, with fixed income predominant Fixed-income and equity funds have switched places in Hong Kong in sales volume, with fixed income accounting for two-thirds during a record year for retail funds in the territory in 2012. In 2007, equity funds made up 84.2% of gross sales while bond funds accounted for only 6.3%. Looking ahead, this year's sales are expected to fall short of the estimated $55 billion in gross sales last year. AsianInvestor.net (1/9)      Trading of South Korean state bonds reached record high last year A record US$1.16 trillion in South Korean state bonds were traded on the main exchange last year. Investors seeking safety in a rocky global economy accounted for the gain. Yonhap News Agency (South Korea) (1/9)      Australia's bank-owned super funds weren't so super in 2012 In Australia, super funds owned by banks and wealth managers were in the red for the 12 months through last June, according to the Australian Prudential Regulation Authority, while government workers' retirement funds achieved the best results with an average gain of 1.7%. Among other types, for-profit retail funds lost 0.6% on their investments. The Sydney Morning Herald (Australia) (1/9)        Industry & Regulatory Update  China might bar sale of HSBC's Ping An stake    Reuters China's regulators, noting a lack of promised financial support, may bar HSBC's sale of its stake in Ping An Insurance. "The issue is about how the regulator views the buyer and the structure of the deal. I don't think that's favorable at the moment," said Wilson Li, a Shenzhen-based analyst at Guotai Junan Securities. The Wall Street Journal (1/9) , Bloomberg (1/9)      Indian financial industry reforms become law Indian President Pranab Mukherjee has given final approval to three reform laws for the financial sector. The measures are designed to attack money laundering, open the way for corporate houses to enter banking and improve financial institutions' provisions for bad debts. The Economic Times (India)/Press Trust of India (1/9)      Permal merger to bring sharper China focus A heavier focus on China managers is one result of the merger of the U.K.'s Permal with Fauchier, said Permal chief Isaac Souede. Noting that a Shanghai office is now planned, Souede said, "We've got a Chinese fund that's been up and running for three years and which has performed really well. We want to be closer to the action." AsianInvestor.net (1/9)      South Korean banks benefit from delay in Basel III buffer rules South Korean banks are among those worldwide breathing more easily after the decision to delay the start date for Basel III liquidity coverage rules. The Bank of Korea now says the nation's eight affected banks "are expected to surpass the minimum LCR requirement of 60% when the new rule is implemented." MK.co.kr (South Korea) (1/9)        Ethics & Standards  Prison sentences are handed down in Dun & Bradstreet Shanghai case Four former executives of Dun & Bradstreet have received prison sentences and the firm has been fined in a case involving the illegal acquisition of information on Chinese consumers by a D&B unit in Shanghai. The U.S.-based company didn't contest the charges and said that "such consumer-data-collection practices contradict D&B's core values regarding data integrity." 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