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March 1, 2013 Sign up Forward Archive   Top Stories    U.S. revises 4th-quarter GDP to 0.1% gain; jobless benefit claims fall    Reuters As expected, revised government figures showed the U.S. economy did not contract but rather grew in the fourth quarter, although the minuscule 0.1% expansion was disappointingly low. Meanwhile, the Labor Department reported that initial claims for jobless benefits fell by 22,000 last week, beating projections and adding to recent signs of economic recovery. Reuters (2/28)      U.S. comfort index, debt figure point to sunnier consumer attitudes Gains in the U.S. equities and housing markets are apparently lifting consumer spirits, with the Bloomberg Consumer Comfort Index posting a fourth straight week of improvement. Separately, the Federal Reserve Bank of New York said U.S. household debt increased 0.3% in the fourth quarter, perhaps signaling that consumers are switching from saving to spending mode. Bloomberg (2/28) , Financial Times (tiered subscription model) (2/28)      IMF: Automatic U.S. budget cuts will force lower growth forecast Mandated budget cuts due to take effect Friday will cause the IMF to re-evaluate and lower its growth forecast for the U.S., fund spokesman William Murray said. "Sequestration in the U.S. is one of the key issues of the moment," Murray said. Bloomberg (2/28)      India unveils budget that tries to strike a balance    Rangarajan/Reuters India's new budget attempts to strike a balance between new spending on social sectors and defense and the need to be fiscally prudent by scaling back subsidies and raising taxes on upper incomes. "I am confident that, when I ask the relatively prosperous to bear a small burden for one year, just one year, they will do so cheerfully," Finance Minister P. Chidambaram said of the new budget, which boosts overall spending 16%. Meanwhile, the government's chief economic adviser, C. Rangarajan, predicted the budget will help India achieve 6.5% growth in the new fiscal year. The Wall Street Journal (2/28) , The Economic Times (India)/Press Trust of India (2/28)      India's growth rate disappoints in latest quarter India's economy turned in a markedly poorer performance than expected in the October-December quarter, with growth of just 4.5% from a year before. The figure was down from 5.3% year-on-year growth in the previous quarter and indicated quick recovery is unlikely as the country continues to struggle with high inflation. The Wall Street Journal (2/28)      Kuroda gets nod for Bank of Japan As expected, Asian Development Bank chief Haruhiko Kuroda is Prime Minister Shinzo Abe's nominee to be the next head of the Bank of Japan. Financial Times (tiered subscription model) (2/28)      European democracy may imperil austerity agenda    Reuters European recovery prospects that were dim before Italy's elections this week have only darkened further after the indecisive outcome. That result, elevating populist Beppe Grillo against discredited establishment parties, may also point to eventual gains for others like Grillo across Europe. "If the Italy situation goes on for several months, it will begin to put back the European recovery," commented Richard Barwell, senior European economist at Royal Bank of Scotland Group. Bloomberg (2/28)      EU puts a lid on banker bonuses In the stiffest slap against bankers since the 2008 financial calamity they helped cause, the EU plans to limit annual banker bonuses to double their salaries. Financial Times (tiered subscription model) (2/28)        Reader Survey  Mr. Xi Jinping and others in China's new leadership team highlighted several policy goals in the 18th party congress last November. These are likely to be ratified in next week's National People's Congress. In your view, which of the following policy goals below is the most important? Fighting corruption, eliminating bureaucracy and encouraging government officials to conduct themselves honorably  48.24% Lowering the GDP share of infrastructure, investment spending and net exports, while increasing consumption  25.88% Reforming the capital markets as well as liberalizing the renminbi and interest rates  18.82% Improving social fairness and income equality within the "scientific development" framework  7.06% Our most recent poll asked respondents to prioritize the policy goals that came out of last November's 18th National Congress, which are likely to be ratified at next week's National People's Congress. Some 48% of the respondents rated the policy goal of "fighting corruption, eliminating bureaucracy and encouraging government officials to conduct themselves honorably" as the most important. This response appears consistent with the efforts of the new leadership in China, which organized work group meetings on these topics soon after the 18th National Congress. The seasoned and respected vice premier Wang Qishan (王岐山) was appointed Secretary of the Central Commission for Discipline Inspection as well as a member of the Politburo Standing Committee to focus on dealing with corruption. Indeed, there appears to be renewed vigor in the discussion of "sunshine laws" since the 18th National Congress, and trial programs for asset disclosure by government officials are being implemented in select districts in Guangdong and other areas. Mr. Xi Jinping was quoted in January using the metaphor "tigers and flies are to be attacked at the same time (苍蝇老虎一起打)" to stress that corruption, whether on a large or small scale, will not be tolerated. The policy goal of "lowering the GDP share of infrastructure, investment spending and net exports, while increasing consumption" got slightly more votes than "reforming the capital markets as well as liberalizing the renminbi and interest rates" -- 26% and 19%, respectively. Although the goal of social stability appears to be a key concern of China's central government, only 7% of respondents thought that "improving social fairness and income equality within the 'scientific development' framework" was the most important policy goal. The poll results from the global edition of the Financial NewsBrief are remarkably similar. Samuel Lum, Director, Private Wealth & Capital Markets, CFA Institute   Market Activities  INTERNATIONAL MARKETS OVERVIEW European investors were cheered Thursday amid prospects of further stimulus by the European Central Bank and indications that a coalition government may come together in Italy, with the Stoxx Europe 600 rising 0.96% to 289.94. In the U.S., the market took a breather after two days of strong gains as the S&P 500 edged down 0.09% to 1,514.68. Here is a continually updated list of global stock indices. The Wall Street Journal (3/1) , Bloomberg (2/28) , CNNMoney (2/28)      Asian shares climb on positive signs from abroad Cuing off further strong signals from the U.S. Federal Reserve over its bond buying program and relief at signs that Italy's indecisive election result hadn't yet undermined the eurozone, shares rose strongly Thursday across Asia. The Nikkei jumped 2.71% to 11,559.36, the Hang Seng rose 1.96% to 23,020.27, the Kospi added 1.12% to 2,026.49 and the ASX climbed 1.34% to 5,104.10. MarketWatch (2/28)      CAREERS at CFA Institute Director, Curriculum Projects Director, Society Advocacy Engagement Director, Industry Relations   Economic Trends & Outlook  Analysts see warning signs in China's economy Much of the surge in borrowing across China is going toward repaying debts rather than other purposes that would generate revenue, signaling that the nation's economy is losing efficiency, analysts say. "We can see that the ratio of money to gross domestic product has been increasing, which means the economy needs increasing capital to promote than previously. ... Accumulation of debts is pushing up the leverage ratio among companies, with the whole economy more difficult to shore up," said Liu Yuhui, director of the financial lab at the Chinese Academy of Social Sciences, a government think tank. China Daily (Beijing) (2/28)      South Korean manufacturers' sentiment improves    Reuters Looking ahead to March, South Korean manufacturers are more optimistic than they've been since last July, according to a central bank survey. However, the latest reading of 76 remains well below the neutral sentiment mark of 100. The Korea Herald (Seoul)/Yonhap News Agency (2/28)      Japan retail sales growth turns negative Japan's retail sales last month registered their first decline in three months, falling 1.1%, the Economy, Trade and Industry Ministry reported. Meanwhile, sales at the wholesale level extended their decline to eight months, easing 0.8%. Yomiuri Shimbun (Japan)/Jiji Press (2/28)      Better Australian home, business numbers dim rate-cut prospects Prospects for a March rate cut by Australia's central bank receded with a rise in new-home sales and an optimistic forecast for private new capital expenditure in 2013-14. In particular, the bank is likely to key on mining investment, which now doesn't appear set to reach a peak until later in the year. "Overall, this report is not a trigger for a March rate cut," said TD Securities strategist Alvin Pontoh. The Sydney Morning Herald (Australia)/Reuters (2/28)        Capital Markets & Financial Products  Investors turn bullish on China over urban push    Reuters With official policies aimed at expanding China's urban population in a bid to accelerate growth, money managers are betting in that direction as well. Chinese equities are climbing back from a sell-off in 2012, and investors in emerging markets are now bullish on China, with an urban emphasis that takes into account the potential for property companies and others that could benefit from a renewed government push. The Wall Street Journal (2/27)      IPO requests will have to wait longer, China regulator says Recovering from criticism over a raft of approvals for IPOs early last year, the China Securities Regulatory Commission says it has no plans to resume such clearances anytime soon. Nearly 900 companies are now awaiting approval, but none has been forthcoming for the past four months. Xinhuanet.com (China) (2/28)      South Korea announces bond-issuance plans for March South Korea's Finance Ministry said it will issue 6.1 trillion won worth of state bonds this month. February's total, the ministry said, came to 6.52 trillion won. Yonhap News Agency (South Korea) (2/28)        Industry & Regulatory Update  SSARIS shuts down Japan fund of hedge funds With assets dwindling, SSARIS has closed its Japan fund of hedge funds, one of a range of such funds offered by the alternatives affiliate of State Street Global Advisors. The move comes after Japanese hedge funds on average returned 6% last year, about half the rate for Asian funds outside Japan. AsianInvestor.net (2/28)      South Korean securities firms report disappointing quarter With several major houses such as Hyundai Securities and Daishin Securities posting losses for the quarter ended in February, South Korean securities firms reported lower-than-expected earnings for the period. Declining commission incomes were cited for the disappointing results. MK.co.kr (South Korea) (2/28)      Learn more about CFA -> About CFA Institute  |  Advertise  |  Educational Resources  |  Social Media     Subscriber Tools     Print friendly format  | Web version  | Search past news  | Archive  | Privacy policy   Read more at SmartBrief.com Industry Home Readers' Choice Search Archive Download a SmartBrief Mobile app today       Recent CFA Institute Financial NewsBrief: Asia Pacific Edition Issues: Thursday, February 28, 2013 Wednesday, February 27, 2013 Tuesday, February 26, 2013 Monday, February 25, 2013 Friday, February 22, 2013     Lead Editor:   Jim Berard       Mailing Address: SmartBrief, Inc.®, 555 11th ST NW, Suite 600, Washington, DC 20004     © 1999-2013 SmartBrief, Inc.®  Legal Information