Reading this on a mobile device? Try our optimized mobile version here:

February 14, 2013
Sign upForwardArchive

  Top Stories 
  • Obama takes up economic theme in State of the Union address
    Read full story  
    Biden, Obama, Boehner/Reuters
    A mixed approach to trimming the U.S. budget deficit, billions in spending on infrastructure and a higher minimum wage were on the agenda as President Barack Obama delivered a State of the Union address with an economic theme Tuesday night. He also vowed to work for a trade agreement with the EU. In response, Republicans said the speech revealed little evidence of willingness to bridge the ideological gap between the two parties. The Wall Street Journal (2/13) LinkedInFacebookTwitterEmail this Story

  • U.S. official backs Japan's economic-revival plan
    Read full story  
    The new Japanese government's aggressive push to revive the nation's economy received an endorsement from across the Pacific. Lael Brainard, U.S. Treasury undersecretary for international affairs, said the plan, known as "Abenomics," holds the promise of reigniting growth and reversing deflation. The vote of confidence is considered timely, coming before a Friday gathering of Group of 20 finance ministers. Yomiuri Shimbun (Japan)/Jiji Press (2/13) LinkedInFacebookTwitterEmail this Story

  • Economic stimulus for China isn't a simple matter of numbers
    Debt and deficit figures suggest China has plenty of room to maneuver and stimulate its economy, but the reality might be different. Factors that don't appear on balance sheets -- including local government finances, bad loans in the banking system and the costs of an aging population -- add up to severe restraints on what China's leaders can responsibly do to boost growth. The Wall Street Journal (2/12) LinkedInFacebookTwitterEmail this Story
Free Seminar: Effective Risk Management Strategies
Join FactSet this March for a free seminar. Hear from representatives of the world's leading risk model providers (Axioma, MSCI, Sungard, Northfield), as well as Steven Greiner, FactSet's Director of Portfolio Risk Research, on strategies for forecasting and managing risk in today's global economy.

Register at
  Reader Survey 
  • What is likely to provide Apple shareholders the highest risk-adjusted rate of return on the company's excess cash balances?
    Common stock dividends, including a one-time or a series of special dividends  49.12%
    Share repurchases  35.09%
    Acquisitions  8.77%
    Current capital investment policy  5.26%
    Issuance of preferred stock, as proposed by hedge fund manager David Einhorn  1.75%
  • The US$137 billion in cash that Apple currently has sitting on its balance sheet exceeds the entire market values of technology peers Cisco and Intel, prompting investors to consider anew how Apple should invest this stockpile or otherwise return it to shareholders. Nearly 50% of respondents to this week's poll think Apple shareholders would be best served if the company returned at least a portion of its excess cash to its shareholders by way of either an increased dividend or special dividends, while 35% of respondents believe share repurchases would offer stockholders the best risk-adjusted return. Acquisitions are widely viewed as a less attractive option, with support from just 9% of respondents. And despite the tremendous value delivered to shareholders over the past decade, only 5% of those responding think Apple's current capital investment policy offers the best return prospects. Hedge fund manager David Einhorn shares this view, which explains why he recently proposed that Apple issue a "perpetual preferred" stock. Less than 2% of respondents think this proposal is the best course of action for Apple. With cash representing about 31% of its current market capitalization, Einhorn thinks Apple shares are being penalized by the market and that the issuance of preferred shares would help to unlock considerable value in the common stock. Critics of this strategy, including Aswath Damodaran, see Einhorn's plan as financial engineering rather than value creation. Apple has said that its management "has been in active discussions about returning cash to shareholders." Overlooked by many is the fact that US$94.2 billion of Apple's cash balance is held by its foreign subsidiaries and, absent a change in tax law, repatriating it to pay for dividends or share repurchases would incur taxes. In March of 2012, Apple announced that it would start paying out US$45 billion to shareholders over 3 years via dividends and buybacks. It seems most likely that Apple will accelerate or expand this plan. --David T Larrabee, CFA, Director, Member and Corporate Products, CFA Institute
  Market Activities 
    A surprisingly strong gain in eurozone industrial output and solid corporate earnings Wednesday helped lift shares in Europe, with the Stoxx Europe 600 rising 0.42% to 288.27. In the U.S., the market moved little in response to corporate earnings reports and a modest January gain in retail sales. The S&P 500 ended the day 0.06% higher at 1,520.33. Here is a continuously updated list of global stock indexes. The Wall Street Journal (2/14) , Bloomberg (2/13) , CNNMoney (2/13) LinkedInFacebookTwitterEmail this Story
  • Asian shares rise
    Asian shares were generally higher on corporate earnings gains Wednesday, with one exception in Japan, where a higher yen weighed on shares. The Nikkei fell 1.04% to 11,251.41 while the Hang Seng was up 0.16% to 23,215.16, the Kospi surged 1.56% to 1,976.07 and the S&P/ASX added 0.90% to 5,003.70. MarketWatch (2/13) LinkedInFacebookTwitterEmail this Story
Reining in Risk
CFA Institute report: Investors need better disclosure of derivatives and hedging activities

Read the Report
  Economic Trends & Outlook 
  • China disputes status as top trading nation
    Read full story  
    China's Ministry of Commerce says that when similar measures are used, the U.S. remained ahead of China last year in international trade. Citing World Trade Organization calculations, the ministry said China's total international goods trading for 2012 is likely to be US$15.64 billion less than that of the U.S. (China) (2/13) LinkedInFacebookTwitterEmail this Story

  • Task force to keep firms informed on N. Korean nuclear moves
    Ratings agencies will be hearing from a South Korean government task force set up specifically to head off any ratings downgrade due to North Korea's latest nuclear test. "[W]e will inform credit rating firms of details on the North's movements and the South's countermeasures in a prompt and accurate manner," the task force said in a statement. The Korea Herald (Seoul) (2/13) LinkedInFacebookTwitterEmail this Story
  • Some upside is seen for South Korea from a weaker yen
    Japan's vigorous attack on deflation and a weaker yen need not be all bad news for South Korea, Moody's Analytics says. For one thing, Korean goods should find a more welcome market in Japan itself. Beyond that, "a falling yen and rising won, which reflect improvements in global risk appetites, signal a strengthening world economy," said Moody's economist Matthew Circosta. (China) (2/13) LinkedInFacebookTwitterEmail this Story
  • Taiwan may realize 3.9% growth this year, StanChart says
    Despite a global drag imposed by Europe, Taiwan's growth rate this year could approach 3.9%, up sharply from 1.25% in 2012, according to Standard Chartered Bank Taiwan. The keys to the better figure include an upturn in the global technology cycle and tourism, the bank says, but recent signals emerging from production and trade data also point to higher growth. The Taipei Times (Taiwan) (2/14) LinkedInFacebookTwitterEmail this Story
  • Philippine bank lending surged 16.2% in 2012
    Read full story  
    Philippine bank lending rose 16.2% last year, a gain that is projected to extend into 2013. Easier monetary policy is credited in part for the 2012 rise. "The continued growth in bank lending, particularly to the productive sectors, is expected to support the growth momentum of the economy" this year, said Central Bank Governor Amando Tetangco Jr. (China) (2/13) LinkedInFacebookTwitterEmail this Story

  Capital Markets & Financial Products 
  • Risk measures for North Korea's neighbors fall after nuclear test
    Further evidence emerged that North Korea's latest nuclear saber-rattling did little to rattle markets, with credit default swap premiums on South Korean, Japanese and Chinese five-year sovereign bonds falling Wednesday despite Pyongyang's warhead test. The bonds are considered widely indicative of a nation's overall credit risk. (South Korea) (2/13) LinkedInFacebookTwitterEmail this Story
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

 Recent CFA Institute Financial NewsBrief: Asia Pacific Edition Issues:   Lead Editor:   Jim Berard
Mailing Address:
SmartBrief, Inc.®, 555 11th ST NW, Suite 600, Washington, DC 20004
© 1999-2013 SmartBrief, Inc.®  Legal Information