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March 15, 2013
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  Top Stories 
  • U.S. jobless-benefit claims fall unexpectedly
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    Reuters
    Further confirmation of a healing U.S. labor market was provided by a drop of 10,000 in the number of Americans applying for initial unemployment benefits last week, as reported by the Labor Department. Economists had expected a modest increase. In addition, the more indicative four-week moving average for applications dropped to a five-year low. MarketWatch (3/14) LinkedInFacebookTwitterEmail this Story

  • U.S. current-account gap thins to 2.8% of GDP
    The dollar may firm up after the U.S. reported a fourth-quarter current-account deficit that tied for the second narrowest as a percentage of GDP in the past 3½ years. The gap, at 2.8% of GDP, has come down from a recent high of 6.5% in the fourth quarter of 2005. Reuters (3/14) LinkedInFacebookTwitterEmail this Story
  • 2.4% growth and healthy labor market forecast for Germany
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    Reuters
    Economic growth of 2.4% with falling joblessness is the 2014 outlook for Germany, the IWH institute and Kiel Economics say in a joint report. The report notes in particular Germany's tight labor market, which helped workers win 6.5% average wage increases in 2012 that in turn had the knock-on effect of helping the economy bounce back from a fourth-quarter downturn. Bloomberg (3/14) LinkedInFacebookTwitterEmail this Story

  • Eurozone leaders will grant struggling economies a bit more time
    After years of surging unemployment and rapidly diminishing economic prospects across the eurozone's austerity-racked periphery, European leaders meeting in Brussels will extend the time that struggling nations have to narrow their budget deficits. "We are ready to use the flexibility incorporated in the stability and growth pact, provided of course that governments make the necessary effort in structural terms," said European Commission President Jose Barroso. Bloomberg (3/14) LinkedInFacebookTwitterEmail this Story
  • Sovereign wealth funds total to reach US$5.6 trillion this year
    Sovereign wealth funds are consolidating their status as the wealthiest class of global investor, with assets on course to total US$5.6 trillion by the end of the year, according to a study by TheCityUK. The funds "should see a continuation in the inflow of capital in the coming years as some Asian countries, particularly China, continue to build up foreign exchange reserves and commodity demand increases with the recovery in the global economy and growth in demand from emerging markets," the study concludes. Business World (Philippines)/Reuters (3/13) LinkedInFacebookTwitterEmail this Story
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  Reader Survey 
  • Which of the following policy goals in China are most likely to be achieved by the end of the new leadership's "10-year term"?
    Reforming the capital markets as well as liberalizing the renminbi and interest rates  44.90%
    Lowering the GDP share of infrastructure investment spending and net exports, while increasing domestic consumption  38.78%
    Fighting corruption, eliminating bureaucracy, and encouraging government officials to conduct themselves honorably  10.20%
    Improving social fairness and income equality within the "scientific development" framework  6.12%
  • Poll Analysis
    Policy goals were announced at the 18th Party Congress by China's new leadership team, which is headed by Xi Jinping. There appear to be four key goals. Our most recent poll asked which of the four key goals are most likely to be achieved by the end of the team's 10-year term. An overwhelming majority (84%) of our readers are pessimistic about the goals of "reducing corruption and bureaucracy" and "improving social fairness and income inequality" being achieved. (However, 91% of our global edition readers expect successful achievement of the two goals relating to "capital markets reform" and "rebalancing the economy.") Capital markets reform is expected to be more easily achievable because the reform involves only the financial sector. Rebalancing the economy, however, appears to be more complex. Reducing infrastructure and investment spending has many ramifications, and it could be linked to the anti-corruption drive and possibly to a trade-off of not meeting the 7.5% GDP growth target. Boosting domestic consumption is probably easier said than done. This survey complements another recent survey, in which we asked readers to identify the policy goal they consider to be the most important. Many respondents (about 47% in both editions) said that reducing corruption and bureaucracy is most important. But in this survey, few think that this goal is achievable -- only 5% of respondents from the global edition and 10% from the Asia-Pacific edition. There is clearly an "implementation shortfall gap" here: The most important policy goal is considered rather unlikely to be attained! Are Asia-Pacific edition readers more optimistic because the media coverage tends to paint a positive picture of the determination and ability of China's new leadership to combat corruption and bureaucracy? Or are those readers more familiar with the success story in Hong Kong, where the Independent Commission Against Corruption (ICAC) has been quite successful in cleaning up corruption since the mid-1970s and could be used as a reference model for China's anti-corruption initiatives? Samuel Lum, Director, Private Wealth & Capital Markets, CFA Institute LinkedInFacebookTwitterEmail this Story
  Market Activities 
  • INTERNATIONAL MARKETS OVERVIEW
    Shares in Europe and the U.S. advanced Thursday, with European investors particularly encouraged by a successful Spanish government bond auction. The Stoxx Europe 600 rose 1.08% to 298.52, and the S&P 500 gained 0.56% to end the day at 1,563.23, within two points of its record close in 2007. Here is a continuously updated list of global stock indexes. The Wall Street Journal (3/15) , The Wall Street Journal (3/14) , CNNMoney (3/14) LinkedInFacebookTwitterEmail this Story
  • Asian shares drift as investors focus on China's inflation fight
    With the exception of Japan, where shares were up strongly on further speculation over the weakening yen, Asian shares were generally weaker Thursday amid concerns over China's new emphasis on fighting inflation. The Nikkei rose 1.16% to 12,381.19, while the Hang Seng edged up 0.28% to 22,619.18 and the Kospi added 0.12% to close at 2002.13. The S&P/ASX, meanwhile, plunged 1.18% to 5,032.20 despite initial strength based on a strong jobs report, with investors focusing more on China's inflation battle. Bloomberg (3/14) LinkedInFacebookTwitterEmail this Story
  • Chinese stocks veer downward amid worrying signs
    Chinese stocks over the past month have surrendered nearly all their gains this year, with the Shanghai index sliding 8% since mid-February. The decline comes amid signs of slower growth, higher inflation and Beijing's continued clampdown on an overheating property market. The Wall Street Journal (3/14) LinkedInFacebookTwitterEmail this Story
  Economic Trends & Outlook 

  • Standard Chartered survey: Philippines ranks high in Southeast Asia
    Standard Chartered Bank issued a glowing report on the Philippines based on a survey of more than 900 investors in Southeast Asia. In the region, "the Philippines was the standout country in terms of the strength of on-the-ground sentiment. ... We expect the Philippines to see stronger investment growth this year, sustaining the strong momentum from 2012," Standard Chartered said. Business World (Philippines) (3/13) LinkedInFacebookTwitterEmail this Story
  Capital Markets & Financial Products 
  • Regulatory issues stunt innovation in China's securities market
    The China Securities Regulatory Commission is the key for the nation's markets moving ahead, where too much regulation rather than too little, as in the West, has been the biggest factor inhibiting needed innovation, observers say. Holding back the CSRC are a number of factors, including its sensitivity to financial, industrial and growth policies as well as the need to take market liquidity into account as it approves -- or refuses to approve -- initial public offerings, of which there is now a considerable backlog. International Financial Law Review (1/2013) LinkedInFacebookTwitterEmail this Story
  • 2014 Hong Kong IPO is predicted for Chinese "bad bank"
    Early 2014 may see the first initial public offering from one of China's so-called bad banks, according to sources. China Cinda Asset Management, one of four state-owned funds created in 1999 to absorb banks' bad debts, is said to be targeting a US$3 billion IPO in Hong Kong. Bloomberg (3/14) LinkedInFacebookTwitterEmail this Story
  Industry & Regulatory Update 
  • Asset managers concerned over rumored leadership change at CSRC
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    Guo
    Guo Shuqing, who is credited with introducing welcome market reforms as chairman of the China Securities Regulatory Commission, is reported to be on the way out. The rumor that Guo will move on to become governor of Shandong province concerns asset managers, who worry about the direction the CSRC might take under new leadership. AsianInvestor.net (3/14) LinkedInFacebookTwitterEmail this Story

  • Electronic quirk gives some investors in Tokyo a jump on trades
    An electronic quirk is giving some Japanese investors a jump on market-moving corporate information, something the Tokyo Stock Exchange is trying to crack down on. Corporate news is supposed to be released for universal access through the exchange's TDNet system, but companies have been uploading the same documents to home pages, where curious investors can sometimes decipher the name of the file. The Wall Street Journal (3/13) LinkedInFacebookTwitterEmail this Story
  • Neuberger PE co-investment fund surpasses goal
    Neuberger Berman has surpassed the US$750 million goal for its second co-investment fund, closing it at US$1.1 billion. NB Strategic Co-Investment Partners Fund II (NBCIP II) will be investing alongside major private equity firms in global buyout and growth finance deals and has an Asian investor base of less than 5%, which nonetheless represents an increase from Fund I. AsianInvestor.net (3/14) LinkedInFacebookTwitterEmail this Story
  People & Personalities 
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