Former prosecutor is tapped for U.S. SEC nomination | Japan's 2012 trade deficit a record | China index shows manufacturing stepping up pace
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January 25, 2013
CFA Institute: Financial NewsBrief - Aisa Pacific Edition
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Factory, economy and jobs figures all add up to resurgent U.S.
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Reuters
A January purchasing managers index from Markit, a Conference Board leading indicator for the coming three to six months and jobless-benefit applications last week all pointed decisively Thursday toward a stronger U.S. economy. Meanwhile, the U.S. Federal Reserve is expected to extend its bond buying at its meeting next week as it looks for still-stronger signals on U.S. employment. Reuters (1/24), Bloomberg (1/24), Bloomberg (1/24)
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Former prosecutor is tapped for U.S. SEC nomination
Former prosecutor Mary Jo White will be nominated by President Barack Obama to be the next head of the U.S. Securities and Exchange Commission. If confirmed by the Senate, she would be the first former prosecutor to lead the SEC. The Wall Street Journal (tiered subscription model) (1/25)
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Japan's 2012 trade deficit a record
Weak exports and a strong yen helped widen Japan's trade deficit last year to a record ¥6.927 trillion, the Finance Ministry reported. December's unexpectedly large gap of ¥641.5 billion also marked six straight months of deficits, the longest string since 1980. AutomatedTrader.net (1/23)
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China index shows manufacturing stepping up pace
A purchasing managers index reveals a continued upswing in Chinese manufacturing, registering a positive 51.9 for January, up from 51.5 in December, HSBC Holdings and Markit report. The reading bodes well for the current quarter despite still-mild export demand, and "the domestic-driven restocking process is likely to add steam to China's ongoing recovery in the coming months," said Qu Hongbin, HSBC's chief China economist in Hong Kong. Bloomberg (1/24), Caijing Magazine online (1/24)
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Spanish jobless rate climbs to record 26%, with worse expected
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Reuters
Six in 10 of Spain's youth and 26% of the total workforce were out of work in the fourth quarter, the highest rate since the jobs numbers began to be reckoned in the 1970s. The misery has been compounded by the government's program of sharp budget cuts in a struggling economy, which probably means employment "will continue falling in the first quarter," said Citigroup strategist Jose Luis Martinez. Reuters (1/24)
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Eurozone business gauge improves but remains negative
Markit's gauge of eurozone business activity this month remains firmly negative at 48.2 but marks an improvement on the 47.2 reading in December. The gain is attributed largely to German companies, whose pickup in activity more than countered the decline in neighboring France. Meanwhile, German Chancellor Angela Merkel expressed "conditional optimism" over Europe's economy, saying macroeconomic problems beyond the scope of central banks must eventually be addressed. The Wall Street Journal (tiered subscription model) (1/24), The Wall Street Journal (tiered subscription model) (1/24)
Bankers at Davos upbeat but looking to new regulatory landscape
Bankers meeting at the World Economic Forum in Davos, Switzerland, are more optimistic but are also concerned over the implications of increased regulation. Financial Times (tiered subscription model) (1/24)
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Suit against Barclays over Libor spans continents
The Libor-rigging investigation into Barclays has led to the identification of dozens of traders and executives and blazed a trail from the U.S. to Asia. Names of those involved in the suit brought by affiliates of Guardian Care Homes were released after a judge denied a request for anonymity. Bloomberg (1/24)
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Market Activities
INTERNATIONAL MARKETS OVERVIEW
A brighter outlook for the global economy emerging from a series of positive purchasing managers indexes helped lift stocks in Europe on Thursday, but a focus on corporate earnings made for a choppy U.S. market. The Stoxx Europe 600 rose 0.23% to 288.89, and the S&P 500 ended virtually unchanged at 1,494.82. Here is a continuously updated list of global stock indexes. The Wall Street Journal (tiered subscription model) (1/25), The Wall Street Journal (tiered subscription model) (1/24), CNNMoney (1/24)
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Most Asian markets ease as Japan gains
Jitters over a planned North Korean nuclear test and poor results for Apple with implications for its Asian suppliers held down markets Thursday across the region outside Japan, where shares gained on a further slide in the yen. The Nikkei rose 1.28% to 10,620.87 while the Hang Seng edged down 0.15% to 23,598.90, the Kospi lost 0.80% to 1,964.48 and the S&P/ASX added 0.47% to 4,810.22. Bloomberg (1/24)
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Economic Trends & Outlook
Chinese investors look to Taiwan tourism sector
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Reuters
Tourism from China to Taiwan is sparking interest among Chinese investors in Taiwan's tourism sector, according to UBS Taiwan. In particular, Chinese funds this year are showing interest in strategic partnerships with Taiwanese hotels, restaurants and health care providers, said Jerry Guo, head of investment banking at UBS Securities in Taipei. The Taipei Times (Taiwan) (1/25)
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India sees pickup in growth, cites resolve on retail FDI
Visting Singapore, Indian Finance Minister P. Chidambaram forecast a quick return to 8% growth for India "once we get our act together." The message was reinforced at the World Economic Forum by Commerce and Industry Minister Anand Sharma, who said India's recent opening to foreign direct investment in retail shows that the government can act decisively. On the FDI front, Wal-Mart says it is examining the situation before announcing its intentions. The Business Times (Singapore) (1/24), The Economic Times (India)/Press Trust of India (1/24), The Economic Times (India)/Press Trust of India (1/24)
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South Korean growth dips; consumer, market outlook dim
South Korea wound up 2012 with just 1.5% GDP growth for the fourth quarter, reflecting low exports and domestic consumer caution. Analysts, meanwhile, are predicting a slow year for the Korean stock market in an extended low-growth environment. Financial Times (tiered subscription model) (1/24), Yonhap News Agency (South Korea) (subscription required) (1/24), Financial Times (tiered subscription model) (1/24)
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Singapore businesses turn gloomy
First-quarter expectations among Singapore businesses are for weaker activity than in the preceding quarter. The Dun & Bradstreet survey of sentiment marked a turnaround from the upbeat mood of the third and fourth quarters. The Business Times (Singapore) (1/24)
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Vietnam's inflation rate rises, casting doubt on stimulus
Vietnam's already worrisome inflation rate has heated up again, rising to a 7.07% rate this month from 6.8% in December. Yet the economy is stagnant, providing conflicting signals for the central bank. "It will not be easy to keep inflation below the government's initial target of 6.9% [in 2013]. ... They are in the middle of nowhere and don't know which path to follow," one analyst said. Philippine Daily Inquirer (1/24)
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Capital Markets & Financial Products
India raises FII cap on government securities
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Reuters
Looking to narrow India's persistent current-account deficit, the nation's central bank lifted by US$5 billion each the caps on foreign institutional investors in government securities and corporate bonds. The Hindu (India)/Press Trust of India (1/24)
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China's urbanization trend is seen as key to 2013 investment
The continuing migration from countryside to city is the key to investment in China in 2013, advises money fund manager Lion Fund Management. "The improving Chinese economy this year is a game changer. Companies that can benefit from urbanization look most appealing and primed for a rally," said Lion CEO Ao Chengwen. Bloomberg (1/24)
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Regulatory Update
Barclays chopping large fraction of Asia staff
About 15% of employees in Barclays' investment banking division in Asia are in line for layoffs, sources say. The losses are also hitting other divisions at the bank. The Wall Street Journal (tiered subscription model) (1/24)
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People & Personalities
William Barter is said to be in line for new HSBC position
A former chief of investment banking at Nomura Holdings may soon be taking up a new job as head of global banking for the U.K. at HSBC Holdings, sources say. William Barter is reported in line for the newly created job, with a final decision still pending, according to the sources. Bloomberg (1/24)
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New chief is reported for Chinese bank's Hong Kong branch
Han Baoxing reportedly has been named to head the Hong Kong branch of China Development Bank. The former chief, Liu Hao, has been summoned back to Beijing after an internal investigation into a loan deal. Caijing Magazine online (1/24)
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