New government sketches economic plan for Japan | India manufacturing at 6-month peak in December | Eurozone manufacturing gauge slips
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January 3, 2013
CFA Institute: Financial NewsBrief - Aisa Pacific Edition
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U.S. budget deal wins final passage, but issues remain
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Biden, Obama/Reuters
The U.S. House of Representatives put the final seal of approval on the budget deal cleared earlier by the Senate. Passage, however, leaves many unresolved budget issues likely to return soon for further cliff-hanging debate. Meanwhile, the deal helped drive down a key measure of U.S. corporate credit risk. The Wall Street Journal (tiered subscription model) (1/2), Bloomberg Businessweek (1/2)
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New government sketches economic plan for Japan
Japan's new governing coalition is expected to boost the country's 2013 growth forecast beyond 2%, anticipating that its new economic program will pay off. That plan, government sources say, will include initiatives on four fronts: monetary easing, deflation, energy policy and the Trans-Pacific Partnership free-trade pact. CNBC/Reuters (1/1), The Yomiuri Shimbun (Japan) (1/1)
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India manufacturing at 6-month peak in December
Government policies designed to revive India's economy appear to have produced results in manufacturing, with a purchasing managers' index rising to a six-month high in December. Separately, the ratings council Crisil predicted revenue growth of 11% to 13% for Indian companies in the latest quarter. Bloomberg Businessweek (1/2), The Economic Times (India) (1/2)
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Eurozone manufacturing gauge slips
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Reuters
The eurozone's recession, confirmed over the past two quarters, appears more likely than ever to carry over into the new year as a manufacturing gauge for December showed a decline rather than an increase from November, as earlier estimated. The December reading of 46.1 was well below the 50 break-even level. Bloomberg (1/2)
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U.S. manufacturing gauge switches to positive
A private index of U.S. manufacturing swung to a positive reading in December from the previous month. The Institute for Supply Management index of 50.7 indicated only slow growth but, with the reversal from November, suggested economic momentum for the new year. The Detroit News/The Associated Press (1/2)
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U.K. manufacturing index turns up
A sharp turn to the plus side in a measure of U.K. manufacturing last month is still likely to leave the economy in recession mode for the final quarter. The index from Markit and the Chartered Institute of Purchasing and Supply came in at 51.4, up from 49.2 in November. Meanwhile, Prime Minister David Cameron prepared to take up leadership of the Group of Eight countries with a call for bold economic initiatives in 2013. The Wall Street Journal (tiered subscription model) (1/2), Financial Times (tiered subscription model) (1/2)
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Global manufacturing index swings to plus side
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Reuters/NASA
China, the U.S. and the U.K. helped edge JPMorgan's Global Manufacturing PMI for December into positive territory for the first time since May, with a reading of 50.2. Meanwhile, the Group of Seven and BRIC nations will face substantially reduced sovereign debt refinancing costs in 2013 thanks to rallies in each nation's bond market for the first time since 2008. Reuters (1/2), Bloomberg (1/2)
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Asia's economies show resiliency despite global woes
Economies throughout Asia were beginning to look more robust as revealed by a variety of measures even before Washington's budget deal eased short-term uncertainties in the key U.S. export market. The latest batch of encouraging purchasing managers' indexes "cements the idea that Asia has been doing OK despite what is going on in Europe and the U.S.," said HSBC economist Su Sian Lim. The Wall Street Journal (tiered subscription model) (1/2)
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Market Activities
INTERNATIONAL MARKETS OVERVIEW
Investors on both sides of the Atlantic registered a broad vote of confidence Wednesday after a long-awaited U.S. budget deal achieved final passage in Congress, averting a widely perceived risk of recession. The Stoxx Europe 600 jumped 2.02% to 285.33, and the S&P 500 climbed 2.54% to 1,462.42. Here is a continuously updated list of global stock indexes. The Wall Street Journal (tiered subscription model) (1/3), The Wall Street Journal (tiered subscription model) (1/2), CNNMoney (1/2)
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U.S. budget deal helps lift Asian shares to strong start in new year
Final resolution and passage of a U.S. budget deal lifted shares Wednesday across Asia. The Hang Seng surged 2.89% to 23,311.98, the Nikkei gained 0.70% to 10,395.18, the Kospi jumped 1.71% to 2,031.10, and the S&P/ASX advanced 1.23% to 4,705.90. MarketWatch (1/2)
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Economic Trends & Outlook
Land prices climb in Beijing
The latest land auctions in Beijing have seen rapidly inflating prices despite government efforts to put a damper on the country's real estate market. Financial Times (tiered subscription model) (1/2)
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South Korea is heartened by U.S. budget deal
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Reuters
South Korea's export-driven economy stands to benefit this year after the resolution of the U.S. budget situation, economists said. Looking to the domestic side, however, the Financial Supervisory Service says the nation's worrisome household-debt situation must be addressed in 2013 to achieve a soft landing. The Korea Herald (Seoul)/Yonhap News Agency (1/2), MK.co.kr (South Korea) (1/2)
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Recession is seen in Singapore with 1.2% growth in 2012
Early government estimates put Singapore's 2012 growth at 1.2%. Meanwhile, a separate estimate says the economy probably shrank by 3.5% to 4% in the fourth quarter from the previous period. The Business Times (Singapore) (1/2), The Edge Malaysia/Agence France-Presse (1/2)
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Indonesia inflation moderates but is expected to pick up again
Inflation continued to decelerate in Indonesia last month, registering a 4.3% annual rate. However, economists project a pickup in consumer prices. Bloomberg Businessweek (1/2)
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Thai currency hits 3-month high even before U.S. budget deal
With a sturdy domestic market and the prospect of improving exports, Thailand's currency reached a three-month high against the U.S. dollar. Looking ahead, meanwhile, the U.S. budget deal is expected to "support capital inflows and lift the baht higher," said Kampon Adireksombat, a senior economist in Bangkok at Tisco Securities. Bloomberg Businessweek (1/1)
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Capital Markets & Financial Products
S. Korea saw drop in trading of financial derivatives, options in 2012
Last year saw declining trade in financial derivatives as measured by daily volume in South Korea, down 17.7% from 2011 to US$51 billion. Options trading, meanwhile, was down 30.2%, the Korea Exchange reported. MK.co.kr (South Korea) (1/2)
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Mainland China, Hong Kong saw fewer IPOs in 2012
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Reuters
Initial public offerings in mainland China were off 45% last year from the year before. Hong Kong, meanwhile, saw a 31% decline in IPO numbers, according to data from Deloitte Touche Tohmatsu. Yonhap News Agency (South Korea) (subscription required) (1/2)
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Singapore, Malaysia are expected to record major IPO activity
As conditions improve, Singapore is forecast to see a pickup in initial public offerings in 2013, and Malaysia is expected to extend its record as a top IPO market. In Malaysia, Iskandar Waterfront Holdings is the latest lining up for an offering, with plans to raise as much as US$300 million. The Business Times (Singapore) (1/2), The Wall Street Journal (tiered subscription model) (1/2)
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Regulatory Update
Philippine central bank to address money-laundering fears
Taking its cue from the HSBC money-laundering scandal in the U.S., the Philippines' central bank said it will tighten its own rules to guard against such practices. The effort will focus on "know your customer" processes, said bank Deputy Governor Nestor A. Espenilla Jr. Business World (Philippines) (1/2)
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China clears Fitch to spread information on mainland
Fitch Solutions said it has been cleared to provide the agency's credit ratings, data and research in the Chinese mainland. The announcement comes after the Chinese Cabinet in October eased rules on foreign institutions to distribute such information. Xinhuanet.com (China) (1/2)
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