Archive for the 'Finance' Category
May 9th, 2010 by admin
MANILA, April 12 (Xinhua) — The Asian Development Bank (ADB) has revised its loan charges on new LIBOR-based loans and local currency loans to sovereign borrowers or borrowers with sovereign guarantees negotiated, on, or after, July 1, 2010, ADB announced Monday.
Under the new loan pricing structure, the effective contractual spread will be adjusted to 0.4 percent per annum from the current charge of 0.2 percent.
The adjustment will be phased in over 2010 and 2011, with the new sovereign loans negotiated from 1 July 2010 to 30 June 2011 carrying an effective contractual spread of 0.3 percent per annum, and those negotiated, on, or after, 1 July 2011 carrying an effective contractual spread of 0.4 percent per annum, Manila- headquartered ADB said.
The sovereign loans will continue to carry a commitment charge of 0.15 percent, and charges for loans negotiated before July 1, 2010 will not be affected. The exact level of ADB\’s lending rate can vary because it is determined by the cost of borrowings and the reference floating rate, such as LIBOR.
\”The revision reflects ADB\’s continuous commitment to safeguard ADB\’s financial strength based on sounding banking principles, while striving to provide resources for developmental lending at the lowest and most stable funding costs and on the most reasonable lending terms,\” said ADB Treasurer Mikio Kashiwagi.
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May 9th, 2010 by admin
BEIJING, April 12 (Xinhua) — China\’s foreign exchange reserves hit a new high of 2.4471 trillion U.S. dollars by the end of March, up 25.25 percent year on year, the People\’s Bank of China (PBOC), the central bank, announced Monday.
China\’s foreign exchange reserves increased by 47.9 billion U.S. dollars in the first quarter, 40.2 billion U.S. dollars more than that of the same period last year, the PBOC said in a statement on its website.
The central bank said in January that China\’s foreign exchange reserves topped 2.399 trillion dollars by last December.
The central bank did not specify the reasons for foreign exchange reserves rise in the statement.
According to the newly released data, M2 (the broad measure of money supply), added 22.5 percent from a year earlier to 65 trillion yuan (9.5 trillion U.S. dollars) at the end of March. The increase was 3.03 percentage points lower than that of last month.
The narrow measure of money supply, M1 (cash in circulation plus current corporate deposits), increased by 29.94 percent year on year to 22.94 trillion yuan. The increase was 5.05 percentage points lower than that of last month, said the PBOC.
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May 9th, 2010 by admin
BEIJING, April 12 (Xinhua) — Chinese equities edged down on Monday as market heavyweights remained weak and possibilities of policy tightening turned investors cautious.
The benchmark Shanghai Composite Index on the Shanghai Stock Exchange closed at 3,129.26 points Monday, down 0.51 percent, or 16.09 points.
The Shenzhen Component Index on the Shenzhen Stock Exchange closed at 12,399.2 points Monday, down 155.92 points, or 1.24 percent, from the previous close.
Combined turnover stood at 313.4 billion yuan (45.89 billion U.S. dollars), up from 244.72 billion yuan on the previous trading day.
Gainers outnumbered losers by 485 to 392 in Shanghai and 590 to 305 in Shenzhen.
Property shares led the decline following policies from the central government to cool the property market and check the skyrocketing home prices.
Banks have been required to be more prudent on lending in the property sector, according to Liu Mingkang, chairman of the China Banking Regulatory Commission (CBRC), the country\’s banking regulator.
The CBRC will boost supervision by checking the borrowers\’ credit conditions and banning developers from using land as guarantee, he said at the Boao Forum for Asia annual conference over the weekend.
The real estate sector declined 2.45 percent, as China Vanke, the nation\’s biggest developer by market value, dropped 2.02 percent to 9.2 yuan. Poly Real Estate Co., the second largest, slumped 4.29 percent to 18.76 yuan.
Petroleum heavyweights dropped on declining crude oil prices. PetroChina Co., the country\’s largest oil producer, went down 0.39 percent to 12.76 yuan. Sinopec, the country\’s largest oil refiner, declined 2.16 percent to 11.33 yuan per share.
Airliners bucked the trend on rising expectation over yuan appreciation because of their dollar debt. Air China, the nation\’s flag carrier, jumped 5.54 percent to 14.29 yuan.
The downbeat reflected investors\’ worries over possible policy tightening, said Lu Hongze, analyst with Shenzhen Securities Information Company.
China reported its first monthly trade deficit in six years over the weekend, and rising imports could be seen as initial signs of overheated economy, he said.
Investors are turning cautious and would wait for the release of the first quarter economic data to make further investment decisions, which is scheduled to be announced this Thursday.
China exports stood at 112.11 billion U.S. dollars in March, up 24.3 percent year on year, while the imports surged 66 percent to 119.35 billion U.S. dollars, resulting in a deficit of 7.24 billion U.S. dollars, the General Administration of Customs (GAC) said Saturday.
China\’s new yuan-denominated lending in March slumped to 510.7 billion yuan from February\’s 700.1 billion yuan, the People\’s Bank of China, the central bank, said here Monday after the market closed.
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May 9th, 2010 by admin
MUMBAI, April 20 (Xinhua) — Indian central bank Reserve Bank of India (RBI) Tuesday hiked key short-term lending interest rates and cash reserve ratio to combat near double-digit inflation and anchor inflation expectations.
RBI adjusted up repurchase rate and reverse repurchase rate by 25 basis points to 5.25 percent and 3.75 percent, respectively, in addition to 25 basis point increase of cash reserve ratio to 6 points.
The market expected RBI will heighten repurchase rate and reverse repurchase rate by 25 basis points to 50 basis points besides a upward adjustment of cash reserve ratio.
RBI released a report on macroeconomic and monetary development one day prior to the announcement of annual policy statement, indicating to shift its policy focus to containing inflation fiscal year 2010-2011 starting from April 1.
The central bank has surprisingly jacked up repurchase rate and reverse repurchase rate by 25 basis points in March to 5 percent and 3.5 percent, respectively, in addition to the hike of cash reserve ratio by 75 basis points in January to 5.75 percent.
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May 9th, 2010 by admin
BEIJING, April 20 — At the height of the financial crisis, Goldman Sachs sold Warren Buffett\’s Berkshire Hathaway $5 billion of perpetual preferred stock with a 10 percent dividend and warrants on $5 billion worth of common stock at a strike price of $115 a share.
This package gave Berkshire a return of more than 15 percent in exchange for its money and Buffett\’s endorsement, which Goldman desperately needed to raise funds to survive the panic.
At first it seemed that Berkshire had gotten a rich price for Buffett\’s one-time imprimatur to help Goldman avert failure in a liquidity crunch. Since then, Buffett has been sitting in Omaha, Nebraska, cashing checks for $500 million a year. The preferred is an extremely expensive form of capital that is redeemable at Goldman\’s option. It is costing Goldman $100 million to $200 million a year in extra dividends compared with the cost if it refinanced. Goldman can afford it, so why has it not paid this money back?
Meanwhile, instead of regaining its luster since the financial crisis, Goldman has produced a nonstop soap opera of indignities unbefitting a blue-chip bank. Keeping the preferred makes no sense – unless Goldman values having Buffett\’s reputation on call even more, as insurance.
Opposed interests
Deals like the preferred-stock investment do present moral hazard. The parties\’ interests aren\’t only opposed, but Goldman knows far more about its internal problems and risks than Buffett, and has more control over the course of events. Buffett had already been spattered with his share of mud associated with Goldman even before the Securities and Exchange Commission (SEC) filed civil fraud accusations against it last week for allegedly creating and marketing a collateralized debt obligation that was designed to lose money. The bank calls the allegations \”completely unfounded\”.
Last week, one of Berkshire\’s directors, Ron Olson, speaking on Bloomberg Television ahead of Berkshire\’s annual meeting, defended Goldman, saying that Buffett invested out of belief in \”not just the strength of Goldman but its integrity\”. With horrible timing for Buffett, the SEC filed its suit three days later.
Goldman had gotten a Wells notice in July 2009 informing it that the SEC might file civil fraud accusations. It didn\’t disclose that to investors. While this disclosure isn\’t required, most companies do it. You have to wonder whether Buffett knew.
Tell more
What else might Goldman Chief Executive Officer Lloyd Blankfein have not told Buffett while Buffett was defending Blankfein as the best person to run the bank? When Buffett struck the deal with Goldman he had never met Blankfein. Some thought Buffett was really investing in his trusted Goldman banker, Byron Trott, who was sometimes mentioned as a possible successor to Blankfein. But Trott left Goldman six months after Buffett made the investment to start his own private-equity fund.
May 9th, 2010 by admin
BEIJING, April 20?– A Chinese Academy of Social Sciences (CASS) economist on Monday warned against drastic increase in short-term speculative capital inflows, especially in the coming months while the country\’s foreign exchange regulator vowed to strengthen controls of cross-border capital movement.
\”Calculations show that in March, such capital inflows expanded dramatically compared with the previous two months,\” Zhang Ming, an economist at the Institute of World Economics and Politics at CASS, told China Daily. \”It could be a new trend.\”
The State Administration of Foreign Exchange (SAFE) said on Monday that China may see increased inflows of speculative foreign capital this year as expectations of yuan appreciation rise and due to its relatively high interest rate.
\”The relatively higher domestic interest rate and moderately rising expectations of yuan appreciation will lead to the scaling up of cross-border carry trade,\” SAFE said in a report on its international balance of payments.
Zhang said that unexplainable capital inflows into China in the first three months amounted to $5.6 billion, $5.7 billion and $20.5 billion respectively.
The calculation was conducted through subtracting the country\’s monthly foreign exchange reserves by its trade surplus, foreign direct investment, valuation effects caused by currency exchange rate changes and investment returns, which is believed to be a quite comprehensive methodology.
The eurozone\’s decision to bail out Greece could anchor the euro and reverse the dollar\’s appreciation against it, Zhang said, which would lead to more capital moving out of the United States and flowing into emerging economies.
The US, meanwhile, could possibly postpone any interest rate hike until the fourth quarter of this year at earliest, which means the gap between Chinese and US interest rates would not narrow and international capital could continue to flow into countries such as China to profit from it, he said.
\”In the coming six months, short-term international capital may continue to flow into China, which would put more sterilization pressure on the central bank and push up domestic consumer goods and real estate prices,\” he said.
SAFE said it would further improve supervision of irregular cross-border capital flows and build a comprehensive early warning frameworks to resolve such risks.
It also said it expected the current account surplus this year as a percentage of GDP to continue to drop.
SAFE revised the 2009 current account surplus to $297.1 billion from the $284.1 billion figure released earlier this year, while the capital and financial account surplus was also revised up to $144.8 billion from $109.1 billion.
May 9th, 2010 by admin
TOKYO, April 12 (Xinhua) — A key measure of the amount of money available in Japan rose by 2.6 percent in March when compared to the same month a year earlier, statistics released by the Bank of Japan (BOJ) showed on Monday.
Money stock figures released by the BOJ showed that M2, a measure that combines cash currency in circulation and deposits throughout the nation, stood at 766 trillion yen (8.21 trillion dollars) in March. The measure is made using data from all banks in Japan and combines the amount of money held by corporations, individuals and local governments. In February, M2 stood at 763.5 trillion yen (8.19 trillion dollars).
The nation\’s M3 money supply, which adds together M2 with institutional money-market funds, short-term repurchase agreements and other larger liquid assets, rose by 2.0 percent when compared with a year earlier, and stands at 1,063.1 trillion yen (11.4 trillion dollars).
M1, which consists of money in circulation as well as demand deposits grew by 1.0 percent to 487.9 trillion yen (5.24 trillion dollars).
As the government and Bank of Japan try to tackle the nation\’s poor conditions for business, stimulus measures, deflation and a reluctance on the part of businesses to invest has led to more money circulating in the economy in recent months.
Related:
Japan\’s money stock rises 2.7% in February
Japan\’s money stock rises 2.9% in January
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May 9th, 2010 by admin
TOKYO, April 20 (Xinhua) — Japan\’s Nikkei Stock Average extended losses Tuesday, edging down 0.1 percent on concerns about China\’s real estate sector and rising interest rates in India.
The 225-issue Nikkei Stock Average, having hit a three-week low on Monday below the psychologically important 11,000 line as investors dumped shares to secure profits following fraud allegations against giant U.S. investment bank Goldman Sachs Group Inc., dropped 8.09 points from Monday to 10,900.68.
The broader Topix index of all First Section issues on the Tokyo Stock Exchange was up 1.27 points, or 0.13 percent, to 972. 11.
Despite Tuesday\’s decline brokers maintained that the market was still being underpinned by hopes for solid first quarter results from Japanese companies as earnings season swings into full gear next week.
Analysts also highlighted the fact that the market had, by now, had time to digest and adapt to the Goldman issue, although lingering concerns remain over the possibility of the government further increasing regulations on banks in the U.S. and fresh concerns over China\’s booming property market and rising interest rates in India.
\”Concern surrounding the financial industry hasn\’t been totally erased,\” said Kazuhito Suzuki, a strategist in Tokyo at Shinkin Asset Management Co.
\”Investors will remain nervous.\”
Another Tokyo-based analyst said that anxiety about the Goldman case has somewhat receded compared with yesterday, although such concern continues to \’\’simmer.\’\’ He mentioned that the market is also worried about China, which was reflected in the sluggishness of China-linked shares on Tuesday following Shanghai stocks slump yesterday, as well as India, which is certain to raise its key benchmark interest rate.
India\’s central bank today raised interest rates for the second time in a month to contain inflation. The Bombay Stock Exchange\’s Sensitive Index, or Sensex, gained as much as 0.9 percent.
Some china-related issues such as Komatsu and Hitachi Construction Machinery, which have a large exposure in the Chinese market retreated Tuesday, with Komatsu, maker of industrial mining and construction machinery losing more than 2 percent, to 1,833 yen, while Hitachi Construction Machinery dropped more than 3 percent to close at 2,074 yen.
However market expectations for a sharp improvement in corporate earnings this financial year were seen likely to lend support analysts said.
\”Corporate earnings are good and you also see stories talking about how they might beat expectations,\” said Tsutomu Yamada, market analyst at kabu.com Securities.
May 9th, 2010 by admin
BEIJING, April 20 (Xinhua) — Lee Zhang, former head of Deutsche Bank China, is set to join the Industrial and Commercial Bank of China (ICBC) as vice president, ICBC said in a statement Tuesday.
The appointment is subject to approval from the China Banking Regulatory Commission, the industry watchdog, said the statement filed to the Shanghai Stock Exchange after a board meeting of ICBC, China\’s largest lender in terms of market capitalization.
It is the first time that China\’s major state-owned lenders have recruited a high-ranking executive from a foreign bank.
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May 9th, 2010 by admin
HONG KONG, April 20 (Xinhua) — Hong Kong stocks rebounded to close higher on Tuesday after slumping 2.1 percent on Monday following reports of Goldman Sachs\’ fraud charge by the U.S. securities regulators.
The benchmark Hang Seng index closed up 218.21 points, or 1.02 percent, at 21,623.38 on Tuesday. Turnover totaled 62.72 billion HK dollars (8.09 billion U.S. dollars), down from Monday\’s 76.52 billion HK dollars.
The H-share index add to 12,436.56 points, up 1.49 percent or 182.78 points.
Heavyweight China Mobile, the world\’s largest mobile operator by subscribers, gained three percent or 2.55 HK dollars to close at 80.2 HK dollars per share.
HSBC, one of the world\’s biggest banks, advanced 1 percent to 82.65 HK dollars per share. Shares of ICBC, the world\’s largest bank by market value, edged up 1.2 percent to close at 5.98 HK dollars.
Minsheng Bank rose 2.6 percent to 8.04 HK dollars after posting a 53-pct jump of its 2009 net profit, which stood at 12.1 billion Chinese yuan (1.77 billion U.S. dollars).
Other major mainland lenders also advanced. Bank of China gained nearly one percent to close at 4.11 HK dollars, while shares of Construction Bank of China rose 1.9 percent to 6.56 HK dollars.
Brilliance China Auto jumped 15 percent to 2.61 HK dollars thanks to market expectations about its strong first-quarter earnings.
On Monday, the blue-chip Hang Seng index tumbled 460 points to close at 21,405.
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