President Barack Obama said on
Friday he was prepared to compromise with Republicans to avert a looming U.S.
fiscal calamity, but insisted a tax increase for the rich must be part of any
bargain.
Obama, who was re-elected on
Tuesday, reminded Republicans that his approach to avoiding steep tax hikes and
spending cuts due in January, which could trigger another recession, had just
won the backing of Americans at the polls. His spokesman said he would veto any
deal that did not include an extra contribution from the wealthiest.
Obama invited congressional
leaders to the White House next Friday to discuss the issue, the most pressing
challenge as the president prepares to starts his second term in office. He
will also hold a news conference on Wednesday.
John Boehner, the Republican
speaker of the House of Representatives, repeated his party’s commitment not to
raise anyone’s tax rates as part of a deal to address the crisis.
He too claimed a mandate from the
elections, in which voters gave Republicans continued control of the House.
The statements showed the two
men, who have been divided on the issue for two years, were still far apart,
leaving doubts over whether the “fiscal cliff” could be averted.
China’s growing appetite for
energy and raw materials is expected to give a kick to the world’s sluggish
bulk commodity market. Currently, China is the world’s biggest consumer of
aluminum, cooper, iron ore and cotton.
Ungad Chadda, senior
vice-president of Toronto Stock Exchange, a world leader in mining and energy
financing, takes China’s 2020 blueprint as good news and is fascinated at the
buildup of infrastructure under Chinese leaders.
Other market-moving elements
relating to China’s 2020 goal, Chadda said, include the emerging middle class
and Chinese people’s growing consumption power.
Morgan Stanley China has
projected a golden decade for China’s consumption. By 2020, the country’s total
retail sales will be equivalent to two-thirds of that of the United States and
will account up 12 percent of the world’s aggregate, it said.
For many Chinese people, the
global market is no longer a vague concept.
Singapore
The resale housing market has
kicked off the fourth quarter on an upbeat note, with both prices of non-landed
private homes and Housing and Development Board flats rising last month from
the third quarter, data yesterday from the Singapore Real Estate Exchange (SRX)
showed.
The average per square foot price
for resale private residential property throughout the island was S$1,209 last
month, up 4.3 per cent from the third-quarter average of S$1,159, according to
the SRX, a consortium of 11 leading property agencies including DWG, ERA and
PropNex.
Homes in the Rest of Central
Region (RCR) led the gain with a 4.5-per-cent increase over the third quarter,
followed by those in the Outside Central Region (OCR), which saw a 4.2-per-cent
rise. The Core Central Region (CCR) showed a 1.8-per-cent increase.
Mr Lee Sze Teck, Senior Manager
of Training, Research and Consultancy at DWG, said: “The price gap between RCR
and OCR non-landed homes was 32.3 per cent in the first quarter of last year.
Prices in the OCR continued to rise at a faster rate over the next few
quarters.
“This resulted in a narrowing in
the price gap between RCR and OCR homes to 29.2 per cent last month. Buyers and
investors turned their attention to the RCR, which explains a larger gain for
RCR homes in October versus the CCR and OCR.”
In the HDB market, resale prices
inched up 1.1 per cent last month from the third quarter to a median of
S$455,000 islandwide, the SRX data showed.
The median cash-over-valuation
(COV) premium continued its uptrend to reach S$33,000 in October, a 10-per
cent-increase from the third quarter and just S$3,000 shy of the five-year
historical high of S$36,000 attained in the third quarter last year since
tracking began in 2007, the SRX said.
Malaysia
Exports in September unexpectedly
rose despite the volatile global economic environment, with shipments of
electrical and electronic products supporting growth.
The Statistics Department said
that September’s exports grew 2.6% year-on-year to RM60.21bil helped by the
growth of exports to Asean countries, the United States, India and Taiwan.
Imports rose by 9.6% to
RM53.74bil in September.
The jump in exports exceeded
economists forecast of a 2.9% decrease, especially after the country’s exports
slumped 4.5% in August, according to a Bloomberg survey.
Exports of manufactured goods in
September grew 2.4% year-on-year and 7.6% month-on-month to RM40.86bil.
Major export products for the
month were electrical and electronic products (35.4%), liquefied natural gas
(8.1%), palm oil which includes crude palm oil; fractionated palm oil; palm
kernel oil, olein and stearin (7.8%), refined petroleum products (6.7%), and chemicals
and chemical products (6%).
Meanwhile, exports to Asean
countries recorded double-digit growth of 18.9% to RM16.3bil, accounting for
27.1% of Malaysia’s total exports. This was due to higher exports of both
commodities and manufactured goods.
Exports to the United States grew
for the fifth consecutive month since May, and rose 6.3% year-on-year to
RM5.27bil, contributed mainly by electrical and electronic products.
However, total exports to China
decreased by 10.8% to RM7.66bil, due to lower exports of rubber and palm oil.
Exports to Japan in September
also decreased by 2.2% to RM7.04bil owing to lower exports of liquefied natural
gas.
Exports to the European Union
(EU) in September decreased by 12.5% to RM5.14bil due to weaker demand for
electrical and electronic products, rubber as well as chemicals and chemical
products.
For the first nine months of
2012, Malaysia’s total trade expanded by 4.3% year-on-year to RM982.74bil as
exports rose by 1.7% to RM525.50bil while imports grew by 7.6% to RM457.24bil.
Exports of manufactured goods for
January till September 2012 was valued at RM353.51bil, accounting of 67.3% of
total exports.
Malaysia’s top five export
destinations were Singapore (RM71.62bil or 13.6%), China (RM66.45bil or 12.6%),
Japan (RM63.50bil or 12.1%), United States (RM45.65bil or 8.7%) and Thailand
(RM28.25bil or 5.4%).
Philippines
Last week, the main-share
Philippine Stock Exchange index gained 0.82 percent to 5,468.79 on the back of
good third-quarter income results and a benign inflation rate.
BPI Securities said that this
week, the Philippine market “may continue to traverse the upward trend as
spending for the holiday season is approaching.”
Freya May Natividad, an analyst
at 2TradeAsia.com said the 5,400 zone was likely to be supported this week by
funding windows that have been opened to emerging markets such as the Philippines,
citing a $1-billion risk-sharing facility announced by IFC and Citi Global to
help boost trade in emerging markets through 2015. “This might help support
ascents to 5,500, barring unforeseen negative events,” Natividad said.
Immediate support is 5,400 and resistance at 5,500, she said.
AB Capital Securities analyst
Gregg Ilag, on the other hand, said since valuation multiples have expanded
significantly this year, a further upside might be limited.
“The Philippine Stock Exchange
index (PSEi) was trading at 14x 2012 earnings during the start of the year and
is now at 17x. We think that additional multiple expansions for this year are
improbable unless 2012 earnings are upgraded. Given that earnings were
generally in line with expectations, upgrades on earning projections are
unlikely,” Ilag said.
A price to earnings multiple of
17x means that investors are paying 17 times the amount of money the market
will make in a given year.
From a technical perspective,
Ilag said there might be consolidation between 5,400 and 5,450. “Momentum
indicators are showing a near-term positive divergence but are near the
overbought territory,” Ilag said.
Ilag said investors should remain
selective in buying equities. The brokerage has a “buy” recommendaiton on JG
Summit and Ayala Corp.
Indonesia
Garuda Indonesia said on Friday
it will spend a total of Rp 21.4 trillion ($2.2 billion) to bring in 24 new
airplanes next year to help achieve the goals of its Quantum Leap program.
The 24 planes include four Boeing
777-300 ERs, two Airbus 330-200s, 10 Boeing 737-800 NGs, seven Bombardier
CRJ1000s and an Airbus 330-300.
“The price of a Boeing 777 is
about US$150 million. An Airbus 330 is $100 million, a Boeing 737 is $50
million and a Bombardier is between $20 million and $25 million,” Garuda
president director Emirsyah Satar said on Friday on the sidelines of the Garuda
Indonesia Travel Fair 2012 in Jakarta.
He added that the new Boeing 777
and Airbus planes would be used to serve international routes, replacing
Garuda’s aging Boeing 747 aircraft.
“Flights to Jeddah for minor hajj
trips [outside of the normal hajj season] and other [international routes] will
be served by our new planes,” Emirsyah said.
Garuda currently uses 95
airplanes that serve 32 domestic and 18 international routes.
In addition to the 24 aircraft,
twenty other airplanes are expected to arrive by the end of the year, bringing
the fleet’s total number to 105. The average age of its planes is 5.8 years
old.
Under its robust Quantum Leap
expansion program, Garuda is targeting to utilize a total of 194 aircraft by
2015.
Garuda aims to serve up to 20
million passengers this year, including those flying with its subsidiary
airline, Citilink Indonesia.
Emirsyah said the figure would
represent a 17 percent increase in passengers, higher than the projected 14
percent growth of the global aviation industry this year.
Thailand
Thailand Stock Exchange
The Thailand Stock Exchange
finished the week 1.2% lower, no surprise though as Thailand has been the
leading ASEAN Exchange this year up a total of 25.9% for the year. Investors in
Thailand need to be cautious for now as there are ongoing problems in Europe
and the USA that have the ability to create a sharp sell off.
Deleveraging in Europe and the US
Fiscal Cliff will at some point in the coming months create Rally’s and Dips so
it is ideal for traders.
For the Thailand Stock Exchange I
advise you seek value, Low PE and good sectors are key, never buy a stock you
do not have a long term positive outlook on, always keep in mind value.
Q3 was tough on Thai Exports,
exports declined by 1.13 per cent compared to the same period last year, but
there is some big news, Toyota plan to make 1m Cars per annum in Thailand.
The Auto Sector is the second
most important industry for economic growth in any Country, and Thailand has
excelled in that sector, long term Thailand still looks good. Auto
manufacturing has an above average multiplier effect. For every one auto
manufacturing job, there are 4-6 jobs outside of that segment that are related.
Automotive manufacturing has
enormous reach touching every part of the country, employment in automotive and
automotive parts manufacturing ranks among the top three manufacturing
industries.
Despite a global slowdown
Thailand will still record growth of between 4.5% and 6% depending who you ask,
I think it will be closer to 6% as a result of the wage hikes and a recovery in
food prices.
Vietnam
Focus this week in Vietnam will
be on what the Government has planned for the spiraling bad debts that are
plaguing the banking sector. Non-performing loans in Vietnam’s banking system
rose to an estimated 8.8 percent of total lending by June 30 from 8.6 percent
at the end of March, a state-run newspaper said.
Total loans in Vietnam’s banking
system are estimated at 120 percent of gross domestic product, or between
$150-$160 billion, according to government data.
Fitch Ratings has put the
non-performing loan figure at 13 percent.
Vietnam recorded average credit
growth of 26.56 percent a year in the 2008-11 period, while non-performing
loans expanded at an average 51 percent a year, the central bank has said.
Bad debt rose swiftly in the past
few years due to economic instability, high inventories, rapid credit
expansion, risk management weakness and poor supervision of lenders, it said.
Exports
Between January and September
2012, total shrimp exports reached over USD 1.63 billion, falling 3.9 per cent
from the same period in 2011. However, shipments to Japan – Vietnam’s main
shrimp market – were valued at USD 440.6 million, having gone up 11 per cent
and making up 27.11 per cent of exports, according to the Vietnam Association
of Seafood Exporters and Producers (VASEP).
The Ministry of Agriculture and
Rural Development (MARD) has sent a good message: Vietnam’s rice exports have
been increasing rapidly over the last few years, raising the hope that
Vietnam’s rice exports may reach the record high of 7.7 million tons in 2012.
Analysts have also commented that
it is now the “golden time” for Vietnam to boost exports, when the world’s
demand increases rapidly. Rice export companies have geared up to boost the
rice exports in the last months of the year in the context of the world’s
fluctuating price market.
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