Stocks retreated as investor wariness about the outlook for the EU debt
crisis, in particular Greece, offset hopes that the US central bank will act
decisively later this week to bolster the world’s biggest economy.
The battle in Greece continues as
the country is trying to secure its next tranche of an international bailout
amid falling short of meeting the requirements. Greek political leaders have
yet to agree on where to make further spending cuts.
In Germany, Chancellor Angela
Merkel won political support for her support for the ECB’s plan to buy bonds of
some of the most indebted EU members to stabilise financial markets.
The support comes a day before
Germany’s constitutional court will rule on the legality of the EU’s proposed
rescue fund. While the court is expected to approve Germany’s participation in
the fund, it also is expected to limit future moves by the government.
Thailand
PTT Plc has reaffirmed its
financial capability as adequate for new mergers and acquisitions for both
conventional and unconventional petroleum resources.
“We have a debt-to-equity ratio
of only 0.5, and it is not that difficult for us to find new funds through
loans, self-financing, retained earnings and debentures,” said Surong Bulakul,
chief financial officer of the national oil conglomerate.
“So there is no need to raise
registered capital,” he added.
According to Mr Surong, PTT is
cautious about every project it acquires, trying its best to steer clear of
high-risk projects.
For Cove Energy, which was
snapped up by PTT Exploration and Production Plc (PTTEP), PTT’s exploration
unit, for US$2.2 billion, Mr Surong said PTT believes the project is worth
investing given Cove’s large proven reserves of natural gas.
“We expect the deal will help
enable us to produce liquefied natural gas at relatively low costs, so we are
committed to the Cove deal. More importantly, it’s our obligation to procure
LNG to cater to growing Thai demands.”
He admitted, however, that all
affiliated firms are set to jointly plan funding management if PTTEP has large
projects to be acquired which need to raise massive funding.
Singapore
Singapore Airshow 2012
contributed over S$254.5 million worth of direct spending to Singapore’s
economy in tourism receipts, hospitality, event and personal spending,
accrording to a study by Kadence International.
Of this, over S$219 million was
from foreign exhibitors, trade and public visitors, it said.
The biennial Singapore Airshow is
Asia’s largest and one of the three most important aerospace exhibitions in the
world.
This year’s event, from Feb
14-19, 2012 attracted over 135,000 attendees.
It attracted 44,801 trade
attendees with 30 per cent from overseas.
The two public days also
attracted 90,301 visitors, of which nine per cent were foreign. In total, the
airshow attracted some 22,000 foreign visitors.
Of the foreign exhibitors, nearly
a quarter (23 per cent) stayed in Singapore for over 10 days to leverage on the
networking and business opportunities in the region.
The Kadence study also
established that the airshow generated nearly S$120 million of foreign revenue
among Singapore-based stand-building contractors, freight forwarders and food
and beverage caterers.
Jimmy Lau of Experia Events,
organiser of the airshow, said he was delighted that the airshow has had such a
positive impact on Singapore’s economy, with 86.2 per cent of revenue generated
coming from overseas attendees.
“This strong showing is testimony
to Singapore Airshow’s position and relevance not only as a premier platformfor
networking and business opportunities in the global aerospace industry
calendar, but also as an important contributor to the meetings, incentives,
conventions and exhibitions industry in Singapore,” he said.
Over US$31 billion worth of deals
were announced at the airshow.
The airshow returns from Feb
11-6, 2014 at Changi Exhibition Centre.
Indonesia
“We need to do more, judging from
the potentials especially from China, with huge economic and financial
potentials.” Imron Cotan, Ambassador of the Republic of Indonesia to the
People’s Republic of China, said during an exclusive interview with 21CBH.
China’s investment in Indonesia has amounted US$ 1.2 billion in 2011.
The Master Plan for the
Acceleration and Expansion of Indonesia’s Economic Development has provided
more opportunities for Chinese investors. Chinese companies have expressed
strong interests in the megaproject Sunda Strait Bridge which will start in
2014.
Cotan is confident that Indonesia
is one of the selected few countries for Chinese investors to come and invest,
especially in this economic and financial crisis. “If I were an investor, I
will go to Indonesia.” he said.
Philippines – Peso
The peso inched up to a new
four-year high on Monday as market expectation of a third round of
“quantitative easing” by the US Federal Reserve boosted appetite for
emerging-market securities.
The local currency closed at
41.615 against the US dollar, up by 6.5 centavos from Friday’s finish of
41.68:$1.
Intraday high hit 41.54:$1, while
intraday low settled at 41.62:$1. Volume of trade amounted to $804.5 million
from $883.46 million previously.
Traders said the appreciation of
the peso was triggered by the expectation of the market that the US Federal
Reserve would implement a third round of stimulus, called QE3 (third
quantitative easing), to boost the still lackluster performance of the US
economy.
Quantitative easing is done by
the US Fed’s buying of bonds to infuse money into the US economy.
Although infusion of funds by the
US Fed is meant to boost growth of the United States, fund owners believe that
portions of the liquidity could spill over to emerging markets like the
Philippines. In particular, recipients of the cash from the US Fed may use it
to buy emerging-market assets.
Given this backdrop, fund owners
see another round of stimulus raising demand for emerging market assets, thus
causing appreciation of emerging market currencies.
Wanting to take advantage of the
income potential from an expected appreciation of emerging market currencies,
fund owners actually buy securities denominated in these currencies. As a
result, currencies indeed appreciate.
The rise of the peso against the
US dollar on Monday came with the appreciation of other Asian currencies
against the greenback.
“The appreciation today was due
to the stimulus bets on the US dollar,” Jonathan Ravelas, market strategist for
Banco de Oro, told the Philippine Daily Inquirer.
Ravelas said the peso would
likely hover between 41.6 and 41.8 against the US dollar in the coming days
until the US Fed’s announcement of a QE3.
Speculation that the US Fed may
implement another round of stimulus measure came following the release of a
report that US payroll increased in August by 96,000, which was below most
forecasts.
Unfavorable employment situation
in the United States is one of the factors supporting the view that the US Fed
may eventually be forced to implement QE3.
Tokyo ended flat, dipping
2.28 points to 8,869.37, with a slightly stronger yen compounding figures
showing the Japanese economy grew at a slower pace than initially thought.
Seoul was 0.25 percent
down, or 4.88 points, at 1,924.70 while Sydney climbed 0.18 percent, or 8.0 points,
to 4,333.8.
Hong Kong finished 0.13
percent higher, adding 25.01 points to 19,827.17 while Shanghai gained 0.34
percent, or 7.13 points, to 2,134.89.
Singapore closed 0.10
percent, or 2.98 points, lower at 3,008.72.
Singapore Airlines rose 0.38
percent to Sg$10.55 and DBS Group Holdings advanced 0.76 percent to Sg$14.54,
while Fraser and Neave gained 1.58 percent to Sg$8.38 and Oversea-Chinese
Banking Corp. advanced 1.96 percent to Sg$9.35.
Taipei closed 0.78 percent,
or 57.83 points, higher at 7,482.74.
Taiwan Cement gained 4.0 percent
to Tw$35.10 while Formosa Plastics was 1.47 percent higher at Tw$82.7.
Manila closed 0.20 percent
lower, slipping 10.51 points to 5,190.81.
Gold-producer Philex Mining fell
8.14 percent to 15.80 pesos while Alliance Global Group gained 1.12 percent to
12.64 pesos.
Wellington rose 0.13
percent, or 4.72 points, to 3,726.90.
Jakarta climbed 0.41
percent, or 16.98 points, to 4,160.66.
Car maker Astra International
rose 4.2 percent to 7,400 rupiah, consumer goods producer Unilever jumped 1.3
percent to 28,350 rupiah and mining company Aneka Tambang increased 2.4 percent
to 1,280 rupiah.
Kuala Lumpur fell 0.22
percent, or 3.51 points, to 1,621.04.
UEM Land Holdings lost 3.4 percent
to 1.73 ringgit and Genting Malaysia gained 1.7 percent to close at 3.55
ringgit.
Bangkok rose 0.39 percent,
or 4.83 points, to 1,250.93.
Medical services firm BGH dropped
2.30 percent to 106 baht, while PTT lost 0.30 percent to 329 baht.
Mumbai edged up 0.10
percent, or 17.13 points, to 17,766.78.
Leading mobile phone firm Bharti
Airtel rose 2.32 percent to 260.45 rupees while steel giant Tata Steel rose
1.63 percent to 379.9 rupees.
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