A total of 145 of the S&P 500 companies have reported results so
far. Sixty-three percent have missed analysts’ expectations for revenue. By
contrast, since 1994 an average of 62 percent of companies have exceeded
estimates. Over the past four quarters 55 percent of companies have beaten.
Stocks fell on Tuesday, putting
the Dow industrials on track for the biggest drop since June 21, after a series
of weak quarterly results from bellwether companies.
Economist Shayne Heffernan of
www.livetradingnews.com expects ASEAN Markets to Sell Off in morning trade
making Singapore and CHina good buying.
ASEAN and the RMB
A “renminbi bloc” has been formed
in East Asia, as nations in the region abandon the US dollar and peg their
currency to the Chinese yuan — a major signal of China’s successful bid to
internationalize its currency, a research report has said.
The Peterson Institute for
International Economics, or PIIE, said in its latest research that China has
moved closer to its long-term goal for the renminbi to become a global reserve
currency.
Since the global financial
crisis, the report said, more and more nations, especially emerging economies,
see the yuan as the main reference currency when setting their exchange rate.
And now seven out of 10 economies
in the region — including South Korea, Indonesia, Malaysia, Singapore and
Thailand — track the renminbi more closely than they do the US dollar. Only
three economies in the group — Hong Kong, Vietnam, and Mongolia — still have
currencies following the dollar more closely than the renminbi, said the
report, posted on the institute’s website.
The South Korean won, for
example, has appreciated in sync with the renminbi against the dollar since
mid-2010.
China has long vowed to raise its
currency’s global sway, along with the rise of its economy, which became the
world’s second-biggest last year.
The goal has seen significant
development in recent years as the country promotes renminbi-denominated
cross-border trade and gradually loosens control over its capital accounts.
As a result, Hong Kong has
quickly risen to be the world’s biggest offshore renminbi trading center, with
about 600 billion yuan ($95 billion) in deposits.
According to the latest report by
the Society for Worldwide Interbank Financial Telecommunication, or SWIFT,
renminbi-denominated trade accounted for 10 percent of China’s total foreign
trade in July. The figure was zero just two years ago.
From July 1 to Aug 31, global
payments in the renminbi rose 15.6 percent, according to SWIFT, as payments in
other currencies fell 0.9 percent on average.
The renminbi had a market share
of 0.53 percent in August and has overtaken the Danish krone to become the
14th-highest global payment currency, the member-owned cooperative said.
Cross-border trade settled in
renminbi will triple to 6.5 trillion yuan ($1.03 trillion) within three years
as relations with the world’s second-largest economy grow, Royal Bank of
Scotland Group PLC was quoted as saying by Bloomberg on Oct 9.
Singapore
Keppel Corp third-quarter net
profit fell 15 per cent from a year earlier, due mainly to lower margins from
the company’s offshore and marine division.
For the three months ended
September, net profit of the world’s largest oil rig builder came in at S$346
million, down from S$406.1 million it made in the same period a year ago.
However, it is still above the
S$324 million average forecast from analysts.
For the nine months ended
September, the company’s net profit climbed 47 per cent to S$1.62 billion.
The company’s third-quarter
revenue came in at $3.22 billion, up 19 per cent from the same period a year
earlier.
But the rise in costs outpaced
the company’s revenue growth.
Material and subcontracting
expenditure climbed 33 per cent to S$2.3 billion, while staff costs rose 9.8
per cent to S$395 million.
Meanwhile, net profit for
Keppel’s offshore and marine division fell 29 per cent year-on-year in the
third quarter to S$241 million.
However, Keppel Corp remained
upbeat about its growth opportunities in the sector.
“In Offshore & Marine,
E&P spending remains buoyant, supported by sustained Brent oil prices of
above US$100 per barrel,” said Choo Chiau Beng, CEO of Keppel Corporation.
“Oil companies have strong
impetus to continue sanctioning projects. Recent discoveries in the North Sea,
as well as deepwater Mexico and both coasts of Africa, have also fuelled
optimism for further exploration work,” he added.
In a statement to the Singapore
Exchange, Keppel Corp said its offshore and marine segment had secured S$7.3
billion in new orders from Brazil, Kazakhstan and Singapore in the third
quarter.
This brings its net order book to
S$13.1 billion at the end of September, with work extending to 2019.
Mr Choo said: “We remain resolved
in executing our backlog of projects well, while sharpening our technology edge
at the same time.”
Thailand
A new report from IFC and the
World Bank finds that Thailand remains among the world’s most business-friendly
countries.
Released today, Doing Business
2013: Smarter Regulations for Small and Medium-Size Enterprises notes that
Thailand made paying taxes less costly by reducing the corporate income tax
from 30% to 23%.
“Government agencies in Thailand
have been collaborating to promote a friendly business environment,” says
Annette Dixon, World Bank Country Director for Thailand. “This, along with
other measures such as improving the quality of education quality and promoting
innovation, will help Thailand attract investors and remain competitive”.
Thailand has also made starting a
business easier by allowing the registrar at the Department of Business
Development to receive the company’s work regulations. This has reduced the
number of procedures needed in registering a company in Thailand.
“Thailand continues its efforts
to reduce the cost and time of doing business. This, combined with reforms
aimed at improvingskills and promoting greater competition in the services
sector ,would promote greater investment and improve business operations,” says
Kirida Bhaopichitr, World Bank Senior Economist for Thailand.
Thailand ranks as the 18th
economy worldwide in Ease of Doing business and 6th in East Asia. Singapore and
Hong Kong SAR, China, continue to provide the world’s most business-friendly
regulatory environments for local entrepreneurs.
The report finds that 23
economies in East Asia and the Pacific have made their regulatory environment
more business-friendly since 2005. During that time, China made the greatest
progress in improving business regulations for local entrepreneurs. The report
also notes that 11 of 24 economies in East Asia and the Pacific improved
business regulations in the past year.
“This year, Taiwan, China, joined
the global list of top 20 economies on the ease of doing business, which uses
data for indicators that measure regulation affecting 10 key areas of the life
cycle of local businesses,” said Augusto Lopez-Claros, Director, Global
Indicators and Analysis, World Bank Group. “Taiwan, China, implemented
regulatory reforms in two areas measured—protecting investors and dealing with
construction permits. The Republic of Korea, already among the top 20,
continued to make it easier to do business through regulatory reforms in four
areas.”
Singapore tops the global ranking
on the ease of doing business for the seventh consecutive year, while Hong Kong
SAR, China, holds onto the second spot. Joining them on the list of the 10
economies with the most business-friendly regulations are New Zealand; the
United States; Denmark; Norway; the United Kingdom; the Republic of Korea;
Georgia; and Australia.
Malaysia
Bumi Armada Bhd’s contract to
provide its floating production, storage and offloading (FPSO) unit in the
Okoro-Setu field, off Nigeria, has been extended another year.
It said on Tuesday Afren Energy
Resources Ltd had exercised the first of the five one-year extensions from the
original contract for the FPSO Armada Perkasa with effect from July 1, 2013.
The Malaysia-based international
offshore oil and gas services provider said the contract extension was
estimated at RM100mil.
Bumi Armada CEO Hassan Basma said
its Armada Perkasa unit had been operating for Afren since 2008 with 99.8%
uptime and it achieved its 1,000 days without loss time injuries in July this
year.
“This contract extension
underscores our international expansion and consolidation in our strategic
markets of Africa, particularly in the Gulf of Guinea,” he said.
The Armada Perkasa, which is
211.2 m long and weighs 58,557 deadweight tonnes, has a production capacity of
27,000 barrels per day of liquids and storage capacity for 360,000 barrels.
Indonesia
The permit system for mineral
resources projects is set for an overhaul after the government on Monday issued
a ruling intended to prevent future overlapping claims in the mining industry
and to curb excessive issuance of new permits.
The Energy and Mining Resources
Ministry regulation will adopt a model similar to that used in the oil and gas
industries, said Thamrin Sihite, director general for coal and mineral
resources at the ministry.
Under the present structure, a company
can apply for a mining business permit, known as an IUP, for a specific parcel
of land with a local government as long as it adheres to that government’s
terms and condition.
But under the new rules, a
potential miner must place a bid to compete with other companies in a process
monitored by the central government, which then passes on the winning bid to a
local government.
“We will define a number of
mining areas, which will then be offered to interested bidders,” Thamrin said
on Monday.
Thamrin said the number of IUPs
issued has been uncontrollable since the regional autonomy law was passed in
2001, allowing local governments to issue mining permits.
“Before regional autonomy, we
only issued up to 500 mining business permits, but since then the number has
reached 10,000,” he added.
Thamrin said that the development
had led to the emergence of overlapping claims on mining areas.
“In one particular case, we found
that a local government issued a permit for an area bigger than its own size,”
he said.
More than half of all mining
business permits, totaling 10,566, have yet to receive approval from the
government, Thamrin said.
He said that overlapping
ownership claims could be reduced by defining a certain area for mining
activities, which in turn would reduce the potential for land conflict, which
can sometimes be fatal.
In December 2011, residents in
Bima, West Nusa Tenggara, opposed mining operations of a joint venture between
Sumber Mineral Nusantara and Australian-listed Arc Exploration. A deadly tussle
ensued with police officers, who opened fire, killing at least three
protestors.
Two months after the deadly
incident, the government announced that it would halt issuing new mining
business permits temporarily.
Thamrin said the government
discussing with lawmakers lifting the mining permit moratorium, but first it
must be certain that incidents like the one in Bima will not be repeated.
Analyst Pri Agung Rakhmanto, the executive
director at Reforminer Institute, a think-tank of the energy and mineral
industry, gave cautious support to the government’s move.
“The move is indeed positive, but
it also indicates that the mining industry is being poorly managed if merely
introducing a tender mechanism is considered a breakthrough,” he said.
Pri Agung questioned the basis of
the government’s decision to issue mining business permits.
“Should the government map
Indonesia’s mining potential properly, there will be no problems,” he added.
“Mining mapping should be the foundation of mining industry management.”
Ladjiman Damanik, a deputy chief
at the Indonesian Mining Professional Association, said the government needed
to evaluate the blueprint for determining mining sites before undertaking its
change in policy.
“The government has yet to decide
which areas are for mining, plantation and forestry,” he said.
Ladjiman noted that most of the
conflict over land stemmed from a lack of understanding of mining activities.
“A miner can have the exploration
rights for an area of 10,000 hectares, but it never means that the production
area will also be 10,000 hectares. But the people don’t understand this and
they just protest,” he said.
Philippines
The peso rose on Tuesday as
investors speculated that the central bank of Japan would inject more funds to
stimulate growth of the Japanese economy, a move that could spur demand for
emerging-market assets.
The local currency closed at
41.315 against the US dollar, up by 7.5 centavos from the previous day’s finish
of 41.39:$1.
Intraday high hit 41.29:$1, while
intraday low settled at 41.335:$1.
Volume of trade amounted to
$690.45 million from $738.65 million previously.
The appreciation of the peso,
which came with the rise of other key Asian currencies against the greenback,
came as some investors took the view that the Bank of Japan will inject more
funds, such as through bond purchases, to spur the lackluster growth of the
Japanese economy.
Traders expect that portions of
the funds to be injected, if indeed there would be, will be used by holders to
buy emerging-market assets and thus cause rise of Asian currencies in the weeks
or months ahead. Consequently, they said, demand for such assets actually rose
as yield-seeking investors took advantage of potential income opportunity.
Yesterday in Asia
Tokyo closed mixed as
profit-taking offset earlier gains on a weaker yen. The Nikkei 225 index inched
up 0.04 percent, or 3.54 points, to 9,014.25.
The euro had hit a five-month
high of 104.60 yen in morning trade – extending a surge in New York late Monday
following data that showed a sharp drop in Japanese exports.
Sydney closed flat, adding
just 2.1 points to end at 4,543.1, while South Korea ended 0.76 percent, or
14.78 points, lower at 1,926.81.
Chinese shares ended down 0.86
percent, or 18.31 points, at 2,114.45 as investors await a turnaround in the
domestic economy.
Taiwan fell 35.56 points,
or 0.48 percent, to 7,337.48.
Hon Hai Precision shed 0.47
percent to Tw$84.7 while Taiwan Semiconductor Manufacturing Co. was 0.35
percent lower at Tw$85.7.
Manila ended 0.14 percent
higher, adding 7.53 points to 5,432.32.
SM Investments gained 1.16
percent to 829.50 pesos and Metropolitan Bank and Trust rose 0.81 percent to 93
pesos.
Wellington closed 0.40
percent, or 16.10 points, higher at 4,004.26.
Telecom gained 0.8 percent to
NZ$2.48 and Vector was up 1.4 percent at NZ$2.90. Auckland Airport climbed 1.1
percent to NZ$2.70.
Jakarta closed down 0.26
percent, or 11.23 points, at 4,330.15.
Retailer Ramayana Lestari Sentosa
rose 2.8 percent to 1,100 rupiah and cigarette firm HM Sampoerna climbed 2.07
percent to 54,200 rupiah. Palm oil firm Sinar Mas Agro Resources dropped 2.86
percent to 6,800.
Kuala Lumpur ended up 2.95
points, or 0.18 percent, at 1,664.90.
UEM Land Holdings added 3.2
percent to 1.93 ringgit while PPB Group was up 2.3 percent to 13.44. AirAsia
ended down 1 percent at 3.09 ringgit.
Singapore closed up
0.17 percent, or 5.26 points, at 3,050.93.
Singapore Airlines fell 0.75
percent to Sg$10.57 while Sembcorp Industries gained 0.55 percent to Sg$5.48.
India fell 0.44 percent,
or 83.42 points, to 18,710.02.
Private steelmaker Jindal Steel
fell 2.43 percent to 390.9 rupees while wind energy giant Suzlon Energy
declined 3.43 percent to 15.5 rupees.
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