(Bloomberg) -- The yen fell for the first time in four days against the euro and the dollar before a government report tomorrow that may show Japan posted a trade deficit last month, damping the currency’s appeal as a refuge.
Japan’s currency dropped from a five-week high against the euro as technical indicators showed its recent gains were excessive. The euro traded near the lowest in a month against the dollar on speculation the European Central Bank will cut interest rates and signal it may pump money into the economy to spur growth. South Korea’s won dropped the most in almost two weeks as widening U.S. credit losses curbed demand for emerging- market assets.
“The Japanese economy is in a terrible way and people are very pessimistic,” said Sean Callow, Sydney-based senior currency strategist at Westpac Banking Corp., Australia’s biggest bank by market value. “If we get much further deterioration in the trade position, it should be a yen negative.”
The yen dropped to 127.16 per euro as of 12:42 p.m. in Tokyo from 126.48 in New York yesterday. It has still gained 3.2 percent against the euro in the past week and earlier reached 126.09, the strongest level since March 16. Japan’s currency declined to 98.26 per dollar from 97.89, and weakened to 68.94 against Australia’s dollar from 68.20.
The greenback traded at $1.2939 per euro from $1.2921 yesterday, when it reached $1.2889, the highest level since March 16. The won fell 1.3 percent, the most since April 8, to 1,352.70 per dollar.
Trade Deficit
Japan’s currency weakened against all 16 of the most-traded currencies before the finance ministry releases its trade report in Tokyo tomorrow. The nation had a trade deficit of 27 billion yen ($275 million) in March, the fifth shortfall in six months, according to a Bloomberg News survey of economists.
The yen fell from a five-week high versus the euro as the European currency’s 14-day stochastic oscillator against Japan’s dropped to 8 today, below the 20 level that signals the euro may have fallen too quickly and is poised to strengthen.
“There’s a sense the yen has been overbought,” said Toshihiko Sakai, head of trading for foreign exchange and financial products in Tokyo at Mitsubishi UFJ Trust & Banking Corp., a unit of Japan’s largest bank. “Market participants are probably unwinding long yen positions.” A long position is a bet an asset will gain.
Stocks Slump
Declines in the yen were tempered as Asian stocks extended a global slump in equities, spurring demand for the relative safety of the Japanese currency. The MSCI Asia-Pacific Index of regional shares slipped 2.8 percent.
The Dollar Index, which the ICE uses to track the greenback against the euro, yen, pound, Canadian dollar, Swiss franc and Swedish krona, was little changed at 86.642. U.S. stocks tumbled yesterday after Bank of America Corp. put aside $6.4 billion to cover a growing pool of uncollectible loans. JPMorgan Chase & Co. said banks will likely realize about $400 billion more in losses on soured assets.
“Stocks are falling and uncertainty over the credit markets is returning,” said Ryohei Muramatsu, manager of Group Treasury Asia in Tokyo at Commerzbank AG, Germany’s second- biggest bank. “The yen may be bought.”
President Barack Obama said on April 19 that he will demand “accountability” from any U.S. banks that require additional taxpayer money following “stress tests” being conducted by regulators. The tests are being used to determine whether the companies have enough capital to cover losses over the next two years should the recession worsen.
Read more here
Monday, April 20, 2009
Thursday, April 16, 2009
Google profit beats estimates
(CNNMoney.com) -- Shares of Google Inc. rose in after-hours trading Thursday after the Internet search company said its first-quarter profit climbed 8.9% and topped Wall Street's forecast, amid a tough advertising environment.
Net income for the three months ended March 31 totaled $1.42 billion, or $4.49 per share, compared with $1.31 billion, or $4.12 per share, a year ago.
Results included charges of 67 cents per share for special items. Without the charges, earnings were $5.16 per share for the Mountain View, Calif.-based company.
A consensus estimate of analysts polled by Thomson Financial, who typically exclude one-time items from their estimates, predicted $4.93 per share.
Sales rose almost 6% to $5.51 billion from $5.19 billion last year. Excluding commissions paid to advertising partners, sales totaled $4.07 billion, which missed analysts' forecast of $4.08 billion.
In the previous earnings period, Google posted its first-ever drop in quarterly profit.
Google (GOOG, Fortune 500) stock was trading almost 1% higher to $392.24 in after-hours action Thursday after rising as high as 5.7% following the earnings release.
"It's not an expensive stock, and stocks are rallying even on bad news," said Jeff Rath, analyst at Canaccord Adams. "There's a building belief that the worst is behind us."
January and February were difficult months for Web search, but the trends started to improve in March and may be stabilizing, Rath said.
'Feeling the impact'
"Despite the tough economic climate, we had a good quarter," chief executive Eric Schmidt said in a conference call. "But no company is recession-proof, and Google is definitely feeling the impact."
Consumers are still searching on Google, but they're buying less, Schmidt said. "The shift to online gives us an advantage, so we're well-placed for the recovery when it occurs," he said.
Read more here
Net income for the three months ended March 31 totaled $1.42 billion, or $4.49 per share, compared with $1.31 billion, or $4.12 per share, a year ago.
Results included charges of 67 cents per share for special items. Without the charges, earnings were $5.16 per share for the Mountain View, Calif.-based company.
A consensus estimate of analysts polled by Thomson Financial, who typically exclude one-time items from their estimates, predicted $4.93 per share.
Sales rose almost 6% to $5.51 billion from $5.19 billion last year. Excluding commissions paid to advertising partners, sales totaled $4.07 billion, which missed analysts' forecast of $4.08 billion.
In the previous earnings period, Google posted its first-ever drop in quarterly profit.
Google (GOOG, Fortune 500) stock was trading almost 1% higher to $392.24 in after-hours action Thursday after rising as high as 5.7% following the earnings release.
"It's not an expensive stock, and stocks are rallying even on bad news," said Jeff Rath, analyst at Canaccord Adams. "There's a building belief that the worst is behind us."
January and February were difficult months for Web search, but the trends started to improve in March and may be stabilizing, Rath said.
'Feeling the impact'
"Despite the tough economic climate, we had a good quarter," chief executive Eric Schmidt said in a conference call. "But no company is recession-proof, and Google is definitely feeling the impact."
Consumers are still searching on Google, but they're buying less, Schmidt said. "The shift to online gives us an advantage, so we're well-placed for the recovery when it occurs," he said.
Read more here
China Economy to Rebound as Stimulus Spurs Investment
(Bloomberg) -- China’s economy, the world’s third largest, may rebound this quarter as Premier Wen Jiabao’s 4 trillion yuan ($585 billion) stimulus package cushions the effects of the global recession.
Urban fixed-asset investment surged by almost a third in March and industrial-output growth accelerated, reports accompanying China’s gross domestic product figures showed yesterday. First-quarter GDP grew 6.1 percent, the slowest pace in almost a decade, as exports slumped.
“The economy has gained significant momentum since February,” said Sun Mingchun, an economist at Nomura Holdings Inc. in Hong Kong, who predicts the economy will expand 8 percent this year. “We still expect a V-shaped recovery.”
A pickup in China will contribute “strongly” to growth in the rest of Asia by increasing demand for commodities and products from around the region, according to the World Bank. Wen has cautioned that while the economy is in better-than- expected shape, China is yet to establish a solid foundation for a recovery.
“China has bounced and I think it’s very important,” Barclays Plc President Robert Diamond said in an interview yesterday in New York. “The impact that that can have, if we’re right and we see this continuation in stronger Asian countries, is pretty phenomenal.”
UBS AG yesterday raised its estimate for economic growth this year to as much as 7.5 percent from 6.5 percent previously and Royal Bank of Scotland increased its estimate to 7 percent from 5 percent. Merrill Lynch expects second-quarter growth of 7.2 percent, climbing to 8 percent for 2009.
Newman’s Optimism
“China got its stimulus plan started months ahead of the U.S. and it’s really working,” said Frank Newman, chairman of Shenzhen Development Bank, who served as a deputy secretary at the U.S. Treasury from 1994 to 1995. “We see a lot of it in action because we are financing it.”
Economists have been increasing their forecasts since February. The median estimate of 15 surveyed by Bloomberg News before the release of yesterday’s data was for 7.7 percent growth this year, up from 7.2 percent in February.
Nissan Motor Co. said its sales of passenger cars in China rose 36 percent in March from a year earlier as stimulus measures boosted confidence and attracted more buyers into showrooms. Anhui Conch Cement Co., China’s biggest maker of the building material, said this month that sales volume jumped 15 percent in the first quarter from a year earlier.
Wen’s Target
The government has targeted 8 percent economic growth for the year, a level deemed necessary to create enough jobs for its growing population.
The closure of thousands of factories has cost the jobs of millions of migrant workers, raising the risk of social unrest as China approaches the anniversary of the anti-government protests and crackdown in Tiananmen Square in June 1989.
While stimulus measures have started to produce results, China faces faltering export demand, industrial overcapacity, unemployment and weak private investment sentiment, Wen said yesterday. A rebound in industrial-output growth lacks momentum, the premier said.
“Growth may have bottomed out in the first quarter but with private sector and overseas demand still weak, China will not emerge from this downturn as rapidly as it went in,” said Mark Williams, an economist with Capital Economics Ltd. in London.
Read more here
Urban fixed-asset investment surged by almost a third in March and industrial-output growth accelerated, reports accompanying China’s gross domestic product figures showed yesterday. First-quarter GDP grew 6.1 percent, the slowest pace in almost a decade, as exports slumped.
“The economy has gained significant momentum since February,” said Sun Mingchun, an economist at Nomura Holdings Inc. in Hong Kong, who predicts the economy will expand 8 percent this year. “We still expect a V-shaped recovery.”
A pickup in China will contribute “strongly” to growth in the rest of Asia by increasing demand for commodities and products from around the region, according to the World Bank. Wen has cautioned that while the economy is in better-than- expected shape, China is yet to establish a solid foundation for a recovery.
“China has bounced and I think it’s very important,” Barclays Plc President Robert Diamond said in an interview yesterday in New York. “The impact that that can have, if we’re right and we see this continuation in stronger Asian countries, is pretty phenomenal.”
UBS AG yesterday raised its estimate for economic growth this year to as much as 7.5 percent from 6.5 percent previously and Royal Bank of Scotland increased its estimate to 7 percent from 5 percent. Merrill Lynch expects second-quarter growth of 7.2 percent, climbing to 8 percent for 2009.
Newman’s Optimism
“China got its stimulus plan started months ahead of the U.S. and it’s really working,” said Frank Newman, chairman of Shenzhen Development Bank, who served as a deputy secretary at the U.S. Treasury from 1994 to 1995. “We see a lot of it in action because we are financing it.”
Economists have been increasing their forecasts since February. The median estimate of 15 surveyed by Bloomberg News before the release of yesterday’s data was for 7.7 percent growth this year, up from 7.2 percent in February.
Nissan Motor Co. said its sales of passenger cars in China rose 36 percent in March from a year earlier as stimulus measures boosted confidence and attracted more buyers into showrooms. Anhui Conch Cement Co., China’s biggest maker of the building material, said this month that sales volume jumped 15 percent in the first quarter from a year earlier.
Wen’s Target
The government has targeted 8 percent economic growth for the year, a level deemed necessary to create enough jobs for its growing population.
The closure of thousands of factories has cost the jobs of millions of migrant workers, raising the risk of social unrest as China approaches the anniversary of the anti-government protests and crackdown in Tiananmen Square in June 1989.
While stimulus measures have started to produce results, China faces faltering export demand, industrial overcapacity, unemployment and weak private investment sentiment, Wen said yesterday. A rebound in industrial-output growth lacks momentum, the premier said.
“Growth may have bottomed out in the first quarter but with private sector and overseas demand still weak, China will not emerge from this downturn as rapidly as it went in,” said Mark Williams, an economist with Capital Economics Ltd. in London.
Read more here
Wednesday, April 15, 2009
Mobius Says Thai Economy at Risk; SET Falls Most in Two Weeks
(Bloomberg) -- Mark Mobius, whose Templeton Asset Management Ltd. has invested in Thailand for two decades, says the nation’s political turmoil poses a risk to Southeast Asia’s second-largest economy. Stocks fell the most in two weeks.
“In the near and medium term, Thailand will need to restore consumer confidence and revive investment,” Mobius, who helps oversee $20 billion in emerging-market assets at San Mateo, California-based Templeton, said in an e-mail response to questions. “Failure to do so due to these political conflicts could present a risk to Thailand’s growth.”
Thailand’s benchmark SET Index dropped 0.9 to 449.91 at 10:02 a.m. as it resumed trading today after a three-day holiday marred by street clashes and weekend demonstrations that forced the cancellation of the Association of Southeast Asian Nations summit in the resort town of Pattaya on April 10. The protests left two dead and 123 injured.
The drop wiped out the SET’s gain for the year, compared with the 14 percent increase in MSCI’s developing-nation index. The Thai index tumbled 48 percent last year, the steepest drop since 1997, when the devaluation of Thailand’s baht triggered an economic crisis in Asia. The measure trades for 8.2 times its companies’ projected earnings for 2009, the lowest valuation among Asian equity benchmark gauges tracked by Bloomberg.
Abhisit
The demonstrations have dealt a blow to Prime Minister Abhisit Vejjajiva, 44, who called off the summit after so-called Red Shirt protesters stormed the meeting venue.
The group supports exiled former Premier Thaksin Shinawatra and says Abhisit came to power illegitimately in December. Opponents of Thaksin, in exile to avoid a two-year jail sentence for corruption, seized airports in the country last year. Abhisit said today Thaksin is in Dubai.
The past week of protests forced Abhisit to declare emergency rule April 12 after he failed to curb demonstrations, which have since subsided.
“The current political situation means that less foreigners will invest in the country and that portfolio managers may actually be sellers of equity,” investor Marc Faber, who publishes the Gloom, Boom and Doom report, said in an April 13 interview. “The two parties will not agree on anything for a long time to come and that has a negative impact on business and in particular tourism.”
The country relies on visitors for about 12 percent of its economy, according to the tourism authority.
Read more at Bloomberg
“In the near and medium term, Thailand will need to restore consumer confidence and revive investment,” Mobius, who helps oversee $20 billion in emerging-market assets at San Mateo, California-based Templeton, said in an e-mail response to questions. “Failure to do so due to these political conflicts could present a risk to Thailand’s growth.”
Thailand’s benchmark SET Index dropped 0.9 to 449.91 at 10:02 a.m. as it resumed trading today after a three-day holiday marred by street clashes and weekend demonstrations that forced the cancellation of the Association of Southeast Asian Nations summit in the resort town of Pattaya on April 10. The protests left two dead and 123 injured.
The drop wiped out the SET’s gain for the year, compared with the 14 percent increase in MSCI’s developing-nation index. The Thai index tumbled 48 percent last year, the steepest drop since 1997, when the devaluation of Thailand’s baht triggered an economic crisis in Asia. The measure trades for 8.2 times its companies’ projected earnings for 2009, the lowest valuation among Asian equity benchmark gauges tracked by Bloomberg.
Abhisit
The demonstrations have dealt a blow to Prime Minister Abhisit Vejjajiva, 44, who called off the summit after so-called Red Shirt protesters stormed the meeting venue.
The group supports exiled former Premier Thaksin Shinawatra and says Abhisit came to power illegitimately in December. Opponents of Thaksin, in exile to avoid a two-year jail sentence for corruption, seized airports in the country last year. Abhisit said today Thaksin is in Dubai.
The past week of protests forced Abhisit to declare emergency rule April 12 after he failed to curb demonstrations, which have since subsided.
“The current political situation means that less foreigners will invest in the country and that portfolio managers may actually be sellers of equity,” investor Marc Faber, who publishes the Gloom, Boom and Doom report, said in an April 13 interview. “The two parties will not agree on anything for a long time to come and that has a negative impact on business and in particular tourism.”
The country relies on visitors for about 12 percent of its economy, according to the tourism authority.
Read more at Bloomberg
Warren Buffett takes charge
(Fortune Magazine) -- Warren Buffett is famous for his rules of investing: When a management with a reputation for brilliance tackles a business with a reputation for bad economics, it is usually the reputation of the business that remains intact. You should invest in a business that even a fool can run, because someday a fool will. And perhaps most famously, Never invest in a business you cannot understand.
So when Buffett's friend and longtime partner in Berkshire Hathaway (BRKB), Charlie Munger, suggested early last year that they invest in BYD, an obscure Chinese battery, mobile phone, and electric car company, one might have predicted Buffett would cite rule No. 3 above. He is, after all, a man who shunned the booming U.S. tech industry during the 1990s.
But Buffett, who is 78, was intrigued by Munger's description of the entrepreneur behind BYD, a man named Wang Chuan-Fu, whom he had met through a mutual friend. "This guy," Munger tells Fortune, "is a combination of Thomas Edison and Jack Welch - something like Edison in solving technical problems, and something like Welch in getting done what he needs to do. I have never seen anything like it."
Read more at Fortune
So when Buffett's friend and longtime partner in Berkshire Hathaway (BRKB), Charlie Munger, suggested early last year that they invest in BYD, an obscure Chinese battery, mobile phone, and electric car company, one might have predicted Buffett would cite rule No. 3 above. He is, after all, a man who shunned the booming U.S. tech industry during the 1990s.
But Buffett, who is 78, was intrigued by Munger's description of the entrepreneur behind BYD, a man named Wang Chuan-Fu, whom he had met through a mutual friend. "This guy," Munger tells Fortune, "is a combination of Thomas Edison and Jack Welch - something like Edison in solving technical problems, and something like Welch in getting done what he needs to do. I have never seen anything like it."
Read more at Fortune
Tuesday, April 14, 2009
Asian Stocks Decline on U.S. Retail Sales, Yen; Nomura Slumps
(Bloomberg) -- Asian stocks dropped for the first time in five days after U.S. retail sales unexpectedly declined and a stronger yen dimmed the earnings outlook for Japan’s electronics and auto companies.
Li & Fung Ltd., the biggest supplier of toys and clothing to Wal-Mart Stores Inc., tumbled 9.8 percent in Hong Kong. Canon Inc., which generates more than half of its sales from U.S. and Europe, declined 3.2 percent in Tokyo as the yen rose to a two- week high against the dollar. Nomura Holdings Inc., Japan’s largest brokerage, slumped 7.3 percent, leading declines by finance shares, the region’s best performers in the past month.
“This is a reality check,” said Koichi Ogawa, chief portfolio manager at Daiwa SB Investments Ltd. in Tokyo, which manages $28 billion. “The collapse the global economy was experiencing has come to an end, but investors moved too quickly in predicting a recovery.”
Read more at Bloomberg
Li & Fung Ltd., the biggest supplier of toys and clothing to Wal-Mart Stores Inc., tumbled 9.8 percent in Hong Kong. Canon Inc., which generates more than half of its sales from U.S. and Europe, declined 3.2 percent in Tokyo as the yen rose to a two- week high against the dollar. Nomura Holdings Inc., Japan’s largest brokerage, slumped 7.3 percent, leading declines by finance shares, the region’s best performers in the past month.
“This is a reality check,” said Koichi Ogawa, chief portfolio manager at Daiwa SB Investments Ltd. in Tokyo, which manages $28 billion. “The collapse the global economy was experiencing has come to an end, but investors moved too quickly in predicting a recovery.”
Read more at Bloomberg
Thursday, March 27, 2008
Whats up with Asian currencies?
... ever more efficient and scalable production facilities. China emerged as a clear winner in this ... in and out of the region. Local stock markets make international headlines as thinly traded markets ...
Subscribe to:
Posts (Atom)
