Moody's: China's local gov't debt understated by $540 bln
July 5, 2011--China's local government debt may be 3.5 trillion yuan ($540 billion) larger than auditors estimated, potentially putting banks on the hook for deeper losses that could threaten their credit ratings, Moody's said on Tuesday.
Moody's reviewed a report released by China's state auditor last week, which found that local governments had chalked up 10.7 trillion yuan of debt. Moody's said it identified more loans funded by banks after accounting for discrepancies in figures given by various Chinese authorities. Moody's warning weighed on Chinese bank shares, which were the biggest drag on the Hang Seng index in midday trading. However, the share declines were relatively modest. Analysts said that was because Moody's figures were close to other estimates from Beijing on China's debt mess.
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Source: Todays Zaman
SGX Securities and Derivatives Trading Increases in June
July 5, 2011-- Singapore Exchange (SGX) said securities and derivatives trading increased in June from a year earlier.
Securities
Total turnover rose 8% year on year to $28.1 billion; securities daily average value was $1.3 billion.
Exchange traded fund turnover increased 68% from a year earlier to $795 million.
Derivatives
Total volume increased 17% year on year to 6.1 million contracts; derivatives daily average volume was 281,252 contracts.
China A50 futures trading rose 21% from May to 223,079 contracts while MSCI Taiwan futures volume was 25% up from a year earlier at 1.6 million contracts.
Nifty futures volume was 48% higher from a year earlier
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Source: Singapore Exchange (SGX)
China manufacturing at lowest in 2 years
July 1, 2011--Chinese manufacturing growth has fallen to its lowest level in more than two years, while soft data from India and South Korea have added to the picture of a slowdown in Asia after moves to tame inflation.
With price pressures still high, economists said that policymakers would be able to shift only gingerly from fighting inflation to supporting growth.
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Source: FT.com
Australian Shares Continue To Provide Best Net Returns Over 20 Years, Says Russell Investments/ASX Report
2011 Russell Investments/ASX Long-Term Investing Report encourages
investors to consider investment returns on an after-tax basis and stick with a long-term strategy
June 30, 2011--Australian shares have outperformed residential
investment property to take the mantle of best performing asset class over a 20 year period, according to this year’s Russell Investments/ASX Long-Term Investing
Report.
The 13th edition of the annual report, commissioned by the Australian Securities Exchange (ASX) and prepared by Russell Consulting has found growth assets including Australian shares and residential property continue to deliver superior returns to more conservative asset classes such as cash and fixed income, over the
10, 20 and 25-year periods to 31 December 2010.
view the The Russell Investments/ASX Long Term Investing Report
Source: ASX Group
Fears rise of bond defaults by Chinese groups
June 29, 2011--Having lent an unprecedented $33bn to Chinese companies over the past two years, international bond investors are increasingly contemplating their worst nightmare: the prospect of default.
Like their peers in the equity market, bond investors have been unsettled as a growing number of Chinese companies listed on international stock markets have been accused of fraud.
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Source: FT.com
Cabinet updates securities regulations
June 28, 2011--Cabinet has agreed to update the Securities Regulations 2009, Commerce Minister Simon Power announced today.
The updated regulations, which come into force on Friday, replace the current text about financial advice required to be included in investment statements. This will align it with the Financial Advisers Act 2008, which comes fully into force on the same day.
“The regulations do not require immediate revision of investment statements already in use or those currently being prepared,” Mr Power said.
“The old requirements will continue to apply to investment statements dated earlier than 1 August 2011. Issuers can, however, choose to comply with the new requirements from 1 July.”
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Source: New Zealand Government
China’s emerging municipal mess
June 28, 2011--It has been clear for some time that China’s municipalities ran up big debts during the country’s heroic post-crisis stimulus in 2009. But only now are the full consequences of this binge emerging.
It is not pretty. According to the country’s first audit of local government finances, municipalities have run up debts of Rmb10,700bn ($1,656bn), equivalent to about 30 per cent of the country’s gross domestic product. The quality of many of these loans is thought to be poor. Collectively they threaten an upsurge of non-performing loans in the banking system.
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Source: FT.com
The Real Exchange Rate and Employment in China -IMF Working Paper
June 27, 2011--Summary: We examine the impact of real exchange rate fluctuations on sectoral and regional employment in China from 1980 to 2008. In contrast to theoretical predictions, employment in both the tradable and non-tradable sectors contracts following a real appreciation.
Our results are robust across different sub-samples, levels of sectoral disaggregation, and are more pronounced for regions with higher export exposure. We attribute our findings to the importance of services as intermediate input in exportable production. We test this channel of exchange rate transmission using regional input-output tables linked with employment data at the region-sector level. The results of this paper have important implications for China’s labor market adjustment should the Chinese RMB strengthen in the future. To mitigate the costs of short-run labor market adjustment, appropriate demand management and structural reforms in the non-traded sectors should play an important role.
View the The Real Exchange Rate and Employment in China-IMF Working paper
Source: IMF
SGX: Banks To Provide Market Making And Brokers To Support Trading Of Singapore Government Bonds
June 27, 2011--Singapore Exchange (SGX) said individual investors can expect transparency in price discovery and competitive trading costs of Singapore government bonds (SGS bonds) when they start trading on SGX from 8 July 2011.
SGX said market makers will be available to increase liquidity and make it easier for individual investors to buy and sell SGS bonds. The liquidity providers include seven out of 13 Singapore Government Securities (SGS) Primary Dealers, which have committed to provide two-way prices for the 19 SGS bonds traded on SGX. These are DBS, Deutsche Bank, HSBC, OCBC Bank, Standard Chartered Bank, The Royal Bank of Scotland (RBS) and United Overseas Bank Limited.
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Source: WFE
HK to set daily renminbi rate against dollar
June 23, 2011--Hong Kong will start setting a daily benchmark price for the renminbi against the dollar next week, giving a big boost to the fast-growing offshore market in the Chinese currency.
Market participants have been pushing for a daily fixing rate for the renminbi since last summer when the Chinese currency became freely tradable in Hong Kong following landmark reforms.
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Source: FT.com
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