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China may cut spending on strategic industries
July 6, 2011--China may rein in plans to invest heavily in seven new strategic industries, including high speed rail and wind power, scaling back cutting-edge projects for industries suffering from old-fashioned problems such as corruption and overcapacity, sources said.
Beijing originally planned to invest up to $1.5 trillion over the next five years in the seven sectors, hoping they would grow into a pillar of economic growth and help shift the world's second-largest economy away from one centered on manufacturing cheap goods. The pullback on spending stems partly from worries about corruption in the country's high-speed rail project and overcapacity concerns in the wind power sector, said two sources with ties to China's Communist Party leadership and knowledge of the plan. "The government is now reconsidering the seven new strategic industries plan," one source told Reuters, requesting anonymity because he was not authorized to speak to reporters. "The (size of the) retrenchment is still under deliberation," the source added.
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Source: Todays Zaman
Japan’s equities head for pre-tsunami levels
July 7, 2011--Four months ago Japan’s huge earthquake and tsunami wreaked havoc with Japanese equities, causing such frenzied selling that the Tokyo Stock Exchange came under pressure to shut the bourse temporarily.
The Nikkei 225 index is now rebounding and homing in on its March 11 close of 10,254.43, when traders had just 14 minutes to react to the quake before trading ended. It finished on Thursday at 10,071.14, above the psychologically important 10,000 level for a second day.
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Source: FT.com
Eurex names new head of its Singapore office
July 6, 2011--The international derivatives exchange Eurex announced today the appointment of a new Head of the Singapore Branch Office. As of 15 July 2011, Henk Huitema (48) will succeed Philip Joslin as Chief Representative of Eurex’s Singapore office.
Henk Huitema's responsibilities will include the further development of Eurex’s business in the region, in particular in Singapore, India, South Korea and Australia.
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Source: Eurex
Chinese media attack WTO ruling against China
July 6, 2011--Chinese media on Wednesday lashed out at a ruling by the World Trade Organisation that said Beijing's export restrictions on raw materials are illegal, and warned rare earths would be the next target.
The WTO on Tuesday upheld complaints by the United States, European Union and Mexico, ruling that China had failed to abide by accession commitments when it imposed quotas and duties on several types of minerals.
These include bauxite, coking coal, fluorspar, magnesium, manganese, silicon metal, silicon carbide, yellow phosphorus and zinc
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Source: EUbusiness
Inflation fears spark rate rise in China
July 6, 2011--China has raised interest rates for the fifth time in eight months, indicating the country’s leaders are still focused on taming politically sensitive inflation, despite evidence that the world’s second-biggest economy is slowing.
Benchmark one-year lending rates will be raised 25 basis points to 6.56 per cent from Thursday, while one-year deposit rates will go up 25 basis points to 3.5 per cent, the central bank said on Wednesday.
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Source: FT.com
Launch of first sector MINIs on ASX
July 5, 2011-- BetaShares Capital Limited (BetaShares) with Citigroup has today announced the launch of two leveraged trading tools linked to sector ETF products for investors focussed on active trading opportunities in the Australian market.
The two ‘MINIs’ have been launched over BetaShares Resources and Financial Sector ETFs – the CitiFirst MINI, Resources (ASX Code: QREKOA) and the CitiFirst MINI, Financials (ASX Code: QFNKOA).
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Source: BetaShares
Moody's Warns on China Debt .
July 6, 2011--Moody's Investors Service said China's main government auditor may have understated banks' loans to local governments by half a trillion dollars, escalating the ratings firm's warnings that the scale of such loans could pose a threat to China's banking system.
In the absence of a clear plan to reduce local-government debt, Moody's views the credit outlook for Chinese banking system as potentially turning to negative, the ratings firm said Tuesday.
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Source: Wall Street Journal
The External Impact of China's Exchange Rate Policy: Evidence from Firm Level Data-IMF Working paper
July 5, 2011--Summary: We examine the impact of renminbi revaluation on foreign firm valuations, considering two surprise announcements of changes in China’s exchange rate policy in 2005 and 2010 and employing data on some 6,000 firms in 44 economies.
Stock returns rise with renminbi revaluation expectations. This reaction appears to reflect a combination of improvements in general market sentiment and specific trade effects. Expected renminbi appreciation has a positive effect on firms exporting to China but a negative impact on those providing inputs for the country’s processing exports. Stock prices rise for firms competing with China in their home market but fall for firms importing Chinese products with large imported-input content. There is also some evidence that expected renminbi appreciation reduces the valuation of financially-constrained firms, presumably because appreciation implies reduced Chinese purchases of foreign securities. The results carry over when we consider ten instances of market-perceived changes in prospective Chinese currency policy.
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)
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