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krisluke
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16-Apr-2013 14:09
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BEIJING (Reuters) - China's defence ministry made a thinly veiled attack on the United States on Tuesday for increasing tensions in the Asia-Pacific by ramping up its military presence and alliances in the region, days after the top U.S. diplomat visited Beijing.
China is uneasy with what the United States has called the " rebalancing" of forces as Washington winds down the war in Afghanistan and renews its attention in the Asia-Pacific. China says the policy has emboldened Japan, the Philippines and Vietnam in longstanding territorial disputes. China faces " multiple and complicated security threats" despite its growing influence, the Ministry of Defence said in its annual white paper, adding that the U.S. strategy meant " profound changes" for the region. " There are some countries which are strengthening their Asia Pacific military alliances, expanding their military presence in the region and frequently make the situation there tenser," the ministry said in the 40-page document, in a clear reference to the United States. Such moves " do not accord with the developments of the times and are not conducive towards maintaining regional peace and stability" , ministry spokesman Yang Yujun told reporters. The official People's Liberation Army Daily went further, saying in a commentary on Monday China needed to beef up its defences to deal with a hostile West bent on undermining it. " Hostile Western forces have intensified their strategy to westernise and split China, and employed every possible means to contain and control our country's development," it said. On Monday, U.S. Secretary of State John Kerry defended the re-orientation of U.S. foreign policy towards Asia as he ended a trip to the region dominated by concerns about North Korea's nuclear programme. While China has been angered by North Korea's behaviour, including its third nuclear test in February, it has also made clear it considers U.S. displays of force in response to Pyongyang's behaviour to be a worrisome development. China is North Korea's most important diplomatic and financial backer - the two fought together in the 1950-53 Korean war - although the ministry's Yang would not be drawn on the subject aside from repeating a call for peace and dialogue. JAPAN " MAKING TROUBLE" China's own military moves have worried the region, too. China unveiled another double-digit rise in military expenditure last month, to 740.6 billion yuan (77 billion pounds) for 2013, and is involved in protracted and often ugly disputes over a series of islands in the East and South China Seas. " On the issues concerning China's territorial sovereignty and maritime rights and interests, some neighbouring countries are taking actions that complicate or exacerbate the situation, and Japan is making trouble over the Diaoyu Islands issue," the white paper said. The dispute with Japan over the uninhabited islands, which China calls the Diaoyu and Japan calls Senkaku, has escalated in recent months to the point where China and Japan have scrambled fighter jets and patrol ships shadow each other. The waters around the islands in the East China Sea are rich fishing grounds and have potentially huge oil and gas reserves. Vietnam, Taiwan, Brunei, Malaysia and the Philippines also have conflicting claims with China in parts of the South China Sea. China lays claim to almost the whole of the sea, which is criss-crossed by crucial shipping lanes. The U.S. shift comes as China boosts military spending and builds submarines, surface ships and anti-ship ballistic missiles as part of its naval modernisation, and has tested emerging technology aimed at destroying missiles in mid-air. China has repeatedly said the world has nothing to fear from its military spending, which it says is needed for legitimate defensive purposes in a complex and changing world, and that the sums spent pale in comparison with U.S. defence expenditure. |
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krisluke
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16-Apr-2013 14:06
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TOKYO, April 16 (Reuters) - Commodities from gold to oil recouped some of their earlier steep losses but remained volatile after investors dumped risk assets overnight, gripped by worries over slowing growth in China and the United States.
European stock markets were seen extending losses, with financial spreadbetters predicting London's FTSE 100, Paris's CAC-40 and Frankfurt's DAX to open down as much as 0.8 percent. U.S. stock futures were up 0.5 percent, pointing to a rebound at the Wall Street open after U.S. stocks dropped more than 2 percent and the Standard & Poor's 500 index had its worst day since Nov. 7 overnight, after two bombs ripped through the crowd at the finish line of the Boston Marathon on Monday killing at least three people and injuring more than 100. The MSCI's broadest index of Asia-Pacific shares outside Japan eased 0.1 percent after shedding as much as 1 percent to come closer to a 2013 low hit earlier this month, dragged down by its materials and energy sectors. Markets were ripe for some correction after recent rallies. U.S. stocks hit record highs, underpinned by optimism about a steady recovery in the world's two largest economies, despite patchy economic reports. Oil and base metals were resilient despite supply capacities, and investors piled up positions shorting the yen on expectations for bold monetary stimulus. " Broadly, risk markets had been rallying at a pace not in line with a tepid global growth recovery, so in a way, they are trying to revert to levels more in line with fundamentals. It's time to book profits from recent rallies and hoard cash," said Naohiro Niimura, a partner at research and consulting firm Market Risk Advisory in Tokyo. Cash gold and U.S. gold futures plunged to their weakest in more than two years, pulling silver lower and dragging Tokyo gold futures down almost 10 percent. Spot gold fell as much as 2.3 percent to $1,321.35 an ounce before recovering to $1,352.56 while silver shed as much as 2.4 percent to $22.04 before trading up at $22.76. On Monday, the price of gold bullion tumbled another $125 per ounce in its biggest-ever daily loss, and its 9 percent loss was the biggest since 1983. " Price actions point to a full-fledged flight of funds out of gold markets. Gold stands to lose the most," Niimura said, as a progress in fiscal consolidation will boost the allure of U.S. debt, reducing demand for an alternative safe-haven such as gold. Gold has been struggling to extend gains this year as a recent rally in U.S. and global equities drained money out of bullion while concerns about central bank selling and a steady drop in exchange traded funds on selling by large investors further undermined investor sentiment. Brent crude futures fell below $100 for the first time in nine months on Tuesday and last traded down 1 percent at $99.58 a barrel and U.S. crude traded down 1.3 percent at $87.60 after hitting a four-month low of $86.06. Investors will likely reassess their portfolio allocations for the second quarter, with Japan possibly surprising on the upside while uncertainty may take a deeper hold on the European and Chinese economies. The U.S. may be starting to feel the pain of its fiscal contraction. " I think the underlying driver is markets around the world are making an adjustment to some of the major commodity markets," said Ric Spooner, chief market analyst at CMC Markets. " They're now forecasting that the decline in commodity prices looks as though it might be happening sooner and that it's going a bit deeper than analysts had previously forecast." Shanghai copper fell to an 18-month trough of 51,920 yuan ($8,400) a tonne earlier, tracking losses in benchmark London copper overnight when it hit its lowest in a year and a half at $7,085 a tonne. London copper was last up 1 percent at $7,271 on Tuesday. YEN SHORTS UNWOUND Among the few assets that bucked the sell-off and gained was the yen, as the reversal in recent positioning meant short sales on the Japanese currency had to be covered. The dollar fell to a low of 95.67 yen and the euro also hit a low of 125 yen earlier but the dollar managed to crawl back nearly two yen and was last at 97.55 yen, while the euro also recovered to 127.53 yen. " Assets with large positions being built up will be squeezed out," said Hiroshi Maeba, head of FX trading Japan for UBS in Tokyo, noting that equities had been rallying recently on growth optimism. " In this light, the yen may firm a bit more given the way the currency's short positions had built up." A U.S. regional manufacturing report on Monday showed the pace of growth slowed, the latest indication the economy lost some steam heading into the second quarter, and coming just after news the Chinese economy unexpectedly stumbled in the first three months of 2013. The sell-off in gold hit metals-sensitive Australian shares , but they recovered some losses and were down 0.3 percent. Japan's Nikkei average also trimmed earlier losses to edge down 0.1 percent, after tumbling as much as 2 percent earlier as the yen's rebound took a toll on sentiment. |
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krisluke
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16-Apr-2013 14:00
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A worker walks past a residential construction site as the sun sets behind construction cranes on the outskirts of Beijing August 18, 2011. Credit: Reuters/Soo Hoo Zheyang (Reuters) - Moody's Investors Service on Tuesday affirmed China's government's bond rating of Aa3 but cut the outlook to stable from positive, the second pessimistic revision by a foreign ratings agency this month. |
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krisluke
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16-Apr-2013 09:18
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Offshore and marine: Service providers favoured over rigbuilders as China yards put pressure on margins
Offshore and marine: Service providers favoured over rigbuilders as China yards put pressure on margins China’s empty shipyards, which have been converted into rigbuilding yards because of the downturn in the shipping industry, are squeezing margins across the entire rigbuilding sector. That means profit margins of Singapore’s world-class rigbuilders are likely to come under pressure for years on end, says Vincent Fernando, an analyst at Religare. As he sees it, even the new flurry of activity in the offshore exploration and spending have not caught up with the oversupply of rigs. “We think there is a problem with overcapacity, and that is a problem for the Singapore yards as well as the Chinese yards, which are charging into the offshore space,” notes Fernando in a recent interview. While the benchmark Straits Times Index has risen 17% year-to-date, Sembcorp Marine is down 5.7% and Keppel Corp, the world’s largest rigbuilder, gained just 1.8%. Even China- based ship builder Cosco Corp, which is aspiring to build rigs, also lost 5.3% this year. To be sure, the quality of made-in-China rigs has improved by leaps and bounds, given sufficient time to move up the learning curve and with access to world-class equipment, notes Fernando. More importantly, the Chinese government has made offshore a strategic imperative as part of its five-year economic plan. The government has set a target for the offshore equipment industry to generate more than RMB200 billion ($40 billion) in sales for the 12th five-year plan (2011 to 2015) and a 20% global market share for the offshore equipment industry. Key offshore products include liquefied natural gas (LNG) carriers, semi-sub rigs, drillships, jackup rigs, FPSOs (floating production, storage and offloading vessels), semi-sub production platforms, SPAR platforms (cylindrical platforms), TLP platforms and pipe-laying vessels. Among China’s rigbuilders, there is Cosco Shipyard Group, which is 51%-owned by Cosco Corp and 30%-owned by SembMarine. With five shipyards, it has earmarked Cosco Nantong and Cosco Dalian for offshore and engineering. Cosco Nantong delivered a round rig to Sevan in 2009 after delays and cost overruns, which pressured earnings. It was only in FY2012 (Cosco has a December year-end) that the company managed to reverse the $150 million net loss from its offshore contracts in FY2011 into a profit of $28.6 million. Yet, in February, Cosco announced that Cosco Guangzhou had clinched an order for a semisub with a contract value of US$200 million ($248 million). There is also Hong Kong-listed China Rongsheng Heavy Industries Group Holdings, which won orders to build two CJ46 jack-up rigs for Singapore Exchange-listed Swissco Holdings for a total contract value of US$360 million. Another player, CIMC Raffles, won orders worth US$1.3 billion from Frigstad Offshore for two deepwater semi-subs in January. The rigs are more advanced than most that are being built in Singapore right now, according to Fernando. The deal was won partly because of contract terms that were far more attractive than what was available in Singapore. “It’s not that we think the Chinese yards are better than Singapore yards, but they will add capacity and take some of the space the Singapore yards are in. They will also compete for orders. We estimate that, by 2015, China’s offshore yard capacity — that is, yard space dedicated to rigbuilding — will rival Singapore’s,” Fernando explains. CHINA ADVANTAGE Besides having the land and labour that Singapore lacks, China’s yards can obtain subsidies from the Chinese government for loss-making contracts, as rigbuilding has been declared a national priority. “One area in which they are very competitive across the board is financing. They are offering very favourable financing terms. They have access to credit from stateowned banks and can generally offer better financing terms than Singaporean yards,” Fern- Dan FG for Maersk in the North Sea. On March 21, SembMarine was awarded an exclusive licence by Seahorse Platform Partners to use its patented SeaHarvester and SeaHorse technology in the design and construction of Minimum Facilities Platforms (MFPs) for the North Sea, Irish waters and other territorial waters of the UK. Both companies also signed a memorandum of understanding, in whichSembMarine will be awarded an additional exclusive licence to use the design to build these platforms for Southeast Asia and Australia. Nevertheless, with margins for all rigbuilders on a downward spiral, Fernando maintains he does not favour Chinese yards and is negative on all the rigbuilders. “I would say we favour the outlook for the services companies [instead]. That could be drilling companies or other services companies. We also like equipment producers,” he says. He expects Ezion Holdings and Swiber Holdings to outperform. “Ezion and Swiber earn money from offshore production and services, which are ongoing,” he explains, adding that both companies provide services for oil and gas production, unlike the yards, which need incremental capital expenditure to get an order. “So, if the industry doesn’t expand as much as expected, that will hit the yards more than companies that are in ongoing production,” he says. |
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krisluke
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16-Apr-2013 09:07
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By Frank Tang and Clara Denina NEW YORK/LONDON, April 15 (Reuters) - The price of gold bullion tumbled another $125 per ounce on Monday in its biggest-ever daily loss, as investors liquidated bullish bets en masse after months of disappointment over the performance of the precious metal. In percentage terms, Monday's 9 percent loss would be the biggest since 1983 and was almost double the loss on Friday. Commodities fell across the board, but few as hard as gold, which hit a two-year low, and silver which plunged 11 percent. Bullion's collapse caught many veteran investors, who see gold as portfolio protection against inflation and other market risks, by surprise. Monday's drop eclipsed the rout on Jan. 22, 1980, a day after gold hit its then-record $850 on global panic over oil-led inflation due to Soviet intervention in Afghanistan and the Iranian revolution. There have been no sudden changes in the macro economic argument for gold in the last week, although numerous factors have kept gold from rising this year while investments like U.S. stocks took off. While last week's news that the Central bank of Cyprus might sell gold reserves to finance its European Union bank bailout did trigger a rush for the exits when bullion slid below the pivotal $1,500 an ounce threshold, few saw it likely to usher in a round of other official disposals. " The pressure from proposed sale of Cyprus gold is one of the factors, and once one of them start they all run from the hen house," said Robert Richardson, senior account executive and trading officer at Canadian broker-dealer W.D. Latimer Co. Ltd. The big question is whether gold has entered a lasting bear market after 12 years of consecutive yearly gains. Gold hit the lowest price since February 2011 and has now almost halved its rally since the 2008 economic crisis, leaving the metal around $550 below its record high of $1,920.30 set in September 2011. It is down 30 percent from that high well in excess of the 20 percent considered a bear market milestone. Recent signs that Fed officials appeared to be nearing a decision to start winding down their bond purchases to end stimulus contributed to the negative tone for gold, even though inflation has failed to materialize as feared during its rounds of post-financial crisis quantitative easing. Spot gold dropped as low as $1,336.04 an ounce before recovering slightly to $1,347.29 by 4:31 p.m. EST (1931 GMT), down 8.9 percent, its biggest single percentage fall since 1983. U.S. futures for June delivery settled down $140.30 at $1,361.10. Trading volume hit a record high exceeding 700,000 lots, almost quadruple the 30-day average, preliminary Reuters data showed. Gold recouped losses a bit when news of two explosions hit the Boston Marathon late Monday afternoon, killing at least two people and injuring 23. The metal, however, fell further in late trade. The exodus from bullion hit broader commodity and financial markets. U.S. stocks posted their worst day since November due in part to losses in commodity-related stocks. But Monday's selloff in the Dow Jones industrial stock average came days after stock indexes hit record highs. Disappointing Chinese economic data earlier on Monday simply gave investors another excuse to slash holdings as U.S. equities and other key industrial commodities including oil and copper fell. FUND LIQUIDATION WEIGHS Liquidation came from all quarters, including exchange-traded funds, speculators and even physical bullion owners in China and India, the world's largest bullion markets, said David Govett, head of precious metals at Marex Spectron in London. " This is a market that has only got one thing on its mind ... get me out," he said. Plummeting prices took their toll on shares of gold mining companies, as Canada's Barrick Gold Corp, the world's biggest gold producer, slid 10 percent. On Monday, hedge fund manager John Burbank, a long-time investor in gold, said the recent sharp selloff in bullion came as a surprise to many investors as some economic improvement and declining commodity prices took their toll. Investors cut exposure to gold, with total holdings at the world's major bullion gold-backed exchange-traded-funds falling to their lowest since early 2012. Traders also cited liquidation by prominent hedge funds in gold exchange traded funds, especially the SPDR Gold Trust , which was one of the most-active trading U.S. stocks. The gold ETF posted a record monthly outflow in February. Paulson & Co, run by billionaire financier John Paulson and by far the biggest shareholder in SPDR Gold, told clients earlier this month its gold fund suffered double-digit losses during the first quarter. The reversal of yen carry trades, in which investors borrowed cheaply in the Japanese currency to reinvest the money in higher yield assets, also led to some gold selling as the yen rebounded from a four-year low against the dollar. Jewelers in New York slashed prices and shoppers sought out potential bargains. Retail investors scooped up gold coins at lower prices, Ray Nessim, CEO of major U.S. coin dealer Manfra, Tordella & Brookes told Reuters. Among other precious metals, silver was down 11.8 percent to $22.81 an ounce. Palladium dropped 7.8 percent to $652.72, while platinum was down 6 percent at $1,396.24, on the verge of entering a bear market, or 20 percent off from its recent high set earlier this year. |
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krisluke
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15-Apr-2013 22:46
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Nymex Crude Oil (CL)Crude oil dropped sharply last week and is back pressing 90 but it's somewhat still staying in recent converging range. Outlook stays neutral first. Key near term focus is now on 89.33 support and 97.80 resistance. We'd still favor that recent price actions are in triangle pattern and thus, would expect any downside attempt to be contained above 89.33. Meanwhile, sustained break of 97.80 will be an important sign of upside strength and should at least send crude oil for a take on 100 psychological level. In the bigger picture, price actions from 114.83 are viewed as a triangle consolidation pattern, no change in this view. And, such consolidation could still be in progress and Crude oil remains bounded in the converging range. Nonetheless, the pattern should be close to completion and an upside breakout should be seen soon. Above 100.42 will strongly suggest that whole rebound from 33.29 has resumed for above 114.83. And in case of another fall, strong support should be seen above 77.28 to bring rebound. In the long term picture, crude oil is in a long term consolidation pattern from 147.27, with first wave completed at 33.2. The corrective structure of the rise from 33.2 indicates that it's second wave of the consolidation pattern. While it could make another high above 114.83, we'd anticipate strong resistance ahead of 147.24 to bring reversal for the third leg of the consolidation pattern. Nymex Crude Oil Continuous Contract 4 Hours Chart
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krisluke
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15-Apr-2013 22:45
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Risk-off sentiment was carried on in Asian session Monday after disappointing US data released last week. China released weaker than expected GDP growth in 1Q13. This raised concerns that recovery the world’s second largest economy might have lost momentum. Asian shares slipped with the MSCI Asia Pacific index losing more than -0.5% in the morning session. In the commodity sector, crude oil prices weakened further with the front-month contract for WTI crude plummeted for a third consecutive day, falling to as low as 89.43, a level not seen since early March. The Brent crude contract slid further to 101.52. Gold plunged for a second straight day with the benchmark Comex contract falling to as low as 1422.2 earlier in the day. China’s GDP grew +7.7% y/y in 1Q13, down from +7.9% a quarter ago. Growth was +1.6% q/q in the first quarter, down from +2% in 4Q12. Industrial production rose +8.9% y/y, compared with the +9.9% gain combined in the first 2 months. Fixed asset investment excluding rural households soared +20.9% y/y in 1Q13, following a +21.2% gain in the first 2 months. Retail sales rose +12.6% during the first quarter. The World Bank stated in a report that Asian countries should consider lifting monetary easing so as to avoid asset bubbles and inflation. The world lender said that “near-zero interest rates and new and protracted rounds of quantitative easing in the United States, European Union, and Japan are inducing large capital inflows into emerging marketsincluding in East Asia… The risk of an asset boom in the markets, in which global liquidity spills over is emerging, with asset valuations moving ahead of fundamentals and possibly a correction down the road”. Last week, IMF director Lagarde stated that Asian central banks should “think about the timing and pace of withdrawing monetary support”. Commitments of Traders: With the exception of natural gas, speculators were bearish towards the energy complex in the week ended April 9. Net length for crude oil futures dropped -25 452 contracts to 223 398. Heating oil drifted to net short last week after reducing -6 520 contracts while net length for gasoline fell -15 068 contracts to 68 742. Net short for natural gas fell -2 502 contracts to 55 452. Speculators were bearish towards precious metals during the week. Net length for gold future was down -847 contracts to 119 359 while that for silver futures fell -231 contracts to 7915. For PGMs, net length for platinum slipped -3 752 contracts to 33 243 while that for palladium dropped -2 952 contracts to 25 018. 
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krisluke
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15-Apr-2013 17:23
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China growth risks in focus as Q1 data falls short
* China Q1 FAI +20.9 pct y/y vs 21.3 pct in Reuters poll * China March industrial output +8.9 pct y/y vs 10.0 pct in Reuters poll * China March retail sales +12.6 pct y/y vs 12.5 pct in Reuters poll By Kevin Yao and Langi Chiang BEIJING, April 15 (Reuters) - China's economic recovery unexpectedly stumbled in the first three months of 2013 with slowing factory output and investment spending forcing analysts to start slashing full-year forecasts despite official insistence that the outlook was favourable. The world's second-biggest economy grew 7.7 percent in the first quarter from a year ago, slower than 7.9 percent hit in Q4 2012, below the Reuters consensus forecast of 8.0 percent and confounding expectations of a surprise uptick that emerged after surging credit and export data were published last week. Commodities from crude oil to copper, wheat and corn all fell after the data, share prices were knocked lower and the Australian dollar slid as investors repriced expectations of import demand from China. " This number may well explain why there was so much liquidity support in Q1," Tim Condon, head of Asian economic research at ING in Singapore, told Reuters. " Industrial production is unexpectedly weak and that's the source of weakness in GDP. Based on this, the consensus forecasts for GDP are going to be headed lower and we'll certainly be looking at ours," Condon added. Data released alongside GDP showed industrial output grew 8.9 percent in March from a year ago, below expectations of 10.0 percent in a Reuters poll. China produced 2.14 million tonnes of crude steel per day in March, down 3.2 percent from the previous month, with mills still cautious about the prospects of a seasonal pick-up in demand. Monthly output was still 6.6 percent higher than the same period last year, but product stockpiles soared to record levels in March. The disappointing production numbers, which also showed China's implied oil demand falling to its lowest in seven months, led to a broad-based sell-off of risky assets, with Shanghai steel futures down more than 3 percent and Brent crude futures LCOc1 dropping more than $2 to hit a fresh nine-month low. RBS cut its full-year GDP growth forecast to 7.8 percent from 8.4 percent before the data. " This is both due to the impact of the weaker start of 2013 and because the Q1 data shows slower quarter-on-quarter growth momentum than expected," Louis Kuijs, chief China economist at RBS in Hong Kong, wrote in a note to clients. His observation on quarterly growth was shared by others equally concerned about quarter-on-quarter expansion easing to 1.6 percent in Q4 from 2.0 percent in Q4. Sheng Laiyun, spokesman at the National Bureau of Statistics which released GDP in a flurry of other data on Monday, told a news conference that such worries were unfounded. " China's economic fundamentals haven't changed. We are confident about future growth and optimistic about achieving this year's growth target," Sheng said. & lt ----------------------------------------------------------- Risk assets hit as China stirs recovery worry World Bank cuts East Asia growth estimate WTO cuts 2013 trade forecast on protectionism China credit growth surges in March China March trade data signals recovery China GDP in graphics -----------------------------------------------------------& gt China has set a 7.5 percent GDP growth target for 2013, a level Beijing believes will create sufficient jobs while providing room to deliver structural reforms the government -- and international policy advisers -- believe are necessary to put growth on a more sustainable long term footing. " Employment is very stable," Sheng said. " Stable employment is a basic indicator of China's economic stability," he added, quoting Ministry of Labour and Social Securities data showing that China created over 3 million new jobs in the first quarter. STABILITY UNDERWHELMS Stability clearly underwhelmed investors who had priced in an acceleration from the fourth quarter. Such an uptick would have underpinned the recovery trades that had gathered steam in the wake of data last week that showed a near 60 percent increase in total credit in the economy in Q1 2013 versus Q1 2012. A 0.1 percent downgrade of the World Bank's 2013 China growth forecast to 8.3 percent, following last week's cut to the global trade outlook from the World Trade Organisation, was a further blow to economists anticipating that broadly brighter global economic data in the first quarter would underpin China's recovery. Weak industrial output growth and fixed asset investment growth of 20.9 percent in the first quarter versus the 21.3 percent market consensus were big drags on sentiment -- as well as GDP. The most sluggish increase in power generation in six months, up 2.1 percent year on year in March, and the fall in steel output overshadowed a gentle uptick in retail sales growth to 12.6 percent year-on-year in March from 12.3 percent in February and expectations of 12.5 percent. RECOVERY DELAYED The rapid rise of a new consumer class in China is a factor that keeps investors broadly optimistic about the longer-term future of the economy, provided policymakers can rebalance the drivers of growth away from the investment spending and exports to which it is currently tilted. Domestic consumption was the biggest driver of growth in Q1, delivering 4.3 percentage points of the 7.7 percent total. Capital formation delivered 2.3 percentage points while exports generated the 1.1 percentage point balance. But as construction is a major component of domestic consumption, economic activity is still largely dependent on investment spending which is currently around 50 percent of GDP and a level which worries the International Monetary Fund, among others. China's real estate investment rose 20.2 percent Q1 on a year earlier, while revenues from property sales rose 61.3 percent, adding to worries of an unsustainable house price boom -- though a profit warning from construction equipment maker, Zoomlion, was a sign that Beijing's property cooling measures are biting. Real estate investment was worth 11 percent of GDP Q1 and directly impacts around 40 other business sectors. The key question for economists is whether China's recovery momentum from its weakest full year of growth since 1999 has been reversed -- and not simply slowed -- and sees the government tinker with policy settings in response that create problems further down the road. " I hope they don't ease because policy is already very easy," Tao Wang, China economist at UBS in Hong Kong, said. " I don't think this is a turning point for slower growth. I think the recovery is probably delayed, but I think the recovery is still coming." |
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krisluke
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15-Apr-2013 17:22
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China shares post worst day in 2 weeks, Hong Kong unwinds last week's gains
* Volumes stay weak as beta plays slide after weak China Q1 GDP * Chinese gold miners hurt by slumping gold prices * Zoomlion tumbles to 1-1/2-year low after Q1 profit warning By Clement Tan HONG KONG, April 15 (Reuters) - China shares posted their worst loss in more than two weeks on Monday, while Hong Kong nearly erased most of last week's gains after weaker-than-expected China GDP data aggravated the gloom from several Chinese corporate profit warnings. China's economic recovery unexpectedly stumbled in the first three months of 2013 to 7.7 percent from the previous quarter's 7.9 percent and below an 8.0 percent Reuters poll consensus, sparking a broad sell-off in cyclical sectors. The Hang Seng Index declined 1.4 percent to 21,772.7, almost paring last week's gains that came in low turnover. The China Enterprises Index of the leading Chinese listings in Hong Kong sank 2 percent. The Shanghai Composite Index shed 1.1 percent and the CSI300 of the top Shanghai and Shenzhen A-share listings lost 1 percent. Both closed at their lowest since March 28, with gold miners among the biggest drags after gold prices sank to a 2-year low. Shanghai volume increased slightly from Friday, but was still some 24 percent below its average in the last month, the tenth session it had remained under that level. Hong Kong turnover was 16.5 percent below average. " This drop in gold prices is a precursor to more volatility in the stock markets. I won't be adding excessive risk before China's second quarter data," said Hong Hao, chief strategist at Bank of Communication International Securities. " The bad market reaction today is a result of raised expectations after last week's credit growth figures. This China GDP miss probably points to ineffectual credit growth because money is being used by companies to pay off short-term loans and interest," Hong added. Expectations for a stronger growth figure were elevated last week when data showed total social financing, the central bank's broad measure of liquidity in the economy that includes non-bank lending, surged to 2.54 trillion yuan ($410.2 billion) in March from February's 1.07 trillion yuan. On Monday, Chinese oil major CNOOC Ltd was among the biggest drags on the Hang Seng Index, diving 3.1 percent to its lowest closing level since June with Brent oil gravitating back towards a 9-month low set last Friday. Now trading at HK$13.74, chart support is next seen at HK$13.18, its June 5 trough. A break below this level may point to more losses ahead. It is now down nearly 20 percent this year, compared with the Hang Seng Index's 4 percent loss. Chinese gold miners were among the bigger percentage losers in the A-share market as gold prices extended a downward spiral on Monday after posting last Friday its biggest one-day slide since 2008. Zijin Mining tumbled 5.6 percent in Shanghai and 7.2 percent to its lowest close since July in Hong Kong. Its H-share listing is now down 24 percent this year, compared with the 9 percent slide for the China Enterprises Index. In a bi-weekly client note, Chinese brokerage CICC said they expect the H-share index, which closed on Monday at 10,440.8, to reach 12,000 by the end of the June, while also slightly raising their end-2013 target to 12,800 from 12,500. " We see material domestic policy tightening less likely anytime soon," they said in the same note, released before Monday's slew of China economic data announcements. " Instead, with the expansionary fiscal and moderate monetary policy, we expect industrial output growth to reaccelerate over coming months, driven mainly by continued strength in fixed asset investment and still accommodative liquidity," they added. BAD DATA ADDS TO PROFIT WARNING GLOOM The slew of China data release on Monday also saw March industrial output growing 8.9 percent from a year earlier against expectations for 10 percent, retail sales rising 12.6 percent versus estimates for 12.5 percent. Quarterly fixed-asset investment grew 20.9 percent in the first quarter from a year earlier, lower than expectations for 21.3 percent. This added to jitters after Zoomlion Heavy Industry warned on Friday that its first quarter net profit may drop by up to 80 percent. JP Morgan analysts said in a note that Zoomlion's weak first quarter result may trigger further cuts in earnings expectations, flagging mounting destocking pressures and its rapidly rising ratio of potential bad debt. Zoomlion's shares in Hong Kong dived 8.3 percent to its lowest closing level since Sept. 26, 2011. The H-share listing of China's second-largest construction equipment maker has plunged 34 percent in 2013. Its A-share listing shed 5.5 percent in Shenzhen and is now down 17 percent this year. Another cyclical counter, China National Materials Co Ltd tumbled 5.9 percent after warning it expects to post a substantially decreased first quarter net profit from the year before due to increasing market competition. |
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krisluke
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15-Apr-2013 17:16
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Gold sinks to 2-year low other precious metals hit
Gold ingots stand in a row
SINGAPORE (Reuters) - Gold sank further into bear-market territory on Monday as prices dropped to a two-year trough on fears of central bank sales and less monetary stimulus, while holdings on global exchange-traded funds hit their lowest in more than a year. Along with gold, investors ditched other commodities from oil to copper after a less-than-forecast growth in China's gross domestic product in the first quarter stoked doubts about the health of the global economy. Gold hit an intraday high at $1,495.16 an ounce, but then plunged to $1,427.14, its lowest since April 2011. It stood at $1,452.50 by 0709 GMT, down $25.85. Having fallen nearly 7 percent over two sessions, gold is on course for its biggest two-day drop since September 2011. " Breaking $1,500 is not a good sign for gold. We don't know what the next support level is going to be," said Ronald Leung, chief dealer at Lee Cheong Gold Dealers in Hong Kong. " Even though there are some shorts in the market, I think people still want to push the price down. There's no excuse to push it up, unless there's a war between North and South Korea. There should be a rebound as the market is already oversold." U.S. futures for June delivery extended losses to fall more than 5 percent as Tokyo gold futures tumbled around 8 percent, marking Japanese futures biggest daily fall since September 2011. " I am sure we will see much higher prices after the correction. We broke $1,530 after sell orders on COMEX were triggered," said Domenic Parli, a physical dealer at Hong Kong-based Fine Metal Asia. " This morning in Asia, we had the reaction to what happened on Friday," said Parli, adding that physical buyers could take advantage of the price drop. Other precious metals were also hit by heavy selling, with silver falling to its lowest since November 2010, platinum at its weakest since August last year, and palladium hitting a three-month low. Although jewellers could snatch the opportunity to stock up, a meagre increase in premiums for gold bars suggested that consumers were buying time. Gold slipped into a bear market last week after plunging more than 5 percent on Friday to below $1,500 for the first time since July 2011. Premiums for gold bars ticked up to $1.50 to the spot London prices in Singapore, versus $1.20 last week. " I think jewellers are the happiest lot, but wholesellers will stay on the sidelines at the moment. It's human nature. When the price crashes like this, they will tend to wait for it to go even lower," a dealer in Singapore said. INVESTORS CUT EXPOSURE Investors cut exposure to gold, with total holdings at the world's major bullion gold-backed exchange-traded-funds falling to their lowest since early 2012. Investors have recently been dumping gold, which has dropped for the past three straight weeks, and flocking to equity markets for better returns. Even escalating tensions on the Korean peninsula have failed to burnish its safe-haven appeal. North Korea prepared for the annual celebration of its founder's birth on Monday, having rejected talks with South Korea aimed at reducing tensions and reopening a joint industrial park between the two countries. Another factor weighing on the precious metal is Cyprus' plan to sell gold reserves to raise around 400 million euros. That has raised concerns other indebted euro zone countries could follow suit, while signs of a tentative recovery in United States could further dent gold's appeal. " What we now see is panic selling, perhaps triggered by the Fed's stimulus view. The Fed has given the signal that there's a possibility to reduce QE and that took a lot of trust out of gold," said Dominic Schnider, analyst at UBS Wealth Management. " As the Fed becomes less reflationary and ECB not willing to end its deflationary policy, the balance towards inflation is shifting dramatically. And people recognise that in an environment where you have no inflation is a powerful driver to get out of the metal." While policy doves currently hold sway over Chairman Ben Bernanke and the majority of Fed policymakers, minutes from last month's policy meeting suggest the quantitative easing programme could draw to a close by year end, earlier than some economists had expected. |
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krisluke
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15-Apr-2013 17:14
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European shares extend losses as miners weaken further
European flags in front of the European parliament in Strasbourg, France
The pan-European FTSEurofirst 300 index was down by 0.9 percent at 1,171.30 points, with the STOXX Europe 600 Basic Resources Index - which includes mining stocks - extending losses to fall 3.2 percent. The euro zone's blue-chip Euro STOXX 50 index also fell 0.9 percent to 2,609.91 points, pushing the index below its 50 day simple moving average level of around 2,650 points - often seen as a sign that it could weaken further. " If we see a close below the 200-day exponential moving average line, which is at 2,567 today, then the market is in serious trouble," Roelof-Jan van den Akker, senior technical analyst at ING Commercial Banking, said |
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krisluke
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15-Apr-2013 15:40
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A Complete Look At China's Latest Disappointing Data In One Chart 
China just released its latest batch of economic data which showed that economic growth missed analyst expectations. First here's a look at the latest data from China, including trade and inflation data that were released last week:  Business Insider " The fall in 1Q13 GDP growth was mainly driven by a slowdown in consumption growth due to the new leaders’ crackdown on govt luxury spending, a pause in inventory restocking and slowdown in property FAI growth due to concerns on property tightening," said Bank of America's Ting Lu in a note to clients. There has already been a jump in lending in March. And some economists have warned that this could be the end of easy credit in China as this surge in lending poses risks to the financial system. But China has set a GDP target of 7.5 percent for the year. And some economists like Lu expect monetary policy to stay neutral (on account of cooling inflation) and GDP growth to climb back to 8 percent in the second quarter, if the bird flu is kept in check. |
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krisluke
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15-Apr-2013 15:21
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As the world waits and watches for an expected North Korean ballistic missile test, the U.S. and its allies are prepared to respond. U.S. officials are conceding that North Korea may be increasing its nuclear capabilities, but they don't expect a nuclear strike. They suggest that other military moves by Pyongyang involving artillery attacks or shelling of nearby South Korean islands could actually present a more serious threat in triggering a conflict. WHY ALL THE HUBBUB Since the 1950-53 Korean War, North Korea has feared that Washington is intent on destroying the regime. The U.S. worries that Pyongyang will re-ignite the conflict with South Korea, and is uneasy because little is known about Kim Jong Un, the North's new, young leader, and considers him unpredictable. Both sides have ratcheted up the rhetoric and military muscle moves in recent weeks. North Korea threatened a pre-emptive strike against the U.S., and conducted an underground nuclear test in February and a rocket launch in December. The threats are seen as an effort to pressure Washington and Seoul to change their North Korean policies and convince the North's people that their new leader is strong enough to stand up to its foes. U.S. and South Korean troops have been conducting annual joint military drills in the region since early March, including bringing out nuclear-capable stealth bombers and fighter jets in what the Air Force acknowledged was a deliberate show of force. NORTH KOREAN MISSILES North Korea has been steadily working to display an increasing capability to launch missiles. Last year it failed in an attempt to send a satellite into space aboard a long-range rocket. A subsequent launch in December was successful, and that was followed by the country's third underground nuclear test on Feb. 12. U.S. officials believe the North is preparing to test fire a medium-range " Musudan" missile. And a section in a new Defense Intelligence Agency assessment concludes with " moderate confidence" that the North could deliver nuclear weapon by ballistic missiles. The report notes that the delivery system is still not considered reliable. U.S. RESPONSE The North American Aerospace Defense Command, or NORAD, which has responsibility for U.S. homeland defense, is watching the region via satellite and the USS Fitzgerald and the USS John S. McCain, Navy destroyers armed with sophisticated missile defense systems, have been positioned to best be able to detect and track a missile launch. The U.S. is confident it would be able to shoot it down, but would do so only if it appears to be a threat to America or its allies. The U.S. is also prepared to provide military assistance to South Korea in the event of any other type of attack by the North. WHAT THEY'RE SAYING Secretary of State John Kerry warned North Korea not to conduct a missile test, saying it will be an act of provocation that " will raise people's temperatures" and further isolate the country and its people. President Barack Obama said his administration would " take all necessary steps" to protect American citizens and he urged Pyongyang to end its threats. North Korea has issued no specific warnings to ships and aircraft that a missile test is imminent. And the country has begun festivities celebrating the April 15 birthday of the country's late founder, Kim Il Sung, which is considered the most important national holiday. China has been a longtime political, military and economic backer of North Korea and is considered to have more real leverage over the North. U.S. officials say there are indications Chinese leaders have become frustrated with Pyongyang's recent behavior and rhetoric. In a positive development for the U.S., China agreed publicly to work with the U.S. to achieve the goal of a nuclear-free Korean peninsula. The United States and Japan opened the door Sunday to new nuclear talks with North Korea if that country lowered tensions and honored past agreements. Kerry told reporters in Tokyo that North Korea would find " ready partners" in the United States if it began abandoning its nuclear program. Japan's foreign minister, Fumio Kishida, also demanded a resolution to a dispute concerning Japanese citizens abducted decades ago by North Korean officials. The diplomats seemed to point the way for a possible revival of the six-nation talks that have been suspended for four years. |
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yummygd
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04-Apr-2013 15:20
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someone do us a favour n give that boy a spanking. god. I had hopes he would be sensible since he was educated overseas. shakes head. just give USA a reason n North Korea will be just Korea. |
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krisluke
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04-Apr-2013 15:15
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In a statement, the North's supreme military command said it is formally notifying the White House and the Pentagon that " reckless operations" involving " cutting-edge" nuclear weapons have been finally approved. Most analysts put North Korea's nuclear weapons capability years away from a reliable rocket, warhead, and re-entry vehicle — all needed for a " cutting edge" strike. The KCNA statement said exactly, North Korea would attack with a " smaller, cutting edge, lighter and diversified nuclear strike." |
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krisluke
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04-Apr-2013 14:25
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krisluke
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04-Apr-2013 13:39
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'Sell In May And Go Away'? |
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krisluke
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04-Apr-2013 12:51
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What country split Korea into North Korea and South Korea? The country was split by the United Nations after WWII (mainly by the Soviet Union and the United States). It was held by Japan during WWII and after the UN split the country into two. The north being held by Soviet troops and south By US troops. By 1948 nether country could agree on how to make it one country and in the end the north turned to communism and the south to a more democratic government. In 1950 the Korean war started when North Korea invaded South Korea. |
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krisluke
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04-Apr-2013 12:08
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North Korea repositions missile as world watches. The movement was detected by both South Korean and US intelligence.
" We are closely monitoring whether the North moved it with a view to actual launch or just as a show of force against the US."
Japan's Asahi Shimbun newspaper also carried a similar report. The Musudan missile was first unveiled at a military parade in October 2010 and is believed to have an intended range of around 3000km. However, it is not known to have been tested. Yonhap cited intelligence sources as saying the North might launch the missile on April 15, the birth anniversary of founding leader Kim Il-Sung. |
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krisluke
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04-Apr-2013 12:01
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