Interestig time we in !!
Is a pull back immenent or we in a BULL RUN !!!
REF : Bloomberg
"March 14 (Bloomberg) -- European stocks rose, extending the biggest gain in six weeks, and the dollar strengthened after the Federal Reserve bolstered confidence in the U.S. banking system and raised its economic assessment. Commodities fell as Premier Wen Jiabao said home prices were far from reasonable levels.
The Stoxx Europe 600 Index climbed 0.6 percent as of 8:22 a.m. in London, adding to a 1.8 percent rally yesterday. Standard & Poor’s 500 Index futures slipped 0.1 percent. The yen reached an 11-month low and the dollar rose against most major peers. Yields on German 10-year bonds climbed six basis points to 1.88 percent. Treasury 10-year yields advanced to the highest level this year. The S&P GSCI Index of raw materials retreated 0.4 percent.
The Fed said yesterday that strains in global financial markets have eased and the labor market is gathering strength. In a separate statement, the U.S. central bank said 15 of the nation’s largest 19 banks could maintain adequate capital levels even in a recession scenario. Wen said relaxing China’s property curbs could cause “chaos” in the market.
“It is just a continued pattern of relatively strong U.S. economic data,” said Shane Oliver, Sydney-based head of investment strategy at AMP Capital Investors Ltd., which oversees about $100 billion. The stress tests are “a fairly positive sign for the U.S. financial sector, banks in particular. It shows how much things have turned around from the situation three years ago,” he said.
Asian Stocks
The Shanghai Composite Index tumbled 2.6 percent, the biggest drop in more than three months. Hong Kong’s Hang Seng Index slipped 0.2 percent, erasing an early gain of as much as 1.4 percent, as banks and real-estate developers slumped.
The Nikkei 225 Stock Average gained 1.5 percent as exporters advanced on speculation that declines in the yen will boost overseas earnings. The BSE India Sensitive Index, or Sensex, climbed 0.6 percent.
Samsung Electronics Co., South Korea’s biggest consumer electronics exporter, rose 2.4 percent in Seoul after iSuppli said the company will supply the touch screen for Apple Inc.’s new iPad. United Co. Rusal, an aluminum producer, fell 4.1 percent in Hong Kong after its chairman quit because of disputes with controlling shareholder Oleg Deripaska about dividends and asset sales.
The Dow Jones Industrial Average closed yesterday at the highest level since 2007. The Fed said that it expects “moderate economic growth” and predicted the unemployment rate “will decline gradually.” In their last statement in January, policy makers said growth would be “modest” and unemployment “will decline only gradually.”
Stress Tests
Financial stocks rose 0.7 percent in the MSCI Asia-Pacific gauge, the third-biggest advance among 10 industries. The results of the U.S. central bank’s stress tests show that almost three years of economic expansion have helped U.S. banks raise profits, rebuild capital, and increase liquidity after the collapse of Lehman Brothers Holdings Inc. in 2008.
Citigroup Inc. slumped 3.3 percent after the close of regular trading in New York as it failed to meet the Federal Reserve’s minimum requirements in a stress test.
“I was expecting all of the banks to pass, but when you look at the terms the stress tests were so onerous that a modest miss really isn’t all that discouraging to me,” said William Fitzpatrick, a Milwaukee-based financial-services analyst at Manulife Asset Management, whose team oversees $800 million.
Breakeven Rate
A gauge of inflation expectations based on Treasury yields climbed to a seven-month high before U.S. data today that may show import prices rose the most in three months. The 10-year breakeven rate, derived from the difference between yields on conventional and index-linked bonds, rose as high as 2.38 percentage points, a level unseen since Aug. 2. The benchmark 10-year note yield rose three basis points to 2.16 percent, the highest level since Dec. 2.
The cost of insuring Asian bonds against non-payment dropped, according to credit-default swap traders. The Markit iTraxx Asia index of 40 investment-grade borrowers outside Japan fell 5 basis points to 147 basis points, Barclays Plc prices show. The gauge is poised to close at its lowest level since Sept. 1, according to data provider CMA.
The dollar rose 0.3 percent to 83.22 yen, after reaching 83.32, the strongest level since April. The yen has lost 5.4 percent in the past month, the worst performer among the 10 developed-market currencies tracked by Bloomberg Correlation- Weighted Indexes.
Copper for delivery in three months fell as much as 1 percent to $8,474.50 a metric ton in London.
Platinum prices climbed above gold for a third day, after trading at a discount since September, on speculation that demand will increase with stronger global economic growth as output in South Africa, the world’s largest producer, declines. Spot platinum, this year’s best-performing precious metal, traded at $1,689.25 an ounce. Spot gold was at $1,668.35 an ounce. "
To contact the reporters on this story: Lynn Thomasson in Hong Kong at lthomasson@bloomberg.net ; Yoshiaki Nohara in Tokyo at ynohara1@bloomberg.net .
===
Steven Morris CA (SA)
Mobie : 083 943 1858
Fax: 086 671 2498
E-Mail: steven@global.co.za
Wednesday, 14 March 2012
Tuesday, 13 March 2012
Platinum briefly tops gold, first time since Sept
Has gold had its Run !!
13-Mar-2012 12:28
LONDON, March 13 (Reuters) - The spot platinum price briefly traded above that of gold for the first time since early September on Tuesday, bringing an end to six consecutive months of outperformance by the bullion price.
Spot platinum XPT=, which touched a session high of $1,698.50 an ounce, was quoted at $1,694.99 an ounce by 1021 GMT, up 0.5 percent on the day, while gold held at $1,697.40 an ounce, down 0.1 percent.
Platinum has gained more than 20 percent so far in 2012, after supply disruptions starting in January in top producer South Africa removed nearly 200,000 ounces of supply from the market, helping to erode an overhang of metal while demand in key sectors such as the European car industry remains patchy.
(Reporting by Amanda Cooper; Editing by Alison Birrane) ((amanda.cooper@thomsonreuters.com)(+44 2075423424)(Reuters Messaging: amanda.cooper.thomsonreuters.com@reuters.net))
13-Mar-2012 12:28
LONDON, March 13 (Reuters) - The spot platinum price briefly traded above that of gold for the first time since early September on Tuesday, bringing an end to six consecutive months of outperformance by the bullion price.
Spot platinum XPT=, which touched a session high of $1,698.50 an ounce, was quoted at $1,694.99 an ounce by 1021 GMT, up 0.5 percent on the day, while gold held at $1,697.40 an ounce, down 0.1 percent.
Platinum has gained more than 20 percent so far in 2012, after supply disruptions starting in January in top producer South Africa removed nearly 200,000 ounces of supply from the market, helping to erode an overhang of metal while demand in key sectors such as the European car industry remains patchy.
(Reporting by Amanda Cooper; Editing by Alison Birrane) ((amanda.cooper@thomsonreuters.com)(+44 2075423424)(Reuters Messaging: amanda.cooper.thomsonreuters.com@reuters.net))
Euro Finance Chiefs Give Political Backing to Greek Aid Plan
Hope this is the end of this matter so EU can move forward!!
"March 13 (Bloomberg) -- Euro-area finance ministers signed off on a second Greek bailout, clearing the way for the first payment from the 130 billion-euro package ($170 billion) to be made this month.
“The new Greek program is not only in its starting blocks, but has been politically adopted tonight by the euro group,” Luxembourg Prime Minister Jean-Claude Juncker, who heads the group of 17 finance ministers, said in Brussels late yesterday. Euro finance officials will give a formal approval on March 14, a day before the International Monetary Fund board votes on its contribution.
Greece is now in line to receive more than 100 billion euros in the next three years from the European Financial Stability Facility, the euro region’s temporary rescue fund, starting with payments of 5.9 billion euros in March, 3.3 billion euros in April and 5.3 billion euros in May, EFSF Chief Executive Officer Klaus Regling said.
The agreement caps months of grueling negotiations between Greece, the IMF and euro-area authorities over the successor to an initial 2010 bailout that failed to halt the debt crisis. To win new the aid package, Greece had to sign on to deep budget cuts and complete the world’s largest-ever sovereign debt restructuring.
‘Fundamental Obligations’
“The situation has changed for Greece today and this will have an effect on the economic life of the country,” Greek Finance Minister Evangelos Venizelos told reporters. Greece has “fundamental obligations” and must continue to implement its austerity program, he said, adding that elections in Greece won’t interrupt the pace of budget measures.
The debt swap wipes more than 100 billion euros off Greece’s books and includes the use of collective action clauses to compel investor participation. Euro finance ministers agreed on March 9 that Greece had met the terms for bailout funding and released 35.5 billion euros in payments and interest to bondholders.
As a result of the swap, Greece’s debt is on track to fall to 117 percent of gross domestic product by 2020, creating a buffer as the country strives to meet its commitments, Juncker said. Greece’s future in the euro area is assured “whatever will happen,” he said.
Bank Recapitalization
The Greek rescue package means that the EFSF will be looking to financial markets more frequently as well as issuing bonds directly on a “non-cash” basis, Regling said. Last week, the fund issued 66 billion euros in bonds and bills without tapping the markets, comprised of 35 billion euros in European Central Bank collateral enhancements and 31 billion euros in accrued interest and debt swap sweeteners.
Going forward, the fund expects to disburse 48 billion euros on a non-cash basis for Greece’s bank recapitalization efforts. Venizelos said he expects his nation to receive a 25 billion-euro first tranche of bank-sector funds soon.
The rest of the funds headed for Greece will be raised from financial markets, Regling said. The fund also will continue to support ongoing rescue programs in Portugal and Ireland.
“We will from now on go frequently to the market. And next week alone we may go three times to issue short-term bills, to issue five-year bonds and possibly also issue 25- or 30-year bonds,” Regling said. “Given these amounts, the EFSF will be in the market from now on a very regular basis.”
To contact the reporters on this story: Rebecca Christie in Brussels at rchristie4@bloomberg.net ; Marcus Bensasson in Brussels at mbensasson@bloomberg.net "
===
Steven Morris CA (SA)
Mobie : 083 943 1858
Fax: 086 671 2498
E-Mail: steven@global.co.za
"March 13 (Bloomberg) -- Euro-area finance ministers signed off on a second Greek bailout, clearing the way for the first payment from the 130 billion-euro package ($170 billion) to be made this month.
“The new Greek program is not only in its starting blocks, but has been politically adopted tonight by the euro group,” Luxembourg Prime Minister Jean-Claude Juncker, who heads the group of 17 finance ministers, said in Brussels late yesterday. Euro finance officials will give a formal approval on March 14, a day before the International Monetary Fund board votes on its contribution.
Greece is now in line to receive more than 100 billion euros in the next three years from the European Financial Stability Facility, the euro region’s temporary rescue fund, starting with payments of 5.9 billion euros in March, 3.3 billion euros in April and 5.3 billion euros in May, EFSF Chief Executive Officer Klaus Regling said.
The agreement caps months of grueling negotiations between Greece, the IMF and euro-area authorities over the successor to an initial 2010 bailout that failed to halt the debt crisis. To win new the aid package, Greece had to sign on to deep budget cuts and complete the world’s largest-ever sovereign debt restructuring.
‘Fundamental Obligations’
“The situation has changed for Greece today and this will have an effect on the economic life of the country,” Greek Finance Minister Evangelos Venizelos told reporters. Greece has “fundamental obligations” and must continue to implement its austerity program, he said, adding that elections in Greece won’t interrupt the pace of budget measures.
The debt swap wipes more than 100 billion euros off Greece’s books and includes the use of collective action clauses to compel investor participation. Euro finance ministers agreed on March 9 that Greece had met the terms for bailout funding and released 35.5 billion euros in payments and interest to bondholders.
As a result of the swap, Greece’s debt is on track to fall to 117 percent of gross domestic product by 2020, creating a buffer as the country strives to meet its commitments, Juncker said. Greece’s future in the euro area is assured “whatever will happen,” he said.
Bank Recapitalization
The Greek rescue package means that the EFSF will be looking to financial markets more frequently as well as issuing bonds directly on a “non-cash” basis, Regling said. Last week, the fund issued 66 billion euros in bonds and bills without tapping the markets, comprised of 35 billion euros in European Central Bank collateral enhancements and 31 billion euros in accrued interest and debt swap sweeteners.
Going forward, the fund expects to disburse 48 billion euros on a non-cash basis for Greece’s bank recapitalization efforts. Venizelos said he expects his nation to receive a 25 billion-euro first tranche of bank-sector funds soon.
The rest of the funds headed for Greece will be raised from financial markets, Regling said. The fund also will continue to support ongoing rescue programs in Portugal and Ireland.
“We will from now on go frequently to the market. And next week alone we may go three times to issue short-term bills, to issue five-year bonds and possibly also issue 25- or 30-year bonds,” Regling said. “Given these amounts, the EFSF will be in the market from now on a very regular basis.”
To contact the reporters on this story: Rebecca Christie in Brussels at rchristie4@bloomberg.net ; Marcus Bensasson in Brussels at mbensasson@bloomberg.net "
===
Steven Morris CA (SA)
Mobie : 083 943 1858
Fax: 086 671 2498
E-Mail: steven@global.co.za
Asian Stocks Climb, Yen Weakens Before U.S. Data, Fed Meeting
I feel Uncertain times, when we going up I feel is not always good !!.
Hope to be proved wrong !
"March 13 (Bloomberg) -- Asian stocks climbed, erasing yesterday’s losses, and the yen fell against all of its major peers before data forecast to show improving U.S. retail sales. New Zealand’s dollar rose as house and food prices increased.
The MSCI Asia Pacific Index rallied 0.8 percent as of 11:12 a.m. in Tokyo, climbing for the third time in four days. Futures on the Standard & Poor’s 500 Index added 0.2 percent. The yen weakened 0.2 percent to 108.44 per euro and New Zealand’s dollar appreciated 0.4 percent to 82.16 U.S. cents. Oil traded near the lowest level in a week in New York.
U.S. retail sales rose 1.1 percent in February, the most in five months, according to economists surveyed by Bloomberg, reducing the likelihood the Federal Reserve will add to stimulus measures today. The Bank of Japan is also forecast to keep policy unchanged today. European Union Economic and Monetary Affairs Commissioner Olli Rehn said he was confident EU leaders would reach an agreement on increasing the size of its crisis- fighting funds this month.
“We’re starting to feel more confident and it’s going to be a good year, particularly in equities,” Kirk West, Sydney- based executive director of international investments at Principal Global Investors, manager of about $215 billion in assets, said in a Bloomberg TV interview. “‘In the U.S., it’s all about jobs. Jobs growth has continued and will ultimately lead to further consumption and that’s a virtuous cycle.”
About three shares advanced for every one that fell on MSCI’s Asian gauge. Japan’s Nikkei 225 Stock Average added 0.9 percent, Australia’s S&P/ASX 200 Index was up 1.1 percent and South Korea’s Kospi gained 1.1 percent. A measure of financial companies posted the biggest increase among the MSCI index’s 10 industry groups, with National Australia Bank Ltd. rising 1.5 percent to A$23.695.
Greek Deal
“It seems like the Greek bond deal is going through; that issue is off the table, at least for the time being,” said Stephen Halmarick, Sydney-based head of investment markets research at Colonial First State Global Asset Management, which oversees about $150 billion. “I wouldn’t expect much out of the BOJ, and obviously people will wait and see what the Fed says.”
The EU’s Rehn said yesterday that the European Commission was ready to prepare a proposal on strengthening the so-called firewall against the debt crisis. While leaders had made “quite good progress” in taming the situation, the need remained for the EU to complete its crisis response plans, Rehn said in Brussels after a meeting of finance ministers.
Futures signal the S&P 500 may advance in U.S. trading today, after closing little changed yesterday. Treasury 10-year yields were little changed at 2.04 percent amid easing speculation the Fed will hint at additional asset purchases.
Fed, BOJ
The dollar was up 0.2 percent to $1.3180 per euro and traded at 82.32 yen, near a 10-month high. In Japan, 12 of 14 economists surveyed by Bloomberg expect the BOJ to leave its asset-purchase program unchanged and keep the benchmark interest rate at a range of zero to 0.1 percent.
The so-called kiwi dollar halted two days of losses after the Real Estate Institute of New Zealand Inc.’s index of house prices rose 0.8 percent to 3,280.5 last month, according to an e-mailed statement released today. Separately, the statistics bureau said February food prices increased 0.6 percent from the previous month.
Oil traded at $106.87 a barrel in New York before a U.S. government report tomorrow that may show crude stockpiles are at the highest level in six months. Prices are “high” because of international political tension and should be lower, oil ministers from Oman, the United Arab Emirates and Angola said at a conference in Kuwait yesterday.
To contact the reporter on this story: Shiyin Chen in Singapore at schen37@bloomberg.net
===
Steven Morris CA (SA)
Mobie : 083 943 1858
Fax: 086 671 2498
E-Mail: steven@global.co.za
Hope to be proved wrong !
"March 13 (Bloomberg) -- Asian stocks climbed, erasing yesterday’s losses, and the yen fell against all of its major peers before data forecast to show improving U.S. retail sales. New Zealand’s dollar rose as house and food prices increased.
The MSCI Asia Pacific Index rallied 0.8 percent as of 11:12 a.m. in Tokyo, climbing for the third time in four days. Futures on the Standard & Poor’s 500 Index added 0.2 percent. The yen weakened 0.2 percent to 108.44 per euro and New Zealand’s dollar appreciated 0.4 percent to 82.16 U.S. cents. Oil traded near the lowest level in a week in New York.
U.S. retail sales rose 1.1 percent in February, the most in five months, according to economists surveyed by Bloomberg, reducing the likelihood the Federal Reserve will add to stimulus measures today. The Bank of Japan is also forecast to keep policy unchanged today. European Union Economic and Monetary Affairs Commissioner Olli Rehn said he was confident EU leaders would reach an agreement on increasing the size of its crisis- fighting funds this month.
“We’re starting to feel more confident and it’s going to be a good year, particularly in equities,” Kirk West, Sydney- based executive director of international investments at Principal Global Investors, manager of about $215 billion in assets, said in a Bloomberg TV interview. “‘In the U.S., it’s all about jobs. Jobs growth has continued and will ultimately lead to further consumption and that’s a virtuous cycle.”
About three shares advanced for every one that fell on MSCI’s Asian gauge. Japan’s Nikkei 225 Stock Average added 0.9 percent, Australia’s S&P/ASX 200 Index was up 1.1 percent and South Korea’s Kospi gained 1.1 percent. A measure of financial companies posted the biggest increase among the MSCI index’s 10 industry groups, with National Australia Bank Ltd. rising 1.5 percent to A$23.695.
Greek Deal
“It seems like the Greek bond deal is going through; that issue is off the table, at least for the time being,” said Stephen Halmarick, Sydney-based head of investment markets research at Colonial First State Global Asset Management, which oversees about $150 billion. “I wouldn’t expect much out of the BOJ, and obviously people will wait and see what the Fed says.”
The EU’s Rehn said yesterday that the European Commission was ready to prepare a proposal on strengthening the so-called firewall against the debt crisis. While leaders had made “quite good progress” in taming the situation, the need remained for the EU to complete its crisis response plans, Rehn said in Brussels after a meeting of finance ministers.
Futures signal the S&P 500 may advance in U.S. trading today, after closing little changed yesterday. Treasury 10-year yields were little changed at 2.04 percent amid easing speculation the Fed will hint at additional asset purchases.
Fed, BOJ
The dollar was up 0.2 percent to $1.3180 per euro and traded at 82.32 yen, near a 10-month high. In Japan, 12 of 14 economists surveyed by Bloomberg expect the BOJ to leave its asset-purchase program unchanged and keep the benchmark interest rate at a range of zero to 0.1 percent.
The so-called kiwi dollar halted two days of losses after the Real Estate Institute of New Zealand Inc.’s index of house prices rose 0.8 percent to 3,280.5 last month, according to an e-mailed statement released today. Separately, the statistics bureau said February food prices increased 0.6 percent from the previous month.
Oil traded at $106.87 a barrel in New York before a U.S. government report tomorrow that may show crude stockpiles are at the highest level in six months. Prices are “high” because of international political tension and should be lower, oil ministers from Oman, the United Arab Emirates and Angola said at a conference in Kuwait yesterday.
To contact the reporter on this story: Shiyin Chen in Singapore at schen37@bloomberg.net
===
Steven Morris CA (SA)
Mobie : 083 943 1858
Fax: 086 671 2498
E-Mail: steven@global.co.za
Monday, 12 March 2012
Europe's Lender of Last Resort !!
The origin of central banking dates back to the establishment of the Swedish Riksbank and the Bank of England in the seventeenth century.
These institutions were created with the purpose of providing currency and funding their respective governments’ debts and hence central banks earned the title of “lenders of last resort”. Tasked with this function, central banks were able to stabilize the real economy during events such as extreme weather, banking runs, wars and other panic driven situations. In the aftermath of the financial crisis of 2008, central banks around the world returned to their roots and provided funding to their governments via the unconventional policy known as quantitative easing.
Established by virtue of the Maastricht Treaty, the European Central Bank (ECB) is prohibited from large-scale financing of European sovereign debt. A hallmark of the Bundesbank, this restriction disarmed the ECB in their response to the euro-zone sovereign debt crisis that threatened to destabilize the European monetary union. As an alternative to direct quantitative easing, where a central bank drives government bond yields lower by purchasing bonds from banks, the ECB engaged in their own unconventional monetary policy measure known as Long Term Refinancing Operations (LTRO).
Under the LTRO programme, European banks were provided with the opportunity to obtain three year financing from the ECB at 1% against a wide array of collateral. The perceived outcome was that banks would force government bond yields lower by buying the sovereign bonds at yields in excess of 7% and pledging these bonds as collateral in the LTRO programme to obtain funding at 1%. In turn the liquidity available to the banking sector would reduce the funding pressures faced by the banks themselves.
In two iterations of the LTRO, in December 2011 and February 2012, European banks borrowed a total of around € 1 trillion. While much of this amount was used to retire other debt obligations and will not reach the real economy, the dramatic fall in Italian bond yields since the introduction of the LTRO served as a buttress for the ECB’s latest crisis fighting measure. Key to understanding the impact of the LTRO is that such measures act only to alleviate funding problems arising from liquidity constraints and not solvency constraints.
The increased liquidity in the European banking sector has contributed to the flow of funds into South Africa, with around R 17 billion of foreign money finding a home in the local bond market this year. The positive sentiment generated by the LTRO is also clearly reflected in the local currency with the rand strengthening by around 90 cents against both the US dollar and the euro since the launch of the first three year LTRO.
Ultimately, while the LTRO cannot be viewed as a panacea for the problems faced by the euro-zone, the provision of liquidity has bought time for Europe to solve the underlying issues of productivity, competitiveness and solvency by reducing the probability of tail-risk events such as bank failures triggered by a credit crunch.
REF : Ruen Naidu PSG
"The PSG Angle is an electronic newsletter of PSG Asset Management. To subscribe or read more, please go to to www.psgam.co.za".
These institutions were created with the purpose of providing currency and funding their respective governments’ debts and hence central banks earned the title of “lenders of last resort”. Tasked with this function, central banks were able to stabilize the real economy during events such as extreme weather, banking runs, wars and other panic driven situations. In the aftermath of the financial crisis of 2008, central banks around the world returned to their roots and provided funding to their governments via the unconventional policy known as quantitative easing.
Established by virtue of the Maastricht Treaty, the European Central Bank (ECB) is prohibited from large-scale financing of European sovereign debt. A hallmark of the Bundesbank, this restriction disarmed the ECB in their response to the euro-zone sovereign debt crisis that threatened to destabilize the European monetary union. As an alternative to direct quantitative easing, where a central bank drives government bond yields lower by purchasing bonds from banks, the ECB engaged in their own unconventional monetary policy measure known as Long Term Refinancing Operations (LTRO).
Under the LTRO programme, European banks were provided with the opportunity to obtain three year financing from the ECB at 1% against a wide array of collateral. The perceived outcome was that banks would force government bond yields lower by buying the sovereign bonds at yields in excess of 7% and pledging these bonds as collateral in the LTRO programme to obtain funding at 1%. In turn the liquidity available to the banking sector would reduce the funding pressures faced by the banks themselves.
In two iterations of the LTRO, in December 2011 and February 2012, European banks borrowed a total of around € 1 trillion. While much of this amount was used to retire other debt obligations and will not reach the real economy, the dramatic fall in Italian bond yields since the introduction of the LTRO served as a buttress for the ECB’s latest crisis fighting measure. Key to understanding the impact of the LTRO is that such measures act only to alleviate funding problems arising from liquidity constraints and not solvency constraints.
The increased liquidity in the European banking sector has contributed to the flow of funds into South Africa, with around R 17 billion of foreign money finding a home in the local bond market this year. The positive sentiment generated by the LTRO is also clearly reflected in the local currency with the rand strengthening by around 90 cents against both the US dollar and the euro since the launch of the first three year LTRO.
Ultimately, while the LTRO cannot be viewed as a panacea for the problems faced by the euro-zone, the provision of liquidity has bought time for Europe to solve the underlying issues of productivity, competitiveness and solvency by reducing the probability of tail-risk events such as bank failures triggered by a credit crunch.
REF : Ruen Naidu PSG
"The PSG Angle is an electronic newsletter of PSG Asset Management. To subscribe or read more, please go to to www.psgam.co.za".
Japan Stocks Climb on Machinery Orders as Oil, Kiwi Fall
REF: Bloomberg
"March 12 (Bloomberg) -- Asian stocks fell for the first time in three days and commodities and the yuan declined after Chinese exports grew at a slower pace than forecast. The yen rose against all its major counterparts and Japan’s shares climbed after better-than-estimated data on machinery orders.
The MSCI Asia Pacific Index dropped 0.3 percent as of 1:19 p.m. in Tokyo. Standard & Poor’s 500 Index futures slipped 0.3 percent, while the Nikkei 225 Stock Average gained 0.4 percent. The yuan dropped after China’s central bank weakened its daily fixing for the currency by the most since August 2010. The yen gained 0.3 percent versus the dollar. The S&P GSCI gauge of 24 commodities slid 0.3 percent, led by natural gas and cotton.
China reported the biggest trade deficit in at least 22 years on March 10, adding to data last week on factory output and retail sales that signaled slowing economic growth. The global economy may maintain low growth as oil prices remain “disturbingly high,” South Korea’s Finance Minister Bahk Jae Wan said today. India’s central bank unexpectedly cut on March 9 the amount of deposits lenders need to set aside as reserves to ease a cash squeeze in the banking system.
“All the economic data point to a slowing trend,” said Wu Kan, a Shanghai-based fund manager at Dazhong Insurance Co., which oversees $285 million. “Investors are expecting the government to loosen monetary policy, though whether the government moves fast enough to satisfy those expectations remains to be seen.”
Reserve-Ratio Cut
The BSE India Sensitive Index rallied 1.5 percent. The central bank reduced the cash reserve ratio to 4.75 percent from 5.5 percent on March 9, the lowest since 2004 and the first such action outside a policy meeting since July 2010. Australia’s S&P/ASX 200 Index slipped 0.3 percent and South Korea’s Kospi Index lost 0.6 percent.
The MSCI Asia-Pacific gauge slid 1 percent last week, ending a record run of 11 weekly advances. The valuation for the equity benchmark reached 15 times estimated earnings in February, the highest level in almost two years, according to data compiled by Bloomberg.
The Hang Seng China Enterprises Index declined 0.3 percent and the Shanghai Composite Index fell 0.4 percent. Chinese Premier Wen Jiabao will close an annual gathering of the legislature this week. The nation cut its 2012 economic growth target to 7.5 percent on March 5, down from 8 percent over the past seven years.
China Exports
Exports from China rose 18.4 percent last month from a year earlier, while imports gained 39.6 percent. Analysts forecast a 31.1 percent increase in overseas sales and that inbound shipments would rise 31.8 percent, based on estimates from Bloomberg News surveys.
China Railway Group Ltd., the country’s biggest builder of train lines, tumbled 5.4 percent in Hong Kong. A 300-meter section of an unopened high-speed railway collapsed in central China’s Hubei province following heavy rains, Xinhua News said, citing local authorities.
The yuan lost 0.21 percent to 6.3242 per dollar for the biggest drop since January. The daily reference rate was set 0.33 percent lower at 6.3282 per dollar. The currency can move 0.5 percent either side of the fixing.
Hitachi Construction Machinery Co. gained 1.4 percent and Fanuc Corp., which makes industrial robots, rose 0.5 percent in Tokyo. Japan’s machinery orders rose 3.4 percent in January, beating forecasts for 2.3 percent increase, according to a report from the Cabinet Office.
Oil, Cotton
Brent oil for April settlement slid 0.5 percent to $125.36 a barrel on the London-based ICE Futures Europe exchange. Hedge funds reduced bullish bets on oil for the first time in five weeks as concern about a conflict with Iran decreased. Large speculators cut wagers on rising prices by 7.3 percent in the week ended March 6, according to the Commodity Futures Trading Commission.
“The data from China is a downside pressure on the oil market, said Ken Hasegawa, a commodity-derivative sales manager at Newedge Group in Tokyo. ‘‘The trade deficit is much bigger than expected.’’
Cotton futures dropped as much as 0.9 percent to 88.01 cents a pound in New York. India, the world’s second-biggest cotton producer, scrapped a one-week-old ban on exports of the fiber after protests from growers, traders and China, the nation’s largest customer.
The cost of insuring bonds against non-payment in Asia rose, according to credit-default swap traders. The Markit iTraxx Asia index of 40 investment-grade borrowers outside Japan increased 2 basis points to 159 basis points, Barclays Plc prices show. The measure is headed for its highest close since March 7, according to data provider CMA. Ten-year Treasury yields were little changed at 2.02 percent. "
To contact the reporters on this story: Lynn Thomasson in Hong Kong at lthomasson@bloomberg.net ; Jacob Adelman in Tokyo at jadelman1@bloomberg.net
===
Steven Morris CA (SA)
Mobie : 083 943 1858
Fax: 086 671 2498
E-Mail: steven@global.co.za
"March 12 (Bloomberg) -- Asian stocks fell for the first time in three days and commodities and the yuan declined after Chinese exports grew at a slower pace than forecast. The yen rose against all its major counterparts and Japan’s shares climbed after better-than-estimated data on machinery orders.
The MSCI Asia Pacific Index dropped 0.3 percent as of 1:19 p.m. in Tokyo. Standard & Poor’s 500 Index futures slipped 0.3 percent, while the Nikkei 225 Stock Average gained 0.4 percent. The yuan dropped after China’s central bank weakened its daily fixing for the currency by the most since August 2010. The yen gained 0.3 percent versus the dollar. The S&P GSCI gauge of 24 commodities slid 0.3 percent, led by natural gas and cotton.
China reported the biggest trade deficit in at least 22 years on March 10, adding to data last week on factory output and retail sales that signaled slowing economic growth. The global economy may maintain low growth as oil prices remain “disturbingly high,” South Korea’s Finance Minister Bahk Jae Wan said today. India’s central bank unexpectedly cut on March 9 the amount of deposits lenders need to set aside as reserves to ease a cash squeeze in the banking system.
“All the economic data point to a slowing trend,” said Wu Kan, a Shanghai-based fund manager at Dazhong Insurance Co., which oversees $285 million. “Investors are expecting the government to loosen monetary policy, though whether the government moves fast enough to satisfy those expectations remains to be seen.”
Reserve-Ratio Cut
The BSE India Sensitive Index rallied 1.5 percent. The central bank reduced the cash reserve ratio to 4.75 percent from 5.5 percent on March 9, the lowest since 2004 and the first such action outside a policy meeting since July 2010. Australia’s S&P/ASX 200 Index slipped 0.3 percent and South Korea’s Kospi Index lost 0.6 percent.
The MSCI Asia-Pacific gauge slid 1 percent last week, ending a record run of 11 weekly advances. The valuation for the equity benchmark reached 15 times estimated earnings in February, the highest level in almost two years, according to data compiled by Bloomberg.
The Hang Seng China Enterprises Index declined 0.3 percent and the Shanghai Composite Index fell 0.4 percent. Chinese Premier Wen Jiabao will close an annual gathering of the legislature this week. The nation cut its 2012 economic growth target to 7.5 percent on March 5, down from 8 percent over the past seven years.
China Exports
Exports from China rose 18.4 percent last month from a year earlier, while imports gained 39.6 percent. Analysts forecast a 31.1 percent increase in overseas sales and that inbound shipments would rise 31.8 percent, based on estimates from Bloomberg News surveys.
China Railway Group Ltd., the country’s biggest builder of train lines, tumbled 5.4 percent in Hong Kong. A 300-meter section of an unopened high-speed railway collapsed in central China’s Hubei province following heavy rains, Xinhua News said, citing local authorities.
The yuan lost 0.21 percent to 6.3242 per dollar for the biggest drop since January. The daily reference rate was set 0.33 percent lower at 6.3282 per dollar. The currency can move 0.5 percent either side of the fixing.
Hitachi Construction Machinery Co. gained 1.4 percent and Fanuc Corp., which makes industrial robots, rose 0.5 percent in Tokyo. Japan’s machinery orders rose 3.4 percent in January, beating forecasts for 2.3 percent increase, according to a report from the Cabinet Office.
Oil, Cotton
Brent oil for April settlement slid 0.5 percent to $125.36 a barrel on the London-based ICE Futures Europe exchange. Hedge funds reduced bullish bets on oil for the first time in five weeks as concern about a conflict with Iran decreased. Large speculators cut wagers on rising prices by 7.3 percent in the week ended March 6, according to the Commodity Futures Trading Commission.
“The data from China is a downside pressure on the oil market, said Ken Hasegawa, a commodity-derivative sales manager at Newedge Group in Tokyo. ‘‘The trade deficit is much bigger than expected.’’
Cotton futures dropped as much as 0.9 percent to 88.01 cents a pound in New York. India, the world’s second-biggest cotton producer, scrapped a one-week-old ban on exports of the fiber after protests from growers, traders and China, the nation’s largest customer.
The cost of insuring bonds against non-payment in Asia rose, according to credit-default swap traders. The Markit iTraxx Asia index of 40 investment-grade borrowers outside Japan increased 2 basis points to 159 basis points, Barclays Plc prices show. The measure is headed for its highest close since March 7, according to data provider CMA. Ten-year Treasury yields were little changed at 2.02 percent. "
To contact the reporters on this story: Lynn Thomasson in Hong Kong at lthomasson@bloomberg.net ; Jacob Adelman in Tokyo at jadelman1@bloomberg.net
===
Steven Morris CA (SA)
Mobie : 083 943 1858
Fax: 086 671 2498
E-Mail: steven@global.co.za
Onward & Upward for Glencore
Glencore Said to Express an Interest in Canada’s Viterra
Via Bloomberg on line !!
Onward and upward for Glencore !!
"March 12 (Bloomberg) -- Glencore International Plc, the world’s largest listed commodities trader, has expressed an interest in Canada’s biggest grain-handler Viterra Inc., according to a person familiar with the situation.
Other companies may also be studying Viterra, said the person, who declined to be identified because the details haven’t been made public. Closely held grain distributor Cargill Inc. has expressed an interest, the Wall Street Journal reported, citing people it didn’t identify. Viterra have gained 24 percent since it said last week it had received approaches, giving it a market value of C$5 billion ($5 billion).
Glencore Chief Executive Officer Ivan Glasenberg is looking to expand his North American grain business even as he pursues a 27.7 billion-pound ($43.4 billion) takeover of Swiss metals and coal producer Xstrata Plc. U.S. agricultural trading companies Bunge Ltd. and Archer Daniels Midland Co. may make approaches for Viterra, according to Aston Hill Financial Inc.
“A bidding war for Viterra could emerge and a large price will need to be paid,” Belinda Moore, a Brisbane-based analyst with RBS Morgans Ltd., said today in a report.
Holly Gibney, a spokeswoman for Regina, Saskatchewan-based Viterra, declined to comment and referred back to the company’s March 9 statement in which Viterra said it had received expressions of interest from third parties. A spokesman for Baar, Switzerland-based Glencore declined to comment when contacted by Bloomberg News. Lisa Clemens, a spokeswoman for Cargill declined to comment. Glencore’s interest in Viterra was reported earlier by The Sunday Telegraph.
Wheat Monopoly
Buying Viterra would give Glencore the largest share of the Canadian grain-handling market just as the Canadian Wheat Board’s monopoly over wheat and barley grown in the west of the country comes to an end. Viterra’s share of Canadian grain- handling may rise to almost 50 percent in the next few years from 45 percent, its Chief Executive Officer Mayo Schmidt said in an interview on March 8.
The Canadian government passed a law in December that will end the monopoly and give farmers the choice to sell to other buyers as of Aug. 1. Viterra said in January it expects to increase grain volumes and earnings after the board’s control of supplies ends. Glencore is also among companies interested in closely held grain handler Gavilon Group LLC, people familiar with the matter said March 6.
“Investors would be pleased to see they’re not missing opportunities despite the larger merger,” London-based Fairfax IS analyst John Meyer said yesterday in a telephone interview. “If Xstrata doesn’t happen, they’re getting on with growing the business anyway.”
Entire Business
Viterra’s Sydney-traded shares jumped 32 percent to A$13.60 at 1:39 p.m. local time. Its Toronto-traded shares closed up 24 percent at C$13.58 on March 9 following the statement about expressions of interest. Glencore’s Hong Kong-traded shares gained 2.1 percent to HK$50.90 at 10:40 a.m. local time.
Canadian agricultural supplier Agrium Inc. could bid, John Hughes, an analyst at Desjardins Securities Inc. in Toronto, said last week in an interview. Cargill as well as Bunge and Archer Daniels Midland may be interested, said Andrew L.B. Hamlin, a money manager at Aston Hill Financial in Toronto, which oversees about C$5.5 billion, including Viterra shares.
“We would question whether Glencore would want the entire business,” RBS Morgan’s Moore said. “Viterra has three business segments - grain handling and marketing, agri-products and processing.”
Agriculture Premiums
North American food and agriculture companies have fetched a 31 percent premium on average in takeovers greater than $1 billion, data compiled by Bloomberg show. Using Viterra’s March 9 closing price, that would imply an offer for C$14.38 a share. Based on the median 10 times multiple of earnings before interest, tax, depreciation and amortization paid in comparable deals, Viterra may command about C$17 a share, the data show.
Buying Viterra might help Glencore’s agricultural business to return to profit after a “difficult year,” said Fairfax’s IS’s Meyer. Moving into storage of wheat and other logistics beyond just trading grains would likely help boost margins, he said.
“We have said at the time of the IPO we would like to increase the scale of our grain business in North America,” Glasenberg said in a March 5 interview, referring to the commodity trader’s $10 billion initial public offering last May. “We will definitely look at opportunities in North America, whether Gavilon or others, we will look at everything that’s available opportunistically.”
Glencore Earnings
Glencore’s 2011 adjusted earnings before interest and tax from its agricultural trading unit swung to an $8 million loss from a $659 million profit a year earlier. The company had a “one-off” cotton-trading loss, Glasenberg said March 5. Adjusted profit from Glencore’s trading of metals and minerals was $1.24 billion last year, while energy trading’s earnings were $697 million.
The Swiss company, Viterra, Bunge and Japan’s Mitsui & Co. are among suitors who have expressed an interest in Omaha, Nebraska-based Gavilon, people familiar with the matter said March 6.
Viterra is based in the same province as Potash Corp. of Saskatchewan Inc., which in 2010 fended off a $40 billion hostile bid from Australia’s BHP Billiton Ltd. The Canadian government blocked BHP’s offer, saying the sale of the world’s largest fertilizer company wouldn’t provide a “net benefit” to the country.
Canada Regulators
Under Canada’s foreign-takeover legislation, known as the Investment Canada Act, foreign acquisitions of companies with assets worth more than C$312 million are reviewed by the federal government to determine whether the transaction is beneficial to the nation.
The federal government should block any foreign takeover of Viterra under that law, Pat Martin, a New Democratic Party lawmaker, said by telephone on March 9.
Richard Walker, a spokesman for Industry Canada, deferred comment to colleagues at Canada’s agriculture ministry. "
To contact the reporters on this story: Jesse Riseborough in London at jriseborough@bloomberg.net ; Matthew Campbell in London at mcampbell39@bloomberg.net
===
Steven Morris CA (SA)
Mobie : 083 943 1858
Fax: 086 671 2498
E-Mail: steven@global.co.za
Via Bloomberg on line !!
Onward and upward for Glencore !!
"March 12 (Bloomberg) -- Glencore International Plc, the world’s largest listed commodities trader, has expressed an interest in Canada’s biggest grain-handler Viterra Inc., according to a person familiar with the situation.
Other companies may also be studying Viterra, said the person, who declined to be identified because the details haven’t been made public. Closely held grain distributor Cargill Inc. has expressed an interest, the Wall Street Journal reported, citing people it didn’t identify. Viterra have gained 24 percent since it said last week it had received approaches, giving it a market value of C$5 billion ($5 billion).
Glencore Chief Executive Officer Ivan Glasenberg is looking to expand his North American grain business even as he pursues a 27.7 billion-pound ($43.4 billion) takeover of Swiss metals and coal producer Xstrata Plc. U.S. agricultural trading companies Bunge Ltd. and Archer Daniels Midland Co. may make approaches for Viterra, according to Aston Hill Financial Inc.
“A bidding war for Viterra could emerge and a large price will need to be paid,” Belinda Moore, a Brisbane-based analyst with RBS Morgans Ltd., said today in a report.
Holly Gibney, a spokeswoman for Regina, Saskatchewan-based Viterra, declined to comment and referred back to the company’s March 9 statement in which Viterra said it had received expressions of interest from third parties. A spokesman for Baar, Switzerland-based Glencore declined to comment when contacted by Bloomberg News. Lisa Clemens, a spokeswoman for Cargill declined to comment. Glencore’s interest in Viterra was reported earlier by The Sunday Telegraph.
Wheat Monopoly
Buying Viterra would give Glencore the largest share of the Canadian grain-handling market just as the Canadian Wheat Board’s monopoly over wheat and barley grown in the west of the country comes to an end. Viterra’s share of Canadian grain- handling may rise to almost 50 percent in the next few years from 45 percent, its Chief Executive Officer Mayo Schmidt said in an interview on March 8.
The Canadian government passed a law in December that will end the monopoly and give farmers the choice to sell to other buyers as of Aug. 1. Viterra said in January it expects to increase grain volumes and earnings after the board’s control of supplies ends. Glencore is also among companies interested in closely held grain handler Gavilon Group LLC, people familiar with the matter said March 6.
“Investors would be pleased to see they’re not missing opportunities despite the larger merger,” London-based Fairfax IS analyst John Meyer said yesterday in a telephone interview. “If Xstrata doesn’t happen, they’re getting on with growing the business anyway.”
Entire Business
Viterra’s Sydney-traded shares jumped 32 percent to A$13.60 at 1:39 p.m. local time. Its Toronto-traded shares closed up 24 percent at C$13.58 on March 9 following the statement about expressions of interest. Glencore’s Hong Kong-traded shares gained 2.1 percent to HK$50.90 at 10:40 a.m. local time.
Canadian agricultural supplier Agrium Inc. could bid, John Hughes, an analyst at Desjardins Securities Inc. in Toronto, said last week in an interview. Cargill as well as Bunge and Archer Daniels Midland may be interested, said Andrew L.B. Hamlin, a money manager at Aston Hill Financial in Toronto, which oversees about C$5.5 billion, including Viterra shares.
“We would question whether Glencore would want the entire business,” RBS Morgan’s Moore said. “Viterra has three business segments - grain handling and marketing, agri-products and processing.”
Agriculture Premiums
North American food and agriculture companies have fetched a 31 percent premium on average in takeovers greater than $1 billion, data compiled by Bloomberg show. Using Viterra’s March 9 closing price, that would imply an offer for C$14.38 a share. Based on the median 10 times multiple of earnings before interest, tax, depreciation and amortization paid in comparable deals, Viterra may command about C$17 a share, the data show.
Buying Viterra might help Glencore’s agricultural business to return to profit after a “difficult year,” said Fairfax’s IS’s Meyer. Moving into storage of wheat and other logistics beyond just trading grains would likely help boost margins, he said.
“We have said at the time of the IPO we would like to increase the scale of our grain business in North America,” Glasenberg said in a March 5 interview, referring to the commodity trader’s $10 billion initial public offering last May. “We will definitely look at opportunities in North America, whether Gavilon or others, we will look at everything that’s available opportunistically.”
Glencore Earnings
Glencore’s 2011 adjusted earnings before interest and tax from its agricultural trading unit swung to an $8 million loss from a $659 million profit a year earlier. The company had a “one-off” cotton-trading loss, Glasenberg said March 5. Adjusted profit from Glencore’s trading of metals and minerals was $1.24 billion last year, while energy trading’s earnings were $697 million.
The Swiss company, Viterra, Bunge and Japan’s Mitsui & Co. are among suitors who have expressed an interest in Omaha, Nebraska-based Gavilon, people familiar with the matter said March 6.
Viterra is based in the same province as Potash Corp. of Saskatchewan Inc., which in 2010 fended off a $40 billion hostile bid from Australia’s BHP Billiton Ltd. The Canadian government blocked BHP’s offer, saying the sale of the world’s largest fertilizer company wouldn’t provide a “net benefit” to the country.
Canada Regulators
Under Canada’s foreign-takeover legislation, known as the Investment Canada Act, foreign acquisitions of companies with assets worth more than C$312 million are reviewed by the federal government to determine whether the transaction is beneficial to the nation.
The federal government should block any foreign takeover of Viterra under that law, Pat Martin, a New Democratic Party lawmaker, said by telephone on March 9.
Richard Walker, a spokesman for Industry Canada, deferred comment to colleagues at Canada’s agriculture ministry. "
To contact the reporters on this story: Jesse Riseborough in London at jriseborough@bloomberg.net ; Matthew Campbell in London at mcampbell39@bloomberg.net
===
Steven Morris CA (SA)
Mobie : 083 943 1858
Fax: 086 671 2498
E-Mail: steven@global.co.za
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