By Elizabeth Stanton
Sept. 22 (Bloomberg) -- The following companies may have unusual price changes in Europe trading. Stock symbols are in parentheses, and share prices are from the previous close.
Europe's Dow Jones Stoxx 600 climbed 8.3 percent to 278.18. The Dow Jones Stoxx 50 Index advanced 9.3 percent to 2,809.38. The Euro Stoxx 50 Index, a benchmark for nations using the euro, gained 8.4 percent to 3,253.52.
Continental AG (CON GY): Michelin & Cie. is interested in buying the tire business of Europe's second-largest car-parts maker if it's put up for sale, WirtschaftsWoche said, citing Michelin Chief Executive Officer Michel Rollier. The shares dropped 2 cents to 71 euros.
Conergy AG (CGY GY): Germany's second-largest solar company plans to sell two units by the end of this year to focus on its sales and project business, Tagesspiegel said, citing company spokesman Alexander Leinhos. The shares advanced 60 cents, or 7.7 percent, to 8.37 euros.
Daimler AG (DAI GY): The world's second-largest maker of luxury cars plans to raises prices for its Mercedes brand truck 3 percent to set off inflation and pass on higher raw material costs, Automobilwoche reported, citing Stefan Buchner, head of procurement at Daimler Trucks and Buses. The shares gained 2.455 euros, or 6.6 percent, to 39.465.
Deutsche Postbank AG (DPB GY): Germany's biggest consumer bank by clients faces warning strikes in seven German cities ahead of a third round of negotiations about pay. The shares rose 1.76 euros, or 5 percent, to 36.76 euros.
Electricite de France SA (EDF FP): Europe's largest power utility, said it is still studying how to build its nuclear business in the U.S. after its partner, Constellation Energy Group Inc., agreed to be bought by MidAmerican Energy Holdings Co. The stock rose 3.65 cents, or 7.72 percent, to 50.83 euros.
Fortis (FORB BB): The financial-services firm that announced plans in June to raise 8.3 billion euros may sell more assets than anticipated as other parts of the capital plan may be more difficult to execute now, Dutch newspaper De Telegraaf said, citing Chief Executive Officer Herman Verwilst. Fortis spokeswoman Marianne Honkoop confirmed his comments. Fortis gained 1.18 euros, or 17 percent, to 8.02 euros.
Irish Life & Permanent Plc (IPM ID): Ireland's biggest mortgage lender dismissed newspaper speculation it's likely to be the next Irish financial institution to receive a takeover offer. The shares rose 1.038 euros, or 20 percent, to 6.138 euros.
Kingfisher Plc (KGF LN): The U.K. home-improvement retailer is considering moving its headquarters out of the country to avoid paying proposed British corporate taxes, the Sunday Telegraph said. The shares rose 13.5 pence, or 10 percent, to 144.9 pence.
MAN AG (MAN GY): Europe's third-largest truckmaker expects orders to rise at its commercial-vehicle unit MAN Nutzfahrzeuge next year, Euro am Sonntag said, citing the division's management board member Karl Viktor Schaller.
Separately, MAN Nutzfahrzeuge expects to sell a record 100,000 trucks this year and plans to raise truck prices to pass on higher raw material costs to customers, Automobilwoche said, citing the unit's Chief Executive Officer Anton Weinmann. The shares climbed 7 euros, or 15 percent, to 53.70.
Manz Automation AG (M5Z GY): The maker of automation systems for solar cells and LCD panels aims to raise its profit margin to 15 percent of sales, from 11.8 percent now, by the end of 2009, WirtschaftsWoche reported, citing Chief Executive Officer Dieter Manz. The shares surged 19.51 euros, or 18 percent, to 125.51.
Natixis SA (KN FP): Chief Executive Officer Dominique Ferrero told Investir that the company's stock price doesn't reflect the value of France's fourth-largest bank. ``The stock doesn't reflect the worth of the bank,'' Ferrero told the French newspaper in an interview. The stock rose 62 cents, or 25.31 percent, to 3.07 euros.
Nestle SA (NESN VX): The world's largest food company said it is ``confident'' its dairy products aren't made from milk tainted with melamine, following a scandal with contaminated milk in China. Hong Kong's two largest supermarket chains pulled Nestle milk products made in China from their shelves. The shares rose 1.24 Swiss francs, or 2.6 percent, to 49.34 francs.
Pernod Ricard SA (RI FP): The distiller's Absolut vodka brand is ``very profitable,'' Chief Executive Officer Patrick Ricard told Le Journal des Finances in an interview. The stock rose 2.925 euros, or 5.2 percent, to 58.815 euros.
Royal Dutch Shell Plc (RDSA LN): Europe's biggest oil producer declared a new suspension of Bonny Light crude exports after militants targeted its installations in Nigeria. The shares rose 89 pence, or 5.6 percent, to 1,684 pence.
Union Fenosa SA (UNF SM): Italian oil company Eni SpA plans to bid for the 50 percent of Union Fenosa Gas it doesn't own, an offer that may exceed 4 billion euros ($5.8 billion), Expansion reported.
Eni executives plan to travel to Spain in the next few days to hold talks with Gas Natural SDG SA (GAS SM), the newspaper said, citing unidentified people. Gas Natural expects its 16.8 billion-euro bid for Fenosa, which owns the other 50 percent of the gas unit, to complete by April, the utility said Sept. 18.
Fenosa added 2.8 percent to 17.21 euros and Gas Natural.
Yell Group Plc (YELL LN): The publisher of the U.K.'s Yellow Pages phone directory is negotiating with banks, including HSBC Holdings Plc, to restructure 3.7 billion pounds ($6.8 billion) in debt, the Sunday Times said. The shares advanced 13 pence, or 17 percent, to 91 pence.
To contact the reporter on this story: Elizabeth Stanton in New York at estanton@bloomberg.net
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Monday, September 22, 2008
Pinfra, Randon, Telmex Internacional: Latin Equity Preview
By William Freebairn
Sept. 22 (Bloomberg) -- The following companies may have unusual price changes today in Latin America trading. Stock symbols are in parentheses, and share prices are from the previous close. Preferred shares are usually the most-traded class of stock in Brazil.
The MSCI Latin America Index rose 10 percent on Sept. 19 to 3,500.27. Markets in Chile were closed Sept. 18 and 19 for holidays.
Brazil
Randon Participacoes SA (RAPT4 BS): Brazil's biggest auto- parts maker may rise after saying last week revenue increased 19 percent in August from a year earlier, Banco Fator Corretora said. Growth is related to investments that have reduced production bottlenecks, analysts Jacqueline Lison and Marcello Gunther wrote in a research note e-mailed Sept. 19. Randon rose 6.3 percent to 12.49 reais.
Colombia
Banco Popular SA (POPULA CB): The Colombian bank will pay a dividend of 84 centavos a share in the first week of every month from October to March, Popular said in a filing with regulators Sept. 19. Popular was unchanged at 260 pesos when it last traded Sept. 17.
Mexico
Promotora y Operadora de Infraestructura SAB (PINFRA* MM): The Mexican construction company and operator of toll highways said it bought 1.7 million of its own shares. Mexico City-based Pinfra did not disclose the price it paid, in an e-mail statement to the Mexican Stock Exchange Sept. 19. Pinfra fell 0.7 percent to 19.80 pesos.
Telmex Internacional SAB (TELINTL MM): The Latin American cable television and long-distance company received a ``buy'' rating in new coverage from analysts at IXE Grupo Financiero and Banif Securities. Changes to Brazilian law may permit Telmex Internacional to take control of cable company Net Servicos de Comunicacao SA, boosting net income by 18 percent, analysts Manuel Jimenez of IXE and Alex Pardellas of Banif wrote in a joint report e-mailed Sept. 19. Telmex Internacional rose 5.4 percent to 6.66 pesos.
To contact the reporter on this story: William Freebairn in Mexico City at wfreebairn@bloomberg.net.
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Sept. 22 (Bloomberg) -- The following companies may have unusual price changes today in Latin America trading. Stock symbols are in parentheses, and share prices are from the previous close. Preferred shares are usually the most-traded class of stock in Brazil.
The MSCI Latin America Index rose 10 percent on Sept. 19 to 3,500.27. Markets in Chile were closed Sept. 18 and 19 for holidays.
Brazil
Randon Participacoes SA (RAPT4 BS): Brazil's biggest auto- parts maker may rise after saying last week revenue increased 19 percent in August from a year earlier, Banco Fator Corretora said. Growth is related to investments that have reduced production bottlenecks, analysts Jacqueline Lison and Marcello Gunther wrote in a research note e-mailed Sept. 19. Randon rose 6.3 percent to 12.49 reais.
Colombia
Banco Popular SA (POPULA CB): The Colombian bank will pay a dividend of 84 centavos a share in the first week of every month from October to March, Popular said in a filing with regulators Sept. 19. Popular was unchanged at 260 pesos when it last traded Sept. 17.
Mexico
Promotora y Operadora de Infraestructura SAB (PINFRA* MM): The Mexican construction company and operator of toll highways said it bought 1.7 million of its own shares. Mexico City-based Pinfra did not disclose the price it paid, in an e-mail statement to the Mexican Stock Exchange Sept. 19. Pinfra fell 0.7 percent to 19.80 pesos.
Telmex Internacional SAB (TELINTL MM): The Latin American cable television and long-distance company received a ``buy'' rating in new coverage from analysts at IXE Grupo Financiero and Banif Securities. Changes to Brazilian law may permit Telmex Internacional to take control of cable company Net Servicos de Comunicacao SA, boosting net income by 18 percent, analysts Manuel Jimenez of IXE and Alex Pardellas of Banif wrote in a joint report e-mailed Sept. 19. Telmex Internacional rose 5.4 percent to 6.66 pesos.
To contact the reporter on this story: William Freebairn in Mexico City at wfreebairn@bloomberg.net.
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Technical Analysis Daily: EUR/USD
| Daily Forex Technicals | Written by iFOREX.bg | Sep 22 08 05:43 GMT | | |
EUR/USD 1.4478EUR/USD Open 1.4459 High 1.4559 Low 1.4163 Close 1.4449 The Euro started climbing significantly on Friday against the US Dollar from Friday's bottom 1.4163 to today's top 1.4559, which are the first support and resistance levels respectively for the currency couple today. If the positive trend continues, as we expect for the moment, next resistance is expected at 1.4620, followed by 1.4700. In downward direction next support for today is expected at 1.4100, the break of which would lead to next target 1.4025. Technical resistance levels: 1.4560 1.4620 1.4700 Trading range: 1.4465 - 1.4530 Trend: Upward Buy at 1.4478 SL 1.4448 TP 1.4518 | |
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The Daily Forecaster: USDJPY
| Daily Forex Technicals | Written by FX-Forecaster | Sep 22 08 05:17 GMT | | |||||||||||||||||||||||||||||||||||||||||||||||
| Price: 106.78
ELLIOTT WAVE COMMENTS19th September: The recovery from the 103.97 low has been impressive and certainly lends more support to the bullish structure. Within this rally I see a small 76.4% projection in minor Wave v at 106.59 and this would likely provide Wave a of Wave iii. A 50% correction will come in around 105.22 but give some leeway around this depending on where the current rally fails. 105.02-22 looks the most likely stalling point. As we go into next week this will imply follow-through in Wave iii in a 138.2% projection at 108.32 and more likely a 176.4% projection at 109.53. In the larger picture this will imply that the 103.53 low was actually the end of an expanded flat correction in Wave (x) and thus there is room for one final ABC pattern higher. The alternative to keep in mind is a sideways consolidation. Normally the most likely stalling area for this was at 106.07. If it has merely extended that leg of the recovery to 106.31 then we could still be seeing a triangle structure. In either bullish or bearish scenarios it will mean a drop through the 105.75 pivot support to the 66.7%-76.4% projection in Wave ^c which should occur around 103.97-104.35 to generate a further consolidation in Waves ^d and ^e.
Ian Copsey Legal disclaimer and risk disclosure The Daily Forecaster is an analytical tool only and is not intended to replace individual research. The service is offered as an opinion on the current state of the market with anticipated trading signals but not recommendations. The information provided in The Daily Forecaster should not be relied on as a substitute for extensive independent research before making your trading/investment decisions. Ian Copsey is merely providing this service for your general information. No representation is being made that any view or opinion will guarantee profits or not result in losses from trading. In addition any projections or views of the market provided may not prove to be accurate. The opinions are subject to change without notice. Opinions or views expressed in The Daily Forecaster are not meant to be either investment advice or a solicitation or recommendation to establish market positions. Ian Copsey will not be responsible for any losses incurred on investments made by readers and clients as a result of any information contained in this service. The information contained is private and may not be distributed or shared. | |||||||||||||||||||||||||||||||||||||||||||||||
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Foreign Exchange Market Commentary
| Daily Forex Technicals | Written by HY Markets | Sep 22 08 04:15 GMT | | |
| EUR/USD closed higher on Friday as it extended last week's rally. The high-range close sets the stage for a steady to higher opening on Monday. Stochastics and the RSI remain bullish signalling that sideways to higher prices are possible near- term. If it extends last week's rally, the reaction high crossing is the next upside target. Closes below the 10-day moving average crossing are needed to confirm that a short-term top has been posted. First resistance is Thursday's high crossing. Second resistance is the reaction high crossing.
USD/JPY closed sharply higher due to profit taking on Friday and above the 10-day moving average crossing signalling that a short-term bottom has likely been posted. A short covering decline tempered early gains and the mid-range close sets the stage for a steady opening on Monday. Stochastics and the RSI are diverging and turning neutral to bullish signalling that a bottom might be in or is near. Closes above the 20-day moving average crossing are needed to confirm that a short-term bottom has been posted. If it extends the decline off August's high, May's low crossing is the next downside target.
GBP/USD closed higher on Friday as it extended this week's rally above the 20-day moving average. The high-range close sets the stage for a steady to higher opening on Monday. Stochastics and the RSI remain bullish signalling that sideways to higher prices are possible near-term. If it extends last week's rally, the 50% retracement level of the July- September decline crossing is the next upside target. Closes below the 10-day moving average crossing would confirm that a short-term top has been posted.
USD/CHF closed lower on Friday due to profit taking as it consolidated some of last week's decline but remains below the 20-day moving average crossing. The low-range close sets the stage for a steady to lower opening on Friday. Stochastics and the RSI remain bearish signalling that sideways to lower prices are possible near-term. If it extends last week's decline, the 50% retracement level of the July-September rally crossing is the next downside target. Closes above the 10-day moving average crossing would confirm that a short-term bottom has been posted.
HY Markets | |
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Asian Market Update
| Daily Forex Fundamentals | Written by Trade The News | Sep 22 08 04:09 GMT | | |
| The end of the traditional investment banking model Fed to increase liquidity support to Goldman, Merrill and Morgan Stanley: The Fed approved Goldman and Morgan Stanley requests to become bank holding companies, a move that ends the traditional investment banking model. 'The move, which will enable the firms to take deposits and buy retail banks more easily in the latest government step to restore calm to chaotic financial markets, puts the last two major U.S. investment banks squarely within the government safety net,' wrote The Guardian newspaper. The latest on Paulson's bailout plan: According to reports, the U.S. treasury widened the scope of bailout plan beyond mortgages, with the revised language referring to 'troubled assets'. There's no sign yet that Congress will delay or derail the $700B proposal, reports the Wall Street Journal. Democrats are looking to add provisions that include increased congressional oversight, additional support for homeowners and changes to bankruptcy laws. 'This is not in any way to deprive [Treasury Secretary Henry Paulson] the opportunity to act. We totally understand the gravity of the moment,' said Senate Banking Committee Chairman and Connecticut Democrat Chris Dodd. But, he added: 'You cannot just turn over $700 billion of taxpayer money and not insist that that taxpayer is going to be protected in this.' In related commentary, U.S. House Rep Pelosi said that they will not hand over a $700B 'blank check'. Presidential candidates Obama and McCain both agree that the bailout plan needs independent oversight. Members of the Bank of Japan board agreed that the outlook for the U.S. is considerably uncertain, minutes from the August meeting has shown. 'Members shared the view that global financial markets remained unstable due mainly to concerns about further losses that U.S. and European financial institutions might incur,' it said. 'Members agreed that there was considerable uncertainty regarding when and how the negative-feedback loop between financial markets, asset prices and economic activity would diminish,' the minutes said. One member said 'the risk that the economy may return onto a growth path later than expected also warranted attention.' Another money market fund downgraded: Moody's downgraded American Beacon Money Market Portfolio to B, following American Beacon's decision last night to temporarily suspend redemptions of shares of the funds entirely in cash on the redemption date. Japan's all industry activity index spikes higher during July: (JP JULY ALL INDUSTRY ACTIVITY INDEX MOM: 0.8% V 0.8% expected, -0.9% prior) The construction index increased 1.3% during July, compared to the previous 1.1% fall. Equities: At 23:58 EDT Japan's Nikkei is +1.68%, the S&P/ASX200 is +4.05%, South Korea's KOSPI is +0.50%, Hong Kong's Hang Seng index is +0.98%, and the Shanghai composite index is +6.38%. The S&P500 futures contract lost -0.71% since the U.S. close, last trading at 1,237.10. Asian equities tracked Wall Street's gains, with some investors taking the view that the U.S. bank bailout plan will stabilize the global banking system. But most indices have retraced early gains, with sidelined investors waiting for more details on the plan. Banks and commodities related companies led most of the upside in Tokyo, while short-covering in financials boosted the S&P/ASX200 index. The Shanghai composite index opened higher by more than 8.00% on a government proposal to make share buybacks easier, but the index failed to break the 2,300 psychological resistance level. Commodities: Nymex crude oil gained +0.29% between 18:00 EDT and 23:58 EDT, last trading at $104.85/bbl. Spot gold gained +0.89%, last trading at $872.40/oz, boosted by a weakening USD. Trade The News Staff Legal disclaimer and risk disclosure All information provided by Trade The News (a product of Trade The News, Inc. "referred to as TTN hereafter") is for informational purposes only. Information provided is not meant as investment advice nor is it a recommendation to Buy or Sell securities. Although information is taken from sources deemed reliable, no guarantees or assurances can be made to the accuracy of any information provided. 1. Information can be inaccurate and/or incomplete 2. Information can be mistakenly re-released or be delayed, 3. Information may be incorrect, misread, misinterpreted or misunderstood 4. Human error is a business risk you are willing to assume 5. Technology can crash or be interrupted without notice 6. Trading decisions are the responsibility of traders, not those providing additional information. Trade The News is not liable (financial and/or non-financial) for any losses that may arise from any information provided by TTN. Trading securities involves a high degree of risk, and financial losses can and do occur on a regular basis and are part of the risk of trading and investing. | |
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Asia Session Recap
| Daily Forex Fundamentals | Written by Forex.com | Sep 22 08 03:30 GMT | | |||||||||
| Asia came in to a bit of relief. After a few weeks of unprecedented moves in the financial markets, markets were relatively tame today albeit still choppy. JPY crosses gapped lower from Friday after bouncing with US equities. Part of the reason was that there is still some uncertainty concerning the details of the bailout package. There was also some interest to sell the USD as EUR/USD finally rallied through 1.4500. The thinking with the USD is that the injection of liquidity into the markets could become inflationary as well as putting the US government’s own financial healthy at risk. Looking forward we have a light economic calendar in London but the market is being driven more by news flow anyway. Other countries are joining the Fed in increasing liquidity and restricting short sales in equity markets. While in the near term this is being viewed as positive, the long term implications could be negative. Could we be planting the seeds for a future disaster? Upcoming Economic Data Releases (London Session):
Forex.com DISCLAIMER: The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase of sale of any currency. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions. | |||||||||
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Australia Central Bank Adds A$2.025 Billion to Financial System
By Garfield Reynolds
Sept. 22 (Bloomberg) -- The Reserve Bank of Australia added A$2.025 billion ($1.7 billion) to the financial system, amid concern credit market jitters may deter banks from lending to each other.
The bank last week added an average of A$2.5 billion a day through so-called repurchase agreements, according the RBA Web site. Banks were holding A$6.90 billion in exchange-settlement accounts at the end of Sept. 19, down from A$6.97 billion on Sept. 18. The RBA injected a daily average of A$993 million in the first seven months of this year.
Australian banks' borrowing costs declined from the highest in six months, according to a gauge that measures the availability of funds in the market.
The difference between the rate banks charge each other for three-month loans and the overnight indexed swap rate stood at 80.5 basis points at 10:14 a.m. in Sydney, down from 92.5 points on Sept. 19, Bloomberg data show. A basis point is 0.01 percentage point.
In repos, central banks typically buy debt securities for a set period, temporarily raising the amount of money available in the banking system.
Repos help maintain enough money in the system to keep overnight interest rates close to the central bank's target. They don't signal a policy shift.
To contact the reporter on this story: Garfield Reynolds in Sydney at greynolds1@bloomberg.net
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U.K. Housing Market `on Its Knees' Amid Crisis, Rightmove Says
By Brian Swint
Sept. 22 (Bloomberg) -- U.K. house prices fell for a fourth month in September as the global credit crisis intensified, locking out homebuyers and forcing the sale of the country's biggest mortgage lender, a report by Rightmove Plc showed.
``The housing market is on its knees and will remain so until financial institutions address the disastrous state of the mortgage funding markets,'' said Miles Shipside, commercial director at Rightmove. ``While this market provides a good opportunity to trade up, it requires a degree of bravery.''
The average asking price for a home fell 1 percent from August to 227,438 pounds ($414,000), Britain's most-used property Web site said today. From a year earlier, prices fell 3.3 percent.
The property market may face further weakness in coming months, provoking a ``painful'' adjustment for many families, Bank of England Chief Economist Spencer Dale said last week. HBOS Plc agreed to a takeover by Lloyds TSB Group Plc after plunging home values and the financial market crisis destroyed the value of the company and added to the threat of a recession.
Prices dropped the most in the East Midlands, where they fell 5.3 percent in the month, and values declined 3.9 percent in the southwest, Rightmove said. In London, house prices rose 4 percent in the month after a 5.3 percent drop in August.
The U.K. economy entered a recession in July, forecasts by the Confederation of British Industry, the country's largest business lobby, show. Growth stalled in the second quarter, ending the longest period of uninterrupted economic expansion in more than a century.
Tax Change
Prime Minister Gordon Brown suspended the tax on home purchases of less than 175,000 pounds this month. Still, the number of new listings per estate agent fell to a record low, Rightmove said.
``The changes in stamp duty are just tinkering at the edge of the system,'' Shipside said. ``At best they will give slightly more choice to first-time buyers.''
Other housing data also show the housing slump has deepened. Home sales plunged to a 30-year record low in August, the Royal Institution of Chartered Surveyors said Sept. 9. Prices fell by the most in a quarter century, HBOS said Sept. 4.
Bank of England policy makers said they are still concerned the fastest inflation in a decade will become embedded in the economy, making them more reluctant to lower interest rates, minutes of this month's meeting showed. They voted 8-1 to keep the rate at 5 percent, with David Blanchflower voting for the biggest reduction since the Sept. 11 attacks and Timothy Besley abandoning a push for higher rates.
To contact the reporter on this story: Brian Swint in London at bswint@bloomberg.net.
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Sept. 22 (Bloomberg) -- U.K. house prices fell for a fourth month in September as the global credit crisis intensified, locking out homebuyers and forcing the sale of the country's biggest mortgage lender, a report by Rightmove Plc showed.
``The housing market is on its knees and will remain so until financial institutions address the disastrous state of the mortgage funding markets,'' said Miles Shipside, commercial director at Rightmove. ``While this market provides a good opportunity to trade up, it requires a degree of bravery.''
The average asking price for a home fell 1 percent from August to 227,438 pounds ($414,000), Britain's most-used property Web site said today. From a year earlier, prices fell 3.3 percent.
The property market may face further weakness in coming months, provoking a ``painful'' adjustment for many families, Bank of England Chief Economist Spencer Dale said last week. HBOS Plc agreed to a takeover by Lloyds TSB Group Plc after plunging home values and the financial market crisis destroyed the value of the company and added to the threat of a recession.
Prices dropped the most in the East Midlands, where they fell 5.3 percent in the month, and values declined 3.9 percent in the southwest, Rightmove said. In London, house prices rose 4 percent in the month after a 5.3 percent drop in August.
The U.K. economy entered a recession in July, forecasts by the Confederation of British Industry, the country's largest business lobby, show. Growth stalled in the second quarter, ending the longest period of uninterrupted economic expansion in more than a century.
Tax Change
Prime Minister Gordon Brown suspended the tax on home purchases of less than 175,000 pounds this month. Still, the number of new listings per estate agent fell to a record low, Rightmove said.
``The changes in stamp duty are just tinkering at the edge of the system,'' Shipside said. ``At best they will give slightly more choice to first-time buyers.''
Other housing data also show the housing slump has deepened. Home sales plunged to a 30-year record low in August, the Royal Institution of Chartered Surveyors said Sept. 9. Prices fell by the most in a quarter century, HBOS said Sept. 4.
Bank of England policy makers said they are still concerned the fastest inflation in a decade will become embedded in the economy, making them more reluctant to lower interest rates, minutes of this month's meeting showed. They voted 8-1 to keep the rate at 5 percent, with David Blanchflower voting for the biggest reduction since the Sept. 11 attacks and Timothy Besley abandoning a push for higher rates.
To contact the reporter on this story: Brian Swint in London at bswint@bloomberg.net.
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New Zealand Debit, Credit Card Spending Rose 1.1%
By Tracy Withers
Sept. 22 (Bloomberg) -- New Zealand consumer spending on debit, credit and store cards rose for a second straight month in August, driven by higher prices for food and purchases of consumer goods.
The value of transactions on electronic cards at retailers increased 1.1 percent from July, Statistics New Zealand said in a statement released in Wellington today. Transactions excluding fuel, workshop and vehicle sales rose 1.7 percent.
Consumer confidence has risen from a record low in June as interest rates fall and workers are about to receive the first round of NZ$10.6 billion ($7 billion) in tax cuts from Oct. 1. A confidence index calculated by Roy Morgan rose to 109.9 in the two weeks ended Sept. 30 from 82 in June.
``This is consistent with the improvement in consumer confidence,'' said Darren Gibbs, chief New Zealand economist at Deutsche Bank AG in Auckland. ``Falling fuel prices have released extra cash that has found its way into consumer goods spending and there are tax cuts ahead.''
Reserve Bank Governor Alan Bollard cut the benchmark interest rate a half a percentage point to 7.5 percent on Sept. 11 following a quarter-point reduction in July. He urged lenders to pass the lower rates on to households and businesses.
Monthly spending figures aren't adjusted for inflation and can be volatile because of price movements. Falling fuel prices curbed the increase in spending in August, the statistics agency said.
To contact the reporter on this story: Tracy Withers in Wellington at twithers@bloomberg.net.
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Sept. 22 (Bloomberg) -- New Zealand consumer spending on debit, credit and store cards rose for a second straight month in August, driven by higher prices for food and purchases of consumer goods.
The value of transactions on electronic cards at retailers increased 1.1 percent from July, Statistics New Zealand said in a statement released in Wellington today. Transactions excluding fuel, workshop and vehicle sales rose 1.7 percent.
Consumer confidence has risen from a record low in June as interest rates fall and workers are about to receive the first round of NZ$10.6 billion ($7 billion) in tax cuts from Oct. 1. A confidence index calculated by Roy Morgan rose to 109.9 in the two weeks ended Sept. 30 from 82 in June.
``This is consistent with the improvement in consumer confidence,'' said Darren Gibbs, chief New Zealand economist at Deutsche Bank AG in Auckland. ``Falling fuel prices have released extra cash that has found its way into consumer goods spending and there are tax cuts ahead.''
Reserve Bank Governor Alan Bollard cut the benchmark interest rate a half a percentage point to 7.5 percent on Sept. 11 following a quarter-point reduction in July. He urged lenders to pass the lower rates on to households and businesses.
Monthly spending figures aren't adjusted for inflation and can be volatile because of price movements. Falling fuel prices curbed the increase in spending in August, the statistics agency said.
To contact the reporter on this story: Tracy Withers in Wellington at twithers@bloomberg.net.
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BOJ Members Said Outlook Is Uncertain, Minutes Show
By Mayumi Otsuma
Sept. 22 (Bloomberg) -- Bank of Japan members said that the outlook for the U.S. economy is uncertain because of falling housing prices and volatility in global financial markets, meeting minutes show.
``Members agreed that there was considerable uncertainty regarding when and how the negative-feedback loop between financial markets, asset prices and economic activity would diminish,'' according to minutes of the August 18-19 meeting released today in Tokyo. Members were referring to the outlook for the U.S. economy.
Exports are losing steam and the nation's expansion is stagnating, the central bank said last week. A global financial crisis spurred by the bankruptcy of Lehman Brothers Holdings Inc. may weaken Japan further, economists say, diminishing hopes the economy would rebound after contracting in the second quarter.
``The Japanese economy is worsening and increasingly approaching the state the bank has presented as a risk scenario,'' Mari Iwashita, chief market economist at Daiwa Securities SMBC in Tokyo. ``Policy makers seem to realize that the timing of the economy's pickup is being delayed.''
A few members said that the slowdown in the economies of Europe and Asia have become more apparent since the previous meeting. One member said that prospects for Japan have ``shifted downward'' since it released its economic outlook in July.
Five-Year Low
The nation's executives are turning pessimistic about their prospects. Sentiment among large manufacturers will probably fall to a five-year low this quarter, economists expect the central bank's Tankan survey to say Oct. 1.
One board member said ``the risk that the economy may return onto a growth path later than expected also warranted attention.''
The world's biggest central banks last week agreed to pump $180 billion into the global financial system to restore confidence after banks hoarded money on concern more will follow Lehman Brothers Holdings Inc. into bankruptcy. The Bank of Japan said it will offer up to $60 billion to local and foreign financial institutions for the first time to help them borrow dollars.
Central banks will continue to discuss measures they can jointly take to ease global market turmoil, Bank of Japan Governor Masaaki Shirakawa told parliament on Sept. 19.
A few members said the bank needs to keep in mind that keeping rates low for too long will hamper sustainable growth should the economy pick up. The central bank last week kept the benchmark key rate unchanged at 0.5 percent, the lowest among major economies.
One member said the bank should ``continually examine whether the level of the policy interest rate was appropriate.''
Regarding market conditions in Japan, a few members said the number of bankruptcies among constructions and real-estate companies have been increasing, making it more difficult for those companies in those sectors to sell bonds.
One member said smaller companies are having difficulty borrowing money and this trend needs to be watched.
To contact the reporter on this story: Mayumi Otsuma in Tokyo at motsuma@bloomberg.net
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Asia Ponders United Socialist States of America: William Pesek
Commentary by William Pesek
Sept. 22 (Bloomberg) -- There's something fitting about Timothy Geithner being on America's financial fire brigade.
First, here's a memo that the U.S. Treasury team, of which the New York Federal Reserve president was a member, might have written a decade ago.
To: Asian Finance Officials From: U.S. Treasury Subject: Worsening Regional Crisis
As economies reel amid instability and as investors flee, it's important that Asian policy makers heed this 10-point plan:
1. Raise interest rates to support currencies; 2. Cut government spending and debt; 3. Don't blame speculators and hedge funds; 4. Let property prices slide. It's a correction, not a crash; 5. Don't save those who made bad decisions. Moral hazard is bad; 6. Increase transparency in the corporate sector; 7. Subsidies of any kind are always and everywhere bad; 8. Get banks to write down bad loans immediately; 9. Avoid blaming the media for your problems; 10. Follow the free-market policies that drive U.S. prosperity.
Now for the message emanating from the U.S. Treasury these days: Disregard all of the above.
``The shifts in strategy are taking a lot of getting used to,'' Marshall Mays, director of Emerging Alpha Advisors and a longtime Asia investor, told me in Manila last week.
Tectonic Shifts
Other financial shifts are looking nothing less than tectonic. Just ask Lee Chol Hwi, chief executive officer of Korea Asset Management Corp. Known as Kamco, the state-run outfit helped liquidate distressed assets in South Korea after the 1997 financial crisis. It's now seeking to buy as much as $900 million of bad loans in the U.S.
Plenty of U.S. companies are lobbying for Korean money. Lehman Brothers Holdings Inc. seeking investment from state-owned Korea Development Bank is but one example. ``So much has changed in the world in the last 10 years,'' Lee says.
Those changes were the buzz last week at an Asian Development Bank conference in Manila. The basic take was that the U.S. is proving better at imposing its prescriptions on developing nations than following them.
One can debate the merits of how the U.S. is handling its financial crisis. Is there still too much Milton Friedman in how the Treasury and Fed are acting? Is a bit too much Karl Marx seeping into the mix? Or are the Marx Brothers in charge? Some investors in Asia and economist Nouriel Roubini joke about how the U.S.A. is morphing into the U.S.S.A.: the United Socialist States of America.
Wall Street Burns
There's some hyperbole here. No one wants to be remembered as the Nero of the U.S., fiddling as Wall Street burns. An expert on the Great Depression, Federal Reserve Chairman Ben Bernanke is taking no chances. Neither is Geithner, who saw first-hand how Asian growth stars such as Indonesia, Korea and Thailand were flattened by denial in the halls of power.
Recent events are disorientating for Asia, a region long told that the free-market gospel preached by the U.S. was the ticket to prosperity.
``Since the Asian crisis, we have learned it takes lots of money and trial and error to stabilize things,'' says Nicholas Kwan, head of Asian research at Standard Chartered Plc in Hong Kong. ``The U.S. is just beginning this process.''
What's the model for Asia now? Europe? Is it China's mix of top-down control of economic trends and market openness? Is it a return to Japanese-style financial management?
Political Woes
These aren't just academic questions for a region that is home to many of the world's fastest-growing economies. One of Asia's biggest problems is that political development hasn't kept pace with the opening of markets.
From instability-prone Thailand to control-freak China to politically paralyzed Japan and malaise-plagued Malaysia (Malaise-ia, anyone?), Asia is littered with governments struggling to grow faster. As the U.S. heads back to the drawing board to restore trust in markets, Asia will need to think more for itself than it has in recent decades.
How far the U.S.'s credibility has fallen can best be seen in the wealth dynamics of Washington and Asian capitals. While savings-rich Asia is setting up sovereign wealth funds to prepare for the future, the U.S. is setting up debt funds to repair the past. The U.S. has spent the 2000s fighting al-Qaeda, while China built world-class cities and airports.
Regulatory Changes
Once the dust settles, economic-policy makers must begin finding a ``more appropriate regulatory environment,'' says Asian Development Bank Managing Director-General Ragat Nag.
Ideas are flying in Washington. U.S. Senate Banking Committee Chairman Christopher Dodd says the Fed can act as an ``effective Resolution Trust Fund'' to buy and dispose of bad debt stemming from the subprime-mortgage crisis.
Financial regulators, attorneys general in New York, Texas and Connecticut, and the three largest U.S. pension funds are cracking down on short sellers after the collapse of Lehman and American International Group Inc.
U.S. officials would have been aghast if Asians did that a decade ago. It's a reminder that in times of crisis, it can be hard to take your own medicine.
(William Pesek is a Bloomberg News columnist. The opinions expressed are his own.)
To contact the writer of this column: William Pesek in Manila at wpesek@bloomberg.net
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Sept. 22 (Bloomberg) -- There's something fitting about Timothy Geithner being on America's financial fire brigade.
First, here's a memo that the U.S. Treasury team, of which the New York Federal Reserve president was a member, might have written a decade ago.
To: Asian Finance Officials From: U.S. Treasury Subject: Worsening Regional Crisis
As economies reel amid instability and as investors flee, it's important that Asian policy makers heed this 10-point plan:
1. Raise interest rates to support currencies; 2. Cut government spending and debt; 3. Don't blame speculators and hedge funds; 4. Let property prices slide. It's a correction, not a crash; 5. Don't save those who made bad decisions. Moral hazard is bad; 6. Increase transparency in the corporate sector; 7. Subsidies of any kind are always and everywhere bad; 8. Get banks to write down bad loans immediately; 9. Avoid blaming the media for your problems; 10. Follow the free-market policies that drive U.S. prosperity.
Now for the message emanating from the U.S. Treasury these days: Disregard all of the above.
``The shifts in strategy are taking a lot of getting used to,'' Marshall Mays, director of Emerging Alpha Advisors and a longtime Asia investor, told me in Manila last week.
Tectonic Shifts
Other financial shifts are looking nothing less than tectonic. Just ask Lee Chol Hwi, chief executive officer of Korea Asset Management Corp. Known as Kamco, the state-run outfit helped liquidate distressed assets in South Korea after the 1997 financial crisis. It's now seeking to buy as much as $900 million of bad loans in the U.S.
Plenty of U.S. companies are lobbying for Korean money. Lehman Brothers Holdings Inc. seeking investment from state-owned Korea Development Bank is but one example. ``So much has changed in the world in the last 10 years,'' Lee says.
Those changes were the buzz last week at an Asian Development Bank conference in Manila. The basic take was that the U.S. is proving better at imposing its prescriptions on developing nations than following them.
One can debate the merits of how the U.S. is handling its financial crisis. Is there still too much Milton Friedman in how the Treasury and Fed are acting? Is a bit too much Karl Marx seeping into the mix? Or are the Marx Brothers in charge? Some investors in Asia and economist Nouriel Roubini joke about how the U.S.A. is morphing into the U.S.S.A.: the United Socialist States of America.
Wall Street Burns
There's some hyperbole here. No one wants to be remembered as the Nero of the U.S., fiddling as Wall Street burns. An expert on the Great Depression, Federal Reserve Chairman Ben Bernanke is taking no chances. Neither is Geithner, who saw first-hand how Asian growth stars such as Indonesia, Korea and Thailand were flattened by denial in the halls of power.
Recent events are disorientating for Asia, a region long told that the free-market gospel preached by the U.S. was the ticket to prosperity.
``Since the Asian crisis, we have learned it takes lots of money and trial and error to stabilize things,'' says Nicholas Kwan, head of Asian research at Standard Chartered Plc in Hong Kong. ``The U.S. is just beginning this process.''
What's the model for Asia now? Europe? Is it China's mix of top-down control of economic trends and market openness? Is it a return to Japanese-style financial management?
Political Woes
These aren't just academic questions for a region that is home to many of the world's fastest-growing economies. One of Asia's biggest problems is that political development hasn't kept pace with the opening of markets.
From instability-prone Thailand to control-freak China to politically paralyzed Japan and malaise-plagued Malaysia (Malaise-ia, anyone?), Asia is littered with governments struggling to grow faster. As the U.S. heads back to the drawing board to restore trust in markets, Asia will need to think more for itself than it has in recent decades.
How far the U.S.'s credibility has fallen can best be seen in the wealth dynamics of Washington and Asian capitals. While savings-rich Asia is setting up sovereign wealth funds to prepare for the future, the U.S. is setting up debt funds to repair the past. The U.S. has spent the 2000s fighting al-Qaeda, while China built world-class cities and airports.
Regulatory Changes
Once the dust settles, economic-policy makers must begin finding a ``more appropriate regulatory environment,'' says Asian Development Bank Managing Director-General Ragat Nag.
Ideas are flying in Washington. U.S. Senate Banking Committee Chairman Christopher Dodd says the Fed can act as an ``effective Resolution Trust Fund'' to buy and dispose of bad debt stemming from the subprime-mortgage crisis.
Financial regulators, attorneys general in New York, Texas and Connecticut, and the three largest U.S. pension funds are cracking down on short sellers after the collapse of Lehman and American International Group Inc.
U.S. officials would have been aghast if Asians did that a decade ago. It's a reminder that in times of crisis, it can be hard to take your own medicine.
(William Pesek is a Bloomberg News columnist. The opinions expressed are his own.)
To contact the writer of this column: William Pesek in Manila at wpesek@bloomberg.net
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Australia Keeps Record Commodity Sales Forecast Little Changed
By Madelene Pearson
Sept. 22 (Bloomberg) -- Australia, the world's largest shipper of coal, iron ore and wool, kept its forecast for record earnings from commodity exports little changed driven by continued demand from China for steelmaking ingredients.
Sales may rise to A$214 billion ($178 billion) in the 12 months ending June 30, 2009, the Canberra-based Australian Bureau of Agricultural and Resource Economics said today in an e-mailed statement. That compares with its June forecast of A$212 billion and revised sales of A$149 billion a year earlier.
Prices for iron ore and coal, Australia's top two export earners, rose to a record this year, helping boost profits for producers including BHP Billiton Ltd. and Rio Tinto Group. Global demand for resources is still ``very, very robust,'' BHP Chief Executive Officer Marius Kloppers said last week.
``Earnings from iron ore, coal, oil and liquefied natural gas are forecast to account for almost 98 percent of the growth in total energy and mineral export earnings,'' the bureau's executive director Phillip Glyde said in the statement. ``The short-term prospects for energy and mineral commodities remain positive, supported by continued demand growth and supply-side constraints.''
Australia's exports of minerals and metals are forecast at about A$90 billion, 25 percent higher than a year earlier, while earnings from energy commodities are forecast to jump 98 percent from a year earlier to A$90 billion, the bureau said.
To contact the reporter on this story: Madelene Pearson in Melbourne on mpearson1@bloomberg.net
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Sept. 22 (Bloomberg) -- Australia, the world's largest shipper of coal, iron ore and wool, kept its forecast for record earnings from commodity exports little changed driven by continued demand from China for steelmaking ingredients.
Sales may rise to A$214 billion ($178 billion) in the 12 months ending June 30, 2009, the Canberra-based Australian Bureau of Agricultural and Resource Economics said today in an e-mailed statement. That compares with its June forecast of A$212 billion and revised sales of A$149 billion a year earlier.
Prices for iron ore and coal, Australia's top two export earners, rose to a record this year, helping boost profits for producers including BHP Billiton Ltd. and Rio Tinto Group. Global demand for resources is still ``very, very robust,'' BHP Chief Executive Officer Marius Kloppers said last week.
``Earnings from iron ore, coal, oil and liquefied natural gas are forecast to account for almost 98 percent of the growth in total energy and mineral export earnings,'' the bureau's executive director Phillip Glyde said in the statement. ``The short-term prospects for energy and mineral commodities remain positive, supported by continued demand growth and supply-side constraints.''
Australia's exports of minerals and metals are forecast at about A$90 billion, 25 percent higher than a year earlier, while earnings from energy commodities are forecast to jump 98 percent from a year earlier to A$90 billion, the bureau said.
To contact the reporter on this story: Madelene Pearson in Melbourne on mpearson1@bloomberg.net
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Nippon Oil Cuts Fuel Output Further on Weak Demand
By Michio Nakayama and Shigeru Sato
Sept. 22 (Bloomberg) -- Nippon Oil Corp., Japan's largest refiner, said it is making further cuts to output of gasoline and other petroleum products this month because of weaker demand.
Nippon Oil will cut crude oil processing 10 percent from a year earlier to 3.22 million kiloliters, or about 675,130 barrels a day, a spokesman said under condition of anonymity because of company policy. Previously, the Tokyo-based refiner said it planned to cut output by 3 percent.
Prices of gasoline at the pump climbed to record levels and slashed demand for the automotive fuel by the most in five years in August. Sales of the fuel plunged about 10 percent last month from a year earlier, according to the Petroleum Association of Japan.
Gasoline demand typically reaches its annual peak in August in Japan, and the fuel is the main contributor to refiners' profits during the summer season.
To contact the reporters on this story: Shigeru Sato in Tokyo at ssato10@bloomberg.net; Michio Nakayama in Tokyo at mnakayama$@bloomberg.net.
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Yen, Taiwan Dollar, Malaysian Ringgit: Asia Currency Preview
By Bob Chen
Sept. 22 (Bloomberg) -- The following events and economic reports may influence trading in Asian currencies today.
Exchange rates are from the previous session.
Japanese yen: The Bank of Japan will release minutes from its Aug. 18-19 meeting at 8:50 a.m. in Tokyo.
Chief Cabinet Secretary Nobutaka Machimura will hold briefings at 11 a.m. and 4 p.m.
The ruling Liberal Democratic Party will vote at 2 p.m. to decide the next prime minister.
Vice Finance Minister Kazuyuki Sugimoto is scheduled to give a press conference at 5 p.m.
The yen was at 106.85 a dollar at 8:02 a.m. in Sydney.
Hong Kong dollar: Prices of consumer goods rose 5.9 percent in August from a year earlier, economists said in a Bloomberg News survey before the government reports the data at 4:30 p.m. today. Inflation accelerated to 6.3 percent in July, matching the fastest pace in more than a decade.
The government will report second-quarter balance of payments at the same time.
The Hong Kong dollar was at 7.7833.
Taiwan dollar: The unemployment rate was unchanged at 3.91 percent in August from the previous month, economists said in a Bloomberg survey before the National Statistics Office reports the data at 4 p.m. local time.
The Taiwan dollar was at NT$32.158.
Malaysian ringgit: Inflation quickened to 8.4 percent in August, holding near July's 27-year high of 8.5 percent, according to a Bloomberg survey before a statistics department report due on Sept. 24. Bank Negara will report Malaysia's foreign reserves as of Sept. 15 at 5 p.m. today in Kuala Lumpur. The reserves were at $122.58 billion on Aug. 29.
The ringgit was at 3.4527.
To contact the reporter on this story: Bob Chen in Hong Kong at bchen45@bloomberg.net.
Read more...
Sept. 22 (Bloomberg) -- The following events and economic reports may influence trading in Asian currencies today.
Exchange rates are from the previous session.
Japanese yen: The Bank of Japan will release minutes from its Aug. 18-19 meeting at 8:50 a.m. in Tokyo.
Chief Cabinet Secretary Nobutaka Machimura will hold briefings at 11 a.m. and 4 p.m.
The ruling Liberal Democratic Party will vote at 2 p.m. to decide the next prime minister.
Vice Finance Minister Kazuyuki Sugimoto is scheduled to give a press conference at 5 p.m.
The yen was at 106.85 a dollar at 8:02 a.m. in Sydney.
Hong Kong dollar: Prices of consumer goods rose 5.9 percent in August from a year earlier, economists said in a Bloomberg News survey before the government reports the data at 4:30 p.m. today. Inflation accelerated to 6.3 percent in July, matching the fastest pace in more than a decade.
The government will report second-quarter balance of payments at the same time.
The Hong Kong dollar was at 7.7833.
Taiwan dollar: The unemployment rate was unchanged at 3.91 percent in August from the previous month, economists said in a Bloomberg survey before the National Statistics Office reports the data at 4 p.m. local time.
The Taiwan dollar was at NT$32.158.
Malaysian ringgit: Inflation quickened to 8.4 percent in August, holding near July's 27-year high of 8.5 percent, according to a Bloomberg survey before a statistics department report due on Sept. 24. Bank Negara will report Malaysia's foreign reserves as of Sept. 15 at 5 p.m. today in Kuala Lumpur. The reserves were at $122.58 billion on Aug. 29.
The ringgit was at 3.4527.
To contact the reporter on this story: Bob Chen in Hong Kong at bchen45@bloomberg.net.
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South Korean Store Sales Rise By Most in Three Years
By Seyoon Kim
Sept. 22 (Bloomberg) -- South Korea's department store sales increased at the fastest pace in almost three years in August as outlets lowered prices to attract shoppers.
Sales at the three biggest chains rose 14 percent from a year earlier, more than double July's 5.9 percent gain, the Ministry of Knowledge Economy said in Gwacheon today. Last month's increase was the biggest since December 2005.
Retailers including Lotte Shopping Co. held discount sales in August to woo customers, while shoppers also bought more televisions and sporting goods during the Beijing Olympics. Confidence among consumers rebounded last month from an eight- year low thanks to a drop in oil prices.
``Stores are holding more promotional events to get consumers to open their wallets,'' said Lee Sang Jae, an economist at Hyundai Securities Co. in Seoul. ``But it's still premature to say consumer spending has recovered as concerns about economic growth slowing and financial markets linger.''
Sales of sports goods climbed 12.7 percent in August from a year earlier, today's report showed. Sales of luxury goods at department stores jumped 38.7 percent.
``The jump in sales of luxury goods show there's a bipolarization of income and spending,'' Hyundai's Lee said. ``People with higher income seem to be less affected by what's going on in the economy.''
Economic Growth
The pickup in spending may be temporary as renewed turmoil on global financial markets shakes confidence. The Kospi stock index has dropped 23 percent this year and the currency has slumped 22 percent against the dollar.
Asia's fourth-largest economy expanded 4.8 percent last quarter, the weakest pace in more than a year, as spiraling living costs prompted consumers to cut spending.
Shares in Lotte Shopping, the nation's largest department store operator, have fallen 31 percent in 2008, and those in Hyundai Department Store Co., the second biggest, have dropped 26 percent.
Sales at discount stores rose 1.1 percent last month from a year earlier, moderating from a 2.1 percent gain in July, today's report showed.
To contact the reporter on this story: Seyoon Kim in Seoul at skim7@bloomberg.net
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Australia, New Zealand Dollars Reach 2-Week Highs on U.S. Plan
By Tracy Withers
Sept. 22 (Bloomberg) -- The Australian and New Zealand dollars rose to the highest in more than two weeks amid speculation the cost of a U.S. plan to ease credit-market losses will boost debt in the world's biggest economy.
The currencies extended gains after stocks rallied worldwide as the rescue plan boosted demand for higher-yielding assets funded with loans in Japan. Treasury Secretary Henry Paulson's plan, which includes spending $700 billion on soured mortgage-related assets, will increase U.S. debt, analysts said.
``The plan would be financed out of government debt and this triggered heavy selling of the U.S. dollar,'' said Danica Hampton, currency strategist at Bank of New Zealand Ltd. in Wellington. ``A recovery in risk appetite and the generally weaker U.S. dollar will provide some support for the New Zealand currency.''
New Zealand's dollar rose to 69.06 U.S. cents at 9:12 a.m. in Wellington, the highest since Sept. 2, from 68.90 cents in late New York trading on Sept. 19. The currency fell to 73.76 yen from 74.04 yen.
Australia's currency traded at 83.72 U.S. cents, the highest since Sept. 4, up from 83.40 cents on Sept. 19. It declined 0.1 percent to 89.48 yen.
The Standard & Poor's 500 index rose 4 percent on Sept. 19 after the government announced its plan to purge banks of bad assets and curb bets on share declines.
``News of the bailout triggered a strong recovery in global equity markets, which underpinned risk appetite and demand for currencies like the New Zealand dollar,'' said Hampton.
The New Zealand dollar surged 1.8 percent against the U.S. dollar and 3.8 percent against the yen on Sept. 19. The Australian currency jumped 5.6 percent against the yen and 3.7 percent versus the greenback.
New Zealand's benchmark interest rates is 7.5 percent and Australia's stand at 7 percent, compared with 0.5 percent in Japan and 2 percent in the U.S., making the nations' assets favorites with investors seeking higher returns.
To contact the reporter on this story: Tracy Withers in Wellington at twithers@bloomberg.net.
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Sept. 22 (Bloomberg) -- The Australian and New Zealand dollars rose to the highest in more than two weeks amid speculation the cost of a U.S. plan to ease credit-market losses will boost debt in the world's biggest economy.
The currencies extended gains after stocks rallied worldwide as the rescue plan boosted demand for higher-yielding assets funded with loans in Japan. Treasury Secretary Henry Paulson's plan, which includes spending $700 billion on soured mortgage-related assets, will increase U.S. debt, analysts said.
``The plan would be financed out of government debt and this triggered heavy selling of the U.S. dollar,'' said Danica Hampton, currency strategist at Bank of New Zealand Ltd. in Wellington. ``A recovery in risk appetite and the generally weaker U.S. dollar will provide some support for the New Zealand currency.''
New Zealand's dollar rose to 69.06 U.S. cents at 9:12 a.m. in Wellington, the highest since Sept. 2, from 68.90 cents in late New York trading on Sept. 19. The currency fell to 73.76 yen from 74.04 yen.
Australia's currency traded at 83.72 U.S. cents, the highest since Sept. 4, up from 83.40 cents on Sept. 19. It declined 0.1 percent to 89.48 yen.
The Standard & Poor's 500 index rose 4 percent on Sept. 19 after the government announced its plan to purge banks of bad assets and curb bets on share declines.
``News of the bailout triggered a strong recovery in global equity markets, which underpinned risk appetite and demand for currencies like the New Zealand dollar,'' said Hampton.
The New Zealand dollar surged 1.8 percent against the U.S. dollar and 3.8 percent against the yen on Sept. 19. The Australian currency jumped 5.6 percent against the yen and 3.7 percent versus the greenback.
New Zealand's benchmark interest rates is 7.5 percent and Australia's stand at 7 percent, compared with 0.5 percent in Japan and 2 percent in the U.S., making the nations' assets favorites with investors seeking higher returns.
To contact the reporter on this story: Tracy Withers in Wellington at twithers@bloomberg.net.
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Dollar May Get `Crushed' as Traders Weigh Up Bailout
By Bo Nielsen and Anchalee Worrachate
Sept. 22 (Bloomberg) -- Treasury Secretary Henry Paulson's plan to end the rout in U.S. financial markets may derail the dollar's three-month rally as investors weigh the costs of the rescue.
The combination of spending $700 billion on soured mortgage-related assets and providing $400 billion to guarantee money-market mutual funds will boost U.S. borrowing as much as $1 trillion, according to Barclays Capital interest-rate strategist Michael Pond in New York. While the rescue may restore investor confidence to battered financial markets, traders will again focus on the twin budget and current-account deficits and negative real U.S. interest rates.
``As we get to the other side of this, the dollar will get crushed,'' said John Taylor, chairman of New York-based International Foreign Exchange Concepts Inc., the world's biggest currency hedge-fund firm, which manages about $15 billion.
The dollar fell against 14 of the world's most-traded currencies on Sept. 19, including the euro, as Paulson unveiled the plan, while the Standard & Poor's 500 Index rose 4 percent. The plan may end the rally that began in June and drove the U.S. currency up 10 percent versus the euro, 2 percent against the yen and almost 13 percent compared with Brazil's real, strategists said.
Paulson's plan, sent to Congress Sept. 20, would mark an unprecedented government intrusion into markets and increase the nation's debt ceiling by 6.6 percent to $11.315 trillion. Officials may also start a $400 billion Federal Deposit Insurance Corp. pool to insure investors in money-market funds.
Dollar `Downdraft'
``The downdraft on the dollar from the hit to the balance sheet of the U.S. government will dwarf the short-term gains from solving the banking crisis,'' said David Woo, London-based global head of foreign-exchange strategy at Barclays, the third- biggest currency trader, according to a 2008 survey by Euromoney Institutional Investor Plc.
Paulson and Federal Reserve Chairman Ben S. Bernanke began plotting the rescue last week after New York-based Lehman Brothers Holdings Inc. filed for bankruptcy, the government seized control of American International Group Inc. and Merrill Lynch & Co. was forced into the arms of Charlotte, North Carolina-based Bank of America Corp.
Morgan Stanley dropped as much as 44 percent Sept. 17, the biggest one-day decline in its history, and Goldman Sachs Group Inc., where Paulson was chief executive officer from 1998 to 2006, lost 26 percent. Both are based in New York.
The dollar fell 0.2 percent to $1.4498 per euro as of 8:25 a.m. in Tokyo, after dropping 1.7 percent in the week to Sept. 19. It slid 0.8 percent to 106.61 yen, extending last week's 0.5 percent decline.
Dollar Hegemony
In the four days following Lehman's bankruptcy, the ICE future exchange's Dollar Index, which measures the currency's performance against the U.S.'s six biggest trading partners, dropped 1.2 percent. It fell 0.2 percent today, leaving it 1.1 percent higher this year.
``After years of doubting the hegemonic status of the dollar, this proves it's still there,'' said Stephen Jen, London-based head of research at Morgan Stanley. ``But of course this situation is definitely not stable. The capital leaving the emerging markets is only going into the dollar and that's a powerful force. It's a very uncomfortable balance.''
By the end of the year, the euro will weaken to $1.43 and the yen will trade at 108 to the dollar, according to analyst surveys by Bloomberg. The dollar will depreciate to 1.65 against the real, compared with 1.83 on Sept. 19.
Growth, Deficits
Although the dollar may suffer short-term, at least one analyst says the U.S. government's planned rescue will strengthen the currency before long. Paulson's proposals will return foreign-exchange markets to the trend of the past months, according to Adam Boyton, senior currency strategist at Frankfurt-based Deutsche Bank AG, the world's biggest currency- trading bank. Since the end of June, the Dollar Index has gained 7.2 percent.
``It's a positive plan that's ultimately good for the dollar,'' said New York-based Boyton. ``It reduces risk and volatility and gets the focus back on macroeconomic fundamentals, which suggest weakness throughout the rest of the globe next year, with returning strength in the U.S.''
The U.S. economy may expand 1.5 percent next year, according to the median estimate of 80 analysts surveyed by Bloomberg. That compares with 1.1 percent for the euro-region and 1.15 percent for Japan, the world's second-largest economy.
`Huge New Supply'
The rescue comes as the U.S. budget deficit and the current-account balance, the broadest measure of trade, grow. The Congressional Budget Office projects the spending shortfall will increase to $438 billion next year from $407 billion. The current account deficit is up from $167.24 billion in December.
``Investors may start to worry about the amount of debt the U.S. is taking on and its impact on the dollar,'' said Geoffrey Yu, a currency strategist in London at UBS AG, the second- largest foreign-exchange trader. ``The fact that they mentioned taxpayer money implies that they're going to issue debt. If there's going to be a huge new supply of Treasuries, this will be dollar negative. It's too much for the dollar to take.''
Traders are also concerned the bank bailout will spread to other U.S. industries suffering from the credit crunch that's holding back an economy growing at its slowest pace since 2001. Detroit-based General Motors Corp., the world's biggest automaker, said last week it will tap the remaining $3.5 billion of a $4.5 billion credit line to pay for restructuring costs.
`Damaged' Currencies
Lower interest rates may also weigh on the dollar. Futures on the Chicago Board of Trade show there's a 38 percent chance policy makers will lower their target rate for overnight lending between banks to at least 1.75 percent by January from 2 percent currently. A month ago, they showed a 46 percent chance of an increase to 2.25 percent.
Rates in the U.S. are already the lowest of any the Group of 10 industrialized nations except Japan, where they are 0.5 percent. The European Central Bank's benchmark is 4.25 percent.
Another drawback for the dollar is that the Fed's key rate is 3.4 percentage points less than the rate of inflation, the most since 1980, so investors lose money by investing in short- term U.S. fixed-income assets.
``People thought that the Fed was done cutting,'' said Andrew Balls, an executive vice president and member of the investment committee of Newport, California-based Pacific Investment Management Co., which oversees almost $830 billion. ``In the longer term the diversification away from the dollar will remain intact. The U.S. hasn't done itself any favors in making its assets attractive to foreign investors.''
Brazil, Australia
The biggest beneficiaries may be Brazil's real and Australia's dollar, as demand for higher-yielding assets rebounds, according to Goldman Sachs. The two currencies, the biggest losers versus the dollar since July, may rebound 7.7 percent and 4.6 percent, respectively, the next two weeks, Goldman Sachs forecasts.
``The currencies that have been damaged the most have the best growth,'' said Jens Nordvig, a strategist with Goldman Sachs in New York. ``You're going to see a lot of flows back into these currencies now.''
To contact the reporters on this story: Bo Nielsen in Copenhagen at bnielsen4@bloomberg.net; Anchalee Worrachate in London at aworrachate@bloomberg.net
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Dollar Falls on Speculation U.S. Bailout Plan to Increase Debt
By Stanley White
Sept. 22 (Bloomberg) -- The dollar fell for the first day in three against the yen on speculation a U.S. government plan to buy soured mortgage-related assets from banks will widen the country's budget deficit.
The dollar traded near a two-week low against the euro on speculation the combination of spending $700 billion on mortgage securities and $400 billion to guarantee money-market funds may rattle investors' confidence in the U.S.'s ability to repay debt.
``Problems with the U.S. deficit will haunt the dollar,'' said Masanobu Ishikawa, general manager of foreign exchange at Tokyo Forex & Ueda Harlow Ltd., Japan's largest currency broker. ``This is a reason for the dollar to go lower. Spending such a large amount on this rescue package will remind traders that the fiscal health of the U.S. is set to worsen.''
The dollar fell to 106.99 yen as of 7:48 a.m. in Tokyo, from 107.45 in New York late on Sept. 19. The U.S. currency traded at to $1.4456 per euro, near a two-week low of $1.4541 reached on Sept. 18. The euro bought 154.70 yen from 155.46 yen. The dollar may decline to 106.30 yen today, Ishikawa said.
Treasury Secretary Henry Paulson's plan, sent to Congress Sept. 20, would mark an unprecedented government intrusion into markets and increase the nation's debt ceiling by 6.6 percent to $11.315 trillion. Officials may also start a $400 billion Federal Deposit Insurance Corp. pool to insure investors in money-market funds.
Crushed
``As we get to the other side of this, the dollar will get crushed,'' said John Taylor, chairman of New York-based International Foreign Exchange Concepts Inc., the world's biggest currency hedge-fund firm, which manages about $15 billion.
The dollar fell against 14 of the world's most-traded currencies, including the euro, on Sept. 19 as Paulson unveiled the plan, which also sparked a 4 percent jump in the Standard & Poor's 500 Index. The plan may end the dollar rally that began in June and drove the U.S. currency up 10 percent versus the euro, 2 percent against the yen and almost 13 percent compared with Brazil's real, strategists said.
Paulson and Federal Reserve Chairman Ben S. Bernanke began plotting the rescue last week after New York-based Lehman Brothers Holdings Inc. filed for bankruptcy, the government seized control of American International Group Inc. and Merrill Lynch & Co. was forced into the arms Charlotte, North Carolina- based Bank of America Corp.
Morgan Stanley dropped as much as 44 percent Sept. 17, the biggest one-day decline in its history, and Goldman Sachs Group Inc., where Paulson was chief executive officer from 1998 to 2006, lost 26 percent. Both are based in New York.
``The downdraft on the dollar from the hit to the balance sheet of the U.S. government will dwarf the short-term gains from solving the banking crisis,'' said David Woo, London-based global head of foreign-exchange strategy at Barclays, the third- biggest currency trader, according to a 2008 survey by Euromoney Institutional Investor Plc.
To contact the reporter on this story: Stanley White in Tokyo at swhite28@bloomberg.net
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Crude Oil Falls After Nigerian Militants Call End to Attacks
By Gavin Evans
Sept. 22 (Bloomberg) -- Crude oil fell for the first time in four days as Nigerian militants stopped attacks on oil facilities and investors awaited the U.S. government's proposed $700 billion rescue package for the finance industry.
The rally in oil, up 15 percent the past three days, stalled as the Movement for the Emancipation of the Niger Delta, known as MEND, ended attacks that cut production by 280,000 barrels a day the past week. U.S. lawmakers are pledging fast consideration of the Treasury's plan to buy devalued mortgage- related securities from investment firms to keep the financial system from stalling.
``Up until the weekend, MEND had been talking about an `oil war','' said David Moore, commodity strategist at Commonwealth Bank of Australia Ltd. in Sydney. ``Anything that is able to provide some stability for the financial system and shore up the economic outlook is a supporting factor.''
Crude oil for October delivery fell as much as $1.20, or 1.2 percent, to $103.35 a barrel in after-hours electronic trading on the New York Mercantile Exchange. It was at $103.63 at 9:50 a.m. in Sydney. The contract, which expires at the close of trading today, jumped as much as 7.4 percent on Sept. 19 as investors bought oil to cancel out earlier bets on falling prices.
The more widely held November contract traded at $102.40 a barrel, down 0.3 percent. It gained 5.3 percent on Sept. 19, leaving it at a $1.80-a-barrel discount to October oil, the biggest margin between the two leading contracts for six months.
Hurricane, Sentiment
October's premium over the November contract also reflects the ``very tight'' physical market in the U.S. after Hurricane Ike cut production and shut some gulf refineries, Commonwealth's Moore said. Day-to-day shifts in investor sentiment have also been ``extreme,'' he said.
Oil fell more than $10 a barrel early last week as the bankruptcy of Lehman Brothers Holdings Inc. shocked world equity markets. Prices gained 3.3 percent over the five trading days, the first weekly increase since August, as the dollar slumped on the prospect of the biggest U.S. financial bailout since the Great Depression.
The U.S. dollar fell to $1.4495 against the euro in early Asian trading today. The currency dropped 1.7 percent last week, its biggest decline since March 28, to $1.4466 per euro in late New York trading on Sept. 19.
While the U.S. rescue package has put pressure on the dollar, it's too early to say how much more weakness may be to come, and how that will flow into commodity markets, Moore said.
A lot will depend on the timing of asset purchases and the prices paid, and on the level of underlying economic activity, he said.
``We're in the very early days of understanding the package,'' Moore said. Investors are continuing to ``fine-tune'' their perceptions of it and what it will mean for the U.S. economy, he said.
Brent crude oil for November settlement rose $4.42, or 4.6 percent, to $99.61 a barrel on London's ICE Futures Europe exchange on Sept. 19.
To contact the reporter on this story: Gavin Evans in Wellington at gavinevans@bloomberg.net
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Asia Commodities Day Ahead: Financial Distress May Boost Gold
Sept. 22 (Bloomberg) -- A drop in global equities may be a boon for precious metals and a curse for industrial materials, a Deutsche Bank AG report said. Brazil's biosafety committee approved genetically engineered corn and cotton seeds produced by Monsanto Co. Soybeans, corn and wheat rose. Hexion Specialty Chemicals Inc. agreed to sell epoxy-resin assets in Germany and the U.S. to resolve antitrust concerns raised by its pending acquisition of Huntsman Corp. Gold fell, and copper climbed.
COMMODITIES INVESTMENT
Financial Distress May Help Gold, Hurt Copper, Deutsche Says
A drop in global equities may be a boon for precious metals and a curse for industrial materials while physical demand rather than financial distress will drive agriculture prices, according to a Deutsche Bank AG report.
AGRICULTURAL COMMODITIES
Monsanto, Syngenta Seeds Approved by Brazilian Biosafety Panel
Brazil's biosafety committee approved genetically engineered corn and cotton seeds produced by Monsanto Co. and modified corn made by Syngenta AG, the first endorsements needed before farmers may grow the crops.
Soybeans, Corn Rebound as Bank Bailout Boosts Stocks, Optimism
Soybeans rose the most in four weeks and corn gained, following crude oil and global equities higher, as government plans to resolve the credit crisis revived prospects for improved worldwide demand. Soybeans gained 27.5 cents, or 2.5 percent, to $11.435 a bushel in Chicago. Corn advanced 15 cents, or 2.8 percent, to $5.4225 a bushel.
Wheat Futures Gain on U.S. Government Plan to Shore Up Economy
Wheat rose on speculation investors moved money into commodities from Treasuries after the U.S. government announced a plan aimed at shoring up the economy. Wheat gained 25.25 cents, or 3.6 percent, to $7.18 a bushel in Chicago.
Cattle Rise as Bank Bailout Plan Boosts Markets; Hogs Gain
Cattle rose the most in a week after a U.S. plan to end the credit crisis triggered a rally in global equity markets, reviving optimism that commodity demand will improve. Cattle gained 1.525 cents, or 1.5 percent, to $1.0325 a pound in Chicago. Feeder cattle gained 1.475 cents, or 1.4 percent, to $1.053 a pound. Hogs rose 1 cent, or 1.5 percent, to 66.05 cents a pound.
CHEMICALS
Hexion to Sell Assets to Spolchemie If Huntsman Merger Closes
Hexion Specialty Chemicals Inc. agreed to sell epoxy-resin assets in Germany and the U.S. to Spolchemie to resolve antitrust concerns raised by the pending acquisition of Huntsman Corp.
PRECIOUS METALS, GEMS
Gold Futures Drop as Equities Surge on U.S. Bank, Credit Plans
Gold futures dropped the most in a week as equities worldwide surged on the U.S. government's plan to ease the credit crunch and curb bets against financial stocks. Gold fell $32.30, or 3.6 percent, to $864.70 an ounce in New York.
Platinum Rises in New York on Plan to End Credit-Market Freeze
Platinum rose on speculation that demand will climb after the Bush administration proposed a plan to resolve the credit crisis and American and U.K. regulators limited investor betting on share declines. Platinum gained $9.40, or 0.8 percent, to $1,147 an ounce in New York. Palladium climbed $2.50, or 1 percent, to $236.95 an ounce.
INDUSTRIAL METALS, MINING
Sinosteel Wins Approval to Buy Stake in Australia's Murchison
Sinosteel Corp., China's second-biggest iron-ore trading company, won Australian government approval to buy as much as 49.9 percent of Murchison Metals Ltd.
Copper Gains as Bank Plan Boosts Shares, Eases Growth Concerns
Copper jumped the most in a month as U.S. government plans to resolve the credit crisis sparked rallies in global equity markets and eased economic concerns. Copper rose 11.05 cents, or 3.6 percent, to $3.1765 a pound in New York.
SOFT COMMODITIES
Cotton Rises as Dollar Falls, Confidence Surges on Credit Plan
Cotton rose the most in three months as the dollar weakened and the U.S. government's plan to resolve the credit-market crisis boosted confidence that demand for commodities will improve. Cotton climbed 1.76 cents, or 2.9 percent, to 62.52 cents a pound in New York.
Coffee Rises Most in Two Weeks as Brazilian Real Strengthens
Coffee rose the most in two weeks in New York on speculation a jump in the Brazilian real will boost the price of supplies from the country and reduce exports. Arabica coffee gained 2.65 cents, or 2 percent, to $1.331 a pound in New York. Robusta coffee climbed $37, or 1.8 percent, to $2,129 a metric ton in London.
Sugar Gains as Commodities, Equities Jump on U.S. Debt Plan
Sugar rose in New York as a U.S. government plan to end the worst credit crisis since the 1930s sent global equities higher, boosting commodity prices. Raw sugar gained 0.18 cent, or 1.3 percent, to 13.64 cents a pound in New York.
Cocoa Rises as Commodities, Equities Rally on U.S. Credit Plan
Cocoa rose for a second straight day as agricultural and energy commodities rallied in tandem with soaring global stocks on a Bush administration plan to halt the credit-market meltdown. Cocoa climbed $34, or 1.3 percent, to $2,690 a metric ton in New York.
Orange Juice Falls a Second Straight Week as Storm Threats Ease
Orange juice fell, dropping for a second week, as concern eased that storms may harm citrus groves in Florida, the biggest orange producer after Brazil. Orange juice slipped 0.4 cent, or 0.4 percent, to 89.90 cents a pound in New York.
Read more...
COMMODITIES INVESTMENT
Financial Distress May Help Gold, Hurt Copper, Deutsche Says
A drop in global equities may be a boon for precious metals and a curse for industrial materials while physical demand rather than financial distress will drive agriculture prices, according to a Deutsche Bank AG report.
AGRICULTURAL COMMODITIES
Monsanto, Syngenta Seeds Approved by Brazilian Biosafety Panel
Brazil's biosafety committee approved genetically engineered corn and cotton seeds produced by Monsanto Co. and modified corn made by Syngenta AG, the first endorsements needed before farmers may grow the crops.
Soybeans, Corn Rebound as Bank Bailout Boosts Stocks, Optimism
Soybeans rose the most in four weeks and corn gained, following crude oil and global equities higher, as government plans to resolve the credit crisis revived prospects for improved worldwide demand. Soybeans gained 27.5 cents, or 2.5 percent, to $11.435 a bushel in Chicago. Corn advanced 15 cents, or 2.8 percent, to $5.4225 a bushel.
Wheat Futures Gain on U.S. Government Plan to Shore Up Economy
Wheat rose on speculation investors moved money into commodities from Treasuries after the U.S. government announced a plan aimed at shoring up the economy. Wheat gained 25.25 cents, or 3.6 percent, to $7.18 a bushel in Chicago.
Cattle Rise as Bank Bailout Plan Boosts Markets; Hogs Gain
Cattle rose the most in a week after a U.S. plan to end the credit crisis triggered a rally in global equity markets, reviving optimism that commodity demand will improve. Cattle gained 1.525 cents, or 1.5 percent, to $1.0325 a pound in Chicago. Feeder cattle gained 1.475 cents, or 1.4 percent, to $1.053 a pound. Hogs rose 1 cent, or 1.5 percent, to 66.05 cents a pound.
CHEMICALS
Hexion to Sell Assets to Spolchemie If Huntsman Merger Closes
Hexion Specialty Chemicals Inc. agreed to sell epoxy-resin assets in Germany and the U.S. to Spolchemie to resolve antitrust concerns raised by the pending acquisition of Huntsman Corp.
PRECIOUS METALS, GEMS
Gold Futures Drop as Equities Surge on U.S. Bank, Credit Plans
Gold futures dropped the most in a week as equities worldwide surged on the U.S. government's plan to ease the credit crunch and curb bets against financial stocks. Gold fell $32.30, or 3.6 percent, to $864.70 an ounce in New York.
Platinum Rises in New York on Plan to End Credit-Market Freeze
Platinum rose on speculation that demand will climb after the Bush administration proposed a plan to resolve the credit crisis and American and U.K. regulators limited investor betting on share declines. Platinum gained $9.40, or 0.8 percent, to $1,147 an ounce in New York. Palladium climbed $2.50, or 1 percent, to $236.95 an ounce.
INDUSTRIAL METALS, MINING
Sinosteel Wins Approval to Buy Stake in Australia's Murchison
Sinosteel Corp., China's second-biggest iron-ore trading company, won Australian government approval to buy as much as 49.9 percent of Murchison Metals Ltd.
Copper Gains as Bank Plan Boosts Shares, Eases Growth Concerns
Copper jumped the most in a month as U.S. government plans to resolve the credit crisis sparked rallies in global equity markets and eased economic concerns. Copper rose 11.05 cents, or 3.6 percent, to $3.1765 a pound in New York.
SOFT COMMODITIES
Cotton Rises as Dollar Falls, Confidence Surges on Credit Plan
Cotton rose the most in three months as the dollar weakened and the U.S. government's plan to resolve the credit-market crisis boosted confidence that demand for commodities will improve. Cotton climbed 1.76 cents, or 2.9 percent, to 62.52 cents a pound in New York.
Coffee Rises Most in Two Weeks as Brazilian Real Strengthens
Coffee rose the most in two weeks in New York on speculation a jump in the Brazilian real will boost the price of supplies from the country and reduce exports. Arabica coffee gained 2.65 cents, or 2 percent, to $1.331 a pound in New York. Robusta coffee climbed $37, or 1.8 percent, to $2,129 a metric ton in London.
Sugar Gains as Commodities, Equities Jump on U.S. Debt Plan
Sugar rose in New York as a U.S. government plan to end the worst credit crisis since the 1930s sent global equities higher, boosting commodity prices. Raw sugar gained 0.18 cent, or 1.3 percent, to 13.64 cents a pound in New York.
Cocoa Rises as Commodities, Equities Rally on U.S. Credit Plan
Cocoa rose for a second straight day as agricultural and energy commodities rallied in tandem with soaring global stocks on a Bush administration plan to halt the credit-market meltdown. Cocoa climbed $34, or 1.3 percent, to $2,690 a metric ton in New York.
Orange Juice Falls a Second Straight Week as Storm Threats Ease
Orange juice fell, dropping for a second week, as concern eased that storms may harm citrus groves in Florida, the biggest orange producer after Brazil. Orange juice slipped 0.4 cent, or 0.4 percent, to 89.90 cents a pound in New York.
Read more...
Australian Stock Exchange Opening Delayed by 30 Mins, Says ASX
By Shani Raja
Sept. 22 (Bloomberg) -- ASX Ltd., which runs Australia's biggest stock exchange, said the opening of the Australian stock exchange will be delayed by 30 minutes pending a clarifying statement on short-selling.
To contact the reporter on this story: Shani Raja in Sydney at sraja4@bloomberg.net.
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Asian Stocks Advance for the Second Day on U.S. Rescue Plan
By Kyung Bok Cho
Sept. 22 (Bloomberg) -- Asian stocks advanced for the second day after the U.S. government sought unchecked power to buy banks' bad debts, easing concern mortgage losses will drive more companies to failure.
Kookmin Bank gained 4.1 percent after U.S. Democratic lawmakers said they would act quickly on a $700 billion rescue plan for financial companies. Shinhan Financial Group Ltd. gained 3.9 percent after the U.S. Securities and Exchange Commission banned short sales of financial stocks to help stem declines of the kind that triggered the bankruptcy of Lehman Brothers Holdings Inc. and the emergency sale of Merrill Lynch & Co.
``The speed and degree to which the U.S. government has intervened with this buying of nonperforming assets is positive for the market,'' Tomochika Kitaoka, a Tokyo-based strategist at Mizuho Securities Co., said in an interview with Bloomberg Television. ``Value stocks that have been brought down to very cheap levels are going to get a second look today.''
The MSCI Asia Pacific Index added 0.6 percent to 114.85 as of 9:06 a.m. in Tokyo, extending the 5.5 percent gain of Sept. 19. Financial stocks were the biggest contributor to the gains.
The regional measure tumbled early last week to the lowest in three years after Lehman filed for bankruptcy, the U.S. government seized control of American International Group Inc. and Merrill was forced to sell itself to Bank of America Corp.
Japan's Nikkei 225 Stock Average rose 1.2 percent to 12,059.13. Stocks also rose in South Korea, while trading in Australia was delayed for 30 minutes pending a clarifying announcement on short-selling, which was banned following similar moves in the U.S. and U.K.
Since the start of 2007, global financial companies have reported more than $510 billion in credit losses and writedowns linked to the slump in the U.S. housing market and slowing economic growth.
Standard & Poor's 500 Index futures fell 0.8 percent in after-hours trading. U.S. stocks advanced on Sept. 19, with the S&P 500 jumping 4 percent to cap its biggest two-day gain since the aftermath of the 1987 crash.
To contact the reporter for this story: Kyung Bok Cho in Seoul at kcho7@bloomberg.netMotoko Kakizaki in Tokyo at mkakizaki@bloomberg.net
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Japanese Stocks Jump on Treasury's $700 Billion Bailout Plan
By Patrick Rial
Sept. 22 (Bloomberg) -- Japanese stocks surged, sending the Topix index to its biggest two-day gain since January, after U.S. Treasury Secretary Henry Paulson proposed a $700 billion plan to buy mortgage securities in a bailout of the financial system.
Sumitomo Mitsui Financial Group Inc., Japan's third-largest listed bank, was bid higher by 3 percent. Toyota Motor Corp., the world's largest carmaker by value, was poised to rise 2.1 percent. Paulson's plan would allow the government to buy a variety of mortgage-related securities to relieve a freeze in credit markets, which has pushed financial institutions to the brink.
``The speed and degree to which the U.S. government has intervened to buy nonperforming assets is positive for the market,'' Tomochika Kitaoka, a Tokyo-based strategist at Mizuho Securities Co. said in an interview with Bloomberg Television. ``Value stocks that have been brought down to very cheap levels are going to get a second look today.''
The Nikkei 225 Stock Average gained 214.48, or 1.8 percent, to 12,135.34 as of 9:09 a.m. in Tokyo. The broader Topix index climbed 22.90, or 2 percent, to 1,172.02. The benchmark has advanced 6.8 percent in the past two days, the biggest back-to- back rally since Jan. 25.
The credit crisis, sparked by the collapse of the U.S. home- loan market, has seen Lehman Brothers Holdings Inc. file for bankruptcy, and government takeovers of American International Group Inc. and mortgage giants Fannie Mae and Freddie Mac. The turmoil wiped off as much as $20 trillion in global equity values from a peak in October.
Nikkei futures expiring in December added 2.9 percent to 12,220 in Osaka and jumped 2.9 percent to 12,210 in Singapore. Standard & Poor's 500 Index futures lost 0.7 percent to 1,237.80.
To contact the reporter for this story: Patrick Rial in Tokyo at prial@bloomberg.net.
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