| Global News Coverage for Investment Professionals |  |
- World Bank, IMF warn of asset bubbles
The World Bank and the International Monetary Fund said a surge in capital caused by economic-stimulus efforts risks causing asset bubbles. Asia is of particular concern because real estate prices and stocks have gone up sharply in the past few months. Bank of Korea Governor Lee Seong-tae indicated last month that he might raise the central bank's key interest rate if housing prices continue to increase at an undue rate. The Wall Street Journal (tiered subscription model)
(04 Nov.)
- Chinese companies increase investment abroad
Investment overseas by Chinese companies increased 1% to $33 billion during the first nine months of 2009 compared with the same period last year, said Zhang Xiaoqiang, vice chairman of the National Development and Reform Commission. "Today, we see Chinese companies, such as Lenovo and Huawei, both in developed markets and in many African countries," said Taffere Tesfachew of the U.N. Conference on Trade and Development. China Daily (Beijing)/Xinhua News Agency
(04 Nov.)
- GM's board calls off deal to sell European division Opel
After taking another look at General Motors' strengthened financial condition and Europe's improving economy, the automaker's board of directors decided to cancel the sale of its European division Opel, which includes U.K. unit Vauxhall. GM said it will soon present a restructuring plan for Opel to Germany and other governments involved. "While strained, the business environment in Europe has improved," said Fritz Henderson, GM's president and CEO. "At the same time, GM's overall health and stability have improved significantly over the past few months, giving us confidence that the European business can be successfully restructured." Detroit Free Press
(03 Nov.), The Globe and Mail (Toronto)
(04 Nov.), The Times (London) (subscription required)
(04 Nov.)
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Vehicle sales up in U.S. for Ford, GM, Toyota: Ford Motor, General Motors and Toyota Motor proved last month that they can boost car sales in the U.S., even without the help of "Cash for Clunkers." GM, the biggest seller in the U.S., said its sales were up 5.6% in October compared with the same month last year. It marked the automaker's first improvement for year-on-year monthly sales since January 2008. Ford reported a sales increase of about 3%, and Toyota posted a slight gain. Los Angeles Times
(04 Nov.), Detroit Free Press
(03 Nov.)
- Gold price hits record high after IMF sells to India
The price of gold surged to a record high of $1,087 per ounce Tuesday after the International Monetary Fund sold 200 tonnes to India's central bank. The $6.7 billion sold is about half of the gold the IMF wants to sell to increase its finances. The IMF is satisfied with proceeds of the sale, the fund said, and price changes on the market had to be expected. Business Standard (India)
(04 Nov.)
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- Asian markets gain in light trading
Asian-Pacific stocks ended higher Wednesday, but traders held fire ahead of a meeting by the U.S. Federal Reserve. Japan's Nikkei 225 gained 0.4%, South Korea's Kospi Composite advanced 1.9% and Hong Kong's Hang Seng Index improved 1.8%. China's Shanghai Composite added 0.5%, Taiwan's Taiex rose 2% and New Zealand's NZX 50 inched up 0.2%. Meanwhile, Australia's S&P/ASX 200 slipped 0.2%. The Wall Street Journal (tiered subscription model)
(04 Nov.)
- South Korean banks' profit increases sharply in Q3
South Korea's Financial Supervisory Service said banks' profit rose 53% to $1.9 billion last quarter, compared with $1.26 billion in the second quarter. Banks are expected to see further profit increases as provisions for bad loans are reduced and margins improved. But lenders still need to remove troubled assets from their portfolios, the regulator said. Financial Times (tiered subscription model)
(03 Nov.)
| Economics | | |
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- IMF wants timetable, plan for recovery coordination
International Monetary Fund Managing Director Dominique Strauss-Kahn said the Group of 20 should make a plan and a timetable to coordinate economic recovery. Nations are still showing a willingness to cooperate, Strauss-Kahn said. "The biggest players, namely the U.S. but also China and Asia, do show the willingness to do something together to try to fight against big imbalances," Strauss-Kahn said. "Not because they've become good boys but because this is in their own interest." Bloomberg
(04 Nov.)
- World Bank boosts forecast for Chinese growth
The World Bank increased its forecast for China's economic growth this year. The bank predicted an 8.4% growth, up from 7.2% forecast in June, with 8.7% expected in 2010. Export growth will probably resume this year, the bank said, but China still needs to encourage domestic demand. NYTimes.com
(04 Nov.)
- Extension of homebuyers' tax credit close to passage in Congress
A compromise bill extending the popular $8,000 tax credit for first-time homebuyers could be on its way for U.S. President Barack Obama's signature as early as next week. Democratic leaders in both houses of Congress would like to show that they are moving toward approval of the measure before October's unemployment statistics are announced Friday. The tax credit is scheduled to expire Nov. 30, but the extension would continue it to April 30. The bill also loosens eligibility requirements. The New York Times (tiered subscription model)
(03 Nov.)
- EU: Still-frozen credit markets cripple region's recovery
The severe shortage of credit across Europe is a serious drag on the region's economic recovery, the European Commission said. "Regarding the situation of the financial markets, the credit flows are close to zero or in some cases even in negative territory," said Joaquin Almunia, the EU's economy commissioner. "... The banking sector is still fragile, and credit is stagnating. This is the bad news." The commission forecast that Europe will experience steady but slow recovery during the next two years. EUObserver (Brussels)
(03 Nov.)
| Geopolitical/Regulatory | | |
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- EU's Lisbon Treaty is ratified with Czech president's signature
The final step in ratifying the EU's Lisbon Treaty was completed with the signature of Czech President Vaclav Klaus. "It's now absolutely clear that the Lisbon Treaty will enter into force soon," said European Commission President Jose Manuel Barroso. The measure could take effect as soon as next month. The treaty streamlines the EU's structure, creating several positions -- including president of the European Council -- strengthening the power of members of the European Parliament and narrowing the authority of member states to veto EU decisions. EUObserver (Brussels)
(03 Nov.), The Times (London) (subscription required)
(04 Nov.)
- Last-ditch effort begins to make Blair EU president
British Prime Minister Gordon Brown is helping in a last-minute push to get his predecessor, Tony Blair, named to the post of permanent EU president, sources said. Blair is being urged to make a more public bid for the job, as he needs the support of German Chancellor Angela Merkel. The Swedish government, which holds the EU's rotating presidency, will begin considering candidates shortly. The Daily Mail (London)
(04 Nov.)
- G-20 must close regulatory loopholes, EU's Barroso says
Jose Manuel Barroso, president of the European Commission, said leaders from the Group of 20 nations should agree to changes to financial regulation to prevent loopholes. "It is important to avoid gaps in terms of regulation and supervision," Barroso said. "It's very important that the basic principles agreed in London and in Pittsburgh at the G-20 are now translated in real binding legislation in our countries to avoid loopholes and to avoid this kind of negative inconsistencies between the systems of supervision and regulation." Reuters
(03 Nov.)
- Europe's rescued banks get tougher treatment from regulators
Agreements between EU regulators, the U.K. government, and Royal Bank of Scotland and Lloyds Banking Group show officials are using a firmer hand when dealing with banks that received considerable state aid. The shift is partially attributed to improvement in the banking sector. During the financial crisis, regulators were expected to tolerate massive aid packages for financial institutions to avoid further threat to the financial system or broader economy. As systemic risk eases, regulators can be tougher. The Wall Street Journal (tiered subscription model)
(04 Nov.)
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- Deutsche Bank launches ETF linked to Hong Kong stock index
Deutsche Bank brought to the market an exchange-traded fund that seeks to deliver short exposure to Hong Kong's Hang Seng Index. The HSI Short Daily Index ETF is linked to the inverse of the index's performance. The total all-in fee is 0.75%. The ETF trades on the London Stock Exchange. Investment Week
(02 Nov.)
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