Saturday, 25 October 2008
The slide in the mainland property market will not end any time soon despite new policies to encourage home purchases, and Beijing may have to come up with more support, industry experts say.
The mainland’s overseas equity-based funds have seen their businesses beaten by the global stock market rout amid heavy cash withdrawals by investors in the third quarter.
DBS is selling at just under nine times next year’s earnings, with an estimated dividend yield of 5% and a price-to-book ratio of 0.9 times, versus the 2.6 times it fetched at the height of the recent boom. Credit Suisse’s target is S$15.70 (about US$10.42), or 57% upside. If China, India and the rest of the region weather the global storm better than most pundits expect, bank shares should rebound smartly.
Friday, 24 October 2008
The United States has plundered global wealth by exploiting the dollar’s dominance, and the world urgently needs other currencies to take its place, a leading Chinese state newspaper said on Friday.
“Ours is a dead market. Whatever you go into, you’ll lose money,” said a dealer at a foreign bank.
0855 GMT [Dow Jones] Asia Ex-Japan markets could face another 25% downside from current levels if investors start pricing in global-recession scenario to companies” earnings projections, Daiwa says. Notes based on past cycles, if current economic malaise is just as damaging for Asia, EPS would fall 20%-30% vs AXJ markets” current implied 12-month forward EPS growth at 5%. Says “overly optimistic” earnings-growth forecasts are key risk, as valuations at rather undemanding 12-month forward PER of 9.8X vs low of 9X during 1988-89 recession and below PERs during Asian financial crisis, SARS period. “Given the year-to-date correction in Asian markets, we think there are many stocks that are attractively priced, especially if investors were to begin looking at oversold cyclicals.” Says China Mobile (0941.HK), Belle International (1880.HK), Esprit (0330.HK), Samsung Heavy Industries (010140.SE), SembCorp Marine (S51.SG) fit bill. (LES)
Japan’s Nissin Food Products Co. said Friday it was recalling half a million cups of instant noodles over fears of insecticide contamination in the latest food safety scare to rock the country’s consumers.
0706 GMT [Dow Jones] Traders in Singapore still struggling to stomach heightened market volatility despite sharp intraday falls on almost daily basis in recent sessions. “Ours is a dead market. Whatever you go into, you’ll lose money. There’s not much dealing going on, just lots of watching from the sidelines and licking wounds,” says foreign house dealer. “This month has been nothing but blood money, with margin calls after margin calls. If share prices come down further, there will be more margin calls again,” says local house trader. STI down 7.8% at 1609.95 vs 1661.60 at midday, with all components weak; increasingly at risk of going below 1600. (FKH)
Thursday, 23 October 2008
Shippers look likely to be the latest casualties of the global credit crisis as banks grow increasingly wary of providing and honouring guarantees needed for transporting goods, potentially crimping international trade, Moody’s Economy.com Thursday warned in a report.
The State Administration of Foreign Exchange (SAFE) will replace the current reserve management department with an international reserves department with more detailed responsibilities, among which will be undertaking more macroeconomic research.
For three decades, China has fuelled its remarkable economic rise by becoming the world’s workshop and unleashing a flood of low-priced exports. But faced with a possible global recession and weakening demand for Chinese exports, the question now is whether the ruling Communist Party can prevent the financial crisis from derailing the country’s economic miracle.
China’s measures to encourage home sales aren’t enough to stop a cooling property market from dragging down growth in the world’s fourth-largest economy, said Credit Suisse AG and Standard Chartered Bank Plc.
Wednesday, 22 October 2008
Investors are taking losses of up to 90 percent in the $1.2 trillion market for collateralized debt obligations tied to corporate credit as the failures of Lehman Brothers Holdings Inc. and Icelandic banks send waves through the global financial system.
The search of a market bottom likely will continue through the rest of the year and into 2009, as signs begin to emerge that a turning point is near but not yet upon Wall Street.
Russia, Iran and Qatar made the first serious moves Tuesday toward forming an OPEC-style cartel on natural gas, raising concerns that Moscow could boost its influence over energy markets spanning from Europe to South Asia.
Guangdong authorities have described the closure of Hong Kong-listed Smart Union’s three factories in the province last week as a premeditated move that deliberately left workers and suppliers in arrears.
Any one of three major Nevada gaming companies based in Las Vegas could face the prospect of bankruptcy because of heavy debt and falling stock prices, a University of Nevada, Reno professor and gaming expert said.
Tuesday, 21 October 2008
U.S. regulators are investigating whether investors manipulated end-of-day stock prices to avoid being forced by their brokers to sell holdings.
Economists and others weigh in on China’s sharper-than-expected economic slowdown. The country’s GDP grew 9% in the third quarter from a year earlier, slower than the second quarter’s 10.1% gain.