Asian stocks have lost most of their gains of the year and May will likely end as the worst month for equity markets in more than three years, but some strategists tell CNBC this is an “amazing” time to accumulate stocks.
Asian stocks have lost most of their gains of the year and May will likely end as the worst month for equity markets in more than three years, but some strategists tell CNBC this is an “amazing” time to accumulate stocks.
“There`s an incredible amount of noise. It`s incredibly scary. We understand that but it is an amazing opportunity for investors to focus on their long-term requirements,” Marc Desmidt, Managing Director of BlackRock`s Asia Pacific Portfolio Management Group, said on CNBC Asia`s “Squawk Box”.
“This is an amazing time to look at equities across the world, dividend stocks that are going to generate an income for people who are going to be living a lot longer than they have in the past,” he added.
Desmidt, whose team manages USD 300 billion of assets in Asia, said he is trying to advise clients to buy more equities, as well as other so-called risk assets.
“Safe havens are quite expensive and bonds give you a negative yield,” Desmidt said. “Cash is going to burn a hole in your pocket over time, especially in Asia with inflation levels around 4 or 5 percent.”
Stocks fell across Asia on Thursday after a selldown in Wall Street overnight amid worries that Europe`s debt crisis could be worsening. The Nikkei 225 Stock Average dropped close to 2% while in Hong Kong, the benchmark Hang Seng Index was down 1.4% in early trade. The MSCI Asia Pacific Index was down almost one percent.
Since the start of the month, the Hang Seng Index has plunged 12.3% while the Nikkei has declined nearly 8%.
While strategists are saying it`s time to buy stocks, there are others who say it is time to stay on the sidelines. Dennis Gartman, investor and author of the newsletter, “Gartman Letter,“ is one of them, telling CNBC earlier this week that technical analysis suggest investors should be heading out of risk assets and that there is plenty of downside for equities.
Peter Schiff, CEO of Euro Pacific Capital, thinks the bottom for Asian stocks is yet to be hit, but suggests buying now.
“I like the Asian markets the best,” Schiff told CNBC. “I`m not saying that the market is at a bottom but I think if you`re a long-term investor, buy some stocks here and five years from now, you`re going to be very glad you own them. And I think there are a lot of good dividends that you can get.”
Mikio Kumada, Global Strategist at LGT Capital Management, said that risk assets are “oversold” and he sees value in equities. He sold some government bonds on May 22 and bought some stocks.
“I think in the short term risk assets are probably oversold. So we might get a good bounce here,” he said.
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Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout
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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter
The euro hit a two-year low against the dollar on Thursday and forex strategists say there is a growing possibility that the single currency could fall to parity if Greece were to exit the euro zone.
The euro hit a two-year low against the dollar on Thursday and forex strategists say there is a growing possibility that the single currency could fall to parity if Greece were to exit the euro zone.
Overnight, Barclays` Global Head of Foreign Exchange Research, Paul Robinson, revised down the bank`s target for the euro, forecasting the currency to fall to $0.98-$1.11 under a Greek exit scenario – up to 25 cents downside from current levels.
“We have revised down our euro-dollar forecasts. These are consistent with ongoing market stress in Europe, limited support from European policymakers, and election results in Greece,” Robinson said in a research note. “In our view, for all the discussion about a Greek exit, it is far from fully reflected in market price,” he added.
The euro has fallen 5.5% since Greek elections on May 6, which did not result in the formation of a coalition government. The country is going to the polls again on June 17, which could prove to be the decider on whether or not the debt-ridden nation stays in the euro.
Robinson adds that if Greece were to exit the euro zone, the effect on global currencies would follow the same pattern seen after the indecisive May 6 election, only that it would be much more severe. “The euro would depreciate against the US dollar, yen and British pound in particular,” he said.
Thio Chin Loo, Senior Forex Strategist, BNP Paribas agrees a disorderly default and exit of Greece from the euro zone could likely result in the currency falling to parity.
“If Greece undergoes a disorderly exit from the euro zone – a scenario under which policymakers have not adequately put measures in place to ringfence other peripheral nations – the euro could fall to parity,” she said.
Under a scenario of an “orderly” Greek exit, however, Thio forecasts the euro would slip to “sub” 1.20 against the dollar.
Sean Callow, Senior Currency Strategist, Westpac Bank says he is not ruling out the possibility of the euro-dollar parity, but notes a fall of 10 cents is more likely, if Greece were to exit the currency bloc.
“I wouldn`t rule out the possibility of parity. The euro dropped 35 cents in the second half of 2008. I think it would be less than half of what happened in 2008,” Callow said
“Back then we had a build up of short US dollar positions, and investors were long risk assets, the euro was really pumped up. Our starting point (for the euro) isn`t as high now,” he added.
According to Barclays` Robinson, whether Greece stays or leaves the euro area, the single currency will inevitably face downward pressure this year.
“Political risk has increased – not only in Greece but also in `core` countries such as the Netherlands. The problems in the Spanish banking system have highlighted the issues facing both banks and sovereigns in the euro area,” he said.
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Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout
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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter
Asian economies – including China – have enough firepower to pull the world out of recession if a global double-dip recession occurs, according to Anthony Chan, Asia sovereign strategist at AllianceBernstein.
Asian economies – including China – have enough firepower to pull the world out of recession if a global double-dip recession occurs, according to Anthony Chan, Asia sovereign strategist at AllianceBernstein.
Chan wrote in a blog post that Asian countries still have room to stimulate their economies should the global economy slump as it did during the 2008 financial crisis.
“On the monetary policy front, we think central banks in the region have room to cut interest rates and stimulate their economies, since real interest rates are high,” said Chan.
“Currently, real rates outside of China stand at around 0.5% to 1.2%, but we expect disinflationary pressures to continue, which would further increase the policy flexibility of countries across the region,” he said.
According to AllianceBernstein calculations, China`s one-year lending rate stands at 3.16% in real terms, with Indonesia`s real rate at 1.25% and Malaysia`s at 0.95%.
Chan said the region`s countries – in particular, China, Singapore and South Korea – have scope for fiscal as well as monetary stimulus.
“China`s budget deficit was only a modest 1percent of GDP in 2011, which leaves plenty of room to pursue the `proactive fiscal policy` referred to in recent policy statements,” he said.
“Given that China still has a long way to go before reaching a mature stage of economic development, we think there is plenty of room for the government to rev up demand by `fast tracking` new major investment projects if necessary,” he added.
Chan warned however that Asian countries do not have the same amount of fiscal and monetary firepower at their disposal as during the 2008 crisis.
“Most Asian economies are more highly leveraged than they were in 2008, with a significant rise in loan-to-GDP ratios in recent years,” he said. “The fiscal positions of most countries in Asia are much worse than they were just before the collapse of Lehman Brothers in 2008. Hong Kong and Singapore are the only countries in the region expected to enjoy budget surpluses in 2012.”
Marc Faber, the famously bearish economist and author of the Boom, Gloom and Doom newsletter, said on Friday that he is “100%” certain the world is heading for a double dip recession .
“I think we could have a global recession either in the fourth quarter or early 2013,” Faber told CNBC`s “Fast Money Halftime Report“.
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Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout
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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter
June promises to bring clarity to what mystified and troubled markets in May.
June promises to bring clarity to what mystified and troubled markets in May.
On the very first day of the month, the critical US May employment report and Chinese PMI data will help give more context to the two major economies necessary to drive global growth, while Europe`s economy continues to be stymied by its sovereign debt crisis.
The US employment report is expected to show on Friday that just 165,000 jobs were added in May, above April`s 115,000 but still too sluggish and below the first quarter trend.
Heading into May, markets were already signaling worries about global growth. But the idea that Greece could exit the euro, spreading contagion, after it failed to form a coalition government sent investors into more defensive positioning around the world.
That drove stocks lower, the dollar higher and US interest rates to historic lows. The 30-year German bund fell below 2% for the first time.
“There`s a culmination of stress that`s building,” said JP Morgan chief economist Bruce Kasman. “I`m not sure the Greek election is going to determine what`s happening. It`s a key step on the road to figuring out what`s going to happen.”
There are many worries, but there are three main themes where investors are focused.
The first is Greece and fearsa sloppy euro exit would trigger a breakdown of the euro zone. The Chinese economy and the ability of leaders there to engineer a soft landing is also a major concern.
And finally, the idea that the US economy, on its shaky road to recovery, could be derailed by outside forces makes for heightened interest in US data and also in the doings of the Federal Reserve , which holds an important meeting June 19 and 20.
Another concern that could grow during the month of June are the tensions with Iran, as European sanctions take hold and recent talks between Iran and six nations failed to resolve the key issues surrounding its nuclear program.
“Europe is by far the most important story line. The sense China is looking to slow, the fact Brazil is slowing…the US is the only place that has held up pretty well,” said Kasman.
The US economy may actually start to show some signs of progress in June, as the reversal of the unseasonably warm winter`s “weather effect” on economic numbers normalizes.
“We are seeing some signs that the upward and downward distortions of the first half of the year are working their way through and that a cleaner read on the economy which is somewhat stronger than implied in some of the recent data may be on the way. You can see that in the drop in (jobless) claims from the April high,” said Steven Wieting, Citigroup economist.
Economists are looking for continued improvement in housing data, and consumer-driven spendingdata, such as retail and auto sales.
“We`re going to get a lot of clarity on a lot of big issues. June jobs data (released in July) I think will provide insight into whether the slow down is simply weather pay back or whether there`s a fundamental downshift in the economy,” said Mark Zandi, chief economist at Moody`s Economy.com.
“Consumers are doing their part. They`re not leading the way, but they`re hanging in there and doing their part,” he said.
_PAGEBREAK_
Greek Drama
At mid-month, the Greek electionscould bring some much needed answers for the future of Europe, as voters decide whether they want political leadership that could take the country out of the euro, an event markets fear would destabilize Europe`s banks and undermine the euro zone.
The leftist party SYRIZA, neck-and-neck in polls with the New Democracy party, opposes the austerity that has come with Greece`s bailouts, and its leader has been outspoken about it.
“The June 17 election is not going to determine a Greek exit but it could set in motion things that do. We`re going to have to watch how it plays out. If you do get a vote toward a Greek exit, we`re going to move into a world where a lot of things in terms of linkages are going to be stressed. And people will try to prepare for it but you don`t know how to prepare for it,” Kasman said.
Within a day of that election, G-20 leaders meet in Los Cabos, Mexico for a two-day summit (June 18/19), where they are expected to discuss the European sovereign crisis.
European Commission President Jose Manuel Barroso in a letter to European Union nations late last week pointed out that all G-20 partners need to recognize their responsibility to build a sustainable recovery. He said the US and Japan need to implement credible fiscal plans and China should continue to strength its social safety nets and carry our more reforms, including moving to a floating exchange rate.
By the end of the month (June 28/29), euro zone leaders hold another summit, armed with knowledge about the will of the Greek people and under pressure to make sure the correct steps have been taken to support Greece and protect their union.
But ahead of that and ahead of the Greek election, the European Central Bank holds a rates meeting June 6, and it could consider positioning for more liquidity or even a rate cut.
“June is pivotal in a policy making sense and it`s pivotal in an economic sense,” says Robert Sinche, global head of currency strategy at RBS.
“We like to think that the June 17 election would be conclusive in some ways but it`s possible it`s another do over. One would think we`ll know something but it`s not clear in that regard. I actually think some of the central bank meetings may end up being just as important in terms of currency markets,” he said.
While Greece is not widely expected to exit the euro, the possibility has risen markedly.
Sinche said one negative scenario he has heard for Greece is that it could form a coalition that refuses to honor the commitments of the memorandum of understanding, and the EU could stop making payments. If that happened , Greece would run out of money, the government could fall and the country would be on its way to another election.
As for the ECB, the weaker German data of late may press it to consider taking action. “I think the question is whether policy makers are going to start bending again,” Sinche said.
The question for China is whether its policy makers can provide the right balance of stimulus to keep the economy growing at a high enough rate. Premier Wen Jiabao this month urged more support for growth through monetary policy and fiscal stimulus.
China`s PMI data, a measure of economic activity, is forecast to fall in May but still show expansion. Economists from Barclay`s said they believe that China`s growth will bottom in the second quarter. They also see another major stimulus package as unlikely unless the US economy weakens further.
June 8 is an important date for China. There is a major release of data, including industrial production, inflation data and retail sales.
_PAGEBREAK_
Fed Ahead
The health of the US economy remains in question, as an uneven series of economic reports has markets questioning whether the US is repeating the pattern of last year when it slumped into the summer.
“If you ask me why it`s been a choppy month, it`s been 70% Europe; 20% China and 10% stuff in the U.S. I think the economy is rolling over here. It certainly is not as strong as it was earlier in the year,” said Adam Parker, US equities strategist at Morgan Stanley, said of the stock market selloff.
The US economy, however, is not weakening so much that the Federal Reserveis likely to provide any new easing programs at the June meeting.
Fed officials, themselves, have been making it clear they are not now ready to carry out further policy moves, but they are holding that possibility in reserve. As the June meeting gets closer, many economists believe the Fed will allow its “operation twist” program to expire as planned. “Twist” involves the Fed`s purchase of longer dated Treasurys and sale of a similar amount of shorter dated notes, in an effort to keep longer term rates low.
Fed Chairman Ben Bernanke may provide some more clarity when he appears before the Congressional Joint Economic Committee June 7.
The Fed has left the door open for more easing in the event Europe`s problems take a turn for the worse and start to send shock waves through global financial markets and the banking system. They also are concerned about what happens later in the year when Congress starts to deal with the “fiscal cliff,” the twin pressures of budget cutting and the expiration of tax breaks.
“Assuming Greece doesn`t`t fall apart right before the meeting, I think they hold policy unchanged. Twist just goes away,” said Zandi. “If the jobs number is weaker than I`m anticipating, that changes my narrative about what`s happening in the job market, and the European situation feels like it`s uneven and not coming together, then there`s a good chance they`d do another round.”
Some Key Dates for June
June 1 – U.S. May employment report, China PMI
June 6 – European Central Bank rates meeting
June 7 – Fed Chairman Ben Bernanke Congressional testimony
June 8 – China economic releases
June 17 – Greek election
June 18/19 – G-20 in Mexico
June 19/20 – FOMC Meeting
June 28/29 – European leaders summit
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Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout
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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter
Greek contagion could drag euro below 1.19: Charts
KV Prasad Jun 13, 2022, 06:35 AM IST (Published)
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Summary
The US dollar Index has rallied quickly above $0.815 and has a clear run towards $0.89. There is minor resistance near $0.84. A strong US dollar brings a new range of tensions into trading relationships. This puts pressure on the Australian dollar.
The US dollar Index has rallied quickly above $0.815 and has a clear run towards $0.89. There is minor resistance near $0.84. A strong US dollar brings a new range of tensions into trading relationships. This puts pressure on the Australian dollar.
Gold, which is normally a beneficiary of this type of market confusion and instability, has continued to drop below the long-term upward trend line. Downside support is near USD 1,440 an ounce.
The speed and severity of the effect underlines the comparative weakness of many economies as they still struggle to climb out of the wreckage of the Global Financial Crisis.
The GFC is not over, and it`s too soon to say if the current Greek inspired tragedy is the final act or just a prelude to a much more dramatic finale. That result will be determined by the resilience of economies such as China and the US.
These are confusing and unexpectedly contradictory reactions. This signals two things. The first is that investors must use extreme caution in this environment. Traders must be more nimble and quick footed than in other market conditions.
The second is that this environment makes analysis difficult so conclusions must always be confirmed with other verifying behavior. The balance of probabilities is not clearly tipped one way or the other.
The euro-dollar exchange rate gives an indication of investors` views of the health of the European economy. The euro-dollar weekly chart is dominated by a strong and well established downward trend that has been in place starting 2011, May from the high at $1.49. The recent rally failed to touch the trend line before starting on a new downward trend.
The first key support level was near $1.29 and the market has dropped below this level. The fall below $1.29 has the next support level near $1.24. This defined the limits of euro weakness in 2008 and 2009 so there is a high probability it will again provide good support.
The downward trend pressure is well established so there is an increasing probability the euro may fall below $1.24. In 2010 the euro dipped to a low of $1.19, which was also near the 2005 lows. Unlike now, in 2005 Europe was not convulsed with monetary and economic indecision.
Falls below $1.24 are not unprecedented. In 2001 the Euro was trading at $0.88. The acceleration and spread of the Greek contagion has the potential to drag the Euro below $1.19. It is no longer an unthinkable outcome.
Daryl Guppy is a trader and author of Trend Trading, The 36 Strategies of the Chinese for Financial Traders –www.guppytraders.com . He is a regular guest on CNBCAsia Squawk Box. He is a speaker at trading conferences in China, Asia, Australia and Europe.
If you would like Daryl to chart a specific stock, commodity or currency, please write to us at ChartingAsia@cnbc.com. We welcome all questions, comments and requests.
CNBC assumes no responsibility for any losses, damages or liability whatsoever suffered or incurred by any person, resulting from or attributable to the use of the information published on this site. User is using this information at his/her sole risk.
Copyright 2011 cnbc.com
Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout
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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter
Asia to Europe: Bite the bullet & implement reforms
KV Prasad Jun 13, 2022, 06:35 AM IST (Published)
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Summary
Europe should be “realistic,” devalue its currency and bear the pain of reforms so that it can emerge from the debt crisis stronger like Asia did in 1997, said Bank of Thailand`s Governor Prasarn Trairatvorakul.
Europe should be “realistic,” devalue its currency and bear the pain of reforms so that it can emerge from the debt crisis stronger like Asia did in 1997, said Bank of Thailand`s Governor Prasarn Trairatvorakul.
“At that time after `97, we were realistic,” Prasarn told CNBC. “[In] Thailand, we changed the exchange rate regime, reoriented the macro policy, let the currency into a more flexible movement; we depreciated the currency. We went into a number of reforms in the banking sector, corporate governance so on coming into play.”
The Southeast Asian nation, which triggered the start of the Asian financial crisis in July 1997, had to abandon its currency`s peg to the US dollar after it could no longer afford to keep it at 25 baht to the greenback. The baht lost more than half its value in less than 6 months, dropping to 56 baht by January 2008, and Thailand had to reform its banking sector in exchange for nearly USD 21 billion in aid from the International Monetary Fund .
After shrinking 10.5% in 1998, Thailand`s economy bounced back in 1999 and has been growing at an average rate of 4% annually from 2000-2009. The Thai currency currently trades at around 32 baht against the dollar.
Prasarn is the latest prominent figure in Asia to urge Europe to bite the austerity bullet. In a recent interview with CNBC, South Korean President Lee Myung-bak, drawing on the country`s own experience in taking on the tough reforms dictated by the IMF back in 1997, also prodded Greece to accept its USD 130 billion bailout.
But unlike Asia, which managed to export its way out of recession thanks to competitive foreign exchange rates, Prasarn says the euro`s strength is the main problem Europe faces.
“The exchange rate is a big obstacle for them,” he added. “We (Asia) were helped at that time by a more conducive world economy and with our realistic exchange rate, we could export more than [what we] paid out in foreign debt and [that] helped our recovery.”
Ruchir Sharma, Head of Emerging Markets and Global Macro at Morgan Stanley Investment Management and author of “Breakout Nations: In Pursuit of the Next Economic Miracles,” agrees that the only way out for Europe is to remove the fixed exchange rate, which he described as the “source of all troubles.”
“Some sort of unraveling seems to be the only way out, so that countries go bankrupt, regain some competitiveness,” Sharma told CNBC Asia`s “Squawk Box” on Wednesday.
The euro has fallen 13% in the past 12 months as the Europe`s crisis deepened, and traded at 1.2455 against the dollar Wednesday. The ECB has resisted devaluation o the euro, primarily due to pressure from Germany and nations that don`t have the same debt issues as Greece or Spain.
Sharma believes the “domino effect” seen during the Asian financial crisis is already playing out in Europe, but the outcome could be very different and hinges on whether developed nations are willing to accept tough reforms.
“I think nobody has an exact answer on how exactly this is going to play out. Back then, when we had the [Asian] crisis in 1997, 1998, a lot of countries suffered a very hard landing whether it was South Korea, Indonesia, and they used that hard landing to carry out structural reforms and to emerge much stronger 5, 10 years from there,” Sharma said.
“But in the developed world, there is a tendency to amortize the pain over time, which ends up never solving the problem and keeps its economies stagnating for long periods of time,” he added.
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Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout
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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter
Sun to set on commodities super-cycle: Morgan Stanley
KV Prasad Jun 13, 2022, 06:35 AM IST (Published)
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The massive commodities boom of the past decade is at its tail end given the slowdown in one of the largest consumers, China, says Ruchir Sharma, Head of Emerging Markets at Morgan Stanley Investment Management.
The massive commodities boom of the past decade is at its tail end given the slowdown in one of the largest consumers, China, says Ruchir Sharma, Head of Emerging Markets at Morgan Stanley Investment Management.
“China`s growth is downshifting to a lower plain, its very commodity-intensive phase of growth is coming to an end. This to me marks a big decade of increase in commodity prices coming to an end,” Sharma told CNBC Asia`s “Squawk Box” on Wednesday.
“I suspect that we`re headed now for two decades down as far as commodity prices are concerned. This is the sunset of the big commodities super-cycle,” he said.
The 200-year history of commodity prices shows a repeated trend of two decades of price declines, followed by one decade of price gains, according to Sharma.
The current up-cycle in commodities led by Chinese demand together with stupendous growth in other emerging economies is now reaching its end, with raw material markets seen under pressure in recent months.
Copper prices, which areseen as a gauge for the world`s economic health due to its extensive use in the manufacturing industry, have fallen 13% over the last three months. Brent crude and gold prices have fallen 14 and 9%, respectively, over the same period.
Earlier this month, the world`s largest miner, BHP Billiton, announced that it has pulled back on plans to spend USD 80 billion on expansion projects, warning that it expects commodity markets to cool further.
“Australia, Brazil, Russia – I think all these economies will have to cope with lower commodity prices over the coming decade compared to the big windfall they enjoyed over the past decade,” Sharma said.
“What these countries forgot is that the big boom over the past decade was very much because of a global tide lifting all boats; it was not about their own economic policies,” he added.
Copyright 2011 cnbc.com
Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout
3 Mins Read
Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter
The upside to Asian stock declines? Better dividends
KV Prasad Jun 13, 2022, 06:35 AM IST (Published)
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Large-cap Asian stocks such as banks and property developers in Hong Kong and Singapore have declined so much over the past 12 months that they are now paying their best dividends in years, traders say.
Large-cap Asian stocks such as banks and property developers in Hong Kong and Singapore have declined so much over the past 12 months that they are now paying their best dividends in years, traders say.
They add that as markets are expected to remain volatile in the coming months, investors should seek safety in counters such as these that pay out a steady income.
In Hong Kong, state-owned Industrial and Commercial Bank of China has declined about 26.8% to HK$4.73 (61 US cents) over the past 12 months, and is now yielding 5.9%. Singapore`s DBS Group, Southeast Asia`s largest lender, has declined nearly 10.1% to S$13.34 ($10.44) and is yielding about 5 percent.
Among property counters in Singapore, Keppel Land has lost 27.4% of its value over the past 12 months to close at S$2.92 on Tuesday. It now has a dividend yield of 6.9%. Guocoland has declined 28.5% to S$1.60 and is now yielding 5.1%.
Jake Chow, Associate Vice President of Dealing at the brokerage CIMB Securities in Singapore said these counters are looking very attractive after the selloff and provide good income even if the rest of the market continues to be volatile.
“These stocks are paying their best dividends in years and it may get better,” Chow said. “If the market collapses and drops to S$2.50 per share, the dividend yield will go up to 6.5%, 6.8%.”
Dickie Wong, Executive Director of Kingston Securities in Hong Kong, says that yields are what investors should be looking at because bank deposit rates are likely to remain low. He favors Hong Kong-listed banks and real estate investment trusts.
“These are really good stocks, and the more their prices fall, the higher the yields go up,” Wong said. “Also, the average yield on the 48 components of the Hang Seng Index is more than 3% so that`s really quite attractive considering what you can get for your deposits.”
The bank deposit rate on a savings account in Singapore is 0.01% per year while the rate in Hong Kong is 0.0010%, according to information on HSBC Bank`s web site.
However, analysts caution that there could be more downside to Asian stock markets, and investors may want to wait and watch.
“My only concern would be timing,” said Justin Harper, Market Strategist at IG Markets in Singapore. “The euro zone crisis is likely to remain for the foreseeable future and presents plenty of downside risks for Singapore. While I think it makes sense to put a few high-yield stocks on your radar screen, monitor them for the time being to spot for any further falls and agree to a decent entry price.”
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Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout
3 Mins Read
Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter
Facebook has become synonymous with the "Like" button, which was first introduced in 2009 and has changed the way we interact with companies and products. According to Facebook's S1 IPO filing, the site "generated an average of 2.7 billion Likes and Comments per day during the three months ended December 31, 2011."
When users click a button to show they "like" a Facebook page, they are effectively signing up for continued interactions with that page and the entity behind it. Corporations have increasingly made social media connectivity an important aspect of their marketing campaigns, allowing them to communicate with their customers, develop their brand and even offer special promotions. The "like" button is one of many ways that Facebook creates value, learning about preferences of its users and allowing companies to target messaging over the social network.
As always, some companies have been more successful than others in drawing a massive online following and millions of "likes" by Facebook users, but succeeding can have a direct impact on the bottom line. A recent study by ComScorefound that users who "like" a page are more likely to make a purchase from that retailer than from a user with no affiliation. In addition, using Nielsen Brand effect studies, Facebook has found that over the past two years, consumers are 65 percent more likely to remember social ads compared to nonsocial advertising.
Brands also gain exposure to users who are "friends of fans," those who are connected with users that "like" pages and will see actions of those users show up on their Facebook news feeds. With the average Facebook user having 130 friends, potential distribution can get very large, very quickly. According to Facebook, for the top 1,000 fan pages, the friends of fans number is approximately 81 times larger than the pure fans number alone.
Although being "liked" offers direct, immediate access to users and their friends, it does not always translate to success on Facebook. To get a measure of how well companies are utilizing their social connections, Facebook launched the "people talking about this" feature, which measures user engagement — a much more valuable metric than "likes" alone. The new measure tracks structured activity on Facebook, such as users commenting on posts or sharing links and photos. When users engage in this brand-related activity, it becomes a mini-endorsement of the company or piece of content and offers immediate visibility to their friends.
"Companies look at ‘people talking about this'as a way of understanding something that business has always cared about: chatter or buzz about brand, and how well they're seeding their product or idea," says David Baser, the product manager at Facebook who oversees the feature. "This is a metric that lets you know how much users are talking about and engaging with a brand or topic, what marketers refer to as ‘reach'," he says. "Much of the value you get is having the users to spread the word about you through word-of-mouth."
"Many companies have said they wanted to understand virality and the people who are taking the first step in the viral chain," says Baser. "We wanted businesses to understand that engaging users is important." With this feature, it's easier for companies to target their campaigns to focus on engagement, something some have already done.
Among all corporate brands, Facebook itself would be at the top spot, with approximately 60 million "likes" on its main fan page, but this list includes only non-Facebook companies so the social network is excluded from the list.
So, what are the most "liked" brands on Facebook, and what they are doing right to maintain such a massive following? Click ahead to find out!
Note: The figures for total number of "likes" and "people talking about this" were as of the publish date for this story.
15. Target Number of "likes": 12.16 million People talking about this: 437,772 Facebook page:http://www.facebook.com/target
The American retail chain Target has seen an increase in its fans, and now has over 12 million likes.
Target's Facebook posts feature photos of products with witty statues and products that are tied to holidays, movies releases and pop-culture days. For "Star Wars" day, Target released a fun photo of a Yoda doll and a status of “International Star Wars Day it is. Celebrate you should.” It also uses its Facebook page to feature coupons and products that are on sale.
There is also a focus of interaction with its user. Status likes can reach up to 70,000. Recently, Target turned 50, and it encouraged Facebook fans to wish them a Happy Birthday with birthday "likes" It also offers a behind-the-scenes look by posting photos and offering TargetChats with Target executives, and book authors.
Burberry, the UK-based luxury fashion house, is another highly liked and highly engaging brand, according to Facebook sources. Burberry’s brand page is highly visual, posting mostly videos and photos that regularly receive tens of thousands of "likes" and hundreds of comments. Photos include behind-the-scenes shots from photo shoots and displays of new product lines that bring in positive feedback from users in several languages.
Burberry also shares beauty tips and even has a “Burberry Body” tab that allows users to purchase products directly on Facebook. The Burberry page is also relatively music heavy, with an "acoustic" section displaying a number of music videos to complement the brand's look and feel.
13. Subway Number of "likes": 13.08 million People talking about this: 221,101 Facebook page:http://www.facebook.com/subway
The sandwich franchise Subway contains a variety of posts that include product photos, contest updates and videos. A photos of one of its sandwiches can get over 18,000 likes.
Subway also focuses on online contests to help lure fans. This month, Subway is running a contest in partnership with the upcoming movie "Battleship," in which users get codes from Subway products or from Subway status posts. They then enter the code on a separate contest page for a chance at prizes. Prior to that, they had a Footlong Nation Appreciation Sweepstakes, which worked the same way.
Additional features on the page include a "Fresh Buzz," where users can see special offers in their area, and "The Flavorizer," which allows users to build their own breakfast sandwich or see other creations that other fans have built.
12. The National Basketball Association Number of "likes": 13.1 million People talking about this: 372,075 Facebook page: http://www.facebook.com/nba
The National Basketball Association has had a rocky 2011, with a lockout threatening the season. This didn’t stop the organization from being the most “liked” sports brand in the world, however, beating out football (5.5 million "likes" for the National Football League), baseball (1.2 million “likes” for Major League Baseball) and hockey (2.3 million for the National Hockey League).
The NBA's fan page offers a range of features, including videos and commentary, NBA-related photos and the ability to purchase NBA merchandise on Facebook. It also allows users to "check in," another feature that will contribute to its “people talking about this” number, where users can chat, earn badges and enter contests to win prizes.
11. Zara Number of "likes": 13.35 million People talking about this: 65,793 Facebook page: http://www.facebook.com/Zara
Zara, the Spanish clothing and accessories retailer, has successfully managed its Facebook presence and generated more than 13.35 million fans. Zara’s page features several tabs that include “The Mood,” “This Week,” “Lookbook,” “Mobile,” and “Join Fashion,” offering fans galleries of the company’s styles, the ability to download the company’s iPod and iPad app and external links to non-Facebook Zara sites.
Zara’s wall posts — new photos and other additions to the page — generate upwards of 10,000 “likes” and several hundred comments each. The page also has a selection of sophisticated YouTube videos that enhance the look and feel of the Zara brand, with everything from displays from its seasonal collections to examples of how to connect with the brand via mobile devices.
10. Wal-Mart Stores Number of “likes”: 15.59 million People talking about this: 257,911 Facebook page: http://ww.facebook.com/wal-mart
One of the world's largest companies, Wal-Mart Stores is also one of the most “liked” on Facebook. The company’s page offers a range of activities, including Meal Solutions, which offers recipes and a meal planner.
Wal-Mart has several wall posts that feature shopping deals, gift suggestions, and the occasional photo that seems to be just for fun. Interestingly, the fun posts seem to do much better for engagement than the shopping-oriented posts. One example is a post of a kid wrapped up in toilet paper with the status “The prankster in my family is __.” It generated nearly 7,300 "likes" and 2,200 comments. Compared with an earlier post explaining an offer on coffee makers that gained 1,300 "likes" and only 153 comments, engagement looks to be much higher on more tangential, fun posts.
Although brands from many larger companies easily make it onto the list, one that might be surprising is Monster Energy, owned by Monster Beverage Co. The company’s page features a wide range of content, from high-octane videos of extreme athletes to a “Intern Search” that makes use of social networking to find potential interns.
Monster's page is full of posts that draw several thousand "likes" each, with clips of extreme sports action receiving the most engagement. The page also posts information about events and TV programs that Monster is affiliated with.
The highly popular Victoria's Secret brand doesn't merely draw crowds to its fashion shows, it has had huge success on Facebook. In early December, the company began a daily offer to give away 100,000 gift cards valued from $10 to $500 exclusive to its Facebook fans. Prior to this promotion, Victoria's Secret's “people talking about this” hovered around 170,000, but skyrocketed above 380,000, signaling a huge increase in engagement. Over this time, it also added more than 200,000 fans.
The company began using the page to promote its fashion show in late November, offering fans the opportunity for exclusive updates. The page also features videos of models, sneak peeks on in-store deals, and computer screen wallpaper available for download. Posts on the page's wall are highly engaging, drawing as much as 26,000 “likes” for new images and 14,000 for new videos. Victoria's Secret also gives fans the opportunity to send gift cards to friends through the page, directly encouraging its fans to purchase more of the company's products.
Click HERE to see the rest of the world's most 'liked' brands.
Falling coal prices threat to Indonesia Rupiah: Barclays
KV Prasad Jun 13, 2022, 06:35 AM IST (Published)
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Summary
The Indonesian Rupiah has been under pressure since the beginning of the year, falling close to 4%, as investors look to exit riskier assets.
The Indonesian Rupiah has been under pressure since the beginning of the year, falling close to 4%, as investors look to exit riskier assets.
Going forward, analysts warn of further downside for the currency with one saying that falling coal prices pose the biggest threat.
Indonesia is the world`s biggest exporter of thermal coal with nearly 90 percent of the so-called “black gold” sold to other Asian countries. Fears of a slowdown in China have weighed on coal and other commodities, with Newcastle coal prices down USD 10 a ton since March.
According to a report from Barclays, this could translate into trouble for Indonesia. “We estimate that for each fall of USD 10 per ton in coal prices, other things being equal, Indonesia`s current account deteriorates by 0.1% of GDP. For 2012, we project a current account deficit of 0.5% of GDP,” the report said.
Indonesia`s current account deficit widened for the second straight quarter in the first three months of this year to USD 2.89 billion, largely because of a sharp fall in export revenues, according to data from Bank Indonesia.
Coal currently makes up 14% of Indonesia`s total exports, up from 2% back in 2000.
The weak current account position is weighing on the currency, says Barclays, which has revised down its 12-month price target for the Indonesian rupiah to 9,000 against the US dollar from 8,800 earlier.
The investment bank also warned that recent foreign ownership caps on mining companies and proposed new rules that would limit the maximum stake of single shareholders in the country`s banks from 99% to below 50% could weigh on foreign direct investment, and in turn hurt the rupiah.
Indonesia`s central bank denied Monday that it was looking to impose capital controls, but said it was studying other policy options to manage rupiah and dollar liquidity.
Nizam Idris, Head of Strategy, Fixed Income and Currencies at Macquarie told CNBC`s “Cash Flow” on Monday that foreign outflows from Indonesia could pick up pace and that he would stay away from the rupiah in the near-term.
“We haven`t seen a massive outflow aside from last week when that whole week`s outflow was equivalent to the net inflow for the entire year. So for me it`s just beginning to show some panic and there`s still a lot of uncertainty,” he said.
Copyright 2011 cnbc.com
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