Month: August 2015

Asian shares mixed ahead of central bank decisions

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Asian shares traded mixed early Tuesday as investors awaited key central bank decisions in the region.

Twenty out of 21 economists polled by Reuters expect the Reserve Bank of Australia (RBA) to hold its cash rate at a record low of 2 percent at its meeting Tuesday as well as forecasting rates will stay steady through 2016. Analysts surveyed by Reuters also expect the Reserve Bank of India (RBI) to stand pat on its key repo rate at 7.25 percent, with retail inflation at an eight-month high.

A negative handover from Wall Street likely also dampened sentiment. US stocks ended lower as tumbling oil prices dragged down energy shares and after lackluster economic data from China.

The Dow Jones Industrial Average slipped 0.5 percent, while the S&P 500 and the Nasdaq Composite were about a quarter of a percent lower.

Shanghai Comp flat

China’s Shanghai Composite index opened near the previous close of 3,622, slightly stabilizing from Monday’s plunge on the back of renewed concerns over the world’s second-largest economy.

Meanwhile, authorities have stepped up their crackdown on short-selling of shares, with the two main stock exchanges unveiling new rules that would make it even more difficult for speculators to profit from hourly gyrations in stock prices.

In other news, state margin lender China Securities Finance Corp. has injected 200 billion yuan (USD 32.21 billion) since July into five newly-launched mutual funds, the official China Securities Journal reported on Tuesday.

In Shanghai, heavyweight PetroChina rose 1 percent following news that the company won the dismissal of a US class-action lawsuit arising from an alleged bribery scheme.

Nikkei sheds 0.1 percent

Japan’s Nikkei 225 index nudged down in early trade.

Among decliners, exporter stocks such as Toyota Motor and Panasonic eased more than 1 percent each. Construction equipment maker Komatsu and Hitachi Construction Machinery extended sharp losses to fall more than 2 percent each, as Monday’s weak manufacturing activity data fueled fresh concerns over the Chinese economy.

Outperforming the bourse, Suzuki Motor rallied 4.2 percent on the back of news that US activist investment fund ThirdPoint has placed a bet on the Japanese firm, citing the automaker’s dominance in India.

ASX gains 0.7 percent

Australia’s S&P ASX 200 index reversed a brief negative open, as gains in the financial space offset losses chalked up by the miners and energy producers.

Australia and New Zealand Banking, Commonwealth Bank of Australia and National Australia Bank notched up between 0.4 and 0.9 percent.

Santos and Woodside Petroleum plunged 1.8 and 0.2 percent, respectively, as the fall in oil prices showed no signs of abating. Market bellwether BHP Billiton trimmed losses to 0.9 percent, while Rio Tinto and Fortescue Metals shaved off 0.3 and 1.1 percent, respectively.

Ahead of the RBA’s policy decision, the Australian dollar shed 0.3 percent to $0.7263 against the US dollar.

Kospi adds 0.4 percent

South Korea’s Kospi index enlarged gains by mid-morning trade, as early laggards recouped their losses.

Hyundai Motor and sister firm Kia Motors reversed a negative open to rebound 0.4 and 2.2 percent, respectively, shrugging off news that their combined auto sales fell 8 percent on-year in July.

Shares of Lotte Shopping pared a 2 percent loss to climb 1.8 percent, while Lotte Chemical recouped Monday’s losses to advance 2 percent, as a family feud surrounding the nation’s fifth-largest conglomerate continued in the backdrop.

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

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Greek stock market trades 19% lower after reopening

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The Athens stock exchange was trading around 19 percent lower by mid-morning on Monday, after falling nearly 23 percent after it reopened for the first time in five weeks.

Greek banking stocks were the worst hit with Alpha Bank, Attica Bankand Eurobank Ergasius, Bank of Piraeus and the National Bank of Greece were all trading around 30 percent lower – the daily volatility limit. Similar losses were seen in other stocks outside of the banking industry as well too.

There was further bad news for the Greek economy earlier, with flash manufacturing PMI figures for July down to 30.2 the lowest reading since Markit began compiling data in 1999.

To make matters worse, an economic sentiment index for Greece hit its lowest level since October 2012 in July with capital controls and political uncertainty weighing on sentiment, according to the IOBE think tank that conducted the survey.

Ahead of the much-anticipated open, traders were bracing themselves for a day of “losses and volatility.”

Greek traders told Reuters on Sunday that they expected a torrid day of losses when the stock market opened. Takis Zamanis, chief trader at Beta Securities, told the news agency that “the possibility of seeing even a single share rise in tomorrow’s session is almost zero.”

Meanwhile, the chairman of the Hellenic Capital Markets Commission told CNBC ahead of the open that his commission would monitor the market closely on Monday.

“We are not participants in the market, we are the supervisors and we are waiting to see what happens,” Kostas Botopoulos told CNBC Europe’s “Squawk Box” Monday.

“It’s very important that we’re opening, of course we expect pressure on the Greek stock market but we’ll be there to monitor what happens.”

He said there would be no state intervention into the market, saying: “We’re looking to see when it will stabilize, at which prices, and what the perception of the Greek market is from domestic and foreign investors.”

Focus for the day is likely to be on the losses among Greek banking stocks, which constitute around 20 percent of the main Athens index. Restrictions have been put in place to stem capital flight, however.

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

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Greek stock market trades 20% lower after reopening

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

The Athens stock exchange was trading around 20 percent lower by mid-morning on Monday, after falling nearly 23 percent after it reopened for the first time in five weeks.

Greek banking stocks were the worst hit with Alpha Bank, Attica Bank and Eurobank Ergasius, Bank of Piraeus and the National Bank of Greece were all trading around 30 percent lower – the daily volatility limit. Similar losses were seen in other stocks outside of the banking industry as well too.

There was further bad news for the Greek economy earlier, with flash manufacturing PMI figures for July down to 30.2 the lowest reading since Markit began compiling data in 1999.

To make matters worse, an economic sentiment index for Greece hit its lowest level since October 2012 in July with capital controls and political uncertainty weighing on sentiment, according to the IOBE think tank that conducted the survey.

Ahead of the much-anticipated open, traders were bracing themselves for a day of “losses and volatility.”

Greek traders told Reuters on Sunday that they expected a torrid day of losses when the stock market opened. Takis Zamanis, chief trader at Beta Securities, told the news agency that “the possibility of seeing even a single share rise in tomorrow’s session is almost zero.”

Meanwhile, the chairman of the Hellenic Capital Markets Commission told CNBC ahead of the open that his commission would monitor the market closely on Monday.

“We are not participants in the market, we are the supervisors and we are waiting to see what happens,” Kostas Botopoulos told CNBC Europe’s “Squawk Box” Monday. “It’s very important that we’re opening, of course we expect pressure on the Greek stock market but we’ll be there to monitor what happens.”

He said there would be no state intervention into the market, saying: “We’re looking to see when it will stabilize, at which prices, and what the perception of the Greek market is from domestic and foreign investors.”

Focus for the day is likely to be on the losses among Greek banking stocks, which constitute around 20 percent of the main Athens index. Restrictions have been put in place to stem capital flight, however.

Craig Erlam, senior market analyst at currency trading platform OANDA, said the banks would be key for investors.

“The Greek stock market is likely to suffer significant losses today, led by the banks which have been hit considerably by the events of this year and now need to be recapitalized at the very least,” he said in a note Monday.

The rules

Local investors will face restrictions that reflect the continuing capital controls on Greek banks that limit withdrawals to 60 euros a day. This means that domestic investors can only buy shares with fresh money from abroad or cash they have to hand, Reuters reported last week. They can also buy shares with money coming from security sales or dividends or cash remaining with their security firms.

Foreign investors may trade freely, however.

The reopen comes after a prolonged period of financial uncertainty in Greece. The stock market shut when capital controls were imposed on Greek banks at the end of June, when it looked increasingly likely that Greece was about to go bankrupt and leave the euro zone.

An eleventh-hour deal between the Greek government and lenders over a third bailout program for Greece worth 86 billion euros was agreed, however, pulling the country back from the brink of an unprecedented “Grexit” from the single currency union. Greek banks then reopened on July 20.

Read More: Greece’s Tsipras on shaky ground, warns of elections

Although the finer details of a bailout are still being hammered out between lenders, the country is deemed to have stabilized enough for the stock market to reopen. Market analysts warned that Monday was likely to be a day of losses, however.

“While it would be easy to suggest that today’s reopening of the Greek stock market is a key step on the road to some form of normalization, it is likely to be anything but,” according to Michael Hewson, chief markets analysts at CMC Markets, who warned of “volatility and losses.”

Uphill struggle

Given that the International Monetary Fund (IMF) – one of the country’s lenders- has threatened to pull out of a third bailout package without debt relief granted to Greece, the bailout itself is looking increasingly shaky. Countries like Germany oppose debt relief for Greece, fearing that it would set precedence for other indebted euro zone countries.

Read More: Can the Greek bailout survive without the IMF?

Time is of the essence for Greece, however, as it needs a bailout to be agreed (and funds disbursed) before a 3.2 billion euro debt repayment is due to the European Central Bank on August 20.

Against such an uncertain backdrop, analyst Hewson pointed out that Greece still faced an uphill struggle.

“Aside from the fact that we could well see some big losses (at the reopen today), there is the small matter that not only are the internal politics in Greece likely to remain difficult it is also likely to be extremely problematic to reconcile the positions the divergent positions of the IMF and Germany on debt relief, particularly given the proximity of the next debt deadline on the 20th August.”

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

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Caixin China PMI for July surprises by dropping to 2-yr low

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

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

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Asia fall as soft energy prices, final Caixin PMI weigh

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

Asian stocks stumbled early Monday, as weaker energy prices and fresh manufacturing data out of China sapped risk appetite.

The final reading for Caixin China purchasing managers’ index (PMI) for July came in at 47.8, lower than the preliminary reading of 48.2 and marking a two-year low.

The figure also comes in below the official PMI figure released by the statistics bureau over the weekend. Growth at big manufacturing firms unexpectedly stalled last month with the official PMI standing 50.0 in July, compared with the previous month’s 50.2 and below a Reuters’ forecast of 50.2, as demand at home and abroad weakened.

A preliminary Caixin/Markit survey released earlier this month showed activity at smaller factories contracted by the most in 15 months. The index fell to 48.2 in July, coming in well below the 49.7 forecast from a Reuters poll and the 50-mark separating growth from contraction.

Wall Street finished mildly lower on Friday, the final day of trade for July, as investors digested missing in energy corporate earnings and soft US data that could push an initial rate hike further out. According to government data, the second-quarter employment cost index recorded its slowest quarterly pace of growth on record.

Mainland markets down

China’s Shanghai Composite index plummeted 1.6 percent, with heavyweight PetroChina leading the slide.

The oil and gas company fell more than 3 percent, while Sinopec and China Oilfield Services dropped 1.3 and 0.7 percent, respectively.

Among the country’s other indexes, the CSI300 index lost 1.2 percent as well, while the smaller Shenzhen Composite eased 1.5 percent. Hong Kong’s Hang Seng index tracked its mainland peers to head 1.6 percent lower.

Ahead of the release of second-quarter earnings, shares of HSBC in Hong Kong sagged 0.2 percent.

Nikkei loses 0.7 percent

Japan’s Nikkei 225 index drifted lower as softer oil prices and looming PMI data from China dampen risk appetite.

JX Holdings sagged 4.5 percent, while Showa Shell and Inpex lost 1.7 and 2.6 percent, respectively, as US crude fell 0.64 percent at USD 46.82 a barrel in early Asian trade. Brent was down 0.77 percent to USD 51.81 a barrel.

Stocks with China exposure were on tenterhooks ahead of the data release from the mainland; construction equipment makers Komatsu and Hitachi Construction Machinery eased 1.6 and 1.2 percent, respectively.

ASX slips 0.4 percent

Australia’s S&P ASX 200 index was on course to break a three-day winning streak, with investors dumping resources shares on the back of falling commodity prices.

Santos and Oil Search dropped 0.6 and 2 percent, respectively, while Woodside Petroleum sagged 1 percent. Among iron ore miners, BHP Billiton shed 0.9 percent, while Rio Tinto dropped 0.9 percent.

Gold producers were mixed as gold trimmed off 0.26 percent early Monday; Newcrest Mining and Evolution Mining moved down 1.7 and 0.3 percent, respectively, but Alacer Gold surged 6.5 percent.

Kospi drops 0.9 percent

South Korea’s Kospi index doubled losses an hour into trade, on the back of weaker blue chips. The index’s heaviest-weighted stock Samsung Electronics fell 1.3 percent, while Hyundai Motor tanked 3 percent.

Energy counters were also among the early-trade laggards; SK Innovation and S-Oil plunged more than 4 percent each, while LG Chemreceded 2.8 percent.

However, Shinsegae, SK Telecom and LG Display helped to offset some losses, by rising between 1.2 and 2.9 percent.

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

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow