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Taiwan to allow investments in Chinese markets
August 4, 2010--Taiwan's government is set to allow its insurers to invest in Chinese financial instruments for the first time, a sign of how improving cross-strait relations are yielding economic benefits for businesses.
The Financial Supervisory Commission, Taiwan's financial regulator, said in a statement late on Tuesday that it planned to allow qualified insurers to invest up to 10 per cent of their overseas investment limit in Chinese stocks and up to 5 per cent of the limit in bonds. Insurers will also be allowed to invest in host of other Chinese financial instruments including Treasury bills and exchange-traded funds
The relaxation is a boon for Taiwan's insurers, who have had a tough time generating meaningful returns in the past because the local market is relatively mature and intense competition has sparked price competition that has eroded profitability.
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Source: FT.com
SGX commodities and derivatives activity grows in July
August 3, 2010--Singapore Exchange (SGX) said today that derivative and commodities trading grew in July.
Securities Market
Securities daily average trading value picked up into the new financial year, up 16% in July from a month earlier. Exchange traded funds were active, with trading value up 86% from a year earlier.
The total number of listed securities as at end-July was 767 from 755 a year ago.
Derivatives and Commodities Market Futures and Options average daily trading volume rose 8% from a year earlier as options volume increased 71%. S&P CNX Nifty futures volume was up 35%.
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Source: The Edge
DB Index Research -- Asia-Pacific Weekly ETP Market Review
August 2, 2010--Overview
There are 227 equity based ETFs in the Asia Pacific region with 320 listings across 12 countries and 15 exchanges. Japan has the largest market share by AUM accounting for 38.03% of the whole market, whilst Hong Kong has the largest market share by turnover with 34.59%.
There were two new listings last week. Nikko AM listed one new ETF and Woori AM listed one new Money Market ETF.
Turnover
Monthly average daily turnover rose 2.4%in the last week. Turnover for the previous week was USD 843m. The largest ETF by turnover was the iShares Asia Trust - iShares FTSE/Xinhua A50 China Tracker issued by BlackRock with USD 196m accounting for 23.3% of total turnover.
Assets Under Management
AUM rose 4.7% in the previous week. AUM as of July 30th was USD 68.3bn. The largest ETF by AUM is the iShares Asia Trust - iShares FTSE/Xinhua A50 China Tracker managed by BlackRock with AUM of USD 7.5bn.
To request a copy of the report
Source: DB Index Research
China closer to becoming second-largest economy
July 30, 2010--A senior Beijing official’s reference to China as the “world’s second-largest economy” has sparked excited speculation that Asia’s new powerhouse may have already reached a long-looming milestone by surpassing Japan.
China’s rapid recent growth has made it increasingly likely that its gross domestic product, in US dollar terms, will be larger this year than Japan’s. However, the vagaries of international currency movements mean such a result is far from assured.
Observers eagerly awaiting what will be a symbol of shifting global economic power on Friday seized on a remark by Yi Gang, director of the State Administration of Foreign Exchange, about China’s growth prospects.
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Source: FT.com
Post-Crisis, China Faces Challenges of Success
Double-digit growth predicted for China
Revaluation of China currency important for rebalancing, says IMF
Warnings against rising housing and asset prices
July 29, 2010--China’s skillful response to the global financial crisis has blunted the worst of the downturn, but IMF economists say trade and current account surpluses must be prevented from reasserting themselves as the global economy recovers and China’s stimulus is withdrawn.
In its regular assessment of one of the world’s leading economies, the IMF said China’s “quick, determined, and effective policy response” meant it was now spearheading the global recovery.
In an interview with IMF Survey online, the Fund’s lead economist on China, Nigel Chalk, said that despite the global slump, the country’s economy had posted an impressive performance.
IMF Survey online: China’s future economic outlook is fairly rosy, according to the IMF, and the Fund is now calling for a gradual withdrawal of stimulus measures. Can you explain how you have come to that conclusion?
view the IMF’s China report
Source: IMF
Fitch downgrades Vietnam’s credit rating
July 29, 2010--Fitch, the credit rating agency, yesterday downgraded Vietnam’s sovereign debt, sparking rare criticism from the Asian Development Bank and other analysts who said the country’s economy was looking up
The rating was downgraded from BB- to B+, which is four steps below investment grade, with a stable outlook. Moody’s Investors Services and Standard & Poor’s have left their ratings unchanged with a negative outlook.
“Vietnam’s sovereign creditworthiness has deteriorated on the back of weaker external finances and rising external financing requirements amid an inconsistent macroeconomic policy framework, a highly dollarised economy and a weak banking system,” said Ai Ling Ngiam, director at Fitch’s Asia sovereign team.
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Source: FT.com
KRX to list Mini Gold Futures on September 13, 2010
July 28, 2010--Taking into consideration the time required for the member companies to develop or upgrade their system, the Korea Exchange (“KRX”) decided to launch the trading of Mini Gold Futures, the first mini-sized futures contract in Korea, on September 13, 2010.
Trading unit of Mini Gold Futures is 100g of refined gold with purity of 99.99%. Trading hours is 09:00~15:15 from Monday to Friday and the same hours applies on the last trading day.
Last trading day is the third Wednesday of each settlement month and T+2 settlement scheme applies. Final settlement is made by cash and final settlement price is determined by converting the London Gold AM Fixing Price into price per gram and UK Pound into Korean Won. Position limit of 3,000 contracts is set to prevent the risks of settlement default and unfair trading.
KRX expects that Mini Gold Futures provides effective risk management tool to small-scale gold wholesalers and retailers, manufacturers and retail gold investors. It is also expected that it would lure the demand for overseas gold futures by Korean investors into Korea and the publication of real-time price of Mini Gold Futures would enhance the transparency of local gold market. (KRX)
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Source: Korea Exchange (KRX)
IMF gives ground on yuan exchange rate debate
July 28, 2010--The International Monetary Fund has chosen not to call the yuan “substantially” undervalued, a move that recognizes China’s efforts to free up its exchange rate and avoids friction with an increasingly influential shareholder.
The summary of an annual review of China’s policies omitted the contentious word, used by IMF Managing Director Dominique Strauss-Kahn as recently as June, which has long riled Beijing. Several members of the IMF’s 24-member executive board believed the Chinese currency was too cheap, the fund said. But others said a structural reduction in the balance of payments surplus was already unfolding thanks to past steps to boost consumption, while others took issue with an assessment by IMF staffers that the yuan was substantially undervalued
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Source: Todays Zaman
India raises interest rates, more tightening seen
July 27, 2010--India’s central bank raised interest rates more forcefully than expected on Tuesday to fight inflation that is on track to hit double digits for a sixth straight month, setting the stage for more policy tightening.
One-year overnight interest rate swap rates jumped after the Reserve Bank of India (RBI) notched up its fourth rate rise this year and said it was “imperative” to normalize policy in line with the economy’s growth and inflation.
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Source: Todays Zaman
India plans tough stress tests of banks
July 27, 2010--India plans to start conducting twice-yearly stress tests on its banks, following in the footsteps of financial regulators in the US and Europe.
The Reserve Bank of India said on Tuesday that it had conducted rudimentary stress tests during the global financial crisis to check credit and interest rate risk. The bank said it would undertake more sophisticated tests in the future to build confidence in the country’s banking system
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Source: FT,com
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