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Asian Market Snapshot: Stocks Rise on Speculation the BoJ Will Ease Monetary Policy

A report by the Sankei newspaper indicated the Bank of Japan is considering increasing the size of its emergency credit program to US$351 billion or 30 trillion yen and lengthening loans to 6-month terms from the current 3-month terms in order to lower longer term rates. This report sent Asian markets trading higher all throughout the day as investors speculate on an easier monetary stance. (See RGE Critical Issue: Will They Won't They? Is it Time Japan Intervened to Weaken the Yen?Yen Trends: How Has the Yen Been Behaving?). Further supporting the markets' rally was Applied Materials stronger than expected profit forecast. The semiconductors builder said its profit for the current period will exceed analysts’ estimate of 26 cents a share by 2 to 6 cents. The MSCI Asia Pacific Index gained 0.6% to 119 while the MSCI ASIA APEX 50 advanced 0.9% to 753.…

Foreign Credit for MENA?

Although lending by foreign banks to the region is much slower than in the boom years, the increase in loans in Q1 is a sign of stabilization. BIS data show that net lending from European banks to the MENA region crept up in Q1 2010, led by loans to Saudi Arabia and Qatar, which received US$8 billion and US$3 billion, respectively. We see it as no coincidence that these countries also account for the most significant lending growth in the GCC. The availability of foreign funds, along with continued government fiscal expansion, seems to have helped ease domestic credit conditions, support domestic liquidity and fuel a revival in equity markets early in the year. We expect that the pace of inflows cooled in Q2 2010 given the generalized correction in emerging and frontier markets and selloff in local markets, but on aggregate credit should continue to flow to those countries that have the strongest domestic demand, either private or government financed.…

Asian Market Snapshot: Most Stocks Rise on U.S. Industrial Production and Strong Corporate Earnings

Asian markets traded higher all throughout the day on stronger than expected U.S. industrial production data. U.S. industrial production unexpectedly rose 1% in July led by auto manufacturing, beating expectations of a 0.5% increase. (See RGE Critical Issue: U.S. Industrial Production Rises; Regional Surveys Continue to Show Weakness). Japanese auto and technology companies also posted stronger than expected earnings.  The MSCI Asia Pacific Index gained 0.2% to 118 led by Australian banks. The MSCI ASIA APEX 50 declined 0.3% to 746.…

Asian Market Snapshot: Most Stocks Rise on Gains in Australian Banks and Hong Kong Developers

In Asia ex-Japan, a rally in Australian banks and Hong Kong developers helped lift stocks higher. Minutes of the Federal Reserve Bank of Australia August meeting fueled speculation that policymakers will not hike rates, rallying banks shares. The minutes also said banks’ loan losses seem to have peaked. In Hong Kong a successful government land sale sent developers higher. In Japan however, stocks remained under pressure on concern about Japanese growth. (See RGE Critical Issue: Japan Stuck in Transition: GDP Growth of 0.4% y/y in Q2). The MSCI Asia Pacific Index gained 0.2% to 118 led by Australian banks. The MSCI ASIA APEX 50 rose 0.2% to 749.…

Asian Market Snapshot: Most Asian Stocks Fall on Declines in Japanese Growth

Asian markets came under pressure early in the trading hours on weaker than expected Japanese GDP growth. The Japanese economy expanded at an annualized 0.4% in Q2, less than the 2.3% economists surveyed by Bloomberg anticipated and sharply down from its 4.4% growth in Q1.  Export growth slowed and consumer spending stalled and as a result, GDP grew only 0.1% from Q1, the slowest among the six major economies, thus placing the Chinese economy number two after the U.S. The news sent regional stocks lower and the yen higher. (See RGE Critical Issue: Will Japan Intervene to Weaken the Yen?). Chinese stocks, however, gained after Agribank exercised its greenshoe option to sell 3.34 billion additional shares propelling its IPO to the world’s largest with $22.1 billion. The MSCI Asia Pacific Index fell 0.1% to 117.77 while the MSCI ASIA APEX 50 gained 0.06% to 746.59.…

Asian Market Snapshot: Most Asian Markets Fall as Concern over U.S. Q2 Earnings Trump Chinese Stocks Rally and M&A News

A drop in U.S. consumer sentiment and downbeat banks earnings took a toll on Asian investor sentiment early in the trading hours. The Reuters/University of Michigan U.S consumer sentiment index, reported on Friday after Asian markets closed, dropped in early July to 66.5 lower than economists anticipated. The Median estimate by economists in the Bloomberg survey was 74. (See RGE CI:U.S. Consumers: Not Yet Showing Optimism).   U.S. Banks earnings also disappointed after Citibank reported Q2 profits of US$ 2.7 billion down from US$ 4.3 billion a year ago and Bank of America also reported a 3% drop in profit to US$ 3.1 billion. (See RGE CI: Q2 2010 Bank Earnings: Wall Street Experiences Slowdown). The declines, however, were partially limited by rebounds in Chinese shares and news of M&A activities in Australia. A consortium by TPG and Carlyle outbid KKR in a bidding war for Healthscope, Australia’s 2nd largest private hospital chain. The MSCI Asia Pacific index fell 0.6% to 116 while the MSCI Asia Pac ex Japan slumped 1% to 390.89. The MSCI Asia Apex 50 declined 0.8% to 722.…

Asian Market Snapshot: Stocks Fall as Investor Sentiment Weakened on Concern over U.S. Recovery

After Asian markets closed yesterday the Federal Reserve Board reported a largely flat U.S. industrial output for the month of June. The index was up 0.1% m/m due to a 2.7% gain in the production of utilities. Manufacturing production however fell 0.4% m/m, driven by a 0.7% decline in the manufacturing of non-durables. (See RGE CI: U.S. Industrial Production Softens).  Data released today in the U.S. showed CPI ex food and energy up 0.9% y/y in June. Google’s Q2 earnings also dented investor sentiment. The company reported an EPS ex-extraordinary items of US$ 6.45 below analysts’ estimate of US$ 6.52. The MSCI Asia Pacific index fell 0.7% to 117 while the MSCI Asia Apex 50 declined 0.61% to 727.18. In Japan, stocks tumbled as astronger yen dragged Japanese exporters lower. The NIKKEI 225 fell 2.86% to 9,686, ending the week 2.4% lower.Sony, with 22% exposure to the U.S., dropped 5% whileFanuc lost 4.9%.…

Asia Market Snapshot: Stocks Fell on Concern over Economic Recovery as China slows and U.S. Fed Cuts Growth Forecast

After Asian markets closed yesterday a series of economic releases in the U.S., in Europe and today in China pointed to a softer recovery, which markets chose to ignore in the past few days and instead focused on strong corporate earnings. The U.S. Census Bureau reported a more than expected 0.5% decline in U.S. June retail sales. (See RGE CI: U.S. Retail Sales: Consecutive Declines Reveal Weakening Consumer Spending). U.S. mortgage applications also fell 3%. Minutes from the Fed meetingalso showed board members increasingly concerned over the recovery. The Fed cut its forecast for the year to 3%-3.5% from 3.2%-3.5%. (See RGE CI: FOMC: Signals of Caution, Growth Estimates Revised Lower). Adding to the pressure, a separate report showed European industrial production in May increased 0.9%, less than the 1.3% growth economists expected. And today, data released in China, showed Chinese GDP growth of 10.3%y/y in Q2, less than the 10.5% expected by economists and the 11.9% in Q1. Industrial production grew at 13.7% y/y versus expectations of 15.1% y/y. Inflation data (both PPI and CPI) came in weaker than expected. (See RGE CI: Chinese Growth Decelerates in Q2: How Much Will it Slow in 2010?). In contrast to these lackluster releases, BoJ kept its interest rate unchanged at 0.1% and raised its view for the country’s economic growth. The Bank raised its forecast to 2.6% growth this year from 1.8%.…

Asia Market Snapshot: Asian Stocks Rise on Intel Sales and Singapore’s Growth Forecast

Intel Corp, the world biggest semiconductor manufacturer, reported yesterday Q2 sales of US$10.8 billion, beating analysts’ estimates of US$ 10.3 billion amid increasing global semiconductor capex. Intel also forecasted 66% gross profit margin for the year and Q3 sales of US$11.6 billion, topping expectations of US$10.9 billion.ASML, Europe’s largest semiconductor equipment maker, also reported Q2 net income of EUR 239 million, beating analysts’ estimates of EUR203million. The company raised its full year sales forecast to US$4.8 billion. The strong performance in the technology sector helped lift Asian stocks. Singapore also added to market optimism as it raised this year’s economic growth forecast to 13-15%. The MSCI Asia Pacific index rose 1.4% to 117.61 while the MSCI Asia Apex 50 gained 1.11% to 739.61.…

Asia Market Snapshot: Asian Stocks Fall as China Reaffirms Limiting Property Market Speculation

The Chinese Ministry of Housing and Urban Development reaffirmed its commitment to enforcing policies preventing speculative real-estate investment. Separately, the China Banking Regulatory Commission also said it made no changes to its policies on home loans. Stocks fell on the news reversing yesterday’s gains fueled by speculation China may be relaxing its tightening measures. (See RGE Critical Issue: Chinese Property Regulations: Backing Away from Austerity?). The MSCI Asia Pacific index fell 0.3% to 115.76 while the MSCI Asia Apex 50 declined 0.61% to 731.…