Metrotvnews.com, Washington: The Federal Reserve dalam pertemuan Komite Pasar Terbuka Federal (FMOC) memprediksikan ekonomi Amerika Serikat (AS) akan tumbuh sebesar 2,1 persen pada tahun ini.
Namun demikian, bank sentral yang digawangi oleh Janet Yellen tersebut menurunkan proyeksi pertumbuhan ekonomi AS untuk 2016 menjadi 2,3 persen dari perkiraan sebelumnya yang dibuat pada Juni sebesar 2,5 persen.
Reuters melansir, Jumat (18/9/2015), komite juga menurunkan proyeksi inflasi dalam dua tahun mendatang, di mana pada tahun depan diperkirakan sebesar 1,7 persen dan 1,9 persen untuk 2017 kendati masih berada di bawah target kebijakan The Fed sebesar 2,0 persen.
Secara keseluruhan, proyeksi terbaru Fed ini mencatat pertumbuhan produk domestik bruto (PDB) AS yang lebih lambat, pengangguran rendah, dan inflasi yang rendah. Kondisi tersebut menunjukkan bahwa kekhawatiran yang disebut stagnasi sekuler dapat “mengguncang” kalangan pembuat kebijakan.
Fed juga memperkirakan tingkat pengangguran melemah dari perkiraan sebelumnya. Tingkat pengangguran bakal terpukul di 4,8 persen tahun depan dan akan berada pada tingkat itu selama tiga tahun.
Selain itu, suku bunga The Fed juga diproyeksikan bergeser ke bawah, dengan tingkat dana federal jangka panjang terlihat di level 3,5 persen, dibandingkan dengan pertemuan kebijakan terakhir sebesar 3,75 persen.
Pejabat Fed seperti anggota dewan Jerome Powell dan Presiden Fed Atlanta Dennis Lockhart dalam beberapa bulan terakhir telah secara terbuka mengharapkan adanya kenaikan suku bunga pada September.
reuters: Slowing growth in emerging markets and currency fluctuations in anticipation of a U.S. interest rate hike may push third-quarter revenue and earnings estimates lower this month.
Wall Street expects a 3.4 percent decline in earnings for the S&P 500 .SPX for the quarter. Estimates have already fallen for 9 out of 10 of the benchmark index’s sectors so far this year, according to Thomson Reuters data.
S&P revenue is expected to fall 2.8 percent for the quarter, led by steep declines in the energy and materials sectors. As companies tend to revise guidance around the end of the quarter, estimates may become even less optimistic.
“Analysts will likely be pulling in their reins going into the quarterly reports and the pre-announcement season. This could happen fairly quickly,” said Tim Ghriskey, chief investment officer of Solaris Group in Bedford Hills, New York.
The dollar index .DXY, measuring the greenback against a basket of major currencies, has risen 0.8 percent so far this quarter after falling 2.9 percent last quarter. Ghriskey sees the currency’s strength hurting the competitiveness of U.S. exports against local products overseas and imports here, resulting in shrinking revenue and earnings for U.S. multinationals.
In addition, demand is likely slower in many overseas markets with slowing growth in China and recessions in Brazil and Russia hurting both revenue and earnings.
Jim Paulsen, chief investment officer at Wells Capital Management in Minneapolis, says that since the majority of S&P companies tend to beat earnings estimates every quarter, he will focus more on revenue than the bottom line, which can be tweaked with cost cuts and share buybacks to beat estimates.
But Paulsen is not optimistic about the coming quarter.
“It seems clear to me that top-line sales results will be a little disappointing again,” he said. “If you look at what’s going on in global economies, it doesn’t paint a real good picture of what top-line growth will be like. The question is: ‘How much of that is already factored in?'”
U.S. telecommunications .SPLRCL, which is mostly insulated from global markets, is the only S&P sector that has shown improving estimates for both third-quarter earnings and revenue.
With crude oil prices falling sharply, the energy sector .SPNY is faring the worst, with current expectations for a 62 percent earnings decline and a 33 percent revenue drop.
Analysts expect the materials sector .SPLRCM to report a 11.8 percent earnings decline due to falling commodities prices and a 10.4 percent revenue drop. They see earnings for industrials .SPLRCI, which have big overseas exposure, falling 4.9 percent and revenue falling 5 percent.
Many investors hope the equity market becomes less volatile after August’s sharp swings. But earnings weakness could make jittery market participants question valuations all over again.
“A lot of people think the market will come back. If we see fundamentals that challenge that story, that could be a very significant part of this earnings season,” said Paulsen.
(Reporting by Sinead Carew; Editing by Dan Grebler)
WASHINGTON (Reuters) nikkei asian review — U.S. job growth rose less than expected in August, which could dim prospects of a Federal Reserve interest rate hike later this month, even as the unemployment rate dropped to a near 7-1/2- year low of 5.1 percent and wages accelerated.
Nonfarm payrolls increased 173,000 last month as the manufacturing sector lost the most jobs since July 2013, after an upwardly revised 245,000 rise in July, the Labor Department said on Friday. It was the smallest gain in employment in five months.
The report, however, may have been tarnished by a statistical fluke that in recent years has frequently led to sharp upward revisions to payroll figures for August after initial weak readings.
A Reuters survey of economists had forecast nonfarm payrolls increasing by 220,000 last month, but economists warned that the model the government uses to smooth the data for seasonal fluctuations might not adequately account for the start of a new school year.
They said the data could be further muddied because of a typically low response rate from employers to the government’s August payrolls survey. A Labor Department official confirmed that the first payrolls estimate in August typically was revised higher.
Indicating that the slowdown in job growth was likely not reflective of the economy’s true health, payrolls data for June and July were revised to show 44,000 more jobs created than previously reported. In addition, average hourly earnings increased 8 cents and the workweek rose to 34.6 hours.
While the report may not change views that the U.S. economy remains vibrant amid volatile global financial markets and slowing Chinese growth, it could make Fed officials hesitant to push borrowing costs higher at a policy meeting on Sept. 16-17.
In the wake of a recent global equities sell-off, financial markets significantly scaled back bets on a September rate hike over the past month. But Fed Vice Chairman Stanley Fischer told CNBC last week it was too early to decide whether the stock market rout had made an increase less compelling.
Still, the labor market is improving and adds to a string of upbeat data, including figures on automobile sales and housing, that has suggested the economy was moving ahead with strong momentum early in the third quarter after growing at a robust 3.7 percent annual rate in the April-through-June period.
The jobless rate’s two-tenths of a percentage point drop took it to its lowest level since April 2008 and brought it into the range that most Fed officials think is consistent with a low but steady rate of inflation.
A broad measure of joblessness that includes people who want to work but have given up searching and those working part-time because they cannot find full-time employment fell to 10.3 percent, the lowest since June 2008, from 10.4 percent in July.
Jobs gains were spread across nearly all sectors of the economy in August. The energy and manufacturing sector, which are grappling with last year’s sharp drop in crude oil prices and a strong dollar, were the exception.
Construction payrolls rose 3,000 last month on top of the 7,000 jobs added in July. Mining and logging employment fell by 10,000 jobs last month. Manufacturing payrolls fell 17,000, despite robust demand for autos.
The increase in hourly earnings left them 2.2 percent above their year-ago level, still well below the 3.5 percent growth rate economists consider healthy. Some analysts think earnings are being held back by falling wages in oil field services.
But a tightening labor market and decisions by several state and local governments to raise the minimum wage should eventually translate into faster earnings growth and give the Fed confidence that inflation, which collapsed with oil prices, will move closer to its 2 percent target.
A number of retailers, including Walmart, Target and TJX Cos, have increased pay for hourly workers.
yahoo finance: The economy grew more than previously estimated in the second quarter on bigger gains in consumer and business spending that show the U.S. expansion got back on track. A surge in inventories also signals such strong growth will be difficult to sustain in the short run.
Gross domestic product, the value of all goods and services produced, rose at a 3.7 percent annualized rate, exceeding all estimates of economists surveyed by Bloomberg and up from the 2.3 percent the Commerce Department reported last month, figures showed Thursday in Washington.
More from Bloomberg.com: A Market-Moving Parade and an Insider Trading Appeal
American households, bolstered by gains in employment, rising home prices and cheaper fuel costs, will probably continue to spur the economy in the second half of the year. At the same time, a record surge in stockpiles represents another headwind for manufacturers already contending with a rising dollar and slumping emerging markets that have hurt exports.
“The economy was on firm footing coming into the second half,” Millan Mulraine, deputy head of research and strategy at TD Securities USA LLC in New York, said before the report. “The outlook going forward has more to do with global markets.”
More from Bloomberg.com: Claims for Jobless Benefits in U.S. Fall to Three-Week Low
The report comes as Federal Reserve policy makers debate whether growth is strong enough to withstand the first increase in the benchmark interest rate since 2006. While the job market has made strides since the recession ended, inflation remains well short of the central bank’s goal. Additionally, the global plunge in stocks also could argue for a delay.
The median forecast of 79 economists surveyed by Bloomberg called for a 3.2 percent gain in GDP, or the value of all goods and services produced. Forecasts ranged from 2.3 percent to 3.6 percent.
A report Thursday from the Labor Department showed fewer Americans applied for unemployment insurance benefits last week. Jobless claims declined by 6,000 to 271,000 in the week ended Aug. 22. That’s just above a four-decade low of 255,000 reached in mid-July.
More from Bloomberg.com: Oil Industry Needs Half a Trillion Dollars to Endure Price Slump
The latest GDP estimate is the second of three for the quarter, with the third release scheduled for late September when more information becomes available.
The economy grew at a 0.6 percent pace from January through March, restrained by harsh winter weather, a labor dispute at West Coast ports and a slump in energy-industry investment after oil prices dropped.
Thursday’s report also offered a first look at corporate earnings. Before-tax profits rose 2.4 percent in the second quarter, after dropping 5.8 percent in the prior period. From the same time last year, profits were down 0.5 percent.
The biggest driver of the upward revision for second-quarter GDP was a bigger gain in business investment, which included stronger readings on construction, research and development and inventories. The 8.6 percent advance in spending on intellectual property was the largest since the last quarter of 2007.
The surge in stockpiles is a double-edged sword because, while it boosted growth last quarter, companies will probably need to trim the amount of goods on hand from July through September, leading to cuts in production that will restrain GDP.
Stockpiles climbed at a $121.1 billion annualized pace compared with an initially estimated $110 billion, and added 0.2 percentage point to economic growth.
Following the first quarter’s $112.8 billion increase, it marked the biggest back-to-back gain in inventories since records began in 1947.
“It does raise the risk that at some point later in the year we might see a little bit of pullback in inventories” as companies cut production, Sam Coffin, an economist at UBS Securities LLC in New York, said before the report.
Household consumption, which accounts for almost 70 percent of the economy, grew at a 3.1 percent annualized rate, revised from an initial estimate of 2.9 percent and following a 1.8 percent advance from January through March.
Gains in consumers’ purchasing power cooled last quarter, with disposable income adjusted for inflation rising at a 1.3 percent rate from April through June after a 3.9 percent gain in the first quarter. The saving rate decreased to 4.8 percent from 5.2 percent in the first three months of the year.
Still, “the U.S. consumer is looking healthy,” Jennifer Lee, a senior economist in Toronto for BMO Capital Markets, said before the report. “Employment is strong. The housing recovery is going to continue.”
The report also included revisions to first-quarter personal income. Wages and salaries rose by $49.8 billion, revised up by $5.6 billion. They climbed by $47.7 billion in the second quarter.
Gross domestic income, which reflects all the money earned by consumers, businesses and government agencies climbed at a 0.6 percent annualized rate in the second quarter after a 0.4 percent advance, the report showed.
Government spending also was a standout last quarter, increasing at a 2.6 percent pace, the most in five years. State and local outlays increased at the fastest rate since late 2001.
Fed policy makers, considering raising the benchmark interest rate for the first time since 2006, are monitoring the global stock-market turmoil.
“From my perspective, at this moment, the decision to begin the normalization process at the September FOMC meeting seems less compelling to me than it was a few weeks ago,” New York Federal Reserve President William Dudley said Wednesday, cautioning it’s important not to overreact to short-term developments. He also described the economy as “performing quite well.”
Dudley said one important way that market volatility could influence the U.S. economy was though the so-called wealth effect, in the event that stock market losses lead Americans to cut back their spending. Another key channel is what happens to inflation, which has been running below the Fed’s two percent target for over three years.
NEW YORK – Kurs dolar Amerika Serikat (AS) menguat terhadap sebagian besar mata uang utama lainnya di tengah data ekonomi yang bervariasi.
Seperti dilansir Xinhua, Selasa (18/7/2015), survei sektor manufaktur di negara bagian New York (Empire State) yang dirilis oleh Federal Reserve AS Cabang New York pada Senin menunjukkan bahwa kegiatan usaha menurun untuk manufaktur-manufaktur di New York.
Menurut survei, indeks kondisi bisnis umum anjlok 19 poin menjadi minus 14,9, tingkat terendah sejak 2009 dan jauh di bawah konsensus pasar untuk kenaikan 4,75 persen.
Sementara itu, kepercayaan pengembang di pasar untuk rumah keluarga tunggal yang baru dibangun pada Agustus naik satu poin ke tingkat 61 pada Indeks Pasar Perumahan (HMI) National Association of Home Builders/Wells Fargo. Ini adalah angka tertinggi dalam hampir satu dekade.
Indeks dolar, yang mengukur greenback terhadap enam mata uang utama, naik 0,30 persen menjadi 96,813 pada akhir perdagangan.
Pada akhir perdagangan di New York, euro jatuh ke 1,1080 dolar dari 1,1119 dolar pada sesi sebelumnya, dan pound Inggris turun menjadi 1,5594 dolar dari 1,5651 dolar. Dolar Australia turun menjadi 0,7379 dolar dari 0,7380 dolar.
Dolar AS dibeli 124,43 yen Jepang, lebih tinggi dari 124,26 yen pada sesi sebelumnya. Dolar AS sedikit menurun menjadi 0,9769 franc Swiss dari 0,9773 franc Swiss, dan meningkat menjadi 1,3084 dolar Kanada dari 1,3076 dolar Kanada.
Sumber : OKEZONE.COM
China’s looming threat to the world
YASUHIRO GOTO, Nikkei senior staff writer
TOKYO — Seven years after emerging as the world economy’s savior, China now poses a major risk to global growth.
In September 2008, the collapse of Lehman Brothers Holdings triggered the global economic downturn, wreaking havoc across the world. The economic disaster is commonly known as the Lehman shock in Japan.
In November 2008, China announced a stimulus package worth 4 trillion yuan (about $585 billion at the time) to spur domestic growth, helping the world economy recover from the Lehman crash.
The fiscal stimulus package gave an additional boost to high-speed growth in the Chinese economy. In 2010, China overtook Japan to become the world’s second-largest economy, after the U.S., in terms of gross domestic product.
Around the same time, China also supplanted the U.S. as the world’s largest auto market. Since the 2008 global financial crisis, China has seen its influence over the world economy, including the financial markets and the manufacturing sector, grow sharply.
But the once red-hot economy is now on the cusp of structural recession and deflation.
The sharp decline in share prices on the Shanghai Stock Exchange in the past few weeks might be a precursor to the breakout of an economic crisis that originates in China and then spreads around the world.
There is certainly a growing risk of such an economic crisis — which could be called a “Xi shock,” after Chinese President Xi Jinping — erupting and dealing serious blows to the world economy.
Excess capacity problem
Excess capacity now besets various sectors of China’s economy.
Most of China’s manufacturing industries — including steel, petrochemicals, cement, household appliances, electronics equipment, automakers and solar panels — have excess production capacity. The country’s service industries, including department stores, shopping centers, restaurants and banks, are also facing problems.
China’s real estate industry and local governments are struggling with huge inventories of unsold residential and industrial properties together with vacant leasehold space and debt loads.
Weaker domestic consumption
In China, large-scale commercial retailers such as department stores have been closing in quick secession in recent months.
According to the China Commerce Association for General Merchandise, the total floor space of its member department stores shrank by 16 million sq. meters in 2014. This figure is roughly 160 times larger than the floor space of Japan’s biggest department store. For example, Beijing Wangfujing Department Store (Group), shut its outlet in Zhanjiang, Guangdong Province in 2014.
Although Chinese tourists continue to spend big in Japan, retail consumption on the mainland is cooling.
Lower operation rate
China’s steel industry, which accounts for half of steel production globally, saw its operation rate to plunge to less than 70% in 2014.
The Chinese government unveiled plans to slash the country’s annual crude steel production capacity by at least 100 million tons by 2017 in an attempt to prevent major domestic steelmakers from failing due to stiff competition.
The country’s once-booming auto industry is also losing steam, with year-on-year sales growth for the first five months of this year declining to 2.1%. Auto sales dropped for the second straight month in May on a year-on-year basis.
Some foreign automakers are reported to be operating plants at below 70% of capacity and struggling to boost sales through increased incentives.
“New normal” of slower growth
China continued to pursue high economic growth for years, even after the 2008 global financial crisis, apparently because it felt that its pride as an economic power would be damaged if its high growth slowed.
In the spring of 2014, the Xi administration declared a “new normal” of somewhat slower but stable growth in an apparent bid to restore health to the Chinese economy, even if it meant damaged pride.
But the Chinese economy now seems to be deteriorating at a faster pace than the Xi administration expected.
This comes even as China’s government has taken a series of measures to strengthen the slowing economy, including cutting interest rates and lowering the bank reserve requirement ratio as well as making fresh investments in railway and other infrastructure projects.
Chinese tourists continue to spend in Japan because the yuan remains stubbornly high against the yen, not because their economy at home is healthy.
The big question now is: How would the Xi shock actually shake the global economy?
Weaker demand for natural resources would likely send commodity prices into a tailspin. Excess inventories of various products in China, including steel, petrochemicals, consumer electronics and cars, would likely start to flow into other Asian markets. Consumption in China would also cool even further due to corporate bankruptcies and employment adjustments.
Companies in Japan, and elsewhere, need to become fully aware of the dangers posed by, and prepare for, the Xi shock if they want to continue to grow.
CPC Political Bureau outlines its goals for 13th Five-Year Plan
china daily: China will continue its focus on economic development and maintain the “medium-high growth rate” of its economy, China’s top leaders said at a meeting on Monday.
The country is aiming for a development pattern of “higher quality, efficiency, equality and sustainability”, said a statement issued after the meeting of the Political Bureau of the Communist Party of China Central Committee.
High on the agenda is the discussion of the 13th Five-Year Plan of National Development (2016-20).
“The five years from 2016 are a critical stage for building a moderately prosperous society in all aspects. The 13th Five-Year Development Plan will focus on realizing this goal,” the statement said.
As the last year of the 12th Five-Year Plan (2011-15) nears its final five months, the central government is devising a development policy for the 13th plan, the first under President Xi Jinping’s leadership.
The Political Bureau also announced that the 18th Communist Party of China Central Committee will hold its fifth plenary session in Beijing in October.
“China is entering a new normal of economic development and facing not only great strategic opportunities but complicated and tough challenges,” the statement said.
“New normal” suggests slower but more-sustainable growth. Last week the country posted a second quarter GDP figure of 7 percent, the same as the first quarter.
The country will carry on the transformation of government functions, enhance the rule of law and deepen opening-up in all areas, said the statement.
The CPC will strictly discipline itself and upgrade its capacity to govern, it added.
Liu Jipeng, director of the Capital Research Center at the China University of Political Science and Law, said it’s strategically important for leaders to place greater emphasis on the economy after their decisive victory in the nationwide anti-corruption crackdown.
He also said the country’s full-year target for economic growth is within reach thanks to new liquidity injections in infrastructure projects and initiatives for encouraging entrepreneurship and Innovation.
A number of economic indicators, including electricity output, consumption and export growth, have shown improvement in June, indicating the economy stabilizing, economists said.
A report from Goldman Sachs said, “The period of most aggressive policy easing is likely behind us, with some evidence of better growth in the past two months, but support will remain because strong sequential growth is needed the remainder of the year to come close to the official full-year growth target, and the government is likely concerned about the potential downside risks to growth from the equity market correction.”
GINI index (World Bank estimate)
Washington, July 15, 2015 (AFP)
US industrial production rose for the first time in three months in June on the back of higher utility output, but manufacturing remained flat, the Federal Reserve reported Wednesday.
Industrial output increased 0.3 percent in June, after declines of 0.2 percent and 0.5 percent in May and April, respectively.
The June pick-up in overall industrial production was driven by utilities, such as water and electricity, which rose 1.2 percent, and mining, up 1.0 percent.
Manufacturing, accounting for about three quarters of total industrial output, has been under pressure from tepid consumer spending and a stronger dollar weighing on exports. It was unchanged for a second straight month in June.
“The industrial production gains in June were the result of changes in prices and unusual temperature trends, not a change in demand for US manufacturing goods,” said Briefing.com in a research note.
Barclays analyst Jesse Hurwitz highlighted that with the June data, the second-quarter growth rate of total industrial output fell 1.4 percent, following a 0.1 percent gain in the first quarter, in the first quarterly contraction since the recession ended in June 2009.
“We continue to view this downturn as driven by the impact of a stronger dollar and cutbacks in the energy sector from the decline in oil (prices),” Hurwitz said in a client note.
“Looking ahead, we expect output for the sector to stabilize, but do not see a robust expansion as likely over the next few months.”
China’s Q2 economic growth steady at 7 percent
BEIJING — China’s economy posted 7-percent growth year on year in the second quarter of 2015, unchanged from the first quarter, the National Bureau of Statistics (NBS) announced on Wednesday.
The growth rate beat a median market forecast of 6.9 percent for the second quarter, as authorities cited “positive signs” in the economy.
Second-quarter GDP grew 1.7 percent over the previous quarter, NBS data showed.
The better-than-expected growth has come after the government’s bold moves in macro-control and adherence to structural reforms as the economy plateaus, NBS spokesperson Sheng Laiyun said at a press conference.
“Policies rolled out by central authorities to stabilize growth, boost reforms and restructuring, improve livelihoods and prevent risks have played significant roles for the economy,” Sheng said.
These measures included three cuts in both benchmark interest rates and banks’ reserve requirement ratio in the first half, and the government’s accelerated fiscal spending on infrastructure to shore up investment.
With these efforts, the national economy has stayed “in the proper range” in the first half as major economic indicators gradually recovered, indicating stabilization and improvement,” Sheng said, citing steady employment and price levels.
More than seven million new jobs were created in urban areas in the first half, with a target of 10 million for the year, while inflation rose only 1.3 percent during the period.
In the first half of the year, GDP hit 29.7 trillion yuan (US$4.9 trillion), up 7 percent year on year, according to NBS data.
During the same period, industrial output grew 6.3 percent year on year.
Sheng added that the annual industrial output growth has accelerated since April while fixed asset investment also rebounded in the past two months, reversing a previous slowdown.
“We think economic growth in the latter half of the year will most likely outperform that in the first half,” the spokesperson said, forecasting that government pro-growth policies in the first half will have more of an effect later this year.
RETAIL SALES UP
Retail sales grew 10.4 percent year on year to 14.16 trillion yuan (US$2.32 trillion) in the first half, the NBS said.
The growth was down 0.2 percentage point from the rate seen in the first quarter.
In June alone, retail sales went up 10.6 percent, accelerating 0.5 percentage point from May.
Online retail sales continued to be a bright spot, surging 39.1 percent year on year to 1.65 trillion yuan.
To steer the economy onto a more sustainable track, the government has been trying to drive domestic consumption and move away from an overreliance on investment and exports.
Consumption contributed 51.2 percent to GDP growth last year, three percentage points more than the previous year.
Fixed-asset investment grew 11.4 percent year on year to 23.71 trillion yuan (US$3.88 trillion) in the first half, official data showed.
In the first half, fixed-asset investment in the agricultural sector grew most rapidly, up 27.8 percent year on year, followed by 12.4 percent for the service sector and 9.3 percent for the industrial sector.
The calculation does not include fixed-asset investment by farmers. It includes projects with investment of at least 5 million yuan, as well as all property development projects.
China’s property investment continued to soften in the first half of this year, putting the sector, once a growth engine of the economy, under greater pressure.
Real-estate investment rose 4.6 percent year on year to 4.4 trillion yuan (US$708.8 billion) in the first half.
During the period, investment in residential housing climbed 2.8 percent from the same period last year.
New housing construction stood at 674.8 million square meters, plunging 15.8 percent from a year earlier, with construction on new residential houses diving 17.3 percent by area.
Sales of commercial housing went up 10 percent year on year to 3.4 trillion yuan.
New York, July 15, 2015 (AFP)
US stocks opened higher Wednesday following solid Bank of America earnings and a confirmation from Federal Reserve Chair Janet Yellen that an interest rate hike was still seen in 2015.
Five minutes into trade, the Dow Jones Industrial Average stood at 18,062.53, up 8.95 points (0.05 percent).
The broad-based S&P 500 rose 2.08 (0.10 percent) to 2,111.03, while the tech-rich Nasdaq Composite Index gained 12.07 (0.24 percent) at 5,116.96.
Bank of America jumped 2.7 percent after second-quarter earnings more than doubled to $5.3 billion on a big drop in legal costs.
Yellen said the Fed still planned to raise rates in 2015 due to the improving economy, though she warned that continued turbulence from Greece and China poses risks to the US growth picture.
BEIJING kontan. Bursa China kembali memerah pada transaksi perdagangan hari ini (15/7). Dengan demikian, bursa saham Negeri Panda ini sudah mengalami penurunan selama dua hari terakhir.
Data Bloomberg menunjukkan, pada pukul 12.30 waktu Tokyo, Shanghai Composite Index tergerus 2,4%. Sementara indeks saham-saham China di Hong Kong turun 1%.
Rupanya, pertumbuhan ekonomi China di kuartal II yang melampaui ekpekstasi pelaku pasar belum bisa menjadi katalis positif bursa China. Asal tahu saja, data yang dirilis pemerintah China menunjukkan, pertumbuhan ekonomi Negeri Panda itu tumbuh 7% pada kuartal kedua dibanding periode yang sama tahun lalu.
Pada kuartal pertama, pertumbuhan ekonomi China turun menjadi hanya 6,6% dan menjadi tingkat pertumbuhan ekonomi terendah sejak 2009. Penyebabnya antara lain lemahnya pasar properti dan anjloknya tingkat produksi manufkatur.
Namun, Beijing sudah merilis sejumlah kebijakan stimulus di tengah perlambatan tersebut.
“Data PDB yang lebih baik dari konsensus merefleksikan kenaikan yang tidak stabil pada aktivitas sektor finansial yang hanya akan berlangsung dalam jangka pendek,” tulis Julian Evans-Pritchard, ekonom China Capital Economics di Singapura.
Beijing, July 15, 2015 (AFP)
China’s economy expanded 7.0 percent year-on-year in the second quarter, official data showed Wednesday, as a slowdown in investment and trade weighed on growth in the world’s second-largest economy.
The figure announced by the National Bureau of Statistics matched the 7.0 percent expansion in the first three months of this year, and exceeded the median forecast of 6.9 percent in an AFP survey of 14 economists.
marketwatch: Investment bubbles always look so obvious in hindsight. But when you’re in the middle of one, it’s hard to fight the crowd, even if that little voice in your head tells you to run for the hills.
Why? Bubbles produce compelling narratives that give people reasons to believe. The Internet is changing everything. Housing prices never go down. Tulips are the most precious commodity on God’s green Earth, etc.
Now the same thing is happening again in China, a market that has had one huge bubble burst only recently. The Shanghai Composite index briefly topped 6,000 in October 2007 only to plummet to just above 1,700, a sickening 70% plunge in only 12 months.
But a mere seven years later, Shanghai is above 5,000 again, and the bulls say more gains lie ahead, even though China’s economy is slowing dramatically and some valuations already are stratospheric.
They’re counting on China’s central bank to keep cutting rates. It already has reduced them three times in the past six months. Sound familiar?
Also, the Chinese government has eased trading restrictions on foreign investors. On Tuesday, index provider MSCI said it “expects to include China A shares in its global benchmarks” once it works out some issues with Chinese regulators. A flood of institutional money would presumably follow.
This macro “story” has powered Shanghai 150% higher in the past 12 months. Shenzhen and other mainland markets with riskier, more speculative stocks have nearly tripled.
With the animal spirits unleashed, average Chinese investors are piling in. In a reverse of what happened in the U.S. in the 2000s, Chinese investors fleeing a busted housing market have thrown their money into stocks. Talk about going from the wok to the fire!
Consider these worrisome signs:
• China’s GDP growth slowed to 7% in the first quarter, the slowest since the Great Recession, and that figure may be overstated by 1 to 2 percentage points, according to Capital Economics.
• Analysts project earnings growth of companies listed on Shanghai and Shenzhen will be 7% in 2015, the lowest in three years, Reuters reported. The biggest culprits: banks grappling with a surfeit of bad loans
• ChiNext, an exchange focused on startups, is trading at 140 times last year’s earnings, “in the same league as Nasdaq … at the height of the dotcom frenzy,” The Economist wrote.
• According to one estimate, nearly 85% of China-listed companies are trading at higher multiples today than they did at the previous top in 2007.
• Margin debt is skyrocketing, up more than fivefold in a year to around 2 trillion yuan (about $320 billion), an “unprecedented” 8.9% of the market capitalization of the Shanghai and Shenzhen exchanges. “This could already be the highest level of margins vs. free float in market history,” wrote Macquarie, and perhaps the fastest increase in margin debt we’ve ever seen.
• From January 2014 through mid-May, 225 IPOs came to market on China’s A-share markets, with a mean price appreciation of 418% and trailing-12-month price-to-earnings ratio of 92, according to Morgan Stanley.
• In the four weeks after the government allowed investors to have more than one trading account, individuals opened 12.8 million new accounts. Chinese retail investors generate 90% of all trades, reports Barron’s, higher than the historical average of 80%.
Unfortunately, Chinese investors don’t seem to have learned from their mistakes in the last bubble, maybe because they’re not the same people. And the newbies are hardly sophisticated investors: The Economist cited a study that said more than two-thirds of them left school before the age of 15.
Meanwhile, the so-called “smart money” is cashing in its chips: Both Morgan Stanley and BNP Paribas recently turned bearish on Chinese stocks.
Jonathan Garner, Morgan Stanley’s chief Asia and emerging markets strategist, downgraded China stocks for the first time in more than seven years, citing “the weakest corporate profits since 2009.” “We’d like to recommend taking some profits,” he told Bloomberg.
I’d put it even more strongly. Back in October 2007, I called China’s stock bubble the Mother of All Manias and wrote:
“… Some day, as sure as the sun rises in the East every morning, this market will come crashing down around our ears.
“… Too many novices are engaging in what looks much more like gambling and speculation than long-term investing …
“Trust me, this can’t last — it never has. The only question is when it will end.”
I stand by those words today. If you’ve had the dumb luck — and don’t kid yourself that it’s anything else — to have made money in the latest China stock mania, I have five words of advice:
Get. The. Hell. Out. Now.
Howard R. Gold is a MarketWatch columnist and founder and editor of GoldenEgg Investing, which offers free market commentary and simple, low-cost, low-risk retirement investing plans. Follow him on Twitter @howardrgold.
Beijing, June 11, 2015 (AFP)
China’s industrial production, which measures output at factories, workshops and mines in the world’s second-largest economy, rose 6.1 percent year-on-year in May, the government said Thursday.
Retail sales, a key indicator of consumer spending, increased 10.1 percent in the same month, the National Bureau of Statistics said.
And fixed asset investment, a measure of government spending on infrastructure, expanded 11.4 percent on-year in the January-May period, the NBS said.
The industrial output figure came in at a three-month high and was marginally above the 6.0 percent median forecast in a poll by Bloomberg News.
The retail sales result matched the median forecast of 10.1 percent.
The data came as China’s economy has continued to slow in 2015 after growing at its weakest pace — 7.4 percent — in nearly a quarter century last year. In the first three months of this year gross domestic product (GDP) expanded 7.0 percent in January-March, the worst quarterly result in six years.
China’s authorities are trying to engineer a controlled slowdown as they seek to transform the country’s growth model to one whereby consumer spending becomes the key driver as opposed to heavy infrastructure investment.
But they fear too fast a deceleration and have carried out stimulatory measures including interest rate cuts to help ensure the slowdown doesn’t get out of hand.
Beijing – Tingkat paritas tengah nilai tukar mata uang Tiongkok renminbi atau yuan, menguat 23 basis poin menjadi 6,1150 terhadap dolar AS pada Kamis (11/6/2015), menurut Sistem Perdagangan Valuta Asing Tiongkok.
Di pasar spot valuta asing Tiongkok, yuan diperbolehkan untuk naik atau turun sebesar dua persen dari tingkat paritas tengahnya setiap hari perdagangan.
Tingkat paritas tengah yuan terhadap dolar AS didasarkan pada rata-rata tertimbang dari harga yang ditawarkan oleh pelaku pasar sebelum pembukaan pasar antar bank setiap hari kerja.
Beijing- Tingkat paritas tengah nilai tukar mata uang Tiongkok renminbi atau yuan, menguat enam basis poin menjadi 6,1173 terhadap dolar AS pada Rabu (10/6/2015), menurut Sistem Perdagangan Valuta Asing Tiongkok.
Di pasar spot valuta asing Tiongkok, yuan diperbolehkan untuk naik atau turun sebesar dua persen dari tingkat paritas tengahnya setiap hari perdagangan.
Tingkat paritas tengah yuan terhadap dolar AS didasarkan pada rata-rata tertimbang dari harga yang ditawarkan oleh pelaku pasar sebelum pembukaan pasar antar bank setiap hari kerja.
Editor’s Note: After GDP growth decelerated to a six-year low of 7 percent in the first quarter, the performance of the economy in the second quarter will be crucial in determining whether the annual target of “about 7 percent” can be achieved. Despite persistent downside pressure, positive signals have emerged this year indicating progress in restructuring and reform. China Daily invited a group of economists to provide insight into the country’s economy.
For the past four years we have been talking about how momentum loss in the Chinese economy is inevitable and will continue. This year the economy has continued on the trend, with growth slipping below 7 percent for the year.
Put plainly, the structural headwinds are just too big: Industrial performance and fixed-asset investment are still too highly correlated to policy and credit, the corporate sector is still deeply indebted, exports appear to be in for another average year, and consumption is too small a share of the economy to drive headline growth and faces its own challenges.
Looking at the latest data, it is clear that the first five months of the year were underwhelming. Luckily, in terms of market sentiment, we do think that anything above 6.6 percent year-on-year growth over the next few quarters (and of course the data point around that) is broadly priced in by markets. However, below this would be a big negative for emerging markets, like South Africa, and commodity prices. The problem is that getting the “new normal” to consolidate at this rate of expansion will need some material policy support, which Beijing is doing.
It is no surprise that the policy environment in China has shifted more decisively toward monetary easing and growth support over the past several weeks. We expect the effect of monetary, fiscal and administrative easing, coupled with favorable base effects, suggests that activity will probably bottom in the second quarter, and growth will stabilize in the second half of this year. We expect greater moves to come. For monetary policy, real rates are still elevated and weak loan demand is keeping a lid on credit creation. That means that much lower interest rates will be required to coax private businesses to revamp their forward-looking capital expenditures.
So far, new lending has not been matched by commensurate new deposit growth because funds are moving out of China or going into stocks. However, if done recklessly, the supportive measures will add to the existing problems, and contradict the longer-term reform agenda embodied in the administration’s November 2013 Plenum. We have not yet really seen the creative destruction necessary for altering incentives in the economy, and reshaping how land, labor and capital is allocated across the economy.
Looking at the broader reform agenda, we still have to start the painful process of corporate deleveraging. And now, a particular concern is the fact that nominal GDP growth appears to have dropped below the average lending rate, meaning that servicing existing debt will become more difficult. The problem is that Beijing is facing a trade-off between the near-term cyclical trend and the longer-term objectives of reform and restructuring.
China’s attempt to deal with local government finances is a case in point. Yes, converting the debt into longer-dated and cheaper debt will reduce debt-servicing costs for local authorities. However, when banks decide to buy bonds for any other reason other than the fair price of risk, then the plan goes against the idea of getting banks to embrace the market, and surely does nothing to eliminate moral hazard.
We are particularly worried that consumption growth presents a large (and so far ignored) downside risk for the Chinese economy. In April, retail sales growth slowed from 10.2 percent year-on-year in March to 10 percent year-on-year. Retail sales growth expanded by an average of 12 percent year-on-year in 2014, from 13.3 percent year-on-year in 2013.
Take-home pay has been compressed over the past six months as non-wage compensation has proven ripe for cost rationalization. Then there is the anti-corruption drive, which could mean getting tougher on expense claims. This source of income is material (especially in the public sector). It is not just about gifts or bribes; it also includes institutionalized subsidies and benefits.
And, this has been reduced a lot. If gray income is as much as $1 trillion (around one-fifth of total urban income) then even a 30 percent reduction adds slack in the economy and increases deflationary risks.
On that note, the Consumer Price Index came in at 1.5 percent year-on-year in April, up from 1.4 percent in March, buoyed by an uptick in food prices, which was well below the 2.5 percent target. China intends to ensure that the registered urban unemployment rate stays below 4.6 percent in 2015. For now, real wages are being used as the first line of defense against unemployment, presenting a big risk for spending, but news flow suggests that layoffs are starting in distressed sectors.
The biggest headache is trying to keep investment growth anywhere near previous norms. Last year, total fixed-asset investment was $8 trillion. So of course, even growing this by another 13 percent in 2015 is proving to be a challenge. The slowdown in investment spending from over 20 percent per annum in recent years is a healthy and necessary adjustment, and we expect that it has quite a bit further to go, but it makes it difficult for the broader economy to become unstuck.
Manufacturers, which accounted for one-third of total investment last year, are still battling with serious overcapacity, excess debt and lackluster demand. This is why we have seen 37 months of deflation at the factory gate. The producers simply do not have any pricing power and margins are evaporating.
More time is needed to work through inventories, induce consolidation and begin deleveraging. Then, given its size and linkages to the rest of the economy, the reality is the momentum loss in investment (and the economy) cannot stop until the housing market turns around.
The problem is that China’s property sector is significantly overinvested, especially in third-and fourth-tier cities, which have accounted for the majority of new housing in recent years. To be fair, in terms of price, this soft underbelly of China’s economy is firming up, at least in the first-and second-tier cities.
The impact of a host of support measures since late 2014 has helped. Indeed, we expect home sales to see year-on-year growth in the second half of the year. However, the big impact for the overall economy is from property investment, where we simply do not expect a material rebound.
China’s economy is likely to bottom out in the second quarter. With policies that support steady growth put in place, pressures on the economy will be eased during the quarter. Positive elements include fast-growing infrastructure investment, e-commerce and new export momentum. Exports to countries along the New Silk Road increased by 10 percent year-on-year in the first quarter, emerging as a new highlight for exports. We expect economic growth could hover around 7 percent in the second quarter, or even reach 7.1 percent to 7.2 percent.
The government has adopted stronger measures to support steady growth so far during the second quarter. These policies will gradually take effect. Promotion of public-private partnership projects will be beneficial for stabilizing investment and providing more opportunities for private investors. We think that if these measures had been launched several months ago, the situation would have been much better.
China’s economic restructuring has accelerated in recent years. The contribution of China’s service industry surpassed 50 percent last year, showing that China has entered an era dominated by the service industry. Regarding the secondary industry, the growth of the high-technology sector and equipment manufacturing has outpaced the traditional industries. We anticipate policies that promote opening-up will remain the direction for China’s reforms.
China saw slower growth of retail sales in April, but that does not mean deflation will occur in the consumption sector. But related social reforms should be accelerated, or consumption will decline further, which may have a negative impact on the economy in the medium to longer term. Economic restructuring and rapid growth of the service industry will alleviate the mounting pressure in the labor market. Some new college graduates may find it tough to get a job in the short term, but the supply of such workers is not adequate to meet demand in the long run.
The government could adopt multiple measures to boost investment. There is great potential for expanding investment in areas such as education and medical treatment. The government needs to further relax barriers to market entry. To expand consumption, the government should lift restrictions on home purchases and bank loans. Market-oriented reform should be accelerated to let new investment be guided by the market.
We have trimmed our 2015 GDP forecast to 7.1 percent from 7.3 percent. While the first quarter of 2015 is likely the trough in terms of sequential growth, we now forecast a softer rebound in the second quarter, with year-on-year growth slipping below policymakers’ comfort level during the quarter, prompting more aggressive easing. We expect headline GDP to bottom out in the third quarter.
Five months into 2015, economic activity remains sluggish. Much of the weakness has been anticipated as it stems from a prolonged industrial and manufacturing slowdown. One factor that does stand out, however, is external demand softness.
After a volatile performance due to Lunar New Year distortions, export growth in April fell by 6 percent, while imports contracted 16 percent. Year-to-date, exports grew by only 2 percent year-on-year.
Economic activity remains sluggish with little sign of a pickup. The risks to economic activity are still on the downside.
Indeed, as the HSBC China Monetary Conditions Indicator showed further tightening in April, we believe further monetary easing is still urgently needed. Cumulative policy easing to date has not been sufficient and timely enough to counter the drag from the sharp appreciation of the yuan on a real effective exchange rate basis, and therefore could not lift the economy out of disinflation.
To do so, more aggressive policy moves are needed, and ideally aggressive enough to reverse the expectations of financial intermediaries, who are increasingly becoming risk-averse. We are fore-casting further cuts in the required reserve ratio and interest rates. The next move will likely be a 50 basis point RRR cut in the coming weeks.
The restructuring process is ongoing. The services sector is now more than 50 percent of China’s nominal GDP. But we are much less complacent. The first point to clarify is that growth in the services sector is also slowing; it is merely slowing at a lesser
pace (than other sectors).
Growth of the services sector slowed from 11.2 percent in the fourth quarter of last year to 9.6 percent in the first quarter of 2015. This is indeed much better than the primary and secondary sectors. In real terms, the services sector is still growing at a steadier pace.
March retail sales growth slowed to 10.2 percent year-on-year, taking the reading to 10.6 percent in the first quarter. The slowdown was largely due to the drag from auto sales growth.
We should be mindful of the deflation in the manufacturing sector, which may further restrain industrial investment and reduce employees’ income.
At its 12th annual meeting, the National People’s Congress announced the goal of creating 10 million urban jobs in 2015. However, the labor market will likely face headwinds from slowing growth. The ratio of jobs available to job seekers dropped to 1.12 in the first quarter from 1.15 in the previous quarter, indicating weakness in the market.
As pressures on growth and inflation intensify, infrastructure investment will become more important. Fiscal reforms since 2014 have shut down a significant funding channel for infrastructure investment at the local government level, the local government financing vehicles. This will be replaced by a mixture of policy bank lending, a higher municipal bond issuance quota and more use of public-private partnerships.
Early signs on growth in the second quarter point to stabilization, albeit at a low level. Business surveys like the National Bureau of Statistics’ Purchasing Managers Index edged up in May and property sales show some signs of bottoming out. If that trend is sustained, the economy should be within striking distance of the government’s 7 percent target.
The government has a tough job. On the one hand, it wants to prevent a further slide in growth. On the other hand, it does not want an overblown stimulus, which makes structural problems harder to deal with. This stimulus is a scalpel rather than a sledgehammer. The surgical approach is cleaner, but the results take longer to show.
What is interesting about China right now is that the emergence of a new economy and the contraction of the old economy are happening at the same time. If you look at innovative firms that target the emerging middle-class consumer, there is a positive story. If you look at old industrial firms, the signs of struggle with overcapacity and debt are evident.
We do not see much pressure on labor markets right now. The data show demand for workers is outstripping demand for jobs, which means there is no significant unemployment. That is one of the reasons the government has been able to adopt a surgical approach to its stimulus.
Lots of analysts underestimate the amount of policy space China has to stave off a slowdown. Interest rates remain relatively high, so there is scope for more conventional monetary easing. In the real estate sector, down payments are one requirement that could be relaxed if the government wants to bolster demand.
China’s economy found a marginally firmer footing in April thanks to recent policy measures, as property sales turned positive and industrial production growth edged up. However, property construction and investment remained anemic, as fixed-asset investment growth slipped to a new decade-low.
We expect more policy support to come, backed by an increasingly supportive Politburo policy tone. This should help take GDP growth back up to 7.1 percent year-on-year in the second quarter, but any revival will be hard to sustain as the unfolding property downturn intensifies into year-end. As such, we maintain our 2015 GDP growth forecast of 6.8 percent.
Policy support continued to escalate. The People’s Bank of China cut benchmark interest rates by another 25 basis points on May 10, guiding the subsequent visible decline in money market rates. As real rates fall further in the coming months, it should relieve the corporate debt servicing burden and cash flow issues. The Ministry of Finance, the PBOC and the China Banking Regulatory Commission also jointly confirmed that direct debt placement between local governments and creditors will be allowed, as will the use of swapped local government debt as collateral by banks in repo and other liquidity operations with the PBOC.
We think these measures should help mitigate against liquidity/yield distortions caused by a potentially huge release of new local government bonds to the bond market, and motivate banks to swap out old loans for lower-yielding and longer-duration local government bonds.
We expect more policy support to come. Further policy support is still needed to stabilize China’s growth momentum and arrest the passive tightening of monetary conditions. Policy support will deliver a modest but temporary boost to growth in the second and third quarters.
China’s rebalancing has already started, albeit at a very incremental pace. On the external account, net exports no longer contribute that much to China’s growth and the current account surplus has narrowed significantly from 10 percent of GDP in 2007 to only 2.1 percent in 2014. On the domestic front, consumption has contributed more to GDP growth than investment since 2010, and the service sector’s share of the economy has risen for the past four years.
This rebalancing is due partly to China’s investment slowdown and weakening global demand, and partly to fundamental structural reform. The ongoing property downturn has clearly dragged down property and industrial investment the past couple of years, whereas household income and consumption have stayed more resilient.
However, China has also reduced its previous implicit subsidies in energy and utility prices; increased dividend payments by State-owned enterprises to the government; expanded pension and healthcare insurance coverage; carried out value-added-tax reform and cut taxes and fees for small businesses; and lowered entry barriers facing smaller firms and to the financial, education, culture, healthcare, tourism and other service sectors. Going forward, we see policy efforts continuing to support and extend all such trends.
Despite recent headwinds from a cut in public consumption and the sharp industrial and property sector downturns, consumption remains resilient. In the first quarter, retail sales rose by more than 10 percent year-on-year on both a real and nominal basis.
Real consumption expenditure growth per capita held up at 7.3 percent year-on-year, as national average real disposable income growth held steady at around 8 percent.
The resilience of China’s labor market thus far has been a key contributor to this picture. Official statistics showed the surveyed unemployment rate still hovering around 5 to 5.1 percent, and 3.2 million new urban jobs were created in the first quarter, on track to meet this year’s 10 million target.
Data from urban labor centers suggest that there were more job postings than job seekers in the first quarter. As the property downturn unfolds through 2015, job market pressures will inevitably rise, but we nonetheless expect job losses to be less severe in scale than in 2008-2009.
We think there is still plenty of room left for additional infrastructure investment in China.
Many may say China has invested too much in infrastructure after the past decade’s massive construction and that its current infrastructure seems better than in most other emerging countries and even some developed economies. However, China’s total capital stock per capita is still far below that of many developed economies, at only one-seventh of the United States, one-13th of Japan and one-quarter of South Korea in 2013.
The central government is exploring multiple alternative ways for infrastructure investment. Central to this experiment is the so-called private-public partnership program, through which infrastructure projects with longer-term stable cash flows or reasonable commercial returns are expected to be carried out with the help of corporate balance sheets.
To facilitate this process, the government is accelerating utility price and service sector reforms. In addition, cross-regional projects such as high-speed railway, national grid, giant hydraulic and hydropower projects will be funded by the central government and some central government SOEs.
The government also plans to increase the role of policy banks in financing and to allow a longer transition period for local government financing vehicles to continue borrowing from their normal channels.
Property policies have been eased over the past year but there is room to do more. We think the government can further cut down payment requirements, from 30 percent to 20 percent for all first mortgages, and accelerate hukou reforms in lower-tier cities later this year, if property activity weakens again. The additional rate cut we expect and further relaxation of developers’ fund-raising access should also help.
Existing and upcoming property policy easing will unlikely re-inflate the property bubble, and at best only mitigate and stabilize the downturn.
Based on the April data and the Purchasing Managers Index for May, it seems that the economy in the second quarter will be weaker than in the first three months.
Macro indicators in the first four months were mostly short of expectations, indicating downside risks to our growth forecast of 6.7 percent year-on-year in the second quarter. The May PMI did not show any turning point.
The nonmanufacturing business activity index continued to drift downward, which may indicate the service sector cannot stand alone as the manufacturing sector weakens. Reforms to further deregulate the service sector and promote urbanization are necessary to revive the nonmanufacturing sectors.
Monetary policy easing will have to be accompanied by meaningful capacity cuts in the manufacturing sector to stem a growth slowdown.
The Chinese economy is facing headwinds of persistently high cost of capital, overcapacity in most of the manufacturing sectors and a property down-cycle. The government has committed to lower the cost of capital through broad-based policy easing and unconventional liquidity management of policy banks and debt swap.
The economy may receive support two to three quarters after monetary easing alongside the property market stabilization possible around the fourth quarter this year.
We noticed a few reforms have made progress recently.
Urbanization: Chinese authorities launched the urbanization pilot before the Lunar New Year. Urbanization should trigger relocation of consumption and investment. Assuming that the New Urbanization Plan is fulfilled by 2020, we expect:
1) Household consumption spending to increase around 10 percent or more;
2) Additional urbanization-related investment/spending may be 2.6 trillion yuan ($423.5 billion) or more each year;
3) Farmers may shift one-third to one-half of their investment in housing from rural to urban areas.
Interest-rate liberalization: In early May, the deposit rate ceiling was widened from the previous 130 percent from the base to 150 percent. The central bank seems to be conveying a key message that this rate cut will also pave the way for interest rate liberalization in 2015.
Capital account liberalization: Regulators agreed on mutual recognition of funds between the mainland and Hong Kong effective from July 1. We view this as a significant capital market opening-up initiative, which could accelerate the integration of the A-and H-share markets.
The Shanghai-Hong Kong Stock Connect should gradually ease under-ownership by foreign investors in China’s capital market. As a result, offshore investors will have access to China’s growth opportunities, renminbi exposure, and more importantly, the reform premium.
The Chinese leaders have initiated two key projects to mitigate concerns of geopolitics and domestic excess capacity: the Asian Infrastructure Investment Bank and the Belt and Road Initiative.
This is likely to lead to a gradual process of investment out of China, in our view. The overseas direct investment-led capacity exports will likely be determined by a few factors: GDP per capita, the cost of capital in the home country, the leverage ratio of potential multinational companies, an international currency and soft power.
Debt: The Ministry of Finance, the PBOC and the China Banking Regulatory Commission announced that local bonds can be used as collateral for borrowing. Meanwhile, provincial governments can issue bonds through directional distribution, which allows local governments and debtors to swap loans and other type of debts for bonds directly.
The new rules were introduced to incentivize debt swaps through credit enhancement and cheap credit. The authorities want to see the first round of debt swaps by the end of August. This policy setting avoids imminent local defaults with guaranteed low-cost refinancing.
State-owned enterprises: The government is taking steps to consolidate the central SOEs. Meanwhile, Guangzhou’s SOE reform program proposed that mixed-ownership enterprises will become the main form of municipal enterprises. We expect an SOE reform grand plan from the central government to be the focal point in the coming quarter or so.
The nonmanufacturing PMI employment sub-index slid to the lowest level in May (47.6) since the data series began. While the job market is still diverging between unskilled and skilled labor, the risk is that, if the economy stays weak, the rising new economy including services may not be able to fully offset the job loss in traditional sectors, challenging the government’s growth bottom line.
We expect the government to scale up policy easing to defend the growth bottom line. The PBOC balance sheet may expand to curtail the cost of capital and accommodate interest rate liberalization and local debt swaps.
Meanwhile, the government will resolve funding constraints for infrastructure projects, foster new consumption drivers, stabilize the property sector and cut overcapacity in an orderly manner.
China May inflation edges down to 1.2%, producer prices slide
(Xinhua/chinadaily.com.cn) Updated: 2015-06-09 10:28
BEIJING — China’s consumer price index (CPI), a main gauge of inflation, grew 1.2 percent year on year in May, the National Bureau of Statistics announced on Tuesday.
The reading fell from 1.5 percent posted in April.
On a monthly basis, consumer prices in May slipped 0.2 percent, unchanged from the 0.2-percent drop recorded in April.
Falling prices of vegetables, fruits and eggs due to seasonal factors were the main cause of the CPI decline last month, NBS statistician Yu Qiumei said.
May PPI down 4.6%
The country’s producer prices slid 4.6 percent year on year in May, the 39th consecutive month of declines, adding to disinflationary pressure, official data showed on Tuesday.
The drop in the producer price index (PPI), a measure of costs for goods at the factory gate, stayed the same with that in April, also the index’s second largest drop since its downward trend started in March 2012, according to the National Bureau of Statistics (NBS).
On a monthly basis, the PPI contracted 0.1 percent in May, narrowing from a 0.3 percent decline in April, which was mainly caused by rising petroleum processing costs.
Deflationary pressure remains
The drop of the PPI reading is steeper than expected, which shows difficulty at company level despite slight pickup of commodity prices, said Lu Zhengwei, chief economist at Industrial Bank.
“We still need to remain cautious on the deflationary pressure,” said Lu. He expects the CPI to grow 0.8 percent in June.
China’s gross domestic product (GDP) grew 7.4 percent in 2014, the weakest annual expansion in 24 years. GDP growth in the first quarter of the year slowed to 7 percent.
The country targets an annual economic growth rate of around 7 percent for the year and aims to keep inflation at around 3 percent.
HONG KONG (MarketWatch) — Wednesday could be huge for Chinese stocks.
On that day, about four hours before Shanghai opens for trade, MSCI Inc. MSCI, -0.68% will announce whether it will welcome China’s top yuan-denominated stocks into its extremely influential Emerging Markets Index 891800, -0.51% tracked by a mountain of roughly $1.7 trillion in assets worldwide.
Such a move would be expected to ignite a significant rally in Shanghai blue chips, and a recent Wall Street Journal report cited major funds such as those of Vanguard Group Inc. planning to purchase Chinese equities ahead of the MSCI decision, which is due to be revealed Tuesday at about 5:30 p.m. U.S. Eastern time (Wednesday 5:30 a.m. in Shanghai) on the financial company’s website.
Hong Kong-listed shares of Chinese companies — known as “H-shares” — are already a sizeable presence in the MSCI EM Index. Rival FTSE Group (owned by the London Stock Exchange LSE, -1.34% LDNXF, +0.00% ) recently added the mainland-listed stocks — known as “A-shares” — into transitional global indexes, and may add them to its benchmark EM index this September, according to HSBC.
The possible MSCI move has been making big headlines in China’s news media, but that said, many analysts are not so sure the index compiler will take the plunge into Chinese equities this week, suggesting it will wait a little longer for the country’s financial reforms to solidify further.
Now or later?
Among analysts closely following Chinese stocks, many think inclusion in the MSCI EM Index will happen, even if not right away.
Last June, some investors had pushed back against the addition of A-shares in the benchmark, arguing that China still restricted market access. Since then, however, Chinese markets have opened further to the world, including through the launch of the milestone Hong Kong-Shanghai Stock Connect scheme — which allows foreign retail investors to directly buy mainland Chinese equities for the first time — and through the mutual recognition of Hong Kong funds and their mainland peers.
But despite such liberalizations, Hong Kong-based China Forward Capital Group’s founder and chief investment officer, Qi Wang, thinks MSCI will likely wait a little longer before including the A-shares.
“There could be more dramatic policy changes in the second half of 2015, beyond the already announced mutual recognition” of funds, he told MarketWatch late last week. “This may prompt MSCI to delay the decision to later this year in order to take a more comprehensive view.”
Ilya Feygin, managing director at New York-based broker WallachBeth Capital, sees “a greater than 80% chance” that China’s A-shares will join the MSCI indices by its June 2016 index review at the latest, though Wednesday’s announcement might not be one of immediate inclusion of Chinese stocks.
“The upcoming announcement June 9th will probably simply make some forward-looking statement to that effect,” he said in emailed comments for this report.
wsj: The International Monetary Fund Thursday slashed its forecasts for U.S. economic growth, calling for the Federal Reserve to hold off its first rate increase in nearly a decade until 2016.
U.S. worker productivity fell in the opening months of 2015, underscoring an economic soft patch marked by weak business investment and tepid wage gains.
Healthy, but not toned
AMERICA’S economy has been looking frail. According to recently revised estimates, in the first quarter of 2015 GDP shrank by 0.7%, at an annualised rate. Yesterday the International Monetary Fund advised the Federal Reserve not to raise interest rates until next year. But the prognosis is not all bad. For signs of strength, look at the labour market. Today the Bureau of Labour Statistics reported that about 280,000 non-farm jobs were created in May; a healthy figure. There are now 11m more jobs than when the recession finished in mid-2009; the unemployment rate is 5.4%, more than half a percentage point below the average over the past two decades. One black spot, though, is wages. In the past few months the rate of pay increases has fallen (see chart). That suggests that the American labour market still has lots of slack.
Washington, June 3, 2015 (AFP)
The US economy cranked back into middle gear during April and May after stalling in the first quarter of the year, the Federal Reserve’s Beige Book regional survey said Wednesday.
Consumer spending played a big part in the rebound, it said, as did construction and tourism.
Respondents to the regional survey, which helps shape Fed policy decisions, “were generally optimistic” in their outlook, expecting growth to continue or pick up.
But the report also showed the recovery from the January-to-March downturn was spotty from region to region, suggesting some residual weakness after the winter slump.
The report characterized overall growth as “modest” to “moderate”, which is how the Fed generally described the economy throughout 2014.
Most of the Fed’s 12 districts reported gains in consumer spending, including on cars and homes; in construction; and in travel and tourism.
Some of that was attributed to the boost to household incomes from lower gasoline prices after the oil price crash.
The comments on consumers were reassuring, after a series of reports showing that Americans were largely saving any new money they were taking in, rather than spending it.
But cheap oil also took a toll on the hubs of the petroleum industry, where drillers and service companies have been laid off thousands.
That contributed to sluggish growth in two key oil regions: the Fed’s Dallas, Texas district, and the Kansas City district just to the north, which includes Oklahoma.
The Beige Book survey, which covered roughly six weeks to late May, showed the economy coming back after it contracted 0.7 percent in the first three months of the year, due to a combination of the effects of harsh winter weather in some areas and the grinding port slowdown on the west coast.
But the survey suggests the spring rebound was not as strong as hoped. The huge Atlanta Fed district, covering much of the southeast, reported the pace of growth generally unchanged after the winter, with retail sales growth soft.
bloomberg: U.S. central bankers are still likely to start raising interest rates this year if the labor market improves further, though the jobs outlook has become more uncertain, said William C. Dudley, president of the Federal Reserve Bank of New York.
“If the labor market continues to improve and inflation expectations remain well-anchored, then I would expect — in the absence of some dark cloud gathering over the growth outlook — to support a decision to begin normalizing monetary policy later this year,” Dudley, who has a permanent vote on the policy-setting Federal Open Market Committee, said in remarks prepared for a speech Friday in Minneapolis.
At the same time, he cautioned that “there remains some uncertainty about whether growth will be strong enough to lead to further improvement in the labor market.” He also stressed that interest rates are likely to rise gradually after liftoff.
Dudley spoke hours after the Labor Department reported that employers added more jobs to payrolls than forecast. The dollar strengthened as investors increased bets that the Fed will raise rates in September.
Fed Chair Janet Yellen and her colleagues are trying to determine if economic weakness at the start of the year is transitory or longer-lasting, as they consider the timing of their first rate rise since 2006. Fed officials next meet to discuss policy on June 16-17, and Yellen will hold a press conference after the gathering.
Employers added 280,000 workers to non-farm payrolls in May, beating the median forecast in a Bloomberg survey, figures from the Labor Department showed Friday in Washington.
Ways to Go
Dudley acknowledged the numbers in his speech, adding that “there is still some ways to go.”
He said he is “becoming more confident” in the inflation outlook as oil prices have stabilized and the pace of appreciation of the dollar has slowed.
That too, however, depends on how the labor market evolves, he said. And even if the labor market does continue to improve, that by itself may not be sufficient.
“For example, if labor market improvement were not accompanied by a meaningful uptick in wage compensation and if inflation expectations also fell, then one likely would not be reasonably confident about inflation returning to 2 percent over the medium term,” he said.
Yellen said on May 22 that she still expects to raise rates this year if the economy meets her forecasts. Those remarks were before government data showed the economy shrank by 0.7 percent at an annual rate in the first quarter.
Governors Lael Brainard and Daniel Tarullo earlier this week both questioned whether the first-quarter slump could be written off as due largely to temporary headwinds. The International Monetary Fund on Thursday cut its U.S. growth forecast for this year and urged the Fed to delay a rate increase to the first half of 2016.
Manufacturing activity was at best slightly faster across the country; jobs and wage gains were also only “slight” overall.
The banking and finance industry also showed mixed results: business and consumer higher in some regions, and lower in others.
The strongest growth was in the Richmond, Chicago, Minneapolis and San Francisco Fed districts.
The Fed survey echoed what other data reports released this week said about the economy’s modest comeback from the first quarter drop.
Data out Wednesday showed a fall in the trade balance as the impact of the West Coast ports slowdown ebbs, and the ISM service sector gauge for May, while lower than the previous month, was still in solid growth territory.
Markets moved more in reaction to other events. The dollar fell against the euro amid rising expectations that Greece will reach a deal with creditors to avoid a default that could rattle the eurozone. US stocks were higher generally after showing weakness for three straight sessions.
Beijing, June 1, 2015 (AFP)
China’s new home prices increased in May for the first time in four months, a survey showed Monday, as effects of Beijing’s loosening policies to boost the market kick in.
The average price of a new home in China’s 100 major cities rose 0.5 percent month on month to 10,569 yuan ($1,696) per square metre, the China Index Academy (CIA) said in a report.
Prices had been falling since February and the increase was stronger than a 0.21-percent gain in January, which came after eight straight months of declines.
“Looking ahead the property market overall shows a warming trend, but some cities still see inventory pressures and the supply and demand is still tense,” the CIA said in the statement.
China’s property market has been in the doldrums for more than a year as expansion in the world’s second-largest economy slows.
Authorities have taken steps to support the industry as real estate investment remains a key driver for the economy, while land sales are a major source of revenue for cash-strapped local governments.
The central People’s Bank of China (PBoC) has cut benchmark interest rates three times since November, and eased mortgage policies in September.
In late March it lowered minimum downpayment levels on second homes nationwide, rolling back a four-year-old policy first introduced to rein in soaring prices that were making home ownership unaffordable for many and raising worries over social unrest.
It also shortened the ownership period during which sellers are liable to a 20-percent capital gains tax on properties other than their main home.
China’s economy grew 7.4 percent last year, the weakest rate in nearly a quarter of a century, and more recent indicators have pointed to the frailty extending into the current quarter.
The PBoC has reduced the percentage of funds banks must hold in reserve twice this year, in a bid to boost lending, and analysts broadly expect policymakers to announce further easing in the coming months.
On a year-on-year basis house prices fell 3.73 percent in May, compared with a decline of 4.46 percent in April, according to the CIA.
The average price in China’s top 10 cities was 19,148 yuan per square metre, down 2.33 percent from a year ago, it said, slowing from a fall of 3.46 percent last month.
WASHINGTON – Laju ekonomi Amerika Serikat (AS) terkontraksi 0,7% pada Kuartal I 2015. Hal itu disampaikan oleh Departemen Perdagangan dalam perkiraan produk domestik bruto (PDB) yang direvisi, pada Jumat (29/5).
Penurunan itu sebagian besar disebabkan oleh dampak pada perlambatan perdagangan di West Coast selama tiga bulan, serta rendahnya persediaan tingkat investasi swasta dari perkiraan sebelumnya.
Revisi tajam dari perkiraan semula yang menyebutkan peningkatan 0,2% telah diprediksi. Pasalnya data output ekonomi dan perdagangan yang lebih rinci pada periode Januari-Maret telah terkuat dalam beberapa pekan terakhir.
Disamping itu, dampak dari perselisihan buruh yang berkepanjangan dan menyebabkan perlambatan di pelabuhan pada November-Februari telah selesai diatasi. Secara keseluruhan, masalah-masalah tersebut membuat sektor perdagangan terkena dampak negatif 1,9% pada produk domestik bruto (PDB)nya.
Ekspor di kuartal itu turun 7,6% setelah tumbuh 4,5% di periode sebelumnya. Sementara impor naik 5,6% atau hanya setengah dari laju kuartal sebelumnya. Akan tetapi para analis juga mengatakan penguatan dolar mengakibatkan dampak buruk pada daya saing AS sehingga memberikan kontribusi pada kejatuhan ekspor.
Penggerak pertumbuhan lainnya juga melemah, seperti pada konsumsi pribadi, investasi bisnis, dan belanja pemerintah. Namun pada sisi positifnya, belanja rumah dan peralatan bisnis meningkat di kuartal ini. Dan investasi persediaan, meskipun tidak setinggi yang diperkirakan, ikut naik dari kuartal sebelumnya.
Meski lajunya naik 2,2% atau bertambah di Kuartal IV 2014, namun demikian kuartal musim dingin kedua yang tertunda dalam dua tahun semakin mendukung keraguan yang terus berkelanjutan terhadap keseluruhan kekuatan ekonomi AS. Selain itu, kendati data awal dari periode berjalan sejak April lebih baik. Namun para ekonom mencatat, berharap perusahaanperusahaan mengalami rebound. (afp/pya)
Beijing – Mata uang yuan Tiongkok, yang Washington telah lama duga dimanipulasi, “tidak lagi undervalued”, Dana Moneter Internasional (IMF) mengatakan pada Selasa (26/5/2015).
“Penilaian kami sekarang adalah bahwa apresiasi efektif riil yang besar selama tahun lalu telah membawa nilai tukar ke tingkat yang tidak lagi undervalued,” kata IMF dalam sebuah pernyataan setelah misi konsultasi ke Tiongkok.
Nilai yuan, juga dikenal sebagai renminbi, telah menjadi sumber ketegangan selama bertahun-tahun dengan mitra dagang utama Tiongkok — yang dipimpin oleh Washington — menuduh Beijing mempertahan nilai mata uang artifisial rendah untuk memberikan pengekspor Tiongkok keunggulan kompetitif yang tidak adil, yang dibantah oleh Beijing.
Tiongkok mempertahankan cengkraman kuat pada nilai yuan dari kekhawatiran bahwa arus masuk dan keluar mata uang yang tak terduga bisa membahayakan ekonomi dan melemahkan kontrol keuangannya.
Meskipun demikian Tiongkok masih mendorong mata uang untuk memainkan peran yang lebih besar dalam sistem keuangan dunia, seperti dimasukkan dalam keranjang yang membentuk mata uang cadangan IMF “special drawing rights” .
“Kami mendesak pemerintah untuk membuat kemajuan pesat menuju fleksibilitas nilai tukar yang lebih besar, persyaratan utama untuk ekonomi besar seperti Tiongkok yang berusaha keras untuk menghargakan berbasis pasar dan mengintegrasikan dengan cepat di pasar keuangan dunia,” kata IMF.
Surplus perdagangan besar Tiongkok telah terlihat mengakumulasi cadangan devisa terbesar di dunia yang mencapai 3,73 triliun dolar AS pada akhir Maret.
“Posisi eksternal masih terlalu kuat menyoroti kebutuhan untuk reformasi kebijakan lainnya — yang memang bagian dari agenda pemerintah — untuk mengurangi tabungan berkelebihan dan mencapai keseimbangan eksternal yang berkelanjutan,” kata IMF.
Langkah-langkah tersebut termasuk memastikan bahwa di masa depan “nilai tukar menyesuaikan dengan perubahan fundamental”, tambahnya.
Beijing – Tingkat paritas tengah nilai tukar mata uang China renminbi atau yuan, menguat delapan basis poin menjadi 6,1131 terhadap dolar AS, Jumat (22/05/2015). Demikian menurut Sistem Perdagangan Valuta Asing China.
Di pasar spot valuta asing China, yuan diperbolehkan untuk naik atau turun sebesar dua persen dari tingkat paritas tengahnya setiap hari perdagangan. Tingkat paritas tengah yuan terhadap dolar AS didasarkan pada rata-rata tertimbang dari harga yang ditawarkan oleh pelaku pasar sebelum pembukaan pasar antar bank setiap hari kerja.
JAKARTA. Bank sentral China People’s Bank of China (PBoC) memangkas suku bunga untuk ketiga kalinya dalam enam bulan terakhir, untuk merangsang pertumbuhan ekonomi dan mengurangi beban utang perusahaan juga pemerintah.
PBoC tercatat pada Minggu (10/5/2015) memangkan suku bunga pinjaman dan simpanan masing-masing sebesar 25 bps. Bunga pinjaman kini menjadi 5,1%, sedangkan bunga simpanan turun ke 2,25%.
“Langkah diambil menyusul serangkaian data ekonomi yang di bawah prediksi, menambah kekhawatiran target pertumbuhan ekonomi 7% yang dicanangkan pemerintah meleset,” tulis Analis Strategydesk, Divisi Riset Soegee Futures dalam risetnya yang diterima hari ini, Senin (11/5/2015).
Dikemukakan PBoC mengatakan langkah tersebut dapat membantu perkembangan sehat konomi. Indikator ekonomi yang dirilis dalam beberapa minggu terakhir mengindikasikan hilangnya momentum.
Keputusan ini juga datang setelah pejabat senior semakin khawatir dengan besarnya utang, akibat pertumbuhan kredit yang tinggi selama beberapa tahun terakhir. Kondisi ini ditakutkan dapat membebani upaya meningkatkan pertumbuhan ekonomi.
“Menurut Komisi Regulator Perbankan China, jumlah kredit macet meningkat tajam, selama kuartal pertama ini saja sudah melonjak 140 miliar yuan menjadi 982,5 miliar yuan.”
Dikemukakan para pengamat dan ekonom memang sudah mendesak akan perlunya pelonggaran kebijakan moneter, karena pertumbuhan terus melambat. Sehingga keputusan ini tidak mengejutkan, mengingat kondisi ekonomi yang terus memburuk.
“Namun banyak ekonom yang meyakini bank sentral belum selesai melakukan pelonggaran, meski sudah memangkas suku bunga dan Giro Wajib Minimum (GWM) beberapa kali dalam enam bulan belakangan.”
New York, May 7, 2015 (AFP)
The dollar strengthened Thursday after a positive US jobless claims report raised hopes for a solid April labor market report.
The dollar rebounded from a swoon Wednesday that in part was due to disappointing private US hiring data. On Thursday, the weekly US unemployment claims report came in strongly positive, with the moving average falling to a 15-year low
Markets were geared up for the Labor Department’s jobs report Friday to gauge whether the economy is strong enough for the Federal Reserve to begin raising ultra-low interest rates.
Economists expected the Labor Department will report the economy added 218,000 jobs in April, picking up from a tepid 126,000 in March, with the unemployment rate dipping a tenth point to 5.4 percent.
“After last month’s major disappointment in job growth, economists are looking for a strong rebound in April,” said Kathy Lien of BK Asset Management.
“While we are optimistic and believe that the labor market recovered last month, the leading indicators that we typically track ahead of payrolls provides some cause for concern.”
The pound, meanwhile, rose against the euro and dollar as Britain went to the polls in a tight election race.
British Prime Minister David Cameron’s Conservatives were expected to win 316 seats, short of the required majority of 326 and ahead of center-left Labour on 239, according to an exit poll late Thursday.
<pre> 2100 GMT Thursday Wednesday
EUR/USD 1.1266 1.1348
EUR/JPY 134.91 135.54
EUR/CHF 1.0384 1.0395
EUR/GBP 0.7382 0.7443
USD/JPY 119.75 119.44
USD/CHF 0.9218 0.9161
GBP/USD 1.5262 1.5247
Hong Kong, May 4, 2015 (AFP)
Asian markets gained ground Monday after a long holiday weekend, energised by a strong finish on Wall Street last week and gloomy Chinese economic data that heightened expectations for more stimulus measures.
Seoul closed up 0.24 percent or 5.06 points to 2,132.23, led by technology and financial shares, while Hong Kong stocks ended down 9.18 points or 0.03 percent at 28,123.82.
Sydney rose 13.1 points, or 0.23 percent, to close at 5,827.5 as the Aussie dollar slipped on expectations of another interest rate cut to combat a recent surge in the unit.
Chinese shares rallied on hopes of monetary easing following a survey of manufacturing activity that recorded its worst contraction in a year in April. Shanghai added 0.87 percent to 4,480.46.
Tokyo was closed for a public holiday, along with financial markets in Thailand and Malaysia.
As well as the news on China’s economic front, Asian bourses took their lead from a rally on US markets on Friday which reversed a bruising two-day retreat following a dismal US economic growth report.
HSBC’s final purchasing managers’ index (PMI) for China came in at 48.9 for April, below the break-even point of 50 and the weakest since 48.1 in the same month last year, indicating subdued domestic demand is hampering the economy.
The British bank’s index tracks activity in China’s factories and workshops and is regarded as a barometer of the health of the Asian economic giant.
The outcome was down from a preliminary reading of 49.2 and marked the second monthly contraction in a row after March’s 49.6.
China’s government on Friday had posted its official PMI at 50.1 for last month, unchanged from March when the gauge showed growth for the first time this year.
On Australian markets, attention was on a central bank meeting on Tuesday expected to address a rebound in the currency — problematic as the nation grapples with the decline of a mining boom.
“The recent surge in the Australian dollar would be viewed quite dimly by the folks at the Reserve Bank,” Bill Evans, chief economist at Westpac Banking Corp, told Bloomberg News.
Failing to cut rates “in the face of such strong market pricing will affect the bank’s credibility over time”, he added.
The dollar extended gains against the euro in Asia on Monday ahead of the release of a closely watched report on the US labour market, analysts said.
The euro bought $1.1194 in afternoon Singapore trade from $1.1200 in New York late Friday. It also fell to 134.40 yen from 134.56 yen.
The greenback was changing hands at 120.07 yen from 120.14 yen on Friday. The Australian dollar fell to 78.24 US cents from 78.90 US cents.
“Another big week for the dollar as markets await the US non-farm payrolls report this Friday,” Phillip Futures said in a market commentary.
“A strong labour market report will likely strengthen the dollar. Conversely, weak data is likely to push the dollar down.”
Singapore’s United Overseas Bank said the report on the US labour market could “swing market expectations for (the) Fed Reserve’s future course of interest rate actions”.
Oil prices fell in Asia as dealers eyed the lacklustre manufacturing data from China, which raised concerns about weak demand from the world’s top energy consumer.
US benchmark West Texas Intermediate fell two cents to $59.13 while Brent eased seven cents to $66.39 in afternoon trade.
Gold fetched $1,182.38 against $1,182.97 earlier Monday.
In other markets:
— Mumbai surged 1.77 percent, or 479.28 points, to end at 27,490.59.
Oil & Natural Gas Corporation surged 7.57 percent to 327.65 rupees, while private lender ICICI Bank fell 0.63 percent to 329.15 rupees.
— Singapore closed down 0.13 percent, or 4.69 points, at 3,482.70.
Real estate developer Capitaland rose 1.90 percent to Sg$3.76 while Singapore Telecom eased 1.13 percent to Sg$4.38.
— Jakarta ended up 1.08 percent, or 54.71 points, at 5,141.14.
Automaker Astra International gained 3.65 percent to 7,100 rupiah, while property developer Pakuwon Jati slipped 4.57 percent to 418 rupiah.
— Taiwan rose 24.99 points, or 0.25 percent to 9,845.04.
Taiwan Semiconductor Manufacturing Co closed 0.34 percent higher at Tw$147.5, while Hon Hai Precision Industry added 1.20 percent to Tw$93.1.
— Wellington fell 30.32 points or 0.52 percent to 5,767.08.
Air New Zealand was down 0.56 percent at NZ$2.675 and Spark slipped 1.34 percent to NZ$2.9.
— Manila closed 1.32 percent or 101.62 points higher at 7,816.44.
Bank of the Philippine Islands gained 1.68 percent to 103 pesos while Ayala Land Inc. rose 3.49 percent to 40 pesos.
China’s monetary policy
The flawed analogy of Chinese QE
WITH China’s central bank injecting cash in the financial system to support growth, commentators have been quick to dub it the start of Chinese-style quantitative easing. Analogies can be useful for explaining complex financial matters, but in this instance the comparison is more misleading than helpful. “QE” is a poor description of the way Chinese monetary policy works. It also overstates the degree of easing the central bank is undertaking.
Superficial parallels with the QE policies of America, Japan or Europe can be made. Just as central banks in those countries have bought government bonds and other securities from lenders to expand the money supply, so is the People’s Bank of China looking to do something similar. According to one report, it will acquire assets directly from commercial banks, just as the Federal Reserve did in buying mortgage-backed securities. Another has likened it to Europe’s “long-term refinancing operations”, reporting that the central bank will lend directly to banks, taking local-government bonds as collateral.
There is no question that China is loosening monetary policy, and that it is doing so on multiple fronts. But the QE analogy falls down in two ways. First, the use of quantitative tools has long been the norm for China’s monetary policy. The government still sets a money-supply target every year (it is shooting for 12% M2 growth this year) and regulators rely on lending quotas to influence the behaviour of banks. The central bank also adjusts the required reserve ratio, which determines how much cash is available to banks for lending, more often than it does interest rates. The biggest unconventional gambit confirmed so far this year is “pledged supplementary lending” to the China Development Bank, whereby the central bank provides financing that it is then lent on for infrastructure spending. This, however, is not a new policy. The Chinese central bank has regularly used similar forms of relending over the past two years. As analysts at Westpac, an Australian bank, note, China has ratcheted up its easing in recent weeks but has not changed its style. “China’s monetary policy is predominantly quantitative in nature, so yes, most initiatives it pursues under the current regime…will be more about quantum than price,” they write.
The second problem with the QE comparison is that it exaggerates the extent of China’s monetary stimulus. As we explain in this week’s print edition, the loosening is intended in part to replace cash that has left China rather than to pump extra money into the economy. In the past the central bank relied on foreign-exchange inflows to generate money-supply growth (to simplify things a bit, it printed a steady stream of yuan to buy up the dollars entering the country from both trade and investment). Capital flows have reversed over the past half year, however, leading the central bank to create base money through alternative channels.
China also has no need for QE. The Bank of Japan and the European Central Bank, among others, have turned to quantitative easing because conventional monetary policies have run out of room. Interest rates in these economies are close to zero and their central banks have had to come up with new ways to lower funding costs and spur banks to make loans. But in China, conventional policy still has plenty of space. Benchmark one-year interest rates are above 5% and the required-reserve ratio is 18.5%, unusually high for any country.
Why, then, does China bother with relending when across-the-board easing would be more effective in stimulating the financial sector? The answer lies in the question. Unlike central banks that have turned to unconventional tools for general easing when all else has failed, China uses its relending for targeted purposes, hoping to avoid splashing cash all over an economy when debt levels are already too high. “The PBOC resorts to relending operations because it doesn’t trust financial markets to allocate credit to the areas that policymakers want it to go, not because it has concerns over banking sector liquidity,” say analysts at Capital Economics, a consultancy. If the central bank accepts local-government bonds as collateral, its objective will be to persuade banks to buy the bonds in the first place.
Yet this approach to monetary policy creates its own problems. For an economy that has grown as large and complex as China, quantitative tools are increasingly anachronistic. They can work when a financial system is largely closed. But as the capital account opens and bond markets displace banks, it is far more effective for central banks to focus on the price of credit (ie. interest rates), rather than its volume. Moreover, the attempt to target lending to deserving recipients speaks to the persistence of central-planning instincts. On the other hand, China has made plenty of progress over the past few years in freeing up its financial system and the central bank is, little by little, shifting to a price-based monetary policy. Targeted lending, so long as limited in size, as it has been so far, helps to cushion an economy that is going through these structural changes. Easing has always been quantitative in China. The point is to get away from that.
(Reuters) – China’s economy grew 7.0 percent in the first quarter, as expected but still its slowest rate in six years, reinforcing bets that policymakers will take more steps to bolster growth.
Economists polled by Reuters had expected China’s gross domestic product (GDP)to rise 7.0 percent in January-March compared with a year ago.
In the last quarter of 2014, China’s economy grew 7.3 percent on an annual basis.
On a quarterly basis, economic growth slowed to 1.3 percent between January and March after seasonal adjustments, the National Bureau of Statistics said on Wednesday, compared with growth of 1.5 percent in the previous three months.
Analysts had expected quarterly growth of 1.4 percent.
Activity indicators for March were all weaker than expected.
Factory output climbed 5.6 percent in March from a year ago, below forecasts for a 6.9 percent gain.
Fixed-asset investment, a vital driver of the economy, rose 13.5 percent compared with the same month last year. Analysts had expected a rise of 13.8 percent.
Retail sales expanded 10.2 percent compared with expectations for a 10.9 percent gain.
New York, April 8, 2015 (AFP)
When social media software firm Sprinklr unveiled its latest funding last month, it vaulted into the club of “unicorns,” or tech startups worth at least $1 billion.
That came just weeks after Slack, which makes a business software collaboration tool, entered the group which includes well-known names like Uber and Snapchat
While unicorns are supposed to be rare, mythical creatures, the proliferation of these billion-dollar startups has raised eyebrows as well as concerns in the fast-moving technology sector.
More than 80 tech firms can now be called unicorns, according to a Forbes Magazine list.
The venture capital research firm CB Insights lists 53 US-based unicorns, saying the hefty valuations have been fueled by a flood of private equity investors seeking an early piece of the next tech superstar.
The use of the term “unicorn” began with a blog from investor Aileen Lee of Cowboy Ventures in late 2013, when there were just 39 of the creatures and an average of four “born” each year. The number created in 2014 rose to 38, according to CB Ventures.
While some of the unicorns appear to be headed for big things, unicorn fever has raised fears of a bubble in the private equity markets.
“You have a frenzy of investors looking for the next Facebook. They saw the possibility of a return of 1,000 percent,” says Rob Enderle, a consultant and analyst at Enderle Group.
“But these are incredibly risky investments. All of these firms are not going to get a multibillion dollar buyout or massive public offering. I think we’re going to see a thinning of the herd.”
– ‘Dead unicorns’ –
The unicorns include a handful of startups worth at least $10 billion, a group sometimes called the “decacorns.” These include China’s Xiaomi, Airbnb, Pinterest and Dropbox, in addition to Uber and Snapchat.
Some equity investors are getting nervous over the trend.
“I do think you’ll see some dead unicorns this year,” said Bill Gurley, a partner at the Silicon Valley venture firm Benchmark, at the South by Southwest festival in March.
Gurley, who has been a leading voice of caution on unicorns, said in a blog post that both investors and startups are pushing too hard, ignoring traditional standards of risk.
“We are in a risk bubble,” he said.
“Companies are taking on huge burn rates to justify spending the capital they are raising in these enormous financings, putting their long-term viability in jeopardy.”
In a running Twitter conversation on the subject, Danielle Morrill of the research firm Mattermark said “I’ve narrowed it down to 61 potential dead unicorns. This is the stuff everyone is talking about but no one will publish.”
Prominent equity investor Marc Andreessen, one of the founders of Netscape during the dot-com era, expressed similar concerns in a series of tweets last year, saying too many startups are “burning” cash too quickly.
“When the market turns, and it will turn, we will find out who has been swimming without trunks on: many high burn rate co’s will VAPORIZE,” he said.
Mark Cuban, an early dot-com entrepreneur, said on his blog that the current situation is “worse than the tech bubble of 2000” because of “angel” investors investing in apps and tech firms with little scrutiny.
“I have absolutely no doubt in my mind that most of these individual angels and crowd funders are currently under water in their investments,” he wrote. “Because there is ZERO liquidity for any of those investments. None. Zero. Zip.”
– Precipitous drop –
There appears to have already been some shakeout. The online retail startup Fab.com, which raised $300 million and joined the unicorn club last year, ended up selling most of its assets in March to the manufacturing firm PCH in a deal reported to be worth just $15 million. Another former unicorn, the gaming service OnLive, was acquired recently by Sony for an undisclosed price.
Many startups have been able to raise cash from eager investors without heading to Wall Street for a public share offering. This also means the firms are not subject to the same scrutiny and publicly traded company for finances and governance.
Anant Sundaram, a professor at Dartmouth’s Tuck School of Business who specializes in corporate valuations, said that while financial data on these unicorns is often limited, few have demonstrated an ability to grow revenues and establish a sustainable business.
“Based on historical data, I wouldn’t be surprised if a vast majority of these firms fail to live up to their valuations,” Sundaram told AFP.
Still, he said that these types of investments are part of the process of innovation and “creative destruction” which fuel the economy.
While this is reminiscent of the dot-com boom, Sundaram noted that in the last cycle, “You had similar businesses (that) came in with very high valuations and many went bust, but this produced a Google and an eBay and a number of other standouts.”
Peter Barris at the venture firm New Enterprise Associates said investment is flowing because “we are in the early days of one of the most robust periods of innovation I’ve seen in my lifetime.”
In a blog post, Barris said he sees unicorns transforming the way we live.
“Perhaps there will even be a flameout or two spectacular enough to become Valley legend. But many companies will justify that valuation, and some will go much, much farther,” he said.
New York, March 27, 2015 (AFP)
“Bubble” talk returned to Wall Street this week with US stocks falling in part due to worries that biotech and other highflying stocks have risen to unjustifiable heights.
US stocks rallied on Friday, but it was not enough to offset losses the other four days. The Nasdaq Composite Index, which has outperformed the broader market in 2015, fell the most over the week, dropping 135.20 points (2.69 percent) to 4,891.22.
The Dow Jones Industrial Average fell 414.99 (2.29 percent) to 17,712.66, while the S&P 500 shed 47.04 (2.23 percent) to 2,061.02
Heading into the week, the Nasdaq stood above 5,000, rarified territory for an index that took 15 years to claw back near an all-time high set in 2000. But the tech-rich index found itself on the back foot most of the week.
Biotech companies like Celgene and Biogen came under pressure on worries that their promising new medications may fizzle, or take longer than expected to win regulatory approval. The Nasdaq biotech index lost 5.2 percent on the week. Semiconductor stocks were another weak segment in the index.
“The biggest story we saw was the mini-correction in biotechs and the mini-correction in semiconductors,” said Art Hogan, chief market strategist of Wunderlich Securities.
Hogan said sentiment is “very cautious” ahead of the upcoming earnings season, with analysts having slashed estimates for many companies. Investors are also more focused on the liabilities than the merits of the stronger dollar and lower oil prices, he said.
Major economic data included news that US economic growth slowed to an annual rate of 2.2 percent in the fourth quarter, unchanged from a previous estimate, from 5.0 percent in third quarter. Despite stronger consumption, US growth was hit by a 10.1 percent increase in imports and a 7.3 percent fall in federal government spending.
Other data showed a slump in durable goods orders in February, but rising sales of new single-family homes and an increase in consumer prices during the month.
– Big food merger –
Highlighting the week’s corporate news was the merger deal to create The Kraft Heinz Company, fusing ketchup-maker Heinz with Kraft Foods, the maker of Velveeta cheese, A-1 steak sauce, Jell-O and a host of other processed foods.
The deal, forged by investment guru Warren Buffett’s Berkshire Hathaway and 3G Capital, which own Heinz, will assemble the world’s fifth-largest food company, with around $28 billion in annual sales.
Berkshire and 3G will invest an additional $10 billion to pay for a special cash dividend of $16.50 per share for Kraft shareholders.
Dow Chemical got a lift from news that it will separate its US cholorine businesses and merge them with chemical company Olin into a company with revenues approaching $7 billion.
Conditions stayed turbulent for petroleum stocks, which continue to reel from lower oil prices. Whiting Petroleum sank nearly 22 percent in the week as it announced a $1 billion bond offering and a major equity offering that will dilute existing shares.
But cruise companies surged at week’s end on a better profit outlook due in part to lower fuel costs. Carnival Friday announced higher profits and said it ordered nine new cruise ships from shipbuilders in Germany and Italy.
Earnings season gets under way next week with results from agricultural giant Monsanto on Wednesday. Most major reports will not be released until later in April.
Next week also includes a heavy calendar of economic releases, including the Conference Board’s index of consumer confidence, construction spending and international trade.
The week’s most closely watched report will be the March jobs report. Analysts forecast the US economy added 248,000 jobs and the unemployment rate remained unchanged at 5.5 percent.
The jobs report will be released Friday, when markets are closed for Good Friday.
BEIJING. Bursa China menguat mencapai rekor tertinggi sejak Mei 2008. Penguatan bursa didorong oleh spekulasi rencana Pemerintah China mendorong perekonomian lebih tinggi.
Shanghai Composite Index naik 2,1% menjadi 3.577,30 pada penutupan perdagangan, Rabu (18/3). Indeks menguat hampir 77% dalam waktu satu tahun ini. Sedangkan CSI 300 Index meningkat 2,4% dan Hang Seng China Enterprises Index di Hong Kong menguat 1,2%. Indeks Hang Seng juga mengalami penguatan 0,9%.
Sejumlah saham menggerakkan bursa saham China, antara lain China Everbright Bank Co, Pangang Group Vanadium Titanium & Resources Co, dan China Eastern Airlines Corp.
Yan Liu, seorang trader di Guosen Securities Co mengatakan, aktivitas perdagangan yang tinggi menjadi penyokong pergerakan bursa China. Tercatat dalam perdagangan hari ini, frekuensi perdagangan saham mencapai dua kali rata-rata yang terjadi dalam 30 hari terakhir.
“Sedangkan spekulasi tambahan stimulus membantu bursa naik lebih tinggi,” kata Yan Liu, Rabu (18/3).
Beijing, March 15, 2015 (AFP)
The Chinese government has more weapons in its arsenal to boost the world’s second-largest economy, Premier Li Keqiang said Sunday as he sought to ease concerns about flagging growth.
Li earlier this month reduced China’s annual growth target to “approximately seven percent”, the lowest since a similar goal in 2004. The economy expanded 7.4 percent last year, the slowest pace in nearly a quarter of a century.
Fears are growing that Chinese expansion, a key driver of the global economy, may slow further after official data released last week showed production, consumption and investment growth all fell to multi-year lows.
Authorities have so far avoided big-ticket incentives to bolster growth like the unprecedented four-trillion-yuan (now $640 billion) stimulus package Beijing deployed at the height of the global financial crisis.
But Li signalled that more measures could be taken, telling reporters at his annual press conference: “We still have a host of policy instruments at our disposal.”
Beijing was prepared to “step up our targeted macro-economic regulation” to boost market confidence if growth slowed to approach the “lower limit of our proper range” and threatened employment and incomes.
“The good news is that in the past couple of years we did not resort to massive stimulus measures for economic growth,” he said after the close of the country’s Communist-controlled National People’s Congress legislature.
That gave authorities “fairly ample room” to act, he said.
Top Chinese leaders have said the economy is in a delicate transition away from decades of double-digit annual growth to a new, slower model that authorities say is more sustainable, a stage that they have branded as “new normal”.
– Still behind –
Li dismissed theories that China’s boom has seen it overtake the US to become the world’s number one economy, describing such purchasing power parity calculations as a “misleading exaggeration”.
“According to authoritative standards, China is still the second-largest economy in the world,” he said, stressing that it remained “behind about 80 countries in the world” in terms of per capita GDP.
He recalled a recent visit he paid to two rural families in the nation’s remote and backward west, where he met a man in his 40s who could not afford to marry and a college student who depended on his younger sister’s income as a migrant worker in the cities to pay his tuition fees.
“It truly pains me to see our people living in such distress and I’m sure that there are many more such families in the vast land of China,” he said, adding nearly 200 million Chinese remained in poverty by World Bank standards.
“China is still a developing country in every sense of this term.”
Underlining official concerns over the economy, the central People’s Bank of China cut benchmark deposit and lending interest rates in late February for the second time in three months, citing “historically low inflation”.
Consumer inflation fell in January to a more-than-five-year low of 0.8 percent. It rebounded to 1.4 percent last month during the Chinese New Year holiday but remained far below this year’s government target of “around three percent”.
Li denied accusations that China was “exporting deflation” and blamed falling prices for commodities such as crude oil and iron ore for the drop in the value of imports. The country bought increased amounts of such goods last year, he said.
“We are prepared to cope with such a situation and at the same time what we hope more to see is that there will be a quicker global economic recovery and the global economy will regain its momentum of robust growth,” he said.
JAKARTA. Harga saham di bursa Hong Kong terdorong oleh sinyal positif dari pidato Perdana Menteri China Li Keqiang.
Indeks Hang Seng ditutup menguat 0,53% ke 23.949,55. Indeks meneruskan penguatan 0,45% yang dicapai pada penutupan dua hari terakhir pekan lalu.
Hang seng rebound dari pelemahan 0,22% pada pembukaan dan bergerak fluktuatif pada kisaran 23.711,27—23.970,05.
Dari 50 saham yang tergabung di indeks Hang Seng, 20 saham menguat, 26 saham bergerak turun, dan 4 saham stagnan.
PM China Li Keqiang hari ini berjanji mengambil tindakan jika ekonomi China tumbuh terlalu rendah atau nilai tukar yuan tertekan terlalu dalam.
Li dalam pidato tersebut juga mendorong pengembangan perdagangan dalam jaringan. Pernyataan tersebut mendongkrak harga saham China Mobile Ltd di bursa Hong Kong. China Mobile melonjak 2,7% di penutupan, saham dengan kenaikan poin indeks tertinggi pada perdagangan hari ini.
Pergerakan Indeks Hang Seng
THE TELEGRAPH: Is the party over for Wall Street? Over a five-year period, the US stock market has left its rivals trailing, leading from the front as investors have celebrated recovery from the financial crisis.
Zoom in to the period since the start of the year, however, and the S&P 500 is bringing up the rear. Last week it gave up all its gains for the year to date.
By contrast, Europe’s stock markets are on a tear as the combination of cheap oil, a newly competitive currency and the promise of €60bn (£43bn) a month of money printing make the region seem a one-way bet. It’s the same story in Japan. Even the UK, dragged down by its heavy weighting to out-of-favour commodities and facing an uncertain election, is in positive territory.
The principal concern for investors in American equities is the seemingly unstoppable rise in the value of the dollar. The idea that this would make it attractive to hold US assets has been blown away by the reality that it is very bad news for America’s big multi-national corporations. The money they earn overseas is worth significantly less on translation back into dollars than it was this time last year. And their goods and services are far less competitive than they were.
In the final few months of 2014, companies such as Apple, Pfizer, Procter & Gamble and Microsoft began to grumble that the strength of the US currency was holding their profits back. Now the numbers themselves are beginning to confirm their fears. For the first time since 2009, in the depths of the post-Lehman slump, US company profits are expected to fall for two consecutive quarters.
Even without a soaring dollar, US profits would be under pressure from the collapse since last June in the oil price. Energy companies are the principal contributor to the earnings slide as oil and gas producers’ revenues have taken a hit, long before the expected boost to consumption starts to benefit other sectors. Analysts have slashed their forecasts in the early weeks of 2015.
If American shares were cheap, this recalibration of earnings expectations might not matter. But after pretty much trebling in value since the dark days of 2009, US stocks are actually the world’s most expensive. Not ridiculously so, by historical standards, but high enough that a temporary fall in profits has unsettled investor sentiment.
With the Federal Reserve likely next week to drop a key reference to being “patient” about the first hike in US interest rates, investors are unsurprisingly looking around for better places for their money. And for the first time in quite a while there are some half decent options available to them. Both Europe and Japan are engaged in massive economic stimulus programmes that are driving their currencies lower and underpinning financial asset prices. The US is no longer the only game in town. With the current bull market in US shares now ranking as the fourth longest since the Great Depression, it is unsurprising that people are questioning how long it can go on.
That’s the bad news. Before anyone turns their back on the world’s biggest stock market, however, they should consider the counter arguments. The first of these is that US growth is expected to bounce back in the second half of 2015 as consumers start to benefit from cheaper energy, offsetting the hit to producers that’s already being felt.
Secondly, one key measure of the US economy – job creation – is still firing on all cylinders. Ironically, one of the principal reasons for the market’s recent weakness was the strength of the jobs market – 295,000 new jobs were created in February and the unemployment rate is rapidly falling back to historic lows.
Thirdly, the US corporate sector recently notched up nearly four years of double-digit dividend growth. Over the past 15 quarters, dividends have grown at an annualised rate of over 14pc.
In an environment of persistently low interest rates, in which income is increasingly prized by investors, it is unsurprising that US shares have responded so positively. What they are not paying out as dividends, many other US companies are using to buy back their shares, which boosts earnings and makes valuations more palatable.
Finally, the US is home to some of the most profitable businesses on the planet. Its market is weighted towards the best-performing sectors – such as healthcare and technology.
The US stock market is no longer cheap and is more vulnerable than most markets to an arguably overdue correction. But it still deserves a place in any portfolio.
Tom Stevenson is an investment director at Fidelity Worldwide Investment. The views expressed are histweets at @tomstevenson63
This from the Bank of Korea’s policy statement on Thursday:
“Influenced by the economic recoveries in advanced countries and the low prices of oil, the Korean economy is expected to improve in the coming months, albeit at a moderate pace as structural factors limit private consumption. However, the slowdown in the Chinese economy may work as a downside risk.”
And this from the Bank of Thailand a day earlier:
“Exports of goods are expected to recover at a rate close to the previous projection, but with higher downside risks from a slowdown in trading partners’ economies, notably China.”
Given the two rate reductions, it looks like Asian policymakers are focused for now on China’s sneezes rather than the rosy cheeks of a healthier U.S. economy.
bloomberg: Eight of the biggest U.S. technology companies added a combined $69 billion to their stockpiled offshore profits over the past year, even as some corporations in other industries felt pressure to bring cash back home.
Microsoft Corp., Apple Inc., Google Inc. and five other tech firms now account for more than a fifth of the $2.10 trillion in profits that U.S. companies are holding overseas, according to a Bloomberg News review of the securities filings of 304 corporations. The total amount held outside the U.S. by the companies was up 8 percent from the previous year, though 58 companies reported smaller stockpiles.
The money pileup, reflecting companies’ incentives to park profits in low-tax countries, has drawn the attention of President Barack Obama and U.S. lawmakers, who see a chance to tap the funds for spending programs and to revamp the tax code. That effort is stalled in Washington, and there are few signs that tech companies will bring the profits back to the U.S. until Congress gives them an incentive or a mandate.
“It just makes no sense to repatriate, pay a substantial tax on it,” said Joseph Kennedy, a senior fellow at the Information Technology and Innovation Foundation, a policy-research group whose board of directors includes executives from Microsoft and Oracle Corp. “Computing and IT companies especially have a lot of flexibility in where they declare their profits.”
Microsoft, Apple and Google each boosted their accumulated foreign profits by more than 20 percent over the year, the largest increases by any of the 34 companies with at least $16 billion outside the U.S. International Business Machines Corp., Cisco Systems Inc., Oracle, Qualcomm Inc. and Hewlett-Packard Co. each added at least $4 billion.
The profits added by the eight technology companies accounted for 45 percent of the net gain in overseas funds among the corporations surveyed. At the same time, firms in some other industries felt enough pressure to meet domestic needs that they chose to take the tax hit by bringing money home.
US factory orders fell for a sixth straight month in January despite strong orders in the crucial civilian aircraft sector, the Commerce Department reported Thursday.Overall factory orders dropped 0.2 percent from December to $470 billion, slower than December’s 3.5 percent fall.Excluding the transportation sector — heavily dominated by cars and aircraft sales — new orders decreased by 1.8 percent in the month. Car sales were flat.There was some strength in the report however. Manufactured durable goods orders gained 2.8 percent after a 3.7 percent decline in December.There was strong growth in orders for power generation and transmission equipment, and computers and electronics.
HONG KONG. Bursa Asia jatuh. MSCI Asia Pacific Index turun 0,1% menjadi 145,37 dalam perdagangan di Hong Kong, pukul 4:17 p.m, Kamis (5/3).Pelemahan bursa Asia terjadi akibat adanya sentimen negatif, penurunan target pertumbuhan ekonomi China yang paling rendah selama 15 tahun ini. Sementara investor di Amerika Serikat (AS) juga menunggu data tenaga kerja dan industri jasa.Beberapa saham yang mempengaruhi indeks Asia Pacific antara lain, China Shenhua Energy Co dan Anhui Conch Cement Co. Saham perusahaan batubara dan semen tersebut turun hampir 2,6%. Sedangkan saham Olympus Corp turun 2,9%.Fan Cheuk Wan, Chief Investment Officer Credit Suisse Group AG untuk Asia Pacific mengatakan, penting bagi pemerintah China untuk melakukan tindakan mengatasi pelemahan pertumbuhan ekonomi.”Ini akan membuat bank sentral China semakin kuat melakukan kebijakan moneter longgar. Kami mengantisipasi kebijakan bunga dalam tiga bulan mendatang,” kata Fan Cheuk Wan, Kamis (5/3).
Seperti diketahui, Perdana Menteri China Li Keqian telah mengumumkan kemungkinan turunnya target pertumbuhan ekonomi China dari sebelumnya 7,5% menjadi 7%.
Sumber : KONTAN.CO.ID
INILAHCOM, Washington – Ekonomi Amerika Serikat tumbuh lebih lambat dari yang diperkirakan pada kuartal keempat 2014, tertekan oleh kenaikan lebih kecil dalam persediaan dan peningkatan lebih besar dalam impor, data revisi menunjukkan Jumat.
Departemen Perdagangan mengatakan produk domestik bruto (PDB) tumbuh 2,2 persen pada kuartal terakhir tahun lalu, merevisi lebih rendah estimasi sebelumnya 2,6 persen. Revisi turun ekspansi PDB sedikit lebih baik dari ekspektasi kenaikan 2,1 persen setelah pada kuartal ketiga melaju kuat 5,0 persen.
Menurut data ekonomi terbaru, pertumbuhan moderat pada kuartal keempat terutama mencerminkan peningkatan yang lebih kecil dalam investasi persediaan dan tingkat impor yang lebih tinggi sehingga mengurangi dari PDB, kata departemen.
Meskipun penurunan harga energi bisa mendorong belanja konsumen, pelemahan ekonomi global dan penguatan dolar membebani neraca perdagangan negara. Ekspor naik hanya 3,2 persen pada kuartal keempat, setelah naik 4,5 persen di kuartal ketiga dan melompat 11,1 persen di kuartal kedua.
Belanja konsumen, yang menyumbang sekitar 70 persen dari kegiatan ekonomi AS, merupakan pendorong utama pertumbuhan, naik 4,2 persen, tertinggi selama empat tahun.
Pengeluaran berkontribusi sekitar 2,8 persentase poin terhadap pertumbuhan kuartal keempat, bagian terbesar dalam hampir 10 tahun terakhir. [tar]
New York, Feb 10, 2015 (AFP)
Apple became the first company to reach a market value of $700 billion Tuesday as shares vaulted amid upbeat news on the US tech giant’s gains in the smartphone market and soon-to-arrive smartwatch.
Shares rose 1.9 percent to close at $122.02, lifting Apple’s market value to $710 billion, and making it the first company to hit the $700 billion milestone.
Apple chief executive Tim Cook, speaking at the Goldman Sachs Technology & Internet Conference, said Apple was hitting its stride.
“We’ve taken (the mobile operating system) iOS and extended it into your car, into your home, into your health. All of these are really critical parts of your life,” Cook said.
“We want one seamless kind of life. And so, I think that is huge for our future…We also did a lot of things to further our global footprint. And so, if you look at what we’ve done in China, we’ve opened more stores there. We’ve opened a lot more distribution there. Through the world, we’ve opened almost 20,000 new points of sale. We’ve opened 27 new Apple Stores, lot of flagship stores.”
Cook said Apple took some $50 billion in revenue in emerging markets over the past calendar year.
– Room to grow –
Brian White, analyst at Cantor Fitzgerald, said the leading tech company has even more room to grow.
“Given Apple’s powerful iPhone cycle, a big 4G ramp in China and the upcoming launch of Apple Watch in April, we believe there is still plenty to look forward to at Apple during this transformational cycle,” he said in a note to clients.
“At the same time, we believe Apple’s valuation has room to expand from depressed levels.”
Apple shares remain valued at reasonable levels, according to analysts, because of the whopping $18 billion quarterly profit reported recently by the iPhone and iPad maker.
Using the price-earnings ratio favored by Wall Street, Apple is valued at around 16 times its annual earnings, but Fitzgerald said the value was only around 10 times the projected earnings for the next fiscal year.
Apple is far ahead in market value from the number two company, oil giant Exxon Mobil, worth some $382 billion at the market close.
The record Apple quarterly profit — on unprecedented revenue of $74.6 billion — was driven by the sale of 74.5 million iPhones, well ahead of most analysts’ expectations.
Analysts are also seeing expanded adoption of the Apple Pay system that enables customers to purchase items with a tap of their iPhone, and many predict strong demand for the Apple Watch set for release in April.
Separately, Apple agreed to commit $848 million for solar energy to power its data centers, according to a statement from First Solar, Inc.
Cook called the effort “our biggest, boldest, and most ambitious project ever” and said it was part of Apple’s commitment on clean energy and corporate responsibility.
Apple will receive electricity from 130 megawatts under a 25-year power purchase agreement, “the largest agreement in the industry to provide clean energy to a commercial end user,” the solar firm said.
The 2,900-acre California Flats Solar Project occupies part of a property owned by Hearst Corporation in Cholame, California, with construction set to start this year.
Apple unveiled plans earlier this month to pump $2 billion over the coming decade into a solar-powered data center “global command” facility in the southwest state of Arizona.
<org idsrc=”isin” value=”US0378331005″>APPLE INC.</org>
Beijing, Feb 10, 2015 (AFP)
China’s inflation plunged to 0.8 percent in January, its lowest level for more than five years, official data showed Tuesday, heightening fears of deflation in the world’s second-largest economy.
The rise in the consumer price index (CPI) was sharply down from the 1.5 percent recorded in December, and was its weakest since November 2009 when it stood at 0.6 percent, according to figures provided by the National Bureau of Statistics.
Moderate inflation can be a boon to consumption as it encourages consumers to buy before prices go up, while falling prices encourage shoppers to delay purchases and companies to put off investment, both of which can hurt growth.
The fall in CPI was driven by tumbling international crude prices and warmer January temperatures than average, causing vegetable, fruit and aquatic product prices to fall, senior NBS analyst Yu Qiumei said in a statement.
Separately, the producer price index (PPI) — a measure of costs for goods at the factory gate and a leading indicator of the trend for CPI — declined for the 35th straight month in January.
The 4.3 percent year-on-year PPI fall was the biggest since October 2009. The last time PPI rose was three years ago.
Shanghai, Jan 21, 2015 (AFP)
Chinese shares were up 3.48 percent in afternoon trading Wednesday on buying of financial stocks, adding to gains from the previous day, dealers said.
The benchmark Shanghai Composite Index jumped 110.39 points to 3,283.44.
The Shenzhen Composite Index, which tracks stocks on China’s second exchange, gained 2.20 percent, or 32.55 points, to 1,509.39.
On Monday, the Shanghai index tumbled 7.70 percent, its biggest fall since June 2008, after authorities moved to rein in risky margin trading business.
But it rebounded Tuesday on better-than-expected economic growth figures and comments by the market regulator which denied the margin trading crackdown aimed to “suppress” a rally that sent the Shanghai market up more than 50 percent in 2014.
“The market continued its rebound from Tuesday, but it’s uncertain whether this correction is over,” Haitong Securities analyst Zhang Qi told AFP.
“Regulators certainly don’t want to see drastic rises and falls in the market. They want healthy and steady development,” he said.
Tokyo, Jan 20, 2015 (AFP)
The yen slipped in Asia on Tuesday as confidence was boosted by better-than-expected Chinese growth data, while the euro struggled against the dollar on expectations for more European Central Bank stimulus.
In Tokyo, the dollar rose to 118.21 yen against 117.53 yen in London on Monday, while the euro edged up to 136.88 yen from 136.69 yen.
The single currency weakened to $1.1579 from $1.1630.
Official data Tuesday showed China’s economy — the world’s second biggest — expanded 7.4 percent in 2014. While that marked the lowest annual growth in 24 years, it beat a 7.2 percent median forecast in an AFP survey of 15 economists.
“Markets took Chinese data to be slightly stronger than expected,” Shusuke Yamada, a strategist at Bank of America Merrill Lynch in Tokyo, told Bloomberg News.
“That’s underpinning (the) dollar-yen which is seen to have a firm correlation with risk sentiment.”
Investors tend to move into the yen during times of uncertainty and turmoil.
ECB policymakers hold their much-anticipated meeting on Thursday and analysts broadly expect it to announce a bond-buying scheme aimed at kickstarting lending in the struggling eurozone.
Those expectations have hammered the euro, which last week fell below $1.1500 for the first time in more than 11 years before recovering slightly.
Chronically low inflation across the eurozone has fuelled concern the region could slip into deflation — a sustained and widespread drop in prices — and has led to speculation that the ECB would be forced to act.
But the euro may drift higher if details of the bank’s stimulus fail to surprise investors, said Yuji Kameoka, chief foreign-exchange strategist at Daiwa Securities.
“The euro has limited downside in the near-term given that markets already priced in the ECB’s bond buying,” he said. ”
Dealers are also keeping an eye on Greece where an anti-austerity party is leading opinion polls ahead of a general election at the weekend, leading to fears the country could eventually exit the eurozone.
BEIJING – China telah menggebrak peta ekonomi dunia. Bahkan negara tersebut dijuluki Macan Asia, karena produk berlabel ‘made in China’ telah menggurita dan bahkan mengalahkan produk Amerika-Eropa. Ekonomi China bahkan mampu melompat di atas 11 persen. Namun itu cerita dulu. Kini langkah si Macan Asia mulai melambat.
Ekonomi China sepanjang 2014 hanya mencatatkan angka 7,4 persen. Bloomberg, Selasa (20/1/2014) memberitakan, angka ini cerminan kinerja ekonomi terburuk sejak 1990.
Data menunjukkan, pertumbuhan ekonomi kuartal IV-2014 hanya 7,3 persen, atau meningkat tipis dari median 2014 di posisi 7,2 persen. Padahal, Pemerintah China menargetkan growth domestic product (GDP) mencapai angka 7,5 persen.
Penurunan ini terjadi karena sejumlah faktor, di antaranya laju ekonomi per kuartalan yang sangat lambat. Selain itu stimulus China yang meleset dan lesunya sektor properti.
Menurut Head of Asia-Pacific Sovereigns Fitch Ratings Andrew Colquhoun, dalam penjelasannya kepada Okezone realisasi pertumbuhan China sesuai dengan espektasi dan ekonom dunia. Pertumbuhan China sangat riskan karena bergantung pada ekspansi kredit.
Melihat situasi ini, ekonomi China pada tahun ini pun diprediksi tidak secemerlang tahun-tahun sebelumnya.
“Kita memproyeksikan angka pertumbuhan China di 2015 dimulai dengan angka 6. Kami memperkirakan pertumbuhan China 6,8 persen tahun ini, dan akan lebih melambat pada 2016 di level 6,5 persen,” jelas Andrew.
JAKARTA– Harga tembaga melanjutkan kenaikan tiga hari berturut-turut setelah China memutuskan untuk meningkatkan infrastruktur. Pasar berspekulasi perkembangan infrastruktur di China mampu memulihkan perekonomian Negeri Tirai Bambu tersebut.
Daniel Hynes, analis Australia & New Zealand Banking Group Ltd., mengatakan pengumuman rencana pemerintah China untuk fokus kepada pembangunan infrastruktur memang membawa dampak positif ke pergerakan harga logam industri.
“Tapi untuk itu pasar butuh diyakinkan mengenai realisasinya, bila benar terealisasi maka menjadi sentimen positif untuk logam industri,” ujarnya seperti dilansir Bloomberg pada Senin (19/1/2015).
Pemerintah China mengumumkan pembangunan jaringan kereta api antara provinsi Shandong dengan Yunan telah disetujui.
Lalu, produksi industri China pada Desember 2014 diprediksi akan naik ke level 7,4% lebih tinggi dibandingkan November 2014 sebesar 7,2%.
Pada perdagangan sampai pukul 10:00 WIB, harga tembaga pengiriman tiga bulan di London Metal Exchange (LME) naik 1,51% menjadi US$5.715 per metrik ton, sedangkan harga tembaga berjangka di New York Commodity Exchange (COMEX) turun 0,53% menjadi US$2,6 per pon.
Source : Bloomberg http://market.bisnis.com/read/20150119/94/392350/harga-tembaga-kinclong-setelah-china-umumkan-bangun-jaringan-ka-shandong-yunan
Sumber : BISNIS.COM
JAKARTA—Harga tembaga di bursa London terus menguat akibat lonjakan belanja sektor infrastruktur di China sebagai konsumen terbesar dunia.
Harga logam bergerak naik setelah mencatat peningkatan dua hari tertinggi dalam 15 bulan.
Sebelumnya, harga komoditas tersebut menguat 1,1% sebagaimana dikutuip Bloomberg, Senin (19/1/2015).
Harga tembaga untuk pengiriman tiga bulan di bursa London Metal Exchange tercatat US$5.720,50 per metrik ton pada pukul 09:40 waktu Hong Kong atau pukul 08:40 WIB.
Pekan lalu harga logam itu anjlok 6,2% atau penurunan paling tajam selama hampir tiga tahun di tengah kekhawatiran permintaan akan turun.
Di bursa New York, kontrak tembaga untuk Maret turun 0,7% menjadi US$2,5995 per pound.
Sedangkan di bursa Shanghai harga logam pada bulan yang sama naik 1,3% menjadi US$6.700 per ton.
Beijing, Jan 13, 2015 (AFP)
China’s trade surplus rose 45.9 percent to 2.35 trillion yuan (around $380 billion) last year, as exports grew and imports shrank, the government announced Tuesday.
Exports increased 4.9 percent to 14.3 trillion yuan in 2014, while imports fell 0.6 percent to 12.04 trillion, the General Administration of Customs said. It did not immediately provide dollar totals.
Beijing, Jan 9, 2015 (AFP)
Chinese inflation rebounded marginally in December, the government said Friday, but economists warned of deflationary threats and called for more monetary stimulus to boost slowing growth in the world’s second-largest economy.
The consumer price index (CPI) rose 1.5 percent year-on-year in December, the National Bureau of Statistics announced, matching market estimates and marking an increase from a five-year low of 1.4 percent in November.
But for full year 2014, consumer inflation was 2.0 percent, the bureau said, down from 2.6 percent in 2013 and well below the government’s target of about 3.5 percent.
Also, the producer price index (PPI) — a measure of costs for goods at the factory gate and a leading indicator of the trend for CPI — declined for the 34th straight month.
The 3.3 percent year-on-year fall was larger than the 3.1 percent median forecast in a Bloomberg News survey, and the biggest since September 2012. The last PPI increase was in January 2012.
Moderate inflation can be a boon to consumption as it encourages consumers to buy before prices go up, while falling prices encourage shoppers to delay purchases and companies to put off investment, both of which can hurt growth.
“Authorities need to be vigilant on the rising risk of deflation,” ANZ economists Liu Li-Gang and Zhou Hao said in a note after the data were released.
China’s economy expanded 7.3 percent in the third quarter of last year, the slowest since 2009 at the height of the global financial crisis, and has showed continued weakness in the fourth quarter.
“We believe the weak inflation data in December was mainly the result of falling commodity prices, worsening overcapacity in upstream industries and weak growth momentum,” Nomura economists said in a note.
“We expect inflation to remain low in the coming months with concerns over deflation risks continuing to rise.”
China announces fourth-quarter and annual growth figures on January 20.
– Calls for action –
The data suggest authorities will announce fresh monetary easing, the Nomura economists said, adding they expect the central People’s Bank of China (PBoC) to cut interest rates in the second quarter of 2015 while lowering the amount of cash banks must keep on hand once in every quarter this year.
Reducing the reserve requirement ratio (RRR) increases the amount of money banks can lend out and help boost economic activity.
The last full-fledged RRR cut was in May 2012, though the PBoC carried out targeted reductions last year, part of a series of “mini-stimulus” steps introduced from April when growth began to slow.
The PBoC in November cut interest rates for the first time in more than two years in a bid to boost growth, though economists have said that move alone would be insufficient.
Liu and Zhou of ANZ also called for more monetary stimulus.
“In our view, Chinese authorities will need to use both structural reform measures as well as monetary policy tools to head off the risk of deflation, especially when domestic demand remains weak and commodity and energy prices continue to fall,” they wrote.
“We therefore believe that RRR cuts, or other monetary policy easing measures with similar effects, can be expected in (the first quarter of ) 2015.”
Food prices drove December’s inflation uptick, according to statistics bureau figures, rising 2.9 percent on-year from 2.3 percent in November.
Nonetheless falling oil and farm commodity prices are likely to add downward pressure this year, according to Julian Evans-Pritchard, China economist at Capital Economics.
But he wrote in a note: “With most households and firms set to benefit from the fall in inflation, we think concerns about deflation, at least in China’s case, are overplayed.”
Chinese authorities are trying to transform the country’s economy to one whereby its increasingly wealthy consumers drive growth. Chinese President Xi Jinping regularly speaks of a “new normal” in which GDP growth moderates to more sustainable levels as the country’s economy matures.
BEIJING. Suku bunga repo perbankan China turun terbesar dalam dua pekan terakhir setelah dana segar kembali masuk pasar di awal tahun. Suku bunga repo tujuh hari turun 50 basis poin menjadi 4,33%, kemarin (5/1).
Pada akhir tahun lalu, permintaan dana tinggi karena pengecekan dana oleh regulator serta permintaan dana menjelang liburan. Deng Haiqing, analis Citic Securities Co mengatakan, pencadangan menjelang libur mengetatkan pasar di akhir tahun. “Pekan ini, pengetatan di pasar uang mulai mereda karena tidak ada faktor yang mempengaruhi likuiditas,” kata Deng kepada Bloomberg.
Melonggarnya suku bunga repo ini sedikit memberi kabar baik di tengah kondisi ekonomi China yang sedang tertekan. Indeks manufaktur dalam Purchasing Managers’ Index (PMI) turun ke level 50,1 pada bulan Desember 2014 dari posisi 50,3 pada bulan sebelumnya.
Data resmi ini menunjukkan bahwa indeks manufaktur China berada di titik terendah dalam 1,5 tahun terakhir. Sedangkan, data PMI China keluaran HSBC Holdings Plc dan Markit Economics di level 49,6 yang menunjukkan kontraksi.
PMI sektor jasa justru membaik dari 53,9 pada bulan November 2014 menjadi 54,1 pada Desember 2014 lalu. Tapi, para pengamat menduga, pertumbuhan ekonomi China sepanjang tahun lalu berada di bawah target pemerintah pada 7,5%.
Analis Nomura Securities mengatakan, produksi pabrik yang tinggi menekan para produsen untuk memangkas harga. “Dengan rendahnya tekanan inflasi, kami memprediksi lebih banyak pelonggaran kebijakan pada kuartal pertama, termasuk pemangkasan rasio pencadangan perbankan sebesar 50 basis poin,” kata Nomura dalam risetnya.
Chang Jian, Kepala Ekonom China di Barclays memprediksi, penurunan biaya dana masih akan menjadi prioritas kebijakan China tahun ini. Pasalnya, penurunan suku bunga acuan pada November 2014 belum banyak berdampak pada suku bunga kredit.
Standard Chartered memprediksi, pertumbuhan ekonomi China tahun ini akan melambat menjadi 7,1% dibandingkan dengan prediksi tahun lalu sebesar 7,3%. Standard Chartered mendasarkan prediksi atas tren yang terjadi tahun lalu. “Mencapai angka pertumbuhan ini tidak akan mudah karena pelemahan pasar tenaga kerja, tekanan deflasi dan tingginya suku bunga kredit,” kata Standard Chartered dalam laporannya.
Angka prediksi Standard Chartered ini sejalan dengan outlook dari Bank Sentral China. People’s Bank of China (PBOC) memperkirakan, pertumbuhan ekonomi China tahun ini akan melambat menjadi 7,1%. Dalam laporan Desember 2014 yang dikutip kantor berita Xinhua, PBOC memperkirakan, pertumbuhan ekonomi China di 2014 sebesar 7,4%, sedikit di bawah target pemerintah.
Sementara itu, Chinese Academy of Social Sciences (CASS) meramal, pertumbuhan ekonomi tahun ini hanya 7%. Angka prediksi ini jauh di bawah rata-rata pertumbuhan ekonomi dalam 35 tahun terakhir. Pertumbuhan ekonomi tahunan rata-rata China antara 1978 hingga 2013 hampir 10%. Sedangkan, rata-rata pertumbuhan ekonomi tahunan antara 2003-2007 mencapai lebih dari 11,5%.
Sumber : KONTAN.CO.ID
grafik angka inflasi amrik 2009-2014 menunjukkan bahwa lom ada kebutuhan untuk meningkatkan suku bunga dalam waktu dekat … well, mungkin mesti tunggu waktu s/d setidaknya kuartal 2 atawa 3 2015 saat inflasi bisa naek di atas 2 % … let’s c 🙂
Look for Fed Rate Increase Mid-Year Even as Inflation Remains Mild
Economists are slashing U.S. inflation forecasts for 2015 as oil prices tumble. What’s not changing are predictions that the Federal Reserve will raise its benchmark interest rate anyway, probably around mid-year.
“We’re still saying June with risks to September,” said Michael Gapen, the New York-based chief U.S. economist for Barclays Plc. The Fed “can push rates higher in the middle of the year, even though visually that may look awkward if headline inflation is around zero.”
A stronger dollar, slowing global growth and cheaper oil are holding down costs for goods such as televisions and autos. Fed policy makers will probably look past that and see an improving labor market that will force employers to offer higher wages. Those costs will soon push up the price of such things as rent and restaurant meals, no matter what happens overseas, giving the central bank room to raise interest rates that have been stuck near zero for six years.
The personal consumption expenditure, or PCE, price index that’s the Fed’s preferred measure will be up 0.5 percent in the second quarter from the same time in 2014, Barclays economists projected on Dec. 19. That’s down from a previous forecast of 1.2 percent. The consumer-price index, a separate gauge, is projected to show a small decline in the 12 months through June.
The Fed’s goal is for PCE inflation to climb around 2 percent a year.
Core prices, which exclude food and fuel, will rise 1.7 percent over the same period, according to the analysis by Barclays. That compares with a previously estimated 1.9 percent.
“Low pass-through into core from falling energy prices, and a gradually improving labor market leads to some wage and services inflation” this year that will help assuage any concern the U.S. is catching a disinflation bug, said Gapen, a former Fed economist.
Too-low inflation hurts debtors by making it harder to pay off loans. Also, the longer central banks undershoot their price targets, the more their ability to deliver stability will be questioned, undermining expectations further and putting even more downward pressure on prices.
Fed Chair Janet Yellen and her colleagues probably will face a communications challenge as they pave the way for the central bank’s first interest-rate increase since 2006. Policy makers have said they believe the plunge in fuel prices will prove temporary, which will be more difficult to substantiate as inflation gauges keep sliding six months from now.
Energy “is going to be pushing down headline inflation and may even spill over to some extent to core inflation,” Yellen said in a Dec. 17 news conference after the central bank’s policy meeting. “But at this point, although we indicated we’re monitoring inflation developments carefully, we see these developments as transitory.”
An improving economy and labor market will help “inflation to move gradually back toward its objective,” she said.
The Commerce Department reported last week that the core PCE price index climbed 1.4 in the year ended in November, which means Barclays is still projecting it will move toward the Fed’s goal, just take longer to get there.
That’s probably enough from central bankers’ perspective to prompt a rate increase, said Omair Sharif, an economist with Newedge USA LLC, a New York-based brokerage firm.
“It may take three years to get back to 2 percent, but as long as we’re not going back to 1 percent, they seem OK with it,” said Sharif.
Regional Fed bank gauges are signaling inflation will be slow to accelerate. The Dallas Fed’s “trimmed mean” index, which eliminates the components in the PCE price gauge that show the biggest changes in any month, increased 1.6 percent in November from a year earlier, holding within the 1.6 percent to 1.7 percent range it’s been in since April.
Including food and fuel, the PCE price index rose 1.2 percent in the 12 months ended in November, the smallest gain since March, according to Commerce Department figures issued last week. The rule of thumb is that it will converge toward the trimmed mean reading over the next 12 months, pointing to a gradual pickup, according to the Dallas Fed’s report.
The Dallas measure featured the biggest one-month drop in goods prices excluding food and fuel in data dating back to 1977, according to the report. It was “fairly broad-based” with clothing and footwear, furnishings and household durable equipment, and recreational goods and vehicles all showing price declines of about 10 percent at an annualized rate, senior economist Jim Dolmas wrote.
Meanwhile, core services climbed at an annualized 2.4 percent in November, exceeding the 2.2 percent advance over the past year. The increase was paced by gains in the costs of paramedical services, rent and dining out, the report showed.
Economists at Goldman Sachs Group Inc. are among those forecasting core inflation won’t show signs of moving toward the Fed’s goal this year as the upward pressure on prices from an improving economy will be more than offset by the impact of the drop in oil and stronger dollar. An appreciating currency makes goods produced by the nation’s trading partners less expensive to U.S. shoppers.
The Goldman economists maintain that September will be the most likely month for the Fed to begin raising rates even as they now project the core PCE price index will rise 1.3 percent by the second quarter, down from a prior estimate of 1.5 percent.
If it’s lower than 1.5 percent by June, as they predict, and wages show only a modest pickup, then the central bank will probably hold off, Jan Hatzius, Goldman’s New York-based chief economist, wrote in a Dec. 26 note. Should inflation undershoot even their below-consensus forecast, the Fed could wait until 2016, he said.
While Barclays’s Gapen acknowledges a rate liftoff could be delayed, the Fed has to make decisions based on where policy makers think the economy and inflation will be in 12 to 18 months, he said. And by June, the jobless rate already will be close to the 5.2 percent to 5.5 percent that Fed officials say is consistent with full employment, a sign bigger pay increases are in store.
“If you can run the domestic economy hot enough, then you can have services inflation that offsets a weak global backdrop,” said Gapen. “What we would be looking for is just broad-based services inflation related to wages.”
(Reuters) – The number of Americans filing new claims for unemployment benefits unexpectedly fell last week, suggesting the labor market continued to strengthen.
While other data on Thursday showed factory activity in the mid-Atlantic region braked sharply in December, that followed hefty gains in the prior month and analysts said manufacturing remained on solid ground.
“The economy continues to run hard as it finishes out the year,” said Chris Rupkey, chief financial economist at MUFG Union Bank in New York.
WASHINGTON, Dec 17, 2014 (AFP)
President Barack Obama on Tuesday signed a spending bill to keep most of the federal government funded for almost a year, the White House said.
Obama signed the act “which provides fiscal year 2015 full-year appropriations through September 30, 2015 for all agencies except the Department of Homeland Security, for which appropriations are provided instead through February 27, 2015,” White House spokesman John Earnest said.
On Saturday, Congress passed a $1.1-trillion spending bill for fiscal year 2015, capping a week of acrimonious wrangling while averting a government shutdown and sending the measure to Obama.
By funding the Department of Homeland Security until only February, it sets up a showdown over Obama’s controversial immigration plan early next year, when a Congress under full Republican control will take another shot at rolling back Obama’s executive order shielding millions from deportation.
The battle over funding has been a bruiser. It included a revolt by House Democrats that nearly sank the measure last week, and procedural delay tactics in the Senate.
Congress needed to pass funding extensions twice in as many days to keep government from tumbling into a shutdown, as leaders struggled to get the funding across the finish line and bid farewell to the 113th Congress, one of the least productive sessions in modern history.
BEIJING, Dec 16, 2014 (AFP)
Foreign investment into China accelerated in November, government data showed Tuesday, despite a worsening slowdown in the world’s second-largest economy and concerns over business risks.
Foreign direct investment (FDI) — which excludes financial sectors — rose 22.2 percent year-on-year, the commerce ministry said, totalling $10.36 billion.
The figure compares with an increase of 1.3 percent in October to $8.53 billion. FDI had hit a four-year-low in August of $7.20 billion.
For the first 11 months of 2014, FDI amounted to $106.24 billion, the ministry said, an increase of 0.7 percent year-on-year.
“Investment from major countries and regions was generally stable,” commerce ministry spokesman Shen Danyang said.
Chinese authorities have this year launched anti-monopoly, pricing and other inquiries into foreign firms in sectors ranging from auto manufacturing and pharmaceuticals to baby milk, fuelling fears Beijing is targeting them, a charge the commerce ministry repeatedly denies.
China’s appeal as an investment destination has also been declining in recent years owing to rising labour and land costs and competition from other Southeast Asian countries such as Vietnam.
Officials have also blamed source country factors, such as Washington’s drive to move industrial production back to the United States.
China’s economy expanded 7.3 percent in the July-September quarter, slower than the 7.5 percent expansion in the previous three months and the worst result since 2009 at the height of the global financial crisis.
In the first 11 months, FDI fell 39.7 percent from Japan to $4.08 billion, 22.2 percent from the US to $2.46 billion, 9.8 percent from the European Union (EU) to $6.17 billion, and 23.6 percent from the ASEAN group of Southeast Asian countries to $5.87 billion.
British investment, meanwhile, jumped 28 percent to $1.25 billion, while that from South Korea increased 22.9 percent to $3.59 billion.
Investment by Chinese companies overseas, meanwhile, fell in November for the second consecutive month, the ministry said.
Overseas direct investment (ODI) was down 26.1 percent year-on-year in November at $7.92 billion and stood at $89.8 billion for the first 11 months, up 11.9 percent.
ODI had fallen 12.2 percent in October to $6.92 billion after soaring 90.5 percent in September to $9.79 billion.
China has been actively acquiring foreign assets, particularly energy and resources, to power its economy, with firms encouraged to “go out” and make overseas acquisitions to gain market access and international experience.
Officials have said outward investment could exceed FDI this year, though with just one month to go that looks increasingly unlikely given the current position and trends.
Over the 11-month period, Chinese investment into the US rose 27.1 percent to $4.64 billion, the ministry said.
Without providing total amounts, the ministry also said that investment to the EU nearly tripled, that to Japan rose 80 percent, while to Hong Kong it increased 13.3 percent.
It added that investment to Australia fell 29.8 percent during the period, while to Russia it dropped 76.7 percent and to ASEAN 3.8 percent.
HONG KONG, Dec 10, 2014 (AFP)
Hong Kong stocks edged up Wednesday after a two-day sell-off, while Shanghai rebounded strongly from the previous day’s slump as more weak Chinese inflation data fuelled hopes for further easing measures.
The Hang Seng Index added 0.16 percent, or 38.69 points, to 23,524.52 on turnover of HK$109.93 billion ($14.18 billion).
The Shanghai composite index, which slumped 5.43 percent Tuesday, surged 2.93 percent, or 83.74 points, to 2,940.01 on turnover of 535.0 billion yuan ($87.4 billion).
The Shenzhen Composite Index, which tracks stocks on China’s second exchange, added 3.50 percent, or 49.14 points, to 1,452.53 on turnover of 304.6 billion yuan.
SHANGHAI, Dec 09, 2014 (AFP)
Shanghai shares plunged more than five percent on profit-taking Tuesday, only a day after the benchmark composite index broke the 3,000 mark for the first time in more than three years.
The index closed down 5.43 percent, or 163.99 points, at 2,856.27 on record turnover of 793.4 billion yuan ($128.2 billion).
The Shenzhen Composite Index, which tracks stocks on China’s second exchange, sank 4.31 percent, or 63.26 points, to 1,403.39 on turnover of 450.5 billion yuan.
Chinese shares have surged in recent weeks, with the Shanghai index rising more than 20 percent in the month to Monday’s close, helped by a surprise interest rate cut on November 21.
The climb came despite signs of slowing economic growth, and was driven by expectations of further policy easing measures in response to more bad economic news.
But investors took profits Tuesday after authorities announced a new rule late Monday tightening the use of corporate bonds as collateral for short-term financing — a move analysts said will curb investors’ ability to trade on margin.
In a commentary Monday on the rising markets the official Xinhua news agency had warned: “For individual investors, who significantly outnumber institutional investors in domestic exchanges, greed now appears to triumph fear, with extraordinary, if not maniacal, numbers of new account openings and purchases that had not been seen for years.
“Should trends reverse, the volatility must not be understated.”
Combined turnover reached a record 1.2 trillion yuan on Tuesday. The Shanghai volume was also an all-time high, analysts said.
BEIJING, Dec 01, 2014 (AFP)
China’s manufacturing growth skidded to an eight-month low in November, an official survey showed Monday, signalling further downward pressure on the world’s second-largest economy.
China’s official Purchasing Managers’ Index (PMI) released by the National Bureau of Statistics came in at 50.3 last month, lower than the 50.8 recorded in October and the weakest since a similar 50.3 reading in March.
The index, which tracks activity in factories and workshops, is considered a key indicator of the health of China’s economy, a major driver of global growth. A figure above 50 signals expansion, while anything below indicates contraction.
The results came after a closely watched private survey fell to a six-month low and showed manufacturing stagnating.
British bank HSBC’s preliminary PMI for November came in at the 50.0 breakeven point dividing expansion and contraction, the bank said last month. It was lower than October’s 50.4 and the weakest reading since May’s 49.4.
HSBC is scheduled to release its final reading for November on Monday.
China’s central bank last month unexpectedly cut benchmark interest rates for the first time in more than two years, as authorities seek to prop up flagging growth.
The cut came after a string of disappointing data showed the Chinese economy is struggling with not just stalling factory growth, but other problems including soft exports and a weakening property market.
China’s economy expanded 7.3 percent in the July-September quarter, down from 7.5 percent in the previous three months and the slowest since 2009 at the height of the global financial crisis.
The People’s Bank of China on November 21 lowered its one-year rate for deposits by 25 basis points to 2.75 percent and its one-year lending rate by 40 basis points to 5.6 percent, a statement said.
China’s housing prices fell on a monthly basis for the seventh straight month in November, a survey showed Sunday, as the country’s property market weighs on growth.
The average price of a new home in China’s 100 major cities was 10,589 yuan ($1,720) per square metre in November, down 0.38 percent from October, the independent China Index Academy said in a statement.
The fall was a slight improvement from the 0.40 percent month-on-month drop in October, previous figures showed.
Liputan6.com, Singapura – Bursa saham Asia menguat di awal pekan setelah indeks saham Amerika Serikat (AS) mencapai rekor. Selain itu, China juga memotong suku bungasehingga memicu optimisme ekonomi global.
Indeks saham MSCI Asia Pacific, indeks saham acuan regional menguat 0,5 persen menjadi 475,75 pada pukul 09.02 waktu Seoul, Korea Selatan. Penguatan indeks saham itu didorong dari indeks saham Korea Selatan Kospi menguat 1 persen. Indeks saham Australia mendaki 1,4 persen. Sedangkan indeks saham Selandia Baru sedikit baru.
Sementara itu, bursa saham Jepang libur hari ini memperingati hari Labour Thanksgiving. Indeks saham Hong Kong Hang Seng futures menguat 2,1 persen.
Bursa saham Asia dipengaruhi sentimen langkah kebijakan pemangkasan suku bunga bank acuan oleh bank sentral China pada pekan lalu. Bank sentral China memangkas suku bunga acuan untuk pertama kalinya sejak Juli 2012 telah meningkatkan dukungan bagi perekonomian terbesar kedua di dunia ini. Suku bunga pinjaman berkurang 0,4 persen menjadi 5,6 persen. Sedangkan suku bunga deposito diturunkan 0,25 persen menjadi 2,75 persen.
Langkah bank sentral China ini mengikuti arah bank sentral Eropa dan Bank of Japan (BoJ) untuk meningkatkan stimulus baru.
“Stimulus telah memperbaiki pasar saham selama enam tahun terakhir, dan ada sinyal ini akan terus diperjuangkan pasar. Sekarang tiga dari empat bank sentral terbesar di dunia aktif meransang masing-masing ekonomi domestik,” ujar Evan Lucas, Market Strategist IG Ltd, seperti dikutip dari Bloomberg, Senin (24/11/2014).
Sementara itu, Head of Dynamic Asset Allocation AMP Capital Investors Ltd, Nader Naeimi menuturkan, bank-bank sentral dapat menjadi agresif dalam memangkas suku bungakarena inflasi tidak menjadi masalah. “Kami telah mendapatkan kejutan dari bank sentral. Ada kesempatan untuk melihat langkah dari bank sentral Eropa segera,” kata Nader. (Ahm/)
HONG KONG, Nov 16, 2014 (AFP)
The stock exchanges of Hong Kong and Shanghai on Monday launch a much-anticipated trading link that will see billions of dollars in daily cross-border transactions and partially open up China’s closeted equities markets to the world.
After weeks of delays the Shanghai-Hong Kong Stock Connect finally kicks off, giving international investors access to companies in the world’s number two economy, while allowing mainland investors to trade shares in Hong Kong.
The link-up, which was described by the Hong Kong Monetary Authority (HKMA) as a “milestone”, is seen as a key step towards greater financial liberalisation in China’s economy as its leaders embark on a slow process of reform.
“It definitely is a game changer, it brings a new dimension to the market and new dynamics as well,” Jackson Wong, associate director for Simsen International Financial Group in Hong Kong, told AFP, calling it a “win-win” situation.
“If all this goes well, China will probably put in more financial products, not only stocks,” he said, explaining that foreign investors currently can only participate in the limited trading of Chinese financial products.
“The whole programme will attract more foreign funds. When you have more funds, that will help the stocks on both exchanges.”
– Strict controls remain –
The scheme is expected to allow the equivalent of $3.8 billion a day in cross-border transactions.
China’s premier Li Keqiang announced plans for the project in April as part of Beijing’s push to liberalise its economy and gradually to make the yuan more freely convertible.
But it is subject to strict limits in order to preserve capital controls in China, where Communist authorities keep a tight grip on the yuan currency.
If an investor buys stocks in the other market, when they sell the money can only go back to their home market account, a so-called “closed path” to prevent “hot money” leaking out.
Beijing has granted an initial cumulative quota of 250 billion yuan ($41 billion) for trading of Hong Kong stocks, while 300 billion yuan will be allowed for the Shanghai market, with daily allowances of 10.5 and 13 billion yuan respectively.
In preparation for the launch the HKMA, Hong Kong’s de facto central bank, on Wednesday said it would lift a daily cap for converting the local dollar to yuan to facilitate the trading link.
Analysts say the lifting of the limit will bring easier access to renminbi for local residents and encourage investors to use the currency.
The scheme is a long time in the making. A similar idea, the stock “Through Train”, was floated in 2007 but derailed because of the global financial crisis.
And the latest plan was due to kick off last month but was delayed, with technical issues blamed.
However, while there is big interest in the programme, some Chinese traders are reticent.
“The two markets differ in terms of trading rules and time, so there’s going to be a process of mutual adaptation,” Jiang Shiqing, a Shanghai-based strategist with Industrial Securities told AFP.
“At (the) current stage, I have no intention (of buying Hong Kong stocks through the scheme). I want to put my limited funds in a market I’m more familiar with,” Steven Zhou, an investor based in the eastern Chinese city of Wuxi, said.
BEIJING, Nov 11, 2014 (AFP)
A summit of Asia-Pacific leaders supported a China-backed “roadmap” towards a vast free trade area, Chinese President Xi Jinping said Tuesday.
The Asia-Pacific Economic Cooperation summit “approved the roadmap for APEC to promote and realise the Free Trade Area of the Asia-Pacific”, Xi said at the close of the Beijing meeting, adding the move “symbolises the official launch of the process towards the FTAAP”.
WASHINGTON, Nov 03, 2014 (AFP)
The US manufacturing sector picked up speed in October after a dull September, with companies reporting rising orders and more job creation, but a significant slowdown in price gains, according to data released Monday.
The Institute for Supply Management’s purchasing managers index for last month jumped to 59.0 from 56.6 the previous month, though that put it back at the same level as in August.
A PMI reading above 50 indicates expansion.
Out of 18 industries in the survey, the ISM reported that only one said activity contracted last month — the petroleum and coal product sector.
The index component for new orders jumped to 65.8 from 60.0, and production sped up slightly to 64.8 from 64.6.
Employment in the sector also grew faster, the sub-index rising to 55.5 from 54.6.
Manufacturers also reported a slowly growing backlog of orders, after order books shrank in September.
A survey respondent in the food and beverage industry said orders ahead of the year-end holiday season “are exceeding seasonal forecasts” and that customers “are demanding additional quantities above prior orders.”
A respondent in the computer industry called October “another strong month in terms of business growth.”
NEW YORK, Oct 22, 2014 (AFP)
The dollar gained against other major currencies Wednesday after a slight but unexpected rise in US inflation, while the market continued to speculate about eurozone monetary policy.
US consumer prices rose slightly in September, with the consumer price index (CPI) up 0.1 percent, the Labor Department said.
Analysts had expected prices to remain unchanged from August, when they fell 0.2 percent for the first time in a year and a half.
Excluding food and energy, prices still rose 0.1 percent in September.
The rise in US consumer prices “is probably what drew the most attention in the market today, supporting a little the dollar against the euro and the yen,” said Vassili Serebriakov of BNP Paribas in New York.
Year-over-year, the CPI remained steady at 1.7 percent in September, well below the Federal Reserve’s 2.0 percent inflation goal for price stability.
“The headline surprisingly rose, and some of the components edged higher but overall, inflation remains in control and the core measure remains below the Fed’s two percent watch,” said Jennifer Lee, senior economist at BMO Economics.
Rumors that the European Central Bank could step up its monetary stimulus, including by buying corporate bonds, continued to percolate.
A member of the ECB’s decision-making governing council, Belgium National Bank chief Luc Coene, said on Wednesday that several of his colleagues had mentioned the idea of buying corporate bonds but that it had yet to be seriously discussed.
“Investors remain hooked on declarations or rumors swirling around the central banks,” noted Franklin Pichard, director of Barclays Bourse in Paris.
Possible action of the ECB would have what it takes “to restore a semblance of optimism in an uncertain world,” he added.
<pre> 2100 GMT Wednesday Tuesday
EUR/USD 1.2643 1.2714
EUR/JPY 135.46 136.04
EUR/CHF 1.2060 1.2068
EUR/GBP 0.7878 0.7890
USD/JPY 107.14 106.99
USD/CHF 0.9538 0.9490
GBP/USD 1.6049 1.6113
BEIJING, Oct 21, 2014 (AFP)
China’s economy expanded 7.3 percent year-on-year in July-September, official data showed Tuesday, slumping to a five-year low despite official efforts to shore up growth the world’s second-largest economy.
The third-quarter figure announced by the National Bureau of Statistics was lower than expansion of 7.5 percent in the previous three months, but exceeded the median forecast of 7.2 percent in an AFP survey of 17 economists.
INILAHCOM, New York – Rilis data ekonomiGDP Chinapasca penutupan Wall Street) kemarin (21/10, WIB) dapat mempengaruhi pasar hari ini. Tapi pasar berharap akan ada sentimen positif dari Negeri Tirai Bambu itu.
Menurut data polling Reuters, ekonomi China pada periode Januari-September diperkirakan akan tumbuh 7,2%. Pertumbuhan ini menjadi yang paling RENDAH sejak kuartal pertama 2009. Juga lebih rendah dbandingkan pertumbuhan pada tiga bulan sebelumnya yang naik 7,5%.
Kemarin Wall Street ditutup menguat, setelah Apple melaporkan kenaikan earningnya sebesar 1,9%. Kenaikan ini mengkompensasi penurunan saham IBM yang anjlok sebesar 7,4% karena earnings kuartal ketiganya berada di bawah estimasi.
Kenaikan saham Apple ini menghapus penurunan DJIA yang 119 poin. Pada saat pasar ditutup, Nasdaq juga menguat 1,4%. (edm)
NEW YORK, Oct 16, 2014 (AFP)
The dollar rallied against the euro and the yen Thursday, after newly-released data suggested the US economy remains comparatively strong.
The Department of Labor reported that initial US jobless claims for the week ending October 11 fell to 264,000, the lowest level since 2000.
Then the Federal Reserve said US industrial production rose a robust 1.0 percent in September, recovering from an unexpected drop in August.
The two reports helped counteract disappointing data earlier in the week, including a poor September retail sales report that pushed the dollar lower Wednesday.
The move Wednesday came as traders perceived a higher chance the Federal Reserve would wait longer before raising benchmark interest rates.
“Any delay in expected monetary normalization by the Fed will indeed hurt the dollar,” said Omer Esiner, chief market analyst at Commonwealth Foreign Exchange.
“However, the dollar is likely to remain underpinned by the view that America’s economy remains the ‘cleanest shirt in the hamper’.”
<pre> 2100 Thursday Wednesday
EUR/USD 1.2809 1.2834
EUR/JPY 136.19 135.94
EUR/CHF 1.2072 1.2065
EUR/GBP 0.7959 0.8012
USD/JPY 106.33 105.91
USD/CHF 0.9425 0.9400
GBP/USD 1.6091 1.6015
BEIJING, Oct 15, 2014 (AFP)
Inflation in China fell to 1.6 percent in September, the government said Wednesday, below analysts’ forecasts and the lowest in the world’s second-largest economy for almost five years.
The consumer price index (CPI) figures released by the National Bureau of Statistics represented a slowdown in year-on-year inflation from 2.0 percent in August.
It was the lowest since January 2010. Analysts polled by Dow Jones Newswires had predicted 1.7 percent.
The figures fall well short of the 3.5 percent annual target set by the government in March, and signal that deflationary pressures are rising.
Moderate inflation can be a boon to consumption as it encourages consumers to buy before prices go up, while falling prices encourage shoppers to delay purchases and companies to put off investment, both of which can weigh on growth.
The latest figures give authorities more room to take steps to stimulate the economy, as statistics suggest that Chinese expansion — which stood at 7.7 percent last year, maintaining its slowest pace in more than a decade — is weakening.
“China’s soft inflation profile heightens the risk of deflation, thus requiring further monetary policy easing,” ANZ analysts said in a research note.
They attributed the sluggish price increases to the country’s ongoing fight against corruption and a government austerity drive.
“The anti-graft campaign could have significantly eased upward pressures on prices. Notably… the price of tobacco and liquors has dropped to negative territory since September 2013,” they said, referring to arguably the two most popular gifts in the country.
– Growth concerns –
China’s exports and imports both rose more than expected in September, Customs data showed Monday in a positive signal, but analysts warned that fundamentals remained weak.
Industrial production growth slowed sharply in August to its lowest level for more than five years, official data showed last month, while house prices have fallen for five consecutive months.
Officials are targeting economic growth of “about 7.5 percent” this year, the same as last year’s objective.
The goal is normally exceeded, but senior officials have repeatedly sought to play down its significance this year.
China’s third-quarter gross domestic product figures are due next week.
Last week the World Bank cut its forecast for Chinese growth to 7.4 percent for 2014 and 7.2 percent for 2015. The International Monetary Fund left its predictions unchanged at 7.4 percent and 7.1 percent, but warned of “near-term growth risks”, especially in real estate.
China’s vast and crucial property sector is struggling in the face of oversupply.
A sharp slowdown in food price increases, from 3.0 percent in August to 2.3 percent in September, drove the inflation decline, the NBS said.
But some economists were less concerned about deflation.
Julian Evans-Pritchard, an analyst with research firm Capital Economics, said China’s inflation remains highly sensitive to pork prices, which are set to rise.
“We still expect inflation to edge up again over the coming quarters, though it is unlikely (to) pick up enough to become a policy concern,” he said in a report.
China’s producer price index (PPI) — a measure of costs for goods at the factory gate and a leading indicator of the trend for CPI — fell 1.8 percent year-on-year in September, the NBS said separately.
The last PPI increase was in January 2012, when it rose 0.7 percent.
BEIJING, Oct 13, 2014 (AFP)
China’s trade surplus more than doubled to $31.0 billion in September, official data showed Monday, as exports jumped while imports increased at a slower rate.
Exports rose 15.3 percent year-on-year to $213.7 billion, the General Administration of Customs announced, while imports climbed 7.0 percent to $182.7 billion.
American Exceptionalism Thrives Amid Struggling Global Economy
The U.S. is proving to be an oasis of prosperity in the midst of a troubled world economy.
Unemployment (USURTOT) dropped to a six-year low of 5.9 percent in September as payrolls rose by a greater-than-forecast 248,000, a Labor Department report showed yesterday. Other data this week showed U.S. factories had their strongest quarter in more than three years, while exports rose to a record in August.
St. Louis-based Macroeconomic Advisers bumped up its estimate of third-quarter growth to 3.3 percent, from 2.8 percent, after government data published yesterday showed the U.S. trade deficit shrank in August to its lowest level in seven months.
“The internal dynamics of the economy are very strong right now,” said Nariman Behravesh, chief economist in Lexington, Massachusetts, for consultants IHS Inc. “We can withstand a lot of shocks.”
U.S. stocks rose with the dollar as the jobs data boosted confidence in the economy. After weakening earlier in the week on concerns about global growth, the Standard & Poor’s 500 Index rose 1.1 percent to 1,967.9 yesterday in New York. The Bloomberg Dollar Spot Index climbed to a four-year high.
The solid performance by the U.S. contrasts with what’s happening in much of the rest of the world. The euro area’s economy stagnated in the second quarter and is suffering from the softest inflation in five years, while a consumer-tax increase in Japan triggered its biggest economic contraction since 2009.
China’s economy, which helped bring advanced economies out of the recession in 2009, this year may undershoot the government’s growth target of about 7.5 percent amid a property slump and the slowest expansion in factory output in five years.
“Matters can be described as American exceptionalism,” said Larry Hatheway, chief economist at UBS AG in London. “The U.S. is the only large economic bloc experiencing an acceleration of growth, preparing for a tightening of monetary policy and enjoying an appreciating currency.”
The divergence leaves foreign finance chiefs open to criticism from U.S. officials when they all gather in Washington next week for the annual meetings of the International Monetary Fund and World Bank.
White House economic adviser Jeffrey Zients this week identified Europe as the U.S.’s “number one area” of economic concern and said its policies are “too tight.”
The U.S. isn’t immune to the weaknesses evident elsewhere, of course. After August’s strong trade numbers, a coming slowdown in U.S. exports and a rise in imports will probably clip about a quarter percentage point off U.S. growth, according to David Stockton, a former director of economic research at the Federal Reserve.
Still, the U.S. outlook remains “relatively positive,” said Stockton, now a senior fellow at the Peterson Institute for International Economics in Washington. He sees the economy expanding at about a 3 percent annual rate through the end of next year, markedly faster than the 2.2 percent pace it has averaged since the end of the recession in June 2009.
That’s also much stronger than Stockton’s forecast of 2015 growth of 1.1 percent in the euro area and 1.5 percent in Japan.
Former Fed Chairman Alan Greenspan coined the term “oasis of prosperity” in the late 1990s as he pondered the ability of the U.S. economy to thrive while much of the rest of the world was suffering, particularly crisis-hit Asia.
Now, the U.S. is breaking away from the rest of the world partly because it has made more progress in working off the debt-driven excesses that helped precipitate the worst recession since the Great Depression. Only the U.S. and Germany among major economies have reduced total public and private debt as a share of GDP since 2007, according to data compiled by the McKinsey Global Institute.
The others are still wrestling with the consequences of too much credit. Japan went ahead with its consumption-tax increase earlier this year in a first step toward tackling its huge government debt. China is struggling to rein in a shadow banking sector composed of trusts, leasing companies and other less-regulated financial firms. And banks in the euro area are waiting to see how they fared in asset reviews and stress tests carried out by their regulators.
“The U.S. is probably three-quarters of the way through its deleveraging process, maybe even more,” Behravesh said. “Europe is probably not even at the half-way point and China is just starting.”
A combination of reduced debt and rising stock and property prices boosted U.S. household net worth to a record $81.5 trillion in the second quarter from a low of $55 trillion in the last recession, according to data from the Fed.
Companies in the S&P 500 Index are the healthiest in decades, with the lowest net debt to earnings ratio in at least 24 years, $3.59 trillion in cash and marketable securities, and record earnings per share.
The improved balance sheets are allowing households and corporations to step up their spending.
Consumer outlays rebounded in August as employment gains revived household earnings growth and encouraged Americans to return to shops and car dealerships. The 0.5 percent increase in purchases exceeded forecasts and followed little change in July, Commerce Department data showed.
Companies are putting their profits to work by increasing capital investment. Orders for non-military capital goods excluding aircraft rose 0.6 percent in August after a 0.2 percent drop the previous month, according to separate Commerce Department figures.
“Our economy isn’t just primed for steadier, more sustained growth,” Obama said. “America is better poised to lead and succeed in the 21st century than any other nation on Earth.”
Kevin Brady, chairman of the Congressional Joint Economic Committee and a Republican lawmaker from Texas, took issue with Obama’s upbeat assessment of the economy under his stewardship.
“He can spin it as much as he likes, but the worst recovery of President Obama’s life is his own,” Brady said in a press statement released yesterday.
The divergent world economy has monetary policy makers around the globe moving in different directions. Fed Chair Janet Yellen and her colleagues are on course to wrap up their bond purchase program next month, while European Central Bank President Mario Draghi said Oct. 2 that his institution will be buying assets for at least two more years.
Yesterday’s jobs numbers underscore the differences between the U.S. and elsewhere, according to Doug Porter, chief economist at BMO Capital Markets in Toronto.
“It simply reinforces the now-glaring theme of divergence between the robust U.S. expansion and fading activity in much of the rest of the world,” Porter wrote in a note to clients.
wsj The U.S. economy is regaining traction as the year winds down, boosted by an accelerating business sector and a modest pickup among consumers.
Growth appears poised to post a healthy performance of more than 3% in the current quarter, according to several major forecasters, following a choppy first half of the year.
Gross domestic product, the broadest measure of goods and services produced in the U.S., grew at an annual rate of 4.6% in the second quarter, the Commerce Department said Friday in its third estimate of the gauge. That replaced the agency’s previous 4.2% reading and equaled the strongest quarter of the five-year-old recovery, matching the final three months of 2011.
The latest reading, along with other recent economic reports, make the first quarter’s 2.1% contraction look increasingly like a weather-driven anomaly. Growth has exceeded 3.5% for three of the past four quarters. If expansion greater than 3% materializes for the third quarter, that would mark the strongest stretch of economic growth since 2004 to 2005, the height of the last decade’s expansion.
The U.S. economy looks up as data released shows the second quarter GDP grew. WSJ’s Joshua Mitchell reports on Lunch Break with Tanya Rivero. Photo: Getty
But the recovery remains remarkably uneven, with businesses showing buoyancy while consumers limp along.
After-tax corporate profits climbed at the fastest pace in two years in April through June. Businesses stepped up investment, including on construction of facilities, a trend they appear to have carried into the fall.
Consumers are stepping up spending only modestly, as a surge in job growth this year has yet to translate into significantly higher wages.
Meanwhile, a soft global economy continues to weigh on the U.S. as sagging growth in Europe and Asia restrains American exports.
“The economy’s doing all right now, but it’s not off to the races,” said Joshua Shapiro, chief U.S. economist at MFR Inc. “The preponderance of evidence is that we’re in a moderate-growth situation.”
Still, there are signs of building momentum. The pickup in business investment—reinforced by a report this week showing higher spending on equipment—reflects companies’ growing confidence in the long-term outlook. That could presage a broader economic acceleration that would eventually filter down to workers.
Pirtek USA, which repairs hydraulic hoses in construction and manufacturing equipment, is seeing signs of an accelerating economy. Company sales have risen 20% this year compared with a year earlier because of an increase in home construction and manufacturing activity, said Gwyn O’Kane, vice president of franchise development.
The company also is benefitting from loose credit conditions by banks, allowing more people to borrow to open franchises, he said. The company plans to open its 49th and 50th franchises in the U.S. by the end of this year.
“The economy’s improving to the point where we can grow really fast,” Mr. O’Kane said.
The Federal Reserve believes stronger growth is ahead as it winds down a bond-buying program next month and moves closer to raising short-term interest rates—both tools that have been designed to stimulate growth. Fed officials believe that as unemployment comes down, companies will have to compete for a dwindling pool of available workers and thus pay them more.
The economy’s performance for the rest of the year will hinge in large part on continued improvement in the labor market. Job growth has averaged more than 200,000 a month this year, a boost from last year’s pace. But that pace slowed in August, with employers adding just 142,000 jobs. Wages are still only growing at about the same pace as consumer-price inflation, a sign of continued slack in the labor market.
Corrections & Amplifications
Employers added 142,000 jobs in August. An earlier version of this article incorrectly said they added 146,000 jobs.
WASHINGTON, Sept 19, 2014 (AFP)
Ratings agency Fitch on Friday said the United States still deserves its triple-A credit rating, with its solid financial system able to bear a high level of public debt.
“The economy is large, rich and diverse, with GDP per capita (at purchasing power parity) and levels of human development above the ‘AAA’ median,” Fitch said.
JAKARTA- China menyuntikkan dana sebesar 500 miliar yuan (US$81 miliar) ke sejumlah bank terbesar negara itu sebagai isyarat kekhawatiran mendalam atas pelemahan pertumbuhan ekonomi.
Menurut satu pejabat yang tidak mau disebutkan namanya, People’s Bank of China akan menyuntikkan dana sebanyak 100 miliar yuan untuk setiap lima bank terbesar di China selama tiga bulan sebagaimana dikutip Bloomberg, Rabu (17/9/2014).
Ekspansi kredit itu dilakukan untuk memacu pertumbuhan melalui sejumlah kebijakan sambil menyetop stimulus fiskal dan moneter yang meningkatkan bahaya pinjaman bermasalah. China bersama Bank Sentral Eropa menambah likuiditas, sementara AS bersiap untuk memperketat stimulus.
“Pelonggaran terbatas itu berada di bawah pengawasan bank sentral,” ujar Helen Qiao, ekonom pada Morgan Stanley sebagaimana dikutip Bloomberg, Rabu (17/9/2014).
Menurutnya, para pembuat kebijakan tengah menahan tekanan ekonomi untuk memangkas tingkat bunga dengan memilih pelonggaran bersyarat.
Saham perbankan di Hong Kong mengalami reli, sedangkan pelemahan yuan yang sudah berlangsung selama empat hari tertahan. Pasa sisi lain, tingkat bunga swap turun ke level terendah sejak Juni.
Source : Bloomberg
Sumber : BISNIS.COM
BEIJING, Sept 16, 2014 (AFP)
China’s outbound investment more than doubled in August to $12.62 billion, data showed Tuesday, far outstripping foreign direct investment (FDI) into the country, which fell to a four-year low.
China has been actively acquiring foreign assets, particularly energy and resources, to power its economy, with firms encouraged to “go out” and make overseas acquisitions to gain market access and international experience. Officials have said overseas direct investment (ODI) could exceed FDI this year.
The 112.1 percent year-on-year increase in ODI announced by the commerce ministry was a dramatic contrast to the 14.0 percent fall in FDI, which sank to $7.20 billion. Both sets of figures exclude investment in financial sectors.
FDI was also less than July’s $7.81 billion and was the lowest since July 2010, when it stood at $6.92 billion.
Commerce ministry spokesman Shen Danyang denied any link to Beijing’s multiple probes into foreign companies.
Chinese authorities have in recent months launched anti-monopoly, pricing and other inquiries into scores of foreign firms in sectors ranging from auto manufacturing and pharmaceuticals to baby milk.
The investigations have raised concerns among investors that Beijing is targeting overseas companies.
But Shen denied any connection between the investigations and the fall in FDI. “They are not related,” he said, declining to comment further.
But he added that China plans to revise three laws governing overseas companies and Sino-foreign joint ventures.
“By revising the laws, we hope to… create a more stable, transparent and predictable legal environment for foreign investment in China,” he told reporters.
For the first eight months of the year, China’s ODI was up 15.3 percent at $65.17 billion.
In that period, investment into the EU soared 257.1 percent, leaped 116.7 percent into Japan, and increased 73.3 percent into Russia, the ministry said without giving totals.
It climbed 16.0 percent into the US, reaching $3.26 billion.
Ministry officials were unable to explain immediately the huge monthly increase.
Also in the first eight months, FDI was down 1.8 percent year-on-year at $78.34 billion.
It slumped 43.3 percent from Japan — which is embroiled in territorial and historic rows with Beijing — to $3.16 billion, fell 17.9 percent from the EU to $4.20 billion, and dropped 16.9 percent from the US to $2.08 billion.
But from South Korea — which has been enjoying closer diplomatic ties with China — it climbed 31.3 percent to $3.02 billion, and from Britain it rose 18.9 percent to $850 million.
China’s economy expanded 7.7 percent in 2013, the same as 2012 — the worst pace since 7.6 percent in 1999.
Beijing’s official growth target for this year is 7.5 percent, also the same as in 2013, while gross domestic product grew 7.4 percent in the first half of this year.
NEW YORK kontan. Mayoritas saham yang diperdagangkan di bursa AS dibuka melorot pagi ini (12/9) waktu setempat. Berdasarkan data Bloomberg, pada pukul 09.48 waktu New York, indeks Standard & Poor’s 500 turun 0,3% menjadi 1.990,76. Sedangkan indeks Dow Jones Industrial Average turun 0,3% menjadi 16.993,61. Penurunan juga terjadi pada indeks Nasdaq sebesar 0,5%.
Pergerakan sejumlah saham turut mempengaruhi bursa AS. Beberapa di antaranya yakni: Caterpillar Inc yang turun 0,8%, Conversant Inc naik 31%, dam Hertz Global Holdings Inc naik 2%.
Sementara itu, jika dilihat secara sektoral, sektor energi mencatatkan penurunan 0,7%. Dengan demikian, penurunan sektor ini lima hari terakhir mencapai 2,9%.
Kenaikan bursa AS masih terdongkrak spekulasi bahwa the Federal Reserve akan menaikkan tingkat suku bunga acuannya lebih cepat dari estimasi semula setelah penjualan ritel AS mengalami pertumbuhan tercepat dalam empat bulan terakhir.
Sekadar tambahan informasi, penjualan ritel AS naik 0,6% pada Agustus, setelah naik 0,3% pada bulan sebelumnya.
JAKARTA— Indeks dolar Amerika Serikat pagi ini, Selasa (9/9/2014) terus berlari di level 84.
Pada hari ini, Indeks dollar dari data Bloomberg, dibuka naik 0,12% ke 84,33. Pada Senin (8/9/2014) indeks dolar AS ditutup pada level 82,232 (menguat 0,59%).
US Dollar Index Spot Rate pada pk. 06:56 WIB ke 84,345 atau menguat 0,13%, dan bergerak di kisaran 84,328—84,354.
Posisi indeks dolar AS
Pk. 06:56 WIB (9 September)
Sumber: US Dollar Index Spot Rate, 2014
BEIJING, Sept 08, 2014 (AFP)
China’s trade surplus surged 77.8 percent to $49.8 billion in August, official data showed Monday, as exports rose while imports declined.
Exports increased 9.4 percent year-on-year to $208.5 billion, the General Administration of Customs announced, while imports fell 2.4 percent to $158.6 billion.
New York – The Institute for Supply Management pada Selasa waktu AS atau Rabu (3/9/2014) waktu Indonesia menyebutkan indeks manufaktur AS naik menjadi 59% untuk bulan Agustus dari 57,1% di bulan Juli.
Data ini mencerminkan aktifitas sektor manufaktur tumbuh positif ke level tertingi sejak awal tahun 2011. Data pemesanan baru menuju level terkuat sejak 2004. Untuk produksi manufaktur berada di level tertinggi dalam empat tahun terakhir.
“Apa yang kita lihat akan berdampak luas,” kata ketua komite survei ISM Manufaktur AS, Bradley Holcomb seperti mengutip marketwatch.com.
Sebanyak 17 dari 18 perusahaan yang menjadi responsen ISM melakukan ekspansi. Jumlah ini sangat tinggi untuk AS yang sedang dalam pemulihan ekonomi. Hanya produsen garmen yang mengalami perlambatan pertumbuhan.
Data tersebut mengalahkan ekspektasi Wall Street. Analis memperkirakan indeks akan turun menjadi 56,1%. Walaupun angka di atas 50% mengindikasikan ekspansi.
Dengan data tersebut, imbal hasil Treasury AS untuk 10 tahun naik 0,12%. Hal ini menunjukkan euforia positif di kalangan pasar terhadap ekonomi AS.
Data ini menjelang pengumuman soal penciptaan lapangan kerja di bulan Agustus pada Jumat pekan ini. Ekonom memprediksi terjadi kenaikan dari 226.000 pada bulan sebelumnya.
Sumber : INILAH.COM
GENEVA, Sept 02, 2014 (AFP)
The United States has risen two notches in the economic competitiveness stakes, the World Economic Forum said Wednesday.
“The United States improves its competitiveness position for the second consecutive year, climbing two places to third on the back of gains to its institutional framework and innovation scores,” said the WEF, which issues an annual ranking.
The United States had held the top rank seven years ago but slid to seventh amid the financial crisis.
The WEF, which organises the annual Davos meeting of the global political and business elite, said that Switzerland, where it is based, remained the world’s most competitive economy.
Singapore came in second, holding its ranking from the previous year.
Finland and Germany, which had been ranked thrid and fourth respectively, both dropped down one rung on the ladder.
The highest climber in the top 10 was Japan, which moved to sixth place from its previous ninth.
Hong Kong and the Netherlands held their berths of seventh and eighth, while Britain gained one place, rising to ninth.
Sweden fell from sixth to 10th.
“The leading economies in the index all possess a track record in developing, accessing and utilising available talent, as well as in making investments that boost innovation,” said the WEF.
“These smart and targeted investments have been possible thanks to a coordinated approach based on strong collaboration between the public and private sectors,” it added.
Below the top-rankers, the WEF underlined that a string of economic crisis casualties had gained ground, lauding their “significant strides to improve the functioning of their markets and the allocation of productive resources”.
Portugal rose from 51st to 36th, and Greece, from 91st to 81st. Spain remained in 35th place for the second year running.
The WEF also pointed to countries facing “major competitiveness challenges”.
It cited France and Italy, unchanged at 23rd and 49th respectively, saying they “appear not to have fully engaged in this process”.
“While the divide between a highly competitive North and a lagging South and East persists, a new outlook on the European competitiveness divide between countries implementing reforms and those that are not can now also be observed,” the WEF said.
Examining eight of the world’s largest emerging markets, the WEF said they continued to face difficulties in improving competitiveness.
Saudi Arabia fell to 24th from its previous ranking of 20th, while Turkey dropped one notch from 44th, and South Africa dipped to 56th from 53rd.
Mexico slid six places from 55th to 61st, while India dropped 11, sliding from 60th to 71st, and Nigeria was down to 127th from 120th.
The stand-out performer among emerging markets was China, which gained one place, moving to 28th.
The WEF began measuring economic competitiveness in 2004.
Its ranking is based on a raft of criteria: institutions, infrastructure and the macroeconomic environment, plus health and education, goods and labour market efficiency, financial market development, technology, market size, business sophistication, and innovation.
HONG KONG, Aug 25, 2014 (AFP)
Asian markets were mixed Monday following a broadly negative lead from Wall Street after the head of the US central bank said she was still concerned about employment in the country.
While Janet Yellen’s speech Friday said slackness in the jobs market would likely staunch inflation, investors noted her acknowledgement of calls for an early interest rate rise, which in turn lifted the dollar to a seven-month high against the yen.
Tokyo rose 0.20 percent by the break and Seoul put on 0.10 percent, but Hong Kong slipped 0.44 percent, Shanghai shed 0.28 percent and Sydney was 0.27 percent lower.
Speaking at the Fed’s annual symposium in Jackson Hole, Wyoming, Yellen said even if unemployment has fallen more quickly than expected to 6.2 percent, there remains “considerable uncertainty about the level of employment”.
That signalled her commitment to the Fed’s timetable for hiking rates late next year, rather than earlier as some analysts and policy makers would like.
However, Junichi Ishikawa, market analyst at IG Securities in Tokyo, told Dow Jones Newswires: “Her comments at Jackson Hole were balanced, and took into consideration the positions of the more hawkish members of the Fed.”
And Kathleen Brooks at Forex.com said dealers took account of the uncertainty surrounding labour market indicators Yellen mentioned in her speech. “The market seems to perceive this indecision to be a subtle shift away from the ultra-dovish stance Yellen has taken in the past,” she said.
Yellen’s comments pushed the dollar above 104 yen for the first time since April and to the strongest level since January.
In early Tokyo trade the greenback bought 104.14 yen compared with 103.87 yen in New York Friday.
But the Dow eased 0.22 percent and the S&P 500 shed 0.20 percent. The Nasdaq added 0.14 percent.
The euro was at $1.3204 and 137.51 yen, against $1.3241 and 137.60 yen.
On oil markets US benchmark West Texas Intermediate for October eased 21 cents to $93.44, while Brent crude for October fell 44 cents to $101.85.
Gold traded at $1,278.20 an ounce at 0230 GMT compared to $1,281.40 an ounce late Friday.
BEIJING—Two gauges of manufacturing activity in China picked up in July, adding to signs that economic growth is recovering as the government’s stimulus program takes effect.
Both the government’s purchasing managers’ index and a competing private-sector equivalent bounced back in July, offering fresh signs of recovery after policy makers moved to speed up spending on railways, cut taxes on businesses and make more credit available to small firms.
“Broadly speaking, today’s PMI reading suggests that economic activity is still being supported by healthy foreign demand along with state-led infrastructure investment and other targeted stimulus measures,” said Julian Evans-Pritchard, an economist with Capital Economics.
The official manufacturing purchasing managers’ index rose to 51.7 in July from 51 in June, marking a 27-month high, the National Bureau of Statistics said Friday. It was also higher than the 51.4 median forecast of economists polled earlier by The Wall Street Journal.
A PMI reading above 50 indicates an expansion in manufacturing activity from the previous month, whereas a reading below that indicates contraction.
The official PMI’s subindex for small businesses rose to 50.1 in July, the first time the reading has topped 50 since April 2012.
Employees assemble drug capsules at a factory in Jingzhou, Hubei province. Reuters
The HSBC PMI rose to an 18-month high of 51.7 in July compared with 50.7 in June, HSBC said Friday.
“Policy makers are continuing with targeted easing in recent weeks and we expect the cumulative impact of these measures to filter through in the next few months and help consolidate the recovery,” HSBC’s chief economist for China, Qu Hongbin, said.
Beijing has unveiled a series of supportive policies for small businesses, which were hit hard by sluggish economic growth. The central bank cut the amount of cash banks need to hold in reserve, which boosts the amount they can lend to small firms. The government also is offering tax breaks for small businesses.
The Chinese economy grew 7.5% in the second quarter compared with a year earlier, slightly up from 7.4% in the first quarter but well below the 7.7% recorded in the final quarter last year.
China’s leaders have so far refrained from using massive stimulus measures as they did during the global financial crisis, and instead relying on targeted easing measures to support sectors in need.
Both official and HSBC PMIs suggested that the manufacturing sector is increasingly healthy, but it would be wise not to get carried away, said Li Wei, an economist with Standard Chartered Bank in Shanghai.
“We’re not fully convinced about the stability of the recovery,” Mr. Li said. “Housing and manufacturing investment are not out of the woods yet.”
For example, the property sector continues to drag on growth. China’s average home prices fell for a third straight month in July. New home prices in 100 Chinese cities surveyed by China Real Estate Index System fell 0.8% in July, compared with June’s 0.5% decline and May’s 0.3% fall.
“To ensure a steady economic growth, we believe the government will stay with targeted easing and proactive fiscal policy in coming months,” said Zhang Fan, an economist at CIMB.
Mr. Zhang said Beijing is likely to speed up the pace of reforms in the following months, which could help maintain growth momentum in the long run. Earlier this week, China laid out detailed plans to reform the household registration, or hukou, system to make it easier for rural migrants to settle in China’s cities.
–Grace Zhu and Richard Silk
JAKARTA, KOMPAS.com — Berdasarkan data Bank Dunia, sebanyak 12 negara ekonomi terbesar dunia menyumbang dua per tiga ekonomi dunia. Namun demikian, masalah yang kadang terjadi adalah distribusi ekonomi tidak merata. Dengan demikian, ada negara-negara yang mendapat “potongan kue” yang tak sama ukurannya.
Berikut merupakan negara-negara terkaya di dunia tahun 2014 yang diukur berdasarkan kekuatan ekonomi dari daya beli dalam mata uang dollar AS. Data dikumpulkan dari Dana Moneter Internasional (IMF) dan Outlook Ekonomi Dunia yang dilansir dari situs TheRichest.com, Kamis (31/7/2014).
Amerika Serikat. Daya beli di AS mencapai 17,5 triliun dollar AS sehingga terus menjadikan AS negara terkaya di dunia. GDP per kapita negara ini mencapai 52.800 dollar AS. Pada tahun 2010, 15,1 persen warga AS hidup di bawah garis kemiskinan. Namun, angka ini tak mengejutkan bila dibandingkan dengan banyak negara lain yang memiliki angka kemiskinan lebih besar.
Tiongkok. Daya beli Tiongkok secara keseluruhan mencapai 10 triliun dollar AS. Akan tetapi, GDP per kapita Tiongkok cenderung rendah, hanya 9.800 dollar AS atau pada posisi 121 dunia. Sementara itu, hanya 6,1 persen warga Tiongkok hidup miskin, walau pada tahun 2013 Tiongkok menyebutkan garis kemiskinan warganya pada kisaran 3.630 dollar AS per orang.
Jepang. Dengan daya beli mencapai 4,8 triliun dollar AS, Jepang menempati posisi ketiga ekonomi terkaya dunia. GDP per kapita di Jepang mencapai 37.100 dollar AS, membuat Jepang berada pada posisi 36 dalam hal GDP. Pada tahun 2010, sebanyak 16 persen warga Jepang hidup di bawah garis kemiskinan.
Jerman. Negara ini memiliki daya beli mencapai 3,9 triliun dollar AS, menjadikannya ekonomi terkaya Eropa. Jerman juga menempati posisi 29 dalam hal GDP per kapita, yang tercatat sebesar 39.500 dollar AS. Sebanyak 15,5 persen warga Jerman hidup di bawah garis kemiskinan.
Perancis. Daya beli Perancis mencapai 2,9 triliun dollar AS. Negara Eropa barat ini menempati peringkat 39 dalam GDP per kapita versi World Factbook, yakni menembus 35.700 dollar AS. Perancis juga memiliki tingkat kemiskinan yang cukup rendah, yakni 7,9 persen.
Bisnis.com, JAKARTA – Harga rumah China kembali jatuh ke level terendah pada Juni, setelah pengembang memangkas harga untuk mendongkrak volume penjualan.
Meski demikian, penjualan rumah di beberapa kota di China perlahan mulai bangkit.
Data yang dirilis Biro Statistik Nasional China menunjukkan harga rumah jatuh di 55 dari 70 kota pada Mei lalu, yang merupakan kejatuhan harga rumah terbesar sejak Januari 2011.
Harga rumah di Shanghai dan selatah Guangzhou turun 0,6% dari Mei. penurunan terbesar terjadi di Hangzhou yaitu 1,7%.
Ekonom Australia & New Zealand Banking Group Ltd, Liu Li Gang menyampaikan persoalan utama industri properti China adalah terlalu tingginya angka inventori.
“Namun penurunan tidak terlalu besar. Di beberapa kota penjualan rumah mulai pulih dan perekonomian China mulai stabil. Pasar properti akan segera pulih,” kata Li Gang di Hong Kong, Jumat (18/7).
Beberapa kota di China memang tengah mengupayakan pemulihan pasar properti untuk menstimulasi pasar lokalnya, setelah para pengembang memangkas harga penjualan untuk menjaring pembeli.
Source : Bloomberg
Editor : Yusran Yunus
BEIJING, July 16, 2014 (AFP)
China’s economic growth hit 7.5 percent year-on-year in April-June, official data showed Wednesday, ahead of expectations as the world’s second-largest economy was boosted by government stimulus.
The second-quarter figure announced by the National Bureau of Statistics compared with 7.4 percent in the previous three months and exceeded the median forecast of 7.4 percent in a survey of 17 economists by AFP.
“Generally speaking, China’s economy showed good momentum of stable and moderate growth in the first half-year,” said NBS spokesman Sheng Laiyun.
“However we should keep in mind that the domestic and international economic environment is still complicated and the national economy still faces many challenges.”
The NBS also said China’s economy expanded 7.4 percent in the first half of the year.
The results come after Beijing introduced a series of policies since April in response to concerns over slowing growth, including tax breaks for small enterprises, targeted infrastructure spending and the encouragement of lending in rural areas and to small companies.
Wendy Chen, Shanghai-based economist with Nomura International, told AFP: “A series of policy easing measures have taken effect, and the economy has already bottomed out and recovered.”
Growth would be “slightly better” in the second half of the year, she said, but added: “We expect more policy easing in the third quarter, in all aspects including the property sector.”
Despite the short-term stabilising effect of the efforts, which economists have dubbed “mini-stimulus”, some analysts remain pessimistic about the full-year outlook given persistent concerns over the country’s huge but troubled property sector.
According to the NBS statement, most key property indicators declined in the first half, with the area of homes sold falling 7.8 percent on-year and home sales values down 9.2 percent.
Ma Xiaoping, Beijing-based economist for British bank HSBC, cited the real-estate sector as the “main downward risk in the second half” and noted that the property investment growth rate showed a significant decline.
“If this trend continues, we will need to see whether infrastructure construction and manufacturing can offset the impact from the property industry decline,” she told AFP.
The NBS’s Sheng acknowledged that the property market correction will add to economic pressures in the short term.
“But in the long term, it will be conducive to the healthy development of the real-estate industry itself as well as the healthy and sustainable development of the national economy,” he said.
– ‘Targeted measures’ –
China’s gross domestic product (GDP) grew 7.7 percent in 2013, the same as 2012, which was the worst pace since 7.6 percent in 1999.
For full-year 2014, the median forecast in the AFP survey is for an expansion of 7.3 percent — down from 7.4 percent in the last quarterly poll three months ago.
If realised, 7.3 percent growth would be the weakest annual performance since 3.8 percent in 1990.
China in March set its annual growth target for this year at about 7.5 percent, the same as last year.
The objective is usually set conservatively so as to ensure being met — the last time China missed it was in 1998, during the turmoil of the Asian financial crisis.
Officials including Premier Li Keqiang earlier this year emphasised that the goal was flexible — widely seen as a hint it may not be realised.
But last month, Li called achieving it the “inescapable responsibility” of local governments and urged “no delay” in action, an indication of concern.
China’s leaders consistently say that slower growth is good for the country as they try to reduce decades of over-reliance on the huge though often inefficient investment projects that have girded expansion.
They envision a new model in which the country’s increasingly affluent consumers drive activity, generating slower but more sustainable growth in the long run.
Economists expect refinements to the limited stimulatory efforts to continue in the form of “targeted” steps, though they differ on whether authorities will go so far as cutting interest rates or reserve requirement ratios for all banks.
Separately, the NBS said China’s industrial production, which measures output at factories, workshops and mines, rose 9.2 percent year-on-year in June.
Retail sales, a key indicator of consumer spending, increased 12.4 percent in the same month, while fixed asset investment, a measure of government spending on infrastructure, rose 17.3 percent on-year in the first six months.
China’s central bank said Tuesday that bank lending in the country picked up in June from May.
Julian Evans-Pritchard, China economist at Capital Economics, described second-quarter GDP growth as “healthy” in an analysis.
“Today’s data clearly demonstrate that policymakers have plenty of tools to shore up growth if necessary and we expect that further targeted measures may be rolled out to offset continued weakness in the property sector,” he wrote.
Bisnis.com, JAKARTA — Bursa Asia berfluktuasi setelah The Federal Reserve mengatakan ada beberapa faktor di bursa AS yang kelebihan valuasi dan kinerja perbankan lebih baik dari estimasi.
Indeks MSCI Asia Pacific sedikit berubah ke 147,08 pada perdagangan Rabu (16/7/2014) pukul 09.20 waktu Tokyo atau pukul 07.20 WIB.
“Investor pasar modal sedikit menahan diri setelah The Fed mengingatkan sejumlah sektor telah kelebihan valuasi,” ujar Tony Farnham, Strategist Patersons Securities Ltd, seperti dikutip Bloomberg, Rabu (16/7/2014).
Saham Iluka Resources Ltd naik 2,3%, Rio Tinto Group naik 1,3%, Yahoo Japan Corp turun 1,8%. Indeks Jepang Topix naik 0,1%, indeks Korea Selatan naik 0,2%, indeks Australia S&P/ASX 200 naik 0,2%, dan indeks Selandia Baru NZX 50 turun 0,1%.
Editor : Nurbaiti
(Reuters) – The number of Americans filing new claims for unemployment benefits fell last week to one of its lowest levels since before the 2007-09 recession, a sign of increasing health in the labor market.
Other data on Thursday showed a rise in business inventories during May, bolstering expectations the economy was bouncing back from a weak first quarter.
Initial claims for state unemployment benefits dropped by 11,000 to a seasonally adjusted 304,000 for the week ended July 5, the Labor Department said. Economists had expected no change in the number of first-time applications for jobless aid.
The readings had little impact on financial markets, as U.S. stocks and government debt yields fell over concerns about Italy’s economy and the health of Portugal’s top-listed bank.
Employers slashed their payrolls during America’s deep recession, but the long cycle of aggressive layoffs now appears over.
The four-week moving average for new claims, considered a better measure of underlying labor market conditions as it irons out week-to-week volatility, declined by 3,500 to 311,500 last week. That was the second-lowest reading for the moving average since August 2007. After falling steadily for several years, the moving average has been largely unchanged since the spring.
The labor market is still not fully healed. Firms have been more reticent about hiring, although companies added 288,000 jobs to their payrolls in June and the unemployment rate fell to 6.1 percent, closing in on a six-year low.
“The labor market is firming up,” said Stephen Stanley, an economist at Pierpont Securities in Stamford, Connecticut.
Stanley cautioned against reading too deeply into last week’s claims data because many factories shut down for parts of July to retool, often making claims data during the month volatile.
The Labor Department said there were no special factors influencing the state level data.
Separately, the Commerce Department said wholesale inventories rose 0.5 percent in May, just below economists’ expectations for a 0.6 percent increase.
The gains were driven by increases in inventories of metals, autos, machinery and lumber.
Inventories are a key component of gross domestic product changes. The component that goes into the calculation of GDP – wholesale stocks excluding autos – increased 0.3 percent in May.
A sharp slowdown in the pace of restocking by businesses helped to sink economic growth in the first quarter, but a swing in inventories is expected in the April-June period.
The economy contracted at a 2.9 percent annual pace in the January-March period, with inventories playing a big role in the decline. Many analysts forecast growth in the second quarter to rebound to at least a 3 percent pace.
(Reporting by Jason Lange; Editing by Paul Simao)
Bisnis.com, BEIJING – Sektor manufaktur China berekspansi pada laju tercepatnya pada Juni, menegaskan keberhasilan pemerintah China dalam menyiasati pertumbuhan lambat negara tersebut.
Data yang dirilis Biro Statistik Nasional dan Federasi Penjualan dan Logistik China menunjukkan indeks pembelian pabrik (Purchasing Managers Index/PMI) berada di level 51,0. Nilai ini sesuai prediksi ekonom yaitu 50,8, dan merupakan indeks tertinggi dalam 6 bulan terakhir.
Ekonom BNP Paribas SA, Chen Xingdong mengatakan bergairahnya sektor manufaktur dipicu oleh penggelontoran mini-stimulus. Data terkini mengimplikasikan perekonomian mulai stabil, jelas Chen di Beijing, Selasa (1/7/2014).
Tak jauh berbeda, PMI dari HSBC Holdings Plc dan Markit Economics menunjukkan indeks 50,7, meningkat dari indeks bulan sebelumnya yakni 49,4. Sektor manufaktur yang tengah berekspansi diyakini dapat membantu pemerintah China mencapai target pertumbuhan 7,5% pada 2014.
Hal sama disampaikan Zhang Liqun, peneliti Development Research Center. Menurutnya, langkah pemerintah untuk menstabilkan perekonomian mulai menunjukkan hasil. Para analis pun semakin optimis dengan pertumbuhan China. Mereka meningkatkan prediksi pertumbuhan ekonomi menjadi 7,4%, dari sebelumnya 7,3%.
Meski demikian, pemerintah Negeri Tembok Raksasa diminta mewaspadai pasar properti yang lesu berkepanjangan dan meningkatnya kredit buruk, yang diperkirakan akan mengancam pertumbuhan ekonomi pada paruh kedua tahun ini. Menurut Chen, pasar properti masih menjadi ancaman terbesar perekonomian.
Source : Bloomberg/Reuters
Editor : Fatkhul Maskur
Bisnis.com, JAKARTA—Jepang berisiko kehilangan posisi sebagai negara kreditor terbesar dunia setelah mengalami penurunan jumlah simpanan, sehingga tidak memadai untuk membiayai utang publik yang membengkak, menurut survei Bloomberg News.
Surplus transaksi berjalan yang selalu mendorong posisi aset bersih Jepang hingga yang terbesar di dunia mulai 1991 kini mulai berbalik, menurut 10 dari 16 ekonom berdasarkan survei Bloomberg News. Sembilan di antara mereka memproyeksikan akan terjadi defisit berkelanjutan pada akhir 2020.
Jepang memiliki aset bersih senilai 325 triliun yen pada akhir 2013, sedangkan China berada di posisi kedua dengan aset 208 triliun yen, menurut kementerian keuangan negara itu.
Ketika populasi usia tua membuat simpanan Jepang berkurang, negara itu akan menjadi lebih bergantung pada kreditor luar negeri untuk membiayai defisit anggaran dan mengelola beban utang.
Peralihan ke defisit transaksi berjalan bisa mengarah ke peningkatan dalam imbal beli obligasi pada saat investor mengkaji kembali prospek negara itu. Selain itu, peningkatan imbal beli obligasi akan memuluskan jalan bagi China untuk mengalahkan kembali negara lain sebagai kreditor terbesar dunia.
“Peluang China untuk mengalahkan Jepang pada awal 2020 dalam hal jumlah aset bersih di luar negeri menjadi besar,” ujar Hidenori Suezawa, analis pasar keuangan dari SMBC Nikko Securities Inc. sebagaimana dikutip Bloomberg, Selasa (10/6/2014).
Sumber : Bloomberg
Editor : Nurbaiti
SHANGHAI. Nilai tukar Yuan turun ke posisi terendah satu pekan setelah Gubernur bank sentral China Zhou Xiaochuan menyatakan, ekonomi China dalam situasi yang cukup rumit. Kondisi itu membuat investor khawatir pemulihan pertumbuhan ekonomi tertunda .
Bank Rakyat China harus menerapkan kebijakan moneter yang hati-hati dan harus memastikan stabilitas keuangan, kata Zhou saat berkunjung ke cabang bank sentral di kota Jiaxing provinsi Zhejiang pekan ini.
Sementara itu, konflik di lautan China Selatan kian memanas setelah sebuah kapal Cina menyerang dan menenggelamkan sebuah kapal nelayan Vietnam di perairan yang disengketakan di lepas pantai Vietnam.
“Pelemahan Yuan terjadi karena prospek China yang tidak membaik dalam waktu dekat,” kata Bruce Yam, ahli strategi mata uang berbasis Sun Hung Kai Forex di Hong Kong. “Perselisihan dengan Vietnam juga bisa mencegah arus masuk,” katanya.
Yuan melemah 0,03% menjadi 6,2410 per dolar pada pukul 10:20 di Shanghai. Ekonomi terbesar kedua di dunia itu naik 7,4% di kuartal I.
Di pasar spot di Hong Kong, yuan turun 0,03% menjadi 6,2387 per dolar. Sedangkan untuk pasar non deliverable forward yuan diperdagangkan di posisi 6,2535 per dolar AS, naik jika dibandingkan posisi 6,2550 kemarin.
Editor: Asnil Bambani Amri
Bisnis.com, HONG KONG – Saham China menguat, mendorong indeks perusahaan real-estate menggapai kenaikan terbesar dalam 1 bulan, di tengah spekulasi pemerintah mengurangi pembatasan properti untuk mencegah ekonomi dari kehilangan target pertumbuhan tahun ini.
China Vanke Co dan Poly Real Estate Group Co naik lebih dari 3%, dengan Shanghai properti sub-indeks naik 2,1% untuk kenaikan terbesar sejak 22 April. Greentown China Holdings Ltd dan China Overseas Land & Investment Ltd ( 688 ) melonjak lebih dari 5% di Hong Kong.
Shanghai Composite Index naik 0,7% menjadi 2.034,57 pada penutupan, sedangkan indeks Hang Seng Hong Kong menguat 0,1% menjadi 22.965,86. China telah memungkinkan kota untuk menyesuaikan pembatasan pembelian rumah, kecuali Beijing, Shanghai, Guangzhou, dan Shenzhen, demikian laporan Southern Weekly, kemarin, mengutip beberapa sumber di Kementerian Perumahan.
China Securities Journal mengatakan hari ini pemerintah akan menghapus pembatasan pembelian rumah tergantung pada kondisi pasar.
“Meskipun beberapa penyesuaian kebijakan telah diperkenalkan oleh berbagai kota, ini akan menjadi pertama kalinya pasar bisa mengharapkan relaksasi yang signifikan dari pembatasan pembelian rumah,” kata Toni Ho, seorang analis pada BoCom International Holdings Co, dalam sebuah melaporkan hari ini.
Hang Seng China Enterprises Index (HSCEI) naik 0,1% hari ini, sementara Indeks CSI 300 naik 0,8% seiring dengan produsen software yang memimpin rally untuk saham teknologi. Untuk minggu ini, indeks Hang Seng melonjak 1,1%, sedangkan indeks Shanghai naik 0,4%.
Setelah 4 tahun pembatasan pemerintah untuk mendinginkan pasar perumahan, pergeseran penjualan rumah dan konstruksi properti telah menjadi hambatan bagi perekonomian, yang mencatat pertumbuhan paling lambat dalam 6 kuartal pada 3 bulan pertama tahun ini.
Source : Bloomberg
Editor : Fatkhul Maskur
Be Careful What You Wish For
Karl Gerth is a professor of history and Hsiu endowed chair in Chinese studies at the University of California, San Diego. He is the author of “As China Goes, so Goes the World: How Chinese Consumers are Transforming Everything.”
UPDATED APRIL 8, 2014, 9:32 PM
Global business and political leaders provide an unambiguous solution to China’s — and the world’s — economic malaise: Get Chinese consumers to spend a much higher percentage of their G.D.P., as their American counterparts already do.
Chinese consumer demand could compensate for lackluster international demand and improve the quality of life for people in China. True, a shift toward a more domestic consumer-driven economy would challenge domestic constituencies heavily dependent on debt-driven government spending. Otherwise, what’s not to like?
Can China head off a domestic financial meltdown and stimulate renewed global economic growth without trashing its environment and the world’s?
But as Chinese consumers spend their way into new lifestyles, they also create problems with equally elusive solutions. China’s environmental crises are at least as alarming as the growth of lifestyle diseases such as obesity or increased inequality. According to the World Bank, China has 16 of the world’s most polluted cities.
And the problems appear to be getting worse. Although China is the world’s largest energy user and carbon-emitter, the country is barely a Top 20 per capita emitter. In other words, there is plenty of room for growth in carbon emissions. Rising per capita consumption of things such as chain-store hamburgers and gas for cars will boost Chinese and world economic growth. Yet those same increases also create unprecedented environmental challenges.
As always with China, per capita changes matter. What will happen as Chinese consumers begin to buy, as requested, even a slightly larger per capita number of the hamburgers, cars and countless other consumer products as their American and European counterparts? Can China head off a domestic financial meltdown and stimulate renewed global economic growth without trashing its environment and the world’s?
It’s a lot to ask. No other industrial nation has yet found a way to reverse the ecologically destructive effects of its way of life faster than any offsetting commitment to correcting, let alone reversing them. It is unrealistic (and, perhaps, unconscionable) to expect a poorer country to lead the way. While rooting for the rise of the Chinese consumer, we may also want to contemplate the consequences.
Building the dream
By 2030 Chinese cities will be home to about 1 billion people. Getting urban China to work properly is vital to the country’s economic and political future, says James Miles
SOME HISTORIANS BELIEVE that Marco Polo never went to China. But even if the 13th-century Venetian merchant did not lay eyes on the coastal city of Hangzhou himself, he certainly reflected the awe it inspired in other foreign traders when he described it as “beyond dispute the finest and the noblest in the world”. And, “incredible as it may seem”, he wrote, Hangzhou (which he called Kinsay) was but one of more than 1,200 “great and wealthy cities” in southern China. “Everything appertaining to this city is on so vast a scale…that it is not easy even to put it in writing.”
In Marco Polo’s day it was the ornate palaces, paved roads and meticulously planned layouts of Chinese cities that impressed visitors; in today’s megacities it is some of the world’s tallest skyscrapers and largest shopping malls, interlinked by the world’s longest bullet-train network. And if all goes according to the Communist Party’s plan, the coming two decades will evoke a few more gasps.
By 2020 the high-speed rail network will expand by nearly two-thirds, with the addition of another 7,000km (4,300 miles). By then almost every city with a population of half a million or more will be connected to it. Tens of millions more migrants will have poured in from the countryside. Between now and 2030, says the World Bank, the average rise in the number of city-dwellers each year is likely to be around 13m, roughly the population of Tokyo. In 2030 China’s cities will be home to close to 1 billion people, or about 70% of the population, compared with 54% today. By some estimates the urban population will peak around 2040, still just shy of the 1 billion mark but close enough. As James McGregor, an American businessman, put it in his book, “One Billion Customers”, published in 2005, the notion of a billion Chinese spenders has come to symbolise “the dream of staggering profits for those who get here first, the hype and hope that has mesmerised foreign merchants and traders for centuries”.
After taking over as party chief in 2012, Xi Jinping (now also president) launched his expected decade in power with a catchphrase: “The Chinese dream”. It was a striking break from the party’s tradition of ideology-laden slogans. Now endlessly invoked in official speeches and the subject of numerous books and songs, the phrase is clearly intended to appeal to upwardly mobile urban residents striving for the comforts of their rich-world counterparts.
Only 15 years ago such a middle class barely existed in China. In 2011, when the country reached 50% urbanisation, it had become obvious that the party’s fate rested with the stability of cities and the contentedness of their middle-class residents. The largely rural country that Deng Xiaoping (himself of peasant stock) set out to “reform and open up” in the late 1970s had become overwhelmingly urban in its economic and political focus. Thanks mainly to a tide of migration, China’s urban population had grown by more than 500m since Deng launched his reforms: the equivalent of all the people in the United States plus three Britains.
Li Keqiang, who took over as prime minister in 2013, sees further urbanisation as critical to China’s economic success. He has called it a “gigantic engine” for growth. Mr Li and other officials are fond of quoting Joseph Stiglitz, a Nobel prize-winning American economist, who said that technological innovation in America and urbanisation in China would be “two keys” to mankind’s development in the 21st century.
A new grand plan for China’s cities, overseen by the prime minister and published last month, admits to a number of problems, such as worsening pollution, urban sprawl and congestion as well as growing social tensions. It also points out that China’s urbanisation lags behind that of other countries at similar levels of development (typically around 60%), and that there remains “quite a lot of room” for further urban growth.
Getting cities right will help China to keep growing fast for years to come. Getting them wrong would be disastrous, bringing worsening inequality (which the World Bank says has approached “Latin American levels”, although Chinese officials insist it has recently been improving), the spread of slums, the acceleration of global climate change (cities consume three-quarters of China’s energy, which comes mainly from coal) and increasing social unrest.
After more than a decade of spectacular growth in China, much of it in double digits, doubts are setting in both at home and abroad about the sustainability of the “Chinese model”. Growth is slowing. Lavish spending by local governments has piled up huge debts. Increasing numbers of middle-class Chinese are looking for boltholes abroad for themselves, their families and their assets. Scandals involving senior officials have revealed corruption on a gargantuan scale. Censors generally succeed in preventing anti-party messages from spreading widely, but microbloggers with thousands of followers still boldly relay damning critiques.
Mr Xi describes the country’s problems and his approach to solving them in colourful terms. Reforms, he says, have entered a “deep-water area”. China must “venture along dangerous paths to break through barriers to reform”. In tackling corruption it will need the resolve of a man who must “cut off his own snake-bitten hand to save his life”. At a plenum of the Central Committee in November the party declared that market forces must play a “decisive role”, the strongest support it has ever expressed for the market. This seems all the more stirring after years of vacillation under Mr Xi’s predecessor, Hu Jintao, who retreated from reform in the face of powerful resistance by vested interests, above all local governments, huge state-owned enterprises and, ironically, the new middle class, which would rather not share the fruits of growth with rural migrants.
Why cities matter
All the most important reforms that Mr Xi needs to tackle involve the movement to China’s cities. He must give farmers the same property rights as urban residents so they can sell their homes (which is currently all but impossible) and leave the land with cash in hand. He must sort out the mess of local-government finances, which depend heavily on grabbing land from farmers and selling it to developers. He must loosen the grip of state-owned enterprises on the commanding heights of the economy and make them hand over more of their profits to the government. He must move faster to clean up the urban environment, especially its noxious air, and prevent the growth of China’s cities from exacerbating climate change. And he must start giving urban residents a say in how their cities are run.
This list is both daunting and urgent. The recent growth of China’s cities has created two new social forces whose concerns Mr Xi cannot afford to ignore. One is a vast migrant population (including the urban-born children of recent migrants from the countryside) that now makes up more than one-third of the urban total of 730m. It is far harder for a member of this group to gain official recognition as a city-dweller in his own country, with all the welfare benefits and access to public services that status confers, than to gain citizenship in America or Europe if he were to migrate there. The harsh treatment of China’s internal migrants is creating huge social divisions that could erupt in serious unrest.
The other new force is the urban middle class, now thought to be roughly the same size as the migrant population, which numbers around 260m. It has been kept reasonably content by the rapid growth of the past few years, but that may not last. China’s middle classes, like those elsewhere, worry about property: how to protect it from the whims of urban planners and party officials, what is happening to prices, and what to do if the bubble bursts. Increasingly unaffordable house prices, or conversely a steep drop, might prompt different ends of the middle-class spectrum to protest. So too might the party’s many sins and blunders: a food-safety scandal, perhaps, linked to official corruption.
Like his predecessors, Mr Xi is nipping signs of unrest in the bud. Dissidents who have done little more than briefly raise protest banners in tiny groups are being thrown into jail. But there are also some positive signs. He has taken charge of a new party organ, a small group of officials with a wide range of portfolios, who are working to improve policy co-ordination and overcome bureaucratic resistance to change. It even has a task force dedicated to building “democracy and the legal system”, although that may not get very far. Mr Xi has also launched a fierce campaign against high-level corruption which, though unlikely to offer a lasting cure to the endemic problem of graft, could scare officials into compliance with his reform plans.
A dwindling labour supply
As economic growth slows and the pool of surplus labour in the countryside shrinks, the speed of urbanisation will diminish. For the past few years about 9m people have been moving into cities every year. The number will fall to 7m in the second half of this decade and 5m in the 2020s, according to Jin Sanlin of the Development Research Centre, a government think-tank. By 2017, he writes, that supply of surplus labour in the countryside will have all but disappeared.
Chinese officials note that the speed of urbanisation in China has been far faster than in Western countries during their industrial transformations. It took China only 30 years to climb from 20% urbanisation to today’s 54%. In Britain the equivalent journey took 100 years and in America 60. However, in more recent times population growth in urban China has been slower than in countries such as South Korea and Indonesia during their period of rapid economic development, mainly because of China’s discriminatory policies against migrants and its state monopoly on rural-land sales.
By any measure, the country’s urbanisation has been impressive. Shanghai is about to finish a 121-storey American-designed skyscraper that will be the world’s second-tallest building (after Dubai’s Burj Khalifa). Whole new urban districts, underground railways, modern airports and intercity expressways have been built on a scale and at a pace most countries would be proud of. But China has failed to reap the full benefits of city growth. This is becoming a pressing problem in the face of diminishing returns from pouring ever more concrete.
Menilik Kondisi Ekonomi Tiongkok
HONGKONG, KOMPAS.com – Pengamat menyatakan ekonomi Tiongkok kehilangan momentum pada kuartal I 2014 dan meleset dari target pemerintah. Apa yang sebenarnya terjadi pada ekonomi terbesar kedua dunia ini? Produk domestik bruto (PDB) Tiongkok diprediksi mencapai 7,3 persen pada kuartal I 2014.Para ekonom yang disurvei CNN Money, juga memprediksi pertumbuhan ekonomi Tiongkok tahun 2014 mencapai 7,3 persen, di bawah target pemerintah yang mencapai 7,5 persen.Pertumbuhan ekonomi Tiongkok sangat dicermati terkait upaya pemerintah melakukan reformasi ekonomi setelah bertahun-tahun “lari kencang.” Perlambatan memang sangat terlihat.PDB Tiongkok tercatat sebesar 7,7 persen dalam dua tahun terakhir, dibandingkan 9,3 persen pada tahun 2011 dan 10,5 persen di tahun 2010. Pemerintah Tiongkok menyatakan, nyaman dengan pertumbuhan ekonomi sekitar 7,5 persen.”Pemerintah telah menggarisbawahi bahwa menjaga pertumbuhan adalah tujuan ekonomi terpenting. Pemerintah pun telah mulai mengambil langkah yang tak ambisius untuk mendukung pertumbuhan,” kata Ekonom RBS Louis Kuijs.Selama tiga kuartal terakhir, beberapa ekonom, menyatakan pertumbuhan kredit masih menjadi tantangan terbesar perekonomian Tiongkok. Ini adalah akar dari berbagai tantangan yang dialami Negeri Tirai Bambu itu.Ekonom Societe Generale Wei Yao mengatakan, pemerintah Tiongkok harus mengerem pertumbuhan kredit, walaupun berarti akan berdampak pada menurunnya investasi domestik. Beberapa permasalahan lain adalah pasar properti yang overheat dan meningkatnya volatilitas mata uang yuan.”Intinya adalah tidak ada jalan keluar yang mudah untuk keluar dari masalah yang dihadapi Tiongkok,” ujar Ekonom Daiwa Lai dan Tang.Dampak bagi Indonesia Perlambatan ekonomi Tiongkok tentu saja akan berdampak kepada negara-negara yang menggantungkan nasib ekspornya ke Tiongkok, termasuk Indonesia. Tiongkok adalah konsumen terbesar produk-produk ekspor Indonesia, terutama komoditas.Direktur Departemen Kebijakan Ekonomi dan Moneter Bank Indonesia (BI) Solikin M Juhro beberapa waktu lalu mengaku pihaknya masih memandang kondisi di Tiongkok masih dicermati menjadi faktor yang dapat memberikan risiko perlambatan. Sebab, hal ini berkaitan dengan ekspor komoditas Indonesia.”Tiongkok kenapa penting? Karena saat ini kan dia ingin soft landing. Perlambatan di Tiongkok mempengaruhi harga komoditas internasional. CPO, karet, timah itu kan konsumen tetbesarnya Tiongkok. Kalau Tiongkok melambat maka ekspor komoditas kita akan terpengaruh,” jelasnya.Sementara itu, Bank Pembangunan Asia (ADB) memprediksi perlambatan ekonomi Tiongkok akan berpengaruh pada volume ekspor Indonesia.”Pertumbuhan akan lebih flat. Negara yang penting dicatat adalah Tiongkok. Pertumbuhan ekonomi Tiongkok akan melemah karena ada penurunan pertumbuhan kredit. Dengan demikian pertumbuhan ekspor kita akan tertahan,” kata Deputy Country Director ADB untuk Indonesia Edimon Ginting.
26. March 2014, 16:42:46 SGT
Pertumbuhan Ekonomi Cina Tak Memuaskan
Seorang pejabat senior pada lembaga investasi milik pemerintah Cina mengatakan pertumbuhan ekonomi negara itu sejauh ini mengecewakan. Namun, menurutnya, masih terlalu dini untuk memicu kekhawatiran.
“Pertumbuhan [Cina] pada triwulan pertama tidak memuaskan. Tetapi, situasi saat ini seakan masih dalam kondisi uji coba—bukan mewakili [pertumbuhan] setahun,” ujar Li Xiaopeng, kepala dewan pengawas China Investment Corp, dalam konferensi investasi Credit Suisse di Hong Kong.
Dewan pengawas CIC bertanggung jawab memonitor perilaku para direktur dan eksekutif lembaga investasi itu.
“Pertumbuhan yang sesungguhnya terjadi [pada kuartal kedua]. Jadi, janganlah cemas,” ujarnya sambil menyinggung pengaruh Tahun Baru Imlek dalam pembacaan data ekonomi.
Dalam dua bulan pertama 2014, data perekonomian Cina menunjukkan hasil mengecewakan. Indeks saham turun dan perbankan investasi terpaksa menurunkan prediksi pertumbuhan Cina.
Tahun lalu, Cina mengatakan akan mengambil sejumlah langkah reformasi untuk membuat sektor korporasi lebih kompetitif. Namun banyak analis mengatakan kebijakan ini akan membebani pertumbuhan ekonomi Negeri Tirai Bambu.
Unemployment rate rises to 6.7 percent in February; economy adds 175,000 jobs
By Ylan Q. Mui, Published: March 8 E-mail the writer
The U.S. unemployment rate inched up in February as more people joined the labor force to hunt for a job, according to government data released Friday.
The Labor Department reported that the unemployment rate rose from 6.6 percent in January to 6.7 percent in February — a move that actually suggests positive momentum for the economy. That’s because the uptick was not because of workers losing their jobs but rather more people looking for employment. The data also showed the economy added a solid 175,000 jobs last month after two months of lackluster growth.
“The overall impression is that things did slow down, but not as drastically as the December and January data suggested,” said Kevin Logan, chief U.S. economist at HSBC.
The slowdown in hiring this winter, coupled with recent weak data from the housing and manufacturing industries, have raised questions about the strength of the nation’s economic recovery. The strong growth enjoyed during the second half of 2013 has not carried into 2014, despite predictions that this would be a breakout year for the economy.
Some analysts have said that the data was skewed by the record-setting extreme winter. The economy has been buffeted by below-zero temperatures, historic snowfalls and disruptive ice storms. More than half of the nation’s lower 48 states were covered in snow early this week, the most since the National Oceanic and Atmospheric Administration began tracking the data a decade ago.
“This is a good, resilient report, especially given the weather,” Labor Secretary Thomas E. Perez said in an interview Friday. “It shows that the economy continues to move in the right direction.”
The labor force grew by 264,000 people in February, and more than three-quarters of them were job seekers — a sign that the rapid decline in the size of the workforce may be leveling off.
Many of the people who left the workforce were retirees or discouraged workers who had given up hope of finding a job. Their departure helped drive down the unemployment rate even when hiring was weak. If that trend reverses, it could signal that the job market is strong enough to give discouraged workers renewed hope, although economists cautioned it is still too early to tell whether that is occurring.
“We could be on the cusp of that,” Logan said. But, he added, “that’s a question that’s not answered by today’s data.”
Education continued to be a significant source of new jobs, with the sector adding 33,000 positions in February. The hospitality industry created 25,000 jobs and professional services increased by 79,000.
The beleaguered construction sector added 15,000 jobs, but manufacturing remained tepid with just 6,000 positions created. The federal government shed 6,000 positions, but that was offset by hiring at the state and local levels.
Investors initially cheered the news as the major U.S. stock indexes opened higher on Friday. But the euphoria wore off as the day progressed. The Standard & Poor’s 500-stock index eked out a 0.1 percent gain to close at 1,878, while the blue-chip Dow Jones Industrial Average ended modestly, up 0.2 percent to 16,453. The tech-heavy Nasdaq fell 0.4 percent.
Analysts blamed some of the volatility on traders attempting to parse what the recent data mean for the Federal Reserve’s bond-buying program. The stronger outlook for the recovery at the end of last year prompted the Fed to begin scaling back the amount of money it is pumping into the economy. The Fed has bought more than $1 trillion in bonds to help push down long-term interest rates.
In congressional testimony last week, Federal Reserve Chair Janet L. Yellen said the central bank would be “attentive to signals” that the recovery could be faltering, but that it is still trying to determine how much the weather has affected the data. Other central bank officials have suggested that the bar for changing plans is high. In an interview with The Washington Post, Atlanta Fed President Dennis P. Lockhart said he expects the data will fluctuate.
“The variability that comes sort of normally from quarter to quarter or month to month is not likely in my mind to justify a change,” he said Thursday. “It would have to be fairly material.”
The rise in the unemployment rate also gives the Fed more breathing room in its guidance on interest rates. The central bank has promised to keep its target for short-term rates near zero at least until the jobless rate hit 6.5 percent — a threshold that moved further away last month.
Still, Fed officials are likely to debate changes to that promise when they meet in Washington later this month. Several key policymakers, including Yellen, have indicated that they would prefer to move away from numerical targets in favor of more qualitative language describing the labor market.
Another worrying chart on China
Okay, so this isn’t quite the plunge as was seen in Chinese exports. But the chart of China’s oil products demand, via the International Energy Agency, should also be cause for concern over economic growth there.
What this shows is that Chinese demand, while certainly not collapsing, isn’t growing as fast.
“Having fallen, in y‐o‐y terms, in both November and December, a further modest decline is foreseen for January,” the IEA said of Chinese demand growth. “This slowdown reflects a combination of weaker underlying economic growth, as the government attempts to redirect the economy from heavy reliance on exports to domestic consumption, and, at the margin, environmental measures designed to curb air pollution.”
Gasoil demand in particular has been weak due to slowing industrial production and as less is needed to move coal around the country.
The Chinese picture isn’t all bad — car sales are keeping up gasoline demand there, and jet and kerosene demand also is strong.
But then, the question isn’t whether China’s economy is growing. It’s how fast, and worries are growing that Chinese growth might be in the 6% range than the 7.5% the government is officially targeting. Read related post on banks cutting Chinese growth forecasts.
– Steve Goldstein
Lonjakan Ekspor Impor China Mencurigakan
Muhammad Abdi Amna – Rabu, 12 Februari 2014, 17:47 WIB
Bisnis.com, HONG KONG – Ekspor China pada Januari melampaui perkiraan, sedangkan pertumbuhan impor di luar dugaan mengalami percepatan.
Hal ini berlawanan dengan tanda-tanda ekonomi terbesar kedua di dunia sedang kehilangan momentum di tengah upaya menjinakkan kredit.
Menurut kantor Administrasi Umum Bea Cukai di Beijing pada Rabu (12/2), pengiriman ke luar negeri naik 10,6% dibandingkan dengan tahun sebelumnya. Namun, peningkatan ini dapat terdistorsi oleh faktur palsu dan masa liburan.
Pencapaian itu jauh lebih besar jika dibandingkan dengan proyeksi median ekonom yang memperkirakan kenaikan 0,1%. Kenaikan impor 10%, meninggalkan surplus perdagangan senilai US$31,9 miliar, merupakan yang terbesar untuk periode Januari sejak 2009.
“Kami masih mengharapkan ekspor berada pada tren pemulihan, meskipun data utama dalam beberapa bulan mendatang kemungkinan akan tetap terdistorsi dalam skala besar karena kelebihan faktur dari setahun yang lalu,” kata Louis Kuijs, kepala ekonom Royal Bank of Skotlandia Group Plc di Hong Kong.
Kekuatan dalam permintaan global dan domestik akan mendukung pertumbuhan yang telah diproyeksikan oleh analis sedang berada dalam laju terlambat selama 24 tahun pada 2014. Pemerintah berusaha untuk menyeimbangkan kredit dengan pengawasan yang keras serta shadow banking dengan mempertahankan laju ekspansi yang wajar.
Jika dibandingkan, angka tahun lalu terdistorsi karena adanya faktur palsu untuk menyamarkan arus modal pada 2013 dan perbadaan waktu pada seminggu penuh selama liburan tahun baru Imlek.
Sebuah ketidaksesuaian yang sangat lebar antara Hong Kong dan data yang dimiliki oleh China dalam perdagangan bilateral pada Desember, sehingga memicu spekulasi bahwa angka China dilebih-lebihkan dengan ekspor palsu.
Bursa AS melesat di New York
Rabu, 12 Februari 2014 | 05:48 WIB
NEW YORK. Bursa AS melejit pada transaksi penutupan bursa tadi malam (11/2). Mengutip data Bloomberg, pada pukul 16.00 waktu New York, indeks Standard & Poor’s 500 melaju 1,1% menjadi 1.819,75. Dengan demikian, dalam empat hari terakhir, kenaikan indeks S&P sudah mencapai 3,9%.
Sedangkan indeks Dow Jones menanjak 1,2% menjadi 15.994,77. Transaksi tadi malam melibatkan sekitar 7 miliar saham. Angka tersebut 11% lebih tinggi dari tingkat rata-rata volume transaksi 30 harian.
Pergerakan sejumlah saham turut mempengaruhi bursa AS. Beberapa di antaranya: Cliffs Natural Resources Inc dan Mosaic Co yang naik lebih dari 2,4%. Selain itu, ada saham Boeing Co dan Goldman Sachs Group Inc yang naik 2,1%. Sedangkan Sprint Corp naik 2,7% dan CVS Caremark Corp naik 2,7%.
Wajah bursa AS terlihat sumringah terdongkrak pernyataan Janet Yellen di hadapan Kongres AS tadi malam.
“Pasar menyukai konsistensi dan apa yang kita dengar tadi pagi cukup konsisten dengan apa yang kita dengar berbulan-bulan yang lalu,” jelas Steven Rees, head of US equities JPMorgan Private Bank. Dia menambahkan, Yellen menegaskan bahwa tapering akan terus dilanjutkan, namun tergantung kepada outlook perekonomian.
Seperti yang diberitakan sebelumnya, Yellen -yang tadi malam menyampaikan pernyataan publik pertama kali sebagai pimpinan the Fed- mengatakan bahwa guncangan pasar finansial tidak menimbulkan risiko besar terhadap outlook perekonomian AS.
Namun, “Meski pertumbuhan ekonomi meningkat, pemulihan di pasar tenaga kerja AS masih jauh dari kata selesai. Saya berkomitmen utuk mencapai dua target utama yakni membantu perekonomian sehingga bisa menciptakan lapangan pekerjaan bagi warga AS dan mengembalikan tingkat inflasi ke level 2% dan memastikan inflasi tidak akan melonjak di atas level tersebut,” papar Yellen.
Editor: Barratut Taqiyyah
As Yellen makes Fed debut, expect theater, not fireworks
BY JONATHAN SPICER
Sun Feb 9, 2014 7:17am EST
(Reuters) – Janet Yellen’s first test as chair of the Federal Reserve comes on Tuesday when she faces U.S. lawmakers, some hostile to the central bank, who will want to know how committed she is to winding down the Fed’s support for the economy.
With the world’s financial markets watching, Yellen, who succeeded Ben Bernanke last week, will have a chance to set a mostly upbeat tone and point to signs of steady economic progress, despite some recent bumps in the road.
The Fed has embarked on perhaps its most difficult policy shift after five years of ultra-easy money. It has begun scaling back its bond-buying stimulus, but at a measured pace that could frustrate some Republicans who think the program is reckless.
Those concerns will be aired on Tuesday, when Yellen appears before the Republican-controlled House Financial Services Committee to testify on the Fed’s semiannual monetary policy report. Her testimony will be released at 8:30 a.m., although the hearing does not begin until 10 a.m.
She testifies to the Democrat-controlled Senate Banking Committee on Thursday.
The Fed has trimmed its asset purchases twice since December, encouraged by momentum in the economy late last year. But two months of weak U.S. jobs growth, a slump in manufacturing and a recent selloff in emerging markets now complicate things for the new Fed chief.
Yellen, the former Fed vice chair who is the first woman to run the central bank in its 100-year history, is expected to calmly point to a longer-term trend toward improvement in the labor market and to low but stable inflation as reasons for cautious optimism and for steady reductions in the stimulus.
Long concerned with the pain the 2007-2009 recession caused for American workers, she will also probably stress that near-zero interest rates will not be raised any time soon.
“I don’t think there’s anything she’s not going to be ready for,” said Paul Ashworth, chief North American economist at research firm Capital Economics.
“These are sometimes political theater,” he added. “It’s a mid-term election year … so you are going to get some grandstanding from both sides.”
REPUBLICANS VS FED
Underlining Republican unease with the Fed’s aggressive response to the financial crisis and recession, the House panel invited witnesses to react to Yellen’s testimony immediately afterward. Three of the four are critics of the bond-buying program, including Stanford University’s John Taylor.
Conservatives worry the years of near-zero interest rates and trillions of dollars in money-printing risk weakening the U.S. dollar, while setting the stage for asset price bubbles and an explosion in inflation.
Jeb Hensarling, chairman of the House committee, has been holding hearings on the asset purchases, which are currently running at $65 billion per month. In the Senate, fellow Republican Rand Paul wants to establish audits of the Fed’s policy deliberations – a notion Bernanke and others have slammed as a threat to central bank independence from politics.
Committee Republicans said they want Yellen to give details on how she will balance the Fed’s responsibilities to keep inflation in check while pushing for full employment.
“I’m sure she’ll be hearing questions on the lack of effective monetary policy and the impact going forward,” said Rep. Scott Garrett, the Republican chairman of the Financial Services’ capital markets subcommittee.
Another Republican panel member, Rep. Shelley Moore Capito, said Yellen must do more to help senior citizens build safe investment returns. “No one can create any wealth with interest rates squashed as they are,” she said.
PARSING HER WORDS
For all the criticism, most economists blame Congress for slowing the U.S. recovery from recession with cuts to government spending, tax increases and a series of budget battles that tested investors’ confidence in the United States.
Frustrated with the recovery, the Fed has launched three rounds of asset purchases, swelling its balance sheet to more than $4 trillion. If the labor market doesn’t stumble badly and inflation doesn’t weaken, the Fed aims to shelve the purchases by year end and will likely raise rates sometime next year.
The trick for Yellen will be clearly articulating this on live television in a pressure-filled question-and-answer session that is likely to cover anything from Wall Street regulation to fiscal policy and the gold standard.
Markets will be keenly attuned after a few weeks of high volatility sparked by drops in emerging-market currencies, and after a decidedly mixed batch of U.S. data that has raised questions over the economy’s strength.
“We’ll all be trying to get a sense of how the Fed is reading recent developments,” said Carl Tannenbaum, chief economist at Chicago-based Northern Trust. “We have had some news that while it is almost certainly affected by the weather, it has not been robust.”
While it is her first public appearance since a Senate nomination hearing in November, Yellen’s style is well known on Wall Street after more than three years as the central bank’s No. 2 official and six years running the San Francisco Fed.
In November, she made plain that aggressive efforts to spur growth and hiring remained important. This week, she will probably try to again stick to the script ahead of chairing her first Fed policy-setting meeting on March 18-19.
Capito said that while she would like Yellen to give more specific answers to questions than her predecessor did, the new chair will likely be spared the contentious jabs Bernanke took from committee Republicans.
“She will be treated respectfully,” Capito said. “I don’t think there will be a lot of fireworks.”
Kamis, 30 Januari 2014, 22:36 WIB
Ekonomi AS Semakin Kuat
Bisnis.com, WASHINGTON — Ekonomi Amerika Serikat semakin menggeliat tahun ini setelah tumbuh 3,2% pada kuartal IV/2013 yang ditopang oleh meningkatnya konsumsi domestik.
Laju peningkatan produk domestik bruto (PDB) Amerika Serikat sesuai dengan perkiraan sejumlah ekonom yang disurvei Bloomberg yaitu 3,2%. Departemen Perdagangan AS juga menunjukkan pertumbuhan serupa sebesar 4,1% pada kuartal sebelumnya.
Pertumbuhan ekonomi pada semester kedua pada 2013 merupakan yang tertinggi sejak 6 bulan yang berakhir Maret 2012. Sebelum laporan ini keluar, konsumsi masyarakat dilaporkan melesat 3,3% pada kuartal IV/2013.
Kenaikan konsumsi masyarakat tersebut rupanya telah menolong aksi penghematan yang dilakukan Pemerintah AS terkait government shutdown pada Oktober tahun lalu.
Penguatan perekonomian AS yang ditandai dengan berkurangnya tantangan fiskal dan perbaikan pada ketersediaan lapangan pekerjaan diperkirakan bakal mempertahankan konsumsi masyarakat dan perusahaan pada tahun ini.
Selain itu, alasan tersebut merupakan alasan terkuat The Fed tetap melanjutkan rencananya untuk mengurangi stimulus alias tapering.
“Cukup ada indikasi keseimbangan pada penguatan ekonomi AS,” ungkap Kepala Ekonom HS Inc.di Lexington, Massachusetts Nariman Behravesh, Kamis (30/1).
Dirinya mengatakan konsumsi masyarakat tumbuh pesat dan faktor pendorong pertumbuhan mulai beranjak naik, antara lain meningkatnya belanja modal dan ekspor.
Departemen Ketenagakerjaan AS juga mencatat angka bekerja AS meningkat menjadi 348.000 orang dari 19.000 orang. Kinerja perbaikan pada pengentasan pengangguran AS merupakan yang tertinggi sejak pertengahan Desember 2013.
Sementara itu, perkiraan median ekonom yang disurvei Bloomberg menunjukkan penaikan berada pada angka 33.000 orang. (Bloomberg)
US QE potential risks on emerging markets
Updated: 2014-01-27 10:43
DAVOS – The spillover effects on emerging markets caused by the tapering of US quantitative easing (QE) could be varied from country to country, participants to the World Economic Forum (WEF)’s Davos meeting said Saturday.
Late last year, the Federal Reserve (FED) announced a “modest reduction” in monthly asset purchases. The official kick-off of the American central bank’s gradual exit from the five-year-long stimulus was feared to throw the global markets, especially the emerging markets, into volatility, which has naturally become a hot topic in the annual gathering of global elites amid the expectation of a fragile recovery in global economy.
Christine Lagarde, Managing Director of the International Monetary Fund (IMF), said on a plenary session of the four-day event in Davos this afternoon that in May last year when the hint of FED to gradually wind down its asset purchase gave the markets a heavy blow, the actual flow of capitals (from emerging economies) has not been not that big, and not all emerging markets have been effected in the same way.
“Markets and investors are very cunning, they look at the fundamentals of economies, look at the strength of government, look at the predictability of policies, look at the policy-making, and they decide to move in, to stay, (or) to move out. There are countries that have hardly any currency movement, and there are countries that have seen significant currency movement as the result of the talk of tapering and subsequently the announcement in December”, said the head of IMF.
She then emphasized that what has been happening between May and December, the official announcement of US unwinding of QE, has been beneficial for many countries, having taken India as an example to explain the impact of monetary policy, and as well as reaffirmation of fiscal policy on how prepared of the South-Asian country, which was greatly hit in May the rupee fell to a record low later, to the potential risks at present.
Palaniappan Chidambaram, Finance Minister of India, said earlier at the Davos meeting that developing economies would feel the certain pinch of the tapering, and India is better prepared than last year with its estimated strong economic growth this year, fiscal consolidation, reserves’ augmentation, and other measures to stabilize its capital market.
“The risks associated with emerging markets remain high, but the way in which QE tapering is applied can play a role in either enabling growth or throwing currencies and economies into turmoil,” FTI Consulting said in a report published at the beginning of this year’s event.
The company warned that inflation destabilization and the rising costs of borrowing can be possible threats to emerging economies should they give poor responses.
China’s banks must evolve or perish
Updated: 2014-01-27 02:08
BEIJING – As China’s traditional banks raise interest rates to claw back lost deposits, they must find new profit sources as Internet finance is booming.
Earlier this week, the China Construction Bank, the Agricultural Bank of China and the Bank of Communications raised the deposit rate by 10 percent to the upper limit in some branches, for some clients, or for a fixed period.
Experts see this as an attempt to restore some of the deposits that have been diverted into Internet products such as Yu’E Bao, a personal online finance product by Internet giant Alibaba which allows users to place any amount of savings into a money market fund.
At the end of 2013, Yu’E Bao had 43 million users with aggregate deposits of 185 billion yuan (about $31 billion), the single biggest public fund in China.
“Although the rate increase might not bring back deposits that had gone to the Internet, it is still attractive to clients who make daily capital demands on banks,” said Guo Tianyong, a professor at the Central University of Finance and Economics.
In the short term, banks might face liquidity problems due to the competition from Internet finance, Guo warned. “This would also serve as a wake-up call that there are no more easy profits for banks in China, solely on deposits, loans and remittances,” said Guo. “They must promote intermediary business and wealth management and provide all-round service to clients.”
In previous years, banks often saw their profits grow 30 to 40 percent annually, according to Zong Liang, deputy head of the international finance institute of the Bank of China, but as the financial sector is liberalized it becomes difficult, forcing banks to be more innovative, said Zong.
Even before the emergence of Internet finance, profit growth was slowing down. In 2012, the Industrial and Commercial Bank of China and the China Construction Bank saw their profits grow by 14.5 percent and 14.3 percent respectively, sharply down from the 36 percent and 34 percent in 2008.
The People’s Bank of China (PBOC), the central bank, has already initiated liberalization of the financial sector. In June 2012, the PBOC announced that the upper limit of the floating band of deposit rates would be adjusted to 1.1 times the benchmark, or up 10 percent at most.
Guo saw the rate increase as a “rehearsal” for banks ahead of total liberalization of interest rates, to prepare themselves for the future.
Interest rate freedom means the future is not all rosy for the new Internet financiers either, such as Yu’E Bao, who invested more than 80 percent of its fund into an “agreement deposit,” using the interest rate spread to make a profit.
Interest rate liberalization would make it impossible for Yu’E Bao to make profits this way. They too must explore new ways of making profits or find their current high rate of return unsustainable, said Guo.
China reveals 2014 financial reform priorities
Updated: 2014-01-26 10:36
BEIJING – China’s four major financial authorities have announced their priorities for 2014.
The People’s Bank of China (PBOC), the central bank, will continue to expand the cross-border use of the Chinese currency, the Renminbi, this year.
At the same time, it will stick to prudent monetary policy and maintain steady credit growth, improve the multi-tier capital market, and engage further in international financial regulation policy-making.
The China Banking Regulatory Commission (CBRC) will pilot three to five private banks that will bear their own risk, opening up the banking sector to domestic and foreign private capital.
The banking industry watchdog will gradually reduce the threshold for foreign banks to enter the banking sector and ease their RMB operation requirements.
The CBRC will keep a close eye on major housing developers, and reduce the risk of default through weak links in the construction industry’s money chain.
Also on the banking regulator’s radar are restructuring and technological upgrades in overcapacity industries, liquidating their assets and reducing the risk of default.
In pursuit of a more efficient market, the China Securities Regulatory Commission (CSRC) will switch IPOs from the current approval system to one based on registration.
Under the new system, the timing of IPOs and how shares are issued will be determined by the market, as long as issuers disclose all relevant information as required.
In order to streamline approval procedures, the CSRC will also abolish approval requirements on 21 items over the next three years starting from 2014.
The China Insurance Regulatory Commission (CIRC) is considering catastrophe insurance for those hit by disasters.
The CIRC will join with the finance and other ministries to work on implementation plans for catastrophe insurance this year.
The commission also intends to set up food liability insurance in 2014, given the importance of food safety in China.
Bank di China Alami Krisis Likuiditas?
Oleh: Wahid Ma’ruf
pasarmodal – Senin, 27 Januari 2014 | 12:51 WIB
INILAH.COM, Hong Kong – Kekhawatiran krisis likuiditas di Cina muncul lagi Senin (27/1/2014). Pemicunya situs Citibank mengunggah pemberitahuan transfer dari dolar ke yuan tertunda.
“Ini merupakan bagian dari pemeliharaan rutin kami setelah selama periode tahunan menjelang Tahun Baru China,” kata Richard Tesvich, juru bicara Citigroup seperti mengutip cnbc.com.
Penundaan transfer dana awalnya dikeluhkan dalam kolom di web majalah Forbes. Hal ini mulai memicu kekhawatiran potensi krisis likuiditas secara nasional di Negeri Tirai Bambu tersebut. Walaupun link di situ Forbus tidak lagi berfungsi. Beberapa komentar di Twitter mengklaim cerita tersebut telah dihapus pihak terkait.
“Alasan khusus yang diberikan dengan pemeliharaan sistem di bank sentral tidak masuk akal. Pemberitahuan pemeliharaan sistem hari ini adalah tanda mendasar suatu masalah,” tulis Gordon Chang di web Forbes.
Menurut dia, bagi bank sangat membutuhkan uang tunai untuk rollover dengan semakin meningkatnya jumlah kredit bermasalah dan produk wealth management.
Sementara petugas bank di Citigroup China mengatakan pelanggan masih dapat melakukan transfer sampai hari kerja pada tanggal 30 Januari. Tetapi bank tutup saat libur panjang tahun baru Imlek.
Sementara bursa saham Asia mengalami pelemahan tajam pada perdagangan Senin pagi. Investor mengkhawatirkan kebijakan pengetatan moneter dan kredit di China dan AS.
Indeks Nikkei melemah 2,4$, indeks Hang Seng turun 2,2%,, indeks Shanghai melemah 0,8%, indeks Kospi turun 1,4%. Sementara indeks ASX tutup bersamaan dengan libur nasional.