Most Asia markets up after Wall St record

HONG KONG - Most Asian markets rose Monday following another record close on Wall Street, while Shanghai stocks pared steep early losses thanks to stronger than expected growth figures.

The world's number two economy expanded an annualized 6.9 percent in April-June, beating forecasts in an AFP survey and indicating it is stabilizing after a years-long slowdown.

However, while the reading was the same as the previous three months, officials warned of "uncertain factors abroad and long-term structural contradictions" at home.

China is trying to shift from an economy reliant on state investment to one powered by consumer spending. Its leaders are also attempting to clamp down on bad debt, which analysts fear could spark a financial crisis if not dealt with.

Rob Subbaraman, chief economist for Asia ex-Japan at Nomura Holdings in Singapore, told Bloomberg News that while fiscal stimulus remains an important driver of growth "it's also encouraging to see more signs of rebalancing, with the pickup in retail sales growth."

But Shanghai stocks fell 1.4 percent after a top-level government policy-setting conference at the weekend promised an extended crackdown on risks in the financial system.

The country's second exchange in Shenzhen dived 4.3 percent while the ChiNext gauge, a Nasdaq-style index in Shenzhen, plunged 5.1 percent to a near thirty-month low.

Since April, China has launched an aggressive crackdown on risky lending as warnings mounted over a looming debt crisis due to runaway credit.

The IMF warned in April that potential contagion from debt defaults could "imperil global financial stability".

CITIC Securities analyst Zhang Qun said the signal from the weekend conference "hurt" market sentiment.

DOLLAR STRUGGLES

Most other regional investors built on last week's solid gains, tracking fresh highs for the Dow and S&P 500 prompted by below-par US inflation and retail sales data.

The US readings missed forecasts and fueled speculation that the Federal Reserve's plans to raise interest rates this year could be put on the back burner. This sent equities higher since borrowing costs look likely to remain low.

Hong Kong ended up 0.3 percent and Seoul closed 0.4 percent higher.

Singapore was 0.1 percent higher while Wellington, Taipei and Manila all saw healthy rises. But Sydney ended 0.2 percent down. Tokyo was closed for a public holiday.

Lower expectations of a rise in US interest rates rattled the dollar on Friday. While the unit was stronger it struggled to claw back its big losses against the pound, euro and yen.

The greenback was already under pressure after Fed boss Janet Yellen gave a more dovish outlook for future rises in interest rates, pointing to the bank's struggle to fire up inflation.

"Persistently low inflation and soft retail sales in the US are raising legitimate concerns about whether the likely resting point for the Fed Fund Rate might be well below the three percent" that is forecast for the end of 2019, said Ric Spooner, chief market analyst at CMC Markets.

In early European trade London and Frankfurt each rose 0.2 percent, while Paris was flat.


source: news.abs-cbn.com

Japan's Nomura to invest in BDO unit

MANILA - Japanese brokerage firm Nomura Holdings Inc. will be investing in a unit of BDO Unibank Inc. through a joint venture with the Sy-led bank.

In a disclosure to the stock exchange, BDO said it has signed a definitive agreement with Nomura for a joint investment in PCIB Securities Inc., a BDO-owned securities dealer and broker.

"The primary objective of the joint venture is to leverage on the strength of both companies to contribute to the growth of the Philippine capital markets and establish a strong platform to serve a fast growing market," BDO said in a statement.

Under the terms of the agreement, BDO will hold a 51 percent stake while Nomura will own the remaining 49 percent.

"The joint venture will initially provide online trading services for local stocks to individual investors. It will eventually expand its services to include cross-border investment opportunities to a broader range of investors," BDO added.

The transaction is still subject to regulatory approvals.

BDO has one of the country's largest distribution networks, with more than 880 operating branches and over 2,600 ATMs nationwide.

Nomura, on the other hand, is the parent company of Nomura Securities, one of Japan's leading investment bank and brokerage firms.

source: www.abs-cbnnews.com

Tokyo's Nikkei stock index breaks 20,000 level

TOKYO - The Tokyo Stock Exchange's benchmark Nikkei index on Friday briefly broke through the psychologically important 20,000 level last seen 15 years ago.

The Nikkei 225 index reached 20,006.00 in the first few minutes of trade, rising 0.34 percent from Thursday following gains on Wall Street and a stronger dollar on an encouraging US jobs report.

It was the first time that the Nikkei had hit 20,000 since April 2000.

The index later came off its high, to sit at 19,917.62, a 0.10 percent loss from Thursday.

The early rise was heavily influenced by heavy-weighted Fast Retailing, the operator of fast-fashion brand Uniqlo, whose shares were up 2.62 precent after the group announced strong half-year earnings.

Strategists are upbeat over the outlook of stock prices on expectations of good earnings at Japanese companies, while acknowledging a short-term overshoot.

"When we look back on this moment, the 20,000 figure should just be a stop along the road," said Juichi Wako, a senior strategist at Nomura Holdings.

"It wouldn't be surprising if better-than-expected earnings lift the Nikkei to 21,000 or 22,000 by year's end.

"However, above the 20,000 mark, we might begin to hear voices that stocks are a bit overvalued," he told Bloomberg News.

The dollar held steady early Friday after rising on an encouraging US unemployment claims report.

The greenback was at 120.58 yen on Friday, hardly changed from 120.59 yen in New York late Thursday but up from 120.28 yen in Tokyo earlier Thursday.

The US Labor Department reported Thursday that the number of first-time unemployment claims rose last week, but claims filed in the past four weeks fell to a nearly 15-year low, suggesting a stronger labour market.

The robust data stoked speculation about the Federal Reserve's plan to raise ultra-low interest rates, boosting the dollar in a positive move for Japanese exporters.a

The euro bought $1.0661 and 128.56 yen on Friday against $1.0659 and 128.55 yen in US trade.

On Thursday big gains in petroleum stocks lifted the US equity market as investors bet on more large energy mergers following Royal Dutch Shell's huge takeover of BG Group.

The Dow Jones Industrial Average rose 0.31 percent while the broad-based S&P 500 gained 0.45 percent.

source: www.abs-cbnnews.com