Stocks dip, oil slides and havens shine as growth nerves nag

SYDNEY, Australia - Stock markets slipped on Thursday and safe havens such as government bonds, gold and the yen were supported in Asia, as a hint of uneasiness crept in over the outlook for interest rates and growth, particularly outside of the United States.

Oil prices skidded to a six-week low on concern about a supply overhang and the prospect of China, Japan and the United States dipping into their fuel reserves, with Brent futures last at $79.77, more than 8 percent off last month's three-year high.

The risk-sensitive Australian dollar also fell to a six-week trough of $0.7256.

Japan's Nikkei was down 0.6 percent in early trade. MSCI's broadest index of Asian shares outside Japan dropped 0.5 percent and S&P 500 futures were flat after the index eased a little bit overnight.

The mood was softest in Hong Kong where concern over the earnings outlook weighed on tech stocks and an almost 5 percent drop in heavyweight Alibaba dragged the Hang Seng about 1 percent lower.

"We do seem to have stalled somewhat as we head into the year end," said Jun Bei Liu, a portfolio manager at Tribeca Investment Partners in Sydney.

"Investors perhaps are just taking a bit of pause," she said, in the wake of a strong US results season, but as inflation and China's slowdown loom as macroeconomic headwinds.

The yen, a safe-haven asset which has also lately been sensitive to oil prices, had its sharpest one-day jump against the dollar in three months on Wednesday while gold rose almost 1 percent and Treasuries rallied along the curve.

Gold rose a further 0.1 percent to $1,869 an ounce in Asia on Thursday. The yen edged up to 113.94 per dollar.

Benchmark 10-year Treasury yields were steady in Tokyo at 1.5889 percent after falling about 5.5 basis points overnight.

The day ahead is quiet on the calendar, with appearances from central bankers in Australia, the United States and Europe and US jobless claims data the highlights.

BIG DOLLAR

Against the backdrop of apparent caution is a surging US dollar, as US data has turned surprisingly strong just as doubts have arisen over the outlook for other major economies.

On Wednesday figures showed a jump in building permits and the backlog of house construction rose to a 15-year high - underscoring strong demand on the heels of a better-than-expected retail sales report on Tuesday.

By contrast Europe is grappling with a fourth wave of COVID-19 cases and fresh restrictions to curb it, while the central bank is pushing back on pressure to raise rates.

The euro has recovered from a trip below $1.13 on Wednesday but remains shaky at $1.1325 and is braced for its worst month on the dollar since June when the Federal Reserve had surprised investors with a hawkish shift in tone.

Currency traders are also assessing a sharp downdraft in the Aussie/yen cross, often a barometer of market sentiment. It fell through its 200-day moving average on Tuesday and has lost almost 4 percent in a dozen sessions.

"You've got the perfect storm there for bears," said Matt Simpson, senior analyst at brokerage City Index. "Fundamentally and technically Aussie/yen looks pretty good with lower oil prices."

(Reporting by Tom Westbrook in Sydney Editing by Shri Navaratnam)

-reuters-

Asia shares mostly lower amid rising coronavirus cases, Washington turmoil

NEW YORK - Asian stocks were mostly lower on Tuesday, tracking Wall Street declines as political turmoil in Washington and rising coronavirus cases worldwide weighed on sentiment ahead of the start of the quarterly earnings season.

Political uncertainty dominated trading as House Democrats introduced a resolution to impeach U.S. President Donald Trump, accusing him of inciting insurrection following a violent attack on the Capitol last week.

Several big tech giants, including Twitter Inc, Amazon.com Inc , Alphabet Inc, Facebook Inc and Apple Inc, have taken actions against Trump and his network of supporters, as concerns mounted over the risk of continued violence.

Twitter’s stock tumbled 6.4 percent on Monday after the micro-blogging site permanently suspended Trump’s account last Friday.

Investors also kept an eye on the continued spread of the coronavirus globally as cases surpassed 90 million on Monday, according to a Reuters tally.

“The weakness was led by tech and I think the banning of Trump’s account by Twitter and Amazon stepping up against Parler all brought a renewed focus on increased regulation and reining in on tech,” said Thomas Hayes, chairman of Great Hill Capital in New York.

Japan’s Nikkei slipped 0.48 percent, South Korea’s KOSPI fell 0.91 percent and Hong Kong’s Hang Seng index futures lost 0.54 percent.

Defying the broader selloff, Australia’s S&P/ASX 200 rose 0.24 percent.

On Wall Street, the Dow Jones Industrial Average fell 0.29 percent, the S&P 500 lost 0.66 percent and the Nasdaq Composite dropped 1.25 percent.

Investors are expecting guidance on the extent to which executives see a rebound in 2021 earnings and the economy from results and conference calls from JP Morgan, Citi and Wells Fargo Friday.

Meanwhile, longer-term Treasury yields were at their highest since March before new long-dated supply coming this week and on speculation of more U.S. fiscal stimulus as Democrats will have control of Congress and the White House.

“People are optimistic to see the yield curve steepening and it could help spreads and net interest margins for banks,” Hayes said.

Benchmark 10-year notes last fell 11/32 in price to yield 1.1443 percent, from 1.107 percent late on Friday.

The spread between the two-year and 10-year Treasury yields brushed against 100 basis points to hit its steepest since July 2017.

The climb in yields in turn offered some support to the dollar, which rose to its highest in over two weeks against a basket of currencies.

The U.S. dollar index rose 0.256 percent, with the euro down 0.54 percent to $1.2152. The Japanese yen weakened 0.24 percent versus the greenback at 104.20 per dollar, while Sterling was last trading at $1.3516, down 0.35 percent on the day.

Crude oil prices fell, hit by renewed concerns about global fuel demand amid tough coronavirus lockdowns across the globe, as well as the stronger dollar.

U.S. crude recently fell 0.1 percent to $52.19 per barrel and Brent was at $55.61, down 0.68 percent on the day.

Safe-have spot gold dropped 0.2 percent to $1,844.27 an ounce. Silver fell 1.70 percent to $24.94.

-reuters-

Gold hits record high on haven demand as markets rally sputters

HONG KONG -- Gold hit a record high Monday as investors rushed into the safe-haven on concerns about China-US tensions, a spike in virus infections around the world and a lack of progress on a new stimulus bill in Washington.

After months of healthy rallies across equity markets -- fuelled by trillions of dollars in government and central bank support -- traders are beginning to step back as they weigh the long-term economic impact of the coronavirus.

With vast monetary easing measures put in place by the Federal Reserve pushing the dollar lower against most other currencies, gold is flying, hitting an all-time high of $1,944.71, well above its previous record of $1,921.18 seen in 2011. It later pulled back slightly.

Eyes are on the Fed's next policy meeting this week, with some predicting further measures to boost the economy -- possibly negative interest rates -- that could put more pressure on the dollar and send bullion above $2,000.

There are also concerns that a worse-than-forecast reading on second-quarter US gross domestic product could spark another dollar sell-off.

While the weak dollar has been a key catalyst for the metal's advance, gold has also been boosted by its attractiveness as a haven in times of turmoil with China-US relations souring by the day.

"Strong gains are inevitable as we enter a period much like the post-global financial crisis environment, where gold prices soared to record levels as a result of copious amounts of Fed money being pumped into the financial system," said Gavin Wendt, senior resource analyst at MineLife.

The greenback was down against most other currencies, with the euro at its highest since September 2018, while higher-yielding units such as the South Korean won and Indonesian rupiah were also up.

US stimulus struggle

Stock markets were mixed as investors fret over the impact of the virus on the economy.

Hong Kong, Tokyo, Singapore, Mumbai and Wellington were all in the red, while Shanghai, Sydney, Seoul and Jakarta were higher.

The tech-rich Taipei market ended at a record high thanks to a 10 percent surge in heavyweight Taiwan Semiconductor Manufactuirng Company, which has been riding a rally in the sector thanks to people working from home during the virus.

London, Paris opened with losses, but Frankfurt was up.

Investors are growing concerned about slow progress on a new US stimulus programme, with Republicans still to present proposals worth around $1 trillion, which is less than a third of the plan set out by Democrats.

There are concerns an agreement could take some time, hitting millions of Americans whose much-needed extra unemployment benefits are about to come to an end.

Meanwhile, Hong Kong's stock market launched a new index Monday tracking China's tech giants. The Hang Seng Tech Index tracks the top 30 tech firms listed in the city, including Alibaba, JD.com, Tencent, Xiaomi and Meituan Dianping.

Hong Kong has become an increasingly attractive place for Chinese tech companies to list, especially as they face greater scrutiny and restrictions in the United States.

Agence France-Presse

Oil crash piles pressure on virus-hit Saudi economy

RIYADH - From empty hotels to shuttered beauty salons, oil-dependent Saudi Arabia is bracing for a coronavirus-led economic slump on top of possible austerity measures as crude prices go into free fall.

Huge losses are expected after the Arab world's biggest economy shut down cinemas, malls and restaurants, halted flights, suspended the year-round umrah pilgrimage and locked down eastern Qatif region -- home to around 500,000 -- in a bid to contain the deadly virus.

The top crude exporter also faces plummeting oil prices, which slipped below $30 a barrel this week for the first time in four years, on the back of sagging demand and a price war with Russia.

The shock of this liquidity sapping cocktail of events has necessitated austerity measures which are likely to imperil grandiose diversification projects.

Adding to the chain of events are the recent arrests of King Salman's brother and nephew, which triggered speculation of political instability amid the government's public silence on the royal purge.

"It's crisis time," said a Saudi government employee, explaining why he had begun converting part of his salary into US dollars and gold coins.

"Everything is unpredictable and we should be ready for the worst."

The central bank has shrugged off fears that plunging oil prices were straining the kingdom's currency, pegged for decades to the US dollar.

A jeweller in Riyadh told AFP he had fielded a number of enquiries to convert "substantial amounts of cash" into gold bars and coins.

SPENDING CUTS

Many government workers fear cuts to state allowances are coming despite rising living costs.

Some Saudis also worry that recruitment in the public and private sectors will freeze, just as unemployment was already high. 

Meanwhile, Saudi students are worried that government scholarships for overseas education will take a hit.

The finance ministry has instructed government bodies to submit proposals to slash this year's spending by 20 to 30 percent, the economic consultancy Nasser Saidi and Associates said in a research note.

"This will likely take the shape of postponed projects and delays in awarding contracts" among other economizing measures, the note said.

The kingdom is now preparing budget scenarios in which crude prices could drop as low as $12 to $20 per barrel, according to the Energy Intelligence Group.

"Public confidence depends on government spending and oil sentiment -— both are down," said a consultant advising a Saudi ministry on a major project.

"We don't know if we will have our jobs tomorrow."

The once free-spending OPEC kingpin has instructed Saudi ministries that they need to account for "every penny" they spend, the consultant added.

Saudi authorities did not respond to requests for comment.

Several Riyadh hotels —- many of them empty amid falling tourist numbers —- have been forced to send their staff on unpaid leave.

But providing some support, the health ministry has booked multiple Riyadh hotels to quarantine people after the coronavirus scare, according to several staff and guests who were forced to empty the properties at short notice.

'SURVIVAL OF FITTEST'

The oil crash follows the crude exporter's decision to hike production from April and offer the biggest price cuts in two decades, in retaliation for Russia's refusal to tighten supply as the virus saps demand.

Saudi Arabia has shrugged off criticism that the move could bankrupt its oil-producing rivals, indicating it was no longer willing to play the role of "swing producer" that bears the burden of stabilizing the markets.

"The days of Saudi Arabia absorbing oil market shocks on behalf of the global economy and other producers are probably over," said Saudi expert and author Ali Shihabi. 

"The energy game... is now a survival of the fittest."

The deep-pocketed kingdom, with fiscal reserves of around $500 billion, has reiterated it is an ultra low-cost producer of crude and can withstand low prices for years.

But Riyadh has posted a budget deficit every year since the last oil price rout in 2014. It has borrowed over $100 billion and drawn from its reserves to plug the deficit.

Crown Prince Mohammed bin Salman's multi-billion dollar projects to wean the economy away from oil remain vulnerable, and Saudi Arabia needs a crude price of about $80 a barrel to balance its budget.

As economic challenges rise, the detention of royal princes Ahmed bin Abdulaziz al-Saud and Mohammed bin Nayef has fueled fears of instability.

One source close to the royal court dismissed such concerns and said the detentions were meant to send a stern warning within the royal family not to oppose the crown prince.

Yet "the threat to Prince Mohammed isn't coming from his royal rivals," said Kristin Diwan of the Arab Gulf States Institute in Washington.

"It's from the collapse of oil revenues and with them his ambitious economic plans."

source: news.abs-cbn.com

Global stocks tumble as gold soars on virus pandemic fears

NEW YORK -- Global stocks were hammered Monday and gold prices soared on safe-haven buying as fears mounted that the new coronavirus would derail economic growth.

Equity bourses were a sea of red, including in Italy and South Korea -- two countries outside of China that have suffered outbreaks of the virus in recent days. In the US, the Dow plunged more than 1,000 points in its worst session in more than 2 years.

"The market reaction is a classic 'sell now and ask questions later,'" said Quincy Krosby, chief market strategist for Prudential Financial, who said the selloff reflects fears the virus will dent earnings growth.

Oil prices tumbled on worries about demand, while gold prices on the London Bullion Market spiked to $1,689.31 per-ounce, a level last seen in January 2013, before easing back somewhat as investors sought the precious metal as a safety measure amid the market turbulence.

Investors have been unsettled by the spread of the disease, analysts said.

Italy reported its seventh death from the coronavirus, but officials called for calm and reported the number of infections slowing after a spike over the weekend.

South Korea's K-league postponed the start of the new football season as a leap in cases wrought havoc across its sporting calendar.

Meanwhile, the World Health Organization said the new coronavirus epidemic had "peaked" in China but warned that a surge in cases elsewhere was "deeply concerning" and all countries should prepare for a "potential pandemic."

US President Donald Trump on Twitter said the virus "is very much under control in the USA," adding that "stock markets are starting to look very good to me!"

Trump's comments aimed to encourage bargain-hunting after major US indices ended down more than three percent, with all 11 industrial sectors tumbling.

Earlier, European stock markets were a sea of red, with Frankfurt and Madrid falling by 4 percent, Paris shedding 3.9 percent and London losing 3.3 percent.

"The root of the problem is this: there is burgeoning fear that the shutdown effect that has hit China's economy is going to take over elsewhere, dealing another blow to global growth, and earnings growth prospects," commented Patrick O'Hare at Briefing.com.

Travel and tourism linked firms were particularly vulnerable, with Sydney-listed airline Qantas plunging more than seven percent, and Air China off by nearly six percent in Hong Kong.

An exception was Gilead Sciences, which surged 4.6 percent following upbeat comments from a World Health Organization official about the company's remdesivir, an experimental drug to treat the virus.

KEY FIGURES AROUND 2200 GMT (6 a.m. Tuesday in Manila)

New York - Dow: DOWN 3.6 percent at 27,960.80 (close)

New York - S&P 500: DOWN 3.4 percent at 3,225.89 (close)

New York - Nasdaq: DOWN 3.7 percent at 9,221.28 (close)

Milan - FTSE Mib: DOWN 5.4 percent at 23,427.19 (close)

Madrid - IBEX 35: DOWN 4.1 percent at 9,483.50 (close)

London - FTSE 100: DOWN 3.3 percent at 7,156.83 (close)

Frankfurt - DAX 30: DOWN 4.0 percent at 13,035.24 (close)

Paris - CAC 40: DOWN 3.9 percent at 5,791.87 (close)

EURO STOXX 50: DOWN 4.0 percent at 3,647.98 (close)

Seoul - KOSPI: DOWN 3.9 percent at 2,079.04 (close)

Shanghai - Composite: DOWN 0.3 percent at 3,031.23 (close)

Hong Kong - Hang Seng: DOWN 1.8 percent at 26,820.88 (close)

Tokyo - Nikkei 225: Closed for a public holiday

Brent Crude: DOWN 3.8 percent at $56.30 per barrel

West Texas Intermediate: DOWN 3.7 percent at $51.42 per barrel

Gold: UP at $1,676.50 per ounce from $1,643.41 late on Friday

Euro/dollar: UP at $1.0852 from $1.0847

Pound/dollar: DOWN at $1.2924 from $1.2964

Euro/pound: UP at 83.95 pence from 83.67 pence

Dollar/yen: DOWN at 110.71 from 111.61

Agence France-Presse

World stocks drop, gold surges as coronavirus fears trigger flight for safety

SYDNEY -- Global shares and oil extended losses on Monday while safe-haven gold soared as the spread of the coronavirus outside China accelerated with infections jumping in South Korea, Italy and the Middle East, in a worrying new development in the outbreak.

South Korea put the country on high alert after the number of infections surged to over 600 with six deaths. In Italy, officials said a third person infected with the flu-like virus had died, while the number of cases jumped to above 150 from just three before Friday.

Iran, which announced its first 2 cases on Wednesday, said it had confirmed 43 cases and eight deaths, with most of the infections in the Shi'ite Muslim holy city of Qom. Saudi Arabia, Kuwait, Iraq, Turkey and Afghanistan imposed travel and immigration restrictions on the Islamic Republic.

In a sign of panic, E-minis for the S&P 500 dropped 1 percent in early Asian trades while Nikkei futures slipped more than 1 percent too.

Australia's benchmark index slid 1.6 percent while New Zealand was down about 1 percent. South Korea's KOSPI index fell 2.2 percent.

That left MSCI's broadest index of Asia-Pacific shares outside Japan off 0.7 percent to 541.48, the lowest since Feb. 5. Japanese markets were closed for a public holiday.

"It promises to be an interesting session here in Asia, with the bears back wrestling a bit more of a say here, and gold and bond bulls feeling pretty good about their exposures," said Chris Weston, head of research at broker Pepperstone.

"The news flow from the weekend has changed the game somewhat, where the focus is much more on the threat of an outbreak outside of China."

The virus has killed 2,442 people in China, which has reported 76,936 cases, and slammed the brakes on the world's second largest economy.

It has spread to some 28 other countries and territories, with a death toll of around two dozen, according to a Reuters tally.

Investors fretted over the mounting economic toll from the virus, betting on more monetary policy action from central banks. In response, US Fed fund futures surged signalling more rate cuts later this year.

While markets had largely brushed aside fears of long-term economic damage from the virus, a steady drip of new cases in countries beyond China has kept concerns alive.

On Friday, US stocks were beaten down by concerns about the virus and after data showed American business activity stalled in February, signaling a contraction for the first time since 2016.

US chipmakers fell sharply last week as a flash reading of the IHS Markit services sector Purchasing Managers' Index dropped to its lowest level since October 2013. The manufacturing sector also clocked its lowest reading since August.

The dollar fell for a second straight session on Monday against the yen to be last at 111.48.

The Australian dollar, considered a liquid proxy for China plays, was down 0.4 percent as it languished near an 11-year low.

The euro eased a tad to $1.0836.

That left the dollar index slightly higher at 99.430.

Analysts expect the Korean won to slump against the dollar as one of the favorite risk proxies for investors.

The won has fallen more than 4.5 percent on the dollar so far this year. It was last unchanged at 1,206.87

"Whether this proves to be a driver of more mainstream FX pairs, such as AUDJPY and AUDUSD is yet to be seen, although AUDUSD looks the better short on the weekly chart," Pepperstone's Weston said.

Oil prices slid as investors fretted about crude demand being pinched by the impact of the coronavirus outbreak, while leading producers appeared to be in no rush to curb output.

Brent crude slumped 2.8 percent, or $1.63, to $56.87 a barrel while US crude dropped 2.6 percent, or $1.4, to $51.97 a barrel.

US gold futures climbed 1.2 percent at $1,668.6 an ounce. Spot gold jumped to a seven-year high of 1,678.58 after marking its biggest weekly gain last week since early August.

source: news.abs-cbn.com

World stocks hit record ahead of US-China trade deal

NEW YORK -- Bond yields edged higher while a gauge of global equity markets hit a record high on Monday, lifted by optimism over the planned signing this week of a US-China trade deal and hopes the start of the US corporate earnings season will not disappoint.

Gold prices fell almost 1 percent ahead of the signing at the White House on Wednesday of the Phase 1 trade deal and as a de-escalation in US-Iran tensions in the Middle East reduced bullion's safe-haven appeal.

US and euro zone government bond yields rose as the trade deal marks a major step in ending a dispute that has cut global growth and boosted demand for such safe-haven assets as bonds, gold and currencies like the Japanese yen and Swiss franc.

MSCI's gauge of stocks across the globe gained 0.51 percent, topping a record set on Friday, while emerging market stocks rose 0.96 percent. The benchmark S&P 500 and tech-heavy Nasdaq composite indexes also hit all-time and closing highs on Wall Street.

The United States is planning to lift its designation of China as a currency manipulator, Bloomberg reported, citing people familiar with the matter, a move that added to the positive mood among investors.

Middle East tensions rose after the United States killed a top Iranian general on Jan. 2 in Baghdad, knocking global stocks off a rally spurred in late 2019 on hopes a trade deal would be signed. Markets have rebounded as both Tehran and Washington desisted from further escalation after Iran retaliated for the killing with a missile attack on US troops in Iraq.

Investors are waiting for corporate results that start in earnest this week with large US banks, including Citigroup Inc , JPMorgan Chase & Co and Wells Fargo & Co, due to report on Tuesday. Excluding energy, fourth-quarter earnings growth estimates are 1.9 percent, according to Refinitiv.

"It's put up or shut up time," said Joe Saluzzi, co-manager of trading at Themis Trading in Chatham, New Jersey. "We've priced in a big rally, we expect growth and now it's time to see it. If we have a good earnings season, then it will be great."

Saluzzi said, however, that he would not be surprised if US equities enter a "bit of a correction" despite a strong economic outlook, as they trade at almost 19 times expected earnings in 2020.

"Everything's humming along," he added. "With that said, it doesn't take much to bang down on a market that is fully valued and had quite a run. Let's not kid ourselves."

The Dow Jones Industrial Average rose 83.28 points, or 0.29 percent, to 28,907.05. The S&P 500 gained 22.78 points, or 0.70 percent, to 3,288.13 and the Nasdaq Composite added 95.07 points, or 1.04 percent, to 9,273.93.

Facebook Inc, Microsoft and Apple Inc provided the biggest lift both to the S&P 500 and Nasdaq composite.

The pan-European STOXX 600 index lost 0.18 percent.

Renault SA fell to a six-year low after a media report said Japan's Nissan Motor Co Ltd had accelerated secret contingency planning for a potential split from the French carmaker.

Other European automobile stocks also fell after China's top auto body reiterated predictions that sales were likely to shrink for the third consecutive year in 2020.

US government bond prices fell, with the price of the 10-year Treasury note down 4/32 to push its yield up to 1.8406 percent.

Yields on 10-year German bunds rose to -0.19 percent, while yields on the German two-year government bond hit a nine-month high ahead of the signing of the US-China trade deal.

In currency markets, the offshore Chinese yuan hit a 5-1/2-month high and the yen dropped to a 7-1/2-month low as sentiment rose on the trade outlook.

The dollar index rose 0.03 percent, with the euro up 0.13 percent to $1.1134. The yen weakened 0.44 percent versus the greenback at 109.94 per dollar.

Oil prices fell about 1 percent as Middle East tensions eased and investors turned their focus to lackluster seasonal demand following a bearish US report last week of a large increase in gasoline stocks.

Brent crude settled down 78 cents at $64.20 a barrel, while West Texas Intermediate crude slid 96 cents to settle at $58.08 a barrel.

Gold, considered a safe haven during political and economic turmoil, rose last week to an almost seven-year peak of $1,610.90 an ounce after a US drone strike killed a top Iranian commander in Baghdad and Iran launched missiles against US troops in Iraq in retaliation.

US gold futures settled down 0.6 percent at $1,550.60 an ounce. 

source: news.abs-cbn.com

Gold, oil surge in Asia as US, Iran exchange threats

SYDNEY - Asian share markets looked to be heading into turbulence on Monday as a flare-up of tensions in the Middle East sent gold to its highest in almost 7 years while oil flirted with 4-month peaks.

The United States detected a heightened state of alert by Iran's missile forces, as President Donald Trump warned the US would strike back, "perhaps in a disproportionate manner," if Iran attacked any American person or target.


Iraq's parliament on Sunday recommended all foreign troops be ordered out of the country after the US killing of a top Iranian military commander and an Iraqi militia leader.

Spot gold surged 1.6 percent to $1,575.37 per ounce in jittery trade and reached its highest since April 2013.

Oil prices added to their gains on fears any conflict in the region could disrupt global supplies.

Brent crude futures rose $1.05 to $69.65 a barrel, while US crude climbed 94 cents to $63.99.

"The risk of further escalation has clearly gone up - given the direct attack on Iran, Iran's threat of retaliation and Trump's desire to look tough - posing the threat of higher oil prices," said Shane Oliver, chief economist at AMP Capital.

"Historically though oil prices need to double to pose a severe threat to global growth and we are long way from that."

MSCI's broadest index of Asia-Pacific shares outside Japan was off 0.16 percent though most major indices were yet to open. Futures for Japan's Nikkei pointed to an opening fall of around 500 points.

E-Mini futures for the S&P 500 fell 0.4 percent in very choppy trade.

Sovereign bonds benefited from the safety bid with yields on 10-year Treasuries down at 1.795 percent having fallen 10 basis points on Friday. Treasury futures gained 7 ticks.

In currency markets, the Japanese yen remained the favored safe harbor courtesy of Japan's massive holdings of foreign assets. Investors assume Japanese funds would repatriate their money during a true global crisis, pushing the yen higher.

Early Monday, the dollar had edged down to a 3-month trough of 107.81 yen, and risked a pullback all the way to 107.00. The euro likewise eased to 120.45 yen having hit a 3-week low.

The dollar was steadier against the other majors, with the euro being little changed at $1.1166. Against a basket of currencies, the dollar was holding at 96.852.

source: news.abs-cbn.com

Gold, Treasuries rise as recession, trade fears rattle investors

NEW YORK -- Declining stocks on Wall Street weighed down a global equities gauge on Tuesday on lingering worries about the US-China trade war, while demand for US Treasuries and precious metals rose on recession fears.

The US yield curve inversion deepened to levels not seen since 2007 and gold futures rose as recession concerns gripped investors. Silver touched a two-year high.

Stocks opened higher on Wall Street after US President Donald Trump said China had offered to resume trade talks, though uncertainty prevailed as Beijing declined to confirm Trump's assertion.

US stocks initially opened higher, building on Monday's advance after Trump's comments. China's foreign ministry, however, reiterated on Tuesday that it had not received any recent U.S. telephone calls on trade.

"It is going to be pretty confusing and unfortunately, without some kind of a major backpedaling on trade... the economy is going to suffer," said Jack Ablin, chief investment officer at Cresset Capital Management in Chicago.

Bank shares, which tend to weaken in lower rate and soft economic environments, lost 1 percent on Wall Street.

The Dow Jones Industrial Average fell 120.93 points, or 0.47 percent, to 25,777.9, the S&P 500 lost 9.22 points, or 0.32 percent, to 2,869.16 and the Nasdaq Composite dropped 26.79 points, or 0.34 percent, to 7,826.95.

The pan-European STOXX 600 index rose 0.63 percent and MSCI's gauge of stocks across the globe gained 0.03 percent.

Emerging market stocks rose 0.39 percent. Nikkei futures lost 0.66 percent.

The deepening yield curve inversion reflects investor nervousness about a recession and uncertainties over the trade conflict between China and the United States.

"It's not a sign of confidence in inflation or a pick-up in growth," said Mike Lorizio, head of Treasuries trading at Manulife Asset Management in Boston.

Benchmark 10-year notes last rose 21/32 in price to yield 1.4744 percent, from 1.544 percent late on Monday.

The yield curve inversion also pressured the dollar.

"You have seen a push deeper into inversion in the 2s/10s curve. Today, it's hard to put your finger on one specific driver of that inversion - though that might be contributing to the general sense of risk-off in the market," said Brian Daingerfield, macro strategist at RBS Securities.

The dollar fell against the safe-haven Japanese yen while the euro declined against the greenback.

The dollar index fell 0.05 percent, with the euro down 0.1 percent to $1.1089.

The Japanese yen strengthened 0.35 percent versus the greenback at 105.77 per dollar, while Sterling was last trading at $1.2285, up 0.57 percent on the day.

Emerging market currencies suffered across the globe, with the Colombian peso brushing against its record low near 3,478 per dollar.

Oil prices rose, buoyed by expectations of a drawdown in US crude inventories, though gains were capped by worries about a recession and uncertainty over a China-US trade deal.

US crude rose 3.45 percent to $55.49 per barrel and Brent was last at $59.91, up 2.06 percent on the day.

Spot gold added 1.1 percent to $1,542.70 an ounce. Spot silver gained 3.14 percent to $18.18 an ounce after touching its highest since September 2017.

source: news.abs-cbn.com

World stocks slip on US-China trade concerns, bonds fall

NEW YORK -- A gauge of world equity markets slid and the dollar traded near break-even on Wednesday over growing concerns about the latest US-China trade talks and as the United States moved closer to raising tariffs on $200 billion worth of Chinese imports.

Gold prices slipped as safe-haven demand eased after the White House said it had received an indication from China that it wanted a deal.

But the White House had nothing else to say and US President Donald Trump said he would be happy to keep tariffs on Chinese imports in place.

The United States will raise tariffs to 25 percent from 10 percent on $200 billion worth of Chinese imports on Friday, according to its official journal. China said it would retaliate and the US benchmark index closed the session lower.

"It's consistent with people being unsure about what's actually going to come out of Washington this week," said Keith Lerner, chief market strategist at SunTrust Advisory Services in Atlanta.

Reuters earlier quoted US government and private-sector sources as saying China had backtracked on almost all aspects of a draft trade agreement.

Trade delegations from Washington and Beijing are scheduled to begin their latest round of talks on Thursday.

Stocks on Wall Street initially rebounded, as did major indices in Europe, on the White House announcement. But MSCI's gauge of equity performance in 47 countries closed down 0.22 percent.

Earlier in Asia, shares outside Japan closed 0.94 percent lower and Japan's Nikkei index lost 1.46 percent.

Two weeks ago, the market had viewed resolution of the trade talks as a foregone conclusion, and with it back on the table, volatility has picked up, said Yousef Abbasi, global market strategist at INTL FCStone Financial Inc in New York.

"People put on risk since late December and now they're having to grapple with uncertainty on a topic they were almost certain about two weeks ago," Abbasi said. "It puts you in a precarious position."

The Dow Jones Industrial Average rose 2.24 points, or 0.01 percent, to 25,967.33. The S&P 500 lost 4.63 points, or 0.16 percent, to 2,879.42 and the Nasdaq Composite dropped 20.44 points, or 0.26 percent, to 7,943.32.

Bond prices fell, with the benchmark 10-year U.S. Treasury note slipping 12/32 in price to push up its yield to 2.4907 percent.

Portuguese, Irish and Spanish yields hit historic lows and Portugal saw firm demand at an auction, but Italian yields rose on concerns over tension within Rome's ruling coalition.

Portuguese 10-year bond yields fell to a record low of 1.07 percent and Spain's 10-year bond yield fell to a more than two-year low of 0.94 percent. Irish long-dated bond yields dropped below 0.5 percent for the first time since December 2017.

The dollar index was flat, with the euro down 0.01 percent to $1.1189. The Japanese yen strengthened 0.11 percent versus the greenback at 110.14 per dollar.

West Texas Intermediate oil futures rose more than 1 percent, boosted by a surprise drawdown in US crude stockpiles.

US crude inventories fell by 4 million barrels in the week to May 3, the Energy Information Administration said. Analysts had expected an increase of 1.2 million barrels.

Brent crude futures settled up 49 cents at $70.37 a barrel. US WTI crude futures rose 72 cents to settle at $62.12 a barrel.

US gold futures settled down 0.3 percent at $1,281.40. Earlier they had touched $1,292.80. 

source: news.abs-cbn.com

After Margielyn Didal gold, Cebu mayor vows to build skate park in city

Now that Margielyn Arda Didal has won a gold medal in the 2018 Asian Games, she no longer has to worry about being chased by the police while skateboarding in the streets of Cebu City.

Cebu City Mayor Tomas Osmeña promised to build a skating park for aspiring athletes to follow in Didal's footsteps.


In a Facebook post, Osmeña congratulated the 19-year-old Cebuana for her performance in the Games.

“Margielyn Didal of Lahug just won Gold in the (20)18 Asian Games in Indonesia. She also represented Cebu in the UK last May where she was the only competitor from Asia. Congratulations Margielyn!” he said. 

“Because the awareness raised by people like you, Cebu City will be building a skate park in the SRP. My sister is personally donating P5M to your cause.”

Didal previously lamented that most skateboarders have been subjected to discrimination, as they are considered a nuisance when they skate along the roads or sidewalks.

“Nag-ii-skate kami sa Cebu sa streets lang,” she said in an interview with ABS-CBN’s Dyan Castillejo. “Hinahabol kami ng pulis ng security ‘pag may nakikitang nagiiskate.”

“Minsan 'pag nasa mall pag may hawak na skate board bawal nang pumasok.” 

Osmeña said Didal will no longer worry about such things. In fact, he even invited her to help design the proposed skate park.

“As the expert, your input is of course welcome on the park’s design. Soon, people like you will finally have a place that is safe, free from traffic, and able to call your own,” he said.

Didal’s golden performance in the Games’ women’s street skate event netted her a total of windfall of P6 million in incentives from the government and private patrons.

The 19-year-old will use the bonus to make sure that parents won’t have to scrounge for money again.
“First of all gagamitin para sa family po,” said Didal. “Baka magtayo ng negosyo para sa family din. Para hindi na kelangang magwork ng mama at papa ko.”

Didal is the fourth among 5 children. Her father works as a carpenter while her mother sells street food in Lahug.

She left school after finishing Grade 7 to go through extensive training overseas. Didal had to sacrifice her studies to able to provide financial support to her family. 

source: news.abs-cbn.com

Hidilyn Diaz wins PH's first gold

The Philippines' Hidilyn Diaz Philippines competes at the 2018 Asian Games Women's Weightlifting, 53kg Division, in Jakarta, Indonesia on Tuesday. 

The Olympic silver medalist went on to win the first gold for the country in the Asian Games. 

source: news.abs-cbn.com

'Virtual gold' may glitter, but mining it can be really dirty

As the poster child for the growing ranks of computer-generated currencies, bitcoin's recent stratospheric price rises have propelled it from the chat forum-hosted depths of nerddom into the global consciousness.

As it rose from under $1,000 to over $19,500 at one point this year, hordes of tech-savvy punters have rushed in to buy, while any investors can now do the same on the US futures markets.

Bitcoin has been called virtual gold, in part because it is created in a process that insiders call mining. And like real mining, it can be dirty.

That's because joining the online gold rush to mine the coins that are streams of computer code requires high-powered rigs that consume considerable amounts of electricity to do the virtual equivalent of blasting through rock by solving a string of highly complex computer algorithms.

Depending on how the electricity used for mining is generated, the virtual currency can have a very real impact by adding pollutants into the air and contributing to global warming.

Out of the bedroom

What barely five years ago was a hobby for "bedroom miners" has mushroomed into a massive, but unregulated, industry that some observers fear is a bubble waiting to explode, potentially causing damage similar to the sub-prime mortgages fiasco that caused the global economic crisis a decade ago.

Mining involves "adding value by dedicating computational resources to verify transactions in a huge public ledger called a 'blockchain'," explained Julian Oliver, a New Zealander who uses wind power to mine ZCash -- a bitcoin cousin.

The miners are thus providing the computer resources for their currency's trading system to operate.

But the number-crunching to pocket coins requires ever more powerful hardware and the means to keep them running, Oliver told AFP.

"At current bitcoin prices things are looking good for miners," he said. "But it's a huge use of energy, whatever the profit margins (and is) not remotely sustainable."

Specialist studies estimate the total annual energy output of the hundreds of thousands of dedicated mining machines worldwide at 35 terawatt hours, according to the Digiconomist website -- some 25 percent up on last year.

That puts it on the level of energy consumption of Denmark.

Each transaction consumes roughly 100 kWh -- the equivalent of running a lightbulb for three months. By contrast, a credit card transaction uses about 0.2 kWh.

But focusing on the electricity consumption of cryptocurrency mining "ought not to overshadow pre-existing environmental costs of the traditional financial system," said Oliver, as "cash needs to be printed and transported and banks run off the back of data centres."

Cleaning up 

Nadine Damblon, chief executive of HydroMiner, which uses hydroelectric power to mine in the Austrian Alps, said there is a need for greater use of renewables in the industry as Asian miners often rely on coal-generated electricity.

Hydroelectric can play a leading role as "one of the most environmentally friendly ways to generate power," she said.

Damblon believes the market will help solve the problem.

"I think in the case of bitcoin mining the capital will flow into more efficient hardware that will need less energy," said Damblon.

The scale of the long-term environmental threat that mining poses is unclear, as is the degree to which it could act as a catalyst for greater take-up of renewables.

In its Global Cryptocurrency Benchmarking Study, the Cambridge Centre of Alternative Finance found that nearly three-quarters of all major mining zones are in China and the United States.

But the likes of Iceland and Austria are gaining ground. Not only do they offer clean hydroelectric power, but also cold temperatures that help save on cooling computer equipment, which can account for up to a third of energy needs.

What is undeniable, said the report, is that "the mining sector has evolved in a short time from a hobby activity performed on personal computers into a professional and capital-intensive industry with its own value chain."

As for how many bitcoin mines or miners there are now, nobody really knows.

Green vs anarchist 

In terms of large-scale mines "there are perhaps about a hundred," said French information technology specialist Marc Bevand.

"Maybe (there are) a few thousand smaller ones" using "one or two racks" of machines rather than the tens of thousands in the largest Asian mines, San Francisco-based Bevand told AFP.

The push for scale to save on energy costs and go green also risks pushing bitcoin against its libertarian, or even anarchist, founding philosophy.

Bitcoin was created to not only allow secure and anonymous transactions, but for the system to be controlled by users and not by a government or corporation.

The push for scale "would concentrate number-crunching power in the hands of the richest or throw into question bitcoin's (decentralised) philosophy," said Teunis Brosens, a senior economist with ING bank.

He forecasts that eventually "banks will create private blockchains which will not face the problems of scale or regulation" which bitcoin is coming up against.

source: news.abs-cbn.com

India gold recycling plan fails to tempt households

MUMBAI - India's ambitious plan to recycle thousands of tonnes of gold lying idle in temples and households looks to have foundered on concerns over high costs and slight returns, in a blow to government hopes of cutting imports of the metal.

After 16 months, temples and households have turned over just seven tonnes of gold out of the 24,000 tonnes believed to be in private hands, two industry sources and a government official said, with almost all the gold coming from temples.

Families that hold about 80 percent of the idle gold have largely shunned the scheme, with some four dozen government-approved centers that opened to test purity still to process a single gram of household gold, said Harshad Ajmera, president of the Indian Association of Hallmarking Centers.

"You hardly earn anything but you have to do so many things to deposit gold under the scheme. Why should I take all this pain?" said 54-year-old clerk Ganpat Shelke, who considered depositing 50 grams of gold.

The struggling scheme was launched with much fanfare by Prime Minister Narendra Modi in November 2015, with India seeking ways to stem the spending of billions of dollars on a non-essential commodity that accounted for 27 percent of its trade deficit in the year to March, 2016.

The country is the world's second-biggest gold importer behind China, buying about 800 tonnes a year for wedding gifts, religious donations and as an investment.

The plan was for holders of idle gold to lodge it with banks in return for interest and cash at redemption. The government would melt the gold and auction or rent it to jewelers, reducing the need for imports.

But the scheme logistics mean the owners of the gold must shoulder the cost of testing its purity and melting it down, while the interest rate on offer of just 2.5 percent compares with 7-8 percent that banks offer for cash deposit rates.

"If a consumer wants to have 25 grams jewelry converted the cost of converting and purity testing takes 3-4 percent of total value away," said Shekhar Bhandari, executive vice-president of Kotak Mahindra Bank.

RELUCTANT BANKS

Even when holders of the precious metal want to take part in the scheme they have run into hurdles.

"I visited four banks several times to deposit gold but they could not accept it," said Kushal Chatterjee, a businessmen from the eastern city of Kolkata. "They said they did not know the process."

At least five bank branches visited by Reuters this week in Mumbai said they could not accept gold under the scheme as they had not been given directions by their head offices.

A senior official with the Indian Banks' Association said the current scheme offered banks little or no profit.

"There should be an incentive for banks," said the official, who declined to be named when commenting on a sensitive issue.

Banks are also concerned that provisions allowing gold to be deposited for up to 15 years will raise currency and liquidity risks, the India Gold Policy Center in a recent report.

A finance ministry spokesperson declined to comment on the gold program.

Gold refiners, who more than doubled capacity in recent years in anticipation of higher scrap supplies, are operating at well below capacity, said James Jose, secretary of the Association of Gold Refineries and Mints.

"Except for the banks, all other stakeholders like purity centers, refiners are ready, but they are helpless without banks' participation," he said.

The India Bullion and Jewelers Association urged the government to revisit the scheme, clearing doubts for consumers and putting pressure on banks to participate.

"Otherwise Indian imports will not fall," said Association secretary Surendra Mehta.

(Reporting by Rajendra Jadhav; Editing by Richard Pullin)

source: news.abs-cbn.com

This debit card comes in 14k gold

MANILA – Why pay in plastic when you can settle your bills in gold – literally?

This is one the main come-ons of the Aurae Lifestyle Membership Program, whose members receive the Aurae Solid Gold MasterCard, which is made from 14k and 18k gold.

For Aurae Lifestyle CMO Terrence Thomas, this fully functional debit card is indeed a statement item. “Everything that we do is bespoke. It’s customized and it’s personal,” he told ABS-CBN News in an interview.

Thomas was in town for the Asian Poker Tour, whose Players’ Party was sponsored by Aurae and held at Resorts World Manila over the weekend.

According to a company statement distributed by PR Newswire, it developed a patented process that facilitates jewelling and engraving custom designs onto each card, allowing “each member to have their legacy and success elegantly expressed in a unique way to share their passions and tell their story.”

Aurae conducts a design consultation to create a one of a kind card for each member, which can have up to 164 embedded precious stones. The member's name and signature are engraved into each card “to symbolize the lasting impact of their legacy.”

“We help design a card based on what’s meaningful to them,” explained Thomas, citing a member who is an aviation enthusiast and whose card sports a cockpit design.

“It’s amazing, the detail of the cockpit. But it’s what’s important to him and he is very proud of that,” Thomas said. “When they do mundane tasks like buy dinner, it reminds them of what’s important to them, who they are, what their core values are. We connect the payment with the lifestyle.”

Members also receive their card presented in a hand-crafted heirloom marquetry box that is accompanied by a certificate of authenticity and an elegantly designed hand-stitched leather wallet with a unique central pocket for the card. The card is also insured by Lloyd's of London, allowing for ease of replacement in the event of loss or theft.

Concierge services
But more than a debit card, Aurae Lifestyle is really about belonging to an elite club as membership at the moment is by invitation only.

Apart from the card, members get to enjoy personal concierge services and exclusive access to VIP events worldwide.

“We help provide a level of service to our clients to make their life better and easier and more meaningful. At the end of the day, we want people to experience life at its fullest. Whether it’s a payment vehicle, whether it’s a lifestyle vehicle, whether it’s a legacy kind of story – those are all important things that help our clients,” Thomas said.

To illustrate, Walker Posey of The Augusta Management Group cited Aurae’s experience at the recent US Masters.

“We were able to have several clients have very unique experiences where we actually brought in PGA tour players to have dinners and lunches. We were able to give behind the scenes and make sure they are at the right spot and just being able to enjoy that experience at a different level that you typically wouldn’t if you would just show up and have a ticket. We try to do that along in any event that’s meaningful to our clients,” he said.
And this is what differentiates Aurae from other premium credit
cards, Thomas stressed.

“Other concierge services were kind of canned. They were just kind of a concierge services in name but when it came to delivering high-end experiences, they couldn’t deliver,” he said.

“So that is kind of how we created and tailored our lifestyle programs around - helping our clients have experiences that typically couldn’t be available to the general public. That involves relationships. I think it really just comes down to us having the ability to have the relationship with the right people.”

Manila center?

Meanwhile, Thomas also revealed that the company is considering setting up a concierge center in Manila to service clients in the region.

As for prospective Filipino members, he noted that one advantage of owning an Aurae card is that it allows easy access to their money when traveling abroad.

“You go to the bank, you only get X number. For the high-end consumer, it’s very helpful to access their money on the road without any friction,” Thomas said.

source: www.abs-cbnnews.com

Nickel miner TVI defers PSE until Feb. 29

MANILA - Nickel miner TVI Resource Development (Phils.) Inc. (TVIRD) has deferred a planned listing on the Philippine Stock Exchange to Feb. 29 next year, subject to market conditions and regulatory approvals, shareholder TVI Pacific Inc. of Canada said.

Delays in regulatory approvals, which TVI said was partly due to local public holidays, had prompted it to postpone the initial public offering.

The miner was previously looking at a Dec. 18 listing after a 1 billion peso ($21 million) IPO intended to fund a gold and silver mining project.

"TVI remains optimistic about the prospects for the IPO in early 2016 given TVIRD's diverse pipeline of projects and the strong support of its majority shareholder, Prime Resource Holdings Inc.," Clifford James, chairman and CEO of TVI and chairman of TVIRD, said in a statement.

TVIRD has filed an updated IPO prospectus and is still looking to sell up to 272.02 million primary shares and up to 136.01 million shares currently held by existing shareholders, at a price of up to 3.71 pesos per share.

"We believe the establishment of a public market for TVIRD shares will allow North American investors to better evaluate the value of TVI's 30.66 percent indirect interest and provide us with a potential source of non-dilutive funding," James said.

After market volatility took its toll on local listings this year, the country's bourse expects a busy year ahead with Philippine companies likely to raise as much as 200 billion pesos in fresh equity capital via share sales.

source: www.abs-cbnnews.com

Apex makes financial turnaround

MANILA - Listed mining firm Apex Mining Co. Inc. reported a consolidated net income of P81.7 million in the first half, reversing the net loss of P279 million in the same period last year amid declining metal prices.

The turnaround was due to higher revenues owing to higher gold and silver output. First semester revenues surged to P1.17 billion from only P685.35 million a year ago.

However, in the second quarter alone, the company incurred a net loss of P18.56 million, lower than the P135.53 million net loss incurred in the April to June 2014 period. Revenues increased to P511.36 million from P422.18 million.

“While average metal prices were lower at $1,215 per ounce gold and $17 per ounce silver this year, increased production output to 20,334 ounces gold and 107,036 ounces silver more than compensated for the unfavorable downtrend in metal prices,” Apex Mining said in its quarterly report.

During the first half, Apex Mining focused on development activities for the Maco mine in Compostela Valley to improve the mine’s operating capability.

The company secured a P2.25 billion loan from BDO to procure the necessary capital equipment to push forward mine development activities, said Walter W. Brown, president and CEO of Apex Mining.

The loan proceeds would help the company achieve its goal of milling at the rate of least 1,500 tons per day this year.

“Hopefully by the fourth quarter, we would be reaching this important milestone in our thrust to elevate the Maco mine’s operating capability to deliver 4,000 ounces of gold a month,” Brown said.

Last June, Apex Mining acquired 98 percent of Itogon-Suyoc Resources Inc. for P182.7 million.

Apex Mining has infused P238 million in new equity in Itogon-Suyoc to pay down its debt and to reopen its Sangilo mine.

“We should be producing at 75 tons a day from this mine by yearend, and at 200 tons a day by next year. This will further boost the company’s production output and provide additional buffer to counter the declining trend in metal prices,” Brown said.

Apex has set aside P1.9 billion in capital expenditures this year, of which P690.2 million has already been spent.

Read more on Philippine Star. 

source: www.abs-cbnnews.com

Fast jewelry? China's biggest jeweler eyes mass market

HONG KONG - The world's most valuable jewelry retailer Chow Tai Fook, which counts Cartier and Tiffany & Co as competitors, is on a quest to conquer the hearts of China's future big spenders. Its weapons of choice: Hello Kitty and Winnie the Pooh.

Superman and the Angry Birds team also feature in Chow Tai Fook Jewellery Group's range of fashionable, and affordable, pieces which the company hopes will win over the millions of Chinese who live outside major cities but who are reaping the benefits of a rapidly growing economy and who remain enamored by the gleam of gold.

"We are quite similar to the fast fashion way of business in that our products are only available for a limited period of time," Kent Wong, managing director of Chow Tai Fook, told Reuters.

"The stock-keeping units will have to respond promptly to the fast-changing tastes of customers, especially young customers, who can share information about trends very quickly on their smartphones," he added.

China, the world's second largest economy, is on track to overtake India as the world's biggest consumer of gold this year as falling prices encourage purchases for both personal use and investment.

Combine that penchant for gold with a population that is rapidly urbanizing, and becoming more affluent and trend-conscious in the process, and building customer loyalty as well as keeping up with fashion becomes key to the prospects of jewelry retailers.

About 100 million people are likely to move into cities over the next 17 years, according to ratings agency Moody's. China is already the second largest market for Zara-brand owner Inditex , the world's biggest fashion retailer.

"Just like fast fashion, fast jewelery is the right stuff to target at the youth and the products can also sell at a better margin when they are limited edition," said Renee Tai, a Hong-Kong based analyst at brokerage UOB-Kay Hian.

GOLD FOR THE MASSES

Chow Tai Fook's fashion jewelry, which costs between HK$200 and HK$2,000 ($26 and $260), is a far cry from the luxury offerings that have traditionally accounted for over 80 percent of sales, and which on average cost about 10 times as much.

But the shift to expand mass-market retail is already paying off. Chow Tai Fook saw its net profit rise by a forecast-beating 92.3 percent in the six months ended September, with same-store sales growing 33.2 percent.

Chow Tai Fook, which has a market value of nearly $16 billion, is not alone in targeting the masses.

Smaller rival Luk Fook Holdings International, with a market value of $2.4 billion, is looking at opening stores in busy railway stations to expand its reach in China and raise its profile in less developed cities and the vast hinterland.

Building brand loyalty also makes good business sense.

Repeat purchases by Chow Tai Fook's Hong Kong members contributed almost 17 percent to total revenue in Hong Kong and Macau for the six months ended September, while those from its China members made up nearly one-quarter of total sales in the mainland, company data shows.

"We are seeing a significant surge in retailers investing in loyalty programs in order to increase consumers' loyalty as it's getting harder and harder for retailers to drive growth by purely relying on their quick pace of expansion," said Brian Negley, vice president of consumer research firm Nielsen China.

IMAGE CONSCIOUS

But as it pushes into rapidly changing jewelry, Chow Tai Fook faces the challenge of retaining its reputation for exclusive, luxury items while also appealing to the masses.

The company, founded in 1929, aims to achieve this by selling some of its fast jewelry products online, where most customers are aged between 20 and 35.

Chow Tai Fook also maintains three distinct store layouts that cater to its clients - the high-end luxury consumers, the youth and the mass market, managing director Wong said.

Analysts say focusing on the younger generation is key.

"The company has to ensure this group of people gets familiar with the brand and they won't feel your products are out of date," said UOB-Kay Hian analyst Tai.

"They have to groom a new group of customers to support the brand and products."

source: www.abs-cbnnews.com

Money doesn't grow on trees but gold just might: study

PARIS - Researchers said Tuesday they had found a surprising marker for deep-buried gold: miniscule traces in the leaves of Eucalyptus trees growing over veins of the yellow metal.

The unusual finding may prove a boon for prospectors in a time of dwindling gold reserves and skyrocketing prices, with new discoveries down 45 percent in the past decade, according to a study in the journal Nature Communications.

"This link between... vegetation growth and buried gold deposits could prove instrumental in developing new technologies for mineral exploration," said a press summary.

Eucalyptus trees can send their roots deep into the ground in search of water in dry areas, even breaking into gold-rich zones where they absorb microscopic metal particles as they drink.

A team of scientists from Australia said they have now shown that gold can be absorbed by the roots and travel through the tree, all the way to its leaves, though in negligible concentrations.

According to the World Gold Council, more than 174,000 tonnes of gold have been extracted from Earth since the beginning of civilisation.

In 2011, the US Geological Survey estimated there were 51,000 tonnes of gold left in reserve in the world.

The price of the precious metal skyrocketed 482 percent between December 2000 and March this year. Sixty percent becomes jewellery, but gold is also a crucial component in electronics and is used in medical technology, including for cancer treatment.

For the study, the team investigated Eucalyptus trees growing at two gold prospecting sites in south and west Australia, using X-ray imaging to check for gold in the leaves, twigs, bark, litter and soil.

Eucalyptus trees, some of which can grow taller than 10 metres (33 feet) have an unusually deep and extensive root system -- some have been documented at a depth of 40 metres.

The concentrations were weak -- several hundredths to thousandths of a gram per tonne, but highest in the leaves, the researchers found.

"Gold is probably toxic to plants and is moved to its extremities (such as leaves)," they said.

Minute traces of gold have sometimes been found on plants, but it had never been clear whether these had been absorbed or blown there by the wind.

The new finding "promotes confidence in an emerging technique that may lead to future exploration success and maintain continuity of supply" of gold, wrote the study authors.

source: www.abs-cbnnews.com