Asian shares tread cautiously, crude oil slips

TOKYO - Asian shares edged slightly lower in early Asian trade on Tuesday, as a downturn in crude oil curbed the enthusiasm from fresh record highs on Wall Street.

MSCI's broadest index of Asia-Pacific shares outside Japan inched down 0.1 percent, though it was still within sight of a nine-month high touched last week. The Dow Jones industrial average and the S&P 500 both logged fresh record highs.

Japan's Nikkei stock index gained 0.6 percent, as markets reopened after a Japanese public holiday on Monday and caught up to a weaker yen.

A failed coup in Turkey had dented risk sentiment and bolstered the perceived safe-haven yen before it ran its course. On Monday, Turkey purged its police force after rounding up thousands of soldiers and called for the United States to hand over a cleric that the Turkish government accuses of being behind the takeover attempt.

Improved risk sentiment helped the dollar climb to three-week highs against the yen. It was last down slightly on the day at 106.13 yen, after rising as high as 106.33 earlier in the session, its highest since June 24.

The euro edged down 0.1 percent against the dollar to
$1.1069.

The European Central Bank will hold a regular policy meeting on Thursday, its last one before an eight-week summer break. It is not expected to take any additional easing steps.

Instead, ECB President Mario Draghi is likely to appeal to governments to do more to bolster the euro zone economy in the wake of Britain's vote last month to exit the European Union.

"We expect the ECB to steer clear from any policy action," strategists at Rabobank said.

"Gauging the Brexit impact will require more time and the September meeting would appear a more logical candidate," they said, adding that questions in the post-meeting news conference are likely to focus on what options the ECB still has to ease or extend its current monetary policy.

The dollar index, which gauges the greenback against a basket of currencies, was slightly higher at 96.571.

Pressure remained on crude oil prices after they settled down more than 1 percent on Monday after rising stockpiles of crude and refined fuel intensified fears of another major supply glut. O/R
Brent crude LCOc1 was slightly lower in early trading at $46.95 a barrel, after shedding 1.4 percent on Monday. U.S. crude CLc1 was down 0.1 percent at $45.20, after dropping 1.6 percent overnight.

Spot gold was slightly down at $1,328.50 an ounce, after dropping as much as 1 percent on Monday.

source: www.abs-cbnnews.com

Japan's Orix scouting for asset management buys overseas

TOKYO - Japan's Orix Corp is scouting for acquisitions to achieve a goal of doubling its $260 billion asset management business and is looking overseas for targets after missing the boat at home, its chief executive said.

Orix, with a diverse portfolio of businesses, including a bank, an insurer and a professional baseball team, made a big bet on asset management in 2013, when it bought investment manager Robeco from Dutch cooperative lender Rabobank for about 1.9 billion euros. It is now seeking to scale up.

"Robeco alone is small. We expect a shakeout in the industry and we need to have scale," Orix CEO Makoto Inoue said in an interview. "We have to build the business through mergers and acquisitions."

Robeco had 246 billion euros ($261 billion) in assets under management as of December. Inoue said he wants to double that, but did not give a time frame.

Acquisitive Orix's growth push comes even though, according to Inoue, investors are clamouring for shareholder returns to be boosted through means such as stock buybacks.

The focus was on targets overseas, as the company missed chances to bulk up at home, he said.

"Until around two years ago, there were sales (of asset management businesses) as non-core assets in Japan. But since GPIF, asset management has become everyone's core business," the CEO said.

Inoue was referring to Japan's giant public pension fund and its strategic shift targeting a bigger allocation to riskier assets, which is being viewed as a potential business opportunity for the industry to attract pension money.

Orix is also eyeing the emerging middle class in Asian countries such as Indonesia, Philippines and Malaysia as future clients and is studying plans to set up an asset management company from scratch in Southeast Asia, he said.

Begun in 1964 as a leasing company, Orix has grown to become a financial conglomerate with 11 trillion yen ($92 billion) in assets.

Inoue, 62, who became CEO last year, said he faces growing calls by some investors for higher shareholder returns lately, but he does not subscribe to a view that companies should be measured against a uniform set of figures for shareholder returns.

"We are still in the stage where we can invest in new businesses and enhance profitability. When it runs its course, we will spend money on share buyback and other things, but we are not there yet," he said.

"Most of our 2 trillion yen equity capital is already tied up with businesses, we are not hoarding up free capital."

source: www.abs-cbnnews.com