European stocks dip, oil prices rise

LONDON — European stocks slid Monday as a positive lead from Asia on Chinese stimulus measures petered out, while oil prices continued their march higher.

Equities trading in the United States was closed for a public holiday.

"European markets have struggled for gains today in the absence of the US, as the initial boost of a China stimulus inspired rally from Asia markets has started to fade, even though basic resources have outperformed," said market analyst Michael Hewson at CMC Markets.

Data showing a jump in new home sales in China brightened sentiment in Asian trading as a sign that recent government measures to boost the struggling property sector were helping.

Investors are hoping for still more measures to stimulate the world's second largest economy after a number of announcements last week, including reducing mortgage down payments and tax incentives.

"While these individual easing measures may not appear substantial, their collective implementation clearly signals policymakers' intentions to stabilize the property market, spur economic growth, and boost overall sentiment," said SPI Asset Management's Stephen Innes.

"Further targeted measures are anticipated to be incrementally introduced until policymakers are content with the achieved results."

However, observers say that traders are yearning for the government to unveil a big-bang stimulus similar to the $550 billion seen in 2008 during the global financial crisis.

News that battered developer Country Garden had won approval from creditors to extend a deadline for a key bond repayment, narrowly avoiding a potential default, provided some much-needed relief from worries over China's property sector.

Meanwhile, oil prices pushed to or near to their highest levels this year on the prospect that Saudi Arabia and Russia will extend their production caps.

"The continued risk of a tighter market is helping to drive markets higher, raising the prospect that if Chinese demand does pick up in the second half of the year, prices could jump through $90 a barrel thus posing further upside risk to sticky inflation," said Hewson.

The main international contract, Brent crude, briefly hit $89 per barrel.

"That there is still plenty of momentum so close to $90 a barrel may suggest we could see a strong push to break above which would represent a big shift in the market dynamic in quite a short period of time," said Craig Erlam at OANDA trading platform.

Agence France-Presse

Global stock markets mixed as rally fades

NEW YORK -- Stock markets diverged Wednesday as a global rally faded, despite more data that soothed fears of a further rise in US interest rates.

Wall Street closed higher as private sector hiring data came in softer than expected, while second quarter GDP growth was revised down to 2.1 percent on an annual measure.

The latest figures and other weaker numbers revealed on Tuesday "appear to be adding weight" to the idea of a pause in rate hikes by the US Federal Reserve next month, said CMC Markets UK analyst Michael Hewson.

This adds to "further downward pressure on yields," he said. Lower yields on bonds tend to boost stocks as they signify lower borrowing costs for companies.

Fed chief Jerome Powell said last week the US central bank stands ready to hike interest rates further, having already pushed them to a 22-year high to tame prices, if data shows the US economy continues to grow strongly and price pressures persist.

But the Fed's data-dependent approach is also seen as keeping the possibility open that interest rates may not go any higher if the world's largest economy cools.

That set off strong gains at the beginning of the week, particularly after Tuesday's report on US job openings, which was softer than anticipated. Analysts said it would give monetary policymakers room to hold off on lifting borrowing costs again.

"Signs of America's cooling economy have raised hopes that the pause button will be pushed on punishing interest rate hikes," noted Susannah Streeter, head of money and markets at Hargreaves Lansdown.

But with stocks having posted solid gains in recent days, the rally may be running out of steam.

"We suspect traders might be showing some hesitation, thinking that this heady action can't persist or, at least, opting to wait and see if it does," said analyst Patrick O'Hare at Briefing.com.

On Wednesday, the Dow closed 0.1 percent higher while the S&P 500 rose 0.4 percent.

Investors may also be showing caution as more data is due later this week, including the Fed's preferred gauge of inflation -- the personal consumption expenditures price index -- as well as US government payrolls data.

"Today's data was never likely to be overly impactful with tomorrow's inflation, income, and spending figures, prior to Friday's payrolls, always the primary focus," said analyst Craig Erlam of OANDA.

"That could well set the tone for September ahead of some major central bank meetings," he added in a note.

In Europe, London stocks rose while Frankfurt and Paris fell. Tokyo closed higher, but Shanghai and Hong Kong flattened.

Focus was also on China after a report said its biggest state-backed banks would slash rates on mortgages and deposits as part of a drive to support the country's beleaguered property sector.

And after Asian markets closed, China's embattled real estate giant Country Garden reported losses of approximately $6.7 billion for the first half of this year while warning of possible default.

The company's cash flow problems have ignited fears that it could collapse and spread turbulence through China's economy and financial system.

Agence France-Presse

Global dividends hit record $568 bn in second quarter

PARIS, France -- Dividends paid by the world's biggest listed companies soared to a record $568.1 billion in the second quarter, with payouts to shareholders expected to grow further despite economic uncertainty, a study showed Wednesday.

Payments by the 1,200 biggest public companies rose more than expected, increasing by 4.9 percent compared to the same April-to-June period last year, according to the report by asset management firm Janus Henderson.

Banks accounted for half of the world's dividend growth as their margins were boosted by interest rate hikes, the report said.

Automakers represented one-seventh of the increase.

Firms in Europe, excluding Britain, led the pack with payouts rising by 9.7 percent to $184.5 billion. North American companies paid out $165.3 billion, a 4.2 percent increase.

Swiss food giant Nestle was the world's biggest dividend payer, followed by British bank HSBC and German automaker Mercedes-Benz.

Ben Lofthouse, head of global equity income at Janus Henderson, said global economic growth is "moderating" as interest rates increase.

"Markets now expect global profits to be flat this year, after soaring to record highs in 2022, and when we speak to companies around the world, they are now more cautious about the outlook," Lofthouse said.

Central banks have hiked rates as they battle high inflation. Lenders have responded by increasing their own rates, boosting their profits.

While a weaker economy is usually bad for banks, their rising margins are driving dividend payouts, Lofthouse said.

However, he added, "we do expect dividend growth to continue."

Agence France-Presse

Global markets: Asian shares inch up, caution prevails ahead of Jackson Hole

HONG KONG - Asian shares were set for their best week since February on Friday as Chinese markets cheered a burst of central bank liquidity although broader enthusiasm was capped ahead of what could be a pivotal speech by the U.S. central bank chief.

U.S. stock futures were up 0.2% in Asian hours, suggesting some optimism after sentiment on Thursday was dented by a deadly attack in Afghanistan, and after the Federal Reserve's more hawkish policymakers urged an end to stimulus.

MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.17%, up 3.78% on the week, which would be its best week since February, while Japan's Nikkei shed 0.46%.

Chinese blue chips rose 0.45%, a reversal of recent weeks in which mainland stocks have weighed on the region, as investors took comfort in the central bank's biggest weekly cash injection into the banking system since February. Hong Kong's benchmark rose 0.15%.

Recent regulatory crackdowns have roiled sectors from property to tech and wiped half a trillion dollars from China's markets in last week alone.

"A-shares (onshore Chinese shares) and Hong Kong are taking a break after some pretty extreme movements in the last two weeks," said Qi Wang, CEO of MegaTrust Investment (HK).

"Investors are grappling with the regulatory risk versus still strong earnings."

ZhongAn Online P & C Insurance Co Ltd rose 6.3% after posting strong results, for example.

Australian and Korean benchmarks traded either side of flat.

In early European trade, the pan-region Euro Stoxx 50 futures were down 0.06%, but FTSE futures rose 0.08%. But the main focus of the day is still to come.

Fed Chair Jerome Powell is set to speak at 1400 GMT in the Kansas City Fed's central banking conference, an event normally held in Jackson Hole, Wyoming, which has been used by the bank in the past to provide guidance on future policy.

Analysts at RBC said in a note that while much of the summer had been spent waiting for the event, there was "skepticism that the Fed will provide more specific information around a timetable...amidst a rise in Delta variant COVID cases."

Ahead of the speech, public remarks by the Fed's more hawkish speakers on Thursday urging the central bank to begin paring bond purchases weighed on Wall Street, which closed slightly lower, ending a streak of all-time closing highs.

The Dow Jones Industrial Average fell 0.54%, the S&P 500 lost 0.58%, and the Nasdaq Composite dropped 0.64%.

Dallas Fed President Robert Kaplan said he believed the economic recovery warrants tapering of asset purchases to commence around October. Earlier, St. Louis Fed President James Bullard said the central bank was "coalescing" around a plan to begin tapering.

The dollar and U.S. yields were little moved on Friday ahead of Powell's speech.

The yield on benchmark 10-year Treasury notes was 1.3441%, down from a two-week high of 1.375% set the day before, but barely changed from the U.S. close.

Gold rose 0.53% to $1,801.55 per ounce as some investors sought safety ahead of the speech.

U.S. crude rose 1.39% to $68.36 a barrel, Brent crude rose 1.46% to $72.03 per barrel, as energy companies began shutting production in the Gulf of Mexico ahead of a potential hurricane this weekend.

-reuters-

Japan's financial watchdog to order Tokyo bourse to swiftly report on trading system glitch

TOKYO - Japan's financial watchdog will order the Tokyo Stock Exchange (TSE) to report swiftly on its system glitch that halted trading at the bourse for the whole day on Thursday, Finance Minister Taro Aso said.

The Financial Services Agency needs to examine the case after the stock exchange clears up the system trouble and takes steps to prevent a recurrence, Aso told reporters after a cabinet meeting.

The TSE resumed normal trading on Friday, with the main index starting slightly higher a day after the worst-ever outage brought the world's third-largest equity market to a standstill.

-reuters-

Pandemic propels old-school bond traders towards an electronic future

LONDON - The mammoth bond market has long been the old-school bastion of the financial world, but the COVID-19 pandemic has cast a light on its future - and it looks electronic. Well, mainly.

At the height of the market panic in March, Seattle-based Brandon Rasmussen, a senior fixed-income trader at $300 billion asset manager Russell Investments, had a client order to sell $2.5 billion worth of US Treasuries.

He found, though, that such a transaction was near-impossible in a highly volatile market that made no exceptions for even one of the world's most sought-after assets.

Dealers refused to quote prices by phone, adding to the stress of executing a large order without distorting the market.

The solution Rasmussen eventually settled on was to break the order up into smaller chunks and process them electronically - something he may not have considered a few weeks earlier.

"The feedback that we got from dealers was that they were not quoting on the phone. They couldn't do that, they couldn't keep up with that," he said. "I think what this crisis has shown is that really if you weren't trading electronically, you should be trading electronically."

His experience illustrates how the volatility caused by the crisis, along with a new remote mindset of working from home, has pushed more traders to go digital in a market that has historically lagged stocks and forex in electronification.

That trend is reflected in the business on electronic bond-trading platforms.

For example MarketAxess, one of the biggest players, enjoyed record trading volumes in March. At rival Tradeweb, average daily turnover hit a record aggregate $1 trillion in that month, a more than 41 percent year-on-year increase.

Meanwhile MTS, part of the London Stock Exchange Group , said it won several large asset managers in Europe as clients during the crisis.

Yet traders stress that dealers and clients speaking to one another will long remain a key component of the industry, especially at times of heightened volatility.

Even as Rasmussen went electronic to push through his trade, for example, he was also talking to buyers to agree "switches" - swapping one type of US bond for another to share risk.

The jump in electronic trading activity coincided with both a rush into government bonds as the coronavirus sparked demand for safe-haven assets, and then a sharp selloff as investors sold their most liquid assets to make up for losses elsewhere.

LIQUIDITY & TRANSPARENCY

Electronic trading - where transactions are carried out using software on online platforms, rather than via dealer-client "voice" trades - can carry major benefits for the $100 trillion-plus world of government and corporate debt.

Regulations such as MiFID II in Europe to improve transparency have also boosted electronic trading.

For one, traders executing deals can quickly gauge market depth on their screens, freeing time for more complex trades. For another, it offers lower costs for investors; two dealers estimated it to be 10 percent to 30 percent cheaper than traditional voice trades.

Nonetheless, while most bond industry players acknowledge that much of the future is digital, many have been reluctant to go fully electronic.

Around 45 percent of the European fixed-income market is electronically traded, versus 38 percent a year ago, consultancy Greenwich Associates estimates. In the $6.6 trillion-a-day currency market, 90 percent of spot trading is conducted digitally.

However the COVID-19 crisis is accelerating the electronification of the bond market, according to industry players.

Many such as Tony Rodriguez, US-based head of fixed income strategy at Nuveen Asset Management, said a need for greater liquidity had boosted electronic trading activity.

"A lot of trades were pushed electronically because of greater liquidity and transparency - so the crisis pushed what was already in place," he said.

Andrew Falco, global head of FX and fixed income trading at Fidelity International in London credits electronic trading with allowing connectivity in a market suddenly dispersed by remote working.

This kind of technology enabled the transition from working in an office to working from kitchen tables, he told Reuters.

He said some lessons had been learned about this last year when Fidelity's Hong Kong team struggled to work in the office because of the unrest roiling the city.

"So for us in 2020, we finessed the e-trading home set-up and ensured it worked well, whether it was in HK, Shanghai, Dublin or the UK," he added.


'IMAGINE THIS 25 YEARS AGO' 

For the banks who provide dealer and execution services, though, the electronic shift may be eating into fixed-income revenues; during the March quarter, earnings from bond trading at the world's biggest 12 banks remained below levels seen in 2014, research firm Coalition calculates.

But they too are accelerating the push to digital services, particularly for the automation that helps them when volatility spikes.

JP Morgan, for instance, uses an algorithm to help generate price quotes on its forward FX platform, which includes bonds, fielding "hundreds of thousands of enquiries" and transacting "thousands of trades a day" during the crisis, said Tom Prickett, co-head of EMEA rates at the bank.

Another big player, Goldman Sachs, said clients ramped up calls for the electronification and automation of companies' bond sales, until now a slow process conducted manually.

"The crisis revealed some of those shortcomings in bright lights," said David Wilkins, Goldman's head of FICC execution services in EMEA.

Investors and traders acknowledged that digital technology had been a savior during the pandemic, a view expressed across a host of industries.

"Imagine something like this happening 25 years ago, when emails didn't exist, electronic communication was not really there," said Zoeb Sachee, head of euro linear rates trading at Citibank who oversees government bond trading in European markets.

THE OLD AND THE NEW

But, for the foreseeable future at least, the bond market is likely to encompass the old and the new: technology as well as traditional trading models based on dealer-client relationships.

Traders of European investment-grade corporate bonds during the crisis often negotiated deals by phone before using a platform to settle, according to an International Capital Market Association (ICMA) report.

"Bond markets are very much relationship-driven and I don't see how that goes away," said report author Andy Hill.

This was echoed by Falco at Fidelity.

"The view that we felt as a team was that we would use technology where we had confidence in the price that we could see on the screen, and when we didn't have the confidence in the price, we would execute manually."

-reuters-

Asia stocks plunge on coronavirus fears, oil prices

TOKYO - Stock markets plunged around Asia on Monday, as panic selling set in with traders fretting over the economic impact of the new coronavirus and digesting a free-fall in the oil price.

By mid-morning, the benchmark Nikkei 225 index had dropped 5.10 percent or 1,058.06 points to 19,691.69, while the broader Topix index was off 5.01 percent or 73.69 points to 1,397.77.

Other markets in the region were also suffering with Hong Kong stocks down 3.8 percent at the open, Australia off more than 5 percent and equities in New Zealand and South Korea both down by just under 3 percent. 

In China, the benchmark Shanghai Composite Index dived 1.56 percent while the benchmark Philippine stock exchange index opened down nearly 4 percent. 

Driving the declines was a ferocious sell-off in the oil markets sparked by top exporter Saudi Arabia slashing prices -- in some cases to unprecedented levels -- after a bust-up with Russia over oil production.

The two main oil contracts were both down about 20 percent in morning Asian trade, with West Texas Intermediate sliding to around $32 a barrel and Brent crude to $36 a barrel.

The foreign exchange markets were also extremely volatile, with traders snapping up the yen -- seen as a hedge against global instability -- and selling off the dollar amid uncertainty over coronavirus in the United States.

Marito Ueda, senior trader at FX Prime, told AFP: "Fears over the virus's impact on the global economy and a plummet in US yields had investors seeking the safe-haven yen."

"It is essentially flight from the dollar," he added.

THICK WITH FEAR

A stronger yen tends to push down Japanese stocks, and exporters from the world's third-top economy were especially hard-hit, with Nissan and Sony down more than five percent and Toyota down 3.6 percent.

Banks also plunged, with Sumitomo Mitsui Financial trading down nearly four percent and Mitsubishi UFJ Financial off by almost five percent.

Stephen Innes, chief market strategist at AxiCo, said the markets were suffering from a perfect storm of factors.

"The yen surged... at the market open this week as investors dove into safe havens on accelerating COVID-19 cases in Europe, and as Saudi Arabia triggers a price war for oil, adding another level of unwanted panic to a market already thick with fear," he said. 

The dollar fetched 104.15 yen in early Tokyo time, after dipping to around 103.83 yen in Sydney time, the lowest level since November 2016. That compares with 105.40 yen in New York late Friday.

Markets were not helped by data showing that the Japanese economy had declined more than initially thought -- even before the outbreak of the coronavirus.

The country's gross domestic product during the October-December quarter was revised down to a contraction of 1.8 percent, compared to an earlier estimate of 1.6 percent.

"Unfortunately, any recovery in Q1 has been nipped in the bud by the global spread of the coronavirus," said Tom Learnmouth, Japan economist at Capital Economics.

Agence France-Presse

Saudi Aramco shares rocket on debut after record IPO

RIYADH - Saudi Aramco's shares soared on their debut on the domestic stock exchange Wednesday, becoming the world's biggest listed company worth $1.88 trillion after a record-breaking IPO.

Aramco had priced the initial public offering at 32 riyals ($8.53) per share, raising $25.6 billion and eclipsing Alibaba's $25 billion IPO of 2014 to become the world's largest.

Aramco shares rose 10 percent to 35.2 riyals just seconds after trading began on Riyadh's Tadawul exchange, the maximum allowed on any trading day, further boosting the energy giant's valuation.

"Today is a day of immense pride for Aramco," company chief executive Amin Nasser said at a glitzy launch ceremony.

"Today we make history as Saudi Aramco marks the beginning of an important new chapter in our company's journey of prosperity," he added.

The stock sale is the bedrock of de facto ruler Crown Prince Mohammed bin Salman's ambitious strategy to overhaul the oil-reliant economy. 

Wealthy Saudi families are reportedly under pressure from the government to invest in the Aramco stock, with nationalists calling it a patriotic duty. 

Aramco also dangled sweeteners for local investors, including promises of higher dividends and the possibility of bonus shares if they hold on to the stock.

The IPO process had put the energy giant's value at $1.7 trillion, far ahead of other firms in the trillion-dollar club including Apple and Microsoft. 

The listing of Aramco, with its huge capital value, boosts the Saudi bourse -- known as Tadawul -- to the ranks of the world's top ten.

But the scaled-down offering is still a far cry from the blockbuster originally planned by Prince Mohammed who had eyed a $2.0 trillion valuation.

The much-delayed stock sale, first announced in 2016, was initially expected to raise as much as $100 billion from the listing of up to five percent of the company.

The government's plans to raise additional funds by listing on a major international market are also on hold.

The government is now trying to persuade wealthy families and institutions to buy Aramco shares after trading begins, in a last-ditch effort to reach the $2 trillion mark, the Financial Times reported on Tuesday.

The Saudi government itself has pumped in huge funds to boost the IPO, which was originally intended to raise external funding for the kingdom's diversification plan.

Two-thirds of the shares were offered to institutional investors. Saudi government bodies accounted for 13.2 percent of the institutional tranche, investing around $2.3 billion, according to lead IPO manager Samba Capital.

"It's likely that we will see Aramco bid up to $2 trillion or higher in the first days of trading, and potentially to trade limit up on the first day," Zachary Cefaratti, chief executive officer at Dalma Capital Management -- which bought shares in the IPO -- told Bloomberg News.

The IPO is a crucial part of Prince Mohammed's plan to wean the economy away from oil by pumping funds into megaprojects and non-energy industries such as tourism and entertainment.

But skeptics say the proceeds will barely cover the kingdom's budget deficit for a year.

The IPO was heavily focused on Saudi and other Gulf traders. International investors have remained skeptical about the secretive company's targeted valuation.

The market debut also comes with oil prices under pressure due to a sluggish global economy hit by the US-China trade war and record output by non-OPEC crude exporters.

source: news.abs-cbn.com

Alibaba to resume Hong Kong listing plans as soon as November: sources

HONG KONG/NEW YORK - Alibaba Group Holding Ltd is eyeing a listing in Hong Kong as early as November to raise up to $15 billion, after political unrest put the move on ice earlier this year, people familiar with the matter said on Wednesday.

Alibaba's listing would boost Hong Kong's status as a major capital markets hub. After topping global rankings in 2018 for funds raised through IPOs, the city's bourse fell behind the New York Stock Exchange and Nasdaq this year amid months of anti-government protests that have roiled the Asian financial hub.

The float would be the world's biggest equity deal for the year if the initial public offering (IPO) for state-owned oil company Saudi Aramco gets delayed to next year. Aramco's IPO could be worth over $20 billion.

Alibaba plans to seek listing approval from Hong Kong Exchanges and Clearing Ltd shortly after the Chinese e-commerce giant's online retail frenzy Singles Day on Nov. 11, and may list its shares towards the end of November or in early December, the sources said.

The company expects to be in a position to forgo so-called pre-marketing meetings where it meets with institutional investors before a deal launch given its size and that many investors are already familiar with the company, the sources added. It is hoping to raise between $10 billion and $15 billion through the listing, Reuters has reported.

The sources cautioned that the plans are still subject to market conditions and requested anonymity as the matter is private.

A spokeswoman for Alibaba, which is already listed in New York, declined to comment. The company had been preparing to launch the listing in late August, but delayed it due to the lack of financial and political stability in Hong Kong after months of frequently violent anti-government demonstrations.

All the same, IPO activity has picked up since September as typically the last four months of the year are the busiest in Hong Kong for public floats.

Such a large offering from Alibaba, potentially the biggest follow-on share sale in seven years, according to Refinitiv data, could also have implications on liquidity in Hong Kong's financial system and the closely watched Hong Kong Interbank Offered Rate (HIBOR). This is particularly the case given that investors in the Hong Kong market often borrow funds in anticipation of large share sales.

A rise in HIBOR can in turn lift the Hong Kong dollar , which is pegged to the US dollar at a tight range of 7.75 to 7.85. To defend the peg, the Hong Kong Monetary Authority (HKMA), the city's de-facto central bank, buys local dollars if it gets too weak and sells to curb excessive strength.

Alibaba follows in the footsteps of brewer AB InBev, which in September raised about $5 billion by listing its Asia-Pacific unit in Hong Kong. It was the bourse's biggest and the world's second-largest IPO so far this year.

HOMECOMING

Alibaba holds the record for the world's largest IPO with its $25 billion float in New York in 2014.

At that time, the company had initially hoped to float in Hong Kong, but its governance structure clashed with the city's listing rules. Hong Kong Exchanges & Clearing loosened its rules last year, specifically to lure overseas-listed Chinese tech giants to float closer to home.

Alibaba would be the first to test the new system.

Since going public in New York, Alibaba's shares have more than doubled in value, giving it a market capitalization of around $460 billion.

In August, Alibaba reported better-than-expected quarterly revenue and profit, aided by growth in its e-commerce and cloud computing businesses.

A total of $18.5 billion was raised by companies via IPOs on the Hong Kong bourse from January through to mid-October, compared with $21.9 billion raised on the NYSE and $23.3 billion on Nasdaq, Refinitiv data showed.

source: news.abs-cbn.com

Hong Kong Stock Exchange unveils shock £32bn bid for London rival

LONDON - The Hong Kong Stock Exchange has bid almost £32 billion for its London rival in a shock move Wednesday to bring together 2 of the world's largest financial hubs in Asia and Europe.

The blockbuster proposal including debt, worth $40 billion or 36 billion euros, is dependent on the London Stock Exchange Group (LSEG) scrapping a proposed $27-billion takeover of US financial data provider Refinitiv.

In reaction, LSEG said it would "consider the proposal" but stressed that it "remains committed" to buying Refinitiv.

The surprise news initially sent LSEG shares surging 10 percent before it pared the gain to 5.9 percent at £72.06, far below the offer price of more than £83 per share as analysts doubted the likelihood of a deal being struck given LSEG's commitment to Refinitiv.

London's benchmark FTSE 100 index added 1.0 percent overall at the close.

"Hong Kong Exchanges and Clearing Limited (HKEX) today announces that it has made a proposal to the board of LSEG to combine the 2 companies," it said in a statement.

The cash-and-shares offer is worth £31.6 billion including £2.0 billion of debt, HKEX added.

CONNECTING EAST WITH WEST 

The Hong Kong company said a deal would create a combined group "ideally positioned to benefit from the evolving global macroeconomic landscape, connecting the established financial markets in the West with the emerging financial markets in the East, particularly in China."

HKEX chairman Laura Cha said a deal represented a "compelling" opportunity.

She added: "We believe a combination of HKEX and LSEG represents a highly compelling strategic opportunity to create a global market infrastructure group, bringing together the largest and most significant financial centres in Asia and Europe.

"Following early engagement with LSEG, we look forward to working in detail with the LSEG board to demonstrate that this transaction is in the best interests of all stakeholders, investors and both businesses."

The gigantic takeover comes just one month after the LSEG embarked upon a huge deal to acquire Refinitiv, a move that would create a market information giant to rival US titan Bloomberg.

The HKSE deal is subject to approval by both sets of shareholders, as well as the termination of the Refinitiv deal, which Charles Li, HKEX executive director, underlined was a prerequisite.

'SKEPTICISM' OVER DEAL 

"The proposed offer would be totemic in terms of East-West relations," said Richard Hunter, head of markets at online broker Interactive Investor.

But he also noted that the share price has shed half of its initial gains and remains far below the bid level.

"The proposal is a fascinating prospect but far from a done deal," Hunter said.

"The fact that the LSE share price has already retreated from the initial 10-percent spike on release of the news may reflect some initial skepticism around the likelihood of the deal going through."

The Refinitiv takeover had marked a major change of LSE strategy and comes two years after its failed £21-billion merger with Germany's Deutsche Boerse.

That gigantic deal -- the third failed attempt at a tie-up between the British and German stock exchange operators -- was blocked by the European Commission on fears it would undercut competition.

source: news.abs-cbn.com

Global equities rout deepens as US sets crosshairs on yuan

TOKYO - Global stocks extended already substantial losses on Tuesday, after Washington tagged China a currency manipulator, shaking fragile investor sentiment in a rapid escalation of the US-China trade war.

Safe-haven assets, including bonds and some currencies such as the yen and Swiss franc, benefited as investors scurried to avoid risk.

In early European trade, the pan-region Euro Stoxx 50 futures were down 0.2 percent, German DAX futures slipped 0.15 percent and Britain's FTSE futures lost 0.4 percent.

US Treasury Secretary Steven Mnuchin said on Monday the government had determined that China is manipulating its currency, and that Washington would engage the International Monetary Fund to eliminate unfair competition from Beijing.

"Officially labeling China a currency manipulator gives the United States a legitimate reason to take even more steps," said Norihiro Fujito, senior investment strategist at Mitsubishi UFJ Morgan Stanley Securities.

"The markets are now scrambling to factor in the possibility of the United States imposing not only an additional 10 percent of tariffs on Chinese imports, but the figure being raised to 25 percent. This is likely to be a protracted trade war without a quick resolution."

US President Donald Trump vowed last week to impose a 10 percent tariff on $300 billion of Chinese imports from Sept. 1, adding that it can be raised beyond 25 percent. Some economists reckon the global economy could slip into recession in the coming months if the tariff is increased to 25 percent.

The Trump administration's dramatic move against China hastened the risk aversion seen in global markets this week. On Monday, China let the yuan slide in response to the latest US tariffs, which are expected to further aggravate trade tensions between the world's two largest economies.

MSCI's broadest index of Asia-Pacific shares outside Japan was down 0.75 percent after brushing its lowest since January. It has lost 3.7 percent so far this week.

The Shanghai Composite Index retreated 1.4 percent.

Japan's Nikkei shed 0.7 percent, Australian stocks fell 2.3 percent and South Korea's KOSPI slid 0.9 percent.

"Hedge funds and other speculators who have bet on stocks have not finished closing down their positions yet. There will likely be another wave of selling in stocks," said Masanori Takada, cross asset strategist at Nomura Securities.

"The sudden surge in volatility is likely to prompt risk parity players to pull out possibly up to $20 billion from global stocks and buy bonds."

YUAN'S SLIDE STALLS

The onshore Chinese yuan fell to an 11-year low early on Tuesday, brushing 7.0699 per dollar.

In a symbolic move, Beijing let the yuan breach 7-per-dollar on Monday for the first time since late 2008. But the Chinese central bank's mid-point fixing on Tuesday of 6.9683 was firmer than market expectations, and the yuan's retreat slowed.

China's offshore yuan stretched the previous day's slide, and briefly weakened to 7.1382, the lowest since international trading in the Chinese currency began in 2010. But it pulled back to 7.0469 after Beijing's firmer-than-expected yuan fixing on Tuesday.

The Japanese yen, a perceived safe-haven in times of market turmoil and political tensions, touched a seven-month high of 105.520 per dollar before dropping back to 106.700 in volatile trade.

The Swiss franc, another currency sought in times of turmoil, has gained roughly 1 percent against the dollar this week. It set a six-week peak of 0.9700 franc per dollar.

Investor demand for other safe-havens such government bonds also remained high as risk aversion gathered momentum.

The 10-year US Treasury yield extended sharp falls overnight and declined to 1.672 percent, its lowest since October 2016.

Japan's 10-year yield fell to a three-year trough of minus 0.215 percent.

Brent crude oil futures plumbed a seven-month low of $59.07 per barrel as the trade war raised concerns about lower demand for commodities. Brent last traded at $60.41 for a gain of 1 percent as bargain hunting kicked in.

Spot gold advanced to a six-year peak of $1,474.80 an ounce as investors sought the safety of the precious metal.

source: news.abs-cbn.com

Amazon boss Jeff Bezos rockets to richest person on the planet

As Amazon became the second US firm to hit a trillion-dollar value on the stock market, founder Jeff Bezos regained the crown as the richest person on the planet.

Amazon's share price has climbed during the year, lifting the personal wealth of the company's 54-year-old founder with it. Forbes estimated his net worth about $166 billion.

He has gone on record with a formula for success that includes taking bold bets, riding change and rebounding from setbacks.

"You need to be nimble and robust so you need to be able to take a punch and you also need to be quick and innovative and do new things at a higher speed, that's the best defense against the future," Bezos said in an interview published in Vanity Fair magazine last year.

"You have to always be leaning into the future. If you're leaning away from the future, the future is gonna win, every time."

- Tinkering toddler -

Jeffrey Preston Bezos's penchant for experimenting reportedly dates to a young age -- with one widely-recounted story telling that he tried to dismantle his own crib as a toddler.

His mother was a teenager when she gave birth to Bezos in Albuquerque, New Mexico, on January 12, 1964.

"You shaped us, you protected us, you let us fall, you picked us up, and you loved us, always and unconditionally," Bezos said in a Twitter message thanking his mom "for everything" on Mother's Day in May.

She remarried when her son was about four years old, and he was legally adopted by his Cuban immigrant stepfather who worked as an engineer at a major petrochemical company.

"My dad came here from Cuba all by himself without speaking English when he was 16 years old, and has been kicking ass ever since," Bezos said in a Father's Day tweet in June.

"Thank you for all the love and heart, Dad!"

His mother's family were settlers in Texas, where Bezos spent many a summer working at a ranch owned by a grandfather retired from a job as a regional director at the US Atomic Energy Commission.

Bezos was enchanted by computer science when the IT industry was in its infancy and he studied engineering at Princeton University.

After graduating, he put his skills to work on Wall Street, where by 1990 he had risen to be a senior vice president at investment firm D.E. Shaw.

He surprised peers by leaving his high-paid position about four years later to open an online bookseller called Amazon.com, which according to legend was started in a garage in a Seattle suburb. Bezos was backed by money borrowed from his parents.

Bezos went from being a boy with a love for how things work to being the man who built Amazon.com into an internet powerhouse.

Amazon grew to dominate commerce and become a formidable contender in cloud computing, streaming television, and artificial intelligence with its digital assistant Alexa.

- Long-term thinking -

Bezos has such a proven track record for shaking up the business sectors he enters that he has been dubbed "disruptor-in-chief."

Like his company, Bezos has transformed with time, shaving his head and bulking up his body with exercise. The results were immortalized in a series of photos taken at a conference last year.

A fan of science fiction and in particular the British author Iain Banks, Bezos has passions other than Amazon.

Bezos called Banks "a huge personal favorite" in a tweet early this year while announcing that Amazon Prime video service was working on a television series based on one of the author's novels.

Bezos has invested some $42 million in the building a 150-meter-tall clock designed to keep time for 10,000 years. Built inside a mountain in Texas, the clock will be powered by geothermal energy.

"Humans are now technologically advanced enough that we can create not only extraordinary wonders but also civilization-scale problems," Bezos said in a blog post devoted to the clock project.

"We're likely to need more long-term thinking."

Bezos is also behind private space exploration operation Blue Origin, into which he usually invests money from selling Amazon shares.

Blue Origin has outlined plans to build a spaceship and lunar lander capable of delivering cargo to the moon, perhaps to support colonies there.

With the purchase of The Washington Post in 2013, the Internet entrepreneur added a prestigious news operation to his investments.

The Post, and Bezos himself, have been targeted by US President Donald Trump. An open critic of Trump, Bezos has jokingly offered to send him into space.

Bezos has been married to Mackenzie Bezos, a writer, since 1993. They have four children. 

source: news.abs-cbn.com

Amazon goes from books to a trillion-dollar valuation

Amazon's journey from an online bookseller started in a garage to a global e-commerce powerhouse valued at a trillion dollars has centered on obsession with the long road.

The company initially incorporated as "Cadabra" by Jeff Bezos in 1994 and backed with money borrowed from his parents joined Apple as the second US technology firm to be valued at $1 trillion on Tuesday.

"It's funny comparing Apple and Amazon because they are very different companies," said independent technology analyst Rob Enderle.

"Apple is basically a one product company nowadays; Amazon is anything but."

While Apple makes most of its money from iPhones, the Amazon empire includes global e-commerce operations, cloud computing, artificial intelligence, streaming television, groceries and more.

Created in a garage in a suburb of Seattle, Washington, the company renamed "Amazon" sold its first book -- Fluid Concepts and Creative Analogies: Computer Models of the Fundamental Mechanisms of Thought by Douglas Hofstadter -- to a computer engineer in mid-1995.

By the end of that year, Amazon was selling books online throughout the US. Amazon went public in early 1997.

The company for more than a decade put growth over profit, investing heavily in warehouses, distribution networks, and data centers.

"Every cent they made they put back in the company," Enderle said of Amazon.

"They kept their eye on the prize, which was initially to take over most of commerce."

Innovation sans scandal

Neil Saunders of the research firm GlobalData said Amazon's success comes from the fact that it innovates unlike any other.

"This heady pace of creativity is the key reason why it stays several steps ahead of the market and is able to generate so much growth," Saunders said.

Bezos has kept firm control of Amazon, steering clear of hedge fund investors inclined to short-term tactics aimed at getting share prices to jump.

The founder and chief executive also avoided scandals or other distractions, keeping revenue and costs close enough to manage and easing into "adjacent markets" that play into Amazon strengths or interests, according to Enderle.

For example, Amazon Web Services cloud computing business is a lucrative business built on technology infrastructure that the company needed to run its own operations.

Investing in warehouses, trucking, drones, shipping and other distribution systems not only enables Amazon to drive down costs they position the company to compete with the likes of FedEx and UPS.

Buying Whole Foods grocery chain last year got Amazon established real world outlets while putting its delivery and retail smarts and systems to work in the brick-and-mortar world.

Drugs and digital ads

Prescription medicine would be a natural market for Amazon to expand into, according to Enderle Meanwhile, Amazon is reportedly beefing up its digital advertising business to better compete in an online ad market dominated by Google and Facebook.

In the past quarter, Amazon posted its best-ever profit of $2.5 billion as Bezos, whose Amazon stake has made him the world's richest person, highlighted the importance of the digital assistant Alexa that powers Amazon electronics along with cars, appliances and other connected devices.

According to the research firm eMarketer, Amazon's e-commerce revenue will grow more than 28 percent this year to reach $394 billion, and will account for 49 percent of US online retail sales and nearly five percent of all retail spending.

One of Amazon's revenue drivers is its Prime subscription service which offers streaming video and music, free delivery and other perks and which has more than 100 million members worldwide.

Arrogance trap

Some fear Amazon is becoming too dominant a force, especially in retail, sparking antitrust discussion even as the company keeps expanding globally and searches for a second headquarters in North America.

"It wasn't that long ago that people were freaking out about Walmart, and Amazon basically stepped on Walmart," analyst Enderle said.

"What Amazon means is disruption and people don't like to be disrupted."

Critics of the company include US President Donald Trump, who has expressed ire at the Bezos-owned Washington Post newspaper that has published stories the president didn't like.

Bezos bought the Washington Post five years ago for $250 million from his personal funds.

While his skills could be advantageous in the content-oriented business, getting into news comes with the risk of displeasing politicians.

"The Post was a mistake because it results in him going to war with people he wouldn't otherwise go to war with," Enderle said.

"You really don't want to go to war with the government."

Amazon's huge cloud computing segment powers systems for government clients, and contracts could be influenced by politics.

Amazon must also guard against the kind of arrogance that can undo companies that come to dominate markets, according to the analyst.

"When companies get big, it starts being about what you have the power to do and not what is right to do," Enderle said.

"If Amazon does have a downfall, it will be arrogance in dealing with the customer."

source: news.abs-cbn.com

Balcony of Indonesia's stock exchange collapses, injures around a dozen

JAKARTA - Around a dozen injured people were carried on stretchers out of the Indonesia Stock Exchange on Monday, eye witnesses said, after reports of a collapsed structure inside the building.

Dozens of police officials were cordoning off the two-tower, multi-storey complex as many people ran away and others were seen sitting on steps outside the lobby.

Director of the stock exchange Alpino Kianjaya declined to comment on the incident. Markets are currently in midday break and are scheduled to reopen at 1.30pm local time.

Images circulating on social media showed a mangled metal structure that had collapsed around a Starbucks cafe near the entrance to the lobby.

Jakarta police said they were seeking more information on the incident.

source: news.abs-cbn.com

China looks to connect with ASEAN financial markets: PSE official

China is looking at capital market integration and exploring how it can connect with ASEAN financial markets as part of its Belt and Road initiative, an official of the Philippine Stock Exchange said Friday.

PSE chief operations officer Roel Refran also said the ASEAN Trading Link initiative needs to be further studied as the Philippines is not yet "as deep in product offerings".

source: news.abs-cbn.com

World markets end volatile year mostly in the black

Most world stocks markets finished 2016 in positive territory despite shock votes in Britain and the United States, but the outlook for 2017 is clouded by looming European elections and Brexit.

The year witnessed a wave of anti-establishment populism, which saw Britain vote to leave the EU and maverick billionaire businessman Donald Trump elected as US president.

Both unexpected outcomes sparked a brief tumble on global equity markets, but many have since staged a stunning recovery to finish 2016 in the black.

London's FTSE 100 gained 14.3 percent over the year, while Frankfurt's DAX 30 added about 6.9 percent and the Paris CAC 40 won 4.9 percent.

In the US, all three major indices enjoyed robust gains, with the Dow Jones Industrial Average jumping 13.4 percent, the S&P 500 9.5 percent and the Nasdaq 7.5 percent.

Japan's Nikkei rose 0.4 percent in 2016, marking the fifth consecutive annual increase and registering its highest year-end close in two decades on optimism over the incoming US government.

Shanghai slumped more than 12 percent on the back of massive capital flight and a languishing yuan currency.

Equities continued to receive support from robust central bank stimulus programs in Europe, Japan and elsewhere, although the US Federal Reserve raised interest rates in December and signaled it plans more tightening in 2017.

A 50 percent jump in oil prices -- fueled in part by the decision of the Organization of the Petroleum Exporting Countries to cut production -- also supported stocks.

That helped boost the Bovespa in Sao Paolo, which jumped nearly 40 percent on strength in commodity prices and the resolution of an impeachment drama involving former president Dilma Rousseff, which ended with the installation of center-right President Michel Temer in August.

-- FTSE sparkles --

Since Brexit, London's FTSE 100 blue-chip index has soared to end the year in record-breaking form, as the British economy shrugged off the impact of the impending divorce from the EU.

"Fears of an imminent UK recession following Brexit proved wide of the mark thanks largely to the resilience of consumer spending," NFS Macro analyst Nick Stamenkovic told AFP.

"Indeed, Brexit was viewed as a local rather than global issue, prompting a sharp turnaround in the fortunes of world stock markets."

Markets also briefly tanked on November 9 after Republican Trump defeated Democrat and market favorite Hillary Clinton to capture the White House.

Yet Wall Street has since enjoyed a blockbuster run with the Dow Jones Industrial Average making a push towards 20,000 points. In the end, the blue-chip index finished at 19,762.60, logging its best year since 2013.

New York has been boosted by expectations that Trump -- who will be inaugurated on January 20 -- will honour election pledges to ramp up infrastructure spending, cut taxes and streamline regulations.

Markets are pricing in "all the good stuff while ignoring for now potential consequences for the dollar, deficits, interest rates, trade, inflation and the uncertainty principle," JPMorgan Asset Management strategist Michael Cembalest said in a research note.

"Whether this benign view is accurate or not will be a major driver of markets next year."

-- Rise of populism --

Looking ahead to 2017, the spotlight is now on upcoming European elections.

The Netherlands heads to the polls in March, followed by France in May, and Germany in the autumn.

Further gains by populist candidates would reverberate through Europe as Brussels moves into the thick of negotiations with Britain over Brexit.

VTB Capital analyst Neil MacKinnon also highlighted the region's banking problem after the European Central Bank called for Italian lender Monte dei Paschi di Siena (BMPS) to receive a bailout of 8.8 billion euros.

Italy's stock market shed 10 percent over the year.

In the US, investors largely have disregarded worries about the unpredictable Trump, including fears his tough posture towards China could lead to a trade war and that his embrace of Russian President Vladimir Putin could roil international alliances.

But reality could trump expectations.

And expectations are high for Trump's first 100 days, which are anticipated to include progress on these key policies, said Sandy Sanders, a senior portfolio manager at Manulife Asset Management.

"Everyone is going to be laser-like focused on what's going through Congress and the Senate and then to the president's desk and they're going to want to see deliverables on that tax reform," Sanders said.

In foreign exchange, many economists predict the euro could slump to parity against the dollar next year, aided by the Federal Reserve's hawkish stance on interest rates.

The Fed's bullish outlook this month pushed the dollar to 10-month yen highs and sent it heading towards parity with the euro for the first time since 2002.

- Key figures around 1630 GMT -

New York - Dow: DOWN 0.3 percent at 19,762.60 (close)

New York - S&P 500: DOWN 0.5 percent at 2,238.83 (close)

New York - Nasdaq: DOWN 0.9 percent at 5,383.12 (close)

London - FTSE 100: UP 0.3 percent at 7,142.83 (close)

Frankfurt - DAX 30: UP 0.3 percent at 11,481.06 (close)

Paris - CAC 40: UP 0.5 percent at 4,862.31 (close)

EURO STOXX 50: UP 0.3 percent at 3,282.94

Tokyo - Nikkei 225: DOWN 0.2 percent at 19,114.37 (close)

Hong Kong - Hang Seng: UP one percent at 22,000.56 (close)

Shanghai - Composite: UP 0.2 percent at 3,103.64 (close)

Euro/dollar: UP at $1.0515 from $1.0484

Dollar/yen: UP at 1.1698 yen from 116.63 yen

Pound/dollar: UP at $1.2322 from $1.2265

source: news.abs-cbn.com

Stocks could suffer as Trump trade policy takes shape

NEW YORK - The year-end stocks rally on the heels of the election of Donald Trump as U.S. president was built on expectations of reduced regulations, big tax cuts and a large fiscal stimulus.

Now signs are emerging from the Trump camp that harsher trade policies that could jeopardize the honeymoon are likely in the offing, and investors would be well advised to give those prospects more weight when gauging how much further an already pricey market has to run.

By naming China hawk Peter Navarro as head of a newly formed White House National Trade Council, the incoming administration is signaling Trump's campaign promises to revisit trade deals and even impose a tax on all imports are very much alive.

Among the policies favored by Navarro and Trump's pick for commerce secretary, Wilbur Ross, who has the president-elect's ear on a range of economic issues, is a so-called border adjustment tax that is also included in House Speaker Paul Ryan's "Better Way" tax-reform blueprint.

If implemented, economists at Deutsche Bank estimate the tax could send inflation far above the Federal Reserve's 2 percent target and drive a 15 percent surge in the dollar.

Analysts calculate that, all else being equal, a 5 percent increase in the dollar translates into about a 3 percent negative earnings revision for the S&P 500 and a half-point drag on gross domestic product growth. The dollar index has already gained more than 5 percent since the U.S. election.

Harsher trade policies may not cause a full economic slowdown, "but I'd expect a localized recession in manufacturing and smaller gains in factory employment as well," said Brian Jacobsen, chief portfolio strategist at Wells Fargo Funds Management in Menomonee Falls, Wisconsin.

He said the border tax could trigger retaliation, pouring uncertainty into the market.

"Even if the drafters of the legislation have pure intentions, other countries could use this as a pretext for propping up or subsidizing their own favorite industries."

TOP ECONOMY RISK

Stocks have rallied broadly since Nov. 8, with the S&P 500 advancing by 5.7 percent and the Dow Jones Industrial Average surging nearly 9 percent to brush up against the 20,000 mark. Some sectors, such as banks, have shot up nearly 25 percent in the post-election run.

U.S. equities have gotten substantially pricier from a valuation vantage as well. The forward price-to-earnings ratio on the S&P 500 has risen by a full point since Election Day, from 16.6 to 17.6, Thomson Reuters data shows. That makes stocks about 17 percent more expensive, relative to their earnings potential, than their long-term average multiple of around 15.

Small caps have gotten pricier still. The forward multiple on the Russell 2000 has risen to 26 from 22 on Nov. 8, up 18 percent, while the index price has climbed 14 percent.

S&P 500 earnings are expected to rise 12.5 percent next year, according to Thomson Reuters Proprietary Research estimates. Anything that impedes companies from achieving that target, such as a bump from a trade spat or further dollar appreciation in anticipation of new trade barriers, would undermine equity valuations.

In the latest Reuters poll of U.S. primary dealers, economists at Wall Street’s top banks cited Trump’s evolving trade policies over other factors, such as fiscal policy, a strong dollar and higher interest rates, as the greatest risk to the near-term economic outlook.

The idea of a tax on imports "should alarm people," according to Michael O’Rourke, chief market strategist at JonesTrading in Greenwich, Connecticut.

"If we do have a trade war that's going to be a major negative" for stocks, he said, adding that the upward momentum in equities, alongside the lack of participation due to the upcoming holidays, have so far prevented a repricing but "we could cap the rally here, that could very well happen."

O'Rourke said technology, a sector that represents the globalization trade, would be among the hardest hit by taxing imports.

Deutsche Bank's auto sector equities analyst estimated the border tax could slam other industries that rely on global supply chains, with the cost of a new car, for instance, jumping by as much as 10 percent.

source: news.abs-cbn.com

Asia stocks fall in Wall Street's wake, dollar holds below 14-year peak

SINGAPORE - Asian stocks retreated in subdued trade on Friday after Wall Street took a breather from its surge since the U.S. election, while the dollar hovered below the 14-year high set earlier this week.

European markets look set to open flat to slightly lower, with financial spreadbetter IG Markets expecting Britain's FTSE 100 to open down 0.1 percent on a shortened trading day, and Germany's DAX and France's CAC 40 to start the day little changed.

MSCI's broadest index of Asia-Pacific shares outside Japan, fell 0.4 percent to a five-month low. It was heading for a drop of 1.8 percent in its second consecutive week of declines.

China's CSI 300 index dropped 0.7 percent, dragged lower by brokerage and insurance shares, on expectations regulators will tighten supervision over online insurance products. The index was on track to lose 1.1 percent for the week.

Hong Kong's Hang Seng retreated 0.5 percent, and was poised for a similar weekly loss.

Japan's Nikkei, closed for a holiday on Friday, edged up 0.1 percent for the week. The index has posted seven straight weeks of gains, its longest winning streak since early 2013, boosted by the yen's weakness in the face of a surging dollar.

Overnight, U.S. equities posted their first back-to-back daily declines of the month in light trading ahead of the Christmas weekend. U.S. indices fell as much as 0.4 percent on Thursday.

"Santa has taken a leave of absence into the end of the week," Jingyi Pan, market strategist at IG in Singapore, wrote in a note. "Asian indices could remain depressed into the end of the year."

Wall Street stocks have been on a tear since the U.S. election on expectations that Donald Trump's promised fiscal stimulus will boost economic growth and company profits. The Dow Jones Industrial Average has surged 8.7 percent since before the election results were announced.

Markets globally appeared be on pause for the holidays, with the MSCI World index down 0.1 percent on Thursday, and little changed on Friday.

Europe's STOXX 600 index closed down 0.2 percent on Thursday, with the broader downtrend offsetting expectations of a government bailout for troubled Italian lender Monte dei Paschi di Siena, which closed at a record low on Thursday.

Early on Friday, the Italian government approved a rescue of the world's oldest bank, after it failed to raise enough money from private investors to stay afloat.

Prime Minister Paolo Gentiloni told reporters his cabinet had authorised creation of a 20-billion-euro ($21 billion) fund to prop up Italy's embattled banking sector, with Monte dei Paschi expected to be first in line for help.

Deutsche Bank and Credit Suisse said separately on Friday they had agreed to deals of $7.2 billion and $5.3 billion respectively with the U.S. over their sales of mortgage securities in the run up to the 2008 financial crisis.

In the foreign exchange markets, the dollar was subdued, having scaled its highest point since December 2002 on Tuesday. It has since hovered below that level, with traders unwilling to make any big moves ahead of the holiday weekend.

The dollar index, which tracks the greenback against a basket of six global peers, slipped 0.1 percent to 102.98, down from Tuesday's 103.65 peak. It is poised to end the week flat.

The dollar inched down 0.2 percent against the yen to 117.355, and was on track for a 0.55 percent loss for the week.

Still, most traders retain positive bets on the U.S. currency, particularly after upbeat economic data including business spending, and an upward revision to third-quarter economic growth on Thursday.

"The trend is definitely for a stronger dollar," Stephen Casey, senior currency trader at Cambridge Global Payments in New York. "Any dip in the dollar will a buying opportunity."

The euro edged up 0.2 percent to $1.0453 on Friday, on track for a flat end to the week.

Sterling was little changed at $1.229, on track for a weekly slide of 1.6 percent.

The muted investor sentiment weighed on the Australian dollar AUD=, which dropped 0.1 percent to $0.7207, fractionally above a seven-month low touched Thursday and repeated Friday.

Oil prices slipped as investors took profits after Thursday's gains driven by strong U.S. economic data and optimism that crude producers would keep to their pledge to limit output.

U.S. crude pulled back 0.5 percent to $52.69 a barrel on Friday, but remains on track for a 1.5 percent gain for the week.

Global benchmark Brent crude fell 0.4 percent to $54.85, set to close the week 0.7 percent lower.

As risk appetite ebbed on Friday, the decline in gold prices, which have languished in the wake of the dollar's rally, reversed. Spot gold climbed 0.3 percent to $1,131.79 an ounce, shrinking its weekly loss to 0.2 percent.

source: news.abs-cbn.com

Asia stocks edge up on US growth data cues; dollar steady

Asian stocks edged higher on Wednesday reflecting upbeat U.S. growth news while oil steadied after a sharp drop overnight as OPEC struggled to agree on a glut-draining production cut.

MSCI's broadest index of Asia-Pacific shares outside Japan was up 0.1 percent in early trades. It is poised to post a second consecutive monthly loss.

Early action in Asian stocks was just as guarded with Australia down 0.16 percent, the Nikkei flat and South Korea up 0.2 percent.

In currency markets, the dollar consolidated recent gains against a trade-weighted basket of its peers with investors looking to buy on dips after strong data.

The U.S. economy grew faster than initially thought in the third quarter, notching its best performance in two years.

The relatively upbeat data pushed major U.S. stock indices higher with major benchmarks closing between 0.2 to 0.6 percent up. Stock futures edged higher in Asia.

Oil slumped by roughly 4 percent on Tuesday before bouncing somewhat as most analysts concluded the Organization of Petroleum Exporting Countries would cobble together a deal at its meeting in Vienna on Wednesday to cut production to some extent. The meeting starts at 1000 GMT (5.00 a.m. ET).

Brent futures were flat around $46.38 per barrel while U.S. crude gained 0.3 percent to $45.39 per barrel.

source: news.abs-cbn.com