Hollingsworth Daily Post

• Japan's leading shares rose as much as 3% after authorities intervened in the currency markets to weaken the value of the yen against the dollar.The central bank stepped in to sell yen and buy dollars, a day after the yen hit a 15-year high against the dollar.It is the first time in six years that the Bank of Japan has intervened, and further action has not been ruled out.A strong yen makes Japanese exports more expensive, and reduces profits when earnings are repatriated.The dollar was up 3.1% to 85.63 yen, on track for its biggest daily gain in nearly two years. The euro was also up 2.9% at 111.10 yen.
• The European Commission has published draft rules on trading in complex financial products, saying it currently operates in a "Wild West territory".The body wants to create a watchdog to monitor the derivatives market - products used to make bets on assets without buying them.Officials also want to assess the extent of short-selling, when traders bet on asset prices falling.The practices have widely been blamed for causing economic instability.Derivatives and short-selling are viewed by some as contributing to the eurozone debt crisis, which led to major market instability.
• Deutsche Telekom has said its chief executive, Rene Obermann, is being investigated by German prosecutors regarding bribery allegations.The investigation is part of an inquiry looking at allegations that some of the company's eastern European businesses paid bribes to influence regulators."The CEO [Rene Obermann] has rejected the criminal allegations made against him as false," Deutsche Telekom said.Eight people, including non-Telekom workers, are being investigated.
• The World Trade Organisation (WTO) is set to make its latest ruling in a multi-billion dollar battle between planemaking giants Boeing and Airbus.It will give its initial decision over claims illegal subsidies were made by the US government to Boeing.The case was brought by the European Union which says Washington's support is anti-competitive.Earlier this year, the WTO ruled that the EU paid illegal subsidies to Airbus parent firm EADS.
• The Bank for International Settlements (BIS) says the new rules on banks' capital requirements, which it helped to draw up, will make the world "a safer place".Known as Basel III, the regulations require banks to hold more capital in order to absorb major losses.Stephen Cecchetti of the BIS told the BBC that the new rules reduced the likelihood of another financial crisis.However, the new rules have been accused of being soft on banks.
• The number of people unemployed in the UK fell by 8,000 to 2.47 million in the three months to July, figures show.This meant the overall UK unemployment rate remained at 7.8%, the Office for National Statistics (ONS) said.However, the figures also showed the claimant count - those out of work and receiving unemployment benefit - rose by 2,300 in August to 1.47 million.Many economists fear unemployment will rise later in the year when government cuts begin to kick-in.

BBC Business News 15 September 2010

Hollingsworth Daily Post

• Global hunger has fallen this year but remains "unacceptably high", a report from the UN's Food and Agriculture Organization (FAO) has said.people in 2010, compared with 1.02 billion in 2009.
  But it warned that the fight to reduce hunger would face additional obstacles if food prices continue to rise.A separate report from Action Aid estimates that hunger costs developing countries $450bn (£292m) a year.
• US retail sales rose by 0.4% in August, official figures have shown, the strongest gain in five months.It was the second straight month of gains, and was slightly better than analysts had predicted, which has helped to ease concerns about the health of the US economy.The figures from the US Commerce Department were especially robust for clothing and fuel.But car sales fell 0.7% for the month after increasing by 1% in July.
• Finnish phone giant Nokia has vowed to fight back as it battles for customers in the increasingly competitive smartphone market.The company unveiled three new smartphones - E7, C7 and an updated C6 - at London's Nokia World conference.Nokia is still the largest maker of smartphones but is facing stiff competition from the likes of Apple, Google and Blackberry maker RIM.Nokia's Niklas Savander told delegates the firm had been losing out to rivals.
• Afghanistan's central bank has stepped in to take control of the troubled Kabul Bank.Central bank chief Abdul Qadir Fitrat said investigations had also been started into the dealings of the bank's top two directors and shareholders.Customers have been withdrawing money from the bank amid fears it may collapse following allegations of corruption and mismanagement.Earlier this month, Mr Fitrat said Kabul Bank was "safe and sound".
• The yen has hit a new 15-year high against the US dollar after Japanese Prime Minister Naoto Kan won a vote for control of the ruling party.The dollar slid to 83.09 yen shortly after it was confirmed that Mr Kan had survived the leadership contest. It was later trading at about 83.40 yen.Analysts fear the rising yen is undermining Japan's recovery, making exports less competitive overseas.The record low for the dollar is 79.75 yen, reached in April 1995.
• India's inflation rate fell in August to its lowest level since January, partly due to changes in the way it is calculated.
  India's wholesale-price-index (WPI) inflation slowed to 8.5% last month, down from 9.8% in July, official figures show.The new index includes a wider range of consumer goods, such as computers, scooters and refrigerators.Under the old system August's inflation rate would have been 9.5%.
• UK Consumer Prices Index (CPI) inflation remained unchanged in August at 3.1%, according to the Office for National Statistics (ONS).It means the rate remains well above the Bank of England's 2% target, and it brings to an end a three-month period during which the rate had been falling.The unexpectedly high rate was boosted by strong rises in air fares, clothing and food. Fuel prices fell.Retail Prices Index (RPI) inflation slowed to 4.7%, down from 4.8% in July.

BBC Business News 14 September 2010

Weekly Market Summary

By Raymond Chatlani

On Monday, Asian stocks touched one-month highs after the latest U.S. jobs data pacified investors for now as they had been worried that a second recession in the world's biggest economy was high. European equities followed Asia higher. US financial markets were closed for their Labour Day holiday.

Asian markets closed mostly lower on Tuesday on profit taking after 4 days of gains. The Euro and European stocks fell on renewed concerns about the banking sector. US indices fell by over one percent on these concerns.

World stocks recovered on Wednesday to close higher as concerns receded as to the health of European banks. Also the Portugese Government's successful bond issue was well perceived helped the markets. US President Obama unveiling of a $50 Billion investment plan in transport infrastructure also helped stocks.

On Thursday, Asian markets rose again with the exception of China which was dragged down by banks and property companies share prices. European and US indices rallied as the US Labour Department said first-time claims for unemployment benefits fell to the lowest level in two months, adding to signs that employers aren't resorting to staff cuts as economic growth slows. The U.S. trade deficit narrowed a greater-than-expected 14 percent in July to $42.8 billion, which also boosted confidence.

Today, most Asian stocks gained after Japan said its economy grew more than estimated and on yesterday's better U.S. jobs and trade figures which eased fears that the world's largest economy might slip back into recession. Reports that China's imports during August increased by 35.2% which was more than the expected forecast of 26.1% and that this reduced China's August's trade surplus to $20 Billion from a forecast of $27.1 Billion suggest that the Chinese economy will not slowdown and lead the global economy.

It is looking increasingly unlikely that we are going to have a global recession or a double dip recession in the USA, but it is still early to be certain. The main news this week was that the labour market in the US is improving though hiring is still weak. Thus week we have started to invest a little bit into emerging markets for a few clients with the aim of increasing exposure further should economic data continue to improve in the coming weeks.

Hollingsworth Daily Post

• Finland's Nokia has appointed Microsoft business manager Stephen Elop as its new chief executive.Mr Elop - the first non-Finn to head Nokia - will replace Olli-Pekka Kallasvuo, a lifelong employee who had been chief executive since 2006.The appointment may mark a sea-change in strategy at the top of the company.In July, Nokia reported a 40% slump in second quarter profits, as it has struggled to maintain its lead in the booming smartphone market.
• Shares in Deutsche Bank have fallen sharply on reports it will raise 9bn euros (£7.4bn, $11.4bn) in new equity.The move is being seen as the first shot in a string of fund-raisings by banks around the world.Germany's biggest bank saw its shares open down 5.5%, with shares in other banks across Europe also falling, including Barclays and Commerzbank.On Sunday, global banking regulators meet in Switzerland to approve new capital and liquidity rules.
• China reported a surprise surge in imports during August, leading to a fall in its trade surplus to $20bn (£13bn).Imports rose 35.2% from a year ago, faster than the 26.1% markets expected.This means that imports grew slightly faster than exports, which rose by only 34.4%, as expected.The news, which follows a surprising contraction in the US trade deficit in July, may weaken critics of China's trade practices in the US.
• 7-Eleven, the largest convenience store chain in the US, has made a $2bn offer to buy smaller rival Casey's.The offer, of $40 a share, could spark a bidding war as Canadian retailer, Alimentation Couche-Tard, has previously made two bids for Casey's.7-Eleven operates more than 7,100 stores in the US and Canada, while Iowa-based Casey's has 1,531 stores.7-Eleven is owned by Japanese firm Seven & I which sees its future growth coming from the US.
• The global economic recovery is slowing faster than forecast, but a return to recession is unlikely, a leading global economic group has said.The Organisation for Economic Co-operation and Development (OECD) said the slowdown had been more "pronounced than anticipated".As a result, it lowered its growth forecast for 2010 for the G7 leading economies to 1.5%, down from 1.75%.It added the economic outlook was characterised by "great uncertainty".
• A German banker at the centre of a row over comments he made about immigration and race has agreed to stand down, the country's Central Bank has announced.Thilo Sarrazin, a board member of the Bundesbank, will leave his post at the end of this month.He has said that Jews "share a particular gene" and has accused Muslims of failing to integrate.Chancellor Angela Merkel was among several leaders who called for his removal from the board.
• The US trade deficit was smaller than expected in July, figures have shown, as exports reached their highest level in almost two years.US Commerce Department figures showed the gap between imported and exported goods fell 14% to $42.8bn (£27.8bn).Exports rose by 1.8% as US-made goods such as aircraft, industrial machinery and computers proved popular.Imports dipped 2% as consumer demand for items such as clothing, televisions and toys fell.
• The United States has been overtaken by Sweden and Singapore in the World Economic Forum's (WEF) competitiveness survey for 2010-11.The change meant that the US slipped two places to fourth in the WEF's latest ranking.Switzerland, which overtook the US last year, remains the top ranked economy.Germany rose to fifth, and was the best placed eurozone country. The UK, after falling back in recent years, moved up one place to 12th position.

BBC Business News 10th September 2010

Hollingsworth Daily Post

• British Airways and Iberia have drawn up a shortlist of up to 12 airlines which they hope to buy or merge with once their own tie-up has been completed.BA boss Willie Walsh did not name any of the airlines potentially involved.However they are reported to include carriers in emerging markets such as India or China.He made the comments in Mumbai while unveiling a code-sharing deal with India's Kingfisher Airlines.
• Germany's coalition government has decided to extend the life span of the country's nuclear power plants by an average of 12 years, officials say.Under the agreement, some plants will now remain in production until the 2030s, instead of being phased out by 2021 as the previous government wanted.There will also be new fees on utility companies to fund renewable energy.Chancellor Angela Merkel argued that renewable sources are not developed enough to abandon nuclear power.
• Google has proposed paying $8.5m (£5.5m) to settle a lawsuit brought over its Buzz social network.Launched in February, Buzz enrolled all Gmail users into a social network based around their contacts.The service was criticised because users initially had relatively little control over who could see their network of contacts.Several Gmail users took Google to court over Buzz saying the network violated personal privacy.
• China is checking the qualifications of all its commercial pilots, after it emerged that more than 200 of them lied about their experience.The revelation follows an investigation last year by the Civil Aviation Administration of China (CAAC).Half the pilots worked for the parent company of an airline involved in a recent fatal plane crash.Shenzhen Airlines is the parent company of Henan Airlines, whose aircraft crashed last month killing 42 people.Fifty-four passengers and crew survived the crash, in which the plane missed the runway.
• There is no longer any justification for the UK's EU budget rebate - worth about 6bn euros (£5bn) last year, the EU budget commissioner says.Janusz Lewandowski told the German daily Handelsblatt that UK income per head had grown markedly since former prime minister Margaret Thatcher negotiated the rebate in 1984."The rebate for Britain has lost its original justification," he said.Next year the UK rebate will fall to about 3bn euros, he added.
• Severstal, Russia's largest steel producer, returned to profit in the second quarter, but missed analysts' expectations.It made a net profit of $192m (£125m) between April and June. It made a loss of $290m in the same period in 2009.The profit was hit by a loss from Severstal's discontinued Italian operations, which are up for sale.Severstal also said that restructuring its loss-making US assets was "the highest priority" for the company.
• Shares in Australia's biggest investment bank, Macquarie, fell sharply after the company cut its profits forecast.Macquarie said weak global markets were hitting earnings at its key units, including currencies and commodities.First-half profits would be 25% lower than the same period a year earlier, the bank said. Analysts had been expecting an 11% rise.At one point the shares were down by 8%, although they finished down 4.7%.

BBC Business News 6th September 2010

Weekly Market Summary

by Raymond Chatlani


Federal Reserve Chairman Ben Bernanke said lastFriday that the central bank was ready to step in if the U.S. economy showed further signs of weakening. Bernanke's comments sparked a stock market rally, with the Dow Jones industrial average jumping 1.7 percent Friday.
All major Asia stock markets followed the U.S. lead and rose Monday. They also got a boost from Japan's central bank deciding at an emergency board meeting to further ease monetary policy by extending more cheap loans to financial institutions. With UK markets closed, European bourses slid on worries over the outlook for the global economy. Wall street fell amid pessimism about the US economy as a report showed that personal incomes rose less than expected in July.
On Tuesday, Asian markets followed Japan's Nikkei 225 which fell on sentiment of a stronger Yen which erodes the earnings of Japanese exporters. This was caused by disappointment on Monday over the Japanese Central Bank's decision to ease monetary policy by expanding a low-interest low programme. Markets had been hoping for stronger action. European stocks closed mixed as investors fretted about lingering worries over the health of the U.S. economy ahead of key macroeconomic data. US indices closed flat and Latin American markets rose on a surprise jump in consumer confidence in the USA.

On Wednesday, Asian indices rose due to optimism on China's growth as China's official purchasing managers' index rose to 51.7 in August from a 17-month low of 51.2 in July, while Australia's economy grew a stronger-than-expected 1.2 percent in the second quarter. European markets were well up as Asia's data alleviated worries about a global economic slowdown and on signs of stronger US manufacturing data. US markets rose as investors reacted very positively to the improvement in manufacturing data in both China and the USA.

On Thursday, Asian markets strengthened as investors increased their risk appetite as they felt that the global economy is not slowing as quickly as feared. European indices closed mixed as the Bank of England and the EU Central Bank kept base rates at 0.5% and 1% respectively. US stocks rose after the National Association of Realtors said Thursday that the number of buyers who signed contracts to purchase homes rose 5.2 percent in July after hitting a record low in June.

On Friday, Asian stocks squeezed higher but gains were tentative ahead of important US jobs data which would be reported later in the day. US unemployment jumped to 9.6 percent in August, the Labor Department said on Friday, showing the recovering economy is still struggling to create jobs. The department said the economy lost 54,000 jobs last month, a better figure than the 120,000 loss expected by economists. Both European and US markets were up.

This was a positive week for equities and commodities with the exception of the price of crude oil which remained neutral. This was due to improving data on manufacturing in the USA and China and an unexpected rise in sales of previously owned homes and a pick up in factory orders in the USA and that US unemployment fell less than expected. Investors sentiment is changing towards the acceptance that there is less chance of a double dip as data is not as bad as feared.

Data this week shows that the global economy is still growing but at a slower pace. The chances of a double dip recession have lessened considerably based on economic statistics that were reported this week. It looks like the markets will continue going up and down throughout the rest of the summer.

Hollingsworth Daily Post

• The United Nations' food agency has called a special meeting of policy makers to discuss the recent rise in global food prices.The announcement came after Russian Prime Minister Vladimir Putin extended the country's ban on grain exports on Thursday.This added to fears that prices of food staples would continue to rise.The meeting will take place on 24 September, probably in Rome, the UN Food and Agriculture Organization said.
• BP says the cost of its Gulf of Mexico oil spill has risen to $8bn (£5.2bn) - a rise of more than $2bn in the last month alone.The company said it had paid out about $399m in claims to those affected by the spill.Last week, responsibilty for the claims was transfered to the Gulf Coast Claims Facility (GCCF), which has so far paid out a total of $38.5m.Plans to permanently seal the well were also progressing well, BP said.The final sealing of the well is now expected to be completed later this month.
• HSBC may move from London if the UK government decides to break up big banks, a senior executive has said.Stuart Gulliver, head of the Canary Wharf-based bank's investment banking division, made the warning at a banking conference.He said he was "genuinely concerned" that the UK's banking commission would recommend splitting up banks."[That] has significant implications clearly for where we may choose to headquarter our institution.""I want to be crystal clear. Our preference is to be headquartered in the UK," added Mr Gulliver.He also noted that no other country was looking at breaking up banks in response to the 2008 financial crisis.
• Chinese investors have approached a Canadian pension fund about a possible rival bid for the fertiliser giant Potash Corporation.Alberta Investment Management said it was not interested in a rival bid and did not name the investors involved.Potash Corporation is currently the subject of a $40bn (£25.8bn) hostile takeover bid from Anglo-Australian mining giant BHP Billiton.The firm is based in the Canadian province of Saskatchewan.Potash - or potassium carbonate - is mined in the province and used for fertiliser production worldwide.
• Russia will consider lifting its grain export ban only after the next year's harvest has been reaped, Russian Prime Minister Vladimir Putin has said.Mr Putin did not say when exactly the ban, originally introduced from 15 August to 31 December, would be lifted.Global wheat prices have risen by 1.4% on Thursday, after gaining more than 3% during the previous session.Russia, one of the world's biggest producers of wheat, barley and rye, was hit hard by a drought this summer.
• The European Union has reached agreement on reforms to financial supervision, officials have said.EU states and the European Commission agreed to create agencies that from next year are to oversee banks, insurers, and financial markets.The deal must still be approved by European finance ministers and the European Parliament.Europe's move follows the sweeping Wall Street reforms that President Barack Obama signed into law in July.It is hoped the agreements in Europe and the US will help stop a repeat of the financial crisis in which loose supervision of companies was blamed for contributing to problems.
• The government of Mozambique says price rises which have led to riots in the capital Maputo are "irreversible".The comments came after an emergency cabinet meeting on the two days of unrest in which seven people have died.Troops have been deployed to help clear up the debris while text messages are reported to have been circulating urging people to continue protesting.

BBC Business News 3rd September 2010