IMF: Impact of China slowdown larger than expected

China's economic slowdown is having a broader impact on the global economy than originally expected, especially on emerging markets, the International Monetary Fund said late on Wednesday. 

PHOTO: REUTERS

SEP 3, 20158:11 AM

[WASHINGTON] China's economic slowdown is having a broader impact on the global economy than originally expected, especially on emerging markets, the International Monetary Fund said late on Wednesday.

In a report for Group of 20 finance chiefs meeting this week in Ankara, the IMF said the turmoil in China and other factors like capital flow reversals were increasing the risks to economic growth around the world.

It warned that advanced and emerging economies need to continue to support demand with reforms and investment to ensure that the turbulence in markets and China's troubles do not stall economic activity in the rest of the world.

"China's transition to a lower growth, while broadly in line with forecasts, appears to have larger-than-previously-envisaged cross-border repercussions, reflected in weakening commodity prices and stock prices," the Fund said.

Especially, "near-term downside risks for emerging economies have increased" from China-related fallout, sinking commodity prices, the strong US dollar, and sharp reversals in financial markets, it said.

The report, which will be used for discussion at the meeting on Friday and Saturday of the finance ministers and central bankers from the G20 leading economies, did not revise the IMF's previous estimate for global growth this year of 3.3 per cent.

But earlier this week IMF Managing Director Christine Lagarde said in Indonesia that global growth would be "likely weaker" than forecast.

"Now the situation is changing yet again, and we are all feeling the impact of China's rebalancing and moving to a revised business model," she said.

The report expressed continued confidence that growth is picking up "modestly" in advanced economies in the second half of 2015 and in 2016, helped by the impact of cheaper oil.

But the oil price plunge, along with other commodities, is hurting emerging market economies, and they are also being buffeted by the impact on their currencies of China's renminbi devaluation and the strong dollar.

The dollar's strength, the Fund warned, could take a toll on companies with dollar liabilities.

The Fund highlighted an increase in risks to overall global growth: that China would not confront its slowdown with growth-supporting policies; that commodity prices would slide further; that the US dollar would continue to rise; and that companies would suffer from higher debts.

"Simultaneous materialisation of some of these risks would imply a much weaker outlook," the Fund said.

It recommended that advanced countries stick to very loose monetary policies and maintain "growth-friendly" fiscal policies.

It also stressed structural reforms that would free up various markets and encourage investment and consumption.

In emerging economies, choices are tougher, and leaders "need to strike an appropriate balance between fostering growth and managing vulnerabilities."

AF
P

Fed's Beige Book says US economy expanded across most regions

The US economy expanded across most regions and industries in July and August, a Federal Reserve report showed, as tighter labor markets boosted wages for some workers. 

PHOTO: REUTERS

SEP 3, 20157:54 AM

[WASHINGTON] The US economy expanded across most regions and industries in July and August, a Federal Reserve report showed, as tighter labor markets boosted wages for some workers.

Six of 12 Fed districts reported "moderate" growth, and five others said expansion was "modest," according to the Beige Book, released on Wednesday (Sept 2). The survey is based on reports gathered on or before Aug. 24 by regional Fed banks.

The report gives central bank officials, who next meet Sept 16-17, an anecdotal picture of growth as they consider lifting interest rates in an environment colored by market volatility and slowing growth in China.

Boston, San Francisco and Dallas districts specifically referenced the China slowdown as a source of weaker demand for some products, including chemicals, wood products and high-tech goods. The word "China" or "Chinese" was mentioned 11 times. It was not mentioned in July's report."Most districts reported modest to moderate growth in labour demand," the Beige Book said, with this tightening in labour markets pushing up wages slightly in some industries, especially in the New York, Cleveland, St. Louis and San Francisco districts.

The Beige Book also showed that manufacturing activity was mostly positive, with only the New York and Kansas City Fed districts seeing declines.

Looking at the Beige Book overall, "from the Fed's perspective, this shouldn't change things one iota," said David Ader, head of government bond strategy at CRT Capital Group. "The labour markets continue to do a little bit better, inflation continues to look a little bit weaker." The US economy expanded at a 3.7 per cent annualised rate in the second quarter, an Aug 27 report showed, and employment has been rising at a steady clip. Officials will gain an additional month of labour data when August figures are released Friday in Washington.

While domestic economic data have been strong, global equity markets have been volatile in recent weeks, and weaker Chinese growth is clouding the international outlook. China surprised investors on Aug 11 by devaluing the yuan and aligning its exchange-rate policy more with market forces, stoking speculation that the world's second-largest economy may be slowing more than expected.

Manufacturing in the US expanded in August at the slowest pace since May 2013 as a lack of demand from emerging markets, such as China, translated into weaker factory orders. The Institute for Supply Management's index fell to 51.1 from 52.7 in July, a Sept 1 report showed.

The unemployment rate has dipped to 5.3 per cent, down from a 10 per cent peak in 2009, as companies continue to hire workers. As the Fed weighs when to lift interest rates, policy makers are still looking for signs that inflation will move up toward their 2 per cent goal. Their preferred gauge of prices rose just 0.3 per cent in July from a year earlier.

Forty-eight per cent of 54 economists surveyed Aug 27-31 by Bloomberg News expect a September increase in the benchmark lending rate, down from 77 per cent in an Aug 7-12 survey. About one-fourth say the Fed will lift off in December, while 17 per cent said October.

BLOOMBERG

    
 

Obama hails ties with Japan on 70th anniversary of end of WWII

US President Barack Obama speaking during an arrival ceremony on the South Lawn of the White House with Japan's prime minister Shinzo Abe, in Washington, DC, on April 28, 2015. 

PHOTO: BLOOMBERG

SEP 3, 20157:23 AM

[WASHINGTON] US President Barack Obama used the 70th anniversary of the end of World War II in the Pacific to honour the US war dead and herald remade ties with Japan on Wednesday.

Saluting "the Greatest Generation" of US soldiers who fought - a group which included Obama's maternal grandfather - Mr Obama said today's US-Japan partnership was "unimaginable" 70 years ago.

"We remember those who endured unimaginable suffering as prisoners of war, and we honor the ultimate sacrifice of more than 100,000 US service members who laid down their lives in the Pacific theater to defend our nation and advance the cause of freedom," Mr Obama said in a statement.

"We live in freedom because of their brave service." Amid anger from China and others over Prime Minister Shinzo Abe's alleged refusal to sufficiently atone for Imperial Japan's actions during the war, Mr Obama markedly praised his counterpart in Tokyo.

"As Prime Minister Abe and I noted during his visit in April, the relationship between our two countries over the last 70 years stands as a model of the power of reconciliation."

"Seventy years ago this partnership was unimaginable. Today it is a fitting reflection of our shared interests, capabilities, and values, and I am confident that it will continue to deepen in the decades to come."

AFP

    
 

China to flex military muscle in WWII parade

Soldiers of China's People's Liberation Army march with their weapons during a training session for a military parade to mark the 70th anniversary of the end of World War Two, at a military base in Beijing on Sept 1 this year. 

PHOTO: REUTERS

SEP 3, 20156:59 AM

[BEIJING] A huge military parade rolls through Tiananmen Square on Thursday as Beijing commemorates the 70th anniversary of Japan's WWII defeat, but major Western leaders are staying away from the show of strength.

President Xi Jinping will oversee the spectacle featuring 12,000 Chinese soldiers, 500 pieces of hardware and almost 200 aircraft, which comes as Beijing takes a more assertive diplomatic stance.

Key leaders from Western democracies will be absent, such as US President Barack Obama, German Chancellor Angela Merkel and Japanese Prime Minister Shinzo Abe, who has drawn Beijing's ire for beefing up his country's security policies.

Mr Xi is China's commander-in-chief as the chairman of the Communist Party's Central Military Commission, since the People's Liberation Army (PLA) is technically the armed force of the Party.

Under him, Beijing is moving farther away from former leader Deng Xiaoping's dictum to "hide one's capabilities, bide one's time" and is becoming more willing to take harder lines, both externally and against domestic opponents.

It is engaged in high-profile maritime disputes with neighbours in the South China Sea, where it is building artificial islands and facilities with military uses, and with Japan over disputed outcrops.

John Delury, an expert on China at Yonsei University in Seoul, told AFP the limited international guest list was because "it's a very nationalistic and militaristic event".

"Across Asia and certainly in the United States there are all these concerns about the hard power side of China's rise," he said.

MILITARY DISPLAY

The PLA has promised that 84 per cent of the equipment on display will be seen in public for the first time.

According to state media, carrier-based aircraft, long distance bombers and various missiles will be shown - possibly including the DF-21D, a long-rumoured ballistic "carrier-killer" that could change the balance of power in the Pacific Ocean.

But Chinese foreign ministry spokeswoman Hua Chunying said those viewing the parade as an aggressive gesture had "a mentality that is not so bright".

"The Chinese troops are troops for peace" she told a regular briefing. "The stronger this kind of force grows, the more guarantees it will be able to provide for world peace." Almost 1,000 foreign soldiers will also take part, including a Russian detachment, and President Vladimir Putin is by far the most high-profile foreign leader.

Mr Xi went to a similar event in Moscow in May, which was also shunned by major Western leaders over the annexation of Crimea and fighting in eastern Ukraine.

More mainstream guests include South Korea's Park Geun-Hye, whose country was colonised by Japan, Jacob Zuma of South Africa - which with China is part of the BRICS groups of major emerging economies - and UN Secretary General Ban Ki Moon. French Foreign Minister Laurent Fabius will also attend.

China has held military parades roughly once a decade but previously for the foundation of the People's Republic on October 1.

Thursday's parade comes the day after Japan formally surrendered 70 years ago on the USS Missouri in Tokyo Bay, which Beijing marks as the end of the "Chinese People's War of Resistance against Japanese Aggression and the World Anti-Fascist War", as it officially calls the conflict.

AFP

    
 

Economists cut 2015 Singapore growth forecast to 2.2%

More downgrades likely, they say, as manufacturing remains a drag

By

Kelly Taykellytay@sph.com.sg@KellyTayBT

Exterior of the Monetary Authority of Singapore building 18, Aug 2015 

ST PHOTO: KUA CHEE SIONG

 Another contraction

 Forecasters' expectations

SEP 3, 20155:50 AM

Singapore

SINGAPORE'S forecasters have tempered both their growth and inflation forecasts for 2015 - and some say more downgrades are in store. This is especially after the latest manufacturing data deepened worries about a possible technical recession in the third quarter.

Private-sector economists now expect the economy to grow just 2.2 per cent this year - down from the 2.7 per cent projected a quarter ago. They are also more pessimistic on the outlook for the manufacturing and construction sectors, and most services clusters.

This is according to the Monetary Authority of Singapore's (MAS) September issue of its Survey of Professional Forecasters. The quarterly poll was sent out on Aug 11 and received 23 responses; findings were released on Wednesday.

"This survey was conducted prior to the recent slew of dismal August emerging market Asia PMIs (Purchasing Managers' Indices) . . . so growth risks are definitely skewed to the downside," said ANZ economist Ng Weiwen.

Like other depressed regional readings, both the manufacturing and electronics PMIs for Singapore slipped further into contraction mode in August, although the drops were not unexpected.

Overall PMI sank 0.4 point to 49.3, as new orders, new export orders, production output as well as input prices showed a further contraction. Private-sector economists polled by Bloomberg had earlier projected a reading of 49.4, down from July's 49.7.

A reading above 50 denotes growth, while one under 50 points to a contraction in the manufacturing sector.

The electronics PMI stayed below the 50-point mark in August as well, dropping 0.5 point to 49.0 - exactly at the market's forecast.

The electronics readings indicated a further decline in new orders from domestic and overseas markets. "Production output contracted further and inventory reverted to contraction after having moderated in the earlier month," said the Singapore Institute of Purchasing & Materials Management (SIPMM), which compiles the index monthly from a survey of more than 150 manufacturing firms' purchasing managers.

Noted OCBC economist Selena Ling: "The weak August domestic manufacturing PMI readings are consistent with the recent global manufacturing PMI cues, which suggested that momentum is cooling again in Q3 and puts Singapore's manufacturing sector squarely in the sub-50 PMI camp together with China, Taiwan, South Korea, Malaysia and Indonesia.

"As such, the drag from the dismal July industrial production data may extend into August, even September, which in turn could raise the odds for a technical recession in Q3 - should the other engines of growth, namely services, also falter amid the ongoing pullback in consumer and business sentiments due to China and FOMC-related (US Federal Open Market Committee-related) uncertainties."

August's gloomy PMI readings provided more evidence for a worsening economic outlook, which was reflected by professional forecasters in MAS's September poll. For Q3, respondents expect gross domestic product (GDP) to expand 2.1 per cent - a significant drop from the 2.9 per cent forecast in the June survey.

Manufacturing is now expected to contract 2.7 per cent this year, compared to an earlier projection of 0.5 per cent growth. Growth forecasts in the construction and finance & insurance sectors have also been cut, to 2.3 per cent and 6.6 per cent respectively (from 3.3 per cent and 7 per cent before). Accommodation & food services is expected to contract -0.1 per cent, versus an earlier projection of 1 per cent growth.

The only spot of optimism was reserved for the wholesale & retail trade sector, which is now expected to grow 4.8 per cent, up from the 3.3 per cent quoted in the June survey. Even so, CIMB Private Banking economist Song Seng Wun said: "I think forecasters were just overly-pessimistic on wholesale & retail trade previously, and they're now re-aligning their projections - it's not that anything has improved."

At 2.2 per cent, private-sector economists' full-year growth projection falls within the government's forecast. According to the Ministry of Trade and Industry (MTI), the Singapore economy should expand between 2 and 2.5 per cent in 2015 - a narrowed forecast from its previous 2-4 per cent projection.

But Mr Song, Mr Ng and DBS economist Irvin Seah believe the market's 2015 growth projection will likely be pared down further in the near future.

"The 2.2 per cent figure shows that the market is not factoring in the possibility of a technical recession yet. If that is factored in, the projection would have to be below 2 per cent - that would translate into a quarter- on-quarter contraction," said Mr Seah.

"Do not discount the possibility that (full-year growth) may even fall below the official forecast range, because I think the drag from the manufacturing sector is becoming more and more severe. There will also be the knock-on effect from manufacturing to other tradeable services."

As for 2016 growth, respondents expect the economy to expand 2.8 per cent.

   
 

SINGAPORE GENERAL ELECTION

Candidates must have heart in right place: PM

He says at PAP's first rally that being able to care about people is more important than IQ or CV

By

Lee U-Wenleeuwen@sph.com.sg@LeeUwenBT

Mr Lee at PAP's first rally in Tiong Bahru on Wednesday evening. With him were the PAP candidates for Tanjong Pagar GRC and Radin Mas single-member constituency. Mr Chan Chun Sing (seated, third from right), who helms the Tanjong Pagar team, urged voters to pick a team that would work with the people to keep Singapore thriving for 50 years and even more. 

PHOTO: ONG WEE JIN / THE STRAITS TIMES

SEP 3, 20155:50 AM

Singapore

WHEN it comes to finding suitable candidates to enter politics, the People's Action Party (PAP) looks beyond just a person's intellect or credentials.

More importantly, said Prime Minister Lee Hsien Loong at his party's first election rally on Wednesday evening, is whether the person's heart is firmly in the right place.

"The IQ we can find out, the CV we can read. But the heart, we have to find out. How? We ask other people - superiors, subordinates, friends, the public," he told the crowd at the Delta Hockey Field in Tiong Bahru.

"When we put you on the ground, we take a look and get feedback. If he's not very caring about people or not interested, then we have to think again."

Mr Lee, the PAP's secretary-general for the last 11 years, was the last of nine speakers at the two-hour event attended by more than 3,000 people. He spoke for about 40 minutes in Malay, Mandarin and English.

Also present were the party's five candidates for Tanjong Pagar group representation constituency (GRC) - Chan Chun Sing, Indranee Rajah, Chia Shi-Lu, Joan Pereira and Melvin Yong - along with Sam Tan, who is contesting the Radin Mas single seat.

In politics, Mr Lee said, a person cannot afford to be selfish or cover up issues, or delay coming up with solutions to problems and push the responsibility to others instead.

Without naming anyone specifically, he said there were candidates elsewhere with "flawed characters" who should never be in politics.

"But they just sweep it aside. They hope that after some years, slowly it will disappear into the distance (and be) forgotten.

"Then they say, 'We look forward! Please don't look behind me or you might find my black tail'," he said to a mix of cheers and laughter.

He stressed the importance of having high standards of politics in Singapore, with candidates of strong calibre in place and doing their best to serve the country well.

In order for the government to continue its work in key areas such as housing and health care to improve the lives of the people, the PAP needed the support of voters at the Sept 11 general election, he said.

"Without that, you have good men but they cannot get elected or get the support for the policies that they need to do. Then, we have a problem."

In Tanjong Pagar, where the late founding prime minister Lee Kuan Yew served as a Member of Parliament for 60 years until his death in March, the PAP made sure there was a strong team supporting him at all times and ready to take over after his passing.

Next week's general election (GE) will be the first time Tanjong Pagar will experience an electoral contest since the GRC was formed back in 1991.

The PAP's opponents there are the new Singaporeans First party, led by secretary-general and former presidential candidate Tan Jee Say.

Mr Chan, the anchor minister in Tanjong Pagar, hailed Mr Lee Kuan Yew's legacy of sustaining the trust between the government and the people, and called on Singaporeans to build on that.

"We are not happy and contented to be normal. We are determined that, even with our finite resources, we will continue to be special," said Mr Chan, a Minister in the Prime Minister's Office and the current labour chief.

"Never believe people who tell you that they want to make Singapore ordinary. If Singapore is ordinary and run-of-the-mill, who will come here to invest? Who will come to create jobs?"

He urged voters to choose a team of leaders that will put Singapore in good standing on the international stage and send a message that Singapore has a cohesive team in place between the PAP and the people.

"When the PAP and the people are together as one, that's the biggest confidence boost that we can give to anyone looking at us, to tell them that, fear not, Singapore will thrive for 50 years and even more," he said.

Six rallies are scheduled for Thursday evening, with the PAP holding one each in Pasir Ris-Punggol GRC and East Coast GRC.

The Workers' Party, Singaporeans First and the Singapore Democratic Party will also have their own rallies, as will independent candidate Han Hui Hui in Radin Mas.

All political parties taking part in the GE - with the exception of the new People's Power Party (PPP) - will get air-time on free-to-air radio and TV on Thursday for the first of two planned party political broadcasts.

Since the 1980 GE, parties which field at least six candidates under a recognised party symbol have been eligible for air-time. The PPP does not qualify as it is fielding just four candidates.

The two independent candidates, Ms Han and Samir Salim Neji, are also not eligible
.

Chinese stocks stage a miraculous late day rally

• David Scutt, Business Insider Australia
 

• 14h

In another wild session, Chinese stocks on Wednesday finished the trading week mixed, disappointing those who had been expecting a mammoth market rally before the nation breaks for a two-day holiday to commemorate the 70th anniversary of the end of World War II.

The benchmark Shanghai Composite index finished the day at 3,155.04 points, a decrease of 0.37%. Earlier in the session the index was down more than 4% before staging a miraculous late rally into the close, yet again.

The five-minute chart below tells the story.

Investing.com

All sectors except financials and utilities closed lower, with energy — following Tuesday night's rout in the crude-oil price — suffering the largest decline at 3.25%.

The late jump in financials — finishing the session up over 2% — yet again suggests the government, along with the so-called national team, was actively intervening in the market to ensure that large-cap stocks finished higher before Thursday's V-Day military parade.

Lending weight to this theory, large-cap stocks outperformed their smaller peers yet again.

The SSE 50, made up of the largest listed firms in Shanghai, closed up 0.39%, while the CSI 300, containing top firms by market capitalisation in Shanghai and Shenzhen, inched higher by 0.11%.

The former has now finished higher for six consecutive sessions, its longest winning streak since late May.

While large caps staged yet another miraculous late recovery, small caps were once again left wallowing in negative territory.

The CSI 500, containing small-cap stocks listed in Shanghai and Shenzhen, fell 0.76%, having fallen by more than 6% on Tuesday. Indexes with similar traits — the Shenzhen Composite and the tech-heavy ChiNext — slid by about 2%.

Chinese markets will are now closed for the rest of the week.

With no market gyrations to distract markets over coming days, all that's left to do is to enjoy the blue skies and Thursday's military parade.

Read the original article on Business Insider Australia. Copyright 2015.

IMF'S LAGARDE: We just witnessed how problems in one Asian economy can spill over the rest of the world

• Reuters

• 16h

Thomson ReutersInternational Monetary Fund (IMF) Managing Director Christine Lagarde gestures during a speech at a public lecture at the University of Indonesia in Jakarta.

See Also

Greece is turning into a 'zombie' state that exists solely to pay off debts

The head of the International Monetary Fund is seeing weaker-than-expected global economic growth

These are the 25 stocks hedge funds have been shorting like crazy

JAKARTA (Reuters) - Recent volatility in global financial markets shows how rapidly risks can spill over from one economy to the next, the managing director of the International Monetary Fund (IMF) said in Jakarta on Wednesday.

"What has been demonstrated in the last few weeks is how much Asia is at the core of the global economy, and how much disruption in one market in Asia can actually spill over to the rest of the world," Christine Lagarde told a conference in Indonesia's capital.

Lagarde said the world economy was facing headwinds from China's rebalancing, Japan's slow growth, falling commodity prices and uncertainties surrounding higher U.S. interest rates.

Policies need to be tailored to each country, Lagarde said, but mostly they would involve strengthening defenses with prudent fiscal policy, reining in excessive credit growth, aligning exchange rates to act as shock absorbers, and maintaining adequate foreign exchange reserves.

"The authorities and the supervisors constantly have to remain vigilant particularly when there are those new and innovative products...those risks have to be under the watch of the supervisors, be they in traditional banking, be they in these disruptive banking systems or in these shadow banking systems," Lagarde said.

(Reporting By Randy Fabi, Gayatri Suroyo and Nicholas Owen; Editing by Muralikumar Anantharaman)

China stock probes send shivers through investment community

Pete Sweeney and Engen Tham, Reuters
7:34 AM, E.T. | September 2, 2015
International

Tags: China, Investing

Follow this

Investigations by Chinese authorities into wild stock market swings are spreading fear among China-based investors, with some unsure if they are simply helping with inquiries or actually under suspicion, executives in the financial community said.
Chinese fund managers say they have come under increasing pressure from Beijing as authorities’ attempts to revive the country’s stock markets hit headwinds, with some investors now being called in to explain trading strategies to regulators every two weeks.
Ironically, the impact may be the opposite of what is intended. By frightening fund managers, Beijing risks accelerating the market selloff and puts other wider policy goals, including the increased use of the yuan abroad, at risk.
One manager at a major fund – part of the “national team” of investors and brokerages charged with buying stocks to revive prices – said a friend, also an executive at a large fund, was recently summoned for a meeting with regulators, along with all other mutual funds that had engaged in short-selling activity.
“If I don’t come back, look after my wife,” his friend told him, handing the manager his home telephone number.
China has unleashed a volley of measures to try to prop up its stock markets that have fallen around 40 per cent since mid-June, pushing domestic brokerages and fund managers to buy up shares and banning investors with large stakes from selling their holdings for six months.
The authorities’ meddling has unnerved many investors, leaving them questioning China’s commitment to liberalizing its capital markets and the long-term future of the country’s stock markets themselves.
Adding to those concerns is the fact that authorities have also been probing investment funds’ trading strategies, looking into whether they have been engaging in alleged “malicious” short-selling or market manipulation.
On Monday, Bloomberg reported that Li Yifei, the China chairwoman of Man Group Plc, one of the world’s largest hedge funds, had been taken into custody to help with inquiries.
Reuters has not independently confirmed the report, while Li’s husband has said she is having “normal” discussions with regulators. Man Group shares fell as much as 6 per cent on Tuesday following Bloomberg’s story.
FOREIGN FUND FEARS
Sources told Reuters that the increased tempo of meetings with regulators has become intimidating, especially for foreign funds used to relying on their Chinese brokers to represent them when dealing with Beijing.
While foreign investors are unlikely to be a major factor behind stock market swings, given their relatively low participation in the market compared with domestic players, they are seen as more politically vulnerable to investigations.
“The foreign fund community definitely feels like it is being monitored more carefully than it’s been in a very long time,” said one foreign fund manager.
“Nobody is pointing at you and saying you are doing anything illegal. But it’s enough to ask people to walk through all their trades, and ‘why is this account trading so much?’ That ramps up the pressure.”
Some Chinese believe the collapse in Chinese stocks was engineered by foreigners, and there has been speculation that it was caused by the U.S. government to embarrass China as the International Monetary Fund (IMF) considered including the yuan in its currency basket.
Some market participants have also said that gyrations in Chinese shares could lead to U.S. index provider MSCI further delaying the inclusion of A-shares in its benchmark emerging markets index.
If implemented, the inclusion would draw hundreds of billions of dollars into Chinese stocks and strengthen the yuan’s global stature.
MSCI said on Tuesday that recent volatility in Chinese shares, and the authorities’ interventions to stop the rout, would not be a factor in deciding whether to include China-listed shares.
There are no signs yet that pressure has caused foreign funds to withdraw from the market altogether or pull out staff from the country.
But fund experts say there is a risk that if foreign investors feel intimidated enough that they can no longer employ trading strategies to allow them to profit from volatility, they may eventually have little choice but to leave, for the short term at least.
“This crisis has highlighted the need for a China-specific investment model. Simply porting strategies that worked in the U.S. is not feasible,” said Daniel Celeghin, a consultant to hedge funds as Head of Asia Pacific for Casey Quirk based in Hong Kong.
For Chinese funds though, the option to pack up and leave isn’t there, and if the volatility continues, the pressure on them is likely to intensify.
The “national team” fund manager said that as well as meetings with regulators, they are now calling him every day to ask how much he is selling and buying.

US gives antitrust approval to Nikkei's purchase of Financial Times

SEP 2, 201511:49 PM

[WASHINGTON] Japan's Nikkei media group won US antitrust approval for its US$1.3 billion purchase of the Financial Times from Britain's Pearson PLC, the Federal Trade Commission said on Wednesday.

The transaction was on the list of deals that the FTC and Justice Department granted "early termination," essentially quick antitrust approval.

Nikkei's purchase of the Financial Times marks the culmination of decades of attempts to break into mainstream English-language media.

Nikkei, whose flagship newspaper enjoys a must-read reputation for financial news in Japan, previously had a years-long alliance with Wall Street Journal publisher Dow Jones, which ended in the last decade.

REUTERS

German carmakers win US antitrust approval to buy Nokia maps

SEP 3, 201512:06 AM

[WASHINGTON] German carmakers BMW , Audi and Mercedes have won US antitrust approval to buy Nokia's maps business for around 2.5 billion euros (US$2.8 billion), the Federal Trade Commission said on Wednesday.

The deal, which was announced in early August, was on the FTC's list of uncontroversial transactions which won approval from the FTC or the Justice Department. The two agencies share the work of antitrust enforcement.

Germany's three premium carmakers will hold equal stakes in the business, known as HERE, and may allow automakers to offer new premium features, like autonomous driving, in luxury cars, shaking up the pecking order between car makers, their parts suppliers and software rivals like Uber and Google.

HERE's primary competitor is Google Maps. In addition, it competes with smaller Dutch mapping firm TomTom. HERE was created by Nokia following the US$8.1 billion acquisition of Navteq in 2008.

REUTERS