Tuesday, December 1, 2015

Singapore shares open higher on Wednesday after Wall Street rises

Singapore shares open higher on Wednesday after Wall Street rises

SINGAPORE'S benchmark Straits Times Index was at 2,895.17 points at 9.07am on Wednesday, up 24.91 points or 0.87 per cent.
This was after Wall Street gained despite weak US manufacturing data showing that the sector contracted last month.
In Singapore, some 72.6 million shares worth S$102.7 million were traded, with gainers outnumbering losers 90 to 39.
Top stocks by value traded were Global Logistic Properties, CapitaLand, DBS, Singtel and OCBC.

US House blocks carbon emission rules, Obama set to veto

US House blocks carbon emission rules, Obama set to veto 

[WASHINGTON] US House Republicans voted on Tuesday to block President Barack Obama's regulations on reducing greenhouse gas emissions - a move certain to spark his veto - as negotiators work on a global climate deal in Paris.
The two measures, rolling back the Environmental Protection Agency's new emission rules for existing and new power plants, passed the chamber largely along party lines, with all but four Democrats opposed to each.
The so-called disapproval resolutions, which already passed the Republican-controlled Senate, dealt a largely symbolic yet harsh rebuke to Mr Obama, who attended the start of a major UN climate summit in the French capital.
The White House has said Mr Obama would veto the resolutions and Congress does not appear to have sufficient votes to override the veto.
Many conservatives in Congress deny that climate change is a result of human industry and agriculture, and have opposed emissions controls designed to slow global warming.
The far-reaching regulations form a core of Mr Obama's efforts to reduce overall US greenhouse gas emissions.
Republicans seemed almost gleeful at the prospect of blocking Mr Obama's emissions rules just as international negotiators sought to tame global warming.
"We want the House to adopt this resolution while the climate change conference is going on in France so that the world will know that in America there is a disagreement about the extreme power grab that this president is initiating under his clean energy plan," Republican Ed Whitfield said shortly before the votes.
The EPA rules incensed Republicans, including Senate Majority Leader Mitch McConnell, who is from the coal-producing state of Kentucky, when the White House announced Mr Obama's Clean Power Plan in August.
They argue that the economic cost of the endeavor, particularly in coal mining states, would cripple industry and hike energy costs for millions of Americans.
Under the rule, the power sector's carbon dioxide emissions will have to be cut by at least 32 per cent below 2005 levels by 2030.
AFP

Australia economy gathers pace on export boost

Australia economy gathers pace on export boost 

[SYDNEY] Australia's economy gathered pace last quarter as a surge in exports and solid consumer spending offset a heavy drag from slumping business investment, adding to the case against another cut in interest rates.
The local dollar edged higher after the Australian Bureau of Statistics reported gross domestic product (GDP) expanded by 0.9 per cent in the third quarter, from the previous quarter when it rose just 0.3 per cent.
The value of all goods and services was up 2.5 per cent from a year earlier, topping forecasts of 2.4 per cent and ahead of that poster child of economic recovery - the United States. "This is not a bad outcome," said Reserve Bank of Australia (RBA) Governor Glenn Stevens, who happened to be giving a speech in Perth when the data was released.
The central bank again left rates at 2 per cent at its December policy meeting this week, citing signs activity was picking up, helped by past cuts and a low local currency.
Interbank futures are showing around a one-in-five chance of a cut when the RBA next meets in early February.
Overall, the Australian Bureau of Statistics reported the value of goods and services produced was worth A$1.6 trillion (S$1.76 trillion) in current dollars.
While the country has not suffered a full blown recession since 1991, it has been running below potential for some years.
The Liberal National government recently acknowledged the economy's speed limit might now be nearer 2.75 per cent than the 3.0-3.25 per cent previously considered normal.
The biggest drag is from mining investment which is in full retreat after a decade of madcap expansion. Business spending took 0.6 per centage points out of GDP growth, the fifth straight quarter of falls.
Neither was the government any help, as a pullback in its investment shaved 0.4 percentage points from growth.
Yet the hundreds of billions showered on mining is producing a massive increase in resource exports, much of it to China despite all the talk of slowdown there.
As a result, net exports added a huge 1.5 per centage points to growth in the quarter. Household spending added another 0.4 per centage points.
REUTERS

Indonesia sells US$3.5b of dollar bonds to preempt Fed

Indonesia sells US$3.5b of dollar bonds to preempt Fed

[HONG KONG] Indonesia priced its second sovereign dollar bond sale of 2015 on Tuesday to preempt a likely increase in US borrowing costs.
The government issued US$2.25 billion of 10-year notes and US$1.25 billion of 30-year bonds; the 10-year debt yields 4.8 per cent while the 30-year bonds pay a six per cent yield. That's higher than the secondary market where dollar securities due January 2025 yielded 4.59 per cent as of 12.29pm in Jakarta and those due January 2045 yielded 5.72 per cent, data compiled by Bloomberg show.
"There seems to be a decent new-issue spread premium," said Tim Condon, head of Asia research at ING Groep NV in Singapore, said before the final pricing was set. Indonesia could do another offer early next year if market conditions are favourable, he said.
Indonesian authorities said last month they were planning a second dollar sale in 2015 to start raising money for next year's budget, and futures contracts show a 74 per cent chance the Federal Reserve will hike interest rates this month.
The government will increase the proportion of foreign-currency debt to 30 per cent of total issuance in 2016 from 24 per cent this year to guard against potential increases in local-currency yields as the US raises rates, Robert Pakpahan, director- general at the budget financing office in Jakarta, said Nov. 12.
BUILDING RESERVES
Indonesia last sold dollar bonds in January, issuing US$4 billion of 10- and 30-year notes at coupons of 4.125 per cent and 5.125 per cent, respectively.
Proceeds from this week's sale will bolster the central bank's foreign-exchange reserves, which have fallen 10 per cent to US$100.7 billion this year through October.
"The country wants to pre-fund ahead of a potential Fed liftoff," said Avanti Save, a credit strategist at Barclays Plc in Singapore.
"Compared to global emerging-market peers, Indonesia has stronger credit metrics and credit ratings are expected to remain stable."
Standard & Poor's said on Tuesday it would retain its rating of BB+, the highest junk level, for Indonesia after the nation increased its global medium-term note programme by US$10 billion to US$40 billion.
The rating has a positive outlook, indicating the possibility of an upgrade over the next 12 months if the government achieves more reforms such as allowing fuel prices to adjust more freely, S&P said in a statement. Moody's Investors Service and Fitch Ratings assess Indonesia at the lowest investment grade.
"Given their borrowings are relatively light already, we think that even if they go to the limit of this programme it's not going to really affect their credit rating," said Kyran Curry, S&P's director of sovereign ratings in Singapore.
Indonesia's dollar bonds have lost 1.1 per cent this year, compared with a 0.4 per cent drop for Malaysia and 3.3 per cent gain for the Philippines, according to JPMorgan Chase & Co indexes.
BLOOMBERG

New dad Zuckerberg vows to give away Facebook fortune

New dad Zuckerberg vows to give away Facebook fortune

[SAN FRANCISCO] Facebook co-founder Mark Zuckerberg on Tuesday announced he is a dad and pledged to give away his fortune to make the world a "better place" for baby daughter Max and others.
In a letter to Max posted on his Facebook page, Zuckerberg and wife Priscilla Chan said they were going to give away 99 per cent of their company shares - estimated value US$45 billion - during their lives in an effort to make a happy and healthy world.
"Max, we love you and feel a great responsibility to leave the world a better place for you and all children. We wish you a life filled with the same love, hope and joy you give us. We can't wait to see what you bring to this world," the letter said.
Mr Zuckerberg will "gift or otherwise direct" nearly all his shares of Facebook stock, or the after-tax proceeds of sales of shares, to further a mission of "advancing human potential and promoting equality" by means of activities for the public good, the California-based social network said in a filing with the US Securities and Exchange Commission.
Mr Zuckerberg "intends to retain his majority voting position in our stock for the foreseeable future," Facebook said in the SEC filing.
"As you begin the next generation of the Chan Zuckerberg family, we also begin the Chan Zuckerberg Initiative to join people across the world to advance human potential and promote equality for all children in the next generation," the Facebook chief and his wife said.
"Our initial areas of focus will be personalised learning, curing disease, connecting people and building strong communities."
AFP

Fed's Brainard calls for cautious, gradual approach to rate hikes

Fed's Brainard calls for cautious, gradual approach to rate hikes

[PALO ALTO] The Federal Reserve should go slow in raising rates, a top US central banker said on Tuesday, adding that there may be limits to the Fed's ability to tighten monetary policy while other central banks keep it loose.
With the so-called neutral interest rate in the United States now near zero and equilibrium rates in other countries around the world also lower than in the past, the Fed has less room to stimulate the economy when needed, Fed Governor Lael Brainard said in remarks prepared for delivery at Stanford University. "The new normal is likely to be characterised by a lower level of interest rates than in the decades preceding the crisis, which counsels a cautious and gradual approach to adjusting monetary policy," she said.
Indeed, weak growth abroad has pushed up the value of the US dollar, lowering the neutral rate in the United States and pushing down on domestic job creation, she said. One model in common use at the Fed suggests a 1-per centage-point cut in rates would be required over the medium term to offset the negative impact on employment of the stronger dollar, she said.
With short-term borrowing costs now near zero, "This shift down implies a delay in the date of liftoff and a shallower path for the federal funds rate over several years," Brainard said."In effect, this spillover from abroad implies some limitations on the extent to which US monetary conditions can diverge from global conditions." Slower expected US growth as the population ages and investor caution in the wake of the 2007-09 financial crisis are also pushing down on the long-term US neutral rate.
Brainard did not address her preferred timing for the Fed's first rate hike in Tuesday's speech; comments in prior speeches suggest she would prefer waiting until 2016.
The Fed will consider whether to raise rates at its last policy meeting of the year, in mid-December.
REUTERS

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