We need to find a fairer way of providing Goods and Services to the rest of the people on Earth.Cryptocurrencies and/or Gold Standard of money....maybe the answer to fight hyperinflation caused by too much printing of paper/fiat currencies by Governments and Central Banks all over the World. (https://nomorefiatmoneyplease.blogspot.com)
Gold opens 2016 with a rally as Saudi tensions fan haven demand
Gold and silver climbed on the first trading day of 2016 as rising tension between Saudi Arabia and Iran spurred a return to haven assets.
PHOTO: AFP
[SINGAPORE] Gold and silver climbed on the first trading day of 2016 as rising tension between Saudi Arabia and Iran spurred a return to haven assets.
Bullion for immediate delivery rose as much as 0.9 per cent to US$1,070.27 an ounce and traded at US$1,069.26 at 3:31 pm in Singapore, according to Bloomberg generic pricing, for its biggest gain since Dec 21. The metal lost 10 per cent in 2015 for a third annual drop, the longest slump since 2000.
Gold, traditionally seen as a store of value during political turmoil, climbed after Saudi Arabia cut ties with Iran, a day after its embassy in Tehran was attacked to protest the Saudi execution of a prominent Shiite cleric. While unexpected incidents last year such as the Paris terror attacks lifted prices briefly, gold still fell over 2015 as prospects for rising US interest rates boosted the dollar.
"When you look across the board, there's just a little bit of geopolitical risk coming back into the market," Jonathan Barratt, chief investment officer at Ayers Alliance Securities in Sydney, said by phone.
Holdings in gold exchange-traded products declined 2.56 metric tons to 1,463.9 tons on Friday, near the lowest in more than six years, according to data compiled by Bloomberg. The assets shrank 8.3 per cent in 2015 to cap a third year of contraction.
Bullion of 99.99 per cent purity rose as much as 1 per cent to 225 yuan a gram (US$1,075.5 an ounce) on the Shanghai Gold Exchange. Spot silver advanced 0.8 per cent to US$13.9305 an ounce, palladium retreated 2.7 per cent and platinum dropped 1.4 per cent.
Asia: Markets stabilise as China moves to reassure investors, STI flat
PHOTO: EPA
[SYDNEY] Asian stocks stabilised on Tuesday after the worst start to the year since 1988 as China's central bank added funds to the financial system and US equities staged a late rally.
China's regulator moved to reassure investors after Monday's 7 per cent plunge engaged the nation's new market circuit breakers on their first day.
Most markets halted their plunge with the MSCI Asia Pacific Index little changed at 128.93 as of 11:05 am in Tokyo, swinging between losses of 0.4 per cent and gains of as much as 0.2 per cent.
The Shanghai Composite added 0.5 per cent. Japan's Topix index rose 0.3 per cent and South Korea's Kospi index increased 0.7 per cent.
Singapore's Straits Times Index was unchaged. Australia's S&P/ASX 200 Index lost 1 per cent and New Zealand's S&P/NZX 50 Index declined 0.8 per cent.
"Investors need to be more cautious," said Matthew Sherwood, head of investment strategy at Perpetual Ltd in Sydney, which manages about US$21 billion. "Growth remains a concern. How the year plays out is unclear, but the only surety is that volatility will increase." The People's Bank of China conducted the biggest reverse-repurchase operations since September, adding 130 billion yuan (S$28 billion) of funds to the financial system after money- market rates climbed to an eight-month high. The circuit breaker plays an important role in stabilising the market, and the government will work to improve the system, China Securities Regulatory Commission spokesman Deng Ge said in a statement on Tuesday.
"There's more easing ahead from the Chinese," said Shane Oliver, head of investment strategy in Sydney at AMP Capital Investors Ltd, which oversees about US$115 billion.
"I expect them to cut interest rates and/or the reserve-requirement ratio again. We've been reminded that volatility in financial markets remains high and that the global economy still needs monetary policy support." Asian equities are reeling from the first back-to-back annual losses in a decade amid concern weakening Chinese growth and tighter US monetary policy will choke off an earnings expansion. Regulators halted China's stock market on Monday following a 7 per cent slide.
Global equities had their worst inaugural session in at least three decades on Monday. The MSCI Asia Pacific index slumped 2.3 per cent, the most in three months, after the first economic reports in 2016 suggested concern over the world's second-largest economy won't easily dissipate. Evidence of slowing manufacturing in China triggered the selloff that halted trading in Shanghai.
Losses spread as data showed manufacturing in the US contracted in December at the fastest pace since 2009. US markets recouped some of their losses in the last few hours of trading with the Dow Jones Industrial Average almost halving its decline.
Futures on the S&P 500 added 0.2 per cent. The underlying index closed 1.5 per cent lower on Monday after dropping as much as 2.7 per cent during the day.
China halt gives investors new reason to shun Hong Kong stocks
The list of reasons for global investors to avoid Chinese shares in Hong Kong keeps getting longer.
PHOTO: REUTERS
[SYDNEY] The list of reasons for global investors to avoid Chinese shares in Hong Kong keeps getting longer.
Already beaten down by China's economic slowdown, a falling yuan and vanishing top executives, so-called H shares now face a new threat: the impact of circuit breakers on the mainland. The Hang Seng China Enterprises Index fell as much as 4.4 per cent on Monday after trading halts in Shanghai and Shenzhen spurred investors to shift sell orders to Hong Kong.
"Now it is up to Hong Kong to carry the burden, as traders who cannot sell their mainland portfolio will likely use Hong Kong," said Hao Hong, chief China strategist at Bocom International Holdings Co in the city, who called both the boom and bust in mainland share prices last year. "Many traders are disenchanted."
The H-share gauge plunged 19 per cent in 2015, leading declines in Asia, as the Communist Party's efforts to stem a rout in mainland equities had less impact across the border.
The government's sanction of a weakening yuan is exacerbating a deteriorating earnings outlook for Hong Kong dollar-priced shares as the economy slows.
An anti-graft campaign that's led to the disappearance or arrest of some of China's most high- profile corporate executives is adding to foreign investor concerns.
The H-share gauge is valued at the biggest discount versus the MSCI All-Country World Index since 2003, according to data compiled by Bloomberg. The measure trades at 6.9 times earnings, ranking it among the cheapest gauges tracked by Bloomberg after indexes in Zambia, Lebanon, Kazakhstan and Laos.
Chinese shares in Hong Kong were already declining on Monday after data showed the nation's manufacturing contracted for a fifth straight month. Losses escalated when a 5 per cent drop by the CSI 300 Index triggered a 15-minute suspension, and deepened further as trading was halted on mainland exchanges for the rest of the day.
Trading in Industrial & Commercial Bank of China Ltd, the nation's largest lender and the biggest dual-listed stock, illustrates the pattern. More than 16 million H shares changed hands in the minute that mainland stocks were halted for the day, or 6.2 per cent of the entire day's volume, data compiled by Bloomberg show. The stock touched its low of the day the same minute, falling as much as 4.5 per cent, before paring its drop to 3.4 percent at the close.
ICBC fluctuated in Hong Kong and the mainland on Tuesday, as the Shanghai Composite whipsawed between gains and losses. The index slid as much as 3.2 per cent at the open, before rallying 1 per cent less than half an hour later. The Hang Seng China Enterprises Index was little changed as of 10.12am local time.
VOLATILITY CONTROL
Hong Kong's bourse will introduce a volatility-control mechanism as soon as 2016 that would prevent an individual stock from moving 10 percent or more during a five-minute period, once a session. Stocks traded in the city aren't currently subject to any daily price limits.
Monday wasn't the first time investors have targeted Hong Kong amid shutdowns in mainland equities.
The Hang Seng China Enterprises plunged as much as 9.4 per cent on July 8, its biggest loss since 2008, as mainland officials allowed more than 1,400 companies to halt trading on the Shanghai and Shenzhen exchanges, locking sellers out of half the market.
Foreign banks were doubtful of the ability of China's new system to calm price swings. Goldman Sachs Group Inc. said circuit breakers won't notably reduce volatility given retail investors dominate turnover, while Citigroup Inc. said the mechanism is too conservative. The measures play an important role in stabilizing the market, and China will keep improving the system, China Securities Regulatory Commission spokesman Deng Ge said in a statement on Tuesday.
"The circuit breaker may increase selling pressure," said Castor Pang, head of research at Core-Pacific Yamaichi Hong Kong. When mainland shares get "halted, investors are using Hong Kong to hedge their positions."
Alibaba-backed Chinese phone maker Meizu to cut 5% of workers
[HONG KONG] Meizu Technology Corp, the Chinese smartphone maker backed by Alibaba Group Holding Ltd, is planning to cut as much as 5 per cent of its roughly 4,000 staff to strengthen its performance as industry growth cools.
Meizu plans to trim as many as 200 people from its workforce by mid-February and will cap headcount growth at under 10 per cent this year, Li Nan, a spokesman for the company, said on Tuesday.
Chief Executive Officer Bai Yongxiang told employees he drew inspiration from a "20-70-10" vitality model espoused by former General Electric Co. Chairman Jack Welch, intended to root out the bottom 10 per cent of performers, Li said.
China's smartphone market growth is expected to have slowed to the "low single-digits" in 2015, IDC estimates.
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That deceleration is affecting a domestic industry crowded with lower-end brands such as OnePlus, Oppo and Meizu, in which Alibaba bought a minority stake last year for US$590 million to promote its "YunOS" operating system.
Xiaomi Corp, the country's second-largest vendor, was in danger of missing its target of selling 80 million smartphones in 2015, people with knowledge of its production plans said in November.
LOW BLOW
"The mid to low segment of the smartphone market is shrinking," said Jeff Pu, a Taipei-based analyst at Yuanta Securities Co. "Even though Alibaba's support helps Meizu price itself very competitively, it faces a challenge in hardware profitability."
Meizu is expected to grow shipments 25 per cent to 25 million smartphones this year, according to estimates by Bloomberg Intelligence, reflecting intensified competition in the low-end smartphone market where the company mostly competes. That compares with 350 per cent growth in unit sales in 2015, Mr Bai said in a message to employees that Mr Li confirmed.
Meizu began making MP3 players in 2003 and smartphones only four years after. Though it's never ranked among the nation's top brands by volume, it's managed to carve out a place in the market for itself since the release of its MX4 and MX Pro devices last year, according to Neil Shah at Counterpoint Technology Market Research.
Meizu devices use chips from MediaTek Inc and Samsung Electronics Co, displays from Sharp Corp and camera sensors from Sony Corp, according to the company's website.
Malaysia's 1MDB says US$1.7b asset sale value to be adjusted
Malaysian state fund 1MDB on Tuesday said its US$1.7 billion property project sale to a Malaysian-Chinese group will be adjusted to reflect certain liabilities and relocation costs associated with the land.
PHOTO: REUTERS
[KUALA LUMPUR] Malaysian state fund 1MDB on Tuesday said its US$1.7 billion property project sale to a Malaysian-Chinese group will be adjusted to reflect certain liabilities and relocation costs associated with the land.
The fund sold its 60 per cent stake in Bandar Malaysia to Malaysian tycoon Lim Kang Hoo's Iskandar Waterfront Holdings and its partner, state-run China Railway Engineering Corp (CREC) for RM7.41 billion (S$2.44 billion), wrapping up a major asset sale for the fund whose troubles have roiled domestic politics.
But critics have questioned the deal after CREC said in a bourse filing on the Hong Kong stock exchange on Monday that the acquisition cost was only RM5.28 billion, or US$500 million short of 1MDB's sale value.
1MDB president Arul Kanda clarified in a statement to Reuters that between January and June 2016, adjustments would be made to the RM7.41 billion value, depending on whether or not certain project liabilities were passed.
These included relocation costs for the existing facilities and a Bandar Malaysia sukuk, he said. "The agreement executed between the parties on 31 December 2015 provides for a robust and objective mechanism to determine, amongst others, the final project equity value, which will be different from the agreed land sale value," Mr Arul said in the statement.
CREC's announcement was based on certain assumptions which were subject to further negotiations, he added.
Scandal-hit 1Malaysia Development Berhad (1MDB) had racked up more than US$11 billion in debt - a burden that had weighed on the currency - before beginning a restructuring programme in 2015.
Opposition leaders have slammed the discrepancies in the deal. Tony Pua, member of parliament with the opposition Democratic Alliance Party has asked 1MDB to disclose the sale and purchase agreement between the companies.
China rail freight down 10.5% in 2015, biggest annual fall: Caixin
The total volume of goods transported by China's national railway dropped by a tenth last year, its biggest ever annual decline, business magazine Caixin reported on Tuesday, a figure likely to fan concerns over how sharply the economy is really slowing.
PHOTO: REUTERS
[SHANGHAI] The total volume of goods transported by China's national railway dropped by a tenth last year, its biggest ever annual decline, business magazine Caixin reported on Tuesday, a figure likely to fan concerns over how sharply the economy is really slowing.
Citing sources from railway operator National Railway Administration, Caixin said rail freight volumes declined 10.5 per cent year-on-year to 3.4 billion tonnes in 2015.
In comparison, volumes fell 4.7 per cent in 2014.
The amount of cargo moved by railways around China is seen as an indicator of domestic economic activity. The country's top economic planner said last month that November rail freight volumes fell 15.6 percent from a year earlier.
Weighed down by weak demand at home and abroad, factory overcapacity and cooling investment, China is expected to post its weakest economic growth in 25 years in 2015, with growth seen cooling to around 7 per cent from 7.3 per cent in 2014.
But some China watchers believe real economic growth is already much weaker than official data suggest, pointing to falling freight volumes and weak electricity consumption among other measures.
Power consumption in November inched up only 0.6 per cent from a year earlier.
A private survey published on Monday showed that the factory activity contracted for the 10th straight month in December and at a sharper pace than in November, suggesting a continued gradual loss of momentum in the world's second-largest economy.
The National Railway Administration did not respond to Reuters' calls for comment.
Caixin said the operator was targeting an expansion in rail freight volumes to 4.2 billion tonnes by 2020, which would require an average annual growth rate of around 4.3 per cent.
In comparison, passenger traffic volumes on the network grew 6.1 per cent in 2015, Caixin said, though at a slower pace versus 2014 when it increased by 11.9 per cent.
