Wednesday, December 30, 2015

Indonesia central bank gov says sees y-o-y inflation at slightly above 3%

Indonesia central bank gov says sees y-o-y inflation at slightly above 3%

[JAKARTA] Indonesia's inflation is expected to be slightly above 3 per cent at the end of 2015, the head of the central bank said on Thursday.
"From a monetary point of view, we see that it's true that inflation will perhaps be slightly above 3 per cent," Bank Indonesia Governor Agus Martowardojo told reporters.
"Perhaps it will be higher than 3 (per cent) because there are several commodities like chili and onions (and eggs) that are adding pressure," he added.
Previously the central bank said annual inflation could cool to 2.97 per cent in December from 4.89 per cent in November, due to changes in base prices.
REUTERS

Russian service sector downturn worsens in December

Russian service sector downturn worsens in December

[MOSCOW] A downturn in Russia's service sector worsened in December, a monthly survey showed on Thursday, providing more evidence that a general economic downturn is persisting.
The headline figure for business activity in Markit's Purchasing Managers' Index (PMI) fell to 47.8 from 49.8 in November, further below the 50 mark that separates expansion from contraction. "Russian service providers end 2015 on a dull note, as the headline figure registered comfortably below the 50.0 no-change mark. This will come as disappointing news to the sector, which looked to be veering towards stability in November," said Samuel Agass, economist at Markit, which compiles the survey.
He added that the decline in business activity had been driven by a fall in new business, in part reflecting payment problems among services firms' customers.
Job cuts in the service sector also continued, having occurred each month since March 2014.
Businesses expected an increase in output next year, although the balance of positive sentiment was slight, with 31 per cent foreseeing an increase and 26 per cent a decline.
The gloomy services reading follows a similar survey for the manufacturing sector, which also showed a deterioration in December.
Russia's economy is expected to contract by around 4 per cent in 2015, with prospects for a recovery next year knocked back by a renewed slide in the price of oil, Russia's main export and an important source of government revenues.
REUTERS

Singapore shares close weaker on the day, STI down 14.3% for the year

Singapore shares close weaker on the day, STI down 14.3% for the year

IN some senses the week just past was a microcosm of the year just past, with prices drifting lower in poor volume and the only meaningful interest coming in the 30 Straits Times Index (STI) components.
Poor volume and weak sentiment aside though, there were differences between events of this week and 2015 - in the first half of 2015, the main market driver was Greece's financial health and likely exit from the eurozone, while in the third quarter and most of the fourth, it was China's sliding economy and plunging stock market.
Greece and China appear to have relinquished their positions as prime market movers in recent weeks, with December's primary focus being the US Federal Open Market Committee meeting mid-month at which US interest rates were raised by 25 basis points.
After a brief "relief rally" immediately after that rate hike, the local market entered what many believe is its now-default mode, marked by thin volume, weak sentiment and churning of penny stocks by day traders. Such was the case this week, when already-soft turnover dwindled even more because of the holiday period, amid largely featureless trading.
On the last trading day of 2015, the STI drifted to a 2.78 point loss at 2,882.73, bringing its loss for the year to 482.42 points or 14.3 per cent. Turnover was a weak 612.6 million units worth S$373.2 million and excluding warrants there were 151 rises versus 156 falls.

Singapore market capitalisation down S$102b in 2015

Singapore market capitalisation down S$102b in 2015

THE Year of the Sheep in 2015 turned into a slaughter as Singapore stocks registered their worst showing since 2011.
At the end of the half-day trading session on Dec 31, the total value of 764 companies listed on the Singapore Exchange (SGX) tracked by The Business Times was S$855 billion, down S$102 billion from a year ago.
The benchmark Straits Times Index (STI) closed the year at 2,882.73 points, down 14 per cent from 3,365.15 points at end-2014 and 19 per cent from a mid-April peak of 3,539.95 points.
The last time stocks were down this much was in 2011, when the market fell 17 per cent. Those invested in offshore and marine companies this year fared much worse: They would have found themselves down a whopping 50-70 per cent.
Overall, brokers are expecting the STI to trade between 3,000 and 3,200 points by end-2016.
Favoured sectors include property and transport.

Oil tumbles 3% after unexpected US rise in stockpiles

Oil tumbles 3% after unexpected US rise in stockpiles

[NEW YORK] Oil prices sank Wednesday after an unexpected rise in US commercial crude stockpiles reinforced worries about the prolonged global oversupply.
US benchmark West Texas Intermediate (WTI) for February delivery tumbled US$1.27, or 3.4 per cent, to US$36.60 a barrel on the New York Mercantile Exchange, erasing the prior day's brief rebound.
Brent North Sea crude for delivery in February, the international benchmark, fell US$1.33 (3.5 per cent) to US$36.46 a barrel in London, not far from its 11 year low of US$36.11 on December 22.
The US Department of Energy's weekly report showed Wednesday that the nation's commercial crude stockpiles had resumed their upward trend following a one-week decline.
Stockpiles rose by 2.6 million barrels to 487.4 million barrels in the week ending December 25, instead of the 2.5-million-barrel fall expected by analysts surveyed by Bloomberg News.
Inventories remained near record levels and were up 26.5 per cent from a year ago.
Stockpiles of gasoline and distillates such as heating fuel and diesel rose more than expected. And a build of supplies at the Cushing, Oklahoma hub, the delivery point for Nymex WTI futures, also dented market sentiment.
The data, combined with slightly rising US crude production, "is yet another reminder that the supply glut could take a long time to clear which may mean even lower oil prices in the near term," said Fawad Razaqzada at Forex.com.
Prices have fallen by almost 70 per cent since 2014 amid the persistent global oversupply.
Razaqzada forecast a rebound in the late 2016.
"The second half of the year could see WTI rise as some of the weaker oil producers in the US are forced out of the market amid the persistently weaker prices," he said.
"When and at what price level will oil bottom out is a million-dollar question, but for now at least there's still no end in sight for this protracted bear trend in crude."
AFP

3-month Sibor jumps to new multi-year high on last day of 2015

3-month Sibor jumps to new multi-year high on last day of 2015

THE key three-month Sibor jumped to a new multi-year high of 1.18513 per cent, up 0.04978 on Thursday, the last day of 2015.
At 1.18513 per cent, the Singapore interbank offered rate which is typically used to price home loans is 2.6 times higher than a year ago.
The last time the key interest rate was at this level was in late 2008.

Ringgit poised for steepest annual loss since 1997 as oil slumps

Ringgit poised for steepest annual loss since 1997 as oil slumps

[KUALA LUMPUR] Malaysia's ringgit headed for its biggest annual decline since 1997 as plunging crude prices and a political scandal involving Prime Minister Najib Razak clouded the outlook for the Southeast Asian economy.
Analysts are predicting more weakness next year for Asia's worst-performing currency in 2015 as the Federal Reserve adds to this month's increase in US interest rates, boosting the dollar, and the slowdown in China saps demand for commodities.
Malaysia, the region's only major regional net oil exporter, gets about 22 per cent of government revenue from energy-related sources.
The ringgit slumped 19 per cent this year to 4.2923 a dollar as of 12.32 pm. in Kuala Lumpur, according to prices from local banks compiled by Bloomberg.
It sank to 4.48 in September, the weakest level in 17 years. The currency will drop 2.4 per cent to 4.4 by end-2016, according to the median estimate in a Bloomberg survey.
"The rapid decline in oil prices, the dollar's bullish bias and domestic issues were the main factors driving the ringgit's weakness in 2015," said Christopher Wong, a Singapore-based senior currency analyst at Malayan Banking Bhd.
"While challenges remain, we see limited weakness in the ringgit in 2016."
The ringgit's slide is seen slowing next year as Brent crude prices steady after sinking to an 11-year low.
Sentiment also improved after China General Nuclear Power Corp agreed to buy state investment company 1Malaysia Development Bhd's (1MDB's) power assets, which will help improve the debt-ridden firm's finances.
The ringgit has climbed 2.4 per cent since Sept 30, halting a five-quarter slump.
Mr Najib, who chairs 1MDB's advisory board, has drawn public criticism over the political donation he received from the Middle East that's led to tensions within his ruling United Malays National Organisation and spurred anti-government street protests. Investigations are still ongoing.
Overseas investors sold a net 663 million ringgit of Malaysian shares from Dec 7 to Dec 11, according to a report from MIDF Amanah Investment Bank. That took sales this year to 19.2 billion ringgit, more than double the 6.9 billion ringgit for all of 2014. The nation's foreign-exchange reserves dropped 18 per cent this year to US$94.9 billion as of Dec 15.
The yield on 10-year government bonds increased 12 basis points this year to 4.20 per cent, while that on five-year notes retreated 36 basis points, the most since 2010, to 3.46 per cent, according to prices compiled by Bloomberg.
BLOOMBERG

Asean launches economic bloc but analysts sceptical

Asean launches economic bloc but analysts sceptical

[JAKARTA] South-east Asian nations officially launched an EU-inspired economic bloc on Thursday aimed at boosting the region's trading clout and attracting more investment, but analysts said a true single market was still a long way off.
The ten-member Association of Southeast Asian Nations (Asean) hailed the project as a "milestone" in combining the economic force of a resource-rich and growing market of more than 600 million people.
The vision for the Asean Economic Community (AEC) is a single market with a free flow of goods, capital and skilled labour, which should help the region compete with the likes of China for foreign investment.
The new bloc "will contribute significantly to the region's growth and create developmental opportunities for all," said Vivian Balakrishnan, the foreign minister of Asean member Singapore.
But experts say such an idea is difficult, if not impossible, to achieve in a region marked by extremes in development levels, democratisation, and institutional capability.
The official launch of the AEC has no practical effect, and diplomats have said Asean - regularly criticised for a lack of concrete achievements - was keen not to miss its own deadline of 2015, set several years ago.
Research group Capital Economics said in a note the establishment of the AEC was "no game changer", and it was likely to fall short in tackling major challenges such as reducing non-tariff barriers and improving infrastructure."Asean, with its tradition of non-interference into the affairs of member countries, an absence of penalties for non-compliance, and a lack of a powerful central bureaucracy, is ill-equipped to tackle these obstacles," it said.
John Pang, a senior fellow at Singapore's S Rajaratnam School of International Studies, said there would be only "slow and incremental progress" in integrating the economies of South-east Asia."The AEC will not be raising the curtain on any radical change," he wrote in a commentary.
Diplomats have conceded the single market vision is many years away, but insist the project will help change mindsets and provide momentum.
Asean leaders signed a declaration to establish the AEC at the group's annual summit in November but there was no official ceremony on Thursday to mark the new bloc's establishment.
Southeast Asia has already made progress on lower-hanging fruit like cutting tariffs and removing other hurdles such as clashing customs systems but significant non-tariff and other barriers remain.
Asean includes wealthy Singapore, one of the world's most developed countries, oil-rich Brunei, developing states such as Malaysia, Indonesia, Thailand, the Philippines and Vietnam, and poorer nations like Cambodia, Laos and Myanmar.
Its members range from free-wheeling to controlled democracies, communist-ruled states and an absolute Islamic monarchy.
Although Asean's plans were inspired by the developed single market of the 28-member European Union, officials insist they want to pursue integration in a way suitable to the region's circumstances, and have ruled out a common currency.
AFP

China rolls out reforms of controversial security force

China rolls out reforms of controversial security force

[BEIJING] China has introduced reforms promising greater oversight over a controversial system of security officials that has often sparked public acrimony over reports of abusive practices, state media reported.
The reforms, announced in media late on Wednesday, call for strengthening the role of public opinion in oversight of the officials.
The security officials work with police to enforce minor city rules and regulations, but they are often derided as thuggish. Rights groups have long said they are poorly trained and supervised.
In an interview about the reforms on Thursday, Chen Zhenggao, minister of housing and urban-rural development, told the official Xinhua news agency that greater provincial and national oversight of the security officials, known as"chengguan", was needed. "Law enforcement is not standardized, and the problems of selective enforcement and violent enforcement leading to a strong reaction from the people have occurred," he said.
The system lacked supervision from national and provincial-level authorities, Chen added, and poorly defined responsibilities also enabled "passing the buck" between the officials and law enforcement agencies.
Mr Chen also acknowledged that some city enforcement authorities were of "low quality", adding that there is confusion about identities of the officials.
He said urban laws and regulations were also inadequate, and lacked specificity. The reforms would heighten requirements for the security officials by the end of 2017, and work to improve standardization of their enforcement of local rules.
The reforms also promised to allow greater transparency into the security force's actions.
Abuse of street vendors and roadside food-stall operators by the officials has often sparked public anger.
In 2013, a watermelon seller was killed in a fight with such officials, drawing widespread condemnation from the public.
The case was one of many reported incidents in which the officials have beaten vendors, confiscated their goods or detained them. REUTERS

Widespread flooding hits US Midwest, rivers still rising

Widespread flooding hits US Midwest, rivers still rising

[CHICAGO] Rain-swollen rivers in the US Midwest forced the evacuation of hundreds of residents, threatened crops and livestock and left scores of buildings underwater on Wednesday after days of extreme weather in which 24 people died.
Several major rivers, including the Mississippi, were expected to crest at or above record levels as flood waters rushed toward the Gulf of Mexico, the National Weather Service said.
Flooding has closed many roads and parts of Interstate 44, a major artery running from west Texas to St. Louis.
Water rose to the rooftops of homes and businesses in Missouri, where Governor Jay Nixon called the flooding "historic and dangerous." About 300 people in Valley Park, Missouri, west of St. Louis, were evacuated because a levee that protects the community might be breached by the Meramec River, said Chief Rick Wilken of the Valley Park Fire District. "We have seven people who are going to wait it out," Mr Wilken said. "Some people just want to hang onto their homes." The American Red Cross had seven shelters open in St. Louis on Wednesday, and spokesman Jack Collins said people were trying to help each other. "There was one lady who only had US$67 in her bank account but gave 34 of it for cereal and pop tarts and that sort of thing, just to give back," Mr Collins said.
Louisiana Governor Bobby Jindal declared a state of emergency as the waters moved south toward his state. Flash flood warnings were issued for parts of the Carolinas and Georgia.
'ONE HUGE LAKE'
At least 24 people have died in Missouri, Illinois, Arkansas and Oklahoma in flooding after days of downpours that brought as much as 12 inches (30 cm) of rain to some areas. Most of the deaths resulted from people driving into flooded areas.
In Eureka, Missouri, along the Meramec River, Mayor Kevin Coffey said a man was rescued from atop the cab of his pick-up truck after spending the night in a parking lot to watch over his gun shop business. "This is 4 feet (1.2 meters) above the worst flood we ever had," Mr Coffey said after helping to put sandbags around a school."The town looks like one huge lake." Historic floods on the Mississippi in 1993, 1995 and 2011 occurred during warm weather, after snow melts in the north. AccuWeather senior meteorologist Alex Sosnowski called it highly unusual to have heavy flooding in winter and said it could presage trouble for the spring. "The gun may be loaded again for another major flooding event," said Mr Sosnowski, who cited the El Nino weather pattern as the source of recent heavy rains. "You're not supposed to get this kind of heavy rainfall during the wintertime." Agriculture experts said that water standing more than a week could kill the soft red winter wheat crop. Export premiums for corn and soybeans were at their highest levels in weeks because of stalled barge traffic on swollen rivers.
2,500 HOGS DROWN
Livestock also has been hard hit. About 2,500 hogs drowned in an Illinois barn after a creek overflowed its banks, said Jennifer Tirey, a spokeswoman for the state's Pork Producers Association. "There was no electricity and roads were impassable. It was just impossible to get to those pigs," she said.
The US flooding is occurring at the same time as historic El Nino-related flooding across northern England. The El Nino weather phenomenon tends to disturb global weather patterns as ocean water temperatures rise above normal across the central and eastern Pacific, near the equator.
Several major rivers, including the Mississippi, and tributaries in Missouri and Illinois were poised to crest at record or above-record levels, the National Weather Service said, but parts of the region were already inundated.
Flood warnings were issued from eastern Oklahoma into southeastern Kansas, southern Missouri, central Illinois and parts of Arkansas, Kentucky, Tennessee, and the Florida panhandle.
While the rains have stopped for now, freezing weather is setting in, which will make the cleanup a miserable undertaking, Sosnowski said.
At the confluence of the Mississippi and Missouri rivers, about 20 miles (32 km) north of St. Louis, residents of the towns West Alton and Arnold were told to evacuate on Tuesday. About 400 residents and businesses in the town of Pacific also have evacuated.
The US Coast Guard closed a 5-mile (8 km) stretch of the Mississippi near St. Louis on Tuesday to all vessel traffic due to hazardous conditions.
The Mississippi River, the third longest river in North America, is expected to crest over the weekend at Thebes, Illinois, at 47.5 feet, more than a foot and a half (46 cm) above the 1995 record, according to the National Weather Service.
The severe weather has stranded tens of thousands of people during one of the busiest travel times of the year. More than 750 flights were canceled and 4,760 delayed as of mid-afternoon on Wednesday, according to FlightAware.com.
REUTERS

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