Wednesday, August 25, 2010

No one wants to take risks right now !!

“No one wants to take risks right now,” said Tomomi Yamashita, a fund manager at Shinkin Asset Management Co., which oversees $6 billion. “The effects of the stimulus measures are waning in the U.S., and fears about the global economic recovery are increasing. The market can’t help but be worried.

Ireland’s credit rating was cut one step by Standard & Poor’s to AA-, the lowest since 1995, on concern the rising cost of supporting the country’s struggling banks will swell the budget deficit. Sales of new homes in the U.S. probably held at a 330,000 annual pace in July, the second lowest on record, according to a Bloomberg survey before today’s report. Japanese Finance Minister Yoshihiko Noda pledged to take “appropriate action” to halt the yen’s rally.

“The flood of money into bonds reflects expectations of low inflation, low interest rates and low returns on equities and encapsulates a very cautious view of global growth, raising fears that this is the next bubble ready to burst,” David Hufton, managing director of London’s PVM Oil Associates Ltd., wrote in a report today. “Bond yields are in many cases at record lows, inviting predictions of a price collapse. This money is betting on a very muted global GDP growth at best.”

Saturday, August 14, 2010

Fed's Hoenig-Keeping rates low 'dangerous gamble'

The Federal Reserve is undertaking a "dangerous gamble" by keeping rates at near zero for so long, and it must start raising rates or risk damaging the nascent U.S. recovery, a top Federal Reserve official said on Friday, Aug 13.

"To be clear, I am not advocating a tight monetary policy," Kansas City Reserve Bank President Thomas Hoenig told a town hall meeting organized by the Lincoln, Nebraska, Chamber of Commerce and U.S. Representative Jeff Fortenberry.

"I am advocating a policy that remains accommodative but slowly firms as the economy itself expands and moves toward more balance."

Hoenig has been the lone dissenter on the Fed's policy-setting panel, which on Tuesday repeated the U.S. central bank's pledge to keep interest rates extraordinarily low for an "extended period."

The Fed also said it would begin reinvesting cash from maturing mortgage bonds to buy more government debt. The decision reflected its concern over the slowdown in the economic recovery it helped bring about by cutting rates to near zero in December 2008 and buying nearly $1.3 trillion in mortgage-linked debt to shore up the housing market.

However, Hoenig said on Friday he believes the economy "barring specific shocks and bad policy ... should continue to grow over the next several quarters."

Genting Singapore reports 2Q net profit of $396.5m

Genting Singapore Plc reported second-quarter profit of $396.5 million compared with a loss a year earlier as its new casino resort in Singapore “made an impact” in its first full quarter of operations.

Revenue surged to $979.3 million in the three months to June 30 compared with $120.1 million a year ago, according to a filing to the Singapore stock exchange today. Earnings before interest, tax, depreciation and amortization, or Ebitda, were US$513.9 million ($700.1 million), with margins of 52%, the statement said.

Singapore overturned a 40-year ban on casinos in 2005 to spur economic growth. Genting’s US$4.7 billion Resorts World Sentosa opened on Feb. 14 and features Southeast Asia’s only Universal Studios theme park. Billionaire Sheldon Adelson’s Las Vegas Sands Corp. opened its rival US$5.5 billion Marina Bay Sands casino resort in the financial district in April.

Morgan Stanley upgrades Genting Singapore (G13.SG) to Overweight from Equalweight, raises target price to $1.60 from $1.06 after casino operator’s 2Q results top house’s expectations; results include first full quarter of earnings from Resorts World Sentosa, says Dow Jones.

Wednesday, August 11, 2010

Treasuries Rally on Growth Concern

(Bloomberg) -- Stocks dropped and Treasuries rose, sending the two-year yield to a record low, amid speculation the Federal Reserve’s stimulus measures mean the recovery is more threatened than was feared. The yen advanced to a 15-year high against the dollar.

The Fed yesterday said it would maintain stimulus measures to support a weaker-than-anticipated recovery. China’s industrial output rose the least in 11 months, retail sales growth eased and new loans climbed less than estimated, adding to signs that the world’s third-biggest economy is slowing. Growth in oil demand will decline in 2011, the International Energy Agency in Paris said, citing “significant” risks that the global recovery will falter.

“We’re in a world-wide soft patch and investors wonder why the Fed didn’t do more,” said James Swanson, chief investment strategist at Boston-based MFS Investment Management, which oversees about $197 billion. “People are dumping stocks because they’re afraid earnings will decelerate and the economy is losing steam.”

Wednesday, August 4, 2010

Zelan up 9% after US-based fund buys 5% stake

Shares of ZELAN BHD [] rose 9% in late afternoon trade on Wednesday, Aug 4 after US-based fund Grantham, Mayo, Van Otterloo & Co (GMO) emerged as a substantial shareholder with a 5.02% stake.
A company filing with Bursa Malaysia showed the global investment management firm had acquired 28.28 million shares as of Aug 2.

GMO is a private partnership and as at June 30, 2010, it managed more than US$94 billion in client assets, US$32 billion of which was in asset allocation strategies.