China’s Industrial Profits Rise

Chinese industrial companies’ profits rose in September for the first time in six months, adding to signs economic growth is picking up following a seven- quarter slowdown.

Net income rose 7.8 percent from a year earlier to 464.3 billion yuan ($74.3 billion), the National Bureau of Statistics said today in Beijing. That compared with a 6.2 percent decline in August, the year’s largest drop.

Today’s report followed data showing industrial production and retail sales accelerated in September and a manufacturing gauge rose in October. Chinese Premier Wen Jiabao said the economy will keep showing “positive changes,” according to a report last week by the official Xinhua News Agency.

http://www.bloomberg.com/news/2012-10-27/china-s-industrial-profits-rise-for-first-time-in-six-months.html

Chinese stocks worries

TheChinese National Bureau of Statistics is due to release industrial companies’ September earnings tomorrow. Profits fell 6.2 percent in August.

Out of the 937 companies in the Shanghai Composite, 293 have reported third-quarter earnings with an average drop of 3.3 percent from a year earlier, according to data compiled by Bloomberg. That compares with profit growth of 0.6 percent in the second quarter, the data showed. Publicly traded companies are required to release results by the end of the month.

China’s capital flight may decline on the recovering economy, improved risk appetite, better liquidity, easing concern about yuan depreciation, QE3 and policymakers’ efforts to support financial market stability, the economists wrote.

http://www.bloomberg.com/news/2012-10-26/china-s-stocks-head-for-weekly-loss-as-companies-report-earnings.html

China's foreign trade expected to continue to pick up in 4th Q

China's foreign trade will likely continue to pick up in the fourth quarter of this year, the state-run China Securities Journal on Friday quoted a Commerce Ministry spokesman as saying.

The report also cited Yao Jian as saying that retail sales are likely to stabilize and improve further in the current quarter as government measures to promote consumption are taking effect and the high season for shopping is approaching.

http://www.4-traders.com/news/China-s-Foreign-Trade-Expected-to-Continue-to-Pick-Up-in-4th-Quarter-Report--15424482/

BoE thinks “long and hard” about expanding QE

The Bank of England is in the final weeks of the 50 billion-pound ($80 billion) round of quantitative easing it put in place in July. The MPC will announce its next policy decision on Nov. 8, and King said it will think “long and hard” about expanding the program from the current target of 375 billion pounds.

For now, the recovery is proceeding at a “slow and uncertain” pace, King said. Data tomorrow may show the economy grew 0.6 percent in the third quarter, according to the median estimateof 33 economists in a Bloomberg News survey. While that would end the U.K.’s first double-dip recession since the 1970s, economists say underlying growth is weaker.

King noted “encouraging” signs, including falling unemployment and a cooling of inflation to 2.2 percent, the closest it’s been to the bank’s 2 percent target in almost three years. 

http://www.bloomberg.com/news/2012-10-23/king-says-boe-stands-ready-to-add-stimulus-should-recovery-fade.html

Russia ‘Off Limits’ to Big Oil After BP Wins Putin’s Approval

“By signing this deal, the highest levels of the Russian government, up to and including Vladimir Putin, are endorsing BP as the principal western partner of the Russian oil and gas industry,” Molchanov said. “This is a big, big seal of approval for BP by Moscow and it means no other company is going to have access to the corridors of power like BP does.”

“For foreign oil companies seeking to expand production and reserves, Russia is now off limits,” Robbert Van Batenburg, head of research at Louis Capital Markets LP in New York, said in a telephone interview yesterday. The BP accord “is probably scaring the others away.”

http://www.bloomberg.com/news/2012-10-22/russia-off-limits-to-big-oil-after-bp-wins-putin-s-approval.html

5 Spanish regions to 'junk'

"With the corporate reporting season getting underway, Asian shares have failed to inspire as investors stayed cautious after global shares faltered overnight on weak earnings report and outlook. While excessive risk aversion has softened there is little to be positive about the global growth slowdown, any dip in the markets will however be a buying opportunity," said trade Max Cohen from Spreadex.

Meanwhile, concerns about Spain have increased over the last few days after a decent outcome at the regional elections for Prime Minister Mariano Rajoy is thought to have reduced the pressure on him to request a bailout.

Ratings agency Moody's downgraded five Spanish regions to 'junk' today due to the "deterioration in their liquidity positions, as evidenced by their very limited cash reserves as of September 2012 and their significant reliance on short-term credit lines to fund operating needs."

"Range trading will most likely continue with further losses possible as stocks are struggling to find any positive news that would give them a new push to the upside, however downside potential should be limited as similar as seen yesterday in the US bargain hunting is likely to set in as traders take advantage of cheaper prices," Huber said.

http://www.lse.co.uk/sharecast-news-article.asp?ArticleCode=20445868&ArticleHeadline=london_open:_whitbread_and_the_miners_provide_a_drag_early_on

Euro summit shelved big decisions

While the EU-leaders decided to agree the legal framework on the new banking supervisor by January during a fraught session that dragged on until after 3am on Friday, all other substantial and highly contested matters were left largely untouched.

If the January deadline is met — a big if, given the web of complex and controversial issues entailed in designing an effective banking supervisor for the eurozone while meeting the objections of the 10 countries not in the currency — it will then take several months at least for the supervisory authority to be functioning.

That, in turn, means that it will be at least a year before the eurozone can tackle the sovereign debt crisis more fundamentally by pouring bailout funds directly into ailing banks without first lending to governments and worsening their debt burdens. The decision to take this action came in June at a previous summit but became swiftly engulfed in confusion and dispute. The meeting on Thursday and Friday failed to dispel the confusion and bring clarity.

All the signs were that, barring a re-eruption of the crisis in the markets, substantial eurozone action would have to wait until Merkel is probably re-elected to a third term in September next year.

The summit featured the first big clash in the three-year crisis between Germany and France, highlighting how the troubles over the single currency and sovereign debt have moved to the very heart of the EU.

Hollande's key aim was to speed up the establishment of the new banking regime, while Merkel emphasised "quality over speed" as part of her delaying tactics.

http://www.guardian.co.uk/business/2012/oct/19/eu-summit-unresolved-issues

HK workers more flexible working hours and extra paid leave

Workers in Asia clock more hours on the job than any other continent, and with Hong Kong as one of Asia’s hardest-working places, a new survey says the city is sorely in need of better work-life balance.

Long workdays in Hong Kong—the average work week is 49 hours—are blamed for everything from depression to the city’s notoriously low libido levels.

What employees really want is more flexible working hours and extra paid leave, finds an annual survey of 1,000 workers by the nonprofit Community Business, which partners with companies to promote good corporate citizenship. 

http://blogs.wsj.com/chinarealtime/2012/10/16/what-hong-kong-workers-really-want/

Singapore's exports unexpectedly fell

Singapore's exports unexpectedly fell for the second-straight month in September as the decline in electronics shipments accelerated, with the city-state missing out on the demand for consumer gadgets, such as Apple Inc.'s iPhone 5, that has helped other parts of Asia.

http://online.wsj.com/article/SB10000872396390444734804578061813166740482.html?mod=SEA_TOPLEFT

Car sales in China, september

Vehicle sales in China fell 1.8
percent in September from a year earlier as Japanese automakers'
sales collapsed. 

The following table shows passenger car and vehicle sales in
September and year-to-date by manufacturers (units, percent
changes are from a year earlier).      
--------------------------------------------------------------- 
                       September   pct change   y-t-d      pct 
--------------------------------------------------------------- 
    Mercedes-Benz         17,660 12.0       152,480      9.0
    Audi                  35,512  20.5       297,060     31.4   
    General Motors       244,266   1.7     2,081,812     10.0 
    Toyota Motor          44,100 -48.9       640,200      4.6   
    Mazda Motor           13,258 -35.0       148,116     -6.0   
    Dongfeng             156,271 -21.9     1,673,845      5.0   
    Nissan               76,066 -35.0       947,346      4.5 
    Ford Motor           59,570   35.0       428,083     11.0 
    Honda Motor          33,931  -40.5       469,993      9.5   
    Great Wall           56,553   54.6       435,195     27.8
    SAIC Motor          393,986    4.6     3,305,338     11.0
  * Volkswagen           NA       NA       2,000,000     18.3
---------------------------------------------------------------
 * Volkswagen AG's sales include mainland China and
Hong Kong.   

http://www.reuters.com/article/2012/10/12/china-autos-idUSL3E8LC1C820121012

Goldman downgrades several UK-listed miners

Goldman Sachs was dampening the mood in the mining sector this morning after downgrading its ratings for a host of resource stocks. The US bank cut its recommendation for Antofagasta, Evraz, Kazakhmys, Anglo American, Rio Tinto and BHP Billiton this morning.

UBS raises Kazakhmys PLC price target to 850p from 720p; rating buy.
Canaccord Genuity cuts Antofagasta and Kazakhmys to hold from buy.

http://www.lse.co.uk/ShareNews.asp?shareprice=KAZ&share=kazakhmys

Eyes on EU meeting

The focus on stock markets this week will likely be on the meeting of European Union leaders. "Before the EU summit on Thursday, Greece is expected to submit its spending cuts worth €13.5bn to the EU leaders. If agreed upon by the EU, the next tranche of the bailout will be released, essentially funding Greece past November," explained analyst Craig Erlam from Alpari.

Meanwhile, pressure continues to mount on Spanish Prime Minister Mariano Rajoy, who is widely expected to request a bailout from the European Central Bank (ECB) in the coming weeks. Eyes are also on Portugal as it presents its 2013 budget. 

http://www.lse.co.uk/sharecast-news-article.asp?ArticleCode=20427643&ArticleHeadline=London_open_Chinese_export_data_lifts_stocks

Asia wealthiest region

For the first time, Asia is the wealthiest region of the world, surpassing Europe in terms of household wealth. Asia's legion of millionaires will continue to grow.

http://live.wsj.com/video/how-asia-became-the-world-richest-continent/FDC5D092-C633-4E15-A827-01260CA26BBE.html?mod=wsj_article_tboright#!FDC5D092-C633-4E15-A827-01260CA26BBE

Refined oil product futures & refining stocks

Leading commodity fund managers are focusing on refined oil product futures and U.S. refining stocks in the fourth quarter as U.S. gasoline and European gasoil supplies tighten, and U.S. refiners benefit from strong margins.

Seasonal refinery maintenance and unexpected outages due to fires and explosions are keeping refined products supplies tight in both the United States and Europe, whilst operating refiners are enjoying high margins.

http://www.4-traders.com/MARATHON-PETROLEUM-CORP-8251813/news/Top-commodity-managers-tip-refiners-and-oil-products-for-fourth-quarter-15317153/

Global growth concerns

Trading in Asia overnight has been poor. 

This downturn was largely the result of the World Bank's decision to cut its growth forecasts for East Asia and Pacific region on Monday, saying it believes there is a risk the slowdown in China could worsen and continue for a longer period than had been expected. 

China's retail sales growth slowed in a key period of trading, the Golden Week break at the start of October, but said demand was better-than-exepected. Sales grew 15% compared to 17.5% the same period the previous year.

Back in Europe, all eyes are on Greece. European Union Comissioner Olli Rehn expects the country to receive the backing of the Troika as regards the assesment of its progress on carrying out the necessary economic adjustments. 

http://www.lse.co.uk/sharecast-news-article.asp?ArticleCode=20412746&ArticleHeadline=london_pre-open:_losses_expected_on_concerns_over_global_growth

falling trend of luxury goods

Purchase of luxury goods by mainland visitors in Hong Kong is set to fall at least 10 percent from a year ago during this week’s holiday Golden Week. The eight-day Golden Week national holiday, a shopping and travel season for Chinese consumers, began on Sept. 30. Shoppers are pulling back amid a slump in exports and a contraction in manufacturing in the world’s second largest economy.

Some Chinese shoppers are hunting for bargains in Europe instead of Hong Kong as the euro has fallen about 2.5 percent against the yuan over the past twelve months.

http://www.bloomberg.com/news/2012-10-04/hong-kong-luxury-sales-fall-as-chinese-shoppers-spend-less-1-.html

Reiterating the ECB’s stance

“Although Draghi is just reiterating the ECB’s stance to support debt-burdened countries, the market is responding positively to his remarks,” said Kiyoshi Ishigane, a Tokyo- based strategist at Mitsubishi UFJ Asset Management Co., which oversees about $70 billion. “The U.S. data shows the economy is on more solid ground, with factory orders beating estimates. Even though the U.S. economy isn’t recovering across the board, more investors are optimistic.”

A government report today is expected to show the world’s biggest economy created 115,000 jobs last month and the unemployment rate rose to 8.2 percent from 8.1 percent, economists estimated. The Federal Reserve in September pledged to buy mortgage-backed securities until the U.S. labor market recovers.

http://www.bloomberg.com/news/2012-10-05/japan-stocks-rise-on-ecb-bond-pledge-u-s-economic-data.html

World food prices near crisis levels

The United Nations food agency reported on Thursday that the worst drought in more than 50 years in the United States had sent corn and soybean prices to record highs over the summer, and, coupled with drought in Russia and other Black Sea exporting countries, raised fears of a renewed crisis.

The Food and Agriculture Organisation's (FAO) price index, which measures monthly price changes for a food basket of cereals, oilseeds, dairy, meat and sugar, rose 1.4% in September, mainly due to higher dairy and meat prices.

Higher prices would place further pressure on squeezed international food supply chains.

http://www.guardian.co.uk/business/2012/oct/04/world-food-price-rise

Greek debt talks deadlocked

Representatives of the European Union, the European Central Bank and the International Monetary Fund – the "troika" of creditors keeping Greece's insolvent economy afloat – flatly rejected key cost-cutting measures in a €13.5bn austerity package lenders are demanding in return for further aid.

Insiders said the lenders had objected to proposed cuts to the operational budgets of ministries as well as plans to lay off an estimated 15,000 civil servants by 2014. Instead, the visiting inspectors insisted the ruling coalition agree to further cuts in wages and pensions, a potentially explosive demand that Stournaras has repeatedly said will lead to the collapse of the Greek government.

This morning's youth unemployment stats also show that Greece was the eurozone country with the most young people out of work. According to Eurostat, 55.4% of adults under 25 are out of work in Greece, compared with 52.9% in Spain. In contrast, several northern European countries still have single-digit youth unemployment rates, with 8.1% in Germany, 9.4% in the Netherlands and 9.7% in Austria.

http://www.guardian.co.uk/world/2012/oct/01/greek-debt-talks-deadlocked-lenders

Investors focus on Europe's debt crisis

Europe's debt crisis will remain investors' focus for some time, but attention will gradually shift to the November 6 U.S. presidential elections and quarterly U.S. earnings, he said, adding that markets may rally two weeks before the U.S. election, although the S&P 500 will be capped around 1,520.

"With a gradual rise in the stock markets, we would expect to see the financial sector benefit from this as it appears fairly oversold at present."

Euro zone factories suffered their worst quarter since early 2009 and China lost more steam, suggesting the global economy faces hurdles as it tries to outrun recession.

Events ahead include the Eurogroup meeting next Monday.

Greece unveiled on Monday a harsher austerity budget for 2013 which aims to pave the way for an international aid crucial to keep the country afloat as its finance minister met global lenders, who still object to some of the measures.

Spain is ready to request a sovereign bailout as early as next weekend but Germany has signaled that it should hold off, European officials said on Monday. Madrid has announced severe 2013 budget and economic reforms and the result of stress tests on its banks, moves seen to clear the way for such aid.
http://www.4-traders.com/news/Shares-euro-rise-as-US-factory-data-soothes-RBA-cuts-rates--14514335/?countview=0