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JAPANESE AFFILIATES BEARISH ON PROFITS

Posted by Gilmour Poincaree on December 29, 2008

01:02:00 12/30/2008

by Ronnel Domingo – The Philippine Daily Inquirer

PUBLISHED BY ‘THE PHILIPPINE DAILY INQUIRER’

CLICK HERE FOR THE ORIGINAL ARTICLE

PUBLISHED BY ‘THE PHILIPPINE DAILY INQUIRER’

Posted in AUTOMOTIVE INDUSTRY, COMMUNICATION INDUSTRIES, DIGITAL INDUSTRIES, ECONOMIC CONJUNCTURE, ECONOMY, ELECTRIC / ELECTRONIC INDUSTRIES, FINANCIAL CRISIS 2008/2009, FINANCIAL MARKETS, FINANCIAL SERVICES INDUSTRIES, INDONESIA, INDUSTRIAL PRODUCTION, INDUSTRIES, INTERNATIONAL, MALAYSIA, PHILIPPINES, SINGAPORE, THAILAND, THE FLOW OF INVESTMENTS, VIETNAM | Leave a Comment »

OIL PRICES STEADY AT $44 IN ASIA AS INVESTORS WAIT TO SEE SIZE OF OPEC OUTPUT CUT ON WEDNESDAY

Posted by Gilmour Poincaree on December 16, 2008

December 16, 2008 – 12:10 AM

by Alex Kennedy – Associated Press

PUBLISHED BY ‘THE STAR TRIBUNE’ (USA)

SINGAPORE – Oil prices were steady above $44 a barrel in Asia on Tuesday, a day before investors expect OPEC to announce a big production cut.

Light, sweet crude for January delivery was down 6 cents to $44.45 a barrel in electronic trading on the New York Mercantile Exchange by midday in Singapore. The contract fell overnight $1.77 to settle at $44.51.

Investors are looking to the Organization of Petroleum Exporting Countries, which accounts for 40 percent of global supply, to announce a substantial reduction of output quotas at its meeting Wednesday in Algeria.

OPEC President Chakib Khelil suggested Monday the group may slash as much as 2 million barrels a day, equaling a cut at the cartel’s last Algeria meeting four years ago.

Khelil said that a fair price for oil would be around $70 to $80 per barrel — the benchmark for several OPEC members below which they lose money on production.

Mohammed Al-Aleem, Kuwait’s oil minister, said Monday that OPEC should cut supply to help balance a large market surplus.

“At the very least, a cut should help stabilize the market,” said Gerard Burg, minerals and energy economist with National Australia Bank in Melbourne. “The impact may be relatively muted, but it could add some upward pressure on prices.”

Investors will be watching for evidence OPEC members are adhering to any announced cuts, as exceeding quotas has dogged the organization throughout its history.

“That’s going to be the difficult thing,” Burg said. “OPEC’s cohesiveness has really deteriorated over the last few years because the world was consuming everything it could produce.”

Many OPEC members based their budgets assuming oil prices would be above where they are now. The group’s efforts to bolster prices — including output cuts totaling 2 million barrels a day in September and October — have been ignored by investors preoccupied with the worst economic slowdown to hit developed countries in decades.

Oil prices, which reached a four-year low at $40.50 earlier this month, have fallen about 70 percent since peaking at $147.27 in July.

“The market is still consumed with demand-side factors,” Burg said. “We don’t expect a recovery until the second half of next year, so there’s potential for further negative news to have a dampening affect on the crude market.”

In other Nymex trading, gasoline futures rose 0.16 cent to $1.04 a gallon. Heating oil gained 0.24 cent to $1.46 a gallon while natural gas for January delivery was steady to 5.64 per 1,000 cubic feet.

In London, January Brent crude was steady at $46.36 a barrel on the ICE Futures exchange.

CLICK HERE FOR THE ORIGINAL ARTICLE

PUBLISHED BY ‘THE STAR TRIBUNE’ (USA)

Posted in COMMERCE, COMMODITIES MARKET, ECONOMIC CONJUNCTURE, ECONOMY, ENERGY INDUSTRIES, FINANCIAL CRISIS 2008/2009, INDUSTRIAL PRODUCTION, INDUSTRIES, INTERNATIONAL, OPEC, PETROL, RECESSION, SINGAPORE, STOCK MARKETS, THE ARABIAN PENINSULA, THE FLOW OF INVESTMENTS, USA | Leave a Comment »

VIETNAM LOWERS GASOLINE PRICES BY 8 PERCENT AMID DECLINING WORLD OIL PRICE

Posted by Gilmour Poincaree on December 12, 2008

December 10, 2008 – 2:57 AM

Associated Press

PUBLISHED BY ‘THE STAR TRIBUNE’ (USA)

HANOI, Vietnam – Vietnam has lowered gasoline prices by 8 percent as world oil prices hover around $43 a barrel.

The government said Wednesday that effective immediately, the price of gasoline was cut to 11,000 dong (65 cents) per liter. The government also raised import tax from 35 percent to 40 percent.

The government has cut gasoline prices 10 times since they reached a high of 19,000 dong ($1.1) in July when world oil prices hit a record high of nearly $150 a barrel.

Light, sweet crude for January delivery was up 91 cents to $42.98 a barrel in electronic trading on the New York Mercantile Exchange by midafternoon in Singapore as investors looked to an expected OPEC production cut next week to help stabilize prices that have plummeted amid a global economic slowdown.

Vietnam exports about 16 million tons of crude oil each year but has to import all refined oil products. The country’s first oil refinery is scheduled to open early next year.

CLICK HERE FOR THE ORIGINAL ARTICLE

PUBLISHED BY ‘THE STAR TRIBUNE’ (USA)

Posted in COMMODITIES MARKET, ECONOMIC CONJUNCTURE, ECONOMY, ENERGY, ENERGY INDUSTRIES, FINANCIAL CRISIS 2008/2009, GASOLINE, INDUSTRIAL PRODUCTION, INDUSTRIES, INFLATION, INTERNATIONAL, OPEC, PETROL, RECESSION, REFINERIES - PETROL/BIOFUELS, SINGAPORE, THE FLOW OF INVESTMENTS, USA, VIETNAM | Leave a Comment »

DEUTSCHE POST CEO SEES SHORT RECESSION, ASIA EXPANSION

Posted by Gilmour Poincaree on December 11, 2008

December 11, 2008

Tehran Times Political Desk

PUBLISHED BY ‘TEHRAN TIMES’ (Iran)

SINGAPORE (Reuters) – Deutsche Post chief executive Frank Appel said on Wednesday the firm will continue its Asian expansion and keep job cuts to a minimum outside the United States as it expects a short but sharp global recession.

“We are pretty confident that the recession will be deep but pretty short,” he said, predicting business and consumer confidence can recover as quickly as it had disappeared in recent weeks. “We don’t have to cut too many jobs.”

Appel said that Deutsche Post’s DHL unit, Europe’s largest express courier company, had invested around $2 billion in Asia in recent years, and “we will see similar numbers in coming years”.

DHL last month said it will halt U.S. domestic services and cut 9,500 jobs after failing to gain share in a market dominated by United Parcel Service and FedEx Corp.

FedEx on Monday warned that earnings for its fiscal year ending May 2009 will be lower than expected due to a global economic slump.

Appel, who spoke at a briefing on a global trade study commissioned by DHL, was more bullish about economic prospects, saying he expected the global economy to recover faster than most people thought.

According to the study by the Economist Intelligence Unit, trade between Asia and the West will shrink by about 4 percent in 2009 before recovering in 2010, recovering faster than cross-Atlantic traffic, which will likely remain in the doldrums until 2011.

CLICK HERE FOR THE ORIGINAL ARTICLE

PUBLISHED BY ‘TEHRAN TIMES’ (Iran)

Posted in ASIA, COMMERCE, COMMODITIES MARKET, CONSUMERS AND PSYCHOLOGICAL FACTORS, ECONOMIC CONJUNCTURE, ECONOMY, FINANCIAL CRISIS 2008/2009, FINANCIAL MARKETS, FINANCIAL SERVICES INDUSTRIES, FOREIGN POLICIES, GERMANY, INTERNATIONAL RELATIONS, IRAN, MACROECONOMY, RECESSION, SINGAPORE, THE FLOW OF INVESTMENTS | Leave a Comment »

MORE ‘HOT MONEY’ LEAVES IN NOV. – More foreign portfolio investments left the country last month, as gloomy economic outlook on markets hard hit by the global financial crisis dampened investor sentiment (Philippines)

Posted by Gilmour Poincaree on December 11, 2008

Friday, December 12, 2008 – Vol. XXII, No. 100

by G. S. dela Peña

PUBLISHED BY ‘BUSINESS WORLD’ (Philippines)

Data released yesterday by the Bangko Sentral ng Pilipinas (BSP) showed that foreign portfolio investments — referred to as “hot money” due to the ease by which they are transfered — posted a net outflow of $399 million for November alone, higher than the $389.8-million net outflow the preceding month.

The November figures were a reversal from the net inflows of $51.2 million in the same month last year.

The 11 months to November saw net outflows totaling $1.3 billion, a sharp contrast to the $3.7-billion net inflows recorded in the same period last year.

“Investors continued to be driven primarily by concerns over the weakening of major economies, particularly that of the US, despite temporary optimism over the results of the presidential elections there,” BSP Governor Amando M. Tetangco, Jr. said in a statement.

On a gross basis, hot money investments totaled $399.5 million, 68% of which were placed in listed shares, 30% in Treasury bonds, and 2% in money market instruments and peso bank deposits.

But capital repatriations reached $798.5 million in November, with outflows traced to withdrawals of investments from listed shares ($88 million or 11%), government securities ($135.4 million or 17%), money market instruments ($3.6 million or less than 1%), and bank deposits ($571.5 million or 72%).

From January to November, investment in listed shares posted a net inflow of $2.1 billion, while placements in peso-denominated government securities, money market instruments and peso bank deposits showed net out-flows of $110.8 million, $300,000, and $3.3 billion, respectively.

Gross investment inflows totaled $8 billion, a 46% contraction from the $14.7 billion recorded in the same period last year.

But outflows were higher than inflows at $9.3 billion, although 15% less than last year’s $10.9 billion. Of this amount, 37% were attributed to investments in listed shares, 22% to funds placed in government securities, while money placed in money market instruments and bank deposits accounted for 41%.

The United Kingdom, Singapore and the US remained the top three investor countries, accounting for 70%.

CLICK HERE FOR THE ORIGINAL ARTICLE

PUBLISHED BY ‘BUSINESS WORLD’ (Philippines)

Posted in BANKING SYSTEMS, ECONOMIC CONJUNCTURE, ECONOMY, ECONOMY - USA, FINANCIAL CRISIS - USA - 2008/2009, FINANCIAL CRISIS 2008/2009, FINANCIAL MARKETS, INTERNATIONAL, PHILIPPINES, RECESSION, SINGAPORE, STOCK MARKETS, THE FLOW OF INVESTMENTS, UNITED KINGDOM, USA | Leave a Comment »

FILIPINOS’ PESSIMISM UP — MASTERCARD POLL

Posted by Gilmour Poincaree on November 17, 2008

11/13/2008

Filipino consumers have grown more despondent and are among the most pessimistic in Asia with a BREATH/VOLUME MOMENTUM OSCILLATORconfidence index of 40 against a 47.4 average in the region during the first half and from a far higher 67.7 a year ago, results from the latest MasterCard Worldwide Index of Consumer Confidence released yesterday showed.

Most Asian consumers are pessimistic on the six month period ahead, the survey showed.

While consumers in Vietnam, China, India and Singapore relatively remained optimistic; Hong Kong and Taiwan consumers registered steep declines in consumer confidence levels.

Consumer confidence across the region has dropped seven points from six months ago, as a result of current economic volatility and the prospect of a global economic recession.

The current regional consumer confidence score of 47.4 is significantly below the score six months ago of 55 and a year ago of 67.3, according to Mastercard.

The level, however, remained higher than the 1997-1998 Asian economic crisis average of 32.3.

Overall consumer outlook has also fallen across the five indicators that make up the index compared to six months ago: employment (41.2 vs 54.2 six months ago), economy (42.1 vs 51.8), quality of life (44.0 vs 48.2) and the stock market (45.5 vs 53.4) and regular income (64.3 vs 72.2).

The index is based on a survey which measures consumer confidence on prevailing expectation in the market for the next six months. It is calculated based upon percentage response figures, with zero as the most pessimistic, 100 as most optimistic and 50 as neutral.

Only four out of the 14 markets surveyed — Vietnam, China, India and Singapore — were optimistic SHOPPERSabout the first half of next year. Vietnam tops the index with a score of 88.1 and the only market that has increased its score from six months ago.

China (76.6), India (63.9) and Singapore (62.3) remain optimistic about the first half of 2009 but they are less optimistic than they were six months ago (China: 82.7; India: 82.1; Singapore: 87.3).

Thai consumers continue to be pessimistic, though confidence levels have risen slightly from six months ago (23.7). The current score is, however, much lower than a year ago (44.2).

At the other end of the spectrum, nine markets are pessimistic about the first half of 2009, with Hong Kong (41.8 vs. 83.1 six months ago) and Taiwan (32.1 vs. 71.3 six months ago) recording the biggest declines.

“Consumers across AsiaPacific are clearly feeling the effects of the global credit crisis. While Asian financial institutions may be less affected by the global credit crunch and the financial sector melt down, Asian markets have been just as severely suffered the impact; and the regional powerhouses like China and India are equally affected. While the consumer confidence scores in China and India are still optimistic, confidence levels are still much lower than they were before,” Dr Yuwa Hedrick-Wong, economic advisor to MasterCard in Asia-Pacific said.

The latest survey was conducted from Sept. 1 to 29 2008 and involved 6,019 consumers across 14 key Asia-Pacific markets.

CLICK HERE FOR THE ORIGINAL ARTICLE

PUBLISHED BY ‘THE DAILY TRIBUNE’ (Philippines)

Posted in CHINA, COMMERCE, COMMODITIES MARKET, CONSUMERS AND PSYCHOLOGICAL FACTORS, ECONOMIC CONJUNCTURE, ECONOMY, FORMOSA - TAIWAN, INDIA, INTERNATIONAL, PHILIPPINES, SINGAPORE, THAILAND, VIETNAM | Leave a Comment »

SINGAPORE WELCOMES THOSE AFFECTED BY ECONOMIC DOWNTURN – One of Asia’s Largest Business & Financial Hubs Presents Diverse Educational and Work Opportunities for Americans Hit by Financial Crisis

Posted by Gilmour Poincaree on November 17, 2008

11-13-2008

Copyright: PR Newswire

Source: PR Newswire

Wordcount: 739

NEW YORK, Nov. 13 /PRNewswire/ – As discussions continue over the future of America’s financial and SINGAPOREeconomic stability, Singapore is stepping up efforts to provide education and work options, especially for those affected by retrenchments in the banking sector.

As the Gateway to Asia, Singapore thrives as a business and financial hub, housing more than 7,000 multinational corporations with some 60% basing their Asia Pacific regional headquarters there. The country has been ranked three times by the World Bank as the “Easiest place to do business in the world”. Hong Kong-based Political & Economic Risk Consultancy recently ranked Singapore as having the least political and social risk, well-positioning the country to weather the economic slowdown. Its economic growth in 2007 was an impressive 7.7% (as compared to USA’s 3.1%) and is projected to grow by approximately 3% despite the downturn.

Leveraging on these advantages and supporting Singapore’s talent attraction efforts is its Global Schoolhouse, comprising of renowned local and foreign universities that have set up campuses such as University of Chicago Booth School of Business, University of Nevada Las Vegas (UNLV) and New York University Tisch School of the Arts. In 2007, Singapore welcomed 86,000 international students.

New courses have been specifically created to cater to working professionals at crossroads in their career and keen to explore international options. The Asia campus of UNLV has created a 3-week course titled “Gateways to Cultures of Asia” specifically designed for professionals seeking business or employment opportunities in the hospitality industry in Asia. The National University of Singapore offers a 6-week program titled “Asian Perspective: Learn Mandarin and Uncover Southeast Asia” allowing students to study Mandarin and gain valuable insight into Southeast Asia.

In today’s globalized marketplace, foreign languages, overseas study and international work have proven to be highly sought-after experiences, giving job-seekers an edge in the competitive job market. Cameron Frazier of San Francisco, an executive who attained an Executive MBA in Singapore with The University of Chicago Booth School of Business, built a global career foundation by pursuing international study. “Studying in Singapore was a great experience — it gave me a new perspective of the world, made several friends, and I enjoyed the food and neighborhoods there very much. I was offered a job in the USA whilst studying in Singapore and the overseas experience did help in the job-selection process as it’s something fairly unique for Americans,” said Mr. Frazier.

For those keen on pursuing long-term work opportunities in Singapore, Contact Singapore is an agency that provides a one-stop online portal to connect global talent with employers in Singapore. Career @ Singapore offers a range of career opportunities in several sectors including the financial industry. For further information, visit http://contactsingapore.jobscentral.com.sg/.

It is also easy to study, live and work in Singapore. Singapore has an open visa policy for North Americans — visit http://www.ecitizen.gov.sg/nonresidents/ for more information. The Work Holiday Program allows approved applicants to live and work in Singapore for up to 6 months — visit http://www.contactsingapore.sg/whpsingapore/. Education programs in Singapore are also cost-effective with favorable exchange rates to the U.S. dollar.

About Singapore Education

Singapore Education is a multi-government agency initiative launched by the Singapore Government in 2003 to establish and promote Singapore as a premier education hub and help international students make an informed decision on studying in Singapore. This initiative is led by the Singapore Economic Development Board and supported by the Singapore Tourism Board, SPRING Singapore, International Enterprise Singapore and the Ministry of Education. For more information, visit www.singaporeedu.gov.sg or email STB_Education_Services@stb.gov.sg.

About Contact Singapore

Contact Singapore is an alliance of the Singapore Economic Development Board and Ministry of Manpower. It aims to attract global talent to work, invest and live in Singapore. With offices in the Asia Pacific, Europe and North America, Contact Singapore is the one-stop centre for those who wish to pursue a rewarding career in Singapore, as well as individuals and entrepreneurs who are keen to invest in or initiate new business activities here. Contact Singapore actively links Singapore-based employers with global talent and provides updates on career opportunities and industry developments in Singapore. For more information, visit www.contactsingapore.sg.

SOURCE Singapore Tourism Board

CONTACT: H&S Public Relations, Aik Wye Ng, or Maria Castro, both for Singapore Tourism Board, +1-212-754-6500; or Singapore Tourism Board, Wen Ee Lim, +1-212-302-4861.

This is a news service of Thomson Business Intelligence Service ©2006.

CLICK HERE FOR THE ORIGINAL ARTICLE

PUBLISHED BY ‘INSURANCE NEWS NET’ (Malaysia)

Posted in BANKING SYSTEMS, COMMERCE, ECONOMIC CONJUNCTURE, ECONOMY, FINANCIAL MARKETS, INTERNATIONAL, SINGAPORE, THE FLOW OF INVESTMENTS | Leave a Comment »

SINGAPORE WELCOMES THOSE AFFECTED BY ECONOMIC DOWNTURN – One of Asia’s Largest Business & Financial Hubs Presents Diverse Educational and Work Opportunities for Americans Hit by Financial Crisis

Posted by Gilmour Poincaree on November 17, 2008

11-13-2008

Copyright: PR Newswire

Source: PR Newswire

Wordcount: 739

NEW YORK, Nov. 13 /PRNewswire/ – As discussions continue over the future of America’s financial and SINGAPOREeconomic stability, Singapore is stepping up efforts to provide education and work options, especially for those affected by retrenchments in the banking sector.

As the Gateway to Asia, Singapore thrives as a business and financial hub, housing more than 7,000 multinational corporations with some 60% basing their Asia Pacific regional headquarters there. The country has been ranked three times by the World Bank as the “Easiest place to do business in the world”. Hong Kong-based Political & Economic Risk Consultancy recently ranked Singapore as having the least political and social risk, well-positioning the country to weather the economic slowdown. Its economic growth in 2007 was an impressive 7.7% (as compared to USA’s 3.1%) and is projected to grow by approximately 3% despite the downturn.

Leveraging on these advantages and supporting Singapore’s talent attraction efforts is its Global Schoolhouse, comprising of renowned local and foreign universities that have set up campuses such as University of Chicago Booth School of Business, University of Nevada Las Vegas (UNLV) and New York University Tisch School of the Arts. In 2007, Singapore welcomed 86,000 international students.

New courses have been specifically created to cater to working professionals at crossroads in their career and keen to explore international options. The Asia campus of UNLV has created a 3-week course titled “Gateways to Cultures of Asia” specifically designed for professionals seeking business or employment opportunities in the hospitality industry in Asia. The National University of Singapore offers a 6-week program titled “Asian Perspective: Learn Mandarin and Uncover Southeast Asia” allowing students to study Mandarin and gain valuable insight into Southeast Asia.

In today’s globalized marketplace, foreign languages, overseas study and international work have proven to be highly sought-after experiences, giving job-seekers an edge in the competitive job market. Cameron Frazier of San Francisco, an executive who attained an Executive MBA in Singapore with The University of Chicago Booth School of Business, built a global career foundation by pursuing international study. “Studying in Singapore was a great experience — it gave me a new perspective of the world, made several friends, and I enjoyed the food and neighborhoods there very much. I was offered a job in the USA whilst studying in Singapore and the overseas experience did help in the job-selection process as it’s something fairly unique for Americans,” said Mr. Frazier.

For those keen on pursuing long-term work opportunities in Singapore, Contact Singapore is an agency that provides a one-stop online portal to connect global talent with employers in Singapore. Career @ Singapore offers a range of career opportunities in several sectors including the financial industry. For further information, visit http://contactsingapore.jobscentral.com.sg/.

It is also easy to study, live and work in Singapore. Singapore has an open visa policy for North Americans — visit http://www.ecitizen.gov.sg/nonresidents/ for more information. The Work Holiday Program allows approved applicants to live and work in Singapore for up to 6 months — visit http://www.contactsingapore.sg/whpsingapore/. Education programs in Singapore are also cost-effective with favorable exchange rates to the U.S. dollar.

About Singapore Education

Singapore Education is a multi-government agency initiative launched by the Singapore Government in 2003 to establish and promote Singapore as a premier education hub and help international students make an informed decision on studying in Singapore. This initiative is led by the Singapore Economic Development Board and supported by the Singapore Tourism Board, SPRING Singapore, International Enterprise Singapore and the Ministry of Education. For more information, visit www.singaporeedu.gov.sg or email STB_Education_Services@stb.gov.sg.

About Contact Singapore

Contact Singapore is an alliance of the Singapore Economic Development Board and Ministry of Manpower. It aims to attract global talent to work, invest and live in Singapore. With offices in the Asia Pacific, Europe and North America, Contact Singapore is the one-stop centre for those who wish to pursue a rewarding career in Singapore, as well as individuals and entrepreneurs who are keen to invest in or initiate new business activities here. Contact Singapore actively links Singapore-based employers with global talent and provides updates on career opportunities and industry developments in Singapore. For more information, visit www.contactsingapore.sg.

SOURCE Singapore Tourism Board

CONTACT: H&S Public Relations, Aik Wye Ng, or Maria Castro, both for Singapore Tourism Board, +1-212-754-6500; or Singapore Tourism Board, Wen Ee Lim, +1-212-302-4861.

This is a news service of Thomson Business Intelligence Service ©2006.

CLICK HERE FOR THE ORIGINAL ARTICLE

PUBLISHED BY ‘INSURANCE NEWS NET’ (Malaysia)

Posted in BANKING SYSTEMS, COMMERCE, ECONOMIC CONJUNCTURE, ECONOMY, FINANCIAL MARKETS, INTERNATIONAL, SINGAPORE, THE FLOW OF INVESTMENTS | Leave a Comment »

RISKS WEIGH ON SPREADS AS US RESCUE PLAN SHIFTS (Singapore)

Posted by Gilmour Poincaree on November 13, 2008

Posted to the web on: 13 November 2008

Reuters

SINGAPORE — Market disappointment with the US Treasury’s proposed shift in the use of its bailout funds spilled over into Asian money markets today, freezing spreads and heightening uncertainty across assets.

Currencies and stock markets tumbled in Asia while interbank rates remained fairly elevated over policy rates, even rising slightly in markets such as Hong Kong. Japan’s central bank turned more aggressive in its support for the market, pumping in a heavier than normal amount through repo transactions starting next week.

The uncertainty stemmed as much from the US government’s plan to focus the remainder of its $700 billion bailout fund on making direct investments in financial institutions and shoring up consumer credit markets as from the upcoming meeting of the Group of 20 nations.

Leaders of the 20 industralised and emerging nations meet tomorrow in Washington. “The U-turn by Paulson is spurring fears that banks won’t be able to weather the persistent financial crisis without being able to offload the troubled assets off their books to another party,” said Sue Trinh, a strategist at RBC Capital Markets in Sydney.

“And a policy u-turn in an environment of heightened uncertainty does not help confidence, in that it simply adds to that uncertainty.” The US Treasury Department initially promoted the financial rescue package approved by Congress last month as a vehicle to buy illiquid mortgage assets from banks and other institutions to spur fresh lending.

However, that plan never got off the ground and US Treasury Secretary Henry Paulson told a news conference asset purchases were not the most effective use of the funds. Dollar funding rates were barely changed in Asia, quoting at 0,1 to 0,4% for overnight funds and 2,2-2,7% for three-month funds. Three-month dollar LIBOR fell to 2,1325% overnight

Analysts suspected other risk spreads would also cease narrowing, as they have been for weeks, while markets seek clarity on Treasury’s plans. The US TED spread, the spread between 3-month treasury bills and inter-bank rates, narrowed to 199 basis points yesterday, far below their widest level of 4,6 percentage points in October yet far wider than lows around a 110 basis points in September.

“The downtrend in the TED spread tells us that the panic in the money market is over,” ING economist Tim Condon said in a note. “However, we do not expect a normal TED spread to be restored as long as banks view their counterparties as dependent on government support. The TARP flip-flopping is unhelpful in that regard.”

Three-month Hong Kong inter-bank rates rose 10 basis points to 2,1372%, reversing a steady downtrend in place since late October, as Asian currencies fell and Hong Kong dollar forwards priced that bearishness in. Overnight-indexed swaps continued to drop, reflecting both an abundance of cash and expectations for rate cuts, despite the stickiness in inter-bank rates.

The spread between three-month dollar OIS and LIBOR fell to 163 basis points on Wednesday. In India, the one-month OIS was bid at 6,25%, compared with a 7,5% central bank overnight lending rate and 9,8% one-month interbank rate. Elsewhere, the Bank of Japan undertook aggressive funding operations to start on Monday, the first day of the new monthly reserve maintenance period when a temporary scheme of paying interest on excess reserves at the central bank will take effect.

The BOJ bought 2 trillion yen of JGBs in repo agreement for one day from November 17 to November 18 at 0,43%, and also bought ¥1,6-trillion of JGBs in repos for a week from Nov.17 at 0,46%, a tad lower from 0,48% at similar repo operations earlier in the week.

“The BOJ may be sending a message that it wants to ease repo rates in the new reserve period,” said a money market trader at a big Japanese bank. “The one-day repo operation is unusual and it may just be a technical smoothing operation, but could also be a signal that it will address a gap in supply whenever possible,” he said. The yen overnight call rate was trading around the BOJ’s 0,3% policy target.

CLICK HERE FOR THE ORIGINAL ARTICLE

PUBLISHED BY ‘BUSINESS DAY’ (South Africa)

Posted in ASIA, AUSTRALIA, BANKING SYSTEM - USA, BANKING SYSTEMS, CENTRAL BANKS, CHINA, ECONOMIC CONJUNCTURE, ECONOMY, FINANCIAL CRISIS - USA - 2008/2009, FINANCIAL CRISIS 2008/2009, FINANCIAL MARKETS, HONG KONG, INDIA, INTERNATIONAL, JAPAN, SINGAPORE, STOCK MARKETS, THE FLOW OF INVESTMENTS, USA | Leave a Comment »