ASEAN KEY DESTINATIONS
After strong gains in the USA all Asian markets will set new highs today, Malaysia to may turn around constant losses.
Bangkok posted strong gains today the SET rose 1.77 per cent, or 13.34 points, to close at 765.54, despite ongoing protests in Bangkok. Coal producer Banpu rose 6 baht to close at 614 baht, and energy giant PTT plc rose 4 baht to finish at 250 baht.
Yesterday EHIM New York said in a press conferance Thai stocks remained highly undervalued and the market was going to move higher in 2010. Japanese investors also expressed positive sentiment on Thai investments.
Shayne Heffernan of EHIM said Bangkok remained a prime candidate to take the leading role in ASEAN’s finabcial sector.
Manila was flat, edging up 2.92 points to 3,088.05. Philippine Long Distance Telephone Co was up 1.8 per cent to 2,580 pesos while Bank of the Philippine Islands was up 1.1 per cent to 46 pesos, although Aboitiz Power Corp fell 6 per cent to 11.75 pesos.
Jakarta gained a massive 3.25 per cent, or 86.65 points, to 2,756.26. Bank Central Asia rose 11.5 per cent to 5,800 rupiah, Telekomunasi Indonesia gained 3 per cent to 8,600 and coal miner Bumi Resources gained2 per cent to 2,560 rupiah.
In Singapore the main index rose 0.77 percent, led by an 0.8 percent gain in each of both top lender DBS Group Holdings (DBSM.SI) and United Overseas Bank.
Kuala Lumpur, the index fell for a fourth session, losing 0.06 percent to its weakest since March 5, led by a more than one percent slip in Telecoms shares.
US stocks climbed overnight, pushing the Dow to a recovery high, after a benign February inflation reading buttressed the Fed’s renewed vow of low interest rates.
Data from the Labor Department prior to the market open showed a steeper-than-expected drop in the February Producer Price Index, indicating inflation pressure was minimal and further supporting the near-zero interest rates that have helped propel the rally in equities.
The Dow industrials rose for a sixth consecutive session on Tuesday to reach a 17-month high, and the S&P 500 and the Nasdaq Composite also hit fresh multi-month highs.
The winning streak for the blue-chip Dow is the longest since an eight-day run in August 2009, which saw the index rise 4.9 per cent. In the last seven session to Wednesday’s intraday high, the Dow is up 2.04 per cent.
Investors expect the S&P 500 to rise 10 per cent during 2010, according to a quarterly Reuters poll published Wednesday.
The Dow Jones industrial average gained 80.64 points, or 0.75 per cent, to 10,766.62. The Standard & Poor’s 500 Index rose 10.14 points, or 0.87 per cent, to 1169.60. The Nasdaq Composite Index climbed 19.88 points, or 0.84 per cent, to 2397.89.
Coal miner Massey Energy Co advanced 6.6 per cent to $US53.54 a day after it announced the acquisition of privately held Cumberland Resources Corp. Massey Energy led gains in the S&P energy index, which rose 1.4 per cent.
US crude oil futures rose 1.5 per cent to $US82.90 a barrel after the latest inventory data, which showed fuels inventories fell more than forecast last week.
Hartford Financial Services Group Inc gained 5.2 per cent to $US28.67 a day after the company announced a plan to repay the US Treasury.
Discover Financial Services also said it would repay government bailout funds late Tuesday. The stock edged up 0.3 per cent to $US15.35 while the S&P financial sector rose 1.4 per cent.
Federal Reserve Chairman Ben Bernanke has begun his defence before a Congressional committee of the central bank’s role in supervising smaller banks, which it would lose in regulatory reform proposals.
The USA is still making a great deal of noise about China and the RMB, fact is the USA have been using a low dollar policy for a long time, it seems though they do not think it is fair when others do the same. Many U.S. lawmakers, with strong backing from rented economists, believe the yuan is undervalued by at least 25 percent, giving Chinese companies an unfair edge in trade — one seen as more critical now that the U.S. economy is struggling to recover from the worst downturn since the 1930s.
The heat is rising quickly in the long-running dispute over China’s exchange rate regime, with a bipartisan bill introduced on Tuesday in the U.S. Senate that aims to press Beijing to let its currency rise in value.
The administration forgets that on Feb 4 2005 The American Federal Reserve Chairman Alan Greenspan indicated that the United States might continue to carry on a weak dollar policy to check the roaring of the American trade deficit.
He told a meeting of Advancing Enterprise 2005 in London on the eve of a finance ministers’ conference of the world seven richest industrialized nations that a weaker dollar and tougher budget discipline, among others, may finally start to restrain the trade deficit.
Now in 2010 key committees of the U.S. Congress are setting hearings at taxpayer expense this month on the currency issue, the bill’s co-author, Democratic Senator Charles Schumer, said his move to “wake up this administration” enjoyed broad support in Congress but ignored the ongoing use of a low dollar policy in the USA.
“The time is right. Everyone is fed up,” he said.
“Now everyone knows that China is stonewalling,” he told Reuters, contrasting his new effort with a 2005 push for a bill that was set aside as Washington tried dialogue with Beijing.
The managing director of the International Monetary Fund, Dominique Strauss-Kahn, added to the pressure on Beijing, saying that the yuan is undervalued.
Focusing on the yuan will not help to solve problems in the Sino-U.S. bilateral trade relationship, a Chinese Commerce Ministry official told Reuters.
“We oppose the over-emphasis on the yuan’s exchange rate,” the official said, when asked about the bill. “The yuan’s exchange rate is not a magic potion for solving global economic imbalances.”
In Geneva, a senior China diplomat said the U.S. lawmakers were unfairly blaming Beijing for their own woes.
“They should not blame the problems they have by finding a scapegoat in China,” He Yafei, China’s new ambassador to the United Nations in Geneva, told a briefing.
The apparent hardening of positions drove the yuan to a three-week low against the dollar in the offshore forwards market, implying just 2.4 percent of appreciation over the next 12 months.
Ding Zhijie, a professor at the University of International Business and Economics in Beijing, said U.S. pressure on the exchange rate was “totally counter-productive.”
“With such heavy pressure from the United States, any move would look like giving in to foreign pressure — for both the Chinese government and the Chinese public, it would be unacceptable,” said Ding, who provides advice to the government.
China’s official Xinhua news agency said Washington was making Beijing unfairly carry the blame for U.S. economic woes ahead of Congressional elections in November.
“With the U.S. mid-term elections looming, electoral politics have again become the priority of the Obama administration,” said the commentary.
Focusing on China’s yuan currency can create “a clear target, offering an explanation to the unemployed of why they lost their jobs,” it said.
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