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Saturday, November 27, 2010

Asian Currencies Have Weekly Drop on North Korea Attack

Asian currencies had their biggest weekly loss in six months as an exchange of artillery fire in the Korean peninsula deterred investment in the region and European demand for debt crisis driven by dollars.
, Asia Dollar Index fell for a third week, its worst run since February, after North Korea bombed a South Korean island on November 23, prompting retaliatory fire. The euro fell Wednesday to a minimum of two months in Ireland negotiated a bailout of the European Union and led by the Financial Times Deutschland reported that policy makers in the region are taking Portugal to seek financial aid.

"Asian currencies have suffered the contagion in Europe," said Dariusz Kowalczyk, chief economist at Credit Agricole CIB in Hong Kong. "We also had an escalation of tensions in North and South Korea."

The won fell 2.2 percent this week to 1,159.63 per dollar in Seoul, its biggest drop in five months. Singapore dollar fell 1.9 percent to S $ 1.3208, the biggest drop since February 2009 and the Malaysian ringgit dropped 1.5 percent to 3.1630. The Asia index of the dollar, which is the region of 10 most used currencies except the yen, fell 1.1 percent to its lowest level in two months.

The won fell 1.9 percent yesterday after North Korea, through its state news agency KCNA, said that "the confrontation escalated lead to war." The aircraft carrier USS George Washington to start doing morning exercises off the Korean peninsula with warships from the South in a show of force that the North was warned countries "closer to the brink of war."

War Risk

"This is really a great risk for the entire region, resulting in a massive sale of cattle," said Minoru Shioiri, senior manager of forex trading at Mitsubishi Tokyo UFJ Morgan Stanley Securities Co. "People do not want to keep the cattle and other currencies in the region during the weekend when we do not know what will happen. "

The ringgit had its biggest weekly decline in six months, a central bank report showed the economy slowed more than economists expected in the third quarter. Gross domestic product rose 5.3 percent from a year earlier, below the 8.9 percent gain in the last three months and the median 5.9 %

"We both economic and geopolitical events have dented investor appetite for risk", said Murezani Wan Mohamad, Malaysia's Corp. analyst rankings in Kuala Lumpur.

GDP data

The Philippine peso fell 0.9 percent to 44.195 per dollar, a third weekly decline, as a November 25 report showed GDP unexpectedly fell 0.5 percent in the third quarter of the last three months. Economists surveyed by forecast 0.9 percent growth for the period.

China's yuan fell 0.42 percent this week to 6.6675 per dollar, its biggest drop since December 2008.

"There is more risk averse after the situation of Korea and the European debt crisis," said Claudio Piron, head of emerging Asia foreign exchange and fixed income strategy at Bank of America unit of Merrill Lynch in Mexico. "If you look across the region, all Asian currencies have weakened against the dollar."

Taiwan dollar fell 0.5 percent this week to NT $ 30.83, while Indonesia's rupiah dropped 0.8 percent to 9,013. Thai baht fell 0.8 percent to 30.20.

Asian stocks fell for third consecutive week

Asian stocks fell for third consecutive week after North Korea fired artillery shells in South Korea, swelling of the concern that tensions will increase.

Korean Air Lines Co., the largest line of the nation by market value, fell 5.4 percent in Seoul. Hyundai Motor Co., the largest automaker in South Korea's market capitalization, fell 6.9 percent. Sun Hung Kai Properties Ltd., the world's largest developer by market value, fell 6.1 percent in Hong Kong after the government announced new measures to prevent a bubble in real estate prices. Honda Motor Co., automaker of Japan's second largest by sales, slumped 1.9 percent.

The MSCI Asia Pacific Index fell 2.1 percent to 128.92 this week. The gauge slid on 23 November after reports of government and media that North Korea fired dozens of artillery shells in the territory of South Korea, his attack for the first time in half a century.

"The markets are taking on the likelihood of any further action by the North Koreans," said Tim Schroeders, who helps manage about $ 1 billion in Pengana Capital Ltd. in Melbourne. "What was initially rejected as a skirmish once is now making people a little nervous."

Kospi index in South Korea fell 2 percent this week, its biggest weekly decline since August. Hong Kong Hang Seng index sank 3.1 percent, the biggest decline among the major indexes of the Asia-Pacific.

The Shanghai Composite Index fell 0.6 percent in China, where the central bank raised the reserve ratio for the second time in two weeks to cool inflation. Australia S & P / ASX 200 fell 0.7 percent.

In Japan, where markets were closed Nov. 23 for a holiday, the Nikkei 225 Stock Average rose 0.2 percent, while the broader Topix index lost 0.3 percent.

Korean tensions

Tensions with North Korea have increased since the sinking of the warship Cheonan South Korea in March, which killed 46 sailors. On November 23 bombing of Yeonpyeong island, which killed four people and wounded 20, was the first of its kind since the Korean War from 1950 to 1953 and encouraged the president Barack Obama to send a U.S. aircraft carrier in the Yellow Sea to show support and strength.

North Korea warned that any "confrontation escalated" will lead to war, state news agency KCNA, said yesterday.

"A more bubbles of the tensions in Korea is another layer of uncertainty for markets that do not need to address," said Schroeder's Pengana. "It is not enough happening in terms of problems of European debt and inflation in China without having to deal with geopolitical tensions erupt.'s Probably just another trigger point for people to sell."

Hong Kong Property

The MSCI Asia Pacific index has changed little this month. It has risen 7.4 percent this year on speculation earnings growth will be higher than China's measures to tackle the fastest inflation in two years and the fiscal deficit crisis in Europe. Shares in the indicator value at 14 times estimated earnings on average, compared with 23 times at the beginning of the year.

A group of actions related to finance, including real estate companies, fell more than this week among the 10 industry groups in the MSCI Asia-Pacific, and Hong Kong developers led declines among groups Hang Seng Index Four industry.

Financial Secretary, John Tsang, on November 19 raised the stamp duty and deposits increased, however, tougher measures to curb the rise in home values, which have soared 50 percent since January 2009 . Hong Kong Monetary Authority Chief Executive Norman Chan, said the initial payment for some households will increase, the second hike this year requirements.

"The government measures to cool property prices are showing some effect, and developers are headed by a long decline," said Francis Lun, general manager of Fulbright Securities Ltd. in Hong Kong.

European shares had their biggest weekly decline in eight weeks

European shares had their biggest weekly decline in eight weeks as concern mounted peripheral euro area countries can not pay their debts and North Korea fired missiles in South Korea for the first time since the 1950-53 war.

Banks and insurers led the decline as investors waited to see how many loans Ireland European bailout fund, as the cost of insuring the Portuguese government debt rose to a record. Bank of Ireland Plc fell 45 percent, the biggest weekly fall in the benchmark Stoxx Europe 600 Index. Banco Santander SA fell 12 percent and BNP Paribas lost 8.5 percent.

The benchmark Stoxx 600 fell 1.1 percent last week, the biggest weekly decline since September. The meter has yet met the 15 percent from its low this year in May, investors speculated that the world economy will grow after the companies reported better than expected results and U.S. central banks Japan announced more measures to stimulate economic recovery to shore.

"After Ireland, Portugal is a likely candidate for aiding Spain's close," said John Plassard, head of European equities at Louis Capital Markets LP. "Amid these problems, the geopolitical problem between the two Koreas is the icing on the cake in a bad week."

Korean conflict

North Korea threatened a "terrible rain of fire" as the U.S. sent the nuclear-powered aircraft carrier USS Washington for the Yellow Sea for joint military exercises with South Korea. On 23 November, North Korea bombed a community of South Korean fishing and the military base on the island Yeonpyeong highly flammable ammunition that killed four people, including two construction workers, blew the windows of a school and burned houses.

In Europe, the cost of insuring the debt of the Portuguese and Spanish government against default rose to record levels, according to data provider CMA. Portuguese Finance Minister Fernando Teixeira dos Santos said that EU governments can not impose a rescue plan in his country even when speculation mounted that Portugal will eventually have to request one. Most governments in the euro region and the European Central Bank are urging Portugal to accept a rescue plan to halt the contagion spread to Spain, the Financial Times Deutschland reported on Friday.

Ireland Rescue

Irish officials hurried to complete a deal for an international aid package before financial markets reopen next week with talks focused on the situation of the bondholders in the largest banks in Ireland, amid concern that the government require that debt holders to share the cost of bailing out financial statements of the system. Finance ministers plan area to finalize an agreement on 28 November, a European Union official said on condition of anonymity.

The Bundesbank President Axel Weber, who is also a European Central Bank Governing Council member, said the rescue fund the EU has enough money to calm the markets and there is no alternative to European monetary union .

"I think we can rule out" the pessimistic scenario that the fund could be exhausted, Weber said in a panel discussion on Thursday in Berlin. "We will do everything possible to safeguard the existence of the euro," he said.

Bank of Ireland lost 45 percent amid concerns that the government will force a portion of the cost of rescuing banks in the country of the senior bondholders. The bank has 5.4 billion euros (7.2 billion) senior unsecured debt and a € 5,900,000,000 bonds guaranteed by the government.
Two people familiar with the situation said the lender may result in majority control of the state that the government inject more capital into the bank.

Santander, Mediobanca

Banco Santander, Spain's largest bank, shed 12 percent after calling on the European Commission to reject plans for global regulators require lenders to accumulate more capital in boom times. The bank urged the commission to take a different approach than that proposed by the Committee on Banking Supervision, or scrap the idea altogether.

Mediobanca SpA of Italy withdrew 9.9 percent, while France's BNP Paribas fell 8.5 percent.

De La Rue Plc fell 13 per cent of the company said it still "remains uncertainty" on issues of work being produced. De La Rue reported a 17 percent drop in first half revenue and removed from the Stoxx Europe 600 index.

Porsche Automobil Holding SE rose 15 percent after the automaker's profit from operations increased more than sevenfold in the first quarter.

Provident Financial Plc, the UK's largest lender high risk, rallied 12 percent after announcing spending cuts that the government will have a "modest" about their customers.

Shopping Capital Group Plc, the largest owner of shopping centers in Britain, rose 9.7 percent last week after saying Simon Property Group Inc. can provide more than 2.3 million pounds (3.6 billion ) in cash for the company.
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Emerging Stocks Decline for Third Week on Korea

stocks in emerging markets fell, sending the benchmark index to its third weekly decline on supply concerns China to control inflation, tensions between North and South Korea and Europe to the crisis debt global recovery will stall.

The MSCI Emerging Markets Index fell 1.6 percent to 1,081.06 until 5 pm in New York. The indicator fell 2.8 percent in the last five days, its third weekly decline and the longest losing streak since May.

South Korea's Kospi index fell 1.3 percent, while the Shanghai Composite Index fell 0.9 percent, the first decline in three days. Hungary Bux index fell 2.8 percent after the government moved to effectively nationalize private pension funds, so the indicator worst actor in the world today.

Brazilian Bovespa index fell 1.6 percent, ending the biggest weekly decline in almost five months, on signs that the central bank will raise interest rates and a deep concern that the global economy is weakening.

Chinese banks retreated, paced Industrial & Commercial Bank of China Ltd., amid speculation the government may reduce the rate of new loans next year. In South Korea, the defense minister quit, while the nation was preparing for joint military exercises with U.S. from November 28 after an artillery attack launched by North Korea this week. The won weakened 1.9 percent, ready for a third consecutive weekly decline.

"The same two subjects, peripheral Europe and Korea, are driving the negative sentiment," led the RBC Capital Markets analyst Nick Chamie, said in a report in today's emerging markets, adding that further selling pressure was "speak more than Chinese imminent rate hike."

OTP Bank Nyrt., Hungary's biggest lender, slid to 5.6 percent. The forint has depreciated 0.9 percent against the euro and 1.8 percent against the dollar.

Sell Recommendation Hungary

The Hungarian government plans in exchange for private assets of pension funds that the State is concerned the European Commission, Bruxinfo news website, citing the spokesman Amadeu Altafaj.

Hungarian assets must be sold by investors, given the "complete unpredictability" of government, Simon Quijano-Evans, the Vienna-based head of emerging markets strategy at Credit Agricole Cheuvreux SA, said in a note e-mailed .

The concerns of Portugal and Spain may join Ireland in search of a bailout of the European Union and the International Monetary Fund darker investor sentiment.

Brazilian Central Bank increased the benchmark rate to 12.25 percent from 10.75 percent in April to curb inflation, Bank of America Corp. said. Bank of America had forecast policy makers with the rate of 10.75 percent through 2011.

Turkey's ISE National-100 fell 1.5 percent, more than 8 percent from its record high reached on 9 November.

Polish WIG20 index lost 1 percent and Russia's MICEX index fell 0.3 percent.

The zloty slid 1.4 percent against the euro and 2.3 percent against the dollar. The rand lost 1.6 percent.

Oil fell to 1.3 percent, to $ 82.78 a barrel and copper fell 1.2 percent in London trading. Gold lost to 1.8 percent.

Indonesia, India

The difference between the yield investors demand to hold emerging market bonds and U.S. Treasuries widened 5 basis points to 252, according to JP Morgan Chase & Co. EMBI index.

Jakarta, Indonesia Composite Index fell 1.6 percent and the Philippine Stock Exchange index fell 1.1 percent. India's Sensitive Index, or Sensex, sank 0.9 percent.

The Shanghai index yesterday had retreated from 8.3 percent reached almost seven months on November 8 by the concern of monetary tightening will affect economic growth accelerated. The central bank last week ordered banks to set the largest reserves set aside for the second time in two weeks after rising interest rates in October, the first increase since 2007.

Southampton, New York Schools overpaid $ 1.91 million

New York City from Southampton, an access point for summer investment bankers on Wall Street and Hollywood stars, paid more than 1.91 million U.S. dollars in lieu of taxes to two Long Island school districts, Comptroller Thomas DiNapoli said.

Southampton 8.29 million U.S. dollars given to schools in the eastern end of Long Island, where the amount should have been $ 7,620,000, DiNapoli said in a statement today, citing an audit of payments made in the property free taxes of the coastal city. He said a third system underpaid and three fire districts.

"When governments and municipalities make mistakes, taxpayers suffer," said DiNapoli. The error stems from a misinterpretation of a 2007 change in the law under which cities make payments in lieu of taxes, DiNapoli said.

The city of about 55,200, attended by billionaire investor George Soros and film stars Renee Zellweger and Michael J. Fox, could have saved about $ 664,600 during the two years that were examined, according to DiNapoli's audit. The highest paying in excess of 1.76 million dollars, went to the Riverhead Central School District, said DiNapoli.

In its official response, the city said developing a "plan of corrective action." Southampton officials could not immediately be reached for comment today.