The Star Online: Business
The Star Online: Business |
- Support Line
- ECB spent US$18.8 billion on bond buys last week
- Swiss bankers oppose another US tax treaty
| Posted: 05 Sep 2011 05:13 PM PDT K.M. Lee writes on Denko Industrial Corp, Mieco Chipboard and TDM DENKO Industrial Corp shares hit an intra-day high of 54 sen, the best since October 2004, amid follow-through buying yesterday. The moving average convergence/divergence histogram is firmly bullish, implying there may be more upside. A break above the 60 sen mark may propel it to the 80 sen level in the medium term. Solid support is expected at 36 sen.
MIECO Chipboard touched a 12-month low of 40.5 sen on Aug 9 before recovering on mild bargain- hunting interest. Based on the daily bar chart, the prevailing trend is bearish. If the initial support of 37 sen is violated, the next downside to look for would be at 30 sen. The immediate upside is capped at the 50-day simple moving average of 50 sen.
TDM gained for the third straight day, up four sen to RM2.99 yesterday. The positive reading suggests more advances in the short term. A decisive penetration of the RM3.20-RM3.22 barrier may lead to a re-test of the recent rally peak of RM3.42. Support is envisaged at the RM2.80 level.
● The comments above do not represent a recommendation to buy or sell. |
| ECB spent US$18.8 billion on bond buys last week Posted: 05 Sep 2011 05:07 PM PDT FRANKFURT, Germany (AP) - The European Central Bank stepped up its emergency bond purchases last week to keep the eurozone debt crisis from infecting Italy and Spain. The move, however, was accompanied by a warning to governments that the support is temporary. The 13.3 billion ($18.7 billion) purchases announced on the bank's Twitter feed Monday were double the 6.65 billion spent the previous week. The bank has been buying Italian and Spanish government bonds since Aug. 8. The purchases hold down the interest yields on the bonds, and have kept bond market turmoil from pushing those countries over the edge while European political leaders struggle to come up with more permanent fixes. Bank of Italy head Mario Draghi, who will take over as head of the ECB Nov. 1 from Jean-Claude Trichet, said that the purchases would continue but warned they are not a permanent solution. "The program is temporary," he said according to a text of remarks prepared for a Paris conference. "It cannot be used to circumvent the fundamental principle of budgetary discipline... in other words it should not be taken for granted by member states. " He and Trichet urged governments to move ahead with agreed plans to reduce debt and ease the fears of default that are roiling markets. Leaders agreed on July 21 to give the eurozone's 440 billion bailout fund the authority to take over the bond purchases, help bail out banks and quickly loan to troubled governments. But approval by national parliaments has been delayed by August vacations and some politicians are against the new measures. One of the government parties in euro member Slovakia says a vote may not take place until December. Slovak Finance Ministry spokesman Martin Jaros, however, said Monday that the vote is still expected as soon as possible, in late September or early October. "We realize the urgency of the situation," he said. Greece, Ireland and Portugal have already needed bailouts from other eurozone governments after being unable to refinance expiring debt at affordable rates. Italy, the eurozone's third-largest economy, is regarded as too large to bail out. The bank's bond purchases are risky since they take more risk onto the bank's balance sheet in case of the country's defaults. They are also seen by some as blurring the line between monetary policy and budget policy, since the central bank is indirectly supporting the finances of indebted governments. |
| Swiss bankers oppose another US tax treaty Posted: 05 Sep 2011 05:05 PM PDT GENEVA (AP) - Swiss banking officials lashed out Monday at the possibility of yet another tax treaty with the United States aimed at handing over the details of more Americans suspected of using Swiss banks to cheat on their taxes. The chairman of the Swiss Bankers Association, Patrick Odier, urged the Swiss people and the government to "put up a united front" and work out a solution that applies to all countries. He said that U.S. and Swiss politicians must work with existing accords. "The solution must be globally applicable, be definitive and correspond to existing Swiss law," Odier told the association at a meeting in Basel, Switzerland, according to his prepared remarks. "A second bilateral treaty has to be avoided and the U.S. needs to respect this." A double taxation agreement was approved by Switzerland in 2009 but is still awaiting ratification by the U.S. Senate. The United States last year forced Switzerland to agree to a separate bilateral tax treaty - and to break its own banking secrecy laws - in order to prevent the country's biggest bank, UBS AG, from facing damaging civil litigation in U.S. courts for helping thousands of Americans hide money in offshore accounts. UBS was forced to hand over the names of thousands of American account holders and pay a $780 million fine in a landmark case that pierced Switzerland's storied tradition of banking secrecy. Swiss lawmakers are due to approve a revised tax agreement with the U.S. this fall. But Switzerland now fears that U.S. officials may try to bring charges against one or more Swiss banks, including Credit Suisse Group, if the country does not divulge more details on how many Americans may have used Swiss banks to avoid paying U.S. taxes. "The United States is trying to build up pressure. It's looking for someone to pay its debts and finance its wars," Christophe Darbellay, head of the centrist Christian Democratic People's Party, was quoted as saying by the Zurich daily Blick on Monday. The Swiss government has also faced similar pressure outside the United States, and has recently signed revised agreements with several countries, including Germany and Britain, to provide greater help to foreign tax authorities seeking information on their citizens' accounts in the Alpine nation. Taken together, the moves have been widely seen as the beginning of the end of Switzerland's strict policy of noncooperation with foreign tax authorities. "The U.S. should take the tax agreements with Germany and the United Kingdom as an example. Bilateral problems between friendly nations should be solved by mutual agreement," Odier said. The agreements with Germany and Britain were both reached in August. Swiss banks will pay an up-front guarantee of 2 billion francs (nearly $2.7 billion) to Germany and 500 million Swiss francs ($630 million; 385 million pounds) to Britain. German residents who haven't previously declared existing assets in Switzerland will have the chance to make a one-time tax payment between 19 and 34 percent of those assets, or to declare them to German authorities. Similarly, British clients will have the option of making an anonymous one-time payment for past taxes owed or declaring their assets to British authorities. The Swiss Bankers Association also said there could be rough times ahead because of the strong franc and new banking requirements to boost capital holdings. The value of the franc has risen sharply as a safe haven for investors, but that has made Swiss exports and tourism more expensive, driving down profits. Banks must also meet new rules to gradually increase their capital cushions, eating into the amount they can invest. But the trade group reported that Swiss banks' combined assets rose slightly to 2.7 trillion francs, and generated earnings of 61.5 billion francs in 2010 - an increase of 13.4 percent in earnings on the year. The Swiss currency almost reached parity with the euro before the Swiss National Bank stepped in last month by pumping francs into the markets. Switzerland's government says the country's currency is still too strong, despite measures taken to make it less attractive to foreign investors. On Monday, the exchange rate was 1.10 francs to the euro. The SNB says its next scheduled "monetary policy assessment" will be Sept. 15. |
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