The Star Online: Business
The Star Online: Business |
- Singapore's PM says annual GDP growth of 3% is good
- US stocks up, Europe anxiety remains
- U.S. urges Europe needs to leverage bailout fund
| Singapore's PM says annual GDP growth of 3% is good Posted: 20 Oct 2011 06:04 PM PDT SINGAPORE: An annual growth of 3 percent for the next 10 years should be considered a "good decade" due to changing global economic environment, Singapore's Prime Minister Lee Hsien Loong said as reported by Business Times. Lee also said that the city state should expect tougher competition going forward, especially in the battle for the labour market. "We must get used to 34 percent growth being a good year. If we can make 3plus percent per year over the next 10 years, we will have a good decade," Lee quoted as saying. He said growth was likely to slow down given constraints of population and space, as well as the government's effort to gradually reduce the inflow of foreign workers and immigrants. His remarks in parliament followed a central bank decision last week to ease monetary policy by containing the future pace of gains in its currency, intending to adjust to a slowing economy and still stubborn price pressures. Singapore's economy is expected to expand more slowly next year, and growth could be below its potential rate of 35 percent, the Monetary Authority of Singapore (MAS) said in its twiceyearly policy review. - Reuters For another perspective from The Straits Times, a partner of Asia News Network, click here. Full content generated by Get Full RSS. |
| US stocks up, Europe anxiety remains Posted: 20 Oct 2011 05:58 PM PDT NEW YORK (Reuters) - Stocks ended with modest gains on Thursday, shifting back and forth on incremental developments in Europe where leaders sought to reassure investors that a solution to the debt crisis would come soon. The S&P has alternated gains and losses for seven days at the close and has kept to a tight range as markets watch for the latest news out of Europe. Germany and France released a statement on Thursday saying leaders would now hold two summits to discuss the debt crisis, with a solution in place by Wednesday's second meeting. "The statement was enough for us to come off the lows, but there is still a long way to go," said Robert Pavlik, chief market strategist at Banyan Partners LLC in New York. Market anxiety remained elevated. The CBOE Volatility Index VIX <.vix>, Wall Street's "fear gauge," rose more than 1 percent to near 35, extending gains after rising nearly 10 percent on Wednesday. Supporting the market, U.S. economic data showed factory activity in the U.S. Mid-Atlantic region rebounded in October while a separate report showed U.S. jobless claims fell last week. On the negative side, other data showed a drop in sales of existing-homes last month and only a small rise in a gauge of future growth. Financial and materials stocks were the day's top gainers. The S&P 500 financial sector index <.gspf> rose 1.8 percent and materials <.gspm> climbed 1 percent. The Dow Jones industrial average <.dji> ended up 37.16 points, or 0.32 percent, at 11,541.78. The Standard & Poor's 500 Index <.spx> was up 5.51 points, or 0.46 percent, at 1,215.39. The Nasdaq Composite Index <.ixic> was down 5.42 points, or 0.21 percent, at 2,598.62. Progress by EU leaders toward a solution is considered vital for Wall Street stocks to break out of their trading range. The S&P 500 has struggled after reaching the top end of a two-month trading range at around the 1,230-1,250 level. Investors are also closely watching the developing U.S. earnings season. According to Thomson Reuters data, of the 109 companies in the S&P 500 that have reported earnings, 70 percent have topped analysts' expectations. After the closing bell, Microsoft shares fell 0.5 percent to $26.87 following quarterly results. During regular trading Microsoft finished at $27.04, down 0.3 percent. Ingersoll Rand Plc posted lower quarterly earnings, and its fourth-quarter profit forecast fell short of some Wall Street estimates, due to depressed housing and consumer markets, sending shares down 7.9 percent to $27.38. Polycom Inc fell more than 25 percent to $16.33 and weighed on the Nasdaq after the videoconferencing company reported quarterly revenue well below market expectations. The NYSEArca networking index <.nwx> lost 1.8 percent. Trading volume was about 7.8 billion shares on the New York Stock Exchange, NYSE Amex and Nasdaq, below this year's daily average of about 8 billion. On the NYSE, advancers beat decliners by a ratio of three to two, while on the Nasdaq, decliners beat advancers by a ratio of 12 to 11. |
| U.S. urges Europe needs to leverage bailout fund Posted: 20 Oct 2011 05:56 PM PDT WASHINGTON (Reuters) - Europe must find a way to give its bailout fund the firepower it needs to become a firewall that will block its financial crisis from spreading, a senior U.S. Treasury Department official said on Thursday. Testifying before the Senate Finance Committee, Under Secretary for International Affairs Lael Brainard said the 440-billion-euro ($600 billion) European Financial Stability Facility (EFSF) provides "quite substantial resources" that could be given more strength by leveraging it to make it more forceful. Europe should leverage the EFSF "to be credible in the market, and it needs to give them that overwhelming force where it takes the threat of defaults and bank runs off the table," she said. She added that there were a number of ways of doing so but did not specify a preferred method. France has argued the most effective way of leveraging the fund is to turn it into a bank that could use funding from the European Central Bank to guarantee some of the debts of struggling euro zone countries. But the ECB and Berlin oppose this and the proposal appears to be dead. An alternative would use the EFSF to guarantee a portion of potential losses on new euro zone debt and so aim to restore market confidence and convince investors that the debt of Italy and Spain remains safe to buy. European leaders will use a summit on Sunday to try to work out their differences. Brainard, who attended a Group of 20 finance ministers' meeting in Paris last week that focused on the European financial crisis, said it posed the most serious risk to the global recovery and also created "headwinds" for a fragile U.S. recovery. She told lawmakers, in response to questions about chances of overcoming it, that it was "a good sign" that European leaders were "intensively engaged" in trying to come up with a method for containing it. "I think they know ... this is an issue that the world cares a great deal about," Brainard said, adding it will be "the most important priority" when political leaders from the G20 meet in Cannes, France, on November 3-4. U.S. FEELING THE IMPACT Brainard said U.S. interest in Europe's well-being stems partly from the fact that U.S. recovery "remains fragile and all too vulnerable to disruption beyond our shores." More stability in Europe would bolster consumer and investment confidence that was shaken during the summer by a contentious debate over raising the U.S. debt limit and hurt more as the European crisis intensified. Brainard also pointed to China in discussing what is needed for the global economy to get on sounder footing. "With demand in the advanced economies likely to remain weak, it is essential for emerging economic powers, such as China, to play a bigger role in bolstering and sustaining global growth," she said. Countries with big current account surpluses should encourage more domestic consumption, she added, in a further clear reference to China. She also addressed the value of China's currency, which has been a topic of heated debate in the United States. Many U.S. lawmakers say China keeps its currency artificially low, giving it an unfair trade advantage. The Senate this month approved legislation to try to force Beijing to let the yuan rise, but Republican leaders in the House of Representatives have signaled opposition to the measure. Brainard said Treasury has "worked aggressively to pressure China" into letting its yuan currency appreciate more rapidly, which would likely encourage more consumption by Chinese consumers. "We have seen some progress on this front, with appreciation of over 10 percent in real terms bilaterally since June 2010 and 38 percent since 2005, but more is needed," she said. She said the yuan was still substantially undervalued. Brainard urged Congress to back U.S. support for international lenders like the International Monetary Fund and World Bank. "Our leadership at the international financial institutions could be at risk if Congress does not act to support our commitments to these institutions," she said. "Other nations, particularly China, are eager to take up our shares in these institutions if we do not meet our commitments." Full content generated by Get Full RSS. |
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