The Star Online: Business
The Star Online: Business |
- Market gains at open, Proton shares rise
- US threat of Airbus sanctions excessive, says France
- Australia's trade surplus narrows in Oct
| Market gains at open, Proton shares rise Posted: 11 Dec 2011 06:28 PM PST KUALA LUMPUR: The local bourse's benchmark FBM KLCI opened Monday higher on a technical rebound after key US equity indices surged on a possible push by European policymakers for greater economic integration as well as a proposal to boost the European Financial Stability Fund. The index was up three-quarters of a percent to 1,471.13 at 9.30am while Asian markets saw gains in morning trade despite there being no definitive conclusion to the euro-zone sovereign debt crisis. Analysts at Hwang DBS Vickers Research said in a report that the local bourse might recoup parts of its cumulative loss of 28.9 points last week and would likely climb towards the immediate resistance line of 1,475 points ahead. They said among the counters that might ride on a market bounce-up today include Proton after the automaker's adviser Tun Mahathir Mohamad said Khazanah, which held a 42.74% stake, would be selling to DRB-Hicom at above market price with general ofer likely to be made. Other stocks that might see interest would be MBSB after reporting that the company should be able to achieve a pretax profit of RM500 million next year instead of 2015 as previously targeted. At Bursa Malaysia, Proton surged 14 sen to RM4.13, Genting added 18 sen to RM10.80, Petronas Gas gained 16 sen to RM14 and KLK was 50 sen higher at RM22.78. GAB added 20 sen to RM12.20 and BAT gained 50 sen to RM47.80. Spot gold hovered between gains and losses and traded in a range of US$99 to US$100 per ounce. Nymex crude oil traded in the range of US$1,708 to US$1,709 per barrel. The ringgit weakened against the US dollar at 3.153 and versus the euro at 4.210. Full content generated by Get Full RSS. |
| US threat of Airbus sanctions excessive, says France Posted: 11 Dec 2011 06:24 PM PST PARIS, Dec 11 (Reuters) A U.S. move to ask the World Trade Organization for permission to impose trade sanctions on Airbus, after rejecting a European Union plan to eliminate subsidies, is "excessive and premature", France's Trade Minister said on Sunday. The U.S. said on Friday it would ask the WTO to impose sanctions that could total $7 billion to $10 billion annually, marking a low point in the world's biggest trade dispute, largely centered on European aid for the Airbus A350 aircraft. "This reaction is excessive and premature," a statement from Trade Minister Pierre Lellouche's office said. "In any case, the U.S. can neither determine unilaterally if the European Union has put into action the conclusions of the Airbus (compliance) panel, nor is it allowed by the WTO to impose sanctions." An end to the battle over aircraft subsidies could be some way off and a negotiated settlement may be the most likely outcome. The EU has its own case against U.S. support for Boeing , and resolving that will be part of the final mix. But U.S. officials exploited a tactical advantage derived from the fact the WTO has already issued a final ruling in the U.S. case against Airbus subsidies, while the EU case against Boeing subsidies is pending. "We are very confident with regard to the outcome of this (EU) case ... for which the conclusions should be released soon," Lellouche said. The transatlantic aircraft dispute is the world's largest trade fight, affecting more than 100,000 jobs in an airplane market worth more than $2 trillion. In early December, the EU presented a plan to comply with a WTO appellate body ruling against European government support for Airbus in a case brought by Washington in 2004. Full content generated by Get Full RSS. |
| Australia's trade surplus narrows in Oct Posted: 11 Dec 2011 06:20 PM PST SYDNEY, Dec 12 (Reuters) Australia's trade surplus narrowed by more than expected in October as imports outpaced a flat export performance, and further slippage looms as Europe's crisis hits trade finance while China's redhot growth cools. Monday's data showed a surplus on goods and services of A$1.6 billion ($1.63 billion) in October, down from A$2.25 billion in September and short of market expectations. Imports rose 2.4 percent in the month while exports dipped 0.2 percent, though much of the difference was due to swings in gold shipments which are always an erratic item. Yet, the surplus for the 10 months to October was still a healthy A$16.5 billion, a tide of cash that is underpinning investment in the booming mining industry. "It tends to get overlooked but that is a lot of money flowing into the economy every month, pumping up incomes and giving resource companies the wealth to spend heavily," said Michael Workman, a senior economist at Commonwealth Bank. "It's also a bulwark against Europe, which is now forecasting almost no growth at all next year," he added. Europe's crisis was front and centre last week when the Reserve Bank of Australia (RBA) cut rates by a quarter point to 4.25 percent, the second easing in as many months. Explaining the cut, the RBA said trade across Asia had begun to feel the drag from Europe, while firms and banks were finding it harder to get financing. "This, together with precautionary behaviour by firms and households, means that the likelihood of a further material slowing in global growth has increased," warned RBA Governor Glenn Stevens on announcing the rate cut. With the crisis in Europe showing little sign of abating, markets are wagering the central bank will have to ease policy further next year, perhaps considerably. Interbank futures are fully priced for a cut to 4.0 percent at the RBA's next policy meeting in February and imply rates could be approaching 3 percent by midyear. Overnight indexed swaps are not quite so aggressive and imply the cash rate could trough around 3.5 percent late next year, an outlook most economists tend to favour. Even the chance of such an easing should offer support to the struggling housing market. Already, the drop of 50 basis points in mortgage rates will have cut around A$1,200 a year from payments on the average mortgage, making Australia's housing a little less expensive. Government data out Monday showed the number of home loans approved rose 0.7 percent in October, the seventh straight month of gains, though loans for construction remain subdued. COUNTING ON CHINA The weakness in housing is not necessarily a bad thing overall since it is making room for resource investment to enjoy a onceinacentury boom without stoking inflation. Deloitte Access Investment Monitor estimates a record 935 investment projects are planned or under way worth $894 billion, equal to 69 percent of Australia's A$1.3 trillion in annual economic output. Of these, 14 are multiyear projects worth more than A$10 billion, and five over A$30 billion, making them relatively resilient to shortterm swings in global growth. All this spending is set to greatly boost export volumes of iron ore, coal and liquefied natural gas, where the country is on course to be the secondlargest exporter of LNG by 2015. Earlier Monday, Chinese oil major Sinopec signed a deal with Australia's Origin to supply LNG out to 2035. Japan has also stepped up its demand as a replacement for nuclear power. The recent economic cooling in China, Australia's single largest export market, is clearly a risk to trade though the impact to date has been surprisingly limited. Figures out over the weekend showed growth in China's exports slowed in November, yet domestic demand for commodities remained strong. As a result, imports from Australia were up almost 37 percent on November last year giving China a trade deficit of $4.9 billion with Australia. Full content generated by Get Full RSS. |
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