The Star Online: Business
The Star Online: Business |
- Public Bank leads KLCI higher, local funds support
- Euro hit by dovish ECB, stocks await U.S. jobs data
- JPMorgan To Stop Making Student Loans
| Public Bank leads KLCI higher, local funds support Posted: KUALA LUMPUR: Public Bank led the FBM KLCI higher early Friday, as investor sentiment perked up amid a firmer broader market, supported by local funds as foreign institutions continued to exit. At 9.37am, the KLCI was up 2.5 points to 1,723.46. Turnover was 178.43 million shares valued at RM124.24mil. There were 148 gainers, 112 losers and 172 counters unchanged. Stock market data showed local funds were net buyers at RM183.90mil while retail investors were net sellers at RM22.3mil and foreign funds sold net RM161.60mil. Public Bank and Public Bank foreign rose eight sen each to RM17.40 and RM17.42 while Allianz gained 10 sen to RM10.20 and insurer AFG seven sen higher at RM5.13. Aeon Credit was the top gainer, adding 30 sen to RM15.50 while Pos Malaysia added 17 sen to RM5.16 on dividend hopes. |
| Euro hit by dovish ECB, stocks await U.S. jobs data Posted: SYDNEY: The euro languished at seven-week lows on Friday in the wake of dovish comments from the European Central Bank, while a jump in U.S. bond yields underpinned the dollar and kept Asian stocks in check. Investors were also sidelined ahead of U.S. payrolls data that should cement the case for the U.S. Federal Reserve to begin scaling back stimulus later this month. MSCI's broadest index of Asia-Pacific shares outside Japan was flat in early trade, following a 0.4 percent gain on Thursday. It was on track to end the week up more than 2 percent. Tokyo's Nikkei eased 0.2 percent, but was still up more than 5 percent this week. The euro wallowed at $1.3118, having slid more than a full U.S. cent to be 0.8 percent lower on the week. Against the yen, it retreated to 131.26 from a near two-week peak of 132.14. Investors sold the common currency after the ECB said it stood ready to act if needed to bring money market rates down and help nurture a "very, very green" recovery. ECB President Mario Draghi made those comments as global government bond yields have risen sharply, tracking U.S. Treasuries in expectations for the Fed to start withdrawing support. Indeed, U.S. 10-year note yields hit 3.0 percent on Thursday for the first time since July 2011, having jumped from near 1.6 percent in four short months and providing a major support for the dollar in the process. The greenback popped back above 100 yen to return to levels not seen since late July. Coupled with a weaker euro, the dollar scaled a seven-week peak against a basket of major currencies. Latest U.S. data showed a solid expansion in the services sector, while private employers added 176,000 jobs in August, suggesting that non-farm payrolls could be surprisingly strong. Some analysts said payrolls in line with expectations of 180,000 new jobs would likely be enough for the Fed to start tapering stimulus at the Sept 17-18 meeting. "With the release of the non-farm employment change and the official unemployment rate tonight, the prospect of tapering in 11 days time is growing ever larger," said Evan Lucas, market strategist at IG in Melbourne. Worries about reduced central bank support have weighed on demand for gold and riskier assets, with emerging markets in the targetted by investors. Indonesia has had to raise interest rates to support the collapsing rupiah currency, while India's new central bank boss this week impressed some with an unexpectedly detailed and wide-ranging plan that saw the rupee and stocks rally on Thursday. The top five emerging market powers: Brazil, Russia, India, China and South Africa (BRICS) have also pledged to set up a $100 billion fund to stabilise currency markets. However, it looked unlikely to be in place soon enough to temper the effects of an expected pullback of U.S. stimulus. The Group of 20 emerging and developed powers gathered in St. Petersburg for a summit struggled to find common ground over the turmoil faced by emerging markets. "Our main task is returning the global economy towards steady and balanced growth. This task has unfortunately not been resolved," Russian President Vladimir Putin said. Leaders at the summit also had to contend with the tough question of whether to support U.S. military strikes in Syria. There is little in the way of market-moving economic news out of Asia, leaving the focus squarely on U.S. jobs data due at 1230 GMT. - Reuters |
| JPMorgan To Stop Making Student Loans Posted: NEW YORK: JPMorgan Chase & Co has decided to get out of the student loan business, after the biggest U.S. bank concluded that competition from federal government programs and increased scrutiny from regulators had limited its ability to expand the business. JPMorgan, which already restricted student loans to existing Chase bank customers, will stop accepting applications for private student loans on October 12, at the end of the peak borrowing season for this school year, according to a memo from the company to colleges that was reviewed by Reuters on Thursday. Final loan disbursements are expected before March 15, 2014. "We just don't see this as a market that we can significantly grow," said Thasunda Duckett, chief executive for auto and student loans at Chase, in an interview. Not making more loans "puts us in a position to redeploy those resources, as well as focus on our No. 1 priority, which is getting the regulatory control environment strengthened," Duckett said. JPMorgan's decision comes after Congress acted in mid-2010 to bypass the banks and have the government lend directly to students. The federal government now issues 93 percent of student loans. Banks and other private lenders have also come under pressure from regulators and politicians to offer more flexible repayment terms on student loans. JPMorgan's portfolio has been shrinking by roughly $1 billion to $2 billion a year since then, and is a small fraction of its assets. The company's student loan portfolio at the end of June held $11 billion - less than 0.5 percent - of its $2.44 trillion of assets. Last year, Chase made education loans to 12,500 people for a total of about $200 million. Hundreds of thousands of students, however, still look to private lenders when they have exhausted their federal borrowing limit. Richard Hunt, president of the Consumer Bankers Association, said decisions like JPMorgan's show that the government's direct lending policies are leading to "less competition in the marketplace." He said the government programs encourage students to take on more debt than they can afford because the loans, unlike those made by banks, do not require assessments of the ability to repay. But many experts have said that the primary problem with student lending lies in how much college costs and in the sheer size of the debt taken on, not in who makes the loans and how they are structured and how much they cost in interest. Moreover, others may fill in the gap. Other major lenders that remain in the business include SLM Corp<SLM.O>, known as Sallie Mae; Wells Fargo & Co <WFC.N>; and Discover Financial Services <DFS.N>. Both Wells and Discover said on Thursday that they would continue to make student loans. Danny Ray, president of Discover Student Loans, said although competition from the government has taken business from lending for graduate studies, his bank found more demand from undergraduate students who have already reached their government borrowing limits and are still short of the money they need. Credit unions could also use exits by banks such as JPMorgan as an opportunity to do more business. Many entered the market in 2010 and have made about $2 billion of student loans since then, according to Paul Gentile, executive vice president of the Credit Union National Association. JPMorgan's decision follows a broader, ongoing review of businesses amid new regulations, heightened scrutiny and capital requirements. In July, the bank said it would exit physical commodities trading, as Wall Street's role in the trading of raw materials comes under political and regulatory pressure. In June, the bank said its private equity unit, One Equity Partners, would become independent, as it increased its focus on client businesses. At the time, a source said the move was also driven by the bank's decision to simplify its operating structure.- Reuters |
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