The Star Online: Business
The Star Online: Business |
- Wall Street hits 13-month low, Asian stocks continue fall Tue
- Japan finmin calls for transparent Greek rescue plan
- Ernst & Young reports US$22.9bil global revenue
| Wall Street hits 13-month low, Asian stocks continue fall Tue Posted: 03 Oct 2011 06:03 PM PDT NEW YORK (Reuters) - Stocks slumped in heavy volume to a 13-month low on Monday as investors dumped bank shares on fears that Greece's worsening financial crisis could cause a large European lender to fail. Investors pegged losses to the sharp fall in Franco-Belgian financial group Dexia, which fell 10 percent after a Moody's warning about its liquidity due to concerns about exposure to Greece. Markets have feared European officials will be unable to prevent Greece's fiscal crisis from turning into a global banking crisis. Greece said it will miss its deficit targets this year and next, which could limit the country's ability to receive more aid. "Most investors fear that markets in Europe are going to run well ahead of politicians that are not going to be able to get any kind of reasonable solution," said Jack de Gan, chief investment officer at Harbor Advisory Corp in Portsmouth, New Hampshire. U.S. banks have become a target for speculators. Morgan Stanley closed at its lowest since December 2008, and the cost to insure its debt has jumped as other banks hedge counterparty exposures and traders bet on the situation worsening. The recession that wiped 12 years of gains off the S&P 500 was caused in part by a credit crisis. "We are going to have a disorderly default in Greece and there could be another banking crisis in Europe as they are undercapitalized and loaded with (sovereign) debt," De Gan said. Morgan Stanley has been the most volatile bank in recent weeks, with the cost to insure its debt rising to November 2008 levels, according to Markit data. Morgan Stanley shares fell 7.6 percent to $12.47 and the S&P financial sector was down 4.5 percent. The market's focus on Morgan Stanley stems from a perception about their reliance on short-term funding, said Harbor Advisory's De Gan. "They rely on the credit markets and that was the downfall of Lehman and other institutions three years ago," he said. The Dow Jones industrial average dropped 258.08 points, or 2.36 percent, to 10,655.30. The S&P 500 fell 32.19 points, or 2.85 percent, to 1,099.23. The Nasdaq Composite lost 79.57 points, or 3.29 percent, to 2,335.83. The S&P 500 broke through a previously strong technical support level near 1,120 before hitting a 13-month intraday low just below 1,100. The benchmark is also down 19.4 percent from its closing high this year, nearly entering a bear market, which is defined as a 20 percent decline from its recent high set on April 29. A stronger-than-expected reading in a gauge of U.S. manufacturing briefly lifted Wall Street stocks, but global manufacturing shrank for the first time in over two years in September, reinforcing fears of another recession. The revelations that Athens would miss its deficit targets for both this year and next despite harsh new austerity measures will be the focus of talks as euro zone finance ministers meet to discuss the next steps toward resolving the currency area's sovereign debt crisis. Dexia called an emergency board meeting after concerns about its exposure to Greece and a Moody's warning about its liquidity position raised pressure on Belgium and France to act. Shares of AMR Corp , parent of American Airlines, lost a third of their market value as analysts debated the prospects for a bankruptcy filing for the U.S. airline, which lags its industry peers. More than 11 billion shares traded on the New York Stock Exchange, NYSE Amex and Nasdaq, about 38 percent above the year's current daily average of 7.98 billion. Declining stocks outnumbered advancing ones on both the NYSE and Nasdaq by a ratio of about 10 to 1. Reuters reports on Tuesday * TOKYO, Oct 4 (Reuters) The Nikkei average dropped over 2 percent in early trade Tuesday to its lowest in six months as trading companies fell on weaker commodity prices and the financial sector was pressured by fears that Europe's debt crisis is spreading. The Nikkei was down 2.1 percent at 8,369.08. The broader Topix index declined 2.2 percent to 730.71. * SEOUL, Oct 4 (Reuters) Seoul shares extended falls to more than 6 percent in early trade on Tuesday as investors dumped stocks amid deepening fears over Greece's debt crisis. Declines were led by banking stocks, with KB Financial Group shedding 7.9 percent and Shinhan Financial Group dropping 9.4 percent. The Korea Composite Stock Price Index (KOSPI) was down 6 percent at 1,663.22 points as of 0048 GMT, after hitting as low as 1,658.06 points, its lowest in a week. * SINGAPORE, Oct 4 (Reuters) Brent crude fell more than a dollar to below $101 a barrel, pressured by growing fears of a Greek default and a stronger dollar. Brent crude for November delivery dropped to an intraday low of $100.51 a barrel, down $1.20 in early Asia trading and within striking distance of an eightweek low. U.S. crude slipped $1.35 to $76.26 a barrel by 0042 GMT. "Brent crude continues to feel the weight of economic concerns as it appears that Greece will miss deficit targets and worries about the health of European banks remain," J.P. Morgan said in a research note. Oil, world stock markets and the euro have tumbled this week on rising concerns the debt crisis in Greece could spread to other countries and spark a global recession. * SYDNEY Oct 4 (Reuters) Australian stocks eased 0.5 percent on Tuesday, pressured by falls in global equities markets in a fresh flight from riskier assets, but losses were limited after steep declines on Monday. "Everyone is looking for a bottom at the moment, everyone is nervous," said Patersons Securities dealer Martin Angel. "It's going to continue to be volatile and you've just got to ride it through. People are talking about a massive slowdown in China but they are still going to need a serious amount of resources to keep their economy going," said Angel. Indeed, the top miners that export to China fared better on Tuesday than the major banks, where worries about the increased cost of funding pushed losses to between 0.2 percent and 1.0 percent, led down by National Australia Bank's 1 percent fall. The benchmark S&P/ASX 200 index was down 21.2 points at 3,875.8 at 2352 GMT. The index slid 2.8 percent on Monday in light trade. * New Zealand's benchmark NZX 50 index fell 0.4 percent to 3,301.9. Among the retailers David Jones slid 6 percent to A$2.85 and Just Jeans owner Premier lost 5.5 percent to A$5.10. * TAIPEI, Oct 4 (Reuters) Taiwan stocks fell 1.09 percent in early trade on Tuesday, following losses in regional bourses, on growing concerns Greece's worsening financial crisis could drag down the global economy. At the opening bell, the main TAIEX index dropped 76.73 points to 6,937.24, after closing down 2.93 percent in the previous session. Among the worst hit, construction , cement and banking all shed over 2 percent. The heavilyweighted electronics subindex was off 1.47 percent. The Taiwan dollar weakened by T$0.135 to stand at T$30.722. Foreign investors were net sellers on Monday, bringing their total selling at T$13.1 billion this month. |
| Japan finmin calls for transparent Greek rescue plan Posted: 03 Oct 2011 05:49 PM PDT Published: Tuesday October 4, 2011 MYT 8:49:00 AMTOKYO, Oct 4 (Reuters) Japanese Finance Minister Jun Azumi urged Europe on Tuesday to come up with a transparent scheme to resolve the Greek debt crisis, to help stabilise world economy and keep the euro from weakening too much against the yen. He told reporters after a cabinet meeting that Tokyo share prices are undervalued when looking at Japanese firms' actual strength, and renewed a pledge to tackle the yen's rises, saying they are becoming a destabilising factor for Japanese exporters. |
| Ernst & Young reports US$22.9bil global revenue Posted: 03 Oct 2011 05:44 PM PDT NEW YORK (Reuters) - Ernst & Young , the world's third-largest accounting and consulting firm, said its global revenues rose 7.6 percent in fiscal year 2011 as investments in emerging markets bore fruit. Helped by over 20 percent growth in markets such as Brazil and India, revenues rose to $22.88 billion for the fiscal year ended June 30 2011, up from $21.26 billion in 2010. A $1.5 billion investment program launched five years ago, the bulk of it earmarked for emerging markets, was a key driver of the results, Ernst & Young said in a statement. Revenues in Brazil grew 26 percent, while India's rose 22 percent, Africa's rose 19 percent and China's climbed 18 percent, Ernst & Young said. Global head count rose by nearly 11,000 to an all-time high of 152,000. Ernst & Young is one of the "Big Four" audit firms, ranking behind PwC and Deloitte and ahead of KPMG in global revenues. Like its rivals, Ernst & Young has taken advantage of resurgent demand for consulting and advisory work as revenues from traditional audits leveled off. Advisory and consulting revenues at Ernst & Young rose 17.5 percent in fiscal 2011 to $4.3 billion, while audit and related services rose 5 percent to $10.6 billion. Revenues from tax services rose 6 percent to $6.0 billion and transaction advisory services revenue rose 7.7 percent to $2.0 billion. The fast-growing consulting businesses of the Big Four have raised eyebrows among some European Union authorities, who are considering curbs on non-audit services to prevent potential conflicts of interest. A draft European Union law that was leaked last week called for sharp restrictions on non-audit work. |
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