"Instead of the big names , now I would like to look for luxury goods that cost me less but suit me more ," she said .
Monday, 30 December 2013
China: Luxury market faces smarter consumers
Chinese Investors Flee Stock Markets Ahead of IPO Resumption
Chinese investors are fleeing the country's stock markets amid year-end money shortages and concerns over the IPO resumption early next year.
The country's A-share markets together have seen capital outflow of 110billion yuan for the first 27 days in December, which is 87.16 percent higher than that of November and compared with a net inflow of 727.9billion yuan during the same period of last year, the Chinese Securities Journal reported.
Investors are pulling their money out of China's stock markets ahead of January's IPO resumption which is expected to unleash Chinese companies' fund-raising appetites which have been held back for a year.
About 50 Chinese companies are expected to have finished all IPO procedures and be listed before the end of January 2014. More than 760 companies are in line for approval, and it will take about a year to audit all the applications.
Regulators' recent decision to expand the over-the-counter stock market and open the floodgate of refinancing for those traded on ChiNext, China's Nasdaq, added to investors' concerns over worsening capital conditions, the paper noted.
The withdrawal came at a time of frequent liquidity squeezes in China's financial system since June which pushed up money market rates and expected annualized returns of wealth management products (WMPs). The annualized return of a 96-day WMP launched by China Industrial Bank last week hiked 7.6 percent.
The paper said expected lower economic growth next year is another reason why investors should be worried.
Economists expect China's economy to grow at a slower pace in 2014 due to the government's effort to push ahead with reforms, upgrade the country's economic structure and reduce excessive capacity and leverages in some industries.
Source: Caijing
Wrong book led to turning new leaf
China SOEs Lead in Market Capitalization Loss this Year
Among 100 listing companies posting the biggest losses in market capitalization this year, 38 are state-owned enterprises (SOEs), according to data from financial data provider Wind Info.
The SOEs, all run by the central government, lost a combined 1.3 trillion yuan this year at the end of December 23, with PetroChina (SSE:601857), China Shenhua Energy (SSE: 601088), Industrial and Commercial Bank of China (SSE: 601398) and China Life Insurance (SSE:601628) paring over 100 billion yuan, Wind data showed.
PetroChina lost 220.2 billion yuan in value, or 600 million yuan every day, to stand at 1.24 trillion yuan close to the year-end while its rival Sinopec also nudged into the top ten spot for the biggest losers.
Market capitalization of both the Shanghai Stock Exchange and Shenzhen Stock Exchange rose from 22.94 trillion yuan at the start of the year to 23.39 trillion, according to Wind. Specifically, 1,652 companies saw their value rise and 811 witnessed fall in value.
Leading liquor makers, including Jiangsu Yanghe Brewery JSC, JIugui Liquor, Shanxi Fen Wine, were among the hardest-hit companies, with their market capitalization more than halved from earlier this year.
Comparing with SOEs' weak equity market performance, an official with China's state-asset regulator said yesterday that the central government-run SOEs were expected to deliver a "strong" profit aggregate of roughly 1.3 trillion yuan this year.
"Against the backdrop of uncertainties both home and abroad, it is really not easy for such achievements," said Huang Shuhe, deputy director at the State-owned Assets Supervision and Administration Commission, Xinhua reported.
Perú espera 3,6 millones de turistas y 4.000 millones de dólares en 2014
Las autoridades de Perú consideran que el paÃs recibirá durante 2014 unos 3,6 millones de turistas, que generarán 4.000 millones de dólares en divisas, afirmó hoy el viceministro de turismo, José Miguel Gamarra.
"El crecimiento en la llegada de turistas en 2014 será de un 13 a 14 por ciento comparado a lo registrado en este año, que es de unos 3,2 millones de visitantes", declaró Gamarra a la agencia oficial Andina.
El viceministro aseguró que entre los factores que impulsan el crecimiento del turismo está "la imagen positiva" que proyecta Perú como destino de inversiones y de negocios por su expansión continua.
Gamarra dijo que su paÃs se está posicionando a nivel internacional como un centro estratégico para la celebración de congresos y convenciones.
"Ya se están realizando en Lima eventos que conglomeran 6.000 participantes, quienes vienen con sus acompañantes que realizan tours después de los eventos, viajan al interior del paÃs y generan beneficios adicionales al sector", señaló.
Según datos de la Cámara Nacional de Turismo (Canatur), difundidos por Andina, este año se celebraron en el paÃs 53 encuentros internacionales que reunieron a cerca de 10.000 participantes. EFE
Xiaomi reports monthly revenues of $4.9 million from its MIUI Android ecosystem
Today Xiaomi, up-and-coming Chinese smartphone revealed two important figures that serve as the strongest benchmarks to assess its domestic success.
First, in a post on Xiaomi’s excellent official blog (hat-tip Marbridge Daily), the company revealed that its Android-based MIUI software has over 30 million users. This includes Xiaomi phone buyers as well as those who have installed the software on their Android phones as a ROM. The company points out that this means that one in every 48 people in China have MIUI installed on their devices, if you assume that China has a population of 1.4 billion people – a subject that’s best suited for other blogs.
Second, and more importantly, the company states that it receives over RMB 30 million (about $4.9 million) in monthly revenue from apps, games, and theme customizations installed on MIUI.
Why is this number so significant? Because these apps and services are a core component of Xiaomi's profits . The company sells its devices at near-production cost as a means to put its software ecosystem in consumers’ hands, while also selling a wide range of accessories.
The now-trademark flash sales which have helped Xiaomi attract international attention serve as great marketing. They are also central to its production strategy, in which it only produces what it intends to sell. But unless Xiaomi consumers buy Xiaomi’s software, the number of Xiaomi devices in peoples’ hands (never mind the speed at which the phones reach them) is largely irrelevant.
Currently, Xiaomi’s ecosystem in China consists of a theme store, an app storea,book store, a games center cloud storage services , a messaging app, and a browser. In the blog post, Xiaomi representative Hong Feng states that next year the company will “improve the integration between its smart devices and real-life services.”
The first test will simply see whether or not the company can successfully sell its phones to consumers. This ought to be easy – as long as it can effectively communicate to consumers that it sells top-end hardware at bargain-bin prices, it should have no trouble moving units (assuming other firms don’t successfully squeeze it out by employing the same strategy).
The second, more difficult test will see whether or not the company can earn revenues abroad from its software offerings. This will require an extensive network of dedicated developers from around the world that are willing to create products tailor-made for MIUI. These apps and services must also exceed those that Google already offers in the Google Play store, which only offers free apps and is partially blocked in China (like many other Google services). Fostering this community could prove to be challenging (though there are certainly plenty of dedicated MIUI developers in China – Xiaomi says “tens of thousands” in the blog post).
Xiaomi is on track to sell 20 million smartphones for the year 2013, aiming for total revenues of over $5 billion. In 2012 the company sold over 7 million phones, and earned over $2 billion in annual revenue.
TECHINASIA
Unrealpolitik in Russia and China
In Ukraine, Russia must choose what kind of relationship it wants to have with Europe. If Ukraine returns to the Kremlin’s orbit, whether through direct reintegration or some kind of “Finlandization,” Russia will end up reenacting an old European problem: like France from 1643 to 1815 and Wilhelmine Germany, it will be both “too much” for its neighbors and “not enough” for its ambitions.
Leaving aside why Russia should want to pay so much money to sustain a Ukrainian regime that is even more corrupt and dysfunctional than its own, Ukraine, with a territory greater than France and a population of 45 million, is the de facto linchpin of Europe’s geopolitical equilibrium. Unlike Poland three times in the eighteenth century, there can be no question of partition, with western Ukraine joining Europe and the country’s east returning to Russia. As a result, Ukraine’s civilizational choice – between a democratic European Union and an autocratic Russia – will necessarily have major strategic consequences for the entire European continent.
Source: Project Syndicate. By Dominique Moisi, Senior Adviser at The French Institute for International Affairs (IFRI) and a professor at L'Institut d’études politiques de Paris (Sciences Po).
Leaving aside why Russia should want to pay so much money to sustain a Ukrainian regime that is even more corrupt and dysfunctional than its own, Ukraine, with a territory greater than France and a population of 45 million, is the de facto linchpin of Europe’s geopolitical equilibrium. Unlike Poland three times in the eighteenth century, there can be no question of partition, with western Ukraine joining Europe and the country’s east returning to Russia. As a result, Ukraine’s civilizational choice – between a democratic European Union and an autocratic Russia – will necessarily have major strategic consequences for the entire European continent.
The Chinese seem now to be displaying an impatience that is contrary to their country’s long-term interests. China’s heightened global status is obvious and recognized by all. But where is the serenity of a great power so confident in the superiority of its civilization, and so secure in its future, that it bides its time?
By flaunting its hegemonic regional ambitions, China has managed to unify against it countries as diverse as Vietnam, Indonesia, and the Philippines. These countries now want more than ever America’s continuing presence as an Asian power. Indeed, transcending their historical enmity with Japan, they tend to show more understanding for the rhetoric of Japanese Prime Minister Shinzo Abe’s government – and its new and more muscular defense policy – than for China’s recent demonstration of force.
The age of grand ideologies is behind us; an era marked by strict calculation of interest beckons. In the interim, war may have changed more than diplomacy – and probably for the worse. Our weapons’ destructive power has peaked at a time when the “enemy” is becoming more diffuse. How do you make war on instability? How do you fight an adversary that disappears into civil society?
Even if technological progress has changed the diplomat’s job, the rules of the diplomatic game remain fundamentally the same. Success presupposes an understanding of the interests and perceptions of one’s counterparts, as well as an innate sense of moderation and self-limitation, something that both Russia and China seem to be lacking.
By contrast, one may wonder whether US President Barack Obama should not also learn from Bismarck – but from Bismarck the Iron Chancellor, who united Germany behind Prussia. Is he demonstrating enough toughness and clarity of vision in his policy toward Iran – or, even more to the point, toward Syria? Cold-blooded realpolitik, as Bismarck showed, is the best way to keep the peace.
Source: Project Syndicate. By Dominique Moisi, Senior Adviser at The French Institute for International Affairs (IFRI) and a professor at L'Institut d’études politiques de Paris (Sciences Po).
Brasil:Construtoras apostam em varandas para atrair mais clientes em São Paulo
As varandas estão se tornando item quase obrigatório nos novos apartamentos. Na cidade de São Paulo, segundo a empresa de informações imobiliárias Geoimovel, estavam presentes em todos os lançamentos desde 2008 nas unidades acima de 65 m².
É um diferencial também para imóveis usados, pois cerca de 30% dos clientes em busca de um apartamento para comprar na capital paulista já exigem esse espaço, segundo Roseli Hernandes, diretora do Secovi-SP (sindicato do mercado imobiliário).
Por isso, construtoras e incorporadoras apostam em plantas que atendam a essa demanda. Na Vitacon, todos os lançamentos dos últimos quatro anos tinham varanda. A importância dada a esse espaço, na opinião de Alexandre Frankel, presidente-executivo da companhia, deve-se ao fato de transmitir modernidade e proporcionar um estilo melhor de morar.
"Há concepções com salas menores porque esse espaço é considerado uma extensão natural do apartamento."
Octavio Flores, diretor da Gafisa, afirma que os consumidores também querem varandas para ter mais iluminação e ventilação.
O presidente do Creci-SP (conselho regional de corretores de imóveis do Estado), José Augusto Viana Neto, estima que um apartamento com varanda seja entre 10% e 25% mais caro do que um semelhante em tamanho e localização sem esse espaço.
"É a mesma relação que se faz, por exemplo, com apartamentos dos andares mais baixos, que são mais baratos. É um luxo a mais para o comprador e agrega valor."
FONTE: Fohla de São Paulo
Brasil: Último Discurso Dilma na TV, área econômica de seu governo é vÃtima de "guerra psicológica''
No último pronunciamento em rede nacional do ano, a presidente Dilma Rousseff afirmou na noite do domingo que a área econômica de seu governo é vÃtima de "guerra psicológica" por parte de setores do empresariado, ainda que admita haver o que "retocar" e "corrigir" na economia.
A fala, de 12 minutos, ignorou o principal fato polÃtico do ano, as manifestações de rua de junho que derrubaram abruptamente a popularidade do governo. Citou superficialmente que "ouviu reclamos" da sociedade e que está "implantando pactos para acelerar o cumprimento de nossos compromissos".
Dilma enalteceu programas federais e pediu aos telespectadores que pensassem "no que aconteceu de positivo nos últimos anos na vida do Brasil".
Mas boa parte do discurso, o 17º do seu mandato, foi dedicada a promover uma visão otimista da economia, principal área a sofrer crÃticas em sua gestão.
Apesar de ter deixado claro que o pessimismo não pode contaminar a economia e que está atuando "nos gastos" e no combate inflacionário, Dilma ponderou que "não existe um sistema econômico perfeito" nem um "paÃs com uma economia perfeita".
"Em toda economia haverá algo por fazer, algo a retocar, algo a corrigir", disse ela, que previu um 2014 melhor para o bolso dos brasileiros.
Citando "redução de impostos" e "diminuição da conta de luz", a presidente disse que tem recebido "duras crÃticas daqueles que não se preocupam com o bolso da população". "Se mergulharmos em pessimismo e ficarmos presos a disputas e interesses mesquinhos, teremos um paÃs menor", afirmou, em outro momento.
Fonte: Fohla de São Paulo
Brasil: Dilma faz autoelogio na TV sobre 'ilha da fantasia', diz Aécio
O senador Aécio Neves (MG), pré-candidato à Presidência da República pelo PSDB, criticou nesta segunda-feira o pronunciamento de fim de ano da presidente Dilma Rousseff, em rede nacional de rádio e TV.
Para Aécio, Dilma omitiu problemas e fez "autoelogio". Segundo o senador, que também é presidente do PSDB, Dilma apresentou "uma ilha da fantasia" na TV.
"Sob o pretexto das festas de fim de ano, a presidente volta à TV para fazer autoelogio e campanha eleitoral. Apenas como exemplo, na ilha da fantasia a que a presidente nos levou mais uma vez, a qualidade do ensino tem melhorado e a criação de creches é comemorada", disse Aécio Neves, em nota à imprensa.
Para o tucano, os números do "Brasil real" são outros: "o analfabetismo parou de cair e, das 6 mil creches prometidas por ela em 2010, apenas 120 haviam sido entregues até outubro".
O senador disse, ainda, que a presidente foi omissa em relação aos problemas do paÃs. "Nenhuma palavra sobre as famÃlias vÃtimas das chuvas e as obras prometidas e não realizadas. Nenhuma menção à situação das empresas públicas, à inflação acima do centro da meta, ao pÃfio crescimento da economia. Nenhuma menção à situação das estradas, à crise da segurança e à epidemia do crack que estraçalha vidas", disse Aécio.
O presidente do PSDB conclui a nota afirmando que Dilma aposta no "ilusionismo". "Essa nova e abusiva convocação de rede de rádio e televisão é mais uma demonstração da falta de limites de um governo que acredita que a propaganda e o ilusionismo podem demonstrar força, enquanto, na verdade, só acentuam a sua fraqueza", disse.
Fonte: Fohla de São Paulo
US Pending home sales increased 0.2% las month
Pending sales of homes ticked up in November, the first gain in six months, signaling that upcoming activity may rise, the National Association of Realtors reported Monday. The index of pending home sales increased 0.2% last month to 101.7, slightly above a 10-month low of 101.5 in October, but down from 103.3 in November 2012. "We may have reached a cyclical low because the positive fundamentals of job creation and household formation are likely to foster a fairly stable level of contract activity in 2014," said Lawrence Yun, NAR's chief economist. Also, buyers are becoming accustomed to higher mortgage rates and pricier properties, economists say. Although higher mortgage rates have taken a bite out of housing-market activity, Yun said sales in 2013 will be the highest in seven years. Pending sales typically close within two months. An index reading of 100 equals 2001's average contract activity level.
Source: Marketwatch
Source: Marketwatch
Howard Davies: The Fox and the ECB
. The European Parliament has just confirmed the appointment of the Bank of France’s Danièle Nouy as the first head of the European Central Bank’s new supervisory board.
The announcement comes less than a month before the ECB takes over direct supervision of some 130 banks, representing more than 80% of eurozone bank assets, leaving only smaller national banks under the jurisdiction of local supervisory agencies. Nouy (with whom I have worked) is a knowledgeable and capable supervisor, equipped with a formidable combination of determination and charm. She will need all of these attributes and more to make Europe’s new banking system function efficiently.
The ECB was chosen as the Single Supervisory Mechanism, despite the wafer-thin legal basis (an ambiguous clause in the Lisbon Treaty) for its new responsibilities. When the Lisbon Treaty was signed, Germany was wholly hostile to giving the ECB such a role. But no one wanted to contemplate the monumental task of framing a new treaty to establish an institution with the needed authority.
To borrow the philosopher Isaiah Berlin’s famous taxonomy, a supervisor is like a fox; it knows many small things, is flexible, and constantly adapts its survival strategy. A successful central bank is more like a hedgehog; it knows one big thing – that it must remain focused on low inflation. Slow and predictable decision-making is a virtue for such a creature, but it is maladapted for the fast-moving and complex world of twenty-first-century banks.
So the real challenge facing Nouy in her new role at the ECB is to teach the hedgehog new, fox-like tricks. Ideally, she would be aided by a revised decision-making structure, with a new seat of authority able to support the supervisory teams with fast rulings. But the need to avoid treaty amendments rules this out.
One hopes that the new supervisory board can grow into its role – and that the ECB Governing Council will give it the space to do so. The future of Europe’s banking system depends on it.
Source: Project Syndicate,by Howard Davies. The first chairman of the United Kingdom’s Financial Services Authority (1997-2003). He was Director of the London School of Economics (2003-11) and served as Deputy Governor of the Bank of England and Director-General of the Confederation of British Industry.
Morning market view
''The U.S. equity markets are beginning another holiday-shortened week in modestly positive fashion, ahead of reports on domestic housing sales and regional manufacturing activity. All U.S. markets will be closed on Wednesday for the New Year holiday. Meanwhile, Treasuries are moving higher, while the U.S. dollar, crude oil, and gold are all trading lower. In equity news, Cooper Tire & Rubber Co announced that it has terminated its $2.5 billion merger agreement with India's Apollo Tyres Ltd. Overseas, Asian stocks finished mixed despite a pullback in Chinese money market rates, while Japanese stocks posted their best yearly gain since 1972. Finally, European equity markets are retreating somewhat from recent multi-year highs in afternoon action ahead of the U.S. data''.
SOURCE: Schwab
SOURCE: Schwab
No One Expects Inflation
No One Expects Inflation
Chart 1: Inflation surprises are as low as ’98, just before commodity bull!
Just a quick chart I would like to share with you all. A friend emailed me Citigroup’s Inflation Surprise Index readings, so I overlaid Crude Oil prices against it. You should be able to notice that it can be used as a contrarian indicator for commodity prices.
For example, as commodity prices sell off, majority of analyst (dumb money) become bearish and do not expect a rise in inflation. However, ironically that is precisely when commodity prices bottom out and inflation pressures return. These periods were seen in during 1998, late 2001, late 2003, late 2006, early 2009 and currently throughout 2013 – all of which coincided with commodity price bottoms and buying opportunities. I hardly doubt this time will be different.
Facebook’s Cutesy Annual Report To Partners Reveals First Country-By-Country Mobile Stats
Facebook sent some partners a playfully illustrated eMagazine called The Annual, but I’ve acquired a copy from a source and the stats inside are serious business. The report divulges user counts for some key international markets like Germany, which now has 25 million users, and 18 million mobile users.
Previously, Facebook had only shared combined web and mobile user counts by multi-country region, and its mobile user counts as global totals. The problem is that hides what parts of the world are driving its mobile growth, which has brought it to a total of 874 million monthly mobile users and 507 million daily mobile users as of September 2013, out of a total 1.19 billion month user across all devices.
It’s the previously unpublished international growth stats that are most fascinating, though, and here they are:
- Germany – 19 million daily active users, 25 million monthly active users (43% of German Internet users are on Facebook, 76% of monthly users return daily), 13 million mobile DAU, 18 million mobile MAU (27% of German mobile phone users)
- France – 18 million DAU, 26 million MAU (63% of French Internet users are on Facebook, 69% of monthly users return daily), 11 million mobile DAU, 17 million mobile MAU (33% of French mobile phone users)
- Spain – 12 million DAU, 18 million MAU (58% of Spanish Internet users are on Facebook, 67% of monthly users return daily), 8.1 million mobile DAU, 13 million mobile MAU (32% of Spanish mobile phone users)
- Italy – 17 million DAU, 23 million MAU (71% of Italian Internet users are on Facebook, 74% of monthly users return daily, ), 10 million mobile DAU, 16 million mobile MAU (32% of Italian mobile phone users)
- Sweden – 3.8 million DAU, 4.9 million MAU (57% of Swedish Internet users are on Facebook, 78% of monthly users return daily) , 3 million mobile DAU, 4 million mobile MAU (53% of Swedish mobile phone users)
- Turkey – 19 million DAU, 33 million MAU, 9.5 million mobile DAU, 20 million mobile MAU
- Israel – 2.7 million DAU, 3.8 million MAU (71% of monthly users return daily), 2 million mobile DAU, 2.9 million mobile MAU.
- The numbers show that Facebook is successfully making the shift to mobile in Europe and parts of the Middle East, with all the listed countries seeing well over 50% of total users accessing from mobile. Facebook’s small-screen interface is especially popular in Sweden where over 81% of users are on mobile.The stats on Germany show that local social network StudiVZ and the populace’s strong focus on privacy may have slowed Facebook’s growth in the country. Only 43% of German Internet users and 27% of German mobile phone users are on Facebook — lower percentages than the other countries noted. Still, Facebook has built a 25 million-strong user base in Germany.
- While Facebook made a big mistake relying on HTML5 and was slow to start displaying ads on mobile, it’s now demonstrating it can earn serious money outside of the desktop. Developers have proven willing to pay for mobile app install ads that help them score downloads and get discovered despite the crowded app stores. That’s why mobile user growth around the world could excite Wall Street.It could also insulate Facebook from the fickleness of teens at home in the United States where there are worries that the social network may be losing its “cool” with the youth. Surveys say teens hate the presence of their parents on Facebook. However, survey results may be skewed against the company by the Social Desirability bias, which may encourage kids to say they use the decade-old Facebook less than they actually do to sound cool.It’s unclear whether Facebook actually needs to be loved by teens. As kids flock from one social app to the next, adults might follow them, or they might simply dismiss the teens as chasing the next fad. Either way, the more Facebook can establish itself as a mobile-first service around the globe, the better chance it has at escaping churn and instead becoming an enduring, institutionalized piece of the Internet.
- Source: techcrunch
Istat, nel 2013 diminuiscono i contratti a tempo indeterminato: l’assunzione ormai un miraggio
Non era necessaria la conferma, ma se qualcuno l’aspettava, oggi è arrivata firmata dall’Istat: il numero medio di lavoratori dipendenti con contratto a tempo indeterminato nel 2013 è diminuito rispetto all’anno precedente (-1,3%) attestandosi a quota 10.352.343. È quanto emerge dal Rapporto sulla Coesione sociale 2013 dell’Istat che conferma quanto ormai il posto fisso sia sempre più un miraggio.
I GIOVANI - Soprattutto per i giovani: il fenomeno ha riguardato infatti soprattutto gli under30, diminuiti del 9,4%. Nel periodo 2010-2013 il peso dei giovani rispetto al complesso dei lavoratori dipendenti con contratto a tempo indeterminato è passato dal 16,8% al 14,0%. Ma non solo. Il rapporto sulla coesione sociale svela anche che in Italia la povertà relativa è ormai ai massimi storici: «nel 2012 — fa sapere l’Istat — si trova in condizione di povertà relativa il 12,7% delle famiglie residenti in Italia e il 15,8% degli individui. Si tratta dei valori più alti dal 1997, anno di inizio della serie storica»
Corriere della Sera
WSJ: Loan Sharks Smell Blood in China Waters
According to a report fro the Wall Street Journal,''A new breed of shadow bankers has stepped in to lend to debt-hungry businesses and households as the Chinese government tries to rein in traditional banks''. As Jason Chow reports:
“I am a loan shark but a legal one,” said Raymond Ting, chairman and executive director of Credit China.
Mr. Ting is one of the shadow bankers who have stepped in to lend to debt-hungry businesses and households as the Chinese government tries to rein in traditional banks. Many analysts and investors are worried that the country’s slowing economy could ignite a debt crisis, but shadow lending keeps growing.
In the past five years, borrowing by businesses and households as a percentage of gross domestic product rose nearly 60% in China, according toGoldman Sachs Group Inc. Mr. Ting says down-on-their-luck property developers who have been cut off by banks and need a bit more money to finish a project are typical customers of Credit China.
The company charges the highest interest rate allowed by Chinese regulators—four times the prime lending rate, now 6%—and adds consulting fees that can boost the total borrowing cost to 50% per year.
UK, Miners and retails propel FTSE higher
Stocks have registered a sixth day of gains as confident investors took riskier moves in a day of light trading following the Christmas festivities.
The gains were also coming from retailers, which registered strong online sales both today and yesterday. Figures show a slight increase in Boxing Day footfall, while online sales are reported to have soared.
Today's gains saw the FTSE 100 end the day 56.70 points higher, and extends last week's rally into a second.
Over in the US stocks have eased of yesterday's strong rally which followed better-than-expected jobless data.
It was reported that China could be the world's largest economy by 2028, according to the Center for Economic and Business Research (CEBR), much later than previous estimates. The economic consultancy estimated in its annual report, the World Economic League Table, that China will overtake the US in 15 years in terms of gross domestic product (GDP) in dollar terms.
The CEBR also said that the UK is on track to become Europe's largest economy.
"Germany is forecast to lose its position as the largest Western European economy to the UK around 2030 because of the UK's faster population growth and lesser dependence on the other European economies," the report stated.
New plans for cheque deposits were revealed over the festive period. The new method, which is set to undergo a pilot test in the UK this year, involves the customer of the cheque being able to photograph it before sending it to the bank electronically. The government hopes that the method, which is already in use in the US, will be made available across the UK by the end of next year.
In other macro news, it was reported that women expect to receive a retirement income 25% less than that of men, research by Friends Life revealed.
Also of interest, 1,500 people spent part of Christmas day filing their tax return, HM Revenue and Customs has reported.
Miners and retails propel FTSE higher
As has been the pattern for much of the day, mining stocks led the risers as risk appetite grew on the back of strong data out this week in the US.
Steel group EVRAZ rose strongly after disposing of a number of iron ore assets and utilities in Russia as it continues to "optimise" its Evrazruda portfolio.
BAE Systems continued to register decent gains after it on Monday won a $1bn deal to upgrade a number of South Korean fighter jets.
Department store chain Debenhams was making gains despite rumours that its Finance Director Simon Herrick could be leaving the company amid growing criticism of his recent performance.
Other retailers on the High Street were mostly higher this morning as investors reacted to Boxing Data sales figures, while supermarket peers Tesco, Morrison and Sainsbury were putting in decent performances today.
The gains were also coming from retailers, which registered strong online sales both today and yesterday. Figures show a slight increase in Boxing Day footfall, while online sales are reported to have soared.
Today's gains saw the FTSE 100 end the day 56.70 points higher, and extends last week's rally into a second.
Over in the US stocks have eased of yesterday's strong rally which followed better-than-expected jobless data.
It was reported that China could be the world's largest economy by 2028, according to the Center for Economic and Business Research (CEBR), much later than previous estimates. The economic consultancy estimated in its annual report, the World Economic League Table, that China will overtake the US in 15 years in terms of gross domestic product (GDP) in dollar terms.
The CEBR also said that the UK is on track to become Europe's largest economy.
"Germany is forecast to lose its position as the largest Western European economy to the UK around 2030 because of the UK's faster population growth and lesser dependence on the other European economies," the report stated.
New plans for cheque deposits were revealed over the festive period. The new method, which is set to undergo a pilot test in the UK this year, involves the customer of the cheque being able to photograph it before sending it to the bank electronically. The government hopes that the method, which is already in use in the US, will be made available across the UK by the end of next year.
In other macro news, it was reported that women expect to receive a retirement income 25% less than that of men, research by Friends Life revealed.
Also of interest, 1,500 people spent part of Christmas day filing their tax return, HM Revenue and Customs has reported.
Miners and retails propel FTSE higher
As has been the pattern for much of the day, mining stocks led the risers as risk appetite grew on the back of strong data out this week in the US.
Steel group EVRAZ rose strongly after disposing of a number of iron ore assets and utilities in Russia as it continues to "optimise" its Evrazruda portfolio.
BAE Systems continued to register decent gains after it on Monday won a $1bn deal to upgrade a number of South Korean fighter jets.
Department store chain Debenhams was making gains despite rumours that its Finance Director Simon Herrick could be leaving the company amid growing criticism of his recent performance.
Other retailers on the High Street were mostly higher this morning as investors reacted to Boxing Data sales figures, while supermarket peers Tesco, Morrison and Sainsbury were putting in decent performances today.
ASIA: WEAKER YEN PUSHES NIKKEI HIGHER
Asian markets were mixed this morning, with Japanese stocks striding ahead on the back of a weakened yen, which dropped to a five-year low against the greenback.
The Nikkei climbed 0.69% to settle at 22,516 after the dollar traded hands at ¥105.28, compared to ¥104.74 the previous day.
The currency was also pushed lower on a positive global outlook, ensuring the Nikkei ended the year on a high note.
Stocks in Hong Kong also put it decent gains, lifted by positive data in the US last week, with the Hang Seng driven higher by property firms.
Source: LiveCharts
The Nikkei climbed 0.69% to settle at 22,516 after the dollar traded hands at ¥105.28, compared to ¥104.74 the previous day.
The currency was also pushed lower on a positive global outlook, ensuring the Nikkei ended the year on a high note.
Stocks in Hong Kong also put it decent gains, lifted by positive data in the US last week, with the Hang Seng driven higher by property firms.
Source: LiveCharts
China Local-Government Debt Surges to $3 Trillion
According to a report from the Wall Street Journal, ''China's local-government liabilities jumped to nearly $3 trillion at the end of June, according to a new audit.
The audit released on Monday showed China's local government liabilities totaled 17.9 trillion yuan ($2.95 trillion) at midyear. China's last full audit of local-government borrowings estimated liabilities at 10.7 trillion yuan at the end of 2010.
The audit released on Monday showed China's local government liabilities totaled 17.9 trillion yuan ($2.95 trillion) at midyear. China's last full audit of local-government borrowings estimated liabilities at 10.7 trillion yuan at the end of 2010.
The new tally includes direct debt as well as guarantees and other potential liabilities, according to a report released by the National Audit Office''.
Debt from central and local governments but excluding guarantees and other liabilities stood at 20.7 trillion yuan by the end of June, according to the report.
The office said in the report that risks from local-government debt are still controllable. That echoes recent comments by top Chinese leaders, including Premier Li Keqiang, who has said local debt remains within safe levels.
Local debt is one issue under scrutiny by Chinese leaders examining reform proposals to keep China's economy humming for years to come. Also on Monday, the Chinese Communist Party leadership said President Xi Jinping will head a group overseeing the implementation of reforms.
The National Audit Office, in an effort to get a more accurate picture of borrowings at the local level, said in July it had started a comprehensive investigation into local-government debt.
In a September interview, a Chinese government researcher said the current dependence on heavy borrowings to drive rapid economic growth is unsustainable.
US Present and Past Bull Markets
According to a report from the Wall Street Journal: "The U.S. stock market’s relentless march to all-time highs has grabbed plenty of headlines this year".
Yet it looks unremarkable by historic metrics.
The Dow Jones Industrial Average has set 50 record closing highs, while the S&P 500 is up 29%, on track for its best yearly gain since 1997. The S&P 500 has now risen 172% since bottoming in March 2009.
And yet the 57-month-long bull market following the depths of the financial crisis is on par with previous bull runs.
The S&P 500 has rallied about 165% during 13 bull markets (including the current one) dating back to 1928, according to Howard Silverblatt, senior index analyst at S&P Dow Jones Indices. Those bull markets have lasted about 57 months, on average, matching the current rally.
A bull market is characterized as a 20% increase from a prior low, ending when the index peaks and then falls by 20%.
The S&P 500 surged 417% from October 1990 through March 2000, the longest and best performing bull market, according to Mr. Silverblatt's calculations. The stock index advanced 324% from June 1932 through March 1937.
By comparison, stocks rallied 64% during a 31-month stretch from December 1987 through July 1990. And the market advanced 25% from October 1966 through November 1968 before falling into a bear market.
The current rally stacks up as the fifth longest and fifth-best-performing of the 13 bull markets through history, Mr. Silverblatt says. It is essentially in the middle of the pack, leaving few clues for what will happen when the calendar flips to 2014.
Some signs suggest this year’s stock rally will keep humming along. As WSJ’s Alexandra Scaggs reports, inexpensive stocks are leading the rally, with investors homing in on shares seen as bargains. Leading the S&P 500 this year are stocks with characteristics that broadly place them in the “inexpensive” category: those with relatively low valuations based on earnings forecasts and increasing estimated profits, among others.
The 100 stocks in the S&P 500 with the lowest price/earnings ratios rose 41%, on average, in the first 11 months of the year, compared with a 27% gain in the S&P 500, according to Fidelity.
The recent uptick in the market even after the Federal Reserve announced plans to start dialing back its bond-buying program is being viewed as a vote of confidence in the economy and the markets heading into the new year.
Meanwhile, Mr. Silverblatt of S&P suggests performance-chasing played a role in the market’s rally over the past few months, and could continue into 2014.
“Chasing returns is not a good reason to invest, but when enough do it, the short-term impact is more buying and higher prices,” Mr. Silverblatt says. “Absent large-scale profit taking or an incident, we may see another inflow of funds and another short-term uptick from investors chasing profits in the first few weeks of the year.”
Earnings season kicks off in the third week of January, which will “add or subtract from investors’ appetite to get back in the market,” he says.
Thailand's Silent Coup
Thailand is once again being convulsed by extreme partisan politics, with the country's polarization playing out on Bangkok's streets. Several people have been killed, and many more have been injured. The sense that Thailand has been through all of this before would be mildly reassuring were it not for a nagging fear that this decent and prosperous society may be set to destroy its democracy.
Much of the violence has been led by Suthep Thaugsuban, a former deputy prime minister. He has inspired thousands of demonstrators, many from his power base in the country's south, to storm and occupy government buildings with the aim of unseating Prime Minister Yingluck Shinawatra, the sister of exiled former Prime Minister Thaksin Shinawatra. Suthep says that this is the first step in rooting out "Thaksinism" from the country's political life.
On December 1, Suthep demanded - and received - a meeting with Yingluck in the presence of Thailand's military chiefs, whom he had asked to "guarantee" his safety. During the meeting, Suthep gave Yingluck a two-day deadline to resign. With the police failing to control the mobs in the streets without the help of the military, Yingluck decided to resign and dissolve parliament, declaring that she would lead a caretaker government until a new election is held on February 2.
The date was endorsed by a "reform forum," established to resolve the crisis and comprising Bangkok's elite (including the military). Suthep and his followers were dissatisfied, and left the forum in protest, rejecting Yingluck even as an interim prime minister and demanding that the election be held after political reforms - the sort he would agree with - are implemented to eliminate all vestiges of the Thaksin clan from government.
In fact, Suthep has called for a "people's council," comprised of 400 unbiased representatives. The council would replace the Senate after the upper house nominates a new leader to be appointed by the King, thus obviating the need for elections in the near future. Wassana Nanuam, the military-affairs correspondent of the English-language daily Bangkok Post, has described the move as a "silent" coup d'état: no tanks in the streets.
The Democrat Party, led by the former court-appointed Prime Minister Abhisit Vejjajiva, has separately announced a boycott of the February 2 election on the grounds that the party could not reform the country even if it participated. The Democratic Party last won a parliamentary majority in 1992.
Source: Project-Syndicate. by Sin-ming Shaw, a former fellow at Oxford University
While the military chiefs' inclinations have been with Bangkok's elites, they are being careful to keep their options open. Their unsuccessful stint in power following the military coup in 2010 appears to have taught them that they should wait to see if their political allies can break Thaksin's electoral stranglehold, which has lasted 12 years and five general elections, before deciding what to do next.
Bangkok's elites maintain that the billionaire Thaksin and his allies have bought their electoral victories. But Freedom House, which tracks democracy and civil rights around the world, declared Yingluck's landslide electoral victory in 2011 free and fair, a position supported by most Thailand experts.
Despite Thaksin's corrupt image, a majority of mainly poorer Thais see him as their only alternative to the country's out-of-touch urban elites. Indeed, Suthep's insistence on delaying the election is an open admission that he and his allies cannot win a fair contest, and he has even gone so far as to suggest that, with the "right" leader, Thailand may not need elections at all in the future. Nor is it clear that any reforms would satisfy the anti-Thaksin camp, except for those designed to deny Thaksin's followers a parliamentary majority.
That said, Thaksin and his sister bear some responsibility for their recent misfortunes. Guilty of excessive hubris, their ability to empathize with the peasants and the urban poor is matched only by their disregard for the urban middle class and its members' demand for clean government and rule of law rather than populism.
Yingluck must also take some blame for her clumsy handling of the current crisis. What ignited the protests was her attempt to amend an amnesty bill, originally intended as a grudging act of reconciliation between the country's opposing "red" and "yellow" political camps. But, while the amnesty was to apply to lesser crimes committed from 2006 to 2011, Yingluck tried to extend it two years earlier and include capital crimes - a move rightly seen as a blatant attempt to absolve her brother and pave the way for his return to Thailand.
Thaksin's supporters miscalculated in assuming that they could so easily abuse their parliamentary majority. Their effort to manipulate the amnesty, though not unconstitutional, was nonetheless arrogant and provocative. Anger erupted among Bangkok's middle classes, prompting Suthep to unleash his mobs.
The story is far from over. If recent history is any guide, the February election (assuming it is held) will sweep Thaksin's allies back to power. What follows will be fraught with risks of further instability, as poor rural Thais face off against wealthy urban elites, and polarization intensifies between the north, where most people live, and the southern power base of the Democrat Party and Suthep, the street mobs' leader.
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