China data boosts stocks, Aussie dollar
SINGAPORE, July 13 (Reuters) – Asian stocks, metals, and the Australian dollar jumped on Wednesday after Chinese economic growth data soothed some worries over a global slowdown at a time when euro zone debt worries are also deterring investors.
The MSCI index of Asia-Pacific shares outside Japan extended early gains to trade 0.8 percent higher by 0230 GMT, with stock markets in Australia, and South Korea both up 0.5 percent.
China’s annual gross domestic product grew 9.5 percent in the second quarter of 2011, above market whispers of 9.0 percent ahead of the release and 9.4 percent forecast by a Reuters poll.
“With GDP growth slowing to a more sustainable pace of just over 8 percent annualised in the first-half of the year, the monetary authorities should be encouraged that the tightening over the past year has been effective,” said George Worthington, economist at IFR in Sydney.
“The data should also help to dispel the wilder fears of an economic collapse in China as a result of the anti-inflation fight,” he added.
Copper on the London Metal Exchange extended early gains after the Chinese data, and was up 0.5 percent at $9,698 a tonne.
EURO, AUSSIE
Euro, stocks tumble as euro zone debt crisis deepens
SINGAPORE (Reuters) – The euro declined to a four-month low on Tuesday after new IMF Managing Director Christine Lagarde said the fund was not yet ready to discuss terms of a second Greek bailout, while equity markets tumbled on concerns more countries will be engulfed by the euro zone’s debt problems.
European stock index futures pointed to a sharp decline in equities, extending the previous session’s steep sell-off. By 0605 GMT (7:05 a.m. British time), futures for Euro STOXX 50, for DAX and for France’s CAC were 1.1 to 1.3 percent lower.
Growing worries about Europe stoked investors’ flight from riskier assets into bonds, extending a rally in U.S. Treasuries and sending Japanese government bond prices to a two-week high.
In a bid to keep Italy and Spain from the same fate as Greece, Portugal and Ireland, euro zone finance ministers promised on Monday cheaper loans, longer maturities and a more flexible rescue fund. They said new measures would be announced “shortly,” but set no deadline.
“Even if they agree on a multi-billion dollar package for Greece and other affected peripheral countries, if we don’t see a continuation of implementation of the austerity cuts, all bets are off,” said Thomas Lam, group chief economist at OSK-DMG in Singapore.
The euro fell as low as $1.3932 — its lowest since March 17 — after a slew of stop-loss orders were triggered below $1.3980. The single currency fell broadly, dropping to an all-time low of 1.1660 Swiss franc.
The euro extended its early losses against the dollar in Asia and was down 0.6 percent by 0605 GMT after Lagarde said the IMF and its European partners were not yet ready to discuss conditions or terms of a second bailout package for Greece. She said the contagion currently hitting Italy was tied to market-driven forces.
Euro, stocks slide as Eurozone debt woes deepen
SINGAPORE (Reuters) – The euro fell to a four-month low on Tuesday after new IMF Managing Director Christine Lagarde said the fund was not yet ready to discuss terms of a second Greek bailout, while stock markets tumbled on fears that more countries will be engulfed by the euro zone’s debt crisis.
Growing worries about Europe continued to stoke investors’ flight from riskier assets into bonds, extending a rally in U.S. Treasuries and sending Japanese government bond prices to a two-week high.
In a bid to keep Italy and Spain from the same fate as Greece, Portugal and Ireland, euro zone finance ministers promised on Monday cheaper loans, longer maturities and a more flexible rescue fund. They said new measures would be announced “shortly,” but set no deadline.
“Even if they agree on a multi-billion dollar package for Greece and other affected peripheral countries, if we don’t see a continuation of implementation of the austerity cuts, all bets are off,” said Thomas Lam, group chief economist at OSK-DMG in Singapore.
The euro fell below its May 23 low of $1.3968 to as low as $1.3938, opening the way for a test of $1.3900, where it faces a 50 percent retracement of its rise from January to May and its 200-day moving average.
The single currency extended early losses in Asia after Lagarde said that the IMF and its European partners were not yet ready to discuss conditions or terms of a second bailout package for Greece, and added that the contagion currently hitting Italy was tied to market-driven forces.
Billionaire investor George Soros said in a Financial Times editorial that Greece is heading for a disorderly debt default or at least a devaluation, and repeated his call for European Union leaders to adopt a “plan B” to stem contagion to the rest of the bloc.
Asia shares up; eyes on EU summit, Greece rescue
SINGAPORE (Reuters) – Asian stocks rose for the third day in a row on Thursday, powered by strong economic data from Australia and China, while the euro steadied ahead of a key summit that could lay out a rescue plan for debt-stricken Greece.
European Union leaders will lay the groundwork for a financial rescue of Greece at a summit later in the day, but any support is likely to require a big commitment from Athens on getting its economy in order.
The meeting is expected to reach a political agreement on helping Greece, while the financial details will be hammered out at a meeting of finance ministers in Brussels on Monday, a senior EU source told Reuters.
Greece’s ballooning deficit and debt have reverberated across financial markets in recent months, hitting the euro, regional banking stocks and some government bonds, and prompting many investors to pull back from riskier assets worldwide.
The euro edged up 0.4 percent at $1.3777, a day after it shed 0.4 percent on concerns about the fiscal problems facing euro zone countries Greece, Portugal and Spain. It hit a 8-1/2-month low of around $1.3580 last week.
Asian shares, however, shrugged off euro zone jitters and weaker U.S. markets overnight, buoyed by data showing a surge in employment in Australia and stronger-than-expected bank lending in China in January.
The MSCI index of Asian stocks traded outside Japan advanced 1.6 percent, with the metals and energy sector leading the way.
Reliance aims big with $12 bln bid for LyondellBasell
Ranked by Forbes as India’s richest man with a net worth of $32 billion, Mukesh Ambani is no stranger to taking risks.The move by conglomerate Reliance Industries, controlled by Ambani, to bid for bankrupt LyondellBasell is a calculated one. Markets seem to think this is a bargain and investors pushed up Reliance’s stock nearly 4 percent on Monday.If the deal, which sources say may be worth $12 billion, goes through, it would catapult Reliance into the ranks of top petrochemical makers such as Saudi Arabia’s SABIC, Germany’s BASF and Dow Chemical Co.The bid comes at a time when asset prices have fallen globally in the wake of the economic crisis but there are still some lingering doubts over whether the worst is over for the global economy.Reliance hasn’t shied away from making mega investments during downturns.Last December, Reliance commissioned a 580,000 barrels per day refinery next to its existing 660,00 bpd plant in the western Indian state of Gujarat, creating the world’s biggest oil refining complex just as global oil demand began to collapse.Reliance has a cash pile of $4 billion and $8 billion in treasury stock that can be sold, so funding is unlikely to be an issue for the company, Macquarie said in a research note ahead of the bid. Bank of America Merrill Lynch is among the advisers for Reliance, sources said.In its bid for Luxembourg-based LyondellBasell, which filed for bankruptcy protection in January, after being unable to make its debt obligations, Reliance, India’s largest listed firm, with a market value of about $75 billion, might be taking advantage of the lack of any competing bids.LyondellBasell had sales of close to $51 billion in the 2008/09 financial year, while Reliance, which has interests in petrochemicals, refining, oil and gas exploration, and retail, logged revenue of about $32 billion.
No bruised egos as Bharti-MTN redial once again
Exactly one year ago, squabbles over control forced Bharti Airtel and MTN to ditch their hope of forming a global telecoms group, but both emerging markets-focused companies are back on the negotiating table to thrash out a $61 billion merger.
What’s changed?
For a start, both firms are now publicly talking about a detailed structure for the combined entity, something that was missing last time.
As part of an initial deal worth more than $23 billion unveiled on Monday, Bharti will pay in cash and shares for 49 percent of MTN, while MTN pays cash and stock for an effective 36 percent stake in the Indian firm. Previous merger talks collapsed when the South African firm proposed a new structure that would have seen Bharti become an MTN unit.
The past year has seen the full impact of a global recession that has spared few industries and MTN, sub-Saharan Africa’s biggest mobile operator, and Bharti — India’s top mobile operator — might be looking to combine to cope better in tough times.
Thanks to scorching growth in emerging markets, the combined entity boasts a user base of 200 million, catapulting it to the top five global industry players, while last year, the combined group would have ranked among the top ten.
MTN and Bharti are locked in exclusive talks for about two months, giving little room for rivals to upset their game plan.
Dark horse Satyam wins race to acquire Satyam
In a race that saw only a handful of bidders, Tech Mahindra beat rivals such as engineering conglomerate Larsen & Toubro and U.S.-listed Cognizant Technologies. Tech Mahindra agreed to buy a 31 percent stake in Satyam at 58 rupees, a 23 percent premium to Satyam’s last closing price.
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