US dollar storms back from steep losses

US dollar storms back from steep losses
20-12-2008

The US dollar stormed back from steep losses on the euro earlier in the week, after the massive rescue announced for US automakers eased worries about the economy. The euro sank to 1.3913 dollars, down sharply from a day earlier. The greenback held nearly steady against the Japanese currency at 89.32 yen. In late New York trade, the dollar stood at 1.1035 Swiss francs. The pound was at 1.492 dollars.

US share prices mixed in choppy session

US share prices mixed in choppy session
20-12-2008

US share prices ended a choppy day mixed - as investors remained uncertain that a $17.4 billion lifeline for automakers would make a lasting difference for the beleaguered industry. The Dow rose by as much as 182 points early on, turned lower at midday, recovered in the afternoon, but then lost ground again in the last hour of trading. At the close, the Dow was down about 25 points at the 8,579. Standard & Poor's 500 index and the Nasdaq composite index were up less than 1 percent.

Europe's main stock markets close lower

Europe's main stock markets close lower
20-12-2008

Europe's main stock markets closed lower, as the energy sector took a hit from plunging crude oil prices and the banking sector suffered ratings downgrades from Standard & Poor's.London's Footsie 100 index fell 1 percent; while in Paris the CAC 40 ended 0.26 percent lower;and the Frankfurt Dax plunged 1.26 percent.The European single currency fell to 1.389 dollars on growing fears about the eurozone economy. The yen rose against the US dollar, despite an interest rate cut from the Bank of Japan.

US$17 billion bailout for auto industry

US$17 billion bailout for auto industry
20-12-2008

The US government is offering up to 17.4 billion US dollars in loans to struggling American automakers, It expects General Motors and Chrysler to access the money immediately. Some $13.4 billion dollars will be made available in December and January - from the $700 billion fund that was originally designed to rescue struggling financial institutions. But the loans would be called back if the automakers cannot prove they are viable by March 31st. The deal was announced by President Bush from the White House.

Citic Pacific bond issue gets backing

Citic Pacific bond issue gets backing
20-12-2008

Shareholders of investment firm, Citic Pacific, have approved an 11.6 billion dollar convertible bond issue to its parent company, Citic Group. This means Citic Group will raise its stake in Citic Pacific to 57.6 percent. The parent company will also absorb massive losses -- potentially amounting to 18.6 billion dollars -- incurred from unauthorized currency bets taken by Citic Pacific. Ahead of the vote, taken at an extraordinary general meeting, Citic Pacific Chairman, Larry Yung, had told reporters that the bond issue was the 'best option available' to the company.

Japan cuts interest rate to near-zero

Japan cuts interest rate to near-zero
20-12-2008

The Bank of Japan has slashed interest rates to near zero, in a bid to stave off a severe recession as the government said the economy would not grow until at least 2010. Japan joined a wave of rate cuts by central banks around the world amid forecasts that the overall global economy will next year suffer its first contraction in decades. The BoJ also tried to shore up ailing credit markets by announcing it would start directly buying commercial paper, the short-term debt that companies issue to run their daily operations. In a 7-1 vote, the Bank's policy board said that it was cutting the rate of borrowing from 0.3 percent to 0.1 percent. However, the Nikkei index in Tokyo still closed lower, despite a brief surge following the rate cut. The yen eased back modestly after this week soaring to a 13-year high against the US dollar. A Bank of Japan statement explaining the move, offered a bleak picture of the economy. "Financial conditions have deteriorated sharply on the whole," it said. "Under these circumstances, economic conditions have been deteriorating and are likely to increase in severity in the immediate future," it said.

US considering bankruptcy for carmakers

US considering bankruptcy for carmakers
19-12-2008

The US government says it's considering managed bankruptcy as one of the options for ailing American carmakers. US bankruptcy laws allow companies to reorganise their businesses to try to become profitable again.

Quantas-BA merger talks fail

Quantas-BA merger talks fail
19-12-2008

The Australian airline Qantas says that its merger talks with British Airways have failed. Earlier this month the companies said they were considering a merger in order to cope with the global financial crisis which has caused a downturn in air travel. British Airways is still exploring a possible merger with the Spanish airline Iberia.

CE seeks economic boost from Beijing

CE seeks economic boost from Beijing
19-12-2008

The Chief Executive, Donald Tsang, has asked the Central Government to help Hong Kong boost the local economy in light of the global financial crisis. He returns to Hong Kong tonight at the end of his annual duty visit, after meeting President Hu Jintao and Premier Wen Jiabao. Mr Tsang asked Beijing to allow more individual visitors to come to Hong Kong. He said the global financial crisis and the new cross strait direct link agreement, had led to a drop in both foreign and Taiwan visitors to Hong Kong. He also requested relief measures for local small and medium business enterprises operating in the Pearl River Delta.

Obama names Schapiro to head US SEC

Obama names Schapiro to head US SEC
19-12-2008

US President-elect, Barack Obama, has named longtime financial industry regulator, Mary Schapiro, to head the Securities and Exchange Commission - amid calls for reform of the agency in the wake of a massive investment fraud scandal. Mr Obama also named Georgetown University law professor, Daniel Tarullo, to fill one of two vacancies on the Federal Reserve Board, which is battling to ease a credit crisis and fend off a deepening recession. And he picked former Treasury official, Gary Gensler, to head the Commodities Futures Trading Commission, which regulates the US commodity futures and options market.

Beijing acts to boost property sector

Beijing acts to boost property sector
18-12-2008

China has announced new measures to boost the flagging domestic property market. The authorities are planning to lower taxes and ease ownership rules. A sales tax previously imposed on homeowners, who sell their property within five years of buying it, will now be waived for those who keep their homes for just three years, according to the newly revised regulations. The State Council also said the tax would in future be levied only on the profit from sale, instead of the entire sale price. Authorities have also eased ownership rules to allow people with smaller-than-average apartments to buy a second flat at a preferential lending rate previously offered to first-time buyers. And lenders have been urged to increase loans to developers of low-priced housing. China is said to be facing a major shortage of apartments, both in urban and rural areas, and residential housing prices have dropped some 20 percent so far this year.

Minibond sellers pledge $100m fund

Minibond sellers pledge $100m fund
2008-12-18 HKT 06:03

Local distributors of Lehman Brothers minibonds have pledged $100 million towards finding a solution to a deadlocked buy-back plan. They're hoping to free up some of the remaining value of the financial products, so local investors can be compensated. Currently, the trustee of the Lehmans minibonds, HSBC, is locked in a legal battle with the liquidators of the bankrupt US investment bank, over who has the right to divide up the assets.

Madoff placed under house arrest

Madoff placed under house arrest
18-12-2008

A federal judge in the United States has placed the financier, Bernard Madoff, under house arrest and instructed him to hand over his passport. The judge ordered the changes to his bail conditions a week after Mr Madoff - the former chairman of the Nasdaq Stock Exchange - was arrested in connection with a suspected US$50 billion fraud. He'll be fitted with an electronic ankle bracelet and confined to his New York apartment.

Ferrari has its best year ever

Ferrari has its best year ever
18-12-2008

The Italian luxury car manufacturer, Ferrari, says 2008 has been its best ever year for sales and profits, in contrast to the difficulties being experienced by most of its rivals because of the economic downturn. The company's chairman, Luca Cordero di Montezemolo, told a news conference that -- crisis or no crisis -- Ferrari could still find six-thousand people -- in his words -- crazy enough to buy its annual output.

OPEC grees to deep production cuts

OPEC grees to deep production cuts
18-12-2008

Saudi Arabia says energy ministers from the oil producers' group OPEC have agreed deep cuts in production. The Saudi minister, Ali al-Nuaimi, is quoted as saying that OPEC agreed at a meeting in Algeria to cut oil output by a record two million barrels a day.

CE arrives in Beijing for talks

CE arrives in Beijing for talks
17-12-2008

The Chief Executive, Donald Tsang, has arrived in Beijing for his annual duty visit. It's his first official meeting with state leaders since the global financial crisis started to affect Hong Kong. He will meet President Hu Jintao and Premier Wen Jiabao on Friday. He's expected to seek Beijing's further support to help ease the impact of the global financial crisis on Hong Kong. Measures that have been suggested include expanding Hong Kong's renminbi business, as well as increasing the quota for mainland visitors to the city. Tomorrow, he's due to attend celebrations marking the 30th anniversary of China's 'open door' economic policy.

Ecuador defaults on debt repayment

Ecuador defaults on debt repayment
16-12-2008

Ecuador says it has formally defaulted on a foreign debt payment three days after it warned it intended to do so. President Rafael Correa has described international lenders as monsters and says the debt payments were immoral.

Wall St lower over bailout uncertainty

Wall St lower over bailout uncertainty
16-12-2008

US stocks fell overnight as the market sought clarity over President Bush's bid to rescue US automakers and awaited the outcome of a Federal Reserve meeting expected to cut interest rates. The Dow Jones Industrial Average fell 65 points, or 0.75 percent, to 8,564. The Nasdaq composite was down 32 points, or 2.10 percent, to 1,508. The Standard & Poor's 500 fell 11 points, or 1.27 percent, to a preliminary close of 868.

Expansion of HK renminbi trading likely

Expansion of HK renminbi trading likely
16-12-2008

The Governor of the People's Bank of China, Zhou Xiaochuan, say Hong Kong is likely to be allowed to expand the scope of its renminbi trading. Speaking in Hong Kong, he said a renminbi settlement system would help many businesses to mitigate risks arising from US dollar volatility. Mr Zhou said he believed the Chief Executive, Donald Tsang, would raise the issue during his three-day duty visit to Beijing, which starts tomorrow. The head of the Monetary uthority, Joseph Yam, said a renminbi settlement system would benefit both mainland and local businesses. He also expected a further liberalisation of the renminbi bond market. He said restrictions on the issuing of of bonds could be relaxed. Currently, only a handful of mainland banks are allowed to issue such bonds, with their number capped by the Central Government.

US Fed cuts key rate to record level

US Fed cuts key rate to record level
17-12-2008

The US Federal Reserve has cut its target for a key interest rate to the lowest level on record and pledged to use "all available tools" to combat the severe financial crisis and prolonged recession. The Fed said it had reduced the federal funds rate, the interest that banks charge each other, to a range of zero to 0.25 percent. That is down from the 1 percent target rate in effect since the last meeting in October.

US consumer prices continue to plummet

US consumer prices continue to plummet
17-12-2008

US consumer prices plummeted again during November and construction starts on new homes slumped to a record low as the recession-hit economy lost momentum. The Labor Department said the Consumer Price Index dropped 1.7-percent in November, surpassing the previous record decline of one-percent set in October. The Commerce Department said housing starts dropped 18.9 percent to a seasonally adjusted annual rate of 625-thousand units -- from 771,000 units in October. The latest figures reflect the severe recession gripping the country and raise the pressure for the Federal Reserve to act decisively at a meeting which started a short time ago. Many analysts are tipping the FED will cut interest rates by up to half a percent.

HSBC to cut 400 staff in Taiwan

HSBC to cut 400 staff in Taiwan
17-12-2008

HSBC plans to cut about 400 people from its workforce in Taiwan by the end of next month. The redundancies follow HSBC's purchase of a Taiwanese bank in March. The banking giant axed 500 jobs in Asia last month, and dispensed with more than 1,000 people in its global banking and markets division in September. There are reports that HSBC may seek to raise about US$14 billion, to shore up its finances as mounting bad-loan provisions erode profits.
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HSBC plans to cut 400 staff in Taiwan
17-12-2008

HSBC plans to cut about 400 people from its workforce in Taiwan by the end of next month. The downsizing follows HSBC's purchase of a Taiwanese bank in March. The bank cut 500 jobs in Asia last month; and dispensed with more than 1,000 people in its global banking and markets division in September. There are reports that HSBC may seek to raise about 14 billion US dollars, to shore up its finances, as mounting bad-loan provisions erode profits.

Warnings sounded over Chinese slowdown

Warnings sounded over Chinese slowdown
16-12-2008

Chinese government researchers have made further gloomy predictions about the economy, warning of a housing market collapse, unemployment and a rapidly rising income gap that could cause unrest. In its annual report on social stability, the Chinese Academy of Social Sciences says four million migrant workers have already been laid off because of the global economic downturn. It says about a third of new graduates have been unable to find jobs.

HSBC's Madoff exposure could be US$1b

HSBC's Madoff exposure could be US$1b
16-12-2008

The banking giant, HSBC, says it has a potential exposure of about one billion US dollar to a giant pyramid scheme run by Wall Street veteran Bernard Madoff. HSBC is among several big banks which face massive losses arising from the collapse of Mr Madoff's hedge fund. In a statement, HSBC confirms that it has provided financing to a small number of institutional clients, who invested in funds of Madoff Investment Securities, which is under criminal investigation in the United States. It says it also has custody clients who have invested with Madoff, though it doesn't believe these custodial arrangement would be a source of exposure to the Group. Major international investors such as Spain's Santander, French bank BNP Paribas and Japan's Nomura had all revealed they face potential losses from the collapse of the fund.

European banks hit by Madoff losses

European banks hit by Madoff losses
16-12-2008

Shares in a number of European banks have been hit as details emerge of their exposure to an alleged multi-billion dollar worldwide fraud by the US financial trader Bernard Madoff. Mr Madoff has been charged with running his hedge fund as a vast pyramid scheme.

HKMA injects $3.5b into banking system

HKMA injects $3.5b into banking system
16-12-2008

The Hong Kong Monetary Authority has injected HK$3.5 billion into the banking system in two market interventions today. The move is aimed at preventing the local currency from passing the upper limit of the American dollar peg.

Run Run Shaw may privatise Shaw Brothers

Run Run Shaw may privatise Shaw Brothers
16-12-2008

The film company, Shaw Brothers, says it'll soon make an announcement on a possible privatisation of the company. This means Sir Run Run Shaw may offer to buy out the company after he ended talks to sell his 75-percent stake, amid the global financial crisis. The founder of the company, who turned 101 last month, is also the biggest investor in TVB. Shaw Brothers shares were suspended today. They last traded at 8 dollars and 13 cents.

China's growth slowing fast

China's growth slowing fast
16-12-2008

The latest figures from China show a further sharp slowdown in the country's industrial growth. The speed of the decline has fuelled fears of widespread job losses and a further reduction in consumer spending.

Ricky Wong denies resigning from ATV

Ricky Wong denies resigning from ATV
16-12-2008

The Chief Executive Officer of Asia Television, Ricky Wong, has denied resigning from his position. Yesterday afternoon, ATV's Chairman, Linus Cheung, announced that Mr Wong had decided to leave less than two weeks after taking up the post due to "irreconcible differences" in their management style. Mr Cheung told reporters ATV's operations would not be affected. Mr Cheung denied that Mr Wong's departure was related to controversy over the recent Miss Asia Pageant. He also announced that one of the two senior news executives who resigned last week, Leung Ka-Wing, would now stay with ATV.

China to boost money supply by 17%

China to boost money supply by 17%
15-12-2008

China's State Council has announced that it will raise the country's money supply by 17 percent next year, boost policy loans by 100 billion yuan, and urge commercial banks to lend more in its latest attempts to fight the global downturn. In a statement posted on the Government's website, the State Council said China must expand the scope of its financial supports to advance the stable and fast-paced development of the economy. It called for a 17 percent increase in the country's money supply -- or cash in circulation plus all deposits -- next year. The Council also said it would increase funding to policy banks by 100 billion yuan; and commercial banks would be urged to extend loans beyond the four trillion yuan in borrowing expected to be issued this year. The cabinet also said lending rates could be further lowered and the foreign exchange rate given further flexibility.

World Bank warns against protectionism

World Bank warns against protectionism
15-12-2008

The head of the World Bank, Robert Zoellick, has warned that efforts to boost the troubled economies of wealthy nations could cause serious damage to developing countries, making it hard for them to raise funds. He told Reuters news agency the economic turmoil could lead to humanitarian aid drying up, and that together with rising unemployment, it could cause a new wave of protectionism.

Investigators untangling Madoff affair

Investigators untangling Madoff affair
14-12-2008

Investigators in the United States have begun attempts to establish the true extent of losses run up by a leading Wall Street broker, Bernard Madoff. So far Mr Madoff has been charged for causing losses worth US$50 billion. The case could prove to one of the biggest frauds in history.

Ecuador to default on some foreign debt

Ecuador to default on some foreign debt
14-12-2008

The Ecuadorean President, Rafael Correa, has ordered the country to default on part of its foreign debt, the first default in Latin America since Argentina in 2001. A government audit in November classified some of the debt taken on by previous governments as illegitimate or illegally incurred.

Asian leaders team up to fight crisis

Asian leaders team up to fight crisis
14-12-2008

The leaders of three of Asia's biggest economies, China, Japan and South Korea have agreed to work together to tackle the effects of the global financial crisis. At a summit in Japan they agreed to boost trade and announced measures to stabilise the fluctuating values of their currencies. Premier Wen Jiabao called the summit, the first of its kind, a "milestone". He said such co-operation would "have real significance" as the crisis impacted on economies around the world. The three countries have held talks on the sidelines of international meetings, but this is their first independent trilateral summit. In a joint statement, the leaders said that Asia was "expected to play a role as the centre of world economic growth in order to reverse the downward trend of the world economy".

China says fuel price reforms supported

China says fuel price reforms supported
14-12-2008

China says the "great majority" of people support a long-awaited overhaul of the country's domestic fuel price regime, which officials have said for years is inefficient and unstable. The package of reforms, which were announced last week but go into effect from January 1, are aimed at letting gasoline and diesel prices move more regularly in line with the global market, and are seen making petrol cheaper in the short term. "Different sections of society have given a relatively high appraisal of the 'proposal'," a notice posted on the website of the National Development and Reform Commission (www.ndrc.gov.cn) said. "The great majority of people believe that the fuel tax reforms will ... be beneficial for the saving of resources and environmental protection," the notice said.

China's inflation set to weaken further

China's inflation set to weaken further
14-12-2008

China's inflation will weaken further in December as the economy continues to slow, according to a key policy maker. The producer price index, PPI, will retreat "markedly" this month, increasing the possibility of deflation, said Liu Mingkang, chairman of China Banking Regulatory Commission, according to Xinhua news agency. Deflation is a situation when prices actually fall, and some economists consider it more dangerous that inflation. This is because it encourages people to postpone buying products as they expect to get a better bargain later, but that in turn only serves to further slow down the economy.