Markets Archives - Page 377 of 731

India’s Budget Take Three

When India voted in the Narendra Modi government with a stable majority in the last election in 2014 it was widely expected to pave the way for major changes. However, political obstacles and a tendency to follow the path of least resistance have limited progress. The new direction, which emphasises infrastructure, agricultural productivity and marketing as well as health, education and training, governance and making it easier to do business, is the right one — but implementation is critical.

Homebuilders See No Boost as Fed Caution Mounts

Further worries about the economy are coming from the Federal Reserve as homebuilders’ expectations drop. According to a new study by the National Association of Homebuilders, firms see little signs of renewed strength in demand for new homes as prices continue to skyrocket and wages stagnate.

The NAHB’s Housing Market Index (HMI) remained at 58 for the third month in a row, despite expectations of an increase, leading to a “cautiously optimistic” outlook for construction growth this year, according to NAHB Chief Economist Robert Dietz.

Under the Surface of the Australian Sub Deal

Australia’s selection of a replacement for its Collins-Class submarine, termed the SEA1000 program, is entering its final stages. The competitive evaluation process set up by Australian government is nearing completion as the five-person Advisory Expert Panel finishes its consideration of French, German and Japanese bids.

Emerging Market Setup: Relative Strength Persists

EM ended last week on a firm note. Given the absence of any Fed-specific risks or any major US data releases, that firmness could carry over into this week. The failure to reach an agreement in Doha by oil producers is weighing on some countries through lower oil prices, but the global liquidity story ultimately remains risk-supportive for the time being. China data last week was also helpful for market sentiment.

If Britain Leaves the EU, Will Investors Leave Britain?

Foreign investors love Britain, but Brexit would kill the vibe. According to new research colleagues and I have conducted at the Centre for Economic Performance, leaving the European Union could lead to a fall in inward foreign direct investment into the UK of close to a quarter. This would damage productivity and could lower people’s real incomes by more than 3%.

Indonesia Stumbles Into More Natural Resource Bets

Indonesian President Joko Widodo’s (Jokowi) order on 23 March 2016 that the Masela Block use an onshore Liquefied Natural Gas (LNG) refinery ended six months of intrigue — and years of delay — about Indonesia’s largest offshore gas field. Rather than the floating plant (FLNG) proposed by contractors Inpex and Royal Dutch Shell, gas will be piped to a remote island in Maluku Province where it will be liquefied and used for industry.

Mostly Central Bank and Government Headlines in the EM Space

Bank Indonesia will use the 7-day reverse repo rate as its new benchmark policy rate, the ruling party in South Korea unexpectedly lost parliamentary elections, the Monetary Authority of Singapore eased monetary policy to recession settings, Turkey has nominated its next central bank chief, the Brazilian special lower house committee voted 38-27 in favor of impeachment, the first round of Peru’s presidential election was inconclusive

The Market Brushes off Questionable Chinese Data

China’s slew of economic data lends credence to ideas that the world’s second-largest economy may be stabilizing. However, the data failed to have a wider impact on the global capital markets, including supporting Chinese equities.

In fact, the seven-day advance in the MSCI Asia-Pacific Index was snapped with a fractional loss today. European shares are also lower on profit taking, breaking a five-day advance. Commodities, including oil, copper, nickel and zinc are also trading off.

China: Dam Nation

China’s largest hydroelectric dam on the Brahmaputra River (known as Yarlung Tsangpo in Tibet) recently became fully operational. The $1.5 billion 510 megawatt Zangmu hydroelectric dam has brought in its wake a flood of concerns, especially in India, regarding its downstream impact.

Sri Lanka…What Went Wrong?

Last year, soon after taking power as president of Sri Lanka, Maithripala Sirisena requested a US$4 billion loan from the IMF to restructure its debt repayments. The bailout package was rejected by the IMF. It warned the government instead to rationalise the tax system and arrest growing inflation.