Markets Archives - Page 478 of 782

E(X)tolling the Virtues of XBRL Down Under

As we come to the end of another financial year-end reporting season and await the deluge of impenetrable financial reports, we can only lament that another year has passed and an important reporting mechanism widely used in many international exchanges, is still not with us.

In Australia, financial statement information continues to users in detailed and complex reports that are not user friendly. These may now be electronic in pdf format, but the problem is that the data is not extractable electronically, accurately, and efficiently. There is a solution passing us by.

Reassessing Critical Asset Sales in Australia

The change to foreign ownership of Australian companies and critical infrastructure continues with the takeover offer for rail and ports operator Asciano from Brookfield Infrastructure Partners, a Bermuda-based company listed on the New York and Toronto stock exchanges.

The offer, which values Asciano at US$9 billion, is a part cash (75%) and part scrip (25%) bid. While it has the blessing of the Asciano board, the offer is yet to get approval by both the Australian Competition and Consumer Commission and Foreign Investment Review Board.

China’s African Investment Rules

China’s economic engagement in Africa tends to elicit controversy. Many Chinese deals are accompanied by Western headlines such as “China in Africa: Investment or Exploitation?” or “Clinton warns against ‘new colonialism’ in Africa.”

Yet in recent African public opinion polls, China scored higher in popularity among Africa populations than anywhere else in the world, according to Pew surveys.

A Durable Report

The US dollar and equity futures responded favorably to the stronger than expected durable goods orders. The sizable upward revision in the June shipments (from 0.3% to 0.9%) underscores expectations of an upward revision to Q2 GDP when reported tomorrow.

It’s not You, it’s Your Economic Structure

South Korea’s economic growth has slowed significantly since the 1997 Asian financial crisis. The five-year average GDP growth rate was 7.9 percent during 1991–95, but dropped substantially to 4.5 percent for 2001–05 and then 3.8 percent in 2006–10. This slowdown closely links to that in domestic demand. After the burst of the credit card lending boom from 1999–2002, growth in domestic demand has been close to zero and has even dropped into the negative.

Xi versus Li

China appears to be flailing. Its stock market stabilization efforts have failed miserably. It looks as if it has botched another attempt to let market forces have greater sway over the yuan’s exchange rate yet.

Despite Sharp Slowdown in Chinese Economy, IMF Says Not Recession, Just “Necessary Adjustment”

In recent months, negative predictions for the Chinese economy filled the news, and less than stellar performance that seemed to prove those predictions correct. Many analysts had predicted that China might enter into an economic recession echoing the one that occurred in much of the world in 2008, but notably had a much less significant effect on China. Given China has the second largest economy in the world, such predictions have dire ramifications for the rest of the world.

China’s Gender Skew Ramifications

In the last decade, China’s serious gender imbalance has made headlines: millions of Chinese men are doomed to bachelorhood due to a shortage of women, with awful social consequences. The conventional wisdom is that this skewing — a sex ratio at birth far higher than the natural ratio of 105 males to 100 females — is caused simply and solely by China’s one-child policy.

Rebalancing China and India’s Economies

When the global financial crisis swept across the world in 2008, it was widely hoped that the external demand shock would affect India as badly as China. After all, exports of goods and services accounted for about 40 percent of Chinese GDP, and domestic consumption for around 50 percent, while India consumed over two thirds of its GDP and exported only around 20 percent. As things turned out, while both economies initially had a relatively soft landing, Indian growth has dipped far more sharply than that of China.

Why?

A Preview of the Emerging Markets

It is a bitter start of the week for EM. It is hard to imagine either stabilization or meaningful differentiation in EM until asset prices in major markets find a bottom. In addition, the second leg down in commodity prices will keep fundamental pressure elevated for the exporters. Russia, Malaysia, Mexico, South Africa, and Brazil will be the barometers for this. Some have noted the break above the USD/CNY 6.40 level as meaningful, but we do not read too much into it. The Chinese yuan is doing what officials said it would do: there is more volatility but no large moves.