Nikkei Falls 0.84 % Due To Geopolitical Tension And Eurozone fears!

Tokyo stocks fell on Wednesday and the Nikkei stock index lost 0.84 percent, as tensions arose over geopolitical strife over conflagrations in Korean and the instability of the eurozone after Ireland’s debt-rating cut stressed investor feelings.

Standard & Poor’s downgrading of Ireland’s long-term debt caused fear of a domino effect in the eurozone and lowered investor confidence.
Adding to investor uneasiness are increasing tensions in Korean after artillery exchanges between the Republic of Korea (ROK) and the Democratic People’s Republic of Korea (DPRK).

Japan’s nearness to the conflagrations lead to share dumping in the Japanese market, according to some analysts.

Tokyo Electron fell 2.1 %, down to 5,150 yen. Mitsubishi Corp. lost 1.4 percent to 2,115 yen. Mitsui & Co. dropped 0.8 percent to 1, 330 yen.

G20 leaders meet to Strengthen to World economic system

SEOUL, South Korea – America’s move to flood its sluggish economy with $600 billion of cash, has triggered alarm in capitals from Berlin to Beijing. This has created tensions over currencies and trade gaps which are growing before the summit of global leaders this week.

The Group of 20 developing and rich nations are attempting to reform the world economy in the aftermath of the 2008 financial crisis. Two years ago the group’s leaders met for the first time. They set out an ambitious agenda to ensure stable economic growth and to strengthen financial supervision to prevent further meltdowns and to give developing countries more of a say in what’s going on.

The Federal Reserve’s decision to buy $600 billion of Treasury bonds over the next eight months helps tolower interest rates to spur growth and cut the high unemployment rate. However, this decision  is complicating  discussions on achieving those goals at the summit Thursday and Friday in Seoul

At the center of the discussions is the understanding that a decades-long global economic order centered on the U.S. buying exports from the rest of the world and running huge trade deficits while other countries such as China, Germany and Japan accumulate vast surpluses is no longer reasonable after the crisis.

The attempt to remake the world economy received some of its momentum from the rise of countries such as brazil, India, and China to become economic and political giants in their own right. The G-20 meetings themselves show the great changes since the crisis. They mark the end of a system in place since the 1940s in which the world economy was managed mainly by a small group of rich nations led by the United States, Europe and later Japan.

Indian Retail Remains Elusive to Investors

Although there has been increased interest for retailers to enter the Indian markets, retail in India has remained in it infancy.  One example is food distribution.  This is done through small “Kirana Stores” or “public distribution shops.” Supermarkets or shopping centers, even according to Western patterns exist in India only in recent years. This has resulted in a  highly restricted focus distribution shops.” on consumer needs, thus creating a problem for large scale foreign investments to spur growth.

Now despite a slow start, there is a modern Indian retail sector beginning to emerge.  In 2006  although the industry went through a tremendous change  foreign companies still did business in Cash & Carry up to 100 percent and single-brand stores up to 51 percent. In contrast, foreign investors continued operation of multi-brand stores, such as department store chains or supermarkets in a limited sense.

It was therefore all the more surprising that the Indian Ministry announced for Industry and Commerce in the summer of 2010, to allow foreign retailers in the foreseeable future investments up to an investment limit of 49 percent in multi-brand trade. The government, combined with this step is incorporating  involvement of external providers in order to modernize an inefficient trade system as well as the general infrastructure. However, with such a step only the legal barriers to entry are reduced. Foreign retailers will continue to have to deal with the fact that it is unclear whether India’s new retail formats, such as large supermarkets and discount stores, will come on board at all.

Solaris Starts Chinese Backed Hedge Fund

Solaris Asset Management, co-founded by Thomas Tey the former head of equities derivatives at Oversea-Chinese Banking Corp., is starting a hedge fund with money from investors in China.

The Solaris Capital SPC Equity Arbitrage Fund will start trading with S$30 million ($23 million) on Nov. 8, Tey said. Thomas Tey is a 24-year trading veteran with banks including Singapore- based Oversea-Chinese’s treasury division and Credit Suisse First Boston in Tokyo.

Tey’s aim is for the fund to grow to S$100 million by the end of 2011. He is actively targeting investors in Asia since raising assets in the U.S. and Europe has become “very, very tough.” About 50 percent of assets in Asian hedge funds come from Europe, while 40 percent are from U.S. investors, according to Eurekahedge Pte.

“This is not a very conducive environment to be raising money, but we expect to get to our target,” Tey, 49, said in an interview on Oct. 22nd.

The Solaris fund aims to trade stocks and derivatives including futures. The fund will be focused on arbitrage opportunities where it can profit from price differences between related securities, according to Tey.

Source

Hedging Gains in Asia

Most Asian markets fell on Friday. MSCI Asia Pacific Index was on the morning down 0.5 percent after reaching its highest level in two years the day before.

– Sentiment among investors is uncertain. Macro figures from the U.S. was a bit weak. “This week we’ve had a couple good days and investors may use this opportunity to take profit,” said Shane Oliver, head of investment strategy at AMP Capital Investors in Sydney to Bloomberg News.

Masaaki Shirakawa, Governor of the Bank of Japan said the U.S. contributed to the downside risk for the economy while the South Korean central bank explained its decision not to raise interest rates by weak growth in the European and U.S. economy in addition to a strengthening of its currency, reported Bloomberg News.

Among the few exceptions to the broad decline on Friday, the Chinese domestic stock markets rose by 2.23 percent in Shanghai and 1.01 per cent in Shenzen.

Industrial & Commercial Bank of China and China Construction Bank was among the winners in the banking index after Citigroup announced that Chinese banks will be required to show solid earnings growth for the third quarter, reported Bloomberg News.

A report from the Chinese Commerce Ministry on Friday that showed that foreign investment in China rose in September helped to further strengthen confidence in the outlook for the Chinese economy, writes Bloomberg News.

In South Korea, LG Electronics was up 2.4 percent and LG Display up 1.0 percent after another positive update from a brokerage house, wrote CNBC.

The mining company Rio Tinto also went against the trend and was up 1.1 percent driven by the company’s strong production report that was presented on Thursday, and signs that the company’s iron ore joint venture with BHP Biliton met resistance among EU regulators.

Key indicators: (at 7:06) Note: The market closes at different times)
Nikkei 225 (Japan) 9489.80 -0.98%
Topix (Japan) 825.82 -1.33%
Kospi (South Korea) 1899.35 -0.02%
Taiex (Taiwan) 8205.30 -0.12%
Straits Times (Singapore) 3217.06 0.69%
Shanghai Composite (China) 2950.81 2.47%
Shenzhen Composite (China) 1215.83 0.78%
Hang Seng (Hong Kong) 23747.36 -0.44%
Bombay Sensex 30 (India) 20393.43 -0.51%
S & P / ASX 200 Index (Aus) 4689.00 -0.21%

Deloitte Survey: Investors Bullish on China Private Equity Fund

The “China Private Equity Confidence Survey” issued by Deloitte & Touche 14 in Beijing shows that investors are optimistic about China’s private equity funds (PE ) market and RMB funds. The survey also shows China’s growing private equity funds will change the existing market structure.

The work of the international research firm Deloitte in relation to China’s private equity market found that 79% of the respondents expected the next 12 months that private equity investment activities in China will be heating up.

Deloitte China, the North China managing partner of the company’s private equity services, pointed out that the confidence many private equity investors in the China market is high, due to many factors, including the current rising economic trend, the open market recovery, growth in domestic RMB funds, and to private equity funds as a source of financing for growing businesses. The most striking of the factors is the rapid rise and growth of RMB funds.

Despite the confidence in China’s private equity fund market, the survey revealed that only half of the respondents expect plenty of capital.  Despite this, continuing support for privatization of state-owned enterprises, is set to increase. Industry, consumer, retail trade activities in the next 12 months will be the majority of those business that will go private.  This is followed by electricity, energy, the mining industry and the pharmaceutical, biotechnology and health care industries.

Andrew Zhu Deloitte Tax and Business Advisory Partner, pointed out that as China’s private equity fund market matures, the past focus on investment activities in the coastal areas to the mainland will be more substantial along the lines of second and third tier cities infiltration and this may even include some provinces and cities in the western hinterland, which will provide more competition to the Chinese mainland market.

Keep Your Eye on Korea

Seoul- For those who prefer more exotic destinations in the fastest growing region today, Asia, one of the most interesting options is South Korea. With growth expected to exceed 4 percent in 2010, and strong domestic demand. In fact, since Ecotrade has opened a strategy on the main Korean stock index, Kospi 100, which so far this year up to 8 percent maximum currently listed.

One attraction of this market is that it has internationally recognized firms. An example is Samsung Electronics and Hyundai Motors, where experts recommend the purchase of shares. For the former, the market consensus expected to close the year with a net profit of over 10,000 million euros, and even increase your cash in 2011 to almost 13,000 million, 40 percent more than expected gain in 2010. The proximity to China and strong domestic demand will allow surfing the uncertainties of the market. Lost in the exercise less than 5 percent.

A similar story is seen in the case of car maker Hyundai. Experts believe that net income will increase slightly in 2011 to over 3,200 million euros, and will feature a box of 4,600 million. Representing an increase of close to 19 percent if one takes into account the forecasts of experts who handle cash in 2010.

High Price Attracts Hedge Funds

KazatompromUranium is currently trading at prices not seen for months, and appeals to speculative investors like hedge funds to get started. As the U.S. consulting company Ux Consulting tells in her latest monthly report, yellow cake listed for immediate delivery was the third consecutive week at more than 48 dollars per pound (454 grams). Compared to the low of March 2010 is a price increase of 19 percent.

Given the low interest rate environment, professional investors speculate on the search for yield except with classics such as stocks , bonds and gold, more with exotic plants. Therefore flow for months billion in agricultural commodities and push up prices there to the highest levels in years.

Even six years ago hedge fund registration on the uranium market was active , as prices increased for the radioactive element into the flight over went and to the end of 2006 by more than five times . In 2007 it doubled the price again and in June of this year a record high reached of 136 dollars a pound .

The price rise had accelerated at the time, after governments put around the world to nuclear energy in the hope of reducing their dependence on fossil fuels and reduce emissions. In May of this year, said the uranium sector of the mining group Rio Tinto with the increasing use of nuclear power in India and China will see to it that the demand for fuel will remain strong.

According to UXC CEO Jeff Combs , the main difference to the situation in 2004 is that today more uranium is on the market. In Kazakhstan , where the world’s most of uranium promoted to the ejection 2003-2009 more has than quadrupled , as demonstrated by figures from the World Nuclear Association. They also show that the flow in the second- largest producer, Canada has hardly changed since 2003 . The Kazakh government mining company Kazatomprom plans to expand 2010 production by 29 percent to 18 000 tonnes, by 2016 it will even increase to 25 000 tonnes.

Deloitte Grows in Asia

Revenues in Asia Pacific grew 9 percent, making it the region with the fastest growth for the sixth consecutive year. Korea and India are part of the member firms that have grown over 20 percent. Deloitte China has grown by 8 percent. The market share of the Fortune Global 500 rose 2 percentage points in the Asia-Pacific. The Deloitte member firms have also contributed to the achievement of some of the largest IPO on the markets.

Investments in Fixed Assets Rose 24.8% from January in China

Fixed Asset Investments in China during the first eight months increased by 24.8% yoy to reach 14,100 billion yuan, the National Bureau of Statistics (NBS) said on Saturday.

The growth rate was 0.1 percentage point lower than that for the first seven months.The investments in the state and controlled by the state rose 20.0% to 5850 billion yuan.

Investments in the property market rose by 36.7% to 2,840 billion yuan during the first eight months.

Investment in projects of the central government rose by 11.4% to 1120 billion yuan, while investment in projects of local governments increased by 26.1% to 12,980 billion yuan during the first eight months .

Foreign investment rose 2.5% to 488.7 billion yuan from January to August over a year. Investment from Hong Kong, Macao and Taiwan rose 15.8% to 445.4 billion yuan. The domestic business investment rose by 26.3% to 13,110 billion yuan.