Asia This Day:Where To Look for Asia-Pacific Success

Some rather disappointing data came out of East Asia last night.Japan's April Producer Price Index fell 4.2% on the year,versus an estimate of 3.2%;while China's industrial production grew 6.0% versus an estimate of 6.5%.China's April GDP slowed to 6.88% from 7.1% in March.Investors will naturally pause for a moment to consider these facts.*
As we move from a manufacturing-led Chinese economy to a consumption-led economy,we have to expect growth to slow down;but I still think you're going to find great assets to own in the China market,said BlackRock's Asia-Pacific Chairman Ryan Stork.
It's just going to take some time.You've got a very big economy;it's going to take years.I think the People's Bank of China is there;but we're going to be in a market of near-term volatility the next few quarters,there's no doubt.*
I think you'll see new,innovative investment solutions.I think China,India,Indonesia are three markets that we quite like at the moment.There's downward pressure on Japanese stocks-it's a bit overdone.From our perspective,Japan is still a really big part of our strategy,both from an institutional side and an individual wealth side.You look at the ability to own good companies in Asia.It's more of a fundamental story now,rolling up your sleeves and finding those companies.*
There's a lot of evolution that has to take place in Asia for the use of etfs.The Bank of Japan is a buyer of etfs.It creates a lot of awareness among wealth investors.The use of etfs and long/short investments will eventually find their way into wealth investor portfolios,the more tactical use of passive investing.In the multi-asset space,we have an enormous platform,great teams.We have been growing at an exceptional pace relative to the rest of the firm.We've expanded our team in the equity side;we'll be expanding in the alternative side,Mr.Stork explained.*
iShares Japan ETF (EWJ),iShares China Large-Cap ETF (FXI),iShares MSCI India ETF (INDA),iShares MSCI Indonesia ETF (EIDO),BlackRock Inc (BLK)

Citi's Global and US Economic Forecasts - what the risks are

In late February,Citigroup issued its global economic outlook.It cut its global expansion forecast from 2.7% to 2.5%.Global prospects are worsening further,with deterioration across advanced economies alongside previous weakness in the emerging markets,Citi's research note said.Britain's upcoming vote on whether to leave the eurozone is a key extra near term global risk that would hurt both the UK and EU economies;while more policy easing from the European Central Bank and Bank of Japan will provide only limited stimulus.*
On 15 April,Citi released its US forecast.Our US outlook has little potential to be surprised on the upside,but the risks are very evident on the downside,said William Lee,head of North American Economics.Risk is from looming uncertainty as to when the Fed will make rate hikes,as well as many important political events here and abroad scheduled in the next few months.Recently reviewed and incoming data imply GDP will grow by 0.9% in Q1 and 1.7% for the year.
Despite such tepid growth prospects,we project a slow decline in the unemployment rate to 4.6% by end-2016,and 4.5% by end-2017.We continue to believe there will be only one rate increase this year-likely in September-unless developments stir financial markets and/or dampen further growth prospects.In that event,December or a later meeting would be a more likely date for an increase,Mr.Lee noted.*
Citigroup (C)

Asia This Day:Sunny Asian Markets;New Zealand Deals With Downpour

The Australian and New Zealand dollars rose Monday on the recovery of risk appetite.
New Zealand is expecting more heavy rainfall as residents assess the damage from a weekend deluge.At least 90 homes in the Tasman district experienced some flooding,and swells of up to four metres were noted at Astrolabe Reef in the Bay of Plenty.
There was also concern that a cargo of plastic beads was spreading over beaches after a shipping container aboard the shipwreck Rena was damaged by the storm.
India's Nifty Fifty index rose 0.55% Monday with most sectors showing strength,except for the IT sector that was dragging the market down a bit.Reliance was up 0.99% and Bharat Petroleum climbed 0.90%.
The MSCI Asia Pacific index rose 0.6% ,led by consumer and telecoms shares.Asian stocks were up generally Monday on Japanese exporters rallying because of the weak yen,as the G20 developed nations didn't object to Japan's policy stimulus.The G20 feel that the Bank of Japan's plan to buy seven trillion yen,or 70.02 billion dollars,of bonds per week will boost both the Japanese recovery and the global economy,according to Rajiv Biswas,chief economist for the Asia Pacific at IHS Global Insight.
The Nikkei 225 index rose 2.00%,while the ASX 200 gained 0.49%.Gold surged 1.78% to 1420.40 an ounce as hedge funds found it to be a bargain after last week's collapse.

Asia This Day:Chinese Growth Disappoints;Australia's Golf Triumph

Australian home loans were up 2% in February,and those in arrears were at their lowest since December 2010.Indeed,people were paying their loans off several months ahead of time.
The Bank of Japan will continue with its easing programme until we achieve the inflation target of  2 %,said BOJ chief Haruhiko Kuroda.
Hong Kong air pollution was very high at all three roadside monitoring stations.
China GDP growth was disappointing,coming in at 7.7%,versus the 8.0% estimate.Asian shares declined in response in early Monday trading,with the MSCI Asia Pacific index heading down 0.37%.
China's mass consumption is basically stable,said Pu Yonghao of UBS Wealth Management.Corporate investment is weak,however,as is real estate and government investment because of government policies.UBS downgraded China to neutral in response,along with Brazil,India and Russia,which also underperformed.
On the other hand,UBS favours South Korea because of Samsung's success.The Korean colour is basically Samsung's colour.China has to push up innovation and regain pricing power.It's their brand.
In golf,the Australians made a concerted push at The Masters tournament in Augusta,Georgia as Adam Scott bested Argentina's Angel Cabrera in a playoff to take the coveted green jacket,the highest honour in professional golf.Scott and his fellow countrymen Jason Day and Marc Leishman played like men possessed all weekend.They would no longer be denied the prize that had eluded them forever.
At the Formula One Chinese Grand Prix near Shanghai,Spain's Fernando Alonso captured first place,while Kimi Raikkonen of Finland and Great Britain's Lewis Hamilton took second and third,respectively.There were nine lead changes by six different leaders in the action-packed race that filled the stands of Shanghai International Circuit with flag-waving fans.
The overall F1 points leader is World Champion Sebastian Vettel of Germany,who finished fourth.His team Red Bull-Renault leads in the constructor's standings.
Samsung Electronics Co Ltd (SSNLF)

Asia This Day: Australia's Energy Assets;Japan's Economic Outlook

PetroChina is seeking 3.7 billion dollars of Australian energy deals.Overall,the state-owned oil and gas enterprise is looking to acquire 60 billion of overseas assets in the next 10 years.
Beach Energy Ltd is exploring an Australian shale gas field with Chevron.The company said the Cooper Basin region in the Australian outback will be a major onshore petroleum province.The gas in the basin could meet New South Wales needs for the fuel well into the future,plus be delivered into export markets through liquified natural gas facilities.
China's January-February industrial production was up 9.9 %,the weakest start to a year since 2009.The country is consolidating its 27 government ministries into 25.The ministry of railways,which employs 2 million people,will be split in two,between a policy arm and an executive arm.This is in line with railway ministries in other parts of the world.
In historical terms,the silver market is quiet,said Greg Smith,Director at Global Commodities Ltd in Adelaide,Australia.You're pretty close to more buyers than sellers.Solar panels are consuming it.
Silver is also used in electronics and medical applications.
I like sugar,coffee and soy meal.The inflationary impact of food could light the inflationary fire.
In Japan,the Nikkei was up at midday Monday on strong exports from the weaker yen and US employment figures.It was the eighth straight day of Nikkei gains.
Japan is doing the right thing,according to Mike Kurtz of Nomura Securities.The election on December 16 was a referendum on policy change.Kuroda-san,the Bank of Japan governor nominee,will reflate the economy.Japan could see a 30% upside over the next 12-18 months.
Hiruhiko Kuroda said he will consider continuing asset purchases.Buying derivatives is an option.
iShares Silver Trust(SLV),iShares Japan Index Fund(EWJ),Beach Energy Ltd(BPT:ASX),Chevron(CVX)

Asia This Day:Australia and Japan Outlook

Any talk of a currency war is overblown,said Australian Treasurer Wayne Swan.Market-based exchange rates,fiscal and monetary policy supporting economic growth and jobs is the G-20 approach.
Everyone else has a stake in the US achieving economic growth.What we really want to hear is certainty,not policy uncertainty and regulatory uncertainty.That's the climate we need.
David MacLemore,Chairman and Interim CEO of mineral exploration firm Boart Longyear said we're seeing some pricing pressure,but overall it's starting to stabilise and we're confident in the guidance.We're a global player with 30-35% of our business in Australia.
It's a general mining industry cost reset.It doesn't feel like a cyclical downturn.
Boart Longyear is a Utah-based company that provides drilling services and products.
The basic problem in Australia is,the mining sector has driven growth,according to Shane Oliver of AMP Capital Investors.We can't rely on that anymore.At the same time,the rest of the economy is relatively soft.
The Bank of Japan said the economy is relatively weak,but Japan will return to a moderate recovery path.
The share market in Japan is maybe telling us something.I think there's a good chance it's telling us in twelve months' time the economic measures are starting to work.The Japanese government has started down the right track and the share market reflects that.So far,it's up about 10% this year.We could see it rise 30%.
In early Tuesday trading,the Nikkei index was down 2.12%,and the ASX 200 declined 0.80%,on concerns about political gridlock in Italy.
Boart Longyear(ASX:BLY),iShares Japan Index Fund(EWJ),iShares Australia Index Fund(EWA)

Asia This Day:Petronas To Make Big Canadian Acquisition

The Malaysian state-owned oil and gas company,Petronas,intends to make a major Canadian acquisition.The firm is expected to spend about five billion dollars for a substantial foothold in North America.It's following China's lead in seeking global energy assets.In June 2011,the company aqcuired a stake in Canadian shale gas assets for just over a billion dollars.
China's purchasing managers' index came in stronger than expected.The PMI reading was at 53.1,with 50 showing economic expansion.The index is focused on large enterprises and is affected by seasonality.Natural resources such as rubber and copper will be more in demand on the China and U.S. outlooks.
Tropical Storm Pakhar has hit the coast of Vietnam.The first storm of the year,it will also be troubling Thailand.
Mainland Chinese and Vietnam markets are closed today,Monday,for holidays.It is Tomb Sweeping in China and the Hung Kings' Anniversary in Vietnam.China's markets will remain closed through Wednesday.The rest of the Asian markets opened largely higher this morning,with the MSCI Asia Pacific Index up 0.28%.Japan's markets rose despite a gloomy Bank of Japan Tankan survey of business sentiment,which logged a -4 reading,showing more pessimists than optimists among large businesses.
It was partly cloudy in Kuala Lumpur,Malaysia this morning,with a temperature of 82F.

Typhoon Bears Down on East Asia

Typhoon Nalgae has killed three people in the Philippines.Now the storm is heading across the South China Sea to Hainan Island,China and Vietnam.
Chinese financial markets are closed all week for the Golden Week holiday.China's non-manufacturing Purchasing Managers Index came in at 59.3,up from 57.6 the previous month,indicating growth in the service sector.
The MSCI Asia-Pacific Index was down 1.75 Monday morning,following the U.S. markets' lead on Friday.It has lost 18% on the year.The euro/dollar fell in early Asian trading,and the dollar/yen rose.
Thai Prime Minister Yingluck Shinawatra was verbally attacked by hackers,who broke into her Twitter account.The hackers questioned her competence to lead.If she can't protect her Twitter account,they asked,how can she protect Thailand?She was sworn in as Thailand's 28th prime minister on August 10.
The Bank of Japan's Tankan business sentiment index showed flat to improved business confidence.
Korean American golfer Kevin Na won the Justin Timberlake Shriners Hospitals for Children Open at TPC Summerlin in Las Vegas.Na shot a fourth round 23 under par 65.It was his first PGA Tour win.
In Tokyo on Monday,it was 66F under scattered clouds.The wind was North at 14 mph,and the humidity was 37%.

Asia This Day

News from Japan dominated the opening hours of the first business day of this week.In M&A news,Toshiba is said to be close to acquiring Swiss smart meter firm Landis+Gyr.Landis+Gyr has outfitted tens of thousands of Danish homes with their energy management technology.
Japan's machinery orders were up 2.9% for the month of April and 6.8% on the year.This may be because Japanese companies are getting set to resume full operations following March 11th's earthquake and tsunami.
The Japanese government is asking banks to forgive Tokyo Electric Power's debt.Tepco,owner of the damaged nuclear plants,is critical to the Tokyo area and the national economy.
Mizuho Financial forecasts an 11% profit increase this year.
Elsewhere in Asia,Singapore strongman Lee Kuan Yew has resigned from the nation's cabinet after five decades,saying it was time for someone younger to take the reins.
In early Asia trading,Japan's Nikkei 225 was down 82.66,while the Korean Kospi declined 14.26 and the Australian ASX 200 dropped 64.70.
It was 82F in Hong Kong under mostly cloudy skies.The day had begun with fog and rain.
iShares Japan MSCI Index Fund(EWJ)

Why the Market is Rising

The market is rising because the Fed and Bank of Japan are printing money,according to Jim Bianco of Bianco Research.The Fed is probably looking for a reason for Quantitative Easing 3.The tipping point is when the liquidity manifests itself as inflation.
Wages are going up in China.It's coming.It's all gonna eventually lead to higher inflation expectations-probably late this year or early next year.Input costs,raw material costs are definitely gonna start to be a problem.
The economy is better than last summer.Has it progressed enough to support a 30% rise in stocks?Not entirely.Maybe a third or a half is attributable to QE2.That's a 15% correction in the market,Mr.Bianco estimates.
Quantitative easing is the Federal Reserve program of buying U.S. Treasury securities or other assets in order to bolster the economy by keeping interest rates low.

Asia This Day:Japan Quake Business Effects-plus an update

Japan is bracing for rolling power blackouts today.Several nuclear plants are offline-one of them permanently,crimping the country's electricity supply.Japan needs 40 million kilowatts,but has been reduced to 10 million.In consequence,there will be 3-hour blackouts for each district.The central business district in Tokyo,where government offices are located,will not be affected.
There is also a shortage of fresh food,water,candles,batteries and rice.Relief supplies are beginning to make their way northward,but many areas have yet to see any.
Cooling efforts continue at four nuclear reactors.U.S. officials said that contamination is not expected to reach America's shores,even though 180,000 Japanese have been evacuated from the reactor zones.Singapore is testing all food imports from Japan for radiation.The imports are predicted to become more expensive as their supply dwindles.
The Japanese stock market reopened Monday,with the Nikkei 225 index down 4.46 at lunchtime.The more broadly based Topix index fell 5.85,while the yen rose 0.45 against the U.S. dollar.Construction stocks were up as high as 62%.
Citigroup said Japanese industrial production would fall 1-2% because of the quake,but will ultimately benefit as reconstruction gets fully underway.Societe Generale feels that the quake will lower bond yields,but the Japanese economy will recover.
The Bank of Japan moved its scheduled meeting up an hour.It is injecting trillions of yen into the system to ensure liquidity.
Update:Nils Diaz,former chairman of the Nuclear Regulatory Commission,says the Japan nuclear accident is relatively low level.He ranked it as a 2 or 3 out of seven.The Japanese workers have it well in hand,carefully releasing small amounts of radiation.It isn't an uncontrolled event such as Ukraine's Chernobyl accident was in the 1980s.As well,the Japanese reactors are more advanced in design and are recovering from a natural disaster,not human error as occurred at Chernobyl or Three Mile Island in Pennsylvania.
Toyota and Nissan have shut production down for the moment.Toyota's stoppage will mean a cut of 40,000 vehicles.On the other hand,Toshiba is restarting a chip factory,though Sony has shuttered facilities.
iShares Japan Index Fund(EWJ)

A.M. Asia

Tokyo woke to a sunny morning with a light breeze.The Bank of Japan will begin a two day meeting there.It is expected to expand a low interest loan facility.There are 30 trillion yen available for the economy-boosting attempt.
The 19th Commonwealth Games have been opened in Delhi by Prince Charles.The eleven-day event will feature athletes from 71 countries and territories with a British inheritance.A big fireworks display capped off the showcase of Indian history and culture that initiated the games.India was sharply criticized for not preparing for the games adequately.Poor accommodations,infrastructure and security were cited by the critics.
Chinese initial public offerings have been doing well on the U.S. market.Shares of Chinacache International,an Internet content firm;as well as SouFun Holdings,a property website;and restaurant chain Country Style Cooking have appreciated significantly.
The week began with stocks gaining about 0.40 on the New Zealand market.