Asia This Day:China Construction Bank Reports

China Construction Bank has released its Q4 earnings report.The bank posted a net income gain of 4.8 billion dollars.Profit for the quarter was up by 25%,missing estimates.
Those were considerable earnings,but,all the same,there continues to be deep-seated concern at the country's biggest mortgage lender.China Construction Bank has the most exposure to local government lending,real estate lending and consumer debt.Any problems in those areas could well crimp future earnings at this prominent institution.
Credit quality indeed declined there,with non-performing loans increasing from 1.02% in the previous quarter to 1.09% in Q4.The financial titan cited a more severe global economic environment and domestic economic restructuring as challenges it faces in 2012.
China Construction Bank is represented in a number of exchange traded funds with a Chinese or emerging market orientation,so its performance does affect the well-being of foreign investors.
On Monday morning,Asian markets opened higher,with the MSCI Asia Pacific Index up by 0.15%.
iShares Trust FTSE/Xinhua China 25 index(FXI)

Chinese Trade Suffers From Euro Crisis-and how this could affect you

Chinese exports are slowing down and its trade surplus is shrinking,newly released figures show.China's export growth fell to 13.8% in November-the least growth since December 2009.Its trade surplus dropped to 14.5 billion dollars,down from 17 billion in October and below the estimate. This is a result of slowing demand from China's European trading partners because of the current debt crisis,as well as a hesitant U.S. consumer from the weak employment picture.
China is observing its 10th anniversary of joining the World Trade Organisation.President Hu Jintao said China will not deliberately pursue a trade surplus.China has fulfilled its promises to the World Trade Organisation.We will work hard for a balance of payments.China has some unbalanced and unsustainable elements that have to be improved,Mr.Hu admitted,responding to European and U.S. criticism.
As for the slowdown in export growth,Chinese officials said China may continue cutting bank reserve requirements in order to stimulate growth by encouraging lending.China must keep growing at a robust pace to provide jobs for its rapidly urbanising population.
A slowdown in China could have negative implications for the many large U.S. multinational corporations,such as Ford Motor,General Motors,General Electric and Wal-Mart,who rely on China for a portion of their own growth now.A deterioration in business conditions in China may hinder the U.S. economy in consequence of globalism.
iShares Trust FTSE/Xinhua China 25 index(FXI)

China Construction Bank Reports

Asia's stock markets were modestly up Monday morning,perhaps feeling that last week's selling was overdone.Donald Williams of Platypus Asset Management in Sydney said he thinks this will be a consolidation week.Traders will be watching the Federal Reserve's annual conference in Jackson Hole,Wyoming for signs the Fed will implement a third round of quantitative easing,supporting the markets by purchasing more bonds.
We're not looking for a major rally;it's more likely that we trade sideways.The outlook for most companies is the murkiest since 2008.It'll take another 2-3 months to figure out what's ahead.
We're just adding to existing positions.We haven't changed to being more defensive,Mr.Williams noted.
China Construction Bank reported record earnings for the first half of the year.Credit demand was strong and there was a 14.5 billion dollar increase in net income,up 31%.
South Korean golfer Na Yeon Choi lost to Sweden's Suzann Pettersen in a playoff at the Safeway Classic in Oregon.They had both finished in regulation at six under par.
In Sydney,it was 61F on Monday under partly cloudy skies.Winds were SE at 14mph,and the humidity was 59%.
iShares Trust FTSE/Xinhua China 25 index(FXI)

Purchasing Managers Graph Slowing Economy

The Institute for Supply Management,a U.S. buyers' trade group,has released its Purchasing Managers Index for September.The manufacturing sector index fell to 52 in September from 52.9 in August,but had been expected to reach 52.5 at a minimum.This indicates continuing ecconomic growth,but at a slower pace than was previously believed.The ISM manufacturing index surveys more than 350 companies.In September,new orders fell to 53.4,down from 55.3 in August.The production index dropped to 54.6 from 56.1.The ISM service sector index for September depicts a similar scene,although it is more significant to the U.S. economy,which is predominantly service-oriented.The September reading was 54.8,down from 55.8 in August.New orders declined to 53.4 from 57.Inventories plummeted from 57 to 50,on account of the decline in orders.These are not recessionary numbers,but seem to support a gentle landing scenario at this late phase of the business cycle.The ISM manufacturing index was seconded by the factory orders report,which showed a drop of 3.3%,versus an expected fall of 2.4%.Investors are looking to multinationals such as IBM or exchange-traded funds such as the iShares Trust FTSE/Xinhua China 25 index(FXI) to get beyond the U.S. slowdown.