Citi Likes Emerging Market Stocks

Citigroup predicts a nearly 27% upside to emerging markets stocks in the next year.Our main reasons for optimism:consensus is too bearish/underweight emerging markets,liquidity is ample,economic surprises are improving,earnings are outperforming developed markets,and valuations look cheap,Citi said in a note. The Federal Reserve program has propped up emerging market currencies,equities and bonds as it pumped liquidity into the financial markets. The emerging markets central banks' balance sheets should provide enough liquidity to take up the slack of a Fed withdrawal.In aggregate,the balance sheets of growth emerging markets central banks are still expanding by 6.1% on a year-on-year basis .A strong relationship exists between the growth rate of the asset side of central banks' balance sheets and price to book valuations.Expand the central banks' balance sheets and price to book valuations follow,the note goes on to say. Citi favours Asia over the Middle East and Latin America.It prefers China,South Korea and Taiwan in Asia. iShares China 25 Index Fund(FXI),iShares Emerging Markets Index Fund(EEM)

Body of Missing Iraq Vet Found;Man Charged

The body of a missing Iraq War veteran,Mirabel Manriquez Ramos,36,has been found in a remote area of Orange County,California.Police found the body on May 16 in the bushes of Modjeska Canyon,near Santiago Canyon Ranch and Jackson Ranch Road when local residents noted a strong odor there.
Charged  May 21 with first-degree murder in the case was Ramos' roomate of two years,Kwang Chol Joy,54.She had told him to get out because he wasn't paying his share of the rent.He may also have been infatuated with her,a prosecutor said.
Joy had described Ramos as his best friend and said he gave police a DNA sample shortly after her disappearance.He is being held in lieu of a million dollars bail and will be arraigned June 7.
Ramos was a prominent US Army veteran of Iraq and Korea.The former sergeant and paratrooper spoke publicly about her experiences readjusting to civilian life.Last seen May 2,she was to have spoken at a Cal State Fullerton veteran's appreciation dinner.
Ramos,described as a top student,was also to have received a criminal justice degree May 26 from the University.Her niece will accept the degree for her.

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:Manufacturing Declines Across Region

Manufacturing is in decline across the Asia-Pacific region,according to the latest data.In Japan,the Tankan index of large manufacturer sentiment fell to -3 from -1,the Bank of Japan reported,and there was a second straight decline of industrial production in August.
HSBC's purchasing mangers' index showed 11 straight months of manufacturing decline in China,while the official Chinese PMI charted the second straight monthly drop on diminished internal and external demand.In South Korea,exports fell 1.8% in September.
Australia is also slowing down,with its manufacturing index slipping 1.2 to 44.1,meaning contraction,in a seventh straight month of decline.China's economic growth is at a 22-year low.The European debt crisis and fears about the US economy are crimping Asian business activity.
The MSCI Asia-Pacific index fell 0.28% in early Monday trading.Markets in Hong Kong,Shanghai and Seoul were closed for holidays.
The Chinese Communist Party will hold its 18th Party Congress on November 8.At that time,new leaders Xi Jingping and Li Keqiang will take office as President and Premier,respectively.

Asian Markets Open For Business

For workaholics worldwide,several Asian markets opened for business Monday morning with mixed results.The Japanese Nikkei rose 1.06;Shanghai was down 0.28;Korea's KOSPI dropped 0.53;and the Thailand SET edged 0.17 higher.Australia,Singapore and Hong Kong remained closed for Boxing Day,the day after Christmas.
Gold and silver were flat in early Asian trading.
In FX trading,the Korean won rose on optimism about the global economic recovery.
Rubber was at a two week high on the U.S. demand outlook.Shanghai copper dropped for the first time in a week and Chinese rubber is expected to grow more slowly on the Chinese demand outlook.Japan's Hitachi Construction Machinery predicted Chinese first half 2012 sales would be disappointing.
Chinese President Hu Jintao met Japan's Prime Minister Yoshihiko Noda in Beijing.

Hyundai Heavy Busy In Africa

South Korean industrial titan Hyundai Heavy Industries has won an approximately 900 million dollar contract to build two offshore gas platforms in Nigeria.The deal is with a U.S. integrated oil company such as Exxon Mobil or Chevron,a person familiar with the matter disclosed.
Hyundai Heavy will carry out the entire project,from engineering,procurement,construction and installation to commissioning of the offshore platforms.
Hyundai Heavy was founded in 1972.It leads the world in shipbuilding tonnage,and is also active in the engineering and building of industrial plants;engines and machinery;construction equipment;electrical systems;and green energy.
The Hyundai Spirit is defined as Creative Wisdom;Positive Thinking;and Unwavering Drive.
iShares MSCI South Korea Index Fund(EWY)

Rice Crop Hindered By Flooding

The UN is warning that flooding in Southeast Asia may result in food shortages.Rice paddies have been devastated in Thailand,Cambodia and Laos.In Thailand and Cambodia,12.5% of the rice has been lost.Thailand,the world's largest rice exporter,may lose up to 25% of its harvest.These losses may cause a 17% price increase.
The Stock Exchange of Thailand is closed today,Monday,for the Chulalongkorn Holiday,which honors the death of a revered king.
In South Korea,the Pohang Iron and Steel Company,or POSCO,has reported a 75% drop in profits.This is because of both less demand and lower steel prices.POSCO is the world's third biggest steel producer.
Taiwan's Yani Tseng won the inaugural LPGA Taiwan Championship on Sunday,shooting a six under par 66 at the Sunrise Golf and Country Club in Yang Mei.It was Tseng's seventh LPGA Tour win of the season as she was cheered on by a large crowd of supporters in her native land.She donated 100,000 dollars of her prize to Taiwan junior golf.
In Bangkok on Monday,it was 88F under scattered clouds.The wind was NE at 6 mph,and the humidity was 58%.
POSCO(PKX)

Asia This Day:Vietnam Prices Soar

Vietnam's inflation is up 22.16%,the highest in the region.Vietnam says it is unlikely it will meet its 17% inflation target.Food and transport costs are up,and raising interest rates didn't help restrain inflation.In Asia generally,higher oil and food expenses,coupled with a tight labor market,are driving inflation higher.
Korean electronics titan Samsung is the global smart phone leader,according to the latest research.The company has sold up to 21 million smart phones,with Apple coming in second and Nokia third.Samsung's Android-based phones are extremely popular.
Australia's Cadel Evans has won the Tour de France cycling event.At 34,he is the oldest winner of the race since 1923.
The New Zealand dollar,the kiwi,is near a record high on concern over the U.S. debt problem.Asian shares were modestly lower this morning,Monday,for the same reason.
In Ho Chi Minh City Saigon,it was 84F under partly cloudy skies.The humidity was 74%,with winds SW at 9 mph.

Asia This Day

Some Asian markets are closed today,Monday.Australia and New Zealand are observing Anzac Day,and Hong Kong is marking Easter Monday.Of those which are open,the Nikkei was up 0.48,while the Korean Kospi rose 0.30 and the Singapore MSCI futures were virtually flat,edging up 0.05.
Australian Prime Minister Julia Gillard was working on the holiday,visiting Korea in search of a trade deal.She said the partnership between the two countries was full of promise and potential.She also toured the Demilitarized Zone between North and South Korea.
Tension flared on the border between Thailand and Cambodia.Ten soldiers have been killed since Friday in the territorial dispute,which started three years ago over ownership of several temples in the area.
A number of earnings reports will be issued this week.Big Chinese banks,tech companies,REITs,Panasonic,Canon and Honda are among those reporting in China and Japan.
The Hong Kong morning dawned clear at 79 degrees F.The humidity was 61% and winds were W at 4 mph.
Canon(CAJ),Honda Motor(HMC),Panasonic(PC),iShares FTSE Xinhua China 25 Index (FXI)

Hyundai Heavy's China Plans

Hyundai Heavy Industries is building a plant in China for heavy duty bulldozers.The factory will initially produce 8,000 of the three and five ton machines a year,ramping up to 10,000 within five years.They are also planning to produce heavy equipment in Brazil,Africa and the Middle East,inspired by their success in China.They entered the Chinese market in 1995,and their Chinese operations account for 50% of their global sales.
Besides manufacturing construction equipment,Hyundai Heavy has a shipbuilding division that is number one globally,with 15% of the world market.The company also produces electrical systems,industrial plants and offshore structures.Hyundai Heavy is a component of South Korea's KOSPI composite stock price index.In the U.S.,the company trades on the OTC pink sheets.

Pfizer and Samsung Medical Center Collaborate

Pfizer,the world's largest pharmaceutical company,is collaborating on the study of liver cancer tumors from Korean patients with Samsung Medical Center in Seoul,South Korea.This joint research will generate genetic profiles and aims to direct therapies and enhance outcomes for liver cancer patients.Professor Park Cheol-Guen in Seoul and Dr.Neil Gibson,Pfizer's Vice President of Oncology Research,are among the participating scientists.
Liver cancer is especially common in Asia.Pfizer took note of South Korea's world class research environment and chose it as the hub for addressing Asia's pressing need for a liver cancer drug.SMC has been building a large liver cancer specimen collection and developing collaboration with research partners,expanding the knowledge base for liver cancer diagnosis and treatment.The institute has been designated a member of the Group of Leading Research Hospitals by the South Korean government.Choi Han-Yung,President of SMC,said the goal is to send a new message of hope for patients with liver cancer across the world-especially in Asia.Dr.Gibson explained that the partnership will combine Pfizer's competence in drug development with SMC's extensive genome information and technology in the liver cancer area.
Liver cancer is uncommon in the U.S.,but the rates of diagnosis are increasing.Chronic infection with hepatitis viruses is one known cause of the disease.As well,diabetes patients are at greater risk of developing liver cancer.
Pfizer(PFE)

Early Edition:Geithner Sees Better Times

Treasury Secretary Timothy Geithner took a message of optimism to the weekend's G-20 meeting of finance ministers and central bankers in Busan,South Korea.Mr.Geithner says the Europeans have the ability and the political will to solve the debt problem.We're in a much stronger position today to get through this.He thinks we have in place a moderate but pretty strong recovery to deal with this.
These new rules on capital and liquidity are gonna be the most important elements of reform around the world,Mr.Geithner believes.We want these financial firms to run much more conservatively,yet support businesses.We want to bring the world to higher standards and a level playing field.U.S. firms have much stronger capital positions today.The economy has been growing now for four quarters.All the indicators suggest improving job growth.The broad numbers show steady strong improvement and confidence that will translate to better times for the average American,in Timothy Geithner's opinion.
Mr.Geithner called for other countries to re-balance growth in order to create sustainable growth.The U.S. is moving aggressively to fix things we got wrong and to strengthen our economic fundamentals.Americans are strengthening their savings,so other countries must generate more internal consumption to take up the slack.
Mr.Geithner was warmly greeted by Jean-Claude Trichet,President of the European Central Bank,at the international conclave in Busan,South Korea.

Federal Reserve United

By a rare unanimous vote,the Federal Reserve has cut its key interest rate by o.5, to 1.0%.It can cut the rate all the way to zero if it chooses to.In its statement,the central bank noted that industrial output has weakened,but inflation is expected to moderate to levels of price stability.While recent actions have helped,downside risks to growth remain.Slow foreign economies will hurt U.S. export prospects.Recently,the Fed has expanded its balance sheet-unlike in the Great Depression,when the Fed contracted it.Today,the Fed has over 700 billion dollars in its account.And it has extended swap lines to 14 countries.A swap line provides U.S. dollars in exchange for foreign currencies,in order to increase confidence.Swap lines of 30 billion dollars each have been granted to Brazil,Mexico,South Korea and Singapore.

Shop Talk

A special greeting to South Korea.Dear allies,it's good to have you here today.We will always be especially close,bound together by the Korean War history.That was 1950-1953,for the younger readers.This weekend the attention will be on Capitol Hill,where America's leaders are stuggling to contain the financial crisis.Democracy is contentious in the best of times,and this certainly isn't one of those.Congress hopes to have legislation for the crisis ready by 6PM Eastern on Sunday,when the Asian markets begin to trade.Tonight,though,most Americans will watch the presidential debate,which will cover the financial crisis,but probably other issues as well.There will be plenty to fill all the reporters' notebooks this weekend.

Where This Leaves Us

Shane Oliver of ANP Capital Investors in Sydney,Australia thinks we are 85% through the bear market.We are probably near the bottom of share prices.Stocks are very cheap now.Mr.Oliver likes the telecom and consumer staples sectors.Peter Redward of Barclays Capital(BCS) says the Federal Reserve is doing all it can to make sure that Lehman Brothers unwinds its positions systematically.Ultimately,the market has to work as well.Earnings multiples have to come down because of widening credit spreads.At this point,financial markets are leading the economy.Before,it was the other way around.In consequence,the economic dynamics we've had are unlikely to continue.Countries such as South Korea and India are vulnerable because of their current accounts deficits,Mr.Redward feels.Today the Federal Reserve releases its interest rate decision.This could be a market-mover.In any event,shares of McDonalds(MCD) and Johnson and Johnson(JNJ) were up this morning.