Tue, 28th March 2017

Anirudh Sethi Report


Archives of “asia” Tag

Overnight US Market :Dow closed -63 points (Intraday was down 180 pts )

Stocks dipped Thursday but finished off early, sharp lows, giving back  gains from the day before.

The Nasdaq composite, off 0.3%, snapped a seven-day winning streak and posted its first loss of 2017.

Losing as much as 180 points earlier, the Dow settled for a 63-point loss, 0.3% lower, to 19,891 even. The S&P 500 slipped 0.2%.

Financial, industrial and technology stocks were down the most, while phone company and real estate stocks edged higher. Investors were turning their focus to the next wave of corporate earnings reports in the weeks ahead.

Banks and other financial companies were down as the yield on the 10-year Treasury note fell. Lower yields mean lower interest rates on loans and lower profits for banks. The yield on the 10-year Treasury slipped to 2.35% from 2.37% late Wednesday.

Benchmark crude oil finished up 76 cents, or 1.5%, to $53.01 a barrel in New York.

In Europe, Germany’s DAX ended down 1.1%, while France’s CAC 40 lost 0.5% despite new data showing eurozone industrial production jumped 1.5% in November. Britain’s FTSE 100 ended flat. In Asia, Japan’s benchmark Nikkei 225 dropped 1.2%. Hong Kong’s Hang Seng dipped 0.5%, while Australia’s S&P/ASX 200 slipped 0.1%. South Korea’s Kospi bucked the trend to rise 0.6%.

Former UN Secretary-General’s Brother/Nephew Indicted In U.S. On Bribery Charges

Less than two weeks after stepping down as U.N. Secretary-General, a move many interpreted as an indication of his intention to run for the Presidency of South Korea, two of Ban Ki-Moon’s relatives have been indicted in the U.S. on charges of bribery.  According to the Daily Mail, Ban Ki-Moon’s brother, Ban Ki-sang, and nephew, Joo Hyun “Dennis” Bahn who is a New York real estate broker, have been indicted for an alleged scheme to bribe a Middle Eastern official to use his country’s sovereign wealth fund to purchase a struggling $800 million real estate complex in Vietnam.  Joo Hyun Bahn has been arrested in New York City and is expected to appear in court later today according to the office of U.S. Attorney Preet Bharara.

 Two relatives of former U.N. Secretary-General Ban Ki-Moon have been indicted on U.S. charges that they engaged in a scheme to bribe a Middle Eastern official in connection with the attempted $800 million sale of a building complex in Vietnam.

Joo Hyun “Dennis” Bahn, a New York real estate broker who is Ban Ki-Moon’s nephew, and his father Ban Ki-sang, Ban Ki-moon’s brother who was a senior executive at South Korean construction firm Keangnam Enterprises Co Ltd, were charged in an indictment unsealed on Tuesday in Manhattan federal court.

Bahn is in custody and expected to appear in court later on Tuesday, a spokeswoman for Manhattan U.S. Attorney Preet Bharara said. Defense lawyers could not immediately be identified.


Iran Reaches 4Mln Barrel per Day Oil Output – National Oil Company

A gas flare on an oil production platform in the Soroush oil fields is seen alongside an Iranian flag in the Persian Gulf, in this July 25, 2005 file photoAddressing the Petroleum Ministry officials, Kardor said that Iran was able to maintain its 14 percent quota in the Organization of the Petroleum Exporting Countries (OPEC), according to the IRNA news agency.

The official also announced further increase of oil production. “Our oil production capacity should reach 5.2 or 5.7 million bpd,” Kardor said. Iran has been re-entering the global oil market after in January the European Union, the United Nations, and partially the United States lifted their sanctions against the Islamic Republic after the International Atomic Energy Agency (IAEA) verified Tehran’s compliance with a nuclear agreement reached in July 2015.

G20 effort to eliminate world steel glut – government subsidies obstacle

On this relatively  subdued Asian session, a bit of background

This is on efforts to curtail the world’s steel glut, coming via Bloomberg:
  • Excess supply in China is spilling over onto world markets
  • Sparking protectionist measures
  • One hurdle to overcome could be the unwillingness of emerging nations to abandon efforts to nurture their sectors through government support

BREAKING-Iran targets pre-sanction oil output before considering freeze

Iran will decide whether to join a production freeze once it has reached its pre-sanction level of output, according to a senior executive from its state-owned oil company.

“We are still below the production but we are close,” said Moshen Ghamsari, director of international affairs for National Iranian Oil Company, adding:

Before sanctions we were over 4m barrels [per day] – 4.1m and 4.2m b/d. Now we are 3.8m b/d. If we have West Karoun available on time then it seems we are going to match previous production. This of course in new production we did not have before.

He was speaking on the sidelines of the Asia Pacific Petroleum Conference in Singapore

West Karoun is a cluster of fields in the southwest of the country that is key to boosting the country’s production capacity and freeing up more crude for exports.

Vietnam, Myanmar and Laos emerge as FDI magnets

Foreign direct investment into Southeast Asia’s less developed countries surged in the runup to the creation of the ASEAN Economic Community at the end of last year, a new report shows. Cambodia, Laos, Myanmar and Vietnam reaped a 38% increase, as multinationals clearly saw opportunities in the envisioned single AEC market.

The overall picture was less rosy, however. According to the ASEAN Investment Report 2016, overall FDI flows to the Association of Southeast Asian Nations bloc declined by 8% in 2015, to $120 billion. Investment from the EU fell 20% to $20 billion, while the figure from the U.S. dropped 17% to $12.2 billion.

 The report was announced on Tuesday by the ASEAN Secretariat and the United Nations Conference on Trade and Development at the ASEAN Business and Investment Summit (ABIS) 2016.

On the brighter side, FDI from Japan increased 11% to $17.4 billion. China’s number rose 17% to $8.2 billion, and India’s swelled 107% to $1.3 billion.

The strongest growth was seen in the so-called CLMV countries, with the 38% jump bringing their figure to $17.4 billion, from $12.6 billion in 2014. Their share of FDI in the region increased to 14%, from 10%.

German government official says G20 yet to decide on whether to discuss currencies

Reuters with the headline 30 Aug 2016

Among the sherpas we are still discussing whether to tackle the issue of currencies and if so how”

Maybe the 4-5 Sept meeting won’t be the usual dud after all but I’m not holding my breath. Plenty of conjecture anyhow that behind the scene deals have been struck anyhow this year hence the Japanese lack of intervention but full-on with the rhetoric.

  • still need to discuss how the issue of Brexit will go in the G20 summit document

Britain shocked the world by voting on 23 June to leave the EU, and the nature of its future relationship with the bloc is far from clear.”

Seoul fears Beijing backlash on economy after missile deal

South Korea may be subject to economic retaliation from China after Seoul ignored Beijing’s repeated objections and agreed with the U.S. to install a missile defense system on the Korean Peninsula.

On July 8, the Korean government said it would work with Washington to deploy the Terminal High Altitude Area Defense system (THAAD) at an American military base in South Korea, to counter an attack from the North.

 Chinese Foreign Minister Wang Yi met Sunday with counterpart Yun Byung-se for the first time since the news, while visiting Laos. Wang complained that South Korea’s recent decisions had hurt the foundation of mutual trust between the two countries. China time and again had opposed the THAAD deployment, saying the radar could cover Beijing and hurt its security interests, but South Korea had proceeded regardless.

At the Asia-Europe Meeting held in Mongolia July 15-16, President Park Geun-hye and Chinese Premier Li Keqiang apparently had no meaningful exchanges — perhaps as they tried to avoid discussion of touchy issues such as the South China Sea dispute and THAAD. In one fell swoop, bilateral relations have clearly grown more complicated than in the past few years.

Many had been concerned for some time about the potential fallout. On July 8, stocks of cosmetics maker Amorepacific and LG Household & Health Careplunged, on worries that sales may languish in the key Chinese market.

India’s external debt of $474 bn forms 16% of APAC borrowing: Moody’s

Emerging markets are increasingly becoming vulnerable to global shocks after a decade-long build-up of debt, with the Asia Pacific region, including India, seeing the largest growth in external borrowings, says a report by Moody’s.

Among the larger nations, India added up the second largest pile of external debt between 2010 and 2015, says the report. “The country had USD 474 billion in external debt as of 2015, representing 16 per cent of the Asia Pacific region’s total debt,” it said.

But the report added that the country’s external debt has grown two to three times slower than China’s, at a five-year annual average rate of 8.4 per cent.

Additionally, the country’s external debt to GDP ratio has risen from 17 per cent in 2005 to 23 per cent in 2015, Moody’s said, adding that it is still one of the lowest globally.

Debt pile up is the highest in the Asia Pacific region, with the largest increase in external borrowings seen in China, India, Indonesia, Taiwan and Malaysia.

“Driven by growth in private debt in China, India and Indonesia, debt levels in the Asia Pacific region have grown at an average rate of 13.5 per cent a year,” says Moody’s.

India dabble into South China Sea dispute

Even though India is not a party to territorial disputes in the South China Sea, it has vital commercial and strategic stakes that keep its interest alive in the troubled waters.

Soon after an international tribunal in The Hague ruled that China’s claims to historical rights in the South China Sea have no legal basis, India said the countries involved in the row should resolve their disputes through peaceful means “without threat or use of force” and show “utmost respect” to the United Nations Convention on the Law of the Sea, which establishes the global legal order of the seas and oceans. 

“India supports freedom of navigation and overflight, and unimpeded commerce, based on the principles of international law, as reflected notably in UNCLOS,” its foreign ministry said in a statement.

India and the South China Sea

In reality, this issue is not someone else’s problem for India. ONGC Videsh — the overseas arm of India’s state-run Oil & Natural Gas Corp., known as OVL — has been searching for hydrocarbons in the South China Sea off the coast of Vietnam, which it entered in the late 1980s after securing the exploration license for block 06.1. About a decade ago, Vietnam permitted India to explore two more blocks — 127 and 128 — which lie in waters also claimed by China.