theSun | TUESDAY DECEMBER 16 2008
business news
US auto bailout
hopes boost stocks
HONGKONG: Asian stocks
climbed nearly 4% yesterday
on renewed hopes the US
automaker industry would
be rescued, strengthening
willingness to take risks and
knocking the US dollar to a
two-month low against the
euro.
Investors have been
funnelling capital back
to emerging Asia for the
last few weeks and word
the White House was
considering using some
of US$700 billion (RM2.52
trillion) meant to rescue
financial institutions for the
struggling car manufacturers
extended the trend.
European stock index
futures were also pointing to
opening gains of at least 2%.
However, worsening US
economic data, a rapidly
growing fiscal deficit and
the likelihood the Federal
Reserve will cut interest
rates again this week all
combined to weaken the
dollar.
“The tide seems to
have turned around in
recent sessions, with bad
US economic news now
rightfully hurting the US
dollar rather than helping it
stronger,” said Nizam Idris,
currency strategist with UBS
in Singapore.
“Further commentary
regarding any alternative
solutions to the auto sector
will be closely followed
during the day, and hence be
key to risk sentiment,” Idris
said in a note.
Oil bounced back US$1 to
trade above US$47 a barrel
25
on signs that Opec members and China Mobile. China
might make a deep supply Construction Bank and Bank
cut to boost prices when they of China (Hongkong) Ltd
meet later this week. were the only stocks that fell.
The MSCI index of “I am surprised that
Asia-Pacific stocks outside the equity market is still
Japan rose 3.7% on the day holding up so well in Asia.
and is up about 7% so far Mutual funds are probably
in December, trying to pull putting their year-end cash
off its first monthly increase balance to work,” said Sean
since April. Darby, chief Asia Strategist
Japan and South Korea at Nomura in Hongkong, on
led the region in stock the overall positive market
performance. The Nikkei movement.
share average rallied 5.2%, In the bond market,
with Honda Motor Corp the Asia excluding Japan
stock rose 8.5%, one of the benchmark iTRAXX
biggest lifts to the Nikkei. investment-grade index
South Korea’s benchmark tightened by 20 basis points,
after widening
sharply on Friday’s
The tide seems to news of Senate’s
have turned around in rejection of auto
recent sessions, with bad US bailout.
economic news now rightfully Asian
hurting the US dollar rather benchmark dollar
bonds have not
than helping it stronger.” kept pace with
– Nizam Idris the rally in equity
currency strategist with UBS, Singapore markets, trading
near historically
KOSPI share average was up wide spreads, though the
4.9%. cost of insurance against
The risk of further corporate and sovereign
declines based on earnings debt default slipped as
downgrades has been the environment for risk
clearly outweighed by the gradually improved.
cheapness of stocks at the The White House
moment. Toyota Motor Co indicated last week it is
stock is up 9.1% even after open to using part of the
Japanese media reported bank bailout package for the
the world’s top automaker Big Three car companies
is likely to further cut its – Chrysler LLC, Ford Motor
earnings forecasts and report Co and General Motors
an operating loss of US$1.1 Corp.
billion in the October-March A bill that would have
period. provided US$14 billion in
Hongkong’s Hang Seng loans for the firms failed in
index rose 3.1%, led by HSBC the Senate on Friday. – AFP
Singapore’s
retail sales
down 6.8%
last month
SINGAPORE: The global
economic difficulties continue
to affect Singapore’s businesses
with retail sales for October 2008
down by 6.8% over the previous
month.
But excluding motor vehicles,
sales declined by 1%, according
to the monthly sales index of the
Singapore Statistics Department.
After seasonal adjustment, retail
sales declined by 2.1% over the
previous month, the department
said yesterday.
On a yearly basis, retail sales
declined by 3.6% over a year ago,
but excluding motor vehicles, the
sales rose by 3.1%.
Sales of motor vehicles fell
by 20% in October compared to
September.
Retailers of telecommunications
apparatus and computers reported
lower turnover of 17.5% after
registering brisk business in the
previous two months.
Sales of food and beverages,
furniture and household
equipment, medical goods and
toiletries, and wearing apparel and
footwear also declined by 3.4% to
6%. – Bernama