Yuan Strengthens on Record Reference Rate, Bernanke's Comments

[cir]

By Fion Li - Apr 26, 2012 10:12 AM GMT+0800

The yuan strengthened for a third day after China's central bank set a record reference rate for the currency and Federal Reserve Chairman Ben S. Bernanke said he's prepared to do more to stimulate U.S. economic growth.

The People's Bank of China raised the fixing 0.15 percent to 6.2829 per dollar, the strongest level since a peg ended in July 2005. The Fed reiterated a pledge yesterday to keep U.S. borrowing costs "exceptionally low" through 2014 and upgraded its economic growth forecast for China's biggest export market. The fourth round of the U.S.-China strategic and economic dialogue will start in Beijing in a week's time and be attended by U.S. Treasury Secretary Timothy F. Geithner, Secretary of State Hillary Clinton and Chinese Vice Premier Wang Qishan.

"A better U.S. outlook will boost prospects for Chinese exports and hence support the yuan," said Banny Lam, a Hong Kong-based economist at CCB International Securities Ltd., a unit of China's second-largest bank. "China typically strengthens the reference rate before high-level meetings with the U.S. to promote a positive atmosphere for talks."

The yuan rose 0.07 percent to 6.2994 per dollar as of 10:02 a.m. in Shanghai, contributing to a three-day advance of 0.15 percent, according to the China Foreign Exchange Trade System. The currency is allowed to trade up to 1 percent on either side of the central bank's daily fixing.

In Hong Kong's offshore market, the yuan gained 0.05 percent to 6.3025. Twelve-month non-deliverable forwards strengthened 0.04 percent to 6.3478, a 0.8 percent discount to the onshore spot rate, according to data compiled by Bloomberg.

One-month implied volatility for the currency, a measure of exchange-rate swings used to price options, was little changed at 2.10 percent.

China's economy may grow about 8.7 percent this year, the official Xinhua News Agency reported yesterday, citing a report by the Chinese Academy of Social Sciences. The trade surplus may be $126 billion, Xinhua said.

 

[cir]

How is our neighbour "Shining India" doing？

Indian rupee extends falls, hits 3-1/2 month low

By Aditya Phatak

MUMBAI, April 24 (Reuters) - The Indian rupee hit a three-and-half month low on Tuesday, continuing to build losses as the lack of any clear signs of intervention from the central bank encouraged investors to build up dollar positions.

Importer demand for dollars also contributed to the gains in USD/INR, according to some traders, as was market talk about a potential relaxation in regulations concerning the forward bookings of dollars.

The rupee closed at 52.68 to the dollar after dipping to 52.8650, a level last seen on Jan. 9. It had settled at 52.52 on Thursday.

"At this stage 53.20 looks toppish (on the USD/INR) for the week. The importer dollar demand (from oil firms) seen in the past few days can be characterised as panic buying on worries rupee could fall more," said Kamlakar Rao, head of foreign exchange trading at state-owned Allahabad Bank.

Since hitting a 2012 low at 48.60 in early February, USD/INR has surged reflecting the dropping confidence in the local currency.

India's wide current account deficit, stalled financial reforms, and doubts about monetary easing have all been factors behind the drop in the rupee.

Traders see a near-term respite, with USD/INR facing strong resistance at 52.94-53.00, or the 76.4 percent retracement of its December-February fall.

However, failure by the RBI to defend the rupee could see USD/INR quickly approach the record high of 54.30 hit in mid-December, according to traders.

"They may have to sell a few billion dollars from the precious reserves to push the rupee back to near 49-50 levels, but it will be worthwhile because if they don't give a signal, demand could definitely put it back below 54," a senior currency trader said.

The one-month offshore non-deliverable forward contracts were at 53.08/18.

In the currency futures market, the most-traded near-month dollar-rupee contracts on the National Stock Exchange, the MCX-SX and the United Stock Exchange all ended around 52.8 on a total volume of $5.1 billion. (Editing by Rafael Nam)

Indian rupee extends falls, hits 3-1/2 month low; | Reuters

 

[cir]

Moody's confirms China Aa3 rating, outlook positive

BEIJING | Thu Apr 26, 2012 12:22am EDT

BEIJING (Reuters) - China's sovereign rating outlook remains positive, supported by favorable medium-term growth prospects and strong government debt dynamics, Moody's Investors Service said in a report on Thursday.

Moody's confirms China Aa3 rating, outlook positive | Reuters

 

[cir]

S&P cuts India's outlook from stable to negative

Last updated on: April 25, 2012 14:55 IST

Global agency Standard and Poor's on Wednesday lowered India's rating outlook to negative and warned of a downgrade in two years if there is no improvement in the fiscal situation and the political climate continues to worsen.

The lowering of outlook from stable (BBB+) to negative (BBB-)（this is junk on par with Greece） is expected to make external commercial borrowings expensive for Indian Inc.

It may also have implications for the capital market.

"The outlook revision reflects our view of at least a one-in-three likelihood of a downgrade if the external position continues to deteriorate, growth prospects diminish or progress on fiscal reforms remains slow in a weakened political setting" said S & P's credit analyst Takahira Ogawa in a statement.

Terming S&Poor's decision to lower India's credit rating outlook to negative as a 'timely warning', Finance Minister Pranab Mukherjee, however, said there is no need to panic as the government is committed to economic reforms.

"I am concerned but I don't feel panicky because I am confident that our economy will grow at 7 per cent, around 7 per cent if not plus.

"We will be able to control fiscal deficit and it will be around 5.1 per cent", he told reporters.

The ever-so-optimistic FM spoke again！！！

 

[Drsomnath999]

lllollzz another gullible CCP propanganda beleiver ,living in a dream land

u better see this

China's tax revenue growth hits three-year low
BEIJING: Growth of China's tax revenues logged the slowest pace in three years in the first quarter of 2012 as a result of the country's cooling economy, official data showed on Tuesday.

Tax revenues rose 10.3 percent year-on-year to 2.5858 trillion yuan (410.4 billion U.S. dollars) in the first quarter, the Ministry of Finance said in a statement posted on its website.

The growth rate marked the slowest pace in three years, pulling back 22.1 percentage points from the same period last year, the ministry said.

Revenues from major tax items saw slower year-on-year gains. Receipts from value-added tax, consumption tax and turnover tax rose 5.4 percent, 15.1 percent and 7.6 percent, respectively, down 17.8 percentage points, 6.4 percentage points and 18.7 percentage points from a year earlier, the statement said.

Revenues from corporate income tax increased 20.5 percent during the January-March period, while those from personal income tax dropped 6.2 percent year-on-year, slumping 43.2 percentage points on the same period last year.

The easing pace came as China's industrial value-added output and profits, key measures of industrial performances, both saw slower growth in the first two months as the country's economy cooled.

China's economy expanded 8.1 percent year-on-year in the first quarter, marking the fifth consecutive quarter of slowing growth, according to the National Bureau of Statistics.

During the January-February period, the country's industrial value-added output shed 2.7 percentage points to grow 11.4 percent while industrial profits decreased 5.2 percent year-on-year, down 39.5 percentage points on last year.

Meanwhile, property-related tax income retreated significantly in the first three months. Revenues from deed tax and sales tax declined 13.6 percent and 17.5 percent, respectively, shedding 41.1 percentage points and 45.8 percentage points from the same period of last year.

The shrinking tax in the sector is largely the outcome of sagging sales due to the government's persistent control efforts. In the first two months, sales value of commercial housing dropped 20.9 percent year-on-year, according to the statement.

The ministry also attributed the slower growth to the country's cooling inflation and tax-reduction policies.

Growth of the country's Producer Price Index, a major gauge of inflation at wholesale level, pulled back 6.5 percentage points in the first two months, while that of the consumer price index, a main measure of inflation, retreated 1 percentage points, eroding tax revenue that was computed with the current prices.

Also, the government's moves to reduce tax burdens and deepen structural reform, including by raising the threshold of income tax, tariff reductions on certain imported products and favorable tax policies for small and micro-sized enterprises, have combined to drag down the tax revenues, the ministry said.
China's tax revenue growth hits three-year low - The Times of India

 

[Drsomnath999]

Thats not all another funny debacle


Most Chinese Stocks Drop on Slowing Economy, Europe Debt

Most Chinese stocks fell as a leading index for the nation's economy rose at a slower pace in March and political uncertainty in Europe hurt the outlook for Chinese exports to its biggest trading partner.

Jiangxi Copper Co. led a gauge of material producers to the second-biggest drop among industry groups as a political backlash in Europe against budget cuts gained momentum. Risen Energy Co., a maker of solar panels, plunged to a record low after officials tightened standards on the ChiNext gauge of start-up companies. Bank of Beijing Co. and Huaxia Bank Co. gained more than 2 percent after the China Banking Regulatory Commission said the nation's lenders posted their fastest profit growth in at least four years.

"The economy is on a slowing trend," said Dai Ming, a fund manager at Shanghai Kingsun Investment Management & Consulting Co. "The political uncertainty in Europe will make the sovereign debt crisis a protracted issue. That'll pressure the market."

The Shanghai Composite Index added 0.2 point, or less than 0.1 percent, to 2,388.83 at the close, even as 592 stocks dropped and 317 gained. It erased a loss of as much as 1.6 percent. The CSI 300 Index (SHSZ300) was little changed at 2,604.87. The Bloomberg China-US 55 Index, the measure of the most-traded U.S.-listed Chinese companies, retreated 2.3 percent in New York yesterday.

Leading Economic Index
The Shanghai index has climbed 8.6 percent this year amid speculation the government will take measures to boost the economy. Stocks in the Shanghai gauge are valued at 10.2 times estimated earnings, compared with a record low of 8.9 times on Jan. 6, according to weekly data compiled by Bloomberg.

The leading index for China gained 0.8 percent from the previous month to 230.6, the New York-based Conference Board said in a statement today in Beijing, citing a preliminary reading. That compares with a 1 percent rise in February that was revised up from a previously reported 0.8 percent increase.

Today's data may add pressure on policy makers to take more measures to support expansion after the economy grew the least in almost three years. China's purchasing managers' index shrank to a preliminary reading of 49.1 in April, compared with a final 48.3 in March, HSBC Holdings Plc and Markit Economics said yesterday. A number below 50 points to a contraction.

The Leading Economic Index, first published in May 2010, captures turning points in China's economic cycles if plotted back to 1986, according to the Conference Board.

European Concerns
A measure of material stocks in the CSI 300 fell 0.9 percent today, the second most among the 10 industry groups.

Jiangxi Copper, China's biggest producer of the metal, dropped 0.4 percent to 25.15 yuan. Tongling Nonferrous Metals Group Co., the second largest, slid 1.7 percent to 20.34 yuan.

The MSCI Asia Pacific Index (MXAP) dropped 0.2 percent today as Dutch Prime Minister Mark Rutte offered to quit after lawmakers split over austerity and French President Nicolas Sarkozy lost the first round of his re-election bid.

A euro-area composite index based on a survey of purchasing managers in the services and manufacturing industries fell to 47.4, a five-month low, from 49.1 in March, London-based Markit Economics said in an initial estimate yesterday.

Europe is China's biggest export market, making up about 18 percent of the nation's overseas shipments, according to Shenyin & Wanguo Securities Co.

Smallcaps Fall
Yanzhou Coal Mining Co. lost 2.6 percent to 23.09 yuan. Net income declined 11 percent from a year earlier to 2.2 billion yuan ($349 million), the Shandong-based company said yesterday.

A gauge of ChiNext start-up companies fell 1.3 percent in Shenzhen today after plunging 5.3 percent yesterday.

Risen Energy tumbled 6.8 percent to 9.71 yuan, the lowest close since its listing in September 2010. Beijing Easpring Material Technology Co. (300073), a manufacturer of battery chemical, slid by the maximum 10 percent to 8.72 yuan. JiangSu Jin Tong Ling Fans Co. also plunged 10 percent to 8.19 yuan.

Companies listed on the ChiNext board will be delisted if they are censured by the exchange three times over a three-year period, the Shenzhen exchange said in an April 20 statement. The bourse said it won't support ChiNext companies seeking to regain listing status by means of reverse takeovers, it said. The rules will take effect on May 1.

China's preliminary PMI data yesterday has added to investor speculation that Chinese monetary authorities will take steps to stimulate the economy, Michael Gayed, chief investment strategist in New York at Pension Partners LLC, which advises on over $150 million in assets, said by phone yesterday.

Rate Outlook
"The market is feeling that China is going to have to start to initiate interest rate cuts and stimulate further," Gayed said.

The People's Bank of China has cut the amount of cash lenders must set aside as reserves twice since November to boost lending. Policy makers have kept interest rates on hold since July, while central banks in India and Brazil cut benchmark rates last week.

Financial institutions in China including policy banks, commercial lenders, rural credit cooperatives and foreign banks, earned a combined net income of 1.25 trillion yuan ($198 billion) last year, a gain of 39 percent from a year earlier, the CBRC said in its annual report today.

Bank of Beijing rose 3.7 percent to 10.37 yuan. Huaxia Bank advanced 2.3 percent to 11.33 yuan.

--Zhang Shidong. Editors: Allen Wan, Darren Boey
Most Chinese Stocks Drop on Slowing Economy, Europe Debt - Businessweek

 

[cir]

China's tax revenues are still rising(by more than 10%), whilst India's are dropping like a stone.

Yet our Indian friends still mange to find something "negative" to shout about.

And I bet that our Indian friends are ignorant of the fact that China raised the monthly taxable income cut-off point by 75% from 2000 yuan to 3500 yuan, on 1.9.2011. This means that people earning less than $560 per month are exempt from paying income taxes.

What's it like in India? Perhaps Indians don't pay tax at all?

Some people are simply pathetic. Really.

 

[cir]

Those who think that the stock market rises when the economy is in good shape, must be the dumbest investor ever.

Buy stocks only when the economy is in the doldrums! :thumb:

 

[huaxia rox]

the problems here r twofold from where i m standing...

1 i dont fancy too many comparisons between the two countries india and prc although u cant say theres anything wrong if comparisons r made no matter which field is being compared but at the end of the day what matters to chinese is what our economy looks like...which direction our economy is heading in...what we r achiving and lacking...all thees things have absolutly nothing to do with india.....

2 on the other hand many indian members here largely focus on some problems prc r coming across ignoring a very obvious fact that prcs economy has been doing real good in face of the EU debt crisis compared to many other economies......when the growth rate of our GDP PMI etc r falling indian side is not doing any better than ours leave alone some developed nations....just dont know how many indian elites online in this forum actually would like to agree with my conclusions.....

 

[Predator]

first chinese guy copy pastes articles and sings china greater than india song

indian guy shows first chinese guy to be wrong, posts articles

first chinese guy loses patience, uses taunts to provoke members, nobody bites the bait

second chinese guy comes, acts wise and tries to restart comparison, again nobody interested

thread dies...

 

[huaxia rox]

1 u can copy paste articles to point out which parts the 1st chinese guy has posted r wrong if u really dont wanna accept the truth those articles have mentioned.....

2 if some chinese members here really want the thread to not die it really wont my indian friend......

 

[Predator]

1 u can copy paste articles to point out which parts the 1st chinese guy has posted r wrong if u really dont wanna accept the truth those articles have mentioned.....

forums are meant to voice personal opinions not meant to be copy paste marathons

2 if some chinese members here really want the thread to not die it really wont my indian friend......

i can see that, thousands of copy paste posts but no personal voice. the same provoke, taunt and repeat formula to cause endless bickerings, this is not what people expect when they join a online community.

 

[huaxia rox]

so u indians dont do copy paste articles??? comments r based on online articles....seldome can i see orignal articles started in this site no matter its from indian or chinese.....i really dont see it a problem.....

 

[Predator]

^ more accusations. tell me one thing, why do you go online?
1) to meet and interact with people? or
2) to provoke and take part in endless circular debates which have no meaning?

 

[huaxia rox]

ur rhetorical question is very funny in deed........so who to judge whats meaningful or has no meaning....u???

 

[Predator]

take a look at this thread itself, only stale articles which is opinion of someone else and fighting with them to indulge in silly comparisons

where is the exchange of new ideas or discussion?

you can judge for yourself how this is degrading into waste of time topic

 

[panduranghari]

Those who think that the stock market rises when the economy is in good shape, must be the dumbest investor ever.

Buy stocks only when the economy is in the doldrums! :thumb:

Keep your Keynesian 101 advice to yourself.

Seen this one before;

As USA debases its currency, China plays catch up with its debasement- see the fools at CCP like to keep a monetary peg.

We haven't even seen the most pernicious effect of debasement.

Debasement violates the whole point of money: storage of value. As such, it gives savers an incentive to find other assets to store their savings in.

In other words, debasement drives real investment. In a debasing monetary system, savers recognize that holding money is a loser. They look for other assets to buy.

The consensus among Americans today is that monetary savings instruments like passbook accounts, money market funds, or CDs are lame. The real returns are in stocks and housing. [Written in 2006]

When we debasement-adjust for M3, we see the reasons for this. Real non-monetary assets like stocks and housing are the only investments that have a chance of preserving wealth. Purely monetary savings are just losing value.

The financial and real estate industries, of course, love this. But that doesn't mean it's good for the rest of us.

The problem is that stocks and housing are more like condoms than they are like gold. When official currency is not a good store of store value, savings look for another outlet. Stocks and housing become slightly monetized. But the free market, though it cannot create new official currency or new gold, can create new stocks and new housing.

 

[Drsomnath999]

MORE DISASTER

Profit Growth at Bank of China Slows
SHANGHAI—Bank of China Ltd. offered the first indication that China's slowing economy could end a streak of outsize profit growth among the nation's biggest state-run banks, as its earnings growth slowed sharply.

The lender reported a 9.9% year-to-year rise in first-quarter net profit, compared with the 28% rise it reported in the year-earlier quarter and the 19% climb for all of 2011. The results showed the bank took a hit from slower domestic economic growth. China's economy grew at an 8.1% rate in the first quarter, which is generally considered healthy by economists but represents a slowdown from last year's .
Profit Growth at Bank of China Slows - WSJ.com

 

[ice berg]

True, only 8,1 % growth rate. Surely a disaster. Hmm, I think that is actually a compliment consider some others are barely touching 6 %.

 

[Drsomnath999]

^^^^ well our nationalistic chinese friends are taking the sliding chinese double digit GDP to a single digit & a mere 1 point lead in GDP to it's great democratic neighbour 's GDP as a compliment.

& of course our nationalistic chinese friends forgot that their great democratic neighbour has always suceeded to maintain it's GDP more than 6%