Japan central bank moves to boost economy

r-JAPAN-STOCK-MARKET-large570According to Al Jazeera News, Japan’s central bank has taken its boldest action yet to lift the country’s struggling economy.

The Bank of Japan on Tuesday doubled its inflation target and took on an open-ended commitment to buy assets.

Prime Minister Shinzo Abe’s government has been pushing for a plan to kick-start Japan‘s economy, which is the third largest in the world.

He is hoping to spur growth in his second term in office, through heavy government spending on public works and other projects.

Jeff Kingston, the director of Asian Studies at Temple University in Tokyo, told Al Jazeera that this time around, Abe was focusing on the economy.

“Everyone is worried about his ideological objectives, but it looks like he is putting that aside and focusing on the economy,” Kingston said.

The Bank of Japan adopted the two percent inflation target demanded by the country’s new government.

“The bank sets the ‘price stability target’ at two percent in terms of the year-on-year rate of change in the consumer price index,” the bank said in a statement.

“The Bank will pursue aggressive monetary easing … through a virtually zero interest rate policy and purchases of financial assets,” it added.

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Indonesia: IPOs ride economic growth

20120207171513093A flurry of initial public offerings (IPOs) planned for December and early 2013 highlight how firms in Indonesia are trying to harness bullish domestic and global confidence to fund plans for expansion.

Currently leading the pack is Indonesia AirAsia, whose planned IPO hopes to raise some Rp1.7trn ($175.78m) in early 2013. The aviation firm is closely followed by state-owned plantation firm Perkebunan Nusantara’s Rp1.5trn ($155.1m) listing, also scheduled for 2013, and state-run construction company Waskita Karya’s Rp1.2trn ($124.08m) December IPO.

The Indonesia Stock Exchange (IDX) saw two IPOs in December, bringing the total number of listings for 2012 to 23. This is down on the 24 IPOs seen in 2011, but continues to underline international sentiment over the vast archipelago’s private equity prospects.

A survey conducted by private equity firm Coller Capital saw nascent Asian economies, such as Indonesia and Vietnam, favoured by one-fifth of investors over the more mature markets found in other Asian countries, including China and India.

Northstar Pacific Partners, a local partner of global investor TPG Capital, for example, raised $800m in 2011 to invest in Indonesian companies. Other large firms, such as Starwood Capital Group, are circling in search of deals, according to reports from the Wall Street Journal.

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China’s Economy: Enter or Exit the Dragon?

china-dragon-cloud-computingAccording to Callum Newman Of Money Morning,

On one side of the office, the bear.

On the other side, the bull.

Two analysts, same publishing company, two very different views on China’s economy. Their desks are probably no more than five metres apart.

Oh boy, this is going to be interesting.

One says the dragon is about to roar again and take commodities – and selected mining stocks – up with it. And that now’s your chance to buy in on a resources comeback after the market shakedown in 2012.

The other says the Chinese slowdown in 2012 will continue and the recent stock rally and the rebound in the iron ore price are false flags to suck in gullible investors, so watch out.

In today’s Money Weekend, we’ll explore the two sides of the great China debate happening right here in our St Kilda headquarters. Grab a cup of tea, lean forward, engage your brain, and see which of our top analysts you agree with…

The China Bull and the China Bear 

In the blue corner, you have Diggers & Drillers editor Dr. Alex Cowie. His message for investors?‘China bears are about to get smoked.’

In the red corner, Sound Money.Sound Investmentshttp://www.soundmoneysoundinvestments.com.au/ editor Greg Canavan says the current rebound firing up the Chinese economy in the past few months is from an unsustainable burst of credit…and that contraction is assured.

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Indian economy has done well with lower taxes: Praful Patel

According to The Economic Times,

praful_patelIn an interview with ET Now (Supriya Shrinate), Praful Patel, Heavy Industries Minister, shares his views on Indian economy, diesel price deregulation and taxes for the super rich. Excerpts:
What is your main focus area?

I think the main focus which we should be emphasising is on infrastructure. We have got to get the power sector right. We have to make sure that gets back on track because it has really cost us a lot of, I would say, goodwill. We have got to get the coal sector right. We got to get the power sector right, plus our other infrastructure sectors like roads.

You may not be the biggest but you are the most trusted UPA ally. How it has been for allies like you to standby some really tough decisions?

India is going to achieve a lot in the long run due to good, sound economic policies. At least as far the NCP is concerned, we have always been very rational and very supportive of the economic reforms.

India Inc, especially the auto sector, is very-very nervous. They believe taxes could be raised on diesel cars, that is an obvious conclusion people are drawing, I think demand will take a little bit of a hit because of diesel deregulation. How are you smoothening frayed nerves?

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Indonesia Plans Scorecards to Boost Corporate Governance

Indonesia’s Financial Services Authority plans to publish scorecards rating companies on the quality of their corporate governance as it begins supervising capital markets in Southeast Asia’s biggest economy.

The agency plans to rate the nation’s 50 biggest listed companies this year, said Muliaman Hadad, chairman of the newly minted regulator known by its Indonesian acronym of OJK. How companies treat minority shareholders and the roles played by board directors are among the criteria, he said in an interview in Jakarta on Jan. 15. OJK will consolidate supervision of capital markets, banks and non-bank financial institutions.

Hadad, a former central bank deputy governor, wants companies to improve practices to lure investors and broaden the pool of capital to fund growth. Indonesia’s economic recovery since the Asian financial crisis in 1997-1998, when the nation had to seek an International Monetary Fund bailout, has prompted Fitch Ratings and Moody’s Investors Service to raise their sovereign debt scores to investment grade.

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Ambow Slumps as Data Clouds Economy View: China Overnight

 

 

Chinese equities fell in New York for the first time in four days, led by consumer stocks, as data showing a leading index rose less last month than in November undermined optimism over the economic recovery.

The Bloomberg China-US Equity Index (CH55BN) of the most-traded Chinese shares in the U.S. retreated from a one-week high to drop 0.5 percent to 101.24 yesterday. Ambow Education Holding Ltd. (AMBO) sank to a record low, while hotel chain China Lodging Group Ltd. (HTHT)slid 2.5 percent. Oil refiner China Petroleum and Chemical Corp. traded at the first discount in two weeks to its Hong Kong stock, while Bona Film Group Ltd. (BONA) lost the most in a month. E- House China Holdings Ltd. (EJ) jumped for a second day.

The China-US measure followed the Hang Seng China Enterprises (HSCEI) Index lower after the New York-based Conference Board’s leading gauge for China’s economy rose 0.4 percent in December, from a 1.1 percent climb the previous month. A reading of 10-day volatility on the index of Chinese stocks listed in New York fell to 13.9, the lowest level this year.

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Weak infrastructure holds back Indonesian economy

According to Huffington Post’s Chris Brummitt, Jakarta, Indonesia — Months behind schedule, the construction crew racing to finish a highway encircling Indonesia‘s traffic-choked capital is being blocked by a determined group of locals and the ramshackle cemetery that is home to their ancestors.

Talks on a new location have yet to reach an agreement accepted by all the relatives of the some 500 people buried there. That has not stopped authorities digging a new cemetery a short distance from the old one – pointlessly according to Yaman, the neighborhood chief.

“There is no way we can agree to that,” said Yaman, pointing to workers hacking through the thick red earth during a midafternoon rain shower. “It will be too noisy. How are we supposed to pray for our ancestors there?”

Indonesia‘s economy is booming. But to sustain and deepen its growth, it badly needs new roads, bridges, power stations and ports. Land disputes such as this one in west Jakarta, and a host of other difficulties from corruption to budget-draining populism, make building such infrastructure a long and costly process. That is preventing the country from attaining the kind of transformational development experienced in a generation by countries such as South Korea and more recently China.

Last week, floods engulfed around 30 percent of Jakarta, including its central business district, dramatically exposing decades of underinvestment in the drainage and flood defenses of the city of 14 million people.

To be sure, beleaguered economies in the West would envy Indonesia‘s current growth rate of more than 6 percent. Coupled with political and social stability, it represents a dramatic change from the Indonesia of 12 years ago, when political crisis, separatist violence and economic meltdown led to fears the massive island nation could break apart.

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Indonesia’s economic growth likely to remain strong in 2013

Indonesia-economy-jakarta-skyline

According to the Global Times, Indonesia’s economic outlook remains positive next year, thanks to a steady domestic consumption, a robust investment climate and the accelerated infrastructure development, media reported here on Wednesday.

Barclays Research predicts that Indonesia’s economy, the biggest in Southeast Asia, will expand 6.3 percent in 2013, the same pace as this year’s projected growth. Last year it grew 6.5 percent, the fastest pace since 1996.

Among the 10 emerging Asian nations covered by Barclays Research, the country will have the third-fastest economic growth after China and India next year.

Barclay’s prediction is below the Indonesia’s government forecast of 6.6 percent to 6.8 percent for 2013 after growing 6.5 percent this year.

It is also lower than the projection of the central bank, Bank Indonesia, of 6.6 percent to 6.7 percent for 2013.

Barclays Research, a part of the corporate and investment banking division of Barclays Bank, was less rosy on the global economic growth.

In its economic outlook report sent to clients on December 13, it trimmed its global gross domestic product growth projection for 2013 to 3.3 percent from 3.5 percent a quarter ago. It still maintained its 2012 growth estimate at 3.1 percent.

“Emerging economies have much better growth prospects than those for advanced economies,” Barclays Research was quoted by the Jakarta globe as saying.

“They are likely to continue contributing positively to global demand expansion, via incremental fiscal stimulus and monetary easing,” it said.

Perry Warjiyo, an executive director for the economy and monetary policy research at the Indonesian central bank, said that increased economic activity ahead of the elections in 2014 will boost economic growth next year.

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China’s economic conundrum

China’s leaders are facing a conundrum. They’re preparing to hand over power to a new generation in the autumn.

But look at all the data rolling in and it seems the current Communist leadership could be stepping aside just as China’s economy is at its lowest ebb in years. So should they try to give things a boost, or will that make any problems they pass on to the new leadership worse?

This weekend, Premier Wen Jiabao was touring the southern manufacturing heartland of Guangdong. It was his third visit to China’s economic heartlands in recent weeks.

He used it to make a very public call for greater efforts to support exports. They’re one of the key drivers of China’s economy, but look to be flagging.

According to Xinhua, Premier Wen said: “The third quarter of the year is a critical period for China to realise the year’s export growth target and we should take targeted steps to stabilise growth.”

“Wen said that judging from the new export indexes, China’s export outlook will continue to be clouded by difficulties and uncertainties,” the news agency reported.

 

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Mongolian Voters Seek Bigger Share of World-Beating Economy

Scott Eells/Bloomberg

Mongolians went to the polls today to elect leaders who must address soaring inflation and rising demands for a fairer distribution of more than $1.3 trillion in mineral wealth in the world’s fastest growing economy.

The new government must tackle how to use a jump in revenue from gold, copper, iron and coal projects to benefit its 3.1 million people, a third of whom live below the poverty line. Pressure to hand out more of the proceeds may put it in conflict with mining companies led by Rio Tinto Group that have invested $5.3 billion to tap the country’s mineral wealth.

Public discontent centers around the distribution of wealth from the mineral boom, which boosted the economy 17 percent last year. Mongolia, which supplies almost half China’s coal for steelmaking, doubled state spending in real terms to 6.3 trillion tugriks ($4.7 billion) last year, the International Monetary Fund said in December. The flood caused food prices to jump 31 percent in April from a year earlier.

An April announcement by state-run Aluminum Corp. (2600) of China Ltd. that it will take control of SouthGobi Resources Ltd. (SGQ), a Mongolian coal miner, sparked a public outcry. Parliament reacted by passing a law tightening rules on foreign investment in industries including metals, media and communications, Vice Finance Minister Ganhuyag Chuluun Hutagt said in May.

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