Is it Right: More Money Means More Health Problems in Asia?

Flavored juice drinks sit on a shelf in a grocery store in Manila. (Bloomberg)

According to The Wall Street Journal, MANILA — Economies in Southeast Asia are not the only things growing in the region. Waistlines are too – and that has doctors and health experts worried about the strains a clutch of new health problems could put on many countries still in the process of developing.

Rapid economic growth has created new and expanding middles classes in places like Indonesia, the Philippines and Vietnam. But new affluence is also driving up the rate of “life-style” diseases, including hypertension, cancer, diabetes and chronic respiratory illness, say doctors.

Together, those diseases account for 80% of the deaths in Asia, but health experts say it need not be that way – most could be addressed by people simply changing the way they eat and live.

“We must have behavior change,” Shin Young-soo, the World Health Organization’s regional director for the Western Pacific, said during a recent health summit in Manila.

As regional incomes improve, people have more money to spend on fast food and processed snacks. In recent years, demand for meat and dairy has also risen dramatically in many of Southeast Asia’s emerging economies.

But changes in diets combined with lack of exercise has made Asians more prone to diabetes than their counterparts in the West, said Dr. Shin, one of nearly 200 health and development experts attending a week-long gathering here aimed at discussing non-communicable diseases and finding way to combat them.

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How Asian Markets Down on Earnings?

Asian Stock Market (Asian News)

According to The Wall Street Journal, Asian stocks moved lower Friday, though Australia managed to rise, in a session heavy in corporate earnings.

South Korea’s Kospi slid 1.1%, with the index’s largest single constituent, Samsung Electronics 005930.SE 0.00% down 1% after it reported third-quarter net profit had risen 25.6% to another record. Before the results, the stock enjoyed a strong run-up, and remains 5% higher so far in October.

Also in Seoul, LG Electronics 066570.SE -3.42% dropped 3.7% after it reported a 34% decline in net profit over the same period.

In Hong Kong, shares of Chinese auto maker Great Wall Motor GWLLY -4.22% shed 5.8% after reporting weaker profit margins in the third quarter.

In Japan, Canon 7751.TO -1.60% fell 1.1% after it lowered its full-year net profit forecast to ¥240 billion ($2.46 billion) from a previous estimate of ¥260 billion set in July. Mitsubishi Motors 7211.TO +1.17% Corporation added 1.8% after the car company increased its profit outlook.

More broadly, the absence of fresh catalysts left regional markets to drift lower.

In Japan, the Nikkei remained under pressure from a yen that has firmed up in recent sessions. The Japanese currency maintained its strength, last at ¥97.21 to the dollar, helping to pull the Nikkei down 1.7%.

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Finally Samsung Apologizes After China State TV Criticizes Handsets

Samsung (Bloomberg)

Samsung (Bloomberg)

According to Bloomberg, Samsung Electronics Co. (005930) apologized to Chinese consumers after the national broadcaster criticized the company for making handsets that allegedly malfunction because of faulty memory chips.

Samsung, the world’s largest maker of mobile phones, pledged to provide free maintenance, according to Chinese rules, for the seven models included in China Central Television’s report, according to a statement posted on Samsung’s China website and dated yesterday. The warranty for handsets produced before Nov. 30, 2012, will be extended one year, it said.

CCTV’s “Economic Half-Hour” program reported this week that Samsung’s Galaxy S and Note series handsets crash as many as 30 times a day and the chips need to be upgraded. The Suwon, South Korea-based company joins Apple Inc., Danone, Volkswagen AG and Starbucks Corp. in being accused by China’s state media of mistreating consumers in the world’s second-biggest economy.

“The Chinese government is trying to bring consumer sights back to domestic companies because they know it’s necessary to foster local companies to ensure stable economic growth,” said Lee Jin Woo, a fund manager at Seoul-based KTB Asset Management Co. in Seoul. “Samsung has read their mind well enough to keep a low profile to appear consumer-friendly.”

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Do Asian Stocks Climb as Won to Aussie Jump?

Source: Bloomberg

Source: Bloomberg

According to Bloomberg, Asian stocks climbed a fifth day, with the benchmark gauge trading near a five-year high, while emerging-market currencies strengthened on speculation the Federal Reserve will hold off cutting monetary stimulus until next year. Australia’s dollar jumped after inflation data.

The MSCI Asia Pacific Index rose 0.3 percent by 10 a.m. in Tokyo after earlier touching the highest level since June 2008. Standard & Poor’s 500 Index (SPA) futures dropped 0.1 percent after the gauge rose in New York. South Korea’s won climbed to the strongest level since January and Malaysia’s ringgit snapped a three-day decline. The Australian dollar strengthened to hold at a 4 1/2-month high. Copper retreated 0.4 percent after gaining yesterday while silver rose a seventh day.

Barclays Plc pushed out their estimate for the start of Fed tapering to March from December after data delayed because of the U.S. government shutdown showed employers added 148,000 workers in September, below the 180,000 increase projected in a Bloomberg survey. The 16-day shutdown cut U.S. growth and cost jobs, according to an economic aide to President Barack Obama. China’s Treasury holdings fell to a six-month low in August and Australian inflation quickened more than expected last quarter.

“The key takeaway for the Fed from the September U.S. non-farm payrolls is that the U.S. economy is in no shape to withstand a reduction in monetary stimulus,” Matthew Sherwood, head of investment markets research in Sydney at Perpetual Investments, which manages about $25 billion, said in an e-mail. “Expectations of tapering delays will continue to support markets.”

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Is it Revival time for the Asian Junk-Bond Markets?

Source: Bloomberg

Source: Bloomberg

According to The Wall Street Journal, risky bonds are making a comeback in Asia after falling out of favor over the summer, as recent developments in the U.S. have prompted investors to embrace increased risk in exchange for higher yields.

Buoyed by the U.S. Federal Reserve’s $85 billion-a-month bond-buying program, investors in Asia took advantage of high-yield, or “junk,” bond issues early this year to increase returns against an otherwise low-interest backdrop. In the first five months alone, new junk bonds issued in Asia outside of Japan totaled $22.4 billion, exceeding the $15.3 billion total for all of last year. But indications from the Fed in late May that it could dial back its stimulus spending earlier than expected damped enthusiasm for the risky securities.

The Fed didn’t announce a pullback in spending after policy meeting last month, however, leading investors to expect at least a brief reprieve.

“The market has returned to a more risk-on mode since early September,” said Job Campbell, Hong Kong-based senior portfolio manager at Income Partners Asset Management, a $1.4 billion fixed-income manager. The fund has recently bought high-yield bonds issued by Chinese property firms including Yuzhou Properties Co. and Greentown China Holdings Ltd. 3900.HK -1.15% , he said.

Investors who were cautiously dipping their toes back into higher-yield bonds after the mid-September decision may have gotten more bullish since the U.S. budget and debt-ceiling standoff this month, the resolution of which has provided more certainty that the Fed will continue its stimulus effort at least until early next year, when the next showdown could occur.

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Apple squeezed in smartphone market by competition from Asian manufacturers

Apple squeezed in smartphone market by competition from Asian manufacturers

The global smartphone market showed healthy growth in the second quarter, but Apple’s iPhone was squeezed by competition from Samsung and other Asian manufacturers, surveys showed Friday.

Apple’s share of the global smartphone market fell to 13.1 percent in the April-June period, according to research firm IDC. A separate report by Strategy Analytics gave Apple 13.6 percent, but noted that it was the US firm’s lowest share since 2010.

Samsung extended its dominance, capturing nearly one-third of all smartphones sold worldwide, according to the surveys, while South Korea’s LG and China’s Lenovo and ZTE showed accelerating growth.

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Asian Stocks Cautious Before China Data

Asian Stocks Cautious Before China Data

Asian equity markets were mixed on Friday as caution ahead of Chinese growth data next week offset gains from Wall Street’s record-breaking rally overnight.

Japan’s Nikkei and Australia’s S&P ASX 200 pared gains from their respective multi-week highs. Amid laggards, South Korea’s Kospi index closed below 1,870 points and the Shanghai Composite tumbled 1.6 percent.

For the week, Australia’s benchmark was Asia’s outperformer with a 2.7 percent gain while the Kospi came in second with 2 percent gains each.

“Investor sentiment has shifted from fears of when the Fed will taper to further stimulus by the Fed, and an expectation that China’s Premier Li Keqiang will tackle this slowdown with structural changes,” said Kelly Teoh, market strategist at IG in a morning note.

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Asian partners: The future of Australia’s business relationship with Korea

Asian partners: The future of Australia’s business relationship with Korea

When Chung-Sok Suh arrived in Australia from South Korea in 1979 there were about 3000 Koreans living in Australia. He calls them the “first wave”. Today, the number of Korean Australians has increased to 150,000 or so, most of them based in Sydney. Importantly, many are second-generation Korean Australians, often bilingual, and a key resource in the developing relationship between the two countries.

With Korea now Australia’s fourth-largest trading partner, this new generation has an important role to play as a bridge between the two countries. It is also a trading relationship where Australia enjoys a significant surplus.

Korean brands such as Hyundai, Kia, Samsung and LG are part of everyday Australian life and investors such as POSCO are a strong presence in the Australian resources industry. Around 50 Korean companies are active in doing business with Australia, while 100 Australian companies have activities in Korea.

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Taiwan Lowers 2013 GDP Growth Forecast Despite First Quarter Expansion

Taiwan lowers GDP forecast for this year even after faster-than-expected expansion in the first quarter. (Maurice Tsai/Bloomberg)

Taiwan lowers GDP forecast for this year even after faster-than-expected expansion in the first quarter. (Maurice Tsai/Bloomberg)

Chinmei Sung from Bloomberg reports that Taiwan lowered the economic growth forecast for this year even as it reported a faster expansion in the first quarter than initially estimated.

Gross domestic product rose 1.67 percent in the three months through March from a year earlier, the statistics bureau said in a revised estimate released in Taipei today. Its preliminary report last month was 1.54 percent, while the median in a Bloomberg News survey of 18 economists was 1.5 percent.

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China: Tough Challenges Ahead in Shift to Consumption-Driven Economy

China faces a difficult task of rebalancing the economy towards a consumption-driven model.

China faces a difficult task of rebalancing the economy towards a consumption-driven model.

Tom Orlik from WSJ reports that a more detailed look at China’s economic performance in 2012 shows it tipped further off balance, relying more than ever on credit-fueled investment, a trend it had tried to rein in.

A further tilt toward capital spending flies in the face of Beijing’s goals to shift to a consumption-driven economic model and threatens to add to a mounting debt problem, exacerbate industrial overcapacity that is dragging down profits, and produce more empty “ghost cities.”

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