Archive for December, 2010

Basel Committee seeks consultation on bank pay

Monday, December 27th, 2010 | Finance News

ZURICH (Reuters) – The Basel Committee for Banking Supervision on Monday issued a consultative document on disclosure requirements on financial sector remuneration, following public ire at bankers' bonuses during the crisis.

Under the new guidelines, banks would disclose qualitative and quantitative information about their remuneration practices, it said.


Stock index futures signal profit taking

Monday, December 27th, 2010 | Finance News


PARIS (Reuters) – Stock index futures pointed to a lower open on Wall Street on Monday, with futures for the S&P 500 down 0.45 percent, Dow Jones futures down 0.44 percent and Nasdaq 100 futures down 0.16 percent at 0850 GMT (3:50 a.m. ET).

On Saturday, China's central bank raised interest rates for the second time in just over two months as it stepped up its battle to rein in stubbornly high inflation. The People's Bank of China said it will raise the benchmark lending rate by 25 basis points to 5.81 percent and lift the benchmark deposit rate by 25 basis points to 2.75 percent.

A winter blizzard moved across the northeastern United States on Monday, disrupting air and rail travel and forcing motorists to deal with blowing snow and icy roads at the end of the busy Christmas weekend.

Oil climbed to a 26-month high on Monday as the blizzard in the U.S. Northeast offset uncertainty over Chinese fuel demand following the Christmas Day interest rate hike.

The global economy can withstand an oil price of $100 a barrel, Kuwait's oil minister said on Saturday, as other exporters indicated OPEC may decide against increasing output through 2011 as the market was well supplied.

European stocks were down 0.8 percent in early trade, with thin volumes as UK markets remained closed, and as China's latest rate hike prompted investors to cash in a little portion of the strong gains made in December.

Auto stocks such as BMW (BMWG.DE) and Daimler (DAIGn.DE) were down around 4 percent, surrendering some of their lofty gains made so far this year, as investors digested Beijing's new measures to limit new car registrations to tackle congestion in the country's capital.

U.S. stocks racked up a fourth straight week of gains last Thursday. The Dow Jones industrial average (.DJI) added 14.00 points, or 0.12 percent, to 11,573.49. The Standard & Poor's 500 Index (.SPX) edged down 2.07 points, or 0.16 percent, at 1,256.77. The Nasdaq Composite Index (.IXIC) eased 5.88 points, or 0.22 percent, to 2,665.60.

(Reporting by Blaise Robinson, editing by Miral Fahmy)


Asian shares rise as investors look past China rate hike

Monday, December 27th, 2010 | Finance News


HONG KONG (Reuters) – Asian shares edged up while the Australian dollar and commodities pared early losses as investors bet China's latest interest rate hike would not change the optimistic outlook for the global economy in 2011.

People's Bank of China raised rates by 25 basis points on Saturday, the second rate rise in just over two months, as part of a series of measures designed to combat inflation which hit a 28-month high of 5.1 percent in November.

"Our economists had expected a rate rise before the end of the year, but releasing the news on Christmas Day itself came as a little surprise to the market," said Chen Xin Yi, associate vice president at Barclays Capital in Singapore.

"Nevertheless, we believe that the well-calibrated timing reflects consideration for minimizing unwanted financial market volatility and reducing potential capital movement to the extent possible."

The MSCI index of Asian stocks outside Japan rose 0.2 percent. Major markets such as Hong Kong and Australia remained closed.

"The impact of today's rate move on the real economy's growth momentum is likely to be minimal." said Qian Wang, chief China economist at JP Morgan.

China's key stock index pared earlier gains and yuan forwards were modestly higher. The Shanghai Composite was down 0.3 percent, with weak small and mid-cap shares offsetting mild gains in banking and insurance shares.

Japan's Nikkei closed up 0.75 percent, extending its recent outperformance versus other Asian markets. The Nikkei is up over 10 percent this quarter versus a 5.4 percent rise for the MSCI Asia ex-Japan index.

Still, Japanese investors are entering 2011 in a bullish mood, raising equity holdings to a 10-month high, increasing exposure to high-yield credit and cutting back on government debt, Reuters polls showed last week.

S&P futures were a shade lower, down 0.2 percent.


Commodity markets pared early losses in response to an interest rate rise by PBOC, focusing instead on positive fundamentals and threats to supply.

U.S. wheat had dropped by more than 2 percent at the open before recovering to $7.81-3/4 a bushel, down 0.2 percent, while spot gold was trading flat after dropping to a one-week low of $1,371.1 earlier.

Crude oil futures reversed early falls, rising 0.3 percent to a two-month high.

The Australian dollar was flat after slipping in early trading on expectations that more tightening by China could prompt investors to sell the Aussie after the year-end break.

(Additional reporting by Nick Trevethan in SINGAPORE and Anotoni Slodkowski in TOKYO; editing by Kazunori Takada)