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July 13, 2006
Shanghai index drops nearly 5 percent
Permalink: Shanghai index drops nearly 5 percent
Filed under: Equities, Economy, China, Asia, Japan
Most Asian equities markets saw substantial losses on Thursday. The exception was Manila’s composite index, which added 1.3 percent to 2,261.57.
The Shanghai composite index in China, by contrast, dropped 4.8 percent to 1,655.8 on the news that China’s largest bank, Industrial & Commercial Bank of China, and Daqin Railways both plan to float initial public offerings later in the year. The ICBC IPO will take place on the same day it lists in Hong Kong. Investors worried that the market will be inundated with new paper from the IPOs. Also helping Shanghai lower was a report that the Chinese central bank will raise interest rates once again. Despite today’s losses, however, Shanghai is still 43 percent higher than it was when the year began.
Elsewhere, the Hang Seng index in Hong Kong dropped 1.3 percent to 16,305.48 on the rumors of an interest rate hike in China. The weighted index in Taipei was down 1 percent to 6,567.60 on worries about earnings in the technology sector there.
In Tokyo, the Nikkei 225 dropped 1 percent to 15,097.95 and the Topix index was down 0.8 percent to 1,551.03 as the semiconductors and consumer electronics sectors saw declines.
Advantest declined by 2.9 percent to ¥11,420, while NEC Electronics was down 3.4 percent to ¥3,450 on a downgrade from Credit Suisse. Tokyo Electron dropped 4.5 percent to ¥7,470.
Among consumer electronics companies, Sony fell 1.2 percent to ¥4,930, Canon dropped 1.9 percent to ¥5,620, and Matsushita Electric Industrial, maker of the Panasonic brand, declined by 3.1 percent to ¥2,225.
The consumer finance sector in Tokyo saw gains after recent losses. Takefuji added 4.8 percent to ¥6,120 when a Canadian investment group added to its holdings in the Japanese lender.
July 22, 2005
People’s Bank of China carefully controls renminbi strengthening
Permalink: People’s Bank of China carefully controls renminbi strengthening
Filed under: Forex, China, Asia, Yen
After China’s revaluation of the renminbi to Rmb8.11 to the dollar on Thursday, it slipped ever so slightly on Friday to Rmb8.1111 to the US dollar.
However, the People’s Bank of China intervened to stop the Chinese currency from strengthening from its opening point.
At least one analyst saw this as the proper thing to do, saying that to let it rise right away would encourage speculators.
Most analysts expect the renminbi to strengthen to between 7.9 and 7.95 to the US dollar by the end of this year and to between 7.5 and 7.75 by the end of 2006, although the Bank of America expects to see it remain around Rmb8.11 until the end of the year and at 7.89 by the middle of 2006.
Malaysia also limited the movement of the ringgit, which it also removed from its peg to the dollar on Thursday, allowing it to rise by only 0.7 percent. It rose to M$3.775 in relation to the US dollar.
In other Asian currencies, the South Korean won gained 1.5 percent on the US dollar to Won 1,020, while the Taiwan dollar was up 1.3 percent to T$31.54 against the US dollar. Both those countries also moved to limit gains.
The yen, which was higher on Thursday on the news of the renminbi’s revaluation, lost value on Friday when it became clear that China was limiting its currency’s rise.
Still, the yen ended the week 0.7 percent higher in relation to the euro, at ¥134.06, and it was 1 percent higher in relation to the US dollar at ¥111.06 as well as having gained 1.7 percent in relation to sterling for the week, to ¥198.30.
Sterling had a bad week, losing 0.6 percent to $1.7408 in relation to the US dollar, falling 1 percent to £0.6935 in relation to the euro, and declining by 2.8 percent against the Australian dollar to near an 8-year low of A$2.2729.
The euro gained 0.4 percent in relation to the US dollar over the week , to $1.2074.
The Australian dollar also performed well against the greenback, rising by 2.3 percent to $0.7658.
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