Author: investingeast

Asian Stocks Rise as Wen Confirms Stimulus Room

Premier Wen Jiabao’s recent statement that China does indeed have room to add stimulus has buoyed Asian stocks for a fifth consecutive day, while regional bond risks have fallen to their lowest rate in over a year.

Europe’s equity futures have also advanced, as the court prepares for a final verdict regarding Germany’s place in a Eurozone bailout fund.

Yesterday, Wen confirmed that China has “ample” opportunity to use fiscal and monetary policy to meet growth markets, while tomorrow marks the end of a two-day meeting between Fed Chairman Ben S. Bernanke and his colleagues and the final decision regarding their contribution to asset purchases. Germany also plays a significant role in the events as the country’s Federal Constitutional Court will now announce whether it will participate in the European Stability Mechanism.

Hiroichi Nishi of SMBC Nikko Securities Inc. explained:

“The market is getting confident that governments won’t let economies get worse, as expectations are mounting in the U.S. for more monetary easing and China expands public investment. At the same time, Europe is making progress, even though it’s not speedy.”

Short-Selling Will Be Made Easier by Chinese Regulators

The news on investors’ minds today, including those managing Oasis Management Hong Kong, is what will be the consequence of the Chinese plan to introduce a new way to make it more convenient for investors to short-sell locally traded equities.

Chinese regulators are determined to help bring its markets to a place more in line with standards which are in place all over the world. The hope is that the move to make short-selling easier will help stimulate the hedge fund industry in China.

In order to achieve its goals Chinese leaders in Beijing plan to start a group called the Centralized Securities Lending Exchange, which they hope will be in place by the end of March this year, which will act as a platform for short-selling activities.

According to a report, China’s market regulator, the China Securities Regulatory Commission, will be the largest shareholder in the new exchange.

Investing in Asian Markets

Many American companies are making investments abroad for various reasons.  According to a recent news article, American firm LeapFrog Investments that invests in companies in “undeserved markets in Asia and Africa,” has just put an injection of $15m capital into Shiriam Credit Co. Ltd., an insurance, investment and savings company in India.  According to Jim Roth, the company’s co-founder and partner, this deal is set to have “enormous social impact by financing and improving cover for millions of financially excluded clients and their families in India while also generating healthy financial returns.”

Of course, there are many other reasons American business leaders and companies seek to make their investments in the Asian region.  The world’s biggest research-based pharmaceutical company, Pfizer Inc., works substantially in Asia.

China May Not Import Corn from the U.S.

The United States Grains Council announced that China may not need to import corn from the U.S.  this year.

The group explained that China has no need to “rush into the market,” as they had a successful harvest themselves. Prices have risen to nearly $6.00 a bushel, as well. Still, China may watch to see if the prices fall below $6.00.

As of now, however, corn for the December delivery jumped by 2.1%, to trade at $6.105 with Beijing.