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[B]Chinese[/B][B] Yuan Falls From Record [/B]
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[B]Financial Sector Ruled By Wu[/B]
- China Funds Boost Hang Seng To Record High
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[B]Singapore Stocks Advance To Record [/B]
Falling From Record High, Chinese Yuan Under Pressure On Two Way Trading
The Chinese yuan dropped from the record high against the dollar in the London session, following last week?s policy announcement by the People?s Bank of China. Previously dictating that domestic funds were restricted in investing in stock markets abroad, the country?s central bank announced that domestic investors, including institutions, will be allowed to freely invest in assets outside the country. The move is big step for the economy, although not really a surprise. The government, after suggesting the possibility earlier in the year, was speculated to implement such an initiative in order to help restrict speculation in the underlying currency. Incidentally, the decision took the Chinese yuan back a bit against the US dollar, falling back to 7.6803 from the record 7.6766 according to the China Foreign Exchange Trade System. With funds now able to float outside the country, there is an established two way flow in the currency pair, countering previous notions that directional bias would only be in the yuan?s favor.
Consolidation Of Power, Wu Takes Over Financial Sector Role
Vice Premier Wu Yi assumed responsibilities of Huang Ju, one of China?s four vice premiers, today overseeing the country?s financial services portfolio according to Chinese officials. The decision comes but two weeks ahead of the Strategic forum in Washington, and will likely help the Vice Premier in assessing any further remedies that may be dealt to US Congressmen over the issue of a manipulated currency. Already “familiar with financial and banking matters” according to Guan Anping, former legal aide to Wu, the new responsibilities are placed in strong hands as Wu is said to be fully trusted and backed by Chinese President Hu Jiantao.
Hong Kong Stocks Climb On Busiest Day
Shares on the Hong Kong stock markets roared higher in the overnight, climbing to a record on enormous volume. The world?s biggest mover for the day, the Hang Seng index was boosted by increased investment stemming from the recent decision to allow Chinese investors access to foreign markets. With interest already mounting in the index, it was only a matter of time before the influx would boost the overall market. Leading advancers on the day were China Mobile Ltd. and China Life Insurance Co. Bellwether companies, both benefited from the fact that expectations remain high for increased growth throughout the region. Hong Kong Exchanges & Clearing Ltd. shares surged on speculation that rising trade volumes from the decision will add more than positively to the company?s earnings in the near term. The operator of Asia?s third biggest stock market, advanced HK$8.65 or an impressive 11 percent to HK$88.75, the biggest gain since mid year 2006. Ultimately, the surge in volume helped to push the benchmark index higher, closing at another record. Rising by 511 points on the day, the index added 2.5 percent to close at 20,979.24.
Singapore Stocks Advance To Record
On the heels of Hong Kong gains, stock in Singapore markets additionally advanced to a record. Boosted by benchmark issues, the Straits Times index vaulted higher by 54 points or 1.6 percent to close higher at 3,501.10. Notably helping stocks higher were shares in Singapore Airlines Ltd. Rising the most in seven years, the company?s shares were higher after a report showed profit topping analyst estimates for the quarter. Boosted by healthy travel volume, the regional carrier also announced it would pay a strong 85 cent dividend while cancelling one out of every 15 stock, hoping to boost the price. As a result, shares rose 40 cents to close at S$18.90. China based stock was also dealt a healthy dose of support, notably Yangzijiang Shipbuilding Holdings Ltd… China?s largest privately owned builder of container ships, rose 6 cents to S$1.43 with FerroChina Ltd. advancing 2 cents to 27 cents on the first day of trading.