[B]Chinese Yuan Posts Biggest Advance in Six Weeks[/B]
The Yuan recorded its biggest gains since July 13th after PBOC officials made some hawkish comments on economic growth increasing speculation that the government will allow yuan gains to quell growth. Central Bank Governor Yi Gang stated that the nation needs to resolve excess liquidity “effectively”. Gains in China where not limited to the yuan however, equities also shared in the currency advances with the CSI 300 Index climbing 1.59 percent to a record high of 5217.58. Such advances in stocks are indicative of the increased speculative inflows that lifted currency values. The Chinese yuan strengthened 0.27 percent to 7.566 against the greenback having climbed 9.4 percent since the fixed-rate to the dollar was lifted.
[B]Bank of China reveals more details on the extent of their exposure to the U.S. subprime crisis[/B]
Bank of China disclosed that holdings in assets backed by U.S. subprime loans totaled almost $9.7 billion making them the most exposed Asian firm to the tainted instruments. Investors rapidly fled positions in the nations? second-largest financial institution sending shares down 5.4 percent. The heavy Hong Kong selling-pressure was highlighted by volume that reached four times the daily average as almost 1.5 billion shares traded hands erasing $10 billion of the bank?s market cap. The subprime epidemic has wiped over $5.5 trillion from global equities and analysts contend that the 10 percent decline in Bank of China shares this year is likely to spread further.
[B]Production in Singapore Reaches Highest in More Than a Year[/B]
Singapore?s industrial production grew at the quickest pace in over a year as pharmaceutical firms where forced to ramp-up output to satisfy market demand. Manufacturing, which accounts for 25 percent of Singapore?s $134 billion economy, defied all economists? forecasts posting its biggest gain in 13 months, surging 21.6 percent from a year ago. The Singapore dollar rose to 0.09 percent to SG$1.5218 from SG$1.5204 yesterday.