http://malaysiafinance.blogspot.com/2010/03/marketocracy-portfolio-updated-march-3.html
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Thursday, 15 April 2010
Marketocracy Portfolio Updated - April 14, 2010
Further updates to Salvador Dali Mutual Fund (SMF) at Marketocracy. Beating the S&P500 by 41.89 percentage points for the last 12 months.
http://malaysiafinance.blogspot.com/2010/03/marketocracy-portfolio-updated-march-3.html
http://malaysiafinance.blogspot.com/2010/03/marketocracy-portfolio-updated-march-3.html
Tuesday, 13 April 2010
Chivas With Sweetened Green Tea
I know it must be galling to the producers of fine cognac, fine whiskey ... to see how some Asians drink their product. I was shocked when people started to mix sweetened green tea with their Chivas, but hey, it actually tasted quite good. One should think of it as a cocktail, I guess. There is proper decorum and there is what the end user really like. At the end, the consumer is always right. I still remember how the makers of Hennessy and Otard were shocked beyond belief when they first made their visit to Asian capitals to see why their product was getting so popular in the 70s. I mean, people were topping it full with water and a little ice and then yaaammmmm sseeeennnggg... all down in one gulping motion - to the prim and proper Frenchmen, that was blasphemous! Thats not how you drink brandy... or so we think.
If you are producing something that is a labour of love and considered to be a fine living product, it comes attached with the culture that it was produced. I do think there are limits to everything. I mean, what would happen if people start mixing wine with half a glass of water? To me, even that is OK, provided if its not a superior product. I think if you like Chivas with green tea, go ahead, after all Chivas is Chivas, nothing big to shout about. If you are drinking VSOP brandy and you want to mix it liberally with water and ice and gulping it down in one shot, go ahead.
Hey after all, people have been mixing inferior red wine with lemonade (kind of) to make sangria. I do draw the line when its a superior product, e.g. XO cognac or fine single malt whiskey - the product in itself is meant to be consumed on its own, maybe with a few cubes of ice, at most a dash of water but even that is borderline. The consumer may be right, but there are limits to that - imagine if our best bak kut teh is eaten by people in Europe by mixing it with half a bowl of water, we would puke, or say they dunk our best prawn mee with a a chocolate sauce!!! We would be livid as well.
If its a generic product, I don't even mind people drinking beer with ice cubes to keep it cool even though it may be watering the beer down (hey, have you tasted American beer, thats what it is anyway). But if you are drinking the premium stuff like Crown Lager or Coopers Ale, thats just blasphemous and wrong to take it any other way than just straight up.
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WSJ: Patrick Ricard balked when he first saw Chinese drinkers mixing Chivas Regal Scotch whisky with green tea. But these days, the chairman of French wines and spirits maker Pernod Ricard SA has learned to swallow his reservations over the local habit.
If you are producing something that is a labour of love and considered to be a fine living product, it comes attached with the culture that it was produced. I do think there are limits to everything. I mean, what would happen if people start mixing wine with half a glass of water? To me, even that is OK, provided if its not a superior product. I think if you like Chivas with green tea, go ahead, after all Chivas is Chivas, nothing big to shout about. If you are drinking VSOP brandy and you want to mix it liberally with water and ice and gulping it down in one shot, go ahead.
Hey after all, people have been mixing inferior red wine with lemonade (kind of) to make sangria. I do draw the line when its a superior product, e.g. XO cognac or fine single malt whiskey - the product in itself is meant to be consumed on its own, maybe with a few cubes of ice, at most a dash of water but even that is borderline. The consumer may be right, but there are limits to that - imagine if our best bak kut teh is eaten by people in Europe by mixing it with half a bowl of water, we would puke, or say they dunk our best prawn mee with a a chocolate sauce!!! We would be livid as well.
If its a generic product, I don't even mind people drinking beer with ice cubes to keep it cool even though it may be watering the beer down (hey, have you tasted American beer, thats what it is anyway). But if you are drinking the premium stuff like Crown Lager or Coopers Ale, thats just blasphemous and wrong to take it any other way than just straight up.
------------------------------------
WSJ: Patrick Ricard balked when he first saw Chinese drinkers mixing Chivas Regal Scotch whisky with green tea. But these days, the chairman of French wines and spirits maker Pernod Ricard SA has learned to swallow his reservations over the local habit.
"If that's the way they prefer to drink it, we're very happy with that," said Mr. Ricard on a recent visit to Hong Kong. "Drinking our product with tea is a way of cultural harmony."
It's not hard to see why Mr. Ricard is embracing the Chinese take on Pernod Ricard's drinks. China's rising middle classes are developing a keen appetite for luxury goods, and foreign brands are particularly favored. Foreign companies have a major advantage in luxury goods, Credit Suisse said in a report earlier this year, citing a consumer survey that put Chivas Regal second only to Rémy Martin cognac as the country's most favored brand of premium liquor.
China already accounts for most of the 20% of global luxury sales expenditure that comes from non-Japan Asia, and its share will continue to rise, the bank said.
Pernod Ricard has a stable of alcoholic beverages that is wrapped up in its French heritage, and also includes some more recent acquisitions. But as the firm takes its drive beyond the bright lights of Beijing and Shanghai and into third- and even fourth-tier cities, it is kicking its localized China strategy into overdrive. That includes running its own vineyard in northern China and, beyond a few French managers in high positions, employing a China staff that is, Mr. Ricard says, "99.9% Chinese."
The following interview has been edited:
WSJ: How much time are you spending in Asia these days?
Mr. Ricard: I'm in Asia once a year now. In 1975, 90% of our business was in France, and the 10% that was abroad was just in the countries around France. Now, €7 billion ($9.45 billion), or about 90% of our business is outside of France, and Asia accounts for a quarter of the total sales of the group. I couldn't have imagined that 30 years ago. In five years, we expect our Asia sales to contribute about a third of our revenues.
WSJ: How much of your work is tapping existing demand, and how much of that is trying to create new demand where it may not already be?
Mr. Ricard: The will to drink must have been there. In the beginning, it was just Hong Kong and Japan. In mainland China 30 years ago, sales of our product was zero. Maybe in Guangzhou, cognac was already there. But there's a natural demand for China to go to new products. People want to try new experiences. Not everyone is like this, but there are many open-minded people in China.
Monday, 12 April 2010
Andy Xie Is Spot On On China Property
By Andy Xie
The central government has unleashed another round of property tightening measures. This time it is focusing on mortgage lending terms: the mortgage interest discount for first-time homebuyers has been reduced; the discount for second-time homebuyers has been abolished and the down payment requirement raised to 40%; and the rate for third-time buyers is being left to the banks' discretion with down payments raised to 60%.
Predictably, sales volumes in both primary and secondary markets have collapsed. But no one is panicking, not even those who live off the property bubble. Why? Aren't they supposed to be terrified of the government's crackdown?
It seems we have seen this movie before. China has launched property-tightening measures several times but it relaxed them just when they began to bite. The bottom line is that local governments, and the central government through them, depend very much on property for revenue. The market doesn't believe the government will cut off the hand that feeds it.
Local governments and developers are sitting on massive liquidity that they raised last year through land and property sales and borrowings, taking advantage of the "anything goes" window during the stimulus period. They seem to believe that the central government will change its mind before they run out of liquidity. So they are comfortable waiting and not cutting prices.
Cutting prices doesn't make sense if the government is expected to loosen policy again soon. The current lending terms effectively keep second- and third-time homebuyers out of the market. To sell, developers must cut prices to levels affordable to the buyers of first homes, who have low incomes and little wealth. All the players will play by the new rules only if the central government proves its credibility by maintaining the tightening policy until local governments and developers run out of money.
Contrary to the policies' intent, local governments are readying for another round of property inflation. Local governments have been using bank loans to resettle residents, and resettlement costs have skyrocketed since those being moved need enough compensation to buy properties at today's prices. Unless property prices rise considerably, local governments will end up losing money, which they cannot afford to do.
Resettlements played an important role in supporting demand for property last year. The overwhelming majority of end-user purchases probably came from resettled residents who used their compensation money for a down payment. Resettlement compensation is the biggest transfer of wealth from the government to the household sector since the privatization of public housing at low prices a decade ago. It is probably the most important government action supporting today's economy.
The positive elements of resettlement compensation come with two major negatives. First, it is using a form of leverage to support demand. Local governments borrow to pay the compensation packages, using the land as collateral. The resettled residents use the compensation as down payment for mortgage borrowing; so government debt becomes equity for mortgage debt. There is no real equity in the financing chain.
Second, the high compensation costs, though beneficial to the resettled residents, make local governments a player in further inflating property prices. China's economic policies have been favorable to the low-income class in the past few years through rural subsidies, agricultural land reform, and price controls for necessities. The resettlement policy is another element in the push to help them, but the costs are being borne by the middle class, whose most important expenditures — property, cars and education — are highly inflated. Indeed, China's property and car prices are among the highest in the world in absolute terms, and by far the highest relative to income. Unless policies change dramatically, the middle class squeeze will only get worse.
China's property market is a massive bubble. The stock of residential properties, developers' inventories, and land that local governments have pledged to banks may exceed by three times the gross domestic product. Rental yields in most cities are too low to cover depreciation costs. In major cities, the price-to-income ratio, a measure of housing affordability, is routinely above 20, which means that it would take an average mainlander 20 years to buy the average property using their total income. The bubble can still continue because China's banking system has plenty of liquidity – thanks partly to hot money and because local governments have many levers to channel bank liquidity into the market. But the longer the bubble lasts, the more damage it will do to the economy.
The stability of a modern society depends on its middle class being in the majority and content with its situation. The high land-price policy is a form of tax on the middle class, which will slow its growth. China may become a country with a small group of the super-rich, a vast lower class with no property, and a small middle class. Such a social structure would not be good for long-term stability.
The key to a sensible property policy is to reform the fiscal structure. First, government spending, mostly in fixed investment, should be curtailed. China doesn't need to build everything at once. Last year, the sum of government fiscal revenues, central and local government borrowings, and expenditures by state-owned enterprises probably exceeded half of the GDP. Could the government sector spend so much efficiently? Shrinking the government sector should be a top priority for the nation's future.
Second, the government sector still owns assets worth more than the entire GDP. The government should give it to the people to expand the middle class – a move that would support consumption, incomes and tax revenue. Shrinking the government and giving wealth to the people are the policies necessary to make growth balanced and sustainable. The rapid expansion of the government sector only increases its need for revenue and the incentive to inflate the property bubble. Without credible government reforms, property tightening is not credible.
One more point to note is that most of the bears assume Beijing will be sitting around doing nothing. Please note that bank lending by Chinese banks fell 43 per cent in the first quarter from a year earlier as the government winds down its stimulus and tries to cool a credit boom while keeping its recovery on track, central bank data showed on Monday.
The central government has unleashed another round of property tightening measures. This time it is focusing on mortgage lending terms: the mortgage interest discount for first-time homebuyers has been reduced; the discount for second-time homebuyers has been abolished and the down payment requirement raised to 40%; and the rate for third-time buyers is being left to the banks' discretion with down payments raised to 60%.
Predictably, sales volumes in both primary and secondary markets have collapsed. But no one is panicking, not even those who live off the property bubble. Why? Aren't they supposed to be terrified of the government's crackdown?
It seems we have seen this movie before. China has launched property-tightening measures several times but it relaxed them just when they began to bite. The bottom line is that local governments, and the central government through them, depend very much on property for revenue. The market doesn't believe the government will cut off the hand that feeds it.
Local governments and developers are sitting on massive liquidity that they raised last year through land and property sales and borrowings, taking advantage of the "anything goes" window during the stimulus period. They seem to believe that the central government will change its mind before they run out of liquidity. So they are comfortable waiting and not cutting prices.
Cutting prices doesn't make sense if the government is expected to loosen policy again soon. The current lending terms effectively keep second- and third-time homebuyers out of the market. To sell, developers must cut prices to levels affordable to the buyers of first homes, who have low incomes and little wealth. All the players will play by the new rules only if the central government proves its credibility by maintaining the tightening policy until local governments and developers run out of money.
Contrary to the policies' intent, local governments are readying for another round of property inflation. Local governments have been using bank loans to resettle residents, and resettlement costs have skyrocketed since those being moved need enough compensation to buy properties at today's prices. Unless property prices rise considerably, local governments will end up losing money, which they cannot afford to do.
Resettlements played an important role in supporting demand for property last year. The overwhelming majority of end-user purchases probably came from resettled residents who used their compensation money for a down payment. Resettlement compensation is the biggest transfer of wealth from the government to the household sector since the privatization of public housing at low prices a decade ago. It is probably the most important government action supporting today's economy.
The positive elements of resettlement compensation come with two major negatives. First, it is using a form of leverage to support demand. Local governments borrow to pay the compensation packages, using the land as collateral. The resettled residents use the compensation as down payment for mortgage borrowing; so government debt becomes equity for mortgage debt. There is no real equity in the financing chain.
Second, the high compensation costs, though beneficial to the resettled residents, make local governments a player in further inflating property prices. China's economic policies have been favorable to the low-income class in the past few years through rural subsidies, agricultural land reform, and price controls for necessities. The resettlement policy is another element in the push to help them, but the costs are being borne by the middle class, whose most important expenditures — property, cars and education — are highly inflated. Indeed, China's property and car prices are among the highest in the world in absolute terms, and by far the highest relative to income. Unless policies change dramatically, the middle class squeeze will only get worse.
China's property market is a massive bubble. The stock of residential properties, developers' inventories, and land that local governments have pledged to banks may exceed by three times the gross domestic product. Rental yields in most cities are too low to cover depreciation costs. In major cities, the price-to-income ratio, a measure of housing affordability, is routinely above 20, which means that it would take an average mainlander 20 years to buy the average property using their total income. The bubble can still continue because China's banking system has plenty of liquidity – thanks partly to hot money and because local governments have many levers to channel bank liquidity into the market. But the longer the bubble lasts, the more damage it will do to the economy.
The stability of a modern society depends on its middle class being in the majority and content with its situation. The high land-price policy is a form of tax on the middle class, which will slow its growth. China may become a country with a small group of the super-rich, a vast lower class with no property, and a small middle class. Such a social structure would not be good for long-term stability.
The key to a sensible property policy is to reform the fiscal structure. First, government spending, mostly in fixed investment, should be curtailed. China doesn't need to build everything at once. Last year, the sum of government fiscal revenues, central and local government borrowings, and expenditures by state-owned enterprises probably exceeded half of the GDP. Could the government sector spend so much efficiently? Shrinking the government sector should be a top priority for the nation's future.
Second, the government sector still owns assets worth more than the entire GDP. The government should give it to the people to expand the middle class – a move that would support consumption, incomes and tax revenue. Shrinking the government and giving wealth to the people are the policies necessary to make growth balanced and sustainable. The rapid expansion of the government sector only increases its need for revenue and the incentive to inflate the property bubble. Without credible government reforms, property tightening is not credible.
One more point to note is that most of the bears assume Beijing will be sitting around doing nothing. Please note that bank lending by Chinese banks fell 43 per cent in the first quarter from a year earlier as the government winds down its stimulus and tries to cool a credit boom while keeping its recovery on track, central bank data showed on Monday.
Banks lent 2.6 trillion yuan (S$529.7 billion) in the January-March quarter, the People's Bank of China said on its Web site. That compared with 4.6 trillion yuan in loans in the first quarter of 2009 as banks ramped up loans for construction and other projects as part of a 4 trillion yuan stimulus. The figures indicated the central bank's efforts to prevent runaway lending and restore financial discipline in China's state-owned banking industry might finally be taking hold, lessening the need to raise interest rates to curb inflation.
The tightening on lending reflects worries that many of the loans issued in the past year or more may go sour and that easy credit is fueling wasteful investments. On Sunday, the chairman of the China Banking Regulatory Commission, Liu Mingkang, announced an aggressive plan to assess the safety of loans made to financing entities set up by local governments to invest in real estate, infrastructure and other projects.
Another Piece On China Bubble
Edward Chancellor is a member of the asset allocation team for Boston-based GMO, is a financial historian and bubble expert.
Beijing knows the unbalanced lending to state firms and municipal councils, and is trying to redress the problem, albeit a tad late. Yes, China has been building a lot more infra than is necessary. Yes, there will be some white elephants for a while. Yes, there is a property bubble. No, I don't think there is a stock market bubble (refer to previous posting on China bubble).
Owing to the fact that its a relatively closed economy, it can sustain gaps in supply and demand much better than other more open economies. Of course, Beijing will have to rein in their excessive capital stimulus one day, nobody wants to stare at massive highways which nobody uses, or townships that is half filled. China has a window whereby it can still do what it is doing without much drastic repercussions - the caveat being that the global economy must be back to normal growth by 2012 or earlier. Past that, China really cannot keep up with the GDP growth numbers. As there are few safety nets, unemployment and social unrest could get dirty if Beijing even halves their annual stimulus package.
One more point to note is that most of the bears assume Beijing will be sitting around doing nothing. Please note that bank lending by Chinese banks fell 43 per cent in the first quarter from a year earlier as the government winds down its stimulus and tries to cool a credit boom while keeping its recovery on track, central bank data showed on Monday.
His 1999 book, Devil Take the Hindmost: A History of Financial Speculation, examined past speculative manias. Perhaps you've read articles comparing the tech boom and 1990s' bull market to tulipmania in 1630s' Holland.
The difference is that Chancellor was making that comparison before the tech bubble burst, some years before Alan Greenspan claimed it was futile trying to predict bubbles at all.
Chancellor's timing may have been fortuitous. To accurately predict something once might mean little. To repeat the feat perhaps means something more.
His next major piece - Crunch time for credit: An enquiry into the state of the credit system in the United States and Great Britain - included this prescient paragraph:
''The growth of credit has created an illusory prosperity while producing profound imbalances in the British and American economies...When credit ceases to grow, the weakened state of these economies will become apparent.''
That report was written in 2005, years before the credit bubble burst. Chalk two up to Chancellor.
Third time lucky?
He's now turned his attention to China, a fertile ground for his fertile mind. Released last week on the GMO website, China's Red Flags is split into two parts.
Crisis checklist
Section one identifies speculative manias and financial crises, offering a checklist for those trying to identify bubbles in advance of their bursting. Chancellor offers 10 criteria for what he calls ''great investment debacles'' over the past 300 years (the report explains each in far more detail);
1. A compelling growth story;
2. A blind faith in the competence of authorities;
3. A general increase in investment;
4. A surge in corruption;
5. Strong growth in money supply;
6. Fixed currency regimes, often producing inappropriately low interest rates;
7. Rampant credit growth;
8. Moral hazard;
9. Precarious financial structures;
10. Rapidly rising property prices;
Although all these criteria need not be present in order for a bubble to be present, you can see where Chancellor's heading: not-so-subtly steering readers towards his own conclusion. In section two he takes each factor and applies it to the case of China.
Ponzi scheme
His conclusion is alarming; The very factors that have allowed China to grow so rapidly over the past few years despite the global slowdown - an investment boom, a credit boom, massive increases in money supply, moral hazard and risky lending practices - are all factors that investors and the mainstream press feel they can safely ignore because China is growing so rapidly.
After the past few years, we should all understand the potential negative implications of such major imbalances. But there seems to be general agreement that a ``build it and they will come'' approach is warranted in China because it keeps growing rapidly. There's a Ponzi-like element to the circularity.
Chancellor is concerned that China's high GDP growth is no longer a function of impressive natural growth. Instead, growth is being engineered to achieve high GDP numbers. It's producing a system that's unsustainable and prone to collapse.
This, in essence, is Chancellor's argument:
- Investors are adopting an uncritical attitude to China's growth forecasts;
- Because of the way local officials are incentivised, it's likely that migration of the population from country to city is much further along than the official numbers suggest. So when you hear of another 350 million internal migrants arriving in cities by 2025, many of them are actually already there;
- Hence, future productivity growth will be much more reliant on efficiency gains than urbanisation. China's record in this area isn't at all strong;
- Beijing imposes GDP growth targets on local governments. Thus, ``GDP growth is no longer the outcome of an economic process, it has become the object''. `When the allocation of resources, whether at the corporate or national level, becomes all about ``making the numbers'' then poor outcomes are to be expected';
- In 2009, Chinese fixed asset investment contributed 90% of total economic growth (an incredible statistic and a natural consequence of the previous point);
- Significant over investment is present in many areas. For example, capital spending in the cement industry increased by two-thirds despite capacity utilisation running at an estimated 78%;
- The efficiency of investment (incremental GDP growth for each additional unit of investment) is trending downwards towards wasteful levels;
- Interest rates have been kept way too low for decades, sparking economic growth but also imbalances and bubbles;
- China's enormous foreign exchange reserves are not necessarily a plus. As Michael Pettis pointed out recently, only two countries have previously accumulated such large foreign reserves relative to global GDP - the United States in 1929 and Japan in 1989. Oh dear;
- The Chinese stockmarket is in bubble territory. Last October, a new Nasdaq-style exchange opened in Shenzhen with 28 new listings. The minimum price rise (the laggard of the 28) rose 76% on the first day. Price/earnings ratios averaged 150;
- The residential property market also appears to be in a bubble. In Beijing, the house price to income ratio has climbed to more than 15 times, versus 9 times in Tokyo in 1990;
Beijing knows the unbalanced lending to state firms and municipal councils, and is trying to redress the problem, albeit a tad late. Yes, China has been building a lot more infra than is necessary. Yes, there will be some white elephants for a while. Yes, there is a property bubble. No, I don't think there is a stock market bubble (refer to previous posting on China bubble).
Owing to the fact that its a relatively closed economy, it can sustain gaps in supply and demand much better than other more open economies. Of course, Beijing will have to rein in their excessive capital stimulus one day, nobody wants to stare at massive highways which nobody uses, or townships that is half filled. China has a window whereby it can still do what it is doing without much drastic repercussions - the caveat being that the global economy must be back to normal growth by 2012 or earlier. Past that, China really cannot keep up with the GDP growth numbers. As there are few safety nets, unemployment and social unrest could get dirty if Beijing even halves their annual stimulus package.
One more point to note is that most of the bears assume Beijing will be sitting around doing nothing. Please note that bank lending by Chinese banks fell 43 per cent in the first quarter from a year earlier as the government winds down its stimulus and tries to cool a credit boom while keeping its recovery on track, central bank data showed on Monday.
Banks lent 2.6 trillion yuan (S$529.7 billion) in the January-March quarter, the People's Bank of China said on its Web site. That compared with 4.6 trillion yuan in loans in the first quarter of 2009 as banks ramped up loans for construction and other projects as part of a 4 trillion yuan stimulus. The figures indicated the central bank's efforts to prevent runaway lending and restore financial discipline in China's state-owned banking industry might finally be taking hold, lessening the need to raise interest rates to curb inflation.
The tightening on lending reflects worries that many of the loans issued in the past year or more may go sour and that easy credit is fueling wasteful investments. On Sunday, the chairman of the China Banking Regulatory Commission, Liu Mingkang, announced an aggressive plan to assess the safety of loans made to financing entities set up by local governments to invest in real estate, infrastructure and other projects.
Sunday, 11 April 2010
Dude, Where's My Planet??!!
Where in the world are we, what is our significance on earth, when you consider how small we are on earth, and then look at how small the earth is next the planets we know, then consider the earth next to the sun, and have a look at Antares and Betelgeuse .... we are next to nothing but at the same time we may be tiny and humbled but we should also realise that we all just need to make the world a better place when we leave than when we arrive ... we may be insignificant and even irrelevant in the planetary system ... but we should lead a life of significance and relevance for ourselves and those around us
Saturday, 10 April 2010
Ringgit Riding On Yuan's Coattails
To those who pooh-pooh ringgit unofficial ties with the Chinese yuan, the last two weeks have showed that they were dead wrong. Palm oil futures have risen by about 23 percent over the past six months to yesterday as drier-than-usual weather in Malaysia, the second-largest producer after Indonesia, curbed yields. The U.S. dollar got smashed down against the South Korean won, Indonesian rupiah and Taiwan dollar, not to mention the yuan and the ringgit. The Malaysian ringgit, considered a good proxy for the yuan, has risen 4 percent against the dollar in the past two weeks. The Indian rupee has gained 3 percent.
A firmer ringgit yields more benefits to Malaysia than the things we lose out on competitiveness.
A firmer ringgit yields more benefits to Malaysia than the things we lose out on competitiveness.
The ringgit strengthened 1.8 percent this week to 3.1900 per dollar in Kuala Lumpur, according to data compiled by Bloomberg. It reached 3.1860 yesterday, the strongest level since May 2008. India’s rupee climbed 1.4 percent to 44.2938 and South Korea’s won appreciated 0.7 percent to 1,118.15.
Equity funds focused on developing economies attracted $3.27 billion in the week to April 7, taking net inflows for the year to $10.8 billion, according to Cambridge, Massachusetts- based research firm EPFR Global, which tracks funds with $13 trillion of assets globally. The Asia Dollar index, which monitors the performance of the region’s 10-most active currencies, climbed 0.6 percent this week.
April 7 (Bloomberg) -- China is considering allowing the yuan to trade against the Russian ruble, South Korean won and Malaysian ringgit to promote its use in cross-border trade, an official at the China Foreign Exchange Trade System said.The People's Bank of China is investigating the possibility of offering new currency pairs, said an official at the Shanghai-based interbank exchange, a subsidiary of the central bank. He asked not to be identified as authorities have yet to make a final decision. Traders now can buy or sell the yuan against the dollar, the euro, the yen, the Hong Kong dollar and the British pound.
China is seeking greater use of its currency to reduce reliance on the U.S. dollar after Premier Wen Jiabao said last month he is “worried” about holdings of assets denominated in the greenback. From July, the government started allowing companies in Shanghai and four cities in the southern province of Guangdong to use yuan in cross-border trade with Hong Kong, Macau and members of the Association of Southeast Asian Nations.
President Barack Obama will keep pressing China to end the yuan’s 21-month-old peg to the dollar and may bring up the topic when he meets Chinese President Hu Jintao next week, spokesman Robert Gibbs said yesterday. Executives at Chinese banks have backed a stronger currency to allow it to play an increased role in global trade and spur growth in financial markets.
China’s currency has been held at around 6.83 to the dollar since July 2008, after appreciating 21 percent in the previous three years. Twelve-month non-deliverable forwards traded at 6.6355 per dollar, reflecting bets the currency will climb 2.9 percent from the spot rate of 6.8254 in the coming year.
U.S. Treasury Secretary Tim Geithner last weekend announced the postponement of the April 15 deadline for an annual foreign-exchange policy review, which may have resulted in China being labeled a currency manipulator. He said meetings over the next three months will be “critical” to bringing policy changes that lead to a more balanced global economy.
“They’re becoming more open to the world, and with that, you’re going to see the currency take on a broader role internationally,” Geithner said in an interview with Bloomberg Television to be aired today. “That’s a healthy, necessary adjustment.”
Expectations that China’s currency will appreciate drove yuan trade settlements to 7 billion yuan ($1 billion) in the first two months of this year, almost twice the 3.6 billion yuan in the second half of 2009, Zhang Yanling, vice chairman of Beijing-based Bank of China Ltd., the nation’s biggest foreign- currency lender, said in a March 19 interview.
“If the yuan is expected to be a strong currency, neighboring countries will prefer to hold the yuan instead of the dollar,” she said.
Since December 2008, China has set up 650 billion yuan worth of swap agreements with Indonesia, Malaysia, South Korea, Hong Kong, Belarus and Argentina, broadening access to the yuan. The central bank has also proposed expanding the use of International Monetary Fund depository receipts in reserves instead of dollars.
“They’re trying to encourage yuan trade settlement, so it would make sense to commit to more trading pairs,” said China chief economist at Royal Bank of Scotland Group Plc. “It would be a natural part of the growing convertibility of the yuan and a step towards widening the use of the yuan. Convertibility of the yuan is a long-term change, but China is taking all the right steps.”
China’s dollar purchases to maintain the currency link have driven currency reserves to $2.4 trillion. Chinese investors held $889 billion of Treasuries in January, the biggest overseas holdings of such debt.
Check Out This Site For Great Music
I have a good relationship with Leslie Loh. His website sells all albums produced by his label as well as albums that they like. It is very basic. It doesn't not have shopping cart of e-commerce engine.
Buyers just basically shoot them an email. Payment can be made via maybank2u and other internet banking, as well as paypal.
Every album has a music player where 6 edited songs are posted for sampling. They also link to the artiste's own website or blog.
Pop pop music is an international audiophile music label based in Kuala Lumpur, Malaysia. It has distributors in Singapore, Thailand, Indonesia, Taiwan, Hong Kong and Mainland China.
pop pop music
"i feed on music, what do you feed on?"
Tay Cher Siang Winnie Ho
http://www.poppop-music.com/
Buyers just basically shoot them an email. Payment can be made via maybank2u and other internet banking, as well as paypal.
Every album has a music player where 6 edited songs are posted for sampling. They also link to the artiste's own website or blog.
Pop pop music is an international audiophile music label based in Kuala Lumpur, Malaysia. It has distributors in Singapore, Thailand, Indonesia, Taiwan, Hong Kong and Mainland China.
Audiophile music is a genre of music recorded in high-fidelity and high-definition format, aimed at the audiophiles or Hi-Fi enthusiasts. Besides producing albums of high recording quality, pop pop music aims to revolutionize audiophile music by expanding its supporters and market beyond the audiophile community.
To do this, pop pop music has a 2-pronged strategy. First, it aims to crossover audiophile music to the pop music lovers, making them realize how great it is if good pop music is recorded in a high-end audiophile approach. Second, vice versa, it aims to bring contemporary pop elements to audiophile music - a genre long regarded as boring and musically bankrupt - thus giving audiophile music more soul and commercial appeal.
The pop pop's "house " sound, in audiophile jargon, is sumptuously analogue, natural, real and highly transparent. This sound has stratospheric highs, burnish and palpable midrange and tactile lows. It has a gorgeous tone, full of details and sensitive nuances - this is the signature sound of all albums produced by the pop pop music label.
Malaysian artistes currently collaborating with our label include: Roger Wang, Gina Panizales, Tay Cher Siang, Lydia Chew (Chooi Ling), Winnie Ho and Jeffrey Lim (Ah Fei).
leslie loh +6012-2083790
pop pop music
"i feed on music, what do you feed on?"
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http://www.poppop-music.com/
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