Vietnam’s local sovereign bonds are set for their biggest monthly loss since November amid a run of failed auctions and speculation authorities will devalue the dong. The yield on the three-year notes rose 44 basis points in April to 5.56 percent, according to a daily fixing from lenders compiled by Bloomberg. Vietnam’s export competitiveness has been eroded as the dong only weakened 2.2 percent in the past year, compared with declines of 10 percent in Indonesia’s rupiah and Malaysia’s ringgit. HSBC Holdings Plc predicts a devaluation, which would be the third in less than a year, to support overseas sales as the government seeks to boost growth to 6.2 percent in 2015 from 5.98 percent last year. Sovereign bond auctions are failing because the government has only offered tenors of five years or more, rather than the more popular shorter-dated securities, according to Ho Chi Minh Securities Corp. "Big players in the bond market, like the big banks, are migrating … [Read more...] about Devaluation talk saps demand for Vietnam bonds as auctions fail
Aberdeen property market
The skyline of Hong Kong is seen through a fence at the Peak in Hong Kong in this September 10, 2014 file photo. Photo: Reuters When Xi Jinping wanted to deliver a political message to Hong Kong as protesters demanding free elections were threatening to take to the streets, he summoned the tycoons who dominate the city’s economy. The words from the Chinese leader at the September 22 meeting in Beijing were uncompromising but not surprising. He would not entertain any demand for full universal suffrage in Hong Kong, according to two people who attended. Just six days later, pro-democracy activists made good on their threat, unleashing more than two months of street demonstrations. But while Xi’s message that day in the Great Hall of the People failed to deter the protesters, in speaking directly to the city’s business and professional elite he was showing where Beijing believes real power in Hong Kong resides. And it is here, in the city’s business sector, … [Read more...] about Beijing keeps firm grip on Hong Kong economy
The world's least-developed markets are proving the most resilient to the three-week selloff that has erased $1.9 trillion of global equity value. While the MSCI All-Country World Index of shares in advanced and emerging nations has lost 3.2 percent since May 22 amid speculation the Federal Reserve will pare monetary stimulus, the MSCI Frontier Markets Index returned 0.7 percent including dividends. Thirteen of the 15 top-performing stock gauges are in frontier countries, where the mean market value of $49 billion compares with almost $19.5 trillion in the U.S. Fewer links to international capital markets have shielded smaller nations from a retreat that dragged down 52 of 72 equity indexes tracked by Bloomberg since May 22. Stocks in frontier markets also got a boost from the transfer of power between civilian governments in Pakistan and a rebound in Dubai real estate. Advance Emerging Capital and Morgan Stanley Investment Management are betting on more gains. "Frontier equities … [Read more...] about Frontier stocks beat world on Dubai, Vietnam growth
The government is likely to heed advice from a parliamentary commission to cut interest rates further, hoping to meet its credit growth target, but analysts warn an increase in lending is not a given. In a report published Tuesday, the National Financial Supervisory Commission under the National Assembly expressed concern over the slow growth of credit, saying Vietnam will find it hard put to meet the target of 12 percent set for this year. It said that as of April 29, credit had increased by just 2.11 percent from the end of last year, meaning that to meet the year's credit growth target, it would have to increase by at least 1.25 percent every month. This is an "extremely difficult" mission, given that local businesses' capacity to absorb funds is still limited, the properly market is stagnant and the global economy is weak as well, the commission said. Therefore, it is essential that the lending rate is reduced to around 10 percent a year so businesses are encouraged to take … [Read more...] about Can further rate cut boost lending?
Lovely Creations Corp., the supplier of talking teddy bears to Wal-Mart Stores Inc., may move some of its 800 Chinese assembly jobs to Vietnam because the currency is eroding profits. "The yuan's appreciation would mean we lose our profit margin," said Poh-Heng Toh, general manager at Lovely Creations, a Taipei-based manufacturer with factories in the coastal provinces of Guangdong and Zhejiang. "We also have higher labor costs in China because, as the economy develops, workers demand better lives while our end customers like Wal-Mart won't raise what they pay us." … [Read more...] about Wen conflicted as yuan rise moving Teddy-bear jobs to Vietnam