Monday, November 28, 2011

Negative Local Press

Last week's HK local press had a lot of negative headlines.

This is in-line with several smaller and value oriented fund managers I know who invest in small and mid-cap Asian stocks. As expected several of them are seeing more buying opportunities, and/or running high net exposures (i.e. buy when others are fearful, sell when others are greedy).
Below are some SCMP ( headlines found in last Monday's edition:

  • "Warning on Risk of Property Bubble - Hong Kong's Finance Chief says the price of flats has not fallen to a satisfactory level - but he does not say what they should be, or if there will be more cooling measures"
  • "Currencies - Fears Capital is Fleeing Mainland - Foreign exchange purchases enter negative territory for the first time in four years"
  • "Global economic conditions remain grim, and ensuring economic recovery is the priority", China Vice-Premier Wang Qishan 
  • Asia - "Regional Tale of Gloom and Doom - Economic data tells a story of weak growth, and expectations are that things will only get worse (See below) 
  • "Like a Ton of Bricks - Hong Kong Property Prices Could Be Poised For A Large Fall In Value" - (28 Nov 2011 SCMP

Regional tale of gloom and doom

Economic data tells a story of weak growth, and expectations are that things will only get worse

Agencies in Tokyo, Seoul, Bangkok and Singapore
Nov 22, 2011
 Email to friend Print a copy Bookmark and Share

Economic data from Japan, South Korea, Thailand and Singapore point to a global economy that may be weakening more sharply than expected.
"Things are going to get worse before they get better," said Vishnu Varathan, a Mizuho Corporate Bank economist in Singapore. "Export growth will slow across Asia and we may see financial shocks coming through. Asian policymakers are going to become stimulatory all over again."

A record of the Bank of Japan's October 27 meeting released yesterday showed that one board member favoured adding 10 trillion yen (HK$1.01 trilllion) in asset purchases, and Chinese Vice-Premier Wang Qishan said his nation must adopt a more "forward looking" and flexible monetary policy.
Separate data showed that Japan's exports fell at the fastest pace in five months in the year to October as a strong yen and sputtering global growth weighed on the recuperating economy.
Although Japan's economy expanded 1.5 per cent in the previous quarter, rebounding from recession triggered by the March earthquake and nuclear crisis, it is expected to slow sharply in October-December. Severe floods in Thailand, a major manufacturing base for many Japanese exporters, are expected to add to global headwinds faced by the world's third-biggest economy.
Japan's exports fell 3.7 per cent last month from a year earlier, far more than a 0.3 per cent dip forecast, and follows the central bank's warning that government debt woes in Europe were already hurting Japan and emerging economies.
The October fall was the biggest drop since a 10.3 per cent fall in May, with shipments of semiconductors and other electronic goods falling due to strength in the yen.
South Korean customs agency data showed yesterday that exports grew just 2 per cent in the first 20 days of this month from a year ago, while imports rose 3 per cent.
In Bangkok, the government yesterday said it had cut its forecast for economic growth this year to 1.5 per cent because of the floods.
The flooding in Thailand has also disrupted supply chains of Japanese car and electronics companies. Toyota, Asia's largest carmaker, reported that its profit fell 19 per cent in the third quarter.
Singapore yesterday lowered its forecast for non-oil domestic exports, estimating overseas shipments to rise 2 per cent to 3 per cent this year, lower than a forecast of 6 per cent to 7 per cent.
The government also said the economy could contract in the fourth quarter and growth next year was likely to slow due to the weakness in the Western economies.
"This [2012] forecast is based on current known external weaknesses. Should a recession or a full-blown financial crisis in the advanced economies occur, growth could come in lower," said Ow Foong Pheng, permanent secretary at Singapore's Ministry of Trade and Industry.
Reuters, Bloomberg

No comments:

Post a Comment