financializer news A weblog highlighting financial topics making news in the international media.

a-share market: The sources said blue-chip manufacturers listed on China's A-share market with a clear international development strategy are likely to be selected as the first to issue D shares, according to Global Times China. More companies will be encouraged to trade as the D-share market develops. The proposal is now in the hands of the Frankfurt-based China Europe International Exchange CEINEX . The CEINEX is an off-shore yuan-denominated assets trading center that was established in December 2015 by the SSE, German Borse Group and the China Financial Futures Exchange. Companies will need approval from both Chinese and German regulators to issue D-shares, the sources added. (news.financializer.com). As reported in the news.

allocation fund: GMO has usually rebounded, with the 78-year-old investor earning acclaim with asset-bubble calls ahead of Wall Street busts in 2000 and 2008, according to Market Watch. Lately, though, the firm is going through one of its roughest periods. Grantham, co-founder and chief investment strategist of Boston money manager Grantham Mayo Van Otterloo & Co., has been out of step with the market several times during the firm's four decades. Assets under management have tumbled to about 80 billion, according to someone close to the matter, down from a peak of 124 billion in June 2014. Bearish about what it sees as high valuations of U.S. stocks, GMO's flagship mutual fund, the GMO Benchmark Free Allocation fund, has largely missed out on the latest rally in U.S. stock indexes SPX, 0.00%DJIA, -0.16% . An expanded version of this report appears at WSJ. Popular at WSJ Why Apple's critics are right this time Health-law taxes complicate GOP's repeal strategy More from Market Watch Best of CES 2017 Gadgets Galore Bicyclist John Howard's 1985 Land-Speed Record Speed Cyclist Denise Mueller's Record-Setting Run An acting chief executive has been running GMO for more than six months and the firm fired about 10% of its workforce, cutting some 65 jobs, in June last year. (news.financializer.com). As reported in the news.

board position: In a letter dated Jan. 5 and made public Saturday, Mattis said he would resign from the board and temporarily recuse himself from matters related to the company, the fifth-biggest U.S. defense supplier with 10 billion in contracts last year, according to The Japan Times. For a period of one year after my resignation, I will not participate personally and substantially in any particular matter involving specific parties in which I know General Dynamics is a party or represents a party, unless he is authorized to participate, Mattis said. James Mattis will step down from his board position at General Dynamics Corp. and give up unvested equity awards if confirmed as President-elect Donald Trump's defense secretary, according to a letter submitted to the Defense Department's ethics lawyer. Federal regulations allow for such authorization when it's determined that the government's interest in an official's participation outweighs any reasonable concern related to ethics questions. Mattis currently holds unvested stock options and restricted shares in General Dynamics worth about 523,000 as of Friday's close. Mattis also said he would forfeit all restricted stock and stock options in the company that have not, as of the date of my appointment, vested according the normal schedule for vesting. (news.financializer.com). As reported in the news.

charts: My motivation in writing this column is to nudge you to take five unpopular, but prudent, actions today, according to Market Watch. But before I do that, let's look at two charts and understand the concept of over-owned. Human nature as it is, investors often find it difficult to take unpopular actions. Two charts The charts compare five currently over-owned stocks in five sectors of the S&P 500 Index SPX, 0.00% The first is a daily chart of the period since Donald Trump's election. Please click here for the annotated chart comparing five popular stocks in five popular sectors since Donald Trump's election. The second is a monthly chart since the start of the current bull market. (news.financializer.com). As reported in the news.

china approaches: Although that may not sound like a lot, how China approaches that hoard may be almost as consequential for conservation as the ban on trade, according to The Japan Times. Nowhere is demand for ivory higher than in China, where it's been used in handicrafts for thousands of years. For the Chinese government, though, it creates a strange problem what to do with its 40-ton stockpile of ivory, worth about 150 million. Much of the trade is regulated, with the government occasionally allowing imports of seized and stockpiled ivory that is sold through a network of authorized workshops and dealers. Black market supplies, which are sometimes laundered through the official system, may be much larger. Collectively, government and legal private stockpiles are now estimated to be worth about 600 million. (news.financializer.com). As reported in the news.

eu capitals: Writing on his blog, Grillo said his party was in talks with the Alliance of Liberals and Democrats for Europe ALDE and asked 5-Star members to back the initiative in an online ballot, according to The Japan Times. ALDE is headed by former Belgian prime minister Guy Verhofstadt. If the surprise switch goes ahead, it would see 5-Star enter mainstream European politics and move away from the anti-system fringes, a shift that might reassure other EU capitals that have grown uneasy about its rising popularity. He is a keen European federalist and his strong, pro-EU views would seem at odds with the euroskeptic 5-Star, which has previously ridiculed the liberal leader. The anti-establishment 5-Star won 17 seats in the last European election in 2014 and linked up with Nigel Farage's UKIP, which had 22 seats, to form the so-called Europe of Freedom and Direct Democracy EFDD party. Grillo said he had also approached the Greens about a possible tie-up, but was rebuffed, adding ALDE was the only group willing to discuss an accord with his movement. (news.financializer.com). As reported in the news.

investment strategist: Alas, Icarus ignored his father's warnings and flew too close to the sun, melting his wings and plunging back to earth, according to Market Watch. It is a narrative that Bank of America Merrill Lynch analysts led by Michael Hartnett, the firm's chief investment strategist, want investors to heed. He was the son of Labyrinth-designer Daedalus, who fashioned him a pair of feathery wings held together by wax. Hartnett & Co. in a research note dated Jan. 8, make the case that the so-called Trump rally named so because of the boost stocks have enjoyed on the promise of the president-elect Donald Trump's policies that appear to be pro-business, light on regulation and a boon for equities markets could see more upside in the first half of 2017. The Dow Jones Industrial Average DJIA, -0.16% already has enjoyed an 8.5% rise since the U.S. presidential election, while the S&P 500 SPX, 0.00% and the Nasdaq Composite COMP, 0.36% indexes both have gained more than 6% during that period. But they warn that after a minor speed bump this month and next, stocks and commodities could rise another 10%. After that, the market could be primed for a significant downturn, they said. (news.financializer.com). As reported in the news.

state administration: The recent decline of the yuan is a challenge, but the impact is not significant because we innovate, said Lee, vice director at Beier Machinery Group from Zhangjiagang Economic and Technological Development Zone in Jiangsu Province, according to Global Times China. The yuan or renminbi lost 6.6 percent against the dollar in 2016. Currency fluctuations are major challenge for companies whose exporting and importing volumes dictate their pace of doing business and this applies for Chinese producers with ample business activities overseas in particular. Chinese foreign exchange reserves stood at about 3.01 trillion US dollars last month, down from about 3.05 trillion in November, the State Administration of Foreign Exchange SAFE said, citing figures from the central bank. We catch up with existing clients and we look for new customers, said Lee. We exhibit for the fourth time at the Arabplast in Dubai and we have customers in all 22 Arab countries. (news.financializer.com). As reported in the news.

chinese investors: Chinese firms should also seize the opportunity and commit to building its core competitive strength to climb up the global automotive value chain amid an industry supply chain restructuring worldwide, according to Global Times China. Last week, Ford announced it was scrapping a plan to build a 1.6 billion plant in Mexico and instead would invest 700 million into an existing plant in Michigan. Instead of mourning the loss of the US carmaker, Mexico should seek greater partnership with China and offer incentives to Chinese investors to attract them to the country. The move will certainly impact Mexico's economy which relies heavily on US investment and exports to the US market. But such a situation does not need to be the death of the Mexican auto industry. To rub salt in the wound, US President-elect Donald Trump has threatened to slap a hefty border tax on Toyota and General Motors cars made in Mexico for the US market. (news.financializer.com). As reported in the news.

korean side: The statue is one of a number in South Korea representing those forced to provide sex for Imperial Japanese troops before and during World War II. Japan euphemistically refers to them as the ianfu, or comfort women, according to The Japan Times. According to media reports, the one in Busan was erected by protesters on the anniversary of the December 2015 bilateral agreement, the text of which only mentions the more famous statue outside the Japanese Embassy in Seoul. The South Korean side should show its sincerity, the prime minister said on a TV program aired Sunday, referring to the golden statue of a seated young girl installed late last month outside the Japanese Consulate in Busan. Abe said on an NHK program recorded Friday that South Korea should carry out the agreement whether its leadership changes or not, as this is a matter of credibility. He will return to Japan for about a week, which is shorter than the 12-day recall of former Ambassador Masatoshi Muto in 2012, when Tokyo protested then-President Lee Myung-bak's visit to a pair of disputed rocks in the Sea of Japan, a source close to bilateral relations said. Japanese Ambassador to South Korea Yasumasa Nagamine will return home temporarily Monday in protest of the Busan statue, the Japanese Foreign Ministry said Sunday. (news.financializer.com). As reported in the news.

saudi arabia: Asif said the decision was taken in consultation with the Pakistani government, according to Deutsche Welle. For many in Pakistan, General Sharif, who retired in November last year, was a competent military chief. The alliance was formed by Saudi Arabia to deal with conflicts in the Middle East, particularly to quell the Iran-backed Houthi insurgency in Yemen. He not only acted against terrorists but was also resolute against alleged corruption in the country. The general had taken over the reins from Ashfaq Parvez Kayani in 2013. General Sharif's supporters were hopeful that Prime Minister Nawaz Sharif would extend his term as the military head. (news.financializer.com). As reported in the news.

shanxi province: But experts noted that the policy will likely be temporary, and the government remains committed to its goal of opening up China's capital account, according to Global Times China. A bank employee counts US dollars on Wednesday in Taiyuan, capital of North China's Shanxi Province. Investors and companies said they are unsure how the new rules will affect them specifically, though pessimism prevails. Photo CFP The Chinese government has rattled the market by releasing a set of new rules restricting foreign exchange purchasing at the beginning of 2017, but it seems investors and market institutions still need time to digest the changes. In a statement published on its website on December 31, 2016, the State Administration of Foreign Exchange SAFE stressed that it is improving the application process for foreign exchange purchasing. The government just launched the rules, and we don't know how they will specifically affect us, said a real estate broker based in Manhattan, on condition of anonymity. (news.financializer.com). As reported in the news.

stock markets: Shanghai-based Haitong Securities predicted that investors will put 2.48 trillion yuan 360 billion into the domestic stock markets and take out 1.86 trillion yuan in 2017, according to a report by the Securities Times on Saturday, according to Global Times China. Some brokers are optimistic about domestic shares in 2017, and have plans to invest more money into the market, the report said. The benchmark Shanghai Composite Index slipped 0.35 percent to 3,154.32 points on Friday, cutting the week's gain to 1.63 percent, which was driven by stocks related to State-owned enterprise reform and the defense sector. Meanwhile, the central government has introduced a new set of rules for foreign currency purchases, which might curb investment in overseas real estate or some kinds of insurance, according to a report by the Sichuan-based newspaper Finance and Investment on Saturday. The blue-chip CSI 300 index fell 0.6 percent on Friday to 3,347.67 points, but still gained 1.14 percent for the week. Some investors might consider investing more money into stocks, the report said, which might gradually push up major indexes. (news.financializer.com). As reported in the news.

utility investors: They're happy to invest wherever they see value or they can gain a foothold, said Andrew Shepherd, who follows the global utility industry for BMI Research, according to The Japan Times. Flush with cash and willing to tolerate risks that put off older rivals, CTG and other state-owned utilities including State Grid Corp., the world's biggest power supplier, are expanding abroad in search of new revenue sources as economic growth and electricity demand at home cool. State-owned China Three Gorges Group is spending heavily to buy or build hydro, wind and solar projects at a time when Western utility investors are pulling back and President-elect Donald Trump's pledge to revive coal use has raised doubt about U.S. support for renewables. A decade ago, they built dams and power plants in Asia and Africa. They are providing welcome investment in troubled markets such as Brazil and southern Europe. Now they also are taking on a longer-term role as operators of power companies in Europe and Australia and are looking at the U.S. market. (news.financializer.com). As reported in the news.

abuse praise: It could lead to an explosion of public debt and ultimately cause a serious loss of confidence and a deep recession, Columbia University professor Edmund Phelps was quoted by Bloomberg as saying, according to Global Times China. At the annual American Economic Association meeting held in Chicago, Phelps also criticized Trump's singling out of individual companies for abuse and praise, saying such interference could prevent newcomers from entering markets and bringing with them much-needed innovation, the report said. Trump's plans for big tax cuts and spending increases pose risks. While other presidents have run big budget deficits in the past, they depended on foreign purchases of US debt to do so. There is a broad consensus that the kind of policies that our president-elect has proposed are among the policies that will not work, Columbia University professor Joseph Stiglitz said. Now, with Trump threatening to renegotiate US trade agreements and shift to an America First policy, the willingness of foreigners to keep buying US government securities can't be taken for granted, said Roger Myerson from the University of Chicago. (news.financializer.com). As reported in the news.

coast: The trial, which will last months, will focus on Ivory Coast's postelection civil war in 2010-11. 28.01.2016 Ivory Coast's Ouattara enacts new constitution, promises peace and stability Ouattara said the new constitution would help overcome divisions in the country that had led to civil war in the past, according to Deutsche Welle. While it overwhelming passed in a referendum, voter turnout was low. 08.11.2016 Violence erupts in Ivory Coast as ex-soldiers demand pay Gunfire was heard at three military camps in Ivory Coast as former fighters asked for back pay and bonuses. The president has received praise for the country's economic progress but criticism for his political record. 18.12.2016 Prosecutor Gbagbo unleashed 'unspeakable violence' in Ivory Coast Laurent Gbagbo, the first African head of state to stand trial for war crimes in The Hague, has pleaded not guilty. The violence was similar to a 2014 strike where former rebels made similar demands. 06.01.2017 The apparent mutiny over higher wages and bonuses appeared to gain momentum on Saturday after gunfire erupted inside Ivory Coast's military headquarters and the compound housing the defense ministry. It's in the hands of the bad guys. There's a lot of shooting in the air inside the ministry of defense, a diplomatic source told Reuters. (news.financializer.com). As reported in the news.

dw correspondents: DW correspondents said voting was slow but peaceful. 07.12.2016 Gambia 'There is fear, according to Deutsche Welle. Everybody is fearful'In two weeks time, President Yahya Jammeh of Gambia faces a deadline to hand over power to his elected successor. He had long been seen as an aloof elitist, but now many Ghanaians hope the 72-year-old will be the one to fix the economy and create jobs. 09.12.2016 Ghana election tight but peaceful Ghanaians turned out in large numbers on Wednesday as President John Mahama faced off opposition frontrunner Nana Akufo-Addo in general elections. If he misses it, he faces the threat of a military intervention by regional ECOWAS forces. 05.01.2017 Ghana's newly elected President Nana Akufo-Addo took the oath of office before thousands of supporters gathered in Accra's Independence Square on Saturday. I'll not let the good people of Ghana down We will reduce taxes to recover the momentum of our economy. I pledged to do my best to move this country to a higher level of development, Akufo-Addo told the crowd in his inaugural address as head of state. (news.financializer.com). As reported in the news.

financial-services funds: That average result bested the S&P 500 index's SPX, 0.35% 3.82% fourth-quarter advance, according to Market Watch. The funds' 2016 total return of 10.81%, however, trailed the broad market's by about one percentage point. The 8,459 U.S. diversified equity funds that Lipper tracks whose assets total nearly 6.4 trillion returned 4.06%, marking the third straight quarterly gain for that broad category. Financial-services funds had the best return of all in the quarter, up 17.87%, helped by the U.S. Federal Reserve's decision last month to raise short-term interest rates by a quarter of a percentage point. Many of the stocks in financial-services funds also benefited from the view that they will be helped by lower corporate taxes, lighter regulation, and other policies favored by President-elect Donald J. Trump. Higher rates should help banks by improving their net-interest margin the spread between what they earn on assets, such as loans to clients, and what they pay on liabilities, such as deposits. (news.financializer.com). As reported in the news.

forex reserves: The 41.1-billion-USD drop was down from November's 69.1-billion-USD fall and marks the sixth straight month of falling forex reserves, according to Global Times China. Meanwhile, the country's gold reserves also dropped in December, falling by 1.9 billion US dollars. Foreign exchange reserves stood at about 3.01 trillion US dollars last month, down from about 3.05 trillion US dollars in November, the State Administration of Foreign Exchange SAFE said, citing figures from the central bank. The country's forex reserves fell by 319.8 billion US dollars in 2016, narrowing the drop compared with that in 2015. The central bank's effort to stabilize the Chinese yuan is the major reason for China's falling foreign exchange reserves in 2016, SAFE added. Forex reserves continued to drop in December as the People's Bank of China PBOC used them to balance the forex market and non-greenback currencies weakened against the US dollar, the forex watchdog said in one statement. (news.financializer.com). As reported in the news.

robert pavlik: Since banks provided earnings growth in the third quarter 8% earnings growth for the sector compared with 3.1% S&P 500, according to Fact Set data investors are eager to see on how banks plan to remain a driver of the economy as well as the stock market, according to Market Watch. The market is going to be expecting leadership going into the first quarter, said Robert Pavlik, chief market strategist at Boston Private Wealth, in an interview. Stocks ended the week sharply higher as the Dow Jones Industrial Average DJIA, 0.32% advanced 1% for the week but came up just short of touching the 20,000 mark; while the S&P 500 index SPX, 0.35% finished up 1.7%, and the Nasdaq Composite Index COMP, 0.60% rallied 2.6%, both closing at fresh records on Friday. But if they get cautious about a higher dollar or a rise in yields, you have to watch out for that. Probably the biggest boost will come from the financial sector, which is projected to see growth of 13.8% Caption outside of wrapper for normal article images That, however, will be helped by comparisons with unusually low earnings from both Goldman Sachs Group Inc.GS, 1.48% and American International Group Inc.AIG, 1.84% in the year-ago quarter, Butters said. Top banks reporting on Friday include Dow component J.P. Morgan Chase & Co.JPM, 0.01% along with Wells Fargo & Co.WFC, -0.25% and Bank of America Corp.BAC, 0.00% S&P 500 earnings for the fourth quarter are expected to grow by about 3% from the year-ago period, according to John Butters, senior earnings analyst at Fact Set. (news.financializer.com). As reported in the news.

securities cet: The 4.7 billion Pioneer fund, launched in February 1928, has a much less stellar performance history, but is under new management, according to Market Watch. And we can't ignore the very first mutual fund, the solid, 6 billion MFS Massachusetts Investors Trust, founded in July 1924. Some are names you'd know, from big fund companies, that have grown to prominence most notably, the top-notch 93 billion Vanguard Wellington, launched in July 1929. But there are a handful of smaller, closed-end funds that have been around since the '20s, and offer much more than just a colorful history. They include Central Securities CET, 0.27% Adams Diversified Equity ADX, 0.54% General American Investors GAM, 0.70% and Tri-Continental TY, 0.22% Closed-end funds trade on an exchange, unlike open-end funds, and have a fixed number of shares, unlike exchange-traded funds. These active managers have toddled along, relatively unnoticed, offering solid performance, high yields, cheap valuations and strong share-buyback programs. (news.financializer.com). As reported in the news.

currency deposits: The decline in the GIR from November to December was due mainly to outflows arising from payments made by the national government for its maturing foreign exchange obligations, foreign exchange operations of the BSP, and revaluation adjustments on the BSP's gold holdings resulting from the decrease in the price of gold in the international market, he said, according to Global Times China. These were partially offset by the national government's net foreign currency deposits along with the central bank's income from investments abroad. Citing the preliminary data, Bangko Sentral ng Pilipinas BSP Governor Amando Tetangco Jr. said the end-December GIR level was 0.40 billion dollars lower than the November GIR of 81.45 billion dollars, but higher by 0.38 billion dollars compared to a year ago figure of 80.67 billion dollars. Tetangco said the December GIR level remains adequate and is able to cover 9.2 months' worth of imports of goods and payments of services and primary income. It is also equivalent to 5.8 times the country's short-term external debt based on original maturity and 4.2 times based on residual maturity. (news.financializer.com). As reported in the news.

director co-head: We suggest paying attention on countries whose economies generated by domestic market, such as Indonesia and India, with subdued debt level, Frederic Neumann, managing director and Co-Head of Asian Economics Research at HSBC bank, said as quoted by CNBC. Indonesia's economy is projected to expand steadily last year and this year at moderate level amid contraction in some other economies, according to Global Times China. There are positive triggerers from banking credits and strong domestic consumption, Neumann said. Under such condition, the Southeast Asia's largest economy offers a better investment playground, amid negligence of global fund's managers on shares, bonds and currencies of nations whose economy is highly generated by exports, particularly, to the United States. The Indonesian central bank estimates loan growth to accelerate at a faster pace this year of over 10 percent from predicted 8 percent last year, Erwin Rijanto, deputy governor of the bank has said. Rising global prices of commodities, the major exported products from Indonesia, and high bond's yield offered by the government and corporate, would also help Indonesia to counter the impact of the prospect of US Federal Reserve's rate-hike plan this year. Strong macro-economic condition, relatively stable political atmosphere, ongoing reforms to improve investment climate and prediction of relatively stable rupiah against US dollars, would favorably factor to the inflows of foreign funds into Indonesia. (news.financializer.com). As reported in the news.

dow jones: On Thursday, the key market gauge shed 73.47 points, according to The Japan Times. The Topix index of all first-section issues closed down 2.36 points, or 0.15 percent, at 1,553.32, after dropping 1.20 points the previous day. The 225-issue Nikkei average lost 66.36 points, or 0.34 percent, to end at 19,454.33. Selling to adjust positions was prompted by the yen's rise versus the dollar after U.S. employment data announced by a private-sector company on Thursday turned out weaker than market expectations, brokers said. Despite the fall in the key market gauges, the Tokyo market was relatively firm, said Nobuyuki Fujimoto, market analyst at SBI Securities Co. An overnight downturn in the Dow Jones industrial average also hurt the sentiment of investors in the Tokyo market, brokers said. (news.financializer.com). As reported in the news.

exchange-rate theory: Furthermore, the gauge suggests the greenback is massively overvalued against its three biggest rivals the euro 16.6% the Japanese yen 31.2% and the British pound 21.8% . The gauge, invented by the Economist back in 1986, is meant to be a lighthearted guide to whether currencies are trading at their correct level, according to a description on The Economists' website, according to Market Watch. The magazine's editors caution that Burgernomics was never intended as a precise gauge of currency misalignment, merely a tool to make exchange-rate theory more digestible. According to the Big Mac Index, the dollar is overvalued against all but three rival currencies the Swiss franc, the Norwegian krone and the Swedish krona. The Economist Caption outside of wrapper for normal article images The Big Mac Index is based on a popular economic theory called purchasing power parity. On a PPP basis, the trade-weighted U.S. dollar index is 17% overvalued, according to data provided by Deutsche Bank. PPP, as it is widely known, purports to determine whether a given exchange rate is fairly valued based on the relative prices of goods purchased in each country. (news.financializer.com). As reported in the news.

factory orders: In separate reports, factory orders fell 2.4% in November while orders for durable goods lost 4.5%. Trading in currencies was volatile following the release of the data, echoing some of the sharp moves the currency has seen over the past several weeks, though the dollar added to its advance throughout the session, according to Market Watch. We wobbled a bit the moment the data hit, but even though the headline was a little soft the guts look solid. The U.S. added 156,000 jobs in December, according to the closely watched payrolls report, and while this was below the 180,000 that had been expected, it still pointed to improving conditions in the labor market. This instill confidence that the inflation story is still intact and puts people back into that frame of mind after some profit-taking, said Brad Bechtel, managing director for currencies at Jefferies. With the day's advance, the index, which gauges the greenback against six rival currencies, turned slightly higher for the week, erasing a 1.1% slump on Thursday. The ICE Dollar Index DXY, 0.79% added 0.7% to 102.26, trading near its highs of the session. (news.financializer.com). As reported in the news.