WEEK AHEAD-Improved economic outlook seen boosting Tokyo stocks
WEEK AHEAD-Improved economic outlook seen boosting Tokyo stocks: "The data earlier this month showed Japan's economy grew at its fastest pace in 13 years in the October-December quarter thanks to strong demand for Japanese electronics, cars and steel in China and the United States.
Last week's solid industrial output data added to evidence that the world's second-biggest economy is pulling out of a decade of stagnation.
Additional data showed that average spending by wage-earner households rose for a third month in January, suggesting a recovery may also be taking hold in personal consumption, the largest but weakest part of Japan's economy.
Given that, analysts said, it looks more lucrative to buy stocks dependent on domestic demand than those of exporters, whose earnings prospects could be hurt by external shocks.
One such problem has been volatility in currencies.
'Investors have recently shifted their eyes (away from the export sector) to the domestic sector, and that trend will continue,' said Yutaka Shiraki, senior strategist at Mitsubishi Securities. 'I believe near-term news flow will hardly be negative for domestic issues.'
Some said the Nikkei average could this week test a 20 month closing high of 11,161, marked in October l
- posted by Igor @ 11:25 AM

G7 should focus on fundamentals -US official
G7 should focus on fundamentals -US official: "The euro (EUR=) stood at around $1.2570 on Monday, off an all-time high of around $1.29 earlier this month.
Analysts link the dollar weakness to the high deficit in the U.S. current account -- the net flow of current transactions between countries -- and see little chance of the trend reversing until that deficit starts shrinking.
Aldonas said the United States should tackle a very low savings rate blamed for contributing to the trade deficit.
'One of the reasons we need to work on our savings rate and reform a tax system that encourages debt is precisely because we need to do our part to correct the imbalances in the system,' he said.
The G7 leading industrialised countries are due to meet in Boca Raton, Florida on February 6 and 7. "
- posted by Igor @ 10:15 AM

Australian dollar tops list of top performing currencies in 2003
Australian dollar tops list of top performing currencies in 2003: "The Australian dollar began 2003 at about 56 U.S. cents. Late Wednesday afternoon, it was trading at just below 75 U.S. cents.
AMP Capital Investors chief economist and investment strategy head Shane Oliver said the Australian dollar in 2003 enjoyed its strongest year since the mid-1930s.
'Further Australian dollar appreciation is likely over the next six months on the back of ongoing U.S. dollar weakness, rising commodity prices and widening interest rates versus the U.S.,' Oliver said, predicting the currency could reach 80 U.S. cents."
- posted by Igor @ 7:04 AM

Fund Leaders: Future Depends on Trust
Fund Leaders: Future Depends on Trust: "With the fund industry reeling from a three-year bear market in stocks and U.S. authorities widening their probe into improper fund trading, the fund industry is being forced to adapt its organizational structure and keep costs in check.
'We must be brave and must not be afraid to improve our organizations by bringing in new people and making changes,' John Fraser, the head of UBS Global Asset Management, one of the world's largest fund management companies, said at a fund industry conference on Thursday.
'If we do not adapt, our clients and the whole business will suffer greatly,' he added.
Many investors have seen their savings badly squeezed by a three-year global bear market, and some of them have blamed fund firms for selling them the wrong products and failing to warn them about the risk of certain kinds of investment.
At the same time, scandals over mortgage endowment policies and probes by U.S. authorities and New York Attorney General Eliot Spitzer into improper fund trading have shattered the confidence of many investors in the financial services industry.
'We have lost the hearts and confidence of our clients. We may own their wallets but we definitely do not own their hearts. The only way to fix this is give the right product to the right client
- posted by Igor @ 12:01 AM

Even Peter Munk believes gold has a bright future
NATIONAL POST: "One of the most solid examples of gold's rising tide came late last week when Peter Munk, chairman of Barrick Gold Corp., said the company is eliminating its hedge book.
Mr. Munk, for those less familiar with the gold business, spent decades as hedging's poster boy. Hedging is a risk management tool that uses contracts to lock in future prices. Miners hedge future production to protect themselves from falling gold prices.
Gold spent much of the 1980s and 1990s in a bear market, and Barrick's gamble on falling gold prices helped the company generate US$2-billion in cash.
Mr. Munk's decision to move away from hedging indicates that even he believes gold has a bright future. Barrick need not protect itself using hedging contracts if gold has entered a bull market."
- posted by Igor @ 10:42 AM

The World Today - Lessons from the stockmarket crash of '87
The World Today - Lessons from the stockmarket crash of '87: "ROBERT SHILLER: I think they have come down. Obviously, they've come down relative to a smooth version of earnings. So I don't think it's as high. I think in 2000 it was at record highs. Extraordinary highs. And I think nobody was really very sure of that market. It's come down to a lower level, but it's still not low, it's still on the high side. So I think we still have a risky stock market.

STEPHEN LONG: How risky?

ROBERT SHILLER: Well, I don't think of it as having a one-day crash like October 1987. For the first point, investors today are not thinking about one-day crashes, so they're not going to be reactive.

A one-day crash, like in '87, requires that people be primed to think that 'I have to take action quickly'. I don't think people are in that frame of mind now at all. But I think that there's still the risk of disappointing performance over the years, going forward.

STEPHEN LONG: And indeed despite the lessons from the October 1987 crash and the subsequent big correction we saw in the wake of the collapses of WorldCom and Enron, the values are pretty high – some are saying priced for perfection.

ROBERT SHILLER: Well, I think the irrational exuberance hasn't really completely left us. It's transformed. People are less warm about the stock market. They're bitter at their brokers, and they're mistrustful. But they still think that it's going to go up.

I've been doing surveys at the Yale School of Management, and the per cent of the population that thinks the market is going to go up is even higher than it was in 2000. But I don't think that they're really, you know, warm to the market. I think that they still have doubts, and still have concerns that mean… I don't think "
- posted by Igor @ 12:35 PM

Chinese investors are shifting their money into the surging futures markets, including metals contracts
Most Shanghai copper futures (0#SCF:) rose their three-percent limit on Thursday while the LME jumped to six-year highs, as investors were bullish over the near-term trends of metals markets, traders said. Strength in metal contracts on the Shanghai Futures Exchange prompted Chinese punters to pull their money out of persistently weak domestic stock and debt markets, pushing most Shanghai copper contracts to record highs, they said.

Shanghai's most active April contract (SCFJ4) jumped a three percent daily limit of 530 yuan to 21,290 yuan ($2,572). It has surged 28 percent since the start of September.

In comparison, China's benchmark stock index (Shanghai:^SSEC) has dropped five percent in the period and is down 40 percent since its peak in mid-June 2001.

"Chinese investors are shifting their money into the surging futures markets, including metals contracts," said a Shanghai trader. "There are widespread expectations that copper prices will continue to rise at home and abroad in the near term."

LME three-month copper (MCU3) jumped to its highest since October 1997 in early Asian trade on Thursday, driven, in turn, by the metal's jump to limit-highs on the Shanghai exchange, traders said.
- posted by Igor @ 11:56 AM

LME metals swept to new highs as funds pile back in
LME metals swept to new highs as funds pile back in: "Aluminium (MAL3) was at $1,524/27, just off a new 29-month high at $1,528.50, and up from
$1,510.50 at the last kerb close.
'Aluminium has been dragged up mainly by copper, but it's running into forward selling, which
is capping gains,' the trader said.
Nickel (MNI3) surged to $11,745/80, up sharply from $11,370 previously and just off an earlier
14-year high at $11,800.
Zinc (MZN3) was up at $955/58, just off a fresh 2-1/2 year high at $961 scored in Thursday's
early pre-market and up from $951 at the last kerb close.
Lead (MPB3) was riding high at $625/28, around its earlier six-year high at $627.50, from
$598 previously.
Tin (MSN3) was the only metal to fail to score a new multi-year high, but was nevertheless
swept along by the bullish momentum, strengthening to $5,331/39 from $5,280 at the last kerb
close"
- posted by Igor @ 11:49 AM