Dollar Bulls are Vulnerable as Currency's Strength May Cap Rates
Dollar bulls have reason to be wary of the currency’s Friday rally on stronger-than-forecast U.S. labor data.- The jobs report bolstered the case for a December interest-rate increase by the Federal Reserve and propelled a broad gauge of the greenback past this year’s previous high. Yet the last time the dollar was this strong, the central bank flagged it as a burden on exporters and a damper of inflation, driving the currency down by the most since 2009.
- The March experience is raising red flags for investors and strategists. A surging dollar may lead Fed officials to warn that currency moves will limit rate increases in 2016, even if they boost their benchmark next month from near zero, where it’s been since 2008. “It’s going to be really hard for them to hike rates aggressively,” said Brendan Murphy, a senior portfolio manager at Standish Mellon Asset Management Co., who oversees $19 billion of fixed-income assets in Boston. Once the Fed lifts rates, “you may be nearing the end of this broader move we’ve seen in the dollar.”
by Rachel E
- Murphy says he’s betting on the greenback versus the euro and currencies from commodity exporting nations, but he’s trimmed positions since the start of the year. Jobs Boost
- The dollar appreciated to its strongest level since April versus the euro and its highest in more than two months versus the yen after a Labor Department report showed U.S. employers added 271,000 workers in October, the most this year.
- The U.S. currency ended the week at $1.0741 per euro and 123.13 yen. The Bloomberg Dollar Spot Index climbed to its highest in data going back to December 2004.
- Futures traders boosted expectations for a December rate increase to 68 percent, from 56 percent before the labor report, data compiled by Bloomberg show. The calculation assumes the effective fed funds rate averages 0.375 percent after liftoff.
- The Fed is assessing progress toward its employment and inflation objectives as it considers whether to raise rates in December. But officials are also keeping an eye on the dollar. Watchful Fed
- Central bankers noted in minutes from their September meeting that the dollar has “strongly appreciated” against emerging-market counterparts and climbed versus currencies of commodity exporters and the U.S.’s main trading partners. They expressed concern that this could delay or diminish price gains. “The dollar is a big factor for the Fed,” said Kathy Jones, chief fixed-income strategist at Charles Schwab & Co. in New York. “If the dollar moves higher as a result of Fed tightening, which is what we expect, then I think it reinforces the message that this will be a ‘slow and low’ cycle.”
- Jones still sees the dollar rallying an additional 5-10 percent in the next year on a trade-weighted basis.
by Rachel E
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Beating Forecasts
- The dollar has already surpassed most analysts’ predictions for its appreciation.
- Against the euro, it’s exceeded the median of more than 60 year-end forecasts compiled by Bloomberg. The U.S. currency is expected to fall versus four of its 16 major counterparts by the end of March, including the British pound.
- Christoph Kind, head of asset allocation at Frankfurt Trust, which manages about $20 billion, foresees the greenback climbing toward parity with the euro in the first quarter if the Fed lifts rates in December. But he sees limits to the strength. “I’m bullish on the U.S. dollar, but if the dollar gets too strong I would cut back on my position,” he said. “It will take some time until we see parity, maybe next year, but then a level is reached where the Fed will signal they are not going to hike aggressively. That makes this appreciation unsustainable.”
Dollar Solidifies Payrolls Surge While China Trade Sinks Copper
The double whammy of a stronger dollar and weak Chinese trade data weighed on copper and Australia’s currency, with most Asian index futures foreshadowing declines after U.S. payrolls data bolstered prospects of an interest-rate increase this year.- Both the Aussie and New Zealand’s dollar were near one-month lows as the biggest increase in U.S. employment this year underpinned the greenback. Copper futures fell a fourth day after Chinese trade slumped more than analysts anticipated, stoking bets that regulators there will have to expand economic stimulus. While Australian stocks opened lower and futures signaled losses from Hong Kong to Seoul, Japanese contracts climbed with the yen at an 11-week low. Oil and gold were steady after tumbling on Friday. “The U.S. labor market report was a doozy,” Philip Borkin, senior economist in Auckland at ANZ Bank New Zealand Ltd., said in a client note. “The figures gave an unequivocally positive signal on the state of the U.S. economy. Moreover, with financial markets generally taking the prospects of higher rates pretty well, then this will give Fed officials further comfort that the time to begin ending emergency monetary policy settings is fast approaching.”
- Odds on the Federal Reserve hiking benchmark rates at its next meeting in December jumped to 68 percent after the payrolls data signaled the U.S. labor market is on a solid footing. The report vindicated rhetoric from Fed officials, who had been working to reintroduce the prospect of a 2015 rate increase after citing lackluster inflation and concern over China’s slowdown for their inaction in September and October. Data on Chinese consumer prices to retail sales this week set will help investors get a handle on Asia’s largest economy, and color speculation on the outlook for further easing. Currencies
- The Aussie dropped 0.1 percent to 70.33 U.S. cents as of 8:44 a.m. Tokyo time, after touching its weakest level since Oct. 2 and slumping 1.4 percent on Friday. The Kiwi was little changed at 65.33 U.S. cents following a retreat of as much as 1.7 percent last session to its lowest price since Oct. 6. Both Australia and New Zealand count China among their biggest trading partners.
- Data released at the weekend showed Chinese exports fell 6.9 percent in October, exceeding all 31 estimates from economists surveyed by Bloomberg. Imports were also weaker than expected, sinking 18.8 percent after analysts tipped a drop of 15.2 percent. The trade surplus swelled to a record $61.6 billion. Other data this week is projected to show continued deflation in the industrial sector and a softening in consumer-price inflation, weakness that could spur an uptick in stimulus from the central bank. “The October trade data keep pressure on for more domestic easing,” said Louis Kuijs, head of Asia economics at Oxford Economics in Hong Kong.
- U.S. employers added 271,000 workers to nonfarm payrolls last month, up from an increase of 137,000 in September and blowing past the 185,000 advance projected by economists. The jobless rate dropped to 5 percent.
- The euro slipped 0.1 percent to $1.0730 Monday after sinking 1.3 percent last session, while the yen traded at 123.27 per dollar, extending losses at its weakest level since Aug. 21. Japan’s currency typically moves at odds with the nation’s exporter-heavy stock indexes.
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Stocks
- Australia’s S&P/ASX 200 Index lost 0.8 percent in early trading, led lower by raw materials producers as BHP Billiton Ltd., the world’s biggest mining company, sank the most since Sept. 29.
- Samarco Mineracao SA, the world’s second-largest producer of iron-ore pellets, will halt output of the material for blast furnaces after its dams in the Brazilian state of Minas Gerais ruptured, triggering a mudslide that’s left two dead and at least 28 people missing. The joint venture between BHP and Vale SA will suspend production and shipments of pellets at its Ubu unit in Espirito Santo state when existing stockpiles run out, Samarco said in a statement Saturday. Activities at its Germano unit in Minas Gerais, where the incident took place, are already suspended.
- New Zealand’s S&P/NZX 50 Index, the first major stock gauge to start trading each day in the Asia-Pacific region, climbed 0.2 percent.
- Futures on South Korea’s Kospi index were down 0.2 percent in trading at the end of last week, while contracts on Hong Kong’s Hang Seng and Hang Seng China Enterprises indexes retreated at last 0.4 percent. Those on the FTSE China A50 Index were down 0.9 percent.
- Conversely, Japanese index futures signaled more gains for the nation’s equities, with contracts on the Nikkei 225 Stock Average bid for 19,460 in the Osaka pre-market, up from 19,260 at their close there on Friday. Yen-denominated futures on the gauge were little changed at 19,455 after soaring 1.2 percent last session.
- U.S. equities largely shrugged off the payrolls data and bump up in December rate-hike bets, with the Standard & Poor’s 500 Index ending Friday little changed, while the Dow Jones Industrial Average and Nasdaq 100 Index climbed at least 0.3 percent. Futures on both the S&P 500 and the Dow Average were little changed early on Monday.
- As the turmoil that marred the third quarter for financial markets fades and concern over China’s slowing economy abates, the jobs data is helping investors come around to the idea that the American economy is strong enough to withstand the first increase in borrowing costs for nearly a decade. “The reality of a Fed rate hike will be digested over the next couple weeks,” said Leo Grohowski, who helps manage more than $184 billion in client assets as chief investment officer of BNY Mellon Wealth Management in New York. “It’s going to take a while for equity market participants and strategists to feel confident enough to increase their earnings expectations. But I think the equity market grinds higher between now and the end of the year.”
- Bets on a December hike have increased from 50 percent last week and 37 percent a month ago.
- Japan reports data on earnings Monday, and Malaysia issues an update on industrial production. Taiwanese trade numbers are due.
BHP CEO Flies to Brazil as Prosecutors Seek License Halt
BHP Billiton Ltd.’s chief executive departs for Brazil Monday as prosecutors there seek the suspension of licenses at its iron-ore venture as well as compensation for victims after two dams burst causing deadly mudslides. A third dam is being monitored, BHP said.
by Andrew W, David S & Yasmine B
- The Melbourne-based mining giant and partner Vale SA face potential payouts to families who lost their homes after two tailings dams ruptured at the Samarco Mineracao SA joint venture in the state of Minas Gerais on Nov. 5. Deutsche Bank AG said the cleanup costs could exceed $1 billion. “We will recommend the state secretary to suspend the license for the whole enterprise until its compliance is assessed and safety for communities is guaranteed,” Carlos Eduardo Pinto, a prosecutor in Mariana, told reporters. “We filed a public civil investigation into an event that caused the most environmental damage in the history of our state.”
- Samarco has advised that at least one person is confirmed dead and 13 members of the workforce are missing, BHP said Monday in a statement. BHP will review its previous guidance of iron ore production of 247 million tons for the year to July 2016, it said.
- The operations could be closed until fiscal 2019, Deutsche Bank analyst Paul Young said in a note dated Nov. 6. “It could be months before Vale, BHP, state and federal governments complete their assessment of the incident,” he said.
- The operation includes a three-tiered tailings dam complex. The site’s Fundao dam failed in Thursday’s incident, while the Santarem dam downstream was also affected, BHP said in its statement. The Germano dam is being monitored by Samarco, it said. Missing People
- Samarco said 588 people were placed in hotels as the army, police and firefighters helped the injured and homeless. In addition to missing workers, a further 15 local inhabitants are also unaccounted for, according to authorities.
- BHP fell as much as 4 percent in Sydney trading Monday and had declined 3.6 percent to A$21.89 at 10:31 a.m. local time. Vale fell 5.7 percent in Friday trading in Sao Paulo.
- While state prosecutors said the missing personnel were working on raising the height of one of the dams at the time of the collapse, Samarco and BHP said it’s too early to say what caused the accident. “There is no confirmation of the causes of the tailings release,” BHP said in Monday’s statement.
- The company said its top priority is helping to locate and care for victims. Vale and BHP expressed solidarity with those affected and are offering support and assistance to local authorities. BHP CEO Andrew Mackenzie will meet with Samarco’s response team, authorities and members of affected communities once he arrives in Brazil. “Samarco may be held liable for civil, criminal and administrative penalties, depending on its direct responsibility for the disaster,” Danilo Miranda, a lawyer at Marcelo Tostes Advogados, said by telephone on Friday. “Fines could go as high as 50 million reais ($13 million), depending on how many infractions they committed."
- Samarco’s iron-ore operations in Minas Gerais are halted and shipments will be suspended when product inventories end, the company said in a statement posted to its website. Pellet Premiums
- It’s likely the accident will add further pressure to BHP’s cash flow, growth and the company’s progressive dividend policy, Deutsche Bank’s Young said. BHP’s full-year profit in the year to June 30 plunged 52 percent as commodity prices tumbled on concern over slower growth in China, the largest consumer. Samarco accounted for about 3 percent of underlying earnings before interest and taxes in fiscal 2015, BHP said Monday.
- The operation, which was producing at an annual rate of about 30 million metric tons in September, uses water-filled pipelines to transport ore from its mines to processing plants near its port. It provides pellets, used in steel output, to about 20 countries, and accounts for about 20 percent of that market, Citigroup Inc. analyst Ivan Szpakowski said Monday in an e-mailed report.
- Curbs to production at Samarco are bullish for pellet and lump premiums, according to Szpakowski. “The northern hemisphere winter is already typically the strongest time of the year for such premiums, particularly as Chinese pellet output falls, and the Samarco disruption is likely to exacerbate the impact,” he said.
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China's Trade Drop Means More Stimulus Measures Are Coming
A contraction in China’s trade flows shows little alternative for the nation’s leaders than injecting support for domestic demand as they struggle to achieve their growth target. Overseas shipments dropped 6.9 percent in October in dollar terms, the customs administration said Sunday, a bigger decline than estimated by all 31 economists in a Bloomberg survey. Weaker demand for coal, iron and other commodities from declining heavy industries helped push imports down 18.8 percent, leaving a record trade surplus of $61.6 billion.- The report set a soft tone for a data-heavy week featuring key October releases. Industrial production and fixed-asset investment are forecast to show little pickup, even after six central bank interest-rate cuts and moves to spur local government spending. The silver lining: retail sales gains are seen underscoring the rising role of consumers.
- While an expanding middle class propels revenue and earnings at companies like Internet giant Alibaba Group Holding Ltd. -- which on Wednesday hosts Singles Day, the year’s biggest shopping event -- it hasn’t been enough to offset declining heavy industries. Exports helped stoke China’s rapid-growth phase, a period that now seems over as the global economy decelerates. “The October trade data keep pressure on for more domestic easing,” said Louis Kuijs, head of Asia economics at Oxford Economics in Hong Kong. “Measures are likely to continue to focus on shoring up domestic demand rather than weakening the currency. And over time the role of fiscal policy expansion should rise.”
- Other figures this week are projected to show continued deflation in the industrial sector, and consumer-price inflation softening in October to a 1.5 percent annual pace. That weakness would underscore the scope for additional easing by the People’s Bank of China.
- Sunday’s trade report showed exports to Japan slumped 9 percent in the first 10 months from a year earlier, while those to the European Union declined 3.7 percent. Shipments to Hong Kong dropped 11.7 percent during the period. “Exports continue to face structural headwinds,” said Rajiv Biswas, Asia-Pacific chief economist at IHS Global Insight in Singapore. “With recent economic data continuing to indicate some moderation in Chinese economic growth during the second half of 2015, the Chinese government may utilize additional monetary and fiscal stimulus measures to boost gross domestic product growth in 2016.”
U.S., India
Exports to the U.S., China’s largest trading partner, jumped 5.8 percent in the first 10 months from a year earlier, while those to the Association of Southeast Asian Nations increased 4.2 percent. Shipments to India rose 8.9 percent.
The central bank will maintain stable monetary policy and create a neutral monetary and financial environment for economic restructuring, according to the third-quarter Monetary Policy Implementation Report it released Friday. The PBOC also said the economy faces downward pressure and inflation is likely to be low.
Those comments “signaled the PBOC’s intention to prevent a secular fall in demand amid transition to the ‘new normal,’ ” Goldman Sachs Group Inc. economists including MK Tang in Hong Kong said in a report Sunday.
Output this year is on pace for the slowest expansion in a quarter century. The world’s second-largest economy grew 6.9 percent in the three months through September from a year earlier, the slowest quarterly increase since the start of 2009. Fourth-quarter growth will be at the same 6.9 percent pace, according to economists surveyed by Bloomberg.
The International Monetary Fund last month cut its outlook for global growth this year to 3.1 percent from a July forecast of 3.3 percent. The world economy will expand 3.6 percent next year, the IMF predicted, less than the 3.8 percent it projected in July.
China’s imports from all 10 of the major trade partners listed by the customs administration declined in the first 10 months. Imports from Australia, a major source of China’s iron ore during the real estate boom, plunged 25.7 percent.
China’s imports declined for a 12th month, matching a record losing streak from 2009. Sunday’s report showed the value of imported iron ore, crude oil and coal all slumped more than 40 percent in the first 10 months of 2015 from a year earlier, highlighting lackluster demand from Chinese factories and construction sites.
No Tolerance
Top leaders have signaled that they won’t tolerate a sharp slowdown. President Xi Jinping said last week that average annual growth should be no less than 6.5 percent in the next five years to realize the nation’s goal to double 2010 GDP and per capita income by 2020.
China still has ample ammunition, with a relatively small fiscal deficit and a central government with a light debt load. The central bank still locks up 17.5 percent of bank deposits from the biggest lenders as required reserves, even after recent reductions.
The record trade surplus helped spur a surprise increase in foreign-exchange reserves in October despite an erosion of holdings after the PBOC intervened to boost the yuan. The central bank’s stockpile rose to $3.53 trillion last month from $3.51 trillion at the end of September, the PBOC said Saturday.
“The large trade surplus could offset capital outflow” and curb expectations for the yuan’s depreciation, Liu Ligang, chief Greater China economist at Australia & New Zealand Banking Group Ltd. in Hong Kong, wrote in a note.
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China to Resume IPOs by Year-End as Stocks Enter Bull Market
China’s plan to lift a five-month freeze on initial public offerings by the end of the year removes one of its key measures of support for the stock market as equities recover from a $5 trillion rout.- New share offerings will restart after improvements to the listing system, Deng Ge, a China Securities Regulatory Commission spokesman, said at a briefing in Beijing on Friday. Chinese equity-index futures dropped 0.9 percent at the close on Saturday in Singapore amid concern that new offerings will divert funds from existing equities.
- The resumption suggests authorities are becoming more confident the stock market can stand on its own after the Shanghai Composite Index rallied back into a bull market last week. The move will also help Chinese companies tap into an important source of financing as they seek to cut debt levels from near record highs. “There will be short-term damage to sentiment in the market," said Ronald Wan, Hong Kong-based chief executive officer at Partners Capital International. "But the government has to proceed with market reform and the timing for IPOs will be better now than next year as the market seems to have some strength.” Rescue Measures
- The rally in China follows an unprecedented state campaign to prop up share prices, along with increased monetary stimulus to combat an economic slowdown. The official support has helped revive confidence among local investors, spurring a pick-up in trading activity and sending the Shanghai Composite to its highest close in 11 weeks on Friday before the CSRC announcement.
- Unlike in most major stock markets, Chinese regulators control the timing and pricing of new listings. While policy makers have pledged to loosen their grip on the process, almost all of this year’s deals have been priced at levels below 23 times earnings. The valuation cap has led to nearly guaranteed gains once new shares start trading, spurring investors to place bids worth hundreds of billions of dollars during each round of new listings.
- Ten of the 28 companies that were in the process of listing when the freeze began will restart the process after Nov. 20, said another CSRC official at the same briefing, who asked not to be identified because of agency rules. It will take two weeks for the 10 to complete the process, while the remaining 18 will sell shares by the end of the year, Deng said. Separately, the CSRC suspended Shenwan Hongyuan Group and China Galaxy Securities Co. from opening new investor accounts.
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Illusion of Confidence
- The resumption of IPOs will help the government reinforce the idea that the stock market has recovered from its rout, according to Robbert van Batenburg, director of market strategy at Societe Generale SA. “It’s a bit of make-believe effort for China to give an impression that we are in a more normalized situation after what happened in August," Batenburg said in New York. "It definitely creates an illusion that at the government is more confident that the market is going to absorb these IPOs. But I don’t know how it’s going to evolve after that. The headwinds are not out of the way yet.”
- While the Shanghai Composite has rallied 23 percent from its August low, foreign investors don’t appear to be convinced about the rebound: they’ve been selling mainland equities through the Shanghai-Hong Kong exchange link for four straight weeks, cutting holdings by the most in two months on Thursday. Third-quarter profits trailed analyst estimates at 68 percent of companies in the index, the eighth straight quarter of disappointing results, while data over the weekend showed exports fell more than expected in the October. Valuations Levels "It will be interesting to see what sort of valuation levels are achievable for the new IPOs and what, if any, foreign participation there is," Tony Hann, head of equities at Blackfriars Asset Management Ltd. in London, said by e-mail. “It is natural that the CSRC would want to re-open the pipeline. There is a long queue."
- Before the stock market started tumbling in June, Chinese authorities had endorsed the use of equity financing as an alternative to debt, which becomes more difficult for many companies to repay as economic growth slows. The aggregate debt-to-equity ratio for companies in the Shanghai Composite rose to the highest level since 2005 in January, while the McKinsey Global Institute estimates corporate liabilities reached 125 percent of gross domestic product in 2014. "IPOs have to be resumed given that the stock market should be functioning for companies to raise capital and that should help the economy," Wenjie Lu, a Shanghai-based strategist at UBS Group AG.
Steel Exports From China in Retreat as Trade Frictions Escalate
The flood of steel that mills in China are pushing onto global markets fell in October from a record amid rising trade frictions and weak overseas demand, signaling that what’s been a safety valve for the world’s top producer may now be starting to close.- Outbound cargoes of steel shrank 20 percent to 9.02 million metric tons last month from September, according to customs data released on Sunday. That was the lowest figure since June, and below the monthly average so far this year of 9.21 million tons. “The slump in steel exports last month compared with September reflects rising trade frictions for Chinese products,” Helen Lau, an analyst at Argonaut Securities (Asia) Ltd. in Hong Kong, said after the release of the trade data, which showed overall exports from the country dropped for a fourth month, adding to signs of headwinds. “There have been complaints in Asean, Europe and recently the U.S.” about Chinese steel, Lau said.
- China’s mills, which account for half of global production, have exported unprecedented volumes of steel this year to help counter contracting demand in Asia’s top economy. The surge has undermined prices and increased competition from India to Europe and the U.S., spurring complaints that the trade is unfair. While down on-month, China has still shipped 25 percent more steel this year than in the same period of 2014. Industry Crisis
- The global steel market is being overwhelmed with metal coming from China’s state owned and state-supported producers, a collection of industry groups including the American Iron and Steel Institute said on Thursday. The next day, ArcelorMittal cut its full-year profit target, citing exceptionally low Chinese export prices.
- Cases against Chinese steel imports are surfacing worldwide. Last week, the U.S. Department of Commerce said it planned duties of 236 percent on imports of corrosion-resistant steel from five Chinese companies. More than 20 cases have been lodged against China’s cargoes, with about seven from Southeast Asia, according to the South East Asia Iron & Steel Institute.
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“Lower steel exports reflect waning demand from overseas trading partners,” Xu Huimin, an analyst at Huatai Great Wall Futures Co. in Shanghai, said before the data. Financial markets and many businesses in China were closed Oct. 1-7, which may have also contributed to the drop in exports, Xu said.
Avoid Frictions
- Given the October break, some mills may have brought forward orders to September, so exports that month were high while October’s figure was small, according to Argonaut’s Lau. Maybe Chinese mills wanted to slow exports to avoid frictions, she said.
- Inbound cargoes of iron ore shrank 12 percent to 75.52 million tons last month from September, according to the customs figures. Purchases totaled 774.5 million tons in the first 10 months, little changed compared with the same period a year earlier.
- Iron ore stockpiled at Chinese ports rose 1.5 percent to 86 million tons in the week to Nov. 6, according to Shanghai Steelhome Information Technology Co. Ore with 62 percent content delivered to Qingdao was at $48.21 a dry ton on Friday, 32 percent lower this year, according to Metal Bulletin Ltd.
Chinese Wealth Manager Noah Plans 50 Hires in H.K. by Early 2016
Noah Holdings Ltd., the Shanghai-based wealth manager listed on the New York Stock Exchange, plans to increase its Hong Kong staff by almost 60 percent by early next year as more wealthy Chinese seek international investments amid volatile markets at home.
by Bei Hu
- Noah aims to boost the number of people responsible for its international business to 135 from about 85, with half of the additions in investment roles, Kenny Lam, the company’s president, said in an interview from Hong Kong. William Ma this month joined from fund of hedge funds company Gottex Penjing Asset Management (HK) as international chief investment officer, and his responsibilities will include allocating money to domestic and international hedge funds, Lam said.
- Noah is expanding in Hong Kong as China eases restrictions on cross-border capital flows and more Chinese look outside the country for investment opportunities in real estate, private equity, credit and hedge funds amid volatile domestic markets and slowing growth. Noah joins asset managers such as Springs Capital in tapping international appetite among wealthy Chinese clients. Springs, with offices in Beijing, Hong Kong and Shenzhen, earlier this year hired a four-member team from Hermes Investment Management to start a new Singapore unit. Volatile Market "The market in China is so volatile, clients want to diversify," Lam said of Ma’s recruitment. "They want to move away from things they’re already investing in."
- A China rout this year led major stock indexes down more than 30 percent since a June peak, wiping more than $5 trillion off the country’s stock market value at one point.
- Noah is adding people as global financial firms are cutting jobs. Standard Chartered Plc, Deutsche Bank AG and Credit Suisse Group AG in the past three weeks announced plans to slash more than 30,000 jobs between them.
- Chairman Wang Jingbo in 2005 founded Noah, which traces its roots to the private banking department of brokerage Xiangcai Securities Co. Noah’s clients are estimated to have an average net worth of $50 million, and many are business owners, said Lam. Noah has sold more than $37.6 billion of wealth management products since it started, according to its website. Hong Kong is among its fastest-growing businesses, with around 3,500 clients and assets under management more than quadrupling this year to about $2 billion, Lam said.
- Noah sells products of other money managers and also offerings of its asset management unit. Products include funds from more than 25 global money managers, such as Oaktree Capital Group LLC. The Los Angeles-based company raised 1 billion yuan ($158 million) from Chinese individuals for a global distressed-debt fund through three Chinese distributors including Noah, it announced last month.
James Bond Is Back Atop the Box Office With ‘Spectre’ Movie
by Anousha S
- “Spectre,” the latest film in the James Bond spy series, debuted with $73 million to lead the U.S. and Canadian box office, though shy of some analysts’ estimates.
- “The Peanuts Movie,” from 20th Century Fox, came in second, drawing $45 million over the weekend, Rentrak Corp. said Sunday in a statement.
- The performance of the fourth Bond from Sony Corp. is being closely watched as the producers of the 53-year-old franchise, one of Hollywood’s most valuable, search for a potential new distributor. The deal between Sony and the rights holders, Metro-Goldwyn-Mayer Pictures and the heirs of producer Albert Broccoli, expires after this picture.
- BoxOffice.com estimated the new Bond film would generate ticket sales of $85 million through the weekend, after lowering an earlier estimate of $90 million. “Skyfall” earned $88.4 million on its opening weekend, a record for the franchise. support by ZATco & 20News
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Volkswagen Says Its Employees Flagged Latest Emissions Faults
Volkswagen AG said emissions inconsistencies it disclosed on 800,000 cars last week were the result of employees informing their superiors.
by Brian P & Christoph R
- The findings, which the Wolfsburg, Germany-based company made public on Nov. 3, were disclosed by employees during an internal investigation, Volkswagen said in a statement on Sunday. The employees informed the carmaker about “irregular” consumption in cars, the company said. A probe into the matter continues, VW said.
- The admission that more cars than the previously disclosed 11 million vehicles are affected has plunged Volkswagen deeper into the worst crisis in its history. The scandal has escalated from software used to cheat on emissions tests to discrepancies on carbon-dioxide output, including in some non-diesel cars. Volkswagen has said the latest findings will add about 2 billion euros ($2.15 billion) in financial risk to the already 6.7 billion euros it has set aside to cover the first hit from the probe.
- An engineer at the company told management last month that CO2 emissions values had been manipulated since 2013 to fulfill targets that were unattainable by legal means, the Bild am Sonntag newspaper reported Sunday. Technicians at the company failed to report the practices earlier for fear of retribution, the newspaper said. Volkswagen declined to comment on details of the report.
- Chief Executive Officer Matthias Mueller, who was appointed in the wake of the scandal, is seeking to change the corporate culture at VW and encourage more openness in an effort to repair the company’s battered reputation. The falsified reports began shortly after former CEO Martin Winterkorn ordered a 30 percent reduction in the CO2 output of new vehicles by 2015, Bild am Sonntag said. The whistle-blower is still employed, the newspaper said.
- Mueller, who has yet to visit regulators in the U.S. where the initial diesel-emissions cheating was uncovered, is under pressure to show that VW is turning a new leaf. The company’s supervisory board, which will meet Monday, has said after the latest irregularities that it will soon discuss "further measures and consequences."
U.S. Wants to Avoid Second Cold War - or Hot War - With Russia
The U.S. is taking steps to counter Russian “aggression” and provocations in Europe and the Middle East, Defense Secretary Ashton Carter said in a speech that also focused on China’s “more ambitious” objectives.
by Nicole G
- Carter, speaking at the Reagan National Defense Forum in Simi Valley, California, on Saturday, listed ways that Russia has been acting as a “spoiler” on the world stage, including violating the sovereignty of Ukraine, trying to intimidate Baltic countries and sending troops to Syria. “We do not seek a cold, let alone a hot, war with Russia,” Carter said. “We do not seek to make Russia an enemy. But make no mistake, the United States will defend our interests, our allies, the principled international order and the positive future it affords us all.”
- “At sea, in the air, and in cyberspace,” Carter said, “Russia has engaged in challenging activities.”
- The U.S. and its allies are also concerned about the pace and scope of China’s land reclamation in the South China Sea, Carter said. The area being reclaimed is the site of almost 30 percent of the world’s maritime trade, including about $1.2 trillion in ship-borne trade headed to the U.S.
- Of concern, Carter said, is the “prospect of further militarization, as well as the potential for these activities to increase the risk of miscalculation or conflict among claimant states.” Carter added that he plans in 2016 to make his first visit to China since becoming the top U.S. defense official in February.
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Reducing Vulnerabilities
- Carter said the U.S. and Russia have cooperated where their interests converge, such as the Iran nuclear talks, and said that Russia may yet play a positive role in Syria. Even so, the U.S. is taking a series of steps, he said, to reduce the vulnerability of allies and partners. Not all of those steps could be described publicly, he said.
- The U.S. is modernizing its nuclear arsenal and investing in technologies that “are most relevant to Russia’s provocations,” including unmanned systems and a new long-range bomber. Carter said he couldn’t talk about some technologies the U.S. is pursuing, describing them as “really surprising.”
- He cited innovations such as the “electromagnetic rail-gun, lasers, and new systems for electronic warfare, space and cyberspace.” The U.S. is also pursuing more old-fashioned methods of countering opponents, including “information campaigns to ensure the truth gets through” and focused sanctions of the sort the U.S. and international community levied against Moscow after its invasion of Crimea.
- The Cold War approach to Russia is “not suited for the 21st century,” Carter said, and as a result, the U.S. is changing its posture in Europe to emphasize agility and speed. Tanks and infantry-fighting vehicles will be pre-positioned in Eastern Europe, Ukrainian troops will continue to receive equipment, training and aid, and the North Atlantic Treaty Organization’s new Very High Readiness Joint Task Force will be strengthened, he said. Subsurface Warfare In Asia, the U.S. is putting its best and newest assets and making heavy investments in subsurface warfare, electronic warfare, space, cyber, missile defense and more, Carter said. “The single most influential factor in shaping the region’s future is how China rises and relates to the principled order that has undergirded regional peace, stability and security,” Carter said.
- In that region, the U.S. is adjusting operational plans to deter aggression, fulfill obligations to Taiwan, and undertaking contingency planning for potential natural disasters. It is also promoting “shared rules of the road” and habits of cooperation, Carter said, by participating in exercises across the region.