BRUSSELS - Business investors are confident the
eurozone has weathered the worst of the sovereign debt crisis, according to
European Commission chief Jose Manuel Barroso. In a speech given to Portuguese
diplomats in Lisbon on Thursday (3 January), the former Portuguese leader said
that "the perception of risk in the eurozone has disappeared." He added:
"Investors have understood that when European leaders commit themselves to doing
everything to safeguard the integrity of the euro, they mean business." His
speech comes after Portugal earlier this week became the latest EU country to
break ranks on economic policy. Its president, Anibal Cavaco Silva in his New
Year address condemned what he described as the "social injustice" of the
country's bailout terms and promised a court enquiry on the subject. For his
part, Barroso acknowledged that his native country is facing "a true ... social
emergency." Amid criticism that EU-mandated austerity has caused a spike in
unemployment across the Union, he conceded that the commission is "willing to
analyze the completion of programmes and to make adjustments and do the
fine-tuning necessary to minimize social costs." But Barroso's remarks reflect a
growing belief among EU officials that market pressure on the single currency is
starting to abate. Last month, German finance minister Wolfgang Schauble also
told reporters the euro has survived the worst of the crisis, following a
buy-back deal on Greek bonds. The optimistic tone was bolstered by a survey out
this week. A poll of 778 investors in December by research group Sentix showed
that the business community by and large expects the single currency to stay
alive....Include this with the 'bombardier Siemens' situation and the economic argument is blown away.
The longer the eurocrisis persists, the less important economically the EU is to the world.
All these business leaders that depend on mass immigration from eastern Europe to keep down wages down and profits at a maximum (without paying tax for it) want us to stay in.
Investors that are more interested in high value production and investment couldn't care less either way. Europe is a big enough entity with enough history and respect to stand up for herself. South Korea doesnt need to be in political union afterall....International Monetary Fund data show that emerging nations have cut the weighting of EMU bonds in their reserves to 24.7pc from a peak of 30pc at the onset of Europe’s crisis three years ago, with a record drop in the third quarter of 2012. “They have lost their appetite for peripheral EMU bonds, and some have simply cut Italy and other countries from their benchmarks,” said Jens Nordvik, currency chief at Nomura. The IMF data also show a record $19bn (£12bn) surge in holdings of sterling by advanced central banks to $98bn, the biggest three-month jump ever recorded. Analysts say this is almost certainly caused by the Swiss National Bank as it takes extreme measures to hold down the franc. The SNB has already bought an estimated $80bn-worth of euro bonds and is increasingly switching to other assets. “There aren’t many places to go in this 'ugly contest’ if you don’t like the euro, dollar or yen,” said HSBC’s David Bloom.
The effect has been to thwart the Bank of England’s efforts to weaken the pound. The Swiss and UK central banks are effectively in a “low intensity” battle against each other. “This is what happens in currency wars. Desperate times lead to desperate acts,” said Mr Bloom.
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International Monetary Fund data show that emerging nations have cut the weighting of EMU bonds in their reserves to 24.7pc from a peak of 30pc at the onset of Europe’s crisis three years ago, with a record drop in the third quarter of 2012.
“They have lost their appetite for peripheral EMU bonds, and some have simply cut Italy and other countries from their benchmarks,” said Jens Nordvik, currency chief at Nomura.
The IMF data also show a record $19bn (£12bn) surge in holdings of sterling by advanced central banks to $98bn, the biggest three-month jump ever recorded. Analysts say this is almost certainly caused by the Swiss National Bank as it takes extreme measures to hold down the franc. The SNB has already bought an estimated $80bn-worth of euro bonds and is increasingly switching to other assets.
“There aren’t many places to go in this 'ugly contest’ if you don’t like the euro, dollar or yen,” said HSBC’s David Bloom.
The effect has been to thwart the Bank of England’s efforts to weaken the pound. The Swiss and UK central banks are effectively in a “low intensity” battle against each other. “This is what happens in currency wars. Desperate times lead to desperate acts,” said Mr Bloom.
The European Union has become a deeply pernicious, corrupt and undemocratic entity, led by arrogant, doctrinaire, third-rate minds .
It is a matter of the greatest urgency that Britain gets out of this dangerous train wreck.
After 4 years of headlines predicting the demise of the currency only one thing is clear: Europe is determined that the Euro
will survive even if not all countries survive in the Euro.
Just to get things in perspective, of the world's $3.3 trillion reserves, 24.7% - about $815 billion - is held in Euros and less than $100 billion is held in sterling.
Membership of the Euro is crippling Greece, Ireland, Portugal, Italy, Spain and Cyprus and condemning their people to penury. And you think the Euro is a success?
So 76% of world reserves are not in Euros - why is that a good thing for you, why does this make you feel good?
SHANGHAI - Shanghai's long-awaited international board will be a major platform for the return of red chips, rather than genuine foreign companies, a senior official with the Shanghai Stock Exchange said on Tuesday.
The remark made by Chao Kejian, director of the exchange's offering and listing department, played down the widespread anticipation that the board would be a hot market for foreign companies to issue yuan-denominated shares.
Speaking at a forum in Shanghai, Chao said that so far, foreign companies' attitude toward a listing has been "cautious" and that there is no timetable for the introduction of the board.
The manner of listing has been pinned down to be through initial public offerings and not depositary receipts, as has been speculated. A depositary receipt is a certificate issued by a bank representing equity in foreign companies, which is traded on stock exchanges within the issuing country.
"A listing by foreign companies will be mainly aimed at promoting their brands on the Chinese mainland, not for raising money. They have other channels for funding, and many for them don't want to dilute their existing shares," Chao said.
"Instead, the board will be a strong platform for red chips, which are eager to return."
"A listing by foreign companies will be mainly aimed at promoting their brands on the Chinese mainland, not for raising money. They have other channels for funding, and many for them don't want to dilute their existing shares," Chao said.
"Instead, the board will be a strong platform for red chips, which are eager to return."
Red chips are Chinese companies incorporated outside the Chinese mainland. They are not allowed to list on the A-share market, which is open only to locally incorporated companies, though their main businesses are on the mainland.
Chao said there are more than 400 red chips, about 100 of them listed in Hong Kong.
"It's reasonable for the companies to list where their businesses are and for consumers to be able to invest in companies that they are buying products from," said Chao.
Chao said Hong Kong-listed China Mobile Communications Corp, which he describes as a "cash cow", is likely to be among the first batch of candidates for the board.
Foreign companies' guarded interest in the board, analysts say, is partly triggered by Hong Kong's emergence as a major offshore yuan market amid increasing demand for yuan-denominated trade settlement.
As of the end of June, Kong Hong's yuan deposits had reached 550 billion yuan ($86 billion), up 75 percent from the end of 2010, according to data from the Hong Kong Monetary Authority.
The burgeoning deposits combined with a lack of investment channels to allow foreign companies to raise money from bond issuance in Hong Kong at a low cost, are diminishing their desire for a listing on the international board.
As of late August, 112 billion yuan worth of yuan-denominated bonds, or dim sum bonds, had been issued, according to Thomson Reuters data, nearly three times the amount issued in the whole of 2010.
Many big foreign companies are among the issuers, including the World Bank, Volkswagen AG, McDonald's Corp and Caterpillar Inc.
China's investment in the United Kingdom will continue its "explosive" growth, with high-end manufacturing and infrastructure leading the way, a senior diplomat predicted.
"The UK is the most open economy, and also the most market-oriented," in Europe, said Zhou Xiaoming, minister counselor of the Chinese embassy in the UK.
Chinese companies have been answering the call from some members of the European Union for capital.
In 2011, the UK was the third-largest EU destination for Chinese investment, following Luxembourg and France, according to the Ministry of Commerce.
China's overseas direct investment in the UK in 2011 was $2.5 billion, it said.
But Zhou said the real figure was far more as Chinese overall investment in the UK experienced "explosive" growth.
"It is estimated that the Chinese capital that flew into the country in 2011 reached $6.5 billion," said Zhou.
And the momentum will probably be sustained in the coming years, he said.
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