Nigeria's central bank has barred banks from holding their own funds in dollars, the governor said on Thursday.]]> |||
Lagos - Nigeria's central bank has barred banks from holding their own funds in dollars in order to end speculative pressure on the naira currency, the governor said on Thursday.
Godwin Emefiele told Reuters in a phone interview that he believed the current naira band was “appropriately priced at this time”, signalling a will to defend the currency, although it is currently trading below the band.
“We do not want speculators in this market any longer,” he said.
The naira fell to a record low of 188.85 to the dollar after his comments. - Reuters]]>
Asian markets mostly rallied on Thursday, with investors reversing a recent sell-off spurred by a Wall Street recovery.]]> |||
Asian markets mostly rallied on Thursday, with investors reversing a recent sell-off spurred by a Wall Street recovery and indications the Federal Reserve will keep rates on hold until mid-2015.
The dollar was boosted by comments from US central bank policymakers, which analysts said suggested they have changed tack and will not start to lift rates from record lows until the first six months of next year.
Tokyo climbed 2.32 percent, or 390.32 points, to 17,210.05 as the greenback advanced against the yen, while Sydney jumped 0.95 percent, or 48.9 points, to close at 5,210.8.
Hong Kong gained 1.09 percent, or 246.37 points, to 22,832.21.
However, Seoul ended 0.14 percent lower, dipping 2.66 points to 1,897.50, while Shanghai lost 0.11 percent, or 3.50 points, at 3,057.52 following a four-day rally that saw it hit a four-year high.
The Fed's policy committee said it “judges that it can be patient in beginning to normalise the stance of monetary policy,” adding that the decision will depend on economic data.
Policy, it said, was consistent with its prior statement that it would only begin raising rates “a considerable time” after its massive stimulus programme ended in October.
Although the change in language was subtle, “it was nevertheless a modification consistent with the view that rates are likely to rise in the first half of next year,” said Omer Esiner, chief market analyst at Commonwealth Foreign Exchange.
The news sent US shares surging. The Dow rose 1.69 percent, the S&P 500 soared 2.04 percent and the Nasdaq jumped 2.12 percent.
And on currency markets, the dollar gained in New York to 118.63 yen from 117.07 yen in Tokyo earlier Wednesday. In Asian trade Thursday, the greenback was at 118.60 yen.
The euro bought 146.34 yen and $1.2341, compared with 146.43 yen and $1.2343.
News that oil supplies in top consumer the United States had dipped helped to push crude prices up slightly Wednesday, providing some respite from a recent plunge.
But on Thursday in Asia, prices retreated again. US benchmark West Texas Intermediate for January delivery was 16 cents down at $56.31 while Brent crude for February eased 28 cents to $60.90.
Meanwhile, analysts said Russian moves to stabilise the ruble, which touched a record low against the dollar this week, seemed to be working.
Moscow said it would sell about $7 billion in foreign reserves to prop up its currency and also implement other measures to prevent a sell-off -- soothing fears about Russia's economic troubles spreading to the eurozone.
The moves helped the ruble to 58 against the dollar in early Moscow trade, well up from the 80 touched on Tuesday.
Gold was at $1,199.33 an ounce, compared with $1,197.34 late Wednesday.
In other markets:
* Taipei rose 0.57 percent, or 50.27 points, to 8878.63. Taiwan Semiconductor Manufacturing Co. rose 0.77 percent to Tw$131.5 while Hon Hai was 0.59 percent higher at Tw$84.8.
* Wellington added 0.40 percent, or 21.89 points, to 5,518.48. Trade Me was up 0.57 percent at NZ$3.52 and Chorus gained 0.75 percent to NZ$2.69.
* Manila added 0.91 percent, or 63.07 points, to 7,029.28. Philippine Long Distance Telephone added 0.72 percent to 2,790.00 pesos and Universal Robina Corp. surged 2.04 percent to 189.80 pesos, but Ayala Land fell 0.45 percent to 32.85 pesos. - AFP]]>
A “green” bond market has taken root this year, with money managers jumping in to buy new environmentally-focused bonds.]]> |||
Boston/New York - A “green” bond market has taken root this year, with municipalities and corporations issuing new environmentally-focused bonds and money managers jumping in to buy them.
But it's too soon to tell whether all the new activity - less than a sliver of the $91 trillion worldwide bond market - will send much new money to projects like efficient buildings and better water systems.
Instead, the new bonds reflect the complexities of using finance to address issues like climate change. While the sale of notes termed green bonds tripled to $35 billion worldwide in 2014, many are bonds that might have been sold anyway without the label, and which trade at terms comparable to non-green bonds.
Nor is it clear the new bonds are “green” in the environmental sense that investors may expect, and issuers face only voluntary standards so far.
Participants say that to avoid the impression that green bonds are just a marketing ploy, they still need to show more corporate treasurers and investors the bonds can make it easier to fund projects, a corner they have not yet turned.
“If people think this is just to raise the flag, it's not going to last long,” said Christopher Flensborg, Head of Sustainable Products and Product Development for Skandinaviska Enskilda Banken AB, the Swedish bank that's the world's largest underwriter of green bonds.
Still, the spike in new activity shows some success to date, with new issuers and new buyers. Green bonds used to come exclusively from AAA-rated organizations like the World Bank; the last year has seen rising issues of green bonds from municipal issuers as well as some from corporations that are rated junk.
On the buy side, State Street Corp has filed a registration with the U.S. Securities and Exchange Commission to run what could be the first green bond index fund. Also, since July Bank of America Corp, Standard & Poor's and Barclays MSCI each have launched new green bond indexes that may form the basis of future mutual funds and exchange traded funds.
Corporate and municipal issuers started issuing bonds they labeled as “green” in earnest last year, when they realized that they could pull in some new buyers who wanted to invest environmentally.
“We thought the worst thing that happens is we get more people interested in our bonds” said Alan Westenskow, a Zions Bank vice president who works with municipal issuers. He advised the Utah Associated Municipal Power Systems on a $21 million offer this month to pay for systems to turn waste heat to electricity. The offering, made in several sections, pays a coupon ranging from 3 percent to 5 percent.
Spanish clean energy company Abengoa Greenfield, a unit of Abengoa SA issued its first high-yield green bonds in September - a 500-million-euro issue in all. A representative said “90 percent of our projects qualify as green projects, so why not issue a Green Bond?”
Still unclear is how much extra demand the green label creates. The Abengoa representative said the company didn't have information on the extra demand. A spokesman for Bank of America, which underwrote the Utah bonds, said executives there would not comment on demand.
In August 2014, the first wave of corporate junk green bonds entered the mix, when an affiliate of Princeton, New Jersey, power producer NRG Energy Inc sold $500 million of senior notes to pay for the purchase of the Alta Wind Energy Center, a wind farm in California. Abengoa followed suit, bringing the green high yield market to $1 billion.
Corporate issues now make up 14 of the 51 green bonds tracked in Bank of America's green bond index, and have driven down its average rating to AA2 from AAA, according to a BofA Merrill Lynch research report.
At $1.98 billion, green muni bonds themselves are just a fraction the “green” market, possibly because many muni issues have traditionally backed environmental projects and find investors even without the green label.
“At the end of the day, a bond is still a bond whether it's dubbed as 'green' or not,” Eva Rippeteau, associate director at Fitch Ratings, said in an emailed analysis sent after the Metropolitan Water Reclamation District of Greater Chicago came to market this week with a $300 million green bond, with a coupon ranging from 2 percent to 5 percent. “In many cases, these bonds are funding the same projects that a regular bond would.”
Orders for a recent $350 million green bond sale by Massachusetts exceeded $1 billion, like many other over-subscribed municipal offerings. One buyer, Charles Hill, portfolio manager of T. Rowe Price's $3.9 billion Summit Municipal Intermediate Fund, said he has never had client requests for green bonds specifically, but bought the Massachusetts bonds because he liked them for traditional criteria like their intermediate duration, and their 5 percent coupon, comparable to that of similar non-green bonds.
To be sure, the entire movement isn't about labeling. A spokeswoman for NRG Energy said it used the term “to be able to target an incremental universe of investors who are more green conscious and to differentiate ourselves from other issuers.”
Steve Liberatore, a TIAA-CREF fund manager who oversees $6 billion in bond products that use social or environmental criteria to pick investments for clients concerned about the use of their money, said he skipped the NRG bond because the company also has natural gas operations. He aims to avoid fossil fuels.
“What we're seeing is a shift in the ability of the investor to link up directly with the projects” focused on sustainability, he said.
Interested investors and issuers are willing to give it time to grow, and to improve their standards. The Climate Bonds Initiative, a London nonprofit that promotes investments to reduce carbon emissions, estimates 39 percent of green bonds sold since 2013 were issued without an independent review of how green they are. Many institutional buyers do have internal standards for what kinds of projects green bonds can back.
Catherine Roy, Calvert Investments' chief investment officer for fixed income, said she expects no slowdown. “There are still trillions of dollars of capital needed to address a wide range of global environmental challenges,” Roy said.
* Additional reporting by Francesca Landini in Milan and Jose Elias Rodriguez in Madrid.
South Africa's rand was slightly firmer in late afternoon trade on Wednesday.]]> |||
Johannesburg - The rand was slightly firmer in late afternoon trade on Wednesday, having recouped losses after the collapsing Russian rouble slowed its decline.
The rouble's tumble - it is down 50 percent so far this year - has impacted other emerging market currencies, such as the rand. But the drop slowed slightly as Russia's finance ministry said it had started selling foreign currency, helping the rand stage a tentative recovery.
Still, the South African currency remains vulnerable to problems at home, where investors are worried about gaping current account and budget deficits, traders said.
“Underlying problems remain, not least the large current account deficit,” London-based economic consultancy firm Capital Economics said in a note.
By 1543 GMT the rand inched up 0.02 percent to 11.64 per dollar from a close of 11.6500 in New York. The currency is not far from a six-year low hit last week when official data showed the current account shortfall had missed market expectations.
Yields on local bonds were higher, with the benchmark issue due in 2026 adding 13 basis points to 8.11 percent, a fresh two-month high, as the debt market was also hit by sour sentiment. - Reuters]]>
Asian markets were mixed on Wednesday as bargain-hunting was offset by more losses on Wall Street.]]> |||
Asian markets were mixed Wednesday as bargain-hunting was offset by more losses on Wall Street, while investors await the outcome of a Federal Reserve policy meeting.
Oil prices extended their losses to fresh five-and-a-half-year lows. The dollar recovered slightly against the yen ahead of the Fed get-together, which is being closely watched for clues about its interest rate plans.
Tokyo rose 0.38 percent, or 64.41 points to finish at 16,819.73 after sinking almost three percent in the previous two sessions.
Sydney added 0.19 percent, or 9.6 points, to 5,161.9 and Shanghai jumped 1.31 percent, or 39.50 points, to end at 3,061.02, a four-year high.
But Seoul fell 0.21 percent, or 3.97 points, to 1,900.16 while Hong Kong gave up 0.37 percent, or 84.66 points, to 22,585.84.
Global markets have been in turmoil this week due to concerns about the effect of plunging oil prices on energy firms as well as the crude-dependent Russian economy, which is also straining under Western sanctions.
The ruble - which plunged to a record low of 80 to the dollar Tuesday - sat at 70.77 in early Moscow trade Wednesday.
The central bank ramped up interest rates to 17 percent from 10.5 percent Tuesday and spent about $2 billion to try to support the unit.
Sebastien Barbe, head of emerging market research and strategy at Credit Agricole said in a note that the rate hike and plunging oil prices suggest “a meaningful recession next year”.
“Further depreciation pressure suggests that rate hikes and forex intervention may not be enough. At the current juncture, the odds of targeted capital controls are increasing significantly.”
On Wednesday crude slipped again, ahead of the release of the latest US supply report. US benchmark West Texas Intermediate for January delivery fell 28 cents to $55.65 while Brent crude for February was down 18 cents to $59.93.
US dealers offered Asia a weak lead, with unease over the crude market as well as Russian woes leading to a sell-off on Wall Street Tuesday.
The Dow eased 0.65 percent, the S&P 500 fell 0.85 percent and the Nasdaq tumbled 1.24 percent.
However, some Asia investors took advantage of cheap valuations.
“After several days of steep falls, stocks are definitely cheap enough to pick up, but the markets remains beholden to exterior influences such as volatile currency and commodity price,” Hiroichi Nishi, SMBC Nikko Securities general manager of equities, told Dow Jones Newswires.
“The turmoil may be far from over.”
Eyes are now on the end later Wednesday of the Fed's two-day meeting, with dealers looking for some guidance over monetary policy amid growing speculation that the central bank will raise interest rates by the middle of 2015.
Despite expectations of higher US rates the dollar has retreated against the yen in recent days, with fears over the global economy sending traders into safer investments.
However the greenback fought back to 117.31 yen from 116.59 yen in New York, although it is still a touch down from 117.39 yen in Tokyo earlier Tuesday.
The euro bought 146.27 yen and $1.2462 against 145.86 yen and $1.2511.
Chinese investors continue to pile into the Shanghai market, chasing a rally on hopes the government will introduce measures to kickstart the economy. The huge influx of dealers has seen the composite index surge by a quarter over the past month, helped by an interest rate.
Gold was at $1,197.41 an ounce compared with $1,199.36 late Tuesday.
In other markets:
* Taipei tumbled 1.37 percent, or 122.55 points, to 8,828.36. Taiwan Semiconductor Manufacturing Co. fell 1.88 percent to Tw$130.5 while smartphone maker HTC was 1.40 percent lower at Tw$141.0.
* Wellington was flat, edging up 0.83 points to 5,496.59. Air New Zealand gained 0.40 percent to NZ$2.51 and Fletcher Building was steady on NZ$7.97.
* Manila closed 2.71 percent lower, giving up 194.17 points to 6,966.21. Philippine Long Distance Telephone shed 1.76 percent to 2,790.00 pesos, Ayala Land dropped 2.65 percent to 33.00 pesos and Bloomberry Resorts ended 3.74 percent down to 12.34 pesos.
Russia's finance ministry is selling its foreign currency to support the ruble, a spokeswoman says,]]> |||
Russia's finance ministry is selling its foreign currency to support the ruble, a spokeswoman told AFP on Wednesday.
“The finance ministry considers the ruble extremely undervalued and is starting to sell its left-over currency on the market,” spokeswoman Svetlana Nikitina said. She did not give details of the amount.
The ruble rose in value after the announcement by the ministry to 81.61 to the euro and 65.15 rubles per dollar.
“We'll do it for as long as it is needed,” deputy finance minister Alexei Moiseyev was quoted as saying by Interfax news agency.
The finance ministry said it has around $7 billion at its disposal to prop up the currency. It was not going to crack open a rainy day fund.
The intervention by the finance ministry comes after Russia's central bank has spent more than $10 billion from its currency reserves to prop up the ruble since the start of the month.
At an emergency meeting on Tuesday the Russian government came up with a list of measures to stabilise the situation, economy minister Alexei Ulyukayev said. - AFP]]>
OIL FELL below $59 (R686) a barrel for the first time since May 2009 yesterday, extending a six-month sell-off as slowing Chinese factory activity and weakening emerging-market currencies added to concerns about demand. International benchmark Brent crude has almost halved since reaching a 2014 high of $115 a barrel in June on ample supply and slowing demand, and a switch in strategy by exporter group Opec to defending market share rather than prices. A report showing Chinese industrial activity shrank for the first time in seven months in December added to concern about oil demand. China is the second-largest oil consumer after the US. Brent crude fell to $58.50, its weakest since May 2009. At 12.21pm in London it was down $2.12 at $58.94 while US crude was down $1.73 at $54.18 per barrel. Opec declined to cut production at a November 27 meeting and, despite slumping prices, major Gulf Opec members have shown no sign of reversing course, seeing no need for an emergency Opec meeting. – Reuters]]> |||
OIL FELL below $59 (R686) a barrel for the first time since May 2009 yesterday, extending a six-month sell-off as slowing Chinese factory activity and weakening emerging-market currencies added to concerns about demand. International benchmark Brent crude has almost halved since reaching a 2014 high of $115 a barrel in June on ample supply and slowing demand, and a switch in strategy by exporter group Opec to defending market share rather than prices. A report showing Chinese industrial activity shrank for the first time in seven months in December added to concern about oil demand. China is the second-largest oil consumer after the US. Brent crude fell to $58.50, its weakest since May 2009. At 12.21pm in London it was down $2.12 at $58.94 while US crude was down $1.73 at $54.18 per barrel. Opec declined to cut production at a November 27 meeting and, despite slumping prices, major Gulf Opec members have shown no sign of reversing course, seeing no need for an emergency Opec meeting. – Reuters]]>
Asian markets fell on Monday as oil remained near five-year lows.]]> |||
Asian markets fell on Monday as oil remained near five-year lows, while investors in Japan shrugged off Prime Minister Shinzo Abe's decisive re-election and focused instead on the faltering economy.
Sydney shed 0.64 percent as a hostage crisis erupted in the heart of the city, with terrified people cowering inside a cafe where an Islamic flag was displayed against a window, sparking a security lockdown in an area home to government and corporate headquarters.
Stocks on the Australian market dropped 33.5 points to close at 5,186.1, while in Tokyo the Nikkei 225 index closed down 1.57 percent, or 272.18 points, at 17,099.40.
Seoul finished flat, falling 1.35 points to 1,920.36.
Hong Kong lost 0.95 percent, or 221.35 points to close at 23,027.85, but Shanghai ended 0.52 percent, or 15.25 points, higher at 2,953.42.
Tokyo slipped after Abe's widely expected election win in a snap poll on Sunday that he had billed as a referendum on his economic policies.
“The elections are a net plus for the market, but really came as no surprise and thus are not likely to be a very large factor in today's trading,” said Nomura Securities equity market strategist Junichi Wako.
“Analysts are essentially back to where they were before -- hoping for a thorough fleshing out of Abe's plan to revitalise the economy,” he told Dow Jones Newswires.
Investors were also focused on the Bank of Japan's quarterly Tankan survey that showed confidence among major Japanese manufacturers edged down in the three months to December.
The slide in Asian markets comes after crashing oil prices dragged US stocks to one of their worst losses of the year on Friday.
The Dow Jones Industrial Average fell 1.79 percent and the S&P 500 tumbled 1.62 percent. It was the S&P 500's first weekly loss in nearly two months and its worst single-week decline -- 3.5 percent -- since May 2012.
Oil prices bounced back somewhat in Asian trade Monday but remained near five-year lows.
US benchmark West Texas Intermediate rose 49 cents to $58.30 while Brent gained 68 cents to $62.53 in afternoon trade, reversing losses in both contracts in early trading.
Lower oil prices benefit consumers, but traders have been unnerved by the speed of the freefall in crude prices, which could put projects on hold in the oil sector and hurt energy companies and banks.
Oil prices have plunged more than 50 percent since June.
On forex markets the dollar was lower, buying 118.23 yen in early Monday trade against 118.79 yen in New York on Friday afternoon.
The euro fell to 147.31 yen from 148.05 yen and to $1.2453 from $1.2464 in US trade.
Gold was at $1,215.60 an ounce at 0810 GMT compared with $1,225.00 late Friday.
In other markets:
* Wellington fell 0.29 percent, or 15.88 points, to 5,499.07. Fletcher Building was off 0.62 percent at NZ$8.05 and Air New Zealand was down 1.21 percent at NZ$2.44.
* Taipei fell 41.70 points, or 0.46 percent, to 8,985.63. Taiwan Semiconductor Manufacturing Co finished 0.74 percent higher at Tw$136.0 while Hon Hai Precision Industry shed 2.12 percent to Tw$87.7.
* Manila finished up 0.71 percent, or 51.41 points, at 7,275.62. Philippine Long Distance Telephone lost 0.14 percent to 2,840 pesos while Universal Robina rose 1.24 percent to 196.40 pesos. - AFP]]>
The rand has firmed against the US dollar, recouping some recent losses.]]> |||
Johannesburg - The rand firmed against the US dollar on Monday, recouping some recent losses after ratings agency Fitch surprised markets by not downgrading its credit view on Africa's most developed economy.
Fitch said growing current account and budget deficits were restricting growth in South Africa's economy but maintained its BBB rating, while Standard & Poor's kept its rating at BBB-, one notch above junk status.
Analysts said this would provide only brief respite as they predicted South Africa's credit status would be cut in the next six months.
At 0647 GMT the local unit firmed 0.16 percent to 11.5750 against the greenback, having sunk to a fresh six-year low of 11.7225 on Friday on fears of a downgrade that would increase the cost of borrowing.
Yields on local bonds were steady, with government paper due in 2026 unmoved at 7.915 percent after climbing to a 5-week high before the release of the credit reviews.
“The surprise was in how Fitch in earlier weeks had itself stated that South Africa was hovering closer to the BB (junk) median than its peers,” said ETM Analytics in a morning market note.
South Africa's treasury defended its economic policies following the ratings reviews, saying a plan to hike taxes, freeze hiring in the public sector and reduce deficits would steer annual growth back on course to its target of 5 percent.
Market watchers expect the rand to come under pressure from a string of U.S data likely to confirm dollar strength due later in the session. U.S. November manufacturing output is due at 1415 GMT. - Reuters]]>
CRUDE oil markets fell 3 percent or more to plumb new five-year lows on Friday after the world’s energy watchdog forecast even lower prices on weaker demand and larger supplies next year. Benchmark Brent oil settled at below $62 (R719) a barrel and US crude slumped to under $58 to extend Thursday’s landmark fall below $60. On Friday, the International Energy Agency cut its outlook for demand growth in 2015, triggering another collapse. – Reuters]]> |||
CRUDE oil markets fell 3 percent or more to plumb new five-year lows on Friday after the world’s energy watchdog forecast even lower prices on weaker demand and larger supplies next year. Benchmark Brent oil settled at below $62 (R719) a barrel and US crude slumped to under $58 to extend Thursday’s landmark fall below $60. On Friday, the International Energy Agency cut its outlook for demand growth in 2015, triggering another collapse. – Reuters]]>