Speed leads to crashes - Oman Daily Observer

24
OMAN/INTERNATIONAL SATURDAY, AUGUST 11, 2012
Asian stock markets hit by weak Chinese trade data
HONG KONG — Asian markets
mostly fell yesterday as
weak Chinese trade data reinforced
concerns of a slowdown
in the world's number two
economy, while profit-taking
after a week-long rally added
TRADERS chat as they work at their desks at the Hong Kong Stock Exchange.
to selling pressure.
Wall Street provided a weak
lead despite upbeat US jobs
and trade data that indicated a
positive outlook for the world's
number one economy.
Hong Kong fell 0.66 per
cent, or 133.35 points, to
20,136.12, while Shanghai
shed 0.24 per cent, or 5.29
points, to 2,168.81, with losses
muted as dealers expect
policymakers to loosen monetary
policy soon to kickstart
the economy.
Tokyo fell 0.97 per cent, or
87.16 points, to 8,891.44 and
Sydney shed 0.72 per cent,
or 30.9 points, to 4,277.3 but
Seoul advanced 0.30 per cent,
or 5.81 points, to 1,946.40.
China's General Administration
of Customs said exports
grew just one per cent in July
year-on-year to $176.9 billion,
while imports rose 4.7 per cent
to $151.8 billion, cutting the
trade surplus to $25.1 billion
from $31.7 billion in June.
The data follow results on
Thursday showing Chinese retail
sales, industrial output and
inflation eased in July, indicating
the export-driven economy
was feeling the effects of Europe's
debt crisis lowering demand
in the key market.
The figures will also add to
calls for China's leaders to further
loosen monetary policy to
kick start growth, which in the
April-June quarter grew at its
slowest pace since the height
of the global crisis in 2008-
2009.
China has already this year
taken the rare step of slashing
interest rates twice in quick
succession, while also lowering
requirements for how
much money banks must keep
in reserve as it looks to spur
lending.
Profit-taking added yesterday's
losses after global markets
rallied this week following
European Central Bank
comments that gave investors
confidence it will restart its
sovereign bond-buying programme
soon to help countries
such as Spain and Italy.
There are also expecta-
Jobs, trade data back modest US growth
WASHINGTON — The number of
Americans filing new claims for jobless
benefits unexpectedly fell last
week, offering hope that some of last
month's improvement in job growth
could be sustained and give the US
economy a lift.
Other data was also positive with
the international trade deficit in June
the smallest in 1½ years as the petroleum
import bill dropped sharply.
While the smaller trade gap implied
upward revisions to the government's
estimate of second-quarter gross domestic
product published last month,
the impact was blunted somewhat
by an unexpected drop in wholesale
stocks in June. Initial claims for state
unemployment benefits slipped 6,000
to a seasonally adjusted 361,000, the
labour Department said. Economists
had expected claims to rise to 370,000
last week. The data came after a labour
Department report last week showed
that in July employers hired the most
workers in five months.
"The fact that initial jobless claims
have fallen back to their March lows
suggests faster employment gains will
continue to support consumer spend-
A MAN grabs his briefcase as he waits in line to speak with employers at
the UJA-Federation Connect to Care job fair in New York. — Reuters
ing in the coming months," said Harm
Bandholz, chief US economist at
UniCredit Research in New York.
US nonfarm payrolls increased
163,000 in July after three months of
gains below 100,000. But the unemployment
rate rose by a tenth of a per-
centage point to 8.3 per cent.
Last week's jobless benefit claims
report was the first in several weeks
not affected by auto plant shutdowns,
which caused wide swings in claims in
July, making it difficult to get a clean
reading on the jobs market. A second
report from the Commerce Department
on Thursday showed the shortfall
on the trade balance narrowed 10.7
per cent to $42.9 billion, the smallest
since December 2010, as low oil prices
curbed imports. That was below economists'
expectations for a $47.5 billion
deficit. The oil import bill fell $2.2 billion
to 32.9 billion, the lowest since
February. That was as the average price
per barrel of crude oil dropped by the
most since January 2009.
The reports helped the Standard &
Poor's 500 stock index eke out a small
gain and extend its rally for a fifth day
on the New York stock market. Prices
for US government debt edged down,
while the dollar rose broadly.
Immediately after the trade report,
economists forecast the initial second-quarter
US GDP growth estimate
would be revised to as high as 2.2 per
cent, but tempered those predictions
after a later report showed a decline in
wholesale inventories in June. Secondquarter
growth is now seen revised up
to an annual pace of at least 1.8 per cent
from 1.5 per cent. The government will
publish its second GDP estimate later
this month. — Reuters
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tions the Federal Reserve will
return to its asset-purchasing
programme to spur the US
economy.
Optimism that the banks
will step in saw Tokyo gain
almost five per cent over the
past four sessions, while Hong
Kong added more than three
per cent and Seoul was five per
cent higher.
Wall Street also posted
gains but its rally ran out of
steam on Thursday, with the
Dow and S&P 500 ending flat
while the Nasdaq put on 0.25
per cent, despite bright jobs
and trade data.
US weekly new jobless
LONDON — Manchester
United will make its New
York Stock Exchange debut
yesterday after a flotation that
disappointed the English soccer
club's American owners
and has enraged some of its
fans.
Soccer is the world's most
popular sport, but the setback
for the initial public offering
underlines the limited appeal
of even its biggest names for
investors.
The IPO priced at $14, below
the $16-20 range the club's
bankers had been seeking. It
valued the 19-times English
champions at only $2.3 billion
and shaved as much as
$100 million off the proceeds
expected for the team and its
owners.
The offering raised $233.2
million, to be split equally between
the club and its owners,
the Florida-based Glazer family.
The loss of as much as $50
WASHINGTON — The US
Justice Department said it will
not pursue criminal charges
against Goldman Sachs Group
Inc or its employees related to
accusations that the firm bet
against the same subprime
mortgage securities it was
selling to clients.
The decision not to prosecute
Goldman, a firm held up
by critics as a symbol of Wall
Street greed during the 2007-
2009 financial crisis, highlights
the difficulty in prosecuting
crisis-related cases.
Few expected the bank to
face criminal charges, but in
April 2011, US Senator Carl
Levin asked for a criminal
investigation after the subcommittee
he leads spent
more than a year looking into
Goldman.
The accusations were aired
in a heated 2010 Congressional
hearing in which Levin
grilled Goldman Chief Executive
Lloyd Blankfein for hours
about whether it was morally
correct for the firm to sell its
clients products described internally
as "crap".
"The department and investigative
agencies ultimately
concluded that the burden of
proof to bring a criminal case
could not be met based on the
law and facts as they exist at
this time," the Justice Department
said in a statement late
on Thursday.
The DOJ does not typically
make public statements when
it concludes an investigation.
Neil Barofsky, a former
watchdog for the US government's
financial system bailout
in 2008, said the announcement
was a stark reminder
that no individual or institution
had been held meaning-
claims fell to 361,000, the Labor
Department said Thursday,
in another sign that the jobs
market has some moderate
strength despite the secondquarter
lull in hiring.
Meanwhile, the US trade
deficit narrowed in June for
the third straight month, with
exports continuing to climb
while imports eased.
On currency markets the
greenback was quoted at 78.50
yen in late afternoon trade yesterday,
slightly up from 78.55
yen in New York late Thursday.
The euro stood at $1.2275
and 96.30 yen, compared with
million for the club will be a
blow as it copes with a heavy
debt burden and seeks to buy
new players, who cost tens of
millions of dollars each.
The 134-year-old club
looked at listing in Singapore
and Hong Kong last year to
tap into its large Asian fan
base but pulled out, blaming
fully accountable for their role
in the financial crisis.
"Without such accountability,
the unending parade
of megabanks scandals will
inevitably continue," said
Barofsky, who has been an
outspoken critic of the government's
response to the financial
crisis. In a brief statement
emailed to Reuters, a
Goldman Sachs spokesman
said: "We are pleased that this
matter is behind us."
A Levin aide had no immediate
comment.
In a related civil case,
Goldman settled with the
US Securities and Exchange
Commission for $550 million
in July 2010, without admitting
wrongdoing.
The SEC, in one of its
premier financial crisis cases,
said Goldman failed to tell
investors the Paulson & Co
hedge fund helped choose and
bet against the subprime mortgage-backed
securities underlying
an investment product
$1.2301 and 96.62 yen.
Oil prices were lower after
the figures from China, the
world's biggest energy consumer.
New York's main contract,
light sweet crude for delivery
in September, retreated
67 cents to $92.69 a barrel
while Brent North Sea crude
for September fell 64 cents to
$112.58.
Gold was at $1,610.50 at
0805 GMT, from $1,613.25 on
Thursday.
In other markets:
Taipei climbed 0.10
per cent, or 7.42 points, to
7,441.12.
Chunghwa Telecom was
0.11 per cent higher at Tw$89.9
while TSMC fell 0.36 per cent
to Tw$82.0.
Manila closed 0.13 per cent
higher, adding 6.74 points to
5,263.35.
Bloomberry Resorts added
1.52 per cent to 10 pesos while
Metropolitan Bank and Trust
slipped 2.72 per cent to 94.85
pesos.
Ayala Corp was up 1.18 per
cent at 430 pesos.
Wellington eased 0.16
per cent, or 5.82 points, to
3,577.80.
Fletcher Building fell 1.2
per cent to NZ$6.40, Telecom
Corp was up 1.1 per cent at
NZ$2.695 and Air New Zealand
held steady at NZ$0.91.
— Reuters
Manchester United IPO shows
soccer’s limited investor appeal
volatile markets.
A group of United fans who
are campaigning for greater
involvement in the ownership
of the club jeered the Glazers.
"When the news finally
came, it was revealed they'd
been forced to take $14 a share
or let the whole deal collapse.
— Reuters
Justice Department drops
Goldman financial probe
PEOPLE enter the Goldman Sachs Group Inc global
headquarters in New York — Reuters
named Abacus.
The SEC is still pursuing
a civil complaint against Fabrice
Tourre, a Goldman vice
president involved in the Abacus
deal.
Separately on Thursday,
Goldman said the SEC had
dropped an investigation into
the firm's role in selling a different
$1.3 billion subprime
mortgage-related deal arranged
in 2006.
The Abacus deal was a
major focus of the televised
hearings held by Levin's subcommittee
in 2010. The hearings
and a following report
from Levin's Permanent Subcommittee
on Investigations
weighed on Goldman's shares
as the firm suffered a reputational
hit from the unwelcome
spotlight.
Goldman — dubbed a "great
vampire squid" in a 2009 article
in Rolling Stone magazine
— has continued to be dogged
by criticism, including from its
own ranks. — Reuters