Thursday, March 28, 2013
Wednesday, March 20, 2013
Monday, March 18, 2013
Markets drop amid Cyprus bailout worries
Lawmakers must still approve the agreement, but Cypriots reacted over the weekend by rushing to withdraw their savings from bank ATMs. Depositors in other financially weak nations were left to consider the possibility that a new precedent had been set for future EU bailouts.
In response, the euro weakened Monday to $1.29, its lowest mark this year against the U.S. dollar. The safe-haven Japanese yen strengthened.
Equity markets in Asia also took a dive. Japan's Nikkei plunged 2.7%, the Hang Seng in Hong Kong declined 2.2% and the Shanghai Composite lost 1.3%. Stock futures suggested markets in Europe and the United States would follow Asia's lead.
Under the proposed Cyprus deal, a 9.9% tax will be levied on deposits of more than €100,000, while a 6.75% rate will be paid on smaller accounts.
It is the first time that the EU has insisted on such terms for bank depositors as part of a bailout. The EU's bailouts other nations in the last three years, such as Greece and Portugal, have usually been accompanied with strict budget restrictions and led to big losses for bond holders.
"Officials have been at pains to stress the uniqueness of Cyprus and how such a bail-in will not happen elsewhere," said Steven Englander, a foreign exchange strategist at Citi. "The question is whether the depositors elsewhere in the euro zone see things the same way."
Related: Rush to ATMs in Cyprus on EU bailout tax
Cyprus President Nicos Anastasiades tried to calm his nation on Sunday, and convince lawmakers to vote for the bailout plan, which includes the deposit tax.
"A disorderly bankruptcy would have forced us to leave the euro and forced a devaluation," he said in a speech.
The bailout, while small compared to the emergency loans supporting other troubled European nations like Greece, represents more than half the size of the €18 billion Cyprus economy. Cyprus is the EU's smallest state, accounting for just 0.2% of output.
By Monday, there were signs that Cyprus might be forced to extend its bank holiday as the specifics of the bailout were debated. In particular, steps may be taken to shift more of the tax burden from small to large accounts, according to a report in the Financial Times.
Tuesday, March 5, 2013
Hopes of looser monetary policy lift markets
KUALA LUMPUR: Key regional markets including the FBM KLCI ended higher on Tuesday as investors hoped the central banks would keep monetary policy loose at meetings this week.
At the close, the FBM KLCI rose 6.10 points or 0.37% to 1,642.08. Turnover was 966.73 million shares valued at RM1.79bil. There were 432 gainers, 230 losers and 312 counters unchanged.
Reuters reported European shares jumped, oil rose and gold snapped a four-day losing streak on Tuesday as investors bet major central banks would keep monetary policy loose.
Reuters said the liquidity provided by central banks has driven the rise in risk asset markets this year despite a patchy recovery in the world economy and investors have been seeking reassurance that the support will continue, it said.
Bank Negara Malaysia's monetary policy committee meeting will be held on Thursday.
Among the key regional markets, Japan's Nikkei 225 rose 0.27% to 11,683.45; Hong Kong's Hang Seng Index up 0.10% to 22,560.50; Shanghai's Composite Index rallied 2.33% to 2,326.31; Taiwan's Taiex 0.83% to 7,932.71 and South Korea's Kospi edged up 0.17% to 2,016.61 while Singapore's Straits Times Index ended 0.3% higher at 3,248.26.
Crude palm oil for third-month futures fell RM14 to RM2,399 following a bearish outlook for the sector. There were also concerns about the conflict in Lahad Datu, Sabah and its impact on plantations in that state.
News reports said palm oil stockpiles probably shrank by the most in 10 months in February, with stockpiles down 5.4% on-month to 2.44 million tonnes. This was the biggest decline since April last year.
Sunday, March 3, 2013
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