China Economy is the World’s New Capital Of Capitalism

May 20th, 2012 by Econ_Forecasts | No Comments | Filed in China Economy

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China Economy is the World’s New Capital Of Capitalism – Business

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Money Moves East to the World’s New Capital of Capitalism

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Mainstream media haven’t noticed it yet but the world’s financial center of gravity is slipping away from New York and London. In terms of raising capital, the west has already lost the battle for supremacy.

During 2009 China outstripped the United States in terms of the amount of money raised from new stock listings. It’s a powerful signal of a resurgence in Chinese investment while U.S. lending and spending languish.

Newly listed companies have raised more than $ 50 billion from initial public offerings on exchanges on the Chinese mainland (Shenzhen and Shanghai) as well as in Hong Kong so far this year. That’s about twice as much as the $ 26.5 billion raised from American IPOs.

Wall Street has led in IPOs every year since 2000 (except for 2006, when London was the destination of choice). But no more. And the trend doesn’t stop here.

Now U.S. firms are cashing in on Oriental liquidity. Casino companies Las Vegas Sands and Wynn Resort both floated shares of their Macau operations in Hong Kong recently, although the Las Vegas Sands listing didn’t impress Hong Kong’s jaded investors.

Next year the money momentum will increase. The Shanghai Stock Exchange is likely to emerge as the world’s biggest market for initial public offerings in 2010 according to globally respected auditor Ernst and Young.

The Shanghai exchange is now No. 3 globally in total funds raised for IPOs in the first 11 months of this year, following Hong Kong and the New York Stock Exchange.

Ernst & Young told the Shanghai Daily, “It is very reasonable to forecast that the Shanghai bourse may rise as the world’s biggest exchange for IPO activities in 2010, due to the rising significance of Chinese companies in the global IPO market.” Funds raised through IPOs are expected to more than double to $ 55.6 billion in Shanghai next year as the Chinese economy and the capital markets become more stable.

As Shanghai becomes the world capital of capitalism, new money raised in Hong Kong and Shenzhen will further tighten China’s claim to be the world’s epicenter for IPOs.

One of the Big IPO’s we’ll be watching for at the China Stock Digest is the listing of The Agricultural Bank of China, the sole state-owned bank yet to be publicly traded due to a backlog of government mandated non-performing loans which are now being cleared from the books.

The Agricultural Bank listing will be a major multi-billion dollar event on the world financial stage.

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Committed To Your Profits In China,Jim TripponEditor-in-ChiefChina Stock Digest

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Bathroom Hidden Camera,Real-time Video Monitor DVR with Automatic Alarm and SMS Remote Control – 3G Remote Camera

May 19th, 2012 by Econ_Forecasts | No Comments | Filed in Euro Debt

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Bathroom Hidden Camera,Real-time Video Monitor DVR with Automatic Alarm and SMS Remote Control – 3G Remote Camera – News – Press Releases

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Real-time Video Monitor DVR with Automatic Alarm and SMS Remote Control – 3G Remote Camera

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Greece became the lowest-rated country in the world according to Standard & Poor’s, which downgraded it on Monday and warned that any attempt to restructure the country’s debt would be considered a default.

Greece now has a lower credit rating than countries such as Pakistan and Ecuador, which has been shut out of international markets since a 2009 default. The cost of insuring Greek debt is now almost twice as much as the price of insuring Pakistani bonds.

S&P’s move was the latest blow for Greece’s Socialist government, which is scrambling to push an unpopular austerity package through parliament to ensure continued funding under a year-old bailout plan.

Barely a year after Athens was granted a first 110-billion-euro (158-billion-dollar) aid package, the European Union, the IMF and the European Central Bank are working on a second funding deal. Some European countries such as Germany oppose giving more money to Greece without the assistance of private creditors.

S&P said European policymakers looked increasingly likely to impose a restructuring of Greece’s debt — either via a bond swap or by extending bond maturities — as a means of making the private holders of Greek bonds share the burden.

“In our view, any such transactions would likely be on terms less favorable than the debt being refinanced, which we, in turn, would view as a de facto default according to Standard & Poor’s published criteria,” the agency said.

In such a case, S&P said, Greece’s credit rating would be lowered to “selective default,” or SD, while the ratings on the country’s debt instruments would be cut to D.

It cut Greece’s long-term sovereign credit rating to CCC, four steps away from default, from B. The short-term rating was affirmed at C and all ratings were removed from credit watch.

The move takes S&P’s rating of Greece one notch below Moody’s Caa1, while Fitch ranks Greece at B-plus. This makes Greece the lowest country in S&P’s rankings.

S&P said the outlook on the long-term rating remained negative, a sign that another downgrade is likely in the next 12 to 18 months.

S&P said it will probably downgrade the ratings of four Greek banks as well — National Bank of Greece, EFG Eurobank Ergasias, Alpha Bank, and Piraeus Bank. All of them are currently rated B.

GREECE’S WILL TO STAY IN EURO

Greece said the move by Standard & Poor’s overlooked its commitment to carry on with tough fiscal efforts to repair public finances and remain a member of the 17-member euro currency club.

“The decision also overlooks the government’s moves to avoid any problems relating to Greece’s contractual obligations, as well as the will of all Greeks to plan our future inside the euro zone,” the Finance Ministry said in a statement.

Several international banks have come out publicly in favor of rolling over their holdings of Greek debt, including France’s Credit Agricole, which owns Greek bank Emporiki.

Germany’s banking association said on Saturday it backed the idea of private creditors participating in the rescue.

The banks’ participation would be part of a second bailout for Greece worth around 120 billion euros aimed at giving Athens more time to tackle its 340-billion-euro debt load, under the assumption that it will not be able to borrow on international markets this year or next.

Concerns that a second rescue may trigger a credit event drove the cost of insuring Greek government debt against default to a record high of 1,600 basis points on Monday.

Five-year credit default swaps (CDS) on Greek government debt rose 58 bps on the day to 1,600 bps, according to data monitor Markit, meaning it cost 1.6 million euros to protect 10 million euros of exposure to Greek bonds.

By comparison, Pakistan’s five-year CDS were trading around 880 bps.

The euro pared gains against the dollar and the U.S. stock market briefly turned negative after the downgrade. Brent crude oil also fell after the move increased investors’ nervousness over the economy and oil demand.

There are differences between the leaders of European Union states and the ECB, which remains opposed to private sector involvement in any Greek debt restructuring, saying it may set off a chain reaction in financial markets that would undermine the credit-worthiness of other stressed euro zone sovereigns.

EU leaders will discuss a new deal at a June 23-24 summit.

Ben May, an economist at London-based Capital Economics, said he did not see the S&P downgrade as having a material impact on the timing of a new funding package.

“We believe some form of a second bailout package will be in place to avoid a disorderly default,” he said.

After failing to meet fiscal targets under the first bailout deal the government, which is trailing the conservative opposition in opinion polls, has decided to raise taxes and slash spending more than planned this year to avoid default.

The prospect of more austerity and rising unemployment has fueled 20 days of protests in central Athens with a big general strike planned for Wednesday, challenging the government as its new package is headed for parliament for a vote.

(Editing by James Dalgleish and Leslie Adler)

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