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Home > Blogs > QFINANCE Editor > QFINANCE: News Briefing (August 8–14, 2012)

QFINANCE: News Briefing (August 8–14, 2012)

Each week brings you some of the biggest news stories from the past five days in finance and business – essential reading to keep you up to date with latest topics.

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Wednesday August 8

Chinese economy seems to be finally stabilizing as industrial output and fixed-assed investment data showed, Reuters reported on Wednesday. After rate cuts in June and July to meet the official 2012 target of the year, the drop in consumer inflation suggests that the Chinese central bank is easing monetary policy further. In the UK, and following  accusations of laundering nearly $250 billion in collaboration with the Iranian government, Standard Chartered’s “strong rejection [of] the portrayal of facts” didn’t seem to convince investors as the British bank’s shares fell more than 16% on Tuesday. Reaching its lowest point in decades at £12.28, the group describes the allegations as “small clerical errors”, as reported by the FT.

Thursday August 9

Data released on Thursday showed a contraction of India’s factory output of -1.8%, the third fall in four month reported the HindustanTimes. Indian Finance Minister announced upcoming actions to limit the economical slowdown which, until recently, was an engine of global growth. In China, more data was published showing a slowdown of the country’s exports and import growth for the second month last July. While imports growth was down to 4.7% from a year earlier from 6.3% in June, exports only grew by 1% down from 11.3% according to the BBC. One of the direct impacts of this slowdown was the drop in the Oil. Bloomberg reported that futures fell 1.6% in New York following the news that China’s net oil imports shrank to the lowest level in the past year.

Friday August 10

Manchester United football club listed 10% of the group’s value on the New York Stock Exchange on Friday. Bought up in 2005 in a £790m leveraged buyout, the club had experienced floating in Hong Kong and Singapore last year but was forced to withdraw because of weak demand,  The Independent reported. In China, the newly published figures have put pressure on the central bank and led analysts to question analysts’ positions."We think the central bank should move as quickly as possible to stabilize the economy. I expect there will be at least one more RRR cut and interest rate cut this quarter," Xiao Bo, economist at Huarong Securities in Beijing, told Reuters.

Monday August 13

In the UK, Bank of England’s governor Sir Mervyn King was challenged by an outgoing member of the bank’s Monetary Policy Committee on Monday. Adam Posen told the FT that the bank could easily be more effective in fostering economic recovery if it got rid of “anguished religious ethics” over what is thought to be a “reasonable intervention”. King was mainly criticized on his insistence that central bank should only buy government bonds in quantitative easing programs and to stimulate growth. Meanwhile newly published data from Eurostat showed a contraction of 0.2% in the eurozone’s economy from April to June compared to the previous quarter, the BBC reported.

Tuesday August 14

Following very positive retail sales figures in the US, oil prices rose considerably on Tuesday as reported by The Wall Street Journal. While Brent futures were up 10% to $113.70 a barrel, Nymex oil futures rose to $93.77 per barrel, up 1.1%. In Asia, reports from the AFP declared that China has signed agreements with neighbouring North Korea to aim for a joint development of both countries’ economies. China's commerce ministry declared that the agreements covered the creation of management committees for electricity supply and agricultural cooperation between the two countries. Meanwhile, Standard Chartered’s boss is reported to have flown to New York to negotiate with the concerned US regulators, BBC reported.

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Tags: banking , central banks , China , corporate governance , credit rating agencies , ECB , economic recovery , emerging markets , EU , European Central Bank , eurozone , financial crisis , fiscal stimulus , France , Germany , Greece , hedge funds , IMF , inflation , international differences , International Monetary Fund , Japan , regulation , sovereign debt , stocks and shares , transparency , UK , US , US economy
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