Hong Kong, China (CNN) – Good economic news was lacking in Asia-Pacific this Thursday. With nothing to cling to, Japan’s Nikkei and Australia’s ASX 200 fell in morning trading. The Hang Seng and Shanghai Composite joined them down the slide in the afternoon. By the close, all major markets had fallen between 1% to 2%.
The strength of the Japanese yen hit export-related stocks hard, pulling the Nikkei down 1.25%. In early morning trade, the yen touched 76.41 to the U.S. dollar, creeping ever closer to its post-war record of 76.25. Toshiba and Hitachi were the biggest export losers all day, closing down 4% to 4.5%. As of 5pm Hong Kong time, the yen was trading at 76.61 to the dollar.
Hong Kong, China (CNN) – Today in Asia-Pacific, markets closed the day higher across the board, adding to moderate gains this past Friday. Better-than-expected GDP data from Japan and four-month high retail numbers from the United States helped boost investor confidence. Markets started in the green and kept climbing through the day. By the close, we saw major markets gain between 1.30% and 3.26%.
The Nikkei ended up 1.37% to close past the psychological 9,000-mark. Japan’s latest GDP number also came out. They showed the country’s economy shrank 1.3% year-on-year. Anemic? Yes. A good number, regardless? Definitely. Forecasts had expected Japan’s GDP contraction to come in at about 2.5%. The yen, though, is still a chronic concern for exporters. As of 4.30 pm Hong Kongtime, it was trading at 76.82 to the dollar. Automakers veered around the yen’s strength. Toyota rose 2.9%, Nissan rose 3.3% and Honda throttled ahead at 3.4%.
Hong Kong, China (CNN) – Oh my! In the past 24 hours, three of Asia’s dragon economies have traded in their scales and roars for shaggy fur and whimpers. That’s thanks to the shock from S&P’s unprecedented downgrade of the U.S. debt rating last Friday.
China, Hong Kong and South Korea are now officially bear market economies. They’ve lost at least 20% of their value from their previous peaks.
Today, Hong Kong’s Hang Seng crossed into bear territory after falling 22% from its November 2010 high. China’s Shanghai Composite has fallen 20% from early April. South Korea’s KOSPI Composite has tanked 20% from its recent high in May.
Hong Kong, China (CNN) – Cut cost, boost revenue. From global businesses to national governments across Europe and North America, this seems to be the monetary mantra of 2011. For HSBC, one of the world’s largest banks, it’s no different.
Today, HSBC confirmed the first steps of its Great Realignment around the world. To cut costs, an eye-popping 25,000 employees will lose their jobs between now and 2013. To boost revenue, retail banking will be scaled down while more lucrative corporate banking will be scaled up.
Right after the plan was unveiled late Monday in Hong Kong, HSBC’s London share price popped 4.5% in early trade. The company’s better-than-expected first half earnings likely supported that as well. The data, also out today, showed HSBC’s earnings for the six months to June came in at $11.5 billion – 3% up from the first half of 2011 and 45% up from the second half of 2010. Analysts had expected pre-tax profits of $600 million less. The world’s local bank needs more good news like this.
Hong Kong, China (CNN) – Washington’s debt deadlock continued to rattle markets here in Asia-Pacific. We saw steeper declines than those on Wednesday with financial-related stocks weighing heavy on bourses across the region.
The Nikkei closed down 1.45% breaching that psychological 10,000 point mark to close at 9,901.35. Auto exporters and financials led today’s slide. Toyota and Nissan each fell more than 2%; Mitsubishi UFJ and Sumitomo Mitsui closed down about 1.5%. One of the biggest losers of the day was in the tech sector: Advantest fell by nearly 7%. The world’s largest maker of memory-chip testers announced its operating profit fell more than 50% from last year. On the flip side, Hitachi Construction jumped nearly 4% after a surge in its Q2 net profit.
The Hang Seng ended nominally higher, rising 0.13% to close at 22,570.74. It was a similar picture to that on the Nikkei with financials leading the fall. China Construction Bank closed down 0.94% while Industrial and Commercial Bank of China closed down 1.67%.
Financials dragged things down on the mainland as well. The Shanghai Composite closed down 0.54% to end at 2708.78. Beijing has also ordered new directives on loans, particularly in real estate, which soured that industry’s mood.
The Seoul Kospi followed the region lower to close 0.85% at 2,155.85. Asiana Airlines fell 4.74% after one of its cargo planes crashed earlier Thursday morning. Meanwhile, insurance companies were rattled by continued torrential rains slamming the country. LIG Insurance closed down 0.55%, Dongbu Insurance paired earlier losses to close exactly flat at 0.00% while Samsung Fire & Marine pulled out of earlier negativity to post a gain of 0.85% at the close.
Down under, the ASX 200 fell 1.62% to close at 4463.80 with financials and retailers leading the slide. Investment bank Macquarie Group closed down about 4.5%. Wesfarmers, the country’s second biggest retailer, fell about 2.39%. Retailers are worried about a possible interest rate hike in August when the Reserve Bank of Australia next meets. That follows yesterday’s higher than expected consumer price index figure of 0.9%. A reading of 0.7% was expected.
Asia-Pacific Currencies Gain
Major currencies in the Asia-Pacific strengthened against the U.S. dollar yet again as faith in the greenback – and Washington – continues to waver.
Over the past year, the U.S. dollar has weakened by almost 10% on the same-named U.S. dollar index. That measures its value against a basket of major world currencies including the Euro, the Japanese yen and the British pound.
In just the past month, when U.S. debt ceiling talks began to come to a boil, the Japanese yen has strengthened by nearly 4%. That has occurred against the backdrop of growing fears about the U.S. with investors moving into the safety of the Japanese currency.
And it’s a similar story with the Australian dollar. In the past month the currency has strengthened about 4.5% against the greenback. Last October it reached 1-to-1 parity with the U.S. dollar and it has not looked back since. Just yesterday, the Aussie neared a 30-year high on fears about the U.S. debt ceiling, compounded by that higher than expected CPI.
We’ve seen the same strengthening in theSingaporedollar. In the past month it’s strengthened about 3% against the dollar.
What does this mean?
There are winners and there are losers. It hurts exporters as it reduces their profits when they repatriate their earnings back home. It impacts travelers carrying U.S. dollars as it weakens their buying power in countries with stronger currencies. However, it may give a lift to retailers as the buying power of domestic consumers strengthens as consumers get more bang for their buck.
Hong Kong, China (CNN) – “You can’t pick your day.” That’s what Samsonite CEO Tim Parker told me in our Thursday live interview on World Business Today. Earlier that morning, the luggage maker had debuted with fanfare and champagne on the Hong Kong stock exchange. But the fizz had faded within the first hour of trade – share price had already tanked by nearly 11%. By the time Parker and I had our face-to-face, the Hang Seng had closed and Samsonite stock was still underwater – more than 7.5% off its initial IPO price of HK$14.50. Still, the CEO seemed upbeat.
“I wouldn’t say it’s stumbling. The market stumbled, we just stumbled a little less than the markets so to end up where we have done, to be honest, I feel is not a bad result considering very, very turbulent conditions.”
To be sure, those conditions are many. On Monday, Standard & Poor’s downgraded Greece’s credit rating to the worst in the world. On Tuesday, Asia’s first and third largest economies announced higher May inflation numbers – China’s 5.5% was its highest rate since July 2008. India’s May inflation sped in higher than expected at 9.06%. On Wednesday, the Dow Jones Industrial Average had plunged by 200 points in intraday trading, posting losses for six weeks in a row.
Hong Kong, China (CNN) – Kaching, kaching, kaching!
That’s the sound of billions of dollars being made in Hong Kong. It’s been echoing across our airwaves over the past twelve months from a series of high-profile IPOs by non-Asian companies. If these companies were moths, the bright allure would be the shimmer of money from mainland China’s nouveau riche.
Luxury-brand IPOs account for a large chunk of the billions recently being made in Hong Kong. Italian fashion house Prada could raise as much as $2.7 billion in its share offering later this month. Luggage maker Samsonite just bagged about $1.25 billion in its share sale last week. Milan Station, a local luxury-bag reseller, aimed to raise just $35 million in its May IPO. Actual requests shot past $7.4 billion. And last year, L’Occitane International’s IPO locked in more than $700 million in France’s first foray onto the Hang Seng, Hong Kong’s benchmark bourse.
As if that weren’t enough, non-luxury brand IPOs accounted for even more of Asia’s shine in the past year. Glencore, the world’s largest clearinghouse for commodities, cranked out about $10 billion in May. AIA and the Agricultural Bank of China together raised $50 billion in their IPOs last year – the latter of which was the largest in history.
All told, these companies will have raised an astounding $64 billion through Hong Kong IPOs in the last twelve months.
But there’s also a $64,000 dollar doubt that’s starting to creep into investor minds. With growing signs that the world economy is slowing down, is the attractive glow of Hong Kong fading with it?
(CNN) – How much money do you make in an hour? If you’re not rich, you probably think it’s too little. And thousands of people around the world likely feel the same as you. Here in Asia yesterday - International Labor Day - financially-frustrated protesters hit the streets of Hong Kong, Seoul, Manila, Jakarta and many other capital cities. Their demands: higher pay and stronger worker protection. Their criticisms: soaring food, fuel and property prices and an ever-widening income gap between the rich and poor. And pressure from the people is starting to squeeze gains out of governments.
On May 1 for example, Hong Kong finally premiered a minimum wage for the masses: HK$28 (US$3.60) per hour. The battle for this relative financial security was hard fought. Since the idea was first floated in 1999, the territory’s business leaders have lobbied against the idea. They claim the forced minimum would cause job losses because companies might scale back their employee numbers. Unions say the new minimum is a step in the right direction but that US$3.60 is still not high enough for low-income families. Union leaders had been asking for HK$33, or about US$4.20.
Hong Kong, China (CNN) – Tech analysts in the U.S. are abuzz over predictions that the next generation of smart phones - including Apple's iPhone 5 - will be enabled with so-called cashless technology.
NFC - which stands for Near Field Communication - basically allows two devices to exchange data when they come within a few inches of each other. In Apple's case, it would enable iPhone5 users to simply “wave and pay.”
It's actually not a new technology. Samsung Electronics is already experimenting with NFC in mobile devices in certain markets. And some cities in Asia and Europe have embraced cashless technology for transportation, such as London’s Oyster card, for years.
Here in Hong Kong “wave and pay” has been popular for more than a decade, long enough for it to have become part of daily life.
There are only 55 MBA students in Emmanuel Poupelle's class at Hong Kong University. When he walked into his orientation session earlier this year, the French citizen scanned the room. The majority of his classmates were not Asian. He estimates 60 percent were westerners.
“Probably the first thing we thought is we made the right decision because that’s what we were looking for. That’s what we applied for... to be fully invested in China, fully invested in Asia,” Poupelle remembers. He's among a growing number of MBA students targeting Asia-based programs for their degree. The ultimate goal: landing a job in Asia.
Classmate Stuart Mercier of Canada chose Hong Kong to enroll in business school because he wants, eventually, to go into real estate in greater China. "I think in this region, you see the projections of growth that are five, six, seven-times what they are for the Western world for the next decade. And so this was really the opportunity to follow the growth."
Because of China's growth, the number of MBA programs on mainland China has tripled to more than 250 in the past decade.
Follow the test scores
Most business schools require GMAT test scores as part of the application process so the GMAT is a good measure of where people are applying. There's been a big spike in GMAT scores being sent to business schools in Asia.
"Asia is on almost an exponential growth pattern," says David Wilson, President and CEO of Graduate Management Admission Council which owns and administers the GMAT exam.
It's not just westerners but also an increasing number of Asian test takers who are applying within Asia. Wilson says a majority of Asian test takers (67%) are still sending their scores outside of Asia to international business schools but that number is down 4 percent in the past four years.
Wilson also notes an interesting subtrend. A good number of Chinese applicants are "returnees" – those people from Asia who immigrated to the west and who are now coming back. Since they are bilingual, they are also highly marketable in mainland China.
Salaries: Show me the money!
When applicants research MBA programs, they no doubt want to know how much they can earn with a degree.
Most schools provide data on the average salary an MBA graduate earns after finishing the program.
The Financial Times ranks global business schools every year. Most of the top ten schools ranked by the FT this year show average salaries between $140,000 to 160,000 per year.
The only Asian school in the top ten was Hong Kong University of Science and Technology (HKUST), which is also affiliated with Kellogg in Chicago. The average salary at HKUST was lower than the other ranked schools at $115,000 per year.
The associate dean of HKUST's MBA program, Steve DeKrey, cautions applicants to put this number in perspective. "We send a lot of people (graduates) to China. Salaries haven't caught up yet so our average is going to be a little low. If you stay in Hong Kong? Sure, it'll be a little higher. If you stay in finance? Higher yet. So there's a range."
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