SET dips as US troubles deepen Historic downgrade rattles Asian markets

Thai stocks closed 1.39% lower yesterday in volatile trade as most Asian markets tumbled in the wake of last week's historic ratings downgrade of the United States.

The Stock Exchange of Thailand index dropped 20 points at the opening, and slid by as much as 30 points to a low of 1,061.69 at the end of the morning session before bargain-hunting helped curb losses.

The SET index closed at 1,078.19, down 15.19, in trade worth 41 billion baht. Losers outpaced gainers 134 to 373, with 97 shares unchanged. Energy stocks led the sell-off, closing down 1.26%, banks dropped 0.91% and information and communications technology shares dropped 1.67%.

Read More

6:32 PM | 0 comments

ADB warns complacency

ADB warns complacency threatens to derail 'Asian century'

• Published: 3/08/2011 at 12:00 AM
• Newspaper section: Business

TOKYO : Asia could be as wealthy as Europe by mid-century, but only if it tackles key challenges from inequality and corruption to climate change, says the Asian Development Bank.

Kuroda: Resource management the key

Based on current trends, Asia will make up half the world's economic output by 2050, and another 3 billion people will have joined the ranks of the affluent, their incomes matching those of Europe today.

But the ADB study also notes the world's fastest-growing region remains home to almost half the world's absolute poor, who earn less than US$1.25 a day.

Asia's decades-long march to prosperity, the ADB study said, was being led by seven economies with more than 3 billion people among them - China, India, Indonesia, Japan, South Korea, Thailand and Malaysia.

Under the best-case scenario, Asia's combined GDP - also including poorer nations such as Laos and Pakistan - will rise from $17 trillion last year to $174 trillion in 2050, with per capita GDP of $40,800 in current terms.

But for Asia's rise to be sustainable, the study warns, the diverse region must emulate the past successes of top performers Japan, South Korea and Singapore by promoting inclusive and equitable growth.

"Asia is in the midst of a historic transformation," said the report, Asia 2050: Realising the Asian Century, commissioned by the Manila-based ADB and launched by president Haruhiko Kuroda in Tokyo.

Mr Kuroda pointed out that developing Asia had led the way out of the global financial crisis and recession with a V-shaped recovery.

"By nearly doubling its share of global gross domestic product to 52% by 2050, Asia would regain the dominant economic position it held some 300 years ago, before the industrial revolution," the report said.

However, the study warned that Asia's rise is by no means inevitable.

"Many see the ascendancy of Asia - or 'the Asian Century' - as being on autopilot, with the region gliding smoothly to its rightful place in destiny," wrote Mr Kuroda in a foreword to the report.

"But complacency would be a mistake. While an Asian century is certainly plausible, it is not preordained."

The report warned that emerging economies face the risk of being stuck in the "middle-income trap" as bursts of rapid growth, driven by export-based manufacturing, are followed by periods of stagnation or decline.

It highlights other key challenges - rising inequality within and between countries, poor governance and corruption in many of them, and intensifying regional competition for finite natural resources.

In the worst case, it warned, Asia could face "a perfect storm" of bad macroeconomic policies, unchecked financial sector exuberance, conflict, climate change, natural disasters, changing demography and weak governance.

To make Asian growth sustainable, the study said, its countries must address poverty, equality of access and opportunity, and focus on education, entrepreneurship, innovation and technological development.

Climate change is "a wild card for Asian development", warned the study, which stressed that Asia was already hit by more storms, floods and other natural disasters than any other region.

Global warming threatens to melt the glaciers that run from the Himalayas and other mountain ranges to feed Asia's major rivers, which provide water, food, fish and power for 2.8 billion people, it said.

"The anticipated affluence of some 3 billion additional Asians will put tremendous pressure on the earth's finite natural resources. "Out of self-interest, [Asia] will need to take the lead in radical energy efficiency and diversification programmes by switching from fossil fuels to renewable energy," said Mr Kuroda.

"How we handle vital resources such as water and food will determine whether we stay on the path of economic growth and development, or stumble into conflicts of scarcity." AFP

Read More

6:47 AM | 0 comments

US President Barack Obama

bama unfurls 11th-hour deal to avert US default

• Published: 1/08/2011 at 10:32 AM
• Online news: News

US President Barack Obama announced that he and top lawmakers had reached an 11th-hour deal to avert a first-ever US debt payment default that would have sown chaos across the world economy.

US President Barack Obama announced late Sunday that he and top lawmakers had reached an 11th-hour deal to avert a disastrous debt default that would have sown chaos in the world economy.

"I want to announce that the leaders of both parties in both chambers have reached an agreement that will reduce the deficit and avoid default, a default that would have had a devastating effect on our economy," he said.
With time running short before a midnight Tuesday (0400 GMT Wednesday) deadline, Obama warned "we're not done yet" and urged lawmakers "to do the right thing and support this deal with your votes over the next few days."
Leaders of the Democratic-held Senate and Republican-led House of Representatives were working to rally polarized lawmakers behind the compromise, with critical votes expected as early as Monday.
"To pass this settlement, we'll need the support of Democrats and Republicans in both the House and Senate. There is no way either party -- in either chamber -- can do this alone," said Democratic Senate Majority Leader Harry Reid.
"My hope would be to file it and have it on the floor as soon as possible," House Speaker John Boehner told fellow Republicans in a conference call, calling it a remedy to avert "a job-killing national default that none of us wanted."
As described by Obama and congressional leaders, the deal would raise the country's $14.3 trillion debt ceiling by about $2.4 trillion in two steps, while calling for roughly the same about in spending cuts over ten years.
Asian markets immediately cheered news of the deal, with the dollar climbing against the yen in Tokyo, Australian shares surging 1.4 percent, and Japna's Nikkei 225 index climbing 1.7 percent on news of the breakthrough.
The framework would fulfill one of the president's top goals: Raising cash-strapped Washington's ability to borrow by enough to avoid having another politically fraught debt battle before he faces reelection in November 2012.
Republicans crowed that the framework did not explicitly call for raising tax revenues -- at least in the first wave of deficit cuts -- despite Obama's repeated calls for increasing revenues from the rich and wealthy corporations.
The US government hit its debt limit on May 16 and has used spending and accounting adjustments, as well as higher-than-expected tax receipts, to continue operating normally -- but can only do so through August 2.
Business and finance leaders have warned default would send crippling aftershocks through the fragile US economy, still wrestling with stubbornly high unemployment of 9.2 percent in the wake of the 2008 global meltdown.
Without a deal, the US government would have to cut an estimated 40 cents out of every dollar it spends, forcing grim choices between defaulting or cutting back programs like those that help the poor, disabled and elderly.
It was unclear whether the accord would be enough to placate ratings agencies that have warned Washington's sterling Triple-A debt rating was in jeopardy -- a downgrade that would lead to a paiful spike in interest rates.
Obama trumpeted that the spending cuts would bring annual domestic government spending to the lower level in 60 years but promised they would not come so "abruptly" as to be a "drag" on the fragile US economy, still struggling with stalled growth and 9.2 percent unemployment in the wake of the 2008 meltdown.
The agremeent faced opposition from conservative Republicans close to the "Tea Party" movement, who have called for draconian cuts, and from liberal Democrats who have vowed to protect the US social safety net.
"The 'deal' he announced spends too much and doesn't cut enough," said Republican Representative and presidential candidate Michele Bachmann. "Someone has to say no. I will."
Democratic Representative Raul Grijalva, co-chair of the Congressional Progressive Caucus, rejected the deal in a blistering statement declaring: "This deal is a cure as bad as the disease. I reject it."
Democratic House Minority Leader Nancy Pelosi, who planned to present the framework to her rank-and-file on Monday, said "we all agree that our nationa cannot default" but gave Obama's announcement a chilly welcome.
"I look forward to reviewing the legislation with my Caucus to see what level of support we can provide," she said in a statement.
The framework would initially raise the debt ceiling by about $900 billion,
and tie a further $1.5 trillion increase to a special new US Congress committee charged with finding an equivalent amount of deficit-reduction over 10 years.
The panel would have 12 members, evenly divided between Republicans and Democrats, and would be tasked with reporting back by late November in order to hold votes by late December on its proposals.
A committee deadlock would trigger automatic spending cuts designed to be "unacceptable" to both Democrats and Republicans.

Read More

2:19 AM | 0 comments