Global Markets Archives - Page 20 of 55 - Money Morning - Only the News You Can Profit From
Sorry Wall Street – Asia is the New King of the Global IPO Market
The United States – and Wall Street – is surrendering its mantle as the global center for intial public stock offerings (IPOs).
In fact, unprecedented demand for IPOs in Asia has reduced the U.S. share of the global IPO market to an all-time low.
With another $10 billion in IPO deals expected to be completed by the end of this year, the total amount raised worldwide for all of 2010 will approach $145 billion.
With $76 billion raised – including $22.1 billion from Agricultural Bank of China Ltd., alone – China topped the field by raising the most money of any single country.
No U.S. company raised more than $700 million.
This says a lot about the respective outlooks for the two countries' economies. And it also tells us a great deal about how we should be investing our money.
Let me explain.
Singapore Moves to Restructure Asia's Stock Exchange Model With Australia Merger
Singapore Exchange Ltd. (SGX) announced yesterday (Monday) it agreed to buy Australia's main stock exchange, ASX Ltd., for $8.3 billion. The deal came about because both countries seek strength against growing Asian market competition, and Singapore strives to be a more sophisticated global financial center.
In a cash and stock deal, Singapore's stock market operator is offering A$48 (U.S. $47.11) for each ASX share, consisting of A$22 in cash and 3.743 SGX shares per ASX share. The offer is at a 37% premium to what ASX shares traded on Friday.
"The combination of ASX and SGX, offering innovative new products and services to the market, will allow customers to maximize future opportunities, where Asia Pacific takes center stage globally as the source for capital, wealth creation and trading opportunities," SGX Chief Executive Officer Magnus Bocker said in a joint statement.
Wall Street Bonuses Will Cost Us All in the Long Run
Wall Street firms may not be reaping the record-breaking revenues of 2004-2007, but they're paying themselves the lofty bonuses of that lavish era – and they're doing it at our expense and with the government's blessing.
Wall Street's pay packages, including bonuses, are set to total 4% more in 2010 than in the already record year of 2009, The Wall Street Journal recently reported.
I yield to nobody in respect for the investment banking business – having served as an investment banker for 27 years – but these salaries and bonuses derive from U.S. Federal Reserve subsidies, and are mostly being taken out of the hide of the rest of us.
Wall Street's record bonuses come out of bank earnings that have been pretty robust, though not necessarily record-breaking. This is mainly the result of two Fed subsidies:
How to Profit From Europe's Stealthy Resurgence
European countries – both inside and outside the Eurozone – are slashing their budget deficits. Sure, some – like Greece and Spain, have to. But others are too. And here's the surprising reality: Europe may gain from its fiscal pain – and its deficit-trimming actions offer the best hope for a lengthy recovery. Find out how, in this free report.
Toyota Racks Up Recalls as Automakers Adopt More Proactive Safety Stance
Toyota Motor Corp. (NYSE ADR: TM) added another set of recalls yesterday (Thursday) to its rocky year.
Toyota announced it needed to repair 1.66 million autos worldwide for brake-fluid leak issues. The newest development brings the total number of Toyota vehicles recalled worldwide in the past year to about 14 million.
The company said it needed to fix rubber seals on about 740,000 vehicles in the United States and 599,000 in Japan, as well as some models in European markets, including Avalon and Lexus sedans and Highlander sport-utility vehicles. A small amount of brake fluid was able to leak from the master cylinder and gradually reduce braking performance and cause a "spongy" feeling in the brakes, according to a company spokesman. Cars affected have had factory-filled brake fluid replaced with brake fluid that is not "genuine" factory fluid.
Author Chat: Money Morning's Martin Hutchinson Talks About "Alchemists of Loss"
The Nobel Prize panel granted its top award to seven leading economists – whose theories went on to cost investors trillions of dollars in losses.
This story – as well as some of the other top financial fiascos through the ages – is detailed in the new book, "Alchemists of Loss: How Modern Finance and Government Intervention Crashed the Financial System," which was written by Martin Hutchinson, a former merchant banker and Money Morning columnist, and Kevin Dowd, an economist and respected academic.
Money Morning Executive Editor William Patalon III recently sat down with Hutchinson, to talk about the book. Here are some excerpts from that discussion.
Don't Miss Out on the Global Stock Rally
Indices across the world rose last week in what looks to be the beginning of a historic stock rally.
Meanwhile, the iShares Emerging Markets ETF (NYSE: EEM) rose 1.7%, the iShares FTSE/Xinhua China 25 Index (NYSE: FXI) rose 3%, the iShares MSCI Switzerland Index fund (NYSE: EWL) rose 3%, and the iShares MSCI Australia Index Fund (NYSE: EWA) rose 3.6%.
Among our favoried emerging markets and sectors, iShares MSCI Turkey Index Fund (NYSE TUR) blasted 6.5% higher, the Market Vectors Latin American Small Cap Index Fund (NYSE: LATM) rose 3.5% and Market Vectors India Small Cap Index Fund (NYSE: SCIF) rose 2.4%. The SPDR Gold Trust (NYSE: GLD) rose 2.1% and the Market Vectors Junior Gold Miners ETF (NYSE: GDXJ) rose 2.6%.
You Heard It Here First: A Global Currency War is Being Fought – And There Will Be No Victors
Brazil's finance minister, Guido Mantega, recently acknowledged to the global investment community what most trade officials already believed: An "international currency war" has broken out.
And, in this war, there won't be a real victor.
"We're in the midst of an international currency war, a general weakening of currency," Mantega told The Financial Times. "This threatens us because it takes away our competitiveness."
Mantega's comments came just weeks after Japan joined Switzerland in intervening in the foreign-exchange market. But the reality is that the currency war has been under way since 2008.
At least, that's when Money Morning Chief Investment Strategist Keith Fitz-Gerald first warned that countries – most notably the United States – would debase their currencies in a race to boost their exports and keep economic growth afloat.
"The government has adopted a weak-dollar policy," Fitz-Gerald said in an interview in March 2008. "They're sending out a message loud and clear: 'We want you to sell the dollar.'"
By holding the central bank's benchmark lending rate down in a record low range of 0.00% to 0.25% for close to two years now and buying up Treasuries in a policy known as "quantitative easing," the U.S. Federal Reserve is effectively debasing the dollar.
But the U.S. central bank isn't alone.
De-Coupling Back in Vogue as Emerging Economies Outshine the U.S.
While the U.S. economy is struggling to break its slump, growth remains strong in other places around the world – so strong, in fact, that analysts are breaking out a term that's spend much of the past two years on the shelf: De-coupling.
U.S. gross domestic product (GDP) will meandered along with a meager 1.7% expansion in the second quarter and is expected to grow by less than 2% for the full year.
Meanwhile, Brazil's GDP is on pace to expand by 7.5%, India's economy is projected to grow by 8.5% and China's economy is expected to grow by 9.5% this year.
Emerging market economies are moving ahead at such a brisk rate that their combined GDP will be bigger than developed countries by 2015, according to the World Bank.
Now, the biggest Wall Street firms – including Goldman Sachs Group Inc. (NYSE: GS) Credit Suisse Group AG (NYSE ADR: CS) and Bank of America (NYSE: BAC) – are betting that the global economy has de-coupled from the United States, and will shake off any slowdown in the world's largest economy.