Taiwan Cuts Capital Gains Tax on Share Sales, Removes Threshold

Taiwan Cuts Capital Gains Tax on Share Sales, Removes Threshold

Taiwan lawmakers voted to roll back provisions of a capital gains tax on stock sales of more than NT$1 billion ($33.3 million) and removed an index price threshold that depressed shares.

Tax on capital gains from transactions of more than NT$1 billion was reduced to 0.1 percent from the 2.25 percent under the original law. Lawmakers also removed a 8,500-point close threshold for the Taiex index before the tax could go into effect. Legislative Yuan President Wang Jin-pyng announced the passage of revisions in a special legislative session today. Read more of this post

Foreign Funds Erase Inflow Into Indonesia Stocks This Year; Philippine Stocks Enter Bear Market as Foreign Outflows Surge

Foreign Funds Erase Inflow Into Indonesia Stocks This Year

Foreign fund flows into Indonesian equities turned negative for the first time this year after investors pulled money from the stock market for a 22nd day.

Foreigners sold a net $68 million worth of Indonesian stocks yesterday, according to data compiled by Bloomberg, taking total outflows this year to $20 million. The Jakarta (JCI) Composite Index fell for a fifth day, dropping 0.2 percent to 4,418.872, its lowest close since Jan. 28. Read more of this post

Brazil’s World Cup Scorn Deepens Rout as Budget in Danger

Brazil’s World Cup Scorn Deepens Rout as Budget in Danger

The record rout in Brazilian bonds is deepening on speculation President Dilma Rousseff’s vow to boost spending to placate protesters will swell the budget deficit at a time when a stagnating economy saps tax revenue.

Brazil’s real-denominated bonds due 2023 have plunged this month, causing yields to jump to a 15-month high of 11.63 percent on June 21 even as the Treasury offered to buy back the notes in five unscheduled auctions this month. In the same span, the cost to protect its sovereign dollar debt against losses for five years soared to a 20-month high and exceeded that of lower-rated Turkey for the first time in seven years. Read more of this post

Abe Recovery Pits Graduate Jobs Against Senior Savings

Abe Recovery Pits Graduate Jobs Against Senior Savings

In the heart of Tokyo on a March afternoon, Akitsugu Yamamoto, clean-cut and clad in a dark business suit, is looking for a job at an employment agency whose name translates as New Grad Hello Work.

In a couple of days, Yamamoto, 27, will be leaving Waseda University, one of Japan’s top educational institutions, with a graduate degree in public management — and no job offers, Bloomberg Markets will report in its August issue. Read more of this post

Taiwan’s Prodigal Companies Come Home as China Labor Costs Rise

Taiwan’s Prodigal Companies Come Home as China Labor Costs Rise

For eight years, the former Taroko Textile Corp. factory in Hsinchu County, Taiwan, has been empty, a victim of the migration of manufacturing to the mainland. Now, as China’s supply of cheap labor wanes, work is returning.

ITEQ Corp. (6213), which makes materials electronics companies need to build circuit boards, is installing equipment as part of a NT$2 billion ($66 million) refurbishment to begin production by the end of 2014, said Eric Liu, head of investor relations. It will be the company’s first new factory in Taiwan since 1998. ITEQ began moving work to Guangdong in southern China in 2002. Read more of this post

Lexus Made in Japan Risks China Irrelevance

Lexus Made in Japan Risks China Irrelevance

When shopping last year for his first car, Will Zhang considered a Lexus CT200h and a BMW 320i. Though he preferred the Lexus, he went with the BMW because at 340,000 yuan ($55,400) it was 18 percent cheaper.

“The Lexus has superior quality, performance and fuel economy,” said the 32-year-old manager at a Shanghai property developer. “But I chose the BMW for the price.” Read more of this post

Banks Could Face U.S. Home-Equity ‘Payment Shock,’ Moody’s Says

Banks Could Face U.S. Home-Equity ‘Payment Shock,’ Moody’s Says

Home-equity lenders could see delinquencies rise in the next two years as borrowers face a “payment shock,” Moody’s Investors Service said.

The majority of home-equity loans were issued during the housing bubble before the 2008 financial crisis when underwriting standards were “dismal,” Moody’s said today in a report. Those loans will reach the 10-year mark between 2015 and 2017, when borrowers who are paying only interest must start repaying principal, and some won’t be able to keep up, Moody’s said. Read more of this post

Hedge funds hope losing shorts on U.S. natural gas will pay off

Hedge funds hope losing shorts on U.S. natural gas will pay off

5:54pm EDT

By Barani Krishnan and Joe Silha

NEW YORK (Reuters) – This year’s early rally in U.S. natural gas prices dealt heavy losses to hedge funds that stubbornly maintained short positions in the face of brutally cold weather, and the price slide of the past two months has not yet erased losses that prompted some investors to flee the funds, industry sources say.

Sasco Energy, Skylar Capital and Copperwood Energy, funds founded by some of the most prominent names in gas trading, posted losses after misreading winter weather patterns in the first quarter that caused a spike in prices of gas used for heating, said the sources speaking on condition of anonymity. Read more of this post

Banks slow to revive Singapore trading desks after rate-fixing cull

Banks slow to revive Singapore trading desks after rate-fixing cull

5:33pm EDT

By Rachel Armstrong

SINGAPORE (Reuters) – Cost pressures and tougher regulation mean banks in Singapore are struggling to replace the 100 traders who left the market during a rate-fixing probe.

The world’s fourth largest foreign exchange center is still reeling from the crackdown, which has left volumes flowing through banks’ once vibrant interest rate and emerging market currency trading desks a long way below pre-scandal levels. Read more of this post

Puerto Rico – a vacation oasis overrun with high debt

Analysis: Puerto Rico – a vacation oasis overrun with high debt

2:55pm EDT

By Tiziana Barghini and Michael Connor

(Reuters) – Puerto Rico’s turquoise Caribbean waters lap white sandy beaches under year-round sun, making the island a safe place to relax.

But beyond its shoreline, U.S. investors see a threatening view, a tropical version of a near-bankrupt industrial city – Detroit, whose stressed finances are run by a state-appointed manager. Read more of this post

China’s tight liquidity to continue until mid-July: experts

China’s tight liquidity to continue until mid-July: experts

Staff Reporter

2013-06-25

The Shanghai Interbank Offered Rate, or Shibor, had a drastic downward correction on the last trading session last week after a sudden surge on June 20, but the persistent tight liquidity conditions in China’s financial sector showed no signs of reversing, with the overnight rate still standing at a comparatively high level of above 8%, reports the Shanghai-based National Business Daily. The current situation regarding a shortage of funds is expected to continue throughout the rest of June, and may extend to mid-July, the paper said, citing banking executives. The overnight rate surged between June 7 to June 20 amid tightening liquidity, boosted by the delivery of fiscal deposits, income tax payments, and a drop in incremental foreign exchange deposits. The Shibor hit new highs on June 20, with the overnight rate surging 578.4 basis points to 13.444%, a record high, and the seven-day Shibor rising 292 basis points to 11.004%. On June 21, the overnight Shibor fell 495.2 basis points to 8.492%, and seven-day Shibor dropped 246.1 basis points to 8.543%. But 14-day and one-month Shibor continued to rise, adding 97.2 and 29.9 basis points, respectively, to 8.566% and 9.698%, the paper said. Zhang Chenhui, director of Financial Institute of Development Research Center under the State Council, said that liquidity should remain tight for about one more month, unless the People’s Bank of China, the nation’s central bank, moves to ease liquidity. International rating agency Fitch Group said last Friday that the Shibor rates are facing upward pressure for the rest of the month as more than 1.5 trillion yuan (US$244 billion) of yuan-designated wealth management products will expire during the period. UBS Securities also expects the fund shortage to last until mid-July, citing five main factors: the country’s five major banks paying fiscal bonuses of 240 billion yuan (US$39 billion), a net redemption of wealth management products or related financing pressure, the comparatively high leverage payments by financial institutions, the delivery of banking reserves of around 800 billion yuan (US$130 billion) in early July, and the delivery of fiscal deposits worth around 450 billion yuan (US$73 billion) in mid-July as well.

The World Bank should stop ranking countries on how business-friendly they are, according to an independent review that said an annual listing creates perverse incentives for governments

World Bank Is Told to Dump Rankings From ‘Doing Business’

The World Bank should stop ranking countries on how business-friendly they are, according to an independent review that said an annual listing creates perverse incentives for governments.

The bank’s annual “Doing Business” publication should continue under a new title and with a new methodology, Trevor Manuel, a former South African finance minister who led the audit, told reporters in London today. Read more of this post

The $70 billion All Weather Fund managed by hedge fund titan Ray Dalio’s Bridgewater and widely held by many pension funds to survive stormy markets is emerging as a big loser in the recent selloff in global markets

Exclusive: A big Bridgewater fund is under the weather

5:21pm EDT

By Katya Wachtel and Jennifer Ablan

NEW YORK (Reuters) – A $70 billion portfolio managed by hedge fund titan Ray Dalio’s Bridgewater Associates and widely held by many pension funds to survive stormy markets is emerging as a big loser in the recent selloff in global markets.

The Bridgewater All Weather Fund is down roughly 6 percent through this month and down 8 percent for the year, said two people familiar with the fund’s performance.

The All Weather Fund is one of two big portfolios managed by Bridgewater and uses a so-called “risk parity” strategy that is supposed to make money for investors if bonds or stocks sell off, though not simultaneously. Read more of this post

The Boglification of alternatives; “Institutions are finally realizing the cost of hedge funds, including fees, lack of liquidity, lack of transparency, and lack of regulation, are starting to outweigh the benefits”

The Boglification of alternatives

Advisers, institutions view fees as the main reason to avoid alts, Morningstar/Barron’s survey finds

By Jason Kephart   |  June 24, 2013 – 1:55 pm EST

When it comes to alternatives, investors are finding out what John Bogle knew many years ago: You get what you don’t pay for.

A majority of financial advisers and institutions now view fees as the main reason to avoid alternatives, up from 38% and 39% respectively in 2009, according to Morningstar Inc. and Barron’s 2012 alternative investment survey. Read more of this post