What a lousy day at the stock markets today or rather it has been like this for the past 9 months or so? The major markets across Asia were down by 2% to 3% today and most of them are currently in their 2 years low. Did the investors panic in view of the 911 aniversary today? This week in particular, markets were once again dogged by deteriorating sentiment surrounding the credit crisis and economic growth prospects. The 158 years old investment bank Lehman reported its worst ever quarterly loss overnight (passed 2 Quarters of losses- USD6.5b) and told investors it would be selling its property assets and spinning off its asset management arm. The announcement followed one from Korea Development Bank that capital injection talks had ended without reaching an agreement, painting a gloomy picture that the credit crisis isn’t going away. The decline in most major markets erased all of the gains from Monday’s rally, following the announcement by the US government it would take control of mortgage giants Freddie Mac and Fannie Mae to reduce systemic risk. With all the selling, where does the funds go? Perhaps the article below could throw some light on the matter.
The Standard: Amid the global economic slowdown,fund managers withdrew US$28.5 billion (HK$222.3 billion) of funds under management during the second quarter, according to a quarterly survey by Hongkong and Shanghai Banking Corporation covering 12 fund houses around the world.It indicates the investors' concern about the inflation and economic slowdown in Asia. They continue to take a conservative position, moving away from volatile equity markets and finding a safe haven in cash and bonds," said Bruno Lee Kam-wing, HSBC's head of wealth management for personal financial services. Meanwhile, more managers have become bearish about the equity market in the third quarter. "Managers are not optimistic about the equity markets of Asia-Pacific excluding Japan in the third quarter and 22 percent of them hold an underweight view compared to zero last quarter," said Lee. Money managers with increased towards equities in North America, Japan, emerging markets and Greater China in the coming quarter, due to the blurry prospects under the global credit crunch and economy slowdown, Lee added. However, 57 percent of managers hold an overweight view on emerging market or high- yield bonds in the third quarter compared to 25 percent in the previous quarter. Equity funds recorded outflows of US$50 billion, while balanced funds and money funds reported inflows of US$15 billion and US$11 billion respectively. More than 20 percent of funds in Asia- Pacific excluding Japan had an outflow in the second quarter compared to a 6.3 percent inflow in the first quarter.
* Picture above. Shangrila Leisure farm in Taiwan.
* NZ cuts interest rate by 50 basis point yesterday leaving the bench mark interest at 7.5%. Meanwhile, Bank of Korea leaves its key interest rate unchanged at 5.25% for the month of September and may remains so if inflation falls further.
* Ah Mad racist- 3 years of suspension and still defiant!
* MT is no longer being blocked. Another flip-flop decision!
* Forbes: Malaysia's annual factory output growth slowed to an 11-month low of 1.8% in July from a revised 2.2% in July. Earlier analysts' forecast for the July readings was at a rise of 2.4%.
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