Market Gazer Hong Kong - Japan - Germany - UK - North America
market review : asia sending the currency to over
Japan’s intervention on yen pushed the
Nikkei 225 Average to jump 217.25 points
or 2.34% to 9,516.56. The intervention
impact was limited to Japan, as Hang Seng
Index stood at 21,725.64 or up merely
0.14%, while Shanghai Stock Exchange fell
instead to 2,652.50 or slipping 36.02
points (-1.34%).
China was said to mull
raising capital adequacy
ratio for big lenders to
as much as 15% by the
end of 2012. Tier 1
capital ratio would be of 8%, with the
overall CAR at 10%. Yet another buffer
would be placed and would be set up to
4% for protection against economic
swings, plus another 1% cushion for
certain banks. In addition, lenders would
be required to have at least 6% of risk-
weighted assets. Currently, average CAR
among domestic lenders stands at 11%
with Tier 1 ratio at 9%. Another 4%
additional capital requirement would
push banks to raise more funds.
Compared to the new Basel rules, Chinese
setting will be tougher should it be
enforced. Basel rules implied 4.5% for
common equity in five years period, plus
2.5% buffer by the beginning of 2019,
with Tier 1 capital requirement at 6%,
which include common equity and
perpetual preferred stock.
Japan intervened in the currency market
to weaken the yen as it hit ¥82.87,
13 September 2010
¥85.00 against the dollar
and ¥110.77 against the
euro. The intervention was
the first in the last six years. Yen’s recent
strength has been a big concern for the
government as the country relies heavily
on exports. The move brought a relief to
the Japanese shares especially for
exporters. It remains to be seen however,
how long the effect will last because the
Japanese monetary authorities acted
alone in the intervention process. No solo
intervention has ever succeeded in the
past and this time around it could be of
the same story.
In China, Foreign Direct Investment (FDI)
rose 1.4% from a year ago in August to
$7.6 billion. Year-to-date, the FDI grew
18.1% to $65.96 billion, according to the
Ministry of Commerce on Wednesday.
JP Morgan Chase lowered
some of its ratings on
Japanese stocks on
Wednesday. Advantest
was lowered to UNDERWEIGHT from
OVERWEIGHT and Tokyo Electron Ltd.
was downgraded as well to NEUTRAL from
OVERWEIGHT. Another one, Nikon Corp.
had its rating cut to NEUTRAL from
OUTPERFORM by Mizuho Securities. The
downgrades’ negative effects were offset
by the positive impact from the
intervention as Advantest advanced
3.09% to ¥1,701, Tokyo Electron rose
3.43% to ¥4,375, and Nikon jumped 4.54%
to end at ¥1,473.
E-mail: market.techspeak@gmail.com
Page 1
 Market Gazer Hong Kong - Japan - Germany - UK - North America

Sinopec and Cnooc’s joint deal in OGX

Petroleo e Gas Participacoes SA has not
been finalized yet, according to the
Brazilian company. The company added
that several other companies from US,
Europe and Australia are also interested
to obtain the stake. Sinopec ended at
HK$6.43 or down 0.46%.

Foxconn International
Holdings was upgraded to
EQUAL WEIGHT from UNDERWEIGHT by
Morgan Stanley, with target raised to
HK$5.70 from HK$4.00, sending the
shares to jump 1.6% to HK$5.68.

Cathay Pacific has been downgraded to

NEUTRAL from OVERWEIGHT by HSBC.
Cathay Pacific was unchanged by the end
of the day at HK$20.35.

China Mobile said that

Apple’s iPhone and iPad
were unable to support its
high-speed wireless
network, thus preventing the company to
sell Apple devices in China. The shares
ended at HK$77.75, or down 0.19%.

HSBC ended at HK$81.55, up 0.62% as

Morgan Stanley said that its balance
sheet, liquidity, funding, and capital
position are stronger than the European
unit.

Disclaimer: This report is provided for information purposes

only. It is not an offer to sell or to buy any securities. This
report has been prepared based on sources believed to be
reliable, but there is no assurance or guarantee regarding its
completeness & and accuracy. The author accepts no
responsibility or liability arising from any use of the report.

E-mail: market.techspeak@gmail.com
13 September 2010 Page 2