(Bloomberg) -- Japanese stocks jumped to a three- month high on speculation consolidation will boost profitability in the computer chip industry and after a U.S. Federal Reserve survey showed economic contraction eased in some regions.
Mitsubishi Electric Corp. jumped 4 percent after its Renesas Technology Corp. affiliate was said to be in merger talks with NEC Electronics Corp., Japan’s third-biggest chipmaker. Nissan Motor Co., the nation’s No. 3 carmaker, rose 3.7 percent as almost half of the regions surveyed in the Fed’s Beige Book said there’s been a “moderation” in economic decline. Steelmakers and shipping lines gained ahead of reports from China on gross domestic product, production and inflation.
The Nikkei 225 Stock Average rose 253.43, or 2.9 percent, to 8,996.39 at the 11 a.m. break in Tokyo, the highest since Jan. 7 and snapping a three-day slide. The broader Topix index gained 16.67, or 2 percent, to 851.92.
“It’s natural when the economy turns south to see these kinds of mergers as a strategy for survival. Making money in semiconductors is difficult in any business climate,” said Kiyoshi Ishigane, a senior strategist at Mitsubishi UFJ Asset Management Co., which oversees about $61 billion. “We aren’t on the path to a legitimate recovery, but we are seeing signs that sentiment is improving.”
The Nikkei has rallied by more than a quarter from a 26- year low on March 10. Shares in the gauge trade at an average of 183 times estimated net income for this year, up from 14 times a year ago, according to index compiler Nikkei Inc.
Read more at Bloomberg
Wednesday, April 15, 2009
Shock fall in retail sales
SA's retail sales fell a shocking 4.5% in real terms in February from the same month a year ago, fuelling fears that SA is already in a recession and cementing the case for a further 100 basis points in interest rate cuts at the end of April.
The sharp decline in February followed an increase of 1.2% in January and a marginal decline in December. The performance in December and January had raised hopes that a bottom had been seen in retail sales.
But the latest numbers show that consumer confidence returned to the doldrums, despite a 100 basis-point cut in interest rates in February.
Stanlib economist Kevin Lings said the two main reasons for the retail sales decline were that consumers' incomes were falling in real terms, and that they were experiencing job losses.
He said credit card debt was a reliable indicator of consumer spending, and in February consumers had actually reduced their credit card debt.
"That's a rare event indeed, and is more indicative of the mood among consumers than the retail sales figures in December and January."
Lings said the better performance in December and January had been an anomaly. Consumers had probably felt buoyed by the fact that petrol prices had dropped sharply and the first interest rate cut had taken place. But this had been followed by job losses in 2009.
"Coming after very weak manufacturing figures, the February retail sales figures point to negative growth in gross domestic product in the first quarter.
"This supports the argument for another 100 basis-point cut in interest rates at the end of this month," Lings said.
Read more at Fin24
The sharp decline in February followed an increase of 1.2% in January and a marginal decline in December. The performance in December and January had raised hopes that a bottom had been seen in retail sales.
But the latest numbers show that consumer confidence returned to the doldrums, despite a 100 basis-point cut in interest rates in February.
Stanlib economist Kevin Lings said the two main reasons for the retail sales decline were that consumers' incomes were falling in real terms, and that they were experiencing job losses.
He said credit card debt was a reliable indicator of consumer spending, and in February consumers had actually reduced their credit card debt.
"That's a rare event indeed, and is more indicative of the mood among consumers than the retail sales figures in December and January."
Lings said the better performance in December and January had been an anomaly. Consumers had probably felt buoyed by the fact that petrol prices had dropped sharply and the first interest rate cut had taken place. But this had been followed by job losses in 2009.
"Coming after very weak manufacturing figures, the February retail sales figures point to negative growth in gross domestic product in the first quarter.
"This supports the argument for another 100 basis-point cut in interest rates at the end of this month," Lings said.
Read more at Fin24
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