Asian markets begin on upbeat note

POLITICAL ECONOMY

China manufacturing activity rises in December: survey
Beijing (AFP) Jan 4, 2010 - Manufacturing in China continued to expand in December as new orders received by factories rose for the ninth month in a row on booming demand from home and abroad, a survey showed Monday. The HSBC China Manufacturing PMI, or purchasing managers' index, rose to 56.1 in December from 55.7 in November, the survey showed. A reading above 50 means the sector is expanding, while a reading below 50 indicates an overall decline. "The second round effect of stimulus measures is filtering through to substantially benefit the manufacturing sector as we expected," Qu Hongbin, chief economist for China at HSBC, said in a statement.

A separate official PMI published by the China Federation of Logistics and Purchasing showed manufacturing activity rose to 56.6 percent in December -- the highest reading in 20 months. The HSBC survey showed manufacturing output rose for the ninth consecutive month in December and growth in new export orders was the fastest since March 2005. Staffing levels in the sector continued to rise in December as a result of increased production requirements, and job creation was the third-fastest since the survey began in April 2004, HSBC said. Prices charged by Chinese manufacturers increased at the fastest pace since July 2008 on potent market demand and surging costs on raw materials such as steel, aluminium, coal, petroleum, textiles and zinc, the survey showed.

"The significant increase in the Output Prices Index in recent months is due to stronger demand and rising input costs, which have added to inflationary pressures," said Qu. "Yet, we believe inflation will be manageable in the coming months." China's export-driven economy is expected to easily exceed the government's oft-stated target of eight percent growth in 2009, mainly as a result of massive stimulus spending to combat the crisis. The nation's economy expanded by 8.9 percent in the third quarter, up from 7.9 percent in the second quarter and 6.1 percent in the first three months. In 2008, manufacturing accounted for more than 40 percent of economic output in China, which has been hit hard by evaporating demand for its products in key export markets such as the United States and Europe.

More than 600,000 Chinese visited Taiwan in 2009: media
Beijing (AFP) Jan 2, 2010 - More than 600,000 Chinese tourists visited Taiwan in 2009, state-run media reported Saturday, amid warming relations between the two sides. The 606,100 visitors each spent nearly 1,800 dollars during their stay on the island, tourism officials were quoted by the China Daily newspaper as saying. "Years of isolation between the two sides have made Taiwan an attractive place for mainland tourists," said Zheng Lijuan, deputy general manager of a unit of travel group CITS International. Since July 2008 -- when regular air services were resumed between the traditional foes -- about 660,000 Chinese tourists have visited Taiwan and spent 1.13 billion dollars, the English-language daily said. Taiwan and China have been ruled separately since the end of a civil war in 1949, but Beijing claims the island as part of its territory and believes reunification is only a question of time. Ties have improved since May 2008 when China-friendly President Ma Ying-jeou took office in Taiwan.

by Staff Writers
Hong Kong (AFP) Jan 4, 2010
Asian markets began the new decade in broadly upbeat fashion Monday with dealers in Tokyo lifted by news of extended credit to Japan Airlines and a strong yen as well as positive Chinese manufacturing data.

And the new year saw the introduction of a new trading system in Tokyo as the stock exchange tries to keep ahead of its regional rivals following a series of technical problems in recent years.

Tokyo ended the day 1.03 percent higher at 10,654.79, a 15-month high, and Sydney added 0.12 percent to 4,876.3.

"The mood on the first day of trading this year is good," Kenji Shiomura, market analyst at Daiwa Securities, told Dow Jones Newswires.

Japan Airlines (JAL) shares soared more than 30 percent after the government on Sunday agreed to double a state-funded loan to the cash-strapped carrier to 200 billion yen (2.2 billion dollars).

JAL shares had plunged 23.9 percent on the last trading day of 2009, sinking at one stage to a record low, on fears Asia's largest airline might file for bankruptcy protection.

Exporters were also helped by the dollar's stronger position against the yen.

The dollar eased to 92.79 yen in Tokyo Monday afternoon trade, down from 93.00 in New York late Thursday, and the euro fell to 1.4299 dollars from 1.4323 dollars, and to 132.58 yen from 133.26.

The dollar softened against the yen but its overall tone remained firm thanks to optimism about prospects for the US economy, dealers said.

But Hong Kong was 0.29 percent lower by the break, while Shanghai was 0.38 percent off due to inflationary fears.

News that China's Purchasing Managers' Index rose to 56.6 percent in December from 55.2 in November lifted the market early on but was unable to help sustain the gains.

"Improvement in December's PMI is in line with expectations and investors are now more concerned about possible inflation risks tipped by the manufacturing index," Qiu Yanying, an analyst at TX Investment, said.

The Tokyo Stock Exchange's next-generation trading platform, called "arrowhead", can process orders in 0.005 seconds, much faster than the previous technology and on a par with the systems in New York and London.

Singapore announced its economy shrank 6.8 percent in the fourth quarter compared with the previous three months. However, the drop was not as big as expected and gross domestic product actually rose 3.5 percent year-on-year.

The data was largely ignored by the city-state's stock market, which was 0.30 percent lower in early afternoon trade due to profit-taking after hitting a 17-month high last week.

Oil jumped above 80 dollars a barrel after Russia cut its supplies to neighbour Belarus due to a row over tariffs.

New York's main futures contract, light sweet crude for delivery in February, rose 78 cents to 80.14 dollars a barrel, while Brent North Sea crude added 74 cents to 78.67 dollars.

Gold opened lower in Hong Kong, trading at 1,095.00-1,096.00 US dollars an ounce, compared to Thursday's close of 1,102.00-1,103.00 dollars.

Seoul's KOSPI rose 0.79 percent to 1,696.14, Taipei ended up 0.24 percent at 8,207.85, while Manila closed down 1.56 percent at 3,005.01.

Wellington was closed for a holiday.

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