10 Updates

China's Currency Not Dying, Deutsche Bank Says

May 17 2014, 12:34pm CDT | by

The Chinese yuan is second only to the Russian ruble as the worst performing BRIC currency compared to the dollar.  It’s down nearly 3% to the greenback this  year, while the Brazilian real is up 6....

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10 weeks ago

China's Currency Not Dying, Deutsche Bank Says

May 17 2014, 12:34pm CDT | by

The Chinese yuan is second only to the Russian ruble as the worst performing BRIC currency compared to the dollar.  It’s down nearly 3% to the greenback this  year, while the Brazilian real is up 6.3% and the Indian rupee is up 5.4%.  Even the Mexican peso is doing better, up 1.12% against the dollar.  Yet, some pundits will have investors believing that the weaker yuan signals the ongoing decline of the Chinese economy.  For them, the yuan’s days of strengthening are over as Beijing opts for a weaker currency to keep cheap exports flowing Westward.

Not so fast, says Deutsche Bank in China.  This currency is not dead yet. In fact, its just beginning to flex its muscles.

Deutsche Bank recently opened its seventh location in China, this one in the new Shanghai Free Trade Zone. Their executives say that demand for the Chinese currency, the yuan, among their corporate clients is growing. In Shanghai, the bank focuses on yuan-denominated cross-border transactions and services ranging from yuan cash pooling and trade financing to cross-border lending and interest rate hedging.

“Surely but slowly global use of the yuan will rise as China gradually makes the currency fully convertible in both trade and investment,” Lee Beng-Hong, head of markets at Deutsche Bank China, told China Daily in an interview published Saturday. “That spells huge opportunities for global banks like us.”

Lee said the yuan’s recent weakening against the dollar hasn’t changed investor sentiment for the longer term trend in the Chinese currency. “Corporations have real demands to use the yuan as one of their payment currencies,” Lee told the Daily. “The demand, supported by China’s steady economic growth, far outweighs the exit of some speculators.”

The yuan is up around 20% against the dollar since 2005. It weakened significantly in 2008 during the financial crisis and again this year amid a slowdown in the Chinese economy. The yuan is not a free-floating currency, but many fixed income fund managers believe the trend is for the yuan to strengthen as the Chinese economy grows.

Edmumd Harriss, a fund manager at the Guinness Atkinson Renmimbi Yuan & Bond Fund, has told FORBES in previous interviews that the yuan is a relatively stable way for investors to diversify away from the dollar.

“You can invest in bank CDs, and corporate bonds. The market is still a bit thin, but we expect that to change over time,” he said. “The long term trend is for the yuan to get stronger, not weaker, as more companies throughout Asia use it in financial transactions. We are seeing that now. It’s no longer a matter of if anymore. The yuan is being used as a trade currency now, slowly but surely,” he said.

Much of the yuan is dependent on China growth. And China is not growing as much as it used to.

The deceleration of China’s economy may even continue during the current quarter, Barclays Capital economist Jian Chang said last week in a note to clients, but an uptick in some leading indicators point to improvement in the months ahead.

Over the last three months, China has been massively lagging the MSCI Emerging Markets Index. The iShares FTSE China (FXI) exchange traded fund is up only 0.5% while the MSCI EM is up 8.26% in the last three months. Year to date, FXI is down more than 6% while the benchmark MSCI EM is up 2.7%.


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Update
10

7 weeks ago

RM47mil KWSG contributions still unclaimed

Jun 9 2014 7:54am CDT | Source: Business Times Malaysia

KUALA LUMPUR: About RM47 million of contributions in the Teachers Provident Fund (KWSG) still remain unclaimed, the Dewan Rakyat was tol ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
9

7 weeks ago

Gold shop lost almost RM1mil

Jun 9 2014 3:50am CDT | Source: Business Times Malaysia

KANGAR: A gold shop owner lost almost RM1 million after after the safe on in his shop was br ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
8

7 weeks ago

Motion to debate MAS losses in Dewan Rakyat rejected

Jun 9 2014 3:39am CDT | Source: Business Times Malaysia

KUALA LUMPUR: AN emergency motion to debate the losses incurred by Malaysia Airlines last year, amounting to RM1.2 billion was rejected by the Dewan Rakyat to ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
7

7 weeks ago

MH370 Tragedy: Hisham: RM27.6 mil spent on 1st phase of SAR

Jun 9 2014 2:11am CDT | Source: Business Times Malaysia

KUALA LUMPUR: Malaysia spent some RM27.6 million in its first phase of the search operations for missing Malaysia Airline flight MH370, said Acting Transport Min ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
6

7 weeks ago

9.1m litres of diesel seized in a month

Jun 8 2014 1:11am CDT | Source: Business Times Malaysia

PUTRAJAYA: The Domestic Trade, Cooperatives, and Consumerism ministry has seized some 9.1 million litres of diesel and property worth RM58 million since mounting ‘Operasi Diesel Selatan’ in the southern ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
5

7 weeks ago

Girl, 9, awarded RM2.78m compensation for medical negligence

Jun 6 2014 4:56am CDT | Source: Business Times Malaysia

KUALA LUMPUR: A nine-year-old girl who suffered brain damage during her birth at a government hospital was awarded over RM2.78 milli ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
4

7 weeks ago

Malaysia's total trade in April up 12pc

Jun 5 2014 11:52pm CDT | Source: Business Times Malaysia

KUALA LUMPUR: Malaysia's total trade in April 2014 rose by 12 per cent from a year ago to RM123.86 billion due to growing trading activities, International Trade and Industry Minister Datuk Seri Mustapa Mohamed sai ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
3

7 weeks ago

Works Ministry to spend RM20m for upgrading works at 50 accident black spots

Jun 4 2014 11:35pm CDT | Source: Business Times Malaysia

JOHOR BARU: The Works Ministry will implement upgrading works at 50 accident prone locations in the country that have been identified this year involving an allocation of RM20 millio ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
2

7 weeks ago

Najib launches loan scheme for Ramadan traders

Jun 4 2014 10:24pm CDT | Source: Business Times Malaysia

PUTRAJAYA: Prime Minister Datuk Seri Najib Razak today launches RM45 million Ramadan B ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
1

8 weeks ago

Residents bring up objection against Kidex to Suhakam

Jun 4 2014 4:49am CDT | Source: Business Times Malaysia

PETALING JAYA: A group of 20 Petaling Jaya residents held a meeting with the Human Rights Commission of Malaysia (Suhakam) over their objection against the proposed RM2.2 billion Kinrar ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 

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