Asian Stocks End Mostly Higher Ahead of Fed Meeting
This is a transcript of top stories presented by China's CCTV Business Channel as produced by CNBC Asia Pacific.
A good Monday to our viewers all over China. I'm Christine Tan.
You're watching "Asia Market Daily", co-produced by CCTV Business Channel and CNBC, first in business worldwide.
First up, a look at what's keeping most markets in the region subdued in trade today.
Most traders are holding back in the leadup to the U.S. federal reserve's policy meeting and U.S. housing starts data on Tuesday.
What the markets are looking for - whether there would be a change in tone to indicate that the U.S. economy is on a clear path to recovery.
Any good news of course may provide a trigger point to help markets break above the critical 1, 130 level on the S&P 500.
The second is whether the Fed will provide further easing - possibly through QE measures to keep the economy going.
(SOT) James Holt, Vice President, BlackRock Investment Management
I think part of the talk around QE, it's not just if the economy recovers, but perhaps that they really want to grow, you know, I don't want to say target a higher rate of inflation, perhaps they do want to make sure that they don't have to go through this elongated period, 10-15 years where growth is low and inflation is low, sort of tethering at the edge of deflation. I think that's partly where Bernanke is coming from, that he wants to really try and put a little more liquidity into the economy, to prevent that potential from slipping over the edge. I don't think that all the Fed's officials are there yet, that's why it will take a couple more months before the QE's program will be implemented but that's where they kind of going."
In Asia, we're seeing a mixed picture.
The Japan markets are closed for the respect of the aged day. They resume trade tomorrow.
In Australia, investors taking profits after shares reached 4-month highs last week.
The index closed down 0.2 of a percent.
Blue chip banking and mining shares recovering from earlier session lows.
On the M&A front, ANZ Banking Group has reportedly completed due diligence to decide whether to bid for a majority stake in Korea Exchange Bank.
According to Korean media, ANZ finished a 3-week inspection for the $4 billion deal on Friday and will make a decision as soon as next month.
Meantime, foreign buying giving some support to South Korea indices.
The KOSPI ended a touch up but was held in rangebound trade ahead of the Chuseok long holiday.
Over in China, markets dipping in and out of the red in session today.
Banking shares getting some relief as worries eased over potential tightening measures.
On the corporate front, local media reporting that China's Sinochem may be gearing up to bid for Canada's Potash.
The chemical conglomerate was said to have asked the government to support its offer, which may be worth up to $60 billion.
Sinochem would need to put up between $40 to $60 billion to trump BHP's hostile $39 billion bid for Potash.
And there could be more changes on the way for China in terms of its International Monetary Fund membership.
According to Japan's Nikkei newspaper, the IMF will reportedly up China's membership quota to as much as 6% from 3.9% now, putting it in line with Japan.
The IMF will also raise quotas for emerging nations like India, Indonesia and South Korea to reflect their economic standing, while reducing some European nations.
A board decision is expected in November later this year.
Moving onto South east Asia, CNBC goes on the road this week to speak to the top decision makers in the kingdom of Thailand.
While it's been a tumultuous few months for the nation, CNBC's Martin Soong reports that the country steadily making its way to a turnaround.
It's hard to believe that just four short months ago, Thailand's capital of Bangkok was in the midst of anarchy with the economy held hostage by thousands of protestors and dozens of lives lost during those months of demonstrations. But since then, the stock market has boomed - one of the best performing markets in Asia so far this year, while the economy continued to expand even during those tumultuous weeks.
(SOT) Rahul Bajoria, Regional Economist, Barclays Capital
"Electronics sector, automobile sector, and petrochemcials has seen strong growth in last 12 months, partly a reflection on resurgent commodity prices partly on strong interlinkages within Asia for Thailand."
Prime Minister Abhisit Vejjajiva, elected by parliamentary vote when his predecessor Thaksin Shinawatra was ousted in a bloodless coup, has survived beyond the expectations of many. Soon he will face the ultimate test - general elections which are due next year but could come sooner.
(SOT) Korn Chatikavanij, Finance Minister of Thailand
"He did put on the table, promise of an earlier election at the time when the Red shirts were protesting. Unfortunately, they didn't take up the offer, but I think the Prime Minister feels if it is appropriate and good for the country, I don't think he will hesitate in calling for an early election. Definitely next year, hopefully not this year."
Whatever criticism Thaksin may face, one thing the former businessman was adept at, was getting the popular vote. While Thaksin is now an outlaw in Thailand, his supporters may be able to continue to ride the wave of his huge popularity among the rural population. Amid the intermittent unrest that has become associated with Thai politics, comes the bigger question - is Thailand a fledging democracy in the making or is there a deeper problem of a nation divided. Such questions are unlikely to be answered before the next election, and could even be exacerbated should a royal succession take place amid the Thai King's frail health.
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CNBC also met the Thai Prime Minister Abhisit Vejajiva in Bangkok today.
In an exclusive interview, Martin Soong started by asking him whether the worst was over.
(SOT) Abhisit Vejajiva, Prime Minister of Thailand
"Yes we recognize that there continues to be challenges. We have a reconciliation plan being implemented, and we hope that the reform commission, which has been set up and getting to work, they will come up with some concrete results by the end of year. So we continue to make steady progress, we don't pretend that it is easy to achieve normalcy and complete stability given what's happened earlier on in the year. But I would go back to the very point that at the same it is clear that it hasn't prevented us from making progress as far as the economy is concerned. And when you ask whether the stability is real, when you ask whether the money that keeps coming in is for real, I would also point to the fundamentals in the real economy. We achieved 10.6 percent growth in the first half of the year, we expect the whole year's figure to be between 7 to 8 percent , which is not bad. And this is done with inflation at around 3.5 percent, unemployment just above 1 percent. And the debt-to-GDP ratio, now well under control, well below 50 percent. So I think the fundamental figures are there, and exports have been up around 30 percent so far this year, and even tourists are coming back.
"Well, I said many times that I would look at 3 factors: the economy is one, and I think now that we've passed next years budget through parliament and the recovery is strong, I'm satisfied with the economic conditions. The two conditions that remain, first of all, we have a panel that works on constitutional amendments. They should be making recommendations to me maybe next month and when they do that, I think, parliament should get to grips with the rules under which elections should take place. So that could be settled, maybe, before the end of the year. And the third factor is, you know, we want the reform commissions and the process of stabilization to continue for a while. And, again, we are looking at something like the end of the year. And that after that we will make an assessment . Who knows what will happen along the way? But I would make that assessment. But I believe that the country could do with a period of stabilization and a period of continuity until the end of the year."
Well, that wraps up today's Asia Market Daily.
Stay tuned for more highlights from our special coverage of Thailand this week.
I'm Christine Tan from CNBC.
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