World facing 'unprecedented climate emergency': Brazil's Lula

NEW DELHI — Brazilian President Luiz Inacio Lula da Silva told world leaders Saturday the planet was facing an "unprecedented climate emergency" while addressing the G20 Summit in India.

"The lack of commitment to the environment has led us to an unprecedented climate emergency," said Lula at the two-day meeting in New Delhi. "Droughts, floods, storms and fires are becoming more frequent."

G20 leaders meet this weekend during what is likely the hottest year in human history, but hopes are slim that the divided grouping can agree ambitious action on the crisis.

Any failure to do so could lower expectations ahead of crucial COP28 climate talks that begin in November in the United Arab Emirates.

In July, G20 energy ministers failed to even mention coal in their final statement, let alone agree a phase down roadmap, and there was no progress on the renewables goal.

G20 countries account for 85% of global GDP and a similar amount of global climate warming emissions, making action in the forum crucial to real progress.

Agence France-Presse

Asian stocks lower ahead of Trump-Xi meeting at G-20 summit

BEIJING – Major Asian stock markets declined Tuesday as traders looked ahead to a meeting between the American and Chinese presidents amid hopes for renewed trade talks.

Benchmarks in Tokyo, Shanghai and Hong Kong declined. Seoul and Sydney were little-changed.

Investors were encouraged by the announcement that top U.S. and Chinese negotiators, Trade Representative Robert Lighthizer and Vice Premier Liu He, talked Monday by phone. No details were released.

Traders looked ahead to a planned meeting between Presidents Donald Trump and Xi Jinping at this week’s Group of 20 meeting of major economies in Japan.

Forecasters expect the leaders to reassure financial markets by agreeing to revive trade talks without a timeline or committing to any details.

The conflict over Beijing’s technology ambitions and trade surplus was weighed on global trade and fed fears it will depress global growth.

Tensions have worsened after Washington tightened sanctions on Chinese tech giant Huawei.

“Both presidents have a very low bar of merely agreeing to resume trade talks, without having to iron out any of the sticking points at the G20,” said Chang Wei Liang of Mizuho Bank in a report.

The realities of achieving a settlement “will probably be relegated to the backseat as the ‘feel good’ factor of the G20 displaces caution,” Chang said.

The Shanghai Composite Index lost 1.1% to 2,974.69 and Tokyo’s Nikkei 225 shed 0.2% to 21,241.28. Hong Kong’s Hang Seng retreated 0.9% to 28,268.14.

Seoul’s Kospi added one point to 2,128.00 while Sydney’s S&P-ASX 200 gained three points to 6,667.40. Taiwan also declined while markets in Southeast Asia and New Zealand advanced.

On Wall Street, smaller company stocks had their worst day since May, helping to erase some of last week’s gains after the benchmark Standard & Poor’s 500 index closed at an all-time high.

The S&P 500 index slipped 0.2% to 2,945.35. The Dow Jones Industrial Average rose less than 0.1% to 26,727.54. The Nasdaq composite dropped 0.3% to 8,005.70.

The Russell 2000 index of smaller companies slid 1.3% to 1,530.08, its biggest single-day loss since May 31.

Investors have been reassured by statements from the Federal Reserve this month that suggest the central bank is prepared to cut interest rates in response to a slowing global economy. Even so, traders remain concerned that corporate profits might suffer should the kind of economic slowdown that would prompt the Fed to cut rates take hold.

The U.S.-Chinese standoff was triggered by complaints Beijing steals or pressures companies to hand over technology.

Lighthizer and Liu wrapped up their latest round of talks in May with no date to meet again. China laid out conditions for a settlement in early June, saying it must be “balanced,” reflecting complaints Washington is pushing for a one-sided deal and to retain punitive tariffs on Chinese goods.

ENERGY: Benchmark U.S. crude fell 50 cents to $57.40 per barrel in electronic trading on the New York Mercantile Exchange. The contract gained 47 cents on Monday to close at $57.90. Brent crude, used to price international oils, lost 51 cents to $63.67 per barrel in London. It shed 27 cents the previous session to $64.18.

CURRENCY: The dollar declined to 107.05 yen from Monday’s 107.29 yen. The euro edged up to $1.1403 from $1.1400. /gsg

source: business.inquirer.net

China stock markets among world’s worst in 2016

SHANGHAI, China — China is the world’s second-largest economy and has one of the fastest growth rates of any G20 nation, but its stock markets have been among the worst performing in the world this year.

Starting with a botched attempt to reduce volatility that instead triggered a spectacular meltdown, Chinese bourses have spent the year struggling against feckless policymakers, massive capital flight and a languishing currency.

The benchmark Shanghai Composite Index (SCI) struggled towards the finish line Thursday down 12.5 percent for the year, compared to falls of 0.6 percent by the Hang Seng Index in Hong Kong and 2.2 percent for Japan’s Nikkei 300. Both markets are trading Friday.

As of Thursday, it had the worst showing among the 40-plus countries tracked by Wall Street Journal’s Market Data Center, behind even debt-ridden Portugal.

It is a significantly worse performance than 2015’s wild ride, when the SCI surged by 60 percent in the first half before plunging by more than 40 percent in under three months. Even so, it finished the year with an overall gain of 9.4 percent.

Then authorities brought in a “circuit breaker” mechanism in January to automatically shut down trading if prices plunged. It went into effect twice in one week, kicking off a self-reinforcing selling panic that spread to global markets, and was scrapped after just four days.

“The Chinese market had a meltdown this year, and so far it has only half recovered from that,” Northeast Securities analyst Shen Zhengyang told AFP, adding the market was still in “slow and gradual restoration”.

The chairman of the China Securities Regulatory Commission was sacked over the debacle.

His replacement, Liu Shiyu, has kept a low profile, hurting market confidence and leaving investors seeking direction, said Oliver Rui, a professor at the China Europe International Business School (CEIBS).

“People don’t understand much about the regulator’s policy direction,” he said, adding that the lack of clarity partly explained the market’s weak performance.

The falling yuan — lowered seven percent by the central bank over the year in the face of a surging dollar — has also driven investors abroad in search of better performance.

“When the yuan falls, market capital runs off overseas to hedge the risks,” said Dickie Wong, Hong Kong-based research director for Kingston Securities, adding it also made foreign investors “less optimistic about mainland companies”.

Missed connection

Even the year’s few bright spots have failed to live up to expectations.

Earlier this month, China launched a long-delayed programme connecting its second exchange in Shenzhen — which has lost 14.8 percent so far this year — with the bourse in Hong Kong.

The Hong Kong-Shenzhen Stock Connect builds on a similar scheme with Shanghai and gives foreign investors access to many mainland tech shares.

But it has so far failed to live up to the hype, with Shenzhen’s shares more expensive than those in Hong Kong, making it unattractive to foreign investors, while the entry threshold for mainlanders to buy Hong Kong shares was set as high as half a million yuan ($72,000).

Other anticipated reforms, such as a new system for initial public offerings (IPOs), have all failed to materialise or were quietly shelved after January’s drama.

Currently, the Chinese government — rather than the market — decides which companies offer shares and when, and at what price.

As a result Chinese flotations are always underpriced, which “sends the wrong signals to the market”, according to Oliver Rui of CEIBS.

Authorities should “not intervene too much” but “are always afraid that the market will lose control”, he told AFP.

“But if you do not let go, then you will never know if the market can accept the new system or not. Mistakes are a necessary step.”

‘Least profitable’

Unlike most global exchanges where institutions hold sway, China’s stock markets are dominated by small investors, heightening volatility and short-termism.

Government-backed funds injected billions of dollars into China’s markets in 2015 in an effort to stop them bleeding out, and still play a major role, ignoring profit, loss and everything in between, and creating huge price distortions.

“In such an environment, it’s quite difficult for investors to apply whatever money-making strategies that they have learned over the years,” said Citic Securities analyst Zhang Qun.

He called China’s stock market “the least profitable” option in China or abroad.

Even so, brokers are mildly optimistic about next year — but hedge their bets with huge ranges for their 2017 year-end forecasts.

China Merchant Securities projects the SCI at anything from 2,900 — a six percent decline — to 3,800, which would represent a leap of 23 percent.

“With the government taking tighter controls over the property market and bonds also falling, not many choices are left,” said Kingston’s Dickie Wong. “Funds must go somewhere and stocks are ultimately one choice.” CBB

source: business.inquirer.net