Thursday January 21 2016 Housing and Economic stories

TOP STORIES:

Asia Stocks Fall to Lowest Since 2011, Extending Global Selloff  - (www.bloomberg.com) Asian stocks declined, with a regional measure falling to its lowest level in more than four years, as concern about China’s growth outlook continued to fan a global selloff. The MSCI Asia Pacific excluding Japan Index tumbled 2 percent to 374.51 as of 4:04 p.m. in Hong Kong, heading for its lowest close since October 2011, after sinking 7.1 percent last week. Markets in Tokyo are closed Monday for a holiday. Turmoil in China’s markets rippled around the world in the first week of 2016 as the securities regulator scrapped an equity circuit breaker after just four days and the central bank set a weaker yuan fix for eight days in a row, escalating fears of a global currency war.

China banks feel the heat of meltdown - (www.ft.com) If the US or Europe had experienced the kind of equity market slump that China has suffered of late, its financial institutions would be quaking and leading the list of biggest fallers in Shanghai and Hong Kong trading. As it is, the big banks have seen their share prices tumble by about 10 per cent over the past two or three weeks, far less than the 15 per cent slump in the Shanghai Composite index. On the face of it, there may be good reason for that. Traditionally China’s large financial institutions are not big stock market players — retail investors make up the bulk of the market. In reality, the banks are the most exposed to China’s ills. They are directly bound up in the stock market turmoil and the government’s efforts to shore up sentiment against the flood of selling. Figures relating to the past week or so are not yet available. But during a similar rout in early July last year, 17 banks — including the big five listed but partly state-owned groups — lent more than $200bn to facilitate broker purchases of shares and funds.

Emerging-Market ETFs Suffer Worst Loss in 8 Weeks, Led by Taiwan - (www.bloomberg.com) U.S. exchange-traded funds that invest in emerging markets had the biggest net outflows since mid-November, led by withdrawals from Taiwan and India. Redemptions from ETFs that invest across developing nations as well as those that target specific countries totaled $566.7 million in the week ended Jan. 8, compared with inflows of $431.3 million in the previous period, according to data compiled by Bloomberg. The last time investors pulled more money from the funds was in the week of Nov. 13, when outflows reached $1.06 billion, the data show. Last week, stock funds lost $507.3 million and bond funds declined by $59.4 million. The MSCI Emerging Markets Index fell 6.8 percent in the week.

Oil tumbles nearly 5 percent to new lows; analysts warn of $20s - (www.reuters.com) A brutal new year selloff in oil markets deepened on Monday, with prices plunging as much as 5 percent to new 12-year lows as further ructions in the Chinese stock market threatened to knock crude into the $20s. On Monday, China's blue-chip stocks fell by another 5 percent and overnight interest rates for the yuan outside of China soared to nearly 40 percent, their highest since the launch of the offshore market. Morgan Stanley warned that a further devaluation of the yuan could send oil prices spiraling lower still, extending the year's nearly 15 percent slide.

Glencore Debt Swaps Jump to Six-Year High as Copper Price Slides - (www.bloomberg.com) The cost of insuring Glencore Plc’s debt against default rose to a more than six-year high as the price of raw materials such as copper continued to tumble. The trader and miner’s credit default swaps increased to as much as 946 basis points, the highest since April 2009 on a closing basis, according to data from S&P Capital IQ’s CMA. Slumping commodity prices have battered Glencore, prompting it to scrap a dividend payment, sell new shares and outline asset sales as it seeks to curb debt to maintain its investment-grade rating. Copper dropped to a six-year low amid a rout in metals as muted Chinese inflation increased concern that demand from the world’s largest buyer of raw materials will slow.

OTHER STORIES:

China opens in the red, Shanghai down 2.51%, Shenzhen sheds 3.28% - (www.cnbc.com)
Offshore Yuan Erases Losses as PBOC Stabilizes Reference Rate - (www.bloomberg.com)
Asian shares pressured, South African rand dives - (www.reuters.com)
Stock futures sink in pre-market trading, hinting at lower Wall Street open - (www.cnbc.com)

Gold Extends `Great Start to 2016' as Risk Aversion Fans Demand - (www.bloomberg.com)
Oil Extends Slide From 11-Year Low Amid Signs of China Weakness - (www.bloomberg.com)
Yen Climbs to Four-Month High as China Ructions Drive Haven Bid - (www.bloomberg.com)
Emerging economies are coming under ‘even more pressure’ - (www.ft.com)