USDJPY formed a cycle bottom at 78.46 on 4-hour chart. Range trading between 78.46 and 79.58 is expected in a couple of days. The price action in the range could be treated as consolidation of downtrend from 81.47, as long as 79.58 resistance holds, one more fall to 77.50 area is still possible. However, a break above 79.58 will suggest that the longer term downtrend from 85.51 has completed at 78.46 already, then the following upward move could bring price to 83.00 zone.
By China Research and Intelligence
www.shcri.com – Outsourcing refers that enterprises outsource their non-core business to other enterprises, so that the enterprises can lower the cost, raise efficiency and optimize their core competitiveness. Currently, there are over 3,000 service outsourcing enterprises in China. They would support software development and project maintenance, or be private teachers, securities and even doctors of foreigners through Internet, or establish call centers in their cities for multinational companies.
Economic globalization is now developing into a new stage, with global industries transferring from manufacture industry to service industry. Service outsourcing has become a major trend of the development of service globalization. Since the end of 1980, some multinational companies of developed countries have begun to outsource their non-core business of IT service to those professional service suppliers with lower cost so as to save their own cost and raise operating efficiency and core competitiveness. After rapid development of 20 years, today’s service outsourcing industry has owned a considerable scale. Its business has expanded from original IT Service Outsourcing to higher-level business process outsourcing, both of which have become the main business of current service outsourcing industry. It is predicted that the value of global offshore service outsourcing market will reach at least USD 1.6 trillion by 2020.
Chinese service outsourcing industry is still in the initial stage, but it has huge potential. China has huge labor resource, complete infrastructure and growing economy. Integrating the rapid expansion and development of domestic offshore service outsourcing market will become a new strength in international competition.
As the statistics of China’s Ministry of Commerce shows, as a contractor, the value of Chinese international service outsourcing contracts exceeded USD 10 billion, with 152% increase YOY. Over 8000 service outsourcing companies hired 700,000 more employees, approximately 500,000 employees among which were graduates, with 12% increase YOY. In the previous five months of 2010, 1,105 new service outsourcing enterprises were established with 182,000 new employees. The value of national service outsourcing contracts reached USD 5.50 billion, with 139.2% increase YOY.
General Office of the State Council of China issued documents on promoting the development of service outsourcing industry and 17 policies in 2009. Thereafter, in April 2010, the State Council issued documents on encouraging the development of service outsourcing industry in order to provide a favorable political environment for Chinese service outsourcing industry.
Nowadays, the popular international trading mode for service outsourcing is intensified outsourcing, namely a project is firstly outsourced to main contractor then to other contractors level by level. Only large enterprises have capability to obtain the main contract. However, the factors that hinder Chinese service outsourcing industry are scale and brand. Because most enterprises are nascent with small scale and ordinary brand effect, it is hard to attract large orders. The leaders of China’s Ministry of Commerce are discussing the support for M&A of service outsourcing industry by investing more money. At present, foreign enterprises are lack of funds while capitals in China have ample liquidity. So the price is now favorable for M&A. Since the crash of overseas capital market in 2009, the assets of many enterprises plummeted drastically. When Chinese enterprises are processing M&A overseas, some Indian enterprises begin to acquire some service outsourcing companies in Delta Region of Yangtze River in China, through which they indirectly get Japanese orders.
In order to get rid of the influence of financial crisis soon, many multinational companies and financial institutions will outsource more business to other countries and regions so as to reduce their costs.
From this report, readers can obtain more information:
-Development of Global and Chinese Service Outsourcing Market
-Policy Climate of Chinese Service Outsourcing Market
-Competition on Chinese Service Outsourcing Market
-Major Enterprises in Chinese Service Outsourcing Market
-Factors affecting Chinese Service Outsourcing Market
-Trend for Chinese Service Outsourcing Market
To get more details, please go to http://www.shcri.com/reportdetail.asp?id=487
www.shcri.com
The Central Bank of the Republic of China (Taiwan) raised the minimum liquidity ratio for financial institutions to 10% from 7%. The move will come into effect from 1 October 2011, and is designed to bring the statutory liquidity ratio in line with where most banks are currently operating (i.e. not in response to any rise in banking system risks). The latest figures from the central bank indicated an overall liquidity ratio of 32.5% at the end of May. The move is expected to strengthen risk management in the banking system over the longer term.
July 18 (Bloomberg) — Richard Torrenzano, chief executive officer of the Torrenzano Group, discusses the possibility of a congressional probe into the News Corp. phone-hacking scandal. He speaks to Andrea Catherwood on Bloomberg Television’s “Last Word.”
Brokerage firm Charles Schwab (SCHW) reported a 16% increase in second-quarter earnings today. Profits totaled $238 million, or $0.20 per share, up from $205 million, or $0.17 per share, in last years second quarter.
Over the past week and more, we’ve been talking about crude oil, crude oil and crude oil.
And for good reason. Oil prices jumped above $97 a barrel in after-hours trading on Friday. This industry is so important — and so riddled with corruption and greed — that Sandy Franks and I wrote a book about it. Barbarians of Oil is already on shelves, but you can get a big discount off the shelf price by visiting this link.
But while we’ve been talking about crude oil, natural gas has quietly crept back onto the investment scene. In fact, natural gas prices climbed six out of the past seven trading days.
So we’re asking, “Is natural gas a good investment right now?”
There are certainly a lot of news stories that say yes… Most of them involve China.
China wants to double its methane gas production by 2015. This form of natural gas comes from coal beds, and PetroChina (PTR:NYSE) says the country has enough to meet 30% of its power needs.
But right now, China relies on crude oil and coal for its power needs. That’s expensive and dangerous. China’s the second biggest user of oil in the world, with imports skyrocketing. In the coal industry, small, unregulated mines kill thousands of people every year.
That’s why China is desperate for natural gas.
The problem is, China fell short of its production target last year. It wanted to produce 10 billion cubic meters, but finished with only 8.6 billion.
There’s real doubt that China can meet its goal of producing 21 billion cubic meters a year by 2015. China needs international projects to add to the mix.
China is investing billions in natural gas.
According to David Hurd, oil and gas analyst for Deutsche Bank, China invested $10 billion in unconventional gas deals between August 2010 and February 2011. Things like shale gas…
One of the biggest deals was with Canada’s Encana Corp. (ECA:NYSE).
Here’s a little background.
In February 2011, PetroChina agreed to pay $5.4 billion for a 50% stake in natural gas deposits in Western Canada. These deposits are owned by Encana, and they are shale gas — the most difficult type of natural gas deposit to tap.
China was very interested in this deal because it wanted to learn better ways of extracting shale gas. It could then use these methods to tackle its coal-bed methane deposits.
It hooked up with the right company. Encana is considered one of the best in the business…
But suddenly, on June 22, Encana announced the $5.4 billion deal was over. The two companies couldn’t agree on key points about the deposits. Encana is now looking for another company to partner with.
China has lost out on 255 million cubic feet of natural gas a day, or 7.22 million cubic meters. That deal would have boosted China’s natural gas production by 2.64 billion cubic meters a year… a jump of 30% over 2010’s production!
But even though this massive deal fell through, there are still a lot of deals going on right now.
The latest news comes from Shell (RDS.A:NYSE). Shell could partner up with China National Petroleum Corp. (PTR’s parent company), Korea Gas Corp., and Mitsubishi Corp. (MBI:XETRA MSBHY.PK) to build a liquefied natural gas (LNG) facility in British Columbia.
Shell has a pretty close relationship with China National Petroleum Corp. In November 2010, these companies signed an agreement for “integrated cooperation.” This would allow more collaboration between the two companies on oil and gas projects in Canada, and coal-bed methane project in China.
But that’s not all…
Shell signed a “shareholders agreement” with China National Petroleum Corp. in late June. The agreement was for a 50-50 joint venture “meant to accelerate large-scale development of shale gas, tight gas and coal bed methane through the standardization and automation of drilling,” according to LNG World News.
In all, deals between China and Western Canada could get even hotter, and the rest of Asia isn’t about to be left out in the cold. Progress Energy Resources Corp. (PRQ:TSX) inked a $1.07 billion deal with Malaysia’s Petronas.
Even more interesting, though, are U.S. companies making deals with Canadian companies. EOG Resources (EOG:NYSE), Encana and Apache (APA:NYSE) are the companies behind Kitimat LNG. This project is working its way through government review right now.
(We’ve talked about Apache Corp. in Smart Investing Daily. I mentioned this company back in mid-June, and since then, the share price has climbed more than 5%. If you haven’t already, sign up for Smart Investing Daily and you’ll never miss out on opportunities like this.)
What you need to know is this: There is huge potential in natural gas investments… even more when you throw China into the mix.
Look for a lot more deals to come in this industry. The players could be from China and other Asian countries (like Japan, Korea and Malaysia), or even places like Australia.
In fact, one of Australia’s biggest companies just agreed to buy out an American natural gas producer.
New Growth Investor editor Zach Scheidt was all over this acquisition, and recently wrote me to say:
In “The Energy Titans of Growth” I recommended a purchase of Petrohawk (HK:NYSE) because of the company’s ample reserves.
You see, the company is sitting on 3.4 Tcfe (Trillion cubic feet) of proven reserves.
Of course, proven reserves are only part of the company’s actual asset base. A significant amount of acreage has yet to be fully analyzed and documented. These acres are listed as “resource potential” — and will likely be converted to proven reserves as the company continues to expand its drilling program.
At the time the report was issued, HK was trading near $27 per share. The stock has been volatile due to a very uncertain energy market. But HK’s reserves have never been in question.
Today, HK is trading 62% higher (overnight) because BHP Billiton (BHP:NYSE) agreed to acquire the company for $38.75 per share. BHP made the acquisition because of HK’s tremendous reserves. In this transaction, HK provides the gas assets that BHP so desperately needs, and BHP provides the drilling infrastructure and financing to quickly ramp production and increase profits.
It’s a win-win situation. HK shareholders get a 62% windfall, and BHP shareholders now have a tremendous gas asset that could pay dividends for years to come.
It seems as though companies with spending money are trying to snap up as much natural gas as they can.
And that means the natural gas industry is a very worthy investment right now.
Publisher’s Note: Zach Scheidt’s energy picks are on fire. I just looked through the former hedge funder’s model portfolio. He recommends three energy companies — all are up by double-digits.
Zach’s next pick is due out in two weeks. Click here to make sure he sends it to you.
Article brought to you by Taipan Publishing Group. Additional valuable content can be syndicated via our News RSS feed. Republish without charge. Required: Author attribution, links back to original content or www.taipanpublishinggroup.com.
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The U.S. is in a very scary position right now… We have a real chance of defaulting on our debt. The government is still arguing over what to do about the debt ceiling, and if they can’t find a solution we’re looking at an economic meltdown.
The rating agencies are starting to catch on.
Moody’s warned yesterday that it could downgrade the U.S.’s credit rating if Congress and the president couldn’t reach an agreement. It would probably change the country’s AAA rating to AA. Standard and Poor’s would make a bigger change — downgrading the U.S. from AAA to D.
This has all kinds of global ramifications. We could see another credit crunch like back in 2008.
Yesterday, Fed Chairman Ben Bernanke spoke to Congress. He warned:
If we went so far as to default on the debt, it would be a major crisis because the Treasury security is viewed as the safest and most liquid security in the world. It’s the foundation for most of our financial — for much of our financial system. And the notion that it would become suddenly unreliable and illiquid would throw shock waves through the entire global financial system.
It will truly be another global financial crisis…
The question is, what does this mean for you? What will a default mean for your investments and your personal wealth?
On one hand, a debt default would push interest rates on Treasury bonds higher. Higher rates eat up more taxpayer money, leaving less money for the government to run on. In other words, funding could be cut for social and healthcare programs, for schools, and even for infrastructure projects like roads and bridges.
But a debt default has other consequences that cut closer to the bone.
Here are a few outcomes… and how to protect yourself against them.
Debt Default Would Raise Borrowing Costs
Nearly all interest rates use U.S. Treasuries as a benchmark. If Treasury rates climb, then the interest rates for things like mortgages, personal loans and credit cards would climb.
Corporations will see a sharp increase in borrowing costs, having a big effect on share prices and jobs.
On a personal level, if you’ve been considering refinancing or buying a new car, you should aim to get that done before Aug. 2. That’s the deadline the government has before it defaults on its debt. If an agreement can’t be reached to raise the debt ceiling, than interest rates will jump higher.
In the markets, be sure to check on the health of the companies you hold. High levels of debt that might need to be refinanced could be a sign of potential weakness come Aug. 2.
Companies have been borrowing at an extremely high rate… They borrowed some $513 billion in the first quarter of 2011 alone. In total? Non-financial corporations have borrowed $7.3 trillion. Their debt has climbed 24% in the past five years.
Use the company’s debt-equity ratio to help determine health. Good “value” stocks tend to have a debt-equity ratio of less than one. That will probably be hard to find in this environment, but it’s a good gauge nonetheless.
Debt Default Means Millions of Americans Won’t Get Paid
According to the Bipartisan Policy Center, the U.S. has monthly deficits of $125 billion. If the debt ceiling isn’t raised, the government can’t pay its bills. Some people may be left without a check. We don’t know who it will be…
It could be Social Security recipients, or soldiers, or federal workers.
Indeed, President Obama said in a CBS interview that he couldn’t guarantee that government benefits, including Social Security, could be paid.
There will be some really tough decisions to be made on Aug. 2.
If you receive any kind of check from the government, be prepared not to get it. That means you might need to liquidate some other assets if you know you’re going to need cash. But do it soon… If the government defaults, the stock market is going to take a beating.
Debt Default Means Inflation
The Federal Reserve has stepped in twice to buy up government debt and keep the recovery going. Think it’ll sit on the sidelines if the government defaults? Not a chance…
In this case, the third time’s not the charm — it’s the beginning of massive inflation.
Even if the debt ceiling is not raised, and the government can’t issue more U.S. Treasury bonds for the Fed to buy, the Fed has two other tricks in its pockets.
The Federal Reserve can keep borrowing rates “exceptionally low,” as it’s promised to do for an “extended period.” And it can start paying banks less interest on the cash they keep at the Fed. This could make some banks take that money out and put it into the market.
Either way, this flood of dollars — through cheap borrowing rates and banks injecting cash into the market — will mean inflation.
We’ve already seen gold hit record highs on the news that Moody’s could downgrade U.S. debt. Gold is the top choice for investors who want to protect their wealth from inflation. We’ve recommended that every investor should permanently keep a portion of his portfolio filled with gold.
Pullbacks in the price of gold should be considered buying opportunities. You can also look at other precious metals, like silver and platinum, as hedges. Even other commodities — oil and agricultural grains — have the power to protect your portfolio from inflation.
Beware of oil, though. A big dent in our economic growth could hit oil demand, so keep that in mind when using oil as an inflation hedge.
The next two weeks are going to get pretty crazy. It’s possible that we’ll see the Dow test 12,000 again, and the S&P 500 could fall to 1,250. But be just as ready for rebounds…
The markets will whipsaw with the news, as it did yesterday. News that Bernanke could step in and boost the economy again pushed the market way higher. But news that Moody’s could downgrade the U.S.’s credit rating erased those gains.
The ups and downs will only get sharper for the rest of the month…
Publisher’s Note: If Washington can’t reach a deal, the facts are clear. Volatility will soar — fantastic news for options investors. In fact, some traders say the impasse in Washington could be the greatest wealth-building opportunity of a generation.
Written by Sara Nunnally for Taipan Publishing Group. Additional valuable content can be syndicated via our News RSS feed. Republish without charge. Required: Author attribution, links back to original content orwww.taipanpublishinggroup.com.
Data released by Treasury International Capital (TIC) this afternoon underlined a growing trend among international investors. A reluctance to buy into American stocks and bonds has become more apparent as the US Congress falters on its debt limit talks ahead of the impending August 2 deadline.
The TIC Long-Term Purchases report measures the difference in value between foreign securities purchased by US citizens and American securities purchased by foreigners. Expectations were for an increase from the previous month’s reading of $30.6B to $48.4B. The reported value, however, witnessed a sharp slump with an actual reading of $23.6B. The news serves to highlight the hesitation present in this risk averse market, and a growing uncertainty in the future value of US investments should Congress default on its debt come August 2.
Read more forex trading news on our forex blog.
A report out of Canada early this afternoon pointed towards a significant rise in foreign investment within the Canadian economy this past month. The CAD may be seeing downward price action from regional woes and risk aversion, but data such as this highlights the relative stability of the northern giant’s economic values.
Statistics Canada published its Foreign Securities Purchases report which was expected to show a rise of approximately C$7.41B growth. The indicator measures the total value of domestic bonds, stocks, and money-market assets purchased by foreigners during the reported month. The actual figure came in at C$15.40B, trouncing forecasts and underlining the growth in capital markets across Canada which economists have discussed only mildly in the past few weeks.
Read more forex trading news on our forex blog.
