Singapore Dollar Surges, Asian Stocks Climb as Global Growth Accelerates
April 14 (Bloomberg) -- Mitul Kotecha, Hong Kong-based head of global currency at Credit Agricole CIB, talks with Bloomberg's Haslinda Amin about China's yuan policy and the outlook for Asian currencies. (This is an excerpt of the full interview. Source: Bloomberg)
April 14 (Bloomberg) -- Stacy Smith, chief financial officer at Intel Corp., talks with Bloomberg's Susan Li about demand for personal computers. The world’s biggest chipmaker forecast second-quarter sales that topped analysts’ predictions, citing growing worldwide demand. Speaking from Santa Clara, California, Smith also discusses Apple's iPad, partnerships and China's currency policy. (Source: Bloomberg)
The Singapore dollar strengthened the most in 10 months against the U.S. currency and South Korea’s won jumped after government reports showed accelerating economic growth. Technology shares led a rally in Asian stocks after Intel Corp.’s sales forecast beat analysts’ estimates.
The Monetary Authority of Singapore revalued its currency, sending it 0.9 percent higher against the dollar to 1.3798 as the government said the economy will expand as much as 9 percent this year. The won jumped 0.6 percent versus the dollar. The MSCI Asia Pacific Index gained 0.5 percent to 128.07 at 11:50 a.m. in Tokyo, and futures on the Standard & Poor’s 500 Index increased 0.2 percent. Intel shares rose as much as 3.6 percent in extended trading after the New York close.
Accelerating growth in Singapore and the biggest drop in Korean unemployment in a decade underscored Asia’s leadership in the global recovery. Economists surveyed by Bloomberg News estimated China’s economy probably grew 11.7 percent in the first quarter, the fastest pace in almost three years. Intel’s forecast increased optimism as the U.S. earnings season starts.
“Companies are demonstrating that economic conditions are improving, while the data is still pointing to an ongoing theme of recovery,” said Prasad Patkar, who helps oversee $1.9 billion at Platypus Asset Management Ltd. in Sydney. “You now need to watch the underlying performance of the global economy once all the stimulus has washed through.”
Equities Gain
Singapore’s benchmark Straits Times Index advanced to a 22- month high, rising as much 0.9 percent to 2,998.64. The city- state’s $182 billion economy rose an annualized 32.1 percent from the previous three months in the first quarter after shrinking 2.8 percent from October to December. DBS Group Holdings Ltd., Southeast Asia’s biggest lender, climbed 2.8 percent.
South Korea’s Kospi stock index rose 0.9 percent after the nation’s unemployment rate declined by the most in 10 years in March. KB Financial Group Inc. gained 3.6 percent and Shinhan Financial Group Co. added 2.7 percent. Samsung Electronics Co., the world’s largest computer-memory chipmaker, climbed 1.6 percent after Intel’s second-quarter sales forecast for revenue of $10.2 billion, plus or minus $400 million. Analysts had estimated $9.72 billion, according to a Bloomberg survey.
Copper futures on the London Metal Exchange gained as much as 0.9 percent to $7,968 a metric ton, and traded at $7,944 in Asia. Aluminum rose as much as 0.4 percent to $2,445 a ton.
Yen Weakens
The yen weakened for a fifth day against the euro, the longest losing streak in three months, as signs the global economy is recovering boosted demand for riskier assets.
“Risk appetite is improving, buoyed by solid economic data and corporate profits,” said Norihiro Tsuruta, chief strategist in Tokyo at Shinko Research Institute Ltd. ’’This will encourage a fund allocation shift away from the yen.’’
The Japanese currency fell against 15 of its 16 most-traded counterparts, declining 0.4 percent to 127.31 per euro. Europe’s single currency strengthened to $1.365 in Tokyo from $1.3614 in New York yesterday.
New Zealand’s dollar weakened against all major peers as a government report today showed retail sales unexpectedly dropped in February, adding to signs the central bank will keep interest rates at a record low to sustain the economic recovery.
New Zealand’s dollar fell 0.3 percent to 71.14 U.S. cents and 0.3 percent to 66.35 yen.
Declining Risk
The cost of protecting Japanese corporate bonds from default was on course to fall to its lowest level since June 2008, with the Markit iTraxx Japan index dropping 2 basis points to 85 basis points, according to Deutsche Bank AG and CMA DataVision in New York. Indicators of corporate credit risk also fell in Australia and Asia.
Investors use the default-swap indexes to hedge against losses on corporate debt or speculate on creditworthiness, and the swaps typically fall as investor confidence increases.
The Markit iTraxx Asia index of 50 investment-grade borrowers outside Japan dropped 1 basis point to 89.5 basis points, while the Markit iTraxx Australia index fell 2 basis points to 77.5 basis points, Deutsche Bank prices show. A basis point is 0.01 percentage point.
Crude oil pared losses and traded near $84 a barrel in New York, snapping five days of declines. The contract for May delivery was at $84.32 a barrel, up 27 cents, in electronic trading on the New York Mercantile Exchange. It earlier fell as much as 34 cents.
To contact the reporter on this story: Shani Raja in Sydney at sraja4@bloomberg.net
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