German Chancellor Angela Merkel and Japanese Leader Shinzo Abe differ on how best to boost the worldwide economy ahead of a G7 gathering this month.
While Abe made a trademark pitch for major boost in spending, Merkel said Germany was already doing what is needed, referring to the additional increase in domestic demand brought by the arrival of one million evacuees and transients a year ago.
The leaders of the European and East Asian trade powers will put forward their opposing views when Japan hosts a meeting of the G7 nations— including England, Canada, France, Italy and the US.
Head of Corporate trading at Nikko-Desjardins Asset Management, Stuart Poulson commented, “I think both Germany and Japan are taking the necessary steps towards financial recovery for world markets. With Merkel and Abe at the forefront we see very positive reforms on the horizon even if their philosophies on immediate action differ.”
Abe— who is known for his "Abenomics" endeavours to fortify financial growth through expanded open spending—has been urging G7 countries to make an increased effort to boost the world economy.
"We talked about the world financial situation and that we can't simply sit tight for typical financial cycles, we need to proactively handle the dangers to restore the global economy," he said.
"We require an acceleration of basic changes and broad monetary strategies," he told a press gathering, after a meeting at Germany's state visitor house, a palace north of Berlin.
Merkel, however, believes that Germany, Europe's top economy, is doing what is necessary.
"With the numerous displaced people we took in a year ago, we saw a boost in consumption which, from my perspective, will generate improvement in the world economy," she said.
She said Berlin encouraged a three-tier system of reforms, "We are looking to consolidate strong economic spending policies with improved development and increased investment.
Abe came to the presidency in December 2012 vowing to revive the world's third-biggest economy.
Abe's method yielded some results initially when the yen weakened rapidly, making exports cheaper and sparking a securities exchange rally. However, global economic weakness since has seen the yen rebound, as investors rush to the Japanese currency which is viewed as a safe haven.
Tuesday, May 31, 2016
Saturday, May 21, 2016
The Japanese Job Market Bodes Well for Economy
There is good news for Japan's economy -- the Japanese job market is experiencing a boom. This is the best the Japanese job market has performed in last 22 years.
Japan's economy is showing steady signs of recovery. More recently, the country registered an increase in household spending. This has triggered the expectation of employers who have increased hiring in the hope that the domestic economy will perform well in the third quarter.
According to figures released by the Labour Ministry of Japan, the jobs-to-applicant ratio has also increased from 1.09 in May 2015 to 1.10 in June 2015. This figure is close to the numbers witnessed during June 1992 when Japan underwent a brief spell of an asset-inflation bubble burst which eventually lead to the stagnation that the country is fighting even today.
An increasing number of potential employees are trying to make the best of this new development. This is precisely why the jobless rate grew from 3.5 percent in May 2015 to 3.7 percent in June 2015. Given the demand for labour in retail and construction sectors, it is unlikely that the jobless rate will grow further.
The effect of a sales tax hike, which was implemented in April this year, is receding gradually. A Bank of Japan employee cautioned that net exports might see some fluctuations this year. Many of the Japanese companies are in the process of shifting factories and this may affect exports in a negative way.
Nikko-Desjardins, Head of Corporate trading, Stuart Poulson says, "Japan's economy can benefit greatly from an increase in household spending. However, for household spending to continue to register a rise, it is important that Japanese people be convinced that in the near future, their incomes will rise too."
Japan's economy is showing steady signs of recovery. More recently, the country registered an increase in household spending. This has triggered the expectation of employers who have increased hiring in the hope that the domestic economy will perform well in the third quarter.
According to figures released by the Labour Ministry of Japan, the jobs-to-applicant ratio has also increased from 1.09 in May 2015 to 1.10 in June 2015. This figure is close to the numbers witnessed during June 1992 when Japan underwent a brief spell of an asset-inflation bubble burst which eventually lead to the stagnation that the country is fighting even today.
An increasing number of potential employees are trying to make the best of this new development. This is precisely why the jobless rate grew from 3.5 percent in May 2015 to 3.7 percent in June 2015. Given the demand for labour in retail and construction sectors, it is unlikely that the jobless rate will grow further.
The effect of a sales tax hike, which was implemented in April this year, is receding gradually. A Bank of Japan employee cautioned that net exports might see some fluctuations this year. Many of the Japanese companies are in the process of shifting factories and this may affect exports in a negative way.
Nikko-Desjardins, Head of Corporate trading, Stuart Poulson says, "Japan's economy can benefit greatly from an increase in household spending. However, for household spending to continue to register a rise, it is important that Japanese people be convinced that in the near future, their incomes will rise too."
Friday, May 20, 2016
The Saudi Arabian Oil Giants Aramco Value Listing Stuns
Aramco, the Saudi Arabian oil super giant has managed to obtain a multi-dollar listing through only a part of its total corporate heft. The oil super giant is now all set to become the largest oil company in the world.
More recently, the Saudi government also declared that it is planning to sell out a 5% stake in its state oil company. The government is doing this with the intention of boosting its staggering economy. It plans to dedicate its $3 trillion sovereign fund for this purpose.
The Saudi economy will get a major boost from the Aramco deal which will produce anywhere between $2 trillion to $2.5 trillion. This is being hailed as the biggest stock market flotation in history.
Armaco is the only oil producer in Saudi Arabia, a country which is the biggest producer of oil in the world. For this very reason, Aramco exerts huge influence in the global oil markets.
According to statistics, Aramco produces 12 million barrels a day -- one in every nine barrels is produced by Aramco. Aramco's crude oil production capacity is unmatched by any other company in the world. It is believed that in a situation of hypothetical supply disruption, the Saudi Arabian oil giant is capable of solely stabilizing the global oil market.
However, global investors are already pondering over the actual worth of this Saudi Arabian oil giant. If economists and analysts go by the words of Mohammad bin Salman, the deputy crown Prince of Saudi Arabia, Aramco will easily rout Exxon Mobil, another oil giant who’s estimated worth is close to $350 billion. As a matter of fact, the net value of Aramco will leave behind the combined net value of Apple, Exxon, Berkshire Hathaway and Google.
The net value figures of Aramco are mind-blowing. If the company plans to sell 20 percent of its shares, it will raise $400 billion. This figure is capable of changing the face of Saudi stock market.
Stuart Poulson, Head of Corporate Trading at Nikko Desjardins Asset Management says, "Aramco might actually be worth all that money. It is a well-known fact that the company's oil reserves are vast. Aramco's 5 percent may be worth around $2 trillion because the cost of oil production is quite low in Saudi Arabia. Aramco spends only about $2 to produce a barrel of oil."
Saudi Arabia is the one of the few countries that have managed to drive profits from oil production even after prices fell.
More recently, the Saudi government also declared that it is planning to sell out a 5% stake in its state oil company. The government is doing this with the intention of boosting its staggering economy. It plans to dedicate its $3 trillion sovereign fund for this purpose.
The Saudi economy will get a major boost from the Aramco deal which will produce anywhere between $2 trillion to $2.5 trillion. This is being hailed as the biggest stock market flotation in history.
Armaco is the only oil producer in Saudi Arabia, a country which is the biggest producer of oil in the world. For this very reason, Aramco exerts huge influence in the global oil markets.
According to statistics, Aramco produces 12 million barrels a day -- one in every nine barrels is produced by Aramco. Aramco's crude oil production capacity is unmatched by any other company in the world. It is believed that in a situation of hypothetical supply disruption, the Saudi Arabian oil giant is capable of solely stabilizing the global oil market.
However, global investors are already pondering over the actual worth of this Saudi Arabian oil giant. If economists and analysts go by the words of Mohammad bin Salman, the deputy crown Prince of Saudi Arabia, Aramco will easily rout Exxon Mobil, another oil giant who’s estimated worth is close to $350 billion. As a matter of fact, the net value of Aramco will leave behind the combined net value of Apple, Exxon, Berkshire Hathaway and Google.
The net value figures of Aramco are mind-blowing. If the company plans to sell 20 percent of its shares, it will raise $400 billion. This figure is capable of changing the face of Saudi stock market.
Stuart Poulson, Head of Corporate Trading at Nikko Desjardins Asset Management says, "Aramco might actually be worth all that money. It is a well-known fact that the company's oil reserves are vast. Aramco's 5 percent may be worth around $2 trillion because the cost of oil production is quite low in Saudi Arabia. Aramco spends only about $2 to produce a barrel of oil."
Saudi Arabia is the one of the few countries that have managed to drive profits from oil production even after prices fell.
Saturday, May 7, 2016
Scott Morison Insinuates a Tax Cut, Says It's Part of an 'Economic Plan'
Scott Morrison, the Treasurer of Australia, recently made a statement saying that his first budget will be unlike any budgets that Australia has seen. Morrison hinted towards a tax cut and said that he plans to increase education spending.
The government announced that it will be pushing in an extra $1.2 billion in the education budget. If reports are to be believed, under the new budget, people earning more than $80,000 will have to pay lesser taxes than before.
However, Morrison also promised that the new budget had nothing to do with the impending federal election which is to happen on 2 July. The Treasurer said that the new budget is aimed at creating more jobs and that the focus will be on growth and creating a diversified economy.
He also said that he had been allocating his time to the budget for a while now because he understands that Australia does not need a typical budget, but a budget that would strengthen the future of the country.
However, Morrison restrained from making any direct comments about the expected tax cut. At the same time, he also said in a garbed statement that government does not plan to increase the tax burden on Australian citizens and the Australian economy beyond what it is right, because increasing tax will hamper growth and kill jobs, something that Australia cannot afford to do at present.
Stuart Poulson, Head of Corporate Trading at Nikko-Desjardins Asset Management said, "The government must ensure that after the tax revision, an average wage earner should not move into the second highest tax bracket category. If the treasurer is indeed able to reduce taxes, people who earn more than $80,000 will benefit doubly as the temporary deficit levy which was introduced in 2014 will end in 2017."
However, Chris Bowen, the Shadow Treasurer of Australia, has said that he will not support any tax cuts for people who are earning more than $80,000 without first going through the details of the package. Bowen further said that if the government plans to reduce taxes, it will have to justify such an action first and that the entire process will be looked on merits.
Bowen added that the even though the Treasurer says that budget deficits do not count any more, it is hard to ignore the fact that the AAA credit rating is under immense pressure. On top of that, the government has increased overall spending since the last year which is as yet unfunded. Bowen said that he will have to take under consideration all these circumstances before he can approve a tax cut.
More recently, Bill Shorten, the opposition leader of Australia, addressed a conference of journalists in Melbourne where he said that the present Australian government is trying to entice voters by offering them a modest tax cut. However, the people of Australia are smart enough to not fall for such false promises.
He further added that in the last three years, the Liberal government has only stolen money from its voters. Now that the elections are near, the government is trying to buy back voters by offering them money.
The government announced that it will be pushing in an extra $1.2 billion in the education budget. If reports are to be believed, under the new budget, people earning more than $80,000 will have to pay lesser taxes than before.
However, Morrison also promised that the new budget had nothing to do with the impending federal election which is to happen on 2 July. The Treasurer said that the new budget is aimed at creating more jobs and that the focus will be on growth and creating a diversified economy.
He also said that he had been allocating his time to the budget for a while now because he understands that Australia does not need a typical budget, but a budget that would strengthen the future of the country.
However, Morrison restrained from making any direct comments about the expected tax cut. At the same time, he also said in a garbed statement that government does not plan to increase the tax burden on Australian citizens and the Australian economy beyond what it is right, because increasing tax will hamper growth and kill jobs, something that Australia cannot afford to do at present.
Stuart Poulson, Head of Corporate Trading at Nikko-Desjardins Asset Management said, "The government must ensure that after the tax revision, an average wage earner should not move into the second highest tax bracket category. If the treasurer is indeed able to reduce taxes, people who earn more than $80,000 will benefit doubly as the temporary deficit levy which was introduced in 2014 will end in 2017."
However, Chris Bowen, the Shadow Treasurer of Australia, has said that he will not support any tax cuts for people who are earning more than $80,000 without first going through the details of the package. Bowen further said that if the government plans to reduce taxes, it will have to justify such an action first and that the entire process will be looked on merits.
Bowen added that the even though the Treasurer says that budget deficits do not count any more, it is hard to ignore the fact that the AAA credit rating is under immense pressure. On top of that, the government has increased overall spending since the last year which is as yet unfunded. Bowen said that he will have to take under consideration all these circumstances before he can approve a tax cut.
More recently, Bill Shorten, the opposition leader of Australia, addressed a conference of journalists in Melbourne where he said that the present Australian government is trying to entice voters by offering them a modest tax cut. However, the people of Australia are smart enough to not fall for such false promises.
He further added that in the last three years, the Liberal government has only stolen money from its voters. Now that the elections are near, the government is trying to buy back voters by offering them money.
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