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October 31, 2010

BREAKING NEWS: China Regulatory Has Notified Banks The New Rule By Telephone

Filed under: Uncategorized — bigcapital @ 4:46 pm
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China Regulatory Has Notified Banks The New Rule By Telephone

China Banking Regulatory Commission has notified banks the new rule by telephone, and the new rule will come into effect on November 1.

The banks are told to charge second home buyers at least 110 percent of benchmark interest rates; and to stop lending to buyers of a third apartment.

 

BEIJING NEWS, Oct 31, 2010 – Beijing has taken a fresh step to discourage property buying by ordering banks to charge higher mortgage interest rates for first home buyers, local media reported over the weekend.

Lenders were told by China’s banking regulator that they can offer at most 15 percent, versus the previous 30 percent, discount to the benchmark interest rates to new mortgage loan applicants, the Beijing News reported.

The newspaper quoted banking executives as saying that China Banking Regulatory Commission has notified banks the new rule by telephone, and the new rule will come into effect on November 1.

China has already taken a flurry of policies to cool its red-hot property sector in this year, including increasing downpayment requirements and raising interest rates.

China allowed banks to offer up to 30 percent discounts of interest rates to home buyers in late 2008 as part of Beijing’s policy package to bolster economic growth.

The end of that 30 percent discount will put China’s bank loan policies unprecedentedly harsh to mortgagers.

At present, banks are told to charge second home buyers at least 110 percent of benchmark interest rates; and to stop lending to buyers of a third apartment.

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October 28, 2010

Market Alert! Must Read! Top Analyst

Filed under: Uncategorized — bigcapital @ 7:55 pm

Market Alert! Must Read! Top Analyst

Attention: This message is intended to be a market risk assessment, not a market prediction. We are a trend research investment company, not market timers.

FutureMoneyTrends.com believes a serious correction in asset prices could happen over the next 10 days. With the Federal Reserve so heavily involved in the markets we can’t say for sure, but looking at several key indicators we are VERY concerned about a move down in the beginning of November. If we’re wrong we may miss out on a few percentage points of profit, but if we’re right we believe we can not only protect ourselves, but find a perfect entry point for our next stock picks. Normally we do not allow short term market moves to determine when we announce a decade trend investment but we believe if the market corrects in the next few weeks it will be anything but normal. Since March of 2009 the Dow has rallied just over 70%. The inverse relationship between the dollar and the markets is what has us worried the most. We haven’t seen this type of bearish sentiment for the dollar since late 2008, just before the last major dollar rally. Bullishness for stocks is also a very crowded trade. So not only is the dollar over due for a correction, but so are stocks. Two important key dates that we all need to be following:

November 2nd is the 2010 election.

November 3rd is the next FOMC meeting.

A Republican win will signal gridlock in D.C. and will stop stimulus for at least the next 6 months. We believe eventually the Republicans will cave and double down on so called targeted stimulus adding to even more targeted chaos in the market place. But with a strict mandate to cut spending and reduce the deficit we think Republican leaders will at least go through the motions of real conservatism for at least the first 6 months, hopefully we’re wrong. Either way Wall St. will know that now is the time to bail, with QE2 expectations way north of 1 trillion dollars the perfect catalyst for a major correction in asset prices could arrive next week.

Don’t believe us, then believe the insiders. Insider selling compared to insider buying is getting a bit ridiculous and when looking at the largest companies insider selling is currently 3,177 to one! When looking at the entire New York Stock Exchange, a normal reading would be two sales for every buy, right now we are seeing just over four sales for every buy. Now this trend has been going on throughout 2010, yet what concerns us now is that the big players are already out and waiting for a new entry point. If the Federal Reserve comes out with any number less than 1 trillion this could push asset prices down significantly. As the old saying goes, ‘buy the rumor sell the news.’

What has changed in the last 24 hours is that our worst fears are coming true. Today fear took over the markets. We pride ourselves in not only picking major multi-decade trends, but timing our entry points perfectly for our subscribers. For the next two weeks expect the most in depth analysis from FutureMoneyTrends.com. We will be focused like a laser on the markets not only to find a perfect entry point for our mining picks, but to see if we should be shorting the market if things look like they might avalanche. For those of you waiting for our next mining pick please be patient, mining stocks tend to do better than the metals in up times and far worse than the metals in down times. The last thing we would ever want to do is suggest a trend right before a major pull back because even if the trend is a major winner for the next 10 years there’s no reason, in our opinion, to jump into an empty pool. It’s best to wait until the water is good and ready.

Source: http://marketpin.blogspot.com

October 22, 2010

Z-Ben expects rise in QDII fund launches, spies opportunity

Filed under: Uncategorized — bigcapital @ 8:38 am
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Z-Ben expects rise in QDII fund launches, spies opportunity

The consultancy says a ramp-up in QDII fund launches over the next year will offer foreign asset managers a key opportunity as these players seek to develop unique products and yet balance costs.

Consultancy Z-Ben Advisors expects new QDII product launches to continue expanding in China over the next year, adding that a valuable opportunity is about to present itself to foreign firms with a domestic partner.

Yesterday, Shanghai-based fund manager Fullgoal revealed that its inaugural “Qualified Domestic Institutional Investor” (QDII) fund had attracted Rmb828 million ($124 million) in assets – above this year’s QDII fundraising average of Rmb550 million.

QDII funds delivered a strong performance in September, returning 7.72% on average versus 2.35% for the average domestic equity fund. Two QDII funds even returned in excess of 10% last month – figures that could spur fresh demand among local investors.

Z-Ben has counted as many as 12 new QDII funds in the product development process and is predicting that at least 60 QDII mutual funds will be available on the market by the end of 2011.

“As the universe of domestic, onshore products becomes increasingly crowded, QDII funds remain the last uncontested territory,” says Francois Guilloux, director of regional sales at Z-Ben Advisors. “This, in turn, means there should be an increasing number of new QDII funds coming to market over the next year.”

Guilloux notes that such a trend is already underway as a number of mid-tier fund managers prepare to launch their respective products. These include the Huatai-Pinebridge Leading Asian Enterprise Fund, while others, such as Citic Prudential, are in the process of applying for product approval.

Adding to the momentum are firms that are preparing a second QDII product launch, including E-Fund and China International.

However, Z-Ben suggests it’s premature to conclude that demand for offshore products among domestic Chinese investors is re-emerging in any meaningful way.

Attempting to provide a counterbalance argument for above-average inflow into Fullgoal’s fund, Guilloux notes that the firm is already known as a strong manager of fixed-income funds, and demand for bond funds domestically has stayed strong, averaging Rmb3.1 billion per new product in September.

He also questions whether QDII funds will continue their outperformance this month, given that the CSI 300 has risen by 11.2% so far in October.

“Even if QDII funds were to continue to outperform domestic asset classes, Chinese investors are still likely to balance these gains against concerns of the negative effects from an appreciating renminbi,” Guilloux adds.

He notes that, while new QDII funds are expected to rise over the next 12 months, fund managers will need to keep one eye differentiation and the other on keeping costs under control.

But he suggests that this balancing act could provide a new set of opportunities to foreign asset managers, especially if local firms were to shift more aggressively towards the fund-of-fund product structure.

“For those firms which have developed a relationship with any Chinese fund manager over the past two years, Z-Ben Advisors would strongly advise reconnecting with your contacts,” says Guilloux.

“Your counterpart’s need to develop unique offshore products, while simultaneously balancing costs and returns, means that a valuable opportunity is about to present itself.”

Source: Visit MARKETPIN http://marketpin.blogspot.com/

October 21, 2010

Japanese Stocks Poised for Bounce to 11,000

Filed under: Uncategorized — bigcapital @ 12:21 pm
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Japanese Stocks Poised for Bounce to 11,000
Japanese Nikkei 225 Stock Average, which has lost 9.6 percent this year, may rise 20 percent through February next year, according to a technical analysis by Mitsubishi UFJ Morgan Stanley Securities Co.

The gauge may climb toward 11,408, the intraday high for the year achieved on April 5, said Naohiko Miyata, chief technical strategist at the brokerage unit of Mitsubishi UFJ Financial Group Inc., Japanese biggest bank by market value. Miyata says the gauge may be set for a sustained period of advance as the yen enters its final phase of gains against the dollar and after the measure found support at a key Fibonacci level.

Day-by-day we are seeing more signs that the gauge has bottomed out. Miyata said in a telephone interview. It;s very possible that the Nikkei will start testing its April high in a pattern similar to the one we saw last year.

Miyata also believes the yen may start weakening next month, helping to boost the Nikkei.

The dollar-yen rate has been moving in an 11-month cycle, touching its low when it enters a new phase, he said. The Japanese currency rose to its highest level for 2009 when it traded at 84.83 on Nov. 27. Taking that as a starting point, the end of the 11-month cycle will be this month.

The yen should start to weaken significantly from next month, with the Nov. 3 Federal Open Market Committee meeting as a turning point, Miyata said.

As the saying goes: buy on expectation and sell on fact. If the U.S. does carry out quantitative easing as people expected, there will be selling of the yen, Miyata said.

The Fibonacci sequence was identified by Italian mathematician Leonardo Fibonacci in the 13th century. The ratio between the numbers, about 0.618, is known as the golden mean, and is used by technical analysts to find levels of resistance and support.

According to Paul Chesson, manager of Invesco Perpetual’s Japan fund, which tops the best 10-year performance tables, it’s all about timing.

In 2002, he said after the Nikkei bounced that it was “a false dawn”. And again in 2006, he said that valuations were “too high” to be a bull. He was right both times.

“People usually sell Japan at the low points, and are all over it like a cheap suit when it has gone up for a couple of years. Last time everyone recommended it was 2006 when the market was 100pc higher than it is today.

“If you buy on a high you’ll be disappointed,” said Mr Chesson, who says valuations are a key factor today. “The market was too expensive 10 years ago, but now it’s too cheap. A fund manager only invests in 30 companies, not the whole market, so he can still perform well even if the market does not.”

Mr Chesson’s change of heart is the main reason why some investors are optimistic.

Deflation has long been a factor in Japan, but Mr Rose said this should not concern the investor too much.

“It has been tackled several times over the past 10 years, but I invest in companies, not politicians, and these will succeed.”

Although Japan may be geographically linked to the big emerging markets of China and Russia, economically it could not be more different.

Japan is a developed market and so does not have the same room for exponential growth that its neighbours have experienced in the past decade – and are expected to continue to have.

He invests in companies that are undervalued. He stresses that he picks companies, rather than invests in sectors or the stock market as a whole.
 

 

Japan Sets Interest Rates at 0 pct

Japan’s central bank has launched a 5 trillion yen ($60 billion) effort to buy a wide range of debt, including government bonds, corporate IOUs, real-estate investment trust funds and exchange-traded funds, setting off global concerns that central banks around the world are prepared for more quantitative easing.

The moves by the Japanese and U.S. central banks indicate that global monetary policy is approaching the end of the road, having exhausted nearly every tool of monetary policy available to stimulate economies that remain resistant to job growth.

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Australian Dollar Pullback Will Be Buying Opportunity, ING Says

Filed under: Uncategorized — bigcapital @ 6:23 am
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Australian Dollar Pullback Will Be Buying Opportunity, ING Says

 

Australia’s dollar may fall to the low 90 U.S. cent level if the Federal Reserve disappoints investors looking for extra monetary stimulus, presenting an opportunity to buy the Aussie, ING Investment Management said.

A decline in Australia’s currency will enable investors to “reset” wagers on its longer-term appreciation, said Mark Robertson, a senior portfolio manager at the unit of the biggest Dutch financial services company. Fed policy makers will announce roughly $500 billion of Treasury purchases at their next meeting on Nov. 2-3, and indicate they are ready to buy more, Goldman Sachs Group Inc. said last week.

“There is a lot of expectation built into what the Fed’s going to do so it wouldn’t be surprising to see some near-term U.S. dollar strength on perhaps a winding back of some of those expectations,” said Robertson, who helps oversee the equivalent of $19 billion as part of a multi-strategies group in Sydney. A pullback in the Aussie “would be an opportunity to reset the portfolio with a little more Aussie dollar exposure,” he said.

ING Investment has been “overweight” the Australian currency since August, said Robertson, who forecasts it may strengthen to $1.10 over the next 12 to 18 months.

The Australian dollar, which briefly rose above parity with the U.S. dollar on Oct. 15, traded at 97.11 U.S. cents as of 11:35 a.m. in Sydney from 96.86 cents in New York yesterday. The currency has gained 9.9 percent in the past three months.

Fed Purchases

The U.S. dollar has dropped against all 16 of its most- traded counterparts in the past quarter amid mounting speculation the Fed will expand a program to purchase Treasuries. The central bank completed purchases of about $1.7 trillion of U.S. debt in March.

Chicago Fed President Charles Evans said yesterday the central bank will need to buy securities on a large scale several times to carry out his preferred strategy of aiming to raise inflation temporarily. Additional Treasury purchases can lower long-term interest rates, he said.

“There’s still going to be a very large and sustained increase in the amount of U.S. dollars in circulation, which has to be Aussie dollar positive,” Robertson said. “The Aussie is a bit like the price of gold, you don’t know how high it’s going to go but you just know it’s going higher.”

Gold rose to a record $1,387.35 an ounce on Oct. 14. The metal will average $1,400 next year, UBS AG analysts wrote in a report Oct. 18, increasing their forecast from $1,295.

China Rates

Australia’s dollar slid the most since June yesterday after China unexpectedly raised interest rates, sparking concern slowing growth in the Asian nation will damp demand for commodities. Australia, which is the largest shipper of iron ore and coal, counts China as its biggest trading partner.

“The rate hike will no doubt be a short-term negative for local and regional equity markets as it was slightly unexpected,” Robertson said. “The intentions behind the move should be seen as supportive of sustainable growth for China over the long term.”

Robertson forecasts that Australia’s benchmark interest rates will rise toward 5 and 5.5 percent over the next 12 months. Governor Glenn Stevens raised the key rate six times beginning October 2009 before beginning a five-month pause in June.

Analyst picks long-term strength

AMP Capital Investors chief economist Shane Oliver says while the Australian dollar is vulnerable to a correction, after rising so quickly since August, it is likely to hold around the parity level for the “next few years”, due to the strength of the economy and strong commodity prices.

“While the high $A will make life tough for trade exposed companies without a natural hedge, on balance it is more of a positive for the Australian economy. It is unambiguously positive for consumers and will help limit the extent to which interest rates have to rise,” Mr Oliver said.

Charts suggest the local currency could rise as high as $US1.0236 in coming weeks, the 161.8 per cent Fibonacci projection level of the currency’s fall between November 2009 and May 2010.

The Australian dollar has been the strongest major currency since the country skirted through the global financial crisis without falling into recession. In fact, its economy picked up steam, and the currency has surged 66 per cent since touching a low of $US0.6007 in October 2008.

Unlike other countries griping about excessive currency strength against a sliding dollar, Australia’s central bank has considered a stronger currency a natural outcome of the country’s booming resources trade and a tool for fighting inflation.

Travellers uncertain

Travellers at Sydney International Airport, who were heading on holidays on Saturday afternoon and those returning home to the US, expressed their surprise, delight and indifference to AAP.

Friends Helen Foulis and Debra Thorsen – who were flying to San Francisco, Las Vegas and New York for a two-week break – said the strong Aussie dollar was encouraging for their shopping trips.

“The shopping trips are going to be mega,” Ms Foulis said.

“Same for me, I’m going shopping for clothes, shoes, jeans,” Ms Thorsen said.

Christine Chong, who planned to visit friends and family in Los Angles, said the historic parity didn’t make much of a different to her.

“If you’re going to travel, you’ll travel,” she said.

“I don’t spend much anyway so it doesn’t make a difference.”

American business traveller Chris Phipps said the two currencies had been close for a long time.

“Being parity is like being at home and I’m going to spend the normal way,” he said.

October 20, 2010

Bank of Korea considering gold purchases: report

Filed under: Uncategorized — bigcapital @ 12:46 am
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HONG KONG (NEWS) — South Korea is considering buying gold to diversify its foreign exchange reserves, according to a report Tuesday in the Financial Times. Seoul, which holds about 63% of its reserves in U.S. dollars, is believed to have shifted its official skepticism towards bullion at a time when other central banks in Asia are stocking up on gold amid concerns over the weak dollar, the report said. The Bank of Korea is receptive to the idea of buying gold though there remain “differences of views” within the central bank on the issue, the FT cited a unidentified person who has advised the central bank as saying.

October 19, 2010

China Unexpectedly Hike Rates‎, ready to reduce the value of US Dollar next time

Filed under: Uncategorized — bigcapital @ 11:17 pm
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China Unexpectedly Hike Rates‎, ready to reduce the value of US Dollar next time

 

The People’s Bank of China unexpectedly raised the one-year lending and deposit rates by 25 basis points each, effective Wednesday. October 20, 2010

Higher interest rates in China might attract more inflows of speculative “hot money” that regulators worry might be fueling a dangerous bubble in stock and real estate prices. Beijing has tried to block such flows, and analysts suggested earlier that might have been a reason for delaying a rate increase.

U.S. POINTS TO CHINA

The G20 finance ministers and central bank governors at the meetings in Gyeongju, South Korea are expected to tackle head-on the disparities in currency policies that are distorting capital flows in the hopes of achieving a more coordinated approach.

But U.S. officials have put most of the blame on China’s highly restrictive exchange rate regime, which until recently had kept the yuan largely pegged to the dollar. The United States is pressuring China to allow the value of its yuan to rise to take some pressure off capital flows and to rebalance its economy away from exports.

On Friday, however, Geithner delayed a report about whether the yuan’s value is being manipulated, saying instead that he wants to work through the G20 process to hash out a multilateral solution.

Geithner said in Palo Alto that he believes China will continue to lift the value of its yuan currency to aid the rebalancing of its economy away from exports and toward domestic growth.

Asked how much higher China should allow the yuan to rise, Geithner said: “Higher.”

“You can’t know how far it should go. What you know now is that it’s significantly undervalued which I think they acknowledge and it’s better for them, and of course very important for us, that it move. And I think it’s going to continue to move,” Geithner said.

 

Many banks expect that AUD/USD will rise to parity by the year-end

BNP Paribas is one of the largest global banking groups in the world, bet on Aussie’s strength.

Strategists at BNP Paribas are loyal to the forecast that Australian dollar will rise above the parity with the greenback to $1.0200 by end of the fourth quarter.

Technical analysts at RBS Morgans are quite bullish on Australian dollar expecting that the pair AUD/USD will advance to US$0.978 in coming months. Some traders even bet that Aussie’s going to strengthen to parity with its US counterpart.

Analysts at BNP Paribas SA in London expect that Australian currency will for the first time rise to parity with the greenback by the end of 2010 and trade at the level of $1.02. According to the specialists, this may happen as Australia’s economic growth is gaining pace, while the Federal Reserve intends for further monetary policy.

Everyone is worried about exchange rates except Australia. The Australian dollar has appreciated 50 per cent since March 2009 and 20 per cent since June this year and is this morning sitting comfortably above 97 US cents, but there has not been a peep from either politicians or central bankers.

Australia is an island of laissez-faire calm in a frothing sea of competitive devaluation. Why? Because we have neither a demand deficit nor high unemployment.

As 12-year Reserve Bank staffer and now HSBC’s Australian economist, Paul Bloxham, said in my interview with him on Inside Business yesterday, the RBA likes the appreciation of the Australian dollar because it helps reduce inflation.

 

SOUTH KOREAN Central Bank Looks To Gold

South Korea, holder of the world’s fifth-biggest foreign exchange reserves, is considering buying gold to diversify its dollar-heavy portfolio, the country’s central bank said, adding it would be cautious in making any final decision.

Even a small realignment of South Korea’s reserves would have a powerfully bullish effect on the gold market. With just 14 tonnes of gold – or 0.2 per cent of its $290bn reserves – Seoul is one of the smallest holders of gold among large economies. The world average is 10 per cent, according to the World Gold Council, while countries such as the US, Germany and France hold well over 50 per cent of their reserves in gold.

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The Federal Reserve has talked itself into a corner QE2

Filed under: Uncategorized — bigcapital @ 12:21 pm
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The Federal Reserve has talked itself into a corner QE2

By making it clear the next step for monetary policy will be further quantitative easing, the Fed has ignited a frenzy of market activity. Investors’ experience was that the original round of QE triggered a massive rally in risk markets from their lows in the spring of 2009. So another round of QE justifies yet more speculative demand for assets. Speculative demand begets speculative demand.

Which brings us to where we are now–market expectations for something in the region of $1 trillion to $1.5 trillion of additional quantitative easing by the Fed. It’s also worth noting that the Fed’s QE is expected to be followed by yet more Bank of England and Bank of Japan action as well.

This raises two not inconsequential problems for investors: what if the Fed fails to deliver as much QE as the market demands; or what if it does and either it doesn’t work or works too well.

Fed Chairman Ben Bernanke hinted at some of the reasons the central bank might be reluctant to do as much as the market expects in his speech last week. He accepted that “nonconventional policies have costs and limitations that must be taken into account in judging whether and how aggressively they should be used.”

Other central bankers, including the Bank of England’s Paul Fisher, have begun to think publicly about the mechanics of how, when the time comes, to extract central banks from the vast amounts of quantitative easing they have done.

The more QE central banks do, the more of a dominant position they take in the markets in which they operate. The Fed, for instance, has an overwhelming position in U.S. securitized mortgages, while in the U.K., the Bank of England owns more than half of some gilt issues outstanding and at least 20% of the majority of the rest.

There should be no problems getting more sovereign debt onto central bank books, after all, the U.S., the U.K. and Japan will be running large deficits for a long time, so supply isn’t an issue. But what happens a few years down the line when governments continue to pump out supply but central banks also need to sell their holdings? If they do, they run the risk of creating disorderly markets. If they don’t they run the risk of inflationary consequences of debt monetization.

So central banks are likely to be cautious about what they do. But even if they fulfil market expectations, there’s the risk they fail to ignite underlying aggregate demand because the problem with economies isn’t the lack of liquidity but rather the need to deleverage from a debt binge. In which case, more QE could fail in its intention. Indeed, it could more than fail, but actually be damaging by stimulating speculative demand for commodities. This jump in commodity prices then eats into consumers’ pocketbooks, dragging demand down even further.

On one or other count, investors seem destined to suffer disappointment with QE2. And there’s not a lot central banks can do about it

October 15, 2010

ASIA OUTLOOK TODAY

Filed under: Uncategorized — bigcapital @ 7:49 am

ASIA OUTLOOK TODAY: Regional stock markets likely to drift lower; tepid performance on Wall Street may prompt some investors to take money off the table as they watch for speech by Fed’s Bernanke later today.

In FX markets, USD may bounce a little after its recent losses as risk appetite wanes, traders look to Bernanke; AUD/USD some 70 pips from parity after coming tantalizingly close Thursday; would probably need some catalyst (maybe Bernanke or retail sales data) to push it over the line.

EUR/USD at 1.4071 vs 1.4077 late NY trade, EUR/JPY at 114.66 vs 114.74, USD/JPY at 81.48 vs 81.51.

On data slate: Japan revised industrial production at 0430 GMT, Singapore retail sales at 0500 GMT, India WPI at 0630 GMT, China’s Communist Party meets, BOJ governor Shirakawa speaks, Malaysia Budget presentation, Philippines overseas workers’ remittances.

Later there’s EU trade balance, EU CPI, Atlanta Fed president Lockhart speaks, fed chairman Bernanke speaks, U.S. CPI, Empire State manufacturing survey, Thomson Reuters/University of Michigan consumer sentiment index, advance retail sales, total inventories.

October 13, 2010

Korea’s PPP per capita global ranking is 22nd

Korea’s PPP per capita global ranking is 22nd

KOREAN GDP

The nation is closing the gap with Japan on this measurement

Korea’s per capita purchasing power is expected to reach $29,790 this year, placing it 22nd in the world, a report by the International Monetary Fund (IMF) said yesterday.

This year’s purchasing power parity (PPP) is up $1,852 from the comparable figure tallied for 2009, the economic outlook report said. This places the country just behind France and Japan, whose per capita spending power is expected to reach $34,092 and $33,828, respectively. Korea’s PPP this year is also larger than the country’s nominal per capita gross domestic product (GDP) that may hit $20,164 in 2010.

The PPP index is used to gauge actual living standards by measuring purchasing power of people in different countries on the assumption that living costs and currency exchange rates are equal around the world.

The figure may be larger or smaller than the per capita GDP because of differences in consumer prices, various services and utility costs. Besides South Korea, 10 other countries, including Taiwan, Singapore, the Czech Republic and Portugal, had PPP numbers exceeding their respective GDP.

The latest IMF report, meanwhile, showed Luxembourg, Singapore and Norway to have the highest per capita PPP in the world this year, trailed by the United States.

Luxembourg’s PPP could top $80,000, with Singapore and Norway surpassing the $57,000 and $52,000 marks, respectively.

Countries such as Spain, Italy, Israel and Greece may have marginally lower per capita PPPs compared to Korea.

The findings said Korea’s PPP numbers will continue to grow steadily to reach $38,767 in 2015, which could further narrow the gap with Japan, whose per capita PPP may hit $40,195 then.

Korea’s spending power is forecast to reach over $38,000 by 2015, narrowing the gap with Japan, whose figure is expected to be just over $40,000.

The Ministry of Strategy and Finance says the reason for the large difference between the PPP and the per capita GDP is because of the exchange rate and the comparatively cheaper public utility charges in Korea.

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