Business booms in eurozone
Manufacturing in the euro area accelerated last month as incoming new business grew at the fastest pace in three months. A purchasing managers’ index (PMI) for manufacturing rose to 52.6 from 51.7 in August, in line with earlier estimates, IHS Markit said yesterday. The expansion was driven by stronger demand from both domestic and international customers, the London-based company said in a statement. While the report indicates a rebound in confidence after a third quarter marked by political uncertainty and signs of a slowdown, the improvement remains patchy. Headwinds include slumping demand and the fallout from the UK’s decision to leave the EU, as well as concern that European Central Bank stimulus is reaching the limit of its effectiveness.
Japan’s large manufacturers do not see business conditions getting any better, and they do not see them getting any worse. At least for now. Still, they remained more downbeat over the past quarter than expected and the least optimistic in more than three years, underscoring the effects of a stronger currency and weak global growth. This is likely to make it more challenging for the Bank of Japan to stoke inflation and revitalize the economy. The tankan index, which measures large manufacturers’ sentiment toward broad conditions, was unchanged at 6 last month from June, the lowest level since the early days of Abenomics more than three years ago, according to the Bank of Japan’s quarterly survey.
ADB inks risk-transfer deal
The Asian Development Bank (ADB) has signed an agreement with the Swedish International Development Cooperation Agency (SIDA) on a risk-transfer scheme under which SIDA is to guarantee US$155 million out of ADB’s US$455 million basket of five loans to India — a first for a sovereign loan portfolio for any multilateral development bank, the ADB announced yesterday. The Manila-based lender dedicated to reducing poverty in Asia said the pilot guarantee arrangement with SIDA would increase the bank’s lending capacity by an estimated US$500 million over a 10-year period and is being eyed by other multilateral development banks as a way to increase capital amid expanding financing needs for development goals. Risk-transfer agreements pass specified risks from one party to another in return for a fee.
Singapore home prices drop
Singapore home prices dropped by the most in more than seven years as developers offered discounts amid signals from the government that it would not roll back property curbs initiated in 2009. An index tracking private residential prices fell 1.5 percent in the three months ended Sept. 30 from the previous quarter, the biggest decline since June 2009. Prices fell for the 12th straight quarter, the longest streak of quarterly losses since prices were first published in 1975, according to preliminary data from the Urban Redevelopment Authority yesterday. The head of Singapore’s central bank, Ravi Menon, said last month that the city-state does not plan to ease property curbs anytime soon, even as home prices have fallen 11 percent from a peak in September 2013 and sales have halved. That is increasing the pressure on developers to offer discounts, payment programs and other incentives to stoke sales.