China Stocks fall as rising oil prices fuel Inflation concern

April 25, 2011 3: 33 pm EDT by Bloomberg News

April 25 (Bloomberg) - fell of stocks of China, driving the benchmark index to the lowest level of the month, as high oil prices boosted inflation concerns will speed up and stimulate policy more tightening measures.

Baoshan Iron & Steel Co. led declines steel makers as oil is passed to the highest in two weeks. Anhui conch Cement Co., manufacturer of cement and Sany industry heavy Co., the largest manufacturer of machines for the manipulation of concrete, remote at least 2.8 percent on concerns of higher fuel prices may slow economic growth. "A gauge of slipped more than two months after property stocks a researcher of the State said that a tax is needed to reverse the imbalances in the distribution of the wealth of China".Inflation is still the major concern and there is no sign that the Government will relax its tightening, said Wu Kan, a Fund Manager at the Dazhong insurance company, who oversees the $ 285 million. "The tightening retains the assessments of stocks."Of Shanghai Composite index, which follows the largest stock market in China, dropped 45.57 points, or about 1.5%, to 2,964.95 in 15 hours, the lowest since March 31. She declined to 1.3% last week, more than three months. CSI 300 index fell by 1.5% to 3,249.57. Global financial markets, including those in Europe and the United States were closed for a holiday on April 22. Hong Kong is now closed.Shanghai's Composite Index climbed 5.6% this year on speculation that the Government to cool inflation without triggering a slowdown in economic growth. The Central Bank raised the ratio of the requirement to reserve 10 times since the beginning of 2010 and four times increased interest rates to cool inflation as consumer prices rose at the fastest pace since 2008 OutlookBaoshan March.Inflation steelthe listed unit of second largest steel producer in China, fell by 2.7% 7.12 Yuan. Hebei iron & Steel Co., the listed unit of the largest producer of steel of the nation, collapsed 7.5 per cent of 4.71 yuan. Anhui conch dropped to 2.8 per cent to 38.88 yuan, trimming its 31 percent gain this year. SANY heavy slid 4.1% to 18.52 yuan.Consumer prices could climb between 5.2% and 5.5% in April, according to China International Capital Corp. Non-food prices can earn between 0.2% and 0.4% from the previous month while food a decline in prices, analysts led by Peng Wensheng wrote in a report dated from yesterday. The year of the Government inflation target is 4 per cent.Future gross earned for a fourth day after that Syrian security detained at least 200 people following the assassination of demonstrators hostile to the Government forces and US Senator John McCain said rebel in Libya need help in the fight against the forces of Muammar al-Gaddafi. Saudi Arabia, the holder of the world largest crude reserves, has no intention to increase production capacity, an oil official said.PricesThe Oil contract for June delivery rose to 78 cents, or 0.7%, $113.07 US per barrel in New York today. Future advanced 84 cents to $112.29 per barrel, April 21, the colony high since April 8. In the last year, prices have increased by 34%. The market was arrested April 22 for a holiday.Shanghai container-truck drivers were reported to have won cuts in port charges after a sometimes violent protest against the rising costs highlighted the risk of inflation that disorders of the most populous nation of the world.The local Government will be reduce or remove certain costs after that drivers stopped work April 20 through withdrawal and the increase in fuel costs, Xinhua News Agency reported, quoting an unidentified spokesman. The ports of the city are operating normally, said the report.A gauge of property of the Composite of Shanghai index stocks slid 2.2 per cent, the most since February 22. Poly Real Estate Group Co., second developer of China by the market value has dropped from 2 percent to QL yuan. Gemdale Corp. has lost 0.3 for % to 6.62 yuan.Nation property TaxThe needs including real estate, capital gains, bequests and donations, Zhang Monan, researcher at the Information Centre of the State to improve its system of Declaration of property and to levy taxes on personal assets,wrote a commentary published in the daily newspaper of today's China. Information Center of the State is a body of research under the National development and Commission.China reform imposes a tax of property in Shanghai, and Chongqing in January to curb rising real estate prices.Henan Shuanghui Investment & Development Co., enumerated more China meat processer, collapsed 7% to 58.52 yuan, the lowest since November 29. The company and its parent refund 112 tonnes of meat products, representing 4% of sales from March 24 to April 20 Shuanghui said in a statement.April 18, confirmed a report from that affiliate China Central television bought pigs fed with prohibited additive which induces the growth of lean meat.Measurement of StaplesA from consumers to producers-consumers added 0.6%, most among the 10 groups in the CSI 300 industry staple. Kweichow Moutai Co., the largest producer of alcoholic beverages baijiu by market value, rose 3.9% to 183.06 yuan. First quarter net income rose 49 percent from the same period a year earlier to 1.88 billion yuan (288.6 million), the company said in a statement over the weekend. Profit beat the average of 1.81 billion yuan of estimates of three analysts compiled by Bloomberg.Wuliangye Yibin Co., second-large manufacturer of China white alcohol by the value of market, acquired by 1.2% to 32.32 yuan. Luzhou Laojiao Co., a producer of spirits in southwestern Sichuan province, added 4.2% to 46.91 yuan.Chinese wage increase will strengthen domestic consumption, travel and hotel stocks attractive investments, according to Hugh Simon, Chief Executive Officer of Hamon investment required efforts of the Government of China to double over the next five years wages will stimulate spendingsays Simon, whom Dreyfus Greater China Fund beat 90 per cent of the rival funds over the past five years, according to data compiled by Bloomberg.Wage of inflation "is not a bad thing when you move your economy far you and export-based economy gives many opportunities for investor" Simon said in an interview with Bloomberg Television today. The Fund Manager based in Hong Kong said it "also seeks to" airlines and information technology service companies.

-Zhang Shidong. Publisher: Allen Wan

To communicate with the staff of Bloomberg News for this story: Zhang Shidong in Shanghai at the szhang5@bloomberg.net

To contact the editor responsible for this story: Darren Boey to the dboey@bloomberg.net

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High oil prices are blaming speculators and Bernanke

By Ed Wallace

Watch autour of Dallas and Fort Worth traffic, you would never know that the United States had any kind of crisis of gasoline. Many drivers on motorways apparently believe that Texas has already approved the speed limit proposed 85 mph.

Most don't realize that driving a vehicle that is rated at 30 mpg on the road at 85 miles an hour will reduce its consumption of fuel by about 35 percent. What is the gas that they are currently paying $3.79 cost $5.11 in reality. It is reasonable to assume, too, that if we really interested in the cost of gas, we would do everything we could to limit the damage costs. This is not. Complain about price but seem reluctant to do anything on their subject.

Americans think that they know who to blame for the high price of gasoline. The usual culprits are people who drive too fast, inefficient engines, OPEC, and even China. Of course, those who are all factors, but it's like the blame of the housing bubble on the timber industry or a glut of carpenters. It is not a great mystery that is responsible for the increase in gas prices. As I and others have written in the past, the greatest culprits are speculators, the futures markets to their own pockets of game. We all know that. What may come as a shock is that they are facilitated by the Federal Reserve.

This explains why the market for oil and gasoline currently costs consumers and the industry much more than necessary. Until recently, it was impossible to say if speculators were accurate in telling the media this strong world demand for oil has caused prices on the arrow again, pushing the gasoline prices $1 per gallon above where they were at this time last year.

It is true that rail traffic is up in the sign of a strengthening economy U.S.—a - and it is also true that the cargo around the world are back to pre-Great volumes of recession. However, MasterCard (MA) and some oil analysts are saying that domestic consumption of gasoline fell anywhere from 3% to 3.7% in the last five weeks; for a country which burns sometimes 400 million litres of petrol per day, this is no drop. In the future trading, such a decline in demand should perform a reduction in the costs comparable to what buyers are willing to pay for fuel for resale. That does not occur.

During this time, the media continue to say that gasoline prices are directly related to the pricing of oil, which is not quite true. Oil and gasoline are sold to different sets of buyers. It is necessary to buy crude for refining and sells gasoline retail; It is legitimate hedgers. Then there are speculators, who jump on the market for profits on all fuels. To prove once more that in the investment banking business, really nothing is known of oil, Goldman Sachs (GS) advised customers on 11 April to get rid of their holdings of commodities, including oil. The guardian cited Goldman advice as warning: "record level of speculative trading of crude pushed their prices so much in recent months as short-term, reward risk promotes it is more required of these products.".

"Save levels of speculative trading of crude" have pushed oil prices? Funny, all we have heard is that the price of oil of today are justified due to unusually large demand, the growth in the economy of the world.

The same day, the Financial Times reported that in March, the Saudis "strangles back their oil production" - which seems to contradict their promise to replace all oil lost to global markets because of the Libyan Revolution. According to analysts, the Saudis produce a supplement of 300,000 barrels per day, which is enough to satisfy buyers. This assessment is certainly true in the United States. We started this year with 333 million barrels of oil on part. Today, we have 359 million barrels. Some shortages.

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Bric leaders say increasing commodity prices poses threat to global growth - Bloomberg

BRIC leaders called for "more attention to the risk of massive cross-border capital flows" and said that the Monetary Fund International should continue to look to overhaul the role of special drawing rights as an international reserve currency system. Photographer: Nelson Ching/Bloomberg.

The leaders of the Brazil, Russia, India, China and South Africa, said excessively volatile commodity prices pose a threat to the global economy and called for greater regulation of derivatives markets.

Volatility "poses new risks for ongoing recovery of the global economy," the leaders said, according to a news release from their Summit at Chinese station of Sanya. The BRIC countries, such as the five is known, also called for greater vigilance on the impact of the movement of capital from developed economies in emerging markets and agree on a plan to make more loans in local currency.

Rising food and of fuel, prices are inflexible importers like China and the India to maintain low prices for their 2.6 billion people. Export of the country such as the Brazil, the Russia and the South Africa benefit from trade, but are concerned will that rely too heavily on resources stifle diversification of their economies, leaving vulnerable should stop the application.

"Budgetary prospects for emerging economies are more favourable, but this partly reflects the rear high asset and the prices of raw materials, low interest rates and strong capital inflows," International Monetary Fund said in a report this month. A "the reversal could leave exposed posts."

China is the largest importer in the world of soybeans and consumption of energy, according to oil imported to stimulate economic growth. In India, where hundreds of millions of people live in poverty, also said concerned about rising food prices.

"Regulation of the market for derivative products should therefore be strengthened to prevent activities capable of destabilizing the markets," said the document.

Corn, coffee and cotton prices were all more than doubled on the global markets last year, while crude oil prices are up 42% in London. Chicago Wheat futures are likely to increase by $8.60 a bushel before 31 December, 31% up from brokerage low, based in Paris this year, said OTCex group earlier this month. Corn can reach a record $ 10 per bushel, Alex Bos, an analyst of Macquarie Group Ltd. said on 6 April.

This year China expects to import of 57 million tonnes of soybeans, or almost 60 percent of world trade of animal feed and ingredient in tofu.

The release of BRICS called for greater cooperation on food safety to the lack of reliable information and timely time on the supply and demand. The international community was needed to work together to increase production, increase technological support and financing for the developing countries in "create a more equitable and just world."

In a separate agreement, the heads of the five development banks agreed on working a plan to increase the use of local when currencies make loans to the other.

"We talked about how to move more quickly to the use of national currencies," said Medvedev. "I just had a meeting with the President of the Brazil, and we have agreed to intensify work on a possible switch." We could think of such a system with the BRICs. ?

The combined gross domestic product of the five so-called BRICS nations Eclipse the economy of the United States at the end of 2014, International Monetary Fund projected published this week. The euro area will be exceeded this year, data showed. By 2016, the BRICs will have a combined GDP of $ 21 billion from a projection of 18.8 billion for the United States, according to the IMF.

Deputy Prime Minister Sergei Ivanov, said that more than US $100 barrel of oil prices are discouraging Russia diversify its economy. Ivanov, said the current price was unsustainable and that the budget of the Russia will fall into a deficit when it falls.

"When the rain of gold is poured over your head, you did are not motivated to diversify," Ivanov said in an interview on April 7 in Miami. "I would say I hate high oil and gasoline prices, but I am not happy with them.".

Bank of America, Merrill Lynch, said that it expects crude to decline later this year, as increases in prices curb demand.

Brent on average US $94 per barrel in the fourth quarter, analysts at the Bank, led by Blanch in Francisco based in New York, said in a report earlier this week. It is approximately 23% less than the current level of prices.

Gross Brent advanced to more than $127 a barrel on the ice London futures exchange this week, the highest level since August 2008 and approximately $20 price record of the year for 147.50 Brent $ per barrel.

Chinese President Hu Jintao and other leaders of bric also called for "more attention to the risks of cross-border capital flows" and said that the Monetary Fund massive International should continue to examine the role of special drawing rights as a system of reviewing international reserve currency.

"The structure of management of international financial institutions should reflect changes in the global economy, increasing the voice and representation of emerging economies and developing countries," said the press release.

At the Summit of Sanya, HU is joined by Russian President Dmitry Medvedev, the Brazilian President Dilma Rousseff, South African President Jacob Zuma and Indian Prime Minister Manmohan Singh.

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To contact the editor responsible for this story: Ben Richardson at brichardson8@bloomberg.net

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