Good morning
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The headlines:
- The Battle for the Renminbi.
Link: Hong Kong bankers may yuan but they don’t sleep.
The rise of…
Hong Kong. Which is being used as a “testing ground” for the freeER trade in the yuan/renmibi*. Which basically means that the banks can now offer some services to be denominated in yuan, rather than in Hong Kong dollars, or whatever.
So, for example, Dim Sum bonds are yuan-denominated bonds issued by corporates who use the money for Chinese expansion. And there are certificates of deposit on sale**. And non-residents can now buy as much yuan as they like (Hong Kong banks won approval for that on July 25, just a short month ago).
Why was that ruling so momentous? Well banks (at least, commercial banks) make their money from charging higher interest rates on loans than they offer on deposits. But obviously, capital requirements say that they can only lend out a percentage of what they have as deposits. Cue: battle for deposits.
The war to be the next global currency of reserve may just have started.
*Two names for China’s currency. I’ve always wondered whether it’s as simple as “dollars” and “greenbacks”. But because I can’t read Mandarin, I really have no idea what’s happening on the bank notes to confirm.
**Fixed deposit accounts.
- Samsung unveils new phone.
Link: when in doubt, accessorise.
They added a pen? It’s like a mix between an iPhone and an iPad. An iPhade. With a pen.
Why is there a pen?
- Philippine economy grows faster than expected.
Link: all hail the emerging markets.
I just wanted to include some good news. Although, it does feel a little contrived. Because what the headline is really saying is that Bloomberg did a survey of 18 economists asking them about their expectations of the quarterly movements in the Philippines GDP. Their median answer was an increase of 5.5%. The actual figure was 5.9%.
So the title is semantic. It could read “economists proved pessimistic”. I’m also interested by the fact that this was the median response, not the arithmetical average. Possible that the average was even lower. Or higher.
But that’s getting sidetracked. The point is that the Philippine economy is growing despite the global crisis.
That’s all for now.
Have a good day.
