The Finance Ministry and Bank Indonesia are optimistic that the recent slump in the financial markets will be just temporary, given that the country’s economy is in solid condition.
Investors scared off by events in Indonesia and abroad on Friday led the country’s benchmark stock index to its biggest single-day fall in almost seven months.
The rupiah also weakened overseas as investors reduced their holdings in Indonesian assets amid concern that the government’s regulatory framework would deter foreign investment. There were also fears that Greece’s withdrawal from the euro zone would siphon money from emerging markets.
Finance Minister Agus Martowardojo said he was optimistic that the nation’s economic growth was to remain strong, referring to the recent report issued by the Organization for Economic Cooperation and Development.
He said robust investment and a pick up in investment would be the key drivers in the domestic economy.
The Paris-based organization said in a report on May 22 that Indonesia’s economy “has continued to grow at a rapid pace, despite signs of slowing elsewhere in Asia and its impact on regional trade.”
The OECD predicted Indonesia’s economy will expand 5.8 percent this year and 6 percent next.
Hartadi Sarwono, a deputy governor at the central bank, acknowledged there had been a reallocation of assets from emerging market assets into safe-haven assets.
He also denied talk that Bank Indonesia would impose tight controls in foreign exchange, replacing the nation’s current free-floating foreign exchange system, which ensures the free movement of capital in and out of the country.
Investor Daily
Finance workers, pensions and death - Director of Finance online
Research shows linkage between pension amounts received and mortality.
Pensions specialist Mercer is advising smaller pension schemes to review their mortality data in light of new figures published by a research group of the Actuarial Profession, the Continuous Mortality Investigation (CMI).
The CMI has published research highlighting the wide variation of mortality experience among members of different pension schemes in the UK.The CMI pensioner data is based on the experience of the UK’s occupational pension schemes and is used to estimate mortality rates.
The lower the mortality rates, the longer people are expected to live.
This means pension payments are likely to have to be made for a longer time and schemes have to hold more assets to cover this longer period.
The research shows a wide fluctuation in mortality rates both between industry sectors and within each industry sector.
For example, overall mortality rates in the financial sector are around 20% less than the rates calculated by schemes in basic industries, such as mining and paper.
However, within the financial sector, members receiving pensions of less than £1,500 a year were almost twice as likely to die earlier than pensioners receiving over £25,000 each year.
The data suggests that working in the same industry could be less relevant to life expectancy than the level of pension received, which itself is likely to be just a proxy for the socio-economic group an individual belongs to.
Glyn Bradley, Associate at Mercer, explained:
"The CMI research highlights the wide variation in life expectancies between different pension schemes. While it is common knowledge that employees in different sectors have different life expectancies overall, there are also variations within an individual sector. In our mortality assessments for clients, we find that it's not unusual for senior managerial employees to live 2-3 years longer than employees with more routine work in the same company.
"This means that thesepension schemes need to hold about 10% more assets, per pound of pension being paid to the retired higher paid workers, relative to the amount they need to hold to provide a lower paid worker's pension. What is likely to be happening is that, on average, higher paid workers have healthier lifestyles – in the sense that they smoke less, drink less, take more exercise an d have access to better healthcare and diets– than lower-paid employees.
"Of course, some highly paid people lead less healthy lives, and many low paid people lead healthy lives, so these are very broad generalisations but in short: working with your hands won’t kill you, but the booze and fags might."
Bradley adds that pension schemes need to carefully consider their own membership.
A decade ago, it was difficult to set mortality assumptions on a scheme-specific basis.
Bradley goes on to say:
"Nowadays, even small schemes can’t afford to ignore the available information and need to take advantage of the modern actuarial techniques available to get a scheme-specific result.
"Postcode profiling, for example, is now routine for many schemes and easy for them to do, without needing to issue detailed lifestyle and medical questionnaires to members. Medium sized schemes now have access to the kinds of sophisticated modelling that were once the preserve of large insurers. How mortality rates will change in future is still very uncertain, but it is now easier than ever for schemes to get a good idea of where they stand today."
Forex: USD/CAD down targeting daily low - FXStreet.com
Ship Finance International Limited Crushes Earnings Estimates - msnbc.com
Ship Finance International Limited reported earnings on May 24. Here are the numbers you need to know.
The 10-second takeaway
For the quarter ended March 31 (Q1), Ship Finance International Limited met expectations on revenues and crushed expectations on earnings per share.
Compared to the prior-year quarter, revenue improved significantly and GAAP earnings per share expanded significantly.
Margins improved across the board.
Revenue details
Ship Finance International Limited reported revenue of $84.1 million. The one analyst polled by S&P Capital IQ looked for a top line of $85.0 million on the same basis. GAAP reported sales were 21% higher than the prior-year quarter's $69.8 million.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS details
EPS came in at $0.61. The three earnings estimates compiled by S&P Capital IQ predicted $0.35 per share. GAAP EPS of $0.49 for Q1 were 20% higher than the prior-year quarter's $0.41 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
Margin details
For the quarter, gross margin was 72.6%, 190 basis points better than the prior-year quarter. Operating margin was 53.0%, 210 basis points better than the prior-year quarter. Net margin was 46.3%, 30 basis points better than the prior-year quarter.
Looking ahead
Next quarter's average estimate for revenue is $137.0 million. On the bottom line, the average EPS estimate is $0.38.
Next year's average estimate for revenue is $420.7 million. The average EPS estimate is $1.67.
Investor sentiment
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 1,103 members out of 1,130 rating the stock outperform, and 28 members rating it underperform. Among 232 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 222 give Ship Finance International Limited a green thumbs-up, and 10 give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Ship Finance International Limited is outperform, with an average price target of $15.86.
Over the decades, small-cap stocks, like Ship Finance International Limited have provided market-beating returns, provided they're value priced and have solid businesses. Read about a pair of companies with a lock on their markets in "Too Small to Fail: Two Small Caps the Government Won't Let Go Broke." Click here for instant access to this free report.
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FOREX-Euro edges up but Spain fears leave it vulnerable - Reuters UK
* Euro stays near last week's low just below $1.25
* Doubts grow that Spain can support ailing banks on its own
* Eyes on whether Spanish govt bond yield hits 7 pct
* EUR short covering may be curbed ahead of Irish referendum
LONDON, May 29 (Reuters) - The euro edged up against the dollar on Tuesday as investors cut hefty bearish bets in the currency, but worries about Spain's banking sector left it hovering close to its lowest levels in nearly two years.
Analysts and traders said the euro had good support at the $1.2500 level and Friday's trough of $1.2495, with bids around that area, but expected it would soon break lower given the extent of the concerns surrounding the euro zone debt crisis.
Worries about the cost of shoring up Spain's banking system lifted its debt yields on Monday, driving the gap between Spanish and German 10-year yields to euro era highs, as the risk grew that Spain may be forced to seek an international bailout.
The euro was up 0.2 percent at $1.2566, with traders citing demand from corporates and Middle East names.
Having failed to clear resistance at previous support around $1.2625 for three days in a row, however, the euro was vulnerable to another test of Friday's low, which marked its weakest since July 2010.
"We may see a bit of consolidation here but going forward we still have a euro that is very weak and vulnerable. The widening of spreads between Spain and Germany and Italy and Germany keeps worries about the debt crisis very much alive," said Niels Christensen, currency strategist at Nordea in Copenhagen.
"I don't see the euro moving above $1.27. It's only a matter of time before it breaks $1.25. This is psychological support but it's not a big level like the January low was (around $1.2624) and that has clearly broken."
The euro gave up most of the gains made on Monday after Greek polls showed more support for pro-bailout parties ahead of the country's election on June 17. That eased fears Greece may leave the euro zone.
Bids just below $1.25 may support the euro for now, though further losses could see it drop towards $1.2450, where traders reported stop-loss sell orders.
"Although pessimism over Greece is somewhat receding, worries about Spain are growing, with markets watching whether the Spanish bond yield will hit the seven percent mark," said Masafumi Yamamoto, chief FX strategist at Barclays in Tokyo.
Short-term, the euro may continue to be held up by bouts of short covering. Speculators bolstered short euro positions to record highs in the week ended May 22, leaving ample scope for a correction as they cut positions and book profits.
TROUBLES IN SPAIN
Many traders expect further downside in the euro as they fear troubles at Spanish banks hit by a bust in property could further complicate Madrid's efforts to rein in its debt.
Spain's fourth-largest lender Bankia has asked for a bailout of 19 billion euros, in addition to 4.5 billion euros the state has already pumped in to cover possible losses on repossessed property, loans and investments.
Prime Minister Mariano Rajoy on Monday again ruled out seeking outside aid to revive Spain's banking sector, though many investors are sceptical this will be possible.
Spanish 10-year bond yields rose above 6.5 percent on Monday. A level of 7 percent is seen as critical as euro zone countries that have previously requested bailouts did so soon after their 10-year yields rose above that mark.
Any buying in the euro may also be curbed ahead of Ireland's referendum on Europe's new fiscal treaty on Thursday, although the market is cautiously optimistic that the Irish will support the treaty on fear that a "no" vote could add fuel to the fire.
Against the yen, the common currency fetched 99.87 yen , not far from a four-month low of 99.37 yen hit last week. The yen, along with the dollar, was supported by the market's risk averse mood.
The dollar stood at 79.47 yen, not far from a three-month low of 79.002 yen.
The higher-yielding Australian dollar was up 0.4 percent at $0.9888, above last week's six-month low of $0.9690.
Forex: USD/CHF tests 0.9600 - FXStreet.com
Forex: EUR/USD off session highs - NASDAQ
FXstreet.com (Barcelona) - The single currency is retracing some ground after hitting 1.2574, today's high so far, as risk-on trade is creeping back.
The Spanish banking system, with Bankia in the eye of the storm, continues to be on centre stage on Tuesday, amidst statements by the Bank of Spain assessing that the economic activity would accelerate its downside into the second quarter. It is worth noting as well, that Spanish retail sales have declined 9.8% YoY during April, the biggest drop since 2003 and the 22nd consecutive fall.
At the moment, the cross is up 0.13% at 1.2555, with the next resistance at 1.2625 ahead of 1.2639 (MA10d) then 1.2690 (high May 23) and 1.2820 (high May 22).
On the other hand, a violation of 1.2495 (low May 25) would expose 1.2483 (low Jul.2 2010) then 1.2398 (high Jun.28 2010) and 1.2386 (MA21d).
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