Credicorp Securities Headlines: Eurozone problems could blight world economy: British PM David Cameron

MANCHESTER: British Prime Minister David Cameron said Sunday that the eurozone had to get on with fixing its financial problems or risk pulling down the entire world economy.

Speaking in Manchester, northwest England, before the start of his governing Conservative Party’s annual conference, Cameron said eurozone leaders must “roll up their sleeves” as they only had weeks to get it right.

“Frankly, right now the eurozone is a threat not just to itself, but also a threat to the British economy, but a threat to the worldwide economy and so we have to deal with this,” he told BBC television.

He added now was not the time for a British referendum on whether to stay in or leave the 27-member European Union — a subject which may be debated in the next session of parliament.

“Clearly there is a real problem in the eurozone and we’ve got to deal with that problem,” Cameron said.

“The British government has a very clear view, a view that we are pushing with partners in Europe, with the International Monetary Fund, with others about what needs to be done,” he said.

“Strengthening the financial mechanisms in Europe, greater involvement for the IMF, facing up to the debts and the problems and dealing with them decisively: This is what needs to happen.”

Cameron, who is staunchly against joining the euro currency, said it would be “very bad” for Britain if the eurozone broke up, given that 40 percent of British exports went to those 17 countries.

However, “Action needs to be taken in the coming weeks to strengthen Europe’s banks, to build the defences that the eurozone has, to deal with the problem of debt decisively.

Credicorp Securities Headlines: New Australian stock exchange opens

Stockbrokers will have an alternative market for trading Australian shares for the first time today when Australian Stock Exchange rival Chi-X opens for business. Chi-X, a subsidiary of Chi-X Global, owned by Japanese finance group Nomura, has said it will reduce costs and increase efficiency in trading shares and will introduce competition in the Australian [...]

Credicorp Securities Headlines: EU pushes for global financial trading tax

(AP)  LONDON — Taxing financial trades has been touted as a panacea for all kinds of global ills, a cash source to fight poverty and global warming. But the latest European attempt to introduce a worldwide standard 40 years after it was first conceived is facing stiff opposition from the U.S. and Britain.

Jose Manuel Barroso, the president of the EU’s executive arm, on Wednesday threw his weight behind the tax that his office estimated could raise euro57 billion ($77 billion) a year in Europe to help combat a debt crisis that is threatening the euro currency.

“In the last three years, member states have granted aid and provided guarantees of euro4.6 trillion to the financial sector,” Barroso said. “It is time for the financial sector to make a contribution back to society.”

The tax would be a tiny percentage of the value of a trade in assets like stocks and bonds. Although some countries already have a minimal duty on share trading, the new proposal would not only increase the scope and size of the tax but also siphon off some revenue to Brussels.

The European Commission has formally backed the tax to take effect from January 2014.

As a result of the financial crisis in 2008 and the ensuing recession, debt levels across Europe, and not just in the bailed out countries of Greece, Ireland and Portugal, have risen sharply. Across the 27-nation EU, debt as a percentage of national income has spiked from below 60 percent in 2007 to 80 percent this year.

Though the tax could dent growth and employment, it has won a fair degree of support across the 17-country eurozone, including France and Germany, the EU’s two biggest economies.

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The consistency in inflation rates is worrying policy-makers

The stock markets are entering a gloomy second-half of 2011-12, notwithstanding a grim economic scenario globally. Is it a failure of the economic policy adopted by several nation states supporting their falling financial institutions? While this question is debatable among economists and policy-makers, the Indian conditions are peculiar compared to other developing nations, which have more exposure to developed markets while India is not. This statement goes with a caveat that India is not immune to global economic incidents.

The benchmark Bombay Stock Exchange (BSE) 30-share index, Sensex, recorded its biggest quarterly fall of 12.8 per cent as on September 30, 2011. Earlier, its biggest fall was recorded in the aftermath of the collapse of U.S.-based Lehman Brothers in September 2008, a 25 per cent downfall in the third quarter (October to December) in 2008. The Sensex closed at 16453.76 on September 30, 2011, against 19420.39 in April this year, a fall of 2966.63 points.

Meanwhile the rupee’s fall was sharper and it moved towards the range of 49.50-50 in September as compared to an average of 44.30 a dollar in April. In calendar year 2008, the average of rupee’s exchange rate was around 43.40 a dollar.