Wednesday, December 7, 2011

Global Market Weekly Review, 29 November - 2 December 2011

Euro-area finance ministers agreed to extend the capacity of the European Financial Stability Fund (EFSF) by “introducing sovereign bond practical risk participation and a co-investment approach,” the EFSF said. The EFSF has a current lending capacity of €440 billion. The EFSF should be able to leverage its own resources of up to €250 billion. “Under the partial-risk protection, EFSF would provide a partial protection certificate to a newly issued bond of a member state,” the statement cites Klaus Regling, EFSF chief executive officer, as saying.

The Philippines kept its benchmark interest rate unchanged for a fifth meeting as persistent inflation prevented the central bank from joining Indonesia and Thailand in cutting borrowing costs to bolster growth. Bangko Sentral ng Pilipinas kept the rate it pays lenders for overnight deposits at 4.5%. The decision was predicted by 14 of 17 economists in a survey.

US stocks declined as better-than-forecast manufacturing growth and a rally in French and Spanish bonds were not enough to extend the biggest three-day gain in the Standard & Poor’s 500 Index since March 2009. The S&P 500 slid 0.2% to 1,244.58. The Dow Jones Industrial Average decreased 25.65 points (-0.2%) to 12,020.03.

Source: ING Funds Berhad

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