For the second time in the first weeks of the program, Beijing’s Municipal Environmental Protection Bureau issued a red alert notifying citizens that the city’s smog was at dangerous levels and likely to remain so for the coming days. Restrictions on driving, some industrial activities and outdoor athletics followed. Meanwhile, private economic research firm CBB International released a warning of its own Thursday with the release of its quarterly economic assessment, often referred to as the China Beige Book, detailing a continued deterioration in activity and investment across almost every sector in China. As investors face a new year, the question looming over Chinese financial assets is not whether the People’s Bank of China will take more action, but rather how much can be accomplished in stimulating the real economy.
BOJ ETF buying program disappoints. Many investors had eagerly anticipated today’s announcement that the Bank of Japan would increase its asset-purchase facility aimed at exchange-traded funds. But at an additional $2.5 billion, it fell well short of the hoped-for scale. The bank has deployed capital in index-linked products to help prevent volatility as it unwinds single-stock positions acquired during the spring of this year. Additionally, BOJ policy leaders announced that the bank will extend the average maturity of its Japanese treasury portfolio to between seven and 12 years.
Chinese software firm to go private. On Friday Beijing security software company Qihoo 360 Technology announced that it will be taken private by a consortium of investors including the Chinese arm of Sequoia Capital in a deal valued at over $9 billion in cash and assumed debt. The transaction is the latest in a string of similar transactions in which U.S.-listed Chinese companies privatize in expectation of going public once again on the Shanghai exchange at a higher valuation.
Glaxo acquires drug portfolio from Bristol-Myers. GlaxoSmithKline and Bristol-Myers Squibb announced this morning a deal in which the Brentford, U.K.-based firm would purchase a group of experimental HIV drugs from New York-headquartered Bristol-Myers for roughly $1.5 billion in total potential payment. The divestiture is part of a larger plan at Bristol-Myers to withdraw from virology research efforts.
Impeachment to move ahead in Brazil. The Supreme Court of Brazil Thursday ruled that impeachment proceedings brought against President Dilma Rousseff were legal but allowed for legislative procedures that aid Rousseff’s defense. Among the new terms dictated by the court is the elimination of the secret vote for Congress as it deliberates.
OPEC see oil below $100 for years. On Friday the Organization of Petroleum Exporting Countries released its World Oil Outlook report, which forecasts a near-term recovery in crude prices but concludes that they will remain below $100 for the long-term. The organization’s analysts projected an average per barrel price of $70 by 2020.
