「十二五」 進一步提升城鎮化水平

世界銀行預測，到2020年，中國市區人口超過100萬的大城市數量將突破80個。中國社會科學院財政與貿易經濟研究所最新發布的《中國財政政策報告2010/2011》指出，「十二五」時期，提升中國的城市化水平是順應經濟發展趨勢，提高人民生活水平的必然要求。

至2008年底，中國的城市化率已達到45.6%，中國的城市人口達到6.07億人。如果按照1%的速度增長，到「十二五」期末，中國的城市化率將超過50%，中國的城市人口將超過農村人口。

報告指出，除了城市人口比重的快速上升，中國的城鎮化進程還將向着國際化、群落化、生態化和現代化的方向發展。在「十二五」時期，城鎮化對於拉動中國發展還有更為重要的意義，在未來外需增長空間不大的情況下，中國經濟增長動力需要轉向內需。通過大力發展城鎮化，一方面可以進一步加強基礎設施建設，擴大國內投資需求；另一方面通過人群集聚，提高服務需求和消費傾向。

報告指出，從現實情況看，中國的城鎮化滯後於經濟發展階段的需要。改革開放之後，國民經濟的平穩發展有力推動了城市建設，愈來愈多的農村人口移居大城市和中小城鎮。城鎮人口佔總人口的比重從1976年的15.4%，上升到2008年的44.9%，年均增長1個百分點。

然而，受中國城鄉分割以及戶口制度的約束，這種城鎮化尚是一種「偽城鎮化」。大量的農村產業工人，雖然居住在城市並被計算為城市人口，但其並不能同等享受到城市的各類公共服務，其收入水平、消費模式無法等同於一般城市人員。

報告指出，目前中國的城鎮化更多地表現為一種「偽城鎮化」，為此未來政策上重要的是消除這種「偽城市化」，主動吸納適合到城市居住的農村人口；提升真實的城市化水平，需要將城市基本公共服務覆蓋到所有在城市居住工作的人口，尤其是農民工及其子女。

贛州稀土整合 五礦集團領先

被視為戰略物資的稀土，成為北京、東京、香港近日的熱話題。

從本月開始，國務院推展稀土產業的兼併重組，試點在南方五省（江西、廣東、福建、湖南、廣西），重點在江西省南部的贛州市各縣。

以解構的視角觀察全球稀土之戰，首先得分解稀土的產品結構和企業結構。

稀土是含有十幾種元素的礦物；內蒙白雲鄂博的稀土，則與鐵礦共生。稀土礦需經冶煉，分離元素後才能應用於製造業。稀土的產品有三大類：
一是稀土原材料（礦物）；
二是加工分離後的稀土；
三是以稀土為原料的製造品，包括低端的初級加工品、高端的產品如稀土永磁無鐵芯電機等。

稀土企業也有相應的三類。

中國的稀土資源，集中於華北內蒙包頭的白雲鄂博，其次是南方五省；南方的四川等省份，亦存有稀土礦。

在華北，包頭鋼鐵集團公司的包鋼稀土，集採礦、冶煉分離和產品製造於一家，它是華北的「稀土霸主」。在南方，五礦集團及其五礦有色金屬公司，是「稀土老大」；它的稀土經營範圍，是冶煉分離和製造產品。這兩家大型國企，有國企歷史淵源和企業經營優勢，形成稀土行業的「北包南五」格局。在國務院正推動的稀土產業兼併重組中，包鋼稀土和五礦集團處於領先地位。

所謂兼併重組，是要改變稀土開發的小、亂、污。大量的小型企業、亂開採和高排污的地方私企會被淘汰。在官方扶持政策和企業自身的優勢之下，大型國企壯大的機會較高。

五礦集團是副部級的大型央企，受國務院國資委管理的「重點企業」，初創於五十年代初，現為銅、鎢、錫、鉛、鋅、銻和稀土的綜合企業，有稀土冶煉分離和產品製造的擴張實力。

五礦集團在江西稀土產區早有基礎，收購了不少稀土企業。子公司五礦稀土（贛州）擁有的稀土資源多，稀土產品的營銷也擴大；今年收購重組的五礦東林照明（江西），大大提升了稀土節能燈管的生產能力。

五礦還入股湖南有色金屬集團，官方《新華財經》稱：「五礦的稀土勢力，借此走出江西擴張至湖南。」

五礦集團總裁周中樞日前在北京說：「稀土作為中國的優勢資源，是我們打造完整產業鏈的上佳選擇。」

國務院整合稀土產業，既有意遏止資源和環境的破壞，也想提升資源利用率和產品的檔次。包鋼稀土和五礦集團有礦物資源或產品製造的優勢，中國稀土等大型企業則有經營產品製造和出口的優勢；它們分別是上海、香港的上市公司，具有擴大企業規模和融資的優勢。它們也有開發高端產品的基礎，擁有比較強的技術實力，在產業整合中應有較大的發展。

內地稅改重點平衡收入差距

收入分配制度改革將是「十二五」規劃的焦點，會計界人士指出通過個人所得稅等稅制改革，平衡差距也已經在討論中。

2009年，中國個人所得稅收入為3944億元（人民幣．下同），佔全部稅收收入的6.25%，遠低於國際貨幣基金組織公布的22.18%的平均值（三十八個已發展及發展中國家）；其中工資薪金所得項目約佔稅收的五成。

降邊際稅率增個人收入

了解內地稅改的香港稅務學會前會長龔永德對本報記者表示，個人所得稅等稅收制度將是收入分配制度改革中的重要環節，他指出，應把勞務與非勞務收入合併計算應納稅所得額，合理增加工資薪金所得中的費用扣除項目，降低最高邊際稅率，以增加個人可支配收入，這將為刺激內需拉動個人消費起到積極的推動作用，同時加大對非工資薪金所得稅徵管的力度，促進公平。

中國實行的分項稅制，對股息等投資所得的稅率較低，對勞務所得稅率較高，令工薪階層感覺稅負偏重，財產再分配亦未達到預期效果【表】。

根據現行政策，股票轉讓所得、B股及H股股息免稅，A股股息最高邊際稅率為10%，勞務報酬所得為40%，工資、薪金所得最高邊際稅率更達45%。

他說，有關部門也意識到現行稅制的問題。今年初，人力資源和社會保障部稱，正配合財政部等研究提高個人所得稅起徵點。國家稅務總局亦於6月時曾表示要進一步加強對高收入者個人所得稅的徵管，以充分發揮稅收在收入分配中的調節作用。

收入問題引發內需不振

政府智囊機構國務院發展研究中心此前公布《「十二五」期間優化收入分配格局的思路與途徑》等報告，指出當前收入分配格局存在的突出問題：一是勞動者報酬在初次分配中佔比偏低；二是二次分配調節效果不明顯，政府支出佔比不斷增加，而居民消費特別是農村居民消費卻在下降；三是公共服務支出佔比偏低。

數據顯示，自1993年至2007年，勞動者報酬由49.49%降至39.74%，同期政府部門生產稅淨額增加3.13個百分點，企業部門的固定資產折舊和營業盈餘（即資本收益）增加6.62個百分點。

國務院研究發展中心宏觀經濟研究部部長余斌較早前指出，「十二五」期間調整收入分配可從初次分配、二次分配及政府支出結構三個環節入手。例如，減少企業營業盈餘和政府生產稅淨額，增加勞動者報酬和居民財產性收入；二次分配中擴展社會保障範圍，適當提高企業和政府負擔的水準，減少政府向國有企業的資本轉移，增加向居民的經常轉移；增加政府消費中的實物轉移，增加公共服務供給。

楊妮

The biggest hedge funds in the US…

Posted by Sam Jones on Sep 30 17:05. Comment | Share

Out from AR magazine just moments ago is their annual ranking of the biggest hedge fund managers in the US. Unsurprisingly, Bridgewater is still number one. Surprisingly, it has increased its lead by a significant margin.

The firm now manages a titanic $50.9bn according to AR. Its nearest rival is JP Morgan – the bank – which manages around $41.1bn in hedge funds connected to its Highbridge business.

The nearest independent contender is Paulson & Co, with an estimated $31bn AUM. This year has hardly been kind on the firm, though after its spectacular 2008 and 2009, few would doubt its deserved place at the top table. Though September is supposed to have been good for Paulson, as of August 31 the Paulson Advantage and Advantage Plus funds were down 7.54% and 11.16% respectively.

Bridgewater has meanwhile seen its flagship Pure Alpha II fund return 16.74 per cent since January. In market conditions such as these, Bridgewater is deserving of praise. (The sylvan Connecticut-based firm is as cultish publicity-shy as it is successful, but according to investors, Bridgewater was a major beneficiary from the eurozone crisis).

The only other surprise is the – relative – fall from grace of DE Shaw, which according to AR manages just $17.8bn as of July 1 (we understand the number has since increased). Little wonder the firm is slashing jobs.

Related links:
www.ft.com/hedgefunds
www.twitter.com/samgadjones

What price Tokyo’s (first round) of intervention?

Posted by Gwen Robinson on Oct 01 10:16. Comment | Share

The details of Tokyo’s first yen intervention in six years have emerged from the Japanese finance ministry.

As Bloomberg reports on Friday, Japan sold Y2,120bn in the month through to September 28 in a bid to weaken the yen after it rose to a 15-year high on September 15. This was in many circumstances more than expected:

“The number exceeded expectations somewhat and may add to speculation they intervened more than once,” said Takashi Kudo, general manager of market information service at NTT SmartTrade Inc., a unit of Nippon Telegraph & Telephone Corp. in Tokyo. “If the market gets the impression that they will continue to step in, that’s a positive for easing the yen’s gains. And exporters may not need to buy the yen in a hurry.”

To put it in context, that Y2,120bn ($25bn) worth of intervention far exceeded the previous single-day high of Y1,660bn that the BoJ put into yen-containment efforts on January 9 2004. In the eight months from January 2003, the government injected about Y13,300bn into the market in efforts to stop the yen breaking through Y115 to the dollar, according to finance ministry data.

Nomura’s Tokyo-based team led by currency strategist Yunosuke Ikeda estimates that this time, the finance ministry expects to spend a total of between Y10,000bn to Y20,000bn to try to curb yen strength. Tokyo’s current budgetary arrangement allows a maximum of Y34,700bn for FX intervention, according to end-June estimates, Ikeda adds.

At the same time, as the Bank of Japan heads into its regular policy meeting on Monday, and the yen stays stubbornly high, speculation is growing — as we noted on Thursday — that the central bank will take extra measures towards easing.

The BoJ’s problems are being compounded by extra pressure on the dollar-yen exchange rate, amid growing expectations in the US that the Fed will shortly take more steps to boost the economy. That follows the Fed’s September 21 announcementthat it is “prepared to provide additional accommodation if needed to support the economic recovery” – which has fuelled speculation of a fresh round of quantitative easing, as the Fed increases Treasury purchases.

So back in Tokyo, just to keep people on their toes, as Bloomberg adds:

Finance Minister Yoshihiko Noda [on Friday] reiterated the government’s resolve to take bold action on the yen if necessary. Vice Finance Minister Mitsuru Sakurai yesterday said he expects the Bank of Japan to make appropriate policy decisions at a monetary policy meeting next week, an indication the government wants the central bank to do its part in supporting growth.

Meanwhile, Julian Jessop of Capital Economics has some thoughts on the recent Japanese intervention, as he writes in a client note:

This month’s intervention by Japan to weaken the yen has contributed to fears of a “global currency war” or, viewed more positively, to hopes that large-scale unsterilised intervention by the major central banks will be another important way in which unconventional monetary policy will be used to boost nominal demand and asset prices. We are far from convinced.

For a start, if the aim of Japanese authorities was to cause a fundamental shift in sentiment towards the yen, they have clearly failed. The yen initially fell sharply after the official intervention on 15th September, but it has now retraced almost all of that decline. The upshot is that, rather than making intervention by others more likely, this failure has surely reduced the chances that central banks elsewhere will follow Japan’s example.

What’s more, there is very little evidence that Japan regards currency intervention as a tool of monetary policy… two key points: first, it is worth clarifying just whose intervention it was. The Bank sold yen for dollars… However, the Bank was simply acting as the agent for the Japanese government and specifically for the Ministry of Finance, which determines currency policy.

Second, too much has been made of the fact that the intervention was apparently unsterilised. The yen sold do seem to have been allowed to accumulate in commercial banks’ current accounts at the Bank of Japan (thus loosening monetary conditions), rather than been mopped up through operations such as bill sales. But this may not be as significant as it first appeared.

Anonymous “official sources” have suggested that the intervention has not been fully sterilised (yet?), but there has been no formal statement on this issue from the Bank. Current account balances held at the Bank have risen by ¥2-3 trillion since 15th September, the bulk of which may well represent unsterilised intervention. However, these balances usually rise anyway in late September as the end of the fiscal half year approaches. The Bank may simply have decided to leave the intervention funds in the market ahead of the fiscal half year-end as a convenient way of providing extra liquidity, but will then allow them to drain again in October as seasonal pressures unwind.

Even if left fully unsterilised, notes Jessop, the Y2,000bn or so spent would represent just 2 per cent or so of Japan’s monetary base, and less than 0.3 per cent of the broad monetary aggregate, M2. This figure, he notes, is:

…also dwarfed by other possible monetary policy changes – for example, if the Bank does ease policy further next week, the leading option would probably be an increase in the total amount of cheap loans under the special funds-supply operation from Y30,000 to Y50,000 – an increase potentially 10 times bigger than any boost from the intervention.

Overall, says Jessop, the markets “may have read far too much into the actions of the Japanese authorities”. He concludes:

“We certainly stick to our first thought that the intervention will not fundamentally alter the outlook for the yen. Moreover, the move is still best seen as a gesture to appease domestic criticism of PM Kan, rather than the first in a series of unsterilised interventions designed to complement other monetary tools. And if Japan’s actions were the opening salvos in a global currency war, they have proved to be a damp squib.”

Related links:
Japan intervention watch - FT Alphaville
Yen intervention: Did they or didn’t they? – FTAlphaville (Sept 24)
In-depth: Yen intervention – FT.com
What next for the yen: ‘A lot of fake movements’ – FT Alphaville

A psy-QE-logical problem

Posted by Tracy Alloway on Oct 01 15:14. 2 comments | Share

David Rosenberg thoughts on QE v2.0 are complex indeed.

Though he’s detailed at length why quantitative easing will flatten the yield curve —this time — he’s rather dubious of its actual effects on the US economy, at least in terms of mortgages.

In his Friday ‘Breakfast’ missive, the Gluskin Sheff analyst says:

New home sales are at their second lowest level on record despite record low 4% long-term mortgage rates. So if QE2 brings rates down to 3%, who cares? And with 11 million U.S. households upside down on their mortgages, refinancings have failed to boom and add cash flow to pocketbooks as was the case in 2003-04.

At the 2006 bubble peaks, households were engaging in mortgage equity cashouts to the tune of over $80 billion per quarter. That provided the thrust for the spending binge even as the jobs cycle lagged behind, similar to what we had seen in the past as the economy continued to adjust the vagaries of the post-dotcom bubble bust. Today, cash-out refinancing activity is running at one-tenth that good ol’ pace of five years ago. Indeed, attitudes towards “being in debt” have shifted so radically that nearly 1 in 4 households are now “cashing in” and paying down their mortgage debt. Nearly 1 in 3 upon refinancing are doing the most un-American thing of all; choosing to accelerate their paydown by reducing their amortization terms! This means maintaining or increasing the same monthly payments in a lower rate environment, which in turn helps explain why spending intentions on other things are going down. What can Dr. Bernanke do when the shift in attitudes is so profoundly psychological?

Right now debt is, quite simply, distasteful?

It’s certainly one way — together with tighter bank lending — to explain the breakdown in some of the historical associations between rates, refinancing and home sales in the below charts.

They — along with the extra commentary — come from RBC Capital Markets’ US economics team, led by Tom Porcelli.

Exhibit 1: We have been saying QE2 will have little impact on the economy aside from perhaps more refi activity. But an increase in refis and the commensurate savings would be a drop in the bucket. If the level of refi originations matched the all-time highs seen back in 2003 and mortgage rates fell another 50bps we would see an injection of $5bn to consumer pocketbooks in one year – or 0.05% of nominal PCE. Miniscule.

Exhibit 2: Furthermore, getting back to the record level of refi’s seems highly unlikely. Keep in mind that we’ve already seen rates fall 200bp from nearby highs (which is 2/3 the decline seen during the boom). The response to this decline in rates this time around has been muted thanks to, among other things, incredibly tight lending standards.

Exhibit 3: Low rates have done nothing to stimulate home sales and the relationship between mortgage rates and sales, since the bubble peaked in mid-2006 has decidedly broken down…

Exhibit 4: …those that say lower mortgage rates will motivate buyers clearly have not done their homework.

Over to you, Bernanke.

Related links:
Historic lows in mortgage rates fail to motivate buyers, owners – USA Today
Get ready, get set, deleverage! With one notable (US) exception - FT Alphaville
Quixotic QEasing - FT Alphaville

Unintended consequences of a prop desk’s extinction

FT Alphaville attended an introductory course to securities lending and shorting the other day.

And amongst the interesting snippets divulged — especially in light of Michael Lewis’ recent article on the mysterious disappearance of prop traders — was a chart, from the International Securities Lending Association (which we’ve since been told we can’t show you).

It showed how capital/leverage employed by prop desks had falled from about $4,000bn in 2008 to, $400bn in 2009 and about $500bn in 2010. The equivalent fall for hedge funds was from $5,000bn in 2008 to $2,800bn in 2009 and $3,600bn in 2010.

From a securities lending point of view this is important, because it potentially accounts for the sharp decline in securities lending business over the same period, as the following chart from FinTuition demonstrates:

But here’s the thing.

Even the securities lending business is not really hedging its bets for the return of prop trading operations anytime soon.

Just as Michael Lewis notes in his article, not only are banks seemingly giving up on proprietary trading desks, they may have been making such moves way before regulators even hinted they might have to.

But that’s not to say they’re giving up on the prospect for prop-style returns.

Indeed, as Lewis notes, those efforts are seemingly being redirected towards so-called‘client-facing businesses‘:

After all, you don’t need a proprietary trading desk to engage in the two activities that any proprietary trading ban would seek to prevent: 1) running huge trading risks, and 2) taking the other side of the customers’ stupid trades. Goldman Sachs’ infamous Abacus program — the one that talked American International Group into selling vast amounts of cheap insurance to offset subprime mortgage risk, and then shorted the instruments they themselves had created — wasn’t dreamed up by the prop trading desk. It was the brainchild of what customers knew as the “Client Facing Group.”

—–

The answer may be none of the above or some mixture of the three. But what’s really striking is how little ability the outside world retains to find out what is going on inside these places — even after we have learned that what we don’t know about them can kill us. It would be nice to know, for instance, if the big banks are making these moves with the tacit understanding that the regulators, going forward, won’t be looking too closely at the activities of the “Client Facing Group.”

With that in mind, it’s interesting to note which trends are actually emerging in securities lending.

One, for example, is the preference towards of ETF stock borrowing in lieu of traditional single stocks. From one of the course’s power point slides:

Many prime brokers report a “lack of conviction” among their clients

Brokers also report that ETFs currently make up an unusually high percentage of short demand (substituting for stock)

Another is the preference towards non-cash collateralised positions:

Lehman default added to deteriorating liquidity conditions in money markets

Many cash collateral re-investment vehicles were required to impose redemption restrictions as a result

Clients moved away from cash collateral to focus on non-cash / ‘intrinsic value’ trading

These are interesting developments if you consider that instead of borrowing stocks for cash collateral, short-sellers are increasingly borrowing ETFs for non-cash collateral — which, depending on your counterparty can include everything from bonds, corporate bonds to equities.

This is a pretty important capability if you happen to be an ETF authorised participant, or for that matter a client-facing market maker in index funds generally — since you’re constantly dealing and managing stock inventory.

It’s also good business for custodians.

Which brings us to the latest piece by Paul Amery of Index Universe — a very insightful account into the power that lies behind the back-office plumbing in an ETF structure generally and the role of the custodian.

He notes, for example, that “fund custodians and administrators are no longer in the back seat”.

Furthermore, he suggests, it’s actually becoming the type of business former prop traders are keenly looking into:

For example, Paul Stillabower, head of business development for HSBC’s London securities operation, talked about how his desk is currently overflowing with CVs from former proprietary traders – a comment that rather neatly answers Michael Lewis’s latest Bloomberg piece (“The Mystery of Disappearing Prop Traders”).

Stillabower noted, tongue in cheek, that he might even employ some of them, though they’d need to be “re-educated” in fund accounting. But, whatever you might think of prop traders, they’re usually a fairly bright bunch, and their current interest in back and middle office roles tells you a lot, not just about where the regulatory wind is blowing, but also about the complexities involved in administering and running funds, which now requires a real variety of skills.

Which definitely makes sense. Put it like this. If collateralisation and over-collateralisation are key (and possibly permanent) side-effects of the crisis, it makes sense that the new ‘hot’ banking areas of tomorrow be the businesses that work with collateral, inventory and custody. And especially those that can sweat those assets best.

As Amery sums up, citing market sources:

Other speakers yesterday, such as Roger Fishwick, former fund manager and now a consultant at Thomas Murray, a global custody ratings and research firm, and Phil Brown, head of client relations at Clearstream,mentioned the increasing trend towards collateralisation.

“In five years’ time, everything will be collateralised,” said Fishwick. This rings true for those of us following the ETF market, as we’ve already seen issuers starting to overcollateralise swap exposure in their funds (i.e., they’re competing to do better than the 90% minimum required under UCITS), as well as the collateralisation of products that previously operated with raw credit exposure to the issuer (many ETCs, for example).

No surprise then that there’s been such a run on collateral, eh?

Related links:
Overcoming the Volcker rule, with ETFs - FT Alphaville
Did Socgen use ETFs to liquidate Kerviel positions? – FT Alphaville
Prime custody, and the business of collateral – FT Alphaville
All eyes on broker-dealer internalisation - FT Alphaville