Top 3 Business and Finance Stories

1. China’s Price Raises May Cool With Factory Slowdown, Export Earnings Program

China’s inflation may cool off after a production growth slowed in December because of tighter monetary policy and the closure of energy waste and polluting factories. A Purchasing Managers’ Index fell to 53.9 from 55.2 in November, the federation of logistics in China and the Statistics Office said on January 1. Entry of manufacturers increased at a slower pace, the report shows. Premier Wen Jiabao wants to limit bank lending and capital inflows, which could fuel inflation, after a record expansion of credit has led the country’s recovery.

The central bank raised rates on Boxing Day and six days later, the currency regulator said it was expanding a program to allow exporters to retain profits abroad. “A slower pace, but still robust expansion in the manufacturing sector is welcome, because overheating is a risk makers want to avoid,” said Shen Jianguang, an economist based in Hong Kong at Mizuho Securities Asia Ltd., who worked for the European Central Bank and International Monetary Fund.”Another rate hike could come as soon as this month.”

2. Singapore’s Economic Growth Rebounded Last Quarter on Manufacturing Surge

Singapore´s growth rebounded last quarter as manufacturing surged, capping the biggest annual increase in output since independence in 1965 and putting the economy on course to be the world´s second-fastest growing. Gross domestic product rose an annualized 6.9 percent in the three months through Dec. 31 from the previous quarter, when it contracted a revised 18.9 percent, the trade ministry said in a statement today. The median forecast of eight economists surveyed by Bloomberg News was for a 9.4 percent expansion.

Singapore´s growth has fueled inflation, prompting policy makers to allow faster currency gains and take steps to cool the property market. The island is among the first in the region to report fourth-quarter data, and its expansion may herald a year in which Asia will sustain an outperformance over developed markets hampered by Europe´s sovereign credit woes and U.S. unemployment that remains above 9 percent. “If Asia continues to lead growth, and the likelihood is that it will, then it would mean we would see stronger currencies around the region,” Song Seng-Wun, an economist at CIMB Research Pte. in Singapore, said before the report. “If inflation continues to build up, the monetary policy bias for most central banks including Singapore´s is to tighten further.”

3. Hong Kong Posts Record Share Trading on China Concerns, Biggest IPO Year

A record number of shares traded on the Hong Kong stock exchange in 2010 after the city completed its biggest year for initial public offerings, and as concern about China´s anti-inflation policies prompted an increase in short-term trading. The total volume of exchange-traded securities surged to an all-time high of 34.99 trillion shares in 2010, according to data from the stock exchange. Average daily trading volume reached a record 140.53 billion shares. That surpassed previous highs set in 2008, with total volume of 27.1 trillion shares, and average daily volume of 110.63 billion. “We´ve had big IPOs that draw money to this region and generate sizable fund flows,” said Steven Leung, director of institutional sales at UOB-Kay Hian Ltd. “The year´s characteristic is that short-term trading dominated.

The index was not much. Policy-related actions took a huge short-term volatility. “The benchmark Hang Seng index rose 5.3 percent last year, after a rally of 52 percent in 2009, speculation about the growth of corporate profits goes against China’s measures to curb inflation prices in the property, the debt crisis in Europe and concerns about the pace of U.S. economic recovery. The Chinese government has intensified its fight against inflation increase in reserve ratio requirements of banks six times, tightening lending standards and increased interest rates twice.