News & Current Affairs

September 17, 2008

Investors edgy as US stocks fall

Investors edgy as US stocks fall

A trader reacts to news in the Philippines

Investors are concerned that financial markets will remain volatile.

US stock markets sank in early trade on fears the bailout of insurance giant AIG would not be enough to dispel the gloom engulfing the financial world.

AIG’s rescue and a potential takeover of UK lender HBOS had earlier boosted confidence in Asia and Europe.

But markets were volatile as nervous investors tried to make sense of the dramatic events that have unfolded in recent days.

The widely watched Dow Jones industrial average was down 1.9% at 10,849.

Top UK mortgage lender HBOS, which has faced heavy selling this week, fell as much as 50% before recovering after it emerged that it was in advanced talks to be taken over by Lloyds TSB.

HBOS shares were down 13% at 160 pence in London, the biggest faller in the FTSE 100, after being the top gainer at one point.

It has been a tumultuous week on financial markets, with significant changes in the financial landscape.

Key events on Wednesday included:

  • Beleaguered HBOS in merger talks with Lloyds TSB after a steep fall in its share price
  • US insurance giant AIG being bailed out by the US government
  • Volatile stock markets as global investors remain nervous
  • Trading on the Russian stock exchange being suspended
  • Barclays snapping up key assets from Lehman Brothers after its bankruptcy

I don’t think anyone has got any or much confidence in market direction for more than a few days
Darren Winder, Cazenove

The FTSE 100 index of top UK shares was down 0.48% at 5,001.4, reversing earlier gains, with some banking shares hard hit.

Shares in Barclays were up 9.8%, Lloyds TSB climbed 7.9% while Royal Bank of Scotland was down 2.6%.

Topsy-turvy trade

Trade is likely to remain rocky amid concern that financial system instability will continue after the dramatic events of the past few days.

“I don’t think anyone has got any or much confidence in market direction for more than a few days,” said Darren Winder, a strategist at Cazenove.

AIG’s bail-out follows the collapse of US investment bank Lehman Brothers, which caused share prices to plummet across the world’s financial markets.

Another investment bank, Merrill Lynch, has been sold off to Bank of America.

France’s Cac 40 share index was down 0.24%, while Germany’s Dax index was 0.64% lower, reversing earlier gains as Wall Street opened.

Russia’s stock exchange suspended trade following steep falls in shares.

Asian shares had a mixed session. Stocks in Tokyo, Taipei, and Seoul all rose, although prices in Hong Kong, Shanghai and Australia lost ground.

Japan’s Nikkei 225 index ended up 1.2% at 11,749.79, having risen by as much as 2.3% earlier in the day. The index had hit a three-year low on Tuesday.

Hong Kong’s Hang Seng index ended down 3.6% at 17,637.19 points.

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September 9, 2008

N Korea to mark 60th anniversary

N Korea to mark 60th anniversary

A Korean Central News Agency photo showing high-ranking North Korean officials and foreign guests at a meeting on the eve of the anniversary

A special meeting was held on the eve of the anniversary

North Korea is planning to celebrate its 60th anniversary with a military parade in the capital, Pyongyang.

Reports say the parade will be the largest the North has ever staged, with lots of military hardware on display.

Reclusive leader Kim Jong-il is expected to attend, and the parade will be watched closely because of speculation about his health.

The anniversary comes amid an impasse in international efforts to urge North Korea to abandon its nuclear program.

Health concerns

On Monday, North Korea’s state-run television channel KRT showed footage of the North’s cabinet holding a large indoor gathering to mark the anniversary.

The cabinet released a statement, picked up by monitors in Seoul, saying that North Korea had a powerful army that would “mercilessly punish invaders”.

According to South Korean media, the main parade on Tuesday will be the largest ever staged by its northern neighbor.

“The North probably wants to boost the image of its military might in order to cement unity within the country and secure a better position in the denuclearize negotiations,” a South Korean government source told JoongAng Ilbo newspaper.

North Korean leader Kim Jong-il with soldiers, August 2006

North Korean leader Kim Jong-il is notoriously reclusive

Military experts usually watch these parades to see if North Korea will unveil any new weapons systems.

But this time foreign observers will be particularly keen to note whether North Korean leader Kim Jong-il makes an appearance.

The future direction of North Korea is tightly linked to the personality of the country’s reclusive leader.

Mr Kim has not been seen in public since early last month, giving rise to speculation he could be seriously unwell.

He has been known to disappear from public view for extended periods before, and has always returned eventually, but this time the rumours of ill health have been given added impetus by news that a team of Chinese doctors was recently summoned to examine him.

Food shortages

The celebrations are taking place amid rising tensions between Pyongyang and the international community.

North Korea agreed in February 2007 to give up its nuclear ambitions in return for aid and diplomatic concessions, but the progress of the deal has been far from smooth.

After a long delay, Pyongyang handed over details of its nuclear facilities in June 2008.

In return, it expected the US to remove it from the list of state sponsors of terrorism, which the US has yet to do, so the North now appears to be starting to reassemble its main nuclear plant.

Meanwhile the World Food Program estimates that North Korea is suffering from a serious food shortage.

The North has relied on foreign assistance to help feed its 23 million people since its state-controlled economy collapsed in the mid-1990s.


Are you marking this anniversary? Are you in Pyongyang? What is happening in your area? Tell us your experience

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