Month: December 2011

Asia’s High End Art Market

Hong Kong has been instrumental in boosting Asia’s art market over the last few years, especially with its 300 percent increase between 2009-10.  This is thanks to the wealthy Chinese who have been enthusiastically purchasing art, resulting in Hong Kong becoming a global art sales center.  It seems like art and other alternative investment options – such as wine – have in general been on the rise irrespective of global financial misfortunes such as the collapse of Lehman Brothers three years ago.

Asia’s Rich Getting Richer

It seems that the wealthy individuals in the Asia region are just increasing their financial worth.   For example, the region is even beating Europe, standing at $10.7tr., whereas Europe is only up to $10.2tr.  Art investment definitely has a lot going for it, being a little different, enjoyable and having pretty good returns. As well what is also good news for Asia is that vis-à-vis the art market, it has not been impacted by the Euro Zone debt crisis.  Indeed, the Mei Moses Global Art Index found almost a 12 percent increase in 2011 to November.

One art consultant, Bobby Mohseni, noted, “it may not be a good time for sellers but it's an excellent time for buyers. During late 2008 and 2009, I highly advised clients to buy. With Chinese contemporary art, some prices have gone exceptionally high and that's just over a decade … so it's best to look at upcoming or mid-tier artists.”

In addition, confidence in China’s contemporary art market remains quite high, even though the same confidence is lacking in the European and American counter markets.  In other words, Asia does not have to feel the negative impact of what is going on in the western world – as has been seen through its art market.

Japan Enters Europe

Panasonic Plans to Globalize Phones

Panasonic is planning on entering the European market with its smartphone in March 2012.  As well, over the next four years, the company hopes to ensure 15 million units are ready for overseas sales, with Europe being the start of its entry into the world market.

Panasonic has made this decision on reflection of how the cellphone market is increasingly moving toward smartphone use globally.  In this frame, it seems that expectations for growth overseas are quite substantial.  Panasonic is not intending to miss out.  In addition, the company has created a new smartphone business model and in the future will be expanding its offerings.  The company hopes that its sales hit 1.5m in Europe in the next fiscal year and over the next four years for 15 million units to reach Europe, Asia and America.

In light of this goal, a few months ago, Panasonic established the Systems & Communications Company (SNC). Via this branch, the electronics firm will be able to fully expand its internal resources, such as the factory it has in Malaysia. At the moment, this is where the phones are made for the Japanese market, which will now be the primary manufacturer for Panasonic’s first global model.

Asia Playing Big Brother on Euro-Finance Meetings

Europe:  Asia Is Watching You

Over the last week there have been a variety of important meetings in Europe over which Asia has been keeping its proverbial Big Brother eye on.  Indeed, it may even be somewhat more than just overseeing the progress of the meetings.  According to UBS Asia Pacific’s chief investment strategist, Yonghao Pu, “at the moment, we [Asia] are kind of a hostage to what’s going on in Europe.”  Due to activities in the global economy, China’s hand is being forced in a way it’s not especially fond of.

Beijing’s Banking

Beijing has had to make some changes.  It already removed some of its demands for rural banks and is now doing the same with its major banks, in an effort to facilitate banks giving out loans while offsetting the global economy’s ripple effects.   

Beijing has also been quite firm in its insistence that it will not be fishing the Eurozone out of its hole either.  As well, due to less demand, there is decreased manufacturing  in China.  Since Europe is the biggest export market of China, if the region goes into trouble economically, this will negatively impact all Asian exports. Indeed, according to China’s vice minister for foreign affairs, Fu Ying, “the argument that China should rescue Europe does not stand, as reserves are not managed that way.” 

The good news for Asia is however,  that the region is doing better financially than Europe. Still, it needs to be aware of the fact that when the Eurozone cracks, it could encounter problems too.  Keep watching out for Euro meetings to get an idea of what Asia’s next financial step should be.

Asia Impacting US Stocks

Again, America needs to count on Asia.  American stock prices at the end of last week encountered mega-instability once global markets were concerned that financial worries in the east may end up in the west, in particular Europe and America.

No country stands alone.  It’s not just Asia and America/Europe.  Right now, concerns have spread to Argentina and Brazil over potential Venezuelan currency devaluation.  This could result in a huge crisis for the entire Latin American region.

But still it’s Asia that has the power to result in worldwide economic problems.  Due to what’s been going on in the financial sphere in the eastern part of the region, huge instability could engulf US and European countries and even result in an abandonment of capitalism.

Further, if American lawmakers are unable to agree on necessary budgetary cuts, the country could end up encountering another credit downgrade.  While there is fear of limited growth in Asia, there is the possibility that mining and energy companies could go into decline.  One trader from London Capital Spreads said that it is likely markets will open lower due to Europe and America’s sovereign-debt concerns…