News summaries

In the 1970s, high performance computing was a major trend but in recent years, it’s fallen into the shadows created by the personal computer and the world wide web. Indeed, for a while it seemed that HPC’s destiny was to provide the basis for the Deep Thought computer in Douglas Adams’ satire, The Hitchhiker’s Guide to the Galaxy (HG2G), which was designed to provide the answer to life, the universe and everything (which we now know to be 42, of course!).

In reality, HPC never went away and technology has been improving because of Fujitsu (and others) innovating and investing (indeed, IBM named one of their Chess-playing computers Deep Thought, in reference to the HG2G computer).

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Indonesia has recovered the investment grade status for its sovereign debt at Fitch Ratings after 14 years, putting the country on the same level as India.

The agency said in a statement on Thursday that Indonesia had resilient economic growth, low government debt and prudent policy.

The country lost the investment grade rating in December 1997 during the Asian financial crisis.

The upgrade is expected to encourage more investment into the economy.

Analysts have long expected Indonesia's rating to be raised to investment grade.

It brings down borrowing costs and makes the country more attractive to investors at a time when major economies are being downgraded.

"Indonesia, in terms of sovereign risk, is better than several Western European countries," said Jerome Booth from Ashmore Investment Management in London.

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As 2011 closes with uncertainty in Europe, the Americas and Asia, it’s easy to be pessimistic. But amid this global gloom, large pockets of opportunity exist. Global trading is not only increasing in volume, but it is also expanding over a steadily increasing number of growing economies. Maturing local markets throughout the world are providing new sources of capital for issuers and creating promising opportunities for global traders.

More investors are dispersing the capital they manage into local markets, rather than just ommitting it to the established money centers. Previously, only the very largest market participants had the capital resources needed to take advantage of these opportunities. The cost of installing and maintaining trading infrastructure was very high, varying regulation and technical requirements created a steep learning curve and retaining qualified support staff in multiple markets was a formidable challenge.

Recent advances, notably NYSE Technologies’ Global Liquidity Centers, have arguably leveled the playing field. With simpler, more affordable ways to trade in proximity to growing local markets, a far larger community of global traders is now empowered to seek new growth opportunities.

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China’s house prices have risen at an unprecedented pace since 2009, most remarkably in cities such as Beijing (+77 per cent between January 2009 and August 2011), Shanghai (+129 per cent) and Shenzhen (+154 per cent). The market now seems to be at a turning point. In major cities, the number of housing transactions has dropped by about 50 per cent from the peak level and has remained low throughout 2011.

House prices have started to decline and inventory-to-sale ratios have more than doubled. In October, the weakening in the housing market seemed to have spread to smaller cities. This is triggering talks of a market collapse. So will house prices crash?

We do not think so. Just as we refute the claim of some economists that the house market boom in 2009-10 was “the biggest bubble in history”, we do not think the ongoing market corrections will evolve into a nationwide market collapse either.

According to a joint study conducted by China’s National Bureau of Statistics (NBS) and Nielsen, China’s consumer confidence in Q1 2010 has reached levels not seen since 2007 . I am often skeptical of the figures reported by NBS, however this does fit with the trend of growth in China fueled by government spending and domestic consumption. Within the Chinese consumer market, I would like to focus on one group in particular, the luxury consumer market.

China is currently the fastest growing and second largest luxury goods market in the world, second only to Japan. It is expected to reach the number one spot by as early as 2015. In 2009 Chinese consumers purchased 27.5% of the world’s luxury goods at a total of 9.4 billion USD, in comparison to 2004 when their total was only 2 billion USD. The rate at which China’s luxury market has grown is tremendous, and China is now home to both the world’s second largest diamond market and the number one automobile market.