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Economic Growth is expected to decrease from 8% to 7%.

 

According to the International Business Writer, the financial crisis in the United states is damaging markets around the world, from Brazil to South Korea. Lehman Brothers  Holding Inc. Bankruptcy and the fall of American International Group Inc has brought the decrease in stocks around the world.   

Report states that, In Russia prices of shares fell to the lowest level in three years. Russia suspended trading in the day which has not been done since the financial crisis in 1998. 

The Shanghai, Hong kong and Tokyo markets also saw  trouble after closing Monday for holiday and upon returning saw   stocks drop after the massive blows to financial market. 

In a number of developing countries , banks stepped in to help provide liquidity for their banking system. Countries like Indonesia for example lowered the rate at which commercial banks borrowed from the central bank. Taiwan cut capitol- reserve ratios held by commercial banks in hopes of alleviating mounting problems. 

Investors of emerging markets around the world, are taking less risky moves to help sell assets to pay for losses elsewhere. The report points out that , Devan Kaloo of Aberdeen Asset Manager in London, the company who oversees 10 Billion dollars in emerging stocks says, “when times get particularly hairy, foreign money generally goes back to base. Everything is being sold. In the end, it’s a sea of red.”

As commodity prices fall emerging markets are taking a number of loses. 

With continuing concerns of a global market slow down Arjun Divecha of GMO LLc ” the logic explanation for why these markets have fallen so much is that there is a real growth scare.”

China cut interest rates due to growing worries of the stability of the wide markets with goals of boosting the economy. This is the first time in six years the Chines government has cut interest rates. Some investors believe that the market values of some emerging market stocks are good values. Although most believe it is a time of careful analysis and caution because high risky stocks do not expect to do very well. 

In London shares in HBSOS a United Kingdom mortgage lender fell 22% while Barclays fell 2.5% after Lehman Brothers report of bankruptcy. Lehman brothers was planing  on selling some of it s assets to Barclays bank in which some reports say an agreement was made.

Markets worldwide are taking a hit after a weakening trust in US banks following the bankruptcy of Lehman Brothers. 

A look at China:-

On the other note ,China who is one of the US top lenders still moving forward with the business innovation power.

International business writers at Seton Hall University, States that : “It is a tough call on what should be thought about China. With so much instability having been seen and the ever present question of their still communist government to deal with, one never knows what can happen in Chinese economy.” 

As of Sept 17 2008, the Chinese government has stepped in again to change the face of telecommunications industry in China. Before, the industry was set stone with China Mobile controlling the mobile market and China Telecoms controlling the fixed-line services. Each had its own competitors would combine forces creating three major players in the industry. 

As part of the deal, China Unicom will sell a substantial portion of its cell phone services to China Telecom to help Create Competition against the giant, China Mobile. Then the mobile and fixed- line capacities of China Unicom and China Netcom would merge to Create China Unicom ( Hong kong) Limited,” Leading fully integrated telecommunications service provider( Hong Kong Business Wire). 

The new company will serve as competition against the two giants China Telecom. How ever China still hovers above the rest. With talks of pending 3 G network going through China Mobile will just become stronger.

Source:

Economics news letter and International Business- Seton Hall University

 

Belliah K Theise

COO and Managing Editor – Zambian Chronicle 

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