Asian Financial Hubs Haven For World Business

Singapore's financial district

Will top Asian cities emerge from the effects of economic crisis and position as the new global financial centers?  Does Asian economy better than its European and American counterparts?

The Global Financial Centers Index (GFCI) has recently assessed the rising competitiveness of top Asian financial centers that includes Singapore, Hongkong and Shanghai.  The GFCI is an annual competitiveness ranking of the world’s primary financial hubs based on the global financial environments.  According to the index, these cities are raising prominence in the world’s financial centers after New York and London.  These two cities still remain the leading global financial centers.

Hongkong, Singapore and Tokyo hold the third to the fifth spots according to the report. Shanghai gain ground by settling at sixth place.  The report affirmed the influence of these Asian cities in the world’s financial environment.   The cities of Chicago, Zurich, Geneva and Sydney completed the top 10 financial centers in the world.  Major Chinese cities of Beijing, Shenzen and Shanghai are regarded as most reputable financial centers in the list.

The index report was conducted online based on 7,270 assessments by the Centre for the Study of Financial Innovation from January and June this year.  The study dwelled on the following factors: business environment, people, quality and availability of IT and transportation, and market access.

The GFCI also reported that offshore centers, known as tax havens, have declined in the rankings as it drives for greater transparency.   The Isle of Man declined by eight notches to rank 32; the Cayman Island dropped to 34^th spot and the Bahamas to number 64.   According to one financial analyst in New York, the Caymans and the Bahamas which are doing good business at present still have their bad reputation as financial hubs in the world.

With this current trend in the financial environment and the strong economy shown by most Asian countries, New York and London might be dislodged in the future surveys as top financial hubs in world.

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Financial Week in Review: Nov. 9-13, 2009

Monday

Kraft (KFT) officially went hostile. The food conglomerate put out a hostile bid of $16.3 billion for Cadbury (CBY) on Monday. Cadbury rejected the offer as “derisory,” however. The company said the new proposal is “of less value and lower than the current Cadbury share price.”

Plummeting Dollar Dept.: The value of the U.S. dollar fell to a 15-month low, propelling the Dow Jones Industrial Average to a new 2009 high of 10227. The average rose 204 points. And following in its footsteps, crude oil hit $80 a barrel and gold rose to an all-time high, above $1100 an ounce.

Tuesday

AIG (AIG), making progress in its plan to restructure, will likely be able to repay its government aid, according to Moody’s. AIG recently posted a quarterly profit for the second time in a row; however, its business is still weak. The results do show stabilization, though, according to Moody’s, making it likely that taxpayers will see their investment in the company returned.

Meanwhile, two Bear Stearns hedge fund managers were acquitted by a jury Tuesday. The two senior executives, Ralph Cioffi and Matthew Tannin, were charged with lying to investors during the subprime mortgage crisis. The alleged fraud, according to prosecutors, cost investors roughly $1.6 billion and almost destroyed the investment bank itself, before JPMorgan Chase (JPM) bought it.

Wednesday

The Wall Street Journal reported that AIG CEO Robert Benmosche was considering leaving the company, just three months after taking the position, frustrated by the pay regulations being imposed on the insurer (as well as several other government aid-receiving institutions). Benmosche later in the day wrote a memo to his employees, reassuring them he is “committed” to the company.

Meanwhile, Hewlett-Packard (HPQ) said it plans to buy 3Com, a computer networking company, Wednesday. In a $2.7 billion deal that’s been approved by both companies’ boards, HP will pay $7.90 a share.

And the Dow hit another recent high Wednesday afternoon, rising 44 points to close at 10291, the highest level it’s been at in 13 months.

Thursday

Intel (INTC) and Advanced Micro Devices (AMD) hugged it out Thursday, ending their antitrust and patent disputes in a settlement from Intel. Intel will pay $1.25 billion to AMD, and AMD agreed to drop all outstanding litigation against Intel. However, this didn’t prevent New York Attorney General Andrew Cuomo from dropping his antitrust suit against Intel. He said his suit is on behalf of New Yorkers who he said have been hurt because of Intel’s alleged monopolistic abuses.

Credit Troubles Dept.: The Federal Housing Administration said its capital reserves have tanked, falling below the 2% requirement mandated by Congress to just 0.53%. Heavy loan losses have hurt the agency, but it said “under most economic scenarios” it would be able to maintain reserves “above zero.” Many worry that the administration could be next in line to receive a government bailout.

Friday

Friday began with a disappointing report on consumer sentiment from teh University of Michigan. The index fell to 66.0, its weakest level in over three months, amid pessimism for job opportunities. The reading was well below the 71.0 economists were expecting.

Two former employees of Bernie Madoff were arrested Friday on charges of falsifying records. Computer programmers Jerome O’Hara and George Perez allegedly created programs and altered account records in order to hide Madoff’s scheme. They both face a maximum of 30 years in prison and fines of over $5 million, if found guilty.

Copyright 2009 by FoxBusiness.com