International Wrap: News in Brief

International Wrap: News in Brief

International Wrap: News in Brief Political crisis in Ukraine a threat to the global economy: IMF
The director of the IMF has warned that the political crisis in the Ukraine could lead to problems in the broader world economy.
In a speech in Washington, Christine Langarde said global growth five years after the recession remains “too slow and weak”, The Telegraph reported.
The low inflation rates in Europe and Japan are a worry because of the impact on demand and output, and consequently jobs, she said.
It was recommended that the European Central Bank consider lowering interest rates even further and using unconventional policies to support growth.
High corporate leverage in emerging economies is another threat, which if not addressed will be worsened by the turmoil from eventual monetary tightening in advanced economies. Last week the IMF announced a $14 billion to $18 billion scheme to rescue Ukraine's economy after the overthrow of President Viktor Yanukovich.
Meanwhile, the IMF's latest predications state that Canada's economy will expand this year slightly more than it expected.
It predicts that the economy will expand one-tenth of a point more than it did three months ago - to 2.3 per cent this year and 2.4 per cent in 2015.
"Downside risks to the outlook still dominate, including from weaker-than-expected exports resulting from competitive challenges, lower commodity prices and a more abrupt unwinding of domestic imbalances," it warns. 

MANU's league may be down, but its stock is up
The once-golden Manchester United has had a terrible season, currently sitting in seventh place on the English Premier League; however Manchester United Stock (MANU) is on a total tear.
Surprisingly, shares in the stock are up 6 per cent, showing that what happens on the pitch doesn’t necessarily affect the business itself, reported Bloomsberg Business Week.
Potentially this could be because much of the broadcasting money is split league-wide and sponsorship deals can run for years: The team has already signed a seven-year almost $560-million deal to use the Chevrolet brand on the jerseys.
Executive Vice Chairman Edward Woodward told Bloomsberg that the key to the great performance was the build-up of the brand base.
“It takes a long, long time to build up a huge fan base, to have, if you like, the equity values of what we are as a business and as a club projected out there so that people can understand from a commercial perspective why it makes sense to partner with us. And I don’t think that that will go away for a long time,” he said.

ASEAN agrees to Myanmar's financial inclusion proposal
ASEAN finance ministers have agreed to Myanmar's proposal to improve a "financial inclusion" system, which would help citizens gain access to financial services, state media reported Sunday.
During the 18th ASEAN Finance Ministers Meeting, which concluded in Nay Pyi Taw on Saturday, Myanmar's Finance Minister U Win Shein said the proposal would be discussed further with the IMF. U Win Shein described the Myanmar people as "very weak" in the use of financial services.
Naoyuki Shinohara, managing director of the IMF, said it is working with authorities to overcome these challenges, as well as monitoring programs and providing policy advice in the areas of flexible liberalization of foreign exchange market, central bank cooperation and economic statistics.
Myanmar - which opened up its economy just three years ago - has seen economic growth of about 7.8 per cent, which is expected to continue next year, said Shinohara, adding that the country is primed for manufacturer-based investment, due to its huge base of natural resources.

Internet finance making its mark in China, say analysts
Chinese banks are reacting to the rising popularity of Internet finance, as the industry catches up with the global trend, say Hong Kong analysts.
At least 11 banks posted annual results at the end of March, showing net-profit growth of an average of 13.9 per cent in 2013 - three percentage points less than 2012, attributed to the growth of Internet finance. 
"Because of rising funding costs, the banking sector saw slower profit growth this year. Margins are narrowing," Grace Wu, Hong Kong-based analyst of Daiwa Securities Group Inc. told Chinese media website, ecns.cn. "The pressure isn't severe. Chinese banks still enjoy a loan price advantage. We maintain a stable outlook on sector margins this year."
Yu'ebao, a money market fund distributed online by Alibaba Group Holding Ltd. - paved the way for Internet finance in June 2013, generating investor interest by offering flexible redemption and above-deposit returns. Other Internet companies including Tencent Inc, Baidu Inc and Sina Corp. followed suite and by the end of February 2014, the money market fund in China had grown to 1.4 trillion yuan (US$226.81 billion), 2.5 times larger than it was a year ago.


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International Wrap: News in Brief