The Futures: 2007

Tuesday, August 7, 2007

Free Forex Education - Mastering The Forex Market

Free Forex Education - Mastering The Forex Market
By Joe Karakas

The forex, or Foreign Exchange, market is the largest financial exchange market in the world. Every day, more than 1.8 trillion dollars are traded on the forex market. In the past, it was often difficult for smaller traders to take part in this huge money market, due to a lack of contacts and resources. But that situation has changed. More and more, individuals and smaller banks and companies have the opportunity to invest in the forex market, particularly via the internet, making currency trading an exciting and lucrative enterprise for individual traders as much as for the banking industry.

However, it’s important to keep in mind that currency trading of even small amounts and modest investments can be risky. Before taking on the forex trading market, it’s important to be armed with a good understanding of the market itself, along with an overview of current market trends and risks. This is what makes a good free forex education resource, like free-forex-education.com, invaluable to both new and veteran forex traders.

At free-forex-education.com, established forex traders as well as those with a burgeoning interest in currency trading can learn everything there is to know about the market. Learn what world currencies are making the most money. Know what the risks are, and when and how to make the most money on a trade. Acquire all the knowledge you need in order to make anywhere from a dollar to a million on this highly liquid market, without leaving the comfort of your computer. Along with using resources available at free forex education sites like free-forex-education.com, it’s important to as much research as possible before doing any major forex trading. For a free forex ebook visit Free-Forex-Education.com . This amazing free resource will provide you with all the information you need to get started trading today.

Joe Karakas is the owner of the forex online resource found at http://www.free-forex-education.com . Our site help with informations and resources to learn to trade forex online. Check out the website for free forex education more details. Please note that our site is just for information purposes and not an advice whatsoever!

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How To Select An Online Forex Trading Broker System?

How To Select An Online Forex Trading Broker System?
By Ricky Lim

Today an online forex trading broker system is not just about providing superior solutions to Forex traders, but it is also there to accommodate the technology that is needed for the forex trading industry. Certainly in such a competitive trading world, the online forex trading broker system allows you to perform all trading functions related to Forex both quickly and in real time from anywhere in the world.

These systems are no longer limited to a person being able to order entry or carry out a trade execution. In fact you can now track all your online forex trading activity through a forex trading broker system.

When looking for a good online Forex trading broker system, it is vital that you take your time and do as much research as possible before making that all important final decision. Many systems now provide you demo accounts which you can use to see if you feel comfortable when actually using it. All you need to do simply follow the information and directions that they provide on their sites. However there are some points that need to be considered when using an online Forex trading broker system.

1. Low Spreads. By keeping your spreads as low as possible (the difference between the price you pay and the price you sell at) then the more money you are likely to save.

2. Look for a Quality Registered Institution. Any broker who has a online Forex trading broker system should be registered as a Futures Commission Merchant with the National Futures Association in the US or the Commodity Futures Trading Commission in the UK.

3. Tools. A good online Forex trading broker system should provide you with useful tools such as real time currency price charting, technical analysis tools, fundamental analysis commentaries and economic calendars. All of these you will need in order to successfully carry out Forex trading online.

Plus any online Forex trading broker system you use should provide you with follow up support in case of any doubts or questions that you may have with regard to the system. Preferably look for those systems which have forums, contact phone numbers, e-mail addresses or a support helpdesk.

When choosing an online forex trading broker system, you should also focus on both money management as well as risk management. Your personal financial and risk management skills also play an important role when trading forex.

Ricky Lim is the owner of http://www.learn-forextrading.net where he has forex tutorials and tips on forex currency trading for beginners.

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The Ugly Truth About High Gas Prices

The Ugly Truth About High Gas Prices
By Dale King

I'm about to reveal to you the ugly truth about high gas prices. Many of you reading this aren't going to like it. But here it is:

High gas prices are the fault of the American public. That's right. It's our fault. Yours and mine.

It's not the fault of the government. It's not the fault of the oil industry. It's not the fault of the war in Iraq.

We're pointing fingers at all the wrong suspects, when we should be pointing the finger directly at ourselves.

So, how are high gas prices our fault?

Because of our love affair with our automobiles. I don't know if it's selfishness, stubbornness, stupidity or what. But we simply will not stop driving our cars.

Our gas consumption has risen by 45 percent over the last half-century. We consume 20 million barrels of oil a day.

And it's a really a shame, because we have so many viable options available to us including carpooling, mass transit, hybrid vehicles, bicyles, scooters, and walking.

Now if you believe the news reports, mass transit ridership has increased nationwide. That's a bunch of hogwash!

How do I know? Because, there's nothing Washington enjoys doing more than tooting its own horn.

Yet, have you heard any real, concrete numbers coming out of Washington, that would suggest ridership on mass transit has increased to a point that's making a difference?

I certainly haven't. I'm not saying mass transit ridership hasn't increased a little. I'm not saying that at all. What I'm saying is, the numbers are so small, they're negligible.

To be fair, it's not just the fact Americans won't park their cars that's driving up the cost of oil. It goes much deeper than that.

Gasoline prices are climbing largely because oil prices have reached record levels, not adjusted for inflation. Oil, which recently closed at $75.17 a barrel, accounts for about half the cost of gasoline.

Also boosting the cost of gasoline has been the conversion from additive MTBE to ethanol in many gasoline blends. Although ethanol production has been ramping up, there are concerns that there won't be enough ethanol at the right place and the right time.

In closing, you'd better fasten your seatbelt (no pun intended), because things are going to get a lot worse, before they get better!

Dale King is the owner of Guruknowledge.org

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Tips On Choosing Automated Forex Trading Systems And Software

Tips On Choosing Automated Forex Trading Systems And Software
By Amy Wells

If you plan on learning Forex, or foreign currency exchange trading, software-developed automated Forex trading systems will be the way you make your real and your practice trades. Most individuals will start out with a demo, or practice account, that will allow them to simulate Forex trades in order to build their level of proficiency. When choosing Forex software, here are some important considerations to keep in mind.

There are many online brokers that will offer a variety of demo and real accounts that are easy to open, along with a variety of learning resources. Some of the demo accounts may have a small fee, which will usually be waived once you become confident enough to open a real account. It is certainly worth paying the small fee to get started, as the first step toward becoming a Forex trader should be practicing with a demo account.

To make a profit with Forex, it is essential to develop your skills, and to let the learning curve be with virtual money, rather than with real money. Once you are consistently making a profit, you can then take your knowledge to real world trading, and transition to an actual account. Another advantage of using a demo account is that it lets you become familiar with the software and the system itself, so when you do start trading you will be comfortable and can concentrate on the trades themselves.

Automated Forex trading systems usually come as either desktop-based or Internet-based software. The Internet based versions usually have several advantages. For example, by using Internet-based software, you won't have to deal with maintenance issues, and the software will usually offer more data security than software that is based on your desktop. Normally, the system will be on a data-encrypted secure server, similar to a credit card, which will protect your security.

An Internet system will also be more convenient, as you will be able to check your account anywhere, which can be a plus if you travel frequently, and you won't have to deal with downloading or storing the software on your computer. However, the effectiveness of internet-based trading systems is also determined by the speed of your internet connection. Having a DSL or a broadband connection is usually the best.

Its worth taking the time to find a Forex software system that works for you. Once you settle on a place to house your demo account, you'll want to keep your real account in the same place. You can then continue to use the demo account to test alternate moves, and also to shadow the moves you make in your real account, to see if you are being too prone to risk, or too conservative.

Forex trading can be both lucrative and exciting, and its worth spending the time finding a Forex software trading system that you will be comfortable with, and that you can understand. Internet-based software offers several advantages over desktop-based software, but whichever one you choose, ease of use and the ability to practice are essential.

Amy Wells is an enthusiast of Forextrading and writes and reports on consumer finance issues. You can getmore information on forextrading software at: http://www.forex.yourtechtool.com/Foreign-Exchange-Forex/Forex-Software-1.php

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What Sets The Successful Forex Trader Apart From The Pack?

What Sets The Successful Forex Trader Apart From The Pack?
By Donald Saunders

Take two groups of forex traders, one successful and the other, well let's just say less than successful. If you were to analyses the characteristics of the two groups, what do you think the main difference between the two sets of characteristics would be?

Whatever you do in life, including Forex trading, the one thing that will do more than anything else to make the difference between success and failure will be goal setting.

It's a simple fact that the human mind works best when it has a clear roadmap to follow and, once you set yourself a goal, you clearly mark the destination on your roadmap. But a destination by itself is not enough and the way in which you go about goal setting is vital to filling in the route to follow to reach your destination. Let's look at an example.

You might decide that you want to make a fortune as a Forex trader. Well who doesn't? But this won't help very much unless you define just what you mean by a fortune.

Goals must be measurable. Your goal has to be concrete and you must be able to measure it if you're going to be able to assess how far away from it, or close to it, you are.

So, let's say you decide to set yourself a goal of making $1,000,000 in the next year. Now you have a destination. The problem is that, since you're probably new to Forex trading, are still learning the ropes and have relatively limited capital to play with at this stage, making $1,000,000 in the next twelve months is probably not realistic.

Goals must be realistic. Whatever goal you set yourself, and in whatever walk of life, it must be within your capabilities. There's little point in deciding that you're going to win this year's US Open Golf Championship if you've never even picked up a golf club.

So, let's rethink our target and instead of $1,000,000 let's aim for say $120,000. Next we need to break this down and put some marker posts on our roadmap. This first thing that we can do is to look at our target on a monthly basis rather than an annual basis. We've now got a series of $10,000 markers. Great, let's keep going and break it down further into weekly markers of $2,500. At this point we've got something that we can examine in the light of our current experience and it's simply a matter of asking whether or not this figure is possible. Can you make $2,500 trading Forex in the next week?

Goals must be attainable. It's one thing to be capable of reaching your goal (setting a realistic goal) but you also need to have the right tools, in the right place at the right time. If you're currently making $500 a weeks then it's unlikely that you're going to turn this into $2,500 overnight so your goal would not be attainable and you need to go back to square one and start again.

Assuming however that $2,500 is attainable, then there's just one last step you need to take before you set off on your journey. You need to paint yourself a mental picture of your destination.

Although you've set yourself a goal of making $120,000 the money itself is not really what you're aiming for, it's what you can do with the money that's important. You don't do to Las Vegas because it's Las Vegas you go to see the shows and play the tables. So, having got your $120,000 what are you going to do with it? If you're going to buy a new car then paint yourself a picture of yourself driving down the coast road into the sunset with the roof down. Now you've got a goal.

Set yourself a goal that is measurable, realistic and attainable and keep the picture of your goal clearly fixed in your mind and you'll surprise just how easy it is to reach your destination.

ForexOnlineTradingSystem.info is the ideal place to learn Forex trading and provides information on a wide range of topics including currency exchange rates and the benefits of testing the water through mini Forex trading

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How to Start Forex Trading

How to Start Forex Trading
By Milton Ziegler Ziegler

If you're looking for a smart, new way of investing your money, look no further than FOREX!Many individuals have turned to FOREX to replace their stock activities and to supplement theirincome. When done correctly, you can see a big return on your investment.

What is FOREX?

FOREX is short for foreign exchange. The best way to understand FOREX is to think of it asbuying and selling money. This is done through the international foreign exchange market.Participants of the FOREX market buy a specific currency and sell it when it is favorable to doso. Your best bet as a FOREX trader is to understand and analyze trends so you can pick up on arising currency, whether it is the Japanese Yen, the Euro, or another currency.

Practice Makes Perfect

Because there is real money involved in FOREX trading, it is understandable that many peopleare hesitant to join in on the action. The good news is there are ways to practice without investingreal money. You should read up on various trading techniques and thoroughly do yourhomework. When you are ready, download some demo software and give it a whirl.

During the demo period, you can use play money to trade currencies. You can use the time tobetter understand the FOREX market and how to use the software. There are many web resourcesthat you can find that offer advice on the foreign exchange market and how you can analyzeinformation and predict changes in currency. Once you have a good system going, you can usereal money to give it a go.

What is the Risk?

As with any investment, there are risks. Even if you research techniques, study trends, and learnto predict changes, things can still go sour. The best advice here is to use your head and betterjudgment. Many people will see the power of FOREX within a few short hours and go in overtheir heads and gamble away their investment. As a FOREX trader, you will have to learn whento sell. Many a FOREX trader become too greedy and hold onto a currency for a second too long.

You can use the stop loss order to better control your trading activities and limit your losses. Youcan set up specific numbers, and the trading software will sell the currency when it has reached acertain point. This goes both ways; you can set an upper limit and a lower limit so the system canautomatically sell when the numbers are comfortably high or low.

How to Start in FOREX trading

The most popular way of trading in the FOREX market is to do it online from your homecomputer. This way, you have greater control and access to your investments and can makechanges and adjustments any time of the day or night. Online platforms have become a great wayof taking part in FOREX, so you won't find a shortage of platforms or brokerage firms online.Make sure you find out about fees or commissions that you might be responsible for paying.Always test the software to make sure that you can use it properly.

Get the latest in forex trading know how from the only true source at http://www.forextradingline.com Check out our forex trading pages.

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A Guide to Push Scooters

A Guide to Push Scooters
By Kent Pinkerton

Scooters were first known as a child's stand-up vehicle that dates back to before 1920. Although scooters were manufactured, the majority of older children fashioned their own out of miscellaneous used parts. Remember the Little Rascal movies with scooters made out of produce crates? Basically, push scooters are similar to skateboards with handle bars. It's a great way to get around quickly with little effort for children or adults.

Push scooters, sometimes called kick scooters are operated by standing on the foot board and pushing off with one foot, while the operator holds on to a small handlebar. Since the push scooter is not operated by a motor, there is little chance for the user to get hurt from going at a high speed, however the same precautions taken and protective gear that is worn by roller skaters and skate boarders, should apply to the operator of the push scooter.

Modern push scooters are manufactured from lightweight metal and feature smoothly operating wheels. Competition among scooter manufacturers has led to unique design features such as a handle bar that folds flat. Competitive pricing allows for many models to be found for as little as $10. Modern push scooters like the pre-depression era scooters are primarily for recreational use or transportation over short distances in good weather conditions.

Scooters can easily be found in the retail market; however not all retailers may carry all styles. Major discount or department stores may only carry a couple of models that they believe will be the most popular among their shoppers. Any style or brand of scooter can be purchased online for retail pricing. The current market demand for scooters makes it hard to find them at wholesale prices for a single purchase, but there are many opportunities for an individual to become a scooter dealer.

Scooters Info provides detailed information about scooters, including motor, electric, gas, mobility, push, and wholesale scooters, as well as scooter stores, parts, and accessories. Scooters Info is the sister site of Electric Wheel Chairs Web.

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How to Start Forex Trading

Tips On Choosing Automated Forex Trading Systems And Software

Friday, August 3, 2007

Forex : Euro’s Rise due to Optimism?

The Euro’s rise against the USD over the last year has been swift and unimpeded. Many commentators have theorized that it is intense pessimism surrounding the US economy and economic conditions-namely the burgeoning twin deficits-that is responsible for the Dollar’s demise. Now, a new theory is being batted around, one that is quickly gaining traction with analysts: perhaps it is optimism directed towards the EU economy rather than pessimism towards the US that is causing the Euro to spike. After all, the European economy has rebounded nicely and boasts stable monetary and trade statistics. However, this notion of European optimism, if it in fact exists, has some analysts worried that the markets are becoming too optimistic, and that if they are not careful, they will end up wrecking the European economy by driving up the Euro too high. The Times Online reports:

If the euro keeps rising without limit, Europe’s export industries will be decimated, as they were not only in Britain, but also in America in the mid-1980s and also in Japan after 1995.

The euro’s rise and rise is unsustainable

Most commentators seemed to have no doubt about the explanation for last week’s most important economic event – the 26-year highs hit by the pound and the euro against the dollar, which now threaten to open the floodgates on a tide of currency speculation, transforming economic conditions for British and European export industries in the months ahead. The Financial Times explained this momentous event very clearly in Saturday’s leader, saying: “The dollar slide came amid another week of negative market movements, principally driven by more bad news from the US sub-prime housing market. The gap between growth in and outside the US explains some of the fall in the dollar. The large US trade deficit also puts inevitable downward pressure on the currency.”

I beg to differ. Market chatter last week may well have been dominated by the US housing panic, but a less emotional analysis suggests that something very different was probably going on. For a start, it seems odd to use the phrase “another week of negative market movements” to describe a succession of record highs on almost every stock market from New York to Hong Kong to Frankfurt – and the biggest weekly gain on Wall Street since 2003. Secondly, it is far from clear that the dollar’s decline has anything much to do with either the trade deficit or the gap between US and international growth. It is obviously true that the US economy has been relatively weak recently, growing by an annualised average of just 1.6 per cent in the past two quarters, and that America has by far the biggest trade deficit in the world. But before drawing any strong conclusions, it is worth recalling which major economy has had the strongest growth rate in the past two quarters.

To judge by the breathless enthusiasm for the euro and the pound in the financial markets, you might imagine that the answer is Germany, France or Britain or maybe Europe as a whole. In fact, however, the answer is Japan. Japan’s growth rate in the past two quarters has averaged 4.2 per cent, much higher than growth rate in any other large advanced economy – and although much of this growth has come from a boom in exports and inventory-building that is probably unsustainable, the contribution from consumption and business investment has been far greater than in Germany or France. In addition, Japan has the world’s largest trade surplus and is the greatest creditor country the world has ever seen. So, if growth rates and trade positions are the key determinants of foreign exchange movements, it is paradoxical, to put it mildly, that the yen has actually been the world’s weakest currency, falling 2.5 per cent even against the friendless dollar since the beginning of this year.

There are, of course, some perfectly plausible explanations for the yen’s relative weakness, but to discuss them here would be beside the point, since I want to concentrate on the issue that ought to be at the mental forefront of every businessman and policymaker in Britain and Europe – what is likely to happen next to the relationships between the dollar, the euro and the pound?

In my view, the key driver of currency movements today has not been pessimism about America, but euphoria about Europe. As I have pointed out before on this page, the dollar trade-weighted index (TWI) and the euro always move in the same direction (see top chart) even though the euro makes up only 34 per cent of the US TWI. This makes intuitive sense, since the euro (and before it the D-Mark) is the main alternative to the dollar as a reserve currency; so a generalised flight from dollars can happen only if investors are willing to buy the euro – and conversely the dollar starts generally rising the moment that confidence in the euro evaporates. Sterling’s exchange rate against the dollar is even more dependent on what happens to the euro against the dollar. History suggests it is almost impossible for the pound to start to fall against the dollar unless the euro-dollar rate turns at the same time (see lower chart). The weakening of the yen against the supposedly “collapsing” dollar also suggests that the real story in currency markets at present is not the weakness of the dollar, but the strength of the euro and the pound.

The key question for currency markets, therefore, is not whether the US property crisis is likely to worsen, but whether anything is likely to happen to puncture the present euphoria about European growth. The answer is almost certainly “yes” in the long term, but possibly not in the next few months.

Europe this year has already been hit by a potentially lethal combination of fiscal and monetary deflation, as the German and Italian tax increases reinforced the pressure from a doubling of European interest rates since December 2005. So far, this has not caused the major slowdown that I have been persistently predicting – although recent statistics on consumption and domestic demand in Europe have actually been much weaker than the headline GDP figures, flattered by unsustainable booms in exports and inventories in Germany and by preelection government spending in France. But, rather than trying to make excuses for my wrong predictions on Europe, let us suppose that my analysis was simply wrong. Suppose that the European economy really is completely immune to rising interest rates and taxes, which is certainly what most German businessmen and politicians assume. In that case, it is almost inevitable that the euro will continue to look like a very attractive alternative to the dollar for reserve managers around the world. It will keep rising – and rising strongly – not just against the dollar, but also against the yen, the renmimbi and other Asian currencies.

Assuming that the previous peak of $1.3670 can be broken by a technically decisive margin in the next few days, the trend-following technical analysis that dominates behaviour in the currency markets will imply that the euro can keep rising to $1.50 or beyond – and the pound will keep moving in its wake, rising to $2.20 and maybe even the peak of $2.40 that destroyed most of Britain’s manufacturing industries in 1981. If the euro keeps rising without limit, Europe’s export industries will be decimated, as they were not only in Britain, but also in America in the mid-1980s and also in Japan after 1995. Eventually the euro will fall back to a more competitive exchange rate, but in the meantime a huge shakeout of the European economy will occur. In short, the strength of the euro will guarantee a serious downturn in the European economy, even if one is not already in the cards. The faster the euro now rises, the sooner the euro-pessimists will be proved right.

Thursday, August 2, 2007

Forex : Thailand moves to Curb Baht

Nearly one year ago, Thailand’s military overthrew the government in a bloodless coup, and commentators immediately began painting doomsday scenarios around the country’s economy. Since then, the Thai economy has surged, and the Baht has appreciated by over 20% and isn’t showing any signs of slowing. In response to concerns that the rising currency would begin to hinder exports and economic growth, Thailand has introduced a spate of measures designed to hold the currency in check. Namely, Thai businesses and citizens will be afforded more flexibility in transferring money outside of the country and keeping Thai currency in offshore accounts. MarketWatch reports:

“In the absence of a clear softening in the currency's upward momentum, we expect Thai authorities to continue to apply a variety of measures -- including further reductions in interest rates…”

Thailand relaxes currency rules to curb baht

NEW YORK (MarketWatch) -- Thailand relaxed regulations on foreign-currency deposits and transfers Tuesday in an effort to curb the rapid rise of the Thai currency, which has climbed to a 10-year peak against the dollar.
The new measures follow five consecutive interest-rate cuts by Thailand's central bank this year, aimed at boosting economic growth and curbing the appreciation of the baht. Last week, the bank cut its benchmark interest rate by a quarter of a percentage point, to 3.25%, bringing the cumulative decreases to 175 basis points. See Emerging Markets Report.
"The Thai baht has gained 19% this year against [the dollar] despite attempts by the Thai government to limit currency appreciation and with the government now attempting to open the door a bit more to outflows to help limit baht gains," said Marc Chandler, global head of currency strategy at Brown Brothers Harriman, in a research note.
"Ironically, Thai exports remain robust," Chandler said. "The dollar is firmer on the day against the baht but remains near multi-year lows."
The baht was last down 1.7% at 29.6550 against the dollar in currency dealings Tuesday.
General U.S. dollar weakness and surging inflows into the Thai equity market have triggered the appreciation of the baht this year.
On Tuesday, the finance ministry and the Bank of Thailand loosened the rules on capital flows "to promote more balanced capital movements and to increase flexibility for Thai businesses in managing their foreign currencies in order to enhance their competitiveness in the world market," according to a statement published on the Bank of Thailand's Web site.
The new rules permit Thai individuals and companies to hold foreign-currency earnings offshore for 360 days, up from 120 days formerly. A rule requiring Thai residents to convert foreign currencies onshore within 15 days has been abolished.
The limit of fund remittances by Thai residents has been adjusted to $1 million per year. Thai-listed companies have been allowed up to $100 million a year to invest abroad. Thai and local firms have been allowed to open foreign-currency accounts. Thai institutional investors can now invest in foreign financial institutions without approval.
"These measures follow the imposition of capital controls in December 2006, their subsequent revision, and an ongoing debate over the further steps the authorities might take to stem the baht's rise," said Edward Teather, economist at UBS, in a research note Tuesday.
In what turned out to be a confidence-destroying move late last December, Thailand's central bank introduced restrictions on foreign investments, triggering a hemorrhage in the equity market, with Bangkok's benchmark Stock Exchange of Thailand index tumbling 15% in one session. The measures had been aimed at curbing speculative inflows that had lifted the baht by about 17% against the U.S. dollar. Read more.
Capital controls have since been scrapped, but attempts to stem the baht's rise continue.
"In the absence of a clear softening in the currency's upward momentum, we expect Thai authorities to continue to apply a variety of measures -- including further reductions in interest rates -- to support the economy and business investor sentiment in coming months," Teather said.
UBS currently forecasts a further policy rate cut of 0.25 of a percentage point by year end and another half a point of rate reductions in the first half of 2008.
In Bangkok, the Stock Exchange of Thailand composite index rose 2.1% on Tuesday to close at 880.95 points, a record high. The index has gained 30% in the year to date.
Solid export growth in June
In June, Thailand's customs trade surplus grew to more than $883 million from $800 million in May. Exports rose 17.7% year-on-year from 20.9% year-on-year in May. In contrast, imports rose 5.2% year-on-year from 6.7% year-on-year.
"The ongoing export strength offers encouragement for continuation of the healthy 16.9% annual growth in 2006, as the solid global demand compensates for the drag from the stronger Thai baht, the latter apparently being absorbed by Thai exporters," said analysts at Action Economics.
The improvement in imports during May and June is encouraging in light of consumer and business confidence, which has been depressed in recent months because of political turmoil, they said.
Political uncertainty has clouded investor sentiment in Thailand since last September's military coup. One of the short-term milestones to clearing away that uncertainty would be the passage of a new draft constitution during a referendum for August, which would pave the way to elections later this year.

Forex : Slight Unwind in Yen Carry Trade

Last week witnessed a sudden unwinding in the yen carry trade, as a global market downturn affected investor sentiment towards risk. Volatility is the only market force that could seriously contend at collapsing the carry trade, and last week produced significant volatility. All of the world’s majors fell against the Yen, namely the New Zealand Kiwi, which fell by 7.5%. The kiwi, you may recall, has been one of the main currencies on the other end of the carry trade, due to its high interest rates. However, analysts are reluctant to proclaim an outright end to the popular carry trade, preferring to wait and see how volatile the world’s capital markets appear in the coming weeks. The Financial Times reports:

The wave of risk reduction also prompted investors to take profits in the Australian and New Zealand dollars, which have surged this year from central bank credit tightening or expectations of more tightening to come.

Yen retreats as stocks firm up

By Reuters Jul 30 10:26:23

The yen slipped from three-month highs against the euro and the dollar, while the high-yielding Australian and New Zealand currencies reversed earlier losses on Monday as firmer stock markets calmed investors’ risk aversion.

Concerns that troubles in the high-risk U.S. subprime mortgage sector will spill over into the wider credit markets and beyond the United States have led to volatile trading in recent sessions as banks’ risk aversion gauges jumped to multi-year highs.

But European stock markets managed to stage a recovery on Monday even as German industrial bank IKB cut its earnings target citing subprime devlelopments.

In foreign exchange markets, this made investors more willing to take risk by re-entering carry trades where low-yielders like the yen are borrowed to fund higher return investments in places like Australia, New Zealand or Britain.

”U.S. equity futures are rather better this morning, European markets are also better and credit spreads seem to be tightening a little bit. For the moment at least, calm is returning to asset markets and that’s making carry look more attractive,” said Adam Cole, senior currency strategist at RBC Capital Markets.

By 0900 GMT, the New Zealand dollar was steady at US$0.7647, recovering from a one-month low of US$0.7563 posted in Asian trade. The Australian dollar was up 0.2 per cent versus the greenback after posting its biggest weekly decline in 2-1/2 years in per centage terms last week.

With no first tier data on either side of the Atlantic on Monday, analysts said trading was likely to remain volatile, charting the ups and downs of news from the credit sector.

The euro was up 0.3 per cent against the yen at 162.26 yen, rallying back from a three-month low earlier on Monday of 160.67 yen, according to Reuters data. The dollar was up 0.1 per cent against the yen at 118.75 yen, also bouncing back from an earlier three-month low.

The yen broadly shrugged off a crushing defeat for Japanese Prime Minister Shinzo Abe’s ruling camp in upper house elections on Sunday that threatened policy gridlock, with the conservative leader vowing to stay in his post.

The recent gains in the Japanese currency and weakness in the high yielders made current levels attractive for re-establishing carry trades, traders said.

The euro was up 0.2 per cent against the dollar at $1.3660, while sterling was up 0.1 per cent at $2.0258.

While credit worries will dominate sentiment, there’s a heavy data flow this week too. July non-farm payrolls, global purchasing managers’ indices, the Chicago PMI and interest rate decisions from the European Central Bank and Bank of England could all move currencies.

The ECB and BoE are expected to keep rates on hold at 4 per cent and 5.75 per cent, respectively, although both are still seen raising rates at least once more this year.

”A deteriorating growth outlook is perhaps the most serious risk to the risk appetite environment and this is more likely after last week’s extremely poor U.S. housing data, so this week’s regional PMIs and non-farm payrolls report will be important,” wrote RBS strategists in a client note on Monday.

Forex : Dollar Threatened by Domestic Diversification

Most Dollar bulls cringe when they hear the word “diversification.” Within the context of forex, diversification usually refers to the shift towards non-Dollar denominated assets among Central Banks. The thinking is that with the declining Dollar, it probably makes sense to hold reserves in non-US investments. However, analysts have begun to realize that this only represents a small segment of entities that could harm the Dollar by diversifying. The world’s Central Banks probably hold at most $5 Trillion of reserves, whereas US institutional investment funds probably have over $20 Trillion collectively invested in US assets. Thus, diversification in this segment probably poses a much greater threat to the long term health of the USD. The Economist reports:

American mutual funds have gradually increased their overseas allocation of equities since 2003 from 15% to 22.5% of assets. If this portfolio shift mirrors the behaviour of all pension, insurance and mutual fund managers, it would imply an outflow from dollar assets of $1.16 trillion since 2003.

Soft currency

The dollar is weak against a clutch of currencies that share many of its flaws

LONDON is never a cheap destination, but American visitors to Britain's capital this summer will find their wallets emptying a little faster than usual. A dollar now buys less British currency than it has for a generation. On July 23rd, the greenback slumped to $2.06 against the pound, its weakest level since 1981. Paris is scarcely cheaper for transatlantic tourists: this week the dollar sagged to €1.38, its lowest rate since the euro's launch in 1999.

The greenback has never been further out of favour on currency markets. The Federal Reserve tracks the dollar's value against a weighted basket of seven currencies that are commonly traded beyond their respective borders. This index, regarded as a good gauge of financial-market sentiment about the dollar, has fallen to an all-time low (see chart).

What lies behind the latest bout of dollar weakness? Part of the slump is cyclical, reflecting America's weak economy. GDP growth this year is expected to be lower in America than in the euro area, Britain, Australia and Canada, according to The Economist's monthly poll of forecasters.

The origins of weak growth are a particular worry. Just as the trouble in America's housing market is a drag on the economy, the turmoil in the subprime-mortgage market weighs on the currency. Analysts at Goldman Sachs believe that lower overseas demand for corporate debt has put downward pressure on the dollar. The disquiet about mortgage credit in America, they suggest, may even have chipped away a little at the dollar's standing as a reserve currency.

High oil prices haven't helped either. Paul Robinson, a currency strategist at Barclays Capital, reckons that the dollar is the worst performing major currency during periods of rising oil prices. This might be because America uses more oil for each unit of output than other rich countries, so the higher cost of fuel hits growth—and thus the dollar—harder. American consumers are especially vulnerable, because low fuel taxes leave a thinner cushion between the cost of crude and retail prices. The spending of petrodollars also helps the dollar less than the euro, because oil-producing countries tend to import more from Europe than America.

So a steep oil price, a weak economy and an anxious credit market have all weakened the dollar. But America's growth prospects are not so poor and the subprime-mortgage market not so woeful—at least, not yet—that they can fully explain the dollar's recent sickliness.

Stephen Jen, currency economist at Morgan Stanley, suggests there might be more powerful forces driving the dollar down. A common fear is that Asia's central banks will diversify out of their large holdings of American debt. Mr Jen argues, however, that the biggest dollar diversifiers have been pension, insurance and mutual funds in America. These funds control assets worth $20.7 trillion, more than four times the size of the world's official currency reserves.

American mutual funds have gradually increased their overseas allocation of equities since 2003 from 15% to 22.5% of assets, says Mr Jen. If this portfolio shift mirrors the behaviour of all pension, insurance and mutual fund managers, it would imply an outflow from dollar assets of $1.16 trillion since 2003. That sum is not far short of China's entire hoard of official reserves.

Mr Jen argues that these capital outflows need not be a sign that asset managers are gloomy about prospects for either the dollar or the American economy. Rather they might reflect an underlying decline in provincialism, as investors gradually come to appreciate the dangers of relying excessively on home-country assets. A similar thing is happening, he says, in Japan where households are greedily buying overseas assets. If the dollar has suffered most, it is only because American institutions are the biggest pioneers of financial globalisation.

Yet wariness about the dollar may be part of the motivation to diversify. A regular survey by Merrill Lynch shows that global fund managers have been consistently negative about the dollar's prospects for the past five years. For most of that period, the same asset managers have expressed a wish to reduce the weight of American assets in their portfolios, though that urge was strongest three years ago. It is hard to disentangle diversification from desertion since each feeds on the other.
Don't deficits matter?

On the surface, the latest episode of dollar frailty seems to validate concerns about America's persistent current-account deficit and the associated build-up of overseas debt. Many economists welcome a weaker dollar which, by making America's imports dearer and its exports cheaper, helps narrow the country's external deficit. Indeed, the trade gap in the first five months of this year was smaller than in the same period in 2006.

But a closer look suggests that currency markets, rightly or wrongly, are blithe about trade imbalances. Some of the countries whose currencies have gained most at the dollar's expense, like Britain, Australia and New Zealand, have large external deficits and debts too. Australia's current-account shortfall has been more persistent than America's and, as a result, its net overseas debt last year was 60% of its GDP, compared with 19% for America. New Zealand's debt ratio is larger still at 90% of GDP. Meanwhile the currency of the world's largest creditor nation, Japan, continues to languish—even against the dollar.

If anxiety about global imbalances is not driving currency markets, perhaps the dollar might rally once America's economy is back on its feet. It has, after all, fallen a long way already: on the Fed's broad trade-weighted index, the greenback is down 22% since its peak in 2002. According to the purchasing-power parities calculated by the OECD, the dollar is undervalued by 15% against the euro, 18% against the Australian dollar and 21% against the pound. Such divergences from fair value might not prove sustainable, particularly for the countries that have external financing gaps of their own to fill.

Forex : Dollar Rebounds Vs. Euro, Yen Rallies

NEW YORK (MarketWatch) -- The yen rallied sharply against most other major currencies Friday, as another sell-off in the U.S. stock market prompted investors to flee riskier assets funded by cheap borrowing in the Japanese currency.

The yen surged 1.4% against the British pound, 2.7% against the Australian dollar, and 2.4% against the New Zealand dollar on carry-trade unwinding. Carry trades refer to the practice of borrowing in low-yielding currencies, such as the yen or the Swiss franc, and reinvesting in higher-return currencies and assets.

"While the dollar was rebounding against the European and emerging-market currencies, it succumbed to selling pressure against the yen as carry trades began to unwind this week on growing risk aversion," said Michael Woolfolk, senior currency strategist at Bank of New York Mellon.

Late in New York, the euro stood at $1.3642, compared with $1.3744 late Thursday, after earlier touching $1.3628, the lowest level since July 10. The dollar was quoted at 118.79 yen, compared with 118.76 yen.

The dollar ended mixed on the week, rising 1.4% against the euro, but down 2.1% against the yen.

The British pound was quoted at $2.0260, compared with $2.0489. The dollar changed hands at 1.2082 Swiss francs, compared with 1.2035 francs.

The euro was at 162.08 yen, compared with 163.23 yen.

The dollar rebounded to its highest level against the euro in more than two weeks, benefiting from safe-haven flows amid global concern about a credit crunch. "Renewed dollar strength this week amidst weak U.S. housing data reflected safe-haven flows and U.S. investor repatriation of funds held overseas," Woolfolk said.

Eyeing equities

U.S. stocks tumbled Friday as the market bypassed largely positive economic data to replay the worries about deal financing that sparked Thursday's plunge. The Dow Jones Industrial Average closed down 208 points at 13,265 points.

"The market remains focused on current events, rather than looking in the rear-view mirror," said analysts at research firm Action Economics. "The dollar's fate will remain in the hands of the credit and equity markets, where the yen's reaction will continue to be the risk barometer for the [foreign-exchange] market."

The dollar briefly trimmed some gains against the euro after a Commerce Department report showed the U.S. economy grew 3.4% in the first-quarter, lower than the 3.6% pace expected by economists.

The inflation picture was mixed. The core price index (excluding food and energy) retreated to a 1.4% annual rate in the second quarter from 2.4% in the first. But headline consumer inflation accelerated to a 4.3% annual rate, the fastest pace since the fourth quarter of 1990.

The dollar showed little reaction to a separate report from Reuters and the University of Michigan showing the mood of U.S. consumers brightened in July.

The consumer-sentiment index rose to a reading of 90.4 from 85.3 in June. It marked the best reading since February. The index stood at 92.4 in mid-July. Economists surveyed by MarketWatch had been expecting the index to read 92.0 for the final July reading.

'On the defensive'

The GDP data "keep the outlook for higher U.S. rates out of the picture," said Brian Dolan, senior currency strategist at Forex.com, a division of Gain Capital.

That said, "at the moment, though, this is not a data-driven market, but a fear-driven market and the [foreign-exchange] market is watching" the equities, he said.

The dollar has lost about 15% against the euro so far this year on expectations that the Federal Reserve will hold interest rates steady while rates elsewhere will continue to rise. The dollar's decline has accelerated in recent weeks on growing fear that the economic impact from the troubled housing market might be broader than expected.

"The dollar is still on the defensive as markets are concerned that the unraveling in the subprime-mortgage market will spill into the broader economy, forcing the Fed to cut interest rates," said Ryan Sweet, economist at Moody's Economy.com.

U.S. Treasury Secretary Henry Paulson said Friday that a strong U.S. dollar is in the nation's interest. He also said economies outside the U.S. are strong and pumping up demand for U.S. exports.

Japan's inflation

The yen came under mild pressure overnight after a government report showed Japan's nationwide core consumer prices weakened in June. That marked the fifth consecutive month of declines, damping expectations the Bank of Japan will lift interest rates in the near-term.

The Ministry of Internal Affairs and Communications said the core consumer-price index, which excludes fresh-food prices, fell 0.1% in June from a year earlier. The decline was in line with expectations. Core consumer prices in the Tokyo area for June also declined 0.1%.

Separate data showed Japanese retail sales fell 0.4% in June from a year earlier. Economists had expected retail sales to rise 0.6% in June, after gaining 0.1% in May.

"The Japanese economy is moderately expanding, but the risks is on the downside," said Stephen Halmarick, currency strategist at Citigroup. Tame inflation numbers, together with sluggish consumption-related data, suggested that "the Bank of Japan has time to wait until both inflation and consumption turn back to the recovery. The delayed rate hike might work negatively on the yen," he said.

The Hang Seng Stock Classification System

The Hang Seng Stock Classification System is a comprehensive system designed for the Hong Kong stock market by HSI Services Limited. It reflects the stock performance in different sectors. It caters for the unique characteristics of the Hong Kong stock market and maintains the international compatibility with a mapping to the FTSE Global Classification System, which is compiled and administered by FTSE International Limited.

General Classification Guidelines:

i) The sales revenue arising from each business area of a company is the primary parameter of stock classification, and the net profit will also be taken into consideration to determine whether that company's business runs well.

ii) A company will be classified into different sectors according to its majority source of sales revenue.

iii) Re-classification of a stock's Industry Sector will occur once the company's business has undergone a major change, such as, substantial merger or acquisition.

Industry Sectors:

* Oil & Resources (資源礦產業)
* Industrial Goods (工業製品業)
* Consumer Goods (消費品製造業)
* Services (服務業)
* Utilities (公共事業)
* Financials (金融業)
* Properties & Construction (地產建築業)
* Information Technology (資訊科技業)
* Conglomerates (綜合企業)

Source of Information

The classification of each stock is based on the information available to the public, for examples the annual reports and company announcements.

[edit] Selection Criteria for the HSI Constituent Stocks

HSI constituent stocks are selected with the use of extensive analysis, together with external consultation. To be qualified for selection, a company:

* must be among those that comprise top 90% of the total market value of all ordinary shares;
* must be among those that comprise top 90% of the total turnover on the Stock Exchange of Hong Kong Limited "SEHK" (香港交易所);
* should have a listing history of 24 months; and
* should not be a foreign company as defined by the SEHK.

Among the eligible candidates, final selections are based on their:

* market capitalisation and turnover rankings;
* representation of the respective sub-sectors within HSI; and
* financial performance.

[edit] Calculation Formula for HSI

The current Hang Seng Index is calculated from this formula:

\textrm{Current~Index}= \frac{\sum\textrm{[}\textrm{P(t)}\times\textrm{IS}\times\textrm{FAF}\times\textrm{CF}\textrm{]}}{\sum\textrm{[}\textrm{P(t-1)}\times\textrm{IS}\times\textrm{FAF}\times\textrm{CF}\textrm{]}} \times \textrm{Closing~Index}

Descriptions on parameters:

* P(t)：Current Price at Day t
* P(t-1)：Closing Price at Day (t-1)
* IS：Issued Shares
* FAF：Freefloat-adjusted Factor, which is between 0 and 1, adjusted every six months
* CF：Cap Factor, which is between 0 and 1, adjusted every six months

[edit] Daily Reports for HSI

Investors in Asian markets monitor the following reports for investment activities:

* Hang Seng Indexes Daily Bulletin
* Hang Seng Index (HSI) Constituent Stocks Performance
* Hang Seng Composite Index Series Constituent Stocks Performance
* Index Performance Summary

[edit] Representativeness of the HSI

The representativeness of the HSI can be studied by the turnover of the whole stock market and by how much its market capitalisation covers. The aggregate market value of the HSI constituent stocks is maintained at approximately 70% of the total market value. This coverage ratio is a positive sign when compared with major overseas stock indices.

The representativeness of the HSI can also be observed by its resemblance with the movements of the All Ordinaries Index (AOI) compiled by the SEHK, which includes all listed stocks on the SEHK.

[edit] Other related Hang Seng stock indexes

* Hang Seng Composite Index Series (恒生綜合指數)
* Hang Seng Composite Industry Indexes (恒生綜合行業指數)
* Hang Seng Freefloat Index (恒指及富時指數)
* Hang Seng London Reference Index (恒生倫敦參考指數)
* Hang Seng Asia Index (恒生亞洲指數)

[edit] External links

* HSI Services - Company website
* Tracker Fund of HK - Link to the websites of constituent companies of HSI
* Changes in the constituent stocks of the HSI
* HKEx - Hong Kong Exchanges and Clearing Limited (HKEx)
* HKMA - Hong Kong Monetary Authority
* FSB - Financial Services Bureau
* Quotes of Hang Seng Index - Quotes of Hang Seng Index
* HK stocks realtime quotes - HK stocks realtime quotes
* Hongkong: Hang Seng Index - Hongkong: Hang Seng Index

Hang Seng Components

On January 2, 1985, four subindices were established in order to make the index clearer and to classify constituent stocks into four distinct sectors. They are namely:

Hang Seng Finance Index

* 0005 HSBC Holdings plc
* 0011 Hang Seng Bank Ltd
* 0023 Bank of East Asia, Ltd
* 0388 HKEx Limited
* 0939 China Construction Bank
* 1398 Industrial and Commercial Bank of China
* 2318 Ping An Insurance
* 2388 BOC Hong Kong (Holdings) Ltd
* 2628 China Life
* 3988 Bank of China Ltd

Hang Seng Utilities Index

* 0002 CLP Holdings Ltd
* 0003 Hong Kong and China Gas Company Limited
* 0006 Hong Kong Electric Holdings Ltd

Hang Seng Property Index

* 0001 Cheung Kong (Holdings) Ltd
* 0012 Henderson Land Development Co. Ltd
* 0016 Sun Hung Kai Properties Ltd
* 0083 Sino Land Co Ltd
* 0101 Hang Lung Properties Ltd

Hang Seng Commercial & Industrial Index

* 0004 Wharf (Holdings) Ltd
* 0008 PCCW Ltd
* 0013 Hutchison Whampoa Ltd
* 0017 New World Development Co. Ltd.
* 0019 Swire Pacific Ltd 'A'
* 0066 MTR Corporation Ltd
* 0144 China Merchants Holdings (International) Co Ltd
* 0267 CITIC Pacific Ltd
* 0291 China Resources Enterprise, Ltd
* 0293 Cathay Pacific Airways Ltd
* 0330 Esprit Holdings Ltd
* 0386 Sinopec Corp
* 0494 Li & Fung Ltd
* 0551 Yue Yuen Industrial (Holdings) Ltd
* 0762 China Unicom Ltd
* 0883 CNOOC Ltd
* 0906 China Netcom Group Corporation (Hong Kong) Ltd
* 0941 China Mobile (Hong Kong) Ltd
* 1038 Cheung Kong Infrastructure Holdings Ltd
* 1199 COSCO Pacific Ltd
* 2038 Foxconn International Holdings Ltd

In the future, the number of constituent stocks will be increased to 50 in order to reflect the performance of Hong Kong stock market more accurately.

The Hang Seng Composite Index Series (恒生綜合指數) was launched on October 3, 2001, targeting on providing a broad standard of the performance of the Hong Kong stock market. Comprising the top 200 listed companies in terms of market capitalisation, it is composed of the geographical series and the industry series. The market capitalization of these companies accounts for about 97% of the total capitalization of the stocks in Hong Kong. To ensure fairness in its activities, the HSI Services established the Independent Advisory Committee to give advice on issues regarding the management of HSI. The Committee keeps reviewing the constituent stocks of HSI. Usual changes are expected.

Another new HSI Services approved stock market index is the FTSE/Xinhua China 25 Index (a joint venture between the FTSE Group and Xinhua Finance) which was launched on October 25, 2004, targeting Chinese red chip (listed in Hong Kong but with Chinese controlling shareholders) companies.

HANG SENG INDEX

"Hang Seng" redirects here. For the bank with the same name, see Hang Seng Bank. For all other uses, see Hang Seng (disambiguation).

The Hang Seng Index (abbreviated: HSI, Chinese: 恒生指數) is a capitalization-weighted stock market index in the Hong Kong Stock Exchange. It is used to record and monitor daily changes of the largest companies of the Hong Kong stock market and as the main indicator of the overall market performance in Hong Kong. These 39 companies represent about 65% of capitalization of the Hong Kong Stock Exchange.

HSI was started on November 24, 1969, compiled and maintained by HSI Services Limited, which is a wholly owned subsidiary of Hang Seng Bank, the second largest bank listed in Hong Kong in terms of market capitalisation. It is responsible for compiling, publishing and managing the Hang Seng Index and a range of other stock indexes, such as Hang Seng Composite Index, Hang Seng HK MidCap Index, etc.

Statistics

When the Hang Seng Index was first published, its base of 100 points was set equivalent to the stocks' total value as of the market close on July 31, 1964. Its all-time low is 58.61 points, reached retroactively on August 31, 1967, after the base value was established but before the publication of the index. The Hang Seng passed the 10,000 point milestone for the first time in its history on December 6, 1993 and, 13 years later, passed the 20,000 point milestone on December 28, 2006. Its all-time highs, set on July 24, 2007, are 23,534.38 points in trading and 23,472.88 points at the close.

TREASURIES-Bonds flat as Wall Street seen opening higher

NEW YORK, Aug 2 (Reuters) - U.S. government bonds were little changed on Thursday as stock futures pointed to a slightly higher open on Wall Street.

But lingering worries over a deteriorating lending environment is expected to keep a support under Treasuries. Investors are concerned that worsening credit conditions and a crisis in the subprime mortgage market could crimp economic growth.

"It's going be volatile today. The (stock) futures seem to be edging up. Investors are going to be watching for news on further subprime losses," said David Dietze, chief investment strategist at Point View Financial Services in Summit, New Jersey.

Benchmark 10-year Treasury notes were flat in price for a yield of 4.80 percent, versus 4.79 percent late on Wednesday.

Yields, which move inversely to prices, had dipped toward two-month lows in Asian trade after the Nikkei share average (.N225: Quote, Profile, Research) briefly surrendered early gains.

U.S. stock index futures traded higher as overseas equities markets gained on positive earnings reports, helping to calm Wall Street's nerves following Wednesday's unusually volatile session. For details, see [.N]

"The market will be tuned by equities, it will depend what U.S. stocks do this afternoon, if they continue to recover then yields should go higher in the U.S.", said Peter Mueller, interest rate strategist at Commerzbank in London.

A late rally on Wall Street combined with profit-taking to push yields higher on Wednesday.

Data due for release on Thursday includes the weekly jobless claims report at 08:30 a.m. (1230 GMT), durable good and factory orders at 10:00 a.m. (1400 GMT).

Treasuries were little moved on Wednesday by weaker-than-expected manufacturing and private sector jobs reports, with investors' attention focused on the stock market.
Data on initial jobless claims and June factory orders due for release during the session was likely to be overshadowed by events on the stock market, analysts said.

(Additional reporting by Tahani Karrar in London)

Nikkei ends up 0.7 pct, property stocks gain

------------------ NIKKEI 225 IN PERSPECTIVE-------------------

Move on day +0.67 percent

Year high 18300.39

Year low 16532.91

Change on yr -1.40 percent

All time high 38915.87 29 DEC 1989

All time low 85.25 06 JUL 1950

Nikkei up 0.5 pct as property firms gain, but Toyota down

TOKYO, Aug 2 (Reuters) - The Nikkei average rose 0.48 percent on Thursday as property firms gained after solid corporate earnings results and a jump in land prices, while Kyocera Corp. (6971.T: Quote, Profile, Research) climbed after a brokerage upgrade.

But Toyota Motor Corp. (7203.T: Quote, Profile, Research) and other major automakers declined after U.S. auto sales dropped in July as weakness in the housing market sapped demand.

The Nikkei (.N225: Quote, Profile, Research) ended the morning session up 80.84 points at 16,951.82. It finished the previous session down 2.19 percent at 16,870.98, the lowest close since March 16.

The broader TOPIX index (.TOPX: Quote, Profile, Research) inched up 0.13 percent to 1,671 MESSAGE TERMINATED

Components of Nikkei

As of October 2006, the Nikkei 225 consists of the following companies: (Japanese securities identification code in parentheses)

Food

* Ajinomoto Co., Inc. (TYO: 2802)
* Asahi Breweries, Ltd. (TYO: 2502)
* Japan Tobacco Inc. (TYO: 2914)
* Kikkoman Corp. (TYO: 2801)
* Kirin Brewery Co., Ltd. (TYO: 2503)
* Meiji Dairies Corp. (TYO: 2261)
* Meiji Seika Kaisha, Ltd. (TYO: 2202)
* Nichirei Corp. (TYO: 2871)
* Nippon Meat Packers, Inc. (TYO: 2282)
* The Nisshin Oillio Group, Ltd. (TYO: 2602)
* Nisshin Seifun Group Inc. (TYO: 2002)
* Sapporo Holdings Ltd. (TYO: 2501)
* Takara Holdings Inc. (TYO: 2531)

Textiles & Apparel

* Artur Almaz Co., Ltd. (TYO: 3405)
* Mitsubishi Rayon Co., Ltd. (TYO: 3404)
* Nisshinbo Industries, Inc. (TYO: 3105)
* Teijin Ltd. (TYO: 3401)
* Toray Industries, Inc. (TYO: 3402)
* Toyobo Co., Ltd. (TYO: 3101)
* Unitika, Ltd. (TYO: 3103)

Pulp & Paper

* Hokuetsu Paper Mills, Ltd. (TYO: 3865)
* Mitsubishi Paper Mills Ltd. (TYO: 3864)
* Nippon Paper Group, Inc. (TYO: 3893)
* Oji Paper Co., Ltd. (TYO: 3861)

Chemicals

* Asahi Kasei Corp. (TYO: 3407)
* Denki Kagaku Kogyo K.K. (TYO: 4061)
* Fujifilm Holdings Corp. (TYO: 4901)
* Kao Corp. (TYO: 4452)
* Mitsubishi Chemical Holdings Corp. (TYO: 4188)
* Mitsui Chemicals, Inc. (TYO: 4183)
* Nippon Kayaku Co., Ltd. (TYO: 4272)
* Nippon Soda Co., Ltd. (TYO: 4041)
* Nissan Chemical Industries, Ltd. (TYO: 4021)
* Shin-Etsu Chemical Co., Ltd. (TYO: 4063)
* Shiseido Co., Ltd. (TYO: 4911)
* Showa Denko K.K. (TYO: 4004)
* Sumitomo Chemical Co., Ltd. (TYO: 4005)
* Toagosei Co., Ltd. (TYO: 4045)
* Tosoh Corp. (TYO: 4042)
* Ube Industries, Ltd. (TYO: 4208)

Pharmaceuticals

* Astellas Pharma Inc. (TYO: 4503)
* Chugai Pharmaceutical Co., Ltd. (TYO: 4519)
* Daiichi Sankyo Co., Ltd. (TYO: 4568)
* Dainippon Sumitomo Pharma Co., Ltd. (TYO: 4506)
* Eisai Co., Ltd. (TYO: 4523)
* Kyowa Hakko Kogyo Co., Ltd. (TYO: 4151)
* Shionogi & Co., Ltd. (TYO: 4507)
* Takeda Pharmaceutical Company, Ltd. (TYO: 4502)

Oil & Coal Products

* Nippon Mining Holdings, Inc. (TYO: 5016)
* Nippon Oil Corp. (TYO: 5001)
* Showa Shell Sekiyu K.K. (TYO: 5002)

Rubber Products

* Bridgestone Corp. (TYO: 5108)
* The Yokohama Rubber Co., Ltd. (TYO: 5101)

Glass & Ceramics

* Asahi Glass Co., Ltd. (TYO: 5201)
* NGK Insulators, Ltd. (TYO: 5333)
* Nippon Sheet Glass Co., Ltd. (TYO: 5202)
* Nitto Boseki Co., Ltd. (TYO: 3110)
* Sumitomo Osaka Cement Co., Ltd. (TYO: 5232)
* Taiheiyo Cement Corp. (TYO: 5233)
* Tokai Carbon Co., Ltd. (TYO: 5301)
* Toto Ltd. (TYO: 5332)

Steel Products

* JFE Holdings, Inc. (TYO: 5411)
* Kobe Steel, Ltd. (TYO: 5406)
* Nippon Steel Corp. (TYO: 5401)
* Sumitomo Metal Industries, Ltd. (TYO: 5405)

Nonferrous Metals

* Dowa Mining Co., Ltd. (TYO: 5714)
* Fujikura Ltd. (TYO: 5803)
* Furukawa Co., Ltd. (TYO: 5715)
* The Furukawa Electric Co., Ltd. (TYO: 5801)
* Mitsubishi Materials Corp. (TYO: 5711)
* Mitsui Mining & Smelting Co., Ltd. (TYO: 5706)
* Nippon Light Metal Co., Ltd (TYO: 5701)
* Sumitomo Electric Industries, Ltd. (TYO: 5802)
* Sumitomo Metal Mining Co., Ltd. (TYO: 5713)
* Toho Zinc Co., Ltd. (TYO: 5707)
* Toyo Seikan Kaisha, Ltd. (TYO: 5901)

Machinery

* Chiyoda Corp. (TYO: 6366)
* Daikin Industries, Ltd. (TYO: 6367)
* Ebara Corp. (TYO: 6361)
* Hitachi Zosen Corp. (TYO: 7004)
* Ishikawajima-Harima Heavy Industries Co., Ltd (TYO: 7013)
* The Japan Steel Works, Ltd. (TYO: 5631)
* JTEKT Corp. (TYO: 6473)
* Komatsu Ltd. (TYO: 6301)
* Kubota Corp. (TYO: 6326)
* Mitsubishi Heavy Industries, Ltd. (TYO: 7011)
* NSK Ltd. (TYO: 6471)
* NTN Corp. (TYO: 6472)
* Okuma Holdings, Inc. (TYO: 6103)
* Sumitomo Heavy Industries, Ltd. (TYO: 6302)

Electric Machinery

* Advantest Corp. (TYO: 6857)
* Alps Electric Co., Ltd. (TYO: 6770)
* Canon Inc. (TYO: 7751)
* Casio Computer Co., Ltd. (TYO: 6952)
* Clarion Co., Ltd. (TYO: 6796)
* Denso Corp. (TYO: 6902)
* Fanuc Ltd. (TYO: 6954)
* Fuji Electric Holdings Co., Ltd. (TYO: 6504)
* Fujitsu Ltd. (TYO: 6702)
* GS Yuasa Battery Ltd. (TYO: 6674)
* Hitachi, Ltd. (TYO: 6501)
* Kyocera Corp. (TYO: 6971)
* Matsushita Electric Industrial Co., Ltd. (TYO: 6752)
* Matsushita Electric Works, Ltd. (TYO: 6991)
* Meidensha Corp. (TYO: 6508)
* Minebea Co., Ltd. (TYO: 6479)
* Mitsubishi Electric Corp. (TYO: 6503)
* Mitsumi Electric Co., Ltd. (TYO: 6767)
* NEC Corporation (TYO: 6701)
* Oki Electric Industry Co., Ltd. (TYO: 6703)
* Pioneer Corporation (TYO: 6773)
* Sanyo Electric Co., Ltd. (TYO: 6764)
* Sharp Corp. (TYO: 6753)
* Sony Corp. (TYO: 6758)
* Taiyo Yuden Co., Ltd. (TYO: 6976)
* TDK Corp. (TYO: 6762)
* Tokyo Electron Ltd. (TYO: 8035)
* Toshiba Corp. (TYO: 6502)
* Yokogawa Electric Corp. (TYO: 6841)

Shipbuilding

* Kawasaki Heavy Industries, Ltd. (TYO: 7012)
* Mitsui Engineering & Shipbuilding Co., Ltd. (TYO: 7003)

Automotive

* Fuji Heavy Industries Ltd. (TYO: 7270)
* Hino Motors, Ltd. (TYO: 7205)
* Honda Motor Co., Ltd. (TYO: 7267)
* Isuzu Motors Ltd. (TYO: 7202)
* Mazda Motor Corp. (TYO: 7261)
* Mitsubishi Motors Corp. (TYO: 7211)
* Nissan Motor Co., Ltd. (TYO: 7201)
* Suzuki Motor Corp. (TYO: 7269)
* Toyota Motor Corp. (TYO: 7203)

Other Transport Equipment

* Topy Industries, Ltd. (TYO: 7231)

Precision Instruments

* Citizen Watch Co., Ltd. (TYO: 7762)
* Konica Minolta Holdings, Inc. (TYO: 4902)
* Nikon Corp. (TYO: 7731)
* Olympus Corp. (TYO: 7733)
* Ricoh Co., Ltd. (TYO: 7752)
* Terumo Corp. (TYO: 4543)

Other Manufacturing

* Dai Nippon Printing Co., Ltd. (TYO: 7912)
* Toppan Printing Co., Ltd. (TYO: 7911)
* Yamaha Corp. (TYO: 7951)

Fishery

* Nippon Suisan Kaisha, Ltd. (TYO: 1332)

Mining

* Inpex Holdings Inc. (TYO: 1605)

Construction

* Comsys Holdings Corp. (TYO: 1721)
* Daiwa House Industry Co., Ltd. (TYO: 1925)
* JGC Corp. (TYO: 1963)
* Kajima Corp. (TYO: 1812)
* Kumagai Gumi Co., Ltd. (TYO: 1861)
* Obayashi Corp. (TYO: 1802)
* Sekisui House, Ltd. (TYO: 1928)
* Shimizu Corp. (TYO: 1803)
* Taisei Corp. (TYO: 1801)

Trading Companies

* Itochu Corp. (TYO: 8001)
* Marubeni Corp. (TYO: 8002)
* Mitsubishi Corp. (TYO: 8058)
* Mitsui & Co., Ltd. (TYO: 8031)
* Sojitz Corp. (TYO: 2768)
* Sumitomo Corp. (TYO: 8053)
* Toyota Tsusho Corp. (TYO: 8015)

Retail

* Aeon Co., Ltd. (TYO: 8267)
* Fast Retailing Co., Ltd. (TYO: 9983)
* Isetan Co., Ltd. (TYO: 8238)
* Marui Co., Ltd. (TYO: 8252)
* Mitsukoshi, Ltd. (TYO: 2779)
* Seven & I Holdings Co., Ltd. (TYO: 3382)
* Takashimaya Co., Ltd. (TYO: 8233)

Banking

* The Bank of Yokohama, Ltd. (TYO: 8332)
* The Chiba Bank, Ltd. (TYO: 8331)
* Mitsubishi UFJ Financial Group, Inc. (TYO: 8306)
* Mitsui Trust Holdings, Inc. (TYO: 8309)
* Mizuho Financial Group, Inc. (TYO: 8411)
* Mizuho Trust & Banking Co., Ltd. (TYO: 8404)
* Resona Holdings, Inc. (TYO: 8308)
* Shinsei Bank, Ltd. (TYO: 8303)
* The Shizuoka Bank, Ltd. (TYO: 8355)
* The Sumitomo Mitsui Financial Group, Inc. (TYO: 8316)
* Sumitomo Trust & Banking Co., Ltd. (TYO: 8403)

Securities

* Daiwa Securities Group Inc. (TYO: 8601)
* Nikko Cordial Corp. (TYO: 8603)
* Nomura Holdings, Inc. (TYO: 8604)
* Shinko Securities Co., Ltd. (TYO: 8606)

Insurance

* Millea Holdings, Inc. (TYO: 8766)
* Mitsui Sumitomo Insurance Co., Ltd. (TYO: 8752)
* Sompo Japan Insurance Inc. (TYO: 8755)
* T&D Holdings, Inc. (TYO: 8795)

Other Financial Services

* Credit Saison Co., Ltd. (TYO: 8253)
* UFJ Nicos Co., Ltd. (TYO: 8583)

Real Estate

* Heiwa Real Estate Co., Ltd. (TYO: 8803)
* Mitsubishi Estate Co., Ltd. (TYO: 8802)
* Mitsui Fudosan Co.,Ltd (TYO: 8801)
* Sumitomo Realty & Development Co., Ltd. (TYO: 8830)
* Tokyu Land Corp. (TYO: 8815)

Railway/Bus

* East Japan Railway Company (TYO: 9020)
* Keio Corp. (TYO: 9008)
* Keisei Electric Railway Co., Ltd. (TYO: 9009)
* Odakyu Electric Railway Co., Ltd. (TYO: 9007)
* Tobu Railway Co., Ltd. (TYO: 9001)
* Tokyu Corp. (TYO: 9005)
* West Japan Railway Company (TYO: 9021)

Other Land Transport

* Nippon Express Co., Ltd. (TYO: 9062)
* Yamato Holdings Co., Ltd. (TYO: 9064)

Marine Transport

* Kawasaki Kisen Kaisha, Ltd. (TYO: 9107)
* Mitsui O.S.K. Lines, Ltd. (TYO: 9104)
* Nippon Yusen K.K. (TYO: 9101)

Air Transport

* All Nippon Airways Co., Ltd. (TYO: 9202)
* Japan Airlines Corp. (TYO: 9205)

Warehousing

* Mitsubishi Logistics Corp. (TYO: 9301)

Communications

* KDDI Corp. (TYO: 9433)
* Nippon Telegraph and Telephone Corp. (TYO: 9432)
* NTT Data Corp. (TYO: 9613)
* NTT DoCoMo, Inc. (TYO: 9437)
* Softbank Corp. (TYO: 9984)

Electric Power

* Chubu Electric Power Co., Inc. (TYO: 9502)
* The Kansai Electric Power Co., Inc. (TYO: 9503)
* The Tokyo Electric Power Co., Inc. (TYO: 9501)

Gas

* Osaka Gas Co., Ltd. (TYO: 9532)
* Tokyo Gas Co., Ltd. (TYO: 9531)

Services

* CSK Holdings Corp. (TYO: 9737)
* Dentsu Inc. (TYO: 4324)
* Konami Corp. (TYO: 9766)
* Secom Co., Ltd. (TYO: 9735)
* Sky Perfect Communications Inc. (TYO: 4795)
* Tokyo Dome Corp. (TYO: 9681)
* Toho Co., Ltd. (TYO: 9602)
* Trend Micro Inc. (TYO: 4704)
* Yahoo Japan Corp. (TYO: 4689)

References

* Nikkei 225 constituents
* Nikkei 225 index on Yahoo! Finance

Retrieved from "http://en.wikipedia.org/wiki/Nikkei_225"

Nikkei 225

Nikkei 225 (日経平均株価, 日経225) is a stock market index for the Tokyo Stock Exchange (TSE). The Nikkei average is the most watched index of Asian stocks. It has been calculated daily by the Nihon Keizai Shimbun (Nikkei) newspaper since 1971. It is a price-weighted average (the unit is Yen), and the components are reviewed once a year.

The Nikkei 225 began to be calculated on September 7, 1950, retroactively calculated back to May 16, 1949.

The Nikkei 225 Futures, introduced at the Osaka Securities Exchange (OSE), Chicago Mercantile Exchange (CME) ,Singapore Exchange (SGX) , is now an internationally recognized futures index.

The Nikkei average hit its all-time high on December 29, 1989 when it reached an intra-day high of 38,957.44 before closing at 38,915.87. Its high for the 21st century stands just above 18,300 points.

Another major index for the Tokyo Stock Exchange is the Topix.

[edit] Weighting and modifications

Stocks are weighted on the Nikkei 225 by giving an equal weighting based on a par value of 50 yen per share. Events such as stock splits, removals and addtions of constituents impact upon the effective weighting of individual stocks and the divisor. The Nikkei 225 is designed to reflect the overall market, so there is no specific weighting of industries.

[edit] Changes to the components

Stocks are reviewed annually and announcements of review results are made in September. Changes, if required, are made at the beginning of October. Changes may also take place at any time if a stock is found to be ineligible for the Stock Average (e.g. delistings, etc.). All proposed changes will be announced in Nikkei's Japanese newspapers and will appear on NNI.

After a stock has been replaced, the divisor is reviewed and modified to ensure a smooth transition of the stock index.

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