Folks, regulated short-selling transacted yesterday at 1,182,000 shares at average price of Rm2.59! Careful now!

WELLINGTON MANAGEMENT COMPANY
Disposed: 29/08/2013 4,224,200
Disposed: 30/08/2013 4,913,500
Acquired: 30/08/2013 6,900
Disposed: 02/09/2013 4,793,000
Disposed: 03/09/2013 1,906,200

Selldown by one of the foreign fund in EMs.
- Not so promising 2QE
- No dividend was declared during the 2QE13
- High jet fuel price
- Weak ringgit

The relatively sharp jump in US interest rates since the beginning of May has taken a toll on the stock market, and analysts see more pain ahead.

As interest rates begin to rise, the allure of these dividend payments starts to fade. Bonds may become relatively more attractive as interest rates start to rise.

Remember folks, foreign funds invest in stock for premium returns plus dividend payments.

1. AmBank Group forex strategist Wong Chee Seng sees a good chance for the ringgit to appreciate in the final lapse of 2014 after the interest rate hiking cycle is likely to start from the second quarter.

2. Wong said Malaysia, responding to the volatility of the ringgit, has raised the prices of subsidised fuels by 15 sen & 20 sen per litre

3. Besides the reschedule of some public projects, the goods and services tax may be announced too in budget 2014.

4. Apart from the post-QE growth momentum easing risks, Wong said to watch out for the likelihood of geopolitical risk either in Asia and/or Middle East and the rate of improvement in Malaysia’s fiscal and debt position.

5. The ringgit, he noted, has been volatile so far this year and rose 7.4 per cent to a peak of 10.70 per cent in June and has remained elevated above 9.50 per cent since then.

6. He expects the ringgit to test an extreme range of high of 3.370 in the third quarter this year with a low of 3.073.

7. The ringgit is likely to trade at 3.216 on average with the likelihood of hitting 3.355 at the end of the third quarter of this year.

Read more: Ringgit to stabilise next year http://www.btimes.com.my/Current_News/BTIMES/articles/20130905003807/Article/#ixzz2e4rKpYiV

When investing do a bit research on what will break a company that you invested. A weak ringgit? A high jet fuel price? Interest rate hikes by US/BNM? etc?

A small leak will sink a Great ship! Investors have short memories!

Bank Negara Malaysia, as expected, left borrowing costs unchanged at its Monetary Policy Committee meeting yesterday - unchanged since July 2011.

AmResearch expects the OPR to be hiked by 25 basis points in the second half of next year on higher cost pressure, which will prolong the negative real interest rate environment. She also expects QE tapering by the Fed to continue to weaken the ringgit due to the heavy outflow of foreign funds.

Folks, interest rate hikes and weak ringgit are good for the market what to say AA. For every 1% change in US dollar, impacts on AA group earnings is 4%. So how?

The ringgit opened marginally lower against the US dollar in early trading today on lack of buying support amid the strong dollar in the global market, currency dealers said.

The ringgit was quoted at 3.3115/3145 to a US dollar from yesterday's close at 3.3030/3070.

How will the ringgit close today? Remember folks, Malaysia is one of the EMs!

D7 0171 05/09/2013 10:30 PM JEDDAH-KUALA LUMPUR CANCELLED
D7 0393 05/09/2013 08:00 PM WUHAN-KUALA LUMPUR CANCELLED
AK 5213 05/09/2013 07:20 PM KUCHING-KUALA LUMPUR CANCELLED
D7 0303 05/09/2013 07:15 PM HANGZHOU-KUALA LUMPUR CANCELLED
AK 5113 05/09/2013 06:15 PM K. KINABALU-KUALA LUMPUR CANCELLED
QZ 8162 05/09/2013 04:15 PM JAKARTA-KUALA LUMPUR CANCELLED
AK 5233 05/09/2013 01:40 PM KUCHING-KUALA LUMPUR CANCELLED
AK 1343 05/09/2013 12:55 PM PEKANBARU-KUALA LUMPUR CANCELLED

AK 1440 05/09/2013 06:30 PM KUALA LUMPUR-HANOI CANCELLED
QZ 8163 05/09/2013 04:40 PM KUALA LUMPUR-JAKARTA CANCELLED
AK 5212 05/09/2013 03:25 PM KUALA LUMPUR-KUCHING CANCELLED
AK 5210 05/09/2013 02:05 PM KUALA LUMPUR-KUCHING CANCELLED
AK 5112 05/09/2013 12:45 PM KUALA LUMPUR-K. KINABALU CANCELLED
AK 1342 05/09/2013 10:50 AM KUALA LUMPUR-PEKANBARU CANCELLED

View here: http://flight.klia.com.my/fids.aspx

Hope everyone is happy today. Remember folks today is the last trading day for the week. With a lot of bad news for EMs, will the market hold?

Hmmmmm......time will tell! Heheheheheh!!

Good morning, folks!

Folks, another selling pressure coming from foreign funds is in the making! Just wait & see in the coming days! Careful now!

The ringgit ended lower against the US dollar today amid strong demand for the greenback on the global market.

The ringgit was quoted at 3.3030/3070 to the US dollar from yesterday's close at 3.2830/2860.

The local unit and other regional currencies were under pressure as investors were concerned over the continued outflow of foreign capital from the emerging. Meanwhile, the ringgit was traded lower against all other major currencies.

In the morning session ringgit was higher but ended lower upon closing. Careful now folks as foreign funds are still active selling theirs holding. What tomorrow hold for AA? Testing the support level of a year low at rm2.44?

Will EPF continue buying & supporting or buying later at a lower price? Without EPF active supporting the fall, AA would be trading at a much lower price.

Remember folks, investors have short memories!

During today morning session this thread was active like the share price itself but as the share price retreat the same goes to the posting. Heheheheheheheh!!!

When the share is bullish everyone become instant genius but when the share turn bearish suddenly the genius disappeared. Ever wonder why folks? Hahahahaha!,

Anyway kudos to Karin & SJaladdin for being around during bad & good times! All the best!

The 2nd highest volume transacted today after the 2QE13 announcement! What will friday hold for AA? Careful now!

Wakakakakakakakkakakak!!

Price Performamce:

1 month:
(28/08/13) Rm2.44 - Low
(06/08/13) Rm3.22 - High

6 months:
(28/08/13) Rm2.44 - Low
(05/06/13) Rm3.54 - High

One Year:
(28/08/13) Rm2.44 - Low
(05/06/13) Rm3.54 - High

Price of aviation jet fuel 30/08/13 for Asia & Oceania region:
1. Price: USD128.40
2. Price vs. 1 week ago - up 3.0%
3. Price vs. 1 mnth ago - up 5.4%

For every 1% change in US dollar, impacts on AA group earnings is +4%. So what about a 3% increase in jet fuel price?

Selldown in EMs in the making? Remember folks as 51.92% of AA were held by foreigners.

Investors have short memories! Heheheheheheheh!!

Shares in Ryanair suffered their biggest drop in four years Wednesday after Europe’s top budget airline issued a rare profit warning due to low autumn ticket sales that reflected the weak economy and aggressive competition.

Chief Executive Michael O’Leary said his Dublin-based airline, which typically exceeds its profit forecasts, now expects to fall short of its previous 2014 outlook and might not reach its minimum sales target of 751 million US dollar for the fiscal year ending in March.

The company’s shares fell nearly 15 percent a five-month low and their biggest drop since October 2009 as analysts expecting Ryanair to eclipse 600 million euros in profit warned that the airline now looked overvalued.

Ryanair last issued a profit warning in 2004. What about airlines in the EMs? So hoe now?

Investors have short memories! Careful now!

Force selling or profit taking? Well don't worry as EPF will buy & support the price. But till when? Hmmmmmmmmmmmm....!!

01/09/13 - Vol: 8,620,400 (closwed:2.59)
30/08/13 - Vol: 15,581,100 (closed:2.58)
29/08/13 - Vol: 18,939,300 (closed:2.51)
28/08/13 - Vol: 17,100,400 (closed:2.45)

1. Fuel prices have climbed while the 20% depreciation of the rupee this year has also hurt India's airlines, who pay in dollars for aircraft leases, engines and spare parts.

2. Although global crude prices haven’t touched 2008 levels, fuel has become more expensive for India’s airlines. Domestic airfares have risen beyond the peak seen in 2008 when oil prices were surging. That year, oil had soared to $140 per barrel.

3. India's airlines have increased the fares in the first week of September this year and expect fares to move much higher, going forward.

4. The revision in fares as costs, ranging from fuel and aircraft lease rentals to engineering maintenance and spares, are largely influenced by or denominated in US dollars, which has moved up sharply in the past few months. The hike in fares was therefore inevitable and effected with the sole objective of recovering the increasing costs of doing business.

5. The impact of high fares will be that some discretionary travel will be reduced and some passengers may switch to trains. There could be some fall in demand due to these changes.

So folks, will airlines in Malaysia, Indonesia & other EMs be any different? Anyone? Hahahahahahahahah!!

Oil prices rose in Asian trade Thursday as US President Barack Obama cleared the first legislative hurdle in his race to win congressional backing for military strikes on Syria.

New York's main contract, West Texas Intermediate for delivery in October, gained 30 cents to US$107.53 in mid-morning trade, while Brent North Sea crude for October gained 19 cents to US$115.10.

This has raised concerns that the unrest may spread in the Middle East region, which accounts for a third of the world's crude, and disrupts oil supplies.

Chua Hak Bin, South-East Asian economist at Bank of America Merrill Lynch in Singapore, said high oil prices could hurt economic growth.

"An oil price surge comes at a particularly bad time, when several Asian countries - particularly India and Indonesia - are already facing pressures from high inflation, large fuel subsidies, and widening oil-trade deficits," he said in a note.

Jet fuel price for Asia & Oceania region dated 30/8/13 was at 128.40 US dollar. So what is the current price for jet fuel? Anyone,up or down? Investors have short memories!! Heheheheheheheh!!

Price of aviation jet fuel 30/08/13 for Asia & Oceania region:
1. Price: USD128.40
2. Price vs. 1 week ago - up 3.0%
3. Price vs. 1 mnth ago - up 5.4%

For every 1% change in US dollar, impacts on AA group earnings is +4%. So what about a 3% increase in jet fuel price? Will this increase the yeild? Anyone? Hahahahahahahahahaha!!

Fed tapering of asset purchases may trigger exchange rate and financial market overshooting in emerging market economies, while EMs are trying to cope with rising domestic vulnerabilities and slower growth!

Folks, downside risks remain and some have become more prominent. Investors have short memories!!

Tightening global financial conditions, spurred by market conviction that the US Federal Reserve is close to reeling back its stimulus programme, have added to the pressure on emerging economies.

Since May, when the Fed began signalling it would taper its $85 billion a month bond-buying program if the US economy continued to improve broadly, investors have pulled out of emerging economies seeking higher returns in the US and elsewhere.

The outflow of capital has driven emerging-market currencies sharply lower, from Brazil to Asia and Turkey.

Emerging economies were hardest hit following Fed 'tapering' remarks," the IMF said, adding that external financing pressures remained heightened in Brazil, India, Indonesia, Turkey and South Africa.

So would Malaysia be spared from this hot money selldown? Remember folks, 51.92% of AA were held by foreigners. EPF is the only keen buyer even after the not so promising 2QE13 announcement while foreign funds on the other hand are keen sellers.

Will EPF continue to buy & support AA at current price or let MR. Market determine the price & buy back later at a much more lower price? Hmmmmmmmmmmmm.......!! Anyone?

Since its july report on global developments and risks, the IMF said, growth projections for emerging economies are being revised downward "with risks still to the downside."

"The impulse to global growth is expected to come mainly from the United States in the near term," the report said. "Overall, concerns about a prolonged period of sluggish global growth (a plausible downside scenario) remain elevated."

So folks, will AA be able to steer out of the turmoil in the EMs? Weak currency! Jet fuel price & interest rate hike! Dominated debt in US dollar! Stiff competition! Anymore to add folks? Wakakakakakakak!!

The International Monetary Fund warned the Group of 20 on Wednesday that emerging economies were slowing more than expected and under pressure from US plans to slow its stimulus.

The IMF said that recent indicators pointed to stronger growth in several advanced countries, but key emerging economies have slowed!

Careful now!

1. During the recently concluded results season, there were some earnings disappointments from aviation. Malaysian carriers saw yields compress due to intense competition.

2. In 2QFY13, the yields of the airlines dipped. MAS suffered the biggest drop as its yield fell by 10.6% YTD due to intensifying domestic competition, with the emergence of Malindo Air and new foreign carriers, coupled with uncertainty over the date for Malaysia’s general election. AirAsia’s yield also declined by 2.7% YTD.

So how?

1. The airlines we cover generally saw a seasonally weaker 2Q as loads weakened owing to lower-than-expected demand amid aggressive capacity expansion.

2. Among the carriers that saw improved loads q-o-q: MAS, Garuda and AirAsia - yields were sacrificed to boost passenger volume.

3. All carriers except Thai Airways and AA X saw double-digit growth YTD in 1HFY13 in terms of available seat kilometer (ASK) and revenue passenger kilometer (RPK).

4. THAI increased its RPK by just 6.2% YTD due to the weak recovery in its long-haul destinations while AAX’s RPK dipped slightly, but this was somewhat distorted as the airline was still serving the routes before these were fully discontinued.

So what will the 2H13 be for airlines in EMs? Will they survive the turmoil ongoing now? Just wait & see! Careful now!

QZ 8457 04/09/2013 10:25 PM BANDUNG-KUALA LUMPUR CANCELLED
QZ 8295 04/09/2013 09:20 PM SURABAYA-KUALA LUMPUR CANCELLED
QZ 8206 04/09/2013 07:35 PM JAKARTA-KUALA LUMPUR CANCELLED

QZ 8458 04/09/2013 10:50 PM KUALA LUMPUR-BANDUNG CANCELLED
QZ 8296 04/09/2013 09:45 PM KUALA LUMPUR-SURABAYA CANCELLED
QZ 8207 04/09/2013 08:20 PM KUALA LUMPUR-JAKARTA CANCELLED
AK 1342 04/09/2013 10:50 AM KUALA LUMPUR-PEKANBARU CANCELLED
D7 0236 04/09/2013 12:05 AM KUALA LUMPUR-PERTH CANCELLED

View here: http://flight.klia.com.my/fids.aspx

Careful now, folks!

Weak ringgit, high jet fuel price, selldown in EMs, spike in US interest rate, more supply (seat) than demand, intensifying competition, hugh debt mostly in US dollar, hugh outsatnding aircraft order, etc......

Folks, forward loads in Malaysia for the remaining months of the 3Q13 are lower than in the prior year with base fares slightly lower than the prior year.

Seat oversupply with low demand maybe the caused of flight cancellation thus affecting revenue?

The long term outlook depend on how AA navigate & sustain itself out of the turbulence time into a clearer sky.

But the near term outlook may not be very promising! Remember folks, a small leak can sink a great ship!!

THE government is mulling the reintroduction of RON92 petrol to give motorists more options in getting affordable fuel.

The move came following measures to be introduced by the government as it drew up strategies to ease the burden of the middle-income group in the 2014 Budget on Oct 25.

Flip & flop again, folks? Hahahahahahahah!! Read more: http://www.nst.com.my/nation/general/govt-may-bring-back-ron92-1.348858#ixzz2dvWQiHUX

Ryanair slumped 14 percent to 5.84 euros. The Dublin-based company said that full-year net income may fall short of its forecast. CEO Michael O’Leary said greater competition on prices and increased capacity had contributed to lower fares in September, October and November.

EasyJet, Europe’s second-biggest discount airline, sank 7.1 percent to 1,189 pence. An index of travel and leisure companies lost 2.5 percent, the largest decline of the 19 industry groups in the Stoxx 600.

What next? Guess who? Hahahahahahahahah!!

Talk of scaling back the Federal Reserve's asset purchases has caused money to pour back into the U.S., leading to a "cry" from emerging markets, Angel Gurria, the Secretary General of the Organisation for Economic Co-operation and Development (OECD).

The organization warned on Tuesday that the global economic recovery is at risk of being derailed if the "unconventional" monetary policies, which have injected cheap loans into the financial system, are not maintained.

Though major developed economies are picking up, the OECD warned that a slowdown in many emerging countries was likely to weigh on broader global growth.

"There's this outflow coming back and there's structural reforms that have not been taken in many countries. So money is coming back and now there are cries of concern and saying 'please let's coordinate'," Gurria said.

So AA will be spared from the turmoil in EMs? To the hardcore supporters and those stuck at high prices, the answer is "Yes" while to the rational thinking person the answer is "No way"! Time will tell! Hahahahahah!!

The leading accountancy and finance body has warned that increased yields in the US, following the market pricing in the Fed’s tighter stance, may well mean reduced capital flows to ASEAN.

According to the report, annual growth in loans throughout the region is expected to fall from 2012 to 2015.

Cheap money from the Fed’s exceptionally loose monetary policies has previously helped companies and governments to borrow easily, funding infrastructure and business projects.

This has also led to high inflation rates, property prices and impressive though unsustainable gains in local stock markets

Both companies and individuals in the region have benefited from low interest rates, which has fuelled consumption and borrowing against future income.

So will AA be spared from the turmoil in the EMs? Investors have short memories!

Folks, the ringgit was traded weaker against the US dollar in the early session today on lack of buying interest which saw the local currency trading towards 3.30 level.

At 9.20am, the ringgit was quoted at 3.3040/3070 to a US dollar from yesterday's close at 3.2850/2880.

The ringgit's performance was in line with the Indonesian rupiah and Indian rupee which are currently on a volatile period affected by the slowdown in global trade

Weak ringgit & rupiah meaning jet fuel getting more expensive. Investors have short memories!!

Oil will remain firm because of risks to supply from other oil producers: Iran is not coming back quickly, there are issues with Libya and tensions in the Middle East North Africa area will keep oil firm.

Oil at $125 a barrel would be a significant headwind for the already fragile global economy, causing a lot of problems.

Last week, Societe Generale analysts laid out a case for Brent to spike to $150 a barrel temporarily if Syria's supporters seek to punish the U.S. and its allies for a military strike, a development many industry watchers see as a worst case scenario.

Last week U.S. crude reached its highest level in over two years, while Brent crude moved to its highest level since February.

They have since pulled back; on Wednesday, Brent traded at $115.77 a barrel at mid-morning in Asia, while WTI traded at $108.29 a barre.

Well folks, a trend reversal (uptrend) so soon? Remember folks, foreign funds are disposing their shares in EMs! Wakakakakakakak!!

Uncertainty over rising tensions in Syria has driven oil prices to fresh highs in recent weeks, but analysts say the bullish sentiment is expected to stay regardless of whether or not the scenario escalates into a full blown war.

Libya's oil production has fallen to about one sixth of its pre-2011 civil war levels in recent weeks due to a month-long disruption by armed security guards who shut the country's main export ports.

Meanwhile an attack on a ship passing through the Suez Canal over the weekend has flagged continued geopolitical risk in Egypt.

1. Finally, there's interest rates folks! The Federal Reserve has been buying bonds to keep long-term interest rates low.

2. Low rates make stocks look more attractive than bonds or money market funds. The Fed's policy also keeps mortgage rates low, allowing homeowners to refinance their mortgages and reduce their monthly payments.

3. The Fed can't keep buying bonds forever, and sooner or later, it'll have to ease up on the monetary gas pedal.

4. When it does, the stock market will react in much the same way you would if you found your grandmother in 47 pickle jars.

5. The question, then, is what an investor should do about all these potential horrors. The alternatives aren't appealing

• Money funds or Treasury bills. Money funds invest in short-term, high-quality instruments and try to keep their share price at $1. The average money fund yields 0.01%, according to iMoneyNet, which means that you'll double your money in 7,200 years.

• Treasury notes or bonds. Barring a default — see above — Treasury notes and bonds are considered the safest investment in the world, if your goal is to get your principal back with interest. But a 10-year T-note yields all of 2.76%, which probably won't beat inflation in the long run.

• Gold. The yellow metal is hardly a safe haven, although it can be handy if the government collapses and you need to vamoose. At this point, however, it's about 40% cheaper than it was at its most recent peak, so it's mildly attractive as a short-term hedge against global unrest.

The drawback with nearly all safe havens, however, is that most aren't great long-term investments. You typically get higher long-term returns because you take on higher risk.

So how now?

What else is in our closet of anxieties? Well folks, there's the threat that strikes in Syria could lead to wider conflict which could, potentially, restrict the flow of oil to the U.S. Oil has already crept to near USD110 a barrel because of uncertainty about the Middle East.

In an economy (US) where raises are few and jobs are hard to find, higher gas prices mean people have to cut back on spending elsewhere, slowing the economy further.

For those who worry about government expenditures, war is always costly. The U.S. and Britain fired about 161 cruise missiles into Libya to pave the way for warplanes.

Those missiles cost about USD1.4 million each meaning the barrage cost about a quarter of a billion dollars in hardware alone not counting the cost of other military operations at the time. A no-fly zone over Syria would cost about $1 billion a month.

Investors have short memories!!

Employees Provident Fund Board:
Shares held: 29/09/13 270,084,900 (9.71%)
Shares held: 16/08/13 245,363,400 (8.83%)

Acquired 29/08/2013 2,000,000 (rm2.51)
Acquired 29/08/2013 400,000
Acquired 29/08/2013 700,100
Acquired 28/08/2013 3,000,000 (rm2.45)
Acquired 28/08/2013 610,400
Acquired 27/08/2013 851,200 (rm2.64)
Acquired 26/08/2013 2,000,000 (rm2.68)
Acquired 23/08/2013 4,000,000 (rm2.70)
Acquired 23/08/2013 960,100
Acquired 22/08/2013 2,433,900 (rm2.80)
Disposed 22/08/2013 3,000,000
Acquired 22/08/2013 1,276,200
Acquired 21/08/2013 3,053,600 (rm3.00)
Disposed 21/08/2013 25,700
Acquired 20/08/2013 4,965,000 (rm3.08)
Disposed 20/08/2013 1,333,700

EPF buying more to beef up the share price for others to follow? Herd mentality? Investors have short memories!! More selloff by foreign funds in EMs for the coming days! Careful now!

But wait! There's more. In October, the U.S. will hit its debt limit, triggering a debate seriously about whether the US should pay its honest debts.

The debt limit pertains to money that Congress has already authorized to be spent, everything from Social Security payments to interest and principal on Treasury securities.

The alternative to raising the debt limit is default not just to the nation's bondholders, but to retirees and veterans, as well.

People who think that default won't hurt the economy are the kinds of people who head into the basement to find out why the furnace is chuckling.

The last time the US grappled with this question led to the first downgrade of U.S. Treasury debt in history.

Investors have short memories!! Hahahahahahahaha!!

But there are plenty of other things to worry about, too. For example, emerging markets have been clobbered this year, and they're not getting much better.

India's stock market has fallen 17% in August alone, and Indonesia has swooned 19.6%. India's currency, the rupee, has fallen about 22% this month.

The last time emerging markets have plunged like this, in 1998, the Dow Jones industrial average fell 19% in less than two months. So will history repeat itself?

Will AA survive the turmoil in EMs? Well folks, only time will tell! Heheheheheheh!!

Make no mistake: Investors have plenty to worry.

There's the historical record, of course. Some of the worst market crashes have occurred in September and October. September remains the worst month for investing, folks!

The market is contending with several scary scenarios that have put a serious crimp in the stock rally (U.S. could carry out military strikes on Syria combined with renewed pessimism about the US debt ceiling)

Concerns about the debt ceiling came to the fore on Tuesday, when Treasury Secretary Jack Lew wrote a letter to congressional leaders saying that the U.S. will hit it in mid-October.

When that happens, the government will not be able to issue more debt without authorization from Congress.

And given how divisive that body has become, even another short-term authorization to keep the government functioning is not counted as a sure thing.

But the market's biggest problem is slow growth and that is the reason Treasury yields rising.

"I think rates are going to rally, but they are going to rally on the back of a weakening economy, and economy that's not growing very fast, rather than the debt ceiling or Syria," said Memani, who manages $80 billion in assets.

There is always a lot of big talk ahead of these increasingly common Washington crises, but the problem is, the market listens to it.

So over the next few months, expect larger swings in the markets, and don't be surprised if the direction becomes increasingly hard to gauge.

So folks what does this all mean for traders and investors? My piece of advice: Keep your stops tight! It doesn't matter if you're bullish or bearish; big swings could end up costing you big money.

To minimize the effects of fall volatility, you have to manage your positions effectively.

Remember folks, AA growth and connectivity go hand in hand with world/Asia economy growth. The recent turmoil in EMs would hurt AA fast expansion & hugh planes order! So how?

Folks, one thing is becoming clear at the end of August: The summer doldrums are over, and volatility is increasing big time.

It's not only the situation in Syria that is causing the increase in volatility. Congress is coming back, and that means the debate over the debt ceiling will heat up.

US Treasury Secretary Jack Lew said that if Congress doesn't act, the U.S. will reach the debt limit in mid-October. President Barack Obama will not negotiate over the debt limit. Hmmmmmmmm.....what next for EMs?

The Bottom Line: “Economic growth and connectivity go hand in hand.

Indeed, connectivity creates jobs and supports growth. So it is for good reason that the long-term sustainability of aviation will be high on the agenda when governments meet in Montreal at the end of this month for the 38th Assembly of the International Civil Aviation Organization (ICAO).

There you go, folks! Would AA, MAS, Lion, Firefly, Malindo, etc be a profitable airlines with turnmoil in the EMs? You tell me, folks!

Domestic Passenger Markets

With the exception of Brazil all domestic markets experienced demand growth in July, but rates among countries varied significantly. Total traffic climbed 4.8% but this was exceeded by a 5.8% rise in capacity and load factor slipped to 82%.

• China’s domestic traffic climbed 10.7% compared to July 2012. Although this was second best, it reflected a slowdown from the 14.5% year-over-year growth recorded in June and suggests China’s air travel market may be showing its first signs of weakness. Capacity rose 14.3%, and load factor fell 2.6 percentage points to 80.9%.

• Indian domestic traffic was up 6.0% in July year-on-year, reversing the 2.4% decline in June. Continuing volatility over recent months has made it difficult to establish a clear growth trend. Capacity rose 4.9%, and load factor climbed 0.7 percentage points to 69.3%

• Australian domestic air travel increased 4.5% in July compared to a year ago, slightly up on growth of 3.7% in June but below the 5%-plus growth rate of 2012. This slower pace is expected to continue in line with downward revisions to GDP growth owing to tepid performance of major trading partners China and India. Capacity rose 1.8%.

Will the current turnmoil in the EMs added with weak currencies & high jet fuel price affect AA? Hmmmmm....time will tell! Hahahahahahah!!

International Passenger Markets

Asia-Pacific carriers’ July traffic was up 6.3% on a year ago. Capacity rose 6.6% and load factor dipped 0.2 points to 79.5%.

The support for growth at this rate is weakening. The region’s largest economy—China—continued to decelerate in the second quarter.

With trade volumes in emerging Asian markets shrinking by almost 5% over the first half of the year, the softness is not isolated to China. In particular, India’s near term growth prospects are looking bleak.

For the year we would expect performance to even-out around the 4.1% growth achieved year-to-date.

“Passenger demand continues to be strong. But the story of emerging markets driving growth as developed economies stagnate could be shifting. We are still expecting growth of 5% this year. How that growth is achieved, however, appears to be at a turning point,” said Tony Tyler, IATA’s Director General and CEO.

“The emergence of the Eurozone from an 18-month recession provided the biggest boost to traffic over recent months. In contrast, the deceleration of the Chinese economy has been a dampener on air travel, with weakness showing up throughout emerging Asian markets.

Will the current turnmoil in the EMs added with weak currencies & high jet fuel price affect AA? Hmmmmm....folks, you tell me! Hahahahahahah!!

European Air Traffic Recovers, As Asia Weakens: By Dow Jones Business News, September 03, 2013

European air traffic is picking up the slack in China and other emerging Asian markets and contributing to solid global growth, the International Air Transport Association, or IATA, said Tuesday.

Overall revenue passenger kilometers, a key measure, were up 5% in July year-on-year while capacity was up 5.5%, said the industry body. Load factor, the percentage of filled seats on planes, fell just 0.4% to 82.4%

"The story of emerging markets driving growth as developed economies stagnate could be shifting," said Tony Tyler, IATA's chief executive officer.

"The emergence of the euro zone from an 18-month recession provided the biggest boost to traffic over recent months. In contrast, the deceleration of the Chinese economy has been a dampener on air travel, with weakness showing up throughout emerging Asian markets," Mr. Tyler said.

Remember folks, if Larry Summers replaces Ben Bernanke, whose second term as Fed chairman expires in January, any scaling back in the central bank's asset-purchase program would be ramped up by the hawkish Summers and deal a further blow to battered emerging markets.

Larry Summers is not an advocate of quantitative easing and the reality is that all things being equal, he will unwind QE fast!

So Larry Summers the next big risk for emerging markets? Time will tell! Hahahahahahah!!