Saturday, December 2nd, 2017

 

Iran signs €720m rail deal with South Korea firm

TEHRAN, Dec 2 ―  South Korea’s Hyundai Rotem signed a €720-million (RM3.5 billion) deal with Iran today to manufacture 450 railbuses for suburban trains, Iranian state media reported. The deal was signed in Tehran between Hyundai Rotem, a…


Infosys appoints Salil Parekh as CEO

NEW DELHI, Dec 2 ― Indian IT giant Infosys today named outsider Salil Satish Parekh as chief executive, months after its top boss quit following a showdown with its founders. Parekh, an executive at French consultancy firm Capgemini, will…


Adidas expects big boost from football World Cup

BERLIN, Dec 2 ― Adidas expects a big increase in sales of football jerseys from the 2018 World Cup in Russia helped by its sponsorship of three of the top teams, the German sportswear maker’s chief executive was quoted as saying today. “In…


Adidas expects big boost from soccer World Cup

BERLIN, Dec 2 ― Adidas expects a big increase in sales of soccer jerseys from the 2018 World Cup in Russia helped by its sponsorship of three of the top teams, the German sportswear maker’s chief executive was quoted as saying today. “In…


US Senate tax bill accomplishes major Obamacare repeal goal

WASHINGTON, Dec 2 ― The sweeping tax overhaul that passed the US Senate today contains the Republicans’ biggest blow yet to former President Barack Obama’s healthcare law, repealing the requirement that all Americans obtain health insurance….


China in ‘final sprint’ to introduce crude oil futures

SHANGHAI, Dec 2 ― China is in the final stages of preparation to launch crude oil futures, the vice-chairman of the country’s securities regulator said today. “After years of preparation, crude oil futures are in the final sprint before…


Strong euro slams stocks, Dow and dollar hit by Flynn plea

LONDON: Eurozone stocks slid Friday on the strong euro while the Dow turned lower after news a former senior advisor to US President Donald Trump pleaded guilty to lying to the FBI as part of the Russia probe.

As the euro pushed higher, leading eurozone indices slumped following the recent run higher for the single currency.

Eurozone “equity markets are paying the price” for the area's recovery, said David Madden, market analyst at CMC Markets UK.

“Ultimately a stronger economy often translates into a stronger stock market, but for now the rally in the euro is holding them back” as current single currency valuations hurt the share prices of eurozone exporters.

Frankfurt stocks fell 1.3% and Paris 1.0%.

Madden added that sterling had been hit by profit-taking.

“Optimism surrounding the Brexit talks pushed the pound to a two-year high versus the US dollar yesterday, and now we are seeing a pullback,” he said.

The weak pound helped push London's blue-chip FTSE 100 index to small gains for much of the afternoon, but it turned back lower when the pound recovered somewhat as the dollar weakened. The FTSE 100 finished the day down 0.4%.

The Dow climbed at the open of trading from a record close on Thursday despite renewed concern about the fate of US President Donald Trump's much-hyped tax cut plans.

But it turned lower after former national security advisor Michael Flynn pleaded guilty Friday to lying over his contacts with Russia, in a dramatic escalation of the FBI's probe into possible collusion between the Trump campaign and Moscow.

Leading news commentators said the Flynn developments bring the probe closer to Trump and his family.

Traders were grappling with the rush of news.

“The market is thinking there is probably more in this story,” said Art Hogan of Wunderlich Securities. “The reaction of the market is logical with what is happening.”

Meanwhile there was still uncertainty whether Republicans in the Senate had enough votes to back controversial tax cuts.

A new projection showing the measure would add US$1 trillion (RM4.09 trillion) to the federal deficit, complicating Trump's argument the cuts would pay for themselves forced discussions into Friday.

Global equities have rallied this year on hopes for Trump's market-friendly promises of tax cuts, infrastructure spending and deregulation, but analysts warn of a sharp sell-off if the plans fall flat.

In Asia on Friday, Tokyo's main stocks index ended 0.4% higher, back near 25-year peaks after reversing early losses thanks to a weaker yen.

Oil prices climbed a day after OPEC and Russia agreed to extend a cap on oil output by nine months until the end of next year.

The aim is to reduce a global excess in supply that has pushed oil prices lower and left a huge hole in the finances of producer nations, despite making life easier for buyers of crude.

Key figures around 1630 GMT

London – FTSE 100: DOWN 0.4% at 7,300.49 points (close)

Frankfurt – DAX 30: DOWN 1.3% at 12,861.49 (close)

Paris – CAC 40: DOWN 1.0% at 5,316.89 (close)

EURO STOXX 50: DOWN 1.2% at 3,527.30

New York – DOW: DOWN 1.2% at 23,988.69

Tokyo – Nikkei 225: UP 0.4% at 22,819.03 (close)

Hong Kong – Hang Seng: DOWN 0.4 percent at 29,074.24 (close)

Shanghai – Composite: FLAT at 3,317.62 (close)

Euro/dollar: UP at US$1.1932 from US$1.1900 at 2150 GMT

Pound/dollar: DOWN at US$1.3510 from US$1.3536

Dollar/yen: UP at 111.52 yen from 112.57 yen

Oil – Brent North Sea: UP US$1.30 at US$63.93 per barrel

Oil – West Texas Intermediate: UP US$1.07 at US$58.47

— AFP

* USD$1 = RM4.09


US agency gives green light to bitcoin on major exchanges

NEW YORK: A US regulator cleared the way Friday for bitcoin futures to trade on major exchanges, but warned investors the digital currency is prone to elevated risk and volatility.

The decision opens the door for the Chicago Mercantile Exchange and CBOE Futures Exchange to offer contracts for futures of the virtual currency, rather than trading the actual currency.

The deal with the Commodities and Futures Trading Commission agency also enables Cantor Exchange to offer bitcoin options, another type of derivative contract, which allows for trading without taking ownership of an underlying asset.

CFTC chair J. Christopher Giancarlo said after “extensive discussions with the exchanges” they “agreed to significant enhancements to protect customers and maintain orderly markets.”

The agency said the exchanges agreed to modify the derivatives contracts and promised to coordinate with the CFTC and each other to guard against market manipulation and other irregularities.

“Bitcoin, a virtual currency, is a commodity unlike any the Commission has dealt with in the past,” he said in a statement, warning that “investors should be aware of the potentially high level of volatility and risk in trading these contracts.”

The agreement with the exchanges does not mean the CFTC endorses the digital currency or the various trading products, he said.

The announcement comes a day after a Federal Reserve governor Randal Quarles, the Fed's vice chair of banking regulation, warned that digital currencies like bitcoin could pose a threat to financial stability as they gain wider use because of the uncertainty of how they would fare during a crisis.

Bitcoin prices shot above US$10,000 for the first time earlier this week and stood at US$10,648 at midday Friday. — AFP

* US$1 = RM4.09


Wall Street dips as tax cut progress limits Flynn worries

NEW YORK: Wall Street finished the week on a tumultuous note Friday, with stocks tumbling after a former top aide to President Donald Trump pleaded guilty to lying to the FBI, and then bouncing back as a massive tax cut neared passage.

All three major indices declined, but ended well above session lows, boosted by statements by Senate Republican leaders that key tax-cut holdouts were falling into line following concessions. The dollar also briefly swooned but later recovered.

The rocky session in New York came as bourses in Paris and Frankfurt dropped on worries about a strengthening euro and as oil prices gained.

US stocks opened in negative territory after record finishes on Thursday, but the losses deepened on news that Trump campaign aide and former White House National Security Advisor Michael Flynn pleaded guilty in the probe of possible collusion between the Trump campaign and Moscow.

Leading news commentators said the Flynn developments bring the probe closer to Trump and his family.

A tweet from leading ABC News reporter Brian Ross said Flynn was prepared to testify that as a candidate Trump “directed him to make contact with the Russians.”

'A lot of noise'

But buyers soon returned to the stock market as more Republicans endorsed the tax cut.

The Dow Jones Industrial Average finished the week down 0.2% at 24,231.59, recovering before the close from the session low after diving more than 350 points. It also closed out the best week of 2017 for the blue-chip index.

The Flynn news was “a lot of noise that mattered little to the market,” said JJ Kinahan, chief market strategist at TD Ameritrade.

“The Flynn stuff, we've seen this in previous administrations. It tends to be very entertaining TV, but until something actually comes of it, the market usually discounts it unless it hurts the agenda,” he said. “This one looks like it may not.”

Phil Davis of PSW Investments said, “As long as investors think tax cuts are going to be applied they won't sell. The Republicans and the traders are in complete denial of what is happening.”

In contrast, the Eurasia Group, a political risk consultancy, said the tax proposal was in good shape, but that the Flynn plea was “the worst news yet from the Russia probe for Trump.”

“This news will further weaken Trump politically outside his base and distract Congress, making it more difficult for him to advance his domestic priorities in 2018,” Eurasia Group said in an analysis. “We still believe tax reform is a done deal, but the cloud is darkening on further legislation.”

In other markets, oil prices advanced in something of a delayed reaction to Thursday's OPEC decision to extend production cuts.

Frankfurt stocks fell 1.3% and Paris 1.0%, buffeted by a strengthening euro in the wake of better economic data.

Eurozone “equity markets are paying the price” for the area's recovery, said David Madden, market analyst at CMC Markets UK.

“Ultimately a stronger economy often translates into a stronger stock market, but for now the rally in the euro is holding them back” as current single currency valuations hurt the share prices of eurozone exporters.

Key figures around 2200 GMT

New York – DOW: DOWN 0.2% at 24,231.59 (close)

New York – S&P 500: DOWN 0.2% at 2,642.22 (close)

New York – Nasdaq: DOWN 0.4% at 6,847.59 (close)

London – FTSE 100: DOWN 0.4% at 7,300.49 points (close)

Frankfurt – DAX 30: DOWN 1.3% at 12,861.49 (close)

Paris – CAC 40: DOWN 1.0% at 5,316.89 (close)

EURO STOXX 50: DOWN 1.2 percent at 3,527.30

Tokyo – Nikkei 225: UP 0.4% at 22,819.03 (close)

Hong Kong – Hang Seng: DOWN 0.4% at 29,074.24 (close)

Shanghai – Composite: FLAT at 3,317.62 (close)

Euro/dollar: DOWN at US$1.1899 from US$1.1900 at 2150 GMT

Pound/dollar: DOWN at US$1.3477 from US$1.3536

Dollar/yen: DOWN at 112.12 yen from 112.57 yen

Oil – Brent North Sea: UP US$1.10 at US$63.73 per barrel

Oil – West Texas Intermediate: UP 96 cents at US$58.36 per barrel

— AFP

*US$1 = RM4.09


Trump administration rejects China’s bid for market economy status

WASHINGTON: The Trump administration has confirmed it rejects China's bid to be considered a market economy in the World Trade Organization, making it subject to more onerous trade penalties.

In a 41-page legal document presented to the WTO, the US Trade Representative defended its right to consider China a non-market economy when ruling on how to handle a flood of cheap imports from the manufacturing behemoth and protect domestic industry.

The European Union and Japan, among others, also reject China's bid for recognition as a market economy in the WTO. The recognition was expected to kick in a year ago, 15 years after China joined the trade body.

The US position was presented in support of the European Union in a WTO dispute with China over the issue.

An outraged Beijing called the analysis a “serious distortion of the actual situation in China.”

“China urges the United States to earnestly fulfill its international obligations and take practical actions to correct its wrongdoings,” China's Ministry of Commerce said, warning that “China will take the necessary measures to safeguard the legitimate rights” in the WTO.

The Trump administration position continues the stance maintained by the Obama administration, which said China's state-directed economy had not made the reforms necessary to operate on market principles.

The distinction is important, since governments use prices in third countries rather than those prevailing in China in cases brought by trading partners to protect domestic industries from Chinese products being dumped at prices below the cost of production.

“The evidence is overwhelming that WTO Members have not surrendered their longstanding rights … to reject prices or costs that are not determined under market economy conditions,” when deciding on anti-dumping cases, the USTR report said.

It argued that the agreement with China when it joined the WTO specified that if market economy conditions “do not prevail in China or in the industry or sector under investigation, then 'comparable' prices or costs do not exist for purposes of the dumping comparison.” — AFP