Saturday, January 20th, 2018


Britain able to have bespoke deal with EU, Macron says

LONDON, Jan 20 — French President Emmanuel Macron said today Britain would be able to have a bespoke deal with the European Union after Brexit, one of Prime Minister Theresa May’s objectives. But in an interview with the BBC, Macron said…

Malaysian palm prices to rise

KUALA LUMPUR, Jan 20 — Malaysian palm oil prices are expected to trade at RM2,500-RM2,700 per tonne due to falling production from March onwards, and as stock levels decline from now until July, said leading vegetable oils analyst Dorab Mistry…

China draws up new ‘special’ emission curbs on industries

SHANGHAI, Jan 20 — China will impose “special emissions restrictions” on enterprises in major industrial sectors in northern China later this year, as it bids to ensure its war on pollution continues once a tough winter anti-smog campaign…

China stock regulator gives nod for 5 IPOs worth US$1b

SHANGHAI, Jan 20 — China’s stock market regulator has approved five new initial public offerings (IPOs), which will aim to raise a total of no more than 6.7 billion yuan (RM4.13 billion), the official news agency Xinhua reported today. Zoy…

US shutdown unlikely to harm debt rating: Fitch

WASHINGTON: A possible shutdown of the US federal government at midnight Friday amid a congressional deadlock on spending would have no immediate effect on America's sovereign debt rating, ratings agency Fitch said.

The prospect of a partial shutdown of US government operations, the first in more than four years, grew increasingly likely on Friday afternoon as Senate Republicans and Democrats remained at loggerheads over legislation to authorize funding to keep the government open.

In a statement on Friday, Fitch said partial shutdowns had occurred in the past and the one looming at midnight on Friday “does not have a direct impact” on the top-notch AAA/stable rating for US sovereign debt.

“Its main implication for the US's sovereign creditworthiness would depend on whether it foreshadowed a further destabilization of US budget policymaking, or brinkmanship over the federal debt limit,” Fitch said.

The agency cited Congressional Budget Office findings, according to which the federal government is not likely to exhaust its borrowing ability until late March or early April.

Markets appeared unconcerned by the possible shutdown on Friday, with Wall Street and the US dollar relatively stable — although US currency has weakened in recent weeks against the euro. — AFP

US ‘erred’ in supporting WTO membership for China, Russia: USTR

WASHINGTON: China and Russia have shown no intention of living up to World Trade Organization rules and Washington should not have supported their membership in the global trade body, the Trump administration said Friday.

In strongly worded reports to Congress, the US Trade Representative delivered a laundry list of grievances over unfair trade practices by Beijing and Moscow it says runs counter to global free trade rules.

USTR Robert Lighthizer said the reports show “the global trading system is threatened by major economies who do not intend to open their markets to trade and participate fairly.”

“This practice is incompatible with the market-based approach expressly envisioned by WTO members and contrary to the fundamental principles of the WTO,” Lighthizer said in a statement.

President Donald Trump has ratcheted up retaliatory measures against foreign trading partners, notably China, as part of his America First economic agenda which lifted him to power a year ago. That included an aggressive new trade probe into possible dumping of aluminium and steel.

The US had a US$309 billion trade deficit in goods and services with China in 2016, and that was on track to expand by US$10 billion last year.

USTR report said after joining the WTO in 2001, Beijing effectively abandoned efforts to adopt market-friendly reforms and instead increased central government control over commerce while erecting barriers to foreign competition.

But WTO rules are insufficient to correct Beijing's interventionist policies, and the United States “erred” in supporting China's membership in 2001, the report said.

US dialogue with Beijing since Trump took office yielded some results, such as renewed access to Chinese markets for US beef, but these were piecemeal changes, the report said.

“China is determined to maintain the state's leading role in the economy and to continue to pursue industrial policies that promote, guide and support domestic industries while simultaneously and actively seeking to impede, disadvantage and harm their foreign counterparts,” the China report said.

Chinese authorities also continue to pressure American companies into sharing valuable intellectual property, the report said.

The USTR likewise accused Moscow of an “accelerating withdrawal” from the open market system demanded by WTO membership since joining in 2012, citing burdensome import licensing, opaque customs regimes, and barriers to agricultural imports.

“It was a mistake to allow Russia to join the WTO if it is not fully prepared to live by WTO rules,” the report said. — AFP

US$1 = RM3.94

Global stocks rise, shrugging off US shutdown fears

NEW YORK: Global stock markets rose on Friday, with major Wall Street indices ending at all-time records, as investors shrugged off a looming shutdown of the US government.

The S&P and Nasdaq both finished at all-time highs, while the Dow also gained. Leading bourses in Europe and Asia advanced, while the dollar recovered some of its losses from the prior session against the euro.

“Investors don't appear particularly bothered about the prospect of a government shutdown, with the assumption being that (a temporary spending bill) will eventually be signed and any economic impact will be minor or non-existent,” said Craig Erlam, senior market analyst at trading firm OANDA.

Congressional Democratic leaders met with President Donald Trump at the White House early Friday afternoon to try to avert a shutdown as a midnight deadline loomed for the Republican-controlled Senate to approve a new funding bill.

Analysts say a government shutdown could damage the economy, particularly sectors that do extensive business with the government and especially if it is prolonged.

But most market watchers do not expect that to happen.

“I think the politicians themselves realize it's probably not in anybody's interest to have this be a long-term shutdown,” said JJ Kinahan, chief market strategist of TD Ameritrade.

“The market realizes it's a short-term thing and we're not going to stay shut down forever.”

Kinahan said investors are fixated much more on corporate earnings reports, which have been good so far, although the bulk of major companies have yet to report.

Fitch Ratings said a shutdown in itself would not impact the US government's top rating, but could further destabilize budget policymaking and “lead to brinkmanship” over raising the debt level before the US Treasury runs out of extraordinary measures to pay the government's bills in March or April.

In Europe, Frankfurt pushed 1.2% higher, while London managed to break a four-day losing streak despite poor UK retail sales data.

IG analyst Joshua Mahony said the “disappointing set of retail sales figures should be put in the context of shifting shopping habits”.

British retail sales slid 1.5% in December from the previous month after consumers had brought forward their Christmas shopping, official data showed.

Retail sales had jumped by 1.0% in November, boosted by Black Friday price reductions, the Office for National Statistics said.

Asian markets mostly rose Friday after another positive week across trading floors.

Key figures around 2200 GMT

New York – DOW: UP 0.2% at 26,071.72 (close)

New York – S&P 500: UP 0.4% at 2,810.30 (close)

New York – Nasdaq: UP 0.6% to 7,336.38 (close)

London – FTSE 100: UP 0.4% at 7,730.79 (close)

Frankfurt – DAX 30: UP 1.2% at 13,434.45 (close)

Paris – CAC 40: UP 0.6% at 5,526.51 (close)

EURO STOXX 50: UP 0.8% at 3,648.91

Tokyo – Nikkei 225: UP 0.2% at 23,808.06 (close)

Hong Kong – Hang Seng: UP 0.4% at 32,254.89 (close)

Shanghai – Composite: UP 0.4% at 3,487.86 (close)

Euro/dollar: DOWN at 1.2225 from US$1.2243 at 2200 GMT

Pound/dollar: DOWN at US$1.3860 from US$1.3898

Dollar/yen: DOWN at 110.77 yen from 111.02 yen

Oil – Brent North Sea: DOWN 70 cents at US$68.61 per barrel

Oil – West Texas Intermediate: DOWN 58 cents at US$63.37 per barrel

RM1 = US$3.94

WTO gives US deadline to fix anti-China practices

GENEVA: A World Trade Organization arbitrator on Friday gave Washington until August 22 to implement a prior ruling faulting the anti-dumping measures taken against Chinese products.

The WTO's Dispute Settlement Body ruled last May that some of the US anti-dumping practices were inconsistent with international trade rules.

Arbitrator Simon Farbenbloom said in a report that it was “reasonable” to expect the United States to implement the ruling within 15 months.

“The reasonable period of time for implementation will expire on Aug 22, 2018,” he said.

The case dates back to December 2013, when China filed a dispute against the United States, taking issue with the way Washington assesses whether exports have been “dumped” at unfairly low prices onto the US market.

The use of anti-dumping duties are permitted under international trade rules as long as they adhere to strict conditions, and disputes over their use are often brought before the WTO's Dispute Settlement Body.

In this specific case, China alleged that the United States, in violation of WTO rules, was continuing a practice known as “zeroing”, which calculates the price of imports compared to the normal value in the United States to determine predatory pricing.

In October 2016, a panel of WTO experts found largely in China's favour in the case, including on the issue of “zeroing”.

The United States, which has repeatedly lost cases before the WTO over its calculation method, said in June 2017 that it would implement the panel's recommendations, saying it would do so within a “reasonable” time frame.

This prompted China to ask the WTO to appoint an arbitrator to set an end date.

The 162-member Geneva-based WTO aims to create a level playing field in global trade, although US President Donald Trump's trade envoys maintain the organisation has given unfair advantages to China at the expense of the United States. — AFP

Possible Buffett heir Abel has small Berkshire stake, likely to grow

NEW YORK, Jan 20 — Greg Abel, considered by many investors the top contender to succeed Warren Buffett as Berkshire Hathaway Inc’s chief executive officer, yesterday reported owning about US$2.1 million (RM8.2 million) of the conglomerate’s…

Bursa Malaysia to continue upward momentum next week

KUALA LUMPUR: Bursa Malaysia is expected to continue its positive momentum next week, driven by a stronger ringgit, firmer oil price, strong global economic outlook, and better corporate earnings, a dealer said.

Affin Hwang Investment Bank Vice-President/Head of Retail Research Datuk Dr Nazri Khan Adam Khan said the global economic outlook is looking good so far this year, triggered by buying interest among local and foreign investors.

“It has been a good start (for FBM KLCI) this year, with positive outlook on the local and global economy. The local benchmark index has experienced the highest fund inflows in three years, signalling investors' confident towards our market,” he told Bernama.

For next week, he said that the FBM KLCI would likely move between 1,800 and 1,850 points.

“The strong oil prices have so far lent support to our market, of which about 30 per cent of companies in Bursa Malaysia are directly and indirectly involved in the oil and gas industry,” he said.

He said that the benchmark index would also be affected by US President Donald Trump's tax reform plan.

As the week ended, the market was traded mostly higher, benefitting from gains in the Wall Street, as well as positive economic data from China.

However, the European Union's (EU) approval of draft measures to back a ban on the use of palm oil in biofuels from 2021 on Thursday has hurt the plantation and palm oil related counters as the commodity is a major export from Southeast Asia to the EU.

On a Friday-to-Friday comparison, the FBM KLCI performed better, gaining 6.16 points to end the week at 1,828.83.

On the scoreboard, the FBM Emas Index slipped 26.78 points to 13,195.82, the FBMT 100 Index decreased 2.06 points to 12,860.60, the FBM Emas Syariah Index dipped 79.87 points to 13,627.46, the FBM 70 shed 154.79 points to 16,472.37, and the FBM Ace fell 192.66 points to 6,713.12.

On a sectoral basis, the Finance Index surged 26.07 points to 17,236.98, the Plantation Index fell 99.45 points to 8,037.87 and the Industrial Index erased 31.52 points to 3,368.02.

Total turnover slipped to 25.35 billion units valued at RM15.97 billion from 27.14 billion units valued at RM19.11 billion in the previous week.

Main Market volume decreased to 17.14 billion shares worth RM14.73 billion from the previous Friday's 17.88 billion shares worth RM17.59 billion.

Warrants turnover declined to 2.64 billion units worth RM448 million from 3.46 billion units worth at RM479.51 million previously.

The ACE Market narrowed to 5.51 billion shares valued at RM778.77 million against the previous week's 5.74 billion shares valued at RM1.02 billion. — Bernama