Saturday, February 10th, 2018

 

Foxconn unit planning US$4b investment after China IPO

HONG KONG, Feb 10 — Foxconn Industrial Internet Co, is seeking to use proceeds from an initial public offering in China to bankroll 27.3 billion yuan (US$4.3 billion/RM17 billion) investment in next generation projects. A unit of Hon Hai…


EU says Bayer Monsanto must not hurt competition in digital farming-paper

FRANKFURT, Feb 10 — Bayer needs to ensure that a merger with rival Monsanto does not stifle competition in digital farming, the European Union’s Competition Commissioner Margrethe Verstager told a German newspaper today. Bayer’s US$63.5…


Bitcoin finds a bottom as risk aversion grips global markets

NEW YORK, Feb 10 — What’s supposed to be the most volatile asset in the universe is proving to be a bastion of stability compared with wild swings and carnage in global equities this week. Bitcoin clawed its way back from the four-month low…


Alibaba’s Ma hopes Beijing 2022 can be smarter, cheaper, faster

Gangneung, South Korea, Feb 10 — Billionaire Alibaba co-founder Jack Ma foresees an Olympics that is better for fans and athletes and is more economical — and hopes Beijing 2022 will be the pinnacle of that vision. Ma’s e-commerce giant in…


US stocks end brutal week on benign note; European, Asian stocks dive

NEW YORK: Wall Street stocks ended a bruising week on a benign note courtesy of a late-session surge Friday, while equity markets in Europe and Asia fell sharply in volatile trading.

US stocks lurched back and forth in a rollercoaster session, opening decisively higher, then tumbling deep into the red at midday before rising again and finishing strong.

Europe's key markets extended the recent days' downturn to show substantial losses at the close following another spectacular drop in Asian shares.

“How long can the selloff last? That is the million — if not billion — dollar question,” Fawad Razaqzada at Forex.com said, adding that the absence of massive buyers at current low price levels was a worry.

“We had plenty of volatility today and we'll see more next week,” said Art Hogan, chief market strategist at Wunderlich Securities.

“You have to go back to the financial crisis days to see this kind of volatility.”

The market's best hope for escaping the current cycle is if next week's US inflation data contain no bombshells and bond yields do not increase from their current range, Hogan said.

The Dow Jones Industrial Average ended up 1.4% at 24,190.90 after swinging more than 1,000 points during the session.

In spite of the robust finish, the Dow's weekly losses were the worst since January 2016 and investors are bracing for more turbulence ahead.

Not pretty

“No one can say for sure, but things don't look pretty out there, given that the sharp falls haven't been bought this time around. So, things could get ugly really quick,” Razaqzada said.

Paris, London and Frankfurt all lost more than one percent.

Asian trading floors were a sea of red, with concerns about tighter interest rates, particularly in the United States.

Hong Kong, Shanghai and Tokyo were among the worst hit as investors piled into haven assets such as gold and the yen.

Oil prices also tumbled, with US benchmark West Texas Intermediate losing US$1.95 to US$59.20 per barrel to suffer its biggest weekly loss in two years.

Analysts attributed the drop to worries about oversupply given strong US oil output and to a spillover in volatility from equity markets.

“Investments over the coming weeks could be something of an emotional roller-coaster ride,” Rebecca O'Keeffe, head of investment at Interactive Investor, told AFP.

A key trigger of the stocks pullback was a strong US jobs report a week ago that also showed rising US wage growth, fueling speculation the Federal Reserve will lift rates more than the three times already forecast this year.

At the same time, the European Central Bank is on the verge of ending its crisis-era stimulus, while the Bank of England warned its main interest rates could rise faster than expected in 2018.

Key figures around 2200 GMT

New York – DOW: UP 1.4% at 24,190.90 (close)

New York – S&P 500: UP 1.5% at 2,619.55 (close)

New York – Nasdaq: UP 1.4% at 6,874.49 (close)

London – FTSE 100: DOWN 1.1% at 7,092.43 points (close)

Frankfurt – DAX 30: DOWN 1.3% at 12,107.48 (close)

Paris – CAC 40: DOWN 1.4% at 5,079.21 (close)

EURO STOXX 50: DOWN 1.5% at 3,255.99

Tokyo – Nikkei 225: DOWN 2.3% at 21,382.62 (close)

Hong Kong – Hang Seng: DOWN 3.1% at 29,507.42 (close)

Shanghai – Composite: DOWN 4.1% at 3,129.85 (close)

Euro/dollar: UP at $1.2249 from US$1.2246 at 2200 GMT

Pound/dollar: DOWN at US$1.3828 from $1.3912

Dollar/yen: UP at 108.78 yen from 108.74 yen

Oil – Brent North Sea: DOWN US$2.02 at US$62.79 per barrel

Oil – West Texas Intermediate: DOWN US$1.95 at US$59.20 per barrel — AFP


Bank of Japan to keep Kuroda at helm until 2023: Reports

TOKYO: The Bank of Japan is to keep Haruhiko Kuroda at its helm until 2023 under government plans to retain him as a pillar of its pro-spending policy, reports said Saturday.

The government will propose to parliament reappointing 73-year-old Kuroda for a second five-year term as early as this month, the Nikkei business daily quoted anonymous government sources as saying.

His current term ends on April 8.

Other media, also quoting anonymous government sources, said Prime Minister Shinzo Abe's administration was in the final stages of arranging Kuroda's reappointment.

He would be the first BoJ governor to serve two terms in half a century as Abe's ruling coalition has a comfortable majority in both houses of parliament.

Soon after he became prime minister, Abe handpicked Kuroda, a former finance ministry bureaucrat who later headed the Manila-based Asian Development Bank, as BoJ chief.

Kuroda has since taken drastic measures to pump money into markets in what was called a monetary “bazooka”.

It has played a key role in Abe's growth blitz — a mixture of huge monetary easing, government spending and reforms to the economy.

“Mr Kuroda is a symbol of Abenomics and replacing him would pose risks,” the Nikkei quoted a top government official as saying.

Their efforts have weakened the yen and boosted share prices and corporate profits.

The Japanese economy has been expanding on robust exports and domestic demand spurred by infrastructure upgrades ahead of the 2020 Olympic Games.

With wage growth and consumption persistently lukewarm, however, the world's third largest economy is still battling deflation.

Its core inflation rate rose only 0.5% last year, far from the two-percent target Kuroda initially said he planned to achieve in two years.

The trend stands in sharp contrast to other major economies whose central bankers are looking to wind up their easing policies. — AFP


Bursa Malaysia to move into correction mode next week

KUALA LUMPUR: Bursa Malaysia is expected to move into correction mode next week on the back of growing concern over higher US interest rates and the rising of bond yields, which had resulted in Wall Street entering into correction.

Affin Hwang Investment Bank Vice-President/ Head of Retail Research, Datuk Dr Nazri Khan Adam Khan, said the correction would, however, go on for a medium term, which probably happened once in ten years.

“As Asian markets and other parts of the world had also pulled back during the week, this suggests that more correction will be seen over the next few days.

“The markets, including commodities like rubber, crude palm oil and Brent crude will also be impacted by the sell-offs, but this will just be temporary. The last time it happened was in 1998,” he told Bernama.

On a positive note, Nazri Khan said, despite the global-driven market pullback, Malaysia has recorded a positive fund inflows, with foreigners remained the net buyers in January for Malaysian bonds to RM4.5 billion in January 2018 from RM2.7 billion in December last year.

“This shows that foreign buyers are confident of the fundamentals of Malaysia.

“Therefore, we see a limited downside of the pullback to 1,800 level for the benchmark index next week,” he said.

For the week just-ended, Bursa Malaysia was traded mostly lower, reflecting its Asian peers mainly due to the Wall Street slide which triggered the global stocks sell-off.

On a Friday-to-Friday basis, the FBM KLCI was broadly down by 50.66 points to end the week at 1,819.82.

The FBM Emas Index fell 401.52 points to 12,975.06, FBMT 100 Index decreased 369.88 points to 12,701.84 and the FBM Emas Syariah Index dipped 374.18 points to 13,277.64.

The FBM 70 was down 519.41 points to 15,948.77 and the FBM Ace fell 407.81 points to 6,088.32.

On a sectoral basis, the Finance Index erased 523.11 points to 17,456.47, Plantation Index declined 110.37 points to 7,946.03 and the Industrial Index fell 166.05 points to 3,221.36.

Total turnover rose to 15.68 billion units valued at RM16.43 billion from 6.52 billion units valued at RM6.15 billion last week.

The Main Market surged to 10.01 billion units worth RM15.42 billion from 5.63 billion units worth RM8.11 billion previously.

Warrants turnover advanced to 2.79 billion units valued at RM566.26 million from 1.61 billion units valued at RM243 million last week.

The ACE Market increased to 2.83 billion units worth RM432.96 million from 1.60 billion units worth RM275.57 million previously.

The gold futures contract on Bursa Malaysia Derivatives is expected to track gold price movements on New York Commodity Exchange (Comex) next week, a dealer said.

Phillip Futures Sdn Bhd Dealer, Chang Hui Ying, told Bernama for the week ahead, gold was likely to trade higher with the expected further weakening of the ringgit, standing at 3.9580, against the US dollar today.

Another dealer said gold demand in the regional markets was expected to rise moving forward due to the coming festive season in China and wedding season in India.

On a Friday-to-Friday basis, February 2018 fell 58 ticks to RM167.10 a gramme, March 2018 eased 45 ticks to RM167.80 a gramme, while April 2018 and May 2018 declined 35 ticks each to RM168.60 and RM168.35 a gramme respectively.

Weekly turnover rose to 26 lots valued at RM436,615 from 13 lots valued at RM220,075, while open interest increased to 75 contracts from 66 contracts previously. — Bernama


Bank of Japan to keep Kuroda at helm until 2023

TOKYO, Feb 10 — The Bank of Japan is to keep Haruhiko Kuroda at its helm until 2023 under government plans to retain him as a pillar of its pro-spending policy, reports said today. The government will propose to parliament reappointing…


Ringgit to trade cautiously against US dollar next week

KUALA LUMPUR, Feb 10 — The ringgit is expected to trade cautiously against the US dollar next week, influenced by mixed internal and external factors, especially uncertainties in the US market, dealers said. Affin Hwang Investment Bank…


Bursa to move into correction mode next week

KUALA LUMPUR, Feb 10 — Bursa Malaysia is expected to move into correction mode next week on the back of growing concern over higher US interest rates and the rising of bond yields, which had resulted in Wall Street entering into correction….