Thursday, April 5th, 2018

 

Full-blown trade war can still be averted: Analysts

PETALING JAYA: As US and China ramp up trade tensions, analysts opined that a full-blown trade war can still be averted if there is a moratorium on unilateral imposition of tariffs and both sides come to the negotiation table.

At this juncture, analysts are of the view that the threat of full scale trade war remain elevated but positive developments are expected as both parties come into terms.

“The question now is whether the two can be sensible enough to reconcile and prevent the current trade war to further escalate down the road,” Socio-Economic Research Centre executive director Lee Heng Guie told SunBiz.

“Otherwise there will be continuing uncertainty on what each side will think and do to wrought maximum damage on another’s economy,” Sunway University Business School Professor of Economics Dr Yeah Kim Leng said.

On Wednesday, US announced that it would impose 25% duties on US$50 billion (RM193.5 billion) worth of imports from China, while the latter promptly retaliated with a list of similar duties on key US imports including soybeans, planes, cars, whiskey and chemicals.

However, hours later, US president Donald Trump tweeted that the country is not in a trade war with China, citing “that war was lost many years ago” by previous US representative.

Meanwhile Yeah said, the prospect of a brewing trade war is now a great concern, especially for countries in Southeast Asia that have strong trade linkages with China and the global supply chain.

He said while some countries, including Malaysia, could benefit indirectly from a diversion of US imports from China, the dampening of overall demand, loss of investor confidence and market fears, as well as the threat of a global recession will have a greater impact on near term growth prospects.

“While the affected Malaysian industries such as the solar, steel and aluminium products can still cope with the recent hike in tariffs, we should immediately apply for exemption failing which the government should support multilateral moves to ease trade tension and forge new trade pacts to offset the expected decline of exports to the US as tariff hikes will result in higher prices and consequently lower demand in the US economy.

“The decline in Malaysia’s February exports is likely to be a one-off event due to seasonal and high base factors, but could persist in the months ahead if the trade tension escalates although this is not yet in our baseline scenario for this year,” Yeah added.

Nevertheless, MIDF Amanah Investment Bank Bhd chief economist Dr Kamaruddin Mohd Nor said Malaysia will not feel the immediate impacts from the trade tension at this point of time.

“However, if the tension escalate into full blown tit-for-tat scenarios, slowdown in global trade will eventually affect Malaysia,” Kamaruddin said.


Trade war can still be averted

PETALING JAYA: As US and China ramp up trade tensions, analysts opined that a full-blown trade war can still be averted if there is a moratorium on unilateral imposition of tariffs and both sides come to the negotiation table.

At this juncture, analysts are of the view that the threat of full scale trade war remain elevated but positive developments are expected as both parties come into terms.

“The question now is whether the two can be sensible enough to reconcile and prevent the current trade war to further escalate down the road,” Socio-Economic Research Centre executive director Lee Heng Guie told SunBiz.

“Otherwise there will be continuing uncertainty on what each side will think and do to wrought maximum damage on another’s economy,” Sunway University Business School Professor of Economics Dr Yeah Kim Leng said.

On Wednesday, US announced that it would impose 25% duties on US$50 billion (RM193.5 billion) worth of imports from China, while the latter promptly retaliated with a list of similar duties on key US imports including soybeans, planes, cars, whiskey and chemicals.

However, hours later, US president Donald Trump tweeted that the country is not in a trade war with China, citing “that war was lost many years ago” by previous US representative.

Meanwhile Yeah said, the prospect of a brewing trade war is now a great concern, especially for countries in Southeast Asia that have strong trade linkages with China and the global supply chain.

He said while some countries, including Malaysia, could benefit indirectly from a diversion of US imports from China, the dampening of overall demand, loss of investor confidence and market fears, as well as the threat of a global recession will have a greater impact on near term growth prospects.

“While the affected Malaysian industries such as the solar, steel and aluminium products can still cope with the recent hike in tariffs, we should immediately apply for exemption failing which the government should support multilateral moves to ease trade tension and forge new trade pacts to offset the expected decline of exports to the US as tariff hikes will result in higher prices and consequently lower demand in the US economy.

“The decline in Malaysia’s February exports is likely to be a one-off event due to seasonal and high base factors, but could persist in the months ahead if the trade tension escalates although this is not yet in our baseline scenario for this year,” Yeah added.

Nevertheless, MIDF Amanah Investment Bank Bhd chief economist Dr Kamaruddin Mohd Nor said Malaysia will not feel the immediate impacts from the trade tension at this point of time.

“However, if the tension escalate into full blown tit-for-tat scenarios, slowdown in global trade will eventually affect Malaysia,” Kamaruddin said.


Malaysia-US trade growth will be slower this year

KUALA LUMPUR: The International Trade and Industry Ministry (Miti) has warned that Malaysia’s trade growth with the US in 2018 is not expected to be as robust as last year’s 16.3%, even as the American Malaysian Chamber of Commerce’s (Amcham) considers the impact of the trade issues between US and China too early to tell.

Minister Datuk Seri Mustapa Mohamed however qualified that he still expects good growth this year.

“We don’t know how this (trade war) is going to play out because it’s too early to tell. We just have to wait and see whether it’s just part of a negotiation or an announcement.

“As long as the world trade is ok and Trump don’t disrupt, this will continue to grow. If the world trade comes down, every company will have to adjust accordingly,” Amcham’s Malaysian American Electronics Industry chairman Datuk Wong Siew Hai told reporters after announcing the findings for the “Economic Impact Survey 2018” today. 

Key findings of the survey of leading US companies operating in the electrical and electronics (E&E) sector, revealed that a majority of companies recorded strong revenue growth in 2017, and 78% expect that their company will increase its level of trade and investment in Malaysia over coming years.

Total investment to date by US E&E companies exceeds RM42 billion, concentrated in Penang but also with a significant presence in Greater Kuala Lumpur. American E&E companies are integrated into the local economy, sourcing RM12 billion worth of goods and services locally in 2017.

It brought a total trade-in goods surplus of at least RM19.5 billion, contributing at least 20% of Malaysia’s total international trade surplus for 2017. US E&E companies also created 80,000 jobs in Malaysia.

According to trade statistics tabulated by the Malaysia External Trade Development Corporation, in January-February of 2018, trade with the US grew 1.8% year-on-year to RM24.45 billion.

“About half of our trade with America is driven by E&E, that’s the biggest component,” Mustapa said after delivering his address at the Asia Pacific Council of American Chambers of Commerce Business Summit today.

Malaysia’s export of E&E products make up RM343 billion or 36.7% of total exports in 2017.

Mustapa said Malaysia will monitor the trade issues between US and China, as there will be some impact to the country, particularly in solar. China is Malaysia’s biggest trading partner while US is the third.


M’sia-US trade growth will be slower this year

KUALA LUMPUR: The International Trade and Industry Ministry (Miti) has warned that Malaysia’s trade growth with the US in 2018 is not expected to be as robust as last year’s 16.3%, even as the American Malaysian Chamber of Commerce’s (Amcham) considers the impact of the trade issues between US and China too early to tell.

Minister Datuk Seri Mustapa Mohamed however qualified that he still expects good growth this year.

“We don’t know how this (trade war) is going to play out because it’s too early to tell. We just have to wait and see whether it’s just part of a negotiation or an announcement.

“As long as the world trade is ok and Trump don’t disrupt, this will continue to grow. If the world trade comes down, every company will have to adjust accordingly,” Amcham’s Malaysian American Electronics Industry chairman Datuk Wong Siew Hai told reporters after announcing the findings for the “Economic Impact Survey 2018” today. 

Key findings of the survey of leading US companies operating in the electrical and electronics (E&E) sector, revealed that a majority of companies recorded strong revenue growth in 2017, and 78% expect that their company will increase its level of trade and investment in Malaysia over coming years.

Total investment to date by US E&E companies exceeds RM42 billion, concentrated in Penang but also with a significant presence in Greater Kuala Lumpur. American E&E companies are integrated into the local economy, sourcing RM12 billion worth of goods and services locally in 2017.

It brought a total trade-in goods surplus of at least RM19.5 billion, contributing at least 20% of Malaysia’s total international trade surplus for 2017. US E&E companies also created 80,000 jobs in Malaysia.

According to trade statistics tabulated by the Malaysia External Trade Development Corporation, in January-February of 2018, trade with the US grew 1.8% year-on-year to RM24.45 billion.

“About half of our trade with America is driven by E&E, that’s the biggest component,” Mustapa said after delivering his address at the Asia Pacific Council of American Chambers of Commerce Business Summit today.

Malaysia’s export of E&E products make up RM343 billion or 36.7% of total exports in 2017.

Mustapa said Malaysia will monitor the trade issues between US and China, as there will be some impact to the country, particularly in solar. China is Malaysia’s biggest trading partner while US is the third.


CPO could benefit from US-China trade war

PETALING JAYA: Analysts expect positive outlook for CPO price in anticipation of higher China demand for palm oil in the long run following the 25% tariffs slapped on US soybean.

PublicInvest Research foresees two outcomes from China’s proposed imposition of 25% tariffs on US soybean imports.

“Firstly, Chinese buyers will demand more soybean orders from Brazil, the second world largest soybean producer. Secondly, Chinese consumers might also switch their consumption pattern from soybean oil to palm oil, which has a bigger price advantage compared to US soybean imports.”

The research house said on the flip side, the US might stand to lose more as they need to quickly look for other markets for their soybean exports as China made up 58% of US soybean export market.

“Though US soybean supplies made up 35% of China’s soybean imports, it can easily be substituted with more Brazilian soybean supplies.”

PublicInvest Research maintains a “neutral” call on the plantation sector with a full-year CPO price forecast of RM2,500 per tonne.

Meanwhile, MIDF Research remains positive on the plantation sector due to improved demand outlook for palm oil in 2018.

“We believe that the good global economy growth in 2018 should lead to higher consumption per capita.”


CPO to benefit from US-China trade war

PETALING JAYA: Analysts expect positive outlook for CPO price in anticipation of higher China demand for palm oil in the long run following the 25% tariffs slapped on US soybean.

PublicInvest Research foresees two outcomes from China’s proposed imposition of 25% tariffs on US soybean imports.

“Firstly, Chinese buyers will demand more soybean orders from Brazil, the second world largest soybean producer. Secondly, Chinese consumers might also switch their consumption pattern from soybean oil to palm oil, which has a bigger price advantage compared to US soybean imports.”

The research house said on the flip side, the US might stand to lose more as they need to quickly look for other markets for their soybean exports as China made up 58% of US soybean export market.

“Though US soybean supplies made up 35% of China’s soybean imports, it can easily be substituted with more Brazilian soybean supplies.”

PublicInvest Research maintains a “neutral” call on the plantation sector with a full-year CPO price forecast of RM2,500 per tonne.

Meanwhile, MIDF Research remains positive on the plantation sector due to improved demand outlook for palm oil in 2018.

“We believe that the good global economy growth in 2018 should lead to higher consumption per capita.”


Daimler flags possible China cooperation with biggest holder

FRANKFURT, April 5 — Daimler AG said it’s open to work with its biggest shareholder, Chinese billionaire Li Shufu, signalling any cooperation might be largely confined to the world’s biggest car market. Since Li’s arrival in February,…


Number of ultra-rich Malaysians up 11% to 310 last year

KUALA LUMPUR: The number of ultra-wealthy Malaysians rose 11% to 310 last year, up from 280 in 2016, among the country’s population of 31.19 million, according to Knight Frank’s The Wealth Report 2018.

Ultra-wealthy individuals are those with US$50 million (RM193.35 million) or more in net assets.

The 12th edition of report, released by the independent global property consultancy yesterday, also predicted the super-rich population in Malaysia would jump 65% to 510 people from 2017 to 2022.

Knight Frank Asia Pacific head of research Nicholas Holt said the strengthening of the ringgit versus the US dollar by 15% last year was the main contributor to the rise of the super-rich population in the country.

“Besides, e-commerce and manufacturing sectors, which continued to perform well last year, along with the new sectors like financial technology that had created new wealth in the country, also contributed to the 11% growth,” he said.

Holt said this at a media briefing yesterday in conjunction with the launch of The Wealth Report 2018.

The annual publication tracks the growing super-rich population globally along with a deeper analyses of 52 countries.

It said the world’s ultra-wealthy population increased 10% (11,630 individuals) to 129,730 people last year, with Asia surpassing Europe as the key hub for the super-rich.

Back home, the report said these rich Malaysians preferred less risky assets, with 44% of them allocating their investments into the property sector last year, above the global average of 39% in 2017.

It said 33% of wealthy Malaysians invested in gold against the global average of 25%.

However, 21% of Malaysian respondents said they planned to increase the weight in their cryptocurrencies investment portfolio, matching the global average of 21%. – Bernama


Number of ultra-rich M’sians up 11% last year

KUALA LUMPUR: The number of ultra-wealthy Malaysians rose 11% to 310 last year, up from 280 in 2016, among the country’s population of 31.19 million, according to Knight Frank’s The Wealth Report 2018.

Ultra-wealthy individuals are those with US$50 million (RM193.35 million) or more in net assets.

The 12th edition of report, released by the independent global property consultancy yesterday, also predicted the super-rich population in Malaysia would jump 65% to 510 people from 2017 to 2022.

Knight Frank Asia Pacific head of research Nicholas Holt said the strengthening of the ringgit versus the US dollar by 15% last year was the main contributor to the rise of the super-rich population in the country.

“Besides, e-commerce and manufacturing sectors, which continued to perform well last year, along with the new sectors like financial technology that had created new wealth in the country, also contributed to the 11% growth,” he said.

Holt said this at a media briefing yesterday in conjunction with the launch of The Wealth Report 2018.

The annual publication tracks the growing super-rich population globally along with a deeper analyses of 52 countries.

It said the world’s ultra-wealthy population increased 10% (11,630 individuals) to 129,730 people last year, with Asia surpassing Europe as the key hub for the super-rich.

Back home, the report said these rich Malaysians preferred less risky assets, with 44% of them allocating their investments into the property sector last year, above the global average of 39% in 2017.

It said 33% of wealthy Malaysians invested in gold against the global average of 25%.

However, 21% of Malaysian respondents said they planned to increase the weight in their cryptocurrencies investment portfolio, matching the global average of 21%. – Bernama


Dialog to develop Phase 3 of Pengerang deepwater terminal

PETALING JAYA: Dialog Group Bhd is partnering with the Johor government for the development of the third phase of the Pengerang deepwater terminal in Johor at an indicative initial cost of investment of RM2.5 billion.

Dialog told Bursa Malaysia that its wholly owned subsidiary Dialog Pengerang Sdn Bhd had entered into a memorandum of understanding (MoU) with the Johor state government and the State Secretary, Johor (Incorporated).

Phase 3 will be developed on about 300 acres of land next to Phase 2, which is expected to be completed in early 2019.

The terminal consists of common tankage facilities/dedicated deepwater marine facilities, petroleum/petrochemicals storage terminals and development of industrial land for further downstream oil and gas related activities.

The business activities will be undertaken by Dialog’s indirect wholly owned subsidiary Pengerang CTF Sdn Bhd (PCTF), in which the Johor government will own up to a 20% stake via its investment arm Permodalan Darul Ta’zim.

Dialog will use both internally generated funds and borrowings to finance its investment in PCTF.

Concurrently with the MoU, Dialog’s another wholly owned subsidiary Dialog E & C Sdn Bhd has appointed Penta-Ocean (Malaysia) Sdn Bhd for the engineering, procurement and construction works for the reclamation, soil improvement and shore protection works. The land reclamation requires 22 months to complete.

Dialog shares rose half a sen or 1.7% to close at RM2.99 today on some 10.6 million shares done.