Saturday, June 23rd, 2018

 

Saudis pledge decisive oil supply increase to reassure consumers

DUBAI, June 23 — Saudi Arabia promised to act decisively to keep oil prices under control, signalling a real supply boost approaching 1 million barrels a day is on the way to global markets. “We will do whatever is necessary to keep the market…


Opec+ agrees oil-supply boost in victory for Saudis, Russia

LONDON, June 23 — Opec and its allies gave the final sign-off to an oil-production increase, sealing a victory for Saudi Arabia and Russia. Major producers outside the Organisation of Petroleum Exporting Countries — including Mexico and…


Fox keeps open ‘no deal’ Brexit option as business balks

LONDON, June 23 — International Trade Secretary Liam Fox kept open the possibility of Britain exiting the European Union without striking a deal on its future relationship with the bloc, even as UK businesses ratcheted up their warnings against…


Iran doesn’t expect oil customers to get sanctions waivers

VIENNA, June 23 — Iran said it doesn’t believe buyers of its oil will get waivers from the US government that would allow them to continue purchasing cargoes after President Donald Trump’s renewal of sanctions. The Persian nation is facing…


Opec meets allies in Vienna for approval of oil-supply hike

MOSCOW, June 23 — Opec and its allies gathered for a third successive day of meetings in Vienna to give the final sign-off to an oil-production increase. Major producers outside the Organisation of Petroleum Exporting Countries — including…


Rubber buyers to pay additional charges to Sabah smallholders, says state minister

KOTA KINABALU, June 23 — Rubber smallholders in Sabah will enjoy the revenue from extra charges on rubber sales not only from direct sales to the Sabah Rubber Industry Board (SRIB), but also to licensed rubber buyers. State Agriculture and Food…


Xiaomi says it doesn’t have timeframe to revisit China listing

HONG KONG, June 23 — Xiaomi Corp said it hasn’t set a timeframe to revive an offering of Chinese depository shares, a delay that could hurt China’s ambitions to lure its tech giants to list in the domestic market. The Chinese phone maker had…


Argentina gets first US$15b from IMF

BUENOS AIRES: Argentina on Friday received US$15 billion (RM60.03 billion), the first tranche of a US$50 billion loan from the International Monetary Fund to help stabilize its fragile economy, the South American nation's central bank said.

Following a currency crisis in April and May, the IMF announced the US$50 billion standby loan in early June after Latin America's third largest economy sought help to bolster market confidence.

The peso plunged to a record low this month, and since the start of the year the currency has dropped more than 30% against the dollar.

On Wednesday the Washington-based IMF approved the US$50 billion aid package. It said the first US$15 billion will contribute to budget support while the US$35 billion balance will be “precautionary.”

The fund said that its assistance would back efforts by Buenos Aires to put public debts on a sustainable path, reduce the need for financing and tackle inflation while strengthening the central bank's independence, while maintaining social spending.

Argentina has a bitter history with the global crisis lender, which many Argentines view as having imposed tough conditions that worsened economic pain 17 years ago. — AFP


Greece hails ‘historic’ deal to end debt crisis

ATHENS: Greek Prime Minister Alexis Tsipras on Friday hailed an agreement by Eurozone ministers that will put an end to the country's eight-year bailout program as an “historic” step.

Eurozone states declared the severe debt crisis that has weighed heavy on the country since 2010 to be over, allowing Athens to escape some of the supervision of its creditors from August.

Wearing a tie for the first time since becoming prime minister in 2015 — after pledging to wear one only when Greece's debt was cut — Tsipras told a celebratory meeting of coalition lawmakers on Friday night that the country could return to being a “social state”.

“Austerity will gradually be replaced by social justice,” he promised.

However, removing his tie at the end of the speech, he argued that “the Greek people had won a battle but not the war”.

Coming nearly a decade after Greece's finances spun out of control, sparking three bailouts and threatening the country's euro membership, he earlier declared the deal as an “historic agreement”.

“We are turning a page,” he added, but cautioned that the country “must not destroy the path taken on the reforms and on budgetery efforts.”

The eurozone ministers' hard-fought agreement was declared earlier Friday, slating Greece to leave its third financial rescue since 2010 on August 20.

“The Greek crisis ends here tonight,” said EU Economic Affairs Commissioner Pierre Moscovici, after the marathon talks in Luxembourg.

The deal was expected to be an easy one, but last-minute resistance by Germany — Greece's long bailout nemesis and biggest creditor — dragged the talks on for six hours.

The ministers agreed to extend maturities by 10 years on major parts of its total debt obligations, a mountain that has reached close to double the country's annual economic output.

'Congratulations, comrades'

They also agreed to disburse 15 billion euros (RM70.04 billion) to ease Greece's exit from the rescue programme.

This would leave Greece with a hefty 24 billion euro safety cushion, officials said.

“The agreed debt relief is bigger than we had expected,” Citi European Economics said in a note.

“In particular, the 10-year extension of the EFSF loans' maturity and most importantly the grace period on interest payments is a significant development,” they added.

“The Greek government is happy with the agreement,” Greek Finance Minister Euclid Tsakalotos said after the talks.

But “to make this worthwhile we have to make sure that the Greek people must quickly see concrete results … they need to feel the change in their own pockets,” he added.

Tsakalotos' predecessor in the government, maverick economist Yanis Varoufakis, was more scathing in his assessment.

“Congratulations, comrades. (Eurozone creditors) extend the Greek state's bankruptcy into 2060 and they call it debt … relief,” he tweeted.

The eight-year crisis toppled four governments and shrank the economy by 25%. Unemployment soared and still hovers over 20%, sending thousands of young educated Greeks abroad.

Optimism is tempered by Greece's remaining fiscal obligations, which will demand serious discipline, observers say.

“This is a very tight programme. A surplus of 3.5% to 2022 and 2.2% (on average) to 2060 is not easy at all,” Kostas Boukas, asset management director at Beta Securities, told Athens 9,84 radio.

“We'll have to see if the pledges will be kept, especially as they depend on international developments as well,” he said.

Under pressure from its creditors, Greece has already agreed to slash pensions again in 2019, and reduce the tax-free income threshold for millions of people in 2020.

Further cuts will be made to maintain the 3.5% surplus, if necessary.

“It would be a terrible mistake to cultivate illusions that the end of the bailout means a return to normality,” said pro-opposition newspaper Ta Nea.

“What follows is tough oversight which no other country has experienced in a post-bailout period,” the daily said.

Long-term concerns

The European Commission has already specified that Greece will remain under fiscal supervision until it repays 75% of its loans.

Athens has received 273.7 billion euros in assistance since 2010, enabling it to avoid punishing borrowing rates on debt markets.

The International Monetary Fund, led by the tough-talking Christine Lagarde, welcomed the debt relief, but cited reservations about Greece's obligations over the long term.

“In the medium term analysis there is no doubt in our minds that Greece will be able to reaccess the markets,” Lagarde said after the talks.

“As far as the longer term is concerned we have concerns,” she added.

The reform-pushing IMF played an active role in the two first Greek bailouts, but took only an observer role in the third in the belief that Greece's debt pile was unsustainable in the long term.

French President Emmanuel Macron also hailed the “very positive” agreement, saying it showed that “Europe is moving forward” despite recent difficulties. — AFP


Global stocks mostly climb despite rising trade tensions

NEW YORK: World stock markets mostly climbed Friday despite rising trade tensions, with petroleum-linked shares gaining after OPEC agreed to only a modest production increase.

The Dow snapped an eight-session losing streak, with oil producers Exxon Mobil and Chevron both rising more than two percent on higher oil prices.

Ministers with the Organization of the Petroleum Exporting Countries agreed to ramp up oil production by around a million barrels a day from July.

However, some ministers acknowledged that the actual amount of additional produced will be lower than that amount. US oil prices rose nearly five percent following the agreement, with analysts saying the output increase would be smaller than expected.

The rally in oil prices also gave a lift to French giant Total and London-listed Royal Dutch Shell.

Bourses in Paris and London both rose more than one percent , while Frankfurt rose a more modest 0.5%.

The gains came as the European Union slapped revenge tariffs on iconic US products including bourbon, jeans and motorcycles in its opening salvo in a trade war with President Donald Trump.

Customs agents across Europe's colossal market of 500 million people will now impose the duty, hiking prices on US-made products in supermarkets and across factory floors.

Trump wasted little time in responding, threatening on Twitter to impose 20% tariffs on European-made cars exported to the US, pressuring European automakers including Italy's Fiat Chrysler and Germany's Daimler.

“The underlying tensions between the US and China continue to escalate, and while neither wants a trade war, the US won't accept the status quo, and China won't change its industrial policy,” Rabobank senior strategist Michael Every told AFP.

Many analysts have expressed scepticism that a trade war is inevitable. Still, anxiety is rising.

“The hope is that the Trump administration's tough approach towards its trading partners is a negotiating tactic and the growth-killing implications of an all-out trade war will be avoided,” said Bob Schwartz, senior economist at Oxford Economics. “The latest salvo by Trump on Friday, threatening to impose a 20% tariff on European auto imports, is clearly not encouraging”.

Key figures around 2100 GMT

New York – Dow Jones: UP 0.5 % at 24,580.89 (close)

New York – S&P 500: UP 0.2 % at 2,754.88 (close)

New York – Nasdaq: DOWN 0.3 % at 7,692.82 (close)

London – FTSE 100: UP 1.7 % at 7,682.27 (close)

Frankfurt – DAX 30: UP 0.5 % at 12,579.72 (close)

Paris – CAC 40: UP 1.3 % at 5,387.38 (close)

EURO STOXX 50: UP 1.1 % at 3,441.60 (close)

Tokyo – Nikkei 225: DOWN 0.8 % at 22,516.83 (close)

Hong Kong – Hang Seng: UP 0.2 % at 29,338.70 (close)

Shanghai – Composite: UP 0.5 % at 2,889.76 (close)

Euro/dollar: UP at US$1.1658 from US$1.1604 at 2100 GMT

Pound/dollar: UP at US$1.3260 from US$1.3240

Dollar/yen: DOWN at 109.98 yen from 109.99 yen

Oil – Brent Crude: UP US$2.50 at US$75.55 per barrel

Oil – West Texas Intermediate: UP US$3.04 at US$68.58 per barrel — AFP