Saturday, July 21st, 2018

 

IMF warns G20 that tariffs hurting economy as Trump threatens more

BUENOS AIRES, July 21 — The International Monetary Fund (IMF) warned world economic leaders today that a recent wave of trade tariffs would significantly harm global growth, a day after US President Donald Trump threatened a major escalation in a…


US stocks dip as Trump talks of more tariffs on China

NEW YORK: Wall Street stocks finished slightly lower Friday as President Donald Trump's latest tariff threats and attack on the Federal Reserve kept a lid on gains despite largely solid earnings.

The Dow Jones Industrial Average finished down less than 0.1% at 25,058.06.

The broad-based S&P 500 dropped 0.1% to close the week at 2,801.83, while the tech-rich Nasdaq Composite Index also fell 0.1% to 7,820.20.

With the majority of larger earnings reports still to come, companies are on track to report second-quarter earnings about 20% above those of the year-ago period, according to a note from Credit Suisse.

“Overall, the earnings season has been strong, topline revenue growth has been solid as well,” said Quincy Krosby, chief market strategist at Prudential Financial.

But Trump kept some of the focus on trade fights after telling CNBC in an interview that he was willing to significantly expand the conflict with China by adding tariffs to all US imports.

On Twitter, Trump also accused China and the European Union of manipulating their currencies to promote their exports at the expense of the US, and criticized the Fed for raising interest rates.

Among companies reporting results, Microsoft won 1.8% after reporting a 10% rise in quarterly profit to US$8.8 billion, (RM35 billion) behind strong revenue gains in internet search ads, gaming, Windows and other key businesses.

Honeywell International advanced 3.8% as the industrial company raised its forecast for annual profits and sales amid strong demand from aerospace and defence clients.

But General Electric sank 4.5% after it reported a 29.7% drop in second-quarter earnings to US$615 million on continued power industry weakness. — AFP


Ringgit expected to strengthen by year-end: Economist

KUALA LUMPUR: The ringgit, which has been on the downtrend against the greenback lately as a result of solid US economic growth, is expected to stabilise and become stronger by year-end.

Affin Hwang Capital Chief Economist Alan Tan said the ringgit was expected to appreciate to RM3.80 versus the US dollar, given the country's strong economic fundamentals and trading activities.

“We think the economic fundamentals will support the ringgit towards the end of 2018. While we think the currency will remain volatile in the short term, it will strengthen in the fourth quarter and rise towards the 3.80 level by end of this year,” he told reporters after a Business Outlook Post-GE14 forum organised by the Malaysia-China Chamber of Commerce, here today.

Tan said Bank Negara Malaysia's (BNM) measures to stabilise the ringgit such as the conversion of 75% of export proceeds held in a foreign currency into the local unit would also help boost the value of the currency as well as monetary inflows into the country.

“The economic fundamentals as well as BNM's requirement (announced in December 2016) for exporters to convert their proceeds, will create demand and support for the ringgit,” he added.

On Friday, the ringgit ended higher against the US dollar on renewed buying interest.

At 6pm yesterday, the ringgit stood at 4.0600/0630 against the US dollar from 4.0620/0650 on Thursday.

Asked about the China-US trade dispute, Tan expressed confidence it would not escalate into a global trade war.

“At the moment, our assumption is it will not escalate into a global trade war. We think it is highly likely that there will be a compromise between the US and China,” he added. — Bernama


Economist: Ringgit expected to strengthen by year-end

KUALA LUMPUR, July 21 — The ringgit, which has been on the downtrend against the greenback lately as a result of solid US economic growth, is expected to stabilise and become stronger by year end.    Affin Hwang…


Govt more interested in an Asean-wide bourse linkage

KUALA LUMPUR, July 21 — The recommendation to link Bursa Malaysia and the Singapore Exchange (SGX) needs to be studied, as the government is more interested in an Association of Southeast Asian Nations (Asean) Connect concept. Finance…


Bursa likely to see an uptrend next week

KUALA LUMPUR, July 21 — Domestic consumption, on the back of demand as well as purchasing advantage will likely push Bursa Malaysia higher next week, with consumer-related stocks expected to do well, said an economist. Bank Islam Malaysia Bhd…


Bursa Malaysia likely to see an uptrend next week

KUALA LUMPUR: Domestic consumption, on the back of demand as well as purchasing advantage will likely push Bursa Malaysia higher next week, with consumer-related stocks expected to do well, said an economist.

Bank Islam Malaysia Bhd Chief Economist Dr Mohd Afzanizam Abdul Rashid said Malaysian consumers were upbeat with the latest consumer sentiment index surging more than 130 points in the 2018 second quarter after remaining below 100 points for 15 consecutive quarters.

“We can expect consumer spending to hold up well, especially when the inflation rate is projected to remain low between June to August.

“However, the threat from US-China trade tensions remains the wild card, alongside European governments taking retaliatory measures against automotive imports from the US and markets will stay cautious,” he told Bernama.

Going forward, Mohd Afzanizam said an immediate important event would be the US Federal Reserve's decision on interest rates on Aug 1.

“We expect the Federal Open Market Committee statements to echo what has been communicated to the US Senate this week.We believe rates could be maintained at the present level, which may be positive for equity markets,” he added.

Meanwhile on another note, according to reports on Friday, Malaysian billionaire T. Ananda Krishnan, and his former aide Ralph Marshall, as well as India's ex-Finance Minister P. Chidambaram as well as his son Karti Chidambaram, were named by the country's Central Bureau of Investigation for alleged irregularities in the Aircel-Maxis case.

The case revolves around the sale of Aircel to Maxis Communications, a 62.4% Ananda Krishnan- owned entity.

On Friday, Maxis Bhd's stock declined two sen to RM5.57, with 1,209,500 shares changing hands.

For the week just ended, Bursa Malaysia ended a nine-day positive streak on Friday in tracking regional peers, and influenced by the US-China trade tussle.

On a Friday-to-Friday basis, the benchmark FTSE Bursa Malaysia KLCI was 32.74 points firmer at 1,754.67 from 1,721.93.

The FBM Emas Index surged 274.1 points to 12,420.31 and the FBMT100 Index soared 261.05 points to 12,209.08.

The FBM 70 climbed 449.61 points to 15,233.24, the FBM Emas Syariah Index bagged 270.75 points to 12,509.51 and the FBM Ace advanced 51.93 points to 5,403.27.

On a sectoral basis, the Plantation Index was 32.31 points easier at 7,480.23, and the Industrial Index rose 34.6 points at 3,214.16.

The Finance Index soared 291.97 points to 17,326.35 as investors reacted positively to Bank Negara Malaysia's decision to keep the overnight policy rate unchanged at 3.25 per cent during its meeting last Wednesday.

Weekly turnover widened to 13.39 billion units valued at RM11.86 billion from 12.04 billion units valued at RM11.66 billion.

Main market volume expanded to 8.22 billion shares valued at RM10.33 billion from 7.25 billion shares valued at RM10.37 billion.

Warrants turnover decreased to 3.00 billion units valued at RM873 million from 3.43 billion units valued at RM1 billion.

The ACE market volume rose to 2.15 billion shares valued at RM651.19 million from 1.35 billion shares valued at RM282.3 million. — Bernama


Ringgit to extend downtrend against greenback to next week

KUALA LUMPUR: The ringgit is likely to extend its downtrend against the US dollar to next week, amid stronger US economic growth and expectations of gradual interest rates hike by the Federal Reserve, said analysts.

FXTM Global Head of Currency Strategy and Market Research Jameel Ahmad said another jump in demand for the US dollar had left a lasting impact on financial markets, with a number of different currencies across the globe, including the ringgit, being hammered by a stronger greenback.

He noted that the ringgit had suffered as a result of the US dollar drive and slipped below the psychological 4.05-level.

“We should pay close attention to the US' second-quarter gross domestic product figures scheduled for release on July 27. Signs of solid economic growth could further boost investor sentiment for the US dollar,” he told Bernama.

The US dollar hit a one year-high against a basket of currencies on Thursday on the back of the country's steady economic growth path and potential further interest rate hikes for the remaining year.

However, the greenback retreated on Friday after President Donald Trump expressed concerns over a stronger currency.

Jameel said with the ringgit having slipped below 4.05 against the US dollar, it was becoming very much possible, that it could decline to as much as 4.10 over the coming weeks.

“This is, however, a result of the stronger US dollar and the consequent pain that this is causing emerging markets.

“The only factor to really benefit the ringgit at present is if the US dollar suffered from a significant round of profit-taking. For as long as the US dollar remains in demand from investors, it just points towards further weakness for emerging market currencies as a whole,” he added.

On a Friday-to-Friday basis, the local note finished lower against the greenback at 4.0600/0630 from 4.0500/0530.

The ringgit was mostly lower against a basket of major currencies.

It rose against the pound to 5.2861/2904 from 5.3189/3236, but fell against the euro to 4.7315/7366 from 4.7122/7161.

The ringgit depreciated against the Singapore dollar to 2.9687/9718 from last Friday's 2.9620/9651 and eased against the yen at 3.6108/6138 from 3.6006/6043. — Bernama


Dollar drops on Trump criticism; US, Europe stocks tepid

NEW YORK, July 21 — The US dollar weakened yesterday against key world currencies as President Donald Trump complained again about its strength, while US and European stock markets were tepid amid fresh tariff talk and another round of corporate…


Wall St slips as trade worries dampen upbeat earnings

NEW YORK, July 21 — US stocks ended slightly lower yesterday as escalating trade anxieties driven by US President Donald Trump’s latest tariff threats against China offset a string of robust earnings led by Microsoft. The Dow Jones Industrial…