Sunday, August 19th, 2018

 

Tesla board torn between service to shareholders and iconic CEO

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SAN FRANCISCO, Aug 19 — Tesla Inc’s board of directors is at a critical juncture, wedged between a larger-than-life figure to whom many are personally close and their larger responsibility to shareholders. Elon Musk’s astonishing interview…


S&P, Moody’s downgrade Turkey’s credit rating

ISTANBUL: Two major rating agencies downgraded Turkey deeper into junk on Friday, warning on inflation and bemoaning lack of clarity from the government on how it plans to deal with ongoing financial turmoil, including sharp declines in the value of the lira.

“We forecast a recession next year. Inflation will peak at 22% over the next four months, before subsiding to below 20% by mid-2019,” Standard & Poor's (S&P) warned, lowering Turkey one grade.

Since the beginning of the year, the lira has dropped more than 35% against the dollar, much of that coming this month. This follows a poor year for the Turkish currency in 2017.

Moody's pointed at concerns over the independence of Turkey's central bank – which has not raised interest rates – and a lack of transparency from Ankara. Conditions are “likely to fuel inflation further” and there is an increasing risk for a balance of payments crisis, Moody's said, as it too cut Turkey's sovereign rating one notch lower.

Fitch, another agency, did not change its credit ranking but warned that without a return to “an orthodox monetary policy response” and a change in the government's rhetoric, Turkey will struggle to restore economic stability.

Turkey has a series of compounding issues facing its economy, including corporate debt and inflation.

Additionally, markets have been spooked by President Recep Tayyip Erdogan's rhetoric against raising interest rates and beliefs in heterodoxical economic theories.

A worsening relationship with the United States has only added to the woes. The two countries have slapped tariffs on each other. The US also imposed sanctions on two leading Turkish ministers, accusing them of serious human rights abuses.

While a range of issues sit at the heart of the dispute – including disagreements over Syria and Ankara's warming ties to Moscow – Turkey is holding in detention US citizens, including Pastor Andrew Brunson. The US wants them released.

“Turkey has been a problem for a long time. They have not acted as a friend,” Trump said outside the White House just hours after a Turkish court refused to release Brunson, who has been in detention in Turkey since October 2016.

“They should have given him back a long time ago. Turkey in my opinion has acted very very badly,” the president said, indicating more measures could yet come down. “We have not seen the last of that. We will not take it sitting down. They cannot take our people.”

The measures from the agencies came hours after the Finance Ministry in Ankara announced a raft of new measures to ease the way for loans to the banking and real estate sectors against “economic attacks”.

The Industry Ministry meanwhile announced a new package to support small and medium enterprises and entrepreneurs, state-run news agency Anadolu said, without providing details.

Turkish markets will be closed for a week after noon tomorrow (5pm Malaysian time) for the Eid al-Adha holidays. After four days of recovery, the lira slid 8% against the dollar in Friday trading. It had recovered somewhat from a rout on Monday, when it fell to 7.24 to the dollar.

US Treasury Secretary Steven Mnuchin said Thursday that Washington was considering further sanctions in response to the continued detention of Brunson. – dpa


Tariffs will hurt US more than rest of world, Maersk says

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COPENHAGEN, Aug 19 — The US economy will be hit many times harder than the rest of the world by an escalating global trade war, according the chief executive officer of A.P. Moller-Maersk A/S. Soren Skou, who runs the world’s biggest shipping…


Iran says no Opec member can take over its share of oil exports

LONDON, Aug 19 — Iran told Opec today no member country should be allowed to take over another member’s share of oil exports, expressing Tehran’s concern about Saudi Arabia’s offer to pump more oil in the face of US sanctions on Iranian oil…


Benettons go from preachers to pariahs after Genoa bridge disaster

ROME, Aug 19 — For half a century, Italy’s Benetton family has preached compassion through eye-popping ads for its eponymous clothing line that have included photos of a dying Aids patient, a black woman breastfeeding a white baby and, most…


Australia ramps up aid to farmers as drought bites

SYDNEY, Aug 19 — Financial aid for drought-stricken Australian farmers will be increased to A$1.8 billion (RM5.41 billion) as they endure the driest conditions in half a century, the prime minister said today. Farmers in eastern states are…


Superdry co-founder gives £1m to campaign for second Brexit vote

LONDON, Aug 19 — The co-founder of fashion brand Superdry is donating a million pounds (RM5.24 million) to the campaign for a referendum on the final Brexit agreement as Britain prepares to outline in more detail how a no-deal outcome would work….


Greece emerges from bailouts relieved, but not euphoric

ATHENS, Aug 19 — The youngest Greeks may not be able to remember what life was like beforehand: The third and last of the country’s international bailouts comes to an end tomorrow, and while Greece is faring better, it still bears the scars of…


UK’s richest man forced out of the shadows

LONDON, Aug 19 — Reclusive titan of industry Jim Ratcliffe has found himself under unusual scrutiny after being declared Britain’s richest man, with his political leanings and tax affairs coming under the microscope. The 65-year-old head of the…


Trade war creates unstable environment for foreign inflows, says economist

KUALA LUMPUR, Aug 19 — Intensifying trade friction between China and the United States has left the local equity market sentiment cautious, creating an unstable environment for foreign fund inflows. Bank Islam Chief Economist, Dr Mohd Afzanizam…