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.
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.
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
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
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
Comfort Gloves buys Perak land for RM13.22m
PETALING JAYA: Comfort Gloves Bhd is acquiring a piece of land measuring about 157,500 square metres in Kinta, Perak for RM13.22 million.
The company said its wholly owned subsidiary Comfort Rubber Gloves Industries Sdn Bhd had on June 22 entered into a sale and purchase agreement with Nestle Manufacturing (Malaysia) Sdn Bhd for the land purchase.
The purchase sum is to be satisfied in cash via internally generated funds.
Comfort Gloves said the proposed acquisition is in line with its future expansion plans and to take up more business opportunities.
Its shares gained 1.8% to close at 86 sen on 856,500 shares done.
Ringgit rebounds to close slightly higher against US dollar
KUALA LUMPUR: The ringgit rebounded to close slightly higher against the US dollar today, as the greenback retreated from an 11-month high on profit-taking after a recent rally, dealers said.
At 6pm, the ringgit was quoted at 4.0010/0040 against the greenback compared with Thursday's close of 4.0140/0170.
A dealer said the local currency was marginally higher by about 0.31%, in tandem with the slight weakening of the dollar index by 0.26%.
“The movement of the local currency was also in tandem with a slight improvement on Bursa Malaysia which closed higher, bucking the regional trend on positive local news,” he said.
Prime Minister Tun Dr Mahathir Mohamad's comment that he sees the fair value of the ringgit at RM3.80 against the US dollar helped lift the local currency, he said.
On another note, he added the announcement of Datuk Nor Shamsiah Mohd Yunus as the new Governor of Bank Negara Malaysia (BNM) today, for a term of five years effective from July 1, 2018, was also seen as a positive as she is a very capable figure with in-depth knowledge and experience in BNM.
The local unit was traded mostly lower against a basket of currencies, except the Japanese yen.
It fell against the Singapore dollar to 2.9484/9511 from Thursday's close of 2.9461/9493 and decreased against the British pound to 5.3189/3245 versus 5.2620/2675.
The ringgit fell against the euro to 4.6644/6683 from 4.6233/6276 on Thursday, but improved vis-a-vis the Japanese yen to 3.6323/6360 from 3.6355/6386 yesterday. — Bernama
BNM to continue operating as an independent body: Guan Eng
PUTRAJAYA: Bank Negara Malaysia (BNM) will continue to operate as an independent body according to the rules set out in the legislation, said Finance Minister Lim Guan Eng.
“This is a government that operates under the rule of law. We will respect the present role as outlined under the present laws,” he said.
Lim said this when asked whether BNM would now come under the purview of the Finance Ministry, given that the announcement on the new Governor was made by him, or would remain as an independent body.
“I am just making the announcement (of the appointment). The announcement can be made in a press statement or at a press conference. So, (by having a press conference) we are (also) letting everyone see the new BNM Governor in person,” he said after announcing the appointment here today.
“The announcement is made following several earlier news reports…. It seems there have been many news leaks, which is why we are making the announcement this afternoon.
Nor Shamsiah's appointment is for a term of five years effective from July 1, 2018, to June 30, 2023.
She takes over from Tan Sri Muhammad Ibrahim, who resigned earlier this month before completing his five-year term after questions were raised on a RM2 billion land purchase deal between the central bank and the Finance Ministry. Muhammad was appointed in May 2016.
Lim said Nor Shamsiah was appointed as she was a capable woman who inspired confidence at the international level.
Meanwhile, Nor Shamsiah thanked the Prime Minister and the government for the opportunity to serve the nation.
“It is with an utmost sense of honour and responsibility that I accept this appointment. I will endeavour to carry out the duties of the Governor of BNM to the best of my ability together with the present team.
“BNM will continue to focus on delivering its mandate of maintaining monetary and financial stability in the best interest of the nation,” she said.
Asked on her priority as the new Governor, Nor Shamsiah said it was too early to tell as she had been “away” from BNM for nearly two years.
“I will need to go back and discuss with the staff on the current situation and what would be the priorities moving forward,” she added. — Bernama
Willowglen MSC awarded RM8.62m data management job
PETALING JAYA: Willowglen MSC Bhd has clinched contract worth RM8.62 million for the maintenance of 30 DMS PDM systems and upgrade of 22 PDM system workstations.
The contract commenced on June 21, 2018 and will be completed by June 20, 2021.
It is expected to contribute positively to the group's earnings and net assets per share for the financial years ending December 31, 2018 to 2021.
Willowglen shares slipped 2 sen or 3.8% to close at 51 sen on 6,500 shares traded.
Icon Offshore receives RM23m vessel contract
PETALING JAYA: Icon Offshore Bhd has bagged a RM23 million contract to provide one utility vessel to Hess Exploration and Production Malaysia B.V.
It told Bursa Malaysia that the contract is for a period of three years with two extension options of one year each.
The contract is expected to contribute positively to Icon Offshore's earnings, order book and net assets for the financial year ending December 31, 2018 and beyond.
The stock fell 4.2% to close at 11.5 sen with 9.68 million shares changing hands.
Green Packet plans 1-for-5 rights issue to raise up to RM52.57m
PETALING JAYA: Green Packet Bhd proposes a renounceable rights issue exercise to raise up to RM52.57 million for its business expansion plans.
The group told Bursa Malaysia that the rights issue entails an issuance of up to 150.2 million rights shares on the basis of one rights share for every five existing shares held, together with up to 450.61 million warrants on the basis of three warrants for every one rights share subscribed.
Based on an indicative issue price of 35 sen per rights share, the gross proceeds from the proposed rights issue are expected to be as much as RM52.57 million.
Proceeds raised will be used for the purchase of trade equipment, future viable investment, working capital for media and digital services, fintech solutions and general working capital.
Meanwhile, assuming the full exercise of warrants, Green Packet is expected to raise up to RM157.71 million. The warrants may be exercised at any time within five years from the issuance date.
The group said apart from expanding the business organically, it may also expand inorganically via mergers and acquisitions of businesses or investments that will be in the same, similar or complementary industry to that of its existing business.
It noted that the proposed rights issue with warrants will strengthen the group's financial position with enhanced shareholders' funds and reduced gearing level as compared with bank borrowings.
Green Packet shares closed 6 sen or 17.6% higher at 40 sen on 3.13 million shares done.