Australia plays down reports of Chinese coal ban

SYDNEY: Canberra on yesterday played down reports a major Chinese port had banned coal imports from Australia, as fears grow that worsening diplomatic tensions are damaging the nations’ crucial trading relationship. Industry experts have noted recently that China appeared to be delaying customs clearances for Australian coking coal used in steel-making, but a report late […]

China sees ‘enormous potential’ in Saudi Arabia’s economy

BEIJING: China sees ‘enormous potential’ in Saudi Arabia’s economy and wants more high-tech cooperation, the Chinese government’s top diplomat said, as Saudi Crown Prince Mohammed bin Salman began a two-day trip to Beijing. The Saudi delegation, including top executives from Aramco, arrived on Thursday on an Asia tour that has already seen the kingdom pledge […]

Fitch affirms Malaysia’s rating at ‘A-’, outlook stable

KUALA LUMPUR: Fitch Ratings has affirmed Malaysia’s long-term foreign-currency issuer default rating (IDR) at ‘A-’ with a stable outlook. The ‘A-’ rating reflects higher growth rates than the peer median and a net external creditor position which is supported by steady current account surpluses and large external assets. However, the rating is constrained by high […]

FBM KLCI likely to hit 1,760 pts this year

PETALING JAYA: The benchmark FTSE Bursa Malaysia KLCI (FBM KLCI) is likely to hit 1,760 points this year due to a reversal in the foreign funds outflow on the back of positive external developments, coupled with a cheaper ringgit and better corporate earnings growth, said Rakuten Trade Sdn Bhd. Head of research Kenny Yee said […]

US stocks rise as trade talks lift hopes

NEW YORK, Feb 22 — US stocks rose at the open today, with spirits buoyed by hopes for progress in high-stakes US-China trade negotiations. The positive start to the day followed yesterday’s dip on fears of declining global growth after a batch…

Global equities climb on hopeful trade talk vibes

LONDON, Feb 22 — World stock markets advanced today as investors awaited what they hoped will be encouraging news from US-China trade talks in Washington, dealers said. Europe’s key equity markets were up to around 0.5 per cent higher, building…

Trump to meet Chinese trade negotiator amid effort to defuse conflict

WASHINGTON, Feb 22 — President Donald Trump is due to meet this afternoon with China’s top trade negotiator, as talks continue to try to defuse the escalation of the tariff war between the world’s economic superpowers. The fourth round of…

Germany under fire for Saudi arms export ban

BERLIN, Feb 22 — Export power Germany has long had a troubled relationship with selling arms abroad, a legacy of its dark history that is now spelling deep discord with its European allies. Chancellor Angela Merkel’s government has recently…

Fitch affirms Malaysia’s ‘A-’ rating, with stable outlook

PETALING JAYA: Fitch Ratings has affirmed Malaysia’s long-term foreign-currency issuer default rating (IDR) at ‘A-’ with a stable outlook.

The rating agency said the ‘A-’ rating reflects higher growth rates than the peer median and a net external creditor position which is supported by steady current account surpluses and large external assets.

However, it said the rating is constrained by high government debt, low per capita income levels and weak standards of governance relative to rating peers.

Meanwhile, Fitch sees downside risks to the government’s 2019 deficit target, which is based on an optimistic oil price assumption of US$70 per barrel and above Fitch’s forecast of US$65 per barrel.

The 2019 budget targets a deficit of 3.4% of gross domestic product (GDP) in 2019 and 3% of GDP in 2020.

However, Fitch assumes that expenditure cutbacks will offset any revenue shortfall, and forecasts a general government deficit of 3.4% of GDP in 2019 (current ‘A’ median -1.7%), in line with the authorities’ target.

Nevertheless, Fitch said substantial non-oil revenue measures would be required for the government to meet its medium-term deficit targets unless oil prices recover, posing a risk to the fiscal outlook in Fitch’s opinion.

It forecasts general government debt-GDP to stabilise at around 62% in 2019 and 2020, above the current peer median of 49%.

“Our debt numbers include officially reported committed government guarantees. Beyond the fiscal risks outlined above, there are risks to debt containment from contingent liabilities related to public-private partnerships which may migrate to the sovereign balance sheet as the government continues to improve the transparency of public finances,” it said.

Fitch expects growth to slow to around 4.5% in 2019 and 2020 from 4.7% in 2018, on weaker export performance and slowing investment activity, but to remain above peers.

Meanwhile, Fitch said outlook for exports is uncertain because of trade tensions between the US and China and its expectations for low oil prices.

However, it said private consumption is likely to remain supportive of growth due to favourable labour market conditions and the government’s plans to disburse income tax and GST refunds of around RM37 billion during the year.

The growth outlook is subject to downside risk, as elsewhere in the region, from the slowdown in China and a further escalation of trade tensions with the US, it added.

Additionally, Fitch expects the current account surplus to narrow further in 2019 as demand for some key exports such as electronics, oil and liquefied natural gas is likely to stay weak.

The current account surplus declined to 2.3% of GDP in 2018 from 3% in 2017 on weaker exports of electronics and commodities.

Foreign-currency reserves fell in 2018 to US$101.4 billion (4.8 months of current external payments; current peer median 4.3 months) as Bank Negara Malaysia intervened during the year to dampen depreciation pressures.

However, Fitch said reserves have picked up subsequently as pressures on emerging markets subsided.

Meanwhile, it forecasts the banking sector’s performance to remain broadly stable despite some softening in growth and pockets of asset-quality risk in some sectors.

“Profitability among Fitch-rated banks should hold up well, and bank balance sheets to remain generally sound – which should help the sector weather unexpected shocks.

“The sector’s common equity Tier 1 ratio and liquidity coverage ratio of 13.1% and 143%, respectively, at end-2018 indicated healthy capital and liquidity positions in aggregate,” it added.

Iskandar Malaysia to be expanded, spanning more areas in Johor

PUTRAJAYA, Feb 22 — Iskandar Malaysia in southern Johor will be extended to 4,749 km square from the current 2,217 km square to include parts of the Kota Tinggi, Kluang and Pontian districts. Iskandar Regional Development Authority (IRDA), in a…