economies

 
 

IMF: As China, US continue to borrow, mounting debt a global liability

WASHINGTON, April 18 — As world borrowing levels hit fresh records, the United States and China stand out among the biggest debtors, creating risks to the global economy, the International Monetary Fund said today. Mounting government deficits…


China offers carrots and stick as US trade tensions simmer

BEIJING, April 18 — China adopted a carrot and stick approach to the US yesterday as the risk of a trade war between the two powerhouse economies continued to simmer. At the same time that Beijing promised foreign car makers such as Ford Motor…


IMF sees emerging Asia as top global growth engine

BEIJING, April 17 — The IMF said today it remains upbeat about the economic prospects of emerging Asia, labelling the region “the most important engine of global growth” despite concerns over trade disputes and mounting debt. The…


Trade curbs, tighter funding the ‘top risks’

SINGAPORE: Trade restrictions and tighter funding conditions pose more of a risk to the region compared to interest rate shocks and geopolitical tensions, said Moody’s Investors Service.

Trade protectionism and the unexpected tightening of funding conditions were each named by 42% of participants as the main downside risk to the region, according to Moody’s “Cross-Sector – Malaysia – Heard From the Market: Trade Restrictions, Tighter Funding Conditions Are Top Risks” report.

Participants were polled on various topics at the recent annual Inside Asean – Spotlight on Malaysia conference. Of the respondents, investors comprised 55%, intermediaries 19%, issuers 10% and others 16%.

Moody’s believes both economic powerhouses will avoid a major increase in trade restrictions despite the rising uncertainty and political risks, stemming from the US-China trade tensions – hence deeming geopolitical risks as a downside risk for global and regional outlook.

Household debt was another area of concern indicated by the respondents with 52.4% expressing concern over household debt over corporate sector debt. This is albeit the receding credit risk of the household sector which has decreased due to debt deleveraging, as household debt fell to 84.3% of gross domestic product at the end of 2017, from 88.3% in 2016.

While corporate credit quality risks are well balanced, household leverage represented a meaningful tail risk despite recent structural improvements.

As for interest rate shocks, Moody’s expects global interest rates to rise very gradually, which will be supportive of credit conditions in Malaysia.

“Moody’s view is that the recent correction in the global stock and bond markets has taken place against the backdrop of stronger growth and the inevitable normalisation of interest rates in advanced economies and that it does not alter the US and global outlook for growth.”

About 53% of the respondents are expecting stable credit conditions for domestic banks in 2018.

In line with that, Moody’s maintained a stable outlook on all the rated Malaysian banks, and expects the financial institutions to benefit from stable macroeconomic conditions. Nonetheless, 63% of the respondents expect global and regional credit conditions will be broadly stable in the near term.

On the adoption of electric vehicles (EVS) in Malaysia, 41% thought that EVs would account for only 1%-5% of all new vehicles sold by the mid-2020s, while 23% said they will account for less than 1%.

“Moody’s also expects the impact from the adoption of EVs to be modest in the emerging markets, including in South and Southeast Asia. It expects that oil demand will continue to grow until 2040,” the rating agency said.


Trade curbs, tighter funding seen as ‘top risks’ to region: Moody’s poll

SINGAPORE: Trade restrictions and tighter funding conditions pose more of a risk to the region compared to interest rate shocks and geopolitical tensions, said Moody’s Investors Service.

Trade protectionism and the unexpected tightening of funding conditions were each named by 42% of participants as the main downside risk to the region, according to Moody’s “Cross-Sector – Malaysia – Heard From the Market: Trade Restrictions, Tighter Funding Conditions Are Top Risks” report.

Participants were polled on various topics at the recent annual Inside Asean – Spotlight on Malaysia conference. Of the respondents, investors comprised 55%, intermediaries 19%, issuers 10% and others 16%.

Moody’s believes both economic powerhouses will avoid a major increase in trade restrictions despite the rising uncertainty and political risks, stemming from the US-China trade tensions – hence deeming geopolitical risks as a downside risk for global and regional outlook.

Household debt was another area of concern indicated by the respondents with 52.4% expressing concern over household debt over corporate sector debt. This is albeit the receding credit risk of the household sector which has decreased due to debt deleveraging, as household debt fell to 84.3% of gross domestic product at the end of 2017, from 88.3% in 2016.

While corporate credit quality risks are well balanced, household leverage represented a meaningful tail risk despite recent structural improvements.

As for interest rate shocks, Moody’s expects global interest rates to rise very gradually, which will be supportive of credit conditions in Malaysia.

“Moody’s view is that the recent correction in the global stock and bond markets has taken place against the backdrop of stronger growth and the inevitable normalisation of interest rates in advanced economies and that it does not alter the US and global outlook for growth.”

About 53% of the respondents are expecting stable credit conditions for domestic banks in 2018.

In line with that, Moody’s maintained a stable outlook on all the rated Malaysian banks, and expects the financial institutions to benefit from stable macroeconomic conditions. Nonetheless, 63% of the respondents expect global and regional credit conditions will be broadly stable in the near term.

On the adoption of electric vehicles (EVS) in Malaysia, 41% thought that EVs would account for only 1%-5% of all new vehicles sold by the mid-2020s, while 23% said they will account for less than 1%.

“Moody’s also expects the impact from the adoption of EVs to be modest in the emerging markets, including in South and Southeast Asia. It expects that oil demand will continue to grow until 2040,” the rating agency said.


Japan finance minister suspects US wants bilateral FTA

TOKYO, April 17 — Japanese Finance Minister Taro Aso said today he suspects the United States wants a bilateral free-trade agreement, but he reiterated Japan’s preference for Washington to join the multi-lateral Trans-Pacific Partnership (TPP)….


China boosts holdings of US Treasuries by most in six months

BEIJING, April 17 — China’s holdings of Treasuries rose by the most in six months, underscoring the attractiveness of US assets even amid trade tensions between the world’s two largest economies. China’s ownership of US bonds, bills and…


Trump: US will only rejoin Pacific trade pact if terms are improved

WASHINGTON, April 16 ― US President Donald Trump said the United States would only join the Trans Pacific Partnership, a multinational trade deal his administration walked away from last year, if it offered “substantially better” terms than…


China’s economy brushes aside Trump to power ahead in 2018

china-city_20180416121005_bloomberg

April 16): Forget about trade wars, debt mountains, regulatory crackdowns and even the hullabaloo surrounding Xi Jinping becoming China’s perpetual president. The economy is expected to have tuned out all the background noise and powered ahead in the first quarter. According to the median estimate of economists in a Bloomberg News survey, growth maintained a 6.8 percent pace, well ahead of a target for about 6.5 percent expansion this year. The report is due for release Tuesday at 10 a.m. in Beijing, along with retail sales and industrial production dataRead More


VW Truck chief gears up for ‘next level’ after step toward IPO

FRANKFURT, April 15 — Volkswagen AG’s trucks chief wants to take his division to “the next level,” with the German manufacturer considering a stock listing that would catapult the US$37-billion (RM143.5 billion) unit into the blue chip…