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TOKYO, April 18 — Japan’s government left its assessment of the economy unchanged in April, after a rare downgrade in March, saying the US-China trade war remained a threat to exports and economic growth. The Cabinet Office, which helps…
SAN FRANCISCO/SHANGHAI: Amazon.com Inc plans to close its domestic marketplace in China by mid-July, people familiar with the matter told Reuters, focusing efforts on more lucrative businesses selling overseas goods and cloud services in the world’s most populous nation.
Amazon shoppers in China will no longer be able to buy goods from third-party merchants in the country, but they still will be able to order from the United States, Britain, Germany and Japan via the firm’s global store. Amazon expects to close fulfillment centers and wind down support for domestic-selling merchants in China in the next 90 days, one of the people said.
The move underscores how entrenched, home-grown e-commerce rivals have made it difficult for Amazon’s marketplace to gain a foothold. Consumer insights firm iResearch Global said Alibaba Group Holding Ltd’s Tmall marketplace and JD.com Inc controlled 81.9 percent of the Chinese market last year.
“They’re pulling out because it’s not profitable and not growing,” said analyst Michael Pachter at Wedbush Securities.
Ker Zheng, marketing specialist at Shenzhen-based e-commerce consultancy Azoya, said Amazon had no major competitive advantage in China over its domestic rivals.
Unless someone is searching for a very specific imported good that can’t be found elsewhere, “there’s no reason for a consumer to pick Amazon because they’re not going to be able to ship things as fast as Tmall or JD,” he said.
Amazon’s customers in China will still be able to purchase the firm’s Kindle e-readers and online content, and the company’s local website, amazon.cn, will continue to exist, said the sources, who spoke on condition of anonymity. Amazon Web Services, the company’s cloud computing unit that sells data storage and computing power to enterprises, will remain as well.
The U.S.-listed shares of Alibaba and JD.com rose 1 percent on Wednesday after Reuters first reported the move, before paring gains later in the day. Amazon’s shares closed flat.
The withdrawal of the world’s largest online retailer – founded by Jeff Bezos, who later became the world’s richest person – comes amid a broader e-commerce slowdown in China. Alibaba in January reported its lowest quarterly earnings growth since 2016, while JD.com is responding to the changing business environment with staff cuts.
It also follows the Chinese e-commerce retreat of other big-name Western retailers. Walmart Inc sold its Chinese online shopping platform to JD.com in 2016 in return for a stake in JD.com to focus on its bricks-and-mortar stores.
Similarly, the country appears to factor less in the global aspirations of fellow U.S. tech majors Netflix Inc, Facebook Inc and Alphabet Inc’s Google, Wedbush Securities’ Pachter said.
Amazon bought Chinese online shopping website Joyo.com in 2004 for $75 million, rebranding the business in 2011 as Amazon China. But in a sign of Tmall’s dominance, Amazon opened an online store on the Alibaba site in 2015.
Amazon is still expanding aggressively in other countries, notably India, where it is contending with local rival Flipkart.
SAN FRANCISCO, April 18 ― Amazon.com Inc plans to close its domestic marketplace in China by mid-July, people familiar with the matter told Reuters, focusing efforts on more lucrative businesses selling overseas goods and cloud services in the…
PETALING JAYA: The ringgit weakened as much as 0.36% today to 4.1455 against the US dollar on fears over the possibility that Malaysia may be dropped from the FTSE World Government Bond Index (WGBI).
As at 5pm, the local unit was trading 0.15% lower at 4.1365 against the greenback. Over the past two trading days, it has depreciated 0.66%.
Meanwhile, on Bursa Malaysia, the FBM KLCI fell 8.56 points or 0.53% to 1,620.90 points against Tuesday’s close of 1,629.46. Market breadth was negative with 661 losers and 208 gainers.
Top losers were led by heavyweights such as Tenaga Nasional, Malayan Banking and Petronas Dagangan, which slipped 24 sen, 21 sen and 16 sen to RM12.06, RM9 and RM24.94, respectively.
On Monday, FTSE Russell said it may drop Malaysian debt from the WGBI due to concern about market liquidity.
Malaysia is currently assigned a ‘2’ on the WGBI and is being considered for a potential downgrade to ‘1’ which will render Malaysia ineligible for inclusion in the WGBI.
The review is due in September, which includes potentially adding Chinese bonds into the index. It was reported that the review started in January to increase transparency in managing country inclusion to FTSE Russell global fixed-income indices. Malaysia’s weight in the WGBI is less than 0.4%.
FXTM’s newly appointed market analyst Tan Chung Han expects the weakness in the ringgit to be transitory, as Malaysia’s resilient economy is still awaiting the next chance to make its case before the markets.
“The projected 4.3-4.8% GDP growth for 2019 remains higher compared to what many other major economies are expecting this year. However, sentiment surrounding the Malaysian currency is currently swayed by other factors which have led to the ringgit’s recent weakness against the US dollar, including external risks such as US-China trade tensions and slowing global growth,” he told SunBiz.
He said headlines about Malaysia’s possible removal from the index may have lent itself to fund outflows, contributing to the ringgit’s recent weakness.
“Even if it actually transpires (Malaysia’s removal from WGBI), active funds may still focus on Malaysia’s accommodative monetary policy stance and robust domestic economic fundamentals when making their investment decisions,” Tan added.
However, Tan pointed out that according to central bank data, foreign holdings of Malaysian bonds rose during the first quarter of 2019, pointing to an increasing appetite for Malaysian notes.
Bank Islam chief economist Dr Mohd Afzanizam Abdul Rashid said the ringgit’s weakness is a valid concern considering that Malaysia Government Securities (MGS) yields have come down quite considerably when the US Federal Reserve is expected to keep interest rates unchanged in 2019.
“If exclusion materialises, theoretically we could expect some impact on bond yields, especially by managers who track the FTSE index as their benchmark,” he said.
Reuters quoted Morgan Stanley as saying that Malaysia could see outflows of almost US$8 billion (RM33 billion) if its bonds are downgraded by global index provider FTSE Russell.
Foreign investors have been reducing their Malaysian government bond holdings since late 2016 and, as of late March 2019, held US$37 billion, Morgan Stanley said.
Macquarie said as foreigners are already underweight on MGS in Malaysia, the outflows may be less.
“However, the implication would be larger for other index providers such as the JP GBI-EM and Bloomberg Barclays Aggregate. Just these two indexes alone could represent US$15 billion of outflows if Malaysia is excluded,” it said in its sales commentary.