Croatia’s shipbuilders struggle to stay afloat

PULA (Croatia), Dec 19 — Late wages, mass strikes, scrapped contracts — Croatia’s once-thriving shipbuilding sector is sinking, in one of the last gasps of the region’s communist-era industrial giants. The towering cranes looming over Pula…

France to push ahead with digital tax starting January 1

PARIS: France will push ahead with its own tax on large internet and technology companies from January 1, Finance Minister Bruno Le Maire said, as the European Union struggles to finalise a new EU-wide levy. France has been driving hard for a new so-called ‘GAFA tax’ – named after Google, Apple, Facebook and Amazon – […]

MIDF: FBM KLCI to rebound to 1,830 by end-2019

KUALA LUMPUR: MIDF Research expects the benchmark FTSE Bursa Malaysia KLCI (FBM KLCI) to rebound to 1,830 by end-2019, supported by a recovery in corporate earnings.

Head of strategy and quantitative analytics Syed Muhammed Kifni Syed Kamaruddin said corporate earnings for 2019 are expected to grow by 5.8% as compared with 1.96% anticipated for this year.

“We also foresee that there are opportunities for investors to enter the market now, as the current composite index (CI) level is about 150 basis points lower than what we projected by end of 2019,” he told a market outlook media briefing today.

Syed Muhammed said the market price-earnings ratio valuation is also expected to improve to 16.2% from the current level of 15.8%.

With that, along with no further escalation in trade tensions between the United States and China, he said the 1,830 level target should be achievable.

However, he opined that Bursa Malaysia would be trading range-bound next year with profit-taking and performance-chasing activities taking place.

As for end-2018, he said the CI support level would be at 1,600, but it would trade higher should window dressing activities kick in.

On the ringgit, he foresees the local unit to mildly strengthen to RM4 against the US dollar by end-2019 from the current level of about RM4.18.

“This would be backed by the improvement in both crude oil and crude palm oil (CPO) prices,” he said.

He said benchmark Brent Crude was anticipated to trade higher at US$75 per barrel next year from the current level of about US$60 per barrel, following the Organisation of the Petroleum Exporting Countries agreement on a production cut, with the CPO to average at RM2,200 per tonne from the current RM1,960 per tonne.

“Subsequently, this will lead to the return of foreign funds into our markets, as we have seen outflow amounting to RM11 billion as of last week for this year,” he said.

Last year, the local equity market recorded more than RM10 billion of foreign fund inflow.

Commenting on the outlook for fund flows, head of research Mohd Redza Abdul Rahman said it would still boil down to corporate earnings.

“If the earnings are positive, share prices will follow and entice the foreign investors to come in,” he said, adding that Bursa Malaysia is still defensive compared with regional peers.

“This would help investors find shelter here amid the uncertainty,” he added.

According to MIDF Research’s statistics, the KLCI’s gains slid 6.8% between January and last Friday, while the MSCI Asia Pacific Ex-Japan Index fell 15.4% and the MSCI Emerging Markets Index retreated 16% in the same period.

Asia stocks slide as global growth worries deepen

TOKYO, Dec 18 ― Asian share markets slumped today as heightened concerns about a slowing global economy sent Wall Street stocks skidding to their lowest levels in more than a year. MSCI's broadest index of Asia-Pacific shares outside Japan shed…

Sterling edges up as UK PM May reschedules Brexit vote for January

LONDON, Dec 18 ― he pound edged off 20-month lows yesterday as British Prime Minister Theresa May rescheduled a delayed vote in parliament on her Brexit plan for mid-January. Sterling, trading at US$1.26 (RM5.26), inched higher as May confirmed…

China trade steps seen as a good start, but more needed

WASHINGTON: The United States has welcomed Chinese concessions since the two declared a trade war truce in early December, but trade experts and people familiar with negotiations say Beijing needs to do far more to meet US demands for long-term change in how China does business. US President Donald Trump and his Chinese counterpart, Xi […]

Tenaga’s continued ICPT in 1H19 ‘not unexpected’

KUCHING: Analysts were not overly surprised by the extension given for the Imbalance Cost Past-Through (ICPT) up to the first half of 2019 (1H19) as announced by Tenaga Nasional Bhd (Tenaga Nasional). The peninsula power supplier last Friday said that the government, via the Energy Commission (EC), had approved the continuation of the ICPT for […]

India holds off raising import tariffs on some US goods until Jan 31

NEW DELHI, Dec 17 — India has held off until end-January 2019 raising tariffs on select goods from the United States, deferring for the fourth time retaliatory action against higher import tariffs imposed by the US on steel and aluminium, the…

IMF says China-US trade row affecting Asian business confidence, investment

TOKYO: Trade frictions between China and the United States are already affecting business confidence and investment in Asia, a senior International Monetary Fund (IMF) official said, warning that the fund could further cut its global growth forecasts in January.

Changyong Rhee, director of the IMF’s Asia and Pacific Department, said Japan and South Korea could be among countries in the region hit hardest by the trade war given their reliance on exports to China.

“Investment is much weaker than expected. My interpretation is that the confidence channel is already affecting the global economy, particularly Asian economies,” Rhee told Reuters.

“We see global growth a little bit slower than we forecast in October,” he said today.

Citing the potential fallout from the Sino-US trade war, the IMF cut its global growth forecast in October to 3.7% for both 2018 and 2019, down from 3.9% projected in July.

It expects Asia’s economic growth to slow to 5.4% next year from 5.6% projected this year.

Rhee said there was a chance the IMF could cut further its growth forecasts when it reviews them in January, given signs of slowdown not just in Asia but in Europe and the United States.

“Uncertainty is so large … uncertainty means you have upside potential as well as downside risk. At this moment, we believe the downside risk is a little bit higher,” he said.

On China, Rhee said it was not resorting to big-scale stimulus despite growing external headwinds, given the need to deal with long-term challenges such as curbing excess debt.

“They aren’t accelerating (stimulus) yet but taking the foot from the brake for the time being. But that doesn’t exclude the possibility that if the trade tension escalates, if growth goes down, they are ready to use stimulus,” he said.

“What we’re concerned and what we’re advising them is that the medium-term goals such as deleveraging are still important for financial stability,” Rhee added.

“So when they actually try to use stimulus, we hope they can use more fiscal policy rather than credit expansion.”

France to introduce own tax on large internet, tech firms

PARIS, Dec 17 — France will introduce its own tax on large internet and technology companies from January 1, Finance Minister Bruno Le Maire said today amid difficulties in finalising a new EU-wide levy. France has been pushing hard for a new…