us growth


Trump tariffs a rounding error for US economy so far, that may change

WASHINGTON, June 16 ― US President Donald Trump's new trade tariffs will lop at most a couple of tenths of a per centage point off US growth and add a similar amount to inflation, small fry for a US$19 trillion (RM75.8 trillion) economy that is…

Nasdaq surges to end at record; Dow edges lower

NEW YORK: The Nasdaq surged to a fresh record on Thursday, boosted by higher media shares, as traders shrugged off trade-war worries amid signs of accelerating US growth.

The tech-rich Nasdaq Composite Index powered up 0.9% to 7,761.04, its second record in three days.

The Dow Jones Industrial Average dipped 0.1% to 25,175.31, while the broad-based S&P 500 climbed 0.3% to 2,782.49.

The mostly positive session came one day after the Federal Reserve accelerated its timetable for hiking interest rates in the face of strengthening growth and amid reports the White House is readying an announcement on Chinese tariffs for Friday.

Kate Warne, an investment strategist at Edward Jones, said investors were not panicking at the Fed's more aggressive posture since it signalled a better economy.

“Investors are actually reacting to the strength that is suggested in the economy rather than the potential effects of tighter monetary policy,” she said.

That optimism was propelled further by Thursday data showing better-than-expected May retail sales.

The market continues to monitor trade but has shifted from its earlier stance of reflexive selling off at headlines, Warne said.

Trade “has been looked at as something that the market will react to when it happens, as opposed to worrying about it,” she said. “Investors are taking much more of a wait-and-see approach.”

Adam Sarhan, the founder of 50 Park Investment, said the relative weakness of the Dow reflected the heavy representation in the index of exporters that are vulnerable in a trade war.

Boeing, Caterpillar and General Electric all fell Thursday.

Comcast jumped 4.6% after bidding $65 billion for key film and television assets of Rupert Murdoch's 21st Century Fox, topping an earlier offer from Disney. Disney climbed 2.3% and Fox won 2.1%.

Other media shares also advanced in anticipation that a federal judge's approval this week of the AT&T-Time Warner merger would lead to more consolidation.

Dish Network jumped 3.7%, Viacom 1.1% and Charter Communications 3.7%. — AFP

IMF: Trump's tariffs pose risk to global trade, US economy

WASHINGTON, June 15 ― The International Monetary Fund warned yesterday that US President Donald Trump's new import tariffs threaten to undermine the global trading system, prompt retaliation by other countries and damage the US economy. “Let us…

Malaysia to face continued selling pressure in coming months

KUCHING: Analysts have projected that Malaysia will face continued selling pressure in the coming months following rising concerns that credit rating agencies would put Malaysia on ratings watch due to the new government’s decision to cancel large scale infrastructure projects. According to the research arm of Kenanga Investment Bank Bhd (Kenanga Research), foreigners were net […]

Foreign holdings of Malaysian bonds at eight-year low

PETALING JAYA: Foreign holdings of Malaysian bonds fell to an eight-year low last month and selling pressure is expected to continue in the coming months, said Kenanga Research.

It said in a report today that the expected selling pressure is on the back of rising concerns that credit rating agencies would put Malaysia on ratings watch due to the new government's decision to cancel large scale infrastructure projects.

“The implementation of fuel subsidies and the removal of the Goods and Services Tax, which could weigh on the government's ability to meet its fiscal target, are adding pressure to sentiments.

“Additionally, the sudden resignation of Bank Negara Malaysia's (BNM) governor and the changes in several government-linked corporate heads are also expected to add uncertainty to the domestic bond market,” it said.

On the external side, rising expectations of an interest rate increase by the US Federal Reserve are seen weighing on regional bond markets. Note that the average Indonesian 10-year bond yield jumped to 7.18% in May while India's average 10-year bond yield has climbed to 7.78%.

Foreigners were net sellers of Malaysian debt securities for the second month in May, with RM12.9 billion sold. This marks the biggest drop in 14 months or since the record RM26.2 billion fall in March 2017.

“The outflow slashed foreign holdings share in Malaysian debt securities to the lowest in eight years (since June 2010) to 14.2%,” said Kenanga Research.

It said investor sentiments were rattled by the unprecedented outcome of the 14th general election and the subsequent news flow on Pakatan Harapan's policy decisions.

“External factors were also less encouraging as the US growth indicators point north, suggesting a more hawkish US Fed. Along with rising global trade tensions, demand for emerging market's bonds as a whole weakened in May,” it added.

Kenanga Research said the sell-off in May was broad based, across both short-dated and long-dated securities.

Short-dated securities registered the largest outflow in 14 months of RM2.3 billion. The 26.1% decline in foreign fund flows led to foreign holdings of total short-dated Malaysian bonds sliding to 53.9%.

Foreign holdings of long-dated securities (Malaysian government securities/MGS and government investment issue/GII) recorded the largest outflow in 14 months, at RM9.8 billion. As a result, its share slid to 25.9% of total long-dated debt, a 14-month low.

“Consequently, the average local benchmark 10-year MGS bond yields surged to 4.17% in May. Meanwhile, the average yield gap between the benchmark US 10-year Treasury yields and the local 10-year MGS bond yields widened to 120 basis points from 116 basis points the preceding month,” Kenanga Research said.

On the brighter side, the issue of the new benchmark 20-year MGS drew good demand, signalling investors' confidence in the long-term outlook of the local bond market.

Kenanga Research expects a gradual relaxation of the foreign exchange administration rules that were implemented during the former BNM governor's time, to lure foreign capital. Hence, it retained its view on capital flight, which is expected to continue in 2H18 before capital flows stabilise.

“As such, we remain optimistic of the long-term capital flow outlook which would provide BNM the flexibility to retain its Overnight Policy Rate at 3.25% to accommodate growth and meet its 5.5-6% economic growth target for this year,” it said.

Selling pressure to continue in equity, bond market

KUCHING: The selling pressure in Malaysia’s equity and bond market is expected to continue in the coming months due to prevailing uncertainties in both the domestic and global market, analysts observed. In May, foreign reserves declined for the first time in 17 months, primarily due to large outflow of foreign capital following the surprising defeat […]

Dollar falls, US yields rise, political fears ebb in Europe

NEW YORK, June 5 — The dollar fell to a two-week low and Treasury yields climbed yesterday as political tensions in Europe eased, while Wall Street stocks gained with technology shares as investors bet on continued strong economic growth….

Maybank appoints Michael Foong as new CEO, International

KUALA LUMPUR: Malayan Banking Bhd (Maybank) has appointed Michael Foong Seong Yew as CEO, International in addition to his role as group chief strategy officer with effect from June 1, 2018.

Foong takes over the leadership of International from Pollie Sim who retired from Maybank effective that same day.

Foong joined the group as chief strategy & transformation officer in 2011, and was appointed group chief strategy officer in 2014.

As an expert in strategy development and business transformation, Foong has made contributions to international when he oversaw, with the group president & CEO, the transformation programmes for Maybank Hong Kong, Maybank Philippines and Maybank Cambodia from 2014. In addition, he drove the adoption of new and enhanced digital platforms, partnering with group community financial services, for international business units since 2016. 

Prior to joining Maybank, Foong was the senior managing director of Accenture’s management consulting practice in Malaysia. He spent 17 years serving financial services clients throughout Asia, primarily banks but also including insurance companies and stock exchanges.

Michael holds a Master of Arts in Economics and Management Studies from Cambridge University, UK, and attended the Advanced Business Management Program from the Kellogg Graduate School of Management, Northwestern University, Chicago, USA.

Group President & CEO Datuk Abdul Farid Alias said Foong is the ideal candidate to take on the expanded role as CEO international to help achieve the group’s ambitious growth plans for its international operations.

“Given that the group targets to grow its international business at a more aggressive pace, Michael’s background, diverse skill-sets and wide experience in strategy development will be a pivotal advantage in leveraging the group’s regional footprint and charting the path for further growths in our international markets.”

US beats Hong Kong to reclaim global competitiveness crown

GENEVA, May 3 — The US dethroned Hong Kong to retake first place among the world’s most competitive economies, thanks to faster economic growth and a supportive atmosphere for scientific and technological innovation, according to annual rankings…

Japan's exports accelerate in April as volumes rise, outlook positive

TOKYO, May 21 — Japan's exports accelerated in April on increased shipments of cars and machines used to make semiconductors, with rising volumes suggesting healthy overseas demand could help the economy recover quickly from a dip in the first…