Economy

- A + A BANGKOK (June 27): A tightening of Thai monetary policy will be conducted so it does not disrupt the recovery of Southeast Asia's second-largest economy, central bank officials said on Monday, reinforcing market expectations of interest rate hikes later this year. Thailand's economy will continue growing this year and next, driven by domestic demand and tourism, and could beat forecasts despite a risk that inflation will be higher than expected, Bank of Thailand (BOT) officials told an analysts' meeting. The BOT will try to prevent the economy from overheating, which would cause demand-driven inflation, by gradually shifting from the current very accommodative policy, assistant governor Piti Disyatat told the meeting. The BOT's task was to help the economy take off smoothly, he said. "It's a challenge for monetary policy to release the accelerator pedal appropriately and timely so that the recovery has good momentum," Piti said, referring to the current … [Read more...] about Thai central bank says policy tightening will not disrupt economy recovery

Jeong Jae-hong The author is an international affairs and security editor of the JoongAng Ilbo. Gustavo Petro was elected president of Colombia on June 19. According to an analysis in the Washington Post, Columbia, ruled by right-wing politicians over 200 years, elected a left-wing president because the middle-class collapsed due to the Covid-19 pandemic and voters wanted the government to ease economic inequality. Brazil is scheduled to have a presidential election on October 2, and leftist former president Luiz Inácio Lula da Silva, commonly known as Lula, is getting over 50 percent of support. In addition to Mexico, Argentine, Chile, Peru and Columbia, another left-wing administration is about to launch in Brazil, too The left-wing wave in Latin America largely resulted from right-wing administrations’ failure to cope with the pandemic and the collapse of the middle class in the region. The middle class is the bastion of democracy. A country with a strong middle class … [Read more...] about A class above all others

- A + A SHANGHAI (June 27): China's yuan edged up against the dollar on Monday (June 27) after Shanghai declared victory against Covid-19 over the weekend, but gains were limited ahead of more convincing signs of a recovery. Shanghai, the country's commercial hub, will gradually resume dining-in at restaurants from June 29 after the city's Communist Party chief declared victory in the battle against the latest wave of Covid-19 shocks that put the city under lockdown for two months. Shanghai lifted a two month citywide lockdown on June 1, but many establishments have remained unable to offer indoor dining since mid-March. Traders said the news lifted market sentiment, but investors remained cautious and looked to data to gauge the pace of the economic recovery before placing huge bets on the currency. June economic indicators, including official factory activity data, are due later this week. Prior to market opening, the People's Bank of China (PBOC) set the … [Read more...] about Yuan edges up as Shanghai declares Covid-19 victory; outlook remains cautious

- A + A (June 27): Hong Kong’s exports surprisingly declined in May as trade with China continued to face disruptions from Covid and other global headwinds stalled momentum. Overall exports slid 1.4% last month from a year earlier, reversing April’s 1.1% gain, the Census and Statistics Department said Monday. Economists had expected an improvement of 4.3%. Imports rose 1.3% in May from a year earlier, also worse than economists’ forecast of a 4.8% expansion. The trade deficit was HK$36.7 billion (US$4.7 billion), worse than estimates and the fourth straight month the city has recorded a deficit. May’s decline in exports comes after an unexpected uptick improvement in April, when exports to China were still falling but not as severely as in March. This time around, trade with China fell 10.1%, worse than April’s 9.4% drop, the statistics bureau said. The decline in the value of exports was attributed to “increasing headwinds” faced by the global economy, the … [Read more...] about Hong Kong exports post surprise fall on China curbs, global woes

- A + A MUMBAI/MANILA (June 27): Signs of distress flashing in bond markets suggest the world's poorest nations are set to see a wave of debt restructurings. But a growing cohort of investors say that is a buying opportunity. Panic selling in the aftermath of Sri Lanka's economic collapse has sent the average yield in junk-rated emerging economies to almost 900 basis points above US Treasuries, the highest risk premium in 13 years except for the Covid-19-related rout in 2020, according to JPMorgan Chase & Co data. Yet, initial fears about a widespread default Armageddon across emerging markets is easing, and money managers are looking beyond the handful of countries that may reschedule their debt. This shift in perception means at least some smaller developing nations, called frontier markets, have been unduly punished in the recent sell-off and now offer highly attractive yields. Even in the event of debt restructuring, their bonds will offer greater recovery … [Read more...] about Frontier-debt buyers look past default risk in hunger for yield

- A + A KUALA LUMPUR (June 27): Costlier crude oil along with a stronger US dollar will erode Spritzer's Bhd profit margin, the bottled water producer admitted. "Costlier oil will translate into costlier PET resin, which is the main raw material used in making the [plastic] bottles. "PET resin is normally quoted in US dollar so a stronger US dollar would mean we will have to pay more for our PET resin," a company representative said in a brief email reply to theedgemarkets.com recently, when asked about the impact of surging oil prices on its manufacturing costs. According to the US-based PET Resin Association, PET — which is short for polyethylene terephthalate, the chemical name for polyester — is a clear, strong, and lightweight plastic made from crude oil and ethane extracted from natural gas that is widely used for packaging food and beverages, especially convenience-sized soft drinks, juices and water. Following Russia's incursion into Ukraine, oil prices … [Read more...] about Spritzer admits costlier crude oil, stronger US dollar will erode its profit margin

Malaysia's two leading ports posted a combined throughput of 24.9 million TEUs in 2021, with Port Klang (pictured) at 13.7 million TEUs and PTP at 11.2 million TEUs, their highest achievements. - A + A KUALA LUMPUR (June 27): Transport Minister Datuk Seri Dr Wee Ka Siong is hopeful that the combined container volume for Port Klang and Port of Tanjung Pelepas (PTP) will be close to last year’s record-breaking figure, despite the global supply crunch due to the Russia-Ukraine conflict. The nation's two leading ports posted a combined throughput of 24.9 million twenty-foot equivalent units (TEUs) in 2021, with Port Klang at 13.7 million TEUs and PTP at 11.2 million TEUs, their highest achievements. Noting that the Russia-Ukraine conflict had resulted in higher oil prices and a shortage of commodities, Wee said this had affected the performance of the ports. “This happened not only in Malaysia but worldwide. But I am still optimistic that these two ports will not … [Read more...] about Wee: Container volume at Port Klang, PTP expected to be near last year’s record level despite headwinds

- A + A PUTRAJAYA (June 27): The government is willing to bear the projected huge subsidy totalling RM77.3 billion for this year towards stabilising the prices of goods and avoiding high inflation rates of up to 11.4%, says Minister in the Prime Minister’s Department (Economy) Datuk Seri Mustapa Mohamed. He said the government had a choice of removing subsidies and strengthening the country’s finances to a better level, but it chose to bear the subsidies instead for the welfare and well-being of the people. Mustapa said the announcement on June 24 by Prime Minister Datuk Seri Ismail Sabri Yaakob of no increase in the water and electricity tariffs, and the chicken price not being floated showed the government’s caring side and commitment to maintaining the subsidies. Referring to the projected consumer subsidy expenditure amounting to RM77.3 billion for 2022, he said RM51 billion of it made up the biggest component of fuel, cooking oil, electricity, water, chicken … [Read more...] about Govt continues giving subsidies to stabilise prices, avoid high inflation

This article first appeared in The Edge Malaysia Weekly, on June 20, 2022 - June 26, 2022. - A + A IF Bank Negara Malaysia’s eight-member monetary policy committee (MPC) raises the overnight policy rate (OPR) by 25 basis points (bps) at its next scheduled meeting on July 6, it will mark its first back-to-back increase since mid-2010, when interest rates were normalised following the recovery from the 2008 global financial crisis. It will not be the first central bank to do so. Compared with just a month ago, more economists now (at the time of writing) reckon that a 25bps hike will happen in July, but many still think a pause is possible in July ahead of the Hari Raya Aidiladha celebrations. In any case, at least one more rate increase (if not two) is expected to take place by the conclusion of the Sept 8 meeting to bring the OPR to at least 2.25% (if not 2.5%), consensus data show. “Our house has also shifted expectations for Bank Negara to frontload … [Read more...] about The State Of The Nation: What the Fed’s 75bps hike and near 4% terminal rate mean for the OPR

This article first appeared in The Edge Malaysia Weekly, on June 20, 2022 - June 26, 2022. - A + A THE momentum to adopt environmental, social and governance (ESG) criteria and sustainability practices in the capital market has picked up significantly in the past few years. By the third quarter of 2021, assets in global sustainable funds hit a record high, according to investment research firm Morningstar. At the same time, more than 70 countries — including the biggest polluters — have set a net-zero target and over 1,200 companies have put in place science-based targets to reach net-zero emissions, according to the United Nations. In Malaysia, at least 44 out of the 54 Sustainable and Responsible Investment (SRI) funds approved by Securities Commission Malaysia were launched in the last two years. As at December 2021, 94% of the top 50 listed companies in Malaysia had ESG strategies and 68% had emissions reduction policies, according to PwC’s research. … [Read more...] about HONOURING MALAYSIA’S BEST PERFORMERS IN ESG EXCELLENCE: The Edge to roll out Malaysia’s first ESG awards