BANGKOK, December 13 -- The sentiment across broader Asia seemed less pessimistic about the trade deal, with MSCI's broadest index of Asia-Pacific shares outside Japan edging up 0.8%.
Optimism about improving relations between the two superpowers grew after China made its first major US soybean purchases in more than six months on Wednesday, two US traders said, and its first since US President Donald Trump and his Chinese counterpart Xi Jinping struck a trade war truce in early December.
The SET index closed 19.89 points or 1.22% lower to 1,614.99, in trade worth 52.5 billion baht. The market hit their lowest since Nov 22. Shares of PTT Plc plunged to their lowest in more than four months at 47.50 baht, while those of PTT Exploration and Production PCL fell 6.7% to 125 baht. Oil prices were flat on Thursday under pressure from high inventories but buoyed by a drawdown in US crude stockpiles.
Indonesia's benchmark index climbed to a more than seven-month high, aided by consumer staples and telecom stocks. Shares of cigarette maker Gudang Garam Tbk PT added 1.8%, while those of Telekomunikasi Indonesia (Persero) Tbk Perusahaan Perseroan PT rose to its highest in more than a week.
However, the Southeast Asia's largest economy is expecting foreign direct investment to the country to be around $11 billion to $13 billion this year, less than the average in recent years of $20 billion per year. Philippines benchmark index eked out their third straight sessions of gains, rising to one-week high.
Meanwhile, the Philippine central bank held its benchmark interest rate steady on Thursday, as expected, in line with the outlook for the inflation rate to cool. The apex bank had raised rates by a total 175 basis points so far this year, at the past five consecutive meetings to tame inflation.
Singapore benchmark index climbed a near one-week high, while that of Malaysia added 0.8%.
HONG KONG, December 5 -- Traders put the brakes on a three-day roll of gains in the battered markets of mainland China and Hong Kong, as concerns mounted about a slowing US economy following a slump in the Treasuries yield and President Donald Trump’s tweets added to confusion about the progress in trade talks.
In Wednesday morning trading, the Shanghai Composite Index slipped 0.4 per cent and the Hang Seng Index sank 1.5 per cent. Benchmarks across Asia all fell, with Japan’s Nikkei 225 index falling 1.4 per cent.
The regional sell-off came as US traders increased their buying of bonds and unwound their equity holdings amid concerns growth of the world’s largest economy may have already peaked. Major US stock gauges had their biggest slide since October in overnight trading, with the Dow Jones Industrial Average, the Standard and Poor’s 500 Index and the Nasdaq Composite Index all falling at least 3.1 per cent. Meanwhile, the yield on 10-year treasuries tumbled to 2.91 per cent.
The further flattened yield curve suggested that bond traders were pricing in weaker growth going forward. Traders also had their eyes on the yield gap, as three-year yields climbed above those of their five-year peers, potentially foreshadowing that the Federal Reserve will end the current cycle of raising interest rates.
“The risk of slowing US growth is looming so there is a risk-averse sentiment in the equity market,” said Dai Ming, a fund manager at Hengsheng Asset Management in Shanghai. “If the slowdown is sharp, the global markets will be in for bigger turmoil.”
Sentiment was also dented as investors reassessed the outlook of the trade tension between China and the US after the top leaders from the two nations reached a 90-day truce over the weekend. Trump suggested Tuesday that he could extend the truce with China, while his top White House economic adviser backtracked from the president’s announcement that Beijing had agreed to reduce tariffs on imports of US-made cars.
The Shanghai Composite Index lost 11.70 points to 2,653.80. The Hang Seng Index shed 419.73 points to 26,840.71 and the Hang Seng China Enterprise Index, or the H-share gauge, dropped 1.4 per cent.
In the mainland, stocks linked to the investment theme of a technology board on the Shanghai exchange tumbled after the regulator increased scrutiny of trading. Luxin Venture Capital Group slumped by the 10 per cent daily limit to 16.71 yuan and Kunwu Jiuding Investment Holdings also plunged by the magnitude to 19.03 yuan. Both stocks had at least more than doubled over the past two months after Xi unveiled the plan in the import expo in November.
In Hong Kong, companies with most exposure to the US market led the decline. Sunny Optical Technology Group sank 6.6 per cent to HK$74.55 and AAC Technologies retreated 3.4 per cent to HK$54.80.
NEW YORK, December 1 -- As reported by Ethereum World News previously, Bitcoin (BTC) and its altcoin brethren posted a strong performance in recent days, with BTC surging convincingly above $4,000 on Wednesday.
While the asset held its value for over 24 hours, on Friday morning, following a short stint of range trading between $4,100 and $4,300, BTC faltered, stumbling and falling under $4,000 for the third time in a few weeks. In a matter of four hours, BTC fell from $4,225 to a daily low at $3,900, a ~7% decline, which seemingly came unprompted. Altcoins quickly followed the market leader, with industry darlings, XRP, Ethereum (ETH), Stellar Lumenx (XLM), and dozens of others posting mid-single-digit losses around 5-6%. As a result of this sell-off, a common sight in recent weeks, the aggregate value of all crypto assets fell to $130.6 billion, down from the $140 billion weekly high established on Wednesday.
Bitcoin’s most recent move under $4,000 comes just days after some optimists claimed that the worst was behind this asset class, recently called the best performing by Anthony Pompliano of Morgan Creek Digital.
And as such, analysts took to their usual soapboxes to tout their most recent claims, some of which were foreboding and painted a dismal picture for Bitcoin. A series of analysts at U.K.-based FX Pro Insights, a market research firm, told MarketWatch that the sudden move under $4,000 was catalyzed by short-term traders looking to secure profits, rather than an underlying fundamental factor.
The forex-centric analysts went on to pose a rhetorical, yet intriguing million-dollar question, asking if Bitcoin truly bottomed at $3,400 last week, the lowest the asset has been since mid-September 2017 post-China crackdown on cryptocurrencies. This sentiment interestingly lines up with other industry insiders, many of which claim that while BTC has suffered already, there could be one leg lower, before a long-term bottom is truly established. Michael Bucella, an executive at Goldman Sachs’ Canada branch turned into a BlockTower partner, recently took to CNBC to claim that while bitcoin is nearing the end of its “distress cycle,” the next phase will be a violent capitulation before a rapid rebound.
WASHINGTON, November 28 -- A trade deal is unlikely between the U.S. and China when President Donald Trump meets his Chinese counterpart on the sidelines of the Group of 20 summit in Buenos Aires later this week, majority analysts polled by International Business Times said.
More important, 14 of the 15 analysts polled do not see the U.S. and China hammering out a trade deal before Dec. 31, or for that matter, within the next six months. Only one analyst expects a deal before the year-end. But the analysts say any optimistic vibes from the meeting could lead to some positive steps on tariffs, although not an outright deal, that could keep the heat of the trade war from rising further. They see a positive meeting between Trump and Xi leading to the U.S. agreeing to hold off on raising tariffs on $200 billion of Chinese goods, from 10 percent to 25 percent, as scheduled on Jan. 1, 2019.
Yung Yu-Ma, the chief investment strategist at BMO Wealth Management, said the “likelihood of an actual deal is very low” at the G20 Summit, adding it is more realistic to expect “some positive statements about both sides coming closer to an agreement or continuing negotiations.” “If there are such positive statements, then probably (there is) a 60 percent chance of postponement of tariff increases while negotiations take place,” he said. “If no such positive statement, then probably only a 20 percent chance of postponement.” Ryan yan Sweet, director of real-time economics at Moody’s, echoed the view. He said the two sides could reach a “partial trade agreement” at the G20 summit and “agree not to further increase tariffs while they iron out the other sticky points.”
The analysts say the standoff between the U.S. and Chinese delegations at the recently concluded Asia-Pacific Economic Cooperation (APEC) meeting has diminished the prospect of a deal at the upcoming G20 meeting. For the first time in APEC’s 25-year history, the 21 participant countries failed to come up with a joint statement because they could not arrive at a consensus over a paragraph on trade.
Luc Vallée, chief strategist at Laurentian Bank said “the probability of a short-term deal appears lower than ever. It does not mean that a deal is impossible, nor that extra tariffs by the U.S. on Chinese goods will be enacted next January. Negotiations will continue for a while and only if there is a dead-end, expect 25 percent tariffs on the entire $530 billion (Chinese) exports.” Chief economist Brian Wesbury at First Trust Advisors is the lone analyst among the 15 who expects a deal before the year-end. But even he does not see a deal at the G20 summit because “it seems China is willing to comply with U.S. requests quietly, rather than publicly.”
THE HAGUE, November 24 -- The Dutch government is introducing tough new conditions for advance tax rulings from next July, with the aim of weeding out thousands of shell companies which use the Netherlands to avoid tax.
In addition, the tax office will publish anonymised summaries of each rulings on its website in an effort to boost transparency, tax minister Menno Snel said on Friday. ‘Lots of people think that tax rulings are coupled with dodgy practices,’ Snel said. ‘But a ruling does no more than give a company clarity in advance about taxes, based on the law.’ However, to prevent the Netherlands being used as a clearing house for tax havens, the advance tax ruling laws are being tightened up and made more transparent, Snel said. From next year, companies applying for a ruling will have to have ‘substantial economic activities’ in the Netherlands, rather than just a letter box. In addition, the amount money flowing through the company must be in line with its activities in the Netherlands. ‘For example, it would not be logical if a distribution centre with a workforce of 100 was busy managing billions of euros in loans,’ the finance ministry said. All international rulings will be checked in advance by a special panel of experts and rulings will only run for a maximum of five years.
SHANGHAI, November 22 -- The recent sharp decline of the Bitcoin has making many miners in China hard to make money, as the price has fallen below the cost of mining for some in the country, leaving some with no choice but to "shut down".
Accordin to the Luxembourg-based Bitstamp, Bitcoin briefly fell to $4,237 before climbing back to over $4,700 on Tuesday, slumping as much as 17 per cent within 24 hours. The price for the cryptocurrency in China has dropped below 30,000 yuan.
LONDON, November 20 -- Bitcoin tumbled by more than 7.5 percent today to below US$4,500.
It's knocking off nearly a third in value of the world's best-known crypto currency's losses within a week as a selloff in digital currencies intensified across the board.
Other crypto currencies also fell sharply, with Ethereum's ether losing 10 percent and Ripple's XRP down 13 percent in a largely sentiment-driven slide, Reuters reports.
Bitcoin is now trading at US$4,354.20, its lowest level on the Bitstamp exchange since October 2017.
NEW YORK, November 20 -- OPEC has lost what control of the oil market it ever had.
The actions (or tweets) of three men — Presidents Donald Trump and Vladimir Putin and Crown Prince Mohammed Bin Salman — will determine the course of oil prices in 2019 and beyond. But of course they each want different things. While OPEC struggles to find common purpose, the U.S., Russia and Saudi Arabia dominate global supply. Together they produce more oil than the 15 members of OPEC. All three are pumping at record rates and each could raise output again next year, although they may not all choose to do so.
It was Saudi Arabia and Russia that led the push in June for the OPEC+ group to relax output restraints that had been in place since the start of 2017. Both subsequently jacked up production to record, or near record, levels. U.S. output soared unexpectedly at the same time, as companies pumping from the Permian Basin in Texas overcame pipeline bottlenecks to move their oil to the Gulf coast.
These increases, alongside smaller downward revisions to demand growth forecasts and President Trump’s decision to grant sanctions waivers to buyers of Iranian oil, have flipped market sentiment from fears of a supply shortage to concerns about a glut in the space of three months. Oil stockpiles in the developed nations of the OECD, which had been falling since early 2017, are rising again and are likely to exceed their five-year average level when October data are finalized, according to the International Energy Agency.
As oil prices have headed south, Saudi Arabia said it would cut exports by 500,000 barrels a day next month and warned fellow producers that they needed to cut about 1 million barrels a day from October production levels. That drew a lukewarm response from Putin and swift Twitter rebuke from Trump.
Bin Salman needs oil revenue to fund his ambitious plans to transform Saudi Arabia, while avoiding unrest from those hurt in the process. The International Monetary Fund forecasts that the kingdom will need an oil price of $73.3 a barrel next year to balance its fiscal budget. Brent crude is trading about $5 below that, with Saudi Arabia’s exports trading at a discount to the North Sea benchmark. Prolonging output cuts for a third year is the only way he can realize the price he needs.
He will face more challenges from Putin and Trump. The Russian president shows no great enthusiasm for restricting his country’s production again. Moscow’s budget is much less dependent on oil prices than it was when Russia agreed to join OPEC-led efforts to re-balance the oil market in 2016 and the country’s oil companies want to produce from the fields where they have invested.
Putin may yet decide that maintaining his improved political relationship with MBS, as the Crown Prince is known, is worth a small sacrifice. But it’s not a foregone conclusion that Russia will agree to extend output cuts when producers gather in Vienna next month. Putin says oil prices of around $70 a barrel suit him “completely.”
The opposition from Trump will — naturally — be much louder and comes at a time when he and MBS are trying to preserve their political relationship, while American senators consider harsher sanctions on Saudi Arabia in response to the war in Yemen and the killing of dissident journalist Jamal Khashoggi.
A bigger U.S. threat to Saudi plans than Trump’s tweets will come from the Texas oil patch. American producers have added a volume equivalent to the entire output of OPEC’s Nigeria in the past 12 months. Their production could reach 12 million barrels a day by April, according to the Department of Energy. That’s six months sooner than it was forecasting just a month ago and 1.2 million barrels a day more than it foresaw in January.
Saudi Arabia will have to risk Trump’s wrath, Putin’s indifference and a booming U.S. shale industry if it hopes to balance the oil market in 2019.
BEIJING, November 17 -- China’s stock exchanges in Shanghai and Shenzhen have published new rules on delisting companies involved in fraud or that have violated rules on information disclosure requirement, in efforts to improve corporate governance in the world’s second largest economy.
The Shanghai bourse said in a statement on Friday that the new rules set stricter procedures related to suspension or delisting after the government pledged to clean up the corporate sector to improve the quality of listed companies and securities regulator amended rules on the criteria for delistings in July to beef up corporate governance.
The new rule come amid long-time complaints from investors over a flawed system for delisting unqualified firms, which become even louder while regulators strive to push for more and easier listing to help companies get financing. Many say, when more are coming to the market, bad ones should leave.
The most important part of is that the new rule specify the illegal activities by companies which will trigger forced delisting.
Accompanying the release of the new rules, the Shenzhen Stock Exchange announced that it had started the process of delisting the Changsheng Biotechnology, a Chinese vaccine maker which sparked public outrage earlier this year for producing fake vaccines and was fined 9.1 billion yuan.
LONDON, November 15 -- The pound is plummeting against the euro and the majority of its other peers today as markets react to the resignation of Brexit secretary Dominic Raab.
Raab’s resignation comes hot on the heels of the news that Theresa May had secured the backing of her Cabinet for a draft Brexit deal with the EU. The announcement of which helped to stabilise Sterling after a chaotic day of trade on Wednesday. Announcing his resignation on Twitter, Mr Raab stated he could not “in good conscience support the terms proposed for our deal with the EU”.
One of the top authors of The Peet Journal is Pete McGea. As a native born Scotsman, Pete
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