BANGKOK, February 9. -- Switching to mutual payments in the national currencies is an important area of focus in relations between Russia and Thailand, Russian Ambassador to Thailand Yevgeny Tomikhin told Russian reporters in the run-up to Diplomats’ Day.
"Not only Russia, but many other countries are discussing that issue", the diplomat said. "We are conducting such negotiations with a number of countries, primarily with those with which we have a large trade turnover". According to the ambassador, these schemes will be convenient for expanding business cooperation in the future. "This issue is on the agenda in our relations with Thailand," he stressed. "We have a working group tackling the issue of inter-bank cooperation. Its next meeting is expected to be held this year, and I believe that mutual settlements in the national currencies will be one of the focal points", he said. Tomikhin noted that work was in progress to develop bilateral military-technical cooperation. "Thailand is one of our promising partners in terms of military-technical cooperation," he emphasized. "[We will] try to work with our Thai partners in terms of searching for opportunities to expand this cooperation".
The ambassador noted that Thailand was pursuing an active foreign policy, including with regard to Russia. "I believe that cooperation with our counterparts at Thailand’s Foreign Ministry is very effective. We have established good relationship and cooperation, but we will try to promote cooperation in all areas in the future", he said.
KUALA LUMPUR, January 26 -- The apparent glut in the Malaysian property market would likely see a respite in March with the injection of stimulus and incentives.
The Southeast Asian country’s property market has been making headlines over the so-called glut and analysts noted that developers were partly to blame for building properties that were not aligned with the demands. This has led to RM19.54 billion (US$4.7 billion) in unsold homes last year, of which most of them involved units priced over RM500,000 (US$120,481) and above per unit.
However, Michael Geh, of Fiabci Malaysia, said this property downturn in the Southeast Asian country could be reversed once the newly-created National Housing Policy takes effect and when implementors announced their findings and recommendations. “There will be announcements of affordable housing, actions by Bank Negara Malaysia to stimulate the market and other incentives that are still under discussion between the industry and the government,” he said, as quoted by the Malay Mail. The country recorded a dismal performance in 2018, especially in the final quarter of the year, but the announcements would stimulate the property market, he said referring to a recent report in the Financial Times entitled “Malaysians unimpressed by steps to boost housing market”. “The report is too premature and it was based on outdated 2018 data without in-depth analysis of the ongoing plans by the current government,” he said.
The FT report found Malaysian consumers were hesitant to buy property towards the end of 2018 even though the government introduced measures to encourage home ownership.
However, Geh said the measures announced in the annual Budget last year would take full effect this year. “They used historical figures but referred to Budget 2019, in which the findings and more measures under the new national housing policy will only be fully revealed in March,” he said.
A host of analysts believed property prices were expected to remain stagnant this year but Geh believes this may not be the case. “It may not be true for the whole of 2019, especially with the incentives that the government is planning to introduce,” he said. Geh said the Bank Negara Malaysia (central bank), the Housing and Local Government Ministry and the Finance Ministry were holding regular engagements to come up with “goodies” for the industry and home buyers. “The new government is taking extraordinary steps in a tenacious manner that will help spur both the primary and secondary market of the property industry this year,” he said.
TOKYO, January 15 -- Lawyers for Ghosn have appealed the decision and could receive a response within the next day.
Ghosn awaits a lengthy criminal trial that could be as long as six months away, his lawyers have said. It is rare in Japan for defendants who deny their charges to be granted bail ahead of trial. The executive has remained in a detention center in Tokyo since Nov. 19, when he was first arrested on allegations of under-reporting his salary for five years through 2015. The court did not give a reason for denying bail. At a hearing last week, when his lawyers asked for reasons for his continued detention, the court cited concerns that Ghosn would try to flee or tamper with evidence.
Ghosn was indicted on Friday on charges of aggravated breach of trust for temporarily transferring personal investment losses to Nissan in 2008, and understating his salary for three additional years through March 2018. He has denied the charges. His arrest sent shockwaves through the auto industry and rocked Nissan’s alliance with Mitsubishi Motors Corp and France’s Renault SA. Ghosn, who masterminded Nissan’s financial turnaround two decades ago, has since been removed from chairmanship positions at Nissan and Mitsubishi, but remains chairman and chief executive at Renault. The French government, Renault’s biggest shareholder, said it supports Renault’s decision to keep Ghosn at its helm unless it becomes clear he will be “chronically incapacitated” by the Japanese investigation, officials said on Monday. The prospect of a lengthy detention could increase pressure on the Renault board and shareholders including France’s government to appoint permanent new leadership for the car maker. Tuesday is likely to see “important developments” in relation to that question, one French official said.
The case has also put Japan’s criminal justice system under international scrutiny and sparked criticism for some of its practices, including keeping suspects in detention for long periods and prohibiting defense lawyers from being present during interrogations, which can last eight hours a day. Ghosn’s wife, Carole Ghosn, has complained about her husband’s “harsh treatment” in detention, including being held in a small, unheated room and being pressured by prosecutors to confess, according to a letter she wrote to Human Rights Watch’s Japan director Kanae Doi. She urged the group to “shine a light on the harsh treatment of my husband and the human rights-related inequities inflicted upon him by the Japanese justice system.” Doi said in an e-mail to Reuters that the country’s justice system “certainly warrants the international pressure and attention it is getting now.”
Doi also forwarded a comment from Human Rights Watch Asia Director Brad Adams, who in an opinion piece published in the Diplomat magazine on Thursday said, “Ghosn’s case is emblematic of serious and longstanding problems in Japan’s criminal justice system, which affect ordinary Japanese citizens on a daily basis.”
BANGKOK, January 11 -- The baht's value is projected to appreciate in the medium to long term because of slower interest-rate normalisation in the US and adverse effects from the US-China trade dispute, says the Federation of Thai Capital Market Organisations (Fetco).
Capital flows are expected to return to emerging markets in the next few months as the US economy suffers the double whammy of a slower pace of rate hikes and weaker growth momentum caused by the trade spat, said Fetco chairman Paiboon Nalinthrangkurn. The anticipated developments will cause the dollar to depreciate, Mr Paiboon said. Foreign fund flows are expected to move into the domestic bond market, he said, as there were net inflows worth about 190 billion baht registered last year in Thai bonds. Investment projects in the Eastern Economic Corridor and the upcoming general election are positive factors boosting investor confidence, Mr Paiboon said. The local currency's value is forecast at 32-33 against the greenback this year, according to Fetco.
Nonetheless, the baht is likely to experience a short-term depreciation as a result of lower growth in tourism and exports and higher merchandise imports, Mr Paiboon said. The local currency's value on Thursday rose to a seven-month high of 31.91 against the dollar, up 1.8% year to date. Bank of Thailand governor Veerathai Santiprabhob said domestic demand will be the pillar supporting Thailand's economic growth as external growth drivers play a lesser role this year. The outlook will result in a lower current account surplus for Thailand, alleviating pressure on the baht, Mr Veerathai said. For the Thai stock market in 2019, high financial volatility is expected to continue amid several uncertainties, but the general election will provide a boost of confidence for investors, said Prinn Panitchpakdi, country head of CLSA Securities Thailand.
"The stock market is projected to peak before the election," Mr Prinn said. "There will be an uncertainty in domestic politics after the election, as it is anticipated that no political party would take a majority of the vote." The Stock Exchange of Thailand index is forecast at 1,782 points by year-end 2019 and 1,682 at the end of the first quarter, according to the Investment Analysts Association. In related news, Fetco's investor confidence index for the next three months declined for a third straight month, by 5.3% to 92.75. The confidence of retail investors dropped into bearish territory and a 39-month low.
An index below 80 points is considered bearish, 80-120 is neutral and over 120 is bullish. Investors are concerned about risks from US trade policy and fund flow movements driven by rising interest rates, Mr Paiboon said.
NEW YORK, January 9 -- Brent crude oil has returned to $60/barrel while WTI has moved back above $50/b as hopes of a deal between the US and China on trade continues to build.
Yesterday, US President Trump tweeted: “Talks with China are going very well” and that was followed by news of an unplanned extension of the talks into Wednesday. These developments have supported a continued recovery in global stocks following a miserable December. Adding to this are a softer dollar and ongoing production cuts from the Opec+ group, which have all supported the current change in sentiment.
A trade deal between the US and China, however, is likely to slow but unlikely to reverse the deterioration seen recently in forward-looking economic data from the US to Europe and China. On that basis the upside at this stage may be limited to the upper area of the mentioned consolidation area for Brent at $64/b and WTI at $55/b.
Another reason why the bulls may need to be patient can be seen in the developments of the forward curve and the open interest in the two major oil contracts of WTI and Brent. A rally driven by fundamentals, such as the outlook for a tightening, would normally trigger a flattening of the forward curve, as the contango – the prompt months discount to deferred – begins to narrow.
As per the chart below we find that the six months spread between February (CLG9) and August (CLQ9) has hardly moved since December. Hedge funds would normally during a rally cut short positions while adding fresh longs. However, since the December 24 low the open interest in WTI has only risen by 61k lots while in Brent it has only risen by 36k lots. This could indicate that the rally has been short covering more than fresh longs entering the market.
BERLIN, January 8 -- Mere hours after German Economy Minister Peter Altmaier assured the German public that the country's economy will continue to expand.
Despite a recent raft of discouraging economic data, official data - unlike the US, Germany's government is open and economic data continue to be reported - showed German industrial activity plunged the most since 2009, confirming a weak factory orders print from Monday and sparking fresh fears that Europe's largest economy may have entered a recession during Q4 just as Mario Draghi was preparing to end the ECB's purchases of government bonds.
According to Bloomberg, industrial production fell for a third month in November (-1.9% m/m, and -4.9% y/y) with weakness in everything from consumer goods to energy. In another warning sign for the bloc, the data was released alongside a eurozone-wide sentiment reading which showed that economic confidence had slumped late last year. The dismal IP reading confirmed a just as ugly German factory orders print from Monday which tumbled far more than expected in November. Orders slid 1% from October, and posted a year-on-year decline of 4.3%, the biggest drop in more than six years.
The data raise the possibility that while European Central Bank President Mario Draghi was assuring investors in December that the Continent's economy had enough momentum to justify tapering the central bank's asset purchases, its largest constituent may have been sliding into a recession. For what it's worth, Germany’s central bank said Tuesday it’s "looking through the volatility of monthly economic data" and wouldn't comment on individual reports. The bank has been hoping for a rebound from the German economy's Q3 contraction, arguing that the shrinkage was due to temporary factors like new auto emissions rules.
One economist said that even if the German economy manages to avoid a recession, it's looking likely that industrial output probably contracted in the fourth quarter. But in a reflection of the bad-news-is-good-news dynamic that reasserted itself in the US on Monday, German stocks rallied on the news, while German bund yields climbed but soon pared their move.
FRANKFURT, January 2 -- The five presidents of the European Union used the euro’s 20th birthday to praise the single currency’s successes, while warning that the job isn’t yet complete.
The continent’s monetary union, one of the biggest economic experiments of the modern era, has grown to 19 members from its initial 11 and now covers 340 million citizens. But the shackling together of nations as diverse as Germany, Italy and Greece also created strains that led to a debt crisis and which continue to fuel political flare-ups. Here’s a collection of comments from the EU’s political and monetary heads, a day before the Jan. 1 anniversary.
Jean-Claude Juncker, president of the European Commission:
“The euro has become a symbol of unity, sovereignty and stability. It has delivered prosperity and protection to our citizens and we must ensure that it continues to do so. This is why we are working hard to complete our Economic and Monetary Union and boost the euro’s international role further.”
Antonio Tajani, president of the European Parliament “In order for Europeans to benefit fully from the jobs, growth and solidarity that the single currency should bring, we must complete our economic and monetary union through genuine financial, fiscal and political union. This will also allow Europe to better shield its citizens from potential future crises.”
Donald Tusk, president of the European Council:
“Despite crises, the euro has shown itself resilient, and the eight members which joined the original 11 have enjoyed its benefits. As the world keeps changing, we will keep upgrading and strengthening our Economic and Monetary Union.”
Mario Draghi, president of the European Central Bank:
“After 20 years, there is now a generation who knows no other domestic currency. During that time, the ECB has delivered on its main task of maintaining price stability.” “But we also contribute to the well-being of euro area citizens by developing safe, innovative banknotes, promoting secure payment systems, supervising banks to ensure they are resilient and overseeing financial stability in the euro area.”
Mario Centeno, president of the Eurogroup:
“The euro and the close economic cooperation that it entails has evolved over time overcoming challenges in its way. It has come a long way since the start, and it has seen important changes in the wake of the crisis to help us leave the hardship behind.” “But this work is not yet finished, it requires continuous reform efforts in good times as in bad times. There can be no doubts of our political will to strengthen the Economic and Monetary Union. We need to be prepared for what the future may hold — we owe that to our citizens.
NEW YORK, December 26 -- US stocks staged a dramatic rebound on Wednesday, with the Dow Jones Industrial Average surging more than 1,000 points for the first time eve.
This on short-covering activity following reports of strong holiday-season sales in the world’s largest economy. Technical factors also contributed to the rally, with equities perceived to have been oversold in recent weeks, including in a brutal pre-Christmas selloff.
In a dramatic session that also saw the benchmark S&P 500 come close to dropping into bear market territory, oil prices surged, boosting sentiment for risk assets, Reuters reports. The Dow Jones Industrial Average closed up 1,086.25 points, or 4.98 percent, at 22,878.45, notching its best single-session points gain in history.
The previous record point gain for the Dow was 936.42 on Oct. 13, 2008, during a period when markets were whipsawed almost daily by developments in the financial crisis, Reuters noted.
The S&P 500 index gained 116.6 points, or 4.96 percent, to 2,467.7, while the Nasdaq Composite added 361.44 points, or 5.84 percent, to 6,554.36.
A report that holiday sales were the strongest in years helped mollify concerns about the health of the economy. US holiday sales this year were up 5.1 percent from a year ago at over US$850 billion, the strongest gain in six years, according to a Mastercard report. The S&P 500 retailing index jumped 7.4 percent. Shares online retailer Amazon, which touted a “record-breaking” season, climbed 9.4 percent. “The market is extremely oversold where we left it” on Monday, Brett Ewing, chief market strategist at First Franklin Financial Services. “You cannot make the assumption that this correction is over, but today’s action is definitely a very positive signal.”
Concerns about the economic growth outlook, the US-China trade dispute and rising interest rates have dogged stocks since the end of summer, and the major indexes are still down more than 10 percent this month alone, with three more trading days left in the year. The head of the US Federal Reserve faces no risk of losing his job and President Donald Trump is happy with his Treasury secretary, White House economic adviser Kevin Hassett said in an apparent attempt to calm Wall Street nerves.
On Wednesday, short-covering was feverish, with the Thomson Reuters United States Most Shorted Index enjoying its best percentage rise in its six-year history. “The move you see is just everybody trying to get out of these super, super bearish positions that they have been in, that have been easy to make money in. … This is a short-covering rally,” said Michael Antonelli, managing director of institutional sales trading at Robert W. Baird. “These kind of moves, as fun, as exciting as they are, you just don’t see this kind of stuff in healthy, normal markets,” Antonelli told Reuters. All 11 major S&P 500 sectors ended in positive territory, with the technology sector after being beaten up during the recent pullback, rising 6.1 percent. The S&P broke a four-session streak of declines. But despite Wednesday’s surge, it remained on pace for its biggest monthly percentage drop since February 2009, Reuters noted. “Given the two months we’ve been through, it’s hard to look at one day and say it’s all over,” said Christopher Smart, head of macroeconomic and geopolitical research at Barings. Even so, Smart said, “If you look at simple valuations in this market, it’s clearly much more attractive than it was over the summer and I think it means that it’s hard to see a lot more downside from here.”
TOKYO, December 25 -- Japanese stocks plunged Tuesday and other Asian markets declined following heavy Wall Street losses triggered by President Donald Trump’s criticism of the US central bank.
The Nikkei 225 fell by an unusually wide margin of 5 percent to 19,155.14. The Shanghai Composite Index ended off 0.9 percent at 2,504.82 after being down as much as 2.3 percent at midday. Benchmarks in Thailand and Taiwan also declined. Markets in Europe, Hong Kong, Australia and South Korea were closed for Christmas.
Wall Street indexes fell more than 2 percent on Monday after Trump said on Twitter the Federal Reserve was the US economy’s “only problem.’’ Efforts by Treasury Secretary Steven Mnuchin to calm investor fears only seemed to make matters worse. S stocks are track for their worst December since 1931 during the Great Depression. Shanghai is down almost 25 percent this year. Tokyo, Hong Kong and other markets are on track to end 2018 down more than 10 percent. Markets have been roiled by concerns about a slowing global economy, the US-Chinese tariff battle and another interest rate increase by the Fed.
Trump’s Monday morning tweet heightened fears about the economy being destabilized by a president who wants control over the Fed. Its board members are nominated by the president but make decisions independently of the White House. The board’s chairman, Jerome Powell, was nominated by Trump last year. “The only problem our economy has is the Fed,’’ the president said on Twitter. “They don’t have a feel for the Market, they don’t understand necessary Trade Wars or Strong Dollars or even Democrat Shutdowns over Borders. The Fed is like a powerful golfer who can’t score because he has no touch -- he can’t putt!”
The Standard & Poor’s 500 index slid 2.7 percent. The benchmark index is down 19.8 percent from its peak on Sept. 20, close to the 20 percent drop that would officially mean the end of the longest bull market for stocks in modern history -- a run of nearly 10 years. The Dow Jones Industrial Average sank 2.9 percent while the Nasdaq skidded 2.2 percent. On Sunday, Mnuchin made a round of calls to the heads of the six largest US banks, but the move only raised new concerns about the economy.
Most economists expect US economic growth to slow in 2019, not slide into a full-blown recession. But the president has voiced his anger over the Fed’s decision to raise its key short-term rate four times in 2018. That is intended to prevent the economy from overheating. Technology stocks, health care companies and banks took some of the heaviest losses in Monday’s sell-off. Wells Fargo slid 3.4 percent, Microsoft 4.2 percent and Johnson & Johnson 4.1 percent. In energy markets, Brent crude, used to price international oils, lost 9 cents to $50.68 per barrel in London. The contract plummeted $3.33 on Monday to close at $50.77. In currency trading, the dollar declined to 110.28 yen from Monday’s 110.45 yen. The euro was little-changed at $1.1407.
MOSCOW, December 21 -- British financier and Hermitage Capital Management founder William Browder has been charged in absentia with organizing a crime syndicate.
The Moscow’s Tverskoy District Court informed the media, adding that the motion for his arrest in absentia will be considered on December 21. "The court received a motion on imposing remand in custody on Browder in absentia. It will be considered at 11:00 Moscow time," the court’s spokesperson said.
Browder is charged under Part 1 of Section 210 of Russia's Criminal Code ("Organizing a crime syndicate"). On November 19, the Russian Prosecutor General’s Office said criminal proceedings had been initiated against him over organizing a crime syndicate. It also said Browder would be put on the international wanted list, while his assets would be seized with their subsequent confiscation. Browder was convicted in absentia in Russia twice. On July 11, 2013, Moscow’s Tverskoy District Court found him guilty of large-scale tax evasion worth 522 mln rubles ($9 million at the current exchange rate) and sentenced him to nine years in jail. That verdict also barred him from doing business for two years.
In July 2014, Russia put Browder on the international wanted list. The Russian Prosecutor General’s Office has repeatedly asked Interpol to issue an arrest warrant against him. On December 29, 2017, Moscow’s Tverskoy District Court sentenced Browder to nine years behind bars in absentia, having found him guilty of tax evasion to the tune of more than 3 bln rubles ($45.5 mln) and bankruptcy fraud. His business partner Ivan Cherkasov was sentenced to a similar prison term. The court also upheld a lawsuit against Browder and Cherkasov worth 4.2 bln rubles ($64 mln) and barred them from doing business in Russia for three years.
William Felix Browder (born 23 April 1964) is an American-born British financier and economist. He is the CEO and co-founder of Hermitage Capital Management, an investment fund that at one time was the largest foreign portfolio investor in Russia. He gave up his U.S. citizenship in 1998 to avoid paying taxes related to foreign investment. After having business in Russia for ten years, Browder was refused entry to Russia in 2005 as a threat to national security; he has said it was because he exposed corruption. Browder and Edmond Safra (1932–1999) founded Hermitage Capital Management in 1996 for the purpose of investing initial seed capital of $25 million in Russia during the period of the mass privatization after the fall of the Soviet Union. Beny Steinmetz was another of the original investors in Hermitage.
Following the Russian financial crisis of 1998, Browder remained committed to Hermitage's original mission of investing in Russia, despite significant outflows from the fund. Hermitage became a prominent activist shareholder in the Russian gas giant Gazprom, the large oil company Surgutneftegaz, RAO UES, Sberbank, Sidanco, Avisma, and Volzhanka. Browder exposed management corruption and corporate malfeasance in these partly state-owned companies. He has been quoted as saying: "You had to become a shareholder activist if you didn't want everything stolen from you".
In 1999, Avisma filed a RICO lawsuit against Browder and other Avisma investors including Kenneth Dart, alleging they illegally siphoned company assets into offshore accounts and then transferred the funds to U.S. accounts at Barclays. Browder and his co-defendants settled with Avisma in 2000; they sold their Avisma shares as part of the confidential settlement agreement.
In 1995–2006 Hermitage Capital Management was one of the largest foreign investors in Russia, and Browder amassed millions through his management of the fund. In both 2006 and 2007, he earned an estimated £125–150 million. In March 2013, HSBC, a bank that serves as the trustee and manager of Hermitage Capital Management, announced that it would end the fund's operations in Russia. The decision was taken amid two legal cases against Browder: a libel court case in London and a trial in absentia for tax evasion in Moscow. In June 2018, HSBC reached a settlement with the Russian government to pay a £17 million fine to Russian authorities for its part in alleged tax avoidance.