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Tag: Economy

  • US retail sales expected to grow at slower rate in 2019

    US retail sales expected to grow at slower rate in 2019

    US retail sales are expected to climb between 3.8 per cent and 4.4 per cent to more than US$3.6 trillion ($4.97 trillion) in 2019, according to data from the National Retail Federation (NRF). The predicted rise in retail sales, which is excluding automobile dealers, gasoline stations and restaurants, however, would be less than the 4.6 per cent growth in 2018, citing threats from an ongoing trade war, the volatile stock market and the effects of the government shutdown.

    NRF said in August of last year it expected 2018 retail sales to be up at least 4.5 per cent.

    The retail industry group says the 2018 figure is its preliminary estimate for retail sales last year, pending the release of December data from the Commerce Department that was stalled from being announced during the government shutdown.

    Matthew Shay, NRF president and CEO, said the biggest priority is to ensure that the economy continues to grow and to avoid self-inflicted wounds.

    “It’s time for artificial problems like trade wars and shutdowns to end, and to focus on prosperity not politics,” Shay said.

    Shay said despite fears in the industry that a trade war in China or an economic slowdown might impact consumer spending, they believe the underlying state of the economy is sound.

    “More people are working, they’re making more money, their taxes are lower and their confidence remains high,” he said.

    Preliminary estimates, according to the NRF, show that retail sales during 2018 grew 4.6 per cent over 2017 to US$3.68 trillion ($5.08 trillion), exceeding NRF’s forecast of at least 4.5 per cent growth.

    The figures include online and other non-store sales, which were up 10.4 per cent to US$682.8 billion ($942.6 billion). That met NRF’s forecast of 10-12 per cent online growth, and online is expected to grow in the same 10-12 per cent range again this year. The numbers exclude automobile dealers, gasoline stations and restaurants.

    Growth of between 3.8 per cent and 4.4 percent would result in total 2019 retail sales of between US$3.82 trillion and $US3.84 trillion ($5.27 trillion to $5.3 trillion). Based on growth of 10-12 per cent, online sales would total between US$751.1 billion and US$764.8 billion ($1.03 trillion and $1.05 trillion), which are included in the total.

    The 2018 results are based on Commerce Department data up through November but include NRF estimates for December because the agency was closed during the recent government shutdown and has not yet released December figures.

    The NRF said the results are subject to revision once December numbers become available, and government numbers are revised again each spring regardless of the shutdown.

    “We are not seeing any deterioration in the financial health of the consumer,” said Jack Kleinhenz, NRF chief economist.

    “Consumers are in better shape than any time in the last few years,” Kleinhenz said. “Most important for the year ahead will be the ongoing strength in the job market, which will support the consumer income and spending that are both key drivers of the economy.”

    Kleinhenz said the bottom line is the economy is in a good place despite the ups and downs of the stock market and other uncertainties.

    “Growth remains solid,” he said.

    NRF said it expects the overall economy to gain an average of 170,000 jobs per month, down from 220,000 in 2018, and that unemployment – currently at 4 per cent – will drop to 3.5 per cent by the end of the year. Gross domestic product is likely to grow about 2.5 per cent over 2018.

    Kleinhenz said inflation and interest rates are expected to remain low this year and that retail sales have been helped by recent reductions in gasoline prices.

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  • Oil prices edge lower, tightening supply outlook supports

    Oil prices edge lower, tightening supply outlook supports

    Crude oil prices edged lower on Monday after sharp gains during the previous session but were supported by expectations of shrinking supply and signs that China-US trade tensions could ease. International Brent crude oil futures on Monday were down 20 cents, or 0.32% at 0339 GMT to $62.54 a barrel, after closing up 3.14% in the previous session to their highest close since Nov 21.

    US West Texas Intermediate (WTI) futures were at $55.13 per barrel, down 13 cents, or 0.24%, from their last settlement. WTI settled 2.73% higher in the last session at its highest close since Nov 19.

    Output declines from the Organization of the Petroleum Exporting Countries (OPEC) as they make good on their pact to curb a supply overhang were compounded by falling US oil rig counts and sanctions on Venezuelan oil sales.

    “While Venezuela’s output reportedly rose last month, fresh US sanctions on the country could see 0.5 to 1% of global supply curtailed,” said Vivek Dhar, commodities analyst for Commonwealth Bank of Australia in a note on Monday.

    The sanctions will sharply limit oil transactions between Venezuela and other countries and are similar to those imposed on Iran last year, experts said after examining details posted by the Treasury Department.

    OPEC oil supply fell in January by the largest amount in two years despite sluggish production declines from Russia, according to a Reuters survey.

    However, Russian oil output in January missed the target for the output cuts, Energy Ministry data showed on Saturday. Production last month declined to 11.38 million barrels per day (bpd), but that was only down by 35,000 bpd from its October 2018 level that is the baseline for the pact.

    Russian Energy Minister Alexander Novak has said the country’s overall cuts from the October baseline would total 50,000 bpd in January. Russia has pledged to reduce oil output by 230,000 bpd from October.

    US energy firms last week cut the number of oil rigs operating to their lowest in eight months as some drillers followed through on plans to spend less on new wells this year.

    “The collapse in oil prices late last year has resulted in more cautious spending by US oil explorers,” said Dhar.

    Meanwhile, hopes for thawing China-US relations have also helped ease concerns over slowing economic growth.

    “While the US and China have yet to reach a deal, markets were buoyed by reports that they have made significant progress,” ANZ Bank said in a research note.

    US President Donald Trump last week said he would meet with Chinese President Xi Jinping, perhaps twice, in the coming weeks to try to seal a comprehensive trade deal with Beijing, but acknowledged it was not yet clear whether a deal could be reached.

  • Indonesia Prepares New Strategy to Meet 2019 Tourist Arrival Target

    Indonesia Prepares New Strategy to Meet 2019 Tourist Arrival Target

    When President Joko “Jokowi” Widodo set out to double Indonesia’s foreign tourist arrivals within the five years of his presidency, many were skeptical. Now, the target seems to be within reach. Combined government efforts that included the massive development of airports and tourist destinations, aggressive digital promotions and a visa-free policy have, along with the weakening rupiah, attracted 16,2 million foreign tourists to Indonesia last year, which is 71 percent more than four years ago.

    Still, some setbacks were unavoidable. A series of volcanic eruptions, earthquakes and tsunamis over the past 12 months, as well as the tragic crash of Lion Air flight JT-610 into the Java Sea near Jakarta, resulted in the government missing its target to woo 17 million foreign tourists last year.

    Industry players worry that the bad image created by these disasters would take long to erase and thus undermine the country’s ability to attract 20 million foreign tourists this year.

    “Indonesia is situated on the Ring of Fire; we could not predict or prevent any disaster. What we need now, is to work extra hard to ensure that the world knows that when disaster strikes here, all tourists and local residents are well cared for,” said Elly Hutabarat, chairwoman of the Indonesian Travel Agent’s Association (Astindo).

    She cited Mexico as an example of a country that had just been hit by an earthquake, but still managed to quickly revive its tourism industry.

    “We see Mexico, which had just experienced an earthquake, is responsive and is able to give up-to-date information to the world. Such efforts are able to quickly revive their tourism industry,” Elly said.

    Border Tourism, Low-Cost Terminals

    The government has not given up, as the tourism industry could potentially generate $20 billion in foreign exchange revenue this year, which is crucial to plugging the country’s persistent current-account deficit.

    Guntur Sakti, head of communications at the Ministry of Tourism, said the government has implemented a strategy to meet this year’s tourist arrival target by developing border tourism, hub tourism and the renovation of airport terminals to cater to low-cost carriers.

    The government’s border tourism plan is aimed at making it easier, faster and cheaper for tourists to visit Indonesia from neighboring countries.

    Malaysia, Singapore and the Philippines also have a similar cultural heritage and history as Indonesia.

    “The potential from border tourism is massive, especially from neighboring countries,” Guntur said.

    Through the hub tourism strategy, the government expects to attract a larger number of foreign tourists that travel to the capitals of neighboring countries, specifically Bangkok, Kuala Lumpur and Singapore.

    The government estimates that more than 11 million foreign travelers – excluding Indonesians – transit at Singapore’s Changi Airport annually before continuing their travels to other countries for business or leisure. Guntur said this represents a massive potential for Indonesia.

    He added that tourists frequently transit in Singapore or other cities in the region because of limited direct flights to Indonesia from Europe, the United States and even parts of East Asia.

    For instance, about half of all Chinese tourists heading to Indonesia must transit in Singapore or Malaysia before reaching the archipelago, while 80 percent of tourists from Thailand and Malaysia are able to reach the country via direct flights.

    The government also plans to renovate several terminals at Soekarno-Hatta International Airport outside Jakarta to exclusively accommodate low-cost carriers.

    Terminal 1 at the airport will soon only cater to passengers of low-cost airlines traveling to domestic destinations, while Terminal 2 will cater to passengers of low-cost airlines on both domestic and international flights.

    Many countries have built terminals or even whole airports to specifically accommodate low-cost airlines. This lowers the airport’s operating budget, which in turn helps to reduce airport taxes and airline ticket prices, which ultimately attract more foreign tourists.

    Guntur said at least 70 percent of foreign tourists use low-cost carriers to travel to Indonesia.

    “To realize our strategy and attract more tourists, we are working with state-owned airport operator Angkasa Pura to renovate Terminal 1 and 2 at Soekarno-Hatta Airport. We’ve noticed many countries operate several terminals that cater to full-service carriers and low-cost carriers separately,” he added.

    The number of passengers traveling to Indonesia on low-cost carriers grows by about 55 percent annually, while the number of passengers arriving on full-service airlines only increases by about 7 percent per year, according to tourism ministry data.

    Ten New Balis

    The government also actively promoted its “10 New Balis” program last year to develop and promote several destinations beyond Bali, Indonesia’s most popular destination.

    The 10 New Balis include Mandalika in Nusa Tenggara, Thousand Islands in Jakarta, Tanjung Lesung in Banten, Tanjung Kelayang in Bangka Belitung, Borobudur Temple in Central Java, the Bromo Tengger Semeru National Park in East Java, Labuan Bajo in East Nusa Tenggara, Wakatobi in Southeast Sulawesi and Morotai in North Maluku.

    The project, spearheaded by the tourism ministry, has also established programs to develop each of the destinations by building 5,000 homestays, improving infrastructure, increasing financing for tourism to around Rp 2.5 trillion ($177 million), implementing sustainable tourism in 16 destinations, developing 10 special economic zones and developing nomadic tourism.

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  • New integrated resort in China by Fosun

    New integrated resort in China by Fosun

    Fosun bets on integrated resorts to address the needs of Chinese travelers, who are showing interest in these types of experiences. Fresh from its Hong Kong initial public offering last month, Fosun Tourism Group is making good on its intention to use the proceeds to develop two new integrated resorts in China, announcing properties under the Thomas Cook Group brands Casa Cook and Sunwing.

    The two projects are in Lijiang, Yunnan province, famous for its UNESCO World Heritage old town, and Taicang, Jiangsu province, 30 minutes from Shanghai.

    Fosun Tourism chairman and CEO Jim Qian told Skift he is seeing different segments emerging in China’s domestic travel market. While this is already the norm in mature western markets, it’s just starting in China, and there’s a need to offer local travelers a choice of hotel brands and a variety of experiences, said Qian.

    In so doing, Fosun is turning to what’s in the family, its own Club Med and its Thomas Cook China joint venture. The Lijiang Albion International Resort will also have a Club Med, which has “a different positioning” from the boutique, design-led Casa Cook, he said.

    The whole development in Lijiang is spread over at 350,000 square meters (382,765 square yards). It is located near the Baisha old town, which lies closest to the majestic Yulong Snow Mountain, and is the only land permitted for massive development.

    How it will be sensitive to the tranquil and preserved ancient surroundings remains to be seen. For now, its website says it aims to attract mid- to high-profile guests by offering the total package, including a Club Med snow-themed resort, a guesthouses town, riverside shows, heritage towns, outdoor activities, health and wellness.

    “We will deliver a lot,” said Qian. “I believe in the future when a family goes on a holiday, they don’t just want to stay in the room.

    “Nowadays in China, we have more resort hotels in destinations such as Sanya, but most are actually business hotel brands moving from the city to the beach. I don’t think that kind of hotel is suitable for a family holiday. We will introduce the real beach or holiday resort to a destination.”

    Not much is known of Fosun’s other resort project in Taicang except that it is smaller at 145,000 square meters (158,570 square yards).

    Both are expected to be completed in stages from late 2020.

    Fosun Tourism, whose slogan is Everyday is Foliday (short for Fosun holiday), having tested destination development and management with its fully owned Atlantis Sanya, is keen to bring the experience to bear on the projects.

    “We have the experience in the construction of resort destinations, and we know how to make foreign brands suitable for the Chinese market,” said Qian.

    Fosun Tourism also believes the timing is good. It pointed out the per capita tourism expenditure in China in 2017 was about $575, which was below the global average of $741. “This implies the great potential for the growth of China’s tourism market,” it said.

    Besides, it claimed to be in a stronger position now, announcing ahead of its annual results to be released in March that it expects a net profit of at least 350 million yuan ($52 million) in 2018, compared with a net loss of 295 million yuan ($44 million) in 2017.

  • Foreign buying on Bursa slows to RM146.8m last week

    Foreign buying on Bursa slows to RM146.8m last week

    Foreign funds snapped up RM146.8 million net of local equities last week during the holiday-shortened week. “Foreign funds resumed their entry into stocks listed on Bursa for the fourth consecutive week albeit at a slower pace compared to the preceding week,“ MIDF Research said in its weekly fund flow report.

    It said last Monday saw a moderate net inflow of foreign funds worth RM37.3 million, extending the daily buying streak to nine days. However, this foreign buying spree came to an end on the next day as international funds sold RM12.8 million net, coinciding with the local bourse’s 0.4% slide to settle at 1,690 points.

    Risk appetite was weak on Tuesday following the overnight 2.8% slump in Brent crude oil price combined with the anticipation ahead of the Sino-US trade negotiations.

    Notwithstanding this, offshore investors returned to Bursa on Wednesday at a tune of RM65.1 million net, the highest foreign net inflow during the week.

    The catalyst responsible for the boost of foreign net inflows on that day was 0.4% increase in Brent crude oil price as US President Donald Trump’s administration slaps sanctions on Venezuela’s state-owned oil company while Saudi Arabia had a deeper output cuts in January than initially pledged.

    The momentum of foreign net inflows continued on the last trading day of the week as foreign investors bought RM57.2 million net.

    “We opine that the sentiment was partially supported by the Malaysia’s exports in 2018 which grew by 6.7% to reach almost RM1 trillion. Meanwhile, the FBM KLCI was little changed, declining by less than 1% on Thursday ahead of the long weekend and festive season.”

    The month of January 2019 saw a foreign net inflow of RM1.03 billion or US$249.3 million, the first monthly net inflow since September last year.

    “In comparison with the three other Asean markets we monitor, Malaysia has the second lowest foreign net inflow while Indonesia leads,“ said MIDF.

    Foreign investors were the only group which saw a weekly increase in average daily traded value, jumping by 21.0% to remain above RM1 billion for the second week running.

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  • The world’s largest free trade blocs between Japan and EU

    The world’s largest free trade blocs between Japan and EU

    The economic partnership agreement between Japan and the European Union not only forms one of the world’s largest free trade blocs, but also sets digital and copyright rules that will serve as an international template. The EPA will ultimately eliminate EU tariffs on about 99% of imported products from Japan, and Japanese tariffs on roughly 94% of products imported from the EU. It also incorporates wide-ranging regulations on data transfer and intellectual property protection. The aim is to drive the debate on other multinational trade pacts, especially against the backdrop of rising protectionism.

    A centerpiece provision is a ban on governments forcing companies to reveal source code. Chinese cybersecurity legislation that took effect in 2017 empowers the government to request source code from foreign enterprises doing business within its borders. The law also requires “operators of key information infrastructure” to locally store personal information and important data collected and produced by their services in China.

    The Japan-EU trade deal is essentially a rejection of such digital protectionism, instead encouraging the free and secure cross-border flow of data. Companies in participating countries can operate in other members without risking mandatory disclosure of trade secrets.

    The trade deal “will become a precedent for the data field, which is becoming increasingly important, and will lay the groundwork for the creation of subsequent rules,” said Keisuke Hanyuda, partner at Deloitte Tohmatsu Consulting.

    Japan, the EU and other like-minded trading partners seek to craft similar rules for the World Trade Organization, which includes the U.S. and China. But speedy rule-making may be all but impossible at a WTO that has been criticized as dysfunctional. The alternative strategy is to first implement high-quality rules for the Japan-EU trade deal, as well as the 11-member Trans-Pacific Partnership, and bring other countries into the fold.

    Japan and the EU agreed not to levy tariffs on the transfer of data between the two sides. Copyrights on literary works will expire 70 years after the death of the author. Alcoholic-beverage and food brands tied to a region of origin will be mutually protected as well. Authorized producers of Kobe beef and Champagne would be shielded from imitations, for example.

    The EPA covers 27.8% of global gross domestic product by 2017’s number, and 36.9% of worldwide trade. The TPP-11 — formally the Comprehensive and Progressive Agreement for Trans-Pacific Partnership — accounts for 13.3% of global GDP. Japan sees the EPA and the TPP-11 together adding 13 trillion yen ($119 billion) to its real GDP and creating 750,000 jobs.

    “On top of the short-view effect of stimulating consumption, the inflow of services and investment from the EU will increase competitive pressures inside Japan, and we can expect the effect of prices going down,” said Junichi Sugawara, senior research officer at the Mizuho Research Institute.

    Tariff elimination is expected to have a significant economic impact. EU exports to Japan could jump as much as 34%, while European companies will save an annual 1 billion euros ($1.15 billion) on duties, the EU estimates. Hopes are particularly high for expanded food and agricultural exports to Japan.

    The EPA lowers tariffs on Camembert and other soft cheeses — something Japan did not do for the TPP-11 — up to a certain quota. Japan will eliminate soft-cheese duties for in-quota imports altogether in year 16. Other items, such as European wine, will immediately become duty-free, resulting in a wider selection and lower prices for Japanese consumers.

    Many see the EPA and its benefits as a counterweight to the Trump administration’s anti-globalism. “This is an act of enormous strategic importance for the rules-based international order, at a time when some are questioning this order,” European Council President Donald Tusk said last July, when the agreement was signed. “We are sending a clear message that we stand together against protectionism.”

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  • Asia stocks quiet, dollar firm after upbeat US job data

    Asia stocks quiet, dollar firm after upbeat US job data

    Asia stocks hovered near four-month highs on Monday after a mixed performance on Wall Street at the close of last week, while the dollar firmed against the yen following strong US job and manufacturing data. MSCI’s broadest index of Asia-Pacific shares outside Japan was almost flat. It had scaled a four-month peak on Friday along with a surge in its global peers.

    Trade was subdued with many of the region’s markets closed for the Lunar New Year. China’s financial markets are closed all week, while those in South Korea are shut until Thursday.

    Hong Kong’s Hang Seng, which is trading for only half a day, edged up 0.2%.

    Japan’s Nikkei added 0.5%.

    On Wall Street on Friday optimism from a surge in January US job growth was offset by a weaker-than-expected outlook from Amazon.com Inc that battered retail stocks. The Dow nudged up 0.26% while the Nasdaq shed 0.25%.

    “Key points for the markets this week will be how the remaining US corporate earnings releases turn out, and whether they are in line with recent upbeat data,” said Junichi Ishikawa, senior FX strategist at IG Securities in Tokyo.

    “While corporate earnings and fundamentals remain key, political developments, notably the US-China trade situation, remain potential risk factors,” he said.

    A US Labor Department report on Friday showed nonfarm payrolls jumped by a stronger-than-forecast 304,000 jobs last month, the largest gain since February 2018.

    That report, along with better-than-expected ISM manufacturing activity numbers for January, pointed to underlying strength in the world’s biggest economy.

    “After last week’s risk appetite revival, the data pulse and the tone of Fed speakers will be important. For the Goldilocks market to continue, we need to find a delicate balance between improving data and still-neutral central banks,” strategists at ANZ wrote.

    Global equity markets performed strongly last week after the Federal Reserve pledged to be patient with further interest rate hikes, signalling a potential end to its tightening cycle.

    Friday’s robust economic data triggered a sharp rebound in US Treasury yields, in turn lifting the dollar.

    On Monday, the US currency was a shade higher at 109.555 yen after advancing 0.6% on Friday.

    The euro was little changed at $1.1456 after getting pulled back from a high of $1.1488 on Friday.

    The Australian dollar was mostly steady at $0.7244 after slipping 0.4% the previous session.

    The benchmark 10-year U.S. Treasury yield was at 2.686% after climbing nearly 6 basis points on Friday to pull away from a four-week low of 2.619% earlier last week.

    West Texas Intermediate (WTI) US crude oil futures extended Friday’s rally and were last up 0.3% at $55.42 per barrel.

    On Friday, WTI futures had rallied 2.7% on the upbeat US job report, signs that Washington’s sanctions on Venezuelan exports have helped tighten supply and data showing US drillers cut the number of oil rigs.

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  • Vietnam per capita income matches Malaysia’s 20 years ago

    Vietnam per capita income matches Malaysia’s 20 years ago

    Vietnam’s recent economic achievements notwithstanding, much effort is needed for it to close the gap with other countries, a minister has said. Minister of Planning and Investment Nguyen Chi Dung said at a conference Wednesday that while Vietnam’s GDP per capita had surged by 27.4 times in the last 30 years to almost $2,590 last year, Malaysia had achieved this figure 20 years ago.

    Thailand had done so 15 years ago and Indonesia 10 years ago.

    The main limitations of its economy were low labor productivity, economic efficiency and competitiveness, and the country also faced the risk of being stuck in the middle-income trap.

    According to the 2018 Vietnam Annual Economic Report, average productivity per worker was VND60.73 million ($2,600) in 2017, lower than that of China, Japan, the Philippines, Thailand, and Cambodia.

    Currently the country also faced challenges like the U.S.-China trade war, the minister said.

    For these reasons, institutional reforms were necessary to achieve a more sustainable economy, he noted.

    Macroeconomic stability and high economic growth with innovation in science and technology were imperative.

    The private sector had to remain one of the pillars of the economy in future, Dung said. “If Vietnam doesn’t catch the 4.0 train, the gap between it with other countries will become wider. Vietnam needs to narrow that gap.”

    Vietnam’s GDP has grown at 6.8 percent a year on average for the last 20 years, and the economy has grown 39 fold in the period to $245 billion last year.

    Growth last year was 7.08 percent, the highest in a decade.

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  • Vietnam’s exports slow down

    Vietnam’s exports slow down

    Vietnam’s exports fell by 1.3 percent year-on-year in January to $20 billion as phone shipments fell sharply. Exports of phones were 27.5 percent down at $2.9 billion, according to the General Statistics Office. Computer and electronics exports fell 5 percent to $2.3 billion.

    But exports of textiles and garments rose by 6.7 percent to $2.7 billion, footwear by 12.8 percent to $1.6 billion and machinery and equipment by 15.2 percent to $1.4 billion.

    The U.S. was the biggest importer ($4 billion) followed by China ($3.8 billion) and the EU ($3.2 billion). The country’s Southeast Asian neighbors only accounted for $2 billion.

    Meanwhile, Vietnam’s imports rose by 3.1 percent to $20.8 billion.

    Last year exports were worth $244.72 billion, up 13.8 percent, and imports cost $237.51 billion, giving Vietnam its highest trade surplus ever of $7.21 billion.

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  • Palm falls as data shows slower exports

    Palm falls as data shows slower exports

    Malaysian palm oil futures fell last week, after data from a cargo surveyor showed exports grew more slowly than expected in January. The benchmark palm oil contract for April delivery on Bursa Malaysia Derivatives Exchange dropped 0.2% to RM2,299 a tonne. Trading volumes stood at 24,751 lots of 25 tonnes each.

    “The export numbers released are below yesterday’s (Wednesday’s) market rumour. The ringgit’s strength also pushed the market lower,” a Kuala Lumpur-based trader said, adding that the coming long holiday weekend should prompt traders to cover short positions. “That should limit any big sell-offs,” the trader said.

    Cargo surveyor Intertek Testing Services said yesterday exports of Malaysian palm oil products for January rose 14.7%, while independent inspection company AmSpec Agri Malaysia reported a 15.5% increase.

    Palm oil may slide into a range of RM2,256-RM2,274 per tonne, as its correction from the Jan 28 high of RM2,333 looks incomplete, Wang Tao, a Reuters market analyst for commodities and energy technicals said.

  • Oil rises as traders expect Venezuelan supply disruptions amid U.S. sanctions

    Oil rises as traders expect Venezuelan supply disruptions amid U.S. sanctions

    Oil prices rose on Wednesday as concerns about supply disruptions following U.S. sanctions on Venezuela’s oil industry outweighed downward pressure from a darkening outlook for the global economy. U.S. West Texas Intermediate (WTI) crude futures were at $53.54 per barrel at 0455 GMT, up 23 cents, or 0.4 percent, above their last settlement.

    International Brent crude oil futures rose 37 cents, or 0.6 percent, to $61.69 per barrel.

    The gains followed a 2 percent price jump in the previous session, when markets first digested the U.S. sanctions on Venezuela’s oil exports.

    Washington on Monday announced export sanctions against state-owned oil firm Petroleos de Venezuela SA (PDVSA), limiting transactions between U.S. companies that do business with Venezuela through purchases of crude oil and sales of refined products.

    “The sanctions so far have been mostly disruptive for refiners on the U.S. Gulf Coast, who are being forced to seek alternative heavy crude supplies, and have stepped up purchases from Canada,” said Vandana Hari of Vanda Insights, an energy consultancy.

    She added, however, that Canadian oil exports would be “constrained by pipeline capacity bottlenecks.

    The sanctions aim to freeze sale proceeds from PDVSA’s exports of roughly 500,000 barrels per day (bpd) of crude oil to the United States.

    Although the move pushed up oil prices, markets appeared relatively relaxed as the sanctions only affect Venezuelan supply to the United States.

    “The (Venezuelan) export volumes will not be eliminated from the market, but rather rerouted to other countries,” said Paola Rodriguez-Masiu, an analyst at consultancy Rystad Energy.

    With the United States dropping out as a customer for Venezuelan oil, she added that “China and India … will be able to pick up these oil volumes at great discounts.”

    Despite this, some analysts said that non-U.S. oil trading firms with operations in the United States may still avoid dealing with Venezuelan oil.

    The Schork Report, a daily oil and gas trading publication, said on Wednesday that many “international oil traders … have significant trading operations in the U.S. … At least in the short-term, these traders will undoubtedly quit buying from Venezuela until such a time that they are assured that they are not running afoul of U.S. sanctions.”

    TRADE TALKS

    Other analysts also pointed to economic weakness as countering supply-side efforts to tighten the market such as the voluntary supply restraint by the Organization of the Petroleum Exporting Countries (OPEC).

    “Pulling in the opposite (oil price) direction are heightened concerns about global growth, particularly that of China,” said Ole Hansen, head of commodity strategy at Denmark’s Saxo Bank.

    Global economic growth and fuel consumption are expected to slow this year amid a trade dispute between the United States and China, the world’s two biggest economies.

    Officials from Washington and Beijing are set to launch a new round of trade talks on Wednesday aimed at resolving their disputes amid which both sides have slapped hefty import tariffs on each other’s goods.

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  • Gold scales 8-month peak on Fed rate pause hopes, trade woes

    Gold scales 8-month peak on Fed rate pause hopes, trade woes

    Gold prices edged up on Wednesday to hit their highest since May, supported by uncertainty over U.S.-China trade relations and expectations the U.S. Federal Reserve will keep rates on hold later in the day. Spot gold was up 0.2 percent at $1,313.91 per ounce by 0245 GMT, after touching its highest since May 15 at $1,314.10 early in the session. U.S. gold futures rose 0.3 percent to $1,312.30 per ounce.

    “For the short-term gold is going to move higher as the Federal Reserve will have a dovish tone, which should weaken the dollar and give gold a bit of a move up,” said INTL FCStone analyst Edward Meir.

    The absence of an agreement in U.S-China trade talks should also benefit gold, he said.

    Investors are waiting on the Federal Reserve’s policy decision later in the day, with expectations officials will reinforce their recent dovish stance given a stalemate on global trade, signs of a slowdown in the U.S. economy, and waning business and consumer confidence.

    The Fed raised interest rates four times last year.

    Investors are also concerned that criminal charges against China’s Huawei Technologies Co. Ltd. for violating U.S. sanctions against Iran could complicate U.S.-China trade talks.

    China’s Vice Premier Liu is due to meet with U.S. Trade Representative Robert Lighthizer later in the day.

    “Gold also looks good on the charts … Physical demand seems to be improving in some markets and ETF buying has been increasing. In general the path of least resistance is probably higher from here,” Meir said.

    Underscoring investor interest in the bullion, holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, rose 1 percent to 823.87 tonnes on Tuesday, to their highest since June.

    SPDR gold holdings have risen 4.6 percent so far this month, their best since September 2017.

    “A combination of falling treasury yields, anxiety over Brexit and Venezuela is all helping gold,” said Nicholas Frappell, global general manager at ABC Bullion.

    British lawmakers rejected most amendments that aimed to keep Britain from leaving the European Union without a deal, reviving worries of a chaotic withdrawal from the trading bloc that would damage the UK economy.

    Silver rose 0.3 percent to $15.88 per ounce, having hit its highest since July 2018 at $15.92 in the prior session.

    Palladium fell 0.2 percent to $1,343.50, while platinum was up 0.4 percent at $813.

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  • Vietnam foreign investment skyrockets in January

    Vietnam foreign investment skyrockets in January

    FDI pledges for new projects, increased capital and stake acquisitions in Vietnam rose 51.9 percent year-on-year to $1.9 billion in January. In a statement Monday, the Ministry of Planning and Investment said the manufacturing sector attracted the most interest from foreign investors, accounting for $1.19 billion or 62.4 percent of the total FDI. Science and technology ranked second with $185.8 million, followed by real estate with $179.1 million.

    Japanese were the top investors with nearly $364 million. South Korea and China were next with $349.1 million and $307.8 million.

    Ho Chi Minh City is the most attractive location for FDI investors in January, accounting for around 39.1 percent of the total FDI. Southern Binh Duong Province ranked second, accounting for 12.5 percent, followed by northern Hai Duong Province with 6.5 percent.

    As of January 20 authorities had issued licenses for 226 new projects with a total capital of $805 million. Meanwhile, another $340.2 million was pledged for existing projects this month.

    The two biggest projects were Kyoshin Vietnam’s $134.7 million investment expansion in HCMC by Japanese investors to produce, process and export electrical components and molds, and Katolec Global Logistics Vietnam’s $65 million investment for warehousing and storing goods in the northern province of Ha Nam.

    Estimated FDI disbursement for the month was $1.55 billion, up 9.2 percent year-on-year.

    Vietnam reported FDI disbursement of $19.1 billion last year, up 9.1 percent.

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  • Bursa Malaysia’s Q4 earnings fall 6.2% to RM51.9m

    Bursa Malaysia’s Q4 earnings fall 6.2% to RM51.9m

    Bursa Malaysia Bhd’s net profit in the fourth quarter ended Dec 31, 2018 (Q4FY18) was down by 6.2% to RM51.9 million, from RM55.27 million a year ago, mainly due to lower contribution from the securities segment.

    Revenue for the quarter declined 8.7% to RM128.9 million, compared with RM141.2 million in the previous corresponding quarter.

    The exchange has approved a second interim dividend of 11.6 sen per share for FY18, amounting to about RM93.7 million which is payable on Feb 28, 2019. With that, the total dividend (including special dividend) declared for the year amounts to 33.6 sen per share.

    Bursa’s full-year net profit was slightly up by 0.4% to RM224.04 million, from RM223.04 million a year ago, while revenue decreased by 1.2% to RM550 million, against RM556.8 million previously.

    For the year under review, securities market trading revenue increased 2.4% to RM265.8 million from RM259.6 million in FY17, mainly due to higher average daily trading value (ADV) for securities market’s on-market trades (OMT) in FY18.

    However, non-trading revenue saw a marginal decrease of 0.1% to RM165.9 million from RM166.1 million in FY17 due to lower listing and issuer services revenue.

    Bursa CEO Datuk Seri Tajuddin Atan said despite market volatility and challenging global economic environment, the exchange’s financial performance remained resilient.

    “Throughout the year, to create a more facilitative environment, we continued implementing initiatives to further enhance the vibrancy and liquidity of the market,” he added.

    At 2.35pm, Bursa’s share price was trading 7 sen or 0.9% lower at RM7.32 on 751,900 shares done.

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  • New commercial landmark set to open at Huaihai Road

    New commercial landmark set to open at Huaihai Road

    Chinese mall operator Bailian is merging two disused department stores on Shanghai’s Huaihai Road in partnership with urban renewal firm URF to create Theatre X. The two malls on the city’s prime retail street were formerly trendy shopping destinations. Huating Isetan on 527 Huaihai Road M was the first Japanese Isetan outlet in China, while Bailian’s No.1 Department Store next door once enjoyed great popularity – both commercial gems of the 1990s.

    The new Theatre X shopping mall will merge the two sites, according to an announcement, and offer “interactive and immersive experiences” to consumers. The 25,000sqm property will offer popular international brands, shared spaces for pop-ups, and exhibition stages for Ted Talks – with developers expecting the venue to become a “pilgrimage site for trendsetters.” It will feature a 40m-high waterfall and giant digital screens.

    Theater X is set to open in September, with further developments in the immediate vicinity expected to follow.