Facebook Instagram Linkedin Twitter Youtube
Home Blog Page 11421

Emerging market sell-off is only going to get worse, survey says

With the Federal Reserve still boosting interest rates and President Donald Trump still raising tariff threats, the bottom for emerging markets remains some way away, market players say.
The selloffs in developing-nation currencies and stocks are likely to continue in the second half of 2018, a survey of 20 investors, traders and strategists by Bloomberg shows. It’s not all doom and gloom, though — bonds may fare better for their relative safety, and some particular markets might see gains, according to the June 26-July 4 poll.
The allure of riskier assets is starting to fade amid escalating U.S.-China trade frictions and the Fed’s continuing quantitative tightening. Currencies and equities completed their worst quarter since the worries about a China hard landing back in 2015. A Bloomberg Barclays index of emerging-market local-currency debt posted its first three-month drop since 2016 as investors became more selective. All three measures have made little headway so far in July.
“Investors aren’t done worrying about the outlook for emerging markets, as we expect the environment for a stronger dollar to continue,” said Hideaki Kuriki, chief fund manager in Tokyo at Sumitomo Mitsui Trust Asset Management Co., which oversaw the equivalent of $90 billion as of March. “The U.S. economy is strong on a relative basis and the dollar and yields there are also high — and that’s why emerging markets will continue to struggle.” — Bloomberg

Bitcoin climbs as big-name investors start taking an interest

Bitcoin headed for its biggest increase in two weeks on Monday amid a steady drip of news reports suggesting some of the biggest names in investing are starting to embrace digital currencies.
The largest crypto-coin advanced 3 percent to $6,371 as of 9:48 a.m. in London, according to composite prices on Bloomberg. Rival coins Ripple, Ethereum and Litecoin all climbed at least 2 percent. Bitcoin hasn’t notched a one-day gain of at least 2 percent since July 2.
BlackRock Inc. has formed a team to look into ways the world’s largest asset manager can take advantage of the cryptocurrency market and blockchain, London’s Financial News reported. The company said afterward in a statement that its focus was largely on blockchain, the technology underlying Bitcoin.
Last week, billionaire investor Steven Cohen was said to have put money into a hedge fund focusing on cryptocurrencies and blockchain-based companies. In Europe, the owner of Switzerland’s securities exchange in Zurich said it’s creating a platform for trading digital assets. — Bloomberg

Money matches: Five who could be next for Pacquiao

Kuala Lumpur — Manny Pacquiao turned back the clock in Kuala Lumpur Sunday to register a first knockout for nine years and win the welterweight world title from WBA title-holder Lucas Matthysse of Argentina.
With the Filipino fighting legend back in the big time, AFP Sport looks at five boxers who could be money-spinning opponents for Pacquiao’s next fight:
Amir Khan
Pacquiao singled out the Brit, who used to be his training partner when both were under Freddie Roach’s wing, as a “potential opponent” at his post-fight press conference on Sunday. Former light welterweight champion Khan has long wanted a crack at Pacquiao and the pair agreed to fight in Dubai last year before the deal collapsed when the UAE investors failed to come up with the money in time. Khan’s speed and power could trouble Pacquiao but the Briton has suffered huge knockout defeats in the past at the hands of big punchers Danny Garcia and Saul “Canelo” Alvares.
Jeff Horn
Pacquiao is not someone who talks revenge, but he is still smarting from the way Horn took his WBO welterweight belt in Brisbane a year ago with a controversial points decision in front of a heavily partisan home crowd. Horn lost the title when stopped by Terence Crawford last month. This time Pacquiao would call the shots meaning the bout would take place on his favoured turf, either at home in the Philippines or back in Kuala Lumpur where Pacquiao enjoyed huge support in the 15,000-seat Axiata Arena.
Terence Crawford
If Pacquiao wants his old WBO belt back then he needs to go knocking on unbeaten 30-year-old American Crawford’s door. The trouble is, Crawford is now rated as “best pound-for-pound fighter” in the world, meaning it might be a dangerous fight to take on. Bob Arum and Top Rank would likely want it in Las Vegas to maximise pay-per-view returns as would Crawford, who has never fought outside of the US. Pacquiao might just be lured by a lucrative share of revenues because at nearly 40 years old, he will not have many more eye-watering pay days left.
Vasyl Lomachenko
Top Rank promoter Arum said last week in comments reported by the Los Angeles Times that Pacquiao was one of the options for Ukrainian lightweight champion Lomachenko’s return at the end of this year following shoulder surgery. Pacquiao hinted at interest after beating Matthysse at welterweight (147 pounds) on Sunday but some observers doubt that he could move back down in weight to 140lb or less to meet Lomachenko, who has only fought at 135lb or below. Pacquiao’s long-time conditioning coach Justin Fortune says “Pac-Man” would have no problems, though. “He could make 135 pounds inside of four weeks,” he told AFP last week. “His metabolism is ridiculous. I don’t know what it is. He’s a freak.”
Floyd Mayweather
Maybe the most left-field suggestion, but Pacquiao is ruling nothing out and says he will be up for a rematch of the pair’s 2015 superfight, one of the richest in history, if Mayweather wants to come out of retirement. “I have the belt, so it’s up to him… let’s do a second one,” said Pacquiao after his win on Sunday. Whether there would be the same appetite from fans for pay-per-view purchases as there was for the first fight between the two best fighters of their generation seems doubtful as Mayweather is now 41 and Pacquiao will be 40 in December. The man nicknamed “Money” might just decide instead to stay at home counting his cash rather than risk losing his precious 50-fight unbeaten record.

Asia’s biggest cocoa grower has a chocolate problem. This icy treat may be the answer

Asia’s biggest cocoa grower has a chocolate problem.
Cocoa production in the 130-year old industry in Indonesia is set to shrink for the third straight year as farmers switch to other crops and annual per capita consumption of chocolate languishes at just 11 ounces (300 grams) — half the rate of neighboring Malaysia, according to Euromonitor International.
That might just be about to change, though, thanks to a Millennial re-imagining of the chocolate-malt drink Milo — one of the region’s favorite treats — into Es Kepal Milo, which translates as “Milo on round ice.”
The craze for Es Kepal Milo — a mixture of Milo poured over crushed ice to make a kind of chocolaty snow cone — has spawned more than 17,000 “how-to-make” videos from Indonesia alone, with millions of hits on YouTube.
It’s also created a new retail empire for entrepreneurs such as Emanuel Agung, the 34-year-old owner of Es Kepal Milo Viral. As well as helping sales for Milo-maker Nestle SA, it might lift overall chocolate confectionery sales in Indonesia and the fortunes of PT Mayora Indah, the country’s second-largest food company, which makes Choki Choki chocolate sticks, as well as PT Kaldu Sari Nabati Indonesia, which makes Richoco wafers.
“Demand is incredibly high,” said Agung, who buys 1 ton of Milo a day to supply his 150 Es Kepal Milo stalls. “Nestle was overwhelmed with our orders in the first few weeks of sales, but now supply is stable.”
Agung, who learned how to make the icy treat in Malaysia, opened his first outlet in Jakarta in March and the franchise is now in several cities, selling about 30,000 cups a day.
That’s good for Nestle, based in the Swiss city of Vevey, which has also recently started selling frozen branded ice creams such as Kit Kat, Crunch and Milo in Indonesia. Switzerland has a lot to teach Indonesia about chocolate – it leads the world in per capita consumption at about 10 kilograms a year.
“We are excited to learn that people have found creative ways in creating recipes using our products,” Debora Tjandrakusuma, Nestle’s director of legal and corporate affairs in Indonesia, said in an email response to questions. Nestle noted that while most of the cocoa it gets from Indonesia goes to its international market, it does sell some products made from locally-sourced cocoa.
The challenge for growers is to turn that demand for chocolate into cocoa demand. Indonesia’s cocoa production is set to drop to 275,000 tons this year from 290,000 tons in 2017 because of aging trees and as farmers switched to more profitable crops such as oil palm, according to the Indonesia Cocoa Association in February. The slump has turned the world’s third-largest grower into a net importer.
While per-capita consumption is still low, demand for chocolate confectionery grew by 10 percent in 2017, thanks to wide distribution, aggressive marketing and promotional strategies, according to Euromonitor. For a developing country such as Indonesia, where the market was worth about $1 billion in sales last year, affordability is still top-of-mind for many households when purchasing indulgence products.
Millions of Indonesians survive on less than $2 per day and traditional snacks such as banana fritters and coconut-milk cookies are their first choices to indulge their sweet tooth.
Chocolate is considered a luxurious food, according to Sony Satari, chairman of Indonesia Cocoa and Chocolate Industry Association. Indonesians prefer cheaper chocolate that contain vegetable oil rather than more expensive varieties made from cocoa butter, he said. “Paying 25,000 rupiah ($1.70) for a chocolate bar is expensive for many Indonesians,” Satari said.
Brand Image
For Es Kepal’s Agung, who has more than three years experience in the culinary business, good quality food and brand are the main factors to lure buyers, not the price. He says he sells Es Kepal Milo for as much as 20,000 rupiah a cup mainly to millennials aged between 14 to 26.
“Milo has a strong brand image, so as long as we maintain the quality, using only pure Milo, then the customers will accept it,” Agung said. “It’s beyond my expectation. People from low to middle and higher class in cars were lining up in my outlets.” — Bloomberg

Top-grade iron ore may spike to $100

High-grade iron ore may spike to $100 a metric ton as China intensifies a clampdown on pollution by restraining industrial activity, adding further momentum to a trend that’s reshaped the global market in recent years and driven buyers in Asia’s top economy seek out better-quality material.
After sinking in March, top-quality ore with 65% iron content gained every month, hitting $91 a ton on Friday, and keeping it in positive territory this year even as global trade frictions mounted, according to Mysteel.com. In contrast, benchmark 62% ore has flat-lined in the $60s, and is down 14%. The divergence has exploded the gap between the two.
“Short-term spikes to this level are entirely possible in response to Chinese production and policy announcements,” said Paul Gray, vice president for iron ore markets at Wood Mackenzie Ltd., referring to the $100 mark for top-grade prices. While WoodMac’s view is that high-quality ore won’t trade in three figures on a sustainable basis, spreads are expected to remain wide.
In a market characterized by extraordinary quantity — global iron ore shipments top 1.6 billion tons a year — the sustained push for quality among buyers stands to benefit top miners Rio Tinto Group and BHP Billiton Ltd. in Australia, as well as Brazil’s Vale SA as it brings on new high-grade deposits. After imposing unprecedented curbs on mills last winter, China is ratcheting up the pressure, expanding the area that will be affected by production restrictions and cutting capacity in Tangshan, a key steel-making hub.
“There’s been some structural shift that seems to be a preference for higher grade,” according to Iron Ore Research Pty Director Philip Kirchlechner, who said costlier coking coal and elevated mill margins were also driving the trend. “The premiums, they will not be reduced: I will expect the premiums for high-grade ore to be around the current levels and not decline.”
At WoodMac, Gray expects the spread between high-grade ore and benchmark material to average 26% during the Chinese winter, slightly higher than last time around. “Our-longer term view is for the spread between 62% and 65% to narrow slightly as Chinese steel margins contract,” he said.
Using higher-content ore — and supplies with lower levels of impurities, especially alumina — enables mills to produce more steel while cutting back on pollutants. Policy makers in China are stepping up their environmental push, and this month announced a three-year masterplan to intensify that push.
The rising importance of quality has been flagged by Australia, the top iron ore shipper. Earlier this month, the Department of Industry, Innovation & Science said while spreads may narrow as steel production ramps up in China, that they won’t snap back to historical levels given the “ongoing government push to improve air quality through increasingly stringent air pollution policies.”
S&P Global Ratings made a similar point, but focused on the cheaper end of the market. The penalty for low-grade material, with less than 62% iron content and higher impurities “could stay elevated for some time, because China’s focus on combating pollution will favor higher-grade ore,” it said.
Benchmark iron ore is likely to break above $70 a ton in the fourth quarter when winter steel-curtailment measures take effect, according to Citigroup Inc. Increasingly strict emission standards and improved margins will boost demand for high-quality bulk commodities, including iron ore, the bank said in a note.
There are voices of caution, including from CRU Group, which highlighted prospects for rising high-grade ore supply, including production from Vale’s S11D in the Amazon. It also pointed to the expectation that after last winter’s curbs in China, mills will be better prepared this time around.
“The high-grade premium is driven by margins for Chinese steelmakers and coking coal prices, and we are expecting both of these to fall,” said CRU’s Erik Hedborg. “There is more high-grade supply on the way, with Vale’s S11D increasing production,” as well as from Canadian projects, he said.
For Iron Ore Research’s Kirchlechner, a former marketing head at Fortescue Metals Group Ltd., the shift will continue to favor better quality material. “If you ask me if you prefer to be a high-grade or low-grade producer, I’d probably say that I’ll be happy if I was a high-grade producer.” — Bloomberg

Vitarich bags SEC approval for equity restructuring

The Securities and Exchange Commission (SEC) has approved the equity restructuring of Vitarich Corp that will allow the firm to wipe out its deficit and declare dividends to shareholders.
In a disclosure to the stock exchange on Monday, July 16, the listed agribusiness firm said the SEC has approved its application to decrease its authorized capital stock by reducing par value of 3.5 billion shares from P1 each to 38 centavos per share, resulting to an authorized capital stock of P1.33 billon.
Vitarich decided to pursue a quasi-reorganization last May 2017, with the details finalized only last April. Aside from eliminating its deficit, the equity restructuring will let the company declare dividends to shareholders out of its unrestricted retained earnings.
The company noted that the change in its par value will be reflected on the Philippine Stock Exchange’s trading system starting on July 23. — Arra B. Francia

SPC turns over Naga power plant complex to PSALM

SPC Power Corp. has turned over the 153.1-megawatt (MW) gas turbine power plant in Naga, Cebu to the Power Sector Assets Liabilities Management, Inc. (PSALM), ending the legal tussle over the ownership of the asset.
In a disclosure on Monday, July 16, SPC Power said it had executed a joint turnover certificate with PSALM on July 13, 2018, resulting in the listed company turning over the Naga power plant complex to the agency in charge of privatizing the government’s power generation assets.
The move paves the way for Aboitiz Power Corp. to take hold of the complex after years of legal proceedings that ended in its favor.
“Pursuant to the Decision of the Supreme Court in Osmeña v. PSALM et al., declaring as null and void the Asset Purchase Agreement and Land Lease Agreement covering the Naga Power Plant Complex, entered into by PSALM and SPC,” SPC Power said.
Sought for comment, AboitizPower President Antonio R. Moraza said in a text message: “We have to go in and assess [the] condition of existing units and what we will do as future potential.”
He added that rehabilitation is the mostly likely interim next step for the company. — Victor V. Saulon

China Bank to open more branches this year

China Banking Corp. (China Bank) is set to open more branches this year amid rationalization and digital push.
Following the listing ceremony of its long-term negotiable certificates of deposits (LTNCD) in Makati, the Sy-led lender said China Bank will open eight more branches until December.
“We will open 12 branches this year. So far, we have opened four,” China Bank First Vice-President for Retail Banking Jose L. Osmeña, Jr. said Thursday. — Karl Angelo N. Vidal

PSEi ends four-day rally

Local equities slumped on Monday, July 16, as the market continued to consolidate within range due to lack of catalysts.
The bellwether Philippine Stock Exchange index (PSEI) snapped its four-day winning streak on Monday, dropping 0.4% or 29.74 points to 7,369.44. The broader all shares index likewise gave up 0.27% or 12.29 points to 4,462.60.
“The market is still consolidating and trying to test the 7,400. It’s range-bound between 7,400 and 7,200. So it has to test and trade within that range first, before it tests new highs. That’s the behavior of the market, it’s just consolidating,” First Metro Investment Corp. Vice President Cristina S. Ulang said in an interview at the sidelines of the company’s mid-year economic briefing in Makati City.
Regina Capital Development Corp. Managing Director Luis A. Limlingan pointed to the lack of leads on Monday, which failed to push the index past the 7,400 mark.
“Lack of catalysts remained the culprit once again, as some investors were profit taking after the release of China GDP (gross domestic product) and renewed fears of an escalating trade war. Value turnover remained weak as there were not enough leads to push the index past the 7,400 resistance,” Mr. Limlingan said in a mobile message.
The industrial counter was the lone winner among the sectoral indices, gaining 0.22% or 23 points to 10,470.73.
Holding firms led losers, shedding 0.76% or 55.20 points to 7,249.75, followed by property’s decline of 0.66% or 23.81 points to 3,589.11. Mining and oil went down 0.62% or 60.48 points to 9,659.65; services lost 0.19% or 2.72 points to 1,429.19; while financials slipped 0.11% or 1.91 points to 1,823.83.
Some 919.84 million issues switched hands valued at P4.28 billion, thinner than Friday’s P5.46-billion turnover.
Decliners outpaced advancers, 90 to 82, while 55 names were unchanged.
Foreign investors remained in selling position, as net foreign outflows accelerated to P279.31 million on Monday, higher than the previous session’s net sales of P37.78 million.
Half of the 20 most actively traded issues of the day ended in negative territory, with Ayala Land, Inc. losing 1.46% to P37.10 each. Megawide Construction Corp fell 1.75% to P19.04 each, BDO Unibank, Inc dipped 0.78% to P127.90 each, while SM Investments Corp plunged 1.64% to P901 each.
Meanwhile, shares in Metropolitan Bank & Trust Company were the most actively traded, gaining 0.43% to P69.80 each, after the company clarified that reports of a P400-million branch fraud were false. — Arra B. Francia

World Cup win gives French something to bask in, if only for a day

France’s World Cup victory gave the country a much-needed morale boost after a decade of moroseness brought on by terrorist attacks and a lackluster economy.
While the feel-good moment is bringing the nation together in a way only tragic events have in the past, don’t expect it to translate into something to take to the bank, economists warned.
“The victory will clearly impact the social cohesion in France: It brings people together, it creates a sense of national community,” said Nathalie Henaff, a research follow at the Limoges University economy of sports study department. “French people will consume differently, spend more time outdoors to celebrate, change behavior for some time so we will witness a transfer of consumption. For the economy, it will be marginal. It’s a wash.”
Throughout the night, overjoyed supporters waving the nation’s blue-white-and-red flags screamed, honked and celebrated in the streets after the national team was crowned the world champion in soccer. On Paris’s landmark Champs Elysees avenue, police used tear gas to disperse a group of young men who vandalized the well-know “Drugstore” building, Agence France-Presse said.
Chanting the Marseillaise, the national anthem, in the Paris metro, on the Rhone river-bank cafes and elsewhere, people kissed, hugged and applauded. They sang “I Will Survive,” which was also the 1998 victory tune, when France first won the title in the world’s most popular sport.
French President Emmanuel Macron threw his arms in the air when victory was declared, and later kissed Kylian Mbappe on his head to congratulate the tournament’s best young player. As he stood under heavy rain on the podium next to Russia’s Vladimir Putin and Croatia’s Kolinda Grabar-Kitarovic, Macron hugged France’s manager Didier Deschamps and kissed the golden trophy before the players held it chanting “we are the champions.”
“Les Bleus,” as the national team is called for their blue jerseys, will be coming home from Russia on Monday with the 6-kilo solid gold trophy. Millions are expected to greet the team, with its strikers 19-year-old Mbappe, Paul Pogba and Antoine Griezmann, as it descends in the afternoon on the Champs Elysees.
“You put your heart into it, you’ve made your country proud,” Macron told the players in the locker room after the game. “There are 66 million French people waiting for you, many of them young. You’re an example for the country.”
National Celebration
France won against Croatia 4 goals to 2 in the Sunday game at Moscow’s Luzhniki stadium. In the run up to the final, the French beat teams from nations including Argentina, Uruguay and Belgium. Croatia won its qualification against England and eliminated host nation Russia.
“In the past, French people only got together, in national union, after tragic events such as the terrorist attacks,” said Bernard Sananes who heads the Elabe polling institute. “This is a happy moment, a positive moment that they have been craving for.”
No Boost
For all the celebration, the victory’s impact on the he euro area’s second-biggest economy will barely be felt.
Eurler Hermes’ Ludovic Subran said the victory may add 0.1 percentage points to France’s gross domestic product. The economy may expand 1.9 percent instead of 1.8 percent, according to the Paris-based economist’s forecast. It will also improve consumption by 0.2 points to 1.3 percent, he said.
Finance Minister Bruno Le Maire was more confident ahead of the game.
“A World Cup victory gives French people confidence,” he said on France 2 television on July 11.. “There is a part of irrationality in economy, that thrives on confidence, desire and enthusiasm.”
Chirac’s ‘Euphoria’
The 1998 win prompted a small jump in consumer confidence with no noticeable impact on the GDP. French economic growth this year may fall short of the government’s 2 percent forecast and is set to slow in the years after, according to the Bank of France. It expanded 2 percent in 2017, a six-year high.
For Macron, the victory is good news and plays into the “ France is back” narrative that he has promoted at home at abroad. Still, he might not get the bounce that then French President Jacques Chirac got in 1998.
Chirac gained from a feeling of “euphoria,” with a 15 percentage-point jump in popularity and an approval rating that flirted with 70 percent, according to Ipsos. He maintained that high level for over a couple years, also helped by the fact that he was leaving the day-to-day management of his country to his prime minister.
‘Fragile’ Macron
Macron doesn’t enjoy the same level of support from his people 14 months into office as he seeks to push through reforms to everything from the labor market to retirement, health and unemployment benefits.
He’s in “a fragile” situation, Les Echos newspaper said in its July 12 editorial. His popularity has fallen to an average of 33 percent, down 13 percentage points since the start of the year, hovering very close to the record low of his predecessor and former boss, Socialist President Francois Hollande.
“Macron will try hard to show he’s not seeking to use the victory for his own political goals,” said Sananes. “He is trying to rectify his image right now, trying to show humility because he is tagged as arrogant and disconnected from people’s problem. It will be a balancing act to take a low profile while celebrating a major victory.” — Bloomberg

Robinsons Bank raises P1.78 billion from LTNCD offer

Robinsons Bank Corp. raised P1.78 billion of long-term negotiable certificates of deposit (LTNCD), which it wants to use to support its loan growth.
At the ceremonial listing of the investment instruments on Monday at the Philippine Dealing System (PDS) in Makati City, the Gokongwei-led lender said it raised P1.781 billion from the peso-denominated issue.
The notes will mature in 5.5 years and carry an interest rate of 4.875% to be paid quarterly until Jan. 16, 2024. — Karl Angelo N. Vidal

MIAA collection of terminal fees from unused airline tickets at P259 million

The Manila International Airport Authority (MIAA) said more airlines are turning over unused terminal fees reaching a collection of more than P259 million as of Friday, July 13.
MIAA General Manager Ed V. Monreal said in a statement on Monday, July 16, that Singapore Airlines, Kuwait Airways, KLM Royal Dutch Airlines, Ethiopian Airlines, Qatar Airways and Cathay Pacific are the companies that recently surrendered their collection for unused tickets.
“The total amount of collection as of July 13, 2018 is P259,355,329. MIAA earlier said that all amounts that will be remitted by the airlines will be kept in a special escrow account and can be refunded by passengers either personally or by representative,” it wrote. — Denise A. Valdez

1...11,42011,42111,422...13,385Page 11,421 of 13,385
© 2024 BusinessWorld Publishing.
All rights reserved.
Read our privacy guidelines
Facebook Instagram Linkedin Twitter Youtube