AtOneGoFinancial Blog

01 June 2021

Asia’s factories sustain expansion, supply chain woes cloud outlook

Japan and South Korea saw an expansion in factory activity moderate in May, purchasing managers’ indexes (PMI) showed today, underscoring the fragile nature of their recoveries.— Reuters pic

TOKYO, June 1 — Asia’s factory activity continued to expand in May thanks to an ongoing recovery in global demand, surveys showed today, though rising raw material costs and supply chain constraints clouded the outlook.

A spike in Covid-19 infections in countries like Taiwan and Vietnam could disrupt semiconductor output and supply chains, posing a headache for manufacturers and weighing on Asia’s export-driven recovery, analysts say.

Japan and South Korea saw an expansion in factory activity moderate in May, purchasing managers’ indexes (PMI) showed today, underscoring the fragile nature of their recoveries.

“A spread of new variants is already having a negative impact on supply chains. If this situation persists, it would hit Asian manufacturers that had been scrambling to diversify supply chains out of China,” said Toru Nishihama, chief economist at Dai-ichi Life Research Institute.

“Asia’s recovery has been driven more by external than domestic demand. If companies have trouble exporting enough goods, that bodes ill for the region’s economies,” he said.

China’s factory activity expanded at the fastest pace this year in May on solid demand at home and overseas, though sharp rises in input prices and strains in supply chains crimped some firms’ production, a survey showed today.

The Caixin/Markit Manufacturing PMI, which focuses on smaller firms, rose to 52.0 last month, the highest since December and inching up from April’s 51.9.

The survey followed China’s official PMI yesterday, which showed factory activity in the world’s second-largest economy slowed slightly in May on surging raw material costs.

Factories in Taiwan and Vietnam were so far holding up despite rising infections. Taiwan’s PMI stood at 62.0 in May, slowing from April but remaining well above the 50-mark that separates growth from contraction.

Vietnam’s PMI also stayed above 50 at 53.1 in May, though slowing from 54.7 in April.

The final au Jibun Bank Japan Manufacturing PMI dropped to a seasonally adjusted 53.0 in May from 53.6 in the previous month, but higher than a 52.5 flash reading.

A global chip shortage and supply chain disruptions have hit car production, causing Japan’s output growth to miss expectations in April.

Japanese auto giants Toyota Motor and Honda Motor have suspended output in Malaysia due to lockdown measures imposed to combat the pandemic, Kyodo news agency reported today.

Separate data released today showed Japanese companies cut spending on plant and equipment for the fourth consecutive quarter in January-March, as the economy struggles to shake off the drag from the coronavirus pandemic.

South Korea’s PMI stood at 53.7 in May, slowing from April but extending growth into an eighth straight month.

In a sign South Korean firms were facing rising cost burdens, however, the survey also showed a gauge of input prices surging to its highest level in over 13 years. — Reuters

Source: Malay Mail

Asian stocks at month high ahead of US jobs data, gold rises

SINGAPORE, June 1 — Asian stock markets rose today while gold flirted near five-month highs ahead of European and US data this week that will likely offer clues on the health of the global economy.

The world’s recovery from the Covid-19 pandemic remains patchy with exports reviving but broader economic activity still dampened by new measures to contain fresh outbreaks.

China’s factory activity expanded at the fastest pace this year in May as domestic and export demand picked up, though sharp rises in raw material prices and strains in supply chains crimped some companies’ production, a business survey showed today.

Taiwan and South Korea share indexes climbed in early trade while Japan, Australia and Hong Kong markets retreated, pushing up MSCI’s broadest index of Asia-Pacific shares outside Japan by 0.3 per cent.

South Korea’s index jumped 0.8 per cent and led regional gains after the country’s exports logged their sharpest expansion in 32 years in May, marking another robust month of shipments fuelled by stronger consumer demand globally.

The MSCI Asia index rose to the highest in a month, taking total gains made so far this year to nearly 7 per cent. World equities have risen for a fourth straight month as ample liquidity supported risk taking despite worries of higher inflation.

US stock futures were little changed after a holiday yesterday and following European share markets ending below record highs.

While asset markets have rallied last month, policymakers are increasingly focused on tackling inflation at a time when the underlying structural economy has been struggling to gain traction.

“The fixation of the markets now is on inflation and rightly so because of so much of quantiative easing and supply chain disruptions,” said Hou Wey Fook, chief investment officer at DBS Bank.

The main event of the week will be US payrolls on Friday with median forecasts at 650,000, but the outcome is uncertain following April’s unexpectedly weak 266,000 gain.

Though US inflation data last week was above estimates, another big miss on the jobs front would put pressure on the Fed to postpone plans to wind down its stimulus, analysts say.

The dollar languished near multi-month lows versus major peers as traders pondered the prospects for early policy normalisation by the Federal Reserve ahead of the jobs report.

Up next, the Reserve Bank of Australia is widely expected to remain on hold and maintain a dovish bias at today's policy review.

Concerns about global inflation have supported gold, with prices for the yellow metal rising 8 per cent this month, vaulting comfortably above US$1,900 (RM7,828.95). Today, gold prices traded near a five-month high scaled last week.

Oil prices rose ahead of an Opec+ meeting and on optimism that fuel demand will grow in the months ahead with the summer driving season starting in the United States, the world’s top oil consumer.

Brent crude futures for August added 0.8 per cent to US$69.89 a barrel, while US crude rose 1.57 per cent to US$67.3.

There was little action in cryptocurrencies, with bitcoin steady around US$37,000. — Reuters

Source: Malay Mail

Japan finance minister: Don’t expect specific tax rates to be debated at G7

Japan's Finance Minister Taro Aso said G7 is unlikely to debate specific figures on minimum tax rates at their weekend meeting. — Reuters pic

TOKYO, June 1 — Finance leaders from the Group of Seven rich countries have narrowed their difference of opinions over global taxation but they are unlikely to debate specific figures on minimum tax rates at their weekend meeting, Finance Minister Taro Aso said.

Aso is planning on a bilateral meeting with US Treasury Secretary Janet Yellen on the sidelines of the June 4-5 G7 meeting in Britain, although the details weren’t finalised, he told reporters after a cabinet meeting. — Reuters

Source: Malay Mail

Dollar in doldrums as traders ponder Fed policy path; sterling soars

The dollar index, which tracks the greenback against six peers, was back below 90 from as high as 90.447 on Friday. — Reuters pic

TOKYO, June 1 — The dollar languished near multi-month lows versus major peers today as traders pondered the prospects for early policy normalization by the Federal Reserve ahead of a key jobs report at the end of the week.

The British pound rallied to a three-month peak at US$1.425 while Canada’s loonie hovered near a six-year top, amid market expectations for policy tightening in those countries.

Australia’s dollar rose for a second day to as high as US$0.77605 ahead of a central bank announcement at 0430 GMT on Tuesday, although economists predict no change to monetary policy.

The offshore Chinese yuan edged back toward a three-year high of 6.3526 per dollar reached yesterday, last trading at 6.3640, paring a retreat spurred by the monetary authority’s tightening of banks’ FX requirements to stem the currency’s rise.

The dollar index, which tracks the greenback against six peers, was back below 90 from as high as 90.447 on Friday, when a measure of US inflation closely watched by the Fed posted its biggest annual rise since 1992.

The gauge sank 0.3 per cent yesterday, in a market thinned by US and British holidays. Fed officials, led by Chair Jerome Powell, have said repeatedly they expect price pressures to be transitory and monetary stimulus to stay in place for some time, but investors are wary that a strong pandemic recovery could force the Fed’s hand.

Vice Chair Randal Quarles and Governor Lael Brainard will both be speaking at separate events today, while nonfarm payrolls numbers on Friday will be even more closely scrutinized than usual after the much-weaker-than-expected reading a month ago.

Commonwealth Bank of Australia strategist Joseph Capurso says that trimmed measures of inflation, which eliminate the most extreme price changes, show the US has no inflation problem, and markets will need to unwind some of the expectation for near-term policy tightening, which will weigh on the dollar.

The global pandemic recovery will provide an additional headwind, he said. “The world economy is clearly recovering, and that is going to be bad for the US dollar because it’s a counter-cyclical currency,” Capurso said.

“The US dollar has been pretty heavy in the last few weeks, and I think it keeps trending lower.” That includes a drop to US$1.24 (RM5.11) per euro by the end of this month, extending to US$1.32 by the middle of next year.

the euro gained 0.1 per cent to US$1.22325 today, not far from a nearly five-month high of US$1.2266 touched last week.

The dollar fell for a second day against the yen, weakening 0.2 per cent to 109.375. The pair had climbed as high as 110.20 on Friday, following the inflation data. — Reuters

Source: Malay Mail

Ringgit opens higher against US dollar

KUALA LUMPUR, June 1 (Bernama) — The ringgit opened higher against the US dollar today, fuelled by increasing oil prices because of the anticipated lower production and ahead of US economic data expectations.

At 9.01am, the local currency rose to 4.1180/1240 against the greenback from yesterday's close of 4.1220/1270.

ActivTrades trader Dyogenes Rodrigues Diniz said investors will be paying attention to the ISM Manufacturing Purchasing Managers’ Index (PMI) for the US dollar due today.

“This indicator measures the economic activity through the eyes of managers of the main companies in the US and it is a leading indicator because it shows the level of confidence in the future,” he said.

The Organisation of the Petroleum Exporting Countries (Opec) yesterday projected that lower oil output in Nigeria, Angola, and Iran in May partly offset major increases from top producers Saudi Arabia and Iraq to result in a lower-than-expected rise in the supply.

Opec and its allies, known as Opec+ is scheduled to meet today o discuss the alliance’s moves after July as oil stockpile is expected to become lower in the second half of the year as most countries recovered from the Covid-19 pandemic.

As at the time of writing, the benchmark Brent crude oil advanced 0.82 per cent to US$69.89 per barrel.

Meanwhile, against a basket of major currencies, the local note was traded lower at opening.

Against the Singapore dollar, the ringgit eased slightly to 3.1188/1245 from yesterday’s close of 3.1152/1194 and weakened vis-a-vis the euro to 5.0355/0445 from 5.0227/0304.

It also depreciated against the yen to 3.7638/7697 from 3.7565/7621 and lowered against the British pound to 5.8591/8680 from 5.8421/8508. — Bernama

Source: Malay Mail

Pemerkasa+ stimulus package lifts Bursa Malaysia higher at opening

KUALA LUMPUR, June 1 — Bursa Malaysia opened slightly higher today with market sentiment lifted by the Pemerkasa+ stimulus package unveiled yesterday to assist businesses and the people as the nation entered full lockdown today.

At 9.01am, the benchmark FTSE Bursa Malaysia KLCI (FBM KLCI) added 2.38 points, or 0.15 per cent, to 1,585.93 from 1,583.55 at Monday’s close.

The index opened 2.19 points higher at 1,585.74.

Market breadth was positive with gainers leading losers 200 to 102, while 226 counters were unchanged, 1,605 untraded and 9 others suspended.

Total volume stood at 246.80 million units worth RM96.78 million.

Malacca Securities Sdn Bhd said the market sentiment might be lifted by the Pemerkasa+ stimulus package that was unveiled yesterday ahead of the full movement control order (FMCO).

Prime Minister Tan Sri Muhyiddin Yassin, on Monday, announced a RM40 billion aid package, anchored on three main objectives, namely increasing public healthcare capacity, continuing people welfare agenda, and supporting business continuity.

“Investors may see buying interest in essential sectors that are able to operate during the lockdown. Commodity-wise, crude palm oil price fell below the RM4,000 level, while oil price climbed above US$69 per barrel,” the brokerage said in a note.

It said with the nationwide lockdown in place, traders may focus on sectors such as transportation and logistics, packaging, and essential consumer stocks.

“Besides, traders may see bargain-hunting in the energy sector amid higher oil price following heavy selldown yesterday. Also, the vaccine theme could be catching up as the government is looking to expedite the vaccination progress,” Malacca Securities said.

Meanwhile, Rakuten Trade Sdn Bhd reckons trading for regional markets to remain rather mixed today.

“On the home front, following a knee-jerk reaction yesterday due to the full lockdown (announcement), we believe there should be a rebound today. Thus, we expect the FBM KLCI to possibly trend within the 1,590-1,600 range today,” it said.

Among the heavyweights, Maybank fell four sen to RM8.14, Public Bank eased one sen to RM4.20, PetChem and IHH rose five sen higher each to RM8.10 and RM5.35, respectively.

Other top losers included BAT which shed 56 sen to RM15.20, Serba Dinamik dropped 33.5 sen to 79.5 sen and Hexza Corp was nine sen weaker at RM1.06.

Of the actives, Sunzen added four sen to 29 sen, Focus Dynamics inched up one sen to 55 sen, while Tanco was flat at 14.5 sen.

On the index board, the FBM Emas Index rose 16.35 points to 11,512.16 and the FBMT 100 Index gained 17.06 points to 11,215.65.

The FBM Emas Shariah Index added 18.10 points to 12,791.01, the FBM 70 improved 23.33 points to 14,786.23, and the FBM ACE advanced 52.67 points to 7,733.93.

Sector-wise, the Financial Services Index garnered 22.91 points to 15,032.71, the Plantation Index edged up 2.27 points to 6,884.67, and the Industrial Products and Services Index was 0.47 of-a-point better at 191.33. — Bernama

Source: Malay Mail

Australia’s Nine Entertainment signs content deal with Facebook, Google

The multi-media firm said it would supply content for Google’s News Showcase platform for five years and to a similar Facebook product for three. — Reuters pic

SYDNEY, June 1 — Nine Entertainment Co Holdings Ltd said today it had signed multi-year content-supply deals with Google and Facebook under Australia’s news media bargaining code.

The agreement, terms of which were not disclosed, comes after rival Seven West Media Ltd and News Corp signed similar deals following the enactment of tough laws to make US tech giants pay for displaying news on their platforms.

The multi-media firm said it would supply content for Google’s News Showcase platform for five years and to a similar Facebook product for three.

Google would also expand its marketing ventures across Nine’s platforms, the publisher of the Australian Financial Review, The Age and The Sydney Morning Herald newspapers added.

After considering these new deals and ongoing subscription revenue for Nine’s mastheads, the Sydney-based company said it expected growth of A$30 million (RM95.5 million) to A$40 million (US$23.2 million to US$31 million) in its publishing unit’s fiscal 2022 core earnings. — Reuters

Source: Malay Mail

Coinbase wants to start its own ‘media arm’ to fight crypto misinformation

Coinbase is seeking to create its own media arm to fight against misinformation about cryptocurrencies. — AFP pic

NEW YORK, June 1 — The cryptocurrency exchange platform Coinbase plans to become — in its words — a “source of truth,” arguing that journalists are essentially bullies riddled with conflicts of interest.

In fact, the firm considers that every tech company should speak directly to its audience, effectively becoming media companies in their own right.

Interest in cryptocurrencies seems to grow with each passing day. But as interest grows, it can become difficult to unravel fact from fiction in an economy that is still largely misunderstood. In fact, even crypto-economy investment “experts” sometimes seem overwhelmed.

For Coinbase, the rise of false information published in the press or on social media is a growing and dangerous issue. While intentions are not always negative, the fact remains that everyone seems to have their own opinion on the subject — opinions that people don’t hesitate to share, regardless of the potential impact of false information.

On the basis of these somewhat noble intentions, Coinbase is planning to create its own media arm. In a blog post, the firm outlines three potential courses of action: let it happen, fight it or “publish the truth.”

For CEO Brian Armstrong, the latter option offers a middle ground, which involves establishing a direct relationship with the public. As a result, the American company plans to use a “fact-checking” approach to show its transparency, even if that means sharing negative facts about the company.

Creating stories

Taking his point further, Brian Armstrong encourages all companies to become media companies in response to the proliferation of fake news.

For its part, Coinbase will launch a section of its blog called “Fact Check” to fight misinformation about the company, but also about cryptocurrencies in general. In the future, Coinbase also hopes to create its own original content and move beyond checking facts.

Coinbase is effectively joining a new, broader trend in the US. In fact, content creation by tech brands is growing at a rapid pace, as companies create their own communication channels.

Their goal is to drive investment and create stories around their brand. To do this, many companies are hiring content editors and writers to help them create these stories.

But reactions are mixed. While some appreciate the project, others fear that it could lead to a kind of information war, in which answers can never actually be found, or, at least, never with 100 per cent certainty.

And in the cryptocurrency world — where every influencer is above all out to line their pockets — trust still doesn’t come easily, perhaps especially for a company whose core business relies on cryptocurrency exchange and investment. — ETX Studio

Source: Malay Mail

Global economic recovery needs green focus, South Korea summit agrees

South Korean President Moon Jae-in has proposed a 'Green New Deal' aimed at helping his country bounce back from the pandemic while eventually reaching the goal of zero emissions by 2050.— Lee Jin-man/Pool pic via Reuters

SEOUL, June 1 — Top officials from 38 countries agreed yesterday that efforts to rebuild economies from the Covid-19 pandemic should be guided by green principles and seek to reduce global greenhouse emissions.

The delegates, who included some heads of government and representatives of the United States, China and other major economies, adopted a declaration at the end of the 2021 Partnering for Green Growth and the Global Goals 2030, or P4G.

The gathering was hosted by South Korea for two days, mostly online amid the coronavirus pandemic.

“We reaffirm the fight against Covid-19 leaves important lessons for the global response to the climate crisis and believe that the pandemic should be overcome through green recovery as a progressive strategy,” the declaration said.

The participants, including several international organisations, said they would promote public-private partnerships to battle climate change and support sustainable growth.

The document also said a green recovery may also be a turning point in efforts to achieve the goals of the Paris Climate Accord as well as the Sustainable Development Goals, which were adopted by the United Nations in 2015.

South Korean President Moon Jae-in has proposed a “Green New Deal” aimed at helping his country bounce back from the pandemic while eventually reaching the goal of zero emissions by 2050.

In remarks to the forum on Sunday, Moon said that South Korea will raise its goal for reducing greenhouse gas emissions and create a US$5 million fund under the Green New Deal to help speed up developing countries’ transitions to renewable energy.

In the declaration, participants agreed to strengthen international cooperation to promote a transition to renewable energy such as solar and wind, phase out existing coal-fired power plants and halt public financing for overseas construction of such plants, and promote the use of clean hydrogen. — Reuters

Source: Malay Mail

AtOneGoFinancial Blog

01 June 2021

Asia’s factories sustain expansion, supply chain woes cloud outlook

Asian stocks at month high ahead of US jobs data, gold rises

Japan finance minister: Don’t expect specific tax rates to be debated at G7

Dollar in doldrums as traders ponder Fed policy path; sterling soars

Ringgit opens higher against US dollar

Pemerkasa+ stimulus package lifts Bursa Malaysia higher at opening

Australia’s Nine Entertainment signs content deal with Facebook, Google

Coinbase wants to start its own ‘media arm’ to fight crypto misinformation

Global economic recovery needs green focus, South Korea summit agrees

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