Ringgit opens higher vs USD on weaker US economic data

Business

February 7, 2025

BERNAMA – The Malaysian ringgit opened stronger against the United States (US) dollar after the US reported weaker economic data, suggesting that the case for rate cuts by the US Federal Reserve (Fed) and the prospects for a reduction in the Fed Fund Rate remain intact, an analyst said.

At 8am, the ringgit strengthened to 4.4150/4300 against the greenback compared to Wednesday’s close of 4.4200/4260.

“The ringgit could test MYR4.40 level today in light of improved market conditions,” Bank Muamalat Malaysia Bhd Chief Economist Dr Mohd Afzanizam Abdul Rashid told BERNAMA yesterday.

He noted that the US Dollar Index (DXY) slipped 0.31 per cent to 107.62 points as business sentiment in the service sector softened last month.

“At the same time, the two- and 10-year US Treasury yields fell by 3.0 and 9.0 basis points to 4.19 per cent and 4.42 per cent, respectively, suggesting that prospects for a reduction in the Fed Fund Rate remain intact,” he said.

He added that the Institute for Supply Management (ISM) Index for the non-manufacturing sector stood at 52.8 points in January, which is lower than consensus estimates of 54.2 points, bolstering the case for rate cuts by the Fed during this year.

“The sub-index such as Prices and New Orders also suggests lower inflation prospects along with moderation in economic activities,” he said.

He also noted that the one-month delay in tariff hikes for Canada and Mexico also helped temper fears of an abrupt price increase.

Meanwhile, the ringgit was traded mostly higher against other major currencies.

It appreciated against the euro to 4.5912/6068 from 4.5990/6053 at Wednesday’s close and rose vis-a-vis the British pound to 5.5196/5384 from 5.5321/5396 yesterday, but eased against the Japanese yen to 2.8941/9042 from 2.8930/8972 previously.

The Malaysian note was also higher versus ASEAN currencies.

It inched up against the Singapore dollar to 3.2738/2854 from 3.2746/2792 at yesterday’s close and advanced against the Thai baht to 13.1461/2038 from 13.1602/1844 previously.

The ringgit strengthened against the Indonesian rupiah to 270.9/272.0 from 271.2/271.8 at Wednesday’s close and ticked up against the Philippines’ peso to 7.60/7.64 from 7.61/7.63 previously.

Bank of England expected to cut interest rates despite inflation

Business

February 7, 2025

AFP – The Bank of England (BoE) was widely expected to cut its key interest rate yesterday to help support weak British growth even if United Kingdom (UK) inflation stays elevated.

At its first rate meeting of the year, the BoE is forecast to reduce borrowing costs by a quarter point to 4.50 per cent according to analysts’ consensus forecast.

“The BoE is likely to justify the move, even though inflation remains above (bank) target, due to a sluggish economy and a softening in the labour market in recent months,” said Research Director at XTB trading group Kathleen Brooks.

The central bank will also provide its latest growth and inflation forecasts, which could be altered amid United States (US) President Donald Trump’s tariff war.

Trump has stated that Britain might not escape levies on its exports to the US, having already imposed tariffs on imports and threatened similar action against the European Union.

The Bank of England in London, United Kingdom. PHOTO: AP

However, he has delayed measures against Mexico and Canada pending talks.

There is widespread concern that such tariffs will cause a renewed spike in inflation that risks hikes to interest rates.

The US Federal Reserve last week left US borrowing costs unchanged but the European Central Bank cut eurozone rates.

Should the BoE reduce its rate, aiding mortgage holders but hurting savers as retail banks in turn pass on similar cuts to customers, it will be the central bank’s third reduction in six months. The BoE cut in August for the first time since early 2020, from a 16-year high of 5.25 per cent after UK inflation fell sharply.

It cut further in November.

Britain’s annual inflation rate fell to 2.5 per cent in December but remains above the BoE target of 2.0 per cent.

Britain’s economic growth has meanwhile stalled, heaping pressure on the country’s Labour government which won power in July thanks in part to its pledge to drive output.

Major central banks last year began to cut interest rates that had been hiked in efforts to tame inflation.

UK inflation had soared to above 11 per cent in October 2022, the highest level in more than four decades.

Companies faced supply constraints also as they struggled to return to the pre-COVID rhythm of working.

Vietnam targets USD11B in seafood exports

Business

February 7, 2025

ANN/VIETNAM NEWS – Vietnam’s seafood export sector is poised for significant growth in 2025, targeting an ambitious export value of USD11 billion.

The ambitious goal underscores the sector’s resilience and strong potential, despite navigating a highly competitive global market.

Vietnam has strong potential to boost seafood exports to key markets such as the United States (US), China, ASEAN countries and the Middle East. These regions are seen as vital to achieving the sector’s export targets.

In January 2025, Vietnam’s seafood exports surpassed USD400 million, a remarkable 29 per cent increase compared to the same period in the previous year.

The strong start to the year’s exports provides a positive outlook and sets a solid foundation for continued growth throughout 2025.

File photo shows workers processing export shrimp in Vietnam. PHOTO: VIETNAM NEWS

To meet this year’s target, Vietnam’s fishery industry is focusing on enhancing quality and efficiency rather than expanding farming areas.

Key strategies include improving deep processing to extend the value chain and leveraging by-products from aquatic raw materials.

The approach not only promises to boost the value of seafood products but also helps mitigate the environmental impacts of fishing and farming practices.

The country’s fishery sector still has significant room for growth, according to Deputy Minister of Agriculture and Rural Development Phung Duc Tien.

Diversification of farmed species – such as eel, tilapia, seaweed and molluscs – will be a critical component of the sector’s export strategy.

Additionally, Vietnam plans to make more efficient use of its water systems, particularly reservoirs and river systems, while re-organising production through cooperatives and farming chains.

In 2025, the industry will also concentrate on improving the quality of aquatic breeds and ensuring strict control over antibiotic use in aquaculture. According to Deputy Director of the Department of Quality, Processing, and Market Development Le Thanh Hoa, these measures are necessary for long-term sustainability and competitiveness.

Director of the Department of Fisheries Tran Dinh Luan emphasised that since the end of 2024, Vietnam’s seafood sector has seen a recovery in export markets, so companies have taken proactive steps to maximise production efficiency.

This includes ensuring a steady supply of raw materials for export, such as tuna, squid and octopus – major high-value products.

In 2024, total shrimp exports reached an estimated USD3.9 billion, marking a 15-per-cent increase from the previous year.

The success is largely attributed to the development of value-added shrimp products, including whiteleg shrimp and black tiger shrimp.

Vietnam’s pangasius export market has also shown impressive growth, especially in value-added products such as frozen fillets, pangasius skewers, skin snacks and pangasius balls.

These products have fuelled Vietnam’s seafood export growth to the US.

Despite facing trade defence measures, the US remains one of the most important markets for Vietnamese seafood, particularly for shrimp and pangasius, also known as tra fish.

However, rising costs for feed, fuel and transportation are increasing production expenses, which could undermine the competitiveness of Vietnamese seafood in the global market, according to the Vietnam Association of Seafood Exporters and Producers.

Vietnam is currently the world’s third largest seafood exporter, behind China and Norway.

Most Asian stocks track Wall Street gains, USPS rethink provides boost

Business

February 7, 2025

AFP – Asian markets rose yesterday, tracking gains on Wall Street and following the US Postal Service’s (USPS) U-turn on a ban, though trade war fears continue to dampen sentiment.

Global equities have been hit by volatility this week after US President Donald Trump announced hefty tariffs on Canada and Mexico.

That was followed on Tuesday by news the USPS had scrapped a duty-free exemption for low-value packages from China and Hong Kong.

But it rowed back on Wednesday, saying it would “continue accepting all international inbound mail and packages”.

The news provided traders with some positive mood music to start the day.

A person looks at an electronic stock board at a securities firm in Tokyo, Japan. PHOTO: AP

Markets in most of Asia were on the rise, with Hong Kong, Shanghai, Seoul and Sydney up more than one per cent.

Tokyo, Singapore and Taipei also rose, though Manila, Mumbai, Bangkok and Jakarta slipped.

However, investors remained on edge about the economic outlook as Trump appeared set to resume the hardball approach to trade and diplomacy seen in his first term.

“Trade War 2.0 is different in terms of coverage as this time round it involves major trading partners of the US,” said OANDA Senior Market Analyst Kelvin Wong. “Hence, countries that have a significant trade surplus with the US will be at risk of being targeted by Trump’s trade tariffs policy; the European Union, Japan, South Korea, and ASEAN export-dependent countries such as Vietnam and Malaysia.

“If trade negotiations are not able to reach the ‘middle ground’ between the US and the targeted countries, tit-for-tat retaliation measures may escalate.”

Ongoing uncertainty about the outlook helped safe-haven gold to a new high above USD2,882.

Disappointing earnings from Google-parent Alphabet weighed on the tech sector, which was already feeling the pinch after DeepSeek released a chatbot it said rivalled those of US tech giants but at a fraction of the cost.

Alphabet tanked more than seven per cent in New York, while Amazon was off more than two per cent. In currency markets, the yen built on its recent gains against the dollar fuelled by expectations the Bank of Japan will continue hiking interest rates as inflation remains elevated.

After raising borrowing costs last month, officials hinted at more tightening down the line, and yesterday top policy board member Naoki Tamura said rates should go up to one per cent the end of the year, from their current 0.5 per cent.

Shipping giant Maersk’s profit soars on higher freight prices

Business

February 7, 2025

AFP – Danish shipping giant Maersk reported a big jump in its annual net profit yesterday, propelled by freight prices that shot up.

The group posted strong earnings despite having to take longer routes around southern Africa to avoid the key Red Sea shipping lane.

It posted a net profit of USD6.1 billion for 2024, up 60 per cent from the previous year.

The company said in its annual report that 2024 was the “third-best year in Maersk’s history”.

Maersk had “anticipated a challenging year” in 2024, Chairman Robert Maersk Uggla and Chief Executive Vincent Clerc said in a joint statement.

Maersk and other shipping containers on a ship at the Port of Los Angeles in California, United States. PHOTO: AFP

The attacks caused “unacceptable safety risks for crew and cargo along a critical trade route. Initially uncertain in duration, the crisis persisted throughout the year, underlining the vulnerabilities of global supply chains”, they said. “Increased freight rates driven by the situation in the Red Sea, combined with our ability to capitalise on higher-than-expected demand, strong operational execution and cost discipline, led us to repeatedly raise expectations throughout the year,” the statement said.

The group ultimately delivered “results significantly above initial guidance”.

Maersk expects to resume Red Sea traffic between the middle and the end of this year.

Its 2024 profit before depreciation, amortisation and impairment losses reached USD12.1 billion.

Revenue rose eight per cent to USD55.5 billion – higher than the USD54.8 billion forecast by analysts surveyed by Bloomberg.

The global container market “went through a robust recovery” last year, estimated at seven per cent, Maersk said.

“Export growth out of China was the ultimate growth driver in 2024,” it said.

The Chinese share of global exports is estimated to have increased to 36 per cent last year, compared to 32 per cent before the COVID pandemic in 2019, while those of Europe and North America have declined, the company said.

“The reason for this development is overcapacity in the Chinese manufacturing sector,” Maersk said.

Maersk said it expects an underlying profit of between USD6 billion and USD9 billion for 2025.

Vietnam rubber exports to Malaysia increase fivefold

Business

February 7, 2025

ANN/VIETNAM NEWS – Vietnam’s rubber exports to Malaysia surged dramatically in 2024, reaching 38,442 tonnes valued at USD56.16 million.

This represents an increase of 433.5 per cent in volume (more than four times) and 515.7 per cent in value (more than five times) compared to 2023, according to data from the General Department of Customs, as cited by Vietnam’s Import-Export Department under the Ministry of Industry and Trade.

This is also the highest volume of rubber exported to Malaysia since 2019. As a result, Malaysia has risen to become Vietnam’s fourth-largest rubber export market, accounting for a 1.9 per cent market share. In terms of product type, latex rubber dominated exports to Malaysia, making up 76.5 per cent of the total rubber exports to this market in 2024. The total export volume of latex rubber reached 29,408 tonnes, valued at USD42.3 million. Notably, Malaysia had not imported this type of rubber from Vietnam in 2023.

Malaysia is one of the world’s major rubber producers, with an average annual output of 348,000 tonnes of natural rubber. However, the country also imports rubber to compensate for supply shortages. Vietnam ranked sixth among Malaysia’s rubber suppliers, with export volumes surging 165.7 per cent to 22,930 tonnes. Vietnam’s market share in Malaysia’s total rubber imports rose from one per cent in 2023 to 2.5 per cent in 2024. However, this remains relatively low compared to Vietnam’s export potential.

Statistics show that Malaysia’s rubber imports have consistently increased over the past five years, rising from one million tonnes in 2020 to 1.22 million tonnes in 2023, with a further 6.9 per cent growth in the first 11 months of 2024.

Meanwhile, Vietnam ranks as the world’s third-largest supplier of natural rubber. The Ministry of Agriculture and Rural Development has set a target to expand rubber plantation areas to between 800,000 and 850,000 hectares by 2030.

ArcelorMittal to build US plant for steel used in electric cars

Business

February 7, 2025

PARIS (AFP) – Steelmaking giant ArcelorMittal said yesterday it would build a new plant in the United States (US) to produce steel used in electric vehicles, as it posted a surge in annual net profit.

The USD900-million investment in Calvert, Alabama, will enable the company to produce 150,000 tonnes per year of material known as non-grain-oriented electrical steel (NOES).

Such steel “plays a crucial role in the performance and efficiency of electric motors used to power battery electric vehicles” and hybrid cars, it said.

“Given the nature of the US auto market (larger vehicles, full-size pickups, SUVs) there is rapidly growing demand for the most sophisticated NOES for which there is limited US domestic supply capabilities,” ArcelorMittal said.

The plant is expected to start production in 2027 and generate an annual underlying profit of USD200 million per year.

The announcement was made in a results statement showing ArcelorMittal’s annual net profit reached USD1.3 billion in 2024, a 45-per-cent jump from the previous year.

The company narrowed its losses in the last three months of last year to USD390 million, compared to a loss of almost USD3 billion in the fourth quarter of 2023.

Leverkusen back from brink to reach German Cup semi-finals

Sports

February 7, 2025

LEVERKUSEN (AFP) – Victor Boniface scored an extra-time winner as defending champions Bayer Leverkusen came back from two goals down to win 3-2 against derby rivals Cologne in the German Cup quarter-finals on Wednesday.

Leverkusen were expected to cruise against their second-division opponents, but found themselves two down early in the second half as Damion Downs and Linton Maina scored either side of half-time.

Staring at a first loss in the competition since July 2022, Florian Wirtz assisted Patrik Schick to kick start a comeback effort with 30 minutes remaining.

Schick then sent the game to extra-time with a header in the seventh minute of stoppage time.

Boniface, playing alongside fellow striker Schick for the first time this season, latched onto an Alex Grimaldo cross to put his side on track for victory.

Bayer Leverkusen’s players celebrate their win against FC Cologne after the end of the German Cup at the BayArena in Leverkusen, Germany. PHOTO: AP

Bayer Leverkusen’s Nigerian forward Victor Boniface reacts as FC Cologne’s German goalkeeper Marvin Schwaebe concedes the 2-2 goal during the German Cup (DFB Pokal) quarter-final football match Bayer 04 Leverkusen vs FC Cologne in Leverkusen, western Germany. PHOTO: AFP

Bayer Leverkusen’s Czech forward Patrik Schick celebrates after scoring the 1-2 goal with his teammates. PHOTO: AP

Cologne looked to have sent the match to penalties when Imad Rondic scored in the 113th minute, but his goal was overturned on VAR review for a narrow offside.

“It was a very hard game against an opponent who did very well, but we showed a good reaction,” Leverkusen coach Xabi Alonso told reporters.

“It might not have been our best game but we showed heart and belief. We fought until the last minute, with patience and kept our structure. We’re happy.”

Cologne were relegated from the top division last campaign but have rebounded in the Bundesliga 2 and sit top with more than half of the season played.

With a pyrotechnics display from the visiting fans resulting in 10 minutes of first-half stoppage time, Downs took advantage of some sloppy Leverkusen defence to blast into the bottom left corner seconds before the break.

Early in the second half, Downs found Maina in acres of space and the winger rounded goalkeeper Matej Kovar to double Cologne’s lead. On the 61st-minute mark, Wirtz found Schick who nutmegged the goalkeeper to cut Cologne’s lead, the ninth time the German has assisted the Czech in all competitions this season.

Leverkusen’s remarkable run in the 2023-24 season featured 18 goals after the 90th-minute mark in all competitions and the German champions again left it late, Schick heading in a cross in the final minute of stoppage time.

With Cologne reeling, Boniface, who was cleared for a move to Saudi Arabia in January before a last-minute U-turn, was first to a Grimaldo cross to put Leverkusen in the lead.

Cologne rallied but a late equaliser was ruled out by VAR for the narrowest of offsides.

The win means Leverkusen, who put out Bayern Munich in the last round, join Stuttgart, who beat Augsburg 1-0 on Tuesday, in the semi-finals.

Later in February, two-time winners RB Leipzig host 2015 winners Wolfsburg while Werder Bremen, who have lifted the trophy on six occasions, play at home against third-division Arminia Bielefeld.

Workday lays off 1,750 employees

Business

February 7, 2025

AP – Workday is cutting about 1,750 jobs, or 8.5 per cent of its workforce.

In a Wednesday memo to employees, published in a securities filing, Workday Chief Executive Officer Carl Eschenbach said the layoffs were necessary for ongoing growth efforts at the company – including a particular focus on artificial intelligence (AI) investments.

“As we start our new fiscal year, we’re at a pivotal moment,” Eschenbach wrote.

“Companies everywhere are reimagining how work gets done, and the increasing demand for AI has the potential to drive a new era of growth for Workday.”

Workday aims to notify the majority of employees affected by the cuts on Wednesday.

“I realise this is tough news, and it affects all of us,” Eschenbach added – encouraging employees to work from or head home for the day.

The maker of human resources software also disclosed that it expects to exit certain office space, but didn’t specify a timeline or which locations may be impacted.

Still, Eschenbach’s memo notes that the restructuring will work to expand Workday’s global reach by “investing in strategic locations”.

And despite the current layoffs, the maker of human resources software says that it still expects to continue hiring in certain locations and positions over the next year.

Workday estimates that it will incur between USD230 million and USD270 million in charges related to the restructuring plan – primarily in severance payments, employee benefits and other related costs. All employees laid off in the United States (US) will be offered a minimum of 12 weeks of pay, with additional weeks based on tenure, Eschenbach said, adding that affected workers in other countries will be offered packages based on local standards.

The job cuts at Workday arrive as layoffs continue across the tech sector – including from big names like Intel, Cisco and Apple over the past year – amid a broader wave of industry consolidation. Many companies have turned to restructuring as they grapple with how to stay competitive with evolving consumer spending, while also boosting AI-related investments.

Workday plans to release earnings results for its full 2025 fiscal year later this month. In the third quarter, the Pleasanton, California-based company posted a net income of USD193 million and revenue of USD2.16 billion – up from a net income of USD132 million and revenue of USD2.09 billion in the period prior.

Chief Executive Officer of Workday Carl Eschenbach. PHOTO: AP

South Korea posts record current account surplus

Business

February 7, 2025

ANN/THE KOREA HERALD – South Korea’s current account surplus surged to a record high of USD99.04 billion in 2024, a threefold increase from the USD32.82 billion surplus recorded in 2023, according to data released by the Bank of Korea (BOK) yesterday.

The significant surge was driven by robust export performance and increased dividend income.

The 2024 figure marked the second-largest amount ever and surpassed the government’s forecast of a surplus of USD90 billion.

In December alone, the current account surplus amounted to USD12.37 billion, which marked the largest reading for any previous December, and the third-highest monthly figure ever.

The BOK said its adjusted data showed that the country has reported a current account surplus for the 20th consecutive month in December.

In December, the goods account logged a USD10.43 billion surplus, marking the 21st consecutive month of surplus.

The surplus came as exports advanced 6.6 per cent on-year to USD61.38 billion on the robust sales of semiconductors. Imports added 4.2 per cent to USD52.87 billion in the month.

For the entire year of 2024, exports set a new record of USD683.8 billion by rising 8.2 per cent on-year.

People pass by the statue of King Sejong as snow falls at Gwanghwamun Square in Seoul, South Korea. PHOTO: AP

The services account, however, registered a USD2.11 billion deficit in December, following a USD1.95 billion deficit a month earlier.

The deficit was due largely to rising demand for overseas travel during the vacation season, according to the central bank.

The primary income account, which tracks the wages of foreign workers, dividend payments from overseas and interest income, logged a USD4.76 billion surplus in December, compared with the previous month’s USD2.41 billion surplus, the data showed.

“Exports are expected to remain robust, though a high base effect would lead to a slower growth rate technically,” BOK’s head of statistics Shin Seung-cheol told a press briefing.

In its forecast presented in November, the BOK expected South Korea to report a current account surplus of USD80 billion in 2025. The central bank plans to announce a revised outlook later this month.

“Primary risk factors in terms of this year’s current account are the Donald Trump administration’s trade policy and responses from major nations,” Shin noted.

Borneo Bulletin OnlineThe Independent Newspaper in Brunei Darussalam, Sabah and Sarawak

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