BERNAMA – The ringgit sustained its upward momentum against the US dollar at this morning’s opening, breaching the MYR4.14 level for the first time since November 2021, according to an economist.
This was driven by stronger-than-expected local economic data, a recent United States (US) interest rate cut, and concerns over the US economic outlook.
At 8am, the ringgit traded at 4.1490/1600 against the dollar, compared to Tuesday’s close of 4.1550/1605.
Bank Muamalat Malaysia Bhd Chief Economist Dr Mohd Afzanizam Abdul Rashid said the US Conference Board Consumer Confidence Index declined more than expected to 98.7 points, suggesting that consumers, who form two-thirds of the US economy, are wary of the future outlook.
“The US Dollar Index (DXY) fell as a result by 0.49 per cent to 100.360 points.
“As such, the ringgit should remain positive in light of further interest rate cuts in the US,” he told Bernama.
The ringgit weakened against a basket of major currencies.
It fell against the euro to 4.6427/6550 from 4.6274/6335 at Tuesday’s close, depreciated against the British pound to 5.5704/5852 from 5.5590/5663, and weakened vis-à-vis the Japanese yen to 2.9002/9083 from 2.8796/8836.
It also traded mixed against ASEAN currencies.
The ringgit strengthened versus the Indonesian rupiah to 273.1/274.0 from 273.5/274.0 and rose against the Philippine peso to 7.37/7.40 from 7.39/7.40 at Tuesday’s close.
However, it fell against the Singapore dollar to 3.2348/2437 from 3.2244/2289 and slipped to 12.7184/7607 from 12.6426/6640 against the Thai baht.
The Suralaya coal power plant looms in the background in Cilegon, Indonesia. PHOTO: AP
JAKARTA (XINHUA) – Indonesia through its Ministry of Energy and Mineral Resources said yesterday that it is currently seeking investors to develop a clean coal downstream industry to meet its decarboni-sation target.
The ministry’s Head of the Center for Mineral and Coal Testing Yose Rizal said in a statement that the government is still conducting a study process about clean coal, particularly through coal liquefaction, to ensure that coal, the mineral commodity that produces a lot of emissions, could be processed to have added value while reducing its emission gas.
“The problem is that we are still struggling with the investment. And we also still wait and see about the prices of clean coal in the market. However, with technology, we can assure that we have the capacity and capability,” Rizal said.
Previously, Indonesian Minister of Energy and Mineral Resources Bahlil Lahadalia said the government continued to support coal as one of the country’s main commodities.
He said the government had tried to attract partners, including China, to develop and help create added value for Indonesia’s coal in the form of derivative products, such as coal liquefaction.
The Suralaya coal power plant looms in the background in Cilegon, Indonesia. PHOTO: AP
Samsung workers shout slogans during a protest near their plant in Sriperumbudur, on the outskirts of Chennai, India. PHOTO: AP
NEW DELHI (AP) – A strike by more than 1,000 workers at a Samsung India Electronics plant has entered its third week, and management is at an impasse over their demands for recognition of the employees’ union and higher pay, a workers union spokesman said yesterday.
The employees strike in the plant near Chennai, the capital of the southern state of Tamil Nadu, started on September 9 with a key demand for a 25-30 per cent pay hike in the average monthly salary of INR30,000-INR35,000 (USD425), said spokesman for the Samsung India Electronics workers union KC Gopi Kumar.
“Our foremost demand is recognition of the union and its rights by the management,” Kumar said.
A Samsung official said that management was prepared to discuss the workers’ demands.
The official, who spoke on condition of anonymity because he wasn’t authorised to talk to reporters, said the company wanted to negotiate directly with the employees’ representatives rather than through the Center of Indian Trade Unions, or CITU.
Samsung said that it paid 1.8 times more in India than the average salary of similar workers employed at other regional companies.
The workers’ union said that up to 70 per cent of production has been disrupted at the Sriperumbudur facility in southern India, which produces televisions, refrigerators and washing machines.
However, the Samsung official said that after an initial disruption of 50 per cent production, the plant was running at near average capacity with non-striking workers, apprentices and newly hired staff on the job.
The electronics company appealed to striking workers to resume their jobs.
In a communication with the workers, Samsung assured them that it wouldn’t take action against those employees who wished to resume work, but warned them of termination if they continued with their protest, the Press Trust of India news agency reported.
Samsung workers shout slogans during a protest near their plant in Sriperumbudur, on the outskirts of Chennai, India. PHOTO: AP
Thailand's new Prime Minister Paetongtarn Shinawatra delivers her government policy statement to Parliament in Bangkok, Thailand.
PHOTO: XINHUA
BANGKOK (XINHUA) – Thailand’s government launched its cash stimulus scheme worth THB145.5 billion (about USD4.45 billion) yesterday, aiming to boost economic activity among underprivileged groups across the Southeast Asian country.
This initial phase of the programme will distribute THB10,000 (about USD305) each to state welfare card holders and individuals with disabilities as part of the government’s broader plan to revitalise the kingdom’s sluggish economy, said Thai Prime Minister Paetongtarn Shinawatra. Around 14.55 million Thais will receive the payout directly to their bank accounts by the end of this month, creating the first major “economic whirlwind” as the government reaffirmed its commitment to creating opportunities and improving the livelihoods of low-income earners, Paetongtarn said at the launching ceremony.
She said the cash handout comes without spending conditions, allowing recipients to use the funds as needed, whether for daily expenses or small business investments.
Thailand’s new Prime Minister Paetongtarn Shinawatra delivers her government policy statement to Parliament in Bangkok, Thailand. PHOTO: XINHUA
SEOUL (XINHUA) – South Korea’s consumer sentiment worsened for the second consecutive month due to rising worry about a delayed recovery in domestic demand, central bank data showed yesterday.
The composite consumer sentiment index (CCSI), which gauges the sentiment of consumers over the economic situation, fell 0.8 points over the month to 100.0 in September after going down 2.8 points in the previous month, according to the Bank of Korea (BOK).
The sub-index for consumption expenditure outlook slipped 0.3 points, while indices for the current economic situation and economic outlook lost ground this month.
Inflation expectations, which measure the outlook among consumers over headline inflation for the next 12 months, retreated 0.1 percentage point to 2.8 per cent in September compared to the previous month.
Nepal has been witnessing a rapid rise in the use of electric vehicles in the last few years. PHOTO: THE KATHMANDU POST
KATHMANDU (XINHUA) – Nepal’s import of electric cars surged by over 78 per cent during the first two months of the current 2024-25 fiscal year starting in mid-July, as such vehicles have become popular in the South Asian country, customs data showed.
A total of 1,602 electric cars had been shipped into Nepal by mid-September, a sharp rise from 898 over the same period of 2023-24, and 1,125 of them were from China, according to the figures from the Department of Customs.
Nepal has been witnessing a rapid rise in the use of electric vehicles in the last few years, and a total of 11,701 electric cars were imported in 2023-24, with 8,065 from China, the agency data showed.
Electric vehicles dominated Nepal’s largest auto show held in Kathmandu in late August and early September, and the majority of vehicles booked were electric ones, according to NADA Automobiles Association of Nepal, the organiser of the auto show.
“Lately there has been a surge in the import of electric cars through Rasuwagadhi border crossing from China,” said Information officer at the Rasuwa Customs Office Rabindra Prasad Pyakurel.
“Auto distributors said they are importing the electric vehicles as per the bookings they received during the recent auto expo,” he told Xinhua.
Nepal has been witnessing a rapid rise in the use of electric vehicles in the last few years. PHOTO: THE KATHMANDU POST
HANOVER (AFP) – Volkswagen (VW) bosses and workers’ representatives started crunch talks yesterday about the ailing German auto titan’s drastic cost-cutting plans, with thousands of staff staging a protest and unions vowing “bitter resistance”.
Europe’s biggest carmaker shocked employees early this month when it said it was weighing the unprecedented step of closing factories in Germany as well as deep job cuts.
The move has triggered fury from staff representatives, who accuse VW’s corporate leaders of mismanaging the 10-brand group and putting profits above building a sustainable future for the manufacturer.
The trouble at Volkswagen has come as a heavy blow to Chancellor Olaf Scholz’s government at a time the domestic economy is already struggling.
Ahead of the talks in Hanover, lead negotiator for union IG Metall Thorsten Groeger told assembled workers that it was the first time in decades that management was weighing “site closures and mass redundancies”.
He charged that VW’s management, which had already moved to axe a decades-old job protection agreement, was seeking to scare staff as they attempt to push through cuts.
“Anyone who sows fear and gambles with the future of our colleagues will reap bitter resistance,” vowed Groeger.
“You don’t build the future with fear – you destroy it with fear.”
Anura Kumara Dissanayake waves as he departs the election commission office after winning the Sri Lankan presidential election in Colombo,
Sri Lanka. PHOTO: AP
COLOMBO (AFP) – Sri Lanka’s new leftist leader has little room to renegotiate an International Monetary Fund (IMF) bailout that threw a lifeline to his bankrupt country but imposed punishing and unpopular austerity measures, analysts said.
Anura Kumara Dissanayake, 55, was a vocal critic of global lenders from the fringes of the island nation’s politics, including in the aftermath of Sri Lanka’s unprecedented economic meltdown two years ago.
He won Saturday’s presidential vote in a landslide promising to reverse steep tax hikes, raise public servant salaries and renegotiate the IMF fund rescue package secured by his predecessor.
But after his inauguration two days later he appealed for international support to revive Sri Lanka’s economy, admitting he had no magic solution to its woes.
“There are certain red lines that the IMF will not agree to negotiate,” Murtaza Jafferjee of the Colombo-based economic think tank Advocata told AFP.
He said the Washington-based lender of last resort would be very unlikely to budge on core components of its USD2.9 billion bailout, including a ban on printing money and revenue and spending targets agreed by the last administration.
Anura Kumara Dissanayake waves as he departs the election commission office after winning the Sri Lankan presidential election in Colombo, Sri Lanka. PHOTO: AP
Dissanayake’s party, the People’s Liberation Front (JVP), sports the hammer and sickle motif of the international communist movement on its logo.
The JVP was confined to the political wilderness for decades after leading rebellions in the 1970s and 1980s that left more than 80,000 people dead, before the party renounced violence.
Months of food, fuel and medicine shortages that accompanied the 2022 financial crisis and foreign debt default rallied the public behind it.
Dissanayake’s call to upend the island’s “corrupt” politics resonated with a public infuriated by chronic economic mismanagement and graft scandals in government ranks.
As the size of his victory became clear, his party moved quickly to assure markets and creditors that it would adhere to the broad strokes of the bailout deal.
“We will not tear up the IMF programme,” JVP politburo member Bimal Ratnayake said. “It is a binding document, but there is a provision to renegotiate.”
The ironic outcome of the pledge was that the same day as an avowed Marxist assumed the presidency, Colombo’s stock exchange rallied by 1.5 per cent.
But by committing to maintain the rescue plan, Jafferjee said that any tweaks pushed by Dissanayake would necessarily be minor.
“On the fiscal side, there is not much adjustment that can be done,” he said.
Dissanayake’s predecessor, Ranil Wickremesinghe, was voted out of office after doubling income taxes and imposing other reviled austerity measures. His policies ended the shortages as well as runaway inflation and returned the country to growth but left millions struggling to make ends meet.
The IMF said Wickremesinghe’s administration had made a great deal of progress in repairing the nation’s ruined finances after a USD46 billion foreign debt default two years ago.
But spokesperson Julie Kozack also warned ahead of the presidential poll that Sri Lanka was “not out of the woods yet”.
One of Dissanayake’s first acts of business will be to secure a parliamentary endorsement for a debt restructuring deal with international bondholders, negotiated by his predecessor at the 11th hour and announced last week.
That will have to wait for the election of a new Parliament, as Dissanayake sought to capitalise on his landslide win by calling snap polls on Tuesday, the day after he was sworn in.
An economics lecturer at the University of Colombo Umesh Moramudali,, warned that failing to secure the deal’s passage could open Sri Lanka to legal action from its creditors.
“It would be in the best interest of the country to avoid litigation with bondholders,” he told AFP.
PARIS (AFP) – The Organisation for Economic Co-operation and Development (OECD) slightly raised its world economic growth forecast for 2024 yesterday but called for higher property and environmental taxes to combat soaring debt in many countries.
In its economic oulook report titled Turning the Corner, the Paris-based organisation said global gross domestic product would expand by 3.2 per cent, compared to 3.1 per cent in its previous forecast.
“Global output growth has remained resilient and inflation has continued to moderate,” the OECD and Development said in the twice-yearly report.
Central banks in the United States (US) and Europe have started to cut interest rates as inflation, which soared after the COVID pandemic and Russia’s invasion of Ukraine, is finally cooling.
The OECD cited “relatively robust” growth in the US, Brazil, Britain, India and Indonesia. It raised Russia’s GDP growth forecast by 1.1 percentage points to 3.7 per cent.
But the OECD slightly lowered the outlook for Germany, Europe’s biggest economy, to 0.1 per cent growth and said Japan’s GDP would shrink by 0.1 per cent. Argentina’s economy would have a deeper contraction of four per cent.
The Tokyo Stock Exchange building in Tokyo, Japan. PHOTO: AP
AP – A China-led rally faded yesterday, leaving Asian shares mixed after a strong start that extended gains overnight on Wall Street.
Chinese property developers surged after Beijing announced a flurry of measures the day before aimed at reviving the housing market after a prolonged downturn.
That news also boosted prices for oil, copper and other commodities.
However, the cheer brought on by news of a coordinated effort to rev up growth in the world’s second-largest economy appeared to dissipate as the day wore on. United States (US) futures and oil prices also fell back.
Hong Kong’s Hang Seng index was up 0.7 per cent at 19,133.15 after jumping 1.8 per cent earlier in the day and gaining more than four per cent the day before. The Shanghai Composite index was 1.2 per cent higher at 2,896.31.
“Chinese policymakers are throwing everything they’ve got to fight off deflation and breathe life into growth. Will it work long-term? Who knows,” Stephen Innes of SPI Asset Management said in a commentary.
In Tokyo, the Nikkei 225 shed 0.2 per cent to 37,870.26, while South Korea’s Kospi sank 1.3 per cent to 2,596.32.
Australia’s S&P/ASX 200 slipped 0.2 per cent to 8,126.40.
The Tokyo Stock Exchange building in Tokyo, Japan. PHOTO: AP
On Tuesday, US stocks drifted to more records, with the S&P 500 closing 0.3 per cent higher at 5,732.93, the 41st all-time high for this year. Gains were tentative, though, and the index wavered up and down following a surprisingly weak report on US consumer confidence.
The Dow Jones Industrial Average added 0.2 per cent to its own record set the day before, closing at 42,208.22. The Nasdaq composite gained 0.6 per cent to 18,074.52.
The Federal Reserve’s (Fed) drastic turn last week in how it sets interest rate has buoyed markets. It’s now lowering rates to ease pressure on the US economy after keeping them high for years in hopes of extinguishing high inflation.
Inflation has eased substantially from its peak two summers ago and the main worry occupying investors is that a slowdown in hiring by US companies may worsen.
Moves to interest rates can take a notoriously long time to work their way fully through the economy, and the Fed kept its main interest rate at a two-decade high for more than a year before last week. It did cut by an unusually large amount in hopes of providing relief to the job market and economy.
A report released on Tuesday showed US households are feeling more worried about the job market. Their overall confidence level sank in September, according to the Conference Board, instead of rising like economists expected.
That’s a big deal because spending by US consumers is the heart of the US economy.
One of Wall Street’s bigger winners was Smartsheet, which helps companies manage projects and automate workflows.
It rose 6.5 per cent after Blackstone and Vista Equity Partners agreed to buy it in an all-cash deal valued at USD8.4 billion. In the bond market, Treasury yields slipped following the weaker-than-expected report on consumer confidence. The 10-year yield fell to 3.73 per cent, from 3.75 per cent late Monday. The two-year yield, which more closely tracks expectations for the Fed’s upcoming moves, fell to 3.53 per cent from 3.59 per cent late Monday.
Lower interest rates can give the economy a boost by making it less expensive to borrow money to buy a car, house or things on credit cards. They also tend to raise prices for all kinds of investments.
Nvidia’s jump of four per cent was the strongest force lifting the S&P 500 index on Tuesday.
The chip company’s stock had sunk 27 per cent during the summer on worries that its price had shot too high in the frenzy around artificial-intelligence technology. But lower rates dampen that criticism by a bit, and Nvidia has been rallying back since early August.
In early yesterday trading, US benchmark crude oil was down 38 cents at USD71.19 per barrel. Brent crude, the international standard, lost 29 cents to USD74.17 per barrel.
The dollar rose to JPY143.61 from JPY143.23. The euro climbed to USD1.1192 from USD1.1180.
