Global shares rise as investors watch trade war

A view of the financial area of London. Last week, many stock indexes around the world struck their lowest levels this year, before a late rally suggested some calm was returning to the markets. (AFP)
Updated 20 August 2019

Global shares rise as investors watch trade war

  • Worries about waning growth across the world weigh heavily on market activities

LONDON: Global stock markets recovered some further ground Monday after last week’s turbulence when ongoing concerns about a trade war between the US and China and an array of worries about waning growth across the world weighed heavily on sentiment.

Last week, many stock indexes around the world struck their lowest levels this year, before a late rally suggested some calm was returning to the markets in what is a traditionally low-volume time of the year. Though stocks are healthier, the concerns that drove last week’s sell-off have not gone away and could resurface at any time.
“Markets actually ended last week on a relatively good note so what we may actually be witnessing right now is traders relishing the blissful trade war silence rather than anything more optimistic,” said Craig Erlam, senior market analyst at OANDA.
In Europe, France’s CAC 40 and Britain’s FTSE 100 were both up more than 1.2 percent, while Germany’s DAX rose 1.5 percent. US shares were set to open higher with Dow and S&P 500 futures both up 1.2 percent.
The steadier mood was evident in the fact that markets appeared to shrug off a report showing that one-third of economists surveyed by the National Association for Business Economics said they believe a slowing US economy will tip into recession in 2021. That’s up from 25 percent in the equivalent survey taken in February.
Trump spent a good portion of the last week tweeting about the US economy from his New Jersey golf club, trying to allay concerns of recession and offering an optimistic outlook for the economy after last week’s steep drop in the financial markets.
“I don’t think we’re having a recession,” Trump told reporters Sunday as he returned to Washington from his New Jersey golf club.
The president’s aides sought to reinforce that message during a series of appearances on the Sunday talk shows.
Investors are hoping that the US Federal Reserve will continue to cut interest rates to shore up economic growth. The central bank lowered interest rates by a quarter-point at its last meeting. It was the first time it lowered rates in a decade.
As well as keeping a close watch on developments surrounding the Fed, investors have to be careful not to be caught out by any news relating to the trade conflict between Washington and Beijing. That’s especially true after Trump’s announcement on Aug. 1 that he planned to extend tariffs across virtually all Chinese imports, many of them consumer products that were exempt from early rounds of tariffs. The tariffs have been delayed, but ultimately will raise costs for US companies bringing goods in from China.


Saudi-led group reinstated as builder of Bulgaria gas pipeline

Updated 16 September 2019

Saudi-led group reinstated as builder of Bulgaria gas pipeline

  • Bulgaria’s Supreme Administrative Court announced that the Saudi-led group’s main competitors for the project had dropped a legal challenge relating to the award
  • Bulgaria’s state gas operator Bulgartransgaz had initially chosen the Saudi-led group — made up of Saudi Arabia’s Arkad Engineering and a joint venture including Switzerland’s ABB

SOFIA: A Saudi-led consortium was definitively reinstated on Monday as the builder of a new gas pipeline through Bulgaria, intended to hook up to Gazprom’s TurkStream project.
Bulgaria’s Supreme Administrative Court announced Monday that the Saudi-led group’s main competitors for the project had dropped a legal challenge relating to the award.
The latest development brings to an end a long-running tussle between the Saudi-led consortium and its competitors for the project, a consortium of Luxembourg-based Completions Development, Italy’s Bonatti and Germany’s Max Streicher.
Bulgaria’s state gas operator Bulgartransgaz had initially chosen the Saudi-led group — made up of Saudi Arabia’s Arkad Engineering and a joint venture including Switzerland’s ABB — to build the 474-kilometer (294-mile) pipeline.
But Bulgartransgaz later decided to strike the winner off the tender for failing to supply documents needed to sign off the contract.
Instead it accepted the offer of the second-placed consortium led by Completions Development.
However, Bulgaria’s competition watchdog ruled in July that the operator should honor its previous commitments and sign a contract with the Saudi-led group.
The watchdog’s verdict was subject to a final appeal in the courts but the Supreme Administrative Court announced Monday that the appeal had been withdrawn, meaning that the Arkad-led group has now been definitively reinstated.
Bulgartransgaz is in a hurry to complete the pipeline as soon as possible in a bid to enable Russian gas giant Gazprom to hook it up to its TurkStream pipeline after it becomes operational at the end of this year.
Bulgaria, which is heavily dependent on Russian gas for its domestic needs, has been repeatedly criticized by both the EU and the United States for failing to diversify both its gas sources and its delivery routes.
The Balkan country hopes to start receiving Caspian Sea gas from Azerbaijan’s Shah Deniz field as well as liquefied natural gas from various sources via terminals in Greece through a 182-kilometer (113-mile) interconnector expected to be ready by the end of 2020.