Asian stocks hit record high, as earnings, stimulus boost recovery hopes

Asian stocks hit record high, as earnings, stimulus boost recovery hopes
On Wall Street, major stock indexes closed little changed on Tuesday. (File/AFP)
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Updated 10 February 2021

Asian stocks hit record high, as earnings, stimulus boost recovery hopes

Asian stocks hit record high, as earnings, stimulus boost recovery hopes

TOKYO/NEW YORK: Asian stocks hit a record high on Wednesday, as upbeat earnings, hopes of a large US fiscal stimulus and progress in vaccinations fanned optimism about a global recovery from the pandemic.
MSCI’s ex-Japan Asian shares index rose 0.8 percent, rising above its January peak to reach its highest level ever.
In mainland China’s CSI300 rose 1.3 percent to a 13-year high and the Shanghai Composite hit a five-year high on the last trading day before the week-long Lunar New Year holidays.
Japan’s Nikkei eked out gains of 0.1 percent while e-mini futures for the US S&P 500 rose 0.35 percent.
Corporate earnings have been beating expectations in many places including the United States and Japan.
In the latest example, shares of Lyft Inc. rose as much as 11.8 percent while Twitter Inc. climbed 3.5 percent in aftermarket trading on their latest quarterly results.
“Globally investors are raising weightings on stocks as the Biden administration looks set to spend pretty much close $1.9 trillion on its stimulus,” said Norihiro Fujito, chief investment strategist at Mitsubishi UFJ Morgan Stanley Securities.
Although US President Joe Biden’s stimulus package faces opposition from Republicans, his fellow Democrats last week approved a budget outline that will allow them to muscle the stimulus through in the coming weeks without Republican support.
On Wall Street, major stock indexes closed little changed on Tuesday, though the tech-heavy Nasdaq Composite eked out a record high on a gain of 0.14%. The S&P 500 lost 0.11 percent.
The S&P had climbed the previous six sessions and is up 5.3 percent for the month, underpinned by the prospects of the large US relief package.
The yield on the benchmark US 10-year Treasury notes was last at 1.16 percent, not far off Monday’s 10 1/2-month high of 1.20 percent.
Higher bond yields also reflect rising inflation expectations, with break-even inflation calculated from inflation-protected Treasuries rising to 2.20 percent, the highest since 2014.
The Fed has said it would tolerate inflation rising beyond 2 percent temporarily.
US inflation data, due later on Wednesday, is expected to show an annual rise of 1.5 percent in core CPI.
In the currency market, the dollar traded near two-week lows against a basket of currencies after sizable fall in the previous trade.
The dollar traded at 104.55 yen after 0.64 percent fall on Tuesday, its biggest in three months, while the euro changed hands at $1.2119, extending its rebound from a two-month low of $1.1952 touched on Friday.
The British pound held firm at $1.3822, hitting its highest level since April 2018.
The offshore Chinese yuan held firm at 6.4185 to the dollar , within sight of its 2 1/2-year high of 6.4119 set on Jan. 5.
Bitcoin, which gained 19.5 percent on Monday, stood little changed at $46,292, not far off its record high of $48,216 set on Tuesday.
Ethereum, the second-most-popular cryptocurrency, hit a record high of $1,826.
Spot gold added 0.3 percent to $1,842.8 an ounce after rising to a one-week high on Tuesday.
Brent oil held firm at $61.03 per barrel, near 13-month highs after a seven-day winning streak as investors are betting that fuel demand will rise while OPEC and allied producers keep a lid on supply.
“With Brent over $60, it’s been great psychologically,” said John Kilduff, partner at Again Capital LLC in New York. “Everyone is feeling bullish about stronger demand and global inventories in further decline.”


Eurozone growth slows 'markedly' in September: IHS Markit survey

Eurozone growth slows 'markedly' in September: IHS Markit survey
Image: Shutterstock
Updated 4 sec ago

Eurozone growth slows 'markedly' in September: IHS Markit survey

Eurozone growth slows 'markedly' in September: IHS Markit survey
  • The purchasing managers' index (PMI), which measures corporate confidence, slipped to a still strong 56.1 in September, after posting 59 points in August
  • IHS Markit said the increase in activity was the slowest since April, when pandemic-linked closures still weighed heavily on Europe

Economic growth in the eurozone stumbled in September, a closely watched survey said Thursday, as supply chain bottlenecks, high prices and the spread of the coronavirus Delta variant hurt output.


"Eurozone business activity grew at a markedly reduced rate in September, reflecting the peaking of demand in the second quarter, supply chain bottlenecks and concerns over the ongoing pandemic," IHS Markit said.


The purchasing managers' index (PMI), which measures corporate confidence, slipped to a still strong 56.1 in September, after posting 59 points in August. A figure above 50 indicates growth.


IHS Markit said the increase in activity was the slowest since April, when pandemic-linked closures still weighed heavily on Europe, but remained well above the pre-Covid longer-term average.


"For now, the overall rate of expansion remains solid, despite slowing, but growth looks likely to weaken further in coming months if the price and supply headwinds show no signs of abating," said Chris Williamson, chief economist at IHS Markit.


This would be true, he added, "especially if accompanied by any rise in virus cases as we head into the autumn".


He warned that European firms were feeling the supply pinch and have become "increasingly frustrated", with companies expressing worry of losing customers.


UK's Drax considers delaying closure of coal plants to plug energy gap: FT

UK's Drax considers delaying closure of coal plants to plug energy gap: FT
Drax Power Station at sunset, Selby North Yorkshire England (Shutterstock)
Updated 48 min 33 sec ago

UK's Drax considers delaying closure of coal plants to plug energy gap: FT

UK's Drax considers delaying closure of coal plants to plug energy gap: FT
  • Britain will host the COP26 climate change summit in November to spur more ambitious commitments by countries to achieve net-zero carbon emissions by 2050
  • Gardiner said the United Kingdom would face a "tough winter" if temperatures were colder than average

UK power generator Drax Group Plc said it could keep its coal-fired power plants operating beyond their planned closure next year as the energy crisis in Europe highlights potential fragilities in Britain's energy supplies, the Financial Times newspaper reported on Thursday.


"If the government wants us to rethink our plans, we need to talk to them in the next few months," Drax CEO Will Gardiner said in an interview with the FT.


His comments come as Britain prepares to host the COP26 climate change summit in November to spur more ambitious commitments by countries to achieve net-zero carbon emissions by 2050 and keep the global average temperature rise to well below 2 degrees Celsius during this century.


Gardiner said the United Kingdom would face a "tough winter" if temperatures were colder than average, and Drax's last remaining coal units would help to balance a grid that had experienced tight supply in recent weeks.


The country's energy regulator Ofgem and business minister Kwasi Kwarteng warned parliament this week that soaring gas prices would force more suppliers out of business and that the industry should prepare for a tougher environment.


Avro Energy and Green Supplier Limited became the latest providers to say they would cease trading, following a handful of others that have exited the market this year.


Volkswagen to build new EV battery system factory in China

Volkswagen to build new EV battery system factory in China
Electric car lithium battery pack (Shutterstock)
Updated 23 September 2021

Volkswagen to build new EV battery system factory in China

Volkswagen to build new EV battery system factory in China
  • The German automaker is building a factory for electric vehicles under a majority-owned venture with JAC in the Hefei city
  • The factory's initial capacity will be 150,000 to 180,000 battery systems a year for local EV production

Volkswagen AG said on Thursday it is building a new electric vehicle (EV) battery system factory in eastern China's Hefei city which will start production in 2023.


The German automaker is building a factory for electric vehicles under a majority-owned venture with JAC in the Hefei city. It also holds a stake in the EV battery maker Gotion which is also based in Hefei.


It said it would invest more than 140 million euros ($164 million) in the battery plant by 2025. The factory's initial capacity will be 150,000 to 180,000 battery systems a year for local EV production.


Volkswagen rolled out five ID. series electric models in China, the world's biggest car market, this year. It sold around 7,000 such vehicles there last month and aims to deliver 80,000 to 100,000 units in total this year.


Reuters reported last week, citing people familiar with the matter, that Volkswagen is in talks to tighten its grip on the Hefei venture, sparking tensions with its other Chinese partners who fear they could be sidelined.

Earlier this week US-based electric car maker Lucid Motors announced it would produce vehicles in Saudi Arabia by 2024. Saudi Arabia's Public Investment Fund poured $1 billion into the company in April 2019 - giving it a 67 per cent stake in the firm.


IBM targets Kingdom's youth as new Saudi GM insists he wants to 'serve' the country

IBM targets Kingdom's youth as new Saudi GM insists he wants to 'serve' the country
Updated 15 min 36 sec ago

IBM targets Kingdom's youth as new Saudi GM insists he wants to 'serve' the country

IBM targets Kingdom's youth as new Saudi GM insists he wants to 'serve' the country

IBM’s investments in initiatives including a cybersecurity center and training academy show the company's belief in the Saudi people, one of its top officials has told Arab News

Fahad Alanazi, general manager of IBM Saudi Arabia, said his company's strategy “is to make the national priority, our priority” as he spoke of his commitment to the region.

Alanazi was appointed earlier this year as the first Saudi GM of IBM for Saudi Arabia, and he is clear that his local knowledge will help the company thrive in the Kingdom. 

“In order to serve people of a country, you need to understand the way business is operated there,” said Alanazi.

With this in mind, IBM has established a number of initiatives aimed at the Saudi youth. 

The most recent, a training academy, was announced in August as part of a series of technology initiatives aimed at improving the digital skills of 100,000 Saudi youngsters.

The initiatives tie in with the Kingdom’s Vision 2030, and are being delivered in partnership with the Saudi Data and Artificial Intelligence Authority, the Saudi Federation for Cybersecurity, Programming and Drones, and the Ministry of Communications and Information Technology.

Education

Alanazi praised the Saudi education system, something which IBM is seeking to complement with digital training programmes. 

“On previous technology training programs conducted by us, the Saudi students scored the highest among other Middle Eastern students and that’s a good sign of the education system,” he said. 

IBM has a “digital nation” program with the Saudi Ports which focuses on providing online training and enabling the digital skills of Saudi port employees. There have also been agreements with the Ministry of Communication and Information Technology to train their employees, as well as other government officials.   

IBM has signed an agreement with Tuwaiq Academy to provide online courses to improve the digital skills of employees in the government and private sectors that are using AI data technology.

The courses to be offered through Tuwaiq will cover hybrid clouds, data science, AI technology, blockchain, and machine learning.

“We are measuring our success by our ability to create jobs via our ecosystem,” said Alanazi .

IBM sees its projects as win-win opportunities, not only because they feel responsible for spreading knowledge but also because investment in education will reap benefits from seeing growth in Saudi Arabia. “The more we train people, the more the country will be developing technologically and that means there is a return for us,” he said.

This approach also benefits the IBM ecosystem, he said, ensuring there are the right people to work for IBM and creating customers in the future.

“ We are committed to developing local talent, we have strong belief in the Saudi market and the Saudi youth,” said.

A sign of this commitment is that IBM’s only security operations center in the region is located in its Riyadh office, serving the whole of the Middle East. The center operates 24/7 to monitor security incidents and provides active alerts on any suspicious activities related to client data, said Alanazi.

Clouds

IBM is one of the leading firms working in hybrid clouds, which they believe to be an opportunity worth $1.3 trillion worldwide, according to Alanazi. 

Hybrid clouds combine on-premises IT infrastructure with private cloud services and the public cloud, and they are viewed as a way of moving faster while keeping costs in check and complying with local regulations. 

Nearly half of C-suite executives in the Kingdom see hybrid clouds as a preferential solution when it comes to disaster recovery, and 85 percent are pursuing or planning hybrid cloud strategies, according to a survey by IBM.

However, fear of information leakage is slowing down their plans. Although the Ministry of Communications and Information Technology regulates the cloud, 80 percent of public and private sector leaders still prefer data to be held within the country for greater privacy.

It is a government requirement that all healthcare and financial personal data be held in the Kingdom. “We believe there will be some sort of acceptance to put them on the cloud system,” Al Anizi said, but for the time being there are clear instructions that valuable information needs to be inside the country. 

“We have the IBM cloud satellite installed here in Saudi Arabia, but we are committed in moving Saudi Arabia forward with hybrid cloud,” he said.

As with every other industry, data technology and AI have been affected by the pandemic.

“Delivery services, online banking, payment systems and other related sectors are growing. We have been part of that,” said Alanazi. 

This growth includes the recent launch of an instant payment system in cooperation with Mastercard. It is aligned with Saudi Payments’ aim to improve the Kingdom’s financial ecosystem through the adoption of faster payment systems and improvements to banking reconciliation, according to a report by IBM. 

Recent transformations in the way technology has been put to use was not determined by the pandemic, but Covid did accelerate investment and helped the process move faster, said Alanazi.

IBM first set foot in Saudi Arabia in 1947, when the first computer was installed at Aramco. The company does not yet plan to base its regional headquarters in Saudi Arabia and its existing office in Riyadh doesn’t only serve sales and marketing purposes, but also provides technical resources, consultancy services, and security expertise, he said.


European stocks rally for third day, Evergrande shares surge 30% in Asia

European stocks rally for third day, Evergrande shares surge 30% in Asia
Image: Shutterstock
Updated 23 September 2021

European stocks rally for third day, Evergrande shares surge 30% in Asia

European stocks rally for third day, Evergrande shares surge 30% in Asia
  • The pan-European STOXX 600 index rose 0.6 percent earlier today and was now set to end the week with solid gains
  • Asian stocks rose after Evergrande's shares surged 30 percent in Hong Kong markets

European stocks rallied for a third day as the global mood brightened on easing concerns about cash-strapped developer China Evergrande, while investors awaited the latest batch of business surveys.


The pan-European STOXX 600 index rose 0.6 percent earlier today and was now set to end the week with solid gains.


Asian stocks rose after Evergrande's shares surged 30 percent in Hong Kong markets as its chairman sought to reassure investors after the company's unit said it had "resolved" a coupon payment on an onshore bond. This interest payment is due today. 


However, Evergrande's Frankfurt-listed shares tumbled 20.4 percent.


Early reading of IHS Markit's September business surveys and the Bank of England's monetary policy decision are due later in the day, with investors looking for clues on growth and policy trajectory.

Meanwhile, Asian markets found solace in the Federal Reserve statement which signaled it may begin easing its extraordinary support measures for the economy later this year.


Shares rose in Hong Kong, Shanghai, Australia and Taiwan but fell in South Korea and Malaysia. U.S. futures were higher. Markets were closed in Tokyo for a holiday. Singapore equities headed for their best day in two months on Thursday, leading broad gains in emerging Asian stocks.