10/10/2024

BIZ & FINANCE THURSDAY | OCT 10, 2024

16

Chinese stocks tumble on stimulus upset o Most other Asian markets track Wall Street higher on US economic optimism

Still, most other markets in the region rose as investors took their lead from New York, where tech firms led the way on optimism over the world’s top economy in the wake of Friday’s forecast-topping jobs data. Tokyo, Sydney, Singapore, Taipei, Wellington, Bangkok and Mumbai rose, along with London and Paris. Frankfurt, Manila and Jakarta dipped. While the US jobs figures dented expectations for a second successive bumper interest rate cut this month, they did temper worries about a possible recession. US consumer and producer prices data towards the end of the week should provide further clues on the interest rate outlook, while third-quarter earnings season kicks off tomorrow. – AFP Japan 7-Eleven owner confirms new takeover bid TOKYO: The Japanese owner of 7-Eleven said yesterday it had received a “revised” takeover offer from Canadian rival Alimentation Couche-Tard after rejecting an initial bid worth around US$40 billion (RM171 billion). 7-Eleven is the world’s biggest convenience store chain and has more than 85,000 outlets worldwide, around a quarter of those in Japan. Seven & i Holdings did not give a figure for the revised offer from Alimentation Couche-Tard (ACT) but Bloomberg News and other media outlets reported that it totalled around ¥7 trillion (RM201 billion). The takeover, if realised, would be the biggest foreign buyout of a Japanese firm. “As requested by ACT, the company has maintained, and intends to continue to maintain, the confidentiality of its current discussions with ACT,” Seven & i, Japan’s biggest retailer, said in a statement. Seven & i announces its quarterly earnings today, with the CEO scheduled to address the media. The group’s shares closed up 4.7% yesterday, having surged nearly 12% in the morning following reports that ACT – which owns Circle K – had hiked its offer by almost 20%. The reports said the new offer was sent to Seven & i on Sept 19 but said no substantive negotiations had taken place since then. Seven & i rejected ACT’s first offer last month, saying the US$40 billion proposal “grossly” undervalued its business and could face regulatory hurdles. 7-Eleven began in the United States but the franchise has been wholly owned by Seven & i since 2005. The stores are a beloved institution in Japan, selling everything from concert tickets to pet food and fresh rice balls. Couche-Tard runs nearly 17,000 convenience store outlets worldwide. By purchasing 7-Eleven, it is seeking to become “truly global”, said Kai Li, a professor and Canada research chair in corporate governance at UBC Sauder School of Business. But “such a purchase might raise antitrust concerns” given that the combined entity would have “more market power”, Li said. TV Tokyo reported that Seven & i is considering changing its name “to demonstrate in name and substance that the company will focus on its mainstay convenience business”. Recent media reports have also said the company is exploring the possibility of selling off non-core assets such as its banking unit. – AFP

not feel the need to do “whatever it takes”. “Instead it’s opting for targeting stimulus – including allocating funds for projects previously announced. “The irony is markets would’ve continued rallying had there been no press conference. “The only upside of (Tuesday’s) event was injecting a much-needed dose of reality.” Hong Kong had soared more than 20% between the first batch of measures being announced and Monday, but it collapsed more than 9% on Tuesday – its worst day since 2008. After swinging in the morning, the Hang Seng Index fell more than 1% yesterday as traders struggled to get back on track. Shanghai ended down more than 6% – having seen a 10% opening rally on Tuesday pared to just over 4% by the end of the day.

expectations and revived worries about the outlook. A rally on Wall Street, helped by a plunge in oil prices and optimism over the US economy, did little to lift sentiment on Chinese trading floors, although most other markets in Asia enjoyed gains. Investors are now keeping tabs on developments out of Beijing after it said Finance Minister Lan Fo’an would hold a Saturday briefing on fiscal policy. Traders are hoping for more indications about officials’ plans, although analysts warn there is unlikely to be the big “bazooka” stimulus akin to the support seen during the global financial crisis. Shehzad Qazi at China Beige Book said the news conference “underscored that Beijing does

HONG KONG: Stocks in mainland China and Hong Kong tumbled on another volatile day yesterday after Beijing disappointed investors over a lack of fresh stimulus and scant detail on its plans for implementing a raft of measures already unveiled. After blockbuster performances in the wake of last month’s announcements to kickstart growth, traders were left deflated after a news conference on Tuesday fell short of

Job seekers attending a job fair in Jakarta. – REUTERSPIC

Prabowo wants gradual increase in debt-to-GDP, says adviser

JAKARTA: Indonesia’s President-elect Prabowo Subianto will increase the country’s debt-to-GDP ratio level gradually, alongside efforts to boost tax revenues, his top adviser and brother Hashim Djojohadikusumo told a seminar. The increase may be within a range of one to two percentage points per year, he said, describing Indonesia’s current debt-to-GDP level of under 40% as “underleveraged”. Investors and rating agencies are closely monitoring Prabowo’s fiscal plans after his earlier comments suggesting an appetite for higher debt levels to fund his costly campaign promises triggered concern about potential fiscal slippage. In June, capital outflows hit the rupiah after

estimated to cost 450 trillion rupiah (RM123 billion) to implement. Hashim said increasing revenue is important before the government takes on more debt and that he had consulted Prabowo’s plans for tax reform with the World Bank several times in order to raise the revenue-to-GDP ratio to 23%, from an estimate of 12% this year. Prabowo will spin off the tax and customs offices from the Finance Ministry and set up a new revenue collection agency, which will use artificial intelligence and other technology to boost tax collection, Hashim said. “We will achieve that (the revenue target) without increasing tax rates.” – Reuters biofuel blends consisting of more than 24% biofuel content can only be carried by type 2 chemical tankers. Initially, the tankers will likely deliver conventional fuels as spot demand for alternative fuels like methanol and biofuel has yet to ramp up, Choong said. Equatorial was the top marine bunker supplier by volume in 2022 and 2023 in Singapore, the world’s largest hub for ship refuelling. The company launched marine biofuel sales in late 2022. – Reuters

Bloomberg News reported Prabowo planned to boost the debt-to-GDP ratio to 50% within his five year term. Prabowo has promised to comply with Indonesia’s fiscal laws limiting the annual budget deficit to a maximum 3% of GDP and debt-to-GDP at 60%. “Prabowo will not add to national public debt abruptly, not drastically,” Hashim said. “We will remain prudent, but we will be daring, more aggressive, so we can fulfil our (campaign) promises.” Prabowo’s key campaign pledge is to provide free meals to more than 80 million children and pregnant mothers across Indonesia, which is

Singapore top marine fuel supplier Equatorial expands fleet SINGAPORE: Singapore’s largest bunker fuel supplier Equatorial Marine Fuel is expanding its tanker fleet, a company executive told Reuters this week, adding it will receive its first IMO type 2 chemical bunker tanker before the end of 2024 and three more in 2025. The fleet expansion comes as the company eyes potential business opportunities in supplying lower-carbon fuels. “We want to be ready for these fuels when demand comes up in the future,” Choong told Reuters on Tuesday on the sidelines of the Argus Asia B24 forum, which was held in the week of SIBCON 2024.

These four tankers will add to the company’s existing fleet of 20 conventional bunker tankers, said chief operating officer Choong Sheen Mao. Choong said half of Equatorial’s current fleet is currently delivering marine fuel oil while the other half delivers marine gasoil.

The type 2 tankers will be able to carry methanol or biofuel blends comprising up to 100% biofuel content. Based on MARPOL maritime regulation,