26/06/2025

BIZ & FINANCE THURSDAY | JUNE 26, 2025

16

Stocks rally as Iran-Israel ceasefire holds

Thai central bank keeps key rate at 1.75%

BANGKOK: Thailand’s central bank left its key interest rate unchanged yesterday, as expected, holding steady after two consecutive cuts as it seeks to preserve limited policy space amid trade uncertainty and renewed domestic political turmoil. The Bank of Thailand’s monetary policy committee voted 6 to 1 to hold the one-day repurchase rate steady at 1.75%, the lowest in two years. The BOT had cut the rate by 25 basis points at reviews in February and April. Twenty-one of 33 economists in a Reuters poll had predicted no rate change this week. The other 12 had expected a quarter-point rate cut. Among those who provided a longer-term outlook on rates in the poll, 17 of 24 respondents saw the policy rate at 1.50% by the end of September. The central bank said in a statement that monetary policy remained accommodative to support the economy, and it was ready to adjust rates as needed. The baht was largely unchanged after the announcement to hold the rate steady and was last down 0.1%. Thailand’s economy has struggled with weak consumption, soaring household debt, slowing tourism, trade uncertainty and potentially steep U.S. tariffs. The country faces a 36% U.S. tariff on its exports, a key driver of growth, if it fails to negotiate a reduction before a moratorium expires in July. A tariff of 10% has been set for most nations while the moratorium is in place. Adding to the challenges is a new round of political turmoil that could bring down Prime Minister Paetongtarn Shinawatra or the coalition government led by her Pheu Thai party. – Reuters

While Powell said “I don’t think we need to be in any rush because the economy is still strong”, the comments indicated a flexible tone. They also came after Fed governors Christopher Waller and Michelle Bowman suggested officials could reduce borrowing costs next month. The dollar tumbled against its peers and remained under pressure against the yen, pound and euro in Asian trade. “The market staged a full-throttle risk-on revival, launching global equities into the stratosphere as oil prices cratered and rate-cut bets gained momentum,” said SPI Asset Management’s Stephen Innes. “With the Middle East truce – however duct-taped and temperamental – holding long enough to calm headlines, traders pulled the ripcord on the fear trade and dove headfirst into equities. “Trump’s ... scolding of Israel and Iran added ice water to the fire – or at least enough jawbone to muzzle the Middle East combatants for now.” – AFP

in the war with Iran, with Prime Minister Benjamin Netanyahu hailing a “historic victory” after 12 days of bombing. Stocks surged on the news, and the optimism rolled into yesterday, with Hong Kong, Shanghai, Tokyo, Sydney and Singapore leading the gains across Asia. There were small losses in Wellington, Bangkok and Jakarta. London, Paris and Frankfurt were also on the front foot. Oil prices, which tanked on news of the ceasefire, rose with both main contracts up nearly 2%. However, they are still down around 15% from the highs hit on Monday in the first reaction to the US bombing of Iran and before the ceasefire announcement. The mood was also helped by Fed chairman Jerome Powell choosing not to pour cold water on the prospects of a rate cut. In closely watched testimony to Congress, he said that “if it turns out that inflation pressures do remain contained, then we will get to a place where we cut rates sooner rather than later”.

o Oil claws back some losses, greenback tumbles against peers

HONG KONG: Most equities extended a global rally yesterday after Iran and Israel agreed to a ceasefire that ended more than a week of hostilities, while the dollar held losses following a sharp drop stoked by bets on a US interest rate cut. However, wariness over the agreement involving the Middle East foes helped oil prices climb, though they are still well down from their highs on Monday. Investors around the world breathed a sigh of relief after Donald Trump announced the ceasefire days after US forces bombed Iran’s nuclear sites, which he said were “completely destroyed”. The Israeli government said it had agreed to the US deal after achieving all of its objectives

Vietnam raises funds in govt bond auction for public investments HANOI: Vietnam’s State Treasury raised 13.9 trillion dong (RM2.2 billion) in a weekly government bond auction yesterday, the highest volume since March 19 and up from the US$385 million raised last week. Vietnam uses the proceeds from bond sales mainly to fund its public investments, one of the key drivers of economic growth. It failed to offload any of the 2 trillion dong of 15-year bonds, while managing to sell only 73 billion dong out of the 500 billion dong of 30 year bonds on offer at a coupon of 3.4%.

It aims to raise 500 trillion dong this year. At yesterday’s auction, the treasury sold 3.8 trillion dong out of 4 trillion dong of the 5-year bonds on offer, at a coupon of 2.59%. It also sold 10.04 trillion dong out of 11 trillion dong of the 10-year bonds on offer, at a coupon of 3.18%. The coupons for the bonds were the highest this year.

On the corporate side, Vietnamese companies have raised 172 trillion dong via bonds this year up to June 20, according to bond market association data. The value of corporate bonds maturing in the remainder of 2025 is 143.3 trillion dong, 51.5% of which are in the real estate sector and 28.0% in the banking sector, the data showed. – Reuters

The uptake was lower, with 80% of the bonds on offer sold, compared with 84% at last week’s auction, according to a Hanoi Stock Exchange filing. The auction took total government bond sales so far this year to 189.4 trillion dong, according to exchange data.

China and India shift to higher-grade coal, cut imports from Indonesia JAKARTA: Top thermal coal importers China and India are slashing Indonesian shipments of the power generating fuel in favour of energy-dense grades from elsewhere as a global fall in prices has made higher-quality coal more competitive. Coal purchases by China and India from Indonesia, the world’s biggest exporter, are dropping faster than their overall thermal coal imports, as both nations shift toward higher-calorific value (CV) coal that yields more energy per ton, industry officials say. as long as more energy-dense grades are competitive. Mongolian coal in China and South African coal in India have been the biggest gainers at Indonesia’s expense, with their shares touching record highs in these markets in the first five months of 2025, Chinese customs and Indian trade data showed.

Higher production and improved efficiency will continue to boost Mongolian coal exports despite falling thermal coal prices in China as Mongolian coal has remained price-competitive, said Xue Dingcui, analyst at Mysteel. China and India have also stepped up purchases from Tanzania, which was largely been absent from the global seaborne coal trade map until Russia’s war on Ukraine in 2022. Indian traders have also increased higher-grade coal purchases from Kazhakhstan, Colombia and Mozambique this year, while Australian supplies have gained share in China. Indonesian and Australian coal indexes, reflecting grades preferred by Chinese buyers, have been trending lower since October 2023, with the Australian benchmark declining faster than the Indonesian one. Overall, Chinese coal imports fell

“Higher CV coal is more expensive, but produces more energy for every dollar spent at current prices. One million tons of higher CV coal can replace 1.2-1.3 million tons or even 1.5 million tons from Indonesia,” said Vasudev Pamnani, director at India based coal trader I-Energy Natural Resources. In China, Indonesian medium- and low-calorific thermal coal has been struggling to compete with discounted Russian supplies of similar grades, said Kpler analyst Zhiyuan Li. Ramli Ahmad, the president director of Indonesian miner Ombilin Energi, said Indonesian coal could make a comeback if prices of higher grades rise due to the Middle East conflict, but lower-CV coal will suffer

Coal barges queuing to be pulled along Mahakam river in Indonesia’s East Kalimantan province. – REUTERSPIC

Indonesian miners are pivoting to domestic demand, with local deliveries poised to rise 3% this year and exports set to decline about 10%, according to the Indonesian Mining Services Association. – Reuters

respectively. The Southeast Asian nation’s total coal exports dropped 12% to 187 million tons in the January-May period, data from analytics firm Kpler showed. To counter export declines,

nearly 10% to 137.4 million tons in the first five months of the year, while shipments to India dropped more than 5% to 74 million tons. Indonesian exports have been the worst hit, with supplies to China and India sliding 12.3% and 14.3%,