23/09/2025

BIZ & FINANCE TUESDAY | SEPT 23, 2025

FOLLOW

ON TWITTER Malaysian Paper

16

@thesundaily

Indian IT stocks slide on US visa crackdown

New Thai govt sets up team to tackle strong baht BANGKOK: Thailand’s new government is setting up a multi-agency team to counter the baht’s rise to four-year highs, which is a risk for the key economic drivers of tourism and exports, and said yesterday it also wanted to urgently tackle high debt levels. Finance Minister Ekniti Nitithanprapas said a team including people from the Finance Ministry, the Anti-Money Laundering Office, the Securities and Exchange Commission and the Bank of Thailand had been set up to address the baht’s rise, trace unidentified capital flows and oversee currency moves. Ekniti said the government wanted to revive the economy, aiming for a short-term recovery with long-term impact. “We are emphasising restructuring the economy,”he said, after meeting with the Thai Bankers’ Association. “Especially household debt, which has been a persistent issue.” The baht’s rise to four-year highs against the American dollar is seen as a threat to exports and tourism, as Southeast Asia’s second-largest economy grapples with US tariffs and high household debt. Prime Minister Anutin Charnvirakul, after the meeting, said he wanted lenders to back the government’s efforts to tackle debt and support business. “The main issue is debt,” the premier said, as it was stopping businesses from operating effectively. “We’ve asked the association to help inject liquidity into the market.” Payong Srivanich, chairman of the Thai Bankers’ Association, said there was sufficient liquidity but the challenge was ensuring funds reached the intended groups. Southeast Asia’s second-largest economy is projected to expand by 1.8% to 2.3% this year, according to the state planning agency. Last year’s growth of 2.5% lagged its regional peers. – Reuters Bank Indonesia governor says rupiah movements remain under control JAKARTA: Indonesian central bank governor Perry Warjiyo said yesterday that the rupiah’s movement against the US dollar was still under control, adding that the bank would continue to intervene in the market to stabilise the currency. His statement came after rupiah fell as much as 0.3% to 16,635 per US dollar yesterday, its lowest level since April 30, before regaining some of its losses. “Rupiah (movement) remains under control and we are committed to do stabilisation measures amid high uncertainty at home and abroad,” Warjiyo said in a parliamentary hearing. At the hearing, Warjiyo also said that Bank Indonesia (BI) will continue to monitor to see if there is room for further monetary easing, considering the need to boost growth further. “We will be all out to boost economic growth ... but still maintain rupiah stability,”he added. Last week, Indonesia’s central bank delivered a surprise interest rate cut with aim of bolstering economic growth, despite growing investor concerns about the country’s fiscal discipline. BI has now cut its main interest rate by a total of 150 basis points in this cycle beginning in September last year. – Reuters

o Analysts expect short-term impact to margins and EPS

India-centric firms have fallen to slightly more than 10,000 in 2024 from nearly 15,000 in 2015. They expected Trump’s order to have a marginal impact on the industry as Indian firms have significantly reduced their reliance on H-1B visas. Mphasis led losses on the tech sub-index yesterday with a 4.4% slump. IT majors TCS and Infosys were down about 3% each, while Wipro fell 2%. Trump’s order “is among the last things that the sector sentiment needed, amid persistent pressure weighing on growth from geopolitical and macro uncertainties and structural concerns caused by GenAI”, said analysts at TD Cowen. The fresh challenge for the Indian IT sector comes as it awaits clarity on a proposed 25% tax on outsourcing payments and struggles with weak revenue growth in its mainstay US market as clients defer non-essential tech spending amid inflationary pressures and tariff uncertainty. IT stocks are the worst performers so far this year, falling 18% versus a 7.1% gain in the benchmark Nifty 50 index. – Reuters

“Due to the near-term pressure on margins amid an already tough market, we believe this is sentimentally negative for the sector,” ICICI Direct, an online trading platform for ICICI Securities, said in a client note yesterday. ICICI Securities estimated that Trump’s order could knock about 1 percentage point off profit margins and about 6% off earnings for IT firms, assuming they continue to hire Indians under the programme. Trump’s reshaping of the H-1B programme represents his administration’s most high-profile effort to rework temporary employment visas. Jefferies analysts, who called the move a “US$100,000 curveball for the Indian IT” sector, said the industry has about four to five years to resolve the issue, given the higher fees only applies to new applications. Other analysts and industry experts said they expected Indian IT firms to reduce reliance on H-1B visas and increase local hiring in the US as well as hiring workers in nearby countries such as Mexico and Canada. Indian IT industry body Nasscom said H-1B visas issued to the leading Indian and

MUMBAI: Indian information technology majors saw their shares slump yesterday after US President Donald Trump imposed a US$100,000 (RM420,000) fee on new H-1B visa applications, threatening to inflate costs and slow revenue growth in their biggest market. The sector, which earns about 57% of its revenue from the US, has long gained from American work visa programmes and the outsourcing of software and business services – a contentious issue for American job-seekers competing with cheaper Indian labour. The tech sub-index dropped nearly 3% and was the biggest loser on the day. It also dragged the benchmark Nifty 50 0.2% lower. India was by far the largest beneficiary of H-1B visas last year, accounting for 71% of approved beneficiaries.

UN: Vietnam risks losing US$25b from US tariffs HANOI: US tariffs imposed in August risk slashing up to one-fifth of Vietnam’s exports to the United States, making it the worst-hit country in Southeast Asia, according to estimates by the United Nations Development Programme.

Vietnam was the world’s sixth-largest exporter to America last year with US$136.5 billion (RM573 billion) worth of shipped goods, US trade data show. Those goods are largely produced in factories run by US and foreign multinational companies or their suppliers. In a worst-case scenario of very high tariff-driven US inflation, the 20% duties levied on Vietnamese goods could cause its US exports to fall “over time by more than US$25 billion, nearly one fifth of the yearly total”, Philip Schellekens, UNDP chief economist for the Asia-Pacific region, told Reuters. Vietnam’s finance and industry ministries did not immediately reply to requests for comment. The first comprehensive Vietnamese data released since tariffs took effect on Aug 7 show Vietnam’s exports to the United States, its biggest market, fell by 2% in August from July, with a 5.5% drop for footwear, of which Vietnam is the world’s second-largest supplier, according to the customs department. That followed a surge in exports before tariffs. The World Bank revised down Vietnam’s growth forecasts for this year after the US tariffs took effect. Nike, Adidas and Puma, which produce a large part of their global output of shoes through suppliers in Vietnam, declined to comment. The 19.2% potential fall in Vietnamese exports to America would be nearly twice as high as the average 9.7% possible drop in exports from Southeast Asia, the most impacted region in the continent and a major industrial hub, according to a UNDP report released last week, one of the first public estimates of the hit on trade flows since the tariffs took effect. “No country in Southeast Asia is more exposed to US tariff hikes than Vietnam,” said Schellekens, noting only China in East Asia would be hit harder in dollar terms. Among large Southeast Asian nations, Thailand’s US exports could fall 12.7%, Malaysia’s

The Vietnamese flag is seen as workers install stage scaffolding in front of the Hanoi Opera House yesterday. – AFPPIC

The UNDP did not take into account either the possible effect of 40% tariffs on goods transhipped through Vietnam, which could have a devastating impact if Washington decided to set strict limits on foreign components used in exported items, given Vietnam’s goods highly rely on Chinese input. The UNDP data did not factor in current tariff exemptions on consumer electronics which account for 28% of Vietnam’s total exports to America. However, even if Washington upheld those waivers, Vietnam’s US exports could still fall by US$18 billion, Schellekens said. – Reuters

10.4% and Indonesia’s 6.4%, the UNDP report said. The estimated fall of US exports would shave roughly 5% from Vietnam’s gross domestic product, although the tariff impact could take years to fully materialise, and was likely to be mitigated by exporters’ absorption of some costs, Vietnam’s diversification to other regions and bigger domestic spending. The UNDP estimates are based on a scenario in which duties would be entirely passed through to US consumers, damping demand, which so far has not happened as the impact on US inflation has been moderate.