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Saudi vows extra cuts as Opec+ agrees small rise in oil output

elean
3 minutes

MOSCOW/LONDON/DUBAI (REUTERS) - Saudi Arabia pledged additional, voluntary oil output cuts of one million barrels per day (bpd) in February and March as part of a deal under which most Opec+ producers will hold production steady in the face of new coronavirus lockdowns. Saudi is going beyond its promised cuts as part of the Opec+ group of producers to support both its own economy and the oil market, Energy Minister Prince Abdulaziz bin Salman said on Tuesday (Jan 5). "If there is one way to describe what its voluntary cut means for the market, 'happy hour' is a pretty fitting term," Rystad Energy analyst Bjornar Tonhaugen said in a note. Benchmark Brent oil prices rose on the news, trading up almost 5 per cent above US$53 per barrel at 2023 GMT. The deal - under which most producers will hold output steady - followed two days of talks by Opec+, which groups Opec and others including Russia. Two members - Russia and Kazakhstan - will be allowed to bump up their output by a modest combined 75,000 bpd in February and a further 75,000 bpd in March. Their increases could frustrate Opec+ peers similarly looking to pump more, but it was apparent the two were keen to avoid non-maintenance ...

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Grab’s Ebitda unlikely to break even before 2023: Moody’s

elean
4 minutes

Ride-hailing firm Grab Holdings has been assigned a B3 corporate family rating (CFR) by ratings agency Moody's, to reflect the company's leading position in key regional markets but also uncertainties around its ability to achieve sustained profits. In a research note on Monday, Moody's said it does not expect Grab's earnings before interest, taxes, depreciation, and amortisation (Ebitda) to break even on a consolidated basis before 2023, as growth plans for its financial services business will "temper overall profitability" over the next two to three years. It said cash will be needed to ramp up new businesses as well as potential acquisitions to grow this segment, which offers cashless payment solutions, and products and services such as insurance, lending and wealth management. Grab, Moody's noted, had about $3.2 billion of unrestricted cash and cash equivalents on its balance sheet as at Sept 30 last year. Moody's expects this will be sufficient to cover negative operating cash flow, capital spending at its transport and food delivery businesses and scheduled debt maturities over at least the next two to three years. "The B3 CFR reflects Grab's leading position in key ride-hail...

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Bitcoin falls, bringing dizzying rally to a halt

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3 minutes

NEW YORK (BLOOMBERG) - Bitcoin fizzled in trading on Monday (Jan 4) as the famously volatile cryptocurrency pulled back after a spectacular new-year rally. Prices fell as much as 17 per cent in the biggest drop since March before recovering. The losses are small in the context of Bitcoin's broader rally, with a 50 per cent jump in December alone. After a parabolic 2020, the digital currency had started the new year with a bang, surging as high as US$34,000 (S$44,890) and hitting all-time highs on Sunday. Bitcoin was down 7 per cent to US$31,227 as of 12:59pm in London. "Today's selloff is a reminder this is a relatively new asset, highly volatile, and still yet to find its place in the market," said Adrian Lowcock, head of personal investing at Willis Owen. "There are many (major) hurdles for it to overcome for it to be a useful mainstream asset." As ever in the world of crypto, it's hard to pinpoint the proximate cause for the latest bout of volatility. Bitcoin is up more than 300 per cent over the past year, driven by a speculative fever from retail and institutional investors on the belief that cryptocurrencies are emerging as a mainstream asset class and can act as a store of v...

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China delistings threaten $190 billion US fundraising boom

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5 minutes

NEW YORK (BLOOMBERG) - For more than two decades Chinese companies have turned to the US stock market for capital and international prestige, raising at least US$144 billion (S$190 billion) from some of the world's largest investors. Now this pillar of China's integration with the global financial system is increasingly under threat. The latest blow arrived on New Year's Eve, when the New York Stock Exchange said it would delist three state-owned telecom companies to comply with Donald Trump's November order barring US investments in Chinese firms determined to be owned or controlled by the military. It's the first time an American exchange has removed a Chinese company as a direct result of rising geopolitical tensions under the outgoing Trump administration. While the impact on China Mobile and its two peers is likely to be minimal given the bulk of their shares trade in Hong Kong, the delistings underscore the risks for both Chinese and US companies as tensions between the superpowers simmer. China's largest offshore oil producer fell in Hong Kong on Monday (Jan 4) amid speculation its US shares may enter the crosshairs next. President Trump signed legislation with bipartisan su...

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OCBC again cuts interest rates on flagship 360 savings account

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2 minutes

SINGAPORE (THE BUSINESS TIMES) - OCBC will again lower the interest rates on its flagship savings account, marking its fourth round of revisions since May last year. From Feb 1, balances up to $25,000 in the OCBC 360 account will earn 0.3 per cent in salary credit bonus interest, down from the prevailing 0.4 per cent established last October. Balances between $25,000 and $50,000 will earn 0.6 per cent interest - down from 0.8 per cent - while balances between $50,000 and $75,000 will continue to earn an unchanged 1.2 per cent interest. "If and when the interest rate situation improves, you may be assured that we will adjust our product offerings accordingly," said OCBC in a statement on its website. Its banking peers DBS and Standard Chartered also recently lowered rates on their respective savings accounts to reflect the prolonged low-interest rate environment. As at Jan 1, the interest rate for StanChart's popular Jumpstart savings account has been slashed to 0.4 per cent per annum for the first $20,000 - down from 1 per cent previously - and will remain at 0.1 per cent for balances above $20,000. The bank previously halved rates in July 2020. DBS also on Jan 1 made its the third...

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US stocks tumble ahead of Georgia Senate vote

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2 minutes

NEW YORK (AFP) - Wall Street stocks stumbled on Monday (Jan 4) in the first session of 2021 on anxiety over the Georgia Senate runoffs and worries about a slower recovery from Covid-19. Polls show both Senate races remain very close, leaving the possibility Republicans could maintain control of the chamber, or that it could go into Democratic hands, which would give incoming President-elect Joe Biden's party control of Congress. Analysts also cited unease at the worsening public health situation in the United States, with elevated coronavirus cases coming at a time when many hospitals are already at or near capacity. The rollout of vaccines has also been more problem-filled than expected, potentially slowing down the recovery. Shares fell for several recovery-linked equities, such as Marriott International and United Airlines. All three major US indices finished decisively lower, with the Dow Jones Industrial Average down 1.3 per cent at 30,223.89. The broad-based S&P shed 1.5 per cent to 3,700.65, while the tech-rich Nasdaq Composite Index tumbled 1.5 per cent to 12,694.45. "Traders start to get nervous when either party has a clear shot at getting things done," said Chris Low, ch...

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Pinduoduo worker’s death renews scrutiny over work culture

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2 minutes

BEIJING • The recent death of a Pinduoduo employee renewed criticism of the long hours commonly practised at China's tech companies, which are already under scrutiny by regulators for anti-competitive business practices. The e-commerce company confirmed yesterday that an employee died after working past midnight last week. That sparked a social media backlash against the company and the relentless working schedules expected of its employees. The so-called 996 office schedule - 9am to 9pm, six days a week, plus overtime - has spurred criticism in previous years following complaints from tech workers and earlier deaths. Still, tech billionaires from Alibaba Group Holding founder Jack Ma to JD.com chief Richard Liu have endorsed the practice as necessary for survival in an intensely competitive industry and the key to accumulating personal wealth. The online criticism adds to the challenges for China's largest tech companies, which spent the past year fending off efforts by the Trump administration to curb their growth while navigating heightened regulatory scrutiny at home. Beijing last November unveiled regulations designed to root out monopolistic practices in the Internet industry...

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Opec+ warns of risk to oil recovery from resurgent Covid-19 pandemic

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4 minutes

LONDON (BLOOMBERG) - Opec warned of risks to the oil market from the resurgent pandemic, a day before the group and its allies meet to consider another increase in production. "The outlook for the first half of 2021 is very mixed," Opec Secretary-General Mohammad Barkindo said at a preparatory meeting on Sunday (Jan 3). "There are still many downside risks to juggle." The alliance of producers led by Saudi Arabia and Russia will decide on Monday whether it can continue to restore crude supplies without capsizing the price recovery they spent most of 2020 working to achieve. Moscow believes that the group - which slashed output last year - can revive another 500,000 barrels a day of idle capacity in February, on top of an increase scheduled for this month. Riyadh, which has favored greater caution, is keeping its own views under wraps. But while the Sunday meeting hasn't addressed future output policy so far in any detail, a Saudi official there noted the fragility of the recovery, according to delegates who declined to be named. "We think the producer group will opt to forgo any further production increases for February with Covid-19 cases continuing to climb and the slower than ex...

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Singapore economy shrinks 5.8% in 2020 after contraction eases to 3.8% in Q4: Flash data

elean
3 minutes

SINGAPORE - Singapore's economy contracted by 5.8 per cent for the whole of 2020, according to the Ministry of Trade and Industry's (MTI) advanced estimates released on Monday (Jan 4). For the fourth quarter of last year, the economy shrank by 3.8 per cent year on year, an improvement from a revised 5.6 per cent drop in the third quarter, as more coronavirus related curbs on economic activity were lifted. The economy's fourth quarter performance was also better than the 4.5 per cent year- on-year drop by economists in a Reuters poll. On a quarter-on-quarter seasonally-adjusted basis, the economy grew by 2.1 per cent, following the 9.5 per cent expansion in the third quarter. The strong GDP growth seen in the third quarter was due to the phased resumption of activities following the circuit breaker period stretching from April 7 to June 1, as well as the rebound in activity in major economies during the quarter as they emerged from their own lockdowns, MTI said. The full-year 2020 MTI estimate tops earlier forecasts of a contraction of 6.5 per cent to 6 per cent made last month and is much lower than a previous estimate of a 7 per cent to 5 per cent shrinkage. In its maiden forecast...

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Australia home prices end rocky 2020 on recovery track

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2 minutes

SYDNEY (REUTERS) - Australian home prices climbed for a third straight month in December as 2020 ended on a strong note across major cities and regional markets, with analysts expecting more gains this year as buyers outnumber sellers. The turnaround from the Covid-19-led crunch has provided a much-needed windfall to consumer wealth and confidence, with the country's housing stock already valued at A$7.2 trillion (S$7.33 trillion) by September. Data from property consultant CoreLogic out on Monday (Jan 4) showed national home prices rose 1.0 per cent in December, from November when they added 0.8 per cent. Values were up 3.0 per cent on the previous December. Prices across the major capitals rose 0.9 per cent in December from November, while the regional market surged 1.6 per cent as city dwellers smarting from coronavirus lockdowns sought more living space and houses with gardens. Sydney managed a gain of 0.7 per cent, while Melbourne increased 1.0 per cent. Brisbane, Perth and Adelaide all rose 1.1 per cent in the month. Values for the combined capitals were 2.0 per cent higher for the year, while regional prices jumped 6.9 per cent "As remote working opportunities became more pr...

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New US law closes key money-laundering, tax evasion channel

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4 minutes

WASHINGTON • A major avenue for global money laundering and tax evasion has been closed off by a new law requiring disclosure of owners of US shell companies used to hide billions of dollars. The Corporate Transparency Act was included in the US defence appropriations Bill passed into law by Congress last Friday, overriding President Donald Trump's veto. The law forces "beneficial owners" behind shell companies to report their identities to the US Treasury's Financial Crimes Enforcement Network, or FinCEN. While the law still grants them protection from public knowledge - only the Treasury and law enforcement will be able to access the FinCEN database - transparency advocates say it is a huge step against kleptocrats, organised crime and rich tax evaders who have been able to anonymously wash their suspect wealth through the world's largest economy. "For years, experts routinely ranked anonymous shell companies... as the biggest weakness in our anti-money laundering safeguards," said Mr Ian Gary, executive director of the Fact Coalition, which lobbied for the legislation. "It's the single most important step we could take to better protect our financial system from abuse." The Unit...

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Market volatility, giant valuations prompt warnings of IPO bubble

elean
5 minutes

NEW YORK • The initial public offering (IPO) market is manic. Stocks have not been this expensive since the dot.com era. The Nasdaq 100 has doubled in two years, leaving its valuation bloated - all while volatility remains stubbornly high. It is a set-up that has left investors sitting on fat returns from 2020, a year that defied easy explanation. It is also one that has a growing cohort of experts warning about a bubble. Knowing when market rallies turn from logical to excessive is always tough. It was nearly impossible as last year ended, with interest rates pinned near zero and the federal government unleashing another US$900 billion (S$1.19 trillion) into the economy. But history offers clues, and a raft of current market conditions meet criteria that would likely be found on a bubble checklist. Take a study by Harvard University researchers published in 2019. It noted that while not every stock surge meets with disaster, those that do share some attributes, including increased share issuance, heightened volatility, and a sector or index that doubles and is twice as high as the broader market. Check, check and almost check. "Are there areas of the market that are in a bubble? Y...

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Opec+ meeting to decide output level, maintain market influence

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3 minutes

LONDON • Members of the Organisation of the Petroleum Exporting Countries (Opec) and their partners will hold a video conference tomorrow to decide on production levels for next month, hoping to turn the corner on a difficult year. The Opec+ ministerial meeting comes after oil consumption tanked last year due to the Covid-19 pandemic and a price war between Saudi Arabia and Russia. Despite a pick up in prices towards the end of the year, the market levels for oil remain uncertain. After their last summit, from Nov 30 to Dec 3, the Opec+ members agreed to increase production by half a million barrels per day this month. At the meeting, the 13 members of the Opec cartel, led by Saudi Arabia, and their six allies, led by Russia, also agreed to meet at the beginning of each month in order to decide on any adjustments to production volumes for the following month. Russia and Saudi Arabia are, respectively, the second and third biggest oil producers in the world after the United States. The decision illustrates Opec's desire to maintain a strong influence on the oil market, and the gravity of the situation for crude producers last year. Before the pandemic, Opec members were content with...

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Luxurious UK homes used for money laundering

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3 minutes

(BLOOMBERG) - Investors are not the only ones who are snapping up all the best homes in London. The UK property market is increasingly a prime target for money laundering, with London's most expensive homes attracting criminal buyers as a way to hide dirty cash. There is now a high likelihood of buyers using real estate in the United Kingdom to disguise illegal activity, up from a medium risk three years ago, the British government said in a recent report assessing money laundering and terrorist financing last year. The findings also upgraded the risk to the estate agency sector to medium. "It is likely that criminals favour locations with high-value properties such as London, Edinburgh or university towns, with London in particular considered highly desirable for overseas entities to operate a residential or commercial base in," the report said. The Covid-19 pandemic has only made the sector more vulnerable to dirty money, as shaky demand for extravagant homes increases the chances of getting a discount. While criminals may also exploit struggling businesses to obtain real estate sold out of desperation or bankruptcy, residential property is seen as a higher risk than commercial, ...

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Considering managed or index funds

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4 minutes

Mr Christopher Tan's obsession with index funds started more than a decade ago. He liked the funds not only because of their lower costs, but also because he saw that most actively managed funds do not perform better than average returns of the markets. Thus, index funds generally are better placed to outperform actively managed funds. What is an index For instance, The Straits Times Index (STI) comprises 30 constituent stocks with familiar names such as the big local banks, Singapore Airlines and other well-known companies. "If the Singapore stock market goes up, then your fund will go up. If it comes down, your fund will come down. There are many index funds around the world that track different indexes, such as the S&P 500 etc, so in simple terms that's what actually an index fund is all about." What about exchange-traded funds or ETFs? Buying an ETF is akin to buying a listed stock, but in this case, this "stock" is essentially a basket of index stocks. "When you buy one share of the ETF, you actually own a basket of these stocks from the index," Mr Tan explained. "So an ETF is actually a very good way of investing because the costs are even lower than an index fund." How to bu...

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Don’t need CPF Life? Use it for charity

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1 minute

For Singaporeans who have done well in building wealth and have more than enough to last them a lifetime, here is an idea on how you can make use of CPF Life. You can turn it into a gift for charities that will keep on giving for as long as you live. Please subscribe or log in to continue reading the full article. Get unlimited access to all stories at $0.99/month Latest headlines and exclusive stories In-depth analyses and award-winning multimedia content Get access to all with our no-contract promotional package at only $0.99/month for the first 3 months* Subscribe now *Terms and conditions apply.

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Picking the right fund for your money

elean
1 minute

"The number of things that are true for everyone in finance is small; everything else is just figuring out how much risk you want to take and what you want out of life, which is different for everyone," said Mr Morgan Housel, author of The Psychology Of Money. Indeed, everyone's portfolio should be different because we all have different objectives, different investment horizons, different liquidity needs and different risk tolerance, among other things. Please subscribe or log in to continue reading the full article. Get unlimited access to all stories at $0.99/month Latest headlines and exclusive stories In-depth analyses and award-winning multimedia content Get access to all with our no-contract promotional package at only $0.99/month for the first 3 months* Subscribe now *Terms and conditions apply.

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Jobless claims dip in US, but recovery yet to take hold

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4 minutes

WASHINGTON • Fewer Americans sought unemployment benefits last week, but the modest drop did little to dispel concerns that the US job market and wider economy face an arduous recovery from the devastation inflicted by the coronavirus pandemic last year. The final major economic data point for last year, which saw a recession of historic magnitude erupt out of nowhere, stood as a fitting reminder for both how far the recovery has progressed and how much more it has to go. While new claims for benefits reported by the US Labour Department on Thursday dropped for the second week in a row to a seasonally adjusted 787,000 in the week ended Dec 26, from 806,000 a week before, it left them at roughly the level they were three months ago and with little indication they would show material improvement any time soon. The arrival of effective Covid-19 vaccines and additional federal pandemic aid have set the stage for a brighter 2021. But economists agree that the still-raging epidemic and the fractured government response to it mean more hard months ahead before improvement takes hold. "While prospects for the economy later in 2021 are upbeat, the economy and labour market will have to navi...

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MAS will take action if CoAssets unit has breached regulations

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4 minutes

The Monetary Authority of Singapore (MAS) will review and take necessary action if CoAssets' licensed subsidiary - now known as CA Funding - has breached regulations. As a matter of policy, MAS does not disclose its dealings with regulated financial institutions, a spokesman said. MAS added that it is aware that police reports have been lodged against CoAssets. It also clarified that it does not regulate the group, but only the specific entity that is licensed with MAS. Hundreds of CoAssets' retail investors were left reeling early last month when it came to light that the Singapore-based alternative lending platform had transferred US$30 million (S$40 million) of its borrowings to a little-known debt recovery firm, Sunfits, according to a Tech in Asia report. Sunfits wrote in a note to investors that it could not collect on the debt as there is no "visibility" on any of the assets. In a separate e-mail sent on Monday, it was revealed that CA Funding is "currently non-operational and insolvent", with loan recovery "extremely challenging". Aggrieved investors have since filed police reports against CoAssets co-founders Getty Goh, who was the former group chief executive officer, and...

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Lie back, relax, it’s okay to work from bed

elean
6 minutes

NEW YORK • For years, sleep experts have held one piece of common wisdom above all else: that devices have no place in the bedroom. Yet, since the Covid-19 pandemic began in March, millions of Americans have defied that guidance and begun working precisely where they sleep. They are drafting legal documents, producing events, holding client calls, coding, e-mailing, studying and writing, all from under the covers. This was not always the plan. Early on, many of them invested in desks and other equipment meant to make their homes as ergonomically sound and office-like as possible. When New York City shut down in March, Ms Vanessa Anderson, 24, set up a small desk for herself in her living room. She was working for an agency that manages private chefs and wanted to keep some semblance of separation between work and sleep. "For a while I was really committed to not working from my bedroom at all," she said. In May, she moved her desk into her bedroom for more light. "My bed was just sitting there, taunting me." She set ground rules for herself: She would get in bed only after 2pm, but that start time shifted earlier and earlier. Come July, her bed had become her full-time office. Ms A...