Renault opens first China factory

[WUHAN, China] French car giant Renault opened its first car factory in China on Monday, the last major manufacturer to set up a plant in the country as it looks to tap into the world's biggest auto market. 

PHOTO: BLOOMBERG

FEB 1, 20161:26 PM

[WUHAN, China] French car giant Renault opened its first car factory in China on Monday, the last major manufacturer to set up a plant in the country as it looks to tap into the world's biggest auto market.

The factory in Wuhan, a carmaking hub in the central province of Hubei, is a joint venture with Chinese manufacturer Dongfeng and will be able to produce 150,000 vehicles a year at full capacity.

China remains "a growth driver for the global auto industry", Renault CEO Carlos Ghosn said at the inauguration.

The factory was a "first big step" for the development of the Dongfeng-Renault joint venture and for the growth of Renault, he added.

China is crucial to foreign auto makers, both as the world's largest market and a key source of revenue outside Europe and the United States, but until now, the French firm has largely left it to its Japanese alliance partner Nissan.

At first the Wuhan factory will build Kadjars, Renault's latest crossover model, a key sector for Chinese consumers.

"We see this niche exploding in China, and it's not going to stop," said Jacques Daniel, CEO of the joint venture. "We're arriving late, but with the right product." But he acknowledged that the current situation in China is challenging. Sales grew at their slowest pace in three years in 2015, as a slowing economy and a stock market rout slammed into demand.

A total of 24.60 million cars were sold in 2015, according to the China Association of Automobile Manufacturers (CAAM) up 4.7 per cent on the previous year, but only about a third of the near-14-per cent growth seen in 2013.

Also, the economy, the world's second largest, grew 6.9 per cent in 2015, its slowest pace in 25 years.

Car makers responded by slashing prices while some even cut production.

The market for high-priced luxury cars has been hit by a government crackdown on corruption and an austerity campaign, launched after President Xi Jinping took office three years ago.

The Chinese industry group forecasts sales will still gain around six percent to top 26 million units this year.

US auto giant General Motors was the top foreign brand in China last year, delivering a record 3.61 million vehicles, to beat German rival Volkswagen which is struggling with a global scandal over emissions cheating.

AFP

    
 

Singapore shares open higher on Monday after Japan's surprise stimulus

By

Lee Meixianleemx@sph.com.sg@LeeMeixianBT

FEB 1, 20169:22 AM

SINGAPORE share prices opened 0.37 per cent higher on Monday, with the Straits Times Index (STI) up 9.61 points to 2,638.72 at 9.01am.

It took cue from US markets on Friday and Asian markets on Monday, which rose after the Bank of Japan on Friday adopted a below-zero interest rate policy, essentially charging lenders to park their cash with it.

US stocks jumped 2.5 per cent on Friday, joining a global rally after Japan's surprise stimulus. The Dow Jones Industrial Average gained 396.66 points (2.47 per cent) at 16,466.30. The broad-based S&P 500 advanced 46.88 (2.48 per cent) to 1,940.24, while the tech-rich Nasdaq Composite Index rose 107.28 (2.38 per cent) to 4,613.95.

In Asia, Tokyo stocks opened sharply higher on Monday, as exporters were lifted by a weaker yen and investors reacted positively to last week's surprise interest rate cut.

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The benchmark Nikkei 225 index at the Tokyo Stock Exchange advanced 1.03 per cent, or 181.30 points, to 17,699.60 in opening deals, while the broader Topix index of all first-section shares gained 1.12 per cent, or 15.97 points, to 1,448.04.

On Monday morning, among the most active counters on Singapore's bourse were Noble (up 4.8 per cent to S$0.325), Singtel (up 0.3 per cent to S$3.52), and Thai Beverage (flat at S$0.68).

Last week, global investment firm Franklin Templeton became a substantial shareholder of Noble after picking up its shares on the cheap. The fund manager on Wednesday bought 2.5 million shares for S$712,500, or 28.5 cents a share, through the market. This brings its stake in the company to 5.03 per cent, up from 4.99 per cent, previously.

It was also announced last week that Thai Beverage has used its Singapore-listed unit Fraser and Neave (F&N) to bid for London-headquartered SABMiller's Peroni and Grolsch beer brands. The deal could be worth up to three billion euros (S$4.6 billion).

Overall on the stock market, 69.5 million shares worth S$96.6 million changed hands, with gainers outnumbering losers 118 to 44 at 9.01am.

    
 

Japan boost lifts Asia but Shanghai, Hong Kong hit by China data

PHOTO: BLOOMBERG

FEB 1, 201611:35 AM

[HONG KONG] Shanghai and Hong Kong stocks fell Monday after a gauge of Chinese factory activity hit a more than three-year low in January, but most other Asian markets remained buoyed by Japan's decision last week to slash interest rates to negative.

In another example of weakness in China's economy, the official Purchasing Managers Index (PMI) showed the country's key manufacturing sector shrank for the sixth straight month and was now at its weakest since August 2012.

The news follows a string of data indicating that the once-mighty growth rates in the Asian giant are well in the past.

"The manufacturing sector will likely face a tough year ahead on the back of overcapacity, weakening global demand, and the government's plans to tackle pollution," ANZ economists Liu Ligang and Louis Lam said in a report.

Worries about the slowdown in the world's second biggest economy - and its leaders handling of it - were among the key reasons for a rout across global markets in January that wiped trillions of dollars off valuations.

"Headwinds on traditional manufacturers are clearly increasing rather than fading," Chen Xingdong, chief China economist at BNP Paribas SA in Beijing, told Bloomberg News. "The economy is still weakening."

In early trade Shanghai stocks were down 0.4 per cent and Hong Kong lost 0.1 per cent.

However, Tokyo led most other equities markets higher as the euphoria continued after Friday's shock announcement from the Bank of Japan that it would effectively start charging lenders to park their cash with it.

The move - intended to ramp up lending to people and businesses in order to kickstart the economy and fend off deflation - spurred a rally across world markets and sent the yen tumbling.

The Nikkei index was up 1.8 per cent by lunch while Sydney gained more than one percent and Seoul added 0.2 per cent. There were also gains in Wellington, Taipei and Singapore.

The announcement came as central banks from Asia to the Americas look to support world markets after they took a beating last month. Last month the European Central Bank indicated it was ready to ease monetary policy further in March, while the Federal Reserve held off another interest rate hike last week.

Data showing growth in the US economy slowed sharply in October-December and further reduced the chances the Fed will hike rates anytime soon.

On oil markets US benchmark West Texas Intermediate fell two per cent and Brent lost 1.9 per cent after enjoying a four-day rally at the end of last week, fanned by hopes of talks between the Opec producers' club and Russia on cutting output.

The black gold picked up recently after sinking to more than 12-year lows owing to a perfect storm of overproduction, weak demand, a slowing global economy and a strong dollar.

"Oil has stopped its bullish momentum and most of the reason comes from the relatively strong dollar on light of Japan's surprising negative interest rate decision," said Phillip Futures analyst Daniel Ang.

AFP

    
 

Oil prices halt rise in Asian trade

FEB 1, 201610:58 AM

[SINGAPORE] Oil prices halted their rise in Asia Monday, hurt by the strengthening US currency which makes the dollar-price commodity more expensive.

The greenback rose after Japan's central bank shocked markets Friday with a decision to adopt a below-zero interest rate policy in a bid to spur bank lending and drive up inflation.

Bank of Japan chief Haruhiko Kuroda cited recent financial market turmoil and a China slowdown for ushering in a -0.1 per cent rate on new reserves, and said the bank may go even further into negative territory.

By 0240 GMT, US benchmark West Texas Intermediate for delivery in March was down 49 cents, or 1.46 per cent, to US$33.13.

Brent crude for April, a new contract, was trading 53 cents, or 1.47 per cent, lower at US$35.46 a barrel.

The March contract ended on Friday under a revised scheme in which Brent now expires at the end of each month instead of every 15th.

"Oil has stopped its bullish momentum and most of the reason comes from the relatively strong dollar on light of Japan's surprising negative interest rate decision," said Phillip Futures analyst Daniel Ang.

As oil is traded in dollars, a rise in the greenback will make crude more expensive for holders of weaker units, dampening demand and hurting prices.

Oil prices closed higher last week to end a turbulent January in which prices plunged to 12-year lows in the face of a global oversupply.

Speculation that Russia and the Organization of the Petroleum Exporting Countries will meet to discuss oil output cuts to push up prices supported sentiment last week.

The news, however, drew skepticism that such a meeting or agreement would take place, limiting its impact.

Ang said crude supply glut is likely to continue limiting any oil price gains.

"I don't think oil prices will continue rising without changes in fundamentals," he told AFP.

AFP

    
 

Singapore developers' sentiment weakened further in Q4 2015: survey

By

Lee Meixianleemx@sph.com.sg@LeeMeixianBT

Developers' sentiment weakened further in Q4 2015, according to the results of the NUS-Redas Real Estate Sentiment Index survey. 

SPH

FEB 1, 20168:17 AM

DEVELOPERS' sentiment weakened further in Q4 2015, according to the results of the NUS-Redas Real Estate Sentiment Index (RESI) survey.

The Current Sentiment Index fell to 3.6 from 3.7 in Q3 2015, while the Future Sentiment Index fell to 3.4 from 3.7 in Q3 2015.

A score under five indicates deteriorating market conditions, while scores above five indicate improving conditions.

The three sectors with the lowest net balance scores in Q4 2015 were the office, suburban residential and prime retail sectors.

The office sector was the worst performing one with a current net balance of -43 per cent and a future net balance of -67 per cent.

The net balance is the difference between the proportion of respondents who selected positive sentiments, and the proportion who selected negative options.

Nine in 10 of the respondents anticipate a slowing down in the global economy, and three in four expect that rises in inflation and interest rates will adversely impact market sentiment in the next six months.

More than six in 10 indicate that the property market will face further tightening in terms of finance and liquidity, while seven in 10 of the developers expect new launches to increase moderately and hold at the same level in the next six months.

One fifth indicated that they will launch moderately fewer units - 20 per cent more than the respondents who said so in the last quarter.

On price changes, six in 10 of the developers anticipate a moderate decrease in residential property prices in the next six months.

On translational effects to the stock market, 54.1 per cent of the respondents felt that there will be moderate impact on Reit (real estate investment trust) stock performance, especially with the recent interest rate hike by the US Federal Reserve.

But the impact on land bidding prices is expected to be minimal. About six in 10 of the respondents felt that the H1 2016 Government Land Sales (GLS) programme will have minimal impact on the demand in residential and commercial property sectors. Over half have indicated it will have moderate impact over the competitiveness in the GLS land bidding.

    
 

Chinese airline passengers to start transiting Taiwan

      

FEB 1, 201612:53 PM

[TAIPEI] Chinese passengers will be able to transit through Taiwan and fly onwards to a third destination starting on Monday, signalling a step toward greater transportation links between the two political enemies.

The plan had been discussed for years and China announced early last month it would start the transit programme with three trial cities in China.

The move came just before national elections in Taiwan swept in the independence-leaning Democratic Progressive Party, which is seen as less friendly toward Beijing.

Taiwan has been self-ruled since 1949 when the defeated Nationalists fled to the island after a civil war with the Chinese Communists. Beijing deems Taiwan a wayward province to be taken by force if necessary, especially if it makes moves toward independence.

Taiwan's China-friendly ruling Nationalist government, which steps down in May, supported the transit plan as a way to deepen ties between the two sides.

Allowing Chinese passengers flying from China to transit in Taiwan benefits the development of the civil aviation industry and deepens exchanges between Taiwan and China, the island's quasi-governmental Straits Exchange Foundation said in a statement Monday.

Taiwan's state news agency reported that the first Chinese air travellers would stop over on Monday evening from Kunming, Yunnan province, before taking a flight to the United States.

China in early January said passengers from the Chinese cities of Nanchang, Kunming and Chongqing would be allowed to transit through Taiwan's main international airport.

The transit passengers will not be able to leave the airport and must have valid onward travel documents, according to the transit regulations.

REUTERS