Asia: Headlines
Asia stocks extend rally as economic recovery hopes boost confidence
SYDNEY (Reuters) – Asian stocks rallied for their ninth straight day on Tuesday and oil prices jumped as the lifting of coronavirus lockdowns in many countries fed investor hopes of a relatively quick global economic recovery.
Markets have been particularly encouraged by a May U.S. jobs report last week that showed a surprise fall in the unemployment rate, sending Wall Street indices surging with the Nasdaq .IXIC hitting a record close on Monday.
Global financial markets were battered in March as investors fretted over extent of both the short and longer term damage to the world economy from the coronavirus pandemic. But most indices are now back to pre-COVID-19 levels.
MSCI’s broadest index of Asia-Pacific shares outside of Japan .MIAPJ0000PUS rose for a ninth straight session for its longest winning streak since early 2018. It was last up 0.76% at a three-month peak.
Australia’s S&P/ASX 200 jumped 2.5% while Chinese shares started on a firm footing with the blue-chip CSI300 index .CSI300 rising 0.4%. Hong Kong’s Hang Seng index .HSI climbed 1.2%.
Japan’s Nikkei .N225 bucked the trend to be down 0.5%.
Full coverage: Reuters
South Korea to push for conclusion of RCEP this year despite pandemic
SEOUL, June 9 — South Korea said Tuesday it will spare no efforts to conclude a mega Asia-Pacific trade pact by the end of this year in line with efforts to revitalise an extended slump in its exports amid the new coronavirus pandemic.
South Korea plans to take part in an inter-sessional virtual meeting of other participants of the Regional Comprehensive Economic Partnership (RCEP) from Wednesday to Thursday to flesh out more details, reports Yonhap news agency, according to the Ministry of Trade, Industry, and Energy.
“The RCEP is expected to play a key role in rekindling trade and investment activities of the bloc, which has been hurt by the COVID-19 pandemic,” the ministry said in a statement.
The deal will also help members to brace for changes in the global value chain in the post-pandemic era, the ministry said, highlighting South Korea will spare no efforts to have the agreement concluded this year.
ASEAN and its dialogue partners – South Korea, China, Japan, Australia and New Zealand – effectively reached an agreement on RCEP in November, with the goal of signing the pact within this year.
The agreement came after the participating nations launched their talks in 2013 on a deal that would create a mega economic bloc accounting for one-third of the world’s gross domestic product.
Full coverage: Bernama
Satellite images of Wuhan may suggest coronavirus was spreading as early as August
(CNN)Satellite images of hospital parking lots in Wuhan as well as internet search trends, show the coronavirus may have been spreading in China as early as last August, according to a new study from Harvard Medical School.
The study, which has not yet been peer-viewed, found a significantly higher number of cars in parking lots at five Wuhan hospitals in the late summer and fall of 2019 compared to a year earlier; and an uptick in searches of keywords associated with an infectious disease on China’s Baidu search engine.
Researchers saw “a steep increase in volume starting in August 2019 and culminating with a peak in December 2019,” the team, led by Boston Children’s Hospital chief innovation officer John Brownstein, wrote in a preprint posted on Harvard’s DASH server.
Using images from October 2018, the researchers counted 171 cars in the parking lots at one of Wuhan’s largest hospitals, Tianyou Hospital. Satellite data a year later showed 285 vehicles in the same lots, an increase of 67%, and as much as a 90% increase in traffic during the same time period at other Wuhan hospitals.
“Individual hospitals have days of high relative volume in both fall and winter 2019. However, between September and October 2019, five of the six hospitals show their highest relative daily volume of the analyzed series, coinciding with elevated levels of Baidu search queries for the terms ‘diarrhea’ and ‘cough’,” they wrote.
“This is all about trying to piece together a complicated puzzle of what was taking place at the time,” Brownstein told CNN.
Full coverage: CNN
China lets yuan drop to five-month low on US tensions, uncertain global economic outlook
China is tolerating a gradual weakening of the yuan’s value against a basket of major currencies because of a worsening political confrontation with the United States and a challenging economic outlook, analysts said.
Beijing could also allow the yuan to weaken against the US dollar if the Trump administration imposes severe sanctions on China for moving ahead with a new security law in Hong Kong.
The yuan fell to 7.1778 against the US dollar at the end of May, near the rate it was trading at in September, which was the weakest level in 11 years, before subsequently rebounding. As of Tuesday, it had strengthened to trade at 7.0750 against the US dollar.
But against the RMB index, which is made up of a weighted basket of currencies from China’s major trading partners, the yuan has declined for 16 straight trading sessions to 91.69, its lowest level in five months, down from this year’s peak of 95.7.
The decline in the currency suggests that the People’s Bank of China (PBOC) is tolerating a weaker yuan against its trade-weighted basket to support its exporters and economy as economic friction with the US escalates, analysts said.
A weaker yuan against a particular currency makes Chinese exports more affordable for foreign buyers in that country, which helps support growth at home.
Full coverage: South China Morning Post
Chinese telecom firms urge FCC not to revoke ability to operate in U.S.
WASHINGTON (Reuters) – The U.S. units of China Telecom Corp’s 728.HK and China Unicom (0762.HK) urged the Federal Communications Commission (FCC) not to revoke the company’s nearly two-decade old authorization to provide international telecommunications services to and from the United States.
China Telecom (America)’s filing late Monday came after the U.S. Justice Department and other federal agencies in April asked the FCC to act, citing national security concerns in a new flashpoint between Washington and Beijing.
China Telecom (Americas), the U.S. subsidiary of a People’s Republic of China (PRC) state-owned telecommunications company, called the government’s claims “unfounded” and argued the FCC should not revoke its right to operate in the United States “based solely on foreign policy concerns in the absence of any evidence whatsoever of specific misconduct.”
It added the company’s “conduct to date does not demonstrate any reasonable basis for the U.S. government’s stated lack of trust.”
The Justice Department, along with Homeland Security, Defense, State and Commerce Departments, in April cited “substantial and unacceptable national security and law enforcement risks associated with China Telecom’s operations.”
In April, the FCC issued show-cause orders warning it might shut down the U.S. operations of three state-controlled Chinese telecommunications companies: China Telecom, China Unicom and Pacific Networks Corp and its subsidiary ComNet (USA).
Full Coverage: Reuters
Hong Kong government to bail out Cathay Pacific with HK$30 billion in loan and direct stake
Cathay Pacific will undergo a HK$40 billion (US$5.2 billion) capital restructuring exercise as the Hong Kong government takes the lead in a bailout package worth nearly HK$30 billion in loans and an undisclosed stake, lending its full backing for the city to remain the region’s aviation hub.
It is the first time the government has directly injected money into a private company.
Hong Kong’s flag carrier will issue new shares as part of the plan which will see the authorities taking up two “observer” boardroom seats in an unprecedented shake-up that will empower it to have a direct say in how the airline is run, sources have told the Post.
Emerging as a “white knight”, the government will offer a loan to be paid back in the future and, more controversially, it will take a stake in the airline without seeking full boardroom status. Instead, it will have the “two observers” on the board, industry sources revealed.
Trading was suspended on Tuesday morning while the city’s leader, Carrie Lam Cheng Yuet-ngor, met with the Executive Council, her de facto cabinet, to get final approval of a package that is expected to be announced later on Tuesday.
Cathay Pacific is now majority-owned by the Swire Group with a 45 per cent stake, and Air China with 29.99 per cent. The restructuring is well above the airline’s market capitalisation which stands at HK$34.6 billion.
Full coverage: South China Morning Post
