US trade spat needs ‘constructive’ solutions, says China central bank
Spat threatens to knock world economy
NUSA DUA, Indonesia, Oct 14, (Agencies): China’s central bank governor Sunday sought to cool the temperature on a brewing trade-and-currency war with the United States, calling for “constructive solutions” as the spat threatens to knock the world economy.
Speaking on the last day of the IMF-World Bank annual meetings in Bali, Yi Gang warned that the stakes could hardly be higher and cautioned that a clash between the world’s two biggest economies was a “lose-lose” situation.
“Trade tensions...cause negative expectations, negative uncertainties,” the People’s Bank of China head told a seminar with other top central bankers on the Indonesian holiday island. “There are tremendous uncertainties ahead of us. “The whole world should work together to seek constructive solutions,” he added.
Yi said he had spoken to central bank governors and other top officials from a string of nations amid a tit-for-tat US-China tariff battle and Washington’s accusations that China was unfairly pushing down the value of its yuan currency to boost exports.
China’s top central banker vowed Beijing would do its part by getting tougher on domestic copyright violators and opening up the financial services sector.
His comments come a day after the IMF warned that the “window of opportunity” to keep global growth on track was narrowing as the US-China spat threatens to boil over and emerging markets feel the pinch from higher US interest rates.
Tensions have soared recently with President Donald Trump’s administration rolling out billions of dollars in tariffs against China in a bid to tackle its trade deficit and rein in what Washington considers unacceptable Chinese trade practices.
Treasury Secretary Steven Mnuchin earlier downplayed the global concerns expressed at the meetings, saying the world would benefit if Beijing is forced to changes its trade policies.
But he said he had told Yi this week about his concerns over the weakness of its currency.
Mnuchin, speaking earlier on the Bali meeting’s sidelines, declined to comment on whether Washington would declare Beijing a “currency manipulator” in a Treasury report due out next week. That would be a first for China, triggering a process that could lead to punitive steps.
Agreement
Attention has begun to turn toward hopes that Trump and Chinese President Xi Jinping could meet on the sidelines of the G-20 summit next month in Argentina and reach some sort of agreement that would reduce trade tensions.
Gang earlier said the government would continue to let the market play a decisive role in establishing its currency exchange rate, refraining from using it as a weapon, amid an escalating trade war with the United States.
“We will not engage in competitive devaluation, and will not use the exchange rate as a tool to deal with trade frictions,” Yi said in an International Monetary and Financial Committee (IMFC) statement posted on Saturday during the IMF and World Bank annual meetings in Indonesia’s resort island of Bali.
Yi said the government would keep the exchange rate “broadly stable”, and China’s monetary policy would remain neutral with more focus on guiding expectations.
US Treasury Secretary Steven Mnuchin said Chinese officials had told him that further yuan depreciation was not in China’s interest.
Mnuchin has reiterated his concerns that a major drop in the yuan’s value this year against the dollar could be part of an effort to gain a trade advantage for Chinese exports or to offset the impact of US tariffs.
In a separate interview with domestic media published on Saturday, Yi said the central bank did not follow a rate hike by the Fed in September with one of its, as he felt China’s marketbased rate levels were appropriate and the yuan remained steady judging by its performance.
He said decision to stay put was not an easy one, but the benefits of a non-move still trumped the potential setbacks.
KUWAIT CITY, Oct 14: Kuwait stock index dipped below the 5000 pts mark after charting a sluggish course in the previous week. The All Shares Index slid 73.27 points to a broad decline to 4992.54 pts led by heavyweights as regional weakness roiled the sentiment.
The Premier Market dived 97.89 points to 5159.27 pts taking the month’s losses to 183 pts while Main Market dropped 27.98 pts. The volume turnover meanwhile rose past the 100 million mark to hit a 3-week high. Over 103 million shares changed hands – a 27 pct surge from the previous session.
All the sectors closed in red. Telecommunications tumbled 3 pct, the worst performer of the day whereas oil and gas tripped 0.19 pct, the smallest loser of the day. Volume wise, real estate garnered the highest market share of 3.5 pct while banks followed with 27.9 percent.
Zain slid 18 fils to 446 fils with brisk trading taking the month’s losses to 30 fils whereas Ooredoo was down 10 fils at 759 fils. Kuwait Telecommunications Co (VIVA) was unchanged at 718 fils and Agility shed 17 fils before closing at 815 fils.
The market opened firm and drifted lower in early trade. The main index continued to erode amid broad selling led by blue chips and traded sideways past the mid-session. It slipped further in the final hour and closed with hefty losses.
Top gainer of the day, Mena Holding rose 5.88 pct to 27 fils and Mubara scaled 4.3 percent to stand next. Manazel slid 10 pct, the steepest decliner of the day and Al Tijaria topped the volume with over 14 million shares.
Among the prominent losers, sector bellwether National Bank of Kuwait dropped 16 fils to 806 fils after trading over 7 million shares while Boubyan Bank skidded 22 fils. Mabnaee Co fell 3 fils to 612 fils and KIPCO clipped 2 fils before settling at 208 fils
Mirroring the day’s plunge, the market spread was heavily skewed towards the losers. 19 stocks advanced whereas 79 closed lower. Of the 110 counters active on Sunday, 12 closed flat. 4,767 deals worth KD 25.98 million were transacted – a 44.9 percent surge in value from the day before.
National Industries Group slipped 5 fils to 151 fils with a volume of 2.6 million and Mezzan Holding was down 8 fils at 640 fils. Boubyan Petrochemical Co dropped 7 fils to KD 1.033 and Al Qurain Petrochemical Co gave up 4 fils before settling at 386 fils.
Jazeera Airways fell 5 fils to 740 fils and ALAFCO added 11 fils. Jazeera’s second quarter earnings dropped 23.6 pct to KD 1.8 million whereas operating revenues jumped 43.3 pct to KD 20.1 million.
Kuwait Portland Cement fell 3 fils to KD 1.056 and Kuwait Cement Co shed 5 fils. Heavy Engineering Industries and Shipbuilding Co dipped 15 fils to 468 fils and Equipment Holding inched 0.1 fil into green. Educational Holding Co paused at 310 fils whereas Gulf Cable gave up 10 fils.
Combined Group Contracting Co dialed up 1 fil and UPAC climbed 8 fils to 658 fils with razor thin trading. KCPC slipped 8 fils to 230 fils and Independent Petroleum Group trimmed 1 fil. Inovest eased 1 fil to 83 fils.
Kuwait and Gulf Link Transport Co
dipped 5.9 fils to 94.1 fils and KGL Logistics ticked 0.3 fil into red. Al Rai Media Group took in 0.7 fil and Ithmaar tripped 1 fil. ACICO Industries was down 4 fils at 201 fils.
In the banking sector, Kuwait Finance House dropped 6 fils to 582 fils after trading 3.8 million shares and is down 15 fils so far during the month while Gulf Bank closed 3 fils into red. Kuwait International Bank clipped 2 fils while Warba Bank and Ahli United Bank gave up 3 fils each.
Burgan Bank dialed up 1 fil on back of 4.3 million shares and Al Ahli Bank tripped 1 fil. Al Mutahed stood pat at 290 fils whereas Commercial bank was not traded during the session.
National Investment Co fell 3 fils to 73 fils while International Financial Advisors and Coast Investment Co trimmed 0.1 fil each to end at 21.1 fils and 30 fils respectively. Kuwait Investment Co and Kuwait Financial Centre clipped 1 fil each whereas
KAMCO dropped 6 fils and Al Aman slipped 2.3 fils to 48.9 fils. Arzan
clipped 2.1 fils and Al Imtiaz gave up 2 fils. Amwal shed 4.2 fils and Al Madina trimmed 0.5 fil. Noor Financial Investment Co edged 0.9 fil higher to 51.9 fils.
Securities House edged 0.7 fil into red whereas Unicap and Al Deera Holding paused at 59.4 fils and 16.9 fils respectively. Al Mal Investment ticked 0.1 fil higher and International Financial Advisors eased 0.1 fil.
Kuwait Real Estate fell 0.5 fil to 44.5 fils and National Real Estate gave up 3.2 fils. Salhiya Real Estate tripped 1 fils and Mazaya Holding ticked 0.5 fil into green. KMEFIC fell 1.5 fils to 27 fils and KFIC gave up 1.4 fils before settling at 46.5 fils.
The market was downbeat during last week. The main index closed lower in four of the five sessions shedding 45 points week-on-week and has skidded 135 points from start of the month. Boursa Kuwait, with 176 listed stocks, is the second largest market in the region.