Laws to attract FDI have changed
For countries to be able to attract FDI, especially in a globalised world, it is critical to have a vibrant, diverse economy with an infrastructure that allows it to be connected locally, regionally and, most importantly, globally |
Hopes for a thaw in United States-China trade ties at the upcoming G20 summit in Buenos Aires, Argentina, helped world shares inch to a one-week high yesterday, though fears of a no-deal outcome weighed on European bourses and kept the dollar firm for the fourth day in a row.
While US President Donald Trump talked tough on the trade tariffs issue ahead of a meeting with Chinese President Xi Jinping on Saturday, markets focused on comments by White House economic adviser Larry Kudlow, who held open the possibility that the two countries would reach a trade deal. A rapprochement is seen as crucial, given that world growth and trade are already showing signs of an alarming slowdown.
Kudlow’s comments allowed Chinese and Japanese shares to rally 1 per cent while MSCI’s all-country equity index was up 0.15 per cent and the panEuropean benchmark rose 0.2 per cent. Futures indicated a firm opening on Wall Street, with the S&P500, Nasdaq and Dow Jones tipped to rise between 0.3-0.5 per cent.
There was some caution, however, especially in Europe, which was hit on Tuesday by a report that Trump may soon decide on new taxes on imported cars. Europe’s auto sector shares were 0.3 per cent in the red. “An expectation is being priced into markets ahead of the G20 meeting that we will see some deal or at least a framework for a deal between Trump and Xi Jinping,” said Bernd Berg, global macro strategist at Swiss-based Woodman Asset Management.
The uncertainty over global trade as well as Brexit and Italy’s conflict with the European Union, are supporting the US dollar, which is at a two-week ■ high against a basket of currencies. While the main driver for the greenback is the US interest rate path, Rodrigo Catril, senior strategist at National Australia Bank, said it was also benefiting from the uncertain mood. “Markets seem to be jumping at shadows at the moment and against this backdrop of uncertainty, the dollar remains the preferred option for weathering the storm,” Catril said.
With the currency index approaching 1-1/2-year highs reached earlier this month, traders were focusing on a speech at 1700 GMT (9pm, UAE time) yesterday
However most reckon the Fed is on track to tighten policy next month and early-2019 at least.
Meanwhile, sterling climbed off two-week lows to rise 0.4 per cent by 12.15 GMT yesterday, having touched a session-high of $1.2806 after the opposition’s main finance spokesman John McDonnell said he could accept a second Brexit referendum. Investors are also monitoring developments in Italy’s row with the EU over its budget spending.