Economic data from South Korea, India and Japan

More growth policies deemed necessary for Chinese economy despite rate cuts

China still needs more growth policies to stabilize its economy after the central bank moved unexpectedly to cut its key interest rates, the Financial News, backed by China’s central bank, said on Tuesday.

The People’s Bank of China cut its 1-year policy lending rate by 10 basis points to 2.75% and the 7-day repo rate to 2% from 2.1% on Monday. He defied economists’ expectations that the central bank would act on rate cuts.

Quoting Wen Bin, chief economist of China Minsheng Bank, Financial News said that for the economy to recover further, the rate of increase in infrastructure investment must accelerate, especially as the momentum of recovery slowed.

Wen also said weak domestic demand was a problem for the economy and Beijing should put in place policies that would support economic growth.

Wang Qing, chief macroeconomic analyst at Dongfang Jincheng, was also quoted as saying Beijing would likely strengthen fiscal policies and industrial policies to propel the recovery.

Luo Huanjie, senior macroeconomics researcher at the Zhixin Investment Research Institute, said that in light of possible future pandemic outbreaks, Beijing should prioritize adjusting macroeconomic policies in a bid to further improve the economy.

-Su Lin Tan

China’s interest rate cuts are a modest first step, professor says

The surprise of the People’s Bank of China According to Eswar Prasad, senior professor of international trade policy at Cornell University, interest rate cuts on borrowing costs for medium-term loans are a modest first step.

“The rate cut we’ve seen right now is very modest. Ten basis points isn’t a lot, even if it frees up cash,” he told CNBC’s “Squawk Box Asia” on Tuesday. .

The PBOC cut its one-year medium-term lending facility by 10 basis points to 2.75% on 400 billion yuan ($59.3 billion) in loans to certain financial institutions, according to an announcement on the central bank’s website. It also cut its seven-day repo rate by 10 basis points to 2%.

“It seems like a very small step. But the PBOC is trying to send a very calibrated signal here that they are ready to intervene if the circumstances were justified,” added the professor.

“I think they’re very cautious about triggering any meaningful monetary stimulus because they know it’s going to create medium-term financial risks.”

— Sumathi Bala

Australia to look at competition and consumer issues for social media services

The Australian Competition and Consumer Commission said it would look into competition and consumer issues with social media services such as Facebook, Instagram, Twitter, TikTok and Snapchat.

The ACCC said its report will also consider YouTube, Reddit and Discord.

“We hope to examine trends in user preferences and engagement over time, and examine how users choose social media services,” he said in a statement. The body plans to examine “whether new entrants such as TikTok have changed the competitive landscape”.

On Friday, China released a list of algorithms behind the success of its tech giants, including those from Alibaba and Tencent. The filing also mentions how Douyin, the Chinese version of TikTok, uses this data to recommend content to users.

Jihye Lee

Gas prices continue to climb in the north as Japanese industrialists lag behind

Energy prices will continue to move north amid strong consumption, Skylar Capital Management chief trader and managing director Bill Perkins told Street Signs Asia.

Soaring gas prices have seen countries in the northern hemisphere, including Asian countries like Japan, rush for imports of liquefied natural gas. The Asian benchmark spot price is on an upward trajectory while Japanese industrial stocks are in the red on Tuesday.

“I think these pullbacks with traders taking profits and worries in China about the recession and housing conditions there. Those are worries but they’re exaggerated relative to ongoing macro trends in this cycle.” , did he declare.

Perkins said there will be little letting up in the oil price spike, and he expects the WPI oil price to move north of $100 a barrel and Brent to rise above $120 on barrel.

-Su Lin Tan

British-Australian miner BHP soars after making its second-biggest profit in history

Shares in British-Australian miner BHP soared 3.80% after posting its second-biggest profit in history and a record $16.3 billion dividend.

Its annual results ended June 30 exceeded expectations.

BHP chief executive Mike Henry said BHP enters fiscal year 2023 “strategically, operationally and financially in great shape.”

He also expects China “to emerge as a source of stability for commodity demand over the coming year, with political support gradually taking hold.”

“At the same time, we expect a slowdown in advanced economies as monetary policy tightens, as well as geopolitical uncertainty and persistent inflationary pressures,” he said in a press release. .

“The direct and indirect impacts of the energy crisis in Europe are of particular concern. Tight labor markets will continue to challenge global and local supply chains.”

The situation is reversed for peers Rio Tinto and Fortescue Metals which posted declines.

-Su Lin Tan

US, Japan and South Korea complete missile search and tracking exercise

The Pentagon said the United States Navy, the Japan Maritime Self-Defense Force and the Republic of Korea (ROK) Navy had completed a missile warning and ballistic missile search and tracking exercise at the off the Pacific Missile Range Facility (PMRF) in Hawaii.

U.S., Japanese, and South Korean participants shared tactical datalink information pursuant to a trilateral information-sharing agreement.

“Following the June 11 U.S.-ROK-Japan Trilateral Ministerial Meeting in Singapore, this missile warning and ballistic missile search and tracking exercise demonstrated the commitment of the United States, the Republic of Korea and Japan to strengthen trilateral cooperation to meet the challenges of the DPRK, protecting shared security. and prosperity, and strengthening the rules-based international order,” the Pentagon said in a note.

-Su Lin Tan

Chinese fast-food operator Yum launches main listing in Hong Kong

Chinese fast-food operator Yum China Holdings announced on Monday that it has applied to convert its secondary listing to a primary listing in Hong Kong. It currently has a dual listing on the New York Stock Exchange.

“Since our secondary listing in Hong Kong in 2020, we have improved access to our shareholders in Asia. We have diversified our investor base and tapped into additional pools of capital,” said Joey Wat, CEO of Yum China. , in a press release.

“Dual primary listing would bring us even closer to our employees, customers and other stakeholders. This strategic move would further broaden our universe of shareholders, increase liquidity and mitigate the risk of delisting from the NYSE,” he added.

Yum has exclusive rights to operate fast food brands like KFC, Pizza Hut and Taco Bell brands in China.

-Su Lin Tan

CNBC Pro: Strategist names global stocks to buy despite slowing growth

There are pockets of “compelling value” in three sectors, even in an economic downturn, said Patrick Armstrong, chief investment officer at Plurimi Group.

These sectors are “unbelievably cheap,” he told CNBC’s “Squawk Box Europe,” naming his favorite stocks and explaining why he likes them.

Pro subscribers can read the story here.

—Weizhen Tan

CNBC Pro: Tesla’s Valuation Only Makes Sense When It Hits This Level, Fund Manager Says

Tesla may be one of the best-known electric vehicle makers, but fund manager and tech investor Paul Meeks thinks the stock is still too expensive.

Meeks revealed to CNBC Pro Talks the valuation at which he will find Tesla “more attractive.”

Pro subscribers can read the story here.

Zavier Ong

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