Archives of “Geography of Asia” tag

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Saudi sovereign wealth fund has bought a big stake Boeing

  
  Analysis
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Saudi Arabia’s $300 billion sovereign-wealth fund has invested further into US corporations.

Q1 figures from the Public Investment Fund show fresh stakes taken in:
  • Facebook, Disney , Marriott, Cisco Systems, Citigroup, Bank of America, & Boeing
(and others). The stake in Boeing was circa $714 million.
With oil prices weaker Saudi is accelerating diversification, buying in during Q1:
  • “We actively seek strategic opportunities both in Saudi Arabia and globally that have strong potential to generate significant long-term returns while further benefiting the people of Saudi Arabia and driving the country’s economic growth” 
From filings with the US SEC, via a WSJ report, link is here for more (the Journal may be gated)
Saudi Arabia's $300 billion sovereign-wealth fund buys Boeing

Trump/Saudi Arabia’s king agreed on importance of stability in global energy

  
  Analysis
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Trump, Saudi Arabia King speak: White House

A White House spokesman is out saying that
  • Pres. Trump and Saudi Arabia’s king in a conversation agreed on importance of stability in global energy markets
  • The leaders reaffirmed strong US – Saudi defense partnership
The tumble in crude oil prices has had to strong catalysts. One was Saudi Arabia flooding the market with supply after failing to reach an agreement with Russia on production cuts. The next was the impact from the global coronavirus. 1 influenced supply in a bearish way. The other influenced demand in a bearish way.
The price of WTI crude oil futures for the July contract is trading up $1.16 or 4.67% at just below’s $26 a barrel. Brent crude oil prices moved above the 30 level today after rising $1.38 to $30.84.

Saudi Arabia’s sovereign-wealth fund pours $1bn into stakes in 4 European oil firms

  
  Analysis
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WSJ citing “according to people familiar with the matter“
  • Saudi Arabia’s sovereign-wealth fund has amassed stakes worth roughly $1 billion in four major European oil companies
  • buying assets it perceives as undervalued in a market depressed by the coronavirus pandemic and low oil prices
  • stakes in Equinor AS A, Royal Dutch Shell PLC, Total SA and Eni SpA
  • bought in recent weeks
  • the fund may continue to make stock purchases
That “buying assets it perceives as undervalued in a market depressed by the coronavirus pandemic and low oil prices“. You might recall from a few weeks ago OPEC+ failed to agree on maintaining output cuts and Saudi Arabia ramping production higher and thus sending the price of oil plummeting. The cynical amongst us might even suggest this was all part of a plan?

North Korea appears to have fired another missile – has not landed in Japan’s EEZ

  
Analysis, Politics
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The Japanese Coast Guard says the unidentified projectile appears not to have land inside Japan’s economic zone.

  • missile has landed in the East Sea
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“EEZ” is exclusive economic zone
a sea zone prescribed by the 1982 United Nations Convention on the Law of the Sea
Japans EEZ is in debate, but its approx. the area in the darker blue area in the map below
The Japanese Coast Guard says the unidentified projectile appears not to have land inside Japan's economic zone.

Saudi Arabia energy minister: WSJ story on cuts of output is “absurd and utter nonsense”

  
Analysis, Crude
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WSJ report suggested a potential 300K cut.

Saudi Arabia’s energy minister Prince Abdulaziz is on the wires in reaction to an earlier Wall Street Journal article saying that they were mulling over a proposed 300K cut in output, says:
  • Media report on Saudi Arabia considering break from OPEC+ alliance “absurd and utter nonsense”
  • We will continue to act in a collective manner
  • Saudi Arabia is in continuous communication and dialogue with all  OPEC and OPEC+ partners
Crude oil futures are currently trading down $0.94 or -1.73% at $52.93. The low for the day reached $52.55. The high for the day was up at $53.86

Coronavirus – China’s Global Times says “actual number of overall infections … unknown”

  
  Analysis
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Here is a piece ion China’s GT on what is going in Wuhan, the centre of the virus outbreak:

  • Wuhan was still confronted with a severe situation with slow progress. 
  • The actual number of overall infections in the city where the virus originated in December 2019 remained unknown; the number of reported cases in the city accounting for a large portion of total infections in China. 
  • And despite over three weeks of city lockdown, the human-to-human transmission still continued and many patients could still not be treated in time, according to medical experts and observers.
  • It’s time to sound horns for a full-scale mobilization of Wuhan people, 
Link here for more
Here is a piece ion China's GT on what is going in Wuhan, the centre of the virus outbreak:

OPEC+ said to be discussing deepening current oil output cuts at least until June

  
  Analysis
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Reuters reports, citing two unnamed sources on the matter

Says that OPEC+ is discussing to deepen the current set of output cuts by at least 0.4 mil bpd until June next year as Saudi Arabia is keen to surprise the market to the upside before the Saudi Aramco IPO.

China: Trade war began with tariffs, it should end by the US removing them

  
  Analysis
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Comments by the Chinese foreign ministry

  • China, US in thorough talks on “Phase One” deal
  • Level of tariff cuts should reflect significance of the first deal
I reckon you can sort of get the sense that both sides are still yet to land on some firm common ground with regards to this deal.
Markets aren’t reading much into the comments here but the remark on the degree of tariffs cancellation reflecting the importance of the “Phase One” deal reads badly in my mind.
China wants the US to commit to removing more tariffs over time and the US won’t budge on that because they risk giving up too much leverage.
Meanwhile, the US wants China to firmly detail their commitments on agricultural purchases and more structural issues but China isn’t willing to do so either.

Singapore loosens monetary policy for first time in 3.5 years

  
Analysis, Economy
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Singapore has moved to loosen its monetary policy for the first time in three-and-a-half years to help offset slowing economic momentum due to prolonged U.S.-China trade tensions.

As a small, heavily trade-dependent economy, the country has been heavily exposed to the tariff battle between two of its largest trading partners. Exports have been falling at a double-digit pace from last year’s levels.

The Monetary Authority of Singapore, the central bank, said in its semiannual policy statement Monday that it would slightly decrease the slope of the Singapore dollar’s exchange policy band, a move to guide a weaker appreciation of the local currency.

The nation’s monetary policy is based on its exchange rate whereby the Singapore dollar is managed against a basket of currencies representing the country’s major trading partners.

With this move, Singapore follows regional peers such as Indonesia, the Philippines and India, all of which have eased monetary policy by cutting interest rates in recent months.

Singapore’s adjustment comes as trade-related industries stagnate under pressure from the U.S.-China standoff, though economists say domestically focused sectors have held up better. (more…)

Saudi Arabia’s head says attacks on oil facilities were an act of war by Iran

  
Analysis, Politics
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Saudi Arabia’s Crown prince in an interview on US TV

  • Said oil prices could spike to “unimaginably high numbers” if the world does not come together to deter Iran
  • said he would prefer a political solution to a military one
  • agreed with U.S. Secretary of State Mike Pompeo that the attacks were an act of war by Iran
  • a war between Saudi Arabia and Iran would collapse the global economy
US Sunday evening futures trade in oil is open, a little higher to begin the week.
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