Asia First - Mon 9 Jun 2025
02:25:09 Min
From the opening bell across markets in Southeast Asia and China, to the biggest business interviews and top financial stories, tune in to Asia First to kick-start your business day.
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Business Times
an hour ago
- Business Times
Europe: Stocks flat as investors await outcome of US-China talks
EUROPEAN shares closed little changed on Tuesday in cautious trade as investors awaited the outcome of the second day of US-China trade talks in London. The continent-wide Stoxx 600 index closed unchanged for the second straight day at 553.12 points. The two-day London meeting between the world's two economic powerhouses was still ongoing, a US Treasury spokesperson said, while a separate US official had said the two sides had ended direct talks. While President Donald Trump's upbeat comments on Monday about the talks had offered some hope the two countries would defuse their bitter trade dispute, the silence about any progress kept a lid on any breakout in stock markets. Any positive breakthrough in the negotiations is likely to provide relief to markets given that Trump's erratic tariff policies and the volatility of Sino-US relations have already scarred both economies, dented supply chains, and cast a shadow over global growth projections. 'There's a lack of clarity on what an actual deal could be,' said Laura Cooper, head of macro credit and investment strategist at Nuveen. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up 'Until we see a substantial trade deal emerge, attention will be on the end of that 90-day pause and its implications if there isn't a deal in place.' The two countries are trying to revive a temporary truce reached in Geneva that had briefly lowered trade tensions and calmed markets. In European stocks, the financials index, shed 1.4 per cent, led by a near 5 per cent drop in UBS on investor concern that Swiss government proposals could shackle the bank with an additional US$26 billion capital mandate. Defence stocks also retreated to an over one-week low. Conversely, energy stocks were the stand-out performer, boosted by higher oil prices. The healthcare sector advanced 1.2 per cent, led by Novo Nordisk, which gained about 6 per cent following a Financial Times report that activist hedge fund Parvus Asset Management was building a stake in the drugmaker. Vaccine makers such as AstraZeneca and Sanofi also climbed, despite the US health secretary dismantling the US Centres for Disease Control and Prevention's vaccine advisory committee. London's FTSE 100 flirted with a record high earlier in the session after fresh data revealed a sharp deceleration in British pay growth through April, coupled with unemployment hitting a four-year peak - strengthening the case for an interest rate cut by the Bank of England. Attention is also on a slew of key economic indicators from the region as well as the US, due through the week. 'With US CPI data due on Wednesday, the mood could remain cautious,' said Fiona Cincotta, senior market analyst at City Index. Among other stocks, Bellway jumped 7.8 per cent after the British homebuilder raised its forecast for full-year volume production. Shares of Aberdeen gained 6.3 per cent after JPMorgan upgraded the fund manager's stock to 'overweight' from 'neutral'. REUTERS
Business Times
an hour ago
- Business Times
US: Stocks advance as China trade talks drag on
[NEW YORK] Wall Street stocks advanced on Tuesday as markets hoped for progress in US-China trade talks while digesting the World Bank's lowered economic growth forecast. A second day of high-level talks between the United States and China in London stretched into the evening on Tuesday without any concrete announcement. FHN Financial's Chris Low pointed to upbeat comments from Commerce Secretary Howard Lutnick, while also noting that 'there was a TikTok channel associated with Chinese television suggesting that there are still some significant differences between the two sides.' The Dow Jones Industrial Average finished up 0.3 per cent at 42,866.87. The broad-based S&P 500 climbed 0.6 per cent to 6,038.81, while the tech-rich Nasdaq Composite Index also gained 0.6 per cent to 19,715.00. The negotiations aim to keep the world's biggest two economies on course for an accord after each side earlier this spring imposed draconian tariffs on each other. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up Citing trade tensions and the resulting policy uncertainty, the World Bank lowered its 2025 projection for global GDP growth to 2.3 per cent in its latest economic prospects report, down from 2.7 per cent expected in January. Global growth and inflation prospects for this year and next have worsened because of 'high levels of policy uncertainty and this growing fragmentation of trade relations,' said World Bank Group chief economist Indermit Gill. 'Without a swift course correction, the harm to living standards could be deep,' Gill added. Investors will get a fresh reading on US inflation Wednesday with release of consumer price index data. Among individual companies, Disney rose 2.7 per cent after disclosing that it reached an agreement on the pricing of NBC Universal's 33 per cent stake in Hulu, resolving a years-long appraisal process. Disney will pay an additional US$438.7 million for the stake. The transaction is expected to close on or before July 24. Tesla shot up 5.7 per cent on anticipation of the company's upcoming launch of self-driving vehicles in Texas. The electric vehicle company teased the introduction on Musk's X social media platform. Chip giant Intel surged 8.0 per cent on optimism about the company's new technology. AFP
CNA
an hour ago
- CNA
Commentary: Record profits for SIA and other airlines, but aviation's long-term outlook isn't that rosy
SINGAPORE: From three years of losses during the pandemic to three consecutive years of record profits, Singapore Airlines (SIA) has made international headlines for the profit-sharing bonuses given to its employees, most recently 7.45 months' worth. SIA Group declared excellent financial results, with S$2.78 billion (US$2.14 billion) net profit for the fiscal year ended March 2025, boosted by a one-off S$1.1 billion gain from the divestment of stake in India-based Vistara. Emirates, a rival that is comparable in reputation to SIA, reported a record profit of US$5.77 billion People may have come to think of healthy profits as routine in aviation. But that hasn't typically been the case across the sector, according to management consultancy McKinsey. In fact, the airline industry's recent results and especially those reported by leading airlines such as SIA and Emirates have proven many analysts, including me, wrong. Most had anticipated airlines to struggle post-COVID once everyone scratched their revenge travel itch. Among the factors was that video conferencing adopted during the pandemic would persist to the point of reducing business travel, a key contributor to full-service airlines' profitability. That clearly hasn't happened. Also unanticipated were the robustness of the global economy post-pandemic and consumers' willingness to continue paying top prices amid concerns about cost of living and inflation. All these contributed to the increased yields (or the earnings for every available seat per kilometre travelled) enjoyed by carriers such as SIA compared to the pre-pandemic years. Customers are unlikely to find much respite from high fares in the short term. Demand simply outstrips supply. The International Air Transport Association expects the number of passengers to reach a record high of 4.99 billion in 2025, up 4 per cent from 2024. Airlines have faced difficulties in bringing planes that were mothballed during the pandemic back on stream constraining the supply of seats. Boeing and Airbus, which together control a large proportion of the commercial airliners made, have also told customers to expect delayed deliveries for new aircraft. They reported backlogs at the end of 2024 of over 5,500 and 8,600 aircraft respectively, considering between 600 and 800 were typically delivered each year. In particular, Boeing has had quality problems over the last few years, with the American planemaker's 2024 marked by a string of high-profile mishaps, legal challenges and the lowest number of deliveries (348) since the pandemic. AVIATION'S LONG-TERM PROSPECTS AREN'T THAT ROSY But at the risk of being wrong again, I would venture to say that air fares cannot keep going up. The long-term prospects of airlines are weaker than their short-term prospects. On the demand side, there are three reasons. First, there is a cloud of uncertainty hanging over the global economy, chiefly attributable to the prospect of a global trade war. Many economies in Asia will be dented by the imposition of United States tariffs (especially if the paused 'reciprocal' tariffs and more sector-specific tariffs come to pass), affecting the purchasing power of consumers in these countries. Equally importantly, if regional (or even within-country in the case of the US) supply chains substitute global supply chains, the multinational presence (especially of US multinationals) in Asian countries may decline, in turn impacting business travel to and from these countries. Second, employment in the tech sector – which has been a good paymaster for many people, especially the younger demographic – might struggle because of the emergence of AI and related technologies. Several recent reports suggest that layoffs by many tech companies are substantial, though it remains unclear whether these layoffs are because of the adoption of AI. Third, the recent uncertainty about the visa policies of the US might reduce the travel demand to and from the US, which will likely impact global travel demand. On the supply side, there are two reasons. New airlines may enter, especially if the yields earned by incumbent players continue to be firm. Markets with strong growth in the airline traffic such as India are already witnessing the entry of several smaller players who are not taking larger rivals head-on but competing with them regardless. As existing players aggressively add seats, yields might come down over time even if demand stays high. We are already seeing signs of this: In 2024, the US-based airlines reported record sales but not record profits. BUSTS AFTER BOOMS As always, the airline industry is also affected by uncontrollable factors such as jet fuel prices, pandemics and wars, among other things. The industry has often witnessed busts after booms, so going by past patterns, a bust may not be that far away. So, what is my advice to travellers? Maybe, for discretionary travel, they can pick and choose among destinations that offer better value while waiting for fares to moderate. For airline executives, my advice is to remain flexible by not taking on too much expansion, especially if it involves debt financing, squeezing out cost savings and strengthening their balance sheets. In other words, be ready to take advantage of the opportunities but protect your downside as well, if the environment becomes adverse.
