17-07-2019

ECONOMY & BUSINESS
10
WEDNESDAy, JULy 17, 2019
Md. Arfan Ali, President & Managing Director of Bank Asia Ltd, is inaugurating a day long training
on "Islamic Banking & Finance" for 64 Officials and Assistant Relationship Officers (AROs) from
Consumer Finance Centre (CFC) of the Bank as Chief Guest recently. Md. Abdul Matin, Training &
Development Consultant, BAITD, Sarder Akhter Hamed, Head of Channel Banking, K.S. Nazmul
Hasan, Head of PMD (HRD), A.K.M Mizanur Rahman, SVP of Islamic Banking Division, Md. Ahsan
Ul Alam, VP, Agent Banking Division, Firdaus Bin Zaman, FVP & Head of Consumer Finance and
Sujit Kumer Sen, AVP, BAITD, were present in the program at Bank Asia Institute for Training &
Development (BAITD).
Photo: Courtesy
Citigroup earnings climb
on lower expenses
Citigroup reported increased secondquarter
earnings on Monday, benefitting
from higher lending and lower expenses
despite worries over a slowing economy,
reports BSS.
The first of the large US banks to report
this week, Citigroup notched net income of
$4.8 billion, up 6.9 percent from the yearago
period.
Profits were lifted by a one-time $350
million gain from the initial public offering of
the Tradeweb trading platform, which was
led by Citigroup and other large banks.
Revenues rose 1.6 percent to $18.8 billion.
The results, the first from a group of large
financial companies to report this week,
come as the banks navigate a tricky
environment due to the continuing US-
China trade war and expectations of lower
Federal Reserve interest rates due to slowing
growth. Lower interest rates typically pinch
bank earnings.
"We navigated an uncertain environment
successfully by executing our strategy and by
showing disciplined expense, credit and risk
management," said chief executive Michael
Corbat.
The bank reported a drop in investment
banking revenues, with advisory and
underwriting revenues both falling.
But Citigroup scored increases in both total
loans and total deposits.
Expenses dropped, with the company
spending less on employee compensation
and technology investments. Citigroup also
had lower tax payments compared with the
year-ago period.
Shares of Citigroup finished down 0.1
percent at $71.71.
Other leading banks fell more than one
percent, including JPMorgan Chase, Wells
Fargo and Goldman Sachs, all of which
report earnings on Tuesday. Analysts
attributed the decline in bank shares to a fall
in US Treasury yields amid expectations for
Federal Reserve interest rate cuts.
Citigroup earnings climb
on lower expenses
Citigroup reported increased secondquarter
earnings on Monday, benefitting
from higher lending and lower expenses
despite worries over a slowing economy,
reports BSS.
The first of the large US banks to report
this week, Citigroup notched net income of
$4.8 billion, up 6.9 percent from the yearago
period.
Profits were lifted by a one-time $350
million gain from the initial public offering of
the Tradeweb trading platform, which was
led by Citigroup and other large banks.
Revenues rose 1.6 percent to $18.8 billion.
The results, the first from a group of large
financial companies to report this week,
come as the banks navigate a tricky
environment due to the continuing US-
China trade war and expectations of lower
Federal Reserve interest rates due to slowing
growth. Lower interest rates typically pinch
bank earnings.
"We navigated an uncertain environment
successfully by executing our strategy and by
showing disciplined expense, credit and risk
management," said chief executive Michael
Corbat.
The bank reported a drop in investment
banking revenues, with advisory and
underwriting revenues both falling.
But Citigroup scored increases in both total
loans and total deposits.
Expenses dropped, with the company
spending less on employee compensation
and technology investments. Citigroup also
had lower tax payments compared with the
year-ago period.
Shares of Citigroup finished down 0.1
percent at $71.71.
Other leading banks fell more than one
percent, including JPMorgan Chase, Wells
Fargo and Goldman Sachs, all of which
report earnings on Tuesday. Analysts
attributed the decline in bank shares to a fall
in US Treasury yields amid expectations for
Federal Reserve interest rate cuts.
China helps Australia's
economy grow through global
slowdown: Deloitte report
Despite a "global
slowdown," Australia's
economy has managed to stay
afloat thanks to a raft of
stimulus measures and a
surge in Chinese demand for
commodities, a new report by
Deloitte Access Economics
said on Monday, reports BSS.
While Australia has
experienced falls in the real
estate market, severe
drought, stagnant wage
growth and weak consumer
spending over the past 18
months, strength in its robust
resources sector has not
waned.
This, combined with record
low interest rates and
generous tax breaks that were
introduced by the newlyelected
Morrison government
should help keep Australia's
economy on track, Deloitte
Access Economics Partner
Chris Richardson said in the
firm's latest Business Outlook
for the month of June.
"Overall global growth
looks set to stay in the slow
lane through the rest of 2019
and through 2020 as well,
though the extent of that
slowdown looks to be
contained as central banks
start to boost their assistance
to growth, and as government
budgets do the same," he said.
"Remarkably, despite the
global slowdown, the world
has given Australia a big pay
rise, as China's stimulus
means a surge in the demand
for and prices of Australian
coal and iron ore."
Although Australia's
inflation levels remain
subdued mainly because of
low wage growth, Richardson
said the country's central
bank is now beginning to
change direction when it
comes to monetary policy.
"For years the Reserve
Bank of Australia (RBA)
thought full employment
meant unemployment of
"around 5.0 percent," but
now it thinks unemployment
can go a little under 4.5
percent before wages start to
party. Australia can go
stronger-for-longer before
inflation revs up," he said.
"But getting unemployment
under 4.5 percent is more
than the RBA can do by itself,
so official rates are headed to
0.75 percent or 0.5 percent
pretty fast, and things get
more complicated after that."
"We may be in for a phase
in which Australia joins much
of the world in having interest
rates very low for some time.
That change of tack by the
RBA is keeping the Australian
dollar under control despite
sky-high commodity prices."
In fact, according to
Richardson, weakness in the
Australian dollar is actually
helping the nation's exports
stay competitive.
"The falling Australian
dollar will gradually provide
some renewed tailwinds
(aided by Indian and Chinese
student growth). And global
commodity prices are bigger
than Christmas, generating
such a massive jump in
mining profits that, despite
their caution, more miners
are considering new
investments," he said.
"At the state level, China's
striking stimulus has
commodity prices riding
high, and that's helping
Western Australia and
Queensland get their mojo
back."
China registers
steady
investment
growth in H1
China maintained steady
growth in fixed-asset
investment in the first half of
this year, with rapid
investment growth in hightech
sectors, official data
showed Monday, reports
BSS.
The country's fixed-asset
investment grew 5.8 percent
year on year in H1, 0.2
percentage points faster than
the growth in the first five
months, the National Bureau
of Statistics said on its
website.
In the period, total
investment amounted to
29.91 trillion yuan (about 4.4
trillion U.S. dollars), the data
showed.
Private-sector investment
increased 5.7 percent to 18.03
trillion yuan, 0.4 percentage
points faster than that in the
first five months.
Fixed-asset investment
includes capital spent on
infrastructure, property,
machinery and other physical
assets.
Investment in high-tech
manufacturing surged 10.4
percent, 4.6 percentage
points faster than total
investment growth, while
investment in high-tech
services also registered fasterthan-average
growth of 13.5
percent.
Investment in the primary
industry went down 0.6
percent year on year, while
that in secondary and tertiary
industries rose 2.9 percent
and 7.4 percent, respectively.
China's real estate
investment increased 10.9
percent year on year in H1,
slower than the 11.8-percent
expansion recorded in the
first quarter, the data showed.
The figures were among a
series of indicators released
by the bureau on Monday,
including industrial
production and retail sales,
which showed that the
Chinese economy remained
on a stable track.
US-China trade
officials to talk
again 'this
week': Official
Top US and Chinese trade
negotiators are due to speak
by telephone in the coming
days, but no face-to-face talks
have been scheduled yet, US
Treasury Secretary Steven
Mnuchin said Monday,
reports BSS.
That would be the second
call in two weeks by senior
officials from Washington and
Beijing as the thaw in fraught
trade negotiations continues.
"We expect to have another
principal-level call this week,"
Mnuchin told reporters on
Monday.
"To the extent we make
significant progress, there's a
good chance we'll go there
later."
President Donald Trump
and his Chinese counterpart
last month agreed to resume
trade talks after discussions
collapsed in early May when
the American side accused
Beijing of reneging on key
commitments.
As a result, Trump jacked
up duty rates on $200 billion
in Chinese imports but agreed
last month not to move
forward with another $300
billion in import duties.
He said Monday the tariffs
are starting to bite on the
Chinese economy, which saw
its economic growth hit the
slowest pace in 27 years.
Wall Street notches fresh
records as global stocks gain
Global stocks edged higher
Monday, with US indices
notching fresh records at the
start of an earnings-rich week
following mixed Chinese
economic data, reports BSS.
Expectations for the
upcoming earnings period are
tepid.
Companies in the S&P 500
are projected to report a three
percent drop in second-quarter
profits compared with the
year-ago period, according to
FactSet. The list of companies
reporting this week includes
JPMorgan Chase, Netflix and
Johnson & Johnson.
Key headwinds to earnings
include weak demand in China
and other key international
markets, higher costs due to
tariffs and the strong US dollar,
analysts say.
"Earnings growth for the
S&P 500 in the first half of the
year has been elusive," said
Briefing.com analyst Patrick
O'Hare.
"The direct driver of the
stock market, however, has
been the persistence of low
interest rates and the friendly
reminder from the Federal
Reserve that it stands ready to
use its tools to keep the longest
economic expansion on record
going." Shaking off weakness
during the session, Wall Street
pushed into the black at the
session's conclusion, which
meant another day of records
after all three major indices
closed last week at all-time
highs.
The gains in the United
States came after a positive
session in Europe. London's
benchmark FTSE 100 index
closed 0.3 percent higher and
Frankfurt's DAX 30 put on 0.5
percent while the Paris CAC 40
edged up 0.1 percent.
Asian equities initially
stumbled but then staged a
recovery as traders digested
mixed Chinese economic data.
China's economy expanded
6.2 percent in the second
quarter, the slowest headline
reading since the early 1990s,
official data showed. The
outcome was in line with
forecasts and within the
government's target range.
Yet, despite the slowing
GDP, other figures showed
there were some bright spots in
the Chinese economy, dealers
said.
Chinese industrial output in
June rose 6.3 percent, from 5.0
percent in May. Fixed-asset
investment also picked up,
rising 5.8 percent on-year in
January-June, from 5.6
percent in January-May.
China's 1.3 billion consumers
also continued to open their
wallets, with retail sales
growing 9.8 percent year-onyear
in June, up from 8.6
percent in May.
"The Chinese data, while
confirming slowdown fears,
seems to be lifting basic
resource stocks," Oanda
analyst Craig Erlam.
"A decent rebound in
industrial production is
naturally driving this, easily
exceeding expectations, and
along with retail sales and
investment figures, arguably
indicates that worst fears are
not being realized."
The GDP number
nevertheless highlights the
negative impact the US tariffs
stand-off is having on China,
as leaders also try to
recalibrate its growth model
from exports and state
investment to one driven by
consumer spending.
Brazil's vice
president says
no restrictions
on Huawei
China's Huawei will not be
restricted in Brazil where
plans are under way to launch
a 5G network, the country's
vice president said Monday,
defying US pressure to shun
the firm, reports BSS.
Huawei, a leader in nextgeneration
5G wireless
technology, is barred from
developing 5G networks in the
United States over concerns
about its ties to the
government in Beijing and
possible security threats.
The administration of
President Donald Trump is
trying to convince its allies to
do the same.
But Hamilton Mourao, who
is considered a moderate
voice in President Jair
Bolsonaro's government, told
reporters Brazil's ties with its
biggest trade partner China
could not be "disregarded."
"There is no veto of Huawei
in Brazil. Huawei has been
here for 10 years," Mourao
said.
An auction of 5G spectrum
is expected to be held next
year.
FBCCI President attends CWBTA
Eastern India Trade Summit-2019
To explore new trading opportunities
and to build more close partnership
with the neighboring countries the
CWBTA Eastern India Trade Summit-
2019 has been organized at Kolkata
during 15-16 July, 2019. FBCCI
President is participating the summit
leading a Business Delegation of
FBCCI, a press release said.
The summit aims to interact with the
business leaders of partner countries
on business opportunities, suggestions
for ease of foreign trade, product basket
and informative exchanges.
Hon'ble Minister and Mayor of
Kolkata Mr. Firhad Hakim as Chief
Guest inaugurated the 2 day summit
this morning. Finance Minister of West
Bengal Dr. AmitMitra was also present.
High Government Officials and
Business Leaders from Thailand,
Bangladesh, Nepal, Bhutan and India
are participating at the summit.The
summit is organized by the
Confederation of West Bengal Trade
Associations.
FBCCI President Sheikh F Fahim
presented paper after the inaugural
session of the summit.In his paper
Sheikh Fahim mentioned about the
liberal and flexible investment regime
of Bangladesh offering Tax Holiday,
Tax Exemptions, Accelerated
Depreciation, Tariff Refund, Double
Taxation Prevention, 100% foreign
ownership, full repatriation of capital
invested from foreign sources etc. The
FBCCI President said about
Bangladesh's competitive strengths in
apparel, leather goods,
pharmaceuticals, frozen seafood,
ceramics, jute products, ICT, FMCG,
home appliance and others are leading
the way for business diversification.
The Private sector Leader mentioned
that, as Bangladesh is a transitioning
economy, it is imperative that our
bilateral ties reflect the potential
opportunities we have to deepen our
cooperation in:
o Joint High tech research,
development and innovationJVs
on light, medium and heavy
industries.
o Knowledge transfer to transition
from 3rd IR to 4th IR including
service sector cooperation in ICT,
nanotechnology, robotics, IOT,
cyber security, AI, EV, among
others.
o In addition, knowledge transfer
for trade, investment & revenue
regulatory framework, policy
planning
o
Business process re-engineering
of MSMEs,
o Joint exploration and Joint
ventures on blue economy.
During the absence of President and
Senior Vice President of FBCCI Mr.
Md. SiddiqurRahman, Vice President
of FBCCI acts as President.
The FBCCI Presdident along with the
delegation is expected to return to
Dhaka on 17 July 2019.
Asian markets mixed as China
growth slows further
Asian markets recovered after an early
stumble on Monday as data showed
China's economy growing at its weakest
pace in nearly three decades, hit by the
US trade war, while investors debated the
depth of an expected Fed rate cut, reports
BSS.
The world's number-two economy
expanded 6.2 percent in April-June, the
worst reading since the early 1990s but in
line with forecasts and within the
government's target range.
The reading highlights the negative
impact the US tariffs stand-off is having
on China as leaders also try to recalibrate
its growth model from exports and state
investment to one driven by consumer
spending.
"While GDP touched a 27-year low in
Q2, the on-consensus print does lessen
market fears that China's economy is
headed for a hard landing," said Stephen
Innes at Vanguard Markets.
Observers also pointed out that the
weakness raised the chances of further
monetary easing measures from the
central People's Bank of China, while
investors were also tracking the progress
of trade talks between Washington and
Beijing.
"While the PBoC has already delivered
stimulus this year, markets are awaiting a
bazooka of (bank reserve ratio) cuts and
additional measures, which will probably
come if trade talks collapse," said
OANDA senior market analyst Edward
Moya.
"If talks steadily progress, we will still
probably see the PBoC deliver fresh
stimulus following the Fed's highly
anticipated rate cut at the end of the
month." Hong Kong added 0.3 percent,
Shanghai rose 0.4 percent, and Taipei
was also up.
Sydney dropped 0.7 percent and
Wellington shed 0.3 percent. Singapore
and Seoul were also down.
Tokyo was closed for a holiday.
The initial drops came despite a recordbreaking
close for all three main indexes
in New York on Friday.